FHC 2014 Annual Report by TMC Digital

ANNUAL REPORT 2014

Table of Contents Page Vision and Mission Statement

Notice of Annual General Meeting and Agenda

Profile - First Heritage Co-operative Credit Union Limited

Life Charter - Products & Services

Minutes of the 2nd Annual General Meeting

Minutes of Special General Meeting

Board of Directors

Report of the Board of Directors

Management Report

FHC Investments Limited

“Our People” Blast Off

Scholarship Awardees

Report of the Treasurer

FINANCIAL STATEMENT

Corporate Social Responsibility

142

Report of the Supervisory Committee

144

Report of the Credit Committee

148

Report of the Nominating Committee

151

Report of the Delegates on JCCUL’s AGM

154

Unit Managers, Branches & Branch Managers

158

Parliamentary Rules of Order

160

Obituaries

163

Prayer of St. Francis of Assisi

164

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Notice of Meeting Notice is hereby given that the 3rd Annual General Meeting of the First Heritage Co-operative Credit Union Limited will be held on Tuesday, May 12, 2015 at the Jamaica Conference Centre, 14-20 Port Royal Street, Kingston beginning at 3:00p.m. Registration commences at 2:00p.m. All Members are invited.

Edmund Jones Secretary, Board of Directors

Agenda Ascertainment of Quorum Call to Order and Prayer Chairman’s Opening Remarks and Obituaries Reading and Confirmation of the Minutes of the Annual General Meeting held on Tuesday, May 13, 2014 Reading and Confirmation of the Minutes of the Special General Meeting held on December 29, 2014 REPORTS • Board of Directors • Management • Treasurer and Auditor – Distribution of Surplus • Supervisory Committee • Credit Committee ELECTIONS • Nominating Committee Report Elections to: – Board of Directors – Supervisory Committee – Credit Committee Any Other Business Vote of Thanks Adjournment FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Profile

First Heritage Co-operative Credit Union Limited

irst Heritage Co-operative Credit Union Limited (FHC) was formed on August 1st, 2012 from the merger of GSB Co-operative Credit Union Limited and Churches Cooperative Credit Union Limited and now stands at an asset base of $8.8B.

FHC’s bond includes: a) All members of any religious bodies and affiliations in Jamaica and their families/ b)

c) d)

e) f) g) h)

relatives; 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; all Professionals, their families/relatives and their employees and their families/ relatives; all members of Professional Associations affiliated to the Public Sector, their families/relatives and the employees of these Professional Associations and their families/relatives; all Public Sector Consultants and their families/relatives; all Public Sector Contractors and their families/relatives; employees, past and present, of the Credit Union and their families/relatives; all Registered Co-operative Societies and members of these Societies.

The Credit Union has a membership base of just over 191,000 across a network of eleven (11) locations strategically located across the Island, offering a suite of thirty-nine (39) products and services. Our extensive array of products and services include a variety of loans and savings, investment options from our subsidiary, FHC Investments Limited (FHCIL), Retirement Planning Scheme (Pension Gold) and Micro and Small Business loan financing. Our products and services are specifically designed to meet the needs of members at every stage of their lives.

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

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Products Equities (local and foreign) Bonds (local and foreign) Mutual Funds Corporate Commercial Paper Money Market Instruments

Services Portfolio Management Investment Advisory Retirement Planning The investment company has products and services for the conservative investors as well as those with a greater risk appetite, some of which are offered in both foreign and local currency. FHCIL is also the Investment Manager and Administrator of the Credit Union’s Retirement Scheme. The company’s total funds under management currently stand at $2.1B.

Retirement Planning Scheme The Churches Co-operative Credit Union Retirement Scheme referred to as “the Scheme” was established by former 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. Since August 1, 2012, FHCIL has been the Administrator and Investment Manager of the Scheme. Between December 2012 and December 2014, the Gross Value grew by over 45% from approximately $339M to $494M with membership as at December 2014 year end totaling in excess of 4,150 individuals including 51 Pensioners. The strategic objective of the Scheme is to ensure that more Jamaicans who are self-employed in non-pensionable posts have a retirement plan to which they are consistently contributing thus safeguarding their retirement.

Micro and Small Business Financing FHC’s Micro and Small Business Loan outfit reflects a renewed commitment on the part of the Credit Union to foster the growth of entrepreneurship in Jamaica as a major driver of the economy. It also reflects the decision of FHC to widen the scope of its services and diversify its product range in a formal and definite way 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 and since then, this Unit has disbursed over 6000 loans to members totaling over $400M. It currently has a portfolio of approximately $290M. It is FHC’s strong belief that a strategy embodied by the spirit of entrepreneurship is vital for the stimulation of our economy. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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The Credit Unionâ&#x20AC;&#x2122;s Micro and Small Business units are located in Kingston, May Pen, Montego Bay, Mandeville and Spanish Town. The unit is a member of the Caribbean Micro Finance Alliance which acts as a catalyst for the development of Micro finance in the Caribbean. The unit was recognized worldwide as a finalist in the Caribbean Micro Finance Competition in 2012 for its impact in Jamaica. Jamaicans have a rich entrepreneurial spirit and FHC is the home for financing these opportunities. FHC aims to be a financial institution with diversified products and services to meet the needs of valued members at every stage of life. The Credit Unionâ&#x20AC;&#x2122;s commitment remains, to generate continual benefits to our valued members and other stakeholders.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Life Charter - Products & Services

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Minutes of the 2nd Annual General Meeting MINUTES OF MEETING FOR 2nd ANNUAL GENERAL MEETING OF THE FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED HELD ON TUESDAY, MAY 13, 2014 AT THE JAMAICA CONFERENCE CENTRE, 14-20 PORT ROYAL STREET, KINGSTON

1. Ascertainment of Quorum & Call to Order The Secretary of the Board of Directors, Mr. Edmund Jones, confirmed that at 3:00p.m there were three hundred and ninety one (391) members registered. He convened the meeting with the reading of the notice, and then handed over to the Chairman. The Chairman, Mr. Orville Hill, welcomed everyone present to the Annual General Meeting (AGM) and invited Revd. Major Garnett Kildare to pray for the meeting’s proceedings.

2. Invocation Revd. Major Kildare invited members to join in the singing of the chorus “Bind Us Together” after which he prayed and then invited the meeting to recite the prayer of St. Francis of Assissi. Mrs. Tanesha Thompson then led the meeting in the singing of the National Anthem.

3. Welcome and Opening Remarks The Chairman again extended a warm welcome to members and advised the meeting of the context within which the meeting would be held. He emphasized the year’s theme of refocusing on the promise to achieve pre-determined goals and to chart a path towards achieving same. He advised the members that the Parliamentary Rules within the Annual Report would be used to guide the meeting’s proceedings. The Chairman then introduced the volunteers and management on the podium: Mr. O’Neil Grant, 2nd Vice Chairman; Mrs. Leodis Douglas, 1st Vice Chairman; Mr. Robin Levy, Treasurer; Mr. Edmund Jones, Board Secretary; Mrs. Beverly Stewart, Assistant Secretary; Mr. Balvin Vanriel, Board Director and Mr. Basil Naar, CEO of First Heritage Co-operative Credit Union (FHC). Mr. Hill then introduced the other volunteers and members of Management in the room: Mrs. Asre Stewart-Blake, Chairperson for the Supervisory Committee; Mrs. Beverley Williamson, Supervisory Committee; Mr. Richard Ranger, Credit Committee; Mr. Quinton Masters, FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Credit Committee; Mrs. Maria Morrison, GM Strategy and Corporate Affairs; Ms. Janyce Robinson, GM Credit Administration and Loan Risk; Mrs. Maxine Little-Dixon, GM Finance and Treasury; Miss Maxien Davis, GM Customer Service and Sales; Mr. Quilston Harrison, GM Operations, Risk, and Information Systems and Facilities; Mrs. Jillian Gayle, GM Human Resource Development and Mr. Patrick Burke, GM FHC Investments Limited; Mr. Norman Thompson, AGM for Retail Delivery and Mrs. Jacqueline PingueSmith, AGM for Sales and Wealth Development. The Chairman welcomed special guests: Ms. Vera Lindo, from the Jamaica Co-operative Credit Union League (the League), Mr. Johnathan Brown, former FHC Director and former President of the League, Mrs. Vanessa Porter-Allen, from the Department of Co-operatives and Friendly Societies (DCFS), and Mr. Nigel Chambers and Ms. Stacy-Ann Carter form the Auditing firm of KPMG.

4. Apologies for Absence Apologies for absence were given for Directors Mr. Mark Gonzales and Dr. Leo-Paul Powell, Credit Committee members Mrs. Louella Maloney and Mrs. Marilyn Dunbar, Supervisory Committee members Mrs. Hope Ramsey-Stewart and Mrs. Sharon Crooks, Mrs. Susan Thompson from the League and credit union stalwart, Revd. Oswald Thorbourne.

5. Apologies for Lateness

Apologies for lateness were given for Mrs. Tamara Francis Riley-Dunn, Board Director, Mr. Kevin Forbes, Assistant Treasurer, Mr. Dwight Sibbles member of the Supervisory Committee and Credit Committee Chairman, Mr. Noel Francis. The Chairman invited the meeting to observe a minute’s silence for members who had passed on during the year. The Chairman then asked Mr. Edmund Jones to read the minutes of the 1st AGM.

6. Reading & Correction of the Minutes of the AGM Mr. Jones asked for a motion to accept the minutes as read. This motion was moved by Revd. Major Kildare and seconded by Mrs. Yvonne Soares. In terms of corrections, Mr. Johnathan Brown noted in the minutes, the omission of a mention for Board members who were present. This was accepted and agreed by Mr. Jones to be included in the next Annual Report. Revd. Major Kildare pointed out that his title was incorrectly abbreviated and requested that the title Reverend be abbreviated Revd. when making references to him. Mr. Jones pointed out an error on page 20 under the heading Maximum Liability, in the first line. He stated that the percentage sign should be removed and be replaced with ‘times the total of ’, so that the sentence reads, ‘The Treasurer proposed that the Maximum Liability be fixed at ten times the total of Permanent Shares and reserves’. There being no further amendments, a motion to accept the minutes as corrected was moved by Revd. Major Kildare and seconded by Ms.Yvonne Soares. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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7. Reading & Correction of the Minutes of the Special General Meeting (SGM) Mr. Jones asked for a motion that the minutes of the Special General Meeting be taken as read and this was moved by Mr. Michael Burke and seconded by Mr. Earl White. In terms of corrections, Mr. Burke queried the wording of Rule 19 and sought clarification on the actual decision that was taken regarding the rule. Mr. Jones noted that, despite what was in the minutes, the rule book had the correct version of Rule 19. Mr. Burke also corrected the spelling of his name. Mrs. Cynthia Bowman-Gray also corrected the spelling of her name in the minutes, making a further point that her name was also incorrectly spelt on her account. Mr. Jones noted the change and encouraged her to correct the error of her name within the Branch as soon as possible. There being no other amendments, a motion to accept the corrected Special General Meeting Minutes was moved by Revd. Major Kildare and seconded by Ms. Jullete DaCosta. The podium was handed back to the Chairman, who asked whether there were any other questions or clarification regarding the minutes of the 1st AGM or the Special General Meeting. A.N. Harris Esq. pointed out that the word “merger” on page 11 should have been more specific as to which merger the reference was made. This point was taken by the Chairman. Mrs. Althea Daley enquired about fee adjustments, a change in age limit from 16 years old and if IDs were still required. The Chairman indicated that the management had done a thorough review of the fee structure and made several amendments to same. Mrs. Maria Morrison advised that the age limit for a child was amended from age 16 years to 17 years old. Mr. Johnathan Brown referred to Mr. Perryn Smith’s comment that a portion of the fees collected by the Credit Union was for the government and not income for the Credit Union, and asked if this were true and the basis on which it was stated. The Chairman asked Miss. Janyce Robinson to explain. She gave the example of the registration of charges under the Security Interest in Personal Property Act, stating that a fee has to be paid to the government. This explanation was accepted by Mr. Brown. Mr. Gardener commended the team on the quality of minutes for the AGM and SGM and congratulated the Credit Union on a job well done. Mrs. Cynthia Bowman-Gray suggested that an ATM machine be installed at the Lawrence Tavern Branch. She also stated that at times the card would malfunction. The Chairman acknowledged the concerns and advised Mrs. Bowman-Gray that the matter of installing an ATM machine at the Lawrence Tavern branch will be considered based on the viability of the decision. A.N. Harris Esq. noted that a suggestion had been made for the membership to give Mr. Naar a gift and get well card and queried if this had been done and, if so, who represented the membership. The Chairman, as well as Mr. Naar, confirmed that the gift and card were received on behalf of the members.

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The Chairman at this time asked whether there were questions in relation to the Special General Meeting. Mr. Michael Burke took this opportunity to state his pleasure in the widening of the bond of the credit union to include all registered co-operative societies and members of these societies. Additionally, he asked whether FHC was a member of Fisherman’s Co-operative. The Chairman conferred with the CEO who said that he was not aware of such membership. Mr. Burke further stated that he was developing a benevolent society that will be opento credit union members and offered to explain the details of its operations to interested persons at the end of the meeting. Mrs. Maria Stanbury pointed out the duplication of the word “branch” on page 24 which was corrected. She also requested that the Report be made available to the members prior to the date of the meeting. The Chairman advised that they were made available prior to the meeting and he was unsure of the reason she had not been able to receive a copy before the meeting.

