ENECO REFRESH LTD — Annual Report 2012

Aug 28, 2012

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Appendix 4E

Preliminary final report Period ending 30 June 2012

Results for announcement to the market

			June 2012	June 2011
Financial Results
Revenue from ordinary activities	Down	3.4%	6,042,772	6,253,495
Comprehensive (Loss) from ordinary activities after tax attributable to members	Down	97.8%	(75,286)	(3,653,249)

Dividends	2012 interim dividend	2011 interim dividend
Amountper OrdinarySecurity	Nil	Nil
Franked amountper Security	Nil	Nil
Record date for determining entitlements to interim dividends	N/A

Net Tangible Asset Backing	June 2012	June 2011
Net tangible asset backing per ordinary security	$0.03	$0.03

Commentary

For the first time, all 4 operating divisions of the Company are profitable. This is a drastic improvement from previous years.

Revenue declined because the previous management of Fusion H2O was supplying to Metcash at a substantial loss. We have since discontinued the business. Removing that from comparison, revenue actually grew by 10%. This is in spite of a very cool summer in the eastern states in 2012.

The demerger of Aridtec Pte Ltd has also enabled the company to more accurately reflect the true performance of its business. The restructuring had yield positive results, Results from Operating Activities turned positive compared to last year and net cash flow improved from ($1,494,900) to $133,355. This shows the strength of its underlying core business. The net loss of ($75k) this year is because of interest expense of $92k relating to the borrowings for working capital of the Company.

Refresh’s market spans across both the manufacturing and retail sectors, which are the worst affected in Australia’s 2-speed economy. The Company intends to further strengthen its management team and with appropriate marketing and business strategy, it will grow its market as the opportunity presents and expand its marketing reach. As such, the management believes Refresh will continue to grow and improve its revenue and operating profit. With the new funding as announced on 12 July 12, the Company will be able to better manage its cash flow, working capital and the debt/equity structure.

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

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 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 2012 $ 2011 $
		6,042,772 6,253,495 (2,273,017) (3,011,884)
		3,769,755 3,241,611 (23,443) 1,995 (510,515) (824,788) (1,222,854) (1,416,590) (1,423,087)) (1,584,669) (572,998) (572,506) - (441,279)
		16,858 (1,596,226) 186 3,122 (92,330) (63,217)
		(75,286) (1,656,321) - -
		(75,286) (1,656,321) - (1,996,928)
		(75,286) (3,653,249) - -
		(75,286) (3,653,249)
		(0.087) (2.39)

The accompanying notes form part of the Statement of Comprehensive Income

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

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 2012 2011 $ $
	3 4 5	152,542 130,287 633,221 543,323 868,013 962,873
		1,653,776 1,636,483
		- 1,050 1,933,733 2,141,025 756,415 756,415
		2,690,188 2,898,490
		4,343,964 4,534,973
		538,528 675,770 409,030 379,771 120,277 122,185
		1,067,835 1,177,726
		46,550 65,580 49,468 48,057
		96,018 113,637
		1,163,853 1,291,363
		3,180,111 3,243,610
		8,406,595 8,406,595 191,712 191,712 (5,418,196) (5,354,697)
		3,180,111 3,243,610

The accompanying notes form part of the Statement of Financial Position

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2012

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 CONSOLIDATED Balance at 1 July 2011 Prior year adjustment Total comprehensive loss for the period Balance at 30 June 2012	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 - - - (3,653,249) (3,653,249)
	8,946,150 (539,555) 191,712 (5,354,697) 3,243,610
	8,946,150 (539,555) 191,712 (5,354,697) 3,243,610 11,787 11,787 - - - (75,286) (75,286)
	8,946,150 (539,555) 191,712 (5,418,196) 3,180,111

