UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM 20-F



| |  ̈ | Registration
statement pursuant to Section 12(b)
or 12(g) of the Securities Exchange Act of 1934
| | - | ------------------------------------------------------------------------------------------------



OR





| | x | Annual
report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
| | - | ------------------------------------------------------------------------------------





| |  | For
the fiscal year ended June 30, 2015
| |  | ---------------------------------------



OR



| |  ̈ | Transition
report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
| | - | ----------------------------------------------------------------------------------------



OR



| |  ̈ | Shell
company report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
| | - | -------------------------------------------------------------------------------------------



| |  | Date
of event requiring this shell company report ___________________
| |  | ---------------------------------------------------------------------



Commission file number: 001-35022



Mission NewEnergy Limited

(Exact name of Registrant as specified in
its charter)



N/A

(Translation of Registrant’s name
into English)



Western Australia, Australia

(Jurisdiction of incorporation or organization)



Unit B9, 431 Roberts Rd,

Subiaco, Western Australia 6008, Australia

(Address of principal executive offices)



Guy Burnett

Chief Financial Officer and Company Secretary

+61 8 6313 3975; guy@missionnewenergy.com

Unit B9, 431 Roberts Rd,

Subiaco, Western Australia 6008, Australia

(Name, Telephone, E-mail and/or Facsimile
Number and Address of Company Contact Person)



Securities registered or to be registered
pursuant to Section 12(b) of the Act:



|Title of each class |  | Name of each exchange on which registered
|------------------- |  | -----------------------------------------
|None                |  | None                                     



Securities registered or to be registered
pursuant to Section 12(g) of the Act:



|Ordinary Shares, no par value
|-----------------------------
|(Title of Class)             



Securities for
which there is a reporting obligation pursuant to Section 15(d) of the Act:



|None            
|----------------
|(Title of Class)



Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of June 30, 2015: 40,870,275 Ordinary Shares



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.



 ̈YesxNo



If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.



 ̈YesxNo



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.



 ̈YesxNo



Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).



 ̈Yes ̈No



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):



| ̈Large accelerated filer |  |  ̈Accelerated filer |  | xNon-accelerated filer
|------------------------ |  | ------------------ |  | ----------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



US
GAAP ̈

International
Financial Reporting Standards as issued by the International Accounting Standards Boardx

Other ̈



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.



 ̈Item 17 ̈Item 18



If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



 ̈YesxNo











TABLE OF CONTENTS



|                                                                                      | Page
|------------------------------------------------------------------------------------- | ----
|                                                                                      |     
|CONVENTIONS THAT APPLY TO THIS ANNUAL REPORT                                          | 2   
|                                                                                      |     
|SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS                                     | 2   
|                                                                                      |     
|INDUSTRY AND MARKET DATA                                                              | 3   
|                                                                                      |     
|PART I                                                                                |     
|                                                                                      |     
|Item 1. Identity of Directors, Senior Management and Advisers                         | 3   
|Item 2. Offer Statistics and Expected Timetable                                       | 3   
|Item 3. Key Information                                                               | 4   
|Item 4. Information on the Company                                                    | 16  
|Item 4A.Unresolved Staff Comments                                                     | 23  
|Item 5. Operating and Financial Review and Prospects                                  | 23  
|Item 6. Directors, Senior Management and Employees                                    | 30  
|Item 7. Major Shareholders and Related Party Transactions                             | 40  
|Item 8. Financial Information                                                         | 40  
|Item 9. The Offer and Listing                                                         | 41  
|Item 10.Additional Information                                                        | 42  
|Item 11. Quantitative and Qualitative Disclosures About Market Risk                   | 53  
|Item 12. Description of Securities Other than Equity Securities                       | 54  
|                                                                                      |     
|PART II                                                                               |     
|                                                                                      |     
|Item 13. Defaults, Dividend Arrearages and Delinquencies                              | 55  
|Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds | 55  
|Item 15. Controls and Procedures                                                      | 55  
|Item 16. [Reserved]                                                                   | 56  
|Item 16A. Audit Committee Financial Expert                                            | 56  
|Item 16B. Code of Ethics                                                              | 56  
|Item 16C. Principal Accountant Fees and Services                                      | 56  
|Item 16D. Exemptions from the Listing Standards for Audit Committees                  | 56  
|Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers      | 57  
|Item 16F. Change in Registrant’s Certifying Accountant                                | 57  
|Item 16G. Corporate Governance                                                        | 57  
|Item 16H. Mine Safety Disclosures                                                     | 57  
|                                                                                      |     
|PART III                                                                              |     
|                                                                                      |     
|Item 17. Financial Statements                                                         | 57  
|Item 18. Financial Statements                                                         | 57  
|Item 19. Exhibits                                                                     | 57  



i







Conventions
that apply to this Annual Report



Unless otherwise indicated or the context
clearly implies otherwise, references to “we,” “us,” “our,”, “Mission NewEnergy”,
“Mission”, “the Group” and “the Company” are to Mission NewEnergy Limited, an Australian corporation,
and its subsidiaries. In this annual report “shares” or “ordinary shares” refers to our ordinary shares.



In this annual report, references to “$,”
“US$” or “U.S. dollars” are to the lawful currency of the United States and references to “Australian
dollars” or “A$” are to the lawful currency of Australia.



Solely for the convenience of the reader,
this annual report contains translations of certain Australian dollar amounts into U.S. dollars at specified rates. Except as otherwise
stated in this annual report, all translations from Australian dollars to U.S. dollars are based on the noon buying rate of the
City of New York for cable transfers of Australian dollars, as certified for customs purposes by the Federal Reserve Bank of New
York on the date or year indicated. No representation is made that the Australian dollar amounts referred to in this annual report
could have been or could be converted into U.S. dollars at such rates or any other rates. Any discrepancies in any table between
totals and sums of the amounts listed are due to rounding.



The following table sets out relevant conversion
measures for Mission NewEnergy’s business:



1 Tonne   =   2,204.6226
Pounds biodiesel

1 Tonne   =   1.1023
Tons (short) biodiesel

1 Tonne   =   298
Gallons biodiesel

1 Tonne   =   7.4
Barrels biodiesel

1 Barrel    =   42
Gallons biodiesel



Unless otherwise indicated, the consolidated
financial statements and related notes as of and for the fiscal years ended June 30, 2013, 2014 and 2015 included elsewhere in
this annual report have been prepared in accordance with Australian Accounting Standards and also comply with International Financial
Reporting Standards (“IFRS”) and interpretations issued by the International Accounting Standards Board.



References
to a particular “fiscal year” are to our fiscal year ended June 30 of that year. References to a year other than a
“fiscal” year are to the calendar year ended December 31. References to “our refinery,” “the refinery”,
“our business” and “the joint venture company” refer to a 20% shareholding held by our wholly owned subsidiary
M2 Capital Sdn Bhd in a Malaysian Joint Venture Company, named FGV Green Energy Sdn Bhd, which owns a 250,000 tpa biodiesel refinery
which is currently undergoing a technology change retrofit to produce biodiesel from lower
cost feedstock.



SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS



This annual report contains forward-looking
statements that relate to our current expectations and views of future events. All statements, other than historical fact or present
financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to events that involve
known and unknown risks, uncertainties and other factors, including those listed under “Item 3.D — Key Information
— Risk Factors,” “Item 4 — Information on the Company” and “Item 5 — Operating and Financial
Review and Prospects,” all of which are difficult to predict and many of which are beyond our control, which may cause our
actual results, performance or achievements to be materially different from any future results, performances or achievements expressed
or implied by the forward-looking statements.



In some cases, these forward-looking statements
can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,”
“aim,” “estimate,” “intend,” “plan,” “believe,” “potential,”
“continue,” “predict,” “forecast,” “budget,” “project,” “target,”
“likely to” or other similar expressions. These forward-looking statements are subject to risks, uncertainties and
assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with
respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information
contained in the forward-looking statements.



2







We have based these forward-looking statements
largely on our current expectations and projections about future events and financial trends that we believe may affect our financial
condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other
things, statements relating to:



| | • | our
beliefs regarding the design, technology, operation and maintenance of our associates’ refinery;
| | - | ----------------------------------------------------------------------------------------------------



| | • | our
beliefs regarding increased demand for our associates’ refined product;
| | - | ---------------------------------------------------------------------------



| | • | our
associates’ ability to procure a sufficient supply of raw materials, in particular, suitable and cost competitive feedstocks;
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| | • | our
beliefs regarding the competitiveness of our associates’ products;
| | - | ----------------------------------------------------------------------



| | • | our
beliefs regarding the advantages of our business model;
| | - | -----------------------------------------------------------



| | • | our
expectations related to our ongoing restructure;
| | - | ----------------------------------------------------



| | • | our
expectations regarding the scaling and expansion or reduction of our associates’ production capacity;
| | - | ---------------------------------------------------------------------------------------------------------



| | • | our
expectations regarding our associates’ ability to procure customers and expand them;
| | - | ----------------------------------------------------------------------------------------



| | • | our
expectations regarding increased revenue growth and our ability to achieve profitability resulting from increases in our associates’
production volumes;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | our
beliefs regarding our and our associates’ ability to successfully implement strategies;
| | - | -------------------------------------------------------------------------------------------



| | • | our
beliefs regarding our and our associates’ abilities to secure sufficient funds to meet our cash needs for our operations
and capacity expansion;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | • | our
future business development, results of operations and financial condition;
| | - | -------------------------------------------------------------------------------



| | • | the
effects of weather;
| | - | -----------------------



| | • | government
regulatory and industry certification, approval and acceptance of our associates’ product and its derivatives; and
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | • | government
policymaking and incentives relating to renewable fuels.
| | - | -------------------------------------------------------------------



The forward-looking statements made in this
annual report relate only to events or information as of the date on which the statements are made in this annual report. Except
as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of
unanticipated events.



INDUSTRY AND MARKET DATA



This annual report includes information
with respect to market and industry conditions and market share from third party sources or that is based upon estimates using
such sources when available. We believe that such information and estimates are reasonable and reliable. We also believe the information
extracted from publications of third party sources has been accurately reproduced and, so far as we are able to ascertain from
information published by the third party sources, no facts have been omitted which would render the reproduced information inaccurate
or misleading. However, we have not independently verified any of the data from third party sources. Similarly, our internal research
is based upon the understanding of industry conditions, and such information has not been verified by any independent sources.



PART I



Item 1. Identity of Directors, Senior Management and Advisers



Not applicable.



Item 2. Offer Statistics and Expected Timetable



Not applicable.



3







Item 3. Key Information



| | A. | Selected Financial Data.
| | -- | ------------------------



The following selected consolidated statements
of operations and other consolidated financial data for the fiscal years 2015, 2014 and 2013 have been derived from our audited
consolidated financial statements included elsewhere in this annual report. You should read the selected consolidated financial
data in conjunction with our consolidated financial statements and related notes and “Item 5 — Operating and Financial
Review and Prospects” included elsewhere in this annual report. Our historical results do not necessarily indicate our expected
results for any future periods.



Our financial statements have been prepared
in Australian dollars and in accordance with International Financial Reporting Standards, as issued by the International Accounting
Standards Board.



Income statement data for the fiscal years
ended June 30, 2015, 2014 and 2013 and the balance sheet data as at June 30, 2015 and 2014 have been derived from our audited financial
statements that are included elsewhere in this annual report. Income statement data for the fiscal years ended June 30, 2012 and
2011 and the balance sheet data as at June 30, 2013, 2012, and 2011 have been derived from our audited financial statements that
are not included in this annual report.



|                                                                       |  | 2015 US$(1)                                     |            |   | 2015 A$ |  |            | 2014A$ |  |  | 2013A$     |   |  | 2012A$ |            |   | 2011A$ | 
|---------------------------------------------------------------------- |  | ----------------------------------------------- | ---------- | - | ------- |  | ---------- | ------ |  |  | ---------- | - |  | ------ | ---------- | - | ------ | 
|                                                                       |  | (in thousands, except share and per share data) |           
|                                                                       |  |                                                 |            |   |         |  |            |        |  |  |            |   |  |        |            |   |        | 
|Income Statement data:                                                 |  |                                                 |            |   |         |  |            |        |  |  |            |   |  |        |            |   |        | 
|Total sales revenue                                                    |  |                                                 | -          |   |         |  | -          |        |  |  | -          |   |  |        | 169        |   |        | 
|Total other income                                                     |  |                                                 | 6,082      |   |         |  | 7,271      |        |  |  | 9,684      |   |  |        | 8,244      |   |        | 
|Cost of sales                                                          |  |                                                 | -          |   |         |  | -          |        |  |  | -          |   |  |        | (368       | ) |        | 
|Employee benefits expense                                              |  |                                                 | (1,317     | ) |         |  | (1,574     | )      |  |  | (1,377     | ) |  |        | (1,618     | ) |        | 
|Other income/ (expenses)                                               |  |                                                 | 260        |   |         |  | 311        |        |  |  | (4,053     | ) |  |        | 8,375      |   |        | 
|Finance costs                                                          |  |                                                 | (1,518     | ) |         |  | (1,815     | )      |  |  | (4,863     | ) |  |        | (4,048     | ) |        | 
|Profit/(loss) from operations before income tax                        |  |                                                 | 3,507      |   |         |  | 4,193      |        |  |  | (609       | ) |  |        | 10,754     |   |        | 
|Income tax (expense)/ benefit                                          |  |                                                 | (4         | ) |         |  | (6         | )      |  |  | -          |   |  |        | 20         |   |        | 
|Profit/(loss) from continuing operations                               |  |                                                 | 3,503      |   |         |  | 4,187      |        |  |  | (609       | ) |  |        | 10,774     |   |        | 
|Share of net profit of associate accounted for using the equity method |  |                                                 | 31         |   |         |  | 37         |        |  |  | -          |   |  |        | -          |   |        | 
|Profit/(loss) for the year from discontinued operations                |  |                                                 | 20,187     |   |         |  | 24,133     |        |  |  | (485       | ) |  |        | (717       | ) |        | 
|Net Profit / (loss)                                                    |  |                                                 | 23,721     |   |         |  | 28,357     |        |  |  | (1,094     | ) |  |        | 10,057     |   |        | 
|Profit/(loss) attributable to non-controlling interests                |  |                                                 | -          |   |         |  | -          |        |  |  | 17         |   |  |        | (14        | ) |        | 
|Profit/(loss) attributable to members of the parent                    |  |                                                 | 23,721     |   |         |  | 28,357     |        |  |  | (1,077     | ) |  |        | 10,043     |   |        | 
|Basic and diluted earnings / (loss) per share (2)                      |  |                                                 | 0.76       |   |         |  | 0.91       |        |  |  | (0.08      | ) |  |        | 0.96       |   |        | 
|Weighted average ordinary number of shares outstanding (3)             |  |                                                 | 31,253,837 |   |         |  | 31,253,837 |        |  |  | 13,377,124 |   |  |        | 10,481,820 |   |        | 
|Balance Sheet data:                                                    |  |                                                 |            |   |         |  |            |        |  |  |            |   |  |        |            |   |        | 
|Total current assets                                                   |  |                                                 | 6,819      |   |         |  | 8,851      |        |  |  | 4,002      |   |  |        | 5,486      |   |        | 
|Total assets                                                           |  |                                                 | 9,723      |   |         |  | 12,621     |        |  |  | 4,049      |   |  |        | 20,105     |   |        | 
|Total current liabilities                                              |  |                                                 | 4,508      |   |         |  | 5,852      |        |  |  | 276        |   |  |        | 31,051     |   |        | 
|Total non-current liabilities                                          |  |                                                 | -          |   |         |  | -          |        |  |  | 15,125     |   |  |        | 1,558      |   |        | 
|Total liabilities                                                      |  |                                                 | 4,508      |   |         |  | 5,852      |        |  |  | 15,400     |   |  |        | 32,609     |   |        | 
|Retained earnings/ (accumulated losses)                                |  |                                                 | 4,134      |   |         |  | 5,366      |        |  |  | (141,618   | ) |  |        | (136,188   | ) |        | 
|Total equity                                                           |  |                                                 | 5,216      |   |         |  | 6,770      |        |  |  | (11,351    | ) |  |        | (12,504    | ) |        | 
|Other financial data:                                                  |  |                                                 |            |   |         |  |            |        |  |  |            |   |  |        |            |   |        | 
|Dividends per share                                                    |  |                                                 | —          |   |         |  | —          |        |  |  | —          |   |  |        | —          |   |        | 



4







| | (1) | The balance sheet data has been translated into U.S. dollars from Australian dollars based upon the noon buying rate of the
City of New York for cable transfers of Australian dollars, as certified for customs purposes by the Federal Reserve Bank of New
York on June 30, 2015, which exchange rate was A$1.00 = US$0.7704. The income statement data has been translated into
U.S. dollars from Australian dollars based upon the weighted average of the noon buying rate of the City of New York for cable
transfers of Australian dollars, as certified for customs purposes by the Federal Reserve Bank of New York for the period from
July 1, 2014 to June 30, 2015 which was A$1.00 = US$0.8365. These translations are merely for the convenience of the
reader and should not be construed as representations that the Australian dollar amounts actually represent such U.S. dollar amounts
or could be converted into U.S. dollars at the rate indicated.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Net (loss)/profit per ordinary share — basic and diluted is calculated as net loss or net profit for the period
divided by adjusted weighted average number of ordinary shares outstanding for the same period, after giving effect to the 50-1
share consolidation that was effected on April 4, 2011.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The weighted average number of ordinary shares outstanding is shown after giving effect to the 50-1 share consolidation that
was effected on April 4, 2011.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



Exchange Rate Information



The Australian dollar is convertible into
U.S. dollars at freely floating rates. There are no legal restrictions on the flow of Australian dollars between Australia and
the United States.



For your convenience, we have translated
some Australian dollar amounts into U.S. dollar amounts at the noon buying rate in The City of New York for cable transfers in
Australian dollars as certified for customs purposes by the Federal Reserve Bank of New York (the “noon buying rate”).
On June 30, 2015, the noon buying rate for Australian dollars into U.S. dollars was A$1.00 = US$0.7704. On September 25, 2015,
the noon buying rate for Australian dollars into U.S. dollars was A$1.00 = U.S $ 0.7014.



We make no representation that any Australian
dollar or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Australian dollars, as the case may
be, at any particular rate, the rates stated below, or at all.



The following table contains information
for the noon buying rate for the Australian dollar into U.S. dollars for the periods indicated.



|                                            |  | At PeriodEnd |        |  | AverageRate (1) |  |        | High |  |  | Low    | 
|------------------------------------------- |  | ------------ | ------ |  | --------------- |  | ------ | ---- |  |  | ------ | 
|Fiscal year ended June 30,                  |  |              |        |  |                 |  |        |      |  |  |        | 
|2011                                        |  |              | 1.0732 |  |                 |  | 0.9905 |      |  |  | 1.0970 | 
|2012                                        |  |              | 1.0236 |  |                 |  | 1.0323 |      |  |  | 1.1026 | 
|2013                                        |  |              | 0.9165 |  |                 |  | 1.0272 |      |  |  | 1.0591 | 
|2014                                        |  |              | 0.9427 |  |                 |  | 0.9186 |      |  |  | 0.9705 | 
|2015                                        |  |              | 0.7704 |  |                 |  | 0.8365 |      |  |  | 0.9488 | 
|Month ended                                 |  |              |        |  |                 |  |        |      |  |  |        | 
|April 30, 2015                              |  |              | 0.7867 |  |                 |  | 0.7740 |      |  |  | 0.8065 | 
|May 31, 2015                                |  |              | 0.7659 |  |                 |  | 0.7891 |      |  |  | 0.8118 | 
|June 30, 2015                               |  |              | 0.7704 |  |                 |  | 0.7715 |      |  |  | 0.7831 | 
|July 31, 2015                               |  |              | 0.7332 |  |                 |  | 0.7407 |      |  |  | 0.7664 | 
|August 31, 2015                             |  |              | 0.7129 |  |                 |  | 0.7305 |      |  |  | 0.7419 | 
|September 30, 2015                          |  |              | 0.7020 |  |                 |  | 0.7059 |      |  |  | 0.7222 | 
|October 31, 2015                            |  |              | 0.7133 |  |                 |  | 0.7200 |      |  |  | 0.7328 | 
|November 30, 2015 (through November 6, 2015 |  |              | 0.7034 |  |                 |  | 0.7128 |      |  |  | 0.7173 | 



(1) (For the fiscal years, determined by averaging noon buying
rates on the last day of each full month during the fiscal year.)



5







| | B. | Capitalization and Indebtedness.
| | -- | --------------------------------



Not applicable.



| | C. | Reasons for the Offer and Use of Proceeds.
| | -- | ------------------------------------------



Not applicable.



| | D. | Risk Factors.
| | -- | -------------



Set forth below are certain risks that
we believe are applicable to our business. You should carefully consider the risks described below and the other information in
this annual report, including our consolidated financial statements and related notes included elsewhere in this annual report,
before you decide to buy, sell or hold our ordinary shares. If any of the following risks actually occurs, our business, prospects,
financial condition and results of operations could be materially harmed. Additional risks not presently known to us, or risks
that do not seem significant today, may also impair our business operations in the future.



Risks Related to Our Business



We may not be able to continue as a going concern.



Although we incurred an operating profit
for the year ended June 30, 2015 of A$28.3 million (2014: A$1.1 million loss), we have a history of net losses and there is a substantial
doubt about our ability to continue as a going concern.. The current year’s profit is primarily as a result of a reversal
of a previous impairment of a refinery to a value of A$27.6 million upon the sale of our 250,000 tpa refinery. Net cash generated
by operating activities was A$0.39 million (2014: A$2.9 million used in operating activities). At balance date, the current assets
less current liabilities were A$3.0 million (2014: A$3.7million) and the net assets were A$6.8 million (2014: A$11.4 million deficit).
The previous year asset deficiency is primarily due to the previous impairment of our refinery assets and the convertible note
that was due and payable in December 2018, which was paid off with proceeds from the sale of the refinery.



At June 30, 2015, the Company has current liabilities of A$5.8
million, primarily stemming from a provision for a legal settlement at period end. This liability is specifically supported by
other assets of A$5.6 million.



The Directors consider that there are reasonable
grounds to expect that the Group will have sufficient financial resources at June 30, 2015 to be able to meet its commitments for
the next twelve months, and accordingly have prepared the financial report on a going concern basis in the belief that the Group
will realize its assets and settle its liabilities and commitments in the normal course of business and for at least the amounts
stated in the financial report. This assessment is based on detailed cash flow forecasts extending out twelve months from the date
of this financial report. The cash flow forecasts from operations are based on the forecast cash flows required to sustain the
business and cash on hand at June 30, 2015. However, should the Group and its associate FGV Green Energy not be successful in its
business strategy, there is material uncertainty whether the Group will be able to continue as a going concern.



If we are unable to generate sufficient earnings to offset
the costs from our primary business, our business and financial condition will suffer a significant adverse effect.



Earnings (in the form of dividends) from
our investment into FGV Green Energy, a refinery joint venture company, may not exceed our expenses and thus there is substantial
risk that we will not be able to generate enough revenue to reverse our pattern of historical losses and negative cash flow, which
would have a significant adverse effect on our business and financial condition.



We may not be able recover any funds from intercompany
loans.



The parent company in our corporate structure
advances funds to subsidiaries to fund working capital requirements. The company’s subsidiaries may not be able to repay
or service these intercompany loans, which would have a significant adverse effect on our business and financial condition.



6







We may not be able to generate sufficient cash or raise
further cash through debt or equity means to fund new business strategies.



Our ability to enter into new business opportunities
is limited by our existing cash levels and/or our ability to raise further funding through debt or equity. If we are unable to
enter into a new business based on our existing capital or if we are unable to raise further debt or equity to enable us to enter
into a new business, we may suffer a significant adverse effect on our business and financial condition.



If the refinery of FGV Green Energy, does not meet prescribed
international biofuels legislative requirements, including the EPA requirements under Renewable Fuels Standard (“RFS”),
fuels produced from palm oil may not be eligible for the subsidies which make it economically feasible to sell biodiesel internationally,
including into the United States, which would limit the market opportunity and would negatively impact our financial viability.



Under the International Biofuels legislation,
including the USA National Renewable Fuel Standard, palm based (or palm based waste products) biodiesel may not qualify as an approved
biodiesel and be eligible for economic subsidies or biofuel related benefits, including the USA EPA’s EPA RINs. A RIN is
a numeric code that is generated by the producer or importer of renewable fuel representing gallons of renewable fuel produced/imported
and assigned to batches of renewable fuel that are transferred or sold to others. RINs are then turned into the EPA each year by
petroleum refiners to prove that they have blended the required amount of renewable fuel under RFS. Therefore, biodiesel that does
not generate a RIN may have a very limited market in the U.S. If the refinery of FGV Green Energy, in which we hold a 20% stake,
is not able to meet these requirements, our earnings from our investment in FGV Green Energy will be reduced and we may suffer
a significant adverse effect on our business, financial performance and financial condition and could cease operations.



The refinery, in which we hold a 20% stake, may not be
compliant under the European Renewable Energy Directive, and, if so, our ability to sell palm-based biodiesel into the European
Union will be significantly constrained and the results of our operations will be adversely impacted.



Under the Renewable Energy Directive, the
entire pathway for palm based biodiesel including the suppliers of raw materials and the production pathway must be certified.
Failure for the production facility to meet such certification or failure by the suppliers of palm oil based feedstock to satisfy
the Renewable Energy Directive could affect the refinery’s ability to sell palm-based biodiesel into the European Union.
The European Union has been and remains a key market for the refinery. Any limitation on the refinery’s ability to sell biodiesel
into the European Union could reduce our earnings from our investment in FGV Green Energy and have a significant adverse effect
on our business, financial performance and financial condition and could cause us to cease operations.



The design and technology of the refinery may be unable
to meet future biodiesel specifications and further capital expenditures may be required.



The specifications for biodiesel are continually
evolving and are subject to further change. Further capital expenditures may be required by FGV Green Energy to ensure that the
refinery meets new specifications. There is also no assurance that the equipment and technology used in capital improvements will
achieve performance specifications. The failure of utilized equipment and technology in this regard may adversely affect the refinery,
and as a result reduce our earnings. In particular, the joint venture company, in which we own a 20% interest, is retrofitting
the refinery with technology to be able to utilize alternative feedstocks to produce biodiesel. If this technology does not work
as designed, this may reduce our earnings from FGV Green Energy and adversely affect our financial performance and financial position.



If the joint venture company refinery is unable to be
retrofitted as planned it may not be able to produce biodiesel.



The refinery owned by the joint venture
company requires a significant technology retrofit, which if not successful may result in the inability to produce biodiesel and
related products as anticipated. The inability to produce products would significantly reduce our earnings and adversely affect
our financial performance and financial position.





7







If the joint venture company refinery is unable to raise
debt or equity funding to complete the retrofit, it would be unable to complete the project.



The refinery owned by the joint venture
company requires a significant amount of capital to complete the technology retrofit, which if it is unable to fund may result
in the inability to complete the project as anticipated. The inability to complete the project would significantly adversely affect
our financial performance and financial position.



The operation and maintenance of the refinery involves
significant risks that could result in disruptions in production or reduced output.



The operations of the refinery are exposed
to significant risks, including:



| | · | failure of equipment or processes;
| | - | ----------------------------------

| | · | operator or maintenance errors;
| | - | -------------------------------

| | · | labor disruptions;
| | - | ------------------

| | · | extended and unscheduled interruptions to production;
| | - | -----------------------------------------------------

| | · | accidents; and
| | - | --------------

| | · | damage to equipment and disaster whether arising from the actions or omissions by the joint venture’s employees or from
external factors.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



There are operational hazards inherent in
chemical manufacturing industries, such as fires, explosions, abnormal pressures, blowouts, pipeline ruptures, and transportation
accidents. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property
and equipment or environmental damage, and may result in suspension or termination of operations and the imposition of civil or
criminal penalties. In addition, insurance may not be adequate to fully cover the potential operation hazards described above,
and the joint venture company may not be able to renew its insurance on commercially reasonable terms or at all. See “Item
3.D — Key Information — Risk Factors — The joint venture company and/or our insurance coverage may not be sufficient
to cover our liability risks.”



We have a 20% interest in the refinery and hence we may
have limited control over the financial and operating policies of the joint venture company.



Our limited shareholding and representation
on the Board of the joint venture company may limit our ability to influence the financial and operating procedures of the company
which may limit our ability to generate a positive return for the Group.



If the joint venture company is unable to generate profitable
sales, this will significantly reduce its ability to pay dividends, which may harm our results of operations.



In 2015, our
biofuel revenue was NIL due to the shut-down of the refining operations in previous financial years. In February 2015, we concluded
the sale of our 250,000 tpa refinery to the joint venture company, in which we hold a 20% interest. We did not receive any dividends
from our investment into the joint venture company which purchased our refinery in 2015. The historic revenue contracts have since
expired, and we cannot assure you that the joint venture company will be able to source new customers and establish and maintain
long-term relationships with such customers. If the joint venture company is unable to source new customers, we may not be issued
any earnings dividend and our results of operations could be adversely affected.



If the joint venture company cannot find suitably qualified
personnel to run the refinery, they may be unable to enter into sales contracts which may result in lost revenues and incurred
costs.



The operation of the refinery requires
suitably qualified personnel. With the current status of the refinery being retrofitted with new technology, the majority of personnel
have been retrenched. The ability to restart the refinery may be affected by an inability to employ suitably trained staff by
the joint venture company.



If the joint venture company cannot get the refinery
to run successfully after being retrofitted with new technology, they may be unable to enter into sales contracts which may result
in lost revenues and incurred costs.



With the refinery currently being retrofitted
with new technology, such non-operation may result in significant costly technical and mechanical delays if the decision were
made to restart production.



8







An increase in cost or an interruption in the supply of
feedstock to the refinery may inhibit production and adversely affect our financial performance.



The operation of the refinery is dependent
on the ability of the joint venture company to procure substantial quantities of suitable quality feedstock.



At this time, the refining operation is
being retrofitted with new technology. However, should the refinery return to operations, the failure to procure a sufficient supply
of raw materials satisfying quality, quantity and cost requirements in a timely manner could impair its ability to produce product
or could increase costs. Any interruption to the supply of suitable quality feedstock may result in disruptions in production or
reduced output, which may materially and adversely affect the joint venture company’s financial performance, which may be
unable to issue us dividends.



Additionally, the joint venture company’s
financial results are substantially dependent on the prices of feedstock. A substantial increase in feedstock price relative to
the value of the end saleable products would adversely affect financial performance. Although the joint venture company may attempt
to offset the effects of fluctuations in prices by entering into arrangements with its customers on a feedstock price plus contract
basis through which a predetermined margin over the price of the feedstock is received, or by engaging in transactions that involve
exchange-traded futures contracts (or other contractual arrangements securing future commodity prices), the amount and duration
of these hedging and risk mitigation activities may vary substantially over time. These activities also involve substantial risks.



We have experienced, and the joint venture company may
in the future experience, volatile capacity utilization which may adversely affect the results of operations of the joint venture
company.



The joint venture company remains reliant
on palm oil and associated by products as a feedstock. If the price of these products is greater than the value of biodiesel, the
joint venture company may not be able to profitably sell biodiesel into the immediate cash payment and delivery market. Its ability
to supply biodiesel profitably is based on having positive margins where the input costs are lower than the value of refined product.
The joint venture company is unable to influence the price of input raw materials or the price of biodiesel. Resultantly, the joint
venture company’s biodiesel profitability is reliant on the existence of a positive spread between these two commodities.
As the joint venture company can only operate when a positive operating margin exists, it has and expects to continue to have in
the future erratic capacity utilization, which may adversely affect its results of operations and its ability to distribute earnings
to us.



We have suffered, and the joint venture company may continue
to suffer, low capacity utilization if the joint venture company is unable to secure term contracts.



Given the volatility of profit margins on
biodiesel production due to fluctuations in commodity pricing for palm oil and associated products and the value of the finished
product, we did not historically produce biodiesel unless we had a committed contract customer willing to accept pricing based
on our cost of purchasing feedstock and earning a positive margin from refining. The refinery is currently being retrofitted with
new technology, and the joint venture company currently has no customers and no visibility on its ability to attract customers.



We have suffered, and the joint venture company may continue
to suffer, low capacity utilization if the joint venture company is unable to secure material volumes of biodiesel sales under
the Malaysian Biodiesel mandate.



After numerous years discussing the possible
implementation of a biodiesel blending mandate in Malaysia, the Malaysian Government introduced a scheme to mandate a biodiesel
blend into commercial diesel sales in some areas of Malaysia. This scheme may grow or reduce depending on Government support. In
addition, the scheme was for a lower volume than previously communicated to Malaysian Biodiesel producers. Accordingly in the past
we secured relatively low volumes of biodiesel sales under this scheme. Due to insufficient and unprofitable sales volumes under
this mandate, we terminated the arrangements to supply biodiesel. If the scheme is not extended, or cancelled altogether, or commercially
viable quantities are not secured by the joint venture company, this may adversely affect results of operations. The joint venture
company currently has no biodiesel sales contracts in Malaysia and has no visibility towards further sales in Malaysia.



9







The joint venture company may be unable to perform under
an offtake agreement.



The joint venture companymay
not be able to perform under any new offtake agreements, given that its refinery is currently being retrofitted with new technology.
Additionally, any changes in legislation in the local jurisdiction of the off-taker may prohibit such sales, including into the
United States.



