Keeping Australian Farmers Farming. Replacing business & production costs when disaster strikes

Transcription

1 Keeping Australian Farmers Farming Replacing business & production costs when disaster strikes

2 Thank you for your interest in the updated 2014 Latevo program. Like you, we are all acutely aware that managing and preparing for risk in dryland farming is becoming significantly more difficult for growers, with many facing tremendous economic hardship, particularly after successive seasons of natural disaster. In response to these current issues we have developed a viable new solution to relieve this financial burden for growers. Latevo is launching an affordable customised policy that is viable without government subsidy. Our crop income based insurance program works by replacing business and production costs when disaster strikes and helps to reduces a farmer s risk profile so that additional working capital can be accessed when a grower needs it the most. Working in conjunction with each farmer s nominated advisers and accountants, Latevo uses a 5-year history of revenue and expenses to accurately calculate the amount of costs that Latevo insurance can replace - generally the full cost of production, including chemical, fertiliser, interest and overheads. Latevo offices are now open in Western Australia and NSW, ensuring our capacity to deliver much needed support to farming families across Australia. With a background of over 45 years in the agricultural industry I m delighted to be leading this innovative new company. We can now offer grain growers real security to protect and maximise their income to change their future. We are passionate about giving growers more confidence, while encouraging young people to remain on family farms so that together we can revitalize our farming communities. I look forward to discussing our program in more detail with you. Yours sincerely, Deane Allen, Latevo International National Manager Latevo International Section 1: Introduction 1

3 The objective of any business is to generate a profit. Dryland farming in Australia presents some very unique business challenges. Regardless of management strategies the environment regularly does not allow farmers to even recover their costs. The cash flow impacts of crop failure is catastrophic to farming enterprises and rural communities. The only solution to this is to use a financial tool such as Crop Income Protection Insurance to avoid wildly fluctuating farm revenues. Not only does this support the farmer when it is most needed but also those who rely on farmers for their livelihood. Crop Income Protection Insurance is a must for Australian farmers because it both protects them from financial losses and gives financiers confidence to once again lend to farmers with less risk and therefore lower margins to enable access to desperately needed working capital. JOHN THOMPSON DIRECTOR RSM BIRD CAMERON 2 Section 1: Introduction Latevo International

4 Keeping Australian Famers Farming. Thank you for your expression of interest in Latevo International and our new Crop Income Protection Insurance. The idea of an insurance product to protect grain growers in Australia has been on the agenda for decades. The main issue has been that without government support, none of the concepts developed were commercially viable. This project has been four years in the making and has had no government support to date. However, following significant negotiations with global insurers and many of Australia s leading banks, we have widespread support for our innovative approach - insuring farmers in a way that offers more affordable premiums and ongoing cash flow protection. A tried and true model Developed by Australian farmers and underwritten by Allianz, this crop revenue-based insurance product includes a customised program that actually supports improved farm management and profitability. The predecessor to this model has been functioning in Canada for three years. All previous models based on a Yield x District Averages calculation have failed. The Latevo International model is Revenue (Yield x Price) x Individual Assessment. This model is not only commercial feasible, it has the backing of Allianz for years to come. Let s get started The first step in this process is to work in partnership with us to undertake a Production Audit analysing the past five years of financial data for your farm. It is important to understand that ideally, every farmer involved in this model joins with a similar risk profile. Our goal is to make the model fair and equitable, to avoid certain geographic regions drawing more heavily on the program than others. To achieve success, the Latevo team needs to fully understand the background of each grower before offering an invitation to join the program. We are well aware of the challenge involved in looking back five years into your records. However, without this analysis, it is not possible to underwrite each farmer s individual risk. Latevo International will be there to support you through the process. Simply by taking this first step, you are well on the way to securing a better future in farming. Customised to your location and situation Our Crop Income Protection Insurance offers each grower the ability to choose bands of revenue they would like to insure. This approach is what makes the whole concept fairer and more equitable. Higher rainfall farmers have the option of tailoring the model specifically to their farm. Every farmer has the comfort of knowing that they are not subsidising any other farmer; instead they are truly protecting their own land. How this can work for you Through Crop Income Protection Insurance, Latevo International can now help you manage your entire financial portfolio. It is widely known that cropping has the highest financial rewards - but also comes with the highest risk. This Insurance gives you the ability to insure your cropping enterprise and effectively put a stop loss in place. Too often a bad year of farming leads to the need to draw down revenue from other places, such as shares, real estate, livestock enterprise or farm borrowings. Under this new model, your cropping enterprise will pay for its own risk profile. Even if the worst-case scenario is that Australian farmers start each year in exactly the same financial position as the year before, Crop Income Protection Insurance will surely lead to a better night s sleep. We look forward to helping secure the future of your family and farm. Latevo International Section 1: Introduction 3

5 Why is a Production Audit so important? Most farmers spend their entire lives working IN the business, attempting to produce the highest yield in any given season. Finding the time to work ON the business is a major challenge as is having accurate data to make meaningful business decisions. Latevo International s Production Audit will accurately analyse both your revenue and expenses over the past five years into the correct production year. Reviewing data in detail may uncover hidden facts about your financial position, including any threats or opportunities. Business decisions made on strong factual evidence have a much greater chance of becoming a reality. The Production Audit process offers enormous benefits for your business. A more strategic approach to business planning, such as: Acknowledging that downside fear limits upside potential Helping to provide children with a sustained future in farming Understanding that by reducing risk, you can better plan for your family s future. Profit creation exploration, that will identify: True enterprise profitability Profit creation over the past five production years How to repeat good performances, through knowledge of previous per hectare profit margins. Through a focus on revenue creation, we will discover: True understanding of your historic revenue creation Where revenue creation drives upside profitability The direction of your future farm budgeting, through knowledge of per hectare revenue per year. Understand the real facts behind your business, such as: Actual business costs What your annualised financials really mean The true downside in your business. 4 Section 1: Introduction Latevo International

6 The Production Audit process. A Production Audit has three components: 1. Five Year Financial Analysis 2. Current Year Production Plan 3. Current Year Grain Marketing Plan Five year Financials Production Plan Grain Marketing Plan The Financial Analysis provides an historic view of your business, while the Production Plan and Grain Marketing Plan give us a glimpse into the future. By submitting these plans prior to binding the policy, Latevo is able to gain enough knowledge to be comfortable with your management plans for the coming season. Components of Production Audit It is absolutely essential that we fully understand not only your most recent history, but how you plan to manage your farm into the future. By insuring your crop income, we are insuring each grower s ability to grow and sell their crop. Latevo Crop income Protection Insurance Policy 1. Financial Analysis The conversion of last five June 30 Tax Returns to Production Year 2. Production Plan a. Rotation History b. Cropping Plan c. Fertilizer and Herbicide Strategy 3. Grain Marketing Plan a. Forward Marketing Plan b. Price targets and time by percentage sold Latevo will act as an independent third party, checking your plans to make sure they do not involve obvious profit limiting or high risk practices. These could include: Sowing canola on canola Forward selling an unrealistic amount of expected production. This insurance product and program has been developed by farmers, for farmers. We need to avoid acceptance of farming practices that we would not be happy taking on ourselves, to reduce risks for all. Our aim is to see farmers undertaking district best practice. Latevo International Section 1: Introduction 5

