MACRO METALS LIMITED — Proxy Solicitation & Information Statement 2007

Sep 24, 2007

BRAINYTOYS LIMITED ABN 28 001 894 033

NOTICE OF GENERAL MEETING

TIME : 3pm (WST) DATE : 22 October 2007 PLACE : “The Kitchen Building” Centre for Adult Education, Heathcote 58-60 Duncraig Road APPLECROSS, WESTERN AUSTRALIA

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 9331 8441

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)	1
Explanatory Statement (explaining the proposed resolutions)	3
Glossary	7
Proxy Form	8
TIME AND PLACE OF MEETING AND HOW TO VOTE

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The General Meeting of the Shareholders of Brainytoys Limited will be held at 3 pm (WST) on Monday 22 October 2007 at:

“The Kitchen Building” Centre for Adult Education, Heathcote 58-60 Duncraig Road APPLECROSS, WESTERN AUSTRALIA

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed with this Notice of Meeting as soon as possible and either:

• (a) send the proxy form by facsimile to the Company on facsimile number (08) 9331 8452; or

• (b) send or deliver the proxy form to the office of the Company at 6-B Bowen St O’Connor WA 6163.

so that it is received not later than 5 pm (WST) on Saturday 20 October 2007. Proxy forms received later than this time will be invalid.

Your proxy form is enclosed after the Explanatory Statement

NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Brainytoys Limited will be held at “The Kitchen Building” Centre for Adult Education, Heathcote, 58-60 Duncraig Road, Applecross, WA at 3 pm (WST) on Monday 22 October 2007.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company on Saturday 20 October 2007 at 5 pm.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

1. RESOLUTION 1 – RATIFICATION AND APPROVAL OF ISSUE OF SHARES

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 7.4 of the Listing Rules of ASX Limited and for all other purposes, shareholders ratify the issue of up to 6,250,000 Shares in the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who participated in the issue of the Shares and any of their associates.

2. RESOLUTION 2 – PLACEMENT OF SHARES

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 of the Listing Rules of ASX Limited and for all other purposes, approval is given for the Directors to allot and issue up to 9,000,000 Shares at an issue price of not less than 8.5 cents each on the terms set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a security holder, if the Resolution is passed and any associates of those persons.

3. RESOLUTION 3 – APPROVAL FOR ISSUE OF SHARES

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 of the Listing Rules of ASX Limited and for all other purposes, the Company be authorised to allot and issue a total of 8,475,837 Shares to Mr Jones Lee Chung Nai (or his nominees) and Energetic Industrial Technology Limited (or its

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nominees) on the terms set out in the Explanatory Statement accompanying this Notice.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit in the capacity of a holder of ordinary securities if the resolution is passed, and any associates of those persons.

DATED: 18 September 2007

BY ORDER OF THE BOARD

Charles Mackinnon CHAIRMAN

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a 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.

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at “The Kitchen Building” Centre for Adult Education, Heathcote, 58-60 Duncraig Road, Applecross, WA on 22 October 2007 at 3pm (WST).

This purpose of this Explanatory Statement is to provide information that the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

If you have any questions regarding the matters set out in this Explanatory Statement or the preceding Notice, please contact the Company, your stockbroker or other professional advisor.

1. BACKGROUND

Resolutions 1, 2 and 3 seek ratification and approval for the issue of up to 17,475,837 Shares. The Company currently has 55,651,902 Shares on issue.

2. RESOLUTIONS 1 AND 2 – RATIFICATION AND APPROVAL OF PLACEMENT

2.1 General

The Company lodged a prospectus with ASIC on 7 September 2007 for the proposed issue of up to 7,000,000 Shares to paid subscribers of the “21st Century Investor” newsletter at a price of 8.5 cents per Share. In that prospectus, the Directors reserved the right, subject to Shareholder approval, to accept oversubscriptions of up to 2,000,000 Shares.

Resolution 1 and 2 seeks Shareholder approval for the allotment and issue of up to 9,000,000 Shares to paid subscribers of the “21st Century Investor” newsletter at a price of 8.5 cents per Share ( General Offer ).

