jmf 2011 chairmans report

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1 JMF 25 th AGM “As We Contemplate The Future” June 28, 2012 JAMAICA MEDICAL FOUNDATION 25th ANNUAL GENERAL MEETING, June 28, 2012 IAJ HEAD OFFICE CHAIRMAN’S REPORT 2010/2011 THEME: ‘AS WE CONTEMPLATE THE FUTURE’ INTRODUCTION Colleagues of the Jamaica Medical Foundation, Special Guest Mr. Hugh Reid, newly elected President of the Insurance Assoc. of Jamaica (IAJ), IAJ and other Insurance Company Executives, Other Distinguished attendees, Ladies and Gentlemen Welcome to this the 25 th AGM of the Jamaica Medical Foundation. It is always a pleasure to meet and update you on the activities of this very important Foundation and, this year being our 25 th Anniversary; it makes it even more important that I do. I will do so under the Theme “As we contemplate the future”. Allow me to begin with a quote shared with us by Mr. Lloyd A Vermont Sr., our Hon Secretary, at our Trustee Meeting of Jan 03, 2011. It is this: “A man may not achieve anything great he has dreamed about, But, he will never achieve anything great without having dreamed it first” (William James, Father, American Psychology, 1842-1910) The reality is that, we believe that the attainment of age 25 offers us an opportunity for evaluation, review and forward planning and so, much of my comments will revolve around this theme. Before I focus on some specifics, let me further put things in perspective by putting it this way. In the future of which we speak, and which begins as of now, our Foundation can take one of two forms as follows: 1. Figuratively, it can take the form that majors in minors i.e. being able only to do small gifting from a small capital base (even though we know that there is an important place for small donations) or 2. The form that embraces the philosophy of great philanthropies and, over time, build and pattern itself off such as the Rhodes Trust, and Nobel Trust, (worldwide philanthropies), whose ability to do big gifting is the norm because, they do so from a capital base that was allowed to grow to a very large size In the process of introspection, it is important that we reflect on these things if we are to fulfill the mandates of our founders which are to:

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Page 1: Jmf 2011 chairmans report

1 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

JAMAICA MEDICAL FOUNDATION

25th ANNUAL GENERAL MEETING, June 28, 2012

IAJ HEAD OFFICE

CHAIRMAN’S REPORT 2010/2011

THEME: ‘AS WE CONTEMPLATE THE FUTURE’

INTRODUCTION

Colleagues of the Jamaica Medical Foundation, Special Guest Mr. Hugh Reid, newly

elected President of the Insurance Assoc. of Jamaica (IAJ), IAJ and other Insurance

Company Executives, Other Distinguished attendees, Ladies and Gentlemen

Welcome to this the 25th

AGM of the Jamaica Medical Foundation.

It is always a pleasure to meet and update you on the activities of this very important

Foundation and, this year being our 25th

Anniversary; it makes it even more important

that I do. I will do so under the Theme “As we contemplate the future”.

Allow me to begin with a quote shared with us by Mr. Lloyd A Vermont Sr., our Hon

Secretary, at our Trustee Meeting of Jan 03, 2011. It is this:

“A man may not achieve anything great he has dreamed about,

But, he will never achieve anything great without having dreamed it first”

(William James, Father, American Psychology, 1842-1910)

The reality is that, we believe that the attainment of age 25 offers us an opportunity for

evaluation, review and forward planning and so, much of my comments will revolve

around this theme.

Before I focus on some specifics, let me further put things in perspective by putting it

this way. In the future of which we speak, and which begins as of now, our Foundation

can take one of two forms as follows:

1. Figuratively, it can take the form that majors in minors i.e. being able only to do

small gifting from a small capital base (even though we know that there is an

important place for small donations) or

2. The form that embraces the philosophy of great philanthropies and, over time,

build and pattern itself off such as the Rhodes Trust, and Nobel Trust, (worldwide

philanthropies), whose ability to do big gifting is the norm because, they do so

from a capital base that was allowed to grow to a very large size

In the process of introspection, it is important that we reflect on these things if we are

to fulfill the mandates of our founders which are to:

Page 2: Jmf 2011 chairmans report

2 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

a. Give assistance for medical interventions at individual and institutional levels,

and

b. Fund research into the medical conditions that affect our Jamaican people

In these respects, and as we keep on saying against the perspective of a ‘raging sea of

requests’, the ‘couple million dollars’ in our name (Twenty Four Million at this time) do

not ‘cut any dash’ . The Fifteen Million that we had bravely promised for a Prostate

Cancer Research Project, something very badly needed, would eat up more than half of

it! Hence our Theme at this AGM.

