investment fund annual report 2013

STATE SUPER INVESTMENT FUND

State Super Financial Services Australia Limited | ABN 86 003 742 756 | AFS Licence 238430 State Super Retirement Fund | ABN 86 664 654 341

Annual Report 2013

More offices | More Services | More Value

PERTH OFFICE OPENED JULY 2013

LIVERPOOL OFFICE OPENED FEBRUARY 2013

WODEN OFFICE OPENED APRIL 2013

More Offices | Increased Services | Better Value

State Super Investment Fund

Responsible Entity: State Super Financial Services Australia Limited

ABN 86 003 742 756

Level 7, 83 Clarence Street, Sydney NSW 2000

Investment Funds: Cash Fund ARSN 090 078 443

Fixed Interest Fund ARSN 150 755 249

Capital Stable Fund ARSN 090 078 961

Moderate Fund ARSN 150 755 150

Balanced Fund ARSN 090 077 991

Growth Fund ARSN 090 078 103

Growth Plus Fund ARSN 150 755 141

Australian Equities Fund ARSN 150 755 196

International Equities Fund ARSN 150 755 294

State Super Investment Fund – Annual Report 2013

Find out more at www.ssfs.com.au or call 1800 620 305 1

›› Did you know that SSFS …?›◆ is an expert in public sector super schemes

›◆ is available to all public sector employees and their families

›◆ has a local presence with 18 offices around Australia

›◆ can help maximise your opportunities; both in your scheme and Centrelink

›◆ builds an ongoing relationship with you that can help you make better, more informed and disciplined financial decisions

›◆ can provide you with statements and annual reports online; reducing costs and helping the environment.

Find out more at www.ssfs.com.au or call 1800 620 305.

› Contents

STATE SUPER INVESTMENT FUND

Chairman and Managing Director’s Report 2

Company News 6

Your Trustees 8

Performance of the Funds 11

Directors’ Report 13

Auditor’s Independence Declaration 20

Independent Auditor’s Report 21

Financial Statements 23

Notes to the Financial Statements 30

Directors’ Declaration 64

Directory 65


›› Your SSFS SSFS has continued to grow in the past year and we currently help over 53,000 clients achieve their financial and lifestyle goals. To cater for this growth we have opened new offices in Perth, Canberra and Liverpool, bringing the total number of SSFS offices to 18. As our office network expands, this enables us to reach out and offer our expertise in public sector schemes to individuals in new areas. This helps them make better financial decisions today, to enhance their financial circumstances in the future. The map below shows our office locations across Australia.

We have also increased the number of financial planners in the organisation to help us honour our commitment to providing the highest levels of service, advice and customer satisfaction. We believe strongly in the professional education of our financial planners and require all of our financial planners to be on a pathway to obtaining the Certified Financial Planner® (CFP) certification. The CFP is the highest level of certification a financial planner can achieve and is internationally recognised. SSFS continues to have the highest proportion of Certified Financial Planners® compared to other large advice firms (Largest 30, Money Management, July 2013).

› Chairman and Managing Director’s Report

New South WalesSydney CBD - Clarence StreetSydney CBD - Pitt StreetParramattaPenrithLiverpoolBallinaGosfordNewcastleOrangePort MacquarieTamworthWagga WaggaWollongong

QueenslandBrisbane - City

Australian Capital TerritoryCanberra - CityCanberra - Woden

VictoriaMelbourne - City

Western AustraliaPerth - City


›› Managing money in retirement requires a different approachAs specialists in retirement planning our approach to managing money is constantly evolving, and we have spent the last 18 months refining our approach to constructing client portfolios. Clients in or approaching retirement have unique investment needs, partly because it is a stage of life when their investment portfolio is at its largest, but also because retirees are required to draw on their investments to meet lifestyle expenses over time.

We therefore think of a retirement portfolio as having different compartments with each compartment designed to meet different lifestyle requirements. Each compartment can then be invested differently in accordance with its purpose.

Some funds need to be set aside for emergencies or short-term capital needs; this is the “Cash Reserve” compartment. The largest part of the portfolio is normally required to meet long-term living expenses throughout retirement; this is termed the “Lifestyle” compartment. A sub-component of the “Lifestyle” compartment is set aside to meet income needs in the short to medium term; the “Income Certainty” compartment. Finally, for some clients, additional capital can be set aside to provide for the future, this is the “Future Goals” compartment. One aim of the “Future Goals” compartment is to provide funds for increasing health care expenses or permit greater choices of aged care accommodation. The diagram below illustrates the different compartments.

Looking at a retirement portfolio in this way we strive to ensure our clients can maintain their required spending level throughout retirement. The approach also takes into account the effect inflation can have on spending power and reduces the risk that clients have to sell assets at depressed prices in poor investment market conditions. When you next meet with your financial planner, they will explain our new approach to you in more detail.


Lifestyle Future GoalsCash Reserve

Long-TermStrategy

Broadly DiversifiedCapital Certainty

Income CertaintyShort-Term

$



›› Planning for growth in a changing environmentThe past year saw significant changes in the regulatory environment including the introduction of the Future of Financial Advice (FoFA) reforms. SSFS, as a pioneering leader in providing retirement income planning advice, has embraced these reforms and believes they will help more Australians achieve their retirement objectives. To prepare for these changes the SSFS Board, in 2011, agreed on a multi-year business transformation plan, to be implemented in stages. This plan is designed to improve client engagement and the delivery of SSFS’ services to our clients.

This year, we have implemented work practices that meet all of the FoFA requirements, so you can be confident of receiving high quality advice that is in your best interests. SSFS also believes transparency is important because it helps builds trust between us and our clients. We launched a new class of units in the Investment Fund, where the advice fee is separated from the product management fee. We have also changed the way we disclose fees in statements to give clients more transparency in terms of our fees by separating fees for your investments from those that provide for ongoing access to your financial planner.

In the near future, new technologies will allow us to reduce unnecessary paperwork. Other key benefits for clients include an improved online registration process and new client communication channels. We expect that by streamlining our operations, your experiences with us will become simpler.

