GLG CORP LTD - Annual Report 2007

GLG Corp Limited Preliminary final report

GLG Corp Ltd (ACN 116 632 958)

APPENDIX 4E

PRELIMINARY FINAL REPORT PERIOD ENDED 30 JUNE 2007

Highlight of Results
Appendix 4E Financial Statements for the Year ended 30 June 2007

31 August 2007

GLG Corp Limited Preliminary final report

1. Results for announcement to market

Set out below is summary financial information for the company for the 2006/07 financial year with full financial details being attached to this announcement.

Summary Information	Consolidated	Consolidated	Consolidated	Consolidated
	30-Jun-07 USD$'000	30-Jun-06 USD$'000	Inc/(Dec) USD$'000	Inc/(Dec) %
Revenue from Ordinary Activities	220,632	197,776	22,856	11.56%
Profit/(Loss) after Tax from OrdinaryActivities	8,094	9,862	(1,768)	(17.93%)
Profit/(Loss) after Tax from Discontinued Activities	(27)	(579)	552	95.34%
Net Profit/(Loss) after Tax Attributable to Members	8,067	9,283	(1,216)	(13.10%)
Basic Earnings - US Cents Per Share	10.89	13.85	(2.96)	(21.38%)
Diluted Earnings - US Cents Per Share	10.89	13.85	(2.96)	(21.38%)
Net Tangible Assets - US Cents Per Share	31.77	25.85	5.92	22.91

Dividends(distributions)	Asper security – US Cents			Franked amountper security - US cents
Dividends Paid duringYear	6.2			Nil
Proposed Final Dividend	6.2			Nil
Proposed payment date for final dividend	31 October 2007

The Company’s accounts are currently in the process of being audited by Deloitte Touche Tohmatsu, Chartered Accountants.

Summary Commentary on Results

The discussion that follows compares the Consolidated Income Statement for the period ended 30 June 2007 with that of 30 June 2006.

GLG’s net profit declined 13.1% to US$8,067 thousand, against a net profit of US$9,283 thousand in the previous year. The decline was due to higher selling, distribution and administrative expenses during the year.

GLG’s sales increased by US$22,856 thousand, or 11.6% to US$220,632 thousand compared to sales of US$ 197,776 thousand in the previous year. The growth came mainly from sales to new customers.

Other income decreased by US$293 thousand or 12.7% to US$2,008 thousand, mainly due to lower logistics fees received.

Cost of sales increased by US$20,781 thousand, or 11.7%, to US$198,988 thousand compared to cost of sales US$178,207 thousand in the previous year. This was consistent with the increase in sales.

GLG’s gross profit was US$21,644 thousand compared to a gross profit of US$19,569 in the previous year. Gross margin remained stable at 9.8%.

GLG Corp Limited Preliminary final report

Selling & Distribution cost went up to US$1,384 thousand compared to expenses of US$1,093 thousand in the previous year. The increase in expenses was mainly due to higher sample charges.

Administrative expenses increased to US$10,785 thousand compared to US$8,823 thousand in the previous year because of higher manpower and rental costs. In addition the expensing of operating lease on a straight line basis in accordance with Accounting Standard AASB 117 contributed a one off impact of US$307 thousand under rental expenses for the year. The weakening of US currency resulted in higher exchange losses under other operating expenses for the year.

Finance cost rose to US$1,492 thousand compared to US$1,328 thousand in the previous year. The increase was due to the higher interest rate for USD borrowings and higher charges incurred under letters of credit issued by customers.

Tax expense increased by US$103 thousand to US$798 thousand compared to US$695 thousand in the previous year. The increase was due to higher taxable profits during the year as a result of lower prior year and deferred tax adjustments.

The discussion that follows compares the Consolidated Balance Sheet as at 30 June 2007 with that of 30 June 2006.

Cash as at 30 June 2007 decreased by US$2,559 thousand, or 50.4%, to US$2,518 thousand compared to US$5,077 thousand as at 30 June 2006. The decrease in cash was mainly due to an increase in working capital requirements to support the higher sales volume during the year.

Trade and other receivables increased by US$5,460 thousand, or 32.4%, to US$22,289 thousand as at 30 June 2007 compared to US$16,829 thousand as at 30 June 2006. The increase was attributable mainly to pre-shipment trade advances to factories.

Other current assets increased by US$132 thousand, or 19.1%, to US$825 thousand as at 30 June 2007 compared to US$693 thousand as at 30 June 2006. The increase was attributable mainly to prepayments for insurance and computer software expenses.

Total payables and borrowings fell by US$4,929 thousand, or 45.2%, to US$5,987 thousand as at 30 June 2007 compared to US$10,916 thousand as at 30 June 2006 after accounting for higher off-settable trust receipts.

Equity increased to US$23,538 thousand as at 30 June 2007, from US$19,841 thousand as at 30 June 2006, mainly from retained profits as at 30 June 2007 after a dividend payment of US$4,594 thousand was made during the financial year.

The discussion that follows compares the Consolidated Statement of Cash flow as at 30 June 2007 with that of 30 June 2006.

GLG’s cash from operating activities improved to an inflow of US$12,217 thousand as at 30 June 2007 compared to inflow of US$8,241 thousand as at 30 June 2006. The improvement in the cash flow from operating activities is mainly due to the increase in sales receipts from customers.

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

GLG Corp Limited Preliminary final report

2. Appendix 4E Financial Statement for the year ended 30 June 2007

Income statement for the financial period ended 30 June 2007

Continuing Operations Sales Cost of sales Gross profit Other revenue Other income Distribution expenses Administration expenses Finance costs Other expenses Profit before income tax expense Income tax expense Profit for the period from continuing operations Discontinued operations Loss for the period from discontinued operations Profit for the period Earnings per share: Basic (cents per share) Diluted (cents per share)	Note	Consolidated 2007 US$’000 2006 US$’000
	4 4 4 4 4 5 28 20 20	220,632 197,776 (198,988) (178,207) 21,644 19,569 1,295 713 1,641 651 (1,384) (882) (10,785) (8,486) (1,492) (1,328) (1,099) (608) 8,892 10,557 (798) (695) 8,094 9,862 (27) (579) 8,067 9,283 10.89 13.85 10.89 13.85

GLG Corp Limited Preliminary final report

Balance sheet as at 30 June 2007

Current assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Total current assets Non-current assets Trade and other receivables Investment in subsidiaries Property, plant and equipment Other intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Current tax payables Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Total equity	Note 32(a) 9 10 11 27 12 13 14 15 5(b) 16 5(c) 17 18 19	Consolidated	Consolidated
		2007 US$’000	2006 US$’000
			5,077 16,829 - 693
		2,518
		22,289
		-
		825
		25,632	22,599
			6,804 - 1,587 686
		3,404
		-
		1,670
		-
		5,074	9,077
		30,706	31,676
			3,389 5,319 832
		3,639
		755
		1,053
		5,447	9,540
			2,208 108
		1,593
		128
		1,721	2,316
		7,168	11,856
		23,538	19,820
			10,193 78 9,549
		10,193
		323
		13,022
		23,538	19,820