7 September 16, 2013 Chief Executive Officer Latevo International Shop 8, 6/16 Sanders Street, Griffith NSW 2680 Regional & Agribusiness WA Level 7, 109 St Georges Tce Perth WA 6000 Tel: Fax: Dear Sir, I would like to thank you for the time you have spent by your company with me over the past few months to explain and demonstrate your strong commitment to provide farming businesses an Income Protection Insurance product to market. From a banker s perspective, this type of risk mitigation tool has been a long time lacking, with its absence distorting the natural growth and innovation of the WA Grains industry. The introduction of this style of product will enable the following; Continuity of capital within the industry (Financed or Investor). Provide financial certainty to invest in longer term farm innovation. Access to longer term finance on more favorable terms as cash flow risks are addressed. Assist in reducing the barriers to entry for younger farmers to enter the market. Provide the capacity for strong existing business s to grow and expand land holdings with certainty. Assist in delivering financial stability to agricultural communities who service the industry (local retail and the like). Westpac is a strong supporter of business innovation that assists in delivering a more long term financially sustainable agricultural industry, and we commend your company for the leadership it is showing within the industry and we look forward to you assisting in providing more certainty to our clients. 6 Section 1: Introduction Latevo International

8 November 7, 2013 Chief Executive Officer Latevo International Shop 8, 6/16 Sanders Street Griffith NSW 2680 Dear Andrew, For well over a decade, WAFarmers has been lobbying for the introduction of a Multi-Peril Crop Insurance into the Western Australian market. We are delighted that Latevo International has introduced such a product. We have encouraged our members to consider Multi-Peril Crop Insurance in their business planning and to make their own enquiries on the suitability of the Latevo product. We are strong advocates for a Multi-Peril Crop Insurance product, which we believe offers security to growers. Many of our members have challenging financial circumstances which can limit access to additional capital, however, we are confident that this product will alleviate some of these challenges. We are proud to welcome you as a diamond sponsor and look forward to a mutually beneficial relationship long into the future. Yours faithfully, Dale Park President The Western Australian Farmers Federation Inc. Latevo International Section 1: Introduction 7

9 Crop Income Protection Insurance The flexible and selective crop income banding system within our Crop Income Protection Insurance means it is suitable for growers in all regional areas of Australia. Most importantly, your cover can be customised, making the Latevo s Flexible and Selective Band Insurance product competitively priced for all. How it works Once your Production Audit is complete, Latevo International will analyse the financial data to calculate your maximum level of insurable revenue. There are eight bands of coverage and your premium will be offered in individual, $100/ ha bands. Once you have assessed your needs, you can choose to purchase only the necessary band coverage and drop off other bands to make sure your premiums are more affordable. The customised band system makes insurance affordable for all and means that the program is fair and equitable. Revenue protection available in $100/ha bands $800 $700 $600 $500 $400 $300 $200 $100 $0 Band 1 Band 2 Band 3 Band 4 Band 5 Band 6 Band 7 Band 8 Once you have reviewed your pricing letter, the next step is to make an Application for Insurance, which Band levels Farmers select or drop bands as required includes a comprehensive process of field mapping and reviewing your marketing and agronomic plans. 8 Section 1: Introduction Latevo International

10 Example of how Crop Income Protection Works Without Crop Income Protection Insurance The aim in any business is to make a profit, but to do so the first thing you must do is cover costs. If you do not cover cost you must then draw on external funds to meeting the shortfall and then find extra funds to run the business moving forward. $1,400,000 $1,200,000 Good Year Bad Year The concept of Crop Income Protection is simple in that your aim is to provide $1,000,000 your business with a safety net such that in a worst case scenario you break even. $800,000 Attached is a simple example of how it works. If it costs 1 million dollars to cover your cropping business enterprise, then you would aim to purchase approximately 1 million dollars of crop income $600,000 $400,000 protection to replace costs in a disastrous season. $200,000 For example in the advent of a bad year, when you have experienced drought and your income drops to $400,000, your claim would be to the value $0 Crop Income Expenses Crop Income Expenses of $600,000. There are many advantages of having such a significant payout in years where income is low. $1,400,000 With Crop Income Protection Insurance Good Year Bad Year Some of these benefits are listed below: No need to borrow additional money from the bank to fund next years crop Never breach your bank covernance Be able to hold grain and wait for a higher price No financial stress Take advantage of land purchase opportunities Know that you will not go broke in the next drought $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Latevo policy payout Expenses Grain Revenue $0 Crop Income Expenses Crop Income Expenses Latevo premium Latevo International Section 1: Introduction 9

11 1. Farming in a low rainfall zone Latevo Band levels Low Rainfall farmer $100/ha bands $500 $400 $300 $200 $100 $0 Band 1 Band 2 Band 3 Band 1 Latevo Band levels Band 2 Band 3 This low rainfall farmer with 2000 hectares is eligible for maximum insurance protection of $250 per hectare, as calculated by the Production Audit. $250 /ha x 2000 hectares = $500,000 minimum crop income protection. Premium choices by Crop income Band $200 - $250/ha = Band 3 $200 - $220 = Band 3 Purchased $100 - $199/ha = Band 2 Offered Purchased $0 - $100/ha = Band 1 Offered Purchased Purchased Band options To reduce the premium cost, the farmer decides to drop part of Band 3 by $30/ha as calculations show that $220,000 is the cost of production for the farm. The farmer chooses to purchase a customised version of Band 3, along with Bands 2 and 1, i.e. $0/ha - $220/ha or $0 to $440,000 of crop income. Claim Event: The Insurance Policy is triggered by a lack of rain in September, with high temperatures reducing yield. (Refer to Policy wording for Exclusions) Scenario 1 If the low rainfall farmer makes only $200,000 income then a claim of $240,000 will be paid. Scenario 2 The farmer has a good season and makes $800,000. No claim is made. 10 Section 1: Introduction Latevo International