›› Investment markets performed strongly last year At the outset of the financial year 2012 – 2013, the investment outlook was rather unsettled, however, the subsequent performance of many asset classes was strong and this demonstrates the benefits of adhering to a disciplined approach to investing. Most asset classes generated good, above average returns and as a result, investment performance for most SSFS Funds over the year was strong. Further information relating to the Investment Fund’s performance is available on page 11.

The economy of the United States (US) continued its gradual recovery and unemployment fell. Share market investors embraced the improving outlook and drove US shares to a record high, surpassing the previous peak set just before the Global Financial Crisis. Europe meanwhile did not fare as well, with austerity measures crimping growth and unemployment rising in many countries. The divergence in economic conditions between countries in Europe continues to grow. Encouragingly, interest rates on government bonds, particularly in the peripheral European countries, declined. This reflects greater investor confidence in the ability of these countries to work through their debt issues.

Investors’ primary concern shifted away from the European debt crisis towards the slowdown of the Chinese economy. China is in the middle of transforming itself from an investment led economy to one that is driven more by consumer consumption. This takes time and will be associated with transitional turbulence. Arguably, China’s economic growth rate is more important to Australia than the European debt crisis because China is Australia’s top trading partner.


One of the most valuable aspects of an ongoing

partnership with a financial planner is that it helps

clients stay committed to their investment plan. This is really

important, especially when markets become volatile, as

holding fast to their investment plan enables clients to reap the

benefits when investment markets recover.

Michael Monaghan, Managing Director

Looking forward, we suggest that global economies will continue to gradually improve, although Europe remains likely to see limited growth over the coming year. The US offers a more positive backdrop and this supports the potential for growth assets, such as shares, to provide positive returns in the year ahead. The expected, associated, reduction in policy stimulus in the US will continue to raise the likelihood that interest rates will increase and this suggests that returns for fixed income assets will remain below their long-term averages. We are continuing to position portfolios to manage risks but also to take opportunities to generate positive portfolio outcomes.

Over the coming year, SSFS will continue to strengthen and grow our business with the aim of helping more clients across the country achieve a fulfilling retirement. We expect a lull in the volume of regulatory change related to financial services, which will be welcome after the extremely busy past year. The Federal election has been a source of distraction and uncertainty for business and clients. As this uncertainty lifts, the higher degree of clarity around policy direction may prove beneficial for businesses, consumers and the economy. On behalf of the Board of Directors and your client service team at State Super Financial Services, we thank you for being a client and look forward to assisting you and your family achieve your financial and lifestyle goals in the future.

Peeyush Gupta Michael Monaghan Chairman Managing Director


›› The benefits of advice

SSFS carries out market research to find out more about how our clients view our services and us. We ask TNS, a leading market research company, to ask our clients what they think of our services. The results are pleasing, with 96% of clients rating SSFS as ‘very good’ or ‘excellent’ (March 2013). We believe this result reflects our commitment to ensuring clients receive high quality financial planning advice. The benefits of ongoing advice are not always straightforward and easy to measure. Possibly one of the most important benefits is providing peace of mind. Peace of mind for clients can be attained by giving advice that helps clients make better decisions today; this then leads to the achievement of lifestyle and financial goals tomorrow.

Advice also helps clients understand their choices and the consequences of those choices. Choices almost always involve trade-offs, meaning there is not always a right or wrong answer; it often depends on the individual’s personal circumstances and attitudes.

›› Enhancements to our investment approach SSFS is committed to enhancing the wellbeing of clients in retirement. This is achieved through appropriate financial planning advice, a disciplined approach to investing and delivering appropriate outcomes for clients. Investment markets are in a state of constant flux and this means the investment team is never standing still. Instead, through rigorous research, they continually strive to enhance our investment approach. The past year has been no different, with the introduction of several enhancements.

Two new asset classes were added to the Investment Fund; these were Australian direct property and global high yield debt. The direct property sector invests in a core, unlisted property fund that owns a combination of prime office, industrial and retail commercial properties. Investment returns from direct property are generated from a combination of rental income and any increases in the capital value of the properties. There are several benefits stemming from investing in unlisted property, including stable returns over the longer term and its low correlation to equities and bonds, which improves diversification.

Global high yield debt is the name given to loan securities that are rated below investment grade by credit rating agencies. The lower credit rating means investors demand a higher interest rate or coupon to be paid, hence the name high yield. Global high yield debt possesses several attractive characteristics. A large proportion of the total return is driven by income and not capital price increases, with coupon rates in the range of 8%-10% pa during the last 15 years. These high coupon rates and relatively short maturities mean the sector has less sensitivity to interest rate changes than many other fixed interest assets. The addition of global high yield debt, within the growth asset allocation, has boosted the level of diversification in the diversified funds because the drivers of returns are quite different to other asset classes.

›› New advertising campaign

To increase awareness of SSFS’ services we launched an advertising campaign in Canberra using radio, buses and newspapers. The campaign was very successful and boosted our profile in Canberra. We will continue to invest in targeted advertising as it enables us to reach more potential customers and to raise awareness of our specialist skills in providing financial planning advice to public sector employees.

›› Your client service

Our services are available to current and former Commonwealth, State and Local Public Sector employees and their families across Australia. We encourage you to refer eligible colleagues or family members to us, so they too can benefit from our financial planning services.

› Company News


›› What SSFS stands forOur mission is to provide financial planning services to Australians, which will improve their financial wellbeing, especially in retirement. We aim to achieve this by:

›◆ Empowering clients to make better financial choices

›◆ Helping clients achieve goals they may not have otherwise set themselves

›◆ Changing financial habits to improve financial wellbeing

›◆ Providing a sense of control over the future; and

›◆ Assisting clients in meeting unforeseen challenges

SSFS has six core values that are constantly demonstrated by our employees. These are shown below:

›› Do you want to receive information online?Our secure online client website provides you with the speed, convenience and security of viewing your personal account details at any time. We can also send you email alerts to advise when your annual and six monthly statements are available to view online. To quickly gain access to this service, simply go to www.ssfs.com.au and click on the client login section to register.

