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AAnnual RReport 22015

PAGE 158TH ANNUAL GENERAL MEETING

Correctional ServicesCorrectional ServicesCo-operative Credit Union LimitedCo-operative Credit Union LimitedCorrectional ServicesCorrectional ServicesCo-operative Credit Union LimitedCo-operative Credit Union Limited

Vision Statement“To be the first and preferred institution of choice

in satisfying members financial needs.”

Mission Statement“To empower our members by providing superior financial services

which exceed members’ expectations through professional and highly motivated staff, while being a good corporate citizen.”

● 58 years in Existence (Incorporated October 2, 1958)

● Employee Based Credit Union

● Membership: Over 3,400 active members

● Bond: Correctional Services and Jamaica Fire Brigade

● Main Office and 1 outpost● Employees: 18 – 3 Managers● Governance: 7 Board Members; 5 Credit and 5 Supervisory Committee

● Core Business: Savings, Loans and Insurance

● How big are we: Asset size of $540M (growth of 36% since 2012)

● Loan Portfolio: $426M● Savings Portfolio: $333M● Net Inst. Capital – $57M or 10% of Asset Base

● Operating System: Emortelle

SNAP

SHOT

PROFILE

C S C C U



Correctional ServicesCorrectional ServicesCo-operative Credit Union LimitedCo-operative Credit Union Limited

ContentsContentsNotice of Annual General Meeting .................................................................................................... 5

Agenda .............................................................................................................................................. 6

Minutes.............................................................................................................................................. 7

Board of Directors............................................................................................................................ 18

Board of Directors Report ................................................................................................................ 19

Treasurers Report ............................................................................................................................ 29

Delinquent Accounts Over 90 Days ................................................................................................ 34

Recommended Loan – Write Off For The Year 2015 ...................................................................... 35

Proposal for the Appropriation of Surplus ........................................................................................ 36

Members of Staff.............................................................................................................................. 37

Department of Co-operatives & Friendly Societies Letter ................................................................ 40

Auditor’s Report .............................................................................................................................. 42

Financial Statements ........................................................................................................................ 44

Credit Committee Report ................................................................................................................ 79

Supervisory Committee Report........................................................................................................ 82

Nomination Committee Report........................................................................................................ 84

Profiles of Nominees ........................................................................................................................ 85

Special Committee Report To Annual General Meeting .................................................................. 87

Volunteers 2015 .............................................................................................................................. 90

Staff List .......................................................................................................................................... 91

Liaisons Officer 2015 ...................................................................................................................... 92

2015 Highlights .............................................................................................................................. 93

Deceased Members for 2015 .......................................................................................................... 99

National Anthem .......................................................................................................................... 100

Prayer to St. Francis of Assisi ........................................................................................................ 100




Notice of Annual General MeetingNotice is hereby given that the

58TH ANNUAL GGENERAL MMEETINGof the

CORRECTIONAL SERVICES CO-OPERATIVE CREDIT UNION LIMITED

will be held at

THE JAMAICA CONFERENCE CENTRE14-20 Port Royal Street

Kingston

On Saturday, July 30, 2016

Commencing at 10:00 a.m.

Registration commences at 9:00 a.m.

Signed:.................................................Mr. RReneord SSmalling

Board Secretary




AGENDAAGENDA1. Ascertaining a quorum

2. Call to order

3. Prayer

4. Welcome and address

5. Apologies and Introduction

6. Obituary

7. Greetings

8. Minutes of the 57th Annual General Meetinga. Reading and amendmentsb. Confirmation c. Matters Arising

9. Reportsa. Board of Directorsb. Auditorc. Treasurer

Distribution of Net SurplusFixing of Maximum Liability

d. Credit Committeee. Supervisory Committee

10. Resolutions

11. Special Report of the Viability/ Options Committee

12. Report of the Nominating Committee & Elections

13. Any Other Business

14. Presentations:JCIACUNA Caribbean Insurance Jamaica Ltd. Savings and Membership Drive PushSpecial Prizes/ gifts

15. Closing Remarks

16. Adjournment




The 57th Annual General Meeting of the CorrectionalServices Cooperative Credit Union Limited was heldat the Jamaica Conference Centre, 14 – 20 Port RoyalStreet, Kingston on Saturday June 27, 2015.

The President, Mr. Leslie Campbell chaired themeeting. The Chairman having ascertained that aquorum was in place, called the meeting to order at11:00 a.m. Mr. Charles Wheatle, Secretary, read theNotice of the Annual General Meeting. Mr. GilbertSmith led the meeting in prayer which was followedby the reading of the Prayer of St. Francis of Assisi.

CHAIRMAN’S WELCOME AND OPENING REMARKS

The Chairman said that the theme for the AGM was‘Innovating for change, looking at a new businessmodel’. The Chairman extended a warm welcome toall persons present. He said it was good to see somany persons present so early and next year it will beanother morning meeting. Special welcome was alsoextended to:

Mrs. Ina FairweatherCommissioner of Correctional Services

Mr. Oswald ParkesCMFG Life Insurance Company

Mr. Cyrene Gilbert (Auditor)Gilbert, Thompson & Company

Miss Joereen McLean (General Manager) Postal Co-operative Credit Union

Mr. Clarence Frater (Vice President) Miss Sandra CameronMr. Denham Wilby (President) Postal Co-operative Credit Union

Miss Kerry AinsworthConec Mobile WalletMiss Tanya BrownJamaica Cooperative Credit Union League

Mr. Gilbert Smith and other members of Retired Officers Association

Mr. Dexter SmithDGS Chartered Accountants & Business Advisors

Miss Joyce StoneDeputy Commissioner, Custodial Services

Miss Yvonne Bernard (Stenotypist)Miss Cheryl BrownMiss Cletan MarriottDepartment of Cooperatives and Friendly Societies

Mr. Anthony McLaughlin (President) Jamaica Police Co-op. Credit Union Ltd.

Mr. Rayon Muir Lascelles Employees & Partners Cooperative Credit Union Limited

Miss Tricia LaylorJDF Cooperative Credit Union Limited

The Chairman also acknowledged the elected CreditCommittee and Supervisory Committee. Othersintroduced were:

The Liaison Officers Credit Union MembersCredit Unionettes

He then formally introduced the General Manager,Mrs. Claudia Thompson-Roache.

MINUTESMINUTESMINUTES OF THE CORRECTIONAL SERVICES CO-OPERATIVE CREDIT

UNION LIMITED 57TH ANNUAL GENERAL MEETING



The staff members were acknowledged and thankedfor their support throughout the years. The Chairmanalso thanked all members of staff and volunteers, whohad helped the Credit Union's triumph over 2014.

The Chairman then proceeded to introduce the othermembers of the Board of Directors present to include:

Mr. David Knight - Vice PresidentMr. David Spencer - TreasurerMr. Charles Wheatle - SecretaryMr. Raymond Williams - DirectorMr. George Thorpe - Asst. SecretaryMr. Rueben Kelly - Asst. Treasurer

FINANCIAL POSITION

The Chairman said that 2014 started off turbulentlybut at the end it was a positive year, as the CreditUnion was able to realize some major achievementsincluding a surplus of $13.3 million compared to asurplus of $2.7 million in 2013. He further stated thatthe Credit Union intends to continue on thatprogressive path.

The Chairman indicated that the total assets had burstthe $500 million mark and is now stands at $509million, a growth of 30% over the last two years. Allother major financial indicators: loans, savings, etc.showed double digits growth for 2014. He furtherextended thanks to all members, for a successful andtriumphant 2014 in which all should rejoice.

AWARDS

The Chairman also noted that the Credit Unionreceived two awards from Cuna Mutual: first placedFIP Jump Start Membership Promotion and secondplace in the Credit Union New Account for GoldenHarvest in the category 4,001 to 10,000 members.He also acknowledged Fire fighters, who were nowon board, having now being included in ourmembership bond.

APOLOGIES FOR ABSENCEApology for absence was given for:

Mr. Fabian McKoy

OBITUARY

A minute’s silence was observed for those memberswho had passed during the year.

The members attention were brought to the StandingOrders, which were on the inside cover of thebooklets.

The Chairman advised that there were changes to thenumerical order of the Agenda and members wereasked to correct the Agenda.

Member Mr. Winston Heathe raised an objection toStanding Order number 10, which states ‘TheChairman shall have an addition to his ordinary vote,a “casting vote” in the case of an equality of votes”.He argued that at the 2012 AGM, Mr. MichaelAnderson, then President, actually voted twice for Mr.Knight. Member Mr. Winston Anderson supportedMr. Heathe by elaborating the argument that theChairman has a casting vote only on matters ofresolutions, motions, etc. but as it relates to theelection of officers, the Chair only has one vote. Mr.Knight responded stating that the Registrar addressedthe matter which is minuted.

MINUTES OF THE 56TH ANNUAL GENERALMEETING

The Minutes were taken as read on a motion movedby Mr. Gilbert Smith and seconded by Mr. AlbertFlynn. The motion was carried.

CORRECTIONS AND AMENDMENTS TO THEMINUTES

Members were asked to observe the corrections onthe Errata Sheet.

Mr. Heathe noted that there were numerousomissions in the Minutes, e.g. on page 8 under thecaption "Credit Union League NominatingCommittee", pointing out that there was an omissionon a point he raised and the response to same by theTreasurer. The Chairman noted it, and advised themember that the minutes would be revisited forclarity.





- Under the captioned Matters Arising fromthe Treasurer’s Report, change Albert Smith to GilbertSmith.

Page 10 - Under the captioned Matters Arising fromthe Credit Supervisory Report, Omit Credit.

The confirmation of the Minutes was moved by Mr.Norman Sanford and seconded by Miss AgathaSandcroft. The motion was carried.

MATTERS ARISING FROM THE MINUTES

Credit Union League’s NominationMember Mr. Cyril Knight commended the Chairmanfor the Board of Directors’ Report. He then furtherraised the issue of the maligning of character of hisson, Vice President David Knight, citing that, thoughhappy with the conclusion of the matter, it could havebeen handled better. He further cited the Society tobe cautious in reports made in respect of members, asour books goes overseas and could have seriousimplications.

Member Mr. Winston Anderson in his contributionexpressed his disappointment according to what hehad read, but cited "when one is wrong, one iswrong". He further argued that seeing that DirectorKnight was representing the League's NominatingCommittee, any other additional expense incurred bythe Director should be covered by the League and notthe Credit Union.

After hearing contributions on the matter by Mr.Heathe, Mr. Anderson and the Treasurer, theChairman brought closer to the issue, referring to aminuted meeting with the Registrar, where the matterof compensation and re-imbursements wereaddressed thus setting the matter in order, withoutfuture recurrence. The Chairman's statement wasaccepted and applauded by the members.

DORMANT ACCOUNTS

Mr. Gilbert Smith enquired if letters were sent topersons who had dormant accounts as suggested byhim at last year’s AGM. The Chairman informed himthat this was done.

STAFF TRAVELING

Mr. Gilbert Smith suggested the a policy be put inplace to curtail the travelling of each travelling officer,by giving them a limited amount of mileage eachmonth and if they go over that mileage they wouldhave to absorb that expense. He enquired if thatpolicy was put in place.

In response, the Chairman advised that Deon G.Staple (DGS), a chartered accounting firm with abusiness advisory section, was currently reviewing allthe policies of the Credit Union and as soon as that iscompleted and the Board receives the review, actionwill be taken.

In her contribution to the discussion, Miss NargareeAllison said that it needs to be decided if the staff wasdoing too much traveling as one member said thatthere was too much traveling and another said thatmore traveling should be done to the variousinstitutions to encourage people to join the CreditUnion and also to save more. The Chairmanresponded by saying once you have to go out more,the travelling will be more.

PRESENTATION

Jamaica Credit Union E-Payment ServicesMr. Gilbert Smith enquired about the status of the E-Payment service being offered by Jamaica CreditUnion E-Payment Services (JCUES). The Chairman inresponse referred to Miss Kerry Ainsworth, whoinformed that training was in process and systemswould be ready by mid July.

Mr. Smith asked if that meant increased income forthe Credit Union and the Chairman replied in theaffirmative.

PIGGY BANK SAVINGS PLAN

Mr. Gilbert Smith enquired if the recommendationsthat he had made regarding the maximum amount ofmoney that parents should save in the Piggy BankSaving Plan for Credit Unionettes was accepted bythe Board and is now in place. The Chairman said thathe has been told that it has been accepted and is nowon stream.



There being no further matter, the Chairman asked fora confirmation of the Minutes. The motion was movedby Mr. Gilbert Smith and seconded by Mr. OthnelFerguson.

THE BOARD OF DIRECTORS REPORT

The Board of Directors’ Report was presented by thePresident and Chairman of the AGM, Mr. LeslieCampbell.

The Chairman asked that a motion be moved for theBoard of Directors’ Report to be taken as read. Themotion was moved by Mrs. Patricia Ricketts-Wint andseconded by Mr. Boswell Whyte. The motion wascarried.

MATTERS ARISING FROM THE DIRECTORS’REPORT

The Chairman instructed the members to view page17 bullet 3.0 to see major achievements made in2014 and also to view trends in the Credit UnionMovement.

PEARLS RATIO

Mr. Gilbert Smith enquired about Operating Expensesand the Liquid Asset and expressed hisdisappointment with the management of these items.He highlighted that operating expenses should beabout 8%, but in 2014 it was at 11.92%.

In response the Chairman stated that at the last Retreatsome very harsh, hard decisions were taken but thesedecisions has to be implemented step-by-step. Healso stated that the Credit Union was still in theprocess of doing what is required in preparation forthe Bank of Jamaica regulations.

RECRUITMENT OF FIRE FIGHTERS

The Chairman informed the meeting that members ofthe Fire Brigade is now included in the membershipbond of the Credit Union and that fire fighters are nowbeing recruited.

The matter of recruitment of fire personnel was fullyexhausted, where in the members expressed theirdisappointment with the pace of recruitment,

marketing strategy and the savings the new investmentwould acquire from the recruitment of fire personnel.Member, Mr. Anderson proposed that a strategic andrigorous recruitment drive be implemented toeliminate the apparent tardy response of the CreditUnion to this viable market.

The Chairman acknowledged the concerns andexplained the formal approach necessary to gainaccess to the fire department. However, he assuredthat the Board will look at the concerns raised as soonas they are re-assembled.

MEMBERSHIP AND SAVINGS

The Chairman commented that though the CreditUnion is in a good position, there is the need formembers to save more and increase membership.

Member, Mrs. Roache-Spencer argued that growth in2014 appeared to be less than the growth in 2013,which suggests that the Credit Union is losingmembers and the Credit Union would need to think ofmore innovative ways to interest the members so thatthey may stay with the Credit Union.

The Chairman acknowledged the fact that the CreditUnion has been losing members and cited memberdissatisfaction and better offers from other financialinstitutions among others, as some of the reasons forthis action. He further assured that since then theCredit Union has been working to meet the membersneeds in an effort of encouraging members to retaintheir membership with the Society.

UPDATE ON MERGER COMMITTEE

Member, Mr. Winston Anderson queried the origin ofthe "Merger Committee".

The Chairman said that there were merger discussionsbefore he became President, by the previous Board.He further stated that he appointed Mr. David Knightas Chairman of that sub-committee when he becamePresident, with a view to look into the possibilities ofmerging.

Mr. Anderson stated that, "at a Special GeneralMeeting held in Spanish Town on the April 8th 2014,





where Vice President Knight, informed him that acommittee would be put in place to look into thepossibilities in the event the Society had to merge. Hefurther stated that at that meeting members wereselected but the committee was not named.

He opined that looking at the matter, the Board ofDirectors should research the pros and cons ofmerging and report to the members their findings in aspecial general meeting after which a decision shouldbe taken by the members; not by sending informationby leaflets to inform members.

Addressing the meeting, Mr. David Knight said thatthere is a report of the Merging Committee on page86. He also said that a report was presented to theAGM last year and there are Minutes of the SpecialMeeting which was held on April 8th which dealtwith the resolutions to open the bond to include theJamaica Fire Brigade as well as the resolution toexplore merger options.

Mr. Smalling enquired if the Board was doing afeasibility study and not having merger talks. TheChairman responded by saying that the Board washaving merger discussions with the possibility ofmerger. Mr. Smalling asked that "based upon theearlier report of the Credit Union making notablesurplus and excellent performance, why is there aneed to consider merger?". He stated that he wouldhave expected that a committee would be formed todo a feasibility study, meaning: looking at thefinancial market, what is going on in the economy andglobally, how the decision would affect us and whatis our chances of surviving.

In his contribution to the discussion Mr. KennethElliott said that when one looks at what is happeningin the world of business, societies, banks andeverything we realize that the paradigm has shifted,therefore, if we stay with the old archaic paradigm theCredit Union will be dead and buried. So themembers must now look, not with emotions but withobjectivity to achieve what the Credit Union wants toachieve and if merger talk is the answer to the CreditUnion going forward, then we should review, re-organize, strategize and go forward.

After contributions from Mr. Hibbert and Mr. Heathe,the Chairman stated that the Board of Directors arenot just looking at the possibilities for merger, but alsowhat it would mean to stand alone. All theinformation relating to the two positions will bepresented to the membership for a decision as to theway forward.

MOU

Mr. Heathe enquired what is the MOU for. TheChairman stated that the Registrar, Mr. Gallimorepresented a MOU which he (Mr. Gallimore) hadcrafted as a sample for them (Correctional ServicesCo-op. and the Jamaica Police Credit Union) to beused as a guide in their talks. This was supported byMiss Cletan Marriot, representing the Registrar'soffice.

The Chairman asked that a motion be moved for theremaining discussions on the Merger issue to be takenunder the report on page 86, moved by Mr. ReneordSmalling and seconded by Mr. Albert Flynn. Themotion was carried.

The Chairman asked for a motion for the adoption ofthe Board of Directors’ Report. This was moved byMr. Othnel Ferguson and seconded by Mr. LeconSpencer. The motion was carried.

THE TREASURER’S AND AUDITOR’S REPORT

Treasurer, Mr. David Spencer asked that a motion bemoved that the Treasurer's Report be taken as read.The motion was moved and seconded by Mr. NormanSanford and Mr. Courtney Ruddock respectively. Themotion was carried.

