Notice of EGM

Lupus Capital PLC
06 November 2002



6 November 2002





                               Lupus Capital plc

                    Requisitioned EGM on 28 November 2002

            Board rejects all the requisitionists' resolutions

Lupus Capital plc ('Lupus' or the 'Company') has today given notice of an
Extraordinary General Meeting (the 'EGM') to be held on 28 November 2002.  As
announced on 18 October 2002, the board of Lupus (the 'Board') received from
certain shareholders a requisition convening an EGM. The Board strenuously
opposes all the EGM resolutions.

Attached as an Appendix is a copy of the letter from Lupus's Chairman, Oliver
Stocken, sent to all shareholders yesterday. The Board of Lupus is strongly
recommending shareholders to reject all the resolutions.

Summary of Chairman's letter

•         Strong financial performance - Interim results announced on 12
September 2002 reported that, despite difficult market conditions, profits
before tax were £512,000 (up 45%) on turnover of £3.03 million (up 23%).

•         Lupus strategy is more relevant than ever - The pressures on small and
medium sized public companies have continued to intensify - the Lupus strategy
is designed to address their well-documented problems.

•         Outstanding performance by Gall Thomson under Lupus - Gall Thomson has
been under the ownership and direction of Lupus since December 1999. In the two
years to 31 December 2001, annual sales increased 38% and operating profits 48%.

•         For the nine months to 30 September 2002, operating profits were up
45% on sales up 40%.

•         Progressive dividend policy - The Board forecasts a final dividend of
0.28p, making a total of 0.40p for 2002, an increase of 33% since 1999.

•         The Board's interests are aligned with those of shareholders - Board
and management have regularly bought shares in the Company and now own 5.18% of
Lupus's shares.

•         Maximise value of Gall Thomson - The Board believes that Lupus should
sell its strongly performing business but only for a price which reflects its
market leadership, high profitability and outstanding prospects.

•         Progressive Value Management Limited's ('PVML's') incentive fees
linked to derisory base value - The requisitionists propose that PVML should
wind down Lupus. Their incentive fees are based on a Lupus share price of 5p
which represents a very substantial discount to net asset value and attributes a
derisory base realisation value to Gall Thomson.

•         Future structure of the Company - The Board is committed to
formulating a framework which will allow the share price to be more closely
aligned with the value of the business.

Commenting on the EGM proposals, Oliver Stocken, Lupus Chairman, said:

'Lupus's strategy is more relevant than ever and the business has demonstrated
its strengths with the outstanding performance of Gall Thomson.  This has been
reflected in our progressive dividend policy. The team at Lupus is set up to
drive forward the business and assets of Lupus whereas PVML is proposing a
short-term realisation, effectively winding down the business.

Discussions relating to the possible sale of Gall Thomson continue. Once an
acceptable offer has been made we shall seek approval from shareholders for its
sale. At that time we shall also report with our views on the best use of the
proceeds of the sale.

Shareholders should vote against all the resolutions.'


                                    - Ends -



Attached:

Appendix:  Letter from the Chairman of Lupus

Contact details:


Lupus Capital plc                                       Tel: [phone]
Charles Ryder, Chief Executive                          www.lupuscapital.com
James Orr, Finance Director

Oriel Securities Limited                                Tel: [phone]
Simon Bragg/Adrian McMillan

Merlin Financial                                        Tel: [phone]
Paul Downes/Tom Randell


Appendix:  Letter from the Chairman of Lupus



Lupus Capital plc
(Registered in England and Wales - No. 2806007)

Directors:
Oliver Stocken (Chairman)
Charles Ryder (Chief Executive)
James Orr (Finance Director)
Peter Cawdron (Non-executive Director)
Peter So (Non-executive Director)

Registered Office:
85 Buckingham Gate
London SW1E 6PD

5 November 2002


To the holders of ordinary shares and, for information only, to holders of
options under the Share Option Scheme

Dear Shareholder,

        Requisitioned Extraordinary General Meeting on 28 November 2002

On 12 September 2002 Lupus Capital plc ('Lupus' or 'the Company') announced its
interim results for the six month period to 30 June 2002. Notwithstanding the
difficult conditions in both the commercial and financial markets, Lupus
reported:

•                    Turnover of £3.03 million. Up 23%
•                    Operating profit, before goodwill amortisation, of
                     £1,013,000. Up 52%
•                    Profits before taxation of £512,000. Up 45%
•                    Interim dividend of 0.12 pence. Up 9%

Against this background of strong financial performance, the Board was surprised
and disappointed to receive on 17 October 2002, without any prior notice or
discussion, a requisition convening an Extraordinary General Meeting ('EGM') of
the Company from certain shareholders representing approximately 13% of the
issued share capital of Lupus. A letter to shareholders from the requisitionists
is set out in Part III of this document. Specifically the requisitionists want
to replace four of the Company's current directors, including the Chief
Executive and the Finance Director, and appoint three of their own nominees.

Even though the requisitionists have not sought to replace me as a director, I
intend to resign should their resolutions be approved. I believe that the Board
of Lupus is very strong, combining extensive skills and experience from
industry, the professions and the City and is well equipped to develop the
Company and promote the interests of all shareholders.

The Board of Lupus emphatically rejects the propositions of the requisitionists
and strongly advises shareholders to vote AGAINST all the resolutions proposed
by the requisitionists.

Reasons why you should reject the requisitionists' resolutions

•                    Strategy

Lupus was launched in February 1999 with a strategy to invest in, or acquire,
small and medium sized public companies which are facing strategic barriers to
development whether of a corporate or commercial nature. Lupus intends to
generate significant returns by providing and, where necessary, implementing
strategic plans for these companies, including appropriate exit routes. This
strategy remains unaltered and excellent, constructive and discreet
relationships have been created with the companies in which it is invested.

Since 1 January 2000 the value of the FTSE 100 has fallen by over 40% and the
rationale for Lupus's strategy has become even more valid as the pressures on
smaller companies have intensified. The Board therefore totally disagrees with
the requisitionists' claim that the strategy of Lupus is now 'irrelevant'. The
Board believes that Lupus's strategy is more necessary and relevant than ever in
addressing some of the well-documented problems of small and medium sized public
companies.

                 The Lupus strategy is more relevant than ever
                        Vote AGAINST all the resolutions

•     The success of Gall Thomson, by far Lupus's largest investment

Lupus's principal investment has been the acquisition of Gall Thomson
Environmental Limited ('Gall Thomson') in December 1999, since when Lupus has
worked very closely with Gall Thomson's management team, optimising performance
through:

-         Provision of strategic leadership.
-         Re-motivation and incentivisation of Gall Thomson's management team.
-         Improvement of Gall Thomson's gross margins and cash flow management.
-         Sale of SES, Gall Thomson's non-core subsidiary based in Houston.
-         Acquisition of two businesses to augment the growth and profitability
          of Gall Thomson.

The success of this strategy is demonstrated by a remarkably strong performance
against a challenging economic background:

-         In the two years since 31 December 1999, annual sales increased 38%
          and operating profits 48%.
-         In the first six months of 2002, sales increased 23% and operating
          profits 32% compared to the first six months of 2001.
-         Continued outstanding performance for the nine months to 30 September
          2002 as compared to the same period in 2001. Management accounts 
          (unaudited) show:

           •          Sales of £5.02 million. Up 40%
           •          Operating profits of £2.54 million. Up 45%

The outlook for Gall Thomson both for the rest of the year, and next year, is
very encouraging.

              Outstanding performance by Gall Thomson under Lupus
                        Vote AGAINST all the resolutions

•                    Progressive dividend policy

Since 1999 Lupus has increased dividends on a consistent basis, reflecting the
Board's overall level of confidence in its strategy. The Board forecasts a final
dividend of 0.28p per share for the year ending 31 December 2002 making a total
of 0.40p for the year, an increase of 33.3% since 1999.

                      Year                      Year                        Year                       Year
                    ending                     ended                       ended                      ended
                 31 Dec 02                 31 Dec 01                   31 Dec 00                  31 Dec 99

Interim             0.120p       +9.1%        0.110p       +10.0%         0.100p         same        0.100p


             Forecast dividend
Final               0.280p      +12.0%        0.250p       +11.1%         0.225p       +12.5%        0.200p


             Forecast dividend
Total               0.400p      +11.1%        0.360p       +10.8%         0.325p        +8.3%        0.300p

                                                     +33.3%





                             Strong dividend growth
                        Vote AGAINST all the resolutions

•      The Board and management team are shareholders and entrepreneurs

The executive team of Lupus bought into the Company in February 1999. Since
then, the Board and management team have regularly purchased shares in the
Company and the non-executive directors have received shares in lieu of half of
their fees for the past two years. The current ownership is as follows:

                                                               Number of
                                                         ordinary shares

Oliver Stocken                                                 1,057,599
Charles Ryder                                                  2,130,408
James Orr                                                      2,130,408
Peter Cawdron                                                    475,846
Peter So                                                       1,291,764
Management team                                                1,741,004
                                                               8,827,029           5.18%

The Board believes that the regular purchases of Lupus shares by the Board and
management fully demonstrate the alignment of their interests with those of
shareholders.

Furthermore, following discussions over the last few months with certain
shareholders, the executive directors and management of Lupus have committed to
reinvest 50% of all post-tax bonuses in the purchase of shares in Lupus. These
bonuses are only paid in the event of successful realisations. The Board
believes that this commitment aligns the interests of the Board and executives
even more closely with those of Lupus shareholders.

                        Your Board shares your interests
                        Vote AGAINST all the resolutions

•                  Support a successful sale of Gall Thomson

As is clear from its strategy, all Lupus's investment assets are held for
realisation at the appropriate time, but only at a price which the Board
believes to be in the best interests of the Company. In the case of Gall
Thomson, no offer has yet been received which in the opinion of the Board
represents acceptable value to shareholders.

Lupus has made determined efforts to obtain an acceptable offer with formal
marketing initiatives in:

-         2000 - approaches to 68 companies, appointing as advisers a corporate
finance house specialising in the oil and gas sector worldwide. The targets
included some of the best-known global businesses in the sector.

-         2001 - further approaches to a refined list of 17 companies using the
same specialist corporate finance house.

Indicative offers received in 2001 were significantly higher than those in 2000,
but the Board still considered that they were well below an acceptable
valuation. As a result of the sustained increase in profitability of Gall
Thomson discussions have developed, during the course of this year, with a
number of parties with a view to the sale of Gall Thomson at a higher valuation.
These discussions continue. The Board believes that no tax will be payable as a
result of the disposal of Gall Thomson.

The Board believes that the Company should not sell such a strongly growing
business for an amount which does not reflect its market leadership, high
profitability and outstanding prospects.

                         Maximise value of Gall Thomson
                        Vote AGAINST all the resolutions

•                    Responsible use of proceeds from the sale of Gall Thomson

Any sale of Gall Thomson will require the approval of shareholders at an
Extraordinary General Meeting. At that stage, in line with its responsibilities
to shareholders, the Board will announce its policy relating to the use of the
proceeds from the sale. Such policy will be considered in tandem with the
Board's views on the best future structure of the Company as  discussed below.

                      Responsible use of disposal proceeds
                        Vote AGAINST all the resolutions

•                  Remuneration of proposed management company

The manager to be appointed by the requisitionists, Progressive Value Management
Limited ('PVML'), is the investment manager of Advance Value Realisation Company
Limited, one of the requisitionists. PVML intends to earn, in addition to
management fees, incentive fees over the next eighteen months and beyond based
on a Lupus share price of 5p. This represents a very substantial discount to net
asset value and attributes a derisory base realisation value of some £8 million
to Gall Thomson, a business which, as previously stated, made an operating
profit of £2.54 million in the nine months to 30 September 2002. The bulk of the
proposed incentive fees are not necessarily dependent on any value being
realised or returned to shareholders. Furthermore, the requisitionists cannot
guarantee any immediate return of cash to shareholders.

              PVML's incentive fees linked to derisory base value
                        Vote AGAINST all the resolutions

•                    Future structure of the Company

Lupus believes that its business model is a very effective means of meeting the
strategic challenges encountered by small and medium sized companies, but the
success of the Company has not been reflected in its stock market valuation.
Lupus is not alone in this dilemma, given the depressed market conditions for
smaller capitalised companies. The Board is committed to formulating a framework
which will allow the share price to be more closely aligned with the value of
the business.

The Board continues to give detailed consideration, with its advisers, to ensure
that this structural issue is resolved in the best interests of shareholders.
Such advisers include a newly-established firm of stockbrokers, Oriel Securities
Limited, whom the Board decided to appoint some time ago.

             Your Board is determined to enhance shareholder value
                        Vote AGAINST all the resolutions


Current trading

The Board reiterates the statement made at the time of the announcement of the
interim results on 12 September 2002, and repeated in our announcement on 18
October 2002, that Gall Thomson's excellent performance in the first half of
2002 has continued into the second half. The outlook for Gall Thomson both for
the rest of the year, and for next year, is very encouraging.

The Board therefore forecasts a final dividend of 0.28p per share for the year
ending 31 December 2002 making a total of 0.40p per share for the year, up 11.1%
on last year  and an increase of 33.3% since 1999.

Extraordinary General Meeting

A notice convening the requisitioned Extraordinary General Meeting of Lupus is
set out in Part II of this document.

The EGM will be held at 10 a.m. on 28 November 2002 at the offices of Ashurst
Morris Crisp, Broadwalk House, 5 Appold Street, EC2A 2HA.

Action to be taken

A form of proxy for use at the Extraordinary General Meeting is enclosed.

Forms of proxy, completed in accordance with the instructions thereon, should be
returned as soon as possible but, in any event, so as to reach Capita IRG plc,
Balfour House, 390-398 High Road, Ilford, Essex IG1 1BR, not later than 10 a.m.
on 26 November 2002.

If your shares in Lupus are held in a nominee name, you will need to contact
your nominee company to instruct them to vote on your behalf.

The completion and return of a form of proxy will not prevent you from attending
the Extraordinary General Meeting and voting in person.

Recommendation

The Board considers that the resolutions put forward by the requisitionists are
NOT in the best interests of shareholders as a whole and rejects all the
resolutions.

Accordingly, the Board recommends all shareholders to vote AGAINST all of the
resolutions at the Extraordinary General Meeting to be held on 28 November 2002,
as they intend to do in respect of their own shareholdings amounting to
7,086,025 ordinary shares of 0.5 pence in Lupus, representing in aggregate 4.16%
of the ordinary share capital of Lupus.

Yours sincerely

Oliver Stocken
Chairman



                      Vote AGAINST all the resolutions now






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