ENECO REFRESH LTD — Interim / Quarterly Report 2019

Feb 27, 2019

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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 2018 and the corresponding period to 31 December 2017

Company Result	A$’000
Revenue from ordinary activities	down 6.1% to 4,218
Loss for the period from continuing operations attributable to members up 4.54% to (274)
Loss for the period attributable to members	up 4.54% to (274)

For the Period ending Net tangible asset per share Net asset per share	31 Dec 18 $0.03 $0.03	31 Dec 17
		$0.04 $0.04

Dividends No interim dividend is payable

2. Brief Explanation of the Result

Refresh Waters’ operations in New South Wales and Victoria continued to grow, with profit remaining steady. Unfortunately, operations in Western Australia (WA) have declined, due to the sharp growth of Aldi, which has subsequently resulted in many IGA supermarkets closing down. This has not only impacted Refresh’s sales but each supermarket’s closing also resulted in bad debts.

Revenue in Refresh Plastics declined throughout the half-year. Management made the decision to give up production of low margins items, to free up machines to pursue products with higher gross margins. This has helped reduce the loss.

Refresh Waters Queensland has been blowing its own 5L PET bottles, which helped it reverse the loss to a good profit.

Appendix 4D Half-Year Financial Report

More details are in Review and Results of Operations in the Directors’ Report.

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

Nil

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.

31 Dec 18 31 Dec 17	Associate Refresh Waters Queensland Pty Ltd Refresh Waters Queensland Pty Ltd	% Holding 49 49	Share of Profit / (Loss)
			$15,808 ($7,581)

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Refresh Group Limited

and its controlled entities

ABN 28 079 681 244

Condensed Half Year Financial Report

31 December 2018

REFRESH GROUP LIMITED – CONDENSED HALF YEAR REPORT

Table of Contents

TABLE OF CONTENTS……………………………………………………………………………………………………1 DIRECTORS’ REPORT……………………………………………………………………………………………………2 AUDITOR’S INDEPENDENCE DECLARATION………………………………………………………………………..4 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER 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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS……………………………………………………..9 DIRECTORS’ DECLARATION…………………………………………………………………………………………..20 INDEPENDENT REVIEW REPORT…………………………………………………………………………………….21

1

REFRESH GROUP LIMITED – HALF YEAR REPORT

DIRECTORS’ REPORT

Your directors submit their report for the half-year ended 31 December 2018.

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 Chiau Thuan Teh Michael Pixley Peter Chai Koji Yoshihara (Appointed 2 November 2018) Yasuhiro Yamamoto (Appointed 17 January 2019) Reiichi Natori (Appointed 17 January 2019)

REVIEW AND RESULTS OF OPERATIONS

Refresh is pleased to welcome a new investor, Eneco Investment Pte Ltd. The investment was made in 2 tranches: - $500,000 on 2 Nov 18; and - $7,734,165 on 16 Jan 19.

While the bottled water industry continues to grow in Australia, margins have been affected in the face of severe competition. We are pleased that Refresh has been able to identify, grow, and diversify so as to now incorporate 3 different divisions – Refresh Waters, Refresh Plastics, and Eneco Australia.

Refresh Waters

Refresh Waters is growing well in Sydney, Melbourne, Brisbane, and Kalgoorlie, both in sales and profit. Perth has had some challenges following the entry of Aldi into Western Australia and IGA supermarkets (Refresh stockists) resultingly closing. This has caused a temporary decline in sales and some bad debts.

Refresh has bought back 51% of shares in Refresh Waters Queensland (RWQ) which it sold to Saisan Co Ltd 5 years ago. RWQ’s financials will now be consolidated into our financials, increasing our revenue and share of profit.

Refresh Plastics

Refresh diversified into Ampi Plastics in May 2017 and our principal, Petainer Keg, has introduced a new 20L PET oneway keg. Refresh Plastics has started to produce this in Melbourne, which will contribute to our revenue and bottom-line.

Eneco Australia

Refresh has now been appointed the Australian and New Zealand distributor for all products of Eneco Holdings Japan and its associated companies.

Refresh will continue to look for opportunities to grow the Group so as to deliver a better return for all shareholders.

In accordance with ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191, the amounts in the directors’ report and in the financial report have been rounded to the nearest dollar.

Detailed results of the various operating segments are found in Note 4(f) Operating Segment.

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REFRESH GROUP LIMITED – HALF YEAR REPORT

AUDITOR’S INDEPENDENCE DECLARATION

We have obtained an independence declaration from our auditors, Pitcher Partners, 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 28 February 2019 Perth, Western Australia

3

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AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF REFRESH GROUP LIMITED

In relation to the independent auditor’s review for the half-year ended 31 December 2018, to the best of my knowledge and belief there have been:

(i) no contraventions of the auditor independence requirements of the Corporations Act 2001 ; and

(ii) no contraventions of APES 110 Code of Ethics for Professional Accountants .

PITCHER PARTNERS BA&A PTY LTD

PAUL MULLIGAN Executive Director Perth, 28 February 2019

Pitcher Partners is an association of independent firms Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney An Independent member of Baker Tilly International

Pitcher Partners BA&A Pty Ltd An independent Western Australian Company ABN 76 601 361 095 L evel 11, 12-14 The Esplanade, Perth WA 6000 Registered Audit Company Number 467435 Liability limited by a scheme approved under Professional Standards Legislation

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REFRESH GROUP LIMITED – HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2018

Continuing operations Revenue Cost of Sales Gross Profit Other income Marketing Expenses Distribution Expenses Administrative Expenses Occupancy Expenses Other expenses Share of net profit/(loss) of associates Results from operating activities Finance income Finance costs Net finance costs Loss before income tax Income tax expense Loss for the period from continuing operations Other comprehensive income Fair value remeasurements on financial assets designated as fair value through other comprehensive income Total comprehensive (loss)/income attributable to members of Refresh Group Limited Earnings per share From continuing operations: Basic earnings per share (cents per share) Diluted earnings per share (cents per share)

6 months to 31 Dec 18 $ 6 months to 31 Dec 17 $

4,218,041 4,492,006 (2,417,762) (2,717,809) 1,800,279 1,774,197 6,163 (525) (321,909) (322,202) (599,543) (576,494) (781,273) (744,222) (364,261) (356,269) - (500) 15,808 (7,581) (244,736) (233,596) 3,429 8,336 (33,444) (37,561) (30,015) (29,225) (274,751) (262,821) - - (274,751) (262,821) (74,108) 375,000 (348,859) 112,179 (0.20) (0.02) (0.20) (0.02)

The condensed consolidated statement of profit or loss and other comprehensive income 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 2018

ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non Current Assets Other financial assets Trade and other receivables Property, plant and equipment Intangible assets Investment in Associates 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 Share Reserve FVTOCI Reserve 2014 Profit Reserve Accumulated losses TOTAL EQUITY	Notes	31 Dec 18 $ 30 June 18 $
	6 7 8	312,956 378,128 1,193,480 1,043,658 1,255,935 1,279,474
		2,762,371 2,701,260
		222,324 300,000 207,832 246,010 2,377,389 2,485,703 451,542 451,542 508,023 492,216
		3,767,110 3,975,471
		6,529,481 6,676,731
		616,165 684,598 294,700 261,355 480,265 468,838
		1,391,130 1,414,791
		549,073 680,844 20,568 114,798
		569,641 795,642
		1,960,771 2,210,433
		4,568,710 4,466,298
		10,946,969 10,495,698 191,712 191,712 (74,108) - 356,409 356,409 (6,852,272) (6,577,521)
		4,568,710 4,466,298

The condensed consolidated statement of financial position 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 2018

Balance at 1 July 17 Loss for the half-year Other comprehensive income Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Equity fund raising costs Issue of share capital Balance at 31 Dec 17 Balance at 1 July 18 Loss for the half-year Other comprehensive income Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Equity fund raising costs Issue of share capital Balance at 31 Dec 18	Issued Capital Share Reserve 10,495,698 191,712	FVTOCI Reserve -	Financial Assets Revaluation Reserve 75,000	2014 Profit Reserve Accumulated Losses Total 356,409 (5,514,460) 5,604,359
	- - - -	- -	- 375,000	- (262,821) (262,821) - 375,000
	- -	-	-	- (262,821) 112,179
	- - - -	- -	- -	- - - - - -
	10,495,698 191,712	-	450,000	356,409 (5,777,281) 5,716,538
	10,495,698 191,712	-	-	356,409 (6,577,521) 4,466,298
	- - - -	- (74,108)	- -	- (274,751) (274,751) - - (74,108)
	- -	-	-	- (274,751) (348,859)
	(48,729) - 500,000 -	- -	- -	- - (48,729) - - 500,000
	10,946,969 191,712	(74,108)	-	356,409 (6,852,272) 4,568,710

The condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes

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REFRESH GROUP LIMITED – HALF YEAR REPORT