›› Need more information?If you require any assistance, please give your client service team a call at your local regional office.

› Company News

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Teamw

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›› Peeyush Gupta Chairman of the BoardMember of the Investment CommitteeMember of the Human Resources Committee

Peeyush Gupta was a co-founding Director and inaugural Chief Executive Officer of Ipac Securities Limited, a pioneering and leading Australian wealth management firm. Since 2009, Peeyush has pursued a portfolio career, including boards, consulting and investing activities. He is currently on the boards of NAB’s Wealth Management Holdings including MLC, BNZ Life, Charter Hall Direct Property, SIRCA, Safety Return to Work and Support, and Quintessence Labs. Peeyush has a degree in Computer Science and a Master of Business Administration in finance. He is also an alumnus of Harvard University and London Business School.

›› Michael Monaghan Managing DirectorMember of the Enquiries and Complaints CommitteeMember of the Investment Committee

Michael Monaghan is the Managing Director of State Super Financial Services Australia Limited. He is an actuary and has over 30 years’ experience in superannuation, banking, funds management and investment consulting. He has previously been a partner of Deloitte Touche Tohmatsu, Chief Executive Officer of Intech Investment Consultants and held senior executive positions with Deutsche Bank, IBM and Lend Lease Corporation. He is also a non-executive director of HammondCare, an independent Christian charity which specialises in dementia and palliative care.

›› Michael Carapiet Chairman of the Human Resources Committee

Michael Carapiet is Chairperson of the SAS Trustee Corporation, Safety Return to Work and Support Board that comprises the WorkCover Authority of NSW, the Lifetime Care and Support and Motor Accidents Authority. He is a Director of Southern Cross Media Limited and Clean Energy Finance Corporation and is on the advisory Boards of Norton Rose Australia and Transfield Holdings. Michael has more than 30 years’ experience in the financial sector and has held a number of senior roles with the Macquarie Group, where he was a member of Macquarie’s Executive Committee from 2005. Prior to his retirement in 2011, his roles included Global Head of Advisory and Specialised Funds and Executive Chairman of Macquarie Capital and Macquarie Securities. Michael has a Master of Business Administration from Macquarie University.

› Your Trustees


›› Ron Davis Chairman of the Enquiries and Complaints CommitteeMember of the Audit and Compliance CommitteeMember of the Due Diligence CommitteeMember of the Human Resources Committee

Ron Davis is an executive Director of SAS Trustee Corporation, a position he has held since 1 January 2002. Previously Ron was a Valuation Manager with the State Valuation Office. He is the NSW Branch Assistant Secretary for the Professional Officers’ Association Sub-Branch and past president of the Professional Officers Association. He also represents members as a delegate to the Unions New South Wales Public Sector Employees’ Superannuation Committee. Ron is a Fellow of the Australian Institute of Superannuation Trustees, a Fellow of the Association of Superannuation Funds of Australia (ASFA) and a member of ASFA’s New South Wales Division Executive Committee.

›› Rod Harty Member of the Human Resources CommitteeMember of the Enquiries and Complaints CommitteeResigned 2 May 2013

›› Michael Lambert Chairman of the Audit and Compliance CommitteeMember of the Due Diligence CommitteeMember of the Investment Committee

Michael Lambert is a consultant to the Asia Pacific investment bank, CIMB and prior to that was a Managing Director in investment banking with ABN AMRO followed by the Royal Bank of Scotland. Earlier in his career, Michael was the Secretary of the New South Wales Treasury and held various senior positions in the NSW public sector. He has extensive experience and expertise in financial analysis and advising governments and clients on financial and strategic issues. He is a non-executive Director of SAS Trustee Corporation and of the Sax Institute. Michael has a Bachelor of Economics (Honours) and Master of Economics.

› Your Trustees


› Your Trustees

›› Paul Scully Chairman of the Investment CommitteeMember of the Audit and Compliance CommitteeMember of the Due Diligence Committee

Paul Scully is the Managing Director of Decision Horizons, a consulting enterprise through which he offers his services based on 30 years of experience in financial services and investment management. He is an actuary and was, until July 2003, Chief Executive Officer for the Asia Pacific region of ING Investment Management and a member of its global board. Paul has also held executive positions in life insurance and retail funds management. He is also a non-executive Director of SAS Trustee Corporation and Vantage Private Equity Group and an independent member of APPF Retail and Commercial Investor Review Boards.

›› Sue Walsh Member of the Audit and Compliance CommitteeMember of the Due Diligence Committee

Sue Walsh is the President of the Public Service Association of New South Wales and has worked in the New South Wales public sector for over 20 years. She has held a number of senior delegate positions in the Public Service Association of New South Wales and is the President of the New South Wales Branch of the Community and Public Sector Union and a vice president of that organisation’s Federal Executive, Federal Council and a member of the Federal Education Industry Committee. Sue is on the Executive of Unions New South Wales, a delegate to the Australian Council of Trade Unions and is a non-executive Director of SAS Trustee Corporation.

››Our CustodianWe have appointed an independent organisation as custodian to hold all of the Funds’ assets. The current custodian is:

JPMorgan Chase Bank, N.A. ABN 43 074 112 011 Level 18 85 Castlereagh Street Sydney NSW 2000

JPMorgan Chase & Co is one of the world’s largest global custodians with over $US17 trillion in assets under custody for institutional investors around the world. In Australia, they are a market leader in providing custody services for some of Australia’s largest institutional investors.


