LARK DISTILLING CO. LTD — Proxy Solicitation & Information Statement 2007

Mar 22, 2007

MONTEC INTERNATIONAL LIMITED ABN 62 104 600 544

NOTICE OF GENERAL MEETING

Incorporating

EXPLANATORY MEMORANDUM

and

PROXY FORM

CONTENTS

SECTION 1 - NOTICE OF GENERAL MEETING
SECTION 2 - EXPLANATORY MEMORANDUM
SECTION 3 - GLOSSARY
PROXY FORM
INSTRUCTION FOR COMPLETING OF PROXY FORM14

SECTION 1 - NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of the members of Montec International Limited (Montec or Company) will be held at the offices of Deacons at 1 Alfred Street, Circular Quay, Sydney, New South Wales at 11.30 am on Monday, 23 April 2007.

The Explanatory Memorandum which accompanies and forms part of this Notice describes in more detail the matters to be considered. Shareholders should read the Explanatory Memorandum in full. Words used in this Explanatory Memorandum will, unless the context otherwise requires, have the same meaning.

AGENDA

Item 1 - Ratification of Previous Issues of Securities

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

"That for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders approve the issue of equity securities by the Company before the date of this Meeting, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting."

Item 2 - Approval of Further Issues of Securities

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

"That for the purposes of ASX Listing Rule 7.1 and for all other purposes. Shareholders approve the issue up to 11.5 million fully paid ordinary shares at \$0.05 per Share and up to 11.5 million Attaching Options to investors, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting."

Item 3 - Approval of Issue of Options to Mr Terry Cuthbertson

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

"That for the purposes of Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 5 million Options to Mr Terry Cuthbertson, a director of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting."

Item 4 - Approval of Issue of Options to Mr Peter Herd

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

"That for the purposes of Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 5 million Options to Mr Peter Herd, a director of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meetina."

Item 5 - Approval of Issue of Options to Dr Xuegin Du

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

"That for the purposes of Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 3 million Options to Dr Xuegin Du, a director of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meetina."

Item 6 - Approval of Issue of Options to Mr James Manny

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

"That for the purposes of Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 1.6 million Options to Mr James Manny, a director of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting."

Item 7 - Approval of Issue of Options to Mr Lin Yuansheng

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

"That for the purposes of Listing Rule 10.11 and for all other purposes. Shareholders approve the issue of 1.6 million Options to Mr Lin Yuansheng, a director of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting.'

Item 8- Approval of Issue of Options to Mr Ian Maltman

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

"That for the purposes of Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of 3 million Options to Mr Ian Maltman, a senior executive of the Company, as detailed in the Explanatory Memorandum which accompanies and forms part of the Notice of this Meeting."

Voting Exclusion Statement

The Company will disregard any votes cast on:

• Item 1, by any person who participated in the issue of the equity securities described in Item 1, and their associates.
• Item 2 by any person who may participate in the proposed issue of the Shares and Attaching Options described in Item 2 and any person who might obtain a benefit. except a benefit solely in the capacity of a holder of Shares, if the resolution is passed.
• Item 3 by Mr Terry Cuthbertson and his associates.
• Item 4 by Mr Peter Herd and his associates.
• Item 5 by Dr Xuegin Du and her associates. $\bullet$
• Item 6 by Mr James Manny and his associates.
• Item 7 by Mr Lin Yuansheng and his associates.

• Item 8 by Mr Ian Maltman and his associates and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if the resolution is passed.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the Meeting as 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 23 March 2007

By order of the Board

NJV Geddes Company Secretary

NOTES

How to vote

A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote on the member's behalf. If the member is entitled to cast two or more votes at the meeting, the member may appoint not more than two proxies to attend and vote on the member's behalf. A proxy need not be a member of the Company.

If a member appoints two proxies, each proxy shall be appointed to represent a specified proportion or number of the member's votes. In the absence of such a specification, each proxy will be entitled to exercise half the votes.

To appoint a proxy (or two proxies), a proxy form must be signed by the member or the member's attorney duly authorised in writing.

To be effective, a proxy form (and, if it is signed by an attorney, the authority under which it is signed or a certified copy of the authority) must be received by the Company not later than 24 hours prior to the Meeting. Proxy forms and authorities may be sent to the Company by post, personal delivery or fax to:

Montec International Limited c/- Australian Company Secretaries Pty Limited Street Address: Level 5, 255 George Street, Sydney NSW 2000 Mailing Address: GPO Box 4231, Sydney NSW 2001 Fax: (02) 9252 2487

provided that members who forwarded their proxy forms by fax are required to make available the original executed form of the proxy for production, if called upon at the meeting to do so

A body corporate may appoint an individual as its representative to exercise any of the powers the body may exercise at meetings of the Company's members. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at the meeting or in voting on a resolution.

Chairman's voting intentions

The Chairman intends to vote all undirected proxies in favour of all resolutions.

Voting Entitlements

For the purposes of Regulation 7.11.37 of the Corporations Regulations 2001, the directors have determined that the voting entitlements for the purposes of the Meeting will be based on the registered holdings as at 7.00pm (Sydney time) on 21 April 2007. Any Shareholder registered as at that time on that date is entitled to attend and vote at the Meeting.

Proxy Form

A proxy form is enclosed with the Notice. If an additional proxy form is required please call the Company Secretary on (02) 9252 1933.

SECTION 2 - EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared to assist Shareholders in considering the resolutions set out in the Notice. It is part of, and should be read in conjunction with, the Notice.

Item 1 - Ratification of Previous Issues of Securities

Listing Rule 7.1 provides that an ASX listed company may not issue more than 15% of the equity securities on issue in any 12 month period without shareholder approval, unless one of the exceptions set out in Listing Rule 7.2 applies. ASX Listing Rule 7.4 provides that issues of securities made without approval under Listing Rule 7.1 are treated as having been made with approval for the purpose of Listing Rule 7.1 if shareholders subsequently approve the issue

In order to maintain flexibility during the upcoming 12 month period to issue securities to raise capital and make acquisitions Shareholder approval is sought for the purposes of Listing Rule 7.4 for the issue of Shares under a placement made on 17 November 2006 at \$0.07 per Share to the investors set out in the following table. The issue did not breach Listing Rule 7.1.

Allotee	Number of
	Shares
Hardmail Pty Ltd	800,000
Seventeen Seventy P/L	1,200,000
NEMA Nominees Pty Limited	700,000
Mrs Jacqualine Anne Thomas	1,000,000
Mrs Janice Margaret Hocking	814.157
lan Robert Brown	100,000
Awesome Nominees Pty Ltd	500,000
Linda Margaret Lawson	300,000
Josef Brunhuber	105.843
Whorouly Pty Ltd	680,000
S Pirrie Equities Pty Ltd	1,000,000
Pritdown Pty Ltd	500,000
Seventy Three Pty Ltd	300,000
Kennedy Family Pty Ltd	400,000
Total	8,400,000

The \$588,000 (before costs) raised from the issue of these Shares was used to facilitate the continued rollout of the Company's "dairypure' brand in Beijing and Shanghai under the product collaboration agreement previously concluded with Beijing Sanyuan Foods. The results of this can be seen with Montec products now reaching 2,700 retail outlets in Shanghai, Beijing, Qingdao and Dalian and a 47,000 litre production run of "dairypure" and "Meng Tai" product completed in mid-January 2007.

The Board recommends that you vote in favour of the resolution in Item 1.

Item 2 - Approval of Further Issues of Securities

Shareholder approval is also sought for the purposes of ASX Listing Rule 7.1 and for all other purposes, to approve the issue of up to 11.5 million fully paid ordinary shares in the Company at an issue price of \$0.05 to clients of Patersons Securities Limited (Patersons), who are investors to whom Chapter 6D of the Corporations Act does not apply or an

exception in section 708 of the Corporations Act applies (Placement). Investors will also receive one Attaching Option for every Share subscribed, with an exercise price of \$0.10 and an expiry date of 30 June 2008. The Company will apply for quotation of the Attaching Options by ASX. A summary of the terms and conditions of the Attaching Options is set out in the Schedule below.

