MYECO GROUP LTD — Capital/Financing Update 2012

Dec 12, 2012

SHAR E HOLDER UPDATE

December 2012

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Dear Shareholder,

We are writing to update you on re c ent positive developments for Cardia Bioplasti c s and to provide new and important information on our strate g ic direction and progress.

Momentum continues following a record sales year in 2012

The Financial Year 2012 saw Cardia Bioplastics post a record performance in terms of sales for any one year and we are pleased to report that this sales momentum is continuing into FY2013. W ith a growing list of longterm customers, the Company is making significant headway into establishing itself as a global manufacturer and supplier of renewable resins for t he plastics and packaging industry.

Notably, three recent contract win s alone have secured over $2.2 million in sale s which will contribute to FY2013 revenues. This represents o v er half of the total sales reported by the Com p any in the prior financial year.

Transition to global product commercialisation well underway

The last year has seen Cardia t ransition from the product development p hase to global product commercialisation. Cardia has now e xecuted several long-term contracts with majo r international customers, City Councils and market-leading br a nd owners. These contracts are the culminatio n of a lengthy and rigorous process that confirms that Cardia’ s products meet the global standards of tec h nical and environmental performance, are cost-competitive a n d have passed specific product trials.

Cardia’s strategic focus is to activel y pursue local and global partners to increase global market share for its renewable resin technologies. Secur i ng the product supply to market leaders and la r ge packaging users offers Cardia the opportunity to significantly grow with these organisations as they increa s e the use of our products over time across multiple product lines and geographical regions.

We are confident that our corporate strategy will generate a business that is well po s itioned to capitalise from the global trend towards sustainable and lower carbon footprint packaging.

Delivering on strategy

Our progress in executing this strate g y to date has been very encouraging and the m omentum is building. We have already secured material busi n ess contracts with Sealed Air, the global pack a ging leader, a large USA

Cardia Bioplastics Limited Unit 18/35 Dunlop Road, Mulgrave, VIC 3170, Australia www.cardiabioplastics.com

SHAR E HOLDER UPDATE

December 2012

hygiene company, a global consumer goods company, B risbane City Council, and the Chi n ese city councils of Nanjing, Shanghai Pudon g , Hangzhou, and Yuhang. Other additional announcements w e have made to the market regarding partnerships with leading packaging companies, for example Alto Packa g ing and Polyden Folien, are all expected to le a d to on-going, long-term supply contracts as product sales ev e ntuate.

Most recently, we announced the successful contract win to supply $1.2 millio n per annum of Cardia’s Biohybrid[TM] renewable kitchen bags to the Shanghai Pudong City District that will di s tribute these products to initially 20% of households in that region. The win of this contract follows the e f fective six-month trial of Cardia’s products by a selected num b er of householders in this region earlier this ye a r. Shanghai Pudong is one of China’s high profile development areas and is recognised as the financial and co m mercial hub of the entire country. Penetrating into this crucial market opens up significant opportunities f or Cardia to expand the commercial rollout in Pudong, secu r e additional City Councils in China and expand our global distribution of organic waste management produc t s. As noted above, this contract follows the r ecent announcements of $500,000 per annum sales contract s to both an American hygiene products compa n y and a global consumer products company. Together thes e three contracts contribute to a significant portion of 2013 secured revenues.

The financial benefits of our strate g y execution are already evident. In FY2011, w h en very few of our sales were through long-term or repea t contracts; our annual sales revenue amou n ted to $1.65 million. In comparison, sales revenue for FY2 0 12 increased by 161%, to $4.30 million, in d i rect correlation with the confirmation of several long-term su p ply contracts.

Validation of our technical expertise and superior commercial product portfolio

Furthermore, and equally as imp o rtant, is that these long-term contracts, p a rtnerships and business development opportunities with major global and market-leading brand names provides us with strong validation of the technical perform a nce and commercial viability of our renewable resin technologies. The product development process withi n these companies is a lengthy and rigorous m u lti-step event. Successful progression to in-market validatio n and ultimately commercialisation is absolu t e confirmation that our product meets the required standar d s for technical and environmental performanc e , is cost-competitive and has passed specific product trials.

This substantial endorsement by glo b al giants and major industry players is invaluabl e . In addition to validating the technical and commercial appe a l of our technologies, it bolsters Cardia’s rep u tation as a credible and respected supplier in the growing bi o plastics industry. In time, we expect to see an accelerated uptake of our renewable resin products among ot h er companies who are looking to reduce their carbon footprint through sustainable packaging and plastic technologies.

Cardia Bioplastics Limited Unit 18/35 Dunlop Road, Mulgrave, VIC 3170, Australia www.cardiabioplastics.com

SHAR E HOLDER UPDATE December 2012

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Share Purchase Plan and working capital requirements

On 21 N o vember 2012, the Company announced a Shar e Purchase Plan (SPP). This has been extended and will now c lose on Thursday 20 December 2012. The S P P provides each eligible shareholder with the opportunity t o increase their holding in Cardia by subscribin g up to $15,000 worth of fully paid ordinary shares in the Company at a price of A$0.002 per share.

Funds raised under the offer will be used to finance the ongoing working ca p ital requirements of the Company.

On behalf of the Board of Directors o f Cardia, we look to shareholders to participat e in the offer and support the Company as it requires funds f o r working capital. It is expected that increase in sales will contribute to future working capital requirements of the company.

The amended time table for SPP is a s follows:

Closing Date Closing date for acceptances to be received by Cardia	20 December 2012 5.00 pm (AEST)
Shares Allotment and Dispatch of Holding Statement SPP Shares allotted and Despatch of holding statements to shareholders	27 December 2012

Next steps

Moving forward, the Company remains highly focused on executing and delivering o n our corporate strategy. We are confident with adequate ca s h resources, our sales pipeline has potential to expand into new markets and product lines. The global bioplas t ics market is a significant market, growing at a d ouble-digit rate. Cardia is poised to leverage this development with the potential to deliver strong growth.

We look forward to providing you with ongoing updates on our progress and we thank you for your continued support.

Yours faithfully,

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Pat Volpe Chairman

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Frank Glatz
Managing Director
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Cardia Bioplastics Limited Unit 18/35 Dunlop Road, Mulgrave, VIC 3170, Australia www.cardiabioplastics.com