CHAPTER 4

MANAGEMENT AND LEGAL STUDY

Form of Ownership

The form of ownership to be adopted by the company is a Producers

Cooperative. A cooperative, as defined in Article 3 of Republic Act of 9520, also known

as the “Philippine Cooperative Code of 2008”, is an autonomous and duly registered

association of persons, with a common bond of interest, who have voluntarily joined

together to achieve their social, economic, and cultural needs and aspirations by making

equitable contributions to the capital required, patronizing their products and services

and accepting a fair share of the risks and benefits of the undertaking in accordance with

universally accepted cooperative principles.

Article 23 (1)(e) defined service cooperatives as one of those which provide any

type of service to its members, including but not limited to, transport, information and

communication, insurance, housing, electric, health services, education, banking, and

savings and credit.

Vision, Mission, and Core Values

Vision

The “Samahan ng mga Magsasaka ng Pasibi East Cooperative” envisions to be

a partner of choice in the rice industry and be a sustainable cooperative that brings each

committed individual together to uplift the quality of life of the members and the

community.
Mission

To enhance our members' profitability by providing programs and services

through a well operated, profitable, customer-sensitive agricultural cooperative.

Core Values

Every cooperative shall conduct its affairs in accordance with Filipino culture,

good values and experience and the universally accepted principles of cooperation.

(1) Voluntary and Open Membership – the cooperative is a voluntary

organization, open to all persons able to use their services and willing to accept the

responsibilities of membership, without gender, social, racial, cultural, political or

religious discrimination.

(2) Democrative Member Control – the cooperative is a democratic organizations

that are controlled by their members who actively participate in setting their policies and

making decisions. Men and women serving as elected representatives, directors or

officers are accountable to the membership. In primary cooperatives, members have

equal voting rights of one-member, one-vote. Cooperatives at other levels are organized

in the same democratic manner.

(3) Member Economic Participation - Members contribute equitably to, and

democratically control, the capital of their cooperative. At least part of that capital is the

common property of the cooperative. They shall receive limited compensation or limited

interest, if any, on capital subscribed and paid as a condition of membership. Members

allocate surpluses for any or all of the following purposes: developing the cooperative by

setting up reserves, part of which should at least be indivisible; benefitting members in

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proportion to their patronage of the cooperative's business; and, supporting other

activities approved by the membership.

(4) Autonomy and Independence – the cooperative is an autonomous, self-help

organization controlled by their members. If they enter into agreements with other

organizations, including government, or raise capital from external sources, they shall do

so on terms that ensure democratic control of their members and maintain their

cooperative autonomy.

(5) Education, Training and Information – the cooperative shall provide education

and training for their members, elected and appointed representatives, managers, and

employees, so that they can contribute effectively and efficiently to the development of

their cooperatives.

(6) Cooperation among Cooperatives – the cooperative serves their members

most effectively and strengthen the cooperative movement by working together through

local, national, regional and international structures.

(7) Concern for Community – the cooperative works for the sustainable

development of their communities through policies approved by their members.

Capitalization

The capitalization of the cooperative is provided in Republic Act 9520 entitled

“Philippine Cooperative Code of the Philippines”, and also mentioned in its Implementing

Rules and Regulations:

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 Chapter VIII Capital, Property, and Funds

"ART. 71. Capital. - The capitalization of cooperatives and the accounting procedures

shall be governed by the provisions of this Code and the regulations which shall be

issued.

"ART. 72. Capital Sources.- Cooperatives registered under this Code may derive their

capital from any or all of the following sources:

"(1) Member’s share capital;

"(2) Loans and barrowings including deposits;

"(3) Revolving capital which consists of the deferred payment of patronage refunds, or

interest on share capital; and

"(4) Subsidies, donations, legacies, grants, aids and such other assistance from any

local or foreign institution whether public or private: Provided, That capital coming from

such subsides, donations, legacies, grants, aids and other assistance shall not be

divided into individual share capital holdings at any time but shall instead form part of the

donated capital or fund of the cooperative.

"Upon dissolution, such donated capital shall be subject to escheat.

"ART. 73. Limitation on Share Capital Holdings.- No member of primary cooperative

other than cooperative itself shall own or hold more than ten per centum (10%) of the

share capital of the cooperative.

"Where a member of cooperative dies, his heir shall be entitled to the shares of the

decedent: Provided, That the total share-holding of the heir does not exceed ten per

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centum (10%) of the share capital of the cooperative; Provided, further, That the heir

qualify and is admitted as members of the cooperative: Provided finally , That where the

heir fails to qualify as a member or where his total share-holding exceeds ten per

centum (10%) of the share capital , the share or shares excess will revert to the

cooperative upon payment to the heir of the value of such shares.

"ART. 74. Assignment of Share Capital Contribution or Interest.- Subject to the

provisions of this Code, no member shall transfer his shares or interest in the

cooperative or any part thereof unless.

"(1) He has held such share capital contribution or interest for not less than one (1) year.

"(2) The assignment is made to the cooperative or to a member of the cooperative or to

a person who falls within the field of the membership of the cooperative; and

"(3) The board of directors has approved such assignment.

"ART.75. Capital Build-Up.- The bylaws of every cooperative shall be provided for a

reasonable and realistic member capital build-up program to allow the continuing growth

of the members’ investment in their cooperative as their economic conditions continue to

improve.

"ART.76. Shares.- The term "share" refers to a unit of capital in a primary cooperative

the par value of which may be fixed to any figure not more than One thousand pesos

(P1,000.00). The share of capital of a cooperative is the money paid or required to be

paid for the operations of the cooperative. The method for the issuance of share

certificates shall prescribed in its bylaws.

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"ART.77. Fines. - The bylaws of a cooperative may prescribe a fine on unpaid

subscribed share capital. Provided, that such fine is fair and reasonable under the

circumstances.

