THORNEY TECHNOLOGIES LTD — Proxy Solicitation & Information Statement 2012

Feb 5, 2012

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AUSTRALIAN RENEWABLE FUELS LIMITED ABN 66 096 782 188

NOTICE OF GENERAL MEETING

and

EXPLANATORY MEMORANDUM

DATE OF MEETING 7[th] March 2012

TIME OF MEETING 11.00am AEDT

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.

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Notice of General Meeting of Australian Renewable Fuels Limited ABN 66 096 782 188

NOTICE IS HEREBY GIVEN that the 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 7 March 2012 at 11.00am AEDT for the purpose of transacting the following business.

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 1.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 7pm on 5 March 2012.

VOTING IN PERSON

To vote in person, attend the General Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

If you appoint the Chairman of the Company, a Director or a member of the Company’s senior management as your proxy, and do not direct them how to vote in accordance with the instructions on the proxy form, your vote will not be counted on all resolutions.

You may direct the Chair of the meeting to vote by either marking the boxes for each Resolution, or by marking the Chair’s box on the proxy form, in which case the Chair of the meeting will vote in favour of each item of business.

You are therefore strongly encouraged to direct your proxy how to vote on those resolutions.

A G E N D A

BUSINESS:

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

RESOLUTION 1 – Approve an issue of Options to Philip Garling - Director

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

“That for the purposes of section 208 of the Corporations Act 2001 and for the purposes of Listing Rule 10.11, approval is given to the grant to Mr Philip Garling of 15,000,000 Options exercisable at 4 cents per share on or before 28 February 2015, on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion:

The Corporations Act restricts members of the key management personnel (KMP) of the Company and their closely related parties from voting in relation to Resolution 1 in certain circumstances. In addition, a voting restriction applies in respect of these items under the Listing Rules.

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The Company will disregard any votes cast on the proposed resolution 1 by Philip Garling or any of his associates and by members of the KMP or their closely related parties.

However, the Company need not disregard a vote if it is cast:

• as proxy for a person entitled to vote in accordance with a direction on the proxy form; or

• by the Chair of the meetings as proxy for a person entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides.

What this means for Shareholders : If you intend to appoint a member of the KMP (such as one of the Directors) as your proxy, please ensure that you direct them how to vote on Resolution 1. If you intend to appoint the Chair of the Meeting as your proxy, you can direct him how to vote by either marking the boxes for Resolution 1 (for example if you wish to vote against or abstain from voting), or by marking the Chair’s box on the proxy form (in which case the Chair of the Meeting will vote in favour of this item of business).

RESOLUTION 2 – Approve an issue of Options to Michael Costello - Director

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

“That for the purposes of section 208 of the Corporations Act 2001 and for the purposes of Listing Rule 10.11, approval is given to the grant to Mr Michael Costello of 15,000,000 Options exercisable at 4 cents per share on or before 28 February 2015, on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion:

The Company will disregard any votes cast on Resolution 2 by Mr Michael Costello or any of his associates, as well as any votes cast as a proxy on this resolution by members of the KMP or their closely related parties in the circumstances set out in the Voting exclusion for Resolution 1.

RESOLUTION 3 – Approve an issue of Options to Julien Playoust - Director

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

“That for the purposes of section 208 of the Corporations Act 2001 and for the purposes of Listing Rule 10.11, approval is given to the grant to Mr Julien Playoust of 10,000,000 Options exercisable at 4 cents per share on or before 28 February 2015, on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion:

The Company will disregard any votes cast on Resolution 3 by Mr Julien Playoust or any of his associates, as well as any votes cast as a proxy on this resolution by members of the KMP or their closely related parties in the circumstances set out in the Voting exclusion for Resolution 1.

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

By order of the Board,

Andrew Metcalfe

Company Secretary 2 February 2012

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Explanatory Memorandum

This Explanatory Memorandum is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of 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.

The following information should be noted in respect of the various matters contained in the accompanying Notice:

RESOLUTIONS 1, 2 and 3 – Approve an issue of Options to Directors

The Company proposes to grant options to non-executive Directors Mr Philip Garling, Mr Michael Costello and Mr Julien Playoust in accordance with section 208 of the Corporations Act and Listing Rule 10.11.

