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Blue Sky AlternativeGlobal Masters Fund Limited
ABN 84 109 047 618
Level 12,
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
www.globalmastersfund.com.au
Annual Report
30 June 2020
FINANCIAL YEAR END
30 June 2020
ANNUAL GENERAL MEETING
The Annual General Meeting of
Global Masters Fund Limited:
WILL BE HELD AT:
The office of
McCulllough Robertson Lawyers
Level 11, Central Plaza Two
66 Eagle St
Brisbane QLD 4000
TIME:
2.00pm (QLD Time)
DATE:
Friday 30 October 2020
INVESTING IN GLOBAL
MASTERS FUND LIMITED
Investors can purchase shares in
Global Masters Fund Limited through
the Australian Securities Exchange.
ASX code: GFL
Global Masters Fund Limited
ABN 84 109 047 618
Registered in NSW
12 May 2004
GLOBAL MASTERS FUND LIMITED DIRECTORS (from left to right)
Dr Emmanuel (Manny) Pohl AM, Murray d’Almeida, Jonathan Addison and Patrick Corrigan AM
CORPORATE DIRECTORY
GLOBAL MASTERS FUND LIMITED
ABN 84 109 047 618
REGISTERED IN NEW SOUTH WALES
12 MAY 2004.
Dr Emmanuel (Manny) C Pohl AM
BOARD OF DIRECTORS
Murray H d’Almeida
Non-Executive Chairman
Managing Director
Patrick Corrigan AM
Non-Executive Director
Jonathan L Addison
Non-Executive Director
Jason Pohl
Alternate Director
COMPANY SECRETARY
Brian E Jones
REGISTERED OFFICE
Level 12
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
Toll Free: 1800 352 474
Tel:
Fax:
+61 (0) 7 5644 4400
+61 (0) 7 5574 1457
POSTAL ADDRESS
P O Box 7536
Gold Coast Mail Centre
BUNDALL QLD 9726
AUDITORS
WPIAS Pty Ltd
HQ@Robina
Suite 41, Level 4
58 Riverwalk Avenue
Robina QLD 4226
Toll Free:
1300 737 760
International: +61 (0) 2 9290 9600
+61 (0) 0 9279 0664
Fax:
Email:
enquiries@boardroomlimited.com.au
INVESTMENT MANAGER
EC Pohl & Co Pty Ltd
ACN 154 399 916
Level 12
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
Tel:
Fax:
+61 (0) 7 5644 4400
+61 (0) 7 5574 1457
SHARE REGISTRY
Boardroom Pty Limited
GPO Box 3993
SYDNEY NSW 2001
SOLICITORS
McCullough Robertson Lawyers
Level 32
MLC Centre
19 Martin Place
SYDNEY NSW 2000
WEBSITE ADDRESS
www.globalmastersfund.com.au
FOLLOW US
/GlobalMastersFund
/global-masters-fund
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TABLE OF CONTENTS
Chairman’s Report
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Investments
Corporate Directory
Global Masters Fund
HIGHLIGHTS FOR 2020
Highlights for
the year ending
June 2020
Major Investments
June 2020
UK Portfolio Performance (in GBP terms) was a positive 12.3%,
outperforming the FTSE which decreased by 16.9%.
The Net Tangible Assets (NTA) value of the Company per share decreased
by 9.5% before recognising the net deferred tax liability. By comparison the
ASX All Ordinaries Index decreased by 10.4% over the twelve months ended
30 June 2020.
BRK
FSI
BIP BCI
ATY
Other UK
Cash
OVERVIEW
COMPANY PROFILE
Global Masters Fund Limited (the “Company”) was listed on the ASX in 2006 with the strategy to provide a vehicle for Australian
Investors, seeking long-term capital growth through investing in Berkshire Hathaway Inc - listed on the New York Stock Exchange
(NYSE) and other global investments.
The portfolio is managed by EC Pohl & Co Pty Ltd which has a highly noted funds management investment team. The composition
and performance of the investment portfolio is monitored by the Board of Directors, which comprises business people with many
years of experience in business, investment and funds management.
OBJECTIVES
The investment objectives of Global Masters Fund Limited are:
To achieve medium to long-term capital growth and income through investing in listed international companies; and
To preserve and enhance the NTA backing per share after allowing for inflation.
INVESTOR BENEFITS
The benefits for investors in Global Masters Fund Limited are:
Reduced share investment risk through a diversified investment portfolio;
Professional and disciplined management of an investment portfolio;
No entry or exit charges made by the Company; and
Easy access to information via the Company’s website www.globalmastersfund.com.au.
INVESTMENT MANAGER
The management of the Company’s investment portfolio is undertaken by EC Pohl & Co Pty Ltd, which also provides administration
support. Dr Manny Pohl AM is the Managing Director and major Shareholder of EC Pohl & Co Pty Ltd. Information on the Investment
Manager is available from www.ecpohl.com.
ENVIRONMENT, SOCIAL, GOVERNANCE
A business can only maintain a sustainable competitive advantage if it adequately respects all stakeholders in the business and
environment in which it operates. Companies which are not engaged in sustainable practices, will not be able to generate above
average economic returns throughout their life cycle. To this end, the Manager’s investment process scrutinises companies to see if
they have the appropriate, and sensible Governance structures in place as well as incorporating sustainable practices into their day
to day operations. Companies that don’t meet standards of respect and integrity with regard to compensation structures, internal
controls, accounting treatment, rules, relationships, systems and process throughout the organisation - are not included in the
portfolio.
Global Masters Fund Limited
4
CHAIRMAN’S REPORT
Dear Shareholder,
I am pleased to present the 15th Annual Chairman’s Report of
Global Masters Fund Limited for the 2019/20 financial year.
THE YEAR IN REVIEW
After a relatively uneventful first six months from July 2019 to
December 2019, global equities markets experienced the
fastest 30% drawdown in history during the March 2020
quarter due to widespread fear caused by the COVID-19
pandemic. This was closely followed by the largest 50-day
advance after strict quarantine measures and massive
government stimuli were launched in the June 2020 quarter.
In the US, the S&P 500 finished 5.4% higher for the year after
a technology stock rally drove an increase of 20.0% in the June
quarter. In the UK the FTSE-100 decreased 16.9% while in
Australia, the ASX All Ordinaries decreased by 10.4% over the
financial year. The volatility had a mixed impact on the Global
Masters Fund portfolio, performance for the year was a
negative 7.2%.
The portfolio of actively managed UK investments continues
to deliver strong returns, outperforming the FTSE by 29.2
percentage points over the year.
While the primary
investment in Berkshire Hathaway declined by 14.7% in AUD
terms and was a significant detractor in the Global Masters
portfolio. For Berkshire directly, the losses attributed to
airline investments due to the COVID-19 induced lockdowns,
has caused a significant amount of bad press. Despite the
market recovery in the last quarter, the reported record high
cash position of Berkshire has been defended by Charlie
Munger who said that he and Warren Buffett “just want to
get through the typhoon”. We note their July 2020
acquisition of natural gas pipeline and storage assets and it
will be interesting to see what other moves are made during
this tumultuous period.