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

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Borrowing costs Interest received Net cash flows provided by/(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 Net cash flows provided by /(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Loans from related parties Share Issue expenses Repayments of borrowings Net cash flows 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 2012 2011 $ $
	6,061,000 6,357,087 (5,853,772) (7,791,892) (74,059) (63,217) 186 3,122
	133,355 (1,494,900)
	10,877 12,879 (132,206) (365,897)
	(121,329) (353,018)
	- 1,102,050 62,000 450,011 - (49,788) (51,771) (60,959)
	10,229 1,441,314
	22,255 (406,604) 130,287 536,891
	152,542 130,287

The accompanying notes form part of the Statement of Cash Flows

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

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 2012 Revenue from external customers Segment operating profit/(loss) Total assets Total liabilities 30 June 2011 Revenue from external customers Segment operating profit/(loss) Impairment loss Loss from discontinued operations Segment operating profit/(loss) excluding impairment/loss from discontinued operations Total assets Total liabilities	30 June 2012 Revenue from external customers Segment operating profit/(loss) Total assets Total liabilities 30 June 2011 Revenue from external customers Segment operating profit/(loss) Impairment loss Loss from discontinued operations Segment operating profit/(loss) excluding impairment/loss from discontinued operations Total assets Total liabilities	WA NSW VIC QLD FUSION1 (National) OTHER (Corporate) TOTAL
		2,959,337 1,180,124 542,624 1,360,687 - - 6,042,772 268,720 23,912 15,845 82,850 - (466,613) (75,286) 1,717,825 929,829 385,431 1,284,496 - 26,383 4,343,964 700,460 4,849 1,319 77,687 - 379,538 1,163,853 , 2,699,438 1,107,960 453,384 1,232,773 759,940 - 6,253,495 136,439 62,516 (147,101) (226,113) (944,901) (2,534,089) (3,653,249) - - (108,091) (234,723) (98,465) - (441,279) - - - - - (1,996,928) (1,996,928) 136,439 62,516 (39,010) 8,610 (846,436) (537,161) (1,215,042) 2,093,170 762,795 324,781 1,339,238 - 14,989 4,534,973 887,114 4,612 1,327 67,371 - 330,939 1,291,363

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

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

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 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 2012 2011 $ $
	6,042,772 6,253,495
	6,042,772 6,253,495
	(23,443) 1,995
	(23,443) 1,995
	45,528 53,231 198,559 201,328 12,081 14,205 - 4,692 57,764 161,261
	2,303,396 2,535,782
	186 3,122
	186 3,122
	84,414 51,372 7,916 11,845
	92,330 63,217

a. Revenue

b. Other income

c. Employee benefits expense

d. Finance income

e. Finance Costs

3. TRADE AND OTHER RECEIVABLES

	CONSOLIDATED	CONSOLIDATED
	2012	2011
Current	$	$
Trade receivables	533,528	475,945
Provision for impairment of receivables	(18,000)	(21,054)
	515,528	454,891
Other receivables	58,329	69,994
Prepayments	59,364	18,438
	633,221	543,323

REFRESH GROUP LIMITED and its controlled entities

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RELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

Consolidated 2012 Trade receivables Other receivables 2011 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
	533,528 18,000 195,025 35,181 5,068 280,254 58,329 1,066 44,027 13,236
	591,857 18,000 196,091 35,181 49,095 293,490
	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

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 2012 2011 $ $
	425,819 409,238 512,228 623,670
	938047 1,032,908 (70,034) (70,035)
	868,013 962,873

5. TRADE AND OTHER PAYABLES

Current Trade payables Other payables	CONSOLIDATED 2012 2011 $ $
	232,133 268,211 306,395 407,559
	538,528 675,770

Trade payables are non-interest bearing and are normally settled on 60-day terms.

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

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

This relates to prior year activities.

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 profit or loss from re-measurement 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 re-measurement 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

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

7. EVENTS AFTER THE BALANCE SHEET DATE

The company successfully placed out 10 million shares at 3 cents each on 11 July 2012.

8. CONTINGENT ASSETS & LIABILITIES

There are no contingent liabilities or contingent assets as at 30 June 2012 and in the interval between 30 June 2012 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

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