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REFRESH GROUP LIMITED

ACN 079 681 244

NOTICE OF GENERAL MEETING EXPLANATORY MEMORANDUM PROXY FORM

Date

Tuesday, 13 July 2010

Time 10.00 a.m. WST

Place

17 Denninup Way, Malaga Perth, Western Australia

This Notice of General Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

303971_6_Notice of Meeting - Refresh Group Limited

Notice of General Meeting

REFRESH GROUP LIMITED ACN 079 681 244

NOTICE OF GENERAL MEETING

Notice is hereby given of a General Meeting of Refresh Group Limited ( Company or Refresh ) to be held at 17 Denninup Way, Malaga, Western Australia, on Tuesday, 13 July 2010 at 10.00 a.m. WST, for the purpose of transacting the following business referred to in this Notice of General Meeting.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on Sunday, 11 July 2010 at 10.00 a.m. WST.

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

ORDINARY BUSINESS

1. Resolution 1 – Approve Acquisition of Aridtec Pte Limited and Issue of Consideration Shares

To consider and, if thought fit, to pass with or without amendment, the following as an ordinary resolution :

" That, for the purposes of Listing Rules 7.1 and 11.1.2 and for all other purposes, Shareholders approve:

(a) the acquisition by the Company of the entire issued share capital of Aridtec Pte Limited under the terms and conditions of the Aridtec Agreement;
(b) completion by the Company of the Aridtec Agreement and the performance by the Company of its obligations under the Aridtec Agreement; and
(c) the issue to the Aridtec Vendors of 71,800,000 Shares ( Consideration Shares ) on completion of the Aridtec Agreement on the terms and conditions in the Explanatory Memorandum".

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who might obtain a benefit (except a benefit solely in their capacity as a holder of ordinary securities), a party to the Aridtec Agreement, the Aridtec Vendors and any associates of those persons.

However, the Company will not disregard a vote if:

(a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy form; or
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance to vote as the proxy decides.

303971_6_Notice of Meeting - Refresh Group Limited

Notice of General Meeting

2. Resolution 2 – Approve Issue of Deferred Shares

To consider, and if thought fit, to pass with or without amendment the following as an ordinary resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of up to 48,200,000 Shares ( Deferred Shares ) to the Aridtec Vendors on the terms and conditions in the Explanatory Memorandum".

Voting Exclusion

However, the Company will not disregard a vote if:

(a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy form; or
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance to vote as the proxy decides.

3. Resolution 3 – Approve Issue of Shares to Mr Yong Wei Por

To consider, and if thought fit, to pass with or without amendment the following as an ordinary resolution :

“That, in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve and authorise the Company to issue 7,692,308 Shares to Mr Yong Wei Por".

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Mr Yong Wei Por or any of his associates. However, the Company will not disregard a vote if:

(a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy form; or
(b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the Proxy decides.

By Order of the Board of Directors

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Mary Ang Company Secretary

Perth, 4 June 2010

Explanatory Memorandum

REFRESH GROUP LIMITED ACN 079 681 244

EXPLANATORY MEMORANDUM

This Explanatory Memorandum is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of General Meeting of Refresh.

The Directors recommend Shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.

1. BACKGROUND

1.1 Introduction

On 4 September 2009 the Company announced it had entered into a memorandum of understanding ( MoU ) with Aridtec Pte Ltd ( Aridtec ) and its various shareholders ( Aridtec Vendors ) pursuant to which the Company agreed to purchase all the shares in Aridtec ( Acquisition ) for the issue of 63,000,000 Shares to the Aridtec Vendors on completion and up to a further 99,000,000 Shares depending on the achievement by Aridtec of specified profit milestones.

At 30 June 2009 the Company had cash at bank of approximately $1,257.000. Since then, despite efforts to control costs (a large portion of which is comprised of fixed overheads) the Company's cash reserves have significantly diminished. At 31 December 2009 the Company had cash at bank of approximately $402,000. The Board attributes this reduction in cash to the competitive market place in which the Company operates where it is competing against significantly larger competitors such as Coca Cola Amatil Ltd (being the largest supplier of bottled water in Australia).

Given the competitive market in which it operates, the Company is of the view that attempting to expand its current business (by acquisition or otherwise) will be a difficult and lengthy process. The Company is therefore focusing its efforts on identifying acquisition opportunities that complement the Company's existing business without merely being an extension of the Company's existing business. The business of Aridtec meets this criteria. Aridtec is a private company incorporated in Singapore and engaged in the provision of portable atmospheric water harvesting equipment for harvesting, storage, transport and distribution of drinking water. It is the parent company of AirQua International Pte Ltd ( AirQua ).

Please refer to pages 11 to 18 (inclusive) of the Independent Expert's Report prepared by Anquan Securities & Investments Pty Ltd in Schedule 3 for further details of Aridtec and its' business.

The Company has endeavoured to negotiate an acquisition based on deferred payments where there is an initial payment of consideration (to be made via the issue of Shares) and with a deferred consideration payment (again through the issue of Shares) to be based upon the profit performance of Aridtec following completion of the Acquisition.

The terms of the Acquisition have not essentially changed since the MoU was announced in September 2009. However, in preparing the formal share sale agreement based on the MoU the Company has been able to negotiate the issue of a lesser number of Shares to the Aridtec Vendors as consideration by utilising a different mechanism for the calculation of the number of Deferred Shares (which

303971_6_Notice of Meeting - Refresh Group Limited

Explanatory Memorandum

includes a lower cap on the maximum number of Deferred Shares to be issued). This is due to the fact that sales revenue of Aridtec since the Acquisition was announced have not achieved expected targets and as such the Company has been able to reduce the level of consideration it is paying for the Acquisition.

The result of the reduced Share consideration is that no one Aridtec Vendor following completion of the Acquisition will hold more than 20% of the issued share capital of the Company. As a result no-one shareholder will be able to control the Company.

The Company (as purchaser) and the Aridtec Vendors have entered into a formal share sale agreement dated 20 April 2010 ( Aridtec Agreement ) whereby the Company has agreed to purchase all of the shares in Aridtec. The Aridtec Agreement provides for the issue of 71,800,000 Consideration Shares and up to 48,200,000 Deferred Shares as consideration for the Acquisition (as opposed to 63,000,000 Consideration Shares and up to 99,000,000 Deferred Shares as originally contemplated in the MoU).

The Acquisition will increase the fixed corporate overheads of the Company however it is hoped that the new aggregate fixed corporate overheads (of the enlarged group) will only increase by approximately 20%. It is envisaged some of the current corporate overheads incurred by the Company will be utilised in Aridtec sales.

The Company has been selling Aridtec products in Australia since July 2009. Based on sales achieved to date, the Board is confident that the Aridtec products will be complementary to the Company's existing products and it should be able to successfully market the combined products.

1.2 Share Sale Agreement

The Company is proposing to acquire Aridtec pursuant to the Aridtec Agreement, the material terms of which are as follows:

(a) Consideration

The Company will issue to the Aridtec Vendors 71,800,000 Consideration Shares on completion of the Aridtec Agreement and up to 48,200,000 Deferred Shares approximately 15 months after completion depending on the profit performance of Aridtec.

The number of Deferred Shares to be issued will be calculated accordingly to the following formula:

No. of Deferred Shares = (8 x Profit) – 71,800,00 $0.065

where "Profit" is the aggregate profits (less any losses) of Aridtec and AirQua as shown in Singaporean dollars in the audited consolidated financial statements of Aridtec and AirQua for the year ending 30 June 2011 before deducting tax converted into Australia dollars by applying the average of the spot rates of exchange of National Australian Bank Limited for buying and selling at or about 11.00am on 1 July 2011.

The maximum amount of Deferred Shares that may be issued is 48,200,000.

The table below shows the number of Deferred Shares which will be issued to Aridtec Vendors by applying the above calculation to certain indicative levels of Profit:

Explanatory Memorandum

Profit	Deferred Shares to be issued to the Aridtec Vendors	Cumulative total Shares (including Completion Shares) issued to the Aridtec Vendors
Profit of $583,375 or below	Nil	71,800,000
Profit of $600,000	2,046,154	73,846,154
Profit of $700,000	14,353,846	86,153,846
Profit of $800,000	26,661,538	98,461,538
Profit of $900,000	38,969,231	110,769,231
Profit of $975,000 or greater	48,200,000	120,000,000

(b) Condition Precedent

The acquisition of Aridtec is conditional on the Company's Shareholders passing all the resolutions required under ASX Listing Rules and the Corporations Act to give effect to the acquisition of Aridtec and the issue of the Consideration Shares and the Deferred Shares.

The condition is condition precedent. If it is not fulfilled the Aridtec Agreement does not have any effect and the acquisition of Aridtec will not happen.

(c) Warranties

The Aridtec Vendors provide warranties to Refresh including in respect of, amongst other things:

(i) the latest accounts of Aridtec as at 31 December 2009, the latest management accounts of Aridtec as at 31 March 2010 and the taxation affairs of Aridtec;
(ii) the title of Aridtec to its principal assets including its intellectual property rights;
(iii) the future turnover and profit forecasts of Aridtec;
(iv) any litigation in which Aridtec is involved including any alleged infringement of or challenge to its or any third parties intellectual property rights; and
(v) the Aridtec Vendors' title to the shares in Aridtec.
(d) Escrow

The Aridtec Vendors have voluntarily agreed to escrow the Consideration Shares and the Deferred Shares for one year from issue.

Explanatory Memorandum

(e)

Completion

If Shareholder approval is obtained (pursuant to the passing of Resolution 1) the completion of the Aridtec Agreement (and therefore the acquisition of Aridtec) will occur as soon as possible following the Meeting.

1.3 Effect of Acquisition on Capital Structure of the Company

The following table shows the Company's current capital structure and the possible capital structure after the completion of the acquisition of Aridtec and the issue of shares to Mr Por (refer to Resolution 2).

	Shares	Options
Current Securities on issue	68,206,849	23,875,616
Securities to be issued to Aridtec Vendors	120,000,000(1)	-
Securities to be issued to Mr Por	7,692,308	-
Total	195,899,157(2)	23,875,616(2)

(1) This is the maximum amount of Shares that may be issued to the Aridtec Vendors under the Aridtec Agreement ie if the maximum amount of 48,200,000 Deferred Shares are issued to the Aridtec Vendors.
(2) Assuming that no options are exercised prior to the issue of the Consideration Shares and the Deferred Shares to the Aridtec Vendors and the 7,692,308 Shares to Mr Por (refer to Resolution 2).

1.4 Effect of Acquisition on the Company

A balance sheet of the Company as at 31 December 2009 and a pro-forma balance sheet showing the effect of the acquisition of Aridtec are in Schedule 1.

1.5 Independent Expert Report

To assist the Directors in determining whether the Acquisition is in the best interests of the Company and the Shareholders the Directors have obtained independent advice on the Acquisition.

The Company engaged Anquan Securities & Investments Pty Ltd ( Anquan ) to provide independent expert advice as to whether the consideration to be paid by the Company is fair and reasonable.

Anquan is of the view that the consideration for the purchase of Aridtec is fair and reasonable. A copy of Anquan's independent expert's report is in Schedule 3.

1.6 The interests of the Directors in Resolution 1

None of the Directors have an interest in Aridtec.

1.7 Advantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on Resolution 1:

Explanatory Memorandum

(a) the Company has entered into a subscription agreement with Mr Yong Wei Por which is subject to completion of the Acquisition (refer to Resolution 2). Once the Acquisition is complete the Company will receive $500,000 from Mr Por for the issue of Shares to him. These funds will be utilised for working capital purposes;
(b) the Acquisition will provide the Company with an increased revenue base to support the enlarged group's corporate expenses;
(c) the Board has explored and considered a number of alternative strategies and potential acquisition opportunities over the last three years and have determined that the Acquisition is the best opportunity available to the Company;
(d) an expanded base of Shareholders will potentially increase the liquidity of the Shares; and
(e) Aridtec is at an early stage of its business life cycle and its projections include significant revenue and profit growth. If Aridtec achieves or exceeds these projections the value of Aridtec, and by extension, the Company may increase.

1.8 Disadvantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote on Resolution 1:

(a) should the Acquisition be completed, the existing Shareholders will initially have their voting powers reduced from 100% to 49% following the issue of the Consideration Shares and reduced further from 49% to as low as 44% following the issue of the Deferred Shares. As such, the ability of the existing Shareholders to influence decisions, including with regard to the composition of the Board, will be reduced accordingly;
(b) following the issue of the Consideration Shares and the Deferred Shares, Mr Mun Yew Chan (being one of the Arditec Vendors) will be the single largest shareholder of the Company and could hold up to 19.6% of the Company. In this scenario, Mr Chan may have the ability to significantly influence the Company;
(c) following the Acquisition, the Company will have a significant portion of its revenues derived from international sales and costs denominated in Singapore dollars. Accordingly, the Company is likely to be exposed to risks associated with exchange fluctuations;
(d) for financial reporting purposes, the Company will recognise significant intangible asset balances arising from the acquisition of Aridtec. In accordance with Australian Accounting Standards, intangible assets are subject to amortisation and impairment review. If the Board determines that any intangible asset balances associated with the acquisition of Aridtec are impaired, the impairment adjustments will have a negative impact on the Company's earnings and ability to pay dividends; and
(e) any potential future dividends of the Company that have been derived from the Singaporean operations of Aridtec are unlikely to be accompanied by franking credits. This will have tax consequences to individual Shareholders.

Explanatory Memorandum

1.9 Director's recommendation

Based on the information available, including that contained in this Explanatory Memorandum, all of the Directors consider that Resolution 1 is in the best interests of the Company and recommend that Shareholders vote in favour of Resolution 1.

2. RESOLUTION 1 – Approve Acquisition of Aridtec Pte Limited and Issue of Consideration Shares

2.1 General

Resolution 1 seeks:

(a) Shareholder approval pursuant to Listing Rule 7.1 for the allotment and issue of 71,800,000 Consideration Shares to the Aridtec Vendors; and
(b) Shareholder approval under Listing Rule 11.1.2 to change the scale of the Company's activities.

2.2 Listing Rule 7.1

Listing Rule 7.1 requires Shareholder approval for the issue of the Consideration Shares to the Aridtec Vendors. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

Given the issue of the Consideration Shares will exceed this 15% threshold and none of the exceptions in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.3.

2.3 Specific Information required by Listing Rule 7.3

For the purposes of Listing Rule 7.3, information regarding the issue of the Shares to the Aridtec Vendors is provided as follows:

(a) The maximum number of securities the Company intends to issue is 71,800,000 Shares.
(b) The Company will allot and issue the Consideration Shares as soon as reasonably practicable following the Meeting and in any event no later that three months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).
(c) The Consideration Shares will be issued at a price of $0.065 per Share.
(d) The Consideration Shares will be allotted to the Aridtec Vendors.
(e) The Consideration Shares to be issued are fully paid ordinary shares ranking equally with the Company's current Shares.
(f) No funds will be raised from the issue of the Consideration Shares.
(g) A voting exclusion statement is included in the Notice.

Explanatory Memorandum

2.4 Listing Rule 11.1 Requirements

Chapter 11 of the Listing Rules requires Shareholders to approve any significant change in the nature or scale of a company's activities. The purchase of Aridtec by the Company will have the effect of increasing the scale of the Company's activities.

