GLG CORP LTD — Interim / Quarterly Report 2012

Aug 30, 2012

31 August 2012

GLG CORP LTD Level 40, 100 Miller Street North Sydney NSW 2060 Australia Tel: (61) 2 8415 8956 Fax: (61) 2 8415 8986 www.glgcorpltd.com.au

Australian Securities Exchange Limited

Exchange Centre

20 Bridge Street SYDNEY NSW 2000

GLG Corporation Ltd (ASX: GLE) Appendix 4E

Following is the GLE Appendix 4E for the period ended 30 June 2012.

Regards,

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Jo Bourke

Company Secretary

GLG Corp Ltd

ACN 116 632 958 PRELIMINARY FINAL REPORT

PERIOD ENDED 30 JUNE 2012

1. Highlight of Results

1. Appendix 4E Financial Statements for the Year ended 30 June 2012

2

1. Results for announcement to market

Summary financial information for the company for the 2011/12 financial year is set out below. Full financial details are attached to this announcement.

		Consolidated
Summary Information	30 –JUN-12 USD$’000	30 –JUN-11 USD$’000	Inc/(Dec) USD$’000	Inc/(Dec) %
Revenue from Ordinary Activities	236,210	237,885	(1,675)	(0.70)
Profit/(Loss) after Tax from Ordinary Activities	7,524	2,705	4,819	178.15
Net Profit/(Loss) after Tax Attributable to Members	7,524	2,705	4,819	178.15
Basic Earnings – US Cents Per Share	10.15	3.65	6.50	178.08
Dilute Earnings – US Cents Per Share	10.15	3.65	6.50	178.08
Net Tangible Assets – US Cents Per Share	61.14	50.99	10.15	19.91

Dividends (Distributions)	As per security – US Cents	Franked amount per security-US cents
Dividends Paid during Year	Nil	Nil
Proposed Final Dividend	Nil	Nil
Proposed payment date for final dividend	N/A	N/A

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GLG Corp Ltd

Summary commentary on results

Directors Comments:

GLG Corp Ltd (“GLG” or the “Company”) accounts are in the process of being audited by Deloitte Touche Tohmatsu, Chartered Accountants.

The Directors note that whilst they do not expect the final audited results to differ materially from those included in this Preliminary Financial Report, as at the date of this report, the audit process has not been finalised and further changes may be forthcoming.

The discussion that follows compares the Consolidated Statement of Comprehensive Income for the financial year ended 30 June 2012 with that of 30 June 2011 .

GLG’s net profit increased 178.15% to $7,524 thousand, against a net profit of $2,705 thousand in the previous year. The increase was due to a higher gross margin being generated and lower finance costs.

Cost of sales decreased 4.62% to $207,333 thousand compared to cost of sales of $217,373 thousand in the previous year. The decrease was due to lower material costs.

GLG’s gross profit was $28,877 thousand compared to a gross profit of $20,512 thousand in the previous year. Gross margin increased by 3.61% to 12.23% compared to 8.62% in the previous year. The increase was largely attributed to lower material costs.

Selling and distribution costs decreased by 25.55% to $1,189 thousand compared to $1,597 thousand in the previous year. The decrease in the expenses was mainly due by lower cost of design.

Administration expense increased 14.71% to $14,379 thousand compared to $12,535 thousand in the previous year. The increase was mainly due to higher manpower costs.

Other expenses increased 330.97% to $6,249 thousand compared to $1,450 thousand in the previous year. The increase was mainly due to unexpected losses from forward currency contracts to hedge foreign currency exposure and commitment fees claimed by apparel manufacturers for the under-utilization of the manufacturing capacity in accordance with the outsourcing agreement.

Comparison of the Consolidated Statement of Financial Position as at 30 June 2012 with that of 30 June 2011 .

The Group financial position maintained at a stable position as at 30 June 2012.

Trade and other receivables decreased 5.26% to $63,012 thousand as at 30 June 2012 compared to $66,510 thousand as at 30 June 2011. This decrease was mainly due to lower amount from related parties.

Other Non Current Financial Assets has decreased by $5,247 thousand, or 31.69% to $11,310 thousand as at 30 June 2012 compared to $16,557 thousand as at 30 June 2011. The decrease was mainly due to lower amount due from other partyGLIT group.

