Fhccu 2013 annual report by TMC Digital

Table of Contents Page

Vision, Mission

Notice of Annual General Meeting and Agenda

Life Charter - Products & Services

Profile - First Heritage Co-operative Credit Union Limited

Minutes of Annual General Meeting

Report of the Board of Directors

Board of Directors

Highlights of FHC’s Foundation Launch

Leadership Team

Management Report

FHC Investments Limited

Highlights of FHC’s Reading Week

Highlights of FHC’s Can Drive

FINANCIAL STATEMENTS

Report of the Supervisory Committee

136

Report of the Treasurer

Report of the Credit Committee

Report of the Nominating Committee

Report of the Delegates on JCCUL’s AGM Unit and Branch Managers Obituaries

133

138

141

145 147

Parliamentary Rules of Order

148

Prayer of St. Francis of Assisi

151

Notes

152

NOTICE OF MEETING Notice is hereby given that the 2nd Annual General Meeting of First Heritage Co-operative Credit Union Limited will be held on Tuesday, May 13, 2014 at the Jamaica Conference Centre, 14-20 Port Royal Street Kingston, beginning at 3:00 p.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

Chairmanâ&#x20AC;&#x2122;s Opening Remarks and Obituaries

Reading and Confirmation of the Minutes of the Annual General Meeting held on Tuesday, July 23, 2013

Reading and Confirmation of the Minutes of the Special General Meeting held on Tuesday, February 18, 2014

REPORTS: Board of Directors Management Treasurer and Auditor - Distribution of Surplus Credit Committee Supervisory Committee

ELECTIONS: Nominating Committee Report Elections to: Board of Directors Credit Committee Supervisory Committee

Any Other Business

Vote of Thanks

Adjournment

PROFILE - FIRST HERITAGE CO-OPERATIVE CREDIT UNION LIMITED First 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 Co-operative Credit Union Limited and now stands at an asset base of $8.95B. FHCâ&#x20AC;&#x2122;s bond includes: a) All members of any religious bodies and affiliations in Jamaica and their families/relatives; b) all Public Sector Employees, past and present, regardless of their terms of tenure, employed to Ministries/Departments/Agencies/Statutory Bodies/Public Corporations and their families/relatives; c) all Professionals, their families/relatives and their employees and their families/relatives; d) all members of Professional Associations affiliated to the Public Sector, their families/relatives and the employees of these Professional Associations and their families/relatives; e) all Public Sector Consultants and their families/relatives; f) all Public Sector Contractors and their families/relatives; g) employees, past and present, of the Credit Union and their families/relatives; h) all Registered Co-operative Societies and members of these Societies.

The Credit Union has a membership base of just over 180,000 across a network of twelve (12) locations strategically located across the Island, offering a suite of forty-two (42) products and services. Our extensive array of products, services include a variety of loans and savings, investment options from our 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 companyâ&#x20AC;&#x2122;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 its products and services to meet the needs of clients. These include:

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 approximately $1.4B. Retirement Planning Scheme

The Churches Co-operative Credit Union Retirement Scheme referred to as “the Scheme” was established by Churches Co-operative Credit Union Limited as a defined contribution plan with effect from June 1, 2004 by Trust Deed to provide pension benefits for members and their beneficiaries at retirement and ancillary benefits in the event of death or termination.

Since August 1, 2012, FHCIL has been the Administrator and Investment Manager of the Scheme. Between December 2012 and December 2013, the funds under management grew by over 15% to approximately $400M with contributors in excess of 4,000 and 50 Pensioners as at December 2013. The Scheme’s continues to target self-employed individuals and those who are employed in non-pensionable posts. The strategic objective of the Scheme is to ensure more Jamaicans 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 5

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 3000 loans to members totaling over $300M. It currently has a portfolio of approximately $184M. It is FHCâ&#x20AC;&#x2122;s strong belief that a strategy embodied by the spirit of entrepreneurship is vital for the stimulation of our economy. 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 one-stop 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.

LIFE CHARTER - PRODUCTS & SERVICES

MINUTES OF THE ANNUAL GENERAL MEETING Minutes Of Meeting For 1st Annual General Meeting Of The First Heritage Co-Operative Credit Union Limited Held On Tuesday, July 23, 2013 At The Jamaica Pegasus Hotel 81 Knutsford Boulevard, Kingston 5

1. Ascertainment of Quorum & Call to Order

The Chairman, Mr. Orville Hill, indicated that there was a quorum and confirmed that there were three hundred and nineteen (319) members registered. He called the meeting to order at 3:05 p.m. and invited Mr. Edmund Jones, Secretary of the Board of Directors, to read the notice of the meeting. Mr. Jones then highlighted an amendment to the Agenda which included the prayer and reading of the Minutes. The amendments were accepted on a motion moved by Mrs. Sophia Richardson and seconded by Ms. Janyce Robinson. 2. Invocation

Rev. Rudolph Cox, Manager for the Spanish Town Branch, offered prayer and Mrs. Almetta Johnson-White, Member Service Supervisor at the Kingston Gardens Branch, sang the National Anthem. 3. Welcome and Opening Remarks

The Chairman extended a warm welcome to members and guests in attendance and directed their attention to the Parliamentary Rules set out on pages 143-145 of the Annual Report, which he said would guide the conduct of the meeting.

He said that he was pleased that the transition following the merger was successful. He said that in planning for the year ahead, there were some important things that must be shared with the membership.

He informed the meeting that an Interim Board was appointed and the members were nominated from the two Boards of the former credit unions â&#x20AC;&#x201C; Churches Co-operative Credit Union Limited (CCCU) and GSB Co-operative Credit Union Limited (GSB). He said the names of the nominees were submitted to and approved by the Registrar of Co-operatives and that an opportunity would now be given to members to elect volunteers to lead the organization.

Mr. Hill apologized for the late presentation of the Annual Report and the meeting being held so late in the year which, he said, was due to the delay in the completion of the audited financial statements. He explained that this was the first real merger in the credit union movement as, historically, such events were actually Transfers of Engagements, where one credit union transferred its portfolio to another credit union. In our case, we had two distinguished and established credit unions, coming together to form a new credit union which was an ideal merger situation. As a result, the treatment of the financials called for the application of the International Financial Reporting Standards (IFRS) which required our Auditors to consult extensively with their corresponding firm in the United Kingdom (UK) and that in itself was time consuming. The Chairman introduced members of the Board of Directors who were present. 4.

Apologies for Absence

Apologies for absence were tendered on behalf of the following Directors who were unable to attend due to various commitments, some of which related to travelling:

Mr. Christopher Samuda Mr. Michael Roofe Miss Angella Ching Mrs. Carmen Facey Mrs. Valerie Viera Mr. O’Neil Grant Mrs. Yvette Sibble-Brown Mr. Michael Parker

– 1st Vice Chairman – 2nd Vice Chairman - Asst. Secretary

– Asst. Treasurer

He also tendered apology on behalf of Mr. Basil Naar, Chief Executive Officer, who was absent due to illness. Apology for lateness was tendered on behalf of Supervisory Committee members, Mr. Dwight Sibbles and Mrs. Sonia Campbell who would be late.

Mr. Hill introduced Mrs. Maria Morrison, Acting Chief Executive Officer, members of the Supervisory and Credit Committees and members of the Management Team who were present. He commended the Management Team for going beyond the call of duty to ensure a smooth transition subsequent to the merger.

A moment of silence was observed for stalwarts in the movement who passed on during the year. 5. Confirmation of the Minutes of Special General Meeting

The Chairman asked Mr. Edmund Jones, Secretary, to read the minutes of the Special General Meeting held on August 30, 2012. A motion that the minutes be taken as read was moved by Dr. Leo-Paul Powell, seconded by Mr. Quilston Harrison. There were no corrections

to the minutes which were confirmed on a motion moved by Ms. Novelette Bailey, seconded by Rev. Major Garnett Kildare.

6. Board of Directors’ Report

The Chairman commented on the process of the merger which took effect on August 1, 2012 and indicated that this could only have taken place with the support from the membership. In relation to the financial performance, he said the credit union realized a Net Surplus of $61.92M; Capital grew to $1.38B; Net Interest income increased by $213M to $738M; Loan portfolio increased to $6.33B, representing 75% of total assets, while Ordinary Shares and Deposits stood at just under $6B.

The Chairman informed the meeting that there was a subsidiary investment company, formerly CCCU Investment Limited, a wholly owned subsidiary of the former CCCU which was renamed FHC Investments Limited (FHCIL). The services offered by the company include; money market investments, bonds, stocks, mutual funds, portfolio and pension fund management. FHCIL reported a loss of $10.8M due to an increase in operating costs incurred because the company began covering its own expenses which were previously covered by the credit union. This commenced after the implementation of clear separation of duties and responsibilities between the credit union and the investment company, as required by the Financial Services Commission (FSC). Mr. Hill spoke about the Credit Union's corporate and social responsibility initiatives which focused on education. He said that in keeping with the commemoration of Jamaica’s 50th year of independence, 50 basic schools were each granted $50,000. Additionally, 17 students were awarded GSAT scholarships at a total cost of $620,000 and 7 final year university students received a total of $1.5M. Support was also given to university students through our entrepreneurial program and various communities benefited from our numerous outreach projects. The Chairman told the meeting that the Credit Union’s vision was to become a world class institution and as such we would constantly seek to improve service quality, raise the productivity level of staff, increase our reach in the marketplace and be more creative in our marketing initiatives.

In closing, he acknowledged a number of partners including the hard working and dedicated volunteers, management and staff, liaison officers, our Auditors- PricewaterhouseCoopers (PwC), the Co-operative Department and the Jamaica Co-operative Credit Union League (the League).

The Report was accepted on a motion moved by Mr. Eric Heslop, seconded by Rev. Major Garnett Kildare. The floor was then opened for questions.

Mr. Eric Heslop, a member, enquired about the $10.8M loss made by FHCIL. He also asked for a perspective on the foreseeable future of the entity and wanted to know the staff 13

complement before and after the separation of duties and responsibilities. The Chairman explained that there was a process which had to be followed in order to receive all the necessary licensing and approvals for the investment company which allowed it to go into the market and effectively start trading. During that interim stage there was not much trading, so very little business was being done. He said that having now received the license from the FSC, there had to be a clear separation of certain responsibilities from the operations of the credit union and it therefore required FHCIL assuming its own staff and other expenses. Rev. Major Garnett Kildare asked if the merger was the first of its kind in Jamaica or the Caribbean. The Chairman said he was yet to identify another, not only here in Jamaica, but in the Caribbean or even in the UK. The member congratulated members of the Board of Directors on their attendance at Board meetings.

Member, Mr. Latham, asked if there was the likelihood of the investment company going public, to which the Chairman responded, â&#x20AC;&#x153;Not presentlyâ&#x20AC;?.

Mr. Wayne Walker, a member, asked why there was a maintenance fee being charged twice per year on his account and why no notification was given. Mrs. Maria Morrison, the Acting Chief Executive Officer, responded that when the merger occurred, some fees were unique to each of the credit unions so a way had to be found to set those fees at a rate that would be reasonable to all. She said the maintenance fee was charged twice per year initially but was now being charged monthly. This, she advised, was indicated in a notice placed in all branches. Some members said they did not see the notice and requested that such notices be sent out in the same way notices were sent for meetings. Mrs. Morrison apologized for the unsatisfactory handling of the matter.

Ms. Kimberly Thompson, a member, asked that she be reimbursed the maintenance fee deducted from her account which she said was more than the sum for one year. Ms. Thompson was asked to speak with her branch on the matter. Rev. Oswald Thorbourne, a stalwart credit union member, said he was still complaining about the fact that FHC still did not fully consider itself a part of the International Credit Union movement by not including the movementâ&#x20AC;&#x2122;s Hands & Globe logo more prominently in our literature. He also sought a response as to when accounts would be merged.. The Chairman responded by saying FHC would be demonstrating its involvement in the International Credit Union movement every step of the way. Regarding the merging of accounts, this, he said, is being addressed by management.

The Chairman invited Mrs. Morrison to present the Management Report.