During the year, the Company acquired an investment in BIP
BCI Worldwide Flexible Fund to provide an exposure to
emerging markets. This represents 5.9% of the value of the
portfolio of the Company and has proved to be a sound
investment decision.
THE MARKET OUTLOOK
The year 2020 will forever be synonymous with COVID-19, a
global coronavirus pandemic that has impacted levels of
society like never seen before and the isolation measures
implemented have caused havoc on the earning power of
many businesses throughout the world.
There is a high degree of uncertainty in forecasts for the next
12 months and beyond. An optimistic scenario has economic
output growing slowly as businesses slowly recover, while a
pessimistic view would see a continuation of the pandemic,
prompting strict lockdowns without governments being able
to support economies sufficiently.
Global Masters Fund Limited
5
At present, the Australian economy is tracking closer to the
optimistic scenario, there is further government spending
planned and a commitment from the federal reserve to
maintain monetary policy to support growth. But a positive
outlook should not be taken for granted and it is prudent for
businesses to continue innovating and improving while
maintaining sufficient cash reserves.
Over the past few years, the Board has been of the view that
it should be the aim of the Company to become an actively
managed truly global fund. This process commenced when
an active portfolio was established in the UK. Given the stellar
performance, this has proved to be a wise decision.
THE INVESTMENT MANAGEMENT TEAM
investment
incorporating
The Investment Manager is actively pursuing and evaluating
global
ESG
opportunities
(Environmental, Social and Governance) principles, that will
deliver excellent returns for Shareholders. In this regard, I
wish to express my personal appreciation and that of the
Board as a whole, to our Investment Manager EC Pohl & Co
and the team led by Dr Manny Pohl. The Company’s success
could not have been achieved without the disciplined
execution of the investment process undertaken by him and
the very committed individuals within the team.
THE BOARD
I wish to thank my fellow Board members for their support
and input throughout the past year. In particular I would like
to thank Jon Addison who joined the Board in April 2005 and
will be retiring after the upcoming AGM on 30 October 2020.
In a climate of volatility where there are new risks to consider,
I am confident that the rigour and commitment from our
Board will ensure the best interests of Shareholders and other
stakeholders are managed and protected.
In conclusion, long-term, supportive Shareholders are the
backbone of any business and
I sincerely thank our
Shareholders for their on-going support. I, together with my
Board, are humbled to serve our dedicated Shareholders.
Yours sincerely
Murray d’Almeida
Chairman
DIRECTORS' REPORT
Your Directors present their report on Global Masters Fund Limited for the financial year ended 30 June 2020.
1. DIRECTORS
The following persons were Directors of Global Masters Fund Limited from the beginning of the financial year until the date of
this report, unless otherwise stated: M d’Almeida, Dr E Pohl AM, J Addison, P Corrigan AM and Jason Pohl is an Alternate Director
to Dr Manny Pohl.
2.
INFORMATION ON DIRECTORS
Murray H d’Almeida
FAICD
Dr Emmanuel (Manny) C Pohl AM
B.Sc (Eng), MBA, DBA, FAICD, MSAFAA, F Fin
Chairman, Non-Executive Director
Managing Director
Experience and expertise
Director since 3 November 2016
Chairman since 9 November 2018.
Over 37 years of diverse national and
international business experience. Founded the
Retail Food Group and developed a presence in
seven overseas countries. Subsequently has
maintained operating and board positions
within a range of financial services, mining,
commercial, academic, government and
sporting businesses and organisations.
Other Current directorships
Chairman of ECP Emerging Growth Limited
Director Triple Energy Limited
Deputy Chancellor Southern Cross University
Chairman of Board of Trustees of Currumbin
Wildlife Foundation
Member of Gold Coast Light Rail Business
Advisory Board
Chairman Zooz Pty Ltd
Former Listed Company directorships
in last 3 years
Chairman IncentiaPay Limited (Sept 2019)
Chairman EnviroSuite Limited (Sept 2016)
Interest in Shares
2,578 indirect
Experience and expertise
Managing Director since the inception of the
Company in April 2005.
Extensive experience in the funds management
industry.
Other current directorships
Managing Director of Flagship Investments Limited
Managing Director of Athelney Trust Plc
Chairman of EC Pohl & Co Pty Ltd
Chairman and President of Bond University Rugby Club
Director of Bond University Limited
Director of Huysamer International Holdings (Pty) Ltd
Trustee of Currumbin Wildlife Hospital Foundation
Former Listed Company directorships
in last 3 years
Barrack St Investments Limited (June 2017)
Interest in Shares
Directly Held: 6,250
Indirect: 5,755,061 ordinary shares
Has a relevant interest in shares in the Company
over which he holds a Power of Attorney
arrangement with a number of Shareholders.
Global Masters Fund Limited
6
Jonathan L Addison
B Ec, CFTP (Snr), FGIA, FCIS, MAICD
Non-Executive Director
Patrick Corrigan AM
HonD (Bond University)
Non-Executive Director
Jason C Pohl
B.Com, LLB, MBA
Alternate Director
Experience and expertise
Non-Executive Chairman from 19 April
2005 to 9 November 2018.
Over 34 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 Pricewaterhouse Coopers and
Manager at Sedgwick Noble Lowndes.
Other Current directorships
Chairman of Gardior Pty Ltd
Chairman and Member of Investment
Committee of Centaur Property Funds
Management Ltd
Director CHIF Pty Lt
Director Ballarat Water Pty Ltd
Former Listed Company directorships
in last 3 years
None
Interest in Shares
Nil
Experience and expertise
Director since 29 November 2006.
Extensive experience in accounting,
financial management and other
commercial acumen, including
investments. Chairman of an international
freight forwarding company for numerous
years.
Other current directorships
Emeritus Chairman of Gold Coast Regional
Art Gallery
Chairman of Qantas Art Scholarship
Committee
Director of Aboriginal Benefits Foundation
Limited
Director of National Portrait Gallery in
Canberra
Experience and expertise
Appointed an Alternate Director to
Dr Manny Pohl on 20 June 2016.
Jason has eight years of professional
experience in fundamental bottom-up
investment research at
ECP Asset Management Pty Ltd.
Originally pursuing a legal career, Jason
spent his initial stages of his professional
career working for Ashurst (previously
Blake Dawson) before being admitted as a
Legal Practitioner in the NSW Supreme
Court.
Other current directorships
Director of The Tabu Vodka Co Pty Ltd
Alternate Director of Athelney Trust Plc
Former Listed Company directorships
in last 3 years
None
Former Listed Company directorships
in last 3 years
None
Interest in Shares
1,000
Interest in Shares
1,000
Global Masters Fund Limited
7
DIRECTORS’ REPORT (Continued)
3. PRINCIPAL ACTIVITIES
The principal activity of the Company is investing in Berkshire
Hathaway Inc on NYSE and a diversified global portfolio of
investments.
4. REVIEW OF OPERATIONS
At 30 June 2020, the Net Assets of the Company decreased by
$1,682,474 (7.5%) over the twelve-month period. The major
contributor to this was the 14.7% decline in the value of Berkshire
Hathaway shares which represented 61% of the portfolio at 30 June
2020. Against this, however, was the positive 12.3% performance of
the UK portfolio (in GBP terms) over the past twelve months which is
an outstanding result when compared to the FTSE-100 which
declined by 16.9%. The UK investments comprise 21% of the portfolio
and given the active management were monitored closely
throughout the COVID-19 induced volatility.
