PPK GROUP LIMITED — Interim / Quarterly Report 2009

Feb 25, 2009

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PPK GROUP LIMITED

ABN 65 003 964 181

Appendix 4D Half-year report & half-year accounts Period ended 31 December 2008

Previous Corresponding Period 31 December 2007

Contents

1. Appendix 4D - Half-year report

2. Half-year accounts, Directors' Report and Audit review report

3. Directors' Report & Declaration

4. Independent Auditor's Review Report & Declaration of Independence

This information is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.2A and should be read in conjunction with the most recent annual financial report.

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HIGHLIGHTS OF RESULTS FOR ANNOUNCEMENT TO THE MARKET (figures are in A$000s)

	December 2008 $000s	December 2007 $000s	Change $000s	Change %
SALES REVENUE	2,924	1,700	1,224	72.0%
NET PROFIT BEFORE INCOME TAX AND (LOSSES)/GAINS FROM INVESTING	1,952	327	1,625	497%
UNREALISED (LOSSES)/GAINS FROM INVESTING	(2,761)	987	(3,748)	-380%
REALISED GAINS FROM INVESTING	-	1,289	(1,289)	-100%
(LOSS)/PROFIT BEFORE INCOME TAX	(809)	2,603	(3,412)	-131%
(LOSS)/PROFIT AFTER TAX ATTRIBUTABLE TO MEMBERS	(524)	1,880	(2,404)	-128%
EARNINGS PER SHARE	(0.9)	3.1	(4.0)	-129%

DIVIDENDS

DIVIDENDS
2009 FULLY FRANKED INTERIM DIVIDEND PER SHARE	1.50 cents
2008 FULLY FRANKED INTERIM DIVIDEND PER SHARE	3.25 cents
RECORD DATE FOR DETERMINING ENTITLEMENT TO DIVIDEND	17 March 2009
DATE DIVIDEND IS PAYABLE	27 March 2009

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COMMENTARY ON RESULTS

PPK has reported an after tax loss of $524,000 for the first half year.

As a result of worsening global economic conditions and consequent downward pressure on the value of Australian Securities, PPK has written down the value of its investments in listed shares and derivatives held as at 31 December, 2008 by $2.761 million.

Trading operations, including rental income from properties and earnings by Rambor, generated a profit before tax of $1.952 million.

Rental Income improved with the signing of a seven year lease on the Seven Hills property from 1 August, 2008. This property was vacant from 1 November, 2007 to 31 July 2008.

PPK's manufacturing business, Rambor, delivered a considerably improved sales and profit performance for the six months to 31 December, 2008 compared with the prior comparative period. This improvement is expected to continue for the second half leading to an improved full year profit performance.

During the reporting period:

• the on market share buy back announced by PPK on 19 December 2007 and commencing on 7 January, 2008 ended on 31 December, 2008

• PPK acquired 1,245,963 shares during the reporting period, thereby reducing the number of PPK shares on issue at the date of this report to 58,006,650

The Directors have resolved to pay a fully franked dividend of 1.5 cents per share on 27 March, 2009 for the six months to 31 December 2008. This represents a 63.7% payout of after tax trading operations profits for the period.

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PPK GROUP LIMITED

ABN 65 003 964 181

Interim Financial Report

For half-year ended 31December 2008

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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, 2008.

DIRECTORS

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

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

REVIEW OF OPERATIONS

PPK Group Limited (“PPK”) now reports on segments under which it operates, namely:

Investment Properties

PPK has six properties, all of which are under lease.

These leases provide an increasing yearly income stream for the group.

The property at Seven Hills in NSW became vacant on 1 November 2007 and was leased for seven years from 1 August 2008.

Investments

PPK continues to explore opportunities to make strategic investments.

Mining equipment manufacture

During the reporting period, Rambor:

• continued to develop new products for the market;

• participated in the largest mining equipment exhibition in the United States in September 2008 which participation has provided encouraging opportunities for the growth of the Rambor business in this region; and

• signed a three year supply agreement with a major mining equipment manufacturer in China, the Hebei Jikai Group of Shijiazhuang, Hebei Province. This will lead to expanding Rambor’s opportunities in the Asia region.

Based on these initiatives and current orders from customers, Rambor is expected to deliver a positive operating performance in the second half of the year.

DIVIDENDS

The Board of Directors has resolved to pay a fully franked interim dividend of 1.5 cents per share.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

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

AFTER BALANCE DATE EVENTS

Since 31 December 2008, there has been significant volatility in the Australian share 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 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 INDEPENDECE 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.

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COLIN FRANCIS RYAN Director

Dated this 25[th] day of February 2009

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PPK GROUP LIMITED AND CONTROLLED ENTITIES ACN 003 964 181

DECLARATION BY DIRECTORS

The directors of the company declare that:

1. The financial statements, comprising the Income Statement, Balance Sheet, Cash Flow Statement, Statement of Changes in Equity and accompanying notes, are in accordance with the Corporations Act 2001 and:

2. (a) comply with Accounting Standard AASB134 “Interim Financial Reporting” and the Corporations Regulations 2001; and

3. (b) give a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and of performance for the halfyear ended on that date.

4. In the director’s opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

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COLIN FRANCIS RYAN Director

Dated this 25[th] day of February 2009

PPK GROUP LIMITED

Consolidated Income Statement for the Half-Year Ended 31 December 2008

PPK GROUP LIMITED for the Half-Year Ended 31 December 2008 Consolidated Income Statement
Note Sales Revenue Cost of sales GROSS PROFIT Interest Received Rent From Investment Properties Gain on sale of available-for-sale financial assets Net Foreign exchange gains/(losses) Other income Warehouse & Distribution expenses Selling Expenses Administrative expenses Finance costs Fair value adjustments on derivatives Impairment of available-sale-financial assets (LOSS)/PROFIT BEFORE INCOME TAX EXPENSE 2 Income tax expense attributable to profit (LOSS)/PROFIT AFTER INCOME TAX FROM CONTINUING OPERATIONS Earnings per share (cents per share) Continuing Operations Total basic earnings per shares Diluted earnings per share 4	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2008 2007 $000s $000s 2,924 1,700 (1,510) (1,049)
	1,414 651 313 397 2,478 2,251 - 1,289 263 (15) 23 35 (40) (24) (39) (54) (1,714) (2,304) (746) (610) (1,347) 1,235 (1,414) (248)
	(809) 2,603 285 (723)
	(524) 1,880
	(0.9) 3.1
	(0.9) 3.1
	(0.9) 3.1

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

PPK GROUP LIMITED

Consolidated Balance Sheet

for the Half-Year Ended 31 December 2008

		CONSOLIDATED ENTITY	CONSOLIDATED ENTITY
		31 DECEMBER	30 JUNE
	Note	2008	2008
		$000s	$000s
CURRENT ASSETS
Cash		855	1,349
Trade & other receivables		1,921	3,263
Inventories		1,114	1,051
Other		345	362
TOTAL CURRENT ASSETS		4,235	6,025
Assets classified as held for sale		703	703
TOTAL CURRENT ASSETS		4,938	6,728
NON-CURRENT ASSETS
Trade & other receivables		2,351	7,216
Financial assets		2,628	3,276
Investment Property		40,279	40,466
Other Property, plant and equipment		2,062	2,149
Deferred tax assets		2,462	2,070
Intangible assets		890	892
Derivatives		-	1,347
TOTAL NON-CURRENT ASSETS		50,672	57,416
TOTAL ASSETS		55,610	64,144
CURRENT LIABILITIES
Trade & other payables		590	1,027
Interest Bearing Liabilities		2,478	2,856
Current tax liabilities		419	866
Provisions		285	310
Other		-	-
TOTAL CURRENT LIABILITIES		3,772	5,059
NON-CURRENT LIABILITIES
Interest Bearing Liabilities		15,500	19,562
Deferred tax liabilities		668	876
Provisions		339	338
TOTAL NON-CURRENT LIABILITIES		16,507	20,776
TOTAL LIABILITIES		20,279	25,835
NET ASSETS		35,331	38,309
SHAREHOLDERS' EQUITY
Contributed equity		31,249	32,033
Reserves		67	(152)
Retained earnings		4,015	6,428
TOTAL SHAREHOLDERS' EQUITY		35,331	38,309

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

PPK GROUP LIMITED

Consolidated Cash Flow Statement

for the Half-Year Ended 31 December 2008

CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers Cash payments to suppliers and employees Interest received Dividends Received Income tax paid Other taxes paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Payments for purchase of available-for-sale financial assets Payments for convertible notes Proceeds from sale of available-for-sale financial assets Purchase of intangible assets Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Loans advanced Shares repurchased Proceeds from borrowings Repayment of borrowings Loans repaid Dividends paid Interest and costs of borrowings Net cash (used in) / provided by financing activities Net (decrease) in cash held Cash at the beginning of the financial year Cash at the end of the financial period	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2008 2007 $000s $000s 5,828 3,658 (3,262) (3,658) 261 397 18 23 (856) (3,263) (177) (143)
	1,812 (2,986)
	(164) (413) (453) (3,144) (302) - - 3,480 (57) (37)
	(976) (114)
	(677) (50) (784) (155) - 8,495 (4,172) (206) 7,213 149 (1,889) (5,044) (746) (610)
	(1,055) 2,579
	(219) (521) (1,161) (377)
	(1,380) (898)

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

PPK GROUP LIMITED

Consolidated Statement of Changes in Equity for the Half-Year Ended 31 December 2008

At 1 July 2007 Fair value adjustment in listed securities Realised gain on sale of sale of listed securities less deferred tax impact Total income & expense recognised directly in equity Profit for the period Dividends paid Share buyback At 31 December 2007 Fair value adjustment in listed securities Realised gain on sale of sale of listed securities less deferred tax impact Total income & expense recognised directly in equity (Loss)/Profit for the period Dividends paid Share buyback At 30 June 2008 Fair value adjustment in listed securities Realised gain on sale of sale of listed securities Transfer of impairment losses to Income Statement Less deferred tax impact Total income & expense recognised directly in equity (Loss)/Profit for the period Dividends paid Share buyback At 31 December 2008

Issued capital Retained earnings Other reserves Total equity $'000 $'000 $'000 $'000 33,573 12,819 567 46,959 1,175 1,175 (449) (449) (217) (217) - - 509 509 1,880 1,880 (5,044) (5,044) (155) (155) 33,418 9,655 1,076 44,149 (1,754) (1,754) - - 526 526 - - (1,228) (1,228) (1,273) (1,273) (1,954) (1,954) (1,385) (1,385) 32,033 6,428 (152) 38,309 - (155) (155) - - 468 468 - (94) (94) - - 219 219 (524) (524) (1,889) (1,889) (784) (784) 31,249 4,015 67 35,331

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

PPK GROUP LIMITED NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2008

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 2008 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001. The half year report has been prepared on an accrual basis and is based on historical cost basis, except for derivatives and financial assets for which the fair value basis of accounting has been applied.

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 2008 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.

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.

The interim financial report was authorised for issue in accordance with a resolution of the directors on 25th February 2009

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted in the preparation of this interim financial report are the same as those applied by PPK Group Limted in its annual financial report as at and for the year ended 30 June 2008.

		CONSOLIDATED ENTITY	CONSOLIDATED ENTITY
		31 DECEMBER	31 DECEMBER
		2008	2007
	Notes	$000s	$000s
NOTE 2
REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS
(a) REVENUE
Sale of goods		2,924	1,700
Rental income from investment properties		2,478	2,251
Interest received		313	397
Dividends received - other parties		18	23
		5,733	4,371
(b) OTHER INCOME
Net gain on sale of available-for-sale financial assets		-	1,289
Sundry income		5	12
Fair value adjustment on derivatives		-	1,235
		5	2,536
(C) EXPENSES
Amortisation - intangibles		59	48
Depreciation - buildings		243	240
- plant and equipment		195	171
		438	411
Fair value adjustment on derivatives		1,347	-
Foreign currency translation (gains)/losses		(263)	15
Interest paid		746	610
Impairment of available-for-sale financial assets
- Listed		1,414	-
- Unlisted		-	248
(d) INDIVIDUALLY SIGNIFICANT ITEMS
Income
Gain on sale of available-for-sale financial assets		-	1,289
Expense
Fair value adjustment on derivatives (expense)/income		(1,347)	1,235
Impairment of available-for-sale financial assets		(1,414)	(248)
		(2,761)	987
Total of individually significant items		(2,761)	2,276
NOTE 3
DIVIDENDS
Dividends paid
Final ordinary dividend of 3.25c per share - 100% franked		1,889	1,987
(2007 3.25c per share - 100% franked)
Special dividend of 5c per share - 100% franked		-	3,057
		1,889	5,044

	CONSOLIDATED ENTITY	CONSOLIDATED ENTITY
	31 DECEMBER	31 DECEMBER
	2008	2007
Notes	$000s	$000s
NOTE 4
EARNINGS PER SHARE
Basic earnings per share (cents per share)	(0.9)	3.1
Diluted earnings per share	(0.9)	3.1
(a) Reconciliation of Earnings to Net Profit
Earnings used in calculating Basic EPS	(524)	1,880
Earnings used in calculating Diluted EPS	(524)	1,880
(b) Weighted average number of ordinary shares outstanding during the period
used in calculation of basic EPS	58,532,643	61,084,433
Potential ordinary shares assumed to have been issued for no consideration	-	-
Weighted average number of ordinary shares outstanding during the year
used in calculation of diluted EPS	58,532,643	61,084,433

(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.

NOTE 5

SEGMENT INFORMATION

(a) Half Year ended 31 December 2008

Business Segments Primary Segment Sales Revenue Rental income Interest Received Dividends Received Total Revenue Segment result Unallocated corporate income & expenses Unallocated interest income & expense Consolidated operating profit before income tax Income tax benefit / (expense) Consolidated operating profit from ordinary activities after income tax	Mining Investment Investing Equipment Properties Manufacturing $000s $000s $000s	Total $000s
	- - 2,924 2,478 - - - 177 1 - 23 -	2,924 2,478 178 23
	2,478 200 2,925	5,603
	2,087 (2,573) 735	249
		(465) (593)
		(809)
		285
		(524)

(b) Half Year ended 31 December 2007

Business Segments Primary Segment Sales Revenue Rental income Interest Received Dividends Received Fair value adjsutment on derivatives Gain on sale of available-for-sale financial assets Other Revenue Total Revenue Segment result Unallocated corporate income & expenses Unallocated interest income & expense Consolidated operating profit before income tax Income tax (expense) / benefit Consolidated operating profit from ordinary activities after income tax	Mining Investment Investing Equipment Properties Manufacturing $000s $000s $000s	Total $000s
	- - 1,700 2,251 - - - 55 - - 23 - - 1,235 - - 1,289 - - - 6	1,700 2,251 55 23 1,235 1,289 6
	2,251 2,602 1,706	6,559
	1,853 2,182 63	4,098
		(1,252) (243)
		2,603
		(723)
		1,880

(c) The consolidated entity operates wholly within Australia.

(d) The consolidated entity had the following 3 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 has also made loans from which earns income and capital growth.

• The Mining equipment segment manufactures portable underground mining equipment.

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

NOTE 6

EVENTS SUBSEQUENT TO REPORTING DATE

Since 31 December 2008, there has been significant volaltility in the Australian share market. If this volatility continues for a sustained period, it could impact on the value attributed to PPk investments in future reporting periods.

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.

NOTE 7

CONTINGENT LIABILITIES / ASSETS

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

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

NTA Backing	Current period	period Previous corresponding
Net tangible asset backing per share	59.4 cents	70.9 cents

The above NTA backing per share excludes the effect if Land & Buildings were revalued to their most recent valuation of $56.5m and allowing for capital gains tax of $4.9m. An idependent valuation was last undertaken in July 2006.

This would have the effect of increasing effective NTA backing per share by 18.3 cents to 77.7 cents (2007 by 16.9 cents to 87.8 cents).

DIVIDENDS

Interim dividend resolved to be paid	1.50 cents per share fully franked
Date dividend is payable	27 March 2009
Record date	16 March 2009
		Previous
	Current	Corresponding
	Period	Period
Interim Dividend	1.50 cents	3.25 cents

The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist at 31 December 2008 is $4,074,000

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

Half Year Ended 31-Dec-08 $000s Amount of interim dividend payable - fully franked 870 Both current and prior year dividends were fully franked. ORDINARY SHARES ON ISSUE Number of securities on issue at beginning of year Shares repurchased through approved on market share buy back	Half Year Ended 31-Dec-07 $000s 1,954 NUMBER 59,252,613 (1,245,963)
	58,006,650

OPTIONS

There were no options outstanding as at balance date.

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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 balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and 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 the disclosing entity are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing 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 Interim and Other Financial Reports 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 consolidated entity’s financial position as at 31 December 2008 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.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 would be in the same terms if it had been given to the directors at the time that this auditor’s review report was made.

Conclusion

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 Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

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BDO Kendalls Audit & Assurance (NSW-VIC) Pty Limited

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W. Basford Director

Dated Sydney this 25[th] day of February 2009

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

As lead auditor for the review of PPK Group Limited for the half-year ended 31 December 2008, I declare that to the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of PPK Group Limited and the entities it controlled during the period.

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W. Basford Director

BDO Kendalls Audit & Assurance (NSW-VIC) Pty Limited

Dated Sydney this 25[th] day of February 2009

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