GLOBAL MASTERS FUND LIMITED
GLOBAL MASTERS FUND LIMITED
Global Masters Fund Limited
ABN 84 109 047 618
Tel: 1300 552 660 (from within Australia)
Int: +61 2 8815 5400
Fax: + 61 2 8815 5401
Email: info@globalmastersfund.com.au
Internet: www.globalmastersfund.com.au
Level 1, 12 O’Connell Street Sydney NSW 2000 Australia
PO Box 542 Sydney NSW 2001 Australia
Annual Report
30 June 2015
GLOBAL MASTERS FUND LIMITED
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
ACN 109 047 618
DIRECTORS’ REPORT
Patrick Corrigan
AM
Non-executive Director
Chairman of an international freight forwarding company for numerous years.
Experience in accounting, financial management and other commercial acumen
including investments. One of Australia’s leading contemporary art collectors. Member
of the “Order of Australia”. Recently awarded an honorary doctorate at Bond
University.
Chairman of Audit Committee
Other current directorships
Chairman of Gold Coast Regional Art Gallery
Chairman of Qantas Art Scholarship Committee
CONTENTS
Deputy Chair of Air Freight Export Council of NSW Inc
Director of Gold Coast Art Centre
Director of Flagship Investments Limited
Director of Aboriginal Benefits Foundation Limited
Director of Community Radio Station Jazz Radio Limited
Page
Chairman’s Letter ................................................................................................................. 2
Directors’ Report ................................................................................................................... 3
Directors’ interests in securities of the Company are set out in Note 17 of the Notes to the Financial Statements.
Auditor’s Independence Declaration ..................................................................................... 7
Company Secretary
Corporate Governance Statement ........................................................................................ 8
Mr Brian Jones (B.COM CA) was appointed company secretary on 1 March 2007. He has had many years of
Financial Report ....................................................................................................................
commercial and financial experience and has served as the company secretary and director of listed public companies
in the past.
Statement of Profit or Loss and Other Comprehensive Income ............................... 13
Directors’ Meetings
Statement of Financial Position ................................................................................ 14
Statement of Changes in Equity ............................................................................... 15
The number of Board meetings and the number of meetings attended by each of the directors of the Company held
during the time the directors held office during the year are:
Statement of Cash Flows ......................................................................................... 16
Notes to the Financial Statements ............................................................................ 17
Meetings Held
3
Directors’ Declaration ......................................................................................................... 27
Meetings Attended
Mr JL Addison
Director
3
Independent Audit Report ................................................................................................... 28
Shareholder Information……………………………………………………………..……………30
Dr EC Pohl
Mr P Corrigan
3
3
3
3
Investments ........................................................................................................................ 31
Audit Committee Meetings
Corporate Information ......................................................................................................... 32
Audit Committee meetings take place before each directors meeting. The following are the number of Audit Committee
meetings and the number of meetings attended by each member:
Director
Mr JL Addison
Dr EC Pohl
Mr P Corrigan
Meetings Held
Meetings Attended
3
3
3
3
3
3
The Audit Committee resolved to recommend to the Board of Directors that the 2015 Financial Statements be adopted.
A circular resolution signed by all directors was made on 26 February 2015 approving the results for the company for the
6 months to 31 December 2014 and its statement of financial position at that date.
Corporate Information
Corporate Structure
Global Masters Fund Limited is a company listed by shares that is incorporated and domiciled in Australia.
Principal Activity
The Company is an investment company seeking long term capital growth through principally investing in shares in
Berkshire Hathaway Inc. listed on NYSE and Athelney Trust listed on LSE.
Review and Results of Operations
The Company made a net profit after income tax of $ 15,193 (2014: profit $ 71,201)
30 June 2014
30 June 2015
Page 1
1
Page 4
GLOBAL MASTERS FUND LIMITED
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
ACN 109 047 618
DIRECTORS’ REPORT
Patrick Corrigan
AM
26 August 2015
Dear Shareholder
Non-executive Director
GGlloobbaall MMaasstteerrss FFuunndd LLiimmiitteedd
Chairman of an international freight forwarding company for numerous years.
ABN 84 109 047 618
Experience in accounting, financial management and other commercial acumen
including investments. One of Australia’s leading contemporary art collectors. Member
of the “Order of Australia”. Recently awarded an honorary doctorate at Bond
University.
I am pleased to present the 10th Chairman’s report of Global Masters Fund.
Chairman of Audit Committee
The Year in Review
Over the past year the net tangible assets (NTA) per share of Global Masters Fund
Limited increased by 17%. The listed price on ASX has increased over the year and closed the gap
between it and NTA.
Other current directorships
Chairman of Gold Coast Regional Art Gallery
Chairman of Qantas Art Scholarship Committee
Deputy Chair of Air Freight Export Council of NSW Inc
Director of Gold Coast Art Centre
Director of Flagship Investments Limited
Director of Aboriginal Benefits Foundation Limited
Director of Community Radio Station Jazz Radio Limited
Revenue from ordinary activities for the year was $ 200,274 (prior year $348,511) a decrease of 42 % over the prior year.
However the prior year revenue included gains on the sale of Berkshire Hathaway shares of $176,484. In the current year, the
income from dividends and interest has increased by 15.4 %.
The Company achieved a profit before tax of $15,193 with total comprehensive income increasing by 25.3 % to $1,509,190. The
value of the Company’s investment in Berkshire Hathaway in US dollar terms increased by 7.7% and the exchange rate to the
Directors’ interests in securities of the Company are set out in Note 17 of the Notes to the Financial Statements.
US dollar dropped by 18%. The combination of these boosted the value of the Company substantially. On the other hand, price
per share of the Company’s investment in Athelney Trust plc., listed on the London Stock Exchange decreased by 6% However,
Company Secretary
the fall the in exchange rate b etween the British Pound and the Au stralian dollar was a good offset. The investment in Flagship
Investments Limited, which is listed on the ASX saw it’s share price decline by 12% in the 12 months to 30th June 2015 over the
Mr Brian Jones (B.COM CA) was appointed company secretary on 1 March 2007. He has had many years of
same period the ASX 200 returned 1.3 %.
commercial and financial experience and has served as the company secretary and director of listed public companies
in the past.
As a matter of policy your Company has nev er undertaken currency hedging of its foreign investments largely because
investors have sought internation al diversification and the investments in Berkshire Hathaway and Athelney achieve this. The
Board has always acknowledged that, with the glo bal reach of t he portfolio there is currenc y exposure that ma y increase the
Directors’ Meetings
volatility of the Company’s NTA and share price. The Board considers the matter on a regular basis, and we have recently re-
The number of Board meetings and the number of meetings attended by each of the directors of the Company held
confirmed that we have no particular insights that would lead to a change in policy. Whilst in recent years this has not benefited
during the time the directors held office during the year are:
investors it has been a clear benefit in the last fina ncial year, as the Australian currency has moved back to it’s historical levels
and possibly fair value the Board does review this position from time to time.
The Market Outlook
Director
Mr JL Addison
Dr EC Pohl
Meetings Held
Meetings Attended
3
3
3
3
The opening sentence in a recent Buttonwood article in the Economist states:
When a canary stops singing, it is worth a sidelong glance. When whole flocks of birds keel over, it is time to be
alarmed. The warning signs in the financial markets and the global economy are mounting.
Mr P Corrigan
3
3
In the first part of this year markets around the world have experienced periods of volatility because of the Greek crisis, and then
Audit Committee Meetings
uncertainty regarding the future d irection off the Chinese econom y, which has led to a reduction in that countr y’s demand for
commodities. We now see companies such as Glencore in strife and a Japanese shipping compan y, Daiichi Chuo, has filed for
Audit Committee meetings take place before each directors meeting. The following are the number of Audit Committee
bankruptcy today; its reven ues have been hit by falling Chinese d emand for raw materials. For t he first qua rter of this year
meetings and the number of meetings attended by each member:
equity indices are continuing to fall. Inflation forecasts remain low.