GLG Corp Limited Preliminary final report

Statement of changes in equity for the financial period ended 30 June 2007

Issued Capital Hedging Reserves US$’000 US$’000	Share based payment Reserves Financial Guarantee Reserves Retained Profits US$’000 US$’000 US$’000	Total US$’000
- (335) 10,193 - - 335 - - - -	- - 365 - - - - - - - 78 - - - 9,184	30 10,193 335 78 9,184
10,193 - - - - - - - - -	- 78 9,549 - (4,594) - 85 - 160 - - - - 8,067	19,820 (4,594) 85 160 8,067
10,193 -	160 163 13,022	23,538

GLG Corp Limited Preliminary final report

Cash flow statement for the financial period ended 30 June 2007

Note Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid Dividends received Interest received Income tax paid Net cash provided by/(used in) operating activities 32(c) Cash flows from investing activities Payment for investment securities Proceeds from sales of property, plant and equipment Payment for property, plant and equipment Proceeds on sales of investment Payment for intangible assets Net cash (used in) investing activities Cash flows from financing activities Proceeds from issues of equity securities Dividends paid Payment for share issue costs Proceeds from / (repayment of) borrowings Net cash (used in)/provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period Cash and cash equivalents at the end of the financial period 32(a)	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
		194,432 (185,253) (816) - 389 (511)
	223,439
	(210,105)
	(853)
	-
	313
	(577)
	12,217	8,241
		- 185 (482) - (229)
	-
	1
	(646)
	(57)
	-
	(702)	(526)
		11,544 - (1,351) (13,451)
	-
	(4,594)
	-
	(9,480)
	(14,074)	(3,258)
	(2,559)	4,457 620
	5,077
	2,518	5,077

GLG Corp Limited Preliminary final report

Notes to the Financial Statements for the financial period ended 30 June 2007

Note Contents

1 Summary of accounting policies
2 Adoption of new and revised accounting standards
3 Critical accounting judgments
4 Profit from operations
5 Income taxes
6 Key management personnel compensation
7 Share Option Plan
8 Remuneration of auditors
9 Current trade and other receivables
10 Other current assets
11 Non-current trade and other receivables
12 Property, plant and equipment
13 Other intangible assets
14 Current trade and other payables
15 Current borrowings
16 Non-current borrowings
17 Issued capital
18 Reserves
19 Retained earnings
20 Earnings per share
21 Financial instruments
22 Dividends
23 Commitments for expenditure
24 Contingent liabilities
25 Leases
26 Economic dependency
27 Subsidiaries
28 Discontinued Operations-Disposal of subsidiaries
29 Segment information
30 Related party disclosures
31 Subsequent events
32 Notes to the cash flow statement

GLG Corp Limited Preliminary final report

1. Summary of accounting policies

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Urgent Issues Group Interpretations, and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the consolidated financial statements and notes of the consolidated entity comply with International Financial Reporting Standards (‘IFRS’). The parent entity financial statements and notes also comply with IFRS.

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

Registered Office Principal place of business Level 5, 33 York Street 41, Changi South Ave 2, Sydney, NSW 2000 Singapore 486153 Australia The financial statements were authorized for issue by the directors on XX XXX 2007

Basis of preparation

The financial report has been prepared on the basis of historical cost, except for financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of A-IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

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

Judgments made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for the period ended 30 June 2007 and the comparative information presented in these financial statements for the period ended 30 June 2006.

Reverse acquisition

On 9 November 2005, GLG acquired certain entities comprising the marketing group of the Ghim Li Global Group for consideration of US$62,249 thousand. In accordance with A-IFRS this was accounted for under AABS 3 Business Combinations. In accordance with reverse acquisition accounting principles, the assets and liabilities of entities comprising the marketing group (refer Note 27 and Note 28) are recorded at their book value on consolidation rather than their fair value.

The parent entity, GLG was incorporated on 12 October 2005, however in accordance with the disclosure requirements of AASB 3 Business Combinations the comparative information presented in the consolidated Income Statement includes results from the operations of the various Ghim Li Global Group entities acquired by GLG (refer Note 27 and Note 28) for the period ended 30 June 2006.

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

The company’s financial period is from 1 July 2006 to 30 June 2007.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemp tion value being recognised in profit and loss over the period of the borrowing using the effective interest rate method.

(b) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

(c) Employee benefits

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

Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to reporting date.

Defined contribution plans

Contributions to defined contribution superannuation plans are expensed when incurred.

(d) Financial assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. Subsequent to initial recognition, investments in subsidiaries are measured at cost. Subsequent to initial recognition, investments in associates are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements. Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-to-maturity’ investments, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

Loans and receivables

Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.

(e) Financial instruments issued by the company

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Compound instruments

The component parts of compound instruments are classified separately as liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible debt. The equity component initially brought to account is determined by deducting the amount of the liability component from the amount of the compound instrument as a whole.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the related debt or equity instruments or component parts of compound instruments.

(f) Foreign currency

Foreign currency transactions

All foreign currency transactions during the financial period are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

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

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

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(g) Foreign currency (cont’d)

Foreign operations

On consolidation, the assets and liabilities of the consolidated entity’s overseas operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in profit or loss on disposal of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of transition to A-IFRS are treated as assets and liabilities of the foreign entity and translated at exchange rates prevailing at the reporting date. Goodwill arising on acquisitions before the date of transition to A-IFRS is treated as an Australian dollar denominated asset.

(h) Goods and services tax

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

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

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

(i) Impairment of assets

At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

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

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

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(i) Impairment of assets (cont’d)

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(j) Income tax

Current tax

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

Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items. In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

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

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognis ed directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(k) Intangible asset

Patents, trademarks and licences

Patents, trademarks and licences are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight line basis over their estimated useful lives of 5 years. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period.

Research and development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally -generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated

the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.

- Internally generated intangible assets

Internally-generated intangible assets are stated at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows:

capitalised development costs 5 years

Intangible assets acquired in a business combination

All potential intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair value can be measured reliably.

(l) Inventories

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

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(m) Leased assets

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

Consolidated entity as lessee

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

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

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

Lease incentives

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(n) Payables

Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future payments resulting from the purchase of goods and services.

(o) Functional and Presentation currency

Functional currency is in US dollars as all group sales are denominated in US dollars and to US based customers. Presentation currency is also in US dollars as the Directors consider it is more appropriate given the history of the Consolidated entity, its principal place of business and its functional currency.

(p) Principles of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being the company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 ‘Consolidated and Separate Financial Statements’. A list of subsidiaries appears in note 27 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifiable net assets acquired exceeds the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition.

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(p) Principles of consolidation (cont’d)

The interest of minority shareholders is stated at the minority’s proportion of the fair values of the assets and liabilities recognised.

The consolidated financial statements include the information and results of each subsidiary from the date on which the company obtains control and until such time as the company ceases to control such entity. The consolidated financial statements have been accounted for as reverse acquisition of companies under common control and the consolidated financial statements have been prepared using the reverse acquisition accounting method. Refer to “Reverse acquisition” in “Basis of Preparation section in Note 1”.

