PPK GROUP LIMITED — AGM Information 2010

Nov 22, 2010

==> picture [102 x 57] intentionally omitted <==

ABN: 65 003 964 181

SUITE 3, LEVEL 2, 668 PRINCES HWY, KIRRAWEE NSW 2232

PO BOX 3006, KIRRAWEE DELIVERY CENTRE NSW 2232

TEL: 61 (2) 9521 8444 ◙ FAX: 61 (2) 9521 4561

23 November 2010

Company Announcements Office Australian Securities Exchange Limited

For Release to the Market

Dear Sir or Madam

Chairman’s Address

I would like to take this opportunity of welcoming shareholders to this Annual General Meeting and will now present my address commencing with an overview of the performance of PPK in the 2010 financial year.

PPK Group Limited (“PPK”) reported a profit of $0.762 million after tax for the year ended 30 June 2010.

The 2010 year result:

• compares to a $0.540 million profit after tax in 2009; and

• equates to earnings per share of 1.3 cents for the period (FY2009: 0.9 cents).

The PPK results for the 2010 year include:

• realised gains of $1.022 million on the disposal of shares held by PPK as investments in selected listed companies;

• a profit of $2.184 million on the sale in November 2009 of an investment property located in Virginia, Queensland;

• non-cash write downs:

• required under AIFRS Accounting Standards of $0.320 million in the value of listed shares and derivatives held by PPK as at 30 June 2010; and

==> picture [62 x 34] intentionally omitted <==

• of $1.15 million in the value of the investment property located at Arndell Park, New South Wales (“Arndell Park Property”), following an independent market valuation undertaken in June 2010; and

• a $684,000 non-cash share of losses by Cool or Cosy Limited (COS) and Frigrite Limited (FRR) inclusive of impairments in the value of investments in these two companies.

Property

Despite the non-cash write down in the value of the Arndell Park Property, all other properties owned by PPK have been independently assessed at values which are greater than the historical cost of these assets recorded on the Company’s Balance Sheet.

In November 2009, PPK sold its industrial property at Virginia in Queensland for $5.2 million. This property had been vacant since August 2009.

The Arndell Park Property remains vacant with the tenant having vacated the premises on 31 August 2009. Litigation continued during the year between PPK and the former tenant.

The lease dispute in relation to the Arndell Park property was settled in October 2010 on confidential terms commercially acceptable to PPK. PPK will receive damages payments arising from settlement of the dispute of approximately $1.52 million after write-backs and adjustments.

Industrial properties owned by PPK at Seven Hills in New South Wales and Dandenong South in Victoria remained fully tenanted throughout the year and are expected to remain so during the 2011 financial year.

In October 2010, PPK completed the sale of its property located at Kirrawee in New South Wales for a price of $8.25 million. The sales price obtained by PPK represents a profit before tax of approximately $1.45 million.

As the Kirrawee property was unencumbered, PPK retained the full sale proceeds and will hold these funds for future investment purposes.

Investments

PPK has increased its shareholding in COS to 23.34% and FRR to 33.9%. Each of these companies is now considered to be an ‘associate’ of PPK for financial reporting purposes; in the case of the COS from 29 October, 2009 and in respect of FRR from 26 August, 2009.

The carrying value of PPK's investments in FRR and COS was restated at the time each of FRR and COS became an ‘associate’ of PPK. This gave rise to a one-off non- cash investment gain. PPK is now equity accounting the after tax earnings of both COS and FRR and takes up in its earnings a share of the after tax profits (or losses) of these entities for the relevant periods.

==> picture [62 x 35] intentionally omitted <==

2

Otherwise, as part of its overall investment strategy, PPK generated profits during the year from the sale of shares held for resale in various publicly listed entities.

This is apart from Allied Brands Limited ( ABQ ) in respect of which PPK will in the first half of this year:

• take up a doubtful debts provision of $864,000 for ABQ for convertible notes held by PPK; and

• write-down the value of ABQ shares held by PPK from $93,000 to nil.

In January 2010, PPK invested in and participated as the lead manager of a syndicate for the purchase of 4.013 hectares of prime residential land located at Willoughby in New South Wales (“Willoughby Market Gardens” or “Kiah”).

This land will be developed over the next three (3) years by the construction and sale of seventy six (76) prestige residential dwellings. Based on its proportionate shareholding in the entity responsible for the purchase of the property, PPK will be entitled to an 18.2% share of profits from the Kiah Project in its capacity as an investor and secured lender.

Marketing of Stage 1 of the project has commenced and 9 of the 14 dwellings in Stage 1 have been sold. Nine (9) contracts have been exchanged for a total value of $16 million.

ING Bank (Australia) Limited has approved finance facilities for the Kiah project. These facilities have enabled repayment of short term loans made by syndicate investors to fund the purchase of the property, and accrued interest, including $5.08 million to PPK.

Construction finance is approved and preliminary civil and site works will commence in December 2010.

Mining Equipment Manufacture

The earnings of Rambor Pty Ltd (“Rambor”) during the year were impacted by the lack of export orders from its principal market in Russia. However, Rambor has now received orders for the manufacture and delivery of equipment to Russia with indications of further orders to follow in the 2011 financial year.

The prototype of equipment developed under the joint development contract between Rambor and Hilti Corporation has undergone testing and met its key KPI targets. The equipment is now being developed for commercialisation. Sales of the developed product are expected to commence in the third quarter of the 2011 financial year.

The combined effect of these factors, together with trading results to date being well in excess of the corresponding period in 2010 is expected to

==> picture [62 x 35] intentionally omitted <==

3

provide the basis for an improved operating performance from Rambor in the 2011 year.

Dividends

Based on an assessment of the Company’s core earnings, realised profits and confidence in an improved earnings outlook for the 2011 financial year, the Board resolved to pay a final dividend of one (1) cent per share fully franked bringing the total fully franked dividends for the year to two and one-half (2.5) cents per share.

Future Direction & Business Outlook

In summary, PPK will focus on the following key areas, namely the:

1. progression and active participation as lead manager of the Willoughby Market Gardens ‘Kiah’ syndicated development project;

2. commercialisation initiatives relating to the Rambor pneumatic handheld bolters designed for Hilti One-Step rock anchor installations jointly developed with Hilti Corporation during the 2010 financial year;

3. pursuit of suitable growth opportunities, in both domestic and overseas markets, for its retained manufacturing operation Rambor; these opportunities are expected to deliver improved earnings performance from this business in future periods; and

4. identification of and investment in appropriate public and private companies in which there exists an opportunity for PPK to be actively involved in the management of these businesses utilising its core management expertise.

Future investment earnings are dependent on the performance of the ‘associates’ and other listed company investments in which PPK holds an interest, improvements in economic outlook and the stability of the Australian share market.

Yours faithfully

PPK GROUP LIMITED

==> picture [121 x 70] intentionally omitted <==

Colin Ryan Chairman

==> picture [62 x 35] intentionally omitted <==

4