Total current payables and borrowings decreased by $15,226 thousand, or 27.85%, to $39,453 thousand as at 30 June 2012 compared to $54,679 thousand as at 30 June 2011. The decline was largely due to lower borrowings.as a results of lower material costs.

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GLG Corp Ltd

Comparison of the Consolidated Statement of Cash Flows for the financial year ended 30 June 2012 with that of 30 June 2011.

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

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GLG Corp Ltd

Consolidated Statement of comprehensive income for the financial year ended 30 June 2012

Revenue Cost of sales Gross profit Other revenue Other income Distribution expenses Administration expenses Finance costs Impairment Expense Other expenses Profit before income tax expense Income tax expense Profit for the year Other comprehensive income Total comprehensive income for the year Earnings per share: Basic (cents per share) Diluted (cents per share)	Note 3 3 3 9 9	Consolidated	Consolidated
		2012 US$’000	2011 US$’000
		236,210	237,885 (217,373)
		(207,333)
		28,877	20,512 997 1,087 (1,597) (12,535) (1,408) (2,000) (1,450)
		445 1,236
		(1,189)
		(14,379)
		(690)
		-
		(6,249)
		8,051	3,606 (901)
		(527)
		7,524	2,705 - 2,705
		-
		7,524
			3.65 3.65
		10.15
		10.15

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Notes to the financial statements are included on pages 9 to 17

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GLG Corp Ltd

Consolidated Statement of financial position as at 30 June 2012

Current assets Cash and cash equivalents Trade and other receivables Inventory Other assets Other financial assets Total current assets Non-current assets Other financial assets Investments accounted for using the equity method Property, plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Current tax liabilities Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Retained earnings Total equity	Note 4 5 5 6 7 7 8	Consolidated
		2012 US$’000 2011 US$’000	2010 US$’000
		9,602 10,439 63,012 66,510 86 19 280 235 344 -	2,031 64,279 5 226 -
		73,324 77,203	66,541
		11,310 16,557 - - 1,500 1,274	18,200 - 1,050
		12,810 17,831	19,250
		86,134 95,034	85,791
		3,910 3,313 35,543 51,366 971 1,026	5,032 42,541 1,049
		40,424 55,705	48,622
		317 1,460 87 87	2,005 87
		404 1,547	2,092
		40,828 57,252	50,714
		45,306 37,782	35,077
		10,322 10,322 34,984 27,460	10,322 24,755
		45,306 37,782	35,077

Notes to the financial statements are included on pages 9 to 17

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GLG Corp Ltd

Consolidated Statement of changes in equity for the financial year ended 30 June 2012

Note Consolidated Balance at 1 July 2010 Profit for the year Other comprehensive income Total comprehensive income Balance at 30 June 2011 Balance at 1 July 2011 Profit for the year Other comprehensive income Total comprehensive income Balance at 30 June 2012	Issued Capital Retained Profits Total US$’000 US$’000 US$’000
	10,322 24,755 35,077
	- 2,705 2,705
	- - -
	- 2,705 2,705
	10,322 27,460 37,782
	10,322 27,460 37,782 - 7,524 7,524
	- - -
	- 7,524 7,524
	10,322 34,984 45,306

Notes to the financial statements are included on pages 9 to 17

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GLG Corp Ltd

Consolidated Statement of cash flows for the financial year ended 30 June 2012

Note Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid Income tax paid Net cash provided by operating activities 14 Cash flows from investing activities Proceeds from sales of property, plant and equipment Payment for property, plant and equipment Proceeds from repayment of related party loans Net cash used in investing activities Cash flows from financing activities Additional / (Repayment) of borrowings Amounts advanced to other parties Amounts advanced to related parties Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year	Consolidated
	2012 US$’000 2011 US$’000
	243,058 263,895 (228,289) (236,769) (459) (533) (582) (925)
	13,728 25,668
	40 5 (873) (613) (1,068) (869)
	(1,901) (1,477)
	(15,151) 8,346 (4,729) (24,992) 7,216 863
	(12,664) (15,783)
	(837) 8,408 10,439 2,031
	9,602 10,439

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Notes to the financial statements are included on pages 9 to 17

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GLG Corp Ltd
Notesto the Appendix 4E for the Year Ended 30 June 2012

Notes to the Appendix 4E

1. General information

GLG Corp Ltd (the Company) is a public company listed on the Australian Stock Exchange (ASX: ‘GLE’), incorporated in Australia and operating in Asia.