"ART.78. Investment of Capital. - A cooperative may invest its capital in any of the

following:

"(a) In shares or debentures or securities of any other cooperative;

"(b) In any reputable bank in the locality, or any cooperative;

"(c) In securities issued or guaranteed by the Government;

"(d) In real state primarily for the use of the cooperative or its members; or

"(e) In any other manner authorized in the bylaws.

Rule 10 Capitalization and Accounting Procedures of Cooperatives

Section 1. Legal Basis. The legal basis for this Rule is Art. 71 of the Code, quoted as

follows:

"Art. 71. Capital. - The Capitalization of cooperatives and the accounting

procedures shall be governed by the provisions of this Code and the regulations which

shall be issued."

Section 2. Capital Sources. Capitalization of a duly registered cooperative may be

derived from any or all of the following sources;

1. Members' Share Capital;

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 2. Loans and Borrowing Including Deposits;

3. Revolving Capital which consist of the deferred payment of patronage refunds,

or interest on share capital; and

4. Subsidies, donations, legacies, grants, aids and such other assistance from

any local or foreign institution whether public or private; Provided, That capital coming

from such subsidies, donations, legacies, grants, aids and other assistance shall not be

divided into individual share capital holdings at any time but shall instead form part of the

donated capital or fund of the cooperative.

Section 3. Share Capital. The Share Capital of a cooperative, the per value of which

may be fixed at any figure not more than One Thousand Pesos (P1,000.00), may consist

of common share capital and preferred share capital if the latter is provided for under the

cooperative's Articles of Cooperation and By-laws. The share capital contribution of the

members shall be considered as equity. Provided, that it shall not be withdrawn and

should not be used in offsetting obligations whether past due or current while the

membership subsists.

(a) Common Share Capital shall be issued only to regular members. Its holders shall be

entitled to vote and be voted under the principle of one-man, one vote principle, and

shall receive interest, the rate which should not exceeded the normal rate on investment.

(b) Preferred Share Capital may be issued to regular and associate members. However,

associate Members shall not be eligible to vote nor be voted on account of such

shareholdings but shall be entitled to, among others the following:

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 1. Preference in the payment of interest as provided for in the Bylaws of the

cooperative; and,

2. In case of liquidation, priority in the distribution on Preferred Share Capital

shall be prescribed in the By-laws of the cooperative.

Section 4. Preferred Shares. Issuance and limitation on Preferred Share Capital shall be

prescribed in the By-laws of the cooperative.

Section 5. Capital Build-Up. The By-laws of every cooperative shall provide for a

reasonable and realistic member capital build-up program to allow the continuing growth

of the members' investment in their cooperative as their own economic conditions

continue to improve.

Section 6. Limitation on Share Capital Holdings. No member of a primary cooperative

other that a cooperative itself shall own or hold more than ten percent (10%) of the share

capital of the cooperative. In the case of Secondary and Tertiary Cooperatives, members

should own not more than ten percent (10%) of the share capital of the cooperative.

Section 7. Fines on Unpaid Subscribed Share capital. The By-laws of a cooperative

shall prescribe a fine on unpaid subscribed share capital. Provided, that such fine is fair

and reasonable under the circumstances as determined by the Board of Directors.

Section 8. Assignment of Share Capital Contribution or Interest. Subject to the provision

of R.A. 9520, no member shall transfer his/her shares or interest in the cooperative or

any part thereof unless:

1. He/She has held such share capital contribution or interest for not less than

one (1) year;

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 2. The assignment is made to the cooperative or to a person who falls within the

field of membership of the cooperative; and,

3. The Board of Directors has approved such assignment.

Section 9. Interest on Share Capital. Interest on Share Capital shall not exceed the Rate

of Return on Investment.

Unless otherwise provided for in the By-laws of the cooperative, share capital

shall earn interest; the Rate of Interest shall be computed as follows:

X (Net Surplus less Statutory Reserves)

Rate of Interest =
Total Average Share Month

Where: X shall be a percentage to be determined by the Board of Directors allocated for interest
on share capital.

No allocation of interest on share capital shall be made without the approval of

the Board of Directors which may increase or decrease any or both.

Payment of interest, unless otherwise provided for in the By-laws, must be made

on such date as may be determined by the Board of Directors. The

General/Representative Assembly, however, upon the recommendation of the Board of

Directors, may defer the payment of such interest including Patronage Refund to raise

Revolving Capital.

No cumulative interest shall be allowed for any kind or class of share issued by

the cooperative.

Share Capital shall receive a strictly limited Rate of Interest.

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Section 10. Withdrawal of Share Capital. A member of a cooperative may, for any valid

reason, withdraw his/her membership from the cooperative by giving a sixty (60) days

notice to the Board of Directors. Subject to the By-laws of the cooperative, the

withdrawing member shall be entitled to a refund of his/her share capital contribution and

all other interests in the cooperative. Provided, That such refund shall not be made if

upon such payment the value of the assets of the cooperative would be less than the

aggregate amount of its debts and liabilities exclusive of his/her share capital

contribution.

Section 11. Patronage Refund. The principle of Patronage Refund is a principle of a

equity wherein an equal right of members to participate in the organization and to

equitably share in the benefits accruing is established. Under the principle, the Net

Surplus shall not be construed as profit, but as excess payments made by them from the

cooperative and which shall be deemed to have been returned to them if the same is

distributed as prescribed by the Code and by this Rule. Provided, however, That the

amount allocated for patronage refund shall not be less than thirty percent (30%) of the

net surplus after deducting the statutory reserves based on the principle of equity.

Provided, further, that in no case shall the rate of patronage refund be more than twice

the rate of interest on share capital.

Section 12. Accounting Procedure. The accounting system to be installed/maintained in

the cooperative shall be in accordance with the generally accepted accounting principles

and practices, taking into consideration cooperative principles and practices. The

cooperative shall use the Standard Chart of Accounts and its accompanying Accounting

Manual prescribed by the Authority.

