Medi-Flex Limited : SECOND QUARTER RESULTS * FINANCIAL STATEMENT AND RELATED ANNOUNCEMENT

MEDI-FLEX LIMITED - ANNOUNCEMENT (Company Registration No. 200312754H)
UNAUDITED RESULTS FOR THE SECOND QUARTER ENDED 29 FEBRUARY 2012
PART 1 - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

The Company was incorporated on 12 December 2003 and listed on the Official List of the Singapore Exchange Securities Trading

Limited (the "SGX-ST") in November 2004.

These figures have not been audited.
1(a) (i) A statement of comprehensive income (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group Group
2Q2012 2Q2011 1H2012 1H2011

01/12/2011 to

01/12/2010 to

01/09/2011 to

01/09/2010 to

29/02/2012 28/02/2011 Change 29/02/2012 28/02/2011 Change

RM'000 RM'000 % RM'000 RM'000 % Revenue 40,869 32,535 26% 81,531 61,564 32% Cost of sales (38,529) (30,129)28% (76,635) (57,388)34% Gross profit 2,340 2,406 -3% 4,896 4,176 17% Other income 274 118 132% 627 309 103% Selling and distribution expenses (476) (542) -12% (993) (1,075) -8% General and administrative
expenses (1,190) (935) 27% (2,159) (1,398) 54% Share of profit of associate 110 331-67% 67 436-85% Profit before taxation 1,058 1,378 -23% 2,438 2,448 -0.4% Taxation - -- -
Profit after taxation 1,058 1,378 -23% 2,438 2.448 -0.4%
Foreign currency
translation (loss)/gain (14) (137)-90% 194 (64)N/M
Total comprehensive income 1,044 1,241 -16% 2,632 2,384 10%
Profit attributable to:
Equity holders of the Company 1,058 1,378 -23% 2,438 2,448 -0.4%
N/M Not Meaningful

Page 1 of 10

(a)(ii) The net profit attributable to shareholders includes the following (charges) / credits.

Group Group

2Q2012 2Q2011 1H2012 1H2011

01/12/2011 to

01/12/2010 to

01/09/2011 to

01/09/2010 to

29/02/2012 28/02/2011 Change 29/02/2012 28/02/2011 Change

RM'000 RM'000 % RM'000 RM'000 %

Depreciation of property, plant

and equipment (2,011) (1,579) 27% (4,006) (3,409) 18%

Amortisation of land use rights (21) (21) 0% (42) (42) 0% Net foreign exchange (loss)/gain (25) 30 N/M 184 50 268% Interest income 52 54 -4% 91 106 -14%

(Loss)/Gain on disposal of

property, plant and equipment - (17) N/M - 37 N/M

Write off of property,

plant and equipment - (1) N/M - (2) N/M

N/M Not Meaningful

Page 2 of 10

1(b) (i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

Non-current assets

Group Company As At As At As At As At

29/02/12 31/08/11 29/02/12 31/08/11

RM'000 RM'000 RM'000 RM'000

Property, plant and equipment 52,078 53,803 - - Land use rights 6,265 6,307 - - Investments in subsidiaries - - 57,097 59,913

Investment in associate 6,418 6,157 5,392 5,392

Current assets

Inventories 11,113 12,222 - - Trade and other receivables 3,152 5,520 - - Amount due from immediate holding

company 7,540 8,971 - -

Amount due from a related company 1,112 263 - - Prepayments 473 308 3 11

Tax Recoverable 25 33 - - Cash and bank equivalents 9,714 5,858 190 62

33,129 33,175 193 73

Current liabilities

Trade and other payables 16,294 18,210 446 537

Net current assets/(liabilities) 16,835 14,965 (253) (464)

Net assets 81,596 81,232 62,236 64,841

Equity attributable to equity holders of the company

Share capital 115,360 115,360 115,360 115,360

Merger deficits (471) (471) - - Accumulated losses (33,634) (33,804) (53,124) (50,519)

Foreign currency translation reserve 341 147 - -

Total equity 81,596 81,232 62,236 64,841

1(b) (ii) Aggregate amount of group's borrowings and debt securities
Not applicable

Page 3 of 10

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

Group Group

2Q2012 2Q2011 1H2012 1H2011

01/12/2011 to

01/12/2010 to

01/09/2011 to

01/09/2010 to

CASH FLOWS FROM OPERATING ACTIVITIES

29/02/2012 28/02/2011 29/02/2012 28/02/2011

RM'000 RM'000 RM'000 RM'000

Profit before taxation 1,058 1,378 2,438 2,448

Adjustments for:-

Depreciation of property, plant and equipment 2,011 1,579 4,006 3,409

Amortisation of land use rights 21 21 42 42

Interest income (52) (54) (91) (106) Share of profit of associate (110) (331) (67) (436)

Unrealised foreign exchange loss/(gain) 56 (12) 46 183

Loss/(gain) on disposal of property, plant and

equipment - 17 - (37)

Write-off of property, plant and equipment -1-2

Operating cash flows before working capital changes 2,984 2,599 6,374 5,505

Decrease/(Increase) in inventories 234 (1,720) 1,109 (2,313) (Increase)/Decrease in receivables (38) (2,749) 2,077 (617) Increase/(Decrease) in payables 1,929(110)(1,836)(928)

Cash flows generated from/(used in) operations 5,109 (1,980) 7,724 1,647

Tax refund/(paid) 23 (4) 8 (9) Interest received 525491106

Net cash flows generated from/(used in)operating activities 5,184(1,930)7,8231,744

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (1,366) (1,030) (2,281) (3,668) Proceeds from disposal of property, plant and equipment -67-354

Net cash flows used in investing activities (1,366)(963)(2,281)(3,314)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid on ordinary shares (2,268) - (2,268) - (Decrease)/Increase in amount due to holding/

related companies (2,488)(2,507)582(2,623)

Net cash flows used in financing activities (4,756)(2,507)(1,686)(2,623)

NET (DECREASE)/INCREASE IN CASH AND CASH

EQUIVALENTS (938) (5,400) 3,856 (4,193)

CASH AND CASH EQUIVALENTS AT BEGINNING

OF THE FINANCIAL PERIOD 10,652 10,675 5,858 9,468

CASH AND CASH EQUIVALENTS AT END

OF THE FINANCIAL PERIOD 9,714 5,275 9,714 5,275

Page 4 of 10

1(d)(i) A statement (for the issuer and group), showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

Group

Balance at 1 September 2011	115,360	(471)	(33,804)		147	81,232
Total comprehensive income for the period	-	-	1,380		208	1,588
Balance at 30 November 2011 and 1 December 2011	115,360	(471)	(32,424)		355	82,820
Dividends paid on ordinary shares Total comprehensive income for the period	- - (2,268) - - 1,058		- (2,268) (14) 1,044
Balance at 29 February 2012	115,360 (471) (33,634)		341 81,596

Balance at 1 September 2010	115,360		(471)		(38,905)		254		76,238
Total comprehensive income for the period	-		-		1,070		73		1,143
Balance at 30 November 2010 and 1 December 2010	115,360		(471)		(37,835)		327		77,381
Total comprehensive income for the period	-		-		1,378		(137)		1,241
Balance at 28 February 2011	115,360		(471)		(36,457)		190		78,622

Page 5 of 10

Company

Share	Accumulated	Total
capital	losses	Equity
RM'000	RM'000	RM'000

Balance at 1 September 2011	115,360	(50,519)		64,841
Total comprehensive loss for the period	-	(164)		(164)
Balance at 30 November 2011 and 1 December 2011	115,360	(50,683)		64,677
Dividends paid on ordinary shares	- (2,268)		(2,268)
Total comprehensive loss for the period	- (173)		(173)
Balance at 29 February 2012	115,360 (53,124)		62,236