12 2. Farming in a medium rainfall zone Latevo Band levels Medium Rainfall farmer $500 $400 $300 $200 $100 $0 Band 1 Band 2 Band 3 Band 4 Band 2 Latevo Band levels Band 3 Band 4 This medium rainfall farmer with 2000 hectares is eligible for maximum insurance protection of $350 per hectare, as calculated by their Production Audit. $350 /ha x 2000 hectares = $700,000 minimum crop income protection. Premium choices by Crop income Band $300 - $350/ha = Band 4 Offered Purchased $200 - $299/ha = Band 3 Offered Purchased $100 - $199/ha = Band 2 Offered Purchased $0 - $100/ha = Band 1 Offered Not purchased Purchased Band options To reduce the premium cost, the farmer decides to drop Band 1 as the chances of not making $100/ha or $200,000 is very low. The farmer chooses to purchase Bands 2, 3 and 4, i.e. $100/ha - $350/ha or $200,000 to $700,000 of crop income. Claim Event: The Insurance Policy is triggered by a late, severe frost event. (Refer to Policy wording for Exclusions) Scenario 1 If the medium rainfall farmer makes only $500,000 income then a claim of $200,000 will be paid. Scenario 2 In the case the farmer only makes $100,000, the farm business will wear the first $100,000 to $200,000 and then will be paid a $500,000 claim to take it up to the $700,000 level of minimum crop income on which the premium was paid. Scenario 3 The farmer has a good season and makes $1,000,000. The farm is $300,000 above the minimum crop income of $700,000. No claim is made. Latevo International Section 1: Introduction 11

13 3. Farming in a high rainfall zone Latevo Band levels High Rainfall farmer $100/ha bands $600 $500 $400 $300 $200 $100 $0 Band 6 Band 5 Band 5 Band 4 Band 4 Band 3 Band 3 Band 2 Band 1 Latevo Band levels This high rainfall farmer with 2000 hectares is eligible for maximum insurance protection of $550 per hectare, as calculated by the Production Audit. $550 /ha x 2000 hectares = $1,100,000 minimum crop income protection. Premium choices by Crop income Band $500 - $550/ha = Band 6 Offered Not purchased $400 - $499/ha = Band 5 Offered Purchased $300 - $399/ha = Band 4 Offered Purchased $200 - $299/ha = Band 3 Offered Purchased $100 - $199/ha = Band 2 Offered Not purchased $0 - $100/ha = Band 1 Offered Not purchased Purchased Band options To reduce the premium cost, the farmer decides to drop Bands 1, 2 and 6 as the chances of not making $200/ha or $400,000 is very low and there is no need to insure above the cost of production of $500/ha. The farmer chooses to purchase Bands 3, 4 and 5, i.e. $200/ha - $500/ha or $400,000 to $1,000,000 of crop income. Claim Event The Insurance Policy is triggered by a late, severe frost event. (Refer to Policy wording for Exclusions) Scenario 1 If the high rainfall farmer makes only $600,000 income then a claim of $400,000 will be paid. Scenario 2 In the case the farmer only makes $200,000, the farm business will wear the first $200,000 to $400,000 and then be paid a $600,000 claim to take it up to the $1,000,000 minimum crop income on which the premium was paid. Scenario 3 The farmer has a good season and makes $1,500,000. No claim is made. 12 Section 1: Introduction Latevo International

14 Dear Mr and Mrs Example, Crop Income Protection Insurance: Estimated pricing letter example We are very appreciative of your involvement in the 2014 limited release program for Crop Income Protection Insurance to Australia. It gives me pleasure to provide you with the estimated pricing for the 2014 season. Max Insured Net Crop Revenue Per Hectare $ Name Insured Net Price per hundred Crop Revenue of insured value Band price Per Hectare Per Hectare Per Hectare Band $6.56 $6.56/Ha Band $7.61 $7.61/Ha Band $8.66 $8.66/Ha Band $11.03 $1.10/Ha Total Cost $23.93/Ha Total Hectares 5,924 Policy Value Estimate of the whole farm policy if full coverage is taken $141, GST $ 14, Stamp Duty $ 14, Total payable $170, Coverage options You have the option to purchase the full coverage limit, or part-there-of starting from the bottom up. You qualify to drop Band 1 because you are above the $300/ha minimum qualifying coverage for this option. To do this you must purchase a minimum $200/ha of total coverage. Estimate Only Please note this is not an offer of insurance. The above pricing is an estimate only based on the previous information provided to us about your farm. A formal quotation will be provided once a fully completed application for insurance is submitted to and accepted by us, including mapping of fields and processes for reviewing your marketing and agronomic plans. The estimated prices shown above are subject to change based upon the information reported in the application for insurance. If you have any queries please feel free to contact us or your Broker to discuss, otherwise once you have reviewed the pricing, please complete and submit your application for to us so we can assess it and provide you with our formal quotation terms accordingly. Yours sincerely, Andrew Trotter Chief Executive Latevo International Section 1: Introduction 13

15 Cropping Income and Expenses per Hectare without Policy (Example Farm) $ $600 $500 $/ha $400 $300 $200 Grain Revenue Finance and Labour Costs Overhead Costs Machine Costs (including depreciation) Input Costs $100 $0 Income Expenses Income Expenses Income Expenses Income Expenses Income Expenses 14 Section 1: Introduction Latevo International

16 Cropping Income and Expenses per Hectare with Policy (Example Farm) $ $600 $/ha $500 $400 $300 $200 Latevo policy payout Cost of Latevo policy Grain Revenue Finance and Labour Costs Overhead Costs Machine Costs (including depreciation) Input Costs $100 $0 Income Expenses Income Expenses Income Expenses Income Expenses Income Expenses Latevo International Section 1: Introduction 15

17 Total Cropping Income and Expenses without Policy (Example Farm) $1,600, $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 Grain Revenue Finance and Labour Costs Overhead Costs Machine Costs (including depreciation) Input Costs $200,000 $0 Income Expenses Income Expenses Income Expenses Income Expenses Income Expenses 16 Section 1: Introduction Latevo International

18 Total Cropping Income and Expenses with Policy (Example Farm) $1,600, $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 Latevo policy payout Cost of Latevo policy Grain Revenue Finance and Labour Costs Overhead Costs Machine Costs (including depreciation) Input Costs $200,000 $0 Income Expenses Income Expenses Income Expenses Income Expenses Income Expenses Latevo International Section 1: Introduction 17

19 Total Hectares Seeded Hectares - Cropping Too Wet Hectares - Cropping Seeded Hectares - Grazing Fallow Hectares Seeded Irrigated Hectares Average Grain Revenue/ha 4,142 4,142 4,142 4,142 4,142 2,070 2,140 2,389 2,307 2, Section 1: Introduction Latevo International

