ENVIRONMENTAL GROUP LIMITED (THE) — M&A Activity 2006

Apr 17, 2006

ASX ANNOUNCEMENT

18 APRIL 2006

EGL ACOUIRES CORIOLIS FROM MACOUARIE BANK

The Environmental Group Limited (EGL) today announced that it had acquired the entire issued capital of Coriolis Water Services (Australia) Ptv Limited (Coriolis), a major pressure sewer infrastructure business from Macquarie Bank Limited (MBL).

The Coriolis acquisition cements EGL's position as a leading provider of sewerage reticulation systems in Australia and has the potential to double EGL's existing business in this market segment.

Coriolis enjoys a significant long term pressure sewer purchase agreement with the world's leading pressure sewer manufacturer, Environment One Corporation (EOne) and long term supply agreements with Sydney Water Corporation and residential golf course developer, Medallist Group. Coriolis also has a periodic supply contract with TESIB (a subsidiary of the Tenix Alliance) in relation to the Bega Valley Sewerage Program.

Consideration for the acquisition comprises an initial payment for the share capital and deferred performance payments in relation to agreed supply contracts.

The Coriolis acquisition complements EGL's existing pressure sewer business as EOne's distributor in NSW, Victoria and Queensland and provides critical mass to further accelerate the adoption of pressure sewer in Australia. Managing Director Mike Williamson said, "pressure sewer provides Australian communities with a highly cost effective and environmentally superior alternative to traditional gravity and septic tank sewer systems and we look forward to maintaining and strengthening our close working relationship with EOne."

The Coriolis purchase is EGL's second major acquisition in the past six months focused on products, services and operations.

This underscores the Company's announced strategy of increasing its volume of recurring income as a leading supplier of environmental services to the public and private sector aimed at facilitating the expected growth of its business of delivering engineered solutions to its customers.

For further information, please contact Mike Williamson on (02) 8858 3499 or 0414 542 589.

Ulelar W.

MIKE WILLIAMSON MANAGING DIRECTOR & CEO.