PRO-PAC PACKAGING LIMITED — Capital/Financing Update 2017

Dec 5, 2017

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

Pro-Pac Packaging Limited

ABN

36 112 971 874

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 be issued
• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued

Shares – to be quoted Performance rights – not to be quoted Options – not to be quoted

14,910,000 fully paid ordinary shares 1,375,000 performance rights 1,200,000 options

+ See chapter 19 for defined terms.

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) Shares Options

• See item 4 below.

• Exercise price: $0.38 per option, with each option entitling the holder to one fully paid ordinary share

• Exercise period: 3 year period from the issue date

Performance rights:

• Exercise price: nil
• Exercise period: provided the performance rights have vested, within 12 months commencing from the day after the audited results of the Company for the year ending 30 June 2020 have been released to the market

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the +issuedate with an existing +classofquoted +securities?If the additional +securities donot rank equally, please state:•the date from which they do•the extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest payment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	The shares rank equally with existing quotedordinary shares.The options and performance rights will,upon exercise, entitle the holders to fullypaid ordinary shares which, upon issue, willrank equally with existing quoted ordinaryshares.Optionholdersandperformancerights holders are not entitled to participateindividends,distributionsorinterestpayments until they exercise their options orperformance rights (as applicable).
5	Issue price or consideration	Shares: $0.38 per sharePerformance rights: nilissue price andexercise priceOptions: nil issue price and exercise price of$0.38 per option
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	Shares: issued to employees, the CEO andan executive director under the Company'sExecutive Long Term Incentive PlanPerformance rights: issued to the CEO aspart of his remuneration packageand anexecutive employeeOptions:issuedtoadirectoroftheCompany
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?	Yes
	If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i
6b	The date the security holder	27 November 2017
	resolution under rule 7.1A waspassed

+ See chapter 19 for defined terms.

6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	3,310,000 shares375,000 performance rights
6d	Number of +securities issuedwith security holder approvalunder rule 7.1A	Nil
6e	Number of +securities issuedwith security holder approvalunderrule7.3,oranotherspecific security holder approval(specify date of meeting)	11,600,000 shares1,000,000 performance rights1,200,000 options(allGeneral Meeting on 27 November 2017)	approved at the Company's Annual
6f	Number of +securities issuedunder an exception in rule 7.2	14)	See item 6e above (issued under Exception
6g	If +securities issued under rule7.1A, was issue price at least 75%of 15 day VWAP as calculatedunder rule 7.1A.3?Include the+issue date and both values.Include the source of the VWAPcalculation.	N/A
6h	If +securities were issued underrule7.1Afornon-cashconsideration,statedateonwhichvaluationofconsideration was released toASX Market Announcements	N/A
6i	Calculate the entity's remainingissue capacity under rule 7.1 andrule 7.1A – complete Annexure 1andreleasetoASXMarketAnnouncements	Refer Annexure 1
7	+Issue datesNote: The issue date may be prescribed byASX (refer to the definition of issue date inrule 19.12). For example, the issue date for apro rata entitlement issue must comply withthe applicable timetable in Appendix 7A.Cross reference: item 33 of Appendix 3B.	6 December 2017
		Number	+Class

+ See chapter 19 for defined terms.

+ See chapter 19 for defined terms.

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
1,375,000	Performance rights
1,200,000	Options

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

See item 4 above

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?	N/A
13	Ratio in which the +securitieswill be offered	N/A
14	+Class of +securities to which theoffer relates	N/A
15	+Recorddatetodetermineentitlements	N/A
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlementsin relation to fractions	N/A
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocuments	N/A
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.

+ See chapter 19 for defined terms.

19 Closing date for receipt of acceptances or renunciations

N/A

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

20	Names of any underwriters	N/A
21	Amount of any underwriting feeor commission	N/A
22	Names of any brokers to theissue	N/A
23	Fee or commission payable to thebroker to the issue	N/A
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	N/A
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	N/A
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	N/A
27	If the entity has issued options,andthe terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders	N/A
28	Date rights trading will begin (ifapplicable)	N/A
29	Date rights trading will end (ifapplicable)	N/A
30	How do security holders selltheir entitlements in full througha broker?	N/A
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	N/A

+ See chapter 19 for defined terms.

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

33 +Issue date N/A

N/A

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 fully paid ordinary shares only
• (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.

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)

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

Number	+Class

+ See chapter 19 for defined terms.

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.

Company secretary

Sign here: .................................................. Date: 6 December 2017

Print name: Mark Saus

+ See chapter 19 for defined terms.

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 placementcapacity is calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue	241,771,819
Add the following:
Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2	161,181,634 – issued on 3 November 2017under the Company's non-renounceablerights issue
Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approval	145,925,090 – issued on 6 November 2017to certain vendors as part consideration foran acquisition
Number of partly paid +ordinary•securities that became fully paid in that12 month period	11,600,000 – issued on 6 December 2017under the Company's Executive Long TermIncentive Plan
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	-1,000,000 – forfeited shares cancelled on29 November 2017
"A"	559,478,543

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	83,921,781 (rounded down)
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:	12,495,934 ordinary shares – issued on 6November 2017 to certain vendors as partconsideration for an acquisition
•Under an exception in rule 7.2•Under rule 7.1A	3,310,000 ordinary shares – issued on 6December 2017 under the Company'sExecutive Long Term Incentive Plan
•With security holder approval under rule7.1 or rule 7.4	375,000 performance rights – issued on 6December 2017 to an executive employee ofthe Company
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"	16,180,934
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1

"A" x 0.15	83,921,781 (rounded down)
Note: number must be same as shown inStep 2
Subtract "C"	16,180,934
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	67,740,847 (rounded down)
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	559,478,543
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	55,947,854 (rounded down)
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod under rule 7.1A	0
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	0

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	55,947,854 (rounded down)
Note: number must be same as shown inStep 2
Subtract "E"	0
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	55,947,854 (rounded down)
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.