Global Fashion Group S.A.

ANNUAL

REPORT

2023

GFG AT A GLANCE

WHO WE ARE

OUR VISION IS TO BE THE #1 FASHION AND LIFESTYLE

DESTINATION IN LATAM, SEA AND ANZ.

OUR PURPOSE IS TO ENABLE TRUE SELF-EXPRESSION.

Global Fashion Group is the leading fashion and lifestyle

destination in LATAM, SEA and ANZ. As a global business with

local roots, diversity is at the heart of everything we do. This

gives real meaning to our purpose of enabling our customers to

find true self-expression. We operate under three dierent

brands in our three regions - Dafiti in LATAM, ZALORA in SEA

and THE ICONIC in ANZ.

We span 11 countries where we have significant growth

opportunities with relatively low online penetration in our large

markets. Weare only at the beginning of reaching our market

potential.

HOW WE WIN

We are the leading fashion and lifestyle destination

inourmarketsbecause:

• We oer our customers a best-in-class experience;

• We are the strategic partner of choice for

local andglobalbrands;

• We are a true local expert which underpins our

relevance for both customers and brands; and

• We strive to make every connection between

our customers, brands and employees, one that is

People & Planet Positive

BEST-IN-CLASS CUSTOMER EXPERIENCE

• Broad and relevant assortment with a large

choice ofglobaland local brands

• Inspiring and seamless digital experience

• Fast and convenient delivery

PARTNER OF CHOICE FOR BRANDS

• Unlock complex markets helping to manage

localregulations or limited infrastructure

• Oer ﬂexible business models and solutions

including Retail, Marketplace and Platform Services

to align with our partners’ own strategies

• Share our ecommerce expertise through Platform

Services which create deeper relationships with

our brand partners

PEOPLE & PLANET POSITIVE

• Climate action to mitigate our impact and

adapt to a low carbon economy

• Circularity and conscious consumption in our

contributions and by educating our customers

• Fair and ethical sourcing to ensure decent

working conditions in our supply chain

• Diversity, inclusion and belonging to empower

true self-expression

• Responsible workplace to ensure workplaces

are free from harm and enrich lives

• Responsible business to act with intent and integrity

LATIN AMERICA SOUTHEAST ASIA AUSTRALIA NEW ZEALAND

BRAZIL, COLOMBIA, CHILE INDONESIA, PHILIPPINES, SINGAPORE,

MALAYSIA, TAIWAN, HONG KONG

AUSTRALIA, NEW ZEALAND

ANNUAL REPORT 2023 | GFG

INTRO

2023 HIGHLIGHTS

€1,279 M

NMV

(14.2)% yoy

20.8 M

ORDERS

(23.1)% yoy

8.8 M

ACTIVE CUSTOMERS

(18.6)% yoy

€61.5

AVERAGE ORDER VALUE

11.6% yoy

(6.9)%

ADJ. EBITDA MARGIN

FINANCIAL SUMMARY

AND KEY PERFORMANCE

INDICATORS

See Financial Definition section 8.1, for the presentation

of the Argentina results

followingthe announcement to close

operations on 6 September 2023.

2023 2022

Financial Performance

Revenue (€m) 838.0 1,069.2

Growth at constant currency (%) (18.0) 0.0

Gross profit (€m) 352.9 452.7

Loss before interest

and taxes (EBIT) (€m) (178.5) (143.5)

Loss for the year (€m) (179.9) (174.8)

Adjusted EBITDA (€m) (58.3) (42.3)

Adjusted EBITDA / Revenue (%) (6.9) (4.0)

Capex (€m)

28.5 42.5

Financial Position

Net working capital (€m) (36.9) 10.8

Pro-forma cash (€m) 396.5 561.4

Pro-forma net cash (€m) 206.3 264.5

Group KPIs

NMV (€m) 1,279.3 1,553.6

Growth at constant currency (%) (14.2) (0.7)

Active Customers (m) 8.8 10.8

Number of Orders (m) 20.8 27.0

Order Frequency 2.4 2.5

Average Order Value (€) 61.5 57.5

All figures are presented excluding Argentina except for pro-forma

cash for which Argentina balances remain within the Group following

the close of operations.

ANNUAL REPORT 2023 | GFG

INTRO

1. COMPANY 5

1.1 Letter from our Management Board 5

1.2 Report of the Supervisory Board 6

1.3 Corporate Governance Report 11

2. GROUP MANAGEMENT REPORT 26

2.1 Fundamental Information 27

about the Group

2.2 Report on Economic Position 31

2.3 Report on Post Balance 36

Sheet Events

2.4 Report on Risks and 37

Opportunities

2.5 Report on Expected 43

Developments and Outlook

3. INDEPENDENT AUDITOR’S REPORT 44

ON THE CONSOLIDATED

FINANCIAL STATEMENTS

4. CONSOLIDATED FINANCIAL STATEMENTS 49

4.1 Consolidated Statement 50

of Profit or Loss

4.2 Consolidated Statement 51

of Comprehensive Income

4.3 Consolidated Statement 52

of Financial Position

4.4 Consolidated Statement 54

of Changes in Equity

4.5 Consolidated Statement 56

of Cash Flows

4.6 Notes to the Consolidated 58

Financial Statements

5. RESPONSIBILITY STATEMENTS 99

6. INDEPENDENT AUDITOR’S REPORT ON 100

THE PARENT FINANCIAL STATEMENTS

7. PARENT FINANCIAL STATEMENTS 103

8. ADDITIONAL INFORMATION 117

8.1 Financial Definitions 117

8.2 Information Resources 118

ANNUAL REPORT 2023 | GFG

CONTENTS

2023 was another year of significant change for GFG and a

testament to our resilience. Navigating unprecedented global

challenges, we adapted and remain confident in our future

potential.

Operating across 11 diverse countries in the dynamic online

fashion and lifestyle market, we are inherently exposed to a wide

range of factors, from macroeconomic trends to sector-specific

developments and the evolution of the online channel itself. 2023

presented a unique set of challenges – some familiar, like the

lingering eects of the pandemic and the Ukraine war leading to

our CIS exit, and some new and intensifying, such as the global

cost-of-living squeeze and heightened competition from cross-

border players.

Anticipating continued lower demand and lack of growth in 2023,

we took proactive cost measures. However, inﬂation, rising interest

rates and political uncertainties further weakened consumer

demand across all our markets. This led to sales and volumes

missing expectations, resulting in fixed cost deleverage despite

our cost actions.

In spite of these headwinds, we saw positive developments amidst

the challenges. Online penetration in our markets continued to

grow gradually in 2023, albeit at a slower pace than the pandemic

surge. With our regions at earlier stages of this online shift

compared to higher-penetrated markets, we firmly believe online

penetration will remain a long-term significant longer term growth

driver for GFG.

We navigated the year by prioritising what we could control. We

implemented cost actions, focused on inventory control, continued

with our disciplined customer acquisition and limited capital

investments. We also prioritised the growth of our Marketplace,

which carries no balance sheet risk, expanding oerings and

attracting new customers. By implementing these cost saving

measures, we achieved a breakeven quarter to conclude the year

and improved our cash ﬂow compared to 2022.

Our regional strategies also adapted to these challenges. In

LATAM, we took decisive actions to streamline the business,

including consolidating platforms, rationalising product

assortment and closing operations in Argentina. Our new LATAM

CEO, Leandro Medeiros, brings extensive experience to lead this

continued transformation. In SEA, we focused on customer loyalty

and further integrating with our brand partners, with the loyalty

programme doubling in size and Platform Services growing. In

ANZ, our new CEO, Jere Calmes, has already made significant

progress on optimising the business model with exciting plans for

2024.

Looking ahead, we understand that market uncertainties persist.

Whilst we are confident in our long-term potential, we remain

cautious on our expected timing to return to growth, recognising

the volatility we have experienced.

2023 was a year of immense change and adaptation. We remain

committed to eciency and innovation, sustainable and

responsible development and our partnerships. The actions we

have taken and the initiatives in place position us for long-term

success. We appreciate your continued trust and support as we

navigate this transformative journey together.

Christoph Barchewitz, CEO

Gunjan Soni, COO

The Management Board

Christoph Barchewitz

CEO

Gunjan Soni

COO

1.1 LETTER FROM OUR

MANAGEMENTBOARD

ANNUAL REPORT 2023 | GFG

LETTER FROM OUR MANAGEMENTBOARD

1.2 REPORT OF THE SUPERVISORY BOARD

Overview of the Management

Board and Supervisory Board

The Supervisory Board and Management Board performed their

duties in accordance with:

In accordance with usual practice, the Management Board and

Supervisory Board cooperated closely in the Financial Year 2023.

In an ongoing dialogue between the boards, the Supervisory

Board discussed strategy, planning, capital allocation, business

development, sustainability, governance and risk management

issues with the Management Board. The Supervisory Board

obtained regular and detailed information, written and verbal,

regarding the Company and it was directly involved in all

fundamental decisions impacting GFG. Additionally, the

Chairperson of the Supervisory Board has been immediately

notified of any important event and the Supervisory Board has

approved every transaction of fundamental importance for the

Company as well as transactions by members of the Management

Board and related persons with GFG. The Chairperson of the

Supervisory Board and other members of the Supervisory Board

were in regular contact with the Management Board outside of

Supervisory Board meetings.

Before adopting a resolution, any matters that require Supervisory

Board approval were explained by the Management Board and

discussed with the Supervisory Board. Discussions took place in

meetings of the Supervisory Board or its committees. Furthermore,

the Chairperson of the Audit Committee discussed audit-related

topics with the statutory auditor outside the Audit Committee

meetings and without the involvement of the Management Board.

Composition of the Supervisory

Board and Committees

According to the Articles of Association, the Supervisory Board

shall be composed of at least three members and shall be

appointed by the Annual General Meeting. For Financial Year 2023

the Supervisory Board had five members. Four members of the

Supervisory Board (Cynthia Gordon, Georgi Ganev, Laura Weil and

Carol Shen) were reappointed at the Annual General Meeting of

Shareholders (“AGM”) held on 15 June 2022 (“AGM 2022”) for a

period of three (3) years expiring at the end of the AGM that

resolves on the discharge for the Financial Year 2024. The

Supervisory Board Meeting held on 14 December 2022 temporarily

appointed John Baker to the Supervisory Board eective from

1 January 2023 in place of Victor Herrero, who resigned from the

Supervisory Board eective 1 January 2023. John Baker’s

appointment was ratified at the AGM held on 14 June 2023 for a

period expiring at the end of the AGM that resolves on the

discharge for the Financial Year 2024.

Members of the Supervisory Board are selected according to their

knowledge, capabilities, professional aptitude and competence.

The Supervisory Board acknowledges and appreciates the

importance of diversity. In Financial Year 2023, the Supervisory

Board had four committees, the Audit Committee, the

Remuneration Committee, the Nomination Committee and the

Sustainability Committee.

Composition of the Management Board

Members of the Management Board are appointed by the

Supervisory Board. Until 1 March 2023, the Management Board

was composed of three members, Christoph Barchewitz

(Co-CEO), Patrick Schmidt (Co-CEO) and Matthew Price (CFO).

Eective 1 March 2023, the Supervisory Board appointed

Christoph Barchewitz as sole CEO of GFG and he remained a

member of the Management Board. Additionally, Gunjan Soni

was appointed Group Chief Operating Ocer (“COO”) and

member of the Management Board and Patrick Schmidt stepped

down from his role as Co-CEO and Member of the Management

Board. As of 14 August 2023, Matthew Price stepped down from

his role as Group CFO and member of the Management Board.

After the foregoing changes GFG’s Management Board currently

has two members: Christoph Barchewitz (Group CEO) and

Gunjan Soni (Group COO).

• the statutory requirements applicable to the Company;

• the Articles of Association of GFG (the “Articles of

Association”);

• the Rules of Procedure of the Supervisory Board dated

1 January 2022, as amended on 17 August 2022 (the

“Supervisory Board Rules of Procedure”);

• the Rules of Procedure of the Management Board

dated 14 August 2023 (the “Management Board Rules

of Procedure”);

• the German Corporate Governance Code of

28 April 2022 (the “Code”).

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

Meetings of the Supervisory Board and its

Committees during Financial Year 2023:

Members of the Management Board attended all Supervisory

Board meetings, reporting to the Supervisory Board in detail on

GFG’s business, the development of the Company’s revenue and

profitability, and execution of its strategy. The content of the

reports by the Management Board were discussed in depth with

the Supervisory Board. The topics addressed and the scope of

the reports met the legal requirements, the principles of good

corporate governance and the requirements of the Supervisory

Board Rules of Procedure.

The individualised attendance of the Supervisory Board

members and the members of the Audit, Remuneration,

Nomination and Sustainability Committees at their respective

meetings is detailed in the table below.

Board

Member

Supervisory

Board

Audit

Committee

Remuneration

Committee

Nomination

Committee

Sustainability

Committee

Total

Attendance

rate (%)

Cynthia Gordon 8/8 4/4 4/4 1/1 3/3 100%

Georgi Ganev 7/8 1/1 88.8%

Laura Weil 8/8 4/4 4/4 100%

Carol Shen 8/8 1/1 3/3 100%

John Baker 8/8 4/4 4/4 3/3 100%

Total % Attendance 97.5%

• The Supervisory Board met eight (8) times, during

the regular board cycle and in ad-hoc meetings. The

meetings were held in person and by telephone / video

conference. The Supervisory Board passed written

resolutions;

• A sub-committee appointed by the Supervisory Board

on 22 February 2023 passed one (1) written resolution

in connection with the convening of the Annual General

Meeting;

• A sub-committee appointed by the Supervisory Board

on 9 August 2023 passed one (1) written resolution

in connection with the repurchase of a portion of the

outstanding Convertible bonds due 2028;

• The Audit Committee held a total of four (4) meetings;

• The Remuneration Committee held a total of four (4)

meetings;

• The Nomination Committee held a total of one (1)

meeting; and

• The Sustainability Committee held a total of three (3)

meetings.

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

Key Activities of the Supervisory Board

and its Committees

The Supervisory Board and / or its Committees discussed and

reviewed the following topics during Financial Year 2023:

Supervisory Board

The Management Board discussed and

reviewed the following topics:

• Changes to the Management Board;

• Standalone and consolidated financial statements for the

full financial year 2022. Financial results for the first

quarter and third quarter of 2023. Audited financial

statements for the first half of financial year 2023 and

outlook for the remainder of the financial year;

• The strategic positioning and structure of the Group

and the corporate organisation;

• 2023 Group strategic priorities;

• 2023 Budget, mid-term plan and liquidity forecast,

2023 guidance and re-forecast;

• Repurchase of a portion of the outstanding Convertible

bonds due 2028 for an amount of € 74.6 million and

€ 27 million in aggregate principal amount;

• Shutdown of the operations in Argentina;

• Liquidation of the subsidiary in Ukraine;

• Capex and investments;

• Periodic capital market and investor relations updates;

• Sustainability matters, including the review of the

sustainability strategy and targets;

• Annual review of the Dividend Policy;

• Diversity Policy applicable to the Management Board

and Supervisory Board;

• Management Board remuneration, including base

remuneration, short-term Incentives and long-term

incentive plan;

• Amendments to the Remuneration Policy, as approved

by the Annual General Meeting of Shareholders;

• Succession planning for the Management Board;

• Succession planning for the Supervisory Board;

• Composition of the Committees of the Supervisory

Board;

• The issuance of shares for legacy participations and

equity plans and the related capital increase;

• Reserved Matters in accordance with the Supervisory

Rules of Procedure;

• Agenda and process for the Annual General Meeting

of Shareholders;

• Periodic update on Legal and Governance, Risk

Management and Compliance matters;

• The Declaration of compliance with the German

Corporate Governance Code for Financial Year 2023;

• The Corporate Governance Report and Remuneration

Report for Financial Year 2022;

• The Non-Financial Report (“People & Planet Positive

Report”) for Financial Year 2022; and

• Annual Self-Review of Eciency of the Audit Committee

and Supervisory Board.

• Standalone and consolidated financial statements for

the full Financial Year 2022. Financial results for the first

quarter and third quarter of 2023. Audited financial

statements for the first half of Financial Year 2023 and

outlook for the remainder of the Financial Year;

• The strategic positioning and structure of the Group

and the corporate organisation;

• 2023 Group strategic priorities;

• 2023 Budget, mid-term plan and liquidity forecast,

2023 guidance and reforecast;

• Amendment to the guidance for Financial Year 2023;

• Repurchase of a portion of outstanding Convertible

Bonds due 2028 for an amount of € 74.6 million and

€ 27 million in aggregate principal amount;

• Closure of the operations in Argentina;

• Closure of the subsidiary in Ukraine;

• Annual review of the dividend policy;

• Capex and investments;

• Gross margins, inventories and provisions;

• Periodic capital market and investor relations updates;

• Sustainability matters, including the review of the

sustainability strategy and targets;

• Health and Safety and wellness updates;

• Review and implementation of the succession

planning for the key leaders of the Group;

• Remuneration system including the short-term

and long-term incentive programmes for employees

of the Group;

• Assessment of target achievement in relation to the

short-term incentive compensation for employees of

the Group for Financial Year 2022;

• Short-term incentive compensation target setting for

the employees of the Group for Financial Year 2023;

• Assessment of targets achievement in relation to

Performance Stock Units allocated to eligible employees

under the long-term incentive plan for Financial

Year2022;

• Allocation of restricted stock units and Performance

Stock Units to eligible participants under 2019 LTIP

and 2021 LTIP for Financial Year 2023 and determination

of related performance targets;

• The agenda for the Annual General Meeting

of Shareholders;

• Periodic governance, legal and regulatory and

compliance updates;

• Review of the Risk Register;

• Declaration of compliance with the German Corporate

Governance Code for Financial Year 2023;

• The Management Board Report; and

• The Non-Financial Report (“People & Planet Positive

Report”) for Financial Year 2022.

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

The Audit Committee discussed and reviewed the

following topics:

Area of Focus Actions Taken in 2023

Financial Reporting • Reviewed key accounting and financial reporting issues in each quarterly meeting

• Reviewed and approved standalone and consolidated financial statements for Financial Year 2022;

• Reviewed and approved quarterly financial results for Q1 and Q3 2023 and H1 2023 interim

consolidated financial statements

• Reviewed gross margins, inventories and provisions

• Reviewed the cash investment strategy

• Reviewed the financial controls status and progress

External Auditor • Received reports from the external auditor for Financial Year 2022 and H1 of Financial

period 2023 covering financial reporting, accounting and audit issues

• Reviewed and pre-approved all audit and non-audit services rendered by the external auditor

• Approved the 2023 external audit plan

• Discussed with the external auditor compliance requirements and timeline

regarding the Corporate Sustainability Reporting Directive

• Reviewed the assessment from the external auditor regarding the design and operating eectiveness

of the internal control environment including the Group’s main financial processes

• Conducted the annual review of independence and quality of the external auditors

Internal Audit Activities • Approved the Annual Internal Audit Plan for 2023 and 2024 and provided direction to risk coverage

• Followed up on high priority actions with the Management Board

Risk Management • Reviewed updates in relation to the risk assessment process, risk registers and associated actions including:

• Cyber Security and Technology

• Treasury Risk Strategy

• Reviewed summary updates in relation to the enterprise risk management framework

• Informed of risk transfer strategy with regard to central insurance procurement

• Reviewed and approved the Cyber and Information Security Risk Management Programme

and Roadmap 2023 – 2024

Internal Controls • Reviewed the annual internal controls self-assessment programme and methodology

• Reviewed summary updates on programme progress

Others • Review of Corporate Sustainability Reporting Directive (CSRD) reporting readiness and process

to be implemented as of Financial Year 2024

• Conducted annual self-assessment of the eectiveness of the Audit Committee

The significant issues considered by the Audit Committee in

relation to the financial statements for the Financial Year 2023

were:

The Remuneration Committee discussed

and reviewed the following topics:

• Revenue recognition and returns allowance;

• Inventory and inventory allowances;

• Impairment testing of goodwill and intangible assets; and

• Tax provisions, tax contingencies and deferred tax

assets.

• Assessment of targets achievement in relation to the

short-term incentive compensation of the Management

Board members for Financial Year 2023;

• Assessment of targets achievement in relation to

Performance Stock Units allocated to the Management

Board members for Financial Year 2023 under the

long-term incentive plan;

• Peers benchmarking;

• Annual compensation review for Financial Year 2023,

including review of the compensation for the

Management Board after the Management Board

changes that took place in March and August of

Financial Year 2023;

• Short-term incentive compensation target determination

for Management Board members for Financial Year 2023;

• Allocation of Restricted Stock Units and Performance

Stock Units to Management Board members for Financial

Year 2023 under the long-term incentive plan and

determination of related performance targets;

• Review of compensation framework for the Management

Board for Financial Year 2024;

• Review of the amended Remuneration Policy approved

by the Annual General Meeting of shareholders; and

• Remuneration Report for Financial Year 2023.

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

The Nomination Committee discussed and

reviewed the following topics:

The Sustainability Committee discussed and

reviewed the following topics:

The Supervisory Board satisfied itself with the auditor’s

independence and obtained a written declaration in this

respect. The financial statements and the auditor’s reports were

sent to the members of the Supervisory Board, who reviewed

the standalone and consolidated financial statements and the

management report of GFG for Financial Year 2023. The results

of the review by the Audit Committee and the results of its own

review are fully consistent with the results of the audit. Having

completed its review, the Supervisory Board has no reason to

raise any objections to the audit of the financial statements. The

Supervisory Board has therefore approved the separate and

consolidated financial statements of GFG for Financial Year 2023.

The Supervisory Board would like to thank the Management

Board and all employees of GFG for their hard work and their

high level of commitment during the Financial Year 2023.

Luxembourg, 5 March 2024

The Supervisory Board of GFG

John Baker

Member

Laura Weil

Member

Carol Shen

Member

Cynthia Gordon

Chairman

Georgi Ganev

Vice Chair

• Succession plan for the Management Board;

• Succession plan for the Supervisory Board;

• Review of the annual Supervisory Board performance

survey results and actions post survey; and

• Profile, competencies and CVs of Supervisory Board

members.

• Quarterly updates regarding GFG People & Planet

Positive Strategy;

• 2023 sustainability prioritisation plan;

• Sustainable shopping verification and credibility;

• Approval of the People & Planet Positive Report

for Financial Year 2022;

• Amendments of the Sustainability Strategy

Targets for 2030;

• Reporting requirements and limited assurance

by independent auditors regarding the Corporate

Sustainability Reporting Directive; and

• Update on the double materiality assessment required

by the Corporate Sustainability Reporting Directive.

• Review of diversity and inclusion progress against targets

and goals.

ANNUAL REPORT 2023 | GFG

REPORT OF THE SUPERVISORY BOARD

1.3 CORPORATE GOVERNANCE REPORT

Both the Management Board and Supervisory Board are

committed to upholding the principles of good corporate

governance, in accordance with the recommendations of the

Federal German Government Commission on the German

Corporate Governance Code, of 28 April 2022, which GFG has

voluntarily decided to comply with.

In August 2023, the Supervisory Board and Management Board

issued a declaration of compliance for GFG. The few deviations

from the German Corporate Governance Code are described in

the declaration. This is published within the Investor Relations –

Corporate Governance section on our website.

1.3.1 DECLARATION OF COMPLIANCE

In this statement, GFG reports in accordance with Article 68 of

the Law of 19 December 2002 on the business and companies’

accounts (the “2002 Law”).

The Company is a Luxembourg société anonyme (S.A.), which

is listed solely on the Frankfurt Stock Exchange in Germany.

The Company is not subject to the “Ten Principles of Corporate

Governance” applicable to companies listed in Luxembourg. In

addition, as a company incorporated and existing under the laws

of Luxembourg, the Company is not required to comply with the

respective German Corporate Governance Code applicable to

German stock corporations. However, as the Company’s shares

are listed on the Frankfurt Stock Exchange, the Management

Board and Supervisory Board have decided to follow, on a

voluntary basis and to the extent consistent with applicable

Luxembourg corporate law and Global Fashion Group’s

corporate structure, the recommendations of the German

Corporate Governance Code regarding the principles of good

corporate governance.

Compliance with the German Corporate

Governance Code

The Management Board and the Supervisory Board diligently

addressed compliance with the guidance of the German

Corporate Governance Code dated 28 April 2022 in Financial

Year 2023 and decided to issue a statement to a certain extent

comparable to that required for stock corporations organised

in Germany pursuant to Section 161 of the German Stock

Corporation Act (Aktiengesetz) and commented on the limited

number of exceptions. The joint declaration of conformity was

published on the Company’s website in August 2023, as follows:

Declaration of Compliance with the German

Corporate Governance Code

Global Fashion Group S.A. (“GFG” or the “Company”) is a

Luxembourg société anonyme (S.A.), which is listed solely on the

Frankfurt Stock Exchange in Germany. GFG is not subject to the

“Ten Principles of Corporate Governance” applicable to companies

listed in Luxembourg. Furthermore, as a company incorporated

and existing under the laws of Luxembourg, GFG is not required

to report on compliance with the German Corporate Governance

Code (the “Code”) applicable to listed German stock corporations.

Nevertheless, as GFG regards the Code to be an important

foundation for responsible corporate governance, the

Management Board and Supervisory Board of GFG have decided

to follow, on a voluntary basis and to the extent consistent with

applicable Luxembourg corporate law and GFG’s corporate

structure, the recommendations of the Code regarding the

principles of good corporate governance.

The Management Board and Supervisory Board of the Company

declare that GFG has decided to comply with the

recommendations of the Code in its version dated 28 April 2022,

published by the Federal Ministry of Justice in the ocial section

of the Federal Gazette on 27 June 2022, with the following

deviations since their announcement and will continue to comply

with them to the same extent in the future:

• Recommendation B.3 of the Code: The current members

of the Management Board were appointed for a maximum

period of five (5) years in line with the previous version of

the Code which was in eect when they were appointed in

May 2019. We have amended our rules of procedures to

ensure that future first-time appointments shall be for a

period of not more than three (3) years.

• Recommendation C.5 of the Code: One of the members

of the Management Board is also the Chairman of the

Supervisory Board of a non-Group listed company. The

appointment to both the Management Board of GFG and

the non-Group listed company Supervisory Board

Chairmanship were made before the Code that introduced

this recommendation came into eect. The appointment as

both a member of the Management Board and Chairman

of a non-Group listed company’s Supervisory Board has

not given rise to any conﬂicts or work management issues

to date. The Supervisory Board of GFG considers the case-

by-case assessment of the compatibility of both roles to

be more appropriate.

• Recommendation F.2 of the Code: In order to ensure high-

quality financial reporting, the recommended publication

periods may not in all cases be complied with. However, we

are constantly seeking to improve our reporting system and

intend to comply with the reporting periods of the Code in

the near future.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

• Recommendation G.1 bullet point 1 and 3 of the Code:

While annual bonuses and the size of grants under the

2019and 2021 LTIP are capped at certain percentages of

base salary, there is no cap with regard to the Company’s

share price once restricted stock units (“RSUs”) or

Performance Stock Units (“PSUs”) or stock options are

vested and delivered. In the opinion of the Supervisory

Board, such a cap would not be appropriate as it would

interrupt the intended alignment of interests between the

shareholders and the Management Board members. The

Supervisory Board believes that the Management Board

members should, in this regard, participate in any increase

in the value of the Company to the same extent as any

othershareholder would participate. The Supervisory Board

has not set a maximum total remuneration for the variable

compensation. Certain components of the Management

Board variable compensation granted before the IPO and

after the IPO, are linked to continuous employment with no

financial and non-financial performance criteria attached to

it.

• Recommendation G.3 of the Code: The Supervisory Board

uses an appropriate peer group of other relevant entities

to compare the remuneration of the Management Board,

however such peer group has not been disclosed as

representatives of the common market in which GFG

operates evolve at a fast pace and as such, the peer group

is periodically reviewed and updated by the Supervisory

Board to avoid an automatic upward trend. Consequently,

at present the Supervisory Board does not intend to

disclose the peer group.

• Recommendation G.4 of the Code: The diversified footprint

where GFG operates, combined with the large number

of employees and its localised market approach to defining

remuneration, makes it dicult for GFG to establish an

average remuneration for GFG for the purposes of

comparing the remuneration of the Management Board.

GFG targets to provide remuneration packages that are

both competitive externally and proportionate internally.

• Recommendation G.7. of the Code: Certain components

of the Management Board variable compensation granted

before the IPO and after the IPO, as a one-o grant, are

linked to continuous employment with no financial and

non-financial performance criteria attached to it.

• Recommendation G.8 of the Code: GFG Remuneration

Policy 2023 contains a special derogation procedure by

which the Supervisory Board can in exceptional

circumstances, as defined in the policy, subsequently

change the performance targets of the Management Board.

Such derogation requires a resolution of the Supervisory

Board. The Supervisory Board has not used this special

derogation procedure in deviation to recommendation

G.8 to date.

• Recommendation G.11 of the Code: The Supervisory Board

can retain a payment under the short term incentive plan

but there is no ability to reclaim any amounts paid since

applicable laws regulating the employment agreements of

the Management Board members prevent reclaiming

earnings already paid.

• Recommendation G.12 of the Code: The 2019 LTIP and 2021

LTIP give the Supervisory Board the discretion to accelerate

vesting and / or the holding period of a portion of granted

RSUs and PSUs in case of early termination without cause or

a change of control, redundancy, retirement, death, illness

and other similar circumstances. The Supervisory Board

believes this to be an adequate element of the

Management Board members’ variable compensation. The

Supervisory Board believes this to be an adequate element

of the Management Board members’ variable

compensation

• Recommendation G.13 of the Code: The employment

contracts of the Management Board provide for (i) payment

in lieu of notice (at the discretion of the Supervisory Board);

(ii) payment of pro rata short term incentive bonus; and (iii)

vesting of granted RSU and PSUs (as applicable) that are

scheduled to vest within the 12 months following the early

termination by the Company in case of a good leaver event.

The combined aforementioned payments are subject to the

severance cap recommended by the Code, except in case

of a change of control where the payment could in certain

situations exceed the recommended cap mainly driven by

the value of the Company’s share price at the time of the

early termination.

• Recommendation G.14 of the Code: The employment

agreements of the Management Board Members provide

for a partial acceleration of 75% of unvested equity in the

event of a change of control, regardless of whether such

change of control would lead to an early termination of

their employment agreement.

Luxembourg, August 2023

Global Fashion Group S.A.

The Management Board,

Christoph Barchewitz and Gunjan Soni

On behalf of the Supervisory Board,

Cynthia Gordon

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

1.3.2 BOARD COMPOSITION AND

GOVERNANCE STRUCTURE

The governance structure of the Company consists of the

Management Board and the Supervisory Board.

The Management Board is responsible for managing the

Company, and the Supervisory Board is responsible for carrying

out the permanent supervision and control of the Management

Board without being authorised to interfere with such

management. The Management Board is vested with the

broadest powers to act in the name of the Company and to take

any actions necessary or desirable to fulfil the Company’s

corporate purpose with the exception of certain matters set out

in the Articles of Association and the Management Board Rules

of Procedure which require approval of the Supervisory Board

or the Company’s shareholders.

The Management Board and Supervisory Board cooperate

closely for the benefit of the Company. The Chairperson of the

Supervisory Board has regular contact with the Management

Board and advises it on strategy, planning and business

development and the Management Board informs the

Chairperson of the Supervisory Board without delay of matters

of fundamental importance for the Company.

The corporate governance rules of the Company that govern the

Management Board and Supervisory Board are based on

applicable Luxembourg laws, the Articles of Association and its

internal regulations, in particular the Management Board Rules

of Procedure, the Supervisory Board Rules of Procedure and the

German Corporate Governance Code 2022.

The Company’s Business Conduct and Ethics Policy applies to

all employees, directors and ocers worldwide and contains

ethical and legal standards that employees, directors and

ocers must adhere to. Under the Business Conduct and Ethics

Policy, employees, directors and ocers are required to comply

with all laws and policies including but not limited to, the Anti-

Bribery and Anti-Corruption Policy, the Gifts and Hospitality

Policy, the Sanctions Policy, the Conﬂict of Interest Policy and the

Insider Trading Compliance Policy. The details are set out in

internal policies and guidelines.

Working Practices of the Management Board

The Management Board is responsible for managing the

Company in accordance with applicable law, the Articles of

Association and the Management Board’s Rules of Procedure. It

has a duty to act in the best interests of the Company and to

enhance its long-term enterprise value. The Board develops the

Company’s strategy, discusses it and agrees it with the

Supervisory Board and ensures its implementation. It is also

responsible for appropriate risk management and control. The

Management Board shall inform the Supervisory Board in a

timely and comprehensive manner of all matters relevant to the

company and shall inform the Chairman of the Supervisory

Board without undue delay of any important events or business

matters that may have a significant impact on the situation of the

company. The age limit for members of the Management Board

is set at 69 years in the Rules of Procedure of the Management

Board.

The Management Board performs its management function as

a collective body. The Management Board takes joint

responsibility for the overall management of the Company

irrespective of the split of business areas. Its members work

collaboratively and inform each other regularly about any

significant measures and events within their areas of

responsibility. The Management Board meets at least once per

calendar quarter, and additional meetings are convened, if

required.

Notwithstanding their overall responsibility for management,

the individual members of the Management Board manage the

areas assigned to them on their own responsibility within the

framework of the Management Board’s resolutions. The

allocation of responsibilities among the members of the

Management Board is defined in the Management Board Rules

of Procedure and for Financial Year 2023 each member of the

Management Board is responsible for the following areas:

Composition of the Management Board

According to the Articles of Association, the Management

Board shall be composed of at least two members. The

Supervisory Board determines the number of Management

Board members and appoints the members of the Management

Board for a maximum term of oce of 3 years. The Management

Board consists of the Group CEO and the Group COO. The

Management Board does not currently have a Chairman as the

Management Board members rotate the role of Chairman.

The Supervisory Board acknowledges and appreciates the

importance of diversity. A diverse composition of management

and supervisory bodies can promote new perspectives in

decision-making processes and discussions and help to

further improve performance. In August 2022, the Supervisory

Board formalised the previously disclosed diversity targets

by the adoption of a Diversity Policy which confirms the

Group’s approach to diversity within the composition of the

Management Board and the Supervisory Board. The Diversity

Policy is published on our website.

CEO: Christoph Barchewitz

• LATAM (Dafiti)

• ANZ (THE ICONIC)

• International Brand Partnerships

• Legal and Governance, Risk and Compliance

• Communications

• People and Culture

• Accounting

• Financial Reporting and FPandA

• Treasury

• Tax

• Internal Audit

• Investor Relations

COO: Gunjan Soni

• SEA (Zalora)

• Product and Engineering

• Data

• Cyber Security

• Sustainability

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

The Supervisory Board’s target for at least one female

representative to be appointed to the Management Board by

1 January 2025 has been achieved earlier by the appointment

of Gunjan Soni as Group COO as of 1 March 2023.

The Supervisory Board and Management Board considers that

the executive management team and employee base globally

is highly diverse. The Management Board also defined a

diversity target of maintaining a 50 / 50 gender balance on the

GFG Executive team until 1 January 2025. During the Financial

Year 2023, the Supervisory Board worked on a succession plan

for the members of the Management Board. The Supervisory

Board and Management Board will work together on keeping

the succession plan up to date.

Working Practices of the Supervisory Board

The Supervisory Board advises and supervises the Management

Board in its management of the Company. It is responsible for

the permanent supervision and control of the Management

Board. It works closely with the Management Board for the

benefit of the Company and is involved in all decisions of

fundamental importance to the Company.

The rights and duties of the Supervisory Board are governed by

legal requirements, the Articles of Association, the Supervisory

Board Rules of Procedure and the Management Board Rules of

Procedure. The Supervisory Board appoints and removes the

members of the Management Board and is responsible for

ensuring that long-term succession planning is undertaken.

The work of the Supervisory Board takes place in meetings as

well as separate committee meetings whose Chairs provide the

entire Supervisory Board with regular updates on the

committee’s activities. Pursuant to the Supervisory Board Rules

of Procedure, the Supervisory Board shall hold at least one

meeting in each calendar quarter and additional meetings

should be convened as necessary.

Composition of the Supervisory Board

The Supervisory Board must consist of at least three members

in accordance with the Articles of Association. The members of

the Supervisory Board are appointed and removed at the

General Meeting of Shareholders which determine the term and

compensation. Members of the Supervisory Board can only be

appointed for a term that does not exceed five years but can be

reappointed for successive terms.

The Supervisory Board Rules of Procedure sets targets for its

composition and sets a profile of skills that are required for

members of the Supervisory Board. According to this profile,

members of the Supervisory Board shall have the required

knowledge, abilities and expert experience to fulfil his / her

duties properly and they must be familiar with the sector in which

the Company operates. The Supervisory Board’s skills and

expertise also comprises expertise regarding sustainability

issues relevant to the Company. At least one member must

haveknowledge in the field of auditing and at least one other

member

must have expertise in the field of auditing. The

competence profile of the Supervisory Board has been published

in the Corporate Governance section of the

Company’s website.

Each member shall ensure that they have enough time to

perform their mandate. At least three members of the

Supervisory Board must have reasonable international

experience and diversity shall be considered. In addition, the

Supervisory Board has defined a diversity target of about 50%

female representation on the Supervisory Board until

1 January 2025 in the updated Diversity Policy adopted by the

Supervisory Board on 17 August 2022.

At least three members must not have a board position,

consulting or representation duties with main suppliers, lenders

or other business partners of the Company, and Supervisory

Board members shall not exercise directorships or similar

positions or advisory tasks for material competitors of the

Company. In addition, no fewer than two members shall be

independent, and no more than two former members of the

Management Board shall be members of the Supervisory Board.

The age limit for members of the Supervisory Board is set as 69

years.

At the 2022 general meeting of the shareholders held on

15 June 2022, shareholders reappointed the four members to

the Supervisory Board for a period ending at the expiration of

the General Meeting of Shareholders approving the 2024

financial results:

At the 2023 General Meeting of Shareholders, held on

14 June 2023, shareholders ratified the appointment of John

Baker as member of the Supervisory Board for a period ending

at the expiration of the General Meeting of Shareholders

approving the 2024 financial results. John Baker had been

provisionally appointed by the Supervisory Board after the

resignation of Victor Herrero as Supervisory Board member,

eective 1 January 2023. John Baker’s appointment was subject

to ratification of his appointment by the General Meeting of

Shareholders. John Baker is a member of the Supervisory Board,

member of the Audit, Remuneration and Sustainability

Committees.

The Chairperson of the Supervisory Board is an independent

supervisory chair in line with the recommendations of the German

Corporate Governance Code 2022.

• Cynthia Gordon – Chairperson of the Supervisory Board,

Chairperson of the Remuneration Committee and

of the Nomination Committee and Member of the Audit

Committee and Sustainability Committee;

• Georgi Ganev – Vice Chairperson of the Supervisory

Board and Member of the Nomination Committee;

• Carol Shen – Member of the Supervisory Board,

Chairperson the Sustainability Committee and Member

of the Nomination Committee; and

• Laura Weil – Member of the Supervisory Board,

Chairperson of the Audit Committee and Member

of the Remuneration Committee.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

During Financial Year 2023, the Supervisory Board has acted

amongst others through the Audit Committee, Remuneration

Committee, Nomination Committee and the Sustainability

Committee. The table below summarises the composition of the

Supervisory Board and its Committees from 1 January to

31 December 2023:

Board Member Supervisory Board Audit Committee

Remuneration

Committee

Nomination

Committee

Sustainability

Committee

Cynthia Gordon Chairperson Member Chairperson Chairperson Member

Georgi Ganev Vice Chairperson Member

Laura Weil Member Chairperson Member

Carol Shen Member Member Chairperson

John Baker Member Member Member Member

Working Practices of the Audit Committee

The Chairperson of the Audit Committee has specific knowledge

and experience in applying accounting principles and internal

control procedures. Another member of the Audit Committee

has expertise in the field of auditing. Neither the Chairperson of

the Supervisory Board nor former members of the Company’s

Management Board whose term ended less than two years ago

are eligible to be appointed as Chairperson of the Audit

Committee. All members of the Audit Committee are financially

literate and the Chairperson has in-depth knowledge of

accounting and the financial reporting principles required. All of

the members of the Audit Committee are independent in

accordance with the German Corporate Governance Code 2022.

The Audit Committee oversees the accounting and financial

reporting processes of the Company and the integrity of the

financial statements and publicly reported results, the adequacy

and eectiveness of the risk management and internal control

frameworks and the choice, eectiveness, performance and

independence of the internal and external auditors.

The Audit Committee also monitors the process of preparing

financial information, reviews and discusses the audited financial

statements with the Management Board members and the

independent auditor, provides a recommendation to the

Supervisory Board regarding whether audited financial

statements should be included in the annual report. In addition,

the Audit Committee reviews the half yearly and quarterly

financial statements and prepares a recommendation for the

appointment of the Independent Auditor to the Supervisory

Board. The Audit Committee also reviews the performance of

the Independent Auditor.

Working Practices of the Remuneration Committee

The Remuneration Committee assists the Supervisory Board with

oversight of its responsibilities in connection with the design and

administration of the remuneration system for the members of the

Management Board. More specifically, the Remuneration

Committee reviews and approves the Remuneration Policy and

monitors its administration. In doing so, the Remuneration

Committee sets the compensation of the Management Board

members and the associated performance targets using peer

benchmarking, corporate governance recommendations and

industry best practices. All of the members of the Remuneration

Committee are independent.

Working Practices of the Nomination Committee

The Nomination Committee assists the Supervisory Board with

oversight of its responsibilities in connection with succession

planning of the Supervisory Board and selection of candidates

appointed to the Supervisory Board. Furthermore, the Nomination

Committee assists the Supervisory Board with oversight of its

responsibilities in connection with the succession planning of the

Management Board. All of the members of the Nomination

Committee are independent.

Working Practices of the Sustainability Committee

The Sustainability Committee assists the Supervisory Board with

oversight of its responsibilities in connection with the Company’s

sustainability policies and practices. In particular, it makes

recommendations to the Supervisory Board regarding the

Company’s policy and performance in relation to health and

safety, diversity and inclusion and compliance with laws

concerning environmental and social matters and reviews their

implementation. In addition, the Sustainability Committee reviews

and approves the Company’s sustainability strategy, objectives,

key results and policies and approves for submission to the

Supervisory Board the Company’s annual sustainability report

submitted to it by the Management Board. All of the members of

the Sustainability Committee are independent.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

1.3.3 ANNUAL GENERAL MEETING AND

SHAREHO LDERS

The shareholders of the Company exercise their rights, including

their right to vote, at an Annual General Meeting (“AGM”). Each

share in the Company grants one vote.

The AGM is required to be held within the first six months of the

Financial Year, and the agenda along with the reports and

documents required for the AGM are to be published on the

Company’s website.

Certain matters set out in the Articles of Association require the

approval of shareholders. Resolutions on matters that require

shareholder approval are adopted at the AGM, including,

increasing / reducing the Company’s share capital or authorised

capital, appointment and removal of members of the Supervisory

Board and the independent auditors and resolutions on

allocation of the remainder of any annual net profit.

