PPK GROUP LIMITED — AGM Information 2009

Nov 23, 2009

36 computer road, yatala, queensland 4207

Tel: 61 (7) 3297 4444 ◙ Fax: 61 (7) 3297 4455

__________________________________________________________________________

20 November 2009

Company Announcements Office Australian Securities Exchange Limited

FOR IMMEDIATE RELEASE TO THE MARKET

CHAIRMAN'S ADDRESS 2009 ANNUAL GENERAL MEETING

The performance of Cool or Cosy Limited ("Cool or Cosy") in the 2009 financial year was significantly impacted by difficult trading conditions presented by a combination of factors, including the:

• global financial crisis impacting the Australian economic climate resulting in reduced demand for its products and services;
• significant reduction in the value of the Australian Dollar relative to the US Dollar which contributed to increases in the cost of goods and materials imported from overseas;
• an inability to recover the full impact of increases in the cost of imported goods and materials from customers as quickly as they were imposed on Cool or Cosy due to prevailing market and economic conditions;
• sustained and aggressive pricing on air conditioning products by major retailers and suppliers; the effect of which was to hamper the sales of the Company's products; and
• continued poor performance of the Company's Western Australian operations.

Consequently, the Company recorded a consolidated loss after tax of $1.986 million for the 2009 financial year.

The overall impact of the factors influencing performance in the 2009 year, however, was partially offset by positive signs of improvement in operating performance in Queensland, particularly in the second half of the reporting period and in spite of the continuation of the adverse economic climate during that half year.

Some of the positive signs of improvement compared to the previous financial year included:

• overall gross operating margins increased by 7%;
• Administration Expenses reduced by $2 million (or 45.3%); and
• the recorded consolidated loss after tax reduced from $2.8 million to $1.9 million representing an improvement of $900,000.

These positive outcomes are considered to reflect the efforts being made to reduce costs; improve operational efficiencies and productivity; and implement appropriate strategic initiatives.

The positive impact of these initiatives is expected to be maintained in respect of future periods.

Western Australia

Despite the implementation of restructuring and strategic growth initiatives during the 2009 financial year, the Western Australian business continued to underperform during the period after reporting an after tax loss of $629,000 compared to a loss of $32,000 in the prior year.

The performance of this business provided an unacceptable level of return to the Company.

Consequently, the Board determined that it was appropriate to dispose of the cellulose fibre business assets and effect a closure of its air conditioning business in Western Australia.

This process was completed in May 2009.

General

The closure of the Western Australian business in the latter stages of the 2009 financial year has allowed management to focus on, and allocate resources to, the pursuit of:

• the continued growth of its successful cellulose fibre insulation manufacturing and installation business in Queensland;
• develop new markets for supply of wholesale insulation;
• new strategies for improving its share of the retail and wholesale market for domestic air conditioners; and
• on going development and commercialisation of its innovative and patented energy saving heat storage technology on a national and global platform.

Business Outlook

As detailed in a Performance Update released to the market on 19 October 2009, Cool or Cosy has continued its performance improvement into the first quarter of the current financial year by delivering a profit before tax of $935,000 compared to a loss of $453,000 in the previous corresponding period: a profit improvement of $1.4 million.

By way of further update, the Board is pleased to advise that this positive performance has continued into the second quarter with a consolidated profit before tax of $424,000 being achieved in October 2009 compared to a loss of $182,000 in the same month last year.

This brings the year to date profit before tax to $1.359 million: an improvement of $2.006 million compared to the previous corresponding period.

This pleasing performance has been due to continued improvements in cost containment, operational efficiencies and productivity, the closure of the Western Australian business and the commencement of the main phase of the Federal Government's Home Insulation Program.

Insulation

The Federal Government recently announced changes to the Home Insulation Program with effect from 2 November 2009.

Cool or Cosy:

• is a quality assured company which operates a quality management system in compliance with ISO9001:2008 certification and has welcomed these changes particularly in the regulatory areas relating to safety and work practices;
• remains committed to the safe and effective installation of its insulation products and to the changes to industry practice under the new Home Insulation Program Guidelines; and
• considers that the changes to the program should limit the number of unsafe installations that have emerged in the industry following the introduction of the program and will ensure that both the homeowner and the Federal Government obtain fair value under the scheme.

The changes also announced a reduction in the rebate paid for insulation under the program from $1,600 to $1,200 per home. The Company has assessed the potential impact of this change on its anticipated future performance and, based on information currently available, considers that the reduction is unlikely to have a material impact on its overall performance.

Air Conditioning

Orders for air conditioners have been improving over the last two months of the current year after a slow start and with new models available (including an inverter range), availability of stock to meet the new energy efficiency standards prevailing in its core Queensland market, and the development of new markets, Cool or Cosy is confident that this segment of its business will improve its contribution to the overall performance of the company in the current reporting period.

Energy Saving Heat Storage Technology

In July 2009, Cool or Cosy submitted an application to the office of Renewable Energy Regulator ("ORER") for the inclusion of its solar hot water system products, using its patented energy saving technology, on the register of energy efficient solar hot water systems.

Following recent advice from ORER the Company expects to receive formal notification of the outcome of its application by the end of November 2009.

In the meantime, the Company is in the process of:

• preparing for the commencement of comprehensive field trials of its first product; these trials will commence in late November 2009 and be subject to independent testing;
• exploring a range of commercialisation opportunities within Australia and overseas; and
• preparing additional applications to ORER relating to subsequent iterations of product arising from the Company owned and patented inventions.

Future Direction

Cool or Cosy will focus on the realisation of:

• the potential impact of the changes to the Homeowners Insulation Program on overall company performance for the duration of the Federal Government scheme;
• benefits from its strategic initiatives implemented during the 2009 year;
• commercialisation of its patented energy saving heat storage inventions; and
• identification of other opportunities for the long term growth of the business with the objective of delivering long term improvements in overall business performance and shareholder value.

The positive performance achieved in the first 4 months of this financial year; the absence of any bank debt; convertible notes amounting to $4.185 million at a fixed interest rate of 10% and not due for repayment until last quarter of 2012; unrecognised carried forward tax losses of approximately $2.5 million; strong cash flow generation evidenced by an increase in cash of $760,000 in the first quarter; the continuing impact of the Home Insulation Program; and the impending commercialisation of the Company's energy saving heat storage technology inventions, are all expected to deliver further improvements in the Company's overall performance in future reporting periods.

David Hoff Chairman