The joint venture company’s inability to meet margin
calls on hedged positions would adversely affect its financial condition.



To maximize and protect the profitability
of the offtake agreement, the joint venture companymay enter into hedging positions to protect against commodity
risk. Upon entering the hedging positions and the inherent volatility in the commodity markets, itwill likely be required to make
margin call payments from time to time. Inability to meet such margin calls would adversely affect the financial condition and
financial performance of the joint venture company.



The joint venture company may suffer losses due to sales
of competing products that infringe on its intellectual property.



The joint venture company willrely
on a combination of patents, trademarks, domain names and contractual rights to protect its intellectual property. It cannot be
assured that the measures taken to protect the intellectual property rights will be sufficient to prevent any misappropriation
of the intellectual property, or that competitors will not independently develop alternative technologies that are equivalent or
superior to technologies based on the intellectual property. In the event that the steps taken and the protection afforded by law
do not adequately safeguard the proprietary technology, the joint venture company could suffer losses due to the sales of competing
products that exploit the intellectual property, and the joint venture company’s profitability would be adversely affected,
which would in turn adversely affect our return on investment.



If the joint venture company is subject to claims of infringement
of the intellectual property of others, the defense of these claims could drain resources and any adverse determination could adversely
impact or halt biodiesel production.



The retrofit and operation of the biodiesel
refinery include contracts for the supply of proprietary systems, over which such suppliers have intellectual property that they
have licensed to the joint venture company. This intellectual property includes the operating procedures and technical schematics
of the retrofit to the biodiesel refinery, which are required to operate and maintain the plants. The unauthorized use or the infringement
by the joint venture company of another person’s intellectual property right may adversely affect its financial performance
and in turn our financial performance.



To the best of our knowledge, the patented
refining process does not infringe on any third party’s intellectual property rights. However, intellectual property rights
are complex and there exists the risk that the process may infringe, or be alleged to infringe, another party’s intellectual
property rights.



The defense and prosecution of intellectual
property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time consuming
and may significantly divert the efforts and resources of the joint venture company’s technical and management personnel.
An adverse determination in any such litigation or proceedings to which the joint venture company may become a party could subject
it to significant liability to third parties, require the joint venture company to seek licenses from third parties, to pay ongoing
royalties, or to redesign products or manufacturing processes or subject the joint venture company to injunctions prohibiting the
manufacture and sale of products or the use of technologies.



Any inability to obtain and maintain all the required
licenses and permits related to the joint venture company’s business and the resulting increased
compliance costs may adversely affect financial performance.



The joint venture company is required to
hold or obtain a number of licenses and permits, including environmental and those related to materials handling, in various jurisdictions
in order to implement and operate the business. We have no reason to believe that the licenses will not be renewed, although renewal
is not assured.



10







The joint venture company is subject to
environmental regulations, the compliance with which imposes substantial costs on the joint venture company and the
violation of which could result in penalties and other liabilities.



Laws dealing with protection of the environment
provide for penalties and other liabilities for the violation of such laws and establish, in certain circumstances, obligations
to remediate facilities and locations where operations are conducted. The joint venture company will incur substantial costs in
the future as part of continued efforts to comply with these environmental laws and to avoid violations of them.



The joint venture company may experience
a significant chemical or biodiesel spill at the refinery. If any of these events occur or if the joint venture company otherwise
fails to comply with the applicable environmental or other regulations, the joint venture company could be subject to significant
monetary damages and fines or suspensions of our operations, and the business reputation and profitability could be adversely affected.



Any amendments to the environmental laws
could impose substantial pollution control measures that could require the joint venture company to make significant expenditures
to modify production process or change the design of the products to limit actual or potential impact to the environment. Moreover,
new laws, new interpretations of existing laws, increased governmental enforcement of environmental laws or other developments
could require the joint venture company to make significant additional expenditures, which may adversely affect the business, results
of operations and financial condition.



The joint venture company and/or our insurance
coverage may not be sufficient to cover our liability risks.



The joint venture company and/or our insurance
arrangements may not adequately protect against liability for all losses, including but not limited to environmental losses, property
damage, public liability or losses arising from business interruption and product liability risk. Additionally, the existing insurance
arrangements may have lapsed and/or be unable to be renewed on commercially reasonable terms or at all. Should sufficient insurance
coverage be unable to be maintained in the future or experience losses in excess of the scope of the insurance coverage, the joint
venture company and/or our financial performance could be adversely affected.



Changes in government policy could adversely affect the
joint venture company’s business.



The refinery and its feedstock are located
in Malaysia, and possible biodiesel sales may be in the United States, Malaysia and Europe. In addition, the equipment for the
plant is imported from, and the products are sold in various other countries. There is a risk that actions of a government in any
of these countries may adversely affect the joint venture company’s ability to implement and operate its business.



Government action or policy change in relation
to access to lands and infrastructure, import and export regulations, environmental regulations, taxation, royalties and subsidies
could adversely affect the operations and financial performance of the joint venture company. Generally, however, a policy change
in any of the jurisdictions in which the joint venture companyoperates, or intends to operate, may inhibit its ability
or the financial viability of its operations to export feedstock oil or the refined products that is marketed. This, in turn, could
adversely affect operations and financial performance.



The joint venture company and our financial performance
may be adversely affected by fluctuations in exchange rates.



The joint venture company’srevenues and expenditures are potentially denominated in a number of currencies, including U.S. dollars, Euros, Australian
dollars, Indonesian rupiah, and Malaysian Ringgit. In addition our future earnings, which may be in the form of dividends, are
likely to be earned in Malaysian Ringgit, and we hold cash in U.S. dollars to fund operations. Historically, we have experienced
losses due to un-hedged negative changes in exchange rate. Additionally, we have experienced foreign currency translation differences
(which are held on our balance sheet in the foreign currency translation reserve) as a result of reporting consolidation of non-Australian
subsidies. We have no foreign currency hedging arrangements in place. As a result, our financial performance may be adversely affected
by fluctuations in exchange rates.



11







We may be unable to recover our investment in our Malaysian
biodiesel project.



When we sold our refinery during this financial
year, we retained a 20% shareholding in FGV Green Energy that purchased the refinery through a cash injection into that entity.
If that entity, which will own and operate the refinery, is not profitable in the future, we may not be able to recover the amount
invested. This, in turn, could adversely affect our operations and financial performance.



We may be unable to retain our investment in our Malaysian
biodiesel project.



The Malaysian biodiesel project joint venture
agreement allows for capital calls from shareholders where additional funds are required by the joint venture company. The investment
we hold in the Malaysian biodiesel project may require us to inject further capital funds into the project. If we have insufficient
funds to meet such a capital call, our shareholding may be diluted. This, in turn, could adversely affect our operations and financial
performance.



Risks Related to Our Strategy



The joint venture company may not be able to restart refining
operations.



The refining operations are currently being
retrofitted with new technology. Should profitable opportunities present themselves there can be no assurance that the joint venture
company would be able to restart refining operations. Further the joint venture company can make no assurances as to its ability
or cost thereof to attract necessary staff, obtain working capital lines and re-commission the equipment.



The joint venture company may be unable to sell its assets
for fair market value or sell them at all.



If the joint venture company sells its assets, it may not be
able to realize its original investment and as such upon the sale of its assets can provide no assurance as to the realization
of proceeds for us or our shareholders.



We may be unable to continue our business in renewable
energy or any other industry.



If the joint venture company sells all its
assets, it may not be able to find suitable projects to continue business in the renewable energy sector. If this is the case,
we may require shareholder approval to change our strategic direction, may not qualify for ASX listing and may not have sufficient
capital beyond settling our obligations to launch any new business activities.



The joint venture company’s future growth will depend
on its ability to establish and maintain strategic relationships with distributors and feedstock suppliers.



The joint venture company’s future
growth depends on its ability to establish and maintain relationships with third parties, including distributors and feedstock
suppliers. It may not be able to establish strategic relationships with third parties on satisfactory terms or at all, and any
arrangements that are entered into may not result in the type of collaborative relationship with the third party that is expected.
Further, these third parties may not place sufficient importance on their relationship with the joint venture companyand
may not perform their obligations as agreed. Any failure to develop and maintain satisfactory relationships with distributors and
feedstock suppliers would have a material adverse effect on the business.



We currently are not generating revenue or earnings from
operations and thus we may be unable to fund our operational and capital requirements and we may be unable to obtain adequate financing
on favorable terms to meet these needs.



We currently expect that our cash resources
will be used to fund operating losses and capital expenditures. Should we become operational, we may also require substantial working
capital. We cannot assure you that we will be successful in generating sufficient revenue and we may require financing to meet
our needs.



12







Our ability to access equity and debt capital
and trade financing on favorable terms may be limited by factors such as:



| | · | general economic and market conditions;
| | - | ---------------------------------------

| | · | conditions in energy markets;
| | - | -----------------------------

| | · | credit availability from banks or other lenders for us and our industry peers;
| | - | ------------------------------------------------------------------------------

| | · | investor confidence in the industry;
| | - | ------------------------------------

| | · | the operation of the refinery;
| | - | ------------------------------

| | · | our financial performance; and
| | - | ------------------------------

| | · | our levels of indebtedness.
| | - | ---------------------------



Our ability to access equity capital is limited without
shareholder approval and we may be unable to obtain the required shareholder approval to obtain financing in future equity offerings.



Our ability to access equity capital is
also limited by ASX Listing Rule 7.1, which provides that a company must not, subject to specified exceptions (including approval
by shareholders), issue or agree to issue during any 12-month period any equity securities, or other securities with rights to
conversion to equity, if the number of those securities exceeds 25% of the number of securities in the same class on issue at the
commencement of that 12-month period. Our ability to issue shares in certain subsequent offerings will be restricted by this 25%
annual placement capacity to the extent that we are unable to obtain shareholder approval of the additional offerings.



Risks Related to Our Industry



A decline in the price of diesel or other fuel sources
or an increase in their supply could constrain the selling price of the joint venture company’s biodiesel.



Biodiesel prices are influenced by market
prices for petroleum diesel, the pricing of which is affected by global and domestic market prices for crude oil. The pricing of
petroleum diesel is also subject to typical market movements and decreases when there is an increase in supply in the face of unchanged
or decreased demand. To remain competitive, the price of biodiesel tends to decrease as the price of petroleum diesel decreases.
As a result, any decline in petroleum prices will likely lead to lower prices for biodiesel. If the price of inputs, such as palm
oil (or other) feedstock, is greater than the price of biodiesel in the market, the joint venture companywill be
unable to make profitable sales and production would likely be halted. We did not operate the refinery in fiscal years 2015, 2014
and 2013 due to shut down of the refinery. We only operated the refinery for the six months in fiscal 2012 and nine months in fiscal
2011 due to negative spreads that existed between the potential sales price of biodiesel and the input costs to produce the biodiesel.
Since selling the refinery to the joint venture company earlier this year, the refinery has remained shut down. Declines in the
pricing of biodiesel relative to the cost of the inputs for production may cause the joint venture company to continue the halt
in production in the future, which may materially and adversely affect the joint venture company’s performance.



The biodiesel industry is a new industry and its continued
development is subject to a number of risks and obstacles.



The joint venture company’sprimary product is biodiesel. The global biodiesel industry is still developing as compared to petroleum-based fuels. Biodiesel
has experienced significant fluctuations in growth during that last few years and demand for biodiesel as the primary product may
not grow as rapidly as expected or at all. Biodiesel and the global biodiesel industry, as a whole, also face a number of obstacles
and drawbacks, including:



| | · | gelling at lower temperatures than petroleum diesel, which can require the use of low percentage biodiesel blends in colder
climates or the use of heated fuel tanks;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | potential water contamination that can complicate handling and long-term storage;
| | - | ---------------------------------------------------------------------------------

| | · | reluctance on the part of some auto manufacturers and industry groups to endorse biodiesel and their recommendations against
the use of biodiesel or high percentage biodiesel blends;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | potentially reduced fuel economy due to the lower energy content of biodiesel as compared with petroleum diesel;
| | - | ----------------------------------------------------------------------------------------------------------------



13







| | · | development of alternative fuels and energy sources may reduce the demand for biodiesel; and
| | - | --------------------------------------------------------------------------------------------

| | · | potentially impaired growth due to a lack of infrastructure such as dedicated rail tanker cars and truck fleets, sufficient
storage facilities, and refining and blending facilities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Delayed market acceptance of the products
may adversely affect pricing and profitability. The lack of infrastructure to store, ship and distribute the products may also
increase logistical costs and diminish profitability for the joint venture company.



The joint venture company may be subjected to new or amended
standards for biodiesel from time to time and required to modify our production process or procure alternate or additional feedstock.



New standards may be introduced and existing
standards may be amended or repealed from time to time. The production of biodiesel that meets stringent quality standards is complex.
Concerns about fuel quality may impact the ability to successfully market and sell biodiesel. If the joint venture company is unable
to produce biodiesel that meets the industry quality standard, its credibility and the market acceptance and sales of its biodiesel
could be negatively affected. In addition, actual or perceived problems with quality control in the industry generally may lead
to a lack of consumer confidence in biodiesel. This could result in a decrease in demand or mandates for biodiesel, with a resulting
decrease in revenue for the joint venture company.



A change to the quality standards for biodiesel
in any market in which the joint venture company sells biodiesel may require it to modify its production process or procure alternate
or additional feedstock, which may affect the joint venture company’s revenue and expenditure and adversely affect its results
of operations.



The joint venture company faces significant competition
from existing and new competitors, as well as competing technologies and other clean energy sources.



The primary product is a substitute for
mineral diesel and a global commodity and as such is highly cost competitive. There are already many global producers of biodiesel
with which the joint venture company will compete. While these existing competitors are limited by installed refining capacity,
it is expected that there may be further new entrants into the market if economic opportunities present themselves thereby increasing
competition. In addition to existing and new direct competitors, as a relatively new industry with distribution channels still
in the development stage, market forces may limit the joint venture company’s access to end markets or make costs of delivering
product to end-users uncompetitive. Future financial performance and earnings growth of the joint venture company may be adversely
affected if either of the above occurs.



In addition, new technologies may be developed
or implemented for alternative energy sources and products that use such energy sources. Advances in the development of fuels other
than biodiesel, or the development of products that use energy sources other than diesel, such as gasoline hybrid vehicles and
plug-in electric vehicles, could significantly reduce demand for biodiesel and thus affect the joint venture company’s sales.
Biodiesel also faces competition from fuel additives that help petroleum diesel burn cleaner and therefore reduce the comparative
environmental benefits of biodiesel in relation to petroleum diesel.



Other clean energy sources such as liquefied
petroleum gas, hydrogen and electricity from clean sources may be more cost-effective to produce, store, distribute or use, more
environmentally friendly, or otherwise more successfully developed for commercial production than the joint venture company’s
products. These other energy sources may also receive greater government support than these products in the form of subsidies,
incentives or minimum use requirements. As a result, demand for the products may decline and the business model may no longer be
viable and results of operations and financial condition of the joint venture company may be materially adversely affected. The
introduction, increase in the availability or reduction in costs of alternative energy sources may materially and adversely affect
the demand for products and financial performance.



Any increase in competition arising from
an increase in the number or size of competitors or from competing technologies or other clean energy sources may result in price
reductions, reduced gross profit margins, loss of market share and departure of key management, any of which could adversely affect
the joint venture company’s financial condition and profitability.



14







Risks Related to Our Ordinary Shares



Unless an active trading market develops for our securities,
you may not be able to sell your ordinary shares.



Our ordinary shares were delisted from trading
on The NASDAQ Global Market effective July 9, 2012 and currently trade on the OTC Markets Pink Sheets under the symbol “MNELF”
and on the Australian Stock Exchange, or ASX, under the symbol “MBT.” Although we are a reporting company, currently
there is only a limited trading market for our ordinary shares and a more active trading market may never develop or, if it does
develop, may not be maintained. Failure to develop or maintain an active trading market will have a generally negative effect on
the price of our ordinary shares, and you may be unable to sell your ordinary shares or any attempted sale of such ordinary shares
may have the effect of lowering the market price, and therefore, your investment could be a partial or complete loss.



As a foreign private issuer, we follow certain home country
corporate governance practices which may afford less protection to holders of our ordinary shares.



As a foreign private issuer, we are permitted
to follow certain home country corporate governance practices. As a company incorporated in Australia and listed on the ASX, we
expect to follow our home country practice with respect to the composition of our board of directors and nominations committee
and executive sessions. The corporate governance practice and requirements in Australia do not require us as to have a majority
of our board of directors to be independent, do not require us to establish a nominations committee, and do not require us to hold
regular executive sessions where only independent directors shall be present. Such Australian home country practices may afford
less protection to holders of our ordinary shares.



We may be classified as a passive foreign investment company,
which could result in adverse U.S. federal income tax consequences to U.S. holders of our ordinary shares.



We may to be a passive foreign investment
company, or PFIC, for U.S. federal income tax purposes for our current fiscal year ending June 30, 2016. A non-U.S. corporation
will be considered a PFIC for any fiscal year if either (1) at least 75% of its gross income is passive income or (2) at least
50% of the value of its assets (based on an average of the quarterly values of the assets during the fiscal year) is attributable
to assets that produce or are held for the production of passive income. If we are a PFIC for any fiscal year during which a U.S.
holder (as defined in “Item 10.E - Additional Information Taxation — U.S. Federal Income Tax Considerations”)
holds an ordinary share, certain adverse U.S. federal income tax consequences could apply to such U.S. holder. See “Item
10.E - Additional Information Taxation — U.S. Federal Income Tax Considerations — Passive Foreign
Investment Company Considerations.”



Investors may be unable to enforce
your legal rights against us.



We are incorporated in Australia. Substantially
all of our assets are located outside of the United States. It may be difficult for investors to enforce, outside of the United
States, judgments against us that are obtained in the United States in any such actions, including actions predicated on civil
liability provisions of securities laws of the United States. In addition, all of our directors and officers are nationals or residents
of countries outside of the United States, and all, or a substantial portion of, their assets are outside of the United States.
As a result, it may be difficult for investors to serve process on these persons in the United States or to enforce judgments against
them obtained in United States courts, including judgments predicated on civil liability provisions of the securities laws of the
United States.



Currency fluctuations may adversely affect the price of
our ordinary shares.



Our ordinary shares are quoted in Australian
dollars on the ASX and in U.S. dollars on the OTC Markets Pink Sheets. Movements in the Australian dollar/U.S. dollar exchange
rate may adversely affect the U.S. dollar price of our ordinary shares. In the past year the Australian dollar has generally depreciated
against the U.S. dollar. Any continuation of this trend may affect the U.S. dollar price of our ordinary shares, even if the price
of our ordinary shares in Australian dollars increases or remains unchanged. However, this trend may not continue and may be reversed.



15







Risks Relating to Takeovers



Australian takeovers laws may discourage takeover offers
being made for us or may discourage the acquisition of large numbers of our ordinary shares.



We are incorporated in Australia and are subject to the takeovers
laws of Australia. Among other things, we are subject to the Australian Corporations Act 2001, or the Corporations Act. Subject
to a range of exceptions, the Corporations Act prohibits the acquisition of a direct or indirect interest in our issued voting
shares if the acquisition of that interest will lead to a person’s voting power in us increasing from 20% or below to more
than 20%, or increasing from a starting point that is above 20% and below 90%. Australian takeovers laws may discourage takeover
offers being made for us or may discourage the acquisition of large numbers of our ordinary shares. This may have the ancillary
effect of entrenching our board of directors and may deprive or limit our shareholders’ strategic opportunities to sell their
ordinary shares and may restrict the ability of our shareholders to obtain a premium from such transactions.



Our Constitution and other Australian laws and regulations
applicable to us may adversely affect our ability to take actions that could be beneficial to our shareholders.



As an Australian company, we are subject to different corporate
requirements than a corporation organized under the laws of the United States. Our Constitution, as well as the Corporations Act,
set forth various rights and obligations that are unique to us as an Australian company. These requirements operate differently
than from many U.S. companies and may limit or otherwise adversely affect our ability to take actions that could be beneficial
to our shareholders. For more information, you should carefully review the summary of these matters set forth under the section
entitled, “Item 10.B — Additional Information — Memorandum and Articles of Association” as well as our
Constitution.



Item 4. Information on the Company



| | A. | History and Development of the Company.
| | -- | ---------------------------------------



Our legal and commercial name is Mission
NewEnergy Limited, which was incorporated in Western Australia under the laws of Australia (specifically, the Australian Corporations
Act) in November 2005. We are an Australian public company, limited by shares.



In May 2006, we conducted an initial public
offering in Australia, raising A$27.0 million, and listed on the Australian Securities Exchange.



In August 2006, we commenced construction
of our first biodiesel refinery with a 100,000 tonnes (30 million gallons) per year nameplate capacity at an industrial hub in
Port Kuantan, Malaysia along the eastern coast of Malaysia.



In early calendar 2007, we commenced non-food
biodiesel feedstock cultivation operations in India. We focused on the cultivation of Jatropha Curcas, or Jatropha, an inedible,
low cost dedicated energy crop with the intention to become self-sufficient with respect to our feedstock supply and not in competition
with the food supply.



In April 2007, recognizing the need to
scale up both our feedstock cultivation and biodiesel production operations, we completed a convertible note offering and raised
A$65.0 million in new capital. These funds were raised to fund the expansion of our feedstock cultivation operations in India and
the construction of a second larger biodiesel refinery in Port Kuantan with a 250,000 tonnes (75 million gallons) per year nameplate
capacity.



In mid-2008, we commenced commercial operations
of our first biodiesel refinery, using locally sourced palm oil as feedstock.



Between May 2006 and January 2009, we raised
approximately A$35.1 million in equity capital from institutional investors in private placements to complete the funding requirement
for our second biodiesel refinery and provide working capital.



In December 2009, we entered into a long
term biodiesel offtake agreement with Valero.



In mid-2010, we received our first commercial
quantities of Jatropha oil from our feedstock cultivation operations.



16







Also in mid-2010, we commissioned our second
biodiesel trans-esterification refinery with a 250,000 tonnes (75 million gallons) per year nameplate capacity.



In April 2011, we conducted our initial
public offering in the U.S., raising US$25.1 million, and listed on the NASDAQ Global Market.



On January 27, 2012, the Company launched
a major re-structure including a reduction in operating expenditure on all fronts, divestment of non-core assets and efforts to
raise additional capital. At the same time, the Company announced that it would cease planting further Jatropha acreage and dramatically
downscale its field operations.



On February 20, 2012, the Company announced
a major initiative with the acquisition of 85% of Oleovest, a special purpose company with a 70% interest in a Joint Venture with
PTPN111 (a state owned major palm oil plantation company) to set up a downstream palm oil and oleo-chemical complex in Indonesia.



On May 4, 2012, the Company announced the
final production runs in its Malaysian refining operation. The refining assets were put in care and maintenance.



On the July 9, 2012, the Company’s
ordinary shares were formally delisted from trading on the NASDAQ Global Market.



On July 11, 2012, the Company announced
that due to failure of material obligations by PTPN111, it had terminated its joint venture in Indonesia.



On October 8, 2012, the Company announced
that a placement of approximately 15% of its outstanding equity raising approximately US$100,000 before placement costs.



On October 19, 2012, the Company announced
that its Indian operations had been significantly downsized and that the Company was focused on divesting its remaining Indian
assets.



On November 23, 2012, the Company announced
that it had successfully completed a substantial restructuring of the convertible notes, with the key changes being the elimination
of the 4% annual cash coupon and a change in the conversion ratio from 1:4 to 1:433 ordinary shares.



On February 25, 2013, the Company announced
that it had secured a US$5 million working capital facility, which is to be used to fund the business through the completion of
the Company’s re-structure.



On 17 April 2013, the Company secured a
short term financing facility to meet operating costs in India secured over all shares in the Indian subsidiary. Subsequently,
the lender exercised its option to take all shares in the Indian operations as full and final settlement of the defaulted debt
obligation.



On October 11, 2013, the Company completed
the sale of its 100,000 tpa refinery to Felda Global Group for US$11.5 million and A$7.5 million of convertible note debt was settled
from the proceeds.



On December 30, 2013, the Company announced
that it had successfully completed a substantial restructuring of the convertible notes, with the key changes being the extension
of the maturity date to December 31, 2018 and a 6% annual coupon, with coupon payments deferred to December 31, 2015.



On April 30, 2014, the Company announced
that it had successfully completed an equity raise of A$120,000 pursuant to shareholder approval to issue up to 100m shares.



On September 1, 2014, the Company announced
that it had signed a joint venture and plant purchase agreement for the sale of its 250,000 tpa refinery.



On December 2, 2014, the Company announced
that it successfully completed the Indonesian Arbitration, receiving a US$3.36 million award. US$2 million was utilized to settle
a portion of the convertible notes.



17







On February 19, 2015, the Company announced
that it successfully completed the company transformation, including the sale of the 250,000 tpa refinery to FGV Green Energy Sdn,
a Malaysian registered Company. The Company simultaneously acquired 100% of M2 Capital Sdn Bhd, a Malaysian registered Company,
which retains a 20% interest in FGV Green Energy. Mission Biofuels Sdn Bhd is 100% owned by the Company and now operates as the
Malaysian administrative entity.US$12 million of the proceeds from the sale of the refinery was used to fully settle the convertible
notes. Also included was the settlement of a material retention bonus for executives in the form of cash and fifteen million ordinary
shares (as approved by shareholders at the annual meeting held on October 27, 2014), saving the company a material amount of cash.



On March 1, 2015, Oleovest PL and Mission
Agro Energy Limited have been deconsolidated from the Group financials pursuant to an agreement with the Groups convertible note
holders who took effective control on that date.



On August 5, 2015, the Company announced
that it successfully settled the long-standing dispute with the EPCC contractor of the 250,000 tpa refinery with a payment of A$4
million.



We have incurred the following capital expenditures
over the last three fiscal years:



|                              |  | 2015 A$’000 |   |  | 2014A$’000 |  |    | 2013A$’000 | 
|----------------------------- |  | ----------- | - |  | ---------- |  | -- | ---------- | 
|Biodiesel refinery            |  |             | - |  |            |  | -  |            | 
|Land & buildings              |  |             | - |  |            |  | -  |            | 
|IT systems & office equipment |  |             | - |  |            |  | 35 |            | 
|Vehicles & sundry equipment   |  |             | - |  |            |  | -  |            | 



Our principal office is located at Unit B9, 431 Roberts Rd,
Subiaco, Western Australia 6008 Australia. Our telephone number is +61-8-6313-3975. Our website address is www.missionnewenergy.com.
Information on our website and websites linked to it do not constitute part of this annual report.



| | B. | Business Overview.
| | -- | ------------------



Recent Developments



As part of
an ongoing restructuring, the Company previously sold the 100,000 tpa refinery to Felda Global
Group in October 2013. In addition, the Company’s terminated Indonesian joint venture project, which had been referred to
arbitration in Indonesia, was settled pursuant to an arbitrational award in December 2014. In
February 2015, the Company sold its 250,000 tpa refinery to a newly created entity FGV Green Energy and retained a 20% share in
this new joint venture entity.



Overview



Mission NewEnergy now owns a 20% share in
a joint venture company which intends to be a producer of biodiesel and wholesale biodiesel distribution, focused on the government
mandated markets of the United States, Europe and Malaysia. The biodiesel refinery is currently shut down and undergoing a retrofit
with new technology to enable the production with alternative feedstock.



The biodiesel refinery is located at Port
Kuantan, Malaysia, and has a nameplate capacity of 75 million gallons-per-year. The production facility in Kuantan is connected
by two-way pipelines to a dedicated jetty 200 meters away at an all-weather, deep sea, international port. The refinery is currently
non-operational and being retrofitted with new technology.



Our Competitive Strengths



We believe that the following strengths
will enable the joint venture company to compete successfully in the biofuels industry:



Next Generation Transesterification Technology



The refinery technology will be based on
Benefuel International Holdings S.A.R.L.’s, or Benefuel’s technology which makes it potentially an attractive technology
for certain retrofit bolt on technology providers. Should such technology providers emerge, the joint venture company may be well
positioned as partner, thereby enabling it to operate its refining asset in a beneficial manner.



18







Our Strategies



The Company is focused on maximizing shareholder
value through a positive return from our investment in the joint venture company owning a 250,000 tpa refinery, and looking for
new business opportunities.



Malaysian Asset



The Company intends to keep its investment
in the Malaysian joint venture company while awaiting a favourable change in operating conditions, or if deemed to be economically
beneficial to shareholders, the Company may sell its interest in the joint venture company for an equity position in a related
company or for a cash value.



Corporate Opportunities



The Company will continue to look at other
related opportunities and projects on a continued basis to enhance shareholder value.



Biodiesel Production



Refinery overview



The refinery is currently undergoing a
retrofit of new technology and is shut down.



For general market acceptance, biodiesel sold to customers in
the United States must meet the technical standards of ASTM D6751, which specifies multiple required properties of pure biodiesel
(sometimes referred to herein as B100) for use as a blend component with petroleum-based diesel fuel. This standard of ASTM International,
an open forum for the development of high-quality, market-relevant international standards, specifies, among other parameters,
the maximum amounts of certain residual by-products that can remain in the finished product after the conversion process, including
acid, free glycerin, total glycerin, water and sediment content, sulphated ash, total sulphur, carbon residue and phosphorous.
The standard also specifies minimum flash point, cetane numbers and copper corrosivity and ASTM has revised the standards to include
specifications for a Cold Soak Filter Test. The test is intended to replicate performance of the biodiesel in cold climates.



Biodiesel Conversion Process



The biodiesel conversion process (transesterification) shown
in the diagram below is based on the Benefuels technology being retrofitted to the 250,000 tpa refinery.







19







The biodiesel plant consists of three
process units: Pretreatment, Biodiesel Production, and Biodiesel Distillation. The pretreatment unit provides degumming, bleaching
and water removal for feedstock, which can include Crude Palm Oil (CPO), CPO blends with higher FFA materials such as Palm Fatty
Acid Distillates (PFAD), and other waste oils such as Used Cooking Oil.



The Biodiesel Production process uses
a proprietary solid catalyst technology to convert the pretreated oils and methanol into crude methyl esters (biodiesel) and Glycerin.
Glycerin is separated by gravity decanting and purified in a falling film evaporator. The crude biodiesel is flash evaporated in
a falling film evaporator and then distilled in a Vacuum Distillation Unit to remove impurities. The finished biodiesel goes into
proving tanks for final QA/QC testing prior to transfer into storage tanks ready for shipment.



Quality control



The joint venture company will typically
employ strict quality control procedures at each stage of the manufacturing process.



The joint venture company will establish
systematic inspections at various manufacturing stages, from raw material procurement to finished product testing. Raw materials
that fail to pass incoming inspection will be returned to suppliers. We believe that the joint venture company will be able to
maintain the quality and reliability of products through close monitoring of the manufacturing processes by a quality control team
and scheduled maintenance of the equipment.



To ensure the effectiveness of the quality
control procedures, the joint venture company will also provide periodic training to production line employees. The quality control
team will also consist of experienced equipment maintenance technicians that oversee the operation of the production facilities
to avoid unintended interruptions and minimize the amount of time required for scheduled equipment maintenance.



The joint venture company’s management
team will implement policies to proactively safeguard against accidents. In addition, the joint venture company management team
will conduct regular inspections and maintenance of the facilities to help ensure product quality and safety.



Plant Utilization & Operating History



Historic Biofuel Sales



When we owned our own refineries, we sold
our products via our own direct sale force in the wholesale market. We historically have only sold our biodiesel to oil trading
companies. Generally, oil traders aggregate biodiesel, blend it with mineral diesel and sell the blended product to major oil companies
who distribute the product via their distribution channel to the end market. Sales to oil trading companies are highly competitive
and pricing fluctuates with market conditions. Because we have not historically had control of the costs of our feedstock, there
have been few times when we could procure feedstock at a price which we could convert to biodiesel and sell profitably. Consequently,
we have not fully utilized our biodiesel production capacity, and in 2012, we put the refinery into care and maintenance due to
an inability for the profit margin on limited sales to cover costs and subsequently sold the refinery.



The following chart shows actual sales production
and utilization of the refining complex.



|                     |  | 2013 |  | 2014 |  | 2015
|-------------------- |  | ---- |  | ---- |  | ----
|Production (tons)    |  | NIL  |  | NIL  |  | NIL 
|Capacity Utilization |  | NIL  |  | NIL  |  | NIL 



All previous contracts with customers have
expired.



Refining By-product Sales



When we owned our own refineries, we historically
sold our glycerin and fatty acid distillates ex works into the immediate cash payment and delivery market.



20







Summary of Historic Sales



The tables below outline our historic sales by country and by
product:



|Indian Operations:               |  |                                 |        |  |                                 |  |       |                                 | 
|-------------------------------- |  | ------------------------------- | ------ |  | ------------------------------- |  | ----- | ------------------------------- | 
|Description                      |  | Fiscal Year Ended
June 30, 2013 |        |  | Fiscal Year Ended
June 30, 2014 |  |       | Fiscal Year Ended
June 30, 2015 | 
|                                 |  | Indian Rupees ‘000              |       
|Agricultural Income              |  |                                 | -      |  |                                 |  | -     |                                 | 
|Wind Mill electricity generation |  |                                 | 19,658 |  |                                 |  | 8,299 |                                 | 
|Crude Jatropha Oil               |  |                                 | -      |  |                                 |  | -     |                                 | 
|Others                           |  |                                 | 1,219  |  |                                 |  | -     |                                 | 
|Total                            |  |                                 | 20,877 |  |                                 |  | 8,299 |                                 | 



The Indian operations were closed down and treated as discontinued
operations from the June 30, 2014 financial year.



|Malaysian Operations: |  |                                 |         |  |                                |  |   |                                | 
|--------------------- |  | ------------------------------- | ------- |  | ------------------------------ |  | - | ------------------------------ | 
|Description           |  | Fiscal Year Ended June 30, 2013 |         |  | Fiscal Year EndedJune 30, 2014 |  |   | Fiscal Year EndedJune 30, 2015 | 
|                      |  | Malaysian Ringgit               |        
|Biofuels              |  |                                 | 482,276 |  |                                |  | - |                                | 
|Pure Glycerin         |  |                                 | -       |  |                                |  | - |                                | 
|Crude Glycerin        |  |                                 | 12,399  |  |                                |  | - |                                | 
|PFAD                  |  |                                 | 15,800  |  |                                |  | - |                                | 
|Crude Jatropha Oil    |  |                                 | -       |  |                                |  | - |                                | 
|Total                 |  |                                 | 510,475 |  |                                |  | - |                                | 



The Malaysian operations were put into care
and maintenance in the June 30, 2012 financial period. Sales in the June 30, 2013, financial period related to stock on hand carried
over from the previous financial year. The Malaysian refinery was sold to the joint venture company in February 2015.



Competition and Competitive Dynamics



When we had our own refineries, our primary
product, biodiesel, sold in the liquid fuels market. The liquid fuels market was and is a highly competitive, large global market
with many well established market participants.



Historically, there have been many entrants
into the biodiesel market in the United States and elsewhere in the world as governments encourage the use of renewable energy
and seek to reduce greenhouse gas emissions, thus inviting new entrants into the market. Despite the over capacity of biodiesel
refining in much of the world, much of the built capacity is rendered either uneconomic or non-competitive by the limited number
of long term offtake agreements, the limited access to necessary working capital and the limited access to sustainable feedstock.



Competitive Forces



We believe the principal competitive factors
for biodiesel producers are as follows:



| | · | Scale. Considerable refining capacity to attract long term significant offtake agreements.
| | - | ------------------------------------------------------------------------------------------

| | · | Pricing.   A producer’s ability to set pricing of products and the ability to use economies of scale
to secure competitive cost advantages to be able to price biofuels below prevailing oil prices.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Technology.   A producer’s ability to produce biodiesel and by-products efficiently and to utilize low
cost raw materials.
| | - | --------------------------------------------------------------------------------------------------------------------------

| | · | Sustainability.   Bearing in mind social responsibility towards the environment, a producer’s ability
to produce biodiesel from sustainable feedstock.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Access to Working Capital & Commodities Risk Management.   A producer’s ability to take advantage
of positive spreads depends on having access to working capital.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



Connectivity to Existing Infrastructure.   The
distribution of product relies on the ability to fit within the existing infrastructure.



21







Production Safety and Environmental Matters



Safety



We had no material safety issues while we
operated our refineries, and none were reported to us last year by the joint venture company.



Environment



When we had our own refineries, we were
committed to environmental protection that complied with or exceeded local environmental standards, and we will work to ensure
the joint venture company does so as well.



| | C. | Organizational Structure.
| | -- | -------------------------



Our principal subsidiaries at 30 June 2015 are set out below.
Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group, and
the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or registration
is also their principal place of business.



Set forth below is the organizational structure
of Mission NewEnergy:







Oleovest PL and Mission Agro Energy Limited
have been deconsolidated from the Group financials with effect from March 1, 2015 pursuant to an agreement with the Group’s
convertible note holders who took effective control on that date.



During the current financial period, the
Company acquired 100% of M2 Capital Sdn Bhd, a Malaysian registered Company, which in turn owns 20% of FGV Green Energy Sdn, a
Malaysian registered Company formed to own the 250,000 tpa refinery sold by the Group during the financial period. Mission Biofuels
Sdn Bhd is 100% owned and is now the Malaysian administrative entity.



For a list of our wholly-owned and indirectly owned subsidiaries,
see Exhibit 8.1 filed hereto.



22







| | D. | Property, Plant and Equipment.
| | -- | ------------------------------



We own a 20% stake in a joint venture company
that owns a biodiesel production facility (with a lease for the underlying land) that is located at Port Kuantan, Malaysia.



The following is further information about
the facility:



|Biodiesel Facility                                     |  | Site area(Acres) |     |  | Total Capacity(1) (milliongallonsper year) |  |    | Capacity Utilization (2)(percentage) |  |  | Commissioning Date
|------------------------------------------------------ |  | ---------------- | --- |  | ------------------------------------------ |  | -- | ------------------------------------ |  |  | ------------------
|250,000 tpa refinery owned by FGV Green Energy Sdn Bhd |  |                  | 6.0 |  |                                            |  | 75 |                                      |  |  | 0                 



| | (1) | Nominal
operating capacity.
| | --- | ---------------------------



| | (2) | The
total tonnage produced during this period was NIL tonnes and the operating nameplate capacity is 75 million gallons for the entire
period.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



Our registered administrative offices
are located on premises comprising approximately 60 square meters in an office building in Perth, Australia.



We also lease properties for purposes
of office quarters in Malaysia. We also lease an apartment in Kuala Lumpur, Malaysia for use by staff.



Item 4A. Unresolved Staff Comments



On September 9, 2014, the Company received
a comment letter from the staff of the Division of Corporation Finance of the SEC.  The comment from the staff was issued
with respect to the omission of an audit report for the financial statements as of and for the years ending June 30, 2012 and 2011.
As of the date of the filing of this Form 20-F, these comments remain unresolved.



Item 5. Operating and Financial Review and Prospects



| | A. | Operating Results.
| | -- | ------------------



You should read the following discussion
and analysis of our financial condition and results of operations in conjunction with “Item 3.A — Selected Financial
Data” and our consolidated financial statements and related notes included elsewhere in this annual report. This discussion
contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events
could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but
not limited to, those set forth under “Item 3.D — Risk Factors” and elsewhere in this annual report.



Overview



We historically have been a producer of
biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution,
focused on the government mandated markets of the United States and Europe and Malaysia. We currently own a 20% share in a joint
venture company that owns a biodiesel refinery that is being retrofitted with new technology that will enable the refinery to produce
biodiesel from alternative, and potentially cheaper, feedstock.



During fiscal
2015, we made a net profit of A$28.4 million (2014: A$1.1 million loss) primarily as a result
of a reversal of a previous impairment of the refinery to a value of A$27.6 million upon the sale of our 250,000 tpa refinery.
We recognized revenues of A$7.3 million (A$9.7 million in fiscal 2014) based on other income predominately comprised of a gain
on the settlement and restructure of our convertible notes. During the 2015 fiscal year, we materially completed our restructuring
commenced in 2012, which included the sale of our refinery assets and subsequent settlement of all debt facilities and convertible
note liabilities. In addition, the long standing dispute with the EPCC contractor was settled in August 2015, and as of the date
of this report, we have no non-current liabilities. The existing investment in the joint venture company is expected to earn the
Group dividends in the future. The Group continues to look for new opportunities that are synergistic to the current investment
in biofuels, or for projects in new market segments with the intention of generating positive operating revenues for the Group.
If the existing investment or new ventures do not generate sufficient revenue to fund the ongoing operating costs of the business,
and if we are unable to achieve our business strategies and objectives, we may need to raise further equity or loan capital for
the business.



23







Biodiesel refining



Our first biodiesel refinery plant began
operations in fiscal 2008 under immediate cash payment and delivery market and term contracts. Due to unattractive refining margins
and a slower than expected implementation of a biodiesel mandate in Malaysia, capacity utilization was low and the revenue generated
from biodiesel sales and associated by-products was insufficient to cover costs, and the refinery was put into care and maintenance
and ultimately sold.



The EPCC contractor of our second biodiesel
refinery had significant issues in handing over a fully completed pre-treatment plant and the transesterification unit to the Group
and the matter ultimately ended in arbitration. In February 2015, the sale of this refinery was completed and in August 2015 a
final settlement of the dispute was agreed between the EPCC contractor and the Group. The Group retained a 20% shareholding in
the joint venture company to which this refinery was sold.



Discontinued operations : Jatropha feedstock and palm
oil processing business



We commenced the shutdown of our Jatropha
feedstock business in fiscal 2012. This process has been completed.



Due to breach by our business partner in the Indonesian joint
venture to build, own and operate a palm oil oleo chemical complex in Sumatra, Indonesia, we took the matter to arbitration. An
award of US$3.36 million was made by the arbitrators in favor of the Group in July 2014 and received by the Group during the 2015
fiscal year.



Critical Accounting Policies



Our discussion and analysis of our operating
and financial performance and prospects are based upon our consolidated financial statements. The preparation of these consolidated
financial statements requires us to make estimates and judgments that affect the reported amounts of revenue, assets, liabilities
and expenses. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions.



Our significant accounting policies are
more fully described in Note 3 to our audited consolidated financial statements included elsewhere in this annual report. However,
critical accounting policies that affect our more significant judgments and estimates used in the preparation of our financial
statements are set forth below.



Impairment of assets



We assess impairment of assets by evaluating
conditions that may lead to impairment of particular assets. Where an impairment trigger exists, the recoverable amount of the
asset is determined.



Property, Plant and Equipment



Each class of property, plant and equipment
is carried at cost less, where applicable, any accumulated depreciation and impairment losses. The cost of fixed assets constructed
within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable
overheads.



Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to the Statement of profit or loss during the financial period in which they are incurred.



24







At each reporting date, the Group reviews
the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been
impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value
over its recoverable amount is expensed to the Statement of profit or loss.



Impairment testing is performed at each
reporting date for goodwill and intangible assets with indefinite lives.



Where it is not possible to estimate the
recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs.



There is a risk of the actual outcomes being
different from those forecast due to changes in economic, market and agricultural conditions and/or assumption regarding events,
which may result in the carrying value of biodiesel plants exceeding the recoverable amount.



We are required, under International Financial
Reporting Standards, to assess the refineries ability to generate revenue based on existing conditions. During fiscal 2010, the
lack of profitable sales contracts or evidence that would indicate that profitable sales contracts were imminently achievable,
forced us to provide for an impairment of the refining assets. Additional impairment of assets was made in the following fiscal
years relating to asset expenditure additions incurred in the year.



Comparison of Results of Operations



Fiscal 2015 compared with fiscal 2014



Revenue. Revenue decreased
by A$2.4 million (25% reduction) from A$9.7 million in fiscal 2014 to A$7.3 million in fiscal 2015, principally as a result of
a reduction in the gain from period to period realised from the settlement of convertible notes.



There was no revenue generated from sales
of product in these periods due to the refinery having been shutdown and sold.



Cost of sales. (being material feedstocks,
inputs and raw materials).Nil due to non-operation of the refinery during this period.



Expenses. Total expenses decreased
by A$7.2 million (70% decrease) from A$10.3 million in fiscal 2014 to A$3.1 million in fiscal 2015 principally due to a foreign
exchange gain in fiscal 2015 compared to a foreign exchange loss in fiscal 2014 and a reduction in financing costs due to settlement
and restructure of the convertible notes. Employee benefits expenses increased A$0.2 million from A$1.4 million in fiscal 2014
to A$1.6 million in fiscal 2015. Other expense increased by A$1.0 million from A$1.0 million in fiscal 2014 to A$2.0 million primarily
due to an increase in legal fees stemming from the ongoing arbitration matters.



Income tax.   Income
tax expense increased by A$5.5 thousand from NIL in fiscal 2014 to an expense of A$5.5 thousand in fiscal 2015.



Discontinued operations.   Discontinued
operations increased by A$24.6 million from a loss of A$0.5 million in fiscal 2014 to a profit of A$24.1 million in fiscal 2015.
The positive result in fiscal 2015 is primarily as a result of the reversal of impairment on the sale of the 250,000 tpa refinery,
with the profit shown in discontinued operations.



Profit for the year.   As
a result of the foregoing, fiscal 2015 registered a profit for the year of A$28.4 million, an increase of A$29.5 million from A$1.1
million loss in fiscal 2014.



Fiscal 2014 compared with fiscal 2013



Revenue.Revenue increased
by A$1.3 million (15%) from A$8.4 million in fiscal 2013 to A$9.7 million in fiscal 2014 principally as a result of an increase
in the gain from period to period realised from settlement of convertible notes.



25







There was no revenue generated from sales
of product in fiscal 2014, with product sales of A$0.2 million recognized in fiscal 2013.



Cost of sales. (being material feedstocks,
inputs and raw materials). There were no cost of sales in fiscal 2014 due to no sales of product, with a minor cost of sales
of A$0.01 million in fiscal 2013 relating to costs incurred to sell the final product on hand.



Expenses (excluding impairment).
Total expenses increased by A$1.1 million (13%) from A$8.8 million in fiscal 2013 to A$9.9 million in fiscal 2014 principally due
the increase in foreign exchange loss of A$1.0 million from A$1.4 million in fiscal 2013 to a loss in fiscal 2014 of A$2.4 million,
and an increase in finance costs of A$0.8 million from A$4.0 million in fiscal 2013 to A$4.8 million in fiscal 2014. The increase
in costs was offset by a reduction in employee benefits expense of A$0.2 million from A$1.6 million in fiscal 2013 to A$1.4 million
in fiscal 2014.



Impairment Expense. Impairment
expenses increased by A$11.8 million from an impairment gain (reversal) of A$11.5 million in fiscal 2013 to an impairment expense
(loss) of A$0.4 million in fiscal 2014 principally due to an impairment reversal of the Groups first refinery (100,000 tpa refinery)
in 2013 which was recognized when the asset was sold.



Additional movements in expenses include:



Depreciation and amortization. Depreciation
and amortization remained similar at A$6.8 thousand in fiscal 2013 year and A$7.4 thousand in fiscal 2014.



Discontinued operations.   Discontinued
operations decreased by A$0.2 million from a loss of A$0.7 million in fiscal 2013 to an loss of A$0.5 million in fiscal 2014 and
is primarily as a result of the material portion of costs within the discontinued operations being incurred in fiscal 2013.



Income tax.  There was
NIL income tax or benefit in fiscal 2014 as opposed to a benefit of A$20 thousand in fiscal 2013.



(Loss) for the year.   As
a result of the foregoing, our profit for the year dropped from A$10.1 million in fiscal 2013 to A$1.1 million loss in fiscal 2014.



Impact of Inflation



We do not believe that inflation has had
a material effect on our business.



Effects of Currency Fluctuations



Our reporting currency is the Australian
dollar. In accordance with IFRS, costs not denominated in Australian dollars are re-measured in Australian dollars, when recorded,
at the prevailing exchange rates for the purposes of our financial statements. Consequently, fluctuations in the rates of exchange
between the Australian dollar, Malaysian Ringgit, Indian Rupee and the U.S. dollar affect our results of operations. An increase
in the value of a particular currency relative to the Australian dollar will reduce the Australian dollar reporting value for transactions
in that particular currency, and a decrease in the value of that currency relative to the Australian dollar will increase the Australian
dollar reporting value for those transactions.



The effect of foreign currency translation
is reflected in our financial statements in the statements of changes in shareholders’ equity and is reported as accumulated
foreign currency translation reserve. We have not entered into any hedging arrangements to mitigate the effects of currency fluctuations.



| | B. | Liquidity and Capital Resources.
| | -- | --------------------------------



Overview



Our operations have been financed primarily
from the issuance of convertible notes and equity securities to investors.



26







The following table sets forth our consolidated
cash flows since fiscal 2013.



|                                                                 |  | 2015 A$’000 |         |   | 2014 A$’000 |  |        | 2013 A$’000 | 
|---------------------------------------------------------------- |  | ----------- | ------- | - | ----------- |  | ------ | ----------- | 
|Net cash provided by (used in) operating activities              |  |             | 391     |   |             |  | (2,946 | )           | 
|Net cash provided by investing activities                        |  |             | 19,692  |   |             |  | 10,981 |             | 
|Net cash provided by (used in) financing activities              |  |             | (17,731 | ) |             |  | (8,960 | )           | 
|Effect of exchange rate changes on cash held in foreign currency |  |             | 347     |   |             |  | (43    | )           | 
|Net movement in cash and cash equivalents                        |  |             | 2,699   |   |             |  | (968   | )           | 
|Cash and cash equivalents at the beginning of the year           |  |             | 452     |   |             |  | 1,420  |             | 
|Cash and cash equivalents at the end of the year                 |  |             | 3,151   |   |             |  | 452    |             | 



Fiscal 2015 compared with fiscal 2014



Net cash provided by operating activities
in fiscal 2015 of A$0.4 million was primarily achieved as a result of receipt of receivable funds from Indonesia and the arbitral
settlement achieved. Net cash utilized in fiscal 2014 are as a result of losses incurred in operations and Group overheads. The
losses were incurred in all segments of the business. Due to NIL throughput volume, our refining operations generated no gross
profit to cover overheads, resulting in a negative cash flow from refining operations. As a result of negative operating cashflows
in all segments and Group overheads, the Group was cash flow negative for the fiscal year. Cash generated from sale of assets
and borrowings were used to sustain the basic operating expenses including, employee remunerations, insurances and utilities.



Net cash inflow in investing activities
in fiscal years 2015 and 2014 related principally to the proceeds received from the sale of our refineries.



Net cash outflow in financing activities
for fiscal years 2015 and 2014 was primarily a result of settlement of convertible note debt.



Fiscal 2014 compared with fiscal 2013



Net cash used in operating activities in
fiscal 2014 and 2013 consisted of losses incurred in operations and Group overheads. The reduction of A$0.8 million from fiscal
year 2013 of A$3.7 million to A$2.9 million in fiscal year 2014 is a result of significant cost saving measures implemented throughout
the Group.



Due to NIL throughput volume our refining
operations generated no gross profit to cover overheads, resulting in a negative cash flow from refining operations. As a result
of negative operating cashflows in all segments and Group overheads, the Group was cash flow negative for the 2014 and 2013 fiscal
years. In fiscal year 2013, our Jatropha operations generated negligible cash revenue, resulting in negative operating cash flows
from this segment, which was ultimately discontinued fully in fiscal 2013.



Net cash inflow in investing activities
related principally to the proceeds received for the sale of property and for our advance monies received relative to the sale
of our one refinery.



Net cash inflow from financing activities in fiscal 2013 related
to loan drawdown from a facility made available to the group to fund working capital needs.



27







Credit terms for receivables



Historically, the receipt of payment for
sales to biodiesel customers was required on the date the ship was loaded with biodiesel. Credit risk was managed through the use
of letters of credit. However market conditions dictate that future sales to customers may be made on credit terms of up to 60
days, depending on our assessment of customers’ creditworthiness, and we may have to maintain ownership of products during
transit to customers which could extend our cash collection cycle well beyond our historical experience and increase our need for
working capital.



For sales of Jatropha saplings to contract
farmers, the receivable arose and was recorded as of the date of delivery of the saplings, with credit risk mitigated by our right
to offset the receivable for each farmer against amounts we may owe that farmer for future purchases of seeds. Due to the scale
back of operations we have written off all Jatropha segment receivables.



With the sale of the refineries and the
discontinuance of the Jatropha segment there are no receivables remaining on balance sheet from these operating segments. In fiscal
2014 a receivable was held on balance sheet relating to monies to be recovered through the Malaysian arbitration process which
resulted from a dispute between the Group and the 250,000 tpa refinery EPCC contractor about the handover of the refinery. This
amount was impaired in fiscal 2015 as a net result of the settlement agreement signed with the EPCC contractor.



Convertible Notes



We issued 50,000,000 convertible notes at
a price of A$1.30 per note in May 2007 (Series 1 convertible notes). During the 2011 fiscal year, the majority of these notes (75.33%)
were restructured into Series 2 Convertible Notes with an extension of the maturity date from May 2012 to May 2014. Holders could
convert all or part of the notes at any time until maturity (May 16, 2014) at a conversion price of A$65.00 per note. The series
one convertible note, with a nominal value of A$15 million, was due in May 2012. We settled the liability relating to the remaining
Series 1 Convertible Note holder in September 2011 for A$5 million after mutual agreement with the note-holder. Each remaining
Series 2 note was convertible into four ordinary shares (subject to adjustment for customary events, such as share consolidation).
The Series 2 notes carried interest at a rate of 4.0% per annum and interest was payable semi-annually. Mission NewEnergy could
convert some or all of the notes at any time if the daily volume weighted average price of Mission NewEnergy’s ordinary shares
on the Australian Securities Exchange, or ASX, for a period of 90 consecutive days is 1.5 times the face value of the notes. At
no stage during the period have any covenants on these convertible notes been breached.



During 2012, 198,885 convertible notes were
converted into ordinary shares.



The remaining Series 2 notes totaling 505,904
convertible notes were convertible into an aggregate of 2,023,616 ordinary shares at a conversion price of A$16.25 per share.



In November 2012, we successfully converted
the Series 2 notes into Series 3 notes, bearing NIL interest, and a revised conversion ratio of 1:433 ordinary shares. The Series
3 notes totaling 505,904 convertible notes are convertible into an aggregate of 219,056,432 ordinary shares.



In October 2013, we settled A$7,500,000
of the convertible note debt from proceeds of the sale of our 100,000 tpa refinery, leaving 390,520 notes with a nominal debt value
of A$25,383,800 owing.



On December 30, 2013, we completed a substantial
restructuring of the convertible notes, with the key changes being the extension of the maturity date to December 31, 2018 and
a 6% pa coupon, with coupon payments deferred to December 31, 2015.



On December 2, 2014, we utilized US$2 million
of the proceeds from the Indonesian arbitration settlement to settle a portion of the convertible notes.



On February
19, 2015, we successfully settled all outstanding convertible note liability through a final payment of US$12 million, being a
portion of the proceeds from the sale of the 250,000 tpa refinery. In addition, a portion of the proceeds from the refinery sale
were held back on deposit pending the outcome of legal proceedings with the refinery EPCC contractor. Note holders retain a residual
claim on any cash withheld and not required to be paid out to as part of any legal settlement. On
August 5, 2015, we successfully settled the long-standing dispute with the EPCC contractor with a payment of A$4 million of cash
held back from the sale of the refinery.



28







For accounting purposes, the convertible
notes are treated as compound financial instruments. The liability component of a compound financial instrument is recognised initially
at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially
at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.
Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial
carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent
to initial recognition.



Bank facility



We do not currently have any bank credit
facilities.



Secured loans



We do not currently have any secured loans.



Other material commitments



In fiscal 2015, the Group’s 250,000
tpa refinery was sold and A$5.2 million was required to be withheld pending the outcome of legal proceedings. Provision has been
made on the Balance Sheet for these liabilities, with the majority being settled post June 30, 2015.



Warrants



There are no outstanding warrants.



| | C. | Research and Development, Patents and Licenses, etc.
| | -- | ----------------------------------------------------



Our expenditure on research and development
was Nil in fiscal years 2015, 2014 and 2013.



We have currently suspended all research
and development projects.



| | D. | Trend Information.
| | -- | ------------------



Other than as disclosed elsewhere in this
annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have
a material effect on our revenue, income, profitability, liquidity or capital resources or that would cause reported financial
information not necessarily to be indicative of future operating results or financial condition.



| | E. | Off-Balance Sheet Arrangements.
| | -- | -------------------------------



We do not have any material off-balance
sheet commitments or arrangements.



| | F. | Tabular Disclosure of Contractual Obligations.
| | -- | ----------------------------------------------



The following table summarizes our contractual
obligations and commitments as of June 30, 2015:



|                            |  | Payments due by period |      
|--------------------------- |  | ---------------------- | -----
|                            |  | Total A$               |      
|Operating lease obligations |  |                        | 8,803
|Secured loans               |  |                        | —    
|Convertible notes           |  |                        | —    
|Capital commitments         |  |                        | —    
|Total                       |  |                        | 8,803



29







Item 6. Directors, Senior Management and Employees



| | A. | Directors and Senior Management.
| | -- | --------------------------------



The following table sets forth information of our directors
and executive officers as of the date of this annual report. The directors have served in their respective capacities since their
election or appointment and will serve until the next annual general shareholders meeting or until a successor is duly elected.



|Name                                                          |  | Age |  | Position                                                       
|------------------------------------------------------------- |  | --- |  | ---------------------------------------------------------------
|Datuk Zain Yusuf                                              |  | 75  |  | Chairman                                                       
|Dato’ Nathan Mahalingam                                       |  | 57  |  | Chief Executive Officer and Director                           
|Guy Burnett                                                   |  | 47  |  | Chief Financial Officer, Director and Company Secretary        
|Admiral (Ret) Tan Sri Dato’
Seri Mohd Anwar bin Haji Mohd Nor |  | 65  |  | Director                                                       
|Mohd Azlan                                                    |  | 54  |  | Director                                                       
|James Garton                                                  |  | 38  |  | Director and Head of Corporate Finance/Mergers and Acquisitions



Datuk Zain Yusuf. Datuk Zain has
over 25 years experience in Shell Malaysia. From 1986 to 1988, he was seconded to Shell International, United Kingdom and worked
as Marketing Consultant in Shell UK and Shell Caribbean. Upon his return to Malaysia, he was made Marketing Director of Shell Malaysia.
He subsequently served on the Board of Directors of Shell Group Malaysia as Executive Director, with responsibility over a total
of 18 group subsidiaries involved in both the upstream and downstream petrochemical business. Datuk Zain is a Director of WSA Group
of Companies and Chairman of Malacca Securities Sdn Bhd, past chairman of the Malaysian Australia Business Council and served as
a Director of Airod Sdn Bhd, NADI Bhd, Faber Group Bhd, PJ Bumi Bhd and as chairman of Confoil (Malaysia) Bhd, a Malaysian - Australian
joint venture company in Malaysia.



Dato’ Nathan Mahalingam.
Dato’ Nathan has been Chief Executive Officer (formerly having the title of Managing Director) and a Director of Mission
NewEnergy since 2005. He has over 25 years of management experience in banking and finance, heavy industries and infrastructure
development. He has successfully implemented numerous start up manufacturing operations in Malaysia during his tenure of service
with a large Malaysian conglomerate. Between 1995 and 2000, he served as project director in the Westport Group, developers of
one of Malaysia’s largest privatised port and transhipment facility. Dato’ Nathan has gained extensive project advisory,
corporate finance, mergers and acquisitions experience while running his own boutique corporate advisory practice between 2000
and 2004.



Guy Burnett.Mr. Burnett has
been Chief Financial Officer (formerly having the title of Finance Director) since 2008, a Director since 2009 and Company Secretary
of Mission NewEnergy since September 2010. He is a Chartered Accountant and has worked as a financial professional in several large
corporations. Prior to joining Mission NewEnergy, Mr. Burnett was Manager, Corporate Accounting & Tax with Western Power (an
electricity networks corporation owned by the Western Australian government) from 2006 to 2008 and, before that, worked as a financial
accountant for Water Corporation from 2004 to 2005 and served as a Manager with KPMG from 2005 to 2006 where he assisted clients
with implementing International Financial Reporting Standards.



Admiral (Ret) Tan Sri Dato’ Seri
Mohd Anwar bin Haji Mohd Nor (Tan Sri Anwar).Tan Sri Anwar made history in April 2005 when he became the first naval chief
in the Malaysian Armed Forces (MAF) to ascend to its highest military office of the Chief of Defence Force, commanding workforce
strength of nearly 130,000. With nearly 40 years of military experience with the Royal Malaysian Navy (RMN) and MAF, he has acquired
a massive portfolio of achievements. His outstanding performance extends to the academic arena as well inclusive of stints at the
Naval Staff College (Rhode Island, USA), Navigation and Direction Course and Principal Warfare Officers Course (HMS DRYAD, United
Kingdom). He also holds a Master of Science in Engineering Business Management from the University of Warwick, United Kingdom.
Tan Sri Anwar has received numerous commendations, awards and accolades in recognition of his talents, and was bestowed the Panglima
Mangku Negara (PMN), which carries the title of Tan Sri, by His Majesty the Yang Di-Pertuan Agong (the King of Malaysia). He has
also received distinguished medals from foreign governments such as the Ordre National De La Legion D’Honneur from France
and the Command of the Legion of Merit from the US. Most recently he was appointed as a Senator to the Upper House of Malaysia.



30







Mr. Mohd Azlan bin Mohammed.Mr
Mohd Azlan, is currently the Managing Director of Wasco Oilfield Services Sdn Bhd, which is principally involved in the provision
of oil and gas services internationally. Wasco is a subsidiary of Bursa Malaysia listed Wah Seong Corporation Berhad and also sits
on the board of its various subsidiaries.



James Garton. Mr. Garton has
been Head of Corporate Finance and Mergers and Acquisitions since 2008. He has over 10 years experience in corporate finance, working
in investment banking. Mr. Garton joined Mission NewEnergy from the U.S. investment bank, FBR Capital Markets, where he was Vice
President, Investment Banking. Prior to joining FBR Capital Markets, he worked in corporate finance and equity capital markets
with the Australian firm BBY Limited. Before BBY, Mr. Garton worked in private equity with the Australian advisory firm Investment
Capital Limited. Mr. Garton has a Masters of Applied Finance from Macquarie University, Sydney, and a Bachelor of Science in Economics
and a Bachelor of Business Administration in Finance from Texas A&M University.



Family Relationships



There are no family relationships between
any directors or executive officers of Mission NewEnergy.



Arrangements



There are no known arrangements or understandings
with any major shareholders, customers, suppliers or others pursuant to which any of our officers or directors was selected as
an officer or director of Mission NewEnergy.



| | B. | Compensation.
| | -- | -------------



In fiscal year 2015, the aggregate remuneration
we paid and that accrued to our directors and senior management was A$1.137 million.



|2015                                                         |  | Salary |         |  | Non- cash Benefits |  |       | Long-termBonus1 |  |  | Share based payments $ |  |  | Post-
employment Super Contribution |         |  | Total |  |        | Proportion of remuneration performance related | 
|------------------------------------------------------------ |  | ------ | ------- |  | ------------------ |  | ----- | --------------- |  |  | ---------------------- |  |  | ----------------------------------- | ------- |  | ----- |  | ------ | ---------------------------------------------- | 
|Non-Executive Directors                                      |  |        |         |  |                    |  |       |                 |  |  |                        |  |  |                                     |         |  |       |  |        |                                                | 
|Datuk Zain Yusuf                                             |  |        | 42,500  |  |                    |  | -     |                 |  |  | -                      |  |  |                                     | -       |  |       |  | -      |                                                | 
|Admiral (Ret) Tan Sri Dato’ Sri Mohd Anwar bin Haji Mohd Nor |  |        | 24,000  |  |                    |  | -     |                 |  |  | -                      |  |  |                                     | -       |  |       |  | 184    |                                                | 
|Mohd Azlan                                                   |  |        | 19,000  |  |                    |  | -     |                 |  |  | -                      |  |  |                                     | -       |  |       |  | 144    |                                                | 
|Total Non-executive Directors                                |  |        | 85,500  |  |                    |  | -     |                 |  |  | -                      |  |  |                                     | -       |  |       |  | 328    |                                                | 
|Dato’ Nathan Mahalingam                                      |  |        | 291,625 |  |                    |  | -     |                 |  |  | 50,000                 |  |  |                                     | 50,000  |  |       |  | -      |                                                | 
|Mr. Guy Burnett                                              |  |        | 216,121 |  |                    |  | 3,879 |                 |  |  | 50,000                 |  |  |                                     | 50,000  |  |       |  | 20,900 |                                                | 
|Mr. James Garton2                                            |  |        | 200,000 |  |                    |  | -     |                 |  |  | 50,000                 |  |  |                                     | 50,000  |  |       |  | 19,000 |                                                | 
|TOTAL DIRECTOR/ KEY MANAGEMENT PERSONNEL                     |  |        | 793,246 |  |                    |  | 3,879 |                 |  |  | 150,000                |  |  |                                     | 150,000 |  |       |  | 40,228 |                                                | 








1Being the market
value of the 5,000,000 ordinary shares issued in lieu of cash owed

2Mr. Garton was appointed
as a Director on 1 July 2014.



31







In fiscal year 2014, the aggregate remuneration
we paid and that accrued to our directors and senior management was A$1.234 million.



|2014                                                         |  | Salary |           |  | Non-cash Benefits |  |       | Short term Bonus |  |  | Share based  payments |  |  | Post employment Super Contribution |   |  | Total |  |        | Proportion of remuneration performance related | 
|------------------------------------------------------------ |  | ------ | --------- |  | ----------------- |  | ----- | ---------------- |  |  | --------------------- |  |  | ---------------------------------- | - |  | ----- |  | ------ | ---------------------------------------------- | 
|                                                             |  | $      |           |  | $                 |  |       | $                |  |  | $                     |  |  | $                                  |   |  | $     |  |        | %                                              | 
|Non-Executive Directors                                      |  |        |           |  |                   |  |       |                  |  |  |                       |  |  |                                    |   |  |       |  |        |                                                | 
|Mr Dario Amara3                                              |  |        | 75,000    |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | 6,906  |                                                | 
|Datuk Zain Yusuf                                             |  |        | 56,250    |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | 867    |                                                | 
|Mr. Peter Torre4                                             |  |        | 40,875    |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | -      |                                                | 
|Admiral (Ret) Tan Sri Dato’ Sri Mohd Anwar bin Haji Mohd Nor |  |        | 37,500    |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | 607    |                                                | 
|Mr Arun Bhatnagar5                                           |  |        | 25,000    |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | -      |                                                | 
|Total Non-executive Directors                                |  |        | 234,625   |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | 8,380  |                                                | 
|Dato’ Nathan Mahalingam                                      |  |        | 292,415   |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | -      |                                                | 
|Mr Guy Burnett                                               |  |        | 218,000   |  |                   |  | 2,000 |                  |  |  | -                     |  |  |                                    | - |  |       |  | 20,257 |                                                | 
|Total Executive Directors                                    |  |        | 510,415   |  |                   |  | 2,000 |                  |  |  | -                     |  |  |                                    | - |  |       |  | 20,257 |                                                | 
|                                                             |  |        |           |  |                   |  |       |                  |  |  |                       |  |  |                                    |   |  |       |  |        |                                                | 
|Key management personnel                                     |  |        |           |  |                   |  |       |                  |  |  |                       |  |  |                                    |   |  |       |  |        |                                                | 
|Mr Samsudeen Ganny6                                          |  |        | 120,608   |  |                   |  | -     |                  |  |  | 105,000               |  |  |                                    | - |  |       |  | 14,681 |                                                | 
|Mr James Garton (Group Head of Corporate Finance)            |  |        | 200,000   |  |                   |  | -     |                  |  |  | -                     |  |  |                                    | - |  |       |  | 18,500 |                                                | 
|TOTAL KEY MANAGEMENT PERSONNEL                               |  |        | 1,065,648 |  |                   |  | 2,000 |                  |  |  | 105,000               |  |  |                                    | - |  |       |  | 61,818 |                                                | 










3Mr. Amara retired
on 1 July 2014.

4Mr. Torre retired
on 1 July 2014.

5Mr. Bhatnagar resigned
on 28 February 2014.

6Mr Ganny resigned
from the group on 30 June 2014.



32







| | (1) | Superannuation is a mandatory retirement plan for employees in Australia.
| | --- | -------------------------------------------------------------------------



Share Based Compensation Plans



At the date of this report, the Group has
no Share Based Compensation Plans.



During fiscal year 2015, the Group settled
a material retention bonus for executives in the form of cash and fifteen million ordinary shares (as approved by shareholders
at the annual meeting held on October 27, 2015).



Performance Rights



At the date of this annual report, the Group
has no Performance Right Plans and there were no performance rights issued in fiscal years 2013, 2014 and 2015.



Options



At the date of this annual report, the Group
has no Option Plans and there were no options issued in fiscal years 2013, 2014 and 2015.



Retirement Benefits



All employees employed by Mission NewEnergy
and its subsidiaries belong to appropriate retirement schemes for each jurisdiction in which it operates. All such employee retirement
schemes are defined contribution schemes and thus no amounts are required to be set aside by us to meet any future retirement benefit
obligations.



33







| | C. | Board Practices.
| | -- | ----------------



Role of the Board of Directors



The Board of Mission is responsible for
setting the Company’s strategic direction and providing effective governance over Mission’s affairs in conjunction
with the overall supervision of the Company’s business with the view of maximising shareholder value. The Board’s key
responsibilities are to:



| | · | chart the direction, strategies and financial objectives for Mission and monitor the implementation of those policies, strategies
and financial objectives;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | keep updated about the Group’s business and financial status;
| | - | -------------------------------------------------------------

| | · | provide oversight and monitor compliance with regulatory requirements, ethical standards, risk management, internal compliance
and control, code of conduct, legal compliance and external commitments;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | appoint, evaluate the performance of, determine the remuneration of, plan for the succession of and, where appropriate, remove
the Managing Director/Group Chief Executive Officer, the Company Secretary and the Finance Director/Chief Financial Officer;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | exercise due care and diligence and sound business judgment in the performance of those functions and responsibilities; and
| | - | ---------------------------------------------------------------------------------------------------------------------------

| | · | ensure that the Board continues to have the mix of skills and experience necessary to conduct Mission’s activities, and
that appropriate directors are selected and appointed as required.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Group has a formal process to educate
new directors about the nature of the business, current issues, the corporate strategy, the culture and values of the Group, and
the expectations of the Group concerning performance of the directors. In addition directors are also educated regarding meeting
arrangements and director interaction with each other, senior executives and other stakeholders. Directors also have the opportunity
to visit Group facilities and meet with management to gain a better understanding of business operations. Directors are given access
to continuing education opportunities to update and enhance their skill and knowledge.



The Board has adopted a Board Charter,
which sets out in more detail the responsibilities of the Board. The Board Charter sets out the division of responsibility between
the Board and management to assist those affected by decisions to better understand the respective accountabilities and contribution
to Board and management.



In accordance with Mission’s Constitution,
the Board delegates responsibility for the day–to–day management of Mission to the Managing Director/Group Chief Executive
Officer (subject to any limits of such delegated authority as determined by the Board from time to time). Management as a whole
is charged with reporting to the Board on the performance of the Company.



Board structure and composition



The Board currently is comprised of six
directors, of which two are independent non–executive directors, one is a non-independent non-executive director and three
are executive directors. Details of each director’s skills, expertise and background are contained within the directors’
report included with the company’s annual financial statements lodged with the Australian Securities Exchange. The Board
considers the mix of skills and the diversity of Board members when assessing the composition of the Board. The Board assesses
existing and the potential director’s skill to ensure they have appropriate industry expertise in the Group’s operating
segments.



Independence, in this context, is defined
to mean a non–executive director who is free from any interest and any business or other relationship that could, or could
reasonably be perceived to, materially interfere with the directors ability to act in the best interests of Mission. The definition
of independence in ASX Recommendation 2.1 is taken into account for this purpose.



A director cannot hold the position of
both Chairman and Managing Director/Group Chief Executive Officer.



34







Apart from the Group CEO, Mission’s
directors may not hold office for a continuous period in excess of three years or past the third annual general meeting following
their appointment, whichever is longer, without submitting for re–election. Directors are elected or re–elected, as
the case may be, by shareholders in a general meeting. Directors may offer themselves for re–election. A Director appointed
by the directors (e.g., to fill a casual vacancy) will hold office only until the conclusion of the next annual general meeting
of Mission but is eligible for re–election at that meeting.



Under Mission’s Constitution, voting
requires a simple majority of the Board. The Chairman does not hold a casting vote.



Board Diversity



The Board has a formal diversity policy
which states that Mission NewEnergy Limited is committed to embedding a corporate culture that embraces diversity through:



| | • | Recruitment on the basis of competence and performance and selection
of candidates from a diverse pool of qualified candidates,
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | • | Maintaining selection criteria that does not indirectly disadvantage
people from certain groups,
| | - | ------------------------------------------------------------------------------------------------

| | • | Providing equal employment opportunities through performance and flexible
working practices,
| | - | --------------------------------------------------------------------------------------------

| | • | Maintaining a safe working environment and supportive culture by taking
action against inappropriate workplace and business behavior that is deemed as unlawful (discrimination, harassment, bullying,
vilification and victimization),
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Promoting diversity across all levels of the business,
| | - | ------------------------------------------------------

| | • | Undertaking diversity initiatives and measuring their success,
| | - | --------------------------------------------------------------

| | • | Regularly surveying our work climate, and
| | - | -----------------------------------------

| | • | Establishing measurable objectives in achieving gender diversity.
| | - | -----------------------------------------------------------------



Since the Company’s incorporation,
given its cross-jurisdictional operations in Australia and Malaysia, a diversity practice is naturally in place.



Board and management effectiveness



Responsibility for the overall direction
and management of Mission, its corporate governance and the internal workings of Mission rests with the Board, notwithstanding
the delegation of certain functions to the Managing Director/Group Chief Executive Officer and management generally (such delegation
effected at all times in accordance with Mission’s Constitution and its corporate governance policies). The Board has access,
at the company’s expense, to take independent professional advice after consultation with the Chairman.



An evaluation procedure in relation to
the Board, individual directors and Company executives was completed during the 2015 financial year. The evaluation of the Board
as a whole was facilitated through the use of a questionnaire required to be completed by each Board member, the results of which
were summarised, discussed with the Chairman of the Board and tabled for discussion at a Board Meeting. Similarly each individual
director was required to self assess his performance and discuss the results with the Chairman. Individual directors’ performance
is evaluated by reference to the Director’s contribution to monitoring and assessing management performance in achieving
strategies and budgets approved by the Board (among other things).



A similar process for review of committees
was undertaken during the 2014 and 2013 financial year.



To ensure management, as well as Board
effectiveness, the Remuneration and Nomination Committee has direct responsibility for evaluating the performance of the Managing
Director/Group Chief Executive Officer and other executives.



35







Internal control, risk management and financial reporting



The Board has overall responsibility for
Mission’s systems of internal control. These systems are designed to ensure effective and efficient operations, including
financial reporting and compliance with laws and regulations, with a view to managing the risk of failure to achieve business objectives.
It must be recognized, however, that internal control systems can provide only reasonable and not absolute assurance against the
risk of material loss.



The Board reviews the effectiveness of
the internal control systems and risk management on an ongoing basis, and monitors risk through the Audit and Risk Management Committee
(see the Audit and Risk Management Committee). The Board regularly receives information about the financial position and performance
of Mission. For annual and half-yearly accounts released publicly, the Managing Director/Group Chief Executive Officer and the
Finance Director/Chief Financial Officer sign-off to the Board:



| | · | the accuracy of the accounts and that they represent a true and fair view, in all material respects, of Missions financial
condition and operational results, and have been prepared in accordance with applicable accounting standards; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | that the representations are based on a system of risk management and internal compliance and control relating to financial
reporting which implements the policies adopted by the Board, and that those systems are operating efficiently and effectively
in all material respects.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, management has reported to
the Board on the effectiveness of the Company’s management of its material business risks.



Internal audit



The Group does not have an Internal Auditor
due to the restructure and significant downsizing of the Group since fiscal year 2012.



Our risk management policy is included
in the Corporate Governance section of the Company’s website.



Committees of the Board of Directors



The Board has established two permanent
Board committees to assist the Board in the performance of its functions:



| | · | the Audit and Risk Management Committee; and
| | - | --------------------------------------------

| | · | the Remuneration and Nomination Committee.
| | - | ------------------------------------------



Each committee has a charter that sets
out its purpose and responsibilities. The committees are described further below.



The names of the members of the two committees
are set out in the directors’ report contained within the Company’s annual financial statements.



Audit and Risk Management Committee



The purpose of the Audit and Risk Management
Committee is to provide assistance to the Board in its review of:



| | · | Mission’s financial reporting, internal control structure and risk management systems’;
| | - | ---------------------------------------------------------------------------------------

| | · | the internal and external audit functions; and
| | - | ----------------------------------------------

| | · | Mission’s compliance with legal and regulatory requirements in relation to the above.
| | - | -------------------------------------------------------------------------------------



The Audit and Risk Management committee
has specific responsibilities in relation to Missions’ financial reporting process; the assessment of accounting, financial
and internal controls; the appointment of the external auditor; the assessment of the external audit; the independence of the external
auditor; and setting the scope of the external audit.



36







The Audit and Risk Management Committee
comprises two independent non–executive directors and one non-independent non–executive director that have diverse
and complementary backgrounds. The Chairman of the Audit and Risk Management Committee must be an independent non–executive
director.



Messrs. Datuk Zain Yusuf (Chairman), Mohd
Azlan and Tan Sri Anwar are members of the Audit and Risk Management Committee. The two independent non-executive members of the
Audit and Risk Management Committee satisfy the “independence” requirements of Rule 10A-3 under the Exchange Act.



Remuneration and Nomination Committee



The purpose of the Remuneration and Nomination
Committee is to discharge the Board’s responsibilities relating to the nomination and selection of directors and the compensation
of the Company’s executives and directors.



The key responsibilities of the Remuneration
and Nomination Committee are to:



| | · | ensure the establishment and maintenance of a formal and transparent procedure for the selection and appointment of new directors
to the Board; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | · | establish transparent and coherent remuneration policies and practices, which will enable Mission to attract, retain and motivate
executives and Directors who will create value for shareholders and to fairly and responsibly reward executives.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Remuneration and Nomination Committee
comprises two independent non–executive directors and one non-independent non–executive director. The Chairman of the
Remuneration and Nomination Committee must be an independent non–executive director.



Messrs. Tan Sri Anwar (Chairman), Datuk
Zain Yusuf, and Mohd Azlan are members of the Remuneration and Nomination Committee.



We have a remuneration policy that sets
out the terms and conditions for the Managing Director and other senior executives.



Mission Advisory Board



Mission has no Advisory Board.



Disclosure policy



Mission is committed to promoting investor
confidence and ensuring that shareholders and the market have equal access to information and are provided with timely and balanced
disclosure of all material matters concerning the Company. Additionally, Mission recognizes its continuous disclosure obligations
under the ASX Listing Rules and the Corporations Act. To assist with these matters, the Board has adopted a Continuous Disclosure
and Shareholder Communication Policy.



The Continuous Disclosure and Shareholder
Communication Policy allocates roles to the Board and management in respect of identifying material information and coordinating
disclosure of that information where required by the ASX Listing Rules.



The Policy also identifies authorized
company spokespersons and the processes Mission has adopted to communicate effectively with its shareholders. In addition to periodic
reporting, Mission will ensure that all relevant information concerning the Company is placed on its website.



Code of Conduct



The Board has created a framework for
managing the Company including internal controls, business risk management processes and appropriate ethical standards.



The Board has adopted practices for maintaining
confidence in the Company’s integrity including promoting integrity, trust, fairness and honesty in the way employees and
directors’ conduct themselves and Mission’s business, avoiding conflicts of interest and not misusing company resources.
A formal Code of Conduct has been adopted for all employees and directors of Mission.



37







Securities Trading Policy



A Securities Trading Policy has been adopted
by the Board to set a standard of conduct, which demonstrates Mission’s commitment to ensuring awareness of the insider trading
laws, and that employees and directors’ comply with those laws. The Securities Trading Policy imposes additional share trading
restrictions on Directors, the Company Secretary, executives and employees involved in monthly financial accounting processes (“specified
persons”).



Under the Securities Trading Policy, specified
persons are only permitted to buy and sell securities if they do not possess non–public price sensitive information and trading
occurs outside of specified restricted periods. These periods are the periods commencing on the first day of the month before the
end of the half–year or full year period and ending on the next business day after the announcement of the results for that
period. In addition, before a specified person can deal in Mission’s securities they must obtain clearance from the appropriate
officer, confirming that there is no reason why they cannot trade.



Ownership of Equity settled Options and Performance rights



There are no options or performance rights
at the date of this report.



| | D. | Employees.
| | -- | ----------



As of June 30, 2015, we had approximately
7 employees. The following table provides a breakdown of our employees by main category of activity and geographic location:



|                                                     |  | USA |   |  | Australia |  |   | Malaysia | 
|---------------------------------------------------- |  | --- | - |  | --------- |  | - | -------- | 
|Finance, legal and other administrative functions    |  |     | 0 |  |           |  | 2 |          | 
|Engineering, operations, R&D and information systems |  |     | 0 |  |           |  | 0 |          | 



Historic Employees



|For the fiscal year ended June 30, |  | USA |   |  | Australia |  |   | Malaysia |  |  | India | 
|---------------------------------- |  | --- | - |  | --------- |  | - | -------- |  |  | ----- | 
|2012                               |  |     | 1 |  |           |  | 1 |          |  |  | 7     | 
|2013                               |  |     | - |  |           |  | 2 |          |  |  | 6     | 
|2014                               |  |     |   |  |           |  | 2 |          |  |  | 6     | 
|2015                               |  |     | - |  |           |  | 2 |          |  |  | 5     | 



We believe that our relations with employees
are good and we have not experienced any significant labor stoppages or disputes. Our employees are not represented by labor unions
or covered by a collective bargaining agreement.



We typically enter into a standard confidentiality
and non-competition agreement with our management and research and development personnel. Each of these contracts includes a covenant
that prohibits the relevant personnel from engaging in any activities that compete with our business during his or her employment
with us and for two years after their employment with us.



Insurance



We have insurance policies covering all
normal aspects of our business inline with industry practices and the current state of operations.



We believe that our overall insurance coverage
is consistent with the market practice or the jurisdiction of operation. However, significant damage to any of our buildings, whether
as a result of fire or other causes, could have a material adverse effect on our results of operations. See “Risk Factors
— Risks Related to Our Business and Our Industry — We have limited insurance coverage and may incur losses resulting
from product liability claims, business interruption or natural disasters.” We also maintain appropriate Directors and Officers
Liability Insurance.



38







| | E. | Share Ownership.
| | -- | ----------------



The following table presents certain information
regarding the beneficial ownership of our ordinary shares based on total issued ordinary shares of 40,870,275 as of October 22,
2015 by:



| | • | each person known by us through substantial shareholder notices filed with the Australian Securities Exchange and SEC to be
the beneficial owner of more than 5% of our ordinary shares;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | each of our directors;
| | - | ----------------------



| | • | each of our named executive officers; and
| | - | -----------------------------------------



| | • | all of our current directors and executive officers as a group.
| | - | ---------------------------------------------------------------



|                                                             |  | Number ofShares |           |  | % of issued ordinary shares | 
|------------------------------------------------------------ |  | --------------- | --------- |  | --------------------------- | 
|Principal Shareholders                                       |  |                 |           |  |                             | 
|Muralidhar Menon                                             |  |                 | 5,000,000 |  |                             | 
|Kajaintharan Sithambaran                                     |  |                 | 5,000,000 |  |                             | 
|                                                             |  |                 |           |  |                             | 
|Directors and Executive Officers:                            |  |                 |           |  |                             | 
|Dato’ Nathan Mahalingam (1)                                  |  |                 | 5,612,956 |  |                             | 
|James Garton                                                 |  |                 | 5,112,051 |  |                             | 
|Guy Burnett                                                  |  |                 | 5,112,001 |  |                             | 
|Datuk Zain Yusuf                                             |  |                 | —         |  |                             | 
|Admiral (Ret) Tan Sri Dato’ Sri Mohd Anwar bin Haji Mohd Nor |  |                 | —         |  |                             | 
|Mohd Azlan Bin Mohammed (2)                                  |  |                 | 5,000,000 |  |                             | 



All directors and executive officers as a group



| | (1) | Includes
492,957 shares held by Mission Equities Sdn Bhd., a company which Dato’ Nathan Mahalingam, Mission NewEnergy’s Chief
Executive Officer, owns.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Held
by Karisma Inegrasi Sdn Bhd, which Mohd Azlan controls and is considered the beneficial owner of the shares it holds. .
| | --- | ----------------------------------------------------------------------------------------------------------------------------



Beneficial ownership is determined according
to the rules of the SEC and generally means that a person has beneficial ownership of a security if he or she possesses sole or
shared voting or investment power of that security, and includes options that are exercisable within 60 days. Information with
respect to beneficial ownership has been furnished to us by each director, executive officer or 5% or more shareholder, as the
case may be.



Unless otherwise indicated, to our knowledge,
each shareholder possesses sole voting and investment power over the ordinary shares listed, subject to community property laws
where applicable. None of our shareholders has different voting rights from other shareholders after the closing of this offer.



To the best of our knowledge, there have
not been any significant changes in the ownership of our ordinary shares by major shareholders over the past three years, except
the beneficial ownership of:



| | • | Muraldir Menon, Kajaintharan Sithambaran and Karisma Integrasi Sdn Bhd were each issued 5,000,000 shares on April 30, 2014.
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                            
| | • | Nathan Mahalingam, James Garton and Guy Burnett were each issued 5,000,000 shares on February 19, 2015.                    



As of October 23, 2015, we had forty four
holders of record in the United States with a combined holding of 3,929,409 shares, representing 9.61% of our total outstanding
shares as of that date.



39







Item 7. Major Shareholders and Related Party Transactions



| | A. | Major Shareholders and Related Party Transactions.
| | -- | --------------------------------------------------



See “Item 6.E—Directors,
Senior Management and Employees—Share Ownership.”



| | B. | Related Party Transactions.
| | -- | ---------------------------



Other than as disclosed below, from July
1, 2014 through to June 30, 2015, we did not enter into any transactions or loans between us and any (a) enterprises that directly
or indirectly through one or more intermediaries, control or are controlled by, or are under common control with us; (b) associates;
(c) individuals owning, directly or indirectly, an interest in our voting power that gives them significant influence over us,
and close members of any such individual’s family; (d) key management personnel and close members of such individuals’
families; or (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly by any person
described in (c) or (d) or over which such person is able to exercise significant influence. Refer to note 31 of the financial
statements included at the end of this report for details of any related party transactions.



Loans



From time to time, we have made loans to
or received loans from our wholly owned subsidiaries, including M2 Capital Sdn Bhd and Mission Biofuels Sdn Bhd. Loans are repaid
where possible and are given on interest free terms.



Management rights with subsidiaries



From time to time, we have been involved
in transactions with wholly owned and controlled subsidiaries. Such transactions between related parties are on commercial terms
and conditions no more favorable than those available to other parties.



| | C. | Interests of Experts and Counsel.
| | -- | ---------------------------------



Not applicable.



Item 8. Financial Information



| | A. | Consolidated Statements and Other Financial Information.
| | -- | --------------------------------------------------------



Our consolidated financial statements are
set out in Item 18 of this annual report.



Legal Proceedings



Other than disclosed below, we are not involved
in any significant legal proceedings.



A subsidiary within
the group holds money on deposit pending a determination by the courts as to whether this subsidiary must pay a contractor for
work performed under the EPCC contract to build the 250,000 tpa refinery. If the courts determine the amount is not to be paid
to the contractor, then this money will be paid to convertible note holders under a deferred payment agreement. This matter has
not been concluded at the date of this report.



Dividend Distributions



We have never declared or paid any cash
dividends on our ordinary shares and we do not anticipate paying any cash dividends in the foreseeable future. Our Board’s
current intention is to reinvest any income in the continued development and operation of our business.



Except as permitted by the Corporations
Act, under our Constitution dividends may only be paid out of our profits.



40







Payment of cash dividends, if any, in the
future will be at the discretion of our Board or, if our directors do not exercise their power to issue dividends, our shareholders
in a general meeting may exercise the powers.



Even if our Board decides to pay dividends,
the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial
conditions, contractual restrictions and other factors that the Board may deem relevant.



| | B. | Significant Changes.
| | -- | --------------------



Except as disclosed elsewhere and below
in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements
included in this annual report.



Item 9. The Offer and Listing



| | A. | Offer and Listing Details.
| | -- | --------------------------



|                                        |  | OTC Markets PinkSheets |       |  | NASDAQ |  |       | ASX  | 
|--------------------------------------- |  | ---------------------- | ----- |  | ------ |  | ----- | ---- | 
|                                        |  | High                   |       |  | Low    |  |       | High | 
|                                        |  | US$                    |       |  | US$    |  |       | US$  | 
|                                        |  |                        |       |  |        |  |       |      | 
|Fiscal year ended June 30, 2016         |  |                        |       |  |        |  |       |      | 
|First Quarter                           |  |                        | 0.02  |  |        |  | 0.02  |      | 
|Second Quarter (through November 6)     |  |                        | 0.05  |  |        |  | 0.05  |      | 
|June 30, 2015                           |  |                        |       |  |        |  |       |      | 
|First Quarter                           |  |                        | 0.02  |  |        |  | 0.01  |      | 
|Second Quarter                          |  |                        | 0.02  |  |        |  | 0.01  |      | 
|Third Quarter                           |  |                        | 0.16  |  |        |  | 0.01  |      | 
|Fourth quarter                          |  |                        | 0.12  |  |        |  | 0.03  |      | 
|June 30, 2014                           |  |                        |       |  |        |  |       |      | 
|First Quarter                           |  |                        | 0.02  |  |        |  | 0.01  |      | 
|Second Quarter                          |  |                        | 0.06  |  |        |  | 0.01  |      | 
|Third Quarter                           |  |                        | 0.03  |  |        |  | 0.01  |      | 
|Fourth quarter                          |  |                        | 0.02  |  |        |  | 0.01  |      | 
|Month ended                             |  |                        |       |  |        |  |       |      | 
|April 2015                              |  |                        | 0.03  |  |        |  | 0.03  |      | 
|May 2015                                |  |                        | 0.04  |  |        |  | 0.04  |      | 
|June 2015                               |  |                        | 0.02  |  |        |  | 0.02  |      | 
|July 2015                               |  |                        | 0.01  |  |        |  | 0.01  |      | 
|August 2015                             |  |                        | 0.02  |  |        |  | 0.02  |      | 
|September 2015                          |  |                        | 0.02  |  |        |  | 0.02  |      | 
|October 2015                            |  |                        | 0.06  |  |        |  | 0.04  |      | 
|November 2015 (through November 6 2015) |  |                        | 0.05  |  |        |  | 0.04  |      | 
|Fiscal year ended June 30,              |  |                        |       |  |        |  |       |      | 
|2015                                    |  |                        | 0.12  |  |        |  | 0.035 |      | 
|2014                                    |  |                        | 0.023 |  |        |  | 0.007 |      | 
|2013                                    |  |                        | 0.02  |  |        |  | 0.02  |      | 
|2012                                    |  |                        | 0.07  |  |        |  | 0.06  |      | 
|2011                                    |  |                        | -     |  |        |  | -     |      | 



The table above presents, for the periods
indicated, the high and low market prices for our ordinary shares reported on the ASX (symbol: “MBT”) and the NASDAQ
(symbol: MNEL) and the OTC Markets Pink Sheets (symbol: MNELF) for the periods indicated. Our ordinary shares were delisted from
trading on the Nasdaq on July 9, 2012. All prices for the ASX values are in Australian dollars and do not give effect to the 50-1
share consolidation that became effective on April 4, 2011. All prices for the NASDAQ and OTC are in US Dollars.



41







| | B. | Plan of Distribution.
| | -- | ---------------------



Not applicable.



| | C. | Markets.
| | -- | --------



See “Item 9.A—The Offer and Listing—Offer
and Listing Details.”



| | D. | Selling Shareholders.
| | -- | ---------------------



Not applicable.



| | E. | Dilution.
| | -- | ---------



Not applicable.



| | F. | Expenses of the Issue.
| | -- | ----------------------



Not applicable.



Item 10. Additional Information



| | A. | Share Capital.
| | -- | --------------



Not applicable.



| | B. | Memorandum and Articles of Association.
| | -- | ---------------------------------------



Our Constitution



We are a public company limited by shares
registered under the Corporations Act by the Australian Securities and Investments Commission, or ASIC. Our constituent document
is a Constitution, which is similar in nature to the by-laws of a company incorporated under the laws of a U.S. state. Our Constitution
does not provide for or prescribe any specific objectives or purposes of Mission NewEnergy. Our Constitution is subject to the
terms of the ASX Listing Rules and the Corporations Act. Our Constitution may be amended or repealed and replaced by special resolution
of shareholders, which is a resolution passed by at least 75% of the votes cast by shareholders entitled to vote on the resolution.



Under Australian law, a company has the
legal capacity and powers of an individual both inside and outside Australia. The material provisions of our Constitution are summarized
below. This summary is not intended to be complete, nor to constitute a definitive statement of the rights and liabilities of our
shareholders and is qualified in its entirety by reference to the Constitution, which is available on request.



Directors



Interested Directors



Except where permitted by the Corporations
Act, a director may not vote in respect of any contract or arrangement in which the director has, directly or indirectly, any material
interest according to our Constitution. Such director must not be counted in a quorum, must not vote on the matter and must not
be present at the meeting while the matter is being considered.



Unless a relevant exception applies, the
Corporations Act requires directors of Mission NewEnergy to provide disclosure of certain interests and prohibits directors of
companies listed on the ASX from voting on matters in which they have a material personal interest and from being present at the
meeting while the matter is being considered. In addition, the Corporations Act and the ASX Listing Rules require shareholder approval
of any provision of related party benefits to our directors.



42







Directors’ Compensation



Our directors are paid remuneration for
their services as directors, which is determined in a general meeting of shareholders. The aggregate, fixed sum for directors’
remuneration is to be divided among the directors in such proportion as the directors themselves agree, and in accordance with
our Constitution. The fixed sum remuneration for directors may not be increased except at a general meeting of shareholders and
the particulars of the proposed increase are required to have been provided to shareholders in the notice convening the meeting.
In addition, executive directors may be paid remuneration as employees of Mission NewEnergy.



Pursuant to our Constitution any director
who devotes special attention to our business or who otherwise performs services which in the opinion of our Board are outside
the scope of the ordinary duties of a director may be paid extra remuneration which is determined by the Board.



In addition to other remuneration provided
in our Constitution, all directors are entitled to be paid by us for reasonable travel accommodation and other expenses incurred
by the directors in attending company meetings, board meetings, committee meetings or while engaged on our business.



Additionally in accordance with our Constitution,
a director may be paid a retirement benefit as determined by the Board subject to the limits set out in the Corporations Act and
the ASX Listing Rules.



Borrowing Powers Exercisable by Directors



Pursuant to our Constitution, the management
and control of our business affairs are vested in our Board. The Board has the power to raise or borrow money. The Board may also
charge any of our property or business or any uncalled capital and may issue debentures or give any other security for any of our
debts, liabilities or obligations or of any other person, in each case, in the manner and on terms it deems fit.



Retirement of directors



Pursuant to our Constitution, one third
of directors other than the director who is the Chief Executive Officer, must retire from office at every annual general meeting.
If the number of directors is not a multiple of three then the number nearest to but not less than one third must retire from office.
The directors who retire in this manner are required to be the directors or director longest in office since last being elected.
A director, other than the director who is the Chief Executive Officer, must retire from office at the conclusion of the third
annual general meeting after which the director was elected.



Share Qualifications



Our Constitution provides that we may fix
a share qualification for our directors in general meeting. However, there are currently no requirements for directors to own our
shares in order to qualify as directors.



Rights and Restrictions on Classes of Shares



Subject to the Corporations Act and the
ASX Listing Rules, rights attaching to our shares are detailed in our Constitution. Our Constitution provides that any of our shares
may be issued with preferred, deferred or other special rights, whether in relation to dividends, voting, return of share capital,
payment of calls or otherwise as the Board may determine from time to time. Except as provided by contract or by our Constitution
to the contrary, all unissued shares are under the control of the Board which may grant options on the shares, allot or otherwise
dispose of the shares on the terms and conditions and for the consideration it deems fit. Currently our outstanding share capital
consists of only one class of ordinary shares.



Dividend Rights



The Board may from time to time determine
to pay dividends to shareholders. All unclaimed dividends may be invested or otherwise made use of by the Board for our benefit
until claimed or otherwise disposed of in accordance with our Constitution.



43







Voting Rights



Under our Constitution, each shareholder
has one vote determined by a show of hands at a meeting of the shareholders. On a poll vote each shareholder shall have one vote
for each fully paid share and a fractional vote for each share which is not fully paid, such fraction being equivalent to the proportion
of the amount which has been paid to such date on that share. Under Australian law, shareholders of a public company are not permitted
to approve corporate matters by written consent. Our Constitution does not provide for cumulative voting.



Right to Share in our Profits



Subject to the Corporations Act and pursuant
to our Constitution, our shareholders are entitled to participate in our profits only by payment of dividends. The Board may from
time to time determine to pay dividends to the shareholders, however no dividend is payable except out of our profits. A declaration
by the Board as to the amount of our profits is conclusive.



Rights to Share in the Surplus in the Event of Liquidation



Our Constitution provides for the right
of shareholders to participate in a surplus in the event of our liquidation. In certain circumstances, any division may be otherwise
than in accordance with the legal rights of the contributories, and in particular, any class may be given preferential or special
rights or may be excluded altogether or in part from participation in a surplus in the event of liquidation.



Redemption Provisions



There are no redemption provisions in our
Constitution in relation to ordinary shares. Under our Constitution and subject to the Corporations Act, any preference shares
may be issued on the terms that they are, or may at our option be, liable to be redeemed.



Sinking Fund Provisions



There are no sinking fund provisions in
our Constitution in relation to ordinary shares.



Liability for Further Capital Calls



According to our Constitution, the Board
may make any calls from time to time upon shareholders in respect of all monies unpaid on partly-paid shares, subject to the terms
upon which any of the partly-paid shares have been issued. Each shareholder is liable to pay the amount of each call in the manner,
at the time, and at the place specified by the Board. Calls may be made payable by installment.



Provisions Discriminating Against Holders of a Substantial
Number of Shares



There are no provisions under our Constitution
discriminating against any existing or prospective holders of a substantial number of our shares.



Variation of Share Rights



Our Constitution provides that, unless otherwise
provided by the terms of issue of the shares of such class, the rights attaching to any class of shares may, subject to the ASX
Listing Rules, be varied with the consent in writing of members with at least 75% of the votes in the class or with the sanction
of a special resolution passed at a separate meeting of the holders of the shares of such class. These conditions are not more
significant than that required by the Corporations Act.



General Meetings of Shareholders



General meetings of shareholders may be
called by the Board. Except as permitted under the Corporations Act, shareholders may not convene a meeting. Under the Corporations
Act, shareholders with at least 5% of the votes which may be cast at a general meeting may call and arrange to hold a general meeting.
The Corporations Act requires the directors to call and arrange to hold a general meeting on the request of shareholders with at
least 5% of the votes that may be cast at a general meeting or at least 100 shareholders who are entitled to vote at the general
meeting. Twenty-eight days notice of the proposed meeting of our shareholders is required under the Corporations Act.