Meetings Held
Having said that, China ma y not be as weak as the bears fear. The USA had a good second quar ter and India is escaping the
3
downturn so far but is lowering it’s growth forecast and lowering interest rates.
Meetings Attended
Mr JL Addison
Director
3
3
Despite these warnings about volatile markets ah ead your board remains cautiously optimistic about the longer term future and
3
believes that the outlook for both Berkshire Hathaway and Athelney Trust is sound.
Mr P Corrigan
Dr EC Pohl
3
3
The final words in the above mentioned Buttonwood article are that:
The Audit Committee resolved to recommend to the Board of Directors that the 2015 Financial Statements be adopted.
It all seems to be a very odd time for the Fed to be thinking of pushing up rates.
A circular resolution signed by all directors was made on 26 February 2015 approving the results for the company for the
I look forward to your continued support and all shareholders will be kept advised of any developments as they occur.
6 months to 31 December 2014 and its statement of financial position at that date.
Finally, I wish to thank m y fellow board members and compan y secretary for th e hard work and support in 2015 and we
Corporate Information
(including myself as Chairman) look forward to continue to progress the company.
Yours sincerely
Corporate Structure
Global Masters Fund Limited is a company listed by shares that is incorporated and domiciled in Australia.
Principal Activity
The Company is an investment company seeking long term capital growth through principally investing in shares in
Berkshire Hathaway Inc. listed on NYSE and Athelney Trust listed on LSE.
Review and Results of Operations
Jonathan L. Addison
Chairman
The Company made a net profit after income tax of $ 15,193 (2014: profit $ 71,201)
30 June 2015
30 June 2014
2
Page 4
Page 2
GLOBAL MASTERS FUND LIMITED
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
ACN 109 047 618
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors present their report together with the financial report of Global Masters Fund Limited for the year ended 30
Patrick Corrigan
June 2015 and Independent Audit Report thereon. The financial report has been prepared in accordance with Australian
AM
Chairman of an international freight forwarding company for numerous years.
equivalents of International Financial Reporting Standards (IFRS).
Experience in accounting, financial management and other commercial acumen
including investments. One of Australia’s leading contemporary art collectors. Member
of the “Order of Australia”. Recently awarded an honorary doctorate at Bond
University.
Directors
The Directors of the Company during or since the end of the financial year to the date of this report are:
Non-executive Director
Name
Jonathan Lancelot Addison
Emmanuel Clive Pohl
Patrick Corrigan
Chairman of Audit Committee
Date of Appointment
19 April 2005
19 April 2005
Other current directorships
Chairman of Gold Coast Regional Art Gallery
Chairman of Qantas Art Scholarship Committee
Deputy Chair of Air Freight Export Council of NSW Inc
29 November 2006
Director of Gold Coast Art Centre
Director of Flagship Investments Limited
Director of Aboriginal Benefits Foundation Limited
Director of Community Radio Station Jazz Radio Limited
Details of the Directors in office during the year:
Name And Qualification
Experience and Special Responsibilities
Company Secretary
Jonathan Lancelot Addison
Non-executive Chairman
Directors’ interests in securities of the Company are set out in Note 17 of the Notes to the Financial Statements.
B Ec, ASIS, CFTP (Snr), MAICD
Mr Brian Jones (B.COM CA) was appointed company secretary on 1 March 2007. He has had many years of
commercial and financial experience and has served as the company secretary and director of listed public companies
in the past.
Over 31 years experience in the investment management industry. Investment
Consultant and former CEO of the Meat Industry Employees Superannuation Fund.
Previous experience includes Director and Asset Consultant with the Corporate
Finance Section of PricewaterhouseCoopers and Manager at Sedgwick Noble
Lowndes.
Member of Audit Committee
Directors’ Meetings
Other current directorships
The number of Board meetings and the number of meetings attended by each of the directors of the Company held
during the time the directors held office during the year are:
Hawkesbridge Private Equity Ltd
African Enterprise International Ltd (Chairman)
Director
Mr JL Addison
Dr EC Pohl
Emmanuel Clive Pohl
Pr Eng. BSc (Eng), MBA, DBA, FAICD,
MSDIA, SAFin
Mr P Corrigan
Audit Committee Meetings
Director
Mr JL Addison
Dr EC Pohl
Mr P Corrigan
TPCG Ltd
Meetings Held
Meetings Attended
Athelney Trust PLC (alternate to Dr E.C.Pohl)
CCSL Investment Committee Member
3
Managing Director
3
Over 27 years experience in the funds management industry initially as a director and
head of research with leading South African broking firm Davis Borkum Hare. He was
a member of the 1991 South African delegation to the Annual Meeting of the Board of
Governors of th e World Bank and the Interna tional Monetary Fund in Bangkok. He
was a member of the South African Accounting Practices Board until he left South
Africa in 1994. After arriving in Australia he joined Westpac Investment Management
prior to founding Hyperion Asset Management in 1996. He resigned from Hyperion in
2012 and established ECP Asset Management, a boutiq ue funds ma nagement
business focused on quality small and m id-cap companies. He h as served on the
Board of a number of major corporations in South Africa and Australia.
Meetings Attended
Meetings Held
3
3
3
3
Other current directorships
3
3
3
3
3
3
Audit Committee meetings take place before each directors meeting. The following are the number of Audit Committee
meetings and the number of meetings attended by each member:
Executive Director ‐ Barrack Street Investments Limited
Chair of Athelney Trust Plc
The Audit Committee resolved to recommend to the Board of Directors that the 2015 Financial Statements be adopted.
Chairman of EC Pohl & Co Pty Ltd
A circular resolution signed by all directors was made on 26 February 2015 approving the results for the company for the
Chairman of ECP Asset Management Pty Ltd
6 months to 31 December 2014 and its statement of financial position at that date.
Chairman of EC Pohl & Co Private Equity Limited
Chairman of Pohl Pty Ltd
Chairman & President of Bond University Rugby Club
Director of Huysamer International Holdings (Pty) Ltd
Member of Bond University, Institute of Sustainable Development & Architecture
Academic Advisory Panel
Trustee of Currumbin Wildlife Hospital Foundation
Corporate Structure
Global Masters Fund Limited is a company listed by shares that is incorporated and domiciled in Australia.
Corporate Information
Principal Activity
The Company is an investment company seeking long term capital growth through principally investing in shares in
Berkshire Hathaway Inc. listed on NYSE and Athelney Trust listed on LSE.
Review and Results of Operations
The Company made a net profit after income tax of $ 15,193 (2014: profit $ 71,201)
30 June 2015
30 June 2015
23
Page 4
Page 3
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
DIRECTORS’ REPORT
Patrick Corrigan
AM
Non-executive Director
Chairman of an international freight forwarding company for numerous years.
Experience in accounting, financial management and other commercial acumen
including investments. One of Australia’s leading contemporary art collectors. Member
of the “Order of Australia”. Recently awarded an honorary doctorate at Bond
University.
Chairman of Audit Committee
Other current directorships
Chairman of Gold Coast Regional Art Gallery
Chairman of Qantas Art Scholarship Committee
Deputy Chair of Air Freight Export Council of NSW Inc
Director of Gold Coast Art Centre
Director of Flagship Investments Limited
Director of Aboriginal Benefits Foundation Limited
Director of Community Radio Station Jazz Radio Limited
Directors’ interests in securities of the Company are set out in Note 17 of the Notes to the Financial Statements.