7. The Management Report Mrs. Morrison commented on some of the environmental challenges which the Credit Union faced during the year. These included but were not limited to increased competition in the financial sector and the delayed signing of the International Monetary Fund (IMF) Agreement, which contributed to increase lack of confidence in the market. She said in spite of all these

and other challenges the Credit Union performed creditably. Mrs. Morrison said the key objectives of the merger were economies of scale, improved product and service offerings, greater level of efficiencies and a more competitive force in the financial sector. She indicated that some of the immediate benefits of the merger to the members included, expanded branch network, increased variety of products and services, 24-hour Member Care Centre and earlier opening hours at the Eureka/ Ripon Branch. She commended the management and staff for their continuous commitment and dedication which resulted in a seamless transition. Mrs. Morrison highlighted aspects of the financial performance which she said would be elaborated on in the Treasurer’s Report.

Mrs. Morrison said the organization was now using the Balance Scorecard methodology as the performance management tool which outlines, monitors and measures the achievement of the objectives and initiatives in our Strategic Plan. This methodology also facilitates strategic alignment to our Mission and Vision and ensures team members know what is expected of them. She indicated that the Credit Union believed that superior customer service delivery would be what distinguished it from other financial institutions and every effort would be made to make the Credit Union a world class organization.

Mrs. Morrison commented on the development of the Credit Union’s Quality Advantage (QA) Handbook and the QA program which was done to assist team members to improve their customer service skills and enhance customer service delivery to our members. She said that all team members were being retrained to be able to deliver service excellence. Mrs. Morrison presented highlights from the reports for the Strategy and Corporate Affairs; Finance, Administration and Facilities; Operations, Risk, IT and Compliance; Mortgage Services and Credit Administration and Loan Risk Divisions.

She highlighted the following key components of the Credit Union’s Strategic Plan. • Strong focus on improving our customer service delivery • Establishment of a Venture Capital Fund • Revamping of the loan process to gain greater efficiencies • Implementation of a new core Information Technology System • Renovation of the New Kingston Branch

Mrs. Morrison mentioned that the outcome from the recent Customer Service Survey resulted in management placing increased emphasis on improving customer service delivery. She said as part of the strategy to become world class the leadership of the Credit Union would very shortly dedicate a department with a mandate to focus on improving customer service delivery. A Member Complaint Hotline would also be implemented shortly. In addition, she indicated that Service Guarantee Standards would be exhibited in all branches to assist members to hold the Credit Union’s management accountable for inefficiencies.

She concluded her report by stating that although the year commenced and continued with various environmental and economic challenges in the financial landscape, the merger provided added ammunition to combat the challenges.

Mrs. Winsome Slack, a former staff member, enquired why contractual workers were not paid their gratuity. Mrs. Jillian Gayle, General Manager â&#x20AC;&#x201C; Human Resource Development, responded that that should not have been the case because as far as she knew all contractual workers were paid their gratuity, which had since been replaced by performance incentive payment. She promised to look into the specific case mentioned.

Mr. Philbert Smith, a member, enquired why fifty percent of his pension had not been accounted for and why it took so long for him to get his statement. Mrs. Morrison said the issues raised would be investigated and asked that his name and number be taken and the matter dealt with urgently.

Mr. Eric Heslop wanted to know the measurement tools used to evaluate the success of the merger as it relates to economies of scale. Mrs. Morrison responded that they were able to compare the before and after merger expenses. She gave the example of the Marketing expense which she said would have been a combined amount of approximately $50-$60M per annum but after the merger the spend was approximately $40M.

Ms. Nicoy Lewis, a member, asked if the New Kingston Branch could be opened earlier in the mornings and why her accounts were not yet merged. She said the New Kingston Branch was too small and that the staff was stretched thin, making the process very slow. Mrs. Morrison responded that the branch would shortly be renovated and the comfort level of staff would be enhanced and the member service experience greatly improved. With regards to the early opening hours for the New Kingston Branch, Mrs. Morrison said that a survey was conducted which did not establish that need at this time. Mr. Quilston Harrison, General Manager, Retail, Sales and Service Delivery explained the process for merging accounts and encouraged members who had more than one account to visit their nearest branch to facilitate the merging of those accounts.

Another member raised a number of concerns including the discontinuance of the mailing of annual statements, deduction of fees from accounts, the inability of some members to access statements online and the inability of some persons to get meeting notification via print media. In responding, Mrs. Morrison said that the mailing of statements was discontinued due to the cost involved in doing so and the Credit Union did not want to impose an additional fee for the mailing of these statements. Members were encouraged to access statements online or request them through our 24 Hour Member Care Centre. As it relates to the deduction of fees from accounts, Mrs. Morrison indicated that the fees were necessary as they helped to offset operational expense. In response to the matter regarding meeting notification, Mrs. Morrison said the notification

was communicated through several media including emails, notices to all government agencies, the Gleaner and Observer newspapers, among others. We also ensured that we started this process two months prior to the meeting. The member also asked that the key for the transaction code be included in the statements. Mrs. Morrison indicated that this would be done.

Ms. Belva Moodie enquired about how much a memberâ&#x20AC;&#x2122;s beneficiary would receive from Shares, if the member dies leaving two accounts which came about as a result of the merger. Mr. Harrison, in responding, said if the accounts were merged, then the amount would be less. He pointed out however, that with the merger, there were more benefits than costs. He added that the Credit Union had also sought to increase the Life Savings Insurance limit.

A member asked how long they would have to wait for the Credit Union to offer United States (US) denominated and other hard currency accounts. Mrs. Morrison said she was not sure as this would be explored on upon being regulated by the Bank of Jamaica, but indicated that US and other foreign currency accounts could be had at the FHC Investment Limited where the members could also buy US stocks and bonds. The member asked if funds could be sent by wire transfer into the account. The question was responded to in the affirmative. Another member enquired why the Eureka Road Branch no longer had a restroom. Mr. Harrison advised that the restroom was not taken away but was kept locked for security reasons and members who wished to use it may request the key from a representative of the Credit Union.

Mr. Gladston Brown, a member, enquired what percentage of the loan dies with the owner. Mr. Harrison responded that up to $1.5M would be paid off under the Loan Protection Insurance facility.

Rev. Major Kildare commended Mrs. Morrison on a dynamic and energizing presentation and for standing up to the rigors of the questions from the membership, to which the audience applauded. He enquired about the Rule Book for the Credit Union. He said he had not seen it and he had been to the Credit Union and asked for it but never received it. Mrs. Morrison said they were issued at the last meeting and more were available. She promised to see to it that he received one.

The Chairman complimented and congratulated Mrs. Morrison on her excellent delivery and handling of the Management Report. At this juncture he acknowledged the presence of guests from the Department of Co-operatives and Friendly Societies, including the Registrar, Mr. Errol Gallimore, from PricewaterhouseCoopers, the Jamaica Co-operative Credit Union League, the Press, Jamaica Credit Union Insurance Agency (JCIA) and CUNA Mutual Insurance Group Ltd. A motion to accept the Management Report was moved by Rev. Major Kildare, seconded by Ms. Juliette Shim. The Chairman invited Mr. Balvin Vanriel to introduce the Auditor and present the Treasurer's Report. 17

8. Auditor and Treasurer’s Report

Mr. Garfield Reece from the audit firm, PricewaterhouseCoopers, confirmed the Independent Auditor's Report on the consolidated as well as the Credit Union’s stand-alone financial statements which he said were set out on pages 47-129 of the Annual Report. The Auditor said that management was responsible for the preparation of the statements which gave a fair view of the financial performance of the Credit Union in accordance with International Financial Reporting Standards (IFRS) and in keeping with the requirements of the Jamaica Co-operative Credit Union League. Mr. Reece said the Auditor’s responsibility was to express an opinion on the financial statements based on the findings of the audit. The audit was conducted in accordance with International Audit Standards which required compliance with ethical requirements. It was performed in a manner that would give reasonable assurance that the financial statements were free from material misstatements.

He outlined the audit process and stated that, in the Auditors’ opinion, the financial statements gave a true and fair view of the financial position of the Credit Union as at December 31, 2012. He said that, as required by the Co-operative Societies Act, all information and explanations which they believed necessary for the purposes of the audit were received. Mr. Vanriel told the meeting that the Credit Union received a clean audit report for 2012 and asked for a motion for the acceptance of the Auditors’ Report. It was accepted on a motion moved by Rev. Major Garnett Kildare, seconded by Ms. Bailey.

At this point, Mr. Vanriel advised the meeting that the Treasurer’s Report could be found on pages 35-39 of the Annual Report, which had been circulated. He asked that the report be taken as read and requested a motion for its acceptance. The report was accepted on a motion moved by Rev. Major Garnett Kildare, seconded by Ms. Bailey.

The Treasurer gave highlights of the financial performance for the year 2012. He said that as a result of the merger the business combination was a historic event for the credit union movement and therefore International Financial Reporting Standards (IFRS #3) - Business Combination - was applied. He said that, in simple terms, in the context of the merger between CCCU and GSB, one had to be the acquirer and the other the acquiree. Based on IFRS definitions CCCU was the acquirer and GSB the acquiree. In keeping with certain conditions laid down by the standards by which we were guided, the financial results for 2012 included seven months of performance (January to July) for CCCU and five months of performance ( August to December) for the combined entity, FHC. He reported the following financial results: Net Surplus $61.92M Total Assets $ 8.44B Net Loans $ 6.33B Savings $ 3.14B Voluntary Shares $ 2.81B Institutional Capital $ 1.38B He also reported that the subsidiary, FHC Investment Limited, realized a net loss of $10.8M. 18

Mr. Vanriel said that in spite of the economic challenges resulting from the delay in the signing of the IMF Agreement, the increase in the unemployment rate and the depreciation of the Jamaican dollar, 2012 was a fairly good year for the Credit Union as the management and staff worked assiduously to achieve their goals.

The Treasurer reported that the past due rate was 8.06% compared to the PEARLS standard of 5%. He encouraged the members to make their loan repayments on time and invited them to discuss any difficulties they might be experiencing with the Credit Union. He said that the Credit Union continued to monitor the Operating Expense to Average Asset ratio which stood at 12.46% when compared to the PEARLS standard of 8%. He said that by 2015 the ratio should be in line with the standard.

In concluding, Mr. Vanriel reiterated the Credit Union’s commitment to offer high quality service to all members. He extended appreciation to the Registrar and the Auditors for their continued support and to the members for choosing FHC. The report was accepted on a motion by Rev. Major Kildare, seconded by Mr. Robin Levy. The floor was once again opened for questions.

Ms. Juliette Shim asked for an explanation on the transfers exceeding the income which would have resulted in an accumulated deficit of $8.93 million. Mr. Vanriel said that the details were on page 57 of the report, but went on to explain that the transfer which is done annually to Statutory Reserves was decreased from 30% to 20% which was $13M based on the final surplus. He said there were transfers to other reserves such as the Pension Fund maintained at the League as well as to dividend of $60.8M that was declared on Permanent Shares from 2011 but paid in the subsequent year.

Mr. Patrick Smith asked whether the merger expenditure of $61.8M was budgeted for and whether the merger costs were kept within the budget to which the Treasurer answered in the affirmative. Mrs. Maxine Little-Dixon, General Manager, Finance and Administration added that the merger cost came in under budget by approximately $11M. Mr. Smith further enquired if the adjustment was as a result of amortizing certain expenses rather than taking it in one year. Mrs. Little-Dixon responded that there were some intangibles, including GSB’s goodwill, which had to be brought to account for the five months since FHC had been established.

Mr. Heslop questioned the absence of the PEARLS Standards used to assess the Credit Union's financial performance from the report. Mr. Vanriel explained that the reason for the exclusion of the entire table of standards was due to the fact that the Credit Union was compliant with all except two ratios - Operating Expenses/ Average Assets and Past Due Loans.

