Issuu

Page Vision, Mission

Notice of Annual General Meeting and Agenda

Profile - First Heritage Co-operative Credit Union Limited

Life Charter - Products & Services

Minutes of Annual General Meeting

Minutes of Reconvened Annual General Meeting

Board of Directors

Report of the Board of Directors

Message from Roxann Linton

Executive Team

Management Discussion

Report of the Treasurer

FINANCIAL STATEMENTS

Report of the Supervisory Committee

152

Report of the Credit Committee

155

Report of the Nominating Committee

158

Highlights 2016

166

Report of the Delegates on JCCUL’s AGM

170

Branch Managers

174

Unit Managers

175

Parliamentary Rules of Order

176

179

Prayer of St. Francis of Assisi

180

Notes

182

Notice is hereby given that the 5th Annual General Meeting of the First Heritage Co-operative Credit Union Limited will be held on Thursday, May 11, 2017 at the Jamaica Conference Centre, 14-20 Port Royal Street, Kingston beginning at 3:00 p.m. Registration commences at 2:00 p.m. All members are invited. ________________________ Leodis Douglas Secretary, Board of Directors

Ascertainment of Quorum Call to Order and Prayer Chairman’s Opening Remarks and Tributes Reading and Confirmation of the Minutes of the 4th Annual General Meeting held on Thursday, May 12, 2016 Reading and Confirmation of the Minutes of the reconvened 4th Annual General Meeting held on Thursday, July 21, 2016 REPORTS: Board of Directors Management Treasurer and Auditor Credit Committee Supervisory Committee ELECTIONS: Nominating Committee Report Elections to: Board of Directors Credit Committee Supervisory Committee Any Other Business Vote of Thanks Adjournment

irst Heritage Co-operative Credit Union Limited (FHC) was formed on August 1, 2012 from the merger of GSB Cooperative Credit Union Limited and Churches Co-operative Credit Union Limited. On March 1, 2015, the business and operations of St. Thomas Co-operative Credit Union Limited was transferred to FHC.

g) h) i) j)

FHC’s bond includes: a) All members of any religious bodies and affiliations in Jamaica and their families/relatives; b) all Public Sector Employees, past and present, regardless of their terms of tenure, employed to Ministries/ Departments/Agencies/Statutory Bodies/Public Corporations and their families/relatives; c) all Professionals, their families/relatives and their employees and their families/relatives; d) all members of Professional Associations affiliated to the Public Sector, their families/relatives and the employees of these Professional Associations and their families/ relatives; e) all Public Sector Consultants and their families/relatives; f) all Public Sector Contractors and their families/relatives; employees, past and present, of the Credit Union and their families/relatives; all Registered Co-operative Societies and members of these Societies; all persons of good character of the age permitted by the Co-operative Societies Act. all members and persons eligible to be members of the Credit Union that have merged with this Credit Union, provided that any person that is being admitted to membership has attained the age of sixteen (16) years.

The Credit Union has a membership base of approximately 200,000 across a network of eleven (11) branches strategically located across the Island, offering a suite of forty-four (44) products and services. Our extensive array of products and services include a variety of loans, deposits, savings and investment options from our subsidiary, FHC Investments Limited (FHCIL), Retirement Scheme (Pension Gold) and Micro and Small Business loan financing. Our products and services are specifically designed to meet the needs of members at every stage of their lives.

FHC Investments Limited (FHCIL) FHC Investments Limited (FHCIL) is a limited liability company and a wholly owned subsidiary of First Heritage Co-operative Credit Union Limited (FHC), established to provide investment opportunities for members and non-members of the Credit Union as well as to manage the investments of the Parent Company. It is located at Suite 27, Winchester Business Centre, 15 Hope Road, Kingston 10. The company’s products and services may also be accessed through representatives at several FHC branch locations. FHCIL offers competitive rates of return and portfolio management services to its clients by a team of industry experts with over 30 years of combined experience. FHCIL provides a suite of products and services to meet the needs of clients. These include: Products • • • • •

Equities (local and foreign) Bonds (local and foreign) Mutual Funds Corporate Financing Money Market Instruments

Services • • •

Portfolio Management Investment Advisory Retirement Planning

The investment company has products and services for the conservative investors as well as those with a greater risk appetite, some of which are offered in both foreign and local currency. FHCIL is also the Investment Manager and Administrator of the Credit Union’s Retirement Scheme. The company’s total funds under management currently stand at $4.17B.

Retirement Scheme The Churches Co-operative Credit Union Retirement Scheme referred to as “the Scheme” was established by Churches Co-operative Credit Union Limited as a defined contribution plan with effect from June 1, 2004 by Trust Deed to provide pension benefits for members and their beneficiaries at retirement and ancillary benefits in the event of death or termination. The Gross Value grew by over 131% from approximately $339M to $786M with membership as at December 2016 totaling in excess of 4,427 individuals including 47 Pensioners. The strategic objective of the Scheme is to ensure that more Jamaicans who have a retirement plan to which they are consistently contributing thus safeguarding their retirement.

Micro and Small Business Financing FHC’s Micro and Small Business Loan outfit reflects a renewed commitment on the part of the Credit Union to foster the growth of entrepreneurship in Jamaica as a major driver of the economy. It also reflects the decision of FHC to widen the scope of its services and diversify its product range in a structured and better controlled manner to provide more specific and targeted entrepreneurial opportunities. This will serve to increase employment, the standard of living of borrowing members and also contribute to the GDP of the country. 6

The Micro and Small Business Unit was created in 2006. It currently has a portfolio of approximately $162.71M. It is FHC’s strong belief that a strategy embodied by the spirit of entrepreneurship is vital for the stimulation of our economy. The Credit Union’s Micro and Small Business units are located in Kingston, May Pen, Montego Bay, Mandeville and Spanish Town and St. Thomas. The unit is a member of the Caribbean Micro Finance Alliance which acts as a catalyst for the development of Micro finance in the Caribbean. The unit was recognized worldwide as a finalist in the Caribbean Micro Finance Competition in 2012 for its impact in Jamaica. Jamaicans have a rich entrepreneurial spirit and FHC is the home for financing these opportunities. FHC aims to be a one-stop financial institution with diversified products and services to meet the needs of valued members at every stage of life. The Credit Union’s commitment remains, to generate continual benefits to our valued members and other stakeholders.

MINUTES OF MEETING OF THE 4TH ANNUAL GENERAL MEETING OF FIRST HERITAGE COOPERATIVE CREDIT UNION LIMITED HELD ON TUESDAY, MAY 12, 2016 AT THE JAMAICA CONFERENCE CENTRE 14 – 20 PORT ROYAL STREET, KINGSTON 1. ASCERTAINMENT OF QUORUM AND CALL TO ORDER Having ascertained that a quorum was present, constituting in excess of 170 registered members, the Chairman, Mr. Balvin Vanriel, called the meeting to order at 3:02 p.m. Board Secretary, Mr. Edmund Jones convened the meeting with the reading of the Notice and then handed over to the Chairman. The Chairman then invited Revd. Major Garnett Kildare to pray for the meeting’s proceedings. 2. INVOCATION 11 Revd. Major Kildare invited members to stand as he led the invocation. He reminded them that it is God’s grace and mercy that has brought us thus far. He then prayed and invited God’s presence at this meeting. 3. WELCOME, OPENING REMARKS, APOLOGIES AND TRIBUTES The Chairman welcomed all members to the 4th Annual General Meeting of the FHC Cooperative Credit Union formed on August 1, 2012 by the former GSB Co-operative Credit Union and Churches Co-operative Credit Union, and more recently the addition of the St. Thomas Co-operative Credit Union to the family. He then pointed members to the Parliamentary Rules laid out in the Annual Report on pages 156 through to 158 to be used to guide the meeting’s proceedings. The Chairman then introduced, by name and position, all members of the Board and Management present on the podium: Secretary, Mr. Edmund Jones; Treasurer, Mr. Robin Levy; 1st Vice Chairman, Mrs. Leodis Douglas; 2nd Vice Chairman, Mr. O’Neil Grant; Assistant Treasurer, Mr. Kevin Forbes; and CEO, Mr. Basil Naar. He also introduced the other volunteers and members of the Management team in the room: Chairperson, Mrs. Beverly Williamson and member Mr. Lascelles Ellis of the Supervisory Committee; Mr. Richard Ranger and Mrs. Althea Daley from the Credit Committee; GM, Finance and Treasury, Mrs. Maxine Little-Dixon; Assistant GM, Mr. Emil Williams; GM Credit

Administration and Loan Risk, Mr. Quilston Harrison; COO, Mrs. Maria Morrison; GM- Human Resource Development, Mrs. Jillian Gayle, Internal Auditor, Mrs. Dennise Edmund-Hastings; AGM, Sales and Wealth Development, Mrs. Jacqueline Pingue-Smith; and AGM, Operations and Shared Services, Mrs. Karlene Simpson. He further apologized for those who would be late and absent. The Chairman made mention of those of our members who passed on during this year, making note of one such Credit Union stalwart, Revd. Oswald Thorburne, who was present at all meetings over the years and who had been instrumental in the formation of both the Churches and GSB Credit Unions. He invited all members to stand as a minute of silence was observed for all those who transitioned since the last AGM. The Secretary was then invited to extend welcome to all specially invited guests, to give any apologies, and to read the minutes of the 3rd AGM. The Secretary welcomed all specially invited guests who were asked to stand to be recognized: Auditors KPMG, Mr. Nigel Chambers and Mr. Ronnie Walton; Ms. Tanya Brown and Mr. Robert Kerr from JACCUL; Ms. Vanessa Porter Allen and Ms. Karen Little from the Department of Co-operative and Friendly Societies; and Ms. Phillipa Beckford from CUNA Caribbean Insurance. He also extended apologies on behalf of those who would be absent or late: Mr. Artnel Bedassi, Montego Bay Co-operative Credit Union Limited; Mr. Albert Smith from NUCS; Ms. Karla Stephens-Hall who would be absent; and Directors Tamara Francis Riley Dunn, Beverly Stewart and SSP Michael James who would be late. 12

4. READING & CORRECTION OF THE MINUTES OF THE AGM Minutes of the 3rd AGM, located on pages 11-24, having been circulated, were taken as read on a motion moved by Revd. Major Garnett Kildare, and seconded by N.C. Rhone. The Secretary took the meeting through the corrections. Revd. Major Kildare noted that on page 1, the heading should have ‘Minutes of the meeting of the 3rd … rather than ‘for the 3rd.’ One member noted that page 14 - 4th paragraph should say ‘a member of former St. Thomas Credit Union’ rather than ‘a former member of St. Thomas Credit Union.’ Another member highlighted that at the bottom of the page, last paragraph, 4th line should read: ‘……attendance at the Retirement Scheme’s AGM has usually been far below….’ And not ‘have usually been…..’ Secretary Jones then made an addition on page 20 under Item 1, the 1st paragraph, last sentence should read: ‘He then asked for a motion to accept the Treasurer’s Report. This motion was moved by Juliet DaCosta and seconded by Carl Campbell.’ There being no further corrections, the motion for the confirmation of the Minutes was moved by Revd. Major Garnett Kildare and seconded by Mr. Michael Edmundson.

The Chairman thanked the Secretary for the presentation and asked if there were any matters arising from the Minutes for discussion or further questions from the floor. Ms. Karen Boland asked about the possibility of getting the Minutes by email prior to the meeting. The Chairman advised that the Annual Report with the Minutes was posted on the website from the 26th of April, 2016. The member then rebutted that the text that informed them of the meeting could also include that the report was on the website. The Chairman informed her that this recommendation was noted. Revd. Major Kildare requested that the booklet be published early and made available for everyone to be able to read through before the meeting. The Chairman noted the request for an early publication. Revd. Major Kildare congratulated the Credit Union on the opening hours but expressed concern about the closing hours at the Kingston Gardens Branch, which closed earlier than the Eureka Branch. The CEO Basil Naar explained that based on the traffic flow into the Credit Union, the Kingston Gardens Branch did not have heavy traffic at that time of the day and therefore encouraged Revd. Kildare to use the Eureka Branch or to reach the Kingston Gardens Branch earlier than the 3:00 p.m. closure time. Ms. Althea Daley asked for an update on the Credit Union’s readiness with the impending Bank of Jamaica Regulations. The Chairman indicated that although this would be mentioned in the Management Report he wanted to add that the Credit Union is ensuring that it is ready when this is rolled out. Ms. Daley further questioned if the property mentioned on page 20 had been sold. The Chairman responded that it was an investment property located on Duke Street and it had been sold. Revd. Major Kildare sought further clarification of the term ‘Enterprise Risk Management System’ on page 17. Mr. Basil Naar, CEO, responded that it is a system that allows the management to examine, analyze and act when they see risks that are in the environment and within the confines of the Credit Union; risks such as interest rate, reputation, capital, operating liquidity and so on. There being no further matters arising from the minutes of the last AGM, the Chairman then presented a summary of the Board of Directors’ Report presented on pages 27 – 29 and the attendance on 10. The Report, having been circulated, was taken as read on a motion moved by Revd. Major Garnett Kildare and seconded by Ms. Doreen Allen. 5. BOARD OF DIRECTORS’ REPORT The Chairman highlighted that the financial year ending December 31, 2015 was a fairly good one in spite of the many challenges experienced in the financial sector. He spoke to the

challenges of the constant fall in interest rates and the aggressive competition experienced among the financial sector players. He further spoke on the signs of growth in the economy with the country experiencing single digit inflation rate of 4.3%. At the start of the year, the 30-day Treasury Bill rate stood at 6.29%; with the 90-day rate at 6.88%, while the 180-day rate was 6.9%, showing an average decline of 10.89% in the Treasury Bill rates since the start of the year. He noted that towards the latter part of the year, the Credit Union experienced a higher than expected loan loss provisioning and this was due mainly to the increase in the non-current loans in the micro and small business portfolio. He informed the meeting that the Management team continued to spend much time and effort in preparing for the pending BOJ regulations for the Credit Unions. He mentioned the Transfer of Engagement from St. Thomas Co-operative Credit Union to First Heritage Co-operative Credit Union on March 1, 2015 resulting in an expanded branch network of 11. He reported that the Group’s total assets stood at $10.1 billion as at 31st December, 2015, with net surplus, despite a challenging year, being $59.8 million.

The Chairman reported that FHC Investment Limited, our wholly owned subsidiary, continued to do increasingly well in its performance and in fulfilling its mandate of promoting investment opportunities to all members and Jamaicans. The portfolio under management was reported as at approximately $2.9 billion with a net profit after tax of $15.34 million. The Retirement Scheme showed a favourable net return of 14.68% to the membership of 4,264 participants. The net assets available to members increased from $494 million in 2014 to $636 million in 2015. The Chairman reported total pensioners as 50. He then encouraged the members to utilize the many services offered through the investment company, especially that of deposits in US currency, which was not available through the Credit Union. The Chairman then spoke on the FHC Foundation, which focuses on youth development and education with a mandate to assist in reducing the burden on the nation’s purse. The Foundation donated a sum of $2.38 million in 2015 to fund 10 GSAT Scholarships valued at $600,000; the existing GSAT Scholarships at $280,000; 7 Tertiary Scholarships at $1.20 million; and one entrepreneurship award of $300,000. Finally, the Chairman spoke to the strategies to be employed in the future which included, despite the challenges being faced: to satisfy our members through improved customer service delivery, maintenance of sound business principles, ensuring fit and proper board members, providing value-added services with a diversified suite of products driven by our Product Life Charter, continuously improving technology and efficiency; improving key performance ratios and remaining committed to the mission of being a world class financial institution. The Chairman thanked all the partners that have worked throughout the year namely; the Department of Co-operatives and Friendly Societies, the Jamaica Co-operative Credit Union League, our auditors KPMG, all our other business partners, team members and all our valued members. He reiterated the FHC brand as experienced, as one that has earned its position in the marketplace and its intention to remain forthright in achieving its vision and mission. He then opened the floor for questions or comments from members.

Mr. N.C. Rhone asked for further explanation on the Retirement Scheme. The Chairman explained that the Credit Union has an individual Retirement Scheme, approved by the Financial Services Commission (FSC), where members and other individuals are encouraged to become participants in order to plan and prepare for retirement. He explained that once the individual is working but not participating in another pension scheme then that individual is welcomed. Revd. Major Kildare asked about the age limits to becoming a member. The Chairman responded that once you reach the age of 18 you can join. Additionally, the ceiling to becoming a member is 59, however, the Trustees can approve a waiver if you have reached up to 61 years and wished to become a member. He encouraged all members eligible to come in and have dialogue with one of our BDOs to secure a pension for retirement. Member Mrs. Althea Daley noted that the membership in the Retirement Scheme was not growing as significantly as it should and queried what plans were being put in place to increase membership. The Chairman acknowledged that there were challenges in 2015, however, 2016 was already showing signs of growth with the new sales team in place and significant improvements envisaged by the end of the year as a result. Mr. A. N. Harris questioned the worth of the existing GSAT Scholarship as discussed on page 29. The Chairman asked that the COO, Mrs. Maria Morrison responded to the question, however, she indicated that this specific number was not available. Mr. Jethrow Hart, made note that this record should be available since records are there for the other scholarships. The Chairman assured him, that moving forward, future reports will include the amount. Mr. Michael Burke sought consideration for the possibility of the FHC Foundation organizing some sort of co-operatives that could create employment on condition that these co-operatives save in the Credit Union, resulting in more money for members to borrow. The Chairman noted the consideration. Revd. Major Kildare requested an overview of Renald Mason, in whose honour one scholarship was named. The Chairman acceded to the offer of Member Michael Burke to give the overview. Mr. Burke pointed out that Renald Mason was the president of the former GSB Co-operative Credit Union in the 1980’s who contributed to the movement. After serving for many years, he retired and subsequently died. The Scholarship was then named in his honour. Revd. Kildare congratulated the Chairman and Mrs. Leodis Douglas on full attendance record to all Board Meetings for the year. He also congratulated all other members, at which point, the Chairman pointed out the correction of reducing the numbers recorded by one from the name Director O’Neil Grant going down. Revd. Kildare reiterated the congratulations noting that volunteerism is not easy and asked that a small token be given to those who have full attendance.

The Chairman quickly noted his sentiments and thanked him on behalf of the Board, but added that while it is not easy, once you have made the decision to give of yourself in the spirit of volunteerism, then you should give of your best.

Member A.N. Harris asked that titles be added to names to clarify genders and this was noted by the Chairman. There being no further questions or comments, the Chairman asked for a motion to accept the Board of Directors’ Report. This was moved by Ms. Shirley Anderson and seconded by Mr. Lincoln Turner. The Chairman then invited the CEO, Mr. Basil Naar, to present the Management Report. 6. MANAGEMENT REPORT

The CEO, on behalf of management, spoke of the challenging year 2015 was. But despite that, noted the $59M made on an asset base of $10B. He hastened to add that despite the fair surplus, the Credit Union remained strong with a book value of over $2B and with liquidity at over 25%. He informed members of the uniqueness of the Credit Union, that is, being the only one in the Caribbean that has the element of a financial institution that can compete with every other institution in Jamaica; the only Credit Union with a wholly owned subsidiary where investment in foreign currency is conducted; and the only Credit Union with a Pension Fund of over $660M under management. The CEO informed members that the Credit Union is preparing itself to be supervised by the Bank of Jamaica. He noted that everything is being done as requested by the Central Bank to ensure that we become one of the licensed Credit Unions, since this will not be automatic. He urged that we must meet the standards of the Central Bank. He explained that the strategic focus in 2015 was to, inter alia: improve our members’ value; to encourage entrepreneurship; to enhance productivity; to enhance our products; and to increase our corporate and social responsibility. He expressed satisfaction in the achievement of those strategies, though not reflected clearly in the performance. He explained that the less than satisfactory performance can be attributed to some borrowers not repaying on loans as they should. He quickly added that for 2016, however, there will be continuance of the strategies implemented in 2015, along with improving our customer service delivery to members. The CEO reported that our financial ratios must be the central focus for the year ahead, especially in light of the BOJ standards. He endeavoured to make team members more productive as successful businesses are directly correlated to productivity. He noted the myriad of activities that would be implemented within the year including a review of our value proposition which would be announced to members shortly.

He noted to members the commitment of the Credit Union to corporate and social responsibilities regardless of what is happening in our environment. As a financial cooperative, we must endeavour to reach out to our communities and provide help to those that are in need to make their lives worthwhile even when the Credit Union is facing trying times. He made mention of several events such as: a festival in Morant Bay; a partnership with the Child Development Agency (CDA), helping young children; sponsoring and partnering in National Reading Week by conducting a number of sessions in various primary schools; collaborating with National Housing Trust (NHT) in three parishes; partnering with Social Development Commission (SDC) to launch a major business in St William Grant Park; collaborating with Jamaica Civil Service Association (JSCA); donating beds, linen and educational supplies in Allman Town; hosting a Christmas treat for the poor relief centre in Downtown Kingston; and supporting the feeding programme at Stephens United Church. He mentioned the continued training in our branches, noting the in-house programme called CPD. He encouraged all members to update their contact information as there is an expansion of the effort to contact members through text messages, emails and letters to inform them of all the various products, services and events that will be undertaken in 2016. He also encouraged members to join the online banking platform, which has the technology to enable transfers within FHC accounts, among other things. He reiterated the extended opening hours of the branches. He spoke of the partnerships with ICWI and Sagicor, as well as the GOJ/Ministry of Agriculture partnership regarding the dairy farming assistance which is still under discussion. He reported that the sales team achieved 70% of its aggressive target and encouraged members to join the Liaison Officer Programme to encourage persons to be a part of the Credit Union, explaining the philosophy. He apprised the meeting of the continued engagement in the improvement and upgrading of the Credit Union’s technology, as in order to provide effective customer service, the technology must be in place to enable it. He informed that over the next 24 months, a new core technology system would be installed that would enable us to deliver greater and more excellent service to our members. The CEO spoke on the loan portfolio and the need for the non-current loan ratio to get to 5%, which would be in compliance with the standards for the BOJ regulations. He assured members that this Credit Union can take them to where they wish to grow; whatever their need, the Credit Union will be able to supply it, from the cradle to the grave. With a membership of approximately 200,000 on the books, the CEO pledged the FHC Credit Union as the alternative to every other institution; one that is able to provide the member with everything he/she needs from the day he/she joins to the day he/she retires. He thanked the members for listening and opened the floor for questions or comments. Mr. N.C. Rhone spoke to the need to improve the telephone service based on the experience he had getting through to customer service. The CEO noted the concern and spoke to the approximately 40 lines attached to the Credit Union’s main line - 929-5142 served by approximately 9 employees.

Mr. Michael Burke expressed his concern of the impending BOJ regulations. He made mention to the meeting that representatives of the Credit Unions and the League must be resilient and vigilant to ensure that the co-operative spirit continues. The CEO assured him that this discussion had been on the table for 16 years and to date much strides have been made in countering some of the dictates that could have been deleterious to the movement. He added, however, that any direction that will redound the efficacy and integrity that have been the hallmark of the Credit Union for so long will be leaned towards and pursued. He then assured him that all his points have been noted as we continue to maintain the spirit of the financial co-operative movement. Ms. Shirley Anderson congratulated the CEO on his presentation which she considered full of clarity. Her congratulation was noted. Ms. Colleen Ricketts-Moore, with reference to the writing-off of some micro and small business loans, queried the existence of any programme of training before loans are granted, to assist individuals in understanding the general management of business, especially how to monitor their expenses/loans and business plans.

The CEO highlighted that the borrowers under this portfolio are oftentimes jobless and without experience and so the Credit Union creates an atmosphere of nurturing based on the pressures of people in this category. He further opined that this type of lending cannot employ the classical criteria of evaluation but rather leans more to the art than science as there are no hard data available to analyze them. He added that the co-operative movement was formed out of this crucible where people had no means and had to band together to help each other. He followed up to add that there are a number of providers who are involved in structuring financial statements for people of small means and members are referred to them from time to time. One member congratulated the Credit Union for its subsidiary, FHC Investments and expressed the need for more visibility. The CEO responded that billboards are out there, but that this will be further discussed when the Board next meets. Member Sean Hunter spoke to technology being the driving force for improved customer service in the Credit Union. He alluded to the technological system in place presently as not being able to provide the myriad of services as the one used by former GSB. The CEO, however, assured him that the decision came about subsequent to a cross-functional team of both GSB and Churches caucusing for months, weighing the pros and cons of both systems and then coming up with a final selection. The COO made further clarifications that the particular decision was taken since both Credit Union team members were familiar with the SMART system; this led to a seamless transition and members were in no way negatively impacted. Another member questioned the delay for action taken when deductions are sent to FHC. Asked by the CEO to respond, Ms. Karlene Simpson, Assistant General Manager for Operations and Shared Services, indicated that once it reaches the Credit Union, within 24 hours it is credited to the Account. She, however, argued that some companies are the ones who delay in sending off the payments.

The member also voiced the concern that salaries can no longer be sent to credit unions or building societies. The CEO noted the concern adding that this is a decision the government took to send all public sector salaries to commercial banks. Member Ms. Norma Stevenson expressed her concern of being unable to access a loan and having to resort to another loan provider. The CEO noted her concern and requested her particulars to look into the matter. Another member, Mr. Wayne Saunders spoke to his concern re customer service in resolving an account after the death of a member. The CEO again requested a team member to get his particulars to deal with the matter outside of the meeting. Revd. Major Kildare offered his services to help the Credit Union on their trajectory. The CEO noted his offer and thanked him for offering himself in that particular capacity. Ms. Cynthia Gray expressed her long standing concern of her ATM card, which is not working as well as the need for an ATM Banking Machine to be placed in Lawrence Tavern. The CEO took the recommendation and noted her concern and assured her that he would speak with her subsequent to the meeting. Member Edith Smith commented on the miscommunication concerning her mortgage payment which was extended due to late fees. Mr. Naar thanked her for the information and advised that this matter will be looked into. Member Rosemarie Arnold congratulated FHC for the improved communication via email and text messages. She, however, asked that the messages such as the one for the notice of the AGM be more complete indicating time, date and place of meeting. Two members expressed issues about the permanent shares. The CEO informed the meeting that permanent share is fixed capital for all times and funds cannot just be pulled from it. In responding to a query of permanent share increasing during a loan but not reduced after the loan payment is completed, Mr. Naar reiterated that permanent shares are fixed, and is used to build the Credit Union’s capital adequacy ratios. However, for any reduction, it has to be liquidated by selling it to another member. He added that to manage this, an escrow was established for that purpose. He noted that this practice is, however, not encouraged. There being no further comments or questions, the Chairman thanked the CEO for his comprehensive report and asked for a motion for the acceptance of the Management Report. The motion was moved by N. C Rhone and seconded by Lincoln Turner. The Chairman then recognized former Chairman of the Board, Mr. Orville Hill who was asked to stand to be acknowledged. He then invited the Treasurer, Robin Levy, to present the Auditor’s and Treasurer’s Reports which could be viewed on pages 47 to 52. 7. TREASURER’S REPORT Treasurer, Robin Levy directed the members to the report of page 56 and invited the KPMG Director, Ms. Nadine Williams, to come forward and read the Auditor’s Report.

Ms. Williams stated that the audit was conducted on the financial statements of First Heritage Co-operative Credit Union Limited and the consolidated financial statements of both the Credit Union and its subsidiary. She outlined the management’s responsibility being that of preparing financial statements that give a true and fair view in accordance with IFRS and the Cooperative Societies Act. She further outlined the Auditor’s responsibility, which is to express an opinion on the financial statements based on their independent audit, noting that the audit was conducted in accordance with the International Standards on Auditing. She noted that those standards required that they comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether or not the financial statements are free from material misstatements. Ms. Williams outlined the auditing process and opined that the audit evidence obtained was sufficient and appropriate to provide a basis for their opinion. Additionally, the financial statements gave a true and fair view of the financial position of the Group and the Credit Union as at December 31, 2015. She noted that, in their opinion, proper accounting records were maintained and the financial statements were correct, duly vouched and in accordance with the provisions of the Co-operative Societies Act.

The Treasurer thanked Ms. Williams and proceeded to present the Treasurer’s Report. Mr. Levy informed the meeting that the year 2015 was a very challenging year for the Credit Union. He noted for the year 2015, the Credit Union achieved a milestone – that of surpassing total assets of $10B. He noted that the Credit Union achieved a surplus of $40.2M which was significantly lower than surplus made in 2014 which accounted for $104M. He attributed this reduction to provision for loan loss and reduced loan income. He noted another significant factor in the balance sheet – that of the merger with the St. Thomas Credit Union which brought in almost $1B in assets that helped to realize the $10B but in addition, that they also came into the FHC family with an accumulated deficit of $150M which we had to absorb. The Treasurer commented on the continued strategy of the Credit Union to improve its liquidity in preparation for the impending BOJ Regulations. In doing so, he noted that lending was reduced when compared to previous years. The Treasurer noted that income earned for the Credit Union came from interest on members’ loan representing 3%; interest on other investments representing 29%; and rental income and other income such as fees, which did not increase by much over 2014. He noted that Administration costs for the Credit Union increased by 3% over 2014, with Establishment costs such as light, water and rental, increasing by 10% over the previous year. Financial costs which included payment to members for deposits increased by 5%, while provision for loan loss had a 269% increase amounting to $111.8M over 2014 which recorded a $30M provision. This increase provision represented loans that were either not paid on time or not paid at all. Representation Affiliation increased by 8% over 2014. Total costs overall increased by 11% resulting in the not so impressive net surplus of $40.2M. Institutional Capital increased by 17% but the Credit Union ended with an accumulated deficit of $132M representing the loan loss that was made and some from the loss absorbed from the St. Thomas Co-operative Credit Union.

Allocations from the surplus included statutory reserve, $8M for further loan loss provisioning under PEARLS; the IFRS requirement of $13.8M; Pension Adjustment for the former St. Thomas Co-operative Credit Union of $46M; and Permanent Share Dividends and other transfers of $13.9M, leaving nothing to distribute. It meant, therefore, no dividends and no honoraria for Volunteers and Board Members. The Treasurer outlined, however, that our PEARLS ratios remained positive, that we have a strong capital base and we have 66% of total assets in loans. He highlighted the need to write more good loans which would result in our loan losses being a smaller percentage of a larger portfolio. He noted delinquency at 15.4% of the total loan portfolio, which is required to be at 5%. The Treasurer, in conclusion, assured members that the Credit Union’s Management team would be committing to redoubling their efforts to find good loans to make to our members and grow our way out of the challenges that we face. He noted that with the Credit Union’s great products, the solid membership base, the capable staff members, and our strategy to improve our technology, we can all move the Credit Union back to a position of even greater strength and by extension, give even more to our members. The floor was then opened for questions and comments on the Treasurer’s Report. Member Shirley Anderson sought enlightenment on the meaning of the PEARLS ratios. The Treasurer explained that it is an international Credit Union standard of ratios which indicate ranges within which the Credit Unions should be in order to be considered well-run credit unions. He further noted that for FHC, we are well within 90% of these ranges but we are out on the past due loan, the income and the operating expenses ratios. Member Ms. Boland queried if not receiving dividends this year was attributed to the merger with St. Thomas Co-operative Credit Union. The Treasurer responded that last year when the membership agreed to the merger, we knew that the credit union had a deficit, although the magnitude was uncertain. Despite the deficit, we remain convinced that it was a good investment. He further expanded that proof of this could be gleaned from the fact that the St. Thomas branch was already registering a profit, month after month. He noted that the deficit is expected to be cleared from the books within the next four to five years. Member Mr. Thomas queried why the magnitude of the deficit was not known if due diligence was conducted, the role of the League during all of this and why the Stabilization Fund did not absorb the $150M deficit of the former St. Thomas Co-operative Credit Union. He further raised his concern regarding the 269% increase in loan loss provision and whether a committee existed that dealt with past due accounts. Treasurer Levy responded that the projection was made as to what the deficit would have been, that due diligence was conducted over several months, that we were quite comfortable with the audit results that came out; and what was presented to the membership was fairly accurate. With regard to the Stabilization Fund, he advised that this fund comes into effect when a credit union is declared insolvent or is to be placed on the auction block to be taken over effectively by another credit union. In this case, however, that was not the situation. We had a voluntary merger between the two credit unions which, therefore would not trigger the Stabilization Fund.

The Treasurer also noted that the Credit Union has several committees that members sit on outside of the Board meeting, which include the Credit Committee, where loans are adjudicated on that are above management’s ability to authorize directly as also to vet and validate the ones that have been made within their authorities. In addition there is the Past Due Committee on which members of the Board also sit, that addresses at a very high level, loan policies and procedures and review the portfolio to see how well it is doing and to improve on our lending, loan administration, risk management and our collections. Ms. Colleen Grant made the suggestion that the Credit Union should revisit the way it presently offer loans – to make the rates more attractive. Based on the numerous fees attached to loans, she noted that they are no longer attractive. She likened the Credit Union to a bank in this regard. After much deliberation, the Treasurer expressed understanding of all the points raised and expressed the need for the Credit Union to do a lot more for its members, especially in the area of loans. Member Ms. Stanbury thanked the Treasurer for such an honest report which included being very open about the deficit absorbed from former St. Thomas Co-operative Credit Union. Mr. Saunders, sought clarity on the real growth of the Credit Union. The Treasurer noted that if we were to value the Credit Union in US Dollar terms, we would not be growing at as fast a rate as we seem to be doing in Jamaica Dollars. He, however, reiterated that the growth from $8.8B to $10B was due largely to the $1B that came in from the former St. Thomas Co-op Credit Union merger. 22

Although similarly expressed by several members, Mr. Lloyd Smith spoke passionately about the need for the Credit Union to find ways to attract new members and to allow loans to be more accessible to them and to current members. He noted that this would definitely limit members from going to other financial institutions, including the loan sharks that offer a much higher interest rate. He spoke emphatically to members being accommodated with longer terms to repay rather than going elsewhere to access loans. The Treasurer noted the points, thanked him for his contribution and suggested his being a part of the rejuvenated Liaison Officer programme in the Credit Union. In closing, the Treasurer thanked all members for the vibrant discussions and participation and then asked for a motion that the Treasurer’s Report and the Audited Financial Statements be accepted. Acceptance motion was moved by Coleen Grant and seconded by Lincoln Turner and carried. The Chairman thanked the Treasurer for the fulsome presentation. 8. MAXIMUM LIABILITY ALLOWANCE The Treasurer then brought the members’ attention to the proposal to move the Resolution that the Maximum Liability remain at 20 times the Capital of the Credit Union which has remained unchanged since the last two years. This resolution was moved by Revd. Garnett Kildare and seconded by N. C. Rhone and was carried.

On the observation of the threat to lose its quorum, the Chairman suggested to the meeting the need to amend the agenda and move for the Elections of Officers before the presentation of the Supervisory and Credit Reports. He then asked for a motion to amend the agenda. This was moved by Mr. Michael Edmondson and seconded by Mr. Phillip Thomas and was carried. 9. NOMINATION COMMITTEE REPORT The Chairman of the Nomination Committee, Mrs. Tamara Francis Riley-Dunn, informed the meeting that the committee met to consider all retiring volunteers from the Board of Directors, Supervisory and Credit Committees. She noted that the positions were advertised for volunteers to fill the vacancies. She explained that the term for Board Members Mr. Balvin Vanriel, Mrs. Leodis Douglas, Mr. Robin Levy and Mrs. Beverly Stewart had come to an end. She advised that all members, with the exception of Mrs. Beverly Stewart, who has indicated her unavailability to continue, have indicated their willingness to continue to serve for another term. In her stead, the Committee recommended Mr. Noel Francis, who has served the Credit Union for a number of years. The Committee Chairperson directed members to Mr. Francis’ CV which was located on page 144 of the book. The following persons were nominated to be elected to the Board of Directors: BOARD MEMBERS MR. BALVIN VANRIEL MRS. LEODIS DOUGLAS MR. ROBIN LEVY MR. NOEL FRANCIS

TENURE (YEARS) TWO TWO TWO TWO

In relation to the members of the Supervisory Committee, the Chairman noted that of the five volunteers, all, with the exception of Mr. David Dobson and Mr. Denver Dyce had expressed their willingness to return to serve for another term. She expressed thanks to Mr. Dobson and Mr. Dyce for their invaluable contribution over the period. She made note that Mrs. Esre Stewart Blake tendered her resignation from the Supervisory Committee and Mrs. Karla Stephens Hall joined in her stead in January 2016. She thanked Mrs. Stewart Blake for her contributions to the Credit Union. The CVs of the newly recommended persons were located in the book at page 145. The Committee nominated the following persons to be appointed to the Supervisory Committee: SUPERVISORY COMMITTEE MEMBERS MRS. BEVERLEY WILLIAMSON MR. LASCELLES ELLIS MRS. KARLA STEPHENS-HALL MRS. CAMILLE RICKETTS-MOORE MR. LUKE McINTOSH

TENURE (YEARS) ONE ONE ONE ONE ONE

Regarding the members of the Credit Committee, Mrs. Riley-Dunn noted to the meeting that there were three members are up for retirement. They were: Mr. Noel Francis, Mrs. Althea Daley and Ms. Faylene Foster. Of the three, only Mrs. Althea Daley had indicated her willingness to continue to serve on that committee for another term. She thanked Ms. Foster for her selfless service to the Credit Union over the many years with Mr. Francis being recommended to the Board of Directors. Mr. Pete Nesbitt and Ms. Angeline Mae Car were recommended to fill the vacated positions on the Credit Committee and their CVs could be located on page 146 of the book. The nominated members for the Credit Committee were as follows: CREDIT COMMITTEE MEMBERS MRS. ALTHEA DALEY MR. PETE NESBITT MS. ANGELINE MAE CARR

TENURE (YEARS) TWO TWO TWO

Mrs. Riley-Dunn then thanked the volunteers for their expression of willingness to serve and invited the Representative from the Department of Co-operatives and Friendly Societies to the podium to conduct the elections. 10. ELECTION OF OFFICERS

Mrs. Little of the Department of Co-operatives and Friendly Societies stated the names of the nominees of the Board of Directors and asked for any other nominations from the floor. Mr. Burke nominated Mr. Sean Hunter which was seconded by Mr. Harry Grant. Moving to the Supervisory Committee, Mrs. Little, after stating the names of the nominees of this committee, asked for any other nominations from the floor. After the third call, there being none, she announced that those nominated had been duly elected to serve on the Supervisory Committee for one year. With regard to the Credit Committee, Mrs. Little, after stating the names of the nominees, asked for any other nominations from the floor. There being none, those nominated were duly elected to serve for another two years. As it related to the Delegates, Mrs. Little asked for the motion to allow the Board of Directors to choose the representatives for Delegates and Alternate Delegates to the League. The motion was moved by Mrs. Althea Daley and seconded by Mr. Orville Hill and carried. Mrs. Little then instructed the members to add the name ‘Sean Hunter’ to the ballots and thereafter to select only four names on the ballots indicating their choice of the members to the Board of Directors. She then asked Mr. Hunter to stand and give a profile of himself. Mr. Hunter introduced himself as a former employee of the former GSB Co-operative Credit Union. After three and a half years, he moved to Fullgram Solutions. He noted that he had a Bachelor Degree in Information

Technology, Multimedia from the University of Technology, was a member of the Pentecostal Church; an upcoming gospel artiste, a poet and a teacher. He prides himself as active in many other civic organizations and is very involved with youth development in the inner city communities. The Chairman also invited Mr. Noel Francis to come forward and give a brief overview of himself. Mr. Francis informed the meeting that he served on the Credit Committee from former GSB Credit Union to present. He is a Quantity Surveyor as also a Commissioned Surveyor, Land Surveyor and a businessman. He is a recipient of the Order of Distinction from the Government of Jamaica. He volunteers in lecturing at the Engineering Department at the University of Technology. On the request of the Chairman, a motion to resume the Standing Order was moved by Ms. Althea Daley and seconded by Mr. Lincoln Turner. 11. CREDIT COMMITTEE REPORT On behalf of the Committee, the Chairman, Mr. Noel Francis welcomed all. He noted that during the year under review, the Credit Union had its fair share of challenges. He then spoke to the impact of the wage freeze in the Public Sector, which he indicated could have been a factor that affected the loan portfolio. He noted that a significant portion of loans distributed were for actual consumption and encouraged the membership to start looking also at production loans so that the country can move forward. He then asked for the motion to accept the report. This was moved by Mr. Lincoln Turner and seconded by Mr. Harry Grant. The Chairman then invited Mrs. Beverley Williamson, Chairperson of the Supervisory Committee to present her report. 12. SUPERVISORY COMMITTEE REPORT Mrs. Williamson, on behalf of the Committee, directed the members to the Report which was located on pages 135-138 of the booklet. She added her words of welcome to the members and apologized for two committee members who had to leave due to previous commitments. Notwithstanding the challenges noted in previous reports, Mrs. Williamson indicated her pleasure to have been associated with the Credit Union for another year and thanked management and staff for the milestone previously reported by the Treasurer. She reminded the members of the role of the Committee, which is one of supervision through the Internal Audit Department of the Credit Union. This, she noted, was critical as the team does not do actual audits. She expressed thanks to Mrs. Asre Stewart, a faithful and reliable member who served willingly, but resigned, and in the same breath welcomed Mrs. Karla Stephens-Hall, a qualified individual who replaced her.

In relation to matters addressed by the Committee throughout the year, Mrs. Williamson made note of the monthly activities such as bank reconciliations; matters addressed at the request of management; use of Receipt Books; Deceased Members Accounts; and scheduled matters as part of the audit plan which was agreed and approved. Mrs. Williamson informed the meeting that the Committee was not able to complete all matters identified on the plan due mainly to the special investigation of the micro and small business loan portfolio which had the Committee visiting all locations across the island where this service was offered. This area she noted was already discussed fully in other reports. She noted that work was also conducted on the Anti-Money Laundering or POCA regulations and reviewing how the Credit Union adhered to those regulations. She then opened the floor for any comments or questions. Mr. Burke questioned how long it took the Supervisory Committee to know of the matter with the micro and small loans. Mrs. Williamson responded that as soon as the matter was brought to their attention, the Internal Audit Department was deployed to address it. She noted that the review was not confined to one branch but island-wide. She advised the meeting that the matter came to the attention of management and management sought the input of the Audit Department.

At this point, the Chairman advised the meeting that there was no quorum and so the meeting was no longer duly constituted. He then explained that there can only be discussions as no decisions can be taken at this time. This meant that the Supervisory Committee Report could not be accepted nor the resolution concerning the rule amendments. These, he said, would have to be deferred for another meeting at a date and time that would be advised. He then re-invited Mrs. Williamson to continue her discussion of the Supervisory Committee Report. Ms. Bell commented that rather than members having to write and put in the Suggestion Box, a slip with areas previously considered with levels of satisfaction should be available for the member to just tick the area of complaint and place it in the Box. Mrs. Williamson noted the recommendation. Mr. Harris opined that if the matter concerning the micro and small business loans was reported to the appropriate authority before, then it should have been expressed in the report. Mrs. Williamson accepted the point made. At this time the outcome of the voting process for the Board was presented as follows: BOARD MEMBERS MR. BALVIN VANRIEL MRS. LEODIS DOUGLAS MR. ROBIN LEVY MR. NOEL FRANCIS MR. SEAN HUNTER

VOTES 90 92 91 82 34

Therefore duly elected to serve as Board of Directors for another term were Mr. Balvin Vanriel, Mrs. Leodis Douglas, Mr. Robin Levy and Mr. Noel Francis. The Chairman then thanked all members for the patience exercised and noted that though we were not able to complete everything, he looked forward to meeting with them to complete the agenda at another date of which they would be duly advised. 13. ADJOURNMENT The meeting adjourned at 7:26 p.m. on a motion moved by Mrs. Leodis Douglas and seconded by Mr. Balvin Vanriel.

MINUTES OF MEETING OF RECONVENED 4TH ANNUAL GENERAL MEETING FOR FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED HELD ON THURSDAY, JULY 21, 2016 AT THE FHC CAR PARK OF EUREKA ROAD AT 3:00 P.M

1. ASCERTAINMENT OF QUORUM AND CALL TO ORDER Having ascertained that a quorum was present, the Chairman, Mr. Balvin Vanriel, called the meeting to order at 3:01 p.m. Director Edmund Jones was then invited to read the Notice convening the meeting. 2. PRAYER, WELCOME AND APOLOGIES 28

Mr. Kevin Forbes led the meeting in prayer. The Chairman welcomed all members to the reconvened 4th Annual General Meeting of the Credit Union and informed them that this meeting was specifically called to complete two items that were not concluded at the AGM in May 2016. The Chairman then introduced, by name and positions, all Board members present, members of the Supervisory and Credit Committees, the CEO and the Executive Management team. The Chairman further apologized for those members who would be late and absent. 3. SUPERVISORY COMMITTEE REPORT The Chairman at this point invited the Chair of the Supervisory Committee, Mrs. Beverley Williamson, to complete the presentation of the Supervisory Committee’s Report, which was presented at the last meeting and extensively discussed, but was not confirmed. Mrs. Williamson then highlighted the following main points of the report: i. The role of the Supervisory Committee in the governance structure of the Credit Union. ii. During the period reviewed, monthly activities included bank reconciliations, affiliated accounts as well as requests for special investigations and routine audits. iii. One major issue that emerged was the special investigation conducted in respect of the micro and small business loan unit. As a result, certain changes were implemented by management and the procedural manual updated to reflect the changes. In other areas the matter was reported to the authorities for appropriate action.

A motion for the acceptance of the Supervisory Committee Report was moved by Rudolph Jackson and seconded by Novelette Daley and was carried. 4. RESOLUTION FOR AMENDMENT TO RULES The Chairman thanked Mrs. Williamson for the presentation and then invited the Chairman of the Rules Committee, Mrs. Leodis Douglas, to present the Resolution for Amendments to the Rules that were being proposed to the Meeting. In her preamble Mrs. Douglas reminded the meeting that from time to time the Credit Union rules are inspected to ensure that they are free from errors; to remove any ambiguity; to avoid repetitions and to make clarifications. Additionally, she advised of the need to assess the rules in order to modernize for greater efficiency and to bring the rules and practices in alignment with the requirements of the regulators. She then read the following resolution: Resolution for Changes to the Rules Rationale: Whereas The Rules of the Credit Union are reviewed from time to time to ensure that they are free from errors; and Whereas There may arise, from time to time, the need to make amendments to the rules to remove ambiguity, to avoid repetition and to make clarifications; and Whereas There is a necessity to make changes to the Rules of the Credit Union, in particular: •

Be it resolved that definition of “Desk Officer” at Item (x) in the Interpretation Section which currently reads: (x) “Desk Officer” is any person elected by the Board of Directors to any of the positions named in Article XI Rule 35. Be amended to match that in the Act to read: (x) “Executive of the Board” is any person elected by the Board of Directors to any of the positions named in Article X Rule 34.

•

Be it resolved that the definition of “Deferred Shares” at Item (xv) in the Interpretation Section which currently reads: (xv) “Deferred Shares” shall mean Shares issued at no par value and paid up in cash, and shall be held by a member for a period of not less than five (5) years. Such Shares shall be paid in cash and issued with such rights and restrictions as outlined in these Rules. Deferred Shares shall bear interest at a rate to be determined by the Board of Directors from time-to-time. Be amended to clarify unit of definition to read: (xv) “Deferred Shares” shall mean Shares issued at a unit value and paid up in cash, and shall be held by a member for a period of not less than five (5) years. Such Shares shall be paid in cash and issued with such rights and restrictions as outlined in these Rules. Deferred Shares shall bear interest at a rate to be determined by the Board of Directors from time-to-time.

•

Be it resolved that the definition for “Permanent Shares” at Item (xvi) in the Interpretation Section which now reads: (xvi) “Permanent Shares” shall mean Shares issued at no par value, paid up in cash and invested as risk capital and shall form part of the permanent capital of the Credit Union. Such Shares are issued with such rights and restrictions as outlined in these Rules. Dividend and/or interest may be paid thereon.”

Be amended to clarify the unit of definition and to remove the notion that interest is paid on Permanent Shares to read: (xvi) “Permanent Shares” shall mean Shares issued at a unit value of one dollar ($1) per share, paid up in cash, invested as risk capital and shall form part of the permanent capital of the Credit Union. Such Shares are issued with such rights and restrictions as outlined in these Rules. Dividend may be paid thereon.” •

Be it resolved that at Article I Rule 3 a new rule (to be item f) has been inserted to allow the Credit Union to invest in a wholly owned Subsidiary which reads: 3.

f) To invest in a Subsidiary that is wholly owned by the Credit Union.

Subsequently the rule sub-numberings following have been amended. •

Be it resolved that at Article II Rule 4 a new rule (to be numbered item g) has been inserted to allow, after a merger with another Credit Union, for eligible persons to be automatically considered as members, to read: 4. g) All members and persons eligible to be members of the Credit Union that have merged with this Credit Union, provided that any person that is being admitted to membership has attained the age of sixteen (16) years.

Subsequently the rule sub-numberings following have been amended. •

Be it resolved that at Article II Rule 4 a new rule (to be numbered item i) has been amended to open the bond, to read: 4. i) All persons of good character of the age permitted by the Co-operative Societies Act Subsequently the rule sub-numberings following have been amended.

•

Be it resolved that Article III Rule 5 a) iii) which now reads: 5. a) iii) Agreement to subscribe for Permanent Shares with a nominal value of Two Hundred and Fifty Dollars (J$250.00), Ordinary Shares with a nominal value of Two Hundred and Fifty Dollars or such amount that is to be determined from time-totime; subject to the approval of the Board of Directors, Payment of a non-refundable Entrance Fee of Seven Hundred Dollars (J$700.00), or as may be determined from time to time by the Board of Directors. Be amended to reflect the proposed change in the value of Permanent Shares, Ordinary Shares and Entrance Fees associated with qualification of membership in the Credit Union. It also ensures that it states clearly which can be changed by the membership and which by the Board of Directors and should read: 5. a) iii) Agreement to subscribe for Permanent Shares with a nominal value of Two Thousand Five Hundred Dollars (J$2,500.00) subject to the approval of the membership. Ordinary Shares with a nominal value of Two Hundred and Fifty Dollars (J$250) or such amount that is to be determined from time-to-time; subject to the approval of the Board of Directors. Payment of a non-refundable Entrance Fee of Seven Hundred Dollars (J$700.00), or as may be determined from time to time by the Board of Directors.

•

Be it resolved that Article III Rule 5 b) ii) which now reads: 5. b) ii) His application for membership shall have been approved by the affirmative vote of a majority of the Directors or a majority of the members of a duly appointed and authorized meeting at which the application is acted upon. Be amended to allow Management to approve applicants for Membership in the Credit Union and said applications to be ratified by the Board of Directors, to read: 5. b) ii) His application for membership shall have been approved by Management as defined by the relevant policy and ratified by the affirmative vote of a majority of the Directors or a majority of the members of a duly appointed and authorized meeting at which the application is acted upon.

•

Be it resolved that Article III Rule 5 b) iv) which now reads: 5. b) iv) He shall have qualified as a member by paying an Entrance Fee of Seven Hundred Dollars (J$700.00) or an amount to be prescribed by the Board of Directors from time to time and subscribing to at least one (1) unit of Permanent Shares with a nominal value of Two Hundred and Fifty Dollars (J$250.00) or such amount to be determined from time-to-time. Be amended for the same reason as Rule 5 a) iii), to read: 5. b) iv) He shall have qualified as a member by paying an Entrance Fee of Seven Hundred Dollars (J$700.00) or an amount to be prescribed by the Board of Directors from time to time and subscribing for Permanent Shares with a nominal value of Two Thousand Five Hundred Dollars (J$2,500.00) or such amount to be determined from time-to-time.

•

Be it resolved that Article IV Rule 6 b) which now reads: 6. b) A member may resign his membership by withdrawing or disposing of his shareholdings provided that no member may resign while a borrower, an endorser or a guarantor of any loan due to the Credit Union. Be reworded to clarify the actions for resigning one’s membership and should now read:

•

A member may resign his membership by: i. Withdrawing his Ordinary Shares; and ii. Disposing of his Permanent Shares by selling to another member, In keeping with Rule 14.

Be it resolved that Article IV Rule 9 b) which now reads: 9. b) on ceasing to hold at least one (1) Permanent Share; provided that the Credit Union shall issue at least three (3) months’ notice before termination of membership Be amended to reflect the treatment of Permanent Shares to read: 9. b) on ceasing to hold at least the required nominal value of Two Thousand Five -Hundred Dollars in Permanent Shares; provided that the Credit Union shall issue at least three (3) months’ notice before termination of membership

•

Be it resolved that Article VI Rule 12 which now reads: 12. The maximum amount of shares which may be held by any one member shall not exceed twenty percent (20%) of capital, as defined in Article VI, Rule 11.

Be amended to reflect that only Permanent Shares are being considered to read: 12 The maximum amount of Permanent Shares which may be held by any one member shall not exceed twenty percent (20%) of capital, as defined in Article VI, Rule 11. •

Be it resolved that Article VI Rule 14 a) vii) which now reads: 14. a) vii) No member should hold in excess of 20% of the share capital of the Credit Union. Be amended to reflect that only Permanent Shares are being considered to read: 14. a) vii) No member should hold Permanent Shares at a value in excess of 20% of the share capital of the Credit Union.

•

Be it resolved that Article VI Rule 14 b) ii) which now reads: 14. b) ii). Deferred Shares are not guaranteed by the funds administered by the Stabilization Fund operated by the Jamaica Co-operative Credit Union League Limited Be deleted because it is redundant and subsequent sub-rules be renumbered.

•

Be it resolved that Article VI Rule 14 b) iii) which now reads: 14. b) iii). A penalty shall be levied for the redemption of any amount of Deferred Shares prior to the expiration date and at a rate and scale to be determined by the Board of Directors Be deleted because Deferred Shares are an instrument with a limited tenure and are regarded as non-redeemable.

•

Be it resolved that Article VII Rule 17 e) which now reads: 17. e) Deposits shall be received from members only Be amended to allow for the acceptance of deposits from other Credit Unions, other Co-operatives and Friendly Societies to read: 17 e) Deposits shall be received from members, other Credit Unions, and other Cooperative and Friendly Societies.

•

Be it resolved that Article VIII Rule 18 which now reads: 18 a) Money paid in or paid out on account of Ordinary, Permanent or Deferred Shares, deposits, loans, interest, entrance or transfer fees or other savings shall be

evidenced by an appropriate voucher or receipt. Each voucher or receipt shall identify the person receiving or paying out, on behalf of the Credit Union, and the money represented thereby. b) When a Statement of Account or Receipt is issued, the member's permanent official record for transactions shall be the Statement of Account or Receipt, which will itemize all transactions and which must be issued to each member at the time of each transaction. Be removed as this article addressed the issuing of receipts and is an operational consideration and not necessary for inclusion in the Rules. Consequently all subsequent Articles and Rules have been renumbered. To ensure that there is no confusion, Rules will be identified by their old (existing) numbers. Where Rules below Rule 18 are referenced, the referenced Rule has been changed. •

Be it resolved that Article IX Rule 23 which now reads: 23. Rates of interest shall be fixed from time to time by the Board of Directors to provide members with the best possible rates. Be amended to change “fixed” to “determined” and to read: 22. Rates of interest shall be determined from time to time by the Board of Directors to provide members with the best possible rates.