44









According to our Constitution, the chairman
of the general meeting may refuse admission to or exclude from the meeting, any person who is in possession of a picture recording
or sound recording device, in possession of a placard or banner, in possession of an object considered by the chairman to be dangerous,
offensive or liable to cause disruption, any person who refuses to produce or permit examination of any object, any person who
behaves or threatens to behave in a dangerous, offensive or destructive manner, or any person who is not a director or one of our
auditors, one of our shareholders or a proxy, attorney or representative of one of our shareholders.



Foreign Ownership Regulation



There are no limitations on the rights to
own securities imposed by our Constitution. However, acquisitions and proposed acquisitions of shares in Australian companies may
be subject to review and approval by the Australian Federal Treasurer under the Foreign Acquisitions and Takeovers Act 1975 (Commonwealth
of Australia). Generally this Act applies to acquisitions or proposed acquisitions:



| | • | by a foreign person, as defined in the Foreign Acquisitions and Takeovers Act, or associated foreign persons which would result in such persons having an interest in 15% or more of the issued shares of, or control of 15% or more of the voting power in, an Australian company; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | by non-associated foreign persons which would result in such foreign person having an interest in 40% or more of the issued shares of, or control of 40% or more of the voting power in, an Australian company.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Australian Federal Treasurer may prevent
a proposed acquisition in the above categories or impose conditions on such acquisition if the Treasurer is satisfied that the
acquisition would be contrary to the national interest. If a foreign person acquires shares or an interest in shares in an Australian
company in contravention of the Act, the Australian Federal Treasurer may order the divestiture of such person’s shares orinterest
in shares in the company. The Australian Federal Treasurer may order divestiture pursuant to the Act if he determines that the
acquisition has resulted in that foreign person, either alone or together with other non-associated or associated foreign persons,
controlling the company and that such control is contrary to the national interest.



Ownership Threshold



There are no provisions in our Constitution
that require a shareholder to disclose ownership above a certain threshold. The Corporations Act, however, requires a substantial
shareholder to notify us and the Australian Securities Exchange once a 5% interest in our shares is obtained. Further, once a shareholder
owns a 5% interest in us, such shareholder must notify us and the Australian Securities Exchange of any increase or decrease of
1% or more in its holding of our shares. Such major shareholders are also required to file a notice with the SEC on Schedule 13D
or Schedule 13G.



Issues of shares and Change in Capital



Subject to our Constitution, the Corporations
Act, the ASX Listing Rules and any other applicable law, we may at any time issue shares and grant options or warrants on any terms,
with preferred, deferred or other special rights and restrictions and for the consideration and other terms that the directors
determine. Our power to issue shares includes the power to issue bonus shares (for which no consideration is payable to Mission
NewEnergy), preference shares and partly paid shares.



Subject to the requirements of our Constitution,
the Corporations Act, the ASX Listing Rules and any other applicable law, including relevant shareholder approvals, we may consolidate
or divide our share capital into a larger or smaller number by resolution, reduce our share capital (provided that the reduction
is fair and reasonable to our shareholders as a whole, and does not materially prejudice our ability to pay creditors) or buy-back
our shares whether under an equal access buy-back or on a selective basis.



Change of Control



Takeovers of listed Australian public companies,
such as Mission NewEnergy, are regulated by, amongst other things, the Corporations Act which prohibits the acquisition of a relevant
interest in issued voting shares in a listed company if the acquisition will lead to that person’s or someone else’s
voting power in the company increasing from 20% or below to more than 20% or increasing from a starting point that is above 20%
and below 90%, subject to a range of exceptions.



45







Generally, and without limitation, a person
will have a relevant interest in securities if they:



| | • | are
the holder of the securities;
| | - | ---------------------------------



| | • | have power to exercise, or control the exercise of, a right to vote attached to the securities; or
| | - | --------------------------------------------------------------------------------------------------



| | • | have the power to dispose of, or control the exercise of a power to dispose of, the securities (including any indirect or direct power or control).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------



If at a particular time a person
has a relevant interest in issued securities and the person:



| | • | has entered or enters into an agreement with another person with respect to the securities;
| | - | -------------------------------------------------------------------------------------------



| | • | has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to the securities; or
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | has granted or grants an option to, or has been or is granted an option by, another person with respect to the securities,
| | - | --------------------------------------------------------------------------------------------------------------------------

and the other person would have a relevant interest in the securities
if the agreement were performed, the right enforced or the option exercised, the other person is taken to already have a relevant
interest in the securities.



There are a number of exceptions to the
above prohibition on acquiring a relevant interest in issued voting shares above 20%. In general terms, some of the more significant
exceptions include:



| | • | when the acquisition results from the acceptance of an offer under a formal takeover bid;
| | - | -----------------------------------------------------------------------------------------



| | • | when the acquisition is conducted on market by or on behalf of the bidder under a takeover bid and the acquisition occurs during the bid period;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | • | when shareholders of the company approve the takeover by resolution passed at general meeting;
| | - | ----------------------------------------------------------------------------------------------



| | • | an acquisition by a person if, throughout the 6 months before the acquisition, that person, or any other person, has had voting power in the company of at least 19% and as a result of the acquisition, none of the relevant persons would have voting power in the company more than 3 percentage points higher than they had 6 months before the acquisition;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | as a result of a rights issue;
| | - | ------------------------------



| | • | as a result of dividend reinvestment schemes;
| | - | ---------------------------------------------



| | • | as a result of underwriting arrangements;
| | - | -----------------------------------------



| | • | through operation of law;
| | - | -------------------------



| | • | an acquisition which arises through the acquisition of a relevant interest in another listed company;
| | - | -----------------------------------------------------------------------------------------------------



| | • | arising from an auction of forfeited shares; or
| | - | -----------------------------------------------



| | • | arising through a compromise, arrangement, liquidation or buy-back.
| | - | -------------------------------------------------------------------



Breaches of the takeovers provisions of
the Corporations Act are criminal offences. ASIC and the Australian Takeover Panel have a wide range of powers relating to breaches
of takeover provisions including the ability to make orders canceling contracts, freezing transfers of, and rights attached to,
securities, and forcing a party to dispose of securities. There are certain defenses to breaches of the takeovers provisions provided
in the Corporations Act.



Proportional Takeovers



Our Constitution indicates that where offers
to purchase our shares have been made under a proportional takeover scheme, we are prohibited from registering, other than where
a transfer is effected in accordance with the takeover provisions (if any) under the ASTC Settlement Rules, a transfer which would
give effect to the contract resulting from the acceptance of such an offer unless and until a resolution to approve the proportional
takeover scheme is approved at a meeting by the persons entitled to vote on such resolution. The offeror or an associate of the
offeror is not entitled to vote on such resolution. A person, other than an offeror or associate of the offeror, who, as at the
end of the day in which the first offer under the proportional takeover scheme was made, held shares in that class of shares, is
entitled to one vote for each of the shares held in that class.



46







Access to and Inspection of Documents



Inspection of our records is governed by the
Corporations Act. Any member of the public has the right to inspect or obtain copies of our registers on the payment of a prescribed
fee. Shareholders are not required to pay a fee for inspection of our registers or minute books of the meetings of shareholders.
Other corporate records including minutes of directors meetings, financial records and other documents are not open for inspection
by shareholders. Where a shareholder is acting in good faith and an inspection is deemed to be made for a proper purpose, a shareholder
may apply to the court to make an order for inspection of our books.



| | C. | Material Contracts.
| | -- | -------------------



We have not entered into any material contracts
other than in the ordinary course of business and other than those described in “Item 4—Information on the Company”
or elsewhere in this annual report on Form 20-F.



| | D. | Exchange Controls.
| | -- | ------------------



Under existing Australian legislation, the Reserve
Bank of Australia does not prohibit the import and export of funds, and generally no governmental permission is required for us
to move funds in and out of Australia. However, for the movement of funds to and from “tax havens,” as specified by
current regulations, a tax clearance certificate must be obtained. The United States is not a declared tax haven. Accordingly,
at the present time, remittances of any dividends, interest or other payments by us to non-resident holders of our securities in
the United States are not restricted by exchange controls.



| | E. | Taxation.
| | -- | ---------



The following is a summary of material U.S.
federal and Australian income tax considerations to U.S. holders, as defined below, of the acquisition, ownership and disposition
of ordinary shares. This discussion is based on the laws in force as at the date of this annual report, and is subject to changes
in the relevant income tax law, including changes that could have retroactive effect. The following summary does not take into
account or discuss the tax laws of any country or other taxing jurisdiction other than the United States and Australia. Holders
are advised to consult their tax advisors concerning the overall tax consequences of the acquisition, ownership and disposition
of ordinary shares in their particular circumstances. This discussion is not intended, and should not be construed, as legal or
professional tax advice.



This summary does not describe U.S. federal
estate and gift tax considerations, or any state and local tax considerations within the United States, and is not a comprehensive
description of all U.S. federal or Australian income tax considerations that may be relevant to a decision to acquire or dispose
of ordinary shares. Furthermore, this summary does not address U.S. federal or Australian income tax considerations relevant to
holders subject to taxing jurisdictions other than or in addition to the United States and Australia, and does not address all
possible categories of holders, some of which may be subject to special tax rules.



U.S. Federal Income Tax Considerations



In this section, we discuss material U.S. federal
income tax considerations applicable to an investment in ordinary shares by a U.S. holder, as defined below, that will hold the
ordinary shares as capital assets within the meaning of Section 1221 of the Code. We do not discuss the tax consequences to any
particular holder nor any tax considerations that may apply to holders subject to special tax rules, such as banks, insurance companies,
individual retirement and other tax-deferred accounts, regulated investment companies, individuals who are former U.S. citizens
or former long-term U.S. residents, dealers in securities or currencies, tax-exempt entities, persons subject to the alternative
minimum tax, persons that hold ordinary shares as a position in a straddle or as part of a hedging, constructive sale or conversion
transaction for U.S. federal income tax purposes, persons that have a functional currency other than the U.S. dollar, persons that
own (directly, indirectly or constructively) 10% or more of our equity or persons that are not U.S. holders.



In this section, a “U.S. holder”
means a beneficial owner of ordinary shares that is, for U.S. federal income tax purposes:



| | · | an individual who is a citizen or resident of the United States for U.S. federal income tax purposes;
| | - | -----------------------------------------------------------------------------------------------------



47









| | · | a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
| | - | -----------------------------------------------------------------------------------------------------



| | · | a trust (i) the administration of which is subject to the primary supervision of a court in the United States and for which one or more U.S. persons have the authority to control all substantial decisions or (ii) that has an election in effect under applicable income tax regulations to be treated as a U.S. person.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As used in this section, a “non-U.S. holder”
is a beneficial owner of ordinary shares that is not a U.S. holder or an entity or arrangement treated as a partnership for U.S.
federal income tax purposes.



If an entity or arrangement treated as a partnership
for U.S. federal income tax purposes holds ordinary shares, the U.S. federal income tax treatment of a partner generally will depend
on the status of the partner and the activities of the partnership. Partners of partnerships that will hold ordinary shares should
consult their tax advisors.



You are urged to consult your own tax
advisor with respect to the U.S. federal, as well as state, local and non-U.S., tax consequences to you of acquiring, owning and
disposing of ordinary shares in light of your particular circumstances, including the possible effects of changes in U.S. federal
and other tax laws.



Dividends



Subject to the passive foreign investment company
rules, discussed below, U.S. holders will include as dividend income the U.S. dollar value of the gross amount of any distributions
of cash or property (without deduction for any withholding tax), other than certain pro rata distributions of ordinary shares,
with respect to ordinary shares to the extent the distributions are made from our current or accumulated earnings and profits,
as determined for U.S. federal income tax purposes. A U.S. holder will include the dividend income at the time of receipt. To the
extent, if any, that the amount of any distribution by us exceeds our current and accumulated earnings and profits, as so determined,
the excess will be treated first as a tax-free return of the U.S. holder’s tax basis in the ordinary shares and thereafter
as capital gain. Notwithstanding the foregoing, we do not intend to maintain calculations of earnings and profits, as determined
for U.S. federal income tax purposes. Consequently, any distributions generally will be reported as dividend income for U.S. information
reporting purposes. See “Backup Withholding Tax and Information Reporting” below. Dividends paid by us will not be
eligible for the dividends-received deduction generally allowed to U.S. corporate shareholders.



Subject to the passive foreign investment company
rules, certain dividends received by an individual U.S. holder (as well as certain trusts and estates) from a “qualified
foreign corporation” are eligible for a preferential U.S. federal income tax rate (20%), subject to certain minimum holding
period requirements and other limitations. A foreign corporation may be a “qualified foreign corporation” if (it is
eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S. Secretary of Treasury determines
is satisfactory for this purpose and which includes an exchange of information program. We expect to be considered a qualified
foreign corporation with respect to our ordinary shares because we believe we are eligible for the benefits under the Double Taxation
Convention between Australia and the United States. Accordingly, dividends we pay generally should be eligible for the reduced
income tax rate. However, the determination of whether a dividend qualifies for the preferential tax rates must be made at the
time the dividend is paid. U.S. holders should consult their own tax advisers.



Includible distributions paid in Australian
dollars, including any Australian withholding taxes, will be included in the gross income of a U.S. holder in a U.S. dollar amount
calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the
Australian dollars are converted into U.S. dollars at that time. If Australian dollars are converted into U.S. dollars on the date
of actual or constructive receipt, the tax basis of the U.S. holder in those Australian dollars will be equal to their U.S dollar
value on that date and, as a result, a U.S. holder generally should not be required to recognize any foreign exchange gain or loss.



If Australian dollars so received are not converted
into U.S. dollars on the date of receipt, the U.S. holder will have a basis in the Australian dollars equal to their U.S. dollar
value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the Australian dollars generally
will be treated as ordinary income or loss to such U.S. holder and generally such gain or loss will be income or loss from sources
within the United States for foreign tax credit limitation purposes.



48









Dividends received by a U.S. holder with respect
to ordinary shares will be treated as foreign source income, which may be relevant in calculating the holder’s foreign tax
credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes
of income. For these purposes, dividends will be categorized as “passive” or “general” income depending
on a U.S. holder’s circumstance.



Subject to certain complex limitations, a U.S.
holder generally will be entitled, at its option, to claim either a credit against its U.S. federal income tax liability or a deduction
in computing its U.S. federal taxable income in respect of any Australian taxes withheld by us. If a U.S. holder elects to claim
a deduction, rather than a foreign tax credit, for Australian taxes withheld by us for a particular taxable year, the election
will apply to all foreign taxes paid or accrued by or on behalf of the U.S. holder in the particular taxable year.



The availability of the foreign tax credit and
the application of the limitations on its availability are fact specific. You are urged to consult your own tax advisor as to the
consequences of Australian withholding taxes and the availability of a foreign tax credit or deduction. See “Australian Tax
Considerations — Taxation of Dividends.”



Sale or Exchange of Ordinary Shares



Subject to the passive foreign investment company
rules, discussed below, a U.S. holder generally will, for U.S. federal income tax purposes, recognize capital gain or loss on a
sale, exchange or other disposition of ordinary shares equal to the difference between the amount realized on the disposition and
the U.S. holder’s tax basis in the ordinary shares. This gain or loss recognized on a sale, exchange or other disposition
of ordinary shares will generally be long-term capital gain or loss if the U.S. holder has held the ordinary shares for more than
one year. Generally, for U.S. holders who are individuals (as well as certain trusts and estates), long-term capital gains are
subject to U.S. federal income tax at preferential rates. For foreign tax credit limitation purposes, gain or loss recognized upon
a disposition generally will be treated as from sources within the United States. The deductibility of capital losses is subject
to limitations for U.S. federal income tax purposes.



You should consult your own tax advisor regarding
the availability of a foreign tax credit or deduction in respect of any Australian tax imposed on a sale or other disposition of
ordinary shares. See “Australian Tax Considerations — Tax on Sales or other Dispositions of Shares.”



Passive Foreign Investment Company Considerations



The Code provides special, generally adverse,
rules regarding certain distributions received by U.S. holders with respect to, and sales, exchanges and other dispositions, including
pledges, of shares of stock of, a passive foreign investment company, or PFIC. A foreign corporation will be treated as a PFIC
for any taxable year if at least 75% of its gross income for the taxable year is passive income or at least 50% of its gross assets
during the taxable year, based on a quarterly average and generally by value, produce or are held for the production of passive
income. Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties, gains from
commodities and securities transactions and gains from assets that produce passive income. In determining whether a foreign corporation
is a PFIC, a pro-rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a
25% interest (by value) is taken into account.



The determination of whether or not we are a
PFIC is a factual determination that must be determined annually at the close of each taxable year. Based on our business results
for the last fiscal year and composition of our assets, we believe that we may be a PFIC for U.S. federal income tax purposes for
the taxable year ended June 30, 2015. Similarly, based on our business projections and the anticipated composition of our assets
for the current and future years, we may be a PFIC for the taxable year ended June 30, 2016. It is also possible that we may become
a PFIC in any future taxable year.



If we are a PFIC for any taxable year during
which a U.S. holder holds ordinary shares, any “excess distribution” that the holder receives and any gain realized
from a sale or other disposition (including a pledge) of such ordinary shares will be subject to special tax rules, unless the
holder makes a mark-to-market election or qualified electing fund election as discussed below. Any distribution in a taxable year
that is greater than 125% of the average annual distribution received by a U.S. holder during the shorter of the three preceding
taxable years or such holder’s holding period for the ordinary shares will be treated as an excess distribution. Under these
special tax rules:



49









| | · | the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period for the ordinary shares;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the amount allocated to each other year will be subject to income tax at the highest rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The tax liability for amounts allocated to years
prior to the year of disposition or excess distribution cannot be offset by any net operating loss, and gains (but not losses)
realized on the transfer of the ordinary shares cannot be treated as capital gains, even if the ordinary shares are held as capital
assets. In addition, non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from
us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.



If we are a PFIC for any taxable year during
which any of our non-United States subsidiaries is also a PFIC, a U.S. holder of ordinary shares during such year would be treated
as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules
to such subsidiary. You should consult your tax advisors regarding the tax consequences if the PFIC rules apply to any of our subsidiaries.



Unless otherwise provided by the U.S. Treasury,
each U.S. shareholder of a PFIC is required to file a Form 8621 and such other form as the U.S. Treasury may require. If we are
or become a PFIC, you should consult your tax advisors regarding any reporting requirements that may apply to you as a result of
our status as a PFIC.



A U.S. holder may avoid some of the adverse
tax consequences of owning shares in a PFIC by making a “qualified electing fund” election. The availability of this
election with respect to our ordinary shares requires that we provide information to shareholders making the election. We do not
intend to provide you with the information you would need to make or maintain a qualified electing fund election and you will,
therefore, not be able to make such an election with respect to your ordinary shares.



Alternatively, a U.S. holder owning marketable
stock in a PFIC may make a mark-to-market election to elect out of the tax treatment discussed above. If a valid mark-to-market
election for the ordinary shares is made, the electing U.S. holder will include in income each year an amount equal to the excess,
if any, of the fair market value of the ordinary shares as of the close of the holder’s taxable year over the adjusted basis
in such ordinary shares. The U.S. holder is allowed a deduction for the excess, if any, of the adjusted basis of the ordinary shares
over their fair market value as of the close of the holder’s taxable year. Deductions are allowable, however, only to the
extent of any net mark-to-market gains on the ordinary shares included in the U.S. holder’s income for prior taxable years.
Amounts included in the U.S. holder’s income under a mark-to-market election, as well as gain on the actual sale or other
disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion
of any mark-to-market loss on the ordinary shares, as well as to any loss realized on the actual sale or disposition of the ordinary
shares, to the extent the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary
shares. The tax basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. A mark-to-market election
will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ordinary shares
are no longer regularly traded on an applicable exchange or the Internal Revenue Service (“IRS”) consents to the revocation
of the election.



The mark-to-market election is available only
for stock which is regularly traded on (i) a national securities exchange that is registered with the U.S. Securities and Exchange
Commission, (ii) NASDAQ, or (iii) an exchange or market that the U.S. Secretary of the Treasury determines has rules sufficient
to ensure that the market price represents a legitimate and sound fair market value. Our ordinary shares are listed on the ASX
and, consequently, we expect that, assuming the ordinary shares are so listed and are regularly traded, the mark-to-market election
would be available to you were we to be or become a PFIC.



50









U.S. holders are urged to contact their own
tax advisors regarding the determination of whether we are a PFIC and the tax consequences of such status.



Net Investment Income Tax



Certain U.S. Holders who are individuals, estates,
or trusts must pay a 3.8% tax on, among other things, dividends and capital gains from the sale or other disposition of shares
of common stock.



Backup Withholding Tax and Information Reporting Requirements



U.S. holders that are “exempt recipients”
(such as corporations) generally will not be subject to U.S. backup withholding tax and related information reporting requirements
on payments of dividends on, and the proceeds from the disposition of, ordinary shares unless, when required, they fail to demonstrate
their exempt status. Other U.S. holders (including individuals) generally will be subject to U.S. backup withholding tax at the
applicable statutory rate, currently 28%, in respect of any payments of dividends on, and the proceeds from the disposition of,
ordinary shares if they fail to furnish their correct taxpayer identification number or otherwise fail to comply with applicable
backup withholding requirements. Information reporting requirements generally will apply to payments of dividends on, and the proceeds
from the disposition of, ordinary shares to a U.S. holder that is not an exempt recipient. U.S. holders who are required to establish
their exempt status generally must provide IRS Form W-9 (Request for Taxpayer Identification Number and Certification).



Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against a U.S. holder’s U.S. federal income tax liability. A U.S.
holder may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the Internal Revenue Service in a timely manner and furnishing any required information.



U.S. holders are urged to contact their own
tax advisors as to their qualification for an exemption from backup withholding tax and the procedure for obtaining this exemption.



Certain U.S. Holders who are individuals may
be required to report information relating to an interest in our ordinary shares, subject to certain exceptions. U.S. Holders are
urged to consult their tax advisers regarding their reporting obligation in connection with their ownership and disposition of
our ordinary shares.



The discussion above is not intended to
constitute a complete analysis of all tax considerations applicable to an investment in ordinary shares. You should consult with
your own tax advisor concerning the tax consequences to you in your particular situation.



Australian Tax Considerations



In this section, we discuss the material Australian
income tax considerations related to the acquisition, ownership and disposal by the absolute beneficial owners of the ordinary
shares. This discussion does not address all aspects of Australian income tax law which may be important to particular investors
in light of their individual investment circumstances, such as shares held by investors subject to special tax rules (for example,
financial institutions, insurance companies or tax exempt organizations). In addition, this summary does not discuss any foreign
or state tax considerations, other than transfer duty. Prospective investors are urged to consult their tax advisors regarding
the Australian and foreign income and other tax considerations of the purchase, ownership and disposition of the shares. This summary
is based upon the premise that the holder is not an Australian tax resident.



Taxation of Dividends



Australia operates a dividend imputation system
under which dividends may be declared to be ‘franked’ to the extent of tax paid on company profits. Fully franked dividends
are not subject to dividend withholding tax. Dividends payable to non-Australian resident shareholders that are not operating from
an Australian permanent establishment (Foreign Shareholders) will be subject to dividend withholding tax, to the extent the dividends
are not foreign sourced and declared to be conduit foreign income (CFI) and are unfranked. Dividend withholding tax will be imposed
at 30%, unless a shareholder is a resident of a country with which Australia has a double taxation agreement and qualifies for
the benefits of the treaty. Under the provisions of the current Double Taxation Convention between Australia and the United States,
the Australian tax withheld on unfranked dividends that are not CFI paid by us to which a resident of the United States is beneficially
entitled is limited to 15%.



51









If a company that is a non-Australian resident
shareholder owns a 10% or more interest, the Australian tax withheld on dividends paid by us to which a resident of the United
States is beneficially entitled is limited to 5%. In limited circumstances the rate of withholding can be reduced to nil.



Tax on Sales or other Dispositions of Shares — Capital
gains tax



Foreign Shareholders will not be subject to
Australian capital gains tax on the gain made on a sale or other disposal of our shares, unless they, together with associates,
hold 10% or more of our issued capital, at the time of disposal or for 12 months of the last 2 years.



Foreign Shareholder who, together with associates,
owns a 10% or more interest would be subject to Australian capital gains tax if more than 50% of our direct or indirect assets
determined by reference to market value, consists of Australian land, leasehold interests or Australian mining, quarrying or prospecting
rights. Double Taxation Convention between the United States and Australia is unlikely to limit the amount of this taxable gain.
Australian capital gains tax applies to net capital gains at a taxpayer’s marginal tax rate but for certain shareholders
a discount of the capital gain may apply if the shares have been held for 12 months or more. For individuals, this discount is
50%7. Net capital gains are calculated after reduction
for capital losses, which may only be offset against capital gains.



Tax on Sales or other Dispositions of Shares — Shareholders
Holding Shares on Revenue Account



Some Foreign shareholders may hold shares on
revenue rather than on capital account, for example, share traders. These shareholders may have the gains made on the sale or other
disposal of the shares included in their assessable income under the ordinary income provisions of the income tax law, if the gains
are sourced in Australia.



Non-Australian resident shareholders assessable
under these ordinary income provisions in respect of gains made on shares held on revenue account would be assessed for such gains
at the Australian tax rates for non-Australian residents, which start at a marginal rate of 32.5%. Some relief from Australian
income tax may be available to such non-Australian resident shareholders under the Double Taxation Convention between the United
States and Australia.



To the extent an amount would be included in
a non-Australian resident shareholder’s assessable income under both the capital gains tax provisions and the ordinary income
provisions, the capital gain amount would generally be reduced, so that the shareholder would not be subject to double tax on any
part of the income gain or capital gain.



Dual Residency



If a shareholder were a resident of both Australia
and the United States under those countries’ domestic taxation laws, that shareholder may be subject to tax as an Australian
resident. If, however, the shareholder is determined to be a U.S. resident for the purposes of the Double Taxation Convention between
the United States and Australia, the Australian tax would be subject to limitation by the Double Taxation Convention. Shareholders
should obtain specialist taxation advice in these circumstances.



Transfer Duty



No transfer duty is payable by Australian residents
or foreign residents on the trading of shares that are quoted on the ASX or NASDAQ/OTC.










7 Note that
this is subject to proposed legislation to remove the discount for non-resident shareholders with effect from May 8, 2012.



52









Australian Death Duty



Australia does not have estate or death duties.
As a general rate, no capital gains tax liability is realized upon the inheritance of a deceased person’s shares. The disposal
of inherited shares by beneficiaries, may, however, give rise to a capital gains tax liability if the gain falls within the scope
of Australia’s jurisdiction to tax (as discussed above).



Goods and Services Tax



The issue or transfer of shares will not incur
Australian goods and services tax.



| | F. | Dividends and Paying Agents.
| | -- | ----------------------------



Not applicable.



| | G. | Statement by Experts.
| | -- | ---------------------



Not applicable.



| | H. | Documents on Display.
| | -- | ---------------------



We are subject to the periodic reporting and
other informational requirements of the Exchange Act as applicable to foreign private issuers. Under the Exchange Act, we are required
to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC
is available through the SEC’s Electronic Data Gathering, Analysis and Retrieval system (EDGAR), which may be accessed through
the SEC’s website at www.sec.gov. Information filed with the SEC may also be inspected and copied at the public reference
room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents upon payment
of a duplicating fee, by writing to the SEC. Please visit the SEC’s website at www.sec.gov for further information on the
SEC’s public reference room.



As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive
officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act.



| | I. | Subsidiary Information
| | -- | ----------------------



Not applicable.



Item 11. Quantitative and Qualitative Disclosures About Market
Risk



Our business activities are exposed to a variety
of market risks, including credit risk, foreign currency risk, interest rate risk and commodity risk.



Credit Risk



There is no credit risk for receivables at June
30, 2015 in the refining operations.



Foreign Exchange Risk



The Group operates internationally through a
number of subsidiaries and is thus exposed to fluctuations in foreign currencies, arising from the foreign currencies held in its
bank accounts, the sale of goods in currencies other than the Group’s measurement currency, and the translation of results
from investments in foreign operations. The foreign exchange exposures are primarily to the Malaysian Ringgit and the US dollar.



Foreign exchange risks arising from the sale
of products may be hedged using forward exchange contracts.



53







Foreign currency risks arising from commitments
in foreign currencies are managed by holding cash in that currency. Foreign currency translation risk is not hedged, with translation
differences being reflected in the foreign currency translation reserve.



Group sensitivity



At June 30, 2015, if foreign currencies had
changed by -/+ 10%, with all other variables held constant, the following financial impacts would have been recorded by the Group:



Effect on cash and cash equivalent – A$
0.02 million lower/ A$0.15 million higher (2014:A$ 0.04 million lower/ A$0.05 million higher)



Profit and Loss would have been – A$ 0.02
million lower/ A$0.15 million higher (2014:A$ 0.04 million lower/ A$0.05 million higher)



Hedging of Foreign Currency Risk



At financial report date the Group had no forward
exchange contracts in place.



Interest Rate Risk



Interest rate risk has historically been managed
with a mixture of fixed and floating rate deposits, fixed rate convertible note debt and floating rate debt. For further details
on interest rate risk refer to the table below under liquidity risk. The Group’s main interest rate risk, being cash flow
interest rate risk, arose from the convertible note loan. The group has no debt at June 30, 2015.



Group sensitivity



At June 30, 2015, if interest rates had changed
by -/+ 25 basis points, with all other variables held constant, the following financial impacts would have been recorded by the
Group:



Effect on post tax profit – A$ Nil million
lower/higher (2014: A$ Nil million lower/higher)



Equity would have been – A$ Nil million
lower/higher (2014: A$ Nil million lower/higher)



Commodity Risk



As there was no inventory held as at June 30,
2015, the Group has no exposure to market prices of input costs into the production of biodiesel.



Item 12. Description of Securities Other than Equity Securities



| | A. | Debt Securities.
| | -- | ----------------



Not applicable.



| | B. | Warrants and Rights.
| | -- | --------------------



Not applicable.



| | C. | Other Securities.
| | -- | -----------------



Not applicable.



| | D. | American Depositary Shares.
| | -- | ---------------------------



Not applicable.



54









PART II



Item 13. Defaults, Dividend Arrearages and Delinquencies



None.





Item 14. Material Modifications to the Rights of Security Holders
and Use of Proceeds



A.-D. Material Modifications to the Rights
of Security Holders.



None.



| | E. | Use of Proceeds.
| | -- | ----------------



The following “Use of Proceeds”
information relates to our initial U.S. public offering of 2,785,000 ordinary shares at a public offering price of US$9.00 per
share, thereby raising gross proceeds of approximately US$25.1 million. The registration statement on Form F-1 (File No. 333-170471)
for our initial public offering was declared effective by the SEC on April 19, 2011. On April 26, 2011, we completed our public
offering after 2,785,000 ordinary shares were sold. Chardan Capital Markets, LLC, Rodman & Renshaw, LLC, Maxim Group LLC and
Northland Capital Markets were the underwriters for our initial public offering. We received net proceeds (after deducting underwriting
discounts and commissions and other expenses related to the offering) of approximately $US22,228,504. None of the above expenses
included direct or indirect payments to directors or officers of our company or their associates, persons owning 10% or more of
our equity securities or our affiliates. The underwriters did not exercise their overallotment option.



From April 19, 2011, effective date of our registration
statement on Form F-1 for the offering, to June 30, 2011, we used approximately US$0.8 million proceeds for the expansion of our
feedstock operations, including but not limited to Jatropha acreage expansion, approximately US$2.1 million for general corporate
and convertible note coupon purposes, and as of June 30, 2011, we had approximately $16.7 million left from the net proceeds of
the offering. Approximately US$8.8 million of the cash at June 30, 2011 was held in the refining segment to meet working capital
needs. In 2012 the Group used A$4.9m for operations, A$4.0 million for capital expenditure and advances to related entities and
A$5.5 million for debt redemption. We had A$1.5 million in cash on hand at June 30, 2012. In 2013 the Group used A$3.7m for operations,
released A$2.3 million from sale of capital items and raised a net A$1.4 million from debt facilities. We had A$1.4 million in
cash on hand at June 30, 2013. During fiscal 2014 the Group utilized a US$5 million funding facility to meet operating costs until
the two refineries were sold, at which stage the working capital facility was settled, convertible note debt paid down and the
balance retained for ongoing working capital and investment uses.



None of the net proceeds from our initial public
offering were paid directly or indirectly to directors or officers of our company or their associates, persons owning 10% or more
of our equity securities or our affiliates.



Item 15. Controls and Procedures



| | A. | Disclosure Controls and Procedures.
| | -- | -----------------------------------



Under the supervision and with the participation
of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness
of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Exchange Act), as of June 30, 2015.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed
by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including
the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussions regarding required disclosure.





55









| | B. | Management’s Annual Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public
Accounting Firm.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------





Management of the Company is responsible for
establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with applicable generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors
of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of the company’s assets that could have a material effect on the financial statements.



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree
of compliance with the policies or procedures may deteriorate.



The Company’s management has evaluated
the effectiveness of the Company’s internal control over financial reporting as of June 30, 2015 based upon criteria established in Internal Control Integrated Framework (1992) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Based on the assessment,
the Company’s management, including its Chief Executive Officer and Chief Financial Officer, concluded that, as of June 30,
2015, the Company’s internal control over financial reporting was effective.



Changes in Internal Control over Financial
Reporting.



There was no change in internal control over
financial reporting during the year ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.



Item 16. [Reserved]



Item 16A. Audit Committee Financial Expert



The Board determined that Mr. James Garton is
qualified as an Audit Committee Financial Expert and all members are independent as determined by the NASDAQ listing rules.