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Organization Chart

General Assembly

Audit Board of Election

Committee Directors Committee

General Manager

Secretary

Treasurer

Mediation and Ethics

Conciliation Committee
Committee

Employees

Figure 27
Organizational Structure of the SMP Cooperative

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Manpower Requirements

Top-Level Management

The board of directors, president, vice-president, and CEO are all examples of

top-level managers. Top-level managers are not only responsible for controlling and

overseeing the entire organization but also play a significant role in the mobilization of

outside resources. They develop goals, strategic goals, strategic plans, company

policies, and make decisions on the direction of the business. They are accountable to

the shareholders and general public.

Middle-Level Management

General Managers, branch managers, and department managers are all

examples of middle-level managers. They are accountable to the management for their

department’s function. In comparison to the top-level, they devote more time to

organizational and directional functions. Their roles can be emphasized as:

Executing organization plans in conformance with the company’s policies and

the objectives of the top management;

Defining and discussing information and policies from top management to

lower management;

Inspiring and providing guidance to low-level managers towards better

performance;

Designing and implementing effective group and intergroup work and

information systems;

Defining and monitoring group-level performance indicators;

Diagnosing and resolving problems within and among work groups; and

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 Designing and implementing reward systems supporting cooperative

behavior.

Low-Level Management

Supervisors, section leads, and foremen are examples of low-level management

titles. These managers focus on controlling and directing. Low-level managers usually

have the responsibilities of:

Assigning employees tasks;

Guiding and supervising employees on day-to-day activities;

Ensuring the quality and quantity of production;

Making recommendations and suggestions; and

Up channeling employee problems.

Job Specifications and Functions

General Assembly

Description: The general assembly of the cooperative shall be composed of such

members who are entitled to vote under the articles of cooperation and by-laws of the

cooperative duly assembled and constituting a quorum.

I. Job Title: Board of Directors

Job Description:

All board members should adhere to, no matter their particular position on the

board:

Understand and demonstrate a commitment to the organization’s mission and

programs.

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 Keep up to date with issues and trends that affect the organization.

Prepare for meetings by reading agendas, minutes, reports and other

documentation required to actively participate in them.

Attend meetings regularly.

Contribute skills and knowledge by participating actively in meetings and

committee work.

Make inquiries when clarification or more information is needed.

Understand and monitor the organization’s financial affairs.

Avoid any potential conflicts of interest.

Understand and maintain confidentiality.

Ensure the organization is complying with all legal and regulatory

requirements.

Duties and Responsibilities:

The Board of Directors shall have the following duties and responsibilities:

Provide general policy direction.

Formulate the strategic development plan.

Determine and prescribe the organizational and operational structure.

Review the Annual Plan and Budget and recommend for the approval of the

General/Representative Assembly.

Establish policies and procedures for the effective operation and ensure

proper implementation of such.

Evaluate the capability and qualification and recommended to the

General/Representative Assembly the engagement of the services of an

External Auditor.

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 Appoint the members of the Mediation/Conciliation and Ethics Committees

and other Officers as specified in the Code and cooperative By-laws.

Decide election related cases involving the Election Committee or its

members;

Act on the recommendation of the Ethics Committee on cases involving

violations of Code of Governance and Ethical Standards.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

II. Job Title: General Manager

Job Description:

The job of the general manager is to model the behaviors and attitudes expected

of all staff, and ensure the achievement of the ends policies within the boundaries as

defined by the executive limitations policies. He is empowered to make all decisions,

create policies, and authorize all engagements, and is responsible for demonstrating

consistent reasonable interpretation of board policy as provided for in board/general

manager relations policies.

Duties and Responsibilities:

The General Manager shall:

Oversee the overall day to day business operations of the cooperative by

providing general direction, supervision, management and administrative

control over all the operating departments subject to such limitations as may

be set forth by the Board of Directors or the General/Representative

Assembly.

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 Formulate and recommend in coordination with the operating departments

under his/her supervision, the Cooperative's Annual and Medium Term

Development Plan, programs and projects, for approval of the Board of

Directors and ratification of the General/Representative Assembly.

Implement the duly approved plans and programs of the Cooperative and any

other directive or instruction of the Board of Directors.

Provide and submit to the Board of Directors monthly reports on the status of

the Cooperative's operation to its targets and recommend appropriate policy

or operational changes, if necessary.

Represent the Cooperative in any agreement, contract, business dealing, and

in any other official business transaction as may be authorized by the Board

of Directors.

Ensure compliance with all administrative and other requirements of

regulatory bodies.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

Job Specifications:

General Manager must possess the following qualifications:

Supervisory experience: hiring, training, evaluating, compensating, firing.

Experience with operating, capital, and cash budgeting.

Commitment to cooperative values and principles.

Bottom line accountability experience.

Ability to make tough decisions.

Ethics.

Ability to motivate, lead, and coordinate people to gain cooperation.

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 Ability to listen.

Ability to give and receive feedback without defensiveness.

Ability to build an effective management team and board.

Ability to present spoken and written information clearly.

Openness to good new ideas, regardless of where they come from.

Ability to manage own and other’s time.

He must be familiar with the business operation of the cooperative.

He must at least be a college graduate.

He must be honest and must have a deep sense of responsibility.

III. Job Title: Secretary

Job Description:

The Secretary is responsible for ensuring that accurate and sufficient

documentation exists to meet legal requirements, and to enable authorized persons to

determine when, how, and by whom the board's business was conducted. In order to

fulfill these responsibilities, and subject to the organization's bylaws, the Secretary

records minutes of meetings, ensures their accuracy, and availability, proposes policies

and practices, submits various reports to the board, maintains membership records,

fulfills any other requirements of a Director and Officer, and performs other duties as the

need arises and/or as defined in the bylaws.

Duties and Responsibilities:

The Secretary shall:

Keep an updated and complete registry of all members.

Record, prepare and maintain records of all minutes of meetings of the Board

of Directors and the General/Representative Assembly.