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

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 sales of property, plant and equipment Purchase of property, plant and equipment Investment in Eve Investment Ltd Net cash flows used in investing activities Cash flows from financing activities Proceeds from issue of shares, net of issue costs Proceeds from borrowings Repayment of borrowings Net cash flows provided by / (used in) in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of half-year	6 months to 31 Dec 18 $ 6 months to 31 Dec 17 $
	4,356,819 4,445,809 (4,691,830) (4,675,391) (33,444) (37,561) 747 8,336
	(367,708) (258,807)
	29,922 4,545 (84,219) (95,881) 3,987 -
	(50,310) (91,336)
	451,271 - 106,309 - (204,734) (128,927)
	352,846 (128,927)
	(65,172) (479,070) 378,128 981,698
	312,956 502,628

The condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

1. CORPORATE INFORMATION

The financial report of Refresh Group Limited for the half-year ended 31 December 2018 was authorised for issue in accordance with a resolution of the directors on 28 February 2019. Refresh Group Limited is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange.

The Group offers complete drinking water solutions. Its principal activities are the production and/or distribution of bottled water, coolers and filtration systems. It is the largest producer of distilled water in Australia, and also supplies pure water for commercial and industrial use.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed 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 condensed half-year financial report should be read in conjunction with the annual Financial Report of Refresh Group Limited as at 30 June 2018.

It is also recommended that the condensed 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 2018 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of preparation

The condensed 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 and AASB134 Interim Financial Reporting. 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 2018 annual financial report for the financial year ended 30 June 2018, except for the adoption of new standards and interpretation effective as of 1 July 2018 applied retrospectively.

(b) Revenue & other income

Revenue is measured at the fair value of the consideration received or receivable after taking into account any discounts and rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. All revenue is stated net of the amount of goods and services tax (GST).

(c) Financial Assets

Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit and loss.

The classification of financial instruments at initial recognition depends on the financial asset’s contractual cashflow characteristics and the Group’s business model for managing them. With the exception of the Group’s trade receivables that do not contain a significant financing component, the Group initially measures the financial asset at its fair value plus, in the case of a financial asset not at fair value through profit and loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined in accordance with the Group’s accounting policy for revenue recognition.

REFRESH GROUP LIMITED – HALF YEAR REPORT

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont)

(c) Financial Assets (cont)

The trade receivables, the Group applies a simplified approach in calculating expected credit losses. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime expected credit losses at each reporting date. In determining the provision required, the Group utilises its historical credit loss experience, adjusted only where appropriate for forward-looking factors specific to the debtors and economic environment.

(d) Financial Liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities through fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables.

(e) New accounting standards

The following Australian Accounting Standards have been issued or amended and are applicable to the half year financial statements of the Group:

AASB No.	Title	Application for annual reporting periods beginning
AASB 9	Financial Instruments	1 January 2018
AASB 15	Revenues from Contracts with Customers	1 January 2018

AASB 9 ‘Financial Instruments’

AASB 9 supersedes pronouncement AASB 139 ‘Financial Instruments: Recognition and Measurement’ and was adopted by the Group effective 1 July 2018. The standard brings together all three aspects of the accounting for financial instruments: classification and measurement, impairment; and hedge accounting.

With the exception of hedge accounting, the Group has applied AASB 9 retrospectively, with the initial application date of 1 July 2018, as mentioned above. The Group does not currently apply hedge accounting.

At the date of initial application, the Group concluded to:

• Classify eligible equity instruments as financial assets at fair value through other comprehensive income (FVTOCI); and

• Apply the simplified approach for trade receivables in the calculation of the expected credit loss (ECL) rather than the general approach.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

(e) New accounting standards (cont)

The Group adopted AASB 9 retrospectively with the cumulative effect of initially applying the new Standard recognised at the date of initial recognition (i.e. as at 1 July 2018). The following table provides the adjustments made to individual line items recognised in the Group’s condensed consolidated interim financial report as a consequence of it adopting AASB 9 as at 1 July 2018:

			AASB	139	AASB 9
			Carrying		Carrying
	AASB 139	AASB 9	Amount		Amount
	Classification	Classification	$		$
Financial assets
Listed shares(i)	Available for Sale	FVTOCI		300,000	300,000

(i) Investment in Eve Investments Limited was classified as Available-for-Sale under AASB 139. The Group has decided to make the irrevocable election on transition to account for these investments as fair value through other comprehensive income (FVTOCI).