The Corporations Act prohibits a public company from giving a financial benefit to its directors without Shareholder approval, unless the giving of the financial benefit falls under one of the exceptions specified in the Act. Financial benefit is defined to include the granting of options. Although it may be argued that the reasonable remuneration exception in the Act to the need for Shareholder approval applies in this case, it is considered prudent to obtain Shareholder approval to the grant of the options under the Act as well as under the Listing Rules.

The Listing Rules also prohibit the issue of securities to directors without Shareholder approval (except in certain circumstances, again one of which may apply here). In addition, if approval is given under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Shareholders are advised that Resolutions with the effect of granting 30 million options (with a 3 cent exercise price) to each of Messrs Garling, Costello & Playoust were previously included in the Notice of Annual General Meeting held on 15[th] December 2011. Those Resolutions were withdrawn prior to the Meeting. After consultation with shareholders the Board resolved to put to members the revised terms of the options as stated in this Explanatory Memorandum. It is worth noting that, based on the Proxy votes received, the Resolutions would have been passed if they had not been withdrawn.

The three resolutions have been redrafted on terms considered by the Board to be fair and reasonable and a better representation of the remuneration to be paid to non-executive directors in their roles on the Board.

The number of Options proposed to be issued to Messrs Garling and Costello are 15,000,000 each, and the number of Options proposed to be issued to Mr Playoust is 10,000,000 given that 5,000,000 Options are already held by Mr Playoust that were previously approved and issued in November 2009 with an exercise price of 2 cents and expiry date of 30 September 2014. The new Options have an exercise price of 4 cents.

In determining the number of Options to be granted, consideration was given to the relevant experience and role of Messrs Garling, Costello and Playoust, their overall remuneration terms, the current market price of Shares and recent pricing of the Company’s rights issue.

On conversion of the Options, funds received will be used for working capital purposes.

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The following information is given to Shareholders as required by the Corporations Act and the Listing Rules:

• (a) The related parties to whom financial benefits will be given if the resolutions are approved are Philip Garling, Michael Costello and Julien Playoust (non-executive Directors).

• (b) The financial benefit to be given is the grant of 15,000,000 options to each of Philip Garling and Michael Costello and 10,000,000 options to Julien Playoust. There is no issue price for the options.

• (c) From an economic and commercial point of view, the true potential costs and detriments of or resulting from, the grant of the options are;

• (i) no funds will be raised from the issue of the options. However, if all the options vest and are exercised, the Company will receive $1.6 million.

• (ii) if the options are granted and fully vest, and all are subsequently exercised, the Company will issue an additional 40,000,000 shares in total to all 3 parties, which will dilute the holdings of existing Shareholders by 1.48% (assuming no other change in the capital of the Company).

• (iii) if at the time options are exercised the ordinary shares of the Company are trading on ASX at a price higher than the exercise price, there may be a perceived cost to the Company;

• (iv) In the 12 months before the date of this Notice, the highest, lowest and last trading price of the Company’s ordinary shares on ASX was:

  • Highest: $0.029 (2.9 cents)

  • Lowest: $0.013 (1.3 cents); and

  • Last: $0.017 (1.7 cents).

• (v) the grant of the options will form part of the Directors’ remuneration as in the Board’s opinion the financial, legal and other responsibilities assumed by directors of public companies provide a risk that monetary fees alone do not adequately reward and do not provide adequate incentive to enable the Company to attract and keep board members and executive directors of the requisite level of experience and qualifications.

• (vi) The estimated fair value at grant date is based on historical data and is not necessarily indicative of exercise patterns that may occur. The estimated fair value at grant date of the option is measured using the Black-Scholes Option Pricing Model taking into account the terms and conditions upon which the options were granted. A Black-Scholes valuation of the value of the options is estimated at $492,840 in aggregate as at the date of this Notice of Meeting for Messrs Garling, Costello and Playoust. Management prepared this valuation and used the following information in determining the estimated fair value:

  • (a) the options have a 36 month life from their expected date of issue and are exercisable at 4 cents each;

  • (b) the share price of $0.017 cents per share as at 31 January 2012;

  • (c) a common volatility factor of 150.7%;

  • (d) A three year risk free interest rate of 3.13%;

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(vii) Terms of the Options:

Each Option entitles the holder to one (1) fully paid ordinary share in the capital of the Company.