Patersons have received binding commitments from investors to subscribe for the maximum number of Shares under the Placement, conditional on Shareholder approval being provided. Shareholder approval will allow the Company to issue these Shares and Attaching Options and provide it with flexibility during the next 12 month period to issue further equity securities.

The Company will issue the Shares and Attaching Options as soon as practicable after the Meeting, but in any event no later than 3 months after the date of the Meeting. Once issued, the Shares will rank equally in all respects with the existing ordinary shares.

The primary purpose for the \$575,000 raised by the Placement is to assist in financing the "instore" marketing drive for "dairypure" milk products in the Chinese market, providing working capital for the launch of "dairypure" yoghurts and ice creams, and providing for working capital needs arising from improving markets for Montec's business generally.

On 15 March 2007, Montec also announced to ASX it intends to undertake a renounceble rights issue, offering Shareholders on the record date one new Share for every Share held at an issue price of \$0.05 to raise and additional \$3.7 million. Shareholders who participate in the rights issue will also be entitled to one Attaching Option for every Share subscribed. The funds raised will be used for the same purpose as the Placement. \$1.2 million of the rights issue is proposed to be underwritten by Patersons. Patersons may terminate its underwriting obligations if the Placement is not approved by Shareholders.

A prospectus for the rights issue was lodged with the Australian Securities & Investments Commission and ASX on 20 March 2007.

The Board recommends that you vote in favour of the resolution in Item 2.

Items 3, 4, 5, 6, 7 & 8 – Approval of Issue of Options to Directors and Senior Management

Listing Rule 10.11 requires the Company to obtain Shareholder approval before issuing securities to a related party, unless one of the exceptions in Listing Rule 10.12 applies.

The Company intends to issue 16.2 million Options to the following directors of the Company with the following key terms:

Name	a la komponazione dell'In Number of	Exercise	Expiry Date	Estimated Value
	Options	Price
Mr Terry Cuthbertson,	1.5 million	\$0.12	31 December 2010	\$172,014
Non-Executive	1.5 million	\$0.18	31 December 2010
Chairman	2.0 million	\$0.25	31 December 2010
Mr Peter Herd, Acting Managing	1.5 million	\$0.12	31 December 2010	\$172,014
Director and	1.5 million	\$0.18	31 December 2010
Chief Executive Officer	2.0 million	\$0.25	31 December 2010

Dr Xuegin Du, Executive	1.0 million	\$0.12	31 December 2010	\$104,273
Director	1.0 million	\$0.18	31 December 2010
	1.0 million	\$0.25	31 December 2010
Mr James Manny, Non-	0.8 million	\$0.12	31 December 2010	\$58,450
Executive Director	0.8 million	\$0.18	31 December 2010
Mr Lin Yuansheng,	0.8 million	\$0.12	31 December 2010	\$58,450
Non-Executive Director	0.8 million	\$0.18	31 December 2010

The Options will otherwise be issued on the terms and conditions summarised in Schedule 2.

Approval is sought for the issue of the Options for the purposes of Listing Rule 10.11 and all other purposes. If the resolutions (or either of them) in Items 3, 4, 5, 6 and/or 7 of the Notice are passed, approval will not be required under Listing Rule 7.1 to exempt the relevant Options issued from counting towards the 15% of the equity securities that the Company can issue in any 12 month period without Shareholder approval.

Approval is also sought for the purposes of Listing Rule 7.1 for the issue of 3 million Options to Mr Ian Maltman, Chief Financial Officer of the Company, with the following key terms (and also on the terms summarised in Schedule 2) to exempt the Options from counting towards the 15% of the equity securities that the Company can issue in any 12 month period without Shareholder approval:

and the colored Name	Number	Exercise Price	Expiry Date	Estimated Value
Mr Ian Maltman,	1.0 million	\$0.12	31 December 2010	\$104,273
Chief Financial Officer	1.0 million	\$0.18	31 December 2010
	1.0 million	\$0.25	31 December 2010

These approvals will provide the Company with flexibility during the upcoming 12 month period to issue securities if the need arises. If approved, the Options will be issued for nil issue price no later than one month after the date of the Meeting. Any funds raised from the exercise of the Options will be used for working capital.