Company Secretary
Mr Brian Jones (B.COM CA) was appointed company secretary on 1 March 2007. He has had many years of
commercial and financial experience and has served as the company secretary and director of listed public companies
in the past.
Directors’ Meetings
The number of Board meetings and the number of meetings attended by each of the directors of the Company held
during the time the directors held office during the year are:
Director
Mr JL Addison
Dr EC Pohl
Mr P Corrigan
Meetings Held
Meetings Attended
3
3
3
3
3
3
Audit Committee Meetings
Audit Committee meetings take place before each directors meeting. The following are the number of Audit Committee
meetings and the number of meetings attended by each member:
Director
Mr JL Addison
Dr EC Pohl
Mr P Corrigan
Meetings Held
Meetings Attended
3
3
3
3
3
3
The Audit Committee resolved to recommend to the Board of Directors that the 2015 Financial Statements be adopted.
A circular resolution signed by all directors was made on 26 February 2015 approving the results for the company for the
6 months to 31 December 2014 and its statement of financial position at that date.
Corporate Information
Corporate Structure
Global Masters Fund Limited is a company listed by shares that is incorporated and domiciled in Australia.
Principal Activity
The Company is an investment company seeking long term capital growth through principally investing in shares in
Berkshire Hathaway Inc. listed on NYSE and Athelney Trust listed on LSE.
Review and Results of Operations
The Company made a net profit after income tax of $ 15,193 (2014: profit $ 71,201)
30 June 2015
Page 4
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
DIRECTORS’ REPORT
Dividends
No dividends have been declared or paid during or since the end of the financial period.
Financial Position
The net assets of the Company in dollar terms increased during the year and the net asset value per share of the
Company increased to 166.52 cents at 30 June 2015 (2014 year – 142.16 cents). The increases in share prices of
investments at 30 June 2015 compared to 30 June 2014 are were follows:
Berkshire Hathaway shares on the New York Stock Exchange increased by 7.7 %
Athelney Trust PLC shares on the London Stock Exchange decreased by 9 %
Flagship Investments Limited shares on the ASX decreased by 12 %
The drop in the rate of exchange between the US Dollar, GB Pound and Australian dollar increased the Company’s
unrealised foreign exchange gains.
Significant Changes in State of Affairs
There have been no significant changes in the state of affairs.
Future Developments, Prospects and Business Strategies
Whilst the company will maintain its exposure to global equity markets principally through investing in Berkshire
Hathaway shares, which remain unhedged, a review the Company’s investment strategy was undertaken in the light of
the strength of the Australian dollar. At the previous AGM the shareholders approved a resolution to enable the
company, whilst still maintaining the principle interest in Berkshire Hathaway shares, to invest in small to medium size
unlisted companies which are profitable and growing and have good potential outcomes for shareholders. This mandate
was expanded to allow the company to join with institutional investors in a Private Equity Fund when the opportunity
arose.
Environmental Legislation
The Company’s operations are not subject to any environmental legislation under either Commonwealth or State
Legislation.
Event Subsequent to the Reporting Date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the
operations of the Company, the results of those operations, or the state of affairs of the Company in future financial
years.
Indemnification of Officers and Auditors
During the year, a Directors and Officers insurance policy was put in place indemnifying against any liability any person
who is or has been an officer of the Company.
Proceedings of Behalf of the Company
The Company was not a party to any such proceedings during the year.
30 June 2015
Page 5
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
DIRECTORS’ REPORT
Remuneration Report
Remuneration Policy
The full Board is responsible for determining and reviewing compensation arrangements for the Directors. The Board
assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality board.
Details of the nature and amount of each element of the emoluments of each director of the Company for the year ended
30 June 2015 are as follows:
Director
Jon Addison
Manny Pohl
Patrick Corrigan
Base Fee
$
30,750
20,500
20,500
Total
$
30,750
20,500
20,500
Dr Manny Pohl was appointed Managing Director on 25 October 2013 in terms of clause 14.4 of the Company’s
constitution, the total remuneration he receives from the Company (including for his services as Managing Director)
remains unchanged.
Brian Edward Jones, the Company Secretary, is paid fees through Rothsay Chartered Accountants, a firm of which he is
a partner.
Directors’ Interest in Contracts
There are no Directors’ interests in contracts other than as disclosed in this report.
Non-audit Services
No non-audit services were performed by the auditors during the year ended 30 June 2015 (2014: none).
Auditor’s Independence Declaration
The Auditor’s Independence Declaration as required by Section 307 of the Corporations Act 2001 is set out on page 7
and forms part of this Report for the year ended 30 June 2015.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors support the
principles of corporate governance and have applied these principles where appropriate.
The Company’s corporate governance statement is contained in the following section of this annual financial report.
Signed in accordance with a resolution of directors:
_____________________________
Jonathan L Addison
Chairman
Dated this 27 August 2015
30 June 2015
Page 6
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
DIRECTORS’ REPORT
Remuneration Report
Remuneration Policy
The full Board is responsible for determining and reviewing compensation arrangements for the Directors. The Board
assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality board.
Details of the nature and amount of each element of the emoluments of each director of the Company for the year ended
30 June 2015 are as follows:
AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF GLOBAL MASTERS FUND LIMITED
Director
Base Fee
$
Total
$
Jon Addison
30,750
30,750
Manny Pohl
20,500
20,500
Patrick Corrigan
20,500
20,500
I declare that, to the best of my knowledge and belief, during the year ended 30TH June 2015 there have
Dr Manny Pohl was appointed Managing Director on 25 October 2013 in terms of clause 14.4 of the Company’s
been:
constitution, the total remuneration he receives from the Company (including for his services as Managing Director)
i.
No contraventions of the auditor independence requirements as set out in the Corporations Act
remains unchanged.
2001 in relation to the audit; and
Brian Edward Jones, the Company Secretary, is paid fees through Rothsay Chartered Accountants, a firm of which he is
a partner.
ii.
No contraventions of any applicable code of professional conduct in relation to the audit.
Directors’ Interest in Contracts
There are no Directors’ interests in contracts other than as disclosed in this report.
Non-audit Services
No non-audit services were performed by the auditors during the year ended 30 June 2015 (2014: none).
Auditor’s Independence Declaration
The Auditor’s Independence Declaration as required by Section 307 of the Corporations Act 2001 is set out on page 7
and forms part of this Report for the year ended 30 June 2015.
Joseph Pien
Chartered Accountant
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors support the
principles of corporate governance and have applied these principles where appropriate.
Date: 27 August 2015
The Company’s corporate governance statement is contained in the following section of this annual financial report.
Signed in accordance with a resolution of directors:
Joseph Pien Chartered Accountants
Suite 503
Level 5, 276 Pitt Street
Sydney NSW 2000
_____________________________
Jonathan L Addison
Chairman
Dated this 27 August 2015
30 June 2015
30 June 2015
Page 7
Page 6
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE GOVERNANCE STATEMENT
Core Business and Investment Strategy
The core business and investment strategy of the Company is to provide a vehicle for Australian investors seeking long
term capital growth through principally investing in shares in Berkshire Hathaway Inc. The Company’s policy is not to
hedge the underlying currencies of its portfolio of investments.
Corporate Governance
The Directors support and are committed to the principles of best practice in corporate governance, applied in a manner
that is suitable to the Company’s particular circumstances.
The ultimate objective of the Company’s core business and investment strategy is the achievement of long-term growth
and profitability. The Company’s corporate governance practices and procedures are directed to providing an
appropriate framework for pursuit of that objective, while protecting the rights and interests of shareholders and ensuring
that the Company is lawfully and ethically governed.