Resolution 1 seeks Shareholder approval to allow the Company to purchase Aridtec thereby increasing the scale of its activities (not its nature).

Where a Company seeks to change the scale of its activities, it must:

(a) under Listing Rule 11.1.1, notify ASX of the proposed change;
(b) under Listing Rule 11.1.2, obtain Shareholder approval to undertake the change; and
(c) under Listing Rule 11.1.3, meet the requirements of Chapters 1 and 2 of the Listing Rules as if the Company was applying for admission to the official list of ASX, if required by ASX. The ASX has confirmed that the Company does not need to re-comply with the requirements of chapters 1 and 2 of the Listing Rules.

See section 1 of this Explanatory Memorandum for further information on the purchase of Aridtec and the likely affect that the Acquisition will have on the Company.

A voting exclusion statement is included in the notice.

3. RESOLUTION 2 – Issue of Deferred Shares

3.1 General

Resolution 2 seeks Shareholder approval pursuant to Listing Rule 7.1 for the allotment and issue of up to 48,200,000 Deferred Shares to the Aridtec Vendors.

3.2 Listing Rule 7.1

Listing Rule 7.1 requires Shareholder approval for the issue of the Deferred Shares to the Aridtec Vendors. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

Given the issue of the Deferred Shares will exceed this 15% threshold and none of the exceptions in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.3.

3.3 Specific Information required by Listing Rule 7.3

For the purposes of Listing Rule 7.3, information regarding the issue of the Shares to the Aridtec Vendors is provided as follows:

(a) The maximum number of securities the Company intends to issue is 48,200,000 Shares.

Explanatory Memorandum

(b) The Company will allot and issue the Deferred Shares no later than 1 November 2011 (or such longer period of time as ASX may in its discretion allow).
(c) The Deferred Shares will be issued at a price of $0.065 per Share.
(d) The Deferred Shares will be allotted to the Aridtec Vendors.
(e) The Deferred Shares to be issued are fully paid ordinary shares ranking equally with the Company's current Shares.
(f) No funds will be raised from the issue of the Deferred Shares.
(g) A voting exclusion statement is included in the Notice.

3.4 Deferred Shares and ASX Waiver

Listing Rule 7.3.2 provides that the Notice of Meeting to approve the issue of securities under Listing Rule 7.1 must include the date by which the Company will issue the securities which must not be more than 3 months after the date of the Meeting. Under the Aridtec Agreement the Deferred Shares will be issued more than 3 months after the date of the Meeting so accordingly the Company has written to ASX seeking a waiver of Listing Rule 7.3.2 to the extent necessary to enable it to issue the Deferred Shares in Resolution 2 in the Notice of Meeting later than 3 months after the Meeting on the conditions that:

(a) the Deferred Shares are issued no later than 1 November 2011; and
(b) the Company immediately releases the terms of the waiver to the ASX.

At the date of the notice of meeting ASX has yet to consider and approve the waiver of Listing Rule 7.3.2 to the extent necessary to enable the Company to issue the Deferred Shares in Resolution 2. The issue of the Deferred Shares in Resolution 2 is therefore subject to ASX approval.

4. RESOLUTION 3 – Issue of New Shares to Mr Yong Wei Por

4.1 General

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.1 for the allotment and issue of 7,692,308 Shares to Mr Yong Wei Por at an issue price of $0.065 each.

The issue of the Shares to Mr Por will raise approximately $500,000 which will be used for working capital purposes.

Mr Por has agreed to accept the placement of the Shares on the condition that the Company proceeds with the Acquisition.

Shareholder approval of the issue of the Shares to Mr Por means that the Company's 15% placement capacity under Listing Rule 7.1 will not be reduced.

Resolution 3 is an ordinary resolution.

Explanatory Memorandum

4.2 Specific information required by Listing Rule 7.3

For the purposes of Listing Rule 7.3, information regarding the issue of the Shares to Mr Por is provided as follows:

(a) The maximum number of securities the Company intends to issue is 7,892,308 Shares.
(b) the Company will allot and issue the Shares as soon as reasonably practicable following the Meeting and in any event no later that three months after the date of the Meeting (or such longer period of time as ASX may in its discretion allow).
(c) The Shares will be issued at a price of $0.065 per Share.
(d) The Shares will be allotted to Mr Yong Wei Por.
(e) The Shares to be issued are fully paid ordinary shares ranking equally with the Company's current Shares.
(f) The funds raised from the issue of the Shares will be used for working capital.
(g) A voting exclusion statement is included in the Notice.

Explanatory Memorandum

Schedule 1 - GLOSSARY

In this Notice of Meeting and Explanatory Memorandum, the following terms have the following meanings unless the context otherwise requires:

Acquisition means the purchase by the Company of 100% of the issued capital in Aridtec under the Aridtec Agreement.

Aridtec means Aridtec Pte Ltd a company incorporated in the Republic of Singapore under registration number 200721828E of 514 Chai Chee Lane # 05-01 Singapore 469029.

Aridtec Agreement has the meaning in section 1.1 of the Explanatory Memorandum.

Aridtec Vendors means Mr Mun Yew Chan, Mr Chee Keong Oh, Ms Sin Hui Teo, Mr Keith King Lien Ng, Ms Brenda Kah Yah Lee, Mr Edward Lim, Mr Yuen Heng Loh and Ms Xiaofei Sun.

ASX means ASX Limited (ABN 98 008 624 691) and where the content permits, trading as the Australian Securities Exchange operated by ASX Limited.

Board means the Board of Directors.

Business Day means a day on which the ASX is open for trading.

Company means Refresh Group Limited (ACN 079 681 244).

Consideration Shares means 71,800,000 Shares to be issued to the Aridtec Vendors on completion of the Aridtec Agreement.

Constitution means the constitution of the Company.

Corporations Act means Corporations Act 2001 (Cth).

Deferred Shares means up to 48,200,000 shares in Refresh to be issued to the Aridtec Vendors on a deferred basis if Aridtec achieves a profit.

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum to the Notice.

Listing Rules means the listing rules of ASX.

MoU means the memorandum of understanding between the Company, Aridtec and the Aridtec Vendors.

Notice means this general meeting notice which accompanies this Explanatory Memorandum.

Proxy Form means the proxy form attached to the Notice.

Refresh means Refresh Group Limited (ACN 079 681 244).

Resolution means a resolution referred to in this Notice.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a shareholder of the Company.

WST means Western Standard Time being the time in Perth, Western Australia.

In this Notice, words importing the singular include the plural and vice versa.

Explanatory Memorandum

Schedule 2 – Balance Sheet and Pro Forma

Below is a balance sheet of the Company as at 31 December 2009 and a proforma balance sheet showing the effect of the Acquisition:

Company $'000 402 758 940	Aridtec $'000 207 12 248	Consolidated $'000 609 770 1,188
2,100	467	2,567
1 2,084 1,066	25 86 -	26 2,170 1,066
3,151	111	3,262
5,251	578	5,829
587 67 93	60 242 -	647 309 93
747	302	1,049
50 34	- -	50 34
84	-	84
831	302	1,133
4,420	276	4,696

Notes:

Note 1: The pro forma consolidation above is for illustrative purposes only and has been provided by Refresh.
Note 2: Exchange rate of SGD1:AUD0.78
Note 3: The pro forma consolidated net asset position set above is not in accordance with Australian Accounting Standards. In particular we note that it does not reflect the intangible assets that may arise upon the acquisition as required under AASB3: Business Combinations or the impairment of any assets.

Schedule 3

REFRESH GROUP LIMITED

INDEPENDENT EXPERT’S REPORT

Independent Expert’s Report in relation to the Proposed Acquisition of AridTec Pte Ltd

Anquan Securities & Investments Pty Ltd

ACN 110 803 659

AFSL No 291653

19 May 2010

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

19 May 2010

The Directors Refresh Group Limited 17 Denninup Way MALAGA WA 6090

Dear Directors

INDEPENDENT EXPERT’S REPORT – PROPOSED ACQUISITION OF ARIDTEC PTE LTD

Introduction and Purpose of the Report

Anquan Securities & Investments Pty Ltd (“Anquan”) has been engaged by the directors of Refresh Group Limited (“Refresh” or the “Company”) to provide an Independent Expert’s Report (“IER” or the “Report”) to accompany a Notice of General Meeting and Explanatory Memorandum to be dated on or about 25 May 2010 to be sent to shareholders of Refresh for voting in connection with the purpose of acquisition of AridTec Pte Ltd (“AridTec”) (the “Proposed Transaction”).

The details of the Proposed Transaction are described further in Section 2 to the Report.

The Report forms part of the Explanatory Memorandum that will be provided to the shareholders of Refresh. We have prepared the Report in accordance with the requirements of:

ASIC Regulatory Guide 111 Content of Expert Reports ;

ASIC Regulatory Guide 74 Acquisitions Agreed to by Shareholders; and

ASIC Regulatory Guide 112 Independence of Experts .

Summary of Opinion

Our Report has been prepared on a “fairness and reasonableness” basis, assessing whether or not, in our opinion, the Proposed Transaction is fair and reasonable to all shareholders of Refresh.

We have concluded that the Proposed Transaction is Fair and Reasonable to the shareholders of

Refresh.

The principal matters we have taken into consideration in forming our opinion are summarised in the following sections. Therefore our opinion should be read in conjunction with the remainder of this letter and our attached detailed Independent Expert’s Report.

– Refresh Group Limited Independent Expert’s Report - Summary

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Summary of the Proposed Transaction

On 10 August 2009, Refresh announced that it had entered into negotiations to acquire AridTec, a Singapore-based company.

On 3 September 2009, Refresh had signed a Memorandum of Understanding (“MOU”) with AridTec and AridTec’s shareholders acquiring 100% of AridTec’s issued capital. Refresh was going to issue 63,000,000 new Refresh fully paid ordinary shares to the shareholders of AridTec (the “Completion Shares”); and issue of up to 99,000,000 new Refresh fully paid ordinary shares to the current shareholders of AridTec contingent upon AridTec achieving certain profit milestones for the first year of operation post acquisition (the “Deferred Shares”). This MOU has been terminated and has lapsed.

On 20 April 2010, a formal Share Sale and Purchase Agreement (“S&P Agreement”) has been entered into between Refresh, AridTec and AridTec shareholders for the Proposed Transaction. Based on the S&P Agreement, Refresh will issue 71,800,000 new Refresh fully paid ordinary shares at $0.065 per share as the Completion Shares. In addition, Refresh will also issue Deferred Shares. The amount of the – Deferred Shares will be calculated according to the formula: (8 X Profit) / $0.065 71,800,000 Completion Shares. The maximum number of Deferred Shares that may be issued is 48,200,000. Please refer to Appendix F Glossary of Terms for the definition of Profit. Escrow restrictions will apply for at least one year from the completion of the Proposed Transaction for the Completion Shares and one year from the date of issue of the Deferred Shares as imposed on AridTec’s shareholders by the ASX.

Refresh is an ASX-listed company engaged in the production and distribution of distilled drinking water, throughout Australia, with factories in Perth, Kalgoorlie, Sydney, Melbourne, Brisbane and Toowoomba.

AridTec is a private company incorporated in Singapore and engaged in the provision of potable atmospheric water harvesting equipment for harvesting, storage, transport and distribution of drinking water.

A more detailed discussion of the Proposed Transaction is set out in Section 2 to the Report.

Terms used in this summary have the same meaning as defined in the body of the Report.

Basis of Evaluation

Our evaluation of the Proposed Transaction and the conclusions drawn from our analysis has been made primarily with reference to ASIC RG111 and ASIC RG 74.

A more detailed discussion on the Basis of Evaluation is set out in Section 3 to the Report.

Evaluation of Proposed Transaction

Assessment as to Fairness

Control Premium

We are required by ASIC RG 111 to consider the fairness of the Proposed Transaction. Investment fundamentals dictate that the value of 100% of a company is normally greater than the sum of values attributable to the individual shares of that company based on transactions in minority shareholdings.

– Refresh Group Limited Independent Expert’s Report - Summary

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The difference between the value of 100% of a company and the total of the value of minority shareholdings is referred to as a ‘premium for control’ taking into account synergistic benefits for the acquirer. Control of a company by a shareholder gives that shareholder rights to which minority shareholders are not entitled, including amongst other things, control of the company’s policies and strategies, use of cash flows of the company and payment of dividends.

Control is defined under AASB 127 Consolidated and Separate Financial Statements as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The level of premium for control paid in a takeover bid will vary across industries and is dependent upon the specifics of the company being acquired.

In considering the issue of control premium for the Proposed Transaction, we have been advised the current eight AridTec shareholders are totally independent and are not related. We have also been advised that there are no substantial and major shareholders common to both Refresh and AridTec.

Since neither any Refresh shareholder nor AridTec shareholder will control either the board of directors of Refresh or the shareholders of Refresh there is no control premium. All individual AridTec shareholders as well as the existing Refresh shareholders will hold a minority interest that is less than 20% of the proposed post transaction share capital of Refresh, once the Proposed Transaction is completed.

We have also been advised that an AridTec nominee will be appointed to the Refresh board of directors. Hence, there is no control of the board of Directors.

We have therefore not included any control premium in our assessment of fair value as no shareholder shall control Refresh upon completion of the Proposed Transaction .

Other Matters

We have therefore considered the liquidity of Refresh shares; recent share market prices; recent Placement of shares and options via capital raisings; and the value of shares pre and post acquisition.

Share Liquidity and Average Market Share Prices

As mentioned in Section 4.9 to the Report, based on the historical share sales volume, we note that shares sales of Refresh were relatively stable for the last 18 months in terms of the number of shares sales over the total number of shares on issue. This provides further basis and evidence that the average market share prices should reflect the value of Refresh shares proposed to be issued.

The average market share prices of Refresh shares were relatively stable for the last 18 months except for several months from December 2008 to June 2009 as a consequence special considerations (please refer to Section 4.9 for details). The average market share price including those exceptional months was $0.063 which is 3% less than the value of the proposed consideration. The average market share price excluding those exceptional months was $0.073, which is relatively higher than the value of the proposed consideration.

– Refresh Group Limited Independent Expert’s Report - Summary

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Recent Market Share Prices

The last trading share price of Refresh prior to the initial announcement of the Proposed Transaction on 10 August 2009 was $0.065. Subsequent to the announcement of the Proposed Transaction on 10 August 2009, the share prices of Refresh have generally traded stably from $0.055 to $0.075. This reflects investor perceptions that the fair value of the Proposed Transaction is on or about $0.065.

Additionally there has been little change or fluctuation in the share price of Refresh since the latest announcement to the ASX on 20 April 2010.

Recent Placement of Shares and Options via Capital Raisings

We understand that 7,692,308 new Refresh fully paid ordinary shares at $0.065 per share will be issued to Yong Wei Por via Placement shares subject to the Proposed Transaction, as announced to the ASX on 22 April 2010. We confirm that the funds have been received by Refresh from Mr Por.

The issued price of share issued as a consequence of capital raisings for the last 18 months ranged from $0.05 to $0.07 (Please refer to Table 7 in Section 4.9 for details). These share prices are the same or close to the value ascribed to the consideration in the Proposed Transaction.

All options that have been issued during the last 18 months have an exercise price at or above $0.065 per option (Please refer to Table 5 in Section 4.8 for details).

