PPK GROUP LIMITED — Annual Report 2008

Sep 28, 2008

ANNUAL REPORT 2008

FINANCIAL HIGHLIGHTS

Sales Revenue from Continuing Operations	4,251	▲49.8%
Rental Income from Investment Properties	4,396	constant
Profit Before Income Tax	702	▼96.1%
Profit After Tax	607	▼94%
Earnings Per Share	1 cent	▼93.7%

Notice of Annual General Meeting

The 2008 Annual General Meeting of PPK Group Limited will be held at: 3:00pm on Tuesday, 25 November 2008 at The Grace Hotel,

77 York Street, Sydney.

The business of the meeting is outlined in the Notice of Meeting and Proxy Form.

ASX look-up code: PPK

Website: www.ppkgroup.com.au

Share Registry: www.registries.com.au

PPK Group Limited ABN 65 003 964 181

Contents

Chairman and Managing Director's Overview	1
Five year financial summary	4
Directors' Report	5
Statement of Corporate Governance Practices - 2008	20
Financial Statements	32
Corporate Directory	Inside back cover

CHAIRMAN AND MANAGING DIREC TOR'S OVERVIEW

The previously reported significant volatility in the Australian share market has continued to impact the overall performance of PPK throughout the full year.

Profit after tax for the year ended 30 June 2008 was $607,000 equating to an Earnings Per Share (EPS) of 1.0 cent.

PPK made strategic investments during the year. These investments are fully outlined in the Review of Operations section of the Directors' Report. The accounting treatment in respect of these investments and the impact of required adjustments in the current reporting period is outlined below:

• If the available for sale financial assets (shares) have a substantial or prolonged period of impairment to the original purchase price then the value of the asset has to be written down and the impairment recorded in the Consolidated Income Statement. A write-down of $2.37 million has been included in the Consolidated Income Statement for the current reporting period. If after this write-down the shares increase in value in subsequent periods then that gain is adjusted through reserves in the Balance Sheet and not shown as a gain in the Consolidated Income Statement, until the shares are actually sold.
• When investments are by way of shares, they are classified in the Balance Sheet as available-for-sale financial assets. Adjustments to the fair value of available for sale financial assets are not included in the Consolidated Income Statement (unless impaired) but are adjusted through reserves in the Balance Sheet. When the shares are sold the reserve is written back and the gain or loss is included in the Consolidated Income Statement. A gain of $1.309 million on the sale of shares is included in the Consolidated Income Statement for the current reporting period.
• When investments are by way of convertible notes they are split between loans and other receivables and a derivative respectively in the Balance Sheet. Adjustments to the fair value of derivatives are included in the Consolidated Income Statement, and a gain of $116,000 from an adjustment is included for the current reporting period.

The above adjustments to fair value reflect the position as at 30 June 2008.

The Australian share market has remained volatile. This volatility could continue to impact on the value attributed to these investments in future reporting periods.

PPK's manufacturing business, Rambor, has delivered an improved performance over the previous reporting period. Sales increased from $2.8 million to $4.25 million and profit before tax increased from $189,000 to $650,000. Rambor is holding significant orders and is expecting to provide further improved earnings in subsequent reporting periods.

During the reporting period, PPK:

• on 21 November 2007 concluded the on market share buy back approved by shareholders at a general meeting convened on 21 November 2006; and

• on 19 December 2007 announced the current on market share buy back of up to 10% of the issued capital of PPK, which taking into account shares bought back in the preceding 12 months, permitted the buy back of up to 5,437,880 PPK shares.

As at 26 September 2008 PPK has acquired 2,189,498 shares pursuant to the current buy back at a cost of $1,684,107 (or an average price of 76.9 cents per share).

PPK has 58,540,323 shares on issue as at 26 September 2008.

Following the sale of PPK's plastic packaging business in 2007, PPK declared a special fully franked dividend of 5 cents per share. This was paid to shareholders in September 2007. PPK also announced that it would look to maintain an ordinary dividend of 6.5 cents fully franked dividend for the next three (3) years.

Notwithstanding the full year result for 2008, the Board has resolved to pay a final fully franked dividend of 3.25 cents per share on 21 November 2008. This brings the total fully franked dividend for the year ended 30 June 2008 to 6.5 cents per share.

Colin Ryan CHAIRMAN

David Hoff MANAGING DIRECTOR

Chairman and Managing Director's Overview (cont.)

The Directors will continue to monitor the impact of current share market volatility on PPK investments. Future dividends will be assessed on the performance of PPK in these future periods.

Corporate Governance

PPK continues its adherence to the company's established corporate governance framework consistent with the ASX Principles of Good Corporate Governance and Best Practice Recommendations. Copies of the documents underlying this framework are publicly accessible on the company's website at www.ppkgroup.com.au.

In August 2007, the ASX Corporate Governance Council released the Corporate Governance Principles and Recommendations ("Revised Principles" & "Revised Recommendations"). PPK intends transitioning to the Revised Principles in the next reporting period and will commence reporting by reference to the Revised

Recommendations in the 2009 financial year.

Our People

PPK's people provide the company with the competitive advantage required to satisfy the needs of its customers, shareholders and other stakeholders.

The Board would like to record its appreciation of the on-going dedication and commitment of our employees during the year.

PPK will continue to promote the fostering of a supportive, family oriented and co-operative work place within a performance based environment where innovation, initiative and productivity are encouraged and rewarded.

Human resource policies, practices and procedures are designed to attract, engage and retain the highest possible calibre of employees.

P A G E 2

Chairman and Managing Director's Overview (cont.)

Commitment to Occupational, Health, Safety & Environment

During this year, the company continued its strong commitment to the prevention of injuries and harm in the workplace with positive results achieved through the continued success of its comprehensive workplace health and safety systems and policies.

The year in review saw continuing focus and commitment to health and safety through a group wide commitment to maintaining the highest occupational health and safety standards for the benefit of its employees, contractors and visitors.

Information relating to occupational health and safety issues continues to be regularly considered by the Board which makes recommendations, where necessary, for the improvement in workplace systems and practices.

The company also has a comprehensive employment practices manual which confirms minimum standards of behaviour of employees, contractors, directors and officers while reinforcing the importance of compliance with applicable laws and regulations including those relating to occupational health and safety obligations.

PPK is also committed to the minimisation of the consumption of resources at all of its facilities and in its manufacturing operations.

To this end, the company has an established Environment Policy which may be found on its website at www.ppkgroup.com.au.

Privacy

PPK has developed a Privacy Disclosure Statement consistent with the National Privacy Principles incorporated in prevailing privacy laws dealing with the collection, use, disclosure, security, access and accuracy of information available to it during the course of its business operations. The company has appointed a designated Privacy Officer to deal with queries regarding the application of the policy. A copy of the PPK Privacy Disclosure Statement is

detailed on the Company website at www.ppkgroup.com.au.

Future Direction & Business Outlook

With a portfolio of leased properties in desirable geographical locations providing core stable earnings in the years ahead, PPK will focus on two key areas, namely the:

• pursuit of suitable growth opportunities in both domestic and overseas markets, for its retained manufacturing operation Rambor; and
• identification of investment in appropriate public and private companies in which there exists an opportunity for PPK to add value to PPK's shareholders.

In terms of the business outlook, PPK has a stable core income base in the form of rent generated by leases of its property portfolio.

In addition, Rambor continues to grow both domestically and overseas as a result of new product offerings and increased market penetration.

With the continued volatility of the share market, PPK will take a cautious approach in the coming year when exploring suitable investment opportunities which have the potential to add value for its shareholders.

Colin Ryan David Hoff

CHAIRMAN MANAGING DIRECTOR

FIVE YEAR FINANCIAL SUMMARY

Consolidated		2008	2007	2006	2005	2004
Income StatementSales RevenueRental Income	$000$000	4,2514,396	34,1124,403	98,4082,101	89,572-	73,817-
Profit Before Income Tax	$000	702	16,760	2,979	4,140	6,652
Net profit attributable to members of PPK Group Limited	$000	607	10,111	4,292	3,153	6,909
Balance SheetTotal assets	$000	64,144	63,473	123,693	129,602	90,700
Net debt	$000	21,069	9,184	58,235	58,895	29,525
Equity attributable to members of PPK Group Limited	$000	38,309	46,959	46,187	46,237	46,694
Total equity	$000	38,309	46,959	46,338	47,190	46,845
Share informationDividends on ordinary shares	$000	6,998	4,562	4,425	4,420	4,194
Dividends per ordinary share	cents	11.5	7.0	6.5	6.5	6.5
Dividend payout ratio	%	1,153	45.1	103.1	140.2	60.7
Number of ordinary shares issued at year end	000	59,253	61,186	68,153	68,003	67,558
Market capitalisation	$000	41,477	47,725	51,115	61,203	64,180
Ratios and statisticsReturn on equity attributable to members of PPK Group Ltd	%	1.6	21.5	9.3	6.8	14.7
Basic earnings per share	cents	1.0	15.9	6.3	4.6	10.3
Net debt/equity	%	55.0	19.6	126.0	124.8	63.0
Debt/(Equity – Intangibles)		56.3	19.9	139.9	140.3	66.4
Interest cover on continuing operations	times	2.25	42.8	5.1	2.43	4.75
Net Tangible Assets per Share	cents	63.1	75.3	61.1	63.3	65.8

DIREC TORS' REPORT

Your directors present their report on the parent entity and its subsidiaries for the financial year ended 30 June 2008.

Directors

The names of directors in office at any time during or since the financial year are:

Colin Francis Ryan – Non-Executive Director & Chairman David Alfred Hoff – Managing Director Glenn Robert Molloy – Non-Executive Director Raymond Michael Beath – Non-Executive Director Jury Ivan Wowk – Non-Executive Director

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Information on Directors

Details of the directors' qualifications, experience and responsibilities together with details of directorships of other listed public companies in the preceding three (3) years are detailed below:

Colin Ryan (71)

B.Com., Dip Ed., CA Chairman & Independent Director Member of the Board since November 1995 and Chairman since March 1999. Member of the Audit Committee

Colin Ryan is an independent director of PPK Group Limited and has no business relationship with the company or its related bodies other than his directorship. Colin manages an investment and professional consultancy business providing a variety of professional management, financial and marketing services to various businesses. This follows experience as a Chartered Accountant and extensive service as an executive and non-executive director of various public companies. Colin has a Bachelor of Commerce degree from the University of New South Wales, a Diploma of Education from Sydney University and is an Associate Member of the Institute of Chartered Accountants.

David Hoff (59)

C.P.A Managing Director Member of the Board since November 2000.

David Hoff joined the Company as Chief Executive Officer in 1997 and was

appointed its Managing Director in November 2000. Prior to his current appointment, David had several years experience in financial accounting positions within a multinational corporation in the mining industry followed by a position as Chief Financial Officer of a publicly listed Australian real estate development company. David has over 27 years experience in the packaging industry, in general management and managing director roles, gained with multinational corporations based in the United States of America, Europe, and with a global packaging company in the Asia region.

Other Listed Public Company Directorships:

Cool or Cosy Limited, Non-Executive Director – Appointed: 19 September 2007

Frigrite Limited, Non-Executive Director – Appointed: 23 July 2008

Glenn Molloy(53)

Non-Executive Director Member of the PPK Group Limited Board since listing on 21 December 1994. Founder of the former entity Plaspak Pty Limited in 1979.

Glenn Molloy founded the former entity Plaspak Pty Ltd in 1979 and has acted as a director of the consolidated entity since that time. He has extensive experience on public company boards, and in advising publicly listed and private entities on commercial aspects of mergers, acquisitions and divestment activities. Glenn is also a development committee member of the "learning for life" programme conducted by the Smith Family Charity.

Other Listed Public Company Directorships:

HomeLeisure Limited, Non-Executive Director - Appointed: 22 January 2001 Ceased: 31 May 2006.

Jury Wowk (57)

BA., LLB Non-Executive, Independent Director Member of the PPK Group Limited Board since listing on 21 December 1994.

Jury Wowk is a Partner of HWL Ebsworth

Lawyers and has provided legal services to the PPK Group since the establishment of Plaspak Pty Limited in 1979.

From 1987 to 1989, Jury performed the role of Operations Manager at Plaspak Pty Ltd gaining valuable hands on practical experience in the management of the company's operations.

Jury has a Bachelor of Arts Degree and a Bachelor of Laws degree from the University of Sydney. He is also a Law Society of New South Wales Accredited Specialist in Business Law and an Associate Member of the Australian Institute of Company Directors.

Other Listed Public Company Directorships:

HomeLeisure Limited, Non-Executive Director - Appointed: 29 July 2002 Ceased: 16 April 2007

Raymond Beath (57)

B.Com, F.C.A Non-Executive, Independent Director Member of the PPK Group Limited Board since listing on 21 December 1994 Chairman of the Audit Committee.

Raymond Beath is a Director of Holden & Bolster Avenir Pty Limited, Chartered Accountants. He has a Bachelor of Commerce (Accounting) degree from the University of New South Wales and is a Fellow of the Institute of Chartered Accountants. Raymond has advised the consolidated entity on taxation, corporate and financial management since 1984 and has been non-executive director of PPK Australia Pty Limited since 1986.

Company Secretary

The Company Secretary in office at the end of the financial year was Mr Robert Nicholls.

Information on Company Secretary

Details of the qualifications and experience of the Company Secretary are detailed below:

Robert Nicholls (39)

MBA (Distinction), LL.B (Hons), Grad Dip Leg Prac, Grad Dip CSP, FCIS, GAICD Group Company Secretary Audit Committee Secretary

Robert is a practising solicitor and chartered company secretary.

During the year, Mr Nicholls performed the role of Group General Counsel & Company Secretary providing legal and company secretarial services for the PPK Group of Companies. On 8 July 2008, he was appointed Managing Director of Cool or Cosy Limited, a company in which PPK holds a substantial investment interest, and continues to provide company secretarial services to the consolidated entity.

Prior to joining PPK in April 2000, Mr Nicholls performed roles as a solicitor in private practice and with a Commonwealth regulatory body.

Robert has a Masters of Business Administration (With Distinction) from Charles Sturt University, Bachelor of Laws (Honours) degree from the University of Technology, Sydney, Graduate Diploma in Legal Practice and Graduate Diploma in Company Secretarial Practice. He is a Fellow of The Institute of Chartered Secretaries and Administrators and Chartered Secretaries Australia and a graduate of the Australian Institute of Company Directors.

Relevant Associated Directorships:

Cool or Cosy Limited – Non-Executive Director (1 June 2007 to 7 July 2008); Managing Director (from 8 July 2008)

P P K G R O U P L I M I T E D A N N U A L R E P O R T 2 0 0 8

Directors' Report (cont.)

Principal Activities

The principal activities of the consolidated entity during the financial year were the:

• investment in publicly listed and privately held businesses;
• property ownership and management; and
• design, manufacture and distribution of portable underground mining equipment.

There were no other significant changes in the nature of the consolidated entity's principal activities during the financial year.

Operating Results

The consolidated profit after tax of the consolidated entity for the period ended 30 June 2008 amounted to $607,000.

Dividends Paid or Recommended

Dividends paid or recommended for payment are as follows:

Final dividend in respect of the 2007 year of
3.25 cents per ordinary share paid in
September, 2007	$1,987,088
Special dividend of 5 cents per ordinary sharepaid in September, 2007	$3,057,059
Interim dividend in respect of the reportingperiod of 3.25 cents per ordinary share paidin March, 2008	$1,954,466
Final dividend in respect of the reportingperiod of 3.25 cents per share to be paid
in November, 2008	$1,902,560*

* Based on the number of shares on issue as at 26 September 2008.

Review of Operations

Information on the entity's operations, financial position, business strategies and prospects for the future is detailed below and further within the Chairman and Managing Director's Overview included in the Annual Report accompanying these Financial Statements.

Property and other investments

PPK currently owns six (6) industrial properties:

• four (4) are leased to the purchaser of the packaging business.
• one (1) was leased to the purchaser of the packaging business up to 31 October 2007. This property was then subject to an offer to purchase which subsequently did not proceed. A new tenant has executed a lease commencing from 1 July 2008 for a period of seven years with a five year option.
• one (1) property is leased to the purchaser of York Precision Plastics.

These leases provide an increasing yearly income stream for PPK.

PPK continues to explore opportunities to make strategic investments.

Major investment activity by PPK during the reporting period included the:

• purchase of an additional 3,354,238 shares in Frigrite Limited (ASX Code: FRR) thereby increasing the total number of FRR shares held by PPK to 7,087,565 (or 13.8% of the issued capital of FRR).
• disposal of 6 million shares in Industrea Limited (ASX Code: IDL) resulting in a realised gain on sale of $1.289 million.
• acquisition of 2.42 million convertible notes issued by Allied Brands Limited (ASX Code: ABQ) at a cost of $1.21 million when fully paid which acquisition included the grant of 2.1 million ABQ options at an exercise price of 60 cents per option.
• purchase of a further 0.5 million ABQ options comprising:
• 0.2 million with an exercise price of $0.35
• 0.3 million with an exercise price of $0.45.

• acquisition of 12.5 million convertible notes issued by Cool or Cosy Limited (ASX Code: COS) at a cost of $1,250,000 and was granted 6.25 million options with an exercise price of $0.15 per share.

PPK:

• is now the largest shareholder in both FRR and COS;
• is actively involved in both companies with a PPK representative on the Board of both FRR and COS; and.
• will continue to explore suitable investment opportunities which have the potential to add value for its shareholders.

Mining Equipment Manufacture

During the reporting period Rambor:

• continued to develop and release new products to the market.
• participated in the largest coal mining equipment exhibition in China held in Beijing in November 2007. This led to receiving the first export order to China of $US500,000 which was partly delivered in June 2008 and the balance of the export order will be completed in the first half of the 2009 year and could lead to further orders in the 2009 year.
• finalised discussions with a leading mining equipment manufacturer in China leading to a three (3) year supply agreement of Rambor products to China commencing in October 2009.

Based on these initiatives and current orders from customers, Rambor is expected to continue to deliver growing contributions to PPK's consolidated result.

Dividends

The Board has declared a final fully franked dividend of 3.25 cents thereby maintaining the yearly dividend of 6.5 cents fully franked.

P A G E 8

Future Direction & Business Outlook

With a portfolio of leased properties in desirable geographical locations providing core stable earnings in the years ahead, PPK will focus on two key areas, namely the:

• 1. pursuit of suitable growth opportunities, in both domestic and overseas markets, for its retained manufacturing operation Rambor, which opportunities are expected to deliver improved earnings performance from this business; and
• 1. 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.

Financial Position

The net assets of the consolidated entity have decreased by $8,650,000 from 30 June 2007.

The main changes in the financial position have resulted from the:

• accounting treatment relating to the impairment of financial assets;
• payment of dividends at disclosed levels;
• on-market buy-back of 1,933,584 shares at a cost of $1,540,000.

Significant Changes in the State of Affairs

On-Market Buy-Back Schemes

During the reporting period, PPK had in place on-market buyback schemes comprising the on-market buy back of up to:

• 25% of the issued capital of the Company (or 17,038,276 shares) which on market buy back scheme:
• was announced to the market on 16 October 2006 ("Subsequent Buy-Back") and approved by shareholders at a general meeting convened on 21 November 2006; and
• included shares acquired by PPK under a prior on-market buy back scheme announced to the market on 19 September 2006 ("Initial Buy Back) and completed on 19 June 2007.
• 5,437,880 PPK shares, being 10% of the issued capital of the Company (or 6,100,181 shares) less 662,301 shares

bought back by PPK in the 12 month period preceding the announcement of the on market buy back on 19 December 2007, and which scheme commenced on 7 January 2008 ("Current Buy Back").

On 21 November 2007, PPK completed its Subsequent Buy-Back of 335,979 shares at a cost of $271,000 (or an average price of approximately 81 cents per share).

To date, PPK has acquired an additional 2,189,498 shares under the Current Buy-Back at a cost of $1,684,107 (for average price of 76.9 cents per share ).

The Current Buy-Back will end on or before 6 January 2009.

Investments

During the year, PPK has made:

• further strategic investments in several public companies including:
• Allied Brands Limited (ASX Code: ABQ);
• Frigrite Limited (ASX Code: FRR); and
• Cool or Cosy Limited (ASX Code: COS).
• new investments in other public companies including:
• A.B.C. Learning Centres Limited (ASX Code: ABS)
• FSA Group Limited (ASX Code: FSA)
• TSV Holdings Limited (ASX Code: TSH)
• Allomak Limited (ASX Code: AMA).

Information regarding investment activities is detailed within the Accounts and Review of Operations section of the Annual Report.

After Balance Date Events

Since 30 June 2008, there has been a continuation of the significant volatility of the Australian securities market. If this volatility continues for a sustained period, it could impact on the value attributed to PPK investments in future reporting periods.

On 29 August 2008, the amount of $6.8 million in vendor finance provided by PPK to the purchaser of York Precision Plastics Pty Limited was repaid in full. The amount received has been applied to general debt reduction of the group.

No other matter or circumstance has arisen since the end of the financial year which is not otherwise dealt with in this report or in the Consolidated Financial Statements that has significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years.

Future Developments

The likely developments in the operations of the consolidated entity and the expected results of those operations in financial years subsequent to the year ended 30 June 2008 are included in detail in the Chairman and Managing Director's Review and Review of Operations section of the Annual Report.

PPK has a portfolio of leased properties in desirable geographical locations which will provide stable earnings in the 2009 year and future years.