• (a) The Options expire before 5.00pm (AEDT) on 28 February 2015 (Expiry Date).

• (b) The Options are exercisable at a price of $0.04 each.

• (c) The Options will become exercisable for Philip Garling and Michael Costello as to:

• i. 5,000,000 (being 33.33%) on 31 August 2012

• ii. 5,000,000 (being 33.33%) on 31 August 2013

• iii. 5,000,000 (being 33.33%) on 31 August 2014

and Options will become exercisable for Julien Playoust as to:

• iv. 3,333,333 (being 33.33%) on 31 August 2012

• v. 3,333,333 (being 33.33%) on 31 August 2013

• vi. 3,333,334 (being 33.33%) on 31 August 2014

• (d) In the event of (a) a takeover or merger of the Company; or (b) the sale by the Company of its main undertaking; then all Options shall be exercisable on the date that the takeover, merger or sale is completed.

• (e) If Messrs Garling, Costello and Playoust are terminated by the Company, for cause, then:

• i. Any Options that have vested will remain exercisable until the Expiry Date which is 28 February 2015;

• ii. Any options that have not vested shall immediately lapse.

• (f) If Messrs Garling, Costello and Playoust resign, then:

• i. Any Options that have vested will remain exercisable until the Expiry Date which is 28 February 2015;

• ii. Any options that have not vested will, at the discretion of the Board, immediately vest.

• (g) All shares issued upon exercise of the Options will rank pari parsu in all respects with the Company’s then issued shares. The Options will be unlisted. No quotation will be sought from ASX for the Options.

• (h) The Options are not transferable

• (i) There will be no participation rights inherent in the Options to participate in the new issues of capital by the Company offered to Shareholders during the currency of the Options.

• (j) In the event of a reorganisation of the capital of the Company, the rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

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• (viii) on a fully diluted basis including conversion of all the options on issue, the percentage interest of each of Messrs Garling, Costello and Playoust in the Company will change if the options are granted as follows:

		Current		After issue of Options
Philip Garling		1,363,000 shares Nil options Total diluted holding - 0.06%		1,363,000 shares 15,000,000 options at $0.04 Total diluted holding – 0.70%
Michael Costello		Nil shares or options Total diluted holding - 0%		Nil shares 15,000,000 options at $0.04 Total diluted holding – 0.65%
Julien Playoust		Direct holding: 5,000,000 options at $0.02 Indirect holding/related parties: J&M Playoust Superannuation Pty Ltd atf Julien and Michelle Playoust Superannuation Fund: 40,000,000 shares Michelle K Playoust (spouse): 12,000,000 shares AEH (for which the director is a discretionary beneficiary however has no right or direct entitlement to the equity of AEH): 278,000,000 shares Total diluted holding – 14.14%		Direct holding: 5,000,000 options at $0.02 and 10,000,000 options at $0.04 Indirect holding/related parties: J&M Playoust Superannuation Pty Ltd atf Julien and Michelle Playoust Superannuation Fund: 40,000,000 shares Michelle K Playoust (spouse): 12,000,000 shares AEH (for which the director is a discretionary beneficiary however has no right or direct entitlement to the equity of AEH): 278,000,000 shares Total diluted holding – 14.33%

The options will be issued within one month from the date of the meeting.

Mr Andrew White recommend shareholders vote in favour of Resolutions 1, 2 and 3.

As each of Messrs Garling, Costello and Playoust have a material personal interest in the outcome of the resolutions each feels it would not be appropriate to make a recommendation.

Glossary

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

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Glossary (continued)

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

• " Resolution " means a resolution contained in the Notice;

• " Shareholders " mean holders of Shares;

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

• " AEDT " means Australian Eastern Daylight Time.

VOTING ENTITLEMENTS

For the purpose of determining a person’s entitlement to vote at the Meeting, a person will be recognised as a Shareholder if that person is registered as a holder of Shares at 7pm (Melbourne time) on 5 March 2012 .

