ENECO REFRESH LTD — Annual Report 2011

Aug 30, 2011

==> picture [145 x 49] intentionally omitted <==

Appendix 4E

Preliminary final report Period ending 30 June 2011

Results for announcement to the market

			June 2011	June 2010
Financial Results
Revenue from ordinary activities	Up	12.8%	6,253,495	5,545,486
Comprehensive (Loss) from ordinary activities after tax attributable to members	Down	725.2%	(3,468,504)	(420,323)

Dividends	2011 interim dividend	2010 interim dividend
Amountper OrdinarySecurity	Nil	Nil
Franked amount per Security	Nil	Nil
Record date for determining entitlements to interim dividends	N/A

Net Tangible Asset Backing	June 2011	June 2010
Net tangible asset backing per ordinary security	$0.03	$0.05

Commentary

Our revenue showed a 12.8% increase despite a very tough operating environment. Key operations in all states other than Victoria were profitable. Queensland was badly hit by the flood in December/January period this financial year, which affected their performance. The large impact however was due to the recent acquisition of Fusion H2O and Aridtec.

On acquisition, Fusion operated as an independent division. As a result of losses incurred by the new management at subsidiary level, the Board made a decision to close the division and integrate the business into the various States thereby saving substantial costs and improve management of the operating unit. The detailed analysis can be found in Note 1.

Aridtec failed to deliver on its forecast. With shareholders’ approval, the Company reached mutual consent with its original owners to demerge Aridtec and sell the business back cancelling all shares issued for the acquisition. No cash change hand during the acquisition or demerger, however due to the current price of Refresh shares having declined at the point of the demerger, it was necessary for the Company to reflect the difference as a loss. Details are in Note 6. Accounting for the difference in the cost of demerger resulted in a large impact of about $2 million to the bottom line.

Corporate expenses are higher because of costs relating to the acquisition and subsequent demerger of Aridtec.

REFRESH GROUP LIMITED and its controlled entities

1

PRELIMINARY FINAL REPORT STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

Note Revenue 2a Cost of Sales Gross Profit Other income 2b Marketing Expenses Distribution Expenses Administrative Expenses Occupancy Expenses Other expenses Results from operating activities Finance income 2d Finance costs 2e Loss before income tax Income tax expense (credit) Net loss from continuing operations Loss from discontinued operations Net Loss Attributable to Members of Refresh Group Limited Other comprehensive income Foreign currency translation Total comprehensive income/(loss) attributable to members of Refresh Group Limited Basic earnings/(loss) per share (cents per share)	Note	CONSOLIDATED 2011 $ 2010 $
		6,253,495 5,545,486 (3,011,884) (2,111,397)
		3,241,611 3,434,089 1,995 (29,945) (824,788) (411,323) (1,416,590) (1,235,140) (1,584,669) (1,600,595) (572,506) (560,454) (256,534) (1,904)
		(1,411,481) (405,272) 3,122 13,335 (63,217) (28,386)
		(1,471,576) (420,323) - -
		(1,471,576) (420,323) (1,996,928) -
		(3,468,504) (420,323) - -
		(3,468,504) (420,323)
		(2.30) (0.62)

The accompanying notes form part of the Statement of Comprehensive Income

REFRESH GROUP LIMITED and its controlled entities

2

PRELIMINARY FINAL REPORT STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non-Current Assets Other financial assets Property, plant and equipment Intangible assets Total Non-current assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Financial liabilities Short-term provisions and accruals Total Current Liabilities Non-current Liabilities Financial liabilities Long-term provisions Total Non-current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Notes	CONSOLIDATED 2011 2010 $ $
	3 4 5	130,287 536,891 543,323 650,036 962,873 1,080,880
		1,636,483 2,267,807
		1,050 1,050 2,174,117 2,018,488 908,068 1,164,602
		3,083,235 3,184,140
		4,719,718 5,451,947
		675,770 956,609 379,771 46,706 122,185 102,520
		1,177,726 1,105,835
		65,580 34,606 48,057 49,106
		113,637 83,712
		1,291,363 1,189,547
		3,428,355 4,262,400
		8,406,595 5,843,333 191,712 187,020 (5,169,952) (1,767,953)
		3,428,355 4,262,400

The accompanying notes form part of the Statement of Financial Position

REFRESH GROUP LIMITED and its controlled entities

3

PRELIMINARY FINAL REPORT STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2011

