VINYL GROUP LTD — Capital/Financing Update 2011

Apr 4, 2011

5 April 2011

==> picture [175 x 109] intentionally omitted <==

NOTICE TO INELIGIBLE SHAREHOLDERS

Dear Shareholder

MOBILARM LIMITED RIGHTS ISSUE – NOTICE TO INELIGIBLE SHAREHOLDERS

On 1 April 2011, Mobilarm Limited ( Mobilarm ) announced a non-renounceable rights issue ( Rights Issue ) of 1 fully paid ordinary share in Mobilarm ( New Shares ) for every 2.55 Mobilarm shares held by shareholders at an issue price of A$0.05 per New Share. The Record Date for the Rights Issue is 13 April 2011 ( Record Date ).

The Rights Issue is to be implemented under section 708AA of the Corporations Act 2001 (Cth) (Corporations Act), as modified by ASIC Class Orders CO07/571 and CO08/35. The Rights Issue will raise up to approximately A$3.2 million and is partially underwritten by Dutch Ink (2010) Pty Ltd for a maximum of $2,131,255 (or 42,625,100 shares).

Documents relating to the Rights Issue were lodged with the ASX today and will be mailed to Eligible Shareholders (as defined below in the section headed “Eligibility Criteria”).

Details of the Rights Issue

The Rights Issue is being made to Eligible Shareholders (as defined below in the section headed “Eligibility Criteria”), on the basis of 1 New Share for every 2.55 Mobilarm shares held on the Record Date.

Eligibility Criteria

Mobilarm has determined, pursuant to Listing Rule 7.7.1(a) of the ASX Listing Rules and section 9A of the Corporations Act, that it would be unreasonable to make offers to shareholders in all countries in connection with the Rights Issue. Accordingly, in compliance with ASX Listing Rule 7.7.1(b), Mobilarm wishes to advise you that it will not be extending the Rights Issue to you and you will not be able to subscribe for New Shares under the Rights Issue.

Shareholders who are eligible to participate in the Rights Issue ( Eligible Shareholders ) are shareholders who:

(a) acquired existing shares prior to the first date on which fully paid ordinary shares in Mobilarm traded without the entitlement to participate in the Rights Issue; and

TEL.
+61
8
9315
3511 MOBILARM
LIMITED
(ABN
15
106
513
580) FAX.
+61
8
9315
3611 768
CANNING
HIGHWAY
PO
BOX
1533
APPLECROSS
6953
WESTERN
AUSTRALIA WWW.MOBILARM.COM INFO@MOBILARM.COM

• (b) continue to be registered holders of the existing shares as at 5:00 pm (WST) on the Record Date; and

• (c) have a registered address in Australia or New Zealand; and

• (d) are not in the United States and are not “U.S. persons” (as defined by Regulation S made under the United States Securities Act of 1933, as amended) ( U.S. Persons ) and are not acting for the account or benefit of U. S. Persons; and

• (e) are eligible under all applicable securities laws to receive an offer under the Rights Issue.

Unfortunately, as you do not satisfy the eligibility criteria for an Eligible Shareholder stated above, you will not be able to subscribe for New Shares under the Rights Issue.

Furthermore, as the Rights Issue is non-renounceable, you will not receive any payment or value for entitlements in respect of any New Shares that would have been offered to those Shareholders if they were eligible.

This notice is to inform you about the Rights Issue. This letter is not an offer to issue New Shares to you, nor any invitation for you to apply for New Shares. You are not required to do anything in response to this letter.

Shareholders with any queries should contact the Company Secretary, Mr David McArthur.

Yours faithfully

MOBILARM LIMITED

==> picture [100 x 38] intentionally omitted <==

DAVID McARTHUR

Company Secretary

Phone: +61 8 9423 3200

This notice does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any “U.S. Person” (as defined in Regulation S under the United States Securities Act of 1933, as amended (“Securities Act”) (“U.S. person”)). Neither the rights nor the New Shares have been or will be registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States. The rights may be not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons. The new Shares may not be offered, or sold, or resold, in the United States or to, or for the account or benefit of, a U. S. Person except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any applicable securities laws of any state or other jurisdiction of the United States.

The provision of this document is not, and should not be considered as, financial product advice. The information in this document is general information only, and odes not take into account your individual objectives, taxation position, financial situation or needs. If you are unsure of your position, please contact your accountant, tax adviser, stockbroker or other professional adviser.

2