First Graphene Ltd. — AGM Information 2003

Oct 16, 2003

TOLHURST NOALL GROUP LTD

A.C.N 007 870 760

Level 29, 35 Collins Street, Melbourne Victoria 3000 Australia Telephone: (03) 9242 4000 Facsimile: (03) 9242 4040

TNL

17 October 2003

Companies Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam,

TOLHURST NOALL GROUP LTD

Notice of Annual General Meeting

The attached notice has been mailed to the shareholders of Tolhurst Noall Group Ltd today.

Yours faithfully,

CRAIG GRAHAM-SMITH Company Secretary

Notice of annual general meeting and
explanatory notes

Tolhurst Noall Group Ltd ABN 50 007 870 760

	Date: 21 November 2003
Time: 10.00am
	Place: Level 29, 35 Collins Street, Melbourne, VIC 3000

Notice is given that the annual general meeting of shareholders of Tolhurst Noall Group Ltd (Company or TNL) will be held at Level 29, 35 Collins Street, Melbourne, Victoria at 10.00am on Friday 21 November 2003

Business

$\mathbf 1$ Financial Statements and Reports

To table the financial statements of the Company for the year ended 30 June 2003 and to provide the members with the opportunity to raise any issues or ask questions generally of the Directors concerning those financial statements or the business and operations of the Company.

$\overline{2}$ Ordinary Resolutions

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

Resolution 1 - Re-election as a Director

That Ian Johnson, a Director retiring in accordance with the Company's Constitution, being eligible and having signified his candidature for the office, be and is hereby re-elected as a Director.

Resolution 2 - Re-election as a Director

That Don Taig, a Director retiring in accordance with the Company's Constitution, being eligible and having signified his candidature for the office, be and is hereby re-elected as a Director.

Resolution 3 - Re-election as a Director

That Russell McKimm, a Director retiring in accordance with the Company's Constitution, being eligible and having signified his candidature for the office, be and is hereby re-elected as a Director.

Resolution 4 - Approval of issue of 3,600,000 options

That the shareholders of the Company approve, in accordance with Rule 7.1 of the Listing Rules of Australian Stock Exchange Limited, the issue by the Company of 3,600,000 options over fully paid ordinary shares in the Company to employees of the Company on the terms set out in the explanatory notes attached to and forming part of this notice of meeting.

Resolution 5 - Approval of issue of options to director - Russell McKimm

That the shareholders of the Company approve, in accordance with Rule 10.11 of the Listing Rules of Australian Stock Exchange Limited, the issue by the Company of 150,000 options over fully paid ordinary shares in the Company to Russell McKimm, a director of the Company, on the terms set out in the explanatory notes attached to and forming part of this notice of meeting.

Resolution 6 - Approval of issue of options to director - Craig Graham-Smith

That the shareholders of the Company approve, in accordance with Rule 10.11 of the Listing Rules of Australian Stock Exchange Limited, the issue by the Company of 250,000 options over fully paid ordinary shares in the Company to Craig Graham-Smith, a director of the Company, on the terms set out in the explanatory notes attached to and forming part of this notice of meeting.

Resolution 7 - Approval of issue of options to managing director - John Wilson

That the shareholders of the Company approve, in accordance with Rule 10.11 of the Listing Rules of Australian Stock Exchange Limited, the issue by the Company of 3,400,000 options over fully paid ordinary shares in the Company to John Wilson, managing director of the Company, on the terms set out in the explanatory notes attached to and forming part of this notice of meeting.

$\overline{3}$ . Other business:

To transact any other business which may legally be brought before the meeting.

DATED 17 October 2003

BY ORDER OF THE BOARD

. . . . . . . . . . . . . . . . . . . .

John Wilson Managing Director

Voting

The Company has determined, in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), TNL's shares quoted on Australian Stock Exchange Limited at 5.00pm on 19 November 2003, will be taken, for the purposes of the annual general meeting, to be held by the persons who held them at that time. Accordingly those persons are entitled to attend and vote at the meeting.

