Issuu

TABLE OF CONTENTS Vision & Mission Statements 02 Notice of Annual General Meeting 03 Agenda

Profile - First Heritage Co-operative Credit Union Limited

Minutes of the 13th Annual General Meeting

Corporate Governance Statement

Profile of Board of Directors

Board of Directors’ Report

Executive Team

Management Discussion & Analysis

Treasurer’s Report

Appropriation of Surplus Financial Statements

Supervisory Committee Report

200

Credit Committee Report

210

Nominating Committee Report

213

Resolutions

224

Pictorial Highlights

234

Report of the Delegates on JCCUL’S AGM

240

Branch & Unit Managers

250

Parliamentary Rules

253

256

Prayer of St. Francis of Assisi

259

82 YEARS STRONG. ONE PROUD HERITAGE. NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 14th Annual General Meeting (AGM) of First Heritage Co-operative Credit Union Limited, in our proud 82-year history of service and co-operation will be held in a hybrid format on Thursday, September 10, 2026 commencing at 2:00 p.m. at AC Hotel, Marriot, 38-42 Lady Musgrave Road, Kingston 5 and via the Zoom platform to allow members to: 1. Transact the ordinary business of the Society; 2. Consider and, if thought fit, pass a Resolution submitted by the Board of Directors in respect of amendments to the Rules of First Heritage Co-operative Credit Union Limited to make changes that will allow more time for the election process, thereby facilitating the selection of the best individuals to fill the various posts required to carry out the Society’s business, while ending nominations from the floor; and 3. Consider and, if thought fit, pass a Special Resolution authorizing the full divestment, by sale or other lawful disposition, of up to one hundred per cent (100%) of the First Heritage Co-operative Credit Union Limited’s shares and ownership interests in FHC Investments Limited. Instructions for Attendance Members attending in person or virtually are invited to register using the appropriately labelled link on our website: www.fhccu.com/agm. Remote access will be facilitated via the Zoom platform, and 150 members will be hosted in person at AC Hotel, Marriott. Once registered, you will receive your online meeting credentials. Registration will commence on Wednesday, September 2, 2026, at 5:00 p.m. and will close on Tuesday, September 8, 2026, at 11:59 p.m. For more information regarding attendance, registration, and the voting process, you may email us at info@fhccu.com, call our Member Contact Centre at 876-929-5142, or WhatsApp us at 876551-8193. A copy of the full resolutions and the 2025 Annual Report will be made available on our website at www.fhccu.com. Dated this 28th day of August, 2026.

................................................................ Carian Freckleton-Cousins Secretary, Board of Directors 3

AGENDA Ascertainment of Quorum Call to Order and Prayer Chairman’s Opening Remarks and Tributes Reading and Confirmation of the Minutes of the 13th Annual General Meeting held on Monday, June 16, 2025 REPORTS: Board of Directors Management Auditors and Treasurer Supervisory Committee Credit Committee Resolutions ELECTIONS: Nominating Committee Report Elections to: Board of Directors Supervisory Committee Credit Committee Any Other Business Vote of Thanks Termination

82 YEARS STRONG. ONE PROUD HERITAGE First Heritage Co-operative Credit Union Limited (FHC) stands on a proud and enduring legacy of cooperation, service and financial empowerment. Marking over 80 years of institutional history - we celebrate a journey shaped by the foundations laid by GSB Co-operative Credit Union Limited, Churches Co-operative Credit Union Limited, whose merger in 2012 gave rise to FHC Credit Union. Later, on March 1, 2015, the business and operations of St. Thomas Co-operative Credit Union Limited were transferred to FHC. Today, that rich heritage continues to inspire our evolution as we remain committed to creating value, expanding opportunities and helping our members build stronger financial futures. 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, 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; 55

PROFILE - FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

g. h. i. j.

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 is being admitted to membership has attained the age of eighteen (18) years.

The Credit Union has a membership base of approximately 150,000 members across a network of ten (10) branches strategically located across the island; offering a suite of Nineteen (19) products and services. Our extensive array of products and services include a variety of loans, savings, term deposits for both personal and business purposes. In addition, we have investment and pension options from our subsidiary, FHC Investments Limited (FHCIL). Our products and services are specifically designed to meet the needs of members at every stage of their lives. Subsidiary - FHC Investments Limited (FHCIL) FHC Investments Limited (FHCIL), is a limited liability company and a wholly owned subsidiary of FHC, established to provide investment opportunities for members and non-members of the Credit Union. It is located at 20 Dominica Drive, Kingston 5. 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: • Stock Brokerage/Equities • Bonds (local and foreign) • Corporate Financing Structures • Money Market Instruments • Portfolio Management • Investment Advisory • Retirement Planning

PROFILE - FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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. Retirement Scheme The FHC Retirement Scheme (formally 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 strategic objective of the Scheme is to ensure that more Jamaicans have a retirement plan to which they are consistently contributing, thus safeguarding their retirement.

THE CREDIT UNION MOVEMENT LOGO The “hands, family and globe” symbol, represents credit unions worldwide. This trademark represents credit unions in any language. The theme is universal and conveys the image of all credit unions. THE GLOBE - This represents the international network of credit unions. THE FOUR SILHOUETTES - This represents the family of mankind working for the mutual benefit of all. THE HANDS -This represents the self-help nature of credit unions.

MINUTES OF THE 13TH ANNUAL GENERAL MEETING MINUTES OF THE 13TH ANNUAL GENERAL MEETING OF FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED HELD HYBRID ON MONDAY, JUNE 16, 2025 AT SUMMIT (FORMERLY KNUTSFORD COURT HOTEL) 16 CHELSEA AVENUE, KINGSTON 10.

1. ASCERTAINMENT OF QUORUM AND CALL TO ORDER The Chairman called the meeting to order at 2:09 p.m. and welcomed all to the 13th Annual General Meeting. A quorum having been confirmed, the Board Secretary, Mrs. Freckleton-Cousins, was invited to read the Notice convening the meeting. She thereafter invited all to stand for the playing of the National Anthem. 2. PRAYER Mr. Andre Johnson was invited to lead the meeting in prayer. 3. OPENING REMARKS, APOLOGIES & TRIBUTES The Chairman welcomed all attendees both in person and online. She then invited all to stand for a minute of silence in observance of the members who passed during the year under review to include Miss Janyce Robinson, former Chairman of the Credit Committee. She then invited the Secretary to welcome the specially invited guests to the meeting; and the Secretary extended a warm welcome to the following persons: Mr. Errol Gallimore Mrs. Sheryl Brown Ms. Tenesha Grant Ms. Tricia Bonfield Mr. Robin Levy Ms. Vera Mrs. Georgia Morrison

Department of Co-operatives and Friendly Societies Department of Co-operatives and Friendly Societies Department of Co-operatives and Friendly Societies KPMG Jamaica Co-operative Credit Union League Limited Jamaica Co-operative Credit Union League Limited CUNA Caribbean Insurance Jamaica Limited

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Mr. Bornette Donaldson Ms. Moniesha Bryan Mr. Herbert Hall

National Union of Co-operatives Societies Caribbean Assurance Brokers Limited CUMAX Wealth Management Limited

The Secretary then welcomed the Board of Directors led by Mrs. Camelle Ricketts-Moore, the invaluable volunteers, the newly appointed CEO, Mr. Xavier Allen who joined the team April 1; and the valued members. Apologies for absence were received from the following persons: Honourable Mr. Justice Evan Brown, Director Mrs. Saint Beverley Tomlinson, AGM – Retail, Sales & Service Member, Ms. Shelly-Ann Soares Apology for lateness was received on behalf of Mrs. Karlene Mitchell-Gordon. 4. INTRODUCTION OF THE BOARD OF DIRECTORS The Chairman, Mrs. Camelle Ricketts-Moore, then introduced the following Directors and volunteers: Mr. Wayne Jones Mr. Richard Ranger Ms Nickeisha Walsh Mr. Kevin Forbes Mrs. Carian Freckleton-Cousins Mr. Andrew Nooks Mrs. Karla Stephens-Hall (online)

1st Vice Chairman 2nd Vice Chairman Treasurer Assistant Treasurer Secretary Director Director

She also introduced herself as the Chairman and then introduced the Committee Chairpersons as follows: Credit Committee Mrs. Althea Daley

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Supervisory Committee Karlene Michelle Gordon Mrs. Ricketts-Moore then stated that an instructional video would be played to assist the members with navigating through the Zoom platform; and members online were informed that should they experience any technical challenges they should text the WhatsApp number provided. 5. READING & CORRECTION OF THE MINUTES OF THE 12TH AGM The Minutes were taken as read on a motion moved by Director, Mr. Richard Ranger, seconded by Member, Mr. Edmund Jones. The Secretary directed the meeting’s attention to the Minutes commencing at page 14 through to page 38 which were projected onscreen and asked for corrections. There being no corrections, the Minutes were confirmed on a motion moved by Member, Mrs. Beverly Gustaf, seconded by Member, Mr. Sydney Manhertz. 6. MATTERS ARISING FROM THE MINUTES OF THE 12TH AGM There were no matters arising. 7. BOARD OF DIRECTORS’ REPORT The report was taken as read on a motion moved by Member, Mr. Cranston Ewan, seconded by Board Secretary, Mrs. Carian Freckleton-Cousins. The Chairman extended a warm welcome to all, to include Immediate Past Chairman, Mrs. Leodis Douglas who was online. The Chairman began her report by stating that despite mounting macroeconomic and operational challenges, the Credit Union remained steadfast in its commitment to the co-operative principle of ‘people helping people’ and demonstrated resilience and excellence throughout 2024.

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She then highlighted the following: The Credit Union achieved a surplus of $354.34 Million up from $330.66 Million in 2023, representing a year over year increase of 7.16%. While total asset base grew by 7.96% reaching $29.49 Billion at the end of the year, an increase of $1.51 Billion over the previous year. This outstanding performance was a result of strong revenue generation, discipline, cost control and enhanced operational efficiency. Growth in both the loan and deposit portfolios were strategically pursued with emphasis on deposits to cushion against ongoing market shifts. Noting that the growth strategy employed was anchored in the Credit Union’s ‘member first’ philosophy and 2040 Vision. In 2024, strong emphasis was placed on strengthening organizational culture, expanding the suite of products and services and driving member value through digital innovation. The groundwork laid during the year supported the ongoing digital transformation journey redounding to the benefit of the Credit Union in an increasingly tech driven financial services landscape. In relation to the subsidiary, FHC Investments Limited faced notable challenges in 2024 ending the year with a loss of $40.94 Million after tax. Though this reflected an improvement over the $56.16 Million loss in 2023, the impact of prevailing market volatility combined with disruptions from a cyber incident during the year, heavily impacted the company's overall performance. The Team focused on strengthening operations and internal processes through advancing technology adoption and refining investment strategies to support improved outcomes and growth. FHC Retirement Scheme remained a key element in the members’ long term financial planning, and continued to contribute positively to investment income for FHCIL and would be a significant growth area for the Group in the coming years.

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Overall, the Credit Union remained committed to expanding its offerings through increased membership, enhanced advisory services and improved access and retirement education. With respect to the FHC Foundation, throughout 2024, a total of $3.6 Million was donated to 21 recipients as part of the annual scholarships, bursaries and grants, namely, Primary Exit Profile, Oswald Thorbourne and Renald Mason Scholarships along with the FHC Sports Education Scholarship. Five new PEP scholars were awarded recurring scholarships and five one time bursaries granted valued at $20,000 each. Two students of the G.C. Foster College of Physical Education and Sport were awarded the FHC Sports Education Scholarship, valued at approximately $250,000 each. Micro and Small Business Entrepreneur grants were awarded to three recipients at a total value of $1.5 Million. The 2024 programme equipped all candidates with training in key entrepreneurship principles reinforced through a focused incubator session and structured quarterly check ins. These scholarships, she noted, would continue to go a long way in fulfilling our mandate of advancing the educational development of the young people of Jamaica. In closing, the Chairman assured the members that the Credit Union was well positioned to sustain growth and transformation, and their perspective on achieving key strategic obligations remained positive. Additionally, the management team would continue to drive operational excellence and enhance financial inclusion opportunities, honouring their promise of creating a secure future. She conveyed sincere thanks to the valued members for their unwavering support, trust and loyalty to the Credit Union. And also extended thanks to her fellow Directors, volunteers, and the management team for their prudent stewardship which allowed them to achieve the results being reported on, and the wider FHC team for providing the highest level of service to the membership. Comments & Questions No questions arose following the Chairman’s presentation. There being no questions, the Board of Directors’ Report was adopted on a motion moved by Treasurer, Ms. Nickeisha Walsh, seconded by Assistant Treasurer, Mr. Kevin Forbes.

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8. MANAGEMENT REPORT The Report was presented by the CEO, Mr. Xavier Allen. This being his first AGM, Mr. Allen expressed pleasure in seeing so many members joining both inperson and virtually and added that he was looking forward to meeting and interacting with them following the meeting. He shared that since joining as the CEO two months ago, he spent his first weeks actively listening, learning and engaging with Management, team members and Directors and expressed appreciation to all for the warm welcome. Mr. Allen stated that he stepped into his role with a clear sense of responsibility and deep commitment to the ‘member-at-the-centre’ mantra that had been guiding First Heritage for over a decade; and that in advancing the 2040 strategic vision, FHC would be focused on three pillars, that of digital transformation, inclusive innovation and sustainable growth. In this regard, they would be empowering the staff to lead on this by providing training, the tools needed and a shared vision for service excellence through enhanced efficiency. For the Credit Union to remain financially agile in a changing economy, he stated that they would have to grow surplus and expand the suite of products and services to meet the evolving needs of the members. In addition, they were also committed to smart member driven growth through targeted campaigns, enhanced sales and service delivery and optimized operations. Mr. Allen assured all that he was there to lead as the CEO - to support, walk, build and dream with the members and invited all to step boldly into the new chapter together with innovation in their hands, service in their hearts and growth in their sight; as with their continued support, they would continue to make FHC not just a trusted Credit Union but a dynamic forward thinking entity that truly puts members at the forefront.

He then proceeded to the Management Report which was taken as read on a motion moved by Volunteer, Mrs. Althea Daley, seconded by Member, Ms. Beverly Gustav.

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Mr. Allen then highlighted the following: He asked all to applaud the Acting CEO Mr. Quilston Harrison and the management team for the excellent job done by them during the transition period. Albeit the economic challenges and regulatory landscape, the FHC team remained focused and adaptable enabling the company to exceed expectations across several key performance areas while remaining steadfast in its commitment to placing members at forefront. The following results reflected their ongoing dedication to sound governance, strategic focus, and most importantly, delivering real value to the members. At the end of 2024, Loan disbursements to members totalled $6.12 Billion; the loan portfolio grew to $15.07 Billion, deposits grew to $16.49 Billion and the Credit Union's Total Asset base stood at $20.49 Billion and Net Surplus at $354.34 Million. These results, he noted, were driven by strong revenue performance and careful cost management. Throughout the year the Credit Union deepened its relationship with members through meaningful engagement and personalized support. It enhanced internal culture and performance, promoting teamwork, accountability and continuous improvement, and delivered innovative services adding tangible value to members. In terms of member engagement, in 2024 the Credit Union made significant strides focusing on values, relevance and responsiveness as demonstrated through the significant loan disbursements and the targeted deposit offerings through the various promotions. Key partnerships were also reinforced especially within the civil service sector as well as establishing valuable new relationships in the private sector. A number of staple FHC events were executed throughout the year, namely the FHC Scholarship Awards, the FHC Civil Servants of the Year Award, Credit Union Week Celebration in October, and the 2nd staging of the FHC Christmas Jolly Jubilee Lunch Hour Concert. Several promotional activities were undertaken throughout the year to include the ‘Zest of the Summer - Save or Borrow’ Sale; 'Sleigh the Season' Christmas Sale; AccessPlus Debit Mastercard

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and ‘Cash In A Flash’ Black Friday Sale Promotion; ‘Access Di AccessPlus Brawta Campaign’ a JCCUL led promotion that was won by Mrs. Tameka Benjamin, a member of FHC and the Credit Unions of Jamaica Christmas Promotion ‘Check out this Christmas’ won by Miss Patsy Ruddock, another FHC member. Focus was placed on strengthening the team through FHC’s investment in learning and development which would empower the staff and drive organizational excellence. Over the past year, team members participated in an extensive range of training programmes spanning critical areas, namely, compliance, leadership and development, fraud prevention, customer service and technology skills. He outlined that several staff engagement activities were also hosted. In relation to the subsidiary, FHC Investments Limited, he noted that it was a challenging year for the company where they reported a net loss of $40.94 Million after taxes compared to a loss of $56.16 Million the previous year, which losses, he stated, were driven mainly by reduction in interest income and increasing operating expenses. Income decreased by 31.65% due to a reduced portfolio size. Operating Expenses increased by 23.65% due to staff costs, regulatory and audit fees and Funds Under Management declined by $517 Million year over year to $2.6 Billion due to a reclassification to exclude certain non discretionary fixed income and equity portfolios. Conversely, the FHC Retirement Scheme experienced moderate growth as 41 new members were enrolled. Members' contributions totalled $160.57 Million which was a 4% increase over the prior year while Net Assets available for benefit grew by 10%, to end the year at $1.728 Billion. He indicated that strategies were being put in place to strengthen FHCIL's overall financial outlook in 2025 to include rebuilding the sales team, enhancing operational efficiencies, improving technology to better serve clients, reduce cost and capitalizing on market opportunities. Risk oversight and governance remained a critical pillar in the operation of the Credit Union. Guided by the Enterprise Risk Management Framework, they maintained a pro active approach to managing risks to include ongoing regulatory training and compliance with Anti Money Laundering and Counter

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Financing of Terrorism Standards, the Foreign Account Tax Compliance Act, Common Reporting Standards and Data Protection Act requirements. Operational Efficiency continued to be a strategic imperative, enabling them to achieve a strong balance between protecting the organization's interest and maintaining service excellence, particularly in underwriting and retail operations. He assured all that FHC remained optimistic and focused on advancing its mission to reliably support its members in their financial wellness journey. In closing he expressed appreciation to the Board of Directors, Volunteers, Executive Management, Team Members, and the valued members for their unwavering support and contribution to the Credit Union's success. There being no questions, the Management Report was accepted on a motion moved by Board Secretary, Mrs. Carian Freckleton-Cousins and seconded by Member, Nicole Jarrett. 9. AUDITOR’S REPORT The meeting gave permission for the abridged version of the Auditor’s Report to be read. This was approved on a motion moved by Director, Mr. Andrew Nooks, seconded by Member, Mr. Sydney Manhertz. Ms. Tricia Bonfield, Auditor’s representative from KPMG was invited to present the abridged version of the Auditor’s Report, which stated, among other things that in their opinion proper accounting records had been maintained. 10. TREASURER’S REPORT The Report having been previously circulated was taken as read on a motion moved by Member, Ms. Michelle Tracey, seconded by Director, Mr. Richard Ranger. The Treasurer Ms. Nickeisha Walsh, highlighted the following:

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For 2024, Total Revenue grew by $246.64 Million or 10% ending the year at $2.69 Billion compared to $2.45 Billion the previous year. Despite it being a challenging year, FHC realized a surplus of $354.34 Million compared to the prior year’s surplus of $330.66 Million; this is the highest surplus realized since the Credit Union’s inception and she commended the team for a job well done. The subsidiary, FHCIL recorded a Net Loss of $40.94 Million after taxes, which was an improvement from the $56.16 Million loss in 2023, The Group ended the year with Total Assets of $20.55 Billion, compared to $19.04 Billion the previous year. The Group's Net Loan portfolio increased by 11.47% moving from $13.52 Billion to $15.07 Billion. Members' Deposits increased by $1.24 Million or 8.12% moving from $15.25 Billion in 2023, to $16.49 Billion in 2024. Interest Income increased by $219.43 Million or 9.72% moving from $2.26 Billion in 2023 to $2.47 Billion in 2024, due primarily to the increased earnings from a new loan portfolio and higher yields on the invested funds. While Non Interest Income increased by $27.21 Million or 13.95%, moving from $195.02 Million in 2023 to $222.23 Million. Interest Expense increased to $331 Million in 2024 up from $288.38 Million in 2023. The Treasurer attributed the increase to the continued growth of the deposit portfolio and the significant take-up of the term deposit. She encouraged the members to invest their money in FHCCU as they continued to offer the most competitive interest rate available on the market. Operating Expenses increased by $192.42 Million or 13.23% moving from $1.6 Billion in 2023 to $1.77 Billion in 2024.

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The portfolio for loans over 30 days past due ended the year at 7.29% compared to 7.72% the previous year. Provision for Loan Losses for the year, net of recoveries ended the year at $226.22 Million compared to $174.02 Million in 2023. The provision for Loan Losses continued to be adequate to cover potential losses. Accumulated Surplus available for distribution increased to $352.83 Million in 2024. Institutional Capital to Total Asset Ratio stood at 11.32% as at December 31, 2024, which compared favourably to JCCUL’s PEARLS standard of 8.00% and 6.00% required for BOJ; and noted that key prudential ratios such as Capital and Liquidity remained adequate and above benchmark. In closing, Ms. Walsh stated that the Credit Union delivered a record year of strong performance in 2024 which was worthy of accolades, having had to manoeuvre and respond to economic challenges such as inflation, increase in interest rates and the global supply chain disruptions. She attributed the success of the Credit Union to the continued support of the members and the dedicated team members and volunteers. She thanked the volunteers, the Management Team, staff and Board of Directors for their continued support and for contributing to another year's success. She extended thanks to the Auditors for their professional contribution to the audit process. Ms. Walsh also thanked the members for their unwavering support and loyalty and for giving her the privilege to serve as Treasurer. Comments & Question Member, Mr. Michael Burke congratulated the Treasurer for an excellent report which he stated was probably one of the best reports ever in his opinion. He further congratulated the Supervisory Committee for ensuring that everything went well. He added that some credit unions that supported a certain resolution about how committees were elected had gone into a deficit, and attributed this to the Supervisory Committee no longer having to face the floor for re-election and invited all to look at what he wrote on Facebook earlier in the day in relation to such resolutions.

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A member queried what FHC Investments was about as she was not aware of their products. Mr. Green, General Manager of FHCIL, explained that this is the investment arm of the Credit Union, and they offer a wide range of short, medium, long term and low risk, medium risk and high risk investments both in Jamaican and United States currency. He added that they also operate a Pension Fund. He invited all to check out the offerings on their website and anyone wishing for further information to have a talk with him after the meeting. Member, Mr. Robin Levy pointed out for clarify that FHCIL was not a deposit taking institution and as such could only accept investments. There being no further questions the Treasurer’s and Auditor’s Reports were approved on a motion moved Member, Mr. Earl White, seconded by Member, Mrs. Deana Dixon Reittie. 11. DISTRIBUTION OF SURPLUS The Treasurer tabled the Distribution of Surplus as presented in the Annual Report outlining the proposed distribution of $352.8 Million for 2025 as follows: Dividend on Permanent Shares Honoraria Donations Donation to the FHC Foundation Retained Earnings Accumulated Surplus

$31 Million $10.6 Million $2 Million $1.2 Million $200 Million $107,904 Million

This was approved on a motion moved by Volunteer, Mrs. Althea Daley, seconded by Member, Ms. Deborah Allen. 12. MAXIMUM LIABILITY In keeping with the rules of the Credit Union, it was proposed by the Treasurer that the Maximum Liability be fixed at 20 times that of its share capital.

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This was approved on a motion moved by Member, Mr. Cranston Ewan, seconded by Member, Ms. Beverly Gustaf. 13. SUPERVISORY COMMITTEE REPORT Mrs. Karlene Mitchell Gordon was invited to present the Supervisory Committee Report which was taken as read on a motion moved by Member, Ms. Suzette Grant, seconded by Member, Ms. Venecia Bennett. She then highlighted the following: She informed the meeting that there was a cyber-attack on the Credit Union in 2024 and since then management strengthened the IT controls and operational safeguards. She noted that members’ funds were not affected. For 2024, all 8 audits were completed achieving a target of 100% compared to the initial target of 70% that was set. She extended thanks to the Internal Audit team for an excellent performance. She then gave a detailed summary of the 8 audits that were carried out. Of the 112 special investigations reported for 2024, 100 were completed and 12 were in progress. She reported that bank reconciliations were reviewed in a timely manner, however, due to resource constraints, one bank account was not reviewed, and the issue was being addressed. The past due loan balances for staff, volunteers and connected parties were monitored more closely than other loans and as at December 31, 2024, there were 3 connected party accounts with loans over 30 days past due, and management had since reached out to these persons to have their accounts regularized. She thanked the members of the Credit Union, the Management Team and team members, Internal Audit Department and the Board of Directors for support given to them during the year.

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Comments & Questions Member, Mr. Michael Burke queried if there was a Cyber Fraud Detective on the staff of First Heritage, and if not, whether consideration was being given to having one on board. The CEO, Mr. Xavier Allen, stated that they were in the process of onboarding a cyber security expert. Mr. Burke congratulated the Supervisory Committee for the work done by them during the year under review. In relation to the cyber insurance claim, a member queried as to when the Credit Union would be compensated. Mr. Allen stated that the process was a very delicate and tedious one, but they would be following up to ensure that the claim was handled appropriately. He added that giving a timeline at this point was not possible, but that they were far advanced in the process. Member, Ms. Angeline Kerr questioned why a staff member would be showing up as past due when their payments should be done via salary deduction. Mr. Quilston Harrison, General Manager, Credit Administration & Loan Risk, explained that these were connected parties and it could occur in such cases as connected parties were not required to pay via salary deduction. Queried further by Ms. Kerr as to what was meant by ‘connected parties’, Mr. Harrison explained that connected parties are persons related to employees or Board Members, hence the reason for the close monitoring of this group of people. Member, Mrs. Simone Vernon Smith asked how much money was lost in 2024 due to the cyberattack. Mr. Garfield Pearson, General Manager Finance & Treasury stated that he wouldn’t term it as a loss

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per se, noting that $51 Million was expended to improve the system software as it relates to licensing, following the cyber incident. Mr. Allen added that it was not an actual loss as the cost was recovered the following month. There being no further questions, the Supervisory Committee Report was accepted on a motion moved by Member, Ms. Beverly Gustaf, seconded by Member, Mrs. Deana Dixon Reittie. 14. CREDIT COMMITTEE REPORT The Report was presented by Volunteer, Mrs. Althea Daley and was taken as read on a motion moved by Member, Ms. Antonette Semester, seconded by Member, Mr. Edmund Jones. Mrs. Daley stated the following: For the financial year 2024, the Credit Union's loan portfolio performed creditably. The gross portfolio was $15.82 Billion, an increase of 11.47% compared to $14.21 Billion in 2023. Loans disbursed for 2024 totalled $6.121 Billion. She noted that January 2024 disbursement of $679.09 Million was the highest monthly disbursement recorded. In terms of the Micro and Small Business loans, $198.63 Million was disbursed compared to $287 Million the previous year. She noted that the Credit Union was moving in the right direction regarding the past due rate in the micro loan portfolio which stood at 23.41% at the end of the year compared to 27.89% the previous year. The overall Past Due rate for 2024 was 7.29% compared to 7.72% the previous year. 1,004 loans were reviewed for the period totalling $381.08 Million and $102.79 Million were reviewed by the Board of Directors. The Credit Committee commended the Management Team for a strong 2024 performance, the strategic

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partnerships developed, close portfolio monitoring, timely remedial action to curtail delinquency and the attractive loan sales offered which all contributed to the high level of performance. She encouraged the members to seek assistance from the Credit Union when facing challenges as the Credit Union was willing to offer support where necessary. She thanked the Board of Directors, the Supervisory Committee and team members for their invaluable support and the members who continued to support the Credit Union by taking loans and making their payments on a timely basis. There being no questions, the Report was accepted on a motion moved by Secretary, Mrs. Carian Freckleton Cousins, seconded by Member, Ms. Lois Ann Russell. 15. RESOLUTION Proposal to Amend the Credit Union Rules to Discontinue Nominations from the Floor Mr. Errol Gallimore, Registrar of the Department of Co-operatives and Friendly Societies was invited to take the meeting through the resolution. Mr. Gallimore stated that the resolution was a reflection of his office’s efforts over the past 4 to 5 years to have nominations that usually come from the floor at credit union and other co operative societies’ AGMs go through a process of due diligence where the credit unions are given an opportunity to look at persons' qualifications and skillsets and their financial standing with their credit union. With that background in mind, he stated that the resolution was not about disenfranchising anyone from being duly nominated to serve on the Board or the committees, but it would allow a prescribed procedure to take place by following a due process approach. He noted that they were operating in a new dispensation that requires a certain type of knowledge and skillsets and even though the volunteers don't get paid, an enormous amount of responsibilities are thrusted upon them including the fit and proper requirement where if they do anything wrong they could be held accountable from his office and the Bank of Jamaica.

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In response, Member, Mr. Michael Burke stated that things have changed in some of the credit unions that have adopted this method and he therefore was asking for an amendment whereby the Board and the Credit Committee could be chosen via this new method, but the Supervisory Committee must be elected from the floor. Mr. Gallimore stated that since the implementation of the rule amendment in 18 of the 23 credit unions, they have seen improvement in the oversight provided by the Supervisory Committee, due to the Nominating Committee being able to look carefully at qualifications, and skillsets in nominating persons to the Supervisory Committee. A robust question and answer session ensued thereafter. . Board Secretary, Mrs. Freckleton Cousins then read the Resolution in its entirety and thereafter addressed some of the discrepancies expressed by members which resulted in some corrections being made to the document. Member, Mr. Burke then proposed a motion to make an amendment to item (o) which speaks to the Supervisory Committee, to insert the phrase, "with the exception of the Supervisory Committee that shall be elected from the floor." This proposal was seconded by Member, Ms Beverly Gustaf.

Member, Mr. Edmund Jones, in discussing the motion, shared that he was one of the authors of that Rule many years ago, and that he also acted as Chairman of the Nominating Committee on a couple of occasions when he was on the Board. He stated that he was pleased to see the resolution as it addressed a lot of the encumbrances and hurdles that he had when he chaired the Nominating Committee in trying to ensure that they chose the correct persons for the correct volunteer positions and it was on that basis that he disagreed with Mr. Burke’s point. Mr. Gallimore then proceeded to the vote on the motion proposed by Mr. Burke. At the end of the count Mr. Gallimore announced that 2 persons online voted in favour of the amendment and 20 voted against and in the room 8 voted for, and 58 voted against it with 6 abstentions, and therefore the motion was defeated.

MINUTES OF THE 13TH ANNUAL GENERAL MEETING

He then returned to the substantive resolution and asked for a mover and a seconder. This was moved by Secretary, Mrs. Carian Freckleton Cousins, seconded by Member, Mr. Wolde Dawitt. Mr. Gallimore noted that present in the room were 123 persons and online were 102 making a total of 225 members and that it required 75% of 225 persons to vote in favour of the resolution for it to be carried. He then put it to the vote and at the close of the vote he announced that there were 13 abstentions, 5 against and 117 voted in favour, resulting in the resolution being defeated. 16. NOMINATING COMMITTEE REPORT The Chairman presented the Nominating Committee Report. She stated that the Committee was appointed in accordance with the provisions of Article XIV, Rule 59 of the Rules of First Heritage Cooperative Credit Union Limited and comprised of herself, Mrs. Camelle Ricketts Moore as Chairman, Mr. Richard Picart and Mrs. Karlene Simpson. She noted that the Committee met to consider all retiring volunteers from the Board of Directors, and the Supervisory and Credit Committees. The vacant positions, she stated, were advertised and candidates were assessed and the following recommendations made. Board of Directors Mr. The following Board Members would be retiring: Mr. Richard Ranger Ms. Nickeisha Walsh Honourable Mr. Justice Evan Brown She pointed out that a vacancy existed on the Board of Directors in relation to Mr. Stefan Richards who vacated office on November 15, 2024, and in accordance with Article IX, Rule 28 (b) Mr. Andrew Nooks was appointed by the Board of Directors to temporarily fill this vacancy on the 15th of January 2025.

MINUTES OF THE 13TH ANNUAL GENERAL MEETING

She thanked Honourable Mr. Justice Brown and Mr. Richards for their service to the Credit Union and wished them all the best in their future endeavours. Mrs. Ricketts-Moore noted that the Committee nominated the following persons who indicated their willingness to serve for another two years, and she asked them to stand as she called their names: Mr. Richard Ranger Ms. Nickeisha Walsh Mr. Andrew Nooks Ms. Nicole Adamson The following Directors would continue to serve for one year: Mrs. Camelle Ricketts Moore Mr. Wayne Jones Mr. Kevin Forbes Mrs. Carian Freckleton Cousins Mrs. Karla Stevens Hall She drew the meeting’s attention to the profiles of the nominated Directors provided in the Annual Report for their perusal. Supervisory Committee The Chairman noted that all members of the Supervisory Committee would retire at this AGM as follows: Mrs. Karlene Mitchell Gordon Ms. Tanisha Thompson Mrs. Carol Dallas Robinson Mr. Dwayne Tabannah Mr. Adjaynae Billings

MINUTES OF THE 13TH ANNUAL GENERAL MEETING

She advised that all indicated their willingness to serve and were nominated to serve for a term of 1 year. Credit Committee The Chairman noted that a vacancy existed on the Credit Committee in relation to the late Ms. Janyce Robinson who had vacated office on December 9, 2024 due to ill health and subsequently passed, and in accordance with the Article IX, Rule 28 (b) Mr. Stennett McLean was appointed by the Board of Directors to temporarily fill the vacancy on February 18, 2025. The Credit Union, she noted, was grateful for Ms. Robinson’s distinguished and dedicated service. The Chairman noted that the Committee nominates the following persons who have indicated their willingness to serve for a term of 2 years: Mrs. Althea Daley Mr. Stennett McLean She directed the meeting to the profiles of these candidates in the Annual Report. She then invited the representative from the Department of Co operatives and Friendly Societies to conduct the elections. 17. ELECTIONS Mrs. Sheryll Brown from the Department of Co-operatives and Friendly Societies conducted the elections. She asked for a mover and a seconder to adopt the Nominating Committee Report, it having been presented by the Chairman. This was moved by Member, Derrick Coward, seconded by Member, Wolde Dawitt.

MINUTES OF THE 13TH ANNUAL GENERAL MEETING

Board of Directors She noted that the following persons were nominated to serve for 2 years on the Board of Directors Mr. Richard Ranger Ms. Nickeisha Walsh Mr. Andrew Nooks Ms. Nicole Adamson She asked for nominations from the floor three times and hearing none, she declared the abovementioned Directors duly elected for a term of 2 years on a motion moved by Member, Mr. Derrick Coward, seconded by Member, Mrs. Karlene Mitchell Gordon. Supervisory Committee Mr. Brown asked for nominations from the floor three times for the Supervisory Committee and hearing none she declared the following persons duly elected to the Supervisory Committee for a term of 1 year on a motion moved by Member, Mr. Earl White, seconded by Director, Mr. Kevin Forbes. Mrs. Karlene Mitchell Gordon Ms. Tanisha Thompson Mrs. Carol Dallas Robinson Mr. Dwayne Tabannah Mr. Adjaynae Billings Credit Committee Having asked three times for nominations from the floor, and hearing none Mrs. Brown declared the following persons duly elected to the Credit Committee for a term of 2 years on a motion moved by Member, Mr. Wolde Dawitt and seconded by Member, Ms. Marjorie Rutty. Mrs. Althea Daley Mr. Stennett McLean

MINUTES OF THE 13TH ANNUAL GENERAL MEETING

Delegates to the League Mrs. Brown asked the members to grant permission to the Board to elect the delegates and alternate delegates to the League. This was accepted on a motion moved Mr. Derrick Coward and seconded by Miss Archer. She reminded the Board and Committees to meet, within 10 days of the AGM to select the Executive and submit the positions along with the contact information of all the volunteers to the League or any other fora or organization that they were a part of. Additionally, she reminded the Board and Management to inform the Department of any resignation or death within 30 days of such incident and, to also submit the names of the person co opted as the person who will replace them. 18. ANY OTHER BUSINESS In relation to the distribution of surplus, Member, Ms. Beverly Gustaf queried when the dividend would be paid. Ms. Walsh informed her that it was usually done by the end of the month after the AGM. Member, Mr. Michael Burke suggested that First Heritage Credit Union join the Jamaica Fishermen's Co operative Union. The Chairman stated that they would support any non financial co operative where feasible as the time had come for them to support not just the financial cooperators but the non financial cooperators as well. Member, Mrs. Elaine Allen Kelly enquired what the percentage dividend being paid is; to which Mr. Pearson stated that it was 8.5%. A brief segment of giveaways and prizes was then conducted.

