MYECO GROUP LTD — Capital/Financing Update 2016

Mar 8, 2016

DATE: 9 March 2016

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

SECOS GROUP LIMITED LAUNCHES SHARE PURCHASE PLAN

Background to Share Purchase Plan

SECOS Group Limited (“SECOS” or the Group) has achieved a dramatic improvement in trading for first half of 2016 FY compared to the corresponding period for previous year[1] with the Group’s consolidated gross margin improving from -1.7% to 6.9% - a turnaround of A$0.96 million. The SECOS Board of Directors (“the Board”), having led the turnaround, are now focused on the Group achieving profitability by capitalising on major achievements over the first half of 2016 FY – gaining significant market acceptance of SECOS’ Waste Management Solutions, the re-start of Stellar’s Australian manufacturing plant and progress achieved with the development of Biohybrid[tm] film. These achievements form the basis of significant future business growth and the Board is now seeking further shareholder support to assist in realising that growth potential.

The Board is now pleased to announce SECOS’ Share Purchase Plan (“SPP” or “the Offer”) to provide eligible shareholders with the opportunity to increase their shareholdings via participation in the SPP to assist in funding SECOS’ anticipated growth. Eligible shareholders are being offered the opportunity to acquire up to $15,000 worth of SECOS shares at A$0.082 per share, which represents a 20% discount to the volume weighted average price of SECOS shares traded over the last 5 trading days prior to the announcement of the Offer.

Details of the Offer

Eligible shareholders, who held SECOS shares as at 7 pm (AEDT) on 8 March 2016 will have the opportunity to increase their shareholding in the Company at an issue price of A$0.082 per share (being a 20% discount to weighted average market price over last 5 trading days) without incurring brokerage, commissions or other transaction costs.

Eligible shareholders can participate in the SPP in respect of a range of amounts between A$1,000 and A$15,000 irrespective of the size of an eligible shareholder’s existing shareholding. Participation in the SPP is optional and the SPP is scheduled to close at 5.00pm (AEDT) 24 March 2016.

The SECOS Board intends to limit the total funds raised under the SPP to A$1.0 million. If the Company is required or decides to scaleback applications, then preference will be given to Eligible Shareholders who are still shareholders at the time of the Scaleback.

Significant achievements across all business units year to date include:

1. SECOS’ financial performance over the first half of 2016 FY reflects a significantly improved trading profile with an improvement in gross margin of A$0.96 million and a reduction in fixed costs of A$0.66 million[1] .

1 SECOS’ published trading results for the corresponding period included Stellar’s trading results only – Cardia’s trading results were excluded on the basis that the merger of the 2 businesses was a “reverse acquisition”. A “like for like” comparison (which demonstrates the gross margin improvement) includes Stellar and Cardia’s trading results for both periods.

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1. Stellar’s Australian based plant successfully re-started and now fully operational and has:

   • Generated annualised sales of $A4.8 million (from a base of zero sales given the Australian plant had been wound down).

   • More than 60% excess capacity still available to support ongoing growth of both Stellar and Cardia businesses. Current business development initiatives in India, the Middle East and the Philippines will result in increased sales and increased utilisation of the Australian plant over the second half of 2016 FY.

2. Successful completion of initial product trialing of Cardia Biohybrid[tm] films has resulted in several key tier 1 and tier 2 global hygiene customers now undertaking their own analysis with the view to placing orders. The early acceptance of Biohybrid[tm] films represents a major achievement for SECOS in that it:

   • consolidates the Company’s “first to market” position with Biohybrid[tm] films;

   • will drive increased use of Cardia resin – identified as a significant synergy for the merged business; and

   • will generate improved profitability through increased sales combined with strong margins.

3. Demand for Cardia’s dog waste bags has increased significantly with strong demand from major US based pet product wholesalers and retailers. Shipments are now being made directly from the Company’s Nanjing, China plant to our US customers. Turnover of dog waste bags is expected to double in the second half of 2016 FY to A$1.03 million (compared to the first half).

4. SECOS secured the consolidated group’s first debt funding facility - a debtor financing facility (A$2.1 million) to assist in funding the group’s anticipated growth. The establishment of the facility in mid-December will support trading in the second half of 2016 FY.

5. In addition to the above, SECOS continued to progress with realisation of synergies including economies of scale and improved production efficiency resulting from 3 strategically based manufacturing facilities in Australia, Malaysia and China.

The proceeds from the Offer will be utilised to fund SECOS’ anticipated growth, specifically:

1. Funding of $A400,000 to meet increased demand for polymer to support the growing order book which is expected to increase sales by $A2.25 million during the second half of 2016 FY.

2. Capital expenditure of $A300,000 to expand Cardia China’s manufacturing facility to meet increased demand for Cardia dog waste bags – related sales are expected to increase by $A514,000 during the second half of 2016 FY.

SECOS’ Executive Chairman, Richard Tegoni, said:

“This is a very exciting time for SECOS in terms of the growth potential going forward, particularly the re-launch of Stellar Australia’s manufacturing operations and the market now fully embracing SECOS’ sustainable Waste Management product range.

These achievements, along with the realisation of several of the key synergies identified during the merger process, underpins the improvement in the Group’s trading profile.

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With achievements thus far, the SECOS Board of Directors is focussed on continuing the Group’s improved trading performance across all business units to achieve profitable trading and generation of free cashflow.

Finally, I believe there is much for our shareholders to embrace and I take the opportunity of thanking the shareholder base for their longstanding support and loyalty. Further, this Offer provides our shareholders with a great opportunity to increase their investment in SECOS on favourable terms.

SECOS’ directors have committed to support the Offer by taking up their entitlement.”

A copy of the SPP booklet will be posted to Eligible Shareholders in due course. Patersons Securities Limited is the Lead Manager for the SPP.

For more information please contact:

Mr Richard TegoniExecutive ChairmanSECOS Group Limited(614)11110901	Ms Rekha BhambhaniCompany SecretarySECOS Group Limited(613) 8566 6800	Advanced Share Registry Ltd(618) 93898033

About SECOS

SECOS (ASX code SES) was formed in April 2015 by the merger of the business operations of Cardia Bioplastics Limited, a company listed on the ASX and the Stellar Films Group of companies. .

SECOS’ core business comprises the manufacture of sustainable resins and films for specific core markets comprising:

1. Sustainable films and packaging products targeting the hygiene sector.

2. Sustainable waste management solutions.

SECOS’ current operations are supported by:

1. Manufacturing plants in Australia, Malaysia and China – all strategically located to support SECOS’ target markets.

2. A global sales and distribution network with a presence in 27 countries.

3. Strong intellectual property and patent position on technology and comprehensive range of high performance sustainable products.

4. Highly focused management team with internationally recognized industry experts in sustainable packaging.

This announcement has been prepared for publication in Australia and may not be released in the United States. This announcement does not constitute an offer of securities for sale in the United States and any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration.