1
Annual Report 2020
Annual Report 2024
Looking beyond the Horizon
Contents
Global Masters Fund Limited
7
Chairman’s Report
8
Directors’ Report
13
Auditor’s Independence Declaration
14
Corporate Governance Statement
16
Financial Report
32
Directors’ Declaration
33
Independent Auditor’s Report
35
Shareholder Information
36
Investments
37
Corporate Directory
FINANCIAL YEAR END
30 June 2024
ANNUAL GENERAL MEETING
The Annual General Meeting of
Global Masters Fund Limited:
WILL BE HELD AT:
The office of
EC Pohl & Co Pty Ltd
Level 12 Corporate Centre One
2 Corporate Ct
Bundall QLD 4217
TIME:
12.00pm (QLD Time)
DATE:
Thursday 14 November 2024
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)
Jason Pohl, Murray d’Almeida and Angela Obree
4
Global Masters Fund Limited
HIGHLIGHTS FOR 2024
Highlights for the year ending June 2024
Portfolio Performance was positive 17.9% compared to the MSCI Index in AUD which increased by 18.3%. The ASX
All Ordinaries Index increased by 8.3% over the same period.
Share price of Berkshire Hathaway A stock in US dollars increased by 18.2%.
Net Tangible Assets (NTA) value of the Company per share increased by 17.6% before recognising the net
deferred tax liability and share price increased by 25.5% to $3.15 per share at 30 June 2024.
Portfolio Performance
1
year
3
years
p.a.
5
years
p.a.
10
years
p.a.
Since
Inception
(1 May 2006)
p.a.
Portfolio
17.9%
11.8%
12.7%
13.2%
9.1%
ASX All Ordinaries Index
8.27%
1.9%
3.7%
4.1%
2.4%
MSCI Index (AUD)
18.3%
9.4%
11.2%
11.0%
6.1%
MSCI Index (USD)
18.4%
5.2%
10.0%
7.3%
5.3%
Monthly Movement - Berkshire Hathaway Inc Class A
31 Jul
2023
31 Aug
2023
30 Sep
2023
31 Oct
2023
30 Nov
2023
31 Dec
2023
31 Jan
2024
29 Feb
2024
31 Mar
2024
30 Apr
2024
31 May
2024
30 Jun
2024
FY24
% mvmt in AUD/USD Rate
-0.9%
3.6%
0.8%
1.6%
-4.4%
-3.1%
3.6%
1.1%
-0.2%
0.6%
-2.8%
-0.3%
-0.1%
% mvmt in BRK A Share Price
3.4%
2.1%
-2.8%
-2.6%
5.4%
-0.6%
6.5%
6.7%
2.9%
-5.5%
4.7%
-2.4%
18.2%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
5
Global Masters Fund Limited
Contribution to Net Tangible Assets (before tax on unrealised gains)
Value of GFL Investment Since Inception
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
30/04/2006
30/11/2006
30/06/2007
31/01/2008
31/08/2008
31/03/2009
31/10/2009
31/05/2010
31/12/2010
31/07/2011
29/02/2012
30/09/2012
30/04/2013
30/11/2013
30/06/2014
31/01/2015
31/08/2015
31/03/2016
31/10/2016
31/05/2017
31/12/2017
31/07/2018
28/02/2019
30/09/2019
30/04/2020
30/11/2020
30/06/2021
31/01/2022
31/08/2022
31/03/2023
31/10/2023
31/05/2024
GFL Shares
MSCI Index in AUD
6
Global Masters Fund Limited
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 primarily
in Berkshire Hathaway Inc - listed on the New York
Stock
Exchange
(NYSE)
and
other
global
investments. The Company has pursued an
actively managed portfolio without reducing the
Berkshire holding by utilising capital raising events,
including a rights issue in 2017 and convertible notes
offer in 2021. The active portfolio provides
investment diversity via a bottom-up investment
process and meets a growing demand for active
management to drive out-performance.
The composition and performance of the overall
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 UK investment
portfolio is undertaken by EC Pohl & Co Pty Ltd,
which also provides administration support to GFL.
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 that 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
.
7
Global Masters Fund Limited
CHAIRMAN’S REPORT
Dear Shareholders,
I am pleased to present the Annual Chairman’s Report of
Global Masters Fund Limited for the 2023/24 financial year.
THE YEAR IN REVIEW
The Global Masters Fund portfolio performed well during
the financial year, delivering a positive return of 17.9%. The
result reflects the performance of the global markets as
represented by the MSCI Index in AUD which increased by
18.3% during the year. The performance this year is below
the result last year of 25.6% which can be seen in the
decline in overall total comprehensive income, however, it
continues to add to the 18 year track record which is
currently positive 9.1% compared to the MSCI Index in AUD
which has returned 6.1% over the same period. Alongside
the core investment in Berkshire Hathaway the Global
Masters Fund portfolio contains quality growth companies
that
have
a
fundamental
sustainable
competitive
advantage that allows them to thrive in challenging times
compared to their peers. Given the economic back-drop
of the current environment including a tight labour market,
inflation driven cost pressures and sustained high interest
rates it is these companies that are able to maintain
earnings and profit margins to deliver superior investment
performance.
BERKSHIRE HATHAWAY
The Company’s core investment in Berkshire Hathaway
delivered a very strong result. Berkshire Hathaway A Stock
increased in price by 18.2% and B Stock increased by 19.3%
in USD terms, the USD/AUD exchange rate change had
only a minor impact of negative 0.1%.
Over the last twelve months there have been a number of
relatively minor names removed from the Berkshire
Hathaway portfolio. One of the more notable changes was
the sell down of Apple Inc. At 30 June 2023 Apple made
up 51% of the Berkshire portfolio, but after selling 126 million
shares the holding represents only 43.4% of the portfolio.
As Warren Buffet, the CEO of Berkshire Hathaway
discussed at the recent AGM, the realisation of gains on the
Apple holding was in part due to crystalising the tax liability
which he considered opportunistic given the possibility of
increased corporate tax rates in the future.
