Benitec Biopharma Inc.
Annual Report 2017

Plain-text annual report

BENITEC BIOPHARMA LTD ANNUAL REPORT 2017 Giving disease the silent treatment ™ BENITEC  BIOPHARMA  LIMITED   Annual  Report  2017   Contents   Directors  Report   Corporate  governance   Auditor's  independence  declaration   Statement  of  profit  or  loss  and  other  comprehensive  income   Statement  of  financial  position   Statement  of  changes  in  equity   Statement  of  cash  flow   Notes  to  the  financial  statements   Directors’  declaration   Independent  auditor's  report  to  the  members  of  Benitec  Biopharma  Limited   Corporate  directory   Shareholder  information   General  information   1   26   27   28   29   30   31   32   57   58   62   63   The  financial  statements  cover  Benitec  Biopharma  Limited  as  a  Group  consisting  of  Benitec  Biopharma   Limited  and  the  entities  it  controlled  at  the  end  of,  or  during,  the  year.  The  financial  statements  are   presented   in   Australian   dollars,   which   is   Benitec   Biopharma   Limited's   functional   and   presentation   currency.   Benitec  Biopharma  Limited  is  a  listed  public  company  limited  by  shares,  incorporated  and  domiciled   in   Australia.   Benitec   Biopharma   Limited   shares   are   listed   on   the   Australian   Securities   Exchange   in   Australia  (ASX:  BLT)  it  is  also  listed  on  the  NASDAQ  Global  Select  Market  in  United  States  (NASDAQ:   BNTC;  NASDAQ:  BNTCW).   Its  registered  office  and  principal  place  of  business  is:   Suite  1201,  99  Mount  Street   North  Sydney  NSW  2060       A  description  of  the  nature  of  the  Group's  operations  and  its  principal  activities  are  included  in  the   Directors'  report,  which  is  not  part  of  the  financial  statements.   The  financial  statements  were  authorised  for  issue,  in  accordance  with  a  resolution  of  directors,  on   August  29,  2017.  The  directors  have  the  power  to  amend  and  reissue  the  financial  statements.   Chairman’s and CEO’s Letter Dear Shareholder We are pleased to present Benitec Biopharma’s Annual Report for the 2017 financial year. Over the past few years we have been focused on building a broad scientific pipeline of innovative therapeutics by harnessing the power of DNA-directed RNA interference (or ddRNAi). This unique platform technology combines gene therapy and gene silencing to change treatment paradigms of human disease. We are translating our science into measurable clinical outcomes which we are hopeful will result in significant patient benefit and commercial value for Benitec. 2017 has led us to the inflection point which we are now at, as we transition to becoming a clinical stage company once again. Reflecting on 2017, there were some key achievements that have defined our path to value creation. We note some of these were: • • • • • • • Nant Capital made a strategic investment in Benitec and brought in Phase II oncology clinical asset The European Union granted orphan drug designation for oculopharyngeal muscular dystrophy (OPMD) Initial OPMD ‘silence and replace’ preclinical data was published in Nature Communications Proof of concept established for our ocular delivery of gene therapy Pivotal preclinical efficacy data with BB-103 in hepatitis B Pre-IND meeting with US FDA informed a clear and expeditious path to the clinic for our hepatitis B asset Australian R&D grant income of A$10.5m for 2016-2017 fiscal year One of our prominent programs, BB-401 the antisense EGFR asset for head and neck squamous cell carcinoma, is scheduled to enter the clinic in a Phase 2 human study in the first quarter of calendar year 2018. EGFR is overexpressed in up to 90% of these types of lesions and BB-401 performed well in previous early stage clinical studies in patients with forms of the disease that was refractory to existing therapies. Manufacturing of the clinical supplies to support the Phase 2 trial commenced in May of this year and we have been working with a team of oncology key opinion leaders from the US, UK and Australia to review this prior clinical trial data and assist in designing a robust Phase 2 clinical study. Our second leading program, OPMD, is planned for clinic entry in the second half of calendar year 2018. OPMD is a rare progressive, muscle-wasting disease caused by mutation in the poly(A)-binding protein nuclear 1 gene, that is characterised by eyelid drooping, swallowing difficulties, and proximal limb weakness. There are currently no approved drugs for OPMD. Earlier in the year, we and our collaborators published preclinical data in the journal Nature Communications, which showed the utility of the ‘silence and replace’ based approach. It clearly demonstrated that the treatment could correct several phenotypes of the disease including significantly reducing the levels of fibrosis and intranuclear inclusions, the latter of which is the hallmark of the disease. It also showed muscle strength restoring back to normal levels in an animal model of the disease. More recently, we released news of a significantly improved construct for OPMD, through the development of our innovative single vector system to both silence and replace the OPMD disease- causing gene. We have demonstrated that this single ‘silence and replace’ vector system (termed BB-301) can restore muscular function in a preclinical mouse model that replicates this debilitating disease. Looking forward we anticipate meeting with the regulatory agencies in Canada, US as well as in Europe to discuss the planned IND-enabling studies and clinical development plan. We have engaged some of the world’s foremost clinicians and specialists in dysphagia to help develop the clinical platform and to advance BB-301 into the clinic as expeditiously as possible. We want to take this opportunity to thank our dedicated team who have served with distinction and thank our shareholders for their ongoing support. We remain committed to developing our ddRNAi technology, a novel combination of gene therapy and gene silencing, to change treatment paradigms of human disease. We look forward to an exciting year ahead and to becoming a multi-stage clinical company by the end of calendar year 2018. Peter Francis Chairman Greg West Chief Executive Officer BENITEC  BIOPHARMA  LIMITED   Directors'  Report   for  the  year  ended  June  30,  2017   The  directors  present  their  report,  together  with  the  financial  statements,  on  the  consolidated  entity   (referred  to  hereafter  as  the  'Group')  consisting  of  Benitec  Biopharma  Limited  (referred  to  hereafter   as  the  'Company'  or  'parent  entity')  and  the  entities  it  controlled  at  the  end  of,  or  during,  the  year   ended  30  June  2017.   Directors   The  following  persons  were  directors  of  the  Company  during  the  whole  of  the  period  and  up  to  the   date  of  this  report,  unless  otherwise  noted:   Mr  Peter  Francis  (Chairman)   Mr  Kevin  Buchi   Dr  John  Chiplin   Ms  Megan  Boston  (appointed  on  August  16,  2016)   Dr  Jerel  A  Banks  (appointed  on  October  26,  2016)   Mr  Iain  Ross  (retired  September  30,  2016)   Principal  activities   During  the  financial  year  the  principal  continuing  activities  of  the  Group  consisted  of  development  of   the  Group’s  therapeutic  pipeline  and  pre-­‐clinical  programs,  funding,  and  protecting  and  building  the   IP  estate.   The  Group  has  a  pipeline  of  in-­‐house  and  partnered  therapeutic  programs  based  on  its  patented  gene-­‐ silencing   technology,   ddRNAi.   It   is   developing   treatments   for   chronic   and   life-­‐threatening   human   conditions   such   as   oculopharyngeal   muscular   dystrophy,   oncology,   wet   age-­‐related   macular   degeneration,  and  hepatitis  B  based  on  this  technology.  In  addition,  the  Group  has  licensed  its  ddRNAi   technology  to  other  biopharmaceutical  companies  who  are  progressing  their  programs  towards  the   clinic  for  applications  including  HIV/AIDS,  retinitis  pigmentosa,  cancer  immunotherapy,  Huntington’s   disease,  and  intractable  neuropathic  pain.   Dividends   There  were  no  dividends  paid,  recommended  or  declared  during  the  current  or  previous  financial  year.   Result   The  loss  for  the  Group  after  providing  for  income  tax  amounted  to  $5.690m  (30  June  2016:  $24.778m).       The  $19.088m  reduction  in  loss  is  explained  by:   • Increase  in  R&D  Grant  income  of  $6.917m:  Grant  income  for  the  year  was  $10.507m.  This  was comprised  of  a  $6.274m  grant  received  during  the  year  for  the  12  months  ended  30  June  2016  and $4.233m  relating  to  the  inclusion  of  an  estimation  of  the  Grant  income  for  the  year  end  June  30, 2017.  In  the  current  reporting  period,  additional  detailed  reporting  systems  were  implemented  to allow  a  reliable  estimate  to  be  made  of  the  grant  income  that  is  expected  to  be  received  for  the current  period,  hence  grant  income  for  the  current  reporting  period  has  been  taken  to  account.    In the  previous  corresponding  period,  the  only  Grant  income  taken  to  account  was  $3.590m  for  the period  ending  June  30,  2015,  which  is  the  time  at  which  the  Grant  income  was  able  to  be  reliably estimated. Page  |  1 BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued   Results  continued   •   Reduction   in   R&D   development   cost   of   $6.362m:   R   and   D   expenditure   was   reduced   from   the   previous  year,  largely  due  to  inclusion  in  the  previous  year  of  $2.5m  expenditure  relating  to  the   acquisition   of   full   rights   of   a   preclinical   hepatitis   B   program   from   its   collaborator,   Biomics   Biotechnologies.    The  current  year  also  showed  the  effect  of  reduced  expenditure  on  the  cancelled   hepatitis  C  program  and  non-­‐small  cell  lung  cancer  program.   •   Employee  and  share  based  expenses  reduced  by  $2.628m:  Due  to  management  restructure  and   fewer  employee  options  being  issued.   IPO  cost  of  $1.191m  in  prior  period   •   •   Write  off  of  $1.800m  clinical  trial  prepayment  in  prior  period   Cash  flows   As  at  June  30,  2017,  the  Company  had  cash  on  hand  of  $17.375m.  This  was  a  decrease  of  $0.855m   from  June  30,  2016.This  was  due  to:   •   Capital  Raisings:  During  the  year,  the  Company  raised  $7.9m  in  two  placements   a)   On  October  24,  2016,  the  Company  entered  into  a  strategic  engagement  with  Nant  Capital,   LLC.   The   strategic   engagement   included   a   scientific   collaboration   in   clinical   programs   and   an   immediate  private  placement  to  Nant  Capital  LLC  of  29,305,819  ordinary  shares  in  the  Company,   representing  approximately  19.9%  of  the  company’s  outstanding  issued  capital  (for  a  post-­‐issue   holding  of  approximately  16.7%).  The  shares  were  priced  at  $0.0895  per  share,  representing  the  7-­‐ day  volume  weighted  average  price  of  the  ordinary  shares  on  the  ASX  prior  to  the  execution  of  a   share  purchase  subscription  agreement.   b)   On   March   13,   2017,   an   additional   29,305,819   fully   paid   ordinary   shares   were   issued   to   Nant   Capital   LLC   at   A$0.1859   per   share,   raising   A$5.45   million   for   the   Company.   As   a   result   of   this   placement  Nant  Capital  LLC  now  holds  28.57%  of  the  issued  capital.     •   Operating   Cash   Outflow:   Operating   cash   outflow   was   $8.304m   comprising   expenditure   of   $15.896m   offset   by   government   R&D   grant   received   of   $6.226m   and   other   cash   receipts   of   $1.366m.   Review  of  Operations   The   Company   is   developing   a   proprietary   therapeutic   technology   platform   that   combines   RNA   interference  with  gene  therapy  for  the  goal  of  providing  sustained  long-­‐lasting  silencing  of  disease-­‐ causing  genes  from  a  single  administration.   The  Company  is  using  this  technology,  called  DNA-­‐directed  RNA  interference,  or  ddRNAi,  to  develop  a   pipeline  of  product  candidates  in  several  chronic  and  life-­‐threatening  human  disease  areas,  such  as   oculopharyngeal   muscular   dystrophy   (‘OPMD’),   head   and   neck   squamous   cell   carcinoma   (HNSCC),   age-­‐related  macular  degeneration  (‘AMD’)  and  hepatitis  B  (‘HBV’).    By  combining  the  specificity  and   gene   silencing   effect   of   RNA   interference   with   gene   therapy,   ddRNAi   has   the   potential   to   produce   long-­‐lasting  silencing  of  disease-­‐causing  genes  from  a  single  administration,  which  could  eliminate  the   requirement  for  patient  compliance  to  take  regular  doses  of  medicine  for  long-­‐term  management  of   their  disease.   Page  |  2                             BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   The  Company’s  objective  is  to  become  the  leader  in  discovering,  developing,  clinically  validating  and   commercializing  ddRNAi-­‐based  therapeutics  for  a  range  of  human  diseases  with  high  unmet  clinical   need  or  large  patient  populations  and,  as  a  result,  provide  a  better  life  for  patients  with  these  diseases.     The  Company’s  strategy  to  accomplish  this  goal  is  to:   •   Continue  the  scientific  development  of  its  existing  pipeline  programs.   o   o   The   Company   will   continue   its   preclinical   research   efforts   for   its   ddRNAi   therapeutics   targeted  to  treat  patient  impacted  by  OPMD,  HNSCC,  AMD  and  HBV.    The  Company  is  also   finalizing  the  Phase  2  clinical  plans  for  BB-­‐401,  its  anti-­‐sense  EGFR  therapeutic  candidate   for   the   treatment   of   patients   with   HNSCC.     By   the   end   of   calendar   2018   the   Company   expects  to  be  in  the  clinic  for  HNSCC  and  OPMD.   The  Company  will  continue  to  advance  programs  in  core  disease  areas  to  the  appropriate   proof   of   concept   stage   before   it   may   seek   partnering   activities   for   each   program   to   co-­‐ develop   an   asset   with   pharmaceutical   companies.   Where   appropriate   it   will   seek   to   progress  programs  through  to  commercialization  itself.  For  example,  its  pipeline  program   to  treat  an  orphan  indication,  OPMD,  is  seen  as  a  candidate  for  this  latter  approach,  and  in   January  2017,  the  European  Commission  granted  Orphan  Drug  Designation  for  BB-­‐301  as   an  orphan  medicinal  product  for  the  treatment  of  OPMD.     •   Prioritise   the   future   development   of   its   ddRNAi   technology   by   identifying   new   diseases   and   ddRNAi  strategies  with  a  high  probability  of  commercial  success  and  value  to  shareholders.   o   o   Each  of  the  Company’s  key  pipeline  indications  are  directed  towards  diseases  with  high   unmet  medical  need  or  large  patient  populations.  The  Company  believes  there  is  a  strong   rationale  for  treating  these  diseases  and  other  diseases  that  have  well-­‐characterized  gene   targets   that   can   be   silenced,   thus   preventing   the   disease-­‐causing   gene   from   being   expressed.   In  addition  to  progressing  its  pipeline  of  product  candidates,  the  Company  will  further   develop   and   improve   its   ddRNAi   platform   technology   and   its   associated   intellectual   in-­‐licensing   of   complementary   property   technologies.  One  such  example  is  its  relationship  with  4D  Molecular  Therapeutics  LLC   (4DMT).     Under   the   collaboration   with   4DMT   the   Company   has   identified   novel   AAV   capsids  that  might  deliver  its  ddRNAi  constructs  to  the  retinal  cells  from  an  intravitreal   injection  to  treat  human  ocular  diseases.     in-­‐house   development   and   through   •   Establish  co-­‐development  agreements  with  other  companies  using  its  scientific  capability  and  IP   platform.       o   The   adaptability   of   the   Company’s   platform   also   presents   an   opportunity   for   it   to   selectively   form   collaborations   to   expand   its   capabilities   and   product   offerings   into   a   range   of   diseases   and   potentially   to   more   broadly   accelerate   the   development   and   commercialization  of  ddRNAi  therapeutics.     Page  |  3                       BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   Company  Pipeline   The  following  tables  set  forth  the  Company’s  product  candidates  and  their  development  status.   As   of   June   30   2017,   the   Company   has   four   key   pipeline   programs   in   development.   Highlights   of   progress  over  the  previous  year  include:   (1)   Oculopharyngeal  Muscular  Dystrophy  (OPMD):   The  Company  is  developing  BB-­‐301,  a  single  administration  ddRNAi-­‐based  gene  therapy  to  correct   the  gene  defect  which  causes  the  disease  and  to  address  many  of  the  limitations  of  therapeutic   approaches  currently  available  and  those  in  development  for  OPMD.   OPMD   is   an   autosomal-­‐dominant   inherited,   slow-­‐progressing,   late-­‐onset   degenerative   muscle   disorder   that   usually   starts   in   patients   during   their   40s   or   50s.   The   disease   is   manifested   by   progressive  swallowing  difficulties  (dysphagia)  and  eyelid  drooping  (ptosis).    OPMD  is  caused  by  a   specific  mutation  in  the  poly(A)-­‐binding  protein  nuclear  1,  or  PABPN1,  gene.  OPMD  is  a  rare  disease   and  has  been  reported  in  at  least  33  countries.  Patients  suffering  with  OPMD  are  well  identified   and   are   geographically   clustered,   which   we   believe   should   simplify   clinical   development   and   in   house  commercialisation. BB-­‐301  is  a  monotherapy  delivered  using  an  AAV  vector  and  is  designed  to  silence  the  expression   of  the  mutant  PABPN1  gene  in  esophageal  muscle  cells  of  OPMD  patients  while  simultaneously   introducing  a  silencing-­‐resistant  normal  form  of  the  gene.  We  believe  OPMD  is  well  suited  for  this   "silence   and   replace"   approach   since   the   genetic   mutation   is   well   characterized   and   the   target   tissue  is  relatively  small.  Once  validated,  we  believe  a  similar  approach  could  be  applied  to  other   inherited  disorders.   Page  |  4                               BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   Key  milestones  achieved  over  the  last  12  months  and  next  steps  include:     o   In  December  2016,  the  Company  signed  a  new  Research  and  Collaboration  Agreement  with  the   Royal   Holloway   University   of   London   (RHUL)   and   the   Institut   de   Myologie   (IM)   in   Paris   to   support  the  key  in  vivo  studies  with  BB-­‐301  for  the  treatment  of  OPMD.   o   In   January   2017,   the   Company   obtained   an   Orphan   Drug   Designation   from   the   European   Medicines  Agency  (EMA)  for  one  if  its  lead  clinical  candidate  for  the  treatment  of  OPMD.    This   designation  signifies  that  there  is  an  unmet  medical  need  for  OPMD  patients  and  provides  a   number   of   incentives   to   facilitate   the   clinical   development   of   our   innovative   gene   therapy   approach.       o   In  April  2017,  the  Company  announced  that  the  initial  pre-­‐clinical  efficacy  results  from  its  OPMD   collaboration   with   RHUL   and   IM   have   been   published   in   Nature   Communications.     The   key   results   from   these   studies   demonstrate   that   a   DNA   directed   RNA   interference   (ddRNAi)   approach  to  ‘silence  and  replace’  the  mutant  PABPN1  protein,  results  in  the  correction  of  the   muscular  dystrophy  and  of  key  clinical  features  of  OPMD  including  a  progressive  atrophy  and   muscle  weakness  associated  with  nuclear  aggregates  of  insoluble  PABPN1.    These  data  were   generated  in  the  A17  mouse  model  that  expresses  the  mutant  PABPN1  gene  and  mimics  most   of  the  features  of  human  OPMD  patients.   o   In  August  2017,  the  Company  announced  it  has  developed  a  new  single  vector  system  which   delivers  ddRNAi  constructs  to  both  silence  and  replace  the  mutant  gene  associated  with  OPMD.     The  single  vector  system  has  shown  activity  consistent  with  the  dual  vector  system  where  the   silence   and   replace   are   delivered   in   separate   vectors.     Being   a   single   product   simplifies   the   regulatory  process  and  reduce  the  complexity  of  the  clinical  strategy  for  BB-­‐301.    The  Company   considers   this   a   significant   advancement   not   only   for   the   OPMD   program,   but   also   in   the   potential  treatment  of  other  orphan  diseases.       o   The  Company  plans  to  advance  BB-­‐301  into  human  clinical  trials  in  the  second  half  of  2018.     (1)  Head  and  Neck  Squamous  Cell  Carcinoma:   Late  in  2016,  the  Company  acquired  rights  to  BB-­‐401  from  Nant  Capital  and  is  developing  BB-­‐401   for  the  treatment  of  HNSCC.    BB-­‐401  is  a  DNA  plasmid  that  produces  an  antisense  RNA  that  targets   the  EGFR  mRNA  and  prevents  its  translation  into  its  cognate  protein  by  a  mechanism  of  action  best   described  as  post  transcriptional  gene  silencing.    EGFR  is  the  cell-­‐surface  receptor  for  members  of   the   epidermal   growth   factor   family   (EGF   family)   of   extracellular   protein   ligands.     EGFR   is   a   well   validated  oncology  target  and  has  been  shown  to  be  a  key  driver  of  the  growth  of  HNSCC  lesions   with   more   than   80%   of   HNSCC   lesions   exhibiting   significantly   elevated   levels   of   EGFR   versus   concentrations  found  in  non-­‐malignant  tissues.     