ENECO REFRESH LTD — Interim / Quarterly Report 2010

Feb 24, 2010

Appendix 4D Half-Year Financial Report

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Results for announcement to the market

1. Results for the half year to 31 December 2009 and the corresponding period to 31 December 2008

Company Result Revenue from ordinary activities down 7% to Losses for the period attributable to members down 21% to	A$’000 2,780 (252)

For the Period ending Net tangible asset per share Net asset per share	31 Dec 09 $0.05 $0.06	31 Dec 08
		$0.06 $0.08

Dividends

No interim dividend is payable

2. Brief Explanation of the Result

Compared to the previous period, losses have reduced because our operations have turned in a profit. Corporate expenses have increased partly because of non-recurring expenditure from the proposed acquisition of AridTec but the operating profit has reduced total losses.

For more details, please refer to Page 3 of the Directors’ Report.

3. Details of entities over which control has been gained or lost during the period

We acquired Minnamurra Natural Springwater on 1 September 2009. Details are in Note 9 Business Combination of the Financial Report.

Appendix 4D Half-Year Financial Report

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4. Details of individual and total dividends or distributions and dividend or distribution payments

Nil

5. Details of any dividend or distribution reinvestment plans in operation and the last date for the receipt of an election notice for participation in any dividend or distribution reinvestment plan

Nil

6. Details of associates and joint venture entities including the name of the associate or joint venture entity and details of the reporting entity’s percentage holding in each of these entities and – where material to an understanding of the report - aggregate share of profits (losses) of these entities, details of contributions to net profit for each of these entities, and with comparative figures for each of these disclosures for the previous corresponding period.

Nil

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Refresh Group Limited

and its controlled entities

ABN 28 079 681 244

Half Year Financial Report

31 December 2009

REFRESH GROUP LIMITED – HALF YEAR REPORT

Table of Contents
DIRECTORS’ REPORT ............................................................................................................... 3
AUDITORS' INDEPENDENCE DECLARATION…………………………………………….……… 4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................... 5
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION…………………………………………………………… ................................................ 6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................. 7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ........................................... 8
1. CORPORATE INFORMATION ....................................................................................... 9
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ............................................. 9
3. SIGNIFICANT EVENTS AND TRANSACTIONS .......................................................... 10
4. SEGMENT ANALYSIS ..... …………………………………………………………………...11
5. ADDITIONS AND DISPOSALS OF PROPERTY,PLANT AND EQUIPMENT .............. 12
6. ADDITIONS AND DISPOSALS OF INTANGIBLE ASSETS ......................................... 12
7. EARNINGS PER SHARE .............................................................................................. 13
8. ISSUED CAPITAL ......................................................................................................... 13
9 BUSINESS COMBINATION .......................................................................................... 14
10. GOODWILL IMPAIRMENT ........................................................................................... 15
11. EVENTS AFTER THE BALANCE SHEET DATE ......................................................... 15
DIRECTORS’ DECLARATION ................................................................................................... 16
INDEPENDENT REVIEW REPORT .......................................................................................... 17

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REFRESH GROUP LIMITED – HALF YEAR REPORT

DIRECTORS’ REPORT

Your directors submit their report for the half-year ended 31 December 2009.

DIRECTORS

The names of the directors of the Company in office at the date of this report or during the half-year are:-

Henry Heng

Edmund Teo

Alan Ong

Dr Anthony Soh

Boon Kheng Ong (resigned 4 August 2009)

REVIEW AND RESULTS OF OPERATIONS

We are pleased to report a significant turnaround in most of our operations. This has resulted in achieving an operating profit for the first half, which being a colder half is traditionally with weaker results. The acquisition of Minnamurra Natural Springwater (“Minnamurra”) on 1 September 2009 resulted in having to operate from 2 premises in Sydney, incurring additional operating expenses and moving costs for the half-year. Minnamurra is now fully integrated into our Sydney operation which is expected to be profitable from January 2010. Sales of Moores to Woolworths supermarkets in Queensland was previously handled from Sydney but has been transferred to Brisbane since April 2009. The Brisbane factory commenced production in late August 2009 which resulted in a turnaround from substantial losses to profit. Cost cutting in Toowoomba has helped achieve savings and increase profits. Melbourne has also achieved significant growth cutting their losses drastically. The full year results will see all branches profitable except for Kalgoorlie.