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

(q) Property, plant and equipment

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

The following estimated useful lives are used in the calculation of depreciation

Leasehold improvements Over terms of lease from 5-10 years Plant and equipment 5- 10 years Furniture, fittings and office equipment 3-5 years Motor vehicles 5-10 years

GLG Corp Limited Preliminary final report

1. Summary of accounting policies (cont’d)

(r) Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

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

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

Warranties

Provisions for warranty costs are recognised at the date of sale of the relevant products, at the directors’ best estimate of the expenditure required to settle the consolidated entity’s liability.

(s) Revenue recognition

Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered to buyers’ forwarders which is taken to be the point in time when the buyers have accepted the goods and the related risks and rewards of ownership. Other sales are recognised by reference to the stages of completion of software contracts upon the full implementation and acceptance of the software at the customers premises.

Rendering of services

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

Dividend and interest revenue

Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(t) Share based payments

Equity-settled share-based payments granted after 7 November 2002 that were unvested as of 30 June 2007, are measured at fair value at the date of grant. Fair value has been measured as the difference between the share price at grant date and the strike price of zero. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the consolidated entity’s estimate of shares that will eventually vest.

GLG Corp Limited Preliminary final report

2. Adoption of new and revised accounting standards

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised Standards and Interpretations has resulted in changes to the Group’s accounting policies in the following areas that have affected the amounts reported for the current or prior years:

Accounting for financial guarantee

The Australian Accounting Standards Board (‘AASB’) released AASB 2005-9 ‘Amendments to Australian Accounting Standards’ in September 2005. AASB 2005-9 amends AASB 139 ‘Financial Instruments: Recognition and Measurement’ to require certain financial guarantee contracts to be recognised in accordance with AASB 139 at fair value, and to be subsequently measured at the higher of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in accordance with the revenue recognition policies.

The changes introduced by AASB 2005-9 apply to reporting periods beginning on or after 1 January 2006. These changes were first applied by GLG Corp Ltd for the period ending 30 June 2007. GLG Corp Ltd and the Consolidated entity is party to a number of financial guarantee contracts. The application of these amendments will result in such financial guarantee contracts being recognised at fair value and subsequently being measured at the higher of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in accordance with the revenue recognition policies.

The impact of this change in accounting policy in the consolidated financial statements at the beginning of the comparative period is that a capital reserve of US$77.8 thousand and the associated deferred tax liabilities of US$20.4 thousand was recognized for the financial contracts, adjusted against opening retained earnings. Profit for the financial year ended 30 June 2007 is US$107.2 thousand lower under the new policy and capital reserve as at 30 June 2007 is higher by US$85.0 thousand under the new accounting policy as a result of movements in the fair value of he financial liabilities recognized.

The impact of this change in accounting policy in the company financial statements at the beginning of the comparative period is that receivables of US$68.0 thousand and the associated deferred tax liabilities of US$20.4 thousand was recognized for the financial contracts, adjusted against opening retained earnings. Profit for the financial year ended 30 June 2007 is US$51.9 thousand higher under the new policy and receivables as at 30 June 2007 is higher by US$74.2 thousand under the new accounting policy as a result of movements in the fair value of the financial liabilities recognized.

At the date of authorisation of the financial report, the following Standards and Interpretations were in issue but not yet effective:

AASB 7 ‘Financial Instruments: Disclosures’ and consequential amendments to other accounting standards resulting from its issue
AASB 101 ‘Presentation of Financial Statements’ – revised standard
Interpretation 7 ‘Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies’
• Interpretation 8 ‘Scope of AASB 2’
Interpretation 9 ‘Reassessment of Embedded Derivatives’
Interpretation 10 ‘Interim Financial Reporting and Impairment’
AASB 8 ‘Operating Segments’
Effective for annual reporting periods beginning on or after 1 January 2007

Effective for annual reporting periods beginning on or after 1 January 2007 Effective for annual reporting periods beginning on or after 1 March 2006

Effective for annual reporting periods beginning on or after 1 May 2006 Effective for annual reporting periods beginning on or after 1 June 2006 Effective for annual reporting periods beginning on or after 1 November 2006 Effective for annual reporting periods beginning on or after 1 January 2009

GLG Corp Limited Preliminary final report

The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material financial impact on the financial statements of the company or the Group.

These Standards and Interpretations will be first applied in the financial report of the Group that relates to the annual reporting period beginning after the effective date of each pronouncement, which will be the company’s annual reporting period beginning on 1 July 2007.

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 1, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

4. Profit from operations (a) Revenue Revenue from continuing operations consisted of the following items: Revenue from the sale of goods Revenue from the rendering of services Total Revenue Other income Interest revenue: Bank deposits Other Dividends: Subsidiary Other Attributable to discontinued operations Other income	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
		197,776 1,641



	220,632
	1,295
	221,927	199,417
		62 327


	25
	288
	313	389 - 262
	- 400
	713	651
	222,640	200,068


	10	9

GLG Corp Limited Preliminary final report

4. Profit from operations (cont’d) (b) Profit before income tax Profit before income tax has been arrived at after crediting/ (charging) the following gains and losses from continuing operations: Gain/(loss) on disposal of property, plant and equipment Net foreign exchange gains/(losses) Profit before income tax has been arrived at after charging the following expenses: Cost of sales Finance costs: Interest on loans Other interest expense Total interest expense Line of credit charges Depreciation of non-current assets Amortisation of non-current assets Operating lease rental expenses: Minimum lease payments Employee benefit expense: Post employment benefits: Defined contribution plans Other employee benefit Total employee benefit expenses Finance lease expenses Attributable to discontinued operations Other income Administrative expense Selling and distribution Other operating expense	Consolidated 2007 US$’000 2006 US$’000 - (2) - (2) (165) (314) (165) (316) 198,988 178,207 198,988 178,207 183 175 670 640 853 815 639 513 1,492 1,328 519 554 4 77 523 631 1,593 1,062 1,593 1,062 404 320 6,225 5,352 6,629 5,672 16 37 10 9 (22) (337) - (211) (15) (40)	Consolidated 2007 US$’000 2006 US$’000 - (2) - (2) (165) (314) (165) (316) 198,988 178,207 198,988 178,207 183 175 670 640 853 815 639 513 1,492 1,328 519 554 4 77 523 631 1,593 1,062 1,593 1,062 404 320 6,225 5,352 6,629 5,672 16 37 10 9 (22) (337) - (211) (15) (40)
	2007 US$’000



	-

	-
	(165)

	(165)


	198,988

	198,988

	183
	670
	853
	639
	1,492

	519
	4
	523


	1,593
	1,593



	404
	6,225
	6,629

	16


	10
	(22)
	-
	(15)
	(27)	(579)

GLG Corp Limited Preliminary final report

5. Income taxes (a) Income tax recognised in profit or loss Tax expense/(income) comprises: Current tax expense/(income) Adjustments recognised in the current period in relation to the current tax of prior years Deferred tax expense/(income) relating to the origination and reversal of temporary differences Total tax expense The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows: Profit from continuing operations Loss from discontinuing operations Profit from operations Income tax expense at 30% Non-assessable income Non-deductible expenses Effects of tax concessions (i) Effects of different tax rate of overseas entities Deferred tax assets not recognised Other (Over)/under provision of income tax in previous year	Consolidated
	2007 US$’000 2006 US$’000
	996 1,059 (198) (269) - (95)
	798 695
	8,892 9,978 (27)
	8,865 9,978
	2,660 2,993 - - 16 21 (901) (944) (777) (1,063) - 53
	998 1,060 (2) (96)
	996 964 (198) (269)
	798 695

(i) In 2003, Ghim Li Global Pte Ltd was awarded the Global Trader Progra m status for a period of 5 years from 1 January 2003. Subject to the terms and conditions prescribed by the Income Tax Act of Singapore and the Global Trader Program, income derived from qualifying trading transactions is taxed at the concessionary rate of 10%.