Net profit which includes the realised and unrealised gains on the UK
portfolio increased by $68,927 on the prior year due to the
into account the
performance noted above and after taking
performance fee payable. While Total Comprehensive Income
decreased by $3,217,693 due to the market movement in the long
term investment holdings including Berkshire Hathaway. It is
important to note that the loss in Total Comprehensive Income is
generated through unrealised market movements that would only be
crystallised when the assets are sold.
COVID-19 has had an impact on every element of society and has
posed a significant challenge for businesses and governments across
the globe. It is expected that the current market volatility will
continue, therefore asset values will continue to fluctuate. It is also
expected that companies will be protective of capital and therefore
future dividends could be reduced from previous levels. While in the
short-term earnings could be reduced the Company continues to
focus on the long term potential of its investments and the
opportunities that present themselves during this period.
5. SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
During the year, the company expanded its global portfolio to include
emerging markets with the investment in the BIP BCI Worldwide
Flexible Fund listed on the Johannesburg Stock Exchange. There were
no other significant changes in the state of affairs of the Company
during the financial year.
6. MATTERS SUBSEQUENT TO THE END OF THE
FINANCIAL YEAR
No other matter or circumstance not otherwise dealt with in the
Director’s Report or Financial Report, which has arisen since the end
of the year that has significantly affected, or may significantly affect
the operations of the Company, the results of those operations or the
state of affairs of the Company in future financial years.
Global Masters Fund Limited
8
7. LIKELY DEVLOPMENTS AND EXPECTED
RESULTS FROM OPERATIONS
There are no planned changes to the principle activities. Any
general decline in equity markets may have an adverse effect on
results in future years.
8. ENVIRONMENTAL ISSUES
The Company’s operations are not regulated by any significant
environmental regulation under a law of the Commonwealth or of a
State or Territory.
9. EARNINGS PER SHARE
Based on profit after income tax.
Basic earnings per share
Diluted earnings per share
2020
Cents
0.64
0.64
2019
Cents
(0.00)
(0.00)
its
The Company records fair value movement for some of
investments
in Other Comprehensive Income, therefore Total
Comprehensive Income is a more appropriate base for detailing
earnings per share.
2020
Cents
(15.69)
2019
Cents
14.32
Comprehensive earnings per
share
See Note 16 of the Financial Report.
10. COMPANY SECRETARY
Brian Jones B.Com, FCA
Brian Jones is a member of the Institute of Chartered Accountants
and is a registered tax agent. He has been Company Secretary of
Global Masters Fund Limited since 1 March 2007. He has over 39
years’ experience in the accounting and finance industries and is
currently Company Secretary of one other Listed Investment
Company.
11. MEETINGS OF DIRECTORS
The number of Directors’ meetings attended by each of the Directors
of the Company during the financial year were:
BOARD MEETINGS
Director
Eligible to attend
Attend
M H d’Almeida
E C Pohl AM
P Corrigan AM
J L Addison
4
4
4
4
4
4
3
4
12. REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main
headings:
(A) Principles used to determine the nature and amount of
No remuneration consultants were engaged during the year.
The per annum remuneration of the Directors remains unchanged
from the previous year:
remuneration
(B) Details of remuneration
(C)
Service agreements
(D) Share-based compensation
(E) Related Party Transactions
(F) Equity Instrument Disclosure relating to Key Management
Personnel
(A) Principles used to determine the nature and
amount of remuneration
Fees and payments to Directors reflect the demands which are made
on, and the responsibilities of, the Directors.
DETAILS OF REMUNERATION
Chairman
Other Directors
$45,000
$40,000
There is no performance based remuneration for Directors.
(B) Details of remuneration
Details of the remuneration of each Director of Global Masters
Fund Limited and the executives of the Company are set out in the
following table.
Short-term Benefits
Director
Year
Fees
Performance
Fees
M d’Almeida *
Non-executive Chairman
Dr E C Pohl AM
Managing Director
J L Addison*
Non-executive Director
P Corrigan AM *
Non-executive Director
Total Directors Remuneration
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
$
46,125
43,563
40,000
40,000
41,000
43,562
41,000
41,000
168,125
168,125
$
-
-
-
-
-
-
-
-
* Inclusive of non-claimable GST amount
Non-
monetary
Benefits
$
-
-
-
-
-
-
-
-
Post-
Employment
Super
Equity
Shares
Options
Total
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
46,125
43,563
40,000
40,000
41,000
43,562
41,000
41,000
168,125
168,125
(C) Service agreements
As the Company does not employ any staff, there are no employment service agreements entered into by the Company. The Company Secretary
is a self-employed Contractor and the Managing Director is employed by the Investment Manager – EC Pohl & Co Pty Ltd.
(D) Share-based compensation
No share-based compensation exists.
(E) Related Party Transactions
The following transactions occurred with other related parties:
Expenses paid or payable by the Company to:
–
–
–
–
A Performance Fee and Management Fee was payable in accordance with the Management
Services Agreement as detailed in Note 22.
Dr E C Pohl has an interest in the transaction as during the year Dr E C Pohl was a Director of
EC Pohl & Co Pty Ltd
EC Pohl & Co Pty Ltd for Performance Fee
EC Pohl & Co Pty Ltd for Management Fee.
All related party transactions are made on an arm’s length basis using the standard terms and conditions.
2020
$
2019
$
293,912
51,608
68,560
50,925
Global Masters Fund Limited
9
DIRECTORS’ REPORT (Continued)
(F) Equity Instrument Disclosure relating to Key Management Personnel
The number of shares in the Company held during the financial year by each Director of Global Masters Fund Limited, including their related
parties is set out below. There were no shares granted during the year as compensation.
DIRECTOR
Balance At The Start Of
The Year
Received During The Year By
Exercise Of Rights
Other Changes During
The Year
Balance At the End
Of The Year
M H d’Almeida
Dr E C Pohl AM *
P Corrigan AM
J L Addison
2,578
6250
1,000
NIL
-
-
-
-
-
-
-
-
2,578
6,250
1,000
NIL
*
In addition to the securities owned directly by Dr EC Pohl, there are 5,755,061 shares registered
in entities associated with EC Pohl & Co Pty Ltd, of which he is a Director and Shareholder.
END OF REMUNERATION REPORT (AUDITED)
13. GENERAL TRANSACTIONS
18. NON-AUDIT SERVICES
Other than the Director’s remuneration, the Company does not
directly contract with any of the Directors.
14. LOANS
There are no loans issued to any of the Directors (30 June 2019 –
Nil).
15. OPTIONS
No options have been issued during or since the financial year (30
June 2019 – Nil).
16. INSURANCE OF OFFICERS AND/OR AUDITORS
During the financial year the Company insured the Directors and
Officers against certain liabilities as permitted by the Corporations
Act 2001. The insurance policy prohibits disclosure of the nature of
the cover, the amount of the premium, the limit of liability and other
terms.
The Company has entered into an agreement for the purpose of
indemnifying Directors and Officers, to the extent permitted by law,
against any liability (including the costs and expenses of defending
actions for an actual or alleged liability) incurred in their capacity as
a Director and Officer of the Company.
