Schedule "A"
CODE OF PRACTICE FOR MEMBER LEVY PAY MENT in terms of Clause 3.8 SERVICE IMPROVEMENT FUND of the CONSTITUTION

CODE OF PRACTICE A

1. This agreement is between members individually and between the members and the association.

2.1 'Invoiced Output' means output invoiced in respect of air conditioning, refrigeration
contract work and service work carried out within South Africa, excluding work carried out in foreign countries.

2.2 The invoiced output shall include a members portion of a joint venture where this is part of a project.

2.3 Each member shall pay to the association the service improvement fund levy based on its total annual invoiced output at a rate and minimum levy payment as decided by the National Executive Committee from time to time. The levy is to include the head office and all South African based branches of the member.

2.4 Members levy payments based on turnover shall be strictly confidential to the Executive Director, and to the auditors of the association.

2.5 A letter signed by the President and Executive Director and addressed to all members, shall, in terms of clause 17.3 of the constitution, confirm that an amendment to the levy rate, minimum levy payment and the applicable date has been adopted by the National Executive Committee. This notice shall be conclusive and binding on the association and all members.

2.6 Each member is to record its method of levy payment with the SARACCA office, i.e.,

2.6.1 Monthly payment based on actual monthly turnover subject to an annual adjustment based on an auditors' certificate at financial year end, OR

2.6.2 In special cases where the accounting for a members air conditioning, ventilation, and refrigeration contracting, is incorporated into an overall accounting system which involves other forms of contracting, a statement by the Managing Director, supported by a certificate signed by the auditor stating the calculated air conditioning, ventilation and refrigeration turnover, will be accepted.

2.6.3 Members are to advise the SARACCA office of their financial year-end date for administration purposes.

2.7 Each member shall, within THIRTY (30) days of the last day of each month, post, facsimile or E-mail to the office on the form prescribed, particulars of the members total invoiced output for the previous period together with a provisional payment cheque or proof of electronic transfer.

2.8 Each member shall, within SIX (6) months of the close of its financial year, submit to the SARACCA office a certificate from its auditors showing its total invoiced output:

2.8.1 for the financial year; or

2.8.2 from the commencement of that financial year, until the date on which the member ceased to be liable for the levy hereunder;

2.8.3 a member shall pay the association any difference between the amount calculated from the audit certificate and the total amount provisionally paid through the year. Similarly, the association shall refund the member any excess paid in the provisional payments through the year above the amount due under the auditors' report.

2.8.4 the SARACCA office shall verify the calculation of levy payments, invoiced output given on monthly and audit returns.

2.9 The income received, by the association in terms of this agreement shall be invested by the National Executive Committee in such a manner it deems appropriate. Investments together with any interest accrued, shall be applied to administer the association and to promote the air conditioning, ventilation and refrigeration industry in such a manner as the National Executive Committee shall decide.

2.10 Should a member cease to be a member of SARACCA or should its membership be terminated for any reason whatsoever, such member shall nevertheless remain bound by this agreement up to the date upon which such registration or suspension takes effect.

3. This agreement may be amended, revised or cancelled by the following procedure prescribed for amendments in the Constitution.

3.1 In the event or any doubt or dispute regarding the interpretation or application of this agreement, a member should immediately communicate with the Executive Director who shall, convene a meeting of the Finance Committee to rule on the interpretation of this agreement.

3.2 The administration of this agreement shall be vested in the National Executive Committee whose decision on the application or interpretation of this agreement shall be final and binding on all parties. The National Executive Committee may delegate its functions to:

3.2.1 the Finance Committee and / or the Executive Director

3.3 All expenses incurred by the association in the administration of this agreement shall be paid for from the levy income collected in terms of clause 2.9 above.

4. The service improvement fund shall be subject to the restrictions contained in clause 24 of the Constitution and, on winding-up, the provisions of clause 29 of the Constitution shall apply.

5. The National Executive Committee shall be entitled in the name of the association to take such action, as it may deem necessary for the purposes of ensuring compliance with this agreement.

6. The levy payment shall not include the value added tax portion of any contract work. Retention monies are subject to the levy calculation. The levy payment is, subject to value added tax.

7. A cumulative penalty will apply NINETY (90) days from the due date for payment of levies to the association, and becomes due and payable by the defaulting member.