› Performance of the Funds

›› Returns of the Funds – Years ended 30 June (net of all fees) – Class A

Fund Return* 2013 2012 2011 2010 2009

Cash Annual (%) 2.4 3.72 4.01 2.92 4.51

5 Year Return # (%) 3.5 4.32 4.66 4.82 5.16

Fixed Interest^ Annual (%) 2.9 n/a n/a n/a n/a

5 Year Return # (%) n/a n/a n/a n/a n/a

Capital Stable Annual (%) 5.2 4.27 4.89 7.36 1.98

5 Year Return # (%) 4.7 3.54 4.18 4.46 4.75

Moderate^ Annual (%) 9.1 n/a n/a n/a n/a


Balanced Annual (%) 13.9 0.81 9.44 12.00 -11.35

5 Year Return # (%) 4.5 -0.01 2.39 3.04 2.93

Growth Annual (%) 19.1 -1.46 10.68 12.55 -18.01

5 Year Return # (%) 3.7 -2.65 0.71 1.77 1.78

Growth Plus^ Annual (%) 22.1 n/a n/a n/a n/a


Australian Equities^ Annual (%) 21.9 n/a n/a n/a n/a


International Equities^ Annual (%) 25.5 n/a n/a n/a n/a


# Compound average annual return

* Returns are based on the movement of the transactional unit prices over the relevant period, and assume reinvestment of income distributions

^The Fixed Interest, Moderate, Growth Plus, Australian Equities and International Equities were incepted in July 2011 and consequently long term performance information is not available.

Inflation Annual (%) 2.5 1.20 3.64 3.03 1.5


› Performance of the Funds

›› Statistics as at 30 June 2013 – Class AThe following information has been extracted from the audited Financial Statements of each Fund comprising the State Super Investment Fund included in this report.

Fund Net Assets $’000

Total Distribution Cents/unit

Income %

Growth %

Total return*

Cash 68,462 2.43 2.43 - 2.43

Fixed Interest^ 8,608 5.92 5.74 -2.87 2.87

Capital Stable 106,543 4.40 3.87 1.36 5.23

Moderate^ 27,125 3.97 3.75 5.35 9.10

Balanced 124,070 3.87 3.12 10.81 13.93

Growth 64,315 2.61 2.56 16.56 19.12

Growth Plus^ 1,543 3.63 3.33 18.73 22.06

Australian Equities^ 4,152 3.86 3.54 18.38 21.92

International Equities^ 859 1.15 0.98 24.52 25.50

* Returns are based on the movement of the transactional unit prices over the financial year, and assume reinvestment of income distributions

›› Statistics as at 30 June 2013 – Class B^

Fund Net Assets $’000

Total Distribution Cents/unit

Income %

Growth %

Total return*

Cash 825 0.60 n/a - n/a

Fixed Interest 472 4.30 n/a n/a n/a

Capital Stable 2,445 2.78 n/a n/a n/a

Moderate 1,835 2.87 n/a n/a n/a

Balanced 2,422 2.17 n/a n/a n/a

Growth 1,238 2.15 n/a n/a n/a

Australian Equities 675 2.30 n/a n/a n/a

International Equities 330 0.89 n/a n/a n/a

^ These Funds were launched on 2 April 2013 and therefore meaningful historical performance information is not yet available


In accordance with the Corporations Act 2001, State Super Financial Services Australia Limited, the Responsible Entity for the State Super Investment Fund (the ‘Trust’), reports as follows for the year ended 30 June 2013.

›› Principal ActivitiesDuring the financial year the Trust offered nine managed investment schemes – Cash, Fixed Interest, Capital Stable, Moderate, Balanced, Growth, Growth Plus, Australian Equities and International Equities.

On 2 April 2013 the following investment options were formed into the existing Trusts whereby unit holders can elect to take or not take advice. Investment options offered without advice are Cash, Fixed Interest, Capital Stable, Moderate, Balanced, Growth, Australian Equities and International Equities. These are called Class B units where the above existing investment options are included advice fees and are called Class A units.

Each scheme has a separate investment strategy and the assets of each scheme are managed by external specialist investment managers through a series of discrete investment trusts that State Super Financial Services Australia Limited is the Trustee. The Trust’s Product Disclosure Statement sets out details of the investment process.

There were no other significant changes in the nature of the Trust’s activities during the year.

›› Directors of the Responsible EntityThe names of the directors of the Responsible Entity during or since the end of the financial year are:

P. K. Gupta (Chairman)M. Monaghan (Managing Director)M. Carapiet R. M. DavisR. N. Harty (Resigned 2 May 2013)M. G. LambertP. F. Scully S. Walsh

› Directors’ Report

Front row (left to right): R. Harty; S. Walsh; P. Gupta.

Back row (left to right): R. Davis; M. Carapiet; P. Scully; M. Monaghan; M. Lambert.



7,000

8,000

9,000

10,000

11,000

12,000

13,000

Value ($)

2008

■ Cash Fund ■ Capital Stable Fund ■ Balanced Fund ■ Growth Fund

2009 2010 2011 2012 2013

Value of $10,000 Invested 5 Years Ago

›› Review of Operations

ResultsThe results of the operations of the State Super Investment Fund are disclosed in the Statements of Comprehensive Income of the attached financial statements. The net profit / (loss) attributable to unit holders for the year ended 30 June 2013 was:

Year ended 30 June 2013

$’000

Year ended 30 June 2012

$’000

Cash Fund 1,626 2,460

Fixed Interest Fund 220 234

Capital Stable Fund 5,001 3,695

Moderate Fund 1,499 339

Balanced Fund 15,648 549

Growth Fund 11,733 (1,703)

Growth Plus Fund 242 21

Australian Equities Fund 455 (13)

International Equities Fund 134 -

Total 36,558 5,582

PerformanceThe following graph and table show the performance of the Trust over the past five years.

The graph illustrates the accumulated value of $10,000 invested in the Trust on 1 July 2008 assuming that all income from the Trust is reinvested, and excluding the effects of income tax and inflation.

On 19 May 2011 the Trust registered five additional managed investment schemes. These schemes were only available for new investments from 18 July 2011 and accordingly are not included in the above graph.



