First Heritage Co-operative Credit Union - Annual Report - 2018 by First Heritage Co-operative Credit Union

Page Vision, Mission Statements 2 Notice of Annual General Meeting and Agenda 3 Profile - First Heritage Co-operative Credit Union Limited

Products & Services

Minutes of the 6th Annual General Meeting

Profile of Board of Directors

Board of Directors’ Report

Management Report Treasurer’s Report

Financial Statements

Supervisory Committee Report

167

Credit Committee Report

171

Nominating Committee Report

174

Pictorial Highlights

183

Report of the Delegates on JCCUL’S AGM

187

Branch & Unit Managers

192

Parliamentary Rules

194

198

Prayer of St. Francis of Assisi

200

Notes

201

Notice is hereby given that the 7th Annual General Meeting of the First Heritage Co-operative Credit Union Limited will be held on Thursday, May 9, 2019, at the Jamaica Conference Centre, 14-20 Port Royal Street, Kingston, beginning at 2 p.m. Registration commences at 1 p.m. All members are invited. _______________________ Leodis Douglas Secretary, Board of Directors

Ascertainment of Quorum Call to Order and Prayer Chairman’s Opening Remarks and Tributes Reading and Confirmation of the Minutes of the 6th Annual General Meeting held on Thursday, May 10, 2018 REPORTS: Board of Directors Management Treasurer and Auditor Credit Committee Supervisory Committee ELECTIONS: Nominating Committee Report Elections to: • Board of Directors • Credit Committee • Supervisory Committee Any Other Business Vote of Thanks Termination

irst Heritage Co-operative Credit Union Limited (FHC) was formed on August 1,2012, from the merger of GSB Co-operative Credit Union Limited and Churches Co-operative Credit Union Limited. On March 1, 2015, the business and operations of St. Thomas Co-operative Credit Union Limited were transferred to FHC. FHCâ&#x20AC;&#x2122;s bond includes: a) All members of any religious bodies and affiliations in Jamaica and their families/relatives; b) All Public Sector Employees, past and present, regardless of their terms of tenure, employed to Ministries/Departments/Agencies/ Statutory Bodies/Public Corporations and their families/relatives; c) All Professionals, their families/relatives, their employees and their families/relatives; d) All members of Professional Associations affiliated to the Public Sector, their families/relatives and the employees of these Professional Associations and their families/relatives; e) All Public Sector Consultants and their families/relatives; f) All Public Sector Contractors and their families/ relatives; g) Employees, past and present, of the Credit Union and their families/relatives; h) All Registered Co-operative Societies and members of these Societies; i) All persons of good character of the age permitted by the Co-operative Societies Act; j) All members and persons eligible to be members of the Credit Union that have merged with this Credit Union, provided that any person is being admitted to membership has attained the age of eighteen (18) years. The Credit Union has a membership base of approximately 200,000 members across a network of eleven (11) branches strategically located across the island; offering a suite of forty-four (44) products and services. Our extensive array of products and services include a variety of loans, savings, term deposits for both personal and business purposes. In addition, we have investment and pension options from our subsidiary, FHC Investments Limited (FHCIL). Our products and services are specifically designed to meet the needs of members at every stage of their lives.

Micro and Small Business Financing The Micro and Small Business Loan business line reflects a renewed commitment on the part of the Credit Union to foster the growth of entrepreneurship in Jamaica as a major driver of the economy. It also reflects the decision of FHC to widen the scope of its services and diversify its product range in a structured and better controlled manner to provide more specific and targeted entrepreneurial opportunities. This will serve to increase employment, the standard of living of borrowing members and also contribute to the GDP of the country. The Micro and Small Business Unit was created in 2006. The Unit is a member of the Caribbean Micro Finance Alliance which acts as a catalyst for the development of micro finance in the Caribbean. The Unit was recognized worldwide as a finalist in the Caribbean Micro Finance Competition in 2012 for its impact in Jamaica. Currently, we have representatives located in Kingston, May Pen, Montego Bay, Mandeville, Spanish Town,Portmore and St. Thomas. Jamaicans have a rich entrepreneurial spirit and FHC is the home for financing these opportunities. FHC aims to be a one-stop financial institution with diversified products and services to meet the needs of valued members at every stage of life. The Credit Union’s commitment remains to generate continual benefits to our valued members and other stakeholders.

Subsidiary - FHC Investments Limited (FHCIL) FHC Investments Limited (FHCIL), is a limited liability company and a wholly owned subsidiary of FHC, established to provide investment opportunities for members and non-members of the Credit Union. It is located at 20 Dominica Drive, Kingston 5. The company’s products and services may also be accessed through representatives at several FHC branch locations. FHCIL offers competitive rates of return and portfolio management services to its clients by a team of industry experts with over 30 years of combined experience. FHCIL provides a suite of products and services to meet the needs of clients. These include:

Products & Services • Equities (local and foreign) • Bonds (local and foreign) • Managed Funds • Corporate Financing • Money Market Instruments

• Portfolio Management • Investment Advisory • Retirement Planning The Investment company has products and services for the conservative investors as well as those with a greater risk appetite, some of which are offered in both foreign and local currency. FHCIL is also the Investment Manager and Administrator of the Credit Union’s Retirement Scheme.

Retirement Scheme The Churches Co-operative Credit Union Retirement Scheme referred to as “the Scheme” was established by Churches Co-operative Credit Union Limited as a defined contribution plan with effect from June 1, 2004, by Trust Deed to provide pension benefits for members and their beneficiaries at retirement and ancillary benefits in the event of death or termination. The strategic objective of the Scheme is to ensure that more Jamaicans have a retirement plan to which they are consistently contributing, thus safeguarding their retirement.

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

MINUTES OF THE 6TH ANNUAL GENERAL MEETING OF FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED HELD ON THURSDAY, MAY 10, 2018, AT 3 P.M. AT THE JAMAICA CONFERENCE CENTRE 14 – 20 PORT ROYAL STREET, KINGSTON 1. ASCERTAINMENT OF QUORUM AND CALL TO ORDER Having ascertained that a quorum was present, constituting in excess of 290 registered members, the Chairman, Mr. Balvin Vanriel, called the meeting to order at 3 p.m. Board Secretary, Mrs. Leodis Douglas, convened the meeting with the reading of the Notice and then handed over to the Chairman. 2. PRAYER The Chairman then invited Chief Internal Auditor, Mrs. Dennise Edmond-Hastings, in the absence of Pastor Lorenzo King, to pray for the meeting’s proceedings. 3. WELCOME, OPENING REMARKS, APOLOGIES AND TRIBUTES The Chairman welcomed all members to the 6th Annual General Meeting of the First Heritage Co-operative Credit Union, formed on August 1, 2012, by the former GSB Co-operative Credit Union and Churches Co-operative Credit Union, and more recently, in March 2015, with the addition of the St. Thomas Co-operative Credit Union to the family. He then pointed members to the Parliamentary Rules laid out on pages 157 through to 159 in the Annual Report, to be used to guide the meeting’s proceedings. The Chairman then introduced, by name and position, all Board Members and Management present on the platform: Secretary, Mrs. Leodis Douglas; CEO, Ms. Roxann Linton; Asst. Treasurer, SSP Michael James (Ret’d); 2nd Vice Chairman, Mr. Edmund Jones and Director, Mr. Noel Francis.

He also introduced the other volunteers and members of the Management team in the room: Mrs. Camelle Ricketts-Moore, Chairperson, Supervisory Committee; Mr. Pete Nesbitt, Ms. Janyce Robinson, Mrs. Althea Daley and Mr. Stennett McLean from the Credit Committee; GM, Finance and Treasury, Mr. Emil Williams; AGM, Retail Sales and Service, Mrs. Saint Beverley Tomlinson; GM, Credit Administration and Loan Risk, Mr. Quilston Harrison; GM, Human Resource Development, Mrs. Jillian Gayle; Chief Internal Auditor, Mrs. Dennise Edmond-Hastings; AGM, Legal Affairs & Corporate Secretary, Ms. René Gayle; AGM, Marketing, Communications & Member Experience, Mrs. Juven Montague-Anderson; AGM, Operations and Shared Services, Mrs. Karlene Simpson, and Manager, IT & Special Projects, Mr. Delano Walters. He also made welcome all specially invited guests: Former President of Churches Co-operative Credit Union, Ms. Sonia McFarlane; CEO, Credit Union Fund Management Company, Mr. Adrian Thompson; Mr. Andre Gooden of COK Sodality Credit Union and KPMG Auditors, Ms. Cynthia Lawrence and Ms. Nadine Williams. He further apologized for GM, FHC Investments Limited, Mr. Patrick Burke; President of the League, Mr. Winston Fletcher who were absent; as well as those members and other invited guests who would be late or absent. The Chairman made mention of those of our members who passed on during this year and asked the meeting to turn to page 160 of the Report where the names of the persons who are not with us today are recorded. He invited all members to stand to observe a minute of silence for all those who transitioned since the last AGM. 4. READING & CORRECTION OF THE MINUTES OF THE 2017 AGM Minutes of the 2017 AGM, located on pages 11-26, having been circulated, were taken as read on a motion moved by Member, Senior Bishop Major Garnett Kildare, seconded by Member, Ms. Karen Mullings and carried. The Secretary, Mrs. Leodis Douglas, took the meeting through the corrections. Member, Senior Bishop Major Kildare noted that on page 13, since there were no corrections for the reconvened meeting, the Minutes were confirmed on a motion “moved” and not “raised” by Mr. Michael Edmondson.

Another member made a correction that the spelling of the name “Edmundson” should be with an ‘o’ and not a ‘u’. This was also corrected on page 23. One member also noted that on page 13 Mr. Nigel Chambers as recorded, was not in attendance at the AGM but rather Ms. Cynthia Lawrence. All corrections were duly noted for page 13. Member, Mrs. Althea Daley, noted that at the bottom of page 19, last line: A.N. Harris, Esq. instead of Mr. A. N. Harris Esq. This error was corrected also on pages 23 and 25. Member, Mrs. Camelle Ricketts-Moore noted on page 23, fourth paragraph, fourth line: should read: ‘Mrs. Camelle Ricketts-Moore, Secretary of the Committee’ instead of ‘a member of the Committee.’ There being no further corrections, the motion for the confirmation of the Minutes was moved by Member, Senior Bishop Major Garnett Kildare and seconded by Member, Mrs. Althea Daley. Secretary Douglas then handed over to the Chairman to address any matters arising from the Minutes. 5. MATTERS ARISING FROM THE MINUTES OF THE 2017 AGM The Chairman thanked the Secretary and asked if there were any matters arising from the Minutes for discussion or further questions from the floor. Member, Senior Bishop Major Garnett Kildare, asked for clarifications on the slogan, “Come Back Home”. The Chairman responded that this slogan came about at a point where the Credit Union had a number of members, particularly from the Public Sector, who were dissatisfied and were taking their businesses elsewhere. So, strategically this slogan was designed to get our members to ‘Come Back Home.’ He added that further in the Board of Directors’ Report he would speak on how successful this campaign was. Member, Mr. Michael Burke, asked if there were any Town Hall Meetings held in the last year as he had not received any notifications despite raising this as a concern last year. The Chairman assured him that there were no meetings since the last AGM.

Member, Ms. Robinson queried the inclusion of the responsibilities of each Director in the Annual Report. The Chairman noted that it is presently a part of our governance charter review and so going forward, the profile of each Director will be included in the Annual Report. There being no further matters arising from the minutes of the AGM, the Chairman then presented a summary of the Board of Directors’ Report presented on pages 29–32 of the Annual Report. The Report, having been circulated was taken as read on a motion moved by Member, Senior Bishop Major Garnett Kildare and seconded by Member, Ms. Paulette McLean and carried. 6. BOARD OF DIRECTORS’ REPORT The Chairman highlighted that the Credit Union’s performance over the financial year ending December 31, 2017, was considered remarkable in spite of some challenges experienced in 2016, where we posted a deficit of $58 million. He further noted that he was very happy to report to the membership a net surplus for the 2017 period of over $100 million. The members applauded at the aforementioned. He, however, added that there is still more work to be done because at the end of 2016 the Credit Union had an accumulated deficit of approximately $275 million, which has since moved down to about $175 million. He assured the membership that the Credit Union is heading in the right direction; the members are coming back home; and every effort is being made to satisfy the needs of all the members as best as possible. He encouraged all members with loans in default to come in and talk with any management personnel to get the help to sort out these loans. The Chairman reported that from the government viewpoint, the outlook has been positive with an increase in the income tax threshold to $1.5 million; and a reduction in the unemployment rate by 1.5% based on the STATIN report. He commended the CEO, Ms. Roxann Linton, on the great efforts made by the team in the implementation of several growth strategies to derive such a turnaround of the Credit Union and the surplus for the year. He announced to the membership that the Credit Union’s Asset Base is currently at $10.96 billion and the Liquidity Reserve requirement above standard at 13.81% compared to our benchmark of 10%. He noted that the Credit Union had recorded its highest level of loan disbursements in

recent years, during the first half of 2017. The members applauded at the aforementioned. Chairman Vanriel reported that the Credit Union is now more focused on its core business and has employed a number of cost-cutting measures to ensure that the net surplus is improved. He spoke on the member engagement strategies that were implemented with the aim to reach out to members with a view to satisfy their needs. He informed the membership of the Strategic Planning Retreat at which a 20-year vision was crafted for the Credit Union, including a trajectory of maximizing our returns to our members, growing our loans and deposits and having a motivated and engaged team. Chairman Vanriel spoke on the investment arm and the Retirement Scheme of the Credit Unionâ&#x20AC;&#x2122;s subsidiary, FHC Investments Ltd. He noted Net Assets totaled $970.7 million, a growth of 25.7% or $198.7 million; the total membership of the Retirement Scheme was 4,465 including 229 new members. Total contribution from the membership stood at $96.7 million and interest and other income earned was $163 million representing 134% increase. Our net yield of 7 - 8.2% outperformed the inflation rate for 2017 which was 5.3%. This report gained the applause of the membership. For the FHC Foundation, Chairman Vanriel stated that we remain focused on youth development and education, making mention of our donations toward the GSAT Scholarships, Tertiary Scholarships and Entrepreneurial Awards programmes. He informed the membership of the fund-raising activities by the Foundation and spoke on the first one last year with the University Singers in Concert, at the Philip Sherlock Centre for the Creative Arts. He made note that the next concert is set for June 2, at 6 p.m. at the same venue, and anyone who needs tickets should contact Vice Chairperson of the Foundation, Mrs. Leodis Douglas, or any member of the Management team. In closing, the Chairman expressed gratitude to all members, the team members, the management team, the many stakeholders, such as JCCUL and our Auditors KPMG, for all the effort and the service given throughout the year. He thanked the membership for their commitment and their belief in the Credit Union throughout the challenges faced, and assured them that with the improvement in performance seen in 2017, this trend will continue in 2018.