Balance at 1 September 2010	115,360		(53,129)		62,231
Total comprehensive loss for the period	-		(171)		(171)
Balance at 30 November 2010 and 1 December 2010 Total comprehensive loss for the period	115,360 -		(53,300) (147)		62,060 (147)
Balance at 28 February 2011	115,360		(53,447)		61,913

Page 6 of 10

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash, or as consideration for acquisition or for any other purpose since the end of the previous year reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial year reported on and as the end of the corresponding period of the immediately preceding financial year.
Not applicable.
1(d) (iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediate preceding financial year.
Total number of ordinary shares issued
As at
29/02/2012
As at
31/08/2011
and fully paid 928,676,208 928,676,208
1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial year reported on.
Not applicable
2 Whether the figures had been audited or reviewed by the company's auditors, and in accordance with which auditing standard or practice.
The figures have not been audited or reviewed by the company's auditors.
3 Where the figures had been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter)
Not applicable.
4 Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statement had been applied.
The Group has applied the same accounting policies and method of computation in the financial statements for the current financial period compared with those of audited financial statements as at 31
August 2011, save for the revised Singapore Financial Reporting Standards ("FRS") referred to in paragraph 5 below.
5 If there are any changes in the accounting policies and method of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
The significant accounting policies adopted are consistent with those of the audited financial statements for the financial year ended 31 August 2011.
6 Earnings per ordinary share of the group for the current financial year reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

Profit per share (EPS) in sen

Group Group Group Group

2Q2012 2Q2011 1H2012 1H2011

I) Basic 0.11 0.15 0.26 0.26

II) On a fully diluted basis 0.11 0.15 0.26 0.26

Page 7 of 10

7 Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:-
(a) current financial year reported on; and
(b) immediately preceding financial year
Net asset per
Group Group Company Company
As At As At As At As At
29/02/2012 31/08/2011 29/02/2012 31/08/2011
share in sen 8.79 8.75 6.70 6.98
8 A review of the performance of the Group, to the extent necessary for a reasonable understanding of the Group's business. It must include a discussion of the following:-
(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial year reported on, including (where applicable) seasonal or cyclical factors;
and
(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial year reported on.
i) Statement of Comprehensive Income Review
The Group's revenue for the 6 months ("1H2012") and 3 months ("2Q2012") ended 29 Feb
2012 increased by 32% to RM81.53 million and 26% to RM40.87 million respectively. The increase in revenue was largely contributed by higher nitrile sales volume as a result of greater demand. This was in line with the Group's expansion plan to increase the utilization of nitrile production lines.
As compared to the corresponding period of last year, the Group's profit before taxation
("PBT") reduced by 0.4% to RM2.44 million for 1H2012 and 23% to RM1.06 million for
2Q2012. This reduction is due to higher nitrile raw material price, time lag between cost and price revisions and more competitive selling price which had contracted our profit
margin. The average nitrile prices rose by 13% (from USD1.42/kg in 2Q2011 to USD1.61/kg
in 2Q2012).
The Group's other income increased primarily derived from higher scrap sales arising from the implementation of 3R project.
General and administration expenses increased as the result of the reversal of an over provision of professional fees in 1H2011 and increase in IT upgrading expenses in 2Q2012.
The Group's PBT was also impacted by the lower contribution from the associate, Sonic Clean Pte Ltd which resulted in the share of profit reduced by RM0.37 million for 1H2012 and RM0.22 million for 2Q2012.
ii) Statement of Financial Position Review
Investment in an associate increased by RM0.26 million, arising from the foreign exchange translation gain of RM0.19 million and share of profit of RM0.07 million in 1H2012.
The reduction in the balances of inventories, trade receivables and trade payables was primarily due to better working capital management coupled with a fall in natural latex prices in 2Q2012.
The Group's cash and cash equivalents improved by RM3.86 million due to positive cash generated from operating activities.

