THORNEY TECHNOLOGIES LTD — AGM Information 2005

Nov 21, 2005

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AUSTRALIAN RENEWABLE FUELS LUNTER

AUSTRALIAN RENEWABLE FUELS LIMITED

ABN 66 096 782 188

SUITE 1B.LEVEL 5 SOUTH SHORE PIAZZA 85 SOUTH PERTH ESPLANADE SOUTH PERTH WA 6151

P.O. BOX 837 SOUTH PERTH WA 6951

7EL. +61893633500 $\mathcal{F}AX$ 161893633511 E-MAIL Info@arfuels.com.au WER v/ww.arfuels.com.au

Tuesday, 22 November 2005

Company Announcements Office Australian Stock Exchange Limited 10^th Floor, 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam,

a matamatika kacamatika katika sa matamatika na matamatika na matamatika na matamatika na matamatika na matama

RE: ANNUAL GENERAL MEETING - CEO'S ADDRESS

The Board of Australian Renewable Fuels Limited is pleased to provide the attached document for market release. The document provides an update of the Company's position up to and including the 18 November 2005, and will form the basis of the CEO's address to the Company's AGM, to be held as previously notified, on 25 November 2005 at the RAC Club in Sydney.

Yours faithfully,

Darryl Butcher CEO/Managing Director

AR Fuels Annual General Meeting - CEO's Address

Dear Shareholders and Guests

I am pleased to report that during the year your company made significant progress. For a new company in a new industry, our goal of commencing the construction of two plants and completing an Initial Public Offering was challenging. I am pleased to report that we have fulfilled most of the objectives we set for ourselves.

• Initial Public Offering the IPO was completed with the $\bullet$ successful listing of the company on May 10 this year. Since that time the Company has performed well on the ASX and is now trading at a significant premium to the listing price.
• Construction the Adelaide and Picton projects are well under construction and commissioning of the Adelaide plant has commenced.
• Executive Team we have developed a strong executive team with a diverse and complimentary skill base. All of the senior appointments have been made and the team is performing well. The quality of this team is evidenced by the very solid operating performance of the Company in the '05 financial vear - significantly better than forecast.
• Operating Cost Performance as reported in the Annual Report, the operating loss for the year was \$970k less than the forecast of \$1.471k.
• Exclusive Manufacturing License an exclusive manufacturing license was executed with Energea, our technology provider from Austria. This will allow us to develop the future plants that we plan from a far stronger commercial and project management position.
• Other Opportunities we have reviewed a number of opportunities over the year and continue to do so. The biodiesel industry is emerging rapidly in Australia and we are working to ensure that your company maintains its elevated position.

AUSTRALIAN RENEWAB. FUELS LUMTED

AUSTRALIAN RENEWABLE FUELS LIMITED

ABN 66 096 782 188

SUITE 1B.LEVEL 5 SOUTH SHORE PIAZZA 85 SOUTH PERTH ESPLANADE SOUTH PERTH WAS 5151

P.O. BOX 837 SOUTH PERTH WA 6951

7Æ£.	+61 8 9363 3500
≌AX	161893633511
医小性杂胚	info@arfuels.com.au
WEB	www.arfuels.com.au

Achieving this position however, has not been without disappointments. The Adelaide project has experienced delays to its completion date and budget over-runs. These delays and over-runs may be attributed to the prevailing conditions in the Australian, and indeed, global construction industry.

The Adelaide project is now scheduled to complete commissioning in February 2006, a delay of up to 3 months. Picton on the other hand is still scheduled to complete commissioning in March '06 and has experienced no material delays. The delays in Adelaide will clearly lead to reduced production in the '06 financial year.

In the ARF prospectus document, we estimated that the capital cost of these two projects would be \$30.7 million. We are now expecting actual capital expenditure to exceed this figure by between 10% and 15%.

The global boom that has caused the above situation has also led to very high resource commodity prices, particularly mineral oil. These higher prices will partially offset the effects of the delay and higher capital costs and until recently your Board was able to conclude that the profit forecast made in the prospectus would be achieved. Current modelling however has lead us to the conclusion that the Company's forecast profit from operations may not be achieved and that rather than the \$7 million forecast, a range of \$3 - 6 million is more likely. Importantly, this modelling also reveals that the cash reserves of the Company are sufficient to complete construction and bring both projects to full production.

The prospectus forecast was based on an 80:20 split between export and Australian sales respectively. Never the less, the Company has stated its intention to establish and develop the Australian market for biodiesel. As a consequence of negotiations held to date, there is clear potential for this to be achieved and should one or more of the contracts currently being negotiated be concluded in the '06 financial year then ARF will be able to report a profit range of between \$10 - 13 million. This increase of over \$7 million will occur if sufficient Australian sales are achieved, allowing the Federal Government Biofuels Capital Infrastructure Grant, awarded to ARF in 2005, to be taken to profit. Currently, the grant is recognised as income for the purposes of taxation, but by way of prudence, the Company's financial statements include a liability for the full amount received, as the grant is subject to performance criteria related to domestic sales volumes.

The industry currently presents numerous opportunities. We are uniquely positioned to capitalise on these opportunities given ARF is in the fortunate position of being on the verge of production status without a debt burden on its balance sheet. The coming year will see us progress to operational status and should see significant growth in our committed production capacity.

On behalf of the ARF Executive Team I thank you for the confidence you have shown in us by investing in ARF and look forward to challenges and achievements ahead of us.

Darryl J Butcher
CHIEF EXECUTIVE OFFICER