To facilitate the personal exercise of their voting rights, GFG

makes available a proxy who is bound by instructions and who

may also be contacted during the AGM. The invitation to the

AGM explains how instructions may be given ahead of the

meeting.

1.3.4 TAKEOVER LAW

Composition of Subscribed Capital

As of December 31, 2023, the share capital of the Company

amounts to €2,237,929.12, and is divided into 223,792,912

common shares with a nominal value of €0.01 each. The common

shares are fully paid-up. The Company holds common shares in

dematerialised form and all future common shares to be issued

by the Company will be issued in dematerialised form.

Restrictions on Voting Rights

or the Transfer of Shares

The Company’s common shares in dematerialised form are freely

transferable through book entry transfers in accordance with the

legal requirements for dematerialised shares.

Each common share carries identical rights and obligations, save

for the common shares held by the Company in treasury, from

which the Company derives no rights. As of December 31, 2023,

the Company held 278,773 common shares in treasury.

Equity Interests in the Company

That Exceed 5% of Voting Rights

On the basis of the voting rights notifications received by

the Company in accordance with Article 11, Section 6 of the

Luxembourg Transparency Law and Section 40, Paragraph1

of the German Securities Trading Act (WpHG), as at

31 December 2023 we have been notified that the following

direct or indirect shareholders in the capital of the Company have

reached or exceeded 5% of the voting rights in the Company:

Name of

Shareholder Details

Holding

Percentage

Most Recent

Declaration

Zerena

GmbH

Indirectly holds 15.17% of the voting rights of the Company, through Rocket Internet SE

who directly hold 14.63% and a further 0.23% through the holdings of MKC Brillant Services

GmbH and Bambino 53. V V GmbH.

14.86% 3 February

2022

Kinnevik

A.B.

Indirectly holds 36.99% of the voting rights in the Company through Invik S.A. who directly

hold 36.99%.

36.99% 21 December

2020

Crestbridge

Management

Company

S.A.

Indirectly holds 9.44% of the voting rights of the Company, through Rocket Internet

Capital Partners SCS who directly holds 6.00% of the voting rights of the Company,

and Rocket Internet Capital Partners (Euro) SCS who directly holds 3.45% of the voting

rights of the Company.

9.44% 4 July

2019

During 2022 and 2023, UBS Group AG notified GFG several times of changes in its indirect holding of shares and other financial instruments above and

below the 5% voting rights notification threshold. For the avoidance of doubt, UBS Group AG’s indirect holding of shares in the Company remained

below 5% in each of the notifications received. The latest notification of voting rights was published on 11 January 2024, where UBS Group AG notified

GFG of a 5.65% indirect holding of shares and other financial instruments that triggered such voting rights notification. All UBS notifications can be

found within the Financial News/Voting Rights/2022 section on GFG Website (https://ir.global-fashion-group.com/websites/globalfashion/

English/1040/financial-news.html#tab-2022).

The Company was not notified of any other direct or indirect

capital investments that reach or exceed 5% of the voting rights of

the Company during the Financial Year ended 31 December 2023.

Further, the distribution of voting rights included above may have

changed within the reportable thresholds.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Legal requirements and provisions of the Articles

ofAssociation governing the Appointment and

Dismissal of Members of the Management Board,

and amendments to the Articles of Association

The Management Board must consist of at least two persons in

accordance with Article 13.1 of the Articles of Association. In all

other respects, the Supervisory Board determines the number of

Management Board members. The Supervisory Board appoints

the members of the Management Board on the basis of

Luxembourg Company Law and Article 15 of the Articles of

Association for a term of oce lasting no longer than five years.

The Supervisory Board Rules of Procedure states that all future

appointments to the Management Board will be for a maximum

term of three years to ensure compliance with the German

Corporate Governance Code. Reappointments for successive

years are permitted. The Supervisory Board is entitled to revoke

the appointment of a Management Board member for cause

(pursuant to Article 15.3 of the Articles of Association).

Changes to the Articles of Association must be agreed at a

General Meeting of Shareholders. Unless a higher majority is

required by binding legal requirements or the Articles of

Association, resolutions proposed at the AGM are passed by a

simple majority of votes cast in accordance with Article 11.2 of

the Articles of Association. According to Article 11.5 of the

Articles of Association, a vote passed by a majority of at least two

thirds of the votes validly cast at a general meeting at which a

quorum of more than half of the Company’s capital is represented

is required in order to amend the Articles of Association.

Abstentions and nil votes shall not be taken into account.

The Company is authorised to amend the wording of the Articles

of Association after carrying out capital increases from authorised

capital or after the expiry of the corresponding authorisation,

option, or conversion period.

Authority of the Management Board

to Issue and Buy Back Shares

Authorised Capital

As at 31 December 2023, pursuant to Article 6.1 of the Articles of

the Association, the Company’s authorised capital, excluding the

issued share capital, is €2,156,423.39 represented by 215,642,339

common shares with a nominal value of €0.01 each. Pursuant to

Article 6.2 of the Articles of Association, during a period of five

years from the date of any resolutions to create, renew or increase

the authorised capital pursuant to Article 6.2, the Management

Board, with the consent of the Supervisory Board, is authorised

to issue shares, to grant options to subscribe for shares and to

issue any other instruments giving access to shares within the

limits of the authorised capital to such persons and on such terms

and subject to the limitations set out in the Special Report of the

Management Board of the Company with respect to the

authorised share capital dated 1 May 2023 (the “Special Board

Report”). The issue of such instruments will reduce the available

authorised capital accordingly.

The Special Board Report also sets out circumstances in which

the powers under the authorised capital could be used if

convening a general shareholders’ meeting would be undesirable

or not appropriate. For example, such circumstances could arise

when there is a financing need or if the convening of a

shareholders’ meeting would lead to an untimely announcement

of a transaction, which could be disadvantageous to the

Company.

As at 1 January 2023, the issued share capital of the Company

amounted to €2,202,929.12, and was divided into 220,292,912

common shares with a nominal value of €0.01 each. All of the

Company’s common shares are held in dematerialised form and

are admitted to trading on the Frankfurt Stock Exchange.

On 21 March 2023, the Company issued 3,500,000 common

shares to an employee benefit trust to satisfy the settlement of

share incentives which have been granted to current and former

employees of the Company and its subsidiaries.

As at 31 December 2023, the issued share capital of the Company

amounts to €2,237,929.12, and is divided into 223,792,912

common shares with a nominal value of €0.01 each. All of the

Company’s common shares are held in dematerialised form and

are admitted to trading on the Frankfurt Stock Exchange.

Pursuant to Article 6.3 of the Articles of Association, the

Company’s authorised capital may be increased or reduced by a

resolution of a General Meeting of Shareholders adopted in the

manner required for an amendment to the Articles of Association.

The authorisations in Articles 6.2 and 6.3 of the Articles of

Association may be renewed through a resolution of a General

Meeting of Shareholders adopted in the manner required for an

amendment of the Articles of Association and subject to the

provisions of the Luxembourg Company Law, each time for a

period not exceeding five years.

On 25 August 2023, the Company repurchased €74,600,000 of

the Convertible Bonds due 2028 issued by the Company (the

“Convertible Bonds”). The purchase price per €100,000 nominal

amount was €73,000. In addition, the Company paid interest

accrued on the Bonds from and including the immediately

preceding interest payment date to but excluding the settlement

date of the repurchase, which amounted to €553.67 per Bond. In

addition, on 31 August 2023, the Company repurchased an

additional €27,000,000 of the Convertible Bonds. The purchase

price per €100,000 nominal amount was €73,000. In addition, the

Company paid interest accrued on the Bonds from and including

the immediately preceding interest payment date to but

excluding the settlement date of the repurchase, which amounted

to €574.05 per Bond. Following the settlement of both

repurchases, an aggregate principal amount of the Bonds of

€178,300,000 in aggregate principal amount of Convertible

Bonds is outstanding.

A portion of up to 29,761,905 common shares under the

authorised share capital remains reserved for the conditional

issuance of shares under the Convertible Bonds and may not be

used for any other purposes.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Treasury Shares

According to Article 7.1 of the Articles of Association, the

Company may, to the extent and under the terms permitted by

law, repurchase its own shares and hold them in treasury. As at

31 December 2023, the Company held 278,773 common shares

in treasury. In line with Luxembourg Company Law, the voting

rights attached to the common shares held in treasury by the

Company are suspended. The Company’s Annual General

Meeting 2021 authorised the Management Board to repurchase

up to 20% of the total number of common shares of the Company

until 25 May 2026. No use was made of this authorisation for

Financial Year 2023.

Without prejudice to the principle of equal treatment of

shareholders in the same situation and the provisions of the

Luxembourg Market Abuse Law, pursuant to Article 430-15 of the

Luxembourg Company Law, the Company may acquire its own

shares either itself or through a person acting in its own name but

on the Company’s behalf subject to the following statutory

conditions:

• The authorisation to acquire shares is to be given by a

general meeting of the shareholders’, which determines the

terms and conditions of the proposed acquisition and in

particular the maximum number of shares to be acquired,

the duration of the period for which the authorisation is

given, which may not exceed five years, and in the case of

acquisition for value, the maximum and minimum

consideration;

• The acquisitions must not have the eect of reducing the

net assets of the Company below the aggregate of the

subscribed capital and the reserves, which may not be

distributed under the law or the Articles of Association; and

• Only fully paid-up shares may be included in the

transaction.

At the time each authorised acquisition is carried out, the

Management Board must ensure that the statutory conditions set

out above are complied with.

Where the acquisition of the Company’s own shares is necessary

in order to prevent serious and imminent harm to the Company,

no authorisation will be required from a general meeting of the

shareholders’. In such a case, the next general meeting of the

shareholders’ must be informed by the Management Board of

the reasons for and the purpose of the acquisitions made, the

number and nominal values, or in the absence thereof, the

accounting par value of the shares acquired, the proportion of

the subscribed capital which they represent and the consideration

paid for them.

No authorisation will likewise be required from a general meeting

of the shareholders’ in the case of shares acquired either by the

Company itself or by a person acting in his/her own name but on

behalf of the Company for the distribution thereof to employees.

The distribution of any such shares must take place within twelve

months from the date of their acquisition.

Pursuant to Article 430-16 of the Luxembourg Company Law, the

acquisition of shares is also permitted in the following

circumstances if such an acquisition would not have the eect of

reducing the net assets of the Company below the aggregate of

the subscribed capital and the Company’s non-distributable

reserves:

• Shares acquired pursuant to a decision to reduce the capital

or in connection with the issue of redeemable shares;

• Shares acquired as a result of a universal transfer of assets;

• Fully paid-up shares acquired free of charge or acquired by

banks and other financial institutions pursuant to a purchase

commission contract;

• Shares acquired by reason of a legal obligation or a court

order for the protection of minority shareholders, in

particular, in the event of a merger, the division of the

Company, a change in the Company’s object or form, the

transfer abroad of its registered oce or the introduction of

restrictions on the transfer of shares;

• Shares acquired from a shareholder in the event of failure to

pay them up; and

• Fully paid-up shares acquired pursuant to an allotment by

court order for the payment of a debt owed to the Company

by the owner of the shares.

Generally, such acquired shares must be disposed of within a

maximum period of three years after their acquisition or they

must be cancelled. There are some statutory exceptions to this.

Material agreements entered into by the

companyproviding for a change of control upon

atakeover bid

The Convertible Bond is subject to the condition of a change of

control. In the event of a change of control, each bondholder is

entitled to convert their bonds at a preferential conversion price

on the control acquisition date.

Compensation arrangements agreed by the

company with the Members of the Management

Board or employees in the event of a takeover bid

In the event of a change of control, certain unvested awards

granted to the Management Board under the 2019 LTIP and 2021

LTIP will vest at the time of the change of control.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

1.3.5 REMUNERATION REPORT AND

OTHER DISCLOSURES

This report provides information about the structure of the

remuneration framework and how it is operated at GFG. There

is a remuneration report for the Management Board and the

Supervisory Board.

Our Approach to Reporting

The approach to how we structure and report remuneration at

GFG reﬂects the following considerations:

• As a Company incorporated and existing under the laws of

Luxembourg, the remuneration report has primarily been

prepared in accordance with Luxembourg’s Law of

24 May 2011 (as amended from time to time).

• Recognising that it is an important foundation for

responsible corporate governance, the Company also

voluntarily follows, to the extent that it is consistent with

Luxembourg corporate law and GFG’s corporate structure,

the recommendations of the German Corporate

Governance Code 2019, amended in 2022 (the “Code”) with

certain exemptions, as set out in our Declaration of

Compliance, 17

August 2023.

Management Board Remuneration Report

Management Board Remuneration Framework

GFG shareholders approved the revised Remuneration Policy at

our 2023 Annual General Meeting (“AGM”), which includes the

remuneration framework applicable to members of the

Management Board. The remuneration framework at GFG is

designed to incentivise and reward for performance that will

lead to long-term and sustainable growth in shareholder value.

To this end, the remuneration framework has been built around

the following key principles:

• Balanced package - appropriate balance between fixed

and variable and short- and long-term elements of pay

• Long-term alignment - variable components align with

and incentivise the delivery of long-term sustainable

performance

• Strategic alignment - framework aligned with GFG’s key

strategic objectives and overall economic performance

• Competitiveness - allows GFG to compete for talent in the

key markets and industry in which it operates

With these principles in mind, the Management Board

remuneration framework is shown in more detail below.

Element Purpose Delivery

Salary

Fringe Benefits

Pension

Contributions

For performing

day-to-day role

and saving towards

retirement

Paid

Monthly

Paid in

cash

Annual Bonus

Paid in

cash

Performance

measured

over

one year

Incentivises and rewards

the delivery of key annual

performance objectives

Share-based

Long-Term

Incentive

Released -

Paid in

Tranche 1 (1/3rd)

Vested after 1 yr

Holding Period

Tranche 2 (1/3rd)

Vested after 2 yrs

Holding

Period

Tranche 3 (1/3rd)

Vested after 3 yrs

Incentivises and rewards

the delivery of longer-

term goals aligned

with shareholder value

creation

Fixed Remuneration Variable Remuneration

year 0 year 1 year 2 year 3 year 4 year 5

The framework is intended to place appropriate balance

between fixed and variable remuneration, and particular

emphasis on the long-term element when setting annual

compensation packages. We invite you to read the details of

the actual remuneration mix for FY2023 on page 19. A long-

term focus helps ensure that Management Board members

should only receive significant reward for delivering strong and

sustainable performance. GFG has voluntarily elected to

comply with the German Code of Corporate Governance,

including the 4 year holding period recommended for Share-

based Long-Term Incentives of the Management Board

thereunder. It also clearly aligns the interests of the Management

Board with those of GFG’s shareholders.

Further information on each element of remuneration is provided

in the table below, while our Remuneration Policy Report (as

approved by shareholders at our 2023 AGM) provides further

technical details.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Management Board Remuneration for 2023

This section details the actual remuneration and benefits

granted to the Management Board during the Financial Year

2023. All remuneration awarded to the Management Board

during 2023 was in line with the Company’s Remuneration Policy.

Until 1 March 2023, the Management Board was composed of

three members, Christoph Barchewitz (Co-CEO), Patrick Schmidt

(Co-CEO) and Matthew Price (CFO). Eective 1 March 2023, the

Supervisory Board appointed Christoph Barchewitz as sole CEO

of GFG Group and he remained a member of the Management

Board. Additionally, Gunjan Soni was appointed Group COO

and Member of the Management Board and Patrick Schmidt

stepped down from his role as Co-CEO and Member of the

Management Board. As of 14 August 2023, Matthew Price

stepped down from his role as Group CFO and Member of the

Management Board, with his last day of employment being

31 August 2023.

Therefore tables below set out (i) each individual’s total

remuneration in relation to 2023 and other relevant information,

and (ii) their resulting balance of fixed and variable pay. The

remainder of the section provides further information on the

figures show. For the Management Board members that have

either joined or stepped down from the Management Board, all

data below is prorated for tenure accordingly. In the case of Mr

Matthew Price the compensation is pro rata from 1 January 2023

to 14 August 2023 and for Ms Gunjan Soni pro rata from

1 March 2023 to 31 December 2023.

i) Management Board – Individual Total Remuneration

Christoph Barchewitz (Chief Executive Officer)

year of Appointment to the Management Board: 2019

In €

Benefits Granted Benefits Received

2023 (Min.) 2023 (Max.) 2022 2023 2022

Fixed Remuneration 751,641 751,641 663,779 751,641 663,779

Fringe Benefits 36,488 36,488 34,586 36,488 34,586

Total (fixed components) 788,130 788,130 698,365 788,130 698,365

Short-Term Incentive – 845,597 597,401 281,866

398,267

Long-Term Incentive

–

1,070,400

579,999 – –

Total (variable components) – 1,915,997 1,177,400 281,866 398,267

Pension Supplement 75,164 75,164 66,378 75,164 66,378

Total Remuneration

863,294 2,779,290 1,942,143 1,145,159 1,163,010

Mr. Barchewitz was appointed as Co-CEO on 01 February 2018 and CEO on 01 March 2023

As the remuneration for Mr. Barchewitz is denominated in British pounds, exchange rates of 1£ / 1.16€ and 1£ / 1.13€ have been used for 2023 and 2022

respectively

Reﬂects an overall performance outcome of 50% of target

The value of Long-Term Incentives are based on the fair value determined at the grant date

The first tranche of the 2023 grant under the LTI Plan which was made during the reporting period (grant date of 27 March 2023) will vest on 30 April 2024

and remains subject to the holding period until 30 April 2027. The remaining tranches will vest on 30 April 2025 and 30 April 2026 and remain subject to

the same holding period

Gunjan Soni (Chief Operating Officer)

year of Appointment to the Management Board: 2023

In €

Benefits Granted Benefits Received

2023 (Min.) 2023 (Max.) 2022 2023 2022

Fixed Remuneration 419,750 419,750 – 419,750 –

Fringe Benefits 22,970 22,970 – 22,970 –

Total (fixed components) 442,720 442,720 – 442,720 –

Short-Term Incentive – 377,775 – 125,925 –

Long-Term Incentive

– 355,014 – 58,888

–

Total (variable components) – 732,789 – 184,813 –

Pension Supplement 41,975 41,975 – 41,975 –

Total Remuneration 484,695 1,217,484 – 669,508 –

Ms. Soni was appointed as COO on the 01 March 2023

As the remuneration for Ms. Soni is denominated in Singapore Dollars, exchange rates of 1S$/0.69€ has been used for 2023

The value of Long-Term Incentives are based on the fair value determined at the grant date

The tranches that vested in 2022 came out of holding and were delivered

NNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Patrick Schmidt (Co-Chief Executive Officer)

year of Appointment to the Management Board: 2019

In €

Benefits Granted Benefits Received

2023 (Min.) 2023 (Max.) 2022 2023 2022

Fixed Remuneration 507,917 507,917 609,500 507,917 609,500

Fringe Benefits 7,779 7,779 25,738 7,779 25,783

Total (fixed components) 515,696 515,696 635,238 515,696 635,238

Short-Term Incentive – 457,125 548,550 – 365,700

Long-Term Incentive

– – 579,999 256,289

–

Total (variable components) – 457,125 1,128,549 256,289 365,700

Pension Supplement 10,158 10,158 30,475 10,158 30,475

Total Remuneration 525,854 982,979 1,794,262 782,143 1,031,413

Mr. Schmidt departed the business on 30 April 2023

As the remuneration for Mr. Schmidt is denominated in Danish Krone, an exchange rate of 1DKK / 0.13€ has been used for 2023

The value of Long-Term Incentives are based on the fair value determined at the grant date

For the tranches that vested in 2023, shares were delivered at Fair Market Value at the vesting date to cover the tax liability that crystallised upon vesting,

further details of which have been provided in the Annual Report 2021. The proceeds remain under holding. Subsequently, the 2019 award came out of

holding on 30 September 2023 and was delivered

Matthew Price (Chief Financial Officer)

year of Appointment to the Management Board: 2019

In €

Benefits Granted Benefits Received

2023 (Min.) 2023 (Max.) 2022 2023 2022

Fixed Remuneration

361,807 361,807 527,198 361,807 527,198

Fringe Benefits – – 1,524 – 1,524

Total (fixed components) 361,807 361,807 528,722 361,807 528,722

Short-Term Incentive – 325,627 474,478 108,542

316,319

Long-Term Incentive

(Total) – – 579,000 85,266 –

Total (variable components) – 325,627 1,053,478 193,808 316,319

Pension Supplement 36,181 36,181 52,720 36,181 52,720

Total Remuneration 397,988 723,615 1,634,920 591,796

897,761

Mr. Price departed the business on 31 August 2023

As the remuneration for Mr. Price is denominated in British pounds, exchange rates of 1£ / 1.16€ and 1£ / 1.13€ have been used for 2023 and 2022 respectively.

Reﬂects an overall performance outcome of 50% of target

The value of Long-Term Incentives are based on the fair value determined at the grant date

The 2019 award came out of holding on 30 September 2023 and was delivered

ii) Management Board Individual Remuneration Mix

Benefits Granted Benefits Received

2023 Min. 2023 Max 2023

Christoph Barchewitz

Fixed Remuneration 100% 31% 75%

Variable Remuneration 0% 69% 25%

Gunjan Soni

Fixed Remuneration 100% 40% 72%

Variable Remuneration 0% 60% 28%

Patrick Schmidt

Fixed Remuneration 100% 53% 67%

Variable Remuneration 0% 47% 33%

Matthew Price

Fixed Remuneration 100% 55% 67%

Variable Remuneration 0% 45% 33%

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Salary

In Q1 2023, we updated our previous industry peer benchmarking

exercise for the Management Board members done with our

external independent advisory partners. The results indicated

that the base salaries were competitive and relevant to this peer

group for our Management Board. The committee considered

the overall market benchmarking along with the sizable increase

in scope and responsibility as sole CEO and determined an

adjustment of 10% increase to base salary awarded for Mr.

Christoph Barchewitz.

Separately, Mr. Patrick Schmidt received a partial payment equal

to 6 months salary of his contractual 9 month notice period and

was paid in lieu upon stepping down from his role as Co-CEO

and Member of the Management Board.

Fringe Benefits

Benefits which the Management Board members received during

2023 and which are captured in the figure shown on the prior

page include health insurance, life and income protection

insuranc

e aligned to the contractual agreements.

Pension Contributions

For 2023, Mr. Christoph Barchewitz, Ms. Gunjan Soni and Mr.

Matthew Price were provided with a cash supplement in lieu of

pension participation of 10% of base salary. Mr. Patrick Schmidt

was provided with a cash supplement in lieu of pension

participation of 5% of base salary. The supplement was paid with

the monthly base salary and pro rata for the period worked in the

case of Mr. Patrick Schmidt and Mr. Matthew Price.

2023 Annual Short Term Incentive

At the start of 2023, financial performance targets and non-

financial targets were set for the Management Board under the

Short-Term Incentive Program. The Short Term Incentive target

payout was adjusted from 60% to 75% of base salary for on target

achievement for Mr. Christoph Barchewitz as the sole CEO. For Ms.

Gunjan Soni, the target payout opportunity was 60% of base salary

for on target achievement, reﬂecting the amended Remuneration

Policy approved at the 2023 Annual General Meeting.

The financial metrics for the 2023 Short Term Incentive, which

represent 80% of the total opportunity, were NMV Growth (20%),

Adjusted EBITDA (40%) and Cash ﬂow (40%). The non-financial

metrics which represent 20% of the total opportunity relate to our

Sustainability objectives which we introduced as targets in 2022 in

line with our commitment to become a leader in sustainability.

These non-financial metrics are aligned with the annual milestones

required to deliver our publicly communicated Sustainability

Commitments. For 2023, the sustainability related non-financial

metrics both achieved the 2023 milestone targets and focused on

the following two strategic goals:

• % NMV from products made using majority sustainable

materials and / or eco-friendly production

• % of third-party brands meeting GFG’s human rights

standards for brands

The Supervisory Board assessed the 2023 performance against

the agreed Short Term Incentive targets and in doing so

considered the financial performance of the Group for the full

year, and the outcome of the non-financial targets. Based on

overall financial and non-financial targets during 2023, the

Supervisory Board has determined that the annual bonus

achievement was at 50% of overall.

Financial Metrics

Weighting Target Achievement Weighted Pay-out

A combination of key financial metrics, aligned with GFG’s short-term business priorities

NMV (YoY %) 16% of total 2.0% (14.2)% 0%

Adjusted EBITDA (€m) 32% of total (8.0) (58.3) 0%

Cash ﬂow (€m)

32% of total (65.0) (67.6) 28.7%

Sustainability Objectives

Weighting Target Achievement Weighted Pay-out

Sustainability objectives for Management Board member focused on GFG’s strategic sustainability priorities

Climate Action

10% of total 15.5%

% NMV from products

made using majority

sustainable materials

and / or eco-friendly

production 15.8% 10.4%

Fair and Ethical Sourcing

10% of total 10.3%

Third-party brands % of

brands meeting GFG’s

human rights standards

forbrands 11.1% 10.9%

Total 2023 Annual Bonus 50% Achievement

The cash ﬂow performance target excludes exceptional items, one-o items and funding activities

NNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Long Term Incentive (“LTIP”): Awards Granted During 2023

During the Financial Year 2023, Management Board members,

Mr. Christoph Barchewitz and Ms. Gunjan Soni received awards

under the GFG Share Plan. Awards were granted in the form of

PSUs, reﬂecting GFG’s pay for performance ethos to both

Members, additionally the Supervisory Board also determined

a single first year RSU Award for Ms Gunjan Soni specifically to

support her transition to the Management Board.

RSU/PSU awards are divided into three equal tranches, vesting

after 1, 2 and 3 years respectively. The metrics and targets for

each tranche are set annually at the start of each Financial Year.

The extent to which the targets are achieved determines the

vesting level for the associated tranche. All tranches are subject

to a holding period of 4 years from grant.

2023 Grant

Tranches

Achievement Based on

FinancialYear Metrics and Targets

Tranche 1 – vesting 2024 1 Jan – 31 Dec 2023

Tranche 2 – vesting 2025 1 Jan – 31 Dec 2024

Tranche 3 – vesting 2026 1 Jan – 31 Dec 2025

The performance conditions attached to Tranche 1 of the 2023

Grant − NMV Growth in Constant Currency and Adjusted

EBITDA as a percentage of Revenue − remain aligned with GFG’s

key strategic areas of focus and incorporate realistic yet

stretching organisational targets.

Management

Board Member

# RSU

Granted

(2023 Grant)

# PSU Granted

(2023 Grant)

’On Target’ ’At Maximum’

Christoph

Barchewitz – 420,000 600,000

Gunjan Soni 99,999 208,599 297,999

The Supervisory Board awarded in Financial Year 2023 a further

performance grant of 600,000 units to Mr. Christoph Barchewitz

with the specific aim of rewarding an acceleration of the company’s

financial performance in the next 3 years (i.e. 2023 – 2026). The

award is structured with specific stretch performance criteria

of achievement of Adjusted EBITDA breakeven and positive

Normalised Free Cash Flow by end of 2026.

Awards are subject to malus and clawback provisions for four

years from grant, with trigger conditions which include material

misstatement, an error in assessing the performance condition,

serious misconduct or material error on behalf of the participant,

as well as other circumstances as considered appropriate by the

Supervisory Board.

Long Term Incentive: Outstanding Awards

The LTIP Overview table provides further information for each

Management Board member as to the number of units outstanding

under the GFG Share Plan and the 2016 LTIP legacy plan. The

Awards made during 2023 (as described above) can be seen under

the line “Granted during the reporting period.”

The Remuneration Committee and Supervisory Board extended

from four to five years the holding period applicable to 460,321

shares granted to Christoph Barchewitz in September 2019 that

were subject to a four year holding period and were scheduled to

be released on 30 September 2023. Therefore, the release of

460,321 shares is scheduled for 30 September 2024.

The Company did not apply malus or clawback with respect to any

awards held by Management Board members during the Financial

Year 2023.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

LTIP Overview (unless otherwise stated this table refers to the GFG Share Plan)

Christoph Barchewitz

Gunjan Soni

RSUs PSUs

Stock

Options RSUs PSUs

Stock

Options

Outstanding at the beginning

ofthereportingperiod 410,799 806,671 608,175 144,999 238,610 107,080

Granted during the reportingperiod – 1,200,000

– 99,999 297,999

–

Vested during the reportingperiod 33,333 180,596

– 48,333 30,816

–

Delivered during the reporting period

– – – 33,333 45,987 –

Forfeited / expired during

thereportingperiod

– 61,993

– – 61,169

–

Exercised during the

reportingperiod (2016 LTIP) – – – – – –

Outstanding at the end of

thereportingperiod

410,799 1,944,678 – 211,665 429,453 –

Exercisable at theend of

thereportingperiod – – 608,175

– – 107,080

Patrick Schmidt

Matthew Price

RSUs PSUs

Stock

Options RSUs PSUs

Stock

Options

Outstanding at the beginning of the

reportingperiod 307,199 657,266 671,517 288,159 439,929 –

Granted during the reportingperiod – – – – – –

Vested during the reportingperiod 33,333 180,596

– 33,333 100,580

–

Delivered during the reporting period

240,533 266,087 – 188,160 67,893 –

Forfeited / expired during

thereportingperiod

66,666 312,493

– 66,666 200,461

–

Exercised during the

reporting period (2016 LTIP) – – – – – –

Outstanding at the end of

thereportingperiod

– 78,686 – 33,333 171,575 –

Exercisable at theend of

thereportingperiod – – 671,517

– – –

Appointment to the Management Board in June 2019

Appointment to the Management Board in March 2023

The grant is subject to multi-year performance criteria with a 3 year vesting schedule

Based on PSU performance conditions achievement during the performance period (i.e. 74.44% of maximum opportunity)

Based on PSU performance conditions achievement during the performance period (i.e. 33.5% of maximum opportunity)

Represents the non-vested portion of the PSUs resulting from the performance conditions achieved vs. maximum potential

Options with strike prices ranging from €5.37 to €7.99. No more options will be granted under this programme

Options with strike prices ranging from €0.01 to €7.99. No more options will be granted under this programme

Options (cash awards) with strike prices ranging from €5.99 to €15.97. No more options will be granted under this programme

Including all units under holding

Change in Pay of Management Board Members

The diverse geographical footprint where GFG operates,

combined with over 4,400 employees globally as at

31 December 2023, our approach to defining appropriate

remuneration is localised to the countries and employment law

landscape. This makes it dicult for the Company to establish

an average remuneration for GFG for past financial years for the

purpose of comparing the remuneration of the Management

Board. GFG strives to provide remuneration packages that are

both competitive externally and proportionate internally for the

markets in which we operate. For comparison externally against

peers in the sector in which we operate and that are comparable

and representative of the markets, the remuneration of the

Management Board is in line with our sector median total cash

level.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

Supervisory Board Remuneration Report

The remuneration of the members of the Supervisory board is

established by the Shareholders of the Company in accordance

with its Articles of Association. The remuneration of the

Supervisory Board members was approved at the Annual

General Meeting of Shareholders held on 14 June 2023. The

table below shows the current Supervisory Board Fee structure:

Supervisory Board

Audit

Committee

Sustainability

Committee

Remuneration

Committee

Nomination

Committee

Chairman €40,000 (cumulative with

Member fee)

€40,000 €20,000 €25,000 €10,000

Deputy

Chairman

€10,000 (cumulative with

Member fee)

n / a n / a n / a n / a

Member €30,000 €10,000 €10,000 €10,000 €5,000

The remuneration is payable in monthly instalments through the

reporting period. The table below sets out the total remuneration

paid to each Supervisory Board member individually for the

Financial Year 2023. The Remuneration of the Supervisory Board

has remained constant in the last years with a slight amendment

in Financial Year 2022 when the Remuneration and Nomination

Committee we put in place.

Board Member Supervisory Board Positions Fees (€) FY2023 Total Fees (€) FY2023

Cynthia Gordon Supervisory Board Member

Supervisory Board Chair

Audit Committee Member

Remuneration Committee Chair

Sustainability Committee Member

Nomination Committee Chair

30,000

40,000

10,000

25,000

10,000

125,000

Georgi Ganev Supervisory Board Member

Supervisory Board Deputy Chair

Nomination Committee Member

30,000

10,000

5,000

45,000 (Waived)

Laura Weil Supervisory Board Member

Audit Committee Chair

Remuneration Committee Member

30,000

40,000

10,000

80,000

Carol Shen Supervisory Board Member

Remuneration Committee Member

30,000

20,000

50,000

John Baker Supervisory Board Member

Audit Committee Member

Remuneration Committee Member

Sustainability Committee Chair

30,000

10,000

60,000

Georgi Ganev waived his entitlement to remuneration for the reporting period. However, this waiver can be removed for future reporting periods.

Additionally, GFG reimburses the Supervisory Board members

their expenses related to the Supervisory Board mandate. GFG

also provides directors and ocers insurance coverage for the

Supervisory Board members without any deductible payable by

the Supervisory Board member.

1.3.6 FINANCIAL REPORTING

At the AGM on 14 June 2023, Ernst and Young (“EY”) were

re-elected as the independent auditor of the standalone and

consolidated financial statements. In preparation, Ernst and

Young presented a statement of compliance with the relevant

ethical requirements on independence and disclosed that there

are no business, financial, personal or other relationships

between the auditor, its governing bodies and audit managers,

on the one hand, and the Company and its directors, on the

other, which could give cause to doubt the auditor’s

independence.

ANNUAL REPORT 2023 | GFG

CORPORATE GOVERNANCE REPORT

CONTENTS

SECTION2

2.1 FUNDAMENTAL

INFORMATION

ABOUT THE GROUP 27

2.2 REPORT ON

ECONOMIC

POSITION 31

2.3 REPORT ON

POST BALANCE

SHEET EVENTS 36

2.4 REPORT ON RISKS

AND OPPORTUNITIES 37

2.5 REPORT ON EXPECTED

DEVELOPMENTS AND

OUTLOOK 43

GROUP

MANAGEMENT

REPORT

ANNUAL REPORT 2023 | GFG

GROUP MANAGEMENT REPORT

2.1 FUNDAMENTAL INFORMATION

ABOUT THE GROUP

2.1.1 BUSINESS MODEL AND

OUP STRUCTURE

Business Model

Global Fashion Group (GFG) is the leading fashion and lifestyle

destination in 11 countries across Latin America, Southeast Asia,

and Australia New Zealand. We oer our customers a one-stop

shop experience on our inspiring and seamless platforms,

featuring a broad and relevant assortment of products.

Our three ecommerce platforms operate under individual brand

names:

• Dafiti: Brazil, Chile and Colombia

• ZALORA: Indonesia, the Philippines, Singapore,

Malaysia,Taiwan and Hong Kong

• THE ICONIC: Australia and New Zealand

GFG connects 800 million consumers with thousands of brands

on these well-established platforms.

Our customers are young, diverse, highly engaged and digitally

native. They are predominantly female and typically aged

between 15 and 45 years. With over 33 million social media

followers across the top five social media platforms in our

markets, GFG’s customers demonstrate their openness to

purchase products online and a high level of engagement by

interacting with our content and apps.

GFG reﬂects the scale and diversity of our markets by engaging

customers with a broad and relevant assortment. We oer all of

the key fashion and lifestyle categories, including apparel,

footwear, accessories, beauty and sportswear, across a mix of

thousands of global, local and own brands, tailored to meet

aesthetic, cultural, sizing and price preferences.

Our products are sourced from our brand partners through two

business models:

• Retail: GFG owns the inventory of products sold to

customers; and

• Marketplace: Brand partners retain ownership of inventory

and list their products on our apps and websites.

A large proportion of our brands operate across both models.

In2023, Marketplace share grew to 38% of NMV.

As the only online pure-play fashion and lifestyle platform of

scale in our markets, GFG facilitates brands’ market entries and

helps them overcome the local challenges of customer

acquisition, logistics, infrastructure and regulatory processes.

GFG also assists its brand partners in developing their overall

ecommerce capabilities by providing distinct Platform Services,

including:

• Operations by GFG: Fulfilment services for products

that brands sell via our Marketplace or their other online

channels (ownor third-party);

• Marketing by GFG: Paid marketing services to promote

brands’ products; and

• Data by GFG: Data analytics across customers, trac

and product.

Our operational infrastructure is fashion-specific, highly ecient

and scaled for growth with:

• Seven regional fulfilment centres with a total storage

capacity of over 24 million items;

• Fulfilment, payment options and customer support

all locally tailored to each market;

• Reliable last-mile delivery, with a wide range of payment

options available across our markets; and

• 24/7 in-house customer support, achieving a Net Promoter

Score (“NPS”) of 77 in 2023.

Our technology platform and infrastructure is a key dierentiator

with:

• An experienced and commercially focused global

technology team of more than 600 software engineers

and data scientists;

• Scalable, custom-built platform integrated within each

region to reﬂect the global and local nature of our business;

• Tailored technology stacks for each major market, providing

substantial ﬂexibility and enabling us to eciently respond

to local business expectations and regulatory requirements;

• Data science teams at the forefront of innovation, creating

smart solutions based on deep and relevant insights that

our technology teams leverage daily to improve our front-

ends; and

• Technology led planning and scheduling of assortment

for buying and merchandising to accurately match customer

preferences.

ANNUAL REPORT 2023 | GFG

FUNDAMENTAL INFORMATION ABOUT THE GROUP

GFG has a highly diverse and global team of almost 4,500

people with deep local know-how. More than 96% of our

colleagues are based in the countries where we operate. Our

people have a passion for fashion, lifestyle and technology,

expertise in adapting to changing needs and strong capabilities

to combine the art and science that creates our compelling

customer and brand proposition.

Group Structure

Global Fashion Group S.A. (“the Company”) is a stock corporation

(société anonyme) under the laws of the Grand Duchy of

Luxembourg and registered in the Luxembourg Trade and

Companies Register (RCS B 190.907). GFG is domiciled in

Luxemb

ourg with its registered oce located at 5, Heienha

L-1736 Senningerberg. Please refer to section1.3.4 of the Group

Annual Report for composition of subscribed capital and own

shares and refer to section 1.3.5 for shares awarded to

employees.

The Company is the parent company of the Group. The Group

comprises all subsidiaries whose financial and business policies

can be controlled by the Company, either directly or indirectly.

The Group’s business is conducted by the Company and its

various subsidiaries.

As at 31 December 2023, 51 entities are consolidated in the

consolidated financial statements of the Group. See n

ote 7 in the

notes to the consolidated financial statements for more

information.

Global Fashion Group S.A. (Luxembourg)

ZALORA

(Hong Kong, Indonesia, Malaysia,

Singapore, Taiwan)

100%

ZALORA Philippines

(Philippines)

51%

SOUTH EAST ASIA

THE ICONIC

(Australia, New Zealand)

100%

ANZ

Dafiti

(Brazil, Chile,

Colombia)

100%

LATIN AMERICA

Dafiti operations are conducted by GFG Comercio Digital Ltda. in Brazil, Bigfoot ChileSpA in Chile and Bigfoot Colombia SAS in Colombia.

ZALORA operations are conducted by ZALORA (Hong Kong) Ltd. in Hong Kong, PT Fashion Eservices Indonesia in Indonesia, Jade E-Services Malaysia SDN

BHD in Malaysia and Jade E-Services Singapore Pte. Ltd. in Singapore and Taiwan.

ZALORA Philippines operations are conducted by BF Jade E-Services Philippines Inc.

THE ICONIC operations are conducted by Internet Services Australia 1 Pty Ltd. in Australia and New Zealand.

Business Segments

The Group consists of three operating segments, which also

represent its reportable segments: LATAM, SEA and ANZ.

LATAM

GFG operates under the Dafiti brand, launched in 2011, in Brazil,

Chile and Colombia.

SEA

GFG operates under the ZALORA brand, launched in 2012, in

Indonesia, the Philippines, Singapore, Malaysia, Taiwan and

Hong Kong.

ANZ

GFG operates under THE ICONIC brand, launched in late 2011,

in Australia and New Zealand.

ANNUAL REPORT 2023 | GFG

FUNDAMENTAL INFORMATION ABOUT THE GROUP

2.1.2 CORPORATE STRATEGY

Our vision is to be the #1 fashion and lifestyle destination in our

markets. Our purpose is to enable true self-expression. In order to

achieve our long-term vision and execute on our purpose, we

focus on three strategic priorities which are all underpinned by our

true local expertise.

1. Best-in-Class Customer Experience

Broad and relevant assortment

GFG oers a wide range of products from over 6,000 global and

local brands, including our own brands with exclusive products.

We cover all the major fashion and lifestyle categories and brand

segments. Apparel and footwear represents the majority of our

business at 47% of NMV and followed by sport at 26%. We have

also expanded into adjacent categories such as beauty and home

to become a one-stop destination for customers. Our premium

brand segment is our fastest growing and reached 17% of NMV

in 2023.

Our Marketplace business model allows us to expand our

assortment without taking on inventory risk. As a result, 83% of

our top 30 global and local brand partners have adopted a hybrid

partnership model, moving some of their products onto our

Marketplace.

Inspiring and seamless digital experience

After carefully curating the right brands and products, GFG

engages and inspires our customers with a superior shopping

experience. Our onsite and in-app experiences are appealing,

intuitive and visually rich, bringing to life the unique features of

our products.

Our apps play a vital role in building customer loyalty and

engagement. We continue to invest in and improve our apps to

ensure they are best-in-class. In 2023, 62% of our NMV was

generated from our apps, up from 58% in 2022.

Fast and convenient delivery

GFG is constantly evaluating ways to enhance our delivery and

returns processes, with the goal of making them as convenient as

possible to drive greater customer satisfaction and higher online

penetration.

We lease seven fulfilment centres across our markets with all

operations run entirely by GFG which ensures reliable and smooth

delivery for our customers. This ability to serve our markets at

scale is not easily replicated. We handle large volumes at speed

with local teams and well-invested infrastructure to meet our

customers’ delivery expectations.

We oer multiple delivery options, ranging from standard delivery

to same-day delivery in some cities. We also make the returns

process as simple as possible to instil confidence in our customers

as they shop. Convenience is key, so standard returns are free with

the option for items to be picked up from home or dropped o at

a designated point.

2. Partner of Choice for Brands

Unlocking complex markets

GFG provides the expertise and support that our brand partners

need to expand into our markets. Our regions are vast and

diverse, with complex regulations and import processes. Our

local experts and fulfilment centres on the ground enable us to

manage the supply chain eectively, both for GFG and our brand

partners.

Oering ﬂexible business models

GFG oers ﬂexible business models to suit the needs of our

brand partners.

• Retail: We take ownership of a brand’s stock and control all

aspects of the sale process. Retail accounts for the majority

of our NMV at 62% in 2023.

• Marketplace: We connect brands as sellers on our apps and

websites. Brands retain ownership of their stock and control

selling and pricing. Marketplace accounts for 38% of 2023

NMV, and we continue to expand it across our regions. We

oer three fulfilment models within Marketplace including

Fulfilled by GFG, cross-docking and drop shipment. We

recently launched Fulfilled by GFG in ANZ, which provides

brands with a convenient and ecient way to fulfil their

Marketplace orders utilising GFG’s fulfilment infrastructure.