Proxies

• A shareholder who is entitled to attend and vote at the meeting may appoint up to two proxies to attend and vote on behalf of that shareholder. If you require an additional proxy form, please contact the Company on (03) 9242 4000.
• If a shareholder appoints two proxies, the appointment of the proxies may specify the proportion or the number of that shareholder's votes that each proxy may exercise. If the appointment does not so specify, each proxy may exercise half of the votes. Fractions of votes will be disregarded.
• Where a shareholder appoints more than one proxy, neither proxy is entitled to vote on a show of hands.
• A proxy need not be a shareholder of the Company.
• To be effective, the Company must receive the completed proxy form and, if the form is signed by the shareholder's attorney, the authority under which the proxy form is signed (or a certified copy of the authority) by no later than 5.00pm on Wednesday 19 November 2003.
• Proxies may be lodged with the Company:
• by mail, to the Company Secretary, using the enclosed reply envelope to:

Level 29, 35 Collins Street, Melbourne 3000.

• by facsimile:
• $(03)$ 9242 4040
• by delivery to TNL's registered office Level 29, 35 Collins Street, Melbourne 3000.
• Proxies given by corporate shareholders must be executed in accordance with their constitutions, or signed by a duly authorised officer or attorney.
• A proxy may decide whether to vote on any motion, except where the proxy is required by law or the Constitution to vote, or abstain from voting, in their capacity as proxy. If a proxy is directed how to vote on an item of business, the proxy may vote on that item only in accordance with the direction. If a proxy is not directed how to vote on an item of business, the proxy may vote as he or she thinks fit.
• If a shareholder appoints the chairperson of the meeting as the shareholder's proxy and does not specify how the chairperson is to vote on an item of business, the chairperson will vote, as proxy for that shareholder, in favour of that item on a poll.

Voting Exclusion Statement

In accordance with the requirements of Rule 14.11 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast in respect of resolution 4 by:

• a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a shareholder, if the resolution is passed; and
• an associate of that person (or those persons).

Accordingly, no person who is or may be a participant in the issue of options contemplated by resolution 4, and no associate of any such participant, may vote on resolution 4.

In accordance with the requirements of Rule 14.11 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast in respect of resolution 5 by:

• a person who is to receive securities in relation to TNL; and
• an associate of that person (or those persons).

Accordingly, neither Russell McKimm nor any associates of Russell McKimm may vote on resolution 5.

In accordance with the requirements of Rule 14.11 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast in respect of resolution 6 by:

• a person who is to receive securities in relation to TNL; and
• an associate of that person (or those persons).

Accordingly, neither Craig Graham-Smith nor any associates of Craig Graham-Smith may vote on resolution 6.

In accordance with the requirements of Rule 14.11 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast in respect of resolution 7 by:

• a person who is to receive securities in relation to TNL; and
• an associate of that person (or those persons).

Accordingly, neither John Wilson nor any associates of John Wilson may vote on resolution 7.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy appointed in writing for a person entitled to vote, in accordance $(a)$ with the directions on the proxy form that specify how the proxy is to vote on the proposed resolution: or
• it is cast by a person chairing the meeting as proxy for a person who is entitled to vote in $(b)$ accordance with the directions on the proxy form to vote as the proxy decides.

NOTES:

• Shareholders should note that in accordance with Listing Rule 7.2 (Exception 14), if Shareholder Ĭ. approval is given to an issue of securities pursuant to Listing Rule 10.11, such approval is not required to be given pursuant to Listing Rule 7.1.
• $2.$ The details of the Resolutions contained in the Explanatory Notes accompanying this Notice of Meeting should be read together with and form part of this Notice of Meeting.

Background

The purpose of the explanatory notes is to provide shareholders with an explanation of the business of the meeting and of the resolutions to be proposed and considered at the Annual General Meeting on 21 November 2003 and to allow shareholders to determine how they wish to vote on those resolutions.

Business of the Meeting

• To table the financial statements of the Company for the year ended 30 June 2003 and to give the $\mathbf{A}$ members the opportunity to raise issues and ask questions generally concerning the financial statements or business operations of the Company.
• $\mathbf{B}$ To consider and vote on resolutions relating to:
• $\ddot{\Omega}$ the re-election of Directors; and
• $(i)$ approval of the issue of options.

Why the meeting is being held

Financial Statements and Reports $\mathbf 1$

Pursuant to the Corporations Act, the directors of a public company that is required to hold an annual general meeting must table the financial statements and reports of the Company for the previous year before members at that annual general meeting.

Shareholders have been provided with all relevant information concerning the Company's financial statements in the Annual Report of the Company for the year ended 30 June 2003. A copy of the Annual Report has been forwarded to each shareholder. A copy of the Annual Report will be tabled at the meeting.