GLG Corp Limited Preliminary final report

5. Income taxes (cont’d) (b) Current tax assets and liabilities Current tax payables: Income tax payable attributable to Entities in the Group

(c) Deferred tax balances Deferred tax liabilities comprise: Temporary differences

	Consolidated	Consolidated
	2007	2006
	US$’000	US$’000
	1,053	832
	1,053	832
	128	107
	128	107

Taxable and deductible temporary differences arise from the following:

				Consolidated	Consolidated
	Opening balance	Charged to income	Charged			Changes	Closing balance
			to	Acquisitions	Exchange	in tax
			Equity	/ disposals	differences	rate
2007	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Gross deferred tax liabilities: Capital expenditure Financial guarantee Gross deferred tax assets: Nil		(2) - 23		- -		- 85 43
	87 20
	107	(2) 23		- -		- 128

	-	- -		- -		- -
	-	- -		- -		- -
	107	(2) 23		- -		- 128

2006	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
	Opening balance	Charged to income	Charged to	Acquisitions/	Exchange	Changes in tax	Closing balance
			Equity	disposals	differences	rate
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Gross deferred tax liabilities: Capital expenditure Financial guarantee Gross deferred tax assets: Nil	182 (95) - - - - 87 - 21 - - - - 21
	182 (74) - - - - 108
	- - - - - - -
	- - - - - - -
	182 (75) - - - - 107

GLG Corp Limited Preliminary final report

5. Income taxes (cont’d)

Income taxes (cont’d)
Unrecognised deferred tax balances The following deferred tax assets have not been brought to account as assets: Tax losses – revenue Temporary differences	Consolidated
	2007 US$’000 2006 US$’000
	- 53 324 405
	324 458

6. Key management personnel compensation

(a) Key management personnel compensation policy

In relation to senior management the Nomination and Remuneration committee reviews remuneration policies and practices and makes recommendations to the Board regarding their approval. In relation to the Executive Chairman, Chief Executive Officer and the Chief Financial Officer, the Nomination and Remuneration committee determines and makes recommendations to the Board on remuneration packages and other terms of employment having regard to the need to attract, retain and develop appropriately skilled people. Remuneration of the senior management team is reviewed on an annual basis having regard to personal and corporate performance and relevant comparative information.

The remuneration of non-executive directors may not exceed in aggregate in any financial period the amount fixed by the company at the general meeting. Each executive director of the company has entered into a service agreement with Ghim Li Global Pte Ltd. They are not remunerated separately for being a Director or executive of the company or other operating entities. Each executive director receives a salary per annum. They may also be entitled to an annual bonus determined by the Nomination and Remuneration committee, in its absolute discretion. Each key manager also receives a salary per annum and may also be entitled to an annual bonus determined by the Chief Executive Officer or the Chairman, reviewed by the Nomination and Remuneration Committee, and approved by the Board at the Board’s absolute discretion.

Key Management Personnel details

The directors of GLG Corp Ltd during the period were:

Estina Ang Suan Hong (Chairman and Chief Executive Officer)
Samuel Scott Weiss (Non-executive Deputy Chairman and Independent Director)
Eu Mun Leong (Director and Chief Financial Officer)
Christopher Chong Meng Tak (Independent Director)
Ernest Seow Teng Peng (Independent Director)
Yong Yin Min (Director)

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

Candida Chung Choon Nai (Chief Operating Officer) appointed [1 September 2006]
Agnes Ng Moi Ngw (Chief Operating Officer Textiles)
Peter Tay Teck Keng (Chief Operating and Business Development officer) resigned [4 May 2007]
Surina Gan Meng Hui (Chief Operating Officer Textiles)
Lee Kim Ho (Sales and Marketing Manager)
Julie Tan Kar Hian (Sales and Marketing Manager)
Fok Chor Lim Ricky (Regional Head-Hong Kong) resigned [30 September 2006]
Shane Hartwig(Company Secretary)

The details of key management personnel remuneration have been transferred to the remuneration report section of the directors’ report.

GLG Corp Limited Preliminary final report

6. Key management personnel compensation (cont’d)

(b) Key management personnel compensation

The aggregate compensation of the key management personnel of the consolidated entity and the company is set out below:

Short-term employee benefits Post- employment benefits Share Based Payments	Consolidated
	2007 US$ 2006 US$
	1,574,981 1,150,238 36,963 44,003 91,044 69,534
	1,702,988 1,263,775

*In the previous year, part of the compensation amounting to US$153 thousand was recharged to other entities outside the group for services rendered.

GLG Corp Limited Preliminary final report

7. Share option plan

In respect of each independent director, upon listing of the company, Ghim Li Group Pte Ltd (ultimate parent entity of GLG Corp Ltd) agreed to assign 300,000 shares to an escrow agent on or before 11 October 2006. Each Independent Director is entitled to receive up to 100,000 of these GLG Corp Ltd shares for nil consideration, receivable as follows:

Upon the first anniversary of their appointment 33,333 shares for 1 year’s continuous service as a Director Upon the second anniversary of their 33,333 shares for 2 year’s continuous service as a Director appointment Upon the third anniversary of their appointment 33,333 shares for 3 year’s continuous service as a Director

The purpose of the share options are to:

Provide long term incentive to each independent director to remain with the group
Improve the long term performance of the company

There is an arrangement between GLG Corp Ltd and Ghim Li Group Pte Ltd whereby GLG Corp Ltd compensates Ghim Li Group Pte Ltd for the fair value of the share options when the shares are transferred to the independent directors of GLG Corp Ltd

The following reconciles the outstanding share options granted under the share option plan at the beginning and end of the financial year:

Balance at beginning of financial year Granted During the financial year Forfeited during the financial year Exercised during the financial year Balance at end of the financial year Exercisable at end of the financial year	2007 Number of Options Weighted average exercise price 300,000 - - - - - 100,000 - 200,000 - - -	2006
		Number of Options Weighted average exercise price
		- - 300,000 - - - - - 300,000 -
		- -

GLG Corp Limited Preliminary final report

8. Remuneration of auditors Auditor of the parent entity Audit or review of the financial report Other non- audit services- IPO Other auditors Auditing the financial report Review of the financial report Taxation services Other non-audit services Other non audit services-IPO	Consolidated
	2007 US$ 2006 US$
	64,361 - 49,517 263,475
	64,361 312,992
	113,956 83,001 - 57,717 9,948 8,941 - - - 36,316
	123,904 185,975

The auditor of GLG Corp Ltd is Deloitte Touche Tohmatsu.