Corporate expenses have increased partly because of non-recurring expenditure in excess of $70,000 spent to date on the proposed acquisition of AridTec Pte Ltd. We are still working on the acquisition and hope to finalise it soon. This will provide Refresh with another revenue stream to support the corporate expenses. Because of the operating profits, total losses have reduced compared to the previous period.

Revenue has declined for the first time due to the loss of 2 significant customers by our West Australian distributors. As these supplies were made on low margins, the customer losses did not significantly affect our bottom line much.

Details of the results are found in Note 4 Segment Analysis.

AUDITOR’S INDEPENDENCE DECLARATION

We have obtained an independence declaration from our auditors, Grant Thornton Audit Pty Ltd, which is included on page 4.

Signed for and on behalf of the directors in accordance with a resolution of the Board.

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Henry Heng Executive Chairman Dated 25 February 2010 Perth, Western Australia

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

Auditor’s Independence Declaration To the Directors of Refresh Group Limited

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Refresh Group Limited for the half-year ended 31 December 2009, I declare that, to the best of my knowledge and belief, there have been:

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

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

GRANT THORNTON AUDIT PTY LTD

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P W Warr

Director – Audit & Assurance Services

Perth, 25 February 2010

Grant Thornton Audit Pty Ltd ACN 130 913 594, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation. 4

REFRESH GROUP LIMITED – HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2009

Revenue from ordinary activities Changes in Inventories of finished goods and work in progress Other income Employee benefits expense Depreciation and amortisation expense Professional fees Advertising expenses Motor vehicle expenses Occupancy expenses Other expenses Operating loss From Continuing Operations Finance income Finance costs Net loss before Income Tax Income tax expense Net loss attributable to members of Refresh Group Limited Other comprehensive income Total comprehensive income/(loss) attributable to members of Refresh Group Limited Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share)	6 months to 31 December 2009 $ 6 months to 31 December 2008 $ 2,779,814 2,983,517 (1,003,059) (1,217,645) - (7,844) (1,119,688) (1,131,833) (113,478) (90,692) (44,201) (54,346) (100,994) (114,478) (94,927) (99,671) (239,937) (204,538) (305,009) (366,674)
	(241,479) (304,204) 6,383 12,340 (16,562) (25,117)
	(251,658) (316,981) - -
	(251,658) (316,981) - -
	(251,658) (316,981)
	(0.45) (0.71) (0.45) (0.71)

The condensed consolidated financial statements should be read in conjunction with the accompanying notes

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REFRESH GROUP LIMITED – HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2009

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 Equity attributable to equity holders of the parent Issued capital Reserves Accumulated losses TOTAL EQUITY	Notes	31 December 2009 $ 30 June 2009 $
	8	401,814 1,256,854 758,636 614,184 939,739 777,707
		2,100,189 2,648,745
		1,050 1,050 2,083,635 2,005,858 1,066,137 971,137
		3,150,822 2,978,045
		5,251,011 5,626,790
		587,400 1,700,923 67,200 159,227 92,733 86,211
		747,333 1,946,361
		50,080 81,312 33,954 25,871
		84,034 107,183
		831,367 2,053,544
		4,419,644 3,573,246
		5,877,049 4,778,993 141,883 141,883 (1,599,288) (1,347,630)
		4,419,644 3,573,246

The condensed consolidated financial statements should be read in conjunction with the accompanying notes

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REFRESH GROUP LIMITED – HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2009

CONSOLIDATED Balance at 1 July 2008 Equity fund raising costs Issue of share capital Loss attributable to members of parent entity Balance at 31 December 2008 Balance at 1 July 2009 Equity fund raising costs Issue of share capital Loss attributable to members of parent entity Balance at 31 December 2009	Issued Capital Fund Raising Cost Other Reserves Accumulated Losses Total
	5,105,070 (326,079) 127,888 (859,457) 4,047,422 - - - - - - - - - - - - - (316,981) (316,981)
	5,105,070 (326,079) 127,888 (1,176,438) 3,730,441
	5,113,070 (334,077) 141,883 (1,347,630) 3,573,246 - (78,725) - - (78,725) 1,176,781 - - - 1,176,781 - - - (251,658) (251,658)
	6,289,851 (412,802) 141,883 (1,599,288) 4,419,644

The condensed consolidated financial statements should be read in conjunction with the accompanying notes

7

REFRESH GROUP LIMITED – HALF YEAR REPORT CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2009