›› Review of Operations (continued)

Distributions paid and/or declaredIn respect of the financial year ended 30 June 2013 a final distribution was paid to unit holders on 13 July 2013. The distributions paid and or declared in respect of the financial year ended 30 June 2013 are detailed below:

Quarter Ended

Cents/unit 31 March 2012 30 June 2012 31 March 2013 30 June 2013

Cash Fund – Class A 0.87 0.80 0.55 0.53

Fixed Interest Fund – Class A 1.20 1.08 0.85 3.51

Capital Stable Fund - Class A 1.03 0.96 0.70 2.29

Moderate Fund - Class A 0.94 0.99 0.61 2.32

Balanced Fund - Class A 0.94 1.08 0.59 2.23

Growth Fund - Class A - 1.50 - 1.84

Growth Plus Fund - Class A - 1.56 - 2.79

Australian Equities Fund - Class A - 1.66 - 2.34

International Equities Fund - Class A - 0.87 - 0.81

Quarter Ended

Cents/unit 31 March 2012 30 June 2012 31 March 2013 30 June 2013

Cash Fund – Class B - - - 0.60

Fixed Interest Fund – Class B - - - 4.30

Capital Stable Fund - Class B - - - 2.78

Moderate Fund - Class B - - - 2.87

Balanced Fund - Class B - - - 2.17

Growth Fund - Class B - - - 2.15

Australian Equities Fund - Class B - - - 2.30

International Equities Fund - Class B - - - 0.89

Distributions paid and/or payable by the Trust during the year are shown in Note 3 to the financial statements.



›› Review of Operations (continued)

Unit price historyThe following table shows the after-distribution Exit Price for the Scheme at the close of business on the reporting date for the past five years and the highest and lowest Exit Price for each of the past five years.

Class A Funds

After-Distribution Exit Price 2013 $

2012 $

2011 $

2010 $

2009 $

Cash Fund

At 30 June 1.0000 1.0000 1.0000 1.0000 1.0000

High during year 1.0000 1.0000 1.0000 1.0000 1.0000

Low during year 1.0000 1.0000 1.0000 1.0000 1.0000

Fixed Interest Fund

At 30 June 1.0149 1.0441 - - -

High during year 1.0702 1.0584 - - -

Low during year 1.0424 0.9975 - - -

Capital Stable Fund

At 30 June 1.1283 1.1145 1.1056 1.0949 1.0541

High during year 1.1643 1.1267 1.1268 1.1178 1.1156

Low during year 1.1157 1.0915 1.0919 1.0508 1.0429

Moderate Fund

At 30 June 1.0601 1.0087 - - -

High during year 1.1083 1.0329 - - -

Low during year 1.0124 0.9696 - - -

Balanced Fund

At 30 June 1.2526 1.1341 1.1538 1.1167 1.0286

High during year 1.3168 1.1770 1.2275 1.2109 1.2100

Low during year 1.1390 1.0758 1.1074 1.0083 0.9067

Growth Fund

At 30 June 1.0426 0.8977 0.9314 0.8875 0.8076

High during year 1.1123 0.9518 1.0019 0.9853 1.0216

Low during year 0.8996 0.8409 0.8773 0.7840 0.6829

Growth Plus Fund

At 30 June 1.1103 0.9401 - - -

High during year 1.2034 1.0118 - - -

Low during year 0.9391 0.8798 - - -

Australian Equities Fund

At 30 June 1.1061 0.9396 - - -

High during year 1.2147 1.0372 - - -

Low during year 0.9315 0.9118 - - -

International Equities Fund

At 30 June 1.2189 0.9811 - - -

High during year 1.2563 1.0574 - - -

Low during year 0.9713 0.8893 - - -



›› Review of Operations (continued)Class B Funds

After-Distribution Exit Price 2013 $

2012 $

2011 $

2010 $

2009 $

Cash Fund

At 30 June 1.0000 - - - -

High during year 1.0000 - - - -

Low during year 1.0000 - - - -

Fixed Interest Fund

At 30 June 1.1489 - - - -



Capital Stable Fund

At 30 June 1.1760 - - - -



Moderate Fund

At 30 June 1.1782 - - - -



Balanced Fund

At 30 June 1.1868 - - - -



Growth Fund

At 30 June 1.1914 - - - -



Australian Equities Fund

At 30 June 1.1665 - - - -



International Equities Fund

At 30 June 1.2823 - - - -





›› Changes in State of AffairsThere were no significant changes in the state of affairs of the Trusts during the financial year.

›› Subsequent EventsThere has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Trust, the results of those operations, or the state of affairs of the Trust in future financial years.

›› Future DevelopmentsThe Trust will continue to be managed in accordance with its investment objectives and guidelines as set out in the current Product Disclosure Statement and in accordance with the provisions of the Consolidated Constitution of the Trust. Future results will accordingly depend on the performance of the investment markets to which the Trust is exposed.

›› Insurance and IndemnificationNo insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to either the Responsible Entity or Auditor of the Trust. So long as the officers of the Responsible Entity act in accordance with the Consolidated Constitution of the Trust and the Law, the Responsible Entity remains fully indemnified out of the assets of the Trust against any losses incurred while acting on behalf of the Trust. The Auditor of the Trust is not indemnified out of the assets of the Trust.

›› Scheme Information in the Financial ReportThe value of the Scheme’s assets as at the end of the financial year is disclosed in the Statements of Financial Position as “Total Assets” and the basis of valuation is included in Note 2(a) to the financial statements.

Fees paid to the Responsible Entity out of Scheme property during the financial year are disclosed in Note 4(a) to the financial statements.

The Indirect Cost Ratio for each Fund is disclosed in Note 4(d) to the financial statements.

The number of units in the Scheme held by the Responsible Entity or its associates as at the end of the financial year are disclosed in Note 7(d) to the financial statements.


›› Environmental RegulationThe operations of the Trust are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law.

›› Rounding of AmountsThe Trust is of a kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance with that Class Order, amounts in the Financial Statements have been rounded to the nearest thousand dollars, unless otherwise indicated.

›› Auditor’s Independence DeclarationThe auditor’s independence declaration is included on page 19 of the financial report.

