SUN CAPITAL GROUP LTD

ABN 60 006 569 124

NOTICE OF GENERAL MEETING including EXPLANATORY STATEMENT and PROXY FORM

DATE AND TIME OF MEETING

12 December 2005 at 10.00am EST

Level 5, 33 York Street Sydney NSW 2000

Notice of Annual General Meeting and Explanatory Memorandum

Notice is hereby given that a General Meeting of the Company will be on Monday, 12 December 2005 commencing at 10.00am (EST) at the company's registered office, Level 5, 33 York Street, Sydney, NSW 2000.

The Explanatory Memorandum which accompanies and forms part of this Notice describes the matters to be considered at the General Meeting.

AGENDA

Business

Resolution 1 - Participation by Directors in a Capital Raising

To consider and, if thought fit, pass the following resolution, with or without amendment, as an ordinary resolution:

"That, for the purposes of Chapter 2E of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, the Company approves the participation by the Directors in a Capital Raising by the Company on the terms set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast on this resolution by the Directors of the Company and any of their associates, however, the Company need not disregard a vote if it is cast by a person as a proxy for a person in accordance with the directions on the proxy form, or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

DATED THIS 8^th DAY OF NOVEMBER 2005

BY ORDER OF THE BOARD

EMMANUEL CORREIA DIRECTOR

EXPLANATORY MEMORANDUM

This Explanatory Memorandum forms part of a Notice of Meeting convening a General Meeting ("the Meeting") of shareholders of Sun Capital Group Limited ("Sun Capital" or the "Company") to be held on Monday, 12 December 2005 at 10.00am (EST). This Memorandum is to be read in conjunction with the Notice of Meeting.

$1.0$ Resolution 1 - Approval for Directors Participation in Capital Raising

$1.1$ Background

On 18 October 2005, the Company advised of its intention to undertake a combined sophisticated investor and shareholder purchase plan capital raising.

On 25 October 2005, the Company advised that it would seek shareholder approval for the participation by the Directors of the Company in the proposed sophisticated investor capital raising ("Capital Raising").

The Capital Raising has been set at \$0.055 per Share together with one free attaching option to acquire a Share ("Option") for every two Shares subscribed for.

The Directors have undertaken, subject to shareholder approval, to invest a minimum of \$300,000 in the Capital Raising. The maximum amount the directors can contribute toward the Capital Raising is \$600,000.

The ASX Listing Rules and the Corporations Act set out a number of regulatory requirements which must be satisfied in order for the Directors to participate in the Capital Raising. These are set out below.

$1.2$ ASX Listing Rule Requirements

If Resolution 1 is passed, securities will be issued to directors of the Company. Pursuant to Listing Rule 10.11 an entity must not issue nor agree to issue securities to a related party of the Company (including a director) without first obtaining shareholder approval, unless one of the exceptions detailed in Listing Rule 10.12 applies (none of which are applicable).

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares as approval is being obtained under ASX Listing Rule 10.11. The issue of the Shares to the directors will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

For the purpose of Listing Rule 10.13, the following information is provided in relation to Resolution 1:

• $(a)$ The Directors resolved, subject to shareholder approval, to allow the directors to participate in the Capital Raising up to a combined maximum of \$600,000, being the issue of a maximum 10,909,090 Shares and 5,454,545 Options.
• The actual number of Shares and Options that he Directors may be issued has not been $(b)$ determined as at the date of preparing this Notice. However, the maximum number of Shares and Option that may be subscribed for by each of the Directors is set out below:

• $(c)$ The maximum Capital Raising participation amount has been set based on indications received by the Directors as to their potential participation levels and having regard to the overall size of the Capital Raising.
• The issue of the Shares and Options will occur no later than 1 month after the date of the $(d)$ Meeting, or such longer period as ASX may approve in the event that the Company for a waiver to the relevant Listing Rule.
• The issue price of the Shares will be \$0.055 each. With every two Shares subscribed for, one $(e)$ free Option will also be issued.
• The Shares will rank equally with the Shares currently on issue and the terms of the Options are $(f)$ set out in Section 1.6 of this Explanatory Statement.
• The funds raised by the issue of Shares will be used by the Company to fulfil its obligations $(q)$ toward its newly created USA based joint venture as announced to the market on 18 October 2005.

$1.3$ Chapter 2E of the Corporations Act 2001

The Company is seeking shareholder approval for the purposes of Chapter 2E of the Corporations Act in respect of the proposed participation by the directors of the Company in the Capital Raising.

In accordance with the requirements of Chapter 2E of the Corporations Act, and in particular, Section 219 of the Corporations Act, the following information is provided to allow shareholders to assess the proposed participation by the Directors in the Capital Raising:

• $(a)$ The related parties to whom the proposed resolutions would permit the financial benefit to be given are:
• $(1)$ Mr Paul Harris:
• $(ii)$ Mr Clive Barrett:
• $(iii)$ Mr Emmanuel Correla; and
• $(iv)$ Mr Roger Smith.
• $(b)$ The maximum number of Shares and Options able to be subscribed for by the directors of the Company (being the nature of the financial benefit being provided) is 10,909,090 and 5,454,545 respectively. As at the date of this Notice of Meeting, the directors have not finalised their individual subscription amounts, if any.
• Each Director declines to make a recommendation in relation to the outcome of the resolution $(c)$ due to them each having a material personal interest in the outcome of the Resolution.
• The Company's share price has traded on ASX during the last 12 months in the range of \$0.04 $(d)$ cents on 28 June 2005 and \$0.09 on 7 December 2004. The last closing share price was \$0.055 on 31 October 2005.
• If all of the Options granted pursuant to the Resolution 1 were exercised, the effect would be to $(e)$ increase the Company's cash reserves and dilute the shareholding of existing shareholders. The dilution, based upon the current fully diluted issued capital is approximately 3.5%.
• $(f)$ As at the date of preparation of the Explanatory Memorandum the issue price of the Shares is equal to and the exercise price of the Options is higher than the last traded Share price of \$0.055 and the prevailing 30 day weighted average share price of the Company's securities of \$0.053. Accordingly, the directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in issuing the Shares or Options under Resolution 1.

A B N 60 006 569 124

• $(g)$ The value of the Options to be issued with every two Shares subscribed for under the Capital Raising has been calculated by applying the Black and Scholes option pricing model. The principal assumptions used in this model are as follows:
• Current Sun Capital Share price of \$0.055 at 31 October 2005:
• Option conversion price of \$0.07;
• Time to expiry of Option of 36 months:
• The average current risk-free or government bond interest rate prescribed by the Reserve Bank of Australia of approximately 5.8% has been used in calculating the ascribed value; and
• A volatility rate of 75% has been used because it represents the approximate historical volatility of the Shares as traded on ASX in the last 12 months.

Based on the above, the value of an Option is calculated as approximately \$0.026. Therefore the value of the combined maximum financial benefit, based on the maximum number of Options issued is \$142,000 (i.e. 5,454,545 Options multiplied by \$0.026).

$1.4$ Directors Remuneration

The Company pays the following remuneration to each of the directors:

• $(a)$ Mr Clive Barrett, in his capacity as executive director will not receive a director's fee.
• $(b)$ Mr Paul Harris, in his capacity as non executive chairman, is to be paid director's fees. As at the date of this notice no director's fee has been paid or agreed to be paid to Mr Harris for the current financial year as the non-executive directors' fees have not been set by the board.
• $(c)$ Mr Emmanuel Correia in his capacity as non executive director is to be paid director's fees. As at the date of this notice no director's fee has been paid or agreed to be paid to Mr Correia for the current financial year as the non executive directors' fees have not been set by the board. Mr Correia is also the Company Secretary of the Company and for the provision of this service is paid \$6,000 per calendar month.
• Mr Roger Smith in his capacity as non executive director is to be paid director's fees. Mr Smith $(d)$ has received director's fees totalling \$16,000 during the 2005 financial year which relate to services provided in the 2004 financial year (2004, Nil). As at the date of this notice no director's fee has been paid or agreed to be paid to Mr Smith for the current financial year as the non executive directors' fees have not been set by the board.

$1.5$ Director's Securities

• $(a)$ Mr Clive Barrett is a shareholder of the Company and currently holds 12,550,000 Shares and nil options.
• Mr Paul Harris is a shareholder of the Company and currently holds 1,358,000 Shares and nil $(b)$ options.
• $(c)$ Mr Emmanuel Correia is a shareholder of the Company and currently holds 494,524 Shares and nil options.
• $(d)$ Mr Roger Smith is a shareholder of the Company and currently holds 528,500 Shares and nil options.

Option Terms $1.6$

Each Option will entitle the holder to subscribe for a Share in the Company on the following material terms:

$(a)$ The Options shall expire at 5,00pm EST on that date which is approximately 36 months from the anniversary of their issue (Option Expiry Date). The actual expiry date will be the same date as the Options proposed to be issued by the Company under the Capital Raising. The Options may be exercised at any time prior to the Option Expiry Date.