In addition, the Company will focus on:

• maximising the return on the retained manufacturing business, Rambor, through strategic expansion and new product development initiatives and;
• the identification of suitable strategic investments which provide prospects for sustainable growth and the opportunity for active investor and management participation by PPK.

Environmental Issues

PPK remains committed to:

• the effective management of environmental issues having the potential to impact on its remaining business; and
• minimising the consumption of resources utilised by its operations.

The Company has otherwise complied with all government legislation and regulations with respect to disposal of waste and other materials and has not received any notices of breach of environmental laws and/or regulations.

The Group's approach to environmental sustainability is outlined in its Environment Policy at www.ppkgroup.com.au.

Proceedings on Behalf of Company

No person has applied for leave of the Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

Remuneration Report

Remuneration Report - Audited

This report details the nature and amount of remuneration, including prescribed details under the Corporations Regulations 2001, of each director and member of the key management personnel for the consolidated entity and the company and:

• relevant group executives of the consolidated entity; and
• company executives

(as each these italicised terms are defined in the Corporations Act 2001) receiving the highest remuneration for the year ended 30 June 2008.

Remuneration Policy

The remuneration policy of the Company has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short-term incentives based on key performance areas affecting the consolidated entity's financial results.

The PPK Board believes the remuneration policy to be appropriate and effective in its ability to attract, retain and motivate directors and executives of the highest possible quality and standard to manage the affairs of the consolidated entity, as well as, create goal congruence between directors, executives and shareholders.

The remuneration policy, setting the terms and conditions for directors, executives and management was developed by the Board. The policy for determining the nature and amount of

P A G E 1 0

remuneration for board members and senior executives of the consolidated entity is detailed below.

Remuneration of non-executive directors is determined by the Board from the maximum amount available for distribution to the non-executive directors as approved by shareholders. Currently this amount is set at $275,000 per annum in aggregate as approved by shareholders at the 2003 Annual General Meeting.

In determining the appropriate level of directors' fees, data from surveys undertaken of other public companies similar in size or market section to the Company is taken into account.

Non-executive directors are remunerated by means of cash benefits. They are not entitled to participate in performance based remuneration practices unless approved by shareholders. The Company will not generally use options as a means of remuneration for non-executive directors and will continue to remunerate those directors by means of cash benefits.

PPK does not provide retirement benefits for its non-executive directors.

Executive directors do not receive director's fees.

The Board of Directors is responsible for approving remuneration policies and packages applicable to senior executives of the company. The broad remuneration policy is to ensure that the remuneration package properly reflects the person's duties and responsibilities and that the remuneration is competitive in attracting, retaining and motivating people of the highest possible quality and standard.

A review of the compensation arrangements for executive directors and senior executives is conducted by the full Board at a duly constituted Directors meeting.

The Board conducts its review annually based on established criteria which includes:

• the individual's performance;
• reference to market data for broadly comparable positions or skill sets in similar organisations or industry;
• the performance of the company or consolidated entity during the relevant period; and

• the broad remuneration policy of the consolidated entity.

Senior executives and executive directors may receive bonuses based on the achievement of specific goals of the consolidated entity.

An executive incentive scheme approved by shareholders is in place, which provides the board with the discretion to grant options and provide loans to eligible executives for the purpose of acquiring scheme shares.

The Board exercises its discretion under the PPK Executive Incentive Scheme in a manner consistent with the broad remuneration policy objectives of the consolidated entity. The grant of options to executives is linked to significant performance hurdles including the exercise price of the options being subject to material improvement in company performance (measured by its share price) during a restricted exercise period.

Company Performance, Shareholder Wealth and Director and Executive Remuneration

The Remuneration Policy has been designed to achieve the goal congruence between shareholders, directors and executives.

The two methods employed in achieving this aim are:

• a performance based bonus for executives based on key performance indicators (KPI's) which include a combination of short-term financial and non-financial indicators; and/or
• the issue of options to executives as a means of long-term incentive to encourage the alignment of personal and shareholder interests.

The measures are chosen as they directly align the individual's reward to the KPI's of the consolidated entity and to its strategy and performance.

The company believes this policy to have been effective in maintaining shareholder wealth and in retaining quality employees committed to the long term objectives of the Company.

Eligible executives may be entitled to receive incentive payments of between 10% and up to 15% of their base salary during each

full year of employment in which they achieve pre-determined levels of productivity, goals and targets in consultation with the Board and Managing Director.

A significant proportion of eligible bonus payments to key management personnel, group executives and company executives is linked to the earnings of either the:

• consolidated entity; or
• individual company in which the relevant group executive performs his or her primary duties and responsibilities.

In the 2007 year, Advanced Fluid Systems Pty Limited, an entity related to P.R.Mastalir, Managing Director of Rambor Pty Limited ("Rambor") and King Cobra Mining Equipment Pty Limited ("King Cobra"), was paid a bonus payment which vested during the 2006 year relating to the satisfaction of performance targets in respect of the company earnings of Rambor and King Cobra for the 2005 financial year.

No other bonus payments have been made to key management personnel for the consolidated entity and the company and:

• group executives of the consolidated entity; and
• company executives

in respect of objectives relating to the earnings of the company or consolidated entity during the year or in respect of the preceding four (4) years.

The remaining proportion of eligible bonus payments relate to non-financial performance measures which may include, for example, people, safety, strategy and risk measures having overall benefits for the consolidated entity. Details of bonuses paid to executives in respect of the attainment of predetermined nonfinancial performance indicators are detailed within this report.

Consequences of company performance on shareholder wealth

The following table outlines the impact of company performance on shareholder wealth:

	2008	2007	2006		2005 2004
Earningsper share (cents)	1.0	15.9	6.3	4.6	10.3
Full year ordinarydividends per share (cents)	6.5	7.0	6.5	6.5	6.5
Special dividendper share (cents)	5.0	-	-	-	-
Year end share price	$0.70	$0.78	$0.75	$0.90	$0.95
Shareholder return(annual)	5.3%	13.2%		(8.8%) 1.8% 5.8%

The above table shows the annual returns to shareholders calculated to include the dividend yield for the year (based on the average share price for the year) and the change in the listed market value of the shares during the year. A special dividend of 5 cents per share was paid by PPK following the completion of the sale of the plastics packaging business in 2007.

In addition, the information provided in the table and this report highlights that the payment of bonuses to executives is closely aligned to company performance. In respect of the 2008 financial year, for example, no bonuses have been paid or accrued to executives relating to performance conditions relating to the current reporting period while bonuses were paid to key executives in respect of the 2007 year based on the positive performance of the company in this period.

Details of Remuneration for the year ended 30 June 2008

Director and executive remuneration

Details of the nature and amount of each major element of compensation of each director, relevant group executive and company executive who receive the highest remuneration for the year ended 30 June 2008 are included in the following table:

	Short Term Incentives		PostEmployment	Long term Incentives/Benefits
	Salary& Fees($)	Short Term Non-CashIncentiveCash Bonus($)	Benefits($)	Superan-nuation($)	LongServiceLeave	TerminationBenefits($)	ShareBasedpayments($)	Total(S)	ProportionRemunerationPerformanceRelated %
DirectorsNon –ExecutiveC.F.RyanG.R.MolloyR.M BeathJ.I.WowkExecutive	72,00048,00048,00048,000	----	----	----		----	----	72,00048,00048,00048,000	----
D.A.HoffTotal Directors	198,309	25,000	69,786	85,128	4,664	84,000	-	466,887682,887	5.4%
Company ExecutivesR.J.NichollsF.J. Hardiman*Total Company Executives	151,395105,030	--	11,3279,167	13,1293,465	3,045641	--	--	178,896118,303297,199	--
Relevant Group ExecutiveP.R.MastalirTotal Relevant Group Executive	208,299	-	-	11,700	3,747	-	-	223,746223,746	-

* Remuneration information for this Company Executive relates to the 3 month period ended 30 September 2007 after which the nominated employee ceased to be a Company Executive.

The named company executives and relevant group executive held the following positions during the period:

Company Executive	Position
R J Nicholls	Group General Counsel &Company Secretary
F J Hardiman	Chief Financial Officer(to September 2007)
Relevant Group Executive	Position
P R Mastalir	Managing Director,Rambor Pty Ltd

There are no other group or company executives.

The names and positions held by Key Management Personnel of the consolidated entity during the year are as follows:

Key Management Personnel	Position
C F Ryan	Non-Executive Director
D A Hoff	Managing Director
G R Molloy	Non-Executive Director
J I Wowk	Non-Executive Director
R M Beath	Non-Executive Director
R J Nicholls	Group General Counsel &Company Secretary
F J Hardiman	Chief Financial Officer(to September 2007)

2007		Short Term Incentives		PostEmployment	Long term Incentives/Benefits
	Salary& Fees($)	Short Term Non-CashIncentiveCash Bonus($)	Benefits($)	Superan-nuation($)	LongServiceLeave	TerminationBenefits($)	ShareBasedpayments($)	Total($)	ProportionRemunerationPerformanceRelated %
DirectorsNon –ExecutiveC.F.RyanR.M BeathJ.I.Wowk	72,00048,00048,000	---	---	---		---	---	72,00048,00048,000	---
ExecutiveG.R.MolloyD.A.Hoff	259,500216,333	-125,000**	-36,043	28,05085,230	4,651	-84,000	--	287,550551,257	-22.7%
Total Directors								1,006,857
Company ExecutivesR.J.NichollsF.J.Hardiman	152,234152,368	51,950**37,500**	6,83418,791	12,90912,186	2,2494,048	-179,706	--	226,176404,599	22.9%9.3%
Total Company Executives								630,775
Relevant Group ExecutiveP.R.MastalirG.Rufford*C.J.Salmon*	103,058104,867164,244	--10,000	45,00017,74718,068	11,25012,58419,709	6,0382,2993,679	---	---	165,346137,497215,700	--4.6%
Total Relevant Group Executive								518,543

* Remuneration information for these Relevant Group Executives relates to the 11 month period ended 31 May 2007 after which the nominated employees ceased to be Relevant Group Executives.

** These figures include bonus payments made to the identified executives in respect of:

• (a) established performance criteria applied during the 2006 financial year relating to the satisfactory completion of the sale of the plastics packaging business which subsequently took place on 1 September 2006; and
• (b) the fulfilment of pre-determined performance objectives and earnings targets in the 2007 financial year.

The named company executives and relevant group executives held the following positions during the period:

Company Executive and/orRelevant Group Executive	Position
F J Hardiman	Chief FinancialOfficer
P R Mastalir	Managing Director –Rambor Pty Limited
R J Nicholls	Group General Counsel &Company Secretary
G Rufford	Financial Controller –York Precision Plastics Pty Ltd
C J Salmon	Managing Director –York Precision Plastics Pty Ltd

Performance Income as a Proportion of Total Remuneration

Performance based bonuses are based on set monetary figures and not on proportions of salary. This has resulted in the proportions of remuneration related to performance varying between individuals. The Board has set these bonuses to encourage achievement of specific goals that have been given a high level of importance in relation to growth and profitability of the consolidated entity.

Analysis of bonuses included in remuneration

The vesting profile of the short-term incentive cash bonus awarded as compensation to each director, company executive and relevant group executives are detailed below:

Short term incentive cash bonus
	Included inRemuneration (A)($)	Vested inperiod(%)	Forfeited inperiod(B)(%)
Director
D A Hoff	25,000	30%	70%

• (A) Amounts included in remuneration for the financial reporting period represent the amount that vested in the 2007 financial year and paid in the current year on 22 October 2007 based on achievement of personal goals and satisfaction of specified performance criteria in respect of the 2007 financial year. No amounts vest in future financial years in respect of the short term incentive cash bonus schemes for the 2007 financial year.
• (B) The amounts forfeited are due to the performance of service criteria not being met in relation to the current financial reporting period.

The performance conditions included in the determination of the bonus to D A Hoff paid during the current period related to targets incidental to the sale of the plastics packaging business in 2007.

These performance conditions were selected because the sale of this business was considered to be in the long term interests of PPK shareholders and achievement of these conditions was in direct alignment with this objective. The conditions required completion of the sale transaction before payment of the bonus so that goal congruence could be achieved consistent with the interests of PPK shareholders. The percentage amount of

the bonus was considered commensurate with the profit to be realised on the sale of the plastics packaging business and reflected the considerable additional time, skill and effort required to finalise a transaction of this nature.

No other bonuses were paid to executives in respect of the current period due to the failure of these executives to satisfy or meet specified performance conditions and targets. These conditions and targets related to group and/or company earnings thresholds and completion of specified transactions by previously agreed target dates.

Analysis of prospective bonus payments for future years

The vesting profile of the short-term incentive cash bonus which may have vested at the date of this report, or be payable in future financial years if the executive meets pre-determined service and performance criteria awarded as compensation to each director, company executive and relevant group executive are detailed below:

	Short term incentive cash bonus
		Value yet to vest orwhich may vest
	Financial yearsin which bonusvests or may vest	Minimum	Maximum
DirectorD.A.Hoff	2009	50,000	75,000
Relevant GroupExecutiveP R Mastalir	2008	0	(A)

(A) The maximum potential value of the short term incentive cash bonus cannot be determined for this executive as vesting is dependent upon the attainment of specified threshold earnings targets and the maximum potential value is dependant upon actual earnings achieved.

The performance conditions included in the determination of the prospective bonus which may vest in future financial years and be payable to:

• D A Hoff comprises designated Earnings Per Share (EPS) targets for the consolidated entity; and

• P R Mastalir includes specified Earnings Before Interest & Tax (EBIT) targets for Rambor Pty Limited.

These performance conditions were selected because each seeks to align the potential payment of bonuses to the creation of shareholder value and growth of the company's operations. Achievement of these performance conditions are assessed by means of specifically defined targets and definitions of the key requirements detailed within the relevant service and consultancy agreements with the respective personnel. The main reason for applying these methods of assessment is that they are based on readily accepted measurements of shareholder value creation and company earnings growth.

Options issued as part of remuneration for the year ended 30 June 2008

Options may be issued to executives as part of their remuneration. The options are issued to encourage goal alignment between executives, directors and shareholders.

No options were issued to, or exercised by, directors or specified executives during the year.

900,000 options previously issued to non-executive directors, C F Ryan, J I Wowk and R M Beath, and exercisable at $1.65 per option lapsed on 12 August 2007.

Employment Contracts

The remuneration and other terms of employment of the Managing Director, David Hoff are formalised in a Service Agreement. The major provisions of the Service Agreement are as follows:

• Term of agreement 4 years commencing 1 July 2004.

• Base salary inclusive of superannuation to be reviewed annually by the Board of Directors.

• Provision of a fully maintained motor vehicle.

• Payment of a termination benefit equal to 12 months of the current base salary and benefits in the event that either party does not renew the Service Agreement on expiry of the 4 year term.

• Payment of a termination benefit on early termination by the employer, other than in specified circumstances based on misconduct or non-performance, equal to the current base salary and benefits for 12 months or the remaining term of the agreement whichever is the greater.

• A notice period of 6 months in respect of early termination of the agreement.

• The payment of a performance related cash bonus based on the Consolidated Entity achieving specified earnings per share targets.

Discussions are currently taking place regarding the renewal of this agreement.

P.R.Mastalir and Advanced Fluid Systems Pty Limited, an entity related to Mr Mastalir, provide consultancy services to Rambor Pty Limited ("Rambor") and King Cobra Mining Equipment Pty Limited ("King Cobra") pursuant to the terms of a Consultancy Agreement.

The major provisions of the Consultancy Agreement are as follows:

• Term of agreement 5 years commencing 1 July 2007.
• Restraints on competition for specified time periods in certain geographical areas in respect of defined services and activities in the event of termination.
• Early termination provisions on the occurrence of specified events such as, for example, insolvency or the failure or inability to perform the contracted service.
• A notice period of 6 months in respect of early termination of the agreement.
• The payment of a performance related cash bonus based on Rambor and/or King Cobra achieving specified earnings before interest and taxation (EBIT) targets.

There are no formalised written contracts in place with any other specified executives.

Any termination payment entitlements would be as determined by general employment law.

End of Audited Remuneration Report

Options

There were no options outstanding as at the date of this report.

Directors' Interests

Particulars of Directors' interests in shares as at the date of this report are as follows:

Ordinary Shares	Options
	-
	-
	-
	-
42,821	-
	500,000856,9608,752,40087,302

The directors have received and considered the annual control certification from the Managing Director and the Group Financial Controller in accordance with the Recommendations relating to financial risks.

Material associates and joints ventures, which the company does not control, are not dealt with for the purposes of this statement.

Throughout the reporting period, and as the date of signing of this annual report, the company was in compliance with twenty five (25) out of the twenty eight (28) Recommendations in all material respects.

Audit Committee

The consolidated entity has an audit committee, comprised of two non-executive directors Mr R. M. Beath and Mr C. F. Ryan. External auditors are invited to attend from time to time. Meetings of Directors

During the financial year, meetings of directors (including committee meetings) were held.

Attendances were:		DIRECTORS' MEETINGS		COMMITTEE MEETINGS
	NumberEligible toattend	NumberAttended	NumberEligible toattend	NumberAttended
C F Ryan	8	8	4	4
G R Molloy	8	8	-	-
J I Wowk	8	8	-	-
R M Beath	8	8	4	4
D A Hoff	8	8	-	4

Risk and Control Compliance Statement

Under ASX Listing Rules and the ASX Corporate Government Council's Principles of Good Corporate Governance and Best Practice Recommendations ("Recommendations"), the Company is required to disclose in its Annual Report the extent of its compliance with the Recommendations.

The directors have implemented internal control processes for identifying, evaluating, and managing significant risks to the achievement of the company's objectives. These internal control processes cover financial, operational and compliance risks. The Company's corporate governance practices are outlined in the Statement of Corporate Governance within this Annual Report.

Directors' and Auditor's Indemnification

During or since the end of the financial year the company has given an indemnity or entered an agreement to indemnify, or paid or agreed to pay insurance premiums as detailed below.

The Company has paid premiums to insure all directors of the parent entity and officers of the consolidated entity against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium was $19,313.

Directors' Benefits

Since 30 June 2007, no director has received or become entitled to receive a benefit because of a contract made by the consolidated entity, or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest except for:

• Mr Glenn Molloy has an interest in Corso Management Services Pty Ltd which provides management services to the consolidated entity.
• Mr Raymond Beath who is a director of Holden & Bolster Avenir Pty Ltd which provides tax and accounting services to the consolidated entity in the ordinary course of business.
• Mr Jury Wowk is a partner in HWL Ebsworth Lawyers which has provided legal services to the consolidated entity in the ordinary course of business.

This statement excludes a benefit included in the aggregate amount of remuneration received or due and receivable by directors and shown in the company's accounts, or the fixed salary of a full-time employee of the parent entity, controlled entity, or related body corporate.

Non-audit Services

The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services by BDO Kendalls during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). The directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons:

• all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure that they do not adversely affect the integrity and objectivity of the Auditor; and
• the nature of the services provided do not compromise the general principles relating to Auditor independence as set out in APES 110 "Code of Ethics for Professional Accountants".

The following fees for non-audit services were paid to the external auditors during the year ended 30 June 2008:

Accounting Advice $2,200.00

The Board has considered the performance of non-audit services during the year by BDO Kendalls while remaining the Company's auditor and is satisfied that the provision of those non-audit services during the relevant period by the firm was compatible with, and did not compromise, the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth) for the following reasons:

• all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and
• the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 "Code of Ethics for Professional Accountants", as these services did not involve reviewing or auditing the auditor's own work, acting in management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Audit Independence

The lead Auditor's Independence Declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended 30 June 2008 is set out on page 89 and forms part of the Directors' Report.

Rounding of Accounts

The parent entity has applied the relief available to it in ASIC Class Order 98/100 and, accordingly, amounts in the financial statements and directors' report have been rounded to the nearest thousand dollars.

Signed in accordance with a resolution of the Board of Directors.

Colin Francis Ryan DIRECTOR Sydney, 26 September 2008

STATEMENT OF CORPORATE GOVERNANCE PRAC TICES - 2008

PPK Group Limited ("PPK" or "the Company")

Approach to Corporate Governance and Responsibility

The PPK Board of Directors is committed to the principles underpinning good corporate governance, applied in a manner which is most suited to PPK, and to best addressing the directors' accountability to shareholders and other stakeholders. This is supported by an overriding organisation-wide commitment to the highest standards of legislative compliance and financial and ethical behaviour.

The Company continues to address directors' accountability to stakeholders in a manner consistent with the Company's individual circumstances enhanced through the introduction of publicly available policies and procedures which are designed to foster a culture of transparency in the way PPK is directed and managed.

As a measure of its stated commitment to good corporate governance principles, the Board will continue to:

• review and continually improve its governance practices; and
• monitor developments in good corporate governance.

Report on Compliance with the ASX Best Practice Recommendations

Currently, the ASX Listing Rules require listed companies to include in their Annual Report a statement disclosing the extent to which they have followed the twenty eight (28) ASX Best Practice Recommendations in the reporting period.

Listed companies must identify the recommendations that have not been followed and provide reasons for the company's decision. Where a recommendation has been followed for only part of the period the company must state the period during which it had been followed.

As detailed within this Statement of Corporate Governance Practices, PPK considers its governance practices comply with each of the ten (10) core Corporate Governance Principles and twenty five (25) of the ASX Best Practice Recommendations.

