PPK GROUP LIMITED — Interim / Quarterly Report 2007

Feb 26, 2007

APPENDIX 4D

HALF YEARLY INFORMATION GIVEN TO THE ASX UNDER LISTING RULE 4.2A

PPK GROUP LIMITED (formerly Plaspak Group Limited) ABN 65 003 964 181

HALF YEAR ENDED 31 DECEMBER 2006

The information contained in this report should be read in conjunction with the most recent annual report

HIGHLIGHTS OF RESULTS FOR ANNOUNCEMENT TO THE MARKET

(figures are in A$000s)

TOTAL REVENUES		DOWN 46.6%	ТO	26,982
PROFIT BEFORE INCOME TAX ANDINDIVIDUALLY SIGNIFICANT ITEMS	UP	15.1%	TO	2,413
PROFIT BEFORE INCOME TAX	UP	377.5%	TO	11,613
PROFIT AFTER TAX ATTRIBUTABLE TOMEMBERS	UP	267.3%	TO	6,842
EARNINGS PER SHARE	UP	285.2%	TΟ	10.4 cents

2007 FULLY FRANKED INTERIM DIVIDEND PER SHARE	3.25c
2006 FULLY FRANKED INTERIM DIVIDEND PER SHARE	2.75c

RECORD DATE FOR DETERMINING ENTITLEMENT TO DIVIDEND	16 March 2007

COMMENTARY ON RESULTS

Consequent upon the sale of the plastics business and in compliance with AIFRS requirements, the financial information in the Appendix 4D is separated into continuing operations and discontinued operations.

The sale of the plastics packaging business completed on 1 September 2006. Accordingly the results for the first half include 2 months earnings from the plastics packaging business.

Consequently the first half results from continuing operations are not reflective of future ongoing operations as they did not include a full 6 months of rental income and the transitional service period meant additional non-recurring PPK corporate costs which were not recoverable

Profit before income tax for the reporting period was $11.613 million which includes a profit of $8.74 million on the sale of the plastics packaging business. The profit of $8.74 million in turn includes $2.5 million received as consultancy fees on achievement of agreed performance criteria. It is highly likely a further $2.5 million in consultancy fees will be received in March 2007 adding to the second half earnings

PPK has proceeded to take up other appropriate investment opportunities and the results for the reporting period include a profit of $460,000 which arose from restatement to fair value of a derivative resulting from an investment in Industrea Limited.

Net profit after tax was $6.842 million (10.4 cents per share) a 267% increase on the prior corresponding period.

During the reporting period the company had in place an on market buy back scheme under which it bought back 6.488.988 shares at a cost of $4,939,000.

The Directors have resolved to pay a fully franked interim dividend of 3.25 cents per share for the 6 months to 31 December 2006. It is anticipated by the directors that the final dividend for the year will be 3.25 cents per share fully franked thereby maintaining the total dividend for the year at 6.5 cents per share fully franked.

PPK GROUP LIMITED AND CONTROLLED ENTITIES ACN 003 964 181

INTERIM FINANCIAL REPORT

DIRECTORS' REPORT

Your directors submit the financial accounts of the consolidated entity consisting of PPK Group Limited and its controlled entities for the half year ended 31 December, 2006.

DIRECTORS

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

Colin Francis Rvan Glenn Robert Molloy Raymond Michael Beath Jury Ivan Wowk David Alfred Hoff

REVIEW OF OPERATIONS

The sale of the plastics packaging business was completed on 1 September 2006. In conjunction with the sale of business, the purchaser entered into long term leases for 5 of the properties owned by PPK. Additionally, the Purchaser leased for a 12 month period the property at Seven Hills occupied by Plaspak JWS Pty Ltd. This property will become available in late 2007 for redevelopment or sale.

PPK has continued to operate its two remaining manufacturing businesses, Rambor Pty Ltd ("Rambor") and York Precision Plastics Pty Ltd ("YPP").

Rambor had a very difficult start to the year with both sales and profit well down on the prior corresponding period. Supply to a major export customer stopped, pending the signing of a new supply agreement. A new 2 year supply agreement commencing 1 January 2007 has now been agreed. Orders have been received and sales to the major export customer will contribute to earnings in the second half.

Rambor released new product lines to the market late in the reporting period and these have been well received. Sales for January and February have regained their former levels and it is anticipated that Rambor will return to its former profit growth.

