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PPK GROUP LIMITED Interim / Quarterly Report 2012
65603_rns_2012-02-23_89fcb608-7e05-4145-ab97-eda271daf1fa.pdf
Interim / Quarterly Report
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ABN 65 003 964 181
Appendix 4D Half-year report & half-year accounts Period ended 31 December 2011
Previous Corresponding Period 31 December 2010
Contents
- 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.
HIGHLIGHTS OF RESULTS FOR ANNOUNCEMENT TO THE MARKET (figures are in A$000s)
| 31 December2011$000s | 31 December2010$000s | Change$000s | Change% | |
|---|---|---|---|---|
| SALES REVENUE | 4,079 | 2,638 | 1,441 | 55% |
| RENTAL INCOME | 1,031 | 865 | 166 | 19% |
| REALISED GAINS FROM INVESTING | 35 | 75 | (40) | $-53%$ |
| REALISED GAIN ON SALE OF INVESTMENT PROPERTY | $\overline{\phantom{a}}$ | 1,514 | (1, 514) | $-100%$ |
| PROFIT/(LOSS) BEFORE INCOME TAX | 1,247 | (849) | 2,096 | LosstoProfit |
| PROFIT/(LOSS) AFTER TAX ATTRIBUTABLE TO MEMBERS | 957 | (1, 381) | 2,338 | LosstoProfit |
| EARNINGS PER SHARE | cents1.8 | cents(2.4) | cents4.2 | NegativetoPositive |
DIVIDENDS
| 2012 INTERIM DIVIDEND PER SHARE | $1.00$ cent |
|---|---|
| (The extent to which the dividend will be franked remains an issue to be determinedbased on the final determination of the Australian Taxation Office position which iscurrently the subject of Draft Taxation Ruling TR 2011/D8) | |
| 2011 FULLY FRANKED INTERIM DIVIDEND PER SHARE | $1.00$ cent |
| RECORD DATE FOR DETERMINING ENTITLEMENT TO DIVIDEND | 31 May 2012 |
| DATE DIVIDEND PAYABLE | 8 June 2012 |
COMMENTARY ON RESULTS
PPK Group Limited (PPK) is pleased to report a $957,000 profit after tax for the 2012 first half. This compares to a $1.381,000 loss after tax in the corresponding prior period, an improvement of $2,338,000.
Property
Rental income increased by 19% reflecting continuing short term leasing of the Arndell Park property which was unoccupied in the previous corresponding period. All other company owned properties have leases in place.
Rambor
Rambor had a solid sales and earnings performance during the reporting period. Both sales and earnings were well in excess of those in the 2011 first half. Rambor continues to work with Hilti Corporation and has now made the first delivery of Hilti branded roof bolters to Eastern European Hilti customers.
PPK Willoughby Pty Ltd
As previously reported. PPK has a substantial investment in a syndicate undertaking a subdivision and construction project at Willoughby, Sydney. Construction of the first 14 homes in Stage 1 has commenced and is anticipated to be complete by June/July 2012. 13 of the 14 homes in Stage 1 have been sold with one home specifically retained for marketing purposes. Marketing of the remaining homes of the 14 homes in Stage 2 will commence in late February 2012 with construction expected to commence in late April 2012. 6 of the homes in Stage 2 have already sold through an informal marketing process.
PPK Southport Pty Ltd
PPK has taken the lead role and a 25% interest in a syndicate which has acquired a commercial site in Southport, Queensland. Final design preparation is in progress as are negotiations with a major supermarket chain for a 4,500 sqm supermarket and a fresh food market on the site.
Dividend
PPK maintains a strong cash position with in excess of $8 million cash on deposit after spending $1.495 million on the share buyback during the period 1 January to 31 December 2011. Accordingly, the directors have resolved to pay an interim dividend of 1 cent per share payable on 8 June 2012 with a record date of 31 May 2012. The extent to which the dividend will be franked remains an issue to be determined based on the final determination of the Australian Taxation Office position which is currently the subject of Draft Taxation Ruling TR2011/D8.
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PPK GROUP LIMITED
ABN 65 003 964 181
Interim Financial Report
For half-year ended 31December 2011
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, 2011.
DIRECTORS
The names of directors in office at any time during or since the financial period are:
Jury Ivan Wowk Glenn Robert Mollov Raymond Michael Beath Graeme Webb
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 an interim dividend of 1.0 cent per share. The extent to which the dividend will be franked remains an issue to be determined based on the final determination of the Australian Taxation Office position which is currently the subject of Draft Taxation Ruling TR 20111/D8.
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.
