PPK GROUP LIMITED — Interim / Quarterly Report 2011

Feb 27, 2011

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PPK GROUP LIMITED

ABN 65 003 964 181

Appendix 4D Half-year report & half-year accounts Period ended 31 December 2010

Previous Corresponding Period 31 December 2009

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 2010 $000s	December 2009 $000s	Change $000s	Change %
SALES REVENUE	2,638	2,314	324	14%
RENTAL INCOME FROM INVESTMENT PROPERTIES	865	1,587	(722)	-45%
REALISED GAINS FROM INVESTING	75	1,044	(969)	-93%
REALISED GAIN ON SALE OF INVESTMENT PROPERTY	1,514	2,184	(670)	-31%
PROFIT/(LOSS) BEFORE INCOME TAX	(849)	4,943	(5,792)	Profit to Loss
PROFIT/(LOSS) AFTER TAX ATTRIBUTABLE TO MEMBERS	(1,381)	3,609	(4,990)	Profit to Loss
EARNINGS PER SHARE	(2.4)	6.2	(8.6)	Profit to Loss

DIVIDENDS

DIVIDENDS
2011 FULLY FRANKED INTERIM DIVIDEND PER SHARE	1.00 cent
2010 FULLY FRANKED INTERIM DIVIDEND PER SHARE	1.50 cent
RECORD DATE FOR DETERMINING ENTITLEMENT TO DIVIDEND	25 March 2011

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PPK Group Limited 4D Commentary on Results

Further to our earlier notification to the market on 20 January 2011 of estimated earnings for the six months ended 31 December 2010, PPK Group Limited (”PPK”) advises it has incurred an after tax loss of $1.4 million for the first half of the year.

PPK’s profit before tax for the half year was $3.5 million before allowing for impairments and share of losses in associated companies. The reported pre tax loss of $849,000 for the half year was incurred after taking into account $4.35 million of these impairments and share of losses in associated companies.

For tax purposes these impairments are capital losses and, once realised, can only be applied against capital profits. The Directors have only recognised a Deferred Tax Asset to the extent that they have reasonable certainty of realising such capital profits. Accordingly, despite the reported loss due to these impairments there is an income tax expense of $532,000.

The value of the shares in listed company Allied Brands Limited (ABQ) and listed associate company Frigrite Limited (FRR) have both been written down to nil at 31 December 2010. The investment in listed associate company Intelligent Solar Limited (ISL) is at the market share price of 2 cents per share at 31 December 2010.

PPK also holds Convertible Notes of $2 million in FRR and $485,000 in ISL. In the case of FRR, the notes are secured by fixed and floating charges over the assets of FRR and its 2 subsidiaries and a mortgage over real estate. The directors expect to recover the full amount of $2 million.

Property

An extension to the lease of the property at Dandenong, Victoria, until August 2015 has now been executed by the existing tenant. PPK has leased the property at Arndell Park, NSW for a short term expiring in August 2011.

Rambor Pty Ltd

Sales and profitability of Rambor to date are well in excess of the previous corresponding period. In addition, Rambor has signed an addendum to the development contract with Hilti Corporation for handheld one step rock anchor delivery platforms. This addendum expands the product range that will be developed with and supplied to Hilti.

Willoughby

As previously reported PPK has a substantial investment in a subdivision and construction project at Willoughby, Sydney. Building works are expected to commence on the site in April 2011 after finalisation of the Council approvals in February 2011. Contracts, with a value in excess of $30m, have been exchanged for the sale of houses in this development.

Dividend

As PPK maintains a strong cash position with more than $10 million cash on deposit, an interim dividend of 1 cent per share, fully franked, will be paid in April 2011.

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PPK GROUP LIMITED

ABN 65 003 964 181

Interim Financial Report

For half-year ended 31December 2010

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PPK GROUP LIMITED AND CONTROLLED ENTITIES ABN 65 003 964 181

HALF YEAR CONSOLIDATED FINANCIAL STATEMENTS

DIRECTORS' REPORT

Your directors present their report on the consolidated entity consisting of PPK Group Limited and its controlled entities for the half year ended 31 December, 2010.