MINUTES OF THE 13TH ANNUAL GENERAL MEETING 19. VOTE OF THANKS The Chairman invited Mrs. Freckleton Cousins to move the vote of thanks. Mrs. Freckleton Cousins stated that this was a very informative and spirited Annual General Meeting and it was a honour and pleasure for her to extend heartfelt thanks on behalf of the Board of Directors to the Management and team members of First Heritage Co operative Credit Union Limited. She extended deepest gratitude to the Almighty whose guidance, favour and grace continue to sustain the Credit Union; and to the Board of Directors, Supervisory Committee and Credit Committee members for their dedicated service, wise counsel and steadfast leadership and their unwavering commitment to good governance which has kept the Credit Union anchored and focused on its mission. Mrs. Freckleton Cousins expressed appreciation to the valued members for their loyalty, trust and participation. And to the special invitees whose presence, she noted, added prestige and depth to the day's proceedings. She thanked the management team and staff for their hard work, resilience, and commitment and expressed her appreciation to the event organizers, technical team and support staff for their seamless coordination and execution of the day's meeting both in person and virtually which went off without a glitch. She thanked everyone who took the time to be a part of this important occasion as their presence reflected their belief in the collective vision. Mrs. Freckleton Cousins shared that as they look ahead to another year of opportunities and impact, she hoped that they move forward together, stronger, more united and committed to transforming lives by building on their solid past to create a secure future. 20. TERMINATION The Chairman thanked all for coming and declared the meeting officially terminated at 5:55 p.m.

……………………………………................ Carian Freckleton-Cousins Secretary, Board of Directors 30

CORPORATE GOVERNANCE STATEMENT First Heritage Co-operative Credit Union Limited (FHC) prioritizes effective corporate governance to ensure the safe growth of our co-operative and to protect the interests of our valued members. We recognize that good corporate governance is fundamental to maintaining the trust and confidence of our members, team members, and stakeholders, and for safeguarding the financial well-being of our Credit Union. Our corporate governance framework is guided by the following principles: 1. Strong Board Oversight: Our Board of Directors is composed of highly experienced individuals who provide governance oversight using their diverse skills and expertise. The Board provides strategic direction and oversight, ensuring that FHC’s activities are in line with our vision, mission and values. Board members act in the best interests of our members and diligently exercise their fiduciary duties to safeguard our members’ financial interests. Our Board has established various committees, including a Supervisory Committee, Credit Committee, Corporate Governance Committee and an Audit and Risk Management Committee , among others, to provide specialized oversight and ensure that specific areas of governance are addressed in depth. These committees are composed of independent directors and volunteers and are responsible for providing recommendations and guidance to the Board. 2. Culture: Our Board of Directors and Management Team set the tone at the top of this organization by exemplifying the highest standards of integrity, transparency and accountability. This unwavering commitment to ethical conduct inspires our team members to uphold the principles of integrity, honesty, and professionalism in their dealings with members, colleagues, and stakeholders. Through regular communication and by leading by example, we create a corporate culture that fosters a sense of responsibility and respect for protecting our members’ resources. 3. Risk Management: We have robust risk management practices in place to identify, assess, and mitigate risks that may impact our Credit Union’s safety and soundness. These practices are regularly reviewed and updated to align with changing market conditions, technological developments, industry best practices, and regulatory requirements. We place a high emphasis on maintaining adequate capital levels, managing credit risk, liquidity risk, operational risk, and cybersecurity risk, among others.

CORPORATE GOVERNANCE STATEMENT

4. Internal Controls: We have instituted effective internal control mechanisms to safeguard the accuracy and integrity of our financial reporting, as well as the effectiveness and efficiency of our operations. We conduct regular internal audits and risk assessments to identify and address any control weaknesses and ensure compliance with policies and procedures. 5. Compliant Posture: We are committed to compliance with all applicable laws, regulations, and industry standards. We maintain strong relationships with regulatory authorities and proactively address any compliance or legal matters that may arise. We also have a comprehensive compliance program in place to ensure strict adherence to Anti-Money Laundering (AML) Regulations and other relevant laws. 6. Continuous Improvement: We are committed to continuous improvement and regularly review and update our corporate governance practices to ensure that they remain effective and aligned with our Credit Union’s strategic objectives, member needs and regulatory requirements. We welcome feedback from our members, employees, and stakeholders and use it as an opportunity to learn, adapt, and improve our governance practices. 7. Member-Centric Approach: Our Credit Union exists to serve our members, and their best interests are at the forefront of our decision-making processes. We believe that member engagement is critical to understanding their needs, expectations and concerns, and we strive to align our strategies and operations accordingly. In conclusion, at FHC, we are dedicated to maintaining the highest standards of corporate governance to ensure the safe and sound growth of our Credit Union and to protect the interests of our members and all other stakeholders.

PROFILE OF BOARD OF DIRECTORS

Mrs. Ricketts-Moore is the Managing Director of Sangster’s Book Stores Limited. She has over 28 years’ working experience in the field of internal auditing, accounting and business operations. Her expertise includes governance, audit, risk management and controls, strategic planning and execution. Mrs. Ricketts-Moore is a Chartered Accountant and holds a Master of Business Administration from the Manchester School of Business. She is also a Certified Information System Auditor (CISA) and a Certified Internal Auditor (CIA). At First Heritage Co-operative Credit Union Limited, she serves as Chairman of the Board of Directors and has been a Director since 2022. She previously volunteered in the capacity of Chairman of IT Steering Committee (2023-2024), Chairman of Audit & Risk Management Committee (2023-2024) and as Chairman and Secretary of the Supervisory Committee between 2016 and 2021. Presently, Mrs. Ricketts-Moore also serves as a member of the Board of Directors of FHC Investments Limited.

PROFILE OF BOARD OF DIRECTORS Mr. Jones currently holds the post of Deputy Financial Secretary in the Ministry of Finance and Public Service and is in charge of Strategic Human Resource Management. Mr. Jones is an accomplished Human Resource Practitioner with over thirty-five years’ of experience in the field of Industrial Relations and Employment Management. He is a graduate of the University of the West Indies, City & Guild Institute of London, and a certified Change Management Specialist. Mr. Jones is the former President of the Jamaica Civil Service Association (JCSA) and General Secretary of the Jamaica Confederation of Trade Unions (JCTU). At the regional and international levels, he held the presidency of the Caribbean Public Services Association and sat on the Executive Board of Public Services International as representative of the InterAmericas Region. He is also the recipient of an Oder of Distinction by the Jamaican Government.

Mr. Ranger is a Chartered Accountant, a member of the Association of Chartered Certified Accountants (ACCA) in the United Kingdom and a member of the Institute of Chartered Accountants of Jamaica (ICAJ). He has over fifteen years’ of experience in external and internal auditing, accounting and business operations. Mr. Ranger has worked with PricewaterhouseCoopers, Boldeck Jamaica Limited and the Neal and Massy Group, specializing in audit and assurance, accounting and income tax services. He is presently the Principal of Ranger and Associates, a local audit and accounting firm and he previously served as a volunteer in the capacity of a member of the Credit Committee.

PROFILE OF BOARD OF DIRECTORS Ms. Walsh is currently the Executive Director of the Students’ Loan Bureau. She is a qualified Accountant, a Fellow with the Institute of Chartered Accountants of Jamaica and a member of The Association of Chartered Certified Accountants (ACCA). Ms. Walsh possesses over 15 years of accounting and finance experience and has performed assignments within various government sectors. Her expertise includes accounting, finance, management consulting, human resource management, strategic planning and leadership.

Mr. Forbes is currently employed to Look Beyond Limited as a Financial Controller. He previously served as Financial Manager at Cable & Wireless Limited, Financial Controller at Allied Insurance Brokers Limited, and has worked in various management capacities within the Grace Kennedy Company Limited as well as Ernst & Young Caribbean. He holds a Master of Business Administration in Finance from the Manchester Business School, United Kingdom, is a Fellow of the Association of Chartered Certified Accountants as well as a member of the Institute of Chartered Accountants of Jamaica.

PROFILE OF BOARD OF DIRECTORS Mrs. Freckleton-Cousins is a legal practitioner with over a decade of experience as an Attorney-at-Law. She is the Head of Legal & Insurance, and Company Secretary at Kingston Freeport Terminal Limited and possesses a wealth of knowledge in corporate and commercial law. Mrs. FreckletonCousins previously held the position of Corporate Secretary/ Legal Counsel at First Heritage Co-operative Credit Union Limited. She is the holder of a Bachelor of Law Degree, Legal Education Certificate and a Masters in Corporate and Commercial Law.

Ms. Nicole Adamson is the Chief Executive Officer of the Environmental Foundation of Jamaica, where she leads efforts to advance environmental sustainability and community development by providing grants to NGOs, CBOs and CSOs across the island. She brings over 20 years of experience in leadership, strategy, and governance, with a strong track record of guiding organisations through change and building sustainable, impact-driven initiatives. With a background spanning finance, ESG, and strategic planning, Nicole is particularly focused on strengthening partnerships, driving innovation, and positioning organisations for long-term resilience in a rapidly evolving landscape. She is a Chartered Financial Analyst (CFA), Financial Risk Manager (FRM), and Certified ScrumMaster (CSM), and is passionate about applying agile thinking and collaborative approaches to solve complex development challenges.

PROFILE OF BOARD OF DIRECTORS Mrs. Stephens-Hall is the possesses over 20 years of experience in Audit and Accounting that spans over multiple and jurisdiction in the Caribbean and North America. She is currently employed as the Group Financial Controller of the RJR Gleaner Group Limited. She has previously held the position of Chairman of the Supervisory Committee of First Heritage Co-operative Credit Union Limited and is currently Chairman of the Audit and Risk Committee. She previously served as the Chief Financial Officer for the Progressive Grocers Group and Financial Controller at Massy Technologies InfoCom Jamaica Limited. Her expertise lies in continuous improvement and solution-oriented thinking, making her a strategic thinker with a strong background in accounting and auditing. Throughout her career, Karla has held various leadership positions in Internal Audit, Business Assurance and Risk, External Audit, Operations, and Accounting at local and regional levels. Mrs. Stephens-Hall holds a Bachelor of Science in Accounting and Economics, Master of Business Administration in Accounts from the University of East London, is a Fellow of the Association of Chartered Certified Accountants as well as a member of the Institute of Internal Auditors and the Institute of Certified Rish Managers.

Mr. Nooks is a technology strategist with over 30 years of experience in governance-focused leadership across cybersecurity, digital forensics, and data privacy. He has played a pivotal role in strengthening Jamaica’s information security landscape, advising organizations in the financial, manufacturing, telecommunications, and public sectors. His expertise spans system security architecture, risk management, and regulatory compliance, underpinned by formal governance training and industry certifications. Andrew has led independent security practices and contributed to national cybersecurity and data protection initiatives. He served on the boards of eGov Jamaica Limited and the Jamaica Data Protection Oversight Committee. His ability to align complex technical strategies with business priorities makes him well-suited for leadership roles driving digital transformation.

BOARD OF DIRECTORS’ REPORT The Board of Directors is pleased to report that First Heritage Co-operative Credit Union Limited (FHCCU) delivered another year of strong performance during the 2025 financial year, despite operating within a persistently challenging and uncertain global and local macroeconomic environment. The year was characterized by heightened geopolitical tensions, including the continued conflict between Russia and Ukraine and growing instability within the Middle East, both of which contributed to volatility across international markets, elevated inflationary pressures, supply chain disruptions, and increased costs of living. Locally, Jamaica also faced the devastating effects of Hurricane Melissa, which saw FHCCU feeling the impact personally with our Montego Bay Branch operations being affected by the disaster. Collectively, these conditions continued to impact consumer spending patterns, operational expenses, and borrowing behaviours. Nevertheless, through prudent governance, disciplined financial management, strategic agility, and the unwavering commitment of our Management Team and Team Members, the organisation remained resilient and well-positioned, continuing to deliver value to our members while advancing its long-term strategic objectives. Against this backdrop, the organisation achieved commendable results across several key areas of operation, reinforcing the strength of the FHC brand, the confidence of our Membership, and the effectiveness of our strategic direction. As we reflect on the performance of the past financial year, the Board of Directors remains confident in the organisation’s capacity to navigate evolving market conditions while continuing to build a modern, resilient, and future-ready institution for the benefit of our members and stakeholders. FINANCIAL PERFORMANCE The Credit Union recorded another year of solid financial performance, reflecting the resilience of the organisation and the effectiveness of its strategic and operational initiatives. Despite prevailing economic pressures, the organisation continued to demonstrate strength across its core business lines, supported by prudent risk management practices, disciplined expense management, and sustained member confidence. For the financial year ending 2025, the audited financial statements reflected two significant prior-year adjustments relating to the Credit Union and its subsidiary. These adjustments will be addressed in greater detail as we progress through the Treasurer’s Report.

BOARD OF DIRECTORS’ REPORT

Notwithstanding these adjustments the consolidated Net Surplus grew to $339.20 Million in 2025 compared to $313.40 Million the previous financial year. Specifically, the Credit Union delivered record results, with a surplus of $394.24 million, compared to the prior years’ restated surplus of $84.34 Million1. Total assets grew by 10.74% to $22.30 billion, supported by the loan portfolio, which remained a key contributor to performance, and continued deposit growth, reflecting members’ confidence in the organisation. Additionally, the capital adequacy ratios continued to exceed the regulatory requirement, underscoring the strength and resilience of the institution to absorb adverse financial events. STRATEGIC VISION The organisation continued to advance its strategic priorities under its 5-year Strategic Roadmap, which is centered on transforming the Credit Union into a more agile, digitally enabled, membercentric organisation. Recognizing the evolving expectations of our members and prospects, and the increasingly digital nature of financial services, the organisation remained focused on accelerating its digital transformation journey to enhance accessibility, convenience, operational efficiency, and service delivery. The Board and Management continued to advance several strategic initiatives designed to modernize the organisation’s infrastructure, strengthen service channels, improve operational efficiencies, and deepen member engagement. These initiatives are intended to position the organisation for long-term sustainability and competitiveness while ensuring that members can seamlessly access financial services through secure, convenient, and innovative solutions. As the organisation progresses toward the fulfilment of its 2040 Vision, the Board remains committed to supporting investments and initiatives that will strengthen the Credit Union’s technological capabilities, operational resilience, and overall value proposition to its members. FHC INVESTMENTS LIMITED FHC Investments Limited (FHCIL), continued to operate within a highly challenging investment climate throughout the 2025 financial year. During the period, the subsidiary recorded losses of $53.98 Million compared to a loss of $40.93 Million in the prior financial year.

Restated from $354.35 Million; see note 34 of the Financials

BOARD OF DIRECTORS’ REPORT

The performance of the subsidiary was significantly impacted by prevailing market conditions, including investment market volatility, elevated interest rate pressures, global economic uncertainty, and wider environmental and geopolitical influences that affected investor confidence and overall market activity. Despite these challenges, Management continued to focus on maintaining operational stability, strengthening client relationships, and positioning the subsidiary for long-term recovery and growth. The FHC Retirement Scheme continued to demonstrate steady and encouraging growth during the financial year under review. Despite the broader economic challenges experienced throughout the year, the Scheme maintained stable performance, supported by prudent fund management practices, consistent member participation, and disciplined oversight. Considering the sustained challenges faced by the subsidiary in achieving profitability, the Board of Directors and Management have been actively pursuing restructuring and partnership opportunities to strengthen and improve FHCIL performance and position the organization for growth. Such pursuits will continue into 2026 and supports an overall improvement in the Credit Union’s performance. FHC FOUNDATION The FHC Foundation continued to play an important role in advancing the organisation’s commitment to social responsibility, youth development, education, and community empowerment throughout 2025. During the year, the Foundation provided educational support through our annual scholarships and grants totaling $2.3 Million benefiting fifteen scholars across several scholarship awards. Support was provided through the Foundation’s flagship scholarship programmes, including the Primary Exit Profile (PEP) Scholarship, the Oswald Thorbourne Scholarship, the Renald Mason Scholarship, and the FHC Sports Education Scholarship. Also supported was the FHC Micro & Small Business Entrepreneur Awards, with three grants valuing $500,000 each being provided to three young entrepreneurs as seed funding for their businesses. Through these initiatives, the Foundation continued to support the educational and personal development of young Jamaicans while reinforcing the organisation’s commitment to nation-building. During the fourth quarter of the financial year, a comprehensive review and streamlining exercise was undertaken to strengthen the governance structure, strategic direction, and long-term impact of the Foundation. This process resulted in the development of a formal Terms of Reference and a structured Work Plan, both of which will guide the future activities, priorities, and operational focus of the Foundation. 43

BOARD OF DIRECTORS’ REPORT

Following the establishment of the Work Plan, the Foundation executed several impactful initiatives, including partnerships with the Jamaica Red Cross and the Credit Unions of Jamaica in support of Hurricane Melissa relief activities. Additionally, in December, the Foundation hosted its annual Children’s Treat at the Bethlehem Home in partnership with Blue Power Group, Foska Oats, Kremi Ice Cream, and the Kiwanis Club of Young Professionals, St. Andrew. These initiatives reflect the Foundation’s continued commitment to meaningful community engagement and social impact.

BOARD OF DIRECTORS’ REPORT

ORGANISATIONAL OUTLOOK Looking ahead, the Board of Directors remains optimistic about the future of the organisation and is confident in its ability to continue delivering sustainable growth and value to members. While economic uncertainty and market volatility are expected to persist, the organisation remains well-positioned to navigate these challenges through strong governance, prudent financial management, strategic investments, and continued operational discipline. Over the coming years, the organisation will continue accelerating its digital transformation journey with a focus on enhancing accessibility, improving service delivery, driving operational efficiencies, and strengthening the overall member experience. These initiatives are expected to support increased productivity, deeper member engagement, improved convenience, and stronger long-term organisational performance. The Board of Directors extends sincere appreciation to our members for their continued trust and confidence, to our Team Members for their dedication and commitment, and to the Management Team for their leadership and stewardship throughout the year. Together, we remain committed to building a stronger, more innovative, and future-ready organisation that continues to improve the financial wellbeing of our members and communities in which we operate.

………………………………........ Camelle Ricketts-Moore Chairman

Attendance at Board of Directors meetings Names

Position

Camelle Ricketts-Moore

Chairman

Wayne Jones

Attended

Excused

Absent

1st Vice Chairman

Richard Ranger 2nd Vice Chairman Nickeisha Walsh Treasurer

Kevin Forbes

Asst. Treasurer

Carian Freckleton-Cousins

Secretary

Karla Stephens-Hall

Director

Andrew Nooks

Director

Nicole Adamson

Director

As at August 28, 2026

Scheduled

MANAGEMENT DISCUSSION & ANALYSIS The 2025 financial year was defined by resilience, strategic execution, and an unwavering commitment to sustainable growth as First Heritage Co-operative Credit Union Limited (FHC) advanced under the theme, “Play to Win”. More than a slogan, the theme embodied our organisation’s deliberate focus on bold decision-making, disciplined performance, innovation, and a winning mindset across every area of our operations. Amid continued global economic uncertainty, inflationary pressures, evolving market conditions, and increasing competitive demands within the financial services sector, Jamaica also faced significant disruption from the passage of Hurricane Melissa, which affected communities, businesses, and livelihoods across the island. The organisation was not immune to these challenges, particularly within our Montego Bay branch operations, which experienced substantial physical damage resulting in operational disruptions and recovery pressures in the aftermath of the storm. However, through the resilience of our team, the loyalty of our members, and the strength of our business continuity and recovery efforts, the branch steadily regained momentum and began demonstrating measurable improvements in performance and its contribution to the wider organisation’s success. Guided by our strategic vision and member-centric philosophy, we continued to accelerate our digital transformation journey, enhance service delivery, deepen member engagement, and pursue strategic opportunities designed to position the organisation for long-term success and sustainability. FINANCIAL PERFORMANCE Despite the prevailing economic challenges experienced throughout the year, the Credit Union delivered a strong financial performance in 2025, underscoring the effectiveness of our strategic direction and operational resilience. During the prior year (2024), our Net Surplus was restated to include the full impairment of our subsidiary valued at $270 Million due in part to continuous protracted losses. Additionally, our goodwill valuation of $189 Million in relation to the acquisition of St. Thomas Cooperative Credit Union was removed1. Notwithstanding this, for the 2025 financial year FHC Credit Union achieved a record Net Surplus before honourarium and donations of $408.07 Million, demonstrating prudent financial management, disciplined execution, and our organisation’s continued ability to generate value while investing in strategic initiatives aimed at strengthening our growth and member experience objectives. The organisation recorded deposit growth of $1.78 Billion or 10.83% relative to $1.24 Billion or 8.12% the previous year. Total loan disbursements were $5.80 Billion reflecting continued member confidence.

Reference note 34 of the Financial Statements

MANAGEMENT DISCUSSION & ANALYSIS

STRATEGIC PRIORITIES During the year under review, FHC remained firmly focused on advancing the strategic priorities outlined within our five-year strategic roadmap. Central to these priorities was the acceleration of the organisation’s digital transformation journey, which is intended to fundamentally enhance how members access services, engage with the organisation, and experience the FHC brand. Throughout 2025, significant progress was made toward the onboarding and phased implementation of several strategic initiatives designed to modernize operations, improve efficiency, strengthen digital capabilities, and support a seamless and integrated member experience. Concurrently, the Credit Union undertook deliberate efforts to streamline and optimize key operational areas, ensuring that the necessary internal structures, systems, governance frameworks, and workflows are appropriately aligned to support the successful execution and long-term sustainability of these transformational initiatives. These strategic investments have positioned the organisation to remain agile, competitive, and member-focused while laying the foundation for accelerated growth and innovation over the next five years. MEMBER EXPERIENCE & ENGAGEMENT “Resilient, Refocused and Acceleration” aptly defines the Retail Network’s journey throughout 2025. The year required agility, disciplined execution, and renewed strategic alignment as the organisation intensified its focus on balancing the loan and deposit portfolios, while strengthening member acquisition and operational efficiency. Operating within a competitive financial landscape, with evolving member expectations, the Network demonstrated resilience and momentum, closing 2025 with strong loan portfolio growth, expanded membership, improved operational coordination, and deeper market penetration. Overall, the team remained steadfast in driving performance outcomes and achieved 99% of its loan target for 2025.

MANAGEMENT DISCUSSION & ANALYSIS

New funds mobilization remained a strategic focus, with monthly inflows ranging between approximately $93 Million and $191 Million during peak months. Running parallel to this, we intentionally took steps to bolster deposit growth through structured recognition and reward initiatives for the Retail Team as of mid-2025. This was further amplified through: • • • • •

Structured membership drives FIP enrolment campaigns Dormant and inactive account reactivation initiatives Incentive-based recognition programs; and Increased branch accountability for deposit conversion

Dormant and inactive account reactivation initiatives yielded substantive results throughout the year, with hundreds of accounts reactivated and significant funds returned to the deposit base. The final quarter reflected improved alignment between membership acquisition and deposit inflows, laying a stronger liquidity foundation heading into 2026. Membership growth remained a central pillar of the retail strategy in 2025. The organisation generated strong new membership inflows throughout the year, with sustained prospecting activities across branches including: • • • • •

Corporate site visits Youth engagement Church and community outreach Plaza invasions and expos Partnership-driven recruitment initiatives

Of note, approximately 54% of new membership gained for 2025 fell within the targeted 24 to 40 age group, aligning with our strategic objective of growing the ’under 40’ segment of our member base. Youth saver initiatives across branches helped to energize acquisition efforts, particularly during mid-year to final quarter. By year-end, FHC recorded strong growth in new membership, reinforcing the long-term sustainability of both the loan and deposit portfolios. As the organisation looks to advance into 2026, the collective effort of our teams continues to position our organisation for sustainable growth while maintaining a steadfast commitment to our member-atthe-centre philosophy. 55

MANAGEMENT DISCUSSION & ANALYSIS

Member Engagement Activities Recognizing that our members remain at the heart of everything we do, we continued throughout the financial year to strengthen meaningful engagement across our membership base through a range of initiatives designed to educate, empower, and connect. The Credit Union remained intentional in fostering deeper relationships with our members through financial education programmes, community outreach activities, digital engagement, promotional campaigns, and member appreciation initiatives, all aimed at enhancing the overall member experience and reinforcing our commitment to delivering value beyond financial services. These initiatives included: FHC Investments Client Mingle In January, our subsidiary, FHC Investments hosted a Client Mingle dubbed ‘Cocktails & Conversations’, an exclusive engagement initiative designed to strengthen relationships with existing and prospective clients while reinforcing the company’s boutique, client-centric approach to wealth management and financial advisory services. The event provided an opportunity for meaningful interaction between clients, leadership, and team members in an intimate setting at the Terra Nova All-Suites Hotel, fostering open dialogue around market trends, investment opportunities, financial planning, and the evolving needs of investors. Importantly, we also launched our refreshed logos for FHC Investments and the Pension Gold Retirement Scheme allowing us to enhance brand visibility and reaffirm the organization’s commitment to delivering personalized financial solutions that support clients in Building Solid Legacies. Mother’s Day & Father’s Day Celebrations We joined in celebrating some of our cherished members on both Mother’s Day and Father’s Day, across our branches and via our social media platforms. This included light festivities within the branch such as finger food and tokens, along with giveaways, reinforcing the Movement-wide theme of family and a sense of belonging. FHC Junior Credit Union Programme In the third quarter of 2025, Junior Achievement Jamaica and First Heritage Co-Operative Credit Union Limited jointly launched the FHC Junior Credit Union Programme, a transformative financial literacy and youth empowerment initiative aimed at fostering sound financial habits among Jamaica’s youth. The programme was developed to provide students with practical exposure to savings, budgeting,

MANAGEMENT DISCUSSION & ANALYSIS

entrepreneurship, leadership, and cooperative principles through interactive learning experiences within the school environment. By integrating financial education with real-world application, the initiative seeks to cultivate a generation of financially aware and responsible young people who are better equipped to make informed economic decisions. The programme represents a significant investment in youth development and community empowerment and will continue to expand throughout 2026 as part of the organization’s broader commitment to financial education and nation-building. Civil Servants of the Year Awards Our commitment to the members of the civil service remained in focus, with FHC continuing our legacy of being the proud title sponsor of the 2025 FHC Civil Servants of The Year Awards. In light of the passage of Hurricane Melissa and its devastating effects, we, in collaboration with the Civil Service Week Committee opted to modify our approach to the Civil Service Awards this year, by recognizing all fourteen shortlisted Civil Servants, as opposed to undergoing our usual evaluation interviews and selection of three winners. All shortlisted Civil Servants were presented with their gift package during the National Civil Service Week Church Service and celebrations with a view to undertaking a collective corporate social responsibility initiative in early 2026. The shortlisted candidates across the three categories were: NAME

CATEGORY

DEPARTMENT

Mr. Keron Broderick

Technical Support Category

Jamaica Constabulary Force

Mrs. Tania Green-Jackson

Technical Support Category

Jamaica Constabulary Force

Mr. Raymond Goffe

Technical Support Category

Ministry of Finance and the Public Service

Ms. Kay-Jay Johnson

Mid-Managerial

Ministry of Health & Wellness

Mrs. Simone Cooper-Bernard

Mid-Managerial

Ministry of Health & Wellness

Mrs. Stacy Ann Pennant Reid

Mid-Managerial

Ministry of Health & Wellness

Mr. Neil A. Davis

Mid-Managerial

Jamaica Fire Brigade

Mr. Andre Jerome Roy Palmer

Mid-Managerial

Jamaica Information Service

Mrs. Nadine Griffiths-Thompson

Mid-Managerial

Ministry of Health & Wellness

MANAGEMENT DISCUSSION & ANALYSIS

Mrs. Camille Waite-Kerr

Managerial

Ministry of Health & Wellness

Mrs. Karlene Taylor McKenzie

Managerial

Ministry of Health & Wellness

Mr. Patrick Ferguson, JP

Managerial

Ministry of Economic Growth and Job Creation

Mrs. Nicole Patrick-Shaw

Managerial

Institute of Jamaica

Mr. Franklyn White

Managerial

Ministry of Health & Wellness

MANAGEMENT DISCUSSION & ANALYSIS

Credit Union Week Credit Union Week, which was celebrated from October 19 to 25, saw FHC’s members being celebrated across our branches, through the provision of branded FHC tokens and refreshments in branch throughout the week. The festivities also included members being treated to a mix of branded goodies and prizes, music and health checks. Coupled with this, the Credit Unions of Jamaica hosted yet another successful staging of the ‘Praise in the Park’ concert on International Credit Union Day, October 20, free of cost to all members of the credit union movement, and the public.

Products, Services and Promotions With our Member At The Centre mantra remaining squarely in focus, we supported our members through several member experience optimization initiatives; as well as providing special offerings throughout the year, carefully curated to meet their needs. These offerings included a blend of sales, promotional and special offers as follows: Mobile Banking App Our commitment to enhancing convenience and accessibility was demonstrated through the launch of the FHC Mobile App in May 2025. The platform provides members with secure, anytime access to essential banking services, empowering them to manage their finances with greater ease while supporting our broader objective of delivering a seamless digital banking experience. In 2026 it is our intention

MANAGEMENT DISCUSSION & ANALYSIS

to onboard additional value-added services to make the Mobile App experience more fulsome and to enhance its self-service capabilities. Website Refresh In 2025, we embarked on a comprehensive redesign of our corporate website as part of our ongoing digital transformation strategy. The initiative is focused on delivering a more intuitive, accessible and member-centric online experience, with enhanced functionality, streamlined navigation and improved access to our products, services and financial education resources. The project, scheduled for completion in 2026, represents another important step in strengthening our digital engagement with members. Product Rationalisation During the reporting period, we also commenced a comprehensive product rationalisation exercise aimed at simplifying and strengthening our suite of loans, savings and deposit products. By streamlining our product portfolio, we are creating a more efficient offering that provides members with clearer choices aligned to their financial goals while improving operational effectiveness and positioning the Credit Union for sustainable long-term growth. Expo Jamaica 2025 During the second quarter of 2025, Expo Jamaica provided the organisation with a valuable opportunity to engage directly with members, prospective members, entrepreneurs, and key stakeholders within the business community. Through our participation, the Credit Union showcased its suite of financial products and services tailored to support personal financial growth, entrepreneurship, and business development. The event facilitated meaningful conversations around access to financing, savings and investment solutions. Participation in Expo Jamaica 2025 further reinforced our organization’s commitment to national development and strategic partnerships while expanding awareness of the FHC brand among a diverse cross-section of local audiences. ‘Future Funded’ Promotion Our Future Funded promotion saw FHC extending special loan and deposit offerings to our members from August through to December to support their dreams of home renovation, higher education, or a taking a dream vacation among other goals. Our deposit offer encouraged members to take advantage of our special rate of 4.75% on our Golden Harvest product, and the ability to borrow up to $5 Million dollars through our Easi Pay loan; with a preferred rate offered to members of the public sector.

MANAGEMENT DISCUSSION & ANALYSIS

PEOPLE AND CULTURE Blast Off 2025 – ‘Play to Win’ We launched our team member initiatives for the year with our "Blast Off 2025" event, setting a highenergy tone under the theme "Play to Win." Division Heads outlined their strategies for success, focusing on innovation, collaboration and bold execution. The Guest Speaker inspired a culture of high performance, while NGAGE’s games and activities kept the team members actively engaged, allowing them to have fun while reinforcing the strategies and key messages being relayed to the team. The event also celebrated 2024 achievements, recognizing top performers and honouring team members who assisted our Information Technology Team with computer restoration following the Cyber incident. Learning & Development We continue to foster a culture of continuous learning and growth for our team members. The following training and development activities were undertaken for team members: Regulatory & Compliance To ensure that our team members comply with the relevant regulations and industry best practices, they completed mandatory training activities, specifically covering the Proceeds of Crime Act, Counter Financing of Terrorism, Data Protection, and Fraud Prevention. Professional Development Courses During the year, our team members completed over one thousand eight hundred (1,800) courses on our E-Learning Platform, which accounted for 2,347 hours of training. Digital Transformation Initiatives As part of our ongoing digital transformation strategy, we successfully deployed our first Leave Management System during the year, on the HR ODOO platform. This enables team members to make requests for leave and get approvals electronically, as we move away from manual processes to improve efficiency and our team members' experience.

MANAGEMENT DISCUSSION & ANALYSIS

Internship Programmes We continue to encourage and support the younger generation in unlocking their true potential through partnerships with HEART/NSTA Trust and the Ministry of Labour on their internship programmes. The programme also extends to students from secondary and tertiary institutions who wish to complete their community service or work experience requirements. Team Welfare and Engagement Activities Throughout the year, we maintained a consistent focus on team building and personal well-being. This was achieved through recurring initiatives such as The Wellness Programme, which was a key pillar of engagement, featuring weekly "Wellness Wednesdays" with varied health challenges to support physical, mental, and emotional health. Several Theme Days were also held in commemoration of Black History Month, Jamaica’s Independence, Breast Cancer Awareness, and the festive season, among others. The FHC Sports Club supported us in hosting several social engagements throughout the year, such as Sports Day, Quarterly Lymes, Mother’s and Father’s Day Treats, and our annual end of year party. We ended the year successfully through the hard work and efforts of our valued team members, whose relentless drive to thrive and achieve high performance materialized. We express our deepest gratitude to our team members for their commitment and resilience, as we look forward to even greater achievements during the next year. FHC INVESTMENTS LIMITED In 2025, Jamaica’s economy recorded moderate expansion in the first three quarters of the year, supported by growth in construction, tourism and agriculture, alongside continued strength in the labour market. However, severe weather conditions resulting from Hurricane Melissa in the latter part of the year led to contractions in the final quarter, tempering full-year performance. Despite these shocks, macroeconomic fundamentals remained relatively stable. Inflation pressures were managed within policy targets, unemployment remained near historic lows, and the financial sector continued to operate within a disciplined regulatory framework. Market volatility in fixed income and foreign exchange markets created both valuation pressures and tactical trading opportunities.