Unrivalled Platform Services

GFG’s Platform Services oers a suite of operations, marketing

and data analytics support to all our brand partners, including

those not currently using Retail or Marketplace. These services

allow our brands to leverage our strong ecommerce and local

expertise, as well as our capabilities in technology, data and

marketing. Through Platform Services, brands can leverage all

of our capabilities to complement their own.

Operations by GFG helps brand partners that lack the local

infrastructure and resources with services such as e-production,

delivery, returns and single stock solution for multi-platform

fulfilment. Single stock solution allows brands to use our

warehouse as one stock pool to fulfil across multiple platforms.

Marketing by GFG oers a complete suite of services to improve

awareness, reach and engagement, both on and o our

platforms.

Data by GFG provides brands with insights about consumers,

assortment trends, inventory performance and competitor

benchmarking. This is especially important in the markets we

operate in, where structured consumer information can be

dicult to access.

We are actively scaling Platform Services, which accounted for

4% of Revenue in 2023. All of our business models and service

oerings are highly ﬂexible, allowing our brand partners to

leverage them according to their own strategies and capabilities.

As a result, these services create deeper relationships with our

brand partners as well as income expansion opportunities for

GFG.

ANNUAL REPORT 2023 | GFG

FUNDAMENTAL INFORMATION ABOUT THE GROUP

3. People & Planet Positive

Our 2030 strategy, developed in 2021 to guide our long-term

agenda, remains grounded in the fundamental values that

continue to shape our business practices. Our goal

is to be People & Planet Positive worldwide. To deliver on

thiswehavearticulated six strategic priorities – Climate Action,

Circularity and Conscious Consumption, Fair and Ethical

Sourcing, Diversity, Inclusion and Belonging, Responsible

Workplace and Responsible Business. This year we have revisited

and adapted our suite of Group targets to align to the changing

business and global climate and environmental developments,

applying new learnings of where and how we can have our

highest impact on improving the lives of our people and footprint

on the planet. We have continued to embed our People & Planet

Positive (“PPP”) strategy throughout the business and started the

detailed preparation for the EU’s upcoming Corporate

Sustainability Reporting Directive (“CSRD”).

Following the sale of our CIS business in late 2022 and the

winddown of our Argentina operations in 2023, we revisited our

Group targets to ensure alignment with the broader GFG

strategy, evolving business environment and our learnings from

implementing our PPP strategy over the last two years. As a result,

we streamlined our targets to a focused set of 27 with an emphasis

on where we have high control and ability to make a real impact

to address our environmental footprint. The principles we utilised

in reviewing our targets were to:

• Focus on what we can directly inﬂuence with the highest

impact in reducing our footprint on the environment,

climate and people;

• Assess the highest business environment and climate

impact based on our geographical locations and

capabilities;

• Seek perspective and alignment from our regional business

leaders on priority opportunities where we can focus

sustained eorts in the next two to three years with the

highest level of progress;

• Improve transparency and visibility as a precursor to CSRD

and ensure any shift in direction is able to be clearly

articulated with defendable logic that will meet any

regulator, investor or customer expectation of our

commitments and progress.

This approach also supports the Group’s PPP priorities for 2024

which focuses on the following areas whilst maintaining the

already established programmes and frameworks:

1. Prepare the business for CSRD compliance and ESRS

Reporting;

2. Focus on the revised targets and what actions produce the

biggest impact; and

3. Drive awareness and information through the business and

enable key functions like commercial and operations teams

to enable sustainability initiatives in more depth and

ownership going forward.

A full summary of our progress and performance in delivery of

our PPP agenda is published in our 2023 People & Planet Positive

Report available on our website.

Other Non-Financial Information

Other non-financial information, such as environmental, social,

human rights and the fight against corruption, along with reporting

against the EU Taxonomy is contained in the Group’s People & Planet

Positive Report which will be available on our website on

5 March 2024.

2.1.3 INTERNAL MANAGEMENT

SYSTEM

The Management Board is responsible for steering the Group

both on a segmental level (i.e. LATAM, SEA and ANZ) and at a

consolidated Group level.

The Group’s key performance indicators include NMV, Revenue,

Adjusted EBITDA, Capex, Pro-forma Cash, Active Customers,

Orders, Order Frequency and Average Order Value.

2.1.4 EMPLOYEES

At the end of 2023, the GFG team consisted of 4,413 employees

(2022: 5,846), representing a year-on-year decrease of 24.5%

primarily driven by reduced operational employees required in

our fulfilment centres and strategic fixed cost reductions across

our marketing, technology and administrative functions. The

average headcount decreased to 5,071 employees (2022: 6,101),

reﬂecting the reduced headcount across all teams during the

year.

ANNUAL REPORT 2023 | GFG

FUNDAMENTAL INFORMATION ABOUT THE GROUP

2.2 REPORT ON ECONOMIC POSITION

2.2.1 MACROECONOMIC

ND SECTOR-SPECIFIC

ENVIRON MENT

GFG operates in the online fashion and lifestyle market in

11countries. Our performance depends on the conditions and

outlook of these markets, including macroeconomic conditions,

the overall fashion and lifestyle sector, and the development of

the online channel within this sector.

Since our IPO in 2019, GFG has endured three significant

disruptions: the COVID-19 pandemic, the war in Ukraine which

resulted in the sale of our CIS business and now the cost of living

squeeze. Consumer sentiment and demand have weakened in all

our markets since 2022 due to inﬂation, political uncertainty,

rising interest rates, and the continued shift back to physicalretail.

Going into 2023, we expected 2022’s lower demand trends to

continue throughout the first half of the year and so we planned

to expand on our proactive cost-cutting measures and implement

further eciency initiatives. Though we anticipated challenges,

we also saw potential for a recovery in the second half of the year

as peak ecommerce headwinds, such as reopening eects and a

profitability-over-growth focus, were expected to ease. However,

instead we saw cost of living pressures escalate throughout H1

and significant step-downs in consumer expenditure in our

markets. Fashion has been particularly vulnerable to these

spending cuts because of its discretionary nature.

As a result, our sales and volumes came in much lower than

anticipated, leading to fixed cost deleverage. This, along with

inﬂation, oset our targeted cost actions.

Whilst macro factors vary by country, each of our three regions

saw similar performance trends through 2023, with topline figures

down. Specifically, LATAM continued to face record highs of

household debt and high apparel inﬂation which made customers

more price sensitive. In SEA, ecommerce growth slowed as

customers went back to shopping oine post COVID. In ANZ,

retail sales turned sharply negative in the year as the macro

backdrop remained challenging for consumer spending, leading

to a highly competitive discount environment. Whilst regional

inﬂation appears to have peaked and interest rates are projected

to moderate going into 2024, demand is still lagging as

disposable income is impacted in the near-term.

Turning to the online fashion and lifestyle segment, online

penetration has continued to increase gradually throughout 2023

after the post COVID impact seen in 2022. With our regions at

earlier stages in the structural shift of oine to online compared

to higher-penetrated regions, we expect online penetration to

remain a significant growth driver for GFG.

Since GFG’s operations are predominantly in countries outside

of the eurozone, practically all of its revenues and costs are

denominated in currencies other than the Euro (€). GFG is

therefore exposed to ﬂuctuations in the values of these currencies

relative to the Euro. In 2023, GFG’s largest net foreign currency

exposures were to the US dollar (USD), British pound (GBP),

Australian dollar (AUD), and Brazilian real (BRL). While GFG’s

reported revenues and NMV are impacted by changes in the

value of foreign currencies relative to the Euro, in 2023, [94]% of

our cash ﬂows in our three operating segments were naturally

hedged, as local currency revenues are typically matched against

a local currency cost base.

2.2.2 SIGNIFICANT EVENTS IN

THE REPORTING PERIOD

Closure of the Argentina Business

In early September, GFG made the decision to close our

operations in Argentina. Operating in Argentina was challenging

due to multiple factors, including consistently high inﬂation,

restrictive import controls and the exodus of international

brands and vendors. Despite the best eorts of our local and

global teams, Dafiti Argentina experienced worsening

performance since 2020, with no signs of improvement.

Dafiti Argentina was relatively small in the Group context,

accounting for about 4% of NMV and 3% of Revenue in H1 2023.

The IFRS 5 criteria were met prior to the end of September 2023

and hence the business was classified as a Discontinued

Operation for the year. In line with this reporting, GFG’s FY 2023

performance KPIs are presented excluding Argentina, with prior

comparatives also being shown on this basis. The Consolidated

Statement of Profit or Loss is presented excluding Argentina for

the current and comparative year. The Consolidated Statement

of Financial Position and the Consolidated Statement of Cash

Flows include Argentina for the current and comparative year.

Weaker Demand Environment

Consumer spending and demand remained challenging across

our markets leading to an NMV decline of 14.2% in 2023. Despite

this backdrop, there were no material rental concessions or lease

modifications in the period and there was no significant increase

in credit risk linked to trade receivables.

Convertible Bond

On 25 August 2023, GFG repurchased €74.6 million in aggregate

principal amount of its outstanding Convertible Bonds due 2028

via a bilateral purchase.

On 31 August 2023, GFG repurchased €27.0 million in aggregate

principal amount of its outstanding Convertible Bonds due 2028

via modified Dutch auction procedure announced on

22 August 2023.

ANNUAL REPORT 2023 | GFG

REPORT ON ECONOMIC POSITION

In total, GFG repurchased €101.6m of its outstanding Convertible

Bonds at a purchase price of €73,000 per bond which

represented approximately 37% of the outstanding principal

amount. €178.3 million remains outstanding and €196.7 million

in aggregate principal amount of the Bonds are held by the

Group in treasury.

2.2.3 FINANCIAL PERFORMANCE

The results for the year ended 31 December 2023 show revenue

decline, both in absolute terms and on a constant currency basis.

Adjusted EBITDA profit declined in the year, driven by fixed cost

deleverage on lower volumes, compounded by increased

discounting in LATAM and ANZ. Please refer to section4 for the

Group consolidated financial statements.

Results of Operations

In €m

For the year

ended 31 Dec % change

2023 2022

Revenue

838.0 1,069.2 (18.0)

Cost of sales

(485.1) (616.5)

Gross profit 352.9 452.7

Selling and distribution

expenses (288.3) (353.4)

Administrative expenses

(183.8) (199.0)

Other operating income

3.4 2.3

Other operating expenses

(7.9) (4.1)

Net impairment losses

of financial assets (0.1) (0.8)

Impairment of goodwill and

other non-financial assets (54.7) (41.2)

Loss before interest

and taxes (178.5) (143.5) (24.4)

Gain on repurchase of

Convertible bonds 18.3 9.3

Finance income

15.9 8.4

Finance costs

(21.7) (41.3)

Loss before tax from

continuing operations

(166.0) (167.1)

Income (expense)/benefit

(13.9) (7.7)

Loss for the year for

continuing operations (179.9) (174.8)

Constant currency growth rate

Adjusted EBITDA Bridge

In €m

For the year

ended 31 Dec

2023 2022

Loss before interest

and taxes (178.5) (143.5)

Depreciation and amortisation

57.5 53.2

EBITDA (121.0) (90.3)

Share-based payment expenses

1.7 7.7

Group Recharges and associated taxes

0.4 0.1

Impairment of goodwill and other non-

financial assets 54.7 41.2

One-o costs

and income

5.9 (1.0)

Adjusted EBITDA (58.3) (42.3)

One-o costs and income include changes in estimates of prior year tax

provisions and one o payroll and oce closure costs. In the prior year,

one o consulting income was also included in one-o costs.

Key Group Figures

GFG’s key performance indicators (“KPIs”) include NMV,

Revenue, Adjusted EBITDA, Capex, along with the number of

Active Customers, number of Orders, Order Frequency and

Average Order Value. See section8.1 Financial Definitions for

KPI definitions.

KPIs and Financial Information

For the year

ended 31 Dec

2023 2022

Financial performance

Revenue (€m)

838.0 1,069.2

Growth at constant currency (%)

(18.0) –

Gross profit (€m)

352.9 452.7

Loss before interest and taxes (EBIT) (€m)

(178.5) (143.5)

Loss for the year (€m)

(179.9) (174.8)

Adjusted EBITDA (€m)

(58.3) (42.3)

Adjusted EBITDA/Revenue (%)

(6.9) (4.0)

Capex (€m)

28.5 42.5

Financial position and cash ﬂow

Net working capital (€m)

(36.9) 10.8

Pro-forma cash (€m)

396.5 561.4

Pro-forma net cash (€m)

206.3 264.5

ANNUAL REPORT 2023 | GFG

REPORT ON ECONOMIC POSITION

For the year

ended 31 Dec

2023 2022

Group KPIs

NMV (€m)

1,279.3 1,553.6

Growth at constant currency (%)

(14.2) (0.7)

Active Customers (inmillions)

8.8 10.8

Number of Orders (inmillions)

20.8 27.0

Order Frequency

2.4 2.5

Average Order Value (€)

61.5 57.5

Financial Performance of the Group

In 2023, NMV declined by 14.2% on a constant currency basis, to

€1,279.3 million (2022: €1,553.6 million), whilst Average Order

Value increased by 11.5% and Order Frequency was 2.4 times per

year (2022: 2.5 times), a marginal decrease of 5.5%.

Revenue decreased year-on-year, with a (18.0)% decrease on a

constant currency basis to €838.0 million (2022: €1,069.2 million)

Active Customers decreased by 18.6% year-on-year from

10.8 million to 8.8 million and customer orders were down by

23.1% to 20.8 million (2022: 27.0 million) in FY 2023, reﬂecting the

impact of weakened consumer demand.

The lower demand environment meant we operated with less

visibility and worked closely with brand partners to react quickly

to changing patterns in demand, with Marketplace continuing

to be an attractive option for brands and GFG alike. Marketplace

share of NMV was 38% in 2023, increasing 5 percentage points

year-on-year. The Group increased focus on its Platform Services,

generating increased revenue from its Marketing by GFG,

Operations by GFG and Data by GFG business models.

Technology innovations focused on app functionality continue

to deliver new levels of customer engagement and strengthen

GFG’s app-first approach. Apps generated 62% of NMV in the

year, up 4 percentage points compared to 2022.

Whilst they are not statutory measures under IFRS, management

considers Adjusted EBITDA and Adjusted EBITDA margin as key

performance indicators to assess the underlying operating

performance of the business. See the Financial Definitions in

Section8.1 for further details.

In 2023, the Group generated an Adjusted EBITDA of €(58.3)

million (2022: (€42.3) million) with an Adjusted EBITDA margin

of (6.9)%(2022: (4.0)%). Gross margin declined marginally, by

0.2percentage points year-on-year, driven by investments in

Retail margin oset by increased Marketplace participation and

Platform Services. Fulfilment declined marginally year-on-year

as a percentage of NMV, driven by eciency measures, whilst

Tech and Admin costs increased year-on-year as a percentage

of NMV, despite significant cost reduction programmes across

all regions and central functions.

Adjusted EBITDA excludes an expense for share-based

payments of €1.7 million (2022: €7.7 million). The decrease in the

share-based payment expense for the year relates to the awards

being linked to the Group share price at the time when units

were granted to employees, the majority of which are granted in

April each year. Non-recurring items of €60.6 million (2022:

€40.2 million) were also excluded from the Adjusted EBITDA

measure which included an impairment of goodwill and other

non-financial assets of €54.7 million recorded at year end 2023

(2022: €41.2 million) in respect of the LATAM and SEA group of

Cash Generating Units (CGUs). Other non-recurring items of

€(5.9) million (2022: €(1.0) million) included changes in estimates

of prior year tax provisions, and one o payroll and oce closure

costs.

In 2023, the loss for the year increased by 2.9% to €(179.9) million

(2022: €(174.8) million). Within loss for the year, finance costs

decreased by €19.6 million to €21.7 million (2022: €41.3 million)

driven by a decrease in interest expenses and fair value changes

on investment funds which resulted in a gain of €9.6 million for

the year (2022: €(12.4) million loss). The positive impact from fair

value changes on investments funds, increased finance income

to €15.9 million for the year (2022: €8.4 million).

As part of the Group’s annual impairment assessment,

management estimated that the enterprise value of the LATAM

and SEA group of CGUs, which are based on company business

plans, was lower than the recoverable amount at year end and

therefore recognised an impairment charge on goodwill and

other non-financial assets of €54.7 million. This reﬂects the

macroeconomic changes, market conditions and increasing

pressure from local and established global online players in the

LATAM and SEA regions.

Financial Performance by Segment

The Group is organised into three main business segments;

LATAM (Dafiti), SEA (ZALORA) and ANZ (THE ICONIC). The

column ‘Other’ includes headquarters and other business

activities.

In ANZ, the macroeconomic environment was slower than

expected in 2023, which impacted consumer sentiment and

demand. In response we focused on reducing fixed costs and

careful inventory management. ANZ is the segment with the

lowest revenue and NMV decline at (14.3)% and (10.8)%

respectively on a constant currency basis.

In SEA, the lower demand environment continued, resulting in a

decline in revenue and NMV of (20.9)% and (15.0)% respectively

on a constant currency basis. SEA continued to grow Marketplace

and Platform Services, contributing to a gross margin

improvement of 2.6 percentage points increase year-on-year.

In LATAM, revenue and NMV continued to decline by (21.1)% and

(17.9)% respectively on a constant currency basis. In the LATAM

region we took decisive action to streamline the business

including consolidating platforms, rationalising product

assortment and closing operations in Argentina.

Across all segments, we carefully managed intake and inventory

levels throughout the year, ending the year with significantly

lower intake and a lower aged inventory profile.

ANNUAL REPORT 2023 | GFG

REPORT ON ECONOMIC POSITION

2023 Segment Results of the Group

In €m LATAM SEA ANZ

Total Fashion

Business Other Reconciliation Total

Revenue 250.5 212.4 378.0 840.9 41.5 (44.4) 838.0

% YoY Revenue constant currency growth rate (21.1) (20.9) (14.3) – – – (18.0)

Net Merchandise Value 407.8 335.8 535.7 – – – 1,279.3

% YoY NMV constant currency growth rate (17.9) (15.0) (10.8) – – – (14.2)

Gross profit 104.6 88.2 163.2 356.0 – – 352.9

% Margin 41.8 41.5 43.2 42.3 – – 42.1

Adjusted EBITDA (27.4) (1.4) (2.9) (31.7) – – (58.3)

% Margin (11.0) (0.7) (0.8) (3.8) – – (6.9)

2022 Segment Results of the Group

In €m LATAM SEA ANZ

Total Fashion

Business Other Reconciliation Total

Revenue 316.4 279.6 474.7 1,070.7 42.6 (44.1) 1,069.2

% YoY Revenue constant currency growth rate (10.3) (9.2) 15.7 –

– –

0.0

Net Merchandise Value 495.3 411.9 646.4 –

– –

1,553.6

% YoY NMV constant currency growth rate (13.5) (4.8) 15.5 –

– –

(0.7)

Gross profit 133.8 108.7 211.8 454.3

– –

452.7

% Margin 42.3 38.9 44.6 42.4

– –

42.3

Adjusted EBITDA (21.7) 2.1 11.3 (8.3)

– –

(42.3)

% Margin (6.9) 0.7 2.4 (0.8)

– –

(4.0)

Cash Flows

The liquidity and cash position of the Group is presented in the

following summary consolidated statement of cash ﬂows. Note,

in the IFRS Group Consolidated Financial Statements, cash ﬂows

are presented including those of Argentina for all periods

presented and CIS up until 12 December 2022 when it was sold.

In €m

For the year

ended 31 Dec

2023 2022

Net cash generated from/(used in)

operating activities (47.5) 92.6

Net cash used in investing activities 48.9 (38.0)

Net cash (used in)/generated from

financing activities (99.5) (121.9)

Change in cash and cash equivalents (98.1) (67.3)

Exchange-rate related changes in cash

and cash equivalents 0.5 (9.7)

Cash and cash equivalents at the

beginning of the year 323.5 400.5

Cash and cash equivalents

at the end of the year 225.9 323.5

In 2023, GFG generated negative cash ﬂows from operating

activities of €(47.5) million (2022: income of €92.6 million). The

movement was mainly driven by the inclusion of the CIS business

in the prior year.

Cash ﬂows from investing activities includes additions to property,

plant and equipment of €4.6 million (2022: €22.8 million), of which

€2.3 million related to investment in our warehouses and fulfilment

centres, with a further €2.2 million recognised as assets in the

course of construction. Additions to intangible assets were

€24.3 million (2022: €44.8 million). These investments primarily

relate to Internally developed intangible assets of €21.2 million

(2022: €34.1 million) and were capitalised in accordance with the

recognition criteria of IAS 38, intangible assets. Included within

2022 cash ﬂows are the gross proceeds from the sale of the

Lamoda business of €149.2 million oset by the net change in the

cash of the Lamoda business during the period prior to its disposal.

In 2023 we generated positive cash ﬂows from investing activities

due to the redemption of €75.0 million from investment funds.

Net cash from financing activities includes repayment of

borrowings of €48.5 million (2022: €52.6 million), proceeds from

borrowings of €44.0 million (2022: €39.6 million) and the partial

repurchase of the convertible bond of €74.7 million (2022:

€74.3 million), along with the ongoing coupon payments paid

biannually at 1.25%. Also included are principal IFRS 16 lease

payments of €17.4 million (2022: €30.5 million). The closing pro-

forma cash position at the end of 2023 was €396.5 million (2022:

€561.4 million), including €161.1 million held in highly liquid

investment funds (2022: €226.5 million) and €9.5 million (2022:

€11.4 million) of restricted cash related to the Group’s debt

facilities.

ANNUAL REPORT 2023 | GFG

REPORT ON ECONOMIC POSITION

Financial Position

The Group’s financial position is shown in the following

condensed consolidated statement of financial position.

Assets

In €m

For the year ended 31 Dec

2023 2022

Change

(%)

Non-current assets

284.2 365.9 (22.3)

Current assets

577.8 808.0 (28.5)

Total assets 862.0 1,173.9 (26.6)

Equity and Liabilities

In €m

For the year ended 31 Dec

2023 2022

Change

(%)

Equity

295.7 478.8 (38.2)

Non-current liabilities

249.5 308.5 (19.1)

Current liabilities

316.8 386.6 (18.1)

Total equity and

liabilities 862.0 1,173.9 (26.6)

Total assets of the Group decreased by €311.9 million when

compared with 31 December 2022, mainly as a result of the

decrease in investments funds and cash and cash equivalents,

driven by the partial repurchase of €74.7 million of Convertible

bonds and the decrease in inventories as the Group closed the

year with a healthy inventory position. In addition, an impairment

of Goodwill and other non-financial assets related to the LATAM

and SEA regions was recognised amounting to €54.7 million (2022:

€41.2 million).

The net book value of right-of-use assets as at 31 December 2023

was €51.5 million (2022: €66.0 million). Total lease liabilities of

€61.7 million (2022: €74.0 million), net of lease repayments and

interest, are split between non-current and current lease liabilities

on the consolidated statement of financial position.

In 2023, Capex additions were €28.5 million (2022: €42.5 million)

and primarily related to the Group’s investment in internally

developed technology and continued investment in its delivery

and fulfilment infrastructure, recognised as assets in the course of

construction. The net book value of Goodwill decreased by

€39.6million to €56.1 million (2022: €95.7 million) as a result of the

impairment to the LATAM and SEA group of CGUs, partly oset by

positive translation adjustments.

Inventories decreased by €59.7 million to €110.5 million (2022:

€170.2 million), as a result of the Group’s controlled intake and sell

through of aged inventory amidst the uncertain demand

environment. Other current financial assets include €161.1 million

(2022: €226.5 million) in relation to highly liquid investment funds.

Pro-forma cash decreased from €561.4 million to €396.5 million,

driven by the partial repurchase of €74.7 million of Convertible

bonds, Adjusted EBITDA losses and investment in Capex. Included

within the year end pro-forma cash balance is €9.5 million (2022:

€11.4 million) of restricted cash related to the Group’s debt

facilities.

Equity decreased by €183.1 million, primarily as a result of losses

incurred for 2023.

Non-current liabilities decreased to €249.5 million (2022:

€308.5 million), €160.3 million (2022: €243.8) representing the

non-current portion of the convertible bond liability, discounted

to present value. The decrease reﬂects the partial repurchase

during the year.

At 31 December 2023, current liabilities were €316.8 million (2022:

€386.6 million), a decrease of €69.8 million, mostly driven by a

decrease in trade payables of €11.5m and deferred income of

€8.7 million. In addition, liabilities from taxes consisting of VAT

obligations, amounting to €36.0 million, were reclassified from

current to non-current financial liabilities due to changes in the

settlement date to a period exceeding 12 months from

31 December 2023.

2.2.4 REVIEW OF PARENT

FINANCIAL STATEMENTS

Section 7 presents the results of the parent Company, Global

Fashion Group S.A, for the year ended 31 December 2023,

including the result of its branch, GFG Denmark. The most

significant event in the period was the impairment of the Shares in

aliated undertakings of €722.5 million driven by the declining

macroeconomic environment across the CGUs. In addition, the

partial repurchase of the Convertible Bond reduced the Debenture

loan by €101.6 million. All other transactions were part of the

ordinary course of business with its aliates.

2.2.5 OVERALL ASSESSMENT OF

THE ECONOMIC POSITION BY

THE MANAGEMENT BOARD

The Management Board is pleased with the team’s resilience and

adaptability in navigating a complex and evolving global

landscape this year. The group has made significant progress on

its strategic initiatives such as increasing our Marketplace and

Platform Services share to maintain a stable Gross Margin

against topline declines. Whilst cost pressures and deleverage

led to a step back in Adjusted EBITDA margin, the Group

continues to have a strong balance sheet position. This enables

the Group to continue strategic investments to be well positioned

to quickly adapt to changing market conditions and capitalise

on its long-term potential.

ANNUAL REPORT 2023 | GFG

REPORT ON ECONOMIC POSITION

2.3 REPORT ON POST

BALANCE SHEET EVENTS

In January and February 2024, the Group redeemed

€151.5 million of investments in investment funds accounted for

as Financial assets at fair value through profit or loss. The cash

proceeds were placed in short-term cash deposits and money

market funds.

ANNUAL REPORT 2023 | GFG

REPORT ON POST BALANCE SHEET EVENTS

2.4 REPORT ON RISKS

AND OPPORTUNITIES

GFG acknowledges that risks are an ordinary and inherent part

of conducting business and the realisation of shareholder value.

GFG seeks to identify, understand and proactively manage risks

in order to realise its business objectives and minimise

uncertainty associated with those objectives. Risk management

is an integral part of GFG’s approach to good corporate

assurance and business practice.

GFG remains committed to maturing its risk management

approach. Periodic reviews of the Risk Management strategy are

undertaken to ensure that the Management Board are

comfortable that the approach continues to meet expectations

and remains fit for purpose.

2.4.1 RISK MANAGEMENT

GFG Risk Management Methodology

GFG adopts the ISO 31000:2018 methodology for Enterprise

Risk Management. This risk management system can be broadly

characterised into three parts:

1. Principles of Risk Management;

2. Risk Management Framework; and

3. Risk Management Process.

1. Principles of Risk Management

The purpose of risk management is the creation and protection

of value. It improves performance, encourages innovation and

supports the achievement of our objectives. This is the

benchmark for risk management that GFG has set for itself and

continuously refers back to during the risk management process.

GFG’s risk management principles align with this benchmark and

provide guidance on the characteristics of eective and ecient

risk management, communicating its value and explaining its

intention and purpose across the Group. At their essence the

principles allow GFG to manage the eect of uncertainty on its

objectives.

2. Risk Management Framework

The purpose of the framework is to assist GFG in integrating risk

management into its significant activities and functions. The

components of the framework and the way in which they interact

are customised to the needs of the Group and driven through

strong leadership and commitment across all levels of our

operations. This includes a dedication to supporting all

components of the framework through the provision of adequate

capability and resources.

•

GFG operates a risk management approach anchored to

the ISO 31000 standard. Through this approach risks are

identified, analysed, evaluated and controlled in

accordance with the Group’s risk appetite and objectives.

•

GFG has implemented a range of controls over financial

reporting which are reviewed through an annual

programme of self-assessment, with further independent

validation conducted by the Internal Audit team.

•

In addition to areas that present a risk to the Group

achieving its objectives, GFG seeks to identify, through its

risk management process, areas that may present business

opportunities.

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

The framework emphasises that risk management is a core

responsibility and articulates a ‘PDCA’ risk management cycle:

P – Plan (Design)

D – Do (Implement)

C – Check (Evaluate)

A – Act (Improve/Integrate)

This establishes a simple but eective cycle for risk management

that emphasises the need for continuous adaptation and

improvement.

3. Risk Management Process

The risk management process involves the systematic application

of the risk management approach i.e. identifying, analysing,

evaluating, treating, monitoring and reporting on risk. This

process is completed on an annual cycle.

Risk Identification

GFG considers a range of factors to identify risks that may aect

one or more objectives, including,but not limited to,threats and

opportunities, changes in internal or external context, indicators

of emerging risks, limitations and biases.

GFG holistically considers the cause, risk and consequence in

order to form a complete understanding of the nature of a risk

before factoring in any control measures that may already be in

place to mitigate the risk. In this way the identification phase

provides a full and current view on each and every risk.

Risk Analysis

Once identified, risks are then analysed to provide a meaningful

comprehension of the nature and characteristics of the risks,

including an analysis of the likelihood and severity of the risk.

This analysis is then plotted against a Group-wide matrix to track

our most salient risks.

Risk Evaluation

Following analysis, risks are then evaluated to determine what

additional actions should be taken (if any) to mitigate the risk and

to formulate a risk treatment plan.

Risk Treatment

Risk treatment follows an iterative process described below:

– Selecting adequate risk treatment options

– Implementing risk treatment

– Assessing the eectiveness of risk treatment

– Adjusting risk treatment, as required

Selecting the most appropriate risk treatment option(s) is

achieved by balancing the benefit of the treatment against the

cost and eort of implementation, also taking into consideration

the Group’s objectives and underlying risk appetite.

Risk Monitoring and Reporting

The risk management process is underpinned by monitoring and

reporting, which ensures adequate oversight, transparency and

the provision of the best available information upon which to

base management decisions.

It is for these reasons that GFG is committed to monitoring and

recording its risk management activities at every level of the

Group.

GFG maintains risk management oversight by recording,

tracking and reviewing all risks, risk sponsors, risk owners and

risk treatments, and treatment owners on a regular basis. This

ensures accountability, transparency, measurement, and review

of progress against risk treatment plans.

The Group adopts a GRC (Governance, Risk and Compliance)

committee structure both regionally and globally, which

oversees the risk management process and its outputs, including

ensuring transparent reporting upstream and downstream.

These committees meet quarterly at a minimum, are chaired by

the relevant senior executive, and assume responsibility for

delivering on the risk treatment plans.

This structure is further supported by the Group’s Internal Audit

function, which provides independent, objective assurance over

the risk management process. This additional layer of control

ensures GFG is engaged in a cycle of continuous improvement

and alleviates biases and subjectivities from its risk management

practices.

The output of the annual risk assessment is also presented and

approved by the GFG Management Board and by the GFG Audit

Committee (a committee of the Supervisory Board), thereby

ensuring both executive and board oversight to support delivery

against the risk assessments and treatment plans.

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

2.4.2 RISKS AND OPPORTUNITIES

REPORT

GFG is committed to the management of material risks. This

section outlines the principal uncertainties identified through

the risk review process in 2023. These are not set out in any

particular order and GFG recognises that risks can and will

evolve over time.

Strategic and External Risks

Country risk:

Geopolitical and

Macro-economic

The Group’s businesses are concentrated across several emerging markets that GFG considers as having great potential

for growth in fashion ecommerce. With this comes exposure to a certain degree of country risk, as each territory has its

own unique geo-political, socio-economic, and legislative/regulatory environment.

Key mitigating activities/initiatives

• Continuous monitoring of the geo-political, socio-economic, and regulatory regimes within each territory

• Proactive engagement with thought leaders, industry peers, legal and regulatory authorities and other

relevantbodies

• Remaining abreast of and having a voice in material developments impacting in country operations

• Prudent assessment of supply chain stability and overdependence

Competition

The fashion ecommerce industry is characterised by intense competition, and GFG’s regions face increasing competitive

pressure from local and established global online players. This is further exacerbated by inﬂationary pressures driving

increased price competition.

Key mitigating activities/initiatives

• Continuous assessment and evaluation of the competitive environment, remaining abreast

of new market entrants, competitor performance and aspirations

• Continued focus on protecting the current position and unique selling points of the regional businesses

• Pooling of experience and sharing of best practice across the Group, leveraging operational efficiencies

• Growth of the GFG Marketplace offering

• Building and developing strong long-term relationships with key brands and partners to unlock strong

commercialexchange

Operational Risks

Health, Safety and

Wellbeing

Operating in diverse and geographically dispersed locations, GFG recognises and prioritises the health, safety and

wellbeing (Responsible Workplace) of all its people in completing their work activities. We work closely with our

operations teams in fulfilment and e-production to ensure optimal health and safety practices.

Key mitigating activities/initiatives

•

Regular formal assessment and development of the health and safety culture maturity, aligning leadership roles

and responsibilities as well as consultation of sta for health and safety related matters in line with our health and

safety Commitment Statement

• Adoption and implementation of a health and safety management System guided by the ISO 45001 standard

• Governance and reporting of health and safety matters with clear leadership accountabilities

• Visible Safety Leadership in our operational areas through regular Leadership Safety Walks and Talks

• Investment in health and safety capability, awareness, training, resources and tools across the group to provide

practical and applicable procedures and policy

Major disruption to

critical infrastructure

Risk of interruption to one or more business processes due to disruption to a fulfilment centre remains a possibility.

Dependence on a single fulfilment centre in some regions creates a significant risk of significant loss of operation in the

event of a catastrophic loss. There is a risk of failure of critical technology infrastructure which impacts operational

performance.

Key mitigating activities/initiatives

•

Cloud infrastructure to minimise risk and impact of outages

• Business continuity and crisis management plans, as part of a wider Business Continuity Management System,

stressand scenario testing and periodic review of exposures and controls at critical physical sites

• Risk transfer via insurance programmes

• Prudent on site risk management inc. fire suppression, human elements, site surveillance and hazard

management

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

Cyber and

information security

Cyber and information security risk continues to be an increasingly ubiquitous risk. GFG relies on its customer data to

better understand and serve its customers. Cyber security attacks in general are increasing in both number and

sophistication. GFG develops its proactive and reactive controls to reﬂect this.

Key mitigating activities/initiatives

• GFG’s operating regions run systems and applications on physically segmented infrastructure with role-based

access control and region-level isolation, providing natural risk isolation should there be a breach in one system

• Information Security and Data Governance framework, policy and oversight

• Continual improvement with respect to security practices and policies

• Periodic penetration testing to identify strengths and weaknesses

• Cyber self-assessment and objective validation

Climate risk GFG acknowledges that the continuing advancement of climate change poses both physical and transition risks to our

business over short, medium and long term. The physical risk associated with the increasing impact of climate volatility

and rising frequency and severity of extreme weather events may pose a risk to our suppliers’ ability to operate, our

brand partners to obtain materials for their products and therefore may have an impact on business continuity. The

following specific physical risks have been identified for GFG:

• Extreme Heat – Extreme heat presents the highest risk for all three businesses. Climate change projections

indicate that higher maximum temperatures and longer warm spell duration are likely to intensify for all assets

under all climate scenarios, particularly by 2050.

• Riverine Flood – Riverine ﬂood risk is likely to increase as a result of changes in extreme precipitation, with a

moderate to very high risk in the ANZ and SEA regions.

• Coastal Flood – Coastal ﬂoods present very low risk for the GFG Group. Few assets are in areas exposed to

coastal ﬂoods and this is not expected to change in the future.

• Wind and Cyclones – Cyclones could aect our ANZ and SEA assets. This risk could have a particularly material

impact on ZALORA, with assets located in cyclone-exposed areas that may experience higher cyclone intensity.

• Landslides – Landslides present moderate to high risk for the ZALORA business due to the proximity of assets to

previous landslide locations.

• Water Scarcity – Water scarcity presents a low risk for GFG. Drought risk will reduce for many locations due to

changing precipitation patterns. It is noted that water availability may be aected by other factors and site-

specific assessments may be warranted.

Transition risk, associated with the move toward a lower carbon economy, may impact GFG’s cost of regulatory

compliance, accessibility to the materials used to manufacture our products or other resources needed to operate

our business. The following specific transition risks have been identified:

• Carbon pricing – New or increasing greenhouse gas taxes or introduction of emissions trading systems in the

geographies where GFG operates or procures raw materials or products, impacting operating costs.

• Regulations impacting marine and aviation industry – Ambition for marine and aviation industry to reduce

Greenhouse Gas emissions could result in increased transportation costs for GFG.

• Customer demand for environmentally friendly products – Increasing demand for circular, low carbon,

sustainable products could aect demand for GFG products (own brand and others).

• General regulatory landscape changes for areas like emission, energy, circular production or product waste

requirements which trigger additional work and challenges in obtaining materials.

• Technology deployment for reducing emissions – Stakeholder driven decarbonisation requiring GFG to

deploy renewables at a faster pace than anticipated under a low-carbon scenario, resulting in additional capital

and operating costs.

In the medium and long term, the broader impacts of climate change and the transition required to operate a

climate sensitive business and meet emerging reporting requirements must be considered.

Key mitigating activities/initiatives

• Climate risk assessment and the integration of climate risk into the core Enterprise Risk Management system of

the group, and development of a short to medium term mitigation plan to address the riverine ﬂood risk in ANZ.

• Setting of Science Based Targets, approved in 2022. While these will have to be recalculated given the

divestment of Lamoda and the wind down of Argentina, they will be resubmitted in 2024 and will drive our

carbon mitigation agenda.

• Comprehensive Group Sustainability Strategy and environmental management programmes, which measure and

mitigate GFG’s climate impacts, and transition of operations, own brand products and packaging to have a lower

climate footprint.

• Targets and programmes to increase the use of lower carbon transportation and low to zero emissions delivery

methods, including collaboration with third-party brands and logistics providers and cost-benefit analysis of the

potential costs associated with a shift to low carbon transportation.

• Targets and programmes to increase the proportion of lower impact materials used in our own brands and by

third-party brands and to increase purchase rates of our customers of these products.

• Targets and programmes to increase the use of renewable energy and energy eciency measures across our

operations and supply chain.

• Targets and programmes to enable circular progress of our products and packaging including oering product

recovery programmes to our customers.

• Comprehensive GFG Corporate Sustainability governance and standards by the GFG Supervisory Board

Sustainability Committee and bi-annual reporting to this forum on performance.

• Clear management accountability and responsibility for implementation of the group sustainability strategy and

appropriate resourcing of these programmes in each operating market.

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

Social Sustainability

and human rights

risks in our business

and value chain

GFG works with third-party brands and develops and manufactures its own brands with various suppliers in a number

of emerging markets. For GFG’s own brand there is a risk that social and environmental conditions in the factories, mills

or farms in our supply chain do not align with GFG’s ethical trade standards. Specific risks include:

• modern slavery, forced or child labour

• inadequate health and building safety standards

• high levels of overtime and non-payment of wages and benefits

• unauthorised subcontracting to facilities not a part of our traceability programme

• the development of the materials which make up our own products may have a negative impact on the

environment.

Third-party brands carried on GFG’s platforms may have similar risks present in their supply chain, however GFG has

much lower visibility of these supply chains and therefore control over the standards in place.

Across both own and third-party brands, despite the presence of relevant verification processes, there is increasing

legislative and reputational risk across all markets associated with the making of sustainability claims at the point of

sale. Finally, a transparent ethical and sustainable supply chain is a positive dierentiator in the market, and aligns to

the values and expectations of our stakeholders, customers and employees.

In some markets, a proportion of our workforce is sourced and services delivered via third-party labour service

providers – for example temporary warehouse labour, drivers, cleaners or security sta. As the third-party retains

direct responsibility for ongoing management of the terms and conditions of employment, there is a risk that these

agencies do not meet GFG Group standards in terms of the treatment of workers. Specific risks noted in relation to

agency workers include non-payment of wages and benefits, retention of passports, payment of recruitment fees and

poor accommodation standards.

Key mitigating activities/initiatives

• Comprehensive Group Sustainability Strategy, covering both environmental and social factors including human

rights and fair and ethical sourcing.

• Comprehensive GFG Corporate Sustainability governance and standards by the GFG Supervisory Board

Sustainability Committee and bi-annual reporting to this forum on performance.

• Clear management accountability and responsibility for implementation of the group sustainability strategy and

appropriate resourcing of these programmes in each operating market.

• Rigorous ethical trade standards in place for the own brand supply chain, including auditing of all factories

before order placement and adopting improvement plans or termination where applicable; standards reviewed

and updated on an annual basis.

• Programmes which facilitate workers in our own brand supply chain raising grievances both within their place of

employment and via independent mechanisms and remediation of issues identified.

• ESG risk assessment of brands before onboarding in progress Assessments of third-party brand performance

against GFG’s Human Rights Standards and engagement with poorer performers to address gaps identified

including provision of eLearning programmes.

• Risk assessment framework for labour service providers and auditing of those determined high risk, adoption of

improvement plans or termination where applicable; standards reviewed and updated on an annual basis.

The full details of or mitigating actions are captured in the People & Planet Positive Report to be released in

March 2024.

Financial Risks

Budget and

planning

The fashion ecommerce business in the developing markets in which GFG operates is highly volatile and subject to

inﬂuence by a variety of variables and external factors. As such, business performance can be challenging to anticipate

and accurately budget for. GFG recognises that a budget and forecast must continually evolve with the business.

Mitigating activities/initiatives

• Strong budgeting disciplines and continuous process improvement.

• Robust control framework and recourse mechanisms.

• Focus on monitoring of key budget inputs and establishing output KPIs coupled with periodic review

ofperformance.

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

Funding and

liquidity

The Group is in a loss making position and as such has had to inject capital at regular intervals into the regional

businesses. The Group successfully raised €375 million in 2021 in additional capital through the issuance of Convertible

bonds due 2028 and €120 million in November 2020 through a share placement. The Group continues to work towards

becoming cash ﬂow neutral.

Mitigating activities/initiatives

• Close monitoring of the utilisation of cash and cash forecasts as part of the financial management reporting

process.

• Liability management through convertible bond buy-backs.

• Execute local working capital facilities to manage local cash and forex.

• Focus on strong cost controls, to improve operating cash position.

Compliance and Regulatory Risks

Compliance

with laws,

regulations, and

standards

GFG operates across 11 countries, each with a unique regulatory and legislative regime with varying levels of maturity,

creating an inherent regulatory risk.

Mitigating activities/initiatives

• Investment in legal and compliance capability in each region, with monitoring via the Group General Counsel,

Regionaland Group GRC Committees as well as the Global Legal and GRC Function.

• Periodic in-depth review of material compliance obligations.

• Continuous monitoring and review of changes to the regulatory environment GFG operaates in and assessment of

the impact on the Group’s operations.

