GLG CORP LTD — Interim / Quarterly Report 2012

Feb 28, 2012

GLG Corp Ltd

ACN 116 632 958 Results for Announcement to the Market Appendix 4D – Half Year Report Given to ASX under Listing Rule 4, 2A

Current Reporting Period - Half Year Ended 31[st] December 2011 Previous Reporting Period - Half Year Ended 31[st] December 2010

1. Highlight of Results

1. Appendix 4D Financial Statements for the Half Year ended 31 December 2011

1. Results for announcement to market

Summary financial information for the company for the six months ended 31[st] December 2011. Full financial details are attached to this announcement.

		Consolidated
Summary Information	31 –DEC-11 USD$’000	31 –DEC-10 USD$’000	Inc/(Dec) USD$’000	Inc/(Dec) %
Revenue from Ordinary Activities	129,154	113,497	15,657	13.8%
Profit/(Loss) after Tax from Ordinary Activities	4,263	1,298	2,965	228.4%
Net Profit/(Loss) after Tax Attributable to Members	4,263	1,298	2,965	228.4%
Basic Earnings – US Cents Per Share	5.75	1.75	4.00	228.4%
Diluted Earnings – US Cents Per Share	5.75	1.75	4.00	228.4%
Net Tangible Assets – US Cents Per Share	56.74	49.08	7.66	15.6%

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

Summary commentary on results

Directors Comments:

GLG Corp Ltd’s (“GLG”) net profit increased by US$2,965 thousand, or 228.4% to US$4,263 thousand, against a net profit of US$1,298 thousand for the corresponding period in 2010. The increase was due to lower finance costs and higher gross profit margin generated.

GLG’s sales increased by US$15,657 thousand, or 13.8% to US$129,154 thousand compared to sales of US$113,497 thousand in the corresponding period of 2011. The increase in sales was mainly attributed to higher Freight On Board “FOB” unit prices and larger orders from existing and new customers.

GLG’s gross profit was US$14,688 thousand compared to a gross profit of US$8,514 thousand for the corresponding period of 2010. Gross margin increased to 11.4% as compared to 7.5% for the corresponding period of 2010 was largely attributed to lower cotton prices and higher FOB unit prices.

Administrative expenses increased by US$510 thousand, or 8.5% to US$6,502 thousand compared to US$5,992 thousand for the corresponding period of 2010. The increase was mainly due to higher manpower costs as to meet increased demand from customers.

Other expenses increased by US$3,321 or 510.1% to US$3,972 thousand compared to US$651 thousand for the corresponding period of 2010. This is due to foreign exchange losses incurred on forward currency contracts.

Finance costs were reduced to US$364 thousand or 57.2% compared to US$852 thousand for the corresponding period in 2010. The decrease was due to lower interest rates.

The discussion that follows compares the Consolidated Statement of Cash flows for the six months to 31 December 2011 with that of 31 December 2010

GLG’s cash from operating activities increased an inflow of US$8,567 thousand for the half year ended 31 December 2011 compared to an inflow of US$136 thousand for the half year ended 31 December 2010. The increase in the cash flow from operating activities was mainly due to higher revenue, and improvement in cash management and collection efficiency.

We believe the 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 Ltd

ACN 116 632 958 Financial report for the half-year ended 31 December 2011

GLG Corp Limited

Financial report for the halfyear ended 31 December 2011

011
		Page
Directors’ report		3
Auditor’s independence declaration		5
Independent auditor’s report		6
Directors’ declaration		8
Condensed consolidated statement of comprehensive		9
income
Condensed consolidated statement of financial position		10
Condensed consolidated statement of changes in equity		11
Condensed consolidated statement of cash flows		12
Notes to the condensed consolidated	financial	13
statements

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GLG Corp Limited Directors’ Report

Directors’ report

The Directors of GLG Corp Ltd (“GLG”) submit herewith the financial report of GLG Corp Ltd and its subsidiaries for the half-year ended 31 December 2011. In order to comply with the provisions of the Corporations Act 2001 , the Directors report as follows:

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

Estina Ang Suan Hong	Executive Chairman
Christopher Chong Meng Tak	Independent Director
Ernest Seow Teng Peng	Independent Director
Thongviboon	Independent Director
Yong Yin Min	Director
Surina Gan Meng Hui	Director

Review of operations

GLG Corp Ltd’s (“GLG”) net profit increased by US$2,965 thousand, or 228.4% to US$4,263 thousand, against a net profit of US$1,298 thousand for the corresponding period in 2010. The increase was due to lower finance costs and higher gross profit margin generated.

GLG’s sales increased by US$15,657 thousand, or 13.8% to US$129,154 thousand compared to sales of US$113,497 thousand in the corresponding period of 2011. The increase in sales was mainly attributed to higher Freight On Board “FOB” unit prices and larger orders from existing and new customers.

GLG’s gross profit was US$14,688 thousand compared to a gross profit of US$8,514 thousand for the corresponding period of 2010. Gross margin increased to 11.4% as compared to 7.5% for the corresponding period of 2010 was largely attributed to lower cotton prices and higher FOB unit prices.