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

Registered office Level 40 North Point 100 Miller St North Sydney NSW 2060 Australia

Principal place of business 41, Changi South Ave 2, Singapore 486153

The entity’s principal activities are the global supplier of knitwear/apparel and supply chain management operation.

2. Segment information

GLG Corp Ltd operates in apparel industry and reports only one reportable segment under AASB8 “Operating Segments”.

3. Revenue

Revenue from the sale of goods Revenue from the rendering of services Other income Interest Income Other Total other income	Consolidated 2012 US$’000 2011 US$’000
	236,210 237,885
	445 997
	236,655 238,882
	746 847 490 240
	1,236 1,087
	1,236 1,087
	237,891 239,969

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GLG Corp Limited
Notesto the financial report

4. Trade and other receivables

Trade receivables Third parties Other party- GLIT group Related Parties Other receivables Provision for Bad Debts Less: Payable to Related Parties Payable to Other Party- GLIT group Goods and services tax recoverable	Consolidated 2012 US$’000 2011 US$’000 19,790 36,691 8,254 977 19,843 36,364 15,360 1,422 (2,624) (2,125)
	63,088 70,864 (110) - - (4,401)
	62,978 66,463
	34 47
	63,012 66,510

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The Group has early adopted AASB 2012-3 “Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities” and AASB 2012-2 “Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities”. As a result of changes to these standards that include revising the criteria to enable offsetting of financial assets and financial liabilities, the trust receipts related to transactions with the GLIT group are no longer disclosed on a net, or offset, basis. The early adoption of these standards has also resulted in changes to the 2011 comparative balances to present them on a gross basis, consistent with 2012. There is no impact on the net assets or equity of the Group as a result of early adopting these standards. This change has only resulted in the receivables and payables related to the above arrangement being presented on a gross basis for both 30 June 2012 and 30 June 2011.

The average credit period on sales of goods and rendering of services is 60 days. No interest is charged on the trade receivables outstanding balance.

Before accepting any new customers, the Group uses an external scoring system to assess the potential customer’s credit quality and defines credit limits by customers. Limits and scoring attributed to customers are reviewed twice a year. 80% of the trade receivables that are neither past due nor impaired have the best credit scoring attributable under the external credit scoring system used by the Group. Of the trade receivables balance at the end of the year, $20.2 million (2011: $12.5 million) is due from Macy’s, the Group’s largest customer.

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GLG Corp Limited
Notesto the financial report

4. Trade and other receivables(con’t)

Included in the Group’s trade receivable balance are debtors with a carrying amount of $2.6 million (2011: $2.4 million) which are past due at the reporting date. There has been no significant change in credit quality and all amounts are considered recoverable. The Group does not hold any collateral over these balances.

[Ageing of Trade Receivables (excluding GLIT and Related Party amounts) past ] due but not impaired

	due but not impaired
	60 – 90 days 90 – 120 days More than 120 days Total Movement in the allowance for doubtful debts Balance at the beginning of the year Allowance made during the year Balance at the end of the year*	Consolidated
		2012 US$’000 2011 US$’000
		244 13 81 53 2,317 2,286
		2,642 2,352
		2,172 328 452 1,844
		2,624 2,172

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*Includes the provision for doubtful debts for Trade Receivables, both current and non-current.

In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated.

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GLG Corp Ltd
Notesto Appendix 4E for the Year Ended 30[th] June 2012

5. Other financial assets

Current Trade receivables – Third parties (ii) Provision for Bad Debts Total Current other financial assets Non-current Trade receivables – Other Party GLIT group (i)(a) Trade receivables – Third parties (ii) Provision for Bad Debts Disclosed in the financial statements as : Total Non-current other financial assets	Consolidated
	2012 US$’000 2011 US$’000
	368 - (24) -
	344 -
	11,310 16,236 - 368
	11,310 16,604 - (47)
	11,310 16,557
	11,310 16,557

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(i) The loans owed by Other Party – GLIT Group consists of:

(a) US$11,310 thousand (FY2011: US$16,236) has been classified as non-current receivables as it is not expected to be received within the next twelve months.