– Comparison Value of Share Pre Acquisition vs. Value of Share Post Acquisition

We have used figures based upon management accounts as of 31 March 2010 for the comparison purposes.

	Pre Acquisition 31 Mar 2010 $	Post Acquisition 31 Mar 2010 $
Net assets(i),(ii)	4,548,100	9,215,000
Number of shares(iii)	68,206,849	140,006,849
Value of share	0.066	0.066

(i) Pre acquisition net assets were based on the net assets of Refresh as at 31 March 2010.
(ii) Post acquisition net assets were based on the combined net assets of Refresh and AridTec plus the adjustment on intangible assets as a result of the Proposed Transaction.
(iii) Number of shares for post acquisition is the current number of shares as at 31 March 2010 plus 71,800,000 being the number of shares that will be issued based on the Completion Shares at a price of $0.065. The above numbers do not take into consideration the Deferred Shares which are conditional and subject to specific milestones and performance and Placement shares subject to the Proposed Transaction at a price of $0.065.

– Refresh Group Limited Independent Expert’s Report - Summary

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As demonstrated, we consider that the shareholders of Refresh will not be disadvantaged after the Proposed Transaction.

Accordingly, the issue price of the shares has shown that the Proposed Transaction is fair. All the other aspects mentioned above showed that $0.065 is the same or close to the value of share of Refresh and Refresh shareholders will not be disadvantaged after the Proposed Transaction. Therefore, we consider that the Proposed Transaction is fair.

Assessment as to Reasonableness

Pursuant to ASIC RG 111, an offer may be reasonable after considering other significant factors such as advantages and disadvantages, should shareholders approve the Proposed Transaction.

We have considered the advantages and disadvantages of the Proposed Transactions from Refresh shareholders perspective. Some of the advantages and disadvantages of the Proposed Transaction, which are not exhaustive, considered by us, are detailed below:

Advantages

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Additional funds for operation through share Placement;
Potential growth;
Potential new markets;
Product diversification and distribution network;
Potential lower acquisition costs;
Potential for dual listing if considered appropriate by the Board;
Potential dividends; and
Other potential benefits such as risk diversification, products benefits/knowledge/technology sharing, liquidity of shares after escrow period and economics of scale.

Disadvantages

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Acquisition of small and start-up business of further loss making entity;
Dilution on voting powers;
Significant influence by various AridTec shareholders;
Consequences to utilise the accumulated Australian income tax losses;
Exposure to exchange rate risk;
Potential negative impact on performance and dividends by amortisation and impairment;
Reduction of Australian franking credits; and
Patent risk.

– Refresh Group Limited Independent Expert’s Report - Summary

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Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Likely Advantages Associated with the Proposed Transaction

If the Proposed Transaction goes ahead, the additional advantages include:

Economies of Scale

Refresh is currently a loss making group. Refresh is not expecting to be profitable as a group for the year ending 30 June 2010.

AridTec is expected to experience growing revenues, though it is still expected to be a loss making entity for the year ending 30 June 2010. If AridTec performs in accordance with its management’s expectations then, as a result of the Proposed Transaction amongst other things, fixed corporate overheads as a percentage of total revenue of the enlarged group should decrease and together with the expected increase, ultimately the expanded Refresh group should achieve profitability at an earlier date.

Growth Potential of AridTec

AridTec is at an early stage of its business life cycle. AridTec’s projections include significant revenue and profit growth based upon management assumptions. Some of these assumptions are extremely difficult to quantity and obtain satisfactory verification of the assumptions. If AridTec achieves or exceeds its management projections, the value of AridTec may increase to a level in excess of our assessed value.

AridTec will also expand the Group into new international markets. Currently, Refresh operates solely in Australia. The potential revenue growth of AridTec is projected to be substantial.

Conclusion

In formulating our conclusions on the Proposed Transaction, we have considered and evaluated a number of alternative methods to value the Proposed Transaction.

Our analysis and evaluation focused on assessing whether or not in our opinion the Proposed Transaction is fair and reasonable to the Refresh shareholders after weighing up the advantages and disadvantages of the Proposed Transaction and the proposed issue price of the Refresh shares.

In our opinion, the Proposed Transaction is fair and reasonable as the Refresh value consideration is in line with the value of AridTec in various aspects when taking into account the Completion Shares and the possibility of issuing the Deferred Shares. Also, the Refresh shareholders will not be disadvantaged based on the same value of shares pre and post the Proposed Transaction.

In addition, in our opinion, the advantages that have been outlined by us outweigh the disadvantages that we have considered.

We note that this conclusion is consistent with the view of all the directors of Refresh that the Proposed Transaction represents fair consideration for the increase of long term intrinsic value of Refresh shareholders.

– Refresh Group Limited Independent Expert’s Report - Summary

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Other Matters

An individual shareholder’s decision in relation to the Proposed Transaction may be influenced by his or her particular circumstances. In undertaking our assessment, we have considered the impact of the Proposed Transaction on shareholders of Refresh as a whole. We have not considered the effect of the Proposed Transaction on the particular circumstances of individual shareholders nor have we considered their individual objects, financial situation or needs.

Individual shareholders will have varying financial and tax circumstances and it is not practical or possible to consider the implications of the Proposed Transaction on individual shareholders, as their respective financial circumstances are not known to us. Due to particular circumstances, individual shareholder may place different emphasis on various aspects of the Proposed Transaction from the one adopted in the Independent Expert’s Report. Accordingly, individual shareholders may reach different conclusions as to whether they should approve the Proposed Transaction. We recommend that individual shareholders should seek their own financial advice prior to voting on the Proposed Transaction.

Financial Services Guide

We have included our Financial Services Guide at Appendix C to our Report. The Financial Services Guide is designed to assist retail clients in their use of any general financial product advice in our Report.

Yours faithfully

Anquan Securities & Investments Pty Ltd

==> picture [104 x 52] intentionally omitted <==

Richard Lambe Director

– Refresh Group Limited Independent Expert’s Report - Summary

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

INDEPENDENT EXPERT’S REPORT

Prepared for the Directors of Refresh Group Limited

30 April 2010

1.	INTRODUCTION AND PURPOSE OF REPORT		1 - 2
1.1.	Introduction		1
1.2.	Purpose of Report		1
1.3.	Sources of Information		1
1.4.	Limitations and Reliance on Information		1
1.5.	Scope Exclusions		2
1.6.	Other Matters		2
2.	PROPOSED TRANSACTION	2– 3
3.	BASIS OF EVALUATION	3– 4
4.	PROFILE OF REFRESH GROUP LIMITED	4	– 11
4.1.	Introduction		4
4.2.	Group Structure		4
4.3.	Products and Services		5
4.4.	Industry		6
4.5.	Review of Financial Performance	6–7
4.6.	Review of Financial Position		7
4.7.	Review of Cash Flows		8
4.8.	Capital Structure and Shareholders		9
4.9.	Historical Share Prices and Liquidity	10 -11

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Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

5.	PROFILE OF ARIDTEC PTE LTD	11 -18
5.1.	Introduction	11
5.2.	Corporate Structure	12
5.3.	Products and Services	12–13
5.4.	Market and Distribution	13
5.5.	Intellectual Property	14
5.6.	Industry	14
5.7.	Review of Financial Performance	15
5.8.	Review of Financial Position	16
5.9.	Review of Cash Flows	17
5.10.	Capital Structure and Shareholders	18
6.	POST ACQUISITION	18– 20
6.1.	Pro Forma Group Structure	18
6.2.	Pro Forma Consolidated Financial Position	19
6.3.	Pro Forma Capital Structure	20
7.	EVALUATION OF PROPOSED TRANSACTION	20– 29
7.1.	Introduction	20–21
7.2.	Control Premium	21–22
7.3.	Assessment as to Fairness	22–24
7.4.	Assessment as to Reasonableness	24–26
7.5.	Valuation of Refresh	27
7.6.	Valuation of AridTec	27–29
8.	CONCLUSION	29

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APPENDICES

Appendix A - Industry

Appendix B - Valuation Methodologies Appendix C - Financial Services Guide Appendix D - Sources of Information Appendix E - Qualifications, Disclaimers and Consents

Appendix F - Glossary of Terms

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Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

1. INTRODUCTION AND PURPOSE OF REPORT

1.1 Introduction

Anquan Securities & Investments Pty Ltd (“Anquan”) has been engaged by the directors of Refresh Group Limited (“Refresh”) to provide an Independent Expert’s Report (“IER” or the “Report”) for the purpose of assisting the shareholders of Refresh for voting at the General Meeting, in connection with the acquisition of AridTec Pte Ltd (“AridTec”) (the “Proposed Transaction”).

The details of the Proposed Transaction are described further in Section 2 to the Report.

1.2. Purpose of Report

The directors of Refresh have appointed Anquan to prepare this IER addressing whether or not the Proposed Transaction is fair and reasonable to Refresh shareholders. Our approach, assessment criteria and evaluation process are set out in this Report.

Users of this Report should have regard to the Qualifications, Disclaimers and Consents discussed below and contained in Appendix E. All amounts referred to in this Report are Australian dollars unless otherwise stated. Abbreviations and definitions are contained in the Glossary of Terms contained in Appendix F.

1.3. Sources of Information

In compiling this IER, Anquan has had regard to and relied upon public and non-public information set out in Appendix D Sources of Information as well as representations made to us by the directors and management of Refresh.

We have conducted such checks, enquiries and analysis on the information provided to us which we regard as appropriate for the purposes of this Report. Based on this evaluation, we believe that the information used in forming the opinions in the Report are accurate, complete and not misleading and we have no reason to believe that material information relevant to our Report has been withheld by either Refresh or AridTec from us. Whilst our work has involved an analysis of financial information and accounting records, it does not constitute an audit or a review of AridTec or the Proposed Transaction in accordance with generally accepted auditing standards, and accordingly no audit opinion, review opinion or assurances are given in this Report in relation to the financial numbers and data upon which we have relied in the preparation of this Report.

1.4. Limitations and Reliance on Information

Our assessment has been made as at the date of this Report. Economic conditions, market factors and performance changes or additional market information may result in the Report becoming outdated. We reserve the right to review our assessments, and, if we consider necessary we shall issue an addendum to our Report in the light of any relevant material information which subsequently becomes known to us.

– Refresh Group Limited Independent Expert’s Report

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Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

1.5. Scope Exclusions

This Report has been prepared solely and exclusively for the purpose of assisting Refresh shareholders in considering whether to approve resolution number one that supports the Proposed Transaction in the Notice of General Meeting and Explanatory Memorandum to be dated on or about 25 May 2010. This Report has not been prepared to provide information to any other parties considering the purchase or sale of any securities in Refresh. Accordingly, we do not assume any responsibility or liability whatsoever for any losses suffered as a result of the use of this Report other than the existing shareholders of Refresh as at the date of this Report.

Anquan has been advised by Refresh that the Proposed Transaction is subject to ASX Listing Rules 11.1 Significant Transactions, which requires the approval of shareholders. The directors of Refresh have elected to commission an IER in order to provide shareholders with additional independent information prior to voting on the resolution supporting the Proposed Transaction at the General Meeting of Refresh shareholders.

Our approach, assessment criteria and evaluation processes are set out in this Report.

1.6. Other Matters

Individual shareholders will have varying financial and tax circumstances and it is not practical or possible to consider the implications of the Proposed Transaction on individual shareholders as their respective financial circumstances are not known to us. Due to particular circumstances, individual shareholders may place different emphasis on various aspects of the Proposed Transaction from the one adopted in this Report. Accordingly, individual shareholders may reach different conclusions as to whether they should approve the Proposed Transaction. Individual shareholders should seek their own financial advice prior to voting on the Proposed Transaction.

2. PROPOSED TRANSACTION

On 10 August 2009, Refresh announced that it had entered into negotiations to acquire AridTec, a Singapore-based company.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

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3. BASIS OF EVALUATION

ASIC released Regulatory Guide 111 Content of Expert Reports in October 2007. Our evaluation of the Proposed Transaction and the conclusions drawn from our analysis has been made primarily with reference to ASIC RG111 and ASIC RG 74 Acquisitions Agreed to by Shareholders .

RG 111 establishes certain guidelines in respect to independent expert’s reports prepared for the purposes of the Corporations Act. RG 111 also requires the independent expert to determine whether a premium for control is being received by the vendor.

RG 111 states that an offer is considered fair if the value of the offer price or consideration is equal to or greater than the value of securities that are subject of the offer. The comparison should be made assuming 100% ownership of the target company and irrespective of whether the consideration offered is scrip or cash and without consideration of the percentage holding of the offeror or its associates in the target company. In addition, an offer is considered reasonable if it is fair. If the offer is not fair it may still be reasonable after considering other significant factors which justify the acceptance of the offer in the absence of a higher bid.

RG 111 states that in all cases, where an acquisition of shares by way of an allotment is to be approved by shareholders, a report by an independent expert should be presented stating whether or not the Proposed Transaction is fair and reasonable having regard to the interest of shareholders.

RG 74 requires that shareholders approving a resolution pursuant to section 623 of the Corporations Act be provided with a comprehensive analysis of the proposal, including whether or not the proposal is fair and reasonable to the shareholders. RG 74 indicates that all the circumstances of the proposal should be examined. In addition to comparing the value of the shares to be acquired under the proposal and the value of the consideration to be paid, the likely advantages and disadvantages for the shareholders if the proposal is agreed to must be compared with the advantages and disadvantages to the shareholders if it is not.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

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The following, amongst other issues, have been considered when determining whether the Proposed Transaction is fair and reasonable to Refresh shareholders:

a) The value of consideration;
b) The value of shares of Refresh;
c) The listed market prices of Refresh shares prior to and subsequent to the announcement of the Proposed Transaction;
d) Other criteria and assessment relevant to the value of shares of Refresh; and
e) Advantages and disadvantages associated with the Proposed Transaction which are relevant to the Refresh shareholders.

4. PROFILE OF REFRESH GROUP LIMITED

4.1 Introduction

Refresh Group Limited, founded in 1997, is a beverage company which listed on the ASX in March 2006. Refresh’s main business is the production and distribution of bottled water.

4.2. Group Structure

Refresh’s current Group Structure is set out below:

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----- Start of picture text -----

Refresh Group Limited
100%
Refresh Waters Pty Ltd
100%
Refresh Waters Queensland Pty Ltd
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– Refresh Group Limited Independent Expert’s Report

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Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

4.3. Products and Services

4.3.1. Products

Refresh is one of Australia’s largest producers of distilled drinking water with factories in Western Australia, New South Wales, Victoria and Queensland. Refresh Pure Water comes in 5 different package sizes-15-litre, 10-litre, 5-litre, 1.5-litre and 600ml of water.

Refresh also markets another range of bottled water under the brand Oxyfresh . First, Himalayan crystal salt is added to pure water. Next, the water goes through a GIE activator (German Patent) to energise it. It is then passed through an oxygenator, which increases the oxygen content in the water by up to 700%. This process ensures oxygen stays for a longer period in the water and Oxyfresh is marketed as a ‘natural energy drink without sugar’.

4.3.2. Services

Refresh is one of the largest distributors of distillation systems in Australia. Refresh also stocks the widest range of water purifiers in Australia. The range includes sediment and carbon filters, reverse osmosis, distillers and air-to-water generators. These include portable as well as plumbed-in units. The wide variety ensures a drinking water solution to suit every requirement or budget. Distributorships held include AirQua from Singapore, Woongjin Coway from Korea, Durastill and Forever Water from USA, Precision Water Systems from Canada and Megahome from Taiwan.

Distilled water has many commercial applications where a very high level of water purity is required. Such commercial applications include laboratory, commercial and scientific application, Refresh supplies this market in 200-litre and 1,000-litre containers.

Through its bottling plant and equipment, Refresh provides contract bottling and packing for other bottled products. Many companies use bottled water as a promotional product with their own custom-designed labels.

A wide range of hot & cold refrigerated coolers are available for hire and sale. The distilled bottled water industry experiences seasonality in its sales cycle.

==> picture [335 x 179] intentionally omitted <==

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

4.4. Industry

We have set out an overview of the bottled water industry in Australia and Internationally in Appendix A to this Report.

4.5. Review of Financial Performance

The historical financial performance of Refresh for the years ended 30 June 2008 and 2009 (audited), for the six months ended 31 December 2008 and 2009 (reviewed); and nine months ended 31 March 2010 (management accounts) is set out in the table below:

Table 1: Refresh’s Historical Financial Performance

	30 Jun	31 Dec	30 Jun	31 Dec	31 Mar
	2008	2008	2009	2009	2010
	Audited	Reviewed	Audited	Reviewed	Unaudited
	AUD’000	AUD’000	AUD’000	AUD’000	AUD’000
Revenue	5,148.5	2,983.5	5,937.0	2,779.8	4,306.0
Other income	612.9	4.5	0.3	-	1.0
Cost of sales	(1,912.5)	(1,217.6)	(2,308.9)	(1,003.1)	(1,579.1)
Gross profit	3,848.9	1,770.4	3,628.4	1,776.7	2,727.9
Expenses
Advertising expenses	(60.8)	(114.5)	(139.9)	(101.0)	(94.6)
Investment written off	(69.1)	-	-	-	-
Employee benefits expenses	(2,342.8)	(1,131.8)	(2,252.7)	(1,119.7)	(1,665.9)
Professional fees	(113.1)	(54.3)	(113.0)	(44.2)	(70.0)
Occupancy expenses	(345.0)	(204.5)	(435.3)	(240.0)	(384.8)
Other expenses	(724.7)	(466.5)	(913.8)	(410.0)	(563.5)
Total expenses	(3,655.5)	(1,971.6)	(3,854.7)	(1,914.9)	(2,778.8)
EBITDA	193.4	(201.2)	(226.3)	(138.2)	(50.9)
Depreciation and amortisation	(221.0)	(90.7)	(204.8)	(113.5)	(83.2)
EBIT	(27.6)	(291.9)	(431.1)	(251.7)	(134.1)
Finance expenses	(63.2)	(25.1)	(57.1)	-	(11.5)
Profit/(loss)before income tax	(90.8)	(317.0)	(488.2)	(251.7)	(145.6)
Income tax benefit/(expense)	11.8	-	-	-	-
Net profit/(loss) after tax	(79.0)	(317.0)	(488.2)	(251.7)	(145.6)

Source: Refresh Financial Reports, Refresh management

We make the following observations in relation to Refresh’s historical financial performance:

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Increase in revenue from $5,148K for the year ended 30 June 2008 to $5,937K for the year ended 30 June 2009 was mainly because of (i) the commencement of full operation of the Blackwood Gully Spring Water in year 2009 after its acquisition in December 2007; and (ii) the internal development of successful integration of previously merged business from sale of bottled water and services of distillation system.
Increase in net loss after tax of $79K for the year ended 30 June 2008 to $488K for the year ended 30 June 2009 was mainly because of the increase in costs and expenses after the acquisition of Sunshower Springs in July 2007 and Blackwood Gully Spring Water in December 2007.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

==> picture [10 x 14] intentionally omitted <==

Refresh’s other income of $613K for the year ended 30 June 2008 mainly represented gains on sale of property, plant and equipment of $542K, which was a one off type of transaction and would be eliminated if considering future maintainable earnings.

4.6. Review of Financial Position

The historical financial position of Refresh as at 30 June 2008 (audited), 31 December 2008 (reviewed), 30 June 2009 (audited), 31 December 2009 (reviewed) and 31 March 2010 (management accounts) is set out in the table below:

Table 2: Refresh’s Historical Financial Position

	30 Jun	31 Dec	30 Jun	31 Dec	31 Mar
	2008	2008	2009	2009	2010
	Audited	Reviewed	Audited	Reviewed	Unaudited
	AUD’000	AUD’000	AUD’000	AUD’000	AUD’000
Current Assets
Cash and cash equivalents	738.4	288.1	1,256.9	401.8	345.7
Trade and other receivables	670.1	785.7	614.2	758.7	673.2
Inventories	605.3	740.3	777.6	939.7	948.7
Total Current Assets	2,013.8	1,814.1	2,648.7	2,100.2	1,967.6
Non-Current Assets
Property, plant and equipment	1,997.1	2,008.4	2,005.9	2,083.6	2,042.1
Intangible assets	969.7	971.1	971.1	1,066.1	1,066.1
Other assets	1.1	1.1	1.1	1.1	1.1
Total Non Current Assets	2,967.9	2,980.6	2,978.1	3,150.8	3,109.3
Total Assets	4,981.7	4,794.7	5,626.8	5,251.0	5,076.9
Current Liabilities
Trade and other payables	598.2	749.1	1,700.9	587.4	246.3
Financial Liabilities	65.2	67.8	159.2	67.2	99.6
Provisions and accruals	101.6	104.0	86.2	92.7	48.9
Total Current Liabilities	765.0	920.9	1,946.3	747.3	394.8
Non-Current Liabilities
Financial Liabilities	151.8	117.2	81.3	50.1	100.0
Provisions and accruals	17.5	26.2	25.9	34.0	34.0
Total Non-Current liabilities	169.3	143.4	107.2	84.1	134.0
Total Liabilities	934.3	1,064.3	2,053.5	831.4	528.8
Net Assets Attributable to Shareholders	4,047.4	3,730.4	3,573.3	4,419.6	4,548.1

Source: Refresh Financial Reports, Refresh management

We make the following observations in relation to Refresh’s historical financial position:

==> picture [10 x 13] intentionally omitted <==

Significant increase in cash and cash equivalent and trade and other payables as of 30 June 2009 as compared to 30 June 2008, 31 December 2008 and 31 December 2009 was mainly because Refresh has made a non-renounceable Right Issue of 1 new share for every 2 existing shares held by eligible shareholders on 29 May 2009. It was on 13 July 2009 that Refresh allotted 22,486,616 shares at 5 cents to the subscribing shareholders and the balance to the underwriter and sub-underwriter. Therefore, the increase in cash and other payables represented money received in advance for the Right Issue before the allotment in July 2009.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

4.7. Review of Cash Flows

The historical cash flow of Refresh for the years ended 30 June 2008 and 2009 (audited), the six months ended 31 December 2008 and 2009 (reviewed); and the nine months ended 31 March 2010 (management accounts) is set out in the table below:

Table 3: Refresh’s Historical Cash Flow Statements

	30 Jun	31 Dec	30 Jun	31 Dec	31 Mar
	2008	2008	2009	2009	2010
	Audited	Reviewed	Audited	Reviewed	Unaudited
	AUD’000	AUD’000	AUD’000	AUD’000	AUD’000
Cash Flow From Operating Activities
Receipts from customers	4,994.1	3,148.5	5,854.8	2,754.1	4,336.3
Payments to suppliers and employees	(5,388.5)	(3,463.3)	(6,180.2)	(2,931.1)	(4,551.2)
Borrowing costs	(63.2)	(10.1)	(57.1)	(16.6)	(9.6)
Interest receives	37.7	12.3	13.8	6.4	9.7
Net Cash Flows From Operating Activates	(419.9)	(312.6)	(368.7)	(187.2)	(214.8)
Cash Flows From Investing Activates
Proceeds from sale of PPE and investment	2,265.1	7.8	9.3	-	9
Purchase of property, plant and equipment	(307.3)	(113.5)	(244.4)	(141.3)	(183.6)
Loans from director related entity	198.7	-	(24.2)	(174.5)	(174.5)
Purchase of other non-current assets	-	-	(1.4)	-	-
Acquisition of subsidiaries, net of cash	(598.5)	-	-	(150.0)	(150.0)
acquired
Net Cash Flows From Investing Activities	1,558.0	(105.7)	(260.7)	(465.8)	(499.1)
Cash Flows From Financing Activities
Proceeds from borrowings	141.5	2.6	1,589.7	75.2	75.2
Proceeds from issue of shares	-	-	8.0	-	22.4
Proceeds from application of rights issues	-	-	1,124.3	-	-
Share issue expenses	-	-	(8.0)	(79.2)	(78.7)
Repayments of borrowings	(976.7)	(34.6)	(1,566.1)	(198.1)	(216.2)
Net Cash Flows From Financing Activities	(835.2)	(32.0)	1,147.9	(202.0)	(197.3)
Net increase/(decrease) in cash and cash	302.9	(450.3)	518.5	(855.1)	(911.2)
equivalents
Cash and cash equivalents at beginning of	435.5	738.4	738.4	1,256.9	1,256.9
period
Cash and Cash Equivalents at End of	738.4	288.1	1,256.9	401.8	345.7
Period

Source: Refresh Financial Reports, Refresh management

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

4.8. Capital Structure and Shareholders

Refresh has a total of 68,206,849 shares on issue. As at 31 March 2010 the ten largest shareholders were as follows:

Table 4: Refresh - 10 Largest Shareholders - 31 March 2010

Ten Largest Shareholders of Refresh	Ten Largest Shareholders of Refresh
			% of Issued
	Investor	Shares held	Capital
1	Mr Henry Eng Chye Heng & Ms Sok Hwa Ngoh	8,860,700	13.0
2	Mr Edmund Soon Kin Teo & Mrs Janice Teo	6,793,900	10.0
3	Asia Pacific Link (BVI) Pty Ltd	6,532,528	9.6
4	Mr Boon Kheng Ong	6,040,529	8.9
5	Ms Inn Hoon Judy Ong	5,411,550	7.9
6	Ms Ing Cheng Diana Ong	4,851,900	7.1
7	Mr Djuanda Hadi	3,604,550	5.3
8	Mr Eng Huat Ong	2,010,000	2.9
9	Mr Meng Leong Lye	1,500,000	2.2
10	Dr Chee Seng Seah	1,410,000	2.0
	Subtotal	47,015,657	68.9
	Others	21,191,192	31.1
	Total	68,206,849	100

Source: Refresh management

Note: shareholders registry above is based on the most recent beneficial holder tracing report provided by Refresh management.

The ten largest shareholders of Refresh hold approximately 68.9% of Refresh’s issued capital. Refresh have advised that there are approximately 412 shareholders. This illustrates that while there are individuals that hold significant stakes in Refresh, there are also a significant number of small shareholders.

Table 5: Refresh – Options Outstanding

The following table details the options outstanding as at 31 March 2010. We note that all options were issued with an exercise price at or above $0.065 per conversion into ordinary shares.

Issued Date	No of Options Issued	Exercise Price	Expiry Date	Remark

7 July2009	22,485,616	$ 0.10	7 July2010	Free options attachingto Rights Issues
5 October 2009	640,000	$ 0.07	4 October 2010	Directors and Executives Option Scheme
29 March 2010	750,000	$0.065	28 March 2011	Directors and Executives Option Scheme
Total outstanding	23,875,616

Source: Refresh management

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

4.9. Historical Share Price and Liquidity

Table 6: Refresh - Share Price Analysis

Month ended Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09 Aug-09 Jul-09 Jun-09 May-09 Apr-09 Mar-09 Feb-09 Jan-09 Dec-08 Nov-08 Oct-08	High $ 0.07 0.075 0.075 0.06 0.069 0.07 0.07 0.075 0.07 0.065 0.065 0.05 0.05 0.05 0.045 0.05 0.07 0.07 0.06	Low $ 0.055 0.06 0.055 0.05 0.069 0.058 0.06 0.07 0.06 0.05 0.055 0.05 0.045 0.05 0.035 0.035 0.05 0.06 0.06	Close $ 0.07 0.06 0.075 0.06 0.069 0.07 0.07 0.07 0.07 0.065 0.065 0.05 0.045 0.05 0.03 0.035 0.07 0.07 0.06	Average $ 0.062 0.068 0.067 0.066 0.073 0.074 0.071 0.07 0.065 0.067 0.058 0.047 0.046 0.05 0.03 0.044 0.059 0.063 0.06	Monthly Volume (‘000) 595,000 130,000 325,000 1,090,000 12 25,000 502,000 120,000 410,000 50,000 107,045 10,273 32,273 58,000 526,000 362,000 85,000 48,000 3,500	% Shares to Total Issued Shares 0.9% 0.2% 0.5% 1.6% 0% 0% 0.7% 0.2% 0.6% 0% 0.2% 0% 0% 0.1% 1.2% 0.8% 0.2% 0.1% 0%

Source: Refresh management

==> picture [459 x 208] intentionally omitted <==

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Based on the historical share price and sales volume, we note that shares of Refresh were relatively stable for the last 18 months in terms of the number of shares over the total number of shares on issue. The sale price indicates that the average market share price should reflect the current value of Refresh shares.

The average share price of Refresh for the last 18 months was $0.063 except for the months from December 2008 to June 2009. We understand from Refresh management that the lower average share prices during these few months was mainly because two substantial shareholders of Refresh have disposed a larger number of their shares within these months. In certain months, their shares disposal constituted 100% of sales volume of Refresh especially in January 2009 and February 2009 when the share prices dropped significantly.

These shareholders disposed of the shares after Refresh terminated their employment. The two shareholders were the vendors of the Toowoomba business. Acquisition of the business was paid for by the issue of Refresh shares.

After excluding the share prices from December 2008 to June 2009, the average share price of Refresh for the remaining 11 months was $0.073.

Table 7: Refresh – Historical Shares Issued

The following table is the share capital movement of Refresh for the last 18 months. We note that the shares were issued at prices ranging from $0.05 to $0.07 per share for the last 18 months.

Date	Nature	Issued Shares	Issued Shares	Shares
		No	$	No
As at 1 January2008				44,361,233
On 30 June 2009	Shared issued to employees	610,000	0.05	44,971,233
On 13 July 2009	Rights Issue to shareholders and underwriters	22,485,616	0.05	67,456,849
On 1 September 2009	Shares issued to acquire Minnamurra SpringWater	750,000	0.07	68,206,849
As at 31 March 2010		23,845,616		68,206,849

Source: Refresh management

5. PROFILE OF ARIDTEC PTE LTD

5.1. Introduction

AridTec Pte Ltd, established in November 2007, and its wholly-owned subsidiary, AriQua International Pte Ltd (“AriQua”) are Singapore incorporated entities. AirQua is a complete global alternative potable water solution provider specialising in atmospheric water harvesting solutions which draws water vapour from the air and produces drinking water in abundance through its patented technologies. AirQua can provide solutions to the world’s water needs. From the home to the office, the factory floor, farmers, doctors, hospitals, building and construction sites, oil fields, oil rigs and platforms, the military, international aid and rescue organisations, stationary units and/or mobile units; the possibilities are almost endless.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

5.2. Corporate Structure

AirQua is a Singapore based company and is wholly owned by AridTec. All marketing and distribution operations of AridTec reside in AirQua.

