EduCom Co-operative 2020 Annual Report - M Squared Creative Studios

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OUR

MISSION

To improve the quality of life of our members and their families, through the provision of personalized financial solutions and advice

OUR

VISION

EduCom Co-operative Credit Union is a member-centric, financially-sound and technologically enhanced employer of choice; and is the top Credit Union in Jamaica in member value, compliance and satisfaction.

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CREDIT UNION

PRAYER

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.

Oh 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 pardoning that we are pardoned; And it is in dying that we are born to eternal life.

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TABLE OF

CONTENT Notice of Meeting

1

Agenda

2

President’s Message

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Chief Executive Officer’s Message

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Minutes of the Previous Annual General Meeting

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Directors’ Profiles

23

Board of Directors’ Report

27

Treasurer’s Report

39

Supervisory Committee’s Report

48

Credit Committee’s Report

52

Nomination Committee’s Report

55

Management Team

57

Management and Staff - Names & Positions list

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EduCom in the Community

66

Financial Statements

72

Resolutions for Rule Changes

160

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NOTICE OF ANNUAL

GENERAL MEETING NOTICE IS HEREBY GIVEN that the 6th Annual General Meeting of EduCom Co-operative Credit Union Limited will be held virtually on Wednesday, the 28th day of April 2021, commencing at 1:00 p.m.

The purpose of the meeting is to examine the operations of the Credit Union for Year 2020 and to pass appropriate Resolutions.

Members will be able to register online by visiting the link below: www.educomco-op.com/agm In order to comply with the measures entailed in the Disaster Risk Management Orders issued by the Government, and with respect to the Department of Co-operatives and Friendly Societies (DCFS) and Jamaica Co-operative Credit Union Limited (JCCUL), the Annual General Meeting will be held virtually. As such, members will be able to join the meeting live via Zoom Conference. The link will be made available prior to the meeting.

BY ORDER OF THE BOARD

_________________________ Sonia Bennett Secretary

Dated this 28th day of March 2021

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AGENDA 1. Ascertaining that a quorum is present 2. Resolutions 3. Call to Order 4. Opening Prayer 5. Obituaries 6. Authority to Convene and Notice of Meeting 7. Apologies for Absence 8. Welcome and Opening Remarks 9. Minutes of the last Annual General Meeting 10. Reports of:

(a) Board of Directors

(b) Treasurer and Auditor

(c) Supervisory Committee

(d) Credit Committee

(e) Nominations Committee

11. Election to:

(a) Board of Directors

(b) Credit Committee

(c) Supervisory Committee

12. 11. Appropriation of Surplus 13. Fixing a Maximum Liability 14. Any Other Business 15. Termination

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MESSAGE FROM THE

PRESIDENT

You will agree with me that since early 2020, what we considered our normal lives has changed drastically and we are now living in extraordinary times. The outbreak of the COVID-19 virus is rollercoasting the international community, and Jamaica and the financial sector have not been spared.

For the first time in our Credit Union’s history, the loan portfolio declined. In previous years, we had to strategize on how to curb borrowing, while in 2020 we watched as our liquidity increased month over month – loan repayment in successive months outperformed loans disbursed. Members shied away from borrowing as they, understandably, adopted a conservative approach rather than committing themselves to credit. The result was that our loan portfolio declined by 1.7% when compared with 2019. The challenges of the pandemic were indeed real to EduCom and were reflected in our overall performance in 2020.

Notwithstanding the challenges of the time, we exceeded our internal growth target in assets, grew savings by 10.9% and kept delinquency below the 5% standard of the industry. We were particularly pleased with the choices we made in relation to our members who fell on hard times during the

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peak of the pandemic, which eventually led to the country being locked down. At the height of the pandemic, we had more than 1,300 loan accounts that were on moratoria. Members were made aware of the opportunity to write to us and share their experiences on how the pandemic was negatively impacting their income. This enabled us to make the necessary adjustments to their repayment schedule, so that there was one less thing for them to worry about at a time when there would have been many. Though this came at a price to the Credit Union, in terms of deferred interest income, we remained buoyant that this strategic choice was one that was consistent with our mission, “to improve the quality of life of our members and their families, through the provision of personalized financial solutions and advice”, and was therefore warranted.

As we prepare for the years ahead (both short and long-term), there are lessons that we have learnt from 2020. These lessons will prepare us for an immediate future that will remain challenging, but having had the 2020 experience, we are in a better position to make the necessary adjustments that will allow us to seize on the opportunities available. You should continue to expect consistency in our strategy, transparency in our communications, and for us to deliver on commitments we have given you. We have embraced our current position and have challenged management to place a

greater emphasis on Return on Assets (ROA) for 2021. This is Year 1 in a transitional period in which we want to see the returns that the Credit Union is making being more in line with standards in the industry. I am confident that management will rise to the occasion.

We remain focused on our mission and vision, to work hard at creating value for you our members, by pursuing what we believe will continue to be a rewarding business proposition. We will continue to strive to provide you with competitive returns on your invested funds and simultaneously offer a suite of loan products that are not only tailored to your needs, but offered to you at prevailing market-driven rates.

I thank you for the opportunity to serve in this capacity and encourage you to continue to support our Credit Union.

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President Ian McNaughton

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MESSAGE FROM

THE CEO

Like most of you, I consider 2020 to be a year that is incomparable in our lifetime. With the coronavirus pandemic, everyone has had to adapt and evolve through very uncertain times, and we certainly were no different. Although the year was significantly challenging, not least in such a small economy, where many of our members were particularly hard-hit by the coronavirus, lockdowns and economic limitations, we were pleased to have a year in which we showed positive results in most of the Key Performing Indicators (KPIs).

opportunity to improve the service delivery through digital transformation. The thrust is toward deepening existing relationships with our members, acknowledging that this will be determined by how well we are able to identify, understand, and respond to your needs throughout your full life cycle. We know that our members would prefer to work with a financial institution that understands what’s currently happening in their lives and we are bent on working closely with you, having nurtured the data and secured the information to do so.

We are particularly proud of all of our team members who showed tremendous dedication, commitment and adaptability in striving to deliver for our members under unusual and difficult circumstances. My thanks and appreciation go out to you, as well as to all our valued members with whom we worked throughout the year to make their experience with us better, even in these trying times. In acknowledgement of the pandemic and the challenges it represents, we were quick to identify the team members who could function effectively from home and provided the resources so that they could do just that.

As we embrace 2021 and beyond, and whilst the future of the global economy continues to be uncertain, one strategic choice that we are looking forward to is the implementation of our new banking software. As the financial sector continues to grow and evolve, we continue to relish the chance to provide our members with market driven products and services to enhance the member experience. In recognition of the competitiveness of the market and the drive to serve our members, we know that we will not be able to do so without a more advance banking platform.

There is no question that increasingly, there is a growing gap between shifting members’ needs and the services that we currently offer. Nearly half of our members surveyed during our 2020 Member Satisfaction Survey, believe that there is the need for greater online services. We are determined to address this concern, knowing that if we are unable to do so, members will eventually take their business elsewhere, when given a better, more relevant offer. This service gap has been recognized as an increasing 5

The purpose of this digital banking transformation strategy is to leverage technology and improved processes to deliver an exceptional member user experience. At its optimum level, the deployment of this strategy will equally concede that the end-users will include both members and employees. In acknowledgement of this fact, we are getting representation from the end users from the outset, with the intention that the interests of both internal and external constituencies are addressed in the development and deployment

of the digital banking transformation roadmap.

We are cognizant that digital banking transformation does not have an endpoint, since the process is evolutionary, with new technologies, processes, member expectations, and competition impacting what is required to succeed. We are also aware that there is a direct link between digital banking maturity and improved financial performance and recognize that this correlation requires that we go beyond deploying new technology.

The emphasis on this digital transformation, while it begins with a new banking platform, will include digital-focused data and analytics, business strategy, organizational structure, talent management, culture, and leadership that are all aligned. We look forward to working together, with you our members, to achieve our goals.

Finally, I would like to again thank the EduCom team for their ongoing commitment to providing quality service to our members. In so doing, we are building relationships with our members, enhancing their trust and confidence, enabling growth in the key performance indicators, that assures value creation for our members.

I would also like to thank our members for your continued support of EduCom, and our volunteers for their selflessness. It is indeed my great pleasure, privilege and pride to stay the course with you, as we build upon the EduCom brand. Do continue to shape your financial future with us. Thank you.

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Elvis King Chief Executive Officer 6

MINUTES OF PREVIOUS

ANNUAL GENERAL MEETING Minutes of the 5th Annual General meeting of the Educom Co-operative Credit Union Limited held on Monday, November 2, 2020 at the Kenneth Rattray Conference Room, Jamaica Conference Centre, Kingston.

Members of the Board present were: Dr. Mark Nicely

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President

Stacy-Ann Farquharson*

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1st Vice President

Ian McNaughton

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2nd Vice President

Hector Stephenson

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Secretary

Ruel Nelson

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Treasurer

Charles O’Connor

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Director

Ian Sutherland*

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Director

Hilton Blenman*

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Director

Sonia Bennett

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Director

Janice Green

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Director

Coleen Lewis

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Director

Kurt Vaz

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Chairman, Credit Committee

Deloris Mollison

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Secretary, Credit Committee

Rachelle McKenzie

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Member, Credit Committee

Shashu Payne*

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Member, Credit Committee

Hopeton Newell

- Member, Credit Committee

Tasha Manley

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Chairman, Sup. Committee

Erica Haughton*

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Secretary, Sup. Committee

Clive McLean

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Member, Sup. Committee

Andrew Smith*

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Member, Sup. Committee

Loraine Gordon-Pinnock

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Member, Sup. Committee

Also present were:

*Members attended via zoom platform.

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ASCERTAINMENT OF QUORUM The Chairman advised that the meeting required 100 persons to be present to be duly constituted. He reported that at 1:05 p.m. there were 140 persons registered, as such the meeting was quorate.

OPENING PRAYER The Chairman, Dr. Mark Nicely invited the meeting to read the Prayer of St. Francis of Assisi, also called the Credit Union Prayer, which was to be found at the front of the booklet. The Chairman led the meeting in the invocation.

OBITUARIES The Secretary, Mr. Hector Stephenson directed the meeting’s attention to the passing of fellow co-operators of our Credit Union list, which was to be found on page 160 of the Annual Report. The Secretary reported that several of our valued members made their transition since the last Annual General Meeting. He expressed deepest sympathies to the members' families, to those husbands, wives, children and friends who have suffered such loss. He also mentioned that a former volunteer, who served on the Supervisory Committee, Ms. Gurleydean Watson passed on in 2019. The Secretary acknowledged the many years of valiant service and the sacrifices she made during her tenure. Other members who had passed during the year were also noted.

The Secretary, Mr. Hector Stephenson informed the meeting of an adjustment on the Agenda.

The meeting was invited to observe a minute of silence as a mark of respect.

AUTHORITY TO CONVENE AND NOTICE OF MEETING The Secretary, Mr. Hector Stephenson read the authority to convene the meeting that was received from the Registrar of Co-operatives and Friendly Societies. This was to be found on page 71 of the Annual Report.

WELCOME AND OPENING REMARKS The Chairman extended a warm welcome to those present physically and virtually by way of utilising the zoom platform at the Annual General Meeting.

CALL TO ORDER The meeting was called to order at 1:05 p.m. by the President, Dr. Mark Nicely, presiding as Chairman.

He then proceeded to read the notice convening the meeting.

APOLOGIES FOR ABSENCE Apologies were tendered on behalf of the following persons: Mr. Ian Sutherland, Mr. Hilton Blenman and Ms. Stacey-Ann Farquharson who attended the meeting virtually.

The Chairman commented on the new time in our history, and how our vocabulary has had to be adjusted with some common words like "lockdown", "postponed", "cancelled" and "quarantine". Also, members were being told to wear a mask, sanitize, and to maintain physical distance.

He stated that EduCom was mindful of the times it was operating in. Even though the Credit Union was in a pandemic, having to deal with COVID-19, there was also the significant levels of crime and violence in our country. He noted the weather system that had modified

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our roadways and caused severe flooding for many persons. He added, that just as Educom was currently in a trying period, persons outside of the Credit Union were also facing difficult times.

Continuing, the Chairman stated that EduCom was aware that there were persons who had lost their jobs, and the Credit Union is responding.

He noted that even persons who retained their jobs were finding it difficult to cope.

Despite the pandemic, the other reality was the fact that members had to be off the road by a certain time. Hence effort would be made to get through the business efficiently so that all could get home safely.

MINUTES OF THE 4TH ANNUAL GENERAL MEETING The Minutes of the 4th Annual General Meeting held on May 4, 2019 having been circulated, was taken as read on a motion by Mr. Ray Howell, and were duly seconded by Ms. Janice Green and carried.

AMENDMENTS TO THE MINUTES Page 7, under the heading attendance, the name ‘Mrs. Janice Green’ was missing from the list of Board Members. The Secretary asked that the name ‘Mrs. Janice Green’ be added thereto.

Page 9, in the right column, second paragraph, “The Credit Union had performed well organically, … to close at $6.700M moving from $6.124B recorded …” to read “$6.700B moving from $6.12B recorded …”.

CONFIRMATION OF THE MINUTES The Minutes was confirmed on a motion by Mr. Ray Howell, were duly seconded by Mr. Hopeton Newell and carried.

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MATTERS ARISING There were no matters arising from the Minutes.

The Chairman, at this stage, paused to extend special welcome to a number of individuals as follows: Mr. Alvin Williams and Ms. Karen Lyttle (Department of Co-operatives and Friendly Societies), Mrs. Jennifer Hibbert and Mr. Ricardo Laird (External Auditors, BDO), and Mr. Ray Howell (President, TIP Friendly Society).

REVIEW OF REPORTS BOARD OF DIRECTORS' REPORT The Chairman presented the above-mentioned report and highlighted the following: The Chairman acknowledged that EduCom was operating in difficult times and as a Credit Union, the Board and Management continue to do their best, to serve our members efficiently.

Economic and Social Overview The 2019 calendar year ended with the Statistical Institute of Jamaica (STATIN) reporting that inflation closed at 6.2% compared with 2.4% in 2018, Gross Domestic Product grew at an estimated 0.9% compared with 1.2% in 2018, and unemployment closed the year at 7.2% compared with 8.7% experienced in 2018. The Jamaican Dollar depreciated by 3.8% against the US dollar, to close at J$132.57 to US$1.00 over the period.

Continuing, the Chairman stated that the year under review had been unpredictable and unstable as the 90 Day Treasury Bill started at 2.27% and closed the year at a low of 1.32%.

Also, the year 2019 could be assumed as a turbulent year. As such, Management and the Board collectively had to be very prudent

and cautious in terms of how it conducted the investment arm of the business.

robust system in place to assist members, and help them overcome these kinds of difficulties.

Legislation EduCom continued to be in preparation mode ahead of the Bank of Jamaica (BOJ) becoming the regulators. The Board had empowered a committee to take charge and to monitor that portfolio responsibility. The Chairman said he was particularly pleased to report on the progress being made to conform with most of the requirements, and that the reports that had been submitted had all been received as satisfactory. The Chairman informed that the Credit Union Regulations would be established as the Bank of Jamaica (Credit Union) Act.

Operating Income for the period under review, closed at $914.3M, a growth of 2.1% over the performance of $895.5M in 2018.

The marginal increase in operating income reflected declining interest rates experienced throughout the year.

2019’s Performance The Chairman proceeded to report on the key indicators that were used to measure the Credit Union’s performance in 2019, which were as follows: EduCom had performed well once more, reflecting growth of 8.7% in total assets over 2018’s performance, moving from $9.064B to $9.850B, savings closed at $8.055B reflecting an increase of 9.03% over the $7.388B recorded the previous year. Net loans increased by 15.9% to close at $7.763B, moving from $6.694B recorded in 2018.

The Chairman proceeded to report that EduCom continued to perform well in its delinquency levels, despite delinquency increasing to 3.5%, moving from 3.0% in 2018, given the Credit Union Movement’s standard of 5.0%. He emphasized that the Credit Union should not take comfort with a 3.5% achievement. He stated that the Board took the matter of delinquency very seriously and was extremely strident in terms of treating with this issue. He remarked that EduCom has a

Operations Noticeable Achievements & Award The Chairman was pleased to report that in 2019, EduCom was awarded the coveted prize of ‘Mega Credit Union of the Year’, an accomplishment of which we are most proud.

He declared that without the loyal support of our members, coupled with the hardworking staff and volunteers, EduCom could not have achieved that highly regarded industry recognition.

Enterprise Risk Management The Chairman proceeded to state that risk management has become extremely important in the industry. He announced that EduCom’s achievements were demonstrated in the following areas: •

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•

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The implementation of its Enterprise Risk Management (ERM) framework Development of a Corporate Compliance Programme Development of Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) Increased training in corporate governance

Strategy Statement EduCom would continue its strategic focus for the organization over the next three-year planning cycle with a view to:

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• Expanding membership through target marketing and direct recruitment of untapped businesses within the existing bond.

• Increasing member utilization of services through effective public education.

• Employee Engagement - The areas of focus were; the team's satisfaction with place of work and teamwork. The score received reflected that 75% of the team members felt proud to tell people that they work at EduCom; 73% of the team believed that teamwork was valued at EduCom and 63% reported that they would recommend EduCom as a great place to work.

• Increasing Member Value by understanding individual needs and providing personalized financial solutions.

• Increasing effectiveness, by engendering a culture of analytics and risk and research based decision-making.

• Increasing operational efficiencies and service delivery • Strengthening our execution capabilities, through alignment and networking.

High Level Performance Indicators and Targets The Chairman proceeded to report on the high-level performance indicators and targets that the Credit Union had achieved during the year under review: • Member Value – The Board focused its efforts on improving member value by understanding individual needs and providing personalized financial solutions.

The Board also decided that the factors pertinent were interest paid to the members, interest rate charged on loans, dividends paid, and fees charged. EduCom compared its fees, rates, and dividends to that of the market and were pleased to report that the Credit Union had surpassed its first-year target on this strategic metric.

• Member Satisfaction - EduCom’s objective is to improve member satisfaction to 90%

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satisfaction level by 2021. At the end of 2019, EduCom had surpassed the first-year target with a weighted satisfaction score of 75%.

Business Process Review and Optimization The Chairman told the meeting that EduCom had begun the process of procuring a new Information Technology banking platform to; enhance its operational efficiencies, providing greater convenience, securing members’ savings, and improving the turnaround time to our members.

Outreach The Credit Union continued to engage its members by providing meaningful assistance to several institutions, charitable organizations, and individuals. Notwithstanding COVID-19, EduCom remained focused on that programme. Worthy of note, was the support the Credit Union continued to give to the Albert Street Basic School, an institution it has adopted and over the years, has improved on a sustained basis.

Queries from the Board Report a)

Business Process Review and Optimization Mr. Ray Howell sought an update on the funds/capital to undertake the project.

The CEO, Mr. Elvis King informed that EduCom intends to come to the membership with a share offer at very competitive rate.

b) Mega Credit Union of the Year Award A member asked the Chairman to inform the meeting of the requirements EduCom had to meet to achieve the Mega Credit Union of the Year Award.

Mr. Elvis King explained that the Jamaica Co-operative Credit Union League (JCCUL) used the PEARLS Ratios to assess the Credit Unions financial performance, also the audited financial report must be ready on time and submitted by the 31st of March each year.

In closing, the Chairman introduced the members of the Board of Directors, Credit and Supervisory Committees to the meeting.

There being no further questions on the Board report, it was adopted on a motion by Mr. Clive McLean, duly seconded by Ms. Pauline Richards and carried.

Continuing, the Chairman proceeded to invite the Treasurer, Mr. Ruel Nelson to lead the meeting through the following reports: • Registrar’s Report • Auditor’s Report • Treasurer’s Report REGISTRAR’S REPORT The Registrar’s report was tabled and noted.

TREASURER AND AUDITOR’S REPORT The Treasurer invited the External Auditor from BDO, Mrs. Jennifer Hibbert to present their findings of their assessment of the Credit Union’s financial affairs.

AUDITOR’S REPORT Mrs. Jennifer Hibbert read the Independent Auditor’s report on the Credit Union’s financial affairs for the year ended December 2019.

TREASURER’S REPORT The Treasurer’s report was taken as read on a motion by Mr. Ian McNaughton, duly seconded

by Mr. Kurt Vaz and carried.

Mr. Ruel Nelson, Treasurer, reported that EduCom had another challenging but good year. The Credit Union produced fairly good results in terms of its overall financial performance when compared to the previous year’s financial outturn. The Credit Union’s financial performance was achieved against the background of significant changes in the financial market and the entrance of new players. Despite this, the Credit Union performed creditably in terms of its core business – that of disbursement of loans to members. This resulted in an increase of 15.9% in the net loan portfolio over the previous year. This was achieved despite the competitive pressures by other players in the industry. Albeit the challenges encountered, EduCom’s performance met and, in most cases, exceeded the key financial indicators as measured against the PEARLS standards used by the Jamaica Co-operative Credit Union League (JCCUL), as a means of assessment.

Mr. Ruel Nelson then proceeded to give an abridged version of the financial performance for the year 2019 as follows: Operating Performance Surplus - Despite another challenging year, EduCom achieved a successful performance with a surplus of $104.8M compared to $126.6M recorded in the corresponding period 2018. EduCom was able to achieve that level of surplus as it focused on; expanding the ‘bond’, utlilizing a direct sales thrust through the Business Development Officers (BDO), and the implementation of a direct marketing and sales culture.

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Loans – The net total loans increased by approximately $1.06B, closing the year at $7.76B to represent a 15.9% increase in the loan portfolio.

During the year under review, EduCom continued its drive to try to defray some of its costs that it would previously have absorbed, by adding non-interest income to its earnings, using a transactional based approach that would affect members who utilized the services. With this initiative, EduCom realized total non-interest income of $177.5M from loan processing, ATM, and management fees on scheme loans, when compared to $148.1M earned in 2018.

Operating Expenses increased to $788.6M in 2019 from $727.5M in 2018. This reflected an 8.4% increase or $61.1M. The main contributing factors of this increase were the additional costs from inflationary factors.

Portfolio Performance Total Assets – Total Assets increased to $9.850B in 2019, an overall increase of $785.6M or 8.7% compared to $9.064B in 2018.

Delinquency - Management continued to be successful in its objective to keep the delinquency rate low, through the measures that were implemented to combat the very high delinquency rate of 7.7% experienced in 2016.

The Credit Union achieved a delinquency rate of 3.50%, which was below the established benchmark of 5%, even though it compared unfavourably to 2018 - 3.04%.

Members’ Savings increased to $8.06B, a 9.0% growth over the period, when compared to $7.39B in 2018. EduCom however, did not achieve its objective to satisfy its loan demand from members’ savings. Our Credit Union would continue to offer attractive rates on

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savings products to maintain the gap between the total loan portfolio and the total members’ savings.

Queries from the Treasurer’s Report a) Lay offs Mr. Michael Gentles enquired of the Treasurer the reason for laying off staff.

The CEO, Mr. Elvis King informed that the Credit Union had done some restructuring in 2019, and having examined a number of positions, found that they would not be in line with the Credit Union’s strategic focus, hence the reason for some staff being laid off.

b) Non-Interest Income Ms. Patricia Reid-Waugh noted that there was a significant decrease in rental income, which moved from $6.0M in 2018 to $2.7M in 2019.

The Treasurer informed that there was a sale of the Old Harbour property, and as such, EduCom was no longer receiving that income.

The Treasurer’s report was accepted on a motion

by Mr. Charles O’Connor, duly seconded by Mr. Hopeton Newell and unanimously carried.

CREDIT COMMITTEE’S REPORT The Chairman invited Mr. Kurt Vaz, Chairman of the Committee to present the Committee’s Report.

Mr. Vaz reported that the Credit Union loan portfolio at the end of December 2019 was $7.78B, which represented a net increase of 15.9% over the corresponding financial period.

Total loans disbursed during the period under review was $4.57B, which represented a net increase of $0.69B or 17.9% over the

corresponding period 2018. The lead products in the portfolio mix were Secured Loans which represented 42%, Mortgage Loan and Unsecured Loans 18% each and Within Savings Loans 14.05%. These were followed by Scheme Loans 4% and Staff Loans - Concessionary Rate 2%.

The Chairman proceeded with the report by first recognizing the other members of the Committee:

Mr. Michael Brydson

Mr. Frederick Mills

Mr. Tanjay Holmes

Mr. Hilton Blenman

The Committee expressed appreciation and thanks to Mrs. Sandra Smith-Dockery for her commitment to the Credit Union and the late Mr. Clayton McEwan, who also served the Credit Committee with apt direction before being promoted to the Board of Directors in February 2020.

Board of Directors The following Directors retired at the Annual General Meeting:

There being no questions on the report, the Committee’s Report was adopted on a motion

by Ms. Sonia Bennett, duly seconded by Ms. Janice Green and carried.

SUPERVISORY COMMITTEE’S REPORT The Chairman proceeded to invite Ms. Tasha Manley, Chairman of the Supervisory Committee, to present the Committee’s Report. On a motion by Mr. Rohan Wilson and seconded by Ms. Andrea Lawrence Burke, the Supervisory Committee’s Report was taken as read.

There being no questions on the Supervisory Committee’s report, it was accepted on a motion by Mr. Hopeton Newell, duly seconded

by Ms. Coleen Lewis and carried.

NOMINATION COMMITTEE’S REPORT Ms. Sonia Bennett, Chairman of the Nomination Committee, presented the Committee’s Report. On a motion by Mr. Ray Howell, duly seconded by Ms. Tasha Manley and carried, the report was taken as read.

Ms. Coleen Lewis* Dr. Mark Nicely Ms. Stacey-Ann Farquharson Mr. Charles O’Connor Mr. Ian Sutherland *Ms. Coleen Lewis was appointed to the Board effective August 22, 2020 to fill a casual vacancy, which arose from the death of Mr. Clayton McEwan on June 29, 2020.

The late Director Clayton McEwan had been appointed to the Board to fill a vacancy which arose from the resignation of the former President, Mr. Clide Nesbeth on February 10, 2020.

The Committee acknowledged the sterling contribution of the late director Clayton McEwan for his commitment and dedication to his responsibilities as director on the Board and in his other capacities while he served on the Credit Committee.

A recommendation was made for the following persons to serve: Dr. Mark Nicely, Messrs.

Charles O’Connor and Ian Sutherland, Misses Stacey-Ann Farquharson and Coleen Lewis would serve for a term of three (3) years. The other proposed members of the Board and their respective tenures were as follows:

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• • • • • •

Mr. Hector Stephenson - Mr. Hilton Blenman - Mr. Ruel Nelson - Ms. Janice Green - Mr. Ian McNaughton - Ms. Sonia Bennett -

two (2) years two (2) years two (2) years one (1) year two (2) years one (1) year

Credit Committee Members of the Credit Committee retiring were: • Mr. Hopeton Newell • Ms. Shashu Payne* • Ms. Rachelle McKenzie** *Ms. Shashu Payne was appointed to the Credit Committee effective January 11, 2020 to fill the casual vacancy which arose as a result of Mrs. Sandra Smith-Dockery’s resignation on August 14, 2019. ** Ms. Rachelle McKenzie was appointed to the Credit Committee on August 2, 2020 to fill the casual vacancy which arose due to the appointment of the late Director Clayton McEwan to the Board of Directors on February 15, 2020.

The Committee recommended the following persons to serve for another two (2) years: • Mr. Hopeton Newell, Ms. Shashu Payne and Ms. Rachelle McKenzie.

The other proposed members of the Credit Committee and their respective tenures were as follows: • Mr. Kurt Vaz - • Ms. Deloris Mollison - Supervisory Committee

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one (1) year one (1) year

The members of the Supervisory Committee serve for one (1) year, and as such, all members were due for retirement.

The Committee recommended the following persons to serve for a period of (one) 1 year: • • • • •

Ms. Tasha Manley Ms. Erica Haughton Mr. Andrew Smith Mr. Clive McLean Mrs. Loraine Gordon-Pinnock

Ms. Bennett implored the membership to get involved and volunteer their services to the Credit Union as she would welcome new persons.

