AUSTAL LIMITED — Capital/Financing Update 2014

Nov 16, 2014

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

AUSTAL LIMITED

ABN

73 009 250 266

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

• 1 +Class of +securities issued or to 1. Ordinary shares be issued 2. Performance rights

• 2 Number of[+] securities issued or 1. 227,634 ordinary shares. to be issued (if known) or 2. 1,988,662 performance rights maximum number which may be issued

• See chapter 19 for defined terms.

Appendix 3B Page 1

04/03/2013

Appendix 3B New issue announcement

	3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	04/03/2013 1. Fully paid ordinary shares issued to CEO in satisfaction of the share-based remuneration component of CEO’s employment contract and as approved by shareholders at the company’s AGM on 30 October 2014. The shares are subject to a voluntary 18 month escrow period. 2. Performance rights issued to executives (including the Chief Executive Officer, pursuant to shareholder approval at the company’s AGM on 30 October 2014) in accordance with the rules of the Austal Limited Long Term Incentive Plan. Each performance right is an entitlement to one fully paid ordinary share, subject to the satisfaction of certain vesting conditions. The number of performance rights which vest will depend on the extent to which the vesting conditions have been satisfied for the relevant period. The performance rights will vest in instalments as follows: A. In respect of the 1,173,455 performance rights issued in September and November 2014: (a) 25% will be eligible to vest on 30 June 2016; and (b) 75% will be eligible to vest on 30 June 2017. B. In respect of the 1,102,520 performance rights issued in November – December 2013: (a) 50% will be eligible to vest on 30 June 2015; and (b) 50% will be eligible to vest on 30 June 2016. All performance rights have a zero exercise price. Those that do not vest will lapse immediately.
+ A	See chapter 19 for defined terms. ppendix 3B Page 2

• See chapter 19 for defined terms.

Appendix 3B Page 2

Appendix 3B New issue announcement

4 Do the[+] securities rank equally 1. Ordinary shares – yes. in all respects from the[+] issue date with an existing[+] class of 2. Performance rights – any shares quoted[+] securities? resulting from the exercise of If the additional[+] securities do performance rights which vest in accordance with the rules of the not rank equally, please state:  the date from which they do Austal Long Term Incentive Plan  the extent to which they will rank equally with existing fully participate for the next paid ordinary shares. dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 1. Ordinary shares: nil – issued in accordance with employment contract obligations and as approved by shareholders at the company’s 2014 AGM; 2. Performance rights – nil. 6 Purpose of the issue 1. Ordinary shares - issued in (If issued as consideration for accordance with employment the acquisition of assets, clearly contract obligations and as approved identify those assets) by shareholders at the company’s 2014 AGM; 2. Performance rights – issued in accordance with the rules of the Austal Long Term Incentive Plan. 6a Is the entity an[[+]] eligible entity No.

6a Is the entity an[[+]] eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed

• See chapter 19 for defined terms.

Appendix 3B Page 3

04/03/2013

Appendix 3B New issue announcement

6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

• See chapter 19 for defined terms.

Appendix 3B Page 4

04/03/2013

Appendix 3B New issue announcement

7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

1.	Ordinary shares: 15 November 2014;	Ordinary shares: 15 November 2014;	Ordinary shares: 15 November 2014;
2.	Performance rights:
	a. In respect	of	379,390
	performance	rights: 30
	October 2014;
	b. In respect	of	794,065
	performance	rights:	30 Sep
	2014 - 10 Oct 2014;
	c. In respect	of	1,102,520
	performance rights:		4 Nov –
	10 Dec 2013.

Number +Class 8 Number and +class of all 346,772,567 Ordinary shares +securities quoted on ASX ( including the +securities in section 2 if applicable)

• See chapter 19 for defined terms.

Appendix 3B Page 5

04/03/2013

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	2,275,975 7,997,554 - 725,500 - 1,505,000 - 1,925,000 - 1,715,000 - 709,018 - 1,418,036	Performance rights Employee share options exercisable in the following periods (subject to vesting conditions): 10 Sep 2011 – 10 Sep 2015 30 Oct 2012 – 30 Oct 2016 28 Sep 2013 – 28 Sep 2017 20 Dec 2014 – 20 Dec 2018 On satisfaction of vesting conditions 5 Oct 2015 – 5 Oct 2018, subject to vesting conditions
	Ordinary shares – same as for existing ordinary fully paid shares; Performance rights – not applicable until rights have vested into shares; Share options – unchanged.

Part 2 - Pro rata issue

11	Is security	holder	approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the		+securities
	will be offered

• See chapter 19 for defined terms.

Appendix 3B Page 6

04/03/2013

Appendix 3B New issue announcement

14	+Class of+securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations

• See chapter 19 for defined terms.

Appendix 3B Page 7

04/03/2013

Appendix 3B New issue announcement

20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell
	their entitlements_in full_through
	a broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the
	balance?

• See chapter 19 for defined terms.

Appendix 3B Page 8

04/03/2013

Appendix 3B New issue announcement

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

• 33 +Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000

• 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

Appendix 3B Page 9

04/03/2013

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 10

04/03/2013

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

==> picture [121 x 67] intentionally omitted <==

Sign here: ............................................................ ( ~~Director~~ /Company secretary)

Date: 17 Nov 2014

Print name: Adrian Strang

• See chapter 19 for defined terms.

Appendix 3B Page 11

04/03/2013

Appendix 3B New issue announcement

== == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Insert number of fully paid[+] ordinary securities on issue 12 months before the + issue date or date of agreement to issue

Add the following:

• Number of fully paid[+] ordinary securities issued in that 12 month period under an exception in rule 7.2

• Number of fully paid[+] ordinary securities issued in that 12 month period with shareholder approval

• Number of partly paid[+] ordinary securities that became fully paid in that 12 month period

Note:

• Include only ordinary securities here – other classes of equity securities cannot be added

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• Subtract the number of fully paid[+] ordinary securities cancelled during that 12 month period “A”

• See chapter 19 for defined terms.

Appendix 3B Page 12

04/03/2013

Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

• “B” 0.15 [Note: this value cannot be changed]

• Multiply “A” by 0.15 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of[+] equity securities issued or agreed to be issued in that 12 month period not counting those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4

• Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C”

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1 “A” x 0.15 Note: number must be same as shown in Step 2 Subtract “C” Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 13

04/03/2013

Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D”

0.10

Note: this value cannot be changed

Multiply “A” by 0.10

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• It may be useful to set out issues of securities on different dates as separate line items

“E”

• See chapter 19 for defined terms.

Appendix 3B Page 14

04/03/2013

Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A “A” x 0.10 Note: number must be same as shown in Step 2 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 15

04/03/2013