As a result of the adoption of the above, as at the date of initial application, there is no material impact on the transactions and balances recognised in the financial statements in the financial statements as the cumulative balance within the Financial Assets Revaluations Reserve at 1 July 2018 was nil.

AASB 15 ‘Revenue from Contracts with Customers’

AASB 15 supersedes AASB 111 Construction Contracts, AASB 118 Revenue and related interpretations and it applies with limited exceptions, to all revenue arising from contracts with its customers. AASB 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

AASB 15 requires the Group to exercise judgement, taking into account all the relevant facts and circumstances when applying each step of the model to contracts with customers. At the initial date of application (1 July 2018), the effect of adopting AASB 15 did not have a material impact on the transactions and balances recognised in the financial statements.

The principal activities of the Group are the manufacture and sale of bottled water and filtration systems; and the production and sale of plastic products.

At the initial date of application, the effect of adopting AASB 15 did not have a material impact on the transactions and balances recognised in the financial statements.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont)

• (e) New accounting standards (cont)

New and revised Standards and amendments thereof and Interpretations effective for the future periods relevant to the Group include:

• AASB 16 Leases supersedes pronouncement AASB 117 Leases, Int. 4 Determining whether an Arrangement contains a Lease, Int. 115 Operating Leases – Lease Incentives, and Int. 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease with effective date 1 January 2019;

• AASB 2017-4 Amendments to Australian Accounting Standards – Effective date of AASB Interpretation 23 Uncertainty over Income Tax Treatments with effective date 1 January 2019;

• AASB 2017-7 Amendments to Australian Accounting Standards – Effective date of AASB 128 Investments in Associates and Joint Ventures effective date 1 January 2019;

• Interpretations 23 Uncertainty Over Income Tax Treatments – Effective date of Interpretation 23 Uncertainty over Income Tax Treatments with effective date 1 January 2019; and

• Annual Improvements to IFRS Standards 2015-2017 Cycle – Effective date on amendments to IFRS 3 Business Combinations, IFRS 11 Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs with effective date 1 January 2019.

The Group has not early adopted any of the above standards, interpretations or amendments that have been issued but are not yet effective.

.

(f) Basis of consolidation

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

(g) 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 Group incurred operating losses of $274,751 (31 December 2017: $262,821 profit) during the period ended 31 December 2018. The statement of financial position as at 31 December 2018 shows that the Group had cash and cash equivalents balance of $312,956 (30 June 2018: $378,128), and a net current asset position of $1,447,162 (30 June 2018: $1,286,469). The Group’s cashflow forecasts for the twelve months ended 31 March 2020 indicate that the Group will be able to continue as a going concern.

Having regard to the above, the Directors consider it appropriate to prepare the financial statements on a going concern basis of accounting as they have a reasonable basis to conclude that the Company will be able to meet its debts as they fall due.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

3. SIGNIFICANT EVENTS AND TRANSACTIONS

Refresh entered into an agreement for a strategic investment where Eneco Investment Pte Ltd will subscribe for shares in Refresh in two tranches:

2 Nov 2018 – 10,000,000 shares to raise $500,000

16 Jan 2019 – 128,902,757 shares to raise $7,734,165

Subsequent to the completion of the equity subscription, Refresh has been granted the exclusive rights to distribute, market and import Eneco Holdings’ highly hydrolysed water products and equipment to produce emulsion fuel in Australia and New Zealand under the terms of a distribution agreement.

4. OPERATING SEGMENTS

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 segments, management follows the geographical location of the Group’s operations. Corporate costs are included under “Other”.

Types of products and services by segment

The Group has two operating segments being: the manufacture and sale of bottled water and filtration systems; and the production and sale of plastic products.

Basis of accounting for purposes of reporting by operating segments

(a) Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group, except for the adoption of new standards and interpretations effective as of 1 July 2018 applied retrospectively.

(b) Intersegment transactions

There is no intersegment sale and corporate costs are not allocated. Corporate costs are classified under “Other” in the segment performance analysis.

(c) Segment assets

Segment assets are clearly identifiable on the basis of their nature and physical location.

