2011 R - 017 - APPROVING THE FISCAL YEAR 2010 FINANCIAL STATEMENTS AND ORDERING THE COMPUTATION AND DISTRIBUTION OF DIVIDENDS BASED THEREON

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 19 April 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011 - 017

APPROVING THE FISCAL YEAR 2010 FINANCIAL STATEMENTS AND ORDERING THE COMPUTATION AND DISTRIBUTION OF DIVIDENDS BASED THEREON

WHEREAS, the OCGEMPC External Auditor has presented to the Board her audit report of the OCGEMPC financial statements for fiscal year 2010 and the Board has reviewed the same audited financial statements;

NOW THEREFORE, upon motion of Director Julie U. Reyes and seconded by Director Genia R. Eclarino , the OCGEMPC Board of Directors in session assembled:

RESOLVE AS IT IS HEREBY RESOLVED, to, as it hereby approves the audited financial statements for fiscal year 2010;

RESOLVED FURTHER, to, as it hereby instructs management to compute for dividends based on the said audited financial statements and present said computations for Board review and approval;

RESOLVED FINALLY, that dividends earned in year 2010 be distributed starting in the first week of May 2011.

Done this 19th day of April 2011.

2011 R - 016 - APPROVING THE OCGEMPCI REVENUE AND EXPENDITURE BUDGETS FOR FISCAL YEAR 2011

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 18 April 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011 - 016

APPROVING THE OCGEMPCI REVENUE AND EXPENDITURE BUDGETS FOR FISCAL YEAR 2011

WHEREAS, the OCGEMPC Board has reviewed the Fiscal Year 2011 Revenue and Expenditure Budgets proposed by management;

NOW THEREFORE, upon motion of Director Julie U. Reyes and second motion of Director Jerico C. Ballon, the Board of Directors of the OCGEMPC, in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED, to approve, as it hereby approves the OCGEMPC Revenue and Expenditure Budgets for fiscal year 2011;

RESOLVED FURTHER, that signed copies of the herein approved budgets be attached hereto and be made part this resolution;

RESOLVED FURTHERMORE, that this resolution and its attached copy of the 2011 Budgetsbe presented for approval in the General Assembly to be held on 20 April 2011.

Done this 18th day of April 2011.

2011 R - 013 - SETTING THE PRICE OF, AND ORDERING THE SALE OF INOS COOKWARE SETS

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 18 April 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011-013

SETTING THE PRICE OF, AND ORDERING THE SALE OF INOS COOKWARE SETS

WHEREAS, the OCGEMPC has failed to profitably dispose several pieces of Inos cookware sets which have been in its merchandise inventory for more than three years, and many of these cookware sets have just been given away for free to the members during the past general assemblies of the cooperative;

WHEREAS, the said cookware sets have continuously depreciated in value due to the emergence in the market of better and cheaper cookware of the same kind;

WHEREAS, the Board deems it more beneficial to the cooperative and its members, to convert these cookware sets into cash by making them available through cash sales or loans at affordable prices;

NOW THEREFORE, upon of motion of Director Beth Daduya, seconded by Director Genia Eclarino, the OCGEMPC Board of Directors in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED, to offer the Inos Cookware for cash sale or through appliance loans, at a minimum price of Seven Thousand Pesos (P7, 000.00) per set, effective immediately.

Done this 18th day of April 2011.

2011 R - 012 - UPDATING AND READJUSTING THE ACCOUNTS OF ATTY. RAYMOND DILAG

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 18 April 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011- 012

UPDATING AND READJUSTING THE ACCOUNTS OF ATTY. RAYMOND DILAG

WHEREAS, Republic Act 9520, otherwise known as “The Cooperatives Code of 2009”, reduced the allowable shares capital of each cooperative member from 20 percent to 10 percent of the cooperative’s paid up shares capital;

WHEREAS, as a result of the enactment of RA 9520, the capital shares of Atty. Raymond Dilag as of 31 December 2009 have exceeded the allowable maximum 10 percent of the OCGEMPC’s paid up shares;

NOW, THEREFORE, upon motion of Director Julie U. Reyes seconded by Genia R. Eclarino, the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED, to, as it hereby instructs the OCGEMPC management staff, particularly the Manager and Treasurer, as follows:

1. Reduce the capital shares of Atty. Raymond Dilag to conform with the maximum allowed under RA 9520 and the OCGEMPC By-Laws;

2. From the amount in excess of the shares capital, offset the outstanding balance on the secured loan of Atty. Dilag, applying thereon the OCGEMPC policy of 2 percent interest on every skipped monthly installment and 3 percent interest on the remaining balance after the maturity date of the loan;

3. The final balance shall be treated as long term time deposits;

4. All these adjustments shall be effective as of 01 January 2010.

Done this 18th day of April 2011.