•

Be it resolved that Article IX Rule 25 which now reads: 25. Subject to the Credit Policy laid down by the Board of Directors from time to time, the amount of each loan, the period of repayment, and the form and value of the security, if any, shall be determined by the Credit Committee. However, the Credit Committee shall have the right to refer any loan to the Board of Directors for a final decision. Be amended to remove the ambiguity about how loan applications are decided on, to read: 24. The Credit Committee shall make a decision on the outcome of a loan application subject to the amount of each loan and any other condition subject to the Credit Policy as laid down by the Board of Directors from time to time, The Credit Committee, however shall have the right to refer any loan to the Board of Directors for a final decision.

•

Be it resolved that Article X Rule 27 which now reads: 27. The business of the Credit Union shall be conducted by the Board of Directors, which shall be elected at the Annual General Meeting of the Credit Union and shall consist of no fewer than nine (9) nor more than fifteen (15) members, all of whom shall be members of the Credit Union, provided that the number of members comprising the

Board of Directors shall at all times be an uneven number with no gender bias. Each member shall hold Office until his successor is elected, unless he demits office earlier or has been expelled, and shall be eligible for re-election. No officer of the Board of Directors shall serve in the position of Desk Officer for more than three (3) consecutive terms. However, such member will be eligible to serve once he sits out a period of one (1) year or until the next Annual General Meeting. No member of the paid staff shall be eligible for election to the Board of Directors. Be amended to include term limits for Members of the Board of Directors to read: 26. The business of the Credit Union shall be conducted by the Board of Directors, which shall be elected at the Annual General Meeting of the Credit Union and shall consist of no fewer than nine (9) nor more than fifteen (15) members, all of whom shall be members of the Credit Union, provided that the number of members comprising the Board of Directors shall at all times be an uneven number with no gender bias. Each member shall hold Office until his successor is elected, unless he demits office earlier or has been expelled, and shall be eligible for re-election. No member of the Board of Directors shall serve for more than three (3) consecutive terms. However, such member will be eligible to serve once he sits out a period of one (1) year or until the next Annual General Meeting. No member of the paid staff shall be eligible for election to the Board of Directors. •

Be it resolved that Article X Rule 30 b) which now reads: 30. b) Every member of the Board of Directors shall, before taking part in any business of the Board be required to disclose any personal interest in or arising out of that business, and after considering such disclosure it shall be for the Board of Directors to decide whether such Board member shall take part in the discussion and vote upon the item of business in which he has disclosed an interest. Be amended to remove ambiguity to read: 29. b) Every member of the Board of Directors, before taking part in any business brought before the Board in which the Director has a personal interest, shall be required to disclose any personal interest in or arising out of that business, and after considering such disclosure it shall be for the Board of Directors to decide whether such Board member shall take part in the discussion and vote upon the item of business in which the Director has disclosed an interest.

•

Be it resolved that Article XI Rule 35 which now reads: 35. The Board of Directors shall elect a Chairman, a First Vice-Chairman and a Second Vice-Chairman, a Treasurer, and a Secretary. This team shall hereinafter be referred to as the Executive of the Board. The Chairman in accordance with Article XV, Rule 59, and the said Executive shall hold Office until their successors are elected.

Be amended to change reference to Article XV, Rule 59 to read: 34. The Board of Directors shall elect a Chairman, a First Vice-Chairman and a Second Vice-Chairman, a Treasurer, and a Secretary. This team shall hereinafter be referred to as the Executive of the Board. The Chairman in accordance with Article XIV, Rule 58, and the said Executive shall hold Office until their successors are elected. •

Be it resolved that at Article X a new rule (to be numbered 36) has been added to give term limits to Executives of the Board which reads: 36. No Executive of the Board shall serve on the Board of Directors in the same capacity for more than three (3) years. Consequently the rule numberings following have been amended

•

Be it resolved that Article XII Rule 40 b) which now reads: 40. b) Subject to the provisions of Rule 42, at the first Annual General Meeting a bare majority of the members constituting the Committee shall be elected for a term of two (2) years, and the others for a term of one (1) year. Whenever the number of members of the Committee is increased, one-half of such additional members shall be elected for two (2) years and one-half for one (1) year. Thereafter, the term of Office for the Committee Members shall be for two (2) years.

Be amended to reflect a change in reference from Rule 42 to read: 40. b) Subject to the provisions of Rule 41, at the first Annual General Meeting a bare majority of the members constituting the Committee shall be elected for a term of two (2) years, and the others for a term of one (1) year. Whenever the number of members of the Committee is increased, one-half of such additional members shall be elected for two (2) years and one-half for one (1) year. Thereafter, the term of Office for the Committee Members shall be for two (2) years. •

Be it resolved that at Article XIII Rule 44 a new rule (to be numbered 44 b) has been added which now reads: 44. b) Any member of the Committee who, without due excuse approved by the Committee, fails to attend three (3) consecutive meetings of the committee, shall be deemed to have vacated his office. Subsequently items b & c have been renumbered items c & d accordingly.

•

Be it resolved that Article XIV Rule 50 b vi) which reads: 50

b vi) Maximum limit of borrowing by the Credit Union

Has been amended to include determination by the Regulator to read: 50 b vi) Maximum limit of borrowing by the Credit Union as determined by the Regulator from time to time •

Be it resolved that Article XVII Rule 62 a) which now reads: 62 a) At least twenty (20) per cent shall be carried to the Reserve Fund in accordance with Article XVI, Rule 60 (a) Has been amended to reflect a change in reference from Article XVI, Rule 60 (a) to now read: 62 a) At least twenty (20) per cent shall be carried to the Reserve Fund in accordance with Article XV, Rule 60 (a)

•

Be it resolved that Article XVIII Rule 63 a) which now reads: 63. a) The funds of the Credit Union may be deposited in any bank licenced under the Banking Act and operating in accordance with the laws of Jamaica, and in central-type Credit Union organizations Be amended to allow deposit of funds to another Credit Unions and the Central Bank, to read: 63 a) The funds of the Credit Union may be deposited in any bank licenced under the Banking Act and operating in accordance with the laws of Jamaica; in any Credit Union and central-type Credit Union organizations; and in the Central Bank.

•

Be it resolved that Article XVIII Rule 65 which reads: 65. In addition to provision made in Article VII Rule 18 (a) of these Rules, all disbursements of funds of the Credit Union shall be made by cheques or other written instruments signed by such duly authorized person(s) as the Board of Directors by resolution shall determine, from time to time. Be deleted. Consequently all subsequent Rules have been re-numbered.

•

Be it resolved that Article XXI Rule 69 b) which now reads: 69. b) The Seal of the Credit Union shall not be affixed to any document except by the authority of a resolution of the Board of Directors and in the presence of at least two members of the Board of Directors.

Be amended to indicate that only certain documents require the affixing of the Credit Union’s seal to read: 68 b) The Seal of the Credit Union shall not be affixed to any class or type of document except authorized by a resolution of the Board of Directors. •

Be it resolved that Article XXI Rule 69 c) which now reads: 69. c) The Board may, by resolution authorize any two members of the Board to sign under the Seal of the Credit Union and the two members of the Board shall sign every document to which the Seal of the Credit Union is affixed in their presence. All such signing and sealing must be ratified at the next meeting of the Board. Be amended to remove any ambiguity about how the affixing of the seal is to be witnessed and reported to read: 68. c) Any two members of the Board may, sign under the Seal of the Credit Union on every document to which the Seal of the Credit Union is affixed. All such signing and sealing must be ratified at the next meeting of the Board.

BE IT RESOLVED that at this Reconvened AGM of First Heritage Cooperative Credit Union Limited held on July 21, 2017 that the following resolution/rules be passed by special majority vote by the members of the First Heritage Cooperative Credit Union Limited present and voting in keeping with the Rules and the Cooperative Societies Act and Regulations. She then took the meeting through the explanation of each amendment and at the end asked members to table any questions or comments they had before the motion. Member Harry Grant made the comment that there were a number of amendments and he had not been able to study all of them. He however expressed concern about others wanting to regulate the Credit Union, which had now led to us adjusting the rules. Mr. Kelly, another member, expressed concurrence with his fellow member Mr. Grant. He added that his concern lies in the authority of signing under the seal being eventually moved to management and not by special individuals or the directors. Mrs. Leodis Douglas reassured the member that the seal is not affixed on every document but only on specific special documents. Mr. Robin Levy made further clarifications that the Credit Union uses the seal for instances such as to stamp mortgages and those have to be affixed with the signatures of the Directors only. He noted that it is not a management issue but is used for specific instances and circumstances in which the seal binds the Credit Union, is signed by two directors of the Board and then ratified subsequently by the full Board to avoid potential abuse.

He went on further to speak about the fact that, as expressed, many may be seeing this resolution for the first time. He apologized for this, but hastened to add that these amendments were circulated at the AGM which was held on the 12th May, 2016, and therefore had been posted for over two months. He assured members that the Board fully considered the recommendations, with the input of members, staff members and the Registrar of Co-operatives and Friendly Socities. Member Verice Campbell noted that the word ‘may’ should be replaced with the word ‘shall’ for ‘two members of the Board may sign under the seal of the Credit Union’. Mrs. Leodis Douglas thanked her for the correction and made note that it will be adjusted to ‘shall.’ Mr. Kelly, member, thanked Mr. Robin Levy for the clarity given but still viewed voting on that resolution as premature. One member made note that the agenda of the general meeting should be circulated to all members to which Mrs. Leodis Douglas responded that the notice was sent out via text messages and the printed media for over two weeks in accordance with the Rules. Member Ms. Cessna McLean informed the meeting that although the resolutions were available at the AGM, many did not receive them nor did they receive the AGM booklets. Mrs. Leodis Douglas responded that this comment was noted. There being no further comments, Mrs. Leodis Douglas thanked all members for their contributions and comments and invited a motion to vote on the Resolution. The motion was moved by Novelette Daley and seconded by Delores Johnson and carried. She then invited the Representatives from the Co-operative Society to take the meeting through the vote. Representatives from the Department of Co-operatives and Friendly Societies then asked for members through a show of hands and subsequently through standing to indicate their vote. The resolution was then passed. Based on total attendance of one hundred and eighty one members present, the outcome was noted as follows: FOR: 150 AGAINST: 2 ABSTAIN: 29 At this point, the Chairman thanked Mrs. Leodis Douglas and the representatives of the Department of Co-operative and Friendly Societies. At this juncture, he acknowledged member Mrs. Sylvia Roache who was celebrating her 94th birthday on that day. She stood and all members applauded her. 5.

ANY OTHER BUSINESS Member Mr. Kelly expressed concern of a vote via show of hands and then another vote via standing. The Chairman explained that as some members were not putting up their hands visibly enough it was considered best to conduct the vote by standing. With all members standing at each call, the votes tallied.

The Chairman made note of the timeline in conducting the meeting, which exceeded the hour by 10 minutes and thanked the members for their excellent participation. He then invited Mr. Edmund Jones to give the Vote of Thanks.

VOTE OF THANKS Mr. Edmund Jones expressed profound thanks to the members who turned out despite the heat, for, without them, the meeting could not have been convened. He thanked those who attended both meetings; that of May 12 and today and noted the liveliness and the pertinent questions that were posed. He expressed thanks to the team members, and management for the hard work put in to ensure a successful meeting. He thanked all members of the various committees and their chairs for their contributions to the AGM. Finally, he thanked the Treasurer and the President for their presentations and wished everyone God’s blessings and good journeying mercies as they departed.

TERMINATION The meeting terminated at 4:15p.m.

MR. BALVIN VANRIEL CHAIRMAN Mr. Balvin Vanriel is currently an Audit Manager with the auditing firm BDO Chartered Accountants. He is a qualified Accountant, a Fellow with the Institute of Chartered Accounts of Jamaica and a member of the global body for professional accountants - The Association of Chartered Certified Accountants (ACCA). He is also a Registered Public Accountant. He serves as an Associate Minister in his denomination and chairs the Finance Committee. He is currently the Chairman of Board of Directors of FHC and FHC Investments Limited. He is married with two children. MR. O’NEIL GRANT 1st Vice-Chairman

Mr. O’neil Grant presently serves as the President of the Jamaica Civil Service Association, a position which he has held since June 2011. He is a committed public servant and has held several senior positions in various Ministries and Public Service, including now sitting on the Board of the National Housing Trust. He is a trained Accountant and Financial Analyst with over 26 years of experience in his chosen profession. A consummate professional with high ambitions, he currently holds an Executive MBA from the Mona School of Business. He currently serves as 1st Vice Chairman on the Board at FHC, Chairman of the FHC Foundation. 2nd Vice President at JCCUL and Vice President of the Jamaica Confederation of Trade Unions. MR. EDMUND JONES 2nd Vice-Chairman Mr. Edmund Jones is a retired career Civil Servant. Although he began his career in Accounts and Auditing, he transitioned through Statistics and General Administration into Information Technology. He began his volunteerism with GSB CCU in 2000 and has served on many Boards, including Quality Networks, Creative Production and Training Centre and the Jamaica Paralympic Association. Since his retirement, Mr. Jones has welcomed the opportunity to use his new-found time to the benefit of his volunteer activities. He also does short-term consulting for small and medium businesses as well as teaching. He is married, with two children and he enjoys reading and playing chess.

MR. ROBIN LEVY Treasurer Mr. Robin Levy is currently employed as the Deputy General Manager for the Jamaica Stock Exchange, a position he has held since 2005. He is an innovative business manager, specializing in financial services, risk management and project management. He has over 30 years of experience in management consulting, financial analysis and business development. Prior to joining the Jamaica Stock Exchange, he served as Manager – Consulting Services at the Jamaica Co-operative Credit Union League Limited. He is a Certified Fraud Examiner and holds a Masters of Business Administration Degree in Finance from the Marist Business School, Poughkeepsie, New York. He currently serves as a volunteer in the capacity as Treasurer on the Board of Directors at FHC and sits on several other Boards. MR. KEVIN FORBES Assistant Treasurer Mr. Kevin Forbes is currently employed to Cable and Wireless Jamaica Limited, a subsidiary of Liberty Global, as the Finance Manager. He has extensive experience in the field of Audit and Accounts, having worked in various management capacities within the Grace Kennedy Group of Companies and with Ernst & Young Caribbean. He holds a Masters of Business Administration in Finance from the Manchester Business School, United Kingdom, and is a Fellow of the Association of Chartered Certified Accountants as well as a Member of the Institute of Chartered Accountants of Jamaica. He previously served on the Credit Committee. MRS. LEODIS DOUGLAS Secretary Mrs. Leodis Douglas is currently a Human Resource Director and Lecturer at GC Foster College of Physical Education and Sport. In this capacity, Mrs. Douglas is charged with the responsibility of guiding and managing the overall provision of Human Resource services, policies and programs for the college. Mrs. Douglas is the holder of a Masters of Business Administration from Florida International University, a B.Sc. in Human Resources Management, graduating summa cum laude, and a Diploma in Secondary Education with Honours. She presently volunteers as Secretary on the Board of Directors of FHC and is the Chairman of the Retirement Scheme Board of Trustees. Mrs. Douglas lists her hobbies as singing, reading and socializing. She is married with three children.

MR. NOEL FRANCIS, O.D. Assistant Secretary Mr. Noel Francis is an Associate of the Royal Institution of Chartered Surveyors, a Commissioned Land Surveyor and a Class 1 Hydrographer. His work experience includes the management of the Survey Department as Deputy Director of Surveys, Consultant to the Commonwealth Secretariat and the United Nations. He also serves as a Lecturer at the University of Technology. He currently owns and operates his own businesses Franmark Company Limited, which is a Food Distribution business and Prime Dairy which is a Money Remittance Business. Educated at the University of the West Indies, University College London, University of Toronto and Nova University, Mr. Francis’ qualifications include a Bachelor of Sciences Degree and a Masters of Business Administration. Mr. Francis currently serves on the Board of the Jamaica Copyright Agency as Treasurer and has served as Chairman of the FHC Credit Committee. Mr. Francis has been honored by the Jamaican Government with an Order of Distinction.

MRS. TAMARA FRANCIS RILEY-DUNN Director 44 Mrs. Tamara Francis Riley-Dunn has over 13 years of experience as a legal practitioner in Jamaica. She specializes in commercial law (with an emphasis on debt consolidation), conveyancing and family law. She is an honours graduate of the University of the West Indies and also of the Norman Manley Law School, where she received her Certificate of Legal Education.

SSP MICHAEL JAMES Director Mr. Michael James is a retired Senior Superintendent of Police, a former Chairman of the Police Officers Association and a past Divisional Commander of St. Thomas. He has received numerous awards including the Medal of Honour for Meritorious Service, the JCF Distinguished Service Award for the Development of Police Youth Clubs in Jamaica, as well as being named the Lasco Police Officer of the Year 2000 and a Past President of the Kiwanis Club of St. Thomas. In his spare time Mr. James likes singing, listening to music, reading, playing table tennis, dominoes and cricket.

he financial year ending 2016 was a very challenging one for our Credit Union, considering the competitive environment in which we operated. We were faced with strong competition from our counterparts in the industry, as interest rates fell to an alltime low and financial institutions competed aggressively for market share. The competitive interest rate environment not only presented challenges for us, but was a major challenge generally experienced by all players in the financial sector. Some industry players also experienced low loan disbursement levels and generally lower than expected growth in savings.

There was some amount of uncertainty at the start of the year with the change of government and the threat of a renegotiated International Monetary Fund Agreement. Many Jamaicans however, remained hopeful with the promises of a new government and a renewed focus on growth and prosperity for the economy. During the year, the indicators in both the micro and macro economies showed favorable signs of improvement with the lowering of interest rates internationally and locally. This resulted in marginal increase in business activity as consumers took advantage of the opportunities to borrow even as the growth signs showed slight increases. 45 The country experienced a single digit point to point inflation rate of 1.7%, the lowest over the last four decades and significantly less than the 3.7% reported at the end of 2015. The Net International Reserve (NIR) closed the year at US$2,719.37M when compared to US$2,437.27M at the end of 2015. At the start of the year, the weighted average selling rate for the USD was at JA$120.42:US$1 which depreciated to JA$128.44: US$1 by the end of the year. This translated to a 6.70% decline in the value of the JMD relative to the USD. During the year, the Bank of Jamaica (BOJ) maintained its policy benchmark interest rate of 5%. As a result of the volatility in the foreign exchange rate, the Central Bank initiated measures that relaxed liquidity and resulted in a fall in the Treasury Bill rates. At the start of the year, the 30 day Treasury Bill rate was 5.96% when compared to 5.64% at the end of 2016, the 90 day rate was 5.96% when compared to 5.68% at the end of 2016, while the 180 day rate was 6.04% when compared to 6.56% at the end of 2016. This showed an average decline of 0.13% in Treasury Bill rates since the start of the year 2016. We anticipate that in light of the series of successful passing of the International Monetary Fund (IMF) Extended Facility Agreement tests, and as confidence returns to the Jamaican economy with small signs of growth and improvements in the country’s debt to Gross Domestic Product ratio, we should see more foreign investment and more spending in the economy.

