If YES, please provide details any control measures and the number of such instances in comparison to total number of accounts

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1 Page 1 of 8 PROPOSAL FORM SECTION 2: FIDELITY GUARANTEE Please provide as much information as possible in order that the risks are properly assessed. Managing Agents who are properly underwritten and purchase this cover are able to offer their clients additional peace of mind as well as provide their client bodies corporate with access to very affordable trustee indemnity & fidelity premiums in terms of their management rules. This proposal form forms part of your PIMA Professional Indemnity Cover application. 1 EMPLOYEES a) How many employees have access to body corporate funds? b) Do any employees have sole access to client accounts / funds? If, please provide details any control measures and the number of such instances in comparison to total number of accounts c) What has the staff turnover been over the past year? (e.g. 1 staff member replaced out of 20) d) Are new portfolio managers recruited from the market or trained from within the company? Recruited Trained e) Are potential recruited employees previous employers contacted for reference prior to engagement? f) Is at least one other reference of new recruits checked g) Are any employees previously involved with dishonesty employed by your firm?

2 Page 2 of 8 If for g) above, please provide more background information 2. ACCOUNTING a. Please tick boxes / mark boxes with x in which categories of business activity involving clients money are you involved in a) Collection of levies d) Management of surplus funds b) Collection of rental income e) Debt collection c) Disbursements obo clients f) Financial control of community scheme funds With regard to a) Collection of levies above, please tick / mark with x methods of depositing (type of accounts) and signing powers and the number of such clients using such method (approximate): i) Trust account one account for all clients Types of Accounts / Deposit of Client money mark No. of accounts ii) iii) iv) Trust account separate trust account per client Client has own bank account only trustees / client signs or has online access Client has own bank account trustees and managing agent sign/ have access v) Client has own bank account managing agent given complete signing authority b. How many individual levy payments are collected / processed monthly? c. How many rental payments are collected monthly? d. With regard to d) Management of surplus funds, how many community scheme accounts and approximate value of funds managed in these categories? Category of Invested Funds Trust Account (bulked together) with bank in name of M.A. No of schemes Value of funds (approximately) Trust Account Individual Account investment Corporate Saver or Bank Account i.n.o. Community Scheme Bulked with Third Party e.g. Accounting or Law firm Other Investment e.g. Money Market Unit Trust / Policy e. Is/are cash and/or cheques received obo clients? f. Approximate value of cheques / cash received and deposited (obo clients) every month? R g. Approximate value of cheque payments and cash payments made (paid out obo clients) every month? R

3 Page 3 of 8 h. % Statements sent by Post vs Electronic P % E % i. Are all cheques / electronic payments countersigned / authorized? j. Are cheques and cash over R1, 000 kept in a locked safe or secured cabinet? 3. REMUNERATION Describe the procedures employed in the payment of salaries and wages (own business) a) Describe the procedures employed in the payment of salaries and wages (employees of clients) b) c) In respect of both a) and b) above, how often is the payroll checked against a staff register? d) How many staff members salaries do you / your managing agency account for (per category below): Own staff (including directors): Community schemes: 4. AUDITS i) INTERNAL AUDITS a) Are internal audits undertaken? (excludes external audit or EAAB) b) Does the internal audit include all locations / branches / offices? N/A

4 Page 4 of 8 c) Are accounting systems consistent at all locations / branches? N/A d) Are surprise audits undertaken? N/A e) When was the last internal audit carried out? ii) EXTERNAL AUDITS a) Is your statutory annual audit (for your business accounts) carried out by an independent firm of auditors / chartered accountants? Name of audit firm: Since when? b) Is your statutory annual audit (for your EAAB Trust Account) carried out by an independent firm of auditors / chartered accountants? Name of audit firm: Since When? c) Have these audits been complete and unqualified? d) Are any community schemes whom you manage have audits with qualified audit reports? If yes, please give details, or if only a community scheme s books, please provide reasons for the qualification otherwise mark N/A e) Are all branches of your business audited? f) When was the last audit carried out (your business): g) When was the last audit carried out (your trust account):