For the reasons expressed within this Statement, PPK has elected not to adopt ASX Best Practice Recommendations 2.4, 4.3 and 9.2.

PPK has posted copies of its relevant corporate governance policies and practices to its website consistent with the ASX Best Practice Recommendations.

PPK's Statement of Corporate Governance Practices, and copies of its policies, are available in the designated corporate governance area of its website at www.ppkgroup.com.au.

Transition to Revised Principles & Recommendations

In August 2007, the ASX Corporate Governance Council released the Corporate Governance Principles and Recommendations ("Revised Principles" & "Revised Recommendations"). The Revised Principles and Revised Recommendations came into effect from 1 January 2008 and, for companies with a financial year from 1 July 2008 to 30 June 2009, require disclosure in annual reports published in late 2009.

PPK will commence reporting by reference to the Revised Principles and Revised Recommendations in the 2009 financial year in accordance with ASX Listing Rule requirements.

Date of this Statement

This statement outlines the:

• ten (10) core Principles, and twenty eight (28) Recommendations identified by the ASX as underlying good corporate governance; and
• main corporate governance practices of PPK during the year to 30 June 2008, except where stated otherwise.

P A G E 2 0

ASX PRINCIPLE 1: Lay solid foundations for management and oversight

ASX Recommendation 1.1: Formalise and disclose the functions reserved to the board and those delegated to management.

PPK: The Board has formalised its roles and responsibilities into a Charter. The Board Charter clearly defines the matters that are reserved for the Board and those that the Board has delegated to management.

In summary, the responsibilities of the PPK Board include:

• oversight of the company, including its control and accountability systems;
• setting the company's major goals including the strategies and financial objectives to be implemented by management;
• appointing, removing and controlling the Managing Director;
• ratifying the appointment and, where appropriate, the removal of the chief financial officer and/or company secretary;
• input into and final approval of management's development of corporate strategy and performance objectives;
• reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance;
• monitoring senior management's performance and implementation of strategy, and ensuring that appropriate resources are available;
• approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures;
• approving and monitoring financial and other reporting; and
• corporate governance.

The Board has delegated responsibility to the Managing Director for:

• developing and implementing corporate strategies and making recommendations on significant corporate strategic initiatives;
• maintaining an effective risk management framework and

keeping the Board and market fully informed about material risks;

• developing PPK's annual budget, recommending it to the Board for approval and managing day-to-day operations within the budget;
• managing day-to-day operations in accordance with standards for social and ethical practices which have been set by the Board;
• making recommendations for the appointment of key management personnel, determining terms of appointment, evaluating performance, and developing and maintaining succession plans for key management roles; and
• approval of capital expenditure and business transactions within predetermined limits set by the Board.

PPK's Board Charter is available in the corporate governance section of its website at www.ppkgroup.com.au.

ASX PRINCIPLE 2: Structure the board to add value.

ASX Recommendation 2.1: A majority of the board should be independent directors.

PPK: Independence.

A PPK director will be considered independent where he or she is:

• independent of management, that is, a non-executive director; and,
• free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of his or her unfettered and independent judgement.

Materiality is assessed on a case by case basis by reference to the director's individual circumstances rather than general materiality thresholds.

The PPK Board has made its own assessment to determine the independence of each director on the Board. It is the Board's view that each of the following non-executive directors is independent:

Mr C F Ryan Mr J I Wowk Mr R M Beath.

The Board has established criteria for assessing independence of its directors and these can be found in the corporate governance section of the PPK website at www.ppkgroup.com.au.

Composition of the Board

The PPK Board comprises four (4) non-executive directors and one (1) executive director.

The composition of the Board is set based on the following factors:

• the Company's Constitution provides for the number of directors to be not less than three (3) and not more than ten (10) as determined by the directors from time to time;
• the Board has adopted a policy that the position of Chairman will continue to be held by a non-executive director; and
• consistent with the Company's objective that the Board should encompass a broad range of relevant expertise, the present Board consists of two (2) directors with extensive property, investment and manufacturing experience, a practising chartered accountant, a practising solicitor, and a director who consults in financial and general management and, collectively, members having a diverse breadth of experience on other listed company boards.

PPK's Constitution is available in the corporate governance area of its website at www.ppkgroup.com.au.

There is no shareholding requirement imposed upon directors under the Company's constitution. All of the PPK Board do, however, hold shares in the Company.

Details of all holdings by directors in the Company are detailed within the Directors' Report.

ASX Recommendation 2.2: The chairperson should be an independent director.

The Chairman is selected by the Board from the non-executive directors.

The current chairman, Mr C F Ryan, is a non-executive, independent director appointed by the Board. He has been a director of PPK since November 1995 and Chairman since March 1999.

ASX Recommendation 2.3: The roles of chairperson and chief executive officer should not be exercised by the same individual.

PPK: PPK's Chairman, Mr C F Ryan, and its Managing Director, Mr D A Hoff, have separate roles. The roles and responsibilities of the Chairman and the Managing Director are set out in the Board Charter which is available within the designated corporate governance area of the company website at www.ppkgroup.com.au.

ASX Recommendation 2.4:The board should establish a nomination committee.

PPK: PPK has elected not to adopt this recommendation because it considers that its existing selection and appointment practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that PPK is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board structure and composition.

The PPK Board consists of only five (5) members. It is considered that further division of the Board for the purposes of establishing a formal committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

The small size of the PPK Board, and the nature of its business, means that PPK has the present capacity to consider director competencies, selection and nomination practices in the context of duly constituted meetings of the Board and as a part of its selfevaluation processes.

ASX Recommendation 2.5: Provide the information included in the Guide to reporting on Principle 2

• Skills, experience and expertise of each director.
• Term of Office

The qualifications, experience and expertise of the directors, and the respective terms in the office held by individual directors, are set out on pages 5 and 6 of this Annual Report.

Independent Professional Advice

PPK has in place a procedure whereby, after appropriate consultation, directors are entitled to seek independent professional advice, at the expense of PPK, to assist them to carry out their duties as directors. The policy of PPK provides that any such advice is made available to all directors.

Procedure for selection and appointment of new directors

The process for appointing a director within PPK is that, when a vacancy exists, the Board identifies candidates with the appropriate expertise and experience, using external consultants as appropriate. The most suitable candidate is appointed but must stand for election at the next annual general meeting following the appointment.

Consistent with the current law there is no retirement age for directors fixed by the Company's Constitution.

The process for re-election of a director is in accordance with the Company's Constitution, which requires that each year, at least one-third of the non-executive directors retire from office at the Annual General Meeting. The retiring directors may be eligible for re-election.

ASX PRINCIPLE 3: Promote ethical and responsible decision-making.

ASX Recommendation 3.1: Establish a code of conduct to guide the directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any key executives as to:

3.1.1 the practices necessary to maintain confidence in the company's integrity;

3.1.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

PPK: PPK has developed a Code of Conduct for Directors and Executives which is designed to ensure that:

• high standards of corporate and individual behaviour are observed by all PPK directors and executives in the context of their respective roles and the performance of their duties with PPK;
• directors and executives are aware of their responsibilities to PPK under the terms of their appointment or contract of employment; and
• all of the stakeholders of the Company can be guided by the stated values and policies of PPK.

In summary, the Code provides that directors, officers and executives must:

• act honestly, in good faith and in the best interests of the company;

• use due care, skill and diligence in the fulfilling their duties;

• use the powers of their position for a proper purpose, in the interests of the company;

• not make improper use of information acquired their position;

• not allow personal interests, or those of associates, conflict with the interests of the company;

• exercise independent judgement and actions;

• maintain the confidentiality of company information acquired by virtue of their position;

• not engage in conduct likely to bring discredit to the company; and

• comply at all times with both the spirit and letter of the law, as well as, policies of the company.

Directors of the company may act in a professional capacity for the Company or its controlled entities, other than as auditor of the Company. These arrangements are subject to the restrictions of the Corporations Act 2001 (Cth).

Disclosure of related party transactions is set out in Note 30 to the Financial Statements.

Under the Constitution of the Company, and the Corporations Act 2001 (Cth), where the possibility of a conflict of interest exists and involves a director, directly or indirectly, the director must declare the fact, nature, character and extent of the conflict at the first meeting of directors held after the relevant facts come to the director's knowledge.

The director concerned does not receive copies of the relevant Board papers, if any, and withdraws from the Board meeting while such matters are considered by the remainder of the Board. Accordingly, the interested director takes no part in discussions nor exercises any influence over other members of the Board if a potential conflict of interest exists.

In addition, PPK has developed a series of policies designed to promote ethical and responsible decision making by directors, executives, employees and contractors of the Company, including:

• Trading Policy;
• Market Disclosure Policy;
• Privacy Policy;
• Occupational Health & Safety Policy;
• Code of Conduct and Ethics (General); and
• Code of Conduct for Directors & Executives.

Employees are actively encouraged to report activities or behaviour to senior management, the Company Secretary or the Board, which are a breach of the Code of Conduct and Ethics, other PPK policies or regulatory requirements or laws.

ASX Recommendation 3.2: Disclose the policy concerning trading in company securities by directors, officers and employees.

PPK: Directors, officers and employees are subject to the Corporations Act 2001 (Cth) relative to restrictions applying for, acquiring and disposing of securities in, or other relevant products of, the Company (or procuring another person to do so), if they are in possession of inside information.

Inside information is that information which is not generally available, and which if generally available, a reasonable person would expect it to have a material effect on the price or value of the securities in the Company.

Under the PPK Trading Policy, directors, officers and employees of the Company are restricted from trading in the Company's securities during the period of one (1) month preceding the making of an announcement to the market by the Company relating to:

• the Company's Annual results;
• the Company's Half Year results;
• the Chairman's Address;
• any other matter for which disclosure is required to be made by PPK under the ASX Listing Rules or Corporations Act.

In addition, all of the existing directors have entered into an agreement with the Company which requires on-going disclosure to the Company of any change in the director's interests in securities, and in contracts relevant to securities, within three (3) business days of the change occurring.

New directors are required to enter into this form of agreement making initial disclosure of the interests. A director who ceases to hold office must provide a final form of disclosure of their interests at the date of ceasing to be a director.

The Company notifies the ASX of the changes on behalf of the director as required by the ASX Listing Rules.

ASX Recommendation 3.3: Provide the information indicated in Guide to reporting on Principle 3.

Copies of the PPK Code of Conduct for Directors and Executives and Trading Policy are available at www.ppkgroup.com.au.

P A G E 2 4

ASX PRINCIPLE 4: Safeguard integrity of financial reporting.

ASX Recommendation 4.1: Require the chief executive officer (or equivalent) and the chief financial officer (or equivalent) to state in writing to the board that the company's financial reports present a true and fair view, in all material respects, of the company's financial condition and operational results and are in accordance with relevant accounting standards.

PPK: The PPK Board receive regular reports about the financial condition and operational results of PPK and its controlled entities.

The Managing Director and Group Financial Controller of PPK report in writing to the Board that the consolidated financial statements of PPK and its controlled entities for each subsequent half year and full financial year present a true and fair view, in all material respects, of the Group's financial condition and operational results and are in accordance with accounting standards.

ASX Recommendation 4.2: The Board should establish an audit committee.

PPK: The PPK Board established an Audit Committee in 1994 and continues to provide assistance to the Board in accordance with its established Terms of Reference.

ASX Recommendation 4.3: Structure the audit committee so that it consists of:

• • only non-executive directors;
• • a majority of independent directors;
• • an independent chairperson, who is not chairperson of the board;
• • at least three (3) members.

PPK: PPK does not comply with the element relating to the desired number of members of the audit committee.

The PPK Audit Committee comprises only two (2) non-executive, independent directors and is chaired by Mr R M Beath who is not chairman of the Board.

The Board considers that the skills, qualifications and experience represented by the involvement of members Mr C F Ryan and Mr R M Beath are most suited to the effective discharge of the responsibilities of the committee.

PPK does not consider that any further value will be added by the inclusion of another member for the sake of satisfying this requirement, particularly given the small size and diversity of the PPK Board.

On 3 May 2005, the ASX Listing Rule which prescribed the composition of the audit committee was amended so as to limit its application to the top 300 listed companies. In keeping with this amendment, PPK has elected to maintain the existing composition of its Audit Committee.

ASX Recommendation 4.4: The Audit Committee should have a formal charter.

• PPK: The principal functions of the PPK Audit Committee are to:
• review of the annual and half yearly financial reporting carried out by PPK;
• review of the accounting policies of PPK;
• review the scope and audit programmes of the internal and external auditors and any material issues arising from these audits;
• oversee the independence of external auditors and determining procedures for the rotation of audit partners; and
• report to the Board on the effectiveness of PPK's systems of accounting and internal controls.

Reflecting the relative small size of the company, the full Board remain responsible for:

• the sufficiency of, and compliance with, ethical guidelines and company policies affecting corporate governance, financial reporting and corporate control together with compliance with laws and external regulations;
• identification of the full range of actual or potential risk exposures which are material to PPK; and
• the effectiveness of the group's risk management systems and strategies.

ASX Recommendation 4.5: Provide the information indicated in Guide to reporting on Principle 4.

Details of the members of the Audit Committee

The Board's Audit Committee consists of:

Mr R M Beath (Chairman)

Mr C F Ryan

The lead signing and review external audit partner and the Company's Managing Director attend committee meetings by standing invitation.

The qualifications of each member of the committee are set out on pages 5 and 6 of this Annual Report.

Number of Meetings and Names of Attendees

The number of meetings held during the reporting period and the attendees at these meetings is detailed within the Directors' Report.

Audit Committee Charter

The PPK Audit Committee Charter is available at www.ppkgroup. com.au.

Engagement & Rotation of External Auditor

The Audit Committee is responsible for nominating the external auditor to the Board for re-appointment. If the Audit Committee recommends a change in external auditor to the Board, the Board's nomination of external auditor requires the approval of shareholders. The Audit Committee recommends to the Board the compensation of the external auditor.

The Audit Committee meets with the external auditor throughout the year to review the adequacy of the existing external audit arrangements with particular emphasis on the scope, quality and independence of the audit.

It has been determined by the Audit Committee that the external auditor will not provide services to the Company where the auditor would:

• have a mutual or conflicting interest with the company;
• be in a position where they audit their own work;
• function as management of the Company; or
• have their independence impaired or perceived to be impaired in any way.

Specifically, the external auditor will not normally provide the following types of services to the Company:

• bookkeeping or other services relating to the accounting records or financial statements of the Group;
• financial information or information technology systems design and implementation;
• appraisal and valuation services, fairness opinions or contributions-in-kind reports;
• actuarial services;
• internal audit outsourcing services;
• management functions, including temporary staff assignments or human resource services, including recruitment of senior management;
• broker or dealer services, investment advisor, corporate finance or investment banking services; and
• legal and litigation support services.

Procedures are in place governing approval of any non-audit work before the commencement of any engagement.

BDO Kendalls has been appointed the independent external audit firm of PPK since listing as the former entity Plaspak Group Limited in 1994 and continue to act in this role for the consolidated entity.

The Board has elected to adopt a policy which is consistent with the primary and secondary rotation obligations regarding auditors such that:

• the lead or review audit partner's responsibilities may not be performed by the same person for longer than five (5) successive years ("primary rotation obligation"); and
• the lead or review audit partner's responsibilities may not be performed by the same person for more than five (5) out of seven (7) successive years ("secondary rotation obligation").

P A G E 2 6

In addition, the Board requires a minimum of two (2) consecutive years "cooling off" period before an auditor undergoing rotation can return to playing a significant role in the audit of the Company.

During the reporting period, the lead audit partner for PPK was Mr Wayne Basford. Mr Basford has fulfilled this role in respect of the Company since the 2007 financial year.

ASX PRINCIPLE 5: Make timely and balanced disclosure.

ASX Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

**PPK:**The PPK Board is committed to keeping its shareholders, and the market, fully informed of major developments having an impact on the Company.

Comprehensive procedures are in place to identify matters that are likely to have a material affect on the price, or value, of the PPK securities and to ensure those matters are notified to the ASX in accordance with ASX Listing Rule disclosure requirements.

Senior management and the Board are responsible for scrutinising events and information to determine whether the disclosure of the information is required in order to maintain the market integrity of the Company's shares listed on the ASX.

The Company Secretary is responsible for all communications with the ASX.

ASX Recommendation 5.2: Provide the information indicated in Guide to reporting on Principle 5.

Compliance with Listing Rule Disclosure Requirements.

The procedures relating to the notification of price sensitive information to the ASX and the subsequent posting of announcements on the PPK website are detailed within the PPK Market Disclosure Policy available at www.ppkgroup.com.au.

ASX PRINCIPLE 6: Respect the rights of shareholders.

ASX Recommendation 6.1: Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

**PPK:**PPK recognises the right of shareholders to be informed of matters, in addition to those prescribed by law, which affect their investments in the Company.

The PPK Shareholder Communication Policy, available at www. ppkgroup.com.au, demonstrates PPK's commitment to:

• dealing fairly, transparently and openly with both current and prospective shareholders;
• the use of available channels and cost effective technologies to reach shareholders who may be geographically dispersed and in order to communicate promptly with all shareholders; and
• facilitating participation in shareholders meetings and dealing promptly with shareholder enquiries.

PPK communicates information to shareholders through:

• the annual report;
• disclosures to the ASX and ASIC;
• notices and explanatory memoranda of annual general meetings and general meetings;
• occasional letters from the Managing Director and Chairman to inform shareholders of key matters of interest; and
• the Company's website on the internet at: www.ppkgroup. com.au.

The Board encourages active participation by shareholders at each Annual General Meeting, or other general meetings, to ensure a high level of accountability and understanding of PPK's strategy, performance and goals.

Consistent with best practice, important issues are presented to shareholders as single resolutions expressed in plain, unambiguous language. Proceedings are held in a locality, and at a readily accessible venue, conducive to maximising the number of shareholders present, and able to participate, at the meeting. Shareholders are provided with opportunities of asking the Board questions regarding the management of the Company.

ASX Recommendation 6.2: Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor's report.

PPK: PPK ensures that the lead external audit partner, or representative, attends the Annual General Meeting, or other general meetings, of the Company and that shareholders are afforded the opportunity of asking the auditor questions regarding the conduct of the audit, the content of the audit report or any issues arising from the audit or preparation of the report.

ASX PRINCIPLE 7: Recognise and manage risk

ASX Recommendation 7.1: The board or appropriate board committee should establish policies on risk oversight and management.

PPK: The Board of PPK:

• recognise that effective management of risk is an integral part of good management and vital to the continued growth and success of the PPK Group of Companies;
• is responsible for the oversight of the group's risk management and control framework including the development of risk profiles as a part of the overall business and strategic planning process; and
• has implemented a policy framework designed to ensure that the group's risks are identified, analysed, evaluated, monitored, and communicated within the organisation on an on-going basis, and that adequate controls are in place and functioning effectively.

The PPK Risk Management and Control Policy Framework incorporates the maintenance of appropriate policies, procedures and guidelines which address the Company's unique operating environment and is utilised by the Board as a means of identifying opportunities and avoiding or mitigating losses in the context of its businesses.

The Managing Director has ultimate responsibility for control and management of operational risk and the implementation of avoidance or mitigation measures within the group and may delegate control of these risks to the appropriate level of management at each site.

The Board regularly monitors the operational and financial performance of individual group companies and the consolidated entity against budget and other key performance measures. The Board also receives and reviews advice on areas of operational and financial risk and develops strategies, in conjunction with management, to mitigate those risks.

Each month, a report is presented to the Board by the Managing Director. The reports encompass matters including actual sales, costs and profitability against budgeted forecasts, work place safety, compliance with tax and superannuation legislation and environmental conformance. Reports are prepared and submitted on a monthly basis by the Group Financial Controller in relation to the overall financial position of the Group. The Board is regularly briefed by the Managing Director and senior management on market and operational factors which may impact on the performance of the Group.

ASX Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the board in writing that:

7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board;

7.2.2 the company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

PPK: The Managing Director and Group Financial Controller of PPK report in writing to the Board that the:

• statement given in accordance with ASX Best Practice Recommendation 4.1 (Integrity of Financial Statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board; and
• Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

ASX Recommendation 7.3: Provide the information indicated in Guide to reporting on Principle 7.

PPK: PPK has made a description of its risk management policy and internal compliance and control system publicly available and posted it to its website in the designated corporate governance area at www.ppkgroup.com.au.

ASX PRINCIPLE 8 :Encourage Enhanced Performance

ASX Recommendation 8.1 Disclose the process for performance evaluation of the board, its committees and individual directors, and key executives.

PPK: The Board has adopted an on-going, self-evaluation process to measure its own performance and the performance of its committee during the reporting period.

The Chairman meets periodically with individual directors to discuss the performance of the Board and the director. In addition, an evaluation is undertaken by the Chairman of the contribution of directors retiring by rotation prior to the Board endorsing their candidature.

The review process involves consideration of the all of the Board's key areas of responsibility and accountability and is based on an amalgamation of factors including capability, skill levels,

understanding of industry complexities, risks and challenges, and value adding contribution to the overall management of the business.

The outcomes of the self-assessment program are used to enhance the effectiveness of individual directors and the Board collectively.

The performance of key executives is monitored by means of scrutiny by the Board of regular monthly reports provided by management regarding the group financial performance and forecasted results, presentations and operational reports, and the achievement of predetermined performance objectives.

