Kangaroo Island Plantation Timbers : Proposed change to management incentives

The Manager

Companies Announcements Office Australian Securities Exchange

18 May 2017

Dear Sir/Madam,

Kangaroo Island Plantation Timbers Ltd (KPT or the Company) refers to its announcement of 5 May 2017, in which it advised that Mr Graham Holdaway would become a full-time executive director of the Company.

Mr John Sergeant, the Managing Director, has suggested to the Company that he would prefer that the performance rights granted to him and Mr Holdaway at the most recent General Meeting be shared equally.

The Board has accepted Mr Sergeant's suggestion and announces that it intends to seek the necessary shareholder consent at the next general meeting of the Company. The effect of the proposed change is shown below.

There is no change proposed either to the total number of performance rights or to those held by the other three directors. The threshold share price is determined by reference to the 1,000,000 share VWAP. All figures have been adjusted for the recent share split.

In the event that the conditions for the issue of shares under the scheme are met before the proposal can be put to shareholders for approval, Mr Sergeant's allocation would be reduced voluntarily, pending the outcome of the next general meeting.

Yours sincerely,

Victoria Allinson Company Secretary

Suite 805, Aurora House, 147 Pirie Street, Adelaide SA 5000

T (08) 8227 2482 F (08) 8312 2020

kipt.com.au ACN 091 247 166