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

REVIEW OF OPERATIONS

A detailed review of results and operations is included in the Commentary on Results on page 3 of this report.

DIVIDENDS

The Board of Directors has resolved to pay a fully franked interim dividend of 1.0 cent 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.

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 28th day of February 2011

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PPK GROUP LIMITED AND CONTROLLED ENTITIES ABN 65 003 964 181

DECLARATION BY DIRECTORS

The directors of the company declare that:

• a. The accompanying financial statements and accompanying notes, are in accordance with the Corporations Act 2001 and:

• (i) comply with Accounting Standard AASB134 “Interim Financial Reporting” and the Corporations Regulations 2001; and

• (ii) give a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of performance for the half-year ended on that date.

• b. 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 28th day of February 2011

PPK GROUP LIMITED

Consolidated Income Statement for the Half-Year Ended 31 December 2010

Note REVENUES Mining equipment manufacture Investment Properties Investment Activities Interest received Total Revenue 2a OTHER INCOME 2b EXPENDITURE Mining equipment manufacture Investment Properties Investment Activities Administrative expenses Finance costs Total Expenditure 2d 2c Profit (loss) before income tax expense Income tax (expense)/credit attributable to profit Profit (loss) after income tax from continuing operations Earnings per share from continuing operations 4 Total basic earnings per shares Diluted earnings per share Share of profit (loss) of associates accounted for using the equity method	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2010 2009 $000s $000s 2,638 2,314 865 1,587 17 30 867 281
	4,387 4,212
	3,210 4,024 (2,235) (2,240) (708) (1,113) (3,918) (4) (474) (611) (699) (456)
	(8,034) (4,424)
	(412) 1,131
	(849) 4,943 (532) (1,334)
	(1,381) 3,609
	Cents Cents (2.4) 6.2
	(2.4) 6.2

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

PPK GROUP LIMITED

Consolidated Statement of Comprehensive Income for the Half-Year Ended 31 December 2010

Net Profit (loss) for the half year OTHER COMPREHENSIVE INCOME Changes in fair value on available-for-sale financial assets Provision for income tax on changes in fair value Realised gain on sale of available-for-sale financial assets transferred to the income statement from the asset revaluation reserve Provision for income tax thereon Other comprehensive income net of income tax Total Comprehensive Income (loss) for the half year	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2010 2009 $000s $000s (1,381) 3,609 285 251 (85) (75) (10) (146) 3 44
	193 74
	(1,188) 3,683

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

PPK GROUP LIMITED

Consolidated Statement of Financial Position for the Half-Year Ended 31 December 2010

CURRENT ASSETS Cash and cash equivalents Trade & other receivables Inventories Other current assets TOTAL CURRENT ASSETS Assets classified as held for sale TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade & other receivables Investments in associated companies - equity accounted Financial assets Investment Properties Other Property, plant and equipment Deferred tax assets Intangible assets Derivatives TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade & other payables Interest Bearing Liabilities Current tax liabilities Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest Bearing Liabilities Deferred tax liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS SHAREHOLDERS' EQUITY Contributed equity Reserves Retained earnings TOTAL SHAREHOLDERS' EQUITY	CONSOLIDATED ENTITY 31 DECEMBER 30 JUNE 2010 2010 $000s $000s 10,224 23 1,695 7,153 1,469 1,509 294 410
	13,682 9,095 0 7,103
	13,682 16,198
	7,233 7,617 1,163 3,692 1,119 1,105 24,809 24,248 1,376 1,624 2,073 2,036 758 779 0 128
	38,531 41,229
	52,213 57,427
	437 413 0 2,944 442 458 236 215
	1,115 4,030
	18,500 18,500 134 55 52 48
	18,686 18,603
	19,801 22,633
	32,412 34,794
	30,632 31,249 217 24 1,563 3,521
	32,412 34,794