He then invited questions or comments on the Board of Directors’ Report. Member, Senior Bishop Major Garnett Kildare, congratulated the Management team on the splendid job they are doing and asked the meeting to give the team a round of applause for the great work done. Member, Mr. Michael Burke, commented on an impressive report but requested that, as part of the 20-year vision mentioned, the building of a service or producers’ co-operative be included in the vision. Member, Mr. Karl Watts, suggested that the Credit Union’s history from its inception in the 1940’s be researched and documented in an economical way (e-book) so that every member can have access to it. He indicated his willingness to be a part of the team. The Chairman informed him that, through the League, a book entitled, ‘Founders and Keepers’, was produced on the history of the movement and is now available. Member, Mr. Karl Watts, however interjected, that instead of a book that many may not be interested in reading, the information could be placed in a pamphlet for easier read. The Chairman then stated that the suggestion was duly noted. Member, Mr. Michael Burke, on the same matter, indicated that years ago he was invited by both the former Churches Co-operative Credit Union and the League to document the history of the movement. He indicated however, that to date, nothing happened. He then stated that with the joining of the former Churches and GSB, along with St. Thomas Co-operative Credit Unions, that hopefully, there may be a better response. There being no further questions or comments, the Chairman thanked all for their participation and asked for a motion to accept the Board of Directors’ Report. This was moved by Member, Senior Bishop Major Garnett Kildare and seconded by Member, Mr. Edwin Jackson; one abstention – Member, A.N. Harris, Esq. and the motion carried. The Chairman then invited the CEO, Ms. Roxann Linton, to present the Management Report.

7. MANAGEMENT REPORT The CEO, Ms. Roxann Linton, on behalf of Management, specially acknowledged the Board Chairman and all other members of the FHC Board; the Volunteers; specially invited guests such as the League, the Department of Co-operatives and Friendly Societies; CUNA Caribbean; other Credit Unions; and our Auditors KPMG. She expressed her appreciation to the members present to share in the occasion as we continue to inform, engage and connect with the membership. She then asked for a motion that the Management Report which has been circulated be taken as read. This was moved by Member, Ms. Janyce Robinson and seconded by Member, Mrs. Althea Daley. The CEO then presented the highlights of the Management Report. She commenced stating that 2017 was a pivotal year; a year of reflection where it was recognized that change was both needed and inevitable for the Credit Union. A change plan was then formulated focusing on increased member and team engagement; the rebuilding of trust and confidence; and the delivery of improved products and processes to better serve all members. With a committed team, consciously working over the year with fervor and a can-do spirit, 2017 resulted in success for the Credit Union. At this point, she invited the entire winning FHC team to stand from the executives, branch managers, other managers to all team members, presenting them to the membership as the team responsible for executing on the various strategies with focus and tenacity and for delivering the accomplishments in 2017. At this juncture, the entire AGM attendees applauded the FHC team. The CEO, then continued that the financial performance for the Credit Union improved significantly, registering a surplus of over $100 million, coming from a deficit position for the prior year. She indicated the notable reduction in the accumulated deficit by $85.3 million. This performance, she mentioned, was driven by the commendable execution of certain key strategies:

(1) Member Engagement â&#x20AC;&#x201C; this saw us focusing on the Members at the Centre to strengthen the FHC family; and to foster improved communication and to deepen the connection to the Credit Union. A series of Town Hall Meetings were held in the first half of the year followed by various events in the latter half to celebrate our 5th Anniversary. Events such as six church services across the island; and a courtesy call on the former Finance Minister, the Hon. Audley Shaw, CD, MP, which provided us with the opportunity to re-presence First Heritage as the Credit Union of choice for the Public Sector and to discuss ways for greater access to affordable and flexible financing for Jamaicaâ&#x20AC;&#x2122;s productive sectors. She noted that the FHC Newsletter was also reinstated and members appreciated receiving the quarterly publication to be kept abreast of the Credit Union happenings. (2) Team Member Engagement was also another strategy of focus. Ms. Linton highlighted the significance of strengthening among the team members the belief in self and the belief in the power of the team. This focus resulted in greater buy-in and commitment to the change efforts during the year. Additionally, team member welfare was also an area of focus with improvements in compensation and benefits undertaken to improve our competitiveness in the marketplace. (3) Training and Development of the team members was also prominent, resulting in improved sales and service delivery. The implementation of the Sales and Service Improvement Initiative, coupled with increased and creative promotion of enhanced and existing offerings, fueled the consistent generation of loan disbursements and growth in deposits. This resulted in record performance in loan disbursements and the overall financial performance of the Credit Union. Ms. Linton apprised the meeting that during the year, efforts were made in improving the quality of the loan portfolio with the past due ratio moving from 14.98% at the beginning of the year and ending at 10.63%. Credit underwriting processes were enhanced with greater flexibility in structuring loans to meet membersâ&#x20AC;&#x2122; affordability. Collection processes were also streamlined to ensure more consistent activities and greater performance management. Members were also encouraged to come in early in the process if there were any signs of distress in servicing their loans. She noted that the support functions in the Operations and Shared Services Unit were also restructured to better serve the branches and by extension all members. Changes were also made in the loan disbursement team to ensure

smooth disbursements of loans within a reasonable turn-around time. Risk Management and Compliance continued to receive focus as the risk management frameworks were bolstered to better manage the risks facing the organization. Ms. Linton assured the membership that the Credit Union continues to leverage its strength as a good corporate citizen, with relationships being deepened as the Credit Union stays connected with its communities. She informed all that the Credit Union continues to be the lead sponsor of the Rebirth Initiative which is focused on improving the lives of youths at risk; as also the inaugural Tree Planting Initiative that was conducted through the Foundation in primary and high schools to support the enhancement of the green spaces and the overall preservation of the environment. Ms. Linton informed the meeting that whilst the journey to improved performance has commenced and the results for 2017 are commendable, the journey continues and the team is even more committed in 2018, charged to: • • • • •

further strengthen the financial health of the Credit Union with a view to being able to provide financial returns to all members significantly reduce the accumulated deficit position improve the past due ratio reduce the cost structure and prepare for our Bank of Jamaica (BOJ) oversight

The CEO, finally brought to the fore two key points: Firstly, the cost reduction initiative and two, the pending BOJ regulations. On the point of the cost reduction, the CEO made the suggestion on reducing cost of the AGM significantly by eliminating the production of the hard copies of the Annual Report to be replaced with electronic options. She indicated that accommodation would be made in branches for members to review the Annual Report online. She also suggested that for those who require a hard copy, then the Credit Union could do a smaller book. She added that the AGM venue has WiFi service so members could bring their laptops and tablets or other devices to log on and review the report electronically.

Secondly, on the matter of the impending BOJ oversight, the CEO updated the membership that much work has been done so far. Plans are now underway to finalize the legislation which will allow for full communication and education around what that change will mean. She noted that the League is fully engaged in ensuring that there will be a communication and education campaign to update members on the impact of this legislation. Ms. Linton thanked all for the support and feedback given over the year 2017. She thanked the members for listening and opened the floor for questions or comments. Member, Mr. Michael Burke, expressed his concern of the impending BOJ regulations. He made mention to the meeting that representations of the Credit Unions and the League at these decision-making platforms must be resilient and vigilant to ensure that the co-operative spirit continues. Member, Mr. Simon Green, expressed concurrence with the suggestion of having soft copies of the Annual Report. He continued that it would save the Credit Union a lot using the soft copy instead of the actual hard copy. The Membership applauded this concurrence. He went further to put on record his concern of his Family Indemnity Plan plan being in the past due status even though monthly deductions are made from his salary. The CEO apologized for his experience and asked that he come in office to discuss and clear up the matter to which he responded that the matter was already cleared. He noted, however, the fact that it may happen again. Ms. Linton reiterated her apologies and promised to speak with him after the meeting to do further probing. Member, Ms. Janet Harrison, expressed her delight that the deficit is no more, as also her support for the electronic presentation of the Report rather than the costly way it is presently being done. Member, Ms. Hannah Dixon, informed the meeting amidst applause, of her 36th year this November being with the Credit Union. She however expressed her concern that she does not feel the same way as before about the Credit Union, as recently she was called about her account being in arrears; something that has never happened before. Additionally, she complained about the high interest

rate that is required to be paid on a cash secured loan. She therefore implored the CEO to change the face of the Credit Union that she now sees to one that members will be happy to go to and also to appropriately adjust the interest rates on loans in relation to the risks they carry. Ms. Linton thanked her for the concerns raised and apologized for the poor experience she had, indicating that it would be investigated and dealt with. She also informed her of the move made by the Credit Union to gradually adjust its rates without endangering the performance of the Credit Union, so much so that a change was made last month where the interest rate was lowered by 3 percentage points to 13%. Member, Mr. Robertson, gave his support also to the Report being presented electronically. He also asked if a CD will be given instead of the book. The CEO responded that that was also an option. Member, Ms. Karen Mullings, registered her pleasure of being a beneficiary of the change efforts that the Credit Union has undertaken. She made special mention of the assistance she was given by team member Miss Shereka Anderson, and of her insistence in assisting her until a solution was found for her problem. To this the membership gave a round of applause. Member, Mrs. Carlene Brown-Anderson, registered her complaint that she was informed by the Credit Union that her Family Indemnity Plan (FIP) was cancelled. This she admitted to as she had fallen back on her payments due to other serious family matters. She now pleads to the Credit Union for assistance in rectifying this problem. The CEO empathized with the member and pointed out that the FIP is owned by CUNA and First Heritage is just a distributor of the product. She asked however that she comes into office for them to see how best they can help her sort out the issues. Member, Mr. Michael Burke, broached the subject of the Credit Union assisting with the training of members for their advancement as well as lobbying with the Insurance Company on some expectations of the members. Member, Ms. Edith Stewart, expressed concerns about the level of communication and customer service at the Credit Union. She spoke on a matter regarding her mortgage since 2016 and indicated that to date the matter is still not settled. The

Chairman intervened and requested Branch Manager, Mr. Rayon Wright to meet with Member, Ms. Stewart to deal with the outstanding issue. Member, Ms. Hannah Dixon, again voiced her concern that with credit bureaus now active in Jamaica, she would not want her credit rating to be jeopardized with false information regarding her account. The CEO assured her with the matter settled, her credit report would not be sullied as the correct information is what gets transmitted to the Bureau. Member, Mr. Kirk Sterling, noted that some of the problems being aired at this meeting were on the table last AGM. He asked the CEO to put a team together to address the customer service issues. CEO Linton thanked him for the feedback and assured him that improving our customer service delivery is part of our strategic initiative and the team will continue to make progress on that front. Member, A.N. Harris, Esq. noted that despite the negatives, he wants to commend the team on the font of the AGM Report, which he can now read without the aid of glasses. He also noted another positive; that of his receiving a text message on his birthday from FHC. He therefore congratulated the team. New Member, Mr. Mark Robertson, also made note of the text message of birthday wishes from FHC and indicated he was encouraged by this gesture. He then questioned if both he and his brother included their mother on their FIPs, if in the case of death, they could both make claims. The CEO responded that only one policy would be established, and CUNA would do the required checks. There being no other questions or comments, the CEO asked for a motion for the adoption of the Management Report. The motion was moved by Member, Ms. Karen Mullings and seconded by Member, Ms. Beverly Woodstock. The Chairman thanked Ms. Linton and the members. He stated that he noted the comments put forward and assured them that they will be looked into. He then invited Ms. Nadine Williams from KPMG to take the membership through the Auditorsâ&#x20AC;&#x2122; Report followed by Mr. Kevin Forbes, Treasurer, who will give further highlights of the financial results.

8. AUDITORS’ REPORT Ms. Williams guided the members to pages 53 and 54 for the Auditors’ Report. She stated that the audit was conducted on the financial statements of First Heritage Co-operative Credit Union Limited comprising the separate financial statements of the Credit Union and the consolidated financial statements of the Credit Union and its subsidiary as at December 31, 2017, set out on pages 58-133. She outlined the management’s responsibility being that of preparing financial statements that give true and fair view in accordance with International Financial Reporting Standards (IFRS) and the Co-operative Societies Act. She further outlined the Auditors’ responsibility which is to express an opinion on the financial statements based on their audits noting that the audit was conducted in accordance with the International Standards on Auditing. She noted that those standards required that they comply with ethical requirements in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA). Ms. Williams outlined the auditing process and noted that the audit evidence obtained was sufficient and appropriate to provide a basis for their opinion. Additionally, she indicated that the financial statements gave a true and fair view of the financial position of the Group and the Credit Union as at December 31, 2017, and noted that, in their opinion, proper accounting records were maintained and the financial statements were correct, duly vouched and in accordance with the provisions of the Co-operative Societies Act. 9. TREASURER’S REPORT Treasurer, Mr. Kevin Forbes, thanked Ms. Williams, greeted the members and proceeded with the move for a motion that the Treasurer’s Report which was presented in the report at pages 44-50 has been circulated and read. This motion was moved by Member, Mrs. Althea Daley and seconded by Member, Mr. Mark Sterling, with one abstention and the motion carried. He informed the meeting that he was pleased this year to report good results based on last year’s promise to the membership.He noted for the year 2017, the Credit Union made a Net Surplus of $100 million and commended the Sales and Marketing team, as well as the members who believe in and continue to put their funds with the Credit Union.