Enhanced effectiveness of the Board and management is also addressed through:

Board Meetings

The frequency of Board meetings and director's attendance at those meetings is detailed within the Directors' Report. Directors are expected to prepare for meetings in a manner which will enable them to attend and participate at the meeting.

Directors are also required to make on-site visits and attend workshops as required.

Board Papers & Agendas

Board agendas are structured throughout the year in order to ensure that each of the significant responsibilities of the Board is addressed.

Directors receive board packs prior to each meeting which detail financial, operational and strategy reports from senior management who are available to discuss reports with the Board.

Access to information.

All directors have access to company records and information, and receive regular detailed financial and operational reports from senior management.

The Company Secretary is available to all Directors and may be consulted on on-going issues of corporate governance, the PPK Constitution and the law. In addition, the Chairman and other independent non-executive directors regularly consult with the Managing Director and Financial Controller, and may confer and request additional information from any PPK employee.

Management are available to discuss reports, and any issue arising, with the Board as required.

The Board collectively, each Board Committee and each individual Director has the right, following appropriate consultation, to seek independent professional advice at PPK's expense to help them carry out their responsibilities.

A copy of the process for performance evaluation of the board, its committees and individual directors, and key executives is available in the designated area for corporate governance on the Company website at www.ppkgroup.com.au.

ASX PRINCIPLE 9: Remunerate fairly and responsibly

ASX Recommendation 9.1: Provide disclosure in relation to the company's remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

PPK: The broad remuneration policy objective of PPK is to ensure that the emoluments provided properly reflect the person's duties and responsibilities and is designed to attract, retain and motivate executives of the highest possible quality and standard to enable the organisation to succeed.

PPK is committed to making timely disclosure of all relevant information relating to its remuneration practices and policies in the context of its reporting obligations in the Company's Statement of Corporate Governance Practices, its Annual Report and pursuant to continuous disclosure requirements.

The Company's policies relating to the remuneration of Key Management Personnel and other executives and the level of their remuneration are set out in the Directors' Report on pages 10-17 of this Annual Report and Notes 5 and 30 to the Financial Statements.

ASX Recommendation 9.2 The board should establish a remuneration committee.

PPK: PPK has elected not to adopt this recommendation because it considers that its existing remuneration practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that PPK is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board and management structure and composition.

The PPK Board consists of only five (5) members. It is considered that further division of the Board for the purposes of establishing a formal remuneration committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

The small size of the PPK Board, the nature of its business and its management structure, means that PPK has the present capacity to giving due consideration to the overall remuneration policies and strategies of the company during the conduct of its regular board meetings and by appropriate recourse to relevant market data and, where applicable, to external executive remuneration consultants.

ASX Recommendation 9.3: Clearly distinguish the structure of non-executive directors' remuneration from that of executives.

PPK: The aggregate remuneration of non-executive directors is approved by shareholders.

Individual directors' remuneration is determined by the Board within the approved aggregate total (currently up to a maximum of $275,000 per year as determined at the 2003 Annual General Meeting). In determining the appropriate level of director's fees, data from surveys undertaken of other public companies similar in size or market section to PPK is taken into account.

Non-executive directors of PPK are:

• not entitled to participate in performance based remuneration practices unless approved by shareholders.
• remunerated by means of the payment of cash benefits.

PPK does not currently have in place a retirement benefit scheme or allowance for its non-executive directors.

Executive directors do not receive directors' fees.

A review of the compensation arrangements for the Managing Director, Key Management Personnel and other exeutives is conducted by the full Board at a duly constituted Directors' Meeting. The review is performed annually and is based on criteria including the individual's performance, market rates paid for similar positions and the results of the Company during the relevant period.

ASX Recommendation 9.4 Ensure the payment of equity based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.

PPK: The PPK Executive Incentive Scheme (PEIS) has been approved by shareholders and provides the Board with the discretion to grant options and provide loans to eligible executives for the purpose of acquiring scheme shares.

The Board ensures that the payment of equity-based executive remuneration is made in accordance with thresholds established by the PEIS and exercises its discretion under the scheme in a manner consistent with the broad remuneration policy objectives of the Company.

ASX Recommendation 9.5: Provide the information indicated in Guide to reporting on Principle 9.

PPK: A copy of the PPK Remuneration Policyis publicly available in the designated corporate governance area of its website at www.ppkgroup.com.au.

ASX PRINCIPLE 10: Recognise the legitimate interests of stakeholders.

ASX Recommendation 10.1: Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.

PPK: PPK is committed to the operation of its business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of the company and the industry in which it operates.

The Board has approved a Code of Conduct and Ethics ("Code") which applies to all directors, executives, management and employees without exception.

In addition, the conduct of directors and executives is also governed by Code of Conduct for Directors and Executives formulated in response to ASX Recommendation 3.1.

Copies of the Code and Code of Conduct for Directors and Executives are available within the designated corporate governance area of the company website at www.ppkgroup.com.au.

INCOME STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

		CONSOLIDATED ENTITY	PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Sales Revenue from continuing operationsCost of sales	4,251(2,527)	2,837(1,683)	--	--
GROSS PROFITInterest ReceivedRental Income from investment propertiesGain on sale of available-for-sale financial assetsGain on sale of plant and equipmentFair value adjustment on derivativesForeign exchange (losses) / gainsOther IncomeDistribution received from controlled trustWarehouse & Distribution expensesSelling ExpensesAdministrative expensesIntercompany loan write-offsImpairment of available-for-sale financial assetsFinance costs	1,7249684,3961,309-116(84)89-(47)(74)(3,816)-(2,370)(1,509)	1,1542574,403-1,3052,644(55)227-(15)(188)(3,487)--(146)	-67------349--(151)(2)(487)(1,229)	-98-----162---(159)15,980--
PROFIT/(LOSS) FROM CONTINUING OPERATIONSBEFORE INCOME TAX EXPENSE	702	6,099	(1,453)	16,081
Income tax (expense)/ credit attributable to profit3	(95)	(1,478)	63	(192)
PROFIT/(LOSS) AFTER INCOME TAX FROMCONTINUING OPERATIONS	607	4,621	(1,390)	15,889
Profit/(loss) after income tax from discontinued operations33	-	5,490	-	(1,098)
PROFIT/(LOSS) FOR THE YEAR AFTER INCOME TAX	607	10,111	(1,390)	14,791
Overall OperationsBasic earnings per share ( cents per share )7Diluted earnings per share ( cents per share )7Continuing Operations	1.01.0	15.915.9
Basic earnings per share ( cents per share )Diluted earnings per share ( cents per share )	1.01.0	7.27.2
Discontinued OperationsBasic earnings per share ( cents per share )Diluted earnings per share ( cents per share )	0.00.0	8.78.7
Dividends per share	11.5	7.0

The accompanying notes form part of these financial statements

BALANCE SHEETS

AS AT 30 JUNE 2008

			CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
CURRENT ASSETS
Cash and cash equivalentsTrade and other receivablesInventories	8910	1,3493,2631,051	6242,915741	-31,443-	25031,224-
Other current assets	11	362	362	129	38
Assets classified as held for sale	33	6,025703	4,642-	31,572-	31,512-
TOTAL CURRENT ASSETS		6,728	4,642	31,572	31,512
NON-CURRENT ASSETSTrade and other receivablesFinancial assetsInvestment PropertiesOther Property, plant and equipmentDeferred tax assetsIntangible assetsDerivatives	9121314151617	7,2163,27640,4662,1492,0708921,347	5,6126,69741,2562,1871,276913890	43941,373--292--	66741,860--24919-
TOTAL NON-CURRENT ASSETSTOTAL ASSETS		57,41664,144	58,83163,473	42,10473,676	42,79574,307
CURRENT LIABILITIESTrade and other payablesInterest Bearing LiabilitiesCurrent tax liabilitiesProvisionsOther current liabilities	1819152021	1,0272,856866310-	1,1641,3743,254538343	15,932-866--	16,414-3,254--
TOTAL CURRENT LIABILITIES		5,059	6,673	16,798	19,668
NON-CURRENT LIABILITIESInterest Bearing LiabilitiesDeferred tax liabilitiesProvisions	221520	19,562876338	8,4341,117290	18,000179-	6,00012-
TOTAL NON-CURRENT LIABILITIES		20,776	9,841	18,179	6,012
TOTAL LIABILITIES		25,835	16,514	34,977	25,680
NET ASSETS		38,309	46,959	38,699	48,627
SHAREHOLDERS' EQUITY
Contributed equityReservesRetained earnings	2324	32,033(152)6,428	33,57356712,819	32,03386,658	33,573815,046
TOTAL SHAREHOLDERS' EQUITY		38,309	46,959	38,699	48,627

The accompanying notes form part of these financial statements

C ASH FLOW STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

		CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
CASH FLOWS FROM OPERATING ACTIVITIESCash receipts from customersCash payments to suppliers and employeesOther revenueDividends and distributions receivedInterest receivedIncome tax ( paid ) / refundedOther taxes paid	8,556(6,434)6623898(3,210)(199)	38,285(38,074)3,883-257(175)(851)	-(369)--67(2,201)-	-(397)162-98(1,174)-
Net cash (used in) / provided by operating activities31 (a)	(300)	3,325	(2,503)	(1,311)
CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of subsidiariesProceeds from sale of property, plant and equipmentPurchase of property, plant and equipmentProceeds from sale of available-for-sale financial assetsPayments for available-for-sale financial assetsPayment for convertible notesPayments for investment in derivativesPayment for intangibles	--(733)3,772(2,440)(1,927)(340)(99)	51,4543,707(755)-(4,567)--(364)	-------	19,446-----(19)
Net cash (used in) / provided by investing activities	(1,767)	49,475	-	19,427
CASH FLOWS FROM FINANCING ACTIVITIESPayment for buyback of shares( Loans to ) / Borrowings from related companiesProceeds from borrowingsLoans repaidRepayment of borrowingsDividends paid by Parent entityInterest paid	(1,540)-11,498229(397)(6,998)(1,509)	(5,312)---(40,413)(4,562)(1,503)	(1,540)(208)12,000228-(6,998)(1,229)	(5,312)11,407--(18,731)(4,562)(784)
Net cash provided by / (used in) financing activities	1,283	(51,790)	2,253	(17,982)
Net (decrease )/increase in cash heldCash at the beginning of the financial year	(784)(377)	1,010(1,387)	(250)250	134116
Cash at the end of the financial year31 (b)	(1,161)	(377)	-	250

The accompanying notes form part of these financial statements

STATEMENTS OF CHANGES IN EQUIT Y

FOR THE YEAR ENDED 30 JUNE 2008

	ISSUEDCAPITAL$000s	RETAINEDEARNINGS$000s	OTHERRESERVES$000s	TOTAL$000s	MINORITYINTEREST$000s	TOTALEQUITY$000s
CONSOLIDATED ENTITY
At 1 July 2006	38,885	7,270	32	46,187	151	46,338
Fair value adjustment on available-for-sale financial assetsless deferred tax impact	--	--	799(240)	799(240)	--	799(240)
Total income and expense recognised directly in equity	-	-	559	559	-	559
Profit for the year	-	10,111	-	10,111	-	10,111
Total income and expense for the year	-	10,111	559	10,670	-	10,670
Dividends paidShares repurchasedSale of subsidiaries	-(5,312)-	(4,562)--	--(24)	(4,562)(5,312)(24)	--(151)	(4,562)(5,312)(175)
At 30 June 2007	33,573	12,819	567	46,959	-	46,959
Fair value adjustment on available-for-sale financial assetsRealised gain on disposal of available-for-sale financial assetsless deferred tax impact	---	---	(579)(449)309	(579)(449)309	---	(579)(449)309
Total income and expense recognised directly in equity	-	-	(719)	(719)	-	(719)
Profit for the year	-	607	-	607	-	607
Total income and expense for the year	-	607	(719)	(112)	-	(112)
Dividends paidShares repurchased	-(1,540)	(6,998)-	--	(6,998)(1,540)	--	(6,998)(1,540)
At 30 June 2008	32,033	6,428	(152)	38,309	-	38,309
PARENT ENTITYAt 1 July 2006	38,885	4,817	8	43,710	-	43,710
Profit for the year	-	14,791	-	14,791	-	14,791
Total income and expense for the year	-	14,791	-	14,791	-	14,791
Dividends paidShares repurchased	-(5,312)	(4,562)-	--	(4,562)(5,312)	--	(4,562)(5,312)
At 30 June 2007	33,573	15,046	8	48,627	-	48,627
Profit for the year	-	(1,390)	-	(1,390)	-	(1,390)
Total income and expense for the year	-	(1,390)	-	(1,390)	-	(1,390)
Dividends paidShares repurchased	-(1,540)	(6,998)-	--	(6,998)(1,540)	--	(6,998)(1,540)
At 30 June 2008	32,033	6,658	8	38,699	-	38,699

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial report are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

The financial report includes separate financial statements for PPK Group Limited as an individual entity and the consolidated entity consisting of PPK Group Limited and its subsidiaries.

PPK Group Limited is a company limited by shares, incorporated in Australia. Its shares are publicly traded on the Australian Securities Exchange.

(a) Basis of Preparation

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authorative pronouncements of the Australian Accounting Standards Board, and the Corporations Act 2001.

The Group has adopted AASB 7 Financial Instruments: Disclosures and all consequential amendments, effective for reporting periods beginning on or after 1 January 2007. The adoption of this standard has only affected the disclosure in these financial statements. There has been no effect on profit and loss or the financial position of the entity.

The financial statements have been prepared on an accruals basis and are based on historical costs, except for available-for-sale financial assets and derivatives which have been measured at fair value.

Compliance with Australian equivalents to International Financial Reporting Standards (AIFRS) ensures that the consolidated financial statements and notes comply with International Financial Reporting Standards (IFRS).

The accounting policies have been consistently applied to the entities of the consolidated entity unless otherwise stated.

The Financial Report is presented in Australian currency.

The Financial Report of PPK Group Limited for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the directors on 26 September 2008.

(b) Principles of Consolidation

The consolidated financial statements of the consolidated entity include the accounts of the Company, being the parent entity, and its subsidiaries ("the Group"). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies.

A list of all subsidiaries is contained in Note 12 to the accounts.

All intercompany balances and unrealised profits from transactions between subsidiaries have been eliminated. Where a subsidiary has been acquired or disposed of during the year, its operating results have been included from the date of acquisition or until the date control ceased. Minority interests in the equity and results of entities controlled by the Company are shown as a separate item in the consolidated accounts.

(c) Goodwill on Consolidation/Discount on Acquisition

Goodwill on consolidation is recorded initially at the amount by which the purchase price for a business or an ownership interest in a subsidiary exceeds the fair value of identifiable net assets acquired and contingent liabilities assumed. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination's synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Impairment losses on goodwill cannot be reversed.

AASB 3 Business Combinations prohibits goodwill from being amortised and instead requires an impairment test to be carried out.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(d) Revenue and Revenue Recognition

Sales revenue

Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products to entities outside the consolidated entity. Sales revenue is recognised when the goods are provided (significant risks and rewards of ownership have passed).

Rental Income

Rental income on investment properties is accounted for on a straight-line basis over the lease term. Contingent rentals are recognised as income in the periods when they are earned.

Interest income

Interest income is recognised as it accrues using the effective interest rate method.

Asset sales

Gains and losses on sale of assets is recognised on a net basis.

The gain or loss on disposal of assets is brought to account at the date an unconditional contract of sale is signed, or if a conditional contract is signed, the date it becomes unconditional. In the case of real estate sales under AASB 118 it becomes unconditional when title passes.

Under the previous accounting policy gross revenue received on disposal of Property Plant and Equipment was included in Revenue.

Dividends

Dividends are recognised when the right to receive payment is established.

(e) Inventories

Inventories are valued at the lower of cost and net realisable value. The cost of work in progress and finished goods is derived on an absorption basis which includes an appropriate proportion of manufacturing overheads allocated on the basis of normal operating usage.

(f) Trade Receivables

Trade receivables are recognised initially at original invoice amounts less an allowance for uncollectible amounts.

Trade receivables are due for settlement within 30 - 45 days and collectibility is assessed on an ongoing basis.

Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms.

Objective evidence of impairment include financial difficulties of the debtor, default of payment terms or debts more than 60 days past due. On confirmation that the trade receivable will not be collectible the gross carrying value of the asset is written off against the associated provision.

From time to time the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to a change in the timing of payments rather than changes to the amount owed and are not, in the view of the directors, sufficient to require the derecognition of the original instrument.

(g) Income Tax

The income tax expense for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Exceptions are made for certain temporary differences arising on initial recognition of an asset or liability if they arose in a transaction other than a business combination that at the time of the transaction did not affect either accounting profit or taxable profit.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and tax losses.

The amount of deferred tax assets which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

The consolidated entity and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the Tax Consolidation Regime.

As a consequence the parent entity, as the head entity in the tax consolidated group is responsible for recognising the current tax assets and liabilities and deferred tax assets arising from unused tax losses for the tax consolidated group.

Deferred tax assets and liabilities are accounted for by each entity separately using the stand alone taxpayer approach with movements in deferred tax balances being accounted for through the income statement. The tax consolidated group has entered into a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their individually calculated share of the taxable income.

The amounts receivable/payable under tax funding arrangements are due upon notification by the head entity. These amounts are recognised as current intercompany receivables or payables.

(h) Investment Property & Property, Plant and Equipment

Investment Properties

Investment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are carried at cost, less depreciation and any impairment losses.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group.

Depreciation on investment properties is calculated on a straight-line basis over the estimated useful life of the asset of 50 years. Land is not depreciated.

The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.

Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset's carrying amount and are included in the income statement in the year that the item is derecognised.

Other Property, plant and equipment

Other Property, plant and equipment are brought to account at cost less, where applicable, any accumulated depreciation or amortisation.

The cost of fixed assets constructed within the consolidated entity includes the cost of materials used in construction, direct labour and an appropriate proportion of fixed and variable overheads.

The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The gain or loss on disposal of all fixed assets is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in profit before income tax of the consolidated entity in the year of disposal.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
	Straight Line
Buildings	2 %
Leasehold Improvements	over the term of the lease
Plant & Equipment	3-50 %
Leased Plant & Equipment	3-33 %

Non-current assets classified as held for resale

Non-current assets classified as held for sale are those assets whose carrying amounts will be recovered principally through a sale transaction rather than through continuing use. These assets are stated at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortised.

Interest expense continues to be recognised on liabilities of a disposal group classified as an asset held for sale.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for subsequent increases in fair value less costs to sell of an asset but not exceeding any cumulative impairment losses previously recognised.

A discontinued operation is a component of the group that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the income statement.

(i) Investments and Financial Instruments

Recognition and Initial Measurement

Financial instruments, incorporating financial assets and liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within time frames established by marketplace convention.

Financial instruments, are initially measured at fair value plus transaction costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire.

The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Classification and subsequent measurement

(i) Financial assets at fair value through profit or loss

Financial assets are classified at fair value through the profit or loss when they are held for trading for the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes infair value are included in profit or loss in the period in which they arise.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with a fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

The host debt contract of a convertible note is classified as loans and receivables. The host debt contract is measured initially at the residual amount after separating the embedded option derivative.

The host debt contract is subsequently measured at amortised cost using the effective interest rate method.

(iii) Held-to-maturity investments

Held to maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group's intention to hold the investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.

(iv) Available-for-sale financial assets

Available-for-sale financial assets comprise investments in listed and unlisted entities and any non-derivatives that are not classified as any other category, and are classified as non-current assets. Unlisted investments do not have a quoted market price in an active market and their fair value cannot be reliably measured, so they remain valued at their cost after initial recognition. Listed investments are valued subsequent to initial recognition at fair value based on current bid prices.

Changes in the value of listed investments available-for-sale financial assets are recognised in equity, unless assessment is made that there is objective evidence that a available-for-sale financial assets have been impaired. A prolonged or significant decline in the value of available-forsale financial assets is considered to determine whether any impairment has arisen. Impairment losses are recognised in the income statement.

Dividend income from available-for-sale financial assets is recognised in the income statement as part of revenue from continuing operations when the Group's right to receive payments is established.

They are included in non-current assets unless management intends to dispose of the investment within 12 months.

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

(vi) Derivatives

Share options embedded in a convertible note is not closely related to the debt host contract and are separated from the debt host contract and accounted for as a separate derivative. The share options are initially measured at fair value using the Black Scholes model or the listed market price if one exists. Other share options are classified as a derivative and initially measured at fair value net of transaction costs. Subsequent adjustments to fair value of the share options are taken to profit or loss.

The group does not use derivative financial instruments such as forward exchange contracts and interest rate swaps to mitigate risks associated with interest rate and foreign exchange fluctuations.

(vii) Subsidiaries

Investments in subsidiaries are accounted for in the consolidated financial statements as described in note 1(a) and in the parent entity financial statements at cost in accordance with the cost alternative permitted in separate financial statements under AASB 127 Consolidated and Separate Financial Statements.

(viii) Held for trading financial assets

Investments classified as Held for Trading are measured at fair value with gains or losses recognised in the income statement. A financial asset is classified Held for Trading if acquired principally for the purpose of selling in the short term or if it is a derivative that is not designated as a hedge.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(j) Leased Assets

For leases, a distinction is made between finance leases which effectively transfers from the lessor to the lessee substantially all the risks and benefits incidental to ownership of the leased property, and operating leases under which the lessor retains all such risks and benefits. Where fixed assets are acquired by means of finance leases, the lower of the present value of lease payments or the fair value of the leased property is established as an asset at the beginning of the lease term and amortised on a straight line basis over its expected useful life.