Ghim Li Group Pte Ltd has guaranteed the repayment of both amounts in the current and non-current receivables owing by Other Party – GLIT to GLG Corp in the event of a default by Other Party – GLIT. This guarantee is in the form of three undertakings. The first, commited Ghim Li Group Pte Ltd to return the proceeds from any sale of GLG Corp Ltd shares by Ghim Li Group Pte Ltd to GLG Corp Ltd for the outstanding receivables owed by Other Party – GLIT. The second requires GLIT Holdings to pledge a factory (and its associated assets) owned by GLIT Holdings located in Brunei to GLG Corp Ltd. The third requires Estina Ang Suan Hong, the Executive Chairman/CEO of GLG Corp to commit to a personal pledge of US$10 million.

(ii) The current trade receivable owed by third party has for a provision for non recovery in FY2012 of US$24 thousand (FY2011: US$47 thousand).

6. Trade and other payables

Trade payables (i) Other payables Accruals	Consolidated
	2012 US$’000 2011 US$’000
	432 267 78 101 3,400 2,945
	3,910 3,313

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

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GLG Corp Limited
Notesto the financial report

7. Borrowings

Secured– at amortised cost Current Bank overdraft Bank loans (i) (ii) Trust receipts (i) (iii) (Gross) Bills payable (Gross) Finance lease liabilities Total Non-current Bank loans (i) (ii) Finance lease liabilities Disclosed in the financial statements as: Current borrowings Non-current borrowings	Consolidated
	2012 US$’000 2011 US$’000
	- 142 972 1,040 34,196 49,273 219 156 759 152
	35,543 51,366 - 1,000 317 460
	317 1,460
	35,543 51,366 317 1,460
	35,860 52,826

Summary of borrowing arrangements:

• (i) Secured by corporate guarantee from Ghim Li Group Pte Ltd and negative pledge over all assets of Ghim Li Global Pte Ltd.

• (ii) The non current borrowings consist of a term loan of US$972 thousand (2011: US$2,040 thousand) which is repayable by a reducing balance method of 48 monthly average installments of US$115 thousand (30 June 2011: US$115 thousand). The average effective interest rate charge is 5% per annum.

• (iii) Banking relationship: the Group is dependent on bank facilities to support the working capital requirement of its operations. Presently, the bank facilities provided to the Group are uncommitted short term trade financing facilities which are renewable annually by the banks. At 30 June 2012 GLG Corp Ltd had financing facilities available of US$118 million (US$57.9 million was used and US$60.1 million is unused). This is compared with US$108.5 million at 30 June 2011 (US$72.6 million was used and US$35.9 million was unused). GLG continued to have the strong support of its core banking relationship for its working capital requirements. GLG has largely completed the sourcing of additional bank facilities from Singapore based banks if there is a need to replace facilities from banks who because of capital and credit risk constraints, may limit or suspend their corporate lending business.

The Group has early adopted AASB 2012-3 “Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities” and AASB 2012-2 “Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities”. As a result of changes to these standards that include revising the criteria to enable offsetting of financial assets and financial liabilities, the trust receipts related to transactions with the GLIT group are no longer disclosed on a net, or offset, basis. The early adoption of these standards has also resulted in changes to the 2011 comparative balances to present them on a gross basis, consistent with 2012. There is no impact on the net assets or equity of the Group as a result of early adopting these standards. This change has only resulted in the receivables and payables related to the above arrangement being presented on a gross basis for both 30 June 2012 and 30 June 2011.

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

sheet date were as follows:
	2012	2011
Bank overdrafts	US prime rate	US prime rate
Bank loans	5.00%p.a.	5.02%p.a.
Trust receipts/ Bill payable	0.92% -1.75%	1.6%-2.25%
Finance lease liabilities	4.47%p.a.	4.94%p.a.

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GLG Corp Ltd
Notesto Appendix 4E for the Year Ended 30[th] June 2012

8. Issued capital

74,100,000 (2011: 74,100,000) fully paid ordinary shares	Consolidated 2012 US$’000 2011 US$’000 10,322 10,322

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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.

