SOUTHERN CROSS ELECTRICAL ENGINEERING LTD — Proxy Solicitation & Information Statement 2009

Mar 31, 2009

SOUTHERN CROSS ELECTRICAL ENGINEERING LIMITED

ABN 92 009 307 046

NOTICE OF MEETING

and

EXPLANATORY STATEMENT

and

PROXY FORM

Date of Meeting: 29 April 2009 Time of Meeting: 9:00am WST Place of Meeting: 41 Macedonia Street Naval Base WA

This Notice of Meeting and Explanatory Statement should be read in their entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

SOUTHERN CROSS ELECTRICAL ENGINEERING LIMITED ABN 92 009 307 046

NOTICE OF GENERAL MEETING

Notice is hereby given that the General Meeting of Shareholders of Southern Cross Electrical Engineering Limited ABN 92 009 307 046 ( "Company" ) will be held at 9:00am (WST) on 29 April 2009 at 41 Macedonia Street, Naval Base, Western Australia 6165.

The Explanatory Statement that accompanies and forms part of this Notice of Meeting describes the various matters to be considered at the General Meeting. Shareholders should read the Explanatory Memorandum before deciding how to vote.

AGENDA

RESOLUTION 1: APPROVAL OF ISSUE OF OPTIONS TO DIRECTOR - MR STEPHEN PEARCE

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“That for the purposes of Listing Rules 7.1 and 10.11 of ASX Limited and Chapter 2E of the Corporations Act and for all other purposes, approval is given for the Company to allot and issue to Mr Stephen Thomas Pearce or his nominee,1,500,000 Options to acquire ordinary fully paid shares in the capital of the Company on the terms and conditions set out in the Explanatory Memorandum which accompanies and forms part of this Notice of Meeting.”

Voting Exclusion Statement

The Company will disregard any votes cast on this resolution by

• Mr Stephen Pearce or his nominee; and

• any of his associates or any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities.

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.

OTHER BUSINESS

To transact any other business which may be properly brought before the meeting in accordance with the Company’s Constitution and the Corporations Act.

REQUIRED MAJORITIES

Resolution 1 is an ordinary resolution and will be passed only if supported by a majority of the votes cast by Shareholders entitled to vote on the resolution.

DATED: 26[th] March 2009

BY ORDER OF THE BOARD

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Stephen Fewster Company Secretary

PROXY AND VOTING ENTITLEMENT INSTRUCTIONS

In accordance with section 249L(d) of the Corporations Act, Shareholders are advised that:

• each Shareholder who is entitled to attend and vote at the General Meeting has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company;

• a Shareholder who is entitled to cast two or more votes at the General Meeting may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one half of the votes.

A Shareholder who appoints a proxy may specify the way in which the proxy is to vote on each resolution or may allow the proxy to vote at his or her discretion.

In accordance with section 250BA of the Corporations Act, the Company specifies the following information for the purpose of receipt of proxy appointments:

Address: Computershare Investor Services Pty Limited

GPO Box 242, Melbourne, Victoria, 3001, Australia

Facsimile number within Australia: 1800 783 447

Facsimile number outside Australia: +61 3 9473 2555

The instrument appointing the proxy must be received by the Company at the address specified above at least 48 hours before the time notified for the General Meeting (proxy forms can be lodged by facsimile).

In accordance with regulation 7.11.38 of the Corporations Regulations, the Company determines that ordinary shares held as at 5.00pm (WST) on 27 April 2009 will be taken, for the purposes of the General Meeting, to be held by the persons who held them at that time.

Notes:

1. If a proxy form is signed or authenticated by an appointer’s attorney, the power of attorney or a certified copy thereof (if any) under which it is signed must accompany the proxy form and be received by Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria, 3001, Australia, facsimile number within Australia: 1800 783 447, facsimile number outside Australia: +61 3 9473 2555, not later than 48 hours before the appointed time of the General Meeting.

2. Proxy forms executed by a corporation must be in accordance with the requirements of the Corporations Act 2001 or under the hand of its attorney. In the case of a sole director/secretary company, please indicate “sole director” in the space provided.

3. Should you desire to direct your proxy on how to vote, place a cross in the appropriate box for each item, otherwise your proxy may vote as your proxy thinks fit or abstain from voting.

4. If two proxies are appointed, you may delete “all” and insert the relevant number or proportion of shares in respect of which each such appointment is made. A separate proxy must be completed for each proxy.

5. If you need any further information about this form or attendance at the General Meeting please contact Mr Stephen Fewster, Company Secretary on 61 8 9410 1833.

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

INTRODUCTION

This Explanatory Memorandum has been prepared for the information of shareholders of Southern Cross Electrical Engineering Limited (“ Company ”) in connection with the business to be transacted at the general meeting of the Company to be held on 29 April 2009 (“ General Meeting ”).

At the General Meeting, Shareholders will be asked to pass a resolution authorising the issue of Options to Mr Stephen Thomas Pearce or his nominee.

The purpose of this Explanatory Memorandum is to provide information that the Board believes to be material to Shareholders in deciding whether or not to pass this resolution. It explains the resolution and identifies the Board’s reasons for putting them to Shareholders. The Explanatory Memorandum should be read in conjunction with the accompanying Notice of Meeting.

RESOLUTION 1: APPROVAL OF ISSUE OF OPTIONS TO DIRECTOR – MR STEPHEN THOMAS PEARCE

Resolution 1 seeks Shareholder approval for the Company to grant 1,500,000 Options to Mr Stephen Pearce, a Director of the Company, or his nominee.

The grant of Options the subject of Resolution 1 was approved at the Annual General Meeting of Southern Cross Electrical Limited held on 26 November 2008. However due to an administrative error, the Options were not issued to Mr Pearce within one month as required by the ASX Listing Rules. As such Shareholder approval is again sought for the issue of the Options. It should be emphasised that no Options were issued to Mr Pearce as a result of the Annual General Meeting of the Company held on 26 November 2008. The Options the subject of this Resolution will have the same terms that the Options put to the Annual General Meeting on 26 November 2008 would have had had they been issued on 26 November 2008 (ie. the date of the Annual General Meeting).

Shareholder approval for the grant of the Options the subject of Resolution 1 is sought for the purposes of:

• Division 3 of Part 2E.1 of the Corporations Act, which governs the giving of financial benefits to “related parties”, for example directors of a company;

• Listing Rule 7.1, which generally prohibits a company from issuing more than 15% of its capital within a 12 month period without shareholder approval; and

• Listing Rule 10.11, which requires the grant of securities to a director of a company to be approved by shareholders.

In order to secure the services of Mr Pearce and to provide Mr Pearce with an incentive for his efforts on behalf of the Company, he was offered 1,500,000 Options pursuant to the terms and conditions of the employment agreement between the Company and Stephen Pearce. This allocation of this number of options was disclosed in section 9.4 of the Company’s prospectus dated 30 October 2007.

The Options are being granted for no consideration. Consequently no funds will be raised as a result of the grant of the Options. A total of $1,725,000 in additional Share capital would be raised if the Options were exercised in full.

Subject to Shareholder approval, the Options will be granted on the terms and conditions set out in Annexure “A” to this Explanatory Memorandum.

Part 2E.1 of the Corporations Act prohibits the Company from giving a financial benefit to a related party (such as a director) unless either:

• the giving of the financial benefit falls within one of the nominated exceptions to the relevant provisions of the Corporations Act; or

• Shareholder approval is obtained prior to the giving of the financial benefit.

The proposed grant of Options to Mr Pearce or his nominee involves the provision of a financial benefit to a related party of the Company, and therefore, requires Shareholder approval.

In accordance with the requirements of Part 2E of the Corporations Act, and in particular sections 219 and 221, the following information is provided to Shareholders to allow them to assess the proposed grant of Options:

• (a) being a Director, Mr Pearce is a related party of the Company to whom the financial benefit would be given by virtue of section 228(2) of the Corporations Act;

• (b) the nature of the financial benefit to be given is the grant of Options on the terms set out in Annexure “A” to this Explanatory Memorandum;

• (c) those Directors who have no interest in the outcome of Resolution 1 (being all Directors other than Mr Pearce) recommend that the Shareholders vote in favour of Resolution 1 on the basis that the Options to be granted provide Mr Pearce with an appropriate incentive in recognition of his extensive knowledge, experience and capabilities;

• (d) Mr Pearce makes no recommendation in relation to Resolution 1 on the basis that he has an interest in the outcome of the resolution;

• (e) the Options will be issued free of charge. Any funds raised from the exercise of the Options will be used for the Company’s general working capital requirements;

• (f) the exercise price and exercise date for the Options are set out in Annexure “A” to this Explanatory Memorandum;

• (g) Based on the Black & Scholes valuation methodology, the Company estimates that each Option the subject of Resolution 1 has an average value of $0.1001 detailed in the table below;

Value of each option	$0.1001
This estimate is based on the following assumptions
Exercise Price	$1.15
Market value of underlying Shares at time of setting exercise price	$0.65
Time to expiration of Option	4 years after vesting
Volatility	50%
Risk free interest rate	3.66%
Annualised dividend yield	0.0%
The aggregate value of the Options is $150,174*

• *Note: The aggregate value is the value as at the time of preparing this Explanatory Memorandum. At the date of the preparation of the Notice of Meeting for the Annual General Meeting of the Company on 26 November 2008, at which Shareholders approved the issue of these Options, the Black & Scholes valuation of the Options was $532,266.

• (h) Over the past 12 months prior to the date of this Notice of Meeting, the lowest recorded price of Shares in SEATS trading on ASX was $0.40 on 21 January 2009 and the highest was $1.35 on 17 March 2008. At the close of trading on 20 March 2009 the Share price was $0.65;

• (i) following the passing of Resolution 1, Mr Pearce will hold an interest in 33,250 Shares and 1,500,000 Options;

• (j) Mr Pearce receives a current base remuneration of $500,000 per annum;

• (k) the Company has 120,000,000 Shares and 1,000,000 Options on issue. Assuming that Mr Pearce exercises all of the Options to be granted to him pursuant to Resolution 1, Mr Pearce’s interest including all the Shares and Options currently held will represent approximately 1.3% of the Company’s diluted capital; and

• (l) neither the Directors nor the Company are aware of any other information that would be reasonably required by the Shareholders to make a decision whether it is in the best interests of the Company to pass Resolution 1.

The following information is provided for the purposes of Listing Rules 7.1 and 10.11:

• (a) the name of the person who will be issued Options is Mr Stephen Thomas Pearce or his nominee;

• (b) Mr Pearce or his nominee will be issued 1,500,000 Options;

• (c) the Options will be issued within one month of Shareholder approval;

• (d) the Options are being issued for no consideration and therefore no funds will be raised pursuant to the issue of Options; and

• (e) the terms of the Options are set out in Annexure “A” to this Explanatory Memorandum.

ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the resolution set out in the Notice of Meeting.

Attached to the Notice of Meeting is a proxy form for use by Shareholders. All Shareholders are invited and encouraged to attend the General Meeting or, if they are unable to attend in person, to complete, sign and return the proxy form to the Company in accordance with the instructions contained in the proxy form and the Notice of Meeting. Lodgement of a proxy form will not preclude a Shareholder from attending and voting at the General Meeting in person.

GLOSSARY

The following terms and abbreviations used in this Explanatory Memorandum have the following meaning:

meaning:
General Meeting:	Is defined in section 1 of this Explanatory Memorandum.
ASX:	ASX Limited (ACN 008 624 691).
Board:	The board of directors of the Company.
Company:	Southern Cross Electrical Engineering Limited (ABN 92 009 307 046).
Corporations Act:	Corporations Act 2001 (Cth).
Corporations Regulations:	Corporations Regulations 2001 (Cth).
Director:	A member of the Board.
WST:	Western Standard Time, being the time in Perth, Western Australia.
Listing Rules:	The Official Listing Rules of the ASX, as amended from time to time.
Notice of Meeting:	The notice convening the General Meeting which accompanies this
	Explanatory Memorandum.
Options:	Options to subscribe for Shares.
Shareholders:	Holders of Shares.
Shares:	Fully paid ordinary shares in the capital of the Company.

ANNEXURE A

TERMS AND CONDITIONS OF GRANT OF OPTIONS

1. The Options will be issued at no cost.

2. Each Option will be issued over one (1) unissued Share.

3. Subject to any adjustment under the Senior Management Long Term Incentive Plan Rules (“ Rules ”), the exercise price of each Option is $1.15.

4. The Options will vest and only become exercisable in accordance with the following tranches:

5. (a) one third of the Options will vest on 26 November 2009 subject to the operation of the Threshold TSR Performance Hurdles;

6. (b) one third of the Options will vest on 26 November 2010 subject to the operation of the Threshold TSR Performance Hurdles; and

7. (c) one third of the Options will vest on 26 November 2011 subject to the operation of the Threshold TSR Performance Hurdles.

The Threshold TSR Performance Hurdles (and thus the level of vesting) for each of the three tranches will be measured separately at each of the above vesting dates. Therefore the level of vesting for any one tranche is independent of the other two tranches.

For the purposes of this paragraph 4:

• (a) “ TSR ” means the Total Shareholder Return for a particular company for a 12 month period which is calculated as follows:

(closing share price of the applicable company’s shares on the ASX on the last day of the 12 month period minus opening share price of that company’s shares on the ASX on the first day of the 12 month period plus any dividends declared per share during the 12 month period) divided by (the opening share price of the applicable company’s shares on the ASX on the first day of the 12 month period).

• (b) “ Comparative TSR ” means the TSR of the following companies provided that any of the following companies whose shares are not quoted on the ASX for the relevant 12 month period will not be included:

Ausenco Ltd Lycopodium Ltd Cardno Ltd Worley Parsons Ltd Sedgmen Ltd Clough Ltd Monadelphous Ltd Fleetwood Ltd Coote Industrial Ltd Campbell Brothers Ltd Ammtec Ltd Nomad Ltd GRD Ltd Mermaid Marine Ltd VDM Group Ltd Mac Services Ltd Coffey Ltd

• (c) ” Threshold TSR Performance Hurdles ” means as follows:

  • (i) No Options will vest unless the percentile ranking of the Company’s TSR for the relevant 12 month period as against the Comparative TSRs for the relevant 12 month period is at or above the 50[th] percentile;

  • (ii) If the Company’s TSR for the relevant 12 month period as against Comparative TSRs is:

    • i. at the 50[th ] percentile, then 50% of the Options will vest;

    • ii. between the 51[st] and 74[th] percentile then for each percentile over the 50[th] , an additional 2% of the Options will vest; and

    • iii. at or above the 75[th] percentile then 100% of the Options will vest.

• Any Options that do not vest and become exercisable in accordance with the vesting conditions in paragraph 4 (above) will automatically lapse.

• Subject to any variation of the Rules, the exercise period in respect of each Option commences on the date that the Options vest in accordance with paragraph 4 (above), and ends on the fourth anniversary of the commencement of the exercise period in respect of that Option (“ Exercise Period ”).

• Any Option that is not exercised before the end of the Exercise Period will automatically lapse.

• A Share acquired as a result of the exercise of an Option must not be sold, transferred or otherwise dealt with if doing so would result in a breach of the Listing Rules, the ASTC Settlement Rules or the terms of any restriction agreement with the Company.

• All Shares allotted on exercise of Options will rank pari passu in all respects with other fully paid ordinary shares in the Company then on issue.

• Generally, as set out in the Rules (which are available upon request).

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000001 000 SXE MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Lodge your vote:

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By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

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For your vote to be effective it must be received by 9.00am (WST) Monday 27 April 2009

How to Vote on Items of Business

Signing Instructions

All your securities will be voted in accordance with your directions.

Individual: Where the holding is in one name, the securityholder must sign.

Appointment of Proxy

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.computershare.com.

A proxy need not be a securityholder of the Company.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

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Turn over to complete the form

View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Your secure access information is:

Review your securityholding

SRN/HIN: I9999999999

Update your securityholding

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

999999_SAMPLE_0_0_PROXY/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a I9999999999 broker (reference number commences with ‘ X ’) should advise your broker of any changes. I 9999999999 I ND

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Proxy Form

to indicate your directions

Please mark

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Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Southern Cross Electrical Engineering Limited hereby appoint

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

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the Chairman of the Meeting[OR]

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Southern Cross Electrical Engineering Limited to be held at 41 Macedonia Street, Naval Base WA on Wednesday, 29/04/2009 at 9.00am (WST) and at any adjournment of that meeting.

Important for Item 1: If the Chairman of the Meeting is your proxy and you have not directed him/her how to vote on Item 1 below, please mark the box in this section. 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 Item 1 and your votes will not be counted in computing the required majority if a poll is called on this Item. The Chairman of the Meeting intends to vote undirected proxies in favour of Item 1 of business.

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I/We acknowledge that the Chairman of the Meeting may exercise my proxy even if he/she has an interest in the outcome of that Item and that votes cast by him/her, other than as proxy holder, would be disregarded because of that interest.

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PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

Items of Business

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Resolution 1 Approval of Issue of Options to Director - Mr Stephen Pearce

The Chairman of the Meeting intends to vote undirected proxies in favour of the item of business.

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Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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