MANAGEMENT DISCUSSION & ANALYSIS

Against this backdrop, FHC Investments Limited (FHCIL) focused on operational stabilization and structural correction following the disruptions experienced in 2024. For the year ended December 31, 2025, FHCIL recorded total revenue of $77.52 Million a reduction against $85.06 Million in 2024; total expenses of $132.33 Million, and a Net Loss after tax of $53.98 Million against losses of $40.93 Million in the previous year. Revenue remained predominantly non-interest in nature, with $69.80 Million (89%) derived from fees, trading income, foreign exchange gains and other income streams. Interest income totaled $7.72 Million, with a higher contribution from foreign currency investments, reflecting improved treasury allocation. Other key contributors included service charges and commissions of $3.29 Million, trading profits on debt securities of $4.56 Million, foreign exchange gains of $4.68 Million, and Management Fees of $57.33 Million. Equity trading losses were negligible at $0.06 Million, evidencing tighter risk management. The principal driver of the losses was structural cost expansion in the first half of the year. To accelerate revenue growth, FHCIL expanded its sales capacity by hiring three additional sales staff. However, anticipated sales inflows did not materialize at the required pace, causing fixed costs to increase ahead of revenue realization, resulting in a structurally imbalanced cost base during quarters 1 and 2 of 2025. Staff expenses totaled $88.25 Million for the year and Total Operating Expenses reached $132.33 Million, exceeding revenue by a significant margin. These results reinforced the fact that sustainable recovery for FHCIL required structural realignment of the cost base, revenue model and operating framework. Therefore, Management implemented decisive corrective measures in the second half of 2025. These actions included rightsizing sales-related costs, tightening discretionary expenditure, strengthening cost controls, and aligning staffing levels with revenue productivity. The focus shifted toward higher-margin, fee-based activities and disciplined expense governance. As a result of these changes, losses trended downward through quarter three, and notably FHCIL generated operating profits in two separate months during the second half of the year. During 2025, treasury positioning also improved, contributing to foreign exchange gains and enhanced portfolio yield. Equity exposure was tightly managed, reducing volatility-driven losses. Governance, compliance and operational controls were reinforced. The entity maintained a conservative balance sheet, with no borrowings, no repo liabilities and no interest expense, preserving financial resilience.

MANAGEMENT DISCUSSION & ANALYSIS

FHCIL concluded 2025 leaner, more disciplined and strategically aligned. The organisation is now positioned to transition from restructuring toward sustained earnings recovery. In 2026, Management will continue to apply a disciplined approach to restructuring the business model. The strategic focus will be on actively exploring opportunities to acquire a private equity partner that can provide wellneeded capital input into the business, to support its recovery, and realign FHCIL towards a growth path. Coupled with this, we will seek to strengthen recurring revenue streams, particularly advisory fees, portfolio management fees, and structured treasury income to improve earnings visibility, cash flow stability, and operating leverage. OUR STRONG RISK MANAGEMENT CULTURE Loan Risk and Credit Administration The Gross Loan Portfolio witnessed a 5.86% increase year over year from $15.83 Billion in 2024 to $16.76 Billion in 2025. The increase was mainly driven by the continued high demand for unsecured credit and motor vehicle loans, together with the active promotion of our real estate secured facilities. The increasing secured segment has contributed to the improved resilience of the overall loan portfolio to withstand economic shocks. The Past Due Rate showed a nominal increase to 7.40% compared to 7.29% in 2024. In the coming financial year greater emphasis will be placed on delinquency management from loan origination through to collections in an effort to drive marked reduction in the delinquency rate. Enterprise Risk Management Effective risk management remains a cornerstone of FHC’s ability to achieve its mission and realize its long-term vision. We are committed to fostering a strong risk management culture founded on prudence, sound governance, and disciplined decision-making. Through a robust Enterprise Risk Management framework, supported by rigorous policies, standards, and oversight, we proactively identify, assess, monitor, and manage risks while safeguarding the interests of our members and ensuring the continued resilience and sustainability of the organization. The following objectives underpin our Enterprise Risk Management approach: 1. Oversight: To identify, manage, and monitor all critical risks using a comprehensive approach aligned with the Board-approved risk appetite. 2. Accountability: To designate responsibility for risk ownership to the Management Team, who are tasked with identifying, assessing, mitigating, and reporting risk exposures. 64

MANAGEMENT DISCUSSION & ANALYSIS

3. Assurance: To provide reasonable assurance to the Board, Management Team, Members, and Stakeholders that risks are being effectively managed within established parameters, ultimately delivering value to the Credit Union. FHC continues to manage the primary risks associated with our operations: Strategic, Credit, Compliance, Operational, and Financial. Responsibility for each risk area is clearly assigned to the relevant Head of Department. Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) As an organisation we ensure that our team has a thorough understanding of the anti-money laundering and counter financing of terrorism requirements. This is further supported through ongoing training and development, to ensure member due diligence and reporting of transactions that are suspected to involve illicit assets or terrorist activities. Business Continuity Plan Our disaster recovery management efforts remain on-going. A Business Continuity Plan (BCP) has been established for adoption in the event of any significant interruptions to buildings, facilities, systems or employees the Credit Union has designed modalities and approaches to efficiently restore the business operations to pre-disaster levels. Foreign Account Tax Compliance Act (FATCA) Our subsidiary, FHC Investments Limited (FHCIL), continued to be compliant with its reporting obligations under FATCA. Common Reporting Standard (CRS) The Credit Union and our subsidiary, FHCIL, remained compliant with the Common Reporting Standard (CRS) in keeping with regulatory requirements. Data Protection Act Our organization maintains vigilance and ongoing training and workshops to support our compliance with the Data Protection Act and ensures adherence to the policies and procedures that govern our operations.

MANAGEMENT DISCUSSION & ANALYSIS

OPERATIONAL EFFICIENCY Throughout 2025, First Heritage Co-operative Credit Union Limited remained deliberate in its focus on maintaining high levels of operational efficiency across its various business units, supporting departments, and service delivery channels. Recognizing the importance of agility, sustainability, and member responsiveness within an increasingly competitive financial environment, the organization continued to strengthen internal processes, optimise workflows, and align operational resources to support improved efficiency and performance outcomes. A key component of this effort involved the rationalisation of the organization’s product portfolio to create a more targeted, streamlined, and relevant suite of solutions that more effectively responds to the evolving needs and expectations of members and prospective members alike. This strategic refinement is intended to improve operational focus, enhance the member experience, and support stronger long-term value creation. Additionally, the organisation’s five-year strategic roadmap places significant emphasis on further strengthening operational effectiveness through technology enablement, process modernisation, data-driven decision-making, and enhanced organisational integration. As FHC advances its digital transformation agenda, continued investments in operational infrastructure and strategic alignment will remain central to improving efficiency, supporting scalable growth, and positioning the organization to sustainably meet the demands of a rapidly evolving financial services landscape. During the year, the organisation also made the difficult but strategic decision to permanently close our Lawrence Tavern branch operations. While difficult, this action formed part of our organisation’s broader efforts to optimise operational efficiency and ensure the effective allocation of resources in support of long-term sustainability and growth.

OUTLOOK As FHC looks ahead, our Management Team remains optimistic about the organisation’s future and confident in its ability to navigate the evolving economic and competitive landscape. The 2025 financial year demonstrated our organisation’s resilience, adaptability, and capacity to execute strategically despite external challenges, including economic uncertainty and the impact of natural disasters. Building

MANAGEMENT DISCUSSION & ANALYSIS

on this foundation, our organisation will continue to prioritise the execution of our strategic roadmap, accelerate our digital transformation initiatives, strengthen operational efficiency, and deepen member engagement across all touchpoints. Management anticipates that the coming financial year will present both opportunities and challenges; however, the organisation remains well-positioned to capitalise on emerging opportunities through innovation, disciplined financial stewardship, and a continued commitment to delivering exceptional value to members. Focus will remain on enhancing the member experience, expanding digital capabilities, improving operational agility, and fostering sustainable growth across the organisation and its subsidiary. Guided by the spirit of “Play to Win”, our organisation enters the next financial year with renewed determination to strengthen our competitive position, empower our members, and continue building a resilient, modern, and future-ready financial institution.

I extend sincere gratitude to our Board of Directors, Volunteers, Management Team, and our dedicated team members, your contributions have been highly valuable and play a critical role in our success to date and the further successes we expect to materialise in the coming financial year and beyond. Our collective thanks and appreciation is also extended to our valued members for entrusting us to shape your financial journey and supporting us as we continue to evolve and grow together. Your confidence and loyalty inspire us to continually raise the standard of service, strengthen our Cooperative, and create lasting value for generations to come. Together, we look forward to embracing the opportunities ahead with confidence, resilience, and an unwavering commitment to building a stronger future for all.

…………………………………. Xavier D. Allen Chief Executive Officer

TREASURER’S REPORT OVERVIEW This Report reflects the performance of First Heritage Co-operative Credit Union Limited (FHCCU) for the year ended December 31, 2025. The audited Financial Statements in this Annual Report are for the Group, which comprises the Credit Union and its wholly owned subsidiary, FHC Investments Limited (FHCIL). SUMMARY OF FINANCIAL PERFORMANCE For the Credit Union total revenues of $2.86 Billion grew by $164.61 Million or 6.1% over the prior year’s total of $2.69 Billion. Despite a challenging year, FHCCU realized a surplus of $394.24 Million compared to a prior year restated surplus of $84.34 Million1. The subsidiary FHCIL, realized loss of $53.98 Million after taxes, as compared to the prior year’s loss of $40.93 Million. This year’s performance resulted in Accumulated Surplus of $103.90 Million at year end for the Credit Union. Our strategic shift in loan underwriting saw a reduction in loan disbursement within the financial year 2025 totaling $5.80 Billion relative to $6.12 Billion in 2024; a reduction of 9.6%. The past due rate on the Loan portfolio moved from 7.29% to 7.40% over the last financial year, primarily impacted by the effects of Hurricane Melissa towards the end of the year. While deposits and shares grew by $1.78 Billion or 10.83% relative to $1.24 Billion or 8.12% the previous year. The Credit Union’s total assets have increased by 10.74% compared to the previous year, reaching a high of $22.23 Billion representing an increase of $2.15 Billion over prior year’s $20.08 Billion, while the Group Total Assets increased to $22.55 Billion as compared to $20.36 Billion (2024) or a 10.76% increase. The Net Loan portfolio increased by 5.84% or $881.28 Million over the prior year (2024) moving from $15.07 Billion to $15.95 Billion. Consequently, Liquid Assets and Investments increased by $1.22 Billion (29.92%) to $5.29 Billion.

Restated from $354.35 Million; see note 34 of the Financials

TREASURER’S REPORT

The graph below indicates the Credit Union’s Deposits & Shares, Loans and Total Assets for the period 2021-2025.

Members’ Deposits and Voluntary Shares, which is our major source of funding continues to serve as the core of our financial soundness. This increased by $1.78 Billion or 10.83% from $16.49 Billion (2024) to $18.28 Billion (2025). OPERATING RESULTS The increased appetite for loans by our members and the reinvestment opportunities within our Investment portfolio created improved interest income throughout the year.

TREASURER’S REPORT

The Credit Union’s key results for the year 2025 were: • Interest Income of $2.64 Billion (2025) increased by $172.26 Million or 6.95% from $2.47 Billion (2024), this was primarily due to the increased earnings from our new loans portfolio and higher yields on re-invested funds. • Non-Interest Income of $214.58 Million (2025) reduced by $7.65 Million or 3.44% from $222.23 Million (2024). • Interest Expense increased to $365.62 Million (2025) from $331.09 Million (2024). This increase corresponds to the continued growth of our Deposit portfolio and significant take up of the Term Deposits which are our primary source of funding. The Credit Union continues to offer some of the most competitive interest rates available to our members on savings products. • Operating Expenses increased by $104.44 Million or 5.87%, from $1.77 Billion (2024) to $1.88 Billion (2025) however, our Operating Expenses to Average Asset ratio decreased to 8.9% from 9.10% in 2024. • Past Due loans (>30 days) as a percentage of our Gross Loan portfolio was 7.40% (2025) vs. 7.29% as at December 2024. • Provision for Loan Losses for the year, net of recoveries was $207.75 Million in 2024, relative to $226.22 Million in 2024. It was necessary to maintain our provisions as the economic circumstances of some of our membership remained dire, increasing the probability of loan default. The provisioning for loan losses continued to be adequate to cover potential losses. • Accumulated surplus available before distribution stands at $103.90 Million. The full impairment of our investment in our subsidiary of $270 Million restated in 2024 had a material impact on the available surplus in 2025. • Our goodwill valuation of $189 Million was adjusted and restated for 2024 following the acquisition of St. Thomas Co-operative Credit Union in 2015; this led to a reduction in our total assets at the beginning of 2025. However, our strong 2025 performance saw the asset rebounding at the end of the financial year by over $2 Billion.

TREASURER’S REPORT

The graphs below demonstrate the Credit Union’s Revenue and Net Surplus/Deficit performance for the last five years.

TREASURER’S REPORT

REGULATORY ENVIRONMENT FHCCU’s Regulatory Institutional Capital to Total Assets ratio stood at 11.93% as at December 31, 2025 (11.55% in 2024). This ratio, compared favourably to the minimum PEARLS Standard of 8.00%, and a 6.00% minimum requirement for the Bank of Jamaica. The Jamaica Co-operative Credit Union League Limited (JCCUL) continues to monitor the Credit Union’s performance against International Credit Union Industry financial benchmark standards, for safety and soundness (PEARLS). Our performance is also compared to other prudential standards by the BOJ. As a specified financial institution, the BOJ continues to have oversight of our activities by reviewing our financial reports and conducting periodic audits. It is anticipated that the BOJ will soon however assume direct supervision of Credit Unions and in preparation we continue to make the requisite procedural and policy reviews.

TREASURER’S REPORT

The table below outlines the Credit Union’s P.E.A.R.L.S. Ratio performance for the year ended December 31, 2025.

TREASURER’S REPORT

CONCLUSION Your Credit Union’s performance in 2025 is worthy of accolades, having had to manoeuvre and respond to economic challenges such as inflation, global supply chain disruptions, the introduction of new trade tariffs and the devastating impact of Hurricane Melissa, particularly in the central and western regions of Jamaica. Key prudential ratios such as the Capital and Liquidity positions remained adequate and above benchmark; ratios bolstering our ability to execute on our strategies, always with the ethos of putting our Members at the Centre. As always, the Credit Union’s success is dependent on the continued support of you, our members, our dedicated team members and our volunteers. Acknowledgements I would like to gratefully recognise the membership on behalf of the Board of Directors and Management, for their continued support of our Credit Union as we thrive. It has been an honour and privilege to serve you as Treasurer. We acknowledge the work of our Auditors, BDO, and their professional contribution to the audit process. Thanks to all our valued stakeholders especially our volunteers, managers and team members who unwaveringly applied themselves contributing to the Credit Union’s success, I thank you.

………………………. Nickeisha Walsh Treasurer

APPROPRIATION OF 2025 SURPLUS AND FIXING OF THE MAXIMUM LIABILITY Recommendation of the Board of Directors The Board of Directors of the Credit Union is making the following recommendation to the meeting with respect to the appropriation of the 2025 surplus. Surplus available for distribution Permanent Shares Dividend (6.00%) Other distribution and transfer: Honoraria Donations Special Donation (FHC Foundation) Retained Earnings Reserve Balance in Accumulated Surplus

$’000 103,906 ( 24,783) ( 11,827) ( 2,000) ( 3,000) ( 31,000) 31,296

The fixing of the Maximum Liability It is proposed that for 2026, the Maximum Liability be fixed at 20 times that of the Credit Union’s share capital.

…………....……………. Nickeisha Walsh Treasurer

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) FINANCIAL STATEMENTS 31 DECEMBER 2025

INDEX

Page Independent Auditors' Report to the Members

1-3

FINANCIAL STATEMENTS Consolidated Statement of Surplus or Deficit and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

6-7

Consolidated Statement of Cash Flows

Credit Union Statement of Surplus or Deficit and Other Comprehensive Income

Credit Union Statement of Financial Position

Credit Union Statement of Changes in Equity

11 - 12

Credit Union Statement of Cash Flows Notes to the Financial Statements

13 14 – 114

Page 4

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) CONSOLIDATED STATEMENT OF SURPLUS OR DEFICIT AND OTHER COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2025 Note

2025 $’000

2024 $’000

2,413,555 243,929

2,262,505 224,103

2,657,484

2,486,608

( 339,468) ( 8,730) ( 13,505) ( 3,918)

( 304,314) ( 11,833) ( 12,166) ( 2,778)

( 365,621)

( 331,091)

2,291,863 ( 597) ( 207,753)

2,155,517 2,558 ( 226,221)

2,083,513

1,931,854

245,287 3,858) 4,514 6,914 19,338

226,274 20,664 4,726 7,531 30,082

272,195

289,277

2,355,708

2,221,131 (1,894,752)

INTEREST INCOME (calculated using the effective interest method): Loans and advances Investments INTEREST EXPENSE: Members’ deposits External credits Members’ voluntary shares Lease liabilities

NET INTEREST INCOME Impairment (loss)/reversal on investments Loan impairment losses, net of recoveries

5 24(a)

16(c)

NET INTEREST INCOME AFTER IMPAIRMENT AND LOSSES ON LOANS AND INVESTMENTS NON-INTEREST INCOME: Fees and commission income Net (loss)/income from trading Cambio operations Dividend income Other income

(

NET INTEREST AND OTHER INCOME OPERATING EXPENSES

(2,002,681)

NET SURPLUS BEFORE HONORARIA AND DONATIONS Honoraria Donations

10(a) 10(b)

( (

NET SURPLUS BEFORE TAXATION Taxation

NET SURPLUS FOR THE YEAR OTHER COMPREHENSIVE INCOME (OCI): Items that will not be reclassified to surplus or deficit Remeasurement of employee benefits asset

326,379 9,920) 3,050)

( (

339,197 -

313,409 .

339,197

313,409

37,159

(

12,765)

(

112)

(

92)

(

12,390)

(

9,127)

Total other comprehensive income/(loss)

24,657

( 21,984)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

363,854

291,425

Net change in fair value of equity investment measured at fair value through OCI Item that may be reclassified to surplus or deficit Net change in fair value if investment securities measured at fair value through OCI, net of tax

20(g)

353,027 10,630) 3,200)

Balance at 31 December 2024

Transactions with owners and movement in reserves: Permanent shares dividend Issue of permanent shares Entrance fees 20% statutory reserve transfer Transfer to retained earnings reserve Transfer to loan loss reserve Transfer to employee benefits asset reserve

Total comprehensive income

Total other comprehensive income

778,832

73,731

32,204 388,389

2,861 70,870 -

32,204 -

705,101

705,101 -

736,970

200,000

200,000 -

536,970

536,970 -

641,579

831,521 (189,942)

24,467

1,538

1,538 -

22,929

22,929 -

2,570,237

307,473

33,742 2,861 70,870 200,000 -

2,262,764

2,452,706 ( 189,942)

Retained Business Capital earningsearin combinationcoand other and reserve reserve reserve Total $’000 $’000 $’000 $’000 (note 27(c)) (note 27(d)) (note 27(e))

INSTITUTIONAL CAPITAL

YEAR ENDED 31 DECEMBER 2025

185,858

817

185,041

185,041 -

Employee benefit asset reserve $’000 (note 28(a))

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Statutory reserve $’000 (note 27(b))

Surplus for the year

Other comprehensive income: Remeasurement of employee benefits asset Equity investment at FVOCI-net change in fair value Revaluation of FVOCI Investments, net of taxation

356,185

356,185 -

Permanent shares $’000 (note 27(a))

As restated

Balance at 31 December 2023: As previously reported Prior year adjustment (note 34)

39,165

39,165 -

Loan loss reserve $’000 (note 28(b))

92)

(5,725)

(9,219)

(9,127)

(

3,494

3,494 -

Investment reserve $’000 (note 28(c))

NON-INSTITUTIONAL CAPITAL

92)

219,298

39,982

39,165 817

( 9,219)

( 9,127)

(

188,535

188,535 -

Total $’000

295,889

(340,075)

( 29,223) ( 70,870) (200,000) ( 39,165) ( 817)

300,644

( 12,765)

313,409

335,320

335,320 -

Accumulated surplus $’000

(

3,085,424

7,380

29,223) 33,742 2,861 .

291,425

21,984)

9,127)

92)

12,765)

313,409

2,786,619

2,976,561 ( 189,942)

Total $’000

Page 6

Balance at 31 December 2025

Total comprehensive income

Total other comprehensive income

Balance at 31 December 2024 . Surplus for the year Other comprehensive income: Remeasurement of employee benefits asset Equity investment at FVOCI-net change in fair value Revaluation of FVOCI Investments, net of taxation -

860,593

81,761

51,367 439,756

2,913 78,848 -

51,367 -

778,832

Statutory reserve $’000 (note 28(b))

388,389

Permanent shares $’000 (note 28(a))

936,970

200,000

200,000 -

736,970

641,579

25,971

1,504

1,504 -

24,467

2,904,869

334,632

52,871 2,913 78,848 200,000 -

2,570,237

Retained Business Capital earningsearin combinationcoand other and reserve reserve reserve Total $’000 $’000 $’000 $’000 (note 28(c)) (note 28(d)) (note 28(e))

INSTITUTIONAL CAPITAL

YEAR ENDED 31 DECEMBER 2025

228,114

42,256

185,858

Employee benefit asset reserve $’000 (note 28(a))

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

97,317

58,152

58,152 -

39,165

112)

( 17,067)

( 11,342)

1,160 -

(12,502)

(12,390)

(

( 5,725)

Loan loss Investment reserve reserve $’000 $’000 (note 28(b)) (note 28(c))

112)

219,298

Total $’000

308,364

101,568

1,160 58,152 42,256

( 12,502)

( 12,390)

(

NON-INSTITUTIONAL CAPITAL

261,926

(410,319)

( 31,063) ( 78,848) (200,000) ( 58,152) ( 42,256)

376,356

37,159

339,197

295,889

Accumulated surplus $’000

Page 7

(

25,881

31,063) 52,871 2,913 1,160 .

363,854

24,657

12,390)

112)

3,475,159

(

37,159

339,197

3,085,424

Total $’000

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 8

CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net surplus for the year Adjustments for: Interest income Interest expense Depreciation and amortisation Impairment losses on loans to members Impairment reversal on investments Employee benefits asset Unrealised exchange gain Unrealised fair value losses/(gains) on FVTPL investments Operating cash flows before movements in working capital Changes in operating assets and liabilities Loan to members Other assets Employee benefits asset contributions Members’ deposits Members’ voluntary shares Other liabilities

2025 $’000

2024 $’000

339,197

313,409

(2,657,484) 365,621 69,061 207,753 597 14,306 ( 4,680) 3,858

(2,486,608) 331,091 81,484 226,221 ( 2,558) 4,678 ( 3,839) ( 20,664)

(1,661,770)

(1,556,786)

(1,079,855) ( 48,682) ( 19,403) 1,318,586 465,492 89,342

(1,775,769) ( 11,205) ( 18,260) 707,011 523,802 30,121

( 936,290) 2,636,643 ( 363,788)

( 2,101,086) 2,546,143 ( 323,077)

1,336,565

121,980

( 29,410) (1,155,527) 259,786 (1,685,243) 1,496,742 ( 575,937) 458,256

( 17,291) ( 702,035) 478,614 (2,247,734) 2,098,432 ( 235,748) 677,944

(1,231,332)

52,182

Note

17,18,19 15(c) 20(f) 78

20(c)

Interest received Interest paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant, equipment and intangibles Acquisition of resale agreements Proceeds from maturing resale agreements Liquid assets-acquisition Liquid assets-disposal Acquisition of financial investments Proceeds from sale/maturing of financial investments

17, 19

Net cash (used in)/provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Issues of permanent shares Dividends paid External credits-payment Entrance fees Lease payments

(

33,742 29,223) 73,184) 2,861 13,017)

(

26,683)

(

78,821)

( (

24(b)

Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year CASH AND CASH EQUIVALENTS AT END OF YEAR

(

52,872 31,059) 39,244) 2,915 12,167)

27(a)

12(b)

( (

78,550 281,639

95,341 186,298

360,189

281,639

Page 9

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) CREDIT UNION STATEMENT OF SURPLUS OR DEFICIT AND OTHER COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2025 Note INTEREST INCOME (calculated using the effective interest method): Loans and advances Investments INTEREST EXPENSE: Members’ deposits External credits Members’ voluntary shares Lease liabilities

NET INTEREST INCOME Impairment (loss)/reversal on investments Investment impairment - subsidiary Loan impairment reversal - subsidiary Loan impairment losses, net of recoveries

NET INTEREST INCOME AFTER IMPAIRMENT LOSSES ON LOANS AND INVESTMENTS NON-INTEREST INCOME: Fees and commission income Net (loss)/income from trading Cambio operations Dividend income Other income

2,262,505 214,997

2,649,768

2,477,502

( 339,468) ( 8,730) ( 13,505) ( 3,918)

( 304,314) ( 11,833) ( 12,166) ( 2,778)

( 365,621)

(

2,284,147 369) ( 207,753)

2,146,411 2,338 ( 270,000) 656 ( 226,221)

2,076,025

1,653,184

197,215 3,794) 4,514 6,914 9,734

179,363 13,043 4,726 7,531 17,570

214,583

222,233

2,290,608

1,875,417 (1,778,098)

(

NET INTEREST AND OTHER INCOME OPERATING EXPENSES

(1,882,538)

NET SURPLUS BEFORE HONORARIA AND DONATIONS Honoraria Donations

10(a) 10(b)

( (

408,070 10,630) 3,200)

331,091)

( (

394,240

NET SURPLUS FOR THE YEAR OTHER COMPREHENSIVE INCOME (OCI): Items that will not be reclassified to surplus or deficit Remeasurement of employee benefits asset

2024 $’000

2,413,555 236,213

( 15(c)

Restated

2025 $’000

84,349

37,159

(

12,765)

(

112)

(

92)

(

14,293)

(

10,930)

Total other comprehensive income/(loss)

22,754

(

23,787)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

416,994

20(g)

97,319 9,920) 3,050)

60,562

Balance at 31 December 2024, as restated

Total comprehensive income

Total other comprehensive income

As restated Other comprehensive income: Remeasurement of employee benefits asset Equity investment at FVOCI-net change in fair value Revaluation of FVOCI investments, net of taxation

As restated Surplus for the year As previously reported Prior year adjustment (note 34)

Balance at 31 December 2023: As previously reported Prior year adjustment (note 34)

778,832

73,731

32,204 388,389

2,861 70,870 -

32,204 -

705,101

705,101 -

Statutory reserve $’000 (note 27(b))

356,185

356,185 -

Permanent shares $’000 (note 27(a))

736,970

200,000

200,000 -

536,970

536,970 -

641,579

831,521 (189,942)

24,467

1,538

1,538 -

22,929

22,929 -

2,570,237

307,473

33,742 2,861 70,870 200,000 -

2,262,764

2,452,706 ( 189,942)

185,858

817

185,041

185,041 -

39,165

39,165 -

92)

4,742

(11,022)

(10,930)

(

15,764

15,764 -

Investment reserve $’000 (note 28(c))

NON-INSTITUTIONAL CAPITAL

Retained Business Capital Employee Loan earningseari ncombinationcobi and other and othernaton benefit asset loss reserve reserve reserve Total reserve reserve $’000 $’000 $’000 $’000 $’000 $’000 (note 27(c)) (note 27(d)) (note 27(e)) (note 28(a)) (note 28(b))

INSTITUTIONAL CAPITAL

YEAR ENDED 31 DECEMBER 2025

CREDIT UNION STATEMENT OF CHANGES IN EQUITY

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

92)

229,765

39,982

39,165 817

( 11,022)

( 10,930)

(

200,805

200,805 -

Total $’000

82,826

(340,075)

( 29,223) ( 70,870) (200,000) ( 39,165) ( 817)

71,584

( 12,765)

84,349

354,349 (270,000)

351,317

351,317 -

Accumulated surplus $’000

Page 11

(

7,380

29,223) 33,742 2,861 .

60,562

23,787)

10,930)

92)

12,765)

2,882,828

(

84,349

354,349 ( 270,000)

2,814,886

3,004,828 ( 189,942)

Total $’000

Balance at 31 December 2025

Total comprehensive income

Total other comprehensive income

Other comprehensive income: Remeasurement of employee benefits asset Equity investment at FVOCI-net change in fair value Revaluation of FVOCI investments, net of taxation

Surplus for the year

Balance at 31 December 2024, as restated

860,593

81,761

51,367 439,756

2,913 78,848 -

51,367 -

778,832

Statutory reserve $’000 (note 27(b))

388,389

Permanent shares $’000 (note 27(a))

936,970

200,000

200,000 -

736,970

641,579

25,971

1,504

1,504 -

24,467

2,904,869

334,632

52,871 2,913 78,848 200,000 -

2,570,237

Retained Business Capital earningsearin combinationcob iand other and othernaton reserve reserve reserve Total $’000 $’000 $’000 $’000 (note 27(c)) (note 27(d)) (note 27(e))

INSTITUTIONAL CAPITAL

YEAR ENDED 31 DECEMBER 2025

228,114

42,256

185,858

97,317

58,152

58,152 -

39,165

112)

( 9,663)

(14,405)

(14,293)

(

4,742

Investment reserve $’000 (note 28(c))

NON-INSTITUTIONAL CAPITAL

Employee Loan benefit asset loss reserve reserve $’000 $’000 (note 28(a)) (note 28(b))

CREDIT UNION STATEMENT OF CHANGES IN EQUITY

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

112)

315,768

100,408

58,152 42,256

( 14,405)

( 14,293)

(

229,765

Total $’000

103,906

(410,319)

( 31,063) ( 78,848) (200,000) ( 58,152) ( 42,256)

431,399

37,159

394,240

82,826

Accumulated surplus $’000

Page 12

(

3,324,543

24,721

31,063) 52,871 2,913 .

416,994

22,754

14,293)

112)

37,159

394,240

2,882,828

Total $’000

Page 13

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) CREDIT UNION STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2025 2025 $’000

Restated 2024 $’000

394,240

84,349

(2,649,768) 365,621 69,045 207,753 369 14,306 3,794

(2,477,502) 331,091 81,461 226,221 ( 656) ( 2,338) 270,000 4,678 ( 13,043)

Operating cash flows before movements in working capital

(1,594,640)

(1,495,739)

Changes in operating assets and liabilities Loan to members Employee benefits asset contributions Other assets Members’ deposits Members’ voluntary shares Other liabilities

(1,079,855) ( 19,403) ( 35,585) 1,318,586 465,492 45,991

(1,775,769) ( 18,260) ( 16,981) 707,011 523,802 ( 7,599)

( 899,414) 2,628,238 ( 363,788)

(2,083,535) 2,533,136 ( 322,568)

1,365,036

127,033

( 29,340) ( 981,368) 105,834 (1,685,243) 1,496,742 129,521 ( 50,000) ( 325,090)

( 17,199) ( 522,550) 314,700 (2,247,734) 2,098,432 416,459 ( 66,720)

Net cash used in investing activities

(1,338,944)

(

CASH FLOWS FROM FINANCING ACTIVITIES: Issue of permanent shares External credits - payment Dividends paid Entrance fees Lease payments

( (

Note

8 15(c)

20(f) 8

Interest received Interest paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment Acquisition of resale agreements Proceeds from of resale agreements Liquid assets -acquisition Liquid assets - disposal Acquisition of financial investments Acquisition of shares in subsidiary Proceeds from sale/maturing of financial investment

17,19

24,612)

(

52,872 54,098) 31,059) 2,915 12,167)

(

33,742 73,184) 29,223) 2,861 13,017)

Net cash used in financing activities

(

41,537)

(

78,821)

Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year

(

15,445) 185,501

23,600 161,901

170,056

185,501

CASH AND CASH EQUIVALENTS AT END OF YEAR

24(b)

12(b)

( (

Page 14

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 1.

STATUS AND PRINCIPAL ACTIVITIES: First Heritage Co-operative Credit Union Limited (“the Credit Union or Co-operative”) is registered under the Co-operative Societies Act (“the Act”) and is domiciled in Jamaica with registered office located at 8-10 Eureka Road, Kingston, Jamaica. The Credit Union was formed following the merger of Churches Co-operative Credit Union Limited (Churches) and GSB Co-operative Credit Union Limited (“GSB”), on 1 August 2012. Effective 1 March 2015, the credit union merged with St. Thomas Co-operative Credit Union Limited (“STCCU”). Membership in the credit union is obtained by the holding of members’ shares, which should be at least one voluntary share and one permanent share. Voluntary shares are deposits available for withdrawal on demand, while permanent shares are paid in cash, invested in risk capital and are transferrable only to another member. Individual membership may not exceed 20% of the total of the members’ shares of the credit union. The main activities of the credit union are to promote thrift amongst its members by affording them an opportunity to accumulate savings and to create for them a source of credit, for provident or productive purpose at reasonable rates of interest. The Co-operative Societies Act requires, amongst other provisions, that at least 20% of the net surplus made each year by the credit union be transferred to a reserve fund. Section 59 of the Act provides for the exemption from income tax and stamp duty for the credit union. The credit union is a member of the Jamaica Co-operative Credit Union League (“JCCUL” or “League”). The credit union’s operations are located in the parishes of Kingston, St. Andrew, Clarendon, St. Catherine, St. James, St. Thomas and Manchester. The credit union has a wholly-owned subsidiary, FHC Investments Limited, which is incorporated and domiciled in Jamaica. Its principal activities include investment management services. The credit union and its subsidiary are collectively referred to as “the group”.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 15

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES: The material accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented. Where necessary, prior year balances have been reclassified to conform to current year presentation. Amounts are rounded to the nearest thousand, unless otherwise stated. (a)

Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRS Accounting Standards). The financial statements are prepared on the historical cost basis, except for the inclusion of certain investments at fair value and employee benefits asset which is recognised as plan assets less the present value of the defined benefit obligation. They are also prepared in accordance with requirements of the Co-operative Societies Act. The preparation of financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. Although these estimates are based on managements’ knowledge of current events and actions, actual results could differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the financial statements are disclosed in note 3. New, revised and amended standards that became effective during the year Certain new standards, interpretations and amendments to existing standards have been published that became effective during the current financial year. The group has assessed the relevance of all such new standards, interpretations and amendments and has concluded that the following amendments are relevant to its operations: Amendments to IAS 21, ‘Effects of Changes in Foreign Exchange Rates’ – Lack of Exchangeability, (effective for accounting periods beginning on or after 1 January 2025). The amendments specify when a currency is exchangeable into another currency and when it is not as well as how an entity determines the exchange rate to apply when a currency is not exchangeable. A currency is exchangeable when there is an ability to obtain the other currency and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. The amendments also require the disclosure of additional information that would enable users of the financial statements of an entity to evaluate how a currency’s lack of exchangeability affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. There was no material impact on the group on adoption of these amendments.

There are no other new, revised or amended standards or interpretations that became effective during the year which are relevant to the group’s financial statements.

Page 16

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (a)

Basis of preparation (cont’d) New standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted At the date of authorization of these financial statements there are a number of standards, amendments to standards and interpretations which have been issued by the IASB that are effective in future accounting periods and which the group has not early adopted. Management considers that the following may be relevant to the group: Amendment to IFRS 9 and IFRS 7 – Classification and Measurement of Financial Instruments, (effective for accounting periods beginning on or after 1 January 2026). These amendments: -

Clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

Provide additional guidance on assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

Introduce new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance (ESG) targets); and

Update disclosure requirements for equity instruments designated at Fair Value through Other Comprehensive Income (FVOCI).

