MediCoop Constitution

The MediCoop Constitution can be downloaded in PDF format here.

Table of Contents

1. NAME


(a) The name of the Co-operative is: SA Primary Medical Primary Financial Co-operative Limited.


2. FORM OF FINANCIAL CO-OPERATIVE


(a) This is the constitution of a business undertaking formed as a Primary Savings and Loans Financial Co-operative with limited liability in terms of the provisions of the Co-operatives Act, The Co-operatives Amendment Act, the Co-operative Banks Act and regulations related thereto.


3. INTERPRETATION OF TERMS


In this constitution, unless the context indicates otherwise, a word or expression to which a meaning is attached to the Co-operative Banks Act shall have a similar meaning and -

"Audit and Supervisory Committee" means the elected audit committee which has internal audit and supervisory responsibilities as referred to in clause 25.

"Auditor" means the independent auditor, registered as such in terms of the Auditing Profession Act No 26 of 2005, appointed at a general meeting of Members in terms of clause 34 (a).

"Associate Member" means persons and entities as envisaged in clause 7 (n).

"Board" means the board of directors of the Co- operative as specified in terms of clauses 16 and 17.

"Common Bond" means persons and entities engaged in healthcare in the Republic of South Africa limited to members of registered healthcare associations, organisations and groups as specified in clause 7.

"Community Development Committee" means a sub- committee of the Board established to promote community development as contemplated in the Co- operatives Act and clauses 22 and 24.

"Co-operative" In addition to the meaning attached to in the Co-operative Act, it also refers to this Financial Co-operative to which this constitution relates.

"Co-operatives Act" means the Co-operatives Act No 14 of 2005, as amended.

"Co-operatives Amendment Act" means the Co- operatives Amendment Act No. 6 of 2013.

"Co-operative Banks Act" means the Co-operative Banks Act No 40 of 2007.

"Co-operative Financial Institution" means a co- operative financial institution as defined in the Co- operative Banks, Act, 2007 (Act No. 40 of 2007).

"Credit Committee" means the subcommittee of the Board appointed in terms of clauses 22 and 23.

"Dormant" as it relates to an account of a member with the Co-operative, means an account with a zero or negative balance that has not had any trading or service activity for an uninterrupted period of more than 180 days.

"General Manager" means the most senior person appointed by the board for the purposes of ensuring the efficient operations of the Co-operative, whose job description might refer to them as Manager, Managing Director or Administrator.

"Gender" A reference in this constitution to the masculine gender shall also include the feminine gender and vice versa.

"Governance Committee" means the subcommittee of the Board established in terms of section 12 (e) of the Co-operatives Banks Act and clause 21.

"Issue Price" means the value or price per Voluntary Share at which Voluntary Shares shall be issued to Members, being the Nominal Value plus the Share Premium.

"Mandatory Shares" means the minimum number of shares issued as a condition of membership as specified in clause 7 (f) hereof, being 1000 (one thousand) shares at R1.00 (one rand) per share.

"Member" means a member of the Co-operative by virtue of clauses 7, 9 and 10.

"Nominal Value" means the nominal value of Shares being R1.00 (one rand) per Share."Patronage Dividend" means the amounts paid to members as their respective Patronage proportion.

"Patronage points" means the points accumulated by a Member through transactions conducted by a Member with or through the Co-operative.

"Patronage Policy" means the policy of the company towards the accumulation of Patronage points for purposes of calculating Patronage proportions payable to Members as Patronage Dividends based on the usage by Members of the products and services of the Co-operative.

"Patronage proportion" means the proportion in which the patronage points balance, earned through the transactions conducted by a Member during any particular period with or through the Co-operative, bears to the value of the patronage points balance earned by all the Members during the same period with or through the Co-operative, as recommended by the Board in terms of the Patronage Policy and approved by the Members in terms of clause 17(j) hereof.

"Prudential Authority" has the meaning defines in the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017).

"Prescribed investments" means investments as prescribed by the Registrar in terms of the Co- operatives Act.

"Related Parties" means persons and entities that are also eligible to become members due to the fact that they are directly related to a member, but limited to the employees, trustees, members, directors, shareholders and associates of an entity that is a member, and the spouse, parents and children of a person that is a member; and for purposes of the maximum number of shares that a Member and Related Parties in aggregate may hold in the Share Capital of the Co-operative in terms of Clauses 28 and for purposes of related party transactions, means the persons that are directly related as the spouse, or parents or children of a Member, or in the case of a legal entity Member means the persons or entities that are defined as related parties as applicable in terms of the International Financial Reporting Standards IAS 24 as issued by the International Accounting Standards Board.

"Registrar" means the Registrar of Co-operatives appointed in terms of the Co- operatives Act.

"Special Resolution" means a resolution passed by no less than two thirds of Members voting affirmative at a duly constituted general meeting.

"Shares" means all the Mandatory Shares and Voluntary Shares.

"Share Premium" means a premium per Voluntary Share as approved or authorised by Members from time to time at an Annual General Meeting or Extraordinary Meeting. No Share Premium is applicable to Mandatory Shares.

"Supervisor" means the Prudential Authority.

"Surplus" means the net amount by which the total financial value received exceeds the total financial costs and expenditure, after allowances for provisions, depreciation, amortisation and taxation for a specified period as approved by the Board and certified by the Auditor.

"Voluntary Shares" means any number of shares in addition to the Mandatory Shares acquired by a Member in terms of clause 28 and which are subject to the Special Rules related to Voluntary Shares in terms of clause 28 (b).


4. PLACE OF BUSINESS


(a) The main place of business of the Co-operative is situated at: Office 201, 2nd Floor, Clock Tower Building, Clock Tower Precinct, Waterfront 8002, Cape Town.
(b) Any change of situation of the main place of business or the registered Co-operative shall be notified to the Registrar and to the Supervisor.


