2020 Annual Review

2020 Annual Review

Aegium Foundation, formerly known as The Geriatric Medical Foundation of Queensland, was established in 1986 under a joint initiative of The United Grand Lodge of Queensland and the Board of Benevolence and of Aged Masons Widows and Orphans’ Fund to endow the Masonic Chair in Geriatric Medicine at the University of Queensland. Individual contributions from freemasons and business community connections of the founding directors raised an initial capital base of $1 million.

This has since been expanded through bequests and careful investment. Funds stood at $6.2 million at 30 June 2020. Distributions to research partners, paid only out of net investment income since inception, now exceed $3.6 million.

Nowadays, people are living longer, and older age now represents a bigger portion of their lives. The Foundation’s vision is that later years should be greater years. Hence its mission to support research and to encourage a deeper understanding of age-related issues amongst medical students and practitioners alike. Investments in seed funding for specific projects in this field have seen these grow to maturity and yield most satisfying returns.
From a small beginning, the University of Queensland’s Masonic Chair in Geriatric Medicine has grown into the Centre for Health Services Research which is now recognised as leading Australia in its ageing and geriatric medicine programme, attracting the best researchers in the field.

The Foundation’s support now extends to the Griffith University Institute of Drug Discovery and its world leading research into the causes of Parkinson’s Disease. Both institutions acknowledge that neither would exist today had it not been for the initial seed funding provided by the Foundation.

For a second year, modest support to the Farmers Health Promotion Collaborative has been maintained, as has its collaboration with both Universities in its focus to reverse the adverse health outcomes which continue to be experienced by people in country areas. Directors trust that you will find the accompanying financial overview and reports from our research partners to be informative.

FINANCIAL

There has been a measurable impact of the COVID-19 pandemic on the capital value of the Foundation’s investment portfolio at 30 June 2020 when compared to the prior balance date, and on its investment earnings over that period.

Dividends, interest, and franking credits received for the year were 4% lower than prior comparative period while value of investments declined by 9%.

The reduction in dividend income has been experienced for only the second half of the year under review, and directors expect that for full year to 30 June 2021 a further decline of 35% in investment earnings will be experienced. This has been allowed for in the current year’s budget.

The Foundation’s conservative distribution policy has been to pay out approximately 65% of net investment income in any one year and to reinvest the balance. In what can be hoped is only for the short term a higher distribution ratio is expected in order to maintain the level of distributions to its research partners.

Investment policy continues to be subject to close review by directors. The conservative portfolio remains weighted towards ASX listed investment companies (LICs) favoured not only for their low management expense ratios but also for their spread of investments in listed companies which have interests in both Australia and overseas and have a demonstrated history of growing earnings and dividend payments.

At 30 June 2020 the portfolio, at market value comprised:

• Shares in ASX listed LICs $ 2,905,130
• Shares in other top 10 ASX listed companies $ 1,258,336
• Managed funds $ 1,692,177
• Fixed income securities $ 89,650
• Cash and receivables $ 323,132
Total $ 6,268,445

This figure was 9% lower than at 30 June 2019

Subject to receipt of final tax statements from fund managers, unaudited Income and expenditure for the year to 30 June 2020
Dividends, distributions, interest, $ 398,387
and franking credit refunds (- 4% on 2019)
Operating expense - $ 25,062
secretarial, audit, insurance, legal and advert
Operating cash surplus $ 373,325 (- 4.6% on 2019)
Distributions to beneficiaries $ 280,000
Surplus available for reinvestment $ 93,225
These figures are on a cash basis and subject to statutory audit.

It is to be noted that:

Any funds received by way of tax-deductible donation, or bequest, are treated as capital for investment
• The Australian Taxation Office requires that as a Public Ancillary Fund the Foundation must make an annual distribution to beneficiaries of an amount not less than 4% of the market value of its investments at the prior 30 June
• Distributions to beneficiaries are only paid out of net investment income or retained income with the aim to pay out 65% and retain 35% for reinvestment. In current circumstances directors expect to increase this payout ratio to maintain the existing level of support for the work of the Foundation’s beneficiaries
• The Foundation employs no staff, has no office premises, and pays no directors fees
• Operating expense for the year represented 6.4% of income
• There is no external investment manager however expert advice is regularly sought on available investment options

DIRECTORS
Ian Russell AO CBE, who was a founding director in 1986, retired as a director on 30 June 2020. Directors record their thanks and acknowledgement for his valuable counsel for 34 years.

While the enabling Trust Deed provides that the Grand Master of United Grand Lodge of Queensland shall be a director for the term of his office, Paul Holland resigned as a director on 17 February 2020. At the date of this Review he had not nominated an alternate or replacement.

Directors at 30 June 2020 were:
Greg Andrews (appointed 26 May 2020)
Dr Adrian Guest
Andrew Little
Antony Love OAM (chairman)
Ross McDowell
Geoffrey White
David Whitman
Secretary - Gordon Appleby

For and on behalf of the directors.
A J Love Chairman
Date: 25 August 2020