20 Certainty Insurance Policy wording

21 Contents Introduction About Allianz About Latevo About this Insurance Understanding this insurance and its important terms and conditions Applying for cover Our contract with You Premium General Definitions applicable to the Policy Certainty Insurance What We cover Basis of Settlement When We may reduce or deny a claim General Exclusions applicable to the Policy War Nuclear General Conditions applicable to all Sections of the Policy Misstatement of Inventory or production Cross Liability Examination Governing law and jurisdiction Interests of other parties GST Notice Other Insurance Your obligation to comply with the Policy terms and conditions How to make a claim Cancellation rights under the Policy How You may cancel the Policy Your Duty of Disclosure Privacy Act 1988 Information General Insurance Code of Practice Dispute resolution process helping You solve any problems Contact for assistance or confirmation of cover If this insurance has been issued through an insurance intermediary Lawful seizure Wilful acts Territorial limits Terrorism Pollution Other Excluded Losses Claims Procedure Claims procedures Transfer & Assignment Salvage Waiver of subrogation rights

22 Introduction Welcome and thank You for choosing the Allianz, Certainty Insurance distributed by Latevo. About Allianz The insurer of this insurance is Allianz Australia Insurance Limited ABN (Allianz) AFS Licence No Allianz is one of Australia s largest general insurers. We utilise years of local expertise, combined with global experience to offer a wide range of products and services to Our customers. As a member of the worldwide Allianz Group, We are committed to continuous improvement of Our products and services and strive to achieve this through knowledge transfer within the Group, dedicated technical research units, sharing globally new product developments and a wide range of risk management services. About Latevo This insurance is arranged by Latevo International (Aus) Pty Ltd ABN (Latevo) AR No In arranging this insurance Latevo has been appointed as an authorised representative of Allianz and acts under binding authority on behalf of Allianz, and not on your behalf. Latevo is part of the Latevo International group which supports farmers worldwide in obtaining affordable crop insurance that helps them manage the risk of weatherrelated crop disasters. For any enquiries about this insurance please contact Latevo on: Latevo International, Shop 8, 6/16 Sanders Street Griffith, NSW Australia LATEVO ( ) About this Insurance This is an important document. You should read it carefully before making a decision to purchase this insurance. It will help You to: decide whether this insurance will meet Your needs; and compare it with other products You may be considering. Please note that any recommendation or opinion in this document is of a general nature only and does not take into account Your objectives, financial situation or needs. You need to decide if this insurance is right for You and You should read all of the documents that make up the Policy to ensure You have the cover You need. Preparation date: 27/01/2014 Summary of the cover The Policy insures you against loss directly resulting from reduction of Net Crop Revenue Per Hectare caused by destruction of or damage to the Insured Crop Area as a direct result of the covered Insured Perils occurring during the Indemnity Period. The covered Insured Perils are: Water Stress, flood, hail, wind, frost, lightning, excessive rain, temperature stress, snow, hurricane, cyclone, tornado, wildlife, accidental fire, bushfire, insect or pest manifestation or plant disease. All other perils causing physical loss of or damage to crops are not insured. Understanding this insurance and its important terms and conditions To properly understand the significant features, benefits and risks of this insurance You need to carefully read: about the available types of cover and benefits (the standard cover provided can be affected by the following); the rest of this Introduction section this sets out how You apply for cover, the basis on which We insure You, the duty of disclosure You need to meet before We insure You, Our privacy information, Our dispute resolution procedures and other important information; Latevo International Section 2: Latevo Certainty Insurance Policy Wording 1

23 the General Definitions applicable to all Sections of the Policy section this sets out what We mean by certain words used in the Policy. These words begin with a capital letter throughout this document. The cover section(s) may also contain definitions relevant to the section; the General Exclusions applicable to all Sections of the Policy section this sets out the general exclusions and limits that apply to all covers and benefits; the General Conditions applicable to all Sections of the Policy and Claims sections these set out certain general rights and obligations that You and We have; all of the documents that make up the Policy, including the Schedule and any endorsements or other written changes to the cover We issue You with these contain specific details relevant to You and can affect the cover. Headings are provided for reference only and do not form part of the Policy for interpretation purposes. Applying for cover When You apply for this insurance you need to complete Our application process summarised below. You need to provide the information We require to determine whether to issue a policy and if so, on what terms. By way of summary, under the application process: 2 Section 2: Latevo Certainty Insurance Policy Wording Latevo International 1. You must submit a minimum of five years Accrual Financial Statements for all persons or entities seeking cover under the policy. All related entities and operations must also be separated using Enterprise Accounting. 2. This application will declare: a) Names, addresses and contact information for main contact person and any power of attorney appointed; b) Land location of the applicant with all contact information; c) The total hectares which are planned to be seeded to each Insured Crop along with land descriptions, in which You have an interest at the time of seeding; d) Total hectares of summerfallow, sloughs or idle land; e) Total hectares seeded to crops that are not Insured Crops; f) Listing of any other insurance coverage on the Insured Crop Area; g) Declaration that there has been no damage to the crops prior to this application for insurance coverage; h) Any other relevant information We may require respecting the matters mentioned in clauses (a) to (g) 3. The application submitted to Us is binding on You and is not subject to change by You without Our written consent. 4. This application pursuant to this section of the Policy forms the basis on which any crop is insured and the basis on which any loss will be paid. We will tell you anything else we require at the time of application. By entering into the Policy, You agree that the person representing You when completing the proposal is authorised to give and receive information on Your behalf in relation to all matters arising under the Policy and in accordance with the Insurance Contracts Act Where We agree to issue a policy, cover is provided on the basis: that You have paid or agreed to pay Us the premium for the cover provided; of the verbal and/or written information provided by You which must be given in accordance with Your Duty of Disclosure either verbally or in writing. If You fail to comply with Your Duty of Disclosure or have made a misrepresentation to Us, We may be entitled to reduce Our liability under the Policy in respect of a claim and/or We may cancel the Policy. If You have told Us something which is fraudulent, We also have the option of avoiding the Policy (i.e. treating it as if it never existed). Your Duty of Disclosure and the consequences of nondisclosure, are provided under the heading Your Duty of Disclosure.