5. OBJECTIVES


(a) To promote and advance the social and economic welfare of its members by enhancing access to financial services under sustainable conditions by providing banking services in accordance with the provisions of the Co-operative Banks Act, 2007 (Act No. 40 of 2007)
(b) To encourage savings by providing a means whereby such savings may receive a competitive rate of return.
(c) To achieve a Surplus for purposes of enhancing sustainability, improve services to Members and incentivising active participation by Members through Patronage Proportion payments.
(d) To actively support the formation of support organisations and of higher tier Co-operative Banks, with the aim of enhancing support, access to capital and improved services to Members.


6. SERVICES TO MEMBERS


The Co-operative may provide the following financial services to its members and associate members, subject to directives by the Supervisor as may be applicable:

(a) Solicit and accept money, deposits, debt and savings instrument investments and donations f rom Members and Associate members, ("deposits") hereinafter;
(b) Open banking accounts (inter alia savings accounts, cheque accounts) for its members and associate members, in terms of the policies and procedures of the Co-operative as approved by the Board;
(c) Borrow money from other organisations including government agencies and banking institutions up to a percentage of the assets held by it as prescribed by the Supervisor;
(d) Open banking accounts in the name of the Co- operative with any banking institution;
(e) Grant secured and unsecured loans, provide finance, provide security, and credit to members and associate members to a maximum aggregate value prescribed by the Supervisor;
(f) Conduct any additional functions as may be prescribed by the Supervisor;
(g) Including the establishment and funding of community development organisations and special purpose limited liability legal entities by the Board for purposes of promoting the objectives of the Co-operative as stated in clause 5;
(h) Invest money from its members and associate members in prescribed investments;
(i) Provide negotiable instruments to members and associate members;
(j) Provide trust and custody services to members and associate members.


7. MEMBERSHIP


(a) Common Bond: Membership shall only be available to persons and entities, including their Related Parties, that are members of any of the following associations, organisations and groups listed below:

a. Health Professionals Council of South Africa;
b. The South African Nursing Council;
c. Pharmaceutical Society of South Africa;
d. South African Medical, Homeopathic, Physiotherapy and Psychiatrists Associations;
e. Board of Healthcare Funders and the Council for Medical Schemes;
f. South African Institute for healthcare Managers;
g. Hospital, Day Hospital and Renal Care Associations of South Africa;
h. South African Veterinary Association;
i. South African Medical Association;
j. Any further groups approved by the Supervisor.

(b) No discrimination will be allowed along the lines of race, political affiliation, gender or religion.
(c) Every applicant for Membership shall complete the prescribed "Application for Membership" form and proof of identity and affiliation in accordance with the co-operative principles.
(d) Entities, such as societies, associations, clubs, partnerships and companies comprising individuals who in their own right are eligible to become members of the Co-operative, may be admitted as members in the same manner and under the same conditions as individual members, subject to such legal entity nominating at least one natural person as the authorised representative of such Member.
(e) Should a Member resign its/his/her membership of an association, organisation or group listed in 7(a) above, the member may remain a member of the Co-operative, subject to such member conforming to all other membership requirements of the Constitution.
(f) An applicant shall be admitted to Membership on being approved by a majority vote of the board but shall not qualify for the rights and privileges of Membership until he/she has paid a Joining fee of R100 (one hundred rand) and acquired the minimum of 1000 Mandatory Shares in the Co- operative. It is noted that the Joining fee is non- refundable. The share contribution may not be withdrawn on demand and may only be withdrawn as provided for in clauses 9, 10 and 28.
(g) Every Member and Associate Member shall be entitled to receive a monthly statement which will be issued upon request and shall include transaction receipts which shall record his/her shares, deposits and loan transactions with the Co-operative. The statement shall constitute a certificate of shareholdings, unless it is proved otherwise.
(h) Every Member shall be registered on the financial co-operative's member database, with all detail provided as required by the Supervisor and recorded in the Member Share Register.
(i) In the event that the Co-operative allows for Associate Members in terms of clause 7 (m) below, a separate Associate Member register shall be kept and updated with all detail provided as required by the Supervisor.
(j) Every Member that is not a legal entity may nominate in writing one person or entity to whom, upon his/her death, his/her share(s) and any amount due to such Member shall be transferred to. The Member shall have the power to change the name of the nominee. The name shall be entered into the Member database, with the original document securely kept by the Co-operative. The Member shall sign any alteration of the nominee. If not admitted to membership, the nominee shall be paid in full the value of the shares and/or assets less any sum due from the deceased Member to the Co-operative. Such payment shall be made as soon as possible but not later than six (6) months after the death of the Member.
(k) The Co-operative, shall at all times, keep and update registers of all its members and associate members.
(l) All Members of the Co-operative should have a copy of the current constitution of the Co-operative or unrestricted access thereto.
(m) The Transfer of Membership, Member Loans and Shares shall only be allowed subject to:

1. Membership, Member Loans and Shares may be transferred at such value as agreed between the Member and Transferee, but only with the approval and on authority of the Board, which shall satisfy itself that the proposed transferee is qualified to be a member of the Co-operative and otherwise not in breach of this Constitution.
2. The Board may at any time refuse to approve and register such Transfer as per clause 7 (m) 1 above.
3. The transfer request, as envisaged per clause 7 (m) 1 above, shall be in writing in such form and signed in such a manner as the Board may stipulate from time to time.
4. Once a transfer as contemplated in this clause 7 (m) 1 has been approved by the Board, the Board shall issue to the transferee the necessary new membership and share certificates and cancel the applicable old certificates of the transferor Member.