As the wage restriction of Public Sector Workers was lifted in 2015, it is our hope that our members will save more and also spend more than they did in previous years. Despite these challenges, our members, volunteers and team members remained faithful to our vision and mission. BOJ Preparations We continued throughout the year with executing initiatives in preparation for the impending BOJ regulations. At the start of 2016 we established a group-wide Risk and Compliance Division and appointed a Manager – Risk and Compliance (Legal and Regulatory) with responsibility spanning the Credit Union Group reporting directly to the Chief Executive Officer and a Risk Management Committee. The Board of Directors has overall responsibility for the establishment and oversight of FHC’s risk management framework. The Board is committed to establishing an organizational culture that ensures risk management is embedded in the activities and business processes of FHC. We will continue to improve this aspect of the business in 2017. Corporate Governance

During the year, the Board of Directors attended two Corporate Governance (CG) sessions. With the assistance of an external facilitator, we developed a CG Policy, Board Charter and Terms of Reference for Board Sub-Committees and a Director’s Evaluation system. In 2017, we will be completing our Code of Ethics manual. With these now in place, the Board of Directors have the requisite documented guidelines to facilitate even more effective Corporate Governance practices. Loan Portfolio Throughout the latter part of the year, the Credit Union experienced a higher than expected loan loss provisioning due to the increase of the non-current loans in the Micro and Small Business Portfolio as well as the general loan portfolio. This, coupled with low disbursements levels, significantly impacted our surplus for 2016 which resulted in us ending the year with a Net Deficit position. The deteriorating state of our Loan portfolio meant that we had to employ several new strategies to combat this situation and engaged the services of additional external collection agents to assist with improvements. Though the improvements were marginal, we recognize the efforts of the team members and will continue more aggressively with those strategies in 2017.

FHC INVESTMENTS LIMITED Our wholly owned subsidiary, FHC Investments Ltd (FHCIL), continues to offer investment options to our savvy investors. Now eight (8) years in operation, FHCIL currently manages a portfolio of $4.17B, which continues to expand. During the year, Wealth Advisors were assigned to FHC branches to provide investment products and wealth building opportunities to our Credit Union membership. Despite a challenging local and global economic climate and increased competition, FHCIL has delivered improved performance over the previous year. The Funds Under Management grew by 43% year over year and the company recorded net profit before tax of $19.2M expressing a return on equity of 14.76%. As the Administrators and Investment Managers of the Credit Union’s Retirement Scheme, FHCIL also recorded an impressive year for the Retirement Scheme. Net assets available for benefits grew by 21% from $632.5M at the end of 2015 to $764.9M (unaudited) at the end of 2016. Finally, after several attempts, FHCIL was also able to mobilize a quorum to facilitate the long-awaited Participants Meeting held on September 14, 2016. This effectively allowed for critical amendments to the Rules of the Scheme which will make it more beneficial to its members. With most economic indicators, especially the growth and employment rates pointing in the right direction, we expect stability in the private pension industry and continued growth in CCCU Retirement Scheme. As the Jamaican economy continues to improve we are confident that FHCIL will benefit from the opportunities that will develop and will continue its positive trend of growth. The subsidiary also intends to continue to improve its products, service delivery and operational efficiency for the benefit of its clients. FHC FOUNDATION Our Foundation’s mission is to promote the development of Jamaica’s youth, in particular disadvantaged children and young people, through education, sport and community involvement and creating opportunities for growth towards the advancement of nation building. In 2016, the Foundation continued its efforts in this regard and executed its annual initiatives. The Annual Scholarship Awards function was held at the FHC Training Centre on August 26, 2016. Seventeen (17) students were awarded a total of Two Million, Seven Hundred & Ten Thousand Dollars ($2,710,000.00) in Scholarships and Grants, namely the GSAT, Oswald Thorbourne, Renald Mason, Special Grant and the Entrepreneurship Awards. We are very pleased with the performance of the recipients of these awards and grants and encourageour members and children of members to seek every opportunity to access these benefits. We are proud of our heritage and will continue to embrace the culture of being a good corporate citizen.

THE FINANCIAL PERFORMANCE At the end of December 2016, the Credit Union Group’s Assets stood at $10.2B with a Net deficit of $44.2M. As the business continued to align itself to improve the various key financial ratios to meet the pending Bank of Jamaica Regulations, several measures were implemented. These measures included, among other strategies, an aggressive drive to increase our loan portfolio while offering our members value added loans and savings products, as well as instituting several cost-cutting measures. Our strategies for 2017 will continue to place emphasis on improving the performance of the business as we place our “Members at the Center” by ensuring we remain true to the promise of our Value Proposition 5-24- Lifetime. Our key strategies over the next three years include our drive to improve our key performance ratios, ensuring that our members’ needs are not just being met but exceeded and tailoring our products and services to meet the growing needs of our members. We remain committed to our mission to be a world class financial institution as we strive to remain globally competitive in the 21st century.

The Board of Directors expresses appreciation to all our members and key stakeholders and look forward to your continued support as we work together to make FHC and its Subsidiary an even stronger financial institution for the members we serve.

ATTENDANCE AT BOARD OF DIRECTORS MEETINGS NAME

POSITION

SCHEDULED

ATTENDED

EXCUSED

Balvin Vanriel

Chairman

O’Neil Grant

1st Vice Chairman

Edmund Jones

2nd Vice Chairman

Robin Levy

Treasurer

Kevin Forbes

Assistant Treasurer

Leodis Douglas

Secretary

Noel Francis****

Assistant Secretary

Tamara Francis Riley-Dunn

Director

SSP Michael James

Director

****Note: Noel Francis joined the Board mid-2016, to replace Mrs. Beverly Stewart, whose tenure with the Board ended in May 2016.

t was Henry Ford who said “Coming together is a beginning; keeping together is progress; working together is success”.

I am happy to be here, greeting you as one of the newest members of the First Heritage Cooperative Credit Union Family. Having joined just four and a half months ago, I am still learning the ropes, but one thing I know is that in the words of Henry Ford, we will keep together for progress and work together for success. I look forward to leading the FHC team in our mission and meeting the evolving needs of our members. My vision for FHC is to grow and advance our organization, our Credit Union. We have an action plan founded on ensuring the financial wellbeing of all FHC members. It is based on the principle of strengthening familial bonds and experiences as we interact with each other. As we focus on strengthening the FHC family our principal aim is to provide a place where our members share their plans and dreams with people they can depend on.

50 We want our members to come to us with their dreams, their plans, so we can strategically provide expert advice and support them to make responsible, progressive decisions to realize their goals. Here at FHC, partnership is a key word. We want to partner with you our members to build a sustainable future. The reality is there are a lot of economic pressures around us – I don’t think anyone of us has been left unscathed by rising prices, not to mention property tax increases. But the good thing is, FHC is here to help. Our job is to lift those among us who may fall, and seek to guide every one of you to a bright and secure future. Life as we know is not static… there are good days, bad days, challenging days, and too few easy days. We know too that there are many things which we do not and cannot control. However, one thing which we can control is the nature of our partnerships and the maintenance of relationships that assist us to secure our future.

Roxann Linton Chief Executive Officer

Members, FHC is here, ready and waiting to offer YOU the security of a trusted relationship with a financial family, geared at securing the financial future of us all.

We live in a fast-paced environment; we are in a time when things are rapidly evolving around us. As such, in the first three months of this year, the FHC team made major adjustments in response to your changing needs. I want to “big up” the team here at FHC for the phenomenal work they are doing to build on our strengths and return our organization to a position where you, our members get your annual distributions. The changes we are making are based on five specific strategies. 1. FHC has committed to keeping you our ‘Members at the Centre’ of everything we do. As the owners of the FHC you are central to our existence. By keeping you at the centre of our focus, we work harder to ensure healthy returns on investments in short order. New products and services have been developed for your convenience. These include the FHC’s ‘Cash in a Flash’ offering, which responds to your emergency situations. 2. FHC’s sales and service environment and ethos have been reviewed. As we seek to improve our output, FHC’s motivation is not based on impersonally selling or meeting quotas and targets. Our motivation is to efficiently and effectively make available the full-range financial solutions through products and services that meet your needs. As we do this we maintain the spirit, character and culture of partnership, cooperation and family that are the hallmarks of the Credit Union Movement. 3. The Executives have been charged with actively engaging the FHC team members in new ways. As a team, we are setting new standards. We want you to hold us to these standards as we provide new opportunities for you to save, borrow and invest and for insurance. 4. FHC will be completely focused on cost management. We will be running a lean and efficient organization; focused on efficiency and systems that work for you. 5. Changes to the regulatory framework for the Credit Union movement are coming, resulting in closer scrutiny of financial institutions by the Bank of Jamaica. We are preparing to ensure regulatory compliance. As I lead the FHC team, our focus is on improving lives, one Member at a time. Sincere gratitude to the Board, Executive Management and Team Members for their work in sustaining the efforts of FHC and keeping it relevant to you our Members and the wider community. Abundant blessings.

........................................................... Roxann Linton Chief Executive Officer First Heritage Cooperative Credit Union

We take this opportunity to highlight the results and activities of fiscal year 2016, another year in the journey of our Credit Union in serving our Members. The marketplace in which we operated during 2016 was characterized by efforts of the Government to continue fiscal reform measures while preparing for economic growth. The financial services industry was very competitive with major players all using aggressive strategies to win business and grow market share. Against this backdrop, the Management Team continued on the path of delivering quality service and solutions to our Members. In keeping with our strategic direction, the Credit Union’s Management continued to execute on the following: 1)

Improving the members’ experience and value;

Streamlining our policies and procedures for greater efficiencies;

Enhancing our loan risk mitigation strategies; and

Improving the productivity of the Credit Union while improving the key financial ratios.

In July 2016, we launched our Value Proposition, 5-24-Lifetime which focuses on improving our turn-around time and fostering closer bonds with our valued members. Our 5-24-Lifetime promise to our members allows our team members to prioritize service delivery and refocus our attention on our members as the core of our existence. Throughout the year, we continued our relentless efforts of encouraging our members to save, as they plan for the future and continued to offer products and services to meet the needs of our members at every stage of life. Our commitment to generate continual benefits to our members and other stakeholders remained strong as we increased our efforts to improve our loan disbursements throughout the year. FINANCIAL PERFORMANCE The year ended with a Group Net Deficit of $44.2M with Members’ savings totalling $7.8B, a loan portfolio of $6.2B and Group total assets of $10.2B. Despite the challenges experienced during the year, our performance showed signs of strengthening in the key areas of liquidity and asset size. While we did not meet all our key strategic objectives, we made some progress with the reduction of our past due rate, which at the beginning of the year stood at 13.6% but closed the year at 14.9%. Our efforts to reduce our loan loss provisions and to improve the performance of the Credit Union will continue to be a priority in 2017.

Our Subsidiary, FHCIL and our Approved Retirement Scheme performed creditably over the period. MEMBER ENGAGEMENT The year 2016 saw heightened competition within the marketplace as numerous financial institutions vied for increased market share. We continued to engage our members through a number of initiatives to include direct marketing to specific groups of members and prospective members. This year was an exciting year for our Marketing and Communications team as we executed several initiatives which focused on our members and our drive to improve service delivery to them. We hosted three Red Tag Loan sales between July and November 2016, which promoted loan specials for all loan types with reduced interest rates and fees to our members. These events facilitated weekend opening hours which was well appreciated by our members and significantly boosted loan disbursements for the latter half of the year. Deferred Share Offer

Our Deferred Share offer to our members was launched on February 15, 2016. The Deferred Share product was designed to give our members an opportunity to save in a long term instrument at an attractive interest rate while we build our Capital position. The offer will close on July 31, 2017. We continue to invite our members to participate in this offer. Launch of the Golden Educator During the year, we developed and launched our newest product, the Golden Educator. This product was created in response to the need for our membership to begin saving for their children’s education at an early age. This long term savings product for educational purposes also provides savers with an insurance component which guarantees that the child’s educational goals will be met, even in the event of the passing of the main holder of the savings plan. This savings product also gives eligible children the opportunity to obtain scholarships, as well as work experience with the Credit Union, once they have attained the required number or O’Level/CXC passes. OUR PEOPLE The Human Resources Development objectives of the Credit Union were achieved during the year through the execution of ongoing employee motivation, welfare initiatives, a reward and recognition programme, and fostering a continuous learning environment.

Job Evaluation/Reclassification & Compensation Exercise A Job Evaluation/Reclassification & Compensation Exercise was conducted during the year, with the objective of ensuring that all positions, across the organization, are appropriately classified and aligned to achieve internal and external equitability, while realizing the overall strategic objectives of the Credit Union. Performance Management The Credit Union utilizes the Balanced Scorecard tool to evaluate performance. The Balance Scorecard focuses on executing strategies geared towards achieving People Empowerment, Operational Excellence, Stakeholder Value and Financial Success. Each perspective has specific objectives and benchmarks for measurement. In keeping with our series of initiatives to support the Job Evaluation System, a Performance Management Workshop was conducted with team leaders to sharpen their knowledge and skills in Performance Management and understanding its relevance to the success of our organization. Training Training Centre for Professional Development (CPD On-line) Web-base Training We continued to utilize our web-based training facility (CPD On-line) which allows our team members to gain access to over 300 credit union based courses. During the year, a total of 4,673 activities, inclusive of exams and courses, were completed by team members. This environment continues to play a key role in enhancing the knowledge and skills of our team members. Customer Service Refresher Training All frontline team members were reoriented in the provision of excellent customer service to our members, both internal and external. This was in keeping with our Value Proposition mandate. Reward & Recognition In living our Mission Statement of “creating opportunities that will motivate team members”, during the Year 2016, our team members were awarded for their outstanding performance, through our Annual and Quarterly Award programmes, along with our awards for Customer Service Standard Temperature (CSST). These award presentations were given at our annual Blast Off event held on February 9, 2017 at the Jamaica Conference Centre.

Camaraderie and Social Activities Team Member Quiz Competition As customary, the Annual Team Member Quiz Competition was held during the year where department and branches competed for the Winner’s trophy and cash prizes. The Kingston Gardens Branch emerged as the 2016 Winner and St. Thomas Branch as the Runner-up. We applaud all team members who participated and give special kudos to the St. Thomas team, the newest branch addition to our Credit Union. Team Member Socials Our footballers entered the Business House Football Competition and finished fourth on the table. The team worked very hard and was very enthusiastic about their accomplishment. The love for football is displayed each Wednesday afternoon at the Head Office Car Park where the “ballers” workout and display their skills. CREDIT ADMINISTRATION AND LOAN RISK The Credit Administration & Loan Risk team continued to focus its efforts on satisfying our members through improved turnaround time. The team’s efforts were greatly enhanced through utilization of the internal Loan Tracker & Reporting System. 56

Our numerous promotional sales during the year in the form of The VIP, the Red Tag and Motor Vehicle Sales proved successful. These promotional activities resulted in us attracting and meeting the loan needs of our membership and has generated an improvement in loans disbursement and has stabilized our loan portfolio after the fall recorded earlier in the year. During the year, we also increased our drive to regain the membership and loan uptake of public sector workers, many of whom had drifted elsewhere to meet their loan needs early in 2016. Our efforts in managing our loan risk continued throughout the year as a number of strategies were employed to reduce our exposure and to protect the loan portfolio. For 2016, our Loan Portfolio fell from $6.76B to $6.20B which negatively impacted the past due ratios. It was a difficult year in terms of collection, however, there was a marginal increase as the past due percentage started the year at 13.6% and ended at 14.9%, indicating gradual improvement over the period. The over 30 days past due rate at end of December 2016, was 14.9%, while the over 90 days past due stood at 11%. This compares to 13.6% and 10% respectively for December 2015.

An amnesty program was offered in the last quarter and we worked with members to restructure their past due loans by offering accommodating terms as part of our effort to assist our members to meet their obligations with us. The new Collection Management System developed in-house will facilitate greater management of the Collections process. This system is expected to be completed by the end of February 2017. In addition, Management has tightened collections processes inorder to better manage the past due performance. We are confident that with our continued efforts and strategies we will see improvement in portfolio quality and a marked reduction in past due ratios to more acceptable standards during 2017. ENTERPRISE RISK MANAGEMENT We remain committed to the principles of sound business practices in order to create and build value for our members and ensure growth and sustainability of the Credit Union. We recognize that risk management is an integral part of good management practice and is necessary for us to achieve our mission and vision. By taking a disciplined approach to decision making and focused attention on reputational impact, we seek to ensure that our members continue to have confidence in us. In 2016, we undertook a number of activities to enhance our risk management capacity. These included: 57 1. Establishment of a group-wide Risk and Compliance Division and appointment of a Manager – Risk and Compliance (Legal and Regulatory) with responsibility spanning the Credit Union Group reporting directly to the Chief Executive Officer; 2. Redesigned the Enterprise Risk Management Framework to better facilitate the identification, prioritization and management of risks in a coordinated manner; and 3. Implementation of a Master Risk Register which documents our risk universe across the Group, the severity of each risk incident and the management actions to control them within defined Board-approved tolerance levels. The key objectives of our Enterprise Risk Management Framework are: 1. Oversight: To identify, manage and monitor all critical risks under a holistic approach consistent with Board approved risk appetite. 2. Accountability: To assign ownership of risk to Management who shall be responsible for identifying, evaluating, mitigating and reporting risk exposures.

3. Assurance: To provide reasonable assurance to the Board, Management, Members and Stakeholders that risk is being appropriately managed within defined levels so as to bring value to us. We have identified five (5) principal risks inherent to the activities and business processes of FHC: Strategic, Credit, Compliance, Operational and Financial. Accountability for managing each risk has been assigned to the relevant member of the executive management team. Our overall approach to managing risk is to balance business opportunities with sound risk discipline in order to achieve the mandate of our vision and mission. We continuously face challenges in pursuit of the mission and vision, with the key challenges being: 1. The increasing volume and complexity of regulatory requirements; 2. Competition to attract and retain Members; and 3. The continued low level of interest rates. We will continue to improve and enhance our risk management practices with our key priorities in the ensuing year being: 1.

2. 3.

Refinement of our risk governance framework to provide a more robust set of controls and enhanced management of the major risks assumed by the Credit Union Group; Expansion of our Master Risk Register; and Development and implementation of stress testing and capital adequacy assessment programs consistent with industry best practice standards and regulatory requirements.