Miss Merle Richards queried the reason for the discontinuation of the use of passbooks. The Chairman responded by saying that technology provided for a more accurate tracking of information on members’ accounts and it was also a less expensive option. He reminded the members of the online internet banking portal, I-Transact, that allowed members to access their accounts easily. At this point Mrs. Gray entered the discussion asking whether the issuing of paper receipts was prudent as against the use of passbooks. The Chairman furthered his point by reminding the meeting that the member-appointed Board and Management team were put in charge of making decisions in the best interest of the members, as such, not every matter will be appropriate for discussion at the AGM. Ms. Daley queried if statements were prepared for members and, if so, asked about the frequency. She also sought clarification on whether statements were available upon request and if so, at what cost. The Chairman, through the CEO, stated that statements were available upon request at no cost to the member. Ms. Daley also queried on page 20 whether the Credit Committee minutes were accepted as there was no indication of same in the minutes. The Chairman advised that they were. There being no other questions relating to the minutes of the AGM or the SGM, The Chairman presented a summary of the Board of Directors’ Report

8. Board of Directors’ Report The Chairman commented on the continued slide of the Jamaican dollar, the second International Monetary Fund agreement and the acceleration of legislative changes. Against this background the Chairman reported that the Group’s net surplus increased by $49.29M for 2013 and total assets as at December 2013 was $8.95B. He reported that the loan portfolio increased from $6.39B in 2012 to $6.7B which included externally funded loan facilities. In terms of total assets, Chairman stated that there was an increase of approximately 100% in 2012 over 2011 as a result of the merger and there was additional growth in 2013. Members’ deposits increased from $5.95B in 2012 to $6.17B as at December 2013. At this point, the Chairman encouraged members to make the sacrifice to continue to save despite the economic hardships that prevailed. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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The Chairman reported that the Credit Union’s capital base stood at $1.73B at the end of December 2013 placing the Credit Union in a formidable position especially in light of the new regime where credit unions will come under the purview of the Central Bank. He assured the members that the organization’s capital base is strong and solid. The Chairman explained that the FHC Foundation was a charitable organization focused on executing corporate social responsibility in the areas of youth development, education and sports. He mentioned that during the year GSAT scholarships valued over $500,000 were disbursed along with disbursements to the Renald Mason and Oswald Thorbourne Scholarships totaling $1.5M. In addition two grants of $600,000 were awarded under the Entrepreneurship Programme. The Chairman noted that the Credit Union donated $500,000 to the Bellevue Hospital to assist in the institution’s general development. The Chairman reported that FHC Investments Limited had moved to a new location at Winchester Business Centre, 15 Hope Road. In terms of their performance, he reported that for the year 2013, profit was $4.77M after tax. Assets at the end of the financial year, stood at $387.64M showing a 63% growth. The Chairman emphasized that the Credit Union, in keeping with its promise, continued to be a good corporate citizen, providing assistance to needy individuals and institutions. He assured the members that the team remains committed to continuously improve customer service delivery, exercise excellence in business acumen and help members in pursuit of their personal goals. He gave special thanks to the Department of Co-operatives and Friendly Societies, the Jamaica Co-operative Credit Union League, Auditors KPMG, CFMG Life (formerly CUNA Mutual) and especially the members. He then opened the floor for questions. Mrs. Bowman-Gray queried if there was a policy on employees wearing name tags.The Chairman asked Mrs. Jillian Gayle, General Manager, Human Resource Development to respond. Mrs. Gayle advised that it was the practice as well as part of policy. Mrs. BowmanGray stated that the members of the Lawrence Tavern Branch were most times in breach of this policy. Mrs. Gayle promised to investigate the matter and reminded her of her right to ask employees their names. Mrs. Bowman-Gray responded by saying that most times when she does, only the first name is given. Mrs. Gayle noted the concern. Mr. Allan Carter sought explanation on the process of selection for scholarships and grants. The Chairman summarized the process which was accepted by Mr. Carter. Mr. Burke commented on the poor customer relations meted out to members and implied that this was a possible reason for the reduced attendance at the AGM. He suggested that the management should review the customer relations strategy that was executed at GSB as he was aware that members spoke more highly of the GSB’s way as against the Churches’ way of doing things. In the second, he suggested that the Credit Union should consider offering the service of being an employment agency where the Credit Union would find jobs for members and in turn, members would be expected to make a monthly contribution to the Credit Union. He suggested that the Foundation could be expanded to undertake this new service. In response to Mr. Burke’s first point, the Chairman reminded him that the Credit Union was now a united body under the name First Heritage, and there no longer exists a Churches or GSB way of doing things. Mr. Burke however stressed the importance of learning from the past in order to move forward. The Chairman accepted Mr. Burke’s point and further advised FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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the meeting that the matter of improving customer relations is one of the Credit Union’s focus. Ms. Maria Stanbury stated that the time of 3:00pm for the AGM was too early for working persons and asked whether Saturday could be considered for meetings (as was the case with GSB). The point was taken for consideration.. Mr. Johnathan Brown, in re-iterating the importance of member relations, suggested that a summary on Customer Service be included in broad terms in the Board of Directors’ Report. Mr. Brown also queried whether the information that was projected on the screen during the Chairman’s presentation was in the Board of Directors Report. The Chairman advised that, although not necessarily within the Board of Directors’ Report, the information was within the Annual Report. Mr. Errol Scott congratulated the Portmore Branch for excellent customer service and the audience agreed with thunderous applause.

Mr. Ian Scarlett suggested that, in respect to the performances of the former Credit Unions, reflecting the total assets of Churches and GSB in 2011 in different colours in the Annual Report would have allowed members to differentiate between the two prior to the merger. Mr. Taylor interjected at this point by explaining that the Financial Report for 2012 represented January to July for Churches and August 1 to December 31, for the merged entity. Mr. Scarlett accepted the explanation and asked further if the Foundation was registered as a charity and enjoyed certain tax reliefs, to which the Chairman answered in the affirmative. Mr. Johnathan Brown highlighted the fact that the two sets of GSAT awards reflected different amounts and queried the reason for this. The Chairman responded by explaining that different awards were given for different institutions. Another member enquired about the process of selection for scholarships and asked whether there was continued assessment of awardees after selection. The Chairman advised that there were clear criteria that were established at the beginning of the process and that continuous assessment was done where the Credit Union tracks the performance of awardees. In relation to the Credit Union’s promise of ensuring the execution of effective corporate governance Mrs. Althea Daley asked whether there existed a corporate governance policy against which the members could hold the management accountable. She also asked about the existence of a corporate social responsibility statement or policy and requested that if either of these policies did not exist, that they be developed and inserted in the next Annual Report as well as on the organization’s website. She said that this would enable the members to hold the leadership accountable to the promise of achieving same. Both points were accepted by the Chairman. Revd. Major Kildare noted the length of tenure of Mr. Caswell Linton and questioned whether there was any official notice of his departure or retirement. He stated that Mr. Linton’s length of service for 34 years should have been highlighted among the members and they should have officially been made aware of his retirement. Revd. Kildare went on to commend specific members of the Board and Committees for their consistency in attendance at meetings. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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A.N. Harris Esq. referred to a statement on page 29 which spoke to the FHC Foundation helping to “reduce the burden on the nation’s purse” and asked whether it was the intention of the Credit Union to subsidize the Government’s role in providing education. The Chairman explained that, like other corporate citizens, the Credit Union was playing its part in assisting to develop the nation’s valuable resource, its human resource and had no intention of usurping the role of the government in this regard. He then asked whether the GSAT Scholarship awardees were members or children of members, and whether they were bonded. The Chairman explained that they were children of members and that they were not bonded. Mrs. Althea Daley then asked about the impending regulations that were to be passed and whether the credit union movement’s outstanding matters with the Bank of Jamaica had been resolved. The Chairman advised that based on negotiations between the League, Government and the Central Bank, most of the major issues have been addressed and satisfied. A motion to accept the Board of Directors’ Report was moved by Mrs.Yvonne Soares and seconded by Mrs. Sonia McFarlane. At this time the Chairman extended welcome to Mr. Barrington White from C&WJ Credit Union, Mr. Noel Francis, Chairman of the Credit Committee and Mrs. Tamara Francis RileyDunn, Director. Mrs. Sonia McFarlane attendance was specially acknowledged and she was lauded for being the first and only female President of the Credit Union to date. The meeting responded with applause. The Chairman then asked Mr. Basil Naar, CEO to present the Management’s Report.

9. The Management’s Report Mr. Naar, in his opening remarks, stated that in the face of challenging times, it was the strategy of First Heritage to position itself to be, not only the greatest credit union, but the greatest financial institution in Jamaica. He acknowledged that, although not there as yet, the Credit Union is getting there with a focused strategy. He emphasized that the Credit Union was being prepared to operate under the supervision of the Bank of Jamaica and actions were being taken to ensure that when that time comes, the Credit Union would be seen as a stellar institution. He said that the promises made by the Board and Management were to ensure that they stay focused on their objectives, a major goal being that of providing the best customer service in Jamaica. At this point, he paused to thank the members who sent letters of commendation on excellent service within the branches since last year, and commented that this was evidence that the organization was doing something right. He outlined the Credit Union’s strategic focus as follows: -

To right fit the Credit Union with the best team members,

To improve members’ experience and value,

To be at the forefront of encouraging small and micro-business enterprises,

To continue to build relationship with our members through the establishment of a Customer Services Division and a customer feedback environment and,

To expand the Individual Retirement Scheme. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Mr. Naar spoke on the numerous products and services offered by the Credit Union and explained that this was in response to members’ demands and due to the need to remain competitive among financial institutions. He mentioned the services of FHC Investments Ltd. and highlighted that this subsidiary facilitates transactions akin to any other investment institution in Jamaica. Mention was also made of the growth of the Individual Pension Fund serving currently over 5000 members and managing over $400M. In terms of the Credit Union Group’s performance, the CEO stated that net surplus was $103M which could have been more were it not for the negative impact of the NDX reducing net surplus by $13M. Mr. Naar emphasized the benefits of the FHC Foundation by stating that it would give the Credit Union latitude to use its funds to help the needy, mostly youths, in addition to giving the Credit Union the ability to attract funds from inside and outside of Jamaica to enhance the delivery process. In the area of Marketing, the CEO made mention of a number of engagements across all channels. Special mention was made of the collaboration with the Jamaica Reading Association for reading activities within 30 Primary and Preparatory schools. He stated that both management and staff volunteered their time to this cause. Additionally, he noted that a Memorandum of Understanding was signed with the Jamaica Civil Service Association with the aim of exposing civil servants to the products and services of the Credit Union.

In an effort to empower team members to be good leaders, Mr. Naar stated that the Human Resource Development Unit initiated a leadership training programme which would be sustained year after year to ensure that potential leaders are prepared in a focused manner. He mentioned that a Quality Advantage Service Excellence and Reward and Recognition Programme were developed to reward excellent performance and to encourage underperformers to improve. The CEO made mention of the newly formed Customer Service and Sales Division which focuses on answering members’ complaints and ensuring quick response turnaround time through the installation of a customer service hotline. He said that every team member was accountable to deliver excellent customer service which would be the differentiating factor between FHC and other financial institutions. Mr. Naar also stated that, as it related to products and service, his intention was to lobby for the Credit Union to be allowed to offer chequing accounts to members, once the Bank of Jamaica becomes its regulator. In relation to Information Technology (IT), the CEO reported that the merging of members’ accounts continues and should be completed by July, 2014. He mentioned that a new core banking system was expected to be installed by the first quarter of 2015 which would enable the Credit Union to effectively compete with the rest of the retail financial institutions in Jamaica. In terms of expenses, the CEO stated that efforts have been made to reduce costs such as, retrofitting the head office building with cost saving light bulbs and renovating the May Pen and New Kingston branches. He noted also that consideration was being given to the installation of solar panels to further reduce cost. In the area of Credit Administration, Mr. Naar acknowledged that there exist challenges in the management of delinquency. This he said was largely due to the challenging economic FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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environment causing members to have less disposable income to manage the payment of their loans. He assured members that the management was committed to doing everything possible to assist and urged them to talk with a representative, should they fall into financial difficulties. The CEO reported that the Retail network continued to grow deposits in spite of the economic strain. He stated that efforts to remain flexible and responsive to members were strengthened through the introduction of a mobile banking technology under the Jamaica Credit Union Electronic System, developed by the Credit Union League. He explained that this technology will enable members to use their cellphones to pay utilities and other bills. He gave commendations to the League for this advancement and further stated that FHC is currently the leader in mobile banking in the Credit Union Movement. He encouraged members to take advantage of this new way of banking. For the future, the CEO re-iterated that the promise of providing the best customer service in Jamaica remains one of FHC’s core strategic objective. He stated that because service was crucial to the success of any business, FHC was the first financial institution in Jamaica to place the purview of Customer Service under a General Manager as a specific job function. Mr. Naar paused to thank the members for their support and for considering FHC as a true alternative to the rest of the financial sector. He also thanked the auditors, KPMG, JCCUL, and the Credit Union’s liaison officers who voluntarily offer their time to promote the products of the Credit Union within their business and communities. He asked the members to give the liaison officers a standing ovation, which was done. He also thanked the Directors, members of the Supervisory and Credit Committees, who he also recognized as true volunteers. The CEO, in closing, assured the members of the security and strength of FHC and of the leadership’s resolve to offer more products and the best customer service in Jamaica. He also informed the meeting that he practiced an open door policy and invited members to utilize this opportunity to meet with him. He then opened the floor for questions. Mr. Burke, in relation to the opening hours for branches, suggested that the offices remain open until 4:00pm or 5:00pm on Fridays, as is the case with banks, and asked that it be implemented within a month’s time. Mr. Naar acknowledged this suggestion and advised that if, through analysis, there was evidence that members were requesting this, the suggestion would be implemented. Mrs. Bowman-Gray commented on below par customer service in the Credit Department, Teller area and the 24-hour Customer service hotline. Mr. Naar asked her to outline her complaints in a memorandum to him and he assured her that he and the General Manager for Customer Service, Miss Maxien Davis, would address each concern. She then asked about members having access to bathrooms at branches and cited a situation where she was not allowed to use same. Mr. Naar asked her to also include details of this matter within her memorandum. Mr. Eric Heslop asked about the tool used for measuring customer service within branches. Miss Maxien Davis was asked to respond. She said that service standards were established and posted in all locations and members are encouraged to hold the Credit Union accountable whenever the standards are not met. In addition, she said, a Member Feedback Hotline was installed and customer satisfaction surveys were done periodically not only to determine FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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service levels but also to inform necessary amendments to policies and procedures. She also said that a customer service measurement tools were used to monitor team members’ service delivery to both internal and external members on a daily basis. A. N. Harris Esq. asked if there was consideration for opening on Saturdays for at least half of the day in light of the impending flexi week regime. Mr. Naar advised that if the members demanded it, the matter will be considered. He also asked whether the Credit Union was compliant with reporting requirements under the Proceeds of Crime Act (POCA). Mr. Naar responded that the Credit Union was compliant. Ms. Pete-Ann Gray shared her grouse about the length of time it took for the Credit Union to lodge salary deductions to her account, even after it was proven that the organization received her funds on time. Mr. Naar apologized for the inconvenience and requested that she speak with the Manager of the Kingston Gardens Branch or the General Manager for Customer Service. Revd. Major Kildare asked whether the online Centre for Professional Development courses was open to regular members. Mr. Naar through Mrs. Gayle, General Manager Human Resource Development, stated that a decision would have to be taken to accommodate this, because presently, the courses were open to only staff and volunteers. Mrs. Stanbury asked that those in charge of the hospitality arrangements for the AGM be mindful of vegetarians. Mr. Naar acknowledged this request and reassured her that for the next meeting, vegetarians would be considered in the refreshment arrangements.

Mr. Rupert Brown mentioned that, in light of the complaints of the early closing time of branches, he wished to commend the Credit Union for instituting an earlier opening hour of 7:30a.m. This, he said, enabled him to do business in an extremely short turnaround time and for that he was appreciative. A member, whose name was not given, asked the reason for the absence of the Annual Pensions Report. Mr. Naar noted the concern and advised the member to speak directly with the GM for FHC Investments Limited, Mr. Patrick Burke on the matter. Mr. White, with the aim of strengthening the Credit Union’s security, offered his service in security consultancy, to which Mr. Naar responded positively and asked him to submit his resume for consideration. Mr. Patrick Fuller asked if steps had been taken to mitigate the effects of a possible third debt exchange and he suggested that the institution should reconsider the extent of their investment in government paper. Mr. Naar reminded Mr. Fuller that investing in instruments issued by GOJ and MOF is necessary for liquidity purposes. He assured the members however, that, even though the Credit Union’s investments are largely in Jamaica, every effort will be made to manage the effects of a possible third debt exchange, should there be one. A member queried the policies of the health insurance provider, Sagicor. She explained that the policy of paying cash up front to claim back is onerous. The CEO sympathetically acknowledged her plight, but advised that the Credit Union’s hands were tied in relation to this policy. He outlined that the health insurance providers in Jamaica consider the arrangement costly and has therefore developed policies to ensure their profitability. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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He, however, stated that he had suggested to the League to develop a Health Insurance Cooperative, but for now, Sagicor’s policies remain. There being no other questions, the Chairman asked for a motion to accept the Management’s Report. The motion was moved by Revd. Major Kildare and seconded by Mr. Errol Scott. Miss Michelle Grant was allowed to ask about the re-introduction of unsecured loans. The Chairman asked Miss. Janyce Robinson, General Manager for Credit Administration and loan Risk to respond. Ms. Robinson advised that unsecured loans were available with the exception of the popular, Payday Loans. Mr. Naar at this time thanked the members for their prayers and support and assured all of his commitment, along with the management team, to continue to serve unswervingly. The Chairman thanked Mr. Naar for his presentation and paused to welcome Mr. Kevin Forbes Director and Mr. Errol Gallimore, Registrar of the Department of Co-operatives and Friendly Societies. He then invited Mr. Robin Levy, Treasurer to present the Auditor and Treasurer’s Report.