The biggest news regarding Berkshire during the year was
the passing of Charlie Munger. Charlie was Vice-Chairman
of Berkshire and a legend in the investment community.
Only months away from his one hundredth birthday,
Charlie dedicated his life to long-term investing and
continuous learning. The internet is full of Charlie’s wisdom,
in celebration of his life here’s a couple of my favourites:
“It's remarkable how much long-term advantage people like
us have gotten by trying to be consistently not stupid,
instead of trying to be very intelligent.”
“If you want to succeed in investments, start early and try
hard and keep doing it. All success comes that way, by and
large.”
“I didn't get rich by buying stocks at a high price-earnings
multiple in the midst of crazy speculative booms, and I'm
not going to change.”
“Understanding both the power of compound return and
the difficulty getting it is the heart and soul of
understanding a lot of things.”
“There are huge advantages for an individual to get into a
position where you make a few great investments and just
sit back. You're paying less to brokers. You're listening to
less nonsense.”
Charlie provided insights and ideas in many fields but his
themes for investing remained consistent: find good
businesses and pay a fair price, own investments for the
long term and let the gains compound over time. He was
patient, he was thoughtful, he was generous. Rest in peace.
THE BOARD
I wish to record my appreciation for my fellow Board
members for their support and contribution throughout the
past year. The economic environment continues to be
dominated by macro-themes; global economies are
generally showing signs of resilience yet conflicts and geo-
politics stimulate ongoing uncertainty. Sitting patiently
through this volatility and taking time to consider how best
to position Global Masters Fund for the future is the focus
and concentration of the Board.
In conclusion, I would like to sincerely thank our
Shareholders for your continued support. Long-term
shareholders are the back-bone of any business and we are
privileged to serve likeminded investors who are thinking
long term and compounding over time.
Yours sincerely
Murray d’Almeida
Chairman
8
Global Masters Fund Limited
DIRECTORS' REPORT
Your Directors present their report on Global Masters Fund Limited for the financial year ended 30 June 2024.
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, A Obree and J Pohl.
2.
INFORMATION ON DIRECTORS
Murray H d’Almeida
FAICD
Chairman, Non-Executive Director
Experience and expertise
Director since 3 November 2016
Chairman since 9 November 2018.
Over 38 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.
Listed company directorships
Chairman of ECP Emerging Growth Limited
Other directorships
Deputy Chancellor Southern Cross University
Member of Gold Coast Light Rail Business
Advisory Board
Chairman of Zooz Pty Ltd
Former Listed Company directorships
in last 3 years
Director of Triple Energy Limited (Nov 2022)
Interests in the Company
2,578 ordinary shares
1,613 convertible notes
Angela Obree
B.Compt, MBA, MAICD
Non-Executive Director
Experience and expertise
Appointed Non-Executive Director on
18 November 2021.
Angela has almost 25 years’ experience in
management consulting in the UK, South Africa,
Ireland and Germany. She is a highly experienced
commercial mediator, negotiation expert, and
corporate crisis leader.
Listed company directorships
Director of Flagship Investments Limited
Other directorships
Director of Congrua Limited
Director of ECP Asset Management Pty Ltd
Director of Freedom Solutions Australia
Former Listed Company directorships
in last 3 years
None
Interests in the Company
Nil ordinary shares
3,226 convertible notes
9
Global Masters Fund Limited
Jason C Pohl
B.Com, LLB, MBA
Director
Experience and expertise
Appointed Director 21 February 2023.
Jason has ten 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.
Listed company directorships
Alternate Director of Athelney Trust Plc
Other directorships
Director of The Tabu Vodka Co Pty Ltd
Director of EC Pohl & Co RE Ltd
Former Listed Company directorships
in last 3 years
None
Interests in the Company
1,000 ordinary shares
6,452 convertible notes
10
Global Masters Fund Limited
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 2024, the Net Assets of the Company had increased
by 4,664,911 (14.6%) over the twelve-month period. Overall
portfolio performance of positive 17.9% is the key driver of the
result which is then reduced by the impact of the convertible
note interest expense of $965,218 and operating expenses of
$435,750.
The international market broadly has out-performed the
Australian market as demonstrated by the MSCI Index verses
the ASX All Ordinaries Index. The MSCI Index increased by
18.4% during the year, while the ASX All Ordinaries Index
increased by only 8.3%. The global performance has been led
in the US by the tech giants forming the ‘magnificent seven’,
which have benefited from AI focused investor interest.
Dissecting the performance of Global Masters, the Company’s
core investment in Berkshire Hathaway performed very well
through the year. In local currency terms the share price of
BRK A stock increased by 18.2% while the USD/AUD exchange
rate remained consistent between the close of FY23 and FY24,
with the Australian dollar strengthening marginally by 0.1%. The
second biggest investment, the ECP Global Growth Fund
increased by $2,463,419 (22.3%). The ECP Global Growth Fund
with a focus on global growth companies has a high exposure
to technology businesses and was well positioned to benefit
from the market optimism in this sector. The UK Portfolio
performance in local currency was negative 6.9% during the
year, compared to the FTSE Index which increased by 8.4%.
While still maintaining out-performance since inception the UK
portfolio has impacted the overall performance of GFL this
year having a significant impact on the Statement of Profit or
Loss. Total realised and unrealised gains in the P&L were
$584,557 last year compared to -$394,722 in the current
financial year.
The Investment Manager continues to focus on the
fundamentals of their investment philosophy selecting quality
growth companies that have the ability to generate predictable,
above-average economic returns to produce superior
investment performance over the long term.
5. SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
There were no 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
Directors’ 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.
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.
2024
Cents
2023
Cents
Basic earnings per share
(12.78)
(5.77)
Diluted earnings per share
(3.72)
1.36
The Company records fair value movement for some of its
investments in Other Comprehensive Income, therefore Total
Comprehensive Income is a more appropriate base for detailing
earnings per share.
2024
Cents
2023
Cents
Comprehensive earnings per
share
43.50
54.38
See Note 17 of the Financial Report.
10. COMPANY SECRETARY
Scott Barrett B.Com, CA
Scott commenced as Company Secretary on 1 July 2021. Scott
is a Chartered Accountant and is the Chief Financial Officer for
EC Pohl & Co. Scott has extensive governance, business
management and accounting experience working in subsidiaries
of multinational groups from the hospitality and property
industries.
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
Attended
M d’Almeida
4
4
A Obree
4
4
J C Pohl
4
4
11
Global Masters Fund Limited
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
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.
No remuneration consultants were engaged during the year.
The per annum remuneration of the Directors remains
unchanged from the previous year:
Chairman
$45,000
Other Directors
$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.
DETAILS OF REMUNERATION
Director
Year
Short-term Benefits
Post-
Employment
Super
$
Equity
Total
$
Fees
$
Performance
Fees
$
Non-
monetary
Benefits
$
Shares
$
Option
s
$
M d’Almeida *
Non-executive Chairman
2024
46,125
-
-
-
-
-
46,125
2023
46,125
-
-
-
-
-
46,125
Dr E C Pohl AM^
Managing Director
2024
-
-
-
-
-
-
-
2023
30,000
-
-
-
-
-
30,000
A Obree
Non-executive Director
2024
40,000
-
-
-
-
-
40,000
2023
40,000
-
-
-
-
-
40,000
J Pohl *
Executive Director
2024
40,500
-
-
-
-
-
40,500
2023
10,000
-
-
-
-
-
10,000
Total Directors
Remuneration
2024
126.625
-
-
-
-
-
126,625
2023
126,125
-
-
-
-
-
126,125
* Inclusive of non-claimable GST amount
^ Resigned 30 June 2023
(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 employed by the Investment Manager – EC Pohl & Co Pty Ltd.
(D) Share-based compensation
No share-based compensation exists.
(E) Related Party Transactions
2024
2023
The following transactions occurred with other related parties:
$
$
Expenses paid or payable by the Company to EC Pohl & Co Pty Ltd:
–
Performance Fee
–
Management Fee
–
Company secretary fees
-
33,912
36,900
-
45,593
36,900
All related party transactions are made on an arm’s length basis using standard terms and conditions and are in accordance with
the Management Services Agreement as detailed in Note 22.
J Pohl has an interest in the transaction as he is a related party to EC Pohl & Co Pty Ltd.
12
Global Masters Fund Limited
DIRECTORS’ REPORT (Continued)
(F) Equity Instrument Disclosure relating to Key Management Personnel
The number of shares and convertible notes in the Company held during the financial year by each Director of Global Masters
Fund Limited, either directly, indirectly or beneficially, including their related parties and powers of attorney issued under funds
management agreements is set out below. There were no shares granted during the year as compensation.
DIRECTOR
Shares /
Convertible
Notes
Balance At The
Start Of The
Year
Number
acquired
Number
Disposed
Other Changes
During The Year
Balance At The
End Of The Year
M d’Almeida
Shares
2,578
-
-
-
2,578
C-Notes
1,613
-
-
1,613
A Obree
Shares
-
-
-
-
-
C-Notes
3,226
-
-
-
3,226
J Pohl
Shares
1,000
-
-
-
1,000
C-Notes
6,452
-
-
-
6,452
END OF REMUNERATION REPORT (AUDITED)
13. GENERAL TRANSACTIONS
Other than the Directors’ 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 2023
– Nil).
15. OPTIONS
No options have been issued during or since the financial year
(30 June 2023 – 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.
18. NON-AUDIT SERVICES
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 Board 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 Board
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 13.
Mr Murray d’Almeida
Chairman
28 August 2024
13
Global Masters Fund Limited
AUDITOR’S INDEPENDENCE DECLARATION
14
Global Masters Fund Limited
CORPORATE GOVERNANCE STATEMENT: FOR THE YEAR ENDED 30 JUNE 2024
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 2024 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 be effective and add value
Board Charter
Diversity Policy
Principle 3:
Instil a culture of acting lawfully, ethically and responsibly
Values Statement
Code of Conduct
Share Trading Policy
Principle 4:
Safeguard the integrity of corporate reports
Board Charter
Code of Conduct
Principle 5:
Make timely and balanced disclosure
Disclosure Policy
Principle 6:
Respect the rights of security holders
Communications Policy
Privacy Policy
Principle 7:
Recognise and manage risk
Board Charter
Principle 8:
Remunerate fairly and responsibly
Board Charter
15
Global Masters Fund Limited
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
Compliant
Principle 2:
Structure the Board to add value
Recommendation 2.1:
Establish a Nomination Committee
Compliant
Note 2.1: 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.
Principle 3:
Act ethically and responsibly
Compliant
Principle 4:
Safeguard integrity in corporate reporting
Recommendation 4.1:
Establish an Audit Committee
Compliant
Note 4.1: The Company has not established an Audit Committee. The full Board is
responsible for appointment and removal of the external auditor and the rotation
of the audit partner.
Principle 5:
Make timely and balanced disclosure
Compliant
Principle 6:
Respect the rights of security-holders
Compliant
Principle 7: Recognise and manage
risk
Recommendation 7.1:
Risk Committee
Recommendation 7.3:
Internal audit function
Compliant
Note 7.1: 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.
Note 7.3: 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.
Principle 8: Remunerate fairly and
responsibly
Recommendation 8.1 :
Remuneration Committee
Recommendation 8.3:
Equity-based remuneration
Compliant
Note 8.1: The Company does not have a Remuneration 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.
Note 8.3: 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.
16
Global Masters Fund Limited
FINANCIAL REPORT
CONTENTS OF FINANCIAL REPORT
Page
Financial Report
Statement of Profit or Loss and Other Comprehensive
Income
17
Statement of Financial Position
18
Statement of Changes in Equity
19
Statement of Cash Flows
20
Notes to the Financial Statements
21
Consolidated Entity Disclosure Statement
32
Directors Declaration
32
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 2024.