It could be time for a game-changer. Should your Foundation, for example, be the

starting point for a truly Jamaican Philanthropy with a broad-based directorship that

engenders a secure funding base?

FOCAL POINTS THIS YEAR

In my last Report to you, I spoke on six (6) of the seven items below and, of necessity, I

will have to speak to them again with one important addition. We have started a new

investment account in a Foreign Currency. More on this later.

The seven (7) topics are:

1. Better alignment with the present Insurance Industry in search of a more secure

funding base and the Constructional Review that this would require bearing our

mandate in mind

2. Cultivation of the Diaspora in search of an additional funding base

3. Financial Report for F/Y 2010-11

4. Opening of investment in a foreign currency

5. Review the matter of the adequacy of our ‘Twenty Million Dollar’ base to more

seriously respond to our mandate

6. Donations during the year

7. The proposed 25th

Anniversary Banquet

These, in fact, remained the focus during the year under review and I will update you

accordingly.

Page 3: Jmf 2011 chairmans report

3 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

ITEM # 1

Better alignment with the present Insurance Industry in search of a more secure

funding base and the Constitutional Review that this would require bearing our

mandate in mind

I believe I can say that we have made some progress in this regard and, in my next

Report, I hope to be in a position to give you the specifics of that progress

As you know, the Foundation started as the outreach arm of the life insurance industry

(No General then) of the 1980s. Then, there was a close working relationship between

the Foundation and the leadership of the industry because, in a real sense, the industry

was the parent of the child (‘JMF) but, this relationship went further than just

parent/child. During those times, the Foundation knew for sure where its support base

was and had the confidence that this base was there to support its various functions and

assist in growing it’s capital base. The idea was that it (Foundation) would grow to

become a really pivotal Jamaican philanthropy.

It is now, however, a matter of public knowledge that the Jamaica of the 1980s when,

for example, the exchange rate was in the region of J$5, is a different ‘person’ from

what it is today. Nearly everything has changed. The exchange rate yesterday was

J$88.7 (www.mayberryinv.com) and, the economy has remained not just tight, but

stifling.

The net result is that, the industry that gave birth to the Foundation is no longer in

existence. Like the country, that industry has changed. There is now a new kid on the

block (‘IAJ). To its’ credit, (and not because the new IAJ President, Mr. Hugh Reid is our

Special Guest today) it has gone out of its way to be very accommodating to us. What

your Foundation would like to do, however, is to concretize the upgrading of the

relationship from ‘accommodating’ to one that takes us back to where we were when

we were founded.

As I said earlier, a lot of background work has been done since my 2010 Report to you.

We, your Trustees, have looked at an integration and alignment framework that we

believe is both doable and workable. The IAJ, for its part, has done an extensive review

of Corporate Social Responsibility (CSR) regimes within the Industry. Our expectation is

that, in a short while, the IAJ will accept our invitation for dialogue. This is how we see

it. The JMF has Twenty Four Million Dollars (2011 Audit) built up over 25 years and is

interested in finding a support base for its development into a major Jamaican

Philanthropy. We believe we have most, or much, of the platform that the Industry

(IAJ) may be looking for as a kind of launch pad for its Social Responsibility Outreach.

With goodwill on each side, the base is probably well set for discussion that could lead

to permanent alignment. If so, your Foundation, in a sense, would have ‘gone back to

the promising future’ that we once had.

Page 4: Jmf 2011 chairmans report

4 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

ITEM # 2:

Cultivation of the Diaspora in search of an additional funding base

We did not ‘test the waters’ in the Diaspora as we had intended to do. One main reason

was our preoccupation with the new Constitution and alignment with the Insurance

Industry. Another is the continuing search for the best way to explore so that any trip

will be successful in generating some funds or at least cover our expenses. The search

goes on.

ITEM # 4

Financial Report for F/Y 2010-2011

Even though the economic environment remained difficult, the Foundation’s financial

position showed some overall improvement over that for the prior year in some key

areas as follows, 2011 vs. 2010:

a) total investment value $19.3 vs. $14.8 up 29 % (22% in 2010)

b) finance income $1.5 vs. $1.82 down 15% (-18% in 2010)

c) administrative expenses $1,099,975 vs. $662,000 up 66% (-19% in 2010)

d) surplus for the year $3.8M vs. $3.0M up 26.8% (up 667% in 2010)

e) Total reserves $24.2 vs. $20.4 up 18.7% ( up 17 % in 2010

As you know, consequent on the JDX, everyone who earned interest on their investment

suffered a fall in interest income and your Foundation was no different. Happily for us,

because of our equity investment protocol, we continually leverage our share value to

give us an advantage whether the market is going up or down.