Treasurer Forbes noted the major contributing factor to the improved surplus for the year â&#x20AC;&#x201C; that of increased loan disbursements. He informed the membership that the Credit Union increased its net income on loan disbursements by as much as $928 million which he noted was very significant given the climate and circumstances within which we operate. Of note also, is the improvement in the quality of the loans resulting in the reduction of our loan provision as well as a downward movement in the delinquency rate moving from 14.98% to 10.63%. He assured the meeting of the continuous focus on the maintenance of low or no fees and pointed to the discontinued dormant fees. He stated that the Credit Union is in a good place as we prepare for the impending BOJ regulations. Treasurer Forbes highlighted that a look at the Balance Sheet showed Liquid Assets and Short-term investments reduced by approximately 6 Â˝%, but noted that this was due to the increase in the loan volume and activities that are being pursued; that Loan increased by 12.4%, moving from $6 billion to $7 billion; that Total Assets increased by $810 million, and currently stands at $10.96 billion; and Total Deposits moved by 8.2% from $7.8 billion to $8.4 billion. All these he considered significant improvements. He noted that all the ratios and the performance indicators have been met or exceeded. As it pertained to the accumulated deficit, the Treasurer noted that the Credit Union ended 2016 with a deficit of $275 million and recorded a surplus of $100 million in 2017. He added that there is a mandatory Statutory Reserve of $20 million and there are PEARLS and IFRS adjustments as it relates to our pension plans that must be put through. Based on these items that have impacted our position and the fact that we are still in a deficit of $189 million, the Treasurer outlined that although the Credit Union would want to make a distribution in light of the surplus, we cannot at this time due to this uncleared accumulated deficit. He assured the meeting, however, that the committed Management team and the Board of Directors will ensure that this deficit is liquidated in the shortest possible time to guarantee a Credit Union that will last for a very long time. The Treasurer highlighted the Income and Expenditure Statement which revealed that interest income on loans had increased and interest expense

on deposits reduced marginally due to adjustments in the economy where rates have been trending down, resulting in adjustments in our deposit rates which were still very competitive. The Treasurer spoke to concerns raised about better rates on loans and indicated that as the Credit Union becomes more efficient, based on various initiatives being pursued more positive results should be forthcoming over the next 12-18 months. In his review of the ratios, Treasurer Forbes revealed that for net loans to Total Assets, we are now at 66%, a significant improvement from 61.2% in 2016; Institutional Capital to Total Asset showed movement from 11.71% 11.9%. He noted that Operational Expense to Average Assets needs to get down to around 8% but is heading in the right direction. He reiterated that the liquidity ratios would have declined slightly, but this was due to the ramped up loan activities and the success of the new products that were launched. In summary, the Treasurer highlighted that for the 2017 reporting period the members owned $8.6 billion, up from $7.9 billion in 2016; surplus and reserves of approximately $2.18 billion, totaling $10.79 billion which was utilized for loans amounting to $7 billion; and investments of $2.79 billion which left us at the end of the year with $1 billion in other assets. The Treasurer thanked everyone for listening and thanked the members for their continued belief in the Credit Union. He reassured them that the team will continue to focus on increasing loan disbursements; growing the loan portfolio and improving its quality to get the past due ratio below 10%, improving our collection strategy; and finally, but most importantly, to continue to keep our members at the centre. He then opened the floor for questions or comments. Member, Mr. Michael Burke, reiterated his suggestion for the formation of a co-operative in the tourism industry to empower members to earn, put in money to pay their loans, and be entrepreneurs. Member, Ms. Hannah Dixon, made mention of the provisioning for loan losses that was reported on and enquired about what strategies have been employed to deal with members who are delinquent.

The Treasurer spoke to the strategies of writing good quality loans; the careful screening of potential borrowers to ensure proper risk assessment; and the determination of the worthiness of borrowers to meet their financial commitments. Additionally, Treasurer Forbes spoke to the strategy of calling and reminding members of missed payments and encouraging some to come in and have a conversation as to how they can be helped to fix the various situations. Member, Mr. Harry Grant, voiced his concern about the inordinate amount of time members have to wait before they can get their loans. He noted this was not usually the modus operandi of a Credit Union which leads to frustration on the membersâ&#x20AC;&#x2122; part. Treasurer Forbes assured him that the Credit Union operates under the principle of the members being at the centre of everything we do. He noted, however, that the feedback is very good to help us to ensure that we fix the areas or issues that are highlighted. Mrs. Althea Daley commented that based on the suggestion raised by Member, Mr. Michael Burke she would like to add another perspective: unlike the perfect world where people do what is right by paying their loans over the counter without having to do deductions, people do not honour their obligations voluntarily, so there becomes the need to put policies in place to seek deductions from salaries. Member, Mr. Michael Burke, responded by expressing his agreement for the need for salary deduction but added that if the co-operative is formed, deductions would be taken from the co-operative and not from the employer; that the money from your job would be used to deal with the co-operative in servicing the loan resulting in a win-win for both co-operative and credit union. There being no further questions or comments, the motion to adopt the Treasurerâ&#x20AC;&#x2122;s Report was moved by Ms. Janyce Robinson and seconded by Mr. Emil Williams and was carried. 10. MAXIMUM LIABILITY ALLOWANCE The Treasurer then brought the membersâ&#x20AC;&#x2122; attention to the proposal to move the Resolution that the Maximum Liability remain at 20 times the Capital of the Credit Union. This resolution was moved by Member, Senior Bishop Major Garnett Kildare and seconded Member, Mr. Michael Edmondson, and was carried.

The Chairman thanked the Treasurer for the fulsome presentation and moved immediately to invite Mr. Pete Nesbitt, deputizing for the Chairman of the Credit Committee to present the Committeeâ&#x20AC;&#x2122;s Report. 11. CREDIT COMMITTEEâ&#x20AC;&#x2122;S REPORT On behalf of the Credit Committee, Mr. Pete Nesbitt welcomed all. He then asked for someone to move a motion that the Credit Committeeâ&#x20AC;&#x2122;s Report having been previously circulated be taken as read. This was moved by Member, Ms. Janet Richards and seconded by Member, Mrs. Carlene Brown-Anderson and carried. He commenced by noting that, like most financial institutions, the Credit Union has really seen its fair share of challenges, given the harsh economic climate coupled with fierce competition from other financial institutions. He added that these challenges have spilled over to the members specifically as it relates to job losses which have negatively impacted their ability to repay their loans in a timely manner. He noted another contributing factor also resides with unfavourable reports from the Credit Bureau. Mr. Nesbitt presented some highlights from 2017 which included improvement in the economic climate which saw the indicators trending in the right direction; improvement in the business sector and consumer confidence as reported by STATIN and various surveys commissioned by the GOJ; improvements in the loan demands as is evidenced by the growth in the loan portfolio and improvement in our past due rates. He informed the meeting that the loan portfolio grew by 13.8% or $800 million, moving from $6.2 billion in 2016 to $7 billion in 2017. This movement, he claimed, positively impacted the past due ratio. The Micro Loans represented a favourable outcome as the Unit disbursed $185.3 million for 2017 when compared to $69.75 million for 2016, reflecting an increase of 165%. With regard to the past due portfolio, Mr. Nesbitt was happy to report a fall from 14.98% in 2016 to 10.63% in December 2017. He attributed this significant improvement to the innovative strategies that were introduced by the Credit Union.

Mr. Nesbitt acknowledged the membership and reminded them that all these noteworthy results would not have been possible without them and encouraged them to continue to communicate with the Credit Union as soon as they face any difficulty in honouring their obligations. He then thanked the team members of the Credit Administration and Loan Risk Department as well as the Micro & Small Business Loans Unit on the hard work put in to reduce the past due portfolio through improved collections and disposal strategies as well as increased and improved loan risk assessment; and increased loan disbursements by developing innovative loan products such as the extremely popular Cash In A Flash. He thanked the other FHC team members, Board of Directors, the Supervisory Committee and the valuable members for their assistance and support. He then opened the floor for questions or comments that members may have. Member, Mr. Anthony Simms, asked about the mobile loan that was to be taken into consideration for the year. The Chairman responded that aspects of it is already being practiced particularly in the Micro and Small Business Loans Unit where the representatives actually go to the members, write the loans and do the collections of payment also. He added that the Credit Union will continue to look to build on it. Member, Ms. Lola Wallace, retiree, commented that she travelled by two buses and on reaching the Credit Union a few minutes after closing time, she was not allowed to enter but had to return the next day. The Chairman responded that based on the nature of the business, there is a security concern and so one must be very careful. He, however, asked that she could probably ask for a Branch Manager or Supervisor based on her particular case, but members must bear in mind the opening and closing hours. There being no further comments or questions, the motion for the adoption of the Credit Committee Report was moved by Member, Ms. Norma Bernard and seconded by Member, Mr. Tejani Fearon and carried.

12. SUPERVISORY COMMITTEEâ&#x20AC;&#x2122;S REPORT Supervisory Committee Chairperson Mrs. Camelle Ricketts-Moore directed the members to the Report located on pages 135-137 of the Annual Report and asked for a motion to be taken that the report has been circulated and read. This was moved by Mrs. Althea Daley and seconded by Member, Ms. Veniece Diaz and carried. Mrs. Ricketts-Moore commenced by expressing her appreciation on behalf of the Committee to the membership for the opportunity given to serve the Credit Union in this capacity. She noted that the Committee assists the Board of Directors in the discharge of their responsibilities by providing oversight on areas of internal control system through the Internal Audit function. She continued that a major part of this oversight is the management of the Audit Plan in 2017 as detailed in the Annual Report; 10 areas were identified for review and as at December 31, 2017, three audits were fully completed and reported to the Board; two were in draft stage and in report stage; one in planning stage; and four others were carried forward to the 2018 Audit Plan. Therefore, only a 30% completion rate was achieved, and the reason has been indicated in the report. She noted that the audits completed indicated the need for improvement in enhancing prevention and detective controls to mitigate possible money laundering exposures; and to update the business continuity planning documents to reflect current business processes. She added that Management has been assiduously working to clear outstanding recommendations and the Internal Audit Department continues to monitor this area through ongoing follow-up activities. In closing, she thanked the management team, team members and the Board of Directors for facilitating and supporting the work of the Supervisory Committee. She then asked for comments or questions on the Report. Member, Mr. Michael Burke, commented that the Supervisory Committee is the â&#x20AC;&#x2DC;watch dogâ&#x20AC;&#x2122; for the Credit Union and not just for the Audit. He noted that all complaints are to go to that Committee and asked that the members be made aware when meetings are to be held for them to come in and make their complaints.

The Chairperson however, indicated that protocols must be observed regarding the communication but noted that the Committee does deal with complaints and indicated that one is mentioned in the report. Member, Mr. Michael Burke again pressed for the occasions when the Committee meets so that members can come in to meet with them for face-to-face discussions. In response to Mr. Michael Burke, Chairman Balvin Vanriel interjected that while membersâ&#x20AC;&#x2122; complaints go to management, they also have the right to write to the Supervisory Committee or even the Board of Directors. If the matter is not resolved based on the response, then the members have the right to ask for a meeting with the Supervisory Committee or the Board of Directors. Mrs. Althea Daley noted that there is a suggestion box for persons to drop their complaints which would go to the Supervisory Committee. She noted that one was received last year. She also suggested to the CEO that, to improve awareness, to inform the membership of this avenue for complaints through the newsletter. Member, A.N. Harris, Esq. expressed the view that contrary to the suggestion to have members attend and complain at the Supervisory Committee meetings, he recommended a complaint box be instituted rather than the suggestion box, so he asked that this box be renamed. Member, Mr. Keith Brown, queried how he could get the rules and policies of the Credit Union in order to know more about it. The Committee Chairman advised him to visit any of the branches to get a copy of the Rule Book. Member, Senior Bishop Major Garnett Kildare asked about the frequency of the regular membersâ&#x20AC;&#x2122; meeting. Chairman Vanriel responded that these meetings are held quarterly on a Thursday commencing at 5 p.m. at all the branches. He added that with a history of low attendance, the suggestion of communicating reminders through the newsletter as well as members encouraging other members to attend will be pursued. There being no further questions or comments, the motion for the adoption of the Supervisory Committeeâ&#x20AC;&#x2122;s Report was moved by Member, A.N. Harris, Esq. and seconded by Member, Ms. Beverly Wallace.

The Chairman thanked Mrs. Ricketts-Moore for her presentation. He brought members’ attention to the Agenda which contained an item of Resolution for Rule Amendment and asked for a motion to amend the agenda by deleting the Resolution for the Rule Amendment as it will no longer be taken. The motion for the amendment of the Agenda to remove the Resolution for the Rule Amendment was moved by Member, Ms. Sonia McFarlane and seconded by Member, Ms. Jacqueline Roberts and carried. He then invited the Chairman of the Nominating Committee, Mrs. Tamara Francis Riley-Dunn to present the Committee’s Report. 13. NOMINATING COMMITTEE’S REPORT The Chairperson of the Nominating Committee, Mrs. Tamara Francis Riley-Dunn informed the meeting that the committee’s report can be found on pages 140 -145 of the Annual Report. She then asked for a motion that the report which was circulated be taken as read. This was moved by Ms. Janet Richards and seconded by Mr. Stennett McLean. Mrs. Francis Riley-Dunn noted that on behalf of the Committee, they were honoured to serve the Credit Union in this manner. She noted that the Committee met to consider all retiring volunteers from the Board of Directors, Supervisory and Credit Committees. She noted that the positions were advertised for volunteers to fill the vacancies. She explained that the term for Board Members: Mr. Balvin Vanriel, Mrs. Leodis Douglas and Mr. Noel Francis had come to an end but that all members have expressed their willingness in writing to continue to serve the Credit Union. She advised that a further vacancy exists on the Board in relation to Mr. Robin Levy who vacated office in November of last year to assume the role of Group CEO of the League. She thanked Mr. Levy for his service and wished him the best in this new role. She brought members’ attention to some errors in the Nominating Committee’s Report as they appear in the Annual Report and asked that they view the Errata Sheet for the corrections.