She sought a motion for the Nominations Committee to be accepted. This was accepted on a motion by Mr. Ian McNaughton and seconded by Mr. Clive McLean.

ELECTIONS/NOMINATIONS Ms. Sonia Bennett, at this stage, invited Ms. Karen Lyttle from the Department of Cooperatives and Friendly Societies to formally ratify the nominations.

Ms. Lyttle sought a motion to accept the elected nominees en bloc.

The motion by Mr. Ray Howell, was duly seconded by Ms. Pauline Richards.

The newly elected Board Members and Committee Members were:

Board of Directors NAME

TENURE

Dr. Mark Nicely

3 years

Mr. Charles O’Connor

3 years

Mr. Ian Sutherland

3 years

Ms. Stacey-Ann Farquharson

3 years

Ms. Coleen Lewis

3 years

Mr. Hector Stephenson

2 years

Mr. Hilton Blenman

2 years

Mr. Ruel Nelson

2 years

Mr. Ian McNaughton

2 years

Mrs. Janice Green

1 year

Ms. Sonia Bennett

1 year

Credit Committee NAME

TENURE

The Chairman, Dr. Mark Nicely invited the Treasurer, Mr. Ruel Nelson to present the Appropriation of Surplus and the Fixing of the Rule of Maximum Liability.

FIXING OF MAXIMUM LIABILITY RULE Mr. Ruel Nelson sought the meeting’s permission for the fixing of maximum liability.

He informed the gathering that the rule states that the Credit Union can borrow 16 times its capital in the event of a significant emergency.

As such, he recommended that the Maximum Liability be set at $12B. This was approved on a motion by Mrs. Michell Dixon-Samuels, duly seconded by Mrs. Loraine Gordon-Pinnock and unanimously carried.

APPROPRIATION OF SURPLUS The Chairman stated that the Appropriation of Surplus should have been taken along with the Treasurer’s Report. He invited Mr. Ruel Nelson, Treasurer, to present the proposed Appropriation of Surplus. The breakdown was as follows:

Mr. Hopeton Newell

2 years

Ms. Shashu Payne

2 years

Ms. Rachelle McKenzie

2 years

Mr. Kurt Vaz

1 year

Statutory Reserve

$ 26.2M

Ms. Deloris Mollison

1 year

Dividend

$ 30.0M

Loan Loss Provision

$ 25.7M

Honoraria

$ 10.0M

Scholarship Fund

$

8.0M

Community Outreach

$

4.9M

TOTAL

$104.8M

Supervisory Committee NAME

TENURE

Ms. Tasha Manley

1 year

Ms. Erica Haughton

1 year

Mr. Andrew Smith

1 year

Mr. Clive McLean

1 year

Mrs. Loraine Gordon Pinnock

1 year

On a motion by Mr. Lloyd Wilson and seconded

by Ms. Paulette Phillips, the Appropriation of Surplus was unanimously approved.

16

RESOLUTIONS The Chairman, at this stage, invited Mr. Hector Stephenson, Secretary, to lead the meeting through the proposed Rule changes.

Mr. Hector Stephenson informed the meeting that there were two (2) resolutions tabled in relation to amendments to the rules of the Society. The amendments to the rules were presented to the meeting as follows: RATIONALE FOR RULE CHANGE WHEREAS the Board of Directors of EduCom Co-operative Credit Union is mandated to elect an executive after each AGM consisting of President, Treasurer, Secretary, one or more Vice President(s) in accordance with Article VIII, Rule 66.

And Whereas the Executive Committee shall hold office until their successors are elected.

And whereas the current Article IX Rule 37 states that no member of the Executive Committee shall be allowed to serve more than four years.

And whereas the Vice-President may be next in line to be elected President to ensure continuity and stability in the leadership based on the Credit Union succession plan.

And whereas the current rule 37 does not allow enough time for the Vice President to serve as President, as both President and Vice President may be elected to the Executive at the same time.

And whereas this would result in both President and Vice President demitting office at the same time, thereby creating a gap in continuity.

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BE IT RESOLVED THAT the current Article IX Rule 37 be amended to allow for the President ONLY, to serve for a period of a maximum of six (6) years to allow for his successor to serve for a minimum of two (2) years as President.

Be it further resolved that all other members of the executive will serve for four (4) years ONLY, as stated in the current Rule 37.

Current Rule – Article IX, Rule 37 The Executive Committee of the Credit Union shall be a President, one or more Vice President(s), a Treasurer and a Secretary, all of whom shall be elected by the Board of Directors in accordance with Article XIII, Rule 66, and the said Executive Committee shall hold office until their successors are elected, provided that no member of the Executive Committee shall be allowed to serve more than four (4) years.

Proposed Amendment – Article IX, Rule 37 The Executive Committee of the Credit Union shall be a President, one or more Vice President(s), a Treasurer and a Secretary, all of whom shall be elected by the Board of Directors in accordance with Article XIII, Rule 66, and the said Executive Committee shall hold office until their successors are elected, provided that no member of the Executive Committee shall be allowed to serve more than four (4) CONSECUTIVE YEARS except for the President who may serve for a period not exceeding six (6) CONSECUTIVE YEARS. Mr. Ray Howell observed that the resolution had targeted the entire executive and not the position, which he believed did not necessarily lead to better governance or stability. He sought clarification for a background on justification for that rule change.

Dr. Nicely stated that the Credit Union currently has an eleven (11) member Board and of that number there were five (5) persons who comprised the executive. Mr. Howell stated that the original intent could have been that persons could be rotated within the executive.

Notwithstanding the flaw in the initial change stage, there would continue to be a challenge.

However, he would be willing to support the resolution.

Continuing, Dr. Nicely mentioned that EduCom was one of the most progressive Credit Unions when it came to the term of the executive. EduCom, considering the need to transform and to modernize had put in that restriction. He added that the restriction was not replicated throughout the Movement.

Ms. Patricia Reid-Waugh stated that she would also support the resolution reluctantly, since the executive retains the right to remove the President.

The Chairman invited Ms. Karen Lyttle from the Department of Co-operatives and Friendly Societies to preside over the voting procedures.

Ms. Lyttle ascertained the number of members who were present in the meeting room prior to voting. She informed that there were 128 members present.

The Presiding Officer asked the meeting for a show of hands for persons wishing to vote on the resolution to amend Article IX Rule 37 resulting in: • • • •

Number voted for: 65 Number voted against: 5 Number abstentions: 58 Number of members present at voting 128

The Presiding Officer announced that the rule was not passed as a total of 96 members were required for the resolution to have passed.

Dr. Nicely, Chairman, proceeded to state that the second rule change was in relation to approval for loans for volunteers, and that was to ensure that EduCom was efficient in the process of approving loans for volunteers.

He stated that all loans above shares had to come to the attention of the Board of Directors for approval, and that was based on industry standard and in regulations that govern Credit Unions. He proceeded to read the resolution seeking approval to amend Article VII, Rule 26.

RATIONALE FOR RULE CHANGE WHEREAS the current Article VII, Rule 26 states that “No Officer shall be allowed to borrow from the Society a total amount in excess of his shareholdings, and, unless approved by the unanimous decision of the joint membership of the Board of Directors, Credit and Supervisory Committees through electronic medium or at a meeting at which two-thirds of the members of the Board of Directors, Credit Committee and Supervisory Committee is present”.

AND WHEREAS the rule in its current form is ambiguous as it speaks to the unanimous decision of the joint membership of the volunteer core as well as two-thirds of the said volunteer core.

And whereas as such ambiguity could lead to some confusion and misinterpretation.

BE IT RESOLVED THAT Article VII, Rule 26 be amended to read “No Officer shall be allowed to borrow from the Society a total amount in excess of his savings, and, unless approved by a majority decision of the joint membership

18

of the Board of Directors, Credit and Supervisory Committees through electronic medium or at a face-to-face meeting, provided that each arm of the volunteer corps is represented by at least one member.

A member sought clarification on the difference between the approval of loans for volunteers and regular members. Dr. Mark Nicely explained that the Board does not have to scrutinize the loan of a regular member as that loan was approved by the In-house Committee or Credit Committee. However, if the loan was at a certain size or there were concerns about that loan, it might be referred to the Board for approval. On the other hand, if loans for volunteers (i.e., Board of Directors, Credit and Supervisory Committees) exceeded shares it must be subjected to the rule.

Ms. Roshain Watson asked about the minimum number of persons required at a meeting for a loan to be approved. Dr. Nicely advised that at least 14 persons would be required or two thirds of the volunteer corps, as the current volunteer corps is 21. He added that when those 14 persons met, at a minimum, at least one member of each group must be represented.

Mr. Andrew Smith commented that the Supervisory Committee should not be approving loans and then turn around and audit them. The Chairman responded that the comment would be taken for future consideration.

Mr. Ray Howell was also of the view that the Supervisory Committee should be removed from taking part in loan approvals, citing that the Supervisory Committee is a part of the regulatory arm and should not have been allowed to participate. He asked that the

19

proposed rule be amended to the decision agreed upon by the joint membership of the Board of Directors and the Credit Committee.

The Chairman stated that while he acknowledged and appreciated the comment, that would be a major rule change that the Board would have to consider and deliberate on because that has been the practice for decades. He further stated that the request for an amendment to that rule would be considered in the next set of resolutions in the near future. This resulted in Mr. Ray Howell withdrawing his request for an amendment to the rule.

Continuing, the Chairman invited Ms. Karen Lyttle to preside over the voting process for the rule amendment. The Presiding Officer invited the meeting for a show of hands for persons wishing to vote on the resolution to amend Article VII Rule 26 resulting in: • • • •

Number voted for: 100 Number voted against: 1 Number abstentions: 27 Number of members present at voting 128

The Presiding Officer declared that the resolution to amend Article VII Rule 26 was passed.

ANY OTHER BUSINESS Prizes/Give-a-ways Mr. Elvis King CEO announced that there were two (2) gift baskets for the first two (2) members who were duly registered. He invited Mrs. Paulette Anderson-Phillips and Ms. Donna Greenwood to accept their gifts courtesy of CUNA Caribbean Insurance, Jamaica.

The Chairman, at this stage, invited the meeting to stand for the closing prayers.

TERMINATION There being no other business, the meeting was terminated at 4:39 p.m. on a motion by Ms. Janet McTaggart and seconded by Mr. Ray Howell.

Confirmed on motion by:

……………………………......................

Seconded by:

……………………………......................

Chairman

……………………………......................

Date …………..........…………………..

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Be kind. Be brave. Be inspirational Simply Topaz

21

BOARD OF

DIRECTORS’ PROFILES

IAN MCNAUGHTON PRESIDENT

Mr. McNaughton is a consultant with a demonstrated history of working in both the financial services and manufacturing, sales and distribution sectors. He has over thirty years of professional experience in business planning, financial operations, capital structure, corporate governance and human resource development. He has served as the Managing Director and Company Secretary of Barita Investments Limited, the Finance Director and Company Secretary of Goodyear Jamaica Limited and Chief Financial Officer and Company Secretary of Berger Paints Jamaica Limited.

Additionally, he served as Chairman of the Jamaica Stock Exchange (JSE) and Treasurer of the Jamaica Cooperative Credit Union League (JCCUL) Board. He has an MBA (Finance) from Nova South Eastern University and a BSc. in Management Studies from the University of the West Indies, Mona. An avid footballer, Mr. McNaughton also sits on the board of the Harbour View Football Club.

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IAN SUTHERLAND 1st VICE PRESIDENT

Mr. Ian Sutherland is a Senior Manager at the University of the West Indies (Mona) with responsibility for Enterprise Applications at the Mona Information Technology Services. His experience in the field of Computer Science and Information Technology spans over thirty (30) years, and includes, but is not limited to the areas of Data Management, Application Development, Reporting Solutions, Process Engineering and Systems Integration.

With a wide appreciation of Management and Information and Communication Technology (ICT), he is capable of representing a range of matters and has provided consulting services to several industries including financial institutions, insurance, education and medical. He holds a BSc. (Computer Science, Chemistry and Math), a Post-graduate Diploma in Management Studies, a MSc. Computer Based Management Information Systems from the University of the West Indies and a professional certificate in Project Management (PMP) from the Project Management Institute.

Mr. Sutherland currently serves as director on the boards of EduCom Co-operative Credit Union Limited (EDUCOM) and Quality Network Limited (QNET). During his tenure, he has contributed to various committees and special projects of EDUCOM, including the ICT (chairman), Policy, Risk and Compliance, Marketing, Business Process Review and Optimization and Delinquency Committees.

STACEY-ANN FARQUHARSON 2ND VICE PRESIDENT

Ms. Farquharson is an Attorney-at-Law and a senior human resource practitioner who is presently employed as Senior Director in the Human Resource Division of the Bank of Jamaica where she heads the Bank's organization development and human resource planning and strategy function. She currently serves as Director of EduCom and is the 2nd Vice President. Ms. Farquharson is an ardent believer in the spirit of volunteerism and has served various organizations including the Jamaica Cancer Society, Dress for Success, Jamaica, the National Youth Service and Youth Opportunities Unlimited.

Ms. Farquharson holds several qualifications and certifications including a Bachelor of Laws Degree, a Master of Science Degree in Governance, a Diploma in Human Resource Management and is a Certified Senior Professional in Human Resource Management from the Society for Human Resource Management.

BOARD OF DIRECTORS’ PROFILES

HILTON BLENMAN TREASURER

Mr. Blenman is a Fellow of the Institute of Chartered Accountants of Jamaica who holds a Master of Science (M.Sc.) Degree in Accounting and a Bachelor of Science (B.Sc.) Degree in Management of Business from the University of the West Indies, Mona Campus.

Mr. Blenman has spent over 40 years in the field of accounting where he started as an External Auditor with Touche Ross and later, served as Assistant Vice-President Finance and Accounting, and Chief Internal Auditor at the Jamaica Mutual Life Assurance Society.

He served as Managing Director at Edward Gayle and Company and as the Director of Internal Audit at the Jamaica Public Service Limited for one year. He also served the banking sector as Manager, Accounting at CIBC First Caribbean Bank. In recent years he has been a consultant to various firms. Mr. Blenman has served as a past Treasurer and is a current member of the Board of Directors of the Jamaica Child Evangelism Fellowship Limited.

SONIA BENNETT BOARD SECRETARY

Ms. Sonia Bennett is the Publishing Manager/ Educational Technologist at Carlong Publishers (Caribbean) Limited. Sonia has over 25 years’ experience in the field of education, from classroom teacher of English and Literature to Principal at the tertiary level, serving as Director/Principal of the Vocational Training Development Institute (VTDI), a tertiary institution funded by the HEART Trust National Training Agency.

She is a graduate of Pepperdine University in California with a MA in Educational Technology.

She holds a BA in Arts and General Studies – Social Sciences with Language and Literature from the University of the West Indies; a Certificate in Teacher Education majoring in English Language, Literature, Social Studies from Mico Teachers’ College (now Mico University College) and a certificate in Theatre Arts from the Jamaica School of Drama. Sonia has also begun work at the doctoral level in Curriculum and Instruction.

CHARLES O’CONNOR DIRECTOR

Charles O’Connor is the Chief Executive Officer of Charles O’Connor Consulting Network Limited (COCN), a professional services company with emphasis on Business Process Outsourcing, Web Based/Cloud Accounting Solution, Tax Planning and Business Advisory Services. Mr. O’Connor is a Fellow of the Institute of Chartered Accountants of Jamaica (ICAJ) and the Association of Chartered Certified Accountants (ACCA) in the UK. He has been a Registered Public Accountant since 2000. He received training in Fixed Income Securities at the New York Institute of Finance, Treasury Control within banks at The Bank of Jamaica in association with Crown Agents-UK, and Project Management with the University of New Orleans.

Over the last 25 years, Mr. O’Connor has held senior executive positions in both the Public and Private Sectors. He distinguished himself as General Manager of Finance and Planning at the Transport Authority of Jamaica (20062010) and Director - Securities Management in the Debt Management Division of the Ministry of Finance and Planning (1998-2001). In 2018, he successfully completed the Insolvency Practitioner Course at the Council of Legal Education, Norman Manley Law School, and is now licensed to practise in Jamaica as an Insolvency Trustee.

Mr. O’Connor has served on various boards and is currently a member of the Dispute Resolution Tribunal of the Jamaica Consumer Affairs Commission. He is also a member of the Tax Committee of the Institute of Chartered Accountants of Jamaica.

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BOARD OF DIRECTORS’ PROFILES

JANICE GREEN DIRECTOR

Mrs. Janice Green is a Certified Safety Professional (CSP) of the Board of Certified Safety Professionals (BCSP), USA; and a Human Resource Practitioner. She is the National Secretary of the International Commission on Occupational Health (ICOH).

A past president of the Jamaica Occupational Health & Safety Professionals Association of Jamaica, she was formerly the Occupational Health and Safety Officer at the Jamaica National Group. Mrs. Green completed her Master in Occupational Safety and Health at the International Labour Organization (ILO)/ University of Turin, Italy. At the Mona School of Business, University of the West Indies, Jamaica, she completed post graduate studies where she attained a Master in Business Administration.

She completed her undergraduate studies at the University of Technology, Jamaica and holds a Bachelor of Science degree in Human Resources Management.

Mrs. Green is a Justice of the Peace and is a part of the mentorship programme at the University of Technology, Jamaica. She is a member of the Society for Human Resources Management (SHRM); and a member and trainer for the Human Resources Management Association of Jamaica (HRMAJ). She holds membership in the International Society for Indoor Air Quality and Climate (ISIAQ). As a member of the International Commission on Occupational Health (ICOH), she serves on the Scientific Committees Accident Prevention, Work Organization and Psychological Factors, and Musculoskeletal Disorders.

A Board Member and Board Secretary for the former St. Catherine Co-operative Credit Union, she now serves on the Board of EduCom Cooperative Credit Union and its sub committees where she is the Chairperson for the Human Resources (HR) Committee and the Marketing Committee. Mrs. Green is a sponsor Trustee for the UWI (MONA) & Community Co-operative Credit Union Limited Pension Plan.

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COLEEN LEWIS DIRECTOR

Ms. Coleen Lewis, Attorney-at-law is a fulltime lecturer at the Faculty of Law, the University of the West Indies with over 20 years of legal experience. As a lawyer, she has worked in the areas of Offshore Law, Corporate and Commercial Law, Media Law, Intellectual Property Law, Conveyancing and Corporate Administration in law firms across the Commonwealth Caribbean as well as in the Legal Department of Jamaica’s biggest and oldest newspaper, The Gleaner Company.

She is presently employed to the University of the West Indies where she has served as the Deputy Dean, Undergraduate Affairs Teaching and Learning at the Faculty of Law.

RUEL NELSON DIRECTOR

Mr. Nelson is a management professional with over 20 years of financial management and accounting experience. He is currently employed as a Financial Manager at the University of the West Indies, Mona Campus.

He holds an MBA from the University of the West Indies, Mona School of Business and is a Fellow of the Association of Chartered Certified Accountants (FCCA). He is also a Fellow of the Institute of Chartered Accountants of Jamaica. He recently completed his Bachelor's of Law Degree from the University of the West Indies and is pursuing the Legal Education Certificate at the Norman Manley Law School.

Mr. Nelson has served in the capacity of Treasurer and 2nd Vice President on the Board of Directors. In addition, he served as a member of the Supervisory Committee of EduCom Co-operative Credit Union and the Jamaica Co-operative Credit Union League Limited. He was also a former Chairman of the Supervisory Committee for UWI (Mona) & Community Co-operative Credit Union Limited.

His competencies include strategic planning, internal and external auditing, business process reengineering, and financial analysis.

BOARD OF DIRECTORS’ PROFILES

MARK NICELY DIRECTOR

Dr. Mark Nicely is a seasoned educator with over twenty (20) years of service in the Jamaican Education Sector. He served as principal at the Hayes Primary and Junior High School in Clarendon, and the Jamaica Baptist Union, William Knibb Memorial High School in Trelawny from 2004- 2011 and 2011 - 2015 respectively. As a crowning achievement of his professional career, Dr. Nicely became the 49th President of the Jamaica Teachers’ Association and served in other notable roles such as Board Chairman at the One Way Group of Schools, External Examiner for the Joint Board of Teacher Education, Lecturer at The Mico University College, Northern Caribbean University, Heart Trust/NTA and the International University of the Caribbean. He also worked with the Ministry of Education to empanel several schools across the country and assisted with the training of new principals in school management and record keeping. In his current role he occupies the post of Deputy Secretary General at the Jamaica Teachers’ Association with portfolio responsibility for Member Services and Industrial Relations, while extending his time to civic duties as a Justice of the Peace for the parish of Kingston. He also volunteers at the EduCom Co-operative Credit Union where he is Former President and current Director on the Board; is a member of the Teachers’ Services Commission and a Director on the E-Learning Jamaica Company Limited Board.

Dr. Nicely is adept at resolving problems and making timely decisions, as a result of his intuitive ability to assimilate challenging situations. His operational knowledge and practice of psychology, enables him to demonstrate people skills and execute emotional intelligence, in galvanizing harmony among stakeholders. This commendable leader continues to maximize his skills to maintain efficiency and proficiency. He possesses high standards of performance and uses analytical approaches and strategic networking; which transitions into an in-depth understanding of life experiences. He is the founder and CEO of “Rise, Counselling and Empowerment Services Ja. Ltd and Rise with Hope Ministries Ja. Ltd.” Dr. Nicely is a proud single parent of two girls, Abbigel and Amiya, who he considers to be part of life’s greatest blessings.

They are a source of inspiration and treasured ingredients in living an amazing life. His mother, Jennie Webb –Connor, remains his mentor, spiritual mother, example setter, motivator and holds him accountable to acceptable moral values and ethical standards. He remains a patriotic Jamaican who is keen on giving back to the land of his birth.

HECTOR STEPHENSON DIRECTOR

Mr. Stephenson began his professional career as a teacher of Integrated Science at St. Georges College in 1983 after completing his studies in Double Option Science at The Mico College (now Mico University College). During his sojourn at St Georges, he served as Grade Supervisor and Dean of Discipline before being awarded The Peter Hans Kolvenbach Scholarship to pursue a Master’s Degree in Secondary School Supervision and Administration at Boston College University in Massachusetts, USA. While at Boston College, he worked as a Graduate Assistant in the School of Education where he supervised undergraduate student-teachers who were seeking to gain professional teaching certification in the state of Massachusetts.

After returning to Jamaica in 1989, Mr. Stephenson was named Dean of Students at St. Georges College, before being promoted to the position of Vice-Principal in 1991 and Principal the following year becoming the first Non-Catholic permanently appointed Headmaster of St. Georges College. During his tenure as Headmaster, Mr. Stephenson also completed diplomas in Human Resources Development and Management Studies at the Institute of Management and Production (IMP) and Jamaica Institute Management respectively. Subsequent to joining the staff of the Overseas Examinations Office as Deputy Director, he served as Acting Executive Director before he was appointed Executive Director and Caribbean Examinations Council (CXC) Local Registrar in 2003.

Mr. Stephenson has served on several boards and committees including the Boards of the Excellence Coalition on Scholastic Aptitude Test; Edwin Allen High School, St. Hugh’s High School and Clan Carthy Primary School. He has been an active member of the Edwin Allen Past Students Association and a Past President of that body.

He is currently a board member of EduCom Co-operative Credit Union and Chairman of the Rules & Policy Committee.

Mr. Stephenson was elected to serve as a Director on the Board of the Jamaica Co-operative Credit Union League (JCCUL) in 2020 and is a member of the Stabilization Fund Committee.

He is also a member of the Caribbean Examinations Council (CXC) National Committee, the CXC Final Awards Committee and a member of the National Qualifications Framework Committee of Jamaica.

26

BOARD OF

DIRECTORS’ REPORT

To the 6th annual general meeting for the year ended December 31, 2020.

ECONOMIC AND SOCIAL OVERVIEW Given the global pandemic, as expected, the economy suffered a steep contraction in 2020, but the projection is that it will rebound for 2021, as both domestic and foreign demand strengthen.

The 2020 calendar year ended with the Statistical Institute of Jamaica (STATIN) reporting that inflation closed at 5.1%. The inflation rate recorded for the year represented a reduction from the previous year’s 6.2%. The Jamaican dollar continued to depreciate against its major trading partner, USA. At the beginning of the year, the dollar was trading at J$132.57 to US$1.00, but closed the year at J$142.65 to represent a 7.6% depreciation over the period.

The graph below depicts some of the key economic variables over the past three years.

ECONOMIC INDICES 2018- 2020

10.7 10.4 7.2 6.2 5.1

2.4 0.5

0.9

GDP

Inflation -10.2%

2018

2019

Unemployment 2020

Source: Bank of Jamaica

As was expected with the global pandemic, the Jamaican economy contracted in 2020, recording a decline of 10.2%, substantially down from the 0.9 percent growth experienced in 2019. The estimated out-turn for the contraction of the economy reflected the negative impact of the prevalence of COVID-19 cases globally and locally. This has negatively impacted economic activities through reduced demand and a slowing in the pace of the re-opening of the economy.

The implementation of measures to manage the spread of the COVID-19 pandemic, which began impacting the island in March 2020, was another factor, along with a weakened business and consumer confidence, associated with uncertainties regarding the duration and impact of the

27

pandemic. Finally, the weakened demand associated with lower disposable income, due to job losses and reduced work hours, have all contributed to the downturn in the economy in 2020.

Unemployment rose to 10.7%, up from the previous year’s 7.2%, reversing the positive trend of the past two years.

Interest Rates AVERAGE T - BILL YIELD (90 - DAY INSTRUMENT)

1.85%

2.00% 1.60%

1.25%

1.78%

1.34%

1.28%

1.20%

1.28%

0.80%

1.13%

1.14%

0.98% 0.78%

0.77%

NOV - 20

DEC - 20

0.97%

0.40% 0.00% Jan - 20

FEB - 20

MAR - 20

APR - 20

MAY - 20

JUN - 20

JUL - 20

AUG - 20

SEP - 20

OCT - 20

Figure 1 – Average Yield Government of Jamaica Treasury Bill (90 – Day Instrument) January – December 2020

The figure above provides a graphical representation of interest rates over the past year. During the 12-month period, the 90 Day T-Bill showed a 38.4% reduction, to close at a low of 0.77%.

2020’s PERFORMANCE The key indicators used to measure the Credit Union’s performance are savings, loans, total assets and gross income. The table below shows our performance in the key performance indicators for the three years, 2018 - 2020.

3-YEAR COMPARATIVE PERFORMANCE KEY PERFORMANCE INDICATORS

2018 ($)

2019 ($)

2020 ($)

EDUCOM’S 2020 GROWTH %

CU MOVEMENT’S 2020 GROWTH %

Savings

7.388B

8.103B

8.986B

10.9%

9.0%

Net Loans

6.694B

7.728B

7.600B

(1.7%)

2.8%

Total Assets

9.064B

9.763B

10.888B

11.5%

9.16%

Gross Income

1.044B

1.091B

1.121B

2.7%

0.7%

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The 2020 performance was again centered around organic growth, as there were no mergers during the year under review. Despite the challenges of the pandemic and the competitive nature of the financial landscape, the Credit Union performed reasonably well, compared to the Movement, as shown in the table above. These results reflect the success of our continued emphasis on performance, our dedication to serving you in the most challenging times, and the commitment of the leadership to anticipate and respond to the changing needs of our members.

KEY FINANCIAL INDICATORS COMPARED 2018 - 2020 12 10 8 6 4 2 0 T/Savings

Net Loans

T/Assets

2018

7.388

6.694

9.064

2019

8.103

7.728

9.763

2020

8.986

7.601

10.888

2018

2019

2020

We closed the year with savings of $8.986B, reflecting growth of 10.9% over the previous year’s $8.103B. This compares favourably to the Movement's growth of 9% for the year. Loans closed at $7.601B, a reduction of 1.7% from 2019’s $7.728B, while the Movement experienced a comparative increase of 2.8%. The decline in loans was a result of the wait-and-see approach taken by our members, as the country goes through the COVID-19 trauma. Despite the pandemic, total assets grew by 11.5% over 2019’s performance to close the year at $10.888B. The Movement’s assets grew by 9.2% for the period under consideration.