MATTERS ARISING FROM THE TREASURER’SREPORT

Comparative Operating Expenses 2014/2013Member, Mr. Gary Thompson in reference to theComparative Operating Expense chart 2014/2013stated that there was nothing spent for marketing andpromotion. He further argued that it is in marketingand promotion growth is realized, membershipincreased and the organization promoted. He alsoasked if it was possible to have a billboard



advertisement as other credit unions do to attractmembers to the Society.

The Chairman responded saying that, "it has been onthe Agenda for some time and it is being considered.Currently we are in discussions with TVJ to start amarketing programme before moving to a more globalscenario". Mr. Thompson accepted the explanation.

RECOMMENDED LOAN

WRITE-OFF 2014Mr. Spencer referred the members to the list ofdelinquent accounts and asked permission for themto be written off.

Mr. Gilbert Smith remarked that he considers itoutrageous that some people could owe the CreditUnion so much money and some of them are retired.He queried if there is an appropriate collection agencyto collect from these people and if not, can they betaken to court.

The Treasurer in his response stated that a collectionagency has been established since January but there isa process which has to be exhausted before they canbe taken to court. He advised that the delinquentmembers are given every opportunity to regularizetheir account according to policy.

Mr. Spencer further stated that although the monieswill be written off, the collection process will still bepursued.

Mr. Anderson stated that it is sometimes better to writeoff these delinquent accounts, than to incur a costthrough the courts to collect a small amount.

He also informed the meeting that he has to beeducating members of the Retired Association thatretirement from the Department of Corrections doesnot mean that you are retired from the Credit Unionand money owed must be paid. He went further toadvise Mr. Spencer that, "in their marketingprogramme they should inform persons that retiringfrom the Department of Correctional Services doesnot stop you from being a member of the CreditUnion and they can continue doing business with theCredit Union".

Mr. Gilbert Smith suggested that an arrangementcould be made with the Accountant General’sDepartment and the Credit Union, that whendelinquent members are receiving their lump sumpayments, the money owed to the Credit Union isdeducted and given to the Credit Union.

The Treasurer stated that as it relates to retirees, theyare asked to take in a document signed by a JP, givingthe Credit Union the right to move on their pension.However, the Accountant General's Department cannot so act unless the members give them suchauthority when their pension payment are ready.

Mr. Cyril Knight enquired if the unarmed guardservice is included in the cost relating to Securityexpense of $1,142,428 on page 75. He suggestedthat the Board ask the Commissioner of Correctionsfor even one of the correctional officers, trained asdistrict constables, as he thinks the unarmed securityis unnecessary.

Mr. Spencer explained that the expense also includessurveillance fees and overnight security but therecommendation was noted and will be under activeconsideration.

Mr. Spencer asked for someone to move a motion forthe amount that has been recommended for write offto be accepted. The motion was moved by Mr.Gilbert Smith and seconded by Mr. WinstonAnderson. The motion was carried.

THE AUDITOR’S REPORT

The Auditor’s Report was presented by Mr. CyreneGilbert, Auditor, from Gilbert, Thompson &Company.

MATTERS ARISING FROM THE AUDITOR’SREPORT

Under Staff Costs Mr. Gilbert Smith asked if the staffwas given a salary increase for 2014. Mr. Spencerreplied that there was an across-the-board increase.

Mr. Spencer asked for a motion to adopt the Auditor’sReport. The motion to adopt the Auditor’s Report wasmoved by Mr. Donald Bredwood and seconded byMr. Gilbert Smith.





PROPOSAL FOR THE APPROPRIATION OF SURPLUS AND FOR THE FIXING OF THE MAXIMUM LIABILITY

DISTRIBUTION OF NET SURPLUS

Dividends on Permanent Shares (30%) $1,814,400.00

Interest Rebate $1,000,000.00

Additional 1% Loan Provisioning Reserve (BOJ Requirement) $3,000,000.00

Addition to Net Institutional Capital (For Institutional Strengthening) $1,500,000.00

Special Loan Reserves (To write down aged receivables) $1,000,000.00

Members Outreach/Social $ 800,000.00

Honoraria $1,000,000.00

High School $ 50,000.00

Lorrel Bruce Fund $ 5,000.00

Share Transfer Fund $ 100,000.00

Basic School $ 100,000.00

Scholarship Fund (Tertiary – Ethan King) $ 50,000.00

Childrens’ Home $ 80,000.00

Donation $ 202,826.00

TOTAL $10,702,226.00

The Treasurer asked for a motion to suspend theStanding Orders to take the Distribution of the NetSurplus and the Fixing of the Maximum Liability,

which was moved by Mr. Leslie Campbell andseconded by Mr. Gilbert Smith. The motion wascarried.

The motion for the acceptance of the distribution ofthe Appropriation of the Net Surplus for 2014 and thatthe maximum liability should be fixed at not morethan ten times the Society’s Capital was moved by Mr.Gilbert Smith and seconded by Mr. Albert Flynn. Themotion was carried.

On a point of order, Miss Marriott, through theChairman, asked that there be a resumption of theStanding Orders to accommodate the taking of theCredit Committee Report and the SupervisoryCommittee Report. The motion was moved by Mr.Cyril Knight and seconded by Mrs. Agatha Sandcroft.The motion was carried.

THE CREDIT COMMITTEE REPORT

The Credit Committee Chairman, Mr. WinstonWalters, asked for a motion that the Credit Committeereport be taken as read having been circulated. Themotion was moved by Mr. Norman Sanford andseconded by Miss Claudette Tingle. The motion wascarried.

MATTERS ARISING FROM THE CREDITCOMMITTEE REPORT

Funeral Expenses

Mr. Gilbert Smith commended the Credit Committeefor doing a magnificent job during 2014. He askedwhy the Funeral Expenses were so high and ifmembers were not taking advantage of the FIP.



The Chairman explained that members borrowedmoney to assist with funeral expenses of relatives,outside of the FIP bond.

There being no other questions or concerns, Mr.Walters asked for a motion to adopt the CreditCommittee’s Report which was moved by Mr.Winston Anderson and seconded by Miss HarribellaHamilton. The motion was carried.

THE SUPERVISORY COMMITTEE REPORT

The Supervisory Committee Chairman, Mrs. LisaCollie-Evering, asked for a motion that the SupervisoryCommittee report be taken as read having beencirculated. The motion was moved by Mr. GilbertSmith and seconded by Mrs. Patricia Ricketts-Wint.The motion was carried.

MATTERS ARISING FROM THE SUPERVISORYCOMMITTEE REPORT

Scope Of Work

Mr. Winston Anderson noted that in the reportmention was made of several complaints received andthoroughly investigated, but no mention of what themembers complained about nor the result of theinvestigations.

Mrs. Collie-Evering said that most of the complaintsreceived were about the FIP payments and they werereferred to the Board of Directors for their action.Follow up was done on the recommendations to theBoard and their response was satisfactory to thecommittee.

Mrs. Collie-Evering asked for a motion for theadoption of the Supervisory Committee Report whichwas moved by Miss Agatha Sandcroft and secondedby Mr. Neil Wilson.

RESOLUTIONS

The Chairman asked for a motion for the fiveResolutions on pages 84 and 85 to be accepted asproposed. The motion was moved by Miss JacquelineHall and seconded by Mr. Mark Bernard. The motionwas carried.

Mr. Wilson asked if it is possible for parents orguardians to continue paying for their children after

they stop going to school or decide to continue theireducation at the tertiary level. The Chairman replied,yes.

Miss Cletan Marriott led the members through theprocess of voting for the resolutions. The Resolutionswere passed by 133 members voting for theResolutions by show of hands. There were 137members present.

REPORT FROM THE NOMINATING COMMITTEEAND ELECTION OF OFFICERS

President, Mr. Leslie Campbell announced themembers of the Nomination Committee that consistedof Mr. Edgar Thomas, Mr. Rohan Richards and Mr.Leslie Campbell (Chairman).

He then asked for a motion to accept the report to betaken as read. The motion was moved by Mr. AnthonyLewis and seconded by Miss Jacqueline Hall. Themotion was carried.

Miss Cletan Marriott from the Department ofCooperatives and Friendly Societies conducted theelection of officers for the Board of Directors,Supervisory and Credit Committee.

Miss Marriott asked if there was any othernominations from the floor and Mr. Reneord Smallingwas nominated by Mr. Winston Heathe and secondedby Mr. Winston Anderson for a position on the Boardof Directors.

BOARD OF DIRECTIORS

Retiring Recommendations

George Thorpe George ThorpeRaymond Williams Raymond WilliamsCharles Wheatle Michael Montaque

Reneord Smalling (nominated from the floor)

After voting, the following persons were elected toserve for two years:

• Mr. George Thorpe• Mr. Raymond Williams• Mr. Reneord Smalling





SUPERVISORY COMMITTEE


Lisa Collie-Evering Lisa Collie-EveringSheryl Reynolds Sheryl ReynoldsCourtney Ruddock Courtney RuddockTracia Chambers Nargeree AllisonNorman Sanford Fabian McKoy

The following persons were elected to serve for oneyear:

Lisa Collie-EveringSheryl ReynoldsCourtney RuddockNargeree AllisonFabian McKoy

CREDIT COMMITTEE


Gary Byfield Gary ByfieldWinston Walters Winston WaltersInderia Hutchinson Inderia Hutchinson

Elected for two years:

Gary ByfieldWinston WaltersInderia Hutchinson

Ms. Cleton Marriot asked that a motion be moved forthe Board of Directors to select delegates and alternatedelegates to the Annual General Meeting of theJamaica Fisherman’s Cooperative and the JamaicaCooperative Credit Union League. The motion wasmoved by Mr. Norman Sanford and seconded by Mr.Winston Anderson. The motion was carried.

PRIZES

The following persons won prizes:

Early Bird PrizeMr. Denton Heslop

Treasure Hunt PrizesMr. Franklin BennettMiss Sheryl BrownMiss Colleen Turner

Old $20.00 billMiss Pamiel Scott

The Oldest AGM BookDenton Heslop

AWARDS

An award was presented to the oldest active servingmember, Mr. Jabez Williams, in his absence.

Savings Promotion Winners

Roberta WalcottRobert HolgateSheleen Flynn-Plummer

GENERAL MANAGER’S AWARDS

Mrs. Georgia Gordon-Dixon and Mrs. Melisia Ford-Campbell were recognized for their outstandingperformance.

Credit Unionette Gifts

• Okeitha Bagaloo• Joshua Knight• Jovan Williams• Maliq Davis

The Retired Association won the prize for having themost members in terms of the ratio.

Raquel Gordon won the prize for the Credit Unioncelebrating 57th AGM.

Other prizes were given out.




REPORT OF STRATEGIC MERGER COMMITTEEMEETING

The Chairman, Mr. David Knight asked for a motionfor the report to be taken as read, which was movedby Miss Claudette Tingle and seconded by MissBeverley Halstead. The motion was carried.

The report having been circulated and debated, Mr.Knight asked for questions and comments in relationto the issue of merging. Bulletins containing twentyquestions and answers in relations to merger wereissued to all members present.

Mr. Knight stated that the Merger Committee wasgiven a mandate at the Special Annual GeneralMeeting April 8, 2014, to explore strategic partners asa possible viability and sustainability of the CreditUnion. He advised the members to examine all thefactors and issues which relate to the Credit Union’sviability before coming to decisions on merger.

Mr. Winston Heathe objected to the instructions ofthe Chairman, citing that "according to the rules of theCo-operative Society, members should have gottenthe bulletins at least seven days prior to the meeting,however seeing this was not done, no decisionshould be taken on the Merger Committee’s Report.

Mr. Knight explained that the bulletin containedtwenty questions which members asked and answersto those questions and there was no decision to betaken regarding anything in the bulletin at themeeting.

Mr. David Knight asked whether the members wantedthe Merger Committee to continue the mergerdiscussions. Miss Marriott reminded Mr. Knight thatthe Special General Meeting gave the MergerCommittee the mandate to explore merger partners,so the Merger Committee already has that mandate.The Resolution giving the Merger Committeeapproval to explore merger partners was read to themembers by Mr. Knight. Mr. Knight said that they willcontinue with the sensitization process.

Mr. Knight asked for a motion to accept the report.The motion was moved by Mr. Carl Campbell andseconded by Miss Inderia Hutchinson. The motionwas carried.

PRESENTATION

Jamaica Credit Union E-Payment Services

A presentation was made on the Conec Mobile Walletby Miss Kerry-Ann Ainsworth. She said that most ofthe members would have been familiar with theJamaica Credit Union E-Payment Service that hasbeen re-branded and is now Conec Mobile Wallet.She informed the members that they were in theprocess of settling a date with the General Managerto finalize the training for the staff of the Credit Unionand that should be completed by mid July. Memberswere then directed to the Conec Mobile booth on theoutside for persons to registered free of cost.

ANY OTHER BUSINESS

There was no other matter to discuss.

CHAIRMAN’S CLOSING REMARKS

The Chairman thanked everyone for attending the57th Annual General Meeting. He stated that theBoard of Directors looks forward to working with themembers for another year. He thanked all members,staff and visitors for attending. Special thanks weregiven to Mr. Wheatle, past Secretary of the Board; Mr.Sanford and Miss Tracy-Ann Chambers from theSupervisory Committee for their service to the CreditUnion. In addition he welcomed Mr. ReneordSmalling to the Board of Directors. At this point hewished God’s blessing on all present.

The meeting was adjourned at 4:10 p.m. on a motionmoved by Mr. Winston Anderson and seconded byMr. Albert Flynn.

Signed: ………………….......……………….….Mr. Reneord Smalling

Board Secretary

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DEPARTMENTOFCORRECTIONSANDJAMAICAFIREBRIGADE

Sat

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st13,2016

–10am

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Cor

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lSer

vice

sCoO

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ditU

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Ltd

.“FeeltheWarmth,EnjoytheServices”

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Boardof

Directors

Boardof

Directors

GEORGE THORPEVice President

DAVID SPENCERTreasurer

REUBEN KELLYAssistant Treasurer

RENEORD SMALLINGSecretary

RAYMOND WILLIAMSAssistant Secretary

DAVID KNIGHTDirector




1.2 Legislative Outlook

On the legislative front, the Bank of Jamaica (BOJ)continued to be aggressive in tightening up the riskmanagement and compliance of mainly financialinstitutions. We had anticipated that the BOJRegulations for Credit Unions would have takeneffect. The Co-operative and Friendly Societies Actwas being amended to include issues regarding jointaccounts, foreign exchange accounts, greater powersof the Registrar over financial co-operatives, otherentities becoming members of credit unions, termlimits of volunteers and several other areas toempower the Cooperative Movement.

2.0 CREDIT UNION MOVEMENT DATA AND TRENDS

2.1 Growth Trends in the Credit Union Movement

Growth Trends in the Credit Union Movementcontinued on a downward trajectory. Two of the

major challenges which faced the movement over theperiod were membership and savings growth. (seechart below for the Movement’s financialperformance for 2015.)

2.2 Task Force appointed to look at the Future of the Credit Union Movement

At the Credit Union Board Consultation Meeting heldon November 28, 2015, the Credit Unions presentunanimously agreed that the Credit Union Movementshould peruse a program of planned consolidationand mergers and sharing of back office operationsincluding the information technology platform. A taskforce was appointed to execute this mandate. The taskforce would initially make a presentation to theLeague Board and then to the Movement at the JCCULConvention in 2016. Our General Manager, MrsClaudia Thompson Roache sits on this task Force.

BOARD OF DIRECTORS REPORTBOARD OF DIRECTORS REPORTYear ended December 31, 2015

Indicators CSCCU2015

CSCCU2014

YTD Growth2015

YTD Growth2014

YTD Growth2013

As at2014

As at2015

Savings

Loans

Assets

$68.13B 8.55%7.04% 6.64% 13.8%

$59.51B 6.93%10.01% 6.11% 18.6%

$88.9B

$62.726B

$55.712B

$82.150B 7.95%7.90% 7.03% 14.89%

5.8%

3.1%

6.2%

1.0 ECONOMIC AND LEGISTATIVE OUTLOOK

1.1 Economic Outlook

The Jamaican economy in 2015 hit many commendable milestones whichhave not surfaced in a while. The economy returned to positive growth of0.8% mainly attributed to heightened investors confidence in the businesssector. This was also evidenced in Jamaica being ranked the best performingstock market in 2015. Jamaica was also ranked by the World Bank as the topcountry in the Caribbean for doing business. Jamaica continued to pass the

IMF tests which are also an indication that the country is managing well withinthe objectives and scope of the IMF agreement. The inflation rate also saw a

significant decline in 2015 to 3.7% from 6.4% in 2014. The oil prices also gaveus a big break where for the most part there was a significant reduction.



2.3 Update on Regulatory Landscape and the BOJ Credit Unions Regulations

The Bank of Jamaica has been forced under the IMFagreement to tighten up the operations of financialinstitutions and to almost use one monitoring tool forall. Credit Unions will soon be regulated by the BOJand will come with a higher level of operationalimperatives such as stringent reporting, heavy costsand more restrictions.

For the small and medium sized Credit unions, theregulations will pose a greater level of pressure andsome of them may not be qualified for licensing.Already some of them have taken steps to eithermerge or register as a Thrift and Friendly Society asthis will lessen the regulatory burden and costs. Someof the larger Credit Unions have taken steps to engagein merger discussions and will materialize in 2016/17.

3.0 CSCCU MAJOR ACHIEVEMENTS 2015

The major achievements for the period are highlightedas follow. These formed a major part of our key resultareas at our strategic planning Retreat in 2015.

� Recorded Surplus of $22.4M

� All major financial indicators (loan, savings, asset)showed single digit growth despite the fiercenessin the financial market place.

� Major progress with the recruitment of FireFighters. To date aapproximately 400 enrolled.