The group is assessing the impact the adoption of this amendment will have on its financial statements. Annual improvements to IFRS - Volume 11, (effective for accounting periods beginning on or after 1 January 2026). Annual improvements are limited to changes that either clarify the wording in an Accounting Standard or correct relatively minor unintended consequences, oversights or conflicts between the requirements in the Accounting Standards. The amendments are to the following standards: - - - - -

IFRS 1, First-time Adoption of International Financial Reporting Standards; IFRS 7, Financial Instruments: Disclosure and its accompanying Guidance on implementing IFRS 7; IFRS 9, Financial Instruments; IFRS 10, Consolidated Financial Statements; and IAS 7, Statement of Cash Flows

The amendments are not expected to have a material impact on the group’s financial statements.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 17

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (a)

Basis of preparation (cont’d) New standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted (cont’d) At the date of authorization of these financial statements there are a number of standards, amendments to standards and interpretations which have been issued by the IASB that are effective in future accounting periods and which the credit union has not early adopted. Management considers that the following may be relevant to the group (cont’d): IFRS 18, ‘Presentation and Disclosures in Financial Statements’, (effective for accounting periods beginning on or after 1 January 2027). The International Accounting Standards Board (IASB) has published its new standard, IFRS 18 that will replace IAS 1 ‘Presentation of Financial Statements’. The new standard is the result of the primary financial statements project and aims at improving how entities communicate in their financial statements. The new standard introduces defined categories, (Operating, Investing, Financing, Income Tax and Discontinued Operations), and mandatory subtotals in the statement of profit or loss to enhance comparability and structure, along with stricter rules on aggregation, disaggregation, and the presentation of operating expenses. It also requires detailed disclosures on management-defined performance measures (MPMs), including their calculation, purpose, and reconciliation to IFRS totals, to improve transparency and consistency. The group is still assessing the impact the adoption of this new standard will have on its financial statements. Amendments to IAS 7, ‘Statement of Cash Flows’, (effective for accounting periods beginning on or after 1 January 2027). The amendments require all companies to use the operating profit subtotal as defined in IFRS 18 as the starting point for the indirect method of reporting cash flows from operating activities. Additionally, the presentation alternatives for cash flows related to interest and dividends paid and received will be removed. The group is still assessing the impact the adoption of these amendments will have on its financial statements. There are no other IFRS or IFRIC interpretations issued by the IASB, but not yet effective, that would be expected to have a material impact on the group.

(b)

Basis of consolidation A subsidiary is an entity controlled by the group. The group controls an entity when it is exposed to, or has variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of the subsidiary are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. When the group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary and any related components of equity. Any resulting gain or loss is recognised in surplus or deficit.

100

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 18

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (b)

Basis of consolidation (cont’d) Inter-company transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred.

(c)

Business combinations The group uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. In a business combination in which the acquirer and the acquiree (or its former owners) exchange only equity interests, the acquisition-date fair value of the acquiree's equity interests is used to determined goodwill. Transaction costs, other than those associated with the issue of debt or equity securities that the credit union incurs in connection with a business combination, are expensed as incurred.

(d)

Interest expense Interest expense is recognised in surplus or deficit for all interest-bearing liabilities using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments through the expected life of the financial liability (or, where appropriate, a shorter period) to the carrying amount of the financial liability. Interest expense presented in the statement of surplus or deficit and other comprehensive income includes interest expense on financial liabilities measured at amortised cost and interest expense on lease liabilities.

101

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 19

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (e)

Interest income Interest income is recognised in surplus or deficit using the effective interest method. The calculation of the effective interest rate includes transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition of a financial asset. The effective interest rate of a financial asset is calculated on initial recognition. In calculating interest income, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) and is revised as a result of periodic re-estimation of cash flows of floating rate instruments to reflect movements in market rates of interest. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis. For financial assets that were credit-impaired on initial recognition, interest income is calculated by applying the credit-adjusted effective interest rate to the amortised cost of the asset. The calculation of interest income does not revert to a gross basis, even if the credit risk of the asset improves. Interest income calculated using the effective interest method presented in the statement of surplus or deficit and other comprehensive income includes interest on financial assets measured at amortised cost and interest on debt instruments measured at FVOCI.

(f)

Fee and commission income Fee and commission income from contracts with customers is recognised when the performance obligations are satisfied and is measured based on the consideration specified in a contract with a customer. Fee and commission income that are integral to the effective interest rate on a financial asset are included in the effective interest rate. If a loan commitment is not expected to result in the drawdown of a loan, then the related loan commitment fee is recognised on a straight-line basis over the commitment period.

102

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 20

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (f)

Fee and commission income (cont’d) Fee and commission income including account service fees are recognised as the related services are performed. A contract with a customer that results in a recognised financial instrument in the group’s financial statements may be partially in the scope of IFRS 9 and partially in the scope of IFRS 15. If this is the case, then the group first applies IFRS 9 to separate and measure the part of the contract that is in the scope of IFRS 9 and then applies IFRS 15 to the residual. The nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies are as follows:

Type of service

Service fees

Nature and timing of satisfaction of performance obligations, including significant payment terms.

Revenue recognition under IFRS 15

The group provides banking related services to members including account management, execution of customer transactions, loan processing and foreign currency transactions.

Revenue from account services and servicing fees is recognised over time as the services are provided.

Fees for ongoing account management are charged to the members account on a monthly basis.

Transaction-based fees such as credit bureau fees, foreign currency transactions and overdrafts are charged to the customer’s account when the transaction takes place or when overdraft is determined on a customer’s account. Servicing fees are charged on a monthly basis and are based on fixed rates determined by the group.

103

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 21

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (g)

Foreign currency translations Functional and presentation currency Items included in the financial statements of each of the group entities are measured using the currency of the primary economic environment in which the entity operates. The credit union’s primary economic environment is Jamaica, and as such, its functional currency, which is also its presentation currency, is the Jamaica dollar. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rate are recognised in surplus or deficit.

(h)

Taxation Taxation comprises current and deferred tax for the subsidiary, FHC Investments Limited. Section 59 of the Co-operative Societies Act, which governs the operations of the credit union, provides for the exemption from income tax and stamp duty. Current and deferred taxes are recognised as income tax expense or credit in surplus or deficit for the year except, where they relate to items recorded in other comprehensive income, in which case they are also charged or credited to other comprehensive income. (i)

Current taxation Current tax is the expected taxation recoverable or payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to income tax payable in respect of previous years.

(ii)

Deferred income taxes Deferred tax is recognised for temporary differences between the carrying amounts of assets and liabilities and their amounts as measured for tax purposes, which will result in taxable amounts in future periods. Deferred tax assets are recognised only to the extent it is probable that sufficient taxable surplus will be available against which these assets can be utilised.

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MATERIAL ACCOUNTING POLICIES (CONT’D): (h)

Taxation (cont’d) (ii)

Deferred income taxes (cont’d) Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the asset will be realised or the liability will be settled based on enacted rates.

(i)

Financial instruments Financial instruments – Classification, recognition, derecognition and measurement A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. In these financial statements:

▪ Financial assets comprise liquid assets, resale agreements, financial

investments, loans to members, cash and cash equivalents, accounts receivable and due from subsidiary.

•

Financial liabilities comprise members’ deposit, members’ voluntary shares, external credits, lease liabilities and accounts payable.

Financial instruments are classified, recognised and measured in accordance with the substance of the terms of the contracts as set out herein. (i)

Recognition and initial measurement The group recognises a financial instrument when it becomes a party to the contractual terms of the instrument. The group initially recognises loans to members and other assets on the date when they are originated. All other financial assets and financial liabilities are initially recognised on the trade date. At initial recognition, the group measures a financial asset or financial liability at its fair value, plus or minus; in case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in surplus or deficit.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) (i)

Recognition and initial measurement (cont’d) Immediately after initial recognition, an expected credit loss allowance (ECL) is recognised for financial assets measured at amortised cost and investments in debt instruments measured at FVOCI, which results in an accounting loss being recognised in surplus or deficit when an asset is newly originated. When the fair value is evidenced by a quoted price in an active market for an identical asset or liability (i.e. a level 1 input) or based on a valuation technique that uses only data from observable markets, the difference is recognised as a gain or loss. In all other cases, the difference is deferred and the timing of recognition of deferred day one surplus or deficit is determined individually. It is either amortised over the life of the instrument, deferred until the instrument’s fair value can be determined using market observable inputs, or realised through settlement.

(ii)

Classification and subsequent remeasurement The group classifies its financial assets in the following measurement categories: • Fair value through profit or loss (FVTPL); • Fair value through other comprehensive income (FVOCI); or • Amortised cost. Financial assets The classification requirements for debt and equity instruments are described below: (a)

Debt instruments Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, such as loans, government and corporate bonds and receivables. Classification and subsequent measurement of debt instruments depend on: • •

106

the group’s business model for managing the asset; and the cash flow characteristics of the asset.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (ii)

Classification and subsequent remeasurement (cont’d) Financial assets (cont’d) (a)

Debt instruments (cont’d) Based on these factors, the group classifies its debt instruments into one of the following three measurement categories:

• Amortised cost: Assets that are held for collection of contractual

cash flows where those cash flows represent solely payments of principal and interest (‘SPPI’), and that are not designated at FVTPL, are measured at amortised cost. The carrying amount of these assets is adjusted by any expected credit loss allowance recognised and measured as described at [2(l)]. Interest income from these financial assets is included in interest income calculated using the effective interest method.

• Fair value through other comprehensive income (FVOCI): Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets’ cash flows represent solely payments of principal and interest, and that are not designated at FVTPL are measured at fair value through other comprehensive income (FVOCI).

•

Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in surplus or deficit and presented in the surplus or deficit statement within ‘Net gains/(losses) from trading’ in the period in which it arises, unless it arises from debt instruments that were designated at fair value or which are not held for trading, in which case they are presented separately in ‘Net investment income’. Interest income from these financial assets is recognised in the profit or loss in the period in which it arises.

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MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (ii)

Classification and subsequent remeasurement (cont’d) Financial assets (cont’d) (a)

Debt instruments (cont’d) Business model assessment: the business model reflects how the group manages the assets in order to generate cash flows. That is, whether the group’s objective is solely to collect the contractual cash flows from the assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then the financial assets are classified as part of ‘other’ business model and measured at FVTPL. Factors considered by the group in determining the business model for a class of assets include: 1. Past experience on how the cash flows for these assets were collected; 2. How the asset’s performance is evaluated and reported to key management personnel; 3. How risks are assessed and managed; and 4. How managers are compensated. For example, securities held for trading are held principally for the purpose of selling in the near term or are part of a portfolio of financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. These securities are classified in the ‘other’ business model and measured at FVTPL.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (ii)

Classification and subsequent remeasurement (cont’d) Financial assets (cont’d) (a)

Debt instruments (cont’d) Solely payments of principal and interest (SPPI): Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the group assesses whether the financial instruments’ cash flows represent solely payments of principal and interest (the ‘SPPI test’). In making this assessment, the group considers whether the contractual cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair value through profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. The group reclassifies debt investments when and only when its business model for managing those assets changes. The reclassification takes place from the start of the first reporting period following the change. Such changes are expected to be very infrequent and none occurred during the period.

(b)

Equity instruments Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the issuer’s net assets. The group subsequently measures all equity investments at fair value through profit or loss, except where the group’s management has elected, at initial recognition, to irrevocably designate an equity investment at fair value through other comprehensive income. The election is made on an investment-by-investment basis. Gains and losses on equity investments at FVTPL are included in the ‘Non-interest income’ caption in the statement of surplus or deficit.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (ii)

Classification and subsequent remeasurement (cont’d) (c)

Modified financial assets Where the modification to the contractual terms of a loan is substantial, the existing loan is derecognised and a new renegotiated loan is recognised at a new effective interest rate. Where the modification is not substantial and does not result in derecognition, the gross carrying amount of the loan is adjusted by discounting the modified cash flows using the original effective interest rate.

Financial liabilities The group’s financial liabilities are classified and measured at amortised cost. These financial liabilities include members’ deposits, members’ voluntary shares, lease liabilities, external credits and certain other financial liabilities. Interest on these liabilities, calculated using the effective interest rate method is recognised as interest expense. (iii)

Derecognition Derecognition of financial assets The group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in other comprehensive income (OCI) is recognised in surplus or deficit.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (iii)

Derecognition (cont’d) Derecognition of financial liabilities Any cumulative gains or losses recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in surplus or deficit on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the group is recognised as a separate asset or liability. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognised as a gain/loss in surplus or deficit.

(iv)

Measurement and gains and losses The liquid assets’ and financial investments' captions in the statement of financial position includes: -

debt investment securities measured at amortised cost which are initially measured at fair value plus incremental direct transaction costs, and subsequently at their amortised cost using the effective interest method;

debt and equity investment securities mandatorily measured at FVTPL or designated as at FVTPL which are at fair value with changes recognised immediately in surplus or deficit; and

equity investment securities designated as at FVOCI.

For debt securities measured at FVOCI, gains and losses are recognised in other comprehensive income (OCI), except for the following, which are recognised in profit or loss in the same manner as for financial assets measured at amortized cost: • Interest revenue using effective interest method; • ECL charges and reversals and; • Foreign exchange gains and losses.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (i)

Financial instruments (cont’d) Financial instruments – Classification, recognition, derecognition and measurement (cont’d) (iv)

Measurement and gains and losses (cont’d) The group elects to present in OCI changes in the fair value of certain investments in equity instruments that are not held for trading. The election is made on an instrument-by-instrument basis on initial recognition and is irrevocable. Gains and losses on such equity instruments are never reclassified to surplus or deficit and no impairment is recognised in surplus or deficit. Dividends are recognised in surplus or deficit unless they clearly represent a recovery of part of the cost of the investment, in which case they are recognised in OCI. Cumulative gains and losses recognised in OCI are transferred to accumulated surplus on disposal of an investment.

(v)

Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

(j)

Investment in subsidiary Investment in subsidiary is measured at cost, less impairment losses, in the separate financial statements of the credit union.

(k)

Resale agreements Securities purchased under agreements to resell the assets at a fixed price on a future date (resale agreements) are treated as collateralised financing transactions. The underlying asset is not recognised in the group’s financial statements. The difference between the purchase and resale consideration is recognised as interest over the life of the agreements using the effective interest method.

(l)

Impairment of financial assets The group recognises loss allowances for expected credit losses (ECL) on financial assets that are debt instruments and that are not measured at FVTPL.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (l)

Impairment of financial assets (cont’d) The group measures loss allowances at an amount equal to lifetime ECL, except for the following, for which they are measured as 12-month ECL:

- debt investment securities that are determined to have low credit risk at the reporting date; and

- other financial instruments on which credit risk has not increased significantly since their initial recognition.

The group considers a debt investment security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’. The group does not apply the low credit risk exemption to any other financial instruments. 12-month ECL are the portion of ECL that result from default events on a financial instrument that are possible within the 12 months after the reporting date. Financial instruments for which a 12-month ECL is recognised are referred to as ‘Stage 1 financial instruments’. Life-time ECL are the ECL that result from all possible default events over the expected life of the financial instrument. Financial instruments for which a lifetime ECL is recognised but which are not credit-impaired are referred to as ‘Stage 2 financial instruments’. Measurement of ECL ECL are a probability-weighted estimate of credit losses. They are measured as follows:

financial assets that are not credit-impaired at the reporting date: as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the group expects to receive);

undrawn loan commitments: as the present value of the difference between the contractual cash flows that are due to the group if the commitment is drawn and the cash flows that the group expects to receive.

Restructured financial assets If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a new one due to financial difficulties of the borrower, then an assessment is made of whether the financial asset should be derecognised and ECL are measured as follows:

If the expected restructuring will not result in derecognition of the existing asset, then the expected cash flows arising from the modified financial asset are included in calculating the cash shortfalls from the existing asset.

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (l)

Impairment of financial assets (cont’d) Restructured financial assets (cont’d)

If the expected restructuring will result in derecognition of the existing asset, then the expected fair value of the new asset is treated as the final cash flow from the existing financial asset at the time of its derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset that are discounted from the expected date of derecognition to the reporting date using the original effective interest rate of the existing financial asset.

Credit-impaired financial assets At each reporting date, the group assesses whether financial assets carried at amortised costs are credit-impaired (referred to as ‘Stage 3 financial assets’). A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

- - - - -

significant financial difficulty of the borrower or issuer; a breach of contract such as a default or past due event; the restructuring of a loan or advance by the group on terms that the group would not consider otherwise; it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or the disappearance of an active market for a security because of financial difficulties.

A loan that has been renegotiated due to a deterioration in the borrower’s condition is usually considered to be credit-impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced significantly and there are no other indicators of impairment. In addition, a loan that is overdue for 90 days or more is considered credit-impaired even when the regulatory definition of default is different. In making an assessment of whether an investment in sovereign debt is credit-impaired, the group considers the following factors.

- The market’s assessment of creditworthiness as reflected in the bond yields. - The rating agencies’ assessments of creditworthiness. - The country’s ability to access the capital markets for new debt issuance. - The probability of the debt being restructured, resulting in holders suffering losses through voluntary or mandatory debt forgiveness.

- The international support mechanisms in place to provide the necessary support

as ‘lender of last resort’ to that country, as well as the intention, reflected in public statements of governments and agencies to use those mechanisms. This includes an assessment of the depth of those mechanisms and, irrespective of the political intent, whether there is the capacity to fulfil the required criteria.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (l)

Impairment of financial assets (cont’d) Presentation of allowance for ECL in the statement of financial position Allowances for ECL are presented in the statement of financial position as follows:

- - -

(m)

Financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets. Loan commitments and financial guarantee contracts: generally, as a provision. Debt instruments measured at FVOCI: no loss allowance is recognised in the statement of financial position because the carrying amount of these assets is their fair value. However, the loss is recognised in surplus or deficit as a reclassification from OCI.

Impairment of non-financial assets The carrying amounts of the group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. The recoverable amount of nonfinancial assets is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in surplus or deficit. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(n)

Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash at bank and deposits not held to satisfy requirements of the League. These are measured in the statement of financial position at amortised cost.

(o)

Accounts receivable Receivables are measured at amortised cost less impairment losses.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (p)

Intangible assets (i)

Brand Brand acquired in a business combination is measured at cost less impairment losses and is deemed to have a finite useful life. Amortisation is calculated using the straight line method to allocate the cost of the intangible asset over its estimated useful life of 10 years.

(ii)

Core deposits Core deposits, acquired in a business combination relate to the total cost of maintaining the core deposit base (e.g., interest, servicing costs, fee income, and the opportunity cost of reserve requirements and float) in comparison to the cost of an alternative funding source. These are measured at cost less impairment losses and are deemed to have a finite useful life. Amortisation is calculated using the straight line basis to allocate the cost of the intangible assets over their estimated useful lives of 10 years.

(iii)

Customer relationships Customer relationships acquired in the business combination are measured at cost less impairment losses and are deemed to have a finite useful life. Customer relationships are the estimated economic benefits derived from the incremental revenues and related cash flows as a direct result of relationships in place, versus having to try and replicate them. Amortisation is calculated using the straight-line method to allocate the cost of the intangible assets over their estimated useful lives of 12 years.

(iv)

Goodwill Goodwill is measured initially at fair value, less any accumulated impairment losses. Goodwill is not amortised but assessed annually for impairment.

(v)

Computer software Computer software is measured at cost, less accumulative amortisation and impairment losses. Amortisation is charged on the straight line basis over the useful lives of the assets at 10% per annum, from the date it is available for use.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (q)

Property, plant and equipment Freehold land and capital work-in-progress are measured at cost and are not depreciated. All other property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Depreciation is calculated on the straight-line basis at annual rates estimated to write down the assets to their residual values over their expected useful lives. The expected useful lives of depreciable property, plant and equipment are as follows: Buildings Computer equipment Furniture, fixtures and equipment Motor vehicles

40 years 5 years 10 years 8 years

Property, plant and equipment are periodically reviewed for impairment. Where the carrying amount of the asset is greater than the estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposal of property, plant and equipment are determined by reference to carrying amounts and are recognised in surplus or deficit. Repairs and renewal expenses are charged to surplus or deficit when the expenditure is incurred. (r)

Employee benefits Retirement benefits The group participates in a multi-employer defined benefit pension plan (Note 20). The pension plan is funded by contributions from employees and by the group, taking into account the recommendation of independent qualified actuaries. The asset or liability in respect of the defined benefit plan is the difference between the present value of the defined benefit obligations and the fair value of plan assets at the reporting date. Where a pension asset arises, the amount recognised is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The valuation is performed using the projected unit credit method. Under this method, the cost of providing pensions is charged to net surplus as to spread the regular cost of service over the service lives of the employees. The pension obligation is measured at the present value of the estimated future cash outflows using discount rates based on market yields on government securities which have terms to maturity approximating the terms of the related liability. The pension plan assets are allocated based on the group’s obligation as a proportion of the total obligations of the plan.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (r)

Employee benefits (cont’d) Retirement benefits (cont’d) Remeasurements of the net defined benefit asset, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The group determines the net interest income on the net defined benefit asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit asset, taking into account any changes during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in surplus or deficit. Vacation leave accrual The group’s vacation leave policy allows a maximum of six weeks unused vacation leave to be carried forward for all managerial staff and four weeks for non-managerial staff. The charge for outstanding leave is recognised in surplus or deficit over the period that employees become entitled to vacation leave.

(s)

Members’ shares Permanent shares Permanent shares may be transferred by a member to another member but are not available for withdrawal. Permanent shares are classified as equity and measured at amortised cost. Voluntary shares Members’ voluntary shares represent deposit holdings of the credit union’s members, for savings, to satisfy membership requirements and to facilitate eligibility for loans and other benefits. These shares are classified as financial liabilities, as they are available for withdrawal at short notice. They are measured at amortised cost. The amount of interest on these shares is determined at the discretion of the credit union and reported as interest expense in surplus or deficit in the period in which they are approved.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 2.

MATERIAL ACCOUNTING POLICIES (CONT’D): (t)

External credit External credit is initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method.

(u)

Institutional capital Institutional capital includes the statutory reserve fund, as well as other reserves established from time to time which, in the opinion of the Directors, are necessary to support the operations of the credit union and, thereby, protect the interest of the members. These reserves are not available for distribution.

(v)

Non-interest bearing liabilities Non-interest bearing liabilities, including provisions, are classified and measured at amortised cost: Provisions are recognised when the group has a present, legal or constructive obligation as a result of past events, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

(w)

Liquid assets Liquid earning assets comprise investments maturing within and not more than twelve (12) months from the reporting date. Liquid non-earning assets comprise cash on hand and current accounts held at banks. Liquid assets are classified and measured at amortised cost.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 3.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES: Judgements and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the group’s accounting policies, management has made the following critical accounting estimates or judgements which it believes have a significant risk of causing a material misstatement in these financial statements. (a)

Critical judgements in applying the credit union’s accounting policies Impairment of financial assets Establishing the criteria for determining whether credit risk on the financial asset has increased significantly since initial recognition, determining the methodology for incorporating forward-looking information into the measurement of expected credit loss (ECL) and selection and approval of models used to measure ECL requires significant judgement.

(b)

Key sources of estimation uncertainty (i)

Allowance for impairment losses on financial assets The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers defaulting and the resulting losses). Management also estimate the likely amount of cashflows recoverable on the financial assets in determining loss given default. The use of assumptions make uncertainty inherent in such estimate. Explanation of the inputs, assumptions and estimation techniques used in measuring ECL is further detailed in note 4(a), which also sets out key sensitivities of the ECL to changes in these elements. The use of assumptions make uncertainty inherent in such estimate.

(ii)

Employee benefits obligation The amounts recognised in the statement of financial position and statement of surplus or deficit and other comprehensive income for pension benefits are determined actuarially using several assumptions [see note 20(i)]. The primary assumptions used in determining the amounts recognised include the discount rate used to determine the present value of estimated future cash flows required to settle the pension obligations.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 3.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES (CONT’D): (b)

Key sources of estimation uncertainty (cont’d) (ii)

Employee benefits obligation (cont’d) The discount rate is determined based on the estimate of yield on long-term government securities that have maturity dates approximating the terms of the group’s obligations. In the absence of such instruments in Jamaica, it has been necessary to estimate the rate by extrapolating from the longest-tenor security on the market. Any changes in these assumptions will impact the amounts recorded in the financial statements for these obligations.

(iii)

Fair value of financial instruments In the absence of quoted market prices, the fair value of the group’s financial instruments are determined using a generally accepted alternatives. Accordingly, fair values of several financial assets are estimated using prices obtained from a yield curve. The yield curve is, in turn, obtained from a pricing source which uses indicative prices submitted to it by licensed banks and other financial institutions in Jamaica. There is uncertainty inherent in this approach. The fair values determined in this way are classified as Level 2 in the fair value hierarchy. Some other fair values are estimated based on quotes published by broker/dealers, and these are also classified as Level 2. The estimates of fair value arrived at from these sources may be materially different from the actual price of the instrument in an actual arm’s length transaction see note 4(e). Consequently, the estimates arrived at may be significantly different from the actual price of the instrument in an arm’s length transaction.

(iv)

Impairment of intangible assets Goodwill is not amortised but is tested annually for impairment. In completing this assessment, the value-in-use of the cash-generating unit to which the goodwill has been allocated is required. The value-in-use calculation involves estimating the future cash flows of the cash-generating unit and applying a suitable discount rate see note 19.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025

FINANCIAL RISK MANAGEMENT: The group’s overall risk management programme involves the analysis, evaluation, acceptance and management of some degree of risk or combination of risks. The group has established risk management policies designed to identify and analyse these risks, to set appropriate risk limits and controls, and to monitor the risks and adherence to limits by means of regularly generated reports. Risk management procedures are closely integrated into all key business processes. The Board of Directors is ultimately responsible for the establishment and oversight of the group’s risk management framework. It defines the overall risk profile of the group by approving its financial policies and guidelines, as well as maximum limits for exposure on individual loans. The group has exposure to the following risks from its use of financial instruments:

• • • •

Credit risk Liquidity risk Market risk Operational risk

Risk management overview The Board has established committees/functions for managing and monitoring risks as follows: (i)

Supervisory Committee The Supervisory Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group. The Supervisory Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Supervisory Committee.

(ii)

Credit and Past Due Committee The Credit and Past Due Committee oversees the approval and disbursements of credit facilities to members. It is also primarily responsible for monitoring the quality of the loan portfolio.

(iii)

Treasury Committee The Treasury Committee is responsible for monitoring the management of the group’s assets and liabilities and the overall financial structure. It is also primarily responsible for managing the funding and liquidity risks of the group.

122

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): Risk management overview (cont’d) The Board has established committees/functions for managing and monitoring risks as follows (cont’d): (iv)

Finance and Operations Committee The Finance and Operations Committee is responsible for monitoring and formulating investment portfolios and investment strategies for the group which includes the formulation of appropriate trading limits and reports and compliance controls to ensure that their mandate is properly followed. The Finance and Operations Committee has two sub-committees that monitor treasury and delinquency. Treasury is responsible for monitoring the management of the group’s assets and liabilities and, by extension, the management of funding and liquidity risks. The Delinquency committee assesses the adequacy of provisions for non-performing loan facilities.

These committees comprise persons independent of management and report to the Board on a monthly basis. The business functions, Lending and Treasury, are responsible for managing risks assumed through their operations and for ensuring that an adequate return for the risks taken is achieved. Operations Risk and Compliance, Credit Administration and Internal Audit are independent from the departments carrying out the group’s business activities. Operations Risk and Compliance has the overall responsibility for identifying, assessing, monitoring and reporting all types of risk inherent in the group’s operations. Credit Administration is responsible for assessing and monitoring credit risk in the group’s lending operations and seeks to ensure that credit proposals are in compliance with established limits and policies. Internal Audit provides an independent evaluation of the control and risk management processes. Based on regular reporting from these departments, the aforementioned committees supervise the group’s aggregate risk-taking. There have been no significant changes to the group’s exposure to financial risks or the manner in which it manages and measures these risks.

123

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk Credit risk is the most important risk for the group’s business. Credit risk is the risk that borrowers or other counterparties will cause a financial loss for the group by failing to discharge their contractual obligations, and that any collateral provided does not cover the group’s claims. As a consequence of the group’s mandate and resulting financial structure, this risk arises principally from the group’s lending activities. For loans, credit decisions are primarily made by the Board of Directors, with some delegation of credit approval authority to the Credit Committee and certain members of executive management. The group’s credit policy forms the basis for all its lending operations. The policy aims at maintaining a high quality loan portfolio, as well as enhancing the group’s mission and strategy. The policy sets the basic criteria for acceptable risk and identifies risk areas that require special attention. Additionally, the group is exposed to credit risk in its treasury activities, arising from financial assets that the group uses for managing its liquidity, currency, interest rate and other price risks. There is also credit risk in financial instruments not carried on the statement of financial position, such as loan commitments. Credit review process The group has established a credit quality review process involving regular analysis of the ability of borrowers and other counterparties to meet interest and capital repayment obligations. Loans The group assesses the probability of default of individual borrowers using internal ratings. The group assesses each borrower on four critical factors. These factors are the member’s credit history, ability to pay linked to the industry benchmarked debt service ratio of 40% to 45%, character profile and the member’s economic stability, based on employment and place of abode.

124

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Credit limits The group manages concentration of credit risk by placing limits on the amount of risk accepted in relation to a single borrower or group of related borrowers, and to product segments. Borrowing limits are established by the use of the system described above, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. Limits on the level of credit risk by product categories, and for investment categories, are reviewed and approved bi-annually by the Board of Directors. Collateral The most widely used practice for mitigating credit risk is the taking of security in the form of physical assets, netting agreements and guarantees. The amount and type of collateral required depends on an assessment of the credit risk of the borrower. Guidelines are implemented regarding the acceptability of different types of collateral. The principal collateral types provided for loans and advances are charges over member balances, real properties and motor vehicles. Management monitors the market value of collateral, requests additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the provision for credit losses. The group has documented policies which facilitate the management of credit risk on investment securities and resale agreements. The group’s exposure and credit rating of its counterparties are continually monitored.

125

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Collateral (cont’d) The table below sets out the gross amount of loans and the value of identifiable collateral held against loans to members. For each loan, the value of disclosed collateral is capped at the nominal amount of the loan that it is held against. When a loan becomes credit impaired, the fair value of the collateral is updated and used in calculating the ECL, otherwise a proxy for collateral value is generally used on a portfolio basis to compute the ECL throughout the year.

Gross Amount $’000

15,401,676

1,173,035

6,457,364

3,110,671

10,741,070

Stage 2

364,204

24,759

152,445

114,010

291,214

Stage 3

998,491

11,467

209,360

360,490

581,317

16,764,371

1,209,261

6,819,169

3,585,171

11,613,601

The Group and The Credit Union 2024 Collaterals 2 Motor Real Cash Vehicles Estate $’000 $’000 $’000

a Total unt $’000

Stage 1

Gross Amount $’000

126

The Group and The Credit Union 2025 Collaterals 2 Motor Real Cash Vehicles Estate $’000 $’000 $’000

a Total unt $’000

Stage 1

14,558,284

1,024,780

6,023,415

3,059,114

10,107,309

Stage 2

333,290

17,927

131,399

113,303

262,629

Stage 3

941,088

2,026

210,645

346,197

558,868

15,832,662

1,044,733

6,365,459

3,518,614

10,928,806

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Collateral (cont’d) Financial investments and resale agreements The group limits its exposure to credit risk by investing mainly in liquid securities, with counterparties that have high credit quality and Government of Jamaica securities. Accordingly, management does not expect any counterparty to fail to meet its obligations. Liquid assets Liquid assets and bank balances are held in financial institutions which management regards as strong and there is no significant concentration. The credit risk of these financial institutions is monitored by the finance committee. Impairment The impairment allowance shown in the statement of financial position is derived from the two internal rating grades. However, the majority of the impairment allowance comes from the non-performing rating class. Inputs, assumptions and techniques used for estimating impairment: (i)

Significant increase in credit risk When determining whether the risk of default on a financial instrument has increased significantly since initial recognition, the group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the group’s historical experience and third party policies including forward looking information. The objective of the assessment is to identify whether a significant increase in credit risk has occurred for an exposure by comparing:

- -

the remaining lifetime probability of default (PD) as at the reporting date; with the remaining lifetime PD for this point in time that was estimated at the time of initial recognition of the exposure (adjusted where relevant for changes in prepayment expectations).

127

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (i)

Significant increase in credit risk (cont’d) The group uses three criteria for determining whether there has been a significant increase in credit risk:

- quantitative test based on movement in PD; - qualitative indicators; and - a backstop of 30 days past due. Credit risk grades: Borrowers of the group are segmented into two rating classes. The group’s rating scale, which is shown below, reflects the range of default probabilities defined for each rating class. Group’s rating Description of the grade Grade 1 Grade 2

Performing non-performing

Each rating contains various sub-factors to which percentages or the overall class scores are assigned. Sub-drivers that are deemed to pose a greater risk are assigned lower scores than those that are assessed at lesser risk levels. Historical default information is taken into consideration in the allocation of the sub-driver scores. The credit quality review process allows the group to assess the potential loss as a result of the risk to which it is exposed and take corrective action. Exposure to credit risk is managed, in part, by obtaining collateral, and corporate and personal guarantees. Credit risk ratings also determine credit limits and collateral, and are systematically reassessed on an annual basis. Reassessment is based on the borrower’s credit worthiness, and on any new information and events that may have an impact on the level of credit risk, whether these arise from the borrower’s own circumstances or from the financial environment, in general.

128

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (i)

Significant increase in credit risk (cont’d) The group allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of default and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary depending on the nature of the exposure and the type of borrower. Each exposure is allocated to a credit risk grade on initial recognition based on available information about the borrower. Exposures are subject to ongoing monitoring, which may result in an exposure being moved to a different credit risk grade. The monitoring typically involves use of the following data:

- Information obtained during periodic review of customer files – e.g. audited financial statements, management accounts, budgets and projections. Examples of areas of particular focus are: gross profit margins, financial leverage ratios, debt service coverage, compliance with covenants, quality of management, senior management changes.

- Data from credit reference agencies, press articles, changes in external credit ratings.

- Actual and expected significant changes in the political, regulatory and technological environment of the borrower or in its business activities.

- External data from credit reference agencies, including industry-standard credit scores.

- Payment record, which includes overdue status as well as a range of variables about payment ratios.

- Existing and forecast changes in business, financial and economic conditions.

129

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (i)

Significant increase in credit risk (cont’d) Determining whether credit risk has been increased significantly: The group assesses whether credit risk has increased significantly since initial recognition at each reporting date. Determining whether an increase in credit risk is significant depends on the characteristics of the financial instrument and the borrower. Credit risk is deemed to increase significantly where the credit rating of a security decreased four or more levels on the international credit rating scale since the rating at origination date or the issuer of the instrument is experiencing or is very likely to experience one or more adverse changes in one or more of the credit risk drivers that could increase the likelihood of default since the origination of loans. As a backstop, the group considers that a significant increase in credit risk occurs no later than when an asset is more than 30 days past due. Days past due are determined by counting the number of days since the earliest elapsed due date in respect of which full payment has not been received. Due dates are determined without considering any grace period that might be available to the borrower. If there is evidence that there is no longer a significant increase in credit risk relative to initial recognition, then the loss allowance on an instrument returns to being measured as 12-month ECL. Some qualitative indicators of an increase in credit risk, such as delinquency or forbearance, may be indicative of an increased risk of default that persists after the indicator itself has ceased to exist. In these cases, the group determines a probation period during which the financial asset is required to demonstrate good behaviour to provide evidence that its credit risk has declined sufficiently. When contractual terms of a loan have been modified, evidence that the criteria for recognising lifetime ECL are no longer met includes a history of up-to-date payment performance against the modified contractual terms.