==> picture [157 x 110] intentionally omitted <==

----- Start of picture text -----

AridTec Pte Ltd
100%
AirQua International Pte Ltd
----- End of picture text -----

5.3. Products and Services

AridTec produces air-to-water generators. These use a minimal carbon footprint. It has no wasted water, energy or plastic as well as no transportation cost. It is certainly the ultimate green water source. The following are the products:

1. Sano

The Sano is designed to be energy efficient and is equipped with micro-computer and electronic controls to ensure proper and optimum performance. It comes in 3 colours to suit any décor in homes and offices. It has a production capacity of 24 litres per day and a storage capacity of 10 litres.

Certifications: CE, C tick, RoHS compliant

2. CS / CM series

These can easily be deployed to areas like construction and exploration sites that are not convenient to traditional water sources. Also on remote locations, resorts, mining sites and instances where supply of water can affect continuity of business operations.

Production capacity per day Storage tank of	CS 1 120 litres 70 litres	CM 2 250 litres 100 litres	CM 5 550 litres 200 litres

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

3. CL series

These are the larger models that produce up to 5,000 litres per day.

	CL 1	CL3	CL5
Production capacity per day	1,000 litres	3,000 litres	5,000 litres
Storage tank of	380 litres	570 litres	760 litres

4. M series

Instant access to multiple water solutions when and where you need it can be the difference in battlefield supremacy, or life and death matters in disaster struck instances. Committed to becoming a global provider in relief solutions, AirQua line of mobile atmospheric water solutions are designed for rapid deployment worldwide and can be customised for a wide variety of uses.

Model M1 has a production capacity of 120 litres per day and a storage tank of 80 litres with option for an external tank.

Note: Production capacities based on temperature of 30[o] C and relative humidity of 60%

5.4. Markets and Distribution

AridTec’s short-term target is to focus initially on the Middle Eastern, Australian, Asian, and the USA market, providing full coverage of key Middle-Eastern markets. Medium-term targets include coverage of African and other Asian markets, with sub-distributors in these markets engaged by end of 2010.

AridTec has entered into the following distribution agreements for its appliance products, details of which are set out in the table below.

Table 8: AridTec – Distribution Agreements

Distribution Region	Exclusivity	Status
North Greece(EPI)	Exclusive	Already in place
USA(AirQua USA LLC)	Exclusive	Already in place
Maldives(Nalahiya PtyLtd)	Exclusive	Already in place
South Africa(AirQua AirWater SA PtyLtd)	Exclusive	Already in place
Peru(AirQua USA LLC)	Exclusive	Already in place
Australia(Refresh Water PtyLtd)	Exclusive	Already in place
Indonesia	Exclusive	Negotiating
Malaysia	Exclusive	Negotiating
South Greece	Exclusive	Negotiating
Swaziland	Exclusive	Negotiating
Part of India States	Exclusive	Negotiating

Source: Refresh management

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

5.5. Intellectual Property

The intellectual property in AridTec’s technologies is protected in various ways.

AridTec is the owner of Patent P-No. 151140 System and Method for Extracting Atmospheric Water, granted in Singapore on 31 March 2010. The patent portfolio primarily relates to apparatus and methods for transforming water vapor into potable water which includes vapor condensing unit disposed in a closed loop air passage duct that provides a continuous air circulation pattern driven by a ventilating device such as a fan, and a purpose-built AirQua Vapor Enhancer, which improves vapor saturation level by coalescing more moisture in the same given operating environment, while using minimal energy input.

– AridTec has also filed for international patent protection through the Patent Cooperation Treaty (PCT) application no. PCT/SG2008/0002. The countries where patent protection had been sought include most Asian countries (except Thailand and Taiwan), Australia, the European region and USA. In Thailand, AridTec has filed a separate application no. 0801005023.

AridTec owns the “AirQua” trade mark (T08078691) through its subsidiary AirQua International Pte Ltd. AridTec also has copyright protection over materials it produces as part of the operation of its business, including copyright in drawings, manuals, websites, brochures and other written or electronic materials.

Based on the Due Diligence Report for the Proposed Transaction prepared by Judy Ong (one of the shareholders of Refresh) and the patent valuation report prepared by Schweiger & Partners (Singapore) LLP, the value of patent is $4 million.

Some of the important intellectual property and know-how that AridTec owns and/or uses is protected in the form of confidential information or as trade secrets, as it is not able to be protected under registered schemes such as patents and designs.

5.6. Industry

We have set out an overview of the bottled water industry in Australia and Internationally in Appendix A to this Report.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

5.7. Review of Financial Performance

The historical financial performance of AridTec for the 13 months ended 31 December 2008 (audited) and year ended 31 December 2009 (unaudited) and nine months ended 31 March 2010 (management accounts) is set out in the table below both in Singapore and Australian Dollars:

Table 9: AridTec’s Historical Financial Performance

	31 Dec	31 Dec	31 Dec	31 Dec	31 Mar	31 Mar
	2008	2008	2009	2009	2010	2010
	Audited	Audited	Unaudited	Unaudited	Unaudited	Unaudited
	SGD’000	AUD’000	SGD’000	AUD’000	SGD’000	AUD’000
Revenue	438.8	438.8	551.7	438.2	235.9	183.7
Other income	24.3	24.3	-	-	-	-
Cost of sales	(296.3)	(296.3)	(316.1)	(251.1)	(105.8)	(82.4)
Gross profit	166.8	166.8	235.6	187.1	130.1	101.3
Expenses
Distribution costs	(119.8)	(119.8)	(94.1)	(74.7)	(30.0)	(23.4)
Administration costs	(389.9)	(389.9)	(347.0)	(275.6)	(213.1)	(166.0)
Depreciation and asset write-off	(68.8)	(68.8)	(60.0)	(47.7)	(42.3)	(33.6)
Research & Development	(69.7)	(69.7)	(53.1)	(42.2)	(25.2)	(19.6)
Employees benefits	-	-	(206.8)	(164.3)	(141.0)	(109.8)
Director remuneration	-	-	(94.2)	(74.8)	(42.8)	(33.3)
Other expenses	(75.4)	(75.4)	(62.4)	(50.0)	(43.7)	(34.0)
Total expenses	(723.6)	(723.6)	(917.6)	(729.3)	(538.1)	(419.7)
Profit/(loss)before income tax	(556.8)	(556.8)	(682.0)	(542.2)	(408.0)	(318.4)
Income tax benefit/(expense)	-	-	-	-	-	-
Net profit/(loss)	(556.8)	(556.8)	(682.0)	(542.2)	(408.0)	(318.4)
after tax
Exchange Rate	0.9967		1.2589		1.2840

Source: AridTec Financial Reports, Refresh Management

We make the following observations in relation to AridTec’s historical financial performance:

==> picture [10 x 14] intentionally omitted <==

==> picture [10 x 13] intentionally omitted <==

No director remuneration was noted for 13 months ended 31 December 2008 as AridTec was only incorporated on 23 November 2007. $296K of salaries and wages was included in administration costs for the year ended 31 December 2008.
Increase in gross profit margin from 38.0% in year 2008 to 42.7% in year 2009 was mainly because AridTec was fully operational for the year 2009.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

5.8. Review of Financial Position

The historical financial position of AridTec as at 31 December 2008 (audited), 31 December 2009 (unaudited) and 31 March 2010 (management accounts) is set out in the table below both in Singapore and Australian Dollars:

Table 10: AridTec’s Historical Financial Position

	31 Dec	31 Dec	31 Dec	31 Dec	31 Mar	31 Mar
	2008	2008	2009	2009	2010	2010
	Audited	Audited	Unaudited	Unaudited	Unaudited	Unaudited
	SGD’000	AUD’000	SGD’000	AUD’000	SGD’000	AUD’000
Current Assets
Cash and cash equivalents	389.6	389.6	266.4	211.6	28.3	22.0
Trade and other receivables	25.7	25.7	17.8	14.1	(14.3)	(11.3)
Inventories	225.9	225.9	318.0	252.6	317.3	247.1
Other assets	31.7	31.7	34.7	27.6	44.8	34.9
Total Current Assets	672.9	672.9	636.9	505.9	376.1	292.7
Non-Current Assets
Fixed assets	139.1	139.1	109.9	87.2	101.5	79.0
Investments in subsidiaries	0.2	0.2	0.2	0.2	1.3	1.0
Total Non Current Assets	139.3	139.3	110.1	87.4	102.8	80.0
Total Assets	812.2	812.2	747.0	593.3	478.9	372.7
Current Liabilities
Trade and other payables	69.0	69.0	77.0	61.2	40.7	31.7
Other liabilities	-	-	307.6	244.3	193.3	150.5
Total Current Liabilities	69.0	69.0	384.6	305.5	234.0	182.2
Non-Current Liabilities
Long Term Liabilities	-	-	2.3	1.8	2.3	1.8
Total Non-Current Liabilities	-	-	2.3	1.8	2.3	1.8
Total Liabilities	69.0	69.0	386.9	307.3	236.3	184.0
Net Assets Attributable to	743.2	743.2	360.1	286.0	242.6	188.7
shareholders
Exchange Rate	0.9967		1.2589		1.2840

Source: AridTec Financial Reports, Refresh management

We make the following observations in relation to AridTec’s historical financial position:

==> picture [10 x 13] intentionally omitted <==

Other liabilities as of 31 December 2009 represented advances from customers and related parties for the full operation of AridTec in year 2009.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

5.9. Review of Cash Flows

The historical cash flow of AridTec for the 13 month period ended 31 December 2008 (audited) and year ended 31 December 2009 (unaudited) and nine months ended 31 March 2010 (management accounts) is set out in the table below both in Singapore and Australian Dollars:

Table 11: AridTec’s Historical Cash Flow Statements

	31 Dec	31 Dec	31 Dec	31 Dec	31 Mar	31 Mar
	2008	2008	2009	2009	2010	2010
	Audited	Audited	Unaudited	Unaudited	Unaudited	Unaudited
	SGD’000	AUD’000	SGD’000	AUD’000	SGD’000	AUD’000
Cash Flow From Operating Activities
Operating loss before working capital	(556.8)	(556.8)	(682.0)	(542.2)	(408.0)	(318.4)
changes
Trade and other receivables	(57.4)	(57.4)	60.6	48.3	22.2	17.3
Inventories	(225.9)	(225.9)	52.4	41.7	96.8	75.4
Depreciations	-	-	10.9	9.0	34.4	27.4
Foreign exchange loss	-	-	-	(80.0)	-
Trade and other payables	121.7	121.7	134.8	106.8	27.1	21.1
Net Cash Flows From Operating	(718.4)	(718.4)	(423.3)	(416.4)	(227.5)	(177.2)
Activates
Cash Flows From Investing Activates
Purchase of property, plant and equipment	(191.8)	(191.8)	-	-	-	-
Investments in subsidiaries	(0.2)	(0.2)	-	-	(1.1)	(0.9)
Net Cash Flows From Investing Activities	(192.0)	(192.0)	-	-	(1.1)	(0.9)
Cash Flows From Financing Activities
Proceeds from issuance of share capital	1,300.0	1,300.0	300.1	238.4	300.0	233.7
Repayments to related party					(36.8)	(28.7)
Net Cash Flows From Financing	1,300.0	1,300.0	300.1	238.4	263.2	205.0
Activities
Net increase/(decrease) in cash and cash	389.6	389.6	(123.2)	(178.0)	34.6	26.9
equivalents
Cash and cash equivalents at beginning of	-	-	389.6	389.6	(6.3)	(4.9)
period
Cash and Cash Equivalents at End of	389.6	389.6	266.4	211.6	28.3	22.0
Period
Exchange Rate	0.9967		1.2589		1.2840

Source: AridTec Financial Reports, Refresh management

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

5.10. Capital Structure and Shareholders

AridTec has a total of 6,208,000 shares on issue. As at 31 March 2010 the shareholders were as follows:

Table 12: AridTec – Shareholders – 31 March 2010

Shareholders of AridTec	Shareholders of AridTec
			% of Issued
	Investor	Shares held	Capital
1	Mr Mun Yew Chan	2,550,000	41.1
2	Mr Oh Chee Keong	1,200,500	19.4
3	Mr Keith Ng King Lien	759,500	12.2
4	Ms Teo Sin Hui	490,000	7.9
5	Ms Brenda Lee Kah Yah	408,000	6.6
6	Mr Loh Yuen Heng	300,000	4.8
7	Ms Xiaofei Sun	300,000	4.8
8	Mr Edward Lim	200,000	3.2
	Subtotal	6,208,000	100
	Others	-	-
	Total	6,208,000	100

Source: Accounting and Corporate Regulatory Authority, Singapore

Note: shareholders registry above is based on the most recent beneficial holder tracing report provided by Refresh management.

There are only eight shareholders in AridTec.

6. POST ACQUISITION

6.1. Pro Forma Group Structure

Assuming the Proposed Transaction proceeds, the following is the pro forma group structure.

==> picture [376 x 164] intentionally omitted <==

----- Start of picture text -----

Refresh Group Limited
100% 100%
Refresh Waters Pty Ltd AridTec Pte Ltd
100%
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Refresh Waters Queensland Pty Ltd AirQua International Pte Ltd
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– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

6.2. Pro Forma Consolidated Financial Position

Assuming the Proposed Transaction proceeds, the unaudited consolidated pro forma net assets of Refresh, AridTec comprising the enlarged group as at 31 March 2010 are set out below:

Table 13: Pro Forma Consolidated Financial Position - 31 March 2010

	31 Mar	31 Mar	31 Mar
	2010	2010	2010
	Refresh	AridTec	Pro Forma
	Unaudited	Unaudited	Consolidated
$ in thousands	AUD	AUD	AUD
Current Assets
Cash and cash equivalents	345.7	22.0	367.7
Trade and other receivables	673.2	(11.3)	661.9
Inventories	948.7	247.1	1,195.8
Other assets	-	34.9	34.9
Total Current Assets	1,967.6	292.7	2,260.3
Non-Current Assets
Other financial assets	1.1	1.0	2.1
Property, plant and equipment	2,042.1	79.0	2,121.1
Intangible assets	1,066.1	-	1,066.1
Total Non Current Assets	3,109.3	80.0	3,189.3
Total Assets	5,076.9	372.7	5,449.6
Current Liabilities
Trade and other payables	246.3	31.7	278.0
Other liabilities	99.6	150.5	250.1
Short-term provisions and accruals	48.9	-	48.9
Total Current Liabilities	394.8	182.2	577.0
Non-Current Liabilities
Financial liabilities	100.0	1.8	101.8
Long-term provisions	34.0	-	34.0
Total Non-Current Liabilities	134.0	1.8	135.8
Total Liabilities	528.8	184.0	712.8
Net Assets Attributable to	4,548.1	188.7	4,736.8
Shareholders

Source: Refresh management

Note 1: The pro forma consolidation above is for illustrative purposes only and has been provided by Refresh management.
Note 2: Exchange rate of SGD1:AUD1.2840
Note 3: The pro forma consolidated net asset position set out above has not taken into account the acquisition of intangible assets and the issue of shares from the Proposed Transaction.
Note 4: The Placement of 7,692,308 new Refresh fully paid ordinary shares at $0.065 to Yong Wei Por is not included.
Note 5: The pro forma consolidated net asset position above is not in accordance with Australian Accounting Standards.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd

A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

6.3. Pro Forma Capital Structure

Assuming the Proposed Transaction proceeds, the following is the capital structure post the issue of the Completion Shares, the issue of the Deferred Shares and the issue of the Placement Shares.