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
17
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
Notes
$
$
Other Income
5
198,522
1,152,554
Net unrealised gains/(losses) on investments through profit or loss
(335,083)
(176,337)
Finance Expense
14
(965,218)
(921,421)
Other expenses
6
(435,750)
(435,221)
Profit/(Loss) before income tax
(1,537,529)
(380,425)
Income tax benefit/(expense)
7a
167,311
(237,934)
Net Profit/(Loss) for the year
(1,370,218)
(618,359)
Other Comprehensive Income
Realised and Unrealised gains/(loss) on Financial Assets taken to equity, net of tax
7c
6,035,129
6,449,455
Total Comprehensive Income/(Loss) for the year
4,664,911
5,831,096
Earnings per share:
Cents
Cents
Basic earnings per share
17
(12.78)
(5.77)
Diluted earnings per share
17
(3.72)
1.36
Comprehensive Income:
Comprehensive earnings per share
17
43.50
54.38
The accompanying Notes form part of these Financial Statements.
18
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
2024
2023
Notes
$
$
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
8
77,739
161,604
Trade and Other Receivables
9
62,867
64,681
Other Assets
10
51,098
51,947
TOTAL CURRENT ASSETS
191,704
278,232
NON-CURRENT ASSETS
Financial Assets
11
54,273,643
46,971,991
TOTAL NON-CURRENT ASSETS
54,273,643
46,971,991
TOTAL ASSETS
54,465,347
47,250,223
LIABILITIES
CURRENT LIABILITIES
Trade and Other Payables
12
29,176
25,308
TOTAL CURRENT LIABILIITES
29,176
25,308
NON-CURRENT LIABILITIES
Deferred Tax Liabilities
13
8,796,265
6,666,751
Convertible Note Liability
14
9,096,145
8,679,314
TOTAL NON-CURRENT LIABILITIES
17,892,410
15,346,065
TOTAL LIABILITIES
17,921,586
15,371,373
NET ASSETS
36,543,761
31,878,850
EQUITY
Option premium on convertible notes
14
1,154,445
1,154,445
Issued Capital
15
12,871,873
12,871,873
Reserves
16
24,848,141
18,813,012
Retained Profits/(Accumulated losses)
(2,330,698)
(960,480)
TOTAL EQUITY
36,543,761
31,878,850
The accompanying Notes form part of these Financial Statements.
19
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
2023
Note
Issued
Share
Capital
$
Retained
Profits/
(Accumulated
Losses)
$
Asset
Revaluation
Reserve
$
Asset
Realisation
Reserve
$
Notes
Option
Premium
$
Total
Equity
$
Balance at 1 July 2022
12,871,873
(342,121)
12,056,405
307,152
1,154,445
26,047,754
Comprehensive Income
Profit/(Loss) for the Year
-
(618,359)
-
-
(618,359)
Other Comprehensive Income
-
-
6,449,455
-
-
6,449,455
Total Comprehensive Income
-
(618,359)
6,449,455
-
-
5,831,096
Other
Transfer to realisation reserve
-
-
596,081
(596,081)
-
-
Balance at 30 June 2023
12,871,873
(960,480)
19,101,941
(288,929)
1,154,445
31,878,850
2024
Note
Issued
Share
Capital
$
Retained
Profits/
(Accumulated
Losses)
$
Asset
Revaluation
Reserve
$
Asset
Realisation
Reserve
$
Notes
Option
Premium
$
Total
Equity
$
Balance at 1 July 2023
12,871,873
(960,480)
19,101,941
(288,929)
1,154,445
31,878,850
Comprehensive Income
Profit/(Loss) for the Year
-
(1,370,218)
-
-
-
(1,370,218)
Other Comprehensive Income
-
-
6,035,129
-
-
6,035,129
Total Comprehensive Income
-
(1,370,218)
6,035,129
-
-
4,664,911
Other
Transfer to realisation reserve
-
-
(220,763)
220,763
-
-
Balance at 30 June 2024
12,871,873
(2,330,698)
24,916,307
(68,166)
1,154,445
36,543,761
The accompanying Notes form part of these Financial Statements.
20
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
Notes
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Distributions and Dividends received
238,496
361,282
Interest received
3,533
4,523
Interest paid on convertible notes
14
(548,387)
(550,000)
Payments to suppliers and employees
(431,390)
(444,652)
Net cash used in operating activities
25
(737,746)
(628,847)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of Investments
1,217,655
11,225,126
Payments for Investments
(565,737)
(10,625,222)
Net cash provided by investing activities
651,918
599,904
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities
-
-
Net decrease in cash and cash equivalents held
(85,828)
(28,943)
Effects of foreign currency exchange rate changes on cash and cash
equivalents
1,963
-
Cash and cash equivalents at the beginning of the year
161,604
190,547
Cash and cash equivalents at end of year
8
77,739
161,604
The accompanying Notes form part of these Financial Statements.
21
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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.
Material accounting policies adopted in the preparation of
these financial statements are presented below. The change
from ‘significant’ to ‘material’ policies is discussed below in 2(c).
Policies are consistent with prior reporting periods unless
otherwise stated.
2. SUMMARY OF MATERIAL ACCOUNTING
POLICIES
(a) 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.
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.
(b) 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.
Financial Assets - Recognition
The Company’s investments are recognised on the date that
the company commits itself to the purchase of the asset (i.e.
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.
Financial Assets - Derecognition
The Company derecognises an investment when it is sold or it
transfers the investment and the transfer qualifies for
derecognition in accordance with AASB 9. For investments
designated as financial assets at fair value through profit or
loss, upon derecognition the realised gain or loss is recognised
in the profit or loss. For investments designated as financial
assets at fair value through other comprehensive income the
unrealised gains/losses net of tax relating to the investment
are transferred from the revaluation reserve to the realisation
reserve.
22
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
(b) Financial Instruments (continued)
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.