A corresponding liability is also established and each lease payment is allocated between such liability and interest expense so as to achieve a constant rate of interest on the remaining balance of the liability.

Operating lease payments are charged to the income statement on a straight line basis over the period of the lease.

(k) Foreign Currency

Transactions and Balances

Foreign currency transactions during the period are converted to Australian currency at rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currency at balance date are converted at the rates of exchange ruling at year end.

The gains and losses from conversion of short term balances, whether realised or unrealised, are recognised in the income statement.

(l) Trade and Other payables

These amounts represent unpaid liabilities for goods received and services provided to the group and parent entity prior to the end of the financial year. The amounts are unsecured and are normally settled within 30 to 60 days, except for imported items for which 90 or 120 day payment terms are normally available.

(m) Bank Loans

All loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the loans and borrowings using the effective interest method. Bank loans are subject to set-off arrangements.

(n) Employee Benefits

Provision is made for the liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the future cash outflows to be made for those benefits, discounted using national government bond rates at balance date with terms to maturity and currency that match as closely as possible the estimated future cash outflows.

The Group makes payments to defined contribution superannuation funds in order to meet superannuation guarantee legislation requirements. Contributions are recognised as expenses as they become payable.

(o) Cash

For the purposes of the cash flow statement, cash includes cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts.

(p) Intangible assets

Acquired Brand names are recorded at cost and are classified as indefinite useful life intangible assets under AASB 138 "Intangible Assets" and will be subject to annual impairment review.

Other Intangible assets such as Patents and Computer Software are recorded at cost and amortised on a straight line basis over the number of years of their expected benefit which ranges from 3 to 10 years.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(q) Impairment of Assets

At each reporting date the Group assesses whether there is an indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in the income statement where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.

(r) Finance costs

All interest costs are recognised in income in the period in which they are incurred.

(s) Share-Based Payments

The group recognises an expense for all share-based remuneration, including deferred shares and options, and amortises those expenses over the relevant vesting periods.

No expense has been recognised in respect of options granted before 7 November 2002. Shares are recognised when options are exercised and the proceeds received are allocated to share capital.

(t) Comparative Figures

Where required by Accounting standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

(u) Rounding of Amounts

The parent entity has applied the relief available under ASIC Class Order 98/100 and accordingly, amounts in the financial statements and directors' report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar.

(v) Dividends

Provision is made for dividends declared, and no longer at the discretion of the Group, on or before the end of the financial year but not distributed at balance date.

(w) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to members of PPK Group Limited, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.

Diluted earnings per share

Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(x) GST

Revenues and expenses are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.

FOR THE YEAR ENDED 30 JUNE 2008

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(y) New Accounting Standards and interpretations

The following standards, amendments to standards and interpretations have been identified as those that may impact the entity in the period of initial application. They are available for early adoption at 30 June 2008, but have not been applied in preparing this financial report:

Revised AASB 3 Business Combinations, AASB 8 Operating Segments, Revised AASB 101 Presentation of Financial Statements,

Revised AASB 123 Borrowing Costs, Revised AASB 127 Consolidated and Separate Financial Statements and AASB 2008-1

Amendments to Australian Accounting Standard - Share Based Payment: Vesting Conditions and Cancellations.

The Group has not yet determined the potential effect of these standards on the Group's financial report.

Critical accounting estimates and judgements

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates - Impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets.

Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

During the year investments in private companies, EZI-Automation and Vend-Tech Solutions were written down to nil value as the directors consider there is little likelihood of recovering any amounts from these investments. The value of this impairment is $248,000.

At balance date the down turn in the Australian share market had a significant impact on the fair value of listed investments.

The Group reviewed each of its listed investments to consider whether there was any indication that individual investments were impaired.

Based on all the information available to the Directors it was determined that the Group's investment in Frigrite Limited was impaired.

As a result an impairment loss of $2,122,000 was taken up in the income statement on this investment.

The Directors determined that no other listed investments were impaired at balance date.

No impairment has been recognised in respect of goodwill or brand names for the current financial year.

Refer to note 16 for details of assumptions used in estimating the recoverable amount of these assets.

Key judgements - Classification as Held for Sale

The Group classifies assets as held for sale where an asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and the sale is highly probable. For the sale to be assessed as highly probable, management must be committed to a plan to sell the asset (or disposal group), and an active program to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification and actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Group has land located at Arndel Park, New South Wales currently on the market for sale and consequently have classified this asset as Held for sale.

FOR THE YEAR ENDED 30 JUNE 2008

2 REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS

			CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
(a)	REVENUE
	Sale of goodsRental income from investment properties	4,2514,396	34,1124,403	--	--
	Dividends received - other partiesDistribution received from controlled trust	23-	--	-349	--
	Interest received(c)Deferred income	968-	2572	67-	98-
		9,638	38,774	416	98
(b)	OTHER INCOMENet gain on disposal of plant and equipment	-	1,305	-	-
	Net gain on disposal of subsidiaryNet gain on sale of available-for-sale financial assets	-1,309	10,729-	--	6,185-
	Fair value adjustment on derivatives	116	2,644	-	-
	Sundry income	66	323	-	162
		1,491	15,001	-	6,347
(c)	INTEREST RECEIVED
	Other persons	922	207	21	48
	Directors	44	41	44	41
	Key management personnel	2	9	2	9
		968	257	67	98
(d)	EXPENSESProfit before incometax has been determined after:
	Amortisation - leased assets	-	43	-	-
	- intangibles	101	85	-	-
		101	128	-	-
	Depreciation - buildings	478	484	-	-
	- plant and equipment	380	593	-	-
		858	1,077	-	-
	Foreign currency translation lossesImpairment of available-for-sale financial assets	84	55	-	-
	- Listed investments	2,122	-	-	-
	- Unlisted Investments	248	-	-	-
		2,370	-	-	-

FOR THE YEAR ENDED 30 JUNE 2008

2 REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS (CONT.)

	CONSOLIDATED ENTITY			PARENT ENTITY
	2008$000s	2007$000s	2008$000s	2007$000s
Interest paid- other	1,509	1,447	1,229	784
- finance lease charges	-	56	-	-
Provisions- employee entitlements	158	896	-	-
Impairment- trade receivables	-	94	-	-
- other receivablesDefined contribution superannuation expense	182296	445916	--	--
Employee benefit expenses	1,630	9,969	-	-
Rental expense on operating leases	90	909	-	-
The above revenues and expenses apply to both continuing and discontinuing operations.Refer to notes 29 and 33 for further breakdown.
(e)INDIVIDUALLY SIGNIFICANT ITEMS - Gains or ( losses )
Sale of Plastics Packaging business	-	10,708	-	6,185
Sale of York Precision Plastics	-	(159)	-	-
Sale of rental property	-	1,295	-	-
Fair value adjustment on derivatives	116	2,644	-	-
Net gain on sale of Industrea Ltd shares	1,305	-	-	-
Impairment in investment of Frigrite Limited	(2,122)	-	-	-
Impairment in investment of EZI Automation	(79)	-	-	-
Impairment in investment of Ventech Investments	(169)	-	-	-
Intercompany loan write-offIntercompany investment write-off following deregistration	--	--	(2)(487)	15,980-
	(949)	14,488	(489)	22,165
The above revenues and expenses apply to both continuing and discontinuing operations.
Refer to notes 29 and 33 for further breakdown.
3INCOME TAX EXPENSE
(a)The prima facie tax payable on the profit before income tax isreconciled to the income tax as follows:
Profit before tax from continuing operations	702	6,099	(1,453)	16,081
Profit before tax from discontinuing operations	-	10,661	-	5,401
Total Profit before tax	702	16,760	(1,453)	21,482
Prima facie tax payable at 30% (2007: 30%)	211	5,028	(436)	6,445
Intercompany loan forgiveness not deductible under tax consolidation regime	-	-	146	(4,794)
Difference between trust profit and distribution due to carried forward losses in trust	-	-	272	-
Research & Development concession	(21)	(15)	-	-
Building allowance	(78)	(86)	(24)	(24)
Capital profit on sale of assets	-	1,510	-	4,878
Sundry items	4	14	-	-
(Over) / Under provision relating to prior year	(21)	186	(21)	186
Income tax expense / (credit)	95	6,637	(63)	6,691

FOR THE YEAR ENDED 30 JUNE 2008

3 INCOME TAX EXPENSE (CONT.)

	CONSOLIDATED ENTITY		PARENT ENTITY
2008$000s	2007$000s	2008$000s	2007$000s
13%	40%	4%	31%
924(808)(21)	3,2433,208186	(166)124(21)	4,2422,263186
95	6,637	(63)	6,691
95-	1,4785,159	(63)-	1926,499
95	6,637	(63)	6,691
(170)	240	-	-

PPK Group Limited ("PPK") has formed a consolidated group for income tax purposes, effective on and from 1 July 2003, with each of its wholly owned Australian subsidiaries.

PPK, as the head entity, has recognised all current income tax assets and liabilities relating to the consolidated group.

The entities within the Group have entered into a tax sharing agreement where each subsidiary will compensate PPK for the amount of tax payable that would be calculated as if the subsidiary was a tax paying entity.

4 AUDITOR'S REMUNERATION

		CONSOLIDATED ENTITY		PARENT ENTITY
	2008$	2007$	2008$	2007$
Remuneration of the auditor of the parent entity for :- auditing or reviewing the financial report- non audit services ( accounting / technical advice )Remuneration of the auditors of subsidiaries for :- auditing or reviewing the financial report ofsubsidiaries by other auditors	74,7002,200-	244,63214,100335	-2,200-	-11,000-
	76,900	259,067	2,200	11,000

FOR THE YEAR ENDED 30 JUNE 2008

5 KEY MANAGEMENT PERSONNEL DISCLOSURES

		CONSOLIDATED ENTITY	PARENT ENTITY
	2008$	2007$	2008$	2007$
(a)Key management personnel disclosures
Short-term benefits	786,014	1,224,553	-	-
Post-employment benefits	101,722	138,375	-	-
Other long-term benefits	8,350	10,948	-	-
Termination benefits	84,000	263,706	-	-
Share-based payments	-	-	-	-
	980,086	1,637,582	-	-

Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report contained in the Directors' Report of this annual report.

(b) Equity Instruments

Details of options and rights held directly, indirectly or beneficially by key management personnel and their related parties are as follows:

	Balance	Granted as1.7.07 Remuneration Exercised	Options	Lapsed	Balance30.6.08	TotalVested30.6.08	Total30.6.08	TotalExerciseable Unexercisable30.6.08
Parent Entity Directors
Mr C.F. Ryan	300,000	-	-	300,000	-	-	-	-
Mr R.M.Beath	300,000	-	-	300,000	-	-	-	-
Mr J.I. Wowk	300,000	-	-	300,000	-	-	-	-
Mr D.A. Hoff	-	-	-	-	-	-	-	-
Other Key Management Personnel
Mr.F.J. Hardiman	-	-	-	-	-	-	-	-
Mr R.J.Nicholls	-	-	-	-	-	-	-	-
Total	900,000	-	-	900,000	-	-	-	-

	Balance	Granted as1.7.06 Remuneration Exercised	Options	Lapsed	Balance30.6.07	TotalVested30.6.07	Total30.6.07	TotalExerciseable Unexercisable30.6.07
Parent Entity Directors
Mr C.F. Ryan	300,000	-	-	-	300,000	300,000	300,000	-
Mr R.M.Beath	300,000	-	-	-	300,000	300,000	300,000	-
Mr J.I. Wowk	300,000	-	-	-	300,000	300,000	300,000	-
Mr D.A. Hoff	200,000	-	-	200,000	-	-	-	-
Other Key Management Personnel
Mr.F.J. Hardiman	-	-	-	-	-	-	-	-
Mr R.J.Nicholls	-	-	-	-	-	-	-	-
Mr P.L.Crocker	25,000	-	-	25,000	-	-	-	-
Total	1,125,000	-	-	225,000	900,000	900,000	900,000	-

FOR THE YEAR ENDED 30 JUNE 2008

5 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONT.)

(c) Shareholdings

Number of Shares held by Parent Entity Directors and Key Management Personnel

	Balance1.7.07	Received asRemuneration	OptionsExercised	Net ChangeOther	Balance30.6.08
Parent Entity Directors
Mr C.F. Ryan	500,000	-	-	-	500,000
Mr G.R. Molloy	8,547,270	-	-	205,130	8,752,400
Mr R.M.Beath	42,821	-	-	-	42,821
Mr J.I. Wowk	87,302	-	-	-	87,302
Mr D.A. Hoff	856,960	-	-	-	856,960
Other Key Management Personnel
Mr.F.J. Hardiman	324,172	-	-	(314,172)	10,000
Mr R.J.Nicholls	70,625	-	-	(43,625)	27,000
	10,429,150	-	-	(152,667)	10,276,483

	Balance1.7.06	Received asRemuneration	OptionsExercised	Net ChangeOther	Balance30.6.07
Parent Entity Directors
Mr C.F. Ryan	500,000	-	-	-	500,000
Mr G.R. Molloy	7,952,905	-	-	594,365	8,547,270
Mr R.M.Beath	42,821	-	-	-	42,821
Mr J.I. Wowk	87,302	-	-	-	87,302
Mr D.A. Hoff	856,960	-	-	-	856,960
Other Key Management Personnel
Mr.F.J. Hardiman	418,172	-	-	(94,000)	324,172
Mr R.J.Nicholls	70,625	-	-	-	70,625
Mr P.L. Crocker	-	-	-	-	-
	9,928,785	-	-	500,365	10,429,150

(d) Loans

Loans advanced to Parent Entity Directors and Key Management Personnel

2008	Balance1.7.07$	Net ChangeOther$	Balance30.6.08$	Interest Paidor Payable$	HighestIndebtednessDuring the Year$
Parent Entity Directors
Mr D.A. Hoff	437,500	1,750	439,250	43,908	439,408
Other Key Management Personnel
Mr.F.J. Hardiman	83,375	(83,375)	-	1,326	83,985
Mr R.J.Nicholls	16,467	(16,467)	-	260	16,727
	537,342	(98,092)	439,250

FOR THE YEAR ENDED 30 JUNE 2008

5 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONT.)

2007	Balance1.7.06	Net ChangeOther	Balance30.6.07	Interest Paidor Payable	HighestIndebtednessDuring the Year
Parent Entity Directors	$	$	$	$	$
Mr D.A. Hoff	437,500	-	437,500	40,903	439,307
Other Key Management Personnel
Mr.F.J. Hardiman	83,375	-	83,375	7,811	83,744
Mr R.J.Nicholls	16,905	(438)	16,467	1,562	16,905
	537,780	(438)	537,342

Loans to Key Management Personnel excluding directors are made pursuant to the Plaspak Executive Incentive Scheme to assist in the exercise of options to acquire shares in the Parent Entity. Loans are limited to 70% of the current market value of the shares at the time of the loan. Loans are for a term of 5 years or immediately repayable on termination of employment.

Interest only is payable monthly in arrears at a rate which is 3.25% above the current Reserve Bank of Australia Cash Rate. Security for the loans is by way of a holding lock over the shares acquired with the loans. The loans are limited recourse, limited to the realisable value of the shares. The lender has the right to sell or buy back the shares in the event that the value of the shares held as security falls below the purchase price of the shares or the amount lent to acquire the shares. The loan to the Managing Director, as approved by shareholders, is on identical terms.

(e) Other transactions with directors

Refer to Note 30 for further details of transactions with directors and director related entities.

FOR THE YEAR ENDED 30 JUNE 2008

6 DIVIDENDS

			CONSOLIDATED ENTITY	PARENT ENTITY
		2008$000s	2007$000s	2008$000s	2007$000s
(a)	Dividends paid
	Interim ordinary dividend of 3.25c per share - 100% franked at 30% tax rate( prior year 3.25c per share )	1,954	2,005	1,954	2,005
	Final ordinary dividend of 3.25c per share - 100% franked at 30% tax rate(prior year 3.75c per share - 100% franked)	1,987	2,557	1,987	2,557
	Special dividend of 5.00c per share - 100% franked at 30% tax rate	3,057	-	3,057	-
		6,998	4,562	6,998	4,562
(b)	Dividends declared after balance date
	Final ordinary dividend of 3.25c per share - 100% franked and amountingto $1,925,710 not included as declared after balance date.
(c)	Franked dividends
	The franked portions of the final dividends recommended after 30th June2008 will be franked out of existing franking credits or out of franking creditsarising from the payment of income tax in the year ending 30th June 2008.
	Franking credits available for subsequent financial years based on a tax rateof 30% (2007 - 30%)	4,475	7,084	4,475	7,084

The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:

(a) franking credits that will arise from the payment of the current tax liability

(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date

(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date, and

(d) franking credits that may be prevented from being distributed in subsequent financial years.

The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries were paid as dividends.

The impact on the franking account of dividends recommended after year end but before the financial report was authorised for issue and not recognized as a liability at year end will be a reduction on the franking account of $825,000 (2007: $2,163,000).

Under legislation that took effect on 1st July 2002, the amount recorded in the franking account is the amount of Australian income tax paid, rather than franking credits based on after tax profits, and amounts debited to that account in respect of dividends paid after 30 June 2002 are the franking credits attaching to those dividends rather than the gross amount of the dividends.

Notes to and forming part of the Financial Statements (cont.) FOR THE YEAR ENDED 30 JUNE 2008

7 EARNINGS PER SHARE

7.2
8.7
15.9
7.2
8.7
15.9
2007
$000s
4,621
5,490
10,111
4,621
5,490
10,111
No.
63,783,326
-
63,783,326

(c) Classification of Securities

The only securities that have been classified as potential ordinary shares and included in calculation of diluted EPS are options outstanding.

FOR THE YEAR ENDED 30 JUNE 2008

8 CASH AND CASH EQUIVALENTS

			CONSOLIDATED ENTITY	PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
Cash at bank and on handShort-term bank deposits		1741,175	374250	--	-250
Cash at bank and on hand		1,349	624	-	250
Cash at bank consists of temporary surplus funds which are noninterest bearing
The effective interest rate on short-term bank deposits was 7.5%(2007; 6.2%), These deposits have an average maturity of 30 days.
Reconciliation of CashThe above figures are reconciled to the cash at the end of the financialyear as shown in the statement of cash flows as follows:
Cash and cash equivalents		1,349	624	-	250
Bank overdrafts	19	(2,510)	(1,001)	-	-
		(1,161)	(377)	-	250
TRADE AND OTHER RECEIVABLES
Current
Trade receivablesLess: Provision for impairment of receivables	(a)	1,138(145)	862(145)	--	--
		993	717	-	-
Other Receivables	(b)	896	642	-	56
Less: Provision for impairment of receivables		(626)	(444)	-	-
Loans and receivables		270	198	-	56
- wholly owned subsidiaries	(c)	-	-	31,443	31,168
- other loans - secured	(d)	2,000	2,000	-	-
		2,000	2,000	31,443	31,168
		3,263	2,915	31,443	31,224
Non-CurrentLoans and receivables
- directors of parent entity - secured	(e)	439	439	439	439
- other key management personnel - secured	(e)	-	228	-	228
- other loans - secured- convertible notes	(d)(f)	4,7801,997	4,945-	--	--
Other Non current Assets of continuing operations		7,216	5,612	439	667

FOR THE YEAR ENDED 30 JUNE 2008

9 TRADE AND OTHER RECEIVABLES (CONT.)

(a) Trade Receivables

Current trade receivables are non-interest bearing and are generally 30 day terms. A provision for impairment is raised when there is objective evidence that it is considered unlikely that any amounts will be recovered.

(b) Other Receivables

Other receivables are non-interest bearing and are generally 30 day terms. A provision for impairment has been raised for the full amount of two loans in other receivables where it is considered unlikely that any amounts will be recovered.

(c ) Wholly owned subsidiaries

Loans to wholly owned subsidiaries are non-interest bearing and there are no fixed terms for the repayment of loans between parties.

(d) Other loans

Other loans are funds advanced to the purchaser of the customs packaging division on 29 June 2007. The amounts are secured over both property and fixed and floating charges.

Interest is charged on these loans at the rate of 2.75% above the Reserve Bank official cash rate. The average interest rate for the year was 9.57%.

The interest rate current for outstanding loans at balance date is 10%.

(e) Loans to directors and key management personnel

Loans to key management personnel excluding directors are made pursuant to the Plaspak Executive Incentive Scheme to assist in the exercise of options to acquire shares in the Parent Entity. Loans are limited to 70% of the current market value of the shares at the time of the loan. Loans are for a term of 5 years or immediately repayable on termination of employment.

Interest only is payable monthly in arrears at a rate which is 3.25% above the current Reserve Bank of Australia Cash Rate. Security for the loans is by way of a holding lock over the shares acquired with the loans. The loans are limited recourse, limited to the realisable value of the shares. The lender has the right to sell or buy back the shares in the event that the value of the shares held as security falls below the purchase price of the shares or the amount lent to acquire the shares. The loan to the Managing Director, as approved by shareholders, is on identical terms. The average interest rate for the year was 10.1%, the interest rate current for outstanding loans at balance date was 10.5%.

(f) Convertible notes

Convertible notes are funds invested in listed companies that can be converted to shares. The amounts are secured over a first or second ranking fixed and floating charge over the companies assets.