The figure below shows graphically our performance in another key indicator, namely, delinquency.

RATE OF DELINQUENCY (%) 4 3

2.5

3

3.5

3.8

2 1 0

2017

2018

2019

2020

2.5

3

3.5

3.8

Rate of Delinquency (%)

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The Delinquency Ratio, year-over-year, has increased by 0.32 percentage points, having increased from 3.46% at the end of 2019 to close at 3.78% in 2020.

We continue to implore our members to communicate with us whenever there are challenges. At the peak of the pandemic, we had 9% of the borrowing members applying and getting approval for moratoria. During the period of the moratoria, we opted to freeze the interest on the loans so that members were not faced with a massive interest cost when payments resumed. The result of this initiative was that our interest income was negatively affected to the tune of Twenty-Three Million Dollars ($23M). We are indeed pleased that we made these decisions to assist our members in their time of need.

The figure below shows the comparative revenues generated over the four years, 2017-2020.

OPERATING INCOME 2017 - 2020 1200

1022.3

1043.8

2017

2018

1091.8

1121.3

2019

2020

1000

($M)

800 600 400 200 0

Operating Income for the period closed at $1.121B, a growth of 2.7% over the performance of 2019. The marginal increase in our Operating Income reflects the challenges we had convincing our members to borrow in 2020, as the pandemic took a toll on operations.

STRATEGIC OBJECTIVES The specific driver or overarching objective of the 2021-2023 strategic plan is the attainment of a surplus of 2% of the value of total assets.

30

Strategy Statement Our strategy statement is revised each year to reflect our strategic focus and guide our actions over the next three-year planning cycle.

Our emphasis continues to be to improve the quality of lives for our members and their families by: 1. Expanding membership through target marketing, sales initiatives and direct recruitment of untapped businesses within the existing bond 2. Increasing member engagement, and utilizing existing products and services through improved service delivery and relationship building 3. Promoting transparency and feedback, recognizing top performers, upholding core values and holding team members accountable 4. Improving credit administration processes and improving pricing strategies 5. Aligning governance, leadership, and organizational culture to fixation of purpose 6. Establishing a reactivation program and an individual campaign focusing on early engagement and strong win-back to reengage members Information and Communication Technology (ICT) Our biggest strategic imperative of this planning horizon is to replace our current banking platform and select and install an alternative, modern and agile solution by the fourth quarter of 2021. The core banking system is the engine that drives the Credit Union.

With the advent of digital banking, Cloud, and Application Programming Interfaces, we have seen a significant shift in the way products and services are delivered to members. We are

31

expected to release new products and services frequently, scale our infrastructure needs and be readily able to execute on mergers and acquisitions where possible.

The current legacy core banking system (Clareti), although very reliable, consists of a closed architecture (no integration with other software) which limits the progress that can be made in a constantly changing market environment. We intend to install a new core banking system which should allow us to: •

• • • •

• •

Grow product offerings to keep abreast with the market Minimize paper-related processes Automate processes Improve integration and remove duplications Deliver better support and integrated reporting Provide improved online member service Have faster set-up of ecosystems

The growth strategies that will be pursued over the next three years include: • • • • •

Penetration of the Bond Increased Member Engagement Loans and savings growth Marketing of existing products Improving our processes to enhance the Member Experience

Our marketing strategy is geared to provide opportunities to grow the loan portfolio, increase revenue and savings, boost fee income from value-added products and expand the membership base. We will seek to expand and deepen our organization's roots in traditional markets as well as attract new members from the wider market, including the unbanked. The main objectives of the marketing strategy are as follows:

• Significantly exploit the membership base through greater member engagement • Expand personal banking and relationship selling opportunities • Ensure robust member solutions selling by frontline staff and Business Development Officers; increase wallet share through Business Development Leaders • Host community-based sales promotion events by targeting the unbanked and under-banked • Increase sales productivity through intensive sales training of management and staff • Train internal trainers to coach frontline staff • Increase online meetings, targeting professionals, self-employed and millennials • Deepen and widen social media footprints to get more qualified sales leads High-Level Performance Indicators & Targets The Key Performance Indicators (KPIs) devised at the corporate level that underscore the level of value creation to be facilitated by the organization over the strategic period are highlighted below.

Member Value At our 2019 strategic retreat, we decided to focus our efforts on improving member value by understanding individual needs and providing personalized financial solutions from an expanded suite of products. In determining member value, we decided that the pertinent factors are interest paid to the members, interest rate charged on loans, dividend paid, and fees charged. We compared our fees, rates and dividend to that of the market and are pleased to report that we have exceeded the first two years’ target on this strategic metric.

Member Satisfaction Member satisfaction is extremely high on our

list of priorities, and based on the weighted satisfaction assessment for 2020, the overall satisfaction score was 74%. This was four percentage points below that which we attained in 2019 and therefore showed that we had regressed in 2020. Our objective is to improve to a 92.5% satisfaction level by the end of 2023. Through additional training and greater member engagement, the objective is to attain an 81% satisfaction rating by the end of 2021.

Compliance to Regulatory Requirements Regulatory compliance refers to the goals that we aspire to achieve to ensure that we comply with relevant laws, policies, and regulations.

The focus on compliance is not restricted to completing reports and submitting them on time to regulatory agencies, but more importantly, that the established standards are met on a consistent basis. The emphasis on standards require that management reports each month to the Board of Directors on the percentage adherence to compliance and regulatory requirements. In addition, management must provide information on what would have caused them to fall below expectations by identifying the contributing factors and then showing the corrective measures being put in place to remedy the situation. The aim is to have 100% compliance by the end of 2023. We are pleased to report a 91.3% compliance at the end of 2020, with the objective of increasing this to a 95% compliance by the end of 2021.

Membership Growth Another component of our strategic focus for 2020 was to grow the membership. The 3-year target is to increase membership to a minimum of 100,000. At the end of 2020, we closed at 78,000 and have set our sights on achieving 9.2% growth in 2021. We will continue to target family members and relatives of our

32

current membership but will deepen our involvement in the communities and widen our reach, as we purposefully focus on this deliverable, acknowledging that we have to grow membership to remain viable.

Reactivation of Dormant Accounts Another strategic initiative that we will pursue over the next three years will be to reduce the number of dormant accounts, substantially, through reactivation. At the end of 2020, a whopping 57% of the membership had not done a transaction with us over the last twelve (12) months, rendering their accounts dormant.

The goal is to reduce this to below 50% in year 1, and to a maximum of 35% over the 3-year horizon.

Risk & Compliance Management Effective corporate governance includes establishing a robust and effective risk management and internal control systems and culture. EduCom Co-operative Credit Union recognises that risk management is an integral part of good management practice and necessary if the Credit Union is to achieve its strategic objectives. With this in mind, EduCom implemented an Enterprise Risk Management (ERM) framework that identifies, measures, monitors, reports and controls the spectrum of risks to which the Credit Union is exposed. Additionally, compliance with regulatory requirements and internal policies and procedures set by the Board of Directors is an essential foundation for setting a firm tone of compliance. Consequently, a robust and effective compliance programme has been established throughout the Credit Union. This programme provides reasonable assurance to members and all other stakeholders that EduCom is effectively meeting regulatory compliance obligation, adhering to the policies and procedures approved by the Board of

33

Directors and adopting international standards of best practice in compliance.

Risk Management The Credit Union’s risk management strategy is designed to support its strategic plans and objectives by ensuring prioritization and adequate management of any identified risks that could affect the achievement of the strategic objectives. It includes the development and approval of the Risk Appetite Statement and risk tolerance limits.

It also provides a structured approach to the risk management process of identifying, assessing and managing risk and will take into account both the inherent and residual risks to which the Credit Union is exposed.

It requires the use of a common language to assess the risks, documentation of the current risk controls that are in place, as well as potential future risk response measures. It also requires regular updating and reviewing of the Credit Union’s overall risk assessment profile based on emerging risks identified, and new developments or response actions taken.

The categories of risks managed through EduCom’s Enterprise Risk Management (ERM) framework include financial, credit, strategic, operational, human resources, reputational and regulatory, and money laundering and terror financing risks.

Compliance EduCom’s Compliance Programme utilizes a risk-based approach to identify, assess, monitor and report compliance risks within the Credit Union. Compliance activities include implementation and review of specific policies and procedures, compliance risk assessment, compliance testing, and education of staff on compliance matters. In this context, compliance

risk can be used interchangeably with integrity risk, because EduCom’s reputation is closely connected with its adherence to principles of integrity and fair dealing and embraces a broader standard of integrity and ethical conduct. As such, EduCom’s compliance function will ensure strict observance of all statutory guidelines issued through various legislations.

EduCom’s compliance programme also establishes a strong, holistic and sustainable approach to preventing, detecting and deterring money laundering, terrorist financing and economic sanctions violations. In keeping with this mandate, EduCom has acquired an AML/CFT solution, that integrates with existing core systems and provides modules for transaction monitoring, customer due diligence, sanction screening, risk profiling and advanced analytics.

OUTREACH We continue to follow the principle of recognizing that helping others is not only a good thing to do but might be considered the right thing to do. In recognition of our commitment to being a good corporate citizen and in line with our policy, we continue our focus on assisting those in greater need. Despite the pandemic, the assistance to our members, charitable organizations, other institutions and individuals during 2020 was no less. In line with our emphasis on education over the years, our Annual Scholarship programme and the support given to the Albert Street Basic School, were the major benefactors from our budget allocation for outreach initiatives.

PRODUCTS & SERVICES The Wealth Creator, Diamond Reserve and Executive Note continue to be the saving products that are of the highest demand among our members. The competitiveness of the rates offered on these products, along with their features (which are more geared toward the building of resources for specific purposes in the medium- to long-term), make these products prevalent among our membership.

The competitive rates offered on these products continue to be unmatched in the industry. As it relates to loans, our Loan Consolidation and the Line of Credit are in high demand. We continue to respond to the members’ feedback from our surveys and have used the information to meet your needs. We also continue to welcome your feedback on how we can further improve our product offerings.

We also want to use this opportunity to remind our members of the very competitive saving instruments that your Credit Union has on offer. Good financial management requires that you maximize the returns that you get on your savings. We encourage you always to be mindful of the rates offered at your Credit Union before considering investing elsewhere.

Here are some tips on how you can plan, save and minimize your expenses as you build your wealth over the next few years: • Make a monthly budget and stick to it by providing a snapshot of where your money is going.

• Find ways to cut back on expenses by prioritizing what must be done rather than conforming to social pressures.

• View and understand your credit score. Do not do this often, however, as this can impact your score negatively.

34

• Keep an eye on your investment accounts and the trends in interest rates.

• Monitor the market to find the best offerings on similar accounts and credit cards to ensure that you get the most competitive interest rate or earn more benefits.

Below is a list of our product offerings. Kindly visit our website, call and speak with one of our Member Care Representatives, or visit our offices to learn more and benefit from these superior products.

SAVINGS PRODUCTS • Permanent Share Account - • Regular Deposits - • Executive Note - • Diamond Reserve - • Special/Fixed Deposits - • Wealth Creator -

• Christmas Savings Club - • T.E.A.C.H. - • Y.S.C. (Youth Savers Club) -

LOAN PRODUCTS • Personal • Debt Consolidation • EduCom Special • Line of Credit • Productive/ Business • Educational • Home Acquisition & Improvement • Motor Vehicle

dividend competitive interest rate competitive interest rate interest credited monthly competitive interest returns long-term savings and investment, insured with monthly interest returns monthly savings and interest Christmas encashment Share account for Trainee Teachers Savings for children of members with competitive interest returns OTHER SERVICES • Standing Order • Family Indemnity Plan (F.I.P) • Health Insurance • Internet Banking • Access Plus debit card • Financial Counseling

VOLUNTEERS The Board of Directors is comprised of 11 members. The following table shows the attendance at meetings. The Board held 12 regular meetings, with a number of other meetings as dictated by the circumstances that prevailed during 2020. Four (4) of the meetings that were held were Joint Meetings that included members of the Supervisory and Credit Committees. The Committees reported monthly on their activities and continued to provide useful suggestions for improvement in the quality of the service provided by the credit union.

35

ATTENDANCE OF BOARD MEMBERS - 2020 NAMES

JAN - MAR

APR - JUN

JUL -SEPT

OCT - DEC

TOTAL

BENNETT-CUNNINGHAM, SONIA

9

13

6

8

36

BLENMAN, HILTON

9

8

6

7

30

FARQUHARSON, STACEY-ANN

8

12

4

5

29

GREEN, JANICE

9

13

6

8

36

LEWIS, COLEEN

-

-

1

7

8

MCEWAN, CLAYTON

3

8

-

-

11

MCNAUGHTON, IAN

8

12

5

8

33

NELSON, RUEL

9

13

4

6

32

NESBETH, CLIDE

1

-

-

-

1

NICELY, MARK

9

13

6

8

36

O'CONNOR, CHARLES

7

10

4

8

29

STEPHENSON, HECTOR

8

13

6

8

35

SUTHERLAND, IAN

9

13

6

8

36

*Total number of Board Meetings held: 36

Supervisory Committee The Committee comprised of: Ms. Tasha Manley (Chairperson), Mr. Andrew Smith, Mrs. Loraine Gordon-Pinnock, Mr. Clive McLean and Ms. Erica Haughton (Secretary). The Committee met at least once per month. At the beginning of each year an audit plan is prepared by the Internal Audit Manager and approved by the Committee. During the year, the Committee monitored the audit plan, reviewed the governance of the organization, made recommendations, reviewed audits and followed up outstanding matters that management cited in these reports.

Credit Committee The Committee comprising Mr. Kurt Vaz, (Chairman), Mr. Hopeton Newell, Ms. Delores Mollison, Ms. Shashu Payne and Ms. Rachelle McKenzie, met at least once per week, over the year, and has done an outstanding job to approve members' loans and moratorium requests. This was a year in which the Committee was drawn on to show compassion, given the number of requests made on the credit union to suspend payments, sometimes for as much as six (6) months. We are pleased to report that our members were extremely satisfied with the level of support given to them during the period of uncertainty brought about by the pandemic.

APPRECIATION The Board of Directors uses this opportunity to place on record our appreciation to the members of the Supervisory and Credit committees, the management and staff, the team of EduCom

36

Ambassadors and all other volunteers for their hard work and commitment throughout the year.

Throughout 2020, with the many challenges associated with the coronavirus, your invaluable service played a significant role in the performance of EduCom. We look forward to your continued support, dedication and involvement in 2021, as together we maintain our role as ambassadors to our credit union.

To those volunteers who have retired, we say a special thanks to you for your contribution while we welcome those who joined our ranks.

A number of other persons and organizations supported us throughout the year. We would like to say special thanks to the following: • • • • • • • • • • • • • •

The University of the West Indies and all its affiliates The Principals, Bursars and Head Teachers in all our schools The Credit Union League and its subsidiaries Cuna Mutual Insurance Society Jamaica Co-operative Insurance Agency The Office of the Post Master General NCB - Oxford Road BDO & Associates The Registrar of Co-operative and Friendly Societies Samuda & Johnson, Attorneys at Law Usim, Williams & Co. Highgate Systems Ltd, our software provider The National Housing Trust The National Land Agency

For and on behalf of the Board of Directors

...............................................................

Ian McNaughton President of the Board

37

TREASURER'S

REPORT FOR THE YEAR ENDED DECEMBER 31, 2020

OVERVIEW I am very pleased to present the Treasurer’s Report to the sixth Annual General Meeting of EduCom Co-operative Credit Union Limited (EduCom). Your Credit Union's first quarter financial results in terms of surplus realized and loans disbursement, when compared to the similar period in previous financial year, engendered a bright prospect for the remainder of the year. Suddenly, the whole business operations of your Credit Union were significantly affected by the COVID-19 pandemic.

Overnight, the ways that we had grown accustomed to conducting business have changed drastically as follows: 1. Team members whose job functions enable or facilitate remote working from their homes, have become the norm.

2. Staff and management meetings are being held virtually or online.

3. The Board of Directors meetings are being conducted monthly online using the Zoom medium.

4.

39

The change in opening hours for the branch network in order to combat the negative effects on operational

efficiency brought on by the COVID-19 pandemic.

5. The use of the facility of granting moratoria to members that resulted in the deferral of principal and interest payments on their loans. This exemplified your Credit Union demonstrating its member centric principle in assisting those members who had been severely impacted by the COVID-19 pandemic, which were based on their written requests that met the qualifying standards for such assistance.

6. The elevation of credit risk in loan receivables that resulted in additional impairment provisions of $39.70M. It should be noted that EduCom’s financial performance was achieved against the background of the rapid pace of changes in the economic environment and the increased level of uncertainty brought on by the COVID-19 pandemic. These turbulences negatively impacted the Credit Union’s performance in terms of its core business – that of disbursement of loans to members. This resulted in a decrease of 1.7% in the net loan portfolio over the previous year.

The above factors significantly influenced EduCom’s surplus performance after honorarium, that resulted in a major shortfall of $68.21M, when compared to budgeted surplus of $135.06M, as the actual surplus realized for the financial year was $66.85M. Despite the challenges encountered, EduCom’s performance was satisfactory, and in most cases exceeded key financial indicators as measured against the P.E.A.R.L.S. standards used by the Jamaica Co-operative Credit Union League (JCCUL), as a means of assessment.

OPERATING PERFORMANCE It is against the difficult challenge of combating the COVID-19 pandemic, continuing to develop a new culture for our credit union and the continued development of trade practices such as direct sales, employing the use of Business Development Officers (BDOs), that EduCom realized a surplus after honorarium for the year of $66.85M, when compared to $94.78M, the previous year. The 29.5% decrease in the surplus for the current year when compared to the previous year, can be attributed mainly to the following factors: 1. The negative impact of the COVID-19 pandemic on loans disbursement, that for the first time in the history of EduCom, the total amount of loans repayment exceeded the total amount of loans disbursement during the year.

2. The clear reluctance on the part of members to borrow, given the high level of uncertainty about the future and probable concerns in terms of income security.

3. The loan impairment losses due to write-off of unrecoverable loans, 4. The increase in the provision for possible uncollectible loans and increase in operating expenses.

The total gross interest income from members’ loans and investments amounted to $964.64M when compared to $914.24M in 2019. This reflected a meagre performance in terms of growth in total gross interest income, approximately 6% increase over the previous year. The factors that contributed to this outturn were as follows: 1. The gross interest income from members’ loans increased by 4% but this was negatively impacted by the decline in loans

40

disbursement that reflected a reduction of 25% when compared to previous period.

2. The increase in available investible funds provided the base for more investment activities that resulted in investment income increasing by 42% over the previous period.

3. A deliberate action to reduce the very high proportion of unsecured loans within the Credit Union’s loan portfolio from a high of 26% to more manageable range of 10% to 15%. This resulted in a reduction in the number of unsecured loans which are priced at a higher rate.

Also, it should be pointed out that whenever a member has not made a payment to his or her loan obligation for a period of ninety (90) days, interest earnings would not be recorded in the credit union’s income statement for that member’s loan in accordance with credit union’s accounting policy. This occurrence would have a double negative effect on your credit union’s performance, as coupled with the fact that no interest income would be recorded, an expense in the form of bad debt provision would be charged to the income statement. We, therefore, continue to implore our members to be responsible in honouring their obligations to the credit union.

The loan portfolio contributed 81% to our income (in 2019-80%), indicating that the credit union beneficially focuses on its core business of granting loans to meet the needs of its members. However, given the competitive nature of the marketplace in which we operate, initiatives have been implemented to diversify our revenue stream because it is imperative to increase the level of non-interest income.

Our 2020 income from investments in financial markets increased by $16.2M or 42%, because of an increase in investible funds due to the

41

significant decline in loans disbursed. The result is that we had to resort to investment activities to mitigate the shortfall from interest income on loans to members.

Given the volatility in loan interest rates in the market, the fact that your Credit Union is very sensitive to downward movements in loan interest rates and the reluctance that was displayed by our members to borrow due to COVID-19 pandemic, your Credit Union made a concerted effort to increase non-interest income through the provision of transactional services such as statements and letters of confirmations. However, these service offerings were significantly affected by reduced operating hours and decline in the number of members visiting the branch network due to the COVID-19 pandemic. With these challenges, EduCom realized total non-interest income of $157.0M from; loan processing, ATM, and management fees on schemes loans, when compared to $177.5M earned in the previous year. This reflected a 12% decline in noninterest income.

Operating expenses totalled $798.2M when compared to $788.6M for the previous year.

This reflected a 1.2% increase in total operating expenses or $9.6M. This clearly exemplifies the cost containment measures that were successfully implemented given the shortfall in revenue. The main contributing factors to this increase were the additional costs from inflationary factors: 1. Professional and consultancy reflected an increase of 30%,

expenses

2. Audit and supervision reflected an increase of 20% 3. Members’ security and bad debts reflected an increase of 14%

4. Utilities and telecommunication expenses reflected an increase of 7% EduCom paid to our members $139.7 million in interest expense for voluntary shares, deferred shares and deposits held with your credit union for the current year, when compared to $137.7M, the previous year. This slight increase of $2.0M was attributed to lesser than expected inflows from members’ shares and deposits, despite measures implemented to increase members’ participation in the products on offering and downward adjustments in interest rates to maintain parity, based on the significant decline in interest rates on investible funds. It should also be noted that during the period under review, EduCom offered very competitive interest rates on members’ savings and deposits. These rates ranged between 0.75%

to 4.25% per annum, and were determined by the type of saving products, market condition, amount of funds and tenure.

Additionally, EduCom has continued the revolving loan agreement with the Jamaica Cooperative Credit Union League (JCCUL) and the National Housing Trust, both geared at meeting the need of members with existing mortgage loans. This resulted in external interest expense of $5.9M, when compared to $7.0M in 2019.

The following chart shows the comparative financial performances over the past five years of EduCom Co-operative Credit Union’s audited financial figures.

EDUCOM'S INCOME VS EXPENDITURE 2016 TO 2020

2,000.0

MILLIONS

1,000.0 800.0 700.0 600.0 400.0 200.0 -

2020

2019

2018

2017

2016

Gross Interest Income

964.6

914.2

895.5

886.5

632.7

Non-Interest Income

157.0

177.5

148.2

135.8

70.9

Operating Expenses

798.2

788.6

727.5

669.8

464.8

Interest Expenses on Savings

139.2

137.7

169.2

161.2

120.3

External Interest Expenses

17.0

17.4

15.0

22.1

27.5

Surplus for the Year Before Honorarium

76.6

104.8

126.6

115.5

89.0

42

PORTFOLIO PERFORMANCE Based on EduCom’s financial performance for the year under review, total assets increased by $1,046.3M or 11.0% and stood at $10.90B as at December 31, 2020. Conversely, net total loans portfolio decreased by approximately $140.8M, closing at $7.62B to represent a 1.7% decrease in the loan portfolio (mainly due to a significant decrease in loan disbursements.

Additionally, EduCom realized a Net Loan to Total Assets ratio of 70% for the current year, when compared to 79% that was achieved in 2019.

It should be noted that management has been successful in its objective to keep the delinquency rate low, despite the negative impact that the COVID-19 pandemic had on 595 members who were adversely affected.

Through the concerted efforts of management, volunteers, and staff, we have managed to control this very important indicator, by remaining vigilant in monitoring and managing the timely receipt of members’ payments on our loan portfolio. For the year under review, we achieved a delinquency rate of 3.78%,

which was below the standard of 5%, though it compares unfavorably to the previous year’s 3.46%.

Members’ savings at year-end increased to $9.04B when compared to the previous year of $8.06B. This represents a 12.0% growth over the period. However, it should be noted that the anticipated increase in our loan demand from members will require a high level of savings.

Therefore, we continue to offer attractive rates on EduCom’s saving products, as we seek to maintain the gap between the total loan portfolio and the total members’ savings. We will continue to offer these attractive returns on saving products, creating the opportunities to encourage savings and build individual wealth for our members. It is important to remind you that it is primarily through savings that a person creates wealth.

The performance of the key indicators is captured graphically below and illustrates the different rates of increase in loans when compared to the increase in savings.

KEY PERFORMANCE INDICATORS 12,000 10,000

MILLIONS

8,000 6,000 4,000 2,000 -

43

2020

2019

2018

2017

2016

Members’ Savings

9,042

8,055

7,388

6,669

4,385

Members’ Loans, after provision from impairment

7,622

7,763

6,700

6,124

4,176

Total Assets

10,896

9,850

9,064

8,308

5,834

The gap between members' loan and savings is depicted in the chart below.

KEY OPERATING INDICATORS 12,000

MILLIONS

10,000 8,000 6,000 4,000 2,000 -

2020

2019

2018

2017

2016

Members’ Savings

9,042

8,055

7,388

6,669

4,385

Members’ Loans, after provision from impairment

7,622

7,763

6,700

6,124

4,175

Total Assets

10,896

9,850

9,064

8,308

5,834

FUTURE OUTLOOK Your Credit Union is operating in a changing and highly uncertain environment, where the integrity and behaviour of some of our members are becoming questionable; they borrow from the credit union with no intention to honour their obligations. This has resulted in loans becoming delinquent and being charged off the credit union accounting records. This was a significant cost to your Credit Union at approximately $50.4M for the year, though marginally better than the previous year of $52.8M. Management has taken steps to pursue these members through the following channels: 1. The employment of bailiff services 2. The employment of attorneys-at-law to pursue recourse through the court system to collect sums owing.

3. The foreclosure of real estate properties that have been offered as securities.

4. The names of these delinquent members will be sent to the Credit Bureau to prevent them from accessing further credits from any other institution.

5. The names of these delinquent members will be published on notice boards in the branches and on the Credit Union's website.

6. The names of delinquent members who cannot be located will be published in the printed media.

As you may be aware, your Credit Union will soon be regulated by the Bank of Jamaica. This will result in higher cost of operating through enhanced and regular financial reporting with dedicated personnel to execute such tasks.

Further, in order to improve operational efficiencies and to benefit from the advances in the current technology, such as digital transformation, your Credit Union will be embarking on a project to select and implement a core computerized business system. We have engaged the services of a consultant to aid in

44

this very important process. We will be offering to our members deferred shares in the amount of $250M in order to secure the funding for this very important project.

ACKNOWLEDGEMENTS: I thank God, the members, and fellow board members for affording me the opportunity to serve EduCom in the role of Treasurer. It has been an honour and a privilege to perform the functions. I thank our members for the continued business support that you have given to EduCom and for entrusting your confidence in the Board of Directors and Management in serving you. We hope to continue to justify the confidence that you have placed in us.

I thank and commend all the team members including volunteers, managers, and staff, who consistently applied themselves to EduCom's continued successful development.

45

On behalf of the Board of Directors, I must express sincere appreciation to the following entities/persons: • The Registrar of Co-operative and Friendly Societies for the guidance and good advice provided, especially during the year and • The Jamaica Co-operative Credit Union League (JCCUL) for guidance and expert services provided in relation to operational and regulatory matters.

Also, I thank the Auditor, BDO for the professionalism displayed in the execution of the audit.

We need the continued support of all our members to utilize the services of EduCom as we seek to live our vision. Where EduCom’s operation is member-centric, service-oriented, financially sound and technologically-enhanced employer of choice; and is the top Credit Union in Jamaica in member value, compliance, and satisfaction.

EDUCOM CO-OPERATIVE CREDIT UNION LIMITED SCHEDULE OF P.E.A.R.L.S. INDICATORS AS AT DECEMBER 31, 2020 CATEGORY

2020

2019

2018

2017

2016

STANDARD

%

%

%

%

%

%

Prov. for loan loss/Delinq.>12mnths.

100

100

100

100

100

100

Prov. for loan loss/Delinq.>6-12mnths.

60

60

60

60

60

60

Prov. for loan loss/Delinq.>3-6mnths.

30

30

30

30

30

30

Net loan/Total Assets

69.96%

78.82%

73.92%

73.72%

71.57%

60-80

Liquid Assets/Total Assets

18.54%

11.86%

14.04%

11.61%

15.30%

Max 5

Financial Investment/Total Assets

5.64%

2.74%

5.05%

5.83%

3.67%

Max 10

Savings/Total Assets

82.99%

81.78%

81.51%

80.27%

75.17%

70-80

External Credit/Total Assets

0.97%

1.11%

1.54%

1.96%

3.96%

10

Institutional Capital/Total Assets

10.67%

11.31%

11.91%

12.21%

13.93%

Min 10

3.78

3.46

2.45%

3.55%

7.72%

<5

5.86%

6.59%

6.98%

8.25%

9.46%

<7

265.49%

251.27%

242.81%

215.36%

220.75%

>100

Net Loan Income/Avg.Net Loan Portfolio

11.83%

12.11%

13.17%

15.72%

13.91%

Market rates

Financial Investment Income/Avg. fin. Invest.

3.45%

2.41%

4.01%

7.63%

6.80%

Market rates

Financial Cost:Deposit/Avg. Deposit

1.63%

1.77%

2.38%

2.86%

3.08%

Market rates

Operating Expenses/Avg Assets

7.70%

8.34%

8.38%

9.47%

8.79%

3-10

Gross Margin/Avg. Assets

7.79%

8.03%

8.19%

9.95%

8.48%

Enough to cover*

PROTECTION

EFFECTIVE FINANCIAL STRUCTURE

ASSETS QUALITY Deliq.>60 days/Loan Portfolio Non-Earnig Assets/Total Assets Zero-Cost Funds/Non-Earning Assets RATES OF RETURN AND COSTS

LIQUIDITY

Measures the ability

Total Liquidity/Total Savings

28.10%

16.52%

22.48%

21.93%

24.60%

20-30

Short-Term Payable/Total Deposit

1.89%

2.15%

1.67%

1.60%

1.78%

of the credit

Non-Earning Liquid Assets/Total Assets

0.71%

0.67%

0.59%

1.44%

0.86%

union to

SIGNS OF GROWTH

Meet withdrawals

Total Assets

10.62%

8.67%

9.11%

42.40%

11.84

>Inflation

Membership

5.63

5.63

5.55

3.2

182.00

>5

NOTE: INFLATION

5.19

4

4.6

2.00

3.70

46

Pass the truth to the next generation.

Teach them early what we learn late.

SUPERVISORY

COMMITTEE’S REPORT UNIQUE DEMANDS AND OPPORTUNITIES CREATED BY COVID-19

LORAINE GORDONPINNOCK

ANDREW SMITH

CLIVE MCLEAN

ERICA HAUGHTON Secretary

TASHA MANLEY CHAIRMAN

INTRODUCTION This report highlights the outcomes of Internal Audit activities in financial year (FY) 2020, which demonstrate our efforts to assist management to identify and address significant risks and drive efficiencies, while providing ongoing assurance to the Board of Directors and other stakeholders (e.g. the JCCUL). The COVID-19 pandemic presented the most rigorous test of business continuity imaginable. As the world was thrown into disruption, so too was the Internal Audit operations. We agree, that Internal audit must always think ahead to stay relevant, but few can say they ever were prepared for a prolonged slowdown in operations such as the world is experiencing today. The Internal Audit Department (IAD) faced a crises within its own operations, where team members were required to work from home due to Government restrictions imposed under the Disaster Risk Management Act. Access to important documents and people was limited, causing planned assurance activities to slow down significantly. These disruptive changes to work patterns are unlikely to be temporary, and they are placing new demands on many of the competencies internal auditors strive to excel at: being nimble, auditing remotely, analyzing data, monitoring cyber controls, and managing crises, to name a few.

48

Against this background, the Supervisory Committee was forced to weigh how the pandemic is affecting EduCom, how to help, and how to stay relevant by bringing new value to the table - essentially shifting focus to new ways to help the credit union come out stronger on the other end.

The Committee sought to use this unique opportunity to provide value in a practical way and to help the credit union move from crisis management to issue management, to short-term risk management, to long-term risk management. The following activities demonstrated our approach: • The Internal Auditor participated in crisis management committees.

• New and changed risks were identified, such as occupational health and safety risks and procurement risks (masks, sanitizers, etc.) understanding and articulating the risks associated with cloud computing or platforms for teleconferencing.

• Steps were taken to eliminate duplications and bottlenecks in new processes.

• Agility became the buzz word, including finding ways for the Committee and the internal auditor to work remotely but efficiently.

• Data analytics and automation were raised and the committee requested that these be ramped up.

• The Internal Auditor worked, and continues to work closely, with those with first- and second-line of defense roles, as well with external audit, by directly asking “How can we help?”

• Appropriately, dealing with pressures to “cross the line” by assuming management responsibilities. At the same time internal audit must and does continue to provide assurance and insight on “business as usual” risk and risk responses.

49

Finally, embracing technology is critical at this time. Advanced use of data analytics, robotic process automation, and artificial intelligence will allow the audit function to continuously monitor for and more easily detect fraudulent activity and other infractions – and it can be done remotely. It is important to maintain data quality during these turbulent times so the look back at 2020 will be accurate and comparable to previous years. We are acutely aware that the Credit Union’s directors need good information now more than ever to guide and support new strategies.

ROLE, RESPONSIBILITIES & SCOPE OF WORK The Supervisory Committee is responsible, by virtue of the established Rules of EduCom Cooperative Credit Union Limited, for exercising oversight in relation to the proper conduct of the Credit Union’s operations, in particular, with regard to risk management and monitoring.

AUDITS & SURVEILLANCE The proposed internal audit activities for the year ended December 31, 2020, were outlined in the approved Internal Audit Plan. The plan was developed on a risk-based approach, hence the audits pursued were prioritized according to the risk rating that was assigned to each respective business process. Audit activities for the year were adversely affected by the COVID-19 pandemic, which resulted in the rearrangement of some aspects of the year’s audit plan, and which also necessitated members of the Internal Audit Team to work from home. Seventy five percent of the Internal Audit team lives in St. Catherine and hence, were directly affected by the ‘lock-down’ of the parish early in the year, because of the spread of the virus. The Committee is pleased, that notwithstanding the COVID impact, eighty percent (80%) of the year’s budgeted audit activities were completed, and meaningful

service was provided to the Credit Union.

KEY OBSERVATIONS

For the year under review, internal audits of several areas of the Credit Union’s operations were done, along with several ad hoc demand based investigations. The monthly report of the Committee to the Board of Directors, provided details of the scope of the work done. These reports included the exceptions that were raised in the audit, their associated risks to the Credit Union, the audit recommendations to prevent or minimize the occurrence of the risk, along with Management’s responses to the findings and recommendations.

The findings from the audits indicate that the Credit Union’s system of internal control operated satisfactorily within the review period. There was general adherence to the Credit Union’s policies and procedures, and to associated regulatory requirements. The audit exceptions that were identified and reported, related mainly to breakdown in particular areas of internal controls, a delay in streamlining processes, or in some instances developing and approving policies for some areas of operation. These findings were brought to the attention of Management and the Board via the internal audit reports. Most of the audit recommendations have been accepted

by Management, some of which have already been implemented. For those that are yet to be implemented, timelines have been set for implementation and are continuously followed up via the Implementation Status of Audit Recommendations (ISOAR) review.

The work of the Internal Audit Department was guided by the International Standards for the Professional Practice of Internal Auditing, recommended risk management techniques, The Proceeds of Crime Act, the Bank of Jamaica Guidance Notes, and the Credit Union’s strategic plans. Consideration was also given to the readiness requirements of the Credit Union as it prepares for the full regulation of credit unions by the Bank of Jamaica. As such, where appropriate, audits were performed consistent with the requirements of the proposed Bank of Jamaica (Credit Unions) Regulations.

In addition to the ad hoc and special investigations that were undertaken, the audits done during the year included the following: • Management of Dormant Accounts • Opening of Accounts and Know Your Customer Requirements • Loans Processing • Teller Operations • Treasury Operations • ATM Operations • Branch Physical Security • Review of Application of Resignation/ Expulsion/ Transfer of Membership • Branch Cash Counts • Delinquency Management

CONCERNS The world and certainly Jamaica, have seen an increase in the number of cyber related financial crimes, and the Credit Union has had its share through debit card frauds. During the year, the number of debit card related frauds experienced by the Credit Union was well above the previous year. Investigating these matters impacted negatively on the Internal Audit Department’s ability to complete the budgeted audit for the year. The Supervisory Committee is concerned about any potential increase in this matter and the effect it could have on the number of audits done within the coming year. For this reason, the Committee encourages the Credit Union to ensure that the necessary resources are in place, both human and technological, to facilitate the necessary monitoring of member transactions to detect and address any potential fraud risk.

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MEETINGS AND OTHER INVOLVEMENT The work of the Committee is achieved largely through a consistent schedule of meetings where matters are discussed and recommendations are made to the Board of Directors. The Committee members were diligent in their attendance and participation, therefore resulting in the high level of performance of the Committee. The following table gives a profile of members’ attendance at meetings during the year to December 31, 2020.

In addition, members of the Committee attended and participated in special workshops organized by the Credit Union, and also in mandatory training in the Proceeds of Crime Act (POCA) and Anti Money Laundering regulations. This is in keeping with the requirements of the Act and with the Bank of Jamaica guidelines.

NAME

NUMBER OF SCHEDULED MEETING

NUMBER OF MEETINGS PRESENT

Tasha Manley

12

10

Erica Haughton

12

11

Clive McLean

12

11

Andrew Smith

12

9

Lorraine Gordon-Pinnock

12

9

ACKNOWLEDGEMENT The Supervisory Committee wishes to place on record its immense appreciation and thanks to the Board of Directors, Management and Staff of the Credit Union, who despite the extremely difficult and challenging circumstances presented by the COVID-19 pandemic, have worked tirelessly and at great personal risk to serve the members of this institution.

Special thanks to the Internal Audit team, who have worked very hard and provided us with quality support and assistance during the year.

Lastly, on behalf of the members of the Committee, I would like to express our sincere gratitude for having been allowed the privilege of serving the Credit Union and its Membership in this capacity.

Respectfully submitted,

............................................................

Tasha Manley Supervisory Committee Chair

51

CREDIT

COMMITTEE’S REPORT

SHASHU PAYNE

RACHELLE MCKENZIE HOPETON NEWELL

DELORES MOLLISON Secretary

KURT VAZ CHAIRMAN

EduCom Co-operative Credit Union Ltd. continues to be fortified and resilient, as we navigate the space of the Global Pandemic caused by the COVID-19, SARS Cov-2 Virus.

We have occupied more of the virtual space, while still having meaningful interactions with our members using a blended approach, supported by the virtual technological tools’ and software. The Credit Committee meetings moved to virtual environment while maintaining the duties and responsibilities.

We did, however, have an unprecedented decline in our loan portfolio Y-O-Y but record

highs in our savings product take up by our membership Y-O-Y. For the year ended December 31, 2020, our net loans portfolio decreased by approximately$140.8M, closing at $7.62B to represent a 1.8% reduction. We have used this time as an organization to demonstrate our core values of C.A.R.E to our membership by approving moratoria representing approximately 7.00% of the current loan portfolio and impacting over 1,300 loan accounts spanning up to nine (9) months of deferred principal and interest payments to our valued members.

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LOAN DISBURSEMENT For the period under review, a total of $3.53B was disbursed in new loans for purposes such as education, home improvement and acquisition, motor vehicle purchase and personal expenses. Below is a reflection of our quarterly loan disbursement:

QUARTER

DISBURSEMENT

PERCENT

1st

$985,579,552.14

27.92%

2nd

$830,588,891.03

23.53%

3rd

$968,229,752.37

27.43%

4th

$745,730,304.71

21.12%

$3,530,128,500.25

100.00%

LOAN PORTFOLIO PORTFOLIO MIX AS AT DECEMBER 31, 2020

RESTRUCTURED 1.36%

MOTOR VEHICLE 29.98%

STAFF CONCESSIONARY LOANS 1.98%

MORTGAGE 17.33%

UNSECURED 26.32% SECURED 23.02%

LOAN CATEGORIES MORTGAGE

17.33%

MOTOR VEHICLE

29.98%

RESTRUCTURED

1.36%

SECURED

23.02%

UNSECURED

26.32%

STAFF CONCESSIONARY LOANS

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PERCENT

1.98%

ATTENDANCE A total of 52 meetings were convened by the Committee, which included special meetings to review loans issued by the internal team, to ensure that these were disbursed in alignment with policy. These meetings were well attended with few cases of absence arising from extenuating circumstances. In addition to the Committee’s scheduled meetings, the members of the Committee attended monthly meetings with the Delinquency Committee and Quarterly Board Meetings.

MEETINGS SCHEDULED

ATTENDED

ABSENT WITH EXCUSE

Deloris Mollison

52

48

4

Shashu Payne

52

50

2

Hopeton Newell

52

50

2

Kurt Vaz

52

50

2

Rachelle McKenzie

20

20

0

Clayton McEwan*

6

6

0

NAME

* Joined the Board of Directors on February 13, 2020

We want to place on record our appreciation to Mr. Clayton McEwan, deceased, who served the Credit Committee with apt direction, before being promoted to the Board of Directors in February 2020. Mr. Kurt Vaz was elected as Credit Committee Chair on February 19, 2020. Ms. Shashu Payne was newly appointed to the Credit Committee on 1 January 2020. Ms. Payne added diversity to the team as a risk practitioner. She undoubtedly provided a good balance to the team with her experience and wealth of knowledge, which added value in our discussions and the decisionmaking process. Ms. Rachelle McKenzie joined the Committee on August 13, 2020. She is an accountant by profession and has facilitated the further diversification of the Credit Committee.

Prepared by:

……………………………………….

Kurt Vaz Credit Committee Chair

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NOMINATIONS

COMMITTEE’S REPORT Report of the Nominating Committee to the 6th Annual General Meeting of EduCom Co-operative Credit Union Limited The Nominating Committee which held its 1st meeting on February 1, 2021 was chaired by Director Ruel Nelson. Other members of the Committee were Messrs. Michael Brydson, Tanjay Holmes, Frederick Mills and Director Ian Sutherland. The Committee is mandated to nominate members who it considers appropriate for nomination or appointment to the Board, and the Credit and Supervisory Committees – such persons must be “fit and proper” as defined in the preamble of the Credit Union’s Rules and be willing and available to serve the Credit Union as volunteers.

Preceding the selection of officers who would be proposed for nomination at the Annual General Meeting (AGM), the Committee held six (6) meetings. The full Committee attended all meetings. In its deliberations, the Committee ensured that its activities were in accordance with the Credit Union’s Rules and its Terms of Reference and that its considerations and decisions came out of a high degree of assessment, integrity and fairness. The Committee is pleased to report that its objectives were successfully achieved.

BOARD OF DIRECTORS

The Committee acknowledges the sterling contribution of the Director Janice Green and her commitment and dedication to her assigned responsibilities.

Having completed its selection of candidates for nomination to the Board of Directors, the Committee has identified a candidate to replace Director Green. The recommended candidate is: • Keriene Collins-Salmon – 3 years The Committee is recommending that Ms. Sonia Bennett be nominated to serve for another three (3) years. The other proposed members of the Board and their respective tenures are as follows: • Stacey-Ann Farquharson

– 2 years

• Hilton Blenman

– 1 year

• Coleen Lewis

– 2 years

• Ian McNaughton

– 1 year

• Mark Nicely

– 2 years

• Ruel Nelson

– 1 year

• Charles O’Connor

– 2 years

• Hector Stephenson

– 1 year

• Ian Sutherland

– 2 years

The following directors will retire at this AGM:

55

• Sonia Bennett

CREDIT COMMITTEE

• Janice Green

Persons are normally elected to serve on this Committee for two (2) years. The Nominating

Committee recognizes and appreciates the quality service provided by the members of this Committee, who meet each week to review and make decisions on loans submitted for approval, as the Credit Union seeks to satisfy the needs of its members.

The recommended members of this Committee for 2021/2022 are:

The following Committee member will retire at this AGM:

• David Weir

• Erica Haughton • Petal Thompson Williams • Glenville Henry • Andrew Smith

• Deloris Mollison The Committee acknowledges the sterling contribution of Miss Mollison over the years; her commitment and dedication to her responsibilities were unparalleled.

Having completed its selection of candidates for nomination to the Credit Committee, the Committee has identified Mr. Courtney Garrick to replace Miss Mollison.

The Committee is recommending that Mr. Kurt Vaz be nominated to serve for another two (2) years. The other proposed members and their respective tenures are: • Rachelle McKenzie

– 1 year

• Shashu Payne

– 1 year

• Hopeton Newell

– 1 year

The Nominatiing Committee thanks you for the opportunity to serve. Despite the challenges brought about by COVID-19, our team strives to serve the membership with zeal and enthusiasm. We look forward to a productive year of service, as all the volunteers, staff and members work towards building brand EduCom.

……………………………………….

Ruel Nelson Chair

SUPERVISORY COMMITTEE Members of this Committee are elected to serve for one (1) year and as such, all members retire at each AGM. The Committee comprises five (5) members. The volunteers of this Committee have spent significant portions of their time ensuring that proper management control systems are in place for the sustainability of a viable credit union.

The committee wishes to acknowledge the commitment and dedication of Tasha Manley, Clive McLean and Loraine Gordon-Pinnock.

Your contributions were exemplary and we thank you for serving.

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MANAGEMENT

TEAM

ERIC HESLOP

ODENE JAMES

Chief Financial Officer

Risk and Compliance Manager

ELVIS KING

Cheif Executive Officer

57

DELROY SCARLETT

Member Experience and Marketing Manager

MARCIA SCOTT GOLDING CAMILLE CAMPBELL-DRUMMOND

Human Resource and Administration Manager

Operations Manager

MILLICENT ANDERSON Accounting Manager

ST. THERESA VERNON LEWIN BAXTER

Credit Manager

Internal Audit Manager

58

NATASHA MILLS

Regional Member Experience Manager

59

NIGEL EDWARDS

CERAPHIA ROPER Regional Member Experience Manager

Assistant Information and Communications Technology Manager

MANAGEMENT

& STAFF SURNAME

FIRST NAME

POSITION

DEPARTMENT

CURRENT LOCATION

King

Elvis

Chief Executive Officer

Executive Office

Head Office

Dixon

Michell

Executive Assistant

Executive Office

Head Office

Williams

Karette

Administrative Assistant

Executive Office

Head Office

Vernon

St. Theresa

Credit Manager

Credit

Head Office

Thoms

Nicole

Senior Recovery Officer

Credit

UWI

Edwards

Natalie

Loans Adjudicator

Credit

Head Office

Morgan

Pierre-Charles

Loans Adjudicator

Credit

Head Office

Barnaby

Michael

Junior Recovery Officer

Credit

UWI

Burgess

Melissa

HEART Trainee

Credit

UWI

Francis

Ki-Ki Ann

Junior Recovery Officer

Credit

UWI

Fray

Barbara

HEART Trainee

Credit

UWI

Fyffe

Shahna-Kae

Clerical Assistant

Credit

UWI

Gordon

Krisan

HEART Trainee

Credit

UWI

Howell

Vannessa

HEART Trainee

Credit

UWI

McLean

Cassandra

Recovery Officer

Credit

UWI

Mowatt Hall

Cheryl

Junior Recovery Officer

Credit

UWI

Richards Lyons

Judith

Recovery Officer

Credit

UWI

Smith

Leigh-Ann

Recovery Officer

Credit

UWI

Smith

Sharnelle

HEART Trainee

Credit

UWI

Heslop

Eric

Chief Financial Officer

Finance and Investment

Head Office

Anderson

Millicent

Accounting Manager

Finance and Investment

Head Office

Jonas-Stone

Shaunakaye

Senior Accountant

Finance and Investment

Head Office

Morrison

Kedeen

Senior Accountant

Finance and Investment

Head Office

Gayle

Yakeisha

Accounting Officer 11

Finance and Investment

Head Office

Jones

Ruth-Ann

Clerical Officer

Finance and Investment

Head Office

Sinclair

Navlette

Accountant

Finance and Investment

Head Office

Wallcom

Tamara

Accounting Officer 1

Finance and Investment

Head Office

Scott Golding

Marcia

Human Resource & Adm. Manager

Human Resource & Administration

Head Office

Sinclair Williams

Nova

Human Resource Officer

Human Resource & Administration

Head Office

Lothian

Andrea

Human Resource Officer

Human Resource & Administration

Head Office

Gordon

Chevell

Human Resource Assistant

Human Resource & Administration

Head Office

Daley

Radcliff

Bearer

Human Resource & Administration

Head Office

Reynolds

Petula

Office Attendant

Human Resource & Administration

Head Office

Edwards

Nigel

ICT Manager (Actg.)

Information & Communication Technology

Head Office

Phipps

Brendan

Network Administrator

Information & Communication Technology

Head Office

Bailey

Tevin

User Support Officer

Information & Communication Technology

Head Office

Benjamin

James

User Support Officer

Information & Communication Technology

Spanish Town

Baxter

Lewin

Internal Audit Manager

Internal Audit

UWI

Batchu

Kerson

Internal Audit Officer

Internal Audit

UWI

Bennett

Omar

Internal Audit Officer

Internal Audit

UWI

Blair-Samuels

Kerry-Ann

Internal Audit Officer

Internal Audit

UWI

Scarlett

Delroy

Member Experience & Marketing Mang.

Member Experience & Marketing

UWI

60

MANAGEMENT & STAFF CONTINUED SURNAME

61

FIRST NAME

POSITION

DEPARTMENT

CURRENT LOCATION

Mills

Natasha

Regional Member Experience Manager

Member Experience and Marketing

UWI

Roper

Ceraphia

Regional Member Experience Manager

Member Experience and Marketing

Portmore

Jones

Jodi

BDL (Oxford Terrace & UTech)

Member Experience and Marketing

Head Office

Rose

Monique

Senior Member Care Representative

Member Experience and Marketing

Head Office

Brinsley

Justine

Business Development Officer

Member Experience and Marketing

Head Office

Crooks

Chadeki

Teller

Member Experience and Marketing

Head Office

Davis

Monique O.

Credit Officer

Member Experience and Marketing

Head Office

Ellis

Hakeem

Credit Officer

Member Experience and Marketing

Head Office

Fagan

Janice

Credit Officer

Member Experience and Marketing

Head Office

Gray

Daniel

Clerical Assistant

Member Experience and Marketing

Head Office

Henry

Suzel

Teller

Member Experience and Marketing

Head Office

Morgan

Georgiana

Branch Liaison

Member Experience and Marketing

Head Office

Nicholson

Natoya

Member Care Representative - General

Member Experience and Marketing

Head Office

Redwood

Kadene

Member Care Representative - Recept.

Member Experience and Marketing

Head Office

Robinson

Kris-Michael

Member Care Representative - General

Member Experience and Marketing

Head Office

Kelly-Murphy

Rosa-Lee

Business Development Leader

Member Experience and Marketing

Linstead

Brown

Mellicia

Senior Member Care Representative

Member Experience and Marketing

Linstead

Clarke

Rajon

Teller

Member Experience and Marketing

Linstead

Davis Hansel

Patrine

Member Care Representative - General

Member Experience and Marketing

Linstead

Henry

Rochelle

Teller

Member Experience and Marketing

Linstead

Owens

Gabrielle

Business Development Officer

Member Experience and Marketing

Linstead

Walker

Raxon

Member Care Representative - Recept.

Member Experience and Marketing

Linstead

Barrett

Roychelle

Business Development Leader

Member Experience and Marketing

Mandeville

Whyte

Taneca

Senior Member Care Representative

Member Experience and Marketing

Mandeville

Insular

Totyana

Member Care Representative - General

Member Experience and Marketing

Mandeville

Tennant

Sabrina

Teller

Member Experience and Marketing

Mandeville

Bent

Lisa

Business Development Leader

Member Experience and Marketing

Montego Bay

Ward

Mauvallette

Senior Member Care Representative

Member Experience and Marketing

Montego Bay

Campbell

Annikee

HEART Trainee

Member Experience and Marketing

Montego Bay

Johnson

Topaz

Sales Representative

Member Experience and Marketing

Montego Bay

Kirlew

Brandon

Member Care Representative - General

Member Experience and Marketing

Montego Bay

Williams

Ebony

Teller

Member Experience and Marketing

Montego Bay

Myers

Salim

Business Development Leader

Member Experience and Marketing

Old Harbour

Williams

Kemeisha

Senior Member Care Representative

Member Experience and Marketing

Old Harbour

Davis

Monique M.

Business Development Officer

Member Experience and Marketing

Old Harbour

Hyatt

Nastasia

HEART Trainee

Member Experience and Marketing

Old Harbour

Masters

Trishanna

Member Care Representative - General

Member Experience and Marketing

Old Harbour

McLean

Venessa

Teller

Member Experience and Marketing

Old Harbour

Ramus

Rakeesha

Member Care Representative - General

Member Experience and Marketing

Old Harbour

Ritchie

Tassia

Teller

Member Experience and Marketing

Old Harbour

Blair

Jermane

Business Development Leader

Member Experience and Marketing

Portmore

Nelson

Shannell

Senior Member Care Representative

Member Experience and Marketing

Portmore

SURNAME

FIRST NAME

POSITION

DEPARTMENT

CURRENT LOCATION

Grant

Nastassia

Teller

Member Experience and Marketing

Portmore

Holgate

Jodian

Teller

Member Experience and Marketing

Portmore

Linton

Latoya

Member Care Representative - General

Member Experience and Marketing

Portmore

Willock

Samantha

Member Care Representative - Recept.

Member Experience and Marketing

Portmore

Wilson

Suisj'aila

Member Care Representative - General

Member Experience and Marketing

Portmore

Watson

Roshain

Business Development Leader

Member Experience and Marketing

Spanish Town

Williams

Camise

Senior Member Care Representative

Member Experience and Marketing

Spanish Town

Bryan

Kerri-Ann

Teller

Member Experience and Marketing

Spanish Town

Bucknor Baker

Teisha

Teller

Member Experience and Marketing

Spanish Town

Francis

Ebony

Clerical Assistant

Member Experience and Marketing

Spanish Town

Harvey

Kimberly

Member Care Representative - General

Member Experience and Marketing

Spanish Town

Kelly-Bailey

Tarika

Member Care Representative - General

Member Experience and Marketing

Spanish Town

McDaniel-Tyrell

Tashna

Member Care Representative - General

Member Experience and Marketing

Spanish Town

Russell

Shanique

Member Care Representative - Recept.

Member Experience and Marketing

Spanish Town

Sinclair

Horace

Bearer

Member Experience and Marketing

Spanish Town

Wisdom

Christopher

Business Development Officer

Member Experience and Marketing

Spanish Town

Wright

Charnelle

Teller

Member Experience and Marketing

Spanish Town

Boswell

Kimberlee

Senior Member Care Representative

Member Experience and Marketing

UTECH

Howe

Tarana

Member Care Representative - General

Member Experience and Marketing

UTECH

Lee

Renardo

Teller

Member Experience and Marketing

UTECH

Robb-Brown

Kimberly

Business Development Officer

Member Experience and Marketing

UTECH

Porter Davis

Stacey-Ann

Business Development Leader

Member Experience and Marketing

UWI

Watson

Roberta

Senior Member Care Representative

Member Experience and Marketing

UWI

Barrett

Nickeria

Member Care Representative

Member Experience and Marketing

UWI

Belnavis

Cavelle

Member Care Representative - Recept.

Member Experience and Marketing

UWI

Campbell

Peta-Gay

Sales Representative

Member Experience and Marketing

UWI

Cole

Natalie

Office Attendant

Member Experience and Marketing

UWI

Fagan

Anthoy

Business Development Officer

Member Experience and Marketing

UWI

Guest

Patrice

Member Care Representative - General

Member Experience and Marketing

UWI

Guthrie

Danielle

Member Care Representative - General

Member Experience and Marketing

UWI

Montaque

Therese

Credit Officer

Member Experience and Marketing

UWI

Morris

Patrick

Teller

Member Experience and Marketing

UWI

Stewart

Shane

Teller

Member Experience and Marketing

UWI

Davidson

Monique

Public Relations & Communications Officer

Member Experience and Marketing

UWI

Morgan

Tremaine

Marketing and Promotions Officer

Member Experience and Marketing

UWI

Payne

Lalibella

Marketing Assistant

Member Experience and Marketing

UWI

Blair

Kay-Ann

Member Care Representative - Telephone

Member Experience and Marketing

UWI

Lewis

Janine

Member Care Representative - Telephone

Member Experience and Marketing

UWI

Russell

Niesha

Member Care Representative - Telephone

Member Experience and Marketing

Linstead

Wallace

Jessica

Member Care Representative - Telephone

Member Experience and Marketing

UWI

Campbell Drummond Camille

Operations Manager

Operations

Head Office

White

Senior Operations Officer

Operations

Head Office

Michelle

62

MANAGEMENT & STAFF CONTINUED SURNAME

63

FIRST NAME

POSITION

DEPARTMENT

CURRENT LOCATION

Bennett

Alisa

Operations Assistant

Operations

Head Office

Brown

Colletta

Operations Assistant

Operations

UWI

Campbell

Triscia

Clerical Assistant

Operations

Head Office

Davy

Richard

Operations Assistant

Operations

Head Office

Deans

Grichen

Operations Assistant

Operations

Head Office

Fender

Trishana

Operations Assistant

Operations

Head Office

Foster

Tameka

Operations Officer

Operations

Head Office

Johnson

Azeim

Registry Clerk

Operations

Head Office

Lamothe

Latoya

Clerical Assistant

Operations

Spanish Town

Lawrence

Tashauna

Clerical Officer

Operations

UWI

Liking

Monique

Operations Assistant

Operations

Spanish Town

Logan Kelly

Velma

Registry Clerk

Operations

Head Office

McKenzie

Ivanna

Operations Officer

Operations

UWI

McNeil Morrison

Suzette

Clerical Assistant

Operations

Head Office

Salmon

Cashema

Clerical Assistant

Operations

Spanish Town

Terthoffer

Marrifa

Operations Assistant

Operations

Head Office

Valentine-Brown

Simone

Registry Clerk

Operations

Head Office

Walker

Vivolyn

Operations Assistant

Operations

Head Office

Whitley-Seymour

Saneka

Operations Officer

Operations

Head Office

Yee

Princess

Clerical Assistant

Operations

Head Office

James

Odene

Risk & Compliance Manager

Risk and Compliance

UWI

Richards

Tasha-Gaye

Senior Risk & Compliance Officer

Risk and Compliance

UWI

Hemmings

Patricia

Clerical Assistant

Risk and Compliance

UWI

Lattibeaudiere Fyffe

Cadene

Compliance Officer

Risk and Compliance

UWI

McLawrence

Nadine

Administrative Assistant

Risk and Compliance

UWI

O'Gere

Shellique

Risk Analyst

Risk and Compliance

UWI

Smellie

Samantha

Clerical Assistant

Risk and Compliance

UWI

You have the power to change the world.

Use it to make a difference.

64

65

EDUCOM IN THE

COMMUNITY SIGMA RUN

The entire team out in their numbers ahead of the start of the race.

Team members participating in the 2020 staging of the Sagicor Sigma Run.

Mrs. Sarah Bright- Lynch (r), Sagicor’s Sigma Secretariat presents the award for 2nd place in the annual T-shirt Design Competition to EduCom’s Marketing and Promotions Officer, Tremaine Morgan at Sigma's office in New Kingston.

66

MONTEGO BAY CHAMBER OF COMMERCE EXPOSITION

Sales Representative for the Montego Bay Branch, Topaz Johnson (l) presents a token to a participant during the expo held at the Montego Bay Convention Centre.

HARBOUR VIEW LIBRARY BLACK HISTORY MONTH READING COMPETITION Business Development Leader, Jodi Jones, presents a gift certificate courtesy of EduCom to a category winner at the conclusion of the competition held at the Parish Library on March 3, 2020.

67

Business Development Leader for Montego Bay, Lisa Bent (r) poses with Sales Representative for the Branch, Topaz Johnson (l) and veteran broadcaster at Nationwide News, Cliff Hughes who also attended the event.

ANNUAL SCHOLARSHIP AWARDS EduCom Co-op Credit Union awarded fifty-three (53) scholarships valued at $1.47 Million to students at the primary and tertiary levels across the island.

Delroy Scarlett, (right) Member Experience and Makerketing Manager of EduCom Co-operative Credit Union presents the Astley Hibbert Memorial Scholarship to Valeen Williams-Walters during the presentation ceremony in September at the EduCom office in Kingston.

Marketing and Promotions Officer, Tremaine Morgan (right), poses with a number of our tertiary level scholarship recipients during the presentation ceremony at the EduCom office in Kingston, on August 19, 2020.

The scholarships granted for the 2020/2021 academic year will allow students to pursue studies at the University of the West Indies, The University of Technology, various Community and Teachers’ Colleges as well as at a number of high schools. The scholarships were presented in September at the EduCom offices across the island.

Business Development Leader attached to the Portmore Branch, Jermane Blair (c) poses with recipients of the PEP scholarships at the Portmore Branch in St. Catherine.

MEMBER ENROLLMENT

Member Care Representative, Tashna McDaniel-Tyrell enrols a member at Joong’s Supermarket in Portmore.

Member Care Representative, Tarana Howe, discusses the benefits of becoming a member during a presentation.

Regional Manager, Mrs. Natasha Mills engages a prospect in the market at Montego Bay.

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ANNUAL GENERAL MEETING

The audience listens intently to the speakers at the AGM.

A member of the Health and Safety team carries out the requisite screening of a team member upon entry to the venue for our 5th AGM.

EDUCOM HOSTED FINANCIAL FORUM EduCom hosted its virtual Financial Forum on December 29, 2020 live via Zoom Conference. The second installment of the Forum which was also streamed live on our social media platforms saw panelists weighing in on the theme ‘Financial Management and COVID-19”. They highlighted the impact of the pandemic on the investment climate and the critical importance of insurance especially during this period. The panelists include Mr. Maurice Wright, Chief Investment Officer, Credit Union Fund Management Company, CUFMC., Financial Commentator, Dr. Orville Johnson, Asst. Vice President of Sales- Jamaica, CUNA Caribbean Insurance, Georgia Morrison along with Regional Member Experience Manager at EduCom, Mrs. Ceraphia Roper. The session was moderated by Journalist and Entrepreneur, Kalilah Reynolds.

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A member poses a question to the platform during the course of the meeting

EDUCOM NAMED MEGA CREDIT UNION OF THE YEAR

1.

EduCom Co-op Credit Union was awarded the coveted prize of ‘Credit Union of the Year’ in the Mega Credit Union Category for 2019, an accomplishment for which we are most proud.

We are aware that without the loyal support of our members, coupled with our hardworking staff and volunteers, EduCom could not have achieved the tremendous success it has, in a relatively short span of time.

We wish to say a BIG thank you to every member of the EduCom family for their continued support as we strive to continue fulfilling our mission…“to improve the quality of life of our members and their families, through the provision of personalized financial solutions and advice.”

1. EduCom Chief Executive Officer, Elvis King, accepts the Credit Union League's Award for Mega Credit Union of the year for 2020, from Ms. Andrea Messam, 1st Vice President, Jamaica Co-operative Credit Union League.

Various EduCom members and team members celebrate the win in branches across the island.

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FINANCIAL

STATEMENTS Authority to Convene - Registrar of Co-operatives and Friendly Societies

73

Independent Auditors' Report to the Registrar

74

FINANCIAL STATEMENTS Statement of Surplus or Deficit and Other Comprehensive Income

77

Statement of Financial Position

78

Statement of Changes in Equity

79

Statement of Cash Flows

82

Notes to the Financial Statements

83

72

73

Page 1 T e l: (8 7 6 ) 9 2 6 -1 6 1 6 /7, 9 2 6 -4 4 2 1 F a x : (8 7 6 ) 9 2 6 -7 5 8 0 w w w .b d o .c o m .jm

77

C h a rte re d A c c o u n ta n ts 26 Be e chw o o d Aven u e P.O . B o x 3 5 1 K in g s t o n 5 , J a m a ic a

159,

74

75

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EduCom STATEMENT Co-Operative Union OFCredit SURPLUS OR Limited DEFICIT AND OTHER COMPREHENSIVE INCOME STATEMENT OF SURPLUS OR DEFICIT AND OTHER COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2020 Year ended 31 December 2020 Note

2020 $’000

2019 $’000

910,034 15,566 11,842 27,200

875,841 11,203 9,228 17,965

964,642

914,237

106,621 6,232 26,390 419 5,916 11,054

101,197 6,399 28,935 1,210 7,011 10,361

156,632

155,113

12

808,010 ( 160) ( 90,089)

759,124 515 ( 43,730)

NET INTEREST INCOME AFTER IMPAIRMENT LOSSES ON LOANS AND INVESTMENTS Non-interest income

6

717,761 157,049

715,909 177,517

Operating expenses

7

874,810 (798,191)

893,426 (788,644)

76,619 ( 9,767).

104,782 ( 10,000).

66,852

94,782

INTEREST INCOME: Loans to members Liquid assets Financial investments Reverse repurchase agreements

INTEREST EXPENSE AND OTHER FINANCIAL COSTS: Deposits Loan scheme deposits Voluntary shares Deferred shares External credits Other financial costs

NET INTEREST INCOME (Increase)/decrease in impairment loss on investments Loan impairment losses

NET SURPLUS BEFORE HONORARIUM Honorarium NET SURPLUS AFTER HONORARIUM FOR THE YEAR OTHER COMPREHENSIVE INCOME: Items that will not be reclassified to surplus Revaluation of land and buildings Re-measurement of defined benefit pension plan

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

77

(

6,193 3,227)

17,587

2,966

17,587

69,818

112,369

77

EduCom Co-Operative Credit Union Limited STATEMENT OF FINANCIAL POSITION 31 December 2020

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited STATEMENT OF CHANGES INSTATEMENT EQUITY OF CHANGES IN EQUITY Year ended 31 December 2020 YEAR ENDED 31 DECEMBER 2020

Note Balance at 1 January 2019 Total comprehensive income - Net surplus for the year - Other comprehensive income Transactions with owners - Entrance fees - Dividend - Issue of permanent shares Transfer to statutory reserve Decrease in other reserve

24(a) 26(a)

Balance at 31 December 2019 Total comprehensive income - Net surplus for the year - Other comprehensive income Transactions with owners - Entrance fees - Dividend - Issue of permanent shares - Increase in permanent shares reserve Transfer to statutory reserve Decrease in reserve Balance at 31 December 2020

79

24(a) 26(a)

Institutional Capital $’000

Non Institutional Capital $’000

1,032,537

333,590

1,366,127

-

94,782 17,587

94,782 17,587

1,775 14,074 26,196 -

( 49,965) ( 1,108) ( 26,196) ( 26,276)

Total $’000

1,775 49,965) 12,966 26,276)

( (

1,074,582

342,414

1,416,996

-

66,852 2,966

66,852 2,966

1,812 40,290 19,155 1,135,839

( 30,000) 338 ( 19,155) ( 126) 363,289

(

(

1,812 30,000) 40,290 338 126)

1,499,128

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EduCom CO-OPERATIVE CREDIT UNION LIMITED STATEMENT OF CHANGES IN EQUITY EduCom Co-Operative Credit Union Limited STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 DECEMBER 2020 Year ended 31 December 2020 INSTITUTIONAL CAPITAL INSTITUTIONAL CAPITAL

Balance at 1 January 2019 Transactions with owners - Entrance fees - Issue of permanent shares Transfer from undistributed surplus Balance at 31 December 2019 Transactions with owners - Entrance fees - Issue of permanent shares Transfer from undistributed surplus Balance at 31 December 2020

Business Permanent Combination Share Reserve Total $’000 $’000 $’000

Statutory Reserve $’000

Special Reserve $’000

290,198

253,143

201,119

288,077

1,775 26,196

-

14,074 -

-

318,169

253,143

215,193

288,077

1,812 19,155

-

40,290 -

-

339,136

253,143

255,483

288,077

1,032,537 1,775 14,074 26,196 1,074,582 1,812 40,290 19,155.

1,135,839

80

81

81

Balance at 31 December 2020

3,201

338 -

Transactions with owners - Dividend - Increase in permanent shares reserve Decrease in retirement benefits Transfer to statutory reserve Decrease in loan loss reserve Transfer to reserve Decrease in reserves 26 (a)

-

2,863

Total comprehensive income - Net surplus for the year - Other comprehensive income

Balance at 31 December 2019

( 1,108) -

Transactions with owners - Dividend - Issue of permanent shares Increase in retirement benefits Transfer to statutory reserve Transfer to reserve Increase in loan loss reserve Honorarium Decrease in reserve 26 (a)

-

3,971

13,499

(12,207) -

-

25,706

25,706 -

-

-

Loan Loss Reserve $’000

37,176

( 578) -

-

37,754

18,366 -

-

19,388

Retirement Benefit Reserve $’000

NON-INSTITUTIONAL CAPITAL

18,580

12,900 ( 126)

-

5,806

19,300 10,000 (26,276)

-

2,782

General Reserve $’000

YEAR ENDED 31 DECEMBER 2020

STATEMENT OF CHANGES IN EQUITY

Permanent Shares Reserve $’000

Total comprehensive income - Net surplus for the year - Other comprehensive income

Balance at 1 January 2019

Note

EduCom Co-Operative Credit Union Limited STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2020 NON-INSTITUTIONAL CAPITAL

EduCom CO-OPERATIVE CREDIT UNION LIMITED

210,446

-

6,193

204,253

-

-

204,253

Revaluation Reserve $’000

66,852 3,227)

80,387

( 30,000) 578 ( 19,155) 12,207 ( 12,900) -

(

66,032

( 49,965) ( 18,366) ( 26,196) ( 19,300) ( 25,706) ( 10,000) -

94,782 17,587

103,196

Undistributed Surplus $’000

363,289

( 30,000) 338 ( 19,155) ( 126).

66,852 2,966

342,414

( 49,965) ( 1,108) ( 26,196) ( 26,276)

94,782 17,587

333,590

Total $’000

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EduCom CO-OPERATIVE CREDIT UNION LIMITED STATEMENT EduCom Co-Operative Credit Union LimitedOF CASH FLOWS STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2020 Year ended 31 December 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net surplus Adjustments for: Interest received Interest income Interest expense Interest paid Depreciation Amortisation of right-of-use assets Finance expense Loss on disposal of assets held for sale Property, plant & equipment written off Unrealised foreign exchange gain Pension expense Impairment losses on investments Loan impairment losses Changes in operating assets and liabilities Saving deposits Loan scheme deposits Voluntary shares Retirement benefit assets Inventories Other assets Loans Payables Decrease in reserves Cash provided by/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Proceed on disposal of asset held for sale Reverse repurchase agreements Financial investments Cash (used in)/provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: External credits Increase in permanent shares Deferred shares Dividend paid Entrance fees Principal paid on lease liabilities Interest paid on lease liabilities Interest paid on external credit Cash used in financing activities Exchange gain on foreign cash balances .

Increase in cash and cash equivalents Cash and cash equivalents at beginning of year CASH AND CASH EQUIVALENTS AT END OF YEAR (note 13)

2020 $’000

2019 $’000

66,852

94,782

957,000 ( 964,642) 139,662 ( 139,066) 24,493 6,850 10,186 4,850 ( 615) 2,309 160 90,089 198,128

919,202 ( 914,237) 137,741 ( 137,053) 24,348 6,279 11,167 4,418 ( 696) 4,438 ( 515) 43,730 193,604

668,440 2,882 315,295 340 ( 1,892) 5,340 49,813 ( 2,636) ( 126) 1,235,584

448,315 11,132 207,099 ( 5,217) 388 10,435 (1,110,615) 49,990 ( 26,276) ( 221,145)

(

13,017) ( 742,041) ( 343,820) (1,098,878)

(

14,646) 42,318 189,568 188,024 405,264

(

(

29,918) 12,966 7,677) 49,965) 1,775 3,294) 4,156) 7,011) 87,280) 96,839.

35.

3,616) 40,290 ( 12,967) ( 30,000) 1,812 ( 3,839) ( 4,270) ( 5,916) ( 18,506) 118,200 46 118,246 684,498 802,744

( ( ( ( ( (

96,874 587,624 684,498 82

EduCom CO-OPERATIVE CREDIT UNION LIMITED

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EduCom Co-Operative Credit Union LimitedOF CASH FLOWS STATEMENT NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 1.

STATUS AND PRINCIPAL ACTIVITIES: EduCom Co-operative Credit Union Limited (the Credit Union) is incorporated under the laws of Jamaica and is registered under the Co-operative Societies Act. The registered office of the Credit Union is located at 10 Oxford Terrace, Kingston 5, Jamaica. The Credit Union was formed following the merger of A.A.M.M Co-operative Credit Union Limited and UWI (Mona) & Community Co-operative Credit Union Limited on 1 April 2015. On 1 January 2017, the Credit Union merged its operation with St. Catherine Co-operative Credit Union Limited.

The main activities of the Credit Union are to promote thrift among its members by affording them an opportunity to accumulate their savings and to create for them a source of credit for provident or productive purposes at reasonable rates of interest.

Membership to the Credit Union is obtained by members’ subscribing to a minimum of $2,000 permanent shares and a minimum of $600 voluntary shares. Voluntary shares are deposits available for withdrawals on demand, while permanent shares are paid in cash and invested in risk capital and are redeemable only upon transfer to another member. Individual membership may not exceed 20% of the total of the members’ shares of the Credit Union.

The Co-operative Societies Act requires, among other provisions, that at least 20% of the net surplus of the Credit Union be transferred annually to a reserve fund. Section 59 (1) & (11) of the Act provides for the exemption from income tax and stamp duty for the Credit Union.

The Credit Union’s operations are located in the parishes of Kingston, St. Andrew, St. Catherine, Manchester and St. James.

2.

FUNCTIONAL CURRENCY: These financial statements are presented in Jamaican dollars which is the Credit Union’s functional currency. Except where indicated to be otherwise, financial information presented are shown in thousands of Jamaican dollars.

3.

SIGNIFICANT ACCOUNTING POLICIES: The principal 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, unless otherwise stated. Where necessary, prior year balances have been reclassified to conform to current year presentation. (a)

Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRS).

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain properties and financial assets that are measured at fair value or revalued amounts.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 3.

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

Basis of preparation (cont’d) The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Credit Union’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

New standards, interpretations and amendments adopted from 1 January 2020 Certain new standards, interpretations and amendments to existing standards have been published that became effective during the current financial year. The Credit Union has assessed the relevance of all such new standards, amendments and interpretation and has put into effect the following, which are immediately relevant to its operations: Amendments to IAS 1 ‘Presentation of financial statements’ and IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (effective for annual periods beginning on or after 1 January 2020). The IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify certain aspects of the definition. The new definition states that, ’Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

These amendments clarify that materiality will depend on the nature or magnitude of information, or both. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of users of general purpose financial statements by defining them as existing and potential investors, lenders and other creditors. The Credit Union has applied the guidance on materiality when preparing its financial statements.

Revised Conceptual Framework for Financial Reporting (effective for annual periods beginning on or after 1 January 2020). The revised Conceptual Framework will be used in standard-setting decisions with immediate effect; however, no changes will be made to any of the current accounting standards. Entities that apply the Conceptual Framework in determining accounting policies will need to consider whether their accounting policies are still appropriate under the revised Framework.

There was no impact from the adoption of this amendment.

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIALNOTES STATEMENTS 31 December 2020 31 DECEMBER 2020

3.

SIGNIFICANT 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, 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 that the Credit Union has decided not to adopt early. The most significant of these are: Annual Improvements to IFRS Standards 2018-2020 cycle (effective for annual periods beginning on or after January 1, 2022). These amendments include minor changes to the following applicable standards: (i)

IFRS 9 Financial Instruments amendment clarifies that – for the purpose of performing the ’10 per cent test’ for derecognition of financial liabilities – in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf.

(ii) IFRS 16 Leases amendment removes the illustration of payments from the lessor relating to leasehold improvements.

The Credit Union is assessing the impact this amendment will have on its 2022 financial statements.

The Credit Union does not expect any other standards or interpretations issued by the IASB, but not yet effective, to have a material effect on its financial position. (b)

Foreign currency translation Transactions entered into by the Credit Union in a currency other than the currency of the primary economic environment in which they operate (their “functional currency”) are recorded at the rates ruling when the transactions occur.

Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognized immediately in surplus or deficit.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (c)

Financial assets A financial asset is any contract that gives rise to both a financial asset in one entity and a financial liability or equity of another entity.

Classification and subsequent measurement The Credit Union classifies its financial assets based on the business model used for managing the financial assets and the asset’s contractual terms. These are measured at either:  

Amortised cost, and; Fair value through profit or loss (FVPL).

The classification requirements for debt and equity instruments are described below: Debt instruments Measurement of debt instruments depends on the Credit Union’s business model for managing the asset and the cash flow characteristics of the asset. The Credit Union classifies its debt instruments into one of the following two 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 are measured at amortised cost.

Interest income from these financial assets are included in the income statement using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in the surplus or deficit. Impairment losses are presented as a line item in the income statement as credit impairment losses. Bad debt recoveries are included in other income.

Fair value through profit or loss (FVPL) Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income (FVOCI) are measured at fair value through profit or loss (FVPL).

A gain or loss on a debt instrument that is measured at fair value through profit is recognised in profit or loss in the period in which it arises. Interest income from these financial assets is included in ‘Interest income’ using the effective interest method.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (c)

Financial assets (cont’d) Classification and subsequent measurement (cont’d) Equity instruments The Credit Union measures all equity investments at fair value.

Upon initial recognition, the Credit Union elects to classify irrevocably some of its equity investments as equity instruments at FVOCI when they are not held for trading. Such classification is determined on an instrument-by-instrument basis. Gains and losses on such equity instruments are never reclassified to profit or loss 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 other comprehensive income. Cumulative gains and losses recognised in other comprehensive income are transferred to accumulated surplus on disposal of an investment. Equity instruments at FVOCI are not subject to an impairment assessment.

Equity instruments held for trading are measured at FVPL and changes in the fair value are recognized in surplus for the period.

Derecognition The Credit Union 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 Credit Union 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 is recognised in surplus or deficit.

Measurement and gains and losses Financial assets at amortised cost are initially measured at fair value plus incremental direct transaction costs, and subsequently at their amortised cost using the effective interest method. The amortised cost is reduced by impairment losses.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (c)

Financial assets (cont’d) Measurement and gains and losses (cont’d) The financial investments caption 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 less any impairment losses.

-

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;

-

equity investment securities designated as at FVOCI.

Impairment The Credit Union assesses on a forward looking basis the expected credit losses (ECL) associated with its financial assets classified at amortised cost.

The ECL will be recognised in surplus before a loss event has occurred. The measurement of ECL reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes. The probability-weighted outcome considers multiple scenarios based on reasonable and supportable forecasts.

Under current guidance, impairment amount represents the single best outcome; the time value of money; and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

ECL is calculated by multiplying the Probability of default (PD), Loss Given Default (LGD) and Exposure at Default (EAD).

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (c)

Financial assets (cont’d) Impairment (cont’d) The impairment model uses a three-stage approach based on the extent of credit deterioration since origination: Stage 1 -

12 month ECL applies to all financial assets that have not experienced a significant increase in credit risk since origination and are not nonperforming. The ECL will be computed using a 12-month PD that represents the probability of default occurring over the next 12 months.

Stage 2 –

When a financial asset experiences a significant increase in credit risk subsequent to origination but is not non-performing, it is considered to be in Stage 2. This requires the computation of ECL based on lifetime PD that represents the probability of default occurring over the remaining estimated life of the financial asset. Provisions are higher in this stage because of an increase in risk and the impact of a longer time horizon being considered compared to 12 months in Stage 1.

Stage 3 –

Financial assets that have an objective evidence of impairment will be included in this stage. Similar to Stage 2, the allowance for credit losses will continue to capture the lifetime ECL.

The Credit Union uses judgement when considering the following factors that affect the determination of impairment: Assessment of Significant Increase in Credit Risk (SICR) The assessment of a significant increase in credit risk is done on a relative basis. To assess whether the credit risk on a financial asset has increased significantly since origination, the Credit Union compares the risk of default occurring over the expected life of the financial asset at the reporting date to the corresponding risk of default at origination, using key risk indicators that are used in the Credit Union’s existing risk management processes. At each reporting date, the assessment of a change in credit risk will be assessed on a collective basis, this would require the segmentation of credit exposure on the basis of shared credit risk characteristics. This assessment is symmetrical in nature, allowing credit risk of financial assets to move back to Stage 1 if the increase in credit risk since origination has reduced and is no longer deemed to be significant.

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (c)

Financial assets (cont’d) Impairment (cont’d) Macroeconomic factors, forward looking information and multiple scenarios The Credit Union applies an unbiased and probability weighted estimate of credit losses by evaluating a range of possible outcomes that incorporates forecasts of future economic conditions.

Macroeconomic factors and forward looking information are incorporated into the measurement of ECL as well as the determination of whether there has been a significant increase in credit risk since origination. Measurement of ECLs at each reporting period reflect reasonable and supportable information at the reporting date about past events, current conditions and forecasts of future economic conditions.

The Credit Union uses three scenarios that are probability weighted to determine ECL: base, optimistic and pessimistic.

Expected Life When measuring ECL, the Credit Union considers the maximum contractual period over which the Credit Union is exposed to credit risk. All contractual terms are considered when determining the expected life. For certain revolving credit facilities that do not have a fixed maturity, the expected life is estimated based on the period over which the Credit Union is exposed to credit risk and where the credit loss would not be mitigated by management’s actions.

Application of the Simplified Approach For other receivables, the Credit Union applies the simplified approach permitted by IFRS 9, which requires that the impairment provision is measured at initial recognition and throughout the life of the receivables using a lifetime ECL. As a practical expedient, a provision matrix is utilised in determining the lifetime ECLs for other receivables.

The lifetime ECLs are determined by taking into consideration historical rates of default for each segment of aged receivables as well as the estimated impact of forward looking information.

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (d)

Financial liabilities The Credit Union’s financial liabilities net of transaction costs, are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest method. At the reporting date, the items classified as financial liabilities are members’ voluntary shares, saving deposits, deferred shares, payables, external credits and lease liabilities.

(e)

Reverse repurchase agreements The purchase and sales of securities under resale and repurchase agreements are treated as collateral lending and borrowing transactions. The related interest income and expense are recorded on the accrual basis.

(f)

Cash and cash equivalents Cash and cash equivalents are carried in the statement of financial position at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and in bank and deposits not held to satisfy statutory requirements and short term highly liquid investments with original maturities of three months or less.

(g)

Inventories Inventories are initially recognised at cost, and subsequently stated at the lower of cost and fair value less cost to sell, cost being determined on the first-in-first-out basis.

(h)

Other assets Other receivables are carried at anticipated realizable value. An estimate is made for doubtful receivables based on all outstanding amounts at year end. Bad debts are written off in the year in which they are identified.

(i)

Asset held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell except for assets such as investment property that are carried at fair value.

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3.

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

Asset held for sale (cont’d) An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of derecognition.

(j)

Property, plant and equipment Items of property, plant and equipment are recorded at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Freehold buildings are subsequently carried at fair value, based on periodic valuations by a professionally qualified valuer. These revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. Changes in fair value are recognised in other comprehensive income and accumulated in the revaluation reserve except to the extent that any decrease in value in excess of the credit balance on the revaluation reserve, or reversal of such a transaction, is recognised in surplus or deficit.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Credit Union and the cost of the item can be measured reliably. The carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to surplus or deficit during the financial period in which they are incurred.

Depreciation is calculated on the straight-line method at annual rates estimated to write off the costs of the assets over the period of their estimated useful lives. Land is not depreciated. Annual rates are as follows: Buildings Leasehold Improvement Equipment

2½% 14 1/3% 20%

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (j)

Property, plant and equipment (cont’d) Computer hardware and software Furniture and Fixtures Motor vehicles

33 1/3% 10% 20%

Property, plant and equipment are periodically reviewed for impairment. Where the carrying amount of the assets is greater than the estimated recoverable amount, it is written down immediately to its recovery amount.

Gains and losses on disposals of property, plant and equipment are determined by reference to their carrying amounts and are taken into account in determining profit or loss.

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at each reporting date. (k)

Employee benefits The Credit Union contributes to two separate pension funds on behalf of its employees a defined contribution plan and a defined benefit plan independently administered as follows: Defined contribution plan This is a money purchase plan whereby it pays contributions to a privately administered fund. Once the contributions have been paid, the Credit Union has no further obligations. The regular contributions constitute net periodic costs for the year in which they are due and are included in staff costs.

Defined benefit plan This is a multi-employer defined benefit pension scheme. The pension is funded from payments from employee and by the Credit Union, taken into account the recommendation of independent qualified actuaries.

The asset or liability in respect of defined benefit plans is the difference between the present value of the defined benefit obligations and fair value of plan assets at the reporting date.

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (k)

Employee benefits Defined benefit plan (cont’d) Where a pension asset arises, the amount recognized is limited to the present value of any economic benefits available in the form of funds from the plan or reductions in the future contributions to the plan. The valuation is performed annually by independent actuaries using the projected unit credit method. Under this method, the cost of providing pensions is charged to net surplus so as to spread the regular cost of service over the service lives of the employees. The pension obligation is measured as 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 Credit Union’s obligations as a proportion of the total obligations of the plan.

Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans are charged or credited to the undistributed surplus in other comprehensive income in the period in which they arise.

Past-service costs are recognised immediately in the statement of comprehensive income.

Leave accrual All obligation in respect of outstanding leave are recognised in the statement of comprehensive income in the year to which it relates.

(l)

External credits External credits are recognized initially as the proceeds received, net of transaction costs incurred. External credits are subsequently stated at amortised cost using the effective yield method. Any difference between proceeds, net of transaction costs, and the redemption value is recognized in surplus or deficit over the period of the external credit.

(m)

Saving deposits Saving deposits are recognized initially at the normal amount when funds are received.

Deposits are subsequently stated at amortised cost.

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (n)

Leases All leases are accounted for by recognising a right-of-use asset and a corresponding lease liability, except for: • •

Leases of low value assets; and Leases with a duration of 12 months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Credit Union’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments and non-lease components are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes: • • •

amounts expected to be payable under any residual value guarantee; the exercise price of any purchase option granted in favour of the Credit Union if it is reasonable certain to exercise that option; any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

Right-of-use assets are initially measured at an amount equal to the initial value of the lease liabilities reduced for any lease incentives received, and increased for: • • •

lease payments made at or before commencement of the leases; initial direct costs incurred; and the amount of any provision recognised where the Credit Union is contractually required to dismantle, remove or restore the leased asset (typically leasehold dilapidations).

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the leases or over the remaining economic life of the assets if, rarely, this is judged to be shorter than the lease terms.

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3.

SIGNIFICANT ACCOUNTING POLICIES (CONT’D): (o)

Shares Permanent shares Permanent shares represent a member’s ownership in the Credit Union and may be redeemable subject to the sale, transfer, or repurchase of such shares. Classified as equity, these shares form part of the capital of the Credit Union. Dividends may be paid on permanent shares subject to the profitability of the Credit Union.

Voluntary shares Members’ voluntary shares represent deposit holdings of the Credit Union’s members, to satisfy membership requirements and to facilitate eligibility for loans and other benefits. These shares are classified as financial liabilities. Interest payable on these shares are determined at the discretion of the Credit Union and reported as interest in the statement of income in the period in which they are approved.

Deferred shares Deferred shares form part of the capital of the Credit Union. These shares represent placement by members which are not withdrawable for a period of five (5) years. Any redemption before the expiration would result in a penalty being levied.

Interest payable on deferred shares is set at an interest rate of 8% per annum from the date of origination to 30 September 2017. Thereafter, the interest rate payable will be determined by the Bank of Jamaica 90-day Treasury Bill weighted average interest rate plus 1% on a quarterly basis until maturity.

(p)

Institutional capital Institutional capital includes the statutory reserve fund, as well as any other reserve 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.

(q)

Related party A party is related to the Credit Union, if: (i)

Directly, or indirectly through one or more intermediaries, the party: (a) (b)

is controlled by, or is under common control with, the Credit Union; has an interest in the Credit Union that gives it significant influence over the entity; or

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3.

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

Related party (cont’d) A party is related to the Credit Union, if (cont’d): (i)

Directly, or indirectly through one or more intermediaries, the party (cont’d): (c)

has joint control over the Credit Union.

(ii)

The party is a member of the key management personnel of the entity or its parent;

(iii)

The party is a close member of the family of any individual referred to in (i) or (iv); The party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (ii) or (iii).

(iv)

A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged. The Credit Union has a related party relationship with its directors and key management personnel representing certain senior officers of the Credit Union. (r)

Revenue recognition Revenue represents income that arises in the course of the ordinary activities of the Credit Union. The Credit Union offers financial services to its approved members.

These services are provided on a time and fixed-price contact, with terms ranging from one year to thirty-five years. Revenue is generally recognised when the performance obligations are satisfied either at a point in time or over time as the services are provided. Accordingly, revenue comprises interest income, fees and commissions, dividends, rental and income. (i)

Interest income Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets, except for: -

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Purchased or originated credit-impaired (POCI) financial assets, for which the original credit-adjusted effective interest rate is applied to the amortised cost of the financial asset.

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3.

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

Revenue recognition (cont’d) (i)

Interest income (cont’d) -

(ii)

Financial assets that are not ‘POCI’ but have subsequently become credit impaired (or ‘stage 3’), for which interest revenue is calculated by applying the effective interest rate to their amortised cost (i.e., net of the expected credit loss provision).

Fees and commission Fees and commission income are recognized on the accrual basis when the service has been provided. Fees and commission arising from negotiating or participating in the negotiation of a transaction are recognized on completion of the underlying transaction at a point in time or over time as the services are provided. It is the Credit Union’s policy not to defer loan origination fees over the life of the loan.

(iii)

Dividend Dividend income from equity financial investments is recognized at the point when the shareholder’s right to receive payment has been established.

(iv)

Rental income Rental income from operating leases is recognised on a straight-line basis over the term, period of occupancy, of the relevant lease.

(v)

Other income Other income is recognised on an accrual basis.

(s)

Provisions The Credit Union has recognised provision for liabilities of uncertain timing or amount.

The provision is measure at the best estimate of the expenditure required to settle the obligation at the reporting date.

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4.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY: The Credit Union makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i)

Fair value estimation A number of assets included in the Credit Union’s financial statements require measurement at, and/or disclosure of, at fair value.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Market price is used to determine fair value where an active market (such as a recognized stock exchange) exists as it is the best evidence of the fair value of a financial instrument.

The fair value measurement of the Credit Union’s financial and non-financial assets and liabilities utilizes market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorized into different levels based on the degree to which the fair value is observable.

The standard requires disclosure of fair value measurements by level using the following fair value measurement hierarchy: (i)

Level 1 –

Quoted prices (unadjusted) in active markets for identical assets or liabilities.

(ii)

Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

(iii)

Level 3 -

Inputs for the asset or liability that are not based on f observable market data (that is, derived from prices).

The classifications of an item into the above levels are based on the lowest level of the inputs used that has a significant effect on the fair value measurement of these items.

The Credit Union measures a number of items at fair value Financial investments – (note 11) Revalued building – property, plant and equipment (note 15)

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4.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY (CONT’D): (ii)

Retirement benefit obligation The cost of these benefits and the present value of the future obligations depend on a number of factors that are determined by actuaries using a number of assumptions.

The assumptions used in determining the net periodic cost or income for retirement benefits include the expected long-term rate of return on the relevant plan assets and the discount rate. Any changes in these assumptions will impact the net periodic cost or income recorded for retirement benefits and may affect planned funding of the pension plan. The Credit Union determines the appropriate discount rate at the end of each year, which represents the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the retirement benefit obligations. In determining the appropriate discount rate, the Credit Union considers interest rate of high-quality corporate bonds that are denominated in local currency and have terms to maturity approximating the terms of the related obligations. Other key assumptions for the retirement benefits are based on current market conditions.

(iii)

Impairment losses on financial assets The measurement of the expected credit loss allowance for financial assets measured at amortised cost requires the use of complex models and significant assumptions about future economic conditions and credit behaviour such as the likelihood of members’ defaulting and the resulting losses.

A number of significant judgements are also required in applying the accounting requirements for measuring ECL, such as:    

5.

Determining criteria for significant increase in credit risk Choosing appropriate models and assumptions for the measurement of ECL. Establishing the number and relative weights of forward looking scenarios.

Establishing groups of similar financial assets for the purpose of measuring ECL.

FINANCIAL RISK MANAGEMENT: The Credit Union’s activities are principally related to the use of financial instruments, which involve analysis, evaluation and management of some degree of risk or combination of risks.

The Credit Union manages risk through a framework of risk principles, organizational structures and risk management and monitoring processes that are closely aligned with the activities of the Credit Union. The Credit Union’s risk management policies are designed to identify and analyze the risks faced by the Credit Union, to set appropriate risk limits and controls, and to monitor risks and adherence to limits by means of regularly generated reports. The Credit Union’s aim is therefore to achieve an appropriate balance between risks and return and minimize potential adverse effects on the Credit Union’s financial performance.

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5.

FINANCIAL RISK MANAGEMENT (CONT’D): The Credit Union has exposure to the following risks from its use of financial instruments:   

Credit risk Liquidity risk Market risk

In common with all other businesses, the Credit Union’s activities expose it to a variety of risks that arise from its use of financial instruments. This note describes the Credit Union’s objectives, policies and processes for managing those risks to minimize potential adverse effects on the financial performance of the Credit Union and the methods used to measure them. (i)

Principal financial instruments The principal financial instruments used by the Credit Union from which financial instrument risk arises, are as follows: -

101

Financial investments Loans receivables Liquid assets Reverse repurchase agreements Cash in hand and at bank Payables Voluntary shares Deferred shares Saving deposits Loan scheme deposits Lease liabilities External credits

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5.

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

Financial instruments by category Financial assets

Assets at Amortised cost $’000

Assets at fair Value through Profit or loss $’000

Assets at Fair value through other comprehensive income $’000

Total $’000

As at 31 December 2020: Cash in hand and bank Liquid assets Reverse repurchase agreements Loans receivables Financial investments

77,258 725,486

-

-

77,258 725,486

1,294,634 7,622,437 370,989

162,010

81,333

1,294,634 7,622,437 614,332

10,090,804

162,010

81,333

10,334,147

Assets at Amortised cost $’000

Assets at fair Value through Profit or loss $’000

Assets at Fair value through other comprehensive income $’000

Total $’000

As at 31 December 2019: Cash in hand and bank Liquid assets Reverse repurchase agreements Loans receivables Financial investments

65,943 618,555

-

-

65,943 618,555

549,486 7,763,224 101,623

116,687

51,333

549,486 7,763,224 269,643

9,098,831

116,687

51,333

9,266,851

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5.

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

Financial instruments by category (cont’d) Financial liabilities At amortised cost 2020 2019 $’000 $’000 Payables Saving deposits Loan scheme fund Voluntary shares Deferred shares External credits Lease liabilities

(iii)

144,862 4,551,976 455,588 4,034,758 26,725 105,920 51,239

144,214 3,882,940 452,706 3,719,463 39,692 109,536 55,078

9,371,068

8,403,629

Financial instruments measured at fair value Fair value is the amount for which an asset could be exchanged, or liability settled, between knowledgeable willing parties in an arm’s length transaction.

The financial instruments are grouped into level 1 to 3 based on the degree to which the fair values are observable as follows:

103



Level 1 includes those instruments which are measured based on quoted prices in active markets for identical assets or liabilities.



Level 2 includes those instruments which are measured using inputs other than quoted prices within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).



Level 3 includes those instruments which are measured using valuation techniques that include inputs for the instrument that are not based on observable market date (unobservable inputs).

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5.

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

Financial instruments measured at fair value (cont’d) There were no transfers between levels during the year.

The following table shows the fair values of financial assets 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 their fair value.

Level 1 $’000

2020 level 2 Level 3 $’000 $’000

Total $’000

.

Financial assets measured at fair value Financial investments (Note 11)

51,659

.

Level 1 $’000

110,351

81,333

2019 level 2 Level 3 $’000 $’000

243,343

Total $’000

.

Financial assets measured at fair value Financial investments (Note 11)

9,839

106,848

51,333

168,020

The valuation technique used in determining the fair value measurement of level 1 financial instrument is the Jamaica Stock Exchange trading rates. The valuation technique used for level 3 financial instruments is the net assets valuation method.

Financial investments, which have been categorized as level 2 valuation model is based on yields, derived from pricing services, which may include data not observed in actual market transaction but indicative information.

The fair value of liquid assets, reverse repurchase agreements, cash and bank balances maturing in one (1) year is assumed to approximate their carrying amount. This assumption applies to all other financial assets and liabilities.

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5.

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

Financial instruments measured at fair value (cont’d) The carrying value for deferred shares and external credits approximates their fair value as the liabilities are carried at amortised cost reflecting their contractual obligations and the interest rates are reflective of current market rates for similar transactions.

(iv)

Financial risk The Board of Directors is ultimately responsible for the establishment and oversight of the Credit Union’s risk management framework. The Board has established committees for managing and monitoring risks.

The five key committees for managing and monitoring risks are as follows: (a)

Supervisory Committee The Supervisory Committee oversees the Internal Audit function of the Credit Union and ensures that internal procedures and controls are adhered to. The Supervisory Committee is assisted in its oversight role by Internal Audit.

Internal Audit undertakes both regular and ad hoc reviews of management controls and procedures, the results of which are reported to the Supervisory Committee.

(b)

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

(c)

Finance Committee The Finance Committee is responsible for overseeing the management of the Credit Union’s assets and liabilities and the overall financial structure. It is also primarily responsible for managing the funding and liquidity risks of the Credit Union.

(d)

Risk and Compliance Committee The Risk and Compliance Committee monitors the Credit Union’s exposure to business risks, primarily credit risk by ensuring that collaterals used to secure members’ loans are adequate prior to loan approval. It is also responsible for monitoring the Credit Union’s compliance to the rules and regulations governing the Credit Union as well as management’s policies and procedures.

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5.

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

Financial risk (cont’d) The five key committees for managing and monitoring risks are as follows (cont’d): (e)

Delinquency Committee The Delinquency Committee is responsible for overseeing the management of the Credit Union’s delinquency ratios and the recoverability of overdue loan balances. The committee also oversees the disposal of repossessed collateral with the assistance of the Risk and Compliance Committee.

These committees comprise persons independent of management and reports to the Board on a monthly basis.

The Credit Union’s overall risk management programme seeks to minimize potential adverse effects on the Credit Union’s financial performance. There have been no significant changes to the Credit Union’s exposure to financial risks or the manner in which it manages and measures its risks. (i)

Credit risk The Credit Union takes on exposure to credit risk, which is the risk that a counterparty will cause a financial loss by being unable to pay amounts in full when due. Credit exposures arise principally in lending activities. For loans, strategic 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 Credit Union’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 Credit Union’s mission and strategy. The policy sets the basic criteria for acceptable risk and identifies risk areas that require special attention.

Additionally, the Credit Union is exposed to credit risk in its treasury activities, arising from financial assets that the Credit Union uses for managing its liquidity and interest rate risks, as well as other market risks.

There is also credit risk in relation to financial items not included in the statement of financial position at year end such as loan commitments.

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5.

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

Financial risk (cont’d) (j)

Credit risk Credit review process The Credit Union has established a credit quality review process involving regular analysis of the ability of borrowers and other counterparties to meet interest and loan repayment obligations.

The Credit Union assesses the probability of default of individual borrowers using internal ratings. The Credit Union 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 75%, character profile and the member’s economic stability, based on employment and place of abode.

Borrowers of the Credit Union are segmented into two rating classes: performing and non-performing.

The credit quality review process allows the Credit Union 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 personal guarantees.

Credit risk limits The Credit Union manages concentrations 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.

Limits on the level of credit risk by product categories and for investment categories, are reviewed and approved annually by the Board of Directors.

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5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Collateral The amount and type of collateral required depends on an assessment of the credit risk of the borrower. With the exception of loans, debt securities are generally unsecured while reverse repurchase agreements are secured by portfolios of financial instruments. Guidelines are implemented regarding the acceptability of different types of collateral. The Credit Union’s policy regarding obtaining collateral has not significantly changed during the reporting period and there has been no significant change in the overall quality of the collateral held by the Credit Union since the prior period. The principal collateral types for loans and advances are:    

Mortgages over residential and commercial properties Charges over business assets such as premises, Bill of sale over motor vehicles Charges and hypothecations over deposit balances

Management monitors the market value of collateral, request additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its annual review of individual credit facilities as well as during its review of the adequacy of the provision for credit losses.

Financial investments and resale agreements External rating agency grades are used to assess credit quality. These published grades are continuously monitored and updated. Default probabilities and recovery rates are assigned as published by the rating agency.

The Credit Union limits its exposure to credit risk by investing mainly in liquid securities, with counterparties that have high credit quality. As a consequence, management’s expectation of default is low.

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5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Liquid assets and bank balances All liquid assets and bank balances are held in financial institutions which management regards as strong and reputable and are therefore assessed as having low credit risk at reporting date. The strength of these financial institutions is constantly reviewed by the Finance Committee.

Impairment of financial assets The Credit Union has three (3) types of financial assets that are subject to the expected credit loss model:   

Loans receivable, Debt investments carried at amortised cost, and; Reverse repurchase agreement.

While cash and cash equivalents are also subject to the requirements of IFRS 9, all bank balances are assessed to have low credit risk at each reporting date as they are held with reputable banking institution. No impairment loss was recognised.

Impairment - loans receivables The Credit Union applies the ‘three stage' model under IFRS 9 in measuring the expected credit losses on loans, and makes estimations about the likelihood of defaults occurring, associated loss ratios, changes in market conditions and expected future cash flows. This is measured using the Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD) for a portfolio of assets.

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

Probability of Default - This represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (12 months PD) or over the remaining lifetime (Lifetime PD) of the obligation.



Exposure at Default - This represents the expected balance at default, taking into account the repayment of principal and interest from the statement of financial position date to the default event together with any expected drawdowns of committed facilities.

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NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Impairment - loans receivables (cont’d) 

Loss Given Default - The LGD represents expected losses on the EAD given the event of default, taking into account the mitigating effect of collateral value at the time it is expected to be realized and also the time value of money.

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS 31 December 2020

The ‘three stage' model is used to categorize financial assets according to credit quality as follows: 

Stage 1 - If a financial asset is subject to low credit risk at the reporting date, an amount equal to 12 month expected losses would be recognized.



Stage 2 - If the credit risk increases significantly from initial recognition, an amount equal to lifetime expected credit losses would be recognized.

Interest revenue would be on the gross basis.



Stage 3 - If the financial asset meets the credit impaired definition, an amount equal to lifetime expected credit losses would be recognized and interest revenue would be on the net basis, rather than on the gross amount.

Transfer between stages Loans, at any point in time, are either in stage 1, 2, or 3. At origination all loans are in stage 1 and a lifetime PD established based on the current risk score at that time. At future reporting dates, loans are again rated and another lifetime PD established based on the remaining term of the loan. This remaining lifetime PD is then compared with the expected remaining lifetime PD to determine if there is any significant increase in credit risk based on the difference, if any, of the two.

If there are major differences, the loan moves to stage 2. Notwithstanding the above, loans on a watch list are placed in stage 2. Stage 2 loans are moved to stage 3, if the loan rating results in the borrower being rated as non-performing or in default.

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5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Impairment - loans receivables (cont’d) Transfer between stages (cont’d) If there is no significant increase in credit but the borrower is in for more than 30 days past due, then the loan is placed in stage 2. Also, for those in arrears for more than 90 days past due, the loan is placed in stage 3. This rebuttable presumption is an after the fact measure. Stage 3 loans are said to be impaired and are subject to write-offs, cures, or debt consolidation. Transition means the ability to move from one stage (state) to the next.

Forward Transition By forward transition we mean moving from stage 1 to 2, stage 2 to 3, or stage 1 to 3 between reporting and measurement periods.

Backward Transition Backward transition means moving from stage 3 to 2, 2 to 1 but not directly from stage 3 to 1. All rehabilitated stage 3 loans, called “cured”, will remain in stage 3 for 6-month in good standing before moving to stage 2 and will have to remain in stage 2 for another 6 months before going to stage 1. Before a backward transition is made all arrears must be fully paid.

Cured Loans A “cured” loan is a loan that was in default and has recovered through the following routes or a combination thereof.

111



All past due payments have been made and the borrower has made 6 monthly payments on time.



The loan has been restructured with due regard to a new payment plan which reduces the monthly payments by extending the maturity date.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Impairment - loans receivables (cont’d) Watch List A “watch list” is a mechanism used to track and report on loans from when they first reach stage 2 and, after they fall in arrears of over 30 days. The list also includes loans for which a significant increase in credit risk (SICR) has occurred using both quantitative and qualitative measures.

Significant increase in credit risk (SICR) The Credit Union considers a financial asset to have experienced a significant increase in credit risk when one or more of the following qualitative criteria have been met:

• • • •

Deterioration in the Borrower's Risk Rating (BRR) below established threshold; Failure to comply with provisions of any statute under which the borrower conducts business; Actual or expected restructuring; or, Early signs of cash flow/liquidity problems.

Loan commitments are assessed along with the category of loan the Credit Union is committed to provide.

The assessment of SICR is performed for individual loans, taking into consideration the sector grouping of the individual exposures, and incorporates forward-looking information. This assessment is performed on an annual basis.

Backstop Irrespective of the above qualitative assessment, the Credit Union presumes that the credit risk on a financial asset has increased significantly since initial recognition, when contractual payments are more than 30 days past due.

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5.

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

Financial risk (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Non-performing The Credit Union defines a financial instrument as non-performing, when it meets one or more of the following criteria: Quantitative criteria The borrower is more than 90 days past due on its contractual payments.

Qualitative criteria The borrower meets unlikeliness to pay criteria as outlined below, which indicates the borrower is in significant financial difficulty:    

Delinquency in contractual payments of principal and interest; Cash flow difficulties experienced by the borrower; Breach of loan covenants or conditions, and; Initiation of bankruptcy proceedings.

The criteria above have been applied to all loans held by the Credit Union and are consistent with the definition of ‘non-performing' used for internal credit risk management purposes.

Measuring the ECL- Inputs, Assumptions and Estimation Techniques The ECL is determined by projecting the PD, LCD, and EAD which are multiplied together and discounted back to the reporting date. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.

The 12 month PD is calculated by observing the rate of historical default within the first year of a portfolio of loans and adjusted for the expected impact of forward looking economic information.

The lifetime PD is calculated by observing the rate of historical default over the life of a portfolio of loans and adjusted for the impact of forward looking economic information.

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5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Forward looking information The most significant period end assumptions used in determining the ECL as at the reporting date are set out below: Rate .

Economic factor Scenarios 2020 2019 % % Gross Domestic Product (GDP) Base 4.50 1.7 Optimistic 4.75 2.0 Pessimistic 4.25 1.4 Inflation rate

Base Optimistic Pessimistic

4.00 3.50 4.50

0.8 0.7 0.9

Unemployment rate

Base Optimistic Pessimistic

8.50 8.00 9.00

9.5 9.0 9.5

The underlying models and their calibration, how they react to forward-looking economic conditions were based on how they relate to the Credit Union’s existing portfolio, these variables and remain subject to review and refinement as the Credit Union builds data. Other forward-looking considerations not otherwise incorporated within the above scenarios, such as the impact of any regulatory, legislative or political changes, have also been considered, but not deemed to have a material impact and therefore no adjustment has been made to the ECL for such factors. This is reviewed and monitored for appropriateness on an annual basis.

Sensitivity Analysis Forward looking indicators having the most significant impact on the ECL are GDP growth, unemployment rate and inflation rate.

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5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Sensitivity Analysis (cont’d) Set out below are the changes to the ECL as at 31 December that would result from reasonably possible changes in these parameters from the actual assumptions used in the Credit Union's economic variable assumptions.

Change in basis points %

Forward Effect on ECL $’000

Forward looking indicator: GDP growth Unemployment rate Inflation rate

Change in basis points %

Forward Effect on ECL . $’000

.

2020 +100bp -100bp +100bp Change in basis points %

9,554 7,643 1,909

-100bp -100bp -100bp

(9,554) (7,643) (1,909)

Forward Effect on ECL $’000

Change in basis points %

Forward Effect on ECL . $’000

Forward looking indicator: .

2019 GDP growth Unemployment rate Inflation rate

115

+100bp +100bp +100bp

5,174 4,139 1,034

-100bp -100bp -100bp

(5,174) (4,139) (1,034)

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Portfolio Segmentation Expected credit loss provisions are modelled on a collective basis, by grouping exposures on the basis of shared risk characteristics, such that risk exposures within a group are homogeneous. In performing this grouping, there must be sufficient information for the group to be statistically credible.

Exposures are grouped according to loan type (unsecured, mortgage, home equity, motor vehicle, line of credit, restructured and other). The appropriateness of groupings is monitored and reviewed on a periodic basis by the Credit Committee.

Stage 3 loans are assessed on an individual basis for impairment.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Loss allowance – Loan receivables The loss allowance recognized in the period is impacted by a variety of factors.

The following table explains the changes in the loss allowance between the beginning and the end of the annual period due to these factors: Stage 1 12 Months ECL $’000 At 1 January Movements with income statement impact: Transfer: Transfer from Stage 1 to 2 Transfer from Stage 1 to 3 Transfer from Stage 2 to 3 Transfer from Stage 2 to 1 New financial assets originated Changes in PDs/LGDs/EADs Financial assets derecognized during the period Other movements Total net income statement change Write-offs At 31 December

117

Stage 2 Lifetime ECL $’000

2020 Stage 3 Lifetime ECL $’000

.

Total $’000

29,716

11,254

5,921

46,891

( 1,365) ( 3,260) 2,539

1,365 ( 122) ( 2,539)

3,260 122 -

-

23,118 11,049

11,706 597

51,664 2,204

86,488 13,850

( 1,201) ( 944)

( 9,219) ( 1,030)

( 7,464) - .

( (

554) 86)

54,333 -

21,621 -

61,026 (50,391)

136,980 (50,391)

54,333

21,621

10,635

86,589

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Impairment - loan receivables (cont’d) Loss allowance – Loan receivables (cont’d) Stage 1 12 Months ECL $’000 At 1 January Movements with income statement impact: Transfer: Transfer from Stage 1 to 2 Transfer from Stage 2 to 3 Transfer from Stage 2 to 1

38,059

( 1,949) 175

Stage 2 Lifetime ECL $’000 11,487

( (

1,949 702) 175)

.

2019 Stage 3 Lifetime ECL $’000

Total $’000

6,450

55,996

702 -

-

.

New financial assets originated Changes in PDs/LGDs/EADs Financial assets derecognized during the period Total net income statement change Write-offs

3,831 ( 7,052)

5,055 3,981

60,372 ( 3,841)

(

69,258 6,912)

( 3,348)

(10,341)

( 4,927)

( 18,616)

29,716 -

11,254 -

58,756 (52,835)

99,726 (52,835)

At 31 December

29,716

11,254

5,921

46,891

118

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Maximum exposure to credit risk Loan receivables The Credit Union measures ECL considering the risk of default over the maximum contractual period (including extension options) over which it is exposed to credit risk and not a longer period, even if contract extension or renewal is common practice.

The gross carrying amount of financial assets below also represents the Credit Union’s maximum exposure to credit risk on these assets.

The following tables contain an analysis of the credit risk exposure of financial instruments for which an ECL allowance is recognised. The gross carrying amount of financial assets below also represents the Credit Union's maximum exposure to credit risk on these assets.

Stage 1 12 Months ECL $’000 Performing Non-performing Gross carrying amount Loan impairment losses Carrying amount

119

(

Stage 2 Lifetime ECL $’000

2020 Stage 3 Lifetime ECL $’000

6,803,313 .

563,710 .

321,333

6,803,313 54,333)

563,710 ( 21,621)

321,333 ( 10,635)

6,748,980

542,089

310,698

.

Total $’000 7,367,023 321,333

(

7,688,356 86,589) 7,601,767

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Maximum exposure to credit risk (cont’d) Loan receivables (cont’d) Stage 1 12 Months ECL $’000 Performing Non-performing Gross carrying amount Loan impairment losses Carrying amount

(

Stage 2 Lifetime ECL $’000

6,760,327 -

849,339 -

6,760,327 29,716)

849,339 ( 11,254)

6,730,611

838,085

2019 Stage 3 Lifetime ECL $’000

Total $’000

178,894

7,609,666 178,894

(

178,894 5,921) 172,973

.

(

7,788,560 46,891) 7,741,669

Loans exposure by product type The following table summarizes the Credit Union’s credit exposure for loans at their carrying amounts.

2020 2019 $’000 $’000 Educational Real estate Motor vehicle Personal Other Less: loan impairment losses

21,579 1,332,851 2,469,776 2,724,138 1,140,012 (

7,688,356 86,589) 7,601,767

11,098 1,524,884 2,778,678 2,314,118 1,159,782 (

7,788,560 46,891) 7,741,669

120

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Maximum exposure to credit risk (cont’d) Loan receivables Loans are written off, in whole or in part, when the Credit Union has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. Indicators that there are no reasonable expectation of recovery include ceasing enforceable activity, and where the Credit Union’s recovery method is foreclosing on collateral, and the value of the collateral is such that there is no reasonable expectation of recovery in full.

As at 31 December 2020, the fair value of collateral held in respect of non-performing financial assets is $204,687,000 (2019-$140,152,000).

Debt Investments The Credit Union used external credit ratings as published by established rating agencies in its assessment of the probability of default on debt investments.

The PDs and LGDs for government bonds have been developed by the rating agencies based on statistics on the default loss and rating transition experience of government bond issuers.

The loss allowance on debt investments carried at amortised cost is measured using lifetime PDs. The credit ratings and associated PDs are reviewed and updated on an annual basis.

Based on available credit ratings for debt, debt securities were classified in stage 2 as they were below investment grade as defined by reputable rating agencies.

Maximum exposure to credit risks The following table summarizes the Credit Union’s credit exposure for debt securities at their carrying amounts, as categorized by issuer: 2020 $’000 At amortised cost (Note 11)

121

370,989

2019 $’000 101,623.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk factors (cont’d) (i)

Credit risk (cont’d) Maximum exposure to credit risk (cont’d) Debt Investments (cont’d) Allowance The loss allowance for investments at amortised cost as at 31 December is as follows: 2020 2019 $’000 $’000 At the 1 January Increase/(decrease) in impairment losses

2,686 160

3,201 ( 515)

2,846

2,686.

Reverse repurchase agreements Similarly, to debt investments, the Credit Union used published external credit rating in assessing the probability of default on reverse repurchase agreement.

The credit ratings and associated PDs are reviewed and updated on an annual basis.

Based on available credit ratings, reverse repurchase agreement were classified in stage 2 as they were below investment grade as defined by reputable rating agencies.

Other than exposure on Government of Jamaica securities, there is no significant concentration of credit risk related to reverse repurchase agreements. As a consequence, management’s expectation of default is low.

Therefore, no impairment provision was recognised.

The following table summarizes the Credit Union’s credit exposure for reverse repurchase agreement at their carrying amounts: 2020 $’000 At amortised cost (Note 10)

1,294,634

2019 $’000 549,486.

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5.

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

Financial risk factors (cont’d) (ii)

Liquidity risk Liquidity risk is the risk that the Credit Union is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay depositors and fulfil commitments to lend.

The Credit Union’s approach to managing liquidity is to ensure as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damages to the Credit Union’s reputation.

Liquidity risk management process The Credit Union’s liquidity management process, as carried out within the Credit Union, includes: (i)

Monitoring future cash flows and liquidity on a daily basis. This incorporates an assessment of expected cash flows and the availability of high grade collateral which could be used to secure funding if required;

(ii)

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

(iii)

Optimising cash returns on investments;

(iv)

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 those projections is an analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial assets.

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5.

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

Financial risk factors (cont’d) (ii)

Liquidity risk (cont’d) Liquidity risk management process (cont’d) The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearing liabilities as they mature, are important factors in assessing the liquidity of the Credit Union and its exposure to changes in interest rates and exchange rates.

The tables below present the undiscounted cash flows payable (both interest and principal cash flows) of the Credit Union’s financial liabilities based on contractual repayment obligations. The Credit Union expects that many customers will not request repayment on the earliest date the Credit Union could be required to pay. The expected maturity dates of financial liabilities are based on estimates made by management and determined by retention history.

124

125

125

5.

(iv)

(ii)

144,862 2,323,199 4,211 3,752,446 360,013 2,104 5,614 6,592,449 144,214 2,086,326 3,455,644 363,410 1,998 6,051,592

Total financial liabilities (Contractual dates) As at 31 December 2019: Payables Voluntary shares Deferred shares Saving deposits Loan scheme deposits Lease liabilities External credit Total financial liabilities (Contractual dates)

Up to 3 Months $’000 As at 31 December 2020: Payables Voluntary shares Deferred shares Saving deposits Loan scheme deposits Lease liabilities External credit

Liquidity risk (cont’d)

Financial risk (cont’d)

FINANCIAL RISK MANAGEMENT (CONT’D):

843,353

281,138 10,009 462,552 83,472 6,111 71

678,879

163,387 22,768 382,727 86,717 6,437 16,843

Between 3 and 12 Months $’000

31 DECEMBER 2020

1,664,828

987,674 32,895 439,240 8,953 47,627 148,439

1,437,333

816,329 456,386 11,971 39,085 113,562

Between 1 and 5 Years $’000

EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE CREDIT UNION LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS

539,501

371,626 47,681 19,938 100,256

926,584

809,319 40,094 19,938 57,233

Over 5 Years $’000

9,099,274

144,214 3,726,764 42,904 4,405,117 455,835 75,674 248,766

9,635,245

144,862 4,112,234 26,979 4,631,653 458,701 67,564 193,252

Total contractual cash flows $’000

8,403,629

144,214 3,719,463 39,692 3,882,940 452,706 55,078 109,536.

9,371,068.

144,862 4,034,758 26,725 4,551,976 455,588 51,239 105,920

Total carrying Amounts $’000

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5.

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

Financial risk (cont’d) (ii)

Liquidity risk (cont’d) Assets available to meet all the liabilities and to cover outstanding loan commitments include cash, deposits, short-term investments, reverse repurchase agreements and advances to customers.

The members’ voluntary shares are contractually on call except in cases where these balances are held as security for loans.

Items not carried on the statement of financial position At 31 December 2020, the Credit Union’s commitment to extend credit to members, in respect of loans approved but not yet disbursed, amounted to $74,194,000 (2019: $278,730,000).

(iii)

Market risk The Credit Union 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 risk mainly arises from changes in foreign currency exchange rates and interest rates. 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 measured using sensitivity analysis.

Currency risk Currency or foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Credit Union’s exposure to foreign currency risk at statement of financial position date was as follows:

.

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5.

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

Financial risk (cont’d) (iii)

Market risk (cont’d) Currency risk (cont’d)

Reverse repurchase agreementsUSD GBP Financial investmentsUSD Cash in hand and at bank USD

2020 $’000

2019 $’000

60,730

40,636

-

5,172

12,906

11,366

3,075

3,036

Foreign currency sensitivity The following tables indicate the currencies to which the Credit Union had significant exposure on its monetary assets and its forecast cash flows. The changes in currency rates below represent management’s assessment of the possible change in foreign exchange rates.

Change in Effect on % Change in Effect on Currency Rate Net Surplus Currency Rate Net Surplus 2020 2020 2019 2019 % $’000 % $’000

127

Currency: USD

+6

4,603

+6

GBP

+6

-

+6

USD

-2

( 1,534)

-4

( 2,201)

GBP

-2

-

-4

(

3,302 310 .

206)

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CO-OPERATIVE EduCom Co-OperativeEduCom Credit Union Limited CREDIT UNION LIMITED NOTES TO THE FINANCIALNOTES STATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Financial risk (cont’d) (iii)

Market risk (cont’d) Price risk Price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market. The Credit Union is exposed to equity securities price risk arising from its holding of investment measured at fair value through surplus or deficit.

The following table indicates the possible impact on the Credit Union’s surplus as a result of possible increase/decrease in the equity prices. There was no impact on other comprehensive income.

Effects on Surplus 2020 2019 $’000 $’000 Changes in equity prices: +5% (2019:10%) -10% (2019:10%)

2,583 (5,166)

984 ( 984)

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, saving deposits, loan scheme deposits, deferred shares, reverse repurchase agreements, lease liabilities and external credit.

Floating rate instruments expose the Credit Union to cash flow interest risk, whereas fixed interest rate instruments expose the Credit Union to fair value interest risk.

The Credit Union’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 interest bearing financial liabilities. The Board sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is monitored daily by the Finance department.

There were no financial assets or financial liabilities with variable interest rate at 31 March 2019 and 2020.

128

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EduCom Co-OperativeNOTES Credit TO Union Limited THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 5.

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

Financial risk (cont’d) (iii)

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

Up to 3 Months $’000 Financial Assets: Liquid assets Reverse repurchase agreements Financial investments Loans receivables

Financial Liabilities: Savings deposits Loan scheme deposits Voluntary shares Deferred shares Lease liabilities External credits

129

Between 3 and 12 Months $’000

2019 Between 1 and 5 Over 5 Years Years $’000 $’000 -

Total $’000

-

618,555

618,555

-

438,702 53,743 41,771

110,784 12,000 205,927

25,860 3,353,291 4,162,235

549,486 178,040 269,643 7,763,224

1,152,771

328,711

3,379,151 4,162,235

178,040 9,200,908

3,001,666

454,407

391,123

35,744

-

3,882,940

360,281 2,003,085 902 -

83,472 218,542 9,366 2,936 -

8,953 991,344 30,326 32,712 109,536

506,492 18,528 -

-

452,706 3,719,463 39,692 55,078 109,536

5,365,934

768,723

1,563,994

560,764

-

8,259,415

Total interest rate Sensitivity gap

(4,213,163)

Cumulative Gap

(4,213,163) (4,653,175) (2,838,018)

( 440,012)

-

NonInterest Bearing $’000

1,815,157 3,601,471 763,453

178,040

941,493

941,493

-

.

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative NOTES Credit TO Union THELimited FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 5.

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

Financial risk (cont’d) (iii)

Market risk (cont’d) Interest rate risk (cont’d) The following tables summarize the Credit Union’s exposure to interest rate risk. They include the Credit Union’s financial instruments at carrying amounts, categorized by the earlier of contractual re-pricing or maturity dates.

Up to 3 Months $’000 Financial Assets: Liquid assets 725,486 Reverse repurchase agreements 1,223,279 Financial investments 65,773 Loans receivables 81,422 2,095,960 Financial Liabilities: Savings deposits 3,746,061 Loan scheme deposits 359,444 Voluntary shares 2,317,225 Deferred shares 4,196 Lease liabilities 750 External credits -

Between 3 and 12 Months $’000

Between 1 and 5 Years $’000

2020 Over 5 Years $’000

NonInterest Bearing $’000

Total $’000

-

-

-

-

725,486

71,355

-

-

-

1,294,634

253,373 -

614,332 7,622,437

255,186 174,375

40,000 3,508,803 3,857,837

500,916 3,548,803 3,857,837

253,373 10,256,889

409,878

365,839

30,198

-

4,551,976

86,717 163,186 22,529 2,836 -

9,427 801,998 31,124 69,943

752,349 16,529 35,977

-

455,588 4,034,758 26,725 51,239 105,920

685,146

1,278,331

835,053

-

9,226,206

Total interest rate Sensitivity gap

(4,331,716) ( 184,230) 2,270,472

3,022,784

253,373

1,030,683

Cumulative Gap

(4,331,716) (4,515,946) (2,245,474)

6,427,676

777,310 1,030,683

-

.

130

EduCom CO-OPERATIVE CREDIT UNION LIMITED

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EduCom Co-Operative Credit Union Limited NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

5.

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

Operational risk Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Credit Union’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Credit Union’s operations.

The Credit Union’s objective is to manage operational risks so as to balance the avoidance of financial losses and damage to the Credit Union’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each department.

This responsibility is supported by the development of overall standards for the management of operational risk in the following areas: •

Requirement for appropriate segregation of duties, including the independent authorisation of transactions;

•

Requirements for the reconciliation and monitoring of transactions;

•

Compliance with regulatory and other legal requirements;

•

Documentation of control and procedures;

•

Requirement for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified;

•

Requirements for the reporting of operational losses and proposed remedial action;

•

Development of a contingency plan;

•

Risk mitigation, including insurance where this is effective.

Compliance with the Credit Union’s standards is supported by a programme of periodic reviews undertaken by Internal Audit. The results of internal audit reviews are discussed with the department heads, with summaries submitted to senior management.

131

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Capital management The Credit Union’s objectives when managing institutional capital, which is a broader concept than the ‘equity’ on the face of the statement of financial position are: (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 10% ratio of institutional capital to total assets;

(iv)

To maintain a strong capital base to support the development of its business through the allocation of 20% (minimum) of net surplus to institutional capital; and

(v)

To increase the permanent share capital as the main focus of building institutional capital.

Capital adequacy and the use of regulatory capital are monitored by the Credit Union’s management, based on the guidelines in its Capital Asset Management Policy.

The table below summaries the composition of regulatory capital and the ratios of the Credit Union as at 31 December 2020 and 2019. The total regulatory capital is comprised of institutional capital and deferred shares. During the year, the Credit Union complied with all externally imposed capital requirements to which they are subject.

Actual 2020 $’000 Total regulatory capital Risk – weighted assets: Total risk-weighted assets Risk weighted capital adequacy ratio

1,162,564

Required 2020 $’000 804,308

Actual 2019 $’000 1,114,274

8,043,082 14%

Required 2019 $’000 729,164

7,291,637 10%

15%

10%

132

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

5.

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

Capital management (cont’d) In determining the Credit Union’s capital base (institution capital), the institutional capital of the acquired credit unions at their dates of merger were included. UWI Mona & Community Co-operative Credit Union Limited (UWI) and A.A.M.M Co-operative Credit Union Limited (A.A.M.M.) merged to form EduCom Co-operative Credit Union Limited on 1 April 2015. St. Catherine Credit Union Limited (SCCU) merged with EduCom Co-operative Credit Union Limited as at 1 January 2017. As at the date of each merger, the institutional capital of the acquired entities included the following reserves:

Statutory reserve Retained earnings/(deficit) General reserve

6.

NON-INTEREST INCOME:

Dividends from equity securities Rental income Fees Miscellaneous income

133

UWI $

SCCU $

163,881,381 22,312,866 24,390,297

154,586,335 (140,711,327) .

210,584,544

13,875,008

2020 $’000

2019 $’000

930 2,154 94,125 59,840

897 2,683 107,582 66,355

157,049

177,517

Page 61

EduCom DCO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 7.

OPERATING EXPENSES:

Utilities Depreciation Amortisation of right-of-use asset Audit and supervision Repairs and maintenance Telecommunication Printing, stationery and supplies Insurance premium Professional and consulting Subscription Administrative expenses Security Property, plant and equipment written off Loss on disposal of asset held for sale Members’ security Marketing and promotion Representation and affiliation Staff costs (note 8)

8.

STAFF COSTS:

Employee salaries and allowances Other staff benefits Pension (note 17)

2020 $’000

2019 $’000

17,301 24,493 6,850 5,500 5,893 21,524 21,361 8,504 26,047 110 55,773 19,434 4,850 26,735 21,001 37,888 494,927

16,067 24,348 6,279 4,580 7,611 20,075 18,339 7,570 20,003 114 56,989 20,896 4,418 23,361 28,273 48,910 480,811

798,191

788,644

2020 $’000

2019 $’000

371,085 121,533 2,309

365,851 110,522 4,438

494,927

480,811

124 11 18

139 10 -

153

149

The number of persons employed at December 31: Full-time Contract Temporary

134

Page 62

EduCom CO-OPERATIVE CREDIT UNION LIMITED EduCom Co-Operative Credit Union Limited

NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 9.

LIQUID ASSETS:

Cumax Money Market Fund 10.

2020 $’000

2019 $’000

725,486

618,555

REVERSE REPURCHASE AGREEMENTS: The Credit Union enters into reverse repurchase agreements collaterised by Government of Jamaica securities as follows:

Principal Interest receivable

2020 $’000

2019 $’000

1,290,151 4,483

547,541 1,945

1,294,634

549,486

These agreements may result in a credit exposure in the event that the counter party to the transactions is unable to fulfill its collateral obligations.

The Credit Union did not recognise impairment losses on the reserve repurchase agreements because the amount was immaterial.

All reverse repurchase agreements are expected to mature within 180 days after the end of the financial year.

11.

FINANCIAL INVESTMENTS:

Amortised costs: Victoria Mutual Building Society Special mortgage C & WJ Co-operative Credit Union First Heritage Co-operative Credit Union Commercial paper Less impairment losses Total carried forward (page 63)

135

(

2020 $’000

2019 $’000

175,463 20 10,030 24,119 164,203

71,779 20 10,063 22,447 -

373,835 2,846)

104,309 ( 2,686)

370,989

101,623

Page 63

EduCom CO-OPERATIVE CREDIT UNION LIMITED EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 11.

FINANCIAL INVESTMENTS (CONT’D):

Total brought forward (page 62) Fair value through profit or loss: Quoted equities Jamaica Co-operative Credit Union League (JCCUL) Jamaica Money Market Brokers Scotia Investments Limited Jamaica Money Market Brokers Preference Shares Fair value through other comprehensive income: Unquoted equities: Jamaica Co-operative Credit Union League (JCCUL) Quality Network (QNET) C.O.K Sodality Co-operative Credit Union Limited Credit Union Fund Management Company MoneyMasters Limited Caribbean Mezzanine Fund Jamaica Co-operative Insurance Agency Limited

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

2020 $’000

2019 $’000

370,989

101,623

51,659

9,839

46,813 12,906 27,583

45,853 11,366 26,515

23,049 162,010

23,114 116,687

14,161 11,383

14,161 11,383

11,002 13,787 10,000 20,000

11,002 13,787 -

1,000 81,333

1,000 51,333

614,332

269,643

2020 $’000

2019 $’000

320,959 40,000 253,373

65,743 25,860 178,040

614,332

269,643

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

11.

137

FINANCIAL INVESTMENTS (CONT’D): (a)

The Victoria Mutual Building Society deposits include Certificate of Deposits which are held to secure joint mortgage facilities which are extended to members of the Credit Union.

(b)

Investments with Credit Union Fund Management Company represent deposits and mortgage fund instruments, used to secure joint mortgage facilities which are extended to members of the Credit Union.

(c)

The rules of the League stipulate that a minimum of 1,000,000 shares, each with a par value of $1.00, must be held with the League for the Credit Union to retain membership status. The equivalent of amounts held in the statutory reserve (Note 24 (a) must either be used to purchase League shares or placed in League term deposits (Note 9).

(d)

The QNET amount represents investment by the Credit Union in the company which will provide information services to participating Credit Unions. In total, the participating Credit Unions will account for 80% of the cost of the project and the remaining 20% will be funded by the League.

(e)

FHCCU Investment represents deferred shares held by the Credit Union in First Heritage Co-operative Credit Union. The shares are held for five years on which the Credit Union receives a fixed income.

(f)

The Commercial Paper represents amount to be used as general working capital support by the University of West Indies, Jamaica. The commercial paper agreement is for no more than 180 days and accrues interest at 7.99% per annum.

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

12.

LOAN RECEIVABLES: Movement in loans during the year is as follows-

2020 $’000

2019 $’000

7,763,224 10,665,147

6,700,193 13,021,988

Less: repayments and transfers

18,428,371 (10,740,015)

19,722,181 (11,933,621)

Less: Provision for loan impairment

(

Balance at beginning of year Add: disbursements

Accrued interest Maturity: Due within 1 year Due after 1 year

7,688,356 86,589)

(

7,788,560 46,891)

7,601,767 20,670

7,741,669 21,555

7,622,437

7,763,224

255,797 7,366,640

247,698 7,515,526

7,622,437

7,763,224

The aggregate amount of non-performing loans on which interest was not being accrued amounted to $172,213,561 (2019: $145,397,164). Uncollected interest not accrued in the financial statements on these loans was estimated at $12,658,141 (2019: $17,856,572).

138

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EduCom CO-OPERATIVE CREDIT UNION LIMITED EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 12.

LOAN RECEIVABLES (CONT’D): Provision for loan impairment The movement in the provision for loan impairment determined under the requirements of IFRS is as follows:

Balance at beginning of year Increase charged to revenue during the year Bad debt written off Impairment losses at year end

2020 $’000

2019 $’000

46,891 90,089

55,996 43,730

136,980 ( 50,391)

99,726 (52,835)

86,589

46,891

The provision for impairment losses under the JCCUL regulatory requirement is as follows: As at 31 December 2020: Months in Arrears

139

Number of Total accounts Loan Savings held in arrears Balances against loans $’000 $’000

Exposure $’000

Loan Loss Provision $’000

2 – 3 months 3 – 6 months 7 – 12 months 12 months and over

51 92 141 40

43,407 63,132 80,685 28,397

4,330 5,959 7,489 2,377

39,077 57,173 73,196 26,020

4,341 18,940 48,411 28,396

Totals

324

215,621

20,155

195,466

100,088

Provision Rate % 10 30 60 100

Page 67

EduCom CO-OPERATIVE CREDIT UNION LIMITED EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 12.

LOAN RECEIVABLES (CONT’D): Provision for loan impairment (cont’d) As at 31 December 2019: Months in Arrears

accounts in arrears

Number of Total Loan Savings held Balance against loans $’000 $’000

Exposure $’000

Loan Loss Provision $’000

2 – 3 months 3 – 6 months 7 – 12 months 12 months and over

134 193 105 20

64,394 89,702 41,119 14,576

6,680 15,811 15,180 5,961

57,714 73,891 25,939 8,615

6,439 26,911 24,671 14,576

Totals

452

209,791

43,632

166,159

72,597

Provision Rate % 10 30 60 100

The provision for loan impairment under the JCCUL regulatory requirement for 2020 is in excess of the provision required under IFRS provisioning rules. The excess of the League’s provision over the IFRS provision is dealt with through a transfer from undistributed surplus to a loan loss reserve as follows –

IFRS provision as per above Loan loss reserve (note 25 (f))

13.

CASH AND BANK BALANCES: Cash Cash at bank and in hand Cash and cash equivalent in the cash flow comprise:

Cash and bank balances Liquid assets (note 9)

2020 $’000

2019 $’000

86,589 13,499

46,891 25,706

100,088

72,597

2020 $’000

2019 $’000

77,258

65,943

2020 $’000

2019 $’000

77,258 725,486

65,943 618,555

802,744

684,498

140

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

14.

OTHER ASSETS:

Other receivables Payroll receivables Foreclosed properties Prepaid expenses

2020 $’000

2019 $’000

6,950 39,365 31,808 6,826

7,454 37,723 31,808 13,304

84,949

90,289

Foreclosed properties represent the fair value less costs to sell properties previously held as collateral on which the Credit Union has foreclosed. These assets are to be disposed of within three years.

141

142

15.

29,802 5,662

Depreciation 1 January 2019 Charge for the year

341,338 340,805

Net Book Value31 December 2020

31 December 2019

35,464 5,660 ( 18,560) 22,564

376,269 ( 12,367) 363,902

At 31 December 2019 Additions Transfer Revaluation Write-off At 31 December 2020

At 31 December 2019 Charge for the year Transfer Revaluation Write-off At 31 December 2020

376,269 -

At cost/ valuation 1 January 2019 Additions

Freehold Land & Buildings $’000

PROPERTY, PLANT AND EQUIPMENT:

11,284

6,794

149,825 7,011 409 ( 64,878) 92,367

144,420 5,405

161,109 3,887 324 ( 66,159) 99,161

155,337 5,772

Computer Equipment & Software $’000

30,936

25,072

92,850 8,247 ( 409) ( 43,456) 57,232

84,000 8,850

123,786 5,406 137 ( 47,025) 82,304

116,955 6,831

Furniture, Fixtures, Signs & Equipment $’000

31 DECEMBER 2020

10,095

8,411

14,300 2,034 ( 4,931) 11,403

12,290 2,010

24,395 729 ( 379) ( 4,931) 19,814

23,644 751

Leasehold Improvement $’000

EduCom CO-OPERATIVE CREDIT UNION LIMITED EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020

3,520

1,979

8,749 1,541 ( 195) 10,095

6,328 2,421

12,269 ( 195) 12,074

12,269 -

Motor Vehicles $’000

1,758

4,671

-

-

1,758 2,995 ( 82) 4,671

466 1,292

Capital Work-in Progress $’000

398,398

388,265

301,188 24,493 ( 18,560) (113,460) 193,661

276,840 24,348

699,586 13,017 ( 12,367) (118,310) 581,926

684,940 14,646

Total $’000

Page 69

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES STATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

15.

PROPERTY, PLANT AND EQUIPMENT (CONT’D): The Credit Union’s land and building were revalued on 6 April and 4 May 2020, by independent qualified valuers. The valuation surplus was credited to other comprehensive income and is shown in non-institutional capital.

The fair value measurement of the building has been categorized as level 3 for fair value, based on inputs to the valuation technique relating to expected market rental growth, yields and rental rates. A reconciliation to the closing fair value balance is as follows –

16.

2020 $’000

2019 $’000

Historical cost Gains included in ‘other comprehensive income’ Gain on property revaluation

135,542

135,542

210,446

204,253

Closing balance (level 3 fair values)

345,988

339,795

RIGHTS-OF-USE ASSETS: The Credit Union recognized the right-of-use asset for its leased premise as follows:

Adoption of IFRS 16 Amortisation Balance 31 December

2020 $’000

2019 $’000

53,657 ( 6,850)

59,936 ( 6,279)

46,807

53,657.

The following table presents the lease obligations for the Credit Union:

Adoption of IFRS 16 Interest expense on lease obligations Rent payments Balance 31 December

143

2020 $’000

2019 $’000

55,078 4,270 ( 8,109)

58,372 4,156 ( 7,450)

51,239

55,078.

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

16.

RIGHTS-OF-USE ASSET (CONT’D): The following table presents the lease liabilities obligation for the Credit Union (cont’d): 2020 $’000

2019 $’000

Current portion Non-current portion

3,586 47,653

3,838 51,240

Balance 31 December

51,239

55,078

2020 $’000

2019 $’000

6,850 4,270 516

6,279 4,156 516

11,636

10,951

2020 $’000

2019 $’000

3,839

3,294

Amount recognised in the statement of comprehensive income:

Amortisation Interest on lease liabilities Short term lease expense

Amount recognised in the statement of cashflows: Total cash outflows for leases excluding interest

The Credit Union leases various office spaces for fixed periods of up to five (5) years with the option to renew and obtain lease term extensions. When measuring the lease obligations, the Credit Union discounted the remaining lease payments using its incremental borrowing rate at the date of initial application, which is 8% per annum.

144

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

17.

PENSION, RETIREMENT BENEFIT ASSETS: The Credit Union has both a defined contribution pension scheme and a defined benefit pension scheme.

Defined Contribution Scheme The Credit Union is a participatory employer in a money purchase pension scheme administered

by Sagicor Life Jamaica Limited. The scheme is open to all employees who satisfy eligibility requirements. Contributions are determined by reference to gross salary with minimum contributions of 5% for employees with an option for additional amounts up to 5% and a contribution of 10% by the Credit Union for each employee contributing to the scheme.

Employer’s contributions to the pension scheme are expensed annually. Contributions for the year amounted to $25,013,204 (2019: $19,490,654).

The most recent actuarial valuation, which was conducted as at 30 June 2019 disclosed a surplus of $22,461,000.

Defined Benefit Scheme The Credit Union participates in a joint contributory pension scheme, which is restricted to all former permanent employees of AAMM Co-operative Credit Union and operated by the Jamaica Co-operative Credit Union League Limited. The plan provides benefits to members based on average earnings for their final three years of service, with each employee contributing 5-10% of pensionable salaries and the Credit Union contributing currently 8% The plan is valued by independent actuaries annually for financial reporting purposes using the projected unit credit method. Additionally, the plan is valued by independent actuaries annually to determine the adequacy of funding. The latest such valuation was at 31 December 2020 revealed that the scheme was adequately funded. (a)

The defined benefit asset recognised in the statement of financial position was determined as follows: 2020 $’000 Fair value of plan assets Present value of obligations Asset recognised in the statement of financial position

.

145

2019 $’000

172,696 (135,520)

157,118 (119,364)

37,176

37,754

Page 73

EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE CREDIT UNION LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 17.

PENSION, RETIREMENT BENEFIT ASSETS (CONT’D): . (b) Movements in the net asset recognised in the statement of financial position:

Net assets at beginning of the year Contributions Income recognised in surplus Re-measurement recognised in other comprehensive income Net assets at the end of the year (c)

2020 $’000

2019 $’000

37,754 4,958 ( 2,309)

19,388 5,217 ( 4,438)

( 3,227)

17,587

37,176

37,754

The movement in the fair value of pension plan assets during the year was as follows: 2020 $’000 At beginning of year Interest income on plan assets Actuarial (losses)/gains on plan assets Contributions: Employer Employee Administrative expenses Benefits paid At the end of the year

(d)

2019 $’000

157,118 12,030 ( 1,914)

( (

4,958 4,143 1,097) 2,542) 172,696

138,594 9,891 4,149

( (

5,217 4,255 912) 4,076) 157,118

The movement in the present value of the defined benefit obligation during the year was as follows: 2020 2019 $’000 $’000 At the beginning of the year Current service cost Employees’ contributions Interest cost on plan obligations Actuarial gains/(losses) on obligations Benefits paid At end of the year

119,364 4,230 4,143 9,012 1,313 ( 2,542)

119,206 5,067 4,255 8,351 ( 13,439) ( 4,076)

135,520

119,364

Expected contributions to the plan for the year ended 31 December 2021 is $4.66 million.

146

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EduCom Co-Operative Credit Union Limited NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

17.

PENSION, RETIREMENT BENEFITS ASSETS (CONT’D): (e)

The amounts recognised in surplus for the year are as follows:

Current service cost Interest cost on obligations Income on plan assets Administrative expenses Total included in staff costs (note 8) (f)

4,230 9,012 (12,030) 1,097

5,067 8,351 (9,891) 911

2,309

4,438

2020 $’000

2019 $’000

(3,227)

17,587

The pension plan assets are allocated based on the Credit Union’s obligation as a proportion of the total obligation of the plan. The distribution of plan assets was as follows:

Quoted equities Real estate – investment trust and property Government of Jamaica securities Repurchase agreements US$ Bonds Other

147

2019 $’000

The amounts recognized in other comprehensive for the year are as follows:

Actuarial (loss)/gain on net plan assets (g)

2020 $’000

2020 %

2019 %

20 25 31 2 19 3

24 23 33 4 8 8

100

100

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

17.

PENSION, RETIREMENT BENEFITS ASSETS (CONT’D): (h)

The five-year trend for the fair value of plan assets, the defined benefit obligation, the surplus in the plan, and experience adjustments for plan assets and liabilities are as follows: 2020 2019 2018 2017 2016 $’000 $’000 $’000 $’000 $’000 Fair value of plan assets Defined benefits obligation

172,696 (135,520)

157,118 (119,364)

37,176

37,754

Surplus Experience adjustments: Fair value of plan assets Defined benefit obligation (i)

(

1,914) 2,945

4,149 ( 5,902)

138,594 122,258 (119,206) ( 90,649) 19,388 (

1,641) 1,421

31,609

29,953

2,133 ( 717)

3,649 ( 1,703)

The principal actuarial assumptions used were as follows:

Discount rate Future salary increases Expected average remaining working lives of employees (years) (j)

102,931 ( 72,978)

2020 %

2019 %

9.00 11.00

7.50 8.00

39.00

41

Impact on Defined Benefit Obligation (DBO) of 1% change in key economic assumptions The change in the Defined Benefit Obligation (DBO) that would arise from a one present (1%) change in each of the key economic assumptions is shown below. In determining the impact of each assumption, the others are held constant. .

Sensitivity Analysis of Key Economic Assumptions Measurement Assumptions Discount rate Future salary increase Future pension increases

+1% $’000 (25,671) 15,941 15,217

2020

-1% $’000

+1% $’000

34,499 (13,501) (12,705)

(23,606) 15,088 14,005

2019

-1% $’000

32,199 (12,636) (11,541)

148

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

EduCom Co-Operative Credit Union Limited NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL 31 December 2020 31 DECEMBER 2020

17.

PENSION, RETIREMENT BENEFITS ASSETS (CONT’D): (k)

Liability duration Liability duration (years) 2020 2019 Category of participant: Active members Deferred pensioners Retirees

24.8 14.0 11.3

25.6 15.0 11.5

23

23.8

All participants

There was no movement in the liability duration of the active members during the year under review. However, reduction can result from changes in the actuarial assumptions, to include rates of withdrawal from service on grounds other than retirement or death.

18.

SAVING DEPOSITS: Ordinary deposits Balance at 1 January Deposits and transfers Less withdrawals and transfers

2019 $’000

3,882,940 27,525,453

3,870,822 29,066,822

31,408,393 (27,775,117)

32,937,644 (29,948,457)

Fixed deposits

3,633,276 866,251

2,989,187 841,900.

Interest accrued

4,499,527 52,449

3,831,087 51,853

4,551,976

3,882,940

4,155,939 396,037

3,456,073 426,867

4,551,976

3,882,940

Maturity: Due within 1 year Due after 1 year

149

2020 $’000

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EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE CREDIT UNION LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 19.

VOLUNTARY SHARES:

Regular deposits: Balance at 1 January Share deposited Share withdrawn

Maturity: Due within 1 year Due after 1 year

20.

2020 $’000

2019 $’000

3,719,463 3,199,034

3,517,053 3,600,407.

6,918,497 (2,883,739)

7,117,460 (3,397,997)

4,034,758

3,719,463

2,480,411 1,554,347

2,221,627 1,497,836

4,034,758

3,719,463

LOAN SCHEME DEPOSITS: The inception of the scheme loan management fund was developed from various unionized groups on the University of the West Indies campus to provide access to more affordable financial services for their constituents. The groups selected UWI Mona & Community Credit Union to be the financial entity through which access to financial services would be disseminated to its members. This role was subsequently passed to EduCom Co-operative Credit Union in April 2015 due to the merger between UWI Mona & Community Credit Union and AAMM Co-operative Credit Union.

Additionally, in 2006 the Government of Jamaica provided funds on behalf of the University of the West Indies (UWI) and University of Technology, Jamaica (Utech) to be used to provide access to affordable loans to students for the financing of their tertiary education.

EduCom manages the fund through the assessment, evaluation of loan applications from qualified members and students and the disbursement of the loans. The Credit Union is also responsible for the collection of loan payments and the investment of un-loaned funds. All expenditure incurred in the provision of the financial services are charged to the fund and interest earned on un-loaned funds are credited. EduCom earns a management fee for the provision of the various financial services provided in the management of the fund.

150

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EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE CREDIT UNION LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 20.

LOAN SCHEME DEPOSITS (CONT’D):

Balance at 1 January 2019 Add: Interest on fixed deposit Receipts interest from loans Interest paid on unloaded fund Less: Management fees Insurance Honorarium

Balance at 31 December 2020

Utech Revolving Loan $’000

UWI $’000

Others $’000

Total $’000

105,116

318,496

29,094

452,706

1,870 596

2,788 6,333 1,109

2,701 .

5,489 8,203 1,705

2,466

10,230

2,701

15,397

( 4,790) ( 294) - .

5,492) 496) 1,443)

-

.

( 10,282) ( 790) ( 1,443)

( 5,084)

( 7,431)

-

.

( 12,515)

102,498

321,295

31,795

455,588

UWI $’000

Others $’000

Total $’000

107,219

306,326

28,029

441,574

2,501 568

8,785 2,277 7,129 1,417

1,065 .

8,785 3,342 9,630 1,985

3,069

19,608

1,065

23,742

Utech Revolving Loan $’000 Balance at 1 January 2018 Add: New funds Interest on Fixed Deposit Receipts interest from loans Interest paid on unloaded fund

Less: Management fees Insurance Honorarium

Balance at 31 December 2019

151

( ( (

( 4,791) ( 381) - .

( 5,447) ( 535) ( 1,456)

-

.

( 10,238) ( 916) ( 1,456)

( 5,172)

( 7,438)

-

.

( 12,610)

105,116

318,496

29,094

452,706

EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE NOTES TO THE FINANCIAL STATEMENTS CREDIT UNION LIMITED 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS

Page 79

31 DECEMBER 2020 21.

DEFERRED SHARES:

Balance at 1 January Withdrawal Interest (paid)/ payable

2020 $’000

2019 $’000

39,692 (12,967) -

47,369 ( 2,096) ( 5,581)

26,725

39,692

26,725 -

9,366 30,326

26,725

39,692

Maturity: Due within 1 year Due after 1 year

These amounts were issued at a par value of $1,000.00 in April 2017. They are not withdrawable for a period of five (5) years- up to November 2021 and attract interest rate at 8% for the first two years. Thereafter, the interest rate will be reset every three (3) months, at the average three (3) months treasury bill yield held prior to the commencement of each payment period, plus one hundred basis point (100). Based on the proposed Bank of Jamaica Credit Union Regulations, deferred shares are treated as institutional capital, and as such are included in the calculation of the capital to asset ratio. They are, however, classified in these financial statements as liabilities in accordance with the requirements of IFRS. Interests on deferred shares were paid during the period.

22.

EXTERNAL CREDITS:

Jamaica Co-operative Credit Union League - 7% NHT Micro Financing Facility – 4.5%

Maturity: Due after 1 year

2020 $’000

2019 $’000

35,945 69,975

37,211 72,325

105,920

109,536

105,920

109,536

The Jamaica Co-operative Credit Union League loan is secured by First legal mortgage stamped to cover $ 76.5 million over commercial property located at 10 Oxford Road, Kingston 5, registered at volume 956 Folio 140 in the name of EduCom Cooperative Credit Union limited and charge over loan receivables.

The NHT Micro Financing Facility allows members of the Credit Union to apply through the Credit Union to access NHT Housing Financing. The facility is secured by the members’ loan receivable balances.

152

EduCom Co-Operative Credit Union Limited EduCom CO-OPERATIVE CREDIT UNION LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS

Page 80

31 DECEMBER 2020 23.

PAYABLES:

2020 $’000

2019 $’000

7,551 6,173 5,091 8,565 69,930 25,156 15,748 6,648

17,684 7,999 4,366 5,465 60,141 20,258 14,034 14,267

144,862 8,645 12,798 4,207

144,214 6,329 16,415 6,190

170,512

173,148

2020 $’000

2019 $’000

318,169 19,155 1,812

290,198 26,196 1,775

Special reserve

339,136 253,143

318,169 253,143

Members’ permanent shares

592,279 255,483

571,312 215,193

Business combination reserve

847,762 288,077

786,505 288,077

1,135,839

1,074,582

Accounts payables Stale-dated cheques Audit & accounting fees Accrued expenses Insurance payable Deceased members’ account Members’ payable Other payables Total financial liabilities measured at amortised cost Withholding tax Accrued benefits and deductions Others

24.

INSTITUTIONAL CAPITAL:

Statutory and legal reserves Balance brought forward Current year transfer Entrance fee .

(a)

Statutory and legal reserves As required by the Co-operative Societies Act and the rules of the EduCom Co-operative Credit Union Limited, a minimum of twenty-five percent (25%) of the annual surplus and amounts collected for entrance fees are transferred to this reserve.

153

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 24.

INSTITUTIONAL CAPITAL (CONT’D): (b)

Special reserves The special reserves represent amounts appropriated by members, to strengthen the capital based of the Credit Union and is not available for distribution.

(c)

Members’ permanent shares – Permanent shares are shares issued at no par value, paid up in cash and form a permanent part of the capital of the Credit Union. Permanent shares may be redeemable subject to the sale, transfer, or repurchase of such shares per ‘Rule 16’ of the Credit Union’s Rule Book.

(d)

Business combination reserve This represents the excess of the net assets acquired and the deemed value for shares issued to members in the business combinations.

25.

NON-INSTITUTIONAL CAPITAL:

Undistributed surplus Retirement benefit reserve General reserves Revaluation reserve Permanent Shares reserve Loan loss reserve

(a)

2020 $’000

2019 $’000

80,387 37,176 18,580 210,446 3,201 13,499

66,032 37,754 5,806 204,253 2,863 25,706

363,289

342,414

Undistributed surplus: This represents surplus not distributed at the statement of financial position date.

(b)

Retirement benefit reserve: This represents actuarial gain on plan assets as per annual revaluation.

(c)

General reserves: These represent appropriations for scholarships, donations and for other miscellaneous purposes.

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

25.

NON-INSTITUTIONAL CAPITAL (CONT’D): (d)

Revaluation reserve: This represents unrealised gain on the revaluation of the Credit Union’s freehold land and buildings.

(e)

Permanent share reserve: This represents amount set aside from surplus to be ascribed as permanent shares for members. These permanent shares were issued to members during the year. The balance above represents shares bought back by the Credit Union from resigning and deceased members.

(f)

Loan loss reserve: This is the excess of the loan loss provision under the League’s regulatory requirements over the IFRS 9 requirements.

26.

APPROPRIATIONS TO AND DECREASE IN OTHER RESERVES: (a)

The following payments/ transfers were made from reserve during the year:

Payments: Honorarium BPR Project Community Outreach Program

(b)

2019 $’000

126

10,000 13,064 3,212

126

26,276

The following amounts were transferred from accumulated surplus to other reserves as per approval at special general meeting: 2020 2019 $’000 $’000 Dividend Community Outreach Program BPR Project Honorarium Scholarship fund

155

2020 $’000

30,000 4,900 8,000

49,965 4,300 15,000 10,000 -

42,900

79,265

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

27.

INSURANCE: (a)

Fidelity Insurance Coverage During the year the Credit Union had fidelity insurance coverage with British Caribbean Insurance Company Limited. The total premium for the year was $3,633,172 (2019: $2,673,946).

(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. Total premium for the year was $23,787,622 (2019: $20,881,164).

(c)

Golden Harvest Premium Insurance Coverage During the year the Credit Union had insurance coverage with CMFG Life Insurance Company. The total premium for the year was $2,947,565 (2019: $2,480,789). These policies remained in force throughout the year with all premiums being paid promptly.

28.

RELATED PARTY TRANSACTIONS: The Credit Union entered into the following transactions with related parties:

(a)

(b)

2020 $’000

2019 $’000

Board and committee members

171,629

156,019

Members of staff

256,427

237,623

Board and committee members

81,717

62,342

Members of staff

98,899

76,835

Loan balances (including interest) -

Deposits (including interest) -

At 31 December 2020 all loans owing by directors, committee members and staff were being repaid in accordance with their loan agreements.

156

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

28.

RELATED PARTY TRANSACTIONS (CONT’D): (c)

Compensation of key management personnel The remuneration of key members of management during the year was as follows-

Salaries and other short-term benefits Post employment benefits

2020 $’000

2019 $’000

79,839 6,269

83,549 6,560

86,108

90,109

Their remuneration is determined by the Board of Directors, having regard to their performance and prevailing macro economic factors. The remuneration of key members of management is fixed for two (2) years.

Post employee benefits represent employee’s contribution to a money purchase pension scheme.

29.

COMPARISON OF LEDGER BALANCES: The detailed records of balances relating to loans to members, deposits and share capital deferred from their respective control accounts as follows: Loans to Members $’000

Saving Deposits $’000

Deferred Shares $’000

Voluntary Share $’000

Permanent Share $’000

Balance as per general ledger

7,708,965

4,551,977

26,725

4,034,758

255,483

Balance as per members’ Ledger

7,708,965

4,551,977

26,725

4,034,758

255,483.

-

-

-

-

-

Difference

157

.

.

EduCom CO-OPERATIVE CREDIT UNION LIMITED

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020

30.

IMPACT OF COVID-19: In March 2020, The World Health Organisation declared the novel coronavirus, Covid-19 outbreak, a global pandemic and the Government of Jamaica declared the island a disaster area on 13 March 2020. The rapid spread and consequent containment measures to control its impact such as closure of borders, physical distancing rules, mass quarantines, and stay at home orders for nonessential services have resulted in disruptions, which have negatively affected economic activities and business operations worldwide.

In response to the pandemic, as part of its Emergency Management & Recovery Plan, the Credit Union established a Crisis Management Committee with the primary focus of mitigating Occupational Health and Safety, Marketing, Monitoring and Communications risk as well as reducing the financial impact of the coronavirus on its operations. The Committee meets weekly to discuss and implement strategies and plans for managing the liquidity and capital needs of the Credit Union during the Pandemic. Of the initiative adopted, several of those measures are specifically formulated around financial risk management. These measures include: (i)

A Liquidity Recovery Plan which includes:     

Identifying and assessing the adequacy of financial resources and access to line of credit for contingent needs; Performing stress testing to determine the range of support needs; Assessing the daily inflow and outflow of funds (liquidity forecasting); Implementing measures geared at strengthening the Credit Union’s capital base; and, Defining benchmarks and decision-making procedures to ensure that the plan can be executed timely manner.

(ii)

Measures to assist customers during the crisis, such as payment moratoria on loans.

(iii)

On-going Monitoring of Capital which includes sensitivity analyses to determine:  

The impact of a downward adjustment on regulatory ratios and projected profitability; and The level of capital shortfall, if any, and how additional capital could be raised to address any projected shortfall.

As a further consequence of the Pandemic, the Credit Union is most significantly exposed to an elevated level of credit risk as it relates to:  

Increased provisioning through the Expected Credit Loss (ECL) and the correlation of defaults with loss given default (LGD); and Higher loan write-offs.

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EduCom CO-OPERATIVE CREDIT UNION LIMITED

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EduCom Co-Operative Credit Union Limited NOTES TO THE FINANCIAL NOTESSTATEMENTS TO THE FINANCIAL STATEMENTS 31 December 2020 31 DECEMBER 2020 30.

IMPACT OF COVID-19 (CONT’D): Credit risk Given the rapid pace of change in the economic environment, increased level of uncertainty and the availability of information, Management has exercised the use of significant judgement in determining the expected credit losses (ECLs) in relation to the Credit Union’s financial assets measured at amortised costs: loan receivables and financial investments.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year is discussed below.

Measurement of the expected credit loss allowance The impact of Covid-19 on the Credit Union’ ECLs has been determined by taking into consideration the effect of forward looking information, including revised macroeconomic estimates, the effect of a shift in the probability weightings of scenarios, and the impact on staging based on the quality of the credit pre Covid-19. The areas involving significant judgement are as follows:   

Determining criteria for a significant increase in credit risk (SICR) Determining estimates of macroeconomic variables Establishing the number and relative weightings of forward looking scenarios

Loans receivables is the most significantly impacted by the elevated credit risk. The Credit Union has recognised additional impairment provisions in relation to loans receivable of $39,698,000.

Going concern The Credit Union maintained its liquidity position during the period based on its plans.

However, its financial performance and position were negatively impacted when compared to budgeted. For the year ended, the Credit Union recognised net surplus of $66,850,000, a shortfall of $68,212,000 below budget of $135,062,000.00. The Credit Union’s total asset increased over the 2019 comparative. However, was below budgeted by $190,290,000. The Credit Union has total assets comprising cash and cash equivalents, other highly liquid assets and unused credit lines available at the date of authorisation of these financial statements.

Based on the above, Management continue to have a reasonable expectation that the Credit Union has adequate resources to continue in operation for at least the next 12 months and that the going concern basis of accounting remains appropriate.

The nature and extent of the impact on the Credit Union’s financial position, results and cash flows continues to evolve given the rapid pace of change and the elevated level of uncertainty.

The Credit Union continues to monitor and manage the identified risks through its Crisis Management Committee.

159

RESOLUTIONS FOR

RULE CHANGES WHEREAS Section 11 of The Co-operative Societies Act and Regulation 41 of The Co-operative Societies (Amendment) Regulations, 2021 provide for the amendment of Rules; WHEREAS Article XXIII, Rule 85 allows for amendments to the Rules of the EduCom Co-operative Limited; and WHEREAS Article XII, Rule 56 is being proposed for amendments in the Rules of the EduCom Co-operative Credit Union Limited; and WHEREAS it is being proposed that meetings of members may be conducted by attendance at a physical location, or by virtual-only or by hybrid-meeting; and WHEREAS electronic attendance shall be construed as if the members were present at the physical location where the meeting is being convened; and WHEREAS members attending meetings through electronic media shall constitute the quorum for a legally convened meeting of members of the Society; and WHEREAS The Co-operative Societies (Amendment) Regulations 2021 dealing with the holding of general meetings in co-operative societies were promulgated on the 15th of January 2021; WHEREAS EduCom Co-operative Credit Union has agreed to adopt and accept all the interpretations so ascribed under the said regulations: BE IT RESOLVED that Article XII, Rule 56 which now reads: (i) The supreme authority in the Credit Union is vested in the General Meeting of members at which every member has a right to attend and vote on all questions; and (ii) The first General Meeting of members after registration of the Credit Union shall be called the First Annual General Meeting, and shall have the same powers as are herein given to the Annual General Meeting

160

BE AMENDED TO READ by adding the following additional sentences after the current sentences: (iii) References to a “meeting” shall mean a meeting convened and held in a physical location only or via virtual-only and/or in a hybrid manner through a combination of both a physical and electronic communication system. Members shall be deemed to be present at that meeting for all purposes of the Rules, applicable laws, and the Co-operative Societies (Amendments) Regulations 2021 and said attendance shall be construed to allow the member present in any one of these fora to attend and fully participate in any such meetings. (iv) A member’s participation in the business of a general meeting shall include, without limitation, the right to communicate, to vote, and to have access in hard copy or electronic form all documents which are required to participate in the business of a general meeting; and participation in such a meeting shall constitute presence in person at such meeting and shall count towards the quorum and for all other voting processes. (v) References to “electronic communication system” shall include, without limitation, webcast, video, or any form of conference call systems (telephone, video, web or otherwise) and other communication of any sound, document, and or other data. (vi) If a separate meeting place is linked to the main place of a general meeting by an electronic communication system, such member present at the separate meeting place shall be taken to be present at the general meeting and entitled to exercise all rights as if the member was present at the main physical location. (vii) All general meetings (including a Special or Annual General Meeting, any adjourned meeting or postponed meeting) may be held as a physical, virtual-only or hybrid-meeting. (viii) A virtual-only or hybrid-meeting may be held in Jamaica and any part of the world and at one or more locations as may be determined by the Board of Directors in its absolute discretion; however, the principal place and time of such meeting shall be construed to be held in the jurisdiction of Jamaica. (ix) Votes (whether by a show of hands or ballot or by way of a poll) may be cast through or by electronic means or otherwise, in keeping with the Co-operative Societies (Amendment) Regulations 2021 (x) If voting is to take place at the meeting, there must be reasonable measures in place to verify that every person voting at the meeting by means of electronic communication system is sufficiently identified, and the Secretary shall keep a record of any vote or action taken. (xi) The provision of these Rules shall apply, with any necessary modification, to hybrid-meetings and virtual-only meetings.

161

BE IT RESOLVED THAT Article XII, Rule 61 which now reads: At least seven (7) days before the date of any Annual or Special General Meeting, the Secretary shall post a notice of the Meeting in a conspicuous place in the Head Office and at each branch of the Credit Union and shall cause written notice to be placed in the national print, electronic media, in person or mailed to each member at his address or e-mail address that appears in the records of the Credit Union.

BE AMENDED BY ADDING SUB-RULES (i) AND (ii) AT RULE 61 TO READ: (i) Where an Annual or Special General Meeting is either virtual-only or hybrid-meeting, the Secretary shall cause the notice of the meeting to provide instructions for attendance and participation, including voting by members electronically, and an electronic link for attendees. (ii) Where the meeting is held as a hybrid-meeting or virtual-only meeting and during the meeting a number of members participating, virtually, cease to be able to participate in the meeting, at any time and for any period during the meeting, in such numbers that the quorum requirement for that meeting is not met, all business transacted at that meeting, including matters put to the vote and any resolution passed, shall be void.

BE IT RESOLVED THAT ARTICLE XXIII, RULE 85 (AMENDMENTS TO THESE RULES) which now reads: These Rules may be amended by a resolution of the members at any Annual General Meeting or Special General Meeting called for the purpose by three fourths vote of those present and entitled to vote; provided a copy of the proposed amendment together with a written notice of the meeting shall have been sent to each member or handed to him in person at least seven (7) days before the said meeting. No amendment shall become operative until it has been approved by the Registrar in accordance with the Act. BE AMENDED TO READ: These Rules may be amended by a resolution of the members at the Annual General Meeting or Special General Meeting, called in accordance with Article XII, Rule 56 for the purpose, by at least three-fourth votes of those present either an in-person, Virtual-only or at a Hybrid-meeting and entitled to vote, provided a copy of the proposed amendments together with a written notice of the meeting shall have been sent to each member by electronic means and printed in one daily newspaper, at least seven (7) days before the said meeting. No amendment shall become operative until it has been approved by the Registrar in accordance with the Act. All amendments are to be operational immediately and are binding upon members, consequent upon approval at this general meeting of members and subject to certification by the Registrar of Co-operative Societies.

162

Moved by :

Seconded by :

Date :

(online) (online)

There were …….…. persons present at the time of voting Voted for

:

(In-person votes) _________ (Virtual votes) __________

Against

:

(In-person votes) _________ (Virtual votes) __________

Abstained

:

(In-person votes) _________ (Virtual votes) __________

Signed ............................................. .............................................

PRESIDENT SECRETARY

163

LIST OF DECEASED

MEMBERS Benbow Jeanniffith

Harvey Devon

Green Clinton

Chionesu Kamau A.

Nelson Sandria

Hamilton June

Dickenson Joy M.

Tyrill Patrick

Harrison John

Doaman Amniel

Sheriff Nadrea

Hutchinson Denroy

Forrest Michael A.

Hutchinson Theresa

Jackson Naphtali

Green Madget

Williams-White Gene

Manning Padan

Jones Ripton

Simms Georgeous

Palmer-Smith Iline

Manning Padan

Allen-Linton Sandra

Reid Samuel

Miller Ida May

Mclean Dahlia

Robinson Princess

Mcewan Clayton

Green Jeanette

Robinson Ricardo

Rose Rita

Blackellar Janet

Salmon-Grandison Hen

Rose Steven Giovann

Huie Vincent

Stewart Albertha Jos

Silbourne Ervin Ant

Hall Latoya

Taylor Iris

Silburn Ervin

Austin Juliet Viona

Thompson George.a.

Thompson Silburn

Banton Maxine

Thompson Hensley G

Chambers Rudolph

Battick Cecil

Thrue Stephanie

Kerr Marva

Benjamin Mahalia Lil

Williams Marva Lee

Brown Jasmine M

Brown Heather

Wright Simeon

Peynado Rose

Brown Hilreth

Barnes Agatha

Binns John A. E.

Brown Lebert

Green Ricardo E

Mccourtie Joseph

Cameron Norma

Nembhard-Bolton Herm

Dyer Arlington

Campbell Austin

Morrison Donald Burn

Mcintyre-Walker Col

Clarke-Williamson An

Davis Patricia Rose

Cameron Homer

Cunningham-Martin Jo

Green-Mowatt Gloria

Morgan-Green Susan

Douglas Landel

Gonzales Robert

Allison Claire

Douglas-Williams Ker

Walters Ronald

Samuels Carl

Edwards Eunice

Salmon Isaiah

Oritheneer Audrea

Facey Tatlin

Mckay Kevin

Williams Marsha M.

Finlayson Maxine

Dunbar Shekarah

Greaves Beauty

164

NOTES

165