Other auditors are Deloitte & Touche Singapore, Deloitte & Touche Guatemala, Deloitte & Touche Hong Kong, Rachel Liang-Tan, CPA, Inc.

9. Current trade and other receivables Trade receivables Third parties (i) Other party- GLIT group (ii) Related Parties (ii) Allowance for doubtful debts Less: Payable to Other Party- GLIT group (ii) Payable to Related Parties Bills Payable (i) Trust Receipts related to Other party- GLIT group (ii) Trust Receipts related to Related Parties (ii)	Consolidated
	2007 US$’000 2006 US$’000
	18,417 38,453 6,548 21,361 15,262 8,066 - -
	63,418 44,689 (9,173) (592) - - (6,182) (6,575) (22,511) (14,670) (3,263) (6,023)
	22,289 16,829

(i) Third parties offset: When GLG receives an order from a customer, it either receives a letter of credit or an open account for the customer. Upon completion of the order, GLG converts this letter

GLG Corp Limited Preliminary final report

9. Current trade and other receivables (cont’d)

of credit or open account into a bill payable with a bank. GLG will then use the cash to pay its creditors. When the letter of credit matures or the customer pays off the open account, the bank will offset funds from the third party trade receivable against bills payable.

(ii) Other party- GLIT and Related Parties offsets: Presently and reflected in the Balance Sheet at 30 June 2007 when Other Party-GLIT buys fabric from textile mills GLG issues a letter of credit on their behalf. In order to maximize the discounts available, GLG converts for Other Party- GLIT the letter of credit it has issued into a Trust Receipt.

The bank will immediately pay the textile mill. After completion of the apparel order, Other Party- GLIT invoices GLG and a trade payable is recorded. GLG immediately has a legally enforceable right to offset the amount owed by Other Party- GLIT and settle the balance, if any, with Other Party- GLIT on a net basis.

The offset takes place between 90 days to 120 days depending on the date of maturity of the Trust Receipt. A similar offset arrangement has been made with Related Parties transactions.

10. Other current assets Prepayments	Consolidated 2007 US$’000 2006 US$’000
	825 693 825 693

11. Non-current trade and other receivables Trade receivables – Other Party GLIT group (i)	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
		6,804


	3,404
	3,404	6,804

i) The long term receivable is an amount owed by Other Party- GLIT to GLG arising from the sale of Other PartyGLIT during the restructure of Ghim Li Group Pte Ltd. The amount is repayable at the end of 3 years starting from 1 July 2009. Other Party- GLIT is charged commercial rates of interest on the amount owed, based on a margin above Singapore Inter-Bank Offer Rate (SIBOR). Other Party-GLIT may repay the monies early without penalty. Ghim Li Group Pte Ltd, the ultimate parent of GLG Corp Ltd has guaranteed the repayment in the event of a default by Other Party- GLIT. In October 2006, GLIT repaid US$3,400,000 leaving a balance of US$3,404,000.

GLG Corp Limited Preliminary final report

12. Property, plant and equipment

	Consolidated	Consolidated	Consolidated	Consolidated
	Leasehold improvements at cost	Plant & Machinery at cost	Furniture Fittings and office equipment at cost	Motor Vehicles At cost	Total
	US$’000	US$’000	US$’000	US$’000	US$’000
Gross carrying amount Balance at 1 July 2005 Additions Disposals Balance at 1 July 2006 Additions Disposals Balance at 30 June 2007 Accumulated depreciation/ amortization and impairment Balance at 1 July 2005 Disposals Depreciation expense Balance at 1 July 2006 Disposals Depreciation expense Balance at 30 June 2007 Net book value As at 30 June 2006 As at 30June 2007	266 88 42 13 - (5)				3,556 481 (376)
			2,479 723
			417 9
			(34) (337)

	308 96 10 1 - (5)		2,862 395 532 102 (55) (30)		3,661 647 (90)
	318 92		3,341 467		4,218
	162 31 - (3) 12 10				1,709 (189) 554
			1,372 144 (26) (160) 397 135
	174 38 - (1) 23 10		1,743 119		2,074 (45) 519
			(23) (21) 363 123
	198 47		2,083 221		2,548
	134 58				1,587
			1,119 276
	120 45		1,258 246		1,670

Aggregate depreciation allocated during the period is recognised as an expense and disclosed in Note 2 to the financial statements.

The parent entity has no property, plant and equipment.

GLG Corp Limited Preliminary final report

13. Other intangible assets

Consolidated	Consolidated	Consolidated	Consolidated
Capitalised development	Other Costs	Intellectual Property	Total
US$’000	US$’000	US$’000	US$’000
- 1 533 534 133 4 92 229
133 5 625 763
(133) (5) (625) (763)
- - - -
- - - - (13) (1) (63) (77)
(13) (1) (63) (77) - (4) - (4) 13 5 63 81
- - - -
120 4 562 686
- - - -

(i) Amortisation expense is included in the line item Administration expenses in the income statement.

Capitalised development consisted of salaries and overhead expenses relating to development and further upgrades of the hardware and software of a shop floor inventory and payroll system.

Intellectual property consisted of costs incurred in the acquisition of computer source codes, licenses and a shop floor inventory and payroll system.

14. Current trade and other payables Trade payables (i) Other payables Accruals	Consolidated
	2007 US$’000 2006 US$’000
	2,060 2,509 - - 1,579 880
	3,639 3,389

(i) The consolidated entity has financial risk management policies in place to ensure that all payables are paid within the credit time frame.

GLG Corp Limited Preliminary final report

15.	Current borrowings Secured At amortised cost: Bank overdrafts (i) Bank loans (ii) (iii) Trust receipts (i), (iv) (Gross) Bills payable (v) Finance lease liabilities (iii) Less Trust receipt -offsetable Total	Consolidated	Consolidated
		2007 US$’000	2006 US$’000
			- 567 25,374 - 71



		-
		635
		25,774
		- 120
		26,529	26,012
		(25,774)	(20,693)
		755	5,319

(i) Secured by corporate guarantee from Ghim Li Group Pte Ltd and Ghim Li Holdings Co. Pte Ltd; Joint and several personal guarantees by Estina Ang (Director) and Surina Gan (Director).

(ii) The bank loan is repayable by a reducing balance method of 60 monthly average installments of US$63,749.75 (30 June 2006: US$59,335). The average effective interest rate charge is 7.9172% per annum.

(iii) Secured by corporate guarantee from Ghim Li Group Pte Ltd and Ghim Li Holding Co. Pte Ltd and personal guarantee by Estina Ang (Director).

(iv) Trust Receipts not offsettable US$nil thousand (30 June 2006: nil thousand); Trust Receipts offsettable US$20,693 thousand (30 June 2006: US$20,693 thousand). See note 9.
(v) Bills payable not offsettable US$nil (30 June 2006: US$nil); Bills payable offsettable US$6,182 thousand (30 June 2006: US$6,575 thousand). See note 9.