The Company has not during or since the financial year indemnified
or paid any insurance premiums to indemnify the auditors.
17. PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under Section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceeding to which the Company is
a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the
Company with leave of the Court under Section 237 of the
Corporations Act 2001.
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the Company are important.
There have been no amounts paid or payable to the auditors for
non-audit services provided during the year.
The Directors have considered the position and are satisfied that
the provision of any non-audit services (if necessary in future) is
compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The Audit and
Risk Committee is satisfied that the provision of any non-audit
services by the auditor, would not compromise the auditor
independence requirements of the Corporations Act 2001 for the
following reasons:
All non-audit services would be reviewed by the Audit and
Risk Committee to ensure they do not impact the impartiality
and objectivity of the auditor; and
None of the services undermine the general principles
relating to auditor independence as set out in APES 110,
including reviewing or auditing the auditor’s own work, acting
in a management or a decision-making capacity for the
Company, acting as advocate for the Company or jointly
sharing economic risk and rewards.
A copy of the Auditor’s Independence Declaration as required
under section 307C of the Corporation Act 2001 is set out on page
11.
Dr Emmanuel (Manny) C Pohl
Managing Director
28 August 2020.
Global Masters Fund Limited
10
AUDITOR’S INDEPENDENCE DECLARATION
Global Masters Fund Limited
11
CORPORATE GOVERNANCE STATEMENT: FOR THE YEAR ENDED 30 JUNE 2020
The Directors of Global Masters Fund Limited are committed to excellence in corporate governance. By adopting the ASX
Corporate Governance Council’s Corporate Governance Principles and incorporating industry best practice the Company has
built a framework that supports our business performance and enhances transparency and accountability which ultimately
protects the interests of Shareholders.
Below is a list of the Company’s Corporate Governance Framework documents set out against the relevant ASX Governance
Principles and Recommendations, the details of which are available on the Company’s Website. The full Corporate Governance
Statement for the year ending 30 June 2020 is also available on the website, at
http://www.globalmastersfund.com.au/corporategovernance/.
ASX GOVERNANCE PRINCIPLES
RELEVANT DOCUMENT/INFORMATION
Principle 1:
Lay solid foundation for management oversight
Board Charter
Whistleblower Policy
Principle 2:
Structure the Board to add value
Principle 3:
Act ethically and responsibly
Principle 4:
Safeguard integrity in corporate reporting
Principle 5:
Make timely and balanced disclosure
Board Charter
Code of Conduct
Share Trading Policy
Board Charter
Code of Conduct
Disclosure Policy
Principle 6:
Respecting the rights of security holders
Communications Policy
Privacy Policy
Principle 7:
Recognise and manage risk
Principle 8:
Remunerate fairly and responsibly
Board Charter
Board Charter
Global Masters Fund Limited
12
The Corporate Governance Statement explains the extent to which the Company complies with the ASX Corporate Governance
Principles and Recommendations including how the policies above support Corporate Governance in the Company. Under the “if not,
why not” approach the Board provide explanations as to why a particular recommendation is not appropriate to its circumstances.
For clarity, the Board would like to highlight below the recommendations that have not been adopted and the reasons behind the
decision:
ASX GOVERNANCE PRINCIPLES
COMPLIANCE STATEMENT
Principle 1:
Lay solid foundations for management and
oversight
Recommendation 1.5:
Gender Diversity
Compliant except for 1.5:
Non-Compliant
The Board seeks to develop a culture of diversity whereby a mix of skills and diverse
backgrounds are employed maximizing the benefits of a collection of view-points. At this
point in time and through previous recruitment processes gender diversity has not been
achieved, however there is complete commitment to creating further diversity at the next
opportunity.
Principle 2:
Structure the Board to add value
Recommendation 2.1:
Establish a Nomination Committee
Principle 3:
Act ethically and responsibly
Principle 4:
Safeguard integrity in corporate reporting
Principle 5:
Make timely and balanced disclosure
Principle 6:
Respect the rights of security-holders
Principle 7: Recognise and manage risk
Recommendation 7.1:
Risk Committee
Recommendation 7.3:
Internal audit function
Principle 8: Remunerate fairly and
responsibly
Recommendation 8.1 :
Remuneration Committee
Recommendation 8.3:
Equity-based remuneration
Compliant except for 2.1:
Non-Compliant
The Company has not established a formal Nomination Committee, as the Board considers
that, due to the specific scope and nature of the Company’s activities, the whole Board
should undertake the responsibility.
Compliant
Compliant
Compliant
Compliant
Compliant except for 7.1 and 7.3:
Non-Compliant
The Board dissolved the Audit & Risk Committee, citing that the benefits of a separate
committee were not being realised due to the composition of the committee and overlap
with the Board. The Board has reviewed the Board Charter and its processes to ensure risk
management is thoroughly managed.
Non-Compliant
The Company does not have an internal audit function given the size and nature of the
Company. Instead, the Board liaises closely with the Company’s external auditor to
identify potential improvements to the financial risk management and internal control
process. The Board also interrogates the internal compliance and external audit of the
Manager.
Compliant except for 8.1 and 8.3:
Non-Compliant
The Company does not have a Remuneration and Nomination Committee, instead the full
Board develops the remuneration policy balancing the need to attract high quality
Directors, establishing appropriate incentives and commercial control of expenses. The
establishment of a committee would not provide further efficiency to the operation of the
Board given the Board size.
Not Applicable
The Company does not have an equity-based remuneration scheme and does not intend to
establish one. Recommendation 8.3 is not applicable.
Global Masters Fund Limited
13
FINANCIAL REPORT
CONTENTS OF FINANCIAL REPORT
Page
15
16
17
18
19
29
30
34
35
39
Financial Report
Statement of Profit or Loss and Other Comprehensive
Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Investments
Corporate Directory.
This financial report covers Global Masters Fund Limited as an individual entity.
There are no controlled entities.
Global Masters Fund Limited is a company limited by shares, incorporated and
domiciled in Australia. Its registered office and principal place of business is:
Global Masters Fund Limited
Level 12
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
The financial report was authorised for issue by the Directors on 28 August 2020.
A description of the nature of the entity’s operations and its principal activities is
included in the Operating and Financial Review.
Through the use of the internet, we have ensured that our corporate reporting is
timely, complete and available globally at minimum cost to the Company. All media
releases, financial reports and other information are available from the Company at
the above address or from our website:
www.globalmastersfund.com.au
Global Masters Fund Limited
14
GLOBAL MASTERS FUND LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Net unrealised gains/(losses) on investments through profit or loss
Other expenses
Profit/(Loss) before income tax
Income tax benefit/(expense)
Net Profit for the year
Other Comprehensive Income
Notes
2020
$
2019
$
5
6
7
326,549
456,675
361,158
(6,656)
(679,798)
(471,457)
7,909
60,672
68,581
(21,438)
21,092
(346)
Realised and Unrealised gains on Financial Assets taken to equity, net of tax
7c
(1,751,055)
1,535,565
Total Comprehensive Income for the year
(1,682,474)
1,535,219
Earnings per share:
Basic earnings per share
Diluted earnings per share
Comprehensive Income:
Comprehensive earnings per share
Cents
0.64
0.64
Cents
(0.00)
(0.00)
16
16
16
(15.69)
14.32
The accompanying Notes form part of these Financial Statements.