(n) The Co-operative may, as provided for in section 14(A) of the Co-operatives Amendment Act, allow Associate members, who want to provide support to the Co-operative, or who may benefit from the Co-operative, without becoming members, provided that:

1. Associate membership is temporary for a maximum period of twelve (12) months from acceptance, within which period the Associate member may at any time apply to become a fully paid up member, and
2. Prior to expiry of twelve (12) months from becoming an associate member, Associate members may annually renew their Associate membership for a further twelve (12) months.
3. An Associate member shall have no voting rights prior to becoming a fully paid up member.
4. The Co-operative's Loan Policy shall provide for the temporary nature of Associate members and separately report the number of Associate members in its financial statements.


8. LIMITATION OF LIABILITY


The liability of a Member towards the liabilities of the Co-operative by virtue of his or her Membership shall be limited to an amount equal to the value of the Shares held by him or her and he or she is not otherwise personally liable for any of the debts of the Co- operative, except where other special circumstances exist, e.g. when explicit guarantees have been given.


9. TERMINATION OF MEMBERSHIP


(a) Membership shall cease upon

1. Death in the case of a natural person;
2. Liquidation or deregistration in the case of a juristic person;
3. Receipt by the Co-operative of voluntary termination of Membership in writing; subject to a 3-month notice period;
4. Expulsion from the Co-operative as provided for in clause 10. The expelled Member may still avail of the dispute resolution procedure outlined in clause 39.

(b) Upon termination of Membership, a Member shall be entitled to receive the full amount standing to his/her savings less the amount of any loans, interest and fines payable. Fixed term obligations shall either be repaid with accrued interest (minus penalties for early withdrawal) upon termination of Membership or be repaid upon expiry date of such fixed term obligation, by choice of the Co- operative.
(c) Shares issued to a Member whose membership has terminated, shall be cancelled and shall be repayable to that Member to the value not exceeding the issue price paid for such cancelled shares and such payment shall only be settled one year from the effective date of termination of such Shares in the share register of the Co-operative, subject to a possible further payment term extension as per clause 28 (a) 6 of this Constitution.
(d) Upon the death of a Member, his/her shares/savings will be transferred to the nominated beneficiary as entered by the Member, in terms of clause 7(j).


10. SUSPENSION/EXPULSION OF MEMBER


Members are expelled/suspended subject to the following provisions:

(a) A Member may be suspended if he/she does not comply with the Constitution, any rules of the Co-operative and/or failure to pay on due date any amounts owing by the Member to the Co- operative.
(b) A Member may be suspended whose account is dormant or who has relocated and failing to communicate the new place of residence to the Co-operative within a period of 180 days.
(c) A Suspended Member shall not have any voting rights during any period of suspension.
(d) The board, by majority vote, may recommend a Member for expulsion and may then suspend the Member and by so doing deprive him from any benefits of the Co-operative until such time as the issue is voted on at a general meeting.
(e) Prior to a decision on expulsion the Members shall be afforded an opportunity to be heard at the general meeting. If the general meeting ratifies such expulsion by a special resolution, it shall be effective from the date of suspension. If the general meeting does not ratify the expulsion by the required majority, the suspension shall be immediately removed and the Member treated as if no such suspension had been imposed.
(f) A Member expelled in terms of these provisions shall forfeit all rights to share in the surplus or other benefits of the Co-operative and Shares shall be cancelled and repaid on similar terms as specified in clause 9(c).


11. ANNUAL GENERAL MEETING (”AGM”)


The ultimate authority of the Co-operative emanates in properly convened general meetings of Members.

(a) The Co-operative must hold its first annual general meeting within eighteen ( 18 ) months of registration.
(b) Subsequent annual general meetings within six (6) months after the end of the preceding financial year and notify the Supervisor.
(c) At least twenty eight (28) days before the date of any annual or extraordinary general meeting of Members, the secretary shall provide written notice (which may be in electronic form) to each Member and must post notice of the meeting in the place of business and other noticeable places where it may be read by the Members at least twenty eight (28) days prior to such meeting.
(d) The order of business at an annual general meeting shall be:

1. Ascertainment that a quorum is present;
2. Reading and approval of the minutes of the last meeting;
3. Report of the board;
4. Report of the treasurer;
5. Report of the audit and supervisory committee;
6. The consideration/resolution of the annual financial statements, audit report and appropriation of surplus;
7. The presentation and consideration of the budget statement;
8. Election of directors and members of the audit committee;
9. Appointment of an auditor;
10. Any other business.

(e) The Members assembled at any annual general meeting may defer the above order of business upon a two third vote of the Members present at the meeting.
(f) The Minutes, the annual accounts, the report of the Board and audit committee and a statement of the number of Members at the end of year and any available documents issued pursuant to the agenda shall be displayed at the office of the Co- operative, or made available to members electronically, at least seven (7) days before the Annual General Meeting.
(g) Written resolutions to be considered at a General Meeting shall be supported by at least ten percent (10%) of Members and deposited with the Secretary not less than twenty one (21) days before the meeting and displayed at the office of the Co- operative, or made available to members electronically, prior to the meeting. Resolutions requiring the approval of the AGM and which would affect operating costs shall be accompanied by a statement from the Board as to the financial implications of such resolutions.
(h) A Resolution may be withdrawn at any time before voting commences.
(i) If a resolution to be considered at a general meeting and which has been displayed is withdrawn and the secretary notified in writing (which may be in electronic form), notice of such withdrawal shall forthwith be displayed at the office of the Co-operative.
(j) At least fourteen (14) days before the date of any annual or extraordinary general meeting of Members, the secretary shall provide a written agenda to each Member and must post the agenda in the place of business and other noticeable places where it may be read by the Members at least fourteen (14) days prior to such meeting.
(k) The Co-operative must provide reasonable access to all members to attend an annual or extraordinary general meeting by hosting the meeting at a physical location as well as by means of telephone or other electronic means in such format as the Board may determine allowing members to participate at the meeting.