The following persons were nominated to be elected to the Board of Directors. BOARD MEMBERS TENURE (YEARS) MR. BALVIN VANRIEL TWO MRS. LEODIS DOUGLAS TWO MR. NOEL FRANCIS TWO MR. CRANSTON EWAN TWO Mrs. Francis Riley-Dunn noted that in relation to the members of the Supervisory Committee, retiring at this AGM are all sitting members: Mrs. Camelle Ricketts-Moore, Mr. Luke McIntosh, Mrs. Karla Stephens-Hall, Mrs. Beverly Williamson and Mr. Lascelles Ellis. She added that of all the persons named, Mr. Ellis indicated his inability to serve, having resigned from the committee in August of last year due to illness. She thanked him wholeheartedly for the term that he had served and wished for him all the best. Mrs. Beverly Williamson, having served the maximum term of five consecutive years, is no longer eligible for re-election. She was also thanked wholeheartedly for her invaluable contributions to the Credit Union. The Committee nominated the following persons to be appointed to the Supervisory Committee: SUPERVISORY COMMITTEE MEMBERS TENURE (YEARS) MRS. CAMELLE RICKETTS-MOORE ONE MR. LUKE MCINTOSH ONE MRS. KARLA STEPHENS-HALL ONE MS. GERALDINE WRIGHT ONE MS. JACQUELINE ROBERTS ONE Regarding the members of the Credit Committee, Mrs. Francis Riley-Dunn noted to the meeting that there are three members up for retirement. They are: Mrs. Althea Daley, Mr. Pete Nesbitt and Mr. Stennett McLean. All three individuals have indicated their willingness to continue to serve on that committee for another term. The nominated members for the Credit Committee are as follows: CREDIT COMMITTEE MEMBERS TENURE (YEARS) MRS. ALTHEA DALEY TWO MR. PETE NESBITT TWO MR. STENNETT McLEAN TWO

She informed the meeting that profiles of all persons recommended by the Nominating Committee can be found on pages 141-144. Mrs. Althea Daley pointed out an error in her profile stating that she no longer serves at Petroleum Industry but is now at the Jamaica Central Securities Depository Ltd. In addition, she asked Mrs. Francis Riley-Dunn, based on comments from the floor, that she introduces the volunteers for the membership to see them. Mrs. Francis Riley-Dunn then thanked the volunteers for their expression of willingness to serve and invited the representative of the Department of Co-operatives and Friendly Societies, Mrs. Sheryl Brown, to conduct the elections. 14. ELECTION OF OFFICERS Mrs. Brown, on behalf of the Department of Co-operatives and Friendly Societies, and the Registrar Mr. Errol Gallimore, congratulated the First Heritage Co-operative Credit Union for successfully convening its 6thAnnual General Meeting. She motioned to the membership that they have heard the Nominating Committeeâ&#x20AC;&#x2122;s Report and according to the rules of the Credit Union, after the report has been placed before the members, nominations can be asked from the floor. If there are nominations from the floor, the ballots will be issued and cast; the votes will be tallied; and the results will be announced. If there are no nominations from the floor, then the persons who were nominated will be duly elected. Mrs. Brown commenced with the election of the Board of Directors. She stated the names of the nominees of the Board of Directors and asked for any other nominations from the floor. After the third call, and there being none, she asked for a mover and a seconder to duly elect the nominees to serve on the Board of Directors. This was moved by Member, Ms. Sonia McFarlane and seconded by Member, Ms. Jennifer Hibbert and carried. Moving to the Supervisory Committee, Mrs. Brown, after stating the names of the nominees of this committee, asked for any other nominations from the floor. After the third call, there being none, she asked for a mover and a seconder to duly elect the nominees to serve on the Supervisory Committee. Moved by Ms. Janyce Robinson and seconded by Member, Mr. Floyd Ebanks and carried, she announced that those nominated have been duly elected to

serve on the Supervisory Committee for one year. With regard to the Credit Committee, Mrs. Brown, after stating the names of the nominees, asked for any other nominations from the floor. There being none, she asked for a mover and a seconder to duly elect the nominees to serve on the Credit Committee. Moved by Member, Ms. Jacqueline Roberts and seconded by Member, Ms. Nicola Anderson-Francis and carried, she announced that those nominated were duly elected to serve for another two years. As it related to the Delegates for the League, Mrs. Brown asked for the motion to allow the Board of Directors to choose the representatives for Delegates and Alternate Delegates to the League. The motion was moved by Member, Ms. Beverly Wallace and seconded by Member, Mrs. Winsome Heron-Fearon and carried. Mrs. Brown then advised that within ten (10) days of this meeting, the Board of Directors should meet, and the information for the members of the Committees and the Board should be sent to the Department of Co-operatives and Friendly Societies and any other fora that should be so informed. 15. ANY OTHER BUSINESS The Chairman thanked Mrs. Brown of the Department of Co-operatives and Friendly Societies for conducting the elections and announced the floor open for any other questions or comments at this juncture. One member queried if the location for the meeting could be nearer uptown as she lives in Stony Hill to which the Chairman responded that the space to accommodate the number of participants and the cost are reasons for the selection. She then asked if the meeting could commence earlier as she was concerned about being downtown with the high probability of being robbed, seeing that she does not drive. The Chairman responded that they will look into reviewing the start time. Member, Ms. Kathlene Roberts, opined that in an effort to eliminate the negative experiences that have been brought to the meeting, before any account such as the FIP insurance case, is closed by the Credit Union, checks should be made to contact the person especially if itâ&#x20AC;&#x2122;s a long serving member, who has been consistently honouring her payments. It could mean that the member is very sick or overseas.

The Chairman noted the point but informed that with the CUNA, the Credit Union does not have much control, but Management will do whatever they can to see how her policy can be reinstated. Member, Senior Bishop Major Garnet Kildare expressed congratulations to Chairman, and Directors Edmund Jones and Leodis Douglas on their full attendance at Board Meetings. The Chairman, through the applause, thanked him on their behalf. Mrs. Althea Daley tendered apology on behalf of Mr. Richard Ranger who was unavoidably absent. Member, A.N. Harris, Esq. reminded the meeting of his contact number and email address for messages to be sent concerning the AGM Report when it is ready as also to be informed of functions that he could participate in. There being no further questions or comments, the Chairman thanked the members; expressed gratitude and thanks to the past Treasurer, Mr. Robin Levy, now Group CEO at the Jamaica Co-operative Credit Union League, for his support and commitment to the Credit Union over the years. He then asked the entire meeting to give a round of applause in appreciation to Mr. Levy. 16. TERMINATION There being no further matter for discussion, the meeting was terminated at 6:18 p.m.

_______________________ Leodis Douglas Secretary, Board of Directors

Mr. Balvin Vanriel, FCA, FCCA - Chairman Mr. Vanriel is currently a Senior Audit Manager with the auditing firm BDO Chartered Accountants. He is a qualified Accountant, a Fellow with the Institute of Chartered Accountants of Jamaica (ICAJ) and a member of The Association of Chartered Certified Accountants (ACCA). Mr. Vanriel is also a Registered Public Accountant. He serves as an Associate Minister in his denomination. He is Chairman of the Board of Directors of First Heritage Co-operative (FHC) Credit Union and FHC Investments Limited. Mr. Oâ&#x20AC;&#x2122;Neil W. Grant, MBA - 1st Vice Chairman Mr. Grant is the President of the Jamaica Civil Service Association, since June 2011. He has held several senior positions in various Ministries, including now sitting on the Board of the National Housing Trust. He is a trained Accountant and Financial Analyst and currently holds an Executive MBA from the Mona School of Business. He is the 1st Vice Chairman and Chairman of the FHC Foundation and Audit & Risk Management Committee. Mr. Edmund Jones - 2nd Vice Chairman Mr. Jones is a retired Civil Servant with his last post being Technical Support Manager at the Ministry of Finance and Planning. He currently does contractual work in both the Public and Private Sectors managing projects, teaching and consulting. His volunteer service includes directorships at Quality Networks Co-operative and the Jamaica Paralympic Association. He is also a Council Member of the Aquatics Sports Association of Jamaica.

He is the 2nd Vice President and is the Chairman of the Merger and IT Steering Committees. Mr. Kevin Forbes, MBA-Treasurer Mr. Forbes is currently employed to Cable & Wireless Limited as a Financial Manager. He previously served as the Financial Controller for Allied Insurance Brokers Limited and worked in various management capacities within the Grace Kennedy Group of Companies and with Ernst & Young Caribbean. He holds the degree of Master of Business Administration in Finance from the Manchester Business School, and is a Fellow of the Association of Chartered Certified Accountants (ACCA) as well as a member of the Institute of Chartered Accountants of Jamaica (ICAJ). He is the Treasurer of FHC Credit Union and is the Chairman of the Finance & Operations Committee. Mrs. Leodis Douglas, MBA - Secretary Mrs. Douglas is currently the Human Resource Director and Adjunct Faculty Lecturer at G.C. Foster College of Physical Education and Sport. Mrs. Douglas is the holder of the degree of Master in Business Administration from Florida International University, a B.Sc. in Human Resource Management, graduating summa cum laude and a Diploma in Secondary Education with Honours. Mrs. Douglas is the Secretary of the Board of Directors of FHC Credit Union and is the Chairperson of the Retirement Scheme’s Board of Trustees, the Corporate Governance and Nominating Committees. Ret’d SSP Michael James - Assistant Treasurer Ret’d SSP James is a Retired Senior Superintendent of Police, a former Executive Member of the Police Officers’ Association and Divisional Commander of St. Thomas. He currently serves as Chairman of the Paul Bogle High School Board of Management. He has received numerous awards including the Medal of Honour for Meritorious Service, the Jamaica Constabulary Force Distinguished Service Award for the Development of Police Youth Clubs in Jamaica, as well as being named the Lasco Police Officer of the Year 2000. He is a Past President of the Kiwanis Club of St. Thomas. 39

He is the Assistant Treasurer on the Board of Directors at FHC Credit Union. Mrs. Tamara Francis Riley–Dunn, Attorney-at-Law - Assistant Secretary Mrs. Francis Riley-Dunn is a legal practitioner in Jamaica, having been called to the Bar in 2000. She specializes in commercial law (with an emphasis on debt collection), conveyancing and family law. She is an honours graduate of the University of the West Indies and also of the Norman Manley Law School, where she received her Certificate of Legal Education. She is the Assistant Secretary on the Board of Directors at FHC Credit Union. Mr. Noel Francis, O.D., MBA Mr. Francis, a Commissioned Land Surveyor and a Class 1 Hydrographer, is an Associate of the Royal Institution of Chartered Surveyors. His work experience includes the management of the Survey Department as Deputy Director of Surveys, serving as a consultant in Dredging Engineering, Consultant to the Commonwealth Secretariat and the United Nations and serving as a Lecturer at the University of Technology. Educated at the University of the West Indies, University College London, University of Toronto, Texas A&M University and Nova Southeastern University, Mr. Francis’ qualifications include a Bachelor of Science Degree (BSc.) and a Master of Arts in Business Administration (MBA). Mr. Francis currently serves on the Board of the Jamaica Copyright Agency as Treasurer. Mr. Francis has been honored by the Jamaican Government with an Order of Distinction. Mr. Cranston Ewan, MBA, FCCA Mr. Ewan is a Fellow of the Association of Chartered Certified Accountants (FCCA). He also holds a Master’s Degree with a concentration in Finance from the Manchester Business School. Mr. Ewan has vast experience in several industries, spanning Accounting, Shipping, Education, Energy Efficiency, and the Distributive Trade. His expertise includes accounting, finance, management consulting, human resources management, facilities management and leadership. 40

On behalf of the Board of Directors, it gives me great pleasure to present our annual report for year ended December 31, 2018. This financial year was a remarkable one for First Heritage Co-operative Credit Union Limited (FHC) and its subsidiary. We achieved outstanding results while serving our Members and focusing on our core business. The year also saw the Credit Union effect a total turnaround of its financial performance with the eradication of the accumulated deficit, as our performance improved significantly in surplus generation, as well as growth in both loans and deposits. In the macroeconomic environment, the overall policy direction was to support a growth agenda. The Statistical Institute of Jamaica (STATIN) reported a growth in the Jamaican economy of 1.9% for 2018. Policies for the Bank of Jamaica were implemented targeting an inflation rate of 4% to 6%. The year also saw the unemployment rate declining by just under 1.7% to end at 8.7%. All of these influenced a positive forecast for the Credit Union’s business performance as Members were more confident about the economy and their financial prospects. Throughout the year, numerous strategies were put in place by the Management of the Credit Union to ensure this positive outcome. Special commendation must be made to the leadership and team members for their dedication and commitment as they strategized and executed to achieve this level of performance. FINANCIAL PERFORMANCE Our Credit Union is pleased with its performance for the year ended 31st December 2018. We achieved a surplus of $241.45 million and an accumulated surplus of $44.74 million compared to a prior year surplus and accumulated deficit of $100.02 million and $189.67 million respectively. Our Credit Union’s loan portfolio increased to $8.04 billion an increase of 14.92% or $1.04 billion; the deposit portfolio stood at $9.60 billion, an increase of 13.82% or $1.17 billion. The liquidity ratio remained strong at 12.85%. Numerous initiatives were put in place to satisfy our Members’ needs resulting in the growth of our deposit and loan portfolios. For the period, our innovative and attractive loan products performed significantly well as our Members responded positively to the offerings.

By deepening our relationship with civil servants through the Jamaica Civil Service Association and other key member groups, we continued to increase our engagement with our members. Team Member engagement was also boosted as more activations took place to ensure our new thrust was embraced. STRATEGIC VISION The Board, Committees and Executives participated in the 2018 Strategic Planning Retreat. This activity was successful as we reviewed and updated our Strategy Map to ensure that we remained on track. Several important decisions were made regarding the future of the organization, as well as the most important activities required to help us achieve them. These included considerations regarding growing through mergers, with a Merger Committee being activated during the year. As we continue to keep abreast of the dynamic financial landscape, we continue to strategically position ourselves to ensure that market opportunities are seized as well as to continuously improve our service delivery. We will continue to ensure that our Members remain at the centre of everything we do. OUR SUBSIDIARY FHC Investments Limited (FHCIL) The financial year 2018 was a challenging one. We faced volatility in the emerging bond markets driven largely by geopolitical tensions from the US trade wars with China, as well as continued increase in domestic interest rates in the USA. This was further compounded by erratic swings in the currency markets which saw the exchange rates moving from J$124.76 to US$1 at the start of the year to a high of J$137.96 to US$1 in August and closing the year at J$127.72 to US$1. In spite of these challenges, FHCIL managed to move its net profit from just over $2.89 million loss in 2017 to $3.42 million at the end of 2018. This was due mainly to our new thrust aimed at diversifying the revenue stream of the company. Despite an underperforming emerging bond market, we were able to drive more revenue through stock market trading, in a market that was very vibrant in 2018 and this trend is expected to continue.

FHCIL will continue to further widen its catalogue of product offerings as we look to position ourselves as a premier fund manager of choice. Currently, we act as a Securities Dealer and Pension Fund Manager, with our Pension Gold (Churches Credit Union Approved Retirement Scheme) as our flagship product. We will, in 2019, roll out our Managed Fund product and structured financing offerings to add diversity to our revenue streams. In 2018, our Approved Retirement Scheme surpassed the one billion dollar mark in value to end the year at $1.15 billion, increasing by approximately 17.3% year over year. The scheme added 167 new members this year to now record total membership of 4,625. Though unaudited, the year 2018 was another good one for the Members, who continue to see real returns on their retirement funds which remain in double digit territory netting approximately 14%. We will be looking to aggressively ramp up membership in the fund in 2019 by targeting more companies and individuals without a pension. The unique unitized pension offering allows for greater participation in the schemeâ&#x20AC;&#x2122;s excellent performance as compared to non-unitized schemes, thus giving our members a distinct advantage. We encourage Members to reach out to an FHCIL Investment Advisor to learn more. As we move forward, FHCIL is now better positioned to take advantage of the new opportunities which will arise from market volatility and hence should continue to see an improved performance over the previous year. FHC FOUNDATION Throughout the year, the FHC Foundation continued its focus on youth development and education. We donated the sum of $1.21 million targeting GSAT Scholarships and Bursaries as well as Tertiary Scholarships. Launched in the 1990â&#x20AC;&#x2122;s, this programme has consistently awarded scholarships to outstanding scholastic achievers who require support to continue their education. Our fundraising activity was a benefit performance of the University Singers in Concert. This was held on Saturday, June 1, 2018, at the Philip Sherlock Centre for the Performing Arts.