(d) Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

4. OPERATING SEGMENTS (cont)

(e) Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they not considered part of the core operations of any segment:

• income tax expense

• corporate costs

• deferred tax assets and liabilities

• current tax liabilities

(f) Segment performance

31 December 2018 Revenue from external customers Revenue from sales relating to the distribution of bottled water, coolers and filtration systems Revenue from the production of plastic products Total revenue from external customers Depreciation & amortisation Segment operating profit/(loss) Operating profit/(loss) relating to the distribution of bottled water, coolers and filtration systems Operating profit/(loss) from the production of plastic products Total operating profit/(loss) Total assets Total liabilities	WA NSW VIC OTHER (Corporate) TOTAL
	$ $ $ $ $
	1,391,858 1,008,722 585,872 - 2,986,453
	- - 1,231,588 - 1,231,588
	1,391,858 1,008,723 1,817,460 - 4,218,041
	81,686 25,152 55,353 - 162,191
	21,837 84,348 66,261 172,446
	- - (195,931) (195,931)
	21,837 84,348 (129,670) (251,266) (274,751)
	3,156,424 796,514 2,203,304 373,239 6,529,481
	728,599 3,507 319,898 908,767 1,960,771

1 Include profit/(loss) from associate

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

4. OPERATING SEGMENTS (cont)

(f) Segment performance (cont)

31 December 2017 Revenue from external customers Revenue from sales relating to the distribution of bottled water, coolers and filtration systems Revenue from the production of plastic products Total revenue from external customers Depreciation & amortisation Segment operating profit/(loss) Operating profit/(loss) relating to the distribution of bottled water, coolers and filtration systems Operating profit/(loss) from the production of plastic products Total operating profit/(loss) Total assets Total liabilities	WA NSW VIC OTHER (Corporate) TOTAL
	$ $ $ $ $
	1,535,871 927,873 551,891 - 3,015,635
	- - 1,476,371 - 1,476,371
	1,535,871 927,873 2,028,262 4,492,006
	86,417 27,836 56,668 - 170,921
	84,667 84,340 66,365 - 235,272
	- - (208,627) - (208,627)
	84,667 84,340 (142,262) (289,566) (262,821)
	3,358,092 844,698 2,815,205 1,081,918 8,099,913
	851,421 4,074 431,301 1,096,579 2,383,375

5. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net profit/(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 profit/(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 earnings per share (cents per share)	CONSOLIDATED 31 Dec 18 31 Dec 17
	(274,751) (262,821) 135,072,028 133,455,590 (0.20) (0.20)

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.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

6. INTANGIBLE ASSETS

The Group performs goodwill impairment testing every half year. Goodwill is allocated to the Group’s cash generating units (CGU).

In accordance with AASB 136, “Impairment of Assets”, the Group 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 of 3% to 10%, 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 was 15%.

Based on the impairment tests, impairment of intangible assets was not necessary and none has been recognised at 31 December 2018.

7. ISSUED CAPITAL

Ordinary shares Issued and fully paid Fund raising costs	CONSOLIDATED 31 Dec 18 30 June 18 $ $ 10,995,698 10,495,698 (48,729) -
	10,946,969 10,495,698

Movements in ordinary shares on issue At 30 June 2018 Issued shares to Eneco on 2/11/2018 Fund raising costs At 31 December 2018	Number $
	133,455,590 10,495,698 10,000,000 500,000 - (48,729)
	143,455,590 10,946,969

Effective 1 July 1998, the Company Law Review Act abolished the concept of authorised capital. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares .

8. 2014 PROFIT RESERVE

Paragraph 202-45(e) of the ITAA 1997 does not prevent a company from franking a dividend paid to its shareholders that is paid out of profits recognised in the company's accounts and available for distribution, and is paid in accordance with the company's constitution and without breaching section 254T or Part 2J.1 of the Corporations Act, merely because the company has unrecouped accounting losses accumulated in prior years or has lost part of its share capital.

The Board set aside $580k from profits for year ended 30 June 2014 in a separate 2014 Profit Reserve account. This is to enable dividends to be paid franked regardless of whether the Group makes profit or losses in subsequent years, subject to solvency tests. Dividends of $112k were paid from this account in September 2015, leaving a balance of $356k.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

9. RELATED PARTY DISCLOSURES

9.1 Transactions with Related Parties

(i) Associate company: Sale of goods and services: Goods Management fees and occupancy fees paid to Refresh Group Ltd from associates Interest received and receivable from associated companies 9.2 Amounts outstanding from related parties: Trade and other receivables: Unsecured loan is made to associate company, Refresh Waters Queensland Pty Ltd on an arm’s length basis. Repayment is made from positive cash flow. Interest is charged at cash rate plus 0.5%, which was last charged at 2% (30 June 2018: 2%) (i) Loans to associate company: Beginning of the year Loans advanced Loan repayment received Interest charged End of the year	Consolidated Group 31 Dec 18 $ 31 Dec 17 $
	14,060 23,093 6,700 6,700 2,682 2,859 Consolidated Group 31 Dec 18 $ 30 June 18 $ 246,010 292,851 288,350 710,606 (329,210) (763,372) 2,682 5,925
	207,832 246,010