Anti-Money Laundering and Counter-financing of Terrorism We believe that it is crucial for our team to have a thorough understanding of anti-money laundering and counter financing of terrorism requirements. Our culture supports this belief through ongoing training and development to ensure customer due diligence and reporting of transactions that are suspected to involve illicit assets or terrorist activities. Our business units act as the first line of defence in managing of our AML/CFT risk exposures. Our Risk and Compliance Division is our second line of defence, providing oversight, advice and assurance as to the effectiveness of our AML/CFT framework. In addition to receiving periodic advisories from the Risk and Compliance Division to keep abreast of AML/CFT trends and typologies, all our team members are required to complete AML/CFT courses every six (6) months offered through CUNA Professional Development Online (CPD Online). Face-to-face training is also provided specifically for our member-facing team members to further enhance their awareness and understanding of AML/CFT requirements.

Foreign Account Tax Compliance Act (FATCA) During 2016, the Risk and Compliance Division worked closely with FHCIL to ensure compliance to the reporting obligations under FATCA. In order to ensure compliance a FATCA module (report writer) was purchased for the Investment Company. The module captures account balances with savings US$50,000.00 and over. From the data obtained we are able to determine our reporting obligations under FATCA. In compliance with the Proceeds of Crime Act (POCA) we have taken steps to ensure that all Know Your Customer (KYC) requirements for accounts reported on were duly met. OUR OPERATIONS AND SHARED SERVICES The Operations and Shared Services Department provided a supporting role to the business units in ensuring that the business operates efficiently while providing good quality service. We continued to review our policies and procedures to meet “best practice” standards, minimize the risks and to ensure efficiency especially in support of our frontline activities. OUR TECHNOLOGY During the year 2016 amongst our main focus areas was improving efficiency and productivity, whilst having a secure and robust infrastructure. Working along these themes, we had several projects that included software implementation and infrastructure upgrades to further enhance security and efficiency. Infrastructure Upgrade With the always looming threat of fraud and cyber attacks one of the most significant projects of 2016 was the implementation of the Upgraded Access Plus debit card switch to improve cyber security. This was done in collaboration with JETS, Mozido and JCCUL. Coming out of this, we now have a more secure and reliable Debit Card network. Disaster Recovery & Emergency Management Given the nature of our business and Jamaica’s high susceptibility to natural disasters, the ability to quickly recover from these situations is paramount. As part of our standard operating procedures we have a scheduled disaster recovery testing, however, this year we found ourselves in the situation where we had to put this plan into action. The situation was navigated successfully with minimal inconvenience to our members. Valuable knowledge was gained from this exercise and we have since made improvements to an already sound disaster recovery plan, putting us in a place where we are adequately equipped to recover from any such situation.

Applications An upgraded Laserfiche application was implemented to facilitate improved document management across the organization. With this application in place we now have a more streamlined document management system and document flow through the organization. Upgrade was also made to CaseWare Monitor to enhance the ability to mitigate risks by providing monitoring controls and exception reporting. In addition, there were several applications that were developed in-house as part of our continued efforts to streamline processes and continued improvement of customer service. Some of these includes Internal Mail System, Loan Tracker, and improvements to the Loan Application. Hardware A general refreshing of computer hardware and peripheral devices was conducted, including several laptops, desktops and printers. This was performed to ensure that hardware devices are of the standard to enhance delivery of service. FHC MICRO & SMALL BUSINESS LOANS UNIT 60

Our Micro & Small Business Loans Unit, continued to promote and support entrepreneurship in the marketplace. In 2016, we partnered with stakeholders at major expositions such as the Jamaica Business Development Centre Exposition (J.B.D.C), Sweet Art Bake Expo and the Social Development Commission (S.D.C) Expo. Our continued partnership with the Development Bank of Jamaica (D.B.J) facilitated funding to members via the Micro & Small Business Loans Unit island-wide. Through this partnership, members were able to access loans for a variety of business purposes throughout the year. There are eight (8) Micro Loan Centres island-wide supported by Micro & Small Business Loan Officers. CORPORATE SOCIAL RESPONSIBILITY (CSR) True to our Vision of enhancing the welfare of the communities in which we operate, we undertook several initiatives this year as follows: National Reading Week Initiative We again partnered with the Jamaica Reading Association (JRA) National Reading Week Initiative. Our team leaders and team members conducted “Read Aloud” sessions in ten schools island-wide in April 2016. We also sponsored the JRA’s calendar of activities to include the Annual Tea Party and the International Literacy Day Exposition.

These events were successful and these annual partnership were well appreciated by the participants. Financial Literacy Month This year, through JCCUL’s Financial Awareness month, which involves targeting the youth in the Early Childhood Education sector, we hosted a Money Management Seminar for twelve students from the St. Theresa Preparatory School. These students were invited to visit with our then Chief Executive Officer, Mr Basil Naar to have discussions about the financial sector and the importance of money management. There was also a Money Management Quiz. The students received Youth Savings accounts and goodie packages. FHC/ Rebirth Project Now in its third year, we continued with our collaboration with MC and Associates as the title sponsor for the Rebirth Project which commenced in 2014. This project involves a series of transformational workshops that target young teenagers (ages 13 -15) with behavioural challenges. These teens are introduced to counselling and psychological intervention. The Rebirth Project runs for eight weeks and specifically targets students of the Tivoli Comprehensive and Norman Manley High Schools. These all-inclusive workshops requests the involvement of the parents and educators. FHC team members volunteer on the weekends as peer counsellors and coordinators. 61 Labour Day Project The Baptist Bay Early Childhood Centre, Old Harbour Bay received a well needed facelift which was facilitated by team members with the support of the parents of the Old Harbour community. This involved painting the exterior of the school and signage. We also donated two mattresses for the Sick Bay. JCCUM Parish Project During the year we collaborated with the Jamaica Co-operative Credit Union Manager’s Association (JCCUM) on its Parish Project initiative. Mt. Prospect Primary, Danver’s Pen, St. Thomas was selected as the project of choice. We donated One Hundred Thousand Dollars ($100,000.00) towards the project and this was matched by JCCUM. Team members from the St. Thomas Branch and volunteers from JCCUM came out in full support of this initiative and painted the school’s exterior on August 27th, 2016. The School community was delighted at this special gift to the school, as they anticipated the commencement of a new school year.

Credit Union Week The JCCUL Annual Credit Union Week of activities was celebrated during October 16– 22, 2016. All our branches hosted Member Appreciation days throughout the week. As the week’s selected charity initiative, we donated two water barrels to the Friendship Primary School, St. Catherine to alleviate the severe water challenges the school has experienced over the years. Friendship Primary is a member of the Youth Savings Programme. During the Credit Union week of celebrations, we promoted the Youth Savings product to over 500 students and patrons. Civil Service Week Celebrations For over ten years, we (as part of our GSB legacy) have been an annual sponsor of the Annual Jamaica Civil Service Week Calendar of Activities, now in its twenty-fifth year. This year was no different. We sponsored the launch event hosted at the Knutsford Court Hotel and the Civil Servant of the Year Award. At this event, our Chief Operating Officer, Mrs. Maria Morrison, brought greetings on our behalf. Mrs Morrison applauded the Civil Servants for their sterling contribution and reinforced our commitment to civil servants, even as the transformation for greater efficiencies within the public sector continues. We also participated in the Civil Service Exposition and other activities during the week of celebrations. Annual Christmas Corporate Social Responsibility Initiative 62

In December 2016, our Lawrence Tavern Branch partnered with the Lawrence Tavern Criminal Investigation Bureau (CIB) for their Annual Christmas Treat. Team members donated gifts and refreshment to support this initiative. The Lawrence Tavern C.I.B is an active stakeholder which has supported the branch operations since its inception in 2011. Other CSR Activities Our partnerships with organizations such as H.E.A.R.T, National Youth Service (NYS) and Citizen Security & Justice Programme (CSJP) continued where we accommodated trainees and provided on-the-job training for them, equipping them with the necessary skills required for the working environment. During the year, we also continued our Feeding Programme in partnership with St. Stephen’s Church. OUTLOOK The Management Team is reenergized and motivated to execute the required strategies to improve the position of the Credit Union. Having had the experiences of a highly competitive and challenging environment in 2016, we stand ready to provide sterling performance in 2017, as we increase our readiness for the regulations of Credit Unions by the Bank of Jamaica.

Our key focus will remain as follows: 1. 2. 3.

4. 5.

Putting our “Member at the Centre” of all we do; Building out a Sales and Services model to facilitate growth and high level of member satisfaction; Improving our Regulatory Compliance including our Anti Money Laundering framework/mechanism and ensuring readiness for Bank of Jamaica licensing and oversight; Improving efficiency of operations; Growing our Micro and Small Business Loans portfolio.

Overview It is a privilege to present the Treasurer’s Report to the Annual General Meeting of the First Heritage Co-operative Credit Union Limited (FHC) for the year ended December 31, 2016. The audited Financial Statements in this annual report are for the Group, which comprises the Credit Union and its wholly-owned subsidiary, FHC Investment Limited (FHCIL). Summary Financial Performance For the year ended December 31, 2016, FHC realized a Net Deficit of $58.7M as compared to prior year’s Net Surplus of $40.2M, while the FHC Group realized a Net Deficit of $44.2M, as compared to prior year’s Net Surplus of $59.3M. The negative performance was due mainly to the significant reduction in the Credit Union’s loan portfolio, which declined by $563.6M over the course of the year in a very competitive loan market, and challenges we experienced in collections which increased the percentage of past due loans. Notwithstanding a marginal reduction in loan provisioning for 2016 over previous year, past due loans comprised 14.9% of total loans as compared to 13.6% at the end of 2015. Together these factors resulted in a year over- year decline of $154.7M in interest income from loans. 64

The graphs below show the Credit Union’s Revenue and Net Surplus performance for the last four years.

Subsidiary FHCIL continues to perform well as it made a Net Surplus before Tax of $15.8M for 2016, as compared to $15.3M for 2015. The 2016 financial year was noted to be one of the most challenging in the recent history for the Credit Union and the movement generally, as many of our existing and prospective members experienced challenging economic conditions, reduced employment opportunities and a real reduction in their disposable incomes. Despite historically low loan rates, these conditions and a low rate of inflation encouraged many members to either postpone their purchase and credit decisions or pursue alternative borrowing options, while several of our members struggled to service their existing loan obligations. FHC also experienced challenges in disbursing loans, largely on account of the numerous adjustments to current loan policies, procedures and practices in order to bring these in line with the Bank of Jamaica’s requirements in preparation for the impending regulation and supervision. Members’ loans fell by a net $563.6M or 8.3%, from $6.8B (2015) to $6.2B (2016). Liquid Assets and Short term Investments grew from $1.5B in 2015 to $2.0B at the end of 2016, or by 31.9%, as our strategy to improve FHC’s liquidity position and achieving compliance with the Bank of Jamaica’s liquidity requirements succeeded in moving the Liquidity Ratio from 21.4% at 2015’s year end to 29.5% at December 31, 2016. At December 31, 2016, FHC Credit Union’s total assets of $10.1B represented an increase of 0.4% over prior year, while the Group’s total assets of $10.2B as compared to $10.1B (2015) or 0.9% increase. The graph below shows the Credit Union’s Liquid Assets, Loan and Total Assets performance for 2015-2016 in more detail.

Members’ Deposits increased by $0.2B or 2.8% from $7.6B (2015) to $7.8B (2016).

Economic Overview The year 2016 was another economically challenging one for our members and the Jamaican economy. Globally, despite the lingering effects of recession in isolated pockets, North America, Europe, India, Russia and China all had solid performances and most of the rest of the world experienced marginal GDP growth. The Jamaican economy showed marginal improvement in GDP in 2016 despite socioeconomic pressures, continued large national debt, high unemployment, increasingly unequal income distribution and further weakening of the Jamaican dollar against hard currencies. Even with a change of administrations in February 2016, the Jamaican Government maintained its programme of strict fiscal deficit and contained its borrowing in continuing to satisfy the structural benchmarks agreed with the International Monetary Fund (IMF) and passing its quarterly tests. The 90-day benchmark Treasury bill rate started the year at 5.96%, and moved downwards to 5.68% at year-end. There was a preliminary estimated annual growth of 1.4% in GDP as reported by STATIN. Despite a US$345.4M or 8.9% decline in trade deficit the Jamaican dollar depreciated by 6.9% against the United States dollar in trading over the year to end 2016, moving to $128.4, as many of net savers looked towards hard currency investments. Inflation rate declined from 3.7% in 2015 to 1.7% for 2016, largely due to falling oil prices on the international markets.

While unemployment declined by 1 percentage point over the year to end at just under 12.9%, this rate still remained relatively high and financial service providers, like FHC, experienced generally increased delinquency and reduced savings intakes, as a result of the tight economic conditions. Regulatory Environment The expectation for the Bank of Jamaica (BOJ) to assume the role of direct supervisor of Credit Unions in 2016 was not realized but is now expected for 2017. The BOJ continues to have oversight of our activities and continues to review our financial reports and conducts periodic audits. Our performance against International Credit Union Industry financial benchmark standards for safety and soundness (PEARLS) continues to be monitored by the Jamaica Co-operative Credit Union League Limited. Our performance is also compared to other prudential standards by the BOJ. Despite the year’s losses, FHC’s Institutional Capital to Total Asset ratio remains good at 11.17% at December 31, 2016, compared to the minimum PEARLS Standard of 8%,and a 6% minimum requirement for the Bank of Jamaica. Operational Results Notwithstanding the many challenges faced by the Credit Union and its members, and the strategic decisions executed to ensure that regulatory requirements are met, FHC continued to undertake initiatives to improve its competitiveness, while addressing needed improvements in its customer service and internal controls.

Key Results for the year 2016 were: Interest Income of $1,076.5M (2016) decreased by $135.0M or 5.3% from $1,211.5M (2015). The Credit Union remained competitive by offering attractive rates to our members, while applying deliberate applications in reviewing our policies and processes for improving our loan disbursements levels along with other key drivers for revenue growth. See graphical depiction of the Credit Union’s performance in Interest Income and Non-Interest Income for 2015-2016 below.

Non-Interest Income of $183.1M (2016) increased by $18.7M or 11.4% from $164.4M (2015). This increase is mainly attributed to gains from sale of stocks and foreign exchange trading gains and Cambio performance year over year. It should be noted also that, with the exception of Account Maintenance fees, there were no other fee increases for 2016. Interest Expense fell from $192.5M (2015) to $162.7M (2016), largely because of falling interest rates. The Credit Union continues to offer some of the most attractive interest rates available to our members on savings products.

Operating Expenses increased by $13.4M or 1.3%, from $1,031.4M (2015) to $1,044.9M (2016). Included in the increase for 2016, is a major increase of $21M representing termination expenses relating to a redundancy exercise, which is net of reduction in other expenditure areas. It should also be noted that FHC exercised close monitoring and containment of costs for the year and hence Operating Expenses were kept within budget. Past Due loan portfolio (30 days and over) as a percentage of our Total Loan portfolio was 14.9% (vs. 13.6% at December 31, 2015). This resulted from the inability of a large proportion of our members to service their loan obligations, largely due to unemployment and loss of disposable income.

Provision for Loan Losses fell to $110.7M in 2016 from $111.9M in 2015. Our provisioning for loan loss continues to be adequate to cover potential losses. We continue to appeal to you our members to communicate with us as soon as problems are experienced in repaying your loans, either with us or elsewhere. We stand ready to assist in finding a beneficial solution in most cases. Insurance The Credit Union continued to maintain the Life Saving and Loan Protection coverages, for members’ benefit, with the Credit Union Movement’s insurance company, CMFG Life (formally CUNA Mutual). Conclusion The Credit Union’s performance was below expectations, due mainly to the significant fall-off in loan income, coupled with falling interest rates and an increased percentage of nonperforming loans. Nothwithstanding the performance reported, FHC managed to maintain healthy capital and improved liquidity at the end of the financial year.

There is much work to be done, as we apply renewed focus to making more good loans, controlling delinquency and improving member service. We are confident that with the strategies and corrective measures we have already implemented, we are on the right path. As always, the Credit Union’s success is dependent on the continued support of you our members, our dedicated team members and our volunteers. Only together can we overcome the challenges facing us and accomplish the ambitious goals that we have set for FHC’s future. Acknowledgements I give thanks to God, my fellow board members and you, my fellow members, for having given me the opportunity to again serve as your Treasurer. It has been an honour and a privilege to do so. I thank and commend all the team members, including volunteers, managers and staff, who have consistently applied themselves to the Credit Union’s business. On behalf of the Board of Directors, I thank our Auditors, KPMG, for their professionalism in completing another audit on a timely basis. God bless you all. …………………........……. Robin Andrew Levy Treasurer

76 to 150

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

OPENING REMARKS On behalf of the members of the Supervisory Committee, I would like to welcome all the members of First Heritage Co-operative Credit Union to this Annual General Meeting. The members of the Committee are happy to have been allowed to serve the Credit Union for this year. We would also like to give our commendations to the management, staff and the other volunteers who have contributed their efforts to assist with the achievement of the Credit Union objectives. THE COMMITTEE The governance structure of Credit Unions provides for a Supervisory Committee whose members are elected from and by the wider membership at an Annual General Meeting. The Supervisory Committee is charged with assisting the Board of Directors in the discharge of their responsibilities by providing some oversight functions on the system of internal control and the management of the audit process through the Internal Audit Function. At the Annual General Meeting on May 12, 2016, five members were elected to the Supervisory Committee as follows:152

Mrs. Beverley Williamson Mrs. Karla Stephens-Hall Mr. Luke McIntosh Mrs. Camelle Ricketts-Moore Mr. Lascelles Ellis Mrs. Karla Stephens-Hall was subsequently elected Chairman of the Committee and Mrs. Camelle Ricketts-Moore the Secretary.

During the period and up to the date of preparing this report, there have been eleven (11) meetings of the Committee and in accordance with stated requirements; monthly reports were presented to the Board of Directors. Committee members also attended Joint Board of Directors meeting held quarterly during the period of review. ATTENDANCE RECORD As at February 14, 2017 attendance by members to the Supervisory Committee meetings was as follows: NAMES Mrs. Beverley Williamson Mrs. Karla Stephens-Hall Mr. Luke McIntosh Mrs. Camelle Ricketts-Moore Mr. Lascelles Ellis

ATTENDANCE 7 7 10 11 5

EXCUSED 4 4 1 0 6

AUDIT MATTERS AND INVESTIGATIONS CONSIDERED An audit plan was developed at the start of the calendar year and the evaluation of the Credit Union’s operations was executed in accordance with this plan. In addition, routine monthly activities and investigations based on requests from management were completed. The audit plan is prepared considering the existing circumstances and is intended to provide assurance on the management of key risks, operations of the internal control framework and the governance processes. As at December 31, 2016, only 60% of the audit plan was successfully complete. This was due to the fact that time had to be allotted to special investigations and follow-up activities on key areas completed during the prior period. The Committee reporting on the following: 1.