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes

PPK GROUP LIMITED

Consolidated Statement of Cash Flows

for the Half-Year Ended 31 December 2010

CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers Cash payments to suppliers and employees Interest received Dividends Received Income tax paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investment property Proceeds from sale of plant & equipment Purchase of property, plant and equipment Payments for purchase of available-for-sale financial assets Payments for investments in associate companies Payments for investments in derivatives Payments for convertible notes Proceeds from sale of available-for-sale financial assets Purchase of intangible assets Net cash provided by (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 provided by (used in) financing activities Net increase (decrease) in cash held Cash at the beginning of the financial period Cash at the end of the financial period	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2010 2009 $000s $000s 5,217 4,663 (3,133) (3,831) 896 228 17 30 (586) (796)
	2,411 294
	8,085 5,106 - 60 (221) (112) (88) (965) 30 (2,393) - (395) (52) (1,877) 383 2,152 (10) -
	8,127 1,576
	- (2,572) (617) - - 5,900 - (23) 4,500 149 (577) (580) (699) (456)
	2,607 2,418
	13,145 4,288 (2,921) 36
	10,224 4,324

The above Consolidated 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 2010

At 1 July 2009 Total comprehensive income for the half year Profit/(loss) for the period Other comprehensive income Fair value adjustment on available-for-sale financial ass less deferred tax impact Realised gain on sale of available-for-sale financial ass Less deferred tax impact Total comprehensive income for the half-year Transactions with owners in their capacity as owner Dividends paid At 31 December 2009 Total comprehensive income for the half year Profit/(loss) for the period Other comprehensive income Fair value adjustment on available-for-sale financial assets expensed on impairment less deferred tax impact Fair value adjustment on available-for-sale financial ass less deferred tax impact Total comprehensive income for the half-year Transactions with owners in their capacity as owner Dividends paid At 30 June 2010 Total comprehensive income for the half year Profit/(loss) for the period Other comprehensive income Fair value adjustment on available-for-sale financial ass less deferred tax impact Realised gain on sale of available-for-sale financial ass Less deferred tax impact Total comprehensive income for the half-year Transactions with owners in their capacity as owner Dividends paid Share buyback At 31 December 2010	Issued capital Retained earnings Available-for-sale investment reserve Option reserve Total equity $'000 $'000 $'000 $'000 $'000 31,249 4,209 (17) 8 35,449 3,609 3,609 ets 251 251 (75) (75) ets (146) - (146) 44 44
	- 3,609 74 - 3,683
	s (580) (580)
	31,249 7,238 57 8 38,552
	(2,847) (2,847) (398) (398) 119 119 ets 340 340 (102) (102)
	- (2,847) (41) - (2,888) s (870) (870)
	31,249 3,521 16 8 34,794
	(1,381) (1,381)
	ets 285 285 (85) (85) ets (10) (10) 3 3
	- (1,381) 193 - (1,188)
	s (577) (577) (617) (617)
	30,632 1,563 209 8 32,412

The above Consolidated 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 2010

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

These general purpose financial statements for the half-year reporting period ended 31 December 2010 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

The half year statements have 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.

These half year financial statements do not include all the notes of the type normally included in an annual financial statements 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 statements. Accordingly, these interim financial statements is to be read in conjunction with the annual report for the year ended 30 June 2010 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 these interim financial statements 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 statements do not include full disclosures of the type normally included in the annual financial report.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted in the preparation of these interim financial statements are the same as those applied by PPK Group Limited in its annual financial report as at and for the year ended 30 June 2010.

Associate Companies accounted for using the equity method of accounting

During the half year, PPK Group Limited (PPK) acquired additional shares in one of it's associated companies, Intelligent Solar Limited (ISL) (formally Cool or Cosy Limited). At the beginning of the half year PPK held shares in ISL that represented an ownership interest of 23.34%. Following the acquisitions at the end of the half year PPK held shares in ISL that represented an ownership interest of 26.39%.

