THORNEY TECHNOLOGIES LTD — Proxy Solicitation & Information Statement 2011

May 30, 2011

==> picture [121 x 79] intentionally omitted <==

AUSTRALIAN RENEWABLE FUELS LIMITED ABN 66 096 782 188

NOTICE OF GENERAL MEETING

and

EXPLANATORY MEMORANDUM

DATE OF MEETING 28 June 2011

TIME OF MEETING 11.00am AEST

PLACE OF MEETING

Offices of Gadens Lawyers Level 25, Bourke Place, 600 Bourke Street, Melbourne, VIC, Australia 3000

This Notice of General Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

1

ABN 66 096 782 188

Notice of General Meeting of Australian Renewable Fuels Limited

NOTICE IS HEREBY GIVEN that a General Meeting of the Shareholders of Australian Renewable Fuels Limited (“ Company ”) will be held at the offices of Gadens Lawyers at Level 25, Bourke Place, 600 Bourke Street, Melbourne on 28 June 2011 at 11.00 am EST for the purpose of transacting the following business.

An Explanatory Memorandum containing information in relation to each of the following Resolutions accompanies, and forms part of, this Notice of Meeting.

BUSINESS:

RESOLUTION 1 – Approval of Prior issue of Shares

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

That, for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders approve and ratify the issue of 180,000,000 ordinary shares made to various professional and sophisticated investors on 10 March 2011 at the price of 2 cents per share and otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 1 by the entities which participated in the issue and any associates of those entities. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it 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 2 – Approval of the Issue of Secured Convertible Notes

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

That for the purposes of Listing Rule 7.1 and for all other purposes, approval is given to the allotment and the issue by the Company of 273 Secured Convertible Notes, each with a face value of $50,000.00, on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting, and to the allotment and issue of ordinary, fully paid shares in the Company and options upon the conversion of any of those Secured Convertible Notes.

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution 2 by any person who might participate in the issue, and a person who might obtain a benefit (except a benefit solely in the capacity of a holder of ordinary shares if the resolution is passed) and any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it 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.

2

RESOLUTION 3 – Approval of Employee Share Option Plan

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

That for the purposes Listing Rule 7.1, approval is given to the issue of 50,000,000 options under the Company’s Employee Share Option Plan as an exception under Listing rule 7.1.

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution 3 by the Directors of the Company (except where the vote is cast by a Director who is ineligible to participate in the Employee Share Option Plan) and any associate of the Directors. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it 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.

PROXIES

A Shareholder entitled to attend and vote at the General Meeting of Shareholders may appoint not more than two proxies. Where more than one proxy is appointed, each proxy may be appointed to represent a specified proportion of the Shareholder’s voting rights. A proxy may, but need not be, a shareholder of the Company. Proxy forms must reach the Registrar of the Company at least 48 hours prior to the General Meeting.

BY MAIL Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria, Australia 3001 BY FAX 1800 783 447 (From within Australia) +61 3 9473 2555 (From outside Australia)

ONLINE: www.intermediaryonline.com (For Intermediary online users only)

ENTITLEMENT TO VOTE

For the purposes of regulation 7.11.37 of the Corporations Regulations, the Company has determined that members holding ordinary shares at 7.00 pm AEST on 26 June 2011 will be entitled to attend and vote at the General Meeting.

EXPLANATORY STATEMENT

This Notice of Meeting should be read in conjunction with the accompanying Explanatory Statement which forms part of this Notice of Meeting.

By order of the Board

==> picture [94 x 48] intentionally omitted <==

Stephan Scheffer Company Secretary

31 May 2011

3

Explanatory Memorandum

This Explanatory Memorandum provides Shareholders with information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting (“ Notice ”) of Australian Renewable Fuels Limited (“ Company” ).

The Directors recommend Shareholders read this Explanatory Memorandum in full before making any decision in relation to the Resolutions.

RESOLUTION 1 - Ratification of Previous Share Issue

On 3 March 2011, the Company announced that it had placed 180,000,000 ordinary fully paid shares at a price of 2 cents per share. The shares were placed to professional and sophisticated investors.

Listing Rule 7.1 prohibits a company from issuing securities which represent more than 15% of its ordinary shares in a 12 month period without shareholder approval, except in certain circumstances, none of which applied to the recent issue.

The 180,000,000 shares issued represented approximately 14.45% of the Company’s ordinary shares immediately prior to completion of the placement, so the Company has no ability to issue further shares quickly to take advantage of opportunities which may arise.