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Borrowing costs Interest received Net cash flows from/(used in) operating activities Cash flows from investing activities Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Repayment to director related entity Purchase of other non-current assets Acquisition of subsidiaries, net of cash acquired Net cash flows from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from application of right issues Proceeds from borrowing Share Issue borrowings Repayment of borrowings Net cash flows from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	6 months to 31 December 2009 $ 6 months to 31 December 2008 $
	2,754,082 3,148,537 (2,931,154) (3,463,374) (16,563) (10,163) 6,383 12,340
	(187,252) (312,660)
	- 7,844 (141,255) (113,517) (174,549) - - - (150,000)
	(465,804) (105,673)
	- 2,577 - - 75,243 - (78,725) - (198,502) (34,564)
	(201,984) (31,987)
	(855,040) (450,320) 1,256,854 738,446
	401,814 288,126

The condensed consolidated financial statements should be read in conjunction with the accompanying notes

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2009

1. CORPORATE INFORMATION

The financial report of Refresh Group Limited for the half-year ended 31 December 2009 was authorised for issue in accordance with a resolution of the directors on 25 February 2010. Refresh Group Limited is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange.

The Group’s principal activities are the production and/or distribution of lifestyle products like bottled water, coolers and filtration systems.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all of the notes of the type normally included within the 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.

The half-year financial report should be read in conjunction with the annual Financial Report of Refresh Group Limited as at 30 June 2009.

It is also recommended that the half-year financial report be considered together with any public announcements made by Refresh Group Limited and its controlled entities during the half-year ended 31 December 2009 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of preparation

The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirement of the Corporations Act 2001, applicable Accounting Standards, including AASB134 Interim Financial Reporting and other mandatory professional reporting requirements. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company’s 2009 annual financial report for the financial year ended 30 June 2009, except for the impact of the Standards and Interpretations described below. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

(b) Significant accounting policies

The half-year consolidated financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2009 except for the adoption of:

AASB 101 Presentation of Financial Statements (Revised 2007) AASB 8 Operating Segments AASB 3 Business Combinations (Revised 2009)

The adoption of AASB101 (Revised 2007) makes certain changes to the format and titles of the primary financial statements and to the presentation of some items within these statements. It also gives rise to additional disclosures. The measurement and recognition of the Group’s assets, liabilities, income and expenses is unchanged. However, some items that were recognised directly in equity are now recognised in other comprehensive income, for example revaluation of property, plant and equipment. AASB 101 affects the presentation of owner changes in equity and introduces a ‘Statement of comprehensive income.’

The adoption of AASB 8 has not affected the identified operating segments for the Group. However, reported segment results are now based on internal management reporting information that is regularly reviewed by the chief operating decision maker. In the previous annual and interim financial statements, segments were identified by reference to the dominant source and one geographical segment being Australia.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2009

Revised AASB 3 is applicable prospectively from 1 July 2009. Changes introduced by this Standard, or as a consequence of amendments to other Standards relating to business combinations which are expected to affect the Group, include the following:

• All business combinations, including those involving entities under common control, are accounted for by applying the acquisition method which prohibits the recognition of contingent liabilities of the acquiree at acquisition date that do not meet the definition of a liability. Costs incurred that relate to the business combination are expensed instead of comprising part of the goodwill acquired on consolidation. Changes in the fair value of contingent consideration payable are not regarded as measurement period adjustments and are recognised through profit or loss unless the change relates to circumstances which existed at acquisition date.

• Unrecognised deferred tax assets of the acquiree may be subsequently realised within 12 months of acquisition date on the basis of facts and circumstances existing at acquisition date with a consequential reduction in goodwill. All other deferred tax assets subsequently recognised are accounted for through profit or loss.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these half-year consolidated financial statements.

(c) Basis of consolidation

The half-year consolidated financial statements comprise the financial statements of Refresh Group Limited and its controlled subsidiaries (‘the Group’).

(d) Going Concern

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The ability of the Company to continue paying its debts as and when they fall due is dependent upon the Company’s improving profitable operations, the raising of additional equity funds and finance funding (as and when required) or limiting the Company’s cash burn rate.

With the continuity of increasing revenue, introduction of new contracts, through the integration of Minnamurra into Sydney and cost reduction, the Company is expecting to achieve profitability in the near future.

In the event that the Company is unable to continue as a going concern, it may be required to realise all assets at amounts different from that recorded in the balance sheet, settle liabilities other than in the ordinary course of business, and make provision for other costs which may arise as a result of cessation or curtailment of normal business procedures.

3. SIGNIFICANT EVENTS AND TRANSACTIONS

The Company undertook a non-renounceable rights issue of one new share for every two shares held as at 16 June 2009 at an issue price of at 5 cents per new share together with one attached free new option for every new share, exercisable at 10 cents each on or before 7 July 2010. The offer closed successfully.

