DAARBMCO BUSINESS PLAN

Business Projects : I. Cavendish Production

II. Consumer Store
III. Buying and Selling of Palay, Cardava &
Coconuts
IV. Rice and Corn Mill

Proponent/Owner : DAARBMCO
Business Address : P-12, Doña Andrea, Asuncion, Davao del
Norte

Contact No. : +63 919 856 6620

Project/Business Status : I. Cavendish Production (existing)

II. Consumer Store - Existing
III. Buying and Selling of Palay, Cardava &
Coconuts (New)
IV. Rice and Corn Mill – existing

PROJECT OBJECTIVE

1. To manage the existing business project of the cooperative in order to

generate revenues for its continued operations and for payment of long-term
maturing obligations.

2. To engage in new projects for additional sources of revenues.

3. To define, prescribe and provide for specific actions and strategies that the
cooperative shall undertake to ensure the management of each business
project, strengthen sales and collection of its accounts.

4. To strengthen the credit and collection policy of the cooperative.

BACKGROUND

DOÑA ANDREA AGRARIAN REFORM BENEFICIARIES MULTI-

PURPOSE COOPERATIVE (DAARBMCO) is registered with Cooperative
Development Authority (CDA) under Registration No. 9520-11008893, as primary
agrarian reform beneficiaries’ multi-purpose cooperative in accordance with the
provisions of Republic Act No. 9520, otherwise known as the Philippine
Cooperative Code of 2008. The cooperative is presently engaged in generating
funds in order to extend credit to members for productive and providential
purposes, providing goods and services and other requirements of the members
and promoting the Cooperative as a way of life for improving the social and
economic well-being of its members.

1|D AA R B M C O B U S I N E S S P L AN
 This cooperative has existing unpaid and matured loan obligation from Land
Bank of the Philippines with a balance amounting to Twenty four million four
hundred eighty thousand nine hundred three & 31/100 (P 24,480,903.31)
inclusive of interest and penalties, secured by the following Promissory Notes, to
wit:

1. PN Nos. 93-R0003
2. PN Nos. 92-135-CI
3. PN Nos. 92-022-CI
4. PN Nos. 96-053-CI
5. PN Nos. 92-RC022
6. PN Nos. 96-CI071
7. PN Nos. 96-R00071
8. PN Nos. 96-R0051-53

However, the cooperative cannot fully pay the entire loan obligation without
ceasing its operations and liquidating its entire assets to the prejudice of its
members. Hence, through a General Assembly Resolution No. 001 s. 2018, the
cooperative come to a resolution proposing for the restructure of the loan
agreements secured by the above-mentioned promissory notes by foregoing the
penalties, interest due, deferred interest, and capitalized interest, as of
December 31, 2017, amounting to P4,745,915.97, P6,502,218.95,
P2,976,864.76, and P3,313,690.56, respectively.

Furthermore, the cooperative proposes to pay the principal due amounting to

P6,942,213.07 within 30 years from approval of this proposal or restructured
agreement with amortizations of P60,000.00 per quarter or P240,000.00 per
year.

In order to sustain the payment scheme proposed by the cooperative, this

business plan is laid down to generate revenues to support the ordinary
operations of the cooperative as well as to help the cooperative in meeting its
financial obligations.

AREA COVERAGE OF THE COOPERATIVE

a. Doña Andrea
b. Poblacion, Asuncion
c. Buclad
d. San Vicente
e. Sagayen
f. Napungas
g. New Santiago
h. Concepcion
i. Igangon
j. Pamacaun
k. Sta. Felomina
l. New Corella

2|D AA R B M C O B U S I N E S S P L AN
PROPOSED BUSINESS PROJECTS

I. BUYING & SELLING OF PALAY, CARDAVA AND COCONUT

This is a new business project that will be engaged by the cooperative. The
fund for this project will be taken out of its Government Grants from
Department of Labor and Employment (DOLE). However, this is still under
process but for projection purposes this project is presented to give the Land
Bank an overview of the future project of the cooperative that will help
increase revenues and ensure payment of liabilities.