The Board recommends that you vote in favour of the resolution in Item 8, and does not make a recommendation in relation to the other Items.

Schedule 1 - Summary of Terms and Conditions of Attaching Options

The Attaching Options (to be issued under the Placement and Rights Issue) if the resolution in Item 2 is passed, will be issued on the following terms. This summary is not intended to be exhaustive and must be read subject to the full terms and conditions of the options, which are available for inspection at the registered office of the Company.

Exercise Period and Expiry Date

The options are exercisable at any time before 5.00pm (Sydney time) on 30 June 2008. Options not exercised by that date will lapse.

Exercise Price

Each option entitles the holder to acquire one fully paid ordinary share in the capital of the Company on payment of the sum of \$0.10 per option to the Company.

Notice of Exercise

Each option may be exercised by notice in writing to the Company at any time before their date of expiry. Any notice of exercise of an option received by the Company will be deemed to be a notice of the exercise of that option as at the date of receipt.

Shares Issued on Exercise of Options

Shares to be issued pursuant to the exercise of options will be issued following receipt of all the relevant documents and payments (in cleared funds) and will rank equally with the then issued Shares.

Quotation of Options and Shares on Exercise

Application will be made to the ASX for quotation of the options. Application will be made for quotation of the Shares issued upon exercise of Options. The options are transferable as the holder thinks fit.

Participation Rights or Entitlements

There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of securities offered to shareholders during the currency of the options. However, the Company will ensure that, for the purpose of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced so as to give holders the opportunity to exercise their options before the date for determining entitlements to participate in any issue.

Bonus Issues

If, from time to time, before the expiry of the options, the Company makes a pro-rata issue of Shares to the shareholders for no consideration, the number of Shares over which an option is exercisable will be increased by the number of Shares which the holder would have received if the option had been exercised before the date for calculating entitlements to the pro-rate issue.

Reconstruction of Capital

In the event of a reconstruction (including consolidation, subdivision, reduction, or return) of the issued capital of the Company, the rights of the holder shall be changed to the extent necessary to comply with the Listing Rules.

Schedule 2 - Summary of Terms and Conditions of Options to be issued to Directors and Senior Executives

The Options to be granted to Directors and Senior Executives if Items 3, 4, 5, 6, 7 and 8 are passed will be issued on terms and conditions identical to those set out under the following headings in Schedule 1: Notice of Exercise; Shares Issued on Exercise of Options; Quotation of Options and Shares on Exercise (except that the Company will not make any application to ASX for quotation of the Options); Participation Rights or Entitlement; Bonus Issues; and Reconstruction of Capital.

SECTION 3 - GLOSSARY

In this Notice and Explanatory Memorandum:

ASIC means the Australian Securities and Investments Commission:

ASX means ASX Limited ACN 008 624 691:

Attaching Options means options to subscribe for Shares, the terms of which are summarised in the Schedule to the Explanatory Memorandum;

Board means the board of directors of the Company;

Company and Montec means Montec International Limited ACN 104 600 544;

Corporations Act means Corporations Act 2001 (Cth);

Explanatory Memorandum means the explanatory memorandum which accompanies, and is incorporated as part of, this Notice;

Glossary means this glossary;

Listing Rules means the listing rules of the ASX;

Meeting means the general meeting of the members of the Company convened by this Notice:

Notice means this notice of general meeting of the Company;

Options means options to subscribe for Shares;

Shareholders means the holders of shares in the Company; and

Shares means fully paid ordinary shares in the capital of the Company.