Convertible Notes
On the 24th of November 2021, the Company issued 3,225,806
Convertible Notes. These compound financial instruments are
able to be converted to ordinary shares at the option of the
noteholder in accordance with the Note Terms. The liability
component is initially recognised as the difference between the
compound financial instrument as a whole and the component
associated with the conversion option. Initially the conversion
option was considered a derivative liability measured at fair
value using observable inputs, including share price on the grant
date, share price volatility and 5 year bond rate. The
attributable transaction costs were allocated to both the liability
and derivative liability components in proportion to their
carrying amounts, with the derivative liability portion is
immediately recognised in the statement of profit or loss.
On 17 June 2022 there was an amendment to the conversion
price features of the Note Terms and the conversion option was
re-classified as equity. Prior to reclassification the conversion
option was remeasured to fair value with the change recognised
in the statement of profit or loss.
After initial recognition, the liability component of the
compound financial instrument is measured at amortised cost
using the effective interest method until extinguished on
conversion or maturity of the notes. The carrying amount of
the equity component is not remeasured in subsequent periods.
(c) Accounting Standards Adopted
The Company adopted the following accounting standards
and interpretations during the period.
Material Accounting Policy Information
The Company adopted Disclosure of Accounting Policies
(amendments to IAS 1 and IFRS Practice Statement 2). The
amendments require the disclosure of ‘material’, rather than
‘significant’, accounting policies. The customised presentation
allows users to focus on entity-specific accounting policies to
understand the financial statements.
Classification of Liabilities as Current or Non-Current
The Company has chosen to early adopt Classification of
Liabilities as Current or Non-current – Amendments to IAS 1
which is effective from 1 January 2024 but not required until
reporting period ending 30 June 2025.
The amendments were introduced to deal with liability
classification issues relating to the right to defer settlement that
need not be unconditional and exist at the end of the reporting
period, classification based on rights to defer (not intention),
liabilities settled by transferring own equity instruments prior to
maturity, and additional disclosures where right to defer
settlement is subject to entity complying with covenants within
12 months after the reporting period.
The amendment to the Classification of Liabilities as Current or
Non-Current will impact the presentation of the convertible
note liability. Under the current standard the convertible note
liability would now be presented as a current liability as the
note-holders have the right to convert the notes to Ordinary
Shares from 23 November 2023 onwards. Under the
amendment, because the notes are only redeemable for
ordinary shares, they remain a non-current liability until such
time as the notes are redeemable for a cash payment. The
Board has chosen to early adopt the amendment to
consistently show the convertible note liability as a non-current
liability which reflects the cash commitments of the Company.
(d) New Accounting Standards and Interpretations
The IASB has issued new and amended Accounting Standards
and Interpretations that have mandatory application dates for
future reporting periods. The following table highlights the
forthcoming requirements which have not been early adopted
and are not expected to have significant impact on the
Company’s financial statements.
Effective
date
New accounting standards or
amendments
1 January 2024
Lease Liability in a Sale and
Leaseback – Amendments to IFRS 16
Supplier Finance Arrangements –
Amendments to IAS 7 and IFRS 7
1 January 2025
Lack of Exchangeability –
Amendments to IAS 21
Sale of Contribution of Assets
between an Investor and its Associate
or Joint Venture – Amendments to
IFRS 10 and IAS 28
23
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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 recognised as a result of tax losses
has been carried forward as it is believed that the investment
process will deliver taxable profits over the investment
period, this will allow the Company to utilise the deferred tax
asset over time.
4.
OPERATING SEGMENTS
Segment Information
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.
24
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
Notes
$
$
5. OTHER INCOME
Dividends Income
254,628
387,137
Interest Received
3,533
4,523
Gain/(loss) on Sale of Other UK Investments
(91,513)
739,367
Realised Foreign Exchange Gain/(Loss)
31,874
21,527
198,522
1,152,554
6. OTHER EXPENSES
Auditors Remuneration
23
17,938
15,375
ASX and Share Registry costs
60,588
57,701
Convertible Note Trustee Fees
51,250
51,250
Management Fees
33,912
45,593
Director Fees
126,625
126,125
Company Secretarial Services
36,900
36,900
Administration Costs
108,537
102,277
435,750
435,221
7. INCOME TAX EXPENSE
(a) Reconciliation of income tax to accounting profit
Accounting loss before tax
(1,537,529)
(380,425)
Prima facie tax payable on ordinary activities before income tax rate at 30.0%
(2023 – 30.0%)
(461,259)
(114,127)
Adjust for tax effect of:
-
Fully Franked Dividends received
14,267
14,734
-
Carried forward losses
202,761
271,383
-
Franked Dividends receivable
88
(193)
-
Interest paid on convertible notes
(164,516)
(165,000)
-
Non-assessable items
289,565
276,426
-
Tech boost adjustment
(3,766)
-
Rebateable Fully Franked Dividends
(44,451)
(45,289)
Tax expense/(credit) shown in Profit and Loss statement
(167,311)
237,934
(b) The components of tax benefit comprise:
(Decrease)/Increase in deferred tax asset
66,223
(283,272)
Decrease/(increase) in deferred tax liability
101,089
45,338
Income tax (expense)/credit
167,311
(237,934)
(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.