On acquisition the note is split into its loan component and is recorded at amortised cost and is classified as a receivable and its derivative element is recorded at its fair value and is classified as a derivative. The convertible notes maybe redeemed by the issuing company, prior to conversion into shares, for 110% of their face value.

The discount to their redemption value is taken as interest received over the life of the note to reflect this redemption value.

Interest is received on these notes at a fixed rate each quarter. The weighted average interest rate for the year on these notes was 13.6%.

FOR THE YEAR ENDED 30 JUNE 2008

9 TRADE AND OTHER RECEIVABLES (CONT.)

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Movement in balance of convertible notes in listed companies
Opening Balance	-	-	-	-
Initial investment in convertible note	2,157	465	-	-
Less part of cost assigned to cost of embedded option	(230)	-	-	-
Additions at cost	1,927	465	-	-
Conversion of convertible notes into available-for-sale financial assets	-	(465)
Interest revenue	70	-	-	-
	1,997	-	-	-

Provision for Impairment of Receivables

Current trade, term and other receivables and loans are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is an objective evidence that an individual trade or term receivable is impaired. These amounts have been included in the administrative expenses item.

Movements in the provision for impairment are as follows:

	Openingbalance	Charge forthe year	Amountswritten off	Closingbalance
Consolidated Group 2008
Current
Trade receivables	145	-	-	145
Other receivables	444	182	-	626
	589	182	-	771
Consolidated Group 2007
Current
Trade receivables	164	95	(114)	145
Other receivables	-	444	-	444
	164	539	(114)	589

The parent entity has no provisions for impairment of receivables, in the current year or the prior year. There are no provisions for impairment for Non-current Trade and other receivables for the current year or prior year for both the Group and the parent entity.

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Trade receivables ageing analysis
The ageing analysis of trade receivables for amounts not impaired for the Group and parent is as follows:
Not past due	600	687	-	-
Past due 1 - 30 days	302	-	-	-
Past due 31 - 60 days	90	1	-	-
Past due over 60 days	1	29	-	-
	993	717	-	-

With respect to receivables that are neither impaired or past due, there are no indications as at reporting date that the debtors will not meet their obligations as they fall due. All other loans or receivables past due are impaired at balance date and hence excluded from the above analysis.

FOR THE YEAR ENDED 30 JUNE 2008

10 INVENTORIES

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
On hand
Finished goods at cost	530	511	-	-
Provision for stock obsolescence	(10)	(10)	-	-
	520	501	-	-
Work in Progress	286	61	-	-
Raw materials	221	179	-	-
In transit	24	-	-	-
	1,051	741	-	-
Refer to note 22 for details of inventory pledged as security
OTHER CURRENT ASSETS
Prepayments	362	362	129	38
	362	362	129	38

The carrying amount of prepayments approximates fair value.

Notes to and forming part of the Financial Statements (cont.) FOR THE YEAR ENDED 30 JUNE 2008

12 FINANCIAL ASSETS

			BENEFICIAL PERCENTAGE OWNEDBY CONSOLIDATED ENTITY	PARENT ENTITY
(a)	Investments (at cost) in subsidiary comprise:	2008%	2007%	2008$000s	2007$000s
	Rutuba Pty Limited	Australia	100%	100%	-	-
	Seven Hills Property Pty Ltd	Australia	100%	100%	8,051	8,051
	PPK Property Trust	Australia	100%	100%	6,339	6,339
	Dandenong South Property Pty Ltd	Australia	100%	100%	9,430	9,430
	PPK Aust. Pty Ltd	Australia	100%	100%	5,497	5,497
	Trigger Sprays Pty Ltd	Australia	100%	100%	-	-
	PPK Investment Holdings Pty Ltd	Australia	100%	100%	-	-
	PPK Properties Pty Ltd	Australia	100%	100%	-	-
	Landmark Property Syndicate No 4	Australia	100%	100%	-	-
	York Group Limited	Australia	100%	100%	12,056	12,056
	Rambor Pty Ltd	Australia	100%	100%	-	-
	King Cobra Mining Equipment Pty Ltd	Australia	100%	100%	-	-
					41,373	41,373

The proportion of ownership interest is equal to the proportion of voting power held.

The above investments in subsidiaries are all in ordinary class shares.

The following wholly owned subsidiaries that had been non-trading and had no assets or liabilities were deregistered during the year.

JWS Management Services Pty Ltd	Australia	100%	100%	-	-
U.S. Masters Pty. Limited	Australia	100%	100%	-	-
Reckas Pty. Limited	Australia	100%	100%	-	-
PPK Mistlon Pty Ltd	Australia	100%	100%	-	-
PPK Townsville Pty Limited	Australia	100%	100%	-	487
PPK SA Pty Ltd	Australia	100%	100%	-	-
Neta Brymac Pty Ltd	Australia	100%	100%	-	-
PPK Vic Pty Ltd	Australia	100%	100%	-	-
Advanced Power Products Pty Ltd	Australia	100%	100%	-	-
ACN 081 798 334 Pty Ltd	Australia	100%	100%	-	-
				-	487

41,373 41,860

FOR THE YEAR ENDED 30 JUNE 2008

12 FINANCIAL ASSETS (CONT.)

CONSOLIDATED ENTITY		PARENT ENTITY
2008$000s	2007$000s	2008$000s	2007$000s
			-
			--
			-
			-
(2,912)	(696)	-	-
3,276	6,448	-	-
			-
			-
(249)	-	-	-
-	(16)	-	-
-	249	-	-
3,276	6,697	-	-
	6,4482,441-(579)(2,122)249-	-4,5901,754800-265-	-------

Gains or losses arising from changes in the fair value of available-for-sale financial assets are initially recognised directly in equity through a reserve, unless they are impaired.

When the available-for-sale financial asset is disposed of any gain or loss arising from the sale is taken out of the reserve and included in the profit or loss.

A significant or prolonged decline in the fair value of a security below its cost is considered an indicator that the securities are impaired.

If such evidence exists for available-for-sale financial assets, the value of the impairment is assessed and the difference between the cost and the impaired value, less any impairment loss on that financial asset previously recognised in the profit or loss, is removed from equity and recognised in the income statement. Any subsequent difference between the impaired value and the fair value will be recognised in equity through the reserve.

Impairment losses recognised in the income statement on equity instruments classified as available-for-sale are not reversed through the income statement.

FOR THE YEAR ENDED 30 JUNE 2008

13 INVESTMENT PROPERTIES

		CONSOLIDATED ENTITY	PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Freehold land & buildings - at cost
Land	20,562	20,874	-	-
Buildings	23,111	23,111	-	-
Less: Accumulated depreciation	(3,207)	(2,729)	-	-
	19,904	20,382	-	-
Total Investment Properties	40,466	41,256	-	-
Reconciliations
Balance at the beginning of the year	41,256	-
Transfers from other property, plant & equipment14	-	44,149	-	-
Expenditure subsequent to acquisition	391	43	-	-
Disposals	-	(2,452)	-	-
Depreciation expense	(478)	(484)	-	-
	41,169	41,256	-	-
Less Classified as assets held for sale
Land33	(703)	-	-	-
Total investment properties of continuing operations	40,466	41,256	-	-
The following amounts have been recognised in the income statement
Rental income	4,396	4,403	-	-
Direct operating expenses arising from investment property
that generated rental income during the period	895	965	-	-
Direct operating expenses arising from investment propertythat did not generate rental income during the period	28	51	-	-

FOR THE YEAR ENDED 30 JUNE 2008

13 INVESTMENT PROPERTIES (CONT.)

An independent valuation of Non-Current Land & Buildings was undertaken in July 2006 on properties to be leased to the new owners of the plastics packaging businesses.

The Riverwood land & building was valued on acquisition at January 2005. This building is now leased by York Precision Plastics Pty Ltd.

The independent aggregate valuation of Land and Buildings was $56.5 million.

The valuations were formal valuations carried out by an independent valuer. Capital gains tax that could be paid if the Land & Buildings were sold at balance date at this valuation is $5.7million. These valuations have not been reflected in the accounts.

Non-current assets pledged as security

Refer to note 22(b) for information on non-current assets pledged as security by the parent entity or its subsidiaries.

The Group tests for impairment and measures recoverable amount based on value-in-use based on the discounted future cash flows derived from continued use of assets.

Impairment losses are included in the line item "Administrative expenses" in the income statement.

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Leases as LessorThe investments properties are leased to tenants under long termoperating leases with rentals payable monthly.Minimum lease payments under non cancellable operating leases of theinvestment properties not recognised in the financial statements arereceivable as follows:
- not later than 1 year- later than 1 year but not later than 5 years- later than 5 years	4,9266,1251,412	4,2457,748-	---	---
	12,463	11,993	-	-

FOR THE YEAR ENDED 30 JUNE 2008

14 OTHER PROPERTY PLANT AND EQUIPMENT

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Leasehold improvements - at costLess: Accumulated depreciation	394(109)	373(72)	--	--
	285	301	-	-
Plant and equipment - at costLess: Accumulated depreciation	2,665(829)	2,355(486)	--	--
	1,836	1,869	-	-
Capital works in progress - at cost	28	17	-	-
Total property, plant and equipment of continuing operations	2,149	2,187	-	-

Reconciliations

Reconciliations of the carrying amounts of each class of plant & equipment are set out below.

	LeaseholdImprovements$'000	Plant &Equipment$'000	Capital WorksIn Progress$'000	Total$'000
Consolidated - 2008
Carrying amount at start of year	301	1,869	17	2,187
Additions	21	311	11	343
Disposals	-	-	-	-
Depreciation & Amortisation expense	(37)	(344)	-	(381)
Carrying amount at end of year	285	1,836	28	2,149

	FreeholdLand$'000	Buildings$'000	LeaseholdImprovements Equipment$'000	Plant &$'000	& Equipment$'000	Leased Plant Capital WorksIn Progress$'000	Total$'000
Consolidated - 2007
Carrying amount at start of year	21,372	22,499	654	23,220	6,506	236	74,487
Additions	-	-	4	968	-	-	972
Disposals	-	-	(42)	(21,785)	(6,257)	(219)	(28,303)
Transfers between categories	326	(48)	(278)	206	(206)	-	-
Transfers to Investment properties	(21,698)	(22,451)	-	-	-	-	(44,149)
Transfers to intangible assets	-	-	-	(184)	-	-	(184)
Depreciation & Amortisation expense	-	-	(37)	(556)	(43)	-	(636)
Carrying amount at end of year	-	-	301	1,869	-	17	2,187

Notes to and forming part of the Financial Statements (cont.) FOR THE YEAR ENDED 30 JUNE 2008

15 TAX

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
(a)	Assets
	Deferred tax assets comprise temporary differences attributable to:Amounts recognised in profit and loss
	Doubtful Debts	231	176	-	-
	Employee benefits	194	248	-	-
	Building depreciation	600	546	284	238
	Depreciation of intangiblesImpairment of investments	56777	84-	--	--
	Fair value adjustment of investments	138	-	-	-
	Inventory	3	3	-	-
	Deferred rent receivable	-	103	-	-
	s40-880 Black hole expenses	16	81	8	11
	Other	55	35	-	-
		2,070	1,276	292	249
	Movements
	Opening balance	1,276	4,439	249	2,500
	Credit/(charged) to the income statement (note 3)Credit/(charged) to equity	589138	(3,163)-	43-	(2,251)-
	Prior year adjustment	67	-	-	-
		2,070	1,276	292	249
	There are no unrecognised capital losses for which no deferred taxasset has been recognised.
(b)	Liabilities
	CURRENT
	Income Tax provision of continuing operations	866	3,254	866	3,254
	NON-CURRENT
	Deferred tax liability comprises temporary differences attributable to:
	Amounts recognised in profit and loss
	Plant and equipment depreciation	34	55	6	4
	Building depreciation	245	-	173	-
	Fair value adjustment of derivativesFair value adjustment of Investments	48370	793240	--	--
	Other	44	29	-	8
	Deferred tax liability of continuing operations	876	1,117	179	12
	Movements
	Opening balance	1,117	85	12	-
	(Credit)/charged to the income statement (note 3)	(219)	792	167	12
	(Credit)/charged to equity	(170)	240	-	-
	Prior year tax refund relating to building depreciationPrior year adjustment	7375	--	--	--
		876	1,117	179	12

FOR THE YEAR ENDED 30 JUNE 2008

16 INTANGIBLE ASSETS

		CONSOLIDATED ENTITY	PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Licences, software and patents - at costLess: Accumulated amortisation	572(332)	497(236)	--	19-
Goodwill - Mining equipment manufacturing	240155	261155	--	19-
Brand names - at cost	497	497	-	-
Intangible Assets of continuing operations	892	913	-	19
ReconciliationsLicences, software and patents - at costBalance at the beginning of yearAdditions - external purchasesTransfers from Plant and EquipmentImpairment of costs brought forwardDisposalsAmortisation charge (Amortisation charges are included within Cost ofGoods Sold and Administration expenses in the income statement.)	26199-(19)-(101)240	1,744366184-(1,948)(85)261	19-(19)---	-19-19
GoodwillBalance at the beginning of yearDisposals	155-155	2,456(2,301)155	---	---
Brand NamesBalance at the beginning of yearDisposals	497-	500(3)	--	--
	497	497	-	-

Licences, software and patents have a finite useful life. They are recorded at cost and amortised on a straight line basis over the number of years of their expected life which ranges from 3 to 10 years.

Goodwill is assessed to have an indefinite life, it is tested annually for impairment with any impairment losses being charged to the income statement.

Brand names have been assessed to have an indefinite useful life. These brands are registered with the relevant agencies. The registrations are renewed at insignificant cost to the consolidated entity. This, combined with continued support for the brands by product development, advertising and marketing expenditure, has allowed the consolidated entity to determine that the assets have an indefinite useful life. They are recorded at cost and tested annually for impairment. Impairment losses are charged to the income statement.

FOR THE YEAR ENDED 30 JUNE 2008

16 INTANGIBLE ASSETS (CONT.)

Impairment disclosures

Intangible assets deemed to have indefinite lives are allocated to the Group's cash generating units identified according to business segment. A segment level summary of the intangible assets deemed to have indefinite lives is as follows:

Brand Names$'000	Goodwill$'000	Total$'000
497	155	652
497	155	652

The recoverable amount of intangibles in the mining equipment manufacturing cash-generating units are determined based on value-in-use calculations. Value-in-use is calculated based on the present value of 5 year discounted cash flow projections based on budgets approved by management. The growth rate used in these budgets does not exceed the long term average growth rate for the business in which cash-generating units operate.

The following assumptions were used in the value-in-use calculations:

	2008	2008	2007	2007
	Growth	Discount	Growth	Discount
	Rate	Rate	Rate	Rate
Mining Equipment Manufacturing	5.00%	12.00%	5.00%	12.00%

The budgets used by management use historical weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.

FOR THE YEAR ENDED 30 JUNE 2008

17 DERIVATIVES

		CONSOLIDATED ENTITY	PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Non-Current AssetsOptions in listed companies	1,347	890	-	-
Options in listed companiesOpening BalanceAdditions at costFair Value adjustmentsImpairment	890340117-	-110780-	----	----
	1,347	890	-	-

Options consist of various listed and unlisted options in listed companies. They are initially recorded at cost with adjustments to fair value taken to profit and loss. If options are unlisted the group uses the Black Scholes model to determine fair value.

All options can be exercised at anytime up to their expiry date.

Details of options held are as follows:

	Number	ExercisePrice	OptionExpiry date	Within 1 Year$000s	1 to 2 years$000s	2 to 5 years$000s	Total$000s
2008
Company
Industrea Ltd	2,875,000	0.15	28-Sep-09	-	1,007	-	1,007
Allied Brands Ltd	200,000	0.35	22-May-10		-	33	33
Allied Brands Ltd	300,000	0.45	14-Oct-09	-	31	-	31
Allied Brands Ltd	2,136,007	0.60	28-Dec-10	-	-	235	235
Cool or Cosy Ltd	6,250,000	0.15	16-Aug-10	-	-	41	41
				-	1,038	309	1,347
2007
Company
Industrea Ltd	2,875,000	0.15	28-Sep-09	-	-	890	890
				-	-	890	890

Derivative Instruments used by the Group

The Group has elected not to hedge account. As a result the value of foreign currency liabilities is taken up at the spot rate at balance date and the value of all derivatives is taken up as a hedge asset or liability. Gains and losses resulting to fair value are taken to the income statement.

18 TRADE AND OTHER PAYABLES

	CONSOLIDATED ENTITYPARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
CURRENT
Trade payables	617	907	9	206
Sundry payables and accruals	410	257	3	6
Loans from wholly owned subsidiaries	-	-	15,920	16,202
Payables of continuing operations	1,027	1,164	15,932	16,414

FOR THE YEAR ENDED 30 JUNE 2008

19 INTEREST BEARING LIABILITIES

				CONSOLIDATED ENTITY	PARENT ENTITY
		Note	2008$000s	2007$000s	2008$000s	2007$000s
	CURRENT
	Bank overdraft -secured	19(a)	2,510	1,001	-	-
	Hire purchase liabilities - Secured	26	346	373	-	-
	Interest bearing liabilities of continuing operations		2,856	1,374	-	-
(a)	Bank overdraft and bank loans - secured
	The bank overdraft, bank loans and certain hire purchase liabilities aresecured by certain charges over the consolidated entity's freeholdproperties, assets and undertakings.
	Bank overdrafts have been reflected after taking account of legal rightof set-off which was established with the bank and whereby interest ischarged on the net balance.
(b)	Total secured liabilities - see note 22
	PROVISIONS
Current
	Employee benefits		310	538	-	-
	Non CurrentEmployee benefits		338	290	-	-
	Total Provisions		648	828	-	-
	OTHER CURRENT LIABILITIES
	Deferred income		-	343	-	-
	Other current liabilities of continuing operations			343	-	-

FOR THE YEAR ENDED 30 JUNE 2008

22 INTEREST BEARING LIABILITIES

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
	NON CURRENT
	Bank Loans - Secured19(a)	19,493	7,995	18,000	6,000
	Hire purchase liabilities -Secured	69	439	-	-
	Interest bearing liabilities of continuing operations	19,562	8,434	18,000	6,000
(a)	Secured liabilities
	Total secured liabilities ( current and non-current ) are:
	Bank overdrafts	2,510	1,001	-	-
	Bank loans	19,493	7,995	18,000	6,000
	Hire purchase liabilities	415	812	-	-
		22,418	9,808	18,000	6,000

Bank overdrafts and loans are secured as noted in note 19 above.

Lease and Hire Purchase liabilities are effectively secured as the rights to those assets revert to the lessor or hirer in the event of default.

(b)		Assets pledged as security
-----	--	----------------------------

The carrying amounts of non-current assets pledged as security are:
Notes
First mortgage
Freehold investment properties	13	23,744	24,399	-	-
Assets classified as held for sale	33	703	-	-	-
Floating charge and cross guarantees
Freehold investment properties	13	16,722	16,857	-	-
Term receivables		4,780	4,780	-	-
Plant & equipment		1,765	2,170	-	-
Total non-current assets pledged as security		47,714	48,206	-	-
The following current assets are also pledged as security under the floating charge:
Cash assets		170	624	-	-
Term receivables		2,000	2,000	-	-
Receivables - current		948	915	-	-
Inventories		1,051	741	-	-
Other current assets		47	362	-	-
Total current assets pledged as security		4,216	4,642	-	-
Total assets pledged as security		51,930	52,848	-	-

The total financial assets included in the above pledged as security for liabilities is $7,898,000 (2007 $8,319,000)

FOR THE YEAR ENDED 30 JUNE 2008

23 SHAREHOLDERS' EQUITY

		CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
CONTRIBUTED EQUITY
PAID-UP CAPITAL
59,252,613 ordinary shares fully paid	32,033	33,573	32,033	33,573
(2007 61,186,197 ordinary shares)
Movements in ordinary share capital
Balance at the beginning of the financial year	33,573	38,885	33,573	38,885
Shares repurchased under approved buy back scheme	(1,540)	(5,312)	(1,540)	(5,312)
	32,033	33,573	32,033	33,573
The shares have no par value. Ordinary shares participate in dividendsand the proceeds on winding up of the parent entity in proportion to thenumber of shares held.
Each ordinary share is entitled to one vote at shareholder meetings.
	No.	No.	No.	No.
Movements in number of ordinary shares
Balance at the beginning of the financial year	61,186,197	68,153,105	61,186,197	68,153,105
Shares repurchased under approved buy back scheme	(1,933,584)	(6,966,908)	(1,933,584)	(6,966,908)
	59,252,613	61,186,197	59,252,613	61,186,197

Capital Risk Management

The Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained earnings.

In managing its capital, the Group's primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination of capital growth and distributions and through the payment of annual dividends to its shareholders. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain a sufficient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend policy, new share issues, share buy-backs, or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.

It is the Group's policy to maintain its gearing ratio within the range of 20% - 50% (2007: 20% - 50%). The Group's gearing ratio at the balance sheet date is shown below :

Gearing ratios

Total borrowings	22,418	9,808	18,000	6,000
less Cash and cash equivalents	(1,349)	(624)	-	(250)
Net debt	21,069	9,184	18,000	5,750
Total equity	38,461	46,392	38,691	48,619
Total capital	59,530	55,576	56,691	54,369
Gearing Ratio	35%	17%	32%	11%

The increase in gearing has been bought about by the Board's decision to take on additional debt finance to fund the acquisition of a investments and undertake a share buy-back; the Group intends to maintain these gearing levels going forward. There have been no other significant changes to the Group's capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its capital.