12. EXTRAORDINARY MEETINGS


(a) Extraordinary general meetings may be called by the board on their own initiative and shall be called at the request of the audit committee, or upon a written petition signed by at least two thirds of Members. Notice of any extraordinary general meeting shall state the purpose for which it is to be held and no business other than that related to this purpose shall be transacted at the meeting.
(b) The audit committee may at any time request the board to summons an extraordinary general meeting in such manner and at such time and place as they may direct, and must specify what matters shall be discussed at any such meeting.


13. QUORUM


(a) A quorum for an annual or extraordinary general meeting shall be duly constituted as follows:

1. If the Co-operative membership consists of two hundred (200) or less members, by at least one tenth of members of the Co-operative; or
2. If the Co-operative consists of more than two hundred (200) members, by no less than twenty (20) members plus one percent (1%) of the number of members more than two hundred (200).

(b) If a quorum is not secured within 1 (one) hour of the opening of the general meeting, the meeting shall

1. if convened as an extra ordinary meeting in terms of 13 (a) above, be deemed to be cancelled; or
2. if otherwise convened, subsequent to an announcement to the Members, be adjourned and reconvened on the same day in the next week at the same time and place, or, if that day is a public holiday, to the next day which is not a statutory holiday; provided that no additional item shall be included on the agenda of the reconvened meeting.

(c) If no quorum is present within 1 (one) hour at a meeting reconvened in terms of 13(b)(2) the Members present, being not less than 5 (five), shall constitute a quorum. No decisions requiring a special resolution shall be taken at such a meeting.
(d) Every matter submitted to a general meeting for resolution, except for a matter requiring a special resolution, shall be determined by a majority of votes recorded at the meeting.
(e) Every matter requiring a special resolution shall be determined by a majority vote of two thirds of votes recorded at the meeting.


14. MEETING PROCEDURES


(a) The chairperson of the board, or, in his/her absence, the vice-chairperson or, in the absence of both, any other director elected during the meeting, shall act as chairperson of any annual general meeting or of an extraordinary general meeting.
(b) Minutes of all Meetings of Members shall be kept by the Secretary, and shall be entered into a Minutes Book, which shall be kept at the registered office of the Co-operative, within two (2) months of the Meeting. The Minutes shall then be submitted, in the case of Minutes of an Annual General Meeting, to the next Annual General Meeting, and, in the case of Minutes of all other General Meetings, to the next General Meeting. Such minutes shall be signed by the Chairperson and secretary of the Meeting where they were approved and shall be kept in the Minutes Book.
(c) The minutes must contain: The number and names of Members present at the meeting, the names of presiding officers and confirmation that a quorum was present; and the time, place and date of the meeting and a record of all decisions made.


15. ELECTIONS


(a) Every Member shall have only one vote.
(b) Subject to directives by the Supervisor as provided for in section 12(h)(d) of the Co-operatives Amendment Act and within the limitations set by section 28 (5) of the Co-operatives Amendment Act, voting by proxy will be allowed, provided that the number of votes by proxy at any meeting may not exceed 25% of the total membership of the Co- operative and that the number of proxies that any single member may carry on behalf of other members may not exceed five percent (5%) of the total membership of the Co-operative.
(c) A Member may attend and vote at a meeting of the Co-operative by means of telephone, mobile communication device or other electronic means in such format as the Board may determine and such members shall be deemed to be present at the meeting.
(d) At least 30 (thirty) days prior to each annual general meeting the board shall appoint a nominating committee of not less than three (3) Members. It shall be the duty of the nominating committee to nominate one or more nominees for each vacancy to be led by the elections.
(e) No Person shall hold the office of director or audit committee member if:

1. within the previous 10 years has been convicted in the Republic or elsewhere of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), an offence under the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001), or any oence involving dishonesty; or
2. has been convicted of an offence committed after the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993), took effect, and sentenced to imprisonment without the option of a ne; or
3. has contravened the provisions of any law the object of which is the protection of the public against financial loss; or
4. is a former director or executive officer of a financial co-operative or any other financial co-operative institution and that the person’s actions contributed to the inability of that financial co- operative or other financial co-operative institution to pay its debts; or
5. has taken part in any business practices that were deceitful, prejudicial, or otherwise improper (whether unlawful or not) or which otherwise brought discredit to that person’s methods of conducting business.

(f) Any member who is suspended, or is two (2) or more months in arrears on loan payments, or remains in breach of any financial covenants related to credit provided shall not qualify for nomination.
(g) It shall be the duty of the nominating committee to assure that all nominees proposed for election are Members in good standing who qualify for election in accordance with this constitution.
(h) After the nominating committee has placed before the Members the names of candidates proposed, the chairperson shall call for nominations from the oor. When nominations are closed, tellers shall be appointed by the chairperson to distribute and tally the ballots and announce the results.
(i) All elections shall be determined by plurality vote, of Members present, and shall be by ballot except where there is only one nominee for the oce.
(j) Without evidence as to the number or proportion of votes recorded for or against such resolution.
(k) If no objection is raised in terms of the provisions of this constitution against the validity of any vote cast at the meeting, whether on a show of hands or by ballot, every vote cast at the meeting that has not been disallowed shall for all purposes be deemed to be valid.
(l) Nominations shall be in the following order:

1. Nominations for directors; and
2. Nominations for the audit committee Members.

(m) In the case of an equality of votes, the chairperson shall have a casting vote