Where two proxies are appointed, each proxy may be appointed to represent a specific proportion of the Shareholder’s voting rights. If the appointment does not specify the proportion or number of votes, each proxy may exercise half of the votes (in which case any fraction of votes will be disregarded).

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) must be completed and returned to the Company no later than 11am (Melbourne time) on 5 March 2012 by:

• lodging it with Computershare Investor Services Pty Limited (452 Johnston Street, Abbotsford, VIC 3067) or the Company at its registered office (Level 5, 409 St Kilda Road, Melbourne Victoria, 3004);

• posting it in the reply paid envelope to Computershare Investor Services Pty Limited (GPO Box 242, Melbourne, VIC 3001); or

• faxing it to Computershare Investor Services Pty Limited (facsimile 1800 783 447 within Australia and +61 3 9473 2555 outside Australia).

• relevant custodians may lodge their proxy forms online by visiting www.intermediaryonline.com

Any Proxy Form received after that time will not be valid for the scheduled meeting.

The proxy form must be signed by the Shareholder or his/her attorney duly authorised in writing or, if the Shareholder is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation’s place of incorporation. The proxy may, but need not, be a Shareholder of the Company. A proxy form is attached to this Notice of Meeting.

Statement regarding undirected proxies

As disclosed on the proxy form it is the intention of the Chairman of the Meeting to vote any undirected proxies in favour of all resolutions. Pursuant to the Listing Rules the proxy form is required to contain certain disclosures regarding the voting intentions of the Chairman regarding undirected proxies. Shareholders are advised to read the proxy form carefully.

Corporate representatives

Any corporation which is a Shareholder of the Company may authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation’s place of incorporation, or in any other manner satisfactory to the Chairman of the Meeting) a natural person to act as its representative at the Meeting.

Voting entitlement

On a poll, Shareholders have one vote for every fully paid ordinary share held.

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Australian Renewable Fuels Limited ABN 66 096 782 188

Lodge your vote:

• By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

000001 000 ARW MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

 For your vote to be effective it must be received by 11.00am (AEDT) Monday, 5 March 2012

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

 Turn over to complete the form

 www.investorcentre.com

View your securityholder information, 24 hours a day, 7 days a week:

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN: I9999999999

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Proxy Form

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes. I 9999999999

I ND

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Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Australian Renewable Fuels Limited hereby appoint

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the Chairman OR of the Meeting

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Australian Renewable Fuels Limited to be held at the Offices of Gadens Lawyers, Level 25, Bourke Place, 600 Bourke Street, Melbourne, Victoria on Wednesday, 7 March 2012 at 11.00am (AEDT) and at any adjournment of that meeting.

Important for Items 1, 2 and 3 - If the Chairman of the Meeting is your proxy or is appointed as your proxy by default

By marking this box, you are directing the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on Items 1, 2 and 3 as set out below and in the Notice of Meeting. If you do not mark this box, and you have not directed your proxy how to vote on Items 1, 2 and 3, the Chairman of the Meeting will not cast your votes on Items 1, 2 and 3 and your votes will not be counted in computing the required majority if a poll is called on these items. If you appoint the Chairman of the Meeting as your proxy you can direct the Chairman how to vote by either marking the boxes in Step 2 below (for example if you wish to vote against or abstain from voting) or by marking this box (in which case the Chairman of the Meeting will vote in favour of Items 1, 2 and 3).

The Chairman of the Meeting intends to vote all available proxies in favour of Items 1, 2 and 3 of business.

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I/We direct the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on Items 1, 2 and 3 (except where I/we have indicated a different voting intention below) and acknowledge that the Chairman of the Meeting may exercise my proxy even though Items 1, 2 and 3 are connected directly or indirectly with the remuneration of a member of key management personnel.

 PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your Items of Business behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

ORDINARY BUSINESS

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Resolution	1	Approve an issue of Options to Philip Garling - Director
Resolution	2	Approve an issue of Options to Michael Costello - Director
Resolution	3	Approve an issue of Options to Julien Playoust - Director

The Chairman of the Meeting intends to vote all available proxies in favour of each item of business.

SIGN

Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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