Global Masters Fund Limited
15
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Trade and Other Receivables
Other Assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Financial Assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables
TOTAL CURRENT LIABILIITES
NON-CURRENT LIABILITIES
Deferred Tax Liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated losses
TOTAL EQUITY
.
Notes
2020
$
2019
$
8
9
10
11
12
13
14
15
133,283
14,109
21,422
168,814
632,741
21,255
19,652
673,648
23,634,995
23,634,995
25,360,011
25,360,011
23,803,809
26,033,659
315,476
315,476
90,525
90,525
2,641,837
2,641,837
2,957,313
3,414,164
3,414,164
3,504,689
20,846,496
22,528,970
12,871,873
8,037,279
(62,656)
20,846,496
12,871,873
9,788,334
(131,237)
22,528,970
The accompanying Notes form part of these Financial Statements.
Global Masters Fund Limited
16
GLOBAL MASTERS FUND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
2019
Note
Issued
Share
Capital
$
Retained Profits/
(Accumulated
Losses)
$
Asset
Revaluation
Reserve
$
Asset
Realisation
Reserve
$
Balance at 1 July 2018
12,871,873
(504,698)
8,626,576
Total Comprehensive Income
Profit/(Loss) for the Year
Other Comprehensive Income
Total Comprehensive Income
Other
Reclassify available for sale financial assets to
financial assets held at fair value through
profit or loss
Transfer from accumulated losses to reserves
-
-
-
-
-
(346)
-
-
1,535,565
(346)
1,535,565
410,915
(410,915)
(37,108)
37,108
Balance at 30 June 2019
12,871,873
(131,237)
9,788,334
-
-
-
-
-
-
-
2020
Issued
Share
Capital
$
Retained Profits/
(Accumulated
Losses)
$
Asset
Revaluation
Reserve
$
Asset
Realisation
Reserve
$
Balance at 1 July 2019
12,871,873
(131,237)
9,788,334
Total Comprehensive Income
Profit/(Loss) for the Year
Other Comprehensive Income
Total Comprehensive Income
Other
Transfer to realisation reserve
-
-
-
-
68,581
-
-
(1,751,055)
68,581
(1,751,055)
-
-
-
-
Total
Equity
$
20,993,751
(346)
1,535,565
1,535,219
-
-
22,528,970
Total
Equity
$
22,528,970
68,581
(1,751,055)
(1,682,474)
-
(325,126)
325,126
-
Balance at 30 June 2020
12,871,873
(62,656)
7,712,153
325,126
20,846,496
The accompanying Notes form part of these Financial Statements.
Global Masters Fund Limited
17
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Distributions and Dividends received
Interest received
Payments to suppliers and employees
Net cash provided by/(used in) operating activities
24
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of Investments
Payments for Investments
Net cash (used in)/provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities
Notes
2020
$
2019
$
257,360
44
(456,843)
(199,439)
306,549
897
(474,116)
(166,670)
2,257,577
(2,576,035)
(318,458)
3,340,967
(2,981,029)
359,938
-
-
Net increase/(decrease) in cash and cash equivalents held
Effects of foreign currency exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(517,897)
18,439
632,741
Cash and cash equivalents at end of year
8
133,283
193,268
(57,529)
497,002
632,741
The accompanying Notes form part of these Financial Statements.
Global Masters Fund Limited
18
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
The functional and presentation currency of Global Masters Fund
Limited is Australian dollars. Its shares are publicly traded on the
Australian Securities Exchange (“ASX”).
1. BASIS OF PREPARATION
The financial statements are general purpose financial statements
that have been prepared
in accordance with the Australian
Accounting Standards and the Corporations Act 2001.
These financial statements and associated notes comply with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
The financial statements have been prepared on an accruals basis and
are based on historical costs modified, where applicable, by the
measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
Significant accounting policies adopted in the preparation of these
financial statements are presented below and are consistent with
prior reporting periods unless otherwise stated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(a) Revenue and Other Income
Revenue is recognised when the amount of the revenue can be
measured reliably, it is probable that economic benefits associated
with the transaction will flow to the Company and specific criteria
relating to the type of revenue as noted below, has been satisfied.
Revenue is measured at the fair value of the consideration received
or receivable and is presented net of returns, discounts and rebates.
All revenue is stated net of the amount of goods and services tax
(GST).
Interest Revenue
Interest is recognised using the effective interest method.
Dividend Revenue
Dividends are recognised when the entity’s right to receive payment
is established.
(b)
Income Tax
The income tax expense recognised in the statement of profit or loss
and other comprehensive income comprises of current income tax
expense plus deferred tax expense.
Current tax is the amount of income taxes payable (recoverable) in
respect of the taxable profit (loss) for the year and is measured at the
amount expected to be paid to (recovered from) the taxation
authorities, using the tax rates and laws that have been enacted or
substantively enacted by the end of the reporting period. Current tax
liabilities (assets) are measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Global Masters Fund Limited
19
Deferred tax assets and liabilities are measured at 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 (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for all deductible temporary
differences and unused tax losses to the extent that it is probable that
taxable profit will be available against which the deductible
temporary differences and losses can be utilised.
Current and deferred tax is recognised as income or an expense and
included in profit or loss for the period except where the tax arises
from a transaction which is recognised in other comprehensive
income or equity, in which case the tax is recognised in other
comprehensive income or equity respectively.
(c) Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of
goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payable are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is
included as part of receivables or payables in the statement of
financial position.
Cash flows in the statement of cash flows are included 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 is classified as operating cash flows.
(d) Cash and Cash Equivalents
Cash and cash equivalents comprises cash on hand, demand deposits
and short-term investments which are readily convertible to known
amounts of cash and which are subject to an insignificant risk of
change in value.
(e) Financial Instruments
The company holds investments in listed equities as its principle
business, these investments are classified as either financial assets
at fair value through profit or loss (FVPL) or financial assets at fair
value through other comprehensive income (FVOCI). The election
is on the basis of two primary criteria:
-
-
The contractual cash flow characteristics of the financial
asset; and
The business model for managing financial assets
Investments held in the actively managed UK portfolio have been
designated as financial assets at fair value through profit or loss
while all other investments, which are held for medium to long
term capital appreciation, have been designated as financial assets
at fair value through other comprehensive income.
(f) Trade and Other 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 when the Company has a legal or
constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result and that
outflow can be reliably measured.
Provisions for Dividends
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the entity,
on or before the end of the reporting period but not distributed at the
end of the reporting period.
(h) Share Capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share options which
vest immediately are recognised as a deduction from equity, net of
any tax effects.
(i) New and Amended Accounting Standards adopted
AASB 16: Leases has an initial application date of 1 January 2019.
The Company does not have any leases to which AASB 16 is
applicable and accordingly the standard had no impact on the
Company.
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
(e) Financial Instruments (continued)
Financial Assets - Recognition
The Company’s investments are recognised on the date that the
company commits itself to the purchase of the asset (ie trade date
accounting is adopted).