A. Pricing Scheme

There are two (2) cropping per year and the cooperative has 50 hectares
of Riceland. The cooperative has the following estimates:

No. of bags per cropping: 2,375 bags

No. of Kilograms per bag: 60 kilograms
Total No. of kilograms per cropping: 142,500
Estimated 5% allowance per bag

ITEM UNIT COST MARK- SELLING %

UP PRICE
Masipag/Tonner P18/kg P1/kg P19/kg 25%
Ordinary Palay P17.50/kg P1/kg P18.5/kg 25%
RC 160 P20/kg P1/kg P21/kg 50%

No. of bags per cropping 2,375 bags

x 2 croppings per year 2
Total No. of bags annually 4,750 bags
x No. of kilograms per bag 60 kgs.
Total No. of kilograms 285,000

B. Projected Sales, Cost of Sales & Gross Profit

Total No. of Kilograms 285,000 95% 270,750 Projected Sales

Masipag/Tonner 71,250 67,687 P19/kg P1,286,053.00
Ordinary Palay 71,250 67,687 P18.5/kg 1,252,209.50
RC 160 142,500 135,375 P21/kg 2,842,875.00
Total Projected Sales for Palay Trading P5,381,137.50
Less: Cost of Sales
Masipag/Tonner (67,687 x P 18) 1,218,366.00
Ordinary Palay (67,687 x 17.50) 1,184,522.50
RC 160 (135,375 x 20) 2,707,500.00
Gross Profit P 270,749.00

3|D AA R B M C O B U S I N E S S P L AN
 I. Others

ITEM UNIT MARK-UP SELLING No. of Projected

COST PRICE kgs sold weekly
per sales
week
Banana P7/kg P2/kg P9/kg 100 P900.00
Cardava
Coconuts P5/kg P1/kg P6/kg 100 P600.00

Income Projections

Sales
Banana Cardava P 43,200.00
Coconuts 28,800.00
Total Annual Sales P 72,000.00
Less: Cost of Sales
Banana Cardava P 33,600.00
Coconuts 24,000.00
Gross Profit P 14,400.00

II. RICE & CORN MILL

The Rice and Corn Mill is an existing business project of the cooperative,
however, this was rented to Edgar Abundo. The lease contract will expire on
June 2, 2019. After the lease agreement, the cooperative will resume its
operations.

INCOME PROJECTIONS

The Audited Financial Statement of DAARBMCO for the Year Ended

December 31, 2017 shows the following Financial Operations per Business
Project:

I. CAVENDISH PRODUCTION

Particulars 2017 2016

Cavendish Income P 702,956.98 P 244,334.07

From Year 2016, there is increase in income from Cavendish Project by

P458,622.91 which is 187.70% higher than the previous year. With the
continued operations of the Cavendish Project, it is estimated to generate
more income for the Year 2018 and the succeeding years. Hence, the Board
of Directors targeted to increase its Sales by at least 30%.

Income Projection for 2018 and 2019:

Particulars 2019 2018

Cavendish Income P 1,187,997.30 P 913,844.07

4|D AA R B M C O B U S I N E S S P L AN
 I. CONSUMER OPERATIONS

Particulars 2017 2016

Sales P 852,373.02 P 864,548.08
Less: Cost of Sales
Inventory, Beg 39,951.28 34,335.97
Add: Purchases 749,238.10 750,889.55
Freight-In 9,851.00 11,757.00
Total Goods Available for Sale 799,040.38 796,982.52
Less: Inventory, End 27,653.76 39,951.28
Total Cost of Sales 771,653.76 757,031.24
Income from Consumer P 80,719.26 P 107,516.84
Operations

Taken from the above results of the consumer operations of the cooperative,
the following ratios are given:

2017 Cost of Sales/Sales = 771,653.76/852,373.02 = 90.53%

2016 Cost of Sales/Sales = 757,031.24/864,548.08 = 87.56%
Average COS Ratio = 90.53%/87.56% = 89.05%

Inventory End – 5% of Sales

COS is expected to increase by 10% annually.

Income Projection in the Year 2018 and 2019:

Particulars 2019 2018

Sales P 1,031,371.35 P937,610.3
2
Less: Cost of Sales
Inventory, Beg 46,880.52 39,951.28
Add: Purchases, including 923,124.24 841,871.23
Freight
Total Goods Available for Sale 970,004.76 881,822.51
Less: Inventory, End 51,568.57 46,880.52
Total Cost of Sales 918,436.19 834,941.99
Income from Consumer P 112,935.16 P 102,668.33
Operations

II. BUYING & SELLING OF PALAY, CARDAVA & COCONUTS

(See Proposed Business Projects)

III. RICE & CORN MILL

Income:

Item No. of Kilograms Price per Kg Monthly Income

Rice Mill 10,000 2 P20,000.00
Corn Mill 10,000 3 30,000.00
Total P50,000.00

5|D AA R B M C O B U S I N E S S P L AN
 Expenses:

Particulars Monthly Expense

Fuel 400 ltrs @ 46/liter P18,400.00
Repairs/Maintenance 16,000.00
Operator 30% of net income 4,680.00
Total P 39,080.00

Gross Profit from this project (P10,920 x 7 mos) P 76,440.00

A. Administrative Expense

Particulars 2017 2016

Salaries & Wages 221,126.00 230,542.00
Cavendish Expense 405,149.88 0.00
Light, Power & Water 15,292.73 13,086.11
SSS/PHIC/HDMF 44,667.40 23,505.00
Transportation 10,399.00 34,859.00
Gas, Oil & Lubricant
Professional Fee 10,000.00 7,000.00
Taxes, Fees & Charges 30,312.39 121,551.99
Insurance 6,939.76 11,646.67
Meetings & 3,004.10 7,040.50
Conferences
Repairs & Maintenance 955.00 3,452.00
Miscellaneous Expense 1,680.50 28,823.50
General Assembly 6,117.00 6,238.00
Expense
Trainings & Seminars 1,880.00 14,602.00
Communication 325.00 834.00
Inventory Expense 11,680.50
Social Community 200.00 8,156.50
Service Expense
Photocopy Expense 771.00 0.00
Total Administrative P857,789.15 P623,528.71
Cost

Estimated Administrative Cost shall increase by 10% annually.

ORGANIZATION AND MANAGEMENT PLAN

6|D AA R B M C O B U S I N E S S P L AN
 DAARBMCO is a primary agrarian reform beneficiaries’ multi-purpose
cooperative registered with the Cooperative Development Authority.

A. Organizational Structure

General
Assembly

Gender & Audit & Conciliation &

Education Election Board of Credit
Development Inventory Mediation
Committee Committee Directors Committee
Committee Committee Committee

Management
Treasurer Secretary
Staff

Manager

Cashier Loan In-Charge Bookkeeper Driver Helper Laborer

B. Duties and Responsibilities

Position Duties and Responsibilities
Manager He is responsible for the implementation of policies,
rules and regulations of the Cooperative. He
represents the Management Staff of the Cooperative
and directs its day to day operations. He
recommends strategies and other activities
necessary for the growth and development of the
Cooperative.
Treasurer Responsible for cooperative liquidity, investments,
and risk management related to the cooperative’s
financial activities.
Cashier Responsible for the receipt of payment by cash and
checks; Issues receipts, refunds, credits or change
due to customers; count money in cash drawers at
the beginning of shifts to ensure that amounts are
correct and that there is adequate change.
Bookkeeper Develops system to account for financial transactions
by establishing a chart of accounts prescribed by the
Cooperative Development Authority (CDA), defining
bookkeeping policies and procedures, maintains
subsidiary accounts by verifying, allocating and
posting transactions, balances subsidiary accounts
by reconciling entries.
Loan In-Charge Evaluate, authorize or recommend approval of credit
loans, advise borrowers on financial status and
methods of payments.
Driver Responsible for ensuring timely delivery of goods to

7|D AA R B M C O B U S I N E S S P L AN
 predetermined customers on specific routes,
reviewing orders prior to delivery, loading and
unloading trucks and providing exceptional customer
service to our members; repairs and maintains the
vehicles of the cooperative.
Truck Helper Assists Truck Driver in the loading and unloading of
goods, repairs and maintenance, and such other
tasks necessary for the delivery of goods.
Laborer Assigned in the Banana Cavendish Plantation of the
cooperative and primarily responsible for the deleaf,
flowering, bagging, bud injection, fertilizer
broadcasting, ground spraying, weed spraying,
harvesting and such other tasks necessary for the
management and maintenance of the Cavendish
Plantation.

FINANCIAL PLAN

I. INCOME STATEMENT

2019 2018
REVENUES
Cavendish P 1,187,997.30 P 913,844.07

Consumer Operations 112,935. 102,66

16 8.33
Rice & Corn Mill 76,440.00
TOTAL P 1,377,372.46 P 1,016,512.40
Less: Operating Expenses
Administrative Expense 1,037,924.87 943,568.07
TOTAL OPERATING EXP 1,037,924.87 943,568.
07
NET SAVINGS P 339,447.59 P 72,944.33

It is estimated that 20% of Revenues on Cavendish and Consumer

operations are on account.
2018 = P 203,302.48
2019 = P 260,186.49

II. CASH FLOW STATEMENT

2019 2018
Cash Flow from Operating
Activities
Net Savings 339,447.59 72,944.33
Adjustments (Depreciation) 33,672.04 33,672.04
Changes in Assets and
Liabilities:
*Loans & Receivables (2,884.62) 56,841.458
Inventories (4,688.05) (19,493.90)
Loans Payable – Landbank (240,000.00)
Net Cash Provided (Used) In 125,546.96 143,963.93

8|D AA R B M C O B U S I N E S S P L AN
Operating Activities
Cash Flow from Investing 0.00 0.00
Activities
Cash Flow from Financing 0.00 0.00
Activities
NET CASH FLOWS 125,546.96 143,963.93
Cash Balance-Beg 478,467.01 334,503.08
Cash Balance-End 604,013.97 478,467.01

*The Cooperative will employ collection strategies to collect its past due
Production Loan – Receivables and other receivables. The cooperative targets to
collect at least 5% every year to increase the Cash Balance for payment of loan
obligations to Landbank.

The following are data taken from the Audited Financial Statements:
2017
Total Loans & Other Receivables P 5,202,878.76

The basis for the above data and computations are taken from the Audited
Financial Statement of DAARBMCO for the Years Ended December 31, 2017
and 2016. A careful study and scrutiny of the nature of the business and the facts
and circumstances surrounding the day to day, monthly and annual operations of
the cooperative was conducted in order to ensure the accomplishment of this
plan.

In addition to the income generating activities, the cooperative will conduct

membership seminars to encourage young farmers to join the cooperative.
However, the fact that most of its members are senior citizens, the ownership of
the stocks can be continued by the member’s heirs and legal representatives.
Consequently, DAARBMCO’s operations will not be affected. It will ensure the
proper management and maintenance of its facilities, and continued
improvement of its services to the members.

With this Business Plan and Income Projections, the cooperative will be able
to settle all its existing past due obligations in accordance with the payment
scheme herein proposed.

June 25, 2018, Doña Andrea, Asuncion, Davao del Norte.

Luzinda L. Piezas Lucio B. Baño, Jr.

Bookkeeper Manager

APPROVED:

ALFREDO REMOROSA
President, DAARBMCO

9|D AA R B M C O B U S I N E S S P L AN