What we do is to use our dividends to buy additional numbers of shares in the

companies that pay these dividends. The result is that when share prices drop, a unit of

dividend buys relatively more units of shares and vice versa. The net result of this

strategy is that the Foundation keeps on building up more shares and, when share prices

go back up, the additional number of shares is reflected in a better than normal upswing

in investment value because, there are now more shares in the pool.

Not surprisingly, therefore, there has been shift in the composition of our Investment

Pool. In respect of the investment value at a) above, the breakout is:

2011 2010 2009

Fixed income $ 6,064,219 $5,094,138 $5,033,985

Equity value 13,064,691 9,728,963 7,051,689

Whereas the F. Inc/Equity mix in 2010 was 34.7$ vs. 65.3%, in 2011, this was changed to

31.7% vs. 68.3%

Page 5: Jmf 2011 chairmans report

5 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

ITEM 4

Opening of investment in a foreign currency

During the year under review, we used One Million Dollars of the dividends from our

Equity Investments to open a Foreign Exchange Account. While the country’s exchange

rate was stable for the longest while in a very long time following the successful JDX

protocol, we felt it was prudent to hedge some of our ‘financial bets’ going forward.

Accordingly, we opened an Account in Scotia Group’s Caribbean Income Fund,

denominated in US dollar when the exchange rate was J$86.1 (Sept 30, 2011). You will

recall that I said earlier that yesterday it was J$88.7 (June 26, 2012) meaning that our

initiative is ‘bearing the fruit’ that we anticipated. Two reasons guided our choice of the

Fund. Firstly, it is under the umbrella of the strong and reputable Scotia Group.

Secondly, it is registered outside of Jamaica in a tax free regime which means no

deductions from our investment earnings.

ITEM 5

Review the matter of the adequacy of our ‘Twenty Million Dollar’ base to more

seriously respond to our mandate

Much was said about this in my last Report and at the beginning of this one and, since I

have indicated we are at a point where we can dialogue with the Industry about closer

integration, it might be appropriate not to say much more about this at this time. Suffice

it to say that we must always bear in mind the admonition of a former insightful Prime

Minister who has always reminded us that “it takes cash to care” Let me say, though,

that it is against this background that the Foundation is seeking to identify a support

base from which to move its ‘twenty-something’ million capital base, over time, to one

that could, for example, accommodate the Fifteen Million Dollar request for the

Prostate Cancer Research Project.

ITEM # 6 DONATIONS

During the year, the Foundation gifted away more than Three Hundred and Sixty Two

Thousand Dollars ($362,000) to five recipients at an average of just under Seventy Five

Thousand ($75,000) Dollars. This is an area in which we want to be more active and

hence the matter is under careful review especially in light of the fall off in interest

income

Page 6: Jmf 2011 chairmans report

6 JMF 25th AGM “As We Contemplate The Future” June 28, 2012

ITEM 7

The Foundation’s 25th anniversary in 2012

In my last Report, I indicated that the year 2012 marked the Twenty Fifth (25)

anniversary of your Foundation and that we would celebrate it with our best Banquet

ever. However, in reviewing the matter, we agreed that although it was registered in

1987, it did not start operations until 1988. We therefore decided to mark the event in

2013 and have set the date of Saturday, March 30, 2013 for this Banquet and I invite

you to mark your diary because, I am sure that Trustee Thomas James and his Banquet

Committee are going to make it a stellar affair .

FOUNDATION WEBSITE

I also want to remind you that our website is now fully operational and can be visited at

www.jamaicamedfoundation.com It is linked to the Jamaica Gleaner’s website, one of

the most visited websites in Jamaica and the Diaspora. In due course, we will optimize it

to receive funds from anyone wishing to contribute to whatever cause we are focusing

on from time to time.

These then, are the updates on the seven (7) areas of focus and I trust they have spiked

your interest and will give you much food for thought.

Thank you very much.

.

Prepared for Chairman by

Lloyd A Vermont Sr.

Hon. Secretary

June 27, 2012