Opportunities

While GFG faces several risks, there are also certain opportunities

for the Group. The primary opportunities identified are:

Macroeconomic Developments: Growth opportunities in

GFG’s markets will be driven by several macroeconomic,

demographic and operational tailwinds that will increase

customer’s online purchasing for fashion and lifestyle, including

urbanisation, increasing customer engagement with mobile and

other digital devices, and improved last-mile delivery

capabilities. These tailwinds increase both the demand for

fashion and lifestyle products, and grow the share of ecommerce

within this sector. As a pure play ecommerce business, GFG is

well positioned to benefit from this pattern of activity.

Category and Segment Expansion: Significant scope exists for

GFG to continue rolling out all fashion and lifestyle categories

across its regions and grow its market share. Adding relevant

brands and growing assortment width is expected to increase

engagement as GFG becomes a one-stop destination for fashion

and lifestyle. Additionally, GFG has the opportunity to expand

its coverage across price levels and other market-specific white

spots.

Furthermore, changes in customer purchasing behaviour in light

of shifting priorities and necessities, have been internalised to

ensure categories remain relevant and reﬂect emerging

customer wants and needs.

Technology: Further innovation in technology will enable GFG

to create an even more engaging shopping experience. Data

analytics can be used to create an assortment catalogue that is

increasingly curated and personalised for each customer. A

localised approach to front-end technology, which allows us to

be closer to the customer, creates an eective environment for

innovation to be developed locally and then shared across the

Group, once proven and successful. There are also opportunities

for GFG to further centralise certain tools or platforms, thereby

simplifying the IT landscape and reducing maintenance and

costs, although over dependence is acknowledged as an

associated risk.

Climate: GFG recognises an opportunity to continue to

dierentiate itself as a leader in sustainability and climate

responsibility. Its commitment in this space and as articulated in

the People & Planet Positive Report is supported by our continued

work to increase transparency on GHG emissions along the value

chain, work with our partner on increasing the share of our

assortment which includes sustainable materials and the interest

in circular principles. Such interest could mean that GFG’s focus

on procuring circular raw materials, finished products and

packaging material could reap benefits from an increase in

market share and revenue.

ANNUAL REPORT 2023 | GFG

REPORT ON RISKS AND OPPORTUNITIES

2.5 REPORT ON EXPECTED

DEVELOPMENTS AND OUTLOOK

GFG expects the macroeconomic headwinds impacting trade to

persist through 2024 as consumers recover in a more moderate interest

rate and inﬂationary environment. We remain focused on profitability

and cash ﬂow and will continue to execute on our cost initiatives. By

streamlining our operations in 2023, we are well-positioned for 2024.

We started to see the benefits of our leaner structure, and expect these

cost savings to continue to grow throughout the year, as we navigate

osetting pressures from inﬂation and lower volumes.

Luxembourg, 5 March 2024

On behalf of the Supervisory Board

Cynthia Gordon

ANNUAL REPORT 2023 | GFG

REPORT ON EXPECTED DEVELOPMENTS AND OUTLOOK

3. INDEPENDENT AUDITOR’S REPORT

To the Shareholders of

Global Fashion Group S.A.

5, Heienha

L-1736 Senningerberg

Report on the audit of the

consolidated financial statements

Opinion

We have audited the consolidated financial statements of Global

Fashion Group S.A. and its subsidiaries (the “Group” or “GFG”)

from section 4.1 to section 4.6, which comprise the consolidated

statement of financial position as at 31 December 2023, the

consolidated statement of profit or loss, the consolidated

statement of comprehensive income, the consolidated statement

of changes in equity and consolidated statement of cash ﬂows for

the year then ended, and the notes to the consolidated financial

statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial

statements give a true and fair view of the consolidated financial

position of the Group as at 31 December 2023, and of its

consolidated financial performance and its consolidated cash

ﬂows for the year then ended in accordance with International

Financial Reporting Standards (“IFRS”) as adopted by the

European Union.

Basis for Opinion

We conducted our audit in accordance with EU Regulation N°

537/2014, the Law of 23 July 2016 on the audit profession (the

“Law of 23 July 2016”) and with International Standards on

Auditing (“ISAs”) as adopted for Luxembourg by the “Commission

de Surveillance du Secteur Financier” (“CSSF”). Our

responsibilities under the EU Regulation Nº 537/2014, the Law

of 23 July 2016 and ISAs are further described in the

“Responsibilities of the “réviseur d’entreprises agréé” for the

audit of the consolidated financial statements” section of our

report. We are also independent of the Group in accordance

with the International Ethics Standards Board for Accountants’

Code of Ethics for Professional Accountants (“IESBA Code”) as

adopted for Luxembourg by the CSSF together with the ethical

requirements that are relevant to our audit of the consolidated

financial statements, and have fulfilled our other ethical

responsibilities under those ethical requirements. We believe

that the audit evidence we have obtained is sucient and

appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the

consolidated financial statements of the current period. These

matters were addressed in the context of the audit of the

consolidated financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on

these matters.

1. Revenue recognition and returns allowances

Risk Identified

The Group’s revenue is mainly generated from retail sales of

fashion products to direct customers through GFG’s applications

and websites. For retail sales, revenue corresponds to the

amount of the consideration GFG expects to receive as exchange

for transferring the promised goods or services net of sales

deductions including returns, taxes and duties. Historical

rejections and returns rates are used to anticipate future

rejections and returns in order to deduct such anticipated

returns from revenue leading to net revenue. The customers

have the option to return merchandise free of charge within the

revocation period granted in the various countries in which GFG

operates.

GFG’s management estimates expected returns based on

assumptions and judgments in particular based on customer

demographics by country, timing and method of payments,

product category and service level, taking into consideration the

seasonal eects and historical trends.

Due to the high transaction volume of the sales of merchandise,

the generally possible risk of fictitious revenue and the uncertain

estimate of expected returns, we consider the occurrence and

measurement of revenue from the delivery of merchandise to be

a key audit matter.

Our answer

Our audit procedures over revenue and related returns

allowances included, among others:

•

We documented our understanding of the revenue recognition

process, performed walkthroughs over each class of revenue

transactions and evaluated the design and implementation of

the related controls, and tested their operating eectiveness.

•

We understood and assessed IT controls in place for the

systems in scope, assisted by our information technology

specialists. We tested the operating eectiveness of controls

around management of access rights, and evaluated respective

ISAE reports from the respective service providers.

• We tested the end-to-end reconciliation from the e-commerce

platform to the general ledger.

•

We assessed the compliance requirements and accounting

treatment of revenue recognition in accordance with IFRS 15.

• We tested on a sample basis the credit notes issued during the

year, in addition to those issued subsequent to year end and

assessed the reversal of revenue and whether it is supported

by adequate evidence.

•

We performed sales cuto testing and checked that the revenue

is recognised when goods have been delivered to customers.

•

We read the terms of coupons issued and discounts allowed

and we tested the allocation of cash received from the

customers between the fair value of goods sold and coupons

issued.

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

• We tested the arithmetical accuracy of the computation of the

provision on sales returns.

•

We tested the assumptions associated with the provision for

sales returns based on historical fact patterns and trends in

each of the significant locations.

•

We tested the accuracy of customer bill generation on a sample

basis and tested a sample of the credits and discounts applied

to customer bills.

• We traced cash receipts for a sample of customers back to the

customer invoices and to the general ledger to cover the

completeness over the revenue and related returns.

•

We vouched from general ledger a sample of transactions to

the related customer invoices and delivery slips in order to

cover the existence of revenue and related returns.

•

We performed a correlation testing between sales, receivables

and cash and we obtained audit supporting evidence (delivery

slips, invoices, payment receipts) for a test of sales based on

mathematical statistical assumptions regarding the existence

of revenue.

•

We performed substantive analytical procedures on revenue

based on our industry knowledge, forming an expectation of

revenue based on key performance indicators.

• We assessed the adequacy of the expected credit loss of trade

receivables, its computation methodology, and analyzed

individual significant long outstanding balances.

•

We assessed the adequacy of the Group’s disclosures in respect

of the accounting policies on revenue recognition, revenue and

receivables disclosures as disclosed in Note 3 and Note 24 to

the consolidated financial statements.

2. Inventories and inventory allowances

Risk Identified

The merchandise inventory of GFG is continuously subject to

risks associated with existing and potential future excess stocks,

which are sold with high discounts. Write downs on estimated

future excess stocks as well as existing excess stocks are

calculated at the end of the reporting period and recognised in

the consolidated financial statements.

Significant judgement is required in assessing the appropriate

level of the provision for slow moving and/or obsolete inventory.

Such judgements include management’s expectations of

forecast inventory demand, supply chain, fulfilment, plans to

dispose of inventories at a lower cost. As a result, we consider

the measurement of inventories and inventory allowances to be

a key audit matter.

Our answer

Our audit procedures over inventories and inventory allowances

included, amongst others:

•

We assessed the compliance of GFG’s accounting policies in

relation to inventory and inventory allowances with International

Financial Reporting Standards as adopted by the EU.

•

We observed physical inventory counts at major locations to

ascertain the condition of inventory and performed testing on

a sample of items to assess the cost basis and net realisable

value of inventory.

•

We checked the clerical accuracy of the computation of

provision for slow moving and obsolete inventories as at

31 December 2023 and we assessed the assumptions used.

•

We have also read the inventory management report to identify

slow moving or obsolete inventories.

•

We obtained a detailed analysis by category of the inventory

provision and checked its clerical accuracy based on past

historical experience and data.

•

Within the scope of the inventory valuation, GFG’s management

considers the expected sell through of merchandise for various

sales channels and seasons. We compared the timing of the sell

through using past data with actual sales and examined any

significant deviations or irregularities in detail.

•

We assessed the adequacy of the Group’s disclosures in respect

of the accounting policies on inventories and the inventory

allowances in Note 3 and Note 15 to the consolidated financial

statements.

3. Non-identification of impairment on Goodwill

and other intangible assets

Risk Identified

GFG accounted for a material amount of goodwill generated

from business combinations on its statement of financial

position. Goodwill is carried at cost less accumulated impairment

losses, if any and is allocated to cash-generating units or Group

of cash-generating units (“CGUs”). In addition, GFG accounted

for a material amount of intangible assets consisting of

trademarks and customer relationships arising from business

combinations.

As of 31 December 2023, goodwill amounts to € 56.1 million and

intangible assets to € 79.4 million.

These amounts are material to the consolidated financial

statements. In addition, the impairment assessment process

includes significant judgements and is based on assumptions

derived from the Group’s business plan which are aected by

expected future market or economic conditions. As a result, we

consider the measurement of goodwill and intangibles assets to

be a key audit matter.

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

Our answer

Our audit procedures over non-identification of impairment on

Goodwill and other intangible assets included, amongst others:

•

We assessed the Group’s determination of cash generating

units (“CGUs”) based on our understanding of the nature of the

Group and its operations, and assessed whether this was

consistent with the internal reporting of the business.

•

We assessed the historical accuracy of management’s estimates

and budget.

•

We evaluated the key assumptions of the cash ﬂow forecasts

from the business plan, taking into account our knowledge of

the business and relevant external information.

•

We involved our valuation experts to assist us with our

assessment of the WACC, expected inﬂation rates and terminal

growth rates and the other management assumptions used in

the model by comparing to the relevant assumptions to the

relevant industry trends and economic forecast.

•

We recomputed the value in use of each CGU prepared by

Management and compared with the carrying value in order to

determine whether an impairment exists. When applicable we

tested the clerical accuracy of the computation of the

impairment.

•

We assessed the Group’s sensitivity analysis on the CGUs in two

main areas being the discount rate and growth rate assumptions.

•

We assessed the adequacy of the Group’s disclosures in respect

of the accounting policies on goodwill and intangible assets in

Note 3 and Note 13 to the consolidated financial statements.

4. Recognition of income and indirect tax

contingencies and tax positions

Risk Identified

Income and indirect tax positions were significant to our audit

because the assessment process is complex and involves a high

degree of judgment and the amounts involved are material to the

consolidated financial statements as a whole. Legislators and tax

authorities may change territoriality rules or their interpretation for

the application of value-added tax (“VAT”) or similar indirect taxes

on transactions, which are considered as uncertain tax positions

and may lead to significant additional payments for past and future

periods. In addition, court decisions are sometimes ignored by

competent tax authorities or overruled by higher courts, which

could lead to higher legal and tax advisory costs and create

significant uncertainty.

Moreover, the nature of the Group’s business model, involving

delivering goods and services to customers in territories where the

Group may have limited physical presence, could lead to tax

authorities challenging the allocation of taxable income resulting

in a higher tax burden for the Group. Management exercises

judgment in assessing the level of provision required for both

indirect and income taxation when such taxes are based on the

interpretation of complex tax laws. The future actual outcome of

the decisions concerning these tax exposures may result in

materially higher or lower amounts than the amounts included in

the accompanying Consolidated Financial Statements.

Our answer

Our audit procedures over recognition of direct and indirect tax

contingencies and tax positions, amongst others:

• We assessed the management’s assumptions and estimates in

relation to uncertain tax positions, and we considered the

advice received by management from external parties to

support their position. We have involved our tax specialists,

where relevant, to consider management’s assessment of the

tax positions and related provision/liability accruals when

necessary.

•

We further assessed the recoverability of indirect tax receivables

and the completeness of indirect tax payables in light of current

laws and regulations and their related interpretations.

•

We also assessed the adequacy of the Group’s disclosures in

respect of the tax contingencies and tax positions as set out in

Notes 30 and 31 of the accompanying Consolidated Financial

Statements.

Other information

The Supervisory Board is responsible for the other information.

The other information comprises the information included in the

consolidated management report from section 2.1 to section 2.5

and the corporate governance statement in section 1.3 but does

not include the consolidated financial statements and our report

of “réviseur d’entreprises agréé” thereon.

Our opinion on the consolidated financial statements does not

cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the consolidated financial

statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is

materially inconsistent with the consolidated financial statements

or our knowledge obtained in the audit or otherwise appears to

be materially misstated. If, based on the work we have performed,

we conclude that there is a material misstatement of this other

information, we are required to report this fact. We have nothing

to report in this regard.

Responsibilities of the Supervisory Board and

those charged with governance for the consolidated

fina

ncial statements

The Supervisory Board is responsible for the preparation and fair

presentation of these consolidated financial statements in

accordance with IFRS as adopted by the European Union, and for

such internal control as the Supervisory Board determines is

necessary to enable the preparation of consolidated financial

statements that are free from material misstatement, whether due

to fraud or error.

The Supervisory Board is responsible for presenting and marking

up the consolidated financial statements in compliance with the

requirements set out in the Delegated Regulation 2019/815 on

European Single Electronic Format (“ESEF Regulation”).

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

In preparing the consolidated financial statements, the

Supervisory Board is responsible for assessing the Group’s ability

to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of

accounting unless the Supervisory Board either intends to

liquidate the Group or to cease operations, or has no realistic

alternative but to do so.

Those charged with governance are responsible for overseeing

the Group’s financial reporting process.

Responsibilities of the “réviseur d’entreprises agréé”

for the audit of the consolidated financial statements

The objectives of our audit are to obtain reasonable assurance

about whether the consolidated financial statements as a whole

are free from material misstatement, whether due to fraud or

error, and to issue a report of the “réviseur d’entreprises agréé”

that includes our opinion. Reasonable assurance is a high level

of assurance, but is not a guarantee that an audit conducted

in accordance with EU Regulation N° 537/2014, the Law of

23 July 2016 and with the ISAs as adopted for Luxembourg by the

CSSF will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could reasonably

be expected to inﬂuence the economic decisions of users taken

on the basis of these consolidated financial statements.

As part of an audit in accordance with EU Regulation N°

537/2014, the Law of 23 July 2016 and with ISAs as adopted for

Luxembourg by the CSSF, we exercise professional judgment

and maintain professional skepticism throughout the audit. We

also:

•

Identify and assess the risks of material misstatement of the

consolidated financial statements, whether due to fraud or

error, design and perform audit procedures responsive to

those risks, and obtain audit evidence that is sucient and

appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations,

or the override of internal control.

•

Obtain an understanding of internal control relevant to the

audit in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing

an opinion on the eectiveness of the Group’s internal control.

•

Evaluate the appropriateness of accounting policies used and

the reasonableness of accounting estimates and related

disclosures made by the Supervisory Board.

•

Conclude on the appropriateness of Supervisory Board’s use

of the going concern basis of accounting and, based on the

audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant

doubt on the Group’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are

required to draw attention in our report of the “réviseur

d’entreprises agréé” to the related disclosures in the

consolidated financial statements or, if such disclosures are

inadequate, to modify our opinion. Our conclusions are

based on the audit evidence obtained up to the date of our

report of the “réviseur d’entreprises agréé”. However, future

events or conditions may cause the Group to cease to

continue as a going concern.

•

Evaluate the overall presentation, structure and content of the

consolidated financial statements, including the disclosures,

and whether the consolidated financial statements represent

the underlying transactions and events in a manner that

achieves fair presentation.

•

Assess whether the consolidated financial statements have

been prepared, in all material respects, in compliance with

the requirements laid down in the ESEF Regulation.

•

Obtain sucient appropriate audit evidence regarding the

financial information of the entities and business activities

within the Group to express an opinion on the consolidated

financial statements. We are responsible for the direction,

supervision and performance of the Group audit. We remain

solely responsible for our audit opinion.

We communicate with those charged with governance

regarding, among other matters, the planned scope and timing

of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during

our audit.

We also provide those charged with governance with a statement

that we have complied with relevant ethical requirements

regarding independence, and communicate to them all

relationships and other matters that may reasonably be thought

to bear on our independence, and where applicable, related

safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of most

significance in the audit of the consolidated financial statements

of the current period and are therefore the key audit matters. We

describe these matters in our report unless law or regulation

precludes public disclosure about the matter.

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

Report on other legal and regulatory requirements

We have been appointed as “réviseur d’entreprises agréé” by the

General Meeting of the Shareholders on 14 June 2023 and the

duration of our uninterrupted engagement, including previous

renewals and reappointments, is 5 years.

The consolidated management report is consistent with the

consolidated financial statements and has been prepared in

accordance with applicable legal requirements.

The accompanying corporate governance statement in section

1.3 is the responsibility of the Supervisory Board. The information

required by article 68ter paragraph (1) letters c) and d) of the law

of 19 December 2002 on the commercial and companies register

and on the accounting records and annual accounts of

undertakings, as amended, is consistent with the consolidated

financial statements and has been prepared in accordance with

applicable legal requirements.

We have checked the compliance of the consolidated financial

statements of the Group as at 31 December 2023 with relevant

statutory requirements set out in the ESEF Regulation that are

applicable to the financial statements. For the Group, it relates

to:

• Financial statements prepared in valid xHTML format;

•

The XBRL markup of the consolidated financial statements

using the core taxonomy and the common rules on markups

specified in the ESEF Regulation.

In our opinion, the consolidated financial statements of the

Group as at 31 December 2023, identified as “GFG_

ConsolFS_31.12.23.xhtml”, have been prepared, in all material

respects, in compliance with the requirements laid down in the

ESEF Regulation.

We confirm that the audit opinion is consistent with the additional

report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in

EU Regulation No 537/2014 were not provided and that we

remained independent of the Group in conducting the audit.

Ernst and Young

Société anonyme

Cabinet de révision agréé

Gael Denis

Luxembourg, 5 March 2024

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

CONTENTS

SECTION4

4.1 CONSOLIDATED

STATEMENT OF

PROFIT OR LOSS 50

4.2 CONSOLIDATED

STATEMENT OF

COMPREHENSIVE

INCOME 51

4.3 CONSOLIDATED

STATEMENT OF

FINANCIAL POSITION 52

4.4 CONSOLIDATED

STATEMENT OF

CHANGES IN EQUITY 54

4.5 CONSOLIDATED

STATEMENT OF

CASH FLOWS 56

4.6 NOTES TO THE

CONSOLIDATED

FINANCIAL

STATEMENTS 58

CONSOLI DATED

FINANCIAL

STATE MENTS

ANNUAL REPORT 2023 | GFG

CONSOLIDATED FINANCIAL STATEMENTS

4.1 CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended 31 December 2023

In €m Note 2023 2022

Continuing operations

Revenue 24 838.0 1,069.2

Cost of sales (485.1) (616.5)

Gross profit 352.9 452.7

Operating (expenses) / income

Selling and distribution expenses 25,26 (288.3) (353.4)

Administrative expenses 25,26 (183.8) (199.0)

Other operating income 27 3.4 2.3

Other operating expenses 27 (7.9) (4.1)

Net impairment losses on financial assets

(0.1) (0.8)

Impairment of non-financial assets 11,12,13 (54.7) (41.2)

Loss before interest and tax (EBIT)

(178.5) (143.5)

Gain on repurchase of Convertible bonds 22 18.3 9.3

Finance Income 28 15.9 8.4

Finance Costs 28 (21.7) (41.3)

Loss before tax from continuing operations (166.0) (167.1)

Income taxes expense 30 (13.9) (7.7)

Loss for the year from continuing operations (179.9) (174.8)

Net (loss)/ income from discontinued operations 29 (1.6) (21.8)

Loss for the year (181.5) (196.6)

Loss for the year attributable to:

Equity holders of the parent (178.4) (196.3)

Non-controlling interests (3.1) (0.3)

Loss for the year (181.5) (196.6)

Loss per share (€)

Basic and diluted, loss per share attributable to ordinary equity holders of the parent (€) 10 (0.8) (0.9)

Loss per share for continuing operations (€)

Basic and diluted, loss per share for continuing operations per share attributable

to ordinary equity holders of the parent (€) 10 (0.8) (0.8)

The amounts shown here do not correspond to the 2022 financial statements and reﬂect adjustments made in connection

with the presentation ofdiscontinued operations (Note 29).

Net impairment losses on financial assets are calculated by considering expected credit losses of financial assets

and include write-os, additions to provisions, usage of provisions and income from the reversal of provisions.

EBIT is calculated as loss for the year before income taxes, finance income and finance costs.

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

4.2 CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

For the year ended 31 December 2023

In €m 2023 2022

Loss for the year (181.5) (196.6)

Other comprehensive income

items that will be or have been subsequently reclassified to profit or loss, net of tax

Exchange dierences on translation to presentation currency net of tax from continuing operations (2.3) 7.0

Exchange dierences on translation to presentation currency recycled to profit or loss – 86.8

Net other comprehensive (loss)/ income for the year, net of tax (2.3) 93.8

Total comprehensive (loss) for the year, net of tax (183.8) (102.8)

Total comprehensive (loss) for the year attributable to:

Equity holders of the parent (180.8) (102.5)

Non-controlling interests (3.0) (0.3)

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

4.3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2023

ASSETS

In €m Note 31 Dec 2023 31 Dec 2022

Non-current assets

Property, Plant and Equipment 11 57.4 65.1

Right of Use Asset 12 51.5 66.0

Goodwill 13 56.1 95.7

Other intangible assets 13 79.4 99.9

Other financial assets 16 39.8 36.2

Income tax receivables – 0.2

Deferred tax assets

30 - 2.8

Total non-current assets 284.2 365.9

Current assets

Inventories 15 110.5 170.2

Trade and other receivables 16 38.6 37.1

Other financial assets

16 19.2 23.2

Other financial assets – investment funds

16 161.1 226.5

Income tax receivables

2.5 2.9

Other non-financial assets

14 20.0 24.6

Cash and cash equivalents

17 225.9 323.5

Total current assets 577.8 808.0

Total assets 862.0 1,173.9

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EQUITY AND LIABILITIES

In €m Note 31 Dec 2023 31 Dec 2022

Equity

Common share capital

18 2.2 2.2

Share premium

18 303.6 303.6

Treasury shares

18 (7.5) (7.5)

Capital reserves

18 2,102.2 2,102.2

Other reserves

25.8 12.6

Share-based payments reserves

18,19 157.9 155.1

Convertible bond equity component

18,22 23.1 36.3

Accumulated Deficit

(2,323.1) (2,142.6)

Foreign currency translation reserve

11.2 13.6

Equity attributable to holders of the parent 295.4 475.5

Non-controlling interests 18 0.3 3.3

Total equity 295.7 478.8

Non-current liabilities

Lease liabilities 12 43.6 56.1

Other financial liabilities – Convertible bonds 22 160.3 243.8

Provisions 21 4.1 2.6

Deferred tax liabilities 30 4.4 5.0

Non-financial liabilities 23 37.1 1.0

Total non-current liabilities 249.5 308.5

Current liabilities

Borrowings 20 11.9 17.0

Lease liabilities 12 18.1 17.9

Trade payables and other financial liabilities 22 189.0 200.5

Other financial liabilities − Convertible bonds 22 5.5 8.2

Provisions 21 16.6 20.3

Income tax liabilities 23,30 20.8 18.3

Non-financial liabilities 23 54.9 104.4

Total current liabilities 316.8 386.6

Total liabilities

566.3 695.1

Total equity and liabilities 862.0 1,173.9

The accompanying notes are an integral part of these consolidated financial statements.

4.3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2023 (continued)

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

4.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2023

In €m

Equity attributable to shareholders of the Parent

Non-

controlling

interests

Total

equityNote

Common

capital

premium

Treasury

Capital

reserves

Other

reserves

Share-

based

payments

reserves

Con vertible

bonds

equity

com ponent

Accumulated

deficit

Foreign

currency

trans lation

reserve Total

As at 1 January 2023

2.2 303.6 (7.5) 2,102.2 12.6 155.1 36.3 (2,142.6) 13.6 475.5 3.3 478.8

Loss for the year

– – – – – – – (178.4) – (178.4) (3.1) (181.5)

Total Other

ComprehensiveIncome – – – – – – – – (2.4) (2.4) 0.1 (2.3)

Total comprehensive (loss)/

income for the year – – – – – – – (178.4) (2.4) (180.8) (3.0) (183.8)

Share-based payment

expenses 19 – – – – – 2.8 – – – 2.8 – 2.8

Adjustment for

Hyper inﬂation 34 – – – – – – – (2.1) – (2.1) – (2.1)

Repurchase of

convertiblebonds 18,22 – – – – 13.2 – (13.2) – – – – –

Balance as at

31 December 2023 2.2 303.6 (7.5) 2,102.2 25.8 157.9 23.1 (2,323.1) 11.2 295.4 0.3 295.7

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

4.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

In €m

Equity attributable to Shareholders of the Parent

Non-

controlling

interests

Total

equityNote

Common

capital

premium

Treasury

Capital

reserves

Other

reserves

Share-

based

payments

reserves

Convertible

bonds

equity

component

Accumulated

deficit

Foreign

currency

trans lation

reserve Total

As at 1 January 2022

2.2 303.6 (7.5) 2,102.2 0.3 146.3 48.6 (1,945.9) (80.1) 569.7 3.6 573.3

Loss for the year

– – – – – – – (196.3) – (196.3) (0.3) (196.6)

Other comprehensive

income from continuing

operations – – – – – – – – 7.0 7.0 – 7.0

Other comprehensive loss

recycled to profit or loss 86.8 86.8 – 86.8

Total Other Comprehensive

Income 93.8 93.8 – 93.8

Total comprehensive (loss) /

income for the year – – – – – – – (196.3) 93.8 (102.5) (0.3) (102.8)

Share-based payments

expenses 19 – – – – – 8.8 – – – 8.8 – 8.8

Adjustment for

Hyperinﬂation 34 – – – – – – – (0.4) – (0.4) – (0.4)

Repurchase of

Convertible Bonds 18, 22 – – – – 12.3 – (12.3) – – – – –

Balance at

31 December 2022 2.2 303.6 (7.5) 2,102.2 12.6 155.1 36.3 (2,142.6) 13.6 475.5 3.3 478.8

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

4.5 CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2023

In €m Note 2023

2022

Cash flows from operating activities

Loss for the year before tax from continuing operations

(166.0) (167.1)

(Loss) / Profit before tax from discontinued operations, including loss on disposal

(1.6) (4.7)

Loss for the year before tax

(167.6) (171.8)

Adjustments for:

Depreciation of property, plant and equipment and right-of-use assets

26.8

43.9

Amortisation of intangible assets

31.3

35.4

Impairment of non-financial assets

13 54.7

41.2

Impairment losses on other financial assets

0.1

–

Share based payment expense

19 1.7

9.6

Fair value remeasurement

28 (9.6)

12.4

Interest income

(8.2)

(2.6)

Interest costs

24.5

43.2

Foreign currency gains

(2.6)

(33.5)

Other non-cash transactions

(2.0)

0.2

Loss / (Gain) from disposal of property, plant and equipment and intangible assets

3.1

0.5

Loss from disposal of subsidiaries

29 –

112.5

Gain on repurchase of Convertible bonds

22 (18.3)

(9.3)

Changes in Provisions

(1.5)

(2.3)

Cash from operations before changes in working capital

(67.6) 79.4

Increase in inventories

54.5 (21.7 )

Decrease in trade receivables

(1.8) 5.4

Increase in trade payables

(13.7) 26.0

Changes in other receivables and other payables

(8.5) 36.4

Cash flows (used in)/from operations (37.1) 125.5

Income tax paid

30 (6.6) (15.2)

Interest received 1.2 2.6

Interest paid (5.0) (20.3)

Net cash flow (used in)/from operating activities (47.5) 92.6

Cash flows from investing activities

Purchase of property, plant and equipment (4.6) (22.8)

Proceeds from sale of property, plant and equipment 0.3 0.2

Cash inﬂow from disposal of subsidiaries and associated companies 29 – 36.7

Acquisition of intangible assets and capitalised development expenditures (24.3) (44.8)

Cash outﬂow from other securities, deposits and transfer of restricted cash 2.5 (2.3)

Cash outﬂow from investment funds 16 75.0 (5.0)

Net cash flow from/(used in) investing activities 48.9 (38.0)

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF CASH FLOWS

In €m Note 2023 2022

Cash flows from financing activities

Proceeds from borrowings and other financial liabilities

20 44.0 39.6

Repayment of borrowings

20 (48.5) (52.6)

Coupon payments on Convertible bonds

22 (2.9) (4.1)

Repurchase of Convertible bonds

18,22 (74.7) (74.3)

Payments under lease liabilities

(17.4) (30.5)

Net cash flow used in financing activities (99.5) (121.9)

Cash and cash equivalents at the beginning of the year 17 323.5 400.5

Eect of exchange rate changes on cash and cash equivalents

0.5 (9.7)

Cash and cash equivalents at the end of the year 17 225.9 323.5

Cash ﬂows are presented for both continuing and discontinued operations in line with IFRS 5

Figures are re-presented for discontinued operations

The accompanying notes are an integral part of these consolidated financial statements.

ANNUAL REPORT 2023 | GFG

CONSOLIDATED STATEMENT OF CASH FLOWS

4.5 CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2023 (continued)

4.6 NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

General Information

The consolidated financial statements present the operations

of Global Fashion Group S.A. (‘GFG S.A.’) and its subsidiaries.

GFG S.A. was incorporated on 1 October 2014. GFG S.A is a

stock corporation (société anonyme) under the laws of the Grand

Duchy of Luxembourg and is registered in the Luxembourg

Trade and Companies Register: RCS B 190.907. GFG S.A. is

domiciled in Luxembourg with its registered oce located at 5,

Heienha L-1736 Senningerberg. Since 2 July 2019, the shares

of the Company are traded on the regulated market (Prime

Standard) of the Frankfurt Stock Exchange.

The consolidated financial statements were approved

and authorised for issue by the Supervisory Board on

5 March 2024. The shareholders will ratify the approval of the

financial statements at the annual general meeting.

Business Activities

The Group’s principal business activity is fashion and lifestyle

ecommerce and associated ancillary services such as marketing,

technology, payment, warehousing, and logistics services. The

Group oers a wide assortment of leading international and local

fashion brands, as well as a selection of own label brands. The

Group operates in growth markets through three ecommerce

platforms across three regions in 11 countries under the

following labels: Dafiti (LATAM), Zalora (SEA) and THE ICONIC

(ANZ). Please refer to note 6 for more details on our segmental

disclosures.

On 6 September 2023 it was announced that Global Fashion

Group would close operations in Argentina. Operating in

Argentina was challenging due to multiple factors, including

consistently high inﬂation, restrictive import controls and

the exodus of international brands and vendors. Despite the

best eorts of our local and global teams, Dafiti Argentina

experienced worsening performance since 2020, with no signs of

improvement. In accordance with IFRS 5, Argentina is presented

as a discontinued operation in these financial statements.

Across the remainder of the regions, consumer sentiment has

weakened as a result of inﬂation, political uncertainty, rising

interest rates and the continued shift back to physical retail.

Such cost of living pressures significantly stepped down

consumer expenditure in our markets and fashion has been

particularly vulnerable to these spending cuts because of its

discretionary nature. The projected cashﬂows reﬂect the impact

of macroeconomic and market challenges, particularly in LATAM

and SEA and the Group have recorded impairment charges for

the year of €54.7 million in respect of the Group’s investments

in LATAM and SEA (2022: €41.2 million in respect of the Group’s

investment in L ATAM).

The variance in revenue and margin over the course of the

year also reﬂects the seasonality of fashion sales. The Group’s

presence in the southern hemisphere (Australia, New Zealand

and Brazil) and also countries that cross the equator including

South East Asia and Colombia, smooths out the seasonal risks of

being concentrated in one geography. New season collections

drive most sales in the second and fourth quarter, with the first

and third quarter focusing on end of season sales.

On 25 August 2023, the Group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €74.6 million in aggregate principal

amounts (approximately 27% of the principal amount as at the

end of December 2022).

On 31 August 2023 the Group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €27.0 million in aggregate principal

amounts (approximately 10% of the principal amount as at the

end of December 2022). This repurchase reﬂected the strength

of the Group’s liquidity position and the Board’s confidence in

delivering our long-term strategy within the funding available.

See note 18 and 22 for further details.

2. BASIS OF PREPARATION

Statement of Compliance

These consolidated financial statements have been prepared

in accordance with International Financial Reporting Standards

(“IFRS”) as issued by the International Accounting Standards

Board (“IASB”) and adopted by the European Union (“EU”).

The principal accounting policies applied in the preparation

of these consolidated financial statements are set out below.

These policies have been consistently applied to all the periods

presented except as further explained in note 5. IAS 29 has been

applied since 2018 as Argentina is in hyperinﬂation.

The consolidated financial statements are prepared on a

historical cost basis, unless otherwise stated. The consolidated

financial statements have been prepared on a going concern

basis of accounting.

The consolidated financial statements are presented in Euro

(“€”), unless otherwise stated and all values are rounded to

he nearest million with a fractional digit in accordance with

a commercial rounding approach, except when otherwise

indicated. This may result in rounding dierences as well as

percentage figures presented may not exactly reﬂect the

absolute figures they relate to.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. SUMMARY OF MATERIAL

ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements comprise the financial

statements of the Company and its subsidiaries as of

31 December 2023 and 2022. Subsidiaries are those investees

that the Company controls because (i) it has power to direct

relevant activities of the investees that significantly aect their

returns, (ii) has exposure, or rights, to variable returns from its

involvement with the investees, and (iii) has the ability to use

its power over the investees to aect the amount of investor’s

returns.

Non-controlling interest represents the equity in subsidiaries

not attributable, directly or indirectly, to the Company. Non-

controlling interests form a separate component of the Group’s

equity.

Subsidiaries are consolidated from the date on which

control is transferred to the Group (acquisition date) and are

deconsolidated from the date on which control ceases.

Profit or loss and each component of other comprehensive

income (“OCI”) are attributed to the owners of the Group and to

the non-controlling interests.

The Company reassesses whether or not it controls an investee

if facts and circumstances indicate that there are changes to one

or more of the three elements of control.

When necessary, adjustments are made to the financial

statements of subsidiaries to bring their accounting policies

in line with the Group’s accounting policies. All intra-group

receivables, liabilities, and results relating to transactions

between members of the Group are eliminated in full on

consolidation.

A change in the ownership interest of a subsidiary, without a

loss of control, is accounted for as an equity transaction. In such

a case, the carrying amounts of the net assets attributable to

the owners of the parent and the non-controlling interests are

adjusted to reﬂect the changes in their relative interests in the

subsidiary. The dierence between this adjustment and the fair

value of the consideration paid or received is recognised directly

in equity and attributed to the owners of the parent.

In case a change in the ownership interest of a subsidiary results

in a loss of control, the net assets and the non-controlling

interests have to be derecognised. At this time, the gain or loss

is derived from the dierence between the sum of proceeds

from the divestment, the fair value of any retained interest in

the former subsidiary and the non-controlling interest to be

derecognised, and the divested net assets of the subsidiary.

Additionally, any amounts recognised in other comprehensive

income in relation to the divested subsidiary are reclassified to

profit or loss in case the respective standard on which basis they

were initially recognised requires such a recycling. The resulting

gains or losses are recognised in the income statement.

Foreign Currency Translation

Items included in the financial statements of each of the

Group’s entities are measured using the currency of the primary

economic environment in which the entity operates (‘the

functional currency’). The functional currency of the Company

as well as the reporting currency of the Group is the Euro (“€”).

In determining the functional currencies of the entities in the

Group, judgement is required to determine the currency that

has the biggest inﬂuence on the sales prices for goods. This is

typically determined by assessing which country’s competitive

forces and regulations impact the sales prices the most.

Foreign currency transactions are translated into the functional

currency using the exchange rates prevailing at the transaction

date. Foreign exchange gains and losses resulting from the

settlement of such transactions as well as from the translation

of monetary assets and liabilities denominated in foreign

currencies at year-end exchange rates are recognised in the

statement of profit or loss.

The results and financial position of all the Group entities that

have a functional currency dierent from the presentation

currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position

presented are translated at the closing rate on the date of

that statement of financial position;

• non-monetary equity items in a foreign currency are

translated using historic rates;

• income and expenses for each income statement are

translated at average exchange rates; and

• all resulting exchange dierences are recognised in other

comprehensive income (foreign currency translation

reserve).

Application of IAS 29 Financial Reporting

in Hyperinflationary Economies

The Argentinian economy has been considered to be

hyperinﬂationary as of Q3 2018, as its cumulative inﬂation rate

over three years had exceeded 100 per cent.

The carrying amounts of non-monetary assets and liabilities

have been adjusted to reﬂect the change in the general price

index from the date of acquisition to the end of the reporting

period. The price index used at the reporting date was Instituto

de Capacitación Profesional (“ICP”).

All items recognised in the income statement have been restated

by applying the change in the general price index from the dates

when the items of income and expenses were initially earned or

incurred to the end of the reporting period.

At the beginning of the first period of application (1 January 2018),

the components of equity, except retained earnings, have been

restated by applying a general price index from the dates the

components were contributed or otherwise arose.

These restatements have been recognised directly in equity as

an adjustment to opening retained earnings. Restated retained

earnings have been derived from all other amounts in the

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

restated statement of financial position. At the end of the first

period and in subsequent periods all components of equity have

been and will be restated by applying a general price index.

As the presentation currency of the Group is that of a non-

hyperinﬂationary economy, comparative amounts have not

been adjusted for changes in the price level or exchange rates

in the current year. Dierence between the closing equity of

the previous year and the opening equity of the current year

is recognised in other comprehensive income as a translation

adjustment. See note 34 for further information.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or

is paid to transfer a liability in an orderly transaction between

market participants at the measurement date. Transaction

costs are not included in the fair value. They are accounted for

as prescribed by the applicable accounting standard. The fair

value of non-financial assets is determined as the best use from

a market perspective which may dier from current use of the

asset.

The Group uses measurement techniques that are appropriate

in the circumstances and for which sucient data is available to

measure fair value, maximising the use of relevant observable

inputs and minimising the use of unobservable inputs. In the

measurement of financial assets and liabilities, the credit default

risk is considered.

The fair values for assets and liabilities included in the

consolidated financial statements are classified based on a

three-level hierarchy. The classification is based on the input

parameters of the lowest category that is material to the fair

value measurement:

Level 1: Fair values based on quoted prices in active markets.

Level 2: Fair values that are determined on the basis of

valuation techniques which use inputs that are

substantially based on observable market data.

Level 3: Fair values that are determined on the basis of

valuation techniques which use inputs that are not

based on observable market data.

For assets and liabilities that are recognised in the financial

statements at fair value on a recurring basis, the Group

determines whether the transfers have occurred between levels

in hierarchy by re-assessing categorisation (based on the lowest

level input that is significant to the fair value measurement as a

whole) at the end of each reporting period.

Unobservable inputs are used to measure fair value to the

extent that relevant observable inputs are not available, thereby

allowing for situations in which there is little, if any, market

activity for the asset or liability at the measurement date. An

entity develops unobservable inputs using the best information

available in the circumstances, which might include the entity’s

own data, taking into account all information about market

participant assumptions that is reasonably available.

Management has assessed that the carrying amounts of trade

and other receivables, trade and other payables, other current

financial assets and other current financial liabilities approximate

fair value due to the short-term maturities of these instruments.

Financial Instruments

A financial instrument is any contract that gives rise to a financial

asset of one entity and a financial liability or equity instrument

of another entity.

Financial Assets

A financial asset is recognised at the date when the Group

becomes a party to the contractual provisions of the instrument.

The Group’s financial assets comprise of loans and trade and

other receivables and financial assets at fair value through profit

and loss.

Purchases or sales of financial assets that require delivery of assets

within a time frame established by regulation or convention in

the market place (regular way trades), are recognised on the

trade date, i.e., the date that the Group commits to purchase

or sell the asset.

At initial recognition, all financial assets are measured at fair

value plus, unless the financial asset is measured subsequently

at fair value through profit or loss, transaction costs that are

attributable to the acquisition of the financial asset.

Financial assets are included in current assets, except for those

which maturities are greater than 12 months after the end of

the reporting period. These are classified as non-current assets.

Initial classification and subsequent measurement

The Group classifies financial assets at initial recognition as

financial assets measured at amortised cost, or financial assets

measured at fair value through profit or loss.

Financial assets measured at amortised cost

A financial asset that meets both of the following conditions is

classified as a financial asset measured at amortised cost.

a) The financial asset is held within the Group’s business

model whose objective is to hold assets in order to collect

contractual cash ﬂows.

b) The contractual terms of the financial asset give rise on

specified dates to cash ﬂows that are solely payments of

principal and interest on the principal amount

outstanding.

‘Principal’ is the fair value of the financial asset on initial

recognition and ‘interest’ is consideration for the time

value of money and for the credit risk associated with the

principal amount outstanding during a particular period

of time and for other basic lending risks and costs (e.g.

liquidity risk and administrative costs), as well as a profit

margin. When assessing the contractual terms, the Group

considers contingent events that would change the amount

or timing of cash ﬂows; terms that may adjust the contractual

interest rate, including variable-rate features; prepayment

and extension features; and terms that limit the Group’s

claim to cash ﬂows from specified assets (e.g. non-recourse

features).

After initial recognition, the carrying amount of the financial

asset measured at amortised cost is determined using the

eective interest method, net of impairment loss.

Within the Group, such financial assets are represented by

receivables against payment service providers, trade receivables,

security deposits and other receivables.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Fair value through profit or loss financial assets (FVTPL)

Financial assets with cash ﬂows that do not meet the Soley

Payments of Principal and Interest test (“SPPI”) are classified and

measured at fair value through profit or loss, irrespective of the

business model. Any changes in fair value is recognised in profit

or loss as “finance gain” or “finance loss”.