Signed in accordance with a resolution of the Board of Directors pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

Michael Monaghan Managing Director 27 August 2013



› Auditor’s Independence Declaration


› Independent Auditor’s Report


› Financial Statements for the Financial Year ended 30 June 2013

›› Statements of Profit or Loss and other Comprehensive Income

CASH FUND

FIXED INTEREST FUND

CAPITAL STABLE FUND

MODERATE FUND

NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

INCOME

Interest 28 39 1 1 18 24 3 2

Distributions received 2,256 3,073 612 157 5,285 4,045 1,199 311

Unrealised changes in the fair value of investments

- - (292) 106 918 712 543 107

Realised gains/(losses) on disposal of investments

- - (13) (5) 3 (25) (19) (16)

TOTAL INCOME 2,284 3,112 (308) 259 6,224 4,756 1,726 404

EXPENSES

Responsible Entity’s fee 4(a) 658 652 88 25 1,223 1,061 227 65

TOTAL EXPENSES 658 652 88 25 1,223 1,061 227 65

PROFIT/(LOSS)

ATTRIBUTABLE TO UNIT HOLDERS

1,626 2,460 220 234 5,001 3,695 1,499 339

FINANCE COSTS ATTRIBUTABLE TO UNIT HOLDERS

Distributions to unit holders 3(b) 1,626 2,460 525 133 4,080 3,008 975 248

Change in net assets attributable to unit holders

- - (305) 101 921 687 524 91

1,626 2,460 220 234 5,001 3,695 1,499 339

NET PROFIT/(LOSS) - - - - - - - -

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

- - - - - - - -

The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.



›› Statements of Profit or Loss and other Comprehensive Income

BALANCED FUND

GROWTH FUND

GROWTH PLUS FUND

AUSTRALIAN EQUITIES FUND

INTERNATIONAL EQUITIES FUND

NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

INCOME

Interest 13 17 13 16 - - 1 2 - -

Distributions received 5,252 4,427 2,465 2,437 54 21 183 33 15 1

Unrealised changes in the fair value of investments

11,577 (1,321) 9,968 (991) 192 6 311 (39) 124 (1)

Realised gains/(losses) on disposal of investments

210 (1,168) 101 (2,256) 11 - - (2) - -

TOTAL INCOME 17,052 1,955 12,547 (794) 257 27 495 (6) 139 -

EXPENSES

Responsible Entity’s fee 4(a) 1,404 1,406 814 909 15 6 40 7 5 -

TOTAL EXPENSES 1,404 1,406 814 909 15 6 40 7 5 -

PROFIT/(LOSS) ATTRIBUTABLE TO UNIT HOLDERS

15,648 549 11,733 (1,703) 242 21 455 (13) 134 -

FINANCE COSTS ATTRIBUTABLE TO UNIT HOLDERS

Distributions to unit holders 3(b) 3,861 3,038 1,664 1,544 39 15 144 28 10 1

Change in net assets attributable to unit holders

11,787 (2,489) 10,069 (3,247) 203 6 311 (41) 124 (1)

15,648 549 11,733 (1,703) 242 21 455 (13) 134 -

NET PROFIT/(LOSS) - - - - - - - - - -

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

- - - - - -

- - - -

The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.


›› Statements of Financial Position as at 30 June 2013

CASH FUND FIXED INTEREST FUND

CAPITAL STABLE FUND

MODERATE FUND

NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

ASSETS

Cash and cash equivalents 9(a) 4,048 4,671 201 165 4,355 4,358 572 572

Financial assets at fair value through profit or loss

8 65,121 66,264 8,956 5,344 104,425 88,719 28,096 10,958

Distribution receivable 501 681 340 69 2,548 1,074 744 142

Other accounts receivable 860 266 81 2 215 209 227 91

TOTAL ASSETS 70,530 71,882 9,578 5,580 111,543 94,360 29,639 11,763

LIABILITIES

Accounts payable and accrued expenses

905 627 183 11 331 97 42 11

Distribution payable 3(b) 338 520 315 57 2,224 802 637 114

TOTAL LIABILITIES (excluding liabilities attributable to unit holders)

1,243 1,147 498 68 2,555 899 679 125

NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

5(b) 69,287 70,735 9,080 5,512 108,988 93,461 28,960 11,638

Liabilities attributable to unit holders

(69,287) (70,735) (9,080) (5,512) (108,988) (93,461) (28,960) (11,638)

NET ASSETS - - - - - - - -

The above Statements of Financial Position should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.




›› Statements of Financial Position as at 30 June 2013

BALANCED FUND

GROWTH FUND

GROWTH PLUS FUND



NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

ASSETS

Cash and cash equivalents 9(a) 3,974 3,905 3,949 4,031 - - 99 30 - 30

Financial assets at fair value through profit or loss

8 121,809 113,214 61,664 64,617 1,591 755 4,734 1,370 1,188 44

Distribution receivable 2,638 1,457 1,154 813 28 9 97 15 10 1

Other accounts receivable 534 40 53 11 2 - 3 1 - -

TOTAL ASSETS 128,955 118,616 66,820 69,472 1,621 764 4,933 1,416 1,198 75

LIABILITIES

Accounts payable and accrued expenses

208 14 109 306 50 1 5 1 1 -

Distribution payable 3(b) 2,255 1,117 1,158 1,139 28 12 101 25 8 1

TOTAL LIABILITIES (excluding liabilities attributable to unit holders)

2,463 1,131 1,267 1,445 78 13 106 26 9 1

NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

5(b) 126,492 117,485 65,553 68,027 1,543 751 4,827 1,390 1,189 74

Liabilities attributable to unit holders

(126,492) (117,485) (65,553) (68,027) (1,543) (751) (4,827) (1,390) (1,189) (74)

NET ASSETS - - - - - - - - - -

The above Statements of Financial Position should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.


›› Statements of Changes in Equity for the Financial Year ended 30 June 2013

EQUITY ATTRIBUTABLE TO UNIT HOLDERS

CASH FUND $’000

FIXED INTEREST FUND $’000

CAPITAL STABLE FUND $’000

MODERATE FUND $’000

Balance at 1 July 2011 - - - -

Total comprehensive income for the year

- - - -

Balance at 30 June 2012 - - - -


- - - -

Balance at 30 June 2013 - - - -

EQUITY ATTRIBUTABLE TO UNIT HOLDERS

BALANCED FUND $’000

GROWTH FUND $’000

GROWTH PLUS FUND $’000

AUSTRALIAN EQUITIES

FUND $’000


$’000

Balance at 1 July 2011 - - - - -


- - - - -

Balance at 30 June 2012 - - - - -


- - - - -

Balance at 30 June 2013 - - - - -

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.




›› Statements of Cash Flows for the Financial Year ended 30 June 2013


CAPITAL STABLE FUND

MODERATE FUND

Inflows (Outflows)

NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 28 39 1 1 18 23 3 2

Responsible Entity’s fees paid (699) (701) (89) (23) (1,281) (1,134) (224) (59)

Reduced input tax credit received

47 48 7 - 88 78 18 -

Net cash flows used by operating activities

9(b) (624) (614) (81) (22) (1,175) (1,033) (203) (57)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for purchase of investments

(57,371) (45,100) (7,281) (5,961) (19,632) (9,000) (18,011) (12,786)

Receipts from sale of investments

60,950 48,400 3,704 807 8,658 9,200 1,995 2,088

Net cash flows generated/(used) by investing activities

3,579 3,300 (3,577) (5,154) (10,974) 200 (16,016) (10,698)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from applications by unit holders

120,646 104,978 7,904 6,530 34,300 24,188 19,297 13,539

Payments for redemptions by unit holders

(124,163) (107,659) (4,193) (1,187) (22,047) (22,895) (3,044) (2,210)

Distributions received/(paid) (61) (100) (17) (2) (107) (159) (34) (2)

Net cash flows generated/(used) by financing activities

(3,578) (2,781) 3,694 5,341 12,146 1,134 16,219 11,327

Net increase/(decrease) in cash and cash equivalents

(623) (95) 36 165 (3) 301 - 572

Cash and cash equivalents at the beginning of the financial year

4,671 4,766 165 - 4,358 4,057 572 -

Cash and cash equivalents at the end of the financial year

9(a) 4,048 4,671 201 165 4,355 4,358 572 572

The above Statements of Cash Flows should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.


›› Statements of Cash Flows for the Financial Year ended 30 June 2013 (continued)

BALANCED FUND

GROWTH FUND GROWTH PLUS FUND



Inflows (Outflows)

NOTE 2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 13 17 13 16 - - 1 2 - -

Responsible Entity’s fees paid

(1,479) (1,529) (866) (996) (15) (5) (39) (6) (5) -

Reduced input tax credit received

101 107 60 70 1 - 3 - - -

Net cash flows used by operating activities

9(b) (1,365) (1,405) (793) (910) (14) (5) (35) (4) (5) -

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for purchase of investments

(8,638) (4,100) (4,674) (3,100) (1,001) (744) (3,352) (1,817) (1,140) (47)

Receipts from sale of investments

15,900 26,600 19,820 22,460 403 7 399 424 128 3

Net cash flows generated/(used) by investing activities

7,262 22,500 15,146 19,360 (598) (737) (2,953) (1,393) (1,012) (44)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from applications by unit holders

17,148 11,936 6,198 4,874 1,012 744 3,420 1,742 1,102 77

Payments for redemptions by unit holders

(22,823) (32,480) (20,577) (23,139) (409) (2) (359) (315) (115) (3)

Distributions received/(paid) (153) (447) (56) (166) 9 - (4) - - -

Net cash flows generated/(used) by financing activities

(5,828) (20,991) (14,435) (18,431) 612 742 3,057 1,427 987 74

Net increase/(decrease) in cash and cash equivalents

69 104 (82) 19 - - 69 30 (30) 30

Cash and cash equivalents at the beginning of the financial year

3,905 3,801 4,031 4,012 - - 30 - 30 -

Cash and cash equivalents at the end of the financial year

9(a) 3,974 3,905 3,949 4,031 - - 99 30 - 30

The above Statements of Cash Flows should be read in conjunction with the accompanying notes and it is consolidated with both Class A and Class B schemes for each Fund.



›› 1. The TrustThe State Super Investment Fund (‘the Trust’) was established 22 November 1991.

The Trust offers 9 managed investment schemes ‘the Funds’. Each Fund has a separate investment strategy and the assets of each Fund are managed by external specialist investment managers through a series of discrete investment trusts of which State Super Financial Services Australia Limited is the Trustee. The Trust’s Product Disclosure Statement sets out details of the investment process.

The Responsible Entity for the 9 Funds comprising the Trust is State Super Financial Services Australia Limited (ABN 86 003 742 756).

‘THE FUNDS’:CLASS A

EFFECTIVE DATECLASS B

EFFECTIVE DATE

State Super Investment Fund – Cash Fund 22-Nov-1991 2-Apr-2013

State Super Investment Fund – Capital Stable Fund 22-Nov-1991 2-Apr-2013

State Super Investment Fund – Balanced Fund 22-Nov-1991 2-Apr-2013

State Super Investment Fund – Growth Fund 15-Jun-1997 2-Apr-2013

State Super Investment Fund – Fixed Interest Fund 18-Jul-2011 2-Apr-2013

State Super Investment Fund – Moderate Fund 18-Jul-2011 2-Apr-2013

State Super Investment Fund – Growth Plus Fund 18-Jul-2011 Not Applicable

State Super Investment Fund – Australian Equities Fund 18-Jul-2011 2-Apr-2013

State Super Investment Fund – International Equities Fund 18-Jul-2011 2-Apr-2013

To give effect to the investment objectives of the nine Funds of the Trust, the Responsible Entity has established similarly named Feeder Funds, into which the respective Funds predominantly invest. The Feeder Funds invest in one or more Sector Trusts, each taking on the name of the asset class in which it invests.

