1 September 2003

Company Announcements Office
The Australian Stock Exchange Limited
Exchange Centre
20 Bond Street
Sydney NSW 2000

Dear Sir/Madam

SALE OF BULLET DIVISION

The Company announces that as proposed in the Target Statement dated
18 July 2003 in response to the takeover Offer by 698 Capital International Limited,
it has been successful in selling its Bullet Supercar Division.

The division, which operates from Yatala (near Brisbane) in Queensland, has been
sold to Bullet Performance Products Pty Ltd, a Queensland based private
company.

The division has been sold as a fully operational business unit with the agreements
being finalised on 28 August 2003. Details of the agreements are confidential to
the parties, however the Company will receive approximately $489,000 from the
purchaser, under terms acceptable to both parties. Proceeds from the sale will be
used to extinguish commitments relating to the division, and future working capital.

Disposal of the Bullet division will significantly reduce operating costs and allow the
reallocation of management resources to focus on its alternative fuels technology
operations. The Directors are confident that this step in the restructuring of the
Company will have a positive impact on it’s long-term future.

Yours sincerely

NERIDA SCHMIDT
COMPANY SECRETARY

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