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 Ensure that necessary Board of Directors actions and decisions are

transmitted to the management for compliance and implementation.

Issue and certify the list of members who are in good standing entitled to vote

as determined by the Board of Directors.

Prepare and issue Share Certificates.

Serve notice of all meetings called and certify the presence of quorum of all

meetings of the Board of Directors and the General/Representative

Assembly.

Keep copy Treasure's reports and other reports.

Keep and maintain the Share and Transfer Book.

Serve as custodian of the cooperative seal.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/ Representative Assembly.

Job Specifications:

A secretary should be/have:

Good Spoken and written communication skills.

Excellent organizational and time-management skills.

Good keyboard skills.

Confidence with a range of computer software.

A good command of English grammar and spelling.

Accuracy and attention to detail.

The ability to work under pressure and meet deadlines.

Tact and discretion, for dealing with any confidential information.

The ability to work as part of a team.

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IV. Job Title: Treasurer

Job Description:

The treasurer is responsible for the timely and accurate collection and

disbursement of all funds for the cooperative. Additionally, the Treasurer is responsible

for the timely preparation and maintenance of the financial records. This includes budget

reviews, bank statements and returned checks, invoices, records and any all other

financial reports, as required by the bylaws, loan agreements and contractual

arrangements.

Duties and Responsibilities:

The Treasurer shall:

Ensure that all cash collections are deposited in accordance with the policies

set by the Board of Directors.

Have custody of all funds, securities, and documentation's relating to all

assets, liabilities, income and expenditures.

Monitor and review the financial management operations of the cooperative,

subject to such limitations and control as may be prescribed by the Board of

Directors.

Maintain full and complete records of cash transactions.

Maintain a Petty Cash Fund and Daily Cash Position Report.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

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 Job Specification:

Treasurer must attend Basic Cooperative Course; Records Management

(Financial Transaction); Basic Accounting for Non-Accountants; Cooperative

Standards; Investment and Banking Procedures and Financial Management.

Good knowledge of modern financial accounting and record keeping;

familiarity with the laws, regulations, procedures and policies related to

school district finances; ability to follow oral and written instructions; ability to

keep financial records and prepare reports thereon; integrity; good judgment;

good address; good physical condition.

Either (a) graduation from high school and three years of financial record

keeping experience; or (b) two years of post-high school education in

financial record keeping and one year of experience as described under (a);

or (c) any satisfactory equivalent combination of the foregoing training and

experience.

V. Job Title: Audit Committee

Job Description:

The audit is a key aspect of the board’s fiduciary responsibility and part of the

cooperative’s internal controls. The audit does not shift the responsibility for the financial

statements of the cooperative onto the auditor. The board retains the responsibility for

the accounting system regardless of the method used to perform the audit. Because of

the on-going responsibilities surrounding the audit, many cooperatives form audit

committees within the board.

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 Duties and Responsibilities:

The committee shall:

Monitor the adequacy and effectiveness of the cooperative's management

and control system.

Audit the performance of the cooperative and its various responsibility

centers;

Review continuously and periodically the books of account and other financial

records to ensure that these are in accordance with the cooperative principles

and generally accepted accounting procedures.

Submit reports on the result of the internal audit and recommend necessary

changes on policies and other related matters on operation to the Board of

Directors and General/Representative Assembly.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

Job Specifications:

Audit Committee members must attend Basic Cooperative Course; Basic

Accounting for Non-Accountants; Internal Control including Inventory system;

Cooperative Standards; Audit Management; Records Management and Basic Computer

Program.

VI. Job Title: Election Committee

Job Description:

The members of Audit Election Committees shall be elected by the General

Assembly while the Board of Directors shall appoint the rest.

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 The Election Committee shall supervise the election of the Board of Directors

and committee members of the cooperative and each Representative or Delegates shall

be entitled to one (1) vote. The votes of the sector, chapter, or district Representative or

Delegates shall be considered the votes of all the members of the sector, chapter, or

district they represent (RA 9520, Section 16).

Duties and Responsibilities:

The Election Committee shall:

Formulate election rules and guidelines and recommended to the

General/Representative Assembly for approval.

Implement election rules and guidelines duly approved by the

General/Representative Assembly.

Recommended necessary amendments to the election rules and guidelines,

in consultation with the Board of Directors, for the General/Representative

Assembly’s approval.

Supervise the conduct, manner and procedure of election and other election

related activities and act on the changes thereto.

Canvass and certify the results of the election.

Proclaim the winning candidates.

Decide election and other election related case except those involving the

Election Committee or its members.

Perform such other functions as prescribed in the by-laws or authorized by

the General/Representative Assembly.

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 Job Specification:

Election Committee members must undergo Basic Cooperative Course; records

management; rules formulation; leadership and value re-orientation and basic computer

program.

VII. Job Title: Ethics Committee

Job Description:

The Ethics Committee meets at least once a month. Its decisions are made

unanimously. Reporting directly to the Chairman and CEO, its seven members are well

versed in our businesses and business lines. They include a chairman, a person

responsible for ethics policies and five employees, each delegated by a Total business

segment. The members have reached a point in their careers that allows them to

exercise the independent judgment and thinking vital to carrying out the Ethics

Committee's mission.

To fulfill its responsibilities effectively, the Committee works closely with the

departments and divisions concerned at the corporate level and in our business

segments. The departments and divisions in question include Legal Affairs, Compliance

& Corporate Social Responsibility, Internal Control & Audit, Sustainable Development &

Environment, Finance, Corporate Security and Human Resources.

Finally, the Ethics Committee's Chairman presents an annual report to our

Executive Committee and Board of Directors.

Duties and Responsibilities:

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The committee shall:

Develop Code of Governance and Ethical Standards to be observed by the

members, officers and employees of the cooperative subject to the approval

of the Board of Directors and ratification of the General/Representative

Assembly.

Disseminate, promote and implement the approved Code of Governance and

Ethical standards.