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 28th February 2011

PPK GROUP LIMITED	CONSOLIDATED	CONSOLIDATED	ENTITY
NOTES TO AND FORMING PART OF THE ACCOUNTS	31 DECEMBER		31 DECEMBER
FOR THE HALF YEAR ENDED 31 DECEMBER 2010	2010		2009
	$000s		$000s
NOTE 2
REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS
(a) REVENUE
Sale of goods		2,638	2,314
Rental income from investment properties		865	1,587
Interest received		867	281
Dividends received - other parties		17	30
		4,387	4,212
(b) OTHER INCOME
Net gain on disposal of investment property		1,514	2,184
Net gain on sale of available-for-sale financial assets		75	1,044
Fair value adjustment on sale of available-for-sale financial assets		-	40
Fair value adjustment on derivatives		-	514
Proceeds from rental property dispute resolution		1,585	-
Sundry Income		36	242
		3,210	4,024
(c) SHARE OF PROFIT FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY	METHOD
Fair value adjustment to carrying value of available-for-sale financial assets
at the time the entities became associates - before tax.		-	580
Share of after tax profit (loss) from associates accounted for under the equity method		(412)	551
		(412)	1,131
(d) EXPENSES
Amortisation - intangibles		30	49
Depreciation - buildings		184	237
- plant and equipment		256	237
		440	474
Fair value adjustment on derivatives		76	-
Foreign currency translation losses		-	15
Interest paid		699	456
Impairment of carrying value of investment in associates		2,882	-
Impairment of available-for-sale financial assets		93	-
Impairment - trade receivables		6	6
- other receivables		864	462
(e) INDIVIDUALLY SIGNIFICANT ITEMS
Gains or (losses)
Net gain on disposal of investment property		1,514	2,184
Net gain on sale of available-for-sale financial assets		75	1,044
Proceeds from rental property dispute resolution		1,585	-
Fair value adjustment on derivatives		(76)	514
Impairment of carrying value of investment in associates		(2,882)	-
Impairment of other receivables		(864)	(462)
Total of individually significant items		(648)	3,280
NOTE 3
DIVIDENDS
Dividends paid
Final ordinary dividend of 1.00c per share - 100% franked		577	580
(2009 1.00c per share - 100% franked)
		577	580
Dividends declared after half year ended 31 December 2010
Interim ordinary dividend of 1.00c per share - 100% franked		563	870
(2009 1.50c per share - 100% franked)
		563	870

The group has sufficient franking credits to allow up $10,167,000 in dividends to be distributed as fully franked from franking credits that exist at 31 December 2010.

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

n	CONSOLIDATED ENTITY 31 DECEMBER 31 DECEMBER 2010 2009 $000s $000s (2.4) 6.2 (2.4) 6.2
	(1,381) 3,609 (1,381) 3,609
	Number Number 57,894,984 58,006,650 - -
	57,894,984 58,006,650

NOTE 4

EARNINGS PER SHARE

Basic earnings per share (cents per share) Diluted earnings per share

(a) Reconciliation of Earnings to Net Profit Earnings used in calculating Basic EPS Earnings used in calculating Diluted EPS

(b) Weighted average number of ordinary shares outstanding during the period used in calculation of basic EPS 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

(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 ORDINARY SHARES ON ISSUE Movement in number of ordinary shares Number of securities on issue at beginning of period Shares repurchased through approved on market share buy back Movement in share capital Balance at the beginning of the financial period Shares repurchased through approved on market share buy back	Number Number 58,006,650 58,006,650 (1,657,240) -
	56,349,410 58,006,650
	$000s $000s 31,249 31,249 (617) -
	30,632 31,249

During the half-year reporting period the company repurchased shares on market under an approved buy back scheme. There were no options outstanding at balance date

NOTE 6 SEGMENT INFORMATION

Operating segments have been determined on the basis of reports reviewed by the Directors. The Directors are considered to be the chief operating decision makers of the group. The reportable segments are as follows:

• 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. Investments in associate companies are included in this segment.

• The Mining equipment segment manufactures portable underground mining equipment.

