31 October 2005

QUARTERLY ACTIVITIES SUMMARY

The September 2005 quarter has been very positive for Advanced Engine Components Ltd ("ACE" or "the Company"). The key highlights of the period have been:

• ACE had nine active natural gas ("NG") engine development programmes in progress for three different end suppliers;

• The First Auto Works ("FAW")/ACE 6.6 litre NG engine achieved Euro 3 certification;

• ACE signed an agreement to supply ongoing technical support and NG engine components to a significant Australian Consortium;

• ACE had sales revenue in excess of $1m from the ongoing Irisbus contract;

• ACE advanced the development and patenting of its internally designed injectors and other spare parts for NG engines;

• ACE advanced the set up of infrastructure, assembly and procurement facilities at the Company’s Beijing premises;

• ACE entered alliance agreements with two separate groups covering Indonesia, Thailand, Malaysia, Myanmar, Singapore and Pakistan; and

• The Company resolved a long running royalty dispute over past and future revenue streams.

The activities throughout the first quarter of the 2006 Financial Year have the Company well placed to benefit from the increasing demand for NG engines. This demand continues to rise as a result of the price of oil, environmental concerns over diesel greenhouse emissions and economic growth in the Asian region.

The success of ACE’s developments throughout the first quarter have enabled the Company to announce, based on ACE customers advice, significant sales revenue expected to commence early in the 2006 calendar year (refer ASX announcements of 19 September 2005 and 25 October 2005).

For further information please contact:
Tony Middleton (Managing Director) on (08) 9209 6900; or
Email: shares@advancedengine.com

APPENDIX 4C

Appendix 4C, Quarterly Cashflow statement, September 2005 (PDF, 216k)

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