24 Our contract with You Where We agree to enter into a policy with You it is a contract of insurance between Us and You (see the definition of You for details of who is covered by this term). The Policy consists of: this document which sets out the standard terms of Your cover and its limitations; the Insured Crop Application You provide Us; Your Schedule issued by Us. The Schedule is a separate document, which shows the insurance details relevant to You. It may include additional terms, conditions and exclusions relevant to You that amend the standard terms of this document. Only those sections shown as covered in the Schedule are insured; and any other change to the terms of the Policy otherwise advised by Us in writing (such as an endorsement). These written changes may vary or modify the above documents. These are all important documents and should be carefully read together and kept in a safe place for future reference. We provide the cover specified in the Policy subject to its terms, conditions, exclusions and limitations. We reserve the right to change the terms of this insurance where permitted to do so by law. Any new or replacement schedule We may send You, detailing changes to Your insurance or the Period of Insurance, will apply from the date of its issue, unless We state otherwise. You should carefully read and retain it. Premium Your premium the base premium We charge is calculated based on a number of factors such as: Your risk profile and the ratings We apply to Your profile (e.g. your financial history, where the property is situated, the type of crops being insured, the cover and limits required, other persons being insured and Your insurance history etc.) certain costs incurred by Us in relation to the Terrorism Insurance Act (where applicable); and Our obligation to pay relevant government taxes and charges. For example, We include an amount that covers stamp duty and GST payable in relation to the Policy. In cases where We are required to pay an estimated amount (e.g. for Fire Services Levies) connected with this insurance based on criteria set by the Government, We allocate an amount We believe will take into account Our obligations to the Government. We may over or under recover in any particular year but We will not adjust Your premium because of this. You can ask Us for more details if You wish. Minimum premiums may apply. In some cases, discounts may apply if You meet certain criteria We set. When You apply for this insurance, You will be advised of the total premium amount payable, when it needs to be paid and how it can be paid. This amount will be set out in the Schedule, which will be sent to You after the entry into the Policy. If You fail to pay We may reduce any claim payment by the amount of premium owing and/ or cancel the Policy. Your obligation to comply with the Policy terms and conditions You are required to comply with the terms and conditions of the Policy. Please remember that if You do not comply with any term or condition, We may (to the extent permitted by law) decline or reduce any claim payment and/or cancel the Policy. If more than one person is insured under the Policy, a failure or wrongful action by one of those persons may adversely affect the rights of any other person insured under the Policy. How to make a claim Details about how We settle claims are provided in this document under the Basis of Settlement section. Latevo International Section 2: Latevo Certainty Insurance Policy Wording 3

25 Cancellation rights under the Policy How You may cancel the Policy You may cancel the Policy at any time by telling Us in writing that You want to cancel it. You can do this by giving the notice to Your broker, Our agent or Us. Where there is more than one contracting insured We will only cancel the Policy when a written agreement to cancel the Policy is received from all contracting insureds named as the insured or from a person authorised to act as agent of all such persons. How We may cancel the Policy We may cancel the Policy in any of the circumstances permitted by law by informing You in writing. We will give You this notice in person or send it to Your address last known to Us. Return of premium 1. Where this Policy is terminated by the Insurer (a) the Insurer shall refund the excess of premium actually paid by the Insured over the pro rata premium for the expired time, but, in no event, shall the pro rata premium for the expired time be deemed to be less than any minimum retained premium specified in the Short Rate Table below; and (b) the refund shall accompany the notice unless the premium is subject to adjustment or determination as to amount, in which case the refund shall be made as soon as practicable. 2. Where this Policy is terminated by the Insured, the Insurer shall refund as soon as practicable the excess of premium actually paid by the Insured over the short rate premium as provided in the Short Rate table below for the expired time, but in no event, shall the short rate premium for the expired time be deemed to be less than any minimum retained premium specified. Short Rate Table (1) The minimum retained premium for all policies will be 35% of the premium from May 1; (2) After May 1 the minimum premium will be 40% of the premium until June 1; and (3) From June 1, the following table applies: 1. June 1-7: 50 % 2. June 8-15: 60 % 3. June 15-22: 70 % 4. June 22-30: 80% 5. July 1: Fully Earned (100% retention) Premium funders note If the premium has been funded by a premium funding company which holds a legal right over the Policy by virtue of a notice of assignment and/or irrevocable power of attorney, a refund will be made to the premium funding company of the part of the premium applicable to the unexpired Period of Insurance. Your Duty of Disclosure Before You enter into the Policy with Us, the Insurance Contracts Act 1984 requires You to disclose to Us every matter that you know or could reasonably be expected to know is relevant to Our decision whether and on what terms Your application for insurance is acceptable and to calculate how much premium is required for Your insurance. You have the same duty to disclose those matters to Us before You renew, extend, vary or reinstate the Policy. The duty applies until the Policy is entered into, or where relevant, renewed, extended, varied or reinstated (Relevant Time). If anything changes between the time You provide answers or make disclosure and the Relevant Time, You need to tell Us. 4 Section 2: Latevo Certainty Insurance Policy Wording Latevo International

26 What You do not need to tell Us You do not need to tell Us about any matter that: diminishes Our risk; is of common knowledge; We know or should know as an insurer; or We tell You We do not need to know. Who does the duty apply to? The duty of disclosure applies to You and everyone that is an insured under the Policy. If You provide information for another insured, it is as if they provided it to Us. What happens if the duty of disclosure is not complied with? If the duty of disclosure is not complied with We may cancel the Policy and/or reduce the amount We pay if You make a claim. If fraud is involved, We may treat the Policy as if it never existed, and pay nothing. Privacy Act 1988 Information We collect Your personal information directly from You where reasonably practicable or if not, from other sources. We collect it to provide Our various services and products (e.g. to market, arrange and administer insurance and to handle and settle claims) and to conduct market or customer research. We also use it to develop and identify services of Our related companies and alliance partners that may interest You (but You can opt out of this by calling the Allianz Direct Marketing Privacy Service Line on EST 8am-6pm, Monday to Friday or indicate Your decision in the appropriate area of the Privacy section of Our website at au). If You do not provide the information We require We may not be able to provide You with this service. We disclose information to third parties who assist Us in the above (e.g. insurers, insurance intermediaries, insurance reference bureaus, related companies, Our advisers, persons involved in claims, external claims data collectors and verifiers, Your agents and other persons where required by law). We also provide this information to financiers if We have a relationship or insurance scheme in place with them under which You purchased the Policy. We prohibit them from using it for purposes other than those We supplied it for. Where You provide Us with information about another person for the above purposes, You must tell Us if You haven t got their consent to this. If You wish to gain access to Your personal information (including to correct or update it), have a complaint about a breach of Your privacy or You have any query on how Your personal information is collected or used, or any other query relating to Privacy, contact Us on EST 8am-6pm, Monday to Friday.General Insurance Code of Practice The General Insurance Code of Practice was developed by the Insurance Council of Australia to further raise standards of practice and service across the insurance industry. We keenly support the standards set out in the Code. You can obtain more information on the Code of Practice and how it assists You by contacting Us. Contact details are provided on the back cover of this document. Dispute resolution process helping You solve any problems At Latevo and Allianz we strive to do things the right way and keep our customers happy. Sometimes, complaints or disputes do occur and when this happens, our objective is to resolve any disagreement as amicably and as quickly as possible. We believe the best way to achieve this is to provide You with an opportunity for a review of the issue. Here is what to do if a complaint or dispute arises Regardless of whether the complaint or dispute involves our staff, an agent, loss adjuster, assessor, investigator or the service We provide, simply contact Latevo on EST 8am-6pm, Monday-Friday, to speak to one of our call centre operators and provide them with the details of the issue concerning You. They will attempt to resolve the complaint or dispute; if they are unable to do so they will log it and refer it to the appropriate business unit or Allianz for resolution. Within our organisations we have established a complaints and disputes resolution process. This is a free service. It is a system designed to log, track, Latevo International Section 2: Latevo Certainty Insurance Policy Wording 5