10. Auditor and Treasurer’s Report The Treasurer directed the members’ attention to the Treasurer’s Report in the Annual Report on pages 53 to 55, and asked for a motion that it be taken as read. This motion was moved by Mr. Clarence Irving and seconded by Mrs. Althea Daley. The Treasurer then asked Mr. Nigel Chambers, partner of KPMG in charge of the audit, and Audit Manager, Ms. StacyAnn Carter to stand and be acknowledged. He then asked Mr. Chambers to present the Auditor’s Report. Mr. Chambers stated that separate audits were done on the financial statements of First Heritage Co-operative Credit Union Limited and the consolidated financial statements of the Credit Union and its subsidiary. He explained the management’s responsibility to be that of preparing financial statements that give a true and fair picture in accordance with International Financial Reporting Standards and the Co-operative Societies Act. He also outlined the Auditor’s responsibility as that of expressing an opinion on the financial statements based on the findings of the audit. Mr. Chambers stated that the audit was conducted in accordance with International Audit Standards and was performed in a manner that would give reasonable assurance that the financial statements were free from material mis-statements. He outlined the auditing process and stated that, in the Auditor’s opinion, the financial statements gave a true and fair view of the financial position of the Group and the Credit Union as at December 31, 2013 is in accordance with International Financial Reporting Standards. In relation to additional requirements under the Co-operative Societies Act, Mr. Chambers stated that in KPMG’s opinion, proper accounting records were maintained and the financial statements were correct, duly vouched and in accordance with the provisions of the Co-operative Societies Act. The Treasurer thanked Mr. Chambers for the report given and proceeded to present the Treasurer’s report. He started by explaining the changes that took place over the year. He mentioned the change of the Auditing firm from Pricewaterhousecoopers to KPMG. He also stated that the Credit Union adopted International Accounting Standard 19 (IAS) which treats employee pension benefits differently. He then reminded members that the report FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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reflects the seven month’s performance of Churches Co-operative Credit Union only, while the other five months represented the merged entity, FHC. The Treasurer reported loans increased by 5.8%, total assets increased by 5.4% and shares and deposits increased by 3.7%. He reported that Institutional Capital decreased due to a post - merger treatment of Permanent Shares where monies were transferred from Permanent Shares to reserves. He assured the members however, that the Credit Union’s Institutional Capital was more than twice what was required by regulators and stood in the region of 15.5%, as opposed to the requirement of 8%. The Treasurer indicated that Accumulated Surplus increased, showing a trend of an increase of $50M year over year. In relation to FHC Investments Limited, The Treasurer reported the company was now profitable as against its non-profitable performance in the prior year. In terms of Income and Expenditure, the Treasurer reported an increase in interest on loans by 26% and interest on deposits by 33%. He stated that there was also an increase in non-interest income which was not due to fee increases to members. He explained that this was as a result of increases in fees from late payments, and service fees from Family Indemnity Plan. A significant portion of the Loan Protection and Life Savings Insurance premiums is borne by the Credit Union. The Treasurer stated that operating Expenses increased by 23% which was partially caused by a one-off payment to a retiring Manager and the standardization of benefits for all members of staff.

According to the PEARLS ratios, the Treasurer reported total delinquency at 8.74%, as compared to the recommended standard of 5% or below. He also stated that, although the Credit Union’s liquidity level improved from 9.27% at the end of the year, to the current level of 13.2% in April 2014, every effort was being made to increase the Credit Union’s liquidity to within the standard by the end of 2014. He noted that in terms of growth, the organization was below target, but was quick to point out that due to the Credit Union being a much larger entity, the achievement of significant growth would now be lesschallenging. In closing, the Treasurer emphasized that the first full year of First Heritage Credit Union was a successful one overall, despite the merger’s teething pains. He reassured the members that the Credit Union is strong, has good policies, excellent products, well trained and competent staff members, a strong membership base, and a strong capital. The Treasurer invited questions from the floor. Mr. Johnathan Brown commended the Credit Union for a good financial performance given the economic challenges. In relation to the Treasurer’s report however, he suggested that the Report be summarized on one sheet, as was done years ago. He stated that this would enable members who were not financially inclined to understand, in simpler terms, the performance of the organization. The Treasurer accepted the point and assured Mr. Brown that his suggestion would be adopted next year. Ms. Audrey Smith, Liaison Officer from Accountant General’s Department, asked the Treasurer whether the fees that were mentioned in his report referred to late fees being applied to loans for members working in government agencies. Her concern was due to timing restrictions of government salaries and queried whether late payment penalties were being applied to these loans. The Treasurer stated that the Credit Union had knowledge of this situation and assured her that these fees were not applied to those loans. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Ms. Stanbury asked for an explanation of the phrase “…Chartered Accountants, whose report dated May 31, 2013, expressed an unqualified opinion on those financial statements” on page 59. The Treasurer explained that the phrase meant that there were no challenges to the financial statements as reported. This explanation was accepted. Mr. Heslop asked for a more in-depth explanation of the increased Operating Expenses in 2013 when compared to 2012. He specifically made mention to Data Processing for the Group in 2012, noting its jump from $7.9M to $23.4M in 2013. The Treasurer handed over to General Manager Finance and Treasury, Mrs. Maxine Little-Dixon, to respond. Mrs. LittleDixon explained that these expenses were largely due to the conversion of systems related to the merger. Mr. Heslop then asked whether the Credit Union was within budget for operating expenses in 2013, to which Mrs. Little-Dixon responded in the affirmative. Mr. Ian Scarlett queried the rational for the Account Maintenance fee that was introduced in 2013 which he said was unprincipled and could not be justified. The Treasurer explained that this fee was introduced before 2013 and stressed, that while the Credit Union had revisited the fee structure and had removed or reduced many of the fees, some, like the maintenance fees had to remain in order for the Credit Union to remain viable. Mr. Scarlett offered to provide the Credit Union with a schedule to replace the maintenance fees, to which The Treasurer accepted the offer. Mrs. Bowman-Gray asked whether the Credit Union offered a facility to allow members who were overseas to send money directly to the Credit Union to pay loans. The Treasurer stated that such a facility existed. Mrs. Bowman- Gray then asked whether the Credit Union would facilitate a member taking over another member’s loan in case of one falling into financial difficulties. The Treasurer assured the member that the Credit Union would consider this and any other suggestion that would help to reduce the incidence of delinquency. Ms. Smith asked about the Credit Union’s delinquency rate of 8% in comparison with those of other financial institutions. The Treasurer invited Ms. Vera Lindo of the Credit Union League to respond. She said that delinquency rates for employee based credit unions (inhouse) ranged between 1% to 3% while credit unions of a similar size to FHC example parish credit unions fared worse with their rates being between 9% and 10%. Additionally, Miss Janyce Robinson made the point that in relation to loans that are 90 days past due, FHC’s rates are below 5% against the industry standard of 10%. There being no more questions, the Treasurer asked for a motion to accept both the Auditor’s Report and the Treasurer’s Report. Acceptance motion was moved by Mr. Johnathan Brown and seconded by Ms. Minna Skyers.

11. Distribution of Surplus and Maximum Liability allowance The Treasurer brought the meeting’s attention to the proposal for the distribution of surplus amounting to $26.86M. Mr. Johnathan Brown interjected by asking for an explanation between the two sets of GSAT awards under the Scholarship Fund. A discussion ensued between Mr. Brown and Mrs. Maria Morrison which resulted in an explanation eventually being accepted by Mr. Brown. The motion to accept the distribution of surplus as proposed was moved by Mr. Johnathan Brown which was seconded by Mrs. Althea Daley. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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The Treasurer then referred the meeting to Rule 67 to move a motion to increase the Maximum Liability from 10 to 20 times the capital of the Credit Union. The motion was moved for its acceptance by Mr. Johnathan Brown and seconded by Mrs. Althea Daley. The Chairman, noting time restrictions, asked for an amendment to the agenda to facilitate the election of officers. The motion was moved by Mr. Michael Burke and seconded by Revd. Major Kildare. The Chairman then invited Mr. Jones, Chairman of the Nominating Committee, to present the report.

12. Nominating Committee Report

The Chairman of the Nominating Committee, Mr. Edmund Jones, asked for a motion that the report had been read. The motion was moved by Mr. Michael Evans and seconded by Mr. Heslop. The Chairman named the members of the Committee as Mr. Edmund Jones, Ms. Patricia Ramsaran, a member representative and Mr. Basil Naar. He advised the meeting that the Committee had advertised for volunteers to fill vacancies on the Board of Directors, the Supervisory and Credit Committees. He explained that the terms of Mrs. Leodis Douglas, Mr. Mark Gonzales, Mr. Robin Levy, Mrs. Beverly Stewart and Mr. Balvin Vanreil had come to an end and all, except for Mr. Mark Gonzales, who had business commitments, indicated that they would be willing to serve for another term. Mr. Jones further explained that Director, Dr. Leo-Paul Powell had tendered his resignation with effect from 30th of April, 2014 to further his studies and career. The Directors retiring and those being nominated were as follows:

Board of Directors Mrs. Leodis Douglas Mr. Robin Levy Mrs. Beverly Stewart Mr. Balvin Vanriel

TENURE (YEARS) Two Two Two Two

In relation to the members of the Supervisory Committee, Mr. Jones advised that, with the exception for Mrs. Hope Ramsay-Stewart who had personal commitments, all volunteers had expressed their desire to serve for another term. The Committee received and recommended an expression of interest to serve on the Supervisory Committee from member, Mr. Desmond Gordon, who was then introduced to the meeting. Mr. Gordon is the Bursar/Supervisor at Tarrant High School and holds a Chartered Association of Business Administration Degree. He was currently completing studies for the Certified Accounting Technician course and previously served as Chairman of the Supervisory Committee of Sodality Co-operative Credit Union from 1999, until its merger with City of Kingston Cooperative Credit Union. He has been a member of FHC since 1984 and has worked with the United Church in Jamaica and Cayman Islands as well as the St. Patrickâ&#x20AC;&#x2122;s Foundation. He is a Roman Catholic Deacon and a member of the ICAJ Toastmastersâ&#x20AC;&#x2122; Club.

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Mr. Jones then reminded the meeting of the retiring and nominated Supervisory Committee members and explained that Mr. Gordon was being nominated to replace Mrs. Hope RamsayStewart. The nominated Supervisory Committee was as follows: SUPERVISORY COMMITTEE Ms. Sharon Crooks Mr. Desmond Gordon Mr. Dwight Sibblies Mrs. Asre Stewart-Blake Mrs. Beverley Williamson

TENURE (YEARS) One One One One One

Regarding the members of the Credit Committee, Mr. Jones stated that Mr. Noel Francis and Mrs. Louella Maloney would be retiring, with only Mr. Francis indicating a desire to serve for another term. He further noted that Mrs. Marilyn Dunbar who had been elected for two years had resigned and he took the opportunity to express appreciation to the retiring volunteers for the service given. Mr. Jones indicated that the Credit Committee had received and recommended from the membership, expressions of interest to serve on the Credit Committee in the form of Miss Faylene Foster and Mrs. Althea Daley. Miss Foster was introduced as being currently employed to Ministry of Labour and Social Security as the Director of Pay and Conditions of Employment Branch. She is a meticulous industrial relations practitioner with a track record of treating with industrial relations disputes and complaints. Miss Foster holds a Bachelors of Science Degree in Management and Accounting from the University of the West Indies and has completed numerous professional training courses. She previously served as a member of the Credit Committee of GSB Co-operative Credit Union Limited. Mrs. Daley was introduced as currently serving as a Consultant to the Petroleum Industrial Employees Co-operative Credit Union Limited since December 2013. She is a financial service manager with over 20 yearsâ&#x20AC;&#x2122; experience and has successfully managed the merger process of three (3) Credit Unions. Mrs. Daley was also a consultant with the Jamaica Co-operative Credit Union League Limited, was Deputy General Manager at the Montego Co-operative Credit Union Limited and served in the capacity of Manager for both Shell Employees Cooperative Credit Union Limited and Grace Co-operative Credit Union Limited. She holds a Postgraduate Diploma in Financial Services Management from the Jamaica Stock Exchange E-Campus and a Bachelor of Science in Management Studies from the University of the West Indies. The nominated Credit Committee is as follows: CREDIT COMMITTEE Mrs. Althea Daley Mr. Noel Francis Miss Faylene Foster

TENURE (YEARS) Two Two Two

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There being no other questions or comments, Mr. Jones thanked the volunteers for their willingness to serve and asked for a motion to be moved to accept the Nominating Committee Report. Mr. Michael Burke moved the motion to accept after expressing his desire to be the Credit Union’s delegate to the League. The motion was seconded by Mrs. Bowman-Gray. Mr. Jones in response to Mr. Burke’s request to be the Credit Union’s delegate stated that the Rules of the Credit Union gives the Board the right to choose a delegate to the League. Mr. Burke objected to this rule and suggested instead that, the League, the Board and members of credit unions should meet to discuss and decide on this matter. He also stated that the Rules allow for credit unions to choose any member they wish as a delegate, provided that one member comes from the Board. The Chairman reminded the meeting at this point that the Board and management were appointed by the members to make decisions such as this at the League level. Although this matter remained unsettled at this point, Mr. Jones asked for a second motion for the acceptance of the Nominating Committee’s Report which was moved by Josephine Parchment and seconded by A.N. Harris, Esq.

13. Election of Officers

The Chairman at this time asked Mr. Errol Gallimore to conduct the election of officers. Mr. Gallimore stated the names that were nominated for the Board of Directors and asked for nominations from the floor. Mr. Burke nominated Mr. Eric Heslop which was seconded by Mr. Earl White. Mr. Gallimore asked the nominees whether they would be interested in serving on the Credit or Supervisory Committee if not selected for the Board. They responded negatively. Mr. Gallimore then instructed members to add Mr. Heslop’s name to the ballot papers and to proceed with their vote. In the interest of time, Mr. Gallimore proceeded with the voting process for the Supervisory and Credit Committees. All nominees were accepted for the Supervisory Committee. The motion to accept was moved by Mr. Michael Burke and seconded by A.N. Harris Esq. In relation to the Credit Committee, Mr. Gallimore asked for other nominations from the floor. There being none, the motion to accept was moved by Mrs. Kareen Jones and seconded by Ms. Ann-Marie Lopez. The Chairman at this time revisited the matter on the process of voting for the Delegates to the League. He explained that it had always been the custom for the decision regarding the Delegates to the League to be left with the Board. He added that the practice was be to have a motion moved and seconded by members. In light of the concerns raised however, The Chairman indicated that the meeting would allow for motions to be moved to decide whether the members would decide on the 50% representation of the delegates or have the decision rest with the Board. Mr. Heslop moved a motion for the membership to decide the 50% representation of the Delegates to the League. Mr. Johnathan Brown moved a counter-motion for the Board to remain with the responsibility of that decision. This motion was seconded by Miss. Janyce Robinson by the show of hands, twenty seven (27) members voted for Mr. Heslop’s motion and thirty eight (38) members voted against it. The motion was thus defeated Mr. Brown then withdraw his countermotion. A motion to resume the Standing Order was moved by Mrs. Althea Daley and seconded by Mr. Robin Levy. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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At this time the outcome of the voting process for the Board was presented as follows: BOARD OF DIRECTORS Mrs. Leodis Douglas Mr. Robin Levy Mrs. Beverly Stewart Balvin Vanriel Mr. Eric Heslop

BALLOTS 96 98 85 90 40

So Mrs. Leodis Douglas, Mr. Robin Levy, Mrs. Beverly Stewart and Mr. Balvin Vanriel were duly elected to the Board of Directors. The Chairman thanked Mr. Gallimore for executing the election process and invited Mr. Noel Francis, Chairman of the Credit Committee, to present the Credit Committee Report.

