Paragon Care : Corporate Governance Statement & Appendix 4G

ASX ANNOUNCEMENT

paragoncare.com.au

7 August 2017

Australian Securities Exchange Company Announcements Office

CORPORATE GOVERNANCE STATEMENT AND THE APPENDIX 4G

Please find following the Paragon Care Limited Corporate Governance Statement and the Appendix 4G (Key to Disclosures of Corporate Governance Council Principles and Recommendations).

The Statement may also be found on the company's website at http://www.paragoncare.com.au/corporate-governance-statement/

John Osborne

Company Secretary

For further information please contact:

Mark Simari

Managing Director

T: 1300 369 559

E: [e-mail]

About Paragon Care Limited

Paragon Care is a Melbourne based, listed company with the ASX (PGC), which has progressively acquired businesses in the healthcare sector. It is a leading provider of medical equipment, devices and consumables for the Australian and New Zealand healthcare market. These are high growth markets driven by the ageing of the population, continuously rising consumer expectations and increasing government spending. By combining a series of strategic acquisitions of class leading companies, Paragon Care has positioned itself to provide end to end solutions including equipment and consumable solutions for acute, aged, primary, community and hospital care. Paragon Care Ltd's head office is located at 11 Dalmore Drive Scoresby VIC 3179 Australia. For further information please contact Mark Simari, Managing Director (1300 369 559) or via email at [e-mail].

paragoncare.com.au

Paragon Care Limited Corporate Governance Statement‌

Paragon Care Limited (the Company or PGC) and the Board are committed to achieving and demonstrating the highest standards of corporate governance. For the year ended 30 June 2017 the Board reviewed the Company's framework and practices in the context of the 3rd edition of the ASX Corporate Governance Principles and Recommendations released in March 2014 (the Principles and Recommendations). The Paragon Care Corporate Governance Statement (the Statement) and the supplementary policies and charters are available on the Company's website (http://www.paragoncare.com.au/corporate-governance- statement/ ) under the "Investors Centre / Governance" tab. The Company and its controlled entities together are referred to as the group in this Statement.

A description of the group's corporate governance practices in the year ended 30 June 2017 and the comparison to the Principles and Recommendations requirements is provided below.

Principle 1 - Lay solid foundations for management and oversight

The directors are responsible to the shareholders for the performance of the group in both the short and the longer term and seek to balance competing objectives in the best interests of the group as a whole. The focus is to enhance the interests of shareholders and other key stakeholders and to ensure the group is properly managed.

The Board adopted a Board Charter with effect from 1 July 2014 and it is available on the Company's website (www.paragoncare.com.au ) under the "Investors Centre / Governance" tab. The principles detailed are consistent with the responsibilities of the Board discharged in the year to 30 June 2017. The responsibilities of the Board include:

• Developing and approving the corporate strategy and monitoring implementation of strategy.

• Evaluating, approving and monitoring the strategic and financial plans of the Company.

• Evaluating, approving and monitoring the annual budgets (including financial and other reporting) and business plans.

  About Paragon Care Limited

  Paragon Care is a Melbourne based, listed company with the ASX (PGC), which has progressively acquired businesses in the healthcare sector. It is a leading provider of medical equipment, devices and consumables for the Australian and New Zealand healthcare market. These are high growth markets driven by the ageing of the population, continuously rising consumer expectations and increasing government spending. By combining a series of strategic acquisitions of class leading companies, Paragon Care has positioned itself to provide end to end solutions including equipment and consumable solutions for acute, aged, primary, community and hospital care. Paragon Care Ltd.'s head office is located at 11 Dalmore Drive Scoresby VIC 3179 Australia. For further information please contact Mark Simari, Managing Director (1300 369 559) or via email at [e-mail].

• Evaluating, approving and monitoring the progress of major capital expenditure, capital management and all major corporate transactions, including the issue of securities of the Company.

• Appointment of the Chairman of the Company.

• Appointing, monitoring, managing the performance of, and if necessary terminating the employment of the Managing Director, Senior Management and Company Secretary. The Board will consider the Managing Director and Senior Management's authorities and accountabilities, as well as objectives and performance indicators to provide monitoring benchmarks.

• Managing succession planning for the positions of Managing Director and such other key management positions which may be identified from time to time.

• Liaising with the Managing Director in relation to the appointment and termination of such key management positions which may be identified from time to time.

• Ensuring appropriate resources are available to the Managing Director and Senior Management.

• Reviewing, ratifying and monitoring the Company's risk and audit framework, (including but not limited to) systems of risk management and internal control. Reviewing, ratifying and monitoring compliance with the Company's risk and audit policies and protocols.

• Reviewing, ratifying and monitoring the Company's operations in relation to, and compliance with relevant regulatory and legal requirements.

• Actively and regularly involved in strategic planning and reviewing, developing and considering strategic planning issues and identification of opportunities and the full range of business risks that will determine which of those opportunities are most worth pursuing.

• Periodic review with management on how the strategic environment is changing, what key business risks and opportunities are appearing, how they are being managed and what, if any, modifications in strategic direction should be adopted.

• Reviewing and approval of all disclosures related to any departures from the ASX principles of good corporate governance.

• Reviewing and approval of the disclosure of any of the Company's policies and procedures to the general public.

• Supervision of the public disclosure of all matters that the ASX best practice recommendations and recommend be publicly disclosed consistent with the Continuous Disclosure Policy approved by the Board.

• Establishing and monitoring performance and reporting of Committees of the Board.

• Appointment of Directors to Committees established by the Board.

• Approval and monitoring delegations of authority.

• Enhancing and protecting the reputation of the organisation

Day to day management of the group's affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the Board to the managing director and senior management team.

Any director, with the prior agreement of the Chairman (or in the case of the Chairman by reference to one non-executive director) may in furtherance of their duties, seek independent professional advice at the Company's expense.

The identification and selection of directors and senior management is undertaken by the Nominations & Remuneration Committee with effect from 1 July 2014. The Nominations & Remuneration Committee Charter is available on the Company's website (www.paragoncare.com.au ) under the "Investors Centre / Governance" tab. In addition to being responsible for guiding the remuneration structure of the Company this committee is responsible for identifying suitable candidates to act as directors of the Company and undertaking appropriate checks of candidates. The details of the all Company's directors can be found in the 2017 Annual Report and for directors that were elected at the 2016 Annual General Meeting in the Notice of Meeting.

All directors and senior management have written agreements with the Company detailing the terms of their appointment. The Company Secretary is appointed by the Board and reports to the chairman on all Board matters.

Diversity Policy

The Company values diversity and recognises the benefits it can bring to the organisation's ability to achieve its goals. The Company's workforce is relatively small and the directors do not believe it is appropriate to establish formal diversity objectives in relation to gender, age, cultural background and ethnicity at this stage. Given the scale of its operations the Company must ensure that the best candidate at the time is appointed to any vacant position. The Directors periodically review the Company's policies in the context of the principles of a diversity policy as outlined in Recommendation 1.5.

As at 30 June 2017 the structure of the workforce was as follows:

Board and senior management evaluation

The Board undertakes a biennial self-assessment of its collective performance, the performance of the Chairman and of its committees. The assessment also considers the adequacy of induction and continuing education and access to information. The results and any action plans are documented together with specific performance goals which are agreed for the coming year. An assessment carried out in accordance with this process was undertaken in June 2016 and a further assessment will be undertaken prior to 30 June 2018.