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

	2007	2006
Bank overdrafts	US prime rate	US prime rate
Bank loans	7.92%p.a.	7.92%p.a.
Trust receipts	1- 5mths US SIBOR + (1% -	1- 5mths US SIBOR + (1% -
	1.75%)	1.75%)
Finance lease liabilities	4.60%p.a.	4.60%p.a.
Bills payable	6.67%	5.64%

GLG Corp Limited Preliminary final report

16.	Non-current borrowings Secured At amortised cost: Bank loans (i) Finance lease liabilities (ii)	Consolidated
		2007 US$’000 2006 US$’000
		1,370 1,937 223 271
		1,593 2,208

(i) Refer to note 15(ii), 15(iii)

(ii) Refer to note 13(iii)

17. Issued capital 74,100,000 (2006: 74,100,000) fully paid ordinary shares	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
		10,193
	10,193

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the company does not have a limited amount of authorised capital and issued shares do not have a par value.

Consolidated No. ’000 2007 US$’000	Consolidated No. ’000 2007 US$’000	Consolidated	Consolidated
No. ’000		No. ’000	2006 US$’000
			- 11,544 (1,351)
74,100	10,193 - -	-
-		74,100
-		-
74,100	10,193	74,100	10,193

GLG Corp Limited Preliminary final report

18. Reserves Hedging Hedging reserve Balance at beginning of financial period Transferred to initial carrying amount of hedged item: Forward exchange contracts Balance at end of financial period Share based payment reserve Balance at beginning of financial period Share based payment recognition Balance at end of financial period Financial guarantees reserve Balance at beginning of financial period Financial guarantees fee recognition Balance at end of financial period Total	Consolidated
	2007 US$’000 2006 US$’000
	- -
	- (335) - 335
	- -
	- - 160 -
	160 -
	78 - 85 78
	163 78

	323 78

19. Retained earnings Balance at beginning of financial period Dividends paid Recognition of Financial Guarantee Net profit attributable to members of the parent entity Balance at end of financial period	Consolidated 2007 US$’000 2006 US$’000 9,549 (4,594) - 365 - (99) 8,067 - 9,283
	13,022 9,549

GLG Corp Limited Preliminary final report

20. Earnings per share Basic earnings per share: Total basic earnings per share Diluted earnings per share: Total diluted earnings per share	Consolidated	Consolidated
	2007 Cents per share	2006 Cents per share

	10.89	13.85


	10.89	13.85

Basic earnings per share

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

Earnings (a) Earnings from continuing operations (a) Weighted average number of ordinary shares for the purposes of basic earnings per share (b)	2007 US$’000 2006 US$’000
	8,067 9,283
	8,067 9,283
	2007 US$’000 2006 No.’000
	74,100 67,005

(a) Earnings used in the calculation of total diluted earnings per share and diluted earnings per share from continuing operations reconciles to net profit in the income statement as follows:

Net profit Earnings used in the calculation of basic EPS Earnings used in the calculation of basic EPS from continuing operations	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
	8,067	9,283

	8,067	9,283
	8,067	9,283

(b) The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:

Weighted average number of ordinary shares used in the calculation of basic EPS Weighted average number of ordinary shares used in the calculation of diluted EPS	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
	74,100	67,005
	74,100	67,005

GLG Corp Limited Preliminary final report

21. Financial instruments

(a) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

(b) Financial risk management objectives

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

The consolidated entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is governed by the consolidated entity’s policies approved by the board of directors, which provide written principles on the use of financial derivatives. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis.

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

(c) Foreign currency risk management

The consolidated entity minimizes its financial risk of changes in foreign currency exchange rate through the natural hedge of matching of its significant portion revenues and purchases in US dollars and matching of a significant portion of its assets and liabilities in US dollars. The group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

Forward foreign exchange contracts

It is the policy of the consolidated entity to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts within 80% to 100 % of the exposure generated. The consolidated entity also enters into forward foreign exchange contracts to manage the risk associated with anticipated purchase transactions and expenses out to 6 months within 30 % to 50 % of the exposure generated. Basis adjustments are made to the carrying amounts of non-financial hedged items when the anticipated sale or purchase transaction takes place.

The consolidated entity does not have any outstanding forward foreign exchange contracts as at the financial period ended 30 June 2007.

Maturity profile of financial instruments

The following table details the consolidated entity’s exposure to interest rate risk as at 30 June 2007.

The consolidated entity is exposed to interest rate risk as it borrows funds at both fixed and floating rates. The risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings.

GLG Corp Limited Preliminary final report

21. Financial instruments (cont’d)

2007	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Fixed maturity dates Less than 1 year 1-2 years 2-3 years 3 years 4-5 years 5+ years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Non	Total
		1-2	2-3 years	3 years	4-5 years	5+ years	interest
		years					bearing

		US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Financial assets: Cash and cash equivalents Trade receivables Other receivables (i) Financial liabilities: Trade payables Bank loans (ii) Finance lease (iii) Trust receipts (iv)	- - - - - - 2,518 2,518 - - - - - - 22,289 22,289 - 3,404 - - - - - 3,404 - 3,404 - - - - 24,807 28,211 - - - - - - 2,060 2,060 635 687 585 98 - - - 2,005 102 - 82 - 84 - 61 - 15 - - - - - 344 - 737 769 669 159 15 - 2,060 4,409

The following table details the consolidated entity’s exposure to interest rate risk as at 30 June 2006:

2006	Fixed maturity dates	Fixed maturity dates	Fixed maturity dates	Fixed maturity dates	Fixed maturity dates	Fixed maturity dates	Non	Total
	Less than 1 year	1-2 years	2-3 years	3 years	4-5 years	5+ years	interest
							bearing

	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Financial assets: Cash and cash equivalents Trade receivables Other receivables (i) Financial liabilities: Trade payables Bank loans (ii) Finance lease (iii) Trust receipts (iv)	- - - - - - 5,077 5,077 - - - - - - 16,829 16,829 - - 6,804 - - - - 6,804
	- - 6,804 - - - 21,906 28,710
	- - - - - - 2,509 2,509 567 613 664 565 95 - - 2,504 71 4,681 74 - 72 - 74 - 51 - - - - - 342 4,681
	5,319 687 736 639 146 - 2,509 10,036

The variable interest rates were as follows:

		2007	2006
(i)	Other receivables	SIBOR + 1%	SIBOR + 1%
(ii)	Bank loans	7.92%p.a.	7.92%p.a.
(iii)	Finance lease liabilities	4.60%p.a.	4.60%p.a.
(iv)	Trust receipts	1- 5mths US SIBOR + (1% -1.75%)	1- 5mths US SIBOR + (1% -1.75%)

GLG Corp Limited Preliminary final report

21. Financial instruments (cont’d)

(d) Credit risk management

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

Trade accounts receivable consist of a number of retail customers located in United States of America. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased.

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

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

(e) Fair value of financial instruments

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

The fair values of financial assets and financial liabilities are determined as follows:

the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and
the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The fair value of derivative instruments, included in hedging assets and liabilities, are calculated using quoted prices. Where such prices are not available use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments.