YPP sales and profit were consistent with the prior corresponding period despite lower margins caused by increases in raw material and cast acrylic prices. This impact on margins should ease in the second half allowing margins to return to normal levels.

YPP has established a wholly owned subsidiary in China to manufacture product and service existing customers who have relocated their manufacturing businesses from Australia to China. This will also provide YPP with greater access to Asian markets and a lower cost base to win export orders from end users in Europe and the USA.

YPP has retained the services of an experienced manager previously involved in the manufacture of similar products in China with the express intention of expanding the China based operations and business.

PPK will continue to look for opportunities which complement these two businesses and in other areas where management's expertise can add value for shareholders.

PPK has proceeded to take up other appropriate investment opportunities and the results for the reporting period include a profit of $460,000 which arose from a restatement to fair value of a derivative resulting from an investment in Industrea Limited.

DIVIDENDS

The Board of Directors has resolved to pay a fully franked interim dividend of 3.25 cents per share.

It is anticipated by the directors that the final dividend for the year will be 3.25 cents per share fully franked thereby maintaining total dividend for the year at 6.5 cents per share fully franked.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Effective 1 September 2006 the parent entity sold its plastics packaging business interests.

There were no other significant changes in the state of affairs of the consolidated entity during the period.

AFTER BALANCE DATE EVENTS

No matters or circumstances have 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 economic entity in subsequent periods.

AUDITORS INDEPENDENCE DECLARATION

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

ROUNDING OF AMOUNTS

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.

COLIN RYAN DIRECTOR

Sydney, 26th February 2007

(formerly Plaspak Group Limited)

Condensed Income Statement

for the Half-Year Ended 31 December 2006

	CONSOLIDATED ENTITY
		31 DECEMBER	31 DECEMBER
	Note	2006	2005
		$000s	$000s
Sales Revenue		11,500	10,630
Cost of sales		(7,735)	(5,610)
GROSS PROFIT		3,765	5,020
Interest Received		104	72
(Loss) / Gain on sale of assets		(6)	(5)
Net Foreign exchange (losses)/gains		(24)	(8)
Other revenue		2,107	85
Other income		578	95
Warehouse & Distribution expenses		(996)	(634)
Selling Expenses		(1,048)	(1,014)
Administrative expenses		(2, 183)	(1,266)
Finance costs		(906)	(505)
PROFIT BEFORE INCOME TAX EXPENSE	2	1,391	1,840
Income tax expense attributable to profit		(368)	(518)
PROFIT AFTER INCOME TAX FROM		1,023	1,322
CONTINUING OPERATIONS
Profit after income tax from discontinued operations		5,831	541
PROFIT AFTER INCOME TAX		6,854	1,863
Profit attributable to minority equity interests		(12)
Net profit after income tax
attributable to members of the parent entity		6,842	1,863
Overall Operations
Basic earnings per share ( cents per share )		10.4	2.7
Diluted earnings per share (cents per share)	4	10.4	2.7
Continuing Operations
Basic earnings per share ( cents per share )		1.6	1.9
Diluted earnings per share (cents per share)	4	1.6	1.9
Discontinued Operations
Basic earnings per share ( cents per share )		8.8	0.8
Diluted earnings per share (cents per share)	4	8.8	0.8

The above Condensed Income Statement should be read in conjunction with the accompanying notes

(formerly Plaspak Group Limited)

Condensed Balance Sheet

for the Half-Year Ended 31 December 2006

	CONSOLIDATED ENTITY
		31 DECEMBER	30 JUNE
	Note	2006	2006
		$000s	$000s
CURRENT ASSETS
Cash		418	218
Trade & other receivables		4,799	6,295
Inventories		6,518	5,550
Derivatives		460	13
Other		501	990
		12,696	13,066
Assets classified as held for sale		2,468	57,154
TOTAL CURRENT ASSETS		15,164	70,220
NON-CURRENT ASSETS
Financial assets		838	265
Investment Property		36,762
Other Property, plant and equipment		9,597	46,665
Deferred tax assets		1,257	3,251
Intangible assets		1,006	2,511
Other		700	781
TOTAL NON-CURRENT ASSETS		50,160	53,473
TOTAL ASSETS		65,324	123,693
CURRENT LIABILITIES
Trade & other payables		3,181	3,010
Interest Bearing Liabilities		1,217	5,291
Current tax liabilities		1,694
Provisions		706	545
Derivatives		50
Other		311
		7,159	8,846
Liabilities directly associated with assets classified as held for sale			22,700
TOTAL CURRENT LIABILITIES		7,159	31,546
NON-CURRENT LIABILITIES
Interest Bearing Liabilities		11,536	45,001
Deferred tax liabilities		342	85
Provisions		834	723
Other
TOTAL NON-CURRENT LIABILITIES		12,712	45,809
TOTAL LIABILITIES		19,871	77,355
NET ASSETS		45,453	46,338
SHAREHOLDERS' EQUITY
Contributed equityReserves		33,946	38,88532
		(50)
Retained earnings		11,557	7,270
Total parent entity interest		45,453	46,187
Minority interest			151
TOTAL SHAREHOLDERS' EQUITY		45,453	46,338