Monitor compliance with the Code of Governance and Ethical Standards and

recommend to the Board of Directors measures to address the gap, if any.

Conduct initial investigation or inquiry upon receipt of a complaint involving

Code of Governance and Ethical Standards and submit report to the Board of

Directors together with the appropriate sanctions.

Recommend ethical rules and policy to the Board of Directors.

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

Job Specification:

The Committee must have knowledge in different areas, such as:

Basic Cooperative Course.

Leadership and Values Re-orientation.

Conflict management.

Record management.

Basic Computer Program.

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VIII. Job Title: Mediation and Conciliation Committee

Job Description:

A Mediation and Conciliation Committee is hereby created and shall composed

of three (3) members to be appointed by the Board of Directors. Within ten (10) day after

their appointment, they shall elect from themselves a Chairperson, Vice-Chairperson

and a Secretary who shall serve for term of one year or until successors shall have been

elected and qualified. No member of the committee shall hold any other position in the

Cooperative during his term of office.

Duties and Responsibilities:

The committee shall:

Formulate and develop the Conciliation-Mediation Program and ensure that

it is properly implemented.

Monitor Conciliation-Mediation program and processes.

Submit semi-annual reports of cooperative cases to the Authority within

fifteen (15) days after the end of every semester.

Accept and file Evaluation Reports.

Submit recommendations for improvement to the Board of Directors.

Recommend to the Board of Directors any member of the cooperative for

Conciliation-Mediation Trainings as Cooperative Conciliator-Mediator.

Issue the Certificate of Non-Settlement (CNS).

Perform such other functions as may be prescribed in the By-laws or

authorized by the General/Representative Assembly.

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 Job Specification:

The following persons shall be treated as qualified and eligible for being

empanelled as mediator/conciliators:

Retired Judges of the Supreme Court; Retired Judges of the High Courts;

Retired District and Session Judge/Additional District and Sessions Judges.

Legal practitioners with at least five years standing at the Bar in the Supreme

Court/ High Court / District Court.

Experts or other professionals with at least fifteen years standing or retired

senior bureaucrats or retired senior executives.

Institutions which are themselves experts in mediation/conciliation and have

been recognized as such by the High Court.

IX. Job Title: Employees

Job Description:

Employees include permanent, temporary, and part-time employees, people

working under scholarships, traineeships, apprenticeships and similar relationships.

Duties and Responsibilities:

In general:

Obey a lawful, reasonable order within the terms of the contract of

employment.

Serve faithfully.

Cooperate with the employer.

Perform duties with proper care and diligence.

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 Account for all money or property received.

Indemnify the employer in appropriate cases.

Not to misuse the confidential information acquired while in service.

Job Specification:

Outstanding research and information management capabilities.

Proven ability to work collaboratively with diverse groups and establish

ongoing relationships.

Capable of quickly understanding how systems are used in order to provide

efficient support.

Demonstrated outstanding customer orientation using strong communication

skills.

Strong leadership, teaching, curriculum development, and writing capabilities.

Organizational Policies and Procedures

I. Personnel Employment and Members Recruitment Process

MEMBERS

Job Description: A cooperative has two kinds of members: regular members and

associate members.

A regular member is a one who has complied with all the membership

requirements and entitled to all the rights and privileges and membership as stated in

the Cooperative Code and the Cooperative Bylaws.

An associate member has no right to vote and be voted upon and is entitled only

to such rights and privileges provided by the cooperatives bylaws.

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 Duties and Responsibilities:

Every member shall have the following duties:

Pay the installment on capital stock subscription as it falls due and to participate

on the capital build-up of the cooperative.

Patronize regularly its business.

Participate in its parliamentary affairs.

Attend the membership meeting, regular or special.

Obey all rules and regulations provided by R.A. 9520 (An act Amending the

Cooperative Code of the Philippines), these Bylaws, the decisions of the general

assembly and the Board of Directors, and policies and decisions that may be

promulgated by the Cooperative Development Authority (CDA).

Promote the aims and purposes of the cooperative, the success of its business,

the welfare of its members and the cooperative movement as a whole. The

Board may determine additional duties that may qualify members of good

standing.

Job Specifications:

The membership of this Cooperative is open to all natural persons, Filipino

Citizens, of legal age, with capacity to contract and, within the common bond and field of

membership described as follows:

1. Must be a resident of Pasibi East, Urbiztondo, Pangasinan.

2. Approved application for membership.

3. Must be a farmer.

4. Must be willing to contribute their harvested paddy.

5. Certificate of completion of the prescribed Pre-Membership Education Seminar.

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 6. Subscribed and paid the required minimum share capital membership fee of

P1,500.00 annually

PERSONNELS

Application Requirements

All applicants shall complete and file an employment application form prior to

personal interview.

Attendance and Punctuality

Employees are expected to be at their normal scheduled work location promptly

at the beginning of the work day. If an employee must be absent, he/she must notify the

supervisor as far in advance as possible but no later than one-half (½) hour after normal

starting time. Work will continue until quitting time, or if on a shift assignment, until

relieved or dismissed by the supervisor. Tardiness or absences shall be handled by the

supervisor.

Conduct

While management makes no pretense of controlling an employee’s conduct

when not at work, his/her conduct and reputation “off the job” affects the public image of

the cooperative. To this extent, employees’ conduct will be taken into consideration.

Every effort shall be made to create a good public image of the cooperative through the

media of clean work clothes, clean facilities and equipment, and “off-work” behavior of

employees. A pleasant, friendly, and courteous greeting whether 30 in personal contact

or on the telephone, will go a long way in creating a good public image of the

cooperative plus a good public image of oneself. The employee should at all times be

supportive of the cooperative goals and strategies as well as fellow employees. The

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employee should offer constructive suggestions to his/her supervisor to improve the

cooperative’s goals, strategies, and other employees to better serve the cooperative’s

patrons.

