NORWOOD SYSTEMS LIMITED — Director's Dealing 2017

Jun 1, 2017

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2 June 2017

Dawn James Adviser, Listings Compliance (Perth) ASX Compliance Pty Ltd Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000

Dear Ms James

Appendix 3Y – Change of Directors Interest Notice

Having regard to ASX Listing Rules 3.19A and 3.198 and Guidance Note 22: "Director Disclosure of Interests and Transactions in Securities- Obligations of Listed Entities", the Company makes the following submissions in relation to the late lodgement of the Directors' Change in Director's Interest Notice.

(1) Explain why Appendix 3Y was lodged late.

The Appendix 3Y was lodged late as a result of an oversight on timing for the allotment of entitlements and shortfall to directors under the Company’s recent rights issue. It was originally intended that Mr Edwards would receive both his allotment under the rights issue and under the shortfall within the five day period in which to notify ASX, thereby allowing the Company to aggregate his holdings into a single Appendix 3Y. However,

allotment of the shortfall under the rights issue was delayed and the time period for lodging an Appendix 3Y for Mr Edward’s entitlement component under the right issue had already expired. It is acknowledged that this was an oversight and that in fact two separate Appendix 3Y’s should have been lodged.

Notwithstanding the above, the Company takes its obligations under the Corporations Act 2001 (Cth) and ASX Listing Rules very seriously and confirms its understanding of the obligations under listing rules 3.19A and 3.198 to the ASX.

• (2) What arrangements does the Company have in place with its directors to ensure that it is able to meet its minimum disclosure obligations under listing rule 3.19A?

The Company considers that it has in place the necessary education, reporting and notification policies to ensure compliance with the disclosure obligations under listing rule 3.19A. Directors are notified at the time of their appointment of their obligations to inform the Company of any changes in their holdings. In addition to the Company's Continuous Disclosure obligations, the Company has a Share Trading Policy and Directors are aware of their obligations to inform the Company Secretary of all information necessary for the Company to comply with its obligations under listing rule 3.19A.

• (3) If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.198?

The Company considers its current arrangements are adequate to ensure timely notification in the future, however, the Company will continue to review and update its policies as appropriate. The Company has reminded each of its directors of their obligation to notify the Company promptly of changes in holdings of the Company's securities that may give rise to a disclosure obligation.

For and on behalf of Norwood Systems Limited

Company:Paul Ostergaard, CEO &Founder+61 8 9200 3500www.norwoodsystems.com@norwoodsystems@paulostergaard	Investor Relations:Shane Murphy, FTI Consulting+61 8 9485 8888+61 420 945 291shane.murphy@fticonsulting.com@ShaneWMurphy	Media:David Tasker, Professional PublicRelations+61 433 112 936david.tasker@ppr.com.au

Background

Norwood Systems provides voice, messaging and data services to consumers, enterprises, and carriers globally, leveraging its federated telecommunications service network and partnerships. Its mission is to deliver disruptive end-user communications apps that streamline and simplify how users around the world can access affordable, high-quality telecommunications services – anywhere, anytime.

Customers in over 5,000 cities and 200 countries are using Norwood’s services today with the World Phone® app. Recently, Norwood Systems released the World Message™ app, giving users seamless and cost effective international SMS and instant messaging functionality. The company is also developing the World Wi-Fi™ app, giving users seamless access to more than 20 million Wi-Fi Access points around the world.

Norwood Systems has built up a significant pipeline of prospects, including global players in the areas of aviation, professional services, banking, telecommunications, engineering and legal services . These prospects are motivated by various benefits of its Enterprise solution Corona , and/or augmenting their loyalty offerings with distributed or white labelled World Apps .

About Norwood Systems

Norwood Systems Ltd (ASX: NOR ) is revolutionising the ‘Shared Economy’ delivery of high-quality telecommunications services for individual business travellers and entire organisations globally. The Company listed on the ASX on 16 June 2015.

Norwood Systems was founded in 2011 to develop and supply the best possible global voice, data and messaging solutions using Over-The-Top (OTT) technologies. The Company’s current breakthrough offerings include Enterprise communications platforms, Corona Cloud , and Corona GTS , that works seamlessly and effortlessly with the advanced World Phone and World Message Apps.

The Corona Platform is an award-winning, enterprise-class service that integrates compatible mobile devices securely and seamlessly with the organisation’s existing Unified Communication or PBX networks, independent of their location. This provides the incredible benefits of true BYOD, identity management, and regulatory compliance management.

World Phone and World Message are revolutionary communications Apps, delivering ‘Shared economy’ consumer and enterprise access to leading fixed-line network service providers around the world. They provide unparalleled local access to high-quality voice and SMS networks in more than 90 countries. World Phone is currently available on iOS and Android. World Message is currently available on iOS, with an Android release coming soon.

31 May 2017

Mr Steven Wood Company Secretary Norwood Systems Limited PO Box 902 WEST PERTH WA 6872

By email: sw@grangeconsulting.com.au

Dear Mr Wood

Norwood Systems Limited (the “Entity”): Appendix 3Y – Change of Director’s Interest Notice

We refer to the following;

1. The Appendix 3Y lodged by the Entity with ASX on 25 May 2017 for Mr Michael Edwards (the “Director Notice”);

2. Listing rule 3.19A which requires an entity to tell ASX the following:

   • 3.19A.1 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the following times.

     • On the date that the entity is admitted to the official list.

     • On the date that a director is appointed.

     • The entity must complete Appendix 3X and give it to ASX no more than 5 business days after the entity’s admission or a director’s appointment.

   • 3.19A.2 A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) including whether the change occurred during a closed period where prior written clearance was required and, if so, whether prior written clearance was provided. The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs

   • 3.19A.3 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The entity must complete Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.

3. Listing rule 3.19B which states as follows.

20 Bridge Street www.asx.com.au Sydney NSW 2000 Customer service 13 12 79

ASX Compliance Pty Limited ABN 26 087 780 489

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

The Appendix 3Y indicate that a change in Mr Michael Edwards notifiable interest occurred on 19 May 2017 and 10 May 2017. It appears that the Director Notice in respect of the change that occurred on 10 May 2017 should have been lodged with ASX by 17 May 2017. Consequently, the Entity may be in breach of listing rules 3.19A and/or 3.19B.

Please note that ASX is required to record details of breaches of the listing rules by listed entities for its reporting requirements.

ASX reminds the Entity of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Entity make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities , under listing rule 18.7 we ask that you answer each of the following questions.

1. Please explain why the Appendix 3Y was lodged late.

2. What arrangements does the Entity have in place under listing rule 3.19B with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

• 3 If the current arrangements are inadequate or not being enforced, what additional steps does the Entity intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail at tradinghaltsperth@asx.com.au. It should not be sent to the ASX Market Announcements Office. A response is requested as soon as possible and, in any event, not later than 3.00 p.m. WST on 2 June 2017.

Under listing rule 18.7A, a copy of this letter and your response will be released to the market, so your response should be in a form suitable for release and must separately address each of the questions asked. If you have any queries or concerns about any of the above, please contact me immediately.

Yours sincerely [Sent electronically without signature]

Dawn James Adviser, Listings (Perth)

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