Other Comprehensive Income before tax
8,331,954
8,825,817
Tax Expense at 30.0% (2023: 30.0%)
(2,499,586)
(2,647,745)
Adjusted for tax effect of available losses
202,761
271,383
Amount Net of Tax
6,035,129
6,449,455
25
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
Notes
$
$
8. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
77,739
161,604
Balance as per Statement of Cash Flows
77,739
161,604
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
77,739
161,604
9. TRADE AND OTHER RECEIVABLES
CURRENT
Dividends Receivable
56,215
58,387
GST receivable
6,652
6,294
Total current trade and other receivables
62,867
64,681
10. OTHER ASSETS
CURRENT
Prepayments
51,098
51,947
Total Other Assets
51,098
51,947
11. FINANCIAL ASSETS
Non-Current Financial Assets
Listed Investments - FVPL
20
3,089,922
3,512,906
Listed Investments - FVOCI
20
51,183,721
43,459,085
Total Financial Assets
54,273,643
46,971,991
12. TRADE AND OTHER PAYABLES
CURRENT
Trade payables
8,923
10,504
Withholding tax payable
2,814
1,260
PAYG Withholding payable
2,301
1,794
Accrued expenses
15,138
11,750
Total Trade and Other Payables
29,176
25,308
26
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
Notes
$
$
13. DEFERRED TAX
Deferred Tax Assets
13(a)
(1,364,170)
(1,189,799)
Deferred Tax Liabilities
13(b)
10,160,435
7,856,550
Net deferred tax liabilities adjusted for deferred tax assets
8,796,265
6,666,751
(a)
Deferred Tax Assets attributable to:
-
Accruals
(4,541)
(3,525)
-
Convertible notes transaction costs
(34,483)
(48,850)
-
Tax losses
(1,325,146)
(1,137,424)
(1,364,170)
(1,189,799)
(b)
Deferred Tax Liabilities attributable to:
-
Unfranked dividend receivable
16,760
17,323
-
Unrealised Gain on Financial Assets
10,143,675
7,839,227
10,160,435
7,856,550
14. CONVERTIBLE NOTES
On the 24th of November 2021, the Company issued 3,225,806 listed, unsecured,
redeemable, convertible notes (ASX: GFLGA) at $3.10 per note raising a total of $10.0
million. The convertible notes carry a fixed interest entitlement of 5.5% per annum
paid quarterly with a step-up to 6.5% per annum on 23 November 2023 if the 2-year
bank bill swap rate is above 1.8868%. At any time after the second anniversary of the
issue date and before 10 days before maturity, the notes can be converted into
ordinary shares on a one for one basis - alternatively the note capital will be repaid on
the maturity date - 24 November 2026.
On 17 June 2022 the Note terms were amended triggering reclassification of the
derivative liability to equity.
Opening Balance – Convertible Note Liability
8,679,314
8,307,893
Finance Expense
965,218
921,421
Interest paid to note holders
(548,387)
(550,000)
Total Convertible Note Liability
9,096,145
8,679,314
27
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$
$
15.
ISSUED CAPITAL
(a)
Share Capital
10,723,159 Ordinary Shares (2023: 10,723,159)
12,871,873
12,871,873
(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.
(c)
Movements in ordinary share capital
Date
Details
Number
of Shares
Price
$
30 June 2022
Balance
10,723,159
12,871,873
Nil Movement in the year
-
-
-
30 June 2023
Balance
10,723,159
12,871,873
Nil Movement in the year
-
-
-
30 June 2024
Balance
10,723,159
12,871,873
16.
RESERVES
(a) Asset Revaluation Reserve
24,916,307
19,101,941
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
(68,166)
(288,929)
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
24,848,141
18,813,012
17. EARNINGS PER SHARE
Net gain/(loss) used in calculating basic and diluted earnings per share
(1,370,218)
(618,359)
Adjustment: items in profit or loss relating to Convertible Notes
851,951
807,671
Diluted profit from continuing operations
(518,267)
189,312
Total comprehensive income used in calculating total comprehensive income per share
4,664,911
5,831,096
Weighted average number of ordinary shares on issue used in the calculation of basic
earnings per share and comprehensive income per share
10,723,159
10,723,159
Effect of dilution from convertible notes
3,225,806
3,225,806
Weighted number of all shares, including dilutive convertible securities
13,948,965
13,948,965
Cents
Cents
Basic earnings per share (cents per share)
(12.78)
(5.77)
Diluted earnings per share (cents per share)
(3.72)
1.36
Total Comprehensive Income per share (cents per share)
43.50
54.38
28
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
18. 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.
The most significant financial risks to which the Company is
exposed to are described below:
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, listed unit trusts and
unlisted unit trusts
Trade and other payables
Convertible notes
(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
2024
2023
%
%
Financial Assets
Cash and cash equivalents
3.0
2.8
6 Months or less
2024
2023
$
$
Financial Assets
Cash and cash equivalents
77,740
161,604
Total Financial Assets
77,740
161,604
The Company does not rely on interest returns as a source of
income, so the interest rate risk is deemed extremely low.
The convertible notes issued by the Company have a fixed
interest rate coupon of 5.5% per annum with a single step up to
6.5% per annum at 23 November 2024 if the 2-year bank bill
swap rate is above 1.8868%. At 30 June 2024 the 2-year bank
bill swap rate is 4.3177%.
(b) Currency Risk
The Company‘s investment portfolio includes investments in
USA, UK and South Africa and dividends receivable from these
investments. 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 carrying value of these foreign currency denominated
assets at balance date was as follows:
Carrying Amount
2024
2023
AUD$
AUD$
Dividends receivable
56,215
58,387
Investments
52,257,015
45,212,391
Total
52,313,230
45,270,778
(c) Credit risk
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 stock exchanges
around the world 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.
Investments:
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.
29
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
18. FINANCIAL RISK MANAGEMENT (continued)
(e) Sensitivity Analysis
The following table illustrates sensitivities to the Company’s
exposure to changes exchange rates 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 2024, 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:
2024
$
2023
$
+/- 2% in interest rates
+/- 1,478
+/- 2,885
+/- 5% in exchange rates
+/- 2,612,851
+/- 2,260,620
+/- 10% in listed
investments
+/- 5,427,364
+/- 4,697,199
(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 global 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.
19. 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 beyond the
convertible notes issued last year. 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.
20. FAIR VALUE MEASUREMENTS
The Company measures the following assets and liabilities at
fair value on a recurring basis:
-
Financial Assets at fair value through Other Comprehensive
Income (FVOCI).
-
Financial Assets at fair value through Profit or Loss (FVPL).
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.
Level 3 Unobservable inputs for the asset or liability.