130

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (i)

Significant increase in credit risk (cont’d) The group monitors the effectiveness of the criteria used to identify significant increases in credit risk by regular reviews to confirm that:

- the criteria are capable of identifying significant increases in credit risk before an exposure is in default;

- the criteria do not align with the point in time when an asset becomes 30 days past due;

- the average time between the identification of a significant increase in credit risk and default appears reasonable;

- exposures are not generally transferred directly from 12-month ECL measurement to credit-impaired;

- there is no unwarranted volatility in loss allowance from transfers between 12month PD (Stage 1) and lifetime PD (Stage 2);

- the borrower is unlikely to pay its credit obligations to the group in full, without recourse by the group to actions such as realising security (if any is held); - the borrower is more than 90 days past due on any material credit obligation to the group; and - it is becoming probable that the borrower will restructure the asset as a result of bankruptcy due to the borrower’s inability to pay its credit obligations. Definition of default: In assessing whether a borrower is in default, the group considers indicators that are:

- qualitative: e.g. breaches of covenant; - quantitative: e.g. overdue status and non-payment on another obligation of the same issuer to the group; and

- based on data developed internally and obtained from external sources.

131

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (i)

Significant increase in credit risk (cont’d) Inputs into the assessment of whether a financial instrument is in default and their significance may vary over time to reflect changes in circumstances. The group considers a loan to be in default if it is overdue for 90 days or more. The definition of default largely aligns with that applied by the group for regulatory capital purposes.

(ii)

Incorporation of forward-looking information The group incorporates forward-looking information into both the assessment of whether the credit risk of an instrument has increased significantly since its initial recognition and the measurement of ECL. The group uses a forward-looking score card model to estimate the potential of future economic conditions. It formulates three economic scenarios: a base case, which is the median scenario assigned a 50% probability of occurring, and two less likely scenarios, one upside and one downside, each assigned a 20% and 30% probability of occurring, respectively. Each scenario considers the expected impact of inflation interest rates, unemployment rates and gross domestic product (GDP). The base case is aligned with information used by the group for other purposes such as strategic planning and budgeting. External information considered includes economic data and forecasts published by governmental bodies and monetary authorities in Jamaica, supranational organisations and selected private-sector forecasters. The macroeconomic assumptions used in the positive, stable and negative outlook resulting in an FLI score ranging from 1-1.12 (2024: 1-1.09) are as follows:

132

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (ii)

(iii)

Incorporation of forward-looking information (cont’d)

Outlook

2025 Inflation, unemployment and interest

GDP

Positive Stable Negative

-9% to -1% -1% to 1% 1% to 9%

0.5% to 9% -0.25% to 0.5% -9% to -0.25%

Outlook

2024 Inflation, unemployment and interest

GDP

Positive Stable Negative

-9% to -1% -1% to 1% 1% to 9%

0.5% to 9% -0.25% to 0.5% -9% to -0.25%

Measurement of ECL The key inputs into the measurement of ECL are the term structure of the following variables:

- probability of default (PD); - loss given default (LGD); and - exposure at default (EAD). ECL for exposures in Stage 1 is calculated by multiplying the 12-month PD by LGD and EAD. Lifetime ECL is calculated by multiplying the lifetime PD by LGD and EAD.

133

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) Inputs, assumptions and techniques used for estimating impairment (cont’d): (iii)

Measurement of ECL (cont’d) LGD is the magnitude of the likely loss if there is a default. The group estimates LGD parameters based on the history of recovery rates of claims against defaulted counterparties. The LGD models consider the structure, collateral, seniority of the LGD is the magnitude of the likely loss if there is a default. The group estimates LGD parameters based on the history of recovery rates of claims against defaulted counterparties. The LGD models consider the structure, collateral, seniority of the claim, counterparty industry and recovery costs of any collateral that is integral to the financial asset. For loans secured by property, loan-to-value amounts are a key parameter in determining LGD. LGD estimates are recalibrated for different economic scenarios and, for real estate lending, to reflect possible changes in property prices. They are calculated on a discounted cash flow basis using the effective interest rate as the discounting factor. EAD represents the expected exposure in the event of a default. The group derives the EAD from the current exposure to the counterparty and potential changes to the current amount allowed under the contract and arising from amortisation. The EAD of a financial asset is its gross carrying amount at the time of default. For lending commitments, the EADs are potential future amounts that may be drawn under the contract, which are estimated based on historical observations and forward-looking forecasts. As described above, and subject to using a maximum of a 12-month PD for Stage 1 financial assets, the group measures ECL considering the risk of default over the maximum contractual period (including any borrower’s extension options) over which it is exposed to credit risk, even if, for credit risk management purposes, the group considers a longer period. The maximum contractual period extends to the date at which the group has the right to require repayment of an advance or terminate a loan commitment or guarantee.

134

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) (iv)

Loss allowance The loss allowance recognised is analysed as follow: (a)

Loans

Balance at 1 January 2025 Provided/(reversed) during the year Bad debts written off Transfer to/(from) stages: Stage 1 Stage 2 Stage 3 Balance at 31 December 2025

The Group and The Credit Union 2025 . Stage 1 Stage 2 Stage 3 Total $’000 $’000 $’000 $’000 159,484

10,042

472,262

641,788

211,846 -

25,734 -

30,596 (240,344)

268,176 (240,344)

(243,925) 1,746 21,573

4,995 (38,509) 8,004

238,930 36,763 ( 29,577)

150,724

10,266

508,630

669,620

The Group and The Credit Union 2024 . Stage 1 Stage 2 Stage 3 Total $’000 $’000 $’000 $’000 Balance at 1 January 2024 Provided/(reversed) during the year Bad debts written off Transfer to/(from) stages: Stage 1 Stage 2 Stage 3 Balance at 31 December 2024

126,365

6,868

461,854

595,087

236,241 -

45,061 -

( 5,072) (229,529)

276,230 (229,529)

(224,520) 1,083 20,315

7,041 (55,127) 6,199

217,479 54,044 ( 26,514)

159,484

10,042

472,262

641,788

135

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Impairment (cont’d) (iv)

Loss allowance (cont’d) The loss allowance recognised is analysed as follow (cont’d): (b)

Debt securities and other financial assets at amortised cost: The Group and The Credit Union. 2025 2024 . Stage 1 Total Stage 1 Total $’000 $’000 $’000 $’000 Balance at the beginning of the year 10,089 10,089 12,336 12,336 Net remeasurement of loss allowance 482 482 ( 2,247) ( 2,247) Balance at the end of year

(c)

10,571

10,089

Debt securities and other financial assets at FVOCI:

The Group . 2025 2024 . Stage 1 Total Stage 1 Total $’000 $’000 $’000 $’000

Balance at the beginning of the year Net remeasurement of loss allowance

1,381

( 945)

Balance at the end of year

436

. Balance at the beginning of the year Net remeasurement of loss allowance Balance at the end of year

136

(

1,693

312)

( 312)

1,381

The Credit Union 2025 2024 . Stage 1 Total Stage 1 Total $’000 $’000 $’000 $’000 292

292

384

(112)

( 92)

179

292

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Renegotiated loans Restructuring activities include extended payment arrangements, approved external management plans, modification and deferral of payments. Following restructuring, a previously overdue customer account is reset to normal status and managed together with other similar accounts. Restructuring policies and practices are based on indicators or criteria which, in the judgment of management, indicate that payment will most likely continue. These policies are kept under continuous review. Restructuring is most commonly applied to term loans. The group’s renegotiated loans that would otherwise be past due or impaired totaled Nil (2024: Nil). There were no renegotiated loans which were deemed impaired within the year. Repossessed collateral In the normal course of business, the security documentation which governs the collateral charged to secure loans gives the group express authority to repossess the collateral in the event of default. The group is in the process of negotiating the sale of motor vehicles and real estate amounting to $408,732,500 (2024: $244,398,000) which are used as collateral for loans. Title to the above items has not been transferred to the group. Consequently, the group has not recognised the assets in the financial statements. Credit risk exposure Maximum exposure to credit risk before collateral held or other credit enhancements: For items on the statement of financial position, the exposures are based on net carrying amounts as reported.

137

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Credit risk exposure (cont’d) For items not on the statement of financial position, the table below reflects the worst case scenario of credit risk exposure to the group without taking account of any collateral held or other credit enhancements. Credit risk not reflected on the statement of financial position was as follows: The Group and . The credit Union . 2025 2024 $’000 $’000 Loan commitments

19,250

49,935

The ECL on undisbursed loan commitments is estimated to be immaterial, as the commitments are assessed as Stage 1. Debt securities Debt securities are summarised as follows: The Group . 2025 2024 $’000 $’000 Resale agreements Government of Jamaica securities Liquid assets Preference shares Corporate bonds Deferred shares Fixed deposits

138

The Credit Union 2025 2024 $’000 $’000

1,471,097

573,701

1,435,056

552,707

216,948 1,599,931 305,997 466,935 123,276 839,073

251,754 1,411,430 310,631 483,707 118,482 625,634

207,321 242,575 1,599,931 1,411,430 300,951 300,951 435,476 409,393 123,276 118,482 838,556 625,122

5,023,257

3,775,339

4,940,568

3,660,660

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Credit risk exposure (cont’d) The following tables set out information about the maximum exposure to credit risk and the credit quality of financial assets measured at amortised cost and FVOCI debt. Unless specifically indicated, for financial assets, the amounts in the table represent gross carrying amounts. Loans to members Loans to members at amortised cost: The Group and The Credit Union 2025

Credit grade Grade 1- Performing Grade 2- Non-performing Loss allowance

. .

Stage 1 $’000

Stage 2 $’000

Stage 3 $’000

Total $’000

11,755,409 3,693,638 15,449,047

316,641 47,563 364,204

951,120 951,120

12,072,050 4,692,321 16,764,371

(

150,724)

( 10,266)

(508,630)

(

15,298,323

353,938

442,491

16,094,751

The Group and The Credit Union 2024

669,620)

. .

Stage 1 $’000

Stage 2 $’000

Stage 3 $’000

Total $’000

Credit grade Grade 1- Performing Grade 2- Non-performing

10,972,719 3,585,565

286,709 46,581

941,088

11,259,428 4,573,234

Loss allowance

14,558,284 ( 159,484)

333,290 ( 10,042)

941,088 (472,262)

15,832,662 ( 641,788)

14,398,800

323,248

468,826

15,190,874

139

Page 57

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Credit risk exposure (cont’d) Debt securities are summarised as follows: .

Credit grade At amortised cost: Non-investment grade Loss allowance

Stage 1 $’000 4,471,377 ( 10,571)

Fair value through OCI: Non-investment grade Loss allowance

140

Total $’000

(

. .

Total $’000

3,140,765 3,140,765 ( 10,089) ( 10,089)

4,460,806

3,130,676

281,875 -

(

2025

(

Stage 1 $’000

2024

4,471,377 10,571)

Credit grade At amortised cost: Non-investment grade Loss allowance

The Group

2025

(

3,130,676

363,548 363,548 1,601) ( 1,601)

The Credit Union

. .

Stage 1 $’000

Total $’000

4,434,819 10,571)

4,434,819 ( 10,571)

3,119,260 3,119,260 ( 10,089) ( 10,089)

4,424,248

3,109,171

240,789 179)

(

240,789 179)

Stage 1 $’000

2024

(

Total $’000

3,109,171

280,055 280,055 292) ( 292)

Page 58

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (a)

Credit risk (cont’d) Credit risk exposure (cont’d) Concentration of risk Loans to members The following table summarises the group’s credit exposure for loans at their carrying amounts, as categorised by industry sector: The Group and The Credit Union 2025 2024 $’000 $’000 Agriculture, fishing and mining Construction and real estate Debt financing Distribution Micro loans Personal Other

Less: Allowance for impairment

Interest receivable

15,688 1,278,157 1,066,233 86,234 486,934 12,915,961 915,164

28,691 1,197,650 992,137 94,502 493,429 12,078,146 948,107

16,764,371

15,832,662

(

669,620)

641,788)

16,094,751

15,190,874

97,139

87,959

16,191,890

15,278,833

141

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 59

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

Liquidity risk Liquidity risk is the risk that the group is unable to meet payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequences may be the failure to meet obligations to repay depositors and fulfill commitments to lend. Liquidity risk management process The group’s policy is to maintain liquidity corresponding to its estimated net liquidity requirements for 12 months. The group’s liquidity management process, as carried out within the group by the Treasury Committee and monitored by the Finance Committee, includes: (i)

Monitoring future cash flows and liquidity on a daily basis. This incorporates an assessment of the group’s liquid funds which includes cash balances, bank balances and investment maturities in order to determine its ability to meet payment obligations and commitments for loans;

(ii)

Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flows;

(iii) Maintaining committed lines of credit with the League; (iv) Optimising returns on investments; (v)

Monitoring liquidity ratios against internal and regulatory requirements. The most important of these is to maintain limits on the ratio of net liquid assets to customer liabilities; and

(vi) Managing the concentration and profile of debt maturities. Monitoring and reporting take the form of an analysis of the cash balances and expected investment maturity profiles for the next day, week and month, respectively, as these are key periods for liquidity management. The starting point for these projections is the generation of analyses of loan commitments and the examination of expired credit periods in comparison to the expected collection date of the financial assets. The matching and controlled mismatching of the maturities and interest rates of assets and liabilities are fundamental to the management of the group. It is unusual for financial entities ever to be completely matched, since business transacted is often of uncertain term and of different types. An unmatched position potentially enhances profitability but can also increase the risk of loss.

142

Total

Page 60

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

Liquidity risk (cont’d) The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interestbearing liabilities as they mature, are important factors in assessing the liquidity of the group and its exposure to changes in interest rates and exchange rates. Financial liabilities and assets held for managing liquidity risk The tables below present the undiscounted cash flows receivables and payable (both interest and principal) of the group and the credit union’s financial liabilities based on contractual repayment obligations: The Group 2025 20

Financial Assets Cash in hand at bank Accounts receivable Liquid assets Resale agreements Financial investments Loans to members

On Demand $’000

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Total Contractual cash flows $’000

Carrying amount $’000

375,634 1,599,931 141,737 -

202,604 528,831 336,935 551,903

952,475 459,446 19,957

391,842 323,497

929,548 10,479,380

6,147,216

375,634 202,604 1,599,931 1,481,306 2,259,508 17,521,953

360,189 202,604 1,599,931 1,471,097 2,228,747 15,958,833

Total financial assets

2,117,302

1,620,273

1,431,878

715,339

11,408,928

6,147,216

23,440,936

21,821,401

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

6,150,793

3,292,699

1,008,732

2,186,260

44,832

12,683,316

12,439,506

5,601,692 -

1,939 1,263 563,289 4,529

2,876 2,526 8,868

38,672 11,367 39,906

256,775 15,612 159,623

5,901,954 30,768 563,289 212,926

5,843,545 21,407 563,289 194,065

Total financial liabilities

11,752,485

3,863,719

1,023,002

2,276,205

476,842

19,392,253

19,061,812

Gap

( 9,635,183) ( 2,243,446)

408,876

( 1,560,866)

10,932,086

6,147,216

4,048,683

Cumulative Gap

( 9,635,183) (11,878,629) (11,469,753)

(13,030,619)

( 2,098,533)

4,048,683

--******************************

143

Page 61

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

Liquidity risk (cont’d) Financial liabilities and assets held for managing liquidity risk (cont’d) The tables below present the undiscounted cash flows receivables and payable (both interest and principal) of the group and the credit union’s financial liabilities based on contractual repayment obligations (cont’d): The Group 2024

Financial Assets Cash in hand at bank Accounts receivable Liquid assets Resale agreements Financial investments Loans to members

On Demand $’000

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Total contractual cash flows $’000

281,639 1,411,430 234,620 -

203,683 326,352 326,730 358,581

229,633 579,738 17,571

420,123 303,589

513,404 11,866,991

72,195 9,514,861

281,639 203,683 1,411,430 555,985 2,146,810 22,061,593

281,639 203,683 1,411,430 573,701 2,093,981 15,077,552

Total financial assets

1,927,689

1,215,346

826,942

723,712

12,380,395

9,587,056

26,661,140

19,641,986

Carrying amount $’000

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

5,877,986

2,497,749

859,212

2,050,697

52,489

11,338,133

11,119,087

4,694,786 -

396,652 1,067 490,523 5,708

2,876 2,127 11,415

38,672 9,098 51,369

256,775 25,267 199,767

5,389,761 37,559 490,523 268,259

5,378,053 33,574 490,523 248,163

Total financial liabilities

10,572,772

3,391,699

875,630

2,149,836

534,298

17,524,235

17,269,400

Gap

( 8,645,083) ( 2,176,353) (

48,688)

( 1,426,124)

11,846,097

9,587,056

9,136,905

Cumulative Gap

( 8,645,083) (10,821,436) (10,870,124)

(12,296,248)

450,151)

9,136,905

144

(

Page 62

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

20 Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Total contractual cash flows $’000

184,505 528,831 336,935 551,903

916,073 454,356 19,734

391,323 69,544 323,497

818,351 10,064,616

6,136,092

170,056 184,505 1,599,931 1,444,904 2,142,701 69,544 17,095,842

170,056 184,505 1,599,931 1,435,056 2,111,941 69,544 15,958,833

1,911,723

1,602,174

1,390,163

784,364

10,882,967

6,136,092

22,707,483

21,529,866

On Demand $’000

Financial Assets Cash in hand at bank 170,056 Accounts receivable Liquid assets 1,599,931 Resale agreements Financial investments 141,736 Due from subsidiary Loans to members Total financial assets

Carrying amount $’000

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

6,150,793

3,292,699

1,008,732

2,186,260

44,832

12,683,316

12,439,506

5,601,692 -

1,939 1,263 400,963 4,529

3,889 2,526 8,868

35,568 11,367 39,906

214,459 15,612 159,623

5,857,547 30,768 400,963 212,926

5,843,545 21,407 400,963 194,065

Total financial liabilities

11,752,485

3,701,393

1,024,015

2,273,101

434,526

19,185,520

18,899,486

Gap

( 9,840,762)

( 2,099,219)

366,148

( 1,488,737)

10,448,441

6,136,092

3,521,963

Cumulative Gap

( 9,840,762)

(11,939,981) (11,573,833)

(13,062,570)

( 2,614,129)

3,521,963

145

Page 63

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

20 On Demand $’000

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Total contractual cash flows $’000

Financial Assets Cash in hand at bank Accounts receivable Liquid assets Resale agreements Financial investments Due from subsidiary Loans to members

185,501 1,411,430 145,530 -

199,815 326,352 326,730 358,581

229,633 572,301 17,571

411,868 45,980 303,589

435,411 11,866,991

72,195 9,514,861

185,501 199,815 1,411,430 555,985 1,964,035 45,980 22,061,593

185,501 199,815 1,411,430 552,707 1,911,206 45,980 15,077,552

Total financial assets

1,742,461

1,211,478

819,505

761,437

12,302,402

9,587,056

26,424,339

19,384,191

Carrying amount $’000

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

5,877,986

2,497,749

859,212

2,050,697

52,489

11,338,133

11,119,087

4,694,786 -

396,652 1,067 414,160 5,708

2,876 2,127 11,415

38,672 9,098 51,369

256,775 25,267 199,767

5,389,760 37,560 414,160 268,259

5,378,053 33,574 414,160 248,163

Total financial liabilities

10,572,772

3,315,336

875,630

2,149,836

534,298

17,447,872

17,193,037

Gap

( 8,830,311) ( 2,103,858) (

56,125)

( 1,388,399)

11,768,104

9,587,056

8,976,467

Cumulative Gap

( 8,830,311) (10,934,169) (10,990,294)

(12,378,693)

(

8,976,467

610,589)

Assets available to meet all of the liabilities and to cover outstanding loan commitments include cash, deposits, short-term investments, and resale agreements. In the normal course of business, a proportion of voluntary shares and members’ deposits contractually repayable within one year will be extended.

146

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 64

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (b)

Liquidity risk (cont’d) The members’ voluntary shares are contractually on call except in cases where these balances are held as security for loan facilities. Items not carried on the statement of financial position At 31 December 2025, the group’s commitment to extend credit to its members, in respect of loans approved but not yet disbursed, amounted to $19,250,000 (2024: $49,935,000).

(c)

Market risk The group takes on exposure to market risk, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks mainly arise from changes in foreign currency exchange rates, interest rates and other prices. Market risk is monitored by the Finance Committee which carries out extensive research and monitors the price movement of financial assets on the local and international markets. Market risk exposures are evaluated using sensitivity analysis. Currency risk Currency or foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates and arises mainly from the credit union’s cambio operations. The group has no significant exposure to currency risk as less than ½% of net financial assets is maintained in foreign currencies at any given time during the year. The Treasury Committee has approved limits on the level of exposure by currency and in aggregate. These limits may vary from time to time as determined by the Treasury Committee. Interest rate risk Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates, and arises mainly from investments, loans and deposits. Floating rate instruments expose the group to cash flow interest rate risk, whereas fixed interest rate instruments expose the group to fair value interest rate risk.

147

Page 65

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Market risk (cont’d) Interest rate risk (cont’d) The group’s interest rate risk policy requires it to manage interest rate risk by maintaining an appropriate mix of fixed and variable rate instruments as determined by the Finance committee. The policy also requires it to manage the maturities of interest bearing financial assets and liabilities. The Board sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is monitored daily by the Treasury department. The following tables summarise the group and credit union’s exposure to interest rate risk. They include the group and credit union’s financial instruments at carrying amounts, categorized by the earlier of contractual repricing or maturity dates. The Group 2025

148

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Non-interest bearing $’000

Carrying amount $’000

Financial Assets Cash in hand at bank Accounts receivable Liquid assets Resale agreements Financial investments Loan to members

1,599,931 563,516 330,307 545,447

907,581 433,158 19,342

306,514 271,097

807,381 9,268,456

19,114 5,854,491

360,189 202,604 332,273 -

360,189 202,604 1,599,931 1,471,097 2,228,747 15,958,833

Total financial assets

3,039,201

1,360,081

577,611

10,075,837

5,873,605

895,066

21,821,401

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

8,651,496

1,143,244

2,380,661

264,105

12,439,506

5,843,545 1,224 3,828

2,448 7,587

9,792 32,364

7,943 150,286

563,289 -

5,843,545 21,407 563,289 194,065

Total financial liabilities

14,500,093

1,153,279

2,422,817

422,334

563,289

19,061,812

Gap

(11,460,892)

206,802

( 1,845,206)

9,653,503

5,873,605

331,777

2,759,589

Cumulative Gap

(11,460,892)

(11,254,090)

(13,099,296)

( 3,445,793)

2,427,812

2,759,589

5555544FFPKMN//

DSDF FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 66

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Market risk (cont’d) Interest rate risk (cont’d) The following tables summarise the group and credit union’s exposure to interest rate risk. They include the group and credit union’s financial instruments at carrying amounts, categorized by the earlier of contractual repricing or maturity dates (cont’d). The Group 2024

Financial Assets Cash in hand at bank Accounts receivable Liquid assets Resale agreements Financial investments Loan to members

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Non-interest bearing $’000

Total $’000

1,411,430 346,271 324,301 354,205

227,430 293,097 16,879

444,417 253,424

698,366 8,543,986

5,909,058

281,639 203,683 330,800 -

281,639 203,683 1,411,430 573,701 2,093,981 15,077,552

Total financial assets

2,436,207

537,406

697,841

9,242,352

5,909,058

816,122

19,641,986

8,223,561

842,613

2,011,080

41,833

11,119,087

5,378,053 908 5,093

1,815 9,620

8,169 39,385

22,682 194,065

490,523 -

5,378,053 33,574 490,523 248,163

Total financial liabilities

13,607,615

854,048

2,058,634

258,580

490,523

17,269,400

Gap

(11,171,408) (

316,642)

( 1,360,793)

8,983,772

5,909,058

328,599

2,372,586

Cumulative Gap

(11,171,408) (11,488,050)

(12,848,843)

(3,865,071)

2,053,987

2,372,586

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

149

Page 67

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

150

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Non-interest bearing $’000

Total $’000

Financial Assets Liquid assets Resale agreements Financial investments Loans after provision Due from subsidiary Cash in hand and at bank Accounts receivable

1,599,931 527,475 330,307 545,447 -

907,581 433,158 19,342 -

300,951 271,097 -

785,455 9,268,456 -

5,854,491 -

262,070 69,544 170,056 184,505

1,599,931 1,435,056 2,111,941 15,958,833 69,544 170,056 184,505

Total financial assets

3,003,160

1,360,081

572,048

10,053,911

5,854,491

686,175

21,529,866

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

8,651,496

1,143,244

2,380,661

264,105

12,439,506

5,843,545 1,224 3,828

2,448 7,587

9,792 32,364

7,943 150,286

400,963 -

5,843,545 21,407 400,963 194,065

Total financial liabilities

14,500,093

1,153,279

2,422,817

422,334

400,963

18,899,486

Gap

(11,496,933)

206,802

( 1,850,769)

9,631,577

5,854,491

285,212

2,630,380

Cumulative Gap

(11,496,933) (11,290,131)

(13,140,900)

( 3,509,323)

2,345,168

2,630,380

Page 68

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Within 1 Month $’000

2 to 3 Months $’000

4 to 12 Months $’000

1 to 5 Years $’000

Over 5 Years $’000

Non-interest bearing $’000

Total $’000

Financial Assets Liquid assets Resale agreements Financial investments Loan after provision Due from subsidiary Cash in hand and at bank Accounts receivable

1,411,430 325,278 324,301 354,205 -

228,429 285,660 16,879 -

436,162 253,424 -

620,373 8,543,986 -

5,909,058 -

244,710 45,980 185,501 199,815

1,411,430 552,707 1,911,206 15,077,552 45,980 185,501 199,815

Total financial assets

2,415,214

530,968

689,586

9,164,359

5,909,058

676,006

19,384,191

8,223,561

842,613

2,011,080

41,833

11,119,087

5,378,053 908 5,093

1,815 9,620

8,169 39,385

22,682 194,065

414,160 -

5,378,053 33,574 414,160 248,163

Total financial liabilities

13,607,615

854,048

2,058,634

258,580

414,160

17,193,037

Gap

(11,192,401) (

323,080)

( 1,369,048)

8,905,779

5,909,058

261,846

2,191,154

Cumulative Gap

(11,192,401) (11,516,481)

(12,885,529)

(3,979,750)

1,930,308

2,191,154

Financial Liabilities Members’ deposits Members’ voluntary shares Lease liabilities Accounts payable External credits

151

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act)

Page 69

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Market risk (cont’d) Interest rate risk (cont’d) Interest rate sensitivity The following table indicates the sensitivity to a reasonably possible change in interest rates on the group’s surplus and other components of equity, with all other variables held constant. The sensitivity of the surplus is the effect of the assumed changes in interest rates on net surplus based on the floating rate financial assets and financial liabilities. The group had no floating rate financial assets or liabilities as at the year end. The sensitivity of other components of equity is calculated by revaluing fixed-rate financial assets measured at fair value through other comprehensive income for the effects of the assumed changes in interest rates. The correlation of variables will have a significant effect in determining the ultimate impact on market risk, but to demonstrate the impact due to changes in each variable, variables had to be tested on an individual basis. It should be noted that movements in these variables are non-linear. The Group 2025 2024 Effect on Effect on Other Other Comprehensive Comprehensive Income Income $’000 $’000 Change in basis points: 25 basis points (2024: 25 basis points) 50 basis points (2024: 50 basis points)

625 (622)

1,821 (1,827)

The Credit Union 2025 2024 Effect on Effect on Other Other Comprehensive Comprehensive Income Income $’000 $’000 Change in basis points: 25 basis points (2024: 25 basis points) 50 basis points (2024: 50 basis points)

152

522 (519)

1,001 (1,009)

Page 70

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Market risk (cont’d) Interest rate sensitivity (cont’d) The Group 2025 Immediately Within 3 rate sensitive months % %

3 to 12 months %

1 to 5 years %

Over 5 years %

Weighted average %

Earning assets Resale agreements Loans to members Financial investments

5.88 14.40 7.79

5.88 12.33 6.35

26.13 8.15

17.18 9.18

9.62 9.18

5.88 14.40 7.79

Interest bearing liabilities Members’ deposits External credits Voluntary shares

2.00 3.87 0.25

2.00 4.00 -

2.00 3.87 0.25

The Group 2024 Immediately Within 3 rate sensitive months % %

3 to 12 months %

1 to 5 years %

Over 5 years %

Weighted average %

Earning assets Resale agreements Loans to members Financial investments

6.83 15.00 8.29

6.83 13.58 8.26

26.86 8.62

18.62 8.03

9.48 -

6.83 15.00 8.29

Interest bearing liabilities Members’ deposits External credits Voluntary shares

2.00 4.00 0.25

2.00 4.00 -

2.00 4.00 0.25

153

Page 71

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED ( A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): Financial risk factors (cont’d) (c)

Market risk (cont’d) Interest rate sensitivity (cont’d)

The Credit Union 2025

Immediately Within 3 rate sensitive months % %

3 to 12 months %

1 to 5 years %

Over 5 years %

Weighted average %

Earning assets Resale agreements Loans to members Financial investments

5.88 14.40 7.79

5.88 12.33 6.35

26.13 8.15

17.18 9.18

9.62 -

5.88 14.40 7.79

Interest bearing liabilities Members’ deposits External credits Voluntary shares

2.00 3.87 0.25

2.00 4.00 -

2.00 3.87 0.25

The Credit Union 2024 Immediately Within 3 rate sensitive months % %

3 to 12 months %

1 to 5 years %

Over 5 years %

Weighted average %

Earning assets Resale agreements Loans to members Financial investments

6.93 15.00 8.26

6.93 13.58 8.26

26.86 8.62

18.62 7.86

9.48 -

6.93 15.00 8.26

Interest bearing liabilities Members’ deposits External credits Voluntary shares

2.00 4.00 0.25

2.00 4.00 -

4.00 -

2.00 4.00 0.25

¹Yields are based on book values, net of allowances for credit losses and contractual interest rates. ²Yields are based on contractual interest rates. Other price risk Price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices (other than those arising from currency risk and interest rate risk), whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market .

154

((

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 72

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (c)

Market risk (cont’d) Equity price risk Equity price risk arises from equity securities held by the group as part of its investment portfolio. Management monitors the mix of debt and equity securities in its investment portfolio to maximise returns based on market performance. The primary goal of the group’s investment strategy is to maximise return on investment while minimising risks. The group’s equity portfolio consists of equities listed on the Jamaica Stock Exchange. A 1.5% increase (2024: 6%) in quoted bid prices at the reporting date would result in an increase in profit by $2,808,535 (2024: $13,058,160) for the group and $2,126,050 (2024: $8,731,810) for the credit union. A 1% (2024: 2%) decrease in bid price at the reporting date would decrease profit by $1,912,267 (2024: $4,352,720) for the group and $1,417,367 (2024: $2,910,603) for the credit union. Unquoted equities are considered insignificant for equity price risk.

(d)

Capital management The group’s objectives when managing institutional capital, which is a broader concept than the ‘equity’ on the face of the statement of financial position, are: Credit Union (i) To comply with the capital requirements set by the Jamaica Co-operative Credit Union League and the Bank of Jamaica for the financial sector in which the credit union operates; (ii) To safeguard the credit union’s ability to continue as a going concern so that it can continue to provide returns and benefits for members; (iii) To maintain a ratio of 8% permanent capital to total assets; (iv) To increase the permanent share capital as the main focus of building institutional capital; and (v) To maintain a strong capital base to support the development of its business through the allocation of 20% of net surplus to institutional capital annually.

155

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (d)

Capital management (cont’d) FHC Investments Limited

(i) To comply with the capital requirements set by the Financial Services Commission; (ii) To maintain a capital to total assets ratio of 6% or greater; (iii) To maintain a capital base to risk weighted assets ratio of 10% or greater. Capital adequacy and the use of regulatory capital are monitored by the group’s management, based on the guidelines in its Capital Asset Management Policy. The League currently requires member credit unions to maintain a minimum level of institutional capital at 8% of total assets. The proposed Bank of Jamaica regulations require the League to ensure that member institutions: (i)

Hold a minimum level of the regulatory capital of 6% of total assets; and

(ii)

Maintain a ratio of total regulatory capital to risk-weighted assets at or above 10%.

The table below summarises the group’s composition of regulatory capital and capital ratios at the reporting date. During the year, the group complied with all externally imposed capital requirements: The Credit Union 0m4hhhhhtttttheh 2025 2024 Actual Required Actual Required $’000 $’000 $’000 $’000

156

Total regulatory capital

2,652,080

Risk- weighted assets: Total risk weighted assets

17,371,076

1,779,123

2,318,952

1,606,534

16,463,081

Risk based capital adequacy Ratio

14.98%

10.00%

12.56%

10.00%

Regulatory capital to total assets ratio

11.93%

8.00%

11.55%

8.00%

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 74

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (d)

Capital management (cont’d) In determining the credit union's capital base (institutional capital), the institutional capital of acquired credit unions as at the date of merger are included. Churches Credit Union Limited (Churches) and GSB Credit Union Limited (GSB) were merged to form First Heritage Credit Union Limited (the credit union) on 1 August 2012 and GSB was determined to be the acquiree. St. Thomas Credit Union (STCCU) was merged with the credit union as at 1 March 2015. As at the date of amalgamation or transfer of engagement, the institutional capital of the acquired entities included the following balances:

Statutory reserve Retained earnings reserve

GSB $’000

STCCU $’000

189,533 154,513

70,714 - .

344,046

70,714

FHC Investments Limited 2025 2024 Actual Required Actual Required $’000 $’000 $’000 $’000 Total regulatory capital

150,620

25,000

202,684

Total assets

382,487

332,762

Total risk weighted assets

259,699

238,620

25,000

Capital to total assets

39%

61%

Capital base to risk weighted assets

58%

10%

85%

10%

157

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 75

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments are grouped into levels 1 to 3 based on the degree to which the fair value inputs are observable, as follows:

•

Level 1: Fair values are quoted prices (unadjusted) in active markets for identical instruments.

•

Level 2: Fair value measurements are those derived from valuation techniques based on inputs other than quoted market prices included within Level 1, that are observable for the instrument, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

•

Level 3: Fair value measurements are those derived from valuation techniques using significant inputs for the instrument that are not based on observable market data (unobservable inputs).

There were no transfers between levels during the year.

158

( (

Page 76

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Carrying amount

Amortised cost FVTPL J$’000 J$’000 Financial assets measured at fair value: Government of Jamaica securities Corporate bonds Quoted equities Unit Trust Preference Shares Jamaica Co-operative Credit Union League Limited Credit Union Fund Management Quality Network Co-operative Ltd Centralised Strategic Services Ltd Jamaica Co-operative Insurance Agency Ltd

Fair value

FVTPL $’000

Total J$’000

Level 1 J$’000

Level 2 J$’000

Level 3 J$’000

Total J$’000

216,948 31,459 192,593 23,801 305,997

192,593 -

216,948 31,459 23,801 305,997

216,948 31,459 192,593 23,801 305,997

216,948 31,459 -

192,593 23,801 305,997

17,616 14,794 33

34,703 -

34,703 17,616 14,794 33

1,025

281,875

557,094

838,969

192,593

573,205

68,171

833,969

12,142,292 114,926 430,548 839,963 -

12,142,292 114,926 430,548 839,963

Financial assets and liabilities not measured at fair value for which fair values are disclosed Assets Loans to members 15,958,833 Deferred shares 123,276 Corporate bonds 435,476 Fixed deposits 839,073 Liabilities Members’ deposits 12,439,506 Members’ voluntary 5,843,545 External credits 194,065

15,958,833 123,276 435,476 839,073

12,439,506. 5,843,545 194,065

35,833,774

12,389,879 5,783,528 129,552

1,385,437 30,445,251

31,830,688

159

Page 77

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Financial assets measured at fair value: Government of Jamaica securities Corporate bonds Quoted equities Unit Trust Preference Shares Jamaica Co-operative Credit Union League Limited Credit Union Fund Management Quality Network Co-operative Ltd Centralised Strategic Services Ltd Jamaica Co-operative Insurance Agency Ltd

Fair value

Total J$’000

Level 1 J$’000

Level 2 J$’000

Level 3 J$’000

Total J$’000

251,754 74,314 -

217,636 21,906 310,631

251,754 74,314 217,636 21,906 310,631

217,636 -

251,754 74,314 21,906 310,631

251,754 74,314 217,636 21,906 310,631

17,073

34,715 -

34,715 17,073

19,491

880

363,548

584,888

948,436

217,636

658,605

72,195

948,436

Financial assets and liabilities not measured at fair value for which fair values are disclosed Assets Loans to members 15,077,552 Deferred shares 118,482 Corporate bonds 409,393 Fixed deposits 625,634 Liabilities Members’ deposits 11,119,087 Members’ voluntary 5,378,053 . External credits 248,163

15,077,552 118,482 409,393 625,634

11,512,689 123,191 414,866 625,414 -

11,512,689 123,191 414,866 625,414

11,119,087 5,378,053 248,163

32,976,364

11,071,068 5,320,084 199,462

1,163,471 28,103,303

29,266,774

((

160

Page 78

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments (cont’d) Accounting classifications and fair values (cont’d) The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. The tables do not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value (cont’d). The Credit Union 2025 Carrying amount Amortised cost FVTPL FVTPL J$’000 J$’000 $’000 Financial assets measured at fair value: Government of Jamaica securities Corporate bonds Quoted equities Unit Trust Preference Shares Jamaica Co-operative Credit Union League Limited Credit Union Fund Management Quality Network Co-operative Ltd Centralised Strategic Services Ltd Jamaica Co-operative Insurance Agency Ltd

Financial assets and liabilities not measured at fair value for which fair values are disclosed Assets Loans to members Deferred shares Corporate bonds Fixed deposits Liabilities Members’ deposits Members’ voluntary External credits

Fair value

Total J$’000 .

Level 1 J$’000

Level 2 J$’000

Level 3 J$’000

Total J$’000

207,321 -

141,737 4,501 300,951

207,321 141,737 4,501 300,951

141,737 -

207,321 4,501 300,951

207,321 141,737 4,501 300,951

17,616 14,794 33

34,703 -

34,703 17,616 14,794 33

1,025

240,789

481,892

722,681

141,737

512,773

68,171

722,681

15,958,833 123,276 435,476 838,556

12,142,292 114,926 430,548 839,963 -

12,142,292 114,926 430,548 839,963

12,439,506 5,843,545 194,065

35,833,257

12,389,879 5,783,528 129,552

1,385,437 30,445,251

31,830,688

161

Page 79

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Carrying amount Amortised cost FVTPL FVTPL J$’000 J$’000 $’000 Financial assets measured at fair value: Government of Jamaica securities Quoted equities Unit trust Preference shares Jamaica Co-operative Credit Union League Limited Credit Union Fund Management Quality Network Co-operative Ltd Centralised Strategic Services Ltd Jamaica Co-operative Insurance Agency Ltd

162

Fair value

Total J$’000

Level 1 J$’000

Level 2 J$’000

Level 3 J$’000

Total J$’000

242,575 -

145,530 4,922 300,951

242,575 145,530 4,922 300,951

145,530 -

242,575 4,922 300,951

242,575 145,530 4,922 300,951

17,073 19,491 36

34,715 -

34,715 17,073 19,491 36

880

280,055

486,118

766,173

145,530

548,448

72,195

766,173

15,077,552 118,482 409,393 625,122

11,512,689 123,191 414,866 625,414 -

11,512,689 123,191 414,866 625,414

11,119,087 5,378,053. 248,163

11,119,087 5,378,053 248,163

32,975,852

11,071,068 . 5,320,084 199,462

11,071,068 5,320,084 199,462

1,163,471 28,103,303

29,266,774

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 80

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments (cont’d) Accounting classifications and fair values (cont’d)

•

The fair value of liquid assets, resale agreements, cash and bank balances, accounts receivable and other liabilities maturing within one year is assumed to approximate their carrying amount. This assumption is applied to liquid assets and the short-term elements of all other financial assets and liabilities.

•

The carrying values of voluntary shares, members’ deposits and external credits approximates their fair values, as these liabilities are carried at amortised cost reflecting their contractual obligations and the interest rates are reflective of current market rates for similar transactions.

Valuation techniques and inputs The valuation techniques used in measuring fair value in the level 2 and level 3 hierarchy are detailed below. Significant unobservable inputs used in the Net Asset Valuation (NAV) method for unquoted equities include assets and liabilities that do not have a quoted market price. Unquoted equities represent holdings in entities in the financial sector providing services mainly to credit unions. As these are financial entities, the NAV is considered an appropriate basis to fair value these equities.

163

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 81

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments (cont’d) Valuation techniques and inputs (cont’d) The valuation techniques used in measuring level 2 and level 3 fair value are as follows: Type

Government of Jamaica securities

Valuation technique

• •

Corporate bonds

164

•

Obtain bid yield from pricing services (which uses market-supplied indicative bids). Using the yield, determine price using accepted formula.

•

Obtain prices quoted by the brokers and portfolio managers. Apply prices to estimate fair value.

Units in unit trusts

• •

Obtain prices quoted by unit trust managers. Apply price to estimate fair value.

Unquoted equities and money market funds Loans

•

Net asset valuation method.

•

Discounted Cashflows

Deferred shares

•

Discounted Cashflows

Fixed deposits

•

Discounted Cashflows

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 82

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 4.

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments (cont’d) Valuation techniques and inputs (cont’d) The valuation techniques used in measuring level 2 and level 3 fair value are as follows (cont’d): Type

Valuation technique

Jamaica Co-operative Credit Union League limited mortgage funds

• Discounted Cashflows

Members deposit

• Discounted Cashflows

Members voluntary shares

• Discounted Cashflows

External credits

• Discounted Cashflow

Reconciliation of Level 3 fair values The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values. in thousands of JMD Balance as at 31 December 2023 Loss included in 'finance costs' Gain included in OCI - Net change in fair value (unrealised) Balance as at 31 December 2024

Note

Equity securities 79,829 ( 7,634) 72,195

Loss included in 'finance costs' Gain included in OCI - Net change in fair value (unrealised) (4,024) Balance as at 31 December 2025

68,171

165

(( Page 83

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 4.

31 DECEMBER 2025

FINANCIAL RISK MANAGEMENT (CONT’D): (e)

Fair values of financial instruments (cont’d) Level 3 fair value measurement Unquoted equities – fair value through OCI These shares represent investments that the credit union intends to hold long-term for strategic purposes and are not actively traded. The fair value of these assets has been estimated taking into consideration the net asset value per share based on the most recently published financial statements. Significant unobservable inputs used in the Net Asset Valuation (NAV) method for unquoted equities include assets and liabilities that do not have a quoted market price. These assets are categorised at Level 3 in the fair value hierarchy. Financial assets at amortised cost Financial assets – amortised cost comprise of investments and securities where cash flows arise on specified contractual dates, and the underlying terms can range anywhere from short to long term. They are categorised across Level 2 and Level 3 in the fair value hierarchy. Fair value is estimated utilising valuation models such as discounted cash flow techniques using current market rates as at the reporting date, and observable market data on capital pricing for similar instruments.

INTEREST EXPENSE ON EXTERNAL CREDITS:

Development Bank of Jamaica Limited

166

The Group and The Credit Union 2025 2024 $’000 $’000 8,730

11,833

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 84

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 6.

FEES AND COMMISSION INCOME:

Late payment and other fees Accounts maintenance Family indemnity plan Life saving and loan protection Management fees Standing orders Statements and credit information Other

OTHER INCOME:

Foreign exchange gains Rental Trading gains Other

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

42,122 67,187 48,561 12,652 57,330 8,344 1,225 7,866

36,953 63,266 44,384 12,480 53,197 8,211 1,351 6,432

42,122 67,187 48,561 12,652 5,292 8,344 1,225 11,832

36,953 63,266 44,384 12,480 5,040 8,211 1,351 7,678

245,287

226,274

197,215

179,363

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

4,680 4,908 4,565 5,185

3,839 5,197 7,849 13,197.

7,840 1,894

7,828 9,742

19,338

30,082

9,734

17,570

167

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 85

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 8.

OPERATING EXPENSES:

Depreciation – Property, plant and Equipment (note 17) Depreciation – Right-of-use assets (note 18) Amortisation of intangible assets (note 19) Audit fees Data processing Insurance Legal and professional fees Marketing and promotion Operating and premises equipment Other administration Repair and Maintenance Representation and affiliation Directors fees Security Stationery and printing supplies Staff costs (note 9) Telecommunications and postage

STAFF COSTS:

Salaries and wages Statutory contributions Employee benefits [ note 20(f)] Other staff benefits

168

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

49,026

52,072

49,010

52,049

11,020

10,919

11,020

10,919

9,015 18,493 30,110 39,032 99,329 98,657. 83,856 75,325. 47,703 39,377 38,861 51,538 49,727 54,943 116,534 97,464 47,369 27,309 82,583 79,330 5,882 5,713 77,325 83,134 24,819 21,957 1,202,947 1,111,113 26,575 28,376

9,015 25,000 98,916 81,912 46,958 34,870 49,727 99,076 47,369 82,583 4,839 76,940 24,097 1,114,694 26,512

18,493 34,000 97,878 73,650 38,877 45,250 52,358 85,722 27,309 79,330 4,812 82,928 21,235 1,025,010 28,278

2,002,681

1,882,538

1,778,098

1,894,752

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

798,368 113,794 14,306 276,479

757,265 110,131 4,678 239,039.

730,876 105,384 14,306 264,128

691,892 102,663 4,678 225,777

1,202,947

1,111,113

1,114,694

1,025,010

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 86

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 10.

11.

HONORARIA AND DONATION EXPENSES: (a)

Honoraria represents payments made to volunteers (members) of the Co-operative for their contributions made in furtherance of the Co-operative’s activities. These amounts are determined by members at their Annual General Meetings and are recognised as an expense when the honoraria is approved.

(b)

Donations are determined by members at Annual General Meetings and are recognised as an expense when the donations are approved.

TAXATION: (a)

Taxation is computed on the operating results of the subsidiary for the year, adjusted for taxation purposes and comprises: The Group. 2025 2024 $’000 $’000 Current year income tax Deferred income tax (note 21)

(b) Reconciliation of applicable tax charge to effective tax charge: A charge for income tax arises on the profits of the subsidiary. The credit union is exempt from income tax under Section 59(1) of the Co-operative Societies Act and Section 12 of the Income Tax Act. The actual tax on operating results before taxation differs from the theoretical amount that would arise using the applicable tax rate of 33 1/3% as follows: The Group 2025 2024 $’000 $’000 Surplus before taxation

339,197

313,409

Tax calculated at a tax rate of 33 1/3% Surplus of credit union and other Income not subject to tax Other gains and deductibles not subject to tax Tax losses

113,066

104,469

(131,061) (118,113) 703 3,221 17,292 10,423 -

(c)

Subject to agreement with the Commissioner General, Tax Administration Jamaica, losses available for offset against future taxable surplus of the subsidiary amounted to approximately $186,604,117 (2024: $125,976,299). Tax losses may be carried forward indefinitely. However, the maximum amount that can be utilised in any one year is restricted to 50% of the taxable surplus for that year.

169

((Page 87

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 12.

CASH AND CASH EQUIVALENTS: (a)

(b)

EARNING LIQUID ASSETS:

The Group and The Credit Union . 2025 2024 $’000 $’000

Demand deposit (i) Liquidity reserves (ii)

506,038 1,096,255

429,222 984,311

Impairment provision on investments

1,602,293 ( 2,362)

1,413,533 ( 2,103)

1,599,931

1,411,430

(i)

Demand deposits, which mature within 12 months of the end of the financial year, are cash management call accounts which are maintained with the League at 2% of savings deposits in accordance with rules of the league.

(ii)

The rules of the League stipulates that the credit union must invest a minimum of 6% of members’ savings deposits in liquid reserves and is available for use after notifying the league

NON-EARNING LIQUID ASSETS: Cash and cash equivalents The Group 2025 2024 $’000 $’000 Cash balances Current account balances

13.

RESALE AGREEMENTS:

Gross amount Accrued interest Impairment provision on investments at amortised cost

170

The Credit Union 2025 2024 $’000 $’000

63,549 296,640

75,778 205,861

63,549 106,507

75,778 109,723

360,189

281,639

170,056

185,501

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

1,458,276 12,983

568,390 5,333

1,422,390 12,828

547,457 5,272

1,471,259

573,723

1,435,218

552,729

(

162)

1,471,097

22) .

573,701

162)

1,435,056

22)

552,707

((Page 88

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 13.

RESALE AGREEMENTS (CONT’D): The group enters into resale agreements collateralised by Government of Jamaica securities. These agreements may result in credit exposure to the event that the counterparty to the transaction is unable to fulfil its collateral obligations. At 31 December 2025, fair value of securities totalling $1,480,000,000 (2024: $577,540,296) for the group and for the credit union, representing Government of Jamaica debt securities, were held as collateral for resale agreements. All resale agreements mature within 3 months from the end of the financial year and are for short-term investment.

14.

FINANCIAL INVESTMENTS:

The Group 2025 2024 $’000 $’000

Investment securities at fair value through OCI: Government of Jamaica securities (a) 216,948 Corporate bonds 31,459 Unquoted equities: Central Strategic services Limited 33 Jamaica Co-operative Insurance Agency Limited 1,025 Credit Union Fund Management Company Limited 17,616 Quality Network Co-operative Limited (‘QNET”) (b) 14,794

The Credit Union 2025 2024 $’000 $’000

251,754 74,314

207,321 -

242,575 -

880.

1,025

880

17,073

17,616

17,073

19,491

14,794

19,491

281,875

363,548

240,789

280,055

123,276 435,476 839,073

118,482 409,393 625,634.

123,276 435,476 838,556

118,482 409,393 625,122

1,397,825 1,153,509

1,397,308

1,152,997

Impairment allowance on investments At amortised cost

(

Total carried forward to page 89

1,671,653

Investment securities at amortised cost: Deferred shares Corporate bonds Fixed deposit

8,047) (

7,964)

1,509,093

8,047) (

1,630,050

7,964)

1,425,088

171

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 89

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 14.

FINANCIAL INVESTMENTS (CONT’D): The Group 2025 2024 $’000 $’000 Total brought forward from page 88

The Credit Union 2025 2024 $’000 $’000

1,671,653

1,509,093

1,630,050

1,425,088

305,997

310,631

300,951

34,703 23,801 192,593

34,715 21,906 217,636

34,703 4,501 141,737

34,715 4,922 145,530

557,094

584,888.

481,892

486,118

2,228,747 2,093,981.

2,111,942

1,911,206

1,070,025 1,054,376 827,092 697,048 331,630 342,557

1,064,416 785,456 262,070

1,046,123 620,373 244,710

2,228,747

2,111,942

1,911,206

Investment securities at fair value through profit or loss Preference shares Jamaica Co-operative Credit Union League (c) Unit trust funds Quoted equities

Maturity: Due within 1 year Due after 1 year No set maturity

172

2,093,981

(a)

Government of Jamaica securities include interest receivable amounting to $5,812,822 (2024: $6,002,431) for the group and $5,812,822 (2024: $6,002,431) for the credit union.

(b)

The QNET investment represents a 11.16% ownership investment by the credit union. QNET provides information services to participating credit unions.

(c)

The rules of the League stipulate that a minimum of 1,000,000 shares must be held with the League for the credit union to retain membership status.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 90

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 15.

LOAN TO MEMBERS: (a)

Movement in loans to members during the year:

Loans to members Less: impairment loss allowance

The Group and The Credit Union . 2025 2024 $’000 $’000 (

16,764,371 669,620) 16,094,751

Less loan fees: At the beginning of the year Additions during the year Amortisation

(

15,832,662 641,788) 15,190,874

( (

201,281) 153,561) 121,785

( (

167,753) 149,201) 115,673

(

233,057)

(

201,281)

Loan interest receivable

15,861,694 97,139

14,989,593 87,959

Balance at end of year

15,958,833

15,077,552

Maturity: Due within 1 year Due after 1 year

275,622 16,488,749

270,376 15,562,286

16,764,371

15,832,662

The Group and The Credit Union 2025 . Stage 1 Stage 2 Stage 3 Total $’000 $’000 $’000 $’000 Balance at the beginning for year Loans granted Interest Loan fees Transfer Less: Repayments Write offs Loss allowance

13,803,173 5,837,985 9,180 ( 31,775) ( 444,226) 19,174,337

333,290 44,469 377,759

941,089 399,757 1,340,846

( 4,371,807) ( 206,392)

20,831 ( 34,386)

( 74,613) ( 4,425,589) ( 240,344) ( 240,344) ( 27,398) ( 268,176)

14,596,138

364,204

998,491

15,077,552 5,837,985 9,180 ( 31,775) 20,892,942

15,958,833

173

Page 91

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 15.

LOAN TO MEMBERS (CONT’D): (a)

Movement in loans to members during the year (cont’d):

Stage 1 $’000 Balance at the beginning for year Loans granted Interest Loan fees Transfer Less: Repayments Write offs Loss allowance

(b)

The Group and The Credit Union 2024 . Stage 2 Stage 3 Total $’000 $’000 $’000

12,293,697 6,121,722 1,555 ( 33,529) ( 612,088)

385,627 250,729

847,124 361,359

13,526,448 6,121,722 1,555 ( 33,529) -

17,771,357

636,356

1,208,483

19,616,196

( 3,765,062) ( 203,122)

(261,179) ( 41,887)

( 6,644) ( 4,032,885) ( 229,529) ( 229,529) ( 31,221) ( 276,230)

13,803,173

333,290

941,089

15,077,552

Delinquent loans: At 31 December 2025, there were 945 (2024: 926) delinquent loans aged two months and over. The total loan loss provision derived below is consistent with the loan loss provisioning rules of the League. The excess of the League’s provision over the IFRS provision is dealt with through a transfer from accumulated surplus to a non-distributable loan loss reserve as indicated in note 15(c). Delinquent loans are summarised as follows: The Group and The Credit Union 2025 Months in arrears 2 - 2.9 3 – 5.9 6 – 11.9 >12

174

Number of Loan Loans balance $’000

Savings Held $’000

Exposure $’000

Loss provision $’000

Rate % 10 30 60 100

113 189 324 319

154,750 143,643 247,773 559,704

8,876 12,128 9,755 24,573

145,874 131,515 238,018 535,131

15,475 43,094 148,664 559,704

945

1,105,870

55,332

1,050,538

766,937

Page 92

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 15.

LOAN TO MEMBERS (CONT’D): (c)

Delinquent loans (cont’d): Delinquent loans are summarised as follows (cont’d): The Group and The Credit Union 2024

Months in arrears 2 - 2.9 3 – 5.9 6 – 11.9 >12

(c)

Number of Loan Loans balance $’000

Savings Held $’000

Exposure $’000

Loss provision $’000

Rate % 10 30 60 100

138 147 385 256

144,287 122,151 341,800 424,798

9,999 5,407 19,926 31,110

134,288 116,744 321,874 393,688

14,429 36,645 205,081 424,798

926

1,033,036

66,442

966,594

680,953

Impairment allowance and loan loss provision:

The Group and The Credit Union 2025 2024 $’000 $’000

Impairment allowance at beginning of the year Additional amounts recognised during the year Bad debts written off

641,788 268,176 (240,344)

595,087 276,230 (229,529)

Allowance for impairment at the end of the year Excess of PEARLS provision over IFRS 9 transfer from accumulated surplus to loan reserve [note 28 (b)]

669,620

641,788

97,317

39,165

Total loan loss provision

766,937

680,953

IFRS impairment losses recognised for the year: Impairment losses recognised for the year Bad debts recovered

268,176 ( 60,423)

276,230 ( 50,009)

Net impairment loss recognised for the year

207,753

226,221

175

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 93

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 16.

ACCOUNTS RECEIVABLE:

Prepayments CUETS security deposit Collectors’ fees Rent receivable Deposit interest advance Other

The Group 2025 2024 $’000 $’000

The Credit Union 2025 2024 $’000 $’000

33,913 47,819 32,974 2,577 482 84,839

75,363 45,263 31,519 2,577 5,399 43,562

27,955 47,819 32,974 2,577 482 72,698

70,312 45,263 31,519 2,577 5,399 44,745

202,604

203,683

184,505

199,815

All accounts receivable are expected to be settled within 12 months from the end of the financial year. Based on the nature of these items the ECL is deemed to be immaterial. 17.

PROPERTY, PLANT AND EQUIPMENT:

Freehold Land and Building $,000

Furniture, Computer Fixtures & Equipment Equipment $’000 $’000

Motor Vehicles $’000

Capital Work in Progress $’000

Total $’000

377,802 -

380,606 3,566

318,685 13,725

2,259 -

26,223 -

1,105,575 17,291

At 31 December 2024 Additions

377,802 -

384,172 13,347

332,410 7,321

2,259 5,700

26,223 628

1,122,866 26,996

At 31 December 2025

377,802

397,519

339,731

7,959

26,851

1,149,862

Accumulated depreciation At 31 December 2023 Charge for the year

97,713 10,124

309,559 26,013

272,723 15,935

2,259 -

682,254 52,072

At 31 December 2024 Charge for the year

107,837 9,386

335,572 21,144

288,658 18,116

2,259 380

734,326 49,026

At 31 December 2025

117,223

356,716

306,774

2,639

783,352

Net book values At 31 December 2025

260,579

40,803

32,957

5,320

26,851

366,510

At 31 December 2024

269,965

48,600

43,752

26,223

388,540

Cost 31 December 2023 Additions

176

The Group

(

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

(Page 94

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 17.

PROPERTY, PLANT AND EQUIPMENT (CONT’D):

The Credit Union

Freehold Land and Building $,000

Furniture, Computer Fixtures & Equipment Equipment $’000 $’000

Motor Vehicles $’000

Capital Work in Progress $’000

Total $’000

377,802 -

380,493 3,566

318,686 13,633

2,259 -

26,223 -

1,105,463 17,199

At 31 December 2024 Additions

377,802 -

384,059 13,347

332,319 7,251

2,259 5,700

26,223 628

1,122,662 26,926

At 31 December 2025

377,802

397,406

339,570

7,959

26,851

1,149,588

Accumulated depreciation At 31 December 2023 Charge for the year

97,713 10,124

309,468 26,013

272,725 15,912

2,259 -

682,165 52,049

At 31 December 2024 Charge for the year

107,837 9,386

335,481 21,144

288,637 18,100

2,259 380

734,214 49,010

At 31 December 2025

117,223

356,625

306,737

2,639

783,224

Net book values At 31 December 2025

260,579

40,781

32,833

5,320

26,851

366,364

At 31 December 2024

269,965

48,578

43,682

26,223

388,448

Cost 31 December 2023 Additions

177

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 95

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 18.

RIGHT-OF-USE ASSETS: The Group and The Credit Union . 2025 2024 $’000 $’000

19.

At the beginning of the year Additions for the year Depreciation charge for the year

36,422 (11,020)

19,304 28,037 (10,919)

At the end of year

25,402

36,422

INTANGIBLE ASSETS: The Group and The Credit Union

. Goodwill $’000

Brand $’000

Core Customer Computer Deposits Relationships Software $’000 $’000 $’000

189,942 (189,942) -

4,948 4,948 -

56,406 56,406 -

94,000 94,000 -

77,213 77,213 2,414

422,509 (189,942) 232,567 2,414

At 31 December 2025

4,948

56,406

94,000

79,627

234,981

Accumulated depreciation At 31 December 2023 Amortisation charge for the year

4,371 496

49,820 5,641

89,430 4,570

14,922 7,786

158,543 18,493

At 31 December 2024 Amortisation charge for the year

4,867 81

55,461 945

94,000 -

22,708 7,989

177,036 9,015

At 31 December 2025

4,948

56,406

94,000

30,697

186,051

Net book values 31 December 2025

48,930

31 December 2024

945

54,505

55,531

Cost At 31 December 2023 and 2024As previously reported Prior year adjustment (note 34) As restated Additions

178

Total $’000

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 96

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 19.

INTANGIBLE ASSETS (CONT’D): Impairment testing for goodwill. Goodwill recognised is in relation to the acquisition of St. Thomas Co-operation Credit Union Limited in 2015. Impairment testing of goodwill is carried out by comparing the recoverable amount of the Group’s cash-generating unit (CGU) to which goodwill has been allocated, to the carrying amount of that CGU. In testing goodwill for impairment, the recoverable amount of CGU is estimated based on its value-in-use. The recoverable amount was arrived at by estimating the future cash flows and discounting those cash flows using long-term discount rates. Future sustainable cash flows are estimated based on the most recent forecasts, after taking account of past experience. In all cases projected cash flows are taken over 10 years and the long-term growth rate is applied in the immediately following year, within a terminal value calculated based on the discount rate and growth rate applied. The cash generating unit is regarded as saleable to a third party at any future date at a price sufficient to recover its carrying amount of goodwill. Key assumptions are set out below: The Group and The Credit Union . 2025 2024 $’000 $’000 Discount rate Growth rate

20.

27.44% 2.50-5.00%

EMPLOYEE BENEFITS ASSET: The Group participates in a joint contributory pension plan, which is open to all permanent employees and operated by the Jamaica Co-operative Credit Union League Limited. The plan provides benefits to members based on average earnings for their final 3 years of service, with the Credit Union and employees each contributing 5 - 12% of pensionable salaries. The plan was closed to new members effective 31 December 2016. The plan is valued by independent actuaries annually for financial reporting purposes using the projected unit credit method.

179

Page 97

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 20.

EMPLOYEE BENEFITS ASSET (CONT’D): (a)

The employee benefits assets recognised in the statement of financial position was determined The Group and The Credit Union 2025 2024 $’000 $’000 Fair value of plan assets (note 20(c)) Present value of obligations (note 20(e))

1,546,555 (1,318,059)

Effect of asset ceiling (note 20(h))

(

Asset recognised in the statement of financial position

1,462,489 (1,276,631)

381) 228,115

185,858

Where the pension plan has a surplus, the pension assets are limited to the lower of the surplus and the present value of the reduction in the employer’s future contributions (asset ceiling). The limit is tested each year and may or may not apply based on data, assumptions and changes in asset values. As at the reporting date, there were significant changes in the assumptions used, in particular, the discount rate. (b) Movements in the net asset recognised in the statement of financial position: The Group and The Credit Union 2025 2024 $’000 $’000

180

Net assets at beginning of year Employers’ contributions Expense recognised in surplus or deficit (note 20(f)) Remeasurement recognised in other comprehensive income (note 20(g))

185,858 19,404 ( 14,306)

185,041 18,260 ( 4,678)

37,159

( 12,765)

Net assets at end of year

228,115

185,858

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 98

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 20.

EMPLOYEE BENEFITS ASSET (CONT’D): (c)

The movement in the fair value of plan assets during the year was as follows: The Group and The Credit Union 2025 2024 $’000 $’000

(d)

At beginning of year Interest income on plan assets Remeasurement of plan assets Contributions: Employer Employees Administrative expenses Benefits paid

1,462,489 139,561 ( 59,331)

1,352,552 148,534 ( 26,126)

19,404 19,312 9,307) 25,573)

18,260 18,247 7,987) 40,991)

At end of year

1,546,555

( (

1,462,489

The plan assets are allocated based on the group’s obligation as a proportion of the total obligation of the plan. The distribution of plan assets, by type of security was as follows:

2025 % Quoted equities Real estate Debentures Resale agreements US$ investments (Debentures and deposits) Certificate of Deposit Unit Trust Payable-Withdrawn Employers Other

The Group and The Credit Union Market Market value value of assets 2024 of assets $’000 % $’000

22 23 32 10 4 7 11 ( 11) 2

334,893 358,847 495,377 148,176 61,921 111,408 176,911 ( 168,284) 27,306

22 25 32 7 4 10 9 ( 11) ( 2

100

1,546,555

100 1,462,489

330,328 358,989 469,992 99,776 63,797 149,090 134,570 166,768) 22,715

181

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

(Page 99

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 20.

EMPLOYEE BENEFITS ASSET (CONT’D): (e)

The movement in the present value of the defined benefit obligation during the year was as follows: The Group and The Credit Union 2025 2024 $’000 $’000 At beginning of year

1,276,631

1,099,966

Current service cost

24,495

19,053

Employees contributions Interest cost on plan obligations Actuarial losses/(gains) on obligations - experience adjustments - changes in financial assumptions Benefits paid

19,312 120,065

18,247 118,742

17,520 ( 114,391) ( 25,573)

At end of year

1,318,059

(

47,784) 109,398 ( 40,991) 1,276,631

Employer’s contributions to the plan for the year ended 31 December 2025 amounted to $19,404,000 (2024: $18,260,000). (f)

The amounts recognised in surplus for the year are as follows: The Group and The Credit Union 2025 2024 $’000 $’000 Current service cost Interest cost on obligations Interest income on plan assets Interest effect of asset ceiling Administrative expenses Total included in staff costs (note 9)

182

24,495 120,065 (139,561) 9,307

19,053 118,742 (148,534) 7,430 7,987

14,306

4,678

Page 100

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 20.

EMPLOYEE BENEFITS ASSET (CONT’D): (g)

The amounts recognised in other comprehensive income: The Group and The Credit Union 2025 2024 $’000 $’000 Actuarial gains on obligation Remeasurement of plan assets Change in effect of asset ceiling

(h)

(96,871) 59,331 381

61,614 26,126 (74,975)

(37,159)

12,765

Change in effect of asset ceiling The Group and The Credit Union 2025 2024 $’000 $’000

(i)

Effects of ceiling at beginning of period Interest on effect of asset ceiling Change in effect of asset ceiling

381

67,545 7,430 (74,975)

Effects of asset ceiling at the end of period

381

The principal actuarial assumptions used were as follows: The Group and The Credit Union 2025 2024 $’000 $’000 Discount rate Future salary increase Future Pension increase Price Inflation (CPI)

10.00% 7.00% 5.00% 5.00%

9.50% 7.00% 5.00% 5.00%

183

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 101

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 20.

EMPLOYEE BENEFITS ASSET (CONT’D): (j)

Impact on defined benefit obligation of 1% change in key economic assumptions: The change in the defined benefit obligation that would arise from a one percent (1%) change in each of the key economic assumptions is shown below. In determining the impact of each assumption, the others are held constant. Assumptions Sensitivity Analysis of Key Economic Assumptions. 2025 2024 +1% -1% +1% -1% $’000 $’000 $’000 $’000 Discount rate Future salary increase Future pension increases

(k)

(190,445) 87,470 136,749

244,326 ( 76,526) (115,497)

(194,000) 88,844 141,752

251,640 ( 77,099) (118,666)

Liability duration: Category of participant

Active members Deferred pensioners Retirees All participants

Liability duration (years) 2025 2024 $’000 $’000 20.4 20.7 8.7 18.0

21.80 22.20 9.20 18.90

Liability duration can fluctuate significantly from year to year due to the inclusion of transfer values and additional voluntary contributions and differences in assumptions. (l)

Impact on defined benefit obligation of a one (1) year increase in life expectancy: The effect on the defined benefit obligation of an increase of one year in the life expectancy is about $34,440,000 (2024: $35,140,000).

184

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 102

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025

21.

DEFERRED TAXATION: For the group, a deferred tax asset of approximately $39,397,000 (2024: $39,291,000) relating to available tax losses and taxable items with timing differences has not been recognised at the reporting date, as the directors and management consider that the financial and operational strategies initiated to utilize the benefits of the deferred tax asset are uncertain.

22.

MEMBERS’ DEPOSITS: The Group and The Credit Union 2025 2024 $’000 $’000

Regular deposits: Balance at beginning of the year Deposits and transfers

5,764,427 20,428,482

5,560,062 20,662,736

Withdrawals and transfer

26,192,909 (19,572,435)

26,222,798 (20,458,371)

Balance at end of year Special fixed deposits

6,620,474 5,715,364

5,764,427 5,252,825

12,335,838 103,668

11,017,252 101,835

12,439,506

11,119,087

12,386,007 53,499

11,077,254 41,833

12,439,506

11,119,087

Interest accrued Maturity: Due within the 1 year Due after 1 year

185

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 103

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 23.

MEMBERS’ VOLUNTARY SHARES: The Group and The Credit Union 2025 2024 $’000 $’000 Balance at beginning of the year Deposits and transfers Shares withdrawn Balance at end of year

5,378,053 5,311,260 (4,845,768)

4,854,251 4,720,523 (4,196,721)

5,843,545

5,378,053

5,396,089 447,456

5,001,589 376,464

5,843,545

5,378,053

Maturity: Due within the 1 year Due after 1 year

24.

LEASE LIABILITIES: The credit union leases buildings. The leases normally have a duration of 2 to 5 years, with an option to renew upon expiration. Some leases provide for annual increases of 7.5%. The credit union has elected not to recognise right-of-use assets and lease liabilities for leases that are short term and/or leases of low-value items. The Group and The Credit Union 2025 2024 $’000 $’000 Less than one year One to five years (a) Amount recognised in profit or loss: Interest on lease liabilities under IFRS 16 (b) Amount recognised in statement of cash flows Principal repayments Related Interest payments Total cash outflow for lease

186

9,145 12,262

10,891 22,683

21,407

33,574

3,918.

2,778

12,167 3,918

13,017 2,778

16,085

15,795

((Page 104

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 24.

LEASE LIABILITIES (CONT’D): (i)

Reconciliation of movement of lease liabilities to cash flows arising from financing activities. The Group and The Credit Union 2025 2024 $’000 $’000 Balance at 1 January

33,574

18,554

(12,167)

28,037 (13,017)

Total changes from financing cash flow

21,407

33,574

Liability related – other changes: Interest expense Interest paid

3,918 ( 3,918)

2,778 ( 2,778)

21,407

33,574

Changes from financing cashflow: New leases Payment of lease liability

Total liability-related other changes Balance at 31 December 25.

EXTERNAL CREDITS:

Development Bank of Jamaica Limited (DBJ) Opening balance Repayments Maturity: Due within the 1 year Due after 1 year

The Group and The Credit Union 2025 2024 $’000 $’000 248,163 ( 54,098)

321,347 ( 73,184)

194,065

248,163

58,758 135,307

54,098 194,065

194,065

248,163

These funds are for on-lending to small and medium enterprises to promote entrepreneurship. The payments for the funding to promote entrepreneurship are made on a monthly basis at rates ranging from 2% to 8.25% (2024: 2% to 8.25%).

187

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 105

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 26.

ACCOUNTS PAYABLE: The Group 2025 2024 $’000 $’000 Accruals Statutory contributions Unallocated lodgments Due to suppliers and members

The Credit Union 2025 2024 $’000 $’000

202,665 18,990 84,067 257,567

199,774 16,145 100,380 174,224

194,313 18,990 84,067 103,593

169,382 16,145 100,380 128,253

563,289

490,523

400,963

414,160

Accounts payable are contractually due within 12 months of the end of the financial year. 27.

INSTITUTIONAL CAPITAL: The Group and The Credit Union Restated 2025 2024 $’000 $’000 Permanent shares (a) Statutory reserve (b) Retained earnings reserve (c) Business combination reserve (d) Capital and other reserves (e) (a)

439,756 860,593 936,970 641,579 25,971

388,389 778,832 736,970 641,579 24,467

2,904,869 2,570,237 Permanent shares Permanent shares are paid in cash and are not redeemable, but may be transferred or sold. The Group and The Credit Union 2025 2024 $’000 $’000 Balance at the beginning of the year Additions during the year

188

388,389 51,367

356,185 32,204

439,756

388,389

2025

2024

Number of shares at beginning of the year Number of shares issued

155,355 22,042

142,474 14,203

Number of shares bought back

( 1,495)

( 1,322)

Number of shares outstanding at 31 December

175,902

155,355

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 106

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 27.

INSTITUTIONAL CAPITAL (CONT’D): (a)

Permanent shares (cont’d) Permanent shares are issued at a par value of $2,500 per share. They form part of the permanent capital in the credit union and are not withdrawable (note 2(s)). On 16 June 2025, $31,059,000 was declared as dividends for the current year. In the prior year, of $29,222,860 dividends were declared.

(b)

Statutory reserve As required by the Co-operative Societies Act and the rules of the credit union, a minimum of twenty percent (20%) of the annual surplus, and amounts collected for entrance fees must be transferred to this reserve.

(c)

Retained earnings reserve This reserve represents amounts transferred annually from accumulated surplus and other appropriations as agreed by the members at the Annual General Meeting, to increase the institutional capital of the credit union.

(d)

Business combination reserve This represents the difference between the fair value of the net assets acquired and the deemed value for the shares issued on business combination.

(e)

Capital and other reserves

• Capital reserve This reserve represents realised gains arising on the disposal of property, plant and equipment.

• Permanent shares reserve This reserve represents a fund to facilitate the transfer of members’ permanent share capital. An amount is set aside from the surplus each year to build this fund.

189

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 107

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 28.

NON-INSTITUTIONAL CAPITAL: Non-institutional capital are reserves which does not form part of the group’s regulatory capital these include: employee benefit reserves, loan loss reserves and investment reserves. (a)

Employee benefit asset reserve This reserve represents pension surplus and employee benefit obligation arising on actual valuation, IAS 19 of the credit union’s pension plan. Annual changes in the value of the plan is recognised in other comprehensive income are included in to this reserve.

(b)

Loan loss reserve This represents the excess of loan provision required under the League’s regulatory requirements, over that which is required under IFRS Accounting Standards. This amount is treated as an appropriation from the accumulated surplus (see note 15(c)). At the reporting date, the loan loss provision under IFRS 9 was Less than (2024: less than) the loan loss provision required by the League. Therefore, the loan loss reserve at the reporting date was $97,317,000 (2024: $39,165,000).

(c)

Investment reserve This reserve represents unrealised gain or loss on investments measured at FVOCI, net of expected credit losses.

29.

RELATED PARTY TRANSACTIONS AND BALANCES Related parties include directors and senior executives, all of whom are referred to as key management personnel, and entities closely connected to them. The credit union entered into the following transactions with related parties: (a)

Directors, board committee members and staff members maintained the following balances with the credit union: The Group and The Credit Union . 2025 2024 $’000 $’000 Directors and committee members: Members deposits 45,480 45,103 Members voluntary shares 11,242 10,876 Loan, including interest 72,073 68,438

Staff members: Members deposits Members voluntary shares Loan, including interest

190

2025 $’000

2024 $’000

154,680 33,412 579,646

155,580 33,540 566,651

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 108

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 29.

RELATED PARTY TRANSACTIONS AND BALANCES (CONT’D): (a)

Directors, board committee members and staff members maintained the following balances with the credit union (cont’d) At 31 December 2025 all loans owing by directors, committee members and staff were being paid in accordance with their loan agreements. Interest rate on these loans range from 3% to 55%. These loans are both secured and unsecured and matures between 1 year and 25 years.

(b)

The statement of financial position includes the following balances with the subsidiary:

Subsidiary: Due from (i) Due to (included in accounts payables)

The Credit Union Restated 2025 2024 $’000 $’000 69,544

45,980

51,319

(i) Due from subsidiary arises from management services provided. The balance is unsecured, interest free and has no fixed payment date. (c)

The statement of surplus or deficit and other comprehensive income includes the following transactions with related parties:

Subsidiary: Accounts payable Management fees Rental and maintenance Expense: Management fees and other

The Credit Union 2025 2024 $’000 $’000 5,292 2,933

323 5,040 2,631

(3,913)

(1,246)

191

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

(Page 109

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 29.

RELATED PARTY TRANSACTIONS AND BALANCES (CONT’D): (d)

Short-term employee benefits of key management for the year, included in staff costs (note 9), are as follows: The Group The Credit Union 2025 2024 2025 2024 $’000 $’000 $’000 $’000 Salaries and Wages Statutory contributions Other staff benefits

67,515 4,531 8,363

72,149 5,444 21,294

48,508 2,955 7,416

58,344 4,261 20,485

80,409

98,887

58,879

83,090

Key management comprises the Chief Executive Officer, General Manager-Finance & Treasury, General Manager – Credit Administration & Loan Risk, General Manager – FHC Investments Limited, General Manager – Human Resource Development. 30.

COMPARISON OF LEDGER BALANCES:

Balance as per general ledger Balance as per members’ ledger

Shares $’000

The Credit Union Deposits $’000

Loans $’000

5,843,545 (5,843,545)

12,439,506 (12,439,506)

16,764,371 (16,764,371)

Difference 31.

INSURANCE: (a)

Fidelity Insurance Coverage During the year, the group had fidelity insurance coverage with CMFG Life Insurance Company Limited. The total premium for the year was $1,745,761 (2024: $1,695,000).

(b)

Life Savings and Loan Protection Coverage During the year, the credit union had life savings and loan protection coverage with CMFG Life Insurance Company Limited. The total premium for the year was $61,808,000 (2024: $55,001,000).

192

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 110

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 32.

LITIGATION AND CONTINGENT LIABILITIES: The group is subject to claims, disputes and legal proceedings, as part of the normal course of business. Provision is made for such matters, when, in the opinion of management, it is probable that a payment will be made by the group, and the amount can be reasonably estimated. In respect of claims asserted against the group which have not been provided for, management is of the opinion that such claims are either without merit, can be successfully defended or will result in exposure to the group which is immaterial to both financial position and results of operations.

33.

MANAGED FUNDS: The subsidiary acts as agent and earns fees for managing its clients’ funds on a non-recourse basis under management agreements. Although the subsidiary is the custodian of the securities which are purchased on behalf of its clients, and the subsidiary collects and distributes entitlements to the beneficial holders, it has no legal or equitable right or interest in these securities. Accordingly, the clients’ funds and the securities in which the clients' funds are invested have been excluded from the statement of financial position. At 31 December 2025, these funds amounted to $2,532,016,000 (2024: $2,627,954,000).

34.

RESTATEMENT OF PRIOR YEAR BALANCES: During the year, the 2024 financial statements were adjusted due to the following: The classification or presentation of some items in the statements of financial position, surplus or deficit and other comprehensive income and cash flows were changed to achieve a more appropriate presentation, as required by the applicable financial reporting framework. (a) During the current financial year, management reviewed the calculation of goodwill recognized in the 2015 financial statements regarding the acquisition of St Thomas Cooperative Credit Union. The goodwill carrying value of $189,942,000 was overstated and this has been reversed by retrospectively restating the comparative balances for 2024. (b) In the prior year 2024, the credit union accepted an offer from its subsidiary, FHC Investments Limited, to subscribe for 10,000,000 additional shares of $5.00 each. The shares were allotted on 30 December 2024. However, during the year ended 31 December 2024, the credit union and its’ subsidiary had not reflected this transaction in the 2024 financial statements. Consequently, the comparative information has been restated to disclose the impaired capital. The credit union made capital contribution of $50,000,000 in February 2025. (c) During the financial year, the credit union performed an impairment review of its equity investment in its subsidiary, First Heritage Investments Limited, in accordance with IAS 36 (Impairment of Assets). The review was triggered by objective internal indicators of impairment, specifically sustained operating losses incurred by the subsidiary over the past three consecutive financial years, alongside a lack of projected turn-around in the foreseeable future. Consequently, an impairment loss of $270,000,000 has been recognized in full to write down the investment to its recoverable amount. This loss has been charged directly to the Statement of surplus or deficit under the line item 'Impairment loss on investment in subsidiary”. This amount has been restated in the 2024 financial statements.

193

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

Page 111

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 34.

RESTATEMENT OF PRIOR YEAR BALANCES (CONT’D): The impact of the restatement on the Consolidated statement of financial position as at 31 December 2024 is as follows: As previously As reported restated 2024 Adjustments 2024 ASSETS Notes $’000 $’000 $’000 EARNING ASSETS: Liquid assets 12 1,411,430 1,411,430 Resale agreements 13 573,701 573,701 Financial investments 14 2,093,981 2,093,981 Loans to members 15(a) 15,077,552 15,077,552 . Total earning assets 19,156,664 19,156,664 NON-EARNING ASSETS: Other non-earning assets Intangible assets

1,148,448 245,473

( 189,942)

1,148,448 55,531

Total non-earning assets

1,393,921

(189,942)

1,203,979

TOTAL ASSETS

20,550,585

(189,942)

20,360,643

16,778,877

496,342

TOTAL LIABILITIES

17,275,219

EQUITY Institutional capital Non-institutional capital Accumulated surplus

2,760,179 219,298 295,889

(189,942) -

2,570,237 219,298 295,889

Total equity

3,275,366

(189,942)

3,085,424

TOTAL LIABILITIES AND EQUITY

20,550,585

(189,942)

20,360,643

LIABILITIES AND EQUITY INTEREST BEARING LIABILITIES: NON-INTEREST BEARING LIABILITIES:

There was no impact of the restatement on the consolidated statements of surplus or deficit and other comprehensive income and cash flows for the year ended 31 December 2024.

194

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 112

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 34.

RESTATEMENT OF PRIOR YEAR BALANCES (CONT’D): The impact of the restatement on the credit union's statement of financial position as at 31 December 2024 is as follows:

ASSETS EARNING ASSETS: Liquid assets Resale agreements Financial investments Loans to members

Notes 12 13 14 15(a)

As previously reported 2024 Adjustments $’000 $’000

As restated 2024 $’000

1,411,430 552,707 1,911,206 15,077,552 . 18,952,895

1,411,430 552,707 1,911,206 15,077,552

18,952,895

1,073,258 245,473 220,000

(189,942) (220,000)

1,073,258 55,531 .

Total non-earning assets

1,538,731

(409,942)

1,128,789

TOTAL ASSETS

20,491,626

(409,942)

20,081,684

16,778,877

369,979

50,000

419,979

17,148,856

50,000

17,198,856

2,760,179 229,765 352,826

(189,942) (270,000)

2,570,237 229,765 82,826

Total equity

3,342,770

(459,942)

2,882,828

TOTAL LIABILITIES AND EQUITY

20,491,626

(409,942)

20,081,684

Total earning assets NON-EARNING ASSETS: Other non-earning assets Intangible assets Investment in subsidiary

LIABILITIES AND EQUITY INTEREST BEARING LIABILITIES NON-INTEREST BEARING LIABILITIES TOTAL LIABILITIES EQUITY Institutional capital Non-institutional capital Accumulated surplus

27,34 28

195

((Page 113

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 34.

RESTATEMENT OF PRIOR YEAR BLANCES (CONT’D): The impact of the restatement on the credit union’s statement of surplus or deficit and other comprehensive income for year ended 31 December 2024 is as follows: As previously reported 2024 Adjustments $’000 $’000

As restated 2024 $’000

2,262,505 183,874 2,446,379

31,123

2,477,502

NET INTEREST INCOME Other impairment adjustments Investment impairment-subsidiary

2,146,411 ( 223,227) -

(270,000)

NET INTEREST INCOME AFTER IMPAIRMENT GAINS AND LOSSES ON LOANS AND INVESTMENTS

1,923,184

(270,000)

1,653,184

179,363 13,043 4,726 7,531 17,570

222,233

NET INTEREST AND OTHER INCOME

2,145,417

(270,000)

1,875,417

OPERATING EXPENSES

(1,778,098)

367,319

(270,000)

12,970)

354,349

(270,000)

23,787)

330,562

(270,000)

ASSETS EARNING ASSETS: Loans and advances Investments

Notes

Investment securities at fair value throughprofit or loss

NON-INTEREST INCOME Fees and commission income Net income from trading Cambio operations Dividend income Other Income

NET SURPLUS BEFORE HONORARIUM AND DONATIONS HONORARIA AND DONATIONS

(

NET SURPLUS FOR THE YEAR Total other comprehensive income TOTAL COMPREHENSIVE INCOME FOR THE YEAR

196

(

2,146,411 223,227) 270,000)

( (

97,319 (

12,970) 84,349

(

23,787) 60,562

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (A Society Registered Under the Co-operative Societies Act)

((Page 114

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025 34.

RESTATEMENT OF PRIOR YEAR BALANCES (CONT’D): The impact of the restatement on the statement of cash flows for the credit union for year As previously As ended 31 December 2024 are as follows: reported 2024 $’000

Adjustments $’000

restated 2024 $’000

354,349

(270,000)

84,349

(2,477,502) 331,091 81,461 226,221 ( 656) ( 2,338) 4,678 ( 13,043)

270,000 -

(2,477,502) 331,091 81,461 226,221 ( 656) ( 2,338) 270,000 4,678 ( 13,043)

(1,495,739)

(1,775,769) ( 18,260) ( 16,981) 707,011 523,802 ( 7,599)

(2,083,535)

2,533,136 ( 322,568)

127,033

CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment Acquisition of resale agreements Proceeds from disposal of resale agreements Liquid assets-acquisition Liquid assets-disposal Acquisition of financial investments Proceeds from sale/maturing of financial investment

( 17,199) ( 522,550) 314,700 (2,247,734) 2,098,432 416,459 ( 66,720)

Net cash used in investing activities

(

24,612)

( 24,612)

( (

(

33,742 73,184) 29,223) 2,861 13,017)

(

33,742 73,184) 29,223) 2,861 13,017)

(

78,821)

(

78,821)

Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year

23,600 161,901

CASH AND CASH EQUIVALENTS AT END OF YEAR

185,501

CASH FLOWS FROM OPERATING ACTIVITIES: Net surplus for the year Adjustments for: Interest income Interest expense Depreciation and amortisation Impairment losses on loans to members Impairment reversal on subsidiary loan Impairment reversal on investments Impairment losses on investment in subsidiary Employee benefits asset Unrealised losses on FVTPL investments Operating cash flows before movements in working capital Changes in operating assets and liabilities Loan to members Employee benefits asset contributions Other assets Members’ deposits Members’ voluntary shares Other liabilities

Interest received Interest paid Net cash provided by operating activities

CASH FLOWS FROM FINANCING ACTIVITIES: Issues of permanent shares Issue of shares- subsidiary External credits-payment Dividends paid Entrance fees Lease payments Net cash used in financing activities

197

198

199

SUPERVISORY COMMITTEE REPORT

200

SUPERVISORY COMMITTEE REPORT

THE COMMITTEE The Supervisory Committee assists the Board of Directors with discharging its responsibilities by providing oversight into aspects of the internal control system through the Internal Audit Function. All standing members were elected by the Credit Union membership at the Annual General Meeting held on the 9th of September 2024 and continued to serve in 2025. The standing members of the Supervisory Committee are: • • • • •

Mrs. Karlene Mitchell-Gordon Mr. Adjaynae Billings Ms. Carol Dallas-Robinson Mr. Dwayne Tabannah Ms. Tanisha Thompson

The Committee elected Mrs. Karlene Mitchell-Gordon and Mr. Adjaynae Billings as Chairperson and Secretary, respectively. REPORTING PERIOD The reporting period for this report covers the twelve-month period January 2025 to December 2025. ATTENDANCE RECORD There were 12 Supervisory Committee meetings held for the reporting period. The attendance by members is as follows: Name Attended Excused Mrs. Karlene Mitchell-Gordon 12 0 Mr. Adjaynae Billings 11 1 Mr. Dwayne Tabannah 12 0 Ms. Tanisha Thompson 12 0

201

SUPERVISORY COMMITTEE REPORT

Mrs. Carol Dallas-Robinson

Members of the Supervisory Committee also attended the quarterly Joint Meeting of the Board of Directors, Committees and Management. The Chairperson also attended the Audit & Risk Management Committee meetings held during the period. AUDIT AND INVESTIGATION ACTIVITIES Audit Activities There were ten (10) audits on the 2025 Audit Plan. All ten (10) audits were completed during the year. No.

Audit

Entity

Investment in Client Funds

FHCIL

REGULATORY

Data Protection Governance ManagementGovernance Framework- Data Breach response procedures and incident reporting

FHCCU

REGULATORY

Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Compliance-KYC and CDD

FHCCU

REGULATORY

Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Compliance-KYC and CDD

FHCIL

REGULATORY

Fees Management and Control

FHCCU

FINANCIAL

Internet Banking Controls

FHCCU

OPERATIONAL

Credit Administration and Loan Risk Management-Disbursement Controls

FHCCU

OPERATIONAL

202

Type

SUPERVISORY COMMITTEE REPORT

Human Resources Management- Staff Records and Recruitment Procedures

FHCCU

OPERATIONAL

Business Continuity Governance Management

FHCCU

OPERATIONAL

10.

Business Continuity Governance Management

FHCIL

OPERATIONAL

SUMMARY REPORT ON COMPLETED AUDITS Investment of Client Funds The primary objective of the audit was to evaluate the effectiveness, compliance, and operational accuracy of FHCIL’s client funds management processes. The audit main findings identified critical control gaps, specifically: • The absence of an approved Client Funds Management Procedure. • Inability to generate ageing reports for idle client funds as a result of system limitations. • Untimely reconciliations between client deposits and receipts caused by workflow inefficiencies. In response, management acknowledged all findings and committed to fully updating the Operations Procedure Manual within a year; in the meantime, they have implemented interim daily monitoring practices that have already successfully reduced idle funds. Data Protection Governance Management and Framework The objective of the audit was to evaluate the organization’s data protection governance structure and assess whether its incident reporting mechanisms align with the Jamaica Data Protection Act (2020). The audit's findings confirmed that a robust governance framework is established and breach mitigation processes are generally compliant; however, it identified procedural weaknesses regarding the timeliness of internal incident reporting.

203

SUPERVISORY COMMITTEE REPORT

In response, management addressed the identified reporting delays, successfully resolved the logged incidents, and is currently updating its Data Protection Impact Assessments to align with anticipated regulatory guidelines from the Office of the Information Commissioner (OIC). Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Compliance- Know Your Customer (KYC) and Customer Due Diligence (CDD) The objective of the FHCCU audit was to evaluate the alignment with regulatory requirements by assessing the adequacy and effectiveness of its Know Your Customer (KYC), Customer Due Diligence (CDD), and sanctions screening procedures during new member onboarding. • FHC Credit Union’s audit findings were highly positive, concluding that onboarding processes are operating as intended with a strong culture of compliance across the retail network, though minor inconsistencies regarding reference tools within the internal documentation were identified. • In response, it was recommended to management that these documentation references be standardized to prevent any operational misunderstandings, and an addendum review is scheduled for January 2026 to further assess overarching governance controls. • The audit findings identified several compliance and governance gaps specific to FHC Investments’ operations. They primarily highlighted a lack of formal board-level approvals for AML frameworks. In response, management acknowledged these procedural and documentation shortcomings and has committed to implementing corrective actions to resolve all identified medium-risk issues. Fees Management and Control The objective of the audit was to assess the effectiveness, accuracy, and governance of the Credit Union’s fee management processes, with a specific focus on identifying instances of financial leakage arising from uncollected fees. The review revealed a fragmented governance structure and the absence of a formalized Fee Management Policy, which contributed to significant system configuration deficiencies and associated revenue loss. In response, management has already implemented initial corrective actions and is now tasked with establishing a comprehensive, cross-departmental policy framework to ensure consistent application,

204

SUPERVISORY COMMITTEE REPORT

transparency, and regulatory compliance. Internet Banking Controls The primary objective of the audit was to determine whether additional member accounts were impacted by account takeover fraud and to evaluate adherence to the newly implemented internet banking procedures which was instituted after the account takeover incident. The audit's findings positively confirmed general compliance with the updated protocols. However, high-risk control deficiencies were identified, specifically regarding: • User access control gaps • Inadequate Universa reports • Non-adherence to KYC documentation requirements In response, management accepted the findings and has already initiated corrective actions in collaboration with key process owners. These actions include reviewing access controls, sharing of Circular, enhancing existing reports as well as disabling system access where appropriate. Credit Administration and Loan Risk Management Disbursement Controls The objective of the audit was to evaluate the data integrity, policy compliance, and overall governance within the Credit Administration and Loan Risk Unit, with a specific focus on the loan system, approval authorities, and restructured loan management. The audit's findings revealed material deficiencies across governance and systemic controls, highlighting severe data quality gaps. In response, management and the Chief Information Officer acknowledged these systemic weaknesses and committed to a comprehensive remediation plan that includes updating Standard Operating Procedures, correcting system configurations, and collaborating with the software vendor to establish robust data validation and integration controls.

Human Resources Management - Staff Records and Recruitment Procedures The objective of the audit of the Human Resources Department was to evaluate the effectiveness of the

205

SUPERVISORY COMMITTEE REPORT

hiring and onboarding processes, as well as the control environment governing personnel records. The primary findings revealed that the HR Policy and Procedures Manual is outdated, leading to significant gaps. In response, HR management acknowledged the operational and compliance risks, committing to fully update the Standard Operating Procedures while immediately implementing mandatory secondary checks on all personnel files to ensure completeness before new hires conclude orientation.

Business Continuity Governance Management Two (2) separate Business Continuity Management Audits were conducted for the Credit Union and FHCIL. The objective of both audits was to evaluate the adequacy and effectiveness of the Business Continuity Plan (BCP) governance framework in ensuring the continuity of critical operations during disruptions. • The Credit Union audit findings concluded that the current framework is ineffective due to significant governance vulnerabilities, primarily stemming from unapproved foundational policies, outdated business impact analysis (BIA) and absence of BCP testing. • In response, management acknowledged these critical gaps and initiated a phased remediation strategy; this includes separating and formally approving the policy and operational documents and finalizing comprehensive departmental reviews of BIA. • FHCIL’s audit findings concluded that relying on a consolidated group plan rendered the subsidiary's continuity framework ineffective. Specifically, the omission of the Jamaica Stock Exchange (JSE) requirements and other vulnerabilities including outdated BIA, absence of BCP testing as well as non-assignment of BCP roles. In response, management agreed to strengthen governance by having FHCIL’s Board formally ratify the policy, integrating the missing regulatory mandates into the plan, conducting overdue practical testing and officially defining the continuity coordinator's role within the organizational structure.

206

SUPERVISORY COMMITTEE REPORT

Special Investigations Activities The global surge in cybercrime presents a significant and evolving threat to financial institutions. Jamaica’s financial sector, including the Credit Union, remains increasingly vulnerable to these sophisticated attacks. Seventeen (17) special investigations were examined by Internal Audit for the period January 1, 2025, to December 31, 2025. Of the seventeen (17) investigations examined, ten (10) were completed and closed while seven (7) remain outstanding. In addition, five (5) investigations that were carried forward from 2023/2024 were also completed during this period. Total investigation amount for 2025 amounts to $35,218,000. Category Total Completed In Progress % Completed Carried Forward from 2023/2024

100

New cases 2025

59%

Total

68%

Debit Card Investigations Fifty-nine (59) Debit card investigations were received for the year 2025 compared to eighty-eight (88) in 2024 reflecting a reduction of 33%. Reported losses in 2025 totalled $1,802,834.31, reflecting a significant decrease of approximately 75.6% when compared to reported losses of $7,385,278.29 in 2024. GENERAL REVIEWS Bank Reconciliations Reviews Based on the reports received, bank reconciliations for both FHCCU and FHCIL were reviewed in a timely manner. No reconciliation differences were identified, and adequate segregation of duties was noted.

207

SUPERVISORY COMMITTEE REPORT

Monthly Jamaica Stock Exchange (JSE) Appendix 12 Regulatory Review – November 2025 The Internal Audit Department continues to perform its review and sign-off duties related to the JSE Appendix 12 regulatory filing. All reports for the year have been submitted to the JSE as at December 29, 2025. Staff, Volunteer and Connected Party Past Due Loan Balances • As of December 31, 2025, three (3) team members had loans outstanding for more than 30 days. The manager of Loan Recovery confirmed that two loans were updated while the third loan, which is not paid by salary deduction, is to be updated by the team member. • No active volunteers were past due for the reporting period. • Three (3) connected parties were past due, with delinquencies ranging from 63 to 488 days. Repayment arrangements have been established for two of these accounts and the third has been assigned to a collector. CONCLUSION We would like to express our thanks to the Nominating Committee for their confidence in selecting us and 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 Board of Directors, Management Team and team members, in particular the Internal Audit Department for facilitating and supporting the work of the Supervisory Committee over the year.

……………….........................…………………. Karlene Mitchell-Gordon Chairman

208

209

CREDIT COMMITTEE REPORT

210

CREDIT COMMITTEE REPORT

For the Financial Year 2025, the Credit Union’s Loan Portfolio showed modest growth. The Gross Portfolio witnessed a 5.91% increase year over year from $15.82 Billion in 2024 to $16.76 Billion in 2025. Loans disbursed for the year 2025 totaled $5.87 Billion, a reduction from 2024’s $6.12 Billion, due mainly to a tightening of our lending to certain high-risk sectors, an increase in rates on new cars and an adjustment in our overall motor vehicle policy. The Loan Portfolio by Security as of December 31, 2025, is outlined in the table below: Cash Secured Unsecured Motor Vehicle Real Estate

7.21% 23.61% 47.30% 21.88%

The performance of the Micro & Small Business Loans Unit saw disbursement decreasing from $198.63 Million in 2024 to $169.65 Million in 2025. This resulted in a 3.72% decline in the portfolio. This was due primarily to a smaller staff complement, which is being reviewed. However, the Past Due rate for the Portfolio improved moving from 23.41% in 2024 to 17.67% in 2025. Overall Past Due Rate There was a slight deterioration in the Past Due Rate moving to 7.40% as of December 31, 2025, compared to 7.29% as of December 31, 2024. Review Activities 1. Number of Loans Reviewed: 597 2. Special Conditions Approved by the Credit Committee: 35 loans totaling $318.07 Million 3. Loans approved by the Board of Directors: 48 loans totaling $108.45 Million Attendance Record For the period January to December 2025, a total of forty-five (45) meetings were held.

211

CREDIT COMMITTEE REPORT

Attendance for each member was as follows: Members Meetings Attended No. of Times Excused Althea Daley 42 3 Keslyn Gilbert-Stoney 45 0 Jacqueline Lloyd-Carter 43 2 Earl Bailey 35 10 Stennett McLean* 37 8 *New February 2025 Conclusion The Credit Committee commends the FHC team on its strong performance for the year 2025. We believe that the strategic partnerships developed, the close monitoring of the portfolio, the team’s timely action in implementing remedies to curtail delinquency and the attractive loan and deposit sales offered, contributed to the high-performance levels. We continue to encourage members to seek assistance from the Credit Union when facing challenges as the Credit Union is willing to offer support where it is possible. We also wish to thank the Board and Committees for the assistance offered to the Committee during the year.

............................ Althea Daley Chairman

212

NOMINATING COMMITTEE REPORT In accordance with the provision of the Rules of First Heritage Co-operative Credit Union Limited in respect of Article XIII, Rule 57, a Nominating Committee was appointed which comprised of the following members: • Ms. Nickeisha Walsh • Mr. Richard Picart • Mr. Xavier Allen

- Chairperson; Board Representative - Member Representative - Staff Representative

The Committee met to consider all retiring Volunteers from the Board of Directors, Supervisory Committee and Credit Committee. The Committee subsequently advertised for Volunteers to fill the vacancies. The candidates were assessed, and recommendations made. The Nominating Committee now presents this report to the membership as outlined below: BOARD OF DIRECTORS The following Directors will be retiring at this Annual General Meeting: 1. Mrs. Carian Freckleton-Cousins 2. Mrs. Camelle Ricketts-Moore 3. Mrs. Karla Stephens-Hall 4. Mr. Wayne Jones 5. Mr. Kevin Forbes The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Recommended Term (years) • Mrs. Carian Freckleton-Cousins Mrs. Carian Freckleton-Cousins 2 • Mrs. Camelle Ricketts-Moore Mrs. Camelle Ricketts-Moore 2 • Mrs. Karla Stephens-Hall Mrs. Karla Stephens-Hall 2 • Mr. Kevin Forbes Mr. Kevin Forbes 2 • Wayne Jones Cranston Ewan 2 The following Directors will continue to serve for one year: 1. Mr. Richard Ranger 2. Ms. Nicole Adamson 213

NOMINATING COMMITTEE REPORT

3. Ms. Nickeisha Walsh 4. Mr. Andrew Nooks SUPERVISORY COMMITTEE The members of the Supervisory Committee all of whom retire at this Annual General Meeting are: 1. Ms. Tanisha Thompson 2. Mrs. Carol Dallas-Robinson 3. Mrs. Karlene Mitchell-Gordon 4. Mr. Dwayne Tabannah 5. Mr. Adjaynae Billings New Recruits Joanna Oughton

Recommended Term (Years) Joanna Oughton 1

The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Recommended Term (years) • Mrs. Carol Dallas-Robinson Mrs. Carol Dallas-Robinson 1 • Mrs. Karlene Mitchell-Gordon Mrs. Karlene Mitchell-Gordon 1 • Mr. Dwayne Tabannah Mr. Dwayne Tabannah 1 • Mr. Adjaynae Billings Mr. Adjaynae Billings 1 CREDIT COMMITTEE The member of the Credit Committee retiring at this Annual General Meeting is: • Mrs. Keslyn Gilbert-Stoney • Mr. Earl Bailey • Mrs. Jacqueline Lloyd-Carter

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NOMINATING COMMITTEE REPORT

The Committee nominates the following persons who have indicated their willingness to serve: Retiring Recommended Term (years) • Mrs. Keslyn Gilbert-Stoney Mrs. Keslyn Gilbert-Stoney 2 • Mr. Earl Bailey Mr. Earl Bailey 2 • Mrs. Jacqueline Lloyd-Carter Mrs. Jacqueline Lloyd-Carter 2 The following volunteers will continue to serve for one (1) year: 1. Ms. Althea Daley 2. Mr. Stennett McLean The Credit Union wishes to thank our retiring Members for their commitment, support and contribution to our success over the years. PROFILES OF CANDIDATES CAMELLE RICKETTS-MOORE Mrs. Ricketts-Moore is the Managing Director of Sangster’s Book Stores Limited. She has over 28 years’ working experience in the field of internal auditing, accounting and business operations. Her expertise includes governance, audit, risk management and controls, strategic planning and execution. Mrs. Ricketts-Moore is a Chartered Accountant and holds a Master of Business Administration from the Manchester School of Business. She is also a Certified Information System Auditor (CISA) and a Certified Internal Auditor (CIA). At First Heritage Co-operative Credit Union Limited, she serves as Chairman of the Board of Directors and has been a Director since 2022. She previously volunteered in the capacity of Chairman of IT Steering Committee (2023-2024), Chairman of Audit & Risk Management Committee (2023-2024) and as Chairman and Secretary of the Supervisory Committee between 2016 and 2021. Presently, Mrs. Ricketts-Moore also serves as a member of the Board of Directors of FHC Investments Limited. CARIAN FRECKLETON-COUSINS Mrs. Freckleton-Cousins is a legal practitioner with over a decade of experience as an Attorney-at-Law. She is the Head of Legal & Insurance, and Company Secretary at Kingston Freeport Terminal Limited and possesses a wealth of knowledge in corporate and commercial law. 215

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Mrs. Freckleton-Cousins previously held the position of Corporate Secretary/Legal Counsel at First Heritage Co-operative Credit Union Limited. She is the holder of a Bachelor of Law Degree, Legal Education Certificate and a Master of Law in Corporate and Commercial Law. KARLA STEPHENS-HALL Mrs. Stephens-Hall possesses over 20 years of experience in Audit and Accounting that spans over multiple and jurisdiction in the Caribbean and North America. She is currently employed as the Group Financial Controller of the RJR Gleaner Group Limited. She has previously held the position of Chairman of the Supervisory Committee of First Heritage Co-operative Credit Union Limited. She previously served as the Chief Financial Officer for the Progressive Grocers Group and Financial Controller at Massy Technologies InfoCom Jamaica Limited. Her expertise lies in continuous improvement and solution-oriented thinking, making her a strategic thinker with a strong background in accounting and auditing. Throughout her career, Karla has held various leadership positions in Internal Audit, Business Assurance and Risk, External Audit, Operations, and Accounting at local and regional levels. Mrs. Stephens-Hall holds a Bachelor of Science in Accounting and Economics, Master of Business Administration in Accounts from the University of East London, is a Fellow of the Association of Chartered Certified Accountants as well as a member of the Institute of Internal Auditors and the Institute of Certified Rish Managers. KEVIN FORBES Mr. Forbes is currently employed to Look Beyond Limited as a Financial Controller. He previously served as Financial Manager at Cable & Wireless Limited, Financial Controller at Allied Insurance Brokers Limited, and has worked in various management capacities within the Grace Kennedy Company Limited as well as Ernst & Young Caribbean. He holds a Masters of Business Administration in Finance from the Manchester Business School, United Kingdom, is a Fellow of the Association of Chartered Certified Accountants as well as a member of the Institute of Chartered Accountants of Jamaica.

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CRANSTON EWAN Mr. Ewan is a Fellow of the Association of Chartered Certified Accountants (ACCA). He holds a Master’s Degree with a concentration in Finance from the University of Manchester. Mr. Ewan has vast experience in several industries, spanning Accounting, Shipping, Education, Energy Efficiency, and the Distributive Trade. His expertise includes accounting, finance, management consulting, human resource management, facilities management and leadership. Mr. Ewan previously served as Treasurer on the Board of Directors and is currently the Chairman of the FHCIL Board. KARLENE MITCHELL-GORDON Mrs. Mitchell-Gordon is the Senior Tax Counsel of Tax Administration of Jamaica. She is also a practicing Attorney-at-Law, who is well rounded in areas such as accounts, economics and tax reform. She has held positions such as Legal Counsel & Corporate Secretary, Economist, Accountant and Lecturer and possesses over 20 years of work experience in accounting and tax reform. CAROL R. DALLAS-ROBINSON Mrs. Dallas-Robinson is the Audit Manager of ABTAX Limited and an Accountant at Caribbean Broilers. She is a qualified as a Chartered Accountant and possesses over 20 years of accounting and auditing experience. In her capacity, she has performed on several assignments within various sectors in the island. DWAYNE TABANNAH Mr. Tabannah currently occupies the position of Risk and Fraud Management Lead at Digicel. He has held several managerial positions in the Finance and Risk Management sector. He possesses a decade of experience in Finance and Operational Risk Management. Mr. Tabannah spearheaded many financial projects including compliance audit and risk assessment. He is the holder of a Bachelor of Science Management Studies (Accounting), Master of Science Enterprise Risk Management and Master of Law Corporate and Commercial Law.

