Kangaroo Island Plantation Timbers : Appendix 3B Retail Offer

Appendix 3B

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

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

KANGAROO ISLAND PLANTATION TIMBERS LIMITED

ABN

19 091 247 166

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).

Ordinary Shares

1 +Class of +securities issued or to be issued

Issue of 5,227,030 Ordinary Shares pursuant to the retail component of the accelerated pro-rata non-renounceable rights issue (Entitlement Offer)

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

   Fully paid ordinary shares.

2. 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)

   Yes

3. 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

     $2.00 per share

4. Issue price or consideration

   The proceeds of capital raising will be used to be used to repay short term loans used to fund the purchase of the entire Forestry Investment Trust estate ("FIT") managed by New Forests Asset Management on Kangaroo Island for $55 million; and to provide sufficient working capital to cover pre-development costs for the Smith Bay Wharf on Kangaroo Island, South Australia. Refer to Offer Booklet dated 18 April 2017 for further information.

5. Purpose of the issue

(If issued as consideration for the acquisition of assets, clearly identify those assets)

Yes

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

Approved at AGM held on 5 October 2016

6b The date the security holder resolution under rule 7.1A was passed

Refer to Annexure 1

6c Number of +securities issued without security holder approval under rule 7.1

Refer to Annexure 1

6d Number of +securities issued with security holder approval under rule 7.1A

Refer to Annexure 1

6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)

Refer to Annexure 1

6f Number of +securities issued under an exception in rule 7.2

Refer to Annexure 1

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.

Refer to Annexure 1

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

7.1: 784,054 shares

7.1A: 1,897,164 shares Refer to Annexure 1

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

11 May 2017

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.

Number	+Class
40,873,809	Fully paid ordinary shares

8 Number and +class of all

+securities quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
n/a

1. Number and +class of all

   +securities not quoted on ASX (including the +securities in section 2 if applicable)

   The company currently has no dividend policy

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

   Part 2 - Pro rata issue

   No

3. Is security holder approval required?

   Non-renounceable

4. Is the issue renounceable or non- renounceable?

   Four (4) new Shares for every nine (9) Shares held

5. Ratio in which the +securities will be offered

Fully paid ordinary shares

14 +Class of +securities to which the offer relates

7pm AEST 19 April 2017 (Retail Entitlement Offer only)

15 +Record date to determine entitlements

No

1. Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

   Round up to the nearest whole number

2. Policy for deciding entitlements in relation to fractions

   All Shareholders whose registered address is not in Australia or New Zealand.

3. 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.

   Retail Entitlement Offer closed at 5pm AEST 4 May 2017

4. Closing date for receipt of acceptances or renunciations