FIRST LITHIUM LIMITED — Regulatory Filings 2003

Oct 22, 2003

ADVANCED ENGINE COMPONENTS LIMITED

ACN 009 081 770

NOTICE OF 2003 ANNUAL GENERAL MEETING

AND

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

A PROXY FORM IS ENCLOSED

Please read the Notice and Explanatory Memorandum carefully.

If you are unable to attend the 2003 Annual General Meeting of shareholders please complete and return the enclosed Proxy Form in accordance with the specified directions.

ADVANCED ENGINE COMPONENTS LIMITED

ACN 009 081 770

NOTICE OF MEETING

&

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

Notice is given that the 2003 Annual General Meeting of Advanced Engine Components Limited ("AEC" or the 'Company") will be held at 14 Energy Street, Malaga, Western Australia, on Friday 28^th November 2003 at 10.00am.

AGENDA

ORDINARY BUSINESS

$\mathbf{1}$ Financial Reports

To receive the financial report and the directors' and auditors' reports for the year ended 30 June 2003.

$\overline{2}$ Resolution 1: Election of Director - Mr Graham Keys

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

"That Mr Graham Keys being a Director of the Company who retires by rotation pursuant to Rule 8.1(e) of the Company's Constitution, and being eligible, is re-elected as a Director of the Company."

$\overline{\mathbf{3}}$ Resolution 2: Election of Director - Mr George Long

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

"That Mr George Long being a Director of the Company who retires by rotation pursuant to Rule 8.1(e) of the Company's Constitution, and being eligible, is re-elected as a Director of the Company."

SPECIAL BUSINESS

Resolution 3: Directors' Fees 4

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

"That the aggregate remuneration of all non-executive directors be fixed at a maximum of \$350,000 per annum, to be divided amongst the non-executive directors as the Board may resolve from time to time."

$\tilde{\mathbf{5}}$ Resolution 4: Ratification of the Issue of Securites

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

"That for the purposes of Listing Rule 7.4 of the Listing Rules of ASX, the company ratifies the allotment and issue of 7,500,000 fully paid ordinary shares in the capital of the Company at an issue price of 4.6 cents per share in consideration for advisory and corporate services provided by Margrave Holdings Ltd."

VOTING EXCLIBIONS

Resolution 3

In relation to Resolution 3, pursuant to Listing Rule 10.17.1 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast by or on behalf of the Directors of the Company or their associates. However the Company need not disregard a vote if cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or 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.

Resolution 4

In relation to Resolution 4, pursuant to Listing Rule 7.5.6 of the Listing Rules of Australian Stock Exchange Limited, the Company will disregard any votes cast by or on behalf of a person who participated in the issue or their associates. However the Company need not disregard a vote if cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or 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.

EXPLANATORY MEMORANDUM

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Meeting.

SNAPSHOT DATE

For the purposes of regulation 10.2.115 of the Corporations Regulations, the Directors have set a snapshot date to determine the identity of those persons eligible to vote at the 2003 Annual General Meeting. The snapshot date is 10.00am (Perth time) on Wednesday 26th November 2003.

PROXIES

In accordance with section 249L of the Corporations Act, shareholders are advised that:

• each shareholder has a right to appoint one proxy, and if the shareholder may cast two or more votes, $\bullet$ the shareholder may appoint two proxies;
• a proxy need not be a shareholder of the Company; and $\bullet$
• if a shareholder appoints two proxies, the shareholder may specify the proportion or number of votes $\bullet$ each proxy is appointed to exercise.

In accordance with the Company's Constitution, shareholders are further advised that:

• if the appointment does not specify the proportion or number of the shareholder's votes, each proxy $\bullet$ may exercise half of the shareholder's votes; and
• if a shareholder appoints two proxies, only one may vote on a show of hands. $\bullet$

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

Principal Office:	14 Energy Street Malaga WA 6090
Facsimile Number:	$(08)$ 9209 6999
Postal Address:	PO Box 3126 Malaga WA 6090

The instrument appointing the proxy must be signed by the shareholder, or by the shareholder's attorney who is authorised to sign the instrument under a power of attorney.

If a shareholder is a company it must sign the instrument in accordance with section 127 of the Corporations Act.

A proxy is not entitled to vote unless the instrument appointing the proxy, and the authority under which the instrument is signed or a certified copy of the authority, is either deposited at the registered office of the Company or sent by facsimile to that office, and in each case to be received not less than 48 hours prior to the time of the meeting (being not later than 10.00 am Perth time on Wednesday, 26th November 2003).