Head  and  neck  cancers  usually  begin  in  the  moist  mucosal  surfaces  inside  the  head  and  neck,  such   as   inside   the   mouth   and   the   throat.   According   to   GlobalData   (Head   and   Neck   Squamous   Cell   Carcinoma   –   Opportunity   Analysis   and   Forecast   to   2024,   February   2016),   approximately   64,000   new  patients  will  be  diagnosed  annually  in  the  United  States  with  HNSCC  and  50%  of  the  patients   are  expected  to  develop  recurrent  or  metastatic  disease,  with  approximately  13,000  annual  deaths   expected  in  the  United  States  from  HNSCC.   Page  |  5                   BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   Head  and  neck  cancers  are  more  than  twice  as  common  among  men  as  they  are  among  women.   Squamous  cell  carcinoma  of  the  head  and  neck  accounts  for  more  than  90%  of  all  head  and  neck   cancers,   and   more   than   50%   of   HNSCC   patients   present   with   Stage   III   or   higher   disease   (locally   advanced  or  metastatic),  which  has  higher  potential  for  progression  and  recurrence.    The  relative   five-­‐year  survival  rate  for  metastatic  head  and  neck  cancers  is  <38%,  and  can  be  as  low  as  4%  for   recurrent  or  metastatic  Stage  IV  disease.    Total  drugs  sales  in  the  HNSCC  markets  in  the  seven  major   markets   (United   States,   France,   Germany,   Italy,   Spain,   United   Kingdom   and   Japan)   will   increase   from  $386  million  in  2014  to  $1.53  billion  in  2024,  at  a  Compound  Annual  Growth  Rate  (CAGR)  of   14.8%.   Key  milestones  achieved  over  the  last  12  months  and  next  steps  include:     o   Prior  to  the  Company’s  relationship  with  Nant  Capital,  clinical  studies  were  completed  by   University   of   Pittsburgh   as   well   as   the   University   of   Texas   Health   Sciences   Center   that   explored   the   anti-­‐tumor   efficacy   of   BB-­‐401   in   recurrent   and   metastatic   patients   with   advanced  HNSCC.       The  first  Phase  I  study  involved  17  patients  with  lesions  that  were  unresponsive  to  standard   anti-­‐cancer  therapies.    In  this  study,  BB-­‐401  (referred  to  as  EGFR-­‐AS)  was  administered  to   target  malignant  lesions  once  per  week  for  four  weeks.      Key  findings  of  this  study  included:   Reductions  in  the  sizes  of  injected  malignant  lesions:   •   Five  of  the  patients  experienced  an  objective  response  which  provides  for  an  objective   response  rate  of  29%.    Two  subjects  experienced  a  100%  reduction  in  size  by  RECIST   and  three  patients  had  partial  responses  with  a  reduction  of  >30%  by  RECIST.   Thus  seven  patients,  or  41%,  reported  a  halt  in  disease  progression.   •   An  additional  two  patients  had  reductions  between  19%  and  29%  of  the  original  size.   •   The  mean  duration  of  anti-­‐tumor  response  was  6.5  months.       No  grade  3  or  grade  4  dose-­‐limiting  toxicities  were  noted  in  the  Phase  I  study.   A  second  Phase  I  study  of  six  patients  evaluated  the  potential  for  BB-­‐401  to  improve  the   efficacy  of  an  existing  multi-­‐agent  anti-­‐cancer  treatment  regimen  comprised  of  cetuximab   along  with  intensity-­‐modulated  radiotherapy,  which  has  been  approved  for  treatment  of   locally   or   regionally   advanced   HNSCC.   The   combination   of   cetuximab   with   radiation   therapy  has  a  demonstrated  ORR  of  74%.    Reductions  of  29%  more  were  noted  in  five  of   six   patients   treated   with   BB-­‐401   in   combination   with   radiation   therapy   and   cetuximab   resulting  in  an  ORR  of  83%.  We  intend  to  further  investigate  the  activity  of  single-­‐agent  BB-­‐ 401  and  to  determine  to  the  best  position  for  BB-­‐401  in  current  HNSCC  therapy.       The  Company’s  immediate  focus  for  BB-­‐401  is  on  initiating  a  phase  2  clinical  study  early  in   calendar  year  2018.   In  parallel  to  returning  BB-­‐401  to  the  clinic,  the  scientific  team  at  the  Company  is  using  its   ddRNAi   proprietary   technology   to   develop   BB-­‐501   which   will   be   able   to   silence   the   expression  of  EGFR  and  EGFR  variant  III.    The  clinical  data  obtained  from  BB-­‐401  study  will   be  used  to  inform  the  development  pathway  for  BB-­‐501.    The  hypothesis  is  that  if  we  can   silence   EGFR,   which   has   been   shown   to   be   drivers   of   lesion   growth   in   HNSCC,   then   the   lesions   should   shrink   or   be   eradicated   completely.     The   Company   has   completed   the   selection  and  optimisation  of  the  shRNAs  and  have  already  moved  into  mouse  xenograft   models   to   test   for   in   vivo   efficacy.     The   Company   anticipates   that   BB-­‐501   may   be   clinic   ready  in  calendar  2019.   Page  |  6     o   o   o   o   o   o   o               BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   (2)  Age-­‐related  macular  degeneration  (AMD):     The   Company   is   developing   a   ddRNAi-­‐based   therapy   for   the   treatment   of   wet   AMD,   which   is   designated  BB-­‐201.  The  ddRNAi  construct  in  BB-­‐201  expresses  three  independent  shRNAs  designed   to  inhibit  the  expression  of  genes  that  encode  for  VEGF-­‐a,  VEGF-­‐b  and  PGF.     The   delivery   vector   for   BB-­‐   201   is   comprised   of   a   novel   AAV   capsid   that   has   been   developed   in   collaboration  with  4DMT  and  is  designed  to  deliver  ddRNAi  constructs  to  the  retina  using  a  direct   intravitreal  injection.  The  aim  of  this  program  is  to  develop  a  therapeutic  that  provides  long-­‐term   treatment  of  AMD  from  a  single  intravitreal  injection.  We  believe  this  could  replace  the  need  for   regular   subretinal   injections   of   protein   based   therapeutics   into   the   eye,   which   is   the   current   standard  of  care.     AMD  is  one  condition  that  leads  to  the  deterioration  of  the  eye's  macula.  The  macula  is  a  small   area  in  the  retina  that  is  responsible  for  central  vision.  AMD  is  the  leading  cause  of  blindness  and   visual   impairment   in   older   adults,   often   involving   blood   vessel   overgrowth   and   damage   to   the   retina   resulting   in   the   loss   of   vision   in   the   central   visual   field.   The   vascular   endothelial   growth   factor,  or  VEGF-­‐a,  is  responsible  for  stimulating  the  new  blood  vessel  growth.  The  disease  occurs   in  two  forms,  wet  and  dry.  Dry  AMD  is  the  most  common  type  of  macular  degeneration  and  affects   85%  to  90%  of  the  people  with  AMD.  Dry  AMD  often  develops  into  wet  AMD.     Wet   AMD   is   the   more   advanced   type   of   AMD.   In   wet   AMD,   which   is   also   called   exudative,   or   neovascular,  AMD,  the  Bruch's  membrane  underlying  the  retina  thickens,  then  breaks.  The  oxygen   supply  to  the  macula  is  disrupted  and,  as  a  result,  new  abnormal  blood  vessels  grow  through  the   subretinal  membrane  towards  the  macula,  often  raising  the  retina.  The  blood  vessels  are  fragile,   and  often  leak  fluids  that  damage  the  macula.  VEGF-­‐a  is  a  key  molecule  known  to  stimulate  the   new  blood  vessel  growth  in  wet  AMD.  Although  the  wet  form  of  the  disease  affects  only  10%  to   15%   of   those   who   have   AMD,   wet   AMD   accounts   for   90%   of   the   severe   vision   loss   caused   by   macular  degeneration.     According  to  a  study  published  in  JAMA  Ophthalmology,  AMD  is  the  leading  cause  of  irreversible   vision  loss  in  the  United  States,  affecting  an  estimated  1.75  million  people.  It  is  estimated  that  196   million  people  will  be  affected  by  AMD  worldwide  by  2020  according  to  a  study  published  in  Lancet   Global  Health.     Key  milestones  achieved  over  the  last  12  months  and  next  steps  include:     o   In  November  2014,  the  Company  entered  into  a  collaboration  with  4D  Molecular  Therapeutics   (4DMT)   to   identify   novel   AAV   capsids,   the   protein   shell   that   helps   deliver   our   ddRNAi   constructs  into  retinal  cells.    As  a  result  of  this  collaboration  the  Company  has  been  able  to   demonstrate  enhanced  transduction  of  ocular  tissues  with  several  novel  AAV  capsids.        Being   able   to   deliver   drugs   in   therapeutically   relevant   concentrations   is   a   key   challenge   in   drug   development.     The   Company   believe   these   outcomes   demonstrate   the   commercial   applicability  of  having  a  vector  that  can  transduce  the  retina  following  an  intravitreal  injection.     The  AMD  program  is  the  first  program  in  this  space  and  the  Company  anticipates  being  able   to  build  a  ddRNAi  franchise  for  other  ocular  indications,  in  particular  retinal  diseases,  using   these  novel  viral  vectors  as  a  key  component  in  that  platform.   Page  |  7                     BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   o   The  Company  has  now  initiated  in  vivo  proof  of  concept  studies  in  which  these  novel  capsids   will  be  used  to  deliver  the  BB-­‐201  DNA  construct  that  expresses  an  shRNA  designed  to  silence   VEGF-­‐a,  VEGF-­‐b  and  PlGF  in  a  non-­‐human  primate  model  in  which  AMD  has  been  induced  by   the  treatment  of  the  retina  with  a  laser.     (3)  Hepatitis  B  –  BB-­‐101  and  BB-­‐103:   The  human  hepatitis  B  virus  is  a  small  DNA  virus  that,  according  to  the  WHO,  infects  up  to  240   million  people  worldwide,  resulting  in  up  to  780,000  deaths  per  year.  Infection  with  HBV  occurs  in   phases   ranging   from   a   silent,   acute   phase   that   can   be   resolved   by   the   immune   system   to   a   persistent  chronic  infection  requiring  life-­‐long  therapy.  In  the  case  of  a  chronic  HBV  infection,  the   presence  of  viral  proteins,  particularly  the  s-­‐antigen,  causes  hepatic  inflammation  leading  to  liver   dysfunction,  acute  hepatic  failure,  cirrhosis  or  hepatocellular  carcinoma.     According  to  GlobalData,  a  market  research  firm,  the  global  hepatitis  B  therapeutics  market  was   worth  $2.4  billion  in  2014,  and  is  expected  to  reach  a  total  of  $3.0  billion  by  2024  at  a  compound   annual  growth  rate  of  2.4%  (GlobalData,  2016).  The  current  therapies  used  as  standard  of  care  for   HBV   consist   of   antivirals   composed   of   nucleotide   and   nucleoside   analogues,   or   NUCs,   and,   less   commonly,  interferon  therapy.     The   Company   is   developing   BB-­‐103   to   address   many   of   the   limitations   of   therapeutics   for   HBV   currently  on  the  market  and  those  in  development.  BB-­‐103  is  designed  to  be  single  administration   ddRNAi-­‐based   therapies   that   is   delivered   using   a   gene   therapy   vector   that   targets   the   liver   and   inhibits  viral  replication  and  s-­‐antigen  production  on  a  long-­‐term  basis.  The  Company  believes  that   combining  BB-­‐103  with  a  nucleoside  inhibitor,  a  class  of  drugs  currently  used  to  treat  the  HBV  in   infected   individuals,   will   help   spur   the   patient’s   own   immune   system   to   produce   anti-­‐s-­‐antigen   antibodies  and  eliminate  their  daily  anti-­‐viral  treatments  to  control  disease. Key  milestones  achieved  over  the  last  12  months  and  next  steps  include:   o   In  December  2016,  the  Company  released  data  showing  that  single  administration  of  either   BB-­‐101,  BB-­‐102,  or  BB-­‐103  demonstrated  a  robust  and  sustained  suppression  of  HBV  in  an  in   vivo  model  when  paired  with  current  standard  of  care  agents  used  to  treat  the  disease.    Having   this  magnitude  of  impact  on  the  viral  burden  in  this  model  of  HBV  infection  gives  the  Company   a  high  degree  of  confidence  to  further  progress  the  lead  candidate  towards  the  clinic. In  February  2017,  at  the  APASL  conference  in  Shanghai,  the  Company  presented  the  totality   of   preclinical   data   demonstrating   that   ddRNAi   constructs,   in   combination   with   standard   of   care   therapies,   have   the   potential   to   become   a   new   treatment   paradigm   to   meet   the   significant  unmet  medical  need  in  this  indication.       In   April   2017,   the   Company   completed   a   pre-­‐IND   submission   with   the   US   Food   and   Drug   Administration   (FDA)   in   which   the   feedback   provided   from   the   agency   defined   a   clear   and   expeditious  path  towards  the  clinic.       The  Company  has  been  working  closely  with  its  Key  Opinion  Leaders  and  clinicians  to  finalise   the  design  of  the  protocol  for  the  BB-­‐103  human  study.     The  Company  is  seeking  partnerships  to  move  the  program  into  the  clinic.   o   o   o   o   Page  |  8                     BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   In  addition  to  its  in-­‐house  development  programs,  the  Company  has  licensed  its  ddRNAi  technology   to  companies  who  are  developing  therapeutic  programs  in  disease  areas  that  are  of  its  owns  pipeline   areas.   o   o   o   HIV/AIDS:  In  March  2012,  Benitec  granted  a  non-­‐exclusive,  royalty-­‐bearing,  worldwide  license   to   a   U.S.   based   biotechnology   company,   Calimmune,   Inc.   Under   the   agreement,   Calimmune   could  develop,  use  and  commercialise  ddRNAi  to  silence  up  to  three  targets  for  the  treatment   or  prevention  of  HIV/AIDS.  Calimmune's  approach  was  developed  with  core  technology  from   the  laboratory  of  Dr.  David  Baltimore,  a  Nobel  Laureate  in  the  area  of  HIV/AIDS,  and  involves   silencing   the   gene   that   codes   for   a   receptor   protein   known   as   CCR5.   Calimmune's   HIV/AIDS   treatment  is  known  as  Cal-­‐1.    In  2013,  Calimmune  commenced  a  Phase  I/IIa  clinical  trial  of  Cal-­‐ 1.  The  goal  of  the  trial  is  to  assess  the  safety  of  the  therapy,  to  determine  the  ease  of  use  and   feasibility  of  the  approach  for  HIV/AIDS  patients  and  to  evaluate  what,  if  any,  side  effects  there   may  be.    The  study  is  ongoing  with  data  readouts  expected  in  2017.   Cancer  Immunotherapy:  In  August  2013,  an  exclusive,  royalty-­‐bearing,  worldwide  license  was   granted   to   a   U.S.-­‐based   biotechnology   company,   Regen   Biopharma   Inc.   to   use   ddRNAi   for   silencing   expression   of   indoleamine   2,3—dioxygenase,   or   IDO,   in   dendritic   cells.   Regen   is   developing   a   cancer   immunotherapy   using   the   licensed   technology.   IDO   is   associated   with   immune-­‐suppression   and   is   overexpressed   in   some   cancers.   Regen   has   reported   preclinical   evidence   that   modification   of   these   cells   using   ddRNAi   targeting   the   silencing   of   IDO   may   significantly  enhance  their  efficacy  in  cancer  immunotherapy.  Regen's  first  treatment,  which  is   for  breast  cancer,  is  called  dCellVax.     Retinitis  Pigmentosa:  In  July  2012,  an  exclusive,  royalty-­‐bearing,  worldwide  license  was  granted   to   Ireland-­‐based   biotechnology   company,   Genable   Technologies   Limited   to   use,   develop   or   commercialise  RNAi  for  treatment  or  prevention  of  retinitis  pigmentosa.  Genable's  treatment   involves   suppression   of   the   mutant   and   normal   genes,   and   replacement   with   a   normal   RHO   gene  that  has  been  modified  to  be  resistant  to  ddRNAi  gene  silencing.  Genable  has  reported   that  it  established  proof  of  concept  in  an  in  vivo  model  of  the  disease.  Genable's  treatment  for   retinitis   pigmentosa,   GT308,   is   named   RhoNova.     RhoNova™   has   been   granted   Orphan   Drug   Designation  in  both  the  U.S.  and  Europe  in  addition  to  the  Advanced  Therapy  Medicinal  Product   designation  from  the  European  Medicines  Agency.  In  March  2016,  Spark  Therapeutics  acquired   Genable   Technologies   Limited   for   a   combination   of   cash   and   common   stock.     Spark   has   indicated  support  for  continuing  the  development  of  RhoNova™.     o   Huntington’s   disease:   In   December   2012,   Benitec   granted   a   non-­‐exclusive,   royalty-­‐bearing,   worldwide  license  to  a  Netherlands-­‐based  biotechnology  company,  uniQure  biopharma  B.V.  to   use,  develop  or  commercialise  RNAi  therapeutics  for  Huntington's  disease.     Intractable   Neuropathic   Pain:   In   November   2014,   an   exclusive,   royalty-­‐bearing,   worldwide   license   was   granted   to   a   U.S.-­‐based   biotechnology   company,   Circuit   Therapeutics,   Inc.   to   use   ddRNAi  for  the  development  of  treatments  for  and  the  prevention  of  pain.     o   Intellectual  property   Benitec   manages   a   substantial   portfolio   of   patents   relating   to   the   ddRNAi   platform   technology,   improvements   to   this   technology   and   its   pipeline   programs.     The   Company   continues   to   hold   a   dominant  position  in  the  field  of  expressed  RNAi  and  it  defends  its  position  in  this  space.    With  the     Page  |  9                   BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Review  of  Operations  continued   Intellectual  property  continued   limited   patent   term   remaining   on   the   platform   patents   licensed   from   CSIRO,   Benitec’s   focus   has   increasingly  been  on  establishing  patent  protection  for  its  pipeline  and  products  in  development  with   the  aim  of  securing  competitive  and  commercially  relevant  intellectual  property  position  for  each  of   its  programs.       Commercialisation     The  Company  evaluates  and,  when  appropriate,  enters  into  collaborations  to  expand  its  capabilities   and   product   offerings   into   a   range   of   diseases   and   potentially   to   more   broadly   accelerate   the   development  and  commercialisation  of  ddRNAi  therapeutics.       o   o   o   Therapeutic  product  partnering/out-­‐licensing  to  pharmaceutical  partners:     o   The  Company  utilises  its  in-­‐house  research  and  development  resources  to  discover,  evaluate  (in   preclinical  and  clinical  studies),  a  range  of  novel  ddRNAi  therapeutics.  The  Company  is  currently   focused  on  several  therapeutic  areas  –  oncology,  infectious  disease,  ocular  disease,  and  orphan   indications  associated  with  rare  genetic  mutations.   The   Company   may   seek   to   partner   these   therapeutic   programs   with   leading   pharmaceutical   partners   in   the   relevant   disease   areas   as   they   reach   key   pre-­‐clinical   or   clinical   development   milestones.    R&D  collaborations  and  with  pharmaceutical  partners  and  specialised  biotechs;   The  Company  has  unique  expertise  in  developing  ddRNAi  therapeutics  utilising  a  range  of  viral   vectors,  including  novel  viral  vectors  for  ocular  disease,  as  well  as  evaluating  non-­‐viral  delivery   platforms.  This  expertise,  combined  with  internal  capabilities  for  process  development  and  small   scale  manufacturing  is  a  powerful  drug  discovery/development  platform. The   Company   is   therefore   ideally   placed   to   become   the   partner   of   choice   for   pharmaceutical   companies  looking  to  enter  the  field  of  non-­‐viral  and  viral  vector-­‐based  gene  therapy  and  gene   silencing   therapeutics   as   a   differentiated   approach   to   disease   targets.   Such   partnerships   may   include   de   novo   discovery   and   development   designed   to   silence   (and   replace   if   required)   the   partner’s  chosen  protein  target(s)  within  a  single  therapeutic  to  provide;  a)  more  effective  drug   targeting,  b)  “in-­‐situ”  therapeutic  expression,  and  c)  potent  “single  administration”  multi-­‐target   therapies.  Business  development  activities  based  on  proactive  engagement  with  biotechnology   and  pharmaceutical  companies  remains  a  major  focus  for  the  Company,  primarily  in  the  following   areas:   o   o   o   Partnering   pipeline   programs   by   co-­‐development   or   licensing   to   other   biotechnology   and   pharmaceutical  companies;   Collaborating   with   biotechnology   and   pharmaceutical   companies   on   nominated   targets   using  Benitec’s  ddRNAi  technology;  and   Licensing  ddRNAi  to  commercial  users  of  the  technology.     The   Company   continues   to   generate   strong   interest   from   a   number   of   potential   partners   with   a   particular  focus  on  hepatitis  B,  AMD  and  the  ddRNAi  platform.   Page  |  10                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Significant  changes  in  the  state  of  affairs   During  the  year  the  Company  had  the  following  significant  changes  in  the  state  of  affairs:   Restructuring  of  Senior  Executive  team   Benitec   announced   a   restructure   of   its   executive   team   with   appointment   of   Mr   Greg   West   as   permanent  CEO.   Dr  Cliff  Holloway  as  Chief  Business  and  Operating  Officer,  and  Mr  Bryan  Dulhunty  as  Chief  Financial   Officer.     The   changes   signify   an   important   new   era   for   the   Company   and   strengthens   its   core   capabilities   with   their   combined   expertise   in   global   biotechnology   and   biopharmaceutical   sectors.     Benitec  remains  committed  to  its  articulated  strategy  to  develop  and  enhance  its  ddRNAi  technology   platform,  establish  co-­‐development  and  collaboration  arrangements  for  non-­‐pipeline  projects,  and  to   out-­‐license  ddRNAi  to  companies  that  are  developing  therapeutic  programs  independently.   On  appointment  of  Mr  West  as  CEO,  Mr  West  was  granted  2.2million  options  vesting  over  3  years  and   expiring  in  5  years.  The  exercise  price  is  16.65  cents  per  option.   Appointment  and  resignation  of  Directors  and  Audit  and  Risk  Committee  Chair   Benitec  announced  the  appointment  of  Ms  Megan  Boston  as  Director  of  the  Company  and  Chair  of   the   Audit   and   Risk   Committee   on   the   16   of   August   2016.     Ms   Boston   has   significant   experience   in   finance,  audit,  risk  management,  compliance  and  corporate  governance  sectors  with  listed  entities   and  government  organisations  in  Australia.  Mr.  Iain  Ross  stepped  down  as  Chair  of  the  Audit  and  Risk   Committee  on  the  appointment  of  Ms  Boston.  Mr  Ross  resigned  as  a  director  on  September  30,  2016.   Benitec  announced  the  appointment  of  Dr  Jerel  Banks  as  a  director  of  the  Company  on  26  October   2016.    Dr  Banks  is  the  Chief  Investment  Officer  of    Nant    Capital,    LLC.  Prior  to  joining    Nant    Capital,     LLC,     Dr   Banks   served   as   vice   president,   portfolio   manager   and   research   analyst   for   the   Franklin   Biotechnology  Discovery  Fund  at  Franklin  Templeton  Investments  from  2012  to  2015.   Placement  of  Shares     On  October  24,  2016,  the  Company  entered  into  a  strategic  engagement  with  Nant  Capital,  LLC.  The   strategic  engagement  included  a  scientific  collaboration  in  clinical  programs  and  an  immediate  private   placement   to   Nant   Capital   LLC   of   29,305,819   ordinary   shares   in   the   Company,   representing   approximately  19.9%  of  its  then  outstanding  issued  capital  (for  a  post-­‐issue  holding  of  approximately   16.7%).  The  shares  were  priced  at  $0.0895  per  share,  representing  the  7-­‐day  volume  weighted  average   price   of   the   ordinary   shares   on   the   ASX   prior   to   the   execution   of   a   share   purchase   subscription   agreement.   On  March  13,  2017,  an  additional  29,305,819  fully  paid  ordinary  shares  were  issued  to  Nant  Capital   LLC  at  A$0.1859  per  share,  raising  A$5.45  million  for  the  Company.  As  a  result  of  this  placement  Nant   Capital  LLC  held  28.57%  of  the  issued  capital.     There  were  no  other  significant  changes  in  the  state  of  affairs  of  the  Group  during  the  financial  year.     Page  |  11                                   BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Matters  subsequent  to  the  end  of  the  financial  year   No   matter   or   circumstance   has   arisen   since   30   June   2017   that   has   significantly   affected,   or   may   significantly   affect   the   Group's   operations,   the   results   of   those   operations,   or   the   Group's   state   of   affairs  in  future  financial  years.   Likely  developments  and  expected  results  of  operations   The   Group   will   continue   to   progress   programs   through   the   clinic,   seek   commercialisation   opportunities  with  big  Pharma  and  others  for  its  unique  IP,  develop  its  therapeutic  pipeline  and  pre-­‐ clinical  programs,  protect  and  build  the  Group’s  IP  estate  and  secure  adequate  funding.  Refer  to  OFR   for  further  commentary.   Environmental  regulation   The  Group  is  not  subject  to  any  significant  environmental  regulation  under  Australian  Commonwealth   or  State  law.   Information  on  directors   Name:   Title:   Qualifications:   Experience  and  expertise:   Mr  Peter  Francis     Non-­‐Executive  Chairman   LLB,  Grad  Dip  (Intellectual  Property)   Peter   is   a   partner   at   Francis   Abourizk   Lightowlers   (‘FAL’),   a   firm   of   commercial  and  technology  lawyers  with  offices  in  Melbourne.  He  is   a  legal  specialist  in  the  areas  of  intellectual  property  and  licensing  and   provides  legal  advice  to  a  large  number  of  corporations  and  research   bodies.   Optiscan  Imaging  Limited,  Rision  Ltd  and  Neuroscope  Ltd  (public  non   listed)   Former  directorships  (last  3  years):   None   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Member  of  the  Remuneration  and  Nomination     424,174  ordinary  shares   1,400,000  options  over  ordinary  shares   Other  current  directorships:   Name:   Title:   Qualifications:   Experience  and  expertise:   Dr  Jerel  Banks   Non-­‐Executive  Director     Dr.   Banks   earned   an   M.D.   from   the   Brown   University   School   of   Medicine   and   a   Ph.D.   in   Organic   Chemistry   from   Brown   University,   and  he  holds  an  A.B.  in  Chemistry  from  Princeton  University.   Dr.  Banks  is  the  Chief  Investment  Officer  of    Nant    Capital,    LLC.  Prior     to    joining    Nant    Capital,    LLC,    Dr.  Banks  served  as  vice  president,   portfolio   manager   and   the   Franklin   Biotechnology   Discovery   Fund   at   Franklin   Templeton   Investments   from  2012  to  2015.     GlobeImmune,  Inc   research   analyst   for   Other  current  directorships:   Former  directorships  (last  3  years):   Nil     Page  |  12                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Information  on  directors  continued   Dr  Jerel  Banks  continued   Nil     Nil   Nil     Name:   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Name:   Title:   Qualifications:   Experience  and  expertise:   Ms  Megan  Boston  (appointed  16  August  2016)   Non-­‐Executive  Director     B.Comm,  CA,  GAICD,  Grad  Diploma  Share  Trading   Ms   Megan   Boston   is   formerly   the   Managing   Director   of   a   listed   technology   company   specialising   in   shareholder   communications,   investor  relations  and  voting.    Megan  holds  a  Bachelor  of  Commerce   and  is  a  Chartered  Accountant  with  over  10  years’  experience  as  a   non-­‐executive  Director  across  a  range  of  industries.    She  has  chaired   company  boards  as  well  as  board  sub-­‐committees  particularly  in  the   area   of   finance   and   risk   management.   Megan   has   completed   the   Company  Directors  Course  Diploma  run  by  the  Australian  Institute  of   Company  Directors.    Previously,  Megan  held  senior  executive  roles  at   various   banking   institutions   in   the   area   of   risk   and   compliance,   as   well  as  working  for  PricewaterhouseCoopers. None   listed)   Chair  of  the  Audit  and  Risk  Committee.     Nil   Nil   Mr  Kevin  Buchi   Non-­‐Executive  Director     BA  (Chemistry),  MBA,  CPA   Kevin  most  recently  servefnas  the  CEO  of  TetraLogic  Pharmaceuticals   Corporation,   a   public   U.S.   Biotechnology   company.     Prior   to   that,   Kevin   served   as   Chief   Executive   Officer   (‘CEO’)   of   Cephalon,   Inc.   through  its  $6.8  billion  acquisition  by  Teva  Pharmaceutical  Industries   (‘Teva’)   in   October   2011.   After   the   acquisition,   he   served   as   Corporate   Vice   President,   Global   Branded   Products   of   Teva.   Kevin   joined   Cephalon,   Inc.   in   1991   and   held   various   positions,   including   Chief  Operating  Officer,  Chief  Financial  Officer  and  Head  of  Business   Development  prior  to  being  appointed  CEO.   Impax  Labs   Other  current  directorships:   Former  directorships  (last  3  years):   Omni   Market   Tide   Limited   (ASX)   and   Neuroscope   Ltd   (public   non   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Name:   Title:   Qualifications:   Experience  and  expertise:   Other  current  directorships:   Former  directorships  (last  3  years):   TetraLogic   Paharmaceuticals,Stemline   Therapeutics,   Inc.,   Forward   Epirus   Pharmaceuticals,   and   Inc.   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Pharma   A/S,   Alexza   Biopharmaceuticals,  Inc.   Member  of  the  Audit  and  Risk  Committee     861,539  ordinary  shares   1,240,000  options  over  ordinary  shares   Page  |  13                   BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Information  on  directors  continued   Name:   Title:   Qualifications:   Experience  and  expertise:   Dr  John  Chiplin   Non-­‐Executive  Director     BPharm,   MRPharmsS,   Ph.D   (Pharmacy)   from   the   University   of   Nottingham,  Nottingham,  United  Kingdom.   John   is   a   founder   of   and   has   served   as   a   Managing   Director   of   investment   company,   Newstar   Ventures   Ltd.,   since   1998.   More   recently,   he   has   served   as   a   director   of   Medistem,   Inc.   through   its   acquisition   by   Intrexon   Corporation   in   2014,   as   founding   Chief   Executive  Officer  of  Arana  Therapeutics  Limited  from  2006  through   its  acquisition  by  Cephalon,  Inc.  in  2009,  as  director  of  Domantis  Ltd   through   its   acquisition   by   GlaxoSmithKline   plc   in   2006,   and   as   Managing  Director  of  ITI  Life  Sciences  Fund  from  2003  to  2005.  He   currently  serves  on  the  board  of  directors  of  Adalta  Pty  Ltd(1AD.AX),   Batu  Biologics  Inc.,  Cynata  Therapeutics  Limited  (CYP.AX),  Prophecy   Inc.,   ScienceMedia   Inc.,   Scancell   Holdings   plc   (SCLP.L,   Executive   Chairman),   Sienna   Cancer   Diagnostics   (SDX.AX)   and   The   Coma   Research  Institute.   As  above   Other  current  directorships:   Former  directorships  (last  3  years):   Medistem,  Inc.  (MEDS.US)   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Chair  of  the  Remuneration  and  Nomination  Committee   200,000  ordinary  shares   840,000  options  over  ordinary  shares   Name:   Title:   Qualifications:   Experience  and  expertise:   Mr  Iain  Ross  (Resigned  30  September  2016)   Non-­‐Executive  Director     B.Sc  (Hons),  C.Dir   Iain  has  over  30  years’  experience  in  the  international  life  sciences   sector.  Following  a  career  with  multi-­‐national  companies  including   Sandoz,  Fisons  plc  and  Hoffman  La  Roche,     Anatara  Lifesciences  Limited  (ASX);  Novogen  Limted  (ASX);  Premier   Veterinary  Group  plc  (LSE),  and  e-­‐Therapeutics  plc  (LSE)   Other  current  directorships  up  to   date  of  resignation:   Former  directorships  (last  3  years):   Ark   Therapeutics   Group   plc;   Amarantus   Biosciences;   Coms   plc   and   Special  responsibilities:   Interests  in  shares:   Interests  in  options:   Tissue  Therapies  Limited   Chair   of   the   Audit   and   Risk   Committee   and   member   of   the   Remuneration   and   Nomination   Committee   (stepped   from   being   Chairman  on  16  August  2016  but  remains  on  the  Committee)       66,364  ordinary  shares   1,240,000  options  over  ordinary  shares  (lapsed  on  retirement)   Other   current   directorships   quoted   above   are   current   directorships   for   listed   entities   only   and   excludes  directorships  of  all  other  types  of  entities,  unless  otherwise  stated.   Former  directorships  (last  3  years)  quoted  above  are  directorships  held  in  the  last  3  years  for  listed   entities  only  and  excludes  directorships  of  all  other  types  of  entities,  unless  otherwise  stated.   Page  |  14                             BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued CEO  and  Company  secretary   Mr  Greg  West  was  appointed  CEO  on  the  10th  August  2016  having  filled  the  interim  CEO  position   since  December  2015.  Greg  has  spent  the  last  10  years  in  CFO  roles  in  the  listed  biotech  sector.  Greg   is  a  Chartered  Accountant  with  experience  in  investment  banking,  financial  services  and  ASX-­‐listed   start-­‐ups  in  the  biotech  sector.  Previously,  he  has  worked  at  Price  Waterhouse  and  has  held  senior   finance  executive  roles  in  investment  banking  with  Bankers  Trust,  Deutsche  Bank,  NZI  and  other   financial  institutions.   Meetings  of  directors   The   number   of   meetings   of   the   Company's   Board   of   Directors   ('the   Board')   and   of   each   Board   committee  held  during  the  year  ended  30  June  2017,  and  the  number  of  meetings  attended  by  each   director  were:   Full  Board   Attended   10   7   10   10   11   Full  Board   Held   11   7   10   11   11   Audit  and  Risk   Committee   Attended   3   n/a   4   3   n/a     Held   3     n/a   4   4     n/a   Remuneration  and   Nominations   Committee   Attended   2   n/a   n/a   n/a   2   Held   2   n/a   n/a   n/a   2   Peter  Francis   Jerel  Banks   Megan  Boston   Kevin  Buchi   John  Chiplin   Held:   represents   the   number   of   meetings   held   during   the   time   the   director   held   office   or   was   a   member  of  the  relevant  committee.   Remuneration  report   The  remuneration  report  details  the  key  management  personnel  remuneration  arrangements  for  the   Group,  in  accordance  with  the  requirements  of  the  Corporations  Act  2001  and  its  Regulations.   Key   management   personnel   are   those   persons   having   authority   and   responsibility   for   planning,   directing  and  controlling  the  activities  of  the  entity,  directly  or  indirectly,  including  all  directors.   The  remuneration  report  is  set  out  under  the  following  main  headings:   ●    Principles  used  to  determine  the  nature  and  amount  of  remuneration   ●    Details  of  remuneration   ●    Service  agreements   ●    Share-­‐based  compensation   ●    Consequences  of  performance  on  shareholder  wealth   ●    Additional  disclosures  relating  to  key  management  personnel   Principles  used  to  determine  the  nature  and  amount  of  remuneration   The   objective   of   the   Group's   executive   reward   framework   is   to   ensure   reward   for   performance   is   competitive  and  appropriate  for  the  results  delivered.  The  framework  aligns  executive  reward  with   the  achievement  of  strategic  objectives  and  the  creation  of  value  for  shareholders,  and  conforms  to   the  market  best  practice  for  the  delivery  of  reward.  The  Board  of  Directors  ('the  Board')  ensures  that   executive  reward  satisfies  the  following  key  criteria  for  good  reward  governance  practices:   Page  |  15                                                   BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   ●    competitiveness  and  reasonableness;   ●    acceptability  to  shareholders;   ●    performance  linkage  /  alignment  of  executive  compensation;  and   ●    transparency.   The   Nomination   and   Remuneration   Committee   is   responsible   for   determining   and   reviewing   remuneration  arrangements  for  its  directors  and  executives.  The  performance  of  the  Group  depends   on  the  quality  of  its  directors  and  executives.  The  remuneration  philosophy  is  to  attract,  motivate  and   retain  high  performance  and  high  quality  personnel.     This   committee   is   currently   managed   by   the   Full   Board.   The   Nomination   and   Remuneration   Committee   has   structured   an   executive   remuneration   framework   that   is   market   competitive   and   complementary  to  the  reward  strategy  of  the  Group.   Alignment  to  shareholders'  interests:   ●   has  economic  profit  as  a  core  component  of  plan  design;   ●   focuses  on  sustained  growth  in  shareholder  wealth,  consisting  of  dividends  and  growth  in  share   price,  and  delivering  constant  or  increasing  return  on  assets  as  well  as  focusing  the  executive  on   key  non-­‐financial  drivers  of  value;  and   ●   attracts  and  retains  high  calibre  executives.   Alignment  to  program  participants'  interests:   ●    rewards  capability  and  experience;   ●    reflects  competitive  reward  for  contribution  to  growth  in  shareholder  wealth;  and   ●    provides  a  clear  structure  for  earning  rewards.   In  accordance  with  best  practice  corporate  governance,  the  structure  of  non-­‐executive  directors  and   executive  remunerations  are  separate.   Non-­‐executive  directors  remuneration   Fees  and  payments  to  non-­‐executive  directors  reflect  the  demands  and  responsibilities  of  their  role.   Non-­‐executive   directors'   fees   and   payments   are   reviewed   annually   by   the   Nomination   and   Remuneration  Committee.  The  Nomination  and  Remuneration  Committee  may,  from  time  to  time,   receive  advice  from  independent  remuneration  consultants  to  ensure  non-­‐executive  directors'  fees   and   payments   are   appropriate   and   in   line   with   the   market.   The   chairman's   fees   are   determined   independently  to  the  fees  of  other  non-­‐executive  directors  based  on  comparative  roles  in  the  external   market.   The   chairman   is   not   present   at   any   discussions   relating   to   the   determination   of   his   own   remuneration.  Non-­‐executive  directors  may  receive  share  options  or  other  incentives.   ASX   listing   rules   require   the   aggregate   non-­‐executive   directors   remuneration   be   determined   periodically  by  a  general  meeting.  The  most  recent  determination  was  at  the  Annual  General  Meeting   held  on  13  November  2014,  where  the  shareholders  approved  a  maximum  aggregate  remuneration   of  $500,000.   Page  |  16                             BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Executive  remuneration   The  Group  aims  to  reward  executives  with  a  level  and  mix  of  remuneration  based  on  their  position   and  responsibility,  which  has  both  fixed  and  variable  components.   Executives  typically  receive  a  base  salary  (which  is  based  on  factors  such  as  experience  and   comparable  industry  information),  options,  and  performance  incentives.  The  Board  reviews  the   CEO’s  remuneration  package,  and  the  CEO  reviews  the  other  senior  executives’  remuneration   packages,  annually  by  reference  to  the  Group’s  performance,  executive  performance,  and   comparable  information  within  the  industry.   The  performance  of  executives  is  measured  against  criteria  agreed  annually  with  each  executive  and   is  based  predominantly  on  the  overall  success  of  the  Group  in  achieving  its  broader  corporate  goals.   Bonuses  and  incentives  are  linked  to  predetermined  performance  criteria.  The  Board  may,  however,   exercise  its  discretion  in  relation  to  approving  incentives,  bonuses,  and  options,  and  can  recommend   changes   to   the   CEO’s   recommendations.   The   policy   is   designed   to   attract   the   highest   calibre   of   executives  and  reward  them  for  performance  that  results  in  long-­‐term  growth  in  shareholder  wealth.   The  executive  remuneration  and  reward  framework  has  four  components:   ●    base  pay  and  non-­‐monetary  benefits;   ●    short-­‐term  performance  incentives;   ●    share-­‐based  payments;  and   ●    other  remuneration  such  as  superannuation  and  long  service  leave.   The  combination  of  these  comprises  the  executive's  total  remuneration.   Fixed  remuneration,  consisting  of  base  salary  and  non-­‐monetary  benefits,  are  reviewed  annually  by   the  Nomination  and  Remuneration  Committee,  based  on  individual  and  business  unit  performance,   the  overall  performance  of  the  Group  and  comparable  market  remunerations.   Executives   may   receive   their   fixed   remuneration   in   the   form   of   cash   or   other   fringe   benefits   (for   example   motor   vehicle   benefits)   where   it   does   not   create   any   additional   costs   to   the   Group   and   provides  additional  value  to  the  executive.   The  short-­‐term  incentives  ('STI')  program  is  designed  to  align  the  targets  of  the  business  units  with  the   targets   of   those   executives   responsible   for   meeting   those   targets.   STI   payments   are   granted   to   executives  based  on  specific  annual  targets  and  key  performance  indicators  ('KPI's')  being  achieved.   KPI's  include  profit  contribution,  leadership  contribution  and  product  management.   The  long-­‐term  incentives  ('LTI')  include  long  service  leave  and  share-­‐based  payments.  Executives  may   be  invited  to  participate  in  the  Employee  Share  Option  Plan  ('ESOP').  Shares  are  awarded  to  executives   over   a   period   of   three   years   based   on   long-­‐term   incentive   measures.   These   include   increase   in   shareholders'   value   relative   to   the   entire   market   and   the   increase   compared   to   the   Group's   direct   competitors.   Australian   executives   or   directors   receive   a   superannuation   guarantee   contribution   required  by  the  Government  and  do  not  receive  any  other  retirement  benefits.   Page  |  17                                       BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Group  performance  and  link  to  remuneration   Executive  bonus  and  incentive  payments  are  based  on  performance  and  are  at  the  discretion  of  the   Nomination  and  Remuneration  Committee.   Use  of  remuneration  consultants   During   the   financial   year   ended   30   June   2017,   the   Group   did   not   engage   any   remuneration   consultants,  to  review  its  existing  remuneration  policies  and  provide  any  recommendations  on  how   to  improve  both  the  STI  and  LTI  programs.     Details  of  remuneration   Amounts  of  remuneration   Details   of   the   remuneration   of   key   management   personnel   (KMP)   of   the   Group   are   set   out   in   the   following  tables.   The  key  management  personnel  of  the  Group  consisted  of  the  directors  of  Benitec  Biopharma  Limited   and  the  following  persons:   ●   Mr  Greg  West  –  Chief  Executive  Officer  (appointed  CEO  10  August  2016)  and  Company  Secretary     ●   Dr  David  Suhy  –  Chief  Scientific  Officer   ●      Dr  Cliff  Holloway  –  Chief  Business  Officer  (appointed  24  August  2016)   Short-­‐term  benefits   Post-­‐ employ   ment   benefits   Long-­‐term  benefits   Cash  salary   and  fees   $   Cash   bonus   $   Non-­‐ monetary   $   Super   annuation   $   Employee   leave   $   Share-­‐ based   payments Options   $   113,328   52,130   68,160   76,650   84,863   51,873   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   11,400   -­‐   6,475   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   92,265   -­‐   -­‐   57,159   57,159   40,101   Total   $   219,993   52,130   74,635   133,809   142,022   91,974   2017   Directors:   Peter  Francis   Jerel  Banks   Megan  Boston   Kevin  Buchi   John  Chiplin   Iain  Ross*   Other  Key   Management   Personnel:   Greg  West   David  Suhy   Cliff  Holloway   -­‐   -­‐   -­‐   -­‐   *Mr  Iain  Ross  retired  September  30,  2016   400,000   352,789   283,077   1,482,870   (9,231)   (12,019)   (3,846)   (25,096)   19,616   19,516   19,616   76,623   19,328   -­‐   -­‐   19,328   142,527   26,775   -­‐   572,240   387,061   298,847   418,986   1,972,711   Page  |  18                                               BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Short-­‐term  benefits   Post-­‐ employ   ment   benefits   Cash  salary   and  fees   $   Cash   bonus   $   Non-­‐ monetary   $   Super   annuation   $   Long-­‐term  benefits   Share-­‐ based   payments Options   $   Employee   leave   $   Total   $   113,328   78,488   81,230   81,262   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   8,550   -­‐   -­‐   -­‐   503,379   120,000   (90,256)   9,024   -­‐   -­‐   -­‐   -­‐   -­‐   212,993   127,796   127,796   127,796   334,871   206,284   209,026   209,058   172,237   714,384   333,333   343,218   263,583     1,797,821   69,000   68,644   27,500   285,144   25,268   42,242   (11,676)   (34,422)   19,308   -­‐   18,748   55,630   13,209   -­‐   -­‐   575,876   115,758   572,704   118,600   307,030   8,875   13,209   1,011,851   3,129,233   2016   Non-­‐Executive   Directors:   Peter  Francis   Kevin  Buchi   John  Chiplin   Iain  Ross   Executive   Directors:   Peter  French   Other  Key   Management   Personnel:   Greg  West   David  Suhy   Carl  Stubbings   The  proportion  of  remuneration  at  risk  and  the  fixed  proportion  are  as  follows:   Name   Non-­‐Executive  Directors:   Peter  Francis   Kevin  Buchi   John  Chiplin   Iain  Ross   Executive  Directors:   Peter  French   Other  Key  Management   Personnel:   Greg  West   David  Suhy   Cliff  Holloway   Carl  Stubbings   Fixed  remuneration   2017   2016   At  risk  -­‐  STI  (bonus)   2017   2016   At  risk  -­‐  LTI  (options)   2017   2016   57%   57%   60%   56%   -­‐   72%   93%   100%   -­‐   36%   38%   39%   39%   59%   66%   67%   -­‐%   88%   -­‐%   -­‐%   -­‐%   -­‐%   -­‐   -­‐%   -­‐%   -­‐%   -­‐%   -­‐%   -­‐%   -­‐%   -­‐%   43%   43%   40%   44%   64%     62%   61%     61%     17%     -­‐   24%   12%   12%     -­‐%   9%   28%   7%   -­‐   -­‐%   22%   21%   -­‐%   3%   The  proportion  of  the  cash  bonus  paid/payable  or  forfeited  is  as  follows.  No  part  of  the  forfeited   bonus  is  payable  in  future  years.   Page  |  19                                               BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Cash  bonus  paid/payable   Cash  bonus  forfeited   Name   Executive  Directors:   Peter  French   Other  Key  Management  Personnel:   Greg  West   David  Suhy   Carl  Stubbings   2017   -­‐   -­‐   -­‐   -­‐   2016   100%   100%   100%   50%   2017   2016   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   50%   Service  agreements   Remuneration   and   other   terms   of   employment   for   key   management   personnel   are   formalised   in   service  agreements.  Details  of  these  agreements  are  as  follows:   Name:   Title:   Agreement   commenced:   Details:   Name:   Title:   Agreement   commenced:   Details:   Name:   Title:   Agreement   commenced:   Details:   Mr  Greg  West   CEO  and  Company  Secretary     10  August  2016  (previously  CFO  and  Company  Secretary  from  23  August  2011)   CEO  role  –  Mr  West  was  appointed  CEO  on  the  10th  August  2016  with  a  base  salary   of  $400,000  plus  superannuation  of  $19,616.  Each  year  Mr  West  can  receive  up  to   a  50%  bonus  on  his  base  salary,  to  be  reviewed  annually  by  the  Nomination  and   Remuneration   Committee.   Greg’s   appointment   with   the   Company   may   be   terminated   with   the   Company   giving   six   months’   notice   or   by   Greg   giving   six   months’   notice.   The   Company   may   elect   to   pay   Greg   an   equal   amount   to   that   proportion  of  his  salary  equivalent  to  six  month’s  pay  in  lieu  of  notice,  together  with   any  outstanding  entitlements  due  to  him.   Mr  West  was  appointed  interim  CEO  in  October  2015  as  well  as  maintaining  his  role   Company  Secretary  which  he  had  held  since  23  August  2011.     Dr  David  Suhy   Chief  Scientific  Officer   28  August  2012   Base  salary  for  the  year  ended  30  June  2017  of  $USD271,153  plus  superannuation,   to  be  reviewed  annually  by  the  Nomination  and  Remuneration  Committee.  David’s   appointment  with  the  Company  may  be  terminated  without  notice.     Dr  Cliff  Holloway   Chief  Business  and  Operating  Officer   24  August  2016   Base  salary  for  the  year  ended  30  June  2017  of  $300,000  plus  superannuation,  to   be   reviewed   annually   by   the   Nomination   and   Remuneration   Committee.   Cliff’s   appointment  with  the  Company  may  be  terminated  with  six  months’  notice.     Page  |  20                                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Share-­‐based  compensation   Issue  of  shares   There   were   no   shares   issued   to   directors   and   other   key   management   personnel   as   part   of   compensation  during  the  year  ended  30  June  2017.   Options   Details   of   options   over   ordinary   shares   granted,   vested   and   lapsed   for   directors   and   other   key   management   personnel   as   part   of   compensation   during   the   year   ended   30   June   2017   are   set   out   below:   Number   of   options   granted   Grant  date   Value   per   options   at  grant   date   Value  of   options   at  grant   date   Number   vested/   (forfeited)   Exercise   price   Vested  and   first   exercise   date   Last   exercise   date   2,200,000   10/08/2016   $0.0962   $211,640   -­‐   $0.1665   10/08/2017   9/8/2021   Name   Greg   West   Options  granted  carry  no  dividend  or  voting  rights.  Options  vest  over  five  years  with  vesting  based   on  remaining  in  service.  There  are  is  no  other  performance  criteria.   Subsequent  to  year  end  KMP’s  were  issued  with  additional  options  under  the  Company’s  Employee   Share  Option  Plan     Granted  to   Greg  West   David  Suhy   Cliff  Holloway   Grant  date   17/07/2017   17/07/2017   17/07/2017   No.  granted   2,000,000   1,500,000                          800,000   Expiry  date   16/07/2022   16/07/2022   16/07/2022   Exercise  price   $0.196   $0.196   $0.196   Consequences  of  performance  on  shareholder  wealth   The  earnings  of  the  Group  for  the  five  years  to  30  June  2016  are  summarised  below:   Loss  after  income  tax   2013   $'000   (3,488)   2014   $'000   (7,039)   2015   $'000   (11,509)   2016   $'000   (24,778)   2017   $'000   (5,690)   The  factors  that  are  considered  to  affect  total  shareholders  return  ('TSR')  are  summarised  below:   Share  price  at  financial  year  end  ($)   Basic  earnings  per  share  (cents  per   share)   2013   0.38   2014   1.15   2015   0.69   2016   0.097   2017   0.125   (8.25)   (7.78)   (9.96)   (17.41)   (3.24)   Page  |  21                                                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Remuneration  report  continued   Additional  disclosures  relating  to  key  management  personnel   In   accordance   with   Class   Order   14/632,   issued   by   the   Australian   Securities   and   Investments   Commission,   relating   to   'Key   management   personnel   equity   instrument   disclosures',   the   following   disclosure  relates  only  to  equity  instruments  in  the  Company  or  its  subsidiaries.   Shareholding   The   number   of   shares   in   the   Company   held   during   the   financial   year   by   each   director   and   other   members  of  key  management  personnel  of  the  Group,  including  their  personally  related  parties,  is  set   out  below:    Ordinary  Shares Balance  at   1  July  2016   Received  as  part   of  remuneration   Exercise  of   options   Disposals/   other*   Balance  at  30   June  2017   Peter  Francis   Kevin  Buchi   John  Chiplin   Iain  Ross*   -­‐   -­‐   -­‐   -­‐   -­‐   *  Iain  Ross  resigned  as  a  director  on  30  September  2016.   424,174   861,539   200,000   66,364   1,552,077   - - - - -­‐   - - - (66,364)   (66,364)   424,174   861,539   200,000   -­‐   1,485,713   Option  holding   The  number  of  options  over  ordinary  shares  in  the  Company  held  during  the  financial  year  by  each   director  and  other  members  of  key  management  personnel  of  the  Group,  including  their  personally   related  parties,  is  set  out  below:   Options  over   ordinary   shares Peter  Francis   Kevin  Buchi   John  Chiplin   Greg  West   David  Suhy   Iain  Ross*   Granted   Balance   at  1  July   2016   3,000,000   1,240,000   1,240,000   1,000,000   2,200,000   1,200,000   1,240,000   -­‐   -­‐   Expired/   forfeited/   other   Balance   at  30  June   2017   Vested  and   exercisable   Vested  and   not   exercisable   Exercised   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   (1,600,000)   -­‐   (400,000)   (120,000)   -­‐   (1,240,000)   (3,360,000)   1,400,000   933,334   1,240,000   960,000   840,000   560,000   880,000   3,080,000   1,200,000   1,200,000   -­‐   7,760,000   4,533,334   -­‐   -­‐   -­‐     -­‐     -­‐   -­‐     -­‐    -­‐     -­‐     8,920,000   2,200,000   *  Iain  Ross  resigned  as  a  director  on  30  September  2016.   Other  transactions  with  key  management  personnel  and  their  related  parties   Legal   services   at   normal   commercial   rates   totalling   $191,050   (2016:   $116,540)   were   provided   by   Francis  Abourizk  Lightowlers,  a  law  firm  in  which  Peter  Francis  is  a  partner  and  has  a  beneficial  interest.   Consultancy   fees   were   paid   for   executive   duties   totalling   $32,133   (2016:   $165,983)   provided   by   NewStar  Ventures  Ltd,  a  corporation  in  which  John  Chiplin  is  a  director  and  has  a  beneficial  interest.   This  concludes  the  remuneration  report,  which  has  been  audited.   Page  |  22                                             BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Shares  under  option   Unissued  ordinary  shares  of  the  Company  under  option  at  the  date  of  this  report  are  as  follows:   Grant  date   Expiry  date   16  November  2012  **   10  November  2013  *   22  August  2013  **   28  February  2014  ***   15  May  2014  **   17  December  2014  **   6      May  2015  **   20  August  2015  ****   12  November  2015*   9  August  2016**   17  August  2017**   16  November  2017   18  May  2018   22  August  2018   28  February  2019   15  May  2019   17  December  2019   6      May  2020   21  August  2020   12  November  2020   9  August  2021   16  August  2022   Exercise   price   Number   under  option   $1.250     $0.620     $1.250     $1.260     $1.500     $1.250     $1.250     $USD  0.275     $0.77   $0.1665   $0.196   400,000     400,000     480,000     13,246,203     180,000     2,334,000     650,000     11,498,000     3,080,000   2,200,000   9,450,000   43,918,203     Unlisted  options    Non-­‐Executive  Directors  options   *   **    ESOP  options   ***   **** Warrants.  These  options  represent  574,900  unlisted  warrants.  Each  warrant  represents  is   convertible  into  20  shares.  The  exercise  price  of  each  warrant  is  convertible  on  the  payment  of   $USD5.50  ($USD  0.275  per  share).   No  person  entitled  to  exercise  the  options  had  or  has  any  right  by  virtue  of  the  option  to  participate   in  any  share  issue  of  the  Company  or  of  any  other  body  corporate.   Shares  issued  on  the  exercise  of  options   During  the  year  100  warrants  were  exercised.  This  is  equivalent  to  2,000  options  converting  into  2,000   ordinary  shares.  There  were  no  amounts  unpaid  on  the  shares  issued.     Indemnity  and  insurance  of  officers   The  Company  has  indemnified  the  directors  and  executives  of  the  Company  for  costs  incurred,  in  their   capacity  as  a  director  or  executive,  for  which  they  may  be  held  personally  liable,  except  where  there   is  a  lack  of  good  faith.   During  the  financial  year,  the  Company  paid  a  premium  in  respect  of  a  contract  to  insure  the  directors   and   executives   of   the   Company   against   a   liability   to   the   extent   permitted   by   the   Corporations   Act   2001.  The  contract  of  insurance  prohibits  disclosure  of  the  nature  of  the  liability  and  the  amount  of   the  premium.   Indemnity  and  insurance  of  auditor   The  Company  has  not,  during  or  since  the  end  of  the  financial  year,  indemnified  or  agreed  to  indemnify   the  auditor  of  the  Company  or  any  related  entity  against  a  liability  incurred  by  the  auditor.     Page  |  23                                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Indemnity  and  insurance  of  auditor  continued   During  the  financial  year,  the  Company  has  not  paid  a  premium  in  respect  of  a  contract  to  insure  the   auditor  of  the  Company  or  any  related  entity.   Proceedings  on  behalf  of  the  Company   No  person  has  applied  to  the  Court  under  section  237  of  the  Corporations  Act  2001  for  leave  to  bring   proceedings  on  behalf  of  the  Company,  or  to  intervene  in  any  proceedings  to  which  the  Company  is  a   party   for   the   purpose   of   taking   responsibility   on   behalf   of   the   Company   for   all   or   part   of   those   proceedings.   Non-­‐audit  services   Details   of   the   amounts   paid   or   payable   to   the   auditor   for   non-­‐audit   services   provided   during   the   financial  year  by  the  auditor  are  outlined  in  note  20  to  the  financial  statements.   The  directors  are  satisfied  that  the  provision  of  non-­‐audit  services  during  the  financial  year,  by  the   auditor  (or  by  another  person  or  firm  on  the  auditor's  behalf),  is  compatible  with  the  general  standard   of  independence  for  auditors  imposed  by  the  Corporations  Act  2001.   The  directors  are  of  the  opinion  that  the  services  as  disclosed  in  note  20  to  the  financial  statements   do  not  compromise  the  external  auditor's  independence  requirements  of  the  Corporations  Act  2001   for  the  following  reasons:   ●   all  non-­‐audit  services  have  been  reviewed  and  approved  to  ensure  that  they  do  not  impact  the   integrity  and  objectivity  of  the  auditor;     ●   none  of  the  services  undermine  the  general  principles  relating  to  auditor  independence  as  set   out  in  APES  110  Code  of  Ethics  for  Professional  Accountants  issued  by  the  Accounting   Professional  and  Ethical  Standards  Board,  including  reviewing  or  auditing  the  auditor's  own  work,   acting  in  a  management  or  decision-­‐making  capacity  for  the  Company,  acting  as  advocate  for  the   Company  or  jointly  sharing  economic  risks  and  rewards;  and   •   all  services  have  been  pre-­‐approved  by  the  audit  committee.   Officers  of  the  Company  who  are  former  partners  of  Grant  Thornton  Audit  Pty  Ltd   There  are  no  officers  of  the  Company  who  are  former  partners  of  Grant  Thornton  Audit  Pty  Ltd.   Rounding  of  amounts   The   Parent   entity   has   applied   the   relief   available   to   it   under   ASIC   Corporations   (Rounding   in   Financial/Directors’   Reports).   Instrument   2016/191   and   accordingly   amounts   in   the   financial   statements  and  Directors’  Report  have  been  rounded  off  to  the  nearest  $1,000,  or  in  certain  cases,  to   the  nearest  dollars.   Auditor's  independence  declaration   A  copy  of  the  auditor's  independence  declaration  as  required  under  section  307C  of  the  Corporations   Act  2001  is  set  out  on  the  following  page.   Page  |  24                                         BENITEC  BIOPHARMA  LIMITED   Directors'  Report     for  the  year  ended  June  30,  2017  continued Auditor   Grant  Thornton  Audit  Pty  Ltd  continues  in  office  in  accordance  with  section  327  of  the  Corporations   Act  2001.   This  report  is  made  in  accordance  with  a  resolution  of  directors,  pursuant  to  section  298(2)(a)  of  the   Corporations  Act  2001.   On  behalf  of  the  directors   ________________________   Peter  Francis   Chairman   29  August  2017   Sydney Page  |  25                 BENITEC  BIOPHARMA  LIMITED   Corporate  Governance   The  Company’s  directors  and  management  are  committed  to  conducting  the  Group’s  business  in  an   ethical  manner  and  in  accordance  with  the  highest  standards  of  corporate  governance.   The  Company  has  adopted  and  substantially  complies  with  the  ASX  Corporate  Governance  Principles   and  Recommendations  (3rd  Edition)  (‘Recommendations’)  to  the  extent  appropriate  to  the  size  and   nature  of  the  Group’s  operations.   The   Company   has   prepared   a   Corporate   Governance   Statement   which   sets   out   the   corporate   governance  practices  that  were  in  operation  throughout  the  financial  year  for  the  Company,  identifies   any   Recommendations   that   have   not   been   followed,   and   provides   reasons   for   not   following   such   Recommendations.   The  Company’s  Corporate  Governance  Statement  and  policies,  which  were  approved  by  the  Board  of   directors  on  24  August  2017  can  be  found  on  its  website:   http://www.benitec.com/investor-­‐centre/governance   Page  |  26                         Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of Benitec Biopharma Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Benitec Biopharma Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants L M Worsley Partner - Audit & Assurance Sydney, 29 August 2017 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Page | 27 BENITEC  BIOPHARMA  LIMITED   Statement  of  profit  or  loss  and  other  comprehensive  income   For  the  year  ended  30  June  2017   Revenue   Other  income   Total  Income   Expenses   Royalties  and  licence  fees   Research  and  development   Employee  benefits  expense   Share-­‐based  expense   Travel  related  costs   Consultants  costs   Occupancy  costs   Depreciation   Corporate  expenses   Foreign  exchange  realized  loss   Foreign  exchange  unrealized  loss   IPO  costs   Loss  on  disposal  of  fixed  assets   Write-­‐off  of  clinical  trial  prepayment   Total  Expenses   Consolidated   Note   2017   $'000   2016   $'000   4   5   6   586     10,507     11,093   464     3,590     4,054   (272)   (6,925)   (5,015)   (386)   (629)   (976)   (550)   (217)   (1,540)   (98)   (168)   -­‐   (7)   -­‐   (16,783)   (139)   (13,287)   (6,283)   (1,746)   (1,023)   (1,020)   (500)   (290)   (1,139)   (414)   -­‐   (1,191)   -­‐   (1,800)   (28,832)   Loss  before  income  tax     Income  tax   Loss  after  income  tax  for  the  year  attributable  to  the  owners  of   Benitec  Biopharma  Limited   7   16   (5,690)   -­‐   (24,778)   -­‐   (5,690)   (24,778)   Other  comprehensive  income/(loss)   Items  that  may  be  reclassified  subsequently  to  profit  and  loss   Foreign  currency  translation  gain/loss   Income  tax  on  items  that  may  be  reclassified  to  profit  and  loss   Total  comprehensive  income/(loss)  for  the  year  attributable  to  the   owners  of  Benitec  Biopharma  Limited   34   -­‐   (19)   -­‐   (5,656)   (24,797)   Basic  earnings/(loss)  cents  per  share   Diluted  earnings/(loss)  cents  per  share   28   28   (3.24)   (3.24)   (17.41)   (17.41)   The  above  statement  of  profit  or  loss  and  other  comprehensive  income  should  be  read  in  conjunction   with  the  accompanying  notes   Page  |  28                                                                                                                                                       BENITEC  BIOPHARMA  LIMITED   Consolidated  Statement  of  Financial  Position   as  at  30  June  2017   ASSETS   Current  Assets   Cash  and  cash  equivalents   Other  financial  assets   Trade  and  other  receivables   Other   Total  Current  Assets   Non-­‐Current  Assets   Deposits   Plant  and  equipment   Total  Non-­‐Current  Assets   TOTAL  ASSETS   LIABILITIES   Current  liabilities   Trade  and  other  payables   Provisions   Total  Current  Liabilities   Non-­‐Current  Liabilities   Provisions   Total  Non-­‐Current  Liabilities   TOTAL  LIABILITIES   NET  ASSETS   EQUITY   Issued  capital   Reserves   Accumulated  losses   TOTAL  EQUITY     Note     2017   $'000   2016   $'000   8   9     10     11   17,375     100   4,406     281     22,162     18,230     28   977     149     19,384     59   445     504     -­‐   506     506     22,666     19,890       12     13   919     206     1,125     833     202     1,035     35   35   18   18   1,160   1,053   21,506   18,837     14     15     16   155,580     1,674     (135,748)   21,506     147,641     2,565     (131,369)   18,837     The  above  statement  of  financial  position  should  be  read  in  conjunction  with  the  accompanying  notes   Page  |  29                                                                                                                                                                                                                                                                           BENITEC  BIOPHARMA  LIMITED   Consolidated  Statement  of  Changes  in  Equity     for  the  year  ended  30  June  2017   Issued   capital   $'000   Reserves   $'000   Accumulated   losses   $'000   Total   equity   $'000   Balance  at  1  July  2015   129,631     2,038     (107,791)   23,878     Loss  after  income  tax     Other  comprehensive  income     -   -­‐  Foreign  exchange  translation  reserve   Total  comprehensive  income     -­‐   -­‐   -­‐   -­‐   (19)     (24,778)   -­‐   (24,778)     (19)     (19)     (24,778)   (25,797)   Contributions  of  equity,  net  of  transaction  costs   Share-­‐based  payments     Transfer  of  expired  share-­‐based  payments   Balance  at  30  June  2016   18,010     -­‐   -­‐   147,641     -­‐   1,746     (1,200)   2,565     -­‐   -­‐   1,200     (131,369)   18,010     1,746     -­‐     18,837     Issued   capital   $'000   Reserves   $'000   Accumulated   losses   $'000   Total   equity   $'000   Balance  at  1  July  2016   147,641     2,565     (131,369)   18,837     Loss  after  income  tax   Other  comprehensive  income   -­‐  Foreign  exchange  translation  reserve   Total  comprehensive  income   -­‐   -­‐   -­‐   -­‐   34     (5,690)   -­‐   (5,690)   34     34     (5,690)   (5,656)   Contributions  of  equity,  net  of  transaction  costs     Share-­‐based  payments   Transfer  of  expired  share-­‐based  payments   Balance  at  30  June  2017   7,939     -­‐   -­‐   155,580     -­‐   386     (1,311)   1,674     -­‐   -­‐   1,311     (135,748)   7,939     386     -­‐     21,506     The  above  statement  of  changes  in  equity  should  be  read  in  conjunction  with  the  accompanying  notes   Page  |  30                                                                                                               BENITEC  BIOPHARMA  LIMITED   Consolidated  Statement  of  Cash  Flows   for  the  year  ended  30  June  2017   Cash  flows  from  operating  activities   Receipts  from  customers   Research  and  development  grants   Interest  received   Receipts  of  prepayment   Payments  to  suppliers  and  employees     Net  cash  used  in  operating  activities   Cash  flows  from  investing  activities   Purchase  of  plant  and  equipment   Security  deposits   Net  cash  used  in  investing  activities   Cash  flows  from  financing  activities   Proceeds  from  issue  of  shares   IPO  and  share  issue  transaction  costs   Net  cash  from  financing  activities   Net  decrease  in  cash  and  cash  equivalents   Cash  and  cash  equivalents  at  the  beginning  of  the  financial  year   Effects  of  exchange  rate  changes  on  cash  and  cash  equivalents   Cash  and  cash  equivalents  at  the  end  of  the  financial  year   Note   2017   $'000   2016   $'000   333     6,274     242     791   (15,944)   (8,304)   340     3,590     217     -­‐   (24,355)   (20,208)   (171)   (131)   (302)   (342)   -­‐   (342)   8,072     (133)   7,939     19,462     (1,952)     17,510     (667)   18,230     (188)     17,375     (3,040)     21,787     (517)       18,230     9   27   11   8   The  above  statement  of  cash  flows  should  be  read  in  conjunction  with  the  accompanying  notes   Page  |  31                                                                                                               BENITEC  BIOPHARMA  LIMITED   Notes  to  the  consolidated  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies   The  principal  accounting  policies  adopted  in  the  preparation  of  the  financial  statements  are  set  out  below.   These  policies  have  been  consistently  applied  to  all  the  years  presented,  unless  otherwise  stated.   Basis  of  preparation   These  general  purpose  financial  statements  have  been  prepared  in  accordance  with  Australian  Accounting   Standards   and   Interpretations   issued   by   the   Australian   Accounting   Standards   Board   ('AASB')   and   the   Corporations   Act   2001,   as   appropriate   for   for-­‐profit   oriented   entities.   These   financial   statements   also   comply   with   International   Financial   Reporting   Standards   as   issued   by   the   International   Accounting   Standards  Board  ('IASB').   Historical  cost  convention   The  financial  statements  have  been  prepared  under  the  historical  cost  convention.   Critical  accounting  estimates   The  preparation  of  the  financial  statements  requires  the  use  of  certain  critical  accounting  estimates.  It  also   requires  management  to  exercise  its  judgement  in  the  process  of  applying  the  Group's  accounting  policies.   The  areas  involving  a  higher  degree  of  judgement  or  complexity,  or  areas  where  assumptions  and  estimates   are  significant  to  the  financial  statements,  are  disclosed  in  note  2.   New,  revised  or  amending  Accounting  Standards  and  Interpretations  adopted   In  the  current  year,  there  were  no  amendments  to  AASBs  issued  by  the  Australian  Accounting  Standards   Board  (AASB)  that  were  effective  for  the  current  financial  year  that  had  a  material  effect  on  the  Company,   mandatorily  effective  for  an  accounting  period  that  begins  on  or  after  1  July  2016.   New  Accounting  Standards  and  Interpretations  not  yet  mandatory  or  early  adopted   Certain  new  accounting  standards  and  interpretations  have  been  published  that  are  not  mandatory  for  30   June  2017  reporting  periods  and  have  not  been  early  adopted  by  the  group.  The  group’s  assessment  of  the   impact  of  these  new  standards  and  interpretations  is  set  out  below.   •   AASB   9   Financial   Instruments   -­‐   addresses   the   classification,   measurement   and   derecognition   of   financial  assets  and  financial  liabilities  and  introduces  new  rules  for  hedge  accounting.  In  December   2014,   the   AASB   made   further   changes   to   the   classification   and   measurement   rules   and   also   introduced  a  new  impairment  model.  These  latest  amendments  now  complete  the  new  financial   instruments  standard.   Impact  -­‐  The  entity  is  yet  to  undertake  a  detailed  assessment  of  the  impact  of  AASB  9.  However,   based   on   the   entity’s   preliminary   assessment,   the   Standard   is   not   expected   to   have   a   material   impact   on   the   transactions   and   balances   recognised   in   the   financial   statements   when   it   is   first   adopted  for  the  year  ending  30  June  2019.     Mandatory   application   date   /   Date   of   adoption   by   group   -­‐   Must   be   applied   for   financial   years   commencing  on  or  after  1  January  2018.   •   AASB  15  Revenue  from  Contracts  with  Customers  -­‐  The  AASB  has  issued  a  new  standard  for  the   recognition  of  revenue.  This  will  replace  AASB  118  which  covers  contracts  for  goods  and  services.   The  new  standard  is  based  on  the  principle  that  revenue  is  recognised  when     Page  |  32                                       BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   control  of  a  good  or  service  transfers  to  a  customer;  so  the  notion  of  control  replaces  the  existing   notion  of  risks  and  rewards.   Impact  -­‐  The  entity  is  yet  to  undertake  a  detailed  assessment  of  the  impact  of  AASB  15.  However,   based   on   the   entity’s   preliminary   assessment,   the   Standard   is   not   expected   to   have   a   material   impact   on   the   transactions   and   balances   recognised   in   the   financial   statements   when   it   is   first   adopted   for   the   year   ending   30   June   2019   because   the   Company   does   not   yet   have   material   revenue.   The  standard  permits  a  modified  retrospective  approach  for  the  adoption.  Under  this  approach,   entities   will   recognise   transitional   adjustments   in   retained   earnings   on   the   date   of   initial   application  (eg  1  July  2017),  ie  without  restating  the  comparative  period.  They  will  only  need  to   apply  the  new  rules  to  contracts  that  are  not  completed  as  of  the  date  of  initial  application.   Mandatory   application   date   /   Date   of   adoption   by   group   -­‐   commencing   on   or   after   1   January   2018.  Expected  date  of  adoption  by  the  group:  1  July  2018   •   AASB  16  Leases   -­‐  The  AASB  has  issued  a  new  standard  for  the  recognition  of  leases.  This  will   replace  AASB  117:  Leases.  The  new  standard  introduces  a  single  lessee  accounting  model  that   no  longer  requires  leases  to  be  classified  as  operating  or  financing.   Other  major  changes  include,  the  recognition  of  a  right-­‐to-­‐use  asset  and  liability,  depreciation  of   right-­‐to-­‐use  assets  in  line  with  AASB  116:  Property  Plant  and  Equipment,  variable  lease  payments   that  depend  on  an  index  or  rate  are  included  in  the  initial  measurement  of  lease  liability,  option  for   lessee   to   not   separate   non-­‐lease   components   and   account   for   all   components   as   a   lease,   and   additional  disclosure  requirements.   Impact   -­‐   The   entity   has   undertaken   a   detailed   review   and   has   concluded   that   there   will   be   no   material  impact  on  its  financial  position  on  the  transactions  and  balances  recognised  in  the  financial   statements  when  it  is  first  adopted  for  the  year  ending  30  June  2020  to  the  immaterial  size  of  leases   entered  into  by  the  Company.    The  Company’s  only  lease  is  the  lease  on  its  head  office  and  research   and  development  facilities.  Commitments  are  set  out  in  note  22.  The  Mandatory  application  date   /  Date  of  adoption  by  group  -­‐  Must  be  applied  for  financial  years  commencing  on  or  after  1  January   2019.Expected  date  of  adoption  by  the  group:  1  July  2019.   There  are  no  other  standards  that  are  not  yet  effective  and  that  would  be  expected  to  have  a  material   impact  on  the  entity  in  the  current  or  future  reporting  periods  and  on  foreseeable  future  transactions.   Going  concern   The   directors   have   prepared   the   financial   statements   on   a   going   concern   basis   after   taking   into   consideration  the  net  loss  for  the  year  of  $5.690m  (2016:  $24.778m)  and  the  cash  and  cash  equivalents   balance  of  $17.375m  (2016:  $18.230m).    The  directors  have  recognised  the  capital  raisings  in  the  last  3   years,  performed  a  review  of  the  cash  flow  forecasts,  considered  the  cash  flow  needs  of  the  Group,  and   believe  that  the  strategies  in  place  are  appropriate  to  generate  funding  which  will  be  sufficient  to  maintain   the   going   concern   status   of   the   Group.   Much   of   the   forecast   cash   expenditure   is   project   related   and   is   discretionary.  Timing  of  this  expenditure  is  regularly  reviewed  and  is  dependent  upon  the  Group  being  able   to  generate  funding.  If  these  strategies  are  unsuccessful  then  the  Group  may  need  to  realise  its  assets  and     Page  |  33                               BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   extinguish   liabilities   other   than   in   the   ordinary   course   of   business   and   at   amounts   different   to   those   disclosed  in  the  financial  report.   Parent  entity  information   In  accordance  with  the  Corporations  Act  2001,  these  financial  statements  present  the  results  of  the  Group   only.  Supplementary  information  about  the  parent  entity  is  disclosed  in  note  24.   Principles  of  consolidation   The   consolidated   financial   statements   incorporate   the   assets   and   liabilities   of   all   subsidiaries   of   Benitec   Biopharma  Limited  ('Company'  or  'parent  entity')  as  at  30  June  2017  and  the  results  of  all  subsidiaries  for   the   year   then   ended.   Benitec   Biopharma   Limited   and   its   subsidiaries   together   are   referred   to   in   these   financial  statements  as  the  'Group'.   Subsidiaries  are  all  those  entities  over  which  the  Group  has  control.  The  Group  controls  an  entity  when  it   is  exposed  to,  or  has  rights  to,  variable  returns  from  its  involvement  with  the  entity  and  has  the  ability  to   affect   those   returns   through   its   power   to   direct   the   activities   of   the   entity.   Subsidiaries   are   fully   consolidated  from  the  date  on  which  control  is  transferred  to  the  Group.  They  are  de-­‐consolidated  from   the  date  that  control  ceases.   The   Company’s   100%   owned   subsidiary,   Tacere   Therapeutics,   Inc.   has   a   31   December   year   end.   The   Company  is  reviewing  the  appropriate  time  to  align  the  subsidiary  year  end  to  the  parent’s  year  end.  For   consolidation  purposes  Tacere  prepares  financial  statements  for  the  12  month  period  ended  30  June  that   are  used  to  consolidate  into  the  group  accounts.     Intercompany  transactions,  balances  and  unrealised  gains  on  transactions  between  entities  in  the  Group   are   eliminated.   Unrealised   losses   are   also   eliminated   unless   the   transaction   provides   evidence   of   the   impairment   of   the   asset   transferred.   Accounting   policies   of   subsidiaries   have   been   changed   where   necessary  to  ensure  consistency  with  the  policies  adopted  by  the  Group.   The  acquisition  of  subsidiaries  is  accounted  for  using  the  acquisition  method  of  accounting.  A  change  in   ownership   interest,   without   the   loss   of   control,   is   accounted   for   as   an   equity   transaction,   where   the   difference  between  the  consideration  transferred  and  the  book  value  of  the  share  of  the  non-­‐controlling   interest  acquired  is  recognised  directly  in  equity  attributable  to  the  parent.   Where  the  Group  loses  control  over  a  subsidiary,  it  derecognises  the  assets  including  goodwill,  liabilities   and   non-­‐controlling   interest   in   the   subsidiary   together   with   any   cumulative   translation   differences   recognised  in  equity.  The  Group  recognises  the  fair  value  of  the  consideration  received  and  the  fair  value   of  any  investment  retained  together  with  any  gain  or  loss  in  profit  or  loss.     Operating  segments   Operating  segments  are  presented  using  the  'management  approach',  where  the  information  presented  is   on  the  same  basis  as  the  internal  reports  provided  to  the  Chief  Operating  Decision  Makers  ('CODM').  The   CODM   is   responsible   for   the   allocation   of   resources   to   operating   segments   and   assessing   their   performance.   Page  |  34                                     BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   Foreign  currency  translation   The   financial   statements   are   presented   in   Australian   dollars,   which   is   Benitec   Biopharma   Limited's   functional  and  presentation  currency.   Foreign  currency  transactions   Foreign  currency  transactions  are  translated  into  Australian  dollars  using  the  exchange  rates  prevailing  at   the   dates   of   the   transactions.   Foreign   exchange   gains   and   losses   resulting   from   the   settlement   of   such   transactions  and  from  the  translation  at  financial  year-­‐end  exchange  rates  of  monetary  assets  and  liabilities   denominated  in  foreign  currencies  are  recognised  in  profit  or  loss.   Foreign  operations   The   assets   and   liabilities   of   foreign   operations   are   translated   into   Australian   dollars   using   the   exchange   rates  at  the  reporting  date.  The  revenues  and  expenses  of  foreign  operations  are  translated  into  Australian   dollars  using  the  average  exchange  rates,  which  approximate  the  rates  at  the  dates  of  the  transactions,  for   the   period.   All   resulting   foreign   exchange   differences   are   recognised   in   other   comprehensive   income   through  the  foreign  currency  reserve  in  equity.  The  foreign  currency  reserve  is  recognised  in  profit  or  loss   when  the  foreign  operation  or  net  investment  is  disposed  of.   Revenue  recognition   Revenue  is  recognised  when  it  is  probable  that  the  economic  benefit  will  flow  to  the  Group  and  the  revenue   can  be  reliably  measured.  Revenue  is  measured  at  the  fair  value  of  the  consideration  received  or  receivable.   Licensing  revenue  and  royalties   Revenue   from   the   granting   of   licenses   is   recognised   in   accordance   with   the   terms   of   the   relevant   agreements  and  is  usually  recognised  on  an  accruals  basis,  unless  the  substance  of  the  agreement  provides   evidence  that  it  is  more  appropriate  to  recognise  revenue  on  some  other  systematic  rational  basis.   Interest   Interest  revenue  is  recognised  as  interest  accrues  using  the  effective  interest  method.  This  is  a  method  of   calculating   the   amortised   cost   of   a   financial   asset   and   allocating   the   interest   income   over   the   relevant   period   using   the   effective   interest   rate,   which   is   the   rate   that   exactly   discounts   estimated   future   cash   receipts  through  the  expected  life  of  the  financial  asset  to  the  net  carrying  amount  of  the  financial  asset.   Government  research  and  development  grants   Government  grants  are  recognised  at  fair  value  where  there  is  reasonable  assurance  that  the  grant  will  be   received  and  all  grant  conditions  will  be  met.    Grants  relating  to  expense  items  are  recognised  as  income   over  the  periods  necessary  to  match  the  grant  costs  they  are  compensating.  Grants  relating  to  assets  are   credited  to  deferred  income  at  fair  value  and  are  credited  to  income  over  the  expected  useful  life  of  the   asset  on  a  straight-­‐line  basis.   Research  and  development  grant  revenue  is  recognised  as  income  when  a  reliable  estimate  can  be  made   of  the  amounts  receivable.   Page  |  35                                             BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   Income  tax   The  income  tax  expense  or  benefit  for  the  period  is  the  tax  payable  on  that  period's  taxable  income  based   on  the  applicable  income  tax  rate  for  each  jurisdiction,  adjusted  by  the  changes  in  deferred  tax  assets  and   liabilities  attributable  to  temporary  differences,  unused  tax  losses  and  the  adjustment  recognised  for  prior   periods,  where  applicable.   Deferred  tax  assets  and  liabilities  are  recognised  for  temporary  differences  at  the  tax  rates  expected  to  be   applied  when  the  assets  are  recovered  or  liabilities  are  settled,  based  on  those  tax  rates  that  are  enacted   or  substantively  enacted,  except  for:   ●   When  the  deferred  income  tax  asset  or  liability  arises  from  the  initial  recognition  of  goodwill  or  an   asset  or  liability  in  a  transaction  that  is  not  a  business  combination  and  that,  at  the  time  of  the   transaction,  affects  neither  the  accounting  nor  taxable  profits;  or   ●   When  the  taxable  temporary  difference  is  associated  with  interests  in  subsidiaries,  associates  or  joint   ventures,  and  the  timing  of  the  reversal  can  be  controlled  and  it  is  probable  that  the  temporary   difference  will  not  reverse  in  the  foreseeable  future.   Deferred  tax  assets  are  recognised  for  deductible  temporary  differences  and  unused  tax  losses  only  if  it  is   probable  that  future  taxable  amounts  will  be  available  to  utilise  those  temporary  differences  and  losses.   The  carrying  amount  of  recognised  and  unrecognised  deferred  tax  assets  are  reviewed  at  each  reporting   date.  Deferred  tax  assets  recognised  are  reduced  to  the  extent  that  it  is  no  longer  probable  that  future   taxable  profits  will  be  available  for  the  carrying  amount  to  be  recovered.  Previously  unrecognised  deferred   tax  assets  are  recognised  to  the  extent  that  it  is  probable  that  there  are  future  taxable  profits  available  to   recover  the  asset.   Deferred  tax  assets  and  liabilities  are  offset  only  where  there  is  a  legally  enforceable  right  to  offset  current   tax   assets   against   current   tax   liabilities   and   deferred   tax   assets   against   deferred   tax   liabilities;   and   they   relate  to  the  same  taxable  authority  on  either  the  same  taxable  entity  or  different  taxable  entities  which   intend  to  settle  simultaneously.   Benitec  Biopharma  Limited  (the  'head  entity')  and  its  wholly-­‐owned  Australian  subsidiaries  have  formed  an   income  tax  consolidated  group  under  the  tax  consolidation  regime.  The  head  entity  and  each  subsidiary  in   the  tax  consolidated  group  continue  to  account  for  their  own  current  and  deferred  tax  amounts.  The  tax   consolidated   group   has   applied   the   'separate   taxpayer   within   group'   approach   in   determining   the   appropriate   amount   of   taxes   to   allocate   to   members   of   the   tax   consolidated   group.   No   tax   sharing   agreement  has  been  entered  between  entities  in  the  tax  consolidated  group.     