Routine Activities • Bank Reconciliations were monitored on a monthly basis and it was noted that they were prepared in a timely manner with reconciling items being cleared and monitored closely. There were some unidentified deposits to the Credit Union’s bank accounts from previous years which management continues to follow procedures to allow for identification and clearance of the deposits. • Volunteer and Staff accounts were also reviewed monthly with appropriate follow-up to ensure that these accounts are maintained in accordance with established guidelines. Appropriate measures were taken to address all the anomalies identified.

Audits & Special Investigation During the review period, audits were undertaken covering the following areas • Motor Vehicle Loans • Payroll Management • Proceeds of Crimes Act • Debit Card Management

153

• • • • •

Micro and Small Business Loan FHC Investment Limited Youth Programme, Grants and Tertiary Scholarships Marketing, Communication and Brand Management Credit Risk Management

Special investigations were conducted from management requests and out of audits completed. The audits completed during the year amongst other things indicated the need for improvements in the following areas: • The timeliness in the development and approval of policies and procedures to govern areas for example the Micro & Small Business Loans activities, Investments, Collaterals and Marketing & Communication. • Timeliness in updating policies to reflect changes in the business. • The recording, physical identification and tracking of the IntelliCAT Machines used to pin debit cards. Recommendations were made, management responses were received and implementation completed for most deviations. Ongoing follow-ups will be performed by the Internal Audit Department and the Supervisory Committee to ensure outstanding recommendations are being addressed. 154

OTHER MATTERS No complaints or suggestions were received from the membership during the period from the clearance of the Suggestion Box provided. This is a key method of ensuring that your views are heard to ensure the business benefits from your input. We wish to remind the general membership of this method of communication and to assure you that this facility is monitored and we welcome your interaction. CONCLUSION We would like to express our thanks to the Nominating Committee for their confidence in selecting us for consideration and to the members of the Credit Union for appointing us to serve in this important capacity. We would also like to express our gratitude to the management and staff, in particular the Internal Audit Department and the Board of Directors for facilitating and supporting the work of the Committee over the year.

___________________________________________ Karla Stephens-Hall Chairman

The Credit Committee is delighted to welcome all members to the 5th Annual General Meeting of the First Heritage Co-operative Credit Union Limited. The Credit Union has seen its fair share of challenges in 2016, with the harsh economic climate, continued fierce competition faced in the financial sector and battling with the high number of past due members, resulting in a high past due rate since March 2016. Members have found it even more difficult to access credit, as a result of the economic downturn where we saw many of them losing their jobs or experiencing pay cuts and unfavourable reports from the Credit Bureau. Despite these variables, the Credit Union, strives, not only to constantly satisfy our members but to exceed their expectations. The challenges outlined above have resulted in a 14.35 % decline in disbursements - moving from $2.425B to $2.077B. In addition, the loan portfolio declined from $6.8B in 2015 to $6.2B in 2016 – an 8.3% decline. The decline in disbursements also affected our Micro Finance Unit with disbursements moving from $147m in 2015 to $69.75m in 2016. While this significant decrease of 52.55% is a cause for concern, the Credit Union remains optimistic as the Unit takes time to restructure its operations and revisit its policies to ensure loans are adequately assessed to yield a portfolio of the highest quality. For the period January to December 2016; a total of 48 meetings were held. At the beginning of 2016 the Committee had a total of five members; however, in May 2016 two members left the Committee when Mr Noel Francis, Past Chairman, was elected to the Board of Directors, and Ms Faylene Foster retired from the Committee. We wish to thank both Mr. Francis and Ms Foster for their invaluable contributions to the Committee’s work and, by extension, the Credit Union. While replacements were elected at the Annual General Meeting in May, Ms. Angeline Mae Carr was unable to serve because of other commitments. The Committee, however, welcomed Pete Nesbitt who joined in May 2016.

155

Members RICHARD RANGER QUINTON MASTERS ALTHEA DALEY PETE NESBITT

Meetings held 48 48 48 48

Meetings attended 45 36 42 30

No of times excused 3 12 6 Joined May 2016

We urge you, our members, to help your Credit Union to reduce its past-due portfolio by encouraging fellow members to pay their loans on time. Where a member is experiencing difficulties, please advise them to come in to speak with a team member so that the best arrangement can be made for them to become current. The Credit Committee takes this opportunity to express its profound gratitude to the highly trained and dedicated Team Members of FHC, the Board of Directors, Supervisory Committee and you, our valued and committed members, for the assistance and support you have provided for us in 2016. We look forward to serving you in 2017.

______________________________ Richard Ranger Chairman 156

TYPE PRODUCTIVE

2016

% of Total

3,762,743

0.06%

Agriculture Manufacturing Distribution Retailing Business Loans (Easi Biz) Transportation Communication Micro-Individual (Secured) Micro-Individual (Unsecured)

69,152,278

1.11%

118,647,102 44,065,902

1.90% 0.70%

SUB TOTAL

235,628,026

3.77%

957,858,384 11,837,901

66,906,922 1,040,971,131

15.31% 0.19% 0.00% 43.89% 0.00% 19.13% 0.00% 1.07% 16.64%

SUB TOTAL

6,019,170,521

96.23%

GRAND TOTAL

6,254,798,547

100.00%

PROVIDENT Unsecured Loans Renegotiated Loans Insurance Pre-Financing Home Choice Loans Shelter loans Motor Vehicle Purchase Furniture & Appliances Supreme Educator - Education Cash Secured Computer Purchase Motor Vehicle Repairs Secured Line of Credit

2,745,280,963 1,196,315,220

157

In accordance with the provision of the Rules of First Heritage Co-operative Credit Union Limited in respect of Article XIV, Rule 59: a Nominating Committee was appointed which comprised of the following members: • Mrs. Leodis Douglas - Chair, Board Representative • Ms. Patricia Ramsaran - Member Representative • Ms. Roxann Linton - Staff Representative The Committee met to consider all retiring volunteers from the Board of Directors, Supervisory and Credit Committees and advertised for Volunteers to fill the vacancies on the Committees. All candidates were assessed and recommendations made. The Nominating Committee now presents this report to the membership as outlined below: BOARD OF DIRECTORS The Directors retiring at this Annual General Meeting are:

158

1. 2. 3. 4. 5.

Mr. O’Neil Grant Mr. Edmund Jones Mr. Kevin Forbes Mrs. Tamara Francis Riley-Dunn SSP Michael James

The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Mr. O’Neil Grant Mr. Edmund Jones Mr. Kevin Forbes Mrs. Tamara Francis Riley-Dunn SSP Michael James

Recommended Term (years) Mr. O’Neil Grant 2 Mr. Edmund Jones 2 Mr. Kevin Forbes 2 Mrs. Tamara Francis Riley-Dunn 2 SSP Michael James 2

SUPERVISORY COMMITTEE The members of the Supervisory Committee, all of whom retire at this Annual General Meeting, are: 1. 3. 5.

Mrs. Karla Stephens-Hall Mrs. Beverley Williamson Mr. Luke McIntosh

2. 4.

Mrs. Camelle Ricketts-Moore Mr. Lascelles Ellis

The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Mrs. Karla Stephens-Hall Mrs. Camelle Ricketts-Moore Mrs. Beverley Williamson Mr. Lascelles Ellis Mr. Luke McIntosh

Recommended Mrs. Karla Stephens-Hall Mrs. Camelle Ricketts -Moore Mrs. Beverley Williamson Mr. Lascelles Ellis Mr. Luke McIntosh

Term (years) 1 1 1 1 1

CREDIT COMMITTEE The members of the Credit Committee retiring at this Annual General Meeting are: 1. 2.

Mr. Richard Ranger Mr. Quinton Masters

Mr. Quinton Masters indicated that he would not be available to serve for another term. We thank Mr. Masters for his invaluable contribution to the Credit Union. In accordance with Article XIII, Rule 44c, note should be made of the appointment of Mr. Sennett McLean in January 2017, due to the vacancy created by Ms. Angeline Mae who had not taken up the position as volunteer though she was duly nominated and elected. The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Mr. Richard Ranger Mr. Quinton Masters Mr. Stennett McLean

Recommended Mr. Richard Ranger Ms. Janyce Robinson Mr. Stennett McLean

Term (years) 2 2 2

Profiles of Candidates

Board of Directors

Mr. O’Neil Grant, MBA Mr. O’Neil Grant presently serves as the President of the Jamaica Civil Service Association, a position which he has held since June 2011. He is a committed public servant and has held several senior positions in various Ministries and Public Service, including now sitting on the Board of the National Housing Trust. He is a trained Accountant and Financial Analyst with over 26 years of experience in his chosen profession. A consummate professional with high ambitions, he currently holds an Executive MBA from the Mona School of Business.

159

He currently serves as 1st Vice Chairman on the Board at FHC, Chairman of the FHC Foundation. 2nd Vice President at JCCUL and Vice President of the Jamaica Confederation of Trade Unions. Mr. Edmund Jones Mr. Edmund Jones is a retired career Civil Servant. Although he began his career in Accounts and Auditing, he transitioned through Statistics and General Administration into Information Technology. He began his volunteerism with GSB CCU in 2000 and has served on many Boards, including Quality Networks, Creative Production and Training Centre and the Jamaica Paralympic Association. Since his retirement, Mr. Jones has welcomed the opportunity to use his new-found time to the benefit of his volunteer activities. He also does short-term consulting for small and medium businesses as well as teaching. He is married, with two children and he enjoys reading and playing chess. Mr. Kevin Forbes, MBA Mr. Kevin Forbes is currently employed to Cable and Wireless Jamaica Limited, a subsidiary of Liberty Global, as the Finance Manager. He has extensive experience in the field of Audit and Accounts, having worked in various management capacities within the Grace Kennedy Group of Companies and with Ernst & Young Caribbean. 160

He holds a Masters of Business Administration in Finance from the Manchester Business School, United Kingdom, and is a Fellow of the Association of Chartered Certified Accountants as well as a Member of the Institute of Chartered Accountants of Jamaica. He previously served on the Credit Committee. Mrs. Tamara Francis Riley –Dunn Mrs. Tamara Francis Riley-Dunn has over 14 years of experience as a legal practitioner in Jamaica. She specializes in commercial law (with an emphasis on debt consolidation), conveyancing and family law. She is an honours graduate of the University of the West Indies and also of the Norman Manley Law School, where she received her Certificate of Legal Education. SSP Michael James Mr. Michael James is a retired Senior Superintendent of Police, a former Chairman of the Police Officers Association and a past Divisional Commander of St. Thomas. He has received numerous awards including the Medal of Honour for Meritorious Service, the JCF Distinguished Service Award for the Development of Police Youth Clubs in Jamaica, as well as being named the Lasco Police Officer of the Year 2000 and a Past President of the Kiwanis Club of St. Thomas. In his spare time Mr. James likes singing, listening to music, reading, playing table tennis, dominoes and cricket.

Supervisory Committee

Mrs. Karla Stephens-Hall, CPA, CA, CIA Mrs. Karla Stephens-Hall’s career has exposed her to senior positions within companies such as Cable & Wireless Communications Group, PricewaterhouseCoopers and Mossel Jamaica Ltd (Digicel). Mrs. Stephens-Hall currently holds the position of Financial Controller at Massy Technologies Infocom Jamaica Limited where she is responsible for ensuring that the business is operating effectively and efficiently, managing the preparation of financial statements as well as the monitoring of internal controls. Her work experiences have seen her holding positions such as Business Assurance Manager, Operations Manager, General & Project Accountant, Regional Finance Manager and Regional Senior Business Auditor. Mrs. Stephens-Hall is an accomplished Internal Auditor and financial professional. She holds a Bachelor of Sciences Degree (with Honours) in Accounting and Economics. Since completing her Degree she has accomplished designations as a Certified Public Accountant (CPA) - 10 years, a Chartered Accountant (CA), Certified Internal Accountant (CIA) and Certified Risk Management Association Professional (CRMA). Currently, she holds membership with the New Hampshire State Board of Accountancy (Licensed), the Institute of Chartered Accountants of Jamaica (ICAJ) & the Institute of Internal Auditors (IIA). Mrs. Stephens-Hall currently serves as a volunteer in the capacity of Chairman of the Supervisory Committee of FHCCUL. Mrs. Camelle Ricketts-Moore, FCCA, MBA, CIA, CISA Mrs. Camelle Ricketts-Moore is an Internal Audit Manager with 17 years working experience in the field of Accounting, Internal Auditing and General Business Operations developed primarily from the Food Manufacturing, Retail and Distribution Industry and the Education Sector. Her achievements include the drafting of an Internal Audit Charter, instituting a framework to guide the progression of the Internal Audit department, as well as developing and instituting a Risk Based Audit Process and an Operations Manual. She posses a good understanding of Corporate Governance and Enterprise Risk Management (ERM). Mrs. Ricketts-Moore holds a Master of Business Administration and is a Certified Information System Auditor, Internal Auditor (CISA) and Chartered Accountant. She is a member of the Association of Chartered Certified Accountants (ACCA) since 1999, Information Systems Audit and Control Association (ISACA) since 2004 and Institute of Internal Auditors (IIA) since 2006. Mrs. Ricketts-Moore currently serves as a volunteer in the position as Secretary for the Supervisory Committee at FHCCUL. Mrs. Beverley Williamson, MSc; MBA; FCA; JP Mrs. Williamson recently retired from the Port Authority of Jamaica (PAJ/The Authority) where she worked in senior positions, the most recent being as Senior Vice President, Business Management & Special Projects. In this position, she was responsible for most of the Authority’s diverse commercial assets and played a strong leadership role in the privatization

161

of the Kingston Container Terminal through the grant of a Concession to a Global Terminal Operator. Prior to this, she served as the Senior Vice President, Finance & Information Services. She has also worked at the National Ex-Im Bank of Jamaica and Peat Marwick & Partners (now KPMG). She holds an Executive MBA from the Florida International University, MSc in Accounting and a BSc in Management Studies from the University of the West Indies. She is a Fellow of the Institute of Chartered Accountants of Jamaica and a Justice of the Peace for the Parish of St. Andrew. Mrs. Williamson currently serves as a volunteer on the Supervisory Committee at FHCCUL. Mr. Lascelles Ellis, MSc. Mr. Lascelles Ellis is a results-oriented, hands-on professional with broad experience in all aspects of accounting and financial management. He is a Financial Management Specialist at the Planning Institute of Jamaica (PIOJ). Prior to this he served as the Principal Finance Officer in the Government of Jamaica Court Management Services. His professional knowledge spans some forty year (40) with experiences in both Public and Private Sectors.

162

He holds a Master of Science Degree in Accounting from the University of the West Indies. Mr. Ellis currently serves as a volunteer on the Supervisory Committee at FHC. Mr. Luke McIntosh, J.P. Mr. Luke Mclntosh has a diverse 27 year career spanning the public and private sectors, and has proven to be a meticulous financial administrator, adaptive strategist, a skilled motivator and an effective leader. He is currently the Principal Finance Officer at the Ministry of National Security, and has worked as the Principal Finance Officer at the Ministry of Justice, Financial Controller of a major statutory body and Director of Finance at the island's largest public health care group. He holds a postgraduate Degree from the University of Technology; an undergraduate Degree from the University of the West Indies; a Teaching Diploma from the Mico Teachers' College; a Diploma in Project Management and several specialized certificates in the areas of Leadership and Change Management, Government Accounting, Corporate and Strategic Planning, Public Sector Procurement, Human Resource Development for Capacity Building and Policy Development. Mr. Mclntosh, a Justice of the Peace, is an Executive Member/Treasurer of Father's Inc. and a Gender Activist with the Women's Media Watch. A sporting enthusiast, he has been a member of several successful Inter-collegiate Cricket and business house Table Tennis teams. Mr. McIntosh currently serves as a volunteer on the Supervisory Committee at FHCCUL.

Credit Committee

Mr. Richard Ranger Mr. Richard Ranger is a Chartered Accountant and member of the Association of Chartered Certified Accountants in the United Kingdom and a member of the Institute of Chartered Accountants of Jamaica. He has over thirteen (13) years of experience in external and internal auditing, accounting and business operations. Mr. Ranger has worked with the PricewaterhouseCoopers, Boldeck Jamaica Limited and Neal and Massy Group specializing in audit and assurance, accounting and income tax services. While at Boldeck Jamaica Limited, he was involved in business assessment of entrepreneurs seeking loan financing. Currently he is the Principal of Ranger and Associates a local audit and accounting firm.

The Profile of The New Candidates Ms. Janyce Robinson Ms. Janyce Robinson is a former General Manager, Credit Administration and Loan Risk at First Heritage Co-operative Credit Union Limited having managed the portfolio for over eleven (11) years. She is currently employed as Property Manager, Worthington Towers Apartment. She offers 50 years experience in the areas of Credit, Operations, General Administration and Information Systems Management with several local financial institutions including Scotiabank Jamaica and overseas institutions in Barbados and Scotiabank Canada. Ms. Robinson was recognized internationally as an outstanding student placing 10th in the final examinations of the Associateship of the Chartered Institute of Bankers (London) Diploma (ACIB) in 1981. She successfully completed the Certified Credit Programme (CCP) of the Chartered Institute of Bankers (Scotland) in 2011 and has also completed courses in the Professional Banking Programme (PBP) of the Canadian Institute of Bankers. She is a former member of the Board of Management of Mona Preparatory School and currently holds the position of Treasurer for the Hope United Church. Ms. Robinson serves on the Finance Committee of the United Church of Jamaica and the Cayman Islands.

163

She is a Trustee for the Sonia Hayden Scholarship Fund and the Samuel Smellie Theological Education Trust Fund, both funds benefitting needy students at the secondary and tertiary levels. She is from a large and loving family and has a daughter who has followed her footsteps into Banking and now resides in Canada. Mr. Stennett McLean, GISP Mr. Stennett McLean is a Supervisor in the Topographical Data Management Division of the Survey and Mapping Division within the National Land Agency. He has been a cartographer with the Agency for numerous years and while with the organisation he has represented the government of Jamaica at various international conferences, including acting as a representative of the government for the United Nations.