The Company has adopted the revised ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations, second edition.
Set out below are the eight principles of good corporate governance and how the Board has sought to comply with the
best practice recommendations for each. Where the Company’s corporate governance practices do not correlate with
the practices recommended by the ASX, due to the nature and scope of its activities, the reasons for any departures will
be explained.
Principle 1: Lay solid foundations for Management and Oversight.
The first principle requires the Company to establish and disclose the respective roles and responsibilities of board and
management.
Roles of the Board and Management
The Board is accountable to shareholders for the activities and performance of the Company and has overall
responsibility for furtherance of the Company’s core business and investment strategy together with its corporate
governance. There is no split of functions between individual board members. All decisions are made collectively. There
are no senior executives in the company as the company is not of a size to justify having senior executives. The key
investment decisions and instructions of the company are made by the Board and advised to the company secretary for
implementation.
Due to the nature and size of the business it has been deemed unnecessary to directly employ management personnel.
The responsibility for the administrative and accounting functions of the company has been outsourced to the chartered
accountancy firm of the company secretary. The performance and efficiency of these functions is reviewed by the Board
on an annual basis. A formal engagement notice is in place setting out the terms and conditions of the appointment.
Commitments
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a director
of the Company.
Education and induction
New directors undergo an induction process in which they are given a full briefing on the Company. In order to achieve
continuing improvement in Board performance, all directors are encouraged to undergo continual professional
development.
Independent professional advice
The Board collectively and each director has the right to seek independent professional advice at the Company’s
expense, up to predetermined limits, to assist them to carry out their responsibilities.
A copy of the Board Charter of the Company, is contained on the Company’s website.
Principle 2: Structure the Board to add value.
The principle requires the Company to have a Board of an effective composition, size and commitment to adequately
discharge its responsibilities and duties.
Composition of the Board
The Board has been formed so that it has effective composition, size and commitment to adequately discharge its
responsibilities and duties. The current Board has three directors, two of whom are non-executive and independent
(Mr Jon Addison being Chairman and Mr Pat Corrigan). The Managing Director is Dr Manny Pohl who is an executive
director and receives a director’s fee, but does not receive any remuneration as an executive director of the company.
30 June 2015
Page 8
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE GOVERNANCE STATEMENT
The names of the directors and their qualifications and experience are stated together with the term of office held by
each of them. Directors are appointed based on their industry experience and commercial acumen as well as the
specific governance skills required by the Company and the independence of their decision-making and judgment. The
CEO function of the company is undertaken by the board and key investment decisions and instructions of the company
are made by the Board and advised to the Company Secretary for implementation.
The Board’s criterion for determining the independence of a Director is whether the Director is independent of
management and free from any business or other relationship that could materially interfere with (or could reasonably be
perceived to materially interfere with) the exercise of unfettered and independent judgement.
In considering independence, the Board distinguishes between a relationship that may occasionally give rise to a
particular discrete conflict of interest that can be addressed by appropriate conflict of interest procedures, and a
relationship that may more generally impair the Director’s objectivity and conflict of mind.
The composition of the Board is reviewed on an ongoing basis to ensure that the Board has an appropriate balance of
expertise and experience. When a vacancy arises or where the Board considers that it would benefit from the services
and skills of a new director, the Board considers potential candidates with appropriate expertise and experience.
Nomination committee
The Company has not established a formal nomination committee as the principle recommends, as the Board considers
that due to the scope and nature of the Company’s activities, the whole Board should undertake this responsibility.
Criteria for selection of directors
Directors are appointed based on the specific governance skills required by the Company. Given the size of the
Company and the business that it operates, the Company aims at all times to have at least one director with experience
in the Company’s industry, appropriate to the Company’s market. In addition, directors should have the relevant blend
of personal experience in accounting and financial management and other commercial acumen.
Responsibilities of the Board
The principal function and responsibilities of the Board include the following:
Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the
Company and guide the conduct of the Board.
Strategy Formulation: setting and reviewing the overall strategy and goals for the Company and ensuring that
there are policies in place to govern the operation of the Company.
Overseeing Planning Activities: overseeing the development of the Company’s strategic plan and approving
that plan as well as budgets.
Shareholder Liaison: ensuring effective communications with shareholders through an appropriate
communications policy and promoting participation at general meetings of the Company.
Monitoring, Compliance and Risk Management: overseeing the Company’s risk management, compliance,
control and accountability systems and monitoring and directing the financial and operational performance of
the Company.
Company Finances: approving expenses in excess of those approved in the annual budget and approving and
monitoring investment performance and financial and other reporting.
Delegation of Authority: delegating appropriate powers to ensure the effective day-to-day management of the
Company and establishing and determining the power and functions of the Committees of the Board.
Full details of the Board’s role and responsibilities are contained in the Board Charter, a copy of which is contained on
the Company’s website.
Performance Review and Evaluation
Each year, the Board reviews and evaluates its performance and the individual performance of each director, including
the Chairman.
The general management and oversight of the evaluation process, including identification and formulation of appropriate
performance assessment issues and criteria is the responsibility of the Chairman. Primarily, the review is carried out
through consultation by the Chairman with each of the other directors.
Having regard to the nature of the Company’s business and the Board’s composition, the Board believes this approach
to performance evaluation is more useful than seeking to apply predetermined measurable performance indicators or
engaging an external facilitator.
Principle 3: Promote ethical and responsible decision-making.
The principle requires the Company to actively promote ethical and responsible decision-making.
30 June 2015
Page 9
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE GOVERNANCE STATEMENT
Company Code of Conduct
The Board has adopted a Corporate Code of Conduct to establish and encourage observance by the Company’s
Directors and officers of standards of ethical and responsible decision making and behaviour that are necessary to
maintain confidence in the Company’s integrity and to recognise and guide compliance with legal and other obligations
to the Company’s shareholders and other legitimate stakeholders.
The Corporate Code of Conduct is posted on the Company’s website.
Trading in company shares
The Board has adopted a Share Trading Policy that sets out principles to be observed by the Company’s directors and
officers in relation to buying, selling and dealing in the Company’s shares.
The overriding principle is that directors and officers cannot deal in the Company’s shares at any time when they
possess price sensitive information.
The Share Trading Policy also precludes directors and officers from dealing in securities included in the Company’s
investment portfolio at any time when they possess information that is price sensitive in relation to such securities or to
the detriment of the Company’s investment portfolio.
The Share Trading Policy is posted on the Company’s website.
Principle 4: Safeguard integrity in financial reporting.
The principle requires that the Company should have a structure to independently verify and safeguard the integrity of
their financial reporting.
Audit and Risk Committee
The Board has established an Audit and Risk Committee which provides assistance to the Board in fulfilling its corporate
governance and oversight responsibilities in relation to the Company’s financial reporting, internal control systems, risk
management systems, regulatory compliance and external audit.
The committee must have at least three members, therefore all of the directors currently serve on the committee. The
committee is chaired by an independent director (Mr Pat Corrigan) who is not the chairman of the Board. At least one
member must have financial expertise and some members shall have an understanding of the industry in which the
Company operates.
The principal roles of the committee are to:
Assess whether the accounting methods and statutory reporting applied by management are consistent and
comply with accounting standards and applicable laws and regulations;
Make recommendations on the appointment of the external auditors, assess their performance and
independence and ensure that management responds to audit findings and recommendations;
Discuss the adequacy and effectiveness of the Company’s internal control systems and policies to assess and
manage business risks and its legal and regulatory compliance programmes; and
Ensure effective monitoring of the Company’s compliance with its code of conduct and Board policy
statements.