Mr. Heslop requested information on signs of growth in terms of membership and the other ratios which were not mentioned in the report. Mr. Harrison responded that membership grew at the rate of 400 new members per month, on average, which was a little behind projection. Mrs. Little Dixon said that Liquidity ratio was 14% and Asset Quality ratio was 73%. Mr. Vanriel added that the Past Due ratio was 8.06% and the Earnings ratio was approximately 65%. The Treasurer’s Report was accepted on a motion moved by Rev. Major Garnett Kildare, seconded by Mr. Robin Levy. 19

Distribution of Surplus

The Treasurer directed the membership to a single page in the Annual Report on which the distribution of surplus was listed. He recalled a memberâ&#x20AC;&#x2122;s earlier enquiry regarding the negative accumulated surplus as a result of the transfers and said that, technically, the Credit Union would not be in a position to declare anything or seek approval at the meeting. However, he said, the Registrar had granted approval for the transfer of 10% of realized surplus from Institutional Capital to Distributable Reserve, allowing for the distribution of $13.99M. 5% would go to Permanent Share, dividend and the remainder to regular charitable donations. Mr. Vanriel then asked for a motion to be moved if the membership was in agreement with the distribution as outlined on the single page. A motion for the Distribution of Surplus as outlined was moved by Ms. Belva Moodie, seconded by Ms. Veronica Campbell.

Maximum Liability

The Treasurer proposed that Maximum Liability be fixed at 10% of Permanent Shares and Reserves. He explained that Ordinary Shares were now being treated as liability and the Credit Union was just setting a cap above which it could not extend itself. He sought a motion for its approval which was granted on a motion moved by Mrs. Tamara Francis Riley-Dunn, seconded by Ms. Heather Prendergast. He thanked the membership for their time and said he was looking forward to 2013 being an even better year. 9. Credit Committee Report

The Chairman invited Mr. Kevin Forbes, Chairman of the Credit Committee, to present the Credit Committee Report. The report was taken as read and accepted on a motion by Mrs. Beverly Stewart, seconded by Mr. Robin Levy. Mr. Forbes reported that the merged entity did very well during the period under review. He said loans amounting to approximately $2.3B were disbursed during the first half of the year and $1.4B during the period July â&#x20AC;&#x201C; December which brought the total loans disbursed for the year to a record $3.7B.

Growth was recorded in the Unsecured, Motor Vehicle and Personal Loans categories. The Micro and Small Business Loan category also recorded significant growth. Mr. Forbes said he was looking forward to the rollout of these loans to a wider cross-section of the country. He then opened the floor for questions.

Mrs. Norma.Bernard-Powell, a member, asked what was being done about the high rate of delinquent loans. Mr. Forbes stated that the main thing the Credit Union continued to do was to encourage members to come in and talk about their situations.

10. Supervisory Committee Report

The Chairman asked Ms. Valerie Cyrus, Chairman of the Supervisory Committee, to present the committee’s report. It was taken as read on a motion moved by Ms. Denise James, seconded by Ms. Desrene Moodie.

A member enquired whether the Supervisory Committee members conducted spot checks at the Credit Union. Ms. Cyrus responded that the Credit Union had an Internal Audit Department with which the Committee closely worked and spots checks were done by members of that department. The member asked whether the committee members, without the Auditors, did any spot checks. Ms. Cyrus said that the committee was involved with the cash count at the end of the year, but closer monitoring of the Credit Union’s activities was done via the various reports and minutes of meetings. The Chairman told the meeting that he had conversations with several persons within the Credit Union movement and from feedback he received he thought that the Supervisory Committee was one that was most indepth in terms of their work and research. He said the committee did an excellent job in serving the Credit Union. The report was accepted on a motion moved by Mr. Patrick Smith, seconded by Ms. Juliette Shim. 11. Delegates Report

The Chairman invited Mrs. Leodis Douglas, Director, to present the report from the 71st Annual General Meeting of the Jamaica Co-operative Credit Union League. The report was taken as read on a motion moved by Mrs. Tamara Francis Riley-Dunn, seconded by Ms. Janyce Robinson.

Mrs. Douglas highlighted some of the League’s achievements during the year. Chief among them were the establishment of the Centralized Strategic Services Limited; management of the merger of two credit unions and the re-branding of the movement. The League continued its lobbying efforts.

She also mentioned that the meeting recommended the establishment of the 70th Anniversary Scholarship valued at $70,000.00 each from the League’s surplus. Forty two (42) scholarships would be awarded to tertiary level students via each credit union. There were four congratulatory resolutions, four condolence resolutions and one approved rule change.

The report was accepted on a motion moved by Rev. Major Garnet Kildare, seconded by Ms. Natra Boyden.

12. Nominating Committee Report

The Chairman asked for a motion for the Nominating Committee Report to be taken as read. He said it could be found on pages 126 to 136 of the Annual Report. The motion was moved by Mrs. Jacqueline Pingue-Smith, seconded by Ms. Patricia Coley.

Mr. Hill told the meeting that the Chairman of the Nominating Committee was Mr. Christopher Samuda who was absent from the meeting because he was travelling. He said other members of the Committee were Mr. Basil Naar, staff representative who was ill and unable to attend the meeting and Mrs. Patricia Ramsaran who represented the members and who was also absent. In presenting the report, he highlighted the ten key criteria that were used to govern the deliberation and selection of the persons nominated. He read profiles of the nominees after which he asked for a motion to accept the report of the Nominating Committee. The motion was moved by Mr. Mark Hoilett, seconded by Ranger Latham. 13. Election of Volunteers

The Director of Elections, Mr. Errol Gallimore from the Registrar’s Office, was asked to conduct the election process. He outlined the ground rules for the election and advised the meeting that nominations from the floor would be subject to final confirmation from the Registrar’s office. He then opened the floor for nominations.

Mr. Michael Braithwaite nominated Mr. Eric Heslop, the nomination was seconded by Mrs. Winsome Slack who read a brief profile of the nominee. Mr. Heslop accepted his nomination. Mr. Gallimore asked Mr. Heslop and the other members nominated to the Board by the Nominating Committee if they would be interested in serving on the Supervisory or Credit Committees. Mr. Heslop responded “No”. No nominated member indicated an interest. Voting by ballot for the election of members to the Board of Directors commenced.

The floor was opened for nominations of Volunteers to the Credit Committee. There were no nominations from the floor and the members who were nominated by the Nominating Committee - Mrs. Dunbar, Mr. Masters, Mr. Ranger, Mr. Francis and Mrs. Maloney - were accepted on a motion moved by Mr. Patrick Smith and seconded by Ms. Sheryl-lee Gordon.

Mr. Gallimore invited nominations for the Supervisory Committee. There was no nomination from the floor and the members who were nominated by the Nominating Committee - Ms. Sharon Crooks, Mrs. Hope Ramsey-Stimpson, Mr. Dwight Sibbles, Mrs. Asre Stewart-Blake and Mrs. Beverley Williamson - were accepted on a motion moved by Mr. Gladstone Brown and seconded by Ms. Ionie Clarke.

The Director of Elections asked for a motion for the election of delegates to the Jamaica Cooperative Credit Union League to be done by the Board of Directors. The motion was moved by Mr. Patrick Smith, seconded by Ms. Juliette Shim.

Mr. Errol Gallimore gave the results of the election and congratulated those who were successful. The following members were elected to serve on the Board of Directors, the Supervisory Committee and the Credit Committee for the periods of tenure stated: NAME Orville Hill Leo-Paul Powell Tamara Riley-Dunn Kevin Forbes Oâ&#x20AC;&#x2122;Neil Grant Edmund Jones Robin Levy Beverly Stewart Leodis Douglas Balvin Vanriel Mark Gonzales Eric Heslop

SUPERVISORY COMMITTEE Ms. Sharon Crooks Mrs. Hope Ramsey-Stimpson Mr. Dwight Sibbles Mrs. Asre Stewart-Blake Mrs. Beverly Williamson

VOTES 411 402 401 399 387 386 384 383 373 373 360 310

TENURE (YEARS) Two Two Two Two Two Two One One One One One

TENURE (YEARS) One One One One One

CREDIT COMMITTEE Mrs. Marilyn Dunbar Mr. Quinton Masters Mr. Richard Ranger Mr. Noel Francis Mrs. Louella Maloney

14.

TENURE (YEARS) Two Two Two One One

Any Other Business

The Chairman opened the floor for questions. Mrs. Winsome Slack pointed out that the Agenda had the Appointment of the Auditors before Any Other Business. The Chairman reminded the meeting that the Agenda was amended and that item was removed since the appointing of Auditors was done through the Office of the Registrar of Co-operatives. 23

Mr. Dwight Orgill, a member, asked that the financial and monetary effect of the National Debt Exchange (NDX) on the Credit Union be quantified. The Chairman said the impact would be $11.43M but effort was being made to find ways to minimize the effect. Mr. James Scarlett, a member, said the Automatic Teller Machine (ATM) charges were too much for him. He said he was told to use the one at Eureka Road but it is not convenient and enquired when other ATMs would be installed elsewhere so that the cost to members could be reduced. Mr. Harrison explained that the Credit Unionâ&#x20AC;&#x2122;s ATM was part of a network and there were charges associated with it regardless of where one banked. He said some institutions were able to absorb the cost but due to the size of the Credit Union we were not able to do so at this time. Mr. Harrison promised to determine whether the charge levied by the Credit Union was the highest in the industry, as indicated by Mr. Scarlet. Mr. Patrick Smith made reference to the Acting CEOâ&#x20AC;&#x2122;s presentation in which she spoke of a new Information Technology (IT) platform and asked if consideration was being given to QNET, in which the Credit Union had an investment. Mr. Harrison said QNET was one of the providers short-listed. Mrs. Morrison said the providers of the CLARETI system was invited to submit a bid. Ms. Leonie Lamey wanted to know why she was paying a non-refundable sum of $9,500 for insurance when her loan was already insured. Mr. Harrison explained that the premium was for Personal Accident Insurance, which would cover the loan if the member became incapacitated and unable to repay the outstanding loan. This, he said, was different from the Loan Protection Insurance.

She also wanted to know why two processing fees were being charged for an unsecured loan and why an amount was required for Shares. Mr. Harrison responded that the Share component of the monthly loan repayment was to encourage savings which was the core business of the Credit Union movement. He told Ms. Lamey that he would meet with her at the end of the meeting to further discuss the issues she raised. Mr. Peryn Smith, a member, said members needed to be aware that a portion of the fees collected by the Credit Union was for the Government and not income for the Credit Union.

Member, Ms. Diana Washington, asked whether the final decision of the sum to be loaned to a member was made by the Loans Officer or the Credit Committee. The Chairman said there were a number of different levels at which loan applications were considered and approved and this depended on the amount being borrowed. Ms. Washington shared the experience she had when she applied for a loan. Mrs. Morrison remarked that her experience was unusual and asked Ms Janyce Robinson to speak with the member on the matter after the meeting.

Mr. Dwight Orgill asked whether FHC would continue the policy of waiving fees for senior citizens. Mr. Harrison said adjustments were made to some fees and there were discounts for senior citizens. He said a re-assessment of fees would be done to see whether they could be reduced. Mr. Orgill also asked that a ticketing system be implemented at the Portmore

branch to regulate the sequence in which members were served when they visited the branch. Mrs. Morrison promised that matter would be reviewed. Mrs. Racquel Banton-Salmon, a member and Liaison Officer at the Greater Portmore High School, enquired why sixteen year olds were being asked to submit identification and proof of address to reactivate their dormant accounts. She said these were children who were still attending school and most of them had only school identification. She said she did not think the sixteen year olds should be treated like the adults. Mrs. Morrison said the Credit Union was in the process of addressing that particular issue and that the matter would be resolved in short order.

Ms. Charlene McCalla, a member, asked that immediate changes be made to the loan processing fee. She said by voting for a merger, the members should get what they expected, instead they were getting all sorts of different things. She further commented that the Credit Union was losing members because of those things and something needed to be done because people were comparing bank fees and finding that FHCâ&#x20AC;&#x2122;s processing fees were too high. She added that she had been hearing that the New Kingston Branch was going to be fixed. She said she was for the merger but she was expecting better. Ms. McCalla also said she needed to get statements and she should not have to pay for them as everyone did not have access to the internet. She asked that the Credit Union to reconsider that matter. Mr. Ian Walters, a member, said that by looking at the financial statements and seeing the amounts for one year, compared to the next, he thought the Credit Union needed to look into cost control and cost containment, as well as how to be more effective and more efficient. He said that impacted the proposal for the distribution of dividend, which was only $7.32M.