27 escalate and monitor complaints received from clients and customers about our services and products. A staff member involved in the complaints and disputes resolution process will write to You within 15 working days advising the outcome of the review and reasons for their decision. We do not consider a complaint or dispute to be resolved until a proposed resolution or solution has been communicated to You and You have accepted the resolution or solution. If You are not satisfied with the outcome of this process If We are unable to resolve the complaint or dispute, We will offer You the option of referring the matter to the insurance industry s external independent complaints scheme (subject to eligibility). The scheme will only review complaints or disputes if they have gone through our internal complaints and disputes resolution process. Contact for assistance or confirmation of cover If You need to confirm any Policy transaction or clarify any of the information contained in this document or if You have any other queries, please contact Us via the details on the back cover. If this insurance has been issued through an insurance intermediary If the Policy has been issued through Our agent, or a broker who is acting under an agency arrangement such as a binder with Us, then they are acting as Our agent and not as Your agent. If the Policy has been issued by a broker, other than a broker acting under such an agency arrangement with Us, then the broker is acting as Your agent. Note: You may purchase insurance through the insurer of Your choice. Where the Policy has been arranged through an intermediary a commission is payable by Us to them for arranging the insurance. General Definitions applicable to the Policy The following terms, wherever used in the Policy, shall mean: Accrual Financial Statements means Your profit and loss statement, and where required Your balance sheet and other information, for each financial year prepared on the basis that revenue and expenses are recorded in the financial period to which they relate and not on a cash received or cash paid basis. Commodity Claims Price means the actual price for which a given commodity was sold by the farmer, defined as the Delivered to Local Silo Price achieved by the farmer minus the end-point royalties and grain levies that apply. Delivered to Local Silo Price means the farm gate price minus the local silo delivery/freight charge. Excess means the amount shown in the Schedule, unless otherwise stated in the Policy, that You must bear before we pay any amount for a claim under the Policy. Indemnity Period means, subject to the terms and conditions of the Policy, the period in the crop year We cover You for reduction in Net Crop Revenue Per Hectare for the Insured Crops, starting from the date of seeding until the earlier of: a. the date the crop is threshed; or b. the day that the crop is put to another use. Insured Crop Application means the application for cover that You are required to submit to Us and which We have the right to accept or reject. The Policy is only entered into once confirmed in writing by Us. This application will be used as the basis to calculate the insured hectares and the premium payable under the contract. This application will also attach to and form part of the insurance Policy. Insured Crops means the relevant crop(s) specified in the Insured Crop Application in the Insured Crop Area(s) that are not otherwise excluded by Us. 6 Section 2: Latevo Certainty Insurance Policy Wording Latevo International

28 Insured Crop Area means the insured area and limits specified in the Insured Crop Application and accepted by Us and listed on the Schedule to the policy, in which You have successfully planted an Insured Crop using accepted farming practices and using generally accepted seeding dates. Insured Net Crop Revenue Per Hectare means the eligible amount of coverage per hectare which will be used to form the basis of payment for losses. The Insured Net Crop Revenue Per Hectare will be determined by Our underwriting criteria that is applied to the Accrual Financial Statements submitted by You. The amount of coverage will be shown in the Schedule to the Policy. Insured Peril means Water Stress, flood, hail, wind, frost, lightning, excessive rain, temperature stress, snow, hurricane, cyclone, tornado, wildlife, accidental fire, bushfire, insect or pest manifestation or plant disease. All other perils causing physical loss or damage to crops are not insured. Insured Property means the locations of the Insured Crop Area as shown in the Schedule. Insured Value Per Hectare means the amount per hectare chosen by You for which We have received premium. This value will be stated in the Schedule to the Policy. Named Peril Policy means that each peril that is covered by the policy is listed as an Insured Peril, and there is no coverage for any loss caused by a peril not listed. Net Crop Revenue Per Hectare means the Value of Crop Produced Per Hectare. The value of inventory will be based on the market price at as at the 1st of June most recently preceding the date of claim. Insect or Pest Manifestation means sudden and unforeseen damage by pests, insects and animals to an Insured Crop during the Period of Insurance but excluding damage caused where reasonable farm practices as declared in the underwriting information are not adhered to. Period of Insurance means the period of the Policy as set out in the Schedule or such shorter period in accordance with the Policy terms. Policy means this document and any endorsement, specification, attachment or memoranda affixed (or intended to be affixed) to it and the Schedule. Schedule means the most recently dated Schedule We have provided to You which specifies important information such as the policy number, Insured Crops, Insured Crop Area, the details of the Insured Property and the Sum(s) Insured. Sum Insured means the relevant amount shown in the Schedule as the Sum Insured. Temperature Stress means a condition of abnormally high temperature for sufficient time to cause damage to plant function or development. Territorial Limits means anywhere within Australia unless otherwise stated in the relevant Policy Section or in the Schedule. Unseeded Crop Area means the portion of the Insured Crop Area unable to be seeded due to an Insured Peril. Value of Crop Produced Per Hectare means the actual value of Insured Crop revenues during the Indemnity Period including all crop payments, increase or decrease in inventory and internal crop transferred to seed. Water Stress means a condition of rainfall and moisture deficit sufficient to have an adverse effect on the Insured Crops function and development. Areas where available rainfall totals during the Indemnity Period are in the lowest 30% of the average of historical totals are considered as drought affected. We, Us, Our, Allianz means Allianz Australia Insurance Limited ABN of 2 Market Street, Sydney NSW You, Your, Yours means the person(s) or entity(ies) named as the insured in the Schedule, unless otherwise stated in the relevant Policy Section. Latevo International Section 2: Latevo Certainty Insurance Policy Wording 7