The external auditor attends the audit committee meetings which are held before each board meeting. The committee is
authorised to seek information from any external party and obtain legal or other professional advice.
The composition of the audit committee is reviewed on an ongoing basis to ensure that the committee has an
appropriate balance of expertise and experience. When a vacancy arises or where the committee considers that it
would benefit from the services and skills of a new committee member the committee considers potential candidates
with appropriate expertise and experience.
The committee has established a formal Charter, a copy of which is contained on the Company’s website.
Principle 5: Make timely and balanced disclosure.
The principle requires the promotion of timely and balanced disclosure of all material matters concerning the company.
Board Policies
Continuous disclosure
The Board has put in place mechanisms designed to ensure compliance with the ASX Listing Rules Disclosure
Requirements and the company has timetables in place to ensure accountability at a senior level for that compliance.
Confidentiality
In accordance with legal requirements and agreed ethical standards, directors have agreed to keep confidential
information received in the course of the exercise of their duties and will not disclose non-public information except
where disclosure is authorised or legally mandated.
30 June 2015
Page 10
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE GOVERNANCE STATEMENT
Conflicts of interest
Directors must disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to
exist between the interests of the director and the interests of any other party in carrying out the activities of the
Company. If a Director cannot or is unwilling to remove a conflict of interest then the director must, as per the
Corporations Act 2001, absent himself or herself from the room when discussion and/or voting occurs on matters about
which the conflict relates.
Related party transactions
Related party transactions include any financial transaction between a director and the Company and are reported in
writing to each Board meeting. Unless there is an exemption under the Corporations Act 2001 from the requirement to
obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.
Principle 6: Respect the rights of shareholders.
The principle requires the Company to respect the rights of shareholders and facilitate the effective exercise of those
rights.
Shareholder communication
The Company is committed to effective shareholder communication:
Through releases to the market via ASX, the Company’s website, information mailed to shareholders and
general meetings of the Company;
Providing balanced and understandable information about the Company and its investment strategy;
Encouraging shareholders to participate in general meetings of the Company; and
Requesting the external auditor to attend the annual general meeting and be available to answer shareholder
questions about the conduct of the audit and the preparation and content of the auditor’s report.
The Company also makes available a telephone number and email address for shareholders to make enquiries of the
Company.
Principle 7: Recognise and Manage Risk.
The principle requires the Company to establish a sound system of risk oversight and management and internal control.
Identification of material business risks are discussed at the audit and risk committee meetings and a formal policy on
risk oversight and management of material business risks is being formulated and a copy will soon be available on the
Company’s website.
Investment Risk
The Board is responsible for dealing with issues arising from investment risk. By its nature the Company will always
carry risk because it must invest its capital in securities which are not risk free. The Company’s charter is to invest in
Berkshire Hathaway Inc., accepting the risks associated with that investment, and companies operating in various
sectors of the market through the medium of Berkshire Hathaway.
Attestations by Chairman and CFO
In accordance with the Board’s policy and in terms of the declaration required under section 295 A of the Corporations
Act 2001, the Chairman and CFO have prior to the Board signing the Annual Report, made the attestation that:
-
-
the integrity of the financial statements is founded on a sound system of risk management and internal compliance
and control which implements the policies determined by the Board, and
the company’s risk management and internal compliance and control system is operating efficiently and effectively
in all material respects
The Board is also not aware of any departures from best practice recommendations.
Principle 8: Remunerate fairly and responsibly.
The principle requires the Company should ensure that the level and composition of remuneration is sufficient and
reasonable and that its relationship to performance is clear.
Remuneration committee
The company has not established a remuneration committee as the principle recommends. The Board consider that due
to the scope and nature of the Company’s activities, the whole Board should undertake this responsibility. The
remuneration of the directors is reviewed annually by the Board as detailed in the Board Charter, a copy of which is
posted on the Company’s website.
30 June 2015
Page 11
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE GOVERNANCE STATEMENT
Remuneration policy
The Company does not deem it necessary to have a Senior Executive Remuneration Policy as no personnel are
employed directly. All executive and administrative services are provided to the Company by the company secretary and
his chartered accountancy firm of which he is a partner.
Non-executive director remuneration policy
Non-executive directors are paid their fees out of the maximum aggregate amount approved by shareholders for the
remuneration of non-executive directors. Non-executive directors do not receive performance based bonuses and do
not participate in equity schemes of the Company. No additional schemes for retirement benefits exist for the directors.
30 June 2015
Page 12
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2015
Revenue
Other expenses
Profit (Loss) before income tax
Income tax expense
Note
3
4
5
2015
$
200,274
(185,081)
15,193
2014
$
348,511
(277,310)
71,201
-
-
Net Profit (Loss) for the year
15,193
71,201
Other Comprehensive Income
Items that will not be reclassified to Profit or Loss
Write off of capital raising costs
Items that will be reclassified subsequently to Profit or
Loss when specific conditions are met
-
(10,490)
Changes in fair value of available-for-sale financial assets
11
1,493,997
1,143,380
Total Other Comprehensive Income for the year
1,493,997
1,132,890
Total Comprehensive Income for the year
15
1,509,190
1,204,091
30 June 2015
Page 13
These Financial Statements should be read in conjunction with the accompanying notes
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
STATEMENT OF FINANCIAL POSITION
At 30 June 2015
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Available-for-sale financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Deferred tax liabilities
Total current liabilities
Total liabilities
Net assets
Equity
Issued securities
Reserves
Accumulated losses
Total equity
Note
6
7
8
9
10
11
12
13
30 June
2015
$
53,766
1,321
7,826
62,913
30 June
2014
$
138,469
1,648
8,359
121,105
14,233,144
14,233,144
14,296,057
12,061,181
12,061,181
12,209,657
12,475
1,420,542
1,433,017
1,433,017
12,472
843,335
855,807
855,807
12,863,040
11,353,850
8,609,085
4,821,797
(567,842)
8,609,085
3,327,800
(583,035)
12,863,040
11,353,850
30 June 2015
Page 14
These Financial Statements should be read in conjunction with the accompanying notes
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2015
Balance at 1 July 2013
8,598,595
(643,746)
2,184,420
10,139,269
Issued
Securities
$
(Accumulated
Losses)
$
Reserves
$
Total
Equity
$
Profit for the Year
71,201
71,201
Change in fair value of available-for-
sale of financial assets
1,143,380
1,143,380
Write off of capital raising costs
Balance at 30 June 2014
10,490
8,609,085
(10,490)
(583,035)
3,327,800
11,353,850
Balance at 1 July 2014
8,609,085
(583,035)
3,327,800
11,353,850
Profit for the Year
15,193
15,193
Change in fair value of available-for-
sale of financial assets
1,493,997
1,493,997
Write off of capital raising costs
-
Balance at 30 June 2015
8,609,085
(567,842)
4,821,797
12,863,040
30 June 2015
Page 15
These Financial Statements should be read in conjunction with the accompanying notes
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
STATEMENT OF CASH FLOWS
For the year ended 30 June 2015
Cash flows from operating activities
Interest, distributions and dividends received
Payments to suppliers
Net cash flows (used in) / from operating activities
Cash flows from investing activities
Proceeds from sale of Flagship Investments Limited
Proceeds from sale of Berkshire Hathaway shares
Proceeds from sale of Colonial First State units
Purchase of shares in Athelney Trust plc
Net cash inflows / (outflows) in investing activities
Note
3
14
Net increase (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
6
2015
$
Inflows
(Outflows)
197,441
(184,751)
12,690
52,685
(150,078)
(97,393)
(84,703)
138,469
53,766
2014
$
Inflows
(Outflows)
171,061
(206,839)
(35,778)
284,784
5,665
(227,246)
63,203
27,425
111,044
138,469
30 June 2015
Page 16
These Financial Statements should be read in conjunction with the accompanying notes
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
Notes to the Financial Statements
1. CORPORATE INFORMATION
The Company is limited by shares and incorporated in Australia. Its shares are publicly traded on the Australian Stock
Exchange (“ASX”).