Item 16B. Code of Ethics



Our board of directors adopted a Code of Conduct
for Directors and Key Officers that applies to our directors, officers and employees. We have posted a copy of our code of business
conduct and ethics on our investor relations website at http://missionnewenergy.com.



Item 16C. Principal Accountant Fees and Services



Audit Fees. The aggregate fees billed for professional services
rendered by the Company’s principal accountant for the audit of the Company’s annual financial statements for the fiscal
years ended June 30, 2015 and 2014 were A$50,000 and A$62,000, respectively.



All other Fees. A$0 and for the fiscal year ending 2015 and
A$0 in fiscal year 2014.



Tax Fees. The Company shows a tax return totaling A$5,500
during the fiscal year ended June 30, 2015 due to a recovery of an over provision of tax paid. The Company incurred fees totaling
A$0 during the fiscal year ended June 30, 2015.



Audit-Related Fees. A$0 and for the fiscal years ending 2015
and 2014.



All fees incurred by the Company in relation
to audit and permissible non–audit services are approved by the Audit and Risk Management Committee prior to the expenditure
being incurred.



Item 16D. Exemptions from the Listing Standards for Audit Committees



Not applicable.



56









Item 16E. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers



Not applicable.



Item 16F. Change in Registrant’s Certifying Accountant



Not applicable.



Item 16G. Corporate Governance



Not applicable.



Item 16H. Mine Safety Disclosures



Not applicable.



PART III



Item 17. Financial Statements



See Item 18.



Item 18. Financial Statements



The consolidated
financial statements for Mission NewEnergy Limited and its subsidiaries are included at the end of this annual report. In
addition, pursuant to Rule 3-09 of Regulation S-X, we currently expect to file separate consolidated financial statements and notes
thereto for FGV Green Energy Sdn Bhd as amendments to this annual report within the required period after FGV Green
Energy Sdn Bhd’s fiscal year end of December 31, 2015, upon receipt of financial statements appropriate for the purpose of
filing with the Securities and Exchange Commission.



Item 19. Exhibits





|EXHIBIT NUMBER |   | Description of Exhibit                                                                                                                                                                                                                                              
|-------------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1            |   | Constitution of Mission NewEnergy (incorporated by reference to Exhibit 3.1 of our registration statement on Form F-1 (File No. 333-170471), as amended, initially filed with the SEC on November 8, 2010).                                                         
|               |   |                                                                                                                                                                                                                                                                     
|4.1            |   | Form of Access, Indemnity and Insurance Deed for Directors and Ex-Directors (incorporated by reference to Exhibit 10.6 of our registration statement on Form F-1 (File No. 333-170471), as amended, initially filed with the SEC on November 8, 2010).              
|               |   |                                                                                                                                                                                                                                                                     
|4.2            |   | Employment agreement (as renewed) with Dato’ Nathan Mahalingam (incorporated by reference to Exhibit 10.7 of our registration statement on Form F-1 (File No. 333-170471), as amended, initially filed with the SEC on November 8, 2010).                           
|               |   |                                                                                                                                                                                                                                                                     
|4.3            |   | Employment agreement with Guy Burnett (incorporated by reference to Exhibit 10.8 of our registration statement on Form F-1 (File No. 333-170471), as amended, initially filed with the SEC on November 8, 2010).                                                    
|               |   |                                                                                                                                                                                                                                                                     
|4.4            |   | Employment agreement with James Garton (incorporated by reference to Exhibit 10.9 of our registration statement on Form F-1 (File No. 333-170471), as amended, initially filed with the SEC on November 8, 2010).                                                   
|               |   |                                                                                                                                                                                                                                                                     
|8.1            | * | List of Subsidiaries.                                                                                                                                                                                                                                               
|               |   |                                                                                                                                                                                                                                                                     
|12.1           | * | Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                                           
|               |   |                                                                                                                                                                                                                                                                     
|12.2           | * | Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                                           
|               |   |                                                                                                                                                                                                                                                                     
|13.1           | * | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13(a)-14 (b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.





*Filed herewith.

57









SIGNATURES



The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual
report on its behalf.



|                         |     | Mission NewEnergy Limited
|------------------------ | --- | -------------------------
|                         |     |                          
|Date:  November 12, 2015 | By: | /s/ Guy Burnett          
|                         |     | Name:                    
|                         |     | Title:                   



58







| | Tel:
                           +8 6382 4600
        Fax:
        +8 6382 4601
        www.bdo.com.au | 38
                           Station Street
        Subiaco,
        WA 6008
        PO
        Box 700 West Perth WA 6872
        Australia
| | ----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------



INDEPENDENT
AUDITORS’ REPORT

BOARD
OF DIRECTORS

MISSION
NEWENERGY LIMITED



We
have audited the accompanying consolidated statements of financial position of Mission NewEnergy Limited as of June 30, 2015,
2014 and 2013 and the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows
for the years ended June 30, 2015, 2014 and 2013. These financial statements are the responsibility of the consolidated entity’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.



We
conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Mission NewEnergy Limited at June 30, 2015, 2014 and 2013 and the results of its operations and its cash flows for the years
ended June 30, 2015, 2014 and 2013 in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.







BDO
Audit (WA) Pty Ltd



Perth,
Western Australia

Dated
12thday of November 2015



BDO
Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are
members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms.





59







Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)



|FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF PROFIT OR LOSS | 2                                                                  
|------------------------------------------------------------- | -------------------------------------------------------------------
|                                                              |                                                                    
|CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                | 3                                                                  
|                                                              |                                                                    
|CONSOLIDATED STATEMENT OF FINANCIAL POSITION                  | 4                                                                  
|                                                              |                                                                    
|CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                   | 6                                                                  
|                                                              |                                                                    
|CONSOLIDATED STATEMENT OF CASH FLOWS                          | 8                                                                  
|                                                              |                                                                    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                | 9                                                                  
|1.                                                            | Nature of operations and general information                       
|2.                                                            | Basis of preparation                                               
|3.                                                            | Statement of Significant Accounting Policies                       
|4.                                                            | New standards and interpretations not yet adopted                  
|5.                                                            | Critical Accounting Estimates and Judgments                        
|6.                                                            | Determination of fair value                                        
|7.                                                            | Sales Revenue                                                      
|8.                                                            | Expenses                                                           
|9.                                                            | Income Tax                                                         
|10.                                                           | Auditors’ Remuneration                                             
|11.                                                           | Earnings per share                                                 
|12.                                                           | Cash and cash equivalents                                          
|13.                                                           | Trade and Other Receivables                                        
|14.                                                           | Other Financial Assets                                             
|15.                                                           | Investments in subsidiaries, unconsolidated entities and associates
|16.                                                           | Property Plant and Equipment                                       
|17.                                                           | Other Assets                                                       
|18.                                                           | Trade and Other Payables                                           
|19.                                                           | Provisions                                                         
|20.                                                           | Financial Liabilities                                              
|21.                                                           | Tax                                                                
|22.                                                           | Issued Capital                                                     
|23.                                                           | Reserves                                                           
|24.                                                           | Capital and Leasing Commitments                                    
|25.                                                           | Contingent Liabilities and Contingent Assets                       
|26.                                                           | Segment Reporting                                                  
|27.                                                           | Cash Flow Information                                              
|28.                                                           | Related Parties                                                    
|29.                                                           | Financial Instruments                                              
|30.                                                           | Parent entity information                                          
|31.                                                           | Events occurring after the reporting period                        
|32.                                                           | Non-current assets held for sale and discontinued operations       
|33.                                                           | Company Details                                                    
|34.                                                           | Authorisation of financial statements                              



1


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF PROFIT OR
LOSS



FOR THE YEAR ENDED 30 JUNE 2015



|                                                                                                         |  | Note |  | 2015 |            |   | 2014 |  |            | 2013 | 
|-------------------------------------------------------------------------------------------------------- |  | ---- |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|                                                                                                         |  |      |  | $    |            |   | $    |  |            | $    | 
|Sales revenue                                                                                            |  |      |  |      | -          |   |      |  | -          |      | 
|Other income                                                                                             |  | 7    |  |      | 7,270,759  |   |      |  | 9,683,586  |      | 
|Total revenue                                                                                            |  |      |  |      | 7,270,759  |   |      |  | 9,683,586  |      | 
|Cost of Sales                                                                                            |  |      |  |      | -          |   |      |  | -          |      | 
|Director and Employee benefits expense                                                                   |  | 8a   |  |      | (1,574,264 | ) |      |  | (1,376,703 | )    | 
|Net foreign exchange gains/(losses)                                                                      |  |      |  |      | 3,240,119  |   |      |  | (2,402,664 | )    | 
|Consultants’ expenses                                                                                    |  |      |  |      | (16,333    | ) |      |  | (1,047     | )    | 
|Impairment reversal / (impairment)                                                                       |  | 5    |  |      | (671,660   | ) |      |  | (363,232   | )    | 
|Shareholder expenses                                                                                     |  |      |  |      | (67,589    | ) |      |  | (61,577    | )    | 
|Travel expenses                                                                                          |  |      |  |      | (175,320   | ) |      |  | (172,842   | )    | 
|Rental expenses                                                                                          |  |      |  |      | (10,136    | ) |      |  | (1,990     | )    | 
|Other expenses                                                                                           |  | 8b   |  |      | (1,985,187 | ) |      |  | (1,042,388 | )    | 
|Depreciation and amortisation expenses                                                                   |  |      |  |      | (2,874     | ) |      |  | (7,412     | )    | 
|Finance Cost – amortisation                                                                              |  |      |  |      | (944,123   | ) |      |  | (3,199,884 | )    | 
|Finance Costs                                                                                            |  |      |  |      | (870,703   | ) |      |  | (1,662,764 | )    | 
|Profit/(Loss) before income tax                                                                          |  |      |  |      | 4,192,689  |   |      |  | (608,917   | )    | 
|Income tax (expense)/benefit                                                                             |  | 9    |  |      | (5,497     | ) |      |  | -          |      | 
|Net Profit /(Loss) before non-controlling interest                                                       |  |      |  |      | 4,187,192  |   |      |  | (608,917   | )    | 
|Share of net profit of associate accounted for using the equity method                                   |  | 15   |  |      | 37,510     |   |      |  | -          |      | 
|Gain/(Loss) for the year from discontinued and deconsolidated operations                                 |  | 32   |  |      | 24,132,542 |   |      |  | (485,200   | )    | 
|Profit/(Loss) for the year                                                                               |  |      |  |      | 28,357,244 |   |      |  | (1,094,117 | )    | 
|Profit/(Loss) is attributable to:                                                                        |  |      |  |      |            |   |      |  |            |      | 
|Owners of Mission NewEnergy Ltd                                                                          |  |      |  |      | 28,357,244 |   |      |  | (1,077,231 | )    | 
|Non-controlling interests                                                                                |  |      |  |      | -          |   |      |  | (16,886    | )    | 
|                                                                                                         |  |      |  |      | 28,357,244 |   |      |  | (1,094,117 | )    | 
|Earnings per share from continuing operations attributable to the ordinary equity holders of the parent: |  |      |  |      |            |   |      |  |            |      | 
|Basic earnings/(loss) per share (dollars)                                                                |  | 11   |  |      | 0.13       |   |      |  | (0.05      | )    | 
|Diluted earnings/(loss) per share (dollars)                                                              |  | 11   |  |      | 0.13       |   |      |  | (0.05      | )    | 
|                                                                                                         |  |      |  |      |            |   |      |  |            |      | 
|Earnings per share from profits attributable to the ordinary equity holders of the parent:               |  |      |  |      |            |   |      |  |            |      | 
|Basic earnings/(loss) per share (dollars)                                                                |  | 11   |  |      | 0.91       |   |      |  | (0.08      | )    | 
|Diluted earnings/(loss) per share (dollars)                                                              |  | 11   |  |      | 0.91       |   |      |  | (0.08      | )    | 



The above Consolidated Statement of Profit
and Loss should be read in conjunction with the accompanying notes.



2


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME



FOR THE YEAR ENDED 30 JUNE 2015



|                                                            |  | 2015 $ |            |   | 2014 $ |  |            | 2013
$ | 
|----------------------------------------------------------- |  | ------ | ---------- | - | ------ |  | ---------- | ------ | 
|Profit/(Loss) for the period                                |  |        | 28,357,244 |   |        |  | (1,094,117 | )      | 
|Other comprehensive income                                  |  |        |            |   |        |  |            |        | 
|Items that will be realised through profit or loss:         |  |        |            |   |        |  |            |        | 
|Exchange differences on translating foreign operations      |  |        | (2,485,775 | ) |        |  | 3,281,567  |        | 
|Loss on settlement of Series 2 convertible note             |  |        |            |   |        |  |            |        | 
|Exchange gain on deconsolidation of discontinued operation  |  |        | -          |   |        |  | (211,580   | )      | 
|Other comprehensive (loss)/income for the period net of tax |  |        | (2,485,775 | ) |        |  | 3,069,987  |        | 
|Total comprehensive income for the period                   |  |        | 25,871,469 |   |        |  | 1,975,870  |        | 
|Attributable to non-controlling equity interests            |  |        | -          |   |        |  | (16,886    | )      | 
|Attributable to owners of the parent                        |  |        | 25,871,469 |   |        |  | 1,958,984  |        | 
|Comprehensive (loss)/income from Continuing Operations      |  |        | 1,738,927  |   |        |  | 1,820,016  |        | 
|Comprehensive income from Discontinued Operation            |  |        | 24,132,542 |   |        |  | 130,968    |        | 



The above Consolidated Statement of Comprehensive
Income should be read in conjunction with the accompanying notes.



3


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF FINANCIAL
POSITION



AS AT 30 JUNE 2015



|                                                  |  | Note |  | 2015 |            |  | 2014 | 
|------------------------------------------------- |  | ---- |  | ---- | ---------- |  | ---- | 
|                                                  |  |      |  | $    |            |  | $    | 
|Current Assets                                    |  |      |  |      |            |  |      | 
|                                                  |  |      |  |      |            |  |      | 
|Cash and cash equivalents                         |  | 12   |  |      | 3,150,776  |  |      | 
|Trade and other receivables                       |  | 13   |  |      | 77,340     |  |      | 
|Other financial assets                            |  | 14   |  |      | 5,580,022  |  |      | 
|Other assets                                      |  | 17   |  |      | 42,937     |  |      | 
|Current tax assets                                |  | 21   |  |      | -          |  |      | 
|Total current assets                              |  |      |  |      | 8,851,075  |  |      | 
|                                                  |  |      |  |      |            |  |      | 
|Non-Current Assets                                |  |      |  |      |            |  |      | 
|Property, plant and equipment                     |  | 16   |  |      | -          |  |      | 
|Investments accounted for using the equity method |  | 15   |  |      | 3,770,173  |  |      | 
|Other Assets                                      |  | 17   |  |      | -          |  |      | 
|Total non-current assets                          |  |      |  |      | 3,770,173  |  |      | 
|Total Assets                                      |  |      |  |      | 12,621,248 |  |      | 
|Current Liabilities                               |  |      |  |      |            |  |      | 
|Trade and other payables                          |  | 18   |  |      | 440,013    |  |      | 
|Short-term provisions                             |  | 19   |  |      | 5,411,679  |  |      | 
|Total current liabilities                         |  |      |  |      | 5,851,692  |  |      | 



4


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF FINANCIAL
POSITION

AS AT 30 JUNE 2015



|                              |  | Note |  | 2015 |           |  | 2014 | 
|----------------------------- |  | ---- |  | ---- | --------- |  | ---- | 
|                              |  |      |  | $    |           |  | $    | 
|Non-Current Liabilities       |  |      |  |      |           |  |      | 
|Financial liabilities         |  | 20   |  |      | -         |  |      | 
|Deferred tax liabilities      |  | 21   |  |      | -         |  |      | 
|Total non-current liabilities |  |      |  |      | -         |  |      | 
|Total Liabilities             |  |      |  |      | 5,851,692 |  |      | 
|Net Assets / (Deficit)        |  |      |  |      | 6,769,556 |  |      | 
|                              |  |      |  |      |           |  |      | 
|Equity                        |  |      |  |      |           |  |      | 
|Issued capital                |  | 22   |  |      | 523,197   |  |      | 
|Reserves                      |  | 23   |  |      | 880,544   |  |      | 
|(Accumulated losses)          |  |      |  |      | 5,365,815 |  |      | 
|Non-controlling Interests     |  | 15   |  |      | -         |  |      | 
|Total Equity/(Deficiency)     |  |      |  |      | 6,769,556 |  |      | 



The above Consolidated Statement of Financial
Position should be read in conjunction with the accompanying notes.



5


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY



FOR THE YEAR ENDED 30 JUNE 2015





|                                                 |  | OrdinaryShare Capital |             |  | RetainedEarnings(AccumulatedLosses) |  |              | Share BasedPaymentsReserve |  |  | Foreign CurrencyTranslationReserve |  |  | ConvertibleNotes
 Reserve |           |   | Non-controllingInterests |  |            | Total | 
|------------------------------------------------ |  | --------------------- | ----------- |  | ----------------------------------- |  | ------------ | -------------------------- |  |  | ---------------------------------- |  |  | ------------------------- | --------- | - | ------------------------ |  | ---------- | ----- | 
|                                                 |  | $                     |             |  | $                                   |  |              | $                          |  |  | $                                  |  |  | $                         |           |   | $                        |  |            | $     | 
|Balance as at 30 June 2013                       |  |                       | 110,415,197 |  |                                     |  | (136,188,232 | )                          |  |  | 4,907,496                          |  |  |                           | (65,248   | ) |                          |  | 8,480,845  |       | 
|Profit after income tax expense for the year     |  |                       | -           |  |                                     |  | (1,077,231   | )                          |  |  | -                                  |  |  |                           | -         |   |                          |  | -          |       | 
|Deconsolidated operations                        |  |                       | -           |  |                                     |  | (211,580     | )                          |  |  | -                                  |  |  |                           | -         |   |                          |  | -          |       | 
|Other Comprehensive income/(loss) for the period |  |                       | -           |  |                                     |  | -            |                            |  |  | -                                  |  |  |                           | 3,281,567 |   |                          |  | -          |       | 
|Total Comprehensive Income                       |  |                       | -           |  |                                     |  | (1,288,811   | )                          |  |  | -                                  |  |  |                           | 3,281,567 |   |                          |  | -          |       | 
|Issue of Shares                                  |  |                       | 108,000     |  |                                     |  | -            |                            |  |  | -                                  |  |  |                           | -         |   |                          |  | -          |       | 
|Settlement of $7.5m of series 3 con note debt    |  |                       | -           |  |                                     |  | 1,003,108    |                            |  |  | -                                  |  |  |                           | -         |   |                          |  | (1,934,279 | )     | 
|Settlement of Series 3 Convertible Note1         |  |                       | -           |  |                                     |  | (5,143,676   | )                          |  |  | -                                  |  |  |                           | -         |   |                          |  | (6,546,566 | )     | 
|Equity portion of Series 4 Convertible Note      |  |                       | -           |  |                                     |  | -            |                            |  |  | -                                  |  |  |                           | -         |   |                          |  | 11,690,242 |       | 
|Balance as at 30 June 2014                       |  |                       | 110,523,197 |  |                                     |  | (141,617,611 | )                          |  |  | 4,907,496                          |  |  |                           | 3,216,319 |   |                          |  | 11,690,242 |       | 














1
The Series 3 Convertible notes are deemed to be settled on conversion to Series 4 Convertible notes.



6


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|                                                                           |  | Ordinary  Share
    Capital |              |   | Retained  Earnings 
    (Accumulated  Losses) |  |              | Share Based  Payments
     Reserve |  |  | Foreign Currency  Translation
     Reserve |   |  | Convertible  Notes
 Reserve |            |   | Non- controlling 
    Interests |  |             | Total | 
|-------------------------------------------------------------------------- |  | --------------------------- | ------------ | - | --------------------------------------------- |  | ------------ | ---------------------------------- |  |  | ------------------------------------------ | - |  | --------------------------- | ---------- | - | ------------------------------- |  | ----------- | ----- | 
|                                                                           |  | $                           |              |   | $                                             |  |              | $                                  |  |  | $                                          |   |  | $                           |            |   | $                               |  |             | $     | 
|Profit after income tax expense for the year                               |  |                             |              |   |                                               |  | 4,187,192    |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | -           |       | 
|Share of net profit of associate accounted for using the equity
    method |  |                             | -            |   |                                               |  | 37,510       |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | -           |       | 
|Discontinued operations                                                    |  |                             | -            |   |                                               |  | 24,132,542   |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | -           |       | 
|Discontinued operations - NCI                                              |  |                             | -            |   |                                               |  | 70,338       |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | -           |       | 
|Other Comprehensive income/(loss) for the
    period                       |  |                             | -            |   |                                               |  | -            |                                    |  |  | -                                          |   |  |                             | (2,485,775 | ) |                                 |  | -           |       | 
|Total Comprehensive Income                                                 |  |                             | 110,523,197  |   |                                               |  | (113,190,029 | )                                  |  |  | 4,907,496                                  |   |  |                             | 730,544    |   |                                 |  | 11,690,242  |       | 
|Settlement of series 4 con note debt                                       |  |                             | -            |   |                                               |  | 3,648,348    |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | (11,690,242 | )     | 
|Share capital reduction via accumulated losses offset2                     |  |                             | (110,000,000 | ) |                                               |  | 110,000,000  |                                    |  |  | -                                          |   |  |                             | -          |   |                                 |  | -           |       | 
|Share based payment                                                        |  |                             | -            |   |                                               |  | -            |                                    |  |  | 150,000                                    |   |  |                             | -          |   |                                 |  | -           |       | 
|Share based payment reserve cleared                                        |  |                             | -            |   |                                               |  | 4,907,496    |                                    |  |  | (4,907,496                                 | ) |  |                             | -          |   |                                 |  | -           |       | 
|Balance as at 30 June
    2015                                             |  |                             | 523,197      |   |                                               |  | 5,365,815    |                                    |  |  | 150,000                                    |   |  |                             | 730,544    |   |                                 |  | -           |       | 



The above Consolidated Statement of Changes
in Equity should be read in conjunction with the accompanying notes.








2
The share capital reduction does not affect the number of fully paid ordinary shares on issue by the Company.



7


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2015

|                                                                         |  | Note |  | 2015 $ |             |   | 2014 $ |  |            | 2013 $ | 
|------------------------------------------------------------------------ |  | ---- |  | ------ | ----------- | - | ------ |  | ---------- | ------ | 
|Cash Flows From Operating Activities                                     |  |      |  |        |             |   |        |  |            |        | 
|Receipts from customers                                                  |  |      |  |        | 3,840,439   |   |        |  | 666,081    |        | 
|Payments to suppliers and employees                                      |  |      |  |        | (3,461,059  | ) |        |  | (2,500,167 | )      | 
|Interest received                                                        |  |      |  |        | 17,529      |   |        |  | 1,231      |        | 
|Finance costs                                                            |  |      |  |        | -           |   |        |  | (1,112,595 | )      | 
|Income tax paid                                                          |  |      |  |        | (5,445      | ) |        |  | (10        | )      | 
|Net cash generated / (used in) operating activities                      |  | 27   |  |        | 391,464     |   |        |  | (2,945,460 | )      | 
|                                                                         |  |      |  |        |             |   |        |  |            |        | 
|Cash Flows From Investing Activities                                     |  |      |  |        |             |   |        |  |            |        | 
|Purchase of property, plant and equipment                                |  |      |  |        | -           |   |        |  | (35,211    | )      | 
|Proceeds and deposit from sale of assets                                 |  |      |  |        | 28,894,946  |   |        |  | 11,024,194 |        | 
|Release of performance bond and deposits                                 |  |      |  |        | 20,843      |   |        |  | (1,688     | )      | 
|Amounts placed on deposit for legal dispute                              |  |      |  |        | (5,105,051  | ) |        |  | -          |        | 
|Asset sale retention deposit                                             |  |      |  |        | (354,610    | ) |        |  | -          |        | 
|Payments for investment in Associate                                     |  |      |  |        | (3,731,689  | ) |        |  | -          |        | 
|Cash balance from deconsolidated operations                              |  | 32   |  |        | (32,648     | ) |        |  | (6,517     | )      | 
|Net cash provided from investing activities                              |  |      |  |        | 19,691,791  |   |        |  | 10,980,778 |        | 
|                                                                         |  |      |  |        |             |   |        |  |            |        | 
|Cash Flows From Financing Activities                                     |  |      |  |        |             |   |        |  |            |        | 
|Proceeds from share issue (net of costs)                                 |  |      |  |        | -           |   |        |  | 108,000    |        | 
|Proceeds from borrowings                                                 |  |      |  |        | -           |   |        |  | 303,479    |        | 
|Repayments of borrowings                                                 |  |      |  |        | (17,730,983 | ) |        |  | (9,371,693 | )      | 
|Net cash provided / (used by) by financing activities                    |  |      |  |        | (17,730,983 | ) |        |  | (8,960,214 | )      | 
|Net Increase (Decrease) In Cash And Cash Equivalents                     |  |      |  |        | 2,352,272   |   |        |  | (924,896   | )      | 
|Cash and cash equivalents at beginning of the financial year             |  |      |  |        | 451,953     |   |        |  | 1,419,617  |        | 
|Effects of exchange rate fluctuations of cash held in foreign currencies |  |      |  |        | 346,551     |   |        |  | (42,768    | )      | 
|Cash And Cash Equivalents At End Of Financial Year                       |  | 12   |  |        | 3,150,776   |   |        |  | 451,953    |        | 



The above Consolidated Statement of Cash
Flows should be read in conjunction with the accompanying notes.



8


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS



| | 1. | Nature of operations and general information
| | -- | --------------------------------------------



Mission NewEnergy Limited is
a company domiciled in Australia (ACN: 117 065 719) and:

| | - | listed on the ASX (MBT) with its operations in Malaysia;
| | - | --------------------------------------------------------

| | - | that has a 20% interest in a Joint Venture owning a 250,000 tpa (approx. 75 million gallon p.a.)
biodiesel refinery which will be retrofitted to produce biodiesel from lower cost feedstock.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Basis of preparation
| | -- | --------------------



Statement of compliance

The financial report is a general purpose
financial report which has been prepared in accordance with Australian Accounting Standards (AASB’s) (including Australian
interpretations) issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial
report of the Group complies with International Financial Reporting Standards (IFRSs) and Interpretations issued by the International
Accounting Standards Board (IASB). Mission NewEnergy Limited is a for-profit entity for the purpose of preparing the financial
statements.



Basis of measurement

The financial report has been prepared
on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets
and financial liabilities for which the fair value basis of accounting has been applied. All amounts shown are in Australian dollars
($A) unless otherwise stated.



The financial statements have been prepared
on a going concern basis. The ability of the Group to continue as a going concern and pay its debts as and when they fall due is
dependent on the continued support of its investors, bankers and suppliers.



The Group has applied amendments to the
Corporation Act (2001) that remove the requirement for the Group to lodge parent entity financial statements. Parent entity financial
statements have been replaced by the specific parent entity disclosures in Note 30.



Functional and Presentation currency

The consolidated financial statements are
presented in Australian Dollars. The functional currencies of the operating units are as follows:

| | - | Refining operations - Malaysian Ringgit
| | - | ---------------------------------------

| | - | Feedstock operations – Indian Rupee
| | - | -----------------------------------

| | - | Other – Australian Dollar.
| | - | --------------------------



The Board of Directors approved this financial
report on 31 August 2015.



9


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 3. | Statement of Significant Accounting Policies
| | -- | --------------------------------------------



Except where stated, these accounting policies
have been consistently applied by each entity in the Group and are consistent with those of the previous year.



New, revised or amending Accounting
Standards and Interpretations adopted



The Group has applied the following
standards and amendments for the first time for their annual reporting period commencing 1 July 2014:



| | · | AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets,
| | - | ---------------------------------------------------------------------------------------------

| | · | AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation
of Hedge Accounting,
| | - | -------------------------------------------------------------------------------------------------------------------------

| | · | Interpretation 21 Accounting for Levies,
| | - | ----------------------------------------

| | · | AASB 2014-1 Amendments to Australian Accounting Standards.
| | - | ----------------------------------------------------------



The adoption of AASB 2013-3
had a small impact on the impairment disclosures and AASB 2014-1 has required additional disclosures in our segment note. Other
than that, the adoption of these standards did not have any impact on the current period or any prior period and is not likely
to affect future periods.



The
Group also elected to adopt the following two standards early:



| | · | Amendments made to Australian Accounting Standards by AASB 2015-1 (Improvements 2012- 2014 cycle),
and
| | - | ------------------------------------------------------------------------------------------------------

| | · | Amendments made to AASB 101 by AASB 2015-2 (Disclosure
initiative).
| | - | -------------------------------------------------------------------

As these amendments merely clarify
the existing requirements, they do not affect the group’s accounting policies or any of the disclosures.



| | a. | Principles of Consolidation
| | -- | ---------------------------



The consolidated financial statements
comprise the financial statements of Mission NewEnergy Limited and its subsidiaries, as defined in Accounting Standard AASB 127
‘Consolidated and Separate Financial Statements’. These include Mission Biofuels Sdn Bhd, Mission Agro Energy Limited,
and Oleovest PL.



During the current financial
year Mission Agro Energy Limited, and Oleovest PL have been deconsolidated from the Group financials with effect from 1 March 2015
due to an effective change in control as a result of a settlement agreement with convertible note.



A list of controlled, jointly
controlled and associate entities with details of acquisitions and disposals is contained in Note 15 to the financial statements.
All controlled entities have a 30 June financial year-end.



All inter-company balances and
transactions between entities in the Consolidated Group, including any unrealised profits or losses, have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies applied by the parent
entity.



10


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




Where controlled entities have
entered or left the Consolidated Group during the year, their operating results have been included/excluded from the date control
was obtained or until the date control ceased.



Non-controlling interests in
the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.



| | b. | Business combinations
| | -- | ---------------------



The Group applies the acquisition
method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is
calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests
issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement.
Acquisition costs are expensed as incurred. The Group recognises identifiable assets acquired and liabilities assumed in a business
combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after
separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration
transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any
existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values
of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in
profit or loss immediately.



| | c. | Income Tax
| | -- | ----------



The charge for current income
tax expense is based on the profit/(loss) for the year adjusted for any non-assessable or disallowed items. It is calculated using
the tax rates that have been enacted or are substantially enacted by the reporting date.



Deferred tax is accounted for
using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition
of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.



Deferred tax is calculated at
the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited
in the Statement of profit or loss, except where it relates to items that may be credited directly to equity, in which case the
deferred tax is adjusted directly against equity.



Deferred income tax assets are
recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences
can be utilised.



The amount of benefits brought
to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation
legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised
and comply with the conditions of deductibility imposed by the law.



11


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | d. | Property, Plant and Equipment
| | -- | -----------------------------



Each class of property, plant
and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.



The cost of fixed assets constructed
within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable
overheads.



Subsequent costs are included
in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the Statement of profit or loss during the financial period in which they are incurred.



| | e. | Depreciation
| | -- | ------------



The depreciable amount of all
fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line
basis over their useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated
over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.



|Class of Fixed Asset       | Depreciation Rate
|-------------------------- | -----------------
|Buildings                  | 5%               
|Leasehold improvements     | 10%              
|Machinery and equipment    | 10%              
|Biodiesel Plant            | 5%               
|Computer equipment         | 20% - 33%        
|Office equipment           | 10%              
|Leased plant and equipment | 10%              



The assets’ residual values
and useful lives are reviewed, and adjusted if appropriate, at each reporting date.



An asset’s carrying amount
is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.



Gains and losses on disposals
are determined by comparing proceeds with the carrying amount. These gains and losses are included in the Statement of profit or
loss.



| | f. | Leases
| | -- | ------



Lease payments for operating
leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which
they are incurred.



12


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | g. | Financial Instruments
| | -- | ---------------------



Recognition



Financial instruments are initially
measured at fair value on trade date, which includes transaction costs (except where the instrument is classified as ‘fair
value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately), when the related
contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.



Loans and receivables



Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using
the effective interest rate method.



Compound financial instruments
(Convertible Notes)



Compound financial instruments
issued by the Group comprise convertible notes that can be converted to share capital at the option of the holder, and the number
of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument
is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component
is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value
of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in
proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial
instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument
is not remeasured subsequent to initial recognition.



Interest, dividends, losses
and gains relating to the financial liability are recognised in profit or loss. On conversion, the financial liability is reclassified
to equity; no gain or loss is recognised on conversion.



Financial liabilities



Non-derivative financial liabilities
are recognised at amortised cost.



Fair value



Fair value is determined based
on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted
securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.



Impairment of financial assets



At each reporting date, the
Group assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised
in the Statement of profit or loss.



13


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | h. | Impairment of non-financial Tangible and Intangible Assets
| | -- | ----------------------------------------------------------



At each reporting date, the
Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those
assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s
fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s
carrying value over its recoverable amount is expensed to the Statement of profit or loss.



Impairment testing is performed
at each reporting date for goodwill and intangible assets with indefinite lives.



Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.



| | i. | Intangibles
| | -- | -----------



Goodwill



Goodwill on consolidation is
initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity
exceeds the fair value attributed to its net assets at date of acquisition. Goodwill is tested annually for impairment and carried
at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.



| | j. | Foreign Currency Transactions and Balances
| | -- | ------------------------------------------



Functional and presentation
currency



The functional currency of each
of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates.
The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation
currency.