The Chairman said that the figures spoke to numbers before and after the merger and included one-off costs incurred since the merger, which were reflected in the 2012 figures. He said when the merger settled down there would be synergies which would result in benefits and those would be evident in the 2013 financial performance.

Rev. Major Kildare asked members to be calm as the Credit Union was experiencing teething pains arising from the merger. He also suggested that the membership send Mr. Naar a get well card and a basket of roses. The membership agreed.

At this point the Marketing Department conducted a raffle for two baskets of goodies. The first prize was won by Mr. Price and the second by Ms. Windell Rose Wilson.

The Chairman informed the meeting that the Rules of the Credit Union were reviewed and recommendations for amendments were made in some areas and that a Special General Meeting would be held to consider the proposed changes. 15. Vote of Thanks

Mr. Johnathan Brown, Director, was asked to give the vote of thanks.

16. Adjournment

The meeting adjourned at 7:51 p.m. ________________________ Edmund Jones Secretary, Board of Directors

BOARD OF DIRECTORS

REPORT OF THE BOARD OF DIRECTORS The Jamaican economy started the year with an exchange rate of J$92.98 to US$1.00. During the year the value of the domestic currency continued on the downward trend and by midyear it surpassed the psychologically significant marker of J$100 to US$1.00 and closed the year at J$106.38 to US$1.00. The fall in the exchange rate of our domestic currency will have the effect of increasing the cost of imported items and ultimately lead to cost push inflation. At the same time, however, such depreciation can be beneficial to exporters.

The International Monetary Fund (IMF) Agreement which was signed in May 2013 highlighted two major conditions. These conditions demand from the Government significantly greater fiscal discipline and the acceleration of certain legislative changes. Legislation to bring credit unions under regulatory control of the Central Bank is expected to be enacted during the 2014 legislative year.

First Heritage Co-operative Credit Union Limited (FHC) commenced its second year of operation as a merged entity and held its first annual general meeting on July 23, 2013. The foundation and the operational framework of our Credit Union are well-established and we are now poised to fully realize the expected benefits of the merger.

Throughout the year, and despite significant challenges, we have never lost sight of the fact that the success of our business is predicated on our providing high-quality service to our members at all times. It is the quality of the service delivered that differentiates financial institutions and ultimately lead to improved financial performance.

As promised at our last annual general meeting, we introduced our Customer Service Division in September 2013. This is an important strategic initiative that will propel the Credit Union along a continuous growth path. We are confident and optimistic about the future and our ability to further develop the capabilities of the Credit Union, serve our communities and provide the best products and services to our members. We currently have a broad array of products and services being delivered through a network of ten (10) retail outlets island-wide.

We are living in a time when financial institutions are operating in a rapidly evolving competitive landscape, one which has forced people to more seriously consider their financial options and their financial institutions, as they seek to secure their future by maximizing returns on their investments.

The financial sector encountered numerous challenges during the year including increased taxation, reduction in the labour force, fluctuation in interest rates and the continuous decline in the value of the Jamaican dollar.

FINANCIAL PERFORMANCE

The Groupâ&#x20AC;&#x2122;s net surplus for the year was $103.53M compared to $54.24M (restated) for the previous year. This represents an increase of $49.29M.

It should be noted that the financials for the previous year have been restated due to the adoption of International Accounting Standard (IAS 19) Revised. This standard relates to the treatment of employee benefits and was adopted effective January 1, 2013, retrospectively.

Total assets are now at $8.95B up from $8.49B at December 2012. These assets are primarily invested with you, our members, in the form of loans which increased from $6.33B the previous year to a portfolio of $6.70B (inclusive of externally funded loans totaling $759.15M). Our investment portfolio of $1.35B is also significant. The figure 1.1 is a graphical representation of our Total Asset growth over the past three years. Fig 1.1

Deposits from our members increased from $5.95B in 2012 to $6.17B at Balance Sheet date. This increase of four percent (4%) may be considered negligible by many but we consider it a major investment in our institution. This is important for us members because we are operating in a very competitive marketplace in which the competitors continue to aggressively seek to gain a greater share of your respective wallet. I encourage you to stay the course and continue to invest in your credit union.

FHC stands proud with a capital base of $1.73B at Balance Sheet date, as represented in the figure 1.2. The credit union movement anticipates the transition of regulatory control to the Central Bank during the next calendar year and the strength of credit unionsâ&#x20AC;&#x2122; capital base will be a major area of focus for the new regulator.

Fig. 1.2

FHC Foundation

In December 2013, we launched FHC Foundation which reinforces our commitment to our vision, mission and corporate social responsibility. The birth of this new institution will focus on youth development, education and sport. At a time when the Jamaican youth population faces numerous challenges and the education sector needs all the support from the private sector, this new entity will definitely reduce the “burden” on the nation’s purse and predictably enhance the lives of many. OUR SUBSIDIARY – FHC Investments Limited

FHC Investments Limited (FHCIL), a subsidiary that is 100% owned by our credit union, now has a new home at the Winchester Business Centre located at 15 Hope Road, Kingston 10. This strategic decision allows for greater visibility and the establishment of a unique brand that will facilitate increase business in the near future. FHCIL is now four (4) years old and is now managing our Individual Retirement Scheme.

The company continues to deliver success-driven portfolio management services to its clients with a high level of professionalism and expertise. We encourage all our members to utilize these services should they choose to access these kinds of financial options, some of which are available in both foreign and local currency. CORPORATE SOCIAL RESPONSIBILITY

Our corporate social responsibility, as it relates to enhancing the communities in which we operate, was demonstrated through the implementation of a number of initiatives. These included but were not limited to:• Granting of five (5) new GSAT Scholarships valued at $500,000.00. • Continuation of twenty (20) existing GSAT Scholarships valued at $400,000.00. • Awarding the Renald Mason and Oswald Thorbourne Scholarships which totaled $1,500,000.00. • Awarding two Entrepreneurship Grants totaling $600,000.00. • Making a donation of $500,000.00 to the Bellevue Hospital.

Several other outreach programmes were undertaken as we focused on building our brand. We formed an alliance with the Social Development Commission and sponsored its series of Micro and Small Business seminars. We were also the main sponsor of a series of retirement planning seminars for Public Servants put on by the Jamaica Civil Servants Association. FHC will continue to be a good corporate citizen providing assistance to needy individuals and institutions within the communities in which we operate.

Your Credit Union is proud of its heritage and remains committed to continuously improve our customer service delivery; exercise excellent business acumen and help our members and their family members achieve their goals and aspirations. The year just ended will undoubtedly be remembered as a year when we managed our challenges and exploited opportunities.

In closing, your Board wishes to express appreciation to you, the members, for the confidence you have placed in us; to the Registrar of Cooperatives for advice and guidance; to the Jamaica Cooperative Credit Union League (JCCUL) for its leadership our Auditors, KPMG and CFMG Life (formally Cuna Mutual) for their services. In our endeavour to create benchmark standards for financial services in Jamaica, we will continue to demonstrate performances that build member loyalty and contribute to the success of our members as well as to the growth and development of our credit union.

__________________________________ Orville Hill-Chairman, Board of Directors 30

ATTENDANCE OF DIRECTORS AT BOARD MEETINGS

NAME

Orville Hill

Leodis Douglas O’Neil Grant

August 2013 – January 2014

TIMES POSSIBLE 8 8

TIMES ATTENDED 8 8 6

TIMES EXECUSED -

TIMES ABSENT -

Edmund Jones

Kevin Forbes

Robin Levy

Beverly Stewart LeoPaul Powell

Tamara Riley-Dunn Mark Gonzales Balvin Vanriel

8 8 8 8 8

8 5 4 6 7

3 4 2 1

LEADERSHIP TEAM

MANAGEMENT REPORT Having completed one year and five months as a merged organization, and in spite of the various economic and environmental challenges, First Heritage Co-operative Credit Union Limited’s performance was strong for the year ended December 2013.

As we reflect on the past year we recall a year that commenced with much uncentaintity as it relates to the economic conditions. While the world economy seemed to be on the recovery path the local economy appeared to have lost traction resulting in the Government’s offer of the National Debt Exchange (NDX) which affected the performance of the financial sector. Nevertheless, the team was motivated to redouble its efforts to ensure a favourable outcome in spite of the impact of the NDX and the uncertainties due to the late signing of the International Monetary Fund Agreement and its inherent implications. It is noteworthy however, that the year ended showing signs of growth in some key industries and for the country in general. During the year 2013 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.

We offered a comprehensive suite of forty two(42) products and services specifically designed to meet the needs of our members at every stage of life. These include Fixed Deposits, Mortgages, Motor Vehicle Loans , Micro and Small Business Loans, Pay Day Loans, , Retirement Plan, Youth Savings Accounts, Cambio Services, , and Investment Instruments through our subsidiary, FHC Investments Limited (FHCIL).

During the year our members benefited from enhancements to our suiteof products and services. We focused on building and strengthening relationships with our members as we implemented strategies for retention. This engagement resulted in the implimenting of our Customer Service Division lead by a General Manager with responsibility for improving the customer experience.

We redoubled our efforts in encouraging our members to use our social media channels such asFacebook and Twitter as we seek to increase awareness of our product offerings as well as provide financial advice. As we listen to our members, our objective is to make FHC, a one stop financial institution that caters to all our members’ needs.

FHC and its subsidiary FHCIL as a group performed creditably for the period January – December 2013 with a net surplus of $103.53M.

The year ended with members’ savings totaling $6.17B, a loan portfolio of $6.7B ($759.15M financed by external funding) and Group total assets of $8.95B.

Our commitment to generate continual benefits to our members and other stakeholders remained and these are just some of the examples that demonstrate that we are doing just that. As we look to a new financial year already predicted to be a challenging one, we are motivated and encouraged that through intensified efforts, execution of key strategies for growthas well as reducing expenditurewe are well on our way to a successful 2014.

STRATEGY AND CORPORATE AFFAIRS

The Division has responsibility for Strategy and Corporate Affairs which include but is not limited to, Strategic Planning, Project Management, Marketing and Communications, Contracts and Policy Management and Board Secretariat functions. The Division had 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 which would move, us closer to truly becoming the World Class financial institution for all our members.

Strategy

The Strategy and Corporate Affairs Division continued with providing strategic direction, support and a sense of focus on the objectives of the organization in the context of the challenging economic environment. The current Strategic Plan for 2013 to 2015 focuses on several growth strategies including, expanding the reach of our Micro and Small Business Loan offerings as well as our Individual Retirement Scheme which is managed and administered by our subsidiary FHC Investment Limited. Our subsidiary FHC Investments Limited was relocated to facilitate greater visibility and increase client comfort.

The Credit Union’s performance management system which is strategically linked to its mission, vision and core values also facilitates and motivates team members to consistently work towards greater effectiveness in achieving our goals and objectives. The Division’s key focus and achievements were as follows:

1) Measuring and improving customer service delivery 2) Developing, communicating and ensuring standards are understood 3) Increased team members’ awareness and understanding of their specific goals and objectives through the Balance Scorecard (BSC) methodology 38

4) Enhanced specific products and services to meet the needs of our members at every stage of life 5) Managing and executing in a project environment 6) Increased corporate social responsibility initiatives 7) Ensuring policies were properly documented and approved 8) Ensuring contractual agreements were properly executed 9) Implementing strategies which motivated the achievement of our financial objectives in the context of the challenging economic environment.

On average the Credit Union performed creditably and achieved approximately 80% of its objectives, in spite of the challenging economic environment.

Project Management

The chief accomplishment of this area was executing most of the Credit Union’s initiatives and key deliverable in a project Management environment. This was accomplished by projectizing all major deliverables, which included the renovation of the Mandeville, May Pen and New Kingston Branches as well as executing preliminary objectives for the purchase of a new core banking system in 2014 which is expected to be implemented in 2015. This project environment increased efficiencies by ensuring a systematic target-driven environment where objectives were achieved at the desired quality, within stipulated timelines and budget.