Page 8 of 10

iii) Material Litigation Review
The Company, its subsidiaries and associate are not engaged in any material litigation, either as a plaintiff or defendant, which has a material effect on the financial position of the Company, its subsidiaries and associate, and the Directors are not aware of any proceedings pending or threatened or of any fact likely to give rise to any proceedings which might adversely affect the position or business of the Company, its subsidiaries or associate.
9 Where a forecast, or a prospect statement, had been previously disclosed to shareholders, any variance between it and the actual results.
No forecast has been made. With reference to item 10 of the Company's announcement in relation to its financial results of the first quarter ended 30 November 2011 ("Q1 Announcement"), there had been no significant variance between the prospect statement disclosed in the Q1 Announcement and the actual results.
10 A commentary at the date of the announcement of the significant trends and the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
With the increasing awareness of healthcare and hygiene in the developed countries, the world gloves demand will continue to remain strong and robust. Furthermore, gloves are a necessity for the healthcare industry. The Group will optimise its production capacity to meet the gloves demand and to reap the benefit of economies of scale.
The Group will continue to expand new and advanced production lines to reduce the lead time to meet the market demand. Sixteen new production lines with additional capacity to produce 1.5 billion pieces of gloves per annum are targeted to complete by February 2013.
We expect the increase of raw material prices will continue to pose challenges to the Group. However, the Group revises its selling price regularly to reflect the increasing cost by passing part of the cost to the customers.
Another key challenge is the anticipated increase in competition of nitrile gloves manufacturers that impact our profit margin. To mitigate the negative impact, the Group will intensify its research & development by conducting in-depth study with professional team and aggressively implementing cost saving projects.
11. Interim or final dividend is recommended during the financial period.
No interim dividend has been declared in 2Q2012.
The dividend payment for previous financial years were as follow:-

Financial Year	Net Dividend per share SGD (cent)	Total Dividend SGD	Status
2011	0.1	928,676.27	Paid

12 If no dividend has been declared (recommended), a statement to that effect.
No interim dividend has been declared in 2Q2012.

Page 9 of 10

13 If the group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1) (a) (ii). If no IPT mandate has been obtained, a statement to that effect.
The group has obtained a general mandate from shareholders for the following IPTs:
Aggregate value of all Aggregate value of all interested person interested person transactions (excluding transactions conducted transactions less than under shareholders'
$100,000 and transactions mandate pursuant to Rule conducted under a 920 (excluding transaction
shareholders' mandate less than $100,000)
pursuant to Rule 920)
01/12/2011 01/12/2010 01/12/2011 01/12/2010 to to To to
Name of interested 29/02/2012 28/02/2011 29/02/2012 28/02/2011
person: RM'000 RM'000 RM'000 RM'000

Top Glove Group Nature of Transaction
a. Purchase of Products	- - 4,452	612
b. Sale of Products	- - 22,609	20,431
c. Purchase of Raw Materials and Consumables	- - -	5,390

14 Confirmation pursuant to the Rule 705(5) of the Listing Manual Section B: Rules of Catalist
On behalf of the Board of Directors of the Company, we, the undersigned, hereby confirm to the best of our knowledge that nothing has come to the attention of the Board of Directors of the Company which may render the financial statements for the second quarter ended 29 February 2012 to be false or misleading in any material aspect.
BY ORDER OF THE BOARD
Lee Kim Meow Lim Cheong Guan
Managing Director Executive Director
This announcement has been prepared by the Company and reviewed by the Company's sponsor, CNP Compliance Pte. Ltd. ("Sponsor"), for compliance with the Singapore Exchange Securities Trading Limited ("SGX-ST") Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this announcement including the accuracy or completeness of any of the information disclosed or the correctness of any of the statements or opinions made or reports contained in this announcement. This announcement has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this announcement including the correctness of any of the statements or opinions made or reports contained in this announcement.
The contact person for the Sponsor is Ms Elaine Beh at 36 Carpenter Street, Singapore 059915, telephone: [phone]; email: [e-mail]

Page 10 of 10