Investments are measured at fair value, which is determined by
quoted prices in an active market.
Financial Assets - Subsequent Measurement
Securities held in the portfolio are revalued to market values at
each reporting date. For investments designated as financial assets
at fair value through profit or loss the realised and unrealised net
gains or losses on the portfolio are recognised each period in the
profit or loss. For investments designated as financial assets at fair
value through other comprehensive income the realised and
unrealised net gains or losses on the portfolio are recognised in
other comprehensive income.
Loans and Receivables
Loans and receivables are recognised initially at fair value and
subsequently measured at amortised cost, less provision for doubtful
debts. Trade receivables are due for settlement no more than 30 days
from the date of recognition.
Collectability of loans and receivables is reviewed on an ongoing basis.
Debts which are known to be uncollectible are written off. A provision
for impairment of trade receivables is established when there is
objective evidence that the Company will not be able to collect all
amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the
debtor will enter bankruptcy or financial reorganisation, and default
or delinquency in payments (more than 30 days overdue) are
considered indicators that the trade receivable is impaired.
The amount of the provision is the different between the asset's
carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate. Cash flows relating
to short-term receivables are not discounted if the effect of
discounting is immaterial. The amount of the provision is recognised
in the profit or loss in other expenses.
Fair Value Estimation
The fair value of financial instruments traded in active markets (such
as publicly traded derivatives and securities) is based on quoted
market prices at the Statement of Financial Position date. The quoted
market price used for financial assets held by the Company is the
current bid price. The appropriate quoted market price for financial
liabilities is the current bid price.
The nominal value less estimated credit adjustments of trade
receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the Company for
similar financial instruments.
Global Masters Fund Limited
20
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
(j) New Accounting Standards and Interpretations
The AASB has issued new and amended Accounting Standards and
Interpretations that have mandatory application dates for future
reporting periods. The following table summarises those future
requirements, and their impact on the Company where the standard
is relevant:
Conceptual Framework for Financial Reporting
Effective
date
1 January
2020
The revised Conceptual Framework contains new
definition and recognition criteria as well as new
guidance on measurement particularly relating to
the new Accounting Standards. Where the
Company has relied on the existing framework in
determining
for
transactions, events or conditions that are not
otherwise dealt with under the Australian
Accounting Standards, the Company may need to
review
revised
framework.
such policies under
accounting
policies
the
its
At this time, the application of the Conceptual
Framework is not expected to have a material
impact on the Company’s financial statements.
AASB 1059 Service Concession Arrangements: Grantors
Effective
Date
1 January
2020
AASB 1059 is relevant for public sector agencies
that are grantors
in a service concession
arrangement with private sector entities. It
requires a grantor to recognise a service
concession asset, and a corresponding liability in
relation to a service concession arrangement
when the grantor controls the underlying asset.
3. CRITICAL ACCOUNTING ESTIMATES AND
JUDGEMENTS
(a) Key Estimates
There are no key assumptions or sources of estimation uncertainty
that have a risk of causing material adjustment to the carrying
amounts of certain assets and liabilities within the next annual
reporting period as investments are carried at their market value.
(b) Key Judgements
The preparation of financial reports in conformity with Australian
Account Standards require the use of certain critical accounting
estimates. This requires the Board to exercise their judgement in the
process of applying the Company's accounting policies.
The carrying amount of certain assets and liabilities are often
determined based on estimates and assumptions of future events. In
accordance with AASB 112 Income Taxes, deferred tax liabilities and
deferred tax assets have been recognised for Capital Gains Tax (CGT)
on the unrealised gains/losses in the investment portfolio at current
tax rates.
As the Directors do not intend to dispose of the portfolio, the tax
liability/benefit may not be crystallised at the amount disclosed in
Note: 13. In addition, the tax liability/benefit that arises on the
disposal of these securities may be impacted by changes in tax
legislation relating to treatment of capital gains and the rate of
taxation applicable to such gains/losses at the time of disposal.
The Company has an investment process which is anticipated will
deliver medium to long-term capital growth - minimum investment
period is three to five years.
The deferred tax asset has been carried forward as it believed that
this process will deliver growth over this period to utilise the deferred
tax asset.
The introduction of AASB 1059 will not have an
impact on the Company.
4. OPERATING SEGMENTS
Segment Information
AASB 17 Insurance Contracts
Effective
Date
1 January
2021
AASB 17 replaces three standards that currently
deal with insurance: definitions of insurance
(AASB 4), general insurance (AASB 1023) and life
insurance (AASB 1038). The concept behind the
standard is to account for profit from insurance
contracts in a way that considers risk associated
with an insurance contract. There are three
methods of accounting under the new standard,
with the applicable method determined by the
nature of the insurance contracts issued.
The introduction of AASB 17 will not have an
impact on the Company.
The Company operates in the investment industry. Its core business
focuses on investing in International equities to achieve medium to
long-term capital growth and income.
Operating segments have been determined on the basis of reports
reviewed by the Managing Director. The Managing Director is
considered to be the chief operating decision maker of the Company.
The Managing Director considers the business from both a product
and geographic perspective and assesses performance and allocates
resources on this basis. The Managing Director considers the business
to consist of just one reportable segment.
Global Masters Fund Limited
21
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
5. REVENUE AND OTHER INCOME
Dividends Received
Interest Received
Gain on Sale of Other UK Investments
Realised Foreign Exchange Gain
6. OTHER EXPENSES
Auditors Remuneration
ASX and Share Registry costs
Management Fees
Performance Fees
Director Fees
Administration Costs
7.
INCOME TAX EXPENSE
(a) Reconciliation of income tax to accounting profit
Accounting profit/(loss) before tax
Prima facie tax payable on ordinary activities before income tax rate at 30.0% (2019 – 30.0%)
Adjust for tax effect of:
-
Tax losses at 30 June 2018 converted from 27.5% to 30% tax rate
-
Timing differences of transactions
-
Fully Franked Dividends received
- Amendment to prior year return
Rebateable Fully Franked Dividends
Tax expense/(credit) shown in Profit and Loss statement
(b) The components of tax benefit comprise:
(Decrease)/increase in deferred tax asset
Decrease/(increase) in deferred tax liability
Income tax (expense)/credit
(c) Amounts recognised directly in Other Comprehensive Income
Aggregate current and deferred tax arising in the reporting period and not recognised in Profit
or Loss, but directly debited or credited in Other Comprehensive Income.