29 Certainty Insurance What We cover Cover under the Policy is only provided once an Insured Crop Application has been provided to Us and We have confirmed our acceptance of cover to You in writing. Subject to the other terms and conditions of the Policy, We insure You against loss directly resulting from reduction of Net Crop Revenue Per Hectare caused by destruction of or damage to the Insured Crop Area as a direct result of an Insured Peril occurring during the Indemnity Period. We will pay in accordance with the Basis of Settlement clause below. This is a Named Peril Policy, meaning that if the peril is not listed as an Insured Peril, then you are not covered in relation to that peril. It is Your obligation to prove to Us that a loss was caused as a direct result of an Insured Peril under the Policy occurring during the Indemnity Period. Basis of Settlement The cover provided under the Policy is limited to loss of Net Crop Revenue Per Hectare due to a reduction in the Value of Crop Produced Per Hectare as a direct result of an Insured Peril occurring during the Indemnity Period. The amount payable will be the lesser of: (a) the difference between the Insured Net Crop Revenue Per Hectare and the Net Crop Revenue Per Hectare during the Indemnity Period; and (b) the Insured Value Per Hectare Our maximum total liability for any one and all claims combined will never exceed the Sum Insured. Alteration of Risk 1. Where, during the Indemnity Period, You have reason to believe that Your Net Crop Revenue Per Hectare for the Insured Crop Area will be less than the Insured Net Crop Revenue Per Hectare, You shall: (a) give Us written notice; (b) include the notice mentioned in clause 1(a) above an estimate of all carry-over production of Insured Crops in Your possession; (c) store harvested production of the crop separate from any other kind of production and in a manner so that identity of the crop is maintained. 2. Where in any year the Net Crop Revenue Per Hectare of the Insured Crop Area is less than its Insured Net Crop Revenue Per Hectare, You shall give written notice to Us immediately. 3. You must submit to Us in writing any requests for changes to hectares, locations, crops insured or any other changes that will affect the coverage under the Policy. We will issue a written acceptance of the requested changes. We may decline the acceptance of the changes submitted and until such time as they are accepted in writing by Us, all terms and conditions on the Policy remain the same. 4. Notice of any intended alterations of or departure from normal working conditions that would materially affect the risk of loss, damage or liability must be given to Us in writing. We shall not be liable for any loss or damage resulting from an aggravated risk unless prior approval of the modification has been obtained from Us. 5. If You do not give Us such notice as required by clauses 1 to 4 above before the happening of an event giving rise to a claim under the Policy then, subject to the Insurance Contracts Act 1984, We may refuse to pay a claim either in total or in part. However if such notice is given and We cannot approve any such modifications We may cancel the insurance on the insured item affected making a return of premium in accordance with the Short Rate Premium table to the unexpired Period of Insurance and the reduced risk. 8 Section 2: Latevo Certainty Insurance Policy Wording Latevo International

30 When We may reduce or deny a claim (a) The amount We pay under the Policy will be reduced by the amount any uninsured peril affected the yield. (b) We will not pay any claim for a loss or damage unless You establish to Our satisfaction that the loss or damage resulted directly from an Insured Peril and was not caused by an uninsured peril on its own. (c) We have the right to deny a claim on any crop that We deem is not suitable for local growing conditions or is planted at a date much later than would be recommend within normal farming practice. (d) We may reduce the amount We pay under this Policy where the loss or damage or deficiency in yield claimed by You results from Your negligence, neglect, misconduct or poor farming practices. (e) We will not pay any claim with respect to any crop or hectares that have been put to another use without Our agreement in writing. (f) Perils Occurring after harvest or while in storage The Policy does not cover loss to Insured Crops occurring after the crop has been harvested, or in storage unless it is caused by fluctuation of market prices to an Insured Crop that experienced an Insured Peril prior to being harvested or put in storage. All other causes of loss once harvested, in storage or transport, even if they lead to a drop in price of the commodity are not covered. (g) Where You file a claim on a crop in connection with which You have not provided Us with notice of an Alteration of Risk in accordance with the Basis of Settlement Alteration of Risk terms applicable to the Policy, We may count as Net Crop Revenue Per Hectare all such production that is mixed with other production and all production which cannot clearly be identified as carry-over production. The crop year will be the same as the fiscal period used for the related tax year within Your Accrual Financial Statements. (h) We may refuse to pay a claim if the loss or damage is as a result of any of the General Exclusions or other exclusions applicable to the Policy. (i) Where you have not sold Your crop by the 1st of June following the time of harvest and have a claim, We will settle Your claim based on the market price as at 1st June most recently preceding the date of claim. (j) Where you sell Your harvested crop below a reasonable market price, other than on a forward contract and You have a claim, We will settle Your claim based on the market price. General Exclusions applicable to the Policy These exclusions apply to the whole Policy to the extent permitted by law. The Policy does not cover any loss, damage, destruction or liability, costs or expenses caused by, arising out of, contributed to or aggravated by: War Any war, whether war be declared or not, hostilities or rebellion, civil war, revolution, insurrection, military or usurped power, invasion, act of foreign enemy; Nuclear Ionising radiation or contamination by radioactivity from: (i) any nuclear fuel or from any nuclear waste; or (ii) the combustion of nuclear fuel (including any selfsustaining process of nuclear fission); or (iii) nuclear weapons material; Lawful seizure The lawful seizure, detention, confiscation, nationalisation or requisition of the insured property; Latevo International Section 2: Latevo Certainty Insurance Policy Wording 9

31 Wilful acts Any actual or alleged: (i) dishonest, fraudulent, criminal or malicious act; or (ii) wilful breach of any statute, contract or duty; or (iii) conduct intended to cause loss or damage or with reckless disregard for the consequences; carried out by You, Your employees or any person acting with Your knowledge, consent or connivance. Territorial limits Occurrences outside the Commonwealth of Australia except as specifically stated otherwise in the Policy. Terrorism Any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss. An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organisation(s) or government(s) de jure or de facto, and which: a. involves violence against one or more persons; or b. involves damage to property; or c. endangers life other than that of the person committing the action; or d. creates a risk to the health or safety of the public or a section of the public; or e. is designed to interfere with or to disrupt an electronic system. The Policy also excludes death, injury, illness, loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism. The above Terrorism exclusion will apply to the Policy unless otherwise provided for in the Terrorism Insurance Act 2003, in which event it may not apply to certain loss, damage or liability covered by the Policy. Pollution This policy does not insure loss, damage or expense, directly or indirectly, in whole or in part caused by pollution as respects nuclear, radioactive, biochemical and chemical contamination. Other Excluded Losses (a) Any increase in loss due to the interference by strikers with the rebuilding, repairing or replacement of property, or with the resumption of business after a loss. (b) Any loss due to the cancellation, suspension or lapsing of any license, lease or other contract or order; (c) The cost of compiling books of account, abstracts, drawings, card index systems or other records including film, tape, disc, drum, cell or other magnetic recording or storage media for electronic data processing. (d) Any loss due to fines or damages for breach of contract for late or non-completion of orders, or for any penalties of whatever nature. (e) Unless otherwise specifically stated in the Policy, We are not liable for loss or damage to property owned by any person other than You, unless Your interest therein is stated in the Policy (f ) Any loss to potential income, including but not limited to interest and dividends, not realised by the You because of a loss covered under the Policy 10 Section 2: Latevo Certainty Insurance Policy Wording Latevo International