ASX Listing Rules

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

The Directors are able to issue 6,250,000 Shares using its annual 15% placement capacity permitted by Listing Rule 7.1. At the date of this Notice, the Directors do not know how many Shares will have been issued at the time of the Meeting, pursuant to the general offer however the number will not exceed 6,250,000 Shares.

Resolution 1 seeks the ratification by the Shareholders of the Company to the issue of up to 6,250,000 Shares pursuant to ASX Listing Rule 7.4 in order to reinstate the Company’s capacity to issue up to 15% of its issued capital, if required in the next 12 months without Shareholder approval.

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Resolutions 2 seeks approval for the Directors to allot and issue, the remaining Shares pursuant to the General Offer, up to a maximum of 9,000,000 Shares, during the period of 3 months after the General Meeting (or a longer period, if allowed by ASX), without using the Company’s annual 15% placement capacity.

Shareholders should note that a maximum of 9,000,000 Shares will be issued pursuant to Resolutions 1 and 2.

For the avoidance of doubt, if, at the date of the Meeting no Shares have been issued pursuant to the General Offer, Resolution 2 will seek approval for Directors to allot and issue up to 9,000,000 Shares.

If, however, at the date of the Meeting 3,000,000 Shares have been issued pursuant to the General Offer, Resolution 2 will seek approval for Directors to allot and issue up to a further 6,000,000 Shares.

If, however, at the date of the Meeting 6,250,000 Shares have been issued pursuant to the General Offer, Resolution 2 will seek approval for Directors to allot and issue up to a further 2,750,000 Shares;

2.2 Technical Information required by Listing Rule 7.1 and 7.4

The following information is provided in relation to the General Offer pursuant to and in accordance with Listing Rule 7.3 and 7.5:

• (a) the maximum number of Shares to be issued under Resolutions 1 and 2 is 9,000,000 Shares;

• (b) the Shares will be issued at 8.5 cents each;

• (c) the Shares will rank equally with the Company’s current issued Shares;

• (d) ratification is sought, for the previous issue of up to 6,250,000 Shares (Resolution 1);

• (e) the remaining Shares (up to a maximum of 9,000,000 Shares) will be issued no later than three (3) months after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that allotment will occur on the same date (Resolution 2);

• (f) the Directors will determine to whom the Shares will be issued and such persons will be paid subscribers of the “21st Century Investor” newsletter but these people will not be related parties of the Company; and

• (g) the Company intends to use the funds raised from the General Offer (up to $765,000) for the acquisition of Enertec Enterprises Inc. and for general working capital purposes.

3. RESOLUTION 3 – APPROVAL FOR ISSUE OF SHARES

3.1 Background

On 6 September 2007 the Company agreed, subject to Shareholder approval, to purchase 100% of the issued capital in Enertec Enterprises Ltd ( Enertec ) from Mr Jones Lee Chung Nai ( Lee ) and Energetic Industrial Technology Limited ( Energetic ) (together Vendors ) ( Sale Agreement ).

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The Company agreed to pay the Vendors consideration of HK$15.3 million (~AUD$2.35 million). The consideration will be paid as follows:

• (a) HK$1,000,000 (~AUD$153,603) was paid to the Vendor’s solicitors upon signing of the Sale Agreement as deposit and part payment;

• (b) HK$3,060,000 (~AUD$470,026) to be satisfied by:

• (i) the payment of HK$660,000 cash (~AUD$101,378); and

• (ii) the issue of HK$2,400,000 in Shares at a deemed issue price of A$0.10 per Share (being 3,871,000 Shares), subject to a condition that the Vendors are restricted from selling, disposing or transferring these Shares until 1 January 2008,

which shall be paid at completion of the acquisition;

• (c) HK$4,355,000 (AUD$668,942) to be satisfied by:

• (i) the payment of HK$1,500,000 cash (~AUD$230,405) ; and

• (ii) the issue of HK$2,855,000 in Shares at a deemed issue price of A$0.10 per Share (being 4,604,837 Shares) of which HK$2,295,000 (being 3,701,612 Shares) shall be subject to a condition that the Vendors are restricted from selling, disposing or transferring these Shares until 31 December 2008,

to be paid on or before 31 December 2007;