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ADJAYNAE BILLINGS Mr. Billings, a Data Analyst has a wealth of knowledge in Data and Risk Analyst coupled with operational management. His work experience includes Business Risk Analayst and Commercial Risk Analyst. Mr. Billings was educated at the University of the West Indies and University of Waterloo (Canada). He was a recipient of First Heritage Co-operative Credit Union Limited GSAT Grant. JOANNA OUGHTON Joanna Oughton is an accomplished accounting and financial forensics professional with over a decade of experience in financial accounting, auditing, forensic investigations, and regulatory compliance. She currently serves as a Senior Special Agent (Crime Analyst) at the Major Organized Crime & AntiCorruption Agency (MOCA), where she analyzes complex financial data to detect and disrupt organized crime activities, including money laundering, financial fraud, and terrorist financing. Ms. Oughton has extensive expertise in financial crime investigations, risk assessment, and internal controls, having previously served as a Senior Financial Forensic Analyst within the Financial Investigations Division. She holds a Strategic Professional qualification from the Association of Chartered Certified Accountants (ACCA) and a Postgraduate Diploma in General Management from the Management Institute for National Development. She is currently pursuing the Certified Fraud Examiner (CFE) designation and has completed extensive professional training in forensic accounting, intelligence analysis, and financial investigations. KESLYN GILBERT-STONEY Ms. Gilbert is an experienced Attorney-at-Law with almost 15 years at the bar, having been called since October 2007. She is presently the Senior Manager, Legal and Corporate Governance at the Jamaica Social Investment Fund. She possesses a wealth of knowledge and sound understanding in her area of practice and she is a two-time honours graduate of the University of the West Indies and she possesses a Certificate of Legal Education from Norman Manley Law School.

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EARL BAILEY Mr. Bailey is a Lecturer at the University of Technology, Jamaica and is a past lecturer of the University of the West Indies. His general areas of expertise include; Urban and Regional Planning and Land Resource Management, with emphasis on housing, spatial planning, disaster management, construction technology and climate change. He piloted the accreditation of BSc. in Urban and Regional Planning as the first academic programme at the University of Technology, Jamaica. He is also among the first to introduce Geographic Information System and Remote Sensing to the Caribbean Region’s academic and professional environment. He is presently the Vice President of the Jamaica Institute of Planning. Mr. Bailey is a Lecturer at the University of Technology, Jamaica and is a past lecturer of the University of the West Indies. His general areas of expertise include; Urban and Regional Planning and Land Resource Management, with emphasis on housing, spatial planning, disaster management, construction technology and climate change. He piloted the accreditation of Bsc. in Urban and Regional Planning as the first academic programme at the University of Technology, Jamaica. He is also among the first to introduce Geographic Information System and Remote Sensing to the Caribbean Region’s academic and professional environment. He is presently the Vice President of the Jamaica Institute of Planning. JACQUELINE LLOYD-CARTER Mrs. Lloyd-Carter is a finance and business management and credit administration professional with over 20 years’ experience driving financial operations, project delivery, and MSME support in Jamaica. She is currently serving as MSE Financial Specialist at the Jamaica Business Development Corporation, where she designs and execute financial solutions for micro, small and medium enterprises. Known for strong analytical skills, stakeholder management, and translating complex financial data into actionable strategies.

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She previously held the position of Assistant Branch Manager, Senior Accounting Clerk, Treasury Officer and Member Service Representative of First Heritage Co-operative Credit Union Limited. She is the holder of a Master of Science from the MIU City University Miami, a Bachelor of Science in Business Administration (Major: Finance and Accounts) and an Associate Degree in Business Administration. Signed By:

………………………………………….... …………………………… Nickeisha Walsh (Ms.) Richard Picart Member Representative Chairperson, Nominating Committee

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………………………… Xavier D. Allen Chief Executive Officer

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED SPECIAL RESOLUTION ENDING NOMINATIONS FROM THE FLOOR PREAMBLE WHEREAS the Registrar of Co-operatives and Friendly Societies has issued directives requiring all Credit Unions to implement rules pertaining to the role, functions and responsibilities of the Nominating Committee and the Nominating Process for election by the members to serve as Directors or Committee Members. AND WHEREAS Section 11 (1) of the Co-operatives Societies Act stipulates that the Registered Society may amend its rules. AND WHEREAS Section 11 and Regulations 41 of the Co-operative Societies Act and Regulations respectively, provide for the amendment of Rules. AND WHEREAS the Board of Directors have duly considered the directives of the Registrar of Cooperatives and Friendly Societies AND WHEREAS in compliance with the directives of the Registrar of Co-operative Societies and Friendly Societies, the Board of Directors is recommending the adoption of more extensive functions for the Nominating Committee, the implementation of a new machinery for the nomination and election of volunteers to serve on the Board and Committees. AND WHEREAS Article XXIV, Rule 73 allows for amendments to the Rules of the First Heritage Cooperative Credit Union Limited. BE IT RESOLVED that Article XIII, Rule 57- MEETINGS OF MEMBERS: which now reads: 57 Nominating Committee a) Not less than ninety (90) days prior to each Annual General Meeting, the Board of Directors shall appoint a Nominating Committee of three (3) members, of which not more than one shall

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be a member of the existing Board of Directors. It shall be the duty of the Nominating Committee to advertise among the membership vacancies for which elections will be held, interview, select and nominate to the Annual General Meeting one member for each vacancy for which elections are being held. b) The Nominating Committee shall place the nominations before the members, who may also make nominations from the floor. c) Prior to the elections, the Chairman shall appoint a Returning Officer to conduct the elections. d) All elections shall be determined by a majority vote and shall be by ballot except where there is only one nominee for each vacancy. e) Nominations shall be in the following order: i) Nominations for members of the Board of Directors ii) Nominations for Credit Committee members iii) Nominations for Supervisory Committee members Elections may be by separate ballots following the same order as the nominations or if preferred, may be by one ballot. ARTICLE XIII, Rule 57 - Meetings of Members - Be Amended to Read: 57. (i) Nominating Committee A Nominating Committee shall be appointed by the Board of Directors and shall consist of at least three (3) members, one of whom will be a Board Member who shall be the Chairman of the Committee. (ii) Nomination Process (a) Not less than Ninety (90) days prior to the Annual General Meeting (AGM) the Nominating Committee shall meet to consider the following:

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i. The vacancies that will arise at the AGM on the Board of Directors, the Credit Committee and the Supervisory Committee. ii. A preliminary list of positions to be made to fill such vacancies. iii. All other matters and procedures related to the filling of such vacancies. (b) Not less than Eighty (80) days prior to the AGM the Nominating Committee shall in writing: i. notify the membership of the vacancies for the Board of Directors, Credit and Supervisory Committees; ii. invite nominations from the membership to be made for each vacancy by petition in the prescribed form signed by at least five (5) members each of whom shall be a member in good standing with the Society; iii. notify the membership of the closing date for receiving nominations by petition. (c) In all cases, the period for receiving nominations by petition shall extend at least forty (40) days from the date of written notification by the Nominating Committee. (d) The written notice from the Nominating Committee to the membership shall indicate that there shall be no nominations from the floor. (e) The written notice from the Nominating Committee to the membership shall also be prominently displayed at the places of business of the Credit Union or on the Credit Union’s website. (f) Upon consideration of all nominations made and received by petition, the Nominating Committee shall interview and recommend at least one (1) member for each vacancy. (g) The Nominating Committee shall report its recommended nominations to the Secretary of the Credit Union at least forty (40) days before the Annual General Meeting.

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(h) Each nominee by petition shall submit to the Nominating Committee: (i) the petition duly completed with the signatures of five (5) members in good standing with the Credit Union and signed by the nominee stating that he/she is agreeable to the nomination and will serve if elected to office; (ii) a brief statement of qualifications and experience in a form approved by the Board of Directors; (iii) a completed Fit and Proper Questionnaire in a form determined by the Board of Directors. (i) The Nominating Committee shall have the authority to include candidates not nominated by members’ petition among those to be considered by the Committee, and of its own accord submit by way of petition in like manner, suitable candidates to fill vacancies on the various Committees. (j) Members of the Nominating Committee shall not be eligible for nominations. (k) The Nominating Committee shall act in accordance with the Rules and Policies of the Credit Union in its selection of each nominee A member seeking nomination to hold office shall be disqualified if that member: (i) fails to satisfy the Nominating Committee that he is a fit and proper person to accept the responsibilities and perform corporate governance functions of the Credit Union; (ii) is delinquent in their loan or other obligations with the Credit Union at the date of the petition and up to the date of election; (iii) has a dormant or inactive account for at least six (6) months and over;

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(iv) has been a member of the Credit Union less than six (6) months before the date of the petition, save where the member is an active member for more than six (6) months in another co-operative society in Jamaica; (v) whose membership in any other co-operative society at the time of the Nominating Committee’s deliberations has been judged delinquent. (vi) is not ordinarily resident in the Island of Jamaica; (vii) resides outside of the Island for a period exceeding six (6) months in the year. (l) The Secretary of the Board of Directors shall, no later than thirty (30) days prior to the AGM, notify the members in writing or by way of electronic mail of the nominations recommended by the Nominating Committee. The notice shall also be posted in a conspicuous place in the Credit Union and/or on the Credit Union’s website. (m) After the Nominating Committee has notified the members of its recommended nominees, the nominees shall be presented and placed before the members at the AGM by the Nominating Committee to be considered by the members present. (n) A brief statement of qualifications and biographical data in a form approved by the Board of Directors shall be included for each nominee recommended by the Nominating Committee. (o) The final selections with the terms of office shall be presented at the AGM by the Nominating Committee. (p) Where a volunteer’s term has not expired and he is seeking nomination or election to a Committee other than the Committee he currently serves on, he shall tender his resignation from that Committee and the nomination process shall be initiated to fill the vacancy. (iii) Elections

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(a) Elections shall be in the following order: (i) Elections for members of the Board of Directors; (ii) Elections for members of the Credit Committee; (iii) Elections for members of the Supervisory Committee; (b) After the nominees of the Nominating Committee have been placed before the members, a Returning Officer shall be appointed by the Chairman and will preside over the elections at the Annual General Meeting. (c) If the nominees equal the number of vacancies, the nominees shall be declared elected by general consent or acclamation of the membership at the Annual General Meeting. (d) In the event there are more nominations recommended by the Nominating Committee than the number of vacancies available, there shall be voting by ballot. The Returning Officer shall be responsible for appointing tellers, distributing ballot, conducting and tallying the vote, any other action to ensure a valid, efficient and smooth election and thereafter announcing the results (e) In the event a vacancy arises between the close of nomination and the Annual General Meeting, or if there are insufficient nominees to fill all vacancies, the Board of Directors shall appoint a member to fill such vacancy until the next Annual General Meeting in accordance with the Rules of the Credit Union.

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED (“CREDIT UNION”) SPECIAL RESOLUTION FOR THE DIVESTMENT OF FHC INVESTMENTS LIMITED (“FHCIL”) PREAMBLE WHEREAS, in or about May 11th, 2010, at the 36th Annual General Meeting, the members of the then Churches Co-operative Credit Union Limited were advised that in accordance with the implementation of the new Pension Scheme, CCU Investments Limited was incorporated on November 25th, 2009, as a wholly owned subsidiary of Churches Co-operative Credit Union Limited; AND WHEREAS, following the merger of Churches Co-operative Credit Union Limited and GSB Cooperative Credit Union Limited, CCU Investments Limited was subsequently renamed FHC Investments Limited, which continued as a subsidiary of the merged Credit Union. AND WHEREAS, the Credit Union holds an ownership interest in FHCIL, which was established and maintained as an investment and business undertaking of the Credit Union; AND WHEREAS, the Board of Directors and Management have conducted ongoing reviews of the financial performance, strategic value, and long-term sustainability of FHCIL and have considered its impact on the financial position and operational priorities of the Credit Union; AND WHEREAS, FHCIL has experienced substantial financial losses over several financial periods, resulting in continued erosion of shareholder value and requiring ongoing consideration of the appropriateness of maintaining the Credit Union’s investment in the company; AND WHEREAS, having regard to the financial performance, strategic value and long-term sustainability of FHCIL, the Board of Directors has concluded that it is prudent and in the best interests of the Credit

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Union, its members, depositors and other stakeholders to pursue the divestment of up to one hundred per cent (100%) of the Credit Union’s ownership interest in FHCIL by way of sale; AND WHEREAS, the Board of Directors considers that any decision to dispose of or divest the Credit Union’s interest in FHCIL should be placed before the members for their consideration and approval in keeping with the principles of transparency, accountability and democratic member control; NOW THEREFORE BE IT RESOLVED THAT: 1. The members hereby acknowledge and note the financial performance of FHCIL and the challenges associated with its continued operation and ownership. 2. The members approve the proposed divestment by way of sale or other lawful disposition by the Credit Union of up to one hundred per cent (100%) of the shares and other ownership interests held by the Credit Union in FHC Investments Limited, together with any related rights, subject to the terms and conditions approved by the Board and all required regulatory, statutory and contractual approvals. 3. The Board of Directors is hereby authorized to take all necessary and appropriate steps to pursue and implement the divestment of up to one hundred per cent (100%) of the Credit Union’s ownership interest in FHCIL by way of sale. 4. Prior to the completion of any divestment transaction, the Board shall satisfy itself that: o the proposed transaction represents fair and reasonable value to the Credit Union; o appropriate financial, legal and regulatory due diligence has been undertaken; o all applicable regulatory approvals, consents and notifications have been obtained; o the transaction is consistent with the Credit Union’s strategic objectives and fiduciary responsibilities; and o the interests of members and depositors are adequately protected. BE IT RESOLVED THAT, subject to the Credit Union’s registered Rules, the Co-operative Societies Act, applicable regulations, directives and approvals of the relevant authorities, the members approve as a special resolution for the divestment by way of sale or other lawful disposition by the Credit Union of up to one hundred per cent (100%) of its shares and ownership interests in FHC Investments Limited.

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5. This Resolution shall be passed only if not less than seventy-five per cent (75%) of the valid votes cast by members entitled to vote and voting at the duly convened general meeting are in favour. The Board is authorized to negotiate and complete the transaction, provided that it first obtains appropriate legal, financial, tax, regulatory and independent valuation advice; identifies and manages all conflicts of interest; confirms the commercial reasonableness of the final terms; and obtains all required approvals, consents, releases and notifications. 6. The Board shall obtain an independent valuation or fairness opinion from a suitably qualified and independent adviser, having regard to FHCIL’s financial position, liabilities, contingent liabilities, assets, market conditions and any relevant restrictions on transfer. 7. Each director and officer shall disclose any direct or indirect interest in the proposed transaction or any prospective purchaser, shall abstain from deliberation and voting at Board level where required, and shall comply with the Credit Union’s conflict-of-interest policy, the registered Rules and applicable law. 8. This Resolution shall take effect immediately upon its approval as a special resolution at a duly convened general meeting of the Credit Union, whether an Annual General Meeting or a Special General Meeting, provided that all applicable statutory, regulatory and rule-based requirements have been satisfied.

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FHC CREDIT UNION CELEBRATES ITS MEMBERS Credit Union Week 2025 was commemorated across our branch network through the hosting of Members’ Appreciation Day in October, under the theme "Cooperation for a Prosperous World”. The event provided an opportunity to recognize and celebrate our valued members while expressing our appreciation for their continued support and loyalty. Members were warmly welcomed by our Branch Representatives and received tokens of appreciation, including gifts and goodies, as part of the day’s activities. 234

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CHRISTMAS TREAT AT THE BETHLEHEM CHILDREN’S HOME LABOUR DAY 2024 AsWe partproudly of our Christmas activities, FHC Foundation a specialon treat for the children partnered outreach with the 2023 FHCthe Civil Servants of the hosted Year Awardees Labour Day at to thesupport Bethlehem Children’s of Home, in partnership with FOSKA, Kremi, BluePlace Power Group and the the completion their impactful community project at Reddie’s of Safety. Kiwanis Clubwe of Young Professionals St. Andrewefforts, to enhance the experience forfor theitschildren. The initiative Together, contributed to the renovation enhancing the facility residents and provided an opportunity to share the joy and spirit of the ChristmasThis season with the children demonstrating our shared commitment to community upliftment. collaboration not onlythrough fellowship, thoughtful treats. The occasion was filled withour smiles and memorable as highlightsfun, theand dedication of these civil servants but also reflects continuous support moments for weinitiatives sought tothat bring warmth, joy,change. and cheer to the children during the festive season. bring positive

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LABOUR DAY 2025 Team FHC demonstrated its commitment to community development and service on Labour Day 2025 through a series of activities held across our branch network. Team members came together to give back to the communities we serve, lending their time, energy, and skills to various projects and initiatives. The day reflected our spirit of teamwork, love, and care as we worked alongside community members to improve and beautify shared spaces. Through these efforts, Team FHC reaffirmed its commitment to making a positive and lasting impact in the communities in which we live, work, and serve. 236

READ ACROSS JAMAICA & FINANCIAL LITERACY: INSPIRING YOUNG MINDS FHC proudly participated in Read Across Jamaica Day and Financial Literacy activities across our branch locations, engaging with children and inspiring them to dream big, learn confidently, and build strong foundations for their future. Through storytelling, meaningful conversations, and fun financial education activities, our teams encouraged young minds to discover the joy of reading while developing essential money-management skills. 237

ANNUAL GENERAL MEETING FHC proudly staged its 13th Annual General Meeting (AGM), bringing together Members, Directors, Management, and stakeholders to reflect on our achievements, review our performance, and look ahead to the opportunities that will shape our future. As we celebrate this milestone, we remain focused on building on our successes, embracing new opportunities, and creating greater value for our members.

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FHC INVESTMENTS LIMITED: CONNECTING, ENGAGING & BUILDING STRONGER PARTNERSHIPS FHC Investments hosted a special Corporate Mingle, bringing together valued clients and industry partners for an evening of meaningful conversations, relationship-building, and networking. The event provided an opportunity for FHC Investments to connect with clients beyond the office, gain valuable insights, and strengthen the partnerships that continue to drive shared success.

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JCCUL’S DELEGATES REPORT CJAMAICA CO-OPERATIVE CREDIT UNION LEAGUE LTD. 2025 CONVENTION & 84th ANNUAL GENERAL MEETING HIGHLIGHTS The 2025 Convention and 84th Annual General Meeting, held from June 5-8 at Montego Bay's Hilton Rose Hall Resort and Spa, concluded successfully. Aligned with the 2025 International Year of Cooperatives theme, “Co-operatives Build a Better World,” the event gathered credit union professionals and volunteers from across the island. The four-day program attracted credit union staff and volunteers from across Jamaica. In recognition of the International Year of Co-operatives, the convention expanded its reach by welcoming representatives from co-operatives beyond the financial sector. A dedicated Co-operative Village served as a central feature, showcasing the rich history of the co-operative movement and highlighting the services of key organizations operating within Jamaica and the wider Caribbean region. Drawing its guiding principle from the theme, “Rooted in History, Fuelled by Passion, Rising with Intent: The Future of Credit Unions and Co-operatives,” the convention structured its discourse around a dual imperative, to honour the foundational legacy of the co-operative movement while proactively forging a path forward. The event provided multiple learning and networking opportunities, including workshops, roundtables, a trade show, the JCCUL AGM, a NeXGen Youth Summit, and an Awards Gala. Social and networking events, such as a games’ night led by the NeXGen Change Makers and the President's Cocktail, further enhanced attendee engagement. Specialized professional gatherings were also featured, such as the Jamaica Association of Credit Union Managers’ (JACCUM) Annual General Meeting on Thursday, June 5. YOUTH SUMMIT – NEXGEN CHANGE MAKERS The third iteration of the NeXGen Youth Congress was held on Thursday, June 5. This one-day forum, tailored for credit union professionals aged 18–40, was supported by the young professionals' caucus.

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For the first time, participants were invited to attend two days of the broader four-day JCCUL convention. This expanded access allowed them to engage in convention workshops and networking events, and to participate in the Opening Ceremony's flag-raising segment. The sessions, operating under the theme “Fired Up for Change,” were led by guest speaker Krystal Tomlinson alongside the NeXGen Change Maker executive body and founder, Katrina Grant D’Aguilar. Ms. Tomlinson addressed the congress on manifesting and navigating change through dedication, action, and consistency. The group also received addresses from League President Andrea Messam, and the Group CEO Robin Levy. Following the presentations, attendees engaged in the congress's flagship activity: identifying specific areas within the credit union movement where operations, tactics, or objectives could be improved to better attract and serve members in the 18–40 demographic. The event concluded with the formal induction of participants into the NeXGen Change Makers caucus. OPENING CEREMONY & WORKSHOPS Friday, June 6, marked the official commencement of the Annual Convention and 84th Annual General Meeting. Attendees, including credit union board directors, senior managers, and JCCUL staff assembled, prominently displaying their affiliations through branded attire. The event commenced with a formal flag ceremony. Credit union volunteers, alongside members of the NeXGen Change Makers, paraded their respective credit union flags around the room before placing them on display for the remainder of the Opening Ceremony. Greetings were then delivered by JCCUL President Andrea Messam and Group CEO Robin Levy. Special recognition was extended to guest speaker Marlene Malahoo Forte, KC, MP, JP, Jamaica's High Commissioner and Attorney General, as well as to the invited exhibitors, for their valued contributions to the convention's success.

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Following the official proceedings, the energetic performance by the Children of the Drums provided a vibrant transition, setting an enthusiastic tone as delegates dispersed to explore the exhibition area. Tradeshow Participants The trade show participants were as follows: • • • • • • • • • • • • • • • •

Cuna Caribbean Insurance Jamaica Limited National Union of Co-operative Societies Limited Cumax Wealth Management Quality Network Co-operative Limited Centralized Strategic Services Limited Jamaica Co-operative Insurance Agency (JCIA) Jamaica Institute of Financial Services Shift Interactive, a subsidiary of CGR Communications Credit Union Brand Engineering (CUBE) Saint Mary’s University International Centre for Co-operative Management Symptai Consulting Limited Cipriani College of Labour and Co-operative Studies Bold Options Fragrances Novelty Gimmicks Limited CRIF Information Technology Solutions Frame Art Jamaica

After a brief break, the convention continued with a series of thought-provoking presentations. These sessions challenged traditional business practices and explored innovative regulatory approaches for the future. The speakers engaged are as follows: • Presenter: Jermaine Johnson, Motivational Speaker • Presenter: Erin Hancock, Program Manager, Co-operative Management Education (Sobey School of Business), Saint Mary’s College • Topic: “Co-operatives Building a Better World Sustainably in the IYC” • Presenter: Ayana Thomas, LL.B, Nunes Scholefield DeLeon & Co. • Topic: “From Conflict to Collaboration: Strategies to Avoid the IDT” • Panel Discussion 242

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Presenters: 1. Erin Hancock, Program Manager, Co-operative Management Education (Sobey School of Business), Saint Mary’s College. 2. Colin Bartholomew, Dean for Co-operative Studies and Manager for Innovation and Enterprise Development, Cipriani College of Labour and Co-operative Studies. 3. Sadie Dixon-Bennet, President, Mafoota Agricultural Co-operative (Jamaica) 4. Travell Mullings, Manager, Intermediary Relationships, Development Bank of Jamaica (DBJ) Topic: “The Future of Co-operatives (Co-operative Sustainability)” • Exhibitor Showcase (Main Stage) Presenters: CRIF Information Bureau Jamaica Topic: “Company, product and services update” & Symptai Consulting Limited Topic: “Smarter Compliance for Credit Unions” • Group Chat Presenters: Quality Network Co-operative & Cumax Wealth Management Company Topic: “Company, product and services update” While Friday’s agenda featured its own robust lineup, it is important to acknowledge a key addition from the previous day that resonated strongly with attendees. On Thursday, June 5, following the conclusion of the NeXGen Change Makers Youth Summit, esteemed attorney Gloria Brown presented a general session on Estate Planning. Ms. Brown’s expert insights provided crucial information on asset protection and wills. The session underscored the conference's commitment to addressing the diverse, lifelong needs of our community.

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JCCUL ANNUAL GENERAL MEETING The formal session of the 84th Annual General Meeting convened on Saturday, June 7, at the Hilton Rose Hall Resort & Spa, with delegates and alternates from credit unions across the island in attendance. Chaired by President Messam, the meeting commenced with her welcome address and a summary of the 2024 Board Report. The agenda proceeded with the presentation of all requisite reports, including those from the Treasurer, the Supervisory Committee, and the Nominating Committee. The audited financial statements were also tabled for review. Distribution of Surplus The Delegates agreed to the distribution of the surplus of one hundred and seventeen million, seven hundred and thirty thousand dollars ($117,730,000). The Delegates also voted for the maximum liability of the League to be set at $5 billion. Election of Officers The Delegates elected the following Directors of the JCCUL Board for 2025: Peer Group Elections The following persons were elected by their peer groups: Name Andrea Messam Alexander Bourne Bornette Donaldson Hector Stephenson Martin Blackwood

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Credit Union Broadcast & Allied Services Manchester C&WJ Infiniti Portland

Category Small Medium Large Large CU Managers Rep.

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At Large Category The Committee nominates the following persons to fill the vacancies in the ‘At Large’ category: Name Lambert Johnson Annmarie Dussard

Credit Union Infiniti National & Community

Category At Large At Large

Yrs. 2 3

The Delegates elected the following members to serve on the Supervisory Committee: Name Mary Dick Andrea Graveney Karen Robotham-Teape Barrington Hibbert Nicola Reid

Credit Union JTA Co-operative First Heritage Co-operative Broadcast & Allied Services Co-operative NAJ & Health Services Co-operative Palisadoes Co-operative

Resolutions Thirteen (13) resolutions were passed at the meeting as follows: The Anniversary resolutions were as follows: • • • •

Postal and Partners Co-op Credit Union – 65th anniversary resolution Manchester Co-op Credit Union – 73rd anniversary resolution BJ Staff Co-op Credit Union – 60th anniversary resolution Jamaica Police Co-op Credit Union – 70th anniversary resolution

The Congratulatory resolutions were as follows: • • • •

Postal and Partners Co-op Credit Union – Mr. Clarence James Frater (BH(M)), National Honouree Broadcast & Allied Co-op Credit Union – Honouring Ms. Andrea Messam JPS & Partners Co-op Credit Union – Mr. Derrick Tulloch (BH(L)), National Honouree JPS & Partners Co-op Credit Union – Honouring Ms. Joydene Jarrett

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JCCUL’S DELEGATES REPORT

The Condolence resolutions were as follows: • • • • •

Manchester Co-op Credit Union – Mr. Ivan Theophilus Green Manchester Co-op Credit Union – Mr. Winston Delano Ellis Trelawny Co-op Credit Union – Mr. Ashwick Simms JPS & Partners Co-op Credit Union – Mr. Albert ‘Tony’ Dawkins NAJ & Health Services CU – Ms. Murleene Davis

The League Rule Changes were as follows: 1. Add to “Interpretation”: “Associate Financial Societies and Partners” means Non-Credit Union financial cooperatives, friendly societies, thrift societies and industrial and provident societies. 2. Accepting Associate Financial Societies and Partners of the League. 3. Allowing membership in the League to be approved by a Society’s Board and ratified and the next AGM of the Society. 4. Each Credit Union may appoint up to four alternate delegates. 5. Replacing “Credit Union Fund Management Company” with Cumax Wealth Management Limited. 6. Deleting the section ‘until such time as the Stabilization Fund is registered as a legal entity”. 7. Removing the Group CEO of the League and Cumax CEO as Stabilization Committee Members (they will continue as attendees). CREDIT UNION AWARDS BANQUET The 2025 Credit Union Awards Banquet was held on June 7 under the theme "Classic Bond 007 Affair." Attendees, embracing the motif, arrived in sophisticated attire to celebrate the outstanding achievements of credit unions during the preceding operational year. The evening provided continuous entertainment, featuring a dynamic program that immersed guests in the evening's distinctive mission-inspired atmosphere.

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JCCUL’S DELEGATES REPORT

The following persons and credit unions received awards: CPD ONLINE AWARDS 2024 Awardee

Award

Credit Union

Ramona Downe

Top User WINNER: Top Performing Credit Union RUNNER–UP: Top Performing Credit Union

Jamaica Police Co-operative Postal & Partners Co-operative C&WJ Co-operative

SECTIONAL AWARDS 2024 Award

Credit Union

OJ Thorbourne Award for Corporate Social Responsibility

WINNER: Portland Co-operative RUNNER-UP: Jamaica Police Co- operative

G. Arthur Brown Award for Corporate Governance

WINNER: Grace Co-operative RUNNER-UP: Jamaica Police Co-operative

Lorrel Bruce Award for Service Excellence

WINNER: Postal & Partners Co- operative RUNNER-UP: Grace Co-operative

Stanley Moore Award for Financial Education and Empowerment

WINNER: Jamaica Police Co-operative RUNNER-UP: JTA Co-operative

D.T. Brown Award for Risk Management

WINNER: Grace Co-operative RUNNER-UP: Jamaica Police Co-operative

McArthur Palmer Award for Technological Innovation

WINNER: Jamaica Police Co-operative RUNNER-UP: JTA Co-operative

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JCCUL’S DELEGATES REPORT

NEXGEN CHANGE MAKERS YOUTH SUMMIT - 2025 Award

Credit Union

Highest Registration

Jamaica Police Co-operative

Most Involved Credit Union

Infiniti Co-operative

CREDIT UNION OF THE YEAR 2024 Award

Credit Union

Renford Douglas (Large-sized) Credit Union

WINNER: Jamaica Police Co-operative

of the Year

RUNNER-UP: JTA Co-operative

Paul Thompson (Medium-sized) Credit Union of the Year

WINNER: Portland Co-operative RUNNER-UP: JDF Co-operative

Fr. John Peter Sullivan (Small-sized) Credit Union of the Year

WINNER: Grace Co-operative RUNNER-UP: Postal & Partners Co- operative

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BRANCH & UNIT MANAGERS BRANCHES

ADDRESS

BRANCH MANAGERS

Kingston & 8-10 Eureka Road Sheldon Christian St. Andrew Kingston 5 Senior Branch Manager 20 Dominica Drive Racquel Walker Kingston 5

10 East Avenue Trudian Stewart Gordon Kingston 4

St. Catherine

Lot 57 West Trade Way Portmore Town Centre

Norman Williams

Unit 13 Oasis Shopping Centre 6 March Pen Road Spanish Town

Aljay Cole

St. Thomas

2 Debtor’s Lane Charles Taylor Morant Bay

Clarendon

Shops 5 & 6 Bargain Village Plaza May Pen

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Shops 8 & 9, East Side Plaza 35 East Street Old Harbour

Tania Oglesby

BRANCH & UNIT MANAGERS

Manchester

2 Perth Road Sharna Hutchinson-Scott Mandeville

St. James

21 Union Street Tenesha Crooks (Acting) Montego Bay

Andrew Francis Manager – Finance & Treasury Sophia Harvey Manager - Human Resource Development Alleesa Matherson Manager - Centralized Loans Unit Andre Johnson Manager - Credit Risk Neeva Nugent Manager - Credit Administration & Loan Recovery Melissa Miller-Benjamin Manager - Operations & Shared Services Tameica Anderson Manager - Internal Audit Antoinette Robinson Manager - Finance FHC Investments Limited Nadine Dyer Data Protection Officer

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PARLIAMENTARY RULES 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 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 then 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 on 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 that has occurred. Any member may formally second any motion or amendment and reserve his speech until a later period in the debate.

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PARLIAMENTARY RULES

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. 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.

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PARLIAMENTARY RULES

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 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.

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REGISTER OF DEATHS Adassa Adolphus Albert Albert Alcia Alfred Alton Amos Andrea Anthony Aon Arnette Arthens Aston Barbara Barbara Barbara Benjamin Beverley Beverley Boysie Calvin Camille Camille Carmen Carol Caselda Cecelyn Cecile Cheryl Christiana Christine Cindelyn Clarence Claris Claudette Claudia

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Foster Melbourne Hinds Sayles Haynes Linton Dawes Chambers Matthews Petrie Bascoe Sawyers Brown Brown Ellis Brown Robinson-Barrett Chisholm Smith-Hinds Coley McDonald Palmer Clennon-Hilmy Sinclair Fenton White Lawrence-Hall Stephens Vauhgan Hopwood Valentine Myers Thompson Bailey Brown Reid Ricketts

Clive Cloyd Corrine Courtenay Courtney Cynthia Dalton Daphne David Dawn Delores Delores Deloris Delroy Denise Denzil Devon Donnet Dorothy Dorothy Dorothy Dykes Edith Edwards Edwin Ellalyn Ena Errol Esther Etta Eualee Eunice Everitt Eyton Flavia Fonceta Francella

Brown Brown Shepherd-Thomas Morrison Bragg-Love Rose Samuels Collins Henry Blair Tomlinson Barton Pratt-Brown Hines Ferguson Kerr Taylor Mitchell Foster Williams Ferron Watson-Greenwood Farquharson Robinson Perkins Brown Hawes Hughes Walcott King Lewis Reeves Davis Johnson-Black Ferguson Dickson Grey Hanson-Whittaker

Garth Gentles George Georgia Georgiana Gerald Gilbert Gloria Gloria Gregory Gwendolyn Harry Hazel Hazel Hezekiah Ian Icilda Jacqueline Jacqueline Jacqueline Jananet Janyce Joan Joan John Joseph Joycelyn Joycelyn Julia Juliet Junant Jywanzo Kathleen Kayleigh Kevin Kevin Kristina

Taylor Mott Arbouine Knight Dodd Brown Donaldson Robinson Hibbert McLaughlin Bailey Simpson Morrison Thompson McLeod Scarlett Noteman Haughton Brown-Simpson Peart Boothe Robinson Dennis Campbell McDonald Malvo James Reader Richards Webber Greer Je-Annie Barnes Jarrett Purkiss Dunn Buckle

Larry Lebert Leroy Lesleen Leslie Lloyd Lloyd Lucilda Lyden Lynden Magdalene Marcia Marguerita Marie Mark Marlene Maureen Mavis Mavis Maxine Melvin Merdella Merrick Mitzie Myrlin Myrna Myrna Myrna Neiva Newton Noel Norma Norma Norma Oneil Orvil Oswald

Anderson Wright Findlay Edwards Williams Rankine Phillips Gillespie Hall Hall McLeish Johnson Welsh-Smith Parnell Brown Stewart-Hayles Dillop Anderson Barnes Taylor Newsome Grant Harrison Stewart Williams Samuels-Gordon Rowland Lambert Reid Williamson James Ormsby Richards Gravesandy Ferril Burrel Davis

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Otiancia Paul Paul Pauline Pauline Pearl Pearline Peter Phillip Raymond Rayna Relva Rodney Roechester Rohan Rose Rose Rosemarie Rowena Roy Roy Roy Ruel Rupert Rupert Samuel Sandra Sandrene Septimus Sharon Sharon Sherian Sherry Sophia Sophia Stainton Tasheena

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Headad Clarke Soman Grant Edwards Humphrey Griffiths Shakespeare Brown McKenzie Bailey Richards Jones Francis Redman Lawrence Pinnock Harris Sutton-Dixon Edwards Sutherland Thomas Bryan Savage Johnson Watson Naines Young Mason Williams Hinds Kerr Coley Bucknor-Hall Gayle Smith Campbell

Teshian Trevor Trevor Valentine Valentine Valerie Valerie Valrie Vashti Veronica Vincent Violet Virgie Wansymore William William Winston Winston Yvonne Yvonne

Tucker-Scott Willacy Gokul Long Long Lindsay Dixon Campbell-Williamson Davis-Hutchinson Vincent McKennis Wesley Richards Gordon Wallace Thomas Stewart Graham Hutchinson-Jones Gordon

PRAYER OF ST. FRANCIS OF ASSISI 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. 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

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