PROXY FORM MONTEC INTERNATIONAL LIMITED ABN 62 104 600 544

I/We.................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, (PLEASE PRINT NAME)

01..................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

(ADDRESS)

being a member/members of Montec International Limited

Appoint .................................... A

(PLEASE PRINT NAME)

or failing the person so named (or if no person is named) the Chairman of the Meeting as proxy to vote in accordance with the following directions (or if no directions have been given, as the proxy or the Chairman sees fit) at the general meeting of members of Montec International Limited to be held on 23 April 2007 commencing at 11.30 am and at any adjournment.

$\mathbf{B}$ Exercise of Proxy by Chairman

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

C	Business	For	Against	Abstain
	Item 1 - Ratification of Previous Issues of Securities
	Item 2 - Approval of Further Issues of Securities
	Item 3 - Approval of Issue of Options to Mr Terry Cuthbertson
	Item 4 - Approval of Issue of Options to Mr Peter Herd
	Item 5 - Approval of Issue of Options to Dr Xueqin Du
	Item 6 - Approval of Issue of Options to Mr James Manny
	Item 7 - Approval of Issue of Options to Mr Lin Yuansheng
	Item 8 - Approval of Issue of Options to Mr Ian Maltman
D	If Appointing a Second Proxy
	State here the percentage of your voting rights			%.
or			or
	the number of shares applicable to this form
Е	Insert your daytime telephone number	(STD
F	Signature(s)
Signatures if Corporate Shareholder (See Note F)
Executed in accordance with section 127 of the Corporations Act Director/Sole Director sign and print name
	Director/Secretary sign and print name
Note: For your proxy to be entitled to vote your shares at the Meeting, the completed Proxy Form must be received by the Company not later than 24 hours prior to the Meeting.

INSTRUCTION FOR COMPLETION OF PROXY FORM

Your vote is important. Please direct your proxy how to vote. For your proxy to be entitled to vote your shares at the Meeting, the Company must receive the completed Proxy Form not later than 24 hours prior to the Meeting. Any proxy received after this deadline will be treated as invalid.

$\mathbf{A}$ Appoint

Insert here the name of the person you wish to appoint as proxy. Members cannot appoint themselves. If you submit a Proxy Form which does not name a person to act as your proxy. the Chairman of the Meeting will act as your proxy.

B. Exercise of Proxy by Chairman

For undirected proxies, the Chairman intends to vote in favour of each resolution. If you do not wish to direct your proxy how to vote, please place a mark in the box. By marking the box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest

$\mathbf{C}$ . Business

If you wish to direct your proxy how to vote on any item, place a mark in the appropriate box. If a mark is placed in a box, your total shareholding will be voted in that manner. You may, if you wish, split your voting direction by inserting the number of shares you wish to vote in the appropriate box. The vote will be invalid if a mark is made against more than one box for a particular item or if the total shareholding shown in "For", "Against" and "Abstain" boxes is more than your total shareholding on the share register.

D. If Appointing a Second Proxy

A member is entitled to appoint up to two persons (whether members or not) to attend the Meeting as proxies and vote. If you wish to appoint two proxies please photocopy your proxy form or obtain another proxy form by calling the Company Secretary on (02) 9252 1933. Both Forms should be completed with the nominated percentage of your voting rights or number of shares on each Form. If you do not specify the nominated percentage of your voting rights or number of shares, each of the proxies may exercise half of the votes. Please return these Proxy Forms together.

E. Insert your daytime telephone number

This is required in case we need to contact you.

F. Signature(s)

This Form must be signed by the member. If the member is an Australian corporation, the Form must be executed in accordance with section 127 of the Corporations Act or by an attorney. If a person who is not the registered shareholder signs this Form then the relevant authority must either have been exhibited previously to the Company or be enclosed with this Form.

Further Important Information

Please return your completed Proxy Form to the Company Secretary c/- Australian Company Secretaries Pty Ltd, at Level 5, 255 George Street, Sydney, NSW, 2000 (GPO Box 4231, Sydney, NSW, 2001). Alternatively, your Form can be faxed to the Company on (02) 9252 2487. To be effective, the Form must be received by the Company at the above address not later than 24 hours prior to the Meeting. If you require further information on how to complete the Proxy Form, telephone the Company Secretary on (02) 9252 1933.