� Developed TV ads and commenced advertisingon TVJ ( corporate ad, savings and membershipdrive)

� We received two 3 Awards at the Credit UnionLeagues Convention in 2015. (1) Loan ChampionAward for the Medium Sized Credit UnionCategory (2) JCIA Award for 2nd Runner Up for

the highest amount of insurance business andCUNA 1st place in Financial reporting standard/Best AGM Book for our Category.

� Revision of all Operational Policies

� Re-engineering/restructuring programme com-menced in 2015 and report completed in Feb2016. Implementation will take place in 2016/18

� Point of Sale Multi Link debit card machine nowin place for more convenient service.

� “It Pays To Save” promotion recorded over $4Min savings

� Savings and Membership Dive on stream tocomplete in December 2016. Grand Draw in2017.

� Partnered as an agent with JaMobile/CONECwhere monies can be stored on cell phones, topup credit, pay bills etc.

4.0 SUMMARY OF FINANCIAL PERFORMANCE 2015

The year under review recorded single digit growthwhich on average is above inflation of 3.7%. All keyfinancial areas. See table below with a three (3) yeargrowth trend.

4.1 Assets:

Assets recorded a growth of 6.2% closing at$541.77M as against $509M in 2014. This growthwas above the inflation rate of 3.7% which iscommendable.

4.2 Loans:

Loans recorded growth of 3.1% with an endingbalance of $426.6M. The challenge with the loanportfolio was the diversification as a substantial


Indicators % Growthin 2015

Total Asset

Loans

Savings

6.2%

% Growthin 2015

14.89%

% Growthin 2015

% Cumulative Growthover 3 yrs (2013-2015)

5.79% 26.88%

3.1% 18.6% 8.59% 30.29%

5.8% 13.8% 7.42% 27.07%



amount of the portfolio is in unsecured. Withimproved liquidity, the diversification would leveragemore on secured facilities to reduce the credit risk.

4.3 Savings:

Savings grew by 5.8% closing at $334.6M. Despitethe growth in savings, it was not enough to satisfy theneeds of our members with the wide variety of loans

they required. We therefore challenge all members toimprove your savings.

4.4 Surplus:

The Surplus for the period was $22.4M in comparisonto 2014 at $13.3M. This was mainly triggered mainlyattributed to the growth in the loan portfolio and thereturns from these loans. See surplus trend from 2008-2015.


SURPLUS TREND 2008-2015

4.5 Appropriation for Surplus

An amount of $17.9m will beavailable for distribution after we haveapplied the 20% legal statutoryreserve requirement. We will beproposing a 100% dividend paymenton permanent shares, up from 30%last year. We have proposedallocations toward our 60thAnniversary, Office upgrade/ITinfrastructure as we need to startpreparing for these activities and thenecessary strategic changes. We alsomade a further proposal to increasesome of the loan/provision reservesand the strengthening of the

institutional capital.

4.6 Eight (8) year financial review

2008 59.7 50 9.7 254.2 218 335

2009 70.7 67.4 3.3 281 233 375

2010 64.2 60.2 4.0 299 248 403

2011 63.4 62.2 1.2 303.4 229 396

2012 57.8 55.3 2.5 283 286 405

2013 68.8 66.1 2.7 287.5 348 443.2

2014 93.5 79.7 13.8 324 413 505

2015 116.4 93.9 22.5 334 426 541.7

Year Earnings Expenses Surplus Total Savings Loans Total Asset$M $M $M $M $M $M



4.7 Pearls Ratio/Regulatory Ratios

Our overall performance of these financial ratios has improved but we continue to struggle in two key areaswhich are savings/liquidity and operating expenses. Strategies will be implemented to improve these ratios.

4.8 Membership Statistics 2011-2015

Membership growth over the past 5 years stood at 15.7%. Membershipgrowth in the movement has been one of the biggest challenges. Thestandard yearly growth rate is 5% and Credit Union movement reporteda 1.65% growth in 2014 and 1.08% in 2015%. We recognized thatfamily members will be one of the major targets to improvemembership as well as recruiting the employees and families of theJamaica Fire Brigade. Letters were sent to dormant account holders butsome of them have changed addresses and some were contacted in theinstitutions.

4.9 Status of the Membership of the Jamaica Fire Brigade

Last year the recruitment started off very slowly as the awareness of the bond extension had not gained enoughmomentum. In 2014, when the bond extension was approved, we recruited 60 members. In 2015 that amountincreased to 130. To the time of the AGM in 2016, there were over 360 applications. This is commendable andthe membership drive now is bearing fruits. The Fire Officers have been calling for a name change for betterinclusion. This was discussed at our recent strategic retreat.


PEARLSSTANDARDS 2012 2013 2014 2015INDICATOR

PROTECTION Provision for Loan LossesSolvency

EARNINGS/PROFITABILITY Net Income/Average Assets Gross Margin/Average AssetReturn on Savings Operating Expenses/Avg Assets

ASSET QUALITY Delinquency Ratio Non-Earning Assets/TA

RATES OF GROWTH Membership Total Asset (growth)

LIQUIDITY Liquid Asset- ST Payables/Total Deposits Liquidity Reserves/Total Deposits

STRUCTURE Capital Ratio: Reserves/TA Net Loans/Total Asset Total Savings/Total Asset

>100% >111%

>2.3% >10%>Inflation(9%) <8%

5% <7%

<5% Inflation Rate

20-30%

10%

>8% 70-80% 70%-80%

100.00% 24.86%

0.50% 12.66%1.58%12.04%

2.48% 19.65%

4.19% 3%

17.29%

11.28%

11.71% 69.60% 69.31%

100%125.20%

1.07%13.17%

2.41%12.16%

2.13%9.26%

4.08%9.51%

13.87%

11.81%

10.55% 77.73 64.22

100%121.57%

1.76%15.36%2.62%13.09%

2.78%7.17%

>1%12.41%

15.18%

11.98%

9.75%77.8768.16%

100%129.10%

4.30%18.28%2.95%13.45%

4.3%6.84%

6.2%

16.2%

16.14%

9.75%78.1263.70%

No. of MembersYear

2011 4207

2012 4407

2013 4686

2014 4788

2015 4869



4.9.1 Credit Unionette

The Credit Unionette Committee was re-establishedand chaired by Mr. Gilbert Smith. Several meetingswere held to look at policy matters and activities forthe children. A fun day was hosted at Prison Oval inMay 2015 involving treats and competitions. JabariMurray and Okito Bagaloo won the Essay competitionin their age categories. For the Piggy Bank Savingscompetition, Maliq Davis, Jabari Murray and JovanWilliams won in their respective age categories.Congratulations to all the winners.

The Piggy Bank Savings which was introduced in2014 gained momentum in 2015. The back to schoolloan which was also developed performed well. Weare encouraging parents to continue saving for yourchildren’s education and future goals as education isone of the Credit Union’s core values forempowerment of families.

4.9.2 Jamaica Association of Retired Correctional Officers (JARCO)

JARGO played a vital role in supporting, marketingand protecting the image of the Credit Union. TheAssociation has several Credit Union membersconducting active business at the Society. The groupappointed a Liaison Officer, Mr. Gilbert Smith andsince then we have seen a spike in the number ofpensioners on salary deduction and direct pensionpayment. The savings from this group was also veryencouraging. We supported the Association’s manyactivities and events and we are looking forward tothe continued partnership with the Association.

4.9.3 New Products And Services

Several insurance products were introduced byJamaica Co-operative Insurance Agency (JCIA) incollaboration with Sagicor. These products areavailable to Credit Union members. We invite you totake advantage of them. See listing below.


PRODUCT NAME BENEFITS

JCIA/Sagicor - Creditor Life Insurance Insures loans (in addition to loan protection)

JCIA/Sagicor- Group Life Insurance Plan Death benefit of $1.5M

JCIA/Sagicor - Accidental Life Insurance Covers temporary, partial and permanent disability. Also covers death in an accident.Coverage - $1.5M

4.9.4 Aged Receivables

As at December 2015, doubtful and uncollectiblereceivables stood at $4.23M coming from $5.23M in2014. This reduction was based on provision madefrom the appropriation of $1,000,000.00 which wasapplied from the appropriation of surplus for 2014. Afurther recommendation is made as we continue tomanage the receivables.

5.0 STRATEGIC DIRECTION

In light of the changes in the regulatory environmentand the competitive forces in the financial market, theCredit Union must prepare to select and adopt theright choice of business model that will be robustenough to withstand the pressures and provide qualityservices to its members. The options available are: (1)collaboration with shared services and shared banking

(2) Thrift and Friendly Societies (3) Merger and (4)Stand Alone. The diagram below gives an example ofthe platform and framework we need to create withthe selected model.



5.2 Update on Merger/Viability Options Committee

Later in the meeting, a full report will be tabled by the Merger/Viability Options Committee. Over the period, thecommittee held several meetings to explore the options for viability of the Credit Union. For this AGM, the reportfrom the committee will include the presentation of four (4) viability options for discussion and possible approval.The discussions also continued with the Jamaica Police Credit Union as a possible merger partner.

6.0 JCCUL MEETINGS & REPRESENTATION


5.1 Strategic Priorities 2016 and Beyond

The following are the main strategic priorities discussed at our recent Strategic Retreat. We believe that theseactivities are important to transform the Credit Union into a more customer centric and competitive organization.

STATEGIC ACTIVITIES

Name Change of the Credit Union

Refurbishing of Office and orRelocation

Mobile Bus

Restructuring Operations/HumanResoursesInformation Technology

Savings and Membership Push

Reduction of Operating Costs

RATIONAL

To reposition the Credit Union to include the Fire Fighters andany other groups in the future.To improve the aesthesis (privacy, image)

This will facilitate improved distribution of services and brandimage of the Credit Union

This will address the issue of staff competence, job fit, costs,and mainly to improve the service quality. Internet/online banking, improved access to information

Strategically necessary for real growth and sustainability

To maintain costs within the PEARLS ratio standard.

TIMELINES

2016/2017

2016/2017

2017/2018

2016/2017

2016/2017

Ongoing

Ongoing

Meetings Dates Delegates/Representatives

Annual General Meeting & ConventionHilton, Rose Hall Hotel

May, 2015 Leslie Campbell & President,David Spencer, TreasurerClaudia Thompson-Roache, GM,Observer

Jamaica Co-operative Insurance Agency(JCIA) AGM

May, 2015 Leslie Campbell & David Spencer

Executive Rap Session (JCCUL)

Board Consultation

April, 2015

November, 2015

Charles Wheatle, Leslie Campbell,BDM and GM

Leslie Campbell, David Spencer,Reonard Smalling & GM



6.1 Jamaica Co-operative Credit Union League (JCCUL) Convention, May 28-31, 2015

The meeting took the usual format with workshops,awards banquet and the AGM. On Thursday, May 28a plenary session was convened highlighting severaltopics including updates on the Bank of JamaicaRegulations for Credit Unions. The conference wasofficially opened by a renowned key note speaker, MsCynthia Campbell from the Filene Research InstituteMadison, Wisconcin, USA. Her topic was “ChannelDelivery for tomorrow and its implication for Gen Y.

On Friday, May 29, 2015, several workshops wereheld as follow.

• The Art of War…Cyber War

• Enhancing Customer Service andCompetitiveness in Credit Unions

• Financial Education – Empowering the nextgeneration

• Implementing Flexi Work day in Credit Unions.

A special strategic planning session was heldsimultaneously with the workshops. The planningsession included Board Members and GeneralManagers from all the Credit Unions. The objectiveswere to plan a 2020 vision for the Credit UnionMovement. The session was facilitated by theCornerstone Credit Union League in Texas and otherCredit Union affiliated organizations in the UnitedStates.

CU Awards

Several awards were granted to credit unions in thefour major categories of Credit Unions. The mainawards were:

• Maga Category: JTA Co-op was awarded the OJThorbourne trophy for Mega Credit Union of theYear.

• Large Category: NCB Co-op was awarded theRenford Douglas trophy for Large Credit Union ofthe Year.

• Medium Category: Postal Staff Co-op wasawarded the Paul Thompson Trophy for Medium-Sized Credit Union of the Year.

• Small Category: Nestle was awarded the JohnPeter Sullivan trophy for small Credit Union of theYear.

The AGM took place on Saturday, May 30, 2015mainly focused on the performance of thesubsidiaries. All except two of the JCCUL Subsidiariesperformed well. Centralized strategic Services wasperforming at a loss and plans were already in placeto rationalize the department under JCCUL. Also,JaMobile/CONEC was not financially vibrant basedon the embryonic stage of the company and the heavysubsidy from JCCUL.

7.0 GOOD AND WELFARE/SOCIAL RESPONSIBILITY

7.1 Scholarships

GSAT Awardees

This aspect of our corporate social responsibility is stillactive and going well. We met with the GSATawardees and their parents and issued the second tierpayment. Their academic performances were averageand we admonished them to improve theirperformances over the next assessment period. Theawardees are:

Prince Benbow Jr.

Glendon Roulston Jr.

Rajaun Gayle

Jae Ann Russell

7.2 Tertiary Scholarships

Ms. Melisa Asphalt, our Tertiary scholarship awardeescollected her second tranche of $50,000.00. She wasalso counselled to improve her performance for thenext academic year. The scholarship in tenable forthree (3) yrs ending 2018 at the University of the WestIndies

7.3 Outreach: Salvation Army/Rae Town Basic School & Best Care Foundation

The AGM increased the contributions to thesecharities last year 2014. The Basic School wasincreased from $40,000.00 to $100,000.00 and theChildren’s Home increased from $60,000.00 to




$80,000.00. The presentations made to them werewell received. The Board has made anotherrecommendation for an increase in the 2015appropriations of surplus. The needs of these charitiesare far reaching and we will not hesitate to assist inthe best possible way.

Best Care has restructuring plans underway. The BasicSchool has started to receive PATH assistance fromthe Government and this initiative has increased thestudent population by 25%.

We also maintained an active presence andparticipated in Board meetings, Banquets, Fun Daysand in other activities.

7.4 Donation

Several requests for donation were received but wewere constrained by the limited budget. Donationswere made to various Correctional Centres to assistwith their social activities including sports day, healthfairs, refurbishing, etc. Contributions were also madetowards medical and funeral expenses.

8.0 SPECIAL AWARDS AND ACHIEVEMENTS

• Today we will recognise three (3) of ourcommittee members who recently retired from

office. They are Charles Wheatle, TraciaChambers and Norman Sanford. They were trulydevoted to service to their fellow men and we usethis forum to pay tribute to them for theirmagnanimous contribution.

• Commendations to all Officers that werepromoted to higher ranks in the Department ofCorrectional Services and the Jamaica FireBrigade.

• Congratulations to all our credit unionettemembers that were successful in their GSATexaminations and to those that graduated andaccepted for High Schools and Tertiaryinstitutions.

• Commendations to all members that received theDepartment of Correctional Services (DCS) longservice award and national awards.

9.0 STAFF AND VOLUNTEERS WHO SERVED

We sincerely value our staff and volunteers whoserved us well over the period. Let us encourage theirwork and their hearts that they will be strengthenedeven more to take on greater challenges.


10. MEETINGS AND ATTENDANCE

Below is the attendance listing of the various meetings.

Regular Board Meetings

Names Possible Present Absent Excused Remarks

Leslie Campbell 12 10 – 2 Unavoidable absent

David Knight 12 9 – 3 Work related

George Thorpe 12 11 – 1 Work related

David Spencer 12 12 – – –

Charles Wheatle 7 7 – – Tenure ended

Reuben Kelly 12 3 – 9 Off the Island

Raymond Williams

Reneord Smalling

12

5

10

5

1

–

1

–

Work relatedReplaced Charles Wheatle



Executive Meeting

Special Board Meeting

Joint Committee Meeting

Board Staff Meeting



Leslie Campbell 5 3 – – Work related

George Thorpe 5 4 – – Work related

David Spencer 5 4 – – Unavoidable absent

Raymond Williams 5 4 – – Travel overseas

David Knight 5 2 – – Work related

Reuben Kelly 5 2 – – Work related

Charles Wheatle

Reneord Smalling

1

4

1

4

–

–

–

–

Tenure ended

Replaced Charles Wheatle


Leslie Campbell 3 3 – –

David Knight 3 3 – –

George Thorpe 3 3 – –

David Spencer 3 3 – –


–

–

–

–


Raymond Williams

Reneord Smalling

3

2

2

2

–

–

–

–

Unavoidable absent



Leslie Campbell 4 4 – – –


Charles Wheatle

Reneord Smalling

1

3

1

3

–

–

–

–

Tenure ended



Leslie Campbell 2 2 – – –

David Knight 2 2 – – –

George Thorpe 2 1 – – Work related








Raymond Williams

Reneord Smalling

2

1

2

1

–

–

–

–

–Replaced Charles Wheatle

11.0 ACKNOWLWGEMENET AND CONCLUSION

11.1 Sympathies and condolence

The Board of Directors reaches out to those who suffered personal setbacks, illnesses, bereavement anddisappointments during the year. We understand how difficult these circumstances can be but there is hope. Maythe Lord strengthen your hearts and grant you peace.

11.2 Appreciation (Commissioner of Corrections and Jamaica Fire Brigade, JCCUL, BOJ, CUNA, etc)

We give our sincere appreciation to Commissioner of Corrections and Fire, JCCUL, CUNA, JCIA, our Auditorsand all the different entities/stakeholders that we have partnered with. We certainly look forward to working withthem in the future.

11.3 Conclusion

We have made known some of the major priorities for 2016 and that we will need your full support with theimplementation. The issue of savings mobilization is central to our growth and existence and so we implore youall to take advantage of our savings products that are specially designed for you short term and future goals.

Special thanks to you all for your work and unwavering dedication to the growth of Correctional Services Co-operative Credit Union. You all have the 2015 an exceptional year. Despite the many challenges in the economicenvironment, we will remain strong as we will stick to our mandate and take care of each other. So congratulationsto all and be truly thank God for making all of these worthy accomplishments possible.

Signed: .........................................................Leslie Campbell

President




2.0 STANDARD OF LIVING IMPROVEMENT

Despite some improvements in the economy and the resultant decrease in inflation to 3.7%, in addition to somesalary adjustment received by our members, the expected take off in terms of increase savings and loans whichshould result from meaningful improvement in standard of living/disposable income, did not materialize. Mostof our members remained loaned and saved out and could not financially respond to some of their urgent needsas well as the product offerings that are available at the credit union. This too impacted our growth potential for2015. Hopefully the expected tax break in 2016 will assist in this regard.