In  addition  to  its  own  current  and  deferred  tax  amounts,  the  head  entity  also  recognises  the  current  tax   liabilities   (or   assets)   and   the   deferred   tax   assets   arising   from   unused   tax   losses   and   unused   tax   credits   assumed  from  each  subsidiary  in  the  tax  consolidated  group.    Current  and  non-­‐current  classification   Assets  and  liabilities  are  presented  in  the  statement  of  financial  position  based  on  current  and  non-­‐current   classification.   Page  |  36                                       BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   An  asset  is  classified  as  current  when:  it  is  either  expected  to  be  realised  or  intended  to  be  sold  or  consumed   in  normal  operating  cycle;  it  is  held  primarily  for  the  purpose  of  trading;  it  is  expected  to  be  realised  within   12  months  after  the  reporting  period;  or  the  asset  is  cash  or  cash  equivalent  unless  restricted  from  being   exchanged  or  used  to  settle  a  liability  for  at  least  12  months  after  the  reporting  period.  All  other  assets  are   classified  as  non-­‐current.   A  liability  is  classified  as  current  when:  it  is  either  expected  to  be  settled  in  normal  operating  cycle;  it  is  held   primarily  for  the  purpose  of  trading;  it  is  due  to  be  settled  within  12  months  after  the  reporting  period;  or   there   is   no   unconditional   right   to   defer   the   settlement   of   the   liability   for   at   least   12   months   after   the   reporting  period.  All  other  liabilities  are  classified  as  non-­‐current.     Deferred  tax  assets  and  liabilities  are  always  classified  as  non-­‐current.   Cash  and  cash  equivalents   Cash   and   cash   equivalents   includes   cash   on   hand,   deposits   held   at   call   with   financial   institutions,   other   short-­‐term,   highly   liquid   investments   with   original   maturities   of   three   months   or   less   that   are   readily   convertible  to  known  amounts  of  cash  and  which  are  subject  to  an  insignificant  risk  of  changes  in  value.   Trade  and  other  receivables   Other  receivables  are  recognised  at  amortised  cost,  less  any  provision  for  impairment.   Investments  and  other  financial  assets   Investments  and  other  financial  assets  are  initially  measured  at  fair  value.  Transaction  costs  are  included   as  part  of  the  initial  measurement,  except  for  financial  assets  at  fair  value  through  profit  or  loss.  They  are   subsequently   measured   at   either   amortised   cost   or   fair   value   depending   on   their   classification.   Classification   is   determined   based   on   the   purpose   of   the   acquisition   and   subsequent   reclassification   to   other  categories  is  restricted.   Financial   assets   are   derecognised   when   the   rights   to   receive   cash   flows   from   the   financial   assets   have   expired  or  have  been  transferred  and  the  Group  has  transferred  substantially  all  the  risks  and  rewards  of   ownership.   Loans  and  receivables   Loans  and  receivables  are  non-­‐derivative  financial  assets  with  fixed  or  determinable  payments  that  are  not   quoted  in  an  active  market.  They  are  carried  at  amortised  cost  using  the  effective  interest  rate  method.   Gains  and  losses  are  recognised  in  profit  or  loss  when  the  asset  is  derecognised  or  impaired.   Impairment  of  financial  assets   The  Group  assesses  at  the  end  of  each  reporting  period  whether  there  is  any  objective  evidence  that  a   financial   asset   or   group   of   financial   assets   is   impaired.   Objective   evidence   includes   significant   financial   difficulty   of   the   issuer   or   obligor;   a   breach   of   contract   such   as   default   or   delinquency   in   payments;   the   lender   granting   to   a   borrower   concessions   due   to   economic   or   legal   reasons   that   the   lender   would   not   otherwise   do;   it   becomes   probable   that   the   borrower   will   enter   bankruptcy   or   other   financial   reorganisation;  the  disappearance  of  an  active  market  for  the  financial  asset;  or  observable  data  indicating   that  there  is  a  measurable  decrease  in  estimated  future  cash  flows.   Page  |  37                                               BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   The   amount   of   the   impairment   allowance   for   loans   and   receivables   carried   at   amortised   cost   is   the   difference   between   the   asset's   carrying   amount   and   the   present   value   of   estimated   future   cash   flows,   discounted  at  the  original  effective  interest  rate.  If  there  is  a  reversal  of  impairment,  the  reversal  cannot   exceed  the  amortised  cost  that  would  have  been  recognised  had  the  impairment  not  been  made  and  is   reversed  to  profit  or  loss.   Plant  and  equipment   Plant  and  equipment  is  stated  at  historical  cost  less  accumulated  depreciation  and  impairment.  Historical   cost  includes  expenditure  that  is  directly  attributable  to  the  acquisition  of  the  items.   Depreciation  is  calculated  on  a  straight-­‐line  basis  to  write  off  the  net  cost  of  each  item  of  property,  plant   and  equipment  (excluding  land)  over  their  expected  useful  lives  as  follows:   Leasehold  improvements   Plant  and  equipment    period  of  the  lease  term    3-­‐7  years   The  residual  values,  useful  lives  and  depreciation  methods  are  reviewed,  and  adjusted  if  appropriate,  at   each  reporting  date.   An  item  of  plant  and  equipment  is  derecognised  upon  disposal  or  when  there  is  no  future  economic  benefit   to  the  Group.  Gains  and  losses  between  the  carrying  amount  and  the  disposal  proceeds  are  taken  to  profit   or  loss.     Leases   The   determination   of   whether   an   arrangement   is   or   contains   a   lease   is   based   on   the   substance   of   the   arrangement  and  requires  an  assessment  of  whether  the  fulfilment  of  the  arrangement  is  dependent  on   the  use  of  a  specific  asset  or  assets  and  the  arrangement  conveys  a  right  to  use  the  asset.   Impairment  of  non-­‐financial  assets   Other  intangible  assets  that  have  an  indefinite  useful  life  are  not  subject  to  amortisation  and  are  tested   annually  for  impairment,  or  more  frequently  if  events  or  changes  in  circumstances  indicate  that  they  might   be   impaired.   Other   non-­‐financial   assets   are   reviewed   for   impairment   whenever   events   or   changes   in   circumstances  indicate  that  the  carrying  amount  may  not  be  recoverable.  An  impairment  loss  is  recognised   for  the  amount  by  which  the  asset's  carrying  amount  exceeds  its  recoverable  amount.   Recoverable  amount  is  the  higher  of  an  asset's  fair  value  less  costs  of  disposal  and  value-­‐in-­‐use.  The  value-­‐ in-­‐use  is  the  present  value  of  the  estimated  future  cash  flows  relating  to  the  asset  using  a  pre-­‐tax  discount   rate   specific   to   the   asset   or   cash-­‐generating   unit   to   which   the   asset   belongs.   Assets   that   do   not   have   independent  cash  flows  are  grouped  together  to  form  a  cash-­‐generating  unit.   Trade  and  other  payables   These  amounts  represent  liabilities  for  goods  and  services  provided  to  the  Group  prior  to  the  end  of  the   financial  year  and  which  are  unpaid.  Due  to  their  short-­‐term  nature,  they  are  measured  at  amortised  cost   and  are  not  discounted.  The  amounts  are  unsecured  and  are  usually  paid  within  30  days  of  recognition.   Page  |  38                                             BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   Employee  benefits   Short-­‐term  employee  benefits   Liabilities  for  wages  and  salaries  and  other  employee  benefits  expected  to  be  settled  within  12  months  of   the  reporting  date  are  measured  at  the  amounts  expected  to  be  paid  when  the  liabilities  are  settled.   Other  long-­‐term  employee  benefits   Employee  benefits  not  expected  to  be  settled  within  12  months  of  the  reporting  date  are  measured  as  the   present  value  of  expected  future  payments  to  be  made  in  respect  of  services  provided  by  employees  up  to   the  reporting  date  using  the  projected  unit  credit  method.  Consideration  is  given  to  expected  future  wage   and  salary  levels,  experience  of  employee  departures  and  periods  of  service.  Expected  future  payments  are   discounted  using  market  yields  at  the  reporting  date  on  high  quality  corporate  bonds  with  terms  to  maturity   and  currency  that  match,  as  closely  as  possible,  the  estimated  future  cash  outflows.   Defined  contribution  superannuation  expense   Contributions  to  defined  contribution  superannuation  plans  are  expensed  in  the  period  in  which  they  are   incurred.   Share-­‐based  payments   Equity-­‐settled  share-­‐based  compensation  benefits  are  provided  to  directors  and  senior  executives.  The  plan   currently  in  place  to  provide  these  benefits  is  the  Employee  Share  Option  Plan  ('ESOP').   Equity-­‐settled  transactions  are  awards  of  shares,  or  options  over  shares  that  are  provided  to  employees  in   exchange  for  the  rendering  of  services.     The  cost  of  equity-­‐settled  transactions  are  measured  at  fair  value  on  grant  date.  Fair  value  is  independently   determined  using  Black-­‐Scholes  option  pricing  model  that  takes  into  account  the  exercise  price,  the  term   of   the   option,   the   impact   of   dilution,   the   share   price   at   grant   date   and   expected   price   volatility   of   the   underlying  share,  the  expected  dividend  yield  and  the  risk  free  interest  rate  for  the  term  of  the  option,   together  with  non-­‐vesting  conditions  that  do  not  determine  whether  the  Group  receives  the  services  that   entitle  the  employees  to  receive  payment.  No  account  is  taken  of  any  other  vesting  conditions.   The   cost   of   equity-­‐settled   transactions   are   recognised   as   an   expense   with   a   corresponding   increase   in   equity  over  the  vesting  period.  The  cumulative  charge  to  profit  or  loss  is  calculated  based  on  the  grant  date   fair  value  of  the  award,  the  best  estimate  of  the  number  of  awards  that  are  likely  to  vest  and  the  expired   portion   of   the   vesting   period.   The   amount   recognised   in   profit   or   loss   for   the   period   is   the   cumulative   amount  calculated  at  each  reporting  date  less  amounts  already  recognised  in  previous  periods.   Market  conditions  are  taken  into  consideration  in  determining  fair  value.  Therefore  any  awards  subject  to   market  conditions  are  considered  to  vest  irrespective  of  whether  or  not  that  market  condition  has  been   met,  provided  all  other  conditions  are  satisfied.   If  equity-­‐settled  awards  are  modified,  as  a  minimum  an  expense  is  recognised  as  if  the  modification  has  not   been  made.  An  additional  expense  is  recognised,  over  the  remaining  vesting  period,  for  any  modification   that  increases  the  total  fair  value  of  the  share-­‐based  compensation  benefit  as  at  the  date  of  modification.   Page  |  39                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   If   the   non-­‐vesting   condition   is   within   the   control   of   the   Group   or   employee,   the   failure   to   satisfy   the   condition  is  treated  as  a  cancellation.  If  the  condition  is  not  within  the  control  of  the  Group  or  employee   and  is  not  satisfied  during  the  vesting  period,  any  remaining  expense  for  the  award  is  recognised  over  the   remaining  vesting  period,  unless  the  award  is  forfeited.  If  equity-­‐settled  awards  are  cancelled,  it  is  treated   as  if  it  has  vested  on  the  date  of  cancellation,  and  any  remaining  expense  is  recognised  immediately.  If  a   new  replacement  award  is  substituted  for  the  cancelled  award,  the  cancelled  and  new  award  is  treated  as   if  they  were  a  modification.  The  dilutive  effect,  if  any,  of  outstanding  options  is  reflected  as  additional  share   dilution  in  the  computation  of  earnings  per  share.   Fair  value  measurement   When  an  asset  or  liability,  financial  or  non-­‐financial,  is  measured  at  fair  value  for  recognition  or  disclosure   purposes,  the  fair  value  is  based  on  the  price  that  would  be  received  to  sell  an  asset  or  paid  to  transfer  a   liability  in  an  orderly  transaction  between  market  participants  at  the  measurement  date;  and  assumes  that   the  transaction  will  take  place  either:  in  the  principal  market;  or  in  the  absence  of  a  principal  market,  in  the   most  advantageous  market.   Fair  value  is  measured  using  the  assumptions  that  market  participants  would  use  when  pricing  the  asset  or   liability,   assuming   they   act   in   their   economic   best   interests.   For   non-­‐financial   assets,   the   fair   value   measurement   is   based   on   its   highest   and   best   use.   Valuation   techniques   that   are   appropriate   in   the   circumstances  and  for  which  sufficient  data  are  available  to  measure  fair  value,  are  used,  maximising  the   use  of  relevant  observable  inputs  and  minimising  the  use  of  unobservable  inputs.   Issued  capital   Ordinary  shares  are  classified  as  equity.   Incremental   costs   directly   attributable   to   the   issue   of   new   shares   or   options   are   shown   in   equity   as   a   deduction,  net  of  tax,  from  the  proceeds.   Costs  related  to  an  initial  offering  are  expensed  in  the  statement  of  profit  or  loss  and  other  comprehensive   income.   Earnings  per  share   Basic  earnings  per  share   Basic  earnings  per  share  is  calculated  by  dividing  the  profit  attributable  to  the  owners  of  Benitec  Biopharma   Limited,   excluding   any   costs   of   servicing   equity   other   than   ordinary   shares,   by   the   weighted   average   number  of  ordinary  shares  outstanding  during  the  financial  year,  adjusted  for  bonus  elements  in  ordinary   shares  issued  during  the  financial  year.   Diluted  earnings  per  share   Diluted  earnings  per  share  adjusts  the  figures  used  in  the  determination  of  basic  earnings  per  share  to  take   into   account   the   after   income   tax   effect   of   interest   and   other   financing   costs   associated   with   dilutive   potential  ordinary  shares  and  the  weighted  average  number  of  shares  assumed  to  have  been  issued  for  no   consideration  in  relation  to  dilutive  potential  ordinary  shares.   Page  |  40                                     BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  1.  Significant  accounting  policies  continued   Goods  and  Services  Tax  ('GST')  and  other  similar  taxes   Revenues,  expenses  and  assets  are  recognised  net  of  the  amount  of  associated  GST,  unless  the  GST  incurred   is  not  recoverable  from  the  tax  authority.  In  this  case  it  is  recognised  as  part  of  the  cost  of  the  acquisition   of  the  asset  or  as  part  of  the  expense.   Receivables  and  payables  are  stated  inclusive  of  the  amount  of  GST  receivable  or  payable.  The  net  amount   of  GST  recoverable  from,  or  payable  to,  the  tax  authority  is  included  in  other  receivables  or  other  payables   in  the  statement  of  financial  position.   Cash  flows  are  presented  on  a  gross  basis.  The  GST  components  of  cash  flows  arising  from  investing  or   financing  activities  which  are  recoverable  from,  or  payable  to  the  tax  authority,  are  presented  as  operating   cash  flows.   Commitments  and  contingencies  are  disclosed  net  of  the  amount  of  GST  recoverable  from,  or  payable  to,   the  tax  authority.   Comparative  figures   When  required  by  accounting  standards,  comparative  figures  have  been  adjusted  to  conform  to  changes   in  the  presentation  for  the  current  financial  year.   Rounding  of  amounts   The   Parent   entity   has   applied   the   relief   available   to   it   under   ASIC   Corporations   (Rounding   in   Financial/Directors’  Reports).  Instrument  2016/191  and  accordingly  amounts  in  the  financial  statements   and   Directors   Report   have   been   rounded   off   to   the   nearest   $1,000,   or   in   certain   cases,   to   the   nearest   dollars.   Note  2.  Critical  accounting  judgements,  estimates  and  assumptions   The   preparation   of   the   financial   statements   requires   management   to   make   judgements,   estimates   and   assumptions   that   affect   the   reported   amounts   in   the   financial   statements.   Management   continually   evaluates  its  judgements  and  estimates  in  relation  to  assets,  liabilities,  contingent  liabilities,  revenue  and   expenses.  Management  bases  its  judgements,  estimates  and  assumptions  on  historical  experience  and  on   other   various   factors,   including   expectations   of   future   events,   management   believes   to   be   reasonable   under  the  circumstances.  The  resulting  accounting  judgements  and  estimates  will  seldom  equal  the  related   actual  results.  The  judgements,  estimates  and  assumptions  that  have  a  significant  risk  of  causing  a  material   adjustment  to  the  carrying  amounts  of  assets  and  liabilities  (refer  to  the  respective  notes)  within  the  next   financial  year  are  discussed  below.   Research  and  development  expenses   Management   does   not   consider   the   development   programs   to   be   sufficiently   advanced   to   reliably   determine  the  economic  benefits  and  technical  feasibility  to  justify  capitalisation  of  development  costs.   These   costs   have   been   recognised   as   an   expense   when   incurred.   Research   and   development   expenses   relate  primarily  to  the  cost  of  conducting  clinical  and  pre-­‐clinical  trials.  Clinical  development  costs  are  a   significant  component  of  research  and  development  expenses.  Estimates  have  been  used  in  determining   the  expense  liability  under  certain  clinical  trial  contracts  where  services  have  been  performed  but  not  yet   invoiced.  Generally,  the  costs,  and  therefore  estimates,  associated  with  clinical  trial  contracts  are  based  on   the  number  of  patients,  drug  administration  cycles,  the  type  of  treatment  and  the  outcome  being       Page  |  41                                           BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  2.  Critical  accounting  judgements,  estimates  and  assumptions  continued   Research  and  development  expenses  continued   The  length  of  time  before  actual  amounts  can  be  determined  will  vary  depending  on  length  of  the  patient   cycles  and  the  timing  of  the  invoices  by  the  clinical  trial  partners.   Research  and  development  refundable  tax  offsets   The   Group   accounts   for   the   federal   government   research   and   development   grant   tax   incentive   when   a   reliable  estimate  of  the  amounts  receivable  can  be  made.  In  the  year  ended  June  30  2017  reporting  period   detailed  reporting  systems  were  implemented  to  allow  for  the  first  time  a  reliable  estimate  to  be  made  of   the   grant   income   that   is   expected   to   be   received   for   the   current   period.   In   determining   the   estimate   management   reviews   historical   claims,   Government   overseas   findings   enabling   the   claim   of   overseas   expenditure  and  the  allocation  of  staff  and  overheads  costs  within  approved  projects.  Grant  Income  for  the   year  ended  June  30  2017  includes  an  estimate  of  Research  and  Development  grant  receivable  for  June  30   2017  of  $4,233k.  (refer  Note  5)   Share-­‐based  payment  transactions   The  Group  measures  the  cost  of  equity-­‐settled  transactions  with  employees  by  reference  to  the  fair  value   of  the  equity  instruments  at  the  date  at  which  they  are  granted.  The  fair  value  is  determined  by  using  either   the  Black-­‐Scholes  model  taking  into  account  the  terms  and  conditions  upon  which  the  instruments  were   granted.  The  accounting  estimates  and  assumptions  relating  to  equity-­‐settled  share-­‐based  payments  would   have  no  impact  on  the  carrying  amounts  of  assets  and  liabilities  within  the  next  annual  reporting  period   but  may  impact  profit  or  loss  and  equity.   Recovery  of  deferred  tax  assets   Deferred  tax  assets  are  recognised  for  deductible  temporary  differences  only  if  the  Group  considers  it  is   probable  that  future  taxable  amounts  will  be  available  to  utilise  those  temporary  differences  and  losses.   Given  the  Company’s  and  each  individual  entities’  history  of  recent  losses,  the  Group  has  not  recognised  a   deferred  tax  asset  with  regard  to  unused  tax  losses  and  other  temporary  differences,  as  it  has  not  been   determined  whether  the  Company  or  its  subsidiaries  will  generate  sufficient  taxable  income  against  which   the  unused  tax  losses  and  other  temporary  differences  can  be  utilised.   Costs  of  capital  raising   Costs  directly  attributable  to  an  equity  transaction  are  held  in  the  statement  of  financial  position  until  the   completion   of   the   transaction.   