The nature of the operations and principal activities of the Company are described in Note 20.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the presentation of these finan cial statements are set out be low. These
policies have been consistently applied to all years presented unless otherwise stated.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Board and the
Corporations Act 2001.
Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards (AIFRS).
Compliance with AIFRS ensures that the financial report of Global Masters Fund Limited complies with International
Financial Reporting Standards (IFRS).
These financial statements have been prepared on an accruals basis and based on historical costs except for Available-
For-Sale Financial Assets which are measured at fair value.
(b) Foreign currency
Both the functional and presentation currency of the Company is Australian dollars ($).
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the balance sheet date.
All exchange differences in the financial statements are taken to the statement of comprehensive income with the
exception of differences on Available-For-Sale Financial Assets. These are taken directly to equity until the disposal of
the Available-For-Sale Financial Assets at which time they are recognised in the statement of comprehensive income.
(c) Trade receivables
Trade receivables generally have a 30 day term and are recognised at the original transaction amount and where
applicable converted to the equivalent Australian dollar value based on the ruling exchange rate on the day of
transaction.
(d) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less. For the purposes of the cash flow statement, cash and cash flow equivalents
consist of cash as disclosed above.
(e) Investments
All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition
charges associated with the investment. After initial recognition, investments, which are classified as available-for-sale,
are measured at fair value.
See note (n) and (o) for further information on investment assets and the accounting treatment of the impairment of
those investment assets.
(f) Payables
Liabilities for trade payables and other amounts are carried at cost which is the fair value of the consideration to be paid
in the future for goods and services received, whether or not billed to the Company.
(g) Provisions
Provisions are recognised where the Company has a present obligation (legal or constructive) as a result of past events,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the
risks specific to the liability.
A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly
recommended on or before the reporting date.
30 June 2015
Page 17
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
(h)
Income tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense
(income). Current income tax expense (income) in the income statement is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to
equity instead of the income statement when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expenses but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated on the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the
related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probably that further taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Current tax assets and liabilities are offset where a legal enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(i) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(j) Earnings per share
Basic earnings (or loss) per share is calculated as net profit (loss) attributable to members, adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
(k) Comparatives
Where necessary comparatives have been reclassified for consistency with current year disclosures.
30 June 2015
Page 18
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
(l) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
Interest
Interest revenue is recognised as the interest accrues (using the effective interest method which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount
of the financial asset.
Dividends and distributions
Dividend revenue is recognised when the right to receive the dividend has been established.
(m) Finance costs
Finance costs are recognised as an expense when incurred.
(n) Available-For-Sale Financial Assets (“Investments”)
The company does not hold any securities for short term trading purposes. Therefore the investment portfolio is
classified as Available-For-Sale Financial Assets. After initial recognition investments are measured at fair value with
gains or losses being recognised as a separate component of equity until the investment is derecognised or until the
investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is
recognised in profit or loss. The fair value of investments that are actively traded in organised financial markets is
determined by reference to quoted market bid prices at the close of business on the balance sheet date. For
investments in unlisted unit trusts, fair value is determined by reference to redemption value.
Derecognition of investments
On disposal of an investment the gain or loss on the net proceeds received less the original purchase cost of the
investment is recorded through the statement of comprehensive income.
(o)
Impairment of investments
If there is objective evidence that an investment is impaired, an amount comprising the difference between its cost (net
of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in
the income statement, is transferred from equity to the income statement. Reversals of impairment losses for equity
instruments classified as available-for-sale are not recognised in profit.
(p) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgement incorporated into the financial report based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the group.
Key Estimates – Impairment
The Company assesses impairment at each year end by evaluating conditions specific to the group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-
use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
(q) New Accounting Standards and Interpretations not yet mandatory or early adopted
A number of new standards, amendments and interpretations are effective for annual periods beginning after 1 July
2013.
New and amended standards dealing with Consolidated Financial Statements, Separate Financial Statements, Joint
Arrangements, Disclosure of interests in Other Entities and Fair Value Measurement have been released. These
standards are effective from 1 January 2013. The Company does not plan to adopt these standards early nor does it
expect there to be any recognition of measurement impacts as a result of the application of these new standards.
30 June 2015
Page 19
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
3. REVENUE
Dividends Received
Distributions Received
Interest Received
Gain on Sale of Berkshire Hathaway
Gain on Sale of Colonial Units
Gain on Sale of Flagship Investments
197,237
4
200
4. OTHER EXPENSES
ASX and share registry costs
Loss on realisation of Colonial Units
Realised Foreign Exchange Loss
Administration Costs
2015
$
2014
$
197,441
-
-
2,833
200,274
171,061
176,484
966
-
348,511
(18,380)
(26,144)
-
-
(166,701)
(185,081)
-
(71,359)
(179,807)
(277,310)
5.
INCOME TAX EXPENSE/(INCOME)
A reconciliation between the income tax expense and the product of accounting profit before income tax multiplied by the
Company’s applicable income tax rate is as follows:
Accounting profit before tax
Prima facie (tax benefit) from ordinary activities before income tax at 30%
(2015: 30%)
Add Tax losses not recognized
Tax expense shown in income statement
The applicable weighted average effective tax rates are:
6. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
2015
$
2014
$
15,193
71,201
4,558
(4,558)
-
-
51,028
2,738
53,766
21,360
(21,360)
-
-
134,100
4,369
138,469
7.
TRADE AND OTHER RECEIVABLES (CURRENT)
GST receivable
1,321
1,648
8. OTHER CURRENT ASSETS
Prepayments
7,826
8,359
30 June 2015
Page 20
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
9. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Investments are classified as available-for-sale financial assets
Securities listed on a prescribed stock exchange at fair value:
- Shares
Unlisted investments at fair value
14,230,253
12,058,873
2,891
2,308
14,233,144
12,061,181
10. TRADE AND OTHER PAYABLES (CURRENT)
Trade payables and accruals
12,475
12,472
Trade payables are non-interest bearing and are normally settled
on 30 day terms.
11. CHANGES IN FAIR VALUE OF AVAILABLE-FOR-SALE FINANCIAL
ASSETS
2015
$
2014
$
(a) Gross change in fair value of available-for-sale assets
2,071,204
1,986,715
(b) Deferred tax on changes in fair value of available-for-sale financial
assets
577,207
1,493,997
843,335
1,143,380
The calculation of deferred tax takes into account carried forward tax losses and is shown under current liabilities
( c ) Deferred tax liability shown in balance sheet 1,420,542 843,335
12.
ISSUED SECURITIES
2015
2014
Ordinary shares fully paid
$ 8,609,085
$ 8,598,595
Write back of capital raising costs
-
10,490
Total share capital
8,609,085
8,609,085
Number of shares in issue
8,578,596
8,578,596
13. RESERVES
Investment revaluation reserve
Nature of reserve
The investment revaluation reserve is used to accumulate unrealised capital profits and losses. The reserve can only be
used in limited circumstances for payment of dividends.