3.0 FINANCIAL PERFORMANCE SUMMARY

The Credit Union performed well in all key indicators even though some of the targets were not met. Thesehowever, did not affect the net performance of income and expenses as the credit union realized a surplus of$22.4M which was way above our target of $14M. See below a summary of the financial performance as againstbudgeted.

TREASURER’S REPORTTREASURER’S REPORTYear ended December 31, 2015

1.0 INTRODUCTION

The Board’s report highlights some of the major economic and legislative trendsfor 2015. In addition to the legislative and regulatory perspectives we wereenlightened in regard to some of the reporting and costs considerations that areexpected to be associated with the Bank of Jamaica (BOJ) regulations for CreditUnions when they are legislated. Some of these costs relates to businesscontinuity, Risk Management, Asset tax, fit and proper, IT upgrade, licensingfees, JDIC premiums, auditing fees and others. These costs will pose majorchallenges to especially small and medium sized Credit Unions. Although wehave started to strengthen our enterprise risk management framework to meetthe licensing requirements of the BOJ, the extent of these new costs willadversely affect the sustainability of our operations.

Table 1: Budgeted Performance and Growth 2014/2015

BUDGETED PERFORMANCE AND GROWTH 2014/2015

INDICATORS BUDGETED2015 ($M)

ACTUAL2015 ($M)(Audited)

VARIANCE($M)

GROWTH2015

GROWTH2014

AUDITED2014 ($M)

Asset 563 541.7 (21.3) 6.2% 509.2

Loans 455 426.8 (28.2) 3.1% 413.3

Savings 380 334.3 (45.7) 5.2% 317.5

Income 107.5 116.3 8.8 13.8% 93.7

Expenses 93.4 93.9 (0.5) 6.3% 80.4

Surplus 14 22.4 8.4 68.4%

14.89%

16.10%

13.50%

24.10%

16.79%

392.50% 13.3



4.0 ASSET GROWTH 2008-2015

Fig 1

5.0 INCOME COMPOSITION 2015

Fig 2

6.0 EXPENSES

We continued to be challenged by high operating costs. At 13%, we are currently way ahead of our Peer Groupmembers and also the standard of 8%. While total expenses fell almost in line with budgeted, expenses increasedby $13.4M over 2014. This was mainly due to staff costs (incentive and uniform payment), interest expenses,meetings, professional and audit fees. These increases were for the most part justified based on the need toimprove risk management, strategic planning and other key areas.




Fig 3 EXPENDITURE 2014 VS 2015

7.0 FINANCIAL VIABILITY AND GROWTH

Based on the PEARLS ratios captured in the Board’s report, we were within most of the financial prudentialstandards. The areas of major concern were savings and membership growth as well as high operating expenses.We have been constantly developing and implementing new strategies to improve the efficiency of our operationsto reduce costs and also to address the other areas of concern. With respect to the issue of savings and membershipgrowth, we have launched a savings and membership drive in 2016 and use this medium to encourage you ourmembers to recruit your family members and sign up for one or more of our wide range of attractive savingsproducts. It is in this way that we expect to guarantee the growth and viability of our Credit Union.

8.0 SAVINGS GROWTH 2008-2015 ($M)

Fig 4




9.0 SAVINGS COMPOSITION 2013-2015

Fig 5

Table 2: Financial Trend Analysis 2009 - 2015

10.0 DELINQUENCY/WRITE OFF/LOAN PROVISION

10.1 Delinquency

Table 3: 5 YEAR DELINQUENCY TREND REPORT 2010-2015


YEAR # OF MEMBERS AMOUNT ($M) % OF LOAN

2010 53 3.50 1.41

2011 58 9.10 3.97

2012 49 7.09 2.48

2013 113 12.30 3.53

2014

2015

88

71

14.70

15.87

3.59

3.72

YEARINCOME

$M

EXPENSES

$M

SURPLUS

$M

SAVINGS

$M

LOANS

$M

ASSET

$M

2009 70.7 67.4 3.3 281.0 233 375

2010 64.2 60.2 4.0 299.0 248 403

2011 63.4 62.2 1.2 303.0 229 396

2012 57.8 55.3 2.5 283.0 286 405

2013 68.8 66.1 2.7 279.0 348 443

2014

2015

93.7

116.4

80.4

94.02

13.3

22.4

317.5

334.6

413

426.8

509

541.7




The delinquency rate stood at 3.7% well within the 5% PEARLS standard. The delinquency committee workedclosely with staff members to manage the delinquent portfolio. Meetings were held with members with specialissues and for the most part members co-operated with the arrangements made. We engaged the assistance of anew external Collector and expect that this will reflect positively in the 2016 financial results. The Collector willmainly manage the loan write off portfolio and chronic accounts.

10.2 Provision for loan loss Reserves

We have been strengthening the loan provision for bad debts over the past two (2) years. Separate and apart fromthe regular provision of $4.4M and $4.3M in 2014 and 2015 respectively, we have added $3M to the pool. Thisis in keeping with some aspect of the regulatory requirements and to minimize the risk associated especially withour current unsecured loan portfolio. A proposal will be made for an additional amount to be added to the loanloss reserves from surplus. This is to further protect the structure of the credit union without having so much torely on the institutional capital.

10.3 Write off

The recommended amounts for loan write off for 2015 is $3,727,077.45 (see listing attached). The majority ofthese loans represent members who have left the DCS and their whereabouts cannot be found. We thereforeseek your approval to write off these accounts. As indicated, the Collector will earnestly pursue these accountsafter the write off. Let me also use this forum to inform our members that the collection charge is 25% of the totaldebt. This charge is in addition to the total debt and will be at the members’ expense. As you can see, this is asignificant charge and therefore we urge you to avoid these charges as best as possible.

11.0 CLOSING REMARKS

The Credit Union continues to make positive strides in spite of the many challenges. We are indeed limited inour scope to adequately meet the needs of you our members especially in the areas of technology and loans.Going forward, as we examine the various options for continued viability, our primary focus must be onsustainability in an environment of increased aggressive competition and regulatory requirements. There is alsothe need to adequately satisfy the ever changing needs of you our members. In the past, collaboration andpartnerships have proven to solve some of the problems of resource challenged entities to deliver better value totheir constituents. The paradigm has certainly shifted. Loyalty, identity and familiarity while important, are nolonger the decisive factors that drives financial institutions like credit unions to succeed. In that regard let us nottake lightly the impact of the regulatory environment and the BOJ plans for the credit unions. May God guide usto make the right decisions that will make our Credit Union sustainable.

I sincerely want to thank you the members for allowing me to serve you as a member of the Board of Directorsfor the past eight years. Also thanks to the various members of the Board of Directors who, over this time period,have consistently elected me to be your Treasurer. It was my pleasure to serve. To the Credit and SupervisoryCommittees, Management and Staff, thanks for your kind assistance over the period. May God continue to blessour efforts, as we strive for greater future prosperity .

Signed: ................................................David Spencer

Treasurer




DELINQUENT ACCOUNTS OVER 90 DAYSDELINQUENT ACCOUNTS OVER 90 DAYSAT 31ST DECEMBER 2015

LOAN ARREARS ARREARS INTEREST NAMES BALANCE AGE AMOUNT ARREARS Gerald Lynch 125,924.03 93 42,420.63 0Noval H Walsh 2,180,919.78 96 129,244.70 0Keith Brady 35,945.60 107 33,863.16 718.91Norris Bent 12,067.35 114 8,482.02 0Ivana Wade 228,705.75 117 26,450.97 0Dean R. Richards 201,413.63 120 20,508.50 0Dean R Pinnock 21,586.12 120 21,586.12 0Asha A. Rankine 292,079.32 120 56,658.03 0Mary Wright 68,785.15 123 13,062.00 0Ivana Wade 50,938.56 128 35,137.03 0Kemoy Francis 204,555.26 130 22,219.00 0Aaron E.Chambers 27,446.48 131 32,386.82 4,940.34Kemoy Francis 584,143.39 133 110,734.75 0.01Ronald Davis 64,134.53 135 32,207.16 0Ronald Johnson 35,565.35 150 35,565.35 0Davion Burke 278,575.39 163 97,297.64 0Paula Burke-Anderson 226,138.91 165 73,095.80 0Amahl Barrett 33,777.04 166 33,777.04 0Cornelius D. Johnson 19,708.18 170 19,708.18 0Kerry-Ann Sergeant 36,924.71 171 23,559.79 0Asha A. Rankine 183,449.28 175 29,324.80 0Keith Brady 21,397.78 183 21,397.78 0Dwight Brown 277,265.78 187 87,873.34 17,578.66Suseth A. Reid 70,323.11 209 70,323.11 0Natalee N. Mckenzie 102,082.21 229 102,082.21 0Paula Burke-Anderson 19,776.20 242 18,217.20 0Simone Davis 1,351,019.67 257 221,281.44 0Ackeem A. Ritchie 52,381.20 265 17,340.16 0Junior Bennett 86,579.20 290 86,579.20 0Ackeem A. Ritchie 290,147.94 300 140,729.00 36,790.76Samuel Dwight Brackenridge 891,492.38 382 318,218.62 0Cadine Gordon 299,629.21 390 182,975.00 28,435.57Philroy Binning 63,000.00 400 119,700.00 56,700.00Trevor Thompson 70,144.51 465 47,428.19 0Total 8,508,023.00 2,331,434.74 145,164.25



ACCOUNT NO. NAMES NET EXPOSURE

4307 Shenley Allen $ 53,390.37

5503 Aaron Chambers $ 27,613.99

4107 Carol Hall $ 12,524.61

3867 Cornelius Johnson $ 11,307.39

5367 Hugh Johnson $ 20,549.12

4709 Pearline Mitchell $ 51,938.37

5386 Andre Morgan $ 37,622.41

5056 Mark Nelson $ 55,773.41

4289 Stenneth Nelson $ 350.37

5912 Peter Simpson $ 5,469.61

6610 Cadine Gordon $288,432.95

6653 Jason Duncan $ 34,251.11

5130 Norman M. Robinson $ 4,083.43

3778 Winston Williamson $ 33,464.56

4136 Nevilleton Dryden $ 11,192.80

5124 Natalee McKenzie $100,555.16

6433 Kerry Ann Sergeant $ 9,189.87

5393 Suseth Reid $ 54,074.98

6244 Ackeem Ritchie $305,560.03

6488 Dwight Brown $283,205.41

5690 Dean Richards $586,467.80

6489 Davion Burke $275,569.08

4692 Samuel Brackenridge $665,584.09

6338 Aston Duncan $277,450.64

5681 Gavin Modest $165,389.49

6288 Amahl Barrett $ 28,069.74

6609 Damion Wiggan $117,810.74

6213 Andre Scott $ 34,103.90

4784 Daniel Pinnock $ 20,444.68

6232 Kadeem Callender $ 74,488.43

3229 Junior Bennett $ 81,148.91

TOTAL $3,727,077.45


RECOMMENDED LOAN – WRITE OFF RECOMMENDED LOAN – WRITE OFF FOR THE YEAR 2015FOR THE YEAR 2015



Proposal for the Appropriation of Surplus

Your Board of Directors recommends for your approval the appropriation of the undistributed Surplus ofSeventeen Million, Nine Hundred and Seventy Thousand, Five Hundred Sixty Eight Dollars ($17,970,568.00) tobe apportioned as state below.

Also recommended for your approval is authority for the Board of Directors to take from the dividend payable toeach affected member, the amount which would be required to bring their permanent shares up to par($3,000.00). As per amendment to Article 11 RULE 6 contained in RESOLUTION #3 approved at the 57th

ANNUAL GENERAL MEETING held in 2015.

Proposal for the Fixing of the Maximum Liability

In keeping with Rule 70, your Board of Directors proposed that the maximum liability for the loans that theBoard of Directors may borrow is to be set at 10 timesthe Society’s Capital.

.........................................David SpencerTreasurer


Detail Amount 2014 Amount 2015

Dividends on Permanent Shares $1,814,400.00 $6,176,000.00(30%) (100%)

Interest Rebate $1,000,000.00 $2,000,000.00

Additional 1% Loan Provisioning Reserve (BOJ Requirement) $3,000,000.00 $ 500,000.00

Addition to Net Institutional Capital (For Institutional Strengthening) $1,500,000.00 $1,500,000.00

Special Loan Reserves (To write down aged receivables) $1,000,000.00 $2,000,000.00

60TH Anniversary Celebrations $ 0.00 $ 750,000.00

Office Refurbishing/Relocation/IT $1,439,568.00

Members’ Outreach/Social $ 800,000.00 $1,000,000.00

Emergency Fund $ 300,000.00

Honoraria $1,000,000.00 $1,500,000.00

High School $ 50,000.00 $ 100,000.00

Lorrel Bruce Fund $ 5,000.00 $ 5,000.00

Share Transfer Fund $ 100,000.00 $ 150,000.00

Basic School $ 100,000.00 $ 100,000.00

Scholarship Fund (Tertiary – Ethan King) $ 50,000.00 $ 100,000.00

Childrens’ Home $ 80,000.00 $ 100,000.00

Donation $ 202,826.00 $ 250,000.00

TOTAL $10,702,226.00 $17,970,568.00




Members of StaffMembers of Staff

Claudia Thompson-RoacheGeneral Manager

Geoffrey EcclestonAccountant

Weeman ClarkeBusiness Development Manager

Sandra BrownAdminstrative Assistant

Melisia Ford-CampbellRisk & Compliance Officer

Martha GordonDelinquency/Securities Officer

Georgia Gordon-DixonLoans Officer

Jodie-Ann DeslandesField Marketing Officer




Alicia HeatheAccounting Clerk

Rashida BryanAccounting Clerk

Kenroy RhodenBearer/Office Assistant

Latoya MillerFiling Clerk

Francine FosterMember Service Rep.

Everton ThompsonMember Service Rep.

Demika AndersonTemporary Clerk

Joy ScarlettOfficer Attendant

Byron RichardsLoans Clerk

Caroline SingletonTeller

MISSING: Natalie Brown & Leighton Crump

Members of Staff Cont’d...

CSCCU NAME CHANGECSCCU NAME CHANGECOMPETITIONCOMPETITION


CONDITIONS

1. Competition starts August 1, 2016 and ends December 31, 20162. Entries beyond these dates will be disqualified.3. The proposed name must be clearly written and placed in the box at the Credit Union Office.4. Only one (1) entry per person is allowed.5. Must be a bond member (members and prospective members of the DCS or JFB).

RATIONAL

As part of our strategic initiatives for 2016, we are contemplating a name change ofthe Correctional Services Co-operative Credit Union Limited.

This is to fascilitate the inclusion of the Jamaica Fire Brigade.

Employees and any other groups that we will engage in partnership in the future.

We feel that this move will better reposition the Credit Union and pitch us to takegreater advantage of our bond/target audience.

AND YOU COULD WIN

APLANE TICKETTO MIAMI OR ACARIBBEANDESTINATION

✒

✒

✒

✒




Financial StatementsAS AT 31 DECEMBER 2015

Conten t sSTATEMENT

Auditors’ Report .............................................................................................................................................. 1

Statement of Financial Position .................................................................................................................. II-II.I

Statement of Comprehensive Income ............................................................................................................ III

Statement of Changes in Equity .............................................................................................................. IV-IV.1

Statement of Cash Flows ................................................................................................................................ V

Notes to the Financial Statements ........................................................................................................ VI-VI.25

Operating Expenses .............................................................................................................................. VI.26.1





STATEMENT I.1



NOTES 2015 2014$ $

ASSETS

EARNING ASSET Loans to Members 426,860,141 413,333,244 Allowance for loan losses 4,310,374 4,451,692

4 422,549,767 408,881,552

Financial Investments 5 15,331,298 12,765,322 Liquid Assets 7 66,291,392 44,532,076

504,172,457 466,178,950NON-EARNING ASSETS Property, Equipment and Furniture 8 11,382,799 12,942,219 Retirement Benefit Asset 11,708,000 11,034,000 Accounts Receivables 9 10,899,639 15,613,768 Cash and Bank Balances 10 3,612,905 3,458,027

Total Non-Earning Assets 37,603,343 43,048,014

TOTAL ASSETS 541,775,800 509,226,964

STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015


STATEMENT II



NOTES 2015 2014$ $

LIABILITIES

Interest-Bearing Liabilities Members' Voluntary Shares 204,430,906 198,623,028 Members' Savings Deposits 12 130,250,055 118,893,306 JCCUL. Loan 13 77,854,361 79,917,893

412,535,322 397,434,227

Non-Interest-Bearing Liabilities Payables 14 28,498,051 28,023,941

TOTAL LIABILITIES 441,033,373 425,458,168

CAPITAL Permanent Shares 11 6,176,000 6,048,000 Non- Institutional Capital 15 25,483,974 21,907,027 Institutional Capital 16 51,111,885 45,111,543 Undistributed Surplus 17,970,568 10,702,226TOTAL CAPITAL 100,742,427 83,768,796

TOTAL LIABILITIES AND CAPITAL 541,775,800 509,226,964

For and on behalf of the Directors

__________________________________ _________________________________DIRECTOR DIRECTOR

The notes on statements VI form an integral part of the financial statements.

STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015


STATEMENT II.1



NOTES 2015 2014$ $

INTEREST INCOME Loans and Advances to members 23(a) 90,704,716 67,630,795 Liquid assets 23(b) 2,376,000 2,258,105 Investments 23© 1,708,978 1,277,525

94,789,694 71,166,425

INTEREST EXPENSE Savings Deposit 24 17,369,546 15,903,321 Other Financial Cost 25 5,764,977 5,003,144

23,134,523 20,906,465

NET INTEREST INCOME 71,655,171 50,259,960

NON-INTEREST INCOMEMembers' Fees and Service Charges 26(a) 17,914,360 19,041,012Miscellaneous 26(b) 3,784,423 3,584,696

21,698,783 22,625,708

NET INTEREST AND OTHER INCOME 93,353,954 72,885,668

LESS: OPERATING EXPENSES 29 70,890,744 59,507,886NET SURPLUS FOR THE YEAR 22,463,210 13,377,782

HONORARIA 1,000,000 575,00021,463,210 12,802,782


STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2015


STATEMENT III



Non- Permanent Institutional Institutional AccumulatedShares Capital Capital Surplus TOTAL

Balance at 1 January 2014 5,815,000 42,415,587 17,292,121 2,211,406 67,734,114Net Surplus - - 12,802,782 12,802,782Transfer to statutory reserve 2,675,556 - (2,675,556) -Entrance Fee 20,400 - - 20,400

Appropriations - (500,000) (500,000)

Dividends (581,500) (581,500) Receivable written off (500,000) (500,000) Transfer to Retirement Benefit Asset Reserve - 4,707,000 - 4,707,000

Permanent Shares 173,000 - - - 173,000Nominee Account 60,000 60,000Reduction in Reserve (85,000) (85,000)Shares Transfer Fund (7,094) (54,906) (62,000)

Balance at 31 December 2014 6,048,000 45,111,543 21,907,027 10,702,226 83,768,796

Net Surplus - 21,463,210 21,463,210Transfer to statutory reserve 4,492,642 (4,492,642) - Entrance Fee 7,700 7,700

Appropriations - (6,787,826) (6,787,826)

Dividends - (1,814,400) (1,814,400) Transfer from 2014 Surplus 1,500,000 1,500,000 Receivable written off (1,000,000) (1,000,000)Transfer to Retirement Benefit Asset Reserve 674,000 674,000Permanent Shares 151,000 151,000 Loan Loss Reserve 3,000,000 3,000,000Other Reserve (200,000) (200,000)Shares Transfer Fund 102,947 (100,000) 2,947Nominee Account (23,000) (23,000)Balance as at 31 December 2015 6,176,000 51,111,885 25,483,974 17,970,568 100,742,427


STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 DECEMBER 2015


STATEMENT IV



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IV.1



2015 2014$ $

CASH FLOWS FROM OPERATING ACTIVITIES Surplus for the year 21,463,210 12,802,782 Adjustment to Reconcile Surplus to net cash provided by operating Activities: Depreciation 2,262,145 2,145,800 Increase in non -Institutional Reserve 3,576,947 4,614,907

27,302,302 19,563,489Changes in Operating Assets and Liabilities Loans to members (13,668,215) (62,281,344) Accounts receivable 4,714,129 (4,313,273) External credit (2,063,532) 6,434,018 Retirement benefit assets (674,000) (4,707,000) Members' deposit 11,356,749 27,440,687 Accounts payable and accruals 474,110 5,785,090

Net cash used in operating activities 139,241 (31,641,822)

Cash flows from investing activities: Addition to fixed assets (702,726) (920,877) Financial investment (2,565,976) (566,799) Liquid assets (21,759,316) 1,463,206

Net cash used in investing activities (25,028,018) (24,470)

Cash flows from financing activities: Permanent Shares 128,000 233,000 Entrance fees 7,700 20,400 Voluntary Shares 5,807,879 10,329,666 Appropriations (8,202,226) (1,636,406)

Net cash (used in)/provided by financing activities (2,258,647) 8,946,660

Increase/(Decrease) in Cash 154,878 (3,156,143)Cash at beginning of the year 3,458,027 6,614,170

Cash at end of year 3,612,905 3,458,027


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2015


STATEMENT V



1. IDENTIFICATION AND ACTIVITIES:Correctional Services Co-operative Credit Union Limited is a co-operative society registered under theCo-operative Societies Act. It is domiciled in Jamaica and its registered office and principal place ofbusiness is located at 28 Union Square, Kingston 5, Jamaica.

Membership is restricted to all employees of the Department of Correctional Services and their immediate families, also members of the Jamaica Fire Brigade. The liability of individual members is limited by shares. Individual membership liability may not excced 20% of total share capital.

The co-operative's main activities are the promotion of thrift, the provision of loans to members, for provident and productive purposes, at a reasonable rate of interest and to receive the savings of its members either as payments on shares or as deposits.

The co-operative is exempt from Income Tax under Section 59 (1) of the Co-operative Societies Act andSection 12 of the Income Tax Act.

The Co-operative is a member of and is supervised by the Jamaica Co-operative Credit Union League (JCCUL).

2 Standards and Interpretations in respect of published standards that are not in effect.Amendments to IAS16 --Prpoerty, Plant and Equipment and IAS 38 --Intangible Assets(effective January 2016)

Amends IAS 16--Property, Plant and Equipment and IAS 38-- Intangible Assets to:-Clarify that a depreciation method that is based on revenue that is generated by an activity that includes theuse of an asset is not appropriate for property, plant and equipment.

Introduce a rebutable presumption that an amortisation method that is based on the revenue generated by an activity that includes the use of an intangible asset is inappropriate, which can only be overcome in limitedcircumstances where the intangible is expressed as a measure of revenue, or when it can be demonstrated tharevenue and the consumption of the economic benefits of the intangible asset are highly correlated.

Adds guidance that expected future reductions in the selling price of an item that was produced using an assetcould indicate the expectation of technological or commercial odsolescence of the asset, which, in turn, mightreflect a reduction of the future economic benefits embodied in the asset.

IAS 19-- Employee Benefits (2011) Effective July 2016Clarifies that the high quality corporate bonds used in estimating the discount rate for post-emplyment benefitsshould be denominated in the same currency as the benefits to be paid.

IFRS 7 - Financial Instrumnets: Disclosures (Effective July 2016) Additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset, and

clarification on off-setting disclosures in condensed interim financial statements.

NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2015


STATEMENT VI



2. Standards and Interpretations in respect of published standards that are not in effect. - (Cont'd)

IFRS 9 --Financial Instruments Part 1: Classification and Measurement of financial instruments (Effective January, 2018). Financial assets required to be classified into two measurement categories: those to be measured subsequentlyat fair value and those to be measured subsequently at amortised cost. The decision to be made at initialrecognition.

The classification depends on the entity's business model for managing its financial instruments and contractualcash flow characteristics of the instrument.

An instrument is subsequently measured at amortised cost only if it is a debt instrument and both the objectiveof the entity's business model is to hold the asset to collect the contractual cash flows, and the asset'scontractual cash flows represent only payments of principal and interest (that is, it has only basic loan features).All other debt instruments are to be measured at fair value through profit or loss.

All equity instruments are to be measured subsequently at fair value through profit or loss. For all other equityinvestment an irrecoverable election can be made at initial recognition, to recognize unrealised and realisedfair value gains and losses through other comprehensive income rather than profit or loss.There is to be no recycling of fair value gains and losses to profit or loss. This election may be made on aninstrument-by-instrument basis. Dividends are to be presented in profit or loss as long as they represent areturn on investment.

IFRS 5-- Non-Current Assets Held for Sale and Discontinued Operations (Effective July 2016)Adds specific guidance in IFRS 5 for cases in which an entity reclassifies an asset from held for sale to heldfor distribution or vice versa and cases in which held-for-distribution accounting is discontinued.

IFRS 15--Revenue from Contracts with Customers (IAS 18 will be superseded by IFRS 15) Effective January 2017

IFRS 15 provides a single principle, based on a five step model to be applied to all contracts with customers. The five steps are as follows:- - Identify the contract with customer - Identify the performance obligation inn the contracts - Determine the transaction price - Recognize revenue when the entity satisfies a performance obligation - Allocate the transaction price to the performance obligation in the contracts

IAS 1--Presentation of Financial Statement(effective January 2016)The amendment address perceived impediments to preparers exercising their judgements in presentingtheir financial reports by making the following changes:

(i) Clarifies that information should not be obscured by aggregating or by providing immaterial information;(ii) materiality consideration apply to all parts of the financial statements; and (iii) even when a standard requires a specific disclosure, materiality considerations do apply.



STATEMENT VI.A



3. Basis of Preparation and Significant Accounting Policies (a) Statement of Compliance The financial statements as at and for the year ended December 31, 2015 (reporting date), are prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations, as issued by the International Accounting Standards Board and comply with the provisions of the Co-operative Societies Act.

(b) Basis of Measurement The financial statements are prepared on the historical cost basis and are presented in Jamaican dollars.

('c) Use of estimates and judgements: The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and disclosures relating to liabilities, contingent assets and contingent liabilities at the reporting date, and the income and expenses for the year then ended.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and future period, if the revision affects both current and future periods.

Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next financial year is in respect of allowance for loan loss as follows:

In determining amounts recorded for impairment of loans, management makes judgements regarding indicators of impairment, that is, whether there are indicators that suggest there may be a measureable decrease in the estimated future cash flows from loans, for example, repayment default.

Management also makes estimates of the likely estimated future cash flows from impaired loans. It is reasonably probable, based on existing knowledge, that outcomes within the next financial year that are different from these assumptions could require a significant adjustment to the carrying amount reflected in the financial statements.

(d) Property, Plant and Equipment

(i) Owned Assets Items of property, plant and equipment are measured at cost, less accumulated depreciation and impairment losses, if any. Cost includes expenditure that are directly attributable to the acquisition of the assets. The cost of self constructed assets includes the cost of materials, direct labour, and any other costs, directly attributable to bringing the asset to a working condition for its intended use. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss.

(ii) Depreciation Depreciation is recognised on the straight line basis at annual rates, estimated to writeoff the assets over their expected useful lives. The rates are as follows;-

Furniture & Fixtures 10% Buildings 2.50% Computers 25%



STATEMENT VI.1



3. Basis of Preparation and Significant Accounting Policies -(Cont'd)(e) Investments:

Investments that the Co-operative has the intent and ability to hold to maturity are classified as held-to-maturity.All other investments are classified as available- for- sale instruments.Investments classified as held-to-maturity are initially measured at cost less impairment losses.Available-for-sale investments are measured initially at cost and subsequently at fair value with changes in fair value recognised directly in investment reserve, except for impairment losses, and in the case of foreign exchange gains or losses. Where fair value cannot be reliably measured, they are stated at cost. Where the securities are disposed of, or impaired, the related accumulated unrealised gains or losses are recognised in profit or loss.

Investments are recognised/derecognised on the day they are transferred to/from the co-operative.Fair value is determined based on quoted market bid price. Where a quoted market price is not available; the fair value is estimated using discounted cash flows.

(f) Loans to members and allowance for loan loss:(i) Loans to members Loans are stated at cost, less allowance for loan loss.

(ii) Allowance for loans loss An allowance for loan loss is established, if there is objective evidence that a loan is impaired. A loan is considered impaired when management determines that it is probable that all amounts due according to the contractual terms will not be collected. Where a loan is identified as impaired, a specific provision is recorded against such loan to reduce it to its estimated recoverable amount. The recoverable amount is determined as the present value of the expected future cash flows.

The guidelines stipulated by the Jamaica Co-operative Credit Union League require the allowance for loan loss to be stipulated percentages of total delinquent loans, the percentage varying with the period of delinquency, without considering securities held against such loans.

The allowance for loan loss required by JCCUL that is in excess of the requirements of IFRS, is treated treated as an appropriation of undistributed surplus and included in a non-distributable loan loss reserve. loss reserve. In addition, a general loan loss reserve may be approved at the Annual General Meetings. This is treated as an appropriation of undistributed surplus and is also included in non-distributable loan loss reserve.

(g) Other assetsOther assets are stated at cost less impairment losses, if any.

(h) Payables and accrualsPayables and accruals are stated at cost



STATEMENT VI.2



3. Basis of Preparation and Significant Accounting Policies - (Cont'd)

(i) External creditsExternal credits are recognised initially at cost. Subsequent to initial recognition, they arestated at amortised cost on the effective interest basis.

(j) Interest, fee and dividend income.Interest income is recognised in profit or loss as it accrues.

Fee Income is recognised when the related service is provided.

Dividend Income is recognised in profit or loss on the date the dividend is declared.

(k) ImpairmentAn impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss.

(l) Foreign CurrenciesTransactions in foreign currencies are converted at the rates of exchange ruling at the dates of those transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Jamaican dollars at the rates of exchange ruling on that date.Gains or losses arising from fluctuations in exchange rates are recognised in the profit or loss.

(m) Employees Benefits i) Retirement Benefit asset The co-operative participates in a defined benefit pension plan which is funded by contributions paid by the employees and the co-operative based on the recommendations of independent actuaries. Particulars of the scheme are shown in note 28.

ii) Leave Accrual The co-operative's vacation policy allows the carry forward of a maximum of eight weeks accumulated leave for managerial staff and six weeks for non-managerial-staff. All outstanding leave is recognised in the year to which it relates in accordance with IAS 19.

(n) League fees and stabilisation DuesJCCUL has determined the rate of calculating league fees at 0.20% (2014: 0.25%) of total assets.Stabilisation dues are computed at a rate of 0.15% (2014:0.15%) of total savings.



STATEMENT VI.3



3. Basis of Preparation and Significant Accounting Policies - (Cont'd)

(o) Related PartiesA related party is a person or entity that is related to the entity that is preparing its financial statements(referred to in IAS 24 Related Party Disclosures) as the reporting entity.(a) A person or a close member of that person's family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity(ii) has significant influence over the reporting entity, or(iii) is a member of the key management personnel of the reporting entity or of a parent of the reportin entity.

(b) An entity is related to a reporting entity if any of the following conditions applies;-

(i) The entity and the reporting entity are members of the same group (which means that each paren subsidiary and fellow subsidiary is related to the others).(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).(iii) Both entities are joint ventures of the same third party.(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.(v) The entity is controlled or jointly controlled by a person identified in (a)

A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged.

(p) Comparative InformationWhere necessary, comparative figures have been reclassified to conform with changesin presentation in the current year.



STATEMENT VI.4



4. LOANS TO MEMBERS:2015 2014

$ $

(a) Balance at beginning of year 408,881,552 346,600,209

Add: Loans granted 285,629,830 283,538,874694,511,382 630,139,083

Less: Repayments and transfers 271,961,615 221,257,531

Balance after allowance for loan loss 422,549,767 408,881,552

2015 2014$ $

(b) Personal 51,617,600 61,863,954Residental 67,386,090 75,961,627Business - 533,102Education - 40,240Motor vehicle 40,406,387 50,630,455Status 172,883,700 119,899,388Cash secured loan 54,026,560 55,485,333Short term seasonal xmas loan 1,403,104 6,882,240Xmas loan 34,833,683 36,595,466Other 4,303,017 5,441,439

426,860,141 413,333,244Allowance for loan losses 4,310,374 4,451,692

422,549,767 408,881,552

CORRECTIONAL SERVICES CO-OPERATIVE CREDIT UNION LIMITEDNOTES TO THE FINANCIAL STATEMENTS

31 DECEMBER 2015


STATEMENT VI.5



(c') ALLOWANCES FOR LOAN LOSSES:

( i ) At December 2015 there were 71 members (2014-88) who had delinquent loans totalling $ 15,876,351(2014- $14,789,782). These are summarised as follows:

Total Total Months in number of Delinquent Saving Actual Rate ofArrears Loans Loans Held Exposure Provision Provision

$ $ $ $ %

Under 2 27 5,871,436 6,095,510 - -2-3 10 1,496,892 598,384 898,508 149,689 103-6 21 4,912,784 4,182,920 729,864 1,473,835 306-12 9 2,270,973 2,185,812 85,161 1,362,584 6012 and over 4 1,324,266 152,895 1,171,371 1,324,266 100

71 15,876,351 13,215,521 2,884,904 4,310,374

Total Total Months in number of Delinquent Saving Actual Rate ofArrears Loans Loans Held Exposure Provision Provision

$ $ $ $ %

Under 2 41 5,314,222 12,575,550 - -2-3 5 525,739 2,012,503 - 52,574 103-6 22 4,385,965 9,096,916 - 1,315,790 306-12 13 3,701,319 3,119,909 581,410 2,220,791 6012 and over 7 862,537 337,976 524,561 862,537 100

88 14,789,782 27,142,854 1,105,971 4,451,692

2015 2014$ $

(ii) Provision at beginning of year 4,451,692 2,312,520Increase in allowance for loan loss 2,869,391 4,258,892Recoveries of bad debt (3,010,709) (2,119,720)Balance at year end 4,310,374 4,451,692

The loan loss provision shown in the table above is based on the provisioning rules of the Co-operative Credit Union League. Where the provision is in excess of the provision required under the IFRS rules, the additional amount is transferred from accumulated surplus to loan loss reserve.