The above Condensed Balance Sheet should be read in conjunction with the accompanying notes

(formerly Plaspak Group Limited)

Condensed Cash Flow Statement

for the Half-Year Ended 31 December 2006

	CONSOLIDATED ENTITY
	31 DECEMBER	31 DECEMBER
	2006	2005
	$000s	$000s
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers	28,072	54,742
Cash payments to suppliers
and employees	(26, 785)	(47, 712)
Other revenue	676	250
Interest received	104	72
Income tax paid	(131)	(695)
Other taxes paid	(577)	(1,013)
Net cash provided by operating activities	1,359	5,644
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of subsidiaries	46,152	797
Proceeds from sale of property, plant & equipment	29	128
Purchase of property,
plant and equipment	(146)	(254)
Payment for purchase of investments	(573)	(184)
Purchase of minority interest in subsidiary		(1,048)
Other	(57)	(310)
Net cash (used in) investing activities	45,405	(871)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shares issued		56
Shares repurchased	(4,939)
Proceeds from borrowings		1,600
Repayment of borrowings	(37, 271)	(2, 875)
Loans advanced
Dividends paid	(2,555)	(2,557)
Interest and costs of borrowings	(1,013)	(2,055)
Net cash (used in) / provided by financing activities	(45, 778)	(5,831)
Net (decrease) in cash held	986	(1,058)
Cash at the beginning
of the financial year	(1, 387)	(1, 308)
Cash at the end of the financial period	(401)	(2,366)

The above Condensed Statement of Cash Flows should be read in conjunction with the accompanying notes

(formerly Plaspak Group Limited) Condensed Statement of Changes in Equity for the Half-Year Ended 31 December 2006

	Issuedcapital	RetainedOtherearningsreserves		Total	Minorityinterest
	$'000	$'000	$'000	$'000	$'000	$'000
At 1 July 2005	38,773	7,403	61	46,237	953	47,190
Profit for the period		1,863		1,863		1,863
Dividends paid		(2,557)		(2,557)		(2,557)
Shares issued	56			56		56
Acquisition of subsidiaryForeign currency translation					(802)	(802)
differences			(5)	(5)		(5)
Share-based payment expense				0		0
At 31 December 2005	38,829	6,709	56	45,594	151	45,745
Profit for the period		2,429		2,429		2,429
Dividends paid		(1,868)		(1,868)		(1,868)
Shares issuedForeign currency translation	56			56		56
differences			(28)	(28)		(28)
Share-based payment expense			4	4		4
At 30 June 2006	38,885	7,270	32	46,187	151	46,338
Profit for the period		6,842		6,842	(12)	6,830
Dividends paid		(2,555)		(2,555)		(2,555)
Shares issued				0		0
Share buyback	(4,939)			(4,939)		(4,939)
Sale of subsidiaryForeign currency translation			(25)	(25)	(139)	(164)
differences			(57)	(57)		(57)
Share-based payment expense				0		0
At 31 December 2006	33,946	11,557	(50)	45,453	٠	45,453

The above Condensed Statement of Changes in Equity should be read in conjunction with the accompanying notes

PPK GROUP LIMITED (formerly Plaspak Group Limited) NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2006

Note 1. Basis of Preparation of Half-Year Financial Statements

This general purpose financial report for the interim half-year reporting period ended 31 December 2006 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001. The historical cost basis has been used, except for derivatives which have been measured at fair value.

This interim report does not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. Accordingly, this interim financial report is to be read in conjunction with the annual report for the year ended 30 June 2006 and any public announcements made by PPK Group Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The same accounting policies and methods of computation have generally been followed in this interim financial report as compared with the most recent annual financial report. AASB 134: Interim Financial Reporting generally only requires disclosure of accounting policies that have changed from those used in the prior annual reporting period.

The half-year report does not include full disclosures of the type normally included in the annual financial report.