BANK OF JAMAICA (BOJ) READINESS As the Credit Union continues to prepare itself to meet the requirements of the impending Bank of Jamaica regulation, steps are being taken to ensure that governance, risk management and prudential standards are improved. The Credit Union is well positioned to successfully transition to the new regulatory regime, whenever that time comes. RECOGNITION As we report on and complete a notable year, the Board of Directors would like to express gratitude to all our Members and Team Members for your unfaltering support, trust and loyalty to the Credit Union over the years. We are extremely pleased with the milestone performance of our Credit Union, despite the challenges faced. We look forward to another strong year as we continue to keep our Members at the Centre.

_______________________ Balvin Vanriel Chairman, Board of Directors

Names Balvin Vanriel

Position

Scheduled

Chairman

Attended

Excused

Oâ&#x20AC;&#x2122;Neil W. Grant 1st Vice 11 Chairman Edmund Jones 2nd Vice 11 Chairman

Kevin Forbes

Treasurer

Leodis Douglas

Secretary

Retâ&#x20AC;&#x2122;d SSP Michael James Assistant Treasurer

Tamara Francis Riley-Dunn Assistant Secretary

Noel Francis

Director

Cranston Ewan*

Director

*Cranston Ewan was appointed to the Board in May 2018.

The 2018 financial year was a successful one for First Heritage Co-operative Credit Union Limited. We achieved solid financial performance which accelerated the turnaround of the entity, resulting in the key financial indicators being in good standing. This performance was achieved by delivering on our Member at the Centre philosophy while growing our core business; through our strong leadership and team member engagement; improving operational efficiency and sound risk management culture. The report provides a summary of our financial performance and highlights of some of the activities pursued during 2018. FINANCIAL PERFORMANCE The net surplus for 2018 was $241.45 million representing an increase of 141.40% over 2017. This resulted in a return to an accumulated surplus position ($44.74 million as at December 31, 2018), as the Credit Union worked assiduously during the year to extinguish the starting accumulated deficit position of $189.68 million. We continued to maintain focus on growing our core business during the year which led to increased loan disbursement performance totaling $4.76 billion. Increased efforts were made to attract more savings from our members with numerous deposit growth strategies implemented. Deposits increased by 13.82% to $9.60 billion. As we move forward, we will continue to manage our costs and ensure that we remain prudent, financially sound and well-positioned to offer the best to our members. HUMAN RESOURCE DEVELOPMENT Through our human resource development philosophies, policies and practices we were able to deliver on our strategic initiatives through the development and implementation of our Team Member Engagement Programme, continued focus on Training and Development, Performance Management and Rewards and Recognition. For the year 2018, our aim was to create a work environment conducive to high levels of employee productivity, innovation and member centricity. This was achieved through the following: 47

A. Training and Development Interventions

Sales & Service Improvement Initiative (SSII) – Phase 2

We continued our efforts to equip Team Members with the requisite resources to create a culture of exceptional member experience, by rolling out Phase 2 of the Sales & Service Improvement Initiative (SSII), focusing on Member Service. Training interventions regarding the required strategy, structure and tools were conducted with the Service Teams throughout the branch network, to enable them to provide our valued members with high-quality member experience, in accordance with our member engagement strategy. The supporting Head Office departments were sensitized on the SSII principles to ensure understanding of their role in the process as they support the branch network. Certification – Health & Safety

Twenty two (22) Team Members were certified by the Heart Foundation of Jamaica, in Heart Saver/Basic First Aid. These Team Members are now equipped with the requisite skills to perform Cardiopulmonary Resuscitation (CPR) and Basic First Aid, in the event of medical emergencies.

Centre for Professional Development (CPD On-line) Web-based Training

Continuous learning is a key pillar within the Credit Union’s Training and Development framework. As such, the web-based training portal continues to be well-utilized by team members for Professional Development certified courses and other credit union specific courses.

B. Enhancement of our Performance Management System In building a performance-based culture, it was necessary to commence enhancements to our Performance Management System. The enhancements ensure that the activities and behaviours being measured better align to strategies and business-as-usual activities required to advance our Credit Union. In addition, two mandatory behaviourial skill competencies were introduced; Kindness and Continuous Improvement, the aim being to encourage a culture of genuine care to all and the consistent pursuit of being our best selves.

The overall revamping process will be concluded in 2019. C. Rewards and Recognition & Team Member Engagement Enhancements were made to the Rewards and Recognition programme with more team members being recognized for their contributions to the advancement of the Credit Union. In executing our Team Member Engagement Programme, the number of team building activities were increased in 2018. This resulted in greater team cohesiveness and further strengthening of the camaraderie among team members. Among these activities were our first Team Member Engagement and Fun Day. There were also many other innovative engagement events such as: theme Fridayz like “Twin Day”, “Out of Many One People”; Sports Club’s 2-4-6 Lyme, and “Girl’s Night Out” events. Team member wellness also continued to be a focus area as we continue to encourage our Team Members to practise work-life balance and maintain a healthy lifestyle. We hosted the Fitness Revolution Party, an exercise class held weekly where our members were invited to come out and exercise with Team Members. Our Team Members also participated in a number of 5k Walk/ Run Races and a Forest Trek hike during the year. RETAIL SALES & SERVICE The Retail Sales and Service Unit continued to directly lead the activities of the branch network to ensure exceptional member service and the identification and fulfillment of members’ financial needs. These efforts resulted in increased productivity being recorded with all nine (9) branches consistently achieving key targets. To deepen our Member at the Centre focus we introduced the second phase of the Sales and Service Improvement Initiative (SSII), a design with a targeted approach to exceptional service delivery. This framework is geared towards providing optimal service delivery at all touch points. Implementation was achieved in all of our branches by August, 2018.

We will continue to relentlessly work with team members throughout the branches to enable them to consistently apply the member interaction standards geared towards creating an exceptional experience for our Members. MARKETING, COMMUNICATIONS & MEMBER EXPERIENCE During the year the main focus of the Marketing, Communications and Member Experience Unit was to build the Credit Unionâ&#x20AC;&#x2122;s brand as well as enable the Retail Sales Unit to achieve the desired goals through strategic and impactful marketing strategies. These strategies included product promotions, public relations as well as targeted direct marketing. Product Enhancement, Development and Promotions Numerous initiatives were embarked upon such as the development of new products, the enhancement of existing products and the activation of promotions. a) Interest First Deposit Account This innovative offering which pays the interest at the beginning of the term of the deposit was created as part of our deposit garnering strategy. Numerous members took up this offer and are reaping the benefits. b) Loan Sales Major focus was placed on growing our loan portfolio and the year saw numerous loan promotions being executed such as: Motor Vehicle Loans, Summer Loans, Debt Consolidations and our popular Cash in a Flash Loan. c) The Family Indemnity Plan Promotional emphasis was placed on the Family Indemnity Plan offered by CUNA Caribbean Jamaica Limited. We continued to encourage our members to enroll in this plan and to ensure that all eligible family members are insured for final expenses. d) Micro and Small Business Our Micro & Small Business strategy was very pointed as we promoted and positioned the unit at three major events namely: The JEA/JMA Expo, The Small Business Association of Jamaica Expo and the Denbigh Agricultural Show.

In addition, the annual Micro and Small Business Christmas Marketplace was held on the grounds of the Holy Cross Church Hall in Kingston. The objective of this activity was to assist some of our micro and small business members with exposure and opportunities. The event saw approximately 27 micro and small business booth holders as exhibitors. Both the Heart Foundation of Jamaica and the Diabetes Association were present doing health checks. MEMBER ENGAGEMENT ACTIVITIES Civil Service Week Celebrations We continued our partnership with the Ministry of Finance & Public Service to host the 2018 staging of the Civil Service Week celebrations. This saw us participating in a number of their initiatives including their inaugural 5K Walk/ Run which was held on Saturday, November 17, 2018 at the Emancipation Park; the Civil Servant Long Service Awards, and a donation of $350,000.00 to Sophie’s Place, a children’s home currently housing twenty-two physically challenged children, to assist with their medical bills and supplies. Credit Union Week Credit Union Week was celebrated from October 14 through to October 20, 2018. Member Appreciation Days were held by all branches. International Credit Union Day was celebrated on Thursday, October 18, 2018 under the theme “Find Your Platinum Lining”. We joined other Credit Unions collaborating with the Jamaica Co-operative Credit Union League, to host an “Evening at the Movies” at Carib Theatre, where many of our Members were in attendance. Financial Literacy Month Financial Literacy Month is observed during the month of April by The Jamaica Co-operative Credit Union League. During the month the Credit Union participated in the League’s Financial Fair held in Portmore, St. Catherine as well as the Financial Literacy Seminar, held in Mandeville, Manchester, which targeted students. Carol Service Our Annual Carol Service was held in December at the St. Luke’s Anglican Church. The event saw FHC team members, members and our communities in attendance. A number of choirs participated in the service.

Fitness Revolution Party As we focused on the health and wellness of our members, we launched and hosted our Fitness Revolution Party in 2018. These free exercise classes were held in the parking lot of our head office and opened to our members as well as the public, every Tuesday, for a stipulated period of time. We saw scores of members and non-members in attendance every Tuesday and used this opportunity to connect with them and to create new members. CORPORATE SOCIAL RESPONSIBILITY a) Rebirth Project We participated in this programme as title sponsors for the fifth year. The Rebirth Project is a transformational eight week seminar targeting teenagers (13-15 years) with behavioral challenges. Through this programme they are introduced to counseling and psychological intervention prior to graduation to ensure that they excel at their full potential. Students who live in the inner-cities are introduced to the programme by their Guidance Counselors. The programme also facilitates both parents and educators. b) Labour Day Activities We continued our focus of maintaining our relationship with our communities and as such participated in six (6) Labour Day activities across the island. Our main focus was basic schools. These projects saw the Credit Union and its team members assisting with numerous painting and beautification activities at these schools. c) Read Across Jamaica Read Across Jamaica was celebrated in May. FHC participated by having reading sessions in 15 schools across the island. This was well received by the students. d) Lawrence Tavern Community Development As part of our ongoing Corporate Social Responsibility, we stand by our mantra to impact the communities in which we operate. As such, the Lawrence Tavern Community saw us partnering with their Community Development Committee to host their Christmas Tree Lighting Ceremony and Treat for the children in the community. Through this activity we were able to engage numerous persons within the community.

(e) Internship Programmes Our partnerships with organizations such as H.E.A.R.T, National Youth Service (NYS), the Ministry of Labour (MOL) and Citizen Security & Justice Programme (CSJP) continued, where we accommodated trainees/Interns and provided on-the-job training for them. CREDIT ADMINISTRATION & LOAN RISK During 2018, the Credit Administration and Loan Risk Department intensified its efforts to improve the overall quality of the loan portfolio. A number of strategies were employed to reduce our exposure and to protect the loan portfolio. These involved the following: •

Additional training for our loan underwriters, emphasizing a member centric approach to the underwriting and collection processes, while recognizing the need to protect the members’ deposits.

•

Greater flexibility in the collection process to negotiate workable solutions.

•

Enhanced processes to publicize and liquidate seized assets.

It was a very good year, in terms of collections, as the past due percentage started the year at 10.45% and ended at 8.42%, indicating a progressive improvement over the period. The Loan Portfolio increased from $7 billion to $8.04 billion which also positively impacted the past due ratios. Management encourages any member experiencing financial difficulties to reach out to the Credit Union so that the best solutions can be agreed upon to regularize loan accounts. OPERATIONS AND SHARED SERVICES The Operations and Shared Services Department offers mainly processing and facilities support to the business units and other areas within the Credit Union. During the year the Disbursement Unit improved its capacity and efficiency to support the growth in loan disbursements, ensuring accurate and timely disbursements. 53

The Procedure and Verification Analysts through their work provided the necessary assurances and coaching resulting in a greater level of oversight and compliance within the branches; especially important in an environment where there was significant growth. Significant work was done in developing our Complaint Management System which will be rolled out by the 2nd quarter of 2019 and is expected to enhance the Member Experience. ENTERPRISE RISK MANAGEMENT We remain committed to the principles of sound business practices to create and build value for our members and ensure growth and sustainability of the Credit Union. We recognize that risk management is an integral part of good management practice and is necessary for us to achieve our mission and vision. By taking a disciplined approach to risk management, we seek to ensure that our members continue to have confidence in us. In 2018, we undertook a number of activities to enhance our risk management capacity. These included: 1. Enhancement of the Enterprise Risk Management Framework to better facilitate the identification, prioritization and management of risks in a coordinated manner; 2. Improved systems of control to facilitate the mitigation or management of risk. The key objectives of our Enterprise Risk Management Framework are: 1. Oversight: To identify, manage and monitor all critical risks under a holistic approach consistent with Board approved risk appetite. 2. Accountability: To assign ownership of risk to Management who shall be responsible for identifying, evaluating, mitigating and reporting risk exposures. 3. Assurance: To provide reasonable assurance to the Board, Management, Members and stakeholders that risk is being appropriately managed within defined levels so as to bring value to the Credit Union.

Anti-Money Laundering and Counter-Financing of Terrorism In 2018, we undertook a number of activities to enhance our AML/CFT capacity. These included: â&#x20AC;˘ â&#x20AC;˘

Reviewed existing AML/CFT controls; Implemented new systems and processes to comply with AML/CFT risks.

Foreign Account Tax Compliance Act (FATCA) During 2018, FHC Investments Limited continued to be compliant with its reporting obligations under FATCA. RECOGNITION As we celebrate the close of another financial year, we express our gratitude to each and every member for allowing us to serve you, to our team members for your unwavering commitment to improving the performance of your individual units, and by extension, the Credit Union at large. We also express thanks to our Board of Directors and Volunteers for their contribution and support. OUTLOOK The success of our Credit Union is underpinned by focusing on our Members and team members, balanced risk management, improving operational efficiency and executing prudent expense management. While the market dynamics have changed significantly with increased competition, we will continue to remain steadfast in serving our Members well.

___________________ Roxann Linton Chief Executive Officer

Overview I am pleased to present the Treasurer’s Report to the Annual General Meeting of the First Heritage Co-operative Credit Union Limited (FHC) for the year ended December 31, 2018. The audited Financial Statements in this annual report are for the Credit Union and the Group, which comprises the Credit Union and its wholly-owned subsidiary, FHC Investments Limited (FHCIL). SUMMARY FINANCIAL PERFORMANCE FHC realized a surplus of $241.45 million as compared to prior year surplus of $100.02 million and this represents a 141.40% or $141.43 million increase over the prior financial year. This performance is the highest in FHC’s history. The subsidiary FHCIL realized a marginal improvement in profit of $0.74 million before taxes as compared to prior year’s $0.48 million. This year’s performance resulted in an Accumulated Surplus erasing the Accumulated Deficit incurred over the two previous years. Our encouraging performance is directly attributed to the execution of initiatives embedded in our three year Strategy Map launched in 2017. These initiatives are centred on enhancing our member centric culture, improving our loan quality and rationalization of operational costs. The expansion of our Sales and Service Improvement Initiative has contributed to increased loan sales activities within the period and was equally matched by our buoyant deposit inflows negating any adverse impact on our liquidity positions. Of significant importance is our operational efficiency ratios which improved despite increased productivity, and the loan quality was not compromised as the past due rate improved from 10.62% to 8.42%. The graphs below show the Credit Union’s Revenue and net surplus/deficit performance for the last five years.