There are nine Feeder Funds:

›◆ Cash Fund

›◆ Capital Stable Fund

›◆ Balanced Fund

›◆ Growth Fund

›◆ Fixed Interest Fund

›◆ Moderate Fund

›◆ Growth Plus Fund

›◆ Australian Equities Fund

›◆ International Equities Fund

› Notes to the Financial Statements for the Financial Year ended 30 June 2013


›› 1. The Trust (continued)There are ten Sector Trusts:

›◆ Australian Equities

›◆ Australian Fixed Interest

›◆ Australian Unlisted Property

›◆ Cash

›◆ Enhanced Cash

›◆ Global High Yield Debt

›◆ Global Listed Infrastructure Securities

›◆ Global Listed Property Securities

›◆ International Equities

›◆ International Fixed Interest

The Trustee of the Feeder Funds and Sector Trusts is State Super Financial Services Australia Limited.

›› 2. Summary of Accounting Policies

Statement of complianceThe financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes thereto comply with International Financial Reporting Standards.

The financial statements were authorised for issue by the directors of the Responsible Entity on 27 August 2013.

Basis of preparationThe financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian Dollars.

In the application of the Trust’s accounting policy, judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources are made. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making these judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Judgments made that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.




›› 2. Summary of Accounting Policies (continued)

Adoption of new and revised Accounting StandardsIn the current year, the Funds have adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for annual reporting periods beginning on 1 July 2012.

The adoption of these new and revised Standards and Interpretations has made no financial impact on the financial statements of the Funds.

The following new and revised Standards and Interpretations have been adopted in these financial statements:

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project.

AASB 124 Related Party Disclosures (revised December 2009), AASB 2009-12 Amendments to Australian Accounting Standards.

At the date of authorisation of the financial report, the following Standards and Interpretations which are expected to be relevant were in issue but not yet effective:

Standard / Interpretation Effective for annual reporting periods

beginning on or after

Expected to be initially applied in the financial

year ending

AASB 9 Financial instruments; and AASB 2009-11

Amendments to Australian Accounting Standards arising

from AASB 9

1 January 2015 30 June 2016

AASB 10 Consolidated Financial Statements; and

AASB 2011-7 Amendments to Australian Accounting

Standards arising from the Consolidation and Joint

Arrangements Standards


AASB 13 Fair Value Measurement and

AASB 2011-8 Amendments to Australian Standards

arising from AASB 13



Standards arising from Annual Improvements 2009-2011

Cycle



Standards – Mandatory Effective Date of AASB 9 and

Transition Disclosures


These Standards and Interpretations will be first applied in the financial report of the Funds that relates to the annual reporting period beginning after the effective date of each pronouncement. The Directors anticipate that the adoption of these standards will not have a significant financial effect on the Fund.

Significant accounting policiesThe significant accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2013 and the comparative information presented in these financial statements.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:



(a) Valuation of financial assets at fair value To give effect to the investment objectives of the Cash, Fixed Interest, Capital Stable, Moderate,

Balanced, Growth, Growth Plus, Australian Equities and International Equities Funds of the Trust, the Funds predominantly invest in similarly named Feeder Funds. The Feeder Funds invest in one or more Sector Trusts, each taking on the name of the asset class in which it invests.

The Feeder Funds and Sector Trusts are unit trusts. The Funds recognise their investment in Feeder Funds at fair value through profit and loss. Unit prices of the unit trusts reflect the fair value of the underlying assets.

Net market values of the underlying assets are determined after deducting selling costs, as follows:

›◆ Listed securities, foreign securities quoted on a recognized stock exchange, derivative financial instruments and government and other fixed interest securities are stated at market quotations as at the reporting date

›◆ Unit trust and managed fund investments are stated at the redemption price quoted by the trust managers as at the reporting date

›◆ Unlisted securities are stated at the Trustee’s valuation based on the advice of the Fund’s investment managers as at the reporting date

›◆ Life office policies included in the financial statements are based on the present values of the policies as advised by the insurer as at the reporting date

›◆ Investment properties, which comprise readily realisable interests in land and buildings held for the purpose of letting to produce rental income, are included in the financial statements on the basis of the Trustee’s valuation of net market value as at the reporting date.

(b) Accounting for financial assets at fair value Investment transactions are recorded on a trade date basis. The investments are stated at fair value,

with any unrealised gains or losses on remeasurement recognised in profit or loss. Fair value is determined in the manner described in Note 10(d). On disposal, proceeds are set against the carrying value and the resulting realised gain or loss is included in the Statements of Comprehensive Income.

(c) Investment income Distribution income is recognised on a receivable basis as of the date the unit value is quoted ex-

distribution.

Interest revenue is recognised on a time proportionate basis taking into account the effective yield on the financial assets.

Gains or losses arising from changes in the fair values of financial instruments are included in profit or loss in the period in which they arise.

(d) Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term

highly liquid investments.

(e) Income tax Under current income tax legislation the Funds are not liable to pay income tax as the net income

of the Funds is assessable in the hands of the beneficiaries (the unit holders) who are ‘presently entitled’ to the income of the Funds. There is no income of the Funds to which the unit holders are not presently entitled and additionally, the Consolidated Constitution of the Trust requires the distribution of the full amount of the net income of the Funds to the unit holders each period.

As a result, deferred taxes have not been recognised in the financial statements in relation to differences between the carrying amounts of assets and liabilities and their respective tax bases, including taxes on capital gains which could arise in the event of a sale of investments for the amount




›› 2. Summary of Accounting Policies (continued) at which they are stated in the financial statements. In the event that taxable gains are realised by the

Fund, these gains would be included in the taxable income that is assessable in the hands of the unit holders as noted above.

Realised capital losses are not distributed to unit holders but are retained within the Sector Trusts to be offset against any realised capital gains. The benefit of any carried forward capital losses are also not recognised in the financial statements. If in any period realised capital gains exceed realised capital losses, including those carried forward