FHC Foundation

The FHC Foundation was launched on December 10, 2013. We are proud of the decision to launch our foundation which focuses on Youth, Education and Sport. The Foundation’s mission is “to promote the development of Jamaica’s youth, in particular dis-advantaged children and young people, through education, sport and community involvement, creating opportunities for growth towards the advancement of nation building”. As we focus on our youth, the future of our nation, our intention is to channel most of our Distribution of Surplus through the FHC Foundation. The Foundation’s vision is to “To transform lives through the creation of opportunities for the youth of Jamaica”. Together our Credit Union will be able to live this vision.

Marketing & Communications

As we continued to focus on building the FHC brand and create awareness within the market place, the year saw many engagements across a number of channels to promote our products and services across our membership base. The focus for the year relied heavily on public relations and the use of traditional and non-traditional and online methods to communicate our message. The use of social media, emails and text messages were also utilized. Our direct marketing drive saw us participating in numerous initiatives and outdoor events throughout the year; from these we garnered immeasurable publicity.

Our major promotion for the year started in January whereby we participated in the RJR Communications Group Cross Country Invasion. This we used to launch our “Six Love Promotion”. Numerous collaborations were undertaken as we sought to heighten our presence within the market place. • During the month of April we collaborated with the Jamaica Reading Association for Reading Week under the theme “Strengthening our Nation through Literacy”. Thirty (30) Primary and Preparatory Schools benefitted from our team members sharing classroom time with them reading. Coupled with this initiative the schools were also the recipients of donations of books which resulted from the FHC Book Drive “Today a Reader, Tomorrow a Leader”. Positive public relations exposure was received for this initiative as it also served to strengthen our Youth and School Savings Programmes. • The annual Parenting Seminar was held during the month of May. The theme for this seminar was “Nation on a Mission…Parents in Action”. This was done in collaboration with the Ministry of Education, Youth Opportunities Unlimited and The National Parent Teachers Association. • Focus was also placed on highlighting children who are differently abled. FHC also sponsored the annual Disability Conference of the Nathan Ebanks Foundation. • With the need to sensitize more persons on the importance of planning for retirement, a Memorandum of Understanding was entered into with the Jamaica Civil Service Association to sponsor and participate in their Retirement Planning Seminars across the island. Seven (7) seminars were held which were successfully held.. • A major collaboration was done with FHC, the Social Development Commission (SDC) and Caribbean Broilers to provide Micro & Small Business Workshops with major communities surrounding our branches. From the seven (7) workshops held three hundred and seventy five (375) lives were impacted some of whom have already become entrepreneurs. • The Entrepreneurial message was also highlighted as the annual collaboration with Caribbean Broilers was executed. Emphasis was placed on the sponsorship of the CB Pan Chicken Championship. This allowed the FHC Micro & Small Business Loans brand major exposure at all events as well as on air.

We continued to offer five year GSAT Scholarships to five Youth Savers. From a field of five (5) participating tertiary institutions, two (2) Entrepreneurial Awards were granted to final year students at Northern Caribbean University who presented the best business plans.

The year ended with our Can Drive Promotion under the theme “One Can, You Can, We Can”. Ten (10) barrels of canned products were donated to selected institutions.

As we seek to increasingly live out our mission, our emphasis is on finding ways in which we can impact our members. As such, much of the year 2014 will see our efforts concentrated on our corporate social responsibility activities especially in the communities in which we operate.

Our strategies for 2014 are focused on engaging and building relationships with our members while becoming an even stronger financial institution.

HUMAN RESOURCE DEVELOPMENT

The Human Resources Division continued its efforts to develop, empower and motivate our most valuable assets, our Team Members, towards excellent performance. One major objective has been and continues to be right-fitting our organization to ensure we have the right people, in the right position, who are consistently delivering superior performance. Consistent with this mandate, a number of programmes were introduced and existing ones enhanced during the year.

Leadership Development

The Management extended its initiatives for leadership development to include a Leader in Training Programme, which is an expansion of the Management Trainee Programme which now has an enrolment of twenty two (22) trainees. The programmes are geared at nurturing team members who display leadership skill, excellent work attitude and evidence of high performance.

We also continued to encourage camaraderie among our team members via the hosting of our Annual Team Member Quiz Competition, where departments and branches teamed up against each other, vying for the winnerâ&#x20AC;&#x2122;s trophy and cash prizes. This also facilitated increased knowledge of our new organization.

Training Initiatives

Quality Advantage/Service Excellence Programme

Our service excellence program is ongoing and through this medium the delivery of worldclass customer service is being realized. Our Quality Advantage Handbook continues to play an integral role in the daily re-enforcement of our core values, vision, mission and our customer service standards. Our Internal Certified Trainers commenced their mandate to conduct internal customer service training consistent with the reinforcement of our Quality Advantage/Service Excellence programme.

All Team Members, including the Executive Management, participated in our Quality Advantage Training during the year. This training programme was designed to ensure the consistent delivery of quality member service to all with whom we come in contact. This training has equipped team members to produce consistently high quality customer service, which will result in a higher degree of member satisfaction and member retention.

Sales Transformational Training

The Credit Union’s Sales Force was trained in Transformational Sales Techniques, including networking and solicitation. This training was designed to support the Credit Union’s Sales Team to build a portfolio of loyal members who are purposeful in their savings and other financial initiatives in order to meet their goals and objectives. Centre for Professional Development (CPD On-line)

Our web-based, state-of-the-art online training environment combines the ease of self-study training with expertly-designed Credit Union courses, and personal assistance. Our Center for Professional Development (CPD) Online is accessible 24 hours from anywhere. All courses and exams are done online and at any time one can view or even print one’s transcript.

These courses are geared towards enhancing member satisfaction, improving efficiencies and for individual development. During the year, all team members successfully completed a wide range of courses including: POCA, Introduction to Credit Unions, Member Service: Exceeding Expectations, Cross-selling, Transitioning from Staff to Management, Budgeting and Accounting for non-financial managers, and a host of other courses. Team members also ceased the opportunity to learn Spanish by completing the Spanish Course that is available on CPD Online. For 2013, there were a total of 9,808 activities combined inclusive of exams and courses. This accounted for an estimated 4,144 training hours on CPD Online.

Reward & Recognition Programme

Our Reward and Recognition programme was enhanced with the addition of the Customer Service Standard Temperature (CSST) Programme, where team members from all branches and departments were rated and scored based on the delivery of both internal and external customer service delivery. Winners were selected each month for all branches and head office units, and were rewarded accordingly. Our monthly and annual Reward & Recognition programme, which recognized team members whose performance have been outstanding, continued to offer both monetary and nonmonetary incentives, much to the delight of the awardees and their colleagues.

Team Members Welfare Wellness Programme

During the year our wellness programme was officially launched under the theme “Just for the Health of it ... Stay Strong, Live Long”. The programme encourages team members to practice healthy lifestyle and consist of a number of great initiatives including weight loss competition, yoga and aerobics classes to facilitate these objectives.

Social Responsibility

We continued our partnership with the Ministry of National Security & Justice/Social Investment Programme and Jamaica Social Investment Fund (JSIF) by providing placements for Interns during the year. We also continued our facilitation of high school students to conduct their on-the job experience programme in our Credit Union. We have also continued our efforts to assist the less fortunate by sponsoring feeding days and distributing Easter and Christmas Packages with the St. Stephen’s Feeding Programme. As we move forward into a new year, we commit to providing continuous improvement of our facilities for team members’ welfare and development.

CUSTOMER SERVICE & SALES DIVISION

It is undeniable that the journey towards achieving our vision of becoming a “world class” financial institution begins with how well we treat with both our internal customers (employees) and our external customers (members and other stakeholders) at all times. With this in mind the Leadership of the Credit Union established a Customer Service & Sales Division headed by a General Manager who is mandated to champion the cause of our members. This we believe will ensure our members receive the best possible service whenever they conduct business with us. The Division, which incorporates the Member Care Centre and the Wealth Development & Sales Unit, commenced operation on August 12, 2013. Its primary functions are: a) To ensure that we delight our customers with our service delivery; provide an avenue through which members can lodge their complaints and be assured that they will be addressed promptly and satisfactorily; encourage our members to provide us with both positive and negative feedback that would serve to motivate our employees and improve our facilities, product offerings and service delivery; promote timely and effective communication between the Credit Union and its members and other stakeholders. b) To ensure that we are easily accessible to our members and that information is always a telephone call or a click away. c) To ensure that our products and services are readily available to our members; d) To build stronger relationships with our members by institutionalizing our “personalized banking” service.

Some of the customer service initiatives pursued successfully since the establishment of the Division include: • The commission of a Customer Service Hotline and two dedicated telephone extensions for member feedback. The implementation of a tool, Customer Service Standards Temperature, used to measure each team member’s level of service

• •

delivery on a weekly basis. The establishment of a Member Feedback Register used to track feedback received and to measure the turnaround time for handling each issue. We were able to address each feedback received from our members within an average turnaround time of 24 hours. The publicizing of our Member Service Charter and Member Service Standards in each of our locations advising members of the length of time it should reasonably take to conduct their in-branch business or to complete their transactions.

Member Care Centre

Our Member Care Centre is the “voice” of the Credit Union and is the point of first contact for many of our members and non-members.

The role of the Centre expanded in 2013 to include telemarketing activities. The Telemarketers were particularly successful in getting members to re-activate their dormant accounts and to add other products and services to their portfolios.

Wealth Development & Sales Unit

The team members of the Unit were engaged in several promotional, social and networking activities as they sought to build and maintain strong relationships with our members and other stakeholders. They provided personalized visits to members who chose to conduct their business in the comfort of their own environment. Sales calls were made on a number of public and private sector organizations, including churches, schools and government Ministries and Agencies. Chief among our activities were our involvement with the series of Pension seminars put on by the Jamaica Civil Service Association and our participation in several of the Civil Service Week events.

OPERATION, INFORMATION TECHNOLOGY & FACILITIES Operations

The Operations unit manages a number of the back office functions. During the year the team worked assiduously to process transactions such as deceased claims, salary deduction Standing orders. The level of commitment displayed by the team assisted in overcoming many of the challenges that arose from the integration of both Information Technology systems from the merger.

We were able to automate a number of processes which reduced the processing time and resulted in increased member satisfaction.

In addition, to ensure that we operated within the timeline of our Service Standards, we continued to review our frontline processes and procedures and empowered the team members through training and increased autonomy with the necessary accountability to operate more efficiently.

We commenced the process of merging accounts for those persons who were members who of both GSB and Churches Credit unions.. This activity will continue until it is successfully completed.

Risk and Compliance

The Risk and Compliance Team had an extremely busy year in 2013, as the team worked towards ensuring that the associated risks of doing business were adequately managed. The team was able to fulfill most of its objectives as outlined in its BSC for the year. This involved conducting frequent risk reviews and consistent monitoring across the branches and business units. Regulatory compliance was keenly monitored including those relating to the Proceeds of Crime Act. Where potential areas of vulnerability and risk were identified the necessary controls implemented.

Information Technology (IT)

The year was a challenging one that saw us operating with tight budgetary constraint, however despite the challenges the IT team was able to achieve most of its established objectives. With customer service as our mantra we made significant improvement to the performance of the Wide Area Network (WAN), the telecommunication network that facilitates service delivery. This was done after a comprehensive assessment of the WAN performance as well as the data needs and capacity requirement of all operating locations. Upgrades were carried out as required leading to our members realizing immediate benefits.

We continue our annual assessment and improvement of the Hardware infrastructure. Team members, especially those in the field, were provided with computers and communication tools to facilitate direct and more simultaneous connection to the companyâ&#x20AC;&#x2122;s network from remote locations. We converted all our manual operating forms to electronic format and stored them at a centrally accessible location on the companyâ&#x20AC;&#x2122;s internal network. This lead to the reduction in the use of paper and other printer accessories.

In anticipation of the replacement of the existing core IT system, extensive work was done in developing a comprehensive Request for Proposal (RFP) document that would guide the selection of the new core system. 45

In the area of internal software development we were able to create new sub-systems to support the Credit Unions business processes and to achieve general improvement of the existing systems.

Facilities

During 2013 the facilities team continued with cost saving initiatives by retro- fitting our Head Office Building with Light Emitting Diode (LED) tubes on all three floors, as a key step in reducing operating cost.