As at December 31, 2018, FHC Credit Union’s total Assets of $12.22 billion represented an increase of 11.46% over prior year’s $10.96 billion, while the Group had Total Assets of $12.30 billion as compared to $11.06 billion (2017) or 11.31% increase. The Group’s Net Loan portfolio increased by 14.92% or $1.04 billion over the prior year 2017 from $7.00 billion to $8.04 billion, while the Group’s Liquid Assets and Investments grew by $235.20 million moving from $2.87 billion (2017) to $3.11 billion (2018) as more funds became available based on our liquidity status. Implementation of the new International Financial Reporting Standards 9 (IFRS 9) Financial Instruments as at January 1, 2018, effected a reduction in total financial assets of $304.72 million at the start of the financial year 2018. The graph below shows the Credit Union’s Investments, Loans and Total Assets for the period 2014 - 2018.

Membersâ&#x20AC;&#x2122; Deposits increased by $1.17 billion or 13.82% from $8.44 billion (2017) to $9.60 billion (2018). The primary contributor to this increase was our promotional deposit drive which gave participants the opportunity to earn their interest upfront at attractive rates. The graph below shows the trend over the period 2014 - 2018

ECONOMIC OVERVIEW Preliminary estimates from Statistical Institute of Jamaica (STATIN) indicate that the Jamaican economy had growth of 1.9% year over year for 2018. Supported by a growing global economy (forecasted to be 3.7% for 2018 and 2019 by the International Monetary Fund), polices implemented by the Bank of Jamaica targeting inflation of 4% - 6% and the lowering of benchmark interest rates throughout the year encouraged private sector credit and investment activities. The fiscal discipline by the Government in meeting its performance criteria set by the International Monetary Fund and reducing the Debt to GDP ratio, aided the improved outlook of the countryâ&#x20AC;&#x2122;s credit ratings by international rating agencies. The Jamaican dollar depreciated by 2.37% against the United States dollar in trading over the year to end 2018, moving to $127.72 from $124.76. Throughout the period, there was increased volatility as liquidity positions changed for varying reasons including the BOJ reducing its Foreign exchange surrender requirements and its repayment of maturing USD Certificates of Deposits.

Interest rates for the 90-day benchmark Treasury Bill rate started the year at 4.17%, and moved downwards to 2.05% at year end, as the BOJ indicative benchmark policy interest rate reduced to 1.75% as at December 2018. The unemployment percentage declined by 1.7 percentage points over the year to end at just under 8.7% (Dec. 2018). OPERATING RESULTS Increased competition and the declining interest rates challenged our margins throughout the period but we continue to apply initiatives to adapt to the changing needs of the marketplace and our members, always cognisant of the need to continuously improve the member experiences and our internal controls. The Credit Union’s Key Results for the year 2018 were: • Interest Income of $1.45 billion (2018) increased by $245.57 million or 20.39% from $1.20 billion (2017) primarily due to the growth in the loan portfolio through improved product offerings and sales activities. Deliberate and proactive, the Credit Union remained competitive by offering attractive rates to our members, while reviewing our policies and processes for improving our loan disbursement levels along with other key drivers for revenue growth. • Non-Interest Income of $225.34 million (2018) increased by $43.52 million or 23.94% from $181.82 million (2017). This increase is mainly attributed to the increase in the gains of sales of stocks ($31.05M in 2018 against $7.57M in 2017). See graphical depiction of the Credit Union’s performance in Interest Income and Non-Interest Income for 2017 - 2018 below.

• Interest Expense increased from $160.61 million (2017) to $188.23 million (2018). This increase is directly attributed to the significant take-up in the Term products which are our primary source of funding. The Credit Union continues to offer some of the most attractive interest rates available to our members on savings products. • Operating Expenses increased by $46.02 million or 4.21% (in line with the lower end of inflation), from $1.09 billion (2017) to $1.14 billion (2018). Albeit a work-inprogress we were able to reduce our Operational Efficiency ratio to 68.10% from 78% in the previous year. • Past Due loans (30 days and over) as a percentage of our Total Loan portfolio was 8.42% (vs.10.63% as at December 31, 2017). • Provision for Loan Losses, net of recoveries increased to $107.37 million in 2018 from $31.65 million in 2017. Impacting this increase is the additional provisioning required under IFRS 9’s Expected Credit Loss calculations which is more aggressive than its previous estimates under IAS 39. Additionally, we had approximately $23.96 million less in recoveries in 2018. Our provisioning for loan loss continues to be adequate to cover potential losses. • Accumulated surplus increased to $44.74 million from a deficit of $189.68 million, an improvement of $234.41 million over 2017. REGULATORY ENVIRONMENT Our performance against International Credit Union Industry financial benchmark standards for safety and soundness (PEARLS) continues to be monitored by the Jamaica Co-operative Credit Union League Limited. Our performance is also compared to other prudential standards by the BOJ. FHC’s Regulatory Capital to Total Asset ratio increased to 13.91% as at December 31, 2018 (11.90% 2017), compared to the minimum PEARLS Standard of 8.00%, and a 6.00% minimum requirement for the Bank of Jamaica. It is expected that the Bank of Jamaica (BOJ) will assume the role of direct supervisor of Credit Unions in 2019 as the new Bill for the sector is in its final stages of review. As a specified financial institution, the BOJ continues to have oversight of our activities and continues to review our financial reports and conducts periodic audits. The Credit Union continues to make the requisite preparation for this 60

transition in the near future through policy and procedural reviews. CONCLUSION Your Credit Union’s performance for 2018 is unparalleled. We had the highest level of loan disbursements, the highest Net Surplus and a significant improvement in our Operational efficiency. Capital continues to improve and liquidity is adequate at the end of the financial year. We are very proud that the strategies implemented are bearing fruits and our Accumulated Deficit of the last two years is behind us with the trajectory set for further growth. As always, the Credit Union’s success is dependent on the continued support of you our members, our dedicated team members and our volunteers. ACKNOWLEDGEMENTS I give thanks to God, my fellow board members and my fellow members, for having given me the opportunity to serve as your Treasurer. It has been an honour and a privilege to do so. Thank you, our members, for the continued business and support that you have given to your Credit Union, and entrusting your confidence in us, the Board of Directors and Management, in serving you and we hope to continue to be deserving of your confidence. To all the stakeholders including volunteers, managers and team members who consistently apply themselves to the Credit Union’s success, I thank you. I also thank our Auditors, KPMG, for their professionalism and another timely completion of our audit this year. God bless you all.

________________ Kevin Forbes Treasurer

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THE COMMITTEE The governance structure of Credit Unions provides for a Supervisory Committee whose members are elected from and by the wider membership at the Annual General Meeting. The Supervisory Committee assists the Board of Directors in the discharge of their responsibilities by providing oversight on aspects of the internal control system through the Internal Audit Function.

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At the last Annual General Meeting, five (5) members were elected to the Supervisory Committee: • • • • •

Mrs. Camelle Ricketts-Moore Ms. Jacqueline Roberts Mrs. Karla Stephens-Hall Mr. Luke McIntosh Ms. Geraldine Wright

The Committee appointed Mrs. Camelle Ricketts-Moore as Chairperson and Ms. Jacqueline Roberts as Secretary. ATTENDANCE RECORD During the period, there were 8 meetings of the Committee; following which monthly reports were presented to the Board of Directors. As at December 31, 2018, attendance by members to the Supervisory Committee meetings was as follows: Names Scheduled Attended Excused Mrs. Camelle Ricketts-Moore 8 7 1 Mr. Luke McIntosh 8 8 0 Ms. Geraldine Wright 8 6 2 Mrs. Karla Stephens-Hall 8 3 5 Ms. Jacqueline Roberts 8 7 1 In addition, we attended the Joint Meeting of the Board of Directors, Committees and Management held quarterly during the period and the Chairman attended the Audit & Risk Management Committee meeting held on December 6, 2018. AUDIT AND INVESTIGATIONS ACTIVITIES An audit plan was prepared and the evaluation of the Credit Union’s operations was executed in accordance with this plan. In addition, routine monthly activities and investigations as requested by management were completed.

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The following table represents the areas of focus in 2018 for the Internal Audit Department. 2018 Audit Plan

Audit No. Description

Status as at December 31, 2018

1. 2. 3. 4. 5. 6. 7. 8. 9.

Completed Completed Completed In Progress In Progress In Progress Deferred Deferred Deferred

Management of the Retirement Scheme IT General Controls Branch Operations Loans and Security Management Human Resources Management Compliance with POCA Audit on Liquidity Management FHC Investments Limited (Operations Review) Third Party Relationship Management

Audits were deferred due to the number of unplanned activities relating to the execution of special investigations during the period. There were 16 unplanned investigations conducted in 2018 compared to 11 in 2017. The audits completed indicate amongst other things, the need for improvement in the development of policies, procedures and processes; and the tightening of supervisory controls at the Branches. Follow-up reviews were conducted periodically by the Internal Audit Department to ensure outstanding recommendations were being addressed. The Management team has shown their commitment towards addressing these recommendations and has continued on a path towards strengthening the internal control system of the Credit Union. The Committee also reported on the following: 1. Bank Reconciliations are reviewed in a timely manner and reconciling items are being cleared appropriately. 2. Staff, Volunteer and Connected Party Loans - Internal Audit is satisfied that there is evidence of effort to collect and regularize outstanding balances.

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CONCLUSION We would like to express our thanks to the Nominating Committee for their confidence in selecting us and to the members of the Credit Union for appointing us to serve in this important capacity. We would also like to express our gratitude to the Management and Team Members, in particular the Internal Audit Department and the Board of Directors for facilitating and supporting the work of the Committee over the year.

___________________ Camelle Ricketts-Moore Chairperson

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Jamaicaâ&#x20AC;&#x2122;s economy reflected a growth of 1.9% in 2018 when compared to 2017. For the financial year 2018, the Credit Union experienced excellent growth in the loan portfolio, despite an environment of tough competition from commercial banks, building societies, credit unions, and other lending institutions. In the face of these challenges, the Credit Union is determined to meet the financial needs of its members and assist them to achieve their financial and personal goals. 171

The Credit Union will endeavour to consistently exceed its membersâ&#x20AC;&#x2122; expectations. As mentioned above, the Credit Union experienced excellent growth, with loan disbursements moving from $3.53 billion in 2017 to $4.76 billion in 2018. This represents an increase of $1.24 billion or 35%. In addition, the loan portfolio grew by 14.92% or $1.04 billion - moving from $7.00 billion in 2017 to $8.04 billion in 2018. Of the total disbursements Micro & Small Business Loans represented $300.77 million in 2018, an increase of $115.47 million or 62.32% when compared to disbursement of $185.30 million for 2017. The Past Due rate continues to reduce as a result of the introduction of innovative strategies. The Past Due rate fell from 10.62 % as at December 31, 2017 to 8.42% as at December 31, 2018. For the period of January to December 2018, a total of forty-five meetings were held. Attendance for each member was as follows: Members Meetings Held RICHARD RANGER ALTHEA DALEY PETE NESBITT STENNETT MCLEAN JANYCE ROBINSON

Meetings Attended

45 45 45 45 45

No Of Times Excused

40 5 42 3 14 Resigned 41 4 34 Resigned

Due to other commitments, Mr. Pete Nesbitt and Ms. Janyce Robinson resigned from the Committee in September 2018 and January 2019 respectively. We wish to thank Mr. Nesbitt and Ms. Robinson for their invaluable contributions to the Credit Committee. We thank you, our members, for your assistance in reducing the Past Due rate and urge you to assist our Credit Union to continue to reduce its past- due portfolio by ensuring loans are repaid in a timely manner. We encourage any 172

member experiencing financial difficulties to call or visit the Credit Union so that the best arrangement can be made to become current. The Credit Committee takes this opportunity to express profound gratitude to the highly trained and dedicated Team Members of FHC, the Board of Directors, Supervisory Committee and you, our valued and committed members, for the assistance and support provided in 2018. We look forward to serving you in 2019.

______________________ Richard Ranger Chairman

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In accordance with the provision of the Rules of First Heritage Co-operative Credit Union Limited in respect of Article XIV, Rule 59, a Nominating Committee was appointed which comprised of the following members: • • •

Mrs. Leodis Douglas Mr. Richard Picart Ms. Roxann Linton

- Chairperson; Board Representative - Member Representative - Staff Representative

The Committee met to consider all retiring Volunteers from the Board of Directors, Supervisory Committee and Credit Committee. The Committee subsequently advertised for Volunteers to fill the vacancies. The candidates were assessed and recommendations made. The Nominating Committee now presents this report to the membership as outlined below: BOARD OF DIRECTORS The Directors retiring at this Annual General Meeting are: 1. 2. 3. 4. 5.

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

The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Recommended Term (years)

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

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2 2 2 2 2

SUPERVISORY COMMITTEE The members of the Supervisory Committee all of whom retire at this Annual General Meeting are: 1. 2. 3. 4. 5.

Mrs. Camelle Ricketts-Moore Mrs. Karla Stephens-Hall Mr. Luke McIntosh Ms. Geraldine Wright Ms. Jacqueline Roberts

Mrs. Karla Stephens-Hall has indicated her unavailability to serve for the 2019 2020 term and so she has not been nominated for re-election at this time. We thank Mrs. Stephens-Hall for her contribution to the Credit Union. The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Recommended Term (years)

Mrs. Karla Stephens-Hall Mrs. Camelle Ricketts-Moore Mr. Luke McIntosh Ms. Geraldine Wright Ms. Jacqueline Roberts

Ms. Shauna-Kaye Gordon Mrs. Camelle Ricketts-Moore Mr. Luke McIntosh Ms. Geraldine Wright Ms. Jacqueline Roberts

1 1 1 1 1

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

Mr. Richard Ranger Mr. Stennett McLean

Additionally, note should be made of the appointment of Mr. Donald Williams in January 2019, in accordance with Article XIII, Rule 44c, due to the casual vacancy created by the departure of Mr. Pete Nesbitt who resigned in September 2018 due to work commitments. Ms. Janyce Robinson also resigned from the Committee effective January 2019 to focus on other commitments. We are grateful to both for their contribution to the Credit Union. 175

The Committee nominates the following persons who have all indicated their willingness to serve: Retiring Recommended Term (years)

Mr. Richard Ranger Mr. Stennett McLean Mr. Pete Nesbitt Ms. Janyce Robinson

Mr. Richard Ranger Mr. Stennett McLean Mr. Donald Williams Ms. Clivia Green

2 2 2 2

PROFILES OF CANDIDATES 1. Board of Directors Mr. Oâ&#x20AC;&#x2122;Neil W. Grant, MBA Mr. Grant presently serves as the President of the Jamaica Civil Service Association, a position which he has held since June 2011. He is a committed public servant and has held several senior positions in various Ministries, including now sitting on the Board of the National Housing Trust. He is a trained Accountant and Financial Analyst with over twenty (20) years of experience in his chosen profession and he currently holds an Executive MBA from the Mona School of Business. He currently serves as a volunteer in the capacity of 1st Vice Chairman on the Board of Directors at First Heritage Co-operative Credit Union Limited and Chairman of the FHC Foundation. Mr. Edmund Jones Mr. Jones is a retired Civil Servant with his last posting being Technical Support Manager at the Ministry of Finance and Planning. He currently does contractual work in both the Public and Private Sectors managing projects, teaching and consulting. Mr. Jones serves as a Director of First Heritage Co-operative Credit Union Limited in the capacity of 2nd Vice-President and is a Director on the Board of FHC Foundation. His volunteer service includes directorships at Quality Networks Co-operative and the 176

Jamaica Paralympic Association. He is also a council member of the Aquatics Sports Association of Jamaica. Mr. Kevin Forbes, MBA Mr. Forbes is currently employed to Cable & Wireless Limited as a Financial Manager. He previously served as the Financial Controller for Allied Insurance Brokers Limited, a subsidiary of the Grace Kennedy Company Limited from 2012 to 2016. He has extensive experience in the field of Auditing and Accounts, having worked in various management capacities within the Grace Kennedy Group of Companies and with Ernst & Young Caribbean. He holds a Masters of Business Administration in Finance from the Manchester Business School, United Kingdom, and is a Fellow of the Association of Chartered Certified Accountants as well as a member of the Institute of Chartered Accountants of Jamaica. He currently serves as a volunteer in the capacity of Treasurer on the Board of Directors at First Heritage Co-operative Credit Union Limited. Mrs. Tamara Francis Riley–Dunn, Attorney-at-Law Mrs. Francis Riley-Dunn is a legal practitioner in Jamaica, having been called to the Bar in 2000. She specializes in commercial law (with an emphasis on debt collection), conveyancing and family law. She is an honours graduate of the University of the West Indies and also of the Norman Manley Law School, where she received her Certificate of Legal Education. She currently serves as a volunteer in the capacity of Assistant Secretary on the Board of Directors at First Heritage Co-operative Credit Union Limited. Ret’d SSP Michael James Ret’d SSP James is a Retired Senior Superintendent of Police, a former Executive Member of the Police Officers’ Association and Divisional Commander of St. Thomas. He currently serves as Chairman of the Paul Bogle High School Board of Management.

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He has received numerous awards including the Medal of Honour for Meritorious Service, the Jamaica Constabulary Force Distinguished Service Award for the Development of Police Youth Clubs in Jamaica, as well as being named the Lasco Police Officer of the Year 2000. He is a Past President of the Kiwanis Club of St. Thomas. He currently serves as a volunteer in the capacity of Assistant Treasurer on the Board of Directors at First Heritage Co-operative Credit Union Limited. 2. Supervisory Committee Mrs. Camelle Ricketts-Moore, FCCA, MBA, CIA, CISA Mrs. Ricketts-Moore has over 18 years’ working experience in the field of Accounting, Internal Auditing and General Business Operations, acquired mainly from the Manufacturing, Distribution and Retail industries. She is currently employed to Carlong Publishers Limited & Sangster’s Bookstores Limited as the Group’s Internal Audit Manager having previously worked with GraceKennedy Company Limited for 11 years. A member of the Association of Chartered Certified Accountants (ACCA) since 1999, Mrs. Ricketts-Moore is a Chartered Accountant and holds an MBA from Manchester School of Business. She is also a Certified Information System Auditor (CISA) and a Certified Internal Auditor (CIA). She currently serves as a volunteer in the capacity of Chairperson on the Supervisory Committee at First Heritage Co-operative Credit Union Limited. Mr. Luke McIntosh, J.P. Mr. Mclntosh has a diverse 28 year career spanning the public and private sectors. He is currently the Principal Finance Officer at the Ministry of National Security, and has worked as the Principal Finance Officer at the Ministry of Justice, Financial Controller of a major statutory body and Director of Finance at the island’s largest public health care group. He holds a postgraduate degree from the University of Technology; an undergraduate degree from the University of the West Indies; a Teaching Diploma from the Mico Teachers’ College; a Diploma in Project Management and several specialized certificates in the areas of Leadership and Change Management, Government Accounting, Corporate 178

and Strategic Planning, Public Sector Procurement, Human Resource Development for Capacity Building and Policy Development. Mr. Mclntosh, a Justice of the Peace, is the Treasurer of Father’s Inc. and a Gender Activist with Women’s Media Watch. Ms. Geraldine Wright, MBA, CFE, AICB Ms. Wright has over 32 years of management and leadership experience in the areas of forensic accounting/fraud management, risk management, anti-money laundering and internal auditing. She is a Certified Fraud Examiner and holds an MBA from Barry University and a Diploma and Certificate in Banking from the Institute of Canadian Bankers and Institute of Bankers, England respectively. Over the years, Ms. Wright has worked at various commercial banks including serving as the Internal Audit Manager at GraceKennedy Group and as an Audit Consultant at MICO University College. She has served on the board of directors of the Rural Electrification Programme (REP) and the Bellevue Hospital. Ms. Jacqueline Roberts, CA, ACCA Ms. Roberts is currently an Assistant Audit Manager with the auditing firm BDO Chartered Accountants. She is a qualified Accountant, a Fellow of the Institute of Chartered Accountants of Jamaica (ICAJ) and the Association of Chartered Certified Accountants (ACCA). Ms. Roberts is also a Registered Public Accountant. Ms. Roberts possesses over 25 years accounting and auditing experience and has performed on assignments within various sectors such as, government, manufacturing, financial, agriculture, retail, non-profit and service organizations. She is currently the Secretary of the Supervisory Committee of First Heritage Co-operative Credit Union Limited. Ms. Shauna-Kaye Gordon, MBA, FCCA, CA Ms. Gordon is a Tax Manager with PricewaterhouseCoopers (PwC) since January 2017. She also has 18 years’ experience working with the Government of Jamaica in various departments including Tax Administration Jamaica and Jamaica Customs Department.

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Ms. Gordon has extensive knowledge of Jamaican tax laws, international double taxation treaties, and the tax administration system, practices, policies, and procedures. She has provided tax advisory and tax compliance services to clients in the retail, manufacturing, hospitality, banking, insurance and bauxite industries. Ms. Gordon holds a Masterâ&#x20AC;&#x2122;s Degree in Business Administration (MBA) from Florida International University (FIU) and a postgraduate diploma in Tax Audit and Revenue Administration from the Management Institute for National Development (MIND). She is a Fellow of the Association of Certified Chartered Accountants (FCCA) and a member of the Institute of Chartered Accountants of Jamaica (ICAJ). 3. Credit Committee Mr. Richard Ranger, RPA, ACCA, CA Mr. Ranger is a Chartered Accountant and member of the Association of Chartered Certified Accountants (ACCA) in the United Kingdom and a member of the Institute of Chartered Accountants of Jamaica (ICAJ). He has over 15 years of experience in external and internal auditing, accounting and business operations. Mr. Ranger has worked with PwC, Boldeck Jamaica Limited and Neal and Massy Group specializing in audit and assurance, accounting and income tax services. While at Boldeck Jamaica Limited, he was involved in business assessment of entrepreneurs seeking loan financing. Currently, he is the Principal of Ranger and Associates, a local audit and accounting firm. He currently serves as a volunteer in the capacity of Chairman of the Credit Committee at First Heritage Co-operative Credit Union Limited. Mr. Stennett Mclean, GISP Mr. McLean is a Chief Photogrammetrist of the Survey and Mapping Division within the National Land Agency and previously served as a Supervisor in the Topographical Data Management Division. He has been a cartographer with the Agency for numerous years and while with the organisation he has represented the government of Jamaica at various international conferences, including acting as a representative of the government for the United Nations.

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Mr. McLean has completed studies in Cartography, Geographic Information Systems and Computer Engineering. He also specializes in Map design and creation (both digital and hard copy). Mr. Donald O. Williams, J.P., AICB, FICB Mr. Williams is a former Vice President – Credit Risk Management with Scotia Bank Jamaica where he served for over 47 years in several operational, senior management, and executive roles and is now retired. Mr. Williams has worked both in Jamaica as well as Toronto, Canada for the Bank of Nova Scotia with extensive experience in both retail and corporate credit. Mr. Williams is an Associate of the Institute of Canadian Bankers (AICB) and a Fellow of the Institute of Canadian Bankers (FICB). Mr. Williams is a Justice of the Peace for the parish of Kingston, as well as a Parish Court and Supreme Court Mediator. Ms. Clivia Green, ACIB Ms. Green is an Associate of the Chartered Institute of Bankers (AICB) with a First Degree in Management Studies majoring in Management and Accounting. She has over 30 years’ work experience in the financial services industry, including 13 years in Commercial Banking with the National Commercial Bank, ending her tenure as a Senior Loans Officer. She also has experience in the Credit Union Movement, having served as General Manager for Grace Co-operative Credit Union Limited as well as experience in agricultural lending as a Manager at the National People’s Co-operative Bank of Jamaica Limited. Ms. Green currently serves as the Park Manager to the Senior General Manager, Construction & Development Division at the National Housing Trust and previously served over 10 years’ as a Manager in the Compliance Department.

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Leodis Douglas Chairperson, Nominating Committee Signed By:

March 29, 2019 ____________________ _________________ Leodis Douglas Date Chairperson

March 29, 2019 ___________________ __________________ Richard Picart Date Member Representative

March 29, 2019 ___________________ __________________ Roxann Linton Date Staff Representative

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Carol Service: (L-R) Leaders of the St. Luke’s Anglican Church - Reverend Elizabeth Riley and Venerable Patrick Cunningham, share a light moment after the Annual FHC Carol Service held at the St. Luke’s Church on December 13, 2018, with FHC’s CEO Ms. Roxann Linton, GM - Legal Affairs, Ms. René Gayle and AGM - Marketing, Communications & Member Experience, Mrs. Juven Montague-Anderson.

Christmas Marketplace: Host, Mrs. Georgia Crawford-Willams from Nationwide News Network peruses items from participating booth holders at FHC’s Micro & Small Business Christmas Marketplace which was held on Saturday, December 8, 2018, at the Holy Cross Church Hall.

Stakeholder Engagement: Evening at the Movies...Mrs. Joan Latty-Sterling and sibling, Mrs Heleen Francis share a selfie moment as they celebrate during Credit Union Week at the Carib Theatre.

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International Volunteers Day: FHCâ&#x20AC;&#x2122;s Executive Team made the rounds of special delivery to our Volunteers on International Volunteers Day celebrated on December 5.

Civil Service Week 5K Run/Walk: Team FHC celebrates a successful run at the inaugural staging of the Jamaica Civil Service Association 5K Run/Walk which was held on November 17, 2018.

Labour Day 2018 Ascot Primary School: It was a Labour Day of love when FHC Team Members came together to spruce up Ascot Primary School on May 23, 2018. The team and teachers from the school posed after a successful day of painting, cleaning and beautifying the grounds.

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Team Member Engagement: Team Members forming “FHC” as part of a team building exercise held at Struan Castle.

FHC Interest First Deposit Savings Campaign Winners: (L-R) Mrs. Carleen James-Dormer, Mrs. Sheila Mundle-Berrick and Mr. Carlton Payne who all won airline tickets.

Labour Day 2018 Jebb Basic School: A sea of red at Jebb Basic School… FHC Team Members came together for a final group shot after a hard day’s work on Labour Day 2018 at Jebb Memorial Basic School where they painted the play area, the exterior of the school building and beautification of the school grounds.

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Scholarship Awards 2018: The FHC Foundation awarded seventeen (17) students with scholarships, bursaries and grants in 2018. The awardees were joined by motivational speaker, Ms. Dainalyn Swaby (left) 2017 Miss Jamaica Festival Queen; Ms. Claudette Christie, (second left) Manager-Communications & Advocacy, JCCUL; Mr. O’Neil W. Grant, (at back) FHC Foundation, Chairman and FHCCU 1st Vice Chairman; Mrs. Leodis Douglas, (eight from right) FHC Foundation, Director and FHCCU- Board Secretary; Ms. Roxann Linton (fourth from right) CEO, First Heritage Co-operative Credit Union and Ms. René Gayle (right) FHC Foundation, Secretary.

Sophie’s Place Donation: As a part of Civil Service Week 2018 celebrations, First Heritage Co-operative Credit Union participated in a joint donation exercise with the Ministry of Finance & Public Service through the Civil Service Steering Committee for the presentation of a $350,000 donation to Sophie’s Place, a member of the Mustard Seed Communities located in Gordon Town, St. Andrew. Sharing in the moment (L-R) are Mrs. Juven Montague-Anderson, AGM, Marketing, Communications & Member Experience, FHC; Ms. Roxann Linton-Chief Executive Officer-FHC; Miss Christine Watson, Acting Administrator, Sophie’s Place; Miss Carlene Coley, Senior Marketing Officer-FHC and Mrs. Saint Beverley Tomlinson, AGM, Retail Sales and Service, FHC. 186

JAMAICA CO-OPERATIVE CREDIT UNION LEAGUE LTD.

2018 CONVENTION & 77th ANNUAL GENERAL MEETING Held MAY 17-20, 2018 HIGHLIGHTS _________________________________________________________ The Convention & legally constituted 77th Annual General Meeting of the Jamaica Co-operative Credit Union League was held from May 17-20, 2018 at the Hilton Rose Hall Hotel & Spa in Montego Bay. Approximately one hundred and forty (140) delegates, alternate delegates and observers attended the weekend Conference. The schedule of activities included a trade show, reception, workshops, banquet, the annual general meeting and an ecumenical service. THURSDAY, MAY 17 The following activities took place: • The Credit Union Managers’ Association Annual General Meeting. • An afternoon workshop presented by Mr. Donovan James, General Manager of DHL Jamaica who presented on “Workplace Wellness and the impact on productivity.” • Edutainment Extraordinaire - a session hosted by staff of the League to welcome participants to the Conference. FRIDAY MAY 18 Friday’s activities got off to a good start with the official opening, with guest the Honourable Bishop Conrod Peterkin, Custos of St. James, officially opening the conference which later segued into the plenary session. Matters of critical importance to the Movement’s future were discussed.

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The two workshops held on Friday afternoon were titled: • “Competing in the new IFRS9 Environment and “Facing the Reality of a new Paradigm.” It was the second year that focus was given to the issues surrounding the IFRS 9. • “Risk Here, Risk There, Risk Everywhere: Get in the Know: Manage your Risks.” Three presenters brought home the issues and helped the participants to dissect various risks. Presenters were Ms. Stephanie Williams, Attorney At Law from Henlin Gibson Henlin, Attorneys at Law; who opened the issues relating to the Data Protection Act; Mr. Robert Finzi Smith, Security Expert, and Former Army Officer who dealt with the issue of personal safety and Sgt. Kevin Watson, Digital Forensic Examiner and Cybersecurity Specialist and Cybercrimes Investigator who delved into the topic” The War on Cybercrimes.” The annual awards dinner ended Friday’s activities. Guest speaker at this event was The Hon. Audley Shaw Minister of Industry, Commerce, Agriculture & Fisheries. Master of Ceremonies was Mr. Dervan Malcolm, radio broadcaster. Several awards were presented at the events as follows: Awards Mega (Assets > $2 Billion) Winner

First Regional Credit Union

C&WJ Credit Union

Runner Up

Large (Assets > $1 Billion - $2Billion)

Winner

JDF Credit Union

Runner Up

Palisadoes Credit Union

Medium-sized (Assets > $300M to $1B)

Winner

Grace Credit Union 188

Runner Up Small ( Assets < $300M )

Postal Credit Union

Winner

BJ Staff Credit Union

Runner Up

PWD Credit Union

Other Credit Unions that won prizes were: • • •

NCB Employees Credit union – Highest Asset Growth JDF Credit Union - Highest Solvency Portland Credit Union – Highest Net Capital Growth

Parish Credit Unions won the following:

• • •

For highest net loan growth -Portland Credit Union Highest Return on Assets – First Regional Credit Union Most Outstanding Parish Credit Union – First Regional Credit Union

Other prizes: CPD Online Top Performing Credit Union- Insurance Employees Credit Union CPD Online Top Performing Credit Union- (Runner up) FHC Credit Union CPD Online Top User – Alicia Hart – Insurance Employees Credit Union Service Quality Award Winner – NCB Employees Credit union Service Quality Award Runner-up – JDF Credit union ANNUAL GENERAL MEETING The 77th Annual General Meeting was held on May 27, 2018. Delegates from twenty-five (25) Credit Unions attended the meeting. President Mr. Winston Fletcher, chaired the meeting. He welcomed the participants and then gave a summary of the Board report for the year 2017. All other reports including that from the Treasurer, the Supervisory and Nominating Committees, as well as the audited financial statements were presented.

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Distribution of Surplus There was no surplus for distribution and the Treasurer explained this to the participants. Delegates voted for the maximum liability of the League to be set at $5 billion. ELECTION OF OFFICERS The Meeting voted to accept the nominations for the following persons to serve on the Board of JCCUL. • Mr. Norris Gilbert- PWD Credit Union • Mr. Anthony Young- Palisadoes Credit Union • Mr. Clide Nesbeth – EduCom Credit Union • Mr. O’Neil W. Grant - FHC Credit Union • Mr. Lambert Johnson –Gateway Credit Union • Mr. Ryan Muir – Lascelles Credit Union For the Supervisory Committee the following persons were elected: • • • • •

Mrs. Tamara Baugh-Brissett – EduCom Credit Union Mr. Michael Sutherland –C&WJ Credit Union Mrs. Ivy Lawrence- Lascelles Credit Union Ms. Nicola Reid –Palisadoes Credit Union Mr. Delroy James- FHC Credit Union

RESOLUTIONS Seven (7) congratulatory resolutions were passed at the meeting as follows: Palisadoes Credit Union – 65 years PWD Credit Union-70 years Public Sector Employees Credit Union-60 years Trelawny Credit Union-50 years Correctional Services Credit Union -60 years Lascelles Credit Union – 50 years

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RULE CHANGES There were no rule changes. Following the AGM the Executives were elected to serve on the League Board for the 2018-2019 year: • • • • • • • • • • • • • • •

Winston Fletcher - President Clide Nesbeth – 1st Vice President Lambert Johnson – 2nd Vice President Andrea Messam – Treasurer Jerry Hamilton - Assistant Treasurer Norris Gilbert – Secretary Patrick Smith Martin Blackwood O’Neil W. Grant Anthony Young Michael Anglin Carol Anglin Brenda Cuthbert Pete Smith Ryan Muir

A themed party sponsored by CUNA Caribbean Jamaica closed the activities on Saturday. The conference ended officially on Sunday, May 20 with an ecumenical service.

________________ ___________________ Roxann Linton Balvin Vanriel Delegates Delegates

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Branches

Address

Branch Managers

Kingston & 8-10 Eureka Road Jacqueline Pingue- Smith St. Andrew Kingston 5 AGM - Business Development (with responsibility for the Eureka/Ripon and Lawrence Tavern Branches) Lawrence Tavern Lawrence Tavern P.O. St. Andrew 20 Dominica Drive Racquel Walker Kingston 5

10 East Avenue Kingston 4

Melissa Miller- Benjamin

St. Catherine

Lot 57 West Trade Way Portmore Town Centre

Trudian Stewart

Unit 13 Oasis Shopping Centre 6 March Pen Road Spanish Town

Sheldon Christian

Shops 8 & 9, East Side Plaza 35 East Street Old Harbour

St. Thomas

26 Queens Street Morant Bay, St. Thomas

Jason Ferguson

Clarendon

Shops 5 & 6 Bargain Village Plaza May Pen

Norman Williams

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Manchester

2 Perth Road Mandeville

Sharna Hutchinson-Scott (Acting Manager)

St. James

21 Union Street Montego Bay

Marcia Bailey

FHC Investments Limited Kingston

20 Dominica Drive Kingston 5

Garfield Pearson Senior Manager - Accounting & Treasury Sophia Harvey Manager - Human Resource Development Rosemarie Samuels Manager - Training and Development Kadian Dyke Manager â&#x20AC;&#x201C; Micro & Small Business Loans Unit Alleesa Matherson Manager - Centralized Loans Unit Delano Walters Manager-Information Systems Choy Miller Manager - Member Care Centre Nadine Dyer Acting Manager â&#x20AC;&#x201C; Risk and Compliance

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Nielson Rose

1. ORDER OF BUSINESS An agenda shall be prepared by the Chairman and Secretary, and all items. Thereon shall take precedence over all other business. Any member desirous of introducing business for the consideration of the meeting may do so after the business on the agenda has completed, or may give notice of motion to be discussed at a further meeting. 2. SUSPENSION OF STANDING ORDER In the event of any matter of urgency, however, the Chairman may accept a suspension of the Standing Orders. The member moving such suspension must clearly state the nature and urgency of his business, the numbers of the standing orders affected, and the length of time he desires such suspension to last. At the option of the meeting, a further extension may be allowed, but no suspension shall take place except by majority vote of the members present. 3. MINUTES No motion or discussion shall be allowed on the Minutes except in regard to their accuracy. After the confirmation of the Minutes, they shall be signed by the Chairman, and the members shall than be at liberty to ask any questions in regard to matters arising out of them. Such questions shall be allowed for purposes of information only, and no debate on the policy outlined in the Minutes shall take place. 4. All persons desiring the floor shall rise and address themselves to the chair. They shall state their name and the Credit Union which they represent, if recognized by the chair, they shall have the privilege of the floor and all the rights thereof. 5. All speakers are to make use of the Desk and Floor Microphones when addressing the Meeting in order that it be recorded and made a permanent record in the Meeting Proceedings. 6. Should two or more persons rise at the same time, the chair shall decide, without debate, who is entitled to the floor.

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7. SPEECHES No member shall be allowed to speak more than once upon on any motion before the meeting, unless in Committee, or on a point of order, or explanation, except the mover of the Original Motion. But on an amendment being moved, any member even though he has spoken on a Original Motion, may speak again on the amendment. No member shall speak for more than five minutes at a time. Members wishing to raise points of order or explanation must first obtain the permission of the Chairman and must raise immediately the alleged breach has occurred. Any member may formally second any motion or amendment and reserve his speech until a later period in the debate. 8. No person shall interrupt another who is speaking except on a point of order, a parliamentary inquiry, or a point of information. 9. If it should come to pass that a speaker is called to order while speaking, the speaker should take his seat until the question of order is determined. 10. CHAIRMANâ&#x20AC;&#x2122;S RULING The ruling of the Chairman on any question under the Standing Orders, or on points of order or explanation, shall be final, unless challenged by not less than four members, and unless two-thirds of the members present vote to the contrary. 11. INTERRUPTION If any member interrupts another while addressing the meeting, or uses abusive or profane language or causes disturbance at any of the meetings, and refuses to obey the Chairman when called to order, he shall be named by the Chairman. He shall thereupon be expelled from the room and shall not be allowed to enter again until an apology satisfactory to the meeting be given. 12. A question shall not be subject to debate until it has been duly moved and seconded and is stated from the chair. 13. MOTIONS AND AMENDMENTS The first proposition on any particular subject shall be known as the Original Motion, and all succeeding propositions on that subject shall be called amendments. Every motion or amendment must be moved and seconded by members actually present at the meeting before they can be discussed, and, wherever possible, should be set forth in writing. It is permissible for a member to make his speech first and conclude with a motion. When an amendment is moved to an Original Motion, no further amendment shall be discussed until the first amendment is disposed of (Notice of 195

any further amendment must be given before the first amendment is put to the vote). 14. SUBSTANTIVE MOTIONS If an amendment be carried, it displaces the Original Motion and itself becomes the substantive motion, whereupon any further amendment relating to any portion of the substantive motion may be moved, provided it is consistent with the business and has not been covered by an amendment or motion which has been previously rejected. After the vote on each succeeding amendment has been taken, the surviving proposition shall be put to the vote as the main question, and if carried shall then become a resolution of the meeting. 15. RIGHT OF REPLY The mover of the Original Motion shall if no amendment be moved, have the right of reply at the close of the debate upon such motion. When an amendment is moved he shall be entitled to speak thereon in accordance with Standing Order No. 8 and at the close of the debate on such amendment shall reply to the discussion, but shall introduce no new matter. The question shall then be put to the vote immediately, and under no circumstances shall any further discussion be allowed once the question has been put from the Chair. The mover of an amendment shall not be entitled to reply. 16. WITHDRAWALS OR ADDITIONS No motion or amendment which has been accepted by the Chair shall be withdrawn without the majority vote of the meeting. Neither shall any addendum or rider be added to a motion which has once been accepted by the Chair without majority vote. Should any member dissent, the addendum must be proposed and seconded, and treated as an ordinary amendment. 17. CLOSING DEBATE The motions for the previous question, next business, or the closure, may be moved and seconded only by members who have not previously spoken at any time during the debate. No speeches shall be allowed on such motions. In the event of the closure being carried, the mover of the Original Motion shall have the right to reply in accordance with Standing Order No.16 before the question is put. Should any one of the motions mentioned in this Standing Order be defeated, thirty minutes shall elapse before it can be accepted again by the Chairman, unless he is of the opinion that the circumstances have materially altered in the meantime.

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

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Magdalene Winston Ivis Oneil Linton Darrel Leonard Elizabeth Jean Lenroy Karl Moreen Clive Kann Patrine Helene Evaddney Lloyd Shawnanekia Camelia Angella Rediverse Iris Hyacinth Loretta Don Sonia Elmay Juliet Ivan Claudette Ashton Michael Jeffrey Fay James Winston Madeline Roy

Thompson Walters Lawson Beckford Johnson Brown Brown Taffee Martin Smith Maye Chinkoo Lawrence Haughton Stephens Simpson Morrison Newell Hall Mills Dunkley Johnson Thompson Spadling Murray White Jackson Dennis Anderson Maithland McPherson Miller Campbell Doyley Brown Grant Croney Richards Morris

Luckessie Williams Nelson Morris Icema Headley Daphne Gittens Paulette Stanley-Treasure Althea Cargill Hillary Allen Lloyd Chambers Laurel Matthews Nerissa Green Hopeton Newell Verona Thaxter Beverly Smith-Duffus Daniel Barnes Casmine Briscoe Leroy Page Beverly Gordon Ewart Mills Vincent Richards Mervis Saunders Ricardo Portuondo Daphney Johnson Baldwin McLeish Shirley Morris-Williams Hanna Grey-Edwards Barbara Waite Lawrence Bogle Sylvia Popkin Muriel Thomas Carmen Bell Madge Simms Victor Webb Charles Estick Dereck Johnson Gladstone Brown Auslyn Simpson Alton Brown Kelvin Coley Shelly-Ann Smith 198

Janice Lindsay Beverley Graham-Harris Marilyn Swack-Kinlock Veronica Ferguson Lydia Anderson Patricia Collard Dorothy Henry Rohan Smith Nora Williams James Pellington Sonia Jones Leroy Hall Lorna Farquharson Joy Ricketts Pearline Gavin Irvin Jarrett Pearline Patterson Errol Williams Ruby Williams Linnet Sadler-Cunning Ronald Braham Garfield Hewitt Pete Carter Stacey Grapine Mortimore Gayle Orion Mais Eugenie Gowe Anthony Cresser George Roberts Ical Smith Michael Smith Beryl Edwards Linford Changur Valin Green Glenford Brown Zechariah Shirley Walcer Bennett Julley Bailey Ransford Matthews

Raphael Francis Yvonne Davis Odesious Medley Fitzroy Dayle Cynthia Brown Bobsylyn Sterling Muriel Jarrett Lestin Lofters Wilson Girvis Dexter Foreman Melvin Ellington Gerald Newsome Delroy Harris Sibthorpe Clarke Donald Chen Atkinson Marjanice Hardley Henry Pauline Reid Maxine Muir Kathleen Oâ&#x20AC;&#x2122;connor -Givans Carol Haase Charles Walker Icilda Minott Derrick Leslie Milicent Mitchell Gertrude Robinson Daniel Falconer Satira Anderson Bernice Taylor Avery Wilson Rayon Scott Beryl McGregor Lorna Gregory Leslie Smith Colin Kennedy Lennie Blair Lanza Turner-Bowen

199

Lord, make me an instrument of thy peace. Where there is hatred, let me sow love; Where there is injury, pardon; Where there is doubt, faith; Where there is despair, hope; Where there is darkness, light; and Where there is sadness, joy. O Divine Master, grant that I may not So much seek to be consoled as to console; To be understood as to understand; To be loved as to love. For it is in giving that we receive; It is in pardoning that we are pardoned; And it is in dying that we are born to eternal life. Amen

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