(f) Liquidity risk management

The consolidated entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

GLG Corp Limited Preliminary final report

22.	Dividends Subsequent Events Unrecognised amounts Fully paid ordinary shares Proposed final fully unfranked ordinary dividend

2007 Cents per share Total US$’000 6.20 4,594	2006	2006
Cents per share	Cents per share	Total US$’000
		4,594



6.20	6.20

The financial effect of the final dividend for June 2007 has not been brought to account in the financial statements for the period ended 30 June 2007 as the dividend was not declared on or before 30 June 2007 but will be recognised in subsequent financial reports.

23. Commitments for expenditure Estimated amounts committed for future capital expenditure but not provided for in the financial statements were as follows: Capital expenditure commitments Plant and equipment Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years Total 24. Contingent liabilities Contingent liabilities Guarantees in lieu of commercial and statutory cash deposits Guarantees arising from Letters of credit in force Total	Consolidated
	2007 US$’000 2006 US$’000
	21 66 - - - -
	21 66
	Consolidated
	2007 US$’000 2006 US$’000
	216 611 7,675 14,508
	7,891 15,119

23. Commitments for expenditure

A customer of a subsidiary has withheld payment of US$1.5 million for goods delivered and the subsidiary has filed a suit to recover this amount. The customer has alleged that the subsidiary had been late in the delivery of the goods thereby causing it to incur alleged losses of US$2.7 million which it is counterclaiming from the subsidiary. The counter claims are rejected by the subsidiary and merits of these counter claims can only be fully determined when all relevant documentation is available from the customer and other parties during litigation.

However, based on the evidence available to date and the opinion of legal counsel, the directors believe that they can defend the counter claims and recover the amount withheld by the customer. In the unlikely event that the customer is successful in their legal proceedings, the entity is able to recover substantially or all such losses from the manufacturers of the goods.

GLG Corp Limited Preliminary final report

25. Leases

Disclosures for lessees

5. Leases Disclosures for lessees	5. Leases Disclosures for lessees	5. Leases Disclosures for lessees	5. Leases Disclosures for lessees	5. Leases Disclosures for lessees
Finance lease payables					Present value of minimum future leasepayables Consolidated Company 2007 US$’000 2006 US$’000 2007 US$’000 2006 US$’000 120 71 - - 223 271 - - - - - -
	Minimum future leasepayables
	Consolidated		Company		Consolidated
	2007 US$’000	2006 US$’000	2007 US$’000	2006 US$’000	2007 US$’000	2006 US$’000	2007 US$’000
No later than 1 year 125 84 - - Later than 1 year and not later than 5 years 251 293 - - Later than five years - - - 376 377 - - Minimum future lease charges (32) (35) - - Gross finance lease payables 344 342 - - Included in the financial statements as: Current borrowings (note 15) Non-current borrowings (note 16)	125 84 - - 251 293 - - - - -
	376 377 - - (32) (35) - -				343 342 - - - - - -
	344 342 - -				343 342 - -
					120 71 - - 223 271 - -
					343 342 - -

Operating leases

Leasing arrangements

At the balance date, commitments in respect of non-cancellable operating leases for rental of office premises, warehouse and staff hostels were as follows:

Non-cancellable operating lease payments Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years	Consolidated	Consolidated
	2007 US$’000	2006 US$’000
		1,025 4,320 2,650
	1,075
	4,568
	1,570
	7,213	7,995

The operating leases for rental of office and warehouse will increase every 3 years at the rate of 9%.

26 Economic dependency

The consolidated entity is sourcing its apparel manufacturing requirements mainly from the GLIT entities. The economic dependency of this arrangement is protected by the long term contracts between the GLIT entities and the consolidated entity which has first right of refusal for the production capacity of the GLIT entities.

GLG Corp Limited Preliminary final report

27. Subsidiaries

Name of entity	Ownership interest	Ownership interest
	2006 %	2005 %
Parent entity GLG Corp Ltd Australia

Subsidiaries
Escala Guatemala S.A. Reg No. 306151 Republic of Guatemala	100 100

Ghim Li Global Pte Ltd Reg No. 199904299D Ghim Li Global International Ltd Reg No. 746243 Ghim Li Enterprise (USA) Inc. Federal ID No.954861415 California Secretary of State Incorp No.2310719 GG Textiles Co. Pte Ltd Reg No. 200003876W Ghim Li International (S) Pte Ltd Reg No. 200502200W Singapore Hong Kong United States of America Singapore Singapore	100 100 100 100 100 100 100 100 100 100

28. Discontinued operations -Disposal of subsidiaries

The subsidiaries below were disposed of during the year.

Ghim Li Delaware Corporation Inc is a contract service company for the garment industry. The company was incorporated in May 2005 in Wilmington, Delaware. The company remained inactive and was subsequently dissolved on June 28, 2007. Management believes that any monetary liability following the disposal does not have any material financial impact on the group.

Best Apparel Sourcing Corporation has been disposed of on June 30, 2007. Best Apparel Sourcing Corporation was incorporated in December 2003 in Rowland Heights, California. The company imported finished apparel from overseas and sells to the US customers. Trading operations of this company ceased in 2005.

On 1 July 2006, the Group disposed of GHZ Technologies Holdings Pte Ltd and its subsidiary GHZ Technologies Pte Ltd, which develop and market information technology hardware and software systems. Consideration for the disposal consisted of US$1.00 received in cash and an option to subscribe for a 40% shareholding in GHZ Technologies Holdings Pte Ltd. The exercise price of the option is US$1 plus post acquisition increase in capitalization and has an exercise period of three years. The fair value of the option recognised at the time of disposal has been fully impaired following a review at the financial year end.

GLG Corp Limited Preliminary final report

28. Discontinued operations -Disposal of subsidiaries (cont’d)

Subsidiary	Cost of investment	Effective equity interest previously held by the Group	Place of incorporation/ business	Principal activities
	US$’000	%
Best Apparel Sourcing Corp Federal ID No. 20-0540131 California Secretary of State Incorp No. 2621108	664	100	United States of America	Managing the USA customs and logistics
Ghim Li Delaware Corporation Inc Reg No. 050359625-3964487	-	100	United States of America	Sales and marketing offices for sales to USA
GHZ Technologies Holding Pte Ltd Reg No. 200504857W	+	100	Singapore	Holding company for a majority owned subsidiary with intellectual property rights in information technologies
GHZ Technologies Pte Ltd Reg No. 200502200W	+	100	Singapore	Markets information technologies.

- equivalent of US$10

+ equivalent of US$1

The combined results of the discontinued operations which have been included in the income statement are as follows. The comparative profit and cash flows from discontinued operations have been re-presented to include those operation

2007 US$'000 2006 US$’000 GHZ	2007 US$'000 2006 US$’000 GHZ	2007 US$'000 2006 US$’000 BAS	2007 US$'000 2006 US$’000 BAS	2007 US$'000 2006 US$’000 Delaware - - - (1) (6) (2)
-	274	9	634

-	(224)	(22)	(112)
-	(83)	(9)	(732)
-	(33)	(22)	(210)	(6) (3) - - - -
-	-	1	12
-	-	-	-

-	(33)	(21)	(198)	(6) (3)
	- - -		(417) - -	- - - - - -

-		(11)
-		-
-		-
-	-	(11)	(417)	- -

GLG Corp Limited Preliminary final report

29. Segment information

GLG operates predominantly in one industry and geographical segment which is the sale of knitwear apparel to the United States market.