164

Mr. McLean has completed studies in Cartography, Geographic Information System and Computer Engineering. He has excellent knowledge in the following software the Esri suites, Auto Cad and other surveying and imaging software. He also specializes in Map design and creation (both digital and hard copy). The technical expertise that he has gained from these fields has made him incredibly analytical which is a trait that he carries into all aspects of his life. He is not only a great team player but he is also someone with the ability to lead as he feels a great sense of responsibility and urgency for any task he undertakes. Mr. McLean is an avid football and cricket fan and manages the Kush Football team; a member of the Masters League. Leodis Douglas Chair, Nominating Committee

Signed By:

………………………………………………………….. Leodis Douglas Board Representative and Chairman

6/4/2017 Date

……………………………………………………………. Patricia Ramsaran Member Representative

6/4/2017 Date

……………………………………………………… Roxann Linton Staff Representative

6/4/2017 Date

165

FHCIL DONATES GOODIES TO THE DISADVANTAGED YOUTHOPENING REMARKS FHCIL & Retirement Scheme Team Members Salika Levy-Gayle, Helon Whittaker, Nicola Blackstock, Natalee Bitter, Davene Bonner, Janeisha McBean-Duffus, Audrey Hawthorne Brown) donated food, toiletries and other necessities to the Women’s Centre, St. Margaret’s Human Resource Centre and the Mustard Seed Communities in December 2016.

166

FHC MICRO & SMALL BUSINESS LOANS UNIT FHC Micro Loan Finance Officers Kemar Drummond & Stacy-Ann Mattis engaging with a member at the Sweet Art Bake Expo held at the Jamaica Pegasus Hotel in May 2016.

NATIONAL READING WEEK INITIATIVE FHC’s Chief Operating Officer, Mrs. Maria Morrison shares a light moment with the students of the Queen’s Preparatory School.

167

FINANCIAL LITERACY MONTH Right - Senior Marketing Officers Diana Allen and Carlene Coley model “MONEY” HAT & TIE OUTFITS. Left - Students of the St. Theresa Preparatory shares lens with Former FHC C.E.O Basil Naar in the Board Room.

FHC LAUNCHES GOLDEN EDUCATOR Golden Educator is the newest product in the FHC catalogue of products. it was launched in May 2016. The product is available for members up to age 65 who wish to save for their loved ones Tertiary Education. This product has Life insurance coverage of $4.5 million dollars. Five and Ten year plans are available with affordable premiums and an attractive interest rate.

FHC VALUE PROPOSITION “MEMBER LOYALTY IS THE KEY” FHC Board Chairman, Mr. Balvin Vanriel presents a basket of goodies to the oldest member of FHC, Mrs. Sylvia Roache. Marketing Representative Kimarley Henry also shares a light moment at the V.I.P Launch event.

RED TAG LOAN SALE The loan disbursements grew as a result of FHC “Red Tag” Loan Sale promotions. The first Loan Sale was launched on July 23rd, 2016 at the Eureka/Ripon Branch promoting Motor Vehicle Loans, Debt Consolidation and Secured Loans at attractive interest rates.

168

LABOUR DAY PROJECT Team Members Theodore Francis, Gail – Ann Hamilton and Vanessa Williams take time out to spread some love during the Labour Day activities.

JACCUM/FHC PARISH PROJECT FHC Morant Bay Branch Team members taking a brief moment for the camera, after a hard day’s work at the Mt. Prospect Primary School, Danver’s Pen.

CIVIL SERVICE AWARDS CELEBRATIONS FHC’s Assistant General Manager – Wealth Development Unit, Mrs. Jacqueline Pingue – Smith presents a citation to the Civil Servant of the Year 2016, Mrs. Ivette Ferguson.

CHRISTMAS CSR FHC’s Saving Mascot “THRIFTY BEE” dances in the town centre after our CSR project in the area.

169

FHC FOUNDATION Scholarships and Entrepreneurial Awards function 2016.

JAMAICA CO-OPERATIVE CREDIT UNION LEAGUE LTD. 2016 CONVENTION & 75th ANNUAL GENERAL MEETING Held MAY 26-29, 2016 and August 20, 2016. HIGHLIGHTS _________________________________________________________ The Jamaica Co-operative Credit Union League’s 75th Annual General Meeting was held from May 26-29, 2016 at the Hilton Rose Hall Resort & Spa in Montego Bay. It was held under the theme Credit Unions: People Helping People.” Approximately one hundred and fifty (150) delegates and observers attended the week-end convention. The schedule of activities included a trade show. THE FOLLOWING ACTIVITIES TOOK PLACE:

170

Thursday, May 26 • The Credit Union Managers’ Association annual general meeting. • Mr. Errol Gallimore, Registrar of the Department of Co-operatives & Friendly Societies made a presentation on the theme “The Future of the Credit Union Movement: The Impact of the Changing Legislative Landscape” to a packed audience in the Hanover room, while moderator Mrs. Yvonne Ridguard Harris, Past President of JCCUL ably guided the discussion that ensued. • The Conference was officially opened on Thursday afternoon with the Honourable Donna Parchment Brown, Ombudsman as the keynote speaker. Friday May 29: Friday’s activities got off to a good start with “Rise & Shine” aerobics on the West Lawn of the hotel. This was followed by the plenary session that was attended by all delegates and observers. Director Winston Fletcher, Chairman of the Credit Union Development Task Force updated participants on the topic: “The Road Ahead: Credit Union Sustainability”. A total of six (6) workshops were held on Friday and they were as follows: • Employee Engagement and Resource Constraints: Can you keep the Motivation and Commitment in the workplace in times of crisis? by Dr. Noel Cowell. • Leadership: The Buck stops with me, by Mr. Herman Alvaranga • Towards a Green Economy - Can the Jamaican Economy thrive in a Changing Climate? by Ms. Heather Pinnock. • Cybercrimes: Identification, prevention and mitigation, by Dr. MoniphaHewling.

• How Well does your Credit Union Brand work for You, by Mr. Tom Hewlett • Intellectual Property: An Asset for the 21st Century, by Mr. Marcus Goffe The annual awards dinner ended the day. Guest speaker at this event was Mrs. N’Dombet Assamba, former Jamaican High Commissioner to the United Kingdom and former General Manager of COK Sodality, then. The following credit Unions received Credit union of the year awards: Awards Mega (Assets > $2 Billion) Winner Runner Up Large (Assets > $1 Billion - $2Billion) Winner Runner Up Medium (Assets > $300M to $1B) Winner Runner Up Small-Sized ( Assets < $300M ) Winner Runner Up

FIRST REGIONAL CO-OP JTA CO-OP JDF CO-OP NCB EMPLOYEES CO-OP LASCELLES EMPLOYEES & PARTNERS CO-OP BJ STAFF CHURCH OF THE FIRST BORN CO-OP NESTLE JAMAICA CO-OP

At the close of the banquet President Derrick Tulloch announced that the annual general meeting scheduled for the following day would not be held. Delegates had an opportunity to discuss with the League’s Board, the ramifications of the postponed meeting on Saturday morning. RESCHEDULED ANNUAL GENERAL MEETING - SATURDAY, AUGUST 20, 2016 The 75th Annual General Meeting was held on August 20, 2016, due to a rescheduling of the May 28, 2016 AGM. Twenty-two (22) Credit Unions with 19 delegates and 14 alternate delegates registered for this meeting. President Derrick Tulloch gave an overview of the financial sector and its challenges while noting that the Movement improved its savings, loans and assets when compared to the previous year 2014. However he said in spite of these improvements, the Movement’s share of the personal loans and savings market declined. ELECTION OF OFFICERS The Meeting voted to accept the nominations of the following persons who were duly elected to serve on the Board of JCCUL. • • • • •

Mrs. Andrea Messam Mr. Martin Blackwood Rev. Dr. Paul Gardner Mr. Patrick Smith Col. Radgh Mason

171

For the Supervisory Committee the following persons were nominated and duly elected: • Mr. Paul Nathan • Mr. Robert Ramsay • Mr. Sefton Cummings • Mrs. Tamara Baugh-Brissett • Mr. Michael Sutherland RESOLUTIONS Condolence and congratulatory resolutions were received on behalf of credit unions for volunteers who had passed on during the year. They include : Condolences for: • Dr. Dorothy Raymond • Reverend James Oswald Thorbourne • George Carter

172

Congratulatory resolutions were passed for: • Mr. Glenworth Francis – for receiving the Order of Distinction from the Jamaican Government for service to the Jamaica Co-operative Credit Union Movement. • Mrs. Yvonne Ridguard Harris for receiving a Badge of honour for Meritorious Service from the Government of Jamaica, for service to the Jamaica Co-operative Credit Union Movement and Community Service. • JPS & Partners Credit Union on its 60th anniversary. • Manchester Credit Union on its 65th anniversary. RULE CHANGES Rules changes were effected as follows: • Rule 17 (5), 25(1),(2) and 26 (1) • Rule 37 (1) (e) • Rule 37(4) The AGM voted to accept all the changes. Following the AGM the executive was elected to serve on the League Board for the 20162017 year: • • • • • • •

Reverend Dr. Paul Gardner - President Winston Fletcher -1st Vice President Clide Nesbeth - 2nd Vice President Andrea Messam - Treasurer Jerry Hamilton - Assistant Treasurer Lambert Johnson – Secretary Norris Gilbert - Assistant Secretary

• • • • • • • •

Martin Blackwood O’Neil Grant Anthony Young Rodcliffe Robertson Radgh Mason Patrick Smith Carol Anglin Derrick Tulloch

…………………………………… Basil Naar Delegate

…………………………………… Leodis Douglas Delegate

173

Branches

Address

Branch Managers

Kingston & St. Andrew

8-10 Eureka Road Kingston 5

Jacqueline Pingue - Smith

Lawrence Tavern Lawrence Tavern P.O. St. Andrew

St. Catherine 174

(AGM - Wealth Development and Sales

20 Dominica Drive Kingston 5

Rayon Wright

10 East Avenue Kingston 4

Melissa Miller - Benjamin

Lot 57 West Trade Way Portmore Town Centre

Trudian Stewart

Unit 13 6 March Pen Road Oasis Shopping Centre Spanish Town

Janet Richards

Shops 8 & 9 East Side Street Old Harbour St. Thomas

26 Queens Street, Morant Bay, St. Thomas

Almeta Johnson

Clarendon

Shops 5 & 6 Bargain Village Plaza May Pen

Norman Williams

Manchester

2 Perth Road Mandeville

Meegan Morgan-Gordon

St. James

21 Union Street Montego Bay

Marcia Bailey

FHC Investments Limited Kingston

Suite 27 Winchester Business Centre 15 Hope Road Kingston 10

Doreen Holness

Nadine Dyer Acting Manager – Risk and Compliance Kadian Dyke Manager – Micro & Small Business Loans Unit Denise Ellington Manager – Marketing and Communications Sophia Harvey Manager - Human Resource Development Alleesa Matherson Manager - Centralized Loans Unit Garfield Pearson Manager - Accounting & Treasury Rosemarie Samuels Manager - Training and Development Eugene Williams Manager - Business Development and Branch Sales Delano Walters Manager-Information Systems

175

1. Order Of Business An agenda shall be prepared by the Chairman and Secretary, and all items. Thereon shall take precedence over all other business. Any member desirous of introducing business for the consideration of the meeting may do so after the business on the agenda has completed, or may give notice of motion to be discussed at a further meeting.

2. Suspension Of Standing Order In the event of any matter of urgency, however, the Chairman may accept a suspension of the Standing Orders. The member moving such suspension must clearly state the nature and urgency of his business, the numbers of the standing orders affected, and the length of time he desires such suspension to last. At the option of the meeting, a further extension may be allowed, but no suspension shall take place except by majority vote of the members present.

3. Minutes

176

No motion or discussion shall be allowed on the Minutes except in regard to their accuracy. After the confirmation of the Minutes, they shall be signed by the Chairman, and the members shall than be at liberty to ask any questions in regard to matters arising out of them. Such questions shall be allowed for purposes of information only, and no debate on the policy outlined in the Minutes shall take place. 4. All persons desiring the floor shall rise and address themselves to the chair. They shall state their name and the Credit Union which they represent, if recognized by the chair, they shall have the privilege of the floor and all the rights thereof. 5. All speakers are to make use of the Desk and Floor Microphones when addressing the Meeting in order that it be recorded and made a permanent record in the Meeting Proceedings. 6. Should two or more persons rise at the same time, the chair shall decide, without debate, who is entitled to the floor.

7. Speeches No member shall be allowed to speak more than once upon any motion before the meeting, unless in Committee, or on a point of order, or explanation, except the mover of the Original Motion. But on an amendment being moved, any member even though he has spoken on a Original Motion, may speak again on the amendment. No member shall speak for more than five minutes at a time. Members wishing to raise points of order or explanation must first obtain

the permission of the Chairman and must raise immediately the alleged breach has occurred. Any member may formally second any motion or amendment and reserve his speech until a later period in the debate. 8. No person shall interrupt another who is speaking except on a point of order, a parliamentary inquiry, or a point of information. 9. If it should come to pass that a speaker is called to order while speaking, the speaker should take his seat until the question of order is determined.

10. Chairman's Ruling The ruling of the Chairman on any question under the Standing Orders, or on points of order or explanation, shall be final, unless challenged by not less than four members, and unless two-thirds of the members present vote to the contrary.

11. Interruption If any member interrupts another while addressing the meeting, or uses abusive or profane language or causes disturbance at any of the meetings, and refuses to obey the Chairman when called to order, he shall be named by the Chairman. He shall thereupon be expelled from the room and shall not be allowed to enter again until an apology satisfactory to the meeting be given. 177 12. A question shall not be subject to debate until it has been duly moved and seconded and is stated from the Chair.

13. Motions And Amendments The first proposition on any particular subject shall be known as the Original Motion, and all succeeding propositions on that subject shall be called amendments. Every motion or amendment must be moved and seconded by members actually present at the meeting before they can be discussed, and, wherever possible, should be set forth in writing. It is permissible for a member to make his speech first and conclude with a motion. When an amendment is moved to an Original Motion, no further amendment shall be discussed until the first amendment is disposed of (Notice of any further amendment must be given before the first amendment is put to the vote).

14. Substantive Motions If an amendment be carried, it displaces the Original Motion and itself becomes the substantive motion, whereupon any further amendment relating to any portion of the substantive motion may be moved, provided it is consistent with the business and has not been covered by an amendment or motion which has been previously rejected. After the vote on each succeeding amendment has been taken, the surviving proposition shall be put to the vote as the main question, and if carried shall then become a resolution of the meeting.

15. Right Of Reply The mover of the Original Motion shall if no amendment be moved, have the right of reply at the close of the debate upon such motion. When an amendment is moved he shall be entitled to speak thereon in accordance with Standing Order No. 8 and at the close of the debate on such amendment shall reply to the discussion, but shall introduce no new matter. The question shall then be put to the vote immediately, and under no circumstances shall any further discussion be allowed once the question has been put from the Chair. The mover of an amendment shall not be entitled to reply.

16. Withdrawals Or Additions No motion or amendment which has been accepted by the Chair shall be withdrawn without the majority vote of the meeting. Neither shall any addendum or rider be added to a motion which has once been accepted by the Chair without majority vote. Should any member dissent, the addendum must be proposed and seconded, and treated as an ordinary amendment.

17. Closing Debate

178

The motions for the previous question, next business, or the closure, may be moved and seconded only by members who have not previously spoken at any time during the debate. No speeches shall be allowed on such motions. In the event of the closure being carried, the mover of the Original Motion shall have the right to reply in accordance with Standing Order No.16 before the question is put. Should any one of the motions mentioned in this Standing Order be defeated, thirty minutes shall elapse before it can be accepted again by the Chairman, unless he is of the opinion that the circumstances have materially altered in the meantime.

18. Adjournment Any member who has not already spoken during the debate may move the adjournment of the question under discussion, or of the meeting, but must confine his remarks to that question and must not discuss any other matter. The mover of the motion upon which the adjournment has been moved, shall be allowed the right to reply on the question of the adjournment, but such reply shall not prejudice his right of reply on his own motion. In the event of such motion being lost, it shall not be moved again, except in accordance with Standing Order 18. 19. Any member may call for a division of the House (that is, for a roll call vote) when there appears to be a reasonable doubt as to the accuracy of the vote as announced by the Chair. 20. A motion to lay on the table shall be put without debate. 21. Whispering, loud talking, or other disturbances calculated to disturb anyone while speaking will not be tolerated.

Adolphus Alston Andrea Andrew Angella Angella Anthony Avis Barrington Bentley Bernard Bernice Beverley Boris Carlos Carole Chrsitine Claudette Clotida Coretha Curtis Curtis Delano Denise Denise Derrick Derron Donna Donnaree Dorethea Doris Dorothy Earl Elaine Elijah Ena Freda Gillies Gracilee Harold

Knight Cleary Cunningham Foster Francis Phipps Rose Whittle Thames Foster Thompson Hall Walker Gordon Fairweather Morgan Pascal Leard Spencer Carr Brown Brown Graham Goffe Beckett Reynolds Salmon Dixon Bailey Brown Watson Elvey Thyme Gardener Miller Higgins Forbes Porter Murray Minott

Herman Hugh Hyacinth Irene Isamael Ishamale Jacqueline Jacqueline James Jennifer Joan Joseph Josephine Joslyn Joyce Kadene Karen Kathleen Kavian Keith Keneth Keron Lascelles Lenora Leroy Leroy Lolitha Loretta Madge Marjorie Marlene Marlon Martin Marva Mavis Mazianna Merle Mersha Micheal Michelle

Daley Aikman Brown Wilson Rhule Christie Smith Layne Thorbourne McLean Francis Wallen Harvey Dunbar Hyatt Thompson Dwyer Morris Grant Henry Bryan Walters Shirley Dixon Beckford Clarke Mitchell-Smith Watson-Wint O'meally-White Ramsay Ramsay Beale Hemmings Edman Vassell James Smith-Williams Brown-Francis Morrison Ellis

Millicent Miriam Monica Muriel Nicholas Noel Olga Oneil Orville Oswa Palmer Pearnell Phyllis Racquel Raymond Richard Rita Rockeem Rogane Romell Rose Marie Samuel Sheril Stanley Sylvia Trenton Trevelle Tricia Veronica Veronica Veta Whilel William Winston Winston Winston Yvonne

Palmer Williams Millwood Burke-Moss Lyon Edwards Levers Smith Vassell Hyatt Milicent Treasure Charles Bailley Gordon Harrison Thomas Martin Shand 179 Richards Burke-Bedasie Montaque Duncan Johnson Davis-Harper Brown Bailey Pearson Perch Blair Chin Dyer Harrison Nelson Fagan Martin Richards

Lord, make me an instrument of thy peace. Where there is hatred, let me sow love; Where there is injury, pardon; Where there is doubt, faith; Where there is despair, hope; Where there is darkness, light; and Where there is sadness, joy.

180

O Divine Master, grant that I may not So much seek to be consoled as to console; To be understood as to understand; To be loved as to love. For it is in giving that we receive; It is in pardoning that we are pardoned; And it is in dying that we are born to eternal life. Amen

182

183

184