Administrative expenses increased by US$510 thousand, or 8.5% to US$6,502 thousand compared to US$5,992 thousand for the corresponding period of 2010. The increase was mainly due to higher manpower costs as to meet increased demand from customers.

Other expenses increased by US$3,321 or 510.1% to US$3,972 thousand compared to US$651 thousand for the corresponding period of 2010. This is due to foreign exchange losses incurred on forward currency contracts.

Finance costs were reduced to US$364 thousand or 57.2% compared to US$852 thousand for the corresponding period in 2010. The decrease was due to lower interest rates.

The discussion that follows compares the Consolidated Statement of Cash flows for the six months to 31 December 2011 with that of 31 December 2010

GLG’s cash from operating activities increased an inflow of US$8,567 thousand for the half year ended 31 December 2011 compared to an inflow of US$136 thousand for the half year ended 31 December 2010. The increase in the cash flow from operating activities was mainly due to higher revenue, and improvement in cash management and collection efficiency.

We believe the 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.

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GLG Corp Limited

Directors’ Report

Auditor’s independence declaration

The auditor’s independence declaration is included on page 5 of the half-year report.

Rounding off of amounts

The company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

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

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GLG Corp Limited Director’s declaration

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Deloitte Touche Tohmatsu ABN 74 490 121 060

ANZ Centre Level 9 22 Elizabeth Street Hobart TAS 7000 GPO Box 777 Hobart TAS 7001 Australia

DX 197 Tel: +61 (0) 3 6237 7000 Fax: +61 (0) 3 6237 7001 www.deloitte.com.au

The Board of Directors GLG Corp Ltd Level 40 North Point 100 Miller Street NORTH SYDNEY NSW 2060

28 February 2012

Dear Board Members

GLG Corp Ltd

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of GLG Corp Ltd.

As lead audit partner for the review of the financial statements of GLG Corp Ltd for the halfyear ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

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DELOITTE TOUCHE TOHMATSU

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Rod Whitehead

Partner

Chartered Accountant Deloitte Touche Tohmatsu ABN 74 490 121 060

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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GLG Corp Limited Director’s declaration

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Deloitte Touche Tohmatsu ABN 74 490 121 060

ANZ Centre Level 9 22 Elizabeth Street Hobart TAS 7000 GPO Box 777 Hobart TAS 7001 Australia

DX 197 Tel: +61 (0) 3 6237 7000 Fax: +61 (0) 3 6237 7001 www.deloitte.com.au

Independent Auditor’s Review Report to the members of GLG Corp Ltd

We have reviewed the accompanying half-year financial report of GLG Corp Ltd, which comprises the condensed statement of financial position as at 31 December 2011, and the condensed statement of comprehensive income, the condensed statement of cash flows and the condensed statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 8 to 15.

Directors’ Responsibility for the Half-Year Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of GLG Corp Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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GLG Corp Limited Director’s declaration

Auditor’s Independence Declaration

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of GLG Corp Ltd, would be in the same terms if given to the directors as at the time of this auditor’s review report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of GLG Corp Ltd is not in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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DELOITTE TOUCHE TOHMATSU

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Rod Whitehead Partner Chartered Accountants Hobart, 28 February 2012

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GLG Corp Limited Director’s declaration

Directors’ declaration

The Directors declare that:

• (a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

• (b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 , including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

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

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GLG Corp Limited Condensed consolidated statement of comprehensive income

Condensed consolidated statement of comprehensive income for the half-year ended 31 December 2011

Continuing Operations Revenue Cost of sales Gross profit Other income Distribution expenses Administration expenses Finance costs Other expenses Profit before income tax expense Income tax expense Profit for the period Other comprehensive income Total comprehensive income for the period Earnings per share: From continuing and discontinued operations: Basic (cents per share) Diluted (cents per share) From continuing operations: Basic (cents per share) Diluted (cents per share)	Consolidated
	Half-year ended
	31 Dec 2011 US$’000 31 Dec 2010 US$’000
	129,154 113,497 (114,466) (104,983)
	14,688 8,514 1,610 1,330 (724) (762) (6,502) (5,992) (364) (852) (3,972) (651)
	4,736 1,587 (473) (289)
	4,263 1,298
	- -
	4,263 1,298
	5.75 1.75 5.75 1.75 5.75 1.75 5.75 1.75

Notes to the financial statements are included on pages 13 to 15

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GLG Corp Limited Condensed consolidated statement of financial position

Condensed consolidated statement of financial position as at 31 December 2011

Note Current assets Cash and cash equivalents Trade and other receivables 3(a) Inventory Other assets Total current assets Non-current assets Other financial assets Property, plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Other financial liabilities 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	Consolidated
	31 Dec 2011 US$’000 30 Jun 2011 US$’000
	9,502 10,439 24,245 31,313 254 19 345 235
	34,346 42,006
	15,400 16,557 1,125 1,274
	16,525 17,831
	50,871 59,837
	4,220 3,313 1,598 - 1,167 16,169 939 1,026
	7,924 20,508
	815 1,460 87 87
	902 1,547
	8,826 22,055
	42,045 37,782
	10,322 10,322 31,723 27,460
	42,045 37,782