JURY IVAN WOWK Director
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 2011 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:
JURY IVAN WOWK Director
Dated this 21st day of February 2012
Consolidated Statement of Comprehensive Incomefor the Half-Year Ended 31 December 2011
| CONSOLIDATED ENTITY | |||
|---|---|---|---|
| 31 December | 31 December | ||
| Note | 2011 | 2010 | |
| $000s | $000s | ||
| REVENUES | |||
| Mining equipment manufacture | 4,079 | 2,638 | |
| Investment Properties | 1,031 | 865 | |
| Investment Activities | 50 | 17 | |
| Interest receivable | 681 | 867 | |
| Total Revenue | 2a | 5,841 | 4,387 |
| OTHER INCOME | 2 b | 451 | 3,210 |
| EXPENDITURE | |||
| Mining equipment manufacture | (3, 106) | (2, 235) | |
| Investment Properties | (313) | (551) | |
| Investment Activities | (49) | (3,918) | |
| Administrative expenses | (866) | (631) | |
| Finance costs | (711) | (699) | |
| Total Expenditure | 2d | (5,045) | (8,034) |
| Share of profit (loss) of associates accounted for using the equity method | 2 c | (412) | |
| Profit (loss) before income tax expense | 1,247 | (849) | |
| Income tax (expense)/credit attributable to profit | (290) | (532) | |
| Profit (loss) after income tax from continuing operations | 957 | (1, 381) | |
| OTHER COMPREHENSIVE INCOME | (181) | 285 | |
| Changes in fair value on available-for-sale financial assets | |||
| Provision for income tax on changes in fair value | 54 | (85) | |
| Realised gain on sale of available-for-sale financial assets | |||
| transferred to profit or loss from the asset revaluation reserve | (10) | ||
| Provision for income tax thereon | 3 | ||
| Other comprehensive (loss) income net of income tax | (127) | 193 | |
| Total Comprehensive Income (loss) for the half year | 830 | (1, 188) | |
| Earnings per share from continuing operations | 4 | Cents | Cents |
| Total basic earnings per shares | 1.8 | (2.4) | |
| Diluted earnings per share | 1.8 | (2.4) |
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Consolidated Statement of Financial Position for the Half-Year Ended 31 December 2011
| CONSOLIDATED ENTITY | ||
|---|---|---|
| 31 December | 30 June | |
| 2011 | 2011 | |
| $000s | $000s | |
| CURRENT ASSETS | ||
| Cash and cash equivalents | 9,835 | 9,681 |
| Trade & other receivables | 2,997 | 4,367 |
| Inventories | 1,806 | 1,813 |
| Other current assets | 218 | 395 |
| TOTAL CURRENT ASSETS | 14,856 | 16,256 |
| NON-CURRENT ASSETS | ||
| Trade & other receivables | 6,094 | 5,166 |
| Investments in associated companies - equity accounted | ||
| Financial assets | 1,240 | 745 |
| Investment Properties | 24,330 | 24,486 |
| Other Property, plant and equipment | 1,316 | 1,412 |
| Deferred tax assets | 1,673 | 1,646 |
| Intangible assets | 726 | 742 |
| TOTAL NON-CURRENT ASSETS | 35,379 | 34,197 |
| TOTAL ASSETS | 50,235 | 50,453 |
| CURRENT LIABILITIES | ||
| Trade & other payables | 485 | 625 |
| Interest Bearing Liabilities | 1,888 | 1,074 |
| Current tax liabilities | 327 | 122 |
| Provisions | 265 | 247 |
| TOTAL CURRENT LIABILITIES | 2,965 | 2,068 |
| NON-CURRENT LIABILITIES | ||
| Interest Bearing Liabilities | 18,000 | 18,500 |
| Deferred tax liabilities | 35 | |
| Provisions | 84 | 68 |
| TOTAL NON-CURRENT LIABILITIES | 18,084 | 18,603 |
| TOTAL LIABILITIES | 21,049 | 20,671 |
| NET ASSETS | 29,186 | 29,782 |
| SHAREHOLDERS' EQUITY | ||
| Contributed equity | 29,137 | 29,782 |
| Reserves | (5) | 122 |
| Retained earnings | 54 | (122) |
| TOTAL SHAREHOLDERS' EQUITY | 29,186 | 29,782 |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
PPK GROUP LIMITEDConsolidated Statement of Cash Flowsfor the Half-Year Ended 31 December 2011
| CONSOLIDATED ENTITY | ||
|---|---|---|
| 31 December | 31 December | |
| 2011$000s | 2010$000s | |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Cash receipts from customers | 5,696 | 5,217 |
| Cash payments to suppliers and employees | (4, 176) | (3, 133) |