30 June 2015
Page 21
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
14. CASH FLOW INFORMATION
Reconciliation of the net gain (loss) after tax to the net
cash flows from operations
Gain (Loss) after income tax
Adjust for non cash items: - income tax
-gain on sale of investments
- loss on withdrawal of funds from Colonial First State
- loss on foreign exchange
Adjusted Gain (Loss) for the year
Changes in assets and liabilities
- Decrease / (Increase) in receivables
- Decrease / (Increase) in other current assets
- (Decrease) / Increase in payables
Net cash flow (used in) / from operating activities
2015
$
2014
$
15,193
71,201
(2,833)
(176,484)
-
12,360
327
3
12,690
71,359
(33,924)
54
(1,908)
(35,778)
15. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares outstanding during the year.
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
Net gain (loss) used in calculating basic and
diluted earnings per share
Total comprehensive income used in calculating
total comprehensive income per share
Weighted average number of ordinary shares on
issue used in the calculation of basic earnings per
share
Total ordinary shares on issue at 30 June 2015
2015
$
2014
$
15,193
71,201
1,509,190
1,204,091
8,578,596
8,578,596
8,578,596
8,578,596
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
0.18
0.18
0.83
0.83
Total comprehensive income per share (cents per share)
17.59
14.04
16. CONTINGENT LIABILITIES
The Directors of the Company are of the view that no contingent liabilities exist as at the date of this report.
30 June 2015
Page 22
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
17. KEY MANAGEMENT PERSONNEL COMPENSATION
(a) Details of Key Management Personnel for all of the financial year unless otherwise shown were:
Directors
JL Addison
Chairman (non-executive), appointed 19 April 2005
EC Pohl
Managing Director (executive), appointed 19 April 2005
P Corrigan
Director (non-executive), appointed 29 November 2006
(b) Compensation of Key Management Personnel
Compensation policy
The Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for the
key management personnel. The Board assesses the appropriateness of the nature and amount of emoluments of such
officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit.
Executive personnel
The Managing Director Dr Manny Pohl is an executive director but only gets remunerated as a director as has been the
case in prior years. The Company’s non-executive directors are Jon Addison and Pat Corrigan.
Non-executive director compensation
In accordance with the Company’s Constitution and the ASX Listing Rules, the aggregate amount of remuneration
payable to the non-executive Directors (including the Managing Director) in any year is determined from time to time by
shareholders in General Meeting. The last determination was at a General Meeting on 10 May 2006 when shareholders
fixed an aggregate amount not exceeding $150,000.
Within the limit of the aggregate amount determined by the shareholders, the Board determines the remuneration for
non-executive Directors. The remuneration arrangements for the non-executive Directors are reviewed annually by the
Board.
The Board assesses the appropriateness of the remuneration for non-executive Directors having regard to market
practice, the duties and accountability of the non-executive Directors and the objective of maintaining a balanced Board
which has appropriate expertise and experience, at a reasonable cost to the Company.
The compensation of non-executive Directors (including the Managing Director) for the year ending 30 June 2015 is
shown in the table below:
Jon Addison
Emmanuel Pohl
Patrick Corrigan
Total
Total
2015
2014
2015
2014
2015
2014
2015
2014
Base Fee
$
30,750
30,750
20,500
20,500
20,500
20,500
71,750
71,750
Total
$
30,750
30,750
20,500
20,500
20,500
20,500
71,750
71,750
Number of shares held by key management personnel or related parties
Jon Addison
Emmanuel Pohl (*)
Patrick Corrigan
Balance
1 July 2014
Net
Change
Balance
30 June 2015
-
-
-
-
-
-
-
(*)
In addition to the securities owned directly by Dr Pohl, there are 4,639,049 shares registered in entities
associated with E.C. Pohl & Co Pty Limited, of which he is a director and shareholder.
30 June 2015
Page 23
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
18. RELATED PARTY TRANSACTIONS
There were no related party transactions during the year.
Key management personnel
Rothsay Chartered Accountants provides accounting, taxation and secretarial services to the company at normal
commercial rates. Brian Jones, Company Secretary of Global Masters Fund Limited, is a partner.
Fees Charged
2015
$
56,375
2014
$
63,499
30 June 2015
Page 24
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
19. AUDITOR’S REMUNERATION
The auditor of the Company is Joseph Pien
Amounts received or due and receivable by Joseph Pien for:
- audit of the half year and annual financial report of the Company
No other services were provided by the auditor
20. SEGMENT INFORMATION
2015
$
2014
$
11,275
11,275
10,250
10,250
The Company is domiciled and incorporated in Australia.
The Company’s principal activity is investment in quoted equities, principally Berkshire Hathaway Inc listed on the New
York Stock Exchange and other securities on a worldwide basis. Details of these investments are disclosed in the List of
Investments on page 30. The Company operates in only one business and geographic sector.
21. FINANCIAL INSTRUMENTS
Financial risk management
The Company’s financial instruments consist mainly of deposits with banks, accounts receivable and payable and listed
and unlisted securities. The main risks the Company is exposed to through the financial instruments are interest rate
risk and currency risk.
(a)
Interest rate risk
The Company’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities
at balance date, both recognised and unrecognised at the reporting date, are as follows:
2015
Financial assets
Cash and cash equivalent
All other financial assets and liabilities are non - interest
bearing – apart from investment in Colonial Wholesale Funds
which on average earned 2.5 %
Effective interest
rate
%
6 months
or less
$
Total
$
3.05
55,611
1.696
30 June 2015
Page 25
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2015
21. FINANCIAL INSTRUMENTS (CONT)
(b) Currency risk
The Company’s investment po rtfolio includes investments in USA and UK, cash on de posit and interest receiv able
denominated in US dollars and Pound s sterling. As such, the Company’s balance sheet can be affected significantly by
movements in exchange rates. T he Company’s current poli cy is not to hedge its investme nt portfolio. The carrying
value of these foreign currency denominated assets at balance date was as follows:
Cash and cash equivalents
Investments
(c) Credit risk
2015
Carrying
amount
AUD $
2,682
2014
Carrying
amount
AUD $
4,369
11,256,816
11,259,498
8,618,462
8,622,831
The Company is not a trading entity . The maximum exposure to credit risk at balance d ate in relation to each clas s of
financial assets (excluding investments) is the carrying amount of those asset s as indicated in the balance sheet. The
Company has no commercial debtors and re ceivables are due from reputable companies listed on the w orld’s stock
exchange or major financial banking institutions.
With respect to credit risk on c ash and investments, the Co mpany’s exposure to credit ris k arises from d efault of the
counter party, with a maximum exposure equal to the carrying amount of those investments.
The Company’s business activities do not necessitate the requirement for collateral.
(d) Net fair value
The following methods and assumptions are used to determine the net fair values of financial assets and liabilities:
Cash, cash equivalents and short-term investments: The carrying amount approximates fair value because of their
short term to maturity.
Trade receivables and payables: The carrying amount approximates fair value as the time to receipt or pay ment is
usually less than 30 days.
Listed shares: The current quoted market bid price approximates fair value and the carrying amount.
The carrying value of all the fin ancial assets and liabilities of the Company as disclosed in the balance sheet and notes
to the financial statements is the same as the net fair value.
(e) Sensitivity Analysis
The following table illu strates sensitivities to the Group’s ex posures to chan ges in interest rates, ex change rates and
commodity and equity process. The table indicates the impact on how profit and equity values reported at balance date
would have been affected by changes in the relevant risk variable that management considers to b e reasonably
possible. These sensitivities assume that the movement in a particular variable is independent of other variables.
Year Ended 30 June 2015
+/- 2% in interest rates
+/- 5% in $A/US$
+/- 10% in listed investments
22. SUBSEQUENT EVENTS
Profit
$
+/-2,000
Equity
$
+/-350,000
+/-1,423,314
No matters or occurrences have arisen subsequent to balance date that materially effects the operatio ns of the
Company.
23. ECONOMIC DEPENDENCY
All revenues consisting of interest, dividends and distributions are dependent on the profitability of those entities in which
investments are held.