The merger of our two May Pen locations into one full-service branch created a more spacious and comfortable environment in which to serve our members while reducing operating expenses. It became our one stop financial centre catering to all our members’ financial needs in the parish of Clarendon and its environs. In addition, our New Kingston Branch underwent major renovation during 2013. The improved lobby space and member services cubicles facilitated the delivery of services to our members in a more comfortable environment.

2014 will see us facing significant global financial challenges; the facilities department has however taken on the mandate of reducing operating expenses by implementing the necessary strategies to increase efficiency throughout the organization. Emphasis will be placed on energy management as we investigate the possibilities of using solar energy as a long term solution to managing escalating energy cost.

CREDIT ADMINISTRATION & LOAN RISK

During the year the Credit Administration and Loan Risk Division sought to balance the requirements of our members with the need to create several strategies to mitigate our risk.

We have maintained our interaction with our members, who continued to face the various challenges of the economic environment they faced. We offered to re-write current arrangements with lower interest rates and longer terms, always establishing that the members’ cash flow was increased and also ensuring that the Credit Unions’ interest was protected. Policies and loan conditions were adjusted during the year to ensure the balance was maintained. Training sessions were conducted to improve the loan underwriting skills of our technicians. We also continued the implementation of our credit scoring module which has greatly improved our loan underwriting skills.

Past due loan management continue to be a challenge due to the economic conditions of the day. However, each member’s unique situation was considered before the necessary action was taken. We, however, must ensure that the portfolio is managed to minimize losses and earn an acceptable return for our members. 46

Adequate provisioning was made on non- accrual loans and we continued to make every effort to recover on non- performing and charged off loans by strengthening our debt collection and past due management systems and processes. In 2014 we will continue to assess the portfolio and are determined in reducing our non- performing portfolio.

RETAIL NETWORK

Throughout the year the Retail Network was able to achieve growth in loans and deposits, in spite of the economic challenges and strong competition within the financial industry.

We listened to our Members and were able to improve on three of our branches. We improved our reach into central Jamaica by upgrading the Micro and Small Business Loan Office in Mandeville, to a full service Branch. We then focused on consolidating our offices in May Pen. The improvements in delivery channels were also evident in Kingston, as we incorporated the operations of our Advisory Centre in Trench Town into that of our Main Branch at Eureka/Ripon to achieve greater efficiency. The Members served by our New Kingston Branch were also in for a new service experience, with a more expansive and comfortable environment. We continued to remain flexible and responsive to our Members needs by facilitating adjustments to our product offerings.

This level of responsiveness was also extended to our members of the Micro and Small Business Loans Unit. Entrepreneurship is a strong focus for this organization and will gain even greater momentum in the coming years. The service offerings of our Micro and Small Business Loans Unit will be delivered all across the island with our mobile Micro Finance Officers. Loan repayments are facilitated through our branch network and our unique collaboration with Bill Express. We remain committed to assist and work with our members as they improve their earning power and create wealth. The Micro and Small Business loans Unit continues to show strong growth with a portfolio of approximately $150M and having served over 3000 members across the island.

Conclusion

Our relentless focus on improving the customer experience, consistently creating value for our members and improving product and service offerings executed with the highest level of efficiencies remains our overarching strategy.

We will be seeking to expand our Micro and Small Business Loan product island-wide as we play our part in encouraging the spirit of entrepreneurship throughout Jamaica. We will focus on helping our members to save more and gain greater financial independence through our various savings campaigns, heralding Jamaicans everywhere to practice this indispensable need. This thrust will be guided by the mantra, “it’s not how much you earn, it’s how much you save and invest that will make you wealthy”.

In addition, it is our mandate to increase the number of Jamaicans who plan and contribute to their retirement through our Individual Retirement Scheme, â&#x20AC;&#x153;Pension Goldâ&#x20AC;?. We will continue to encourage individuals and Mirco and Small business enterprise operators to come on board in planning for themselves and their employeesâ&#x20AC;&#x2122; retirement. This will facilitate an improved economic position for our country as more of the elderly will be better able to meet their basic needs after retirement. In short order, we will be investing in a new core Information Technology platform that will further increase efficiencies in our operations. In 2014 we will be working assiduously to ensure an even stronger financial institution, especially as we prepare for the impending Bank of Jamaica Regulations of Credit Unions.

We take this opportunity to commend our entire team for their continued commitment to the Credit Union and look forward to their sterling contribution in 2014 as we seek to continue our efforts to making FHC a World Class financial institution of choice for our members.

We also express heartfelt appreciation to our membership for their continuous commitment to the Credit Union. Our members can be assured that your Credit Union will continue to seek new and better ways of not just meeting but exceeding your expectations as you continue to trust us as your financial partner.

___________________________ Basil Naar Chief Executive Officer

FHC INVESTMENTS LIMITED (FHCIL) During 2013, there were significant challenges in the Jamaican macro-economic landscape. The year started with the country having a growing debt, weakening economic performance, rapid decline in the value of the Jamaican Dollar (JMD) against the currencies of our major trading partners, especially the United States, depleting Net International Reserves (NIR) and a government seeking to engage the International Monetary Fund (IMF) and other multi-lateral lending agencies into a borrowing relationship under their Extended Fund Facility.

As a pre-condition for the agreement, the Government of Jamaica (GOJ) had to issue its second domestic exchange (NDX) within 3 years, swapping existing bonds for longer maturities and lower coupon rates. The agreement with the IMF was concluded in May 2013. The NDX costs FHCIL approximately $2 million dollars in realized losses for the year and initially dried up liquidity in the market as the bonds maturing in 2013 were extended for another year. The lack of liquidity as well as the difficulty in sourcing United States currency at critical times during the year negatively impacted our Bond trading activities. The NDX also paved the way for lower interest rates in the market, with the Central Bank lowering its benchmark rate to 5.75%. However, the Bank of Jamaica’s (BOJ) actions to defend the currency created upward pressure on the interest rates and depressed Stock Market activities. In spite of the actions of the BOJ, the Jamaican currency gradually weakened against the United States Dollar (USD) throughout the year. On January 2, 2013 the exchange rate was J$92.97: US$1.00 and by December 31, 2013 it declined by 14.42% to close at J$106.38:US$1.00. The movement in the exchange rate also contributed to an increase in the calendar year inflation rate to 9.1% ahead of the 8% for the previous year.

The Stock Market activity was also low-keyed during the period with the main market indices declining 12.16% from 91,797.99 at the start of the year to 80,633.55. This was as a result of declining corporate earnings as well as investor’s confidence level given the uncertainty of the impact of the IMF/GOJ agreement. However, the Junior Stock Market index performed much better than the main index increasing by 16% from 654.07 at the start of the year and closing at 757.86.

The contraction in the economy will continue to impact listed companies over 2014, thus subduing their performance. The lack of an export growth or import substitution strategy to contain the slide in the JMD will mean another steep decline in its value this year. This decline in the currency will also create inflationary pressure, so we expect inflation to be within the 8%-9% region for the calendar year. In addition, the US Federal Reserve’s action to reduce quantitative easing will cause interest rates to rise in that market and will place pressure on our local interest rate as well as the BOJ’s action to stymie the rate of devaluation.

The Retirement Planning Scheme was established as a defined contribution plan with on June 1, 2004 by the then Churches Co-operative Credit Union Limited. FHCIL is currently the Administrator and Investment Manager of the Scheme. During the year under review, the funds under management grew by over 15% to approximately $400M and the total number of contributors were in excess of 4,000 at December 2013. Financial Performance (2013)

The Company made a Profit after tax of $4.77M, recovering from a loss of ($9.75M) in the previous year. Total Income amounted to $49.44M which is $26.06M or 111% more than the previous year.

The main sources of Income were from Interest on Investments, Bonds trading and Income from the management of the Pension Funds and Investment Portfolios.

Total Assets stood at $387.64M at the end of 2013 showing growth of $149M or 63% over 2012. Repurchase Agreements with clients increased to $224.38M from $106.99M representing growth of 110%. Total funds under management was $1.4B.

For the year 2014 we expect Investor confidence and sentiment to be very low, however, with a more aggressive sales campaign, we expect that we will capitalize on the opportunities that exist in the various markets and improve our performance.

TREASURER’S REPORT Overview

I am pleased to present the Treasurer’s Report to the Annual General Meeting of First Heritage Co-operative Credit Union Limited (FHC) for the year ended December 31, 2013. The audited financial statements in this annual report are for the Group, which comprises FHC Credit Union and its wholly-owned subsidiary, FHC Investment Limited (FHCIL). It is worth noting that FHC adopted International Accounting Standard 19 (IAS19), in accordance with best practice, during 2013. IAS 19 requires changes in the accounting treatment of pension benefits and related costs and accordingly, certain items related to staff costs and scheme benefits for 2012 were restated to reflect this changed treatment and to allow for proper comparison between past and current years.

Summary Financial Performance For the year ended December 31, 2013, the FHC Credit Union realized a Net Surplus of $98.8M as compared to its restated prior year Net Surplus of $63.9M. This represents a 54% increase in surplus year-over-year and speaks well for the Credit Union’s post-consolidation outlook. FHCIL also made a Net Surplus of $4.8M for the year and therefore contributed positively to the Group’s Net Surplus of $103.5M for 2013. This contrasts to the Net Loss of $9.8M made by FHCIL for the year ended December 31, 2012. The Board is confident that such improved profitability can be maintained and improved upon in coming years.

FHC’s total assets of $8,769.8M represented a $318.1M or 3.8% increase over the course of the year. Members’ Loans, Deposits and Equity grew by 5.8%, 10.1% and 5.7% respectively. Total Assets for the FHC Group of $8,949.2M represented a $458.47M or 5.4% increase over the previous year’s performance.

Economic Overview The year was another challenging one for our members and the Jamaican economy. 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.

In early 2013, Jamaica saw another debt exchange and further reduction in Government offered interest rates. The financial sector’s conditions for the acceptance of this second debt exchange and the signing of a new International Monetary Fund agreement resulted in tighter

controls and closer monitoring of Government spending. By year-end, interest rates remained low, Government has made progress towards reducing its fiscal deficit and the economy had shown very weak quarterly upticks in GDP.

The Jamaican dollar traded against the United States dollar for J$106.38 to U$1.00 at yearend, representing a steep decline of 14.8% in the value of the J$ for the year contributing to moderate inflation for the year. This J$ slide was more than double the 6.8% J$ decline for 2012 and many savers looked towards hard currency investments.

Despite lower interest rates, few new loans or new business investments were noted as many businesses and households opted to reschedule or reduce their debt from savings instead. Jamaica also experienced notable increases in unemployment rates during the year and financial service providers experienced generally increased delinquency and reduced savings intakes, as a result of the tight economic conditions. All these factors combined 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, we expect the Bank of Jamaica (BOJ) to assume the role of supervisor of Credit Unions in 2014, as a further extension of their existing oversight of our activities, review of our financial reports and periodic audits. Our performance against International Credit Union Industry financial benchmark standards for safety and soundness (PEARLS) is currently 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 15.7% at December 31, 2013, for example, far exceeding the minimum PEARLS Standard of 8% and BOJ’s requirement of 6%.

Operational Results Notwithstanding the many challenges faced by the Credit Union and its members, FHC undertook initiatives to improve its competitiveness and increase its revenue, while improving its customer service and internal controls. Key Results for the year 2013 were: • Interest Income of $1,126.3M was up 24.5%. Lower interest rates were offered on members’ loans and more loans made, including for consolidations. • Interest Expense of $183.6M was up 27.0% due mainly to increased deposits from our members, as attracted by competitive saving rates. • Fee and Commission Income of $175.9M increased by 15.9% from increased business activities. There were no fee increases for 2013. • Operating Expenses of $1,070.8M was up 21.5% mainly due to increased staff costs. A significant part of these staff costs related to one-off payments for the standardisation 54

• •

of post-merger employee benefits. Other Comprehensive Income required a downward adjustment of $15.8M as compared for an upward revision of $36.8M in prior year. This as determined by the Auditor’s estimate of reserves required to cover retirement benefits and impairment to the value of our portfolio of investment securities. Delinquency as a percentage of our Total Loans was 8.7%, which exceeded the PEARLS standard of 5%. Our provisioning for loan loss continues to be considered adequate to cover potential losses.