| Interest received | 217 | 896 |
| Dividends received | 50 | 17 |
| Income tax paid | (93) | (586) |
| Interest and costs of borrowings | (711) | (699) |
| 983 | 1,712 | |
| Net cash provided by operating activities | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Proceeds from sale of investment property | 8,085 | |
| Purchase of property, plant and equipment | (167) | (221) |
| Payments for purchase of available-for-sale financial assets | (2,061) | (88) |
| Payments for investments in associate companies | 30 | |
| Payments for convertible notes | (52) | |
| Redemption of convertible notes | 1,963 | R |
| Proceeds from sale of available-for-sale financial assets | 1,385 | 383 |
| Purchase of intangible assets | (10) | |
| Net cash provided by (used in) investing activities | 1,120 | 8,127 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Loans advanced | (837) | |
| Shares repurchased | (645) | (617) |
| Loans repaid | 4,500 | |
| Dividends paid | (781) | (577) |
| Net cash provided by (used in) financing activities | (2, 263) | 3,306 |
| Net increase (decrease) in cash held | (160) | 13,145 |
| Cash at the beginning of the financial period | 8,607 | (2,921) |
| Cash at the end of the financial period | 8,447 | 10,224 |
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
Consolidated Statement of Changes in Equityfor the Half-Year Ended 31 December 2011
| Retained | Other | |||
|---|---|---|---|---|
| Issued capital$'000s | earnings$'000s | reserves$'000s | Total equity$'000s | |
| At 1 July 2010 | 31,249 | 3,521 | 24 | 34,794 |
| Total comprehensive income for the half year | ||||
| Profit/(loss) for the period | (1, 381) | (1, 381) | ||
| Other comprehensive income | ||||
| Fair value adjustment on available-for-sale financial assets | 285 | 285 | ||
| less deferred tax impact | (85) | (85) | ||
| Realised gain on sale of available-for-sale financial assets | (10) | (10) | ||
| Less deferred tax impact | 3 | 3 | ||
| Total comprehensive income for the half-year | (1, 381) | 193 | (1, 188) | |
| Transactions with owners in their capacity as owners | ||||
| Dividends paid | (577) | (577) | ||
| Share buyback | (617) | (617) | ||
| At 31 December 2010 | 30,632 | 1,563 | 217 | 32,412 |
| Total comprehensive income for the half year | ||||
| Profit/(loss) for the period | (1, 134) | (1, 134) | ||
| Other comprehensive income | ||||
| Fair value adjustment on available-for-sale | ||||
| financial assets expensed on impairment | (298) | (298) | ||
| less deferred tax impact | 89 | 89 | ||
| Fair value adjustment on available-for-sale financial assets | 163 | 163 | ||
| less deferred tax impact | (49) | (49) | ||
| Total comprehensive income for the half-year | ٠ | (1, 134) | (95) | (1, 229) |
| Transactions with owners in their capacity as owners | ||||
| Dividends paid | (551) | (551) | ||
| Share buyback | (850) | (850) | ||
| At 30 June 2011 | 29,782 | (122) | 122 | 29,782 |
| Total comprehensive income for the half year | ||||
| Profit/(loss) for the period | 957 | 957 | ||
| Other comprehensive income | ||||
| Fair value adjustment on available-for-sale financial assets | (181) | (181) | ||
| less deferred tax impact | 54 | 54 | ||
| Total comprehensive income for the half-year | 957 | (127) | 830 | |
| Transactions with owners in their capacity as owners | ||||
| Dividends paid | (781) | (781) | ||
| Share buyback | (645) | (645) | ||
| At 31 December 2011 | 29,137 | 54 | (5) | 29,186 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
Notes to and Forming Part of the Accounts For the Half year Ended 31 December 2011
Basis of Preparation of Half-Year Financial Statements Note 1
These general purpose financial statements for the half-year reporting period ended 31 December 2011 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001.
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 2011 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 2011.