Discrimination

The association will not discriminate against hiring of any applicant or the

employment of any person because of race, color, national origin, sex, age, handicap, or

religion.

Employee Meetings

Employees will be requested to attend periodic employee meetings scheduled by

management. This provides an opportunity to inform employees of company policies,

cooperative information and training, and will provide the employee an opportunity to

express his or her views and make contributions for improvements.

Employee Orientation

Each new employees will be thoroughly briefed on the employee policy

handbook and will the personnel handbook. The personnel handbook shall contain a

copy of the employee’s job description, organizational chart for the cooperative, and

his/her reporting relationships.

Employee Training

The cooperative encourages employee training through special training sessions,

correspondence courses and regular classroom instruction. Approval of the course

selected must be obtained from the supervisor. Cost of courses that are particularly

beneficial to both the cooperative and the employee will be paid by the cooperative.

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Where sufficient interest is shown, classes in job training will be held available for

interested employees.

Holidays

The following holidays will be observed: New Year’s Day, Maundy Thursday,

Good Friday, The Day of Valor, Labor Day, Independence Day, National Heroes Day,

Bonifacio Holiday, Christmas Day, and Rizal Day. Employees shall be paid their normal

salaries.

Sick Leave

An employee is entitled to take sick leave during those periods incapacitated

from performing duties by reason of sickness, off the job injury or for medical, surgical,

dental, eye examination or treatment, or where the employee’s presence at their post of

duty might jeopardize the health of others. Employees accrue sick leave benefits. A

maximum of () working days may be accumulated. The employee shall be paid at the

normal rate of pay for the actual time absent from work up to the extent of the sick leave

accrued. No employee shall be paid in lieu of accrued sick leave.

Work Breaks

Where practicable, employees will be granted one (1) hour break during lunch.

Employees will be expected to maintain work break schedules and be prompt in

resuming work. Breaks will be staggered so work areas are attended at all times. At no

time shall a member or cooperative customer be made to wait while an employee is on

break. Abuse of breaks may result in loss of this privilege.

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Work Clothing

All employees are required to come to work in proper attire, clean and neat in

appearance.

II. Product

1. ESTABLISHMENT

1.1 Location

The establishment shall be located in an area with no adverse impact to the

communities. Visual inspection of surrounding environment and/ or check preventive

measures against pollution. The establishment shall not be located in an area that may

cause contamination to rice products. Visual inspection of surrounding environment and

check preventive measures against product contamination.

1.2 Building and Operating

1.2.1 Storage Areas for Paddy and Rice Products

For normal storage:

Designated areas for each product shall be provided separately in

order to prevent the mix-ups and contamination.

Building structure shall be strong, easy to clean and maintain.

Storage areas shall be able to prevent the entry of pests and

disease carrier animals.

Storage areas shall be able to protect against moisture.

Adequate ventilation shall be provided.

Check storage areas, structure, and control measures against

pests, disease carrier animals and moisture.

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 1.2.2 Areas Assigned for Padding Cleaning, Dehusking, Polishing Grading and

Rice Product Packing

Areas shall be designed to have adequate working spaces and

clearly separated from one another which are able to prevent

contamination from pests and disease carrier animals. Check the layout

of the building and operating areas. Building structure shall be strong,

made of durable materials, easy to clean and maintain. Check building

structure and operating areas.

1.3 Equipment, Machinery and Utensils

Specifications, types and sizes of equipment, machinery and utensils

used in the production shall be appropriate for production capacity. Check

equipment, machinery and utensils and/or interview the operators. Equipment,

machinery and utensils shall be strong, durable and made of appropriate

materials that do not cause contamination harmful to the consumer and shed any

particulate matter to rice products. Check equipment, machinery and utensils and

check preventive measures against contamination. Equipment, machinery and

utensils shall be regularly cleaned and maintained. Check the work plan and

operations. The equipment, machinery and utensils shall be checked for

accuracy before use. Check the test records of equipment, machinery and

utensils.

1.4 Facilities

Adequate ventilation shall be provided in the production area. Check

ventilation in the production area. Adequate lighting shall be provided in the

quality control areas where the quality is visually inspected. Check the light

intensity. Water used in the rice polishing process shall be sufficient and meet

the standards of potable water. Check records of analytical results of water

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 quality used in rice polishing process. Adequate number of cleaning facilities

shall be provided and ready for use. Check availability and sufficiency of cleaning

facilities. Adequate systems and facilities for drainage and waste disposal shall

be provided. Check systems or facilities for drainage and waste disposal and

records of waste disposal. Adequate facilities for personal hygiene and toilets

shall be provided. Check necessary personal hygiene facilities and toilets.

Hazardous substances shall be stored in a secure and separated area. Check

chemical storage area and practices.

2. Control of Operation

2.1 Paddy Receiving

Paddy to be received shall be from known sources of production which

can be traced. Check records of paddy receiving and operation and/ or interview.

Clear criteria for purchasing paddy shall be established and implemented. Check

the purchasing operation and records of paddy quality inspection and/or

interview. The accuracy of equipment used for paddy quality inspection shall be

checked according to the manual. Check records of the accuracy of equipment

used for paddy quality inspection. Weighing equipment, and paddy moisture

meters shall be calibrated at least once a year. Check report of calibration.

2.2 Paddy Storage

Paddy shall be stored according to the duration for safe storage and

moisture content. Check the stored paddy and randomly check the moisture

content. Adequate ventilation shall be provided. Check the paddy storage area

and record of operation. Circulation of paddy shall be properly controlled to

ensure that there is no quality deterioration of paddy leftover. Check the

operation and the record.

2.3 Dehusking, Polishing and Grading

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 Specific systems or preventive measures shall be provided for the control

and elimination of dust generated during the production processes. Check the

environment both inside and outside the production area as well as the

performance of dust control and elimination system. Dehusker, polisher, grader,

color sorter, stone and metal debris separators shall be calibrated at least once a

year. Check the record of equipment calibration. Supervisors shall pass specific

training. Check records of specific training and/or interview supervisors.