However, Listing Rule 7.4 permits the ratification of a previous issue of securities made without prior shareholder approval, provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to restore a company's maximum discretionary power to issue further securities up to 15% of the issued capital of the company without requiring shareholder approval. Shareholder approval is sought under Resolution 1 to ratify the issue of 180,000,000 ordinary, fully paid shares to various professional and sophisticated investors to restore the Company’s ability to place up to 15% of its ordinary shares without shareholder approval.

The shares issued were fully paid ordinary shares ranking equally with all other ordinary shares in the Company. The shares were issued to the following allottees:

ACCBELL NOMINEES PTY LTD	22500000
MR ATKINS	2000000
AZNANOB PTY LTD	500000
CHARMOF NOMINEES PTY LTD	1500000
MR & MRS DAVEY	2500000
DIXSON TRUST PTY LTD	10000000
ERABUN NOMINEES PTY LTD	2500000
JOHN O'SULLIVAN PTY LTD	2500000
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED	28500000
MT ROTHWELL INVESTMENTS PTY LTD	200000
PPT NOMINEES PTY LTD	1500000
RBC DEXIA INVESTOR SERVICES AUSTRALIA
NOMINEES PTY LIMITED	50000000
SEASPIN PTY LTD	7500000
MR SHARP & MRS ETHERTON	1500000
TOPSFIELD PTY LTD	10000000
UBS NOMINEES PTY LTD	11000000
UBS WEALTH MANAGEMENT
AUSTRALIA NOMINEES PTY LTD	25000000
MS WHITE	800000

The funds raised ($3,600,000) will be used for general working capital.

4

RESOLUTION 2 – Issue of Secured Convertible Notes

On 24 January 2011, the Company announced that it had signed a non-binding agreement in relation to the acquisition of Biodiesel Producers Limited ( BPL ) based on the acquisition of BPL’s existing convertible notes by the issue of new, secured convertible notes in the Company.

Following further negotiations with BPL, the Company has now signed formal agreements under which, subject to certain conditions;

• (a) the Company’s wholly owned subsidiary, ARF Adelaide Pty Ltd, will acquire the business and assets of BPL for consideration which consists of:

• a cash payment of approximately $9 million to be used by BPL to discharge its existing financing facility; and

• the issue of a promissory note with a face value of $13.65 million;

(The Company will meet the cash payment through a new facility arrangement of $12 million to be arranged by BPL and the Company)

The promissory note will subsequently be acquired by the Company as consideration for the Company agreeing to the cancellation of convertible notes in BPL to be acquired by the Company as discussed below. The promissory note will then be an inter-company debt between the Company and ARF Adelaide.

• (b) the Company will purchase convertible notes issued by BPL with a face value of $17 million in consideration for:

• the payment of $1 million in cash,

• the issue by the Company, subject to shareholder approval, to the BPL noteholders of secured convertible notes (ARF Convertible Notes or Notes) with an aggregate face value of $13.65 million;

• possible additional payments, conditional upon the performance of the BPL plant at Barnawatha, as follows;

  • if production of the Barnawatha plant exceeds 75% of its maximum annual capacity of 58 million litres over a 3 year period, 16.33 cents for each litre of biodiesel produced in excess of 75% of the plant’s capacity in that period;

  • if production exceeds 85% of the Barnawatha plant capacity over that 3 years period, 16.33 cents per litre of biodiesel produced in excess of 75% of the plant capacity for a further 2 years;

• all amounts payable by the Company under the ARF Convertible Notes and under the agreement with the BPL noteholders (including any additional payments of 16.33 cents per litre of biodiesel referred to above), will be secured by a fixed and floating charge to be given by ARF Adelaide over its assets (with specific mortgages over the lease of the land on which its plant at Largs Bay is situated and over the land for the biodiesel plant being acquired from BPL), and by a mortgage given by the Company over its shares in ARF Adelaide.

5

• (c) the Company will offer to purchase the shares of the shareholders in BPL (other than those held by the BPL noteholders) at a price of 7 cents per share, payable on or before 31 December 2011. If all BPL shareholders to whom the offer is made accept the offer, the Company will pay a maximum of $2.8 million for the BPL shares.

The agreement with the BPL noteholders requires them to procure BPL to undertake a selective capital reduction pursuant to which the shares in BPL held by the Company (and of all but one of the other BPL shareholders) will be cancelled for no consideration.