Table 14: Pro Forma Capital Structure

	Current Shareholdings	Current Shareholdings	Post the Completion Shares	Post the Completion Shares	Post the Deferred Shares	Post the Deferred Shares
Shareholders	Pre Proposed Transaction Share Structure Number	%	Post Proposed Transaction Share Structure Number	%	Post Proposed Transaction Share Structure Number	%
Mun Yew Chan Oh Chee Keong Keith King Lien Ng Sin Hui Teo Brenda Kah Yah Lee Other AridTec shareholders			29,492,590 13,884,649 8,784,166 5,667,204 4,718,814 9,252,577	19.97 9.4 5.9 3.8 3.2 6.3	38,291,236 23,205,541 14,681,057 9,471,649 7,886,598 26,463,919	19.6 11.8 7.5 4.8 4.0 13.6
Total current AridTec shareholders			71,800,000	48.57	120,000,000	61.3
Existing Refresh shares Placement shares	68,206,849 -	100 -	68,206,849 7,692,308	46.23 5.2	68,206,849 7,692,308	34.8 3.9
Total shares on issue	68,206,849	100	147,699,157	100	195,899,157	100

Source: Refresh management

Note 1: The Placement of 7,692,308 new Refresh fully paid ordinary shares at $0.065 to Yong Wei Por is included.
Note 2: Outstanding options are assumed not exercised.
Note 3: The maximum number of Deferred Shares are issued.
Note 4: No other share issues have occurred.

7. EVALUATION OF PROPOSED TRANSACTION

7.1. Introduction

ASIC RG 111 Content of Expert Reports outlines the appropriate methodologies that a valuer should consider when valuing assets or securities for the purpose of, amongst other things, share buy-backs, selective capital reductions, schemes of arrangement, takeovers and prospectuses. These include:

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The discounted cash flow (DCF) methodology;
The application of earnings multiples appropriate to the businesses or industries in which the company or its profit centres are engaged, to the estimated future maintainable earnings or cash flows of the company, added to the estimated realisable value of any surplus assets;
The amount that would be available for distribution to shareholders in an orderly realisation of assets;

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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The quoted price of listed securities, and allowing for the fact the quoted market prices may not reflect their value on a 100% controlling interest basis; and
Any recent genuine offers received by the target for any business units or assets as a basis for valuation of those business units or assets.

We have outlined these methodologies in Appendix B Valuation Methodologies, to this Report. Each of these methodologies is appropriate in certain circumstances. The decision as to which methodology to use generally depends on the methodology most commonly adopted in valuing the asset in question and the availability of appropriate information.

Discounted Cash Flow / Capitalisation of Earnings

Refresh and AridTec do not have profit history and are not cash flow positive. Therefore, we do not believe that Discounted Cash Flow methodology or Capitalisation of Earnings methodology is appropriate to use for the purpose of this Report.

Takeover Bid

We have been advised by directors of Refresh that they do not believe that there would be a likelihood of a takeover bid for Refresh. To the best of our knowledge, there are no current bids in the market place for the shares in Refresh.

Recent Market Prices of Refresh Shares

Please refer to Section 7.3.1. for details.

Net Asset Backing

Please refer to Section 7.3.2. for details.

7.2. Control Premium

The difference between the value of 100% of a company and the total of the value of minority shareholdings is referred to as a ‘premium for control’ taking into account synergistic benefits for the acquirer. Control of a company by a shareholder gives that shareholder rights to which minority shareholders are not entitled, including amongst other things control of the company’s policies and strategies, use of cash flows of the company and payment of dividends.

The level of premium for control paid in a takeover bid will vary across industries and is dependent upon the specifics of the company being acquired.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

In considering the issue of control premium for the Proposed Transaction, we have been advised the current eight AridTec shareholders are independent and are not related. We have also been advised that there are no substantial and major shareholders common to both Refresh and AridTec.

We have also been advised that an AridTec nominee will be appointed to the Refresh board of directors. Hence, there is no control of the board of directors.

We have therefore not included any control premium in our assessment of fair value as no shareholder shall control Refresh upon completion of the Proposed Transaction.

7.3. Assessment as to Fairness

7.3.1. Comparison – Value of Share vs. Value of Consideration

Share Liquidity and Average Market Share Prices

The average market share price of Refresh shares were relatively stable for the last 18 months except for several months from December 2008 to June 2009 as a consequence of special consideration (please refer to Section 4.9 for details). The average market share price including those exceptional months was $0.063 which is 3% less than the value of proposed consideration. The average market share price excluding those exceptional months was $0.073, which is relatively higher than the value of proposed consideration.

Recent Market Share Prices

Additionally there has been little change or fluctuation in the share price of Refresh since the latest announcement to the ASX on 20 April 2010.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Recent Placement of Shares and Options via Capital Raisings

We understand that 7,692,308 new fully paid ordinary Refresh shares at $0.065 per share will be issued to Mr Yong Wei Por via Placement shares subject to the Proposed Transaction, as announced to the ASX on 22 April 2010. We confirm that the funds have been received by Refresh from Mr Por.

The issued prices of share issued as a consequence of capital raisings for the last 18 months ranged from $0.05 to $0.07 (Please refer to Table 7 in Section 4.9 for details). These share prices are the same or close to the value ascribed to the consideration in the Proposed Transaction.

All options that have been issued during the last 18 months have an exercise price at or above $0.65 per option (Please refer to Table 5 in Section 4.8 for details).

– Comparison Value of Share Pre Acquisition vs. Value of Share Post Acquisition

We have used figures based upon management accounts as of 31 March 2010 for the comparison purpose.

	Pre Acquisition 31 Mar 2010 $	Post Acquisition 31 Mar 2010 $
Net assets(i),(ii)	4,548,100	9,215,000
Number of shares(iii)	68,206,849	140,006,849
Value of share	0.066	0.066

(i) Pre acquisition net assets were based on the net assets of Refresh as at 31 March 2010.
(ii) Post acquisition net assets were based on the combined net assets of Refresh and AridTec plus the adjustment on intangible assets as a result of the Proposed Transaction.
(iii) Number of shares for post acquisition is the current number of shares as at 31 March 2010 plus 71,800,000 being the number of shares that will be issued based on the Completion Shares at a price of $0.065, without taking into consideration the Deferred Shares which are conditional and subject to specific milestones and performance and Placement shares subject to the Proposed Transaction at a price of $0.065.

As demonstrated, we consider that the shareholders of Refresh will not be disadvantaged after the Proposed Transaction.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

7.3.2. Net Asset Backing

For the purpose of cross checking our assessed values for Refresh we have considered Refresh’s reviewed consolidated net asset position as at 31 March 2010 of approximately $4.5 million. Based on the total Refresh shares on issue of 68,206,849 this is equivalent to a net asset backing of $0.066 per share.

This is marginally higher than the value of consideration of the Proposed Transaction.

7.4. Assessment as to Reasonableness

Pursuant to ASIC RG 111, an offer may be reasonable after considering other significant factors such as advantages and disadvantages, should shareholders approve the Proposed Transaction.

We have also considered the advantages and disadvantages of the Proposed Transactions from Refresh shareholders perspective. Some of the advantages and disadvantages of the Proposed Transaction, which are not exhaustive, considered by us, are detailed below:

Advantages

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Additional Funds for Operation Through Share Placement - Refresh has entered into a subscription agreement with Yong Wei Por for the Placement subject to the Proposed Transaction. Once the Proposed Transaction is completed, Refresh will issue 7,692,308 new Refresh fully paid ordinary shares at $0.065 to Yong Wei Por. $500,000 will be received and can be used for the current operations.

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Potential Growth - By acquiring AridTec management of Refresh believe that Refresh post acquisition would experience growing revenue and maybe profitable in the foreseeable future. In addition, if AridTec performs in accordance with its management’s expectations then, as a result of the Proposed Transaction, fixed corporate overheads as percentage of total revenue of the enlarged group is expected to decrease. AridTec is at an early stage of its business life cycle and its projections include revenue and profit growth based upon hypothetical assumptions. If AridTec achieves or exceeds its projections, the valuation of AridTec may increase to level in excess of our assessed values.

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Potential New Markets - The Asian region is one of the fastest growing areas in the world and completion of the Proposed Transaction will give Refresh shareholders exposure to the opportunities in the region, whereas to build up organically requires a much longer timescale and would be more difficult to achieve.

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Product Diversification and Distribution Network - The Proposed Transaction will also provide Refresh with access to:
Greater product diversification; and
AridTec distribution network in more than 10 countries.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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Potential Lower Acquisition Costs - Given the recent improvements in equity markets generally as compared to the negotiation made last year when the global financial crisis occurred, a higher consideration may be required if the current Proposed Transaction is not successful and Refresh looks for the acquisition of similar business.

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Potential for Dual Listing - An alternative considered by Refresh directors, is to list Refresh after acquisition on the Singapore Stock Exchange in order to raise more funds for business expansion.

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Potential Dividends - Potential dividends will be received from the operation of AridTec based on the current cash flow forecast of Refresh after the acquisition.

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Other Potential Benefits - If the Proposed Transaction is successful:
The risks faced by Refresh shareholders will be diversified as Refresh shareholders will no longer be dependent on the success of several products in Australia.
Refresh will share in the potential benefits/knowledge/technology associated with the AridTec products. For example, bottled water is manufactured from water vapour from the air through AridTec’s technology.
The liquidity of the post acquisition Refresh’s shares is likely to be greater than the current liquidity of Refresh shares once the escrow period has finished, because post acquisition Refresh will be larger and have a more diverse shareholder base and may attract more institutional investment interest.
The acquisition might well present opportunities to take advantages of economic of scale.
There would undoubtedly be scope for savings for certain fixed costs.

Disadvantages

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Acquisition of Small and Start-up Business of Further Loss Making Entity Refresh is purchasing a loss making entity, which would bring more risk to Refresh.

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Dilution on Voting Powers - Should the Proposed Transaction be completed the existing shareholders of Refresh will have their voting powers reduced as they will be diluted by the issue of new Refresh shares to the shareholders of AridTec. As such, the ability of the existing shareholders of Refresh to influence decisions, including with regard to the composition of the board, will be reduced accordingly.

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Significant Influence by Various AridTec Shareholders Following the issue of the Completion Shares and the Deferred Shares, Mr Mun Yew Chan will be the single largest shareholder of Refresh and could hold up to 19.97% of Refresh. In this scenario, Mr Chan may have the ability to influence Refresh.

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Consequences to Utilise the Accumulated Australian Income Tax Losses – Refresh will be able to utilise the accumulated losses carried forward of Refresh based on the current cash flow forecast of Refresh post acquisition. However, the ability to utilise the accumulated losses depends on the ability of generating taxable profit and subject to the Continuity of Ownership Test (COT) or the continuity of Business Test (SBT) and other provisions of Australian Income Tax Law.

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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Exposure to Exchange Rate Risk Following the Proposed Transaction, Refresh will have a significant portion of its revenues derived from international sales and costs denominated in Singaporean Dollars and other currencies. Accordingly, Refresh is likely to be exposed to risks associated with AUD: SGD and other exchange rate fluctuations.

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Potential Negative Impact on Performance and Dividends by Amortisation and Impairment Upon the completion of the Proposed Transaction, Refresh will recognise significant intangible asset balances. In accordance with Australian Accounting Standards, intangible assets are subject to amortisation and impairment review. Significant impairment will be noted if the operation of AridTec is not profitable. Thus, the amortisation and impairment will have a negative impact on Refresh’s performance and earnings which may affect the ability to pay dividends.

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Reduction of Australian Franking Credits Any potential future Refresh dividends to its shareholders that have been derived from the Singaporean operations of AridTec are unlikely to be accompanied by franking credits. The individual tax consequences of this to each of the shareholders of Refresh have not been considered as part of this Report.

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Patent Risk – According to the Patents Act (Cap 221, 2005 Rev Ed) in Singapore, the maximum period of duration of the exclusive rights conferred by registration of a patent is 20 years from the filing date. To enjoy this full term, the patent must be renewed before the expiry of the 4th year and every year thereafter. Therefore, Refresh may lose the competitive advantages on the patents after the remaining patent life of 15 years.

Likely Advantages Associated with the Proposed Transaction

If the Proposed Transaction goes ahead, the additional advantages include:

Economies of Scale

Refresh is currently a loss making group. Refresh is not expecting to be profitable as a group for the year ending 30 June 2010.

AridTec is expected to experience growing revenues, though it is still expected to be a loss making entity for the year ending 30 June 2010. If AridTec performs in accordance with its management’s expectations then, as a result of the Proposed Transaction amongst other things, fixed corporate overheads as a percentage of total revenue of the enlarged group may decrease and together with the expanded increase in revenue, ultimately the expanded group should achieve profitability at an earlier date.

Growth Potential of AridTec

AridTec is at an early stage of its business life cycle. AridTec’s projections include significant revenue and profit growth based upon management assumptions. Some of these assumptions are extremely difficult to quantity and obtain satisfactory evidence of the assumptions. If AridTec achieves or exceeds its management projections, the value of AridTec may increase to a level in excess of our assessed value.

AridTec will also expand the Group into new international markets. Currently, Refresh operates solely in Australia. The potential revenue growth of AridTec is projected to be substantial.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

7.5. Valuation of Refresh

In considering the appropriate methodologies for valuing Refresh, we advise:

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Long term forecasts for Refresh are not available. Accordingly, we have not utilised a DCF approach for the purposes of our Report;
Historically, Refresh has incurred trading losses and Refresh is not forecast to generate a profit in the short term. Accordingly, we have not utilised a capitalisation of FME approach for the purposes of our Report;
We have been advised by Refresh that they have not received any recent offers for Refresh or any of its key assets or operations. We are not aware of any recent transactions for businesses comparable to Refresh.
Refresh is a listed Australian company and is quoted on the ASX. However, we note the liquidity of Refresh’s shares for the last 18 months is low. Whilst the trading volume is very low, we have utilised the market value of listed securities approach to cross check our assessed values.

For the purpose of our Report, we have relied on historical transaction evidence, being the issue of Refresh shares, as a basis for our assessment.

We have cross–checked our valuation result to the net asset value of Refresh, the recent traded Refresh share prices and the proposed Placement of shares to Mr Por.

Based on the above, we conclude that our assessed value of a Refresh share on a 100% basis is in the range of 6.0 cents to 7.0 cents per share. We have adopted the issue consideration value of 6.5 cents. Based on the current Refresh shares on issue of 68,206,849 this is equivalent to a total equity value for Refresh of $4,433,445.

7.6. Valuation of AridTec

AridTec is a start up company, mainly concentrating in research and development activities.