SIGNIFICANT ACCOUNTING POLICIES

The significant policies which have been adopted in the preparation of these accounts which that were not applicable as at 30 June 2006 are:

(a) 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.

(b) Intangible Assets

Research and Development

Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised if the product or service is technically feasible, adequate resources are available to complete the project, it is probable that future economic benefits will be generated and expenditure attributable to the project can be measured reliably. Expenditure capitalised comprises costs of materials, services, direct labour and an appropriate portion of overheads. Other development costs are expensed when they are incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and any impairment losses and amortised over the period of expected future sales from the related projects which vary from 3 - 5 years. The carrying value of development costs is reviewed annually when the asset is not yet available for use, or when events or circumstances indicate that the carrying value may be impaired.

(c) Investments and Other Financial Assets

Financial assets at fair value through profit or loss

Financial assets designated as at fair value through profit or loss are measured at fair value with gains or losses recognised in the income statement. A financial asset is classified as a financial asset at fair value through profit or loss if acquired principally for the purpose of selling in the short term, if it is a derivative that is not designated as a hedge or if it is a financial asset otherwise designated as being in this category upon initial recognition.

Derivative component of Investments in Financial Assets

Where a financial asset contains a component classified as a derivative financial asset, the derivative component is measured at fair value separately from the non-deriavtive component.

(d) 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,

	CONSOLIDATED ENTITY
Notes	31 DECEMBER2006$000s	31 DECEMBER2005$000s
NOTE 2
REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS
(a) REVENUE
Sale of goods	24,769	50,271
Other Revenue:
Interest received	104	72
Deferred income	2	11
Rental income	2,107	155
	26,982	50,509
(b) OTHER INCOME
Sundry income	116	95
Fair value adjustment on investment in a derivative	460
Gain on sale of non-current assets	6	1
	582	96
(C) EXPENSES
Amortisation - leased assets	52	470
- intangibles	10	$37,$
Total Amortisation	62	507
Depreciation - buildings	216	236
- plant and equipment	342	2,273
	558	2,509
Foreign currency translation losses	31	62
Interest paid	1,013	2,049
(d) INDIVIDUALLY SIGNIFICANT ITEMS
Gain on sale of Plastics Packaging business	8,740
Fair value adjustment on investment in a derivative	460
Gain on sale of Advanced Power		336
	9,200	336

Advanced Power Pty Ltd was sold effective 1 July 2005 for $3.5m. This resulted in a consolidated profit on sale of $336k.

NOTE 3

DIVIDENDS Dividends paid

Final ordinary dividend of 3.75c per share - 100% franked	2.555	2.553
(2005 3.75c per share - 100% franked)

CONSOLIDATEDENTITY
31 DECEMBER	31 DECEMBER
2006	2005
$000s	$000s
10.4	2.7
10.4	2.7
6.842	1,863
6,842	1,863
65,996,640	68,036,121
	13,700
65,996,640	68.049.821

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

NOTE 5

SEGMENT INFORMATION

(a) Half Year ended 31 December 2006

	Discontinued		Mining
	Plastics	Custom	Equipment	Property& Other
Business Segments	Packaging	Plastics	Manufacturing	Investments	Total
	$000s	$000s	$000s	$000s	$000s
Primary Segment
Sales Revenue	13,268	10,321	1,180		24,769
Other Revenue	2			2,211	2,213
Total Revenue	13,270	10,321	1,180	2,211	26,982
Segment result	10,222	563	6	2,245	13,036
Unallocated corporate costs					(882)
Unallocated interest					(541)
Consolidated operating profit
before income tax					11,613
Income tax (expense) / benefit					(4,759)
Consolidated operating profit from ordinary

activities after income tax

6,854

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(b) Half 19af ended 31 December 2005
	Discontinued	Discontinued	Discontinued		Mining
	Plastics	Importing &	Generator	Custom	Equipment	Property & Other
Business Segments	Packaging	Distribution	Operations	Plastics	Manufacturing	Investments	Total
	$000s	$000s	$000s	$000s	$000s	$000s	$000s
Primary Segment
Sales Revenue	37,962			10,465	1,844		50,271
Other Revenue	11	$\overline{\phantom{a}}$	$\blacksquare$	$\overline{r}$	÷	227	238
Total Revenue	37,973	$\overline{\phantom{a}}$		10,465	1,844	227	50,509
Segment result	256	(32)	336	687	465	480	2,192
Corporate costs recovery							240
Consolidated operating profit
before income tax							2,432
Income tax (expense) / benefit							(569)
Consolidated operating profit from ordinaryactivities after income tax							1,863

(c) The consolidated entity operates wholly within Australia and New Zealand. New Zealand is not a material additional geographic segment.

(d) The consolidated entity has the following 5 business segments

• The discontinued Plastics packaging segment primarily manufactured bottles and closures and imports and distributes trigger sprays.
• The Property segment which owns the properties form which the plastics packaging segment carried out its manufacturing operations. These properties were retained and leased at commercial rents to the purchaser of the plastics packaging business.
• The Custom plastics segment manufactures extruded acrylic and imports and distributes cast acrylic for lighting and industrial applications.
• The Mining equipment seament manufactures portable underground mining equipment.
• The following segments had some comparative figures for the December 2005 Half Year.
• The import and distribution segment was disposed of in June 2005.
• The generator operations segment was disposed of effective July 2005.

(e) Segment accounting policies are the same as the consolidated entity's policies described in note 1.

NOTE 6

EVENTS SUBSEQUENT TO REPORTING DATE

No matters or circumstances have 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 subsequent periods.

NOTE7

CONTINGENT LIABILITIES / ASSETS

The terms of sale of the plastic packaging businesses required a post settlement calculation of the movement in certain working capital amounts. The calculation of this amount is now the subject of a dispute resolution process between PPK Group Ltd and the purchaser. PPK Group Ltd claims an amount of approximately $900,000 is due to it by the purchaser, whereas the purchaser claims an amount of approximately $1,300,000 is due to it by PPK Group Ltd. No amounts have been included in the financial statements in respect of this matter.

There has been no other change in contingent liabilities since the last annual reporting date

	Half-year		Half-year
	2006	2005	2006	2005
	Shares	Shares	$'000	$'000
Issues of Ordinary Shares During the Half-Year
Exercise of options		75.000	$\sim$	56

NOTE9

DISCONTINUED OPERATIONS

On 14 September 2005 a contract for the sale of Advanced Power Pty Ltd for $3.5million was entered into. This company formed the whole of the Generator Operations segment of the Consolidated Entity.

The effective date of the sale was 1 July 2005. This operation only formed part of the consolidated entity for 5 months of the 2005 financial year.

On 28 June 2006 a conditional contract was signed for the sale of the plastic packaging business of Plaspak. 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 received shareholder approval at a meeting held on 16 August 2006 and settled on 1 September 2006.

Financial information relating to the discontinued operation is set out below and in the Segment Reporting note 5

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

		CONSOLIDATED ENTITY
	31 DECEMBER2006	31 DECEMBER2005
	$000s	$000s
Revenue from ordinary activities	13,269	39,641
Cost of sales	(9, 477)	(31,236)
GROSS PROFIT	3,792	8,405
Profit / (Loss) on sale of assets	8,937	342
Foreign exchange (losses) / gains	(7)	(54)
Other revenues from ordinary activities	17	81
Warehouse & Distribution expenses	(847)	(2,775)
Selling Expenses	(282)	(865)
Administrative expenses	(1,281)	(2,998)
Finance costs	(107)	(1,544)
PROFIT FROM DISCONTINUING OPERATIONS	10,222	592
BEFORE INCOME TAX
Income tax expense	(4, 391)	(51)
PROFIT FROM DISCONTINUING OPERATIONS	5,831	541
AFTER INCOME TAX

The net cash flows of the discontinuing operations which have been incorporated into the statement of cash flows are as follows:

Net cash inflow (outflow) from ordinary activities	1.561	2.190
Net cash inflow (outflow) from investing activities	(44)	(197)
Net cash inflow (outflow) from financing activitiesNet increase in cash generated by discontinuing operations	(1,515)	(1,989)4

The asset and liability details of items disclosed as "held for sale" in the balance sheet would otherwise has been classified as the following types of assets and liabilities:

	CONSOLIDATEDENTITY
	31 AUGUST	30 JUNE
	2006	2006
	$000s	$000s
CURRENT ASSETS
Cash and cash equivalents	46	44
Trade and other receivables	13,702	15,414
Inventories	10,840	10,439
Other	126	21
Derivatives	0	$\ddagger$
Non current asset held for resale
TOTAL CURRENT ASSETS	24,714	25,919
NON-CURRENT ASSETS
Financial assets	0	0
Property, plant and equipment	25,440	27,822
Deferred tax assets	708	1,188
Intangible assets	1,719	2,189
Other	2	36
TOTAL NON-CURRENT ASSETS	27,869	31,235
TOTAL ASSETS HELD FOR SALE	52,583	57,154
CURRENT LIABILITIES
Trade and other payables	8,448	10,245
Interest Bearing Liabilities	2,930	3,264
Current tax liabilities	$\Omega$	$\Omega$
Provisions	1,292	1,228
Derivatives	0	6
Other	10	10
TOTAL CURRENT LIABILITIES	12,680	14,753
NON-CURRENT LIABILITIES
Interest Bearing Liabilities	4,659	4,941
Deferred tax liabilities	1,499	1,562
Provisions	1,425	1,438
Other	5	6
TOTAL NON-CURRENT LIABILITIES	7,588	7,947
TOTAL LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS HELD FOR SALE	20,268	22,700
NET ASSETS	32,315	34,454

The carrying values of assets and liabilities sold are in the 31 August 2006 column.

Chartered Accountants 6 Advisers

Level 19, 2 Market Street Sydney NSW 2000 GPO Box 2551 Sydney NSW 2001 Tel. ÷61 2 9286 5555 Fax +61 2 9286 5599 Email: briesydi@bdosyd.com.au manas bules centra cua

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of PPK Group Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of PPK Group Limited, which comprises the condensed balance sheet as at 31 December 2006, and the condensed income statement, condensed statement of changes in equity and condensed cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year end or from time to time during the half-year (in order for the disclosing entity to lodge the half-year financial report with the Australian Securities and Investments Commission).

Directors' Responsibility for the Half-Year Financial Report

The directors of PPK Group Limited are responsible for the preparation and fair presentation of the half-vear financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Cargarations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the disclosing entity's financial position as at 31 December 2006 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001, As the auditor of PPK Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Lisbility fimited by a scheme approved under Professional Standards Legislation BDD is a mational association of commodo sarverskip and entities

Indevendence

In conducting our review, we have complied with the independence requirements of the Carparations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of PPK Group Limited on 26 February 2007, would be in the same terms if provided to the directors as at the date of this auditor's review report.

Сангінкіан

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

• {a} giving a true and fair view of the consolidated entity's financial position as at 31 December 2006 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations 仙 Regulations 2001.

BDO Chartered Accountants

W.Áastord Partner

Dated Sydney this 26th day of February 2006

Chartered Accountants& Advisers

DECLARATION OF INDEPENDENCE BY WAYNE BASFORD TO THE DIRECTORS OF PPK GROUP LIMITED

To the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of this Act in relation to the s. review; and
• no contraventions of any applicable code of professional conduct in relation to the review.

WEASFORD Partner

BDO

Dated Sydney this 26th day of February 2006

Liability limited by a scheme approved under Professional Standards Legislation $\mathbb{B} \mathbb{D} \mathbb{C}$ is a mational accordation of separate partnerskie and entime.

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

NTA Backing	Current period		Previous correspondingperiod
Net tangible asset backing per share	72.1	cents	-59.	cents

The above NTA backing per share excludes the effect if Land & Buildings were revalued to their most recent valuation of $60.2m and allowing for capital gains tax of $5.7m. This would have the effect of increasing effective NTA backing per share by 17.3 cents to 89.4 cents.

DIVIDENDS

Interim dividend resolved to be paid		3.25 cents / share fully franked
Date dividend is payable	27 March 2007
Record date	16 March 2007
	CurrentPeriod	PreviousCorrespondingPeriod
Interim Dividend	$3.25$ cents	$2.75$ cents

The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist at 31 December 2006 is $9,706,350.

We anticipate that dividends will be fully franked for the foreseeable future.

	Half Year Ended31-Dec-06$000s	Half Year Ended$31 - Dec -05$$000s
Amount of interim dividend payable - fully franked	2,004	1,872
Both current and prior year dividends were fully franked.
ORDINARY SHARES ON ISSUE		NUMBER
Number of securities on issue at beginning of year		68,153,105
Shares repurchased through approved on market share buy back		(6,488,988)
		61 664 117

OPTIONS

There were 1,100,000 options outstanding as at balance date.

These consisted of:

• 900,000 non-executive director options granted in August 2002 at an exercise price of $1.65 expiring on 12 August 2007; and

• 200,000 executive director options granted to the Managing Director, David Hoff, in November 2004 at an exercise price of $1.40, which expire on 31 May 2007.