Transaction and balances



Foreign currency transactions
are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary
items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the
date when fair values were determined.



Exchange differences arising
on the translation of monetary items are recognised in the Statement of profit or loss, except where deferred in equity as a qualifying
cash flow or net investment hedge.



Exchange differences arising
on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised
in equity, otherwise the exchange difference is recognised in the Statement of Profit or Loss.



14


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




Group companies



The financial results and position
of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:



| | - | assets
                                         and liabilities are translated at year-end exchange rates prevailing at that reporting
                                         date;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | income
                                         and expenses are translated at average exchange rates for the period where this is not
                                         materially different from the rate at the date of the transaction; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | retained
                                         earnings are translated at the exchange rates prevailing at the date of the transaction.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



Exchange differences arising
on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the
statement of financial position. These differences are recognised in the Statement of Profit or Loss in the period in which the
operation is disposed.



| | k. | Employee Benefits
| | -- | -----------------



Provision is made for the Company’s
liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits that are expected
to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related
on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows
to be made for those benefits.



Equity-settled compensation



Equity settled share-based
payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity settled share
share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that
will eventually vest.



| | l. | Trade and Other Payables
| | -- | ------------------------



Trade payables and other accounts
payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services.



| | m. | Provisions
| | -- | ----------



Provisions are recognised when
the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic
benefits will result and that outflow can be reliably measured.



| | n. | Cash and Cash Equivalents
| | -- | -------------------------



Cash and cash equivalents include
cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 3 months
or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of
financial position.



15


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | o. | Revenue Recognition
| | -- | -------------------



Revenue from the sale of goods
is recognised upon the delivery of goods to customers, when reasonable certainty exists that such revenues will be realised and
the risks and rewards of ownership have been transferred.



Interest revenue is recognised
on a proportional basis taking into account the interest rates applicable to the financial assets.



Dividend revenue is recognised
when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted
for in accordance with the equity method of accounting.



Revenue from the rendering
of a service is recognised upon the delivery of the service to the customers



All revenue is stated net of
the amount of goods and services tax (GST).



| | p. | Borrowing Costs
| | -- | ---------------



Borrowing costs directly attributable
to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary
to complete and prepare the asset for its intended use. Other borrowing costs are expensed in the period in which they are incurred.



| | q. | Goods and Services Tax (GST)
| | -- | ----------------------------



Revenues, expenses and assets
are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office.
In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST



Cash flows are presented in
the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed
as operating cash flows



| | r. | Earnings per share
| | -- | ------------------



Basic earnings per share are
calculated by dividing the profit attributable to owners of the company, excluding costs of servicing equity other than ordinary
shares, by the weighted average number of ordinary shares outstanding during the financial year.



Diluted earnings per share
adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest
and other financing costs associated with the dilutive potential ordinary shares, and the weighted average number of additional
ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.



| | s. | Contributed equity
| | -- | ------------------



Ordinary shares are classified
as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax,
from the proceeds.



16


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 4. | New standards and interpretations
                                         not yet adopted
| | -- | ------------------------------------------------------------------------------------------



New Accounting Standards and Interpretations
not yet mandatory or early adopted



Australian Accounting Standards and Interpretations
that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for
the annual reporting period ended 30 June 2015. The consolidated entity's assessment of the impact of these new or amended Accounting
Standards and Interpretations, most relevant to the consolidated entity, are set out below.



AASB 9 Financial Instruments and
its consequential amendments



Adoption of AASB 9 is only mandatory for
the year ending 31 December 2018. The entity has not yet made an assessment of the impact of these amendments.



AASB 15 Revenue



Adoption of AASB 9 is only mandatory for
the year ending 1 January 2017. Due to the recent release of this standard, the entity has not yet made a detailed assessment
of the impact of this standard.



AASB 2014-3 (issued August 2014) -
Amendments to Australian Accounting Standards - Accounting for Acquisitions of Interests in Joint Operations



When an entity acquires an interest in
a joint operation whose activities meet the definition of a ‘business’ in AASB 3 Business Combinations, to the extent
of its share of assets, liabilities, revenues and expenses as specified in the contractual arrangement, the entity must apply
all of the principles for business combination accounting in AASB 3, and other IFRSs, to the extent that they do not conflict
with AASB 11 Joint Arrangements. There will be no impact on the financial statements when these amendments are first adopted because
they apply prospectively to acquisitions of interests in joint operations.



AASB 2014-10 (issued December 2014)
Amendments to Australian Accounting Standards - Sale or Contribution of Assets between An Investor and its Associate or Joint
Venture



Removes the inconsistency between AASB
10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures in accounting for transactions
where a parent loses control over a subsidiary that is not a business under AASB 3 Business Combinations, by selling part of its
interest to an associate or joint venture, or by selling down part of its interest so that the remaining investment becomes an
associate or joint venture.



There will be no impact on the financial
statements when these amendments are first adopted because they apply prospectively to sales or contributions of assets occurring
after the application date.



AASB 2015-2 (issued January 2015) -
Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 101



These amendments affect presentation and
disclosures only. Therefore on first time adoption of these amendments on 1 July 2016, comparatives may need to be restated in
line with presentation and note ordering.



17


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 5. | Critical Accounting Estimates
                                         and Judgments
| | -- | ------------------------------------------------------------------------------------



The preparation of annual financial reports
requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. The Board evaluates estimates and judgments incorporated into the financial
report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the Group. Actual results may differ
from these estimates



Except as described below, in preparing
this consolidated financial report, the significant judgements made by management in applying the Group’s accounting policies
and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial report as
at end for the year ended 30 June 2015. During the twelve months ended 30 June 2015 management reassessed its estimates in respect
of:



Impairment of assets



The Group assesses impairment of assets
at each reporting date by evaluating conditions specific to the Group that may lead to impairment. Where an impairment trigger
exists, the recoverable amount of the asset is determined.



Credit risk of receivables



Malaysian operations



Credit risk for receivables at 30 June
2014 in the refining operations resulted from amounts recoverable from an EPCC contractor whereby the Group incurred costs during
commissioning testing which the EPCC contractor was obliged to pay. This receivable has been impaired during the current financial
period as under the terms of the mutually agreed settlement of the dispute between the Company and KNM Process Systems (see Events
Occurring after the Reporting Period, note 31), this amount will not be recovered.



Property, Plant and Equipment



Property, plant and equipment are reviewed
for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted,
the recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net present value of expected
future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.



Impairment of refineries



The Board reviews the carrying value of
its refinery assets at each reporting date.



During the current financial period, an
impairment reversal of the refinery has been reflected due to the sale of the refinery.



18


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|                                                |  | June 2015 |         |  | June 2014 |  |         | June 2013 | 
|----------------------------------------------- |  | --------- | ------- |  | --------- |  | ------- | --------- | 
|                                                |  | $         |         |  | $         |  |         | $         | 
|Impairment of refinery assets                   |  |           | -       |  |           |  | 29,336  |           | 
|Impairment reversal of refineries               |  |           | -       |  |           |  | -       |           | 
|Impairment of deconsolidated intercompany loans |  |           | -       |  |           |  | 288,216 |           | 
|Impairment of receivable                        |  |           | 671,660 |  |           |  |         |           | 
|Impairment of subsidiary investment             |  |           | -       |  |           |  | 45,680  |           | 
|Impairment of inventories and biological assets |  |           | -       |  |           |  | -       |           | 
|Total                                           |  |           | 671,660 |  |           |  | 363,232 |           | 



Investments in subsidiaries



Investments held by the parent entity,
Mission NewEnergy Limited, are reviewed for impairment if there is any indication that the carrying amount may not be recoverable.
The recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net present value of expected
future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.



In line with the impairment of the carrying
value of assets in the subsidiaries, the parent entity has impaired the value of all subsidiaries to zero. This accounting adjustment
has no impact on the cash flows or the Consolidated Financial Statements of the Group. Refer to note 30: Parent Information for
further details.



Investments in associates



Investments in associates held by the
parent entity, Mission NewEnergy Limited, are reviewed for impairment if there is any indication that the carrying amount may
not be recoverable. The recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net
present value of expected future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.



The 20% shareholding of Felda Green Energy
Sdn Bhd in Malaysia is carried at cost less the groups share of losses for the reporting period (Refer to note 15).



| | 6. | Determination of fair value
| | -- | ---------------------------



A number of the Groups accounting policies
and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values
have been determined for measurement and/or disclosure purposes based on the following methods.



Share based payment transactions



The fair value of employee share based
payments is measured using the share price on grant date.



19


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 7. | Sales Revenue
| | -- | -------------



|                                                        |  | 2015 $ |           |  | 2014 $ |  |           | 2013 $ | 
|------------------------------------------------------- |  | ------ | --------- |  | ------ |  | --------- | ------ | 
|Sales Revenue                                           |  |        |           |  |        |  |           |        | 
|Sales of goods                                          |  |        | -         |  |        |  | -         |        | 
|Interest income                                         |  |        | -         |  |        |  | -         |        | 
|Total Revenue                                           |  |        | -         |  |        |  | -         |        | 
|                                                        |  |        |           |  |        |  |           |        | 
|Other Income                                            |  |        |           |  |        |  |           |        | 
|Interest income                                         |  |        | 17,907    |  |        |  | 1,231     |        | 
|Gain on sale of assets                                  |  |        | -         |  |        |  | -         |        | 
|Gain on settlement and restructure of convertible notes |  |        | 7,245,011 |  |        |  | 9,671,893 |        | 
|Sundry income                                           |  |        | 7,841     |  |        |  | 10,462    |        | 
|Total Other Income                                      |  |        | 7,270,759 |  |        |  | 9,683,586 |        | 



In the financial years ended 30 June 2013
and 30 June 2014, the Company restructured the Series 2 and Series 3 Convertible Notes respectively to the Series 4 Convertibles
Notes, which resulted in a non-cash gain in the profit and loss.



During the financial year ended 30 June
2015, the Company successfully early settled the Series 4 Convertible Notes, which had a 31 December 2018 maturity date, from
proceeds from the sale of the 250,000 tpa, which resulted in a non-cash gain in the profit and loss.



| | 8. | Expenses
| | -- | --------



|                                           |  | 2015 $ |           |  | 2014 $ |  |           | 2013 $ | 
|------------------------------------------ |  | ------ | --------- |  | ------ |  | --------- | ------ | 
|8a) Employee costs                         |  |        |           |  |        |  |           |        | 
|Wages and Salaries                         |  |        | 1,369,926 |  |        |  | 1,329,564 |        | 
|Contribution to defined contribution plans |  |        | 54,338    |  |        |  | 47,137    |        | 
|Share based payment                        |  |        | 150,000   |  |        |  | -         |        | 
|                                           |  |        | 1,574,264 |  |        |  | 1,376,703 |        | 
|8b) Other expenses:                        |  |        |           |  |        |  |           |        | 
|Audit fees                                 |  |        | 53,096    |  |        |  | 80,308    |        | 
|Computer maintenance & consumables         |  |        | 5,670     |  |        |  | 3,415     |        | 
|Communication expenses                     |  |        | 40,209    |  |        |  | 47,462    |        | 
|Insurance costs                            |  |        | 149,578   |  |        |  | 170,359   |        | 
|Legal fees                                 |  |        | 1,372,921 |  |        |  | 374,356   |        | 
|Plant operating costs                      |  |        | 293,384   |  |        |  | 290,470   |        | 
|Asset maintenance                          |  |        | -         |  |        |  | -         |        | 
|Other administrative costs                 |  |        | 70,329    |  |        |  | 97,272    |        | 
|Total                                      |  |        | 1,985,187 |  |        |  | 1,042,388 |        | 



20


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 9. | Income Tax
| | -- | ----------



|   |  |                                                                                                                                  |  |    |  | 2015 $ |            |   | 2014 $ |  |          | 2013 $ | 
|-- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | -- |  | ------ | ---------- | - | ------ |  | -------- | ------ | 
|a. |  | The components of tax expense comprise                                                                                           |  |    |  |        |            |   |        |  |          |        | 
|   |  | Current tax                                                                                                                      |  |    |  |        | (5,497     | ) |        |  | -        |        | 
|   |  | Deferred tax                                                                                                                     |  | 21 |  |        | -          |   |        |  | -        |        | 
|   |  |                                                                                                                                  |  |    |  |        | (5,497     | ) |        |  | -        |        | 
|b. |  | The prima facie tax on the profit  (loss) from ordinary activities before income tax is reconciled to the income tax as follows: |  |    |  |        |            |   |        |  |          |        | 
|   |  | Accounting profit/(loss) before tax                                                                                              |  |    |  |        | 4,192,689  |   |        |  | (608,917 | )      | 
|   |  | Gain / (Loss) for the year from discontinued operations                                                                          |  |    |  |        | 24,306,392 |   |        |  | (155,634 | )      | 
|   |  | Total Gain / (Loss) for the year                                                                                                 |  |    |  |        | 28,499,081 |   |        |  | (764,551 | )      | 
|   |  | Prima facie tax (benefit)/expense on profit/ (loss) from ordinary activities before income tax at 30%                            |  |    |  |        | 8,549,724  |   |        |  | (229,365 | )      | 
|   |  | Adjusted for:                                                                                                                    |  |    |  |        |            |   |        |  |          |        | 
|   |  | Tax effect of:                                                                                                                   |  |    |  |        |            |   |        |  |          |        | 
|   |  | -   overseas tax rate differential                                                                                               |  |    |  |        | (1,490,988 | ) |        |  | 167,036  |        | 
|   |  | -   Impairment of non-assessable item                                                                                            |  |    |  |        | (8,074,474 | ) |        |  | 108,970  |        | 
|   |  | -   other non-assessable items                                                                                                   |  |    |  |        | 1,010,241  |   |        |  | (46,641  | )      | 
|   |  |                                                                                                                                  |  |    |  |        | (5,497     | ) |        |  | -        |        | 
|   |  | Add:                                                                                                                             |  |    |  |        |            |   |        |  |          |        | 
|   |  | Over provision for income tax in prior year                                                                                      |  |    |  |        | -          |   |        |  | -        |        | 
|   |  | Income tax attributable to entity                                                                                                |  |    |  |        | (5,497     | ) |        |  | -        |        | 
|   |  |                                                                                                                                  |  |    |  |        |            |   |        |  |          |        | 
|   |  | The applicable weighted average effective current tax rate is as follows:                                                        |  |    |  |        | 0          | % |        |  | 0        | %      | 



Deferred tax assets on temporary differences
and losses are not recognised because it is not probable that future taxable profit will be available against which the unused
tax losses can be used. Refer to note 21 for further disclosures on deferred tax assets and liabilities.



21


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 10. | Auditors’ Remuneration
| | --- | ----------------------



|                                                                            |  | 2015 $ |        |  | 2014 $ |  |        | 2013 $ | 
|--------------------------------------------------------------------------- |  | ------ | ------ |  | ------ |  | ------ | ------ | 
|Audit services                                                              |  |        |        |  |        |  |        |        | 
|Remuneration of the auditor of the parent entity for:                       |  |        |        |  |        |  |        |        | 
|-  auditing or reviewing the financial reports – BDO Audit (WA)     Pty Ltd |  |        | 49,725 |  |        |  | 61,956 |        | 



| | 11. | Earnings per share
| | --- | ------------------



|a. |  | Reconciliation of earnings to profit or loss                                                            |  |  |            |  |  |  |            |   |  |  |            | 
|-- |  | ------------------------------------------------------------------------------------------------------- |  |  | ---------- |  |  |  | ---------- | - |  |  | ---------- | 
|   |  | Earnings used in calculation of both ordinary and dilutive EPS                                          |  |  | 28,357,244 |  |  |  | (1,077,231 | ) |  |  | 10,042,733 | 
|b  |  | Earnings used in calculation of both ordinary and dilutive EPS for ongoing operations                   |  |  | 4,187,192  |  |  |  | (608,917   | ) |  |  | 10,773,395 | 
|c. |  | Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS    |  |  | 31,253,837 |  |  |  | 13,377,124 |   |  |  | 10,481,820 | 
|   |  | Effect of:                                                                                              |  |  |            |  |  |  |            |   |  |  |            | 
|   |  | Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS |  |  | 31,253,837 |  |  |  | 13,377,124 |   |  |  | 10,481,820 | 



Diluted earnings per share exclude convertible
notes, performance rights and options that had an exercise price above the average market price during the period they existed.
All the potential ordinary shares were anti-dilutive as they were all below the conversion price. Where a loss is made, all convertible
notes, performance rights and options are excluded as the impact of including them would be to reduce the loss per share.



| | 12. | Cash and cash equivalents
| | --- | -------------------------



|                         |  | 2015 $ |           |  | 2014 $ |  |         | 2013 $ | 
|------------------------ |  | ------ | --------- |  | ------ |  | ------- | ------ | 
|Cash at bank and in hand |  |        | 1,033,903 |  |        |  | 451,953 |        | 
|Short-term bank deposits |  |        | 2,116,873 |  |        |  | -       |        | 
|                         |  |        | 3,150,776 |  |        |  | 451,953 |        | 



See note 29, Financial Instruments, for information
on risk exposures for cash and cash equivalents.

22


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 13. | Trade and Other Receivables
| | --- | ---------------------------



|                  |  | 2015 $ |        |  | 2014 $ | 
|----------------- |  | ------ | ------ |  | ------ | 
|CURRENT           |  |        |        |  |        | 
|Trade receivables |  |        | -      |  |        | 
|Other receivables |  |        | 77,340 |  |        | 
|TOTAL             |  |        | 77,340 |  |        | 



At each reporting date, the Board assesses
the likely timing of recoverability of receivables and bases this assessment on a number of significant assumptions and estimates.
Please refer to note 5, critical accounting estimates and judgements, and note 29 for a detailed discussion around credit risk,
provisioning and age analysis of trade and other receivables.



| | 14. | Other Financial Assets
| | --- | ----------------------



|Current                                        |  |  |           |  |  |  |   | 
|---------------------------------------------- |  |  | --------- |  |  |  | - | 
|Sundry financial assets                        |  |  | 345,961   |  |  |  | - | 
|Sundry financial assets (cash held in deposit) |  |  | 5,234,061 |  |  |  | - | 
|                                               |  |  | 5,580,022 |  |  |  | - | 



Monies received from the sale of the 250,000
tp refinery, withheld for either settlement of claims, see note 19, or to be settled as deferred consideration on settlement of
convertible notes, see note 20.



| | 15. | Investments in subsidiaries,
                                         unconsolidated entities and associates
| | --- | ------------------------------------------------------------------------------------------------------------



(a) Material subsidiaries



The Group’s principal subsidiaries
at 30 June 2015 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that
are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The
country of incorporation or registration is also their principal place of business.



Oleovest PL and Mission Agro Energy Limited
have been deconsolidated from the Group financials with effect from 1 March 2015 pursuant to an agreement with the Groups convertible
note holders whom took effective control on that date.



During the financial period the Company
acquired 100% of M2 Capital Sdn Bhd, a Malaysian registered Company, which in turn owns 20% of FGV Green Energy Sdn, a Malaysian
registered Company formed to own the 250,000 tpa refinery sold by the Group during the financial period.



23


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|A  |  | Controlled Entities Consolidated           |  |                          |  |                      |     |   |                                                           |  |     |     
|-- |  | ------------------------------------------ |  | ------------------------ |  | -------------------- | --- | - | --------------------------------------------------------- |  | --- | ----
|   |  |                                            |  | Country of Incorporation |  | Percentage Owned (%) |     |   | Ownership interest
    held by non- controlling interests |  |     |     
|   |  |                                            |  |                          |  | 2015                 |     |   | 2014                                                      |  |     | 2015
|   |  | Parent Entity:                             |  |                          |  |                      |     |   |                                                           |  |     |     
|   |  | Mission NewEnergy Limited                  |  | Australia                |  |                      |     |   |                                                           |  |     |     
|   |  | Subsidiaries of Mission NewEnergy Limited: |  |                          |  |                      |     |   |                                                           |  |     |     
|   |  | Mission Biofuels Sdn Bhd                   |  | Malaysia                 |  |                      | 100 |   |                                                           |  | 100 |     
|   |  | M2 Capital Sdn Bhd                         |  | Malaysia                 |  |                      | 100 |   |                                                           |  | -   |     
|   |  | Mission Agro Energy Limited                |  | Mauritius                |  |                      | -   | 3 |                                                           |  | 100 |     
|   |  | Oleovest PL                                |  | Singapore                |  |                      | -   | 4 |                                                           |  | 85  |     
|B. |  | Unconsolidated entities                    |  |                          |  |                      |     |   |                                                           |  |     |     
|   |  | PT Sinergi Oleo Nusantara                  |  | Indonesia                |  |                      | -   |   |                                                           |  | 70  |     
|C. |  | Associates                                 |  |                          |  |                      |     |   |                                                           |  |     |     
|   |  | Felda Green Energy Sdn Bhd                 |  | Malaysia                 |  |                      | 20  |   |                                                           |  | -   |     








3 The results from operations
within this subsidiary have been deconsolidated from 1 March 2015.

4 The results from operations
within this subsidiary have been deconsolidated from 1 March 2015.



24


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




(b) Non controlling interests



Set out below is summarised financial
information for Oleovest PL whom had a non-controlling interests that was material to the Group. The amounts disclosed are before
inter-company eliminations.



|Summarised Statement of Financial Position                            |  | 2015 |   |  | 2014 | 
|--------------------------------------------------------------------- |  | ---- | - |  | ---- | 
|Current Assets                                                        |  |      | - |  |      | 
|Current Liabilities                                                   |  |      | - |  |      | 
|Current Net Assets                                                    |  |      | - |  |      | 
|Net Assets                                                            |  |      | - |  |      | 
|Accumulated NCI loss                                                  |  |      | - |  |      | 
|Summarised statement of profit or loss and other comprehensive income |  |      |   |  |      | 
|Revenue                                                               |  |      | - |  |      | 
|Expenses                                                              |  |      | - |  |      | 
|Total comprehensive income                                            |  |      | - |  |      | 
|Net profit/(loss) allocated to NCI                                    |  |      | - |  |      | 
|Dividends paid to NCI                                                 |  |      | - |  |      | 
|Summarised cash flows                                                 |  |      |   |  |      | 
|Cash flows from operating activities                                  |  |      | - |  |      | 
|Cash flows from investing activities                                  |  |      | - |  |      | 
|Cash flows from financing activities                                  |  |      | - |  |      | 
|Net increase/(decrease) in cash                                       |  |      | - |  |      | 



(c) Transactions
with non-controlling interests.



The Group has not had any transactions
with non-controlling interests during the current and prior financial year.



(d) Unconsolidated
entities.



PT Sinergi Oleo Nusantara (PTSON)
is an entity in which the Group, through Oleovest Pty Ltd, invested to explore the implementation of a palm oil processing operation.
Shortly after incorporation the minority shareholder defaulted on material contractual terms. This matter was taken to arbitration
and at the date of this report the arbitration proceedings have been concluded and the joint venture partner has returned the
money invested by Oleovest Pl into PTSON.



25


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




(e) Associate
entity.



Set out below is the associate
of the group as at 30 June 2015 which, in the opinion of the directors, is material to the group. The entity listed below has
share capital consisting solely of ordinary shares, which are held directly by the group. The country of incorporation or registration
is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights
held.



|Name of entity           |  | Country of Incorporation |  | Percentage Owned (%) |    |  | Nature of relationship |  | Measurement method |  | Carrying amount ($) |          
|------------------------ |  | ------------------------ |  | -------------------- | -- |  | ---------------------- |  | ------------------ |  | ------------------- | ---------
|                         |  |                          |  | 2015                 |    |  | 2014                   |  |                    |  |                     |          
|FGV Green Energy Sdn Bhd |  | Malaysia                 |  |                      | 20 |  |                        |  | -                  |  |                     | Associate



|Summarised statement of |  | FGV Green Energy Sdn Bhd |        
|----------------------- |  | ------------------------ | -------
|comprehensive income    |  | 2015                     |        
|Interest income         |  |                          | 351,764
|Profit from operations  |  |                          | 187,553
|Dividends received      |  |                          | -      



|Summarised balance sheet          |  | FGV Green Energy Sdn Bhd |            
|--------------------------------- |  | ------------------------ | -----------
|                                  |  | 2015                     |            
|Cash and cash equivalents         |  |                          | 29,197,747 
|Other current assets              |  |                          | 337,653    
|Non-current assets                |  |                          | 33,716,894 
|Current liabilities               |  |                          | (1,686,587 
|Non-current financial liabilities |  |                          | (42,940,643
|Net Assets                        |  |                          | 18,625,064 



26


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 16. | Property Plant and Equipment
| | --- | ----------------------------



|                                                                |  | Land andBuilding |      |   | OfficeEquipment |  |          | ComputerEquipmentand software |  |  | MotorVehicle |   |  | Asset UnderConstruction |          |   | Total | 
|--------------------------------------------------------------- |  | ---------------- | ---- | - | --------------- |  | -------- | ----------------------------- |  |  | ------------ | - |  | ----------------------- | -------- | - | ----- | 
|Cost at 30 June 2013                                            |  |                  | 338  |   |                 |  | 147,585  |                               |  |  | 869,503      |   |  |                         | 115,387  |   |       | 
|Additions                                                       |  |                  | -    |   |                 |  | 24,365   |                               |  |  | 10,846       |   |  |                         | -        |   |       | 
|Foreign Currency Translation                                    |  |                  | -    |   |                 |  | (4,187   | )                             |  |  | (20,528      | ) |  |                         | -        |   |       | 
|Transferred to Non-current Assets Held for Sale (Current Asset) |  |                  | -    |   |                 |  | (24,965  | )                             |  |  | (6,615       | ) |  |                         | -        |   |       | 
|Disposal                                                        |  |                  | -    |   |                 |  | (2,022   | )                             |  |  | (208         | ) |  |                         | -        |   |       | 
|Cost at 30 June 2014                                            |  |                  | 338  |   |                 |  | 140,776  |                               |  |  | 852,998      |   |  |                         | 115,387  |   |       | 
|Additions                                                       |  |                  | -    |   |                 |  | -        |                               |  |  | -            |   |  |                         | -        |   |       | 
|Disposal/Impairment                                             |  |                  | (338 | ) |                 |  | (140,776 | )                             |  |  | (840,798     | ) |  |                         | (115,387 | ) |       | 
|Cost at 30 June 2015                                            |  |                  | -    |   |                 |  | -        |                               |  |  | 12,200       |   |  |                         | -        |   |       | 



27


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|Accumulated Depreciation and Impairment                 |  |                 |      |   |                 |  |          |                               |  |  |              |   |  |                         |          |   |       | 
|------------------------------------------------------- |  | --------------- | ---- | - | --------------- |  | -------- | ----------------------------- |  |  | ------------ | - |  | ----------------------- | -------- | - | ----- | 
|                                                        |  | LandandBuilding |      |   | OfficeEquipment |  |          | ComputerEquipmentand software |  |  | MotorVehicle |   |  | Asset UnderConstruction |          |   | Total | 
|Accumulated Depreciation and Impairment at 30 June 2013 |  |                 | 338  |   |                 |  | 147,585  |                               |  |  | 863,501      |   |  |                         | 115,387  |   |       | 
|Depreciation for the year (continuing operation)        |  |                 | -    |   |                 |  | -        |                               |  |  | 7,412        |   |  |                         | -        |   |       | 
|Impairment – Refer to note 5                            |  |                 | -    |   |                 |  | 22,734   |                               |  |  | 6,602        |   |  |                         | -        |   |       | 
|Foreign Currency Translation                            |  |                 | -    |   |                 |  | (29,543  | )                             |  |  | (27,338      | ) |  |                         | -        |   |       | 
|Accumulated Depreciation and Impairment at 30 June 2014 |  |                 | 338  |   |                 |  | 140,776  |                               |  |  | 850,177      |   |  |                         | 115,387  |   |       | 
|Depreciation for the year (continuing operation)        |  |                 | -    |   |                 |  | -        |                               |  |  | 2,874        |   |  |                         | -        |   |       | 
|Impairment/Disposal                                     |  |                 | (338 | ) |                 |  | (140,776 | )                             |  |  | (840,851     | ) |  |                         | (115,387 | ) |       | 
|Accumulated Depreciation and Impairment at 30 June 2015 |  |                 | -    |   |                 |  | -        |                               |  |  | 12,200       |   |  |                         | -        |   |       | 
|                                                        |  |                 |      |   |                 |  |          |                               |  |  |              |   |  |                         |          |   |       | 
|Carrying Amounts                                        |  |                 |      |   |                 |  |          |                               |  |  |              |   |  |                         |          |   |       | 
|At 30 June 2014                                         |  |                 | -    |   |                 |  | -        |                               |  |  | 2,821        |   |  |                         | -        |   |       | 
|At 30 June 2015                                         |  |                 | -    |   |                 |  | -        |                               |  |  | -            |   |  |                         | -        |   |       | 



28


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




Impairment loss



Refer to note 5, Critical Accounting estimates
for a detailed discussion on the impairment of assets.



Assets under construction



These relate to the second biodiesel plant
(being the 250,000 tpa plant) in Malaysia. At 30 June 2014 the final acceptance of this plant is under dispute and the matter
has been referred to arbitration. See note 24 on capital commitments relating to this plant.



| | 17. | Other
                                         Assets
| | --- | -----------------------------------------------------



|CURRENT           |  |      |        |  |      | 
|----------------- |  | ---- | ------ |  | ---- | 
|                  |  | 2015 |        |  | 2014 | 
|Prepayments       |  |      | -      |  |      | 
|Security Deposits |  |      | 42,937 |  |      | 
|                  |  |      | 42,937 |  |      | 



| | 18. | Trade and Other Payables
| | --- | ------------------------



|CURRENT                              |  |  |         |  |  |  |         | 
|------------------------------------ |  |  | ------- |  |  |  | ------- | 
|Unsecured liabilities:               |  |  |         |  |  |  |         | 
|Trade payables                       |  |  | 182,128 |  |  |  | 125,765 | 
|Sundry payables and accrued expenses |  |  | 257,885 |  |  |  | -       | 
|                                     |  |  | 440,013 |  |  |  | 125,765 | 



| | 19. | Provisions
| | --- | ----------



|CURRENT                         |  |  |           |  |  |  |         | 
|------------------------------- |  |  | --------- |  |  |  | ------- | 
|Provision for leave             |  |  | 177,619   |  |  |  | 149,735 | 
|Provision for legal settlements |  |  | 5,234,060 |  |  |  | -       | 
|                                |  |  | 5,411,679 |  |  |  | 149,735 | 



29


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 20. | Financial Liabilities
| | --- | ---------------------



|                                     |  | 2015 $ |   |  | 2014 $ | 
|------------------------------------ |  | ------ | - |  | ------ | 
|NON-CURRENT                          |  |        |   |  |        | 
|Secured loans                        |  |        | - |  |        | 
|Convertible Notes (unsecured)        |  |        |   |  |        | 
|- Nominal value (unsecured)          |  |        | - |  |        | 
|- Equity portion of convertible note |  |        | - |  |        | 
|- Amortisation of equity portion     |  |        | - |  |        | 
|- Accrued Interest                   |  |        | - |  |        | 
|                                     |  |        | - |  |        | 



During the current financial year the
full value of the convertible notes was settled from proceeds from the sale of the 250,000 tpa refinery, subject to any deferred
payments pending the outcome of claims over cash held in deposit. Refer to Note 14.



|                                                                                                                                                   |  | 2015 |   |  | 2014 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | - |  | ---- | -
|Units                                                                                                                                              |  |      | - |  |      |  
|Maturity date                                                                                                                                      |  |      | - |  |      |  
|Interest rate per annum                                                                                                                            |  |      | - |  |      |  
|Convertible into ordinary shares at the option of the Holder or the Company in the circumstances set out in the Terms and Conditions of the Notes. |  |      | - |  |      |  
|Conversion price                                                                                                                                   |  |      | - |  |      | $





30


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 21. | Tax
| | --- | ---





|                                          |  |                                                                                                     |   | 2015 $ |   |  | 2014 $ | 
|----------------------------------------- |  | --------------------------------------------------------------------------------------------------- | - | ------ | - |  | ------ | 
|                                          |  | Liabilities                                                                                         |   |        |   |  |        | 
|                                          |  | CURRENT                                                                                             |   |        |   |  |        | 
|                                          |  | Current Tax liability / (asset)                                                                     |   |        | - |  |        | 
|                                          |  | NON-CURRENT                                                                                         |   |        |   |  |        | 
|                                          |  | Deferred tax liability comprises:                                                                   |   |        |   |  |        | 
|                                          |  | Unrealised FX gains                                                                                 |   |        | - |  |        | 
|                                          |  | Accruals                                                                                            |   |        | - |  |        | 
|                                          |  | Other                                                                                               |   |        | - |  |        | 
|                                          |  | Total                                                                                               |   |        | - |  |        | 
|                                          |  |                                                                                                     |   |        |   |  |        | 
|                                          |  | Assets                                                                                              |   |        |   |  |        | 
|                                          |  | Deferred tax assets comprise:                                                                       |   |        |   |  |        | 
|                                          |  | Provisions                                                                                          |   |        | - |  |        | 
|                                          |  | Transaction costs included in equity                                                                |   |        | - |  |        | 
|                                          |  | Other                                                                                               |   |        | - |  |        | 
|                                          |  |                                                                                                     |   |        | - |  |        | 
|                                          |  | Reconciliations                                                                                     |   |        |   |  |        | 
|i.                                        |  | Gross Movements                                                                                     |   |        |   |  |        | 
|                                          |  | The overall movement in the deferred tax account is as follows:                                     |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | (Charge)/credit to statement of profit or loss                                                      |   |        | - |  |        | 
|                                          |  | Foreign currency translation difference                                                             |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 
|                                          |  |                                                                                                     |   |        |   |  |        | 
|ii.                                       |  | Deferred Tax Liability                                                                              |   |        |   |  |        | 
|                                          |  | The movement in deferred tax liability for each temporary difference during the year is as follows: |   |        |   |  |        | 
|                                          |  | Tax allowances relating to unrealised FX gains:                                                     |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | Charged to the statement of profit or loss                                                          |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 
|                                          |  | Tax allowances relating to accruals:                                                                |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | Charged to the statement of profit or loss                                                          |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 
|                                          |  |                                                                                                     |   |        |   |  |        | 
|Other                                     |  |                                                                                                     |   |        |   |  |        | 
|Opening balance                           |  |                                                                                                     | - |        |   |  | -      | 
|Charge to the statement of profit or loss |  |                                                                                                     | - |        |   |  | -      | 
|Foreign currency translation difference   |  |                                                                                                     | - |        |   |  | -      | 
|Closing Balance                           |  |                                                                                                     | - |        |   |  | -      | 
|                                          |  |                                                                                                     |   |        |   |  |        | 
|iii.                                      |  | Deferred tax assets                                                                                 |   |        |   |  |        | 
|                                          |  | The movement in deferred tax assets for each temporary difference during the year is as follows:    |   |        |   |  |        | 
|                                          |  | Provisions:                                                                                         |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | Charged to the statement of profit or loss                                                          |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 
|                                          |  | Transactions costs on equity issue:                                                                 |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | (Charged)/Credited directly to equity                                                               |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 
|                                          |  |                                                                                                     |   |        |   |  |        | 
|                                          |  | Other                                                                                               |   |        |   |  |        | 
|                                          |  | Opening balance                                                                                     |   |        | - |  |        | 
|                                          |  | Charged/(Credited) to the statement of profit or loss                                               |   |        | - |  |        | 
|                                          |  | Closing balance                                                                                     |   |        | - |  |        | 



Deferred tax assets on losses to a value
of $1.7 million to date are not brought to account due to not being probable of being recovered. In addition, deferred tax assets
for deductible temporary differences of A$8.3 million and deferred tax liabilities for temporary differences of $NIL million have
not been brought to account.