Fully paid ordinary shares Balance at beginning of financial year Balance at end of financial year	Consolidated No. ’000 2012 US$’000 74,100 10,322 74,100 10,322	Consolidated
		No. ’000 2011 US$’000
		74,100 10,322
		74,100 10,322

9. Earnings per share

Basic earnings per share: Total basic earnings per share Diluted earnings per share: Total diluted earnings per share Basic earnings per share	Consolidated
	2012 Cents per share 2011 Cents per share
	10.15 3.65
	10.15 3.65

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

Net profit Earnings used in the calculation of basic EPS Weighted average number of ordinary shares for the purposes of basic earnings per share	2012 US$’000 2011 US$’000
	7,524 2,705
	7,524 2,705
	2012 No.’000 2011 No.’000
	74,100 74,100

15

GLG Corp Limited
Notesto the financial report

9. Earnings per share (con’t)

Diluted earnings per share

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

Net profit Earnings used in the calculation of diluted EPS Weighted average number of ordinary shares used in the calculation of basic EPS Weighted average number of ordinary shares used in the calculation of diluted EPS	Consolidated
	2012 US$’000 2011 US$’000
	7,524 2,705
	7,524 2,705 Consolidated
	2012 No.’000 2011 No.’000
	74,100 74,100
	74,100 74,100

10. Dividends

Recognised amounts Fully paid ordinary shares Proposed final fully unfranked ordinary dividend	2012 Cents per share Total US$’000 - -	2011
		Cents per share Total US$’000
		- -

Unrecognised amounts

In respect of the financial year ended 30 June 2012, the Directors do not recommend the payment of dividend (2011: nil).

11. Contingent liabilities

Contingent liabilities Guarantees in lieu of commercial and statutory cash deposits Guarantees arising from Letters of credit in force Total	Consolidated
	2012 US$’000 2011 US$’000
	3,015 2,962 21,608 21,267
	24,623 24,229

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15

GLG Corp Ltd
Notesto Appendix 4E for the Year Ended 30[th] June 2012

12. Subsidiaries

Name of subsidiary		Ownership interest	Ownership interest
	Country of incorporation	2012 %	2011 %
Ghim Li Global Pte Ltd Singapore		100 100
Ghim Li Global International Ltd Hong Kong		100 100
Escala Fashion Pte. Ltd. Singapore		100 100
Ghim Li International (S) Pte Ltd Singapore		100 100

13. Investments accounted for using the equity method

Name of entity	Country of incorporation	Principal activity	Ownership interest	Ownership interest
			2012 %	2011 %
Jointly controlled entities JES Apparel LLC USA Importer of knitwear products			51 51

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

Financial position: Current assets Current liabilities Net assets Group’s share of jointly controlled entity’s net assets Financial performance: Income Expenses Total loss for investment in joint venture Group’s share of jointly controlled entity’s losses	Consolidated
	2012 US$’000 2011 US$’000
	393 777 1,879 2,044 (1,486) (1,267) (757) (646) 2,514 4,746 (2,628) (5,978) (114) (1,232) (58) (628)

The entity’s unrecognised share of losses for the period is US$58 thousand (2011: US$628 thousand). The entity’s cumulative unrecognised share of losses is US$694 thousand (2011: US$636 thousand).

17

GLG Corp Ltd
Notesto Appendix 4E for the Year Ended 30[th] June 2012

14. Notes to the cash flow statement

Reconciliation of profit for the year to net cash flows from operating activities

econciliation of profit for the year to net cash flows from operating activities
Profit for the year Gain on sale or disposal of non-current assets Impairment expenses Depreciation and amortisation of non-current assets Provision for doubtful debt Interest Income Increase/(decrease) in income tax Interest expenses Changes in net assets and liabilities, net of effects from acquisition and disposal of businesses: (Increase)/decrease in assets: Inventories Trade and other receivables Other assets Increase/(decrease) in liabilities: Trade and other payables Net cash from operating activities	Consolidated
	2012 US$’000 2011 US$’000
	7,524 2,705 (14) (3) - 2,000 620 387 - - (747) - (55) - - 781 (67) (14) 5,914 21,539 (44) (8) 597 (1, 719)
	13,728 25,668

15. 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.

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