32 Claims Procedure 1. As soon as You become aware of anything happening which may result in a claim under the Policy You must, at Your own expense: a. notify Us as soon as possible, telling Us how the loss or damage occurred. Following said notification, Latevo shall deliver Proof of Loss form(s) to be completed by the Insured, with the assistance of the adjusting firm if necessary. b. take all reasonable action to recover property and minimise the claim with due diligence and do and concur in doing and permit to be done all things which may be reasonably practicable to minimise or check any loss of Net Crop Revenue Per Hectare or to avoid or diminish the loss; c. give Us all the information, proof and assistance We may require in relation to Your claim including details of any other insurance effected by You or on Your behalf or under which You may claim; d. provide Us with an immediate right of access and entry by accredited agents sufficient to enable them to survey and examine the property, and to make an estimate of the loss or damage, and, after You have secured the property, a further right of access and entry sufficient to enable Us or Our agents to make an appraisal or particular estimate of the loss or damage, but We are not entitled to the control or possession of the Insured Property, and without Our consent there can be no abandonment by You of the Insured Property. 2. After You have advised Us of any loss or damage as set out in this condition: a. subject to the Insurance Contracts Act 1984, You must comply with all the terms of the Policy, including the general conditions before We will meet any claim under the Policy; b. We have the right to recover from any person against whom You may be able to claim any money paid by Us. We will have full discretion in the conduct, settlement or defence of any claim in Your name. The amount recovered will be applied first to reducing the amount by which Your loss exceeds the payment made by Us plus any Excess applied. Any balance remaining after You have been fully compensated for Your loss, up to the amount We have paid to You to settle Your claim (including Our legal fees for recovery), will be retained by Us; c. We may take over and conduct, in Your name, the defence or settlement of any claim and We will have full discretion in the conduct of any proceedings in connection with the claim; d. We may pay You the Sum Insured under the Policy or any lesser amount for which a claim or claims may reasonably be settled. The settlement of the claims is based on the final revenue per hectare of the operation, which is calculated using the Commodity Claims Price, with the exception of the June 1st (of the following year) price valuation on inventory held over and not immediately sold. If any inventory is held over to the following year, the last date for commodity valuation that can be used in determining the revenue per hectare of this additional inventory is June 1st (of said following year). After we have paid You, We will no longer be liable for the claim(s) (or future conduct of the claim(s)) except for costs and expenses incurred up until the time We agreed to pay. Latevo International Section 2: Latevo Certainty Insurance Policy Wording 11

33 General Conditions applicable to all Sections of the Policy Misstatement of Inventory or production If You misstate, or the Accrual Financial Statements are incorrect in their statement of production or inventory We will adjust production, inventory or other yield calculations at Our discretion. This may also affect current or future Insured Net Crop Revenue Per Hectare. All payments, whether finalised or not, can be adjusted and You agree to payment of any additional premium amounts requested by Us in this regard. Cross Liability We agree that each person comprising the insured named in the Schedule or specified as entitled to cover is considered as if that person were the only person insured (except to the extent We specify otherwise), and We waive Our rights of subrogation against any of those persons. Examination Our representatives shall be permitted at all reasonable times during the currency of the Policy to inspect and examine the Insured Crops and the operating records. If during inspection by Us of any Insured Crops under the Policy any new facts of a nature likely to increase the risk are observed You must at Our request restore the risk to normal within an agreed time. If You fail to do so We may cancel the Policy. 12 Section 2: Latevo Certainty Insurance Policy Wording Latevo International Governing law and jurisdiction The laws of Australia govern the Policy. Any dispute relating to the Policy shall be submitted to the exclusive jurisdiction of an Australian Court within the State or Territory in which the Policy was issued. Interests of other parties The insurable interest of only those lessors, financiers, trustees, mortgagees, owners and all other parties having a legal interest or charge over the Insured Property and who are specifically noted in Your records, shall be automatically included as third party beneficiaries without notification to or specification by Us. The nature and extent of such interest is to be disclosed to Us in the event of damage. Any other people not in this category or not named on the Schedule are not covered and cannot make a claim. All third party beneficiaries must comply with the terms and conditions of the Policy. Where the protection provided by the Policy covers the interest of more than one party, any act omission of an individual party will not prejudice the rights of the remaining parties: (i) subject to General Exclusion - Wilful acts; and (ii) provided the remaining parties must, immediately on becoming aware of any act or omission that increases the risk of loss or damage, give notice in writing to Us and on demand pay any reasonable additional premium We may require. GST Notice The Policy has a GST provision in relation to premium and Our payment to You for claims. It may have an impact on how You determine the amount of insurance You need. Please read it carefully. Seek professional advice if You have any queries about GST and Your insurance. Sum insured All monetary limits in the Policy may be increased for GST in some circumstances (see below). Claim settlements Where We agree to pay When We calculate the amount We will pay You, We will have regard to the items below: 1. Where You are liable to pay an amount for GST in respect of an acquisition relevant to Your claim (such as services to repair a damaged item insured under the Policy) We will pay for the GST amount. We will pay the GST amount in addition to the Sum Insured or other limits shown in the Policy or in the Schedule. If Your Sum Insured is not sufficient to cover Your loss, We will only pay the GST amount that relates to Our settlement of Your claim. We will reduce the GST amount We pay for by the amount of any input tax credits to which You are or would be entitled.

34 2. Where We make a payment under the Policy as compensation instead of payment for a relevant acquisition, We will reduce the amount of the payment by the amount of any input tax credit that You would have been entitled to had the payment been applied to a relevant acquisition. 3. Where the Policy insures business interruption, We will (where relevant) pay You on Your claim by reference to the GST exclusive amount of any supply made by Your business that is relevant to Your claim. Disclosure Input Tax Credit Entitlement If You register, or are registered, for GST You are required to tell Us Your entitlement to an input tax credit on Your premium. If You fail to disclose or understate Your entitlement, You may be liable for GST on a claim We may pay. The Policy does not cover You for this GST liability, or for any fine, penalty or charge for which You may be liable. Other Insurance In the event of any claim being made under the Policy, You must notify Us of any other insurance covering the same loss or damage of which You are aware. Transfer & Assignment You may assign Your right to an indemnity for an Insured Crop in any crop year under the Policy but any such assignment shall be in the form approved Us and shall not be binding on Us until We have accepted the assignment in writing. An assignee under this Policy shall have the same right as You to file a claim for loss or damage to the Insured Crop where You do not file a claim. The insurance granted by the Policy shall cease to attach to any item insured under the Policy in which Your interest passes from You otherwise than by will or operation of law unless Our consent for the continuance of the insurance is obtained and signified by endorsement hereon. Salvage In the event of any loss or damage to any property insured under the contract, You shall take all reasonable steps to prevent further damage to such property so damaged and to prevent damage to other property insured hereunder including, if necessary, its removal to prevent damage or further damage thereto. We shall contribute pro-rata towards any reasonable and proper expenses in connection with steps taken by You and required under this condition according to the respective interests of the parties. Waiver of subrogation rights To the extent permitted by law, We will not be liable to pay any benefits under the Policy for loss or damage if You agree or have agreed to limit or exclude any right of recovery against any third party who would be liable to compensate You with respect to that loss or damage. Latevo International Section 2: Latevo Certainty Insurance Policy Wording 13