30 June 2015
Page 26
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Global Masters Fund Limited, the directors of the Company declare
that:
1.
the financial statements and notes, as set out on pages 13 - 26 , are in accordance with the Corporations Act 2001
and:
a.
comply with Accounting Standards which, as stated in accounting policy Note 1 to the finan cial statements,
constitutes compliance with International Financial Reporting Standards (IFRS); and
give a true and fair view of the financ ial position as at 30 June 2015 and of the performan ce for the y ear
b.
ended on that date of the Company;
2.
3.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable; and
the directors h ave been given the declarations required by section 295A of t he Corporations Act 200 1 from the
Chief Executive Officer and Chief Financial Officer.
On behalf of the Board
Jonathan L Addison
Chairman
Sydney
27 August 2015
30 June 2015
Page 27
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
INDEPENDENT AUDIT REPORT TO THE MEMBERS OF GLOBAL MASTERS
FUND LIMITED
Report on the Financial Report
I have audited the accompanying financial report of
Global Masters Fund Limited , which comprises the
statement of financial posit ion as at 30 J une 2015, the statement of comprehensive income, stat ement of
changes in equity and statement of cash flow s for the year then e nded, notes comprising a summary of
significant accounting policies and other explanatory information and the directors' declaration.
Directors' Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
is free from material misstat ement, whether due to fraud or error. In Note 2 (a), the directors als o state, in
accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards. (IFRS)
Auditor's Responsibility
My responsibility is to express an opinion on the financial report based on my audit. I conducted my audit in
accordance with Australian Auditing Standards. Those standards require that I comply with relevant ethical
requirements relating to audit engagements and plan an d perform the audit to obtain reasonable assurance
about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclos ures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
of the financial report that gives a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of ex pressing an opinion on the effe ctiveness of the entity's
internal control. An audit als o includes evaluating the appropriateness of accounting policies use d and the
reasonableness of accou nting estimates made by the directors as well as evaluating t he overall
presentation of the financial report.
I believe that the audit evidence I have obt ained is sufficient and appropriate to provide a basis for my audit
opinion.
Independence
In conducting my audit, I have complied with the independence requirements of the Corporations Act
2001. I confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of Global Masters Fund Limited, would be in the same terms if given to the
directors as at the time of this auditor's report.
30 June 2015
Page 28
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
INDEPENDENT AUDIT REPORT TO THE MEMBERS OF GLOBAL MASTERS
FUND LIMITED
Auditors Opinion
In my opinion:
(a)
the financial report of Global Masters Fund Limited. is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the company's financial pos ition as at 30 June 2015 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and t he Corporations Regulations 2001;
and
(b)
the financial report also co mplies with International Financial Reporting Standards as dis closed in
Note 2(a)
Report on the Remuneration Report
I have audite d the Remun eration Report included on page 6 of the directors' rep ort for the year ended 30
June 2015. The directors of the company are respo nsible for the preparation and presentation of the
Remuneration Report in acc ordance with section 300A of the Corporations Act 2001. My responsibility is to
express an opinion on the Remuneration Report, based on my audit conducted in accordance with Australian
Auditing Standards.
Opinion
In my opinion, the Remuneration Report of Global Masters Fund Limited. for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
Joseph Pien CA
Chartered Accountant
Dated
27 August 2015
30 June 2015
Page 29
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
SHAREHOLDER INFORMATION
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as
follows:
(a) Distribution of shares (as at 10 August 2015)
The number of holders, by size of holding:
Number of holders
Number of Shares
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001
and over
86
130
66
60
8
350
49,753
471,199
557,214
1,484,784
6,015,646
8,578,596
Included above are 5 shareholders holding less
than a marketable parcel of shares (513 shares)
(b) Twenty largest shareholders (as at 10 August 2015)
The names of the twenty largest holders of quoted Ordinary Shares are:
1 Citicorp Nominees Pty Limited
2 Mara Super Pty Ltd
3 Lic Investments Pty Ltd
4 Tradlaw Pty Ltd
5 Securities & Estates Pty Ltd
6 Mr Peter Lees
7 Mr Franco Di Lorenzo & Mrs Angela Di Lorenzo
8 Peter IH Wong Pty Ltd
9 One Managed Invt Funds Ltd
10
J Barlow Consultants Pty Ltd
11 Mrs Sylvia Maria Valmadre
12 Howzat Services Pty Ltd
13 Ritchie Family Super Pty Ltd
14 Mr William Paul Chun Tie & Ms Moo
15 Mrs Lynette Joy White
16 Mr Kenneth Murray Bartley
17 Poseidon Developments Pty Ltd
18 Ms Helen-Louise Brown
19 Dr Robert John Lugton
20 Mr Charles Ronald Smith
%
4,639,049 54.08
390,000 4.55
310,000 3.61
180,000 2.10
140,519 1.64
120,737 1.41
120,067 1.40
120,000 1.40
115,274 1.34
86,473 1.01
60,000 0.70
50,000 0.58
50,000 0.58
48,623 0.57
41,000 0.48
31,602 0.37
31,260 0.36
30,000 0.35
30,000 0.35
30,000 0.35
Total
6,624,604 77.22
Total shares on issue at 13 August 2015
8,578.596
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
EC Pohl & Co Pty Ltd & associated entities
4,639,049
54.08
(d) Voting rights
On a show of hands every Shareholder present in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Number of Ordinary Shares
% of Ordinary
Shares
30 June 2015
Page 30
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
INVESTMENTS
( a ) List of investments as at 30 June 2015
United States
Berkshire Hathaway Inc “A” Stock
Berkshire Hathaway Inc “B” Stock
United Kingdom
Athelney Trust PLC
Australia
Flagship Investments Limited
Total Listed Investments
Non-listed Australia
Colonial First State Wholesale Income Fund
Total portfolio
( b ) Portfolio transactions and brokerage
Shares
held
27
15,800
A$
value
7,201,758
2,800,180
275,509
1,254,877
2,170,392
2,973,437
14,230,252
1,812
2892
14,233,144
% of
total
50.6
19.7
8.8
20.9
100.0
-
100.0
There were 5 (2014: 3) transactions in securities during the year on which brokerage of $ 650 (2014: $ 560) was
paid.
30 June 2015
Page 31
GLOBAL MASTERS FUND LIMITED
ACN 109 047 618
CORPORATE INFORMATION
Directors
Jonathan Addison (Chairman)
Emmanuel Clive Pohl (Managing Director)
Patrick Corrigan
Company Secretary
Brian Edward Jones
Rothsay Chartered Accountants
Level 1
12 O’Connell Street
Sydney NSW 2000
Registered Office
Level 1
12 O’Connell Street
Sydney NSW 2000
Tel: 02 8815 5400
Fax: 02 8815 5401
Share Register
Boardroom Pty Ltd
Level 12 225 George Street
SYDNEY NSW 2000
Auditor
Joseph Pien – Chartered Accountant
Suite 503, Level 5
276 Pitt Street
SYDNEY NSW 2000
Internet Address
www.globalmastersfund.com.au
30 June 2015
Page 32
GLOBAL MASTERS FUND LIMITED
GLOBAL MASTERS FUND LIMITED
Global Masters Fund Limited
ABN 84 109 047 618
Tel: 1300 552 660 (from within Australia)
Int: +61 2 8815 5400
Fax: + 61 2 8815 5401
Email: info@globalmastersfund.com.au
Internet: www.globalmastersfund.com.au
Level 1, 12 O’Connell Street Sydney NSW 2000 Australia
PO Box 542 Sydney NSW 2001 Australia
Annual Report
30 June 2015