The table below shows the assigned level for each asset and
liability held at fair value by the Company:
30 June 2024
Recurring fair value measurements -
Listed Equity Securities
FVPL
FVOCI
Level 1
3,089,922
51,183,721
Level 2
-
-
Level 3
-
-
Total
3,089,922
51,183,721
30 June 2023
Recurring fair value measurements -
Listed Equity Securities
FVPL
FVOCI
Level 1
3,512,905
43,459,085
Level 2
-
-
Level 3
-
-
Total
3,512,905
43,459,085
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.
30
Global Masters Fund Limited
FINANCIAL REPORT
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$
$
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
Fees derived in accordance with the Management Services Agreement (see Note 22):
Management Fee
33,912
45,593
Company Secretarial Services
36,900
36,900
Total Fees Paid
70,812
82,493
J C Pohl has an interest in the transactions as during the year J C Pohl is a related party
of EC Pohl & Co Pty Ltd.
22. MANAGEMENT SERVICES AGREEMENT
In accordance with a Management Services Agreement dated 24 January 2022, the Company agreed to engage the
Manager to provide primary and secondary management services as listed below.
Primary services only provided for the actively managed portion of the portfolio 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.
Additional Primary services include:
(i)
provide the Company with quarterly investment performance reporting;
(ii)
promoting investment in the Company by the general investment community; and
(iii) providing investor relationship services
Secondary management services include:
1)
provision of office services, corporate and information technology services support.
The agreement is for a term of 5 years, and may be terminated if:
a)
either party ceases to carry on business, or
b)
either party enters into liquidation voluntarily or otherwise, or
c)
either party passes any resolution for voluntary winding-up, or
d)
a receiver of the property of either party, or any part thereof, is appointed, or
e)
after the initial term the Shareholders of the Company at a general meeting called for that purpose, resolve by
ordinary resolution to terminate this agreement, or
f)
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.
g)
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, or if after the initial term the manager provides three months’ written notice.
Tertiary Services:
-
The Manager has elected to provide company secretarial services to the Company.
The Manager is paid a management fee of 1% per annum on the actively managed portion of the portfolio. In addition, the
Manager is paid 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 benchmark, currently the FTSE100, 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.
31
Global Masters Fund Limited
GLOBAL MASTERS FUND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2024
2023
$
$
23. AUDITORS REMUNERATION
Remuneration of the auditor of the Company for:
Audit or reviewing the financial statements
17,938
15,375
Total remuneration of auditor
17,938
15,375
24. 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 for the year ending 30 June 2024 is
shown in the table of detailed remuneration disclosures, provided in section 12 (A) to
(F) of the Remuneration Report on pages 11 and 12. The total remuneration paid is as
follows:
Short-term employment benefit
126,625
126,125
25. CASH FLOW INFORMATION
(a)
Reconciliation of result for the year to cash flows from operating activities
Loss for the year
(1,370,218)
(618,359)
Non-operating cash flows including in profit/(loss)
- net (gain)/loss on disposal of investments
91,513
(739,367)
- net (gain)/loss on foreign exchange
(31,874)
(21,527)
Non-cash items in profit/(loss)
- net interest expense on convertible notes
416,831
371,421
- net unrealised (gain)/loss on financial assets at fair value
335,083
176,337
- DRP election for dividend receivable
(18,301)
-
Changes in assets and liabilities
- (increase)/decrease in prepayments
849
(1,364)
- (increase)/decrease in trade and other receivables
1,814
(24,545)
- increase/(decrease) in trade and other payables
3,868
(9,377)
- increase/(decrease) in Deferred Tax
(167,311)
237,934
Cash flow from operations
(737,746)
(628,847)
26. CONTINGENCIES
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2024
(30 June 2023: None).
27. 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.
32
Global Masters Fund Limited
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Global Masters Fund Limited is not required by Australian Accounting Standards (AAS) to prepare consolidated financial
statements as it does not have any subsidiaries and as a result subsection 295(3A)(a) of the Corporations Act 2001 to
prepare a Consolidated Entity Disclosure Statement does not apply to the Company.
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(a)
The Financial Statements and Notes set out on pages 16 to 31 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Accounting Standards, which, as stated in Note 1 to the financial statements, constitutes
compliance with International Financial Reporting Standards (IFRS); and
(ii)
give a true and fair view of the financial position as at 30 June 2024 and of the performance for the year
ended on that date; and
in the Directors’ opinion,
(b)
the Consolidated Entity Disclosure Statement is true and correct,
(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
(d)
the remuneration disclosures set out on pages 11 and 12 of the Directors’ Report (as part of the audited
remuneration report) for the year ended 30 June 2024 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:
Mr Murray d’Almeida
Chairman
28 August 2024
33
Global Masters Fund Limited
INDEPENDENT AUDITOR’S REPORT
34
Global Masters Fund Limited
INDEPENDENT AUDITOR’S REPORT (continued)
35
Global Masters Fund Limited
INDEPENDENT AUDITOR’S REPORT (continued)
36
Global Masters Fund Limited
INDEPENDENT AUDITOR’S REPORT (continued)
37
Global Masters Fund Limited
SHAREHOLDER INFORMATION
The Shareholder information set out below was applicable as at 15 August 2024.