Half Year ended 31 December 2010 Business Segments Primary Segment Sales Revenue Rental income Net gain on disposal of rental property Proceeds from rental property dispute resolution Gain on sale of available-for-sale financial assets Sundry Income Interest Received Dividends Received Total revenue and other income Segment result Reconciliation of segment result to group net (loss) before tax Amounts not included in segment result but reviewed by the Board Share of (loss) from associates accounted for using the equity method Unallocated corporate income & expenses Unallocated interest income & expense Consolidated operating (loss) before income tax Income tax (expense) Consolidated operating (loss) from ordinary activities after income tax Half Year ended 31 December 2009 Business Segments Primary Segment Sales Revenue Rental income Net gain on disposal of rental property Gain on sale of available-for-sale financial assets Fair value adjustment on derivatives Fair value adjustment on sale of available-for-sale financial assets Sundry Income Interest Received Dividends Received Total revenue and other income Segment result Reconciliation of segment result to group net profit before tax Amounts not included in segment result but reviewed by the Board Share of profit from associates accounted for using the equity method Unallocated corporate income & expenses Unallocated interest income & expense Consolidated operating profit before income tax Income tax (expense) Consolidated operating profit from ordinary activities after income tax	Mining Investment Investing Equipment Properties Manufacturing Total $000s $000s $000s $000s	Mining Investment Investing Equipment Properties Manufacturing Total $000s $000s $000s $000s
	- - 2,638 865 - - 1,514 - - 1,585 - - - 75 - - - 36 - 765 - - 17	2,638 865 1,514 1,585 75 36 765 17
	3,964 857 2,674	7,495
	3,256 (3,061) 439	634
	(412) (474) (597) (849) (532) (1,381) Mining Investment Investing Equipment Properties Manufacturing Total $000s $000s $000s $000s	(412) (474) (597)
		(849)
		(532)
		(1,381)
	- - 2,314 1,587 - - 2,184 - - - 1,044 - - 514 - - 40 - - 241 1 - 257 - - 30	2,314 1,587 2,184 1,044 514 40 242 257 30
	3,771 2,126 2,315	8,212
	2,658 2,122 75	4,855
		1,131 (611) (432)
		4,943
		(1,334)
		3,609

NOTE 7 EVENTS SUBSEQUENT TO REPORTING DATE

On 18th January 2011 the two operating subsidiaries of Frigrite Limited entered voluntary administration. The value of group's investment in this associated company has been written down by $2,698,000 to $nil at 31 December 2010.

The group also holds $2 million convertible notes in Frigrite Limited that are carried in the accounts at a value of $1,933,000. These notes are secured by a mortgage over real estate and a fixed and floating charge over assets of the Frigrite Group. Information currently available indicates that note holders should be repaid in full.

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 consolidated entity in subsequent periods.

NOTE 8

CONTINGENT LIABILITIES / ASSETS

There has been no change in contingent liabilities since the last annual reporting date NOTE 9

NET TANGIBLE ASSET BACKING

NTA Backing	Current period		period Previous corresponding
Net tangible asset backing per share	56.2 cents		65.1 cents

The above NTA backing per share excludes the effect if Land & Buildings were revalued to their most recent independent valuation of $30.0m and allowing for capital gains tax of $1.3m. An independent valuation was last undertaken in May 2010. This would have the effect of increasing effective NTA backing per share by 6.9 cents to 63.1 cents (2009 by 7.6 cents to 72.7 cents).

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 consolidated statement of financial position as at 31 December 2010, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

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 a 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 consolidated entity’s financial position as at 31 December 2010 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.

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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, which has been given to the directors of PPK Group Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the halfyear 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 2010 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 Audit (NSW-VIC) Pty Ltd

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Iain Kemp Director

Sydney, 28 February 2011

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DECLARATION OF INDEPENDENCE BY IAIN KEMP TO THE DIRECTORS OF PPK GROUP LIMITED

As lead auditor for the review of PPK Group Limited for the half-year ended 31 December 2010, 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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Iain Kemp Director

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BDO Audit (NSW-VIC) Pty Ltd Sydney, 28 February 2011

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