• $(b)$ The Options shall be exercisable at a price of \$0.07 each payable in cash.
• $(c)$ An Option does not confer the right to a change in the exercise price or a change in the number of underlying securities over which the Option can be exercised.
• $(d)$ The Options shall only be exercisable wholly or in part by executing and forwarding to the Company an Option Exercise Form.
• $(e)$ There are no participating rights, or entitlements inherent in the Options to participate in any new issue or bonus issue of securities which may be offered to members of the Company from time to time prior to the Option Expiry Date.
• $(f)$ Option holders have the right to exercise their Options prior to the date of determining entitlements to any capital issue to the then existing shareholders of the Company made during the currency of the Options. Prior to any new pro rata issue of securities to Shareholders. holders of Options will be notified by the Company in accordance with the requirements of the ASX Listing Rules.
• In the event of any reconstruction (including consolidation, sub-division, reduction or return) of $(a)$ the issued capital of the Company, the Options will be re-organised in accordance with the Listing Rules applicable at the time of the re-organisation.
• $(h)$ Application of official quotation of the Options will be made by the Company in the event that the Company meets the quotation criteria as set out in the ASX Listing Rules. In addition. application for official quotation of the shares allotted and issued pursuant to the exercise of the Options will be made by the Company within three (3) business days after the date of allotment of such shares.
• Shares allotted and issued pursuant to the exercise of the Options will be allotted and issued no $(i)$ more than 15 days after the receipt of a property executed exercise notice and receipt of the application moneys.
• A statement will be issued for the Options. Attached to the statement there will be a form that $(i)$ must be executed and forwarded to the Company when exercising the Options.

$\overline{2}$ . ENQUIRIES

Shareholders are invited to contact the Company Secretary on (02) (9252 8455) if they have any queries in respect of the matters set out in these documents.

GLOSSARY

ASIC means Australian Securities and Investments Commission.

ASX means Australian Stock Exchange Limited.

A\$ means Australian Dollars.

Board means the board of directors of the Company.

Capital Raising means a capital raising to be undertaken by the Company by the issue of Shares at an issue price of \$0.055 per Share together with 1 free Option for every 2 Shares subscribed for.

Company and Sun Capital means Sun Capital Group Limited (ABN 60 006 569 124).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Memorandum means the explanatory memorandum accompanying the Notice.

General Meeting means the meeting convened by the Notice.

Listing Rule means a Listing Rule of ASX.

Notice means the Notice of Meeting accompanying this Memorandum.

Option means an option to acquire a Share in the Company on the material terms and conditions set out in Section 1.7 of the Explanatory Statement.

Schedule means a schedule of this Notice and Explanatory Memorandum.

Share means a fully paid ordinary share in the capital of the Company.

US\$ means United States of America Dollars

APPOINTMENT OF PROXY

INVe ....................................

being a member/members of Sun Capital Group Limited hereby appoint

The Chairman of The meeting (mark with an 'X") OR

Write the name of the person you are appointing if this person is someone other han the Chairman of the Meeting.

or failing the person named attending the meeting, or if no person is named, the Chairman of the meeting as my/our proxy to act generally at the meeting on my/our behalf and to yote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at a General Meeting of the Company to be held on Monday, 12 December 2005 at 10.00 am and at any adjournment of that meeting.

IMPORTANT:

If the Chairman of the Meeting is to be your proxy and you have not directed your proxy how to vote on a Resolution, please place a mark in this box. By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of these items and that votes cast by him, other than as a proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on these items and your votes will not be counted in computing the required majority if a poll is called on these Items. The Chairman intends to vote undirected proxies in favour of each Item.

Voting directions to your proxy - please mark "X" to indicate your directions

This form must be signed by the securityholder. If a joint holding, both securityholders must sign. If signed by the securityholder's attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the securityholder's constitution and the Corporations Act 2001 (Cwlth).

Notes:

• Voting Entitlements: For the purposes of the Corporations Act 2001, the Directors have set a snapshot date to $\mathbf{1}$ determine the identity of those entitled to attend and vote at the meeting. The snapshot date is the close of business on 10 December 2005
• To be effective, the proxy form must be received by the Company at its registered office, Level 5, 33 York $\mathcal{P}$ Street. Sydney NSW 2000, or received by facsimile on (02) 8916 6732 not less than forty-eight (48) hours before the time for holding the meeting.
• 1. A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member's voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.
• A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sian. $\overline{4}$ .
• Corporate shareholders should comply with the execution requirements set out on the Proxy Form or 5. otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:
• 2 directors of the company;
• a director and a company secretary of the company; or
• for a proprietary company that has a sole director who is also the sole company secretary that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seat must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

• A proxy need not be a member of the Company. 6.
• Completion of a Proxy Form will not prevent individual shareholders from attending the meeting in person if $7¹$ they wish. Where a shareholder completes and lodges a valid proxy form and attends the meeting in person, then the proxy's authority to speak and vote for that shareholder is suspended while the shareholder is present at the meeting.
• Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under 8. power of attorney, the power of attorney must be lodged in like manner as this proxy.