Shareholders should note that the sole purpose of tabling the financial statements of the Company or the reports on the Company's operations at the annual general meeting is to provide the shareholders with the opportunity to be able to ask questions or discuss matters arising from the financial statements at the meeting. It is not the purpose of the meeting that the financial statements be accepted, rejected or modified in any way and as it is not required by the Corporations Act, no resolution to that effect with be put to the members at the meeting.

$\overline{2}$ . Resolutions 1, 2 and 3: Re-election of Directors

The Company's constitution requires that at each annual general meeting one-third of the directors (other than the managing director) must retire from office. A director appointed during the year either to fill a casual vacancy or as an addition to the directors is not taken into account in determining the directors who must retire by rotation. Therefore, three of the nine, excluding the managing director, must retire by rotation. The following directors, drawn by ballot from among the directors who have longest been in office, retire and are eligible for re-election. Accordingly they seek re-appointment as directors:

• $(a)$ Ian Johnson:
• $(b)$ Don Taig; and

$(c)$ Russell McKimm.

3. Resolution 4: Approval of the issue of options

TNL proposes to grant 3,600,000 options, each to acquire one fully paid ordinary share in TNL, to employees and consultants of TNL and companies within the TNL group, who in each case have at least 12 months of service with the relevant company. The number of options to be granted to each employee or consultant will be determined according to their level of seniority and service with the TNL group. The offer of the options is to provide employees and consultants with the opportunity to participate in the success of TNL and to provide an added incentive to ensure wealth is created in TNL for the benefit of all shareholders.

The terms and conditions of issue of the options are set out in Schedule 1. In summary, each option is exercisable at any time on or after the date of issue up to and including the second anniversary of the date of issue. Options will lapse if they are not exercised on or prior to the expiry of this period, or if the employee leaves employment with the TNL group or if their consulting arrangement with the TNL group is terminated, and the employee or consultant does not exercise the options within six months of the date of cessation of employment or the termination of the consulting arrangement.

The exercise price of each option will be set at an amount calculated in accordance with the following formula:

Exercise Price =
$$
\frac{VWAP}{0.75}
$$

where VWAP is the volume weighted average market price of shares in TNL during the week up to and including the date of grant of the options.

Listing Rule 7.1 provides that an entity must not, without the approval of its ordinary shareholders, issue or agree to issue equity securities in any 12 month period which would exceed 15% of the equity securities on issue at the commencement of that 12 month period.

Although the issue proposed under this resolution when aggregated with the other issues proposed, will not exceed 15%, the Company wishes to retain the flexibility to be able to issue up to 15% of its equity securities without seeking shareholder approval under Listing Rule 7.1. Accordingly, shareholder approval for the issue of these options is sought under Listing Rule 7.1.

Listing Rule 7.3 requires the Notice of Meeting at which shareholders are required to consider a resolution under Listing Rule 7.1 to contain certain specified information in relation to the equity securities proposed to be issued. This information is set out below as follows:

• the maximum number of securities the Company will issue: 3,600,000 options $(a)$
• the date by which the Company will issue the securities: the options will be granted $(b)$ within three months of the date of the meeting;
• $(c)$ the issue price of the securities: the options are issued for nil consideration and are exercisable at a price calculated as described above;
• the names of allottees: employees and consultants of TNL and TNL group companies with $(d)$ a minimum twelve months of service;
• $(e)$ the terms of the securities: the terms and conditions of issue of the options are set out in Schedule 1:

• $(f)$ the intended use of funds raised: No funds will be raised by the issue. However funds raised by the exercise of the options will be applied by the directors at that time as they believe appropriate given the Company's circumstances at that time;

• $(g)$ the dates of allotment: the options will be granted within three months of the date of the meeting;

• a voting exclusion statement; this is set out in the notice of meeting. $(h)$

Resolutions 5 and 6: Approval of the issue of options to directors $\overline{4}$

Resolutions 5 and 6 relate to the granting of options to Russell McKimm and Craig Graham-Smith who are both directors, and related parties, of the Company for the purposes of the Listing Rules. Consequently, shareholder approval of the proposed granting of options is required under Listing Rule 10.11.

The terms of issue of the options are the same as the terms of the options proposed to be issued under resolution 4.