(a) Information about the PPK Executive Incentive Scheme ,including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year are set out in note 34.

FOR THE YEAR ENDED 30 JUNE 2008

24 RESERVES

			CONSOLIDATED ENTITY	PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
Available-for-sale financial assets		(160)	559	-	-
Share options		8	8	8	8
		(152)	567	8	8
Movement in reservesShare options
Opening balance		8	8	8	8
Closing balance		8	8	8	8
Available-for-sale financial assets
Opening balance		559	-	-	-
Revaluation		(449)	799	-	-
Deferred tax impact		135	(240)	-	-
Transfer to net profit		(578)	-	-	-
Deferred tax impact		173	-	-	-
Closing balance		(160)	559	-	-
Foreign currency translationOpening balance		-	24	-	-
Translation of 50% interest in SpraypacProducts NZ Ltd and York PrecisionPlastics NZ Pty LtdDeferred tax impact		--	(34)10	--	--
Closing balance		-	-	-	-

The foreign currency translation reserve is used to record exchange differences on translation of foreign controlled subsidiaries. The reserve is recognised in the income statement when the investment is disposed of.

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT

The Group's financial instruments include investments in deposits with banks, receivables, equities, derivatives, payables and interest bearing liabilities. The accounting classifications of each category of financial instruments as defined in note 1(i) and their carrying amounts are set out below.

		Floating			Fixed Interest Rate Maturing
	WeightedAverageInterest Rate	Note	InterestRate$000s	Within1 Year$000s	1 to5 Years$000s	Non-InterestBearing$000s	Total$000s
Consolidated 2008
Financial Assets
Receivables	0.0%	9	-	-	-	1,263	1,263
Loans receivable	9.6%	9	7,219	-	-	-	7,219
Convertible notes	13.6%	9	-	-	1,997	-	1,997
Loans and receivables			7,219	-	1,997	1,263	10,479
Cash	7.4%	8	1,345	-	-	4	1,349
Available-for-sale financial assets	0.0%	12b	-	-	-	3,276	3,276
Financial assets at fair value through profit
or loss - held for trading (derivatives)	0.0%	17	-	-	-	1,347	1,347
Total financial assets			8,564	-	1,997	5,890	16,451
Financial Liabilities
Bank Overdrafts	10.6%	19	2,510	-	-	-	2,510
Bank Loans	8.6%	22(a)	19,493	-	-	-	19,493
Trade & Other Payables	0.0%	18	-	-	-	1,027	1,027
Lease & Hire Purchase Liabilities	7.0%	19 & 22	-	346	69	-	415
Total financial liabilities at amortised cost			22,003	346	69	1,027	23,445
Consolidated 2007
Financial Assets
Receivables	0.0%	9	-	-	-	915	915
Loans receivable	9.0%	9	7,612	-	-	-	7,612
Loans and receivables			7,612	-	-	915	8,527
Cash	6.2%	8	250	-	-	374	624
Available-for-sale financial assets	0.0%	12b	-	-	-	6,697	6,697
Financial assets at fair value through profit
or loss - held for trading (derivatives)	0.0%	17	-	-	-	890	890
Total financial assets			7,862	-	-	8,876	16,738
Financial Liabilities
Bank Overdrafts	10.0%	19	1,001	-	-	-	1,001
Bank Loans	7.3%	22(a)	7,995	-	-	-	7,995
Trade & Other Payables	0.0%	18	-	-	-	1,164	1,164
Lease & Hire Purchase Liabilities	7.0%	19 & 22	-	373	439	-	812
Total financial liabilities at amortised cost			8,996	373	439	1,164	10,972

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

			Floating		Fixed Interest Rate Maturing
	WeightedAverageInterest Rate	Note	InterestRate$000s	Within1 Year$000s	1 to5 Years$000s	Non-InterestBearing$000s	Total$000s
Parent Entity 2008Financial Assets
Cash	0.0%	8	-	-	-	-	-
Loans receivable	10.1%	9	439	-	-	31,443	31,882
Available-for-sale financial assets	0.0%	12a	-	-	-	41,373	41,373
Total financial assets			439	-	-	72,816	73,255
Financial Liabilities
Bank Loans	8.6%	22(a)	18,000	-	-	-	18,000
Other Loans	0.0%	18	-	-	-	15,920	15,920
Trade & Other Payables	0.0%	18	-	-	-	12	12
Total financial liabilities at amortised cost			18,000	-	-	15,932	33,932
Parent Entity 2007Financial Assets
Cash	6.2%	8	250	-	-	-	250
Loans receivable	9.5%	9	667	-	-	31,224	31,891
Available-for-sale financial assets	0.0%	12a	-	-	-	41,860	41,860
Total financial assets			917	-	-	73,084	74,001
Financial LiabilitiesBank Loans	7.3%	22(a)	6,000	-	-	-	6,000
Other Loans	0.0%	18	-	-	-	16,202	16,202
Trade & Other Payables	0.0%	18	-	-	-	212	212
Total financial liabilities at amortised cost			6,000	-	-	16,414	22,414

Fair Value

The carrying values of financial assets and liabilities listed above approximate their fair value except for Convertible notes which have a fair value of $2,047,000 at balance date.

Estimated discounted cash flows were used to measure fair value, except for fair values of financial assets that were traded in active markets that are based on quoted market prices.

The Group's and parent's investments and obligations expose it to market, liquidity and credit risks. The nature of the risks and the policies the Group and parent has for controlling them and any concentrations of exposure are discussed as follows:

Financial risk Management

The Board of Directors has overall responsibility for the establishment and oversight of the financial risk management framework. PPK Group's activities expose it to a range of financial risks including market risk, credit risk and liquidity risk. The Group's risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of the Group where such impacts may be material. The Board receives monthly reports, which it reviews and regularly discuss the effectiveness of the processes put in place and the appropriateness of the objectives and policies to support the delivery of the Group's financial targets while protecting future financial security.

The Board also has in place informal policies over the use of derivatives and does not permit their use for speculative purposes.

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

(a) Market risk

Market risk is the risk that the fair value of future cash flows of the Group's and parent entity's financial instruments will fluctuate because of changes in market prices.

Market risk comprises three types of risk: interest rate risk, equity price risk and currency risk.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a security, will fluctuate due to changes in interest rates. Exposure to interest rate risk arises due to holding floating rate interest bearing liabilities, investments in cash and cash equivalents and loans to related parties and other persons.

Although a change in the current market interest rate may impact the fair value of the Group's and parent's fixed interest financial liabilities and other receivables, it does not impact the Group and parent's profit after tax or equity as these financial liabilities are carried at amortised cost and not at fair value through profit or loss.

Floating interest rates attached to the Group's and parent's financial assets and liabilities give rise to cash flow interest rate risk. Any changes in the current market rate will affect the cash flows payable on floating rate interest bearing liabilities and hence impact the Group's and parent's profit after tax.

Defaults and Breaches

As a result of the impairment of the group's available-for-sale financial assets and the resultant fall in EBIT for the year the Group did not comply with a financial covenant in relation to it's bank overdraft and loans. The covenant required the group to maintain an interest cover of at least 2.5 times. The actual interest cover for the year was 2.25 times.

The group has received written confirmation from its two lenders that they have waived their right to take any action in relation to this specific breach, for this year.

Sensitivity disclosure analysis

The Group's and parent's exposure to its floating interest rate financial assets and liabilities is as follows:

	CONSOLIDATED ENTITY		PARENT ENTITY
	2008$000s	2007$000s	2008$000s	2007$000s
Financial Assets
Cash	1,345	250	-	250
Receivables	7,219	7,612	439	667
	8,564	7,862	439	917
Financial Liabilities
Bank overdraft	2,510	1,001	-	-
Bank Loans	19,493	7,995	18,000	6,000
	22,003	8,996	18,000	6,000
Net Exposure	(13,439)	(1,134)	(17,561)	(5,083)

The group has performed sensitivity analysis relating to its exposure interest rate risk for the year. This sensitivity demonstrates the effect on current year after tax results and equity which could result from a movement in interest rates of +/- 1% during the year. This analysis assumes that the rate would been consistently higher or lower for the entire financial year.

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

	CONSOLIDATED ENTITY		PARENT ENTITY
	2008	2007	2008	2007
	$000s	$000s	$000s	$000s
Change in after tax profit
- increase in interest rate by 1%	(94)	(8)	(123)	(36)
- decrease in interest rate by 1%	94	8	123	36

As the year end exposure does not accurately reflect the exposure during the year due to the timing of additional bank loan borrowings, the sensitivity above is unrepresentative of the interest rate risk inherent in a financial instrument. If the above analysis was re-performed using actual month end balances for the financial assets and liabilities the change in after tax profit for the consolidated group would have been ($65,000) for a 1% increase in interest rate and +$65,000 for a 1% decrease in interest rate and for the parent entity the change in after tax profit would have been ($93,000) for a 1% increase in interest rate and +$93,000 for a 1% decrease in interest rate.

(ii) Equity Price risk

Equity securities price risk is the risk that changes in market prices will affect the fair value of future cash flows of the Group's and parent entity's financial instruments.

The group is exposed to equity price risk through the movement in share prices of the companies in which it is invested. These are determined by market forces and and are outside control of the group. The risk of loss is limited to the capital invested in relation to shares and options held.

The market value of listed companies fluctuate and the fair value of the available-for-sale financial assets and derivatives of the group changes continuously.

Changes in fair value of available-for-sale financial assets are recognised through the asset revaluation reserve unless the there is objective evidence that available-for-sale financial assets have been impaired. Impairment losses are recognised in the income statement.

Unlisted investments do not have a quoted price in an active market and their fair value cannot be reliably measured, so they remain valued at cost after their initial recognition.

However when there is objective evidence of impairment of these unlisted investments, such impairment losses are recognised in the income statement.

The value of unlisted investments at balance date was nil as the group considers that there is little or no likelihood of any return from these investments.

The group also has investments by way of derivates in listed companies, these are held as options. Any gains or losses in the fair values of these derivatives are taken directly to profit or loss for the year.

The Directors regularly monitor the performance of the companies within its portfolio and have board representation in, Cool or Cosy Ltd and Frigrite Ltd.

Sensitivity disclosure analysis

The Group's and parent's exposure to equity price fluctuations on the fair value of its available-for-sale financial assets and derivatives is as follows:

	2008$000s	2007$000s	2008$000s	2007$000s
Financial Assets
Available-for-sale financial assets
Investments in listed companies	3,276	6,448	-	-
Investments in unlisted companies	-	249	-	-
Derivatives
Options in listed companies	1,347	890	-	-
	4,623	7,587	-	-

The group has performed sensitivity analysis relating to its exposure equity price risk for the year. This sensitivity demonstrates the effect on current year after tax results and equity which could result from a movement in equity prices at year end of +/- 10%.

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

			PARENT ENTITY
2008$000s	2007$000s	2008$000s	2007$000s
134(133)	62(62)	--	--
228(228)	444(444)	--	--
		CONSOLIDATED ENTITY

(iii) Currency Risk

Currency risk is the risk that the fair value or future cash flows of a financial item will fluctuate as a result of movements in international exchange rates. The Group is exposed to exchange rate transaction risk on foreign currency sales and purchases primarily with respect to the United States dollar (USD).

Of the total sales revenue for the Group some 54% (2007 51%) is in export sales, the majority of these sales are designated in AUD thus limiting the currency risk exposure. The trade receivables that are invoiced in USD represent 10% (14% 2007) of the groups total sales. The group does not take forward cover or hedge and is therefore at risk in relation to foreign currency movements during the year. The group maintains a USD bank account for receiving payments from trade receivables and making payment to trade payables.

Sensitivity disclosure analysis

The Group's and parent's exposure to currency fluctuations on its USD assets and liabilities at year end is as follows:

	2008$000s	2007$000s	2008$000s	2007$000s
Financial Assets
Cash and cash equivalents	170	110	-	-
Trade receivables	197	3	-	-
	367	113	-	-
Financial Liabilities
Other payables	154	-	-	-
Net exposure	213	113	-	-

The group has performed sensitivity analysis relating to its foreign currency exposure on year end amounts that are not hedged. This sensitivity demonstrates the effect on current year after tax results and equity which could result from a movement in AUS against the USD at year end of +/- 10%.

Change in after tax profit

- AUD strengthens against USD by 10%	(14)	(7)	-	-
- AUD weakens against USD by 10%	17	9	-	-

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

(b) Credit Risk

The group and parent's maximum exposure to credit risk is generally the carrying amount net of any provisions for doubtful debts. The group's exposure is minimised by the fact that the majority of the trade receivables balance is with a diverse range of Australian and Multi-national customers. The group has in place informal policies for establishing credit approval and limits so as to manage this risk.

The group's credit risk relating to tenants is primarily the risk that they will fail to honour their lease agreements. The lease agreements with the purchaser of the plastics packaging business are secured by a guarantee from the head entity, Visy Industrial Plastics Pty Ltd, and the lease in relation to the Riverwood property is supported by a bank guarantee.

Loans receivable from the purchaser of the customs packaging business are secured by a fixed and floating charges and guarantees.

Loans receivable from directors (2007 directors and key management personnel) are secured by a holding lock over the shares acquired with the loans.

Convertible notes in listed companies have a first or second ranking fixed and floating charge over all the assets of the issuing companies and their subsidiaries.

Refer to note 9 for detail the Groups and parent entities trade and other receivables.

The group's exposure to credit risk at balance date by country of loans and receivables is as follows:

		CONSOLIDATED ENTITY		PARENT ENTITY
	2008$000s	2007$000s	2008$000s	2007$000s
Loans and receivables by country
Australia	10,015	8,158	31,443	31,224
United States of America	226	107	-	-
United Kingdom	136	10	-	-
Germany	100	237	-	-
New Zealand	2	-	-	-
Vietnam	-	15	-	-
	10,479	8,527	31,443	31,224

The groups exposure to credit risk at balance date by industry of loans and receivables is as follows:

Loans and receivables by industry
Customs Plastics	6,780	6,780	-	-
Plastic Packaging	315	218	-	-
Mining Equipment	948	862	-	-
Insulation and air-conditioning	1,186	-	-	-
Retail franchising	811	-	-	-
Property and investing	439	667	31,443	31,224
	10,479	8,527	31,443	31,224

(c) Liquidity risk

Liquidity risk is the risk that the Group and parent will encounter difficulty in meeting obligations associated with financial liabilities

The Group's objective to mitigate liquidity risk is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and hire purchase contracts.

The Group and parents exposure to liquidity risk is not significant based on available funding facilities and cash flow forecasts.

Details of the groups financing facilities are set-out in note 31.

FOR THE YEAR ENDED 30 JUNE 2008

25 FINANCIAL RISK MANAGEMENT (CONT.)

Financial Liabilities maturity analysis

The tables below reflect the undiscounted contractual settlement terms for the groups financial liabilities of a fixed period of maturity, as well as the earliest possible settlement period for all other financial liabilities. As such the amounts may not reconcile to the balance sheet. Bank loans and overdraft facilities provided by the NAB are subject to an annual review with the next review date being 30 September 2008, whilst those provided by the ANZ are subject to a review every 2 years, with 2 January 2009 being the next review date.

These review dates have been used for disclosure of maturity dates of bank overdraft and loans, however there is no reason to believe that the facilities will not be renewed at this point in time, so actual repayment of facilities may not reflect disclosures in this table.

	Carryingamount	< 6months	6 - 12months	1 - 3years	> 3years	ContractualCash flows
Consolidated 2008Financial Liabilities (current & non-current)
Trade & Other Payables	1,027	1,027	-	-	-	1,027
Bank Loans & overdrafts	22,003	20,168	2,395	-	-	22,563
Hire Purchase Liabilities	415	366	72	-		438
Total Financial Liabilities	23,445	21,561	2,467	-	-	24,028
Consolidated 2007
Financial Liabilities (current & non-current)
Trade & Other Payables	1,164	1,164	-	-	-	1,164
Bank Loans & overdrafts	8,996	8,181	35	1,035	-	9,251
Hire Purchase Liabilities	812	405	382	72		859
Total Financial Liabilities	10,972	9,750	417	1,107	-	11,274
Parent Entity 2008
Financial Liabilities (current & non-current)
Trade & Other Payables	12	12	-	-	-	12
Loans from wholly owned subsidiaries	15,920	15,920				15,920
Bank Loans & overdrafts	18,000	18,385	-	-	-	18,385
Total Financial Liabilities	33,932	34,317	-	-	-	34,317
Parent Entity 2007
Financial Liabilities (current & non-current)
Trade & Other Payables	212	212	-	-	-	212
Loans from wholly owned subsidiaries	16,202	16,202				16,202
Bank Loans & overdrafts	6,000	6,121	-	-	-	6,121
Total Financial Liabilities	22,414	22,535	-	-	-	22,535

FOR THE YEAR ENDED 30 JUNE 2008

26 HIRE PURCHASE AND LEASE COMMITMENT

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
(a)	Hire Purchase commitments
	payable:
	- not later than 1 year	366	405	-	-
	- later than 1 year but not later than 5 years	72	454	-	-
	- later than 5 years	-	-	-	-
		438	859	-	-
	Minimum hire purchase payments
	Less: Future finance charges not
	provided in the financial statements	(23)	(47)	-	-
		415	812	-	-
	Total hire purchase liability
	Provided in the financial statements as:
	Current liabilities	346	373	-	-
	Non-current liabilities	69	439	-	-
		415	812	-	-
(b)	Operating lease commitments
	Operating lease rentals contracted for but not capitalised in
	the financial statements payable:
	- not later than 1 year	98	275	-	-
	- later than 1 year but not
	later than 5 years	50	127	-	-
	- later than 5 years	-	-	-	-
		148	402	-	-

The Group leases premises in Nowra under non cancellable operating lease. The terminating date of the lease is 31 January 2010, however the Group has an option to renew this lease for a further period of 5 years.

There are no contingent rentals as part of finance lease arrangements and no restrictions on the ability of PPK Group Ltd and its subsidiaries from borrowing further funds or paying dividends.

27 SUPERANNUATION COMMITMENTS

Contributions are made to by the consolidated entity to employee defined contribution superannuation funds.

All funds were accumulation plans whereby the company contributed various percentages of employee gross incomes, the majority of which were as determined by the superannuation guarantee legislation. Benefits provided under the plan are based on accumulated contributions and earnings for each employee. There is no legally enforceable obligation on entities in the consolidated entity to contribute to the superannuation plans other than requirements under the superannuation guarantee legislation.

FOR THE YEAR ENDED 30 JUNE 2008

28 CONTINGENT LIABILITIES

(a) Group

Cross guarantees of the Groups banking and finance facilities totaling $40,700,000 of which $22,010,000 was drawn at balance date.

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
	Bank guarantees over borrowings by purchasersof PPK's former thermoforming business in Adelaide	-	250	-	250
(b)	SubsidiariesBank guarantees	200	350	-	-

29 SEGMENT INFORMATION

(a) Year ended 30 June 2008

	Continuing Operations
Business Segments	InvestmentProperties$000s	Investing$000s	MiningEquipmentManufacturing$000s	Total ofContinuingOperations$000s
Primary Segment
Sales revenue	-	-	4,251	4,251
Rental income	4,396	-	-	4,396
Other income	55	1,650	48	1,753
Total Revenue	4,451	1,650	4,299	10,400
Segment result	3,528	(720)	650	3,458
Unallocated corporate expenses				(1,975)
Unallocated interest income and expense				(781)
Consolidated operating profit before income tax				702
Income tax (expense) / benefit				(95)
Net profit after tax attributable to members				607
Assets
Segment Assets	41,169	6,620	4,747	52,536
Unallocated Assets				11,608
				64,144
Liabilities
Segment Liabilities (note e)	285	-	667	952
Unallocated Liabilities				24,883
				25,835
Other segment information
Depreciation	544	-	315	859
Amortisation of Leased assets	-	-	-	-
Amortisation of other intangiblesImpairment of available-for-sale financial assets	6-	-2,370	95-	1012,370
Acquisition of non-current Segment assets	402	4,709	328	5,439

FOR THE YEAR ENDED 30 JUNE 2008

29 SEGMENT INFORMATION (CONT.)

(b) Year ended 30 June 2007

			Continuing Operations			Discontinuing Operations
Business Segments	InvestmentProperties$000s	Investing$000s	MiningEquipmentManufacturing Operations$000s	Total ofContinuing$000s	PlasticsPackaging$000s	CustomPlastics$000s	Total ofDiscontinuingOperations$000s	Total$000s
Primary Segment
Sales revenue	-	-	2,837	2,837	13,269	18,006	31,275	34,112
Rental income	4,403	-	-	4,403	-	-	-	4,403
Other income	475	2,644	9	3,128	85	13	98	3,226
Total Revenue	4,878	2,644	2,846	10,368	13,354	18,019	31,373	41,741
Segment result	3,266	2,644	189	6,099	11,229	(568)	10,661	16,760
Unallocated corporate expensesUnallocated interest				--
Consolidated operating profitbefore income tax				6,099			10,661	16,760
Income tax (expense) / benefit				(1,478)			(5,159)	(6,637)
Consolidated operating profitafter income tax				4,621			5,502	10,123
Minority InterestNet profit after tax attributable				-			(12)	(12)
to members				4,621			5,490	10,111
Assets
Segment Assets	41,256	7,338	4,663	53,257			-	53,257
Unallocated Assets				10,216			-	10,216
				63,473			-	63,473
Liabilities
Segment Liabilities(e)	554	-	1,174	1,728			-	1,728
Unallocated Liabilities				14,786			-	14,786
				16,514			-	16,514
Other segment information
Depreciation	533	-	250	783	-	363	363	1,146
Amortisation of Leased assets	1	-	-	1	-	42	42	43
Amortisation of other intangibles	14	-	-	14	-	-	-	14
Acquisition of non-currentSegment assets	-	-	-	-	-	-	-

FOR THE YEAR ENDED 30 JUNE 2008

29 SEGMENT INFORMATION (CONT.)

(c) Geographic location of Customers

Although the group operates in Australia the mining equipment manufacturing segment has sales revenue from customers located overseas. Additional disclosure of sales revenue by geographical location of external customers that represent 10% or more of total entity sales revenue is as follows:

	2008$000s	2007$000s
Australia	1,954	1,391
Germany	1,038	774
United Kingdom	645	100
United States of America	444	394
Other countries	170	178
	4,251	2,837

All segment assets are located in Australia and no acquisitions of non-current segment assets were made outside of Australia.