Within the Group, such financial assets are represented by

investments in investment funds.

Impairment of Financial Assets

All financial assets to which impairment requirements apply

carry a loss allowance estimated based on expected credit

losses (“ECLs”). ECLs are a probability-weighted estimate of

the present value of cash shortfall over the expected life of the

financial instrument.

In the Group, the impairment requirements apply to financial

assets measured at amortised cost.

Trade Receivables and Contract Assets

The Group uses a practical expedient to calculate the expected

credit losses on its trade receivables and contract assets using a

provision matrix. The Group uses historical credit loss experience

(adjusted if necessary for changes in macroeconomic conditions)

to estimate the lifetime expected credit losses.

The impairment provisions calculated using the above provision

matrix shall be recorded on a separate allowance account.

All trade receivables, which are longer than 345 days overdue,

or specifically impaired (e.g. insolvency of the customer), are

deemed not recoverable. Such trade receivables are recognised

as fully impaired and written o. These balances were immaterial

for the current and prior Financial Year. The write-o constitutes

a derecognition event whereby the gross carrying amount of

such trade receivables is reduced against the corresponding

amount previously recorded on the allowance account.

Other Financial Assets

The ECLs for all other financial assets are recognised in two

stages:

• For financial assets for which there has not been a

significant increase in credit risk since initial recognition,

theGroup recognises credit losses which represent the

cash shortfalls that would result if a default occurs in the

12months after the reporting date or a shorter period if

theexpected life of a financial instrument is less than

12months.

• For those financial assets for which there has been a

significant increase in credit risk since initial recognition,

aloss allowance reﬂects credit losses expected over the

remaining life of the financial asset.

The Group considers a financial asset in default when contractual

payments are 90 days past due. However, in certain cases, the

Group may also consider a financial asset to be in default when

internal or external information indicates that the Group is

unlikely to receive the outstanding contractual amounts in full

before taking into account any credit enhancements held by the

Group. A financial asset is written o when there is no reasonable

expectation of recovering the contractual cash ﬂows.

Financial assets of the Group to which the general approach

applies are low credit risk as no significant increases in credit

risk have occurred. Low credit risk only applies to cash, cash

equivalents and restricted cash, which is presented within other

financial assets. This exposure is addressed by distributing its

financial assets over multiple financial institutions with good

credit ratings and investing in money market funds with a AAA

rating (according to Fitch).

The Group recognises in profit or loss, as an impairment gain

or loss, the amount of expected credit losses (or reversal) that

is required to adjust the loss allowance at the reporting date to

the amount that is required to be recognised. See note 32 for

further information.

De-recognition

A financial asset (or, where applicable, a part of a financial

asset or part of a group of similar financial assets) is primarily

derecognised (i.e., removed from the Group’s consolidated

statement of financial position) when:

• The rights to receive cash ﬂows from the asset have expired;

• The Group has transferred its rights to receive cash ﬂows

from the asset or has assumed an obligation to pay the

received cash ﬂows in full without material delay to a third-

party under a ‘pass-through’ arrangement; and either (a) the

Group has transferred substantially all the risks and rewards

of the asset, or (b) the Group has neither transferred nor

retained substantially all the risks and rewards of the asset,

but has transferred control of the asset

Financial Liabilities

A financial liability is recognised when the Group becomes a

party to the contractual provisions of the instrument. All financial

liabilities are measured on initial recognition at fair value net of

directly attributable transaction costs.

The Group’s financial liabilities include trade and other liabilities

and loans and borrowings.

The Group analysed the terms and conditions of financial

instruments that were convertible into common shares of the

Group to determine its appropriate classification under IAS 32

Financial Instruments: Presentation as equity, a financial liability

or as a compound instrument that contains both a liability and an

equity component. Please see note 22 for further details.

Subsequent Measurement

All financial liabilities of the Group are subsequently measured

at amortised cost using the EIR method, as described below:

Loans and Borrowings

After initial recognition, interest-bearing loans and borrowings

are measured at amortised cost using the EIR method. Gains

and losses are recognised in profit or loss when the liabilities

are derecognised as well as through the EIR amortisation

process. Amortised cost is calculated by taking into account

any discount or premium on acquisition and fees or costs that

are an integral part of the EIR. The EIR amortisation is included

as finance expense in the statement of profit or loss. Borrowings

are classified as current liabilities unless the Group has an

unconditional right to defer settlement of the liability for at least

12 months after the reporting date. Fees paid to establish loan

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

facilities are deferred and recognised as transaction costs of

the loan to the extent that it is probable that some or all of the

facility will be drawn down. In this case, the fee is deferred until

the draw-down occurs. To the extent there is no evidence that

it is probable that some or all of the facility will be drawn down,

the fee is capitalised as a pre-payment for liquidity services and

amortised over the period of the facility to which it relates. See

note 20 for further details.

Trade and other payables

Trade payables are obligations to pay for goods or services that

have been acquired in the ordinary course of business from

suppliers. Trade payables are classified as current liabilities if

payment is due within one year or less. If not, they are presented

as non-current liabilities. Trade payables are recognised initially

at fair value and subsequently measured at amortised cost using

the EIR. See note 22 for details.

De-recognition

A financial liability is derecognised when the obligation under

the liability is settled, cancelled, or expired.

When an existing financial liability is replaced by another from

the same lender on substantially dierent terms, or the terms of

an existing liability are substantially modified, such an exchange

or modification is treated as the derecognition of the original

liability and the recognition of a new liability. The dierence in

the respective carrying amounts is recognised in the statement

of profit or loss.

Discontinued operations

A discontinued operation is component of an entity that either

has been disposed of or abandoned. A disposal group which will

be abandoned cannot be classified as a non-current asset held for

sale, because the carrying amount will be principally recovered

through use. The disposal group still needs to meet to represent

either a separate major line of business or a geographical area

of operations; is part of a single coordinated plan to dispose

of a separate major line of business or geographical area of

operations; or is a subsidiary acquired exclusively with a view to

resale and the disposal involves loss of control.

The key to determining at which point the disposal group should

be treated as a discontinued operation is determining the date at

which it ceases to be used and no longer has a remaining useful

economic life. For the Group’s operating disposal group, this will

be the date that no further revenue will be generated and assets

cease to be used, determining their remaining economic life to

be nil. Discontinued operations are excluded from the results

of continuing operations and are presented as a single amount

as profit or loss after tax from discontinued operations in the

statement of profit or loss.

Additional disclosures are provided in Note 29. All other notes

to the financial statements include amounts for continuing

operations, unless indicated otherwise.

Cash and cash equivalents

In accordance with IAS 7, cash and cash equivalents include cash

in hand, demand deposits held with banks and other short-term

highly liquid investments with original maturities of three months

or less, for which the risk of changes in value is considered to

be insignificant and that are held for the purpose of meeting

short-term cash commitments. See note 17 for details.

To establish whether an investment instrument or investment in

investment funds holding debt instruments is classified under

IAS 7 as “Cash and cash equivalents”, the Group assesses if:

• the period taken to redeem an investment from the trade

date is 2 days or less;

• no restrictions or penalty charges on redemption apply;

• the weighted average life or weighted average maturity of

an investment is less than or equal to 90 days or 0.25 years

respectively; and

• volatility of returns over historic 12 months is capped by

1%limit.

Investment instruments which exceed the limits above, do not

meet the criteria for IAS 7 classification per the professional

judgement of the Group management, and will be accounted

for under IFRS 9 as an “Other financial asset” and classified as a

financial asset measured at fair value through profit or loss. See

note 16 for details.

Property, plant and equipment

Items of property, plant and equipment are measured at cost

less accumulated depreciation and any accumulated impairment

losses, where required. Costs of minor repairs and maintenance

are expensed when incurred.

An item of property, plant and equipment is derecognised upon

disposal or when no future economic benefits are expected from

its use or disposal. Gains and losses on disposals, determined by

comparing the net disposal proceeds with the carrying amount

are recognised in profit or loss for the year within other operating

income or expenses.

Depreciation on items of property, plant and equipment is

calculated using the straight-line method to reduce their cost

to their residual values over their estimated useful lives. Leased

assets are depreciated over the shorter of the lease term and

their useful lives unless it is reasonably certain that the Group

will obtain ownership by the end of the lease term.

The assets’ residual values, methods of depreciation and useful

lives are reviewed at the end of each reporting period and

adjusted prospectively, if appropriate.

Depreciation is calculated on a straight-line basis over the

estimated useful lives of the assets, as follows:

Classes of tangible assets

Useful lives in yearsOce / IT equipment 3 – 5Warehouse 10Motor Vehicles 5 – 8

Please refer to note 11 for details.

Leases

At inception of a contract, the Group assesses whether a contract

is, or contains, a lease. A contract is, or contains, a lease if the

contract conveys the right to control the use of an identified asset

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

for a period of time in exchange for consideration. To assess

whether a contract conveys the right to control the use of an

identified asset, the Group assesses whether:

• the contract involves the use of an identified asset – this may

be specified explicitly or implicitly and should be physically

distinct or represent substantially all of the capacity of a

physically distinct asset. If the supplier has a substantive

substitution right, then the asset is not identified;

• the Group has the right to obtain substantially all of the

economic benefits from use of the asset throughout the

period of use; and

• the Group has the right to direct the use of the asset. The

Group has this right when it has the decision-making rights

that are most relevant to changing how and for what

purpose the asset is used. In rare cases where the decision

about how and for what purpose the asset is used is

predetermined, the Group has the right to direct the use

ofthe asset if either:

– the Group has the right to operate the asset; or

– the Group designed the asset in a way that

predetermines how and for what purpose it will be used.

The Group elected to use the exemptions proposed by IFRS 16

on lease contracts for which the lease terms ends within 12

months as of the date of initial application, and lease contracts

for which the underlying asset is of low value. The Group has

leases of certain office equipment (i.e., personal computers,

printing and photocopying machines) that are considered low

value, being below € 5,000.

At inception or on reassessment of a contract that contains a lease

component, the Group allocates the consideration in the contract

to each lease and non-lease component on the basis of their

relative stand-alone prices.

As a lessee

The Group recognizes a right-of-use asset and a lease liability at

the lease commencement date. The right-of-use asset is initially

measured at cost, which comprises the initial amount of the lease

liability adjusted for any lease payments made at or before the

commencement date, plus any initial direct costs incurred and an

estimate of costs to dismantle and remove the underlying asset

or to restore the underlying asset or the site on which it is located,

less any lease incentives received.

The right-of-use asset is subsequently depreciated using the

straight-line method from the commencement date to the earlier

of the end of the useful life of the underlying asset or the end of

the lease term. The estimated useful lives of right-of-use assets

are determined on the same basis as those of property and

equipment. In addition, the right-of-use asset is periodically

reduced by impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

The lease liability is initially measured at the present value of the

lease payments that are not paid at the commencement date,

discounted using the interest rate implicit in the lease or, if that

rate cannot be readily determined, the Group’s incremental

borrowing rate. Generally, the Group uses its incremental

borrowing rate as the discount rate which is a weighted average

based on underlying lease liabilities.

Lease payments included in the measurement of the lease liability

comprise the following:

• fixed payments, including in-substance fixed payments;

• variable lease payments that depend on consumer price

index or a rate, initially measured using the index or rate as

at the commencement date;

• amounts expected to be payable under a residual value

guarantee; and

• the exercise price under a purchase option that is

reasonably certain to be exercised;

• lease payments in an optional renewal period if the Group is

reasonably certain to exercise an extension option, and

penalties for early termination of a lease unless the Group is

reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective

interest method. It is remeasured when there is a change in future

lease payments arising from a change in an index or rate, if there

is a change in the Group’s estimate of the amount expected to be

payable under a residual value guarantee, or if the Group changes

its assessment of whether it will exercise a purchase, extension or

termination option.

When the lease liability is remeasured in this way, a corresponding

adjustment is made to the carrying amount of the right-of-use

asset or is recorded in profit or loss if the carrying amount of the

right-of-use asset has been reduced to zero.

Please refer to note 12 for details.

Goodwill

Goodwill is carried at cost less accumulated impairment losses, if

any. Goodwill is allocated to the cash-generating units (“CGUs”),

or groups of CGUs, that are expected to benefit from the synergies

of the business combination.

The Company tests groups of CGUs to which goodwill has been

allocated for impairment at least annually and whenever indicators

of impairment exist. An impairment loss with respect to goodwill

is not subsequently reversed.

Gains or losses on disposal of an operation within a cash

generating unit to which goodwill has been allocated include the

carrying amount of goodwill associated with the disposed

operation, generally measured on the basis of the relative values

of the disposed operation and the portion of the cash-generating

unit which is retained.

Please refer to note 13 for details.

Other intangible assets

Intangible assets acquired separately are measured on initial

recognition at cost. The cost of intangible assets (trademarks and

customer relationships) acquired in a business combination is

their fair value at the acquisition date. Following initial recognition,

intangible assets are carried at cost less any accumulated

amortisation and any accumulated impairment losses.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Development costs that are directly attributable to the design and

testing of identifiable and unique software products controlled

by the Company are recognised as intangible assets when the

following criteria are met:

• it is technically feasible to complete the software product so

that it will be available for use;

• management intends to complete the software product and

use or sell it;

• there is an ability to use or sell the software product;

• it can be demonstrated how the software product will

generate probable future economic benefits;

• adequate technical, financial and other resources to

complete the development and to use or sell the software

product are available; and

• the expenditure attributable to the software product during

its development can be reliably measured.

Other development expenditures that do not meet these criteria

are recognised as an expense as incurred.

Expenditure incurred during the research phase of an intangible

asset cannot be capitalised and is recognised as an expense.

Intangible assets are amortised over the useful economic life and

assessed for impairment whenever there is an indication that the

carrying amount may not be recoverable and the intangible asset

may therefore be impaired. The amortisation period and the

amortisation method for an intangible asset are reviewed at least

at the end of each reporting period. The amortisation expense on

intangible assets is recognised in the consolidated statement of

profit or loss, in the expense category that best suits the function

of the intangible assets.

Gains or losses arising from de-recognition of an intangible asset

are measured as the difference between the net disposal

proceeds and the carrying amount of the asset and are recognised

in the consolidated statement of profit or loss, when the asset is

derecognised.

The Group’s intangible assets have definite useful lives and

primarily include capitalised software, licences and rights as well

as trademarks and customer relationships.

Intangible assets are amortised using the straight-line method

over their useful

lives:

Classes of other intangible assets

Useful lives in yearsAcquired software licenses / Rights 1 – 5Internally developed software / Website Costs 3 – 5Trademark 15Customer relationships 6 – 16

Please see note 13 for details.

Inventories

Inventories comprise raw materials and supplies, finished goods

and merchandise. Inventories are measured at the lower of cost

and net realisable value. Net realisable value is the estimated

selling price in the ordinary course of business less the estimated

costs of completion and the estimated costs necessary to make

the sale. The cost of inventory is calculated using the weighted

average cost method or the first-in-first-out method.

Write-downs to net realisable value are made to allow for all risks

from slow-moving or obsolescent goods and/or reduced saleability

and are included within cost of sales. When the circumstances that

previously caused inventory to be written down below cost no

longer exist, the write down is reversed. See note 15 for details.

Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an

indication that any non-financial asset may be impaired. The Group

considers the relationship between its market capitalisation and

its book value, among other factors, when reviewing for indicators

of impairment. If market capitalisation is lower than the carrying

value of equity, the market considers the Group’s value is less than

the carrying value and an impairment trigger is met. Assets that

are subject to amortisation are reviewed for impairment whenever

events or changes in circumstances indicate that the carrying

amount may not be recoverable. Goodwill is tested for impairment

at least annually and whenever there are indicators for impairment.

Management tests impairment at a group of CGU’s level with full

allocation of corporate overhead costs.

An impairment loss is recognised for the amount by which the

asset’s carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of the asset’s fair value less costs

of disposal and value in use. For the purpose of impairment testing,

goodwill was allocated to the Group’s group of regional CGUs. A

CGU is the smallest identifiable group of assets that generate cash

inflows that are largely independent of the cash inflows from other

assets or groups. Goodwill arising from business combinations is

allocated to the group of CGUs that are expected to benefit from

the synergies of the business combination.

In assessing value in use, the Discounted Cash Flow (“DCF”)

approach is used as the primary valuation method. The estimated

future cash flows are discounted to their present value using a

risk adjusted discount rate that reflects a current market-based

assessment of the time value of money and the risks specific to

the asset and its forecasts. We derive our discount rates using a

capital asset pricing model.

The Group bases its value-in-use calculations on detailed

budgets and forecasts, which are prepared separately for each

of the Group’s group of CGUs to which the individual assets are

allocated. Internally developed budgets and forecasts generally

cover a period of three years. These are then trended over an

additional two years to reflect a five-year horizon. To calculate the

terminal value of the group of CGUs, the terminal year cash flows

is capitalised into perpetuity using CGU-specific perpetual growth

rates (“PGR”).

Impairment losses are recognised in profit or loss. They are

allocated first to reduce the carrying amount of any goodwill

allocated to the group of CGUs, and then to reduce the carrying

amounts of the other assets in the group of CGUs on a pro rata

basis.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

A previously recognised impairment loss for non-financial assets

other than goodwill is reversed only if there has been a change in

the assumptions used to determine the asset’s recoverable amount

since the last impairment loss was recognised. The reversal is

limited so that the carrying amount of the asset does not exceed its

recoverable amount, nor exceed the carrying amount that would

have been determined, net of depreciation, had no impairment

loss been recognised for the asset in prior years.

Please refer to note 13 for further details.

Prepayments

Prepayments are carried at cost less provision for impairment.

A prepayment is classified as non-current when the goods or

services relating to the prepayment are expected to be obtained

after one year, or when the prepayment relates to an asset which

will itself be classified as non-current upon initial recognition.

Treasury shares

Own equity instruments that are reacquired (treasury shares)

are recognised at cost and deducted from equity. No gain or

loss is recognised in profit or loss on the purchase, sale, issue or

cancellation of the Group’s own equity instruments. Any difference

between the carrying amount and the consideration, if reissued,

is recognised in directly in equity. Please see note 18 for further

details.

Provisions

Provisions are recognised when the Group has a present obligation

(legal or constructive) as a result of a past event, if it is probable

that an outflow of resources embodying economic benefits will

be required to settle the obligation and a reliable estimate can

be made of the amount of the obligation. A best estimate is made

of the amount of the provision taking into account all identifiable

risks arising from the obligation. Provisions with a residual term

of more than twelve months are discounted. When the Group

expects some or all of a provision to be reimbursed, for example,

under an insurance contract, the reimbursement is recognised

as a separate asset, but only when the reimbursement is virtually

certain. The expense relating to a provision is presented in the

income statement, net of any reimbursement. Refer to note 21 for

more details.

Share-based payments

The Group operates equity-settled and cash-settled share-based

payment plans, under which Group companies receive services

from directors and employees as consideration for equity

instruments of the Company or one of its subsidiaries or a right to

receive a share-based cash payment.

Equity-settled share-based payments

The total amount to be expensed for services received is

determined by reference to the grant date fair value of the share-

based payment award made. For share options granted, the

grant date fair value is determined using the Black-Scholes option

valuation formula. For equity settled restricted stock units issued

as part of the 2019 Share Plan (see note 19 for explanation), the

grant date fair value is determined with reference to the observed

publicly available share price of GFG S.A. on the relevant date.

The fair value determined at the grant date is expensed on a

straight-line basis over the vesting period, based on the Group’s

estimate of the number of awards that will eventually vest, with a

corresponding credit to equity. Estimated forfeitures are revised

if the number of awards expected to vest differ from previous

estimates. Differences between the estimated and actual

forfeitures are accounted for in the period it occurs.

For awards with graded-vesting features, each instalment of

the award is treated as a separate grant. This means that each

instalment is separately expensed over the related vesting period.

Some instalments vest only upon the occurrence of a specified exit

event or 12 months after such an event and under the condition the

employee is still employed with the Company. These instalments

are expensed over the expected time to such vesting event and

recorded in employee benefit expense. Exit conditions linked with

continued service are considered non-market vesting conditions.

No expense is recognised for awards that do not ultimately vest.

When the terms of an equity-settled award are modified, the

minimum expense recognised is the expense that would have

resulted had the terms not been modified, given the original terms

of the awards are met. An additional expense is recognised for any

modification that increases the total fair value of the share-based

payment transaction, or is otherwise beneficial to the employee

as measured at the date of modification. Expenses for awards that

are cancelled are accelerated. Replacement awards that are not

designated as such are accounted for as new grant.

Cash-settled share-based payments

The fair value of the amount payable to employees with respect to

cash-settled share-based payments are recognised as an expense

over the vesting period. The fair value is measured initially and at

each reporting date until the settlement date, with changes in fair

value recognised in employee benefits expense. The fair value is

determined using the Black-Scholes model, or revalued using the

latest publicly available share price of GFG S.A. for cash settled

units issued as part of the 2018 Employee share option plan. The

approach used to account for vesting conditions when measuring

equity-settled transactions also applies to the cash-settled awards.

Please refer to note 19 for further details.

Convertible Bond

The Group has identified separate debt and equity components to

the convertible bond compound instrument. As a financial liability,

the debt component is initially valued based on the present value

of future cash flows, net of directly attributable transaction costs.

The financial liability is subsequently measured at amortised cost

using the EIR method.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The equity component is recognised as the difference between

gross proceeds from the convertible bond issuance and the fair

value of the debt component and any bifurcated derivatives.

Upon repurchase of Convertible bonds by the Group, the carrying

amount of the equity component is reduced and reclassified from

Convertible bond equity component to Other reserves.

The Group also identified several embedded derivates within the

Convertible bonds. These financial assets are initially measured

at fair value with subsequent changes in fair value recognised in

profit or loss as “finance gain” or “finance loss”. Please refer to note

22 for further details.

Revenue recognition

The Group generates revenues mainly from the sale of fashion

and lifestyle products online through its retail websites. Revenue is

recognised at a point in time when control of the asset is transferred

to the customer, i.e. on delivery of the goods or services.

The Group entities generally offer customers a possibility to return

any unused goods within a specified period of time (usually 30 days)

and receive a full refund in form of cash or store credit. In such cases

revenue is recognized only to the extent that is highly probable

that a significant reversal will not occur when the uncertainty

associated with the right of return is subsequently resolved. The

remaining consideration is recognised as a refund liability. The

Group determines the amount of revenue and the amount of

refund liability using the expected value method, representing

the sum of probability weighted outcomes. A corresponding right

of return asset (and corresponding adjustment to cost of sales) is

also recognised for the right to recover products from a customer.

The Group evaluates whether it is principal or agent with respect

to its performance obligations. When the Group is primarily

obligated in a transaction, is subject to inventory risk, has latitude

in establishing prices and selecting suppliers, the Group acts as

principal and records revenue at the gross sales price. The Group

records the net amounts as commissions earned if it is not primarily

obligated and do not have latitude in establishing prices namely

in its marketplace business (note 24). Such amounts earned are

determined using a fixed percentage of the transaction value, a

fixed-payment schedule, or a combination of the two.

Coupons and loyalty points, except as those explained below, and

discounts are deducted from the transaction price.

If as a part of sale transactions, the Group issues coupons or loyalty

points to the customers which can either be used as an incremental

discount to other available discounts in future transactions or that

provide a customer loyalty status are accounted for as a material

right representing an additional performance obligation. The

consideration received is allocated based on the relative stand-

alone selling prices between the sold goods and the additional

performance obligation.

The stand-alone selling price of the material right is estimated

reflecting:

a) the discount that the customer would be entitled to,

adjusted for any discount that the customer could receive

without using the loyalty programme (i.e. any discount

available to any other customer) and

b) the likelihood that the customer will use the loyalty points.

The amount allocated to the loyalty points is recognized as

revenue when the customer uses the material right or when they

expire.

Refund liabilities

Refund liabilities are estimated on the basis of historical returns

and are recorded so as to allocate them to the same period in

which the original revenue is recorded. These liabilities are

reviewed regularly and updated to reflect management’s latest

best estimates, although actual returns could vary from these

estimates.

Right of return assets

The Group estimates the expected returns of goods, based on

historical return rates and reduces revenue by the full amount of

sales that it estimates will be returned.

The Group also presents expected returns on a gross basis in the

statement of financial position. In this context, a right to recover

possession of goods from expected returns is recognized in other

non-financial assets. The amount of the asset corresponds to the

cost of the goods delivered for which a return is expected, taking

into account the costs incurred for processing the return and the

losses resulting from disposing of these goods.

Contract Assets

A contract asset is initially recognised for revenue earned by

the Group during the accounting year but not received in that

same accounting period. The Group’s Contract assets represent

Receivables from accrued income.

Contract Liabilities

A contract liability is recognised if a payment is received or a

payment is due (whichever is earlier) from a customer before the

Group delivers the related goods or services. Contract liabilities

are recognised as revenue when the Group performs under

the contract (i.e., delivers the related goods or services to the

customer). The Group’s Contract liabilities represent advance

payments for orders received but not shipped, liabilities from store

credit balances and unredeemed customer loyalty points.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Cost of sales

Cost of sales consists of the purchase price of consumer products,

inbound shipping charges and certain personnel expenses. The

inbound shipping charges to receive products from the suppliers

of the Group are included in inventory, and recognised as cost of

sales upon sale of products to the Group’s customers. The cost

of merchandise sold to the customers is calculated using the

weighted average cost method or the first-in-first-out method.

Selling and distribution expenses

Selling and distribution expenses include fulfilment and marketing

costs.

Fulfilment costs represent costs incurred in operating and staffing

the Group’s fulfilment and customer service centres, including

costs attributable to receiving, inspecting, and warehousing

inventories; picking, packaging, and preparing customer orders for

shipment, including packaging materials; payment processing and

related transaction costs. Fulfilment costs also include outbound

shipping costs, content and e-production costs, and amounts paid

to third parties that assist the Group in fulfilment and customer

service operations.

Marketing costs consist primarily of targeted online advertising,

television advertising, public relations expenditures, and payroll

and related expenses for personnel engaged in marketing,

business development, and selling activities.

Administrative expenses

Administrative expenses include technology and other

administrative expenses.

Technology and content expenses consist principally of

technology infrastructure expenses and payroll and related

expenses for employees involved in application, product, and

platform development, category expansion, editorial content,

buying, merchandising selection, systems support, and digital

initiatives, as well as costs associated with the computer, storage,

and telecommunications infrastructure used internally.

Employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses and

non-monetary benefits (such as health services) are accrued in

the period in which the associated services are rendered by the

employees of the Group. Employees are eligible for discount

coupons provided to them on a monthly basis. The cost of

these coupons is included in employee benefits and subject to

social security and tax contributions. The Company recognises

a liability and an expense for bonus plans to employees and

key management personnel based on a formula and Group

performance targets when contractually obliged.

Income taxes

Income taxes have been provided for in the consolidated financial

statements in accordance with legislation enacted or substantively

enacted by the end of the reporting period. The income tax charge

comprises current tax and deferred tax and is recognised in profit

or loss for the year, except if it is recognised in other comprehensive

income or directly in equity because it relates to transactions that

are also recognised, in the same or a different period, in other

comprehensive income or directly in equity.

Current tax is the amount expected to be paid to, or recovered

from, the taxation authorities in respect of taxable profits or losses

for the current and prior periods. Taxable profits or losses are

based on estimates if financial statements are authorised prior to

filing relevant tax returns. Taxes other than on income are recorded

within operating expenses.

Management periodically evaluates positions taken in the

tax returns with respect to situations in which applicable tax

regulations are subject to interpretation and establishes provisions

where appropriate.

Deferred tax

Deferred taxes are recognised on temporary differences arising

between the tax bases of assets and liabilities and their carrying

amounts in the consolidated financial statements. However,

deferred tax liabilities are not recognised if they arise from the

initial recognition of goodwill. Deferred taxes are not accounted

for if they arise from the initial recognition of an asset or liability in a

transaction other than leases or business combinations that at the

time of the transaction affects neither accounting nor taxable profit

or loss. Deferred taxes are determined using tax rates (and laws)

that have been enacted or substantively enacted by the reporting

date and are expected to apply when the related deferred income

tax asset is realised or the deferred income tax liability is settled.

Deferred tax liabilities are recognised on taxable temporary

differences arising from investments in subsidiaries, associates

and joint arrangements, except for deferred income tax liability,

where the timing of the reversal of the temporary difference is

controlled by the Group and it is probable that the temporary

difference will not reverse in the foreseeable future. Generally, the

Group is unable to control the reversal of the temporary difference

for associates.

Deferred tax assets are recognised on deductible temporary

differences and tax loss carry forwards arising from investments

in subsidiaries, associates and joint arrangements only to the

extent that it is probable the temporary difference will reverse in

the future and there is sufficient taxable profit available against

which the temporary difference can be utilised.

Deferred tax assets and liabilities are offset when there is a legally

enforceable right to offset current tax assets against current tax

liabilities. The deferred tax assets and liabilities must relate to

income taxes levied by the same taxation authority on either the

same taxable entity or different taxable entities, where there is an

intention to settle the balances on a net basis. Please see note 30.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

4. CRITICAL ACCOUNTING

ESTIMATES AND

JUDGEMENTS IN APPLYING

ACCOUNTING POLICIES

Management makes estimates and assumptions that affect

the amounts recognised in the financial statements and the

carrying amounts of assets and liabilities within the next Financial

Year. Estimates and judgements are continually evaluated and

are based on management’s experience and other factors,

including expectations of future events that are believed to be

reasonable under the circumstances. Other disclosures to the

Group’s exposure to risk and uncertainties are included in the

Capital Management and Financial Risk Management sections.

Judgements that have the most significant effect on the amounts

recognised in the financial statements and estimates that can

cause a significant adjustment to the carrying amount of assets

and liabilities within the next Financial Year include:

Estimating variable consideration for returns

The Group estimates variable considerations to be included in the

transaction price for the sale of goods with rights of return. The

Group determines the amount of revenue using the expected value

method. The expected value method is the sum of probability

weighted outcomes in a range of possible consideration amounts.

Historical purchasing patterns and the refund entitlements of

customers are used in estimating the expected consideration

amounts.

The Group updates its assessment of expected returns regularly

and the refund liabilities are adjusted accordingly. Estimates

of expected returns are sensitive to changes in circumstances

and the Group’s past experience regarding returns may not be

representative of the customer’s actual returns in the future.

Determination of the net realisable

value of inventories

The cost of inventories may not be recoverable if those inventories

are damaged, if they have become wholly or partially obsolete, or

if their selling prices have declined.

The provision for obsolete inventories reflects management’s

estimate of losses expected by the Group, calculated on the basis

of experience as well as past and anticipated market performance.

Estimates are based on information available as of the reporting

date and management judgement about the expected sales

volumes and margins after the reporting date. The expectation of

volumes of loss-making sales and losses to be incurred is based on

historical data adjusted for the results of management’s analysis of

retail industry developments and expected changes in customers’

behaviour. Customer behaviour is analysed on a seasonal and

geographical basis.

Each reporting date, management makes an assessment of slow

moving inventory/non-moving inventory and makes adequate

provision for such unsold inventory and makes adequate

impairments for such unsold inventory reflecting the decline of

the net realisable value.

Inventory balance is categorised depending on the season to

which it relates to. The inventory valuation allowance reflects

management’s estimate of losses expected to be incurred by

the Group as a result of sales of stock belonging to the particular

season and sell-through rate.

Net realisable value is calculated as estimated selling price less the

estimated costs necessary to make the sale. However, the extensive

usage of discounts and frequent changes in prices with respect to

market conditions makes estimation of selling prices on an item

by item basis impracticable. Assessment of net realisable value

is carried out on a product line level and all inventory balances

are categorised as follows: footwear, clothes and accessories. For

further information we refer to note 15.

Taxes

Uncertainties exist with respect to the interpretation of complex

tax regulations, changes in tax laws, and the amount and timing

of future taxable income. Deferred tax assets are recognised for

unused tax losses to the extent that it is probable that taxable

profit will be available against which the losses can be utilised.

Significant management judgement is required to determine the

amount of deferred tax assets that can be recognised, based upon

the likely timing and the level of future taxable profits together with

future tax planning strategies.

Statutory tax and customs legislation, which was enacted or

substantively enacted at the end of the reporting period, is subject

to varying interpretations when being applied to the transactions

and activities of the Group. Consequently, tax positions taken

by management and the formal documentation supporting the

tax positions may be challenged by tax authorities. For further

information, we refer to note 30.

The Group operates in certain countries where the tax systems,

regulations and enforcement processes have varying stages of

development creating uncertainty regarding application of tax law

and interpretation of tax treatments. The Group is also subject to

regular tax audits in the countries where it operates. When there

is uncertainty over whether the taxation authority will accept a

specific tax treatment under the local tax law, that tax treatment

is therefore uncertain. The resolution of tax positions taken by

the Group, through negotiations with relevant tax authorities or

through litigation, can take several years to complete and, in some

cases, it is difficult to predict the ultimate outcome. Therefore,

judgment is required to determine provisions for taxes.

In assessing whether and how an uncertain tax treatment affects

the determination of taxable profit (tax loss), tax bases, unused tax

losses, unused tax credits and tax rates, the Group assumes that a

taxation authority with the right to examine amounts reported to it

will examine those amounts and have full knowledge of all relevant

information when making those examinations.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The Group has a process in place to identify its uncertain tax

positions. Management then considers whether or not it is

probable that a taxation authority will accept an uncertain tax

treatment. On that basis, the identified risks are split into three

categories (i) remote risks (risk of outflow of tax payments are 0%

to 20%), (ii) possible risks (risk of outflow of tax payments are 21%

to 49%) and probable risks (risk of outflow is more than 50%). The

process is repeated regularly by the Group.

If the Group concludes that it is probable or certain that the taxation

authority will accept the tax treatment, the risks are categorized

either as possible or remote, and it determines the taxable profit

(tax loss), tax bases, unused tax losses, unused tax credits or tax

rates consistently with the tax treatment used or planned to be

used in its income tax filings. The risks considered as possible are

not provisioned but disclosed as tax contingencies in the Group

consolidated financial statements while remote risks are neither

provisioned nor disclosed.

If the Group concludes that it is probable that the taxation authority

will not accept the Group’s interpretation of the uncertain tax

treatment, the risks are categorized as probable, and it reflects

the effect of uncertainty in determining the related taxable profit

(tax loss), tax bases, unused tax losses, unused tax credits or tax

rates by generally using the most likely amount method – the single

most likely amount in a range of possible outcomes.

If an uncertain tax treatment affects both deferred tax and current

tax, the Group makes consistent estimates and judgments for

both. For example, an uncertain tax treatment may affect both

taxable profits used to determine the current tax and tax bases

used to determine deferred tax.

If facts and circumstances change, the Group reassesses the

judgments and estimates regarding the uncertain tax position

taken. Please refer to note 31 for our analysis of uncertain tax

positions.

Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in

the lease, therefore, it uses its incremental borrowing rate (“IBR”)

to measure lease liabilities. The IBR is the rate of interest that the

Group would have to pay to borrow over a similar term, and with a

similar security, the funds necessary to obtain an asset of a similar

value to the right-of-use asset in a similar economic environment.

The IBR therefore reflects what the Group ‘would have to pay’,

which requires estimation when no observable rates are available.

The primary inputs into the IBR calculations are available base rates

such as local government bond yields. Company-specific spreads

are overlaid to the base rates, as well as corporate spreads and

security adjustments as needed.

Critical judgements in determining

the lease term

In determining the lease term, management considers all facts and

circumstances that create an economic incentive to exercise an

extension option, or not exercise a termination option. Extension

options (or periods after termination options) are only included in

the lease term if the lease is reasonably certain to be extended (or

not terminated).

For leases of warehouses, the following factors are normally the

most relevant:

• If there are significant penalties to terminate

(or not extend), the Group is typically reasonably

certain to extend (or not terminate)

• If any leasehold improvements are expected to have

a significant remaining value, the Group is typically

reasonably certain to extend (or not terminate)

• Otherwise, the Group considers other factors including

historical lease durations and the costs and business

disruption required to replace the lease assets.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash

generating unit (“CGU”) exceeds its recoverable amount, which

is the higher of its fair value less costs of disposal and its value

in use. The fair value less costs of disposal calculation is based

on available data from binding sales transactions, conducted

at arm’s length, for similar assets or observable market prices

less incremental costs of disposing of the asset. The value in

use calculation is based on a DCF model and the cash flows

projections cover a detailed three-year forecast. The recoverable

amount is sensitive to the discount rate used for the DCF model

as well as the expected future cash-inflows and the PGR used for

extrapolation purposes. These selected inputs are consistent

with industry and macroeconomic forecasts in the regions where

the group of CGUs operate. These estimates are most relevant

to goodwill recognised by the Group. The key assumptions used

to determine the recoverable amount for the different groups of

CGUs, including a sensitivity analysis, are disclosed and further

explained in note 13.

Fair value determination of share-based

payment plans

Estimating the fair value for share-based payment transactions

generally requires determination of the most appropriate valuation

model, which depends on the terms and conditions of the grant.

For share options, this estimate also requires determination of

the most appropriate inputs to the valuation model including the

expected life of the share option, volatility and risk-free rate. The

Group initially measures the cost of cash-settled transactions with

employees using the Black-Scholes model in order to determine

the fair value of the liability incurred. For cash-settled share-based

payment transactions, the liability needs to be remeasured at the

end of each reporting period up to the date of settlement, with

any changes in fair value recognised in profit or loss. This requires

a reassessment of the estimates used at the end of each reporting

period. For the measurement of the fair value of equity-settled

transactions with employees, the Group uses the Black-Scholes

model to value options by reference to observable market inputs

on the grant date. The options are then not remeasured at the end

of each reporting period.

Since GFG became listed the share price input in those models are

derived from the Company’s quoted share price at the reporting

date. Measurement is thus subject to the market driven volatility of

the share price. Other inputs may not be directly observable and

therefore still need to be estimated.

The assumptions and models used for estimating the fair value for

share-based payment transactions are disclosed in note 19.

Climate change

The Group has performed a qualitative assessment of climate

change risks and in line with the stated 2030 sustainability targets,

has identified both physical and transitional climate change

risks affecting its business. Further information on these risks is

disclosed in section 2.4.2 Risks and Opportunities report in our

Annual Report.

Based on the assessment performed, climate change is expected

to have minimal impact on the Group’s operations in the short and

medium term (i.e. 2030) and expected to become more notable

in long term. Although, the financial impact of these risks and

opportunities has not yet been fully quantified, it was not expected

to have a material impact on the carrying amounts of assets and

liabilities in the current year financial statements.

Specifically, management considered if climate change impacts

shall be factored into account in its future cash flow projections

used in the goodwill impairment assessment and concluded that

climate change is not expected to have material impact on the

short-term to medium term cash flows.

Management will continue to assess the financial effects of these

risks in the future.

The impact of climate change risks was also considered on the

following items:

Income taxes

There are currently no known environmental taxes that are

expected to have a significant financial impact. The Group will

continue to monitor its forecasted future taxable profits, and how

they are likely to be impacted by climate-related developments, in

addition to following any climate-related changes to tax legislation

across the regions that could significantly impact income taxes.

Property, Plant and Equipment (“PPE”),

intangible assets and Goodwill

The Group has considered the physical risks to our business over

the short, medium and long term posed by climate change and

has deemed that no impairment is required. Management will

continue to review these effects as possible impairment triggers.

Other matters

The Group does not currently foresee material financial impacts

to the value of inventories, the measurement and recognition of

financial instruments, or the fair value measurement of financial

assets as a result of climate change. Management will continue to

assess the impact of climate changes on the balance sheet going

forward.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

5. CHANGES IN MATERIAL

ACCO

UNTING POLICIES

The accounting policies applied in these consolidated financial

statements are the same as those applied in the Group’s

consolidated financial statements as at and for the year ended

31 December 2022, with the exception of the following.

The following standards, amendments and interpretations were

eective 1 January 2023 but do not have a significant eect on

the results or financial position of the Group:

Standard Effective date EffectsIFRS 17: Insurance Contracts 1 January 2023 No eectAmendments to IAS 1 regarding the disclosure of accounting policies 1 January 2023 No significant eect Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2023 No eect Amendments to IAS 12 Deferred tax related to Assets and Liabilities arising 1 January 2023 No significant eect1from a Single Transaction Amendments to IAS 12 Income taxes: international tax reform – Pillar two model rules 1 January 2023 No significant eect (note 30)

This did not have an impact on the consolidated financial statements since the Group was already recognising deferred tax on its leases in all

jurisdictions.

The following standards and interpretations which are not yet eective are not expected to have a material eect on the results or

financial position of the Group:

Standard Effective date EffectsAmendments to IAS 1 regarding the current or non-current classification of liabilities 1 January 2024 No significant eect expected (not currently endorsed by the EU).Amendments to IFRS 16 – lease liability in a sale and leases back 1 January 2024 No eect expectedAmendments to IAS 21 The Eects of Changes in Foreign Exchange Rates: Lack of 1 January 2024 No eect expectedexchangeabilityAmendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: 1 January 2024 No eect expectedDisclosures: Supplier Finance Arrangements

The Group plans to adopt new standards once eective.

6. SEGMENT INFORMATION

Operating segments are components that engage in business

activities that may earn revenues or incur expenses, whose

operating results are regularly reviewed by the chief operating

decision maker (“CODM”) and for which discrete financial

information is available. Transfer prices between operating

segments are on an arm’s-length basis.

The segments are as follows:

– Latin America (“LATAM”) including Brazil, Colombia

andChile;

– South East Asia (“SEA”) including Malaysia, Indonesia,

Singapore, Philippines, Taiwan and Hong Kong; and

– Australia and New Zealand (“ANZ”).

Intercompany consolidation adjustments are included in the

‘reconciliation’ column, in order to arrive at the GFG consolidated

financial statements. The column ‘Other’ includes headquarters

and other business activities.

Group segments generate external revenue from fashion and

lifestyle ecommerce products. Products are not disaggregated

in CODM reporting.