Shareholders should note that each of these resolutions is independent of the other.

Listing Rule 10.13 requires the notice of meeting at which shareholders are to consider a resolution pursuant to Listing Rule 10.11 to include certain specified information in relation to the issue being approved. The information in respect of each resolution is set out below.

As noted above, Listing Rule 7.2 states that if shareholder approval is given to the issue of securities under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

4.1 ASX Listing Rule 10.13

$(a)$ the name of the person to whom the securities are to be issued and the number of securities to be issued to the person:

Resolution	Director	Number of options
	Russell McKimm	$150,000$ options
	Craig Graham-Smith	$250,000$ options

• $(b)$ the date by which the Company will issue the securities: the options will be granted within three months of the date of the meeting;
• $(c)$ the issue price of securities and a statement of the terms of issue: the options are issued for nil consideration and are exercisable at a price calculated in accordance with the formula set out in section 4 of these explanatory notes;
• $(d)$ the terms of issue of securities: the terms and conditions of the issue of options are set out in Schedule 1;
• the intended use of the funds raised. No funds will be raised by the issue. However funds $(e)$ raised by the exercise of the options will be applied by the directors at that time as they believe appropriate given the Company's circumstances at that time;
• the dates of allotment: the options will be granted within one month of the date of the $(f)$ meeting;
• a voting exclusion statement; this is set out in the notice of meeting. $\left( \mathbf{g} \right)$

Resolution 7: Approval of the issue of options to managing director 5.

Resolution 7 relates to the granting of options to John Wilson who is managing director, and a related party, of the Company for the purposes of the Listing Rules. Consequently, shareholder approval of the proposed granting of options is required under Listing Rule 10.11.

As the shareholders are aware, John Wilson was appointed as the Company's Managing Director in March 2003. The Board has approved the issue of 3,400,000 options to John Wilson subject to shareholder approval.

The terms and conditions of issue of the options are set out in Schedule 2. In summary, each option is exercisable at any time on or after the first anniversary of the date of issue up to and including the fourth anniversary of the date of issue. Options will lapse if they are not exercised on or prior to the expiry of this period, or if Mr Wilson leaves employment with TNL and does not exercise the options within six months of the date of cessation of employment.

The exercise price of each option will be set at an amount calculated in accordance with the following formula:

$$
Exercise Price = \frac{VWAP}{0.75}
$$

where VWAP is the volume weighted average market price of shares in TNL during the week up to and including the date of grant of the options.

Listing Rule 10.13 requires the notice of meeting at which shareholders are to consider a resolution pursuant to Listing Rule 10.11 to include certain specified information in relation to the issue being approved. The information in respect of the resolution is set out below.

As noted above, Listing Rule 7.2 states that if shareholder approval is given to the issue of securities under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

$5.1$ ASX Listing Rule 10.13

• $(a)$ the name of the person to whom the securities are to be issued and the number of securities to be issued to the person: 3,400,000 options are to be issued to John Wilson;
• $(b)$ the date by which the Company will issue the securities: the options will be granted within three months of the date of the meeting;
• $(c)$ the issue price of securities and a statement of the terms of issue: the options are issued for nil consideration and are exercisable at a price calculated in accordance with the formula set out above:
• $(d)$ the terms of issue of securities: the terms and conditions of the issue of options are set out in Schedule 2:
• $(e)$ the intended use of the funds raised. No funds will be raised by the issue. However funds raised by the exercise of the options will be applied by the directors at that time as they believe appropriate given the Company's circumstances at that time;
• $(f)$ the dates of allotment: the options will be granted within one month of the date of the meeting;
• a voting exclusion statement: this is set out in the notice of meeting. $\left( \mathbf{g} \right)$

Directors' approval and recommendation

• Each Director who has an interest in the outcome of a particular resolution has, in accordance Ĺ with the Listing Rules, abstained from making a recommendation on those resolutions.
• $2.$ Each of the directors who do not have an interest in the outcome of a particular resolution voted in favour of the resolutions being put to the shareholders.

• On the basis of the information set out in these explanatory notes, each of the directors believes 3. the transactions are in the best interests of shareholders and accordingly recommends that shareholders vote in favour of the resolutions. In addition, each of the directors approves the contents of these explanatory notes.

• Notwithstanding this recommendation the directors believe that shareholders should carefully $\overline{4}$ . consider all the information set out in these explanatory notes.