(d) The consolidated entity had the following business segments

• The Investment Property segment owns the properties from which the Group previously carried out its manufacturing operations. These properties were retained and leased at commercial rents to the purchasers of those businesses.
• The Investment segment owns primarily listed and some unlisted investments and also has made loans from which it earns income and capital growth.
• The Mining equipment segment manufactures portable underground mining equipment.
• The Custom plastics segment manufactured extruded acrylic and imported and distributed cast acrylic for lighting and industrial applications. This business segment was sold effective 31 May 2007 and has been shown as discontinuing operation for 2007.
• The Plastics packaging segment manufactured bottles and closures and imported trigger sprays. This segment was sold 1 September 2006 and has been included as a discontinuing operation for 2007.

(e) Segment information is prepared in conformity with the accounting policies described in note 1.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant and equipment and goodwill and other intangible assets. While most of these assets can be directly attributed to individual segments, the carrying amounts of certain assets used jointly by segments are shown as unallocated assets. Segment liabilities consist primarily of trade and other creditors, employee benefits and provisions for service warranties. Segment assets and liabilities do not include income taxes.

FOR THE YEAR ENDED 30 JUNE 2008

30 RELATED PARTIES

			CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
	Transactions between related parties are on normal commercial termsand conditions no more favourable than those available to other partiesunless otherwise stated.
	Transactions are inclusive of GST.
	Transactions with related parties:
(a)	Subsidiaries :
	(i) Provision of interest free unsecured loans- current receivables (wholly-owned subsidiaries)- current payables (wholly-owned subsidiaries)	--	--	31,44315,920	24,7229,756
	(ii) Trust Distribution from controlled trust	-	-	349	-
(b)	Director-related entities
	(i) Provision of accounting services by Holden& Bolster Avenir Pty Ltd, a firm in which Mr R. Beath is a director.Payable outstanding at balance date	21454	25753	24-	1776
	(ii) Provision of legal services by Doherty Partnersa firm in which Mr J. Wowk was a partnerPayable outstanding at balance date	--	494-	--	369-
	(iii) Provision of legal services by HWL Ebsworth	132	244	22	110
	a firm in which Mr J. Wowk is a partner
	Payable outstanding at balance dateThe aggregate amounts receivable and payable to director-related entitiesat balance date were as follows:	35	129	3	32
	- current assets	-	-	-	-
	- current liabilities	89	182	3	38
(c)	Loans to key management personnel
	Refer to note 5(d) for details of loans to key management personnel
(d)	Share transactions of directors:
	Directors and director-related entities have acquired or disposed ofordinary shares in the Parent entity during the financial year as follows :
		No.000's	No.000's	No.000's	No.000's
	PPK Group Limited - acquiredPPK Group Limited - disposed	205-	792(198)	205-	792(198)
	Net movement	205	594	205	594
	Directors and director-related entities hold directly, indirectly orbeneficially as at the reporting date the following equity interests in
	members of the consolidated entity:

FOR THE YEAR ENDED 30 JUNE 2008

31 CASH FLOW INFORMATION

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
(a)	Reconciliation of profit after income tax to the cashprovided by operating activities
	Profit after income tax	607	10,111	(1,390)	14,791
	Cash flows in operating result attributable to non-operating activities:Interest paid	1,509	1,503	1,229	784
	Cash flows in operating activities but not attributable to operating result:
	Payments from employee provisions	(338)	(558)	-	-
	Non-cash flows in operating profit:
	Amortisation	101	128	-	-
	Depreciation	858	1,077	-	-
	Deferred income	-	(2)	-	-
	Deferred expenses	-	4	-	-
	Interest received on convertible notes	(70)	-	-	-
	Recognition of income from rent free periods deferred on acquisition	(402)	(843)	-	-
	Impairment of available-for-sale financial assets	2,370	-	487	-
	Transfers to provisions	340	1,488	-	-
	Trust distributions	-	-	(349)	-
	Intercompany loans forgiven	-	-	-	(15,946)
	(Profits) on sale-of-subsidiaries	-	(10,725)	-	(6,786)
	(Profits) on sale of available-for-sale financial assets	(1,309)	-	-	-
	Fair value adjustments on derivatives	(116)	(2,644)	-	-
	Loss/(Profits) on sale of property, plant & equipment	19	(1,309)	19	-
	(Decrease)/increase in tax payable	(2,388)	3,254	(2,388)	3,254
	(Increase)/decrease in deferred tax assets	(794)	2,452	(43)	2,251
	Increase/(decrease) in deferred tax liabilities	67	756	167	12
	Changes in assets and liabilities, net of the effects ofpurchase and disposal of subsidiaries:	-	-	-	-
	(increase)/decrease in trade and other debtors	(320)	627	56	-
	decrease/(increase) in prepayments	-	382	(91)	157
	(increase)/decrease in inventories	(310)	(173)	-	-
	(decrease)/increase in tradecreditors and accruals	-(124)	-(2,203)	-(200)	-172
	Net cash (used in) / provided by
	operating activities	(300)	3,325	(2,503)	(1,311)

FOR THE YEAR ENDED 30 JUNE 2008

31 CASH FLOW INFORMATION (CONT.)

		CONSOLIDATED ENTITY		PARENT ENTITY
	Note	2008$000s	2007$000s	2008$000s	2007$000s
(b)	Reconciliation of Cash
	For the purposes of the cash flow statement, cash includes:
	Cash on hand	4	6	-	-
	Call deposits with financial institutions	1,345	618	-	250
	Bank overdrafts - secured	(2,510)	(1,001)	-	-
		(1,161)	(377)	-	250
(c)	Disposal of Entities	2008$000s	2007$000s
	During the 2007 year the plastics packaging
	and custom plastics Subsidiaries were sold.
	Aggregate details of this transaction are:
	Disposal Price	-	53,969
	Cash consideration	-	50,833
	(Cash) / Overdraft held at disposal date	-	(67)
	Vendor finance	-	6,780
	Rent free periods deferred	-	(1,177)
	Deferred consideration	-	(2,400)
		-	53,969
	Assets and liabilities held at disposal date:
	Receivables	-	17,230
	Prepayments	-	268
	Inventories	-	15,421
	Property, Plant & Equipment	-	28,102
	Deferred tax assets	-	711
	IntangiblesCreditors	--	4,245(9,880)
	Interest Bearing Liabilities	-	(7,702)
	Deferred Tax liabilities	-	(1,526)
	Other liabilities	-	(5)
	Provisions	-	(3,469)
	Minority interest	-	(151)
		-	43,244
	Net gain on disposal	-	10,725
		-	53,969

FOR THE YEAR ENDED 30 JUNE 2008

31 CASH FLOW INFORMATION (CONT.)

(e) Non-cash Financing and Investing Activities

(i) During the financial year, the consolidated entity had an upward fair value adjustment on derivatives of $116,000 (2007 $2,644,000). These related to options held in listed company investments.

(f) Unused credit facilities

(i) The consolidated entity had access to the following lines of credit at balance date:

	CONSOLIDATED ENTITY		PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Total facilities available
Bank Overdraft	3,000	3,000	-	-
Bank Loans	37,700	37,700	-	-
	40,700	40,700	-	-
Not utilised at balance date
Bank Overdraft	490	1,999	-	-
Bank Loans	18,200	29,700	-	-
	18,690	31,699	-	-
Utilised at balance date
Bank Overdraft	2,510	1,001	-	-
Bank Loans	19,500	8,000	-	-
	22,010	9,001	-	-

The major facilities are summarised as follows:

Banking overdrafts

Bank overdraft facilities are arranged with the ANZ Bank and the National Australia Bank with the general terms and conditions being set from time to time. Overdraft balances are subject to set-off arrangements whereby credit balances can be netted off against debit balances with the total facility and interest being applied to the net balance.

Commercial bill facilities

$37,700,000 variable interest rate facilities provided by the ANZ Bank and the National Australia Bank Ltd.

Banking facilities with the NAB are subject to annual review, ANZ conducts a review every two years, in line with normal banking practice. There is no reason to believe that facilities will not be routinely renewed at this point. Interest rates on facilities range from 8.56% to 12.00% inclusive of bank margins.

32 EVENTS SUBSEQUENT TO REPORTING DATE

On 29th August 2008 the $6.8 million vendor finance provided to the purchaser of York Precision Plastics was repaid in full.

The amount received has been applied to general debt reduction of the Group.

Since 30 June 2008, there has been a continuation of the significant volatility of the Australian securities market. If this volatility continues for a sustained period, it could impact on the value attributed to PPK investments in future reporting periods.

No other matter or circumstance has arisen since the end of the period which significantly affected the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in the financial year subsequent to 30 June, 2008.

Notes to and forming part of the Financial Statements (cont.) FOR THE YEAR ENDED 30 JUNE 2008

33 DISCONTINUING OPERATIONS

On 28 June 2006 a conditional contract was signed for the sale of the plastic packaging business. The effective date of the sale was 1 September 2006. The consideration for the sale was $50 million less lease liabilities taken over by Plaspak Holdings Ltd (the purchaser). The sale was announced subject to shareholder approval at a meeting held on 16 August 2006 and receiving the appropriate regulatory approval. The consideration represents a price that is a surplus over the book value of the assets being sold of about $10 million. Additional payments of up to $5 million were paid to the Company for the provision of consultancy services assessed by the achievement of agreed performance criteria during the 2007 financial year following completion of the sale.

On the 29 June 2007 the sale of the custom plastics division (York Precision Plastics) was settled with effect from 31 May 2007.

Sale price was $9.25m and equates approximately to the net asset value. Of this price $6.8m was funded via vendor finance.

Financial information relating to the discontinued operation is set out below and in the Segment Reporting note 29.

The financial performance of the discontinued operations for the financial year which is included in the income statement for the year is as follows:

	CONSOLIDATED ENTITY			PARENT ENTITY
Note	2008$000s	2007$000s	2008$000s	2007$000s
Revenue from ordinary activities	-	31,275		-
Cost of sales	-	(22,426)	-	-
Rental expense paid to continuing operations	-	-	-	-
GROSS PROFIT	-	8,849	-	-
Interest Received	-	-	-	-
Profit / ( Loss ) on sale of assets	-	10,729	-	6,185
Foreign exchange (losses) / gains	-	(1)	-	-
Other revenues from ordinary activities	-	98	-	-
Warehouse & Distribution expenses	-	(2,675)	-	-
Selling Expenses	-	(2,029)	-	-
Administrative expenses	-	(2,953)	-	-
Finance costs	-	(1,357)	-	(784)
PROFIT FROM DISCONTINUING OPERATIONS BEFORE INCOME TAX	-	10,661	-	5,401
Income tax expense	-	(5,159)	-	(6,499)
PROFIT FROM DISCONTINUING OPERATIONS AFTER INCOME TAX	-	5,502	-	(1,098)
Profit attributable to minority interest	-	(12)	-	-
Net profit after income tax attributable to members of the parent entity	-	5,490	-	(1,098)
The net cash flows of the discontinuing operations which have beenincorporated into the statement of cash flows are as follows:
Net cash inflow (outflow) from operating activities	-	1,864	-	-
Net cash inflow (outflow) from investing activities	-	(335)	-	(970)
Net cash inflow (outflow) from financing activities	-	(1,521)	-	(784)
Net cash increase in cash generated by discontinuing operations	-	8	-	(1,754)
The asset and liability details of items disclosed as "held for sale" in the balancesheet would otherwise have been classified as the following types ofassets and liabilities:
NON-CURRENT ASSETS
Property, plant and equipment	703	-	-	-

FOR THE YEAR ENDED 30 JUNE 2008

34 SHARE BASED PAYMENTS

Director and Employee Share Option Arrangements

(i) PPK eligible executive employees may be granted options under the PPK Executive Incentive Scheme. Options granted under the scheme are for a maximum of 5 years.

Options under the scheme may only be exercised after 2 years from the date of issue and expire 30 days after the employee ceases to be an employee.

• (ii) Options that were granted to directors required shareholder approval and vested immediately. These options expired on 12 August 2007.
• (iii) Options hold no voting or dividend rights and are not transferable without Board of Directors approval.

The closing price of an ordinary share of PPK Group Limited on the Australian Stock Exchange at 30 June 2008 was $0.70 (30 June 2007 $0.78).

		CONSOLIDATED Weighted AveENTITY2008No.	Exercise Price2008$	CONSOLIDATEDENTITY2007No.	Weighted AveExercise Price2007$	PARENTENTITY2008No.	PARENTENTITY2007No.
(a)	Movement in the number ofshare options held by Directorsare as follows:
	Opening Balance	900,000	$1.65	1,100,000	$1.60	900,000	1,100,000
	Granted during the year	-	-	-	-	-	-
	Exercised during the year	-	-	-	-	-	-
	Lapsed during the year	(900,000)	$1.65	(200,000)	$1.40	(900,000)	(200,000)
	Closing Balance	-		900,000	$1.65	-	900,000

weighted average exercise prices are the same for the parent entity as for the consolidated entity

(b)Movement in the number ofshare options held byemployees are as follows:
Opening Balance	-	$0.00	375,000	$1.07	-	375,000
Granted during the year	-	-	-	-	-	-
Exercised during the year	-	-	-	-	-	-
Lapsed during the year	-	$0.00	(375,000)	$1.07	-	(375,000)
Closing Balance	-	$0.00	-	$0.00	-	-

weighted average exercise prices are the same for the parent entity as for the consolidated entity

DIREC TOR'S DECLARATION

FOR THE YEAR ENDED 30 JUNE 2008

In the directors' opinion:

• (a) the financial statements and notes set out on pages 32 to 85 are in accordance with the Corporations Act 2001 including:
  • (i) complying with Accounting Standards and the Corporations Regulations 2001; and
  • (ii) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2008 and of its performance, as represented by the results of their operations, changes in equity and their cash flows, for the financial year ended on that date; and
• (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations by the Chief Executive Officer and the person performing the Chief Financial Officer function required by Section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors.

Colin Ryan Chairman Sydney, 26 September 2008

INDEPENDENT AUDIT REPORT

Independent Audit Report (cont.)

	Independence
made.		In conducting our audit, we have complied with the independence requirements of the CorporationsAct 2001. We confirm that the independence declaration required by the Corporations Act 2001 wouldbe in the same terms if it had been given to the directors at the time that this auditor's report was
		Auditor's Opinion
	In our opinion:
(a)		the financial report of PPK Group Limited is in accordance with the Corporations Act 2001,including:
	(i)	giving a true and fair view of the company's and consolidated entity's financial position asat 30 June 2008 and of their performance for the year ended on that date; and
	(ii)	complying with Australian Accounting Standards (including the Australian AccountingInterpretations) and the Corporations Regulations 2001; and
(b)		the financial report also complies with International Financial Reporting Standards as disclosedin Note 1(a).
		Report on the Remuneration Report
		We have audited the Remuneration Report included in pages 10 to 17 of the directors' report for theyear ended 30 June 2008. The directors of the company are responsible for the preparation andpresentation of the Remuneration Report in accordance with section 300A of the Corporations Act2001. Our responsibility is to express an opinion on the Remuneration Report, based on our auditconducted in accordance with Australian Auditing Standards.
		Auditor's Opinion
		In our opinion, the Remuneration Report of PPK Group Limited for the year ended 30 June 2008,complies with section 300A of the Corporations Act 2001.
		BPO Kealely
	BDO Kendalls	Chartered Accountants

Independent Audit Report (cont.) AUDITOR'S INDEPENDENT DECLARATION

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

1. Shareholding

(a) Distribution of shareholders at 21st August 2008

Category (size of holding)	Number ofShareholders2008000s	Number ofShareholders2007000s
1 - 1,000	139	139
1,001 - 5,000	473	475
5,001 - 10,000	404	414
10,001 - 100,000	517	526
100,001 and over	52	53
	1,585	1,607

(b) The number of shareholdings held in less than marketable parcels is 64.

(c) The names of the substantial shareholders listed in the holding company's register at the 21st August 2008

	Numberof shares2008	Numberof shares2007
Corso Investments Pty Ltd	8,752	8,544
ANZ Nominees Ltd	8,664	8,644
Equipment Co of Australia Pty Ltd	6,618	6,618
Applied Colour Pty Limited	2,200	2,200
John E Gill Operations	1,569	1,078

(d) Voting rights

The consolidated entity has one class of ordinary shares with equal voting rights attached to them.

Additional Information for Listed Public Companies (Cont.)

(e)		Twenty largest shareholders	Number ofordinary fully paidshares held	Percentage heldof listedordinary capital
		Name	000s	%
	1	Corso Management Pty Ltd	8,752	14.84
	2	ANZ Nominees Ltd	8,664	14.69
	3	Equipment Co of Australia Pty Ltd	6,618	11.22
	4	Applied Colour Pty Limited	2,200	3.73
	5	John E Gill Operations	1,569	2.66
	6	Metal Industries Pty Ltd	1,060	1.80
	7	Citicorp Nominees Pty Limited	880	1.49
	8	Mr David Hoff	857	1.45
	9	MF Custodians Ltd	662	1.12
	10	Mr Colin Francis Ryan & Mrs Jose Maureen Ryan	500	0.85
	11	Flagstaff Superannuation Pty Ltd	470	0.80
	12	Mr Robert Joseph Faulks & Mrs Patricia Baynton Faulks	440	0.75
	13	Ian Macdonald	425	0.72
	14	National Nominees Ltd	416	0.71
	15	Ms Alison Irving	342	0.58
	16	Poets Pty Ltd	301	0.51
	17	Charles Peter Taylor	300	0.51
	18	Chandos Nursing Home Pty Ltd	300	0.51
	19	Mrs Patricia Baynton Faulks	255	0.43
	20	Ruminator Pty Ltd	243	0.41
			35,254	59.77

(f) There is an on market buy back for Group shares which will end on or before the buy-back of 10% or before the buy-back of 5,437,880 shares.

2. The name of the company secretary is

Mr Robert Nicholls.

3. The address of the principal registered office in Australia is

25-27 Waratah Street, Kirrawee, NSW 2232 Telephone (02) 9521 8444 Fax (02) 9521 4561 Email info@ppkgroup.com.au

4. Registers of securities are held at the following addresses:

New South Wales Registries Limited Level 2 28 Margaret Street, Sydney NSW 2000 P.O. Box P67, Royal Exchange, Sydney NSW 1223

5. Australian Securities Exchange Listing

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Securities Exchange Ltd.

This page is left blank intentionally

CORORATE DIREC TORY

HEAD OFFICE & REGISTERED OFFICE

PPK Group Limited

25-27 Waratah Street Kirrawee NSW 2232 Telephone 02 9521 84444 Facsimile 02 9521 4561 www.ppkgroup.com.au

SHARE REGISTRY

Registries Limited Level 2, 28 Margaret Street Sydney NSW 2000 Telephone 02 9290 9600 Facsimile 02 9279 0664 www.registries.com.au

AUDITORS

BDO Kendalls

Allianz Centre 2 Market Street Sydney NSW 2000 Telephone 02 9286 5555 Facsimile 02 9286 5599

PPK GROUP PROPERTIES

New South Wales 8 Contaplas Street Arndell Park NSW 2148 14 Contaplas Street Arndell Park NSW 2148 13A Station Road Seven Hills NSW 2147 25-27 Waratah Street Kirrawee NSW 2232

16 Wiggs Road Riverwood NSW 2210

Victoria 36-42 Hydrive Close Remington Industrial Estate Dandenong South VIC 3175

Queensland 72 Pritchard Road Virginia QLD 4014

PPK GROUP BUSINESSES

New South Wales

Rambor Pty Limited 108 Albatross Road South Nowra NSW 2541 Telephone 02 4422 6323 Facsimile 02 4422 5423 www.rambor.com.au

DIRECTORS

Colin F. Ryan B.Com.,Dip.Ed.,CA DIRECTOR AND CHAIRMAN (non-executive)

Glenn R. Molloy DIRECTOR (non-executive)

Raymond M. Beath B.Com.,F.C.A DIRECTOR (non-executive)

Jury I. Wowk B.A., LL.B DIRECTOR (non-executive)

David A. Hoff C.P.A MANAGING DIRECTOR

COMPANY SECRETARY

Robert J. Nicholls MBA (Distinction), LL.B (Hons) Grad Dip Leg Prac., Grad Dip CSP, FCIS, CAICD