Please refer to note 29 which contains details of the Argentina

business disposal, which was categorised as a discontinued

operation during the year and is no longer presented as part of

segment reporting.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Reportable segment information for the year ended 31 December 2023 is set out below:

Total Fashion Reconci- 1SEA ANZBusiness Otherliation 2In €m LATAM TotalRevenues from external customers 250.5 209.5 378.0 838.0 – – 838.0Intersegment Revenue – 2.9 – 2.9 41.5 (44.4) –Total Revenue 250.5 212.4 378.0 840.9 41.5 (44.4) 838.0Cost of sales (145.9) (124.2) (214.8) (484.9) (0.2) – (485.1)Gross profit 104.6 88.2 163.2 356.0 41.3 (44.4) 352.9Operating (expenses) / incomeSelling and distribution expenses (94.4) (66.2) (128.9) (289.5) – 1.2 (288.3)Administrative expenses (54.2) (39.7) (52.4) (146.3) (30.2) (7.3) (183.8)Other (expenses) / income (60.4) 1.2 (6.2) (65.4) (35.5) 41.6 (59.3)EBIT (104.4) (16.5) (24.3) (145.2) (24.4) (8.9) (178.5)Depreciation and Amortisation 16.7 11.7 14.0 42.4 6.2 8.9 57.53EBITDA (87.7) (4.8) (10.3) (102.8) (18.2) – (121.0)Recurring items (see below) 2.1Non-recurring items (see below) 60.64Adjusted EBITDA (27.4) (1.4) (2.9) (31.7) (26.6) – (58.3)Reconciliation to loss before tax:Finance income 15.9Finance costs (21.7)Share-based payment expense (1.7)Depreciation and amortisation (57.5)Gain on repurchase of Convertible bonds 18.3Group recharges (0.4)Change in estimate of prior year tax provision (1.0)Impairment of goodwill and other assets (54.7)One o payroll and oce closure costs (4.9)Loss before tax from continuing operations(166.0)Recurring itemsShare-based payment expense (0.7) 1.3 0.5 1.1 0.6 – 1.7Group recharges 2.8 2.5 5.2 10.5 (10.1) – 0.4Non-recurring itemsChange in estimate of prior year tax provision 3.5 (2.4) 0.1 1.2 (0.2) – 1.0One o payroll and oce closure costs 2.0 – 1.6 3.6 1.3 – 4.9Impairment of Goodwill and other assets 52.7 2.0 54.7 54.7

Results for LATAM exclude Argentina, which was categorised as a discontinued operation during the year.

The reconciliation column includes consolidation adjustments, including intercompany eliminations and amortisation of purchase price allocation assets.

EBITDA is calculated as loss before interest and tax adjusted for depreciation of property, plant and equipment and right-of-use assets, amortisation of

intangible assets and impairment losses.

Adjusted EBITDA is EBITDA adjusted for share-based payment expenses, impairment of goodwill and other non-financial assets, Group recharges, changes

to estimates for prior year tax, one o payroll and oce closure costs.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Reportable segment information for the year ended 31 December 2022 is set out below:

Total Fashion Reconci- 1SEA ANZBusiness Otherliation 2In €m LATAM TotalRevenues from external customers 316.4 278.1 474.7 1,069.2 – – 1,069.2Intersegment Revenue – 1.5 – 1.5 42.6 (44.1) –Total Revenue 316.4 279.6 474.7 1,070.7 42.6 (44.1) 1,069.2Cost of sales (182.6) (170.9) (262.9) (616.4) (0.2) 0.1 (616.5)Gross profit 133.8 108.7 211.8 454.3 42.4 (44.0) 452.7Operating (expenses) / incomeSelling and distribution expenses (116.1) (81.0) (157.6) (354.7) (0.1) 1.4 (353.4)Administrative expenses (56.1) (40.3) (56.2) (152.6) (36.2) (10.2) (199.0)Other (expenses) / income (47.4) 1.8 (4.8) (50.4) (35.3) 41.9 (43.8)EBIT (85.8) (10.8) (6.8) (103.4) (29.2) (10.9) (143.5)Depreciation and Amortisation 16.9 10.5 11.5 38.9 3.4 10.9 53.23EBITDA (68.9) (0.3) 4.7 (64.5) (25.8) – (90.3)Recurring items (see below) 7.8Non-Recurring items (see below) 40.24Adjusted EBITDA (21.7) 2.1 11.3 (8.3) (34.0) – (42.3)Reconciliation to loss before tax:Finance income 8.4Finance costs (41.3)Share-based payment expense (7.7)Depreciation and amortisation (53.2)Gain on repurchase of convertible bond 9.3Group Recharges and associated taxes (0.1)One off consulting income 0.7Change in estimate of prior year tax provision 1.5One off payroll and office closure costs (1.2)Impairment of Goodwill (41.2)Loss before tax from continuing operations (167.1)Recurring itemsShare-based payment expense 2.1 1.9 1.5 5.5 2.2 – 7.7Group recharges 2.9 2.2 5.1 10.2 (10.1) – 0.1Non-recurring itemsOne off consulting income – – – – (0.7) – (0.7)Change in estimate of prior year tax provision 0.1 (1.7) – (1.6) 0.1 – (1.5)One off payroll and office closure costs 0.9 – – 0.9 0.3 – 1.2Impairment of Goodwill 41.2 – – 41.2 – – 41.2

Results for LATAM exclude Argentina, which was categorised as a discontinued operation in 2023

The reconciliation column includes consolidation adjustments, including intercompany eliminations and amortisation of purchase price allocation assets.

EBITDA is calculated as loss before interest and tax adjusted for depreciation of property, plant and equipment and right-of-use assets, amortisation of

intangible assets and impairment losses.

Adjusted EBITDA is EBITDA adjusted for share-based payment expenses, impairment of goodwill and other non-financial assets, Group recharges, changes

to estimates for prior year tax, one off payroll and office closure costs, and one off consulting income.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Information about geographical areas

Revenues from external customers by region are determined

based on the location of the selling business.

Revenues from external customers include €182.5 million (2022:

€230.8 million) in Brazil and €378.0 million (2022: €474.7 million)

in Australia.

During 2023 and 2022 no revenues from external customers

were generated in Luxembourg, the domicile of Global Fashion

Group S.A.

Non-current assets include €61.0 million (2022: €66.9 million) in

Brazil and €125.1 million (2022: €137.3 million) in Australia.

Non-current assets (excluding other financial assets and income

tax receivables) for each region for which it is material are

reported separately as follows:

In €m 2023 2022LATAM 65.5 129.0ANZ 125.1 137.3SEA 42.4 49.6Other 11.4 13.6Total 244.4 329.5

No significant non-current assets are located in Luxembourg,

the domicile of GFG S.A. No analysis of the assets and liabilities

of each operating segment is provided to the Chief Operating

Decision Maker in the monthly management accounts.

7. GROUP INFORMATION

The consolidated financial statements include the assets, liabilities

and financial results of the Company and its subsidiaries. The

table below presents the list of the Company’s subsidiaries.

1Ownership Registered 31 December 31 December Principal activityoffice20232022Investment Bigfoot GmbH, Berlin, GermanyHolding Berlin 100% 100%Juwel 198 VV UG (haftungsbeschränkt), Berlin, Germany Trustee berlin 0% 100%Jade 1076. GmbH, Berlin, Germany General Partner Berlin 100% 100%Bambino 49. VV UG (haftungsbeschränkt), Berlin, Germany Trustee Berlin 100% 100%Global Fashion Group SGP Services PTE Limited, Singapore, Consultancy SingaporeServices Singapore 100% 100%GFG eCommerce Technologies GmbH, Berlin, Germany IT Services Berlin 100% 100%GFG Deutschland Holdings GmbH (formally Jabong GmbH), Berlin, Germany Holding Berlin 96.96% 96.96%Global Fashion Group UK Finance Limited, London, UK Finance Holding London 100% 100%Consultancy Global Fashion Group UK Services Limited, London, UKServices London 100% 100%2GFG Luxembourg One S.à r.l, Luxembourg Finance Holding Senningerberg 0% 100%Dafiti Latam GmbH and Co. Beteiligungs KG, Berlin, Germany Holding Berlin 99.14% 99.14%VRB GmbH and Co. B-126 (Einhundertsechsundzwanzig) KG, Berlin, Germany Holding Berlin 95.91% 95.91%BFOOT S.R.L. (Arg), Buenos Aires, Argentina Online Retail Buenos Aires 95.77% 95.77%VRB GmbH and Co. B-127 (Einhundertsiebenundzwanzig) KG, Berlin,Germany Holding Berlin 95.84% 95.84%Bigfoot Chile SpA, Santiago, Chile Online Retail Santiago 95.31% 95.31%VRB GmbH and Co. B-128 (Einhundertachtundzwanzig) KG, Berlin,Germany Holding Berlin 96.79% 96.79%Bigfoot Colombia SAS, Bogota, Colombia Online Retail Bogota 96.79% 96.79%GFG Comercio Digital Ltda (formerly Comercio Digital BF Ltda), Sao Paulo, Brazil Online Retail Sao Paulo 99.13% 99.13%2Blanko 20 KG. GmbH and Co. KG, Berlin, Germany Online retail Berlin 0% 100%3Fashion Delivered LLC, Ukraine, Kiev Call centre Kiev 0% 100%Juwel 145 V V UG (haftungsbeschränkt), Berlin, Germany Trustee Berlin 100% 100%Zalora Group GmbH, Berlin, Germany Holding Berlin 100% 100%VRB GmbH and Co. B-136. KG, Berlin, Germany Holding Berlin 97.86% 97.86%

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

1Ownership Registered 31 December 31 December Principal activityoffice20232022Brillant 1257 GmbH and Co. Verwaltungs KG, Berlin, Germany Holding Berlin 90.99% 90.99%Brillant 1257. GmbH and Co. Zweite Verwaltungs KG, Berlin, Germany Holding Berlin 91.77% 91.77%Brillant Vietnam Co., Ltd, Ho Chi Minh City, Vietnam Holding Ho Chi Minh City 91.77% 91.77%Consultancy R-SC Vietnam Co., Ltd., Ho Chi Minh City, VietnamServices Ho Chi Minh City 91.77% 91.77%Brillant 1257. GmbH and Co. Dritte Verwaltungs KG, Berlin, Germany Holding Berlin 94.49% 94.49%PT Fashion Eservices, Jakarta, Indonesia Online Retail Jakarta 94.48% 94.48%PT Fashion Marketplace, Jakarta, Indonesia Online Retail Jakarta 94.40% 94.40%Brillant 1257. GmbH and Co. Vierte Verwaltungs KG, Berlin, Germany Holding Berlin 91.73% 91.73%BF Jade E-Services Philippines Inc., 4Makati City, Philippines Online Retail Makati City 46.77% 46.77%Brillant 1257. GmbH and Co. Fünfte Verwaltungs KG, Berlin, Germany Holding Berlin 92.92% 92.92%Jade E-Services Malaysia Sdn Bhd, Kuala Lumpur, Malaysia Online Retail Kuala Lumpur 92.92% 92.92%Brillant 1257. GmbH and Co. Sechste Verwaltungs KG, Berlin, Germany Holding Berlin 94.77% 94.77%Jade E-Services Singapore Pte Ltd, Singapore, Singapore Online Retail Singapore 94.77% 94.77%Zalora South East Asia Pte Ltd, Singapore, Singapore Online Retail Singapore 94.77% 94.77%RPL Fashion Trading Gungzhou Co., Ltd (China), Guangzhou, China Online Retail Guangzhou 94.77% 94.77%Zalora Hong Kong Ltd, Hong Kong, China Online Retail Hong Kong 100% 100%ZSEA Technology Services Company Limited, Consultancy Ho Chi Minh City, VietnamServices Ho Chi Minh City 94.77% 94.77%VRB GmbH and Co. B-129. KG, Berlin, Germany Holding Berlin 93.70% 93.70%Internet Services Australia 1 Pty Ltd, Sydney, Australia Online Retail Sydney 93.70% 93.70%GFG UK 1 Limited, London, UK Holding London 100% 100%GFG Deutschland 1 GmbH, Berlin, Germany Holding Berlin 100% 100%Global Fashion Group TRM Limited, London, UK Holding London 100% 100%Jade 1411. GmbH (Komplementär), Berlin, Germany General Partner Berlin 100% 100%Tricae Comercio Varejista Ltda, Sao Paulo, Brazil Online Retail Sao Paulo 99.91% 99.91%Jade 1159. GmbH, Berlin, Germany Holding Berlin 0% 100%Jade 1410. GmbH (Komplementär), Berlin, Germany General Partner Berlin 100% 100%Juwel 196. VV UG (haftungsbeschränkt), Berlin, Germany Trustee Berlin 100% 100%Kanui Comercio Varejista Ltda, Sao Paulo, Brazil Online Retail Sao Paulo 99.91% 99.91%Zalora eFulfillment Services Sdn Bhd Kuala Lumpur, Malaysia Holding Malaysia 64.95% 64.95%E-Kilau Sdn Bhd Kuala Lumpur, Malaysia Holding Malaysia 1.84% 1.84%5 GFG Denmark, filial af Global Fashion Group S.A., LuxembourgBranch Denmark 100% 100%Zalora Taiwan Co. Ltd, Taiwan Online Retail Taiwan 94.77% –Management GFG ME Management Services - FZCO, DubaiServices Dubai 100% 100%

Ownership percentage excluding shareholdings by Trustee companies.

Entity eliminated from Group as at 31 December 2023.

Entity was sold during the year ending 31 December 2023.

For the years ended 31 December 2023 and 2022, the non-controlling interest element of BF Jade E-Services Philippines Inc., was the most significant

element of the comprehensive loss for the year attributable to non-controlling interests. Entity is under the control of the group by virtue of indirect control

through a wholly owned trustee subsidiary for which the % ownership in this table does not take into account.

Entity is a branch not a legal subsidiary.

At 31 December 2022 and 2023 the proportion of the voting rights

in the subsidiary undertakings held directly by the parent company

do not differ from the proportion of ordinary shares held.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

8. BALANCES AND

TRANS

ACTIONS WITH

RELATED PARTIES

Parties are generally considered to be related if the parties are

under common control or if one party has the ability to control/

jointly control the other party or can exercise significant inﬂuence

over the other party in making financial and operational

decisions. Apart from the subsidiaries and associates included

in the consolidated financial statements, the Group maintains

relationships to other related parties as disclosed below.

Kinnevik Group is a related party to the Group as they have the

ability to exercise significant inﬂuence as shareholders of the

Group as well as their subsidiaries and joint ventures.

No transactions have been entered into with related parties

during the twelve months ended 31 December 2023 and 2022

respectively.

Key management personnel

The aggregate compensation to key management personnel,

being the Management Board and Supervisory Board of the

Group (executive and non-executive and including the Co-Chief

Executive Officers and Chief Financial Officer) plus the members

of the executive committee of the Group, was as follows:

For the year ended 31 DecIn €m 2023 2022Short-term employee benefits 2.0 2.0Share-based payments charge 1.0 2.3 Total 3.0 4.3

Further details of directors’ remuneration can be found in the

remuneration report in section 1.3.5, along with directors’

interest in issued shares and share options.

9. AUDITORS’ REMUNERATION

Included in administrative expenses is the independent auditor’s

remuneration, including in expenses for audit and non-audit

services, payable to the Company’s auditor Ernst and Young S.A.

and its affiliated companies as follows:

For the year ended 31 DecIn €m 2023 2022Audit and audit-related services:Audit of the parent Company and consolidated financial statements 1.1 1.1Audit of the Company’s subsidiaries 1.3 1.1Total fees 2.4 2.2

10. LOSS PER SHARE

Basic EPS is calculated by dividing the loss for the year

attributable to ordinary equity holders of the parent by the

weighted average number of common shares outstanding

during the year.

The following table reflects the income and share data used in

the basic and diluted EPS calculations:

For the year ended 31 DecIn €m 2023 2022Loss attributable to ordinary equity holders of the parent for basic earnings:Continuing operations (176.8) (174.5)Discontinued operations (1.6) (21.8)Loss attributable to ordinary equity holders of the parent for basic earnings: (178.4) (196.3)Weighted average number of ordinary shares for basic and 1diluted EPS (m) 223.0 220.0Basic and diluted EPS from continuing operations (€) (0.8) (0.8)Basic and diluted EPS from discontinued operations (€)0.0 (0.1)Total Basic and diluted EPS (€) (0.8) (0.9)

The weighted average number of shares takes into account the

weighted average effect of any changes in treasury shares during the

year.

Please see note 18 for details on equity transactions.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

For diluted loss per share, the weighted average number of

common shares is equal to the number used in the basic EPS

calculation, since potential voting rights are not dilutive due to

the loss-making position of the Group during the current and

prior year.

The Group has up to 29,761,905 common shares under the

authorised share capital reserved for the conditional issuance of

shares under the convertible bond that could potentially dilute

basic earnings per share in the future, but were not included in

the calculation of diluted earnings per share because they are

antidilutive for the periods presented.

11. PROPERTY, PLANT AND EQUIPMENT

Office / Leasehold Warehouse / Assets in the course In €m IT Equipment ImprovementsMotor Vehiclesof construction TotalCostAt 1 January 2022 30.9 21.2 105.5 16.2 173.8Additions 2.0 2.2 17.4 5.8 27.4Disposals (1.4) (2.7) (1.5) (9.4) (15.0)Reclassifications 1.4 2.2 2.3 (5.9) –Disposal of business (note 29) (3.4) (18.7) (54.6) (7.8) (84.5)Currency translation differences 2.4 2.3 7.5 5.1 17.3At 31 December 2022 31.9 6.5 76.6 4.0 119.0Additions 0.9 1.8 1.1 0.2 4.0Disposals (1.4) (1.0) (0.3) – (2.7)Reclassifications 0.3 (0.6) 2.2 (1.9) – Currency translation diference (3.0) (0.2) 2.3 (0.2) (1.1)At 31 December 2023 28.7 6.5 81.9 2.1 119.2Depreciation and impairmentAt 1 January 2022 (20.9) (8.4) (44.3) – (73.6)Depreciation charge for the year (4.9) (1.7) (13.6) – (20.2)Disposals 0.5 2.4 1.3 – 4.2Reclassifications 0.3 (1.1) 0.8 – –Currency translation diference (0.3) (2.0) (4.0) – (6.3)Disposal of business (note 29) – 13.0 29.0 – 42.0At 31 December 2022 (25.3) 2.2 (30.8) – (53.9)Depreciation charge for the year (2.4) (1.8) (6.5) – (10.7)Disposals 1.1 1.2 0.2 – 2.5Currency translation dierences 1.9 0.2 (0.8) – 1.3Impairment loss (note 13) (0.1) (0.2) (0.7) – (1.0)At 31 December 2023 (24.8) 1.6 (38.6) – (61.8)Net book valueAt 31 December 2023 3.9 8.1 43.3 2.1 57.4At 31 December 2022 6.6 8.7 45.8 4.0 65.1

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

12. LEASES

This note provides information for leases where the Group is a

lessee. There are no material instances where the Group is a

lessor.

(i) Amounts recognised in the statement

of financial position

The statement of financial position shows the following amounts

relating to leases:

For the year ended 31 DecIn €m 2023 2022Right-of-use assets Property 18.2 21.7Warehouse 33.0 43.8Oce equipment and other 0.3 0.551.5 66.0Lease LiabilitiesCurrent 18.1 17.9Non-current 43.6 56.161.7 74.0

Please refer to note 4 for critical judgements related to leases.

Additions to right-of-use assets during the year were € 6.0 million

(2022: € 66.1 million).

(ii) Amounts recognised in the statement of profit or loss

The statement of profit or loss shows the following amounts

relating to leases:

For the year ended 31 DecIn €m 2023 2022Depreciation charge of right of use assets Property 3.8 4.3Warehouse 11.8 9.5Oce equipment and other 0.2 0.215.8 14.0Interest expense (included in finance costs) 5.0 5.35.0 5.3

As a result of the impairment review performed during the year, an

impairment charge was recognised on Right of Use Assets of

€1.2 million (2022: nil) in the LATAM and SEA group of CGUs.

The total cash outﬂow for leases in 2023, including interest and

payments, was €20.5 million (2022: €44.5 million).

(iii) The Group’s leasing activities and how these

are accounted for

The Group leases various offices, warehouses, equipment and

vehicles. Rental contracts are typically made for fixed periods,

but may have extension options as described below.

Lease terms are negotiated on an individual basis and contain

a wide range of different terms and conditions. The lease

agreements do not impose any covenants other than the security

interests in the leased assets that are held by the lessor. Lease

assets may not be used as security for borrowing purposes.

Please refer to note 3 for detailed accounting policies.

(iv) Variable lease payments

Various leases across the Group contain variable lease payment

terms that are linked to an index or a rate, specific to the

country that the lease is in. Variable lease payments are initially

recognised as part of the lease liability using the index or

rate as at the date of commencement and the lease liability is

subsequently remeasured to reflect the revised lease payments

when there is a change in the cash flows.

(v) Residual value guarantees

To optimise lease costs during the contract period, the Group

sometimes provides residual value guarantees in relation to

property and equipment leases. As at 31 December 2023, there

were no balances excluded from lease liabilities, which were not

expected to be payable (2022: nil).

(vi) Extension and termination options

Extension and termination options are included in a number of

property and equipment leases across the Group. These are

used to maximise operational flexibility in terms of managing the

assets used in the Group’s operations. The majority of extension

and termination options held are exercisable only by the Group

and not by the respective lessor.

As at 31 December 2023, there were no potential future cash

outflows that were excluded from the lease liability because it

was not reasonably certain that the leases would be extended

(or not terminated) (2022: nil).

(vii) Lease not yet commenced to which

the lessee is committed

As at 31 December 2023 and 2022, the Group was not committed

to any leases, which had not yet commenced.

Please refer to note 32 for maturity analysis of lease liabilities.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

13. GOODWILL AND OTHER

INTANGIBLE ASSETS

Internally developed intangible Total assets / Software / other Website Licenses / Customer intangible In €m GoodwillcostsRights TrademarkRelationships OtherassetsCostAt 1 January 2022 702.3 67.8 37.6 370.6 142.2 0.9 619.1Additions – 33.0 11.3 – – – 44.3Reclassifications – (0.7) 0.7 – – – –Disposals – (0.9) – – – – (0.9)Disposal of business (407.1) (25.8) (16.8) (201.3) (88.0) – (331.9)Currency translation dierences 58.3 5.2 3.1 30.0 13.5 0.1 52.0At 31 December 2022 353.5 78.6 35.9 199.3 67.8 1.0 382.6Additions – 21.2 4.7 0.4 – – 26.3Reclassifications – 0.5 (0.3) (0.2) – 0.1 0.0 Impairment 0.1 (0.4) – – – – (0.4)Disposals – (1.7) (2.9) – – – (4.6)Currency translation dierences (3.6) (1.8) 2.4 (0.5) (1.2) – (1.0)At 31 December 2023 350.0 96.5 39.8 199.0 66.6 1.0 402.9

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Internally developed intangible Total assets / Software / other Website Licenses / Customer intangible In €m GoodwillcostsRights TrademarkRelationships OtherassetsDepreciation and impairmentAt 1 January 2022 (574.8) (28.5) (29.5) (319.8) (113.7) (0.9) (492.4)Amortisation charge for the year – (19.7) (6.8) (6.5) (4.4) – (37.4)Impairment loss (41.2) – – – – – –Reclassification – 1.1 (1.1) – – – –Disposals – 0.2 – – – – 0.2Currency translation dierences (48.3) 0.9 (3.0) (28.8) (10.7) (0.1) (41.8)Disposal of business 406.5 4.1 13.4 201.1 70.0 – 288.6At 31 December 2022 (257.8) (41.9) (27.0) (154.0) (58.8) (1.0) (282.7)Amortisation charge for the year – (16.6) (5.8) (6.3) (2.6) – (31.3)Impairment loss (40.2) (0.5) (0.1) (9.0) (2.7) – (12.3)Gain/Loss on disposal of intangible asset – 1.9 – – – 1.9Currency translation dierences 4.1 0.8 (1.3) 0.2 1.2 – 0.9At 31 December 2023 (293.9) (58.2) (32.3) (169.1) (62.9) (1.0) (323.5)Net book amountAt 31 December 2023 56.1 38.3 7.5 29.9 3.7 – 79.4At 31 December 2022 95.7 36.7 8.9 45.3 9.0 0.0. 99.9

See note 26 for breakdown of amortisation expenses between

cost of sales and general administration.

As of 31 December 2023 and 2022, there were no intangible assets

in which title was restricted.

During the year ended 31 December 2023, an indicator of

impairment of intangible assets was identified by management in

respect of the consolidation of the websites, apps and marketing

functions of acquired businesses Kanui and Tricae into the Dafiti

platform that took place in August 2023. Prior to this date, business

functions with the exception of the websites, apps and marketing

were already centralised under Dafiti. With the merging of these

functions, management cannot reliably measure the value of

Brand and Customer Relationships that were acquired on purchase

of Kanui and Tricae and the decision was taken to impair these

assets to a carrying value of nil. The total amount of impairment

in respect of Brand and Customer Relationships in Kanui and

Tricae was €11.1 million. The impairment charge is presented as a

separate line item in the Consolidated statement of profit or loss.

Impairment testing of groups of CGUs containing

goodwill and other non-financial asets

The Group performed the impairment test for its group of CGUs

as at 31 December 2023 and for the year ended 31 December 2022.

For the year ended 31 December 2023, the group recorded

impairment charges of €41.6 million (2022: €41.2 million) in respect

of the Group’s investments in LATAM and €2.0 million (2022: nil

million) in respect of the Group’s investments in SEA. For the

purposes of impairment testing, goodwill was allocated to the

Group’s group of regional CGUs. A CGU is the smallest identifiable

group of assets that generate cash inflows that are largely

independent of the cash inflows from other assets or groups.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The amount of goodwill allocated to each group of CGUs after the

impairment testing was as follows

In €m 31 Dec 2023 31 Dec 2022LATAM – 38.1SEA –ANZ 56.1 56.1Total 56.1 95.7

Impairment approach for the year ended 31 December 2023

As part of the 2023 annual impairment assessment of Goodwill,

management have assessed internal and external indicators of

impairment, covering analyst commentary, internal budget

comparisons, macroeconomic and industry analysis.

The recoverable amounts of each group of CGUs were based on

value-in-use, estimated using a DCF model. The model uses cash

ﬂow projections covering a detailed three-year forecast, followed

by an extrapolation of expected cash ﬂows over an additional two

years using annual growth rates as determined by management.

The terminal value of the group of CGUs is calculated using the

terminal year cash ﬂow which is capitalised into perpetuity using

estimated growth, perpetuity growth and discount rates. These

selected growth rates are consistent with industry and macro-

economic forecasts in the regions where the group of CGUs

operate. The present value of the expected cash ﬂows of each

group of CGU is determined by applying a discount rate that is

commensurate with the risks and uncertainty inherent in the group

of CGUs forecasts.

LATAM group of CGUs

The recoverable amount of the LATAM group of CGUs of €(1.5)

million as at 31 December 2023 has been determined based on a

value in use of each cash-generating unit calculated using the

business plan and net cash position of the CGU. The projected

cash ﬂows reﬂect the impact of the macroeconomic and market

challenges in the LATAM regions, including GDP, rising

unemployment and household debt. As a result of this analysis,

management has recognised an impairment charge of €41.6 million

in the current year against goodwill and other assets as at

31 December 2023. The carrying value of the goodwill after the

recognition of the impairment was €nil as at 31 December 2023.

The allocation of impairment beyond goodwill to other assets was

as follows: €0.2 million to other intangible assets, €0.8 million to

Property, Plant and Equipment and €0.4 million to Right of Use

Assets. The impairment charge is presented as a separate line item

in the Consolidated statement of profit or loss. During the year

ended 31 December 2022, management recognised an

impairment charge in respect of the LATAM group of CGUs of

€41.2 million, allocated against goodwill.

SEA group of CGUs

The recoverable amount of the SEA group of CGUs of €6.5 million

as at 31 December 2023 has been determined based on a value in

use of each cash-generating unit calculated using the business

plan and net cash position of the CGU. The projected cash ﬂows

reﬂect the impact of the macroeconomic and market challenges

in the SEA region, including escalated cost of living pressures and

decreases in consumer expenditure as customers went back to

shopping oine post COVID. As a result of this analysis,

management has recognised an impairment charge of €2.0 million

in the current year against goodwill and other assets as at

31 December 2023. The allocation of impairment beyond goodwill

to other assets was as follows: €1.0 million to other intangible

assets, €0.2 million to Property, Plant and Equipment and

€0.8 million to Right of Use Asset s. The impairment charge is

presented as a separate line item in the Consolidated statement

of profit or loss. During the year ended 31 December 2022,

management recognised an impairment charge in respect of the

SEA group of CGUs of €nil.

Key assumptions used in the estimation of the discount rates by

CGU included specific risk premiums to account for inﬂation and

the Group’s size.

The discount rates and growth rates used in deriving the CGUs

recoverable amounts for the year ended 31 December 2023 were

as follows:

Discount Rate Perpetual Growth CGU (%)Rate(%)LATAM (excluding Arg) 19.5% 3.7%SEA 17.3% 4.0%ANZ 17.6% 2.6%GFG Group-level test 18.1% 3.0%

The discount rates and growth rates used in deriving the group

of CGUs recoverable amounts for the year ended

31 December 2022 were as follows:

Discount Rate Perpetual Growth CGU (%)Rate (%)LATAM (Including Arg) 22.7% 3.6%SEA 16.9% 4.0%ANZ 15.6% 2.6%GFG Group-level test 19.1% 3.0%

The key assumptions used in the estimation of the recoverable

amounts of all three groups of CGUs are:

• Discount rates – Discount rates represent the current market

assessment of the risks specific to each CGU, taking into

consideration the time value of money and individual risks

of the underlying assets that have not been incorporated in

the cash flow estimates. The discount rate calculation is

based on the specific circumstances of the Group and its

operating segments and is derived from its weighted

average cost of capital (“WACC”). The WACC represents a

weighted average of the cost of equity and cost of debt.

The beta factor is evaluated at each measurement period

based on publicly available market data for the each CGU

and its industry peers.

• Growth rates used to extrapolate cash flows beyond

the forecast period – Rates are based on published industry

research.

• EBITDA margin is expected to gradually increase over

the forecast period.

• Capital expenditure (capex) includes the planned

expenditure by each business unit based on their medium-

term plan. A maintenance Capex assumption is applied for

Capex outside of the unit’s medium-term plan.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Sensitivity Analysis

Sensitivity analysis has been performed for the ANZ group of

CGU. If the discount rates were 1% higher than management’s

estimates, significant headroom remains for ANZ and there would

have been no requirement for the Group to recognise any

impairment charge in 2023. Similarly, no impairment charge

would be required if the estimated growth rates were 1% lower

than management estimates or if the estimated cash flows were

5% lower than management’s estimate in each year.

14. OTHER NON-FINANCIAL

ASSETS

Other non-financial assets are as follows:

In €m 31 Dec 2023 31 Dec 2022CurrentPrepayments 8.5 11.9VAT and Tax refunds 5.2 5.7Other non-financial assets – 0.1Right to recover returned goods 6.3 6.9Other non-financial assets (current) 20.0 24.6

15. INVENTORIES

Inventories net of provision are as follows:

In €m 31 Dec 2023 31 Dec 2022Raw materials and supplies 0.7 0.7Finished goods and merchandise 122.3 185.4Less: Provisions on finished goods and merchandise (12.5) (15.9)Total inventories 110.5 170.2

During 2023 € 3.7 million (31 December 2022: €6.8 million) was

recognised as an expense write-off for inventories carried at net

realisable value. This is recognised in cost of sales.

16. TRADE RECEIVABLES AND

OTHER FINANCIAL ASSETS

Trade receivables and other financial assets are as follows:

In €m 31 Dec 2023 31 Dec 2022Non-currentReceivables from deposits / restricted cash 39.8 36.2Other financial assets (non-current) 39.8 36.2Current Trade and other receivables 39.2 38.1Less: loss allowance (note 32) (0.6) (1.0)Trade and other receivables (current) 38.6 37.1Other financial assetsInvestments in investment funds at fair value through profit or loss 161.1 226.5Receivables from deposits/restricted cash 10.3 13.0Receivables from loans 0.3 0.4Receivables from employees 0.2 0.1Contract Assets 4.2 5.7Other financial receivables 4.5 4.3Less: loss allowance (0.3) (0.3)Other financial assets (current) 180.3 249.7

Non-current and current receivables from deposits/restricted cash

include guarantees to banks, suppliers and leasing partners.

During the year, the Group redeemed €75.0 million (2022: acquired

€5.0 million) of investment in investment funds accounted for as

Financial assets at fair value through profit or loss in accordance

with IFRS 9. Fair values of these funds are determined by the market

value at reporting date obtained and valuation techniques from the

fund administrators level 1 and level 3 of the fair value measurement

hierarchy as disclosed in note 3 (2022: classified as level 1 and

level 3). These funds are mainly short term duration bonds with

volatility and a high credit score and have been acquired to reduce

the Group’s exposure to interest rates and manage counterparty

exposure. There was a fair value gain of €0.3 million, increasing the

level 3 investment fund from €10.0 million at 31 December 2022

to €10.3 million at 31 December 2023. There were no acquisitions

or redemptions of this fund during the year. Funds were held with

Morgan Stanley, HSBC and Santander as at 31 December 2023

and 31 December 2022.

Note 3 explains the principles of recognition for impairment losses

on financial assets.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The additions to the provision for impaired receivables have

been included in net impairment losses of financial assets in the

statement of profit or loss. Amounts charged to the allowance

account are generally written off against the trade receivables,

when there is no expectation of recovery.

Further details about the Group’s impairment policies and the

calculation of the loss allowance are provided in note 32.

17. CASH AND CASH

UIVALENTS

As at As at In €m 31 Dec 202331 Dec 2022Short term deposits 1.0 1.0 Cash at bank 224.9 322.5 Cash and cash equivalents 225.9 323.5

For short-term deposits and cash at bank the Group applies a

general approach in calculating ECLs. However, the Group does

not track changes in credit risk, but instead recognises a loss

allowance based on lifetime ECLs at each reporting date as, given

their maturity, the 12-month and lifetime ECLs are the same. No

loss allowance was recognised as of 31 December 2023 (2022: nil).

18. EQUITY

Common share capital

As at 31 December 2023, the issued share capital was

223,792.912 common shares (2022: 220,292,912), with a nominal

value of €0.01 per share. Each common share entitles the holder

to one vote at Global Fashion Group’s Annual General Meeting.

The nominal value of all common shares is fully paid.

The table below details the share capital movements during the

current and prior year:

Nominal amount Number common in €m (par value Share Capital Share premium of shares0.01)(€m)(€m)At 1 January 2022 217,292,912 0.01 2.1 303.6Common Share Capital issued 3,000,000 0.01 0.1 –Balance as at 31 December 2022 220,292,912 0.01 2.2 303.6Common Share Capital issued 3,500,000 0.01 – –Balance as at 31 December 2023 223,792,912 0.01 2.2 303.6

During the year, 3,500,000 (2022: 3,000,000) common shares

were used to facilitate the units being exercised under the share-

based payment plans. Please see note 19 for more details.

Treasury shares

The total number of common shares in treasury was 278,773 as

at 31 December 2023 (2022: 278,773).

Authorised Capital

In the context of the Share Plan in note 19, the Board approved

the future issuance of shares under the terms of the plan.

The tables below summarise the authorised common share

capital:

Share capital

2023 2022No. Par Value €m No. Par Value €mAuthorisedCommon shares 439,435,251 0.01 4.4 439,435,251 0.01 4.4IssuedCommon shares 223,792,912 0.01 2.2 220,292,912 0.01 2.2

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Capital reserves

There were no changes to capital reserves in the current or prior

year. The reserve represents the cumulative impact of

acquisitions of the Group prior to initial public offering (IPO).

Share-based payment reserves

Other reserves relate to IFRS 2 reserves and amounted to

€ 157.9 million as at 31 December 2023 (2022: € 155.1 million). The

share-based payment reserve is used to recognise the value of

equity settled share-based payments provided to directors and

employees (note 19).

Convertible bond equity component

On 15 March 2021, the Group issued Convertible Bonds for net

proceeds of € 369.1 million. The equity component was valued at

€48.6 million being the residual between the net proceeds and

value of the debt component at initial recognition (note 22).

On 27 April 2022, the Group repurchased Convertible bonds,

which were due to be redeemed on 15 March 2028. The Group

purchased Bonds representing €95.1 million in aggregate

principal amount (approximately 25 % of the original principal

amount). Following the repurchase, the carrying amount of equity

component was €36.3 million (31 December 2021: €48.6 million)

as €12.3 million was reclassified from Convertible bond equity

component to Other reserves.

On 25 August 2023 the Group repurchased bonds that were due

to be redeeed on 15 March 2028. The Group repurchased bonds

representing €74.6 million in aggregate principal amounts

(approximately 27% of the principal amount as at the end of

December 2022). Following the repurchase the carrying amount

of the equity component was €26.6 million (31 December 2022:

€36.3 million) as €9.7 million was reclassified from convertible

bond equitycomponent to Other reserves.

On 31 August 2023 the Group repurchased bonds that were due

to be redeeed on 15 March 2028. The Group repurchased bonds

representing €27.0 million in aggregate principal amounts

(approximately 10% of the principal amount as at the end of

December 2022). Following the repurchase the carrying amount

of the equity component was €23.1 million (31 December 2022:

€36.3 million) as €3.5 million was reclassified from convertible

bond equity component to Other reserves.

Non-controlling interest

As of 31 December 2023 and 2022 non-controlling interests

mainly consisted of management participations. No capital

contributions from a third-party shareholder were received during

2023 (2022: nil).

19. SHARE-BASED

PAYMENTS

As at 31 December 2023, the Group’s share-based payment

arrangements are composed of:

a) Long-term Incentive Plan (previously referred to as 2019 share

plan);

b) 2018 employee share option plan (ESOP 2018);

The total share-based payment expense of €1.7 million (2022:

€ 7.7 million) is comprised of share-based payments and social

charges of:

– €2.2 million (2022: €7.8 million) relating to the long-term

Incentive Plan;

– €(0.5) million (2022: €(0.1) million) relating to the 2018

employee share option plan;

The share-based payment expense reduced by €6.0 million since

31 December 2022 due to forfeited awards during the year.

(a) Long-term incentive plan

Under this plan, the participants have been granted two different

types of awards, Restricted Stock Units (RSU) and Performance

Stock Units (PSU). All units represent a share in Global Fashion

Group S.A (‘GFG shares’). The units do not have an exercise price.

All units vest over two to three years and PSUs are additionally

subject to non-market performance conditions that the Company

has set for each year. Other PSU tranches are subject to rolling

performance goals covering more than one year. Units that vested

in April 2020 were subject to a lock up period of 1 year from the

date of the IPO, being 2 July 2019. On 3 July 2020, the lock-up

period ended and participants were entitled to exercise all vested

shares. Certain senior level executives are subject to a holding

period of maximum 4 years after their units are granted. There is

no dividend entitlement on all stock units during the vesting

period.

Upon vesting, and subject to any holding period, legal ownership

of GFG shares is transferred to the participants except where cash

settlement is required by local regulations. The settlement amount

in cash will be equal to the market price of GFG Shares on the

vesting date or, if applicable, the date when the holding period

expires. Furthermore, the plan rules foresee various discretions for

the Board as well as good and bad leaver provisions.

Under the terms of the Share Plan the Group has a choice to settle

either in shares of the Group or in cash. It is the intention of GFG

to settle in shares therefore these awards are classified as equity

settled. The initial grant date for the Share Plan was 30

September 2019.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Expenses in relation to RSU tranches will be recognised based on

a graded-vesting approach from the initial grant date until the

respective vesting date of each tranche in case of equity-settled

awards or settlement date in case of cash-settled awards. In

contrast, the expense recognition period of PSUs will be from the

beginning of each year to which performance targets relate, as

performance targets are set only at the beginning of each year. In

addition, the expense in relation to PSUs will be recognised based

on the estimated (most likely) number of the awards to reflect

expected achievement of the performance targets at each

reporting date until the number of the awards is fixed.

All awards are subject to applicable employer social charges

based on rates that vary by geographic location and by

participants’ individual tax status. The Group recognises a social

charge liability on the portion of awards that have been expensed

at period end reflecting the amount which the Group would be

liable to pay.

Number Number Stock unit awards of Sharesof Shares2023 2022Outstanding at the beginning ofthe year 9,257,520 5,931,316Granted during the period 6,383,524 6,811,357Forfeited during the period (2,913,672) (1,654,755)Exercised during the period (2,856,065) (1,830,398)Outstanding as at 31 December 9,871,307 9,257,520Total Awards vested and therefore exer cisable as at 31 December 1,201,918 1,484,027

Forfeited shares represent units that an employee is no longer

entitled to when they leave employment, as the shares are

unvested at the leaving date. All vested units were ‘in-the-money’

as at 31 December 2023.

The weighted average share price for units exercised in the year

was €0.66 (2022: €1.80).

The fair value of the awards granted is equal to the GFG share

price quoted on the Frankfurt stock exchange. The weighted

average fair value of the units granted during the year was

€0.79 (2022: €1.61). The number of awards due to vest in 2024

is 3,223,695.

As at 31 December 2023, liabilities arising from applicable

employer social charges of €1.9 million (2022: €2.5 million) were

included within other financial liabilities (current).

(b) 2018 Employee share option plan

Awards issued under the 2018 Employee share option plan

originally consisted of different types of awards depending on the

Group’s regional businesses that the awards related to.

Where the Company is required to settle in cash or the employee

has a choice to settle in cash, the awards were classified as cash-

settled. Equity-settled awards are those where the Company has a

choice to settle and intends to settle in its own equity instruments.

The fair values for all options have been valued using the Black-

Scholes model for option pricing, taking into account the terms

and conditions on which the share options were granted.

Each award contains portions that vest immediately. Other portions

vest based on service conditions or additional performance

conditions. Awards vest either by the end of 2018 or quarterly

covering a maximum period of 4 years until the end of 2022. In

addition, the terms provide for a right of the Group to claw back

the awards in case of defined acts to the detriment of the Group.

The share options generally have a life of up to 10 years.

The terms of the plan require the use of a graded-vesting approach

to expense recognition in accounting for the various tranches of

each award resulting.

All awards are subject to applicable employer social charges based

on rates that vary by geographic location and by each relevant

participants’ individual tax status. The Group has accounted for

this by recognising a social charge liability on the portion of awards

that have been expensed at period end and which the Group

would be liable to pay upon exercise.

The share-based payments expense in any given period therefore

represents the value of all vested awards (remeasured at the

latest applicable value for cash-settled instruments), the value of

the graded portion of each award due to vest in the future and

recognised in current accounting periods, and the applicable

social charges attached to those awards.

The balance of the number of converted options outstanding and

their related weighted average exercise prices are as follows for

the year ended 31 December 2023:

Weighted Average Number of Share option awards Exercise PriceOptions2023 2023Outstanding at the beginning ofthe year 8.86 6,249,171Exercised during the year 0.99 (12,567)Expired during the year 10.43 (2,165,961)Outstanding at 31 December 8.09 4,070,643Total Awards vested as at 31 December 8.09 4,070,643In-the-money awards vested as at 31 December 0.18 170,132

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The balance of the number of converted options outstanding

and their related weighted average exercise prices are as follows

for the year ended 31 December 2022:

Weighted Average Number of Share option awards Exercise PriceOptions2022 2022Total Awards vested as at 31 December 8.86 6,249,171In-the-money awards vested as at 31 December 1.06 219,215

The weighted average fair value of options granted during the

year was € nil (2022: € nil).

The weighted average remaining contractual life for the share

options oustanding as at 31 December 2023 was 2.54 years.

The liabilities in relation to the 2018 Employee share option plan

is showns on the below table:

In €m 2023 2022Expense arising from cash-settled share-based payment transactions (0.1) (0.1)Liability arising from cash-settled portion of share-based payments 0.4 0.5Liability arising from applicable employer social charges 0.4 0.9

Liabilities are included within Trade payables and other financial

liabilities and were classified as non-current as they are expected

to be settled at least one year from the reporting date. The

intrinsic value of the liability is close to the carrying amount.