31


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 22. | Issued Capital
| | --- | --------------





|Fully paid ordinary shares (Issued and                          |  | 2015   |            |  | 2015 |  |              | 2014   |  |  | 2014       | 
|--------------------------------------------------------------- |  | ------ | ---------- |  | ---- |  | ------------ | ------ |  |  | ---------- | 
|authorised)                                                     |  | Number |            |  | $    |  |              | Number |  |  | $          | 
|                                                                |  |        |            |  |      |  |              |        |  |  |            | 
|At the beginning of reporting period                            |  |        | 25,870,275 |  |      |  | 110,523,197  |        |  |  | 10,870,275 | 
|Ordinary shares issued                                          |  |        |            |  |      |  |              |        |  |  |            | 
|May 2014                                                        |  |        | -          |  |      |  | -            |        |  |  | 15,000,000 | 
|February 2015 - Shares issued pursuant to employee share scheme |  |        | 15,000,000 |  |      |  | -            |        |  |  | -          | 
|SuSub-total                                                     |  |        | 40,870,275 |  |      |  | 110,523,197  |        |  |  | 25,870,275 | 
|Shares capital reduction pursuant to Shareholder approval5      |  |        | -          |  |      |  | (110,000,000 | )      |  |  | -          | 
|At reporting date                                               |  |        | 40,870,275 |  |      |  | 523,197      |        |  |  | 25,870,275 | 



Ordinary shares participate in dividends
and the proceeds on winding up of the parent entity in proportion to the number of shares held.



At the shareholders meetings each ordinary
share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.



There were no warrants and options in
existence at reporting date.



| | a. | Options and
Performance Shares
| | -- | ------------------------------



For information relating to the Mission
NewEnergy Limited option and performance right plans, including details of options and performance shares issued, exercised and
lapsed during the financial year and the options outstanding at year-end, refer to the Remuneration report. At balance date there
are no options or performance share schemes in place.



| | b. | Capital Management
| | -- | ------------------



Management controls the capital of the
Group in order to maintain an appropriate debt to equity ratio, provide the shareholders with adequate returns and ensure that
the Group can fund its operations and continue as a going concern. Due to the stage that the business is in, managements preferred
approach is to fund the business with equity, however where equity funding is not available debt funding is considered. Management
reviews historic and forecast cash flows on a regular basis in order to determine funding needs.



The Group has no debt and capital includes
ordinary share capital, supported by financial assets.








5 As part of the ongoing restructure
of the Group and clean up of the Balance Sheet, Shareholders approved a reduction of accumulated losses through an offset against
a reduction of Share Capital.



32


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 23. | Reserves
| | --- | --------



| | 1. | Share based payments reserve
| | -- | ----------------------------



The share based payments reserve arose
on the issue of 150,000 shares to various officers of the Company.



Amounts are transferred out of the reserve
and into issued capital when the options are exercised, or if lapsed, then transferred to retained earnings.



| | 2. | Foreign currency translation reserve
| | -- | ------------------------------------



The foreign currency translation reserve
records exchange differences arising on translation of foreign controlled subsidiaries.



| | 3. | Convertible Notes Reserve
| | -- | -------------------------



The Convertible Notes reserve is used
to record the equity component, less the cost of issue, of the convertible notes. These notes were fully settled during the current
financial year.



33


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 24. | Capital and Leasing Commitments
| | --- | -------------------------------



|                                |  | 2015 $ |       |  | 2014 $ | 
|------------------------------- |  | ------ | ----- |  | ------ | 
|Operating Lease Commitments     |  |        |       |  |        | 
|- not later than 12months       |  |        | 8,303 |  |        | 
|- between 12 months and 5 years |  |        | -     |  |        | 
|- greater than 5 years          |  |        | -     |  |        | 
|                                |  |        | 8,303 |  |        | 



Mission Biofuels Sdn Bhd has entered into
a lease of one office in Kuala Lumpur, Malaysia. The lease expires on 30 April 2016.



Capital Expenditure Commitments



|                                                  |  | 2015 $ |   |  | 2014 $ | 
|------------------------------------------------- |  | ------ | - |  | ------ | 
|Capital expenditure commitments contracted for: - |  |        |   |  |        | 
|Acquisition and installation biodiesel plants6    |  |        | - |  |        | 
|                                                  |  |        | - |  |        | 



| | 25. | Contingent Liabilities and
                                         Contingent Assets
| | --- | -------------------------------------------------------------------------------------



The Group is not aware of any contingent
liabilities or contingent assets as at 30 June 2015.








6 This value was net of late delivery
charges and other costs and counter claims the Group believed was eligible to be offset against the completion payments of the
second biodiesel plant.



34


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 26. | Segment reporting
| | --- | -----------------



|Segment Report – 2015                                                  |  | Biodiesel Refining (Continuing Operations) |            |   | Corporate |  |            | Consolidated (Continuing Operations) |  |  | Discontinued Operations |   |  | Total (Continuing and Discontinued Operations) |         
|---------------------------------------------------------------------- |  | ------------------------------------------ | ---------- | - | --------- |  | ---------- | ------------------------------------ |  |  | ----------------------- | - |  | ---------------------------------------------- | --------
|                                                                       |  | 2015 $                                     |            |   | 2015 $    |  |            | 2015 $                               |  |  | 2015 $                  |   |  | 2015
$                                         |         
|Revenue                                                                |  |                                            |            |   |           |  |            |                                      |  |  |                         |   |  |                                                |         
|Revenue from external customers                                        |  |                                            | -          |   |           |  | -          |                                      |  |  | -                       |   |  |                                                | -       
|Interest received                                                      |  |                                            | 2,262      |   |           |  | 15,645     |                                      |  |  | 17,907                  |   |  |                                                | -       
|Other revenue                                                          |  |                                            | 999,195    |   |           |  | 7,245,011  |                                      |  |  | 8,244,206               |   |  |                                                | 679,364 
|Total segment revenue                                                  |  |                                            | 1,001,457  |   |           |  | 7,260,656  |                                      |  |  | 8,262,113               |   |  |                                                | 679,364 
|Employee benefits expense                                              |  |                                            | (200,912   | ) |           |  | (1,373,352 | )                                    |  |  | (1,574,264              | ) |  |                                                | -       
|Impairment reversal                                                    |  |                                            | 26,914,912 |   |           |  | -          |                                      |  |  | 26,914,912              |   |  |                                                | -       
|Depreciation and amortisation                                          |  |                                            | -          |   |           |  | (2,876     | )                                    |  |  | (2,876                  | ) |  |                                                | -       
|Finance costs                                                          |  |                                            | -          |   |           |  | (1,814,826 | )                                    |  |  | (1,814,826              | ) |  |                                                | -       
|Other expenses                                                         |  |                                            | (3,533,839 | ) |           |  | (691,873   | )                                    |  |  | (4,225,712              | ) |  |                                                | 260,371 
|Share of net profit of associate accounted for using the equity method |  |                                            | 37,510     |   |           |  | -          |                                      |  |  | 37,510                  |   |  |                                                | -       
|Segment result before tax                                              |  |                                            | 24,219,128 |   |           |  | 3,377,729  |                                      |  |  | 27,596,857              |   |  |                                                | 939,735 
|Income tax expense                                                     |  |                                            |            |   |           |  |            |                                      |  |  | (5,497                  | ) |  |                                                | -       
|Net profit before accumulated loss from discontinued operations        |  |                                            |            |   |           |  |            |                                      |  |  | 27,591,360              |   |  |                                                | 939,735 
|Non-controlling interest                                               |  |                                            |            |   |           |  |            |                                      |  |  | -                       |   |  |                                                | (141,202
|Net assets written off from discontinued operations                    |  |                                            |            |   |           |  |            |                                      |  |  | -                       |   |  |                                                | (32,648 
|Net profit / (loss) for the year                                       |  |                                            |            |   |           |  |            |                                      |  |  | 27,591,360              |   |  |                                                | 765,885 
|Non-current Segment assets                                             |  |                                            | 3,769,200  |   |           |  | 973        |                                      |  |  | 3,770,173               |   |  |                                                | -       
|Total Segment assets                                                   |  |                                            | 9,506,177  |   |           |  | 3,115,071  |                                      |  |  | 12,621,248              |   |  |                                                | -       
|Segment liabilities                                                    |  |                                            | (5,478,468 | ) |           |  | (377,224   | )                                    |  |  | (5,851,692              | ) |  |                                                | -       
|Acquisitions of property, plant and equipment                          |  |                                            | -          |   |           |  | -          |                                      |  |  | -                       |   |  |                                                | -       



35


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|Segment Reporting - 2014
|------------------------



|                                                                    |  | Biodiesel Refining
    (Continuing Operations) |            |   | Corporate |  |            | Consolidated (Continuing
    Operations) |  |  | Jatropha and Power
    Generation (India) (Discontinued Operations) |   |  | Refining (Malaysia)
    (Discontinued Operations) |           |   | Total (Continuing and
    Discontinued Operations) | 
|------------------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | --------- |  | ---------- | ---------------------------------------- |  |  | ------------------------------------------------------------------- | - |  | ------------------------------------------------- | --------- | - | -------------------------------------------------- | 
|                                                                    |  | 2014 $                                         |            |   | 2014 $    |  |            | 2014 $                                   |  |  | 2014 $                                                              |   |  | 2014 $                                            |           |   | 2014
    $                                         | 
|Revenue                                                             |  |                                                |            |   |           |  |            |                                          |  |  |                                                                     |   |  |                                                   |           |   |                                                    | 
|Revenue from external customers                                     |  |                                                | -          |   |           |  | -          |                                          |  |  | -                                                                   |   |  |                                                   | 140,021   |   |                                                    | 
|Interest received                                                   |  |                                                | -          |   |           |  | 1,231      |                                          |  |  | 1,231                                                               |   |  |                                                   | -         |   |                                                    | 
|Other revenue                                                       |  |                                                | 4,942      |   |           |  | 9,677,413  |                                          |  |  | 9,682,355                                                           |   |  |                                                   | -         |   |                                                    | 
|Total segment revenue                                               |  |                                                | 4,942      |   |           |  | 9,678,644  |                                          |  |  | 9,683,586                                                           |   |  |                                                   | 140,021   |   |                                                    | 
|Employee benefits expense                                           |  |                                                | (175,040   | ) |           |  | (1,201,663 | )                                        |  |  | (1,376,703                                                          | ) |  |                                                   | -         |   |                                                    | 
|Impairment                                                          |  |                                                | (255,410   | ) |           |  | (107,822   | )                                        |  |  | (363,232                                                            | ) |  |                                                   | 114,063   |   |                                                    | 
|Depreciation and amortisation                                       |  |                                                | -          |   |           |  | (7,412     | )                                        |  |  | (7,412                                                              | ) |  |                                                   | -         |   |                                                    | 
|Finance costs                                                       |  |                                                | -          |   |           |  | (4,862,648 | )                                        |  |  | (4,862,648                                                          | ) |  |                                                   | (56,044   | ) |                                                    | 
|Other expenses                                                      |  |                                                | (2,748,939 | ) |           |  | (933,569   | )                                        |  |  | (3,682,508                                                          | ) |  |                                                   | (60,464   | ) |                                                    | 
|Segment result before tax                                           |  |                                                | (3,174,447 | ) |           |  | 2,565,530  |                                          |  |  | (608,917                                                            | ) |  |                                                   | 137,576   |   |                                                    | 
|Profit/loss from ordinary activities before income
    tax          |  |                                                |            |   |           |  |            |                                          |  |  | (608,917                                                            | ) |  |                                                   | 137,576   |   |                                                    | 
|Income tax expense                                                  |  |                                                |            |   |           |  |            |                                          |  |  | -                                                                   |   |  |                                                   | -         |   |                                                    | 
|Net profit before accumulated
    loss from discontinued operations |  |                                                |            |   |           |  |            |                                          |  |  | (608,917                                                            | ) |  |                                                   | 137,576   |   |                                                    | 
|                                                                    |  |                                                |            |   |           |  |            |                                          |  |  |                                                                     |   |  |                                                   |           |   |                                                    | 
|Net assets written off from
    discontinued operations             |  |                                                |            |   |           |  |            |                                          |  |  | -                                                                   |   |  |                                                   | (268,865  | ) |                                                    | 
|Net profit
    / (loss) for the year                                |  |                                                |            |   |           |  |            |                                          |  |  | (608,917                                                            | ) |  |                                                   | (131,289  | ) |                                                    | 
|                                                                    |  |                                                |            |   |           |  |            |                                          |  |  |                                                                     |   |  |                                                   |           |   |                                                    | 
|Non-current Segment assets                                          |  |                                                | 633,056    |   |           |  | 3,368,600  |                                          |  |  | 4,001,656                                                           |   |  |                                                   | 155,441   |   |                                                    | 
|Non-current Segment assets – Assets held
    for sale               |  |                                                | -          |   |           |  | -          |                                          |  |  | -                                                                   |   |  |                                                   | 1,858,171 |   |                                                    | 
|Total Segment assets                                                |  |                                                | 677,845    |   |           |  | 3,371,421  |                                          |  |  | 4,049,266                                                           |   |  |                                                   | 2,015,009 |   |                                                    | 
|Segment liabilities                                                 |  |                                                | 56,772     |   |           |  | 15,343,714 |                                          |  |  | 15,400,486                                                          |   |  |                                                   | 1,746,144 |   |                                                    | 
|Acquisitions of property, plant and equipment                       |  |                                                | 35,780     |   |           |  | 4,231      |                                          |  |  | 40,011                                                              |   |  |                                                   | -         |   |                                                    | 



36


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




Segment reporting accounting Policies



The Group Chief Executive Officer is the
Chief operating decision maker. The reportable segments presented are in line with the segmental information reported during the
financial year to the Group Chief Executive Officer.



Segment revenues and expenses are those
directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists.
Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and
property, plant and equipment, net of allowances and accumulated depreciation and amortisation. Segment liabilities consist principally
of payables, employee benefits, accrued expenses and borrowings. Segment assets and liabilities do not include deferred income
taxes. Segments exclude discontinued operations.



Intersegment Transfers



Segment revenues, expenses and results
exclude transfers between segments.



Business and Geographical Segments



The Group had one key business segment,
being biodiesel, which is located in Malaysia



| | 27. | Cash Flow Information
| | --- | ---------------------



|Reconciliation of Cash Flow from
Operations with Profit (Loss) after Income Tax |  | 2015 $ |            |   | 2014 $ |  |            | 2013 $ | 
|------------------------------------------------------------------------------- |  | ------ | ---------- | - | ------ |  | ---------- | ------ | 
|Profit / (Loss) after income tax before non-controlling interests               |  |        | 4,187,192  |   |        |  | (608,917   | )      | 
|Loss for the year from discontinued operations                                  |  |        | -          |   |        |  | -          |        | 
|Non cash flows in profit / (loss)                                               |  |        |            |   |        |  |            |        | 
|Depreciation of plant and equipment – continued operations                      |  |        | 2,874      |   |        |  | 7,412      |        | 
|Depreciation of plant and equipment – discontinued operations                   |  |        | -          |   |        |  | -          |        | 
|Interest accrued                                                                |  |        | 870,703    |   |        |  | 761,514    |        | 
|Gain on the settlement/restructure of Convertible Note                          |  |        | (7,245,011 | ) |        |  | (9,671,893 | )      | 
|Amortisation of Equity portion of Convertible Note                              |  |        | 944,123    |   |        |  | 3,199,884  |        | 
|Provision for employee benefits                                                 |  |        | 27,883     |   |        |  | 13,555     |        | 
|Impairment of assets                                                            |  |        | -          |   |        |  | 29,336     |        | 
|Share based payment                                                             |  |        | 150,000    |   |        |  | -          |        | 
|Impairment of inventories                                                       |  |        | -          |   |        |  | -          |        | 
|Impairment of receivables and loans                                             |  |        | 672,510    |   |        |  | 333,896    |        | 
|Net cash (used in) operating activities before change in assets and liabilities |  |        | (389,726   | ) |        |  | (5,935,213 | )      | 
|                                                                                |  |        |            |   |        |  |            |        | 
|Change in assets and liabilities                                                |  |        |            |   |        |  |            |        | 
|(Increase) / decrease in receivables                                            |  |        | 3,123,545  |   |        |  | -          |        | 
|(Increase) / decrease in inventories                                            |  |        | -          |   |        |  | -          |        | 
|(Increase) / decrease in other assets                                           |  |        | (17,268    | ) |        |  | 136,959    |        | 
|(Increase) / decrease in deferred tax and current tax                           |  |        | 52         |   |        |  | (11        | )      | 
|Increase / (decrease) in creditors and accruals                                 |  |        | 316,172    |   |        |  | 22,491     |        | 
|Foreign Currency Adjustments                                                    |  |        | (3,581,046 | ) |        |  | 2,398,277  |        | 
|                                                                                |  |        | (158,545   | ) |        |  | (3,377,497 | )      | 
|Cash generated by discontinued operations                                       |  |        | 939,735    |   |        |  | 432,037    |        | 
|Cash generated / (used in) operations                                           |  |        | 391,464    |   |        |  | (2,945,460 | )      | 



37


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




Cash flows included above from discontinued
operations (being the Indonesian Palm Oil segment and the Mauritian holding company) are a net operating cash generation of $0.9
million (primarily from the gain on settlement of arbitration proceedings) for the period ended 30 June 2015 ($0.02 million loss
for 30 June 2014).



There were no non-cash investing activities
during the reported periods.



Credit Standby Facilities with Banks
and Funding Sources



|                |  | 2015 $ |   |  | 2014 $ | 
|--------------- |  | ------ | - |  | ------ | 
|Loan facilities |  |        | - |  |        | 
|Amount utilised |  |        | - |  |        | 
|                |  |        | - |  |        | 



| | 28. | Related Parties
| | --- | ---------------



There were no transactions with related
parties during the period other than with subsidiaries which were 100% wholly owned.



| | 29. | Financial Instruments
| | --- | ---------------------



Financial Risk Management



The Group has a financial risk management
policy in place and the financial risks are overseen by the Board. The Group’s financial instruments consist mainly of deposits
with banks, other financial assets, accounts payable, and loans to and from subsidiaries.



38


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




The principal risks the Group is exposed
to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk.



The Group does not have any financial
assets carried at fair value therefore no further disclosure in relation to the fair value hierarchy is presented. In addition
the group does not have any financial instruments that are subject to recurring or non-recurring fair value measurements.



Fair value of financial instruments



|                          |  | Carrying amount $ |           |  | Fair Value $ |  |           | Level 1 |  |  | Level 2 |  |  | Level 3 |  
|------------------------- |  | ----------------- | --------- |  | ------------ |  | --------- | ------- |  |  | ------- |  |  | ------- | -
|Financial assets          |  |                   |           |  |              |  |           |         |  |  |         |  |  |         |  
|Cash and cash equivalents |  |                   | 3,150,776 |  |              |  | 3,150,776 |         |  |  | -       |  |  |         | -
|Receivables (Current)     |  |                   | 77,340    |  |              |  | 77,340    |         |  |  | -       |  |  |         | -
|Financial liabilities     |  |                   |           |  |              |  |           |         |  |  |         |  |  |         |  
|Trade and other payables  |  |                   | 440,013   |  |              |  | 440,013   |         |  |  | -       |  |  |         | -
|Current loans             |  |                   | -         |  |              |  | -         |         |  |  | -       |  |  |         | -
|Non-current loans         |  |                   | -         |  |              |  | -         |         |  |  | -       |  |  |         | -



The fair value measurements are shown
by level of the following fair value measurement hierarchy:

| | · | Level
                                         1 - quoted prices (unadjusted) in active markets for identical as-sets or liabilities
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | · | Level
                                         2 - inputs other than quoted prices included within level 1 that are observable for the
                                         asset or liability, either directly or indirectly, and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level
                                         3 - inputs for the asset or liability that are not based on observable market data (unobservable
                                         inputs).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The fair value of cash and cash equivalents,
other financial assets, receivables, trade and other payables and current loans are short-term instruments in nature whose carrying
value is equivalent to fair value.



Interest rate risk



Interest rate risk is managed with floating
rate deposits.



Group sensitivity



At 30 June 2015, if interest rates had
changed by -/+ 25 basis points, with all other variables held constant, the following financial impacts would have been recorded
by the Group;



39


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | - | Effect
                                         on post tax profit – A$ Nil lower/higher (2014: A$ Nil lower/higher)
| | - | --------------------------------------------------------------------------------------------------------------------

| | - | Equity
                                         would have been – A$ Nil lower/higher (2014: A$ Nil lower/higher)
| | - | -----------------------------------------------------------------------------------------------------------------



Foreign currency risk



The Group operates internationally through
a number of subsidiaries and is thus exposed to fluctuations in foreign currencies, arising from the foreign currencies held in
its bank accounts, the sale of goods in currencies other than the Group’s measurement currency, and the translation of results
from investments in foreign operations. The foreign exchange exposures are primarily to the Malaysian Ringgit and the US dollar.



Foreign currency risks arising from commitments
in foreign currencies are managed by holding cash in that currency. Foreign currency translation risk is not hedged, with translation
differences being reflected in the foreign currency translation reserve.



Group sensitivity



At 30 June 2015, if foreign currencies
had changed by -/+ 10%, with all other variables held constant, the following financial impacts would have been recorded by the
Group;



Effect on cash and cash equivalent –
A$ 24,563 lower/ A$ 148,500 higher (2014: A$ 38,104 lower/ A$46,571 higher)



Profit and Loss would have been –
A$ 24,563 lower/ A$ 148,500 higher (2014: A$ 38,104 lower / A$ 46,571 higher)



Hedging of Foreign Currency Risk

At financial report date the Group had
no forward exchange contracts in place.



Credit risk

The following table sets out the credit
quality of financial assets:



|                                                                |  | 2015 $ |           |  | 2014 $ | 
|--------------------------------------------------------------- |  | ------ | --------- |  | ------ | 
|Cash and Cash Equivalents                                       |  |        |           |  |        | 
|Counterparties with external credit rating (Standard and Poors) |  |        |           |  |        | 
|A-1+                                                            |  |        | 3,037,914 |  |        | 
|P-2                                                             |  |        | 112,862   |  |        | 
|                                                                |  |        | 3,150,776 |  |        | 
|Other financial assets                                          |  |        |           |  |        | 
|Counterparties with external credit rating (Standard and Poors) |  |        |           |  |        | 
|A-1+                                                            |  |        | -         |  |        | 
|P-2                                                             |  |        | 5,580,022 |  |        | 
|                                                                |  |        | 5,580,022 |  |        | 





40


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




|                                              |  | 2015 $ |        |  | 2014 $ | 
|--------------------------------------------- |  | ------ | ------ |  | ------ | 
|Receivables                                   |  |        |        |  |        | 
|Counterparties without external credit rating |  |        |        |  |        | 
|Group 1                                       |  |        | 77,340 |  |        | 



Group 1 receivables relate receivables
under a cost award where proceeds were received in the following financial year.



Commodity Risk



As there was no inventory held as at 30
June 2015, the Group has no exposure to market prices of input costs into the production of biodiesel.



Liquidity risk



|                                                          |  |      |           |  |      |  |            | Weighted Average Interest Rate | 
|--------------------------------------------------------- |  | ---- | --------- |  | ---- |  | ---------- | ------------------------------ | 
|                                                          |  | 2015 |           |  | 2014 |  |            | 2015                           | 
|                                                          |  | $    |           |  | $    |  |            | %                              | 
|Financial Assets:                                         |  |      |           |  |      |  |            |                                | 
|Cash and cash equivalents                                 |  |      | 3,150,776 |  |      |  | 451,953    |                                | 
|Other financial assets                                    |  |      | 5,580,022 |  |      |  | -          |                                | 
|Loans and Receivables                                     |  |      | 77,340    |  |      |  | 3,549,653  |                                | 
|                                                          |  |      | 8,808,138 |  |      |  | 4,001,606  |                                | 
|                                                          |  |      |           |  |      |  |            |                                | 
|Financial Liabilities summarised by contractual maturity: |  |      |           |  |      |  |            |                                | 
|                                                          |  |      |           |  |      |  |            |                                | 
|Floating Interest Rate – less than 6 months               |  |      | -         |  |      |  | -          |                                | 
|Floating Interest Rate - 6 to 12 months                   |  |      | -         |  |      |  | -          |                                | 
|Fixed Interest Rate – 6 to 12 months                      |  |      | -         |  |      |  | -          |                                | 
|Non Interest Bearing                                      |  |      | -         |  |      |  | -          |                                | 
|Total Current Debt                                        |  |      | -         |  |      |  | -          |                                | 
|                                                          |  |      |           |  |      |  |            |                                | 
|Non-current debt                                          |  |      |           |  |      |  |            |                                | 
|                                                          |  |      |           |  |      |  |            |                                | 
|Floating Interest Rate (1 to 3 Years)                     |  |      | -         |  |      |  | -          |                                | 
|Floating Interest Rate (4 to 5 Years)                     |  |      | -         |  |      |  | -          |                                | 
|Fixed Interest Rate (1 to 3 Years)                        |  |      | -         |  |      |  | 15,124,986 |                                | 
|Fixed Interest Rate (4 to 5 Years)                        |  |      | -         |  |      |  | -          |                                | 
|Total Non-Current Debt                                    |  |      | -         |  |      |  | 15,124,986 |                                | 



The Group manages liquidity risk by monitoring
forecast cash flows and ensuring that adequate cash is maintained.



41


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 30. | Parent entity information
| | --- | -------------------------



|                                                                                                                 |  | 2015 |              |   | 2014 | 
|---------------------------------------------------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | 
|Information relating to Mission NewEnergy Limited:                                                               |  | $    |              |   | $    | 
|Current assets                                                                                                   |  |      | 6,845,637    |   |      | 
|Total assets                                                                                                     |  |      | 6,846,610    |   |      | 
|Current liabilities                                                                                              |  |      | (377,214     | ) |      | 
|Total liabilities                                                                                                |  |      | -            |   |      | 
|Net asset surplus / (deficit)                                                                                    |  |      | 6,469,396    |   |      | 
|Issued capital                                                                                                   |  |      | 418,635      |   |      | 
|Opening Retained loss                                                                                            |  |      | (138,994,472 | ) |      | 
|Share based payments reserve                                                                                     |  |      | 150,000      |   |      | 
|Convertible notes reserve                                                                                        |  |      | -            |   |      | 
|Total shareholders’ equity                                                                                       |  |      | (6,469,396   | ) |      | 
|Profit / (Loss) of the parent entity                                                                             |  |      | 26,339,390   |   |      | 
|Total comprehensive income of the parent entity                                                                  |  |      | 26,339,390   |   |      | 
|                                                                                                                 |  |      |              |   |      | 
|Details of any contingent liabilities of the parent entity                                                       |  |      | -            |   |      | 
|Details of any contractual commitments by the parent entity for the acquisition of property, plant or equipment. |  |      | -            |   |      | 



The parent entity is not aware of any
other contingent liabilities or contingent assets as at 30 June 2015.



| | 31. | Events occurring after
                                         the reporting period
| | --- | ------------------------------------------------------------------------------------



Other than the matters mentioned below,
there have been no significant subsequent events up until the date of signing this Financial Report.



On 5 August 2015 the Company announced
that the ongoing dispute with KNM Process Systems Sdn Bhd (KNM) has been amicably settled. The material terms of the settlement
are that Mission will pay to KNM A$4m, being the amount put aside by Mission upon the sale of Mission’s 250,000 tpa refinery
in February 2015, pursuant to a consent order agreed to by Mission and KNM earlier. Both parties have agreed to withdraw all other
claims and counter claims and will discontinue all legal actions against each other.



42


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 32. | Non-current assets held
                                         for sale and discontinued operations
| | --- | -----------------------------------------------------------------------------------------------------



During the current financial year Mission
Agro Energy Limited, and Oleovest PL have been deconsolidated from the Group financials with effect from 1 March 2015 due to an
effective change in control as a result of a settlement agreement with convertible note holders. Included in discontinued operations
is the reversal of the asset impairment on sale of the 250,000 tpa refinery, a gain on conclusion of the sale and a provision
raised for legal settlement of matters related to the refinery.



During the previous financial year Mission
Biofuels India PL and Mission Biotechnologies Sdn Bhd were treated as discontinued operations.



The revenue, expenditure and carrying
amount of the assets and liabilities in this disposal group are summarised as follows:



|Discontinued operations                                                                  |  | 2015 $ |            |   | 2014 $ |  |            | 2013 $ | 
|---------------------------------------------------------------------------------------- |  | ------ | ---------- | - | ------ |  | ---------- | ------ | 
|Revenue                                                                                  |  |        | 679,364    |   |        |  | 854,432    |        | 
|Cost of materials                                                                        |  |        | -          |   |        |  | -          |        | 
|Depreciation                                                                             |  |        | -          |   |        |  | -          |        | 
|Gain on sale of assets                                                                   |  |        | 991,354    |   |        |  | -          |        | 
|Legal settlement                                                                         |  |        | (5,211,269 | ) |        |  | -          |        | 
|Impairment reversal – non-current assets7                                                |  |        | 27,586,572 |   |        |  | -          |        | 
|Net Impairment – current assets                                                          |  |        | -          |   |        |  | 318,214    |        | 
|Other expenses and FX gains                                                              |  |        | 260,371    |   |        |  | (1,258,709 | )      | 
|Finance Costs                                                                            |  |        | -          |   |        |  | (56,044    | )      | 
|Income tax expense                                                                       |  |        | -          |   |        |  | (13,527    | )      | 
|Net assets written off on deconsolidation                                                |  |        | (32,648    | ) |        |  | (329,566   | )      | 
|Net gain / (loss) from discontinued operations                                           |  |        | 24,273,744 |   |        |  | (485,200   | )      | 
|Net gain / (loss) from discontinued operations attributable to non-controlling interests |  |        | (141,202   | ) |        |  | -          |        | 
|Net gain / (loss) from discontinued operations attributable to members of the parent     |  |        | 24,132,542 |   |        |  | (485,200   | )      | 



The assets in this disposal group were
deconsolidated during the current financial period.










7The assets were impaired in fiscal year ending June 30, 2010.



43


Mission NewEnergy Limited and Controlled Entities (ABN 63 117 065 719)




| | 33. | Company Details
| | --- | ---------------



The registered office of the company is:
Mission NewEnergy Limited, Unit B9, 431 Roberts Road, Subiaco, WA 6008, Australia.



The principal places of business are:



|Australia | Mission NewEnergy Limited
    Head Office 
    Unit B9, 431 Roberts Rd, Subiaco,
Western Australia, 6008, Australia.      | 
|--------- | ------------------------------------------------------------------------------------------------------------------------- | 
|          |                                                                                                                           | 
|Malaysia  | Mission Biofuels Sdn Bhd
        A-5-10 Empire Tower
        SS 16/1
        47500 Subang Jaya
        Selangor, Malaysia | 



| | 34. | Authorisation of financial
                                         statements
| | --- | ------------------------------------------------------------------------------



The consolidated financial statements for
the year ended 30 June 2015 (including comparatives) were approved by the Board of Directors on 31 August 2015.



Dato’ Nathan Mahalingam

Director





44