On 13 July 2009, 22,485,616 shares at 5 cents each were issued.10,404,559 were allotted to the subscribing shareholders and the balance of 12,081,057 shares to the Underwriter and sub-underwriter.

The Company incurred non reoccurring corporate costs of $70,000 during the half year period on the acquisition of AridTec Pte Ltd. This has been recorded as an operating expense.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2009

4. SEGMENT ANALYSIS

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.

6 months to 31 December 2009 Revenue from external customers Segment operating profit/(loss) Total assets 6 months to 31 December 2008 Revenue from external customers Segment operating profit/(loss) Year to 30 June 2009 Total assets	WA NSW VIC QLD OTHER TOTAL
	1,253,261 531,979 213,553 781,021 - 2,779,814
	35,902 (31,316) (11,054) 57,232 (302,422) (251,658)
	2,474,825 844,005 393,411 1,325,567 213,203 5,251,011
	1,498,918 651,204 167,321 666,074 - 2,983,517
	85,339 2,689 (62,369) (151,930) (190,710) (316,981)
	2,202,476 664,277 395,541 1,197,871 1,166,625 5,626,790

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

5. ADDITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT

6 months to 31 December 2009 Carrying amount at 1 July 2009 Additions Acquisition through business combination (note 9) Disposals Depreciation Carrying amounts at 31 December 2009 Year to 30 June 2009 Carrying amount at 1 July 2008 Additions Acquisition through business combination Disposals Depreciation Carrying amounts at 31 December 2009	CONSOLIDATED Plant and equipment $
	2,005,858 141,255 50,000 - (113,478)
	2,083,635
	1,997,110 244,441 - (30,881) (204,812)
	2,005,858

6. ADDITIONS AND DISPOSALS OF INTANGIBLE ASSETS

6 months to 31 December 2009 Carrying amount at 1 July 2009 Additions Acquisition through business combination (note 9) Disposals Amortisation Impairment loss Carrying amounts at 31 December 2009 Year to 30 June 2009 Carrying amount at 1 July 2008 Additions Acquisition through business combination Disposals Amortisation Impairment loss Carrying amounts at 30 June 2009	CONSOLIDATED Trademarks Goodwill Total $ $ $
	4,363 966,774 971,137 - - - - 95,000 95,000 - - - - - - - - -
	4,363 1,061,774 1,066,137
	3,000 966,774 969,774 1,363 - 1,363 - - - - - - - - - - - -
	4,363 966,774 971,137

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

7. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary shareholders (after deducting interest on the convertible redeemable preference shares) by the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options and dilutive convertible non-cumulative redeemable preference shares).

The following reflects the loss and share data used in the total operations basic and diluted earnings per share computations:

Loss attributable to members of the parent entity Weighted average number of ordinary shares for basic earnings per share Basic loss per share (cents per share)	CONSOLIDATED 31.12.09 31.12.08
	(251,658) (316,981) 55,756,275 44,361,233 (0.45) (0.71)

There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements.

8. ISSUED CAPITAL

Ordinary shares Issued and fully paid Movements in ordinary shares on issue 6 months to 31 December 2009 At 1 July 2009 Rights Issue Issue shares to acquire Minnamurra Spring Water on 1/9/09 (note 9) Fund raising costs At 31 December 2009	Number 44,971,233 22,485,616 750,000 -	CONSOLIDATED 31.12.09 30.06.09 $ $ 5,877,049 4,778,993 $ 4,778,993 1,124,281 52,500 (78,725) 5,877,049
	68,206,849

On 13 July 2009, 22,485,616 shares at 5 cents each were issued.10,404,559 were allotted to the subscribing shareholders and the balance 12,081,057 shares to the Underwriter and sub-underwriter.

[13]

REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

9. BUSINESS COMBINATION

On 1 September 2009, the Group acquired Minnamurra Natural Springwater based in Sydney. This business is integrated into the Sydney operation, allowing customers the choice of natural spring water or pure distilled water. The purchase consideration was $150,000 in cash and 750,000 ordinary shares in Refresh Group Limited based on a fair value of 7 cents each.

Purchase consideration Cash paid Equity issued as consideration Total Consideration Fair value of assets and stocks acquired Goodwill Assets and liabilities held at acquisition date: Inventories Plant and equipment Net Assets acquired	$ 150,000 52,500
	202,500
	107,500 95,000
	202,500
	57,500 50,000
	107,500

Key factor contributing to the $95,000 of goodwill is the synergies expected to be achieved through economies of scale as a result of the integration of Minnamurra into Sydney’s operation.