The BPL facility has a capacity of 58 million litres per annum, and is well positioned to service the East Coast market. The plant, built in 2008 and operational since that time, is a major supplier of product to various oil companies, as well as the regional market. The acquisition of the BPL plant will give the ARF group a production capacity in excess of 150 million litres of 100% biodiesel per year, and excellent coverage of the main industrial areas of Australia, with the existing ARF plants (45 million litre capacity each) being located in WA and SA respectively. All of the biodiesel is produced using non-food grade feedstock, and fully meets Australian and international standards. The original investment in plant and equipment for the 3 plants was in excess of $150 million.

With the growing utilization of Biodiesel within the industrial and transport sectors, the combination of the ARF and BPL assets will have direct benefit with regard to:

• Overall supply conditions with the major operating companies in Australia, with a consistent and certified quality of product;

• Ability to leverage feed stock logistics, as well as further optimize the use of specific low cost alternate feed stocks for all plants;

• Optimization of the overall cost base for the business, whilst focussing on further expansion of the market opportunities becoming available; and

• Strong accretive growth for the ARF investors, given that the acquisition will be completed on the basis of no new immediate equity.

Acquisition of BPL business

Under the Business and Asset Purchase Agreement dated 3 April 2011, ARF Adelaide will purchase the business and assets of BPL, including the property at Barnawatha on which BPL’s biodiesel plant is located, free from any encumbrance.

The Business and Asset Purchase Agreement is conditional upon:

• (a) the completion of the Note Purchase Agreement referred to below;

• (b) the Company obtaining a finance facility with a limit of not less than $12 million;

• (c) the assignment of all contracts and licences necessary for ARF Adelaide to continue to operate the business; and

• (d) key employees of BPL involved in the operation of the business, and 50% of other employees of BPL employed in the business, accepting offers of employment by ARF Adelaide.

If all conditions are satisfied (or waived), ARF Adelaide will acquire and operate the business, and assume liability for the obligations of the business, as from the date of completion.

The Company has guaranteed the obligations of ARF Adelaide under the Agreement.

6

Purchase of BPL Notes

The Company has agreed, under a Note Purchase Deed, also dated 3 April 2011 to purchase, free from all encumbrances, convertible notes in BPL, with a face value of $17 million, which are held by 3 noteholders.

As consideration for the BPL notes, the Company will issue 273 ARF Convertible Notes on the terms and conditions set out below, and pay $1 million, to the BPL noteholders.

As the Company has agreed to make further payments to the BPL noteholders based on the performance of the biodiesel plant at Barnawatha, as described above, the Company has agreed to use all reasonable endeavours to ensure that the Barnawatha plant is operated at its maximum capacity, and to accept all business that will, or could reasonably be expected, to provide an operating margin (after freight) of an agreed amount.

If the Company or ARF Adelaide becomes insolvent, the Barnawatha plant will be deemed to have operated at its capacity for a period of 5 years (being the initial 3 year period and possible 2 year extension referred to above), and the additional payment of 16.33 cents per litre, based on the biodiesel produced in excess of 75% of the maximum capacity of the Barnawatha plant over the 5 year period, will be payable within 90 days of written notice from a Noteholder.

Under the Note Purchase Agreement, the Noteholders have the right, while ARF Convertible Notes remain on issue, to nominate a person to be a director of the Company, but must procure their nominee to resign once all Notes are redeemed or converted.

Terms of ARF Convertible Notes

The ARF Convertible Notes for which shareholder approval is now sought will, if shareholder approval is given, be issued on the following terms;

General Terms of Issue

Each Note;

• (a) will have a principal amount of and be issued at $50,000.00;

• (b) is transferable to a related party of a Noteholder, or upon a change of trustee, where the Notes are held on trust, or with the prior written approval of the Company, which cannot be unreasonably withheld;

• (c) is a secured obligation of the Company; and

• (d) will have a maturity date of five years from the date of issue.

Interest

Interest will be payable on a Note at the rate of 10% per annum, payable half-yearly, until repayment or conversion of the Note. If in the financial year ending 30 June 2012, production of biodiesel from the BPL is less than 75% of its annual capacity of 58 million litres, the Company may elect to capitalise interest for that financial year, in which case the interest will be added to the principal amount owing under the Note.

If the Company defaults in an interest payment, it must pay penalty interest at the rate of 12%.

7

Conversion

A Noteholder may at any time after 12 months from the date of issue of a Note and prior to the maturity date elect to convert all (but not some) of the Notes held by the Noteholder into Shares.