CONSOLIDATED Balance at 1 July 2010 Equity fund raising costs Issue of share capital Cancellation of shares Cost of share-based payments Reclassification of prior year depreciation adjustments Transactions with owners Total comprehensive loss for the period Balance at 30 June 2011 Balance at 1 July 2009 Equity fund raising costs Issue of share capital Cost of share-based payments Transactions with owners Total comprehensive loss for the period Balance at 30 June 2010	Issued Fund Raising Other Accumulated Capital Cost Reserves Losses **Total **
	6,308,101 (464,768) 187,020 (1,767,953) 4,262,400 - (74,787) - - (74,787) 5,794,049 - - - 5,794,049 (3,156,000) (3,156,000) - - 4,692 - 4,692 - - - 66,505 66,505
	8,946,150 (539,555) 191,712 (1,701,448) 6,896,859
	- - - (3,468,504) (3,468,504)
	8,946,150 (539,555) 191,712 (5,169,952) 3,428,355
	5,113,070 (334,077) 141,883 (1,347,630) 3,573,246 - (130,691) - - (130,691) 1,195,031 - - - 1,195,031 - - 45,137 - 45,137
	6,308,101 (464,768) 187,020 (1,347,630) 4,682,723
	- - - (420,323) (420,323)
	6,308,101 (464,768) 187,020 (1,767,953) 4,262,400

The accompanying notes form part of the Statements of Changes in Equity

REFRESH GROUP LIMITED and its controlled entities

4

PRELIMINARY FINAL REPORT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Borrowing costs Interest received Net cash flows (used in) operating activities Cash flows from investing activities Proceeds from sale of property, plant and equipment, and investment Purchase of property, plant and equipment Repayment to director related entity Acquisition of subsidiaries, net of cash acquired Net cash flows provided by /(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Share Issue expenses Repayments of borrowings Net cash flows (used in)/ provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	CONSOLIDATED 2011 2010 $ $
	6,357,087 5,719,934 (7,791,892) (6,006,161) (63,217) (28,386) 3,122 13,335
	(1,494,900) (301,278)
	12,879 7,455 (365,897) (209,923) - (174,549) - (270,000)
	(353,018) (647,017)
	1,102,050 518,250 450,011 75,246 (49,788) (130,691) (60,959) (234,473)
	1,441,314 228,332
	(406,604) (719,963) 536,891 1,256,854
	130,287 536,891

The accompanying notes form part of the Statement of Cash Flows

REFRESH GROUP LIMITED and its controlled entities

5

PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

1. SEGMENT INFORMATION

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

In identifying its operating segment, management follows the geographical location of the Group’s operations. Corporate costs are included under “Other”. Segment information can be analysed as follows for the reporting period under review.

30 June 2011 Revenue from external customers Segment operating profit/(loss) Segment operating profit/(loss) excluding impairment/loss from discontinued operations Total assets Total liabilities 30 June 2010 Revenue from external customers Segment operating profit/(loss) Total assets Total liabilities	WA NSW VIC QLD FUSION 1 (National) OTHER (Corporate) TOTAL
	2,699,438 1,107,960 453,384 1,232,773 759,940 - 6,253,495
	136,439 62,516 (39,010) (149,459) (944,901) (2,534,089) (3,468,504)
	136,439 62,516 (39,010) 8,610 (846,436) (537,161) (1,215,042)
	2,093,170 762,795 432,872 1,415,892 - 14,989 4,719,718
	887,114 4,612 1,327 67,371 - 330,939 1,291,363
	2,571,794 1,102,749 444,917 1,386,305 39,721 - 5,545,486
	85,494 (6,492) (7,319) 40,142 (24,435) (507,713) (420,323)
	2,475,077 799,046 403,371 1,233,210 123,363 417,880 5,451,947
	451,937 27,159 1,534 72,270 - 636,647 1,189,547

1 Fusion division was closed down with effect from 1 February 2011 and all Fusion sales are now handled by Refresh branches in each State.