2011 R - 010 - ADOPTING THE TERMS OF REFERENCE FOR THE CONDUCT OF THE INVESTIGATION OF SUSPECTED OFFENSES COMMITTED BY CERTAIN OFFICERS OF THE OCGEMPC

Excerpts from the Minutes of the Meeting of the OCGEMPC Board of Directors Held on 31 March 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011-010

ADOPTING THE TERMS OF REFERENCE FOR THE CONDUCT OF THE INVESTIGATION OF SUSPECTED OFFENSES COMMITTED BY CERTAIN OFFICERS OF THE OCGEMPC

WHEREAS, the OCGEMPC Board of Directors has decided to conduct an investigation of suspected offenses committed by certain officers of the cooperative;

WHEREAS, there is a need for the Board to adopt the terms of reference for the said investigation in order to set its limits, and ensure that it be objective, systematic and beneficial to the interest of the OCGEMPC;

NOW THEREFORE, upon motion duly made and seconded, the Board of Directors of the OCGEMPC in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED, to, as it hereby adopts the following Terms of Reference which shall take effect immediately until the investigation is officially terminated:

TERMS OF REFERENCE

FOR THE OCGEMPC BOARD OF DIRECTORS’ INVESTIGATION OF SUSPECTED OFFENSES COMMITTED BY REYNALDO ERINGCO AND AILEEN C. SANCHEZ AGAINST THE OCGEMPC

A. BACKGROUND

This investigation was triggered by the discovery, sometime in March 2011, of OCGEMPC documents showing unusually large amounts of loans amassed by, and way beyond the capacity to pay of, certain members of the cooperative. A summary review of these documents by the Board showed that as of January 2011 Reynaldo Eringco, part time staff of the OCGEMPC has a total unpaid loans balance of P990,482; Aileen C. Sanchez, Director and former Chairperson of the OCGEMPC has a total unpaid loans balance of P502,675; the latter’s sister, Anna Lucille Cuevas has a total unpaid loans balance of P136,742; and their brother Alfred Cuevas a total unpaid loans balance of P85,335. It appeared from the records that the said loans were acquired in violation of OCGEMPC policies, rules, and regulations.

In the Board meeting held on 11 March 2011 Ms. Sanchez was confronted with the above-mentioned records of her loans and those of her siblings and Reynaldo Eringco. Ms. Sanchez denied responsibility for her own loans and told the Board that she did not know she owed the Cooperative that much already. She told the Board that in fact, this was the first time she learned of the total amount of her loans. She said, “Rey Eringco buried me in loans without my knowledge.” She admitted having had some financial problems in the past and that she indeed needed loans, but that Rey Eringco had always assured her that there were still loan windows available to her.

Reynaldo Eringco, on the other hand, when confronted with the records and told of Ms. Sanchez’ statements against him, just kept silent and did not respond nor react.

Considering the gravity of the probable offenses committed, and the sensitive positions occupied by the two principals involved, the Board decided to pursue an investigation of the amassed unusual loans. The Board also decided to take this opportunity to investigate other probable major offenses committed by Ms. Aileen Sanchez, about which many members are still asking for information, but which were never investigated nor put to proper closure during the term of Ms. Sanchez as Chairperson of the OCGEMPC Board.

In the meantime, Reynaldo Eringco is placed on preventive suspension, while Ms. Sanchez voluntarily went on a leave of absence from her duties as officer of OCGEMPCI pending the investigation.

B. NATURE AND PURPOSE OF THE INVESTIGATION

This investigation is essentially a fact-finding activity or series of activities to establish the truth regarding the probable irregular transactions and offenses committed by Mr. Reynaldo Eringco and Ms. Aileen Sanchez against the OCGEMPC.

More specifically, this investigation shall be based on already existing prima facie evidence and shall aim to:

1. Establish more objectively whether offenses were actually committed

2. Determine the nature of the transactions, how offenses were committed, and establish who were responsible or liable for them

3. Draw lessons from the facts gathered in the investigation that could guide the Board in promulgating new, or revising existing policies, rules and regulations to further protect the general interest of members and improve the operations of the cooperative.

C. SCOPE OF THE INVESTIGATION

1. Subjects of the Investigation – Without prejudice to the future investigation of other possible offenses of other officers and members, this investigation shall focus only on the following probable offenses based on OCGEMPC records:

a. Unusual Loan Accounts of Reynaldo Eringco, Aileen Sanchez, Anna Lucille Cuevas and Alfred Cuevas

b. Unliquidated Cash Advances of Aileen Sanchez and Rey Eringco

c. Unauthorized Erroneous Computation and Distribution of Dividends which caused an upheaval of OCGEMPC members in year 2010.

2. Period Covered by the Investigation – As indicated in the OCGEMPC records which are the bases of this investigation, the period to be covered by this investigation shall be from year 2008 to March 2011.

D. METHODOLOGY AND PRECEDURE OF THE INVESTIGATION

1. The investigation shall be done mainly through a diligent review of OCGEMPC official documents and records concerning the corresponding transactions under investigation. This shall include, but may not be limited to, loan notes, ledgers, journals, transacted checks, books of accounts and other financial documents.

2. Face to face interviews of the principals, concerned OCGEMPC staff and other witnesses shall also be done whenever necessary to elicit pertinent information, verify records, clarify transaction procedures and crosscheck the testimony of some witnesses.

3. Whenever necessary, some of those concerned may be requested to sign affidavits.

4. The proceedings of the investigation and the facts gathered shall be thoroughly and systematically recorded for official record purposes and other future use.

E. THE INVESTIGATING BODY

1. As provided in the OCGEMPC By-Laws, the Board shall be the body to conduct this investigation. It may, however, seek the assistance of the Ethics Committee and other Committees of the OCGEMPC in the conduct of this investigation.

Done this 31st day of March 2011 at Olongapo City, Philippines.