5 Page 5 of 8 h) Has the EAAB ever audited / inspected your firm? If, what was the outcome? 5. COMPUTER CONTROLS AND ELECTRONIC FUNDS TRANSFER a. Please tick / mark appropriate boxes below: Electronic fund transfers are made by: Accounts Manager only Principal Agent only The applicable Portfolio Manager One person but authorized by another Other Please provide any further comments iro Electronic fund transfers: b. How often are passwords changed? c. How many staff members have access to bank accounts (ability to transfer funds)? d. Annual rand value of funds electronically transferred (estimate) R e. Average daily amount R f. Are all transactions checked / audited (by another person)? If so, by whom? How often? g. Does the bank acknowledge transfers? If, please tick appropriate box below: By allowing print of transaction or sms to recipient or sms alert to key person Alert over certain limits Other

6 Page 6 of 8 If Other, please comment: h. Is there a separation of duties between those who are authorised to approve electronic funds transfers and those who release amounts into the computer? Comment: 6. LOSS HISTORY a) During the past 5 (five) years, have you (business and directors), suffered any Fidelity Guarantee loss of money and/or other property belonging to you or for which you were responsible, or did you suffer direct financial loss as a result of fraud or dishonesty of an employee? b) During the past 5 (five) years, have you (business and directors), had any near loss or potential loss of money and/or other property belonging to you or for which you were responsible, as a result of alleged or possible fraud or dishonesty of an employee, since recovered i.e. no actual loss? If to a) or b) above, please provide details and when this occurred: 7. INSURANCE HISTORY a) Do you presently hold or have you in the past held Fidelity Guarantee Insurance with an insurer? (Excludes EAAB Fidelity Fund Certificate) If, please state: Name of insurers Indemnity limit Excess (each and every claim) Date of Expiry of cover / when cover expired Retroactive date b) For the type of cover now being proposed, has any insurer ever:

7 Page 7 of 8 i) Declined proposal or renewal? ii) Required an increased premium or imposed special terms? iii) Cancelled the insurance? If to any of the above, please provide details 8. REQUIRED COVER 1. Please state the amount of indemnity required by ticking appropriate box (to be same as PIMA section 1) R1,000,000 R2,500,000 R5,000,000 R10,000,000 R20,000, Please state the deductible (excess) requested / preferred R10,000 R20,000 R30,000 (Refer to PIMA application form excess per section 1 PIMA to apply) J ADDITION INFORMATION Please add any additional information the proposer wishes to bring to the underwriter s attention (e.g. new systems being planned, checks and balances, transparency iro information such and financials etc.)

8 Page 8 of 8 DECLARATION We declare that the statements and particulars in this Proposal form are true to the best of our knowledge and belief and that we have not misstated, suppressed or omitted any material facts. We agree that this proposal from together with any other information supplied by us shall form the basis of any contract of insurance effected thereon and shall be incorporated therein. We undertake to inform the insurers of any material alteration of these facts whether occurring before or after completion of the contact of insurance. Signing this proposal form does not bind the proposer to complete this insurance. We acknowledge that if this proposal is accepted, the contract will be subject to the terms and conditions as set out in this policy wording as issued or otherwise specifically varied in writing by Camargue Underwriting Managers (Licensed Financial Services Provider, License Number 6344). Signed at.. Dated this..day of 20.. Signed by: PARTNER / DIRECTOR / MEMBER / MANAGER (proposal form should be completed by the proposer) Application forms can also be faxed or ed to Addsure s head office. Fax number info@addsure.co.za Further information can be found on NB: SHOULD BE READ TOGETHER WITH SECTION 1 - PIMA ADDSURE PO BOX 963 MILNERTON 7435 The PIMA (Professional Indemnity for Managing Agents) product has been specifically designed for managing agents servicing community schemes in South Africa. Addsure (specialist sectional title insurance advisors) and Camargue (Specialised Liability Management) are leading financial services providers in their respective disciplines. ADDSURE : Addsure is an authorised financial services provider FSB licence no 15269