Historical Capital Raisings

AridTec’s historical capital raisings are set out below:

Figure 15: AridTec Share Issues Since Incorporation

Transaction	Date	# Shares Issued	Issue / Transfer	Total Value
			Price (SGD)	(SGD)
Incorporation	23-Nov-07	1,000,000	0.100	100,000
First funding exercise	10-Sep-08	4,000,000	0.100	400,000
Second funding exercise	14-Dec-08	300,000	1.000	300,000
Second funding exercise	14-Dec-08	500,000	1.000	500,000
Share based payment	14-May-08	108,000	0.001	108
Third funding exercise	18-Jan-10	300,000	1.00	300,000
		6,208,000		SGD 1,600,108

Source: AridTec Management

– Refresh Group Limited Independent Expert’s Report

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

We note that:

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The first funding exercise in November 2007 was to raise funds to commence research and development activities. The share placement was made to a single shareholder at this time. As these shares were issued to the sole existing shareholder we consider the share price adopted for this transaction as not being indicative of fair market value;

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The second funding exercise, the December 2008 placement, was to raise funds for product commercialisation and was made to new parties who were unrelated shareholders. This appears to be transaction reflecting the fair market value at that time;

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The share based payment in May 2008 was issued at a nominal value as payment for corporate advisory services provided to AridTec. The share price adopted for this issue is nominal and is unlikely to reflect the value of the services offered or the fair market value of AridTec shares; and
The third funding exercise, the January 2010 placement, was to raise funds for product commercialisation and was made to new parties who were unrelated shareholders. This appears to be transaction reflecting the fair market value at that time.

For the purposes of our Report, we consider the December 2008 and January 2010 placements as the best indicator of the fair market value of AridTec shares.

On the basis of the current issued capital, the valuation in SGD is as follows:

6,208,000 issued shares SGD = $1.00 $6,208,000

Control Premium

If the Proposed Transaction is implemented, Refresh will own 100% of the issued capital and have total control of AridTec.

In considering an appropriate premium for control for AridTec we note that:

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Whilst AridTec has historically been loss making, management is forecasting it to make a profit in the future; and
Early stage companies, particularly those in research and development activities, may command higher control premium reflecting their growth potential.

We have adopted a premium for control for AridTec in the range of 20% to 30% for the purposes of our Report.

Summary Assessed Value Based on Historical Transaction Evidence

The following table summarises our valuation assessment of AridTec:

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd

A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Figure 16: Summary Valuation – AridTec

All Figures SGD	Low	High
January 2010 placement price 1.0 1.0 PremiumControl 20% 30%
Value of 100% of AridTec on aper share basis 1.2 1.3

Valuation Cross Check

Valuation of Patents and Intellectual Property

The valuation of any patents and related intellectual property is difficult and contains many implied assumptions. We have been provided with a valuation of the intellectual property, together with other relevant data and information.

We have used this data and information solely as a guide and substantiation evidence to our above calculations. We have not relied upon the valuation, but used it more as substantiation evidence.

Valuation Conclusion

Based on the above, we conclude that our assessed value of AridTec on a 100% basis and inclusive of a premium for control is in the range of SGD7,449,600 to SGD8,070,400.

We have adopted the value of SGD7,700,000, and accordingly, after conversion and rounding is AUD$6,000,000.

8. CONCLUSION

In formulating our conclusions on the Proposed Transaction, we have considered and evaluated a number of alternative methods to value the Proposed Transaction.

In addition, in our opinion, the advantages that have been outlined by us outweigh the disadvantages that we have considered.

– Refresh Group Limited Independent Expert’s Report

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Appendix A - Industry

1. BOTTLED WATER INDUSTRY IN AUSTRALIA

The bottled water industry in Australia consists of establishments mainly engaged in manufacturing or bottling purified water, spring water or functional water. Excluded are establishments mainly engaged in manufacturing soft drinks, fruit juice, alcoholic beverages or milk drinks. Also excluded from this industry are firms which are mainly engaged in the supply of water by pipelines or mains.

Accordingly to ABS data, currently 8.3% of Australian households now rely on bottled water as their primary source of drinking water. Industry growth is being driven by consumers becoming more health conscious, higher disposable incomes, and product innovation by major players. The success of retailers in applying an attractive mark-up margin to water has stimulated demand from downstream retailers and convenience stores. The effect of this has boosted manufacturing revenue growth over the period.

Factors contributing to growth within the industry include dissatisfaction with the taste of tap water, as well as concerns about chemicals such as chlorine and fluoride used to treat public water supplies. The Australian Bottled Water Institutes Model Code has aided the industry’s driver for credibility and quality assurance.

The increasing health and well being consciousness of Australian consumers had driven growth in the bottled water industry. Australians are becoming more aware of the recommended eight glasses of water per day. This has helped increase bottled water revenue, along with other low-sugar beverage to continue to lead growth in the overall non-alcoholic beverages market in Australia.

Product Innovation and Trends

The creation and promotion of sports water and other near waters has helped bottled water to win market share from high-sugar soft drinks, energy drinks and sports drinks. Furthermore, manufacturers have recognised the importance of bottle design as a basis of increasing competition and innovation in this area has helped target and style-conscious consumers.

Convenience has also been recognised as a key driver of bottled water growth, and the increased availability of multi packs has driven up demand within both the convenience stores and supermarkets, although partially at the expense of more traditional bulk containers.

The dominant bottled water consumers, young females, have been found to be often image-conscious. This has allowed the development of branding to become a key successful factor in the industry, and for greater product differentiation which facilitates higher prices and profit margins.

Environmental Impact and Opposition to Bottled Water

There has been some media attention on the contribution of beverage bottles to landfill, estimated at 38%, as well is the use of non-renewable petrochemicals in the production process. Some sections of the Australian government have stopped providing bottled water to their offices due to environmental concerns.

– – Refresh Group Limited Independent Expert’s Report Appendix A

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

The Bottled Water Alliance has been established with the aim of reducing domestic bottled water consumption by 20% over the two years from 2009. The organisation has commissioned a survey of consumers in order to assess the reasons behind their purchase of bottled water, and found that consumers would buy less bottled water if they had access to water bubblers. The organisation is therefore encouraging councils to install and maintain public bubblers as a way of reducing reliance on bottled water. The efforts of this and other similar organisations may have the effect of dampening demand for bottled water through lobbying efforts.

Industry Revenue

In 2008-2009 the industry was expected to be particularly challenged by lower consumer confidence. Bottled water is a highly discretionary product given the ready availability of a lower priced substitute, being tap water. While consumers have until recently been willing to pay a significant premium for the convenience of bottled water, it is expected that the rapid grown of this industry will slow significantly as many consumers switch away from the product. Overall, it is expected the industry revenue will increase by only 1.3% during the 2008-2009 year to $524.8 million.

It is estimated that 2007-2008 was a year of slightly more moderate growth for bottled water. Consumer confidence declined sharply during the year, which made it difficult to increase the price of highly discretionary products such as water. The industry still managed to grow by an estimated 6.1% to $517.9 million. New product introductions such as Powerade Isotonic and Glaceau Vitamin Water stimulated domestic demand during the year. Consistent marketing also contributed to grow industry volumes.

Australian Bottle Water Industry Revenue

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Source: IBIS World Industry Report

– – Refresh Group Limited Independent Expert’s Report Appendix A

Profitability

Is it estimated that in the five years to 2008-2009, industry profitability has declined marginally, from an estimated 14.8% of revenue to 12.1% of revenue (net profit after tax as a proportion of revenue). Despite this, bottled water still has the highest profit margin of any non-alcoholic beverage. Industry profitability has been reduced due to higher packaging costs, particular PET resin for production of plastic bottles. Resin prices have been driven up by a higher oil prices. Since most bottle water producers make their own bottles, the increase n resin prices will have diminished profitability of the industry overall.

Industry Size

The number of industry establishments is expected to increase at an annual average rate of 6.9% over the five years to 2008-2009, to around 60. The number of enterprises is also increasing, with new participants entering the industry; although at a lower rate, given acquisition of smaller bottlers by major players. Industry enterprises are expected to increase at an annual average rate of 4.9% over the five years to 2007-2008, to 42 enterprises.

2. INTERNATIONAL BOTTLED WATER MARKET

In many parts of the world, bottled water is viewed as a necessity due to unsafe locally produced water. This has been a key driver of bottled water sales in emerging markets along with increased awareness of perceived health benefits.

The global bottled water market is estimated to $50 billion in 2009. Whilst consumption in the United States is increasing, Western Europeans remain the largest bottled water consumers, consuming approximately 25% of the world’s production, Bottled water’s largest growth market are growth economies such as India and China. Accordingly to Datamonitor, the global market forecast is to grow 32.4% during 2010 to 159.2 billion litres. Unflavoured water constitutes the largest section and represents 66.5% of annual bottled water sales.

Water has no calories and is seen as a healthier alternative to sugar-filled soft drinks. Consumer trends favouring organic and green products are further boosting bottled water sales. Carbonated bottled water is becoming popular in many world markets.

In the United States consumers have reached into their pocket to the tune of $10.8 billion dollars to purchase bottled water, which is a tremendous statement as to consumer’s support of the bottled water industry. Western Europeans remain the biggest bottled water consumers, guzzling a little more than a quarter of the world’s production. In some emerging markets such as India, water consumption has been tripling and more than doubling in China over the past five years. In fact, it is likely that over the next few years, up to and probably beyond 2010, the growth rate will accelerate, and that Asia Pacific will become the world's largest regional market for packaged water.

The latest upward trend in the purchasing power of bottled water was reflected in 2006 when total bottled water volume exceeded 8.25 billion gallons, a 9.5 percent increase over 2005, and the 2006 bottled water per capita consumption level of 27.6 gallons increased by over two gallons, from 25.4 gallons per capita the previous year. Additionally, the wholesale sales for bottled water in 2006 increased 8.5 percent over 2005.

– – Refresh Group Limited Independent Expert’s Report Appendix A

Anquan Securities & Investments Pty Ltd

A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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Consumers are choosing bottled water as a refreshing, hydrating beverage and as an alternative to others that may contain sugar, artificial sweeteners, caffeine, artificial colours, and artificial preservatives or other ingredients, which they wish to moderate or avoid. During 2006, individual servings of bottled water in sizes of 1.5 litres and smaller accounted for 57.1% of the volume of bottled water sold, indicating that consumers are choosing bottled water in lieu of other bottled drinks.

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– – Refresh Group Limited Independent Expert’s Report Appendix A

Anquan Securities & Investments Pty Ltd

A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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It is interesting to note that the future demand will partially be boosted by today's youth and teenage and sector who, unlike the older generations, have been brought up drinking bottled water and find nothing wrong with paying for it.

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– – Refresh Group Limited Independent Expert’s Report Appendix A

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

With the continuing pursuit of healthier lifestyles and aggressive marketing, the increased sales in bottled water are still showing unprecedented growth with few signs of slowing down. The single biggest factor driving sales of bottled water is health and wellness. Consumers see it as a healthy alternative. Just one research note from Sheffield University, England, has indicated that women who stay hydrated by drinking the recommended daily amount of water could reduce their risk of breast cancer by 79%. Furthermore the study concluded that drinking more than five (5) glasses of water a day could lower the risk of colon cancer by 45% and bladder cancer by 50%.

Annual sales for the global bottled water industry were about $35 billion in 2005, with approximately 43 billion gallons of bottled water sold per year. Global annual growth rates for consumption of bottled water averaged 8.7% for the period 2000 to 2005. Following is a chart showing the geographic distribution of global sales. Most important according to several analysts, bottled water sales will top $50 billion by the end of 2007.

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– – Refresh Group Limited Independent Expert’s Report Appendix A

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Appendix B - Valuation Methodologies

ASIC Regulatory Guide 111 provides guidance on the methodologies that an independent expert should consider when valuing a company, asset or securities for the purposes of forming an opinion as to the fairness of the Proposed Transaction pursuant to the Corporations Act.

There are number of methodologies available with which to value a project, a business or the shares in a company. The principal methodologies used are:

discount cash flow method;
capitalisation of earnings method;
net realisation value of assets;
market based assessments; and
comparable market transactions.

Each of these mythologies is appropriate in certain circumstances. The decision as to which methodology to utilise generally depends on the methodology most commonly adopted in valuing the asset in question and the availability of appropriate information.

Discounted Cash Flow

The discounted cash flow methodology involves calculation the net present value of cash flows that are expected to be derived from future activities. The forecast cash flows are discounted by a discount rate that reflects the time value of money and the risk inherent in the cash flows.

This methodology is particularly appropriate in valuing projects, businesses and companies that are in a start up phase and are expecting considerable volatility; and/or growth in earnings during the growth phase, as well as businesses with a finite life (such as oil and gas fields). The utilisation of this methodology generally requires management to be able to provide long term cash flows for the subject company, assets or business.

Capitalisation of Earnings

The capitalisation of earnings methodology involves capitalising the earnings of a project, a business or a company at an appropriate multiple, which reflects the risks underlying the earnings together with growth prospects. This methodology requires consideration of the following factors:

Estimation of future maintainable earnings having regard to historical and forecast operating results, abnormal or non-recurring items of income and expenditure and other factors. Future maintainable earnings are generally based on net profit after tax, EBIT, EBITA or EBITDA.
Determination of an appropriate earnings multiple reflecting the risks inherent in the business, growth prospects and other factors.
Earnings multiples applied to net profit after tax are known as price earnings (“PE”) multiple and are commonly used in relation to listed public companies. Earnings multiples applied to EBIT, EBITA or EBITDA are known, respectively, as EBIT, EBITA or EBITDA multiples, and are commonly used in respect of companies comprising a number of business where debt cannot be precisely allocated or in acquisition scenarios where the purchaser is likely to control gearings.

– – Refresh Group Limited Independent Expert’s Report Appendix B

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

An adjustment for financial debt, in the event maintainable earnings is based on EBIT, EBITA or EBITDA.
An assessment of any surplus assets and liabilities, being those which are not essential to the generation of the future maintainable earnings are also taken into consideration.

Net Realisable Value of Assets

The net realisable value of assets methodology involves the determination of the net realisable value of the assets of a business or company, assuming an orderly realisation of those assets. This value includes a discount to allow for the time value of money and for reasonable costs of undertaking the realisation; it is not a valuation on the basis of a forced sale, where assets may be sold at values materially different to their market value.

This methodology is appropriate where a project, a business or company is not making an adequate return on its assets or where there are surplus non-operational assets.

Market Based Assessments

Market based assessments relate to the valuation of companies, the shares of which are traded on a stock exchange. While the relevant share price would, prima facie, constitute the market value of the shares, such market prices usually reflect the prices paid for small parcels of shares and as such do not include a control premium relevant to a significant parcel of shares.

Recent Share Issues and Capital Raising

In addition to market based assessments, it is also appropriate to consider and take into account recent share issues.

We note that a large placement of Refresh shares, being 7,692,308 shares at an issue price of $0.065, to raise $500,000 will occur in conjunction with and subject to the acquisition of AridTec.

Comparable Market Transactions

The comparable market transactions method sets the value of a business with reference to comparable market transactions that have occurred over a period of time. It has features similar to the industry or rule of thumb method. The application of this method assumes that:

The businesses under consideration are reasonable comparable;
There is a reasonable level of market activity in the sale of these businesses; and The information about the transaction price is readily available.

– – Refresh Group Limited Independent Expert’s Report Appendix B

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Appendix C - Financial Services Guide

Anquan Securities & Investments Pty Ltd

This Financial Services Guide is dated 30 April 2010

About Us

Anquan Securities & Investments Pty Ltd (“Anquan” or “we” or us” or “ours” as appropriate) (ABN 79 110 803 659 and Australian Financial Services Licence No 291653) has been engaged by Refresh Group Limited (“Refresh”) to provide a report in the form of an Independent Expert’s Report (“IER” or the “Report”) in relation to the shareholder vote on the proposed transaction to acquire AridTec Pte Ltd (“AridTec”) for inclusion in the Notice of Meeting and Explanatory Memorandum to be dated on or about 25 May 2010.