Amount before tax
Tax (Expense)/Credit at 30.0% (2019: 30.0%)
Adjustment for prior year deferred tax on unrealised gains converted from 27.5% to 30.0%
Adjusted for tax effect of available losses
Amount Net of Tax
8. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
Balance as per Statement of Cash Flows
Reconciliation of cash
Cash and Cash Equivalents reported in the Statement of Cash Flows are reconciled
to the equivalent items in the Statement of Financial Position as follows:
Cash and Cash Equivalents
Global Masters Fund Limited
22
2020
$
2019
$
249,988
44
19,663
56,854
326,549
15,391
48,307
51,608
293,912
168,125
102,455
679,798
7,909
2,373
-
(30,646)
14,129
-
(46,528)
(60,672)
27,667
33,005
60,672
302,460
897
21,834
131,484
456,675
15,409
48,508
50,925
68,560
168,125
119,930
471,457
(21,438)
(6,431)
(2,479)
19,234
13,483
45
(44,944)
(21,092)
35,282
(14,190)
21,092
(2,462,709)
738,813
-
(27,159)
(1,751,055)
2,490,416
(747,125)
(264,546)
56,820
1,535,565
52,330
80,953
133,283
42,275
590,466
632,741
133,283
632,741
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
9. TRADE AND OTHER RECEIVABLES
CURRENT
Dividends Receivable
GST receivable
Total current trade and other receivables
10. OTHER ASSETS
CURRENT
Prepayments
Total Other Assets
11. FINANCIAL ASSETS
Non-Current Financial Assets
Notes
2020
$
2019
$
7,104
7,005
14,109
14,476
6,779
21,255
21,422
21,422
19,652
19,652
Listed Investments classified as fair value through profit or loss
Listed Investments classified as fair value through other comprehensive income
19
19
Total Available-for-sale Financial Assets
5,001,752
18,633,243
4,312,618
21,047,393
23,634,995
25,360,011
12. TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Accrued expenses
13. DEFERRED TAX
Deferred Tax Assets
Deferred Tax Liabilities
Net deferred tax liabilities adjusted for deferred tax assets
(a) Deferred Tax Assets attributable to:
- Accruals
-
Tax losses
(b) Deferred Tax Liabilities attributable to:
- Unfranked dividend receivable
- Unrealised Gain on Financial Assets
Global Masters Fund Limited
23
8,663
306,813
315,476
5,346
85,179
90,525
13(a)
13(b)
(667,909)
3,309,746
2,641,837
(667,401)
4,081,565
3,414,164
(3,645)
(664,264)
(667,909)
(3,705)
(663,696)
(667,401)
2,131
3,307,615
3,309,746
4,343
4,077,222
4,081,565
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
14. ISSUED CAPITAL
(a) Share Capital
10,723,159 Ordinary Shares (2019: 10,723,159)
(b) Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
2020
$
2019
$
12,871,873
12,871,873
(c) Movements in ordinary share capital
Date
30 June 2018
Details
Balance
30 June 2019
Balance
Nil Movement in the year
Nil Movement in the year
30 June 2020
Balance
15. RESERVES
(a) Asset Revaluation Reserve
Number of Shares
Price
$
10,723,159
-
10,723,159
-
10,723,159
12,871,873
-
12,871,873
-
12,871,873
7,712,153
9,788,334
325,126
-
The asset revaluation reserve records the unrealised capital profits and losses, net of deferred tax, on
investments classified as fair value through other comprehensive income.
(b) Asset Realisation Reserve
The asset realisation reserve records realised gains and losses from the sale of investments, net of tax,
which are transferred from the Asset Revaluation Reserve, net of dividends paid from reserves
Total Reserves
8,037,279
9,788,334
16. 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
Weighted number of all shares, including convertible securities
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Total Comprehensive Income per share (cents per share)
68,581
(346)
(1,682,474)
1,535,219
10,723,159
10,723,159
10,723,159
10,723,159
Cents
0.64
0.64
(15.69)
Cents
(0.00)
(0.00)
14.32
Global Masters Fund Limited
24
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
17. FINANCIAL RISK MANAGEMENT
The Company is exposed to a variety of financial risks through its
use of financial instruments.
The Company’s overall risk management plan seeks to minimise
potential adverse effects due to the unpredictability of financial
markets.
The Company does not speculate in financial assets.
(b) Currency Risk
The Company‘s investment portfolio includes investments in USA, UK
and South Africa, cash on deposit and
interest receivable
denominated in US dollars and Pounds Sterling. As such, the
Company's balance sheet can be affected significantly by movements
in exchange rates. The Company's current policy is not to hedge its
investment portfolio.
The most significant financial risks to which the Company is
exposed to are described below:
The carrying value of these foreign currency denominated assets at
balance date was as follows:
Specific risks
Liquidity risk
Credit risk
Market risk - currency risk, interest rate risk and price risk
Financial instruments used
The principal categories of financial instruments used by the
Company are:
Trade receivables
Cash at bank
Investments in listed shares
Trade and other payables
(a)
Interest Rate Risk
The Company's exposure to interest rate risk, which is the risk that a
financial instrument’s value will fluctuate as a result of changes in
market interest rates and the effective weighted average interest
rates on classes of financial assets and financial liabilities, is as
follows:
Effective Interest Rate
Financial Assets
Cash and cash equivalents
6 Months or less
Financial Assets
Cash and cash equivalents
Total Financial Assets
2020
%
2019
%
0.0
0.1
2020
$
2019
$
133,283
133,283
632,741
632,741
The Company does not rely on interest returns as a source of income,
so the interest rate risk is deemed extremely low.
All other financial assets and liabilities are non-interest bearing.
Carrying Amount
Cash and cash equivalents
Investments
Total
(c) Credit risk
2020
AUD $
80,898
2019
AUD $
590,410
21,425,726
23,065,985
21,506,624
23,656,395
The Company is not a trading entity. The maximum exposure to credit
risk at balance date in relation to each class of financial assets
(excluding investments) is the carrying amount of those assets as
indicated in the balance sheet. The Company has no commercial
debtors and receivables are due from reputable companies listed on
the world's stock exchange or major financial banking institutions.
With respect to credit risk on cash and investment, the Company's
exposure to credit risk arises from default 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
payment is usually less than 30 days.
Listed shares:
The closing quoted market price approximates fair value and the
carrying amount.
The carrying value of all the financial assets and liabilities of the
Company as disclosed in the Statement of Financial Position and
Notes to the Financial Statements is the same as the net fair value.
Global Masters Fund Limited
25
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
17. FINANCIAL RISK MANAGEMENT (continued)
19. FAIR VALUE MEASUREMENTS
(e) Sensitivity Analysis
The following table illustrates sensitivities to the Company’s exposure
to changes in interest rates, exchange rates and commodity and
equity prices. 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 be
reasonably possible. These sensitivities assume that the movement
in a particular variable is independent of other variables.
At 30 June 2020, the effect on profit and equity as a result of changes
in the interest rate, exchange rate or equity prices with all other
variables remaining constant would be as follows:
6 Months or less
Change in profit +/- 2%
in interest rates
Change in equity +/- 5%
in exchange rates
2020
$
+/- 1,372
2019
$
+/- 7
The Company measures the following assets and liabilities at fair
value on a recurring basis:
- Financial Assets at fair value through Other Comprehensive
Income (FVTOCI).
- Financial Assets at fair value through Profit or Loss (FVTPL).
Fair value hierarchy
AASB 13 Fair Value Measurement requires all assets and
liabilities measured at fair value to be assigned to a level in the
fair value hierarchy as follows:
Level 1 Unadjusted quoted prices in active markets for identical
assets or liabilities that the entity can access at the
measurement date.
Level 2
Inputs other than quoted prices included with level 1
that are observable for the asset or liability, either
directly or indirectly.
+/- 1,075,331
+/- 1,182,820
Level 3 Unobservable inputs for the asset or liability.
+/- 10% in listed investments
+/- 2,363,500
+/- 2,536,001
The table below shows the assigned level for each asset and liability
held at fair value by the Company:
(f)
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due.