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 21st February 2012
| 31 December | 31 December | ||
|---|---|---|---|
| 2011 | 2010 | ||
| $000s | $000s | ||
| Note 2. | Revenue, Other Income & Expenses from Operations | ||
| (a) REVENUE | |||
| Sale of goods | 4,079 | 2,638 | |
| Rental income from investment properties | 1.031 | 865 | |
| Interest receivable | 681 | 867 | |
| Dividends received - other parties | 50 | 17 | |
| 5,841 | 4,387 | ||
| (b) OTHER INCOME | |||
| Net gain on disposal of investment property | 1,514 | ||
| Net gain on sale of available-for-sale financial assets | 35 | 75 | |
| Foreign currency translation gains | 1 | ||
| Proceeds from rental property dispute resolution | 1,585 | ||
| Reversal of doubtful debts provision - other receivables | 64 | ||
| Reversal of impairment other receivables - convertible notes | 150 | ||
| Sundry Income | 201 | 36 | |
| 451 | 3,210 |
(c) SHARE OF PROFIT FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
Share of after tax profit (loss) from associates accounted for under the equity method
$(412)$
Notes to and Forming Part of the Accounts For the Half year Ended 31 December 2011
| 31 December | 31 December | ||
|---|---|---|---|
| 2011 | 2010 | ||
| $000s | $000s | ||
| Note 2. (cont.) | Revenue, Other Income & Expenses from Operations | ||
| (d) EXPENSES | |||
| Amortisation - intangibles | 16 | 30 | |
| Cost of sales - mining equipment manufacture | 2,351 | 1,570 | |
| Depreciation - investment properties | 156 | 184 | |
| - plant and equipment | 263 | 256 | |
| 419 | 440 | ||
| Fair value adjustment on derivatives | ÷, | 76 | |
| Interest paid | 711 | 699 | |
| Impairment of carrying value of investment in associates | $\overline{\phantom{a}}$ | 2,882 | |
| Impairment of available-for-sale financial assets | 35 | 93 | |
| Doubtful debts - trade receivables | 6 | 6 | |
| Impairment of other receivables - convertible notes | $\blacksquare$ | 864 | |
| Defined contribution superannuation expense | 124 | 103 | |
| Employment benefit expense | 1.225 | 927 | |
| Rental expense on operating lease | 120 | 67 | |
| Note 3. | Dividends | ||
| Dividends paid | |||
| Final ordinary dividend of 1.50c per share - 100% franked | 781 | 577 | |
| (2010 1.00c per share - 100% franked) | |||
| Dividends declared after half year ended 31 December 2011 | |||
| Interim ordinary dividend of 1.00c per share | 519 | 563 | |
| (2010 1.00c per share - 100% franked) | |||
The extent to which the dividend will be franked remains an issue to be determined based on the final determination of the Australian Taxation Office position which is currently subject to Draft Taxation Ruling TR 2011/D8.
The group has sufficient franking credits to allow up to $8,584,000 in dividends to be distributed as fully franked from franking credits that exist at 31 December 2011.
| Note 4.Earnings Per Share | ||
|---|---|---|
| Cents | Cents | |
| Basic earnings per share (cents per share) | 1.8 | (2.4) |
| Diluted earnings per share | 1.8 | (2.4) |
| $000s | $000s | |
| (a) Reconciliation of Earnings to Net Profit | ||
| Earnings used in calculating Basic EPS | 957 | (1, 381) |
| Earnings used in calculating Diluted EPS | 957 | (1, 381) |
| Number | Number | |
| (b) Weighted average number of ordinary shares outstanding during the period | ||
| used in calculation of basic EPS | 53,344,187 | 57,894,984 |
(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.
Notes to and Forming Part of the Accounts For the Half year Ended 31 December 2011
| 31 December2011 | 31 December2010 | ||
|---|---|---|---|
| Number | Number | ||
| Note 5. | Ordinary Shares on Issue | ||
| Movement in number of ordinary shares | |||
| Number of securities on issue at beginning of period | 53,812,779 | 58,006,650 | |
| Shares repurchased through approved on market share buy back | (1,864,171) | (1,657,240) | |
| 51,948,608 | 56,349,410 | ||
| $000s | $000s | ||
| Movement in share capital | |||
| Balance at the beginning of the financial period | 29,782 | 31,249 | |
| Shares repurchased through approved on market share buy back | (645) | (617) | |
| 29,137 | 30,632 |
During the half-year reporting period the company repurchased shares on market under an approved buy back scheme.
Options
There were no options outstanding at balance date
Events Subsequent To Reporting Date Note 6.
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 7. Contingent Liabilities / Assets
There has been no change in contingent liabilities since the last annual reporting date
| Note 8. | Net Tangible Asset Backing | ||
|---|---|---|---|
| Cents | Cents | ||
| Net tangible asset backing per share | 54.8 | 56.2 |
The above NTA backing per share excludes the effect if Land & Buildings were revalued to their most recent independent valuation of $29.7m and allowing for capital gains tax of $1.1m. An independent valuation was last undertaken in May 2010.
This would have the effect of increasing effective NTA backing per share by 8.5 cents to 63.3 cents (2010 by 6.9 cents to 63.1 cents).
Notes to and Forming Part of the Accounts For the Half year Ended 31 December 2011
Note 9. Segment Information
- 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 or sold when considered appropriate.
- The Investment segment owns primarily listed and some unlisted investments, it has also made loans from which earns interests. Investments in associate companies are included in this segment.
- The Mining equipment segment manufactures portable underground mining equipment.
| Half Year ended 31 December 2011 | Mining | |||
|---|---|---|---|---|
| Investment | Investing | Equipment | ||
| Business Segments | Properties | Manufacturing | Total | |
| $000s | $000s | $000s | $000s | |
| Primary Segment | ||||
| Sales Revenue | $\overline{\phantom{a}}$ | 4,079 | 4,079 | |
| Rental income | 1.031 | 1,031 | ||
| Gain on sale of available-for-sale financial assets | 35 | 35 | ||
| Sundry Income | 9 | 9 | ||
| Reversal of provisions | 214 | 214 | ||
| Interest Received | 678 | 678 | ||
| Dividends Received | 50 | 50 | ||
| Total revenue and other income | 1,031 | 977 | 4,088 | 6,096 |
| Segment result | 910 | 928 | 983 | 2,821 |
| Reconciliation of segment result to group net (loss) before tax | ||||
| Amounts not included in segment result but reviewed by the Board | ||||
| Unallocated corporate income & expenses | (866) | |||
| Unallocated interest income & expense | (708) | |||
| Consolidated operating (loss) | ||||
| before income tax | 1,247 | |||
| Income tax (expense) | (290) | |||
| Consolidated operating (loss) from ordinary | 957 | |||
| activities after income tax | ||||
| Half Year ended 31 December 2010 | Mining | |||
| Investment | Investing | Equipment | ||
| Business Segments | Properties | Manufacturing | Total | |
| $000s | $000s | $000s | $000s | |
| Primary Segment | ||||
| Sales Revenue | 2.638 | 2,638 | ||
| Rental income | 865 | 865 | ||
| Net gain on disposal of rental property | 1,514 | 1,514 | ||
| Proceeds from rental property dispute resolution | 1,585 | 1,585 | ||
| Gain on sale of available-for-sale financial assets | 75 | 75 | ||
| Sundry Income | 36 | 36 | ||
| Interest Received | 765 | 765 | ||
| Dividends Received | 17 | 17 | ||
| Total revenue and other income | 3.964 | 857 | 2,674 | 7,495 |
| Segment result | 3,413 | (3,061) | 439 | 791 |
| 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 | (412) | |||
| Unallocated corporate income & expenses | (631) | |||
| Unallocated interest income & expense | (597) | |||
$(849)$
$(532)$
$(1, 381)$
Consolidated operating profit
before income tax
Income tax (expense)
Consolidated operating profit from ordinary activities after income tax
Tel: +61 2 9286 5555 Fax: +61 2 9286 5599 www.bdo.com.au
Level 19, 2 Market St. Sydney NSW 2000 GPO Box 2551 Sydney NSW 2001 Australia
INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF PPK GROUP LIMITED
We have reviewed the accompanying half-year financial report of PPK Group Limited, which comprises the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the halfyear ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors' declaration of the consolidated 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 internal 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 half-year 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 2011 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, 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.
BDO Audit (NSW-VIC) Pty Ltd ABN 17 114 673 540 BDO is the brand name for the BDO International network and for each of the BDO Member Firms. BDO in Australia is a national association of separate entities. Liability of each entity is limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.
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:
- giving a true and fair view of the consolidated entity's financial position as at 31 December $(a)$ 2011 and of its performance for the half-year ended on that date; and
- complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations $(b)$ Regulations 2001.
BDO Audit (NSW-VIC) Pty Ltd
an
lain Kemp Director Sydney, 21 February 2012
Tel: +61 2 9286 5555 Fax: +61 2 9286 5599 www.bdo.com.au
Level 19, 2 Market St Sydney NSW 2000 GPO Box 2551 Sydney NSW 2001 Australia
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 2011, 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 $\bullet$ review; and
- any applicable code of professional conduct in relation to the review. $\bullet$
This declaration is in respect of PPK Group Limited and the entities it controlled during the period.
lain Kemp Director
BDO Audit (NSW-VIC) Pty Ltd Sydney, 21 February 2012
BDO Audit (NSW-VIC) Pty Ltd ABN 17 114 673 540 BDD is the brand name for the BDD International network and for each of the BDD Member Firms. BDD in Australia isa national association of separate entities. Liability of each entity is limited by a scheme approved under Standards Legislation other than for the acts or omissions of financial services licensees.