10. EVENTS AFTER BALANCE SHEET DATE

Refresh bought back its stake in Refresh Waters Queensland Pty Ltd (RWQ) as follows: - 2 Jan 2019: 2% increasing its stake to 51 % and thereby making RWQ a subsidiary instead of associate company

• 1 Feb 2019: 49% increasing its stake to 100% making RWQ a wholly-owned subsidiary

Refresh has convened a Shareholders Meeting for 12 March 2019 to change the company’s name to Eneco Refresh Limited.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

11. CONTINGENT LIABILITIES AND COMMITMENTS

11.1 Operating lease commitments

The Group has entered into commercial leases where it is not in the best interest of the Group to purchase these assets.

Location	Expiry	Lease Terms
Kalgoorlie	30/06/20	2 + 2-year lease
Melbourne	30/06/22	5 + 5-year lease
Perth	30/06/20	3 years
Perth External Warehouse	31/03/19	1-year lease
Sydney	31/07/21	4-year lease

Renewal terms are included in the contracts. Renewals are at the option of the specific entity that holds the lease. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 31 Dec are as follows:

Within one year After one year but not more than five years	CONSOLIDATED 2018 2017 $ $
	601,224 594,610 997,512 1,577,883
	1,598,736 2,172,493

11.2 Finance lease and hire purchase commitments

Current Obligations under finance leases and hire purchase contracts (Note 21) Non-current Obligations under finance leases and hire purchase contracts (Note 21)	Effective interest rate Maturity	CONSOLIDATED 2018 2017 $ $
	4.69% < 1 year 4.69% 1 – 5 years	62,808 59,935
		62,808 59,935
		49,073 111,881
		49,073 111,881

11.3 Capital expenditure commitments

The Group did not have any capital expenditure commitments at 31 Dec 2018 (2017: Nil).

12. BUSINESS COMBINATIONS

On 2 January 2018, Refresh bought back 20,000 issued and fully paid shares in Refresh Waters Queensland Pty Ltd (RWQ) increasing its shareholdings by 2% to 51 % and thereby making RWQ a subsidiary instead of associate company.

On 1 February the Refresh bought back the remaining 490,000 issued and fully paid shares in RQG increasing its shareholding to 100%, making RWQ a wholly-owned subsidiary.

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REFRESH GROUP LIMITED – HALF YEAR REPORT NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

12. BUSINESS COMBINATIONS (cont)

a) Details of the consideration paid to Vendors: Cash consideration (20,000 ordinary shares in RWQ) Cash consideration (490,000 ordinary shares in RWQ) Total purchase consideration	$ 16,109 394,658
	410,767

AASB 3 Business Combinations allows a measurement period after a business combination to provide the acquirer a reasonable time to obtain the information necessary to identify and measure all of the various components of the business combination as of the acquisition date. The period cannot exceed one year from the acquisition date.

The acquisitions occurred in January 2019 and February 2019 respectively, therefore the acquisition accounting remained provisional as at 31 December 2018.

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

(i) giving a true and fair view of the financial position as at 31 December 2018 and the performance for the halfyear ended on that date of the consolidated entity; and

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

• b) There are reasonable grounds to believe that the Group 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 28 February 2019 Perth, Western Australia

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REFRESH GROUP LIMITED ABN 28 079 681 244

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF REFRESH GROUP LIMITED

We have reviewed the accompanying half-year financial report of Refresh Group Limited ”the Company” and its controlled entities “the Group”, which comprises the condensed consolidated statement of financial position as at 31 December 2018, the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the Company 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 gives a true and fair view and 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 Group’s financial position as at 31 December 2018 and its performance for the halfyear ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of the Group, 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 the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

Pitcher Partners is an association of independent firms Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney An Independent member of Baker Tilly International

Pitcher Partners BA&A Pty Ltd An independent Western Australian Company ABN 76 601 361 095 L evel 11, 12-14 The Esplanade, Perth WA 6000 Registered Audit Company Number 467435 Liability limited by a scheme approved under Professional Standards Legislation

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REFRESH GROUP LIMITED ABN 28 079 681 244

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF REFRESH GROUP LIMITED

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 the Group is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

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PITCHER PARTNERS BA&A PTY LTD

PAUL MULLIGAN Executive Director Perth, 28 February 2019

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