16. BOARD OF DIRECTORS


(a) All directors shall be Members of the Co-operative and must include the General Manager in an ex officio capacity with no voting rights. None of the directors, other than General Manager may be employees of the Co-operative.
(b) This board shall consist of up to fifteen (15) members. The number of voting directors may be changed to any odd number but not being fewer than nine (9) not more than fifteen (15) by resolution of the annual general meeting.
(c) The board shall endeavour to be reasonably representative of the total member prole.
(d) A majority of all the directors (50% + 1) shall constitute a quorum for any meeting of the board.
(e) All elected, appointed or co-opted officers and Members of the Board shall sign an acceptance of oce and arm that they will implement the provisions of this constitution as well as abide by a code of conduct as determined by the board, carry out their duties faithfully and treat all information submitted by Members in connection with the Co- operative transactions as confidential.
(f) Within ten (10) days after each Annual General Meeting of the co-operative, elect as officers from their own number a Chairperson, a Vice- Chairperson, a Treasurer, a secretary and one other. These persons shall form the Governance Committee and shall serve as Officers of the co-operative.
(g) Each Director may be allocated a specific functional area for which he has to accept responsibility.
(h) Directors shall hold office until the election and qualification of their successors. The regular term of office shall be three (3) years with one third (1/3) of the positions being open for election each year. At the first annual general meeting, three (3) directors shall be elected to serve for three (3) years, three (3) directors shall be elected to serve for two (2) years and three (3) directors shall be elected for one (1) year. Thereafter elections shall be for three (3) years.
(i) Board meetings shall be held at least four (4) times per financial year, with no successive meetings being more than 92 days apart.
(j) The Board may delegate functions to a director, committee or manager in terms of a Board approved delegations of authority policy.
(k) Special meetings may be called by the chairperson or in his/her absence by the vice-chairperson at any time, or upon written request of any three directors.
(m) The office of a director or credit committee member may be declared vacant by the board and the vacancy filled as herein provided if a director or a credit committee Member materially:

1. fails to attend regular meetings of the board or credit committee for more than four (4) consecutive meetings, or
2. otherwise fails to perform any of the duties upon him as a director or a credit committee Member, or
3. does not comply with the loan policy, or
4. does not abide by the rules of the Co-operative.

(n) A director may, after due notice, be relieved of his/her office by resolution of a general meeting before the expiry of his/her term of office and another qualified person may be elected in his/her place at that meeting. Nominations for the election of such a director shall be made at the meeting. If that meeting does not fill the vacancy it shall be regarded as a casual vacancy. A director so appointed or elected shall not hold office for a period longer than the unexpired portion of the period of office of the vacating director.
(o) Minutes of all meetings of the board, credit committee, audit committee and all other committees that might have been established shall be maintained in terms of the Co-operatives Act and Co-operative Banks Act and verified by the recorders and presiding officers of the meetings. Such minutes shall contain the names of Members present, the date, time and place of meeting; and a record of all decisions made. Such minutes shall become a part of the permanent record of the Co- operative.
(p) A director of a Co-operative who is in arrears for more than three months with any amount or type of debt payable to the Co-operative, is disqualified from continuing as a director and must vacate his or her office immediately.
(q) Directors may not serve more than two consecutive terms of office unless otherwise specifically approved for an individual by special resolution at an annual general meeting.
(r) The board may pass a resolution in lieu of a meeting, which circumstances are limited to those where it is necessary to comply with legislation or as result of a request in the execution of legislative powers by the relevant authority, which decision would normally be approved at a meeting. Such decisions must be ratified at the next meeting.


17. FUNCTIONS OF THE BOARD


The Board shall be responsible for the management of the affairs of the Co-operative. This shall include, without limitation, the following functions, subject to relevant specific resolutions taken by the Members at

AGM:

(a) Provide the strategic direction, ensure adequate controls and monitoring the progress of all activities of the Co-operative;
(b) Open banking accounts in the name of the Co- operative with any permissible banking institution;
(c) Within 10 (ten) days of the annual general meeting appoint a Governance Committee. Two board members shall sit on this committee, preferably the Chairperson and his/her vice or one other, to ensure prompt and effective communication between the board and the Governance committee;
(d) Within 10 (ten) days of the annual general meeting appoint a credit committee. One board Member shall sit on this committee, preferably the treasurer, to ensure prompt and effective communication between the board and the credit committee;
(e) Within 10 days of the annual general meeting may appoint a community development committee. One board Member shall be allocated this as portfolio to ensure prompt and effective communication between the board and the community development committee;
(f) Determine from time to time the interest rates on deposits and loans, the rate of interest refund, if any, to be made to Members;
(g) Have control of the investments of the Co- operative other than loans to Members, except to the extent that the board may have delegated this responsibility to the management committee or to a General Manager employed by them;
(h) Have authority to recommend a declaration of interest or dividends on share capital or patronage payments;
(i) To establish savings policy and loans policies to be followed by the credit committee;
(j) To establish a Patronage Policy for purposes of Patronage Dividends payable to Members;
(k) To establish a Delegation of Authority Policy for directors, committees and management;
(l) Approval of new products and services subject to the provisions of the Co-operatives Act and Regulations;
(m) May, without in any way diminishing the duty of care or responsibilities of the Board and subject to all related directives by the Supervisor, outsource the provision of some support functions related to financial and enterprise technology systems, infrastructure, credit vetting, investment management, and related matters to a secondary co-operative bank of which the Co-operative is a member or competent professional 3rd parties;
(n) Mobilising the support of local communities associated with the Common Bond; be a member of and enter into an agreement with a representative body, support organisation or higher tier co-operative bank;
(o) Report back to the Members regarding the status and development of the Co-operative;
(p) Authorise the conveyance of property;
(q) Submit the accounts of the Co-operative for audit;
(r) Review the list, as prepared by the General Manager, of Members who are in arrears on loan installments with the proposed recommended action;
(s) Review bad debts written off and uncollectible loans from the books of account;
(t) Suspend, until the next annual general meeting, any or all Members of any committee for failure to perform their duties. Such action shall be subject to ratification by a vote of Members at the next annual general meeting;
(u) Receive grants and donations for the Co- operative;
(v) Borrow funds from the Co-operative Bank Development Agency, higher tier Co-operative Bank of which the Co-operative is a member or other external sources of finance once authorised by special resolution;
(w) Employ, fix the compensation, and prescribe the duties of the General Manager and have the power to remove such employee from office if necessary;
(x) Ensure that the Co-operative is meeting all its compliance requirements;
(y) Ensure that the Co-operative is keeping proper bookkeeping records and is able to present financial statements to the board on a monthly basis;
(z) Ensure that the business of the Co-operative is duly processed.
(aa) Ensure a Board of directors' commitment: "we owe our members a duty of care and may be held liable should the Co-operative misuse member savings during our term of office, subject to the constitution".
(bb) May take out directors liability insurance cover, as provided for in clause 20 (b).