30. Related party disclosures

(a) Equity interests in subsidiaries

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

(b) Key management personnel remuneration

Details of key management personnel remuneration are disclosed in the remuneration report on pages 9 to 13 of the directors’ report and in notes 6 and 7.

i. Key management personnel equity holdings

Fully paid ordinary shares of GLG Corp Ltd

		Balance at 1 July	Balance at 1 July	G co	ranted as mpensation	Received on exercise of options	Received on exercise of options	Net other change	Net other change	Balance at 30 June	Balance at 30 June	Balance at 30 June	Balance at 30 June
		No.			No.	No.		No.		No.

	Balance at 1 July		Granted as compen- sation								Vested but	Vested and exerci - sable	Options vested during year
				Exercised		Net other change	Bal at 30 June		Bal vested at 30 June		not exerci- sable
	No.		No.	No.		No.	No.		No.		No.	No.	No.
2007 Samuel Scott Weiss 99,999 (33,333) - 66,666 - - - 33,333 Christopher Chong Meng Tak 99,999 - - 99,999 - - - 33,333 Ernest Seow Teng Peng 99,999 (33,333) - 66,666 - - - 33,333 2006 Samuel Scott Weiss - 99,999 - - 99,999 - - - - Christopher Chong Meng Tak - 99,999 - - 99,999 - - - - Ernest Seow Teng Peng - 99,999 - - 99,999 - - - -

GLG Corp Limited Preliminary final report

30. Related party disclosures (cont’d)

All share options issued to key management personnel were made in accordance with the provisions of the employee share option plan.

During the financial year, 99,999 options (2006: nil) were exercised by key management personnel at an exercise price of nil per option for 99,999 ordinary shares in GLG Corp Ltd (2006: nil). No amounts remain unpaid on the options exercised during the financial year at year end.

Further details of the employee share option plan and of share options granted during the 2007 and 2006 financial years are contained in notes 7 to the financial statements.

(c) Transactions with other related parties

Other related parties include:

the parent entity;
entities with joint control or significant influence over the consolidated entity;
associates;
joint ventures in which the entity is a venturer;
subsidiaries;
former key management personnel of Ghim Li Group Pte Ltd; and
other related parties.

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

Amounts receivable from and payable to these related parties are disclosed in note 9 to the financial statements.

Transactions involving other related parties

During the financial period, commission revenue on normal commercial terms and conditions received from Maxim Textiles Technology Pte Ltd, subsidiary of GLG’s parent entity Ghim Li Group Pte Ltd, was nil (2006:US$ 172 thousand).

(d) Parent entities

The Australia parent entity in the consolidated entity is GLG Corp Ltd.

31. Subsequent events

There have been no material events subsequent to the period ended 30 June 2007.

Notes to the cash flow statement (a) Reconciliation of cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial period as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows: Cash and cash equivalents Bank overdraft (b) Financing facilities Unsecured bank overdraft facility, reviewed annually and payable at call: • amount used • amount unused	Consolidated
	2007 US$’000 2006 US$’000
	2,518 5,077 - -
	2,518 5,077
	- - 630 2,026
	630 2,026

32. Notes to the cash flow statement

GLG Corp Limited Preliminary final report

Notes to the cash flow statement (cont’d) Secured bank loan facilities with various maturity dates and which may be extended by mutual agreement: • amount used • amount unused (c) Reconciliation of profit for the period to net cash flows from operating activities Profit for the period (Gain)/loss on sale or disposal of non-current assets Depreciation and amortisation of non-current assets Increase/(decrease) in current tax liability Changes in net assets and liabilities, net of effects from acquisition and disposal of businesses: (Increase)/decrease in assets: Current receivables Current inventories Other current assets Increase/(decrease) in liabilities: Current payables Other financial liabilities Net cash fro m operating activities	Consolidated
	2007 US$’000 2006 US$’000
	44,581 47,054 45,432 33,853
	90,013 80,907
	8,067 9,283 (55) 2 523 631 221 184 2,944 (3,690) - 1,480 (137) 345 408 101 246 (95)
	12,217 8,241

AI assistant

GLG CORP LTD — Annual Report 2007

64991_rns_2007-08-30_f2984adf-9ba0-44ac-9e50-5d54c1047b0f.pdf

APPENDIX 4E

PRELIMINARY FINAL REPORT PERIOD ENDED 30 JUNE 2007

1. Results for announcement to market

Summary Commentary on Results

The discussion that follows compares the Consolidated Income Statement for the period ended 30 June 2007 with that of 30 June 2006.

The discussion that follows compares the Consolidated Balance Sheet as at 30 June 2007 with that of 30 June 2006.

2. Appendix 4E Financial Statement for the year ended 30 June 2007

Income statement for the financial period ended 30 June 2007

Balance sheet as at 30 June 2007

Statement of changes in equity for the financial period ended 30 June 2007

Cash flow statement for the financial period ended 30 June 2007

Notes to the Financial Statements for the financial period ended 30 June 2007

Note Contents

1. Summary of accounting policies

Statement of compliance

Basis of preparation

Reverse acquisition

1. Summary of accounting policies (cont’d)

(a) Borrowings

(b) Cash and cash equivalents

(c) Employee benefits

Defined contribution plans

(d) Financial assets

1. Summary of accounting policies (cont’d)

Loans and receivables

(e) Financial instruments issued by the company

Debt and equity instruments

Compound instruments

Transaction costs on the issue of equity instruments

Interest and dividends

(f) Foreign currency

Foreign currency transactions

1. Summary of accounting policies (cont’d)

Foreign operations

(h) Goods and services tax

(i) Impairment of assets

1. Summary of accounting policies (cont’d)

Current tax

Deferred tax

Current and deferred tax for the period

1. Summary of accounting policies (cont’d)

Patents, trademarks and licences

Research and development costs

- Internally generated intangible assets

Intangible assets acquired in a business combination

(l) Inventories

1. Summary of accounting policies (cont’d)

Consolidated entity as lessee

Lease incentives

1. Summary of accounting policies (cont’d)

(q) Property, plant and equipment

1. Summary of accounting policies (cont’d)

Warranties

Sale of goods

Rendering of services

Dividend and interest revenue

(t) Share based payments

2. Adoption of new and revised accounting standards

Accounting for financial guarantee

3. Critical accounting judgements and key sources of estimation uncertainty

Taxable and deductible temporary differences arise from the following:

5. Income taxes (cont’d)

6. Key management personnel compensation

(a) Key management personnel compensation policy

Key Management Personnel details

6. Key management personnel compensation (cont’d)

(b) Key management personnel compensation

7. Share option plan

9. Current trade and other receivables (cont’d)

12. Property, plant and equipment

13. Other intangible assets

Basic earnings per share

21. Financial instruments

Forward foreign exchange contracts

Maturity profile of financial instruments

21. Financial instruments (cont’d)

21. Financial instruments (cont’d)

GLG CORP LTD Annual Report 2007