By Order of the Board

Dated: 23 October 2003

76 Schmidt

Nerida Schmidt Company Secretary

ADVANCED ENGINE COMPONENTS LIMITED

ACN 009 081 770

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

This Explanatory Memorandum has been prepared to assist shareholders of the Company in understanding the business to be put to shareholders for their consideration at the forthcoming 2003 Annual General Meeting of the Company.

The Directors recommend that you read this Explanatory Memorandum and attend the forthcoming 2003 Annual General Meeting.

1. Annual Financial Reports

The first item of the Notice of Annual General Meeting deals with the presentation of the financial report and reports of the directors and auditors of the Company for the year ended 30 June 2003. Shareholders should consider the documents and raise any matters of interest with the Directors when this item is being considered.

No resolution is required in respect of this item.

2. Resolutions 1&2 - Election of Directors

It is a requirement under the Company's Constitution that one third of all directors other than the Managing Director refire at each annual general meeting. Accordingly, Messrs Graham Keys and George Long, the longest standing directors retire from office. Both of them being eligible, have offered themselves for re-election as Directors of the Company.

3. Resolution 3 – Increase of Directors' Fees

By resolution dated 7 October 2003, at the 2002 Annual General Meeting of the Company, the aggregate remuneration of all non-executive directors was fixed at \$250,000 per annum.

The Board has reviewed this figure and has determined that his amount should be increased by an amount of \$100,000 to \$350,000 in order to sufficiently reward the current non-executive directors for the inputs and value which they have brought to the Company. It is also desirable to set this amount at a level sufficient to attract and retain directors of the required experience and expertise in the future.

Shareholder approval of this increase is sought for the purposes of Listing Rule 10.17 and Article 8.3(a) of the Company's constitution.

Resolution 3 has the effect of increasing the directors' remuneration fees to \$350,000.

4. Resolution 4 – Ratification of Issue of Securities

On 9 May 2003 the Company issued 7,500,000 fully paid ordinary shares in the capital of the Company at an issue price of 4.6 cents per share in consideration for advisory and corporate services rendered by Margrave Holdings Limited to New Tel Limited, the previous holding company. Margrave Holdings Limited is not associated with any director or former director of the Company.

The shares issued rank equally with all other fully paid ordinary shares on issue.

Under ASX Listing Rule 7.1, the Company is permitted to issue up to 15% of the number of its equity securities within a 12 month period without the requirement for shareholder approval.

Shareholder approval to the issue of the shares in Resolution 4 was not required at the time of the issue. The purpose of seeking shareholder ratification of the issue of the shares is to effectively reinstate the maximum limit under the Listing Rules on the number of equity securities that the Company may issue without shareholder approval.

The issue of shares the subject of Resolution 4 was effected by a previous board of the Company. The current Directors wish to note that this ratification is done solely for the purposes of refreshing the 15% share issue capability of the Company under ASX Listing Rule 7.1 and that by proposing Resolution 4 the current Board makes no judgement or statement in relation to the propriety of that issue.

APPOINTMENT OF PROXY FOR THE 2003 ANNUAL GENERAL MEETING OF ADVANCED ENGINE COMPONENTS LIMITED

Appointment of proxy
1/We				(Insert name clearly in block letters)
of being a member of Advanced Engine Components Limited, hereby appoint:				(Insert address)
				(lnsert name of proxy)
or failing the person so named or, if no person is named, the Chairperson of the Meeting, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the 2003 Annual General Meeting to be held on 28 November 2003 and at any adjournment thereof.
If you are voting with some of your shares only, please mark this box
Voting on business of the 2003 Annual General Meeting -83		FOR	AGAINST	ABSTAIN
Resolution 1 - Election of Director -- Mr Graham Keys		□	n	□
Resolution 2 - Election of Director - Mr George Long		□	◘	□
Resolution 3 $-$ Increase of Directors Fees		□	◘	□
Resolution 4 - Ratification of Issue of Securities		П	Ω	n
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. ОR
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.
		Proportion of votes	Number of votes
If you wish to appoint two proxies: € State the percentage or number of your votes applicable to this form.			$\%$
Ð Sign here: This section must be signed.
All individuals and Joint holders must sign	Corporations Act.		Companies – executed in accordance with section 127 of the
Signature	Director
Signature		Director/ Company Secretary
Signature		Sole Director and Sole Company Secretary