2.4 Packing of Rice Products

Conveyors and rice packing machines shall be prevented from

contamination of dust and other objectionable substances like debris of metal,

glass, plastic, or chemicals. Check the operations and preventive measures

against contamination. Clean rice containers shall be provided, ready for use and

non-defective. Do not use the containers that have been used for hazardous

substances. Check rice containers and check the record of rice container quality

inspection. Weighing equipment and rice packing machines shall be calibrated at

least once a year. Check records of such equipment calibration.

2.5 Storage of Rice Products

Stacks of rice products shall be neatly and orderly arranged according to

their categories and clearly indicated. Check storing practices and storage area.

Rice products shall not be stored with pesticides, fertilizers or other chemicals

harmful for consumption. Check storing practices and storage area. Rice

products shall not be directly placed or piled up on the floor. Check storing

practices.

2.6 Transportation

Vehicles used for transporting rice products shall be clean, tightly closed

or able to prevent the products from rain, and should not be used for loading soil,

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 animals and waste, fertilizers, chemicals or pesticides except that the effective

cleaning is properly done before use.

2.7 Record Keeping

The following information shall be recorded:

General information of rice mill owner.

Paddy receiving

Quality grading of rice products

Cleaning and maintenance

Quality parameters to be monitored

Performance test of machinery

Validation and calibration of equipment, machinery and utensils

Control and prevention of disease carrier animals.

Storage of paddy and rice products.

Transportation of rice products.

Historical records of personnel, training and annual medical examination.

Review records.

3. Maintenance and Sanitation

3.1 Cleaning and Maintenance

Cleaning and maintenance of buildings and areas including equipment,

machinery and utensils shall be regularly practiced. Check the cleaning and

maintenance programs and their records.

3.2 Controls of Insects

Effective methods for prevention of insects and disease carrier animals

shall be provided to prevent the contamination to rice products. Check the control

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 programs and records, particularly for paddy drying ground and storage of paddy

and rice products as well as rice packing area.

3.3 Disposal of Waste Unused or Unrelated Materials

Unqualified rice products shall be stored separately in order to prevent

the mix-ups to the qualified rice products. Check the storage areas, record of

operations and/or interview. Rubbish and waste shall be immediately removed

from production area and disposed hygienically. Check the storage areas, record

of operations and/or interview. Unused equipment, machinery and utensils shall

be removed from production area. Check operating area and/or interview.

3.4 Personal Hygiene

Personnel and visitors who are allowed to enter production area shall

adhere strictly to the personal hygienic practices. Check the personal hygiene

instruction of the manufacturer and the personal hygiene of on duty personnel

and visitors and/or interview.

3.5 Training

Relevant personnel shall be trained on good hygienic practices and food

safety. Check the training program and the record of training and/or interview.

Machinery and quality control supervisors and personnel working in a product

quality control laboratory shall be trained according to the duties and

responsibility. Check the training program and the historical records of personnel

and/or interview.

III. Collections

All sales are on cash. The cash from sales are received as the transaction occurs.

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IV. Finances

Notes Payable

The board instructs the manager to ensure that all moneys owed are paid on a

timely basis to avoid service charges, interest penalties, and or delinquent notices.

Where applicable, bills are to be paid, if cash flow and credit limits allow, in time to

receive any discounts for early payment.

Annual Financial Audit

The board of directors shall engage the services of a Certified Public

Accountant/Public Accountant/ for the purpose of auditing the financial records and

accounts of the cooperative at the end of each calendar year. The engaged accountant

shall be instructed to prepare an/Unqualified Opinion /Qualified Opinion/ audit of the

financial records. The final prepared audit shall include, but not be limited to: a balance

sheet, statement of operations, source and use of funds, and the necessary

supplementary schedules. Upon completion of the audit, a full report shall be presented

to a majority of the board in an official directors’ meeting. The accountant’s reports must

be approved or rejected by official board action, and made a part of the board’s minutes.

Annual Operating Budget

The manager shall prepare or cause to be prepared an annual operating budget

for board consideration. The preliminary budget should be presented to the board not

later than the month prior to the beginning of the next calendar year. The final budget

shall be approved by the board of directors by days after completion of the past calendar

year’ audit. Management shall operate the cooperative as far as practical within the

budget as adopted. Management is responsible for developing long-range plans for

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review and approval by the board, which will provide for orderly growth, maintain

financial stability, and meet the needs of members served by the cooperative. It is an

advantage to have the final budget projections and pro forma statements based on the

previous year’s calendar audited figures.

Expenditures for Facilities, Machinery, and Equipment

The general manager shall obtain approval from the board for purchases or

leases of new or replacement facilities, machinery, or equipment. In emergencies, where

replacement of an asset is needed before a general board meeting can be held, the

manager may obtain approval by contacting the board committee by phone and having

individuals indicate approval. In this situation, the committee shall have the approval

ratified at the next board meeting and included in the minutes of the meeting.

Expenditures for Supplies and Services

The board must approve expenditures for operational supplies and services.

Code of Ethics

1. Each member of the cooperative shall perform his duties and responsibilities with

utmost honesty, dedication, and sincerity.

2. Each member shall, by all means, uphold and protect the interest and welfare of

the cooperative.

3. He shall avoid any activity that will create a conflict with the objective, vision, or

mission of the cooperative.

4. The board of directors shall protect the funds against overspending, or any

unauthorized disbursements.

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 5. The board of directors shall timely report to its members the true financial

condition, operations, and services of the cooperative.

6. Each member shall actively participate in all dealings and transactions of the

cooperative.

7. Each member shall practice courtesy at all times in dealing with his co-members,

officers, directors, or the public.

8. Each member shall respect and support the judgment of the cooperative as it is

agreed by the majority of the members.