This Financial Services Guide

This Financial Services Guide (FSG) is designed to assist retail clients in their use of any general financial product advice contained in the Report. This FSG contains information about Anquan generally, the financial services we are licensed to provide, the remuneration Anquan may receive in connection with the preparation of the Report, and how complaints against us will be dealt with.

Financial Services we Are Licensed to Provide

Our Australian Financial Services Licence allows us to provide a broad range of services, including providing financial product advice in relation to various financial products such as securities, interests in managed investment schemes, superannuation products, government debentures, stocks or bonds, and deposit products.

General Financial Product Advice

The Report contains only general financial product advice. It was prepared without taking into account your personal objectives, financial situation or needs.

You should consider your own objectives, financial situation and needs when assessing the suitability of the Report to your situation. You may wish to obtain personal financial product advice from the holder of and Australian Financial Services Licence to assist you in this assessment.

Fees, Commissions and Other Benefits We May Receive

Anquan charges fees to produce reports, including this Report. These fees are negotiated and agreed with the entity who engages Anquan to provide a report. Fees are charged on an hourly basis or as a fixed amount depending on the terms of the agreement with the person who engages us. For the preparation of this Report our fees are based on a fixed amount. We have provided a range of our costs to Refresh.

– – Refresh Group Limited Independent Expert’s Report Appendix C

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Neither Anquan nor its directors and officers receive any commissions or other benefits, except for the fees for services referred to above.

All of our employees receive remuneration based on overall performance and the firm’s profitability, and do not receive any commissions or other benefits arising directly from services provided to our clients. The remuneration paid to our directors reflects their individual contribution to the company and covers all aspects of performance. Our directors do not receive any commissions or other benefits arising directly from services provided to our clients.

Associations with Issuers of Financial Products

Anquan and its authorised representatives, directors, employees and associates may from time to time have relationships with the issuers of financial products. For example, Anquan may provide financial advisory services to, the issuer of a financial product in the ordinary course of its business.

Complaints

If you have a complaint, please raise it with us first, using the contact details listed below. We will endeavour to satisfactorily resolve your complaint in a timely manner. In addition, a copy of our internal complaints handling procedure is available upon request. If we are not able to resolve your complaints to your satisfaction within 45 days of your written notification, you are entitled to have your matter referred to the Financial Ombudsman Service (FOS), and external complaints resolution service. You will not be charged for using the FOS service.

Contact Details

Anquan can be contacted by sending a letter to the following address:

Mr Richard Lambe Anquan Securities & Investments Pty Ltd PO Box 377 SOUTH FREMANTLE WA 6162

– – Refresh Group Limited Independent Expert’s Report Appendix C

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Appendix D - Sources of Information

In preparing this Report we have had access to and relied upon the following major sources of information:

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Draft Refresh Notice of General Meeting and Explanatory Memorandum to be dated on or about 25 May 2010,
Discussion with the management and directors of Refresh;
Financial Reports (audited) of Refresh for the years ended 30 June 2008 and 2009;
Interim Financial Reports (reviewed) of Refresh for the six months ended 31 December 2008 and 2009;
Management accounts of Refresh for the period from 1 July 2009 to 31 March 2010;
Financial Reports (audited) of AridTec for the 13 months ended 31 December 2008;
Management accounts of AridTec for the year ended 31 December 2009;
Management accounts of AridTec for the period from 1 July 2009 to 31 March 2010;
Refresh and AridTec – Shareholder information;
Refresh – Internal reports;
Refresh – Product information;
Refresh – Proposed top ten shareholders pre and post acquisition;
AridTec – Corporate profile and product information;
AridTec patent and trade mark information and documents;
Refresh and AridTec cash flow forecasts;
Internal and confidential management reports and information;
Placement subscription document;
Due Diligence Report prepared by Ms Judy Ong on acquisition of AridTec Pte Ltd dated 26 August 2009;
Patent valuation report prepared by Schweiger & Partners (Singapore) LLP;
Share Sale and Purchase Agreement between Refresh Group Limited, AridTec Pte Ltd and shareholders of AridTec Pte Ltd;
Refresh – ASX Announcements;
Other publicly available information including media releases; and
Websites.

– – Refresh Group Limited Independent Expert’s Report Appendix D

Suite 6, 32 Hines Road, O’Connor, WA 6163

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Appendix E - Qualifications, Disclaimers and Consents

Qualifications

Anquan Securities & Investments Pty Ltd is a financial services business, which it and its directors have experience in providing corporate financial advice and the provision of valuation services. Anquan Securities & Investments Pty Ltd has Australian Financial Services Licence (No. 291653) under the Corporations Act.

This Report was prepared by Richard Lambe, who is a director of Anquan Securities & Investments Pty Ltd. Richard Lambe has over 10 years experience on the provision of corporate finance advice and valuation services.

Declarations

Anquan Securities & Investments Pty Ltd has no interest in the outcome of the Proposed Transaction. Anquan Securities & Investments Pty Ltd is entitled to receive an agreed fee for the preparation of this Report and will be reimbursed for out of pocket expenses incurred. The fee payable to Anquan Securities & Investment Pty Ltd is payable regardless of the outcome of the Proposed Transaction. In addition, Anquan Securities & Investments Pty Ltd has been indemnified by Refresh Group Limited in relation to any claim arising from or in connection with its reliance on information provided by Refresh Group Limited. Anquan Securities & Investments Pty Ltd does not hold shares or options in Refresh Group Limited and has not held any such beneficial interest in the previous two years. Drafts of this Report dated 19 May 2010 were presented to management of Refresh Group Limited and their respective advisors for review of factual information contained in the Report. No significant changes were made to the Report as a result of those reviews.

Purpose of Report

This Report has been prepared at the request of the directors of Refresh Group Limited for inclusion in the proposed Explanatory Memorandum documents to be dated on or about 25 May 2010 and should not be used for any other purpose. In particular, it is not intended that this Report should serve any purpose other than an expression of our opinion on whether the Proposed Transaction is fair and reasonable. This Report has been prepared solely for the benefit of the directors of Refresh Group Limited and for the benefit of those persons who hold shares in Refresh Group Limited. Neither the whole or any part of this Report nor any reference to it may be included in or attached to any document, circular, resolution, letter or statement (other than the documents mentioned above) without the prior written consent or Anquan Securities & Investments Pty Ltd to the form and context in which it appears.

Special Note Regarding Forward-looking Statements and Forecast Financial Information

Certain statements in this Report may constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance and achievements of Refresh Group Limited and AridTec Pte Ltd to be materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements. Such factors include, amount other things, the following:

– – Refresh Group Limited Independent Expert’s Report Appendix E

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163 Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

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the future movements in exchange rates, interest rates and taxes;
the impact of terrorism and other related acts on broader economic conditions;
changes in laws, regulations or governmental policies (or the interpretation of those laws, the regulations or polices) which may adversely impact upon Refresh Group Limited and AridTec Pte Ltd; and

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other factors referenced in this Report.

Disclaimer and Consents

Anquan Securities & Investments Pty Ltd’s sole involvement in the Notice of Meeting and Explanatory Memorandum has been the preparation of this Report. Accordingly we take no responsibility for the content of the Explanatory Memorandum as a whole.

Anquan Securities & Investments Pty Ltd has consented to the inclusion of this Report in the form and context in which it is included as an annexure to the Explanatory Memorandum to be dated on or about 25 May 2010 to be sent to Refresh Group Limited shareholders.

In preparing this Report, Refresh Group Limited have indemnified Anquan Securities & Investments Pty Ltd, and its employees, officers and agents against any claim, liability, loss or expense, cost or damage, including legal costs on a solicitor client basis, arising out of reliance on any information or documentation provided by Refresh Group Limited which is false and misleading or omits any material particulars or arising from a failure to supply relevant documentation or information.

In addition, Refresh Group Limited have agreed that if it makes any claim against Anquan Securities & Investments Pty Ltd for loss as a result of a breach of contracts between Anquan Securities & Investments Pty Ltd and Refresh Group Limited, and that loss is contributed to by its own actions, then liability for its loss will be apportioned and is appropriate having regard to the respective responsibility for the loss, and the amount Refresh Group Limited may recover from us will be reduced by the extent of its contribution to that loss.

– – Refresh Group Limited Independent Expert’s Report Appendix E

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Suite 6, 32 Hines Road, O’Connor, WA 6163

Tel: +61 8 9338 8601 (ext 2) Fax: +61 8 9338 8699 Email: [email protected]

Appendix F - Glossary of Terms

Term	Definition
AAS	Australian Auditing Standards
AASB	Australian Accounting StandardsBoard
Anquan	AnquanSecurities &InvestmentsPtyLtd
ASIC	AustralianSecurities andInvestments Commission
ASX	AustralianSecuritiesExchangeLimited
AUD	Australian Dollars
Cents	Australian Cents
Completion Shares	The issue of 71,800,000 new fully paid Refresh ordinary shares to the shareholders of AridTec undertheProposedTransaction
CorporationsAct	CorporationsAct2001
CorporationsRegulations	CorporationsRegulations2001
COT	Continuity ofOwnershipTest
DCF	Discounted Cash Flow
Deferred Shares	The delayed issue of up to a maximum of 48,200,000 new Refresh ordinary fully paid shares to the current shareholders of AridTec under the Proposed Transaction contingent upon AridTec achieving certainprofitmilestonesforthe yearended 30 June2011
EDIT	EarningsBeforeInterest andTax
EDITA	EarningsBeforeInterest,TaxandAmortisation
EBIDTA	EarningsBeforeInterest,Depreciation,TaxandAmortisation
EM	ExplanatoryMemorandum
FOS	FinancialOmbudsmanService
FSG	FinancialServices Guide
IER	IndependentExpert’sReport
Notice of Meeting	Refresh’sNotice of Meeting andExplanatory Statement
NTA	Net tangible assets
Placement	7,692,308 new Refresh Group Limited fully paid ordinary shares at $0.065 will be issued to Yong Wei Por
Profit	The aggregate profits (less any losses) of AridTec and AirQua as shown in Singaporean dollars in audited consolidated financial statements of AridTec and AirQua for the year ending 30 June 2011, before deducting tax, converted into Australian dollars by applying the average of the spot rates of exchange of National Australia Bank Ltdforbuying and selling at orabout11:00AMon 1July2011
Proposed Transaction	The proposed acquisition of AridTec Pte Ltd announced by Refresh on 20 April 2010
R&D	Research and development
RG74	ASICRegulatory Guide74_Acquisitions Agreed to by Shareholders_
RG111	ASICRegulatory Guide111_Content of Experts Report_
RG112	ASICRegulatory Guide112_Independence of Experts_
SBT	Same Business Test
SGD	Singapore Dollars
USA	United States of America

ANQU0001/Correspondence//2204100126

– – Refresh Group Limited Independent Expert’s Report Appendix F

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000001 000 RGP MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Lodge your vote:

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By Mail:

Refresh Group Limited 17 Denninup Way Malaga WA 6090

Alternatively you can fax your form to (within Australia) 08 9248 7233 (outside Australia) +61 8 9248 7233

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

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For your vote to be effective it must be received by 10.00am (WST) Sunday 11 July 2010

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

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View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN: I9999999999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

I 9999999999

I ND

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Proxy Form

Please mark

to indicate your directions

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Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Refresh Group Limited hereby appoint

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the Chairman of the meeting

OR

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Refresh Group Limited to be held at 17 Denninup Way, Malaga, Perth, Western Australia on Tuesday, 13 July 2010 at 10.00am (WST) and at any adjournment of that meeting.

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Items of Business

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PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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Resolution 1 Approve Acquisition of Aridtec Pte Limited and Issue of Consideration Shares Resolution 2 Approve Issue of Deferred Shares Resolution 3 Approve Issue of Shares to Mr Yong Wei Por

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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R G P

9 9 9 9 9 9 A

All Figures SGD	Low	High
January 2010 placement price 1.0 1.0 PremiumControl 20% 30%
Value of 100% of AridTec on aper share basis 1.2 1.3

AI assistant

ENECO REFRESH LTD — Proxy Solicitation & Information Statement 2010

64874_rns_2010-06-06_b68dfae9-746c-4909-b210-87b0ff21ab69.pdf

REFRESH GROUP LIMITED

NOTICE OF GENERAL MEETING EXPLANATORY MEMORANDUM PROXY FORM

Date

Place

REFRESH GROUP LIMITED ACN 079 681 244

NOTICE OF GENERAL MEETING

AGENDA

ORDINARY BUSINESS

1. Resolution 1 – Approve Acquisition of Aridtec Pte Limited and Issue of Consideration Shares

Voting Exclusion

2. Resolution 2 – Approve Issue of Deferred Shares

Voting Exclusion

3. Resolution 3 – Approve Issue of Shares to Mr Yong Wei Por

Voting Exclusion

REFRESH GROUP LIMITED ACN 079 681 244

EXPLANATORY MEMORANDUM

1. BACKGROUND

1.1 Introduction

1.2 Share Sale Agreement

(a) Consideration

(b) Condition Precedent

(c) Warranties

(e)

1.3 Effect of Acquisition on Capital Structure of the Company

1.4

Effect of Acquisition on the Company

1.5 Independent Expert Report

1.6 The interests of the Directors in Resolution 1

1.7

Advantages of the Acquisition

1.8 Disadvantages of the Acquisition

1.9 Director's recommendation

2. RESOLUTION 1 – Approve Acquisition of Aridtec Pte Limited and Issue of Consideration Shares

2.1 General

2.2 Listing Rule 7.1

2.3 Specific Information required by Listing Rule 7.3

2.4 Listing Rule 11.1 Requirements

3. RESOLUTION 2 – Issue of Deferred Shares

3.1 General

3.2

Listing Rule 7.1

3.3

Specific Information required by Listing Rule 7.3

3.4 Deferred Shares and ASX Waiver

4. RESOLUTION 3 – Issue of New Shares to Mr Yong Wei Por

4.1 General

4.2 Specific information required by Listing Rule 7.3

Schedule 1 - GLOSSARY

Corporations Act means Corporations Act 2001 (Cth).

Schedule 2 – Balance Sheet and Pro Forma

Notes:

REFRESH GROUP LIMITED

INDEPENDENT EXPERT’S REPORT

Independent Expert’s Report in relation to the Proposed Acquisition of AridTec Pte Ltd

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

INDEPENDENT EXPERT’S REPORT – PROPOSED ACQUISITION OF ARIDTEC PTE LTD

Introduction and Purpose of the Report

Summary of Opinion

We have concluded that the Proposed Transaction is Fair and Reasonable to the shareholders of

Refresh.

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Summary of the Proposed Transaction

Basis of Evaluation

Evaluation of Proposed Transaction

Assessment as to Fairness

Control Premium

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Other Matters

Share Liquidity and Average Market Share Prices

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Recent Market Share Prices

Recent Placement of Shares and Options via Capital Raisings

– Comparison Value of Share Pre Acquisition vs. Value of Share Post Acquisition

Anquan Securities & Investments Pty Ltd A.C.N. 110-803-659 AFSL No: 291653

Assessment as to Reasonableness

Advantages

Disadvantages

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