The number of Shares to be issued on conversion of a Note will be calculated by dividing the aggregate Principal Money of the Notes being converted by the conversion price of 6 cents, but if a Noteholder gives a notice of conversion within 14 days after receiving a maturity notice from the Company (which is to be given on the maturity date), the conversion price will be the volume weighted average price ( VWAP ) of the Company’s Shares for the 3 month period prior to the maturity date less a discount of 10%.

The Company must issue Shares within 15 days of receiving a conversion notice. Shares issued on conversion of a Note will rank equally in all respects with shares on issue at the date of conversion including for dividends but a dividend will not be payable where the conversion date occurs after the record date for that dividend but on or before the dividend payment date.

No purported conversion will have any effect if the conversion of the Notes would cause the Company, the Noteholder or any Shareholder, to be in breach of the law.

Options to be issued on Conversion

For every 3 shares issued on conversion of a Note, the Company will issue an Option on the following terms:

1. Each Option will entitle the holder to subscribe for one ordinary fully paid share in the capital of the Company at an exercise price of $0.03 per share.

2. Subject to the Corporations Act, an Option may be exercised at any time during the 2 year period commencing from the date that the Option is issued.

3. The holder may exercise the Options in whole or in part, provided that any exercise of Options must be in multiples of 5,000, except where the holder exercises all of their options.

4. An Option may be exercised by the holder giving notice in writing to the Company, together with the exercise price paid by cheque or in such other manner as the company determines to accept.

5. The date of exercise of an Option will be the date on which notice of exercise of the Option is received by the Company.

6. Shares issued on the exercise of Options will be on the same terms and conditions, and will rank equally with, the ordinary fully paid shares in the Company.

7. The Company will apply to the ASX for official quotation of the shares issued on the exercise of Options within 3 business days of their issue.

8. In the event of any reorganisation of the Company’s capital, the rights of the holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

9. Options will not entitle the holder to participate in any new issues by the Company without the exercise of the Options.

8

Repayment

A Note will be redeemed, and the amount owing on a Note (including any capitalised or accrued interest), will be repayable;

• (a) on the maturity date (being the date 5 years from the issue date);

• (b) if interest on the Note is not paid on the due date, or within 5 days of notice to do so from the Noteholder whose interest was not paid on the due date;

• (c) if the Company or ARF Adelaide becomes insolvent within the meaning of the Convertible Note Deed; or

• (d) the Company elects to redeem the Note.

If a Note is redeemed;

• (a) within 18 months of the date of its issue, the amount payable by the Company on its redemption will be 105% of the issue price; or

• (b) later than 18 months after the date of issue, the amount payable by the Company will be 106% of the issue price,

plus in either case all capitalised and accrued interest.

Security

The repayment of the ARF Notes, together with interest and any additional payments per litre based on the performance of the Barnawatha plant, will be secured by;

• (a) a fixed and floating charge given by ARF Adelaide over all of its assets;

• (b) a mortgage of the land at Barnawatha on which the Barnawatha plant is built;

• (c) a mortgage of the lease of the land on which ARF Adelaide’s plant at Largs Bay is located; and

• (d) a mortgage over the shares in ARF Adelaide held by the Company.

Effect of Conversion

If all the Notes are converted at the conversion price of 6 cents per share, the Company will issue 227,500,000 shares. If no other shares in the Company are issued, this would represent 11.96% of the Company’s then issued capital. If the 75,833,333 options issued on conversion of all the Notes were exercised (assuming again no other shares were issued) the Noteholders would hold 15.34% of the Company’s issued shares. On a fully diluted basis, the shares issued on conversion and exercise of the options would represent 11.62% of the Company’s issued share capital.

In the event that all the Noteholders elect to convert the Notes upon receipt of a maturity notice then the maximum number of shares that the Company would be required to issue to each Noteholder under the terms of the Notes is not to exceed 20% of the Company’s then issued capital, irrespective of the VWAP of the shares at the maturity date.

The following examples of the effect of the Note conversion are for the purpose of illustration only and should not be regarded as indications of the value of Shares at the maturity date.

9

In the event that all the Noteholders elect to convert the Notes upon receipt of a maturity notice, then:

• if the VWAP of the Shares, less the discount of 10%, was equal to two (2) cents per Share the Company would issue 682,500,000 Shares and 227,500,000 options to the Noteholders. The issue of these securities would, however, be subject to the requirement that the maximum number of shares that the Company could issue to each Noteholders would be 20% of the Company’s then issued capital; or

• if the VWAP of the Shares, less the discount of 10%, was equal to four (4) cents per Share the Company will issue 341,250,000 Shares and 113,750,000 options.

Issue of Notes

The ARF Convertible Notes will be issued to:

ANZ Specialist Asset Management Limited 241 Notes (in its capacity as trustee and responsible entity for Energy infrastructure Trust) Maxdy Nominees Pty Ltd 16 Notes (in its capacity as trustee for Maxdy Trust) Ellise Investments Pty Ltd 16 Notes (as trustee for Tawarri Superannuation Fund)

The ARF Convertible Notes will be issued no later than 3 months after the date of the meeting.

RESOLUTION 3 – Approval of Employee Share Option Plan

The Company currently operates an Employee Share Option Plan as a way of promoting productivity. Under Listing Rule 7.2, shareholders can approve the Employee Share Option Plan and thereby allow an issue of securities by the Company without reducing its ability to issue shares under Listing Rule 7.1.

The key terms of the Employee Incentive Plan are:

• (a) A new offer of shares under option aggregated with the number of shares which would be issued under any offer to receive options or each option were each such option exercised and the number of shares that have been issued under the plan during the previous 5 years to employees or directors in accordance with the plan does not exceed 5% of the total number of issued shares as at the time of the offer is made under the plan.

• (b) An offer may be made to an Eligible Person, being a person who is then a Director or an employee (whether full time or part time) of the Company or of an associated body corporate of the Company.

• (c) The Board, having regard to certain factors such as seniority of the Eligible Person, the length of service, the record of employment, the potential contribution of the Eligible Person and any other matters which the Board considers relevant, may make an offer to an Eligible Person for participation in the Plan and may make any number of offers to each Eligible Person at the Board discretion.

• (d) The Offer to an Eligible Person will include number of Options offered, the method of calculating the exercise price, the period in which the offer can be accepted and the period, or periods in which the Option can be exercised and the Expiry date.

10

• (e) There is no consideration payable by an Eligible Person for the grant of an Option.

• (f) The Options are not transferrable (except where the Eligible Person dies).

• (g) Subject to the rules of the Plan and the terms of the Option, the Options may be exercised at any time commencing on the issue date and ending on the expiry date.

• (h) In addition the Options may be exercised in the following circumstances: During a bid period; at any time after a Change of Control event; or an application under section 411 of the Corporations Act, if a court orders a meeting to be held.

• (i) All shares allotted on exercise of an option will be fully paid and rank parri parsu in all respects with shares previously issued.

• (j) If an Option is not exercised it will lapse on the Expiry Date.

• (k) If an Option is granted subject to an Exercise Condition and prior to the Exercise Condition being satisfied an Eligible Person ceases to be an Eligible Person then the Option will automatically lapse. Where they ceased to be an Eligible Person due to retirement, total and permanent disability, redundancy or death then they (or their nominee) will be able to exercise the option for up to 3 months or such later time as the board may determine in their discretion.

• (l) If an Eligible Person ceases to be an Eligible Person after an option is exercisable they may exercise their option for up to 1 month after the cease to be an Eligible Person or such longer time as the board may determine. If an Eligible Person ceases to be an eligible person due to retirement, total and permanent disability, redundancy or death then they may exercise their options up to the Exercise Date.

• (m) There are no participation rights included in the Employee Share Option Plan.

• (n) The Board, subject to the Listing Rules, may alter, delete or add to the rules of the Plan at any time. If these changes adversely affect the rights of participants to the plan then the board must obtain consent from holders of 75% of the then issued options.

Since the last date of approval of the Employee Share Option Plan (on 11 November 2010) there have been 20,000,000 Options allotted to Eligible Persons.

The securities will be issued within three years from the date of the meeting.

11

Glossary

" ASX " means ASX Limited ABN 98 008 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited;

" Board " means the board of directors of the Company;

" BPL " means Biodiesel Producers Limited;

" Company " means Australian Renewable Fuels Limited ABN 66 096 782 188;

" Corporations Act " means Corporations Act 2001 (Cth);

" Director " means a Director of the Company;

" Listing Rules " means the Listing Rules of the ASX;

" Notice " means the Notice of General Meeting accompanying this Explanatory Memorandum;

" Options " means options to purchase Shares in the Company;

" Plant " means the Company’s plant located in Picton, Western Australia;

" Resolution " means a resolution contained in the Notice;

" Shareholders " means holders of Shares;

" Shares " means fully paid ordinary shares in the Company; and

" AEST " means Australian Eastern Standard Time.

12