9. Each member shall use the utmost of professional judgment and discretion in

discussing confidential actions, policies, or issues of the cooperative to the

general public.

10. Each member shall recognize, at all times that he projects an image as a

representative of the cooperative and shall conduct himself in a professional

manner which fosters positively on the cooperative.

Project Schedule

Table 39
Project Schedule

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Internal Controls

1. Members of the cooperative are given training to improve the cooperative's

operations and services.

2. Policies on collection is strictly followed.

3. Reports are regularly prepared and submitted.

4. Reports are presented to the cooperative’s members during meetings.

5. Maintenance of physical facilities and equipment is in place.

6. Designated personnel checks the incoming and outgoing inventories.

7. Appropriate receipts are issued for each transaction.

8. All transactions are properly recorded in the books.

9. All documents are adequately secured.

10. Only the authorized personnel should have access to the storage room.

11. The storage room is adequately secured.

12. Pricing policy is regularly evaluated and adjusted, if necessary.

13. The treasurer/cashier or any other employees who handle cash should not be

assigned to handle the books.

14. The treasurer/cashier prepares a collection report covering all collections

during the day.

15. Invoices are checked for accuracy before payment.

16. Schedule of payables is periodically prepared.

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Labor Laws for Employees

Worker’s Statutory Benefits

1.) Minimum Wage - Republic Act No. 6727 (also known as the “Wage

Rationalization Act”) mandates the fixing of the statutory minimum wages

applicable to different sectors, namely, Non-Agricultural, Agricultural Plantation

and Non-Plantation, Cottage/Handicraft, and Retail/Service, depending on the

number of workers or capitalization or annual gross sales in some sectors. The

said law rationalized wage determination by establishing the mechanism and

proper standards through the creation of Regional Tripartite Wages and

Productivity Boards authorized to determine the wage rates in the different

regions based on establishing criteria. Existing Regional Wag Orders prescribe

the daily minimum basic wage rates per industry per locality within the region, in

some instances depending on the number of workers and the capitalization of

enterprises. The Wage Orders likewise provide the basis and procedure for

exemption from compliance. Some Wage Orders grant allowances instead of

wage increase.

2.) Holiday Pay (Art. 94) - refers to the payment of the regular daily wage for any

unworked regular holiday. Every employee covered by the Holiday Pay Rule is

entitled to his/her daily basic wage and ECOLA. This means that the employee is

entitled to at least 100% of his/her basic wage even he/she is present or is on

leave of absence with pay on the work. Provided he/she is present or is on leave

of absence with pay on the work day immediately preceding the holiday. When a

Regular Holiday falls on a Sunday, the following Monday shall not be a holiday,

unless a proclamation is issued declaring it a special day.

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 3.) Premium Pay (Art. 91-93) - refers to the additional compensation for work

performed within eight (8) hours on non-work days, such as rest days and special

holidays.

4.) Overtime Pay (Art. 87) - refers to the additional compensation for work performed

beyond eight (8) hours a day.

Taxes

Income taxes for cooperative is provided in Republic Act 9520 entitled “Philippine

Cooperative Code of the Philippines”:

ART 61. Tax and Other Exemptions. Cooperatives transacting business with both

members and non-members shall not be subjected to tax on their transactions with

members. In relation to this, the transactions of members with the cooperative shall

not be subject to any taxes and fees, including not limited to final taxes on members'

deposits and documentary tax. Notwithstanding the provisions of any law or

regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy

the following tax exemptions:

“(1) Cooperatives with accumulated reserves and undivided net savings of not more

than Ten million pesos (P10,000,000.00) shall be exempt from all national, city,

provincial, municipal or barangay taxes of whatever name and nature. Such

cooperatives shall be exempt from customs duties, advance sales or compensating

taxes on their importation of machineries, equipment and spare parts used by them

and which are not available locally a certified by the department of trade and industry

(DTI). All tax free importations shall not be sold nor the beneficial ownership thereof

be transferred to any person until after five (5) years, otherwise, the cooperative and

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the transferee or assignee shall be solidarily liable to pay twice the amount of the

imposed tax and / or duties.

(2) Cooperatives with accumulated reserves and divided net savings of more than

Ten million pesos (P10,000,000.00) shall fee the following taxes at the full rate:

(a) Income Tax - On the amount allocated for interest on capitals: Provided, That

the same tax is not consequently imposed on interest individually received by

members: Provided, further, That cooperatives regardless of classification, are

exempt income tax from the date of registration with the Authority;

(b) Value-Added Tax On transactions with non-members: Provided, however,

That cooperatives duly registered with the Authority; are exempt from the

payment of value-added tax; subject to Sec. 109, sub-sections L, M and N of

Republic Act No. 9337, the National Internal Revenue Code, as amended:

Provided, That the exempt transaction under Sec. 109 (L) shall include sales

made by cooperatives duly registered with the Authority organized and operated

by its member to undertake the production and processing of raw materials or of

goods produced by its members into finished or process products for sale by the

cooperative to its members and non-members: Provided, further, That any

processed product or its derivative arising from the raw materials produced by its

members, sold in the name and for the account of the cooperative: Provided ,

finally, That at least twenty-five per centum (25%) of the net income of the

cooperatives is returned to the members in the form of interest and/or patronage

refunds;

(c) All other taxes unless otherwise provided herein; and

(d) Donations to charitable, research and educational institutions and

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 reinvestment to socioeconomic projects within the area of operation of the

cooperative may be tax deductible.

(3) All cooperatives, regardless of the amount of accumulated reserves and

undivided net savings shall be exempt from payment of local taxes and taxes on

transactions with banks and insurance companies: Provided, That all sales or

services rendered for non-members shall be subject to the applicable percentage

taxes sales made by producers, marketing or service cooperatives: Provided further,

That nothing in this article shall preclude the examination of the books of accounts or

other accounting records of the cooperative by duly authorized internal revenue

officers for internal revenue tax purposes only, after previous authorization by the

Authority.”

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