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. While the Credit Union has performed well, 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. We are confident that the Credit Union has the excellent capability and is pursuing the correct strategic initiatives to overcome these challenges. With the continued dedication, hard work and enthusiasm of our staff and volunteers we know that we will continue to build FHC and accomplish the ambitious goals that we have set for the benefit of our fellow members.

Acknowledgements I thank God and you, the members, for having given me the opportunity to serve as your Treasurer. It has truly been a privilege and an honour. I thank you also for supporting this Credit Union, which is yours, and for giving it your business. I thank and commend all team members, including all the volunteers, managers and staff, who consistently applied the skill and effort needed to keep the Credit Union on its upward path of success.

On behalf of the Board of Directors, I must also convey appreciation to the Registrar of Cooperative Societies and the Jamaica Co-operative Credit Union League, for their expert assistance and guidance throughout the year. I also thank our new Auditors, KPMG, for their professional and timely completion of our audit this year. May God bless you all.

______________________ Robin Andrew Levy Treasurer

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REPORT OF THE CREDIT COMMITTEE It is with great pleasure that the Credit Committee presents its report for the year 2013 to you our valued members. The Committee met on a weekly basis to review credit applications, approve loans and ensured that they were done in compliance with lending regulations and the Credit Unionâ&#x20AC;&#x2122;s loan policy. Disbursement 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. Personal, Unsecured and Motor Vehicle loans continued to be the largest category of the portfolio. During the year we assisted many of our members with debt consolidation in an effort to afford them more disposable income.

Our Micro and Small Business loans continue to show success as the Credit Union encouraged more members to become entrepreneurs. This portfolio showed a 37% increase moving from $112M in 2012 to $154M in 2013.

Since our last report 25 meetings were held and attendance was as tabled below. The Committee welcomed the newest member of the team , Richard Ranger, who joined in July 2013. Members Noel Francis Quinton Masters Richard Ranger Louella Maloney Marilyn Dunbar

Meetings held 25 25 25 25 25

Meetings attended 23 24 23 14 18

No. of Times excused 2 1 2 11 7

The Credit Committee wishes to express heartfelt gratitude to the Management and Staff and thank our members for the opportunity given to serve. To you our loyal members, we commit ourselves to continue to provide you with service of the highest standard. _________________________ Noel Francis Chairman

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ANALYSIS OF LOAN DISBURSEMENT BY PURPOSE 2013 TYPE PRODUCTIVE

2013 AMOUNT $

% of TOTAL

6,613,578

0.23%

TOTAL

124,197,398 29,789,021

160,615,032

4.24% 1.02%

Heritage Professional (Unsecured) Easi Line (Unsecured) Pay Day Loans (Unsecured) Supreme Educator - (Unsecured Education) Easi Pay (Unsecured) Insurance Premium Financing (Unsecured) Renegotiated Loans Debt Refinancing Home Choice Loans Real Estate Deveolpment Real Estate Acquisition Motor Vehicle Purchase Furniture & Appliances Supreme Educator - Education Personal Expenses

12,546,268 130,693,849 173,137,175 24,787,037 617,279,442 218,256 15,544,472 150,257,378 184,446,142 42,140,634 120,103,456 549,339,489 1,777,888 9,751,342 733,269,314

0.43% 4.47% 5.92% 0.85% 21.10% 0.01% 0.53% 5.14% 6.30% 1.44% 4.10% 18.78% 0.06% 0.33% 25.06%

2,925,907,173

100%

15,035

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

2,765,292,141

TOTAL

GRAND TOTAL

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0.00%

5.49%

94.51%

CREDIT COMMITTEE MEMBERS 1. Richard Ranger 2. Louella Maloney 3. Noel Francis – Chairman 4. Quinton Masters 5. Marilyn Dunbar

SUPERVISORY COMMITTEE MEMBERS 1. Hope Ramsay-Stewart 2. Asre Stewart – Blake – Chairman 3. Beverley Williamson 4. Dwight Sibblies 5. Missing – Sharon Crooks

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REPORT OF THE SUPERVISORY COMMITTEE CHAIRMAN’S REMARKS

The Supervisory Committee is pleased to welcome all to the 2nd Annual General Meeting of First Heritage Co-operative Credit Union. We would like to commend the Board of Directors, Management and Staff for their hard work in the blending of the human and cultural dimensions of the two entities into one seamless, growth-oriented organization. Thanks is also extended to our members for their continued support by choosing to save, borrow and invest in the many products and services the Credit Union offers.

The Committee

The Credit Union governance model requires that the Supervisory Committee provides oversight responsibility for the affairs of the Credit Union, which includes but not limited to, the activities of the Board of Directors, Management and Staff. In order to fulfill this mandate, reviews were undertaken of the policies and procedures, internal controls, risk management functions, among other areas. These reviews were facilitated through the work undertaken by the Internal Audit Department.

In addition to reliance being placed on the work of the Internal Audit Department, the Committee also conducted independent examinations of some risk areas inherent in the operations of the Credit Union. Members of the Committee also participated in Joint Board meeting, the Jamaica Co-operative Credit Union League Limited’s Annual General Meeting. Members also participated in various other seminars held by professional entities. At the Annual General Meeting held on July 23, 2013 the following members were elected to serve on the Supervisory Committee:

Mrs. Asre Stewart –Blake Mr. Dwight Sibblies Mrs. Sharon Crooks Mrs. Hope Ramsay-Stewart Mrs. Beverley Williamson

This committee held meetings on the second Thursday of each month to review the operations of the Credit Union under the Chairmanship of Mrs. Asre Stewart-Blake with Mrs. Sharon Crooks as Secretary and Mrs. Beverley Williamson as Assistant Secretary. Seven (7) meetings were held during the period and the attendance is set out in the table below.

Specific Review of Operations Bank Reconciliations: The reconciliations for all bank accounts were for the most part prepared in a timely manner.

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Internal Controls: Based on the audits conducted, the systems of internal controls were adhered to in general. There was however areas for improvement and these were normally addressed by the Management.

Special Investigation: During the year there were special investigations most of which had been resolved. The outstanding matters are in the hands of the relevant authorities. Loan and past due accounts Adherence to the Credit Policy ensured that, among other things, loans were adequately collaterised. The constant and close monitoring of loan receivables resulted in the past due rate remaining fairly constant during the year. Insurance and dues As at December 31, 2013 the asset of the Credit Union were adequately secured. All Stabilization Dues and League Fees were paid.

Volunteer and Staff Accounts These accounts were reviewed on a monthly basis. There were no outstanding issues at year end. ATTENDANCE RECORD As at March 14, 2014, seven (7) regular meetings were held. Names Mrs. Asre Stewart-Blake Mr. Dwight Sibblies Mrs. Sharon Crooks Mrs. Beverly Williams Mrs. Hope Ramsay-Stewart

Regular 7 6 3 5 1

Excused 0 1 4 2 0

As First Heritage Co-operative Credit Union Limited moves into the future, we foresee an improvement in productivity and surplus.

We continue to urge our members to place any queries and suggestions in the Supervisory Committee Box located at the Eureka /Ripon Branch or members who so desire may write to the Chairman of the Supervisory Committee under confidential cover.

Expression of thanks is extended to the members for their vote of confidence placed in us, to the Board of Directors, Management and the Staff who facilitated the functioning of this Committee. _______________________________ Asre Stewart-Blake Chairman of Supervisory Committee 137

REPORT OF THE NOMINATING COMMITTEE In accordance with the Rules of First Heritage Co-operative Credit Union Limited, a Nominating Committee was established. The members of the committee were:

• • •

Edmund Jones Patricia Ramsaran Basil Naar

Board Representative and Chairman Member Representative Staff Representative

The Committee advertised for volunteers to fill vacancies on the Board of Directors and the Supervisory and Credit Committees. BOARD of DIRECTORS

The terms of five Directors come to an end. These Directors are:

1 2 3 4 5

Leodis Douglas Mark Gonzales Robin Levy Beverly Stewart Balvin Vanriel

Four of these retiring Directors indicated that they would be willing to serve for another term. Director Mark Gonzales indicated that he would have liked to continue to offer himself for service, however, business commitments would not allow him to continue. Director, Dr. LeoPaul Powell, tendered his resignation with effect from 30th April, 2014, to further his studies and career. Both Directors have served us well and we wish them all the best in their endeavours.

Cognizant of the view and position of the office of the Registrar of Co-operatives and Friendly Societies in respect of a reduction of the members of Boards and pursuant to the decision of the Board of Directors minuted in its meeting of March 27, 2013, the number of Directors has been reduced from eleven (11) to nine (9).

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The Directors retiring and those being nominated are:

Retiring Leodis Douglas Robin Levy Beverley Stewart Balvin Vanriel

Recommended Leodis Douglas Robin Levy Beverley Stewart Balvin Vanriel

SUPERVISORY COMMITTEE

Term 2 Years 2 Years 2 Years 2 Years

According to our Rules, all the members of the Supervisory Committee retire each year.

Except for Mrs. Hope Ramsay-Stewart, who cited personal commitments, all currently serving volunteers have expressed the desire to serve again. The committee received from the membership expression of interest in serving from the following person who is being recommended: The profile of that candidate was submitted

Mr. Desmond Gordon

Mr. Gordon is currently the Bursar/Supervisor at Tarrant High School since 2001 and holds a Chartered Association of Business Administration Degree. He is currently completing studies for the Certified Accounting Technician course. Mr. Gordon previously served as Chairman of the Supervisory Committee of Sodality Co-operative Credit Union from 1999, until its merger with City of Kingston Co-operative Credit Union. He has been a member of FHC since 1984. He has worked with the United Church in Jamaica and Cayman Islands as well as the St. Patrickâ&#x20AC;&#x2122;s Foundation. He is currently a Roman Catholic Deacon and a member of the ICAJ Toastmasters Club. The committee members retiring and those being nominated are: Retiring Sharon Crooks Hope Ramsay-Stewart Dwight Sibblies Asre Stewart-Blake Beverley Williamson

Recommended Sharon Crooks Desmond Gordon Dwight Sibblies Asre Stewart-Blake Beverley Williamson

Term 1 Year 1 Year 1 Year 1 Year 1 Year

Mr. Desmond Gordon is being nominated to replace Mrs. Hope Ramsay-Stewart. All other currently serving volunteers are being recommended to serve. CREDIT COMMITTEE

Three members of the Credit Committee are retiring this year. Mrs. Louella Maloney and Mrs. Marilyn Dunbar are not returning. We express appreciation for the contribution made by these volunteers. 139

The Committee received from the membership expressions of interest in serving from the following persons who are being recommended: The profiles of those candidates were submitted

Faylene Foster

Miss Foster is currently employed to the Ministry of Labour and Social Security since 1997 and now holds the position of Director - 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 Bachelor 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. Althea G. Daley

Mrs. Daley currently serves as a Consultant with the Petroleum Industry Employees Cooperative Credit Union Limited since December 2013. She is an innovative financial service manager with over 20 years experience and has successfully managed the merger process of three (3) Credit Unions. Mrs. Daley has served the Credit Union movement extensively as she was also a consultant with the Jamaica Co-operative Credit Union League Limited, was Deputy General Manager for the Montego Co-operative Union Limited and served in the capacity of Manager for both Shell Employees Co-operative 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 Nominating Committee is recommending Miss Faylene Foster and Mrs. Althea Daley as replacements for Mrs. Dunbar and Mrs. Maloney. Retiring Marilyn Dunbar Noel Francis Louella Maloney

Recommended Althea Daley Noel Francis Faylene Foster

Term 2 Years 2 Years 2 Years

The Nominating Committee would like to express its appreciation to all our volunteers who have given selflessly of their time, knowledge and experience in building our credit union. We wish them all the best in their new endeavours. Signed

Edmund Jones Board Representative and Chairman

Patricia Ramsaran Member Representative 140

Basil Naar Staff Representative

REPORT OF THE DELEGATES ON JCCUL’S AGM JAMAICA CO-OPERATIVE CREDIT UNION LEAGUE LTD.