• (d) HK$2,295,000 cash (~AUD$352,519) to be paid on or before 28 February 2009 and in any case, within 2 Business Days of the completion by George Tso & Co of special purpose financial statements confirming that Enertec’s PBIT for the 2008 calendar year exceeded HK$3,825,000 (~AUD$587,532). In the event that Enertec’s PBIT for the 2008 calendar year is less than HK$3,825,000, the cash amount payable by the Company shall be adjusted such that it shall be 60% of the Enertec’s actual PBIT for the 2008 calendar year; and

HK$4,590,000 cash (~AUD$705,039) to be paid on or before 28 February 2010 and in any case, within 2 Business Days of the completion by George Tso & Co of special purpose financial statements confirming that the Enertec’s average PBIT for the 2008 and 2009 calendar years exceeded HK$3,825,000 (~AUD$587,532). In the event that the Enertec’s average PBIT for the 2008 and 2009 calendar years is less than HK$3,825,000, the amount payable shall be adjusted such that it shall be 120% of the Enertec’s actual average PBIT for 2008 and 2009 calendar years.

By Resolution 3, the Company is seeking Shareholder approval to issue up to 8,475,837 Shares to the Vendors as part consideration under the Sale Agreement (being the Shares required to be issued pursuant to (b) and (c) above).

3.2 Regulatory Requirements – ASX Listing Rule 7.1

A summary of ASX Listing Rule 7.1 is contained in section 2.1.

The proposed issue of 8,475,837 Shares is placed before Shareholders to allow this number of Shares to be excluded from the calculation set out in ASX Listing Rule 7.1.

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Listing Rule 7.3 contains certain requirements as to the content of a notice sent to Shareholders for the purposes of Listing Rule 7.1 and the following information is included in this Explanatory Statement for that purpose:

• (a) the maximum number of securities to be issued is 8,475,837 Shares;

• (a) the allottees of the securities will be the Vendors (or nominees);

• (b) the 8,475,837 Shares will be issued to the Vendors for nil cash consideration as they are being issued as part consideration for the acquisition by the Company of Enertec from the Vendors;

• (c) the securities will be issued no later than 3 months after the date of this General Meeting (or such later date as is permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated that allotment will occur on one date;

• (d) the Shares issued will rank equally with the existing Shares on issue; and

• (e) no funds will be raised from the issue of the Shares as they will be issued in part consideration under the Sale Agreement.

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GLOSSARY

ASX means ASX Limited.

ASX Listing Rules or Listing Rules means the listing rules of ASX.

Board means the board of directors of the Company. Company means Brainytoys Limited (ABN 28 001 894 033). Corporations Act means the Corporations Act 2001 (Cth). Directors means the current directors of the Company. Explanatory Statement means the explanatory statement to the Memorandum.

Meeting means the meeting convened by the Notice. Memorandum means this information memorandum. Notice means the notice of meeting accompanying this Memorandum. Resolution means a resolution contained in the Notice. Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

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PROXY FORM

APPOINTMENT OF PROXY BRAINYTOYS LIMITED ABN 28 001 894 033

GENERAL MEETING

I/We

Appoint

being a member of Brainytoys Limited entitled to attend and vote at the Meeting, hereby Name of proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at “The Kitchen Building” Centre for Adult Education, Heathcote, 58-60 Duncraig Road, Applecross, WA on 22 October 2007 at 3pm. If no directions are given, the Chairman will vote in favour of all of the resolutions.

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN Resolution 1 Ratification and approval of issue of Shares Resolution 2 Placement Resolution 3 Approval for Issue of Shares

If you do not wish to direct your proxy how to vote, please place a mark in this 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 the interest. The Chairman will vote in favour of all of the resolutions if no directions are given.

YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY FORM WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

Signed this day of 2007

By:

Individuals and joint holders Companies (affix common seal if appropriate)

Signature Director Signature Director/Company Secretary Signature Sole Director and Sole Company Secretary

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BRAINYTOYS LIMITED ABN 28 001 894 033

Instructions for Completing ‘Appointment of Proxy’ Form

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.

2. A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.

3. Corporate shareholders should comply with the execution requirements set out on the proxy form or 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:

4. directors of the company;

5. a director and a company secretary of the company; or

6. 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 Sections 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 seal 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.

1. Completion of a proxy form will not prevent individual shareholders from attending the meeting in person if 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

2. Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

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