18. FINANCIAL CO-OPERATIVE GENERAL MANAGER


(a) The Co-operative General Manager should be:

1. respected and trusted;
2. post graduate;
3. able to perform the operational functions of the Co-operative;
4. able to fulfill the criteria set by the Board;
5. able to perform other reasonable duties as the Members may require.

(b) Any of the following persons shall be disqualified from being appointed as General Manager:

1. A juristic person;
2. A minor or any person under legal disability;
3. A person that would have been disqualified for meeting the criteria as a director in terms of 15 (e) above.


19. DISCLOSURE OF INTEREST


(a) A director or General Manager of the Co-operative must, in writing, disclose to the Co-operative in accordance with section 37 of the Co-operatives Act

1. the nature and extent of any interest that he or she has in a contract or transaction, or a proposed transaction, with the Co-operative, and
2. any material change to such interest.

(b) It is up to the discretion of the other sitting Members of the board or sitting committee to determine whether or not the Member must excuse herself/himself from the meeting while the matter is being discussed or be allowed to participate in the discussion of the matter;
(c) Any disclosure must be recorded in the minutes of the meeting of directors;
(d) The board must, in accordance with the Co- operatives Act, keep a register of directors and General Managers' interests in contracts or undertakings containing full particulars of every disclosure of interest made;
(e) A director or General Manager of the Co-operative who fails to comply with this section is subject to disqualification.


20. LIABILITY OF DIRECTORS


(a) A director of the Co-operative shall not be liable to any person in his/her personal capacity for any loss or damage which may occur in or in connection with the performance of his/her duties unless:
A Director or General Manager that knew or knows that the business of the Co-operative is being carried on recklessly with intent to defraud creditors of the Co-operative or creditors of any other person or for any fraudulent purpose is personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the Co-operative.
(b) The Co-operative may take out Directors liability insurance cover with a reputable Insurance Group.


21. GOVERNANCE COMMITTEE


(a) The governance committee of the Co-operative shall at least consist of the chairperson, vice- chairperson, treasurer and the secretary. The General Manager will serve on this committee.
(b) The chairperson shall preside at all meetings of the Members and at all meetings of the board, unless disqualified as set out in this constitution and together with the treasurer shall sign all conveyance of property.
(c) The vice chairperson shall exercise the powers, authority, and duties of the chairperson in his/her absence.


22. STANDING COMMITTEES


(a) The board may appoint standing committees under the control of particular directors for the following functional responsibilities:

1. The Board must appoint a Credit Committee.
2. The Board may appoint a Community Development Committee.
3. Any other committee as may be deemed necessary for the smooth running of the Co- operative.

(b) The terms of reference of each committee must be clearly stipulated on constitution of such committee. [Noted: The Audit and Supervisory Committee is appointed by the members at AGM as per clause 25 below]


23. FUNCTIONS OF CREDIT COMMITTEE


(a) The credit committee shall consist of not less than 3 (three) but not more than 5 (five) Members appointed by the board. The term of office of each Member shall be three (3) years with the term of office of minimum one third, maximum half of the committee Members expiring each year.
(b) The credit committee shall meet as often as necessary (at least once a month) to promptly process Members' applications for loans. The committee shall be convened by the chairperson or at the request of any two (2) Members of the committee.
(c) Approval of a loan must be by unanimous decision of the committee member in attendance (including members attending by means of electronic communication media). A committee meeting must have a quorum to act. A quorum shall consist of a majority of its Members.
(d) The credit committee shall maintain a permanent Register of Loans considered by the committee. The Register shall contain the names of committee Members present at each meeting held. For each loan application considered, the Register of Loans shall show the Membership number and name of the loan applicant, the amount applied for and the action taken by the committee. For approved loans, the record shall show the amount approved and any conditions attached to the approval. If declined or deferred, the reasons for such action shall be recorded and conveyed to the applying Member. Credit committee Members in attendance at the meeting shall sign the register at the end of each meeting.
(e) The credit committee shall report to the board at each board meeting and shall strictly adhere to the loan policy established by the board.


24. FUNCTIONS OF THE COMMUNITY DEVELOPMENT COMMITTEE


(a) The community development committee shall consist of not less than three (3) but not more than five (5) Members appointed by the board. The term of office of each Member shall be three (3) years with the term of office of minimum one third, maximum half of the committee Members expiring each year.
(b) The community development committee shall meet as often as necessary (at least once a quarter). The committee shall be convened by the chairperson or at the request of any two (2) Members of the committee. A quorum shall consist of a majority of its Members.
(c) The community development committee shall recommend to the Board an annual community healthcare development programme related to the Common Bond and Objective of the Co- operative.
(d) The community development committee shall consider and may approve such community development projects that comply with its terms of reference and falling within the annual community development programme as approved by the Board.