The objective of the Company is to ensure as far as possible that it
will always have sufficient liquidity to meet its liabilities when due,
under both normal and distressed conditions.
Prudent liquidity risk management implies maintaining sufficient cash
and marketable Australian listed equity securities.
The Manager controls liquidity risk by continuously monitoring the
balance between equity securities and cash or cash equivalents and
the maturity profiles of assets and liabilities to ensure this risk is
minimal.
18. CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The capital structure of the
Company consists of equity attributable to members of the Company.
The Board monitors the return on capital, which is defined as net
operating income divided by total Shareholders’ Equity. The Board
also monitors the level of dividends to Shareholders.
The capital of the Company is invested by the Investment Manager in
accordance with the investment policy established by the Board. The
Company has no borrowings. It is not subject to any externally
imposed capital requirements.
There were no changes in the Company’s approach to capital
management during the year.
30 June 2020
Recurring fair value measurements -
Listed Equity Securities
Level 1
Level 2
Level 3
Total
FVTPL
$5,001,752
FVTOCI
$18,633,244
-
-
-
-
$5,001,752
$18,633,244
30 June 2019
Recurring fair value measurements -
Listed Equity Securities
Level 1
Level 2
Level 3
Total
FVTPL
$4,312,618
FVTOCI
$21,047,393
-
-
-
-
$4,312,618
$21,047,393
Transfers between levels of hierarchy
There were no transfers between levels of the fair value
hierarchy.
Highest and best use
The current use of each asset measured at fair value is
considered to be its highest and best use.
Global Masters Fund Limited
26
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
20. AUDITORS REMUNERATION
Remuneration of the auditor of the Company for:
Audit or reviewing the financial statements
Total remuneration of auditors
21. RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
EC Pohl & Co Pty Ltd for Management Fee and Performance Fee (payable in accordance with
the Management Services Agreement as detailed in Note 22).
Management Fee
Performance Fee
Total Fees Paid
Dr E C Pohl has an interest in the transaction as during the year Dr E C Pohl was a Director,
employee and Shareholder of EC Pohl & Co Pty Ltd.
22. MANAGEMENT SERVICES AGREEMENT
2020
$
2019
$
15,391
15,391
15,409
15,409
51,608
293,912
345,520
50,925
68,560
119,485
In accordance with a Management Services Agreement which was signed in May 2017, the Company agreed to engage the
Manager to provide primary and secondary management services.
Primary services are only provided for the actively managed portion of the portfolio and include:
1) managing the investment of the Company’s portfolio, including keeping it under review;
2)
ensuring investments by the Company are only made in authorised investments;
3)
complying with the investment policy of the Company; and
4)
identifying, evaluating and implementing the acquisition and disposal of authorised investments.
Secondary management services include:
(i)
provide the Company with quarterly investment performance reporting;
(ii) promoting investment in the Company by the general investment community;
(iii) providing investor relationship services; and
(iv) provision of accounting, human resources, corporate and information technology services support.
The agreement may be terminated if:
a)
b)
c)
d)
e)
either party ceases to carry on business, or
either party enters into liquidation voluntarily or otherwise, or
either party passes any resolution for voluntary winding-up, or
a receiver of the property of either party, or any part thereof, is appointed, or
the Shareholders of the Company at an abnormal meeting called in for that purpose, resolve by binding resolution to
terminate the operations, or
if the Company provides written notice to the Manager in the event of any material and substantial breach of the agreement
by the Manager or if the Manager fails to remedy a breach of this agreement within 14 days following written notice of the
breach.
if the Manager provides written notice to the Company in the event of any material and substantial breach of the agreement
by the Company or if the Company fails to remedy a breach of this agreement within 14 days following written notice of the
breach.
f)
g)
Under the agreement the Manager will receive a management fee of 1% per annum on the actively managed portion of the portfolio.
In addition, a performance fee, payable annually in arrears, equal to 20% of the amount by which the Company’s actively managed
portfolio performance exceeds the performance of the FTSE, subject to a high-water mark. If the Company’s net performance in the
year is less than the Benchmark, then no performance fee will be payable.
Global Masters Fund Limited
27
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2020
$
2019
$
23. KEY MANAGEMENT PERSONNEL DISCLOSURES
The Company has no staff and therefore has no Key Management Personnel other than the
Directors.
No member of Key Management Personnel held options over shares in the Company during
the year.
There have been no other transactions with Key Management Personnel or their related
entities other than those disclosed in Note 21.
The compensation of Non-executive Directors (including the Managing Director) for the year
ending 30 June 2020 is shown in the table of detailed remuneration disclosures, provided in
section 12 (A) to (F) of the Remuneration Report on pages 9 and 10. The total remuneration
paid is as follows:
Short-term employment benefit
168,125
168,125
The Company’s Secretary, Brian Jones, was contracted directly during the financial year.
24. CASH FLOW INFORMATION
(a) Reconciliation of result for the year to cash flows from operating activities
Profit/(Loss) for the year
Cash flows excluded from profit attributable to operating activities
Non-cash flows in profit
- net (gain)/loss on disposal of investments
- net (gain)/loss on foreign exchange
- net unrealised (gain)/loss on financial assets at fair value
Changes in assets and liabilities
- (increase)/decrease in prepayments
- (increase)/decrease in trade and other receivables
- increase/(decrease) in trade and other payables
- increase/(decrease) in Deferred Tax
Cash flow from operations
68,581
(346)
(19,663)
(56,854)
(361,158)
(21,834)
(131,484)
6,656
(1,770)
7,146
224,951
(60,672)
(2,122)
4,149
(597)
(21,092)
(199,439)
(166,670)
25. CONTINGENCIES
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2020
(30 June 2019: None).
26. EVENTS OCCURRING AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Company, the results of those operations,
or the state of affairs of the Company in future financial years.
Global Masters Fund Limited
28
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(a)
the Financial Statements and Notes set out on pages 14 to 28 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements,
constitutes compliance with International Financial Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on
that date; and
in the Directors’ opinion,
(b)
(c)
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 remuneration disclosures set out on pages 9 and 10 of the Directors’ Report (as part of the audited remuneration
report) for the year ended 30 June 2020 comply with section 300A of the Corporations Act 2001.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors and is signed for and on behalf of the Directors by:
Dr Emmanuel (Manny) C Pohl AM
Managing Director
28 August 2020
Global Masters Fund Limited
29
INDEPENDENT AUDITOR’S REPORT
Global Masters Fund Limited
30
INDEPENDENT AUDITOR’S REPORT (continued)
Global Masters Fund Limited
31
INDEPENDENT AUDITOR’S REPORT (continued)
Global Masters Fund Limited
32
INDEPENDENT AUDITOR’S REPORT (continued)
Global Masters Fund Limited
33
SHAREHOLDER INFORMATION
The Shareholder information set out below was applicable as at 18 August 2020.
1. TWENTY LARGEST SHAREHOLDERS
2. DISTRIBUTION OF SECURITIES
Shareholders Last year’s figures
Ordinary
Shares
%
CITICORP NOMINEES PTY LIMITED
5,755,988
53.7%
BOND STREET CUSTODIANS LIMITED
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