2013 CONVENTION & 72nd ANNUAL GENERAL MEETING Held May 16-19, 2013 HIGHLIGHTS

The Jamaica Co-operative Credit Union League’s 72nd Annual General Meeting was held from May 16-19 2013 at the Ritz Carlton Hotel at Rose Hall in Montego Bay. It was held under the theme: “Renewed. Repositioned. Reshaping the Movement for the Future.” This conference was the first AGM following the transformation of JCCUL into a consolidated entity and it generated much interest. About one hundred and fifty (150) delegates and observers attended the meeting. The Weekend activities were as follows: • Professional Development Session with Dr. N’Sombi Jaja entitled “Motivating the Inner You” • Annual General Meeting – CSS • A reception hosted by the Centralized Strategic Services Company (CSS) • Annual General Meeting – Credit Union Fund Management Company • Workshop with Motivational Speaker Alvin Day entitled “Persuasion Power - The Art of Retail Selling”. • Awards Professor Trevor Munroe, the guest speaker, congratulated the credit union movement for its continued growth throughout challenging economic times. A number of Credit Unions received awards as under: Four Credit Unions were declared winners in the Jamaica Co-operative Credit Union League’s (JCCUL’s) annual Credit Union of the Year Awards Competition. The four Credit Unions won in the categories of Mega Credit Union, Large Credit Union, Medium-sized and Small Credit Union. Before a large gathering of delegates and observers the OJ Thorbourne Trophy for Mega Credit Union of the Year presentation was made to JTA Co-operative Credit Union, the third year in a row, while Manchester Co-operative Credit Union was declared the runnerup in the category.

In the Large Credit Union Category NCB Employees Credit Union again shot to the top and captured the Renford Douglas Trophy ahead of Palisadoes Credit Union that emerged the runner-up.

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At the same time the Paul Thompson trophy for Medium-sized Credit Union of the Year was presented to Postal Co-operative Credit Union, a consistent winner, with JDF 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 PWD Co-operative Credit Union was declared the runner-up.

JCCUL Annual General Meeting

• The Annual General Meeting was chaired by President Johnathan Brown who did a multimedia presentation summarising the Board report. All aspects of JCCUL’s operations were presented and examined. As part of the presentation, the meeting was also updated on the League’s transformation project and its new business model. RULE AMENDMENTS

Governance was also another important element of the transformation process and a proposal for a new governance structure for the League was presented to delegates at the Annual General Meeting. After a lengthy discussion the meeting asked for a review of the proposal to include representation from the four peer groups, based on asset sizes. A special general meeting was suggested for a decision to be made on this matter.

A number of amendments were made to the existing rules in the wake of the transformation of the League: They include: Rule 13 - amended to give JCCUL the ability to not just accept deposits if it wishes to do so but if it does not then it may direct credit unions where to deposit their liquidity reserves.

Rule 15 - amended to change the repository of credit unions’ liquidity reserves from JCCUL to the CUFMC or its successors.

Rule 16 - amended to allow JCCUL to guarantee and syndicate loans if necessary. A new Rule 29 - introduced to have credit unions in general meeting give approval for the establishment or acquisition of subsidiaries. It is also intended that to be able to take advantage of opportunities that may arise, that a special general meeting may be called with 14 days notice under this rule.

Rule 32 - amended to provide for a 5 member Nominating Committee and for expanded powers of the Committee.

Rule 36 - amended to provide for a reduction in the size of the Board to between 11 and 15 persons, and to provide for new ways of determining the composition of the Board.

Rule 40 - amended to allow the retention of a Director’s seat by a vote of the Board if he is

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no longer a duly elected delegate or alternate delegate. Rule 40 is also being amended to remove the examination code rating as a way for a Director to vacate his seat on the Board as examinations are no longer done in that manner. Rule 40 is further amended to provide for the revocation/recall of a Director by his Credit Union. New Sub-Rule 43 (2) - introduced to allow Board and Committee meetings to be held by remote communication or by electronic means. New Rule 51 - proposed to provide for the mechanisms for oversight of subsidiaries by the Board. Rules 53, 56 and 61 - amended to provide for the appointment of Directors to subsidiaries.

Rule 63 - amended to provide for a reduction in the size of the Executive Committee as a consequence of a reduction in the size of the Board.

Rules 64-68 - deleted as there is no longer a requirement for the League to have a Central Finance Facility Committee or loan officers.

Rule 69 - amended to allow an expansion of the role of the Supervisory Committee to cover the entire Group.

Rule 73 - amended to change the reference to the General Manager to the Group Chief Executive Officer.

Rule 74 - amended to enable the League to examine Credit Union’s operational performance. Several condolence and congratulatory resolutions were passed on behalf of credit unions. Those demitting office from the League’s Board of Directors at the meeting were: Rev. Dr. Paul Gardner and Mr. Patrick Haywood. From the Supervisory Committee Mr. Lewin Baxter was the only person to demit office.

The League’s Board of Directors and Executive for 2013-2014 were elected: Mr. Derrick Tulloch - President Mr. Johnathan Brown - Immediate Past President Ms. Carol Anglin - 1st Vice President Mr. Winston Fletcher - 2nd Vice President Mr. Ian McNaughton - Treasurer Ms. Fay Davis - Asst. Treasurer Mr. Rodcliffe Robertson - Secretary Dr. Dorothy Raymond - Asst. Secretary Mr. Jerry Hamilton - Director Mr. Clide Nesbeth - Director Mr. Courtney White - Director Mr. Wilburn Pottinger - Director

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Mr. Lambert Johnson Mrs. Yvonne Ridguard Harris Mr. Talbert Golding ACP Wray Palmer Captain Clifton Lumsden Mr. Barrington Whyte Ms. Natalie Sparkes Rev. Dr. Glenroy Lalor

- Director - Director - Director - Director - Director - Director - Director - Director

â&#x20AC;˘ 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.

___________________________ Basil Naar Delegate

________________________ Orville Hill Delegate

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UNIT MANAGERS Mr. Isakalu Duffus Manager-Information Systems

Mr. Garfield Pearson Manager- Finance & Treasury

Ms. Janet Richards Manager- Member Care Centre

Mrs. Sophia Richardson Manager â&#x20AC;&#x201C; Micro & Small Business Loan Unit Mrs. Rosemarie Samuels Manager-Human Resource Development Mr. Claud Sawyers Manager - Sales & Services

Mr. Damion Williams Manager- Sales & Wealth Development

Ms. Marlene Wong Manager-Credit Administration & Loan Risk

BRANCHES & BRANCH MANAGERS Branch

Kingston & St. Andrew

Address

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

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Branch Managers

Mr. Dale Dixon Mrs. Jacqueline Lloyd-Carter Assistant Manager

20 Dominica Drive Kingston 5

St. Catherine

Mr. Mendel Thompson

10 East Avenue Kingston 4

Mrs. Melissa Miller-Benjamin

Lot 57 West Trade Way Portmore Town Centre

Mr. Phillip Smith

Unit 13 6 March Pen Road Oasis Shopping Centre Spanish Town

Mr. Rudolph Cox

Clarendon

Shops 5 & 6 Bargain Village Plaza May Pen

Mr. Eugene Williams

Manchester

2 Perth Road Mandeville

Mr. Anthony Williams

St. James

21 Union Street Montego Bay

Mrs. Marcia Bailey

Shops 8 & 9 East Side Street Old Harbour

FHCâ&#x20AC;&#x2C6;Investments Limited Kingston

Suite 27 Winchester Business Centre 15 Hope Road Kingston 10

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Mrs. Anita Chong

OBITUARIES Abendigo Amiel Archer Bailey Bernard Biggs Binns Blake Bradshaw Brown Brown Brown Brown Brown Brown Brown Brown Buddoo Burrowes Byfield Carey Chambers Chambers Chang Christie Clarke Cousley Daley Davis Dewar Dixon Douglas Duhaney Earle Edgar Edwards Elliott Facey Falconer Fine Fisher Francis Francis Gabay Gavin

Llewelyn Brandis Medorah Maureen Isbeth Delroy Gilbert Clinton Neville Andrew Desmond Gary Ivy Marline Marva Mary-Ann Roy Lola Hyacinth Rupert Georgette Altimont Pearline Wilfred Kadian Donna Raymond Sydney Millard Malik Clarence Craig Amos Ava Clive Patricia Royford Gordon Sylvester Alan-Rae Lloyd Micheal Windell William Lionel

Geoghagen Gibson Green Hall Harriott Harriott Harris-Edwards Hastings Haynes Henry Hibbert Housen Hughes Hylton Isaacs Jennifer Johnson Johnson Knight Lamour Larmond Lawrence Lee Lewis Lewis Lewis- Earle Lindo Lounges Luke Marks Martell Matthews Matthews McDonald Mckay McKenzie Mohan Morgan Morgan Morrisey Morrison Mowatt Myrie Newland Neil

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Edna Collette Andrea Ira Dexter Donovan Elsadia Melodie Joan Newton Madge Denver Gerald Madlin Janice Rowe Deline Michelle Ashanti Stephenson Lloyd Carmen Jonathan Deltora Millicent Paulette Charles Hugh Elsaida Joyce Yvonne Carol Mark Mavis Louis Antoinette Blossom Dorrett Lynford Patricia Sydney Ludlow Donald Enid Ermine

Nembhard Nichols Nicholson Nugent Perry Phipps Rainford Ramcharan Richards Richards Richards Richards Robinson-Baker Salmon Sanftleben Sang Sewell Shand Shirley Simpson Smith Smith Smith Spence Stephenson Stewart Sutherland Tai Taylor Taylor Telfer Thomas Thomas Thompson Thompson Thompson Trought Walker Walker Watkis Watson Williams

Ann-Marie Percival Betty Cynthia Edna Urica Dennis Antoinette Delores Delpha Silbert Sonia Elaine Deirde Yvonne Ouida Cora Yvonne Henrietta Beverly Andrew Lloyd Rudolph Whulio Errol Leon Fitz Neville Olga Robert Fredericka Lowell Yvonne Carlos John Shawn Norma Lisa Velma Beverly Sydney Kirklyn

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 is completed, or may give notice of motion to be discussed at a further meeting.

2. SUSPENSION OF STANDING ORDER In the event of any matter of urgency, however, the Chairman may accept a suspension of the Standing Orders. The member moving such suspension must clearly state the nature and urgency of his business, the numbers of the standing orders affected, and the length of time he desires such suspension to last. At the option of the meeting, a further extension may be allowed, but no suspension shall take place except by majority vote of the members present. 3. MINUTES No motion or discussion shall be allowed on the Minutes except in regard to their accuracy. After the confirmation of the Minutes, they shall be signed by the Chairman, and the members shall then be at liberty to ask any questions in regard to matters arising out of them. Such questions shall be allowed for purposes of information only, and no debate on the policy outlined in the Minutes shall take place.

4. All persons desiring the floor shall rise and address themselves to the chair. They shall state their name and the Credit Union which they represent. If recognized by the chair, they shall have the privilege of the floor and all the rights thereof.

5. All speakers are to make use of the 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 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 an Original Motion, may speak again on the amendment. No member shall speak for more than five minutes at a time. Members wishing to raise points of order or explanation must first obtain the permission of the Chairman and must raise immediately the alleged breach has occurred. Any member may formally second any motion or amendment and reserve his speech until a later period in the debate.

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8. No person shall interrupt another who is speaking except on a point of order, a parliamentary inquiry, or a point of information. 9. If it should come to pass that a speaker is called to order while speaking, the speaker should take his seat until the question of order is determined.

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

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

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

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

15. RIGHT OF REPLY The mover of the Original Motion shall if no amendment be moved, have the right of reply at the close of the debate upon such motion. When an amendment is moved he shall be entitled to speak thereon in accordance with Standing Order No. 8 and at the close of the debate on such amendment shall reply to the discussion, but shall introduce no new matter. The question shall then be put to the vote immediately, and under no circumstances shall any further discussion be allowed once the question has been put from the Chair. The mover of an amendment shall not be entitled to reply. 149

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

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

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

19. Any member may call for a division of the House (that is, for a roll call vote) when there appears to be a reasonable doubt as to the accuracy of the vote as announced by the Chair. 20. A motion to lay on the table shall be put without debate.

21. Whispering, loud talking, or other disturbances calculated to disturb anyone while speaking will not be tolerated.

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

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

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NOTES

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NOTES

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