REFRESH GROUP LIMITED and its controlled entities

6

PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

2. REVENUE AND EXPENSES

Revenue Sale of bottled water and accessories Other income Gain/(loss) on disposal of property, plant and equipment Employee benefits expense Wages and Salaries Workers’ compensation costs Superannuation costs Provisions for Annual and Long Service Leave Expense of share-based payments Other employee benefits expense Finance income Interest received Finance Costs Bank loans and other borrowings Finance charges payable under finance leases and hire purchase contracts	CONSOLIDATED 2011 2010 $ $
	6,253,495 5,545,486
	6,253,495 5,545,486
	1,995 (29,945)
	1,995 (29,945)
	2,117,328 2,153,823 53,231 61,514 192,528 190,727 14,205 30,715 4,692 49,137 151,306 88,060
	2,533,290 2,573,976
	3,122 13,335
	3,122 13,335
	51,372 18,550 11,845 9,836
	63,217 28,386

a. Revenue

b. Other income

c. Employee benefits expense

d. Finance income

e. Finance Costs

3. TRADE AND OTHER RECEIVABLES

	CONSOLIDATED	CONSOLIDATED
	2011	2010
Current	$	$
Trade receivables	475,945	466,596
Provision for impairment of receivables	(21,054)	(21,054)
	454,891	445,542
Other receivables	69,994	88,195
Prepayments	18,438	116,299
	543,323	650,036

REFRESH GROUP LIMITED and its controlled entities

7

RELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

Consolidated 2011 Trade receivables Other receivables 2010 Trade receivables Other receivables	Gross Amount Past due and impaired Past due but not impaired (days overdue) Within initial trade terms 31-60 61-90 >90
	475,945 21,054 126,827 40,248 48,476 239,340 69,994 177 41,949 27,868
	545,939 21,054 127,004 40,248 90,425 267,208
	466,596 21,054 109,605 47,173 1,824 286,940 88,195 - 1,158 - 63,727 23,310
	554,791 21,054 110,763 47,173 65,551 310,250

4. INVENTORIES

Raw materials (at cost) Finished goods (at cost) Total inventories at lower of cost or net realisable value Provision for slow moving inventories	CONSOLIDATED 2011 2010 $ $
	409,238 443,747 623,670 637,133
	1,032,908 1,080,880 (70,035) -
	962,873 1,080,880

5. TRADE AND OTHER PAYABLES

Current Trade payables Subscriptions in Advance Other payables	CONSOLIDATED 2011 2010 $ $
	268,211 286,311 - 500,000 407,559 170,298
	675,770 956,609

Trade payables are non-interest bearing and are normally settled on 60-day terms. Other payables include related party loans.

REFRESH GROUP LIMITED and its controlled entities

8

PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

6. ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS

On 29[th] June 2011, AridTec Pte Ltd, was disposed of. The consideration for the sale of AridTec shares was the cancellation by way of selective capital reduction of 71,800,000 Refresh shares. Operating losses of AridTec until the date of disposal and the loss from remeasurement and disposal of assets and liabilities classified as held for sale is summarised as follows:

Revenue Cost of Sales Gross Profit Other income Marketing Expenses Distribution Expenses Production, Research and Development Expenses Administrative Expenses Occupancy Expenses Other expenses Results from operating activities Finance income Finance costs Loss before income tax Income tax expense (credit) Loss for the period Loss on remeasurement and disposal Change in fair value of assets Intercompany loan written off Loss on disposal Total loss on disposal Loss for the year from discontinued operations	2011 $ 385,153 (194,625)
	190,528 53,498 (119,881) (33,920) (200,752) (115,265) (73,213) 809
	(298,196) 73 (418)
	(298,541) -
	(298,541)
	(1,100,000) ( 485,928) (112,459)
	(1,698,387)
	(1,996,928)

REFRESH GROUP LIMITED and its controlled entities

9

PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

7. EVENTS AFTER THE BALANCE SHEET DATE

No other significant matter or circumstance has arisen since the end of the financial year up to the date of reporting.

8. CONTINGENT ASSETS & LIABILITIES

There are no contingent liabilities or contingent assets as at 30 June 2011 and in the interval between 30 June 2011 and the date of this report.

9. BASIS FOR PREPARATION

This preliminary final report has been prepared in accordance with ASX listing rule 4.3A and the disclosure requirements of ASX Appendix 4E. The accounting policies adopted in the preparation of the preliminary final report are consistent with those adopted in the preparation of the annual financial report.

10. UNAUDITED APPENDIX 4E

This report has not been audited. The results of the Group are subject to change post the review and audit of the current year.

REFRESH GROUP LIMITED and its controlled entities

10