On   completion,   the   costs   will   be   applied   against   issued   capital.Costs   associated  with  abandoned  or  sub-­‐optimal  equity  transactions  are  expensed  to  profit  or  loss  in  the  year   the  transaction  is  determined  to  no  longer  be  viable  under  existing  conditions.     Note  3.  Operating  segments   Identification  of  reportable  operating  segments   The  Group  has  only  one  operating  segment  during  the  financial  year,  being  the  global  commercialisation   by   licensing   and   partnering   of   patents   and   licences   in   biotechnology,   more   specifically   in   functional   genomics,   with   applications   in   biomedical   research   and   human   therapeutics.   This   operating   segment   is   based  on  the  internal  reports  that  are  reviewed  and  used  by  the  Board  of  Directors  (who  are  identified  as   the  Chief  Operating  Decision  Makers  ('CODM'))  in  assessing  performance  and  in  determining  the  allocation   of  resources.    The  information  reported  to  the  CODM  is  on  at  least  quarterly.   The  group  sources  some  of  its  revenue  from  the  United  States  of  America  and  therefore  presents  the  split   by  geographical  region.   Page  |  42                               BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  3.  Operating  segment  continued   Geographical  locations   Australia   USA   Revenues  from  External   Customers June  2017   $’000   June  2016   $’000 Non  current  assets  excluding   financial  assets  and  income  tax June  2016   June  2017   $’000 $’000 333   -­‐   333   247   -­‐   247   112   333   445   127   379   506   Note  4.  Revenue   Licensing  revenue  and  royalties   Interest   Note  5.  Other  income   Australian  Government  Research  and  Development  refundable  tax  offset:   -  Received  during  the  year  relating  to  prior  expenditure   -  Estimated  relating  to  current  year  expenditure  (Refer  to  Note  2)   Note  6.  Expenses   Loss  before  income  tax  includes  the  following  specific  expenses:   Depreciation   Leasehold  improvements   Plant  and  equipment   Total  depreciation   Research  and  development   Project  expenses   Other  IP  related  expenses   Total  research  and  development   Employee  benefits  expense   Defined  contribution  superannuation  expense   Employee  benefits  expense  excluding  superannuation   Rental  expense  relating  to  operating  leases   Minimum  lease  payments   2017   $'000   2016   $'000   333   253   586     247     217     464     6,274   4,233   10,507     3,590   -­‐   3,590     53   164   217   6,456   469   6,925   240   4,775   5,015   205   85   290   12,240   1,047   13,287   280   6,003   6,283   376   265   Page  |  43                                                                                                       BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  7.  Income  tax  benefit   Income  tax  benefit   Current  tax   Aggregate  income  tax  benefit   Numerical  reconciliation  of  income  tax  benefit  and  tax  at  the  statutory  rate   Loss  before  income  tax  benefit   Tax  at  the  statutory  tax  rate  of  27.5%  (30%)   Tax  effect  amounts  which  are  not  deductible/(taxable)  in  calculating  taxable   income:    R&D  expenses    R  and  D  incentive  income   Legal  expenses   Share-­‐based  payments   Timing  differences  utilised  not  previously  recognised   Write  off  prepayment   Impact  of  foreign  exchange  rate  differences   Tax  losses  not  brought  to  account   Income  tax  benefit   2017   $'000   2016   $'000   -­‐     -­‐     -­‐   -­‐   (5,690)   (24,778)   (1,565)   (7,433)   2,676   (2,889)   154     106   (506)   -­‐   2   (2,022)   2,022   -­‐   4,151   (1,090)   59     524     (277)     540   46   (3,480)   3,480   -­‐   The  above  potential  tax  benefit  has  not  been  recognised  in  the  statement  of  financial  position.  These  tax   losses  are  recognised  only  if  the  consolidated  entity  considers  it  is  probable  that  future  taxable  amounts   will  be  available  to  utilise  those  temporary  differences  and  losses.  The  2016  numbers  have  been  amended   due  to  the  lodgement  of  an  amended  2016  tax  return.   Tax  losses  for  which  no  deferred  tax  asset  has  been  recognised  -­‐    Australia     -   Tax  losses  not  recognised     -   Capital  losses  not  recognised   -   Other  deferred  tax  assets  not  recognised   60,382   1,272   2,776   64,430   53,031   1,272   4,225   58,528   Potential  tax  benefit  of  tax  assets  not  recognised  at  27.5%  (30%)   17,718   17,558   Tax  losses  for  which  no  deferred  tax  asset  has  been  recognised  -­‐    US  (Tacere)   -   Tax  losses  not  recognised   Potential  tax  benefit  of  tax  assets  not  recognised  at  34%  -­‐  US   955   1,137   324   387   The  above  potential  tax  benefit,  which  excludes  tax  losses,  for  deductible  temporary  differences  has  not   been  recognised  in  the  statement  of  financial  position  as  the  recovery  of  this  benefit  is  uncertain. Page  |  44                                                                                         BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  8.  Current  assets  -­‐  cash  and  cash  equivalents   Cash  at  bank   Cash  on  deposit   Note  9.  Current  assets  -­‐  trade  and  other  receivables   Settlement  receivable*   Australian  Government  Research  and  Development  refundable  tax  offset   receivable   Other  receivable   2017   $'000   2016   $'000   4,349     13,026     17,375     552     17,678     18,230     109   4,233   64   4,406   900   -­‐   77   977   *  On  August  26,  2016,  a  settlement  agreement  was  reached  for  the  return  of  $900k  of  a  $2.7m  clinical  trial   prepayment  that  had  previously  been  shown  in  the  June  2015  financial  statements.  Payment  was  due  on   31   December   2016.   Subsequent   to   year   end   the   outstanding   settlement   receivable   was   received.   The   prepayment   had   originally   been   made   to   conduct   a   small   cell   lung   cancer   program.   The   lung   cancer   program  was  cancelled  in  the  year  ended  June  2016.    Other  than  above  there  is  no  receivable  balance  that   is  either  past  due  or  impaired.   Note  10.  Current  assets  -­‐  other   Prepayments   Note  11.  Non-­‐current  assets  -­‐  property,  plant  and  equipment   Leasehold  improvements  -­‐  at  cost   Less:  Accumulated  depreciation   Plant  and  equipment  -­‐  at  cost   Less:  Accumulated  depreciation   2017   $'000   2016   $'000   281     281     149     149     79     (19)   60     889   (504)   385     264     (220)   44     877     (415)   462     445     506     Reconciliations   Reconciliations  of  the  written  down  values  at  the  beginning  and  end  of  the  current  and  previous  financial   year  are  set  out  below:   Balance  at  30  June  2015   Additions   Depreciation  expense   FX  loss   Balance  at  30  June  2016   Leasehold   Plant  and   improvement   equipment   $'000   $'000   Total   $'000   237   12   (205)   -­‐   44   219   330   (85)   (2)   462   456   342   (290)   (2)   506   Page  |  45                                                                                           BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  11.  Non-­‐current  assets  -­‐  property,  plant  and  equipment  continued     Balance  at  30  June  2016  b’fwd   Additions   Depreciation  expense   FX  loss   Balance  at  30  June  2017   Note  12.  Current  liabilities  -­‐  trade  and  other  payables   Trade  payables   Other  payables   Note  13.  Current  liabilities  -­‐  provisions   Employee  benefits   Provision  for  make  good     Leasehold   Plant  and   improvement   equipment   $'000   $'000   Total   $'000   44   74   (53)   (5)   60     462   97   (164)   (10)   385     506   171   (217)   (15)   445     2017   $'000   2016   $'000   174     745     919     179     27   206   538     295     833     202     -­‐   202   Note  14.  Equity  -­‐  issued  capital   2017   Shares   2016   Shares   2017   $'000   2016   $'000   Ordinary  shares  -­‐  fully  paid   205,142,734     146,529,096     155,580     147,641     Movements  in  ordinary  share  capital   Details   Date   Shares   Issue  price   $'000   Balance   Issue  of  shares  Nant  Capital   Issue  of  shares  Nant  Capital   Conversion  of  Warrants   Share  issue  transaction  costs   Balance   The  weighted  average  number  of  shares  on   issue  during  the  twelve  months  to  June  30,   2017  was   30  June  2016   24  October  2016   13  March  2017   11  April  2017   146,529,096     29,305,819   29,305,819   2,000   0.0895   0.1859   0.3635   30  June  2017   205,142,734   147,641     2,623   5,448   1   (133)   155,580   175,433,909   Page  |  46                                                                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  14.  Equity  -­‐  issued  capital  continued   Issued  capital     Ordinary  shares   Ordinary  shares  entitle  the  holder  to  participate  in  dividends  and  the  proceeds  on  the  winding  up  of  the   Company  in  proportion  to  the  number  of  and  amounts  paid  on  the  shares  held.  The  fully  paid  ordinary   shares  have  no  par  value  and  the  Company  does  not  have  a  limited  amount  of  authorised  capital.   On  a  show  of  hands  every  member  present  at  a  meeting  in  person  or  by  proxy  shall  have  one  vote  and  upon   a  poll  each  share  shall  have  one  vote.   Share  buy-­‐back   There  is  no  current  on-­‐market  share  buy-­‐back.   Capital  risk  management   The  Group's  objectives  when  managing  capital  is  to  safeguard  its  ability  to  continue  as  a  going  concern,  so   that   it   can   provide   returns   for   shareholders   and   benefits   for   other   stakeholders   and   to   maintain   an   optimum  capital  structure  to  reduce  the  cost  of  capital.   The  capital  structure  of  the  Group  consists  of  cash  and  cash  equivalents  and  equity  attributable  to  equity   holders.  Operating  globally,  the  Group  develops  speciality  pharmaceutical  products.  The  overall  strategy  of   the   Group   is   to   continue   its   drug   development   programs,   which   depends   on   selling   assets   and   raising   additional  equity  to  fund  the  activities.   The  capital  risk  management  policy  remains  unchanged  from  the  2016  Annual  Report.   Note  15.  Equity  Reserves   Foreign  currency  reserve   Share-­‐based  payments  reserve   2017   $'000   2016   $'000   (1,285)   2,959   1,674   (1,319)   3,884     2,565     Foreign  currency  reserve   The   reserve   is   used   to   recognise   exchange   differences   arising   from   the   translation   of   the   financial   statements  of  foreign  operations  to  Australian  dollars.     Share-­‐based  payments  reserve   The  reserve  is  used  to  recognise  the  value  of  equity  benefits  provided  to  employees  and  directors  as  part   of  their  remuneration,  and  other  parties  as  part  of  their  compensation  for  services.   Movements  in  reserves   Movements  in  each  class  of  reserve  during  the  current  and  previous  financial  year  are  set  out  below:   Page  |  47                                                         BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  15.  Equity  Reserves  continued   Balance  at  30  June  2015   Foreign  currency  translation   Share-­‐based  payments   Transfer  of  expired  share-­‐based  payments   Balance  at  30  June  2016   Foreign  currency  translation   Share-­‐based  payments   Balance  at  30  June  2017   Note  16.  Equity  -­‐  accumulated  losses   Accumulated  losses  at  the  beginning  of  the  financial  year   Loss  after  income  tax  benefit  for  the  year   Transfer  from  share-­‐based  payment  reserve  for  expired  options   Accumulated  losses  at  the  end  of  the  financial  year   Foreign   Share-­‐ based   currency   payments   $'000   $'000   Total   $'000   (1,300)   (19)     -­‐   -­‐   (1,319)   34   (1,285)   3,338     -­‐   1,746   (1,200)   3,884     (925)   2,959   2,038     (19)     1,746     (1,200)   2,565     34   (925)   1,674   2017   $'000   2016   $'000   (131,369)   (5,690)   1,311   (135,748)   (107,791)   (24,778)   1,200   (131,369)   Note  17.  Equity  -­‐  dividends   There  were  no  dividends  paid,  recommended  or  declared  during  the  current  or  previous  financial  year.   Note  18.  Financial  instruments   Financial  risk  management  objectives   The  Group's  activities  expose  it  to  a  variety  of  financial  risks:  market  risk  (including  foreign  currency  risk   and  interest  rate  risk)  and  liquidity  risk.  The  Group’s  principal  financial  instruments  comprise  receivables,   payables,  cash  and  short-­‐term  deposits.  The  Group  manages  its  exposure  to  key  financial  risks,  including   interest   rate   and   currency   risk   in   accordance   with   the   Company   financial   risk   management   policy.   The   objective  of  the  policy  is  to  protect  the  assets  and  provide  a  solid  return.   Financial  Assets      Cash  and  cash  equivalents    Trade  and  other  receivables   Total  Financial  Assets   Financial  Liabilities   Trade  and  other  payables   Total  Financial  Liabilities   2017   $'000   2016   $'000   17,375   4,406   21,781   18,230   977   19,307   919   919   833   833   Page  |  48                                                               BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  18.  Financial  instruments  continued   Market  risk   Foreign  currency  risk   The   Group   undertakes   certain   transactions   denominated   in   foreign   currency   and   is   exposed   to   foreign   currency  risk  through  foreign  exchange  rate  fluctuations.   Foreign   exchange   risk   arises   from   future   commercial   transactions   and   recognised   financial   assets   and   financial   liabilities   denominated   in   a   currency   that   is   not   the   entity's   functional   currency.   The   risk   is   measured  using  sensitivity  analysis  and  cash  flow  forecasting.   At  the  June  30  2017  the  Company  held  USD  cash  or  cash  equivalents  of  AUD$906k  and  trade  payables  and   accruals   of   AUD$260k.   Net   USD   exposure   in   AUD   of   $646k.   Each   1   cent   movement   in   the   AUD/USD   exchange  rate  has  an  +/-­‐  effect  of  AUD  $6k  on  profit  and  net  assets  of  the  Company.  Exposures  to  foreign   exchange  rates  vary  during  the  year  depending  on  the  volume  of  overseas  transactions.  None  the  less  the   analysis  above  is  considered  to  be  appropriate  of  the  Group’s  exposure  to  currency  risk.   Interest  rate  risk   The  Group  generates  income  from  interest  on  surplus  funds.  At  reporting  date,  the  Group  had  the  following   assets  exposed  to  Australian  variable  interest  rate  risk  that  are  not  designated  in  cash  flow  hedges.   As  at  the  reporting  date,  the  Group  had  the  following  variable  rate  cash  and  cash  equivalents  outstanding:   Cash  and  cash  equivalents   Net  exposure  to  cash  flow  interest  rate  risk   Weighted   average   interest   rate   %   Balance   Weighted   average   interest   rate   %   $'000   1%     17,375     17,375     1%     Balance   $'000   18,230     18,230     The  company  has  forecast  reducing  cash  balances  over  the  coming  twelve  months,  as  a  result  net  exposure   to   interest   risk   will   diminish.   An   analysis   by   remaining   contractual   maturities   in   shown   in   'liquidity   and   interest  rate  risk  management'  below.   Credit  risk   Credit   risk   refers   to   the   risk   that   a   counterparty   will   default   on   its   contractual   obligations   resulting   in   financial   loss   to   the   Group.   The   maximum   exposure   to   credit   risk   at   the   reporting   date   to   recognised   financial  assets  is  the  carrying  amount,  net  of  any  provisions  for  impairment  of  those  assets,  as  disclosed  in   the  statement  of  financial  position  and  notes  to  the  financial  statements.  The  Group  does  not  hold  any   collateral.   Liquidity  risk   Vigilant  liquidity  risk  management  requires  the  Group  to  maintain  sufficient  liquid  assets  (mainly  cash  and   cash  equivalents)  to  be  able  to  pay  debts  as  and  when  they  become  due  and  payable.   .     Page  |  49                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  18.  Financial  instruments  continued   Liquidity  risk  continued   The  Group  manages  liquidity  risk  by  maintaining  adequate  cash  reserves  and  available  borrowing  facilities   by  continuously  monitoring  actual  and  forecast  cash  flows  and  matching  the  maturity  profiles  of  financial   assets  and  liabilities   Remaining  contractual  maturities   The  following  tables  detail  the  Group's  remaining  contractual  maturity  for  its  financial  instrument  liabilities.   The  tables  have  been  drawn  up  based  on  the  undiscounted  cash  flows  of  financial  liabilities  based  on  the   earliest  date  on  which  the  financial  liabilities  are  required  to  be  paid.     Weighted   average   interest   rate   %   1  year  or   less   Between  1   and  2  years   Between  2   and  5  years   Over  5   years   Remaining   contractual   maturities   $'000   $'000   $'000   $'000   $'000   -­‐%   -­‐%   174     745     919     -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   174     745     919     %   $'000   $'000   $'000   $'000   $'000   -­‐%   -­‐%   538     295     833     -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   -­‐   538     295     833     2017   Non-­‐derivatives   Non-­‐interest  bearing   Trade  payables   Other  payables   Total  non-­‐derivatives   2016   Non-­‐derivatives   Non-­‐interest  bearing   Trade  payables   Other  payables   Total  non-­‐derivatives   The   cash   flows   in   the   maturity   analysis   above   are   not   expected   to   occur   significantly   earlier   than   contractually  disclosed  above.   Fair  value  of  financial  instruments   Unless  otherwise  stated,  the  carrying  amounts  of  financial  instruments  reflect  their  fair  value.   Note  19.  Key  management  personnel  disclosures   Compensation   The  aggregate  compensation  made  to  directors  and  other  members  of  key  management  personnel  of  the   Group  is  set  out  below:   Short-­‐term  employee  benefits   Post-­‐employment  benefits   Long-­‐term  benefits   Share-­‐based  payments   2017   $   2016   $   76,623     32,537   1,539,777     2,048,543     55,630     13,209   418,986   1,011,851     2,067,923   3,129,233   Page  |  50                                                                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  20.  Remuneration  of  auditors   During  the  financial  year  the  following  fees  were  paid  or  payable  for  services   provided  by  Grant  Thornton  Audit  Pty  Ltd,  the  auditor  of  the  Company:   Audit  services  -­‐  Grant  Thornton  Audit  Pty  Ltd   Audit  or  review  of  the  financial  statements   Audit  or  review  of  the  financial  statements  FY  2016   Other  audit  services   -   F1  review   -   F3  review   -   S8  review   Other  services  -­‐  Grant  Thornton  Audit  Pty  Ltd   Tax  compliance  services   2017   $   2016   $   214,333     27,600   178,250     -­‐   20,800   9,561   -­‐   23,695   -­‐   10,200   23,150     23,150     22,250     22,250     295,444     234,395   Note  21.  Contingent  liabilities  and  commitments   Tacere  Inc.  (100%  owned  subsidiary  of  entity)   On  December  18,  2012,  the  Company  announced  the  appointment  of  Synteract,  Inc.  as  its  Clinical  Research   Organisation  responsible  for  the  progression  of  TT-­‐034  into  Phase  I/IIa  clinical  trials  in  the  U.S.  The  Company   has  negotiated  a  contract  with  favourable  commercial  terms,  in  some  instances  requiring  prepayment,  for   Synteract  to  continue  to  manage  the  Phase  I/IIa  clinical  trial  and  the  long  term  patient  follow-­‐up  through   2016  and  beyond.  While  the  Company  announced  on  February  20,  2016  that  is  was  terminating  the  HCV   program,  Benitec  is  committed  to  completing  the  study  and  the  company’s  estimate  of  the  cost,  assuming   all  patients  remain  in  the  study  and  the  follow-­‐up  continues  to  2021  is  a  maximum  of  $600k.  The  scenario   of  all  patients  remaining  in  the  study  to  2021  is  most  unlikely  and  the  actual  cost  is  likely  to  be  far  less  than   the  nominated  contingency  of  $600k.     Parent  entity   On  July  20,  2016,  the  Company  signed  a  contract  with  RxGen  Inc.  to  conduct  a  study  to  evaluate  the  ocular   tolerance  of  GFP  expressing  vector  variants  in  non-­‐human  primates.    On  February  22,  2017,  the  Company   signed  a  second  contract  with  RxGen  Inc.  to  conduct  an  additional  evaluation  of  the  ocular  tolerance  of  GFP   expressing  vector  variants  in  non-­‐human  primates.    On  June  8,  2017,  the  Company  signed  a  third  contract   with  RxGen  Inc.  to  conduct  an  evaluation  of  the  efficacy  of  ddRNAi  vector  candidates  in  a  laser-­‐induced   choroidal   neovascularization   model   in   African   green   monkeys.   It   is   estimated   that   $600k   is   outstanding   under  these  contracts.   On   December   20,   2016,   the   Company   signed   a   Collaborative   Research   Agreement   with   Royal   Holloway   University  of  London  to  support  studies  in  an  OPMD  animal  model  with  the  Company’s  clinical  constructs.     It  is  estimated  that  $500k  is  outstanding  under  these  contracts.   On  May  22,  2017,  the  Company  signed  a  Master  Services  Agreement  with  VGXI,  Inc.  to  manufacture  clinical   supplies  of  BB-­‐401  to  support  the  planned  Phase  2  clinical  trial.  It  is  estimated  that  $250k  is  outstanding   under  these  contracts   The   Company   has   contracted   for   scientific   work   on   the   therapeutic   programs,   as   described   above,   and   payments  total  approximately  $2,030k.  (June  30,  2016:  $2,720k).     Page  |  51                                                             BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  22.  Commitments   Lease  commitments  -­‐  operating   Committed  at  the  reporting  date  but  not  recognised  as  liabilities,  payable:   Within  one  year   One  to  five  years   2017   $'000   2016   $'000   169     89     258     126     98     224     Operating   lease   commitments   includes   contracted   amounts   for   offices   under   non-­‐cancellable   operating   leases  expiring  within  3  years  with,  in  some  cases,  options  to  extend.  The  leases  have  various  escalation   clauses.  On  renewal,  the  terms  of  the  leases  are  renegotiated.   Parent  entity   Benitec  Biopharma  Limited  is  the  parent  entity.   Subsidiaries   Interests  in  subsidiaries  are  set  out  in  note  25.   Key  management  personnel   Disclosures  relating  to  key  management  personnel  are  set  out  in  note  19  and  the  remuneration  report  in   the  directors'  report.   Note  23.  Related  party  transactions   The  following  transactions  occurred  with  related  parties:   Payment  for  other  expenses:   Legal  services  paid  /  payable  to  Francis  Abourizk  Lightowlers,  a  law  firm  in  which   Mr  Peter  Francis  is  a  partner  and  has  a  beneficial  interest.   Consultancy  fees  for  executive  duties  paid/payable  to  NewStar  Ventures  Ltd,  a   corporation  in  which  Dr  John  Chiplin  is  a  director  and  has  a  beneficial  interest.   2017   $   2016   $   191,050     116,540     32,133     165,983     Receivable  from  and  payable  to  related  parties   There   were   no   trade   receivables   from   or   trade   payables   to   related   parties   at   the   current   and   previous   reporting  date.   Loans  to/from  related  parties   There  were  no  loans  to  or  from  related  parties  at  the  current  and  previous  reporting  date.   Terms  and  conditions   All  transactions  were  made  on  normal  commercial  terms  and  conditions  and  at  market  rates.   Note  24.  Parent  entity  information   Set  out  below  is  the  supplementary  information  about  the  parent  entity.   Statement  of  profit  or  loss  and  other  comprehensive  income   Loss  after  income  tax   Total  comprehensive  income   2017   $'000   2016   $'000   (5,835)   (5,835)   (25,917)   (25,917)   Page  |  52                                                                         BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  24.  Parent  entity  information  continued   Statement  of  financial  position   Total  current  assets   Total  assets   Total  current  liabilities   Total  liabilities   Equity   Issued  capital   Share-­‐based  payments  reserve   Accumulated  losses   Total  equity   2017   $'000   2016   $'000   21,421     22,868     18,948     20,237     969     1,004   845     863     155,580     2,959     (136,675)   21,864     147,641     3,884     (132,151)   19,374     Guarantees  entered  into  by  the  parent  entity  in  relation  to  the  debts  of  its  subsidiaries   The  parent  entity  had  no  guarantees  in  relation  to  the  debts  of  its  subsidiaries  as  at  30  June  2017  and  30   June  2016.   Contingent  liabilities   The  parent  entity  had  no  contingent  liabilities  as  at  30  June  2017  (2016:  nil),  other  than  the  contingent   liabilities  described  as  belonging  to  the  parent  entity  in  note  21.   Capital  commitments  -­‐  Property,  plant  and  equipment   The  parent  entity  had  no  capital  commitments  for  property,  plant  and  equipment  as  at  30  June  2017  and   30  June  2016.   Significant  accounting  policies   The  accounting  policies  of  the  parent  entity  are  consistent  with  those  of  the  Group,  as  disclosed  in  note  1,   except  for  the  following:   ●    Investments  in  subsidiaries  are  accounted  for  at  cost,  less  any  impairment,  in  the  parent  entity.   ●    Dividends  received  from  subsidiaries  are  recognised  as  other  income  by  the  parent  entity  and  its   receipt  may  be  an  indicator  of  an  impairment  of  the  investment.   Note  25.  Interests  in  subsidiaries   The   consolidated   financial   statements   incorporate   the   assets,   liabilities   and   results   of   the   following   subsidiaries  in  accordance  with  the  accounting  policy  described  in  note  1:   Name   Benitec  Australia  Limited   Benitec  Biopharma  Limited   Benitec,  Inc.   Benitec  LLC   RNAi  Therapeutics,  Inc.   Tacere  Therapeutics,  Inc.*   Principal  place  of  business  /   Country  of  incorporation   Australia   United  Kingdom   USA   USA   USA   USA   2017   %   100.00%     100.00%     100.00%     100.00%     100.00%     100.00%     2016   %   100.00%     100.00%     100.00%     100.00%     100.00%     100.00%     Page  |  53                                                                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  25.  Interests  in  subsidiaries  continued   All  companies  in  the  Group  adopt  the  same  accounting  policies.   *  Note  Tacere  year  end  is  31  December  which  was  the  year  end  date  when  the  Company  was  acquired.   Note  26.  Events  after  the  reporting  period   No  matter  or  circumstance  has  arisen  since  30  June  2017  that  has  significantly  affected,  or  may  significantly   affect   the   Group's   operations,   the   results   of   those   operations,   or   the   Group's   state   of   affairs   in   future   financial  years.   Note  27.  Reconciliation  of  loss  after  income  tax  to  net  cash  used  in   operating  activities   2017   $'000   2016   $'000 Loss  after  income  tax  benefit  for  the  year   (5,690)   (24,778)   Adjustments  for:   Accrued  provision  Promega   Accrued  R&D  grant   Accrued  interests   Loss  on  sale     Depreciation  and  amortisation   Share-­‐based  payments   Unrealised  Foreign  exchange     Issue  of  ordinary  shares  to  Biomics     Impairment  of  prepayment   Change  in  operating  assets  and  liabilities:   Increase/(Decrease)  in  trade  and  other  receivables   (Decrease)/Increase  in  other  current  assets   Increase/(Decrease)  in  trade  and  other  payables   (Decrease)/Increase  in  employee  benefits   Increase/(Decrease)  in  provision     Net  cash  used  in  operating  activities   18   (4,233)   (10)   6   217   386   242     -­‐   -­‐   814   (182)   106     (3)     25   (8,304)   60   -­‐   -­‐   -­‐   290     1,746     506     500   1,800   (854)     1,178   (683)     27     -­‐   (20,208)   Note  28.  Earnings  per  share   Loss  after  income  tax  attributable  to  the  owners  of  Benitec  Biopharma  Limited   (5,690)           (24,778)         Number     Number   Weighted  average  number  of  ordinary  shares  used  in  calculating  basic   earnings  per  share   Weighted  average  number  of  ordinary  shares  used  in  calculating  diluted   earnings  per  share   175,433,909     142,312,486     175,433,909     142,312,486     Basic  earnings  per  share   Diluted  earnings  per  share   Cents   (3.24)     (3.24)     Cents   (17.41)   (17.41)    Outstanding  options  to  acquire  ordinary  shares  are  not  considered  dilutive  for  the  years  ended  30  June   2017  and  30  June  2016.   Page  |  54                                                                   BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  29.  Share-­‐based  payments   Benitec  Biopharma  Limited  Employees  Share  Option  Plan  (ESOP):   Description  of  plan   The  Group  may  from  time  to  time  issue  employee’s  options  to  acquire  shares  in  the  parent  at  a  fixed  price.   Each  option  when  exercised  entitles  the  option  holder  to  one  share  in  the  Parent  Company.  Options  are   exercisable  on  or  before  an  expiry  date,  do  not  carry  any  voting  or  dividend  rights  and  are  not  transferable   except  on  death  of  the  option  holder.     The  following  table  shows  the  number  and  weighted  average  exercise  price  (WAEP)  of  share  options  issued   under  the  ESOP:   Outstanding  at  the  beginning  of  the  year   Granted  during  the  year   Exercised  during  the  year   Lapsed  or  forfeited  during  the  year   Outstanding  at  the  end  of  the  year   2017   Number   12,220,000     2,200,000   -­‐   (4,696,000)   9,724,000   2017   WAEP   1.234     0.166   -­‐   1.164     0.832   2016   Number   12,500,000     6,720,000   -­‐   (7,000,000)   12,220,000   2016   WAEP   1.234     0.77   -­‐   1.06   1.079   Options  exercisable  at  the  end  of  the  year   6,497,333   8,292,000     Details  of  ESOP  share  options  outstanding  as  at  end  of  year:   Grant  date   Expiry  date   26  September  2011   26  September  2016   17  November  2012  **   17  November  2017   7  February  2012   6  November  2012   10  November  2013  *   22  August  2013  **   15  May  2014  **   17  December  2014  **   6      May  2015  **   12  November  2015*   9  August  2016**   7  February  2017   16  November  2017   18  May  2018   22  August  2018   15  May  2019   17  December  2019   6      May  2020   12  November  2020   9  August  2021   Exercise   price   $1.25     $1.25   $1.25   $0.62     $1.25     $1.50     $1.25     $1.25     $0.77   $0.1665   2017   Number   under  option   -­‐   400,000   -­‐   -­‐   400,000     480,000     180,000     2,334,000     650,000     3,080,000   2,200,000   9,724,000   2016   Number   Under  option   2,800,000   600,000   156,000   400,000   400,000   480,000   180,000   2,634,000   650,000   3,920,000   -­‐   12,220,000   The  weighted  average  remaining  life  of  the  options  issued  under  the  ESOP  at  30  June  2017  was  2  years   and  10  months  (2016:  2  years  and  7  months).   Page  |  55                                                                 BENITEC  BIOPHARMA  LIMITED   Notes  to  the  financial  statements  30  June  2017  continued   Note  29.  Share-­‐based  payments  continued   For  the  options  granted  during  the  year,  the  valuation  model  inputs  used  to  determine  the  fair  value  at  the   grant  date  are  as  follows:   Grant  date   Expiry  date   Share  price   Exercise   Expected  *   Dividend   Risk-­‐free   Fair  value   10/8/2016   10/8/2021   $0.115     $0.1665     91.52%     -­‐%   at  grant   date   price   volatility   yield   interest  rate   at  grant  date   $0.0962     2.4  %     Total   expenses   arising   from   share-­‐based   payment   transactions   recognised   during   the   period   as   part   of   employee  benefit  expense  were  $0.386m  (2016:  $1.745m).   *  expected  volatility  was  determined  with  reference  to  the  Benitec  share  price  based  on  historical  volatility.   Page  |  56                 BENITEC  BIOPHARMA  LIMITED   Directors  Declaration  30  June  2017   In  the  directors'  opinion:   ●    the  attached  financial  statements  and  notes  comply  with  the  Corporations  Act  2001,  the  Accounting   Standards,  the  Corporations  Regulations  2001  and  other  mandatory  professional  reporting  requirements;   ●    the  attached  financial  statements  and  notes  comply  with  International  Financial  Reporting  Standards   as  issued  by  the  International  Accounting  Standards  Board  as  described  in  note  1  to  the  financial   statements;   ●    the  attached  financial  statements  and  notes  give  a  true  and  fair  view  of  the  Group's  financial  position   as  at  30  June  2017  and  of  its  performance  for  the  financial  year  ended  on  that  date;  and   ●    there  are  reasonable  grounds  to  believe  that  the  Company  will  be  able  to  pay  its  debts  as  and  when   they  become  due  and  payable.   The  directors  have  been  given  the  declarations  required  by  section  295A  of  the  Corporations  Act  2001.   Signed  in  accordance  with  a  resolution  of  directors  made  pursuant  to  section  295(5)(a)  of  the  Corporations   Act  2001.   On  behalf  of  the  directors   ______________________________   Peter  Francis   Chairman   29  August  2017   Sydney   Page  |  57                                                         Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au Independent Auditor’s Report to the Members of Benitec Biopharma Limited Report on the audit of the financial report Opinion We have audited the financial report of Benitec Biopharma Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for the year ended on that date; and b Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Page | 58 Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Our procedures included, amongst others:  comparing the nature of the R&D expenditure included in the current year estimate to the prior year claim;  utilising an internal R&D expert to review the expenditure methodology employed by management for consistency with the R&D tax offset rules;  comparing the eligible expenditure used in the  receivable calculation to the expenditure recorded in the general ledger; inspecting copies of relevant correspondence with AusIndustry and the ATO related to historic claims; and  assessing the adequacy of the Group’s related disclosures within the financial report. Our procedures included, amongst others:  assessing the planned levels of operating and capital expenditures for consistency of relationships and trends to the Group’s historical results, results since year end, and our understanding of the business, industry and economic conditions of the Group;  assessing the ability of the group to curtail expenditure as required in order to manage cash outflows within the existing levels of available funding;  performing sensitivity analyses on the forecast cash flows;  agreeing year end cash balances to third party independent confirmations received to gain comfort around the opening balances used in the cash flow forecast; and  assessing the adequacy of the Group’s related disclosures within the financial report. Recognition of R&D refundable tax offset (Note 5) Under the research and development (R&D) tax incentive scheme, the Company receives a 43.5% refundable tax offset (2016: 45%) of eligible expenditure if its turnover is less than $20 million per annum. An R&D plan is filed with AusIndustry in the following financial year and, based on this filing, the Group receives the incentive in cash. Management performed a detailed review of the Group’s total R&D expenditure to estimate the refundable tax offset receivable under the R&D tax incentive legislation. This area is a key audit matter due to the size of the accrual and because there is a degree of judgement and interpretation of the R&D tax legislation required by management to assess the eligibility of the R&D expenditure under the scheme. Going concern (Note 1) The Group’s use of the going concern basis of accounting and the associated extent of uncertainty is a key audit matter due to the high level of judgment required by us in evaluating the Group’s assessment of going concern. The Directors have determined that the use of the going concern basis of accounting is appropriate in preparing the financial report. Their assessment of going concern was based on cash flow projections. The preparation of these projections incorporated a number of assumptions and judgments, and the Directors have concluded that the range of possible outcomes considered in arriving at this judgment does not give rise to a material uncertainty casting significant doubt on the Group’s ability to continue as a going concern. We critically assessed the levels of uncertainty, as it related to the Group’s ability to continue as a going concern, within these assumptions and judgments, focusing on the following: • The Group’s planned levels of expenditure on research and development and clinical trials to meet current program targets and the ability of the Group to manage cash outflows within available funding. • The nature and feasibility of planned methods the Group has to meet its financing commitments. In assessing this key audit matter, we involved senior audit team members who understand the Group’s business, industry and the economic environment it operates in. Page | 59 Information Other than the Financial Report and Auditor’s Report Thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report. Page | 60 Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 15 to 22 of the directors’ report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Benitec Biopharma Limited, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants L M Worsley Partner - Audit & Assurance Sydney, 29 August 2017 Page | 61 BENITEC  BIOPHARMA  LIMITED   Corporate  Directory  30  June  2017   Directors     Mr  Peter  Francis  -­‐  Non-­‐Executive  Chairman     Dr  Jerel  A  Banks  -­‐  Non-­‐Executive  Director     Ms  Megan  Boston  -­‐  Non-­‐Executive  Director     Mr  Kevin  Buchi  -­‐  Non-­‐Executive  Director     Dr  John  Chiplin  -­‐  Non-­‐Executive  Director    CEO     Mr  Greg  West    Company  Secretary     Mr  Greg  West     Notice  of  annual  general   meeting    The  details  of  the  annual  general  meeting  of  Benitec  Biopharma  Limited   are:    Level  17    383  Kent  Street    Sydney,  NSW  2000    Wednesday  8  November  2017  at  10:00  am  (AEST)   Registered  office   Share  register   Auditor   Bankers    Suite  1201    99  Mount  Street    North  Sydney,  NSW  2060    Head  office  telephone:  +61  2  9555  6986    Computershare  Investor  Services  Pty  Limited    Yarra  Falls    452  Johnston  Street    Abbotsford,  VIC  3067    Shareholders  Enquiries:  1300  787  272    Grant  Thornton  Audit  Pty  Ltd    Level  17    383  Kent  Street    Sydney,  NSW  2000    Westpac  Banking  Corporation    274  Darling  Street    Balmain,  NSW  2041   Stock  exchange  listing    Benitec  Biopharma  Limited  shares  are  listed  on  the  Australian  Securities   Exchange  in  Australia  (ASX:  BLT)    Benitec  Biopharma  Limited  shares  are  listed  on  the  NASDAQ  Global  Select   Market  in  United  States    (NASDAQ:  BNTC;  NASDAQ:  BNTCW)   Website    www.benitec.com   Page  |  62                                                                                                     BENITEC  BIOPHARMA  LIMITED   Shareholder  information  30  June  2017   The  shareholder  information  set  out  below  was  applicable  as  at  31st  July  2017.   Distribution  of  equitable  securities   Analysis  of  number  of  equitable  security  holders  by  size  of  holding:   1  to  1,000   1,001  to  5,000   5,001  to  10,000   10,001  to  100,000   100,001  and  over   Total  Shareholders   Number  of  holders     of  ordinary  shares        815   1,263          522      917        171    3,688   Holding  less  than  a  marketable  parcel   1,692   Equity  security  holders   Twenty  largest  quoted  equity  security  holders   The  names  of  the  twenty  largest  security  holders  of  quoted  equity  securities  are  listed  below:   HSBC  CUSTODY  NOMINEES  (AUSTRALIA)  LIMITED   MERRILL  LYNCH  (AUSTRALIA)  NOMINEES  PTY  LIMITED   NANT  CAPITAL  LLC   J  P  MORGAN  NOMINEES  AUSTRALIA  LIMITED   DALIT  PTY  LTD   CITICORP  NOMINEES  PTY  LIMITED   LONCETA  PTY  LTD     CSIRO   MRS  ALANKARAGE  SRIYANI  KARUNASENA   MJGD  NOMINEES  PTY  LTD   DR  RUSSELL  KAY  HANCOCK   TELOSAMA  SUPER  PTY  LTD     BNP  PARIBAS  NOMINEES  PTY  LTD     MR  PAUL  LEONARD  GRIMSHAW  +  MR  DAYNE  PAUL  GRIMSHAW     TIGCORP  NOMINEES  PTY  LTD   J  KEVIN  BUCHI   SAO  HOLDINGS  PTY  LTD     TRIUMPH  HOLDINGS  (WA)  PTY  LTD     DR  WARNAKULASOORIYA  KARUNASENA  +  MRS  ALANKARAGE   KARUNASENA     MR  GORDON  LONGLAND  +  MS  THERESE  RUFI     Ordinary     Shares  held     35,879,481   30,544,062   29,305,819   12,437,667   5,339,848   4,114,448   2,000,000   1,924,658   1,510,000   1,465,860   1,000,000   1,000,000   919,359   893,657   872,892   861,539   798,182   743,600   650,000   642,719   %  of  total   shares  issued   17.49   14.89   14.29   6.06   2.60   2.01   0.97   0.94   0.74   0.71   0.49   0.49   0.45   0.44   0.43   0.42   0.39   0.36   0.32   0.31   132,903,791     64.79     Page  |  63                                             BENITEC  BIOPHARMA  LIMITED   Shareholder  information  30  June  2017   Unquoted  equity  securities   Grant  date   16  November  2012  **   10  November  2013  *   22  August  2013  **   28  February  2014  ***   15  May  2014  **   17  December  2014  **   6      May  2015  **   20  August  2015  ****   12  November  2015*   9  August  2016**   17  August  2017**   Expiry  date   16  November  2017   18  May  2018   22  August  2018   28  February  2019   15  May  2019   17  December  2019   6      May  2020   21  August  2020   12  November  2020   9  August  2021   16  August  2022   Substantial  holders   Substantial  holders  in  the  Company  are  set  out  below:   Nant  Capital  LLC   Voting  rights   The  voting  rights  attached  to  ordinary  shares  are  set  out  below:   Exercise     price   Number     under  option   $1.250     $0.620     $1.250     $1.260     $1.500     $1.250     $1.250     $USD  0.275     $0.77   $0.1665   $0.196   400,000     400,000     480,000     13,246,203     180,000     2,334,000     650,000     11,498,000     3,080,000   2,200,000   9,450,000   43,918,203     Ordinary     Shares  held   %  of  total     shares     issued   58,611,638   28.57   Ordinary  shares   On  a  show  of  hands  every  member  present  at  a  meeting  in  person  or  by  proxy  shall  have  one  vote  and  upon   a  poll  each  share  shall  have  one  vote.   There  are  no  other  classes  of  equity  securities.   Page  |  64                                                           BENITEC BIOPHARMA LTD ABN 64 068 943 662 Suite 1201, 99 Mount Street North Sydney, NSW 2060 Australia Tel: +61 (0) 2 9555 6986 Email: info@benitec.com www.benitec.com 

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