No amount of the goodwill is deductible for tax purposes.

It is impracticable for the Company to separate the amounts of revenue and profit or loss of Minnamurra Natural Springwater, as required under AASB 3.64(q) from the consolidated statement of comprehensive income for current reporting period. This is due to immediate integration of Minnamura Natural Springwater operations with the existing Sydney operations. Since the date of acquisition, separate accounting records are no longer maintained.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

10. GOODWILL IMPAIRMENT

Due to the current economic environment, changes to the Company’s operating results and forecasts, and a reduction in the Company’s market capitalisation, the Company determined a triggering event had occurred and performed a goodwill impairment test at balance sheet date.

Goodwill is allocated to the Company’s cash generating units “CGUs”. The Company tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

In accordance with AASB 136, “Impairment of Assets”, the Company performed its goodwill impairment test by comparing the recoverable amount of each CGU with its carrying amount, including goodwill. The recoverable amount of a CGU was determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projections over a five year period including a terminal value. The growth rate assumptions ranged from 5% to 18% reflecting achievement of at least a long-term estimate of inflation in the region in which each CGU operates. Management prepared the value-in-use calculations with reference to historical results and forecasts for each CGU.

The discount rate for each CGU was estimated based on the Company’s weighted average cost of capital adapted for the regions in which the CGUs operate. The discount rate used is 13%.

The Board anticipates the growth rate in revenue and net profit margin to remain the same for all CGU as reported in 30 June 2009 except for Melbourne, the growth rate in revenue is revised to 18% as compared to 30% and net profit margin is projected to be down to 5% as compared to 10% and net profit margin for Hydr8 to be 8% as compared to 10%.

11. EVENTS AFTER BALANCE SHEET DATE

On 10 August 2009, the company announced that it has signed a Memorandum of Understanding to acquire AridTec Pte Ltd (AridTec). AridTec is a Singapore-based company. It is the parent company of AirQua International Pte Ltd (AirQua). It was established in 2007 by a group of innovative individuals who are deeply concerned that people should never be denied access to water. AirQua provides fresh, potable water from an unlimited source: the air. It is the sustainable solution to providing fresh water in abundance, wherever whenever. Combining advanced technologies with committed staff, AirQua provides alternative water solutions that make a real difference to everyday life.

Negotiations are still in progress and once finalised, shareholders will be informed through announcement to the Australian Securities Exchange.

[15]

REFRESH GROUP LIMITED – HALF YEAR REPORT

DIRECTORS’ DECLARATION

In accordance with a resolution of directors of Refresh Group Ltd, I state that;

In the opinion of the directors:

• a) the condensed consolidated financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001 , including:

(i) give a true and fair view of the financial position as at 31 December 2009 and the performance for the halfyear ended on that date of the consolidated entity; and

(ii) comply with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and

• b) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

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Henry Heng Executive Chairman Dated 25 February 2010 Perth, Western Australia

[16]

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

Independent Auditor’s Review Report To the Members of Refresh Group Limited

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

We have reviewed the accompanying half-year financial report of Refresh Group Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2009, and the statement of comprehensive income, statement of changes in equity and statement of cash flows 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 both the Company 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 Company 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 controls 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 consolidated half-year financial report based on our review. We conducted our review in accordance with the 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 2009 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 Refresh 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

Grant Thornton Audit Pty Ltd ACN 130 913 594, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation. 17

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 complied with the independence requirements of the Corporations Act 2001.

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 Refresh 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 2009 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.

Material uncertainty regarding continuation as a going concern

Without qualification to our conclusion above, we draw attention to Note 2(d) in the halfyear financial report.

The consolidated entity incurred a loss of $251,658 for the half-year ended 31 December 2009 and a cash outflow from operations of $187,252. The consolidated entity’s ability to continue as a going concern is dependent upon additional funds raised from debt or equity sources or the operations becoming profitable in the future or the consolidated entity limiting its cash burn rate. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore realise its assets and extinguish its liabilities in the normal course of business and at the amount stated in the half-year financial report.

The half-year financial report does not include any adjustments relating to the recoverability and classification of recorded assets amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity be unable to continue as a going concern.

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GRANT THORNTON AUDIT PTY LTD

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P W Warr Director – Audit & Assurance Services

Perth, 25 February 2010

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