Notes to the financial statements are included on pages 13 to 15

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GLG Corp Limited Condensed consolidated statement of changes in equity

Condensed Consolidated Statement of changes in equity for the financial year ended 31 December 2011

Consolidated Balance at 1 July 2010 Profit for the period Balance at 31 December 2010 Balance at 1 July 2011 Profit for the period Balance at 31 December 2011	Issued Capital Share based payment Reserves Financial Guarantee Reserves Retained Profits Total US$’000 US$’000 US$’000 US$’000 US$’000
	10,322 - - 24,755 35,077 - - - 1,298 1,298
	10,322 - - 26,053 36,375
	10,322 - - 27,460 37,782 - - - 4,263 4,263
	10,322 - - 31,723 42,045

Notes to the financial statements are included on pages 13 to 15

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GLG Corp Limited Condensed cosolidated statement of cash flow

Condensed consolidated statement of cash flows for the half-year ended 31 December 2011

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 Cash flows from investing activities Repayment of related party loan Payment for property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash (used in) investing activities Cash flows from financing activities (Repayment) of /additional borrowings Amounts advanced to other parties Amounts advanced to related parties Net cash provided by/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period Cash and cash equivalents at the end of the financial period	Consolidated
	Half-year ended
	31 Dec 2011 US$’000 31 Dec 2010 US$’000
	123,613 108,883 (114,373) (107,612) (119) (440) (554) (695)
	8,567 136
	(633) - (60) (269) - 32
	(693) (237)
	(8,692) 10,937 (11,149) 3,282 11,030 (9,985)
	(8,811) 4,234
	(937) 4,133 10,439 2,031
	9,502 6,164

Notes to the financial statements are included on pages 13 to 15

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GLG Corp Limited Notes to the condensed consolidated financial statements

Notes to the condensed consolidated financial statements

1. Significant accounting policies

Statement of compliance

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

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in United States dollars, unless otherwise noted.

The company is a company of the kind referred to in ASIC Class Order 80/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company’s 2011 annual financial report for the financial year ended 30 June 2011, except for the impact of the new and revised Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

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

There are no new and revised Standards and amendments thereof and Interpretations effective for the current reporting period that are relevant to the Group.

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group’s accounting policies and has no effect on the amounts reported for the current or prior periods. The new and revised Standards and Interpretations has not had a material impact and not resulted in changes to the Group’s presentation, or disclosure in, its half-year financial statements.

2. Segment information

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

GLG operates in the apparel industry and reports only one reportable segment under AASB 8 “Operating Segments”.

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GLG Corp Limited Notes to the condensed consolidated financial statements

3 Disclosure of additional information

.

(a) Trade receivables

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

As at	31 December 2011	30 June 2011
	US$’000	US$’000
Trade receivables
Third parties (i)	20,137	19,843
Other party–GLIT group (ii)	43,466	36,364
Related parties (ii)	4,330	15,360
Other receivables	1,342	1,422
Allowance for doubtful debts	(2,392)	(2,125)
Subtotal	66,882	70,864
Less:
Payable to other party-GLIT group (ii)	(1,034)	(4,401)
Bills payable (i)	(484)	(759)
Trust receipts related to other party-GLIT group (ii)	(41,136)	(33,018)
Trust receipts related to related parties (ii)	-	(1,420)
Subtotal	24,228	31,266
Goods and services tax recoverable	17	47
Total Trade and other receivables	24,245	31,313

• 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 the letter 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 Group (GLIT Holdings Pte Ltd and controlled subsidiaries) and Related Parties offsets: Presently and reflected in the Statement of Financial Position at 30 June 2011 when Other Party - GLIT Group 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 Group 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.

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GLG Corp Limited Notes to the condensed consolidated financial statements

(b) Borrowings

As at 31 December 2011

US$	within 1 year US$’000	within 1 to 5 years US$’000	After 5 years US$’000
Trustreceipts	41,136	-	-
Bills payable	484	-	-
Bankoverdraft	-	-	-
Loansfrom:
Term loan(i) (ii)	1,014	437	-
Financeleaseliabilities	153	378	-

As at 30 June 2011

US$	within 1 year US$’000	within 1 to 5 years US$’000	After 5 years US$’000
Trustreceipts	49,273	-	-
Bills payable	759	-	-
Bankoverdraft	142	-	-
Loansfrom:
Term loan(i) (ii)	1,040	1,000	-
Financeleaseliabilities	152	460	-

(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$437 thousand (30 June 2011: US$1,000 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.

4. Contingent Liabilities

ngent Liabilities
Guarantees in lieu of commercial and statutory cash deposits Guarantees arising from letters of credit in force Total	31 December 2011 30 June 2011 US$’000 US$’000 2,819 2,962 15,384 21,267
	18,203 24,229

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