• $\tilde{S}$ . These explanatory notes are dated 17 October 2003.

Each option (Option) shall entitle the holder of the Option (Option Holder) to subscribe for and be allotted one fully paid ordinary share (Share) in Tolhurst Noall Group Limited ABN 50 007 870 760 (Company) on the terms and conditions set out below:

• $\mathbf{I}$ . Each Option is exercisable at any time on or after the date of issue up to and including the second anniversary of the date of issue (Option Period).
• $\overline{2}$ . The exercise price for each Option (Exercise Price) is \$[ amount calculated by reference to the formula set out in the explanatory notes to be inserted here on issue of options] and is payable immediately on exercise.
• The Options may be exercised wholly or in part in multiples of 100 by the Option Holder giving 3. notice in writing in the form provided on the option certificate (Notice of Exercise) to the board at any time during the Option Period.
• Within 10 business days of the exercise of the Option, the Company will apply for the shares $\overline{4}$ . issued on exercise of the Option to be admitted for quotation on the Official List of Australian Stock Exchange Limited.
• 1. On receipt by the Company of the Notice of Exercise and payment of the relevant Exercise Price, the Company must, within 14 days, issue to the Option Holder the number of shares in respect of which the Option is exercised and despatch the relevant share certificate or other appropriate acknowledgment as soon as reasonably practicable thereafter.
• 1. Shares issued on the exercise of any Options will rank equally in all respects with the then existing issued ordinary fully paid shares in the Company and will be subject to the provisions of the Constitution of the Company.
• $7.$ An Option will lapse if:
• $(a)$ the Option is not exercised on or prior to the expiry of the Option Period;
• the Option Holder ceases employment with the Company or a subsidiary (as defined in the $(b)$ Corporations Act 2001) of the Company, and does not exercise the Option within six months of the date of cessation of employment.
• 1. Subject to these terms, an Option does not confer any rights to participate in new issues of securities of the Company.
• 1. Adjustments to the number of shares over which Options exist and/or the Exercise Price will be made to take account of changes to the capital structure of the Company by way of pro rata bonus and cash issues as follows:
• $(a)$ Pro-Rata Cash issues

Where a pro-rata issue is made (except a bonus issue) to the holders of underlying securities, the Exercise Price of an Option may be reduced according to the following formula:

$$
O' = O - \frac{E[P-(S+D)]}{N+1}
$$

where:

• $Q' =$ the new exercise price of the Option.
• $\Omega =$ the old exercise price of the Option.
• the number of underlying securities into which one Option is Exercisable. $E =$
• $P =$ the average market Price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the exrights date or ex entitlements date.
• $S =$ the Subscription price for a security under the pro-rata issue.
• $D =$ the Dividend due but not vet paid on the existing underlying securities (except those to be issued under the pro rata issue).
• the Number of securities with rights or entitlements that must be held to receive a $N =$ right to one new security.
• $(b)$ Pro-Rata Bonus Issues

If there is a bonus issue to the holders of the underlying securities, on the exercise of any Options, the number of shares received will include the number of bonus shares that would have been issued if the Options had been exercised prior to the record date for the bonus issue. The Exercise Price will not change.

• $10.$ In the event of any reorganisation (including consolidation, sub-division, reduction or return) of the issued capital of the Company, the rights of the Option Holder including the number of Options or the Exercise Price or both shall be reorganised (as appropriate) to the extent necessary to comply with the Listing Rules of Australian Stock Exchange Limited applying to a reorganisation of capital at the time of the reorganisation.
• $11.$ If during the currency of any Options and prior to their exercise a takeover offer or a takeover announcement (within the meaning of the Corporations Act 2001) is made to holders of shares then within 10 Business Days after the Company becomes aware of the offer, the Company must forward a notice notifying each Option Holder of the offer. Notwithstanding any other terms and conditions applicable to the Options, all Options held by the Option Holder vest on the making of a takeover offer or takeover announcement.
• $12.$ If an offer for the shares is made to shareholders of the Company pursuant to a scheme of arrangement which has been approved in accordance with the Corporations Act 2001, Option Holders will be entitled to exercise Options held by them within the period notified by the Company.
• 1. The Options are not transferable except with the prior written consent of the Company. If the Company consents to the transfer of the Options, the Company may impose any conditions, including a condition that the transferee agree to be bound by the above terms and conditions, that it in its sole discretion determines to be appropriate.
• $14.$ Notices may be given by the Company to the Option Holder in the manner prescribed by the constitution of the Company for the giving of notices to the shareholders of the Company and the relevant provisions of the constitution will apply with all necessary modification to notices to be given to Option Holders.

Each option (Option) shall entitle the holder of the Option (Option Holder) to subscribe for and be allotted one fully paid ordinary share (Share) in Tolhurst Noall Group Limited ABN 50 007 870 760 (Company) on the terms and conditions set out below:

• $\mathbf{I}$ . Each Option is exercisable at any time on or after the first anniversary of the date of issue up to and including the fourth anniversary of the date of issue (Option Period).
• $\overline{2}$ . The exercise price for each Option (Exercise Price) is \$I amount calculated by reference to the formula set out in the explanatory notes to be inserted here on issue of options] and is payable immediately on exercise.
• The Options may be exercised wholly or in part in multiples of 100 by the Option Holder giving 3. notice in writing in the form provided on the option certificate (Notice of Exercise) to the board at any time during the Option Period.
• Within 10 business days of the exercise of the Option, the Company will apply for the shares $\overline{4}$ . issued on exercise of the Option to be admitted for quotation on the Official List of Australian Stock Exchange Limited.
• 1. On receipt by the Company of the Notice of Exercise and payment of the relevant Exercise Price, the Company must, within 14 days, issue to the Option Holder the number of shares in respect of which the Option is exercised and despatch the relevant share certificate or other appropriate acknowledgment as soon as reasonably practicable thereafter.
• 1. Shares issued on the exercise of any Options will rank equally in all respects with the then existing issued ordinary fully paid shares in the Company and will be subject to the provisions of the Constitution of the Company.
• $7.$ An Option will lapse if:
• $(a)$ the Option is not exercised on or prior to the expiry of the Option Period;
• the Option Holder ceases employment with the Company or a subsidiary (as defined in the $(b)$ Corporations Act 2001) of the Company, and does not exercise the Option within six months of the date of cessation of employment.
• 1. Subject to these terms, an Option does not confer any rights to participate in new issues of securities of the Company.
• 1. Adjustments to the number of shares over which Options exist and/or the Exercise Price will be made to take account of changes to the capital structure of the Company by way of pro rata bonus and cash issues as follows:
• $(c)$ Pro-Rata Cash issues

Where a pro-rata issue is made (except a bonus issue) to the holders of underlying securities, the Exercise Price of an Option may be reduced according to the following formula:

$$
O' = O - \frac{E[P-(S+D)]}{N+1}
$$

where:

• $O' =$ the new exercise price of the Option.
• $\Omega =$ the old exercise price of the Option.
• the number of underlying securities into which one Option is Exercisable. $E =$
• $P =$ the average market Price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the exrights date or ex entitlements date.
• $S =$ the Subscription price for a security under the pro rata issue.
• $D =$ the Dividend due but not vet paid on the existing underlying securities (except those to be issued under the pro rata issue).
• the Number of securities with rights or entitlements that must be held to receive a $N =$ right to one new security.
• $(d)$ Pro-Rata Bonus Issues

If there is a bonus issue to the holders of the underlying securities, on the exercise of any Options, the number of shares received will include the number of bonus shares that would have been issued if the Options had been exercised prior to the record date for the bonus issue. The Exercise Price will not change.

• $10.$ In the event of any reorganisation (including consolidation, sub-division, reduction or return) of the issued capital of the Company, the rights of the Option Holder including the number of Options or the Exercise Price or both shall be reorganised (as appropriate) to the extent necessary to comply with the Listing Rules of Australian Stock Exchange Limited applying to a reorganisation of capital at the time of the reorganisation.
• $11.$ If during the currency of any Options and prior to their exercise a takeover offer or a takeover announcement (within the meaning of the Corporations Act 2001) is made to holders of shares then within 10 Business Days after the Company becomes aware of the offer, the Company must forward a notice notifying each Option Holder of the offer. Notwithstanding any other terms and conditions applicable to the Options, all Options held by the Option Holder vest on the making of a takeover offer or takeover announcement.
• $12.$ If an offer for the shares is made to shareholders of the Company pursuant to a scheme of arrangement which has been approved in accordance with the Corporations Act 2001, Option Holders will be entitled to exercise Options held by them within the period notified by the Company.
• 1. The Options are not transferable except with the prior written consent of the Company. If the Company consents to the transfer of the Options, the Company may impose any conditions, including a condition that the transferee agree to be bound by the above terms and conditions, that it in its sole discretion determines to be appropriate.
• $14.$ Notices may be given by the Company to the Option Holder in the manner prescribed by the constitution of the Company for the giving of notices to the shareholders of the Company and the relevant provisions of the constitution will apply with all necessary modification to notices to be given to Option Holders.

