MYECO GROUP LTD — Management Reports 2014

Mar 31, 2014

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED DATE: 01 April 2014

SHAREHOLDER UPDATE

Attached Shareholder Update Letter had been dispatched today to all Cardia Shareholders.

Richard Tegoni Chairman

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SHAREHOLDER UPDATE April 2014

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Dear Shareholder,

The Financial Year 2014 to date has seen significant progress for Cardia Bioplastics in sales, commercialisation and technical development. We are writing to update you on the key achievements delivered so far and the priorities that the Cardia Bioplastics Board of Directors has committed to for the reminder of the Financial Year 2014 and beyond.

As a developer and manufacturer of bioplastic resins and finished products derived from renewable resources Cardia delivers solutions to the global packaging, plastic products and waste management industries, as well as States and Councils around the world. Derived from renewable sources, Cardia’s proprietary Compostable and Biohybrid™resins reduce the carbon footprint of plastic products and packaging by up to 50% and offer comparable performance. Cardia’s products are accepted as cost effective alternatives to petrochemical based plastics.

Cardia’s sustainable resin products have been specifically developed for a broad range of industrial and consumer packaging applications, including flexible film, bag, injection moulding, blow moulding, foam, and extrusion applications. Cardia’s target markets include users of Carrier Bags, Films & Packaging and Waste Management Products. Cardia offers customers the choice of either Compostable or Biohybrid™resins for their own production or finished Bioproducts like films and bags for their direct use.

Growth Through Strong Relationships

The Bioplastics industry is experiencing growth in excess of 20% p.a. Growth is being driven by a combination of governments, brand owners and consumers seeking a lower carbon footprint, improved waste management solutions and increased use of renewable raw materials.

Cardia has developed commercial relationships with leading global packaging manufacturers that have successfully adapted Cardia’s Compostable and Biohybrid™resins for commercial packaging applications. After 5 years of product development work, Cardia has in place partnerships for sustainable packaging and achieved commercial sales to the following leading global brands and Councils: Sealed Air, Procter & Gamble, KimberlyClark, Nestlé, Colgate-Palmolive, Henkel, Breville, McDonalds, Toyota, Jusco, Johnson & Johnson, 7-Eleven and KFC. Shanghai-Pudong, Nanjing, Brisbane and Hangzhou Councils.

Cardia is well positioned for growth in its target markets as its key customers are now in market using Cardia products and have started expanding the use of these products across their different product ranges. New customers are expected to adopt Cardia’s bioplastic packaging and follow the trend towards more sustainable packaging. In addition, more and more Councils around the world are expected to adopt organic waste diversion practices.

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

The quality sustainable choice

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SHAREHOLDER UPDATE

April 2014

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Nanjing Councils Pacific Springs Truly Green So Delicious® Dairy Free Drogaria Araujo China Australia The Maldives USA Brazil Examples of Cardia Bioplastics recent market launches and announcements

2014 Wins & Focus

Cardia Bioplastics is fully focused on achieving break-even profitability through increasing sales in its target markets of Carry Bags, Films & Packaging and Waste Management Products where it has a proven commercial track record.

Cardia has made significant progress this year by signing several strategic supply agreements with global customers including:

• Ricoy Supermercados & Drogaria Araujo - Brazil (A$1.4M/a sales forecast)

• Nanjing Jinaye & Qixia Districts - China (A$1.4M/a sales forecast)

• EcNow Tech - USA (A$0.4M/a sales forecast)

• Pacific Springs - Australia

• Yukon Spring & Norcan Flexible Packaging – Canada

• Ecoriginals - Australia

• So Delcious® Dairy Free - USA

• Truly Green – The Maldives

All these customers have committed to Cardia Bioplastics supply as we meet their price, performance and environmental criteria.

Waste Management Systems and Hygiene Films

Cardia Bioplastics is very active in the markets of waste management products and hygiene films. Based on the supply contracts in place it forecasts sales of >A$1M for each business segment (excluding China Council sales). In order to support this business Cardia set up a fully integrated product supply from resin to certified compostable and Biohybrid™films and bags that ensures product quality and cost competiveness. In addition, Cardia employed sales resources in Australia to grow this business and confirmed initial success. In order to meet growing sales, Cardia will double film extrusion and bag making capacity with further expansion committed.

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

The quality sustainable choice

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SHAREHOLDER UPDATE April 2014

Strong Patent Family & International Awards

During the year Cardia Bioplastics secured patent protection for its Cardia Compostable resin family of products from the United States Patent and Trademark Office and thereby expanded its growing intellectual property portfolio of 11 patent families, with 12 patents so far granted in key markets. The patents protect the composition formulation and manufacturing process invented by Cardia’s R&D team.

Cardia Bioplastics was awarded the IAIR Green Excellence Award, one of the world's leading ranking and prize for excellence in global economy and sustainability. This Award is recognition of Cardia’s ability to develop leading sustainable solutions in packaging.

Non-Renounceable Rights Issue

On 6 March, Cardia Bioplastics announced a non-renounceable rights issue to raise approximately A$2,700,000 (before costs and expenses of the offer). The funds raised from the Rights Issue will provide additional cash required for the Cardia Bioplastics business, in particular to fund the expansion of finished films and bags production capacity, Nanjing factory moving costs, development projects currently undertaken with global retail and packaging companies, future development projects, maintenance of its existing patent portfolio, other general working capital requirements.

We encourage you to review the prospectus and consider whether you would like to participate in the rights issue or not. Below is a link to the Cardia Bioplastics investor presentation that is currently being presented to a number of sophisticated investors and stock brokers that have expressed interest to participate in Cardia Bioplastics current fund raising. http://www.cardiabioplastics.com/media

Moving forward, the Company remains highly focused on executing and delivering on our corporate strategy. We are confident we will accelerate our global product commercialisation and will continue to deliver further long-term sales contracts with major customers as product sales eventuate. The global bioplastics market continues to be an emerging market with its inherent lack of predictability, however it is now growing at a double-digit rate. With our strong focus on the Bioplastics business, Cardia is poised to leverage its sales pipeline to deliver strong growth.

In order to ensure that all our communication will reach you, can you please provide us with your email address to info@cardiabioplastics.com By providing your email address you consent to receive shareholder communication from Cardia Bioplastics by electronic means. We will only use your email details to communicate news and shareholder updates to you.

We thank you for your continued support.

Yours faithfully,

Richard Tegoni Chairman

Frank Glatz Managing Director

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

The quality sustainable choice