20. BORROWINGS

The table below summarises the borrowing facilities of the

Group as at 31 December 2023:

Drawn as at Drawn as at Total facility31 December 202331December 2022Financing Renewal Counterpary Date Term LCY € LCY € €BPI Jun-24 1 year 300 million €4.9 million 300 million €4.9 million €5.1 millionHSBC Jul-24 1 year €10 million €10 million €6.3 million €6.3 million €7.1 millionHSBC Mar-24 1 year $7 million €6.3 million $0.7 million €0.7 million €2.8 millionSantander Feb-23 1 year $395 million €0.4 million – – €2.0 millionTotal Borrowings (current) €11.9 million €17.0 millionThe tables below summarises the changes in the Group’s borrowings arising from financing: New In €m 1 January 2023 Repayments FX movementborrowings CIS Disposal 31 December 2023 Interest bearing bank borrowings (current) 17.0 (48.5) (0.6) 44.0 – 11.9 New 1 January 2022 Repayments FX movementborrowings CIS Disposal31 December 2022 Interest bearing bank borrowings (current) 35.4 (52.6) (5.3) 39.6 (0.1) 17.0

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

In addition, the Group had the following bi-lateral facilities in place

for the issuance of bank guarantees:

• Trade guarantee facility with Citibank of $15 million, of

which $5 million is subject to specific terms covering

restricted cash held and pricing. Effective on 25 June 2023

the facility was renewed to expire in 12 months. Under the

terms of this facility restricted cash held against the first

$10 million of this facility represents 50% of the value of

guarantees issued and against the remaining $5 million of

this facility represents 100% of the value guarantees issued,

and for both portions of this facility plus 10% FX cover for

issuances in EUR/USD currency. This is included within

Other Financial Assets (non-current). As at

31 December 2023, the Group had utilised $6.2 million

(€5.6 million) of this facility (31 December 2022:

€9.3 million).

• Trade guarantee facility with HSBC of €15 million

(31 December 2022: €20 million). Effective on 17 July 2022,

the Group renewed the guarantee facility for a further

12months. As at 31 December 2023, the Group had

utilised€9.6 million (31 December 2022: €19.4 million) of

the guarantee facility.

21. PROVISIONS

Movements in provisions for liabilities and charges are as follows:

Litigation In €m Tax risksrisks Other TotalCarrying AmountCarrying amount as at 1 January 2022 23.5 0.9 2.2 26.6Additions – – 0.1 0.1Used (2.9) – – (2.9)Net movement on disposal of subsidiaries (0.3) – (0.1) (0.4)Currency translation dierences (0.5) 0.1 (0.1) (0.5)Carrying amount as at 1 January 2023 19.8 1.0 2.1 22.9Additions – – 1.6 1.6Used (3.0) – – (3.0)Currency translation dierences (0.4) (0.1) (0.3) (0.8)Carrying amount as at 31 December 2023 16.4 0.9 3.4 20.7

Provisions amounted to € 20.7 million as of 31 December 2023

(2022: € 22.9 million) where of € 4.1 million are classified as non-

current (2022: €2.6 million) mostly relating to restoration

obligations and provisions for gratuity and anniversary, and

€ 16.6 million as current (2022: € 20.3 million).

Provision for tax risks relate to provisions for VAT, import duties

(including penalties) and withholding tax. The provision mainly

represents management’s estimate of the amount payable in

connection with a tax review relating to prior purchases of

inventory and professional services invoices. Management

currently estimates that the tax outflow is more likely than not and

the provision has been classified as current. Please see note 31 for

further information.

Litigation risk. The amounts represent a provision for certain legal

claims brought against the Company by customers and

ex-employees. The provision charge is recognised in profit or loss

within administrative expenses. In the managements’ opinion,

after taking appropriate legal advice, the outcome of these legal

claims will not give rise to any significant loss beyond the amounts

provided at 31 December 2023. The provision has been classified

as current.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

22. TRADE PAYABLES

AND OTHER FINANCIA

LIABILITIES

In €m 31 Dec 2023 31 Dec 2022Non-current Convertible bonds debt component 160.3 243.8Trade and other financial liabilities (non-current) 160.3 243.8In €m 31 Dec 2023 31 Dec 2022CurrentTrade payables 169.5 181.9Other financial liabilities 6.8 6.4Other financial liabilities - Convertible bond debt component (current) 5.5 8.2Refund liabilities 12.7 12.2Trade and other financial liabilities (current) 194.5 208.7Trade and other financial liabilities 354.8 452.5

Refund liabilities, included in current other financial liabilities

reflect the Group’s obligation to refund its customers for

returned goods.

The tables below summarise the changes in the Group’s other

financial liabilities during the year:

Net-1 Jan Cash Interest Gain on 31 Dec In €m 2023flows accruedrepurchase 2023Convertible bond debt component (non-current) 243.8 (74.7) 9.5 (18.3) 160.3 Net-1 Jan Cash Interest Gain on 31 Dec In €m 2023flows accruedrepurchase 2023Other financial liabilities − Convertible bond (current) 8.2 (2.9) 0.2 - 5.5

The tables below summarise the changes in the Group’s other

financial liabilities during 2022:

1 Jan Cash Interest Gain on 31 Dec In €m 2022flows accruedrepurchase 2022Convertible bond debt component (non-current) 318.4 (74.3) 9.0 (9.3) 243.81 Jan Cash Interest Gain on 31 Dec In €m 2022flows accruedrepurchase2022Other financial liabilities - Convertible bond (current) 10.2 (4.1) 2.1 - 8.2

As at 31 December 2023, current other financial liabilities included

€5.5 million and non-current other financial liabilities included

€160.3 million related to the debt component of Convertible

Bonds.

On 15 March 2021, the Group issued Convertible bonds for gross

proceeds of €375.0 million, with transaction costs of €5.9 million

and with a fixed coupon rate of 1.25%.

On 27 April 2022, the Group repurchased Convertible bonds,

which were due to be redeemed on 15 March 2028. The Group

purchased Bonds representing €95.1 million in aggregate principal

amount (approximately 25 % of the original principal amount).

The purchase price per €100,000 nominal amount was €78,000,

resulting in a cash outflow of €74.3 million. This resulted in a gain

recognised in the consolidated statement or profit or loss of

€9.3 million.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

On 25 August 2023, the Group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €74.6 million in aggregate principal amounts

(approximately 27% of the principal amount as at the end of

December 2022).

On 31 August 2023, the Group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €27.0 million in aggregate principal amounts

(approximately 10% of the principal amount as at the end of

December 2022).

The purchase price per €100,000 nominal amount was €73,000,

resulting in a cash outflow of €74.7 million. This resulted in a gain

recognised in the consolidated statement of profit or loss for the

period ended 31 December 2023 of €18.3 million.

The original terms of the bonds which remain unchanged for the

remaining outstanding units, are unless previously converted,

redeemed or repurchased and cancelled, the Convertible bonds

will be redeemed at their principal amount on 15 March 2028.

The bondholders also have the right to convert the Convertible

bonds into new and / or existing (at the discretion of the Company)

no-par value common shares in the dematerialised form of GFG.

The bondholders also have the right to redeem the options early,

on 15 March 2026, for the principal amount plus accrued interest.

The Group has valued the debt and equity components separately.

The liability is measured at amortised cost.

The fair value of the convertible bond as at 31 December 2023

was 74.63% (31 December 2022: 74.62%) of the nominal value,

approximately €133.1 million (31 December 2022: €208.9 million).

The fair value of Convertible bonds is classified as level 1 as the

bonds are traded in Frankfurt Stock Exchange.

The equity component was €23.1 million (31 December 2022:

€36.3 million).

There are several embedded derivatives which would result in the

options being redeemed for a variable amount of cash or variable

number of shares. These options are accounted for as at fair value

with gains/losses reflected in the income statement. However,

the valuation of these options was nil at date of issue as well as at

31 December 2022 due to there either being a low probability of

relevant contingent events occurring, or the options always being

‘out-of-the-money’ for the Group. The nature of these contingent

events includes change in control and significant rise in share price

over a 30-day period.

23. OTHER NON-FINANCIAL

LIABILITIES

In €m 31 Dec 2023 31 Dec 2022Non-CurrentOther non-financial liabilities 37.1 1.0 Other non-financial liabilities (non-current) 37.1 1.0 CurrentLiabilities from taxes 8.7 45.3 Accruals for personnel related expenses 14.9 18.4 Liabilities to employees 2.9 2.9 Liabilities from social security 1.7 1.9Contract liabilities 26.5 35.6 Other non-financial liabilities 0.1 –Withholding tax payable 0.1 0.3 Other non-financial liabilities (current) 54.9 104.4 Income tax liabilities 20.8 18.3 Total non-finanical liabilities 112.8 123.7

During the period, the liabilities from taxes consisting of VAT

obligations amounting to €36.0 million were reclassified from

current non-financial liabilities to non-current non-financial

liabilities due to changes in the legislation in Brazil, the jurisdiction

where these liabilities are due to be settled, which deferred the

settlement date to a period exceeding 12 months from

31 December 2023.

Liabilities to employees/accruals for personnel related expenses

comprise bonus obligations, accrued vacation and salaries.

Contract liabilities represents advance payments for orders

received but not shipped, liabilities from store credit balances and

unredeemed customer loyalty points. The contract liability

opening balance was recognized as revenue during the year.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

24. REVENUE

Revenues for the year are as follows:

In €m 2023 2022Sale of goods 708.5 935.0Marketplace 92.9 91.1Other 36.6 43.1Total Revenue 838.0 1,069.2

Other revenues include platform services revenue generated

from wholesale revenue and by providing ancillary advertising

and supply chain services. Breakdowns of revenues by each

segment and by geographical areas are disclosed in the tables

in note 6.

25. EMPLOYEE BENEFIT

EXPENSES

Employee benefit expenses for the year are as follows:

In €m 2023 20221Wages and salaries 160.5 193.02Social security costs 12.7 13.4Share-based payment expense 1.7 7.7Total 174.9 214.1

Wages and salaries included in Cost of sales amounts to €0.2m

(2022:€0.8m) and amounts included within Selling and Distribution

expenses €68.5m (2022: €92.3m) and Administrative expenses

were€91.8m (2022:€99.9m).

Social security contributions included in Cost of sales amounts to €nil

(2022: €0.1m) and amounts included within Selling and Distribution

expenses €4.3m (2022: €5.4m) and Administrative expenses were €8.4m

(2022: €7.8m).

Wages, salaries, paid annual leave and sick leave, bonuses, and

non-monetary benefits (such as health services) are accrued in the

year in which the employees render the associated services.

The average monthly number of employees in 2023 was:

1 2023 LATAM SEA ANZ Other TotalAverage number of employees 2,050 1,609 1,240 172 5,071

“Other” includes employees of headquarters and other business

activities.

The average monthly number of employees in 2022 was:

1 2022 LATAM SEA ANZ Other TotalAverage number of employees 2,902 1,747 1,263 189 6,101

“Other” includes employees of headquarters and other business activities

Total Selling and Distribution expenses for the year were

€288.3 million (2022: €353.4 million). Total Administrative expenses

for the year were €183.8 million (2022: €199.0 million). Employee

benefit expenses and Depreciation and Amortisation (Note 26) are

included within these balances per the consolidated statement of

profit or loss.

26. DEPRECIATION AND

AMORTISATION EXPENSES

During the Financial Year, depreciation and amortisation expenses

were categorised in expenses per function, as follows:

In €m 31 Dec 2023 31 Dec 2022Included in selling and distribution expensesDepreciation of property, plant and equipment 8.2 7.7 Depreciation of right-of-use assets 12.4 10.1 Amortisation of intangible assets 0.6 0.8 Included in general and administrative expensesDepreciation of property, plant and equipment 2.3 2.6 Depreciation of right-of-use assets 3.4 3.9 Amortisation of intangible assets 30.6 28.1 Total 57.5 53.2

27. OTHER OPERATING INCOME

AND EXPENSES

Other operating income for the year was €3.4 million (2022:

€2.3 million), which consisted of income from the disposal of

property, plant and equipment and other income.

Other operating expenses for the year are as follows:

In €m 31 Dec 2023 31 Dec 2022Other operating expensesLoss from disposal of intangibleassets 2.1 –Loss from disposal of PPE – 0.8 Write-o of receivables 0.7 0.7 Other taxes (1.1) (1.0)Other expenses 6.2 3.6 Total other operating expenses 7.9 4.1

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

28. FINANCIAL RESULT

The financial result for the year is as follows:

In €m Note 31 Dec 2023 31 Dec 2022Financial ResultInterest income 6.3 1.0Interest expenses (7.0) (12.3)Interest expense on lease liabilities 12 (5.0) (5.2)Interest expense on convertible bond 22 (9.7) (11.4)Foreign exchange (losses) / gains – 7.4Fair value changes to investment funds 9.6 (12.4)Total financial result(5.8) (32.9)

29. DISCONTINUED

OPERATIONS

Argentina

On 6 September 2023 it was announced that Global Fashion

Group would close operations in Argentina. Dafiti Argentina

experienced worsening performance since 2020 due to multiple

factors, including consistently high inflation, restrictive import

controls and the exodus of international brands and vendors. As

at 30 September 2023, Argentina ceased to be used as no further

revenue was generated from sales of inventory. In accordance with

IFR5, the entity was treated as a Discontinued Operation from this

date. The results of Argentina for the period are presented below:

For the For the period ended period ended In €m 31 Dec 202331 Dec 2022Revenue 10.7 32.9Expenses (16.2) (37.4)Operating profit (EBIT) (5.5) (4.5)Finance income 2.7 5.4Finance costs (2.1) (4.5)Loss before tax from discontinued operations (4.9) (3.6)Income taxes – –Loss for the period from discontinued operations (4.9) (3.6)

The net cash flows of BFOOT S.R.L (Arg) are as follows:

For the twelve month period endedIn €m 2023 2022Operating (2.4) (4.0)Investing (0.1) (1.0)Financing 3.2 3.1Net cash inﬂow/(outﬂow) 0.7 (1.9)

CIS

On 12 December 2022 the Group completed its sale of the

Lamoda business with operations in Russia, Kazakhstan and

Belarus (CIS) for cash consideration of €149.2 million. The

Lamoda business represented the CIS segment and formerly

included operations in Ukraine, which were not part of the

disposal group. As at 28 September 2022, the CIS segment was

classified as a disposal group held for sale and as a discontinued

operation.

2023 results for the CIS segment include net Ukraine related

costs and one off consulting income.

The result of the CIS segment for the period is presented below:

For the For the period ended period ended In €m 31 Dec 202312 Dec 2022Revenue – 794.4Operating Income / (Expenses) 3.0 (693.5)Operating profit (EBIT) 3.0 100.9Finance income 0.4 20.2Finance costs (0.1) (9.7)Income before tax from discontinued items 3.3 111.4Income taxes – (17.1)Income for the period from discontinued items from operating activities 3.3 94.3Loss on disposal of Lamoda – (112.5)Income for the period 3.3 (18.2)

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

The major classes of assets and liabilities of CIS classified as

discontinued operations as at 12 December 2022 are, as follows:

Effect of disposal on financial

position of the Group

In €m As at 12 Dec 2022AssetsProperty, Plant and Equipment 42.5Right of Use Asset 96.2Goodwill 0.6Intangible assets 43.3Other financial assets and Deferred tax assets 16.7Inventories 157.0Debtors 29.3Other non-financial assets 13.7Cash and cash equivalents 112.6Total Assets 511.9LiabilitiesLease liabilities (97.1)Non-Financial liabilities (72.3)Trade payables and other liabilities (169.7)Total Liabilities (339.1)Net assets directly associated with the disposal group 172.8Consideration received, satisfied by cash 149.2Less: Net assets directly associated with the disposal group (172.8)Less: Foreign currency translation gain recycled out of OCI (86.8)Less: Transaction costs (2.1)Loss on disposal (112.5)

The net cash flows incurred by CIS are, as follows:

For the year endedIn €m 12 December 2022Operating 130.3Investing (25.1)Financing 9.2Net cash inﬂow / (outﬂow) 114.4Earnings per share31 December 31 December In €m 20222021Basic and diluted, profit for the period from discontinued operations (€) (0.1) –

30. INCOME TAXES

Income tax benefit / (expense) is as follows:

In €m 2023 2022Current tax expense (11.7) (4.7)Thereof prior period (1.1) 0.1Deferred tax (2.2) (3.0)Income tax (expense) / benefit for the year (13.9) (7.7)

Income tax paid in 2023 amounts to €6.6 million (2022:

€ 15.2 million).

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Reconciliation between the tax expense and profit

or loss multiplied by applicable tax rate

The tax on the Company’s profit before tax differs from the

theoretical amount that would arise using the weighted average

tax rate applicable to profits of the consolidated entities as

follows:

In €m 2023 2022Profit / (loss) before tax (168.7) (170.7)Weighted average applicable tax rate (in %) 20.01% 29.4%Tax calculated at domestic tax rates applicable to profits in the respective countries 33.8 50.2Tax eect of items which are not deductible or assessable for taxation purposes:Share-based payment expenses 0.1 –Other permanent dierences 63.1 (2.5)Income which is exempt from taxation 103.3 3.3Expenses not deductible for tax purposes (87.1) (31.1)Utilisation of previous unrecognised tax losses (0.3) (1.6)Unrecognised tax loss carry forwards for the year(125.9) (27.5)Adjustments in respect of prior years (3.3) 0.8Other 2.6 0.7Income tax (expense) / benefit for the year (13.9) (7.7)

Deferred tax effects relating to each component

of other comprehensive income

In 2023 and 2022 the Group did not recognise any deferred tax

(charge) / credit relating to components of other comprehensive

income.

Tax loss carry forwards

The Company has unrecognised potential deferred tax assets in

respect of unused tax loss carry forward of approx.

€3,941.4 million (2022: 3,445.0 million). The tax loss carry

forwards expire as follows:

In €m 2023 2022Tax loss carry forward expiring by the end of:Within one year 14.6 9.9After one year but not more than five years 12.6 42.3More than five years 1,081.4 623.9Indefinite 2,832.8 2,778.9Total tax loss carry forwards 3,941.4 3,445.0

Deferred income tax assets are recognised for tax loss

carryforwards to the extent that the realisation of the related tax

benefit through future taxable profits is probable.

Tax authorities in the countries in which we operate could

challenge the Group’s tax losses significantly reducing the

availability of the tax losses in future periods.

Deferred Taxes

Differences between IFRS and statutory taxation regulations give

rise to temporary differences between the carrying amount of

assets and liabilities for financial reporting purposes and their tax

bases.

Charged / Exchange Transferred (credited) to 31 December In €m 1 January 2023differencesto Disposalsprofit or loss2023Tax effect of deductible / (taxable) temporary differences and tax loss carry forwardsDierence between tax and accounting value of:Trade name (13.8) – – 5.1 (8.7)Customer relationship (2.3) – – 1.4 (0.9)Technology (1.2) – – (0.1) (1.3)Tax loss carryforwards 11.0 (0.1) – (8.7) 2.2Other 4.1 0.1 – 0.1 4.3Net deferred tax asset / (liability) (2.2) – – (2.2) (4.4)Recognised deferred tax asset 15.1 (0.1) – (8.5) 6.5Recognised deferred tax liability (17.3) 0.1 – 6.3 (10.9)

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Charged / Exchange Transferred (credited) to 31 December In €m 1 January 2022differencesto Disposalsprofit or loss2022Tax effect of deductible / (taxable) temporary differences and tax loss carry forwardsDierence between tax and accounting value of:Trade name (15.5) (0.3) – 2.0 (13.8)Customer relationship (6.5) (0.7) 3.4 1.5 (2.3)Technology (1.1) – – (0.1) (1.2)Tax loss carryforwards 21.8 – (0.8) (10.0) 11.0Other 4.0 0.7 (4.2) (3.6) 4.1Net deferred tax asset / (liability) 2.7 (0.3) (1.6) (3.0) (2.2)Recognised deferred tax asset 25.8 0.7 (5.0) (6.4) 15.1Recognised deferred tax liability (23.1) (1.0) 3.4 3.4 (17.3)

In the context of the Group’s current structure, tax losses and

current tax assets of dierent group companies may not be oset

against current tax liabilities and taxable profits of other group

companies and, accordingly, taxes may accrue even where there

is a consolidated tax loss. Therefore, deferred tax assets and

liabilities are oset only when they relate to the same taxable

entity.

The Company controls the reversal of temporary dierences

relating to taxes chargeable on dividends from subsidiaries or on

gains upon their disposal (“outside basis dierences”). Hence, for

temporary dierences the Company had €41.7 million (2022:

€44.2 million) of unremitted earnings of subsidiaries for which no

deferred tax liabilities were recognized.

International Tax Reform – Pillar Two Model Rules – Amendments to

IAS 12:

Pillar Two legislation has been enacted or substantively enacted in

certain jurisdictions in which the Company operates, including

Luxembourg, Germany, Denmark, the United Kingdom, Malaysia

and Vietnam. The legislation will be eective for the Company’s

Financial Year beginning January 1, 2024. The rules will impose a

minimum 15% eective tax rate, based on the OECD’s Pillar Two

Model Rules, applicable in each jurisdiction in which the Company

operates. In May 2023, the IASB amended IAS 12 Income Taxes to

include a mandatory temporary exception from recognizing

deferred taxes relating to Pillar Two. The Company has applied this

mandatory exception which did not have a material impact to the

consolidated financial statements.

The assessment of the potential exposure to Pillar Two income

taxes has been made based on the most recently available financial

information. The Company expects that transitional safe harbour

relief should apply in the majority of the subsidiary jurisdictions

based on an analysis of 2023 results, while for other jurisdictions

no top-up tax exposure has been identified as a result of a high-

level assessment of the application of the Pillar Two rules. Such

calculations must however be updated in 2024 to validate the

application of the safe harbour rules for which a detailed analysis

of the local legislation implementing Pillar Two rules will be

performed.

31. CONTINGENCIES AND

COMMITMENTS

Legal proceedings

From time to time and in the normal course of business, claims

against the Company may be received. On the basis of its own

estimates, management is of the opinion that no material losses

will be incurred in respect of claims in excess of provisions that

have been made in these consolidated financial statements.

In addition, in line with standard business practice, various Group

companies have given guarantees, indemnities and warranties

in connection with disposals in recent years of subsidiaries and

associates to parties outside the Group. The Group currently

estimates that potential exposure related to such guarantees,

indemnities and warranties could be up to €10 million (2022:

€17.9 million), however, the ultimate liability for legal claims may

vary from the amounts provided and is dependent upon the

outcome of any potential litigation proceedings, investigations

and/or possible settlement negotiations and as such, the

potential liability has not been included in the consolidated

statement of financial position. There are also a number of

charges registered over the assets of Group companies in favour

of third parties in connection with the Group’s banking facilities

(note 20).

Tax contingencies

Our business is subject to the general tax environments in

the countries in which we currently operate. Changes in tax

legislation, administrative practices or case law – which might

be applied retroactively – could increase our tax burden.

Additionally, tax laws may be interpreted differently by the

competent tax authorities and courts, and their interpretations

may change at any time, which could lead to an increase of

our tax burden. In some of the countries in which we currently

operate, tax authorities may also use the tax system to advance

their agenda. Accordingly, we may face unfounded claims

in such countries. We have been audited several times by tax

officials in various jurisdictions in which we operate. We believe

that we are in compliance with applicable tax laws.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Legislators and tax authorities may change territoriality rules

or their interpretation for the application of value-added tax

(“VAT”) or similar indirect taxes on transactions, which may

lead to significant additional payments for past and future

periods. In addition, court decisions are sometimes ignored

by competent tax authorities or overruled by higher courts,

which could lead to higher legal and tax advisory costs and

create significant uncertainty. New taxes could also result in

additional costs necessary to collect the data required to assess

these taxes and to remit them to the relevant tax authorities.

Besides this, the documentation obligations under applicable

VAT and VAT-related laws are considerable. While we believe

that we are in compliance with applicable tax laws it cannot be

ruled out that tax authorities may take the position that certain

of our companies may not fully comply, or, as the case may be,

may have not fully complied with applicable tax regulations

throughout all phases of their development.

Several of the Group’s German entities rendered services in

the past to their foreign subsidiaries, to support them with

building their online businesses. The German tax authorities

are challenging the input VAT recovery of some of these entities

when costs have not yet been fully recharged to the other Group

entities to which they are providing the services. In 2018, the

German tax authorities generally agreed to the VAT position of

the Group’s German entities assuming the costs are recharged

out within a reasonable time. The Group is continuing to review

the execution of this proposal having regard to (i) any current

tax disputes with the German tax authorities that could lead to

double taxation from the recharges and (ii) commercial reasons

for not undertaking the recharges.

The nature of the Group’s business model, involving delivering

goods and services to customers in territories where the Group

may have limited physical presence, could lead to tax authorities

challenging the allocation of taxable income resulting in a higher

tax burden for the Group.

At 31 December 2023, potential tax risks, including the issues

above, estimated by the Group amount to €94.1 million (2022:

€95.0 million) including €40.5 million in relation to income

tax and €53.6 million in relation to indirect tax (2022: €41.9

and €53.1 million), of which provisions of €32.9 million (2022:

€37. 2 million) including €16.5 million in relation to income tax

and €16.4 million in relation to indirect tax have been recorded

representing the probable amount of eventual claims and

required payments related to those risks. Provisions in relation

to income tax are recorded under ‘Income tax liabilities’

while provisions in relation to indirect tax are recorded under

‘Provisions’ on the statement of financial position.

Capital commitments

As at 31 December 2023, the Group had commitments of

€10.1 million (2022: €2.9 million) primarily relating to the

development of warehouse management systems for Australia

and ongoing development of the warehouse in Brazil.

32. FINANCIAL RISK

MANAGEMENT

In the course of its ordinary business activities, Global Fashion

Group is exposed to market risk (primarily interest rate risk, foreign

currency risk), credit risk and liquidity risk. In accordance with the

Group’s financial risk management these risks are identified,

analysed and evaluated on a regular basis. It is the main objective

of the Group’s proactive risk management to decide on actions to

avoid, contain or limit the defined maximum risk exposure from

such risks. It is the Group’s management responsibility to manage

those risks. The management provides written principles for

overall risk management and reviews and agrees policies for

managing each of these risks, of which the material risks are

summarised below.

Market risk. Market risk is the risk that the fair value of future cash

flows of a financial instrument will fluctuate because of changes in

market prices. Market risks comprise interest rate risk, currency

risk, and other price risk. Market risks arise from open positions in

(a) foreign currencies, (b) interest bearing assets and liabilities, and

exposed to general and specific market movements. Management

considered that the price risk related to investment funds is

insignificant.

Interest rate risk. The interest rate risk involves the influence of

positive and negative changes in market interest rates on the

Group’s financial position and cash flows. The Group does not

have formal policies and procedures in place for management of

interest rate risks as management considers this risk as insignificant

due to the scope of debt financing operations of GFG.

Foreign currency risk. Currency risk is the risk that the fair value

of financial assets or financial liabilities held in foreign currency or

future cash flows of a financial instrument will fluctuate because of

changes in foreign exchange rates.

Due to its international business activities, the Group is exposed

to the risk of changes in foreign exchange rates in connection with

trade payables and trade receivables resulting from purchase and

sales transactions denominated in a different currency from the

functional currency of the respective operation as well as

intercompany financing. However, the Group maintains an

effective natural hedge of 94% across most of the Group’s cash

flows as the Group’s revenue streams are generated in local

currencies matched by Group’s costs mostly incurred in the

respective local currencies.

At 31 December 2023, if the EUR had strengthened/weakened by

+/- 10% against all other currencies with all other variables held

constant, the hypothetical impact on profit for the year would have

been €0.3 million (2022: €13.7 million) higher / lower, mainly as a

result of foreign exchange gains / losses on translation of trade and

other receivables, cash as well as trade and other payables and

loan liabilities denominated in EUR.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

In respect of currency risk, management sets limits on the level of

exposure by currency and in total. The positions are monitored

monthly. The Group does not use derivatives as hedging

instruments to limit its exposure from foreign currency risks.

During 2023, there were significant fluctuations in some of the

Group’s key reporting currencies, as follows:

Closing Closing FX rate FX rate Currency / €31 Dec 202331 Dec 2022 % VarianceBRL 5.4 5.6 (4.9)%AUD 1.6 1.6 2.6%

Credit risk. Credit risk is the risk that counterparty will not meet

its obligations under a financial instrument or customer contract,

leading to a financial loss. The Group takes on exposure to credit

risk, which is the risk that one party to a financial instrument will

cause a financial loss for the other party by failing to discharge

an obligation.

The Group is exposed to credit risk primarily from trade

receivables and cash and cash equivalents. In relation to cash

and cash equivalents, the Group only deals with highly rated

financial institutions and therefore the estimated credit loss is

not material.

Customer credit risk is managed by each region subject to the

Group’s established policy, procedures and control relating to

customer credit risk management. The Group structures the

levels of credit risk it undertakes by placing limits on the amount

of risk accepted in relation to counterparties or groups of

counterparties. Limits on the level of credit risk are approved

regularly by management. Such risks are monitored on a

revolving basis and are subject to an annual, or more frequent,

review. The Group’s management reviews ageing analysis of

outstanding trade receivables and follows up on past due

balances.

An impairment analysis is performed at each reporting date

based on groupings of various customer segments with similar

loss patterns. The calculation reflects the probability-weighted

outcome, the time value of money and the reasonable and

supportable information that is available at the reporting date

about past events, current conditions and forecasts of future

economic conditions. The Group evaluates the concentration of

risk with respect to trade receivables as low, as its customers are

located in several jurisdictions and operate in largely

independent markets.

At 31 December 2023, the exposure to credit risk for trade

receivables by type of counterparty was as follows:

Gross Loss In €m Carrying Amount allowance From online payment providers 22.6 (0.1)Logistics companies 2.2 –Large corporate clients 12.2 (0.4)Individual customers 1.8 (0.1)Other 0.5 (0.1)Total 39.3 (0.7)

At 31 December 2022, the exposure to credit risk for trade

receivables by type of counterparty was as follows:

Gross Loss In €m Carrying Amount allowance From online payment providers 19.7 (0.2)Logistics companies 2.9 –Large corporate clients 12.7 (0.2)Individual Customers 2.5 (0.6)Other 0.3 –Total 38.1 (1.0)

The Group uses an allowance matrix to measure the ECLs of all

types trade receivables, with the exception of the Indonesian

operation who use specific identification for loss allowance. The

expected loss rates are based on the payment profiles of sales

and the corresponding historical credit losses experienced.

The following table provides information about the exposure to

credit risk and ECLs for trade receivables as at 31 December 2023:

Gross Carrying Loss Loss In €m Amount allowancerate(%)Current (not past due) 34.0 (0.1) -0.3%1 − 30 days past due 1.7 – 0.0%31 − 60 days past due 2.2 (0.1) -4.5%61 − 90 days past due 0.7 (0.2) 0.0%More than 90 days past due 0.8 (0.3) -37.5%Total 39.3 (0.7) -1.8%

The carrying amounts best represent the maximum exposure to

credit risk.

The movement in the allowance for impairment in respect of

trade receivables during the year was as follows:

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

Movement in In €m Loss Allowance Balance as at 1 January 2023 (1.0)Net remeasurement of loss allowance (as per income statement) 0.3Balance as at 31 December 2023 (0.7)

Liquidity risk. Liquidity risk is the risk that an entity will encounter

difficulty in meeting obligations associated with financial

liabilities.

The Group manages liquidity by maintaining adequate reserves,

capital funding (for example, the issued share capital as detailed

in note 18), banking facilities, reserve borrowing facilities (see

further detail in note 20) and Convertible bonds, by continuously

monitoring forecast and actual cash flows.

The Group seeks to maintain a stable funding base primarily

consisting of shareholders´ issues of capital, then borrowing,

trade and other payables.

The table below shows liabilities at 31 December 2023 and 2022

by their remaining contractual maturity. The amounts disclosed

in the maturity table are the contractual undiscounted cash

flows. When the amount payable is not fixed, the amount

disclosed is determined by reference to the conditions existing

at the end of the reporting period. Foreign currency payments

are translated using the spot exchange rate at the end of the

respective reporting period.

The liquidity risk for the Convertible bonds is limited due to the

fixed coupon rate of 1.25%.

The maturity analysis of financial liabilities at 31 December 2023

is as follows:

Demand and In €m less than 1 year 1 to 5 years Over 5 years TotalLiabilitiesUndiscounted Borrowings 12.2 – – 12.2Trade payables and other financial liabilities 183.2 5.8 – 189.0Other financial liabilities − convertible bond 2.2 182.8 – 185.0Undiscounted Lease liabilities 17.0 38.9 8.2 64.1Total future payments, including future principal and interest payments 214.6 227.5 8.2 450.3

As at 31 December 2023, the carrying value of borrowings, trade

payables and other financial liabilities and lease liabilities, were

€11.9 million, €354.7 million and €61.7 million respectively.

The convertible bond redemption value of €160.3 million is

included within trade payables and other financial liabilities due

within 1 to 5 years.

The maturity analysis of financial liabilities at 31 December 2022

was as follows:

Demand and In €m less than 1 year Final 1 to 5 years Over 5 years Total LiabilitiesUndiscounted Borrowings 17.1 – – 17.1Trade payables and other financial liabilities 191.1 1.4 – 192.5Other financial liabilities − convertible bond 3.5 290.4 – 293.9Undiscounted Lease liabilities 18.7 56.8 10.9 86.3Total future payments, including future principal and interest payments 230.3 348.6 10.9 589.8

As at 31 December 2022, the carrying value of borrowings, trade

payables and other financial liabilities and lease liabilities, were

€17.0 million, €452.3 million and €74.0 million respectively.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

33. CAPITAL MANAGEMENT

For the purpose of the Group’s capital management, capital

includes issued capital and all other equity reserves attributable

to the equity holders of the parent. It is the primary objective of

the Group’s capital management to ensure that all the Group

entities can operate on a going concern basis and maintain a

sufficient capital structure to provide a long-term growth of the

Group’s value. The Group decides on adjustments of the capital

in light of changes in economic and trading conditions. In order to

maintain or adjust the capital structure, the Group may return

capital to shareholders, issue new shares or sell assets to reduce

debt.

In €m 31 Dec 2023 31 Dec 2022Equity attributable to equity holders of the parent 295.4 475.5 Total Assets 862.0 1,173.9 Equity Ratio (%) 34.3% 40.5%

There were no changes made to the objectives, policies or

processes during the period from incorporation up to

31 December 2023.

34. HYPERINFLATIONARY

ECONOMIES

IAS 29 Financial Reporting in Hyperinflationary Economies was

adopted during the second half of 2018 in Argentina, where the

three-year cumulative inflation rate for consumer prices and

wholesale prices reached levels of 123% and 119% respectively.

The gain/loss on the net monetary position due to Hyperinflation

for the year ended 31 December 2023 was €5.5 million (2022:

€5.5 million).

Price Index 2023 2022As at 1 January 1,203.0 605.0 Movement in the period 2,330.2 529.6 As at 31 December 3,533.2 1,134.6

35. EVENTS AFTER THE

REPORTING PERIOD

In January and February 2024, the Group redeemed €151.5 million

of investments in investment funds accounted for as Financial

assets at fair value through profit or loss. The cash proceeds were

placed in short-term cash deposits and money market funds.

There are no other events subsequent to the year-end that would

require a disclosure in the consolidated financial statements.

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

5. RESPONSIBILITY

STATEMENTS

Consolidated Financial Statements

We, Christoph Barchewitz, Chief Executive Ocer and Gunjan

Soni, Chief Operating Ocer confirm to the best of our

knowledge, the accompanying consolidated financial statements

give a true and fair view of the financial position of the Group

as at 31 December 2023, and of the results of its operations

for the year then ended in accordance with International

Financial Reporting Standards as adopted by the EU and that

the Management Report (section 2) includes a fair review of the

development and performance of the business and the position

of the Group, together with a description of the principal risks

and uncertainties that Group faces.

Parent Financial Statements

We, Christoph Barchewitz, Chief Executive Ocer and Gunjan

Soni, Chief Operating Ocer confirm to the best of our

knowledge, the accompanying parent financial statements give

a true and fair view of the financial position of the Company as

at 31 December 2023, and of the results of its operations for the

year then ended in accordance with the Luxembourg legal and

regulatory requirements and according to generally accepted

accounting principles applicable in Luxembourg, and that the

Management Report (section 2) includes a fair review of the

development and performance of the business and the position

of Global Fashion Group S.A., together with a description of the

principal risks and uncertainties that Global Fashion Group S.A.

faces.

5 March 2024

Christoph Barchewitz, CEO

Gunjan Soni, COO

ANNUAL REPORT 2023 | GFG

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | RESPONSIBILITY STATEMENT

6. INDEPENDENT AUDITOR’S REPORT

To the Shareholders of

Global Fashion Group S.A.

5, rue Heienha

L-1736 Senningerberg

Report on the audit of

the financialstatements

Opinion

We have audited the financial statements of Global Fashion

Group S.A. (“the Company” or “GFG”), which comprise the

balance sheet as at 31 December 2023, and the profit and loss

account for the year then ended, and the notes to the financial

statements, including a summary of significant accounting

policies.

In our opinion, the accompanying financial statements give a

true and fair view of the financial position of the Company as at

31 December 2023, and of the results of its operations for the

year then ended in accordance with Luxembourg legal and

regulatory requirements relating to the preparation and

presentation of the financial statements.

Basis for opinion

We conducted our audit in accordance with EU Regulation N°

537/2014, the Law of 23 July 2016 on the audit profession (the

“Law of 23 July 2016”) and with International Standards on

Auditing (“ISAs”) as adopted for Luxembourg by the “Commission

de Surveillance du Secteur Financier” (“CSSF”). Our

responsibilities under the EU Regulation Nº 537/2014, the Law

of 23 July 2016 and ISAs are further described in the

“Responsibilities of the “réviseur d’entreprises agréé” for the

audit of the financial statements” section of our report. We are

also independent of the Company in accordance with the

International Ethics Standards Board for Accountants’ Code of

Ethics for Professional Accountants (“IESBA Code”) as adopted

for Luxembourg by the CSSF together with the ethical

requirements that are relevant to our audit of the financial

statements, and have fulfilled our other ethical responsibilities

under those ethical requirements. We believe that the audit

evidence we have obtained is sucient and appropriate to

provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the financial

statements of the current period. These matters were addressed

in the context of the audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

1. Impairment of Shares in affiliated undertakings

Risk identified

Global Fashion Group S.A. (“GFG”), as ultimate holding Company

of the Group, holds a number of shares in aliated undertakings,

which are operating mainly in emerging markets in the fashion

industry. As described in Note 2 to the financial statements, the

shares in aliated undertakings are valued at cost less any durable

impairment in value. At least annually, the Company evaluates the

carrying value of the investments. Impairment losses are measured

and recorded based on the dierence between the estimated

recoverable amount and the carrying amount of the asset.

Impairment of shares in aliated undertakings is considered a key

audit matter due to historical impairment, business industry and

locations of these investments. Impairment is reversed when the

existing reasons for which the value adjustments were made have

ceased to apply.

Our answer

Our audit procedures over the impairment of the shares in

aliated undertakings included, among others:

• Obtaining and reading the latest capital call to which GFG

subscribed or the shareholders’ agreements to confirm the

acquisition cost of each investment and the movement

during the year.

• Obtaining and reading the latest financial statements of

each investment in order to identify whether any going

concern issue or liquidity issue exists at the investment level

and ultimately if the investment is recoverable.

• Assessing the valuation model prepared by Management

and its impairment test for the determination of the

recoverable amount of the investments.

• Recomputing the estimated value of equity interests of the

investments prepared by Management and comparing the

carrying value of the investments to the estimated value of

equity interests in order to determine whether an

impairment or a reversal of impairment exists.

We also assessed the adequacy of the Company’s disclosures in

respect of the accounting policies on impairment as disclosed in

Note 2 of the financial statements.

Other information

The Supervisory Board is responsible for the other information.

The other information comprises the information included in the

management report from section 2.1 to section 2.5 and the

corporate governance report in section 1.3 in the annual report

but does not include the financial statements and our report of

“réviseur d’entreprises agréé” thereon.

Our opinion on the financial statements does not cover the other

information and we do not express any form of assurance

conclusion thereon.

100

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

In connection with our audit of the financial statements, our

responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the

audit or otherwise appears to be materially misstated. If, based

on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required

to report this fact. We have nothing to report in this regard.

Responsibilities of the Supervisory Board

and of those charged with governance for the

fina

ncial statements

The Supervisory Board is responsible for the preparation and fair

presentation of the financial statements in accordance with

Luxembourg legal and regulatory requirements relating to the

preparation and presentation of the financial statements, and for

such internal control as the Supervisory Board determines is

necessary to enable the preparation of financial statements that

are free from material misstatement, whether due to fraud or error.

The Supervisory Board is also responsible for presenting the

financial statements in compliance with the requirements set out

in the Delegated Regulation 2019/815 on European Single

Electronic Format, as amended (“ESEF Regulation”).

In preparing the financial statements, the Supervisory Board is

responsible for assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless

the Supervisory Board either intends to liquidate the Company or

to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing

the Company’s financial reporting process.

Responsibilities of the “réviseur d’entreprises agréé”

for the audit of the financial statements

The objectives of our audit are to obtain reasonable assurance

about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to

issue a report of the “réviseur d’entreprises agréé” that includes

our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance

with EU Regulation N° 537/2014, the Law of 23 July 2016 and with

the ISAs as adopted for Luxembourg by the CSSF will always

detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be

expected to inﬂuence the economic decisions of users taken on

the basis of these financial statements.

As part of an audit in accordance with EU Regulation N°

537/2014, the Law of 23 July 2016 and with ISAs as adopted for

Luxembourg by the CSSF, we exercise professional judgment

and maintain professional skepticism throughout the audit. We

also:

• Identify and assess the risks of material misstatement of the

financial statements, whether due to fraud or error, design

and perform audit procedures responsive to those risks, and

obtain audit evidence that is sucient and appropriate to

provide a basis for our opinion. The risk of not detecting a

material misstatement resulting from fraud is higher than for

one resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or the

override of internal control.

• Obtain an understanding of internal control relevant to the

audit in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an

opinion on the eectiveness of the Company’s internal

control.

• Evaluate the appropriateness of accounting policies used and

the reasonableness of accounting estimates and related

disclosures made by the Supervisory Board.

• Conclude on the appropriateness of Supervisory Board’s use

of the going concern basis of accounting and, based on the

audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant

doubt on the Company’s ability to continue as a going

concern. If we conclude that a material uncertainty exists, we

are required to draw attention in our report of the “réviseur

d’entreprises agréé” to the related disclosures in the financial

statements or, if such disclosures are inadequate, to modify

our opinion. Our conclusions are based on the audit evidence

obtained up to the date of our report of the “réviseur

d’entreprises agréé”. However, future events or conditions

may cause the Company to cease to continue as a going

concern.

• Evaluate the overall presentation, structure and content of the

financial statements, including the disclosures, and whether

the financial statements represent the underlying transactions

and events in a manner that achieves fair presentation.

