PRO-PAC PACKAGING LIMITED — Capital/Financing Update 2017

Oct 9, 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

Fully paid ordinary shares

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

Approximately 161,181,213, depending on the rounding of fractional entitlements on the record date and the number of shares held on that date by ineligible shareholders.

See item 4 below.

⁺ See chapter 19 for defined terms.

4	Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?	Yes – rank equally with existing quoted ordinary shares.
	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
5	Issue price or consideration	\$0.34 per share
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Shares issued under a 2:3 pro-rata, non renounceable rights issue to existing shareholders to raise funds to partly fund the acquisition of 100% of the issued share capital of Integrated Packaging Group Pty Ltd (ABN 89 132 697 664)
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	No
6b	The date the security holder resolution under rule 7.1A was passed	N/A
6c	Number of +securities issued without security holder approval under rule 7.1	N/A

⁺ See chapter 19 for defined terms.

• 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
• 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.

shares, depending on the rounding of fractional entitlements on the record date and the number of shares held on that date by ineligible shareholders.

Approximately 161,181,213 fully paid ordinary

N/A

N/A

N/A

N/A

Refer Annexure 1

6 November 2017

Number +Class

⁺ See chapter 19 for defined terms.

8	+class Number and of all +securities quoted on ASX +securities (including the in section 2 if applicable)	402,953,032	Ordinary shares fully paid

⁺ See chapter 19 for defined terms.

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

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

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) No change. See item 4 above.

Part 2 - Pro rata issue

11	Is security holder approval required?	No
12	Is the issue renounceable or non renounceable?	Non-renounceable
13	Ratio in which the +securities will be offered	2 new shares for every 3 shares held
14	+Class of +securities to which the offer relates	Ordinary fully paid shares
15	+Record date to determine entitlements	13 October 2017
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	No
17	Policy for deciding entitlements in relation to fractions	Fractional entitlements will be rounded up to the nearest whole number
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	All countries other than Australia and New Zealand
	entitlements 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

30 October 2017

⁺ See chapter 19 for defined terms.

20	Names of any underwriters	Bell Potter Securities Limited
21	Amount of any underwriting fee or commission	The Underwriter will be paid up to 3.5% of the total proceeds of the Entitlement Offer (excluding GST) in the form of fees for providing services and will be reimbursed for certain expenses.
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders	Nil
25	If the issue is contingent on security holders' approval, the date of the meeting	N/A
26	Date entitlement and acceptance form and offer documents will be sent to persons entitled	18 October 2017
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	N/A
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if applicable)	N/A
30	How do security holders sell their entitlements in full through a broker?	N/A
31	How do security holders sell part	N/A

⁺ See chapter 19 for defined terms.

of their entitlements through a broker and accept for the balance?

⁺ See chapter 19 for defined terms.

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

N/A

33 ⁺Issue date 6 November 2017

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.

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

⁺ See chapter 19 for defined terms.

Quotation agreement

• I 'Quotation of our additional 'securities is in AsX's absolute discretion. AsX may quote the 'securities on any conditions it decides.
• z We warrant the following to AsX.
• o 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 lotzC(6) of the Corporations Act. .

Note: An entity may need to obtoin appropriate warranties froin subscribers 16, the securities in order to be able to give this warranty

• o Section 724 or section 10/6E 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 101.6F 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 Joi9B 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 cl<nowledge that AsX is relying on the information and documents. We want that they are (will be) true and complete

D^re^I^114^?/11^?/. 7"

(Director/Company secretary)

Print name:

Sign here:

,,^^^. ^/^< ...,...,.....,.....,,......,........,......,..,......,...

⁺ See chapter 19 for defined terms.

⁺ 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 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	240,428,193
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	3,773,626
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	2,430,000
"A"	241,771,819

⁺ 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	36,265,772 (rounded down)
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:	0
• 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"	0
Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placement capacity under rule 7.1
"A" x 0.15	36,265,772 (rounded down)
Note: number must be same as shown in Step 2
Subtract "C"	0
Note: number must be same as shown in Step 3
Total ["A" x 0.15] – "C"	36,265,772 (rounded down) [Note: this is the remaining placement capacity 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 placement capacity is calculated
"A"	241,771,819
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	24,177,181 (rounded down)
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	0
"E"	0

⁺ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remaining placement capacity under rule 7.1A
"A" x 0.10	24,177,181 (rounded down)
Note: number must be same as shown in Step 2
Subtract "E"	0
Note: number must be same as shown in Step 3
Total ["A" x 0.10] – "E"	24,177,181 (rounded down)
	Note: this is the remaining placement capacity under rule 7.1A

+ See chapter 19 for defined terms.