PROXY FORM

The Secretary Tolhurst Noall Group Ltd Level 29, 35 Collins Street, Melbourne 3000
I/We		(please print)
οf		(please print)
	being a member(s) of Tolhurst Noall Group Ltd appoint:
Name of Proxy
	Address of Proxy communications and the contract of Proxy contract of Proxy
	or, in his/her absence:
	Name of Proxy manufacturer and the contract of Proxy
	Address of Proxy
or, if I/we have not nominated a proxy or if the nominee is absent from the meeting, the Chairperson of the meeting as my/our proxy to vote on my/our behalf in accordance with the following instructions (or if no instructions are given, as the proxy sees fit) at the annual general meeting of Tolhurst Noall Group Ltd to be held on Friday 21 November 2003 and at any adjournment of that meeting.
If two proxies are being appointed, complete the following sentence: This proxy is authorised to exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE EXE
	Directing your Proxy
To instruct your proxy how to vote, insert 'X' in the appropriate column against each item of business set out below. If you do not instruct your proxy how to vote on a resolution, your proxy may vote as he/she thinks fit or abstain from voting.
I/We instruct my/our proxy to vote as follows:
		For	Against	Abstain
1.	To re-elect Ian Johnson as a Director of the Company
2.	To re-elect Don Taig as a Director of the Company
3.	To re-elect Russell McKimm as a Director of the Company

4.	To approve the issue of $3,600,000$ options
	To approve the issue of $150,000$ options to Russell McKimm
6.	To approve the issue of 250,000 options to Craig Graham-Smith
	To approve the issue of $3,400,000$ options to John Wilson

Chairperson's voting intentions

The Chairperson's voting intentions in relation to undirected proxies are:

		For	Against	Abstain
1.	To re-elect Ian Johnson as a Director of the Company
2.	To re-elect Don Taig as a Director of the Company
3.	To re-elect Russell McKimm as a Director of the Company
4.	To approve the issue of $3,600,000$ options
5.	To approve the issue of 150,000 options to Russell McKimm
6.	To approve the issue of $250,000$ options to Craig Graham-Smith
7.	To approve the issue of $3,400,000$ options to John Wilson
	If you do not wish to direct your proxy how to vote please place a mark in the box

to vote, please place a mark in the box.

By marking this box, you acknowledge that the Chairperson (if he or she is your proxy) may exercise your proxy even if he or she 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.

This proxy must be signed by each appointing member (or the member's attorney). Proxies given by a company must be executed in accordance with section 127 of the Corporations Act 2001 (Cth) or signed by a duly authorised officer or attorney.

Dated: .......................................

. . COMMON SEAL	SIGNATURE(S)	NAME (print)

The proxy form and the power of attorney or other authority (if any) under which it is signed (or a certified copy) must be received by the company, by no later than 5.00pm on Wednesday 19 November 2003:

• by mail to the Company Secretary using the enclosed reply envelope to: Level 29, $(a)$ 35 Collins Street, Melbourne 3000;
• $(b)$ by facsimile: (03) 9242 4040;
• by delivery to Tolhurst Noall Group Ltd's registered office at Level 29, 35 Collins $(c)$ Street, Melbourne 3000.

Notes:

• 1. A member who is entitled to vote at the meeting may appoint:
• $(a)$ one proxy if the member is only entitled to one vote; or
• $(b)$ one or two proxies if the member is entitled to more than one vote.
• Where the member appoints two proxies, the appointment may specify the proportion or number of votes that $\mathbf{2}$ each proxy may exercise. If the appointment does not specify a proportion or number, each proxy may exercise one-half of the votes in which case any fraction of votes will be disregarded.
• $3.$ If you require an additional proxy form, the company will supply it on request.
• $\boldsymbol{4}$ . A proxy need not be a member of the company.