2014


2015


STATEMENT VI.6



5. FINANCIAL INVESTMENTS:

1 to 5 Over 5 Carrying Carrying Years Years Value Value

2015 2014$ $ $ $

Held - to -maturity JCCUL -

Cu Premium 4,277,724 4,277,724 4,016,536 Shares 4,943,518 4,943,518 2,956,018

Mortgage Fund 5,099,242 - 5,099,242 4,781,954NUCS Co-op.Insurance Shares 1,000,000 1,000,000 1,000,000Jamaica Fisherman Co-op Union - Shares - 10,814 10,814 10,814

9,376,966 5,954,332 15,331,298 12,765,322

6. STAFF COSTS:2015 2014

$ $

Salaries and Benefits 30,322,244 25,270,681Staff Travel 1,038,210 1,172,453Statutory Contributions 3,241,634 2,693,839Pension Expenses 1,201,971 1,085,770

35,804,059 30,222,743

7. LIQUID ASSETS:2015 2014

$ $

Cu-Cash Deposits - JCCUL 27,595,510 16,303,240Term Deposits - JCCUL 25,499,318 21,842,735Savings Account - SAGICOR 681,165 694,165F.I.P. Investment 2,523,387 1,788,792Fixed Deposit - Mayberry Investment 9,992,012 3,903,144

66,291,392 44,532,076



STATEMENT VI.7



8. PROPERTY, PLANT AND EQUIPMENT Furniture and ComputerLand Buildings Equipment Equipment Total

$ $ $ $ $At Cost -Balances at December 31, 2013 1,000,000 12,371,884 12,277,442 1,800,017 27,449,343 Additions 140,747 780,130 920,877

Balances at December 31, 2014 1,000,000 12,371,884 12,418,189 2,580,147 28,370,220 Additions 440,725 262,000 702,725

Balances at December 31, 2015 1,000,000 12,371,884 12,858,914 2,842,147 29,072,945

Depreciation Balances at December 31, 2013 2,874,229 9,052,726 1,355,246 13,282,201 Charge for the year 309,296 1,234,158 602,346 2,145,800

Balances at December 31, 2014 3,183,525 10,286,884 1,957,592 15,428,001Charge for the year 309,297 1,267,320 685,528 2,262,145

Balances at December 31, 2015 3,492,822 11,554,204 2,643,120 17,690,146

Net Book Values: At 31 December 2015 1,000,000 8,879,062 1,304,710 199,027 11,382,799

At 31 December 2014 1,000,000 9,188,359 2,131,305 622,555 12,942,219



STATEMENT VI.8



9. ACCOUNTS RECEIVABLE:2015 2014

$ $

Interest Receivable 8,073,182 9,105,093Other 2,826,457 6,508,675

10,899,639 15,613,768

10. CASH AND BANK BALANCES:2015 2014

$ $

Cash in hand 2,218,593 1,380,314Current Account 160,600 176,846Current Account 647,812 1,384,902Access Card Account 585,900 515,965

3,612,905 3,458,027

11. PERMANENT SHARES:2015 2014

$ $

Balance at beginning of year 6,048,000 5,815,000 Add: Amounts subscribed 128,000 233,000Balance at end of year 6,176,000 6,048,000

Shares in the co-operative entitle each member to one vote in the conduct of the affairs of the co-operative at general meetings. Shares may be withdrawn in whole or part by a member. However the Board of Directors reserves the right at any time to require a member to give notice not exceeding six (6) monthsprovided that no member may withdraw any shareholdings below the amount of his liability to the co-operative without the approval of the Board of Directors.



STATEMENT VI.9



12. MEMBERS' SAVINGS DEPOSITS:2015 2014

$ $Members' Ordinary Deposit

Balance at beginning of year 7,174,306 9,582,101Add: New Deposits 53,507,744 65,311,099

60,682,050 74,893,200 Less: withdrawals and transfers 52,459,554 67,718,894Balance at end of year 8,222,496 7,174,306

Credit Unionette Deposit 4,915,464 5,174,980Christmas Club Deposits 4,154,447 3,435,987Education Savings Deposit 2,660,128 2,313,560Golden Harvest Deposit 25,233,865 27,223,292Security Deposit 230,807 333,915Fixed Deposits 78,333,956 69,377,110Partner Plan 2,199,312 1,159,970Platinum Senior Plan 3,388,192 1,920,959Coco Basket 79,563 52,900Piggy Bank Saving 291,663 141,163Compulsory Savings 540,162 585,164

130,250,055 118,893,306

13. EXTERNAL CREDITS:2015 2014

$ $

J.C.C.U.L LOAN 77,854,361 79,917,893

The loans were obtained by the Credit Union from JCCUL in the form of several draw downs. An additional

loan of $17.0M was taken in the current year. The purposes are for liquidity support. The interest rates on these loans ranged between 9.5% and 11% and are secured by legal mortgage on property. All amountsoutstanding are due for repayment over the next 5 years.

14. ACCOUNTS PAYABLES:2015 2014

$ $

Standing Order 9,265,854 12,765,754 Interest payable 6,051,011 7,048,604 Audit fees 1,483,989 699,000 Withholding tax 175,640 161,495 Other 11,521,557 7,349,088

28,498,051 28,023,941



STATEMENT VI.10



15. NON-INSTITUTIONAL CAPITAL:2015 2014

$ $

Capital Reserve 7,164,918 7,164,918Special Reserve 801,025 801,025Educational Reserve 38,000 38,000GL Reconciliation Reserve 3,620 3,620Loan Loss Reserve 3,666,138 666,138Emergency Reserve 1,688,420 1,888,420Shares Transfer Fund 413,853 310,906Retirement Benefit Asset Reserve 11,708,000 11,034,000

25,483,974 21,907,027

The Loan Loss Reserve represents an amount set aside to support loans granted to members that may become delinquent. This is a non-distributable loan loss reserve which represents the excess of JCCUL loan loss provision over IAS 39

The Emergency Fund Reserve is established to assist members in meeting emergency expenditure associated with natural disasters.

The share Transfer Fund is maintained to facilitate the repurchase of shares. Shares purchased through this reserve must be sold to members of the Credit Union before any new shares may be issued.

The Retirement Benefit Asset Reserve was created to match the value of the Retirement Benefit Assets of the Credit Union. Movement in this reserve is dealt with as an appropriation to or from the undistributesurplus.

16. INSTITUTIONAL CAPITAL:2015 2014

$ $Statutory Reserve Balance 1.1.15 29,045,279 26,349,323 Add 20% Net Surplus 4,492,642 2,675,556 Appropriation of surplus 1,500,000 - Entrance Fees 7,700 20,400

35,045,621 29,045,279Accumulated Transfers to Institutional Capital 16,066,264 16,066,264

51,111,885 45,111,543

Institutional capital forms a part of the permanent capital of the co-operative and is not available for distribution.

Statutory Reserve:Under the Co-operative Societies Act at least 20% of net surplus must be transferred to a statutory reserve. Members entrance fees are also credited to the statutory reserves.



STATEMENT VI.11



17 FINANCIAL INSTRUMENTS:A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.Financial instrument carried in these statements include loans, investment, liquid asset, cash and bank balances,interest and other receivables, members' deposit, mortgage loan, interest and other payables.

Fair ValueFair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable partiesin an arms length transaction.Market price is used to determine fair value of financial instruments where an active market exists. Where there is no available market price, as in the case for most of the financial instruments held by the credit union, fair values have been estimated by using present value and making assumptions based on market conditions at the date of statement of the financial position.

Fair values have been arrived at as follows:(a) The Fair value of liquid assets, short term deposits maturing within six months, receivables, loans and payables is assumed to approximate their carrying amount.

(b) The fair value of term deposits over six months or with no specific maturity is assumed to be the value at the date of the statement of financial position.

(c) Unquoted equities are carried at cost as there is not sufficient information available to determine market value.

The fair values of financial instruments of the credit union are summarized as follows:

Carry Fair Carry FairValue Value Value Value2015 2015 2014 2014

$ $ $ $ASSETSEarning Assets

Liquid Assets 66,291,392 66,291,392 44,532,076 44,532,076

Loan to Members 422,549,767 422,549,767 408,881,552 408,881,552

Financial Investments 15,331,298 15,331,298 12,765,322 12,765,322

Non-earning AssetsCash in Hand at Bank 3,612,905 3,612,905 3,458,027 3,458,027Accounts Receivable 10,899,639 10,899,639 15,613,768 15,613,768Retirement Benefit Asset 11,708,000 11,708,000 11,034,000 11,034,000

LIABILITIESInterest-Bearing LiabilitiesMembers' Share Capital- Voluntary 204,430,906 204,430,906 198,623,028 198,623,028Members' Deposits 130,250,055 130,250,055 118,893,306 118,893,306External Liabilities 77,854,361 77,854,361 79,917,893 79,917,893Non-Bearing Interest LiabilitiesPayables and Accruals 28,498,051 28,498,051 28,023,941 28,023,941



STATEMENT VI.12



18. FINANCIAL INSTRUMENTS RISK MANAGEMENT:-

(a) Introduction and OverviewThe co-operative's activities expose it to a variety of financial risk, market risk including (currency risk, fair value interest risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The co-operative's overall risk management programme focuses on the unpredictability of financial markets and seek to minimize potential adverse effects on the co-operative's financial performance.

The Board of Directors is ultimately responsible for the establishment and oversight of the co-operative's riskmanagement framework. The Board provides written principles for overall risk management, as well as writtenpolicies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivativefinancial instruments and non-derivative financial instruments, and investments of excess liquidity.

The Supervisory Committee is responsible for monitoring compliance with the society's risk management policiesand procedures and for reviewing the adequacy of the risk management framework in relation to the risks faced by the society. The Supervisory Committee also undertakes periodic reviews of risk management control procedures the result of which are reported to the Board of Directors.

(b) Credit Risk :-The co-operative takes on exposure to credit risk, which is the risk that it's members, clients or counterparts will cause a financial loss for the co-operative by failing to discharge their contractual obligations. Credit risk is themost important risk for the co-operative's business; management therefore carefully manages it exposures to credit risk. Credit risk exposure arise principally from the loans to members, deposits with other institutions and investment securities. There is also credit risk exposure in respect of off-statement of financial position financial instruments e.g. loan commitments and guarantees. The co-operative structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to a single member or groups of related partiesand to geographical and industry segments.

The co-operative has a credit committee whose responsibility involves regular review of the ability of borrowers tomeet repayment obligations.

(i) Loans to membersThe co-operative's exposure to credit risk is influenced mainly by the characteristics of each member.The Board of Directors have established a credit policy under which each member is assessed individually for credit worthiness prior to the co-operative offering them a credit facility. One is required to be a member for at lease three (3) months before he becomes eligible for a loan except, in the following circumstances. (a) Where the three (3) months eligibility period is waived. (b) Where there are Special Loan Products offering. (c) Where externally generated funds are used to secure loan. (d) Where there are open period for new members to access loans.

Loans are not granted for down payment on Hire Purchase transactions.Loans are not granted to delinquent members, or co-makers of delinquent members.

The verification of applicant's income is undertaken e.g. the last three (3) pay slips are reviewed prior to theapproval of all loans above shares. The co-operative reserves the right to request additional information.



STATEMENT VI.13



18. FINANCIAL INSTRUMENTS RISK MANAGEMENT (Cont'd):-

The maximum repayment period of a loan shall not exceed three (3) years.The following policies and exception are noted: (a) Loans within shares, deposit and savings in the Credit Union three (3) years. (b) Loans using funds in other approved institutions as security three (3) years. (c) Real estate purchased (and associated costs) for members primary residence-

Where a member is offering a first(1st) mortgage on property or a pari passuarrangement with the National Housing Trust (NHT) or a Building Society, the Credit Union may extend the loan for a period not exceeding ten (10) years.

(d) Other loans for which the co-operative will hold first mortgage on property - 10 years. (e) Loans for purchase of new motor vehicles - 7 years (f ) Loans for purchase of used motor vehicles-maximum 7 years.

Collateral:-The co-operative holds collateral against loans to members in the form of a mortgage over property,lien over motor vehicles, other regulated securities over assets, hypothecation of shares held in the Credit Union. Estimates of fair value are based on value of collateral assessed at the time ofborrowing and are generally not updated except when a loan is individually assessed as impaired.

(a) Co-makers are required to have unencumbered shares which will be hypothecated.

(b) All items offered as security must be fully insured and the co-operative must be satisfied as to the arrangements in place for future payments of the insurance premium.

(c) Motor vehicles may be used as security, provided that the vehicle will continue to get comprehensive insurance coverage until the loan is fully repaid. A percentage of the value of the vehicle is used as collateral based on the age of the vehicle.

Approval LimitsApproval limits are set based on the amount of the loan and the management levels ofapproval officers.

Impaired LoansImpaired loans are loans for which the co-operative determines that it is probable that it willbe unable to collect all principal and interest according to the contractual terms of the loan.

Past due but not Impaired LoansThere are loans where the contractual interest or principal payments are past due but theco-operative believes that impairment is not appropriate on the basis of the level of security available or the stage of collection of amounts owed to the co-operative.

Allowances for ImpairmentThe co-operative established an allowance for impairment losses that represents its estimate of incurred losses in its loan portfolio.The main components of this allowance are a specific loss component that relates to individuallysignificant exposures, and a collective loan loss allowance established on a group basis in respect of losses that have not been identified on loans subject to individual assessment for impairment.



STATEMENT VI.14




Aging analysis of loans to members that are past dueLoans to members that are less than two months past due are not considered impaired. As of December 31, 2015, loans to members of $5,871,436 were less than two months past due but not impaired. Loans totalling $10,004,915 were in arrears for two months and over. There are no loans which management believes are impaired. In respect of loans that are past due but not impaired the fair value of collateral held by the co-operative were $13,215,521

Write-off Policy:-The co-operative writes off a loan (and any related allowances for impairment losses) when theco-operative determines that the loans are not collectible. This determination is usually made after considering information such as changes in borrower's financial position, or that proceeds from collateral will not be sufficient to pay back the entire exposure.

Deposits and Investments Securities:-The co-operative limits its exposure to credit risk by investing mainly in liquid securities, withcounterparts that have high credit quality and Government of Jamaica securities.Accordingly, management does not expect any counter party to fail to meet its obligations.

Exposure to Credit Risk:-The carrying amount of financial assets represents the maximum exposure to credit risk(before collateral held). At the date of the statement of financial position these were:

Maximum Exposure2015 2014

$ $

Loans to members (net) 422,549,767 408,881,552Liquid assets-earning 66,291,392 44,532,076Financial investments 15,331,298 12,765,322Liquid assets-non-earning 3,612,905 3,458,027Receivables and prepayments 10,899,639 15,613,768Retirement Benefit Asset 11,708,000 11,034,000

530,393,001 496,284,745

There has been no change to the co-operative's exposure to credit risk or the manner in which itmanages and measures the risk.



STATEMENT VI.15




( c ) Liquidity Risk:-Liquidity risk is the risk that the co-operative is unable to meet its payment obligations associated with its financial liabilities when they fall due. Prudent liquidity risk management implies maintainingsufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market position to meet cash requirements.The co-operative manages this risk by keeping a substantial portion of its financial assets in liquid form in accordance with regulatory guidelines.

The co-operative is subject to a liquidity limit by the Jamaica Credit Union League(JCCUL) and compliance is regularly monitored. The key measure used by the co-operative for managing liquidity risk is the ratio of liquid assets to total savings deposits. For this purpose, liquid assets include cash and bank balances, deposit held with JCCUL and highly liquid investments which are readily converted into cash within three months.

The liquid asset ratio at the end of the year was 0.65 ( 2014: 0.51)There has been no change to the Credit Union's exposure to liquidity risk or the manner which it manages and measure the risk.

Liquidity Risk Management PolicyThe co-operative's liquid risk policy, as carried out within the co-operative and monitored by the board of Directors, include:(i) Monitoring future cash flows and liquidity on a daily basis. This incorporates an assessment of expected cash flows and the availability of high grade collateral which could be used to secure funding if required. (ii) Maintaining committed lines of credit.(iii) Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flow.(iv) Managing the concentration and profile of debt maturities.(v) Optimizing cash returns on investments.

The matching and controlled mismatching of the maturities and interest rate of assets and liabilities is fundamental to the management of the co-operative. It is unlikely for entries to be completely matched at any time since business transacted is often of uncertain term and of different types. An unmatched position potentially enhances profitability, but can also increase the risk of loss.

The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearing liabilities as they mature, are important factors in assessing the liquidity of the co-operative and its exposure to changes in interest rates and exchange rates.



STATEMENT VI.16



Financial Assets and Liabilities Cash Flows

The tables below summarises the maturity profile of the co-operative's financial assets and liabilitiesas at 31 December 2015

1 to 3 3 to 12 1 to 5 Over 5 months months years years Total

$' 000 $' 000 $' 000 $' 000 $ASSETSEarning Assets Liquid assets 66,291,392 - - - 66,291,392 Financial investments - - 10,578,596 4,752,702 15,331,298 Loans to Members 12,676,493 54,931,470 253,529,860 101,411,944 422,549,767Non-earning assets Cash in hand and at bank 3,612,905 - - - 3,612,905 Accounts receivable 2,179,928 6,539,783 2,179,928 10,899,639 Pension Asset - - - 11,708,000 11,708,000 Property and Equipment - - - 11,382,799 11,382,799

Total Assets 84,760,718 61,471,253 266,288,384 129,255,445 541,775,800

LIABILITIESInterest bearing liabilities Voluntary Shares 10,221,544 61,329,273 132,880,089 - 204,430,906 Members' Deposits 22,142,509 74,242,531 9,117,505 24,747,510 130,250,055 External Liabilities 3,674,193 11,022,579 63,157,589 - 77,854,361Non-interest bearing liabilities Accounts payable 4,274,708 9,974,318 14,249,025 - 28,498,051

EQUITY Members' Permanent Shares 6,176,000 6,176,000 Non-Institutionl Capital 25,483,974 25,483,974 Institutional Capital 51,111,885 51,111,885 Undistributed Surplus 17,970,568 17,970,568

Total Liabilities 40,312,954 174,539,269 219,404,208 107,519,369 541,775,800

Total Liquidity Gap 44,447,764 (113,068,016) 46,884,176 21,736,076 Cumulative Gap 44,447,764 (68,620,252) (21,736,076)

Voluntary shares can be withdrawn at the option of the members and will therefore affect the liquidity position of the co-operative. These have no contractual maturity. The amounts included in the analysis are based on management's estimate of expected cash flow based on historical experiences. These may vary significantly from actual cash flow which are generally expected to maintain a stable or increasing balances.



STATEMENT VI.17



18. FINANCIAL INSTRUMENTS RISK MANAGEMENT (CONT'D)

( d ) Market Risk:-The co-operative takes on exposure to market risk, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.Market risk mainly arise from changes in foreign currency exchange rates, interest rates and equity prices and will affect the co-operative's income or value of its portfolio of financial instrument.Market risk is monitored by the General Manager.Market risk exposure is measured using sensitivity analysis.There has been no change to the co-operative's exposure to market risks or the manner inwhich it manages and measures the risk.

(i) Currency Risk:-Currency risk is the risk that the market value of, or the cash flows from, financialinstruments will vary because of exchange rate fluctuations. The co-operative is exposed to foreign currency risk due to fluctuations in exchange rates on transactions and balances that are denominated in currencies other than theJamaican dollar. The Credit Union is primarily exposed to the United States Dollar (US$).There was no significant exposure to foreign currency risk.The only foreign asset held by the co-operative is as follows:

2015 2014US$ US$

Bank Savings Account 5,660 6,711



STATEMENT VI.18



18. FINANCIAL INSTRUMENTS RISK MANAGEMENT( Cont'd):-

(ii) Interest Rate Risk:-

Interest rate risk is the risk that the value or the cash flows of a financial instrument will fluctuatebecause of a change in market interest rates. Floating rate instruments expose the co-operative to cash flow interest rate risk, where as fixed interest rate instruments expose the co-operative to fair value interest rate risk.Liquid assets are held for the short term and accordingly would substantially reflect prevailinginterest rates in the financial market. Interest is paid on member's voluntary capital. The rate is fixed by the Board of Directors. Saving deposits and external credit are accepted from, and loangiven to members at a fixed rate of interest which is fairly stable. Accordingly, there is no significantexposure to interest rate risk.

At the reporting date the interest rate profile of the co-operative's interest-bearing financial instruments were:

2015 2014$ $

Fixed rate financial assets:-Loans to members 422,549,767 408,881,552Liquid assets 66,291,392 44,532,076Financial investments 15,331,298 12,765,322

504,172,457 466,178,950

Fixed rate financial liabilities:-Saving deposits 130,250,055 118,893,306

The co-operative does not account for any fixed financial asset and liability at fair value through profit or loss or available for sale and therefore a change in interest rates at the statement of financial position date would not affect profit or loss or equity. The Credit Union has no variable rate financial instrument at the statement of financial position date.

(iii) Equity Price Risk:-Equity price risk arises from available-for-sale equity securities held by the co-operative as partof its investments portfolio. Management monitors the mix of debt and equity securities in its investment portfolio based on market expectations. The primary goal of the co-operative'sinvestment strategy is to maximise return on investment. The co-operative's equity securities are not material and therefore it is not exposed to any significant equity price risk.



STATEMENT VI.19




(e) Capital Management:-

The co-operative's objectives when managing capital are to safeguard the co-operative's ability to continue as a going concern in order to provide returns for members and benefits for other stakeholdersand to maintain an optimal capital structure to reduce the cost of capital, as well as meet externally imposed capital requirements. The Board of Directors monitors the return on capital, which the co-operative defines as net operating income divided by total members' equity. The Board of directors also monitors the level of dividend to members.

Consistent with others in the industry, the co-operative monitors capital on the basis of the gearing ratio.This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings(including current and non-current borrowings, less cash and cash equivalents).Total capital is calculated as equity as shown in the statement of financial position plus net debt.

The gearing ratios at 31 December 2015 and 2014 were as follows:

2015 2014$ $

Total borrowings 208,104,416 198,811,200Less: cash and cash equivalent 3,612,905 3,458,027Net debt 204,491,511 195,353,173Total capital 513,277,749 480,536,885

Gearing ratio 40% 41%

There was no change to the co-operative's approach to capital management during the year.The co-operative complied with all externally imposed capital requirement to which they were subjected.



STATEMENT VI.20



19. RELATED PARTY TRANSACTIONS AND BALANCES:(a) Identity of related parties: The co-operative has a related party relationship with its Directors and other key management personnel.

At 31 December 2015, connecting parties of the co-operative and 19 staff members had savings andloans as shown below.

The loans are being repaid in accordance with the terms of the loans.During the year no loans were made to Connecting Parties or staff which necessitated any waiver of the loan policy.

2015 2014$ $

Directors and Committee Members: Shares and Savings 22,915,607 19,472,265 Loans including interest 22,957,274 22,942,415

Staff Members: Shares and Savings 4,366,344 4,230,533 Loans including interest 22,598,484 22,598,484

20. COMPARISON OF LEDGER BALANCES: 2015PERMANENT VOLUNTARYSHARES SHARES DEPOSITS LOANS

$ $ $ $

Balance as per General Ledger 6,176,000 204,430,906 130,250,055 426,860,141

Balance as per Members' Ledger 6,176,000 204,430,906 130,250,055 426,860,141

- - - -

2014PERMANENT VOLUNTARY

SHARES SHARES DEPOSITS LOANS$ $ $

Balance as per General Ledger - 2014 6,048,000 198,623,028 118,893,306 413,333,244

Balance as per Members' Ledger - 2014 6,048,000 198,623,028 118,893,306 413,333,244

- - - -



STATEMENT VI.21



21. INSURANCES

(a) LIFE SAVINGS AND LOAN PROTECTION INSURANCE:

During the year, the Credit Union had life savings and loan protection with Cuna Mutual Insurance Company Limited. The total premium for the year was $2,602,986 (2014: $2,746,927)

(b) FIDELITY INSURANCE COVERAGE:

During the year, the Credit Union had life savings and loan protection with Cuna Mutual Insurance Company Limited. The total premium for the year was $162,933 (2014: $132,812).

(c) PREMISES AND ASSETS:

During the year, the Credit Union had coverage on its premises, equipment and office furniture. The premium paid was $430,267 (2014: $378,175).

22. TRANSFERS AND APPROPRIATION:2015 2014

$ $

Provision for loan Losses 3,000,000 - Special loan reserve 1,000,000 Statutory appropriation 4,492,642 2,675,556

DDividends on shares and deposits 1,814,400 581,500 Interest Rebate 1,000,000 200,000 Scholarship Funds-High School 50,000 50,000

Scholarship Funds-Tertiary 50,000 50,000Lorrel Bruce Scholarship 5,000 5,000Scholarship Fund-Basic School 100,000 40,000Best Care Children's Home 80,000 60,000Donation 202,826 95,000Instutional capital 1,500,000 - Members outreach 800,000 - Receivable -write off - 500,000Retirement Benefit Asset Reserve 674,000 4,707,000Share Transfer Reserve 100,000 54,906

14,868,868 9,018,962



STATEMENT VI.22



23. INTEREST INCOME:2015 2014

$ $

(a) Loans to Members 90,704,716 67,630,795

(b) Liquid Assets Savings Account 339 3,240 Term Deposit 1,646,960 1,499,387 Cu-cash Deposits 728,701 755,478

2,376,000 2,258,105

(c) Financial Investments Mortgage Fund-JCCUL 197,288 184,906 Cu-Premium-JCCUL 261,188 261,892 Mayberry Investment 1,111,105 655,286 Interest on F.I.P Investment 91,974 128,018 JCCUL shares 47,423 47,423

1,708,978 1,277,525

24. INTEREST EXPENSES:2015 2014

$ $

Interest paid on Coco basket 264C/Unionette Deposit 106,171 110,047 Deposit/Voluntary Share Capital 3,053,285 2,842,889Fixed Deposit 3,511,327 2,579,265Golden Harvest 2,859,976 2,775,839 League Loan 7,606,268 7,595,281Partner plan 232,255 0

17,369,546 15,903,321

25. OTHER FINANCIAL COSTS:2015 2014

$ $

Bad Debt Provision - less recovery 3,711,514 2,139,173Miscellaneous - 590,428Business Tax 60,000 60,000Bank Charges 1,993,463 2,213,543

5,764,977 5,003,144



STATEMENT VI.23



26 NON-INTEREST INCOME:2015 2014

$ $

(a) Fees and Service Charges 17,914,360 19,041,012

(b) Miscellaneous Copy Machine 340 35 Foreign Exchange Gain 135,492 - Dividend-Cuna Mutual 500.00 - Dividend - JCCUL 140,529 140,529 FIP Incentive 2,749,781 2,148,592 Rule and Pass Books 13,900 36,400 Other 743,881 1,259,140

3,784,423 3,584,696

27. NET SURPLUS:2015 2014

$ $

Net surplus is shown after charging:- Auditors remuneration 660,000 600,000 Depreciation 2,262,145 2,145,800 Repairs and maintenance 1,645,984 1,389,006 Staff cost 35,804,059 30,222,743

31 DECEMBER 2015NOTES TO THE FINANCIAL STATEMENTS


STATEMENT VI.24



28. RETIREMENT PENSION ASSET:

The co-operative participates in a multi-employer pension plan operated by The JamaicaCo-operative Credit Union League Limited. It is a contributory defined benefit pension plan coveringall full time permanent employees. The Scheme is valued annually by independent actuaries.

Actuarial assumptions used were as follows:2015 2014

Discount rate 9.5% 9.5% Expected return on plan assets 8.5% 9.5%

The amounts allocated as this credit union's share are as follows:2015 2014

$ $

Fair Value of Plan Assets 41,064,000 31,597,000Present Value of Funded obligation (29,356,000) (20,563,000)

11,708,000 11,034,000

Amounts recognised in the Income Statement are as follows: Current service cost 577,000 440,000 Interest cost 2,029,000 1,363,000 Expected return on Plan Assets (3,138,000) (2,016,000) Administrative expenses 197,000 128,000 Net pension (income)/expense included in staff costs (335,000) (85,000)

Movement in Pension Assets in the Statement of Financial Position Asset at beginning of year 11,034,000 6,327,000 Pension Income/(Expense) 335,000 85,000 Contributions paid 1,277,000 1,086,000 Total re-measurement included in other comprehensive income (938,000) 3,536,000

Asset at end of year 11,708,000 11,034,000



STATEMENT VI.25



OPERATING EXPENSES: 2015 2014

$ $ STAFF COSTS Personnel expenses 35,804,059 30,222,743

ADMINISTRATIVE EXPENSES Office Expenses 1,252,798 1,186,922 Depreciation and Amortization 1,952,848 1,836,504 Audit 1,729,353 909,875 Donation - 65,578 Printing, Stationery & Supplies 1,129,446 911,764 Travelling 1,584,286 1,689,921 Professional and Consulting Fees 2,053,602 306,260 AGM Expenses 1,523,968 1,056,445 Meeting and seminars 2,092,080 1,676,244 Retreat Expenses 1,300,000 711,607 INS Premium-Golden Harvest 531,300 463,375 INS Premium-Furniture 72,311 33,374 INS Premium-Group Accident 42,258 41,654 INS Premium-Group Life 294,401 262,611 Board and Committee Training 375,870 46,600 Cumis Computer Feature 456,000 424,277 ICU expense 145,000 90,000 Postage 10,980 15,540 Cleaning and Sanitation 202,669 150,409 Telephone 1,456,832 1,367,216 Motor vehicle upkeep 2,047,545 2,140,812 CCCU Month Expenses 4,250 - Insurance 1,815,974 1,600,898 Repairs and Maintenance 1,433,990 1,387,506

23,507,761 18,375,392

MARKETING & PROMOTION Publicity 2,214,614 959,647 Public Relation 253,220 0

2,467,834 959,647

MEMBERS SECURITY Life Savings and Loan Protection 2,602,986 2,746,927 Fidelity Bonding Insurance 162,933 132,812

2,765,919 2,879,739

OPERATING EXPENSES31 DECEMBER 2015


STATEMENT VI.26



29. OPERATING EXPENSES (Cont'd):- 2015 2014$ $

REPRESENTATION & AFFILIATION Stabilization Dues 552,077 991,328 League Fees 927,713 859,422 Seminars and Meetings 812,440 803,836

2,292,230 2,654,586

ESTABLISHMENT Rates and Taxes 162,709 283,151 Property Insurance 430,267 378,175 Security 1,115,029 1,076,226 Electricity 1,823,645 2,367,431 Repairs and Maintenance 211,994 1,500 Depreciation 309,297 309,296

4,052,941 4,415,779

TOTAL OPERATING EXPENSES 70,890,744 59,507,886

OPERATING EXPENSES31 DECEMBER 2015


STATEMENT VI.26.1




CREDIT COMMITTEE REPORTCREDIT COMMITTEE REPORTYEAR ENDED DECEMBER 2015

1.0 INTRODUCTION

The year in review proved to be a challenging one for the Jamaica economy and assuch this was reflected in the financial sector especially among small to medium sizedoperations such as ours. The Credit Union therefore faced challenges in 2015 withcompetition from other lending agencies, some of which are unregulated, as well asthe very minute increase in public sector salaries. Members found it difficult to accessloans due to their inability to meet the standard requirements, hence an increase inunsecured loans. Nonetheless, the Credit Union strove to satisfy our member’s needs.

The Credit Committee continued to provide quality services to maximize members’satisfaction and fulfilled its mandate to ensure that the Credit Union makes the best use

of members’ deposits. The Credit Committee ensured that member’s requests werehandled promptly and decisions were made in accordance with the Credit Union’s loan policies. Therefore, theCredit Committee meets weekly to process loan applications, with a view to as far as possible enable membersto meet their financial obligations.

2.0 LOANS PROCESSED IN 2015

During the period under review a total of 7,092 loan applications valuing $281,166,197.47 was processed. Belowis a chart listing all the loans approved during the year 2015.

Total Loans disbursed by purpose during 2015

Loan Purpose Description Count Total Value %Refinancing 172 16,099,438.17 5.73Matrimonial 3 197,000.00 0.07Investment 20 2,282,000.00 0.81Funeral Expenses 27 2,405,400.00 0.86Household & Domestic purposes 3526 128,771,722.68 45.8Legal Fee 25 1,519,000.00 0.54Education 325 20,758,197.27 7.38Medical Expenses 441 17,811,210.00 6.33Vacation 7 1,297,000.00 0.46Utilities 1934 43,196,846.29 15.34Motor Vehicle Purchases 34 6,050,260.66 2.15Household Furniture 38 3,792,517.61 1.35Home Improvement 119 12,554,357.45 4.47Motor Vehicle Repairs 203 14,172,487.27 5.04Purchase Land/Property 3 470,000.00 0.17Motor Vehicle Insurance 82 4,808,682.11 1.71General Insurance 3 140,000.00 0.05Split Loan (Consolidation etc.) 37 409,304.69 0.15Travelling Expenses 54 2,340,342.76 0.83Repayment 37 20,904,30.51 0.74



2.1 Loan Portfolio Growth Trend 2008-2015

The loan portfolio stood at $426M representing a slight increase of 3.1% over the previous year.

2.2 Figure: Loan Granted Age Analysis




3.0 ACKNOWLEDGEMENT:

The Credit Committee acknowledges with thanks the support of the Board of Directors and the Credit Union staffthat have made our service possible. We also thank our valuable members for entrusting us with the awesomeresponsibility of making prudent decisions with respect to loans disbursement.

Our prayer is for the continued growth and success of the institution.

4.0 CREDIT COMMITTEE MEMBERS

NAME POSITIONMr. Winston Walters ChairmanMr. Gary Byfield MemberMs. Inderia Hutchinson MemberMs. Marie McDonald SecretaryMr. Donnovan O’Conner Member

............................................... ...............................................Winston Walters Marie McDonaldChairman Secretary


From left: Donovan Occonor, Inderia Hutchinson, Winston Walters (Chairman), Marie McDonald (Secretary) and Gary Byfield.

Credit Committee MembersCredit Committee Members



1.0 INTRODUCTION

My fellow cooperators, theyear 2015 was another goodyear for the CorrectionalServices Credit Union Ltd.,notwithstanding that it camewith its, fair share ofchallenges. For theSupervisory Committee it

was a year that demandedmore of our time, and resources. We had to hit theground running with all hands on deck as we had ourhands full, fulfilling our mandate of ensuring thatinternal controls were in place to protect the assets ofthe members and fulfilling the financial propriety ofthe organization. To this end, we built up acomprehensive picture of the way the organizationoperated, its business procedures and mostimportantly its customer service.

The financial atmosphere was tremulous, the marketplace hostile but none the less, we embarked on ajourney that was gut wrenching. There was a lothappening within the movement and hence like ourbrother and sister credit unions we had to repositionfor change. In a nutshell it meant vast improvementin our customer service efficiency and mostimportantly satisfaction for our members. It was ayear of decision making.

In an era of increasing personal indebtedness, thecredit union members were obtaining loanselsewhere. The financial institutions and moneylenders created easier ways to qualify and obtainloans, even though they charged high interest rates incomparison to credit unions. It is in this area that ourcredit union should focus their resources, ensuringthat good value credit is available to all in their area.Also the strategy of using a higher ceiling onunsecured loans to increase the loan book is, in ourview, too speculative and the credit union shouldengage in the area of increased savings to increase oursavings base. It is incumbent upon the Board ofDirectors and management to steer the credit union

in a direction that will seek to service the totalfinancial needs of our members and potentialmembers.

2.0 MEETINGS AND FINDINGS

The Committee met regularly during the past year.The Supervisory Committee examined the expensesclaimed by Directors and the committees collectively.We checked Directors’ and Committees’ expenseclaims and are happy to report that all expensesclaimed were reasonable and legitimate.

We continue to be disappointed in the responsivenessof the Board of Directors. The Supervisory Committeeis of the opinion that we did not receive timelyfeedback to issues sent to the Board of Directors. Thisneeds to be addressed forthwith.

To this end, amidst all our challenges, we continuedto strive for excellence, steadfast on our quest to growour Credit Union unrelentingly until we become thepreferred choice of financial institution for membersof the Correctional Services, the Jamaica Fire Brigadeand their families to do business.

3.0 INTERNAL AUDIT

3.1 Risk Management

The supervisory committee undertook a riskmanagement analysis evaluation which focused onareas of management, teller operations, and policyand procedures manual.

We can report that there was a Risk Manager in placeand that a risk management programme was in place.3.2 Teller Operations

An examination was done on teller operations wefound that sufficient internal controls were in place.3.3 Policy and Procedures

Documented policies governing the operation werelooked at and in some cases needs to be reviewed.


SUPERVISORY COMMITTEE REPORTSUPERVISORY COMMITTEE REPORTYEAR ENDED DECEMBER 2015



4.0 COMMENDATIONS AND CONCLUSION

We must pause to say thanks to all those whose liveswere impacted in a positive way thanks foropportunity, to those who did not leave 100%satisfied we look forward to serving you better nexttime and to those, whom we did not have anopportunity to serve we are inviting you to come onboard, we feel the warmth and enjoy of the service.We give you our assurance that as we continue on thepath of repositioning and change we will be betterable to meet your needs.

The supervisory committee congratulates the Board ofDirectors, management, staff and volunteers forhaving stuck to the task of formulating strategies toensure we survived in a very hostile economic marketplace hence we are able to keep our membersgrounded. Rest assured we will not relent in thepooling of our efforts to prevent our members frombeing lured away by the competition.

We would wish to record our warmest and sincerethanks to the President, Board members, and staff fortheir courtesy and co-operation throughout the year.We recognize the hard work undertaken by all tomaintain and improve the support and servicesprovided by the Credit Unions. It is with this in mindthat we invite all our members and prospectivemembers to stand with us as we step confidently intothe next phase of the repositioning process.

We thank you.

5.0 COMPOSITION OF COMMITTEE

SUPERVISORY COMMITTEE POSITIONSheryl Reynolds ChairpersonLisa Collie-Evering SecretaryCourtney Ruddock MemberNargaree Allison MemberFabian McKoy Member


........................................Sheryl ReynoldsChairman

........................................Lisa Collie-EveringSecretary

Fabian McKoy Nargaree Allison

Supervisory Committee MembersSupervisory Committee Members

Sheryl ReynoldsChairman

Lisa Collie-EveringSecretary

Courtney Ruddock




NOMINATION COMMITTEE REPORTNOMINATION COMMITTEE REPORTYEAR ENDED DECEMBER 2015

In accordance with article X1V, Rule 65 (1) of the Correctional Services Co-operativeCredit Union Limited, Director George Thorpe was appointed to chair the NominationCommittee by the Board of Directors.

The following members were also co-opted to the committee:

• Mr. Winston Anderson • Mrs. Thelma Grayson-Linton

Rule 65 (1) of the Correctional Services Co-operative Credit Union Limited requires theNomination Committee to nominate members to fill the vacancies’ of those membersof the Board of Directors, Supervisory and Credit Committees who are due for retirementat this Annual General Meeting. The following recommendations are being made as itrelates to the elections of the Committee members who will serve as indicated below:

RETIRING RECOMMENDATION TERM OF OFFICEBoard Of DirectorsDavid Knight Gary Byfield 2 yearsDavid Spencer Byron Richards 2 yearLeslie Campbell Leslie Campbell 2 yearsReuben Kelly Reuben Kelly 2 years

Credit CommitteeDonovan O'Connor Donovan O'Connor 2 yearsMarie McDonald Marie McDonald 2 yearsGary Byfield * Lisa Collie-Evering 2 year

Supervisory CommitteeLisa Collie-Evering (term ended) Kevin Haughton 1 yearSheryl Reynolds Sheryl Reynolds 1 yearCourtney Ruddock Courtney Ruddock 1 yearFabian McKoy Fabian McKoy 1 yearNargeree Allison Nargeree Allison 1 year

All nominees have indicated their willingness to serve in the various positions for which they have beennominated for. It should be noted that Mr. David Spencer is eligible for one more term on the board. However,he has decided not to seek re-election to the Board, hence Mr. Gary Byfield was recommended to fill the vacancy.The Nomination Committee wishes to place on record on behalf of the Board and Members, our profoundgratitude to all volunteers who have served in the past, for their invaluable contributions to the CorrectionalServices Co-operative Credit Union Limited.

It is also our wish that the persons nominated by the Nomination Committee be accepted by the Annual GeneralMeeting as is. Once again we thank you for allowing us to serve on the Nominations Committee

...........................................................George ThorpeChairman

Mr. George ThorpeChairman




PROFILES OF NOMINEESMR. GGARY BYFIELD

Mr. Gary Byfield has served the Correctional Services Co-op Credit UnionLimited for many years. During his tenure, first as a Liaison Officer, after whichhe was elected to the Credit Committee, where he is presently serving forthe past nine (9) years. A committed steward, who has served on various subcommittees within the credit union and has been awarded with many accoladesover the years for his dedicated service.

Mr. Byfield is a Correctional Officer by profession with service amounting tothirty six (36) years and has excelled to the rank of Assistant Superintendent.He was bestowed with National Awards for Long Service and good conduct

by both the Department of Correctional Services and the Jamaica Civil Service Association. He iscurrently the Secretary of the Senior Uniform Officers Association.

Mr. Byfield is a past student of the Calabar High School and holds a Bachelor of Arts Degree, majoringin Philosophy with a Minor in History; and also holds a Certificate in Principles and Practice of SocialWork from the University of the West Indies, Mona. He has indicated his willingness to serve.

MR. BBYRON RICHARDSMr. Byron Richards is a past student of Glenmuir High School, a devoted fa-ther and a member of the Christian faith. His first job was with Workers Bankin 1986 as a teller. He later joined the Department of Correctional Servicesin 1990, after successfully completing the training course at the Carl RattrayStaff College. He is now a Staff Officer attached to the St. Catherine AdultCorrectional Centre.

Since October 2007, he has been assigned to the Correctional ServicesCo-operative Credit Union Limited where he also performs as a Loans Clerk/Officer and Delinquency Clerk. He also serves as a member of the Marketing

Team. His hobbies include playing computer games and domino.

In 2009 Mr. Richards was assigned to operate the Credit Union's outpost situated at the DP SportClub. He has since been given the task of carrying out the operations at that location with minimal su-pervision. He continues to give of his best to the members whether he is at the Credit Union's officeor at the outpost.

He has been exposed to formal training at the Jamaica Co-operative Credit Union League, in the areasof Loans Security and Credit Risk. He has indicated his willingness to serve.




MRS. LLISA COLLIE-EVERINGMrs. Lisa Collie-Evering brings a unique blend of experience and training tothe Credit Union. Volunteerism forms her second nature. She first served asLiaison Officer, then was elected to the Credit Committee and later electedto the Supervisory Committee, where she served for 5 years. Currently sheis the Assistant Chairman of the Jamaica Federation of Corrections andTreasurer for the Department of Correctional Services’ Wellness Committee.

She holds an Associate of Science Degree in Business Administration from theUniversity College of the Caribbean and a Certificate in SupervisoryManagement from the Management Institute for National Development (MIND).

Mrs. Collie-Evering has been a volunteer at the credit union for many years and has expressed herwillingness to continue serving.

SUPERINTENDENT KEVIN HAUGHTONSuperintendent Kevin Haughton holds the appointment Divisional Head for theKingston and St. Andrew Division of the Jamaica Fire Brigade, and has principalresponsibilities for the Administrative and Operational command of the largestof the thirteen (13) Divisions in the Brigade.

He was born on the 13th November 1977 in the parish of Hanover, Jamaica; thefourth of eight children. He attended the Ruseas High School before enlistingin the Jamaica Fire Brigade on September 1, 1996.

Superintendent Haughton has served in many command positions within theBrigade. These include:

• Officer in charge of Operations, KSA• Divisional Head St. Ann, Trelawny and St. James• Staff Officer to the Commissioner• Second in charge Trelawny Division

In 2011 he attended and successfully completed the International Divisional Command Course at the FireService College in England. He holds Diplomas in Human Resource Management and Management Studies,a Post Graduate Diploma in Public Sector Management and a Bachelor’s Degree in Management Studiesat the University of the West Indies in 2015.

In August 2015, Superintendent Haughton was the recipient of the medal for Meritorious Service, for Out-standing Service to the Brigade by the Government of Jamaica.

He is married and the father of four (4) children.



1.0 INTRODUCTION

Correctional Services Credit Union has displayed boldness, passion and creativity inmeeting the needs of our members over 58 years despite the competitive businessenvironment and the challenges of the futuristic planning. The society has sought to bethe premier financial partner for members developing various products and services toenhance member’s welfare and well-being. Indeed the challenges, or as some personsmay regard them as crises, have presented various opportunities for consideration.

2.0 BACKGROUND-VIABILITY/MERGER OPTIONS COMMITTE

In an effort to ensure that our members continue to get value and ensure a sustainable organization within thiscontext, the Society has empowered members to explore strategies for viability, hence a Merger Committee whichwas established in 2013. Several reports and deliberations have been presented to the two Annual GeneralMeetings. Arising from the last meeting and in keeping with the mandate of members the Board of Directorsfocused the 2015/2016 Strategic Management Retreat with the theme: “ The Way Forward- Innovating For Change-Developing the Business Model”.

Coming out the Strategic Management Retreat the management of the Credit Union supported by the work aMerger/Viability Options Committee has spent at least last four (4) months focusing in a dispassionate way on theway forward. By way of this report members of the Committee presents itspreliminary findings which sets thestage for a series of sensitization sessions to be followed by a Special General Meeting where members will makea final decision on the way forward.

Below is a brief summary of the four options which are being examined by the Merger/Viability OptionsCommittee.


SPECIAL COMMITTEE REPORT TO ANNUAL GENERAL MEETINGTHE MERGER/VIABILITY OPTIONS FOR CSCCU 2015/2016

Business Models/Options

Stand Alone- Prepare forlicensing under theimpending Bank of JamaicaRegulations for CreditUnions

Friendly Society.Transform to a FriendlySociety under thesupervision of the Registrarof Co-operatives andFriendly Societies

Advantage(s)

Maintain identity, culture,close knitted connectionsof workplace based co-operative

Maintain identity, culture,close knitted connections.

Not subjected to thepending BOJ regulations

Disadvantage(s)

High Licensing feesHigh annual operatingexpenses. Prohibitive costfor preparation registrationestimated at $33,792,600.00 with an annualrecurrent of $13,535,150.00

Limited financial serviceswould be provided.

Not a part of a network ofcooperatives as CreditUnions which areaffiliated to JCCUL

Key Finding/Remarks

It is unlikely that thisposition can be achievedor maintained.

Likely to offer less servicesthan currently obtained inCSCCU



3.0 OTHER UPDATES

i. The Board had commissioned an organizational review to determine how the structure might be improvedin light of the environmental changes and the search for efficiency

ii. CSCCU has re- engaged Jamaica Police Credit Union to exhaust the Merger Possibility talks. Two meetingshave been held and CSCCU has submitted its wish list to Jamaica Police. To date Jamaica Police hasresponded favourable. The basis for an agreement will be documented in an agreement which memberswould affirm if the conditions are deemed favorable.

4.0 THE WAY FORWARD

1. Merger/Viability Options Committee will finalize briefs on Business Model Options and conclude discussionswith Jamaica Police Cooperative Credit Union to implement member sensitization by July 2016

2. Sensitization sessions/consultation recommended via two Town Hall type meetings – One in Spanish Townand one in Kingston – August and September 2016

3. Special Annual General Meeting after consultations/sensitization on Business Models – August 2016

4. Implement new business model – January – March 2017.


Transform to a MutualThrift Society and operateunder the supervision ofthe Registrar of Co-operatives and FriendlySocieties.

Pursue Strategic Mergerwith compatible MergerPartner via amalgamationor transfer of engagement

Maintain identity, culture,close knitted connections.

Not subjected to thepending BOJ regulation

Can access FIP services asa cooperative

Membership immediatelyaccess expanded suite ofproducts and servicesavailable in new entity e.g.Internet/online banking,loan processing, branchnetwork, liquidity and loanavailability

Membership andorganization benefit fromeconomies of scale

Does not take depositsfrom members

Does not solve liquidityissues and lack networksupport as currentlyavailable from CU League

Some operational issuesmay require specialapproval from the Registrarof Cooperatives

Loss of some originalidentity and close knittedness.

Loss of familiarity with staff

Fear from staff andmembers may lead to lowstaff morale, lowerproductive, etc.

Can offer similar servicesas Credit Union.

No guarantee that MutualThrifts will not come BOJRegulations as a Co-operative managingfinancial resources formembers.

Benefits can be gainedfrom partnership.

Members will gain all theproducts and servicesoffered by the newentity/receiving creditunion

Operates under BOJRegulations/licensingregime

New identity can be forgeddepending on the mergerpartner selected



5.0 CONCLUSION

Fellow Cooperators, we urge you to participate in the upcoming sensitization/consultation meetings so that allthe options and opportunities possible are discussed and fully understood. Then and only then can we trulydecide consciously and democratically where and what the future of our credit union will be.

6.0 COMMITTEE MEMBERS

NAMES POSITIONS

DAVID KNIGHT Chairman

GILBERT SMITH Vice Chairman

SHERYL REYNOLDS Member

COURTNEY RUDDOCK Member

CALVIN EDWARDS Member

DWIGHT STEPHENSON Member

CLAUDIA THOMPSON-ROACHE Member

WEEMAN CLARKE Member

GEOFFREY ECCLESTON Member

GEORGIA GORDON-DIXON Member

Signed:MERGER/VIALIBILITY OPTIONS COMMITTEE

........................................................ ..................................................David C. Knight Gilbert Smith, J.P.Chairman Vice Chairman





VOLUNTEERS 2015VOLUNTEERS 2015

BOARD OF DIRECTORS PositionLESLIE CAMPBELLGEORGE THORPEDAVID SPENCERREUBEN KELLYRENEORD SMALLINGRAYMOND WILLIAMSDAVID KNIGHT

PresidentVice PresidentTreasurerAssistant TreasurerSecretaryAssistant SecretaryDirector

CREDIT COMMITTEE PositionWINSTON WALTERSMARIE McDONALDINDERIA HUTCHINSONGARY BYFIELDDONOVAN OCCONOR

ChairmanSecretaryMemberMemberMember

SUPERVISORY COMMITTEE PositionSHERYL REYNOLDSLISA COLLIE-EVERINGCOURTNEY RUDDOCKNARGAREE ALLISONFABIAN McKOY

ChairpersonSecretaryMemberMemberMember




STAFF 2015STAFF 2015NAMES Position

CLAUDIA THOMPSON-ROACHE General ManagerGEOFFREY ECCLESTON AccountantWEEMAN CLARKE Business Development ManagerSANDRA BROWN Administrative AssistantMELISIA FORD-CAMPBELL Acting Risk & Compliance OfficerJODIE-ANN DESLANDES Marketing Field OfficerLEIGHTON CRUMP Senior Accounting ClerkALICIA HEATHE Accounting ClerkNATALIE BROWN Member Service RepresentativeRASHIDA BRYAN Accounting Clerk (Jan. to Oct. 2015)FRANCINE FOSTER Member Service RepresentativeGEORGIA GORDON-DIXON Loans OfficerMARTHA GORDON Loans Security/Delinquency OfficerBYRON RICHARDS Loans ClerkEVERTON THOMPSON Loans ClerkDEMIKA ANDERSON Temporary Clerk (Jan. to Dec. 2016)CAROLINE SINGLETON TellerLATOYA MILLER Filing ClerkJOY SCARLETT Office AttendantKENROY RHODEN Office Assistant/Bearer




LIAISONS OFFICER 2015LIAISONS OFFICER 2015St. Catherine Adult Correctional CentreRichard WhyteKem-Roy McGawRaymond Lattibeaudiere

Horizon Adult Remand CentreCarlington SoaresGuyland BarnettVivian Taylor

Richmond Farm Adult Correctional CentreDwight Black Howard Hay

Tamarind Farm Adult Correctional CentreColleen TurnerCurtis Bacchas

Metcalfe Street Adult Correctional CentreChristine BrooksAllan Haye

New Broughton Adult Correctional CentrePatrick Taylor

Head OfficeMaud Chambers

ProbationSylvia SaddlerVerona HoustonGagrine Gordon

Training SchoolMervin Smith

South Camp Remand CentreGrace OddmanOuida Pennant

Hill Top Juvenile Correctional CentreCleveland Gayle Lurline Foreman

Tower Street Adult Correctional CentreDonna AbsolamMichelle Brown-Henry

Rio Cobre Juvenile Remand CentreMark Bernard (Transferred)

Fort Augusta Adult Correctional CentreCharlane Williams

Ja. Correctional Officers Pension Ass.Gilbert Smith




22001155 HHIIGGHHLLIIGGHHTTSSCHILD’S MONTH “2015”

Donation to St. Stephens United Basic School

Donation to Salvation Army Basic SchoolDonation to Best Care Foundation




22001155 HHIIGGHHLLIIGGHHTTSSCREDIT UNIONETTE FUN DAY




22001155 HHIIGGHHLLIIGGHHTTSSCREDIT UNION WEEK ACTIVITIES

Donation to Best Care FoundationDonation to Salvation Army Basic School

Donation to Salvation Army Basic SchoolDonation to Salvation Army Basic School

Donation to Best Care Foundation Donation to Salvation Army Basic School




22001155 HHIIGGHHLLIIGGHHTTSSCREDIT UNION WEEK ACTIVITIES

Food Feeding Programme with St. Stephen’s United Church

JUNIOR ACHIEVEMENT PROGRAMME




22001155 HHIIGGHHLLIIGGHHTTSSMEMBERSHIP APPRECIATION DAY




22001155 HHIIGGHHLLIIGGHHTTSS

JCCUL Convention 2015




T he Correctional Services Co-operative Credit Union Limited regrets the passing of thesemembers during the year 2014 and prays God’s continuous blessings on their loved ones.

A death has occurred and everything has changed.We are painfully aware that life can never be the same again,

That yesterday is over,That relationships once rich have ended.

But there is another way to look upon this truth.If life now went on the same,

Without the presence of the one who had died,we could only conclude that the life we remember

made no contribution, filled no space,meant nothing.

The fact that these persons left behind a placethat cannot be filled is a high tribute to these individuals.

Life can be the same after a trinket has been lost,but never after the loss of a treasure.

● DONOVAN MASON ● SANDRA MURDOCK

● NOLA FYFFE ● ALVIN BROWN

● CAROL TAYLOR ● ROHAN ANDERSON

● CARLENE ECCLESTON-STEWAR

DeceasedMembers for 2015




cÜtçxÜ àÉ fàA YÜtÇv|á Éy Táá|á|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

Eternal Father, Bless our Land,Guide us with thy mighty hand,Keep us free from evil powers,Be our light through countless hours,To our leaders, great defender,Grant true wisdom from above,Justice, truth be ours forever,Jamaica, land we love,

Jamaica, Jamaica, Jamaica, land we love

Teach us true respect for all,Stir response to duty's call,Strengthen us the weak to cherish,Give us vision lest we perish,Knowledge send us Heavenly Father,Grant true wisdom from above,Justice, truth be ours forever,Jamaica, land we love,

Jamaica, Jamaica, Jamaica, land we love

National Anthem

mission statement vision statement · miss tanya brown jamaica cooperative credit union league mr....

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