14. Credit Committee Report Mr. Francis reported that Disbursements for the year totaled $2.9B which resulted in a 5.6% improvement in the total loan portfolio which moved from $6.3B in 2012 to $6.7B in 2013. Unsecured Motor Vehicle loans continued to be the largest category of the loan portfolio. The Credit Committee Chairman expressed gratitude to the Management, staff and members for the opportunity given to serve and he assured the members of the Committee’s commitment to provide service of the highest standard. A motion to accept the report was moved by Revd. Major Kildare and seconded by Mrs. Althea Daley. The Chairman then asked Mrs. Asre Stewart-Blake, Chairman of the Supervisory Committee, to present the Committee’s report.

15. Supervisory Committee Report Mrs. Stewart-Blake asked for a motion that the report be taken as read. This motion was moved by Mr. Kevin Forbes and seconded by Mrs. Tamara Francis Riley- Dunn. Mrs. StewartBlake then opened the floor for questions. Mr. Johnathan Brown enquired of the meaning of the phrase “outstanding matters in the hands of relevant authorities”, as stated in the report. Mrs. Stewart-Blake explained that there were incidents of fraud which for the most part, have been resolved while one still remains in the court. Mr. Harris interjected by asking whether the matter with the courts involved a staff, to which Mrs. Stewart-Blake confirmed that to be so. A motion to accept the report was moved by Josephine Parchment and seconded by Mr. Balvin Vanriel.

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16. Any Other Business The Chairman at this time thanked the Committee Chairpersons for their reports and extended a warm welcome and congratulations to the newly elected officers. At this time, he opened the floor for questions or comments. Mr. Wilson mentioned that the front desk area within Branches is inappropriate for discussing personal account-related matters and asked that the matter be addressed quickly to ensure that privacy is maintained. This point was accepted for consideration by the Chairman. A.N. Harris Esq. gave commendation to the team for being considerate in using a large font size for the Annual Report. On another point, he noted the absence of Revd. Thorbourne and asked that, if his absence was due to illness, the meeting say a prayer for his speedy recovery. A.N. Harris Esq. also asked the Chairman whether refreshment was provided for the members, especially for those who remained until the end of the meeting to maintain a quorum so that voting on the important matters of the Credit Union was achieved. The Chairman assured him that this was in place. There being no other questions or comments, the Chairman gave a prize to Ms. Josephine Parchment the most senior member who was present at the meeting at that time. He then invited Mrs. Leodis Douglas, the First Vice Chairman to offer the vote of thanks.

17. Vote of Thanks

Mrs. Leodis Douglas thanked the members for their patience in remaining to participate in the decision-making process on important matters of the Credit Union. She acknowledged and thanked the management team and staff members whose efforts ensured the Credit Unionâ&#x20AC;&#x2122;s success amidst the challenging times. She again thanked the members for their support and wished all journeying mercies.

18. Adjournment The meeting adjourned at 7:45 p.m.

Edmund Jones Secretary, Board of Directors

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Minutes of Special General Meeting FIRST HERITAGE COOPERATIVE CREDIT UNION LIMITED

MINUTES OF SPECIAL GENERAL MEETING

TO CONSIDER THE ACCEPTANCE OF ENGAGEMENT OF TRANSFER OF ST. THOMAS COOPERATIVE CREDIT UNION LIMITED (STCCU) TO FIRST HERITAGE COOPERATIVE CREDIT UNION LIMITED (FHC) HELD ON MONDAY, DECEMBER 29, 2015 AT THE HEAD OFFICE OF THE CREDIT UNION 8-10 EUREKA ROAD KINGSTON 5

Ascertainment of Quorum & Call to Order

Chairman of the Board of Directors Mr. Orville Hill called the meeting to order at 4:28 p.m. following the ascertainment of a quorum. The notice of the meeting was then read by Secretary of the Board of Directors Mr. Edmund Jones after which prayers were said by Mr. Rudolph Cox, Manager of the Eureka Branch.

Welcome and Opening Remarks

The Chairman welcomed members to the historical meeting and introduced members of the head table as well as Directors and senior management in the audience. League representatives and representatives of the Registrarâ&#x20AC;&#x2122;s Office were also recognized. The Chairman reminded members of another historic date, August 1, 2012 which formalized the merger of GSB and Churches Cooperative Credit Unions and commented on the $8.48 Billion asset base and the 185, 000 membership that merger effected.

Tabling and Discussion on the Resolution

Secretary Edmund Jones moved for the tabling of the resolution and this was seconded by Director Tamara Francis Riley-Dunn. Resolution to Accept the Transfer of Engagements of St. Thomas Co-operative Credit Union Limited to First Heritage Co-operative Credit Union Limited Whereas the Membership, at a Special General Meeting of the First Heritage Co-operative Credit Union Limited, held on February 18, 2014, agreed to Rule amendment to accept that the Board FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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of Directors shall be entitled to execute a Transfer of Engagement of a Registered Society to the Credit Union; and Whereas the members of St. Thomas Co-operative Credit Union Limited have agreed to the merger in the form of transfer of engagements of St. Thomas Co-operative Credit Union Limited to First Heritage Co-operative Credit Union Limited at an Annual General Meeting of its members held on September 6, 2014. Whereas the Co-operative Societies Act requires that a special resolution of members of each Society is necessary to effect the merger and that such a resolution has to be passed by a majority of not less than seventy five percent (75%) of members present and voting at a legally constituted meeting of the members; and Whereas the Board of Directors of First Heritage Co-operative Credit Union Limited has agreed to present such resolution to its members at this Annual General Meeting, December 29, 2014; and Whereas the Board of Directors of First Heritage Co-operative Credit Union Limited has examined the financial position and the overall operations of St. Thomas Co-operative Credit Union Limited, and has agreed that it is in the best interest of the members to secure continued and improved services with access to more diverse products and a wider range of services through a business combination. (acceptance of the Transfer of Engagement)

Whereas the Board of Directors of First Heritage Co-operative Credit Union Limited is of the opinion that St. Thomas Co-operative credit Union Limited is worthy to be transferred to First Heritage Co-operative Credit Union Limited based on its strategic direction; Be it resolved that at this Special General Meeting of the members of First Heritage Co-operative Credit Union Limited being held on December 29, 2014, agrees to accept the whole of the property and other assets and to honor the engagements of the St. Thomas Co-operative Credit Union Limited and to issue to each member of the St. Thomas Co-operative Credit Union Limited paid up shares equal to the amount standing to the credit of each member in the Share ledgers of the St. Thomas Co-operative Credit Union Limited on the date when the transfer of engagement becomes effective, provided that: 1.

The transfer of engagements will be on the terms agreed by both parties, and the Board of Directors of First Heritage Co-operative Credit Union Limited is empowered to act on the members’ behalf and will not make any decisions that are detrimental to the members.

The transfer of engagements will become effective on January 1st, 2015, 12:01 AM. or a date to be decided by the Registrar of Co-operative Societies and Friendly Societies provided that the transfer of engagement and the acceptance of the fulfillment of the said engagement is not consummated on January 1, 2015.

Mr. Michael Burke indicated that he would be prepared to support the resolution but had some concerns about the implications of FHC going into this farming community and the acceptance from members. Mr. Dwight Orgill requested information about St. Thomas’ profitability and member Josephene Parchment asked about the reasons for St. Thomas Credit Union’s losses. Veronica Blake had questions regarding job security and the implications of the merger for STCCU’s staff. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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In response to the various queries, the chairman indicated that losses were mainly caused by farming loans which went bad and accounted for the negative impact on the Credit Union. He went on to say that FHC had determined that St. Thomas could be reorganized to become profitable and contribute to the long term efficiency of FHC. In response to Veronica Blakeâ&#x20AC;&#x2122;s query regarding how the matter of staff morale and job security was being addressed, the Chairman explained that FHC has had staff in place working along with the Officers of St. Thomas and that he was comfortable that these matters were being adequately addressed. Mr. Franklin White asked the Chairman to justify the $20M profitability projected for STCCU. The Chairman explained that several areas of cost would be rationalized and STCCU would then operate as a branch of FHC and that this would effect a significant reduction in certain areas of administrative and head office costs that STCCU was now carrying. 3.

Voting on the Resolution

Following the discussion, Secretary Edmund Jones presented the resolution for acceptance by the membership. It was agreed to use the method of a show of hands and the voting was monitored by Mr. Michael David Webb from the Office of the Registrar of Credit Unions with the following results:

98 FOR: 1 AGAINST: ABSTENTIONS: 5 MEMBERS PRESENT 104

The meeting was then terminated at 5:03 p.m.

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Board of Directors Balvin Vanriel

Tamara Francis Riley-Dunn

DIRECTOR

Kevin Forbes

Beverly Stewart

ASST. TREASURER

ASST. SECRETARY

Robin Levy TREASURER

Edmund Jones SECRETARY

O’Neil Grant

2nd VICE CHAIRMAN

Leodis Douglas 1st VICE CHAIRMAN

Orville Hill CHAIRMAN

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ANNUAL REPORT 2014

Report of the Board of Directors

uring the year 2014 the Jamaican economy generated relatively weak demand despite positive growth in the last quarter of 2013. The Central Bank implemented various measures including the Enhanced Liquidity Management Framework (ELMF) to assist the economy on its growth path. The economy however restricted inflation to 6.4% for the year 2014 compared to 9.5% in 2013 giving four consecutive years of single digit inflation. The year under review (2014) benefited from the lowering of energy and transportation cost triggered by decline in international oil and grain prices combined with relatively weak domestic demand which constrained upward movement in prices. Within the financial sector the discussion on fees continued in earnest and your Credit Union conducted extensive review on our fee structure and as a result did not increase our fees. In fact some fees were reduced over the period. The enactment of regulation to bring credit unions under the regulatory control of the Central Bank was not implemented in 2014 as anticipated, however, review and discussion continued during the year between our League and the Bank of Jamaica. The Credit Union movement continues to do internal evaluation and have been using different merger methods to strengthen the movement. Banking Services Act (BSA) was enacted in July 2014. This amalgamated current statute governs the regulation and supervision of deposit taking institutions (DTI) and increase compliance with international supervisory principles. Despite these variables, FHC did not remain complacent, and with sound business practices, flexibility and proactive discipline, your organization offered improved member service and was able to maintain satisfactory financial performance during the year. Several cost saving measures were implemented across the branch network and departments. Earlier in the year, we placed a hold on unsecured loan portfolios to stay within our approved margin. Direct strategies were implemented to increase deposits, improve operational efficiencies and improve the Credit Union’s liquidity ratio. This was critical as we prepare for the Bank of Jamaica’s regulatory regime in the near future.

THE FINANCIAL PERFORMANCE Despite the challenging economic climate in which we operate our Credit Union performed creditably reporting consolidated net income of $103.9M compared to $98.8M in 2013, an increase of $5.1M or 5.2%. This was achieved despite a bearish loan market in which net loan portfolio declined marginally. Additionally, changes made to our fee structure resulted in a reduction in fees and commission income by $34.1M or 19.3% when compared to year 2013. At the end of December 2014, the Credit Union’s assets stood at $8.83B with earning assets of $7.78B or 88.1% of the portfolio. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

FHC Investment Limited Our wholly owned subsidiary, FHC Investments Ltd (FHCIL) continues to promote investment opportunities to our members and all Jamaicans. At 31st December, 2014, the portfolio under management stood at approximately $2.1B. We continue to use strategic marketing to position the subsidiary as an investment company of choice in the minds of the Jamaican public. Methods being used include media advertisements, corporate listing in the print media, online magazine, and billboards. FHCIL is now five years old and is gradually expanding its portfolios and clients. Its offerings appeal to both the savvy as well as conservative investors. The services and products offered include:-

•

Money Market Investments

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Bonds

•

Stocks

•

Mutual Funds

•

Portfolio

•

Pension Fund Management

Retirement Scheme: Our Individual Retirement Scheme, Churches Credit Union Retirement Scheme is managed and administrated by our subsidiary, FHC Investments Limited. The target market is the thousands of Jamaicans who are not employed to a company that operates an in-house pension scheme. As at December 31, 2014, the scheme had 4,186 members and as at December 31, 2014, with approximately $490M in Funds under Management. At the end of the year the scheme had a total of 51 pensioners. This scheme presents a great opportunity for our members to invest in their future and better prepare for retirement.

FHC Foundation Most of our Corporate Social Responsibility initiatives are executed through FHC Foundation and we currently support several youth initiatives including but not limited to the following:•

10 GSAT Scholarships and Grants

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Renald Mason & Oswald Thorbourne Scholarships

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Two Entrepreneur Awards

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

OUR PROMISE In an endeavour to construct benchmark standards for financial services in Jamaica, we endeavour to identify the distinction that will build member loyalty and permeate our business to improve financial performance. As such, our strategic goal is to continuously improve our customer service standards. Our promise to our members is to satisfy their needs beyond their expectations. In addition our Corporate Social Responsibility was demonstrated through a number of initiatives in 2014. • Christmas CSR Project - Poor Relief Department • Kiddy Caring Basic - Labour Day Project • Branch Projects ( Schools, Community Centres, Places of Safety, etc.)

In the months ahead we will continue to participate in a range of programmes, which provide assistance to individuals within the communities we operate. Our brand has earned its position in the market place and will remain forthright in achieving its vision and mission. We remain committed to our members as we support them in achieving their financial goals and objectives. The Board of Directors express our sincere appreciation to the following organizations and committees that provided invaluable service to us during the year:  The Registrar of Co-operatives and Friendly Societies  Jamaica Co-operative Credit Union League Ltd (JCCUL)  National Union of Co-operatives Societies Ltd (NUCS)  KPMG Chartered Accountants  FHC Supervisory Committee  FHC Credit Committee

Solid Past…….Secure Future

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

ATTENDANCE AT BOARD OF DIRECTORS MEETINGS MAY 2014 – DECEMBER 2014

TIMES POSSIBLE

TIMES ATTENDED

TIMES EXECUSED

TIMES ABSENT

Orville Hill

Leodis Douglas

O’Neil Grant

Edmund Jones

Robin Levy

Kevin Forbes

Beverly Stewart

LeoPaul Powell **

Tamara Riley-Dunn

Mark Gonzales **

Balvin Vanriel

NAME

**Mr. Powell and Mr. Gonzales retired from the Board in May 2014, hence they had only (4) possible meetings, January to April 2014.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Management Report

t the start of the year the weighted average selling rate for the USD was at $106.38:US$1.00 and depreciated to $114.66:US$1.00 by the end of the year. This translated to a 7.78% decline in the value of the JMD relative to the USD. This was against the background that there were periodic interventions by the Central Bank to prevent any abnormal movements during the period. During the year the Bank of Jamaica (BOJ) maintained its policy benchmark interest rate of 5.75%. As a result of the volatility in the foreign exchange rate, the Central bank initiated measures that tightened liquidity and resulted in an increase in the treasury bill rates. The signal 180 days treasury bill rate was at 8.72% at the start of the year and fell to 7.20% by April eventually closing the year at 6.98%. In response to the tight liquidity conditions, the BOJ had to modify the interest rates on its emergency lending arrangements with the Commercial Banks in keeping with its monetary goals.

Notwithstanding the above, the year 2014 was Basil Naar a fairly good one considering the challenges Chief Executive Officer experienced during the year, many of which continued from 2013 and impacted the performance of the Credit Union throughout 2014. Though the country was successful in its results of the various test from the International Monetary Fund (IMF) Extended Facility Agreement, the economy continued to be negatively impacted by a number of challenges. These included a further devalued Jamaican currency, high unemployment levels, low growth, continued wage freeze in the Public Sector, increased level of crime and violence, and a reduced attractiveness to Foreign Direct Investments. These challenges naturally impacted our membership as their discretionary income grew smaller or became non-existent. Despite these challenges our members and team members remained faithful to our vision and mission. However, it was noteworthy that despite these challenges the year showed signs of growth in some key industries and for the country in general. At FHC, while not meeting all our key strategic objectives we made significant progress, on which we will build on in 2015. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

During the year 2014 our strategic focus continued with the main emphasis on: 1) Right-fitting the Credit Union with the best team members through training and

development opportunities, job rotation and transfers. 2) Improving the members experience and value; 3) Renewed energy in promoting entrepreneurship as an engine for growth in our economy, as we increased our Micro and Small Business loans thrust making them accessible to more Jamaicans the necessary funding to begin and/or expand their businesses. 4) Improving the productivity of the Credit Union while improving the key financial ratios. Throughout the year we continued our relentless efforts of encouraging our members to save as they plan for the future and continued to offer products and services to meet the needs of our members at every stage of life.

We redoubled our efforts in encouraging our members to use our social media channels such as Facebook and Twitter as we sought to increase awareness of our product offerings as well as provide financial advice. We continued our Corporate Social Responsibility efforts as we impacted people in the communities in which we operate in keeping with mission and vision statements. In addition, we continued to make the various financial contributions to our youth the importance of which cannot be over-emphasized. As we listened to our members, our objective is to make FHC, a one stop financial institution that caters to all our membersâ&#x20AC;&#x2122; needs. FHC and its subsidiary FHCIL as a group performed creditably for the period. Our interest in expanding our Agricultural/Micro and Small Business lending as we seek to assist farmers and other entrepreneurs across rural Jamaica, a major aspect of our strategic direction, led us to hold discussion with the St. Thomas Co-operative Credit Union Limited (STCCU) in a bid to collaborate since we share a mutual strategic vision. These discussions culminated with both Board of Directors recommending a Transfer of Engagement of the business and operations of STCCU to FHC. This we believe to be a good fit because of the shared vision of Agricultural lending to boost this industry and ultimately our economy. In addition, we are confident that the other products and services offered would benefit the members of our Credit Unions and enhance the productivity of both. On September 6, 2014, the members of St. Thomas Co-operative Credit Union Limited (STCCU) at its Annual General Meeting approved the Resolution to Transfer the Engagements of STCCU to First Heritage Co-operative Credit Union Limited (FHC). Subsequently, on December 29, 2015, our Members at a Special General meeting approved the Resolution to accept the Transfer of Engagement of St. Thomas Co-operative Credit Union Limited. The expected date of transfer was set for March 1, 2015. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Maxine Little-Dixon (centre) - General Manager, Finance and Treasury and her team

The year ended with a net surplus of $103.9M for the Credit Union and Group Net Surplus of $103.4M before taxation. The year ended with membersâ&#x20AC;&#x2122; savings totaling $6.47B, a loan portfolio of $6.31B ($451.32M financed by external funding) and Group total assets of $8.97B. Our commitment to generate continual benefits to our members and other stakeholders remained strong and these are just some of the examples that demonstrate that we are doing just that. Having had the experiences of the challenging environment in which we have operated over the past two years since the formation of FHC, we again stand ready to provide sterling performance in 2015, as we get ready for the regulations of Credit Unions by the Bank of Jamaica. We have learnt many lessons and best practices and intend to harness these as we move even more purposefully and strategically to achieve our objectives.

STRATEGY AND CORPORATE AFFAIRS

he Division has the responsibility for developing, monitoring and driving the execution of strategies of the organization. In the challenging business environment of 2014 many opportunities were seized which resulted in several accomplishments which augured well for the Credit Union. The Division has the challenging and vital responsibilities to ensure the alignment of all key strategic initiatives and indicators to the Mission and Vision of the Credit Union. Our FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

annual Strategic Planning sessions played a key role in setting the stage for achieving our objectives. Our quarterly Strategic revision sessions held throughout the year also assisted with keeping the team on track as we measured and analyzed outcomes while making strategic decisions to support the strategic direction in the context of the changing environment.

Strategy During the year several strategies were developed and executed to improve productivity across our operations. The Credit Unionâ&#x20AC;&#x2122;s performance management system which is strategically linked to its mission, vision and core values also facilitated and provided motivation to team members as they were challenged and encouraged to consistently work towards greater effectiveness in achieving our goals and objectives.

40 Maria Morrison

Chief Operating Officer

The Divisionâ&#x20AC;&#x2122;s key focus and achievements were as follows: 1) Measuring and improving customer service

delivery 2) Developing, communicating and ensuring standards are understood 3) Improving financial ratios and overall strengthening of the Credit Union 4) Increased team membersâ&#x20AC;&#x2122; awareness and understanding of their specific goals and objectives through the Balance Scorecard (BSC) methodology 5) Enhanced specific products and services to meet the needs of our members at every stage of life 6) Managing and executing in a project environment 7) Increased corporate social responsibility initiatives 8) Implementing strategies which motivated the achievement of our financial objectives in the context of the challenging economic environment. 9) Form Strategic alliance to boost the productivity of the Credit Union and better serve our members. 10) Grow the Credit Union business through both organic and inorganic means On average the Credit Union performed creditably in spite of the challenging economic environment and achieved approximately 75% of its objectives,

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Project Management The chief accomplishment of this area was executing most of the Credit Unionâ&#x20AC;&#x2122;s initiatives and key deliverable in a project management environment. This was accomplished by projectizing all major deliverables, which included the developing and execution of Requests for Proposals (RFPs) for a number of projects which resulted in selection of soft-wares aimed at increasing efficiencies. Major deliverables were: 1) Renovation of the Kingston Gardens Branch which is expected to be completed by

March 31, 2015 2) Selection of a General Ledger Software for our subsidiary FHC Investments Limited to be implemented by final quarter of 2015 3) Selection of an Human Resources Management Information system to be implemented by end of Third quarter 2015 4) Selection of a new Core Banking system to be implemented by final quarter of 2015

The execution of all these implementation will take place in 2015 which will enhance our technology environment as we improve our business via use of state of the art technology. The renovation of the Kingston Gardens Branch is expected to improve the aesthetics and efficiencies of the branch improving service delivery to our valued members. It is important to note that in 2014 we successfully implemented and utilized the service of a Credit Bureau.

Marketing & Communications The market place in 2014 was extremely competitive as institutions increased their marketing strategies to influence consumer buy-in and loyalty. Competition was heightened within the financial sector as new entrants and existing players offered similar products and valued added services to gain market share. The instability of the Jamaican dollar, taxes, bank fees and increased unemployment also influenced consumer behavior which was effectively less buoyant than in former years. Notwithstanding these variables, the FHC brand remained strong with our tactical marketing strategies and community initiatives. New marketing strategies were explored engaging various channels to meet the needs of our members and prospective members. These strategies included stakeholder partnerships, community involvement and the enhancement of existing products to satisfy various markets segment within our membership. Several channels including social media, emails and text messages were o utilized to communicate with our members. Four loan products were enhanced and promoted. This was dubbed 4 in 1.These loan products in this offer included, Debt Consolidation Loan, the Pay Day Loan, the Motor Vehicle Loan and the Home Choice Loan.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

In September, we forged an alliance which resulted in the ATL Audi/FHC partnership. Our Motor Vehicle product was enhanced with a competitive interest rate, payment terms and discounted fees. We specifically targeted the public sector, and several other groups who have been members of the Credit Union. We also targeted new members for this product. This partnership resulted in optimal brand positioning for FHC, increased public relations and an increase in our Motor Vehicle Loan uptake. Our annual partnership with the Jamaica Reading Association for National Reading Week under the theme “Reading… the pathway to positive values and attitudes” saw our team members volunteering to conduct “Read Aloud” sessions at twenty (20) primary and high schools island-wide. Our strategy to continue to provide a channel through which entrepreneurs can access finances for their businesses was boosted through a number of collaborations which included the following: • The FHC/NHT partnership facilitated Micro Loan seminars in the parishes of St.

Catherine and Clarendon.

• FHC partnered with the Social Development Commission (SDC) to launch a major

small business exposition in St. William Grant Park, downtown.

• FHC & the National Youth Service (NYS) partnership facilitated small business

workshops and consultation sessions in the parishes of Kingston, St. Andrew and St. Catherine.

• Micro Loan Shop branding was conducted at various establishments in the Kingston,

St. Andrew and St. Catherine region.

FHC’s collaboration with the Jamaica Civil Service Association (JSCA) facilitated the sponsorship of the Civil Service Week of Activities. In addition, we sponsored the award to the Civil Servant of the Year 2014.

Corporate Social Responsibility Our Corporate Social Responsibility (CSR) objectives and initiatives are directly related to our mission and vision. Our commitment is to positively impact the communities in which we operate. This year our CSR focus was heightened through a number of initiatives. Team members from all ten branches and the respective departments participated in CSR projects in several communities’ island wide, positively impacting people and the nation at large. Our Labour Day project in May saw the Kiddy Caring Basic School in the Hagley Park community in Kingston receiving a facelift to the exteriors of the building, as over thirty team members participated in this activity. We later adopted the basic school and sought additional assistance via Jamaica Co-operative Credit Union League (JCCUL) to refurbish the school’s canteen. The year ended with a major CSR Christmas Project at the Poor Relief Centre at 65 Hanover Street, Kingston. Sixty (60) FHC volunteers offered their services to approximately 300 patrons at the home as they feasted on the beautiful singing of Christmas carols, a hot meal and received hygiene care gift packages. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

As the year 2015 approaches, we have several CSR plans which will be rolled out early in the year. These will continue to impact communities and the youth as we play our part in making Jamaica 2030 vision a reality.

FHC Foundation The FHC Foundation was launched on December 10, 2013 and continues to play a critical role in assisting and impacting young people during the year. The FHC Foundation will help in accomplishing this mandate by: • Providing or harnessing opportunities for meaningful change/improvement in the Jamaican society by focusing on Youth, Education, Sport and Community Development. • Providing funding and expertise/skills to specific interest groups/entities. • Encouraging and facilitating a spirit of Volunteerism amongst FHC team members During the year a number of schools received sponsorships for various initiatives. Our Entrepreneurship programme awarded two groups of final year university students with financial awards as part of the competition for top business plans and in so doing have been able to start their own small businesses. Ten GSAT Scholarships were offered to youth savers which included five scholarships and five onetime bursary payments. Eight students from several tertiary institutions pursuing studies in various specialized areas received the Oswald Thorbourne and Renald Mason Scholarships while one received a Special Education Grant. We will continue our efforts to secure funding to meet the objectives of our foundation.

HUMAN RESOURCES DEVELOPMENT

n keeping with our promise to ensure all team members are highly trained, developed, empowered, motivated, appraised and rewarded to deliver excellence, we continued with initiatives and interventions for the advancements of our team members.

Jillian Gayle (centre) - General Manager, Human Resource Development and her team FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Leadership Development We had our first cohort of graduates (20) from the Leader-in-Training and the Management Trainee Programmes. These programmes were geared towards identifying, training and developing team members who are integral players in our Succession plan. The spirit of camaraderie among our team members continued this year with the hosting of our Annual Team Member Quiz Competition, where departments and branches competed for the grand prize.

Training and Development Certification of Internal Customer Service Trainers In 2014 seven team members were trained and certified as Customer Service Trainers. This certification is accredited by City & Guilds which is recognized in 260 countries. These team members were assigned specific departments/Branches with the responsibility of maintaining the Quality Advantage Program throughout the Credit Union, which they will continue to accomplish through continue training, follow-up and evaluation. The Quality Advantage Program is geared towards ensuring consistent excellence in service delivery across our branches and departments. These persons will also facilitate training within their area of expertise. Change Management Workshop

Supervisors and line team members of the credit union were exposed to Change Management through workshops conducted by an external consultant in the field. These team members learnt how to understand the need to changes and how to quickly adapt to changes. In addition, supervisors were encouraged and trained to be Change Agents. A number of training seminars/workshops were facilitated during the year, these included Credit Bureau, Authentication of Identifications, Card Management System Training, Family Indemnity Plan Training, First Aid and Cardiopulmonary Resuscitation (CPR) Workshop, JCUES & CONEC, an Online Payment Service offered through JCCUL, Agricultural lending Workshop. Centre for Professional Development (CPD On-line) Web-based Training We continued to utilize our online state of the art training facility which has over 300 credit union based courses. During the year, all team members successfully completed a wide range of courses. For 2014, there were a total of 10,200 activities combined inclusive of exams and courses. This accounted for an estimated 5,200 training hours on CPD online. Dedicated Learning/Training officer We are convinced that the roll of training and development cannot be over emphasized, as this critical component is vital to our successful operations and will move us closer to achieving our mission and vision. In light of this, we have appointed a Training Officer who will concentrate solely on executing our training and development objectives. Our Internal trainers conducted several sessions throughout the year to include, products and services, customer service, loan underwriting, and standard operating procedures. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

In the coming year we will continue our thrust to ensure that all team members are fully equipped to serve our valued members through ensuring they acquire the skills through our various training and development Programs.

Reward & Recognition With our performance-based culture in place, a total of forty Four (44) team members were recognized and rewarded for their performance for the year 2014. These individuals received tokens and cash incentives. Our monthly Reward and Recognition programme also continue to provide motivation for team members throughout the year. .

Team Members Welfare Wellness Programme Several Wellness initiatives were undertaken during the year which included continuous aerobics and yoga classes, as well as team members’ participation in corporate run/walk/ hikes. We purchased additional gym equipment during the year, to assist the team members with their exercise programmes. The “Biggest Loser” competition was held during the year, where team members competed in a weight-loss initiative for a period of sixty (60) days. Awards were given for first, second and third places. A mini-health fair was also hosted during year where representatives from select companies conducted presentations and demonstrations on skin care, nutrition, and exercise tips.

Social Responsibility We continued hosting several Internship Programmes, including but not limited to our Summer Internship, work experience for High School students as well as the H.E.A.R.T. Internship. In addition to several of our branches, departments and divisions adopted several new outreach projects during the year, we also maintained our tradition in assisting the St. Stephen’s Feeding Programme. All of our outreach efforts were aimed at increasing our contribution towards the improvement of the communities in which we operate. We acknowledge and commend our most valuable asset, our human resources, for their sterling contribution during the year, despite the many challenges faced, and look forward to optimizing and improving the effectiveness of our Human Resources in the coming year.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

CUSTOMER SERVICE & SALES DIVISION

uring 2014 we focused on our primary mandate, which was to improve member experience and quality assurance by harmonizing processes, products and services and human interaction. This was all in an effort to positively impact our growth and development by convincing individuals and groups to avail themselves of the benefits of our products and services. In executing our mandate in 2014 we endeavoured to: • Ensure that all our members and other stakeholders are served professionally and

treated with courtesy and respect. • Promptly and completely address members’ queries and concerns and maintain a high member satisfaction rating. • Promote our products and services and offer trustworthy financial advice to members and prospective members. • Ensure that the products and services we offer are suitable to persons’ short, medium and long term needs.

Customer Service

A number of programs and systems were implemented to enhance and measure service delivery, and manage complaints. Chief among them was the acquisition and commissioning of state-of-the-art Customer Relationship Management (CRM) software which allowed us to communicate more efficiently and effectively with our members on a mass or targeted scale. As a consequence, we were able to commence Maxien Davis (left) – General Manager, Retail and Customer Service greets a customer sending various types of correspondences electronically to members, these included, alerts, notifications, birthday greeting cards, information on new and enhanced products and services and special promotions and events.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

We continued our measurement and monitoring of levels of internal customer service delivery through the use of the Customer Service Standard Temperature tool. We also introduced our Intra-Unit Customer Service Assessment tool and both were used to motivate team members to improve our internal customer service standards. At the end of December 2014, the rating for internal customer service improved from an average of 3 prior to the implementation of the assessment tools to 4 on a scale of 1 â&#x20AC;&#x201C; 5, with 1 being unsatisfactory and 5 being excellent. In addition, our efforts to institutionalize excellence in customer service as a part of our culture were bolstered by an expansive customer service training program in which each team member participated. The last survey of our external members revealed that, on average, 85% were very pleased with the level of service they received from the branches. Our aim is to improve this figure to the high nineties during 2015.

Member Care Center Our Member Care Agents delivered excellent service to callers. Our Member Care Centre and our Telemarketers were very successful in their attempts to reach out to our members, particularly those whose accounts were either inactive or dormant. Through their efforts many members reactivated their accounts. The Centreâ&#x20AC;&#x2122;s 24/7 operation was revised for greater efficiency as the utilization levels by callers outside of regular working hours and on weekends and public holidays was not at a rate that warranted its continuation. This action resulted in significant improvement of the management of in-coming calls.

Wealth Development & Sales Our Wealth Development and Sales Unit (WDU) continued to place emphasis on providing personalized and direct service to members. Undaunted by the harsh economic and competitive climate in which we operated during 2014, the team members managed to generate interest in and created an appetite for our offerings through direct sales and promotional activities amongst our members and non-members. The Unit also performed exceptionally well in other key result areas such as the expansion of the Schools Savings programme and the engagement of non-financial co-operatives and churches. In February 2014 our revamped Liaison Officers program was launched and many of the Liaison Officers were rewarded for their invaluable contribution during 2013. As we sought to encourage thrift among our youngsters through our Young Ones United in Thrifty Habits (Y.O.U.T.H.) savings program, the sales team was instrumental in the expansion of our presence in educational institutions and through their effort twenty new schools were added to the list of participating schools, taking the total number of active participating institutions to fifty two. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

OPERATIONS, INFORMATION TECHNOLOGY & FACILITIES Operations, Risk and Compliance The main thrust of the Operations Risk and Compliance Department for 2014 was to ensure that the necessary systems and procedures were in place to support our product and service delivery and that a robust risk management programme was undertaken to mitigate the inherent risks. Our Centralized Operation which includes the processing of Standing Order Payments, Salary Deductions remittances and Death Claims were processed in the most efficient manner in support of our promise to deliver high quality customer service. To this end an aggressive programme was undertaken to obtain soft copies of the monthly salary deductions to facilitate a full automation of the salary deduction process to significantly reduce the processing time.

We continued to review our policies and procedures to meet â&#x20AC;&#x153;best practiceâ&#x20AC;? standards and to ensure efficiency especially in support of our frontline activities. Quilston Harrison (centre) - General Manager, Operations, Risk, Information Systems and Facilities and members of his team

An enterprise risk management system was instituted throughout our group of companies and an annual company-wide risk reviews were conducted.

To ensure that the credit union benefited from any shortcoming encountered during audit reviews an aggressive follow-up and monitoring system was setup to manage any compliance and audit exceptions and ensure that standard operating practices permeated the organization. From and international perspective system adjustment was made in anticipation of the implementation of the Foreign Account Tax Compliance Act (FATCA). The impacted accounts were identified and communication established with the members with a view to ensuring that we are operation within international guidelines.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Information Technology We continued improvement in the area of ATM Debit Card Management with the implementation of the online real-time Card Management System allowing our members to have instant access to their funds and immediate usage of Debit Cards as soon as they received their cards. There was also improvement in the security of the debit cards. This will result in increased usage by our members as the fear of loss diminishes. We made improvement to our internal technology environment, particularly in our document Management System that resulted in faster processing time where transactions required the retrieval of member information leading to improvement in waiting time. Given the mandate to improve customer service internally and externally we developed systems to measure and monitor the quality of service provided both internally to each other and externally to our members. We continued to focus on communication with our members through the implementation of specialized software purchased for that purpose. In addition to keeping communication current with our members the system also provided us with the ability to target our valued members with products and services that they need based on their demographics and other financial profiles. Our Technology provided us with the ability to notify the membership of promotion and specials, send Birthday E-Card to members via their email Address as well as SMS Message as deemed necessary. As we continued to facilitate our membership for the future, emphasis was placed on implementing a number of web-based systems. This led to us increase our communication capacity between our branches as well as between our membership and us. The Information & communication technology system was upgraded to facilitate the answering of most calls at our Member Care Centre. In addition, we increased the number of available outgoing and incoming land lines and also reconfigure routing to take advantage of the competitive rates available from the mobile providers.

CREDIT ADMINISTRATION AND LOAN RISK 2014 witnessed a downturn of 14% in disbursements and 6% on the overall loan portfolio. We continued to balance the requirements of our members with the need to create several strategies to mitigate our risk. By the end of the year, however, we saw disbursements increasing mainly in the home equity, motor vehicle and unsecured categories. The Centralized Loan Unit was introduced midyear to facilitate an improved turnaround time and to standardize our loan process and although we have seen improvements in certain areas we continue to review the operations to ensure the highest level of efficiency.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Janyce Robinson (left) - General Manager, Credit Administration & Loan Risk

Increasing harsh economic conditions affecting our members resulting in unemployment, reduction in salaries and wages, no increase in salaries resulting in a greater burden on the take home pay as prices increased. These factors have resulted in members being unable to meet their debt obligations. A significant number of our members are public sector employees who have not received a salary increase for quite a few years. To meet our membersâ&#x20AC;&#x2122; needs we have developed specific methods of assisting them. Rewriting and restructuring of current facilities to allow for longer payment terms and a reduced loan repayment have assisted a significant amount of our members. Past due loan management continue to be a major challenge to the Credit Union but the portfolio has to be managed to minimize losses and earn an acceptable return for our members. We continue every effort to recover on non performing loans. In 2014 the Credit Union and our members were impacted by two new laws which were passed previously. The first was the Security Interests in Personal Property Act (SIPPA) which came into force in January 2014. This Act governs the creation, registration, and enforcement of security interests over most non-land property and facilitates an electronic registry. The second was the Credit Reporting Act (2010) which provides for the licensing and operations of Credit Bureaus in Jamaica. The Act facilitates the Credit Union obtaining a credit report for each loan applicant which will assist facilitating the Credit Union granting loans on a sold and recoverable basis.

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

RETAIL NETWORK

he year saw a credible performance in loans and deposits. This was achieved despite the many economic challenges experienced by our Members. Notwithstanding we continued to listen to our members and with an innovative and motivated team, we were able to make adjustments to our product suite as we continued to anticipate and exceed our Membersâ&#x20AC;&#x2122; needs.

Throughout the year we were able to partner with other institutions as we worked at improving the service offerings to our Members. One example was an agreement with ICWI to provide competitive Insurance premiums to our members with Motor Vehicles. This agreement came with many benefits to our Members such as, low deductible and Personal Accident Insurance.

Norman Thompson â&#x20AC;&#x201C; General Manager Retail and Sales

We were able to assist many more members to realize their vision of becoming entrepreneurs, through our Micro and Small Business Loans Unit which redounded to a very strong performance for the unit with a loan portfolio of over $285M and to date having served over 3500 members. This arm of the Credit Union remains poised for further growth as we ensure service to the financially underserved in the country. 2015 will see us further improving our product offerings and service delivery channels with some of our Branches being slated for major improvements to better serve our valued members. Additionally, with the pending change in our core system, our service and efficiency levels will also be significantly enhanced.

(L-R): Emil Williams - Assistant General Manager, Finance and Treasury, Karlene Simpson - Assistant General Manager, Operations, Risk and Compliance, Jacqueline Pinque-Smith - Assistant General Manager, Sales and Wealth Development, and seated, Dennise Edmund-Hastings - Chief Internal Auditor

We thank the hard working team members of the Retail Network, who have demonstrated dedication and resolve to deliver excellence in service to our Members. At this juncture, we also must thank our valued Members for the continued commitment to this organization. We know there are options in the marketplace and we are grateful

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

that we are still seen as the preferred financial partner. We remain dedicated to the ideals that make us great, that of people helping people to better their lives, as we move from strong to stronger.

FHC Investments Limited (Subsidiary)

he Company made a profit after tax of $3.15M compared to $4.77M the previous year. Total income amounted to $67.50M which was $17.89M or 36% increase over the prior year. The main sources of income were from Bond trading and fees from the management of the Pension funds and Investment portfolios. Total Assets stood at $422.47M at the end of $2014 showing growth of $34.83M or 9% over 2013. Repurchase Agreements with clients increased to $233.26M from $224.38M representing a growth of 4%

Total funds under management grew by 52% from $1.4B to $2.13B

Patrick Burke (front) - General Manager, FHC Investments Limited and members of his team

The economic environment impacted the performance of the Retirement Scheme managed and administered by the company. However the funds under management grew by over 25% to approximately $479M with a total of 4186 contributors and 51 Pensioners. During the 2015 financial year, the company will continue on the path of extracting further efficiencies by leveraging the FHCâ&#x20AC;&#x2122;s branch network. In addition, the company has reviewed its sales capabilities with the aim of increasing our service and reach to our members. Given the local dynamics, we are in the process of increasing our product offering enabling our clients to further diversify their portfolios. We will establish our Unit Trust product and other investment options as we seek to position FHC Investments Limited as the broker of choice for investors.

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Management Trainees

(L-R): Alece Hansel - Marketing Officer, Keneal Walters - Senior Member Service Representative, Patrice Doyley - Business Development Officer, Sheldon Christian - Branch Supervisor, Camille Bryan - Compliance Representative, Basil Naar - Chief Executive Officer, Rochelle Thomas - Branch Ambassador, Dwayne Taylor - Credit Administrative Representative, Meagan Gordon - Branch Supervisor, Ervin Ennis - Branch Supervisor, Maria Morrison - Chief Operating Officer, Jason Ferguson - Officer in Charge, Jillian Gayle - General Manager Human Resource Development

Leaders in Training

(L-R): Jillian Gayle - General Manager Human Resource Development, Lascelles Watson - Micro Finance Officer - Operations, Sophia Harvey - Human Resource & Learning Officer , Basil Naar - Chief Executive Officer, Beverley Green-Hyatt - Information Supervisor, Dawn Edwards-Senior Internal Audit Officer, Nika Duncan-Donaldson - Database Administrator, Gavin Francis Senior Supervisor - Pension Administrator

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” e l p o e P r u O “ Blast Off r

CEO - Basil Naa

54 r – Recipient of

counting Office n Rhoden - Ac

Roha for 2014

the CEO Award

siness Loans

all Bu er, Micro and Sm dson - Manag ar ch Ri ia ph So ards er of the Year Aw receives Manag

Team Members ready to blast off FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

GM Jillian Gayle urce so Re an - Hum t en m op el ev D

Male - Dewayne Best Groomed lities Officer Mullings - Faci

rley Female - Beve Best Groomed n io at – Inform Green –Hyatt isor rv pe Su s System

Branch of the Year: Trophy presented by Norman Thompson (R) - GM – Retail and Sales to the May Pen Branch

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Scholarship Awardees

Mr. Norman Thompson (L) - GM Retail and Sales and Ms. Maxien Davis (R) - GM Retail and Customer Service interact with 2014 GSAT Awardees

Senior Marketing Officer â&#x20AC;&#x201C; Diana Allen welcomes Amelia Parks 2014 GSAT Awardee

Members of the Board and Senior Executives pose with Renald Mason and Oswald Thorbourne 2014 Tertiary Scholarship Awardees

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Scholarship Awardees

(L-R): O’Neil Grant, 2nd Vice Chairman Board of Directors, Percival Braham 2014 Entrepreneur Awardee, Basil Naar- CEO and Orville Hill – Chairman Board of Directors

CEO Basil Naar speaks with Javin Williams of Herboo Enterprise a former FHC Entrepreneur Awardee

Directors and CEO pose with members of the Inventive Learners group - winners of the 2014 Entrepreneur Awards FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

Report of the Treasurer 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 December 31, 2014. The audited financial statement in this annual report is for the Group, which comprises the Credit Union and its wholly-owned subsidiary, FHC Investment Limited (FHCIL). It is worth noting that FHC adopted International Accounting Standards 19 (IAS 19), in accordance with best practice, during 2013. IAS 19 required changes in the accounting treatment of pension benefits and related costs. The balances and disclosures have been adjusted to incorporate the new accounting treatment in compliance with IAS 19.

Summary Financial Performance

For the year ended December 31, 2014, the FHC Credit Union realized a Net Surplus of $103.9M as compared to prior year Net Surplus of $98.8M. This represents a 5.2% increase year over year and speaks well for the Credit Union’s performance, given the reduction in fee income and fall off in loan interest income, stemming from strategies implemented to improve the Credit Union’s liquidity position over previous year; in preparation for the Bank of Jamaica’s regulations. See graph depicting Net Surplus performance for 2013-2014.

Net Surplus($M)

Comprehensive Income was $114.9M (2014) compared to $82.9M (2013). The subsidiary FHCIL also made a Net Surplus of $3.2M (before tax) for the year and therefore contributed positively to the Group’s Net Surplus of $103.4M for 2014.

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At December 31, 2014, FHC’s total assets of $8.83B represented a $63.2M increase over the course of the year.

Total Assets($B)

Members loan fell by $390.4M or 5.8%, from $6.70B (2013) to $6.31B (2014), while Liquid Assets and Short term Investments grew by $426M or 70% moving from $602M (2013) to $1,027M (2014). There was a $300M reduction in the loan portfolio due to completion of a Buy-back agreement with the Jamaica Mortgage Bank (JMB) and additionally, a deliberate loan strategy which resulted in reduced loan disbursements for a number of months in 2014. These were part of the strategy to improve the Credit Union’s Liquidity ratio moving from 9.39% at December 2013 to 15.75% at December 2014. This measure was implemented to bring the Credit Union to an improved position towards achieving compliance with the Bank of Jamaica’s liquidity requirements. Liquid Assets & Short term Investments ($M)

Members’ Deposits increased by $304.9M or 4.9% from $6,166.5M (2013) to $6,471.4M (2014), while Equity grew from $1.37B (2013) to $1.41B (2014), a 6.3% increase.

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Total Members Deposits ($M)

Economic Overview The year was another challenging one for our members and the Jamaican economy. Globally there were continuing effects of the global recession, including notable challenges in Europe but some signs of recovery in North and South America, while Brazil, Russia, India and China continued to show above-average GDP growth.

By year-end 2014, interest rates increased marginally, as the Jamaican Government has made progress towards reducing its fiscal deficit and the economy had shown marginal improvement in GDP. Despite passing the IMF tests in 2014, the local financial environment continued to experience high national debt, high unemployment, low economic growth and a weakening of the Jamaican dollar against hard currencies. The Jamaican dollar traded against the United States dollar at J$106.38 to U$1.00 at the beginning of the year and depreciated by 7.78%, ending the year at $114.66, as many of our savers looked towards hard currency investments. Inflation rate declined from 9.5% in 2013 to 6.4% at year end 2014 due to significant reductions in international oil and grain prices.. During the year the BOJ maintained its policy of holding interest rate low. The 90-day benchmark Treasury Bill started the year at 7.53%, and moved only slightly downwards year end to 6.96% The Credit Union continues to experience reduced interest in loans, despite historically low interest rates as many businesses and households opted to reschedule or reduce their debt from savings instead. While unemployment declined to 13.8% during the year, 1.6 percentage points lower yearover-year, the rate of unemployment still remained relatively high and financial service providers experienced generally increased delinquency and reduced savings intakes, as a result of the tight economic conditions. All these factors combined continue to create significant liquidity pressures in the Island and heightened competition in the financial service sector.

Regulatory Environment With the recent developments in the legal and regulatory environment, the expectation for the Bank of Jamaica (BOJ) to assume the role of supervisor of Credit Unions in 2014 was delayed and is now expected for 2015. The process of BOJâ&#x20AC;&#x2122;s existing oversight of our activities, review of our financial reports and periodic audits continues. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Our performance against International Credit Union Industry financial benchmark standards for safety and soundness (PEARLS) is continues to be monitored by the Jamaica Co-operative Credit Union League Limited. Our performance is also compared to other prudential requirements by the BOJ. FHC’s Institutional Capital to Total Asset ratio was 15.9% at December 31, 2014, far exceeding the minimum PEARLS Standard of 8%.

Operational Results Notwithstanding the many challenges faced by the Credit Union and its members, and the strategic decisions executed to ensure that regulatory requirements would be met, FHC has undertaken initiatives to improve its competitiveness, while addressing needed improvements in its customer service and internal controls. Key Results for the year 2014 were: • Interest Income of $1,150.9M (2014) fell by $35.9M or 3% from $1,186.8M (2013). The

Credit Union remained competitive by offering attractive rates to our members, while applying deliberate strategic measures for improving our liquidity position. Interest Income ($M)

• Non-Interest Income of $161.1M (2014) fell by $44.7M or 21.7% from $205.8M (2013).

This reduction is mainly attributed to the loss of loan related fees due to reduction in loan activities. It should be noted that there were no fee increases for 2014. Non-Interest Income ($M)

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• Interest Expense fell from $183.6M (2013) to $182.9M (2014), largely as an effect of

the JMB Loan Buy-back transaction that significantly reduced our loan portfolio in 2014. The Credit Union continues to offer competitive saving rates to our members on Deposit products.

• Operating Expenses fell by $75.9M or 7%, from $1,070.7M (2013) to $994.8M (2014),

due mainly to close monitoring and containment of expenses.

Operating Expenses ($M)

• Past Due loan portfolio (30 days and over) as a percentage of our Total Loan portfolio

was 10.4% (vs. 9.3% at end of 2013). This depicts the hardships faced by a significant proportion of our members, as they continue to experience loss of income through unemployment, and reduction in disposable income. Our provisioning for loan loss continues to be considered adequate to cover potential losses.

• We are appealing to you our members to communicate with us as soon as problems

are experienced in repaying your loans, either with us or elsewhere. We stand ready to assist in finding a beneficial solution in most cases.

Insurance The Credit Union continued to maintain the Life Saving and Loan Protection coverages, for members’ benefit, with the credit union movement’s insurance company, CMFG Life (formally CUNA Mutual).

Conclusion For the year, the Credit Union’s performance was good, despite the major reduction in loans, loss of related fee and interest income and a policy of not increasing fees. Notwithstanding the Credit Union’s improved Net Surplus performance, there remain areas that require constant attention and improvement, notably those of liquidity and delinquency control, both of which are partly a function of the challenging economic environment. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

We are confident that the path we are on is the right one and that, with the continued dedication of our staff and volunteers, we will overcome the challenges and accomplish the ambitious goals that we have set for the benefit of our fellow members.

Acknowledgements I thank God, you, the members, and my fellow board members for having given me the opportunity to again serve as your Treasurer. It has been an honour and a privilege to do so. I thank 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. I thank and commend all the team members, including volunteers, managers and staff, who consistently applied themselves to the Credit Unionâ&#x20AC;&#x2122;s success. On behalf of the Board of Directors, I must also convey appreciation to the Registrar of Co-operative Societies and the Jamaica Co-operative Credit Union League, for their expert assistance and guidance throughout the year. I also thank our Auditors, KPMG, for their professionalism and another timely completion of our audit this year. May God bless you all.

63 Robin Andrew Levy Treasurer

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Corporate Social Responsibility

Team Members

give

bour Day

w face lift on La

g Basic a ne the Kiddy Carin

straight rison paints a cer, Maria Mor ffi O g tin ra pe on Chief O gard looks ember Kisha A line as Team M

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of rest” - resident ve your face a gi FHC d by an d le te hi na w “Smile a on a bed do s xe la re re nt f Ce the Poor Relie to care packages bers distribute

the residents at

the Poor

Team Mem Relief Centre

and Lenice Gordon b m Diana Allen co the of t en hair of resid n de ol G ur bo Old Har Age Home

FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

x grooms male er - Rudolph Co olden Age Branch Manag Old Harbour G e th at ir ha ’s patron Home

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Corporate Social Responsibility

Team Member

e brush stroke and Infant shar

“In the centre of the moment” – AGM, Jacqueline Pingue-Smith and Team Member Kemesha Gordon interact with students at Unity Primary during Reading week 2014

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Students at the New Day Primary listen attentively to Branch Manager – Mendel Thompson during Reading week 2014

y shares er - Marcia Baile Branch Manag d Aloud” ea “R e udent at th a hugs with st Primary Barracks Road session at the g week 2014 during Readin

“A happy moment” - Chief Operating Officer Maria Morrison interacts with students at Kiddy Caring Basic graduation before giving Keynote Address FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Report of the Supervisory Committee CHAIRMANâ&#x20AC;&#x2122;S OPENING REMARKS On behalf of the members of the Supervisory Committee, I would like to first of all, add my own WORDS OF WELCOME to all members of the First Heritage Co-operative Credit Union who have joined us here for this the third Annual General Meeting. We are pleased to be associated with another successful year of operations, and wish to publicly congratulate the management and staff, as well as the cadre of volunteers who have worked tirelessly to achieve the several milestones reported. THE COMMITTEE The governance structure of Credit Unions provides for a Supervisory Committee whose members are elected from and by the wider membership at an Annual General Meeting.

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(L-R): Desmond Gordon, Asre Stewart-Blake, Beverley Williamson - Chairman, and Dwight Sibblies

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The Committee is charged with certain oversight functions which are discharged largely through the Internal Audit function. In addition, the Committee receives and investigates as necessary, complaints made by members as regards the proper functioning of the Credit Union. This latter function is executed by inviting members to submit comments/complaints through Suggestion Boxes strategically placed in the offices in which they transact business. At the last annual general meeting on 2014 May 13, five (5) members were elected to the Supervisory Committee. However, approximately one (1) month later, Mrs. Sharon Crooks resigned. As such, the Committee consisted of the following four (4) members.

Mrs. Asre Stewart-Blake

Mrs. Beverley Williamson

Mr. Dwight Sibblies

Mr. Desmond Gordon

Mrs. Beverley Williamson was subsequently elected Chairman of the Committee and Mr. Desmond Gordon, Secretary. During the period and up to the date of preparing this report, there were eight (8) meetings of the Committee and in accordance with stated requirements; monthly reports were presented to the Board of Directors. Committee members also attended Joint Board of Directors meeting held quarterly during the review period.

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ATTENDANCE RECORD As at 2015 February 5, eight (8) regular meetings of the Supervisory Committee were held and the attendance record reveals the following: Names

Regular

Excused

Mrs. Asre Stewart-Blake

Mr. Dwight Sibblies

Mrs. Beverley Williamson

Mr. Desmond Gordon

MATTERS CONSIDERED DURING THE PERIOD Several areas of the Credit Unionâ&#x20AC;&#x2122;s operations were examined over the period, some of which are routine monthly activities, some based on requests from management and others, executed in accordance with an audit plan developed at the start of the calendar year. The audit plan is based on circumstances then existing but in general is aimed at providing assurance as regards the management of key areas of risks, the operations of internal controls and governance processes. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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Approximately 70% of the audit plan was successfully completed during the review period. This was due in part to a reduction in the staff compliment for about four (4) months consequent on the transfer of one staff as well as having to allocate time to respond to unplanned reviews undertaken at the request of management. More specifically, the Committee reports as follows: 1. Bank Reconciliations

This very important activity was monitored on a monthly basis. All bank accounts were reported to have been prepared in a timely manner with reconciling items being cleared in a satisfactory manner. 2. Volunteer and Staff Accounts

This area was also reviewed monthly with appropriate follow up to ensure that volunteer and staff accounts were maintained in accordance with established guidelines. All anomalies reported were corrected over the period. 3. Branch Audits

During the review period, the Eureka, Kingston Gardens and Portmore Branches were audited as was the Old Harbour Sub Branch. The audits were extensive and covered all aspects of the Branchesâ&#x20AC;&#x2122; operations. In general, internal controls established were adhered to and any anomalies found were subsequently corrected by management.

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4. Special Investigations

During the year, several special investigations were undertaken at the request of management, a number of which were resolved. As at the date of this report, some of these matters are still being investigated while others have been handed over to the appropriate authorities. 5. Other Matters

A review of the Credit Unionâ&#x20AC;&#x2122;s compliance with the requirements of the Anti-Money Laundering Regulations was also undertaken during the period. In general, the requirements of this Regulation were in place and being adhered to. Areas on non compliance identified were subsequently addressed by management. The Chairman represented the Committee at a one day Strategic Planning Retreat of Management which was held in 2014 August. This seminar was well received and provided good insight into the planned activities of the Credit Union for the ensuing year. The Chairman was also invited to participate in interviews that were held to identify a suitable individual to fill a vacancy for a senior internal auditor. The individual identified assumed duties in 2014 November taking the staff compliment of the internal audit department to its regular compliment of four (4) persons. Although the Suggestion Boxes were cleared monthly, no complaints or suggestions were received from the membership. This is an important way of ensuring continuous improvement in the products and services offered and we wish to remind the general FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

membership of this method of communication and to assure you all that this facility is continuously monitored. CONCLUSION We wish to conclude by thanking the Selection Committee for their confidence in selecting us for consideration and to the members of the Credit Union for appointing us to serve in this important way. We would also like to express our gratitude to the management and staff, particularly those of the Internal Audit department, and the Board of Directors for facilitating the work of the Committee over the year.

Beverley Williamson Chairman of Supervisory Committee

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Report of the Credit Committee

he Credit Committee takes great pleasure in presenting its 2014 report to you our valued members of FHCCU.

With the many challenges and especially the fierce competition faced in the financial sector, the Credit Union continues to offer comparable value to you our members.

Disbursement for the year totaled $2.532B which is a decline of 13.4 percentage point below that of the previous year of $2.925B. There was also a reduction in the total loan portfolio from $6.7B in 2013 to $6.3B in 2014. Cash secured loans, unsecured loans and motor vehicle loans dominated the portfolio. The Micro Finance Unit continues to show significant growth, with disbursement moving from $154M in 2013 to $246M in 2014. During the year, forty four (44) meetings were held and attendance was as shown below. The Committee welcomed Althea Daley and Faylene Foster who joined in May 2014.

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(L-R): Quinton Masters, Althea Daley, Noel Francis - Chairman, Faylene Foster and Richard Ranger

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Meetings held

Meetings attended

No. of times excused

Noel Francis

Quinton Masters

Richard Ranger

Althea Daley

Joined May 2014

Faylene Foster

Joined May 2014

Louella Maloney

Retired

Marilyn Dunbar

Retired

Members

The Committee could not have carried out its mandate without you our valued members and the highly professional management and staff of FHC and to you we say thanks.

149 Noel Francis Chairman

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Analysis of Loan Disbursement by Purpose 2014 TYPE PRODUCTIVE Agriculture Manufacturing Distribution Retailing Business Loans (Easi Biz) Transportation Communication Micro-Individual (Secured) Micro-Individual (Unsecured)

1,981,741

% of Total

0.08%

0.00%

81,572,240 164,177,568

3.22% 6.48%

247,731,549

9.78%

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

661,864,361 23,872,065 206,496,405 139,805,642 64,738,048.75 403,666,157 279,995 3,687,833 780,196,581.29

26.14% 0.94% 8.15% 5.52% 2.56% 15.94% 0.01% 0.15% 30.81%

TOTAL

2,284,607,088

90.22%

GRAND TOTAL

2,532,338,637

100.00%

TOTAL

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2014

PROVIDENT

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Report of the Nominating Committee

n accordance with the Rules of First Heritage Co-operative Credit Union Limited, Article XIV, Rule 59: Meeting of Members, a Nominating Committee was established. The members of the committee were: • Beverly Stewart

- Chair, Board Representative

• Patricia Ramsaran - Member Representative • Basil Naar

- Staff Representative

The Committee advertised for volunteers to fill vacancies on the Board of Directors and the Supervisory Committee and met to consider all vacancies from the Board of Directors, Supervisory and Credit Committees and now presents the following report:

BOARD OF DIRECTORS The terms of five Directors came to an end. These Directors are: 1. Orville Hill

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2. O’Neil Grant 3. Edmund Jones 4. Kevin Forbes 5. Tamara Francis-Riley Dunn

Four of these Directors indicated that they would be willing to serve for another term. However, Director Orville Hill indicated that he would not be available to serve. We thank Director Hill for his contribution to the Credit Union especially his leadership as Board Chairman since its inception. Pursuant to the signed Merger Agreement of Transfer of Engagements between St. Thomas and First Heritage Co-operative Credit Unions dated February 2, 2015, it was agreed between both Credit Unions that a member of the former St. Thomas Cooperative Credit Union would be appointed to the Board of Directors of First Heritage Co-operative Credit Union Limited as a consequence of the merger effected on March 1, 2015. Mr. Michael James, former Vice President of St. Thomas Co-operative Credit Union Limited, is therefore being recommended to serve on the Board of Directors for one term, based on the merger agreement. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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The Profile of the New Candidate 1. SSP Michael James Mr. Michael James is a Senior Superintendent of Police, an Executive Member of the Police Officers Association and Divisional Commander of St. Thomas. He has received numerous awards including the Medal of Honour for Meritorious Service, the JCF Distinguished Service Award for the Development of Police Youth Clubs in Jamaica, was the Lasco Police Officer of the Year 2000 and a Past President of the Kiwanis Club of St. Thomas.

Retiring Recommended Term 1. Orville Hill Michael James 2 Years 2. Oâ&#x20AC;&#x2122;Neil Grant Oâ&#x20AC;&#x2122;Neil Grant 2 years 3. Edmund Jones Edmund Jones 2 Years 4. Kevin Forbes Kevin Forbes 2 Years 5. Tamara Francis-Riley Dunn

Tamara Francis Riley-Dunn

2 Years

SUPERVISORY COMMITTEE

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Terms of five members of the Supervisory Committee came to an end: 1. Mrs. Beverley Williamson 2. Mr. Desmond Gordon 3. Mr. Dwight Sibblies 4. Mrs. Asre Stewart-Blake 5. Mrs. Sharon Crooks

Mr. Dwight Sibblies, Mr. Desmond Gordon and Ms. Sharon Crooks will not be returning. The other members have, however, indicated their willingness to serve and are therefore being recommended to serve another term along with the additional three (3) members. Profiles of the New Candidates 1. Mr. David Dobson Mr. David Dobson is the Senior Director for Technical Services in the Ministry of Tourism and Entertainment. His professional experience as Administrator in the Public Health sector spans some twenty (20) years. He has held the position of President of the Jamaica Medical Records Association as well as the Jamaica Association of Health Service Executives. He holds an Executive Masters in Business Administration from the Mona School of Business & Management.

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Mr. Denver Dyce

Mr. Denver Dyce is currently the Bursar at Bath Primary & Junior High School, a position he has held since 1999. He is a highly motivated and versatile individual with many years experience in the field of Accounting. He holds a Bachelor of Science in Business Administration from the University of Technology. Mr. Dyce has served as Chairman of the Supervisory Committee of the St. Thomas Co-operative Credit Union since 2012. An avid football player, Mr. Dyce has played for several clubs and is currently a part of the administrative team for the Real Morant Sports Club.

Mr. Lascelles Ellis

Mr. Lascelles Ellis is a results-oriented, hands-on professional with broad experience in all aspects of accounting and financial management. He is currently the Principal Finance Officer in the Government of Jamaica Court Management Services, a position he has held since 2010. His professional knowledge spans some forty year (40) with experiences in both Public and Private Sectors. He holds a Master of Science Degree in Accounting from the University of the West Indies.

Retiring Recommended Term 1. Mrs. Beverley Williamson

Mrs. Beverley Williamson

1 Year

2. Mrs. Asre Stewart-Blake

Mrs. Asre Stewart-Blake

1 Year

3. Mr. Dwight Sibblies

David Dobson

1 Year

4. Mr. Desmond Gordon

Mr. Denver Dyce

1 Year

Lascelles Ellis

1 Year

5. Ms. Sharon Crooks

CREDIT COMMITTEE Terms of two members of the Credit Committee came to an end:

Retiring Recommending Term 1. Mr. Quinton Masters

Mr. Quinton Masters

2 Years

2. Mr. Richard Ranger

Mr. Richard Ranger

2 Years

Both gentlemen have indicated their willingness to continue to serve and are therefore being recommended to serve on the Credit Committee for an additional term.

Beverly Stewart Chair, Nominating Committee

Patricia Ramsaran Member Representative

Basil Naar Staff Representative

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ANNUAL REPORT 2014

Report of the

Delegates on JCCUL’s AGM JAMAICA CO-OPERATIVE CREDIT UNION LEAGUE LTD. 2014 CONVENTION & 73rd ANNUAL GENERAL MEETING Held MAY 15-18, 2014

Highlights

he Jamaica Co-operative Credit Union League’s 73rd Annual General Meeting was held from May 15-18, 2014 at the Hilton Rose Hall Hotel & Spa in Montego Bay. It was held under the theme: “Credit Unions Unite for Good...A Better Way.” Approximately one hundred and fifty (150) delegates and observers attended the week-end meeting. The schedule of activities was as follows:

Thursday, May 15

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• The opening of the Trade Show was the start of the weekend event. It continued until Saturday evening. • The Quality Network Co-operative (QNET) held its annual general meeting. • The other sessions for that afternoon continued with a presentation on the the impact of the Logistics Hub on the Jamaican Economy in general and Credit Unions in particular by Dr. Fritz Pinnock, Executive Director of the Caribbean Maritime Institute. A Panel Discussion followed. The topic: “What are the significant implications for the credit union sector of the Government’s fiscal & monetary policy reform initiatives outlined in the Memorandum of Economic & Financial Policies/ Technical MOU with the IMF?” The Panellists were: • Mr. Ralston Hyman: Journalist & Member of the IMF Oversight Committee • Mrs. Jacqueline Mighty: CEO – COK Sodality Co-operative Credit Union • Rev. Dr. Paul Gardener: President Moravian Church in Jamaica • Mrs. Helene Davis-Whyte: Vice President of the Jamaica Confederation of Trade Unions

The evening ended with the Centralized Strategic Services Company (CSS) holding its annual general meeting.

Friday, May 17 Friday started with the Official Opening of the Convention, chaired by Mr. Winston Fletcher, 2nd Vice President, JCCUL. The Keynote Speaker was Milton Hunt, President of Hunt International, Baltimore MD, who presented on the theme “Leading is not following...It’s moving beyond where you are to where you need to be”. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

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The Credit Union Fund Management Company (CUFMC) held its annual general meeting. A presentation “The new cyber environment: the Credit Union’s management of this new dynamic sphere” followed. The presenter was Mr. David Hall, President, Institute of Internal Auditors (IIA) Jamaica. The second workshop was entitled “Governance as Leadership-Creating the Jamaican Credit Union of the Future”. Presenter was Mr. Michael Daigneault, CEO Quantum Governance L3C, Washington DC. The workshops ended with a session entitled “It’s here- The Mobile Wallet, Convenience at your fingertips”. Presenter was Mr. Kavin Hewitt, CEO, Mozido Jamaica. The annual Awards dinner ended the day. At the annual awards dinner a number of Credit Unions received awards in the Credit Union of the Year awards competition: Four Credit Unions won in the categories of Mega Credit Union, Large Credit Union, Medium-sized and Small Credit Union. The OJ Thorbourne Trophy for Mega Credit Union of the Year award was made to JTA Co-operative Credit Union, for a fourth time, while Manchester Co-operative Credit Union was declared the runner-up in the category. In the Large Credit Union Category JDF Credit Union shot to the top and captured the Renford Douglas trophy ahead of NCB Employees Credit Union that emerged the runner-up. At the same time the Paul Thompson trophy for Medium-sized Credit Union of the Year was presented to BJ Staff Co-operative Credit Union, with Grace Employees Credit Union taking home the runner-up award. The final award, the John Peter Sullivan Award for Small Credit Unions went to Church of the First Born Co-operative Credit Union and D&G Employees Co-operative Credit Union was declared the runner-up. Six sectional prizes were awarded to credit unions that outperformed their peers in various aspects of their financial operations as follows: • Highest Net Capital Growth - C&WJ Credit Union • Highest Asset Growth - C&WJ Credit Union • Credit Union with the highest Solvency -D&G Employees Credit Union • Credit Union with the highest Return on Assets- Portland Credit Union • Parish Credit Union with the Highest Net Loan growth - Portland Credit Union • Most Outstanding Parish Credit Union - Manchester Credit Union.

The audience was entertained by saxophonist and singer Everton Pessoa who charmed the audience and had persons dancing the night away.

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Saturday, May 18 - Annual General Meeting The Annual General Meeting was chaired by President Derrick Tulloch who did a multimedia presentation summarising the Board report. All aspects of JCCUL’s operations were presented and examined. RULE AMENDMENTS A number of rule changes were proposed for discussion at the 2014 annual general meeting. They include: Rules 3(1) To change “CUNA Mutual Insurance Society” to “CMFG Life Insurance Company” to reflect the current name of the company Rule 37 To delete the references to membership as the peer groups are based on assets. Rule 41 a) To clearly indicate the bases on which a Director should vacate his office. b) To delete references to parish credit unions c) To provide for the verification that League Directors are in good standing with their credit unions.

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Rule 48 a) To provide for persons other than Directors to be appointed to League committees and to remove the delegation of Board powers to committees. (b) To provide for Committee members to be in good standing with their credit unions Rule 70 To change the composition of the Stabilization Committee to provide for persons internal to JCCUL to sit on the Committee. This Committee has as one of its responsibilities, the review of the performance of credit unions that are in difficulties and issues directives and recommendations to such credit unions. Condolence and congratulatory resolutions were passed on behalf of credit unions for volunteers that had served credit unions.

Sunday, May 19 - Ecumenical Service The Ecumenical service took the form of a Praise & Worship and breakfast. It was very well attended and was conducted by the Chaplin of the Police Force stationed in Western Jamaica along with police personnel. The Closing plenary session was presented by Mr.s. Linda Webb-Manon, Vice President Communications and Public Relations, Cornerstone Credit Union League, Texas USA. Her theme was “Discerning Member needs...the key to member loyalty”. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

New JCCUL Board The following Directors were elected to serve on the League Board for the ensuing year: • • • • • • • • • • • • • • •

Derrick Tulloch - President Carol Anglin -1st Vice President Winston Fletcher - 2nd Vice President Andrea Messam - Treasurer Wilburn Pottinger - Assistant Treasurer Rodcliffe Robertson - Secretary Dr. Dorothy Raymond - Assistant Secretary Martin Blackwood Paul Gardner Norris Gilbert O’Neil Grant Jerry Hamilton Clide Nesbeth John Spence Yvonne Ridguard Harris

The Supervisory Committee Members who were elected to serve for one year were:

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Ms Nicola Reid (Chairman) Mr. Paul Nathan Mr. Robert Ramsay Mr. Sefton Cummings Mrs. Tamara Baugh-Brissett

Basil Naar Orville Hill Delegate Delegate

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Unit Managers Unit Managers Mr. Isakalu Duffus Manager - Information Systems Mr. Garfield Pearson Manager - Accounting & Treasury Mrs. Sophia Richardson Manager - Micro & Small Business Loan Unit Mrs. Rosemarie Samuels Manager - Human Resource Development Mr. Claud Sawyers Manager - Sales & Services Ms. Marlene Wong Manager - Credit Administration & Loan Risk

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Branches & Branch Managers Branches

Kingston & St. Andrew

Address

Branch Managers Mr. Rudolph Cox

8-10 Eureka Road Kingston 5 Lawrence Tavern Lawrence Tavern P.O. St. Andrew

Mr. Rayon Wright

20 Dominica Drive Kingston 5 10 East Avenue Kingston 4

St. Thomas 26 Queens Street Morant Bay FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

Mrs. Melissa Miller Mr. Norman Williams

ANNUAL REPORT 2014

Branches

Address

St. Catherine

Unit 13 6 March Pen Road Oasis Shopping Centre, Spanish Town

Shops 8 & 9 East Side Street Old Harbour

Clarendon

Shops 5 & 6 Bargain Village Plaza May Pen

Branch Managers

Lot 57 West Trade Way Mr. Phillip Smith Portmore Town Centre Mr. Mendel Thompson

Mr. Eugene Williams

Manchester 2 Perth Road Mandeville

Mr. Andre Sampson

St. James

Mrs. Marcia Bailey

21 Union Street Montego Bay

FHC Investments Limited Kingston

Suite 27 Mrs. Anita Chong Winchester Business Centre 15 Hope Road Kingston 10

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Parliamentary Rules of Order 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

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No motion or discussion shall be allowed on the Minutes except in regard to their accuracy. After the confirmation of the Minutes, they shall be signed by the Chairman, and the members shall than be at liberty to ask any questions in regard to matters arising out of them. Such questions shall be allowed for purposes of information only, and no debate on the policy outlined in the Minutes shall take place.

4. All persons desiring the floor shall rise and address themselves to the chair. They shall

state their name and the Credit Union which they represent, if recognized by the chair, they shall have the privilege of the floor and all the rights thereof.

5. All speakers are to make use of the Desk and Floor Microphones when addressing the Meeting in order that it be recorded and made a permanent record in the Meeting Proceedings.

6. Should two or more persons rise at the same time, the chair shall decide, without

debate, who is entitled to the floor.

7. SPEECHES No member shall be allowed to speak more than once upon 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. FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

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.

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

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

15. RIGHT OF REPLY The mover of the Original Motion shall if no amendment be moved, have the right of reply at the close of the debate upon such motion. When an amendment is moved he shall be entitled FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED

ANNUAL REPORT 2014

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

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

18. ADJOURNMENT Any member who has not already spoken during the debate may move the adjournment of the question under discussion, or of the meeting, but must confine his remarks to that question and must not discuss any other matter. The mover of the motion upon which the adjournment has been moved, shall be allowed the right to reply on the question of the adjournment, but such reply shall not prejudice his right of reply on his own motion. In the event of such motion being lost, it shall not be moved again, except in accordance with Standing Order 18.

19. Any member may call for a division of the House (that is, for a roll call vote) when

there appears to be a reasonable doubt as to the accuracy of the vote as announced by the Chair.

20. A motion to lay on the table shall be put without debate. 21. Whispering, loud talking, or other disturbances calculated to disturb anyone while speaking will not be tolerated.

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Obituaries Gloria Allen Sibbil Bailey Errol Bailey Lloyd Bartley Anthony Brown Theophilus Brown Colleen Brown Theophilus Brown Bertie Bryan Dacota Cain Rose Marie Cameron Roy Campbell Ira Campbell Mildred Campbell-Morris Calvin Carter Jermaine Christie Olive Collington Novelette Coombs Godfrey Coombs Peter Creary Bernard Davis Rose Davis Maxine Davis Delroy Dennisur Antoinette Dixon Jean Douglas Ryan Durrant Derrick Dyer Carmen Edwards-Facey Laurette Edwards-Foulks Carol English-Miller Rupert Francis Lorene Francis Patricia Gentles Elaine Gray-Rochester Lucille Green Claudette Griffiths Marcia Griffiths Veronica Hall Headley Hamilton Myrtle Hardy

Anthony Harvey Vincent Henry Marcia Higgins Peter Honeygham Donald James Lorna Johnson Melvin Jones Brown Kenneth Denniston Lawrence Hazel Lewis Franklyn Lloyd Victoria Maragh Owen Marriott Marjorie Mcbean Aluna Mccain Linette Mccalla Thomas Mchayle Arthur Mckenley Donald Mclean Roy Mcrae Robert Mendez Clive Moncrieffe Jennifer Montaque Beresford Morgan Sonia Morgan Ian Morgan Sonia Morgan Janique Morrison Victor Newman Leighton Nicholson Walker Norman Shirley Palmer Dale Peart Gawaine Peart Arthur Pessoa Joslyn Pink Alphanso Pusie Arleen Roberts Jarrett Roberts George Robinson Roy Robinson

Elaine Rochester Stephen Rowe Davia Shouter Simone Simpson Ian Smith Lynden Smith Daphne Smith Samuel Steer Samuel Stewart Michael Stoddart Dudley Strachan Shaunett Taylor Owen Thomas Joy Thompson Kim Thompson Norma Todd Icilda Virgo Sheena Wauchope Lileth Williams Carlos White Celome Wilson Beverley Reid-Michael

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PRAYER OF ST. FRANCIS OF ASSISI

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

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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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Notes

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FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED