AnaeCo : Appendix 4C - Quarterly Report

+Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

36 087 244 228 31 MARCH 2017

1. Cash flows from operating activities Year to date (9 months) $A'000

2. Receipts from customers

3. Payments for

4. research and development

5. product manufacturing and operating costs

   11 18

   (251) (876)

   - -

6. advertising and marketing (88) (261)

7. leased assets - -

8. staff costs (268) (783)

9. administration and corporate costs (161) (675)

10. Dividends received (see note 3) - -

11. Interest received 2 16

12. Interest and other costs of finance paid (1) (3)

13. Income taxes paid - -

14. Government grants and tax incentives - 5,627

15. Other (provide details if material) - -

    1.9 Net cash from / (used in) operating activities (756) 3,063
16. Cash flows from investing activities

17. Payments to acquire:

18. property, plant and equipment - -

19. businesses (see item 10) - -

20. investments - -

21. intellectual property - -

22. other non-current assets - -

23. Proceeds from disposal of:

24. property, plant and equipment 3 3

25. businesses (see item 10) - -

26. investments - -

27. intellectual property - -

28. other non-current assets - -

29. Cash flows from loans to other entities - -

30. Dividends received (see note 3) - -

31. Other (provide details if material) - -

    2.6 Net cash from / (used in) investing 3 3 activities
32. Cash flows from financing activities

33. Proceeds from issues of shares - -

34. Proceeds from issue of convertible notes - -

35. Proceeds from exercise of share options - -

36. Transaction costs related to issues of - - shares, convertible notes or options

37. Proceeds from borrowings 300 1,600

38. Repayment of borrowings - -

39. Funding costs related to loans and borrowings

    - (4,539)

40. Dividends paid - -

41. Other (provide details if material) - -

    3.10 Net cash from / (used in) financing activities 300 (2,939)
42. Net increase / (decrease) in cash and cash equivalents for the period

43. Cash and cash equivalents at beginning of quarter/year to date

44. Net cash from / (used in) operating activities (item 1.9 above)

45. Net cash from / (used in) investing activities (item 2.6 above)

46. Net cash from / (used in) financing activities (item 3.10 above)

47. Effect of movement in exchange rates on cash held

    4.6 Cash and cash equivalents at end of quarter

    1,191 611

    (756) 3,063

    3 3

    300 (2,939)

    - -

    738 738
48. Reconciliation of cash and cash equivalents

    at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

    Current quarter $A'000 Previous quarter $A'000

49. Bank balances 738 1,191

50. Call deposits - -

51. Bank overdrafts - -

52. Other (provide details) - -

    5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 738 1,191
53. Payments to directors of the entity and their associates Currentquarter $A'000

54. Aggregate amount of payments to these parties included in item 1.2 103

55. Aggregate amount of cash flow from loans to these parties included in item 2.3

56. Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

    Nil

    Remuneration of the executive director and directors' fees for the non-executive directors.

57. Payments to related entities of the entity and their associates Current quarter $A'000

58. Aggregate amount of payments to these parties included in item 1.2 -

59. Aggregate amount of cash flow from loans to these parties included - in item 2.3

60. Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

61. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A'000 Amount drawn at quarter end $A'000

62. Loan facilities 23,000 19,400

63. Credit standby arrangements - -

64. Other (please specify) - -

65. Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

Loan Facilities

At the end of the quarter AnaeCo had borrowed $19.4 million (including $3.6 million accrued interest) from Monadelphous Group Limited (MND).

AnaeCo and MND have made arrangements whereby MND continues to provide funding to AnaeCo subject to the terms of the facility. These arrangements include regular review by MND and confirmation of AnaeCo's expenditure and funding requirements on a periodic basis, prior to commitment.

At MND's election the whole or any part of the outstanding loan may be converted to equity in AnaeCo Limited, subject to shareholder approval. The conversion price will be one of (a) the 10 day volume weighted average price of shares in AnaeCo Limited as at the conversion date, (b) the share price applicable to the then most recent rights issue or capital raising undertaken by AnaeCo Limited, or (c) such other price agreed between MND and AnaeCo Limited prior to the finalisation of a notice of meeting pursuant to which AnaeCo shareholder approval is to be sought.

This approval was granted by shareholders at the extraordinary general meeting held on 17 October 2016.

During the previous quarter, AnaeCo paid MND $4.54 million under the terms of the Tripartite Deed. This payment was made from funds received via the R&D Tax Incentive Refund.

9.	Estimated cash outflows for next quarter	$A'000
9.1	Research and development	275
9.2	Product manufacturing and operating costs	-
9.3	Advertising and marketing	90
9.4	Leased assets	-
9.5	Staff costs	260
9.6	Administration and corporate costs	225
9.7	Other (provide details if material)	-
9.8	Total estimated cash outflows	850