• Assess whether the financial statements have been prepared,

in all material respects, in compliance with the requirements

laid down in the ESEF Regulation.

We communicate with those charged with governance regarding,

among other matters, the planned scope and timing of the audit

and significant audit findings, including any significant deficiencies

in internal control that we identify during our audit.

We also provide those charged with governance with a statement

that we have complied with relevant ethical requirements

regarding independence, and communicate to them all

relationships and other matters that may reasonably be thought to

bear on our independence, and where applicable, related

safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of most

significance in the audit of the financial statements of the current

period and are therefore the key audit matters. We describe these

matters in our report unless law or regulation precludes public

disclosure about the matter.

101

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

Report on other legal and regulatory requirements

We have been appointed as “réviseur d’entreprises agréé” by the

General Meeting of the Shareholders on 14 June 2023 and the

duration of our uninterrupted engagement, including previous

renewals and reappointments, is 5 years.

The management report from section 2.1 to section 2.5 is

consistent with the financial statements and has been prepared

in accordance with applicable legal requirements.

The accompanying corporate governance statement in section

1.3 of the annual report is the responsibility of the Supervisory

Board. The information required by article 68ter paragraph (1)

letters c) and d) of the law of 19 December 2002 on the commercial

and companies register and on the accounting records and

annual accounts of undertakings, as amended, is consistent with

the financial statements and has been prepared in accordance

with applicable legal requirements.

We have checked the compliance of the financial statements of

the Company as at 31 December 2023 with relevant statutory

requirements set out in the ESEF Regulation that are applicable

to the financial statements. For the Company, it relates to:

• Financial statements prepared in valid xHTML format.

In our opinion, the financial statements of the Company as at

31 December 2023, identified as “GFG_ConsolFS_31.12.23.

xhtml”, have been prepared, in all material respects, in compliance

with the requirements laid down in the ESEF Regulation.

We confirm that the audit opinion is consistent with the additional

report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in EU

Regulation No 537/2014 were not provided and that we remained

independent of the Company in conducting the audit.

Ernst and Young

Société anonyme

Cabinet de révision agréé

Gaël Denis

Luxembourg, 5 March 2024

102

ANNUAL REPORT 2023 | GFG

INDEPENDENT AUDITOR’S REPORT

ANNUAL REPORT 2023 | GFG

PARENT FINANCIAL STATEMENTS

103

PARENT

FINANCIAL

STATEMENTS

CONTENTS

SECTION7

BALANCE SHEET 104

PROFIT AND 106

LOSS ACCOUNT

NOTES TO 107

THE FINANCIAL

STATEMENTS

ANNUAL REPORT 2023 | GFG

BALANCE SHEET

104

ANNUAL REPORT 2023 | GFG

PARENT FINANCIAL STATEMENTS

103

BALANCE SHEET

as at 31 December 2023

ASSETS

In € Note 31 Dec 2023 31 Dec 2022

B. Formation Expenses 3 1,302,687.86 3,938,521.54

C. Fixed Assets

I. Intangible assets

2. Concessions, patents, licences, trademarks and similar rights and

assets, if they were – –

a) acquired for valuable consideration and need not be shown under

C.I.3 – –

b) created by the undertaking itself

– –

III. Financial assets 4 481,987,947.26 1,095,525,412.26

1. Shares in aliated undertakings 481,987,947.26 1,095,525,412.26

D. Current Assets 18,562,934.87 19,002,846.57

II. Debtors 5 8,866,787.65 16,754,150.46

1. Trade debtors 42,538.02 42,538.02

a) becoming due and payable within one year 42,538.02 42,538.02

2. Amounts owed by aliated undertakings 8,451,695.60 16,176,763.70

a) becoming due and payable within one year 5,973,407.60 13,659,625.70

b) becoming due and payable after more than one year 2,478,288.00 2,517,138.00

4. Other debtors 372,554.03 534,848.74

a) becoming due and payable within one year 372,554.03 534,848.74

III. Investment

2. Own shares 7 52,409.32 222,571.35

IV. Cash at bank and in hand 6 9,643,737.90 2,026,124.76

E. Prepayments 82,243,16 0.00

Total Assets 501,935,813.15 1.118.466.780,37

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023 | GFG

BALANCE SHEET

105

BALANCE SHEET

as at 31 December 2023 (continued)

CAPITAL, RESERVES AND LIABILITIES

In € Note 31 Dec 2023 31 Dec 2022

A. Capital and Reserves 7 320,537,303.37 702,976,189.95

I. Subscribed capital 2,237,929.14 2,202,929.14

II. Share premium account 3,568,654,053.56 3,568,689,053.56

IV. Reserves 52,409.32 222,571.35

2. Reserve for own shares 52,409.32 222,571.35

V. Profit or loss brought forward (2,867,968,202.08) (2,380,337,033.36)

VI. Profit or loss for the Financial Year (382,438,886.57) (487,801,330.74)

C. Creditors 8 181,398,509.78 410,149,931.08

1. Debenture loan 178,300,000.00 279,900,763.25

a) Convertible loans 178,300,000.00 279,900,763.25

i) becoming due and payable within one year – –

ii) becoming due and payable after more than one year 178,300,000.00 279,900,763.25

b) Non-convertible loans – –

i) becoming due and payable within one year – –

ii) becoming due and payable after more than one year – -

4. Trade creditors 8 1,862,182.78 1,870,329.46

a) becoming due and payable within one year 1,862,182.78 1,870,329.46

6. Amounts owed to aliated undertakings 8 125,737.65 126,553,967.58

a) becoming due and payable within one year 125,737.65 126,553,967.58

b) becoming due and payable after more than one year – –

8. Other creditors 8 1,110,589.35 1,824,870.79

a) Tax authorities

73,942.88 23,762.26

b) Social security authorities

150,340.58 160,903.67

c) Other creditors

886,305.89 1,640,204.86

i) becoming due and payable within one year

886,305.89 1,640,204.86

D. Deferred income 9 – 5,340,659.34

Total Capital, Reserves and Liabilities

501,935,813.15 1,118,466,780.37

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023 | GFG

PROFIT AND LOSS ACCOUNT

106

ANNUAL REPORT 2023 | GFG

BALANCE SHEET

105

PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2023

In € Note 31 Dec 2023 31 Dec 2022

4. Other operating income 10 9,468,498.41 4,078,128.54

5. Raw materials and consumables and other external expenses 11 (7,288,269.00) (7,095,442.45)

a) Raw materials and consumables (1,326.10) (1,475.80)

b) Other external expenses (7,286,942.89) (7,093,966.65)

6. Staff costs 12 (917,676.59) (1,685,175.30)

a) Wages and salaries (907,674.95) (1,670,898.74)

b) Social security costs (10,001.64) (14,276.56)

ii) other social security costs (10,001.64) (14,276.56)

7. Value adjustments (2,635,833.69) (2,813,432.19)

a) in respect of formation expenses and of

tangible and intangible fixed assets 3 (2,635,833.69) (2,868,871.82)

b) in respect of current assets – 55,439.63

8. Other operating expenses 13 (531,731.54) (351,420.15)

11. Other interest receivable and similar income 14 347,573,101.51 21,302,281.69

a) derived from aliated undertakings 319,672,476.05 279,536.35

b) other interest and similar income 27,900,625.46 21,022,745.34

13. Value adjustments in respect of financial assets

and of investments held as current asset 4,7 (722,707,627.03) (460,343,792.11)

14. Interest payable and similar expenses 15 (5,386,843.14) (40,858,189.72)

a) concerning aliated undertakings (803,271.94) (36,966,862.12)

b) other interest and similar expenses (4,583,571.20) (3,891,327.60)

15. Tax on profit or loss (7,050.00) (15,349.05)

16. Profit or loss after taxation (382,433,431.07) (487,782,390.74)

17. Other taxes not shown under items 1. to 16. 16 (5,455.50) (18,940.00)

18. Profit or loss for the Financial Year (382,438,886.57) (487,801,330.74)

The accompanying notes are an integral part of these financial statements.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

107

NOTES TO THE FINANCIAL STATEMENTS

AS AT 31 DECEMBER 2023

1. GENERAL INFORMATION

Global Fashion Group S.A. (hereafter the “Company” or “GFG”

SA) was incorporated on October 1, 2014 and organised under

the laws of Luxembourg as Société Anonyme for an unlimited

period of time.

The registered oce of the Company is established at 5, Heienha,

L-1736 Senningerberg, Grand-Duchy of Luxembourg and the

Company is registered with the Register of Commerce of

Luxembourg under B 190907. The Company is the parent of

Group companies (together the “Group”) which operate in the

online fashion business across three regions being Latin America

(LATAM), South East Asia (SEA) and Australia and New Zealand

(ANZ) under the following brand names:

• Dafiti – LATAM

• Zalora – SEA

• THE ICONIC – ANZ

On 6 September 2023 it was announced Global Fashion Group

would close operations in Argentina. dafiti Argentna experienced

worsening performance since 2020 due to multiplefactors,

including consistently high inﬂation, restrictive import controls

and the exodus of international brands and vendors.

The accounting year of the Company begins on January 1 and

terminates on December 31 of each year.

The purpose of the Company is the holding of participations in

any form whatsoever in Luxembourg and foreign companies and

in any other form of investment, the acquisition by purchase,

subscription or in any other manner as well as the transfer by sale,

exchange or otherwise of securities of any kind and the

administration, management, control, and development of its

portfolio.

The Company may further grant any form of security for the

performance of any obligations of the Company or of any entity

in which it holds a direct or indirect participation or right of any

kind or which forms part of the same group of entities as the

Company and lend funds, render services or otherwise assist any

such entity in any other manner.

The Company may further provide all financial management

services, including, but not limited to, treasury management

services, currencies management services, interest rate and

foreign exchange risk management to any entity in which it holds

a direct or indirect controlling interest.

The Company may raise funds, especially through borrowing in

any form, and may issue any kind of notes, securities or debt

instruments, bonds and debentures and generally issue any

securities options to subscribe for securities of any type.

A further purpose of the Company is the (i) acquisition by

purchase, registration or in any other manner as well as the

transfer by sale, exchange or otherwise of intellectual and

industrial property rights, (ii) the granting of license on such

intellectual and industrial property rights, and (iii) the holding and

the management of intellectual and industrial property rights.

The Company shall not, and shall not be permitted to, engage in

activities which require any license, authorization, or registration

under the law of 12 July 2013 on alternative investment fund

managers, as amended.

The Company may carry out any commercial, industrial, financial,

real estate, technical, intellectual property, or other activities

which it may deem useful in accomplishment of these purposes.

The Company has a branch in Denmark whose accounts are

included in this Financial Statements.

Since 2 July 2019, the shares of the Company are traded on the

regulated market of the Frankfurt Stock Exchange (the “Listing”).

The Company also prepares consolidated Financial statements,

which are published according to the provisions of the

Luxembourg law. The consolidated accounts are available at the

registered oce of the Company.

The financial statements were approved and authorized for issue

by the Supervisory Board on 5 March 2024. The shareholders will

ratify the approval of the financial statements at the annual general

meeting.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

108

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

107

2. SUMMARY OF SIGNIFICANT

ACC

OUNTING POLICIES

2.1 Basis of Preparation

The Financial statements have been prepared in accordance

with the Luxembourg legal and regulatory requirements and

according to generally accepted accounting principles

applicable in Luxembourg. The accounting policies and

valuation principles are, apart from those enforced by the law,

determined and implemented by the Supervisory Board.

Accounting policies and valuation rules are, besides the ones

laid down by the Law of 19 December 2002 on the accounting

and financial statements of undertakings as subsequently

amended (“the Law”), determined and applied by the

Supervisory Board.

The financial statements of the Company are prepared under the

historical cost convention and the going concern assumption.

The preparation of financial statements requires the use of

certain accounting estimates. It also requires the Supervisory

Board to exercise their judgment in the process of applying the

accounting policies. Changes in assumptions may have a

significant impact on the financial statements in the period in

which the assumptions changed. Management believes that the

underlying assumptions are appropriate and that the financial

statements therefore present the financial positions and results

fairly.

The Company makes estimates and assumptions that aect the

reported amounts of assets and liabilities in the next Financial

Year. Estimates and judgments are continually evaluated and are

based on historical experience and other factors, including

expectations of future events that are believed to be reasonable

under the circumstances.

2.2 Significant Accounting Policies

The main valuation rules applied by the Company are the

following:

Formation Expenses

Formation expenses, including costs relating to equity raising

are written o on a straight-line basis over a period of 5 years.

The formation expenses relating to issuance of convertible

bonds are amortised during the period started with the issuance

of convertible bonds and ending on the put option date (note 3).

Intangible Assets

Intangible assets are valued at purchase price including the

expenses incidental thereto or at production cost, less cumulated

depreciation, less amounts written o and after value

adjustments. These value adjustments are not continued if the

reasons for which the value adjustments were made have ceased

to apply.

The depreciation rates and methods applied are as follows:

Category

Depreciation

rate

Depreciation

method

Concessions, patents,

licenses, trademarks and

similar rights and assets 33.33% linear

Software 20% linear

Financial Assets

Shares in aliated undertakings, loans to these undertakings

and securities or other financial instruments held as fixed assets

are valued at acquisition cost nominal value (loans) including the

expenses incidental thereto.

In the case of durable depreciation in value according to the

opinion of the Supervisory Board, value adjustments are made in

respect of financial assets, so that they are valued at the lower

figure to be attributed to them at the balance sheet date. These

value adjustments are not continued if the reasons for which the

value adjustments were made have ceased to apply.

Own Shares

Own shares are initially measured at acquisition cost and

recognized as an asset with a corresponding non-distributable

reserve created from share premium and retained earnings. Own

shares are subsequently re-measured at the lower of cost or

market value using the average cost. Transferred or cancelled

shares are valued using the average cost method. They are subject

to value adjustments where their recovery is compromised. These

value adjustments are reversed when the reasons for which the

value adjustments were made have ceased to apply.

Debtors

Debtors are valued at their nominal value. They are subject to

value adjustments where their recovery is compromised. These

value adjustments are not continued if the reasons for which the

value adjustments were made have ceased to apply.

Foreign Currency Translation

These financial statements are expressed in Euro (€).

The transactions expressed in a currency other than EUR are

translated into EUR at the exchange rate eective at the time of

the transaction.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

109

The translation at the balance sheet date is made according to the

following principles:

– Cash at bank is translated at the exchange rate eective

at the balance sheet date. Exchange losses and gains are

recorded in the profit and loss account of the period;

– Other assets and liabilities are translated separately

respectively at the lower or at the higher of the value

converted at the historical exchange rate or the value

determined on the basis of the exchange rates eective

at the balance sheet date. The unrealized exchange

losses are recorded in the profit and loss account. Solely

the exchange gains are recorded in the profit and loss

account at the moment of their realization;

– Income and charges expressed in a currency other than €

are translated into € at the exchange rate prevailing at

the transaction date;

– Where there is an economic link between an asset and a

liability, these are valued in total according to the

method described above and the net unrealized losses

are recorded in the profit and loss account and the net

unrealized exchange gains are not recognized.

Consequently, only realized foreign exchange gains and losses

and unrealized foreign exchange losses are taken into account in

the profit and loss account.

Prepayments

This asset item includes expenditures incurred during the

Financial Year but relating to a subsequent Financial Year.

Cash at Bank and in Hand

Highly liquid investments with an original maturity of three months

or less are considered to be cash at bank and in hand.

Provisions

Provisions are intended to cover losses or debts, the nature of

which is clearly defined and which, at the date of the balance

sheet, are either likely to be incurred or certain to be incurred but

uncertain as to their amount or to the date on which they will arise.

At the close of business, each year, the Supervisory Board

determines whether provisions should be set up to cover

foreseeable liabilities and charges. Previous year's provisions are

reassessed every year.

Provision for taxation corresponding to the dierence between

the tax liability estimated by the company and the advance

payments for the Financial Years for which the tax return has not

been filed are recorded under "tax debts".

Provisions may also be created to cover charges which originates

in the Financial Year under review or in previous Financial Year.

Debts

Debts are recorded at their reimbursement value. The debt

origination and further amendments costs are included in

formation expenses.

Deferred Income

Deferred income includes income received during the Financial

Year but relating to a subsequent Financial Year.

Expense Recognition

Expenses are charged in the year they are incurred, and they are

stated on an accrual basis.

Other Operating Income

The Company’s income principally comprises of consultancy and

technical fees charged to aliated companies. Income is

recognized as earned.

Convertible Bonds

Convertibles bonds are recorded at their nominal value and the

relevant portion of issuance costs are recorded under formation

expenses.

Comparative Figures

An amount owed by aliated undertakings becoming due and

payable within one year for the year ended 31 December 2022

has been reclassified to becoming due and payable after more

than one year to ensure the comparability with the figures for the

year ended 31 Dember 2023. These reclassifications have no

eect on the prior year's loss.

3. FORMATION EXPENSES

The movements for the year were as follows:

In €

Total as at

31 Dec 2023

Total as at

31 Dec 2022

Gross book value —

opening balance 9,773,539.02 9,773,539.02

Additions

for the year – –

Gross book value — closing

balance 9,773,539.02 9,773,539.02

Accumulated value

adjustment — opening

balance (5,835,017.48) (2,981,847.86)

Allocations

for the year (1,512,785.10) (1,759,311.96)

Reversal of unamortized

costs related to partial bond

repurchase (1,123,048.58) (1,093,857.66)

Accumulated value

adjustment —

closing balance (8,470,851.16) (5,835,017.48)

Net book value —

closing balance 1,302,687.86 3,938,521.54

Formation expenses relate to the transaction’s costs qualifying as

IPO (occurred in July 2019) related costs for a consideration of

€4,203,912.00 and the convertible bonds issuance expenses

(occurred in March 2021) for a consideration of €5,569,627.02

which have been capitalized and amortized over the period ending

15 March 2026, which is the put option date of the convertible

bonds.

The formation expenses related to the convertible bonds issuance

expenses have been reduced by €1,123,048.53, approximately

37%, following bond repurchases in August 2023.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

110

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

109

4. SHARES IN AFFILIATED

UNDERTAKINGS

The movements for the year are as follows:

In €

Total as at

31 Dec 2023

Total as at

31 Dec 2022

Gross book value — opening balance

2,891,704,740.85 2,948,694,743.90

Additions for the year

111,000,000.23 48,269,554.35

Disposals for the year

(2,000,000.00) (105,259,557.40)

Gross book value — closing balance

3,000,704,741.08 2,891,704,740.85

Accumulated value adjustment — opening balance

(1,796,179,328.82) (1,404,665,099.35)

Allocation for the year

(722,537,465.00) (460,343,792.11)

Disposals for the year

– 68,829,562.64

Accumulated value adjustment — closing balance

(2,518,716,793.82) (1,796,179,328.82)

Net book value — closing balance

481,987,947.26 1,095,525,412.26

The additions of the year relate to the investments in Bigfoot

GmbH for a total amount of €83,000,000.00 and Global Fashion

Group SGP Services Pte. Ltd for a total amount of €28,000,000.00.

As at 31 December 2023, the investment in Global Fashion Group

SGP Services Pte. Ltd present an impairment of €28,000,000.00

the investment in Bigfoot GmbH present an impairment of

€389,942,673.00 and the investment in Global Fashion Group UK

Finance Limited presents an impairment of €304,594,792.00.

GFG Luxembourg One S.à r.l. was dissolved during the year and

its assets and liabilities were transferred to GFG S.A. As at

31 December 2023, the investment in GFG Luxembourg One

S.à r.l.

was therefore written down to €nil (2022: €2,000,000.00).

Name Country

Owner

ship

Last

balance

sheet

date

Net equity

at the last

balance

sheet date

€

Result for

the last

financial

year

€

Carrying

value as

at 31 Dec

2023

€

Carrying

value as

at 31 Dec

2022

€

Bigfoot GmbH

Germany 100 31.12.2023

(652,886,692,48)

(686,592,052.56)

86,823,829.91 393,766,502.91

GFG UK Finance Limited

United

Kingdom 100 31.12.2023

499,979,143.08

(165,820,591.06)

393,220,172.69 697,814,964.69

GFG Luxembourg

One S.A.r.l.

Luxem-

bourg

0 31.12.2023

– (2,423,618.85) – 2,000,000.00

GFG eCommerce

Technologies GmbH

Germany 100 31.12.2023

11,040,776.33 3,323,167.08 1,943,944.43 1,943,944.43

Name Country

Ownership

Gross

book value

31 Dec 2023

€

Accumulated Value

Adjustments

31 Dec 2023

€

Net

book value

31 Dec 2023

€

Bigfoot GmbH

Germany 100

2,170,175,277.38 (2,083,351,447.47) 86,823,829.91

GFG UK Finance Limited

United Kingdom 100

697,814,964.69 (304,594,792.00) 393,220,172.69

GFG SGP Services Pte. Ltd

Singapore 100

130,770,554.35 (130,770,554.35) –

GFG Luxembourg One S.A.r.l.

Luxembourg

0.0

2,000,000.00 (2,000,000.00) –

GFG eCommerce

Technologies GmbH

Germany 100

1,943,944.43 – 1,943,944.43

3,000,704,741.08 (2,518,716,793.82) 481,987,947.26

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

111

In the opinion of the Supervisory Board, the investments in the

above companies do not present further permanent impairment

as of 31 December 2023.

Name Country

Ownership

Gross

book value

31 Dec 2022

€

Accumulated Value

Adjustments

31 Dec 2022

€

Net

book value

31 Dec 2022

€

Bigfoot GmbH

Germany 100

2,087,175,277.38 (1,693,408,774.47) 393,766,502.91

GFG UK Finance Limited

United Kingdom 100

697,814,964.69 – 697,814,964.69

GFG SGP Services Pte. Ltd

Singapore 100

102,770,554.35 (102,770,554.35) –

GFG Luxembourg One S.A.r.l.

Luxembourg

100

2,000,000.00 – 2,000,000.00

GFG eCommerce

Technologies GmbH

Germany 100

1,943,944.43 – 1,943,944.43

2,891,704,740.85

(1,796,179,328.82)

1,095,525,412.26

5. DEBTORS

As at 31 December 2023 and 2022, the debtors’ balance were

the following:

In € Within one year After more than one year

Total

31 Dec 2023

Trade debtors 42,538.02 - 42,538.02

Amounts owed by aliated under-takings

5,973,407.60 2,478,288.00 8,451,695.60

Other debtors

372,554.03 – 372,554.03

Total debtors 6,388,499.65 2,478,288.00 8,866,787.65

In €

Within

one year

After

more than

one year

Total

31 Dec 2022

Trade debtors 42,538.02 - 42,538.02

Amounts owed by aliated under-takings

13,659,625.70 2,517,138.00 16,176,763.70

Other debtors

534,848.74 – 534,848.74

Total debtors

14,237,012.46

2,517,138.00

16,754,150.46

As at 31 December 2023, amounts owed by aliated undertakings are mainly composed of:

Intercompany loan due granted to Global Fashion Group TRM for €4,879,731.89 (2022: €nil), and Bigfoot GmbH for €2,478,288.00 (2022: €2,517,137.51)

and of receivables from aliated companies for a total amount of €1,066,423.45 (2022: €1,115,767.29). They are mainly composed of management

recharges receivable from Dafiti Brazil for an amount of €717,215.74 (2022: €717,215.74), Jade eServices Singapore for an amount of €104,512.00

(2022: €nil), Internet Services Australia for an amount of €133,981.00 (2022: €191,716.00)

An intercompany loan granted to Global Fashion Group UK Finance Limited was fully repaid during the year 2023 (2022: €12,300,000.00).

As at 31 December 2023, other debtors are mainly composed of (i) VAT receivables for an amount of €1,649,357.20 (2022: €5,546,519.98), VAT

prepayment for an amount of €4,644,437.50 oset with VAT payables of €4,758,330.38 (2022: €4,146,058.40), and VAT payables of prior years of

€1,194,863.67 (2022: net receivable of €871,852.30) (ii) and the advance of the net worth tax 2021 paid for an amount of €31,266.10 (2022: €6,018.75).

6. CASH AT BANK

ND IN HAND

As at 31 December 2023, cash at bank and in hand consists of

current account balances amounting to €9,643,737.90 (2022:

€2,026,124.76).

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

112

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

111

7. CAPITAL AND RESERVES

The movements on the capital and reserves items during the

year were as follows:

In €

Subscribed

capital

Share premium

account

Reserves for

own shares

Profit or loss brought

forward

Profit or loss

for the

Financial Year Total

As at 31 Dec 2022 2,202,929.14 3,568,689,053.56 222,571.35 (2,380,337,033.36) (487,801,330.74) 702,976,189.95

Prior year result

allocation – – – (487,801,330.74) 487,801,330.74 -

Capital increase

35,000.00 – – – – 35,000.00

Proceeds from

issued share capital – (35,000.00) – – – (35,000.00)

Own shares

reclassification – – (170,162.03) 170,162.03 – -

Net profit /(loss)

for the year – – – – (382,438,886.57) (382,438,886.57)

As at 31 Dec 2023

2,237,929.14

3,568,654,053.56

52,409.32 (2,867,968,202.08)

(382,438,886.57) 320,537,303.37

Subscribed Capital

As of 31 December 2022, the subscribed capital was composed

of 220,292,914 common shares with a par value of €0.01 per

share.

On 21 March 2023, the Management Board resolved to increase,

conditional to the receipt of the subscription price and the

subscription certificate by the Company, the Company’s share

capital by an amount of thirty five thousand euro (€35,000.00) so

as to raise it from its then current amount of two million two

hundred two thousand nine hundred twenty-nine Euro and

fourteen cents (€2,202,929.14) up to two million two hundred

thirty seven thousand nine hundred twenty nine and fourteen

cents (€2,237,929.14) through the issue of three million five

hundred thousand (3,500,000) common shares in dematerialized

form with a nominal value of one cent (€0.01) each.

As of 31 December 2023, the subscribed capital is composed of

223,792,914 common shares with a par value of €0.01 per share.

The table below details the share capital movements during the

year:

Number

common of

Nominal

amount in €m

(par value 0.01)

Share Capital

€m

Share premium

€m

At 1January2023 220,292,914 n/a 2,2 3,568

Additions of the year 3,500,000 0.01 – –

Disposals for the year – – – –

Balance as at 31December2023 223,792,914 n/a 2,2 3,568

Each common share entitles the holder to one vote at Global

Fashion Group’s Annual General Meeting. The nominal value of

all common shares is fully paid.

Share Premium Account

As of 31 December 2023, the share premium amounts to

€3,568,654,053.56 (2022: €3,568,689,053.56).

Reserves for Own Shares

As at 31 December 2023, the Company holds 278,733 of its

own shares (2022: 278,733) for a total amount of €52,409 (2022:

€222,571) included in the assets shown in the balance sheet.

During the year, the Company recorded a value adjustment on

its own shares of €170,162 (2022: nil) to remeasure them at lower

of cost or market value. The Company has adjusted its reserve

for own shares with the movements of the year in the number

and value of own shares in accordance with the Luxembourg law.

The reserve was reclassified against the profit or loss brought

forward.

Legal Reserve

The Company is required to appropriate a minimum of 5% of its

annual net income to a legal reserve, until this reserve equals

10% of the subscribed share capital. This reserve may not be

distributed.

As at 31 December 2023, no allocation to legal reserve was

made due to the negative financial result in the previous Financial

Year.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

113

8. CREDITORS

As at 31 December 2023 and 2022, amounts due and payable

for the accounts shown under "Creditors" were as follows:

In €

Within

one year

Within

two and five years After five years

Total

31 Dec 2023

Convertible bonds – 178,300,000.00 – 178,300,000.00

Trade creditors 1,862,182.78 – – 1,862,182.78

Amounts owed to aliated

undertakings 125,737.65 – – 125,737.65

Tax and social security debts 224,283.46 – – 224,283.46

Other creditors 886,305.89 – – 886,305.89

Total creditors 3,098,509.78 178,300,000.00 – 181,398,509.77

In €

Within

one year

Within

two and five years After five years

Total

31 Dec 2022

Convertible bonds – 279,900,763.25 – 279,900,763.25

Trade creditors 1,870,329.46 – – 1,870,329.46

Amounts owed to aliated

undertakings 126,553,967.58 – – 126,553,967.58

Tax and social security debts 184,665.93 – – 184,665.93

Other creditors 1,640,204.86 – – 1,640,204.86

Total creditors 130,249,167.85 279,900,763.25 – 410,149,931.08

On 15 March 2021, the Group issued convertible bonds for

net proceeds of €369.1 million (nominal value is €375 million),

with a fixed coupon rate of 1.25%. Unless previously converted,

redeemed or repurchased and cancelled, the convertible bonds

will be redeemed at their principal amount on 15 March 2028.

The bondholders also have the right to convert the convertible

bonds into new and/or existing (at the discretion of the Company)

no-par value common shares in dematerialised form of GFG. The

bondholders also have the right to redeem the options early, on

15 March 2026, for the principal amount plus accrued interest

(put option).

On 27 April 2022, the Group repurchased convertible bonds,

which were due to be redeemed on 15 March 2028. The Group

purchased Bonds representing €95.1 million in aggregate

principal amount (approximately 25% of the original principal

amount).

The purchase price per €100,000 nominal amount was €78,000.

This resulted in a gain recognised in the statement of profit or

loss of €20.9 million, recognised in other interest and similar

income. Following the settlement of the repurchase, an

aggregate principal amount of the Bonds of €279.9 million is

outstanding. The original terms of the bonds remain unchanged

for the remaining outstanding units.

On 25 August 2023, the group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €74.6 million in aggregate principal

amounts (approximately 27% of the principal amount as at the

end of December 2022).

On 31 August 2023, the group repurchased bonds which were

due to be redeemed on 15 March 2028. The Group repurchased

bonds representing €27 million in aggregate principal amounts

(approximately 10% of the principal amount as at the end of

December 2022).

As at 31 December 2023, trade creditors mainly included

provisions for accounting and auditing costs for an amount of

€904,786.39 (2022: €595,846.74).and other provisions for a total

amount of €306,045.79 (2022: €696,859.02) mainly related to

interest payable on convertible bonds.

As at 31 December 2023, amounts owed to aliated undertakings

included a total amount of €125,737.65 (2022: 126,553,967.58).

During the year, intercompany loans granted by Global Fashion

Group TRM Limited and Bigfoot were fully repaid for a total

consideration amount of €123,412,980.18 and €2,000,000.00

respectively. The intercompany loans granted by Global Fashion

Group TRM Limited bear various interest rates. The interest

expense for the Financial Year 2023 was €1,021,201.24 (2022:

€959,440.81). The intercompany loan granted by Bigfoot GmbH

bears interest at 4.587%. The interest expense for the Financial

Year 2023 was €59,529.17 (2022: €100,305.56).

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

114

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

113

9. DEFERRED INCOME

Deferred income comprise payment received in advance in

respect of consulting services that will be rendered in 2023 for a

total amount of €nil (2022: €5,340,659.34).

10. OTHER OPERATING

NCOME

The other operating income mainly consists of recharged legal

and consulting costs to Group companies.

11. RAW MATERIALS

ND CONSUMABLES

ND OTHER EXTERNAL

EXPENSES

The raw materials and consumables and other external expenses

were as follows:

In €

Total

31 Dec 2023

Total

31 Dec 2022

Raw materials and

consumables (1,326.10) (1,475.80)

Other external fees (1,326.10) (1,475.80)

Other external expenses (7,286,942.89) (7,093,966.65)

Legal fees (934,063.32) (1,848,980.85)

Accounting and audit

fees (1,095,198.43) (1,133,018.92)

Other external fees (807,716.66) (741,490.28)

Other operational

expenses

(4,449,964.49) (3,370,476.60)

Raw materials and

consumables and other

external expenses

(7,288,269.00) (7,095,442.45)

12. STAFF

The Company did employ one employee during the year (2022:

three employees).

13. OTHER OPERATING

EXPENSES

The other operating expenses were as follows:

In €

Total

31 Dec 2023

Total

31 Dec 2022

Director’s fee (330,000.12) (326,875.10)

Software licenses (201,731.42) (24,545.05)

(531,731.54) (351,420.15)

14. OTHER INTEREST

RECEIVABLE AND SIMILAR

INCOME

In 2023, other interest and similar income mainly related to

dividend income from Global Fashion Group UK Finance Limited

for €225,239,174.01 in April 2023 and €91,679,737.29 in

November 2023 (2022: €nil), gain on repurchase of convertible

bonds of €27,432,000.00 (2022: €20,921,514.95), the gain

resulting from the dissolution of GFG Luxembourg One SARL for

€2,669,902.36 (2022: €nil) and other interest and similar revenues

related to aliated undertakings of €524,175.76 (2022:

€265,644.64).

15. INTEREST PAYABLE AND

SIMILAR EXPENSES

In 2023, other interest and similar expenses included interest

on intercompany loans of €3,251,956.51 (2022: €1,782,844.90),

interest on the convertible bonds of €2,938,281.35 (2022:

€3,807,922.24) and the foreign exchange losses of €64,861.28

(2022: €70,427.82). In 2022, there was a loss resulting from the

transfer of shares of Jade 1159 and Jade 1218 to Bigfoot for

€35,196,994.76.

16. TAXATION

The Company is subject to all the taxes relevant to commercial

companies in Luxembourg.

17. AUDITOR'S FEES

Art. 65 paragraph (1) 16º of the Law of December 19

, 2002 on the

financial statements of undertakings (the “law”) requires the

disclosure of the independent auditor fees. In conformity with the

law, these details have been omitted as the Company prepares

consolidated accounts in which this information is disclosed, and

these consolidated accounts and the related consolidated

management report and auditors’ report thereon have been

lodged with the Luxembourg Trade Registry.

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

115

18. RELATED PARTIES

TRANSACTIONS

The Company conducts transactions with aliated entities of GFG

Group on normal commercial terms and conditions. These

transactions may include loans granted / received to / from group

entities (Notes 5 and 8), intercompany recharges in connection

with delivery / reception of services and other operations.

19. OFF BALANCE SHEET

COMMITMENTS

a) Guarantees issued

The Company has issued guarantees to suppliers of some of its

direct or indirect subsidiaries, agreeing to provide support and

assistance and secure payment obligations. Details are as follows

of guarantees in place as at 31 December 2023:

Issuance Date Beneficiary name Amount (EUR)

16-06-20 Ralph Lauren 633,312

05-10-20 DK COMPANY Vejle 90,000

02-04-20 Tendam Retail, S.A

(Springfield) 125,000

02-02-20 DKH Retail Limited

(Superdry) 1,400,000

24-08-20 Accent Brands 772,845

08-09-22 PT. Bank HSBC

Indonesia 6,333,122

15-02-23 BANCO

SANTANDER

(BRASIL) S/A 7,237,854

b) Long Term Incentive Plans

The Company is committed through awards to members of the

management and other employees under terms and conditions

of share based compensation plans to issue shares of the

Company or to settle awards in cash. The issuance of shares or

the settlement in cash is subject to the achievement of service

and conditions as set out in the plans below:

ESOP 2018

With respect to the existing ESOP (Employee Share Option Plan)

2018, the Company is committed to issue a maximum number of

4,070,643 (2022: 6,249,171) shares at an average exercise price of

EUR 8.09 (2022: EUR 8.86), of which 4,070,643 (2022: 6,249,171)

options are vested as of 31 December 2022. Exercise requires the

payment of the agreed exercise price.

LTIP 2019

In September 2019, the Company launched a new Long Term

Incentive Plan. All units vest over two to three years and

Performance Stock Units (PSUs) are additionally subject to non-

market performance conditions that the Company will set for

each year. Other PSU tranches are subject to rolling performance

goals covering more than one year. Units that vested in April 2020

were subject to a lock up period of 1 year from the date of the

IPO, being 2 July 2019. On 3 July 2020, the lock-up period ended

and participants were entitled to exercise all vested shares.

Certain senior level executives are subject to a holding period

of maximum 4 years after their units are granted. There is no

dividend entitlement on all stock units during the vesting period.

Upon vesting, and subject to any holding period, legal ownership

of GFG shares is transferred to the participants except where

cash settlement is required by local regulations. The settlement

amount in cash will be equal to the market price of GFG Shares

on the vesting date or, if applicable, the date when the holding

period expires. Furthermore, the plan rules foresee various

discretions for the Board as well as good and bad leaver

provisions.

In 2023, 6,383,524 (2022: 6,811,357) share units were granted to

participants of the 2019 Share plan. 2,913,672 (2022: 1,654,755)

units were forfeited and 2,856,065 (2022: 1,830,398) units were

exercised during the year. The fair value of the awards granted

is equal to the GFG share price quoted on the Frankfurt stock

exchange. The weighted average fair value of the units granted

during the period was EUR 0.79 (2022: EUR 1.61). The number of

awards due to vest in 2024 is 3,223,695.

c) Support Letters

The Company issued several letters of support to its subsidiaries.

20. ADVANCES AND LOANS

GRANTED TO THE MEMBERS

OF THE ADMINISTRATIVE

MANAGERIAAND

SUPERVISORY BODIES

There are no advances, loans or commitments given on their

behalf by way of guarantee of any kind granted to the members

of the management and supervisory bodies during the

financialyear.

21. SUBSEQUENT EVENTS

There are no subsequent events during the Financial Year.

ANNUAL REPORT 2023 | GFG

PROFIT AND LOSS ACCOUNT

116

ANNUAL REPORT 2023 | GFG

NOTES TO THE FINANCIAL STATEMENTS

115

8. ADDITIONAL INFORMATION

8.1 FINANCIAL DEFINITIONS

In line with IFRS 5 disclosure requirements, all financial KPIs

related to the Statement of Profit or Loss are presented excluding

Argentina (as a discontinued operation) for the current and

comparative year. All non-financial KPIs are also presented

excluding Argentina for the current and comparative year.

KPIs related to the Statement of Financial Position and to the

Statement of Cash Flows include any Argentina balances and

cash ﬂows as at 31 December 2023. The comparative figures are

not restated.

1. Active Customers

Active Customers are the number of customers who have

purchased at least one item after cancellations, rejections and

returns in the last twelve months.

2. Adjusted EBITDA

Adjusted EBITDA is calculated as loss before interest and tax

adjusted for depreciation of property, plant and equipment

and right-of-use assets, amortisation of intangible assets and

impairment losses, and adjusted for share-based payment

expenses, impairment of goodwill and other non-financial

assets, Group recharges, one o consulting income, changes

to estimates for prior year tax, one o payroll and oce closure

costs.

Adjusted EBITDA is reconciled in the note 6 to the consolidated

financial statements and in section 2.2.3 Financial Performance.

Adjusted EBITDA is a supplemental non-IFRS measure of our

operating performance that is not required by, or presented in

accordance with, IFRS. Adjusted EBITDA is not a measurement

of our financial performance under IFRS and should not be

considered as an alternative to loss for the year, loss before

income tax or any other performance measure derived from IFRS.

We caution investors that amounts presented in accordance with

our definition of Adjusted EBITDA may not be comparable to

similar measures disclosed by other companies, because not all

companies and analysts calculate Adjusted EBITDA in the same

manner. We present Adjusted EBITDA because management

considers it to be an important supplemental measure of the

Group’s operating performance. Management believes that

investors’ understanding of our performance is enhanced by

including non-IFRS financial measures as a reasonable basis

for understanding the Group’s ongoing results of operations.

By providing this non-IFRS financial measure, together with a

reconciliation to the nearest IFRS financial measure, management

believes that investors’ understanding of the business and its

results of operations are enhanced, as well as assisting investors

in evaluating how well the business is executing its strategic

initiatives.

Adjusted EBITDA provides a basis for comparison of business

operations between current, past and future periods by

excluding items that management does not believe are

indicative of core operating performance. Adjusted EBITDA,

a non-IFRS measure, may not be comparable to other similarly

titled measures used by other companies.

3. Average Order Value

Average Order Value is defined as the NMV (see below for

definition) per order.

4. Capex

Capital expenditure shows additions to intangible assets and

additions to property, plant and equipment, including those

due from business combinations, excluding additions to IFRS 16

right-of-use assets.

The current year and prior year figures below are presented

excluding Argentina:

In €m FY 2023 FY 2022

Additions

Property, plant and equipment 4.3 11.4

Goodwill and other intangibles 24.2 31.1

Total Capex 28.5 42.5

5. EBITDA

EBITDA is calculated as loss before interest and tax adjusted for

depreciation of property, plant and equipment and right-of-use

assets, amortisation of intangible assets and impairment losses.

EBITDA is reconciled with the note 6 to the consolidated financial

statements and in section 2.2.3 Financial Performance.

EBITDA provides a basis for comparison of our business

operations between current, past and future periods by excluding

items that management does not believe are indicative of core

operating performance. EBITDA, a non-IFRS measure, may not

be comparable to other similarly titled measures used by other

companies.

117

ANNuAL REpORT 2023 | GFG

ADDITIONAL INFORMATION

6. Net Merchandise Value

Net Merchandise Value (“NMV”) is defined as the value of goods

sold including value-added tax (“VAT”) / goods and services tax

(“GST”) and delivery fees, after actual or provisioned rejections

and returns.

NMV is used as a complete measure of the merchandise

volumes being sold on GFG’s platforms through both Retail and

Marketplace business models. Revenue, on the same basis, only

takes into account the commission on a Marketplace transaction

and is therefore disconnected from true volume. As Retail

and Marketplace volumes carry similar levels of profitability,

management believes it is important to allow users of the Annual

Report to understand the Group’s progress on this measure.

NMV is a non-financial measure, as it includes sales taxes not

recorded in revenue and Marketplace price information that

cannot be reconciled to the financial statements.

7. Net Working Capital

Net working capital is calculated as inventories plus current

trade and other receivables less current trade payables and

other financial liabilities excluding current liabilities from the

convertible bond and share based payments.

In €m FY 2023 FY 2022

Inventory 110.5 170.2

Trade and other receivables (current) 38.6 37.1

Trade payables and other financial

liabilities (195.5) (208.7)

Convertible bond liability (note 22) 5.5 8.2

Liabilities related to SBP (note 23) 2.9 4.0

Net Working Capital (36.9) 10.8

8. Order Frequency

Order Frequency is defined as the average number of Orders

per customer per year (calculated as the last twelve month’s

Orders divided by Active Customers).

9. Pro-forma Cash

Pro-forma cash is defined as cash and cash equivalents at the

end of the year, short term duration bonds and securitised funds

plus restricted cash and cash on deposits.

In €m FY 2023 FY 2022

Cash and cash equivalents 225.9 323.5

Restricted cash and

cash on deposit 9.5 11.4

Investment funds 161.1 226.5

Pro-forma Cash 396.5 561.4

8.2 INFORMATION

RESOuRCES

Further information including GFG corporate

news, reports and publications can be found in the

Investor Relations section of our website at

https://ir.global-fashion-group.com.

GFG Contact

Saori McKinnon, Head of Investor Relations and Communications

Investor Relations: investors@global-fashion-group.com

Press / Communications: press@global-fashion-group.com

Concept / Consulting / Design

Silvester Group

www.silvestergroup.com

118

ANNuAL REpORT 2023 | GFG

ADDITIONAL INFORMATION

global-fashion-group.com