25. AUDIT AND SUPERVISORY COMMITTEE


(a) The audit and supervisory committee shall consist of three (3) Members with adequate financial experience and expertise elected at the annual general meeting. The term of office of each Member shall be three (3) years with the term of office of one (1) expiring each year.
(b) At least one Member of the committee shall, from an internal audit point of view, attest the monthly statements of the Co-operative accounts which the treasurer/chief accounting officer and/or the General Manager is required to prepare each month. The audit and supervisory committee should at least meet once a quarter.
(c) The audit and supervisory committee shall assist the board of directors in its evaluation of the adequacy and efficiency of internal control systems, accounting practices, information systems and auditing processes within the Co- operative.
(d) The audit and supervisory committee shall facilitate and promote communication regarding the matters referred to in (c) or any other related matter between the members, board of directors, executive officers, auditor and the employee charged with the internal auditing of the transactions of the Co-operative.
(e) The audit and supervisory committee shall introduce measures that in the committee's opinion may serve to enhance the credibility and objectivity of financial statements and reports prepared with reference to the affairs of the Co- operative.
(f) The audit committee must meet at least quarterly and a majority of Members shall form a quorum at such meetings.
(g) By unanimous vote, if deemed necessary for the proper conduct of the business of the Co- operative, the committee may recommend to the board the suspension of any officer, board or committee Member. The board shall call an extraordinary general meeting within 30 days thereafter to present a report and recommendation to the Members concerning such actions. Such action will be reported to the Supervisor.
(h) The audit and supervisory committee shall receive and investigate any complaint or appeal by Members concerning the operations of the Co- operative.
(i) The audit and supervisory committee shall provide a report of each meeting and all actions taken to the next regular meeting of the board.
(j) The audit and supervisory committee shall provide a report of each meeting and all actions taken to the Supervisor.
(k) Any actions taken against any director or committee Member by the audit committee must be reported to the Supervisor.
(l) The Audit and Supervisory Committee shall supervise the Board as contemplated in sections 27 and 28 of the Co-operatives Act.


26. EQUITY AND RESERVES


(a) The Co-operative's own capital/equity includes:

1. Share capital, consisting of all issued Mandatory Shares and Voluntary Shares;
2. Other classes of share capital or deemed equity, or as may be further prescribed by the Supervisor;
3. Retained earnings to be transformed into voluntary reserves and/or institutional capital.

(b) The objective of increasing equity is to provide for working capital and generally for strengthening the financial position of the co-operative, including the compensation for unexpected losses that may be suffered by the Co-operative in its operations.
(c) The Co-operative shall maintain the following reserves:

1. non-distributable reserves (retained earnings), and
2. indivisible general reserve in terms of section 3(1)(e) of the Co- operatives Act.


27. DISTRIBUTION OF SURPLUS


(a) Should any of the statutory reserves reach the minimum or maximum regulatory requirement, any excess or shortfall shall be transferred to / from other general reserves, established by the Board for the purpose of strengthening the financial position of the Co-operative, until the required level has been reached.
(b) The Surplus of the Co-operative shall, by resolution of Members at an annual general meeting, be distributed in the following manner, for a specified accounting period and in the following order:

1. Up to a maximum of Twenty percent (20%) of the surplus shall be transferred to the indivisible general reserve, subject to such limitations prescribed in Section 46 of the Co-operatives Act.
2. The remainder of the Surplus (" surplus remainder") shall be allocated as follows:
i. A percentage of the surplus remainder shall be paid to members as a Patronage Dividend as determined by the Board based on their Patronage Proportion in terms of the Patronage Policy.
ii. The balance of the surplus remainder shall be paid to members as determined by the Board in pursuance of Section 44 (5) of the Co- operatives Act.

(c) After allowance for transfers to the indivisible general reserve as provided for herein, the whole or a part of the patronage proportion may, as determined by the Board, be applied to purchase additional membership shares for members on a pro rata basis, as contemplated in Section 44 of the Co-operatives Act.


28. SHARE CAPITAL


(a) Shares:

1. All Mandatory Shares held by a Member shall carry one vote regardless of the number of Shares held by such Member, subject to clauses 7(c), 10(c) and 15 (a).
2. Members may not call on the redemption of Shares other than provided for in this Constitution and Shares may not be redeemed for more than their Issue Price.
3. Divisible reserves may be reinvested as share capital by the Co-operative as approved at the annual general meeting of the Members in terms of Clause 27.
4. For a Member to join the Co-operative a minimum of 1000 (one thousand) Mandatory Shares at a nominal value of R1,00 (one rand) must be purchased by such Member fully paid up on application.
5. A Member shall be entitled to acquire any number of Voluntary Shares in the Co-operative, provided that the Member and Related Parties in aggregate does not hold more than 15% (fifteen percent) of the total issued Share Capital held by the membership at any given time, which limitation may be increased to 25% (twenty five percent) subject to specific approval of the Supervisor.
6. The repayment of cancelled Shares, as provided for in Clause 9 and subject to clause 28 (a) 2, may be deferred to a period not exceeding two years after the effective date of termination of such Shares in the share register of the Co-operative.

(b) Voluntary Shares special rules:

1. Voluntary Shares shall have no voting rights; and
2. Voluntary Shares are of a long term capital nature and shall only be redeemable on cancellation on the same terms as Mandatory Shares, as provided for in clause 9 (c) and clause 28 (a) 6; and
3. Voluntary Shares shall only be redeemable at no more than its Issue Price; and
4. Voluntary Shares shall share pari passu with Mandatory Shares in any dividends declared in terms of clause 27; and
5. The Issue Price of Voluntary Shares issued by the Co-operative may appreciate from time to time in value due to a Share Premium as defined being applied to its Nominal Value.

(c) Other classes of Shares

1. In the event that other classes of shares in the Co-operative may be allowed as prescribed by the Supervisor, such additional shares capital may be authorised by special resolution of Members at an AGM.


29. ASSET AND LIABILITY MANAGEMENT


(a) The Co-operative shall ensure that the funds of Members are held in safe and secure investments by investing or depositing funds in such instruments as prescribed through Section 14 of the Co-operative Banks Act.
(b) All monies and valuables kept on the premises of the Co-operative must be kept in a safe.
(c) All payments and investments must be authorised by the board, unless the board has delegated this authority.
(d) The cash float of the Co-operative will be determined on a monthly basis, based on the expected cash flows during the month under consideration.