1. TWENTY LARGEST SHAREHOLDERS
Shareholders Last year’s
figures
Ordinary
Shares
%
CITICORP NOMINEES PTY
LIMITED
5,117,285
47.7%
CELLAR STOCKS PTY LTD
300,000
2.8%
BOND STREET CUSTODIANS
LIMITED
259,517
2.4%
BOND STREET CUSTODIANS
LIMITED
240,000
2.2%
BOND STREET CUSTODIANS
LIMITED
180,000
1.7%
ABBAWOOD NOMINEES PTY LTD
174,155
1.6%
ROSETTA PTY LTD
155,700
1.5%
BOND STREET CUSTODIANS
LIMITED
150,000
1.4%
EMSDALE HOLDINGS PTY LTD
140,447
1.3%
JACOBEAN PTY LTD
130,000
1.2%
VAL GARDENA PTY LTD
107,021
1.0%
J BARLOW CONSULTANTS PTY
LTD
102,317
1.0%
MUNGER PTY LTD
101,247
0.9%
RUFF SUPER PTY LTD
100,000
0.9%
MCCARRUMS PTY LTD
92,748
0.9%
FELLAGUN PTY LTD
65,000
0.6%
MR PETER LEECE
62,000
0.6%
MRS JANINE ROSLYN HUCKER
60,765
0.6%
LUCISON PTY LTD
55,000
0.5%
LEOBATT SUPER PTY LTD
45,000
0.4%
Total
7,638,202
71.2%
2. DISTRIBUTION OF SECURITIES
Distributions
No. of
Shareholders
% of
shares held
1
to
1,000
133
0.55%
1,001
to
5,000
155
4.52%
5,001
to
10,000
103
7.23%
10,001
to
100,000
91
20.94%
100,001
and over
13
66.75%
Total
100.00%
Holdings of less than a
marketable parcel
19
3. SUBSTANTIAL SHAREHOLDINGS
The names of the Shareholders who have notified the
Company of a substantial holding in accordance with
section 671B of the Corporations Act 2001 are:
Substantial Shareholder
Number
of Shares
% of
Total
EC Pohl & Co Pty Ltd
5,095,148
47.5%
4. 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.
5. ON-MARKET BUY BACK
There is no current on-market buy back.
38
Global Masters Fund Limited
INVESTMENTS
(1) HOLDINGS OF SECURITIES AT 30 JUNE 2024
Individual investments at 30 June 2024 are listed below. The list should not, however, be used to evaluate portfolio
performance or to determine the net asset backing per share at other dates. Individual holdings in the portfolio
may change during the course of the year.
Code
Company
Shares
Market Value $
%
ORDINARY SHARES/UNITS
ALPH
ALPHA GROUP INTERNATIONAL PLC
3,000
128,555.18
0.24
BEG
BEGBIES TRAYNOR GROUP PLC
20,000
38,680.32
0.07
BIPCFB
BIP BCI Worldwide Flexible Fund Class B
15,797,997.7392
1,664,522.79
3.07
BRK.A
Berkshire Hathaway Inc. Common Stock
27
24,783,368.82
45.61
BRK.B
Berkshire Hathaway Inc. New Common
Stock
14,800
9,026,446.78
16.61
CBOX
CAKE BOX HOLDINGS PLC
40,000
136,518.77
0.25
CER
CERILLION PLC
5,000
151,687.52
0.28
GGF
ECP Global Growth Fund
10,000,000
13,504,702.37
24.86
GGFAU
ECP Global Growth Fund (Aust)
147,386.0500
188,051.95
0.35
FEVR
FEVERTREE DRINKS PLC
7,943
163,257.72
0.30
FOUR
4IMPRINT GROUP PLC
1,600
177,777.78
0.33
FSI
Flagship Investments Limited
1,042,185
2,016,627.98
3.71
GAMA
GAMMA COMMUNICATIONS PLC
4,000
106,939.70
0.20
GAW
GAMES WORKSHOP GROUP PLC
1,600
323,701.18
0.60
IPX
IMPAX ASSET MANAGEMENT GROUP
PLC
28,000
201,213.50
0.37
LIO
LIONTRUST ASSET MANAGEMENT PLC
11,000
142,870.69
0.26
NG
NATIONAL GRID PLC
19,838
331,987.47
0.61
NWF
NWF GROUP PLC
20,000
66,932.12
0.12
REL
RELX PLC
1,500
103,498.29
0.19
RMV
RIGHTMOVE PLC
30,000
305,460.75
0.56
RPI
RASPBERRY PI HOLDINGS PLC
6,500
49,360.07
0.09
SPX
SPIRAX GROUP PLC
1,600
257,262.04
0.47
SUS
S & U PLC
2,000
70,534.70
0.13
TET
TREATT PLC
17,000
138,443.31
0.26
WISE
WISE PLC
6,000
77,531.29
0.14
XPP
XP POWER LIMITED
2,000
56,124.38
0.10
YOU
YOUGOV PLC
8,000
61,585.13
0.11
54,273,642.60
99.89
CASH (INCLUDING DIVIDENDS RECEIVABLE)
Cash- Australian Dollar (AUD)
60,038.91
0.11
TOTAL
54,333,681.51
100.00
(2) TRANSACTIONS AND BROKERAGE
There were 18 (2023: 25) transactions in securities during the year on which brokerage of $4,985 (2023: $1,812) was
paid.
CORPORATE DIRECTORY
GLOBAL MASTERS FUND LIMITED
ABN 84 109 047 618
REGISTERED IN NEW SOUTH WALES
12 MAY 2004.
BOARD OF DIRECTORS
Murray d’Almeida
Non-Executive Chairman
Jason Pohl
Executive Director
Angela Obree
Non-Executive Director
COMPANY SECRETARY
Scott Barrett
REGISTERED OFFICE
Level 12
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
Toll Free: 1800 352 474
Tel:
+61 (0) 7 5644 4400
Fax:
+61 (0) 7 5574 1457
Email:
info@globalmastersfund.com.au
POSTAL ADDRESS
P O Box 7536
Gold Coast Mail Centre
BUNDALL QLD 9726
AUDITORS
Augmented Audit Co Pty Ltd
21 Crombie Avenue
BUNDALL QLD 4217
INVESTMENT MANAGER
EC Pohl & Co Pty Ltd
ACN 154 399 916
Level 12
Corporate Centre One
2 Corporate Court
BUNDALL QLD 4217
Tel:
+61 (0) 7 5644 4400
Fax:
+61 (0) 7 5574 1457
SHARE REGISTRY
Boardroom Pty Limited
GPO Box 3993
SYDNEY NSW 2001
Toll Free:
1300 737 760
International: +61 (0) 2 9290 9600
Fax:
+61 (0) 0 9279 0664
Email:
enquiries@boardroomlimited.com.au
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
ABN
Level 2, Corporate Centre One
2 Corporate Court
BUNDALL QLD 42 7
www.globalmastersfund.com.au
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