MYECO GROUP LTD — Interim / Quarterly Report 2012

Oct 27, 2011

ACN 064 755 237

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TO : COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

DATE : 28 October 2011

QUARTERLY REPORT – 30 September 2011

The Cardia Bioplastics Limited (“Cardia or Company”) Quarterly Report for the September Quarter 2011 consists of the Activities Report & Quarterly Cash Flow (Appendix 4C)

Review of Operations for September 2011 Quarter:

Cash at hand:

The consolidated cash position of the group at 30 September 2011 was $2,580,196 (June 2011 $4,155,000)

Sales - Record Sales for the quarter.

Sales of $1,415,432 for the September 2011 quarter represented a 276% increase compared to the same quarter for 2010.This accorded with the expected growth in the Bioplastics’ industry with global double digit growth expected to continue in 2012.

• Sales for September 2011 quarter was $1,415,432, an increase of 276% compared to same period in September 2010 of $375,620.

• Sales increased by 167% from June 2011 quarter sales of $530,592.

• Annual sales for F2011 were $1.65m with annual sales for FY2012 expected to triple to around $5m annualised.

Working Capital

Net operating cash outflow during the quarter of $1,578,000 (June 2011 $883,000) was $695,000 greater than the June 2011 quarter. During the quarter the Company received a Research & Development tax rebate of $354,000. On the expenditure side, the Company made a number of larger strategic purchases of raw materials that was recently delivered at the Company’s Nanjing plant. These bulk purchases, that provide the raw material necessary to service the burgeoning sales referred above, contributed to an increase in raw material payments during the quarter of $630,000. Other working capital, held in the form of finished product and trade receivables accounted for a further $420,000 in funding by the Company. Cash movements associated with all other activities were broadly consistent with the June 2011 quarter.

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Manufacturing

China: planned manufacturing capacity increase:

• One of two extruders was ordered in the quarter and is expected to be delivered to the Nanjing facility by December 2011.

• A second extruder is expected to be available for purchase in the first quarter of 2012.

• On installation of both extruders, manufacturing capacity will increase to 11,200t p.a. in line with the Board’s strategy to double current capacity.

Malaysia Activities

Joint Venture Film and Carrier bag – finished goods manufacturing facility:

• The Malaysian JV has purchased manufacturing equipment which is expected to be installed and operational by December 2011.

• The JV‘s manufacturing facilities are scheduled to be opened and launched in first quarter of 2012.

Cardia Bioplastics Malaysia

• Malaysian Government’s Biotechnology Corporation grants BioNexus status with the potential to qualify for ten years tax free status.

• Marketing efforts accelerated in Malaysia in September 2011 quarter with sales expected to follow in first quarter of 2012.

Global Distribution arrangements

Following a review of Cardia’s global distribution network, all distributors are now structured on a non-exclusive basis. Also moving forward, Cardia will seek to expand its global sales presence by increasing its sales staff.

Global development projects to convert conventional plastics packaging to Bioplastics packaging:

At the end of the quarter Cardia was involved with in excess of 30 product development applications around the world, comprising at least 15 global or known brand owners and packaging companies.Cardia expects that some of these development projects should convert to commercial sales by FY2012, however this cannot be assured. If the company does enter into any commercial arrangements, then the market will be informed.

PAT VOLPE Chairman

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About Cardia Bioplastics

Cardia Bioplastics Limited (“Cardia”) develops, manufactures and markets sustainable resins and finished products derived from renewable resources for the global packaging and plastic products industries. The company holds a strong provisional patent portfolio to drive its mission to be an international supplier of technically advanced sustainable resins made from renewable resources. Cardia has its Headquarters and Global Applications Development Centre in Melbourne, Australia. The Product Development Centre and manufacturing plant is in Nanjing, China. Cardia offices are located in Europe, Malaysia, China and the Americas. These offices complement a network of leading distributors across Australia, the Americas, Asia and Europe. The company’s growth is fuelled by the global trend towards sustainable packaging. Cardia gives customers the choice of using sustainable Cardia Biohybrid™ resins or Compostable resins for their packaging or plastic product applications. As a service to customers, the Cardia Bioproducts’ team offers design, development and production of ready to use finished goods, such as film and bag products. The company’s materials are suitable for film, injection moulding, blow moulding, foam, extrusion and coating applications.

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Appendix 4C

Quarterly report for entities admitted

on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity
Cardia Bioplastics Ltd
ABN 89 064 755 237	Quarter ended (“current quarter”)
89 064 755 237	30 September 2011

Consolidated statement of cash flows

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Current quarter Year to date (3 months)
Cash flows related to operating activities $A’000 $A’000
1.1 Receipts from customers 1,083 1,083
1.2 Payments for (a) staff costs (410) (410)
(b) advertising and marketing (19) (19)
(c) research and development (235) (235)
(d) leased assets (62) (62)
(e) other working capital (2,315) (2,315)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature
received 26 26
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other (provide details if material) 354 354
Net operating cash flows (1,578) (1,578)
1.8 Net operating cash flows (carried forward)
Cash flows related to investing activities
1.9 Payment for acquisition of:
- -
(a)businesses (item 5)
- -
(b) equity investments
- -
(c) intellectual property
(d) physical non-
current assets (17) (17)
(e) other non-current - -
assets
1.10 Proceeds from disposal of:
- -
(a) businesses (item 5)
- -
(b) equity investments
- -
(c) intellectual property
- -
(d) physical non-
current assets
(e) other non-current - -
assets
1.11 Loans to other entities - -
1.12 Loans repaid by other entities - -
1.13 Other investing activities - -
Net investing cash flows (17) (17)
1.14 Total operating and investing cash flows (1,595) (1,595)
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Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (provide details if material) Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.21 1.23 Cash at end ofquarter	(1,595) 4,155 20	(1,595) 4,155 20
	2,580	2,580

Note:

• 1.7 Research & Development Tax Rebate of $354K for the year ending 30 June 2010 was received during the quarter by the Company’s wholly owned subsidiary Cardia Bioplastics (Australia) Pty Ltd.

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 1.25		Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.11	Current quarter $A'000
			178
			-
1.26		Explanation necessaryfor an understandingof the transactions
		Item 1.24 Mr P Volpe was paid a salary of $69,488 inclusive of superannuation for the quarter. Mr F Glatz was paid a salary of $76,664 inclusive of superannuation for the quarter Directors’ fees (inclusive of superannuation) totalling $28,613 were paid to Mr P Volpe - $14,988 and , Mr John Scheirs-$13,625 During the Quarter, amount of $3,615 (Ex GST) was paid to Excelpas Pty Ltd, a company controlled by Dr.John Scheirs for providing consultancy services to the Company.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

n/a

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Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	n/a	n/a
	n/a	n/a

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank * 4.2 Deposits at call 4.3 Bank overdraft 4.4 Term Deposits 4.5 Deposits against Letter of Credits	2,330	1,153
	2	2
	-	-
	-	3,000
	248	-
Total: cash at end of quarter(item 1.23)	2,580	4,155

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	-	-
	-	-
	-	-
	-	-
	-	-

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: Sd-....................................................... Date: 28 October 2011. (Company Secretary) Print name: Rekha Bhambhani

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Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.

3. 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss

4. 9.2 - itemised disclosure relating to acquisitions

5. 9.4 - itemised disclosure relating to disposals

6. 12.1(a) - policy for classification of cash items

7. 12.3 - disclosure of restrictions on use of cash  13.1 - comparative information

8. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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