30. USE OF FUNDS


(a) Funds of the Co-operative may be applied to any purpose authorised by Members at an annual general meeting that is consistent with the objectives as defined in this constitution.
(b) No funds will be committed to investments, projects or any other enterprise outside the usual business of the Co-operative.


31. LIEN (SECURITY/COLLATERAL)


The Co-operative shall have a right of retention over the Shares and deposits in the Co-operative for any sum due to the Co-operative by a Member and for any loan guaranteed by a Member and may apply such funds toward repayment of such debts.


32. FINANCIAL YEAR


The financial year of the Co-operative shall begin on the 1st March and end on the 28th of February each year.


33. ACCOUNTS AND RECORDS


(a) The General Manager appointed by the board will be delegated authority to issue receipts for all monies received and to acquire receipts for all monies paid out.
(b) Cheques drawn, cash withdrawals or transfers made on behalf of the Co-operative shall require two (2) signatures from a panel of signatories as approved by the Board. The panel of signatories shall be made up of no more than three (3) Directors, the General Manager and employees.
(c) The Co-operative's accounts shall be reconciled monthly to bank records.


34. ACCOUNTS AND AUDITS


(a) The Auditor shall be appointed by the Co- operative at each annual general meeting for the next financial year.
(b) The Co-operative General Manager shall prepare a monthly statement of the Co-operative accounts, which shall be presented to the Board.
(c) All books of account and other records of this Co- operative shall at all times be available to the directors and audit and supervisory committee members.


35. LOANS


(a) Loans granted, including financial products provided, to Members or Associate Members by the Co-operative shall be made in accordance with the Loan policies and guidelines of the Co- operative as formulated by the Board from time to time.
(d) Members of the board and of any committee member applying for loans shall have their applications approved by either the majority of the other Members at a joint meeting of the board, credit committee, audit and supervisory committee or a special committee set up for this purpose from the board, credit and audit and supervisory committees. The borrowing Member shall not be in attendance at the meeting when his/her loan is being considered.
(e) All loans granted to Staff or Directors of the Co- operative and the supervisory committee must be specifically mentioned in the prescribed manner in the annual report to the Members.
(f) The aggregate of all loans extended to staff of the Co-operative shall not exceed ten percent (10%) of the aggregate of total loans to members.


36. AMENDMENT OF CONSTITUTION


(a) Amendments to this constitution shall be made at the annual or an extraordinary general meeting.
(b) A special resolution will be required to amend the constitution of the Co-operative.
(c) Notice of proposed amendments shall be provided in writing with the notice of the meeting concerned.
(d) At least 10% of members who consider an amendment to the Constitution to be desirable shall submit their proposal to the secretary of the board. The proposals shall be placed on the agenda of the next board meeting and the views of the Board shall be communicated to the Members within 42 days of the proposal being received. If the proposal submitted by the Members is accepted by the board, it shall be placed on the agenda of the next general meeting to be passed by special resolution at such meeting.
(e) If the board rejects the proposal submitted by the Members described in (d), such Members may request an extraordinary general meeting to be called specifically for the purpose of consideration of such proposal by all Members of the Co- operative.
(f) Proposed amendments to the Constitution shall be circulated by the Board to Members at least 21 days in advance of the annual or extraordinary general meeting at which they are to be discussed.
(g) Any amendment to the Constitution shall only come into operation once approved by the Supervisor and registered by the Registrar.


37. CONFIDENTIALITY


(a) The officers, directors, members of the committees and employees of this Co-operative shall hold in strictest confidence all transactions of this Co- operative with its Members, except to the extent deemed necessary by the board in connection with the making of loans and collection thereof.
(b) Individual Members' accounts shall be accessible only to officers of the Co-operative, the audit and supervisory committee and the Auditors. Members shall be entitled to inspect their own accounts at any time during the business hours of the Co- operative.


38. GENERAL PROVISIONS


(a) All power, authority and functions of the members of the board, committees and officers of the Co- operative pursuant to the provisions of this constitution shall be exercised in strict conformity with the relevant provisions of this constitution and its adopted policies.
(b) Notwithstanding any other provisions in this constitution, any director, committee member, officer or employee of the Co-operative may be removed from the office by the affirmative vote of two thirds of the Members present at a general meeting of which proper notice has been given but only after an opportunity has been given him/her to be heard.
(c) This constitution sets the standard procedures and structures required for registration.


39. DISPUTES


(a) In the case of a dispute between the Co-operative and any of its Members or any complaints against any Member or officer which is not related to a debt owed by the Member to the Co-operative, an application shall be made to the board through the secretary for redress, but should the party not be satisfied, an appeal may be made to the audit and supervisory committee.
(b) Failure to settle the dispute in this manner may be referred to a relevant dispute resolution mechanism as established for this purpose.
(c) By special resolution passed by three fourths of the Members present and voting at a special meeting called specifically for that purpose, the Members may resolve that the Co-operative amalgamate with another Co-operative, provided further that all the members of the amalgamated Co-operative meet the same criteria as a Co- operative as specified in this constitution and as in accordance with the provisions of the Co- operatives Act and the Co-operative banks Act with regard to amalgamations


40. DISSOLUTION AND AMALGAMATION


(a) The Co-operative may be dissolved by special resolution passed by three fourths of the total number of Members voting at a special meeting called specifically for that purpose.
(b) At least twenty one (21) days written notice of such a meeting shall be given to all Members. Upon dissolution and in terms of the provisions of the Co-operatives Act, the assets of the Co-operative shall be realised, all liabilities shall be paid, all savings shall be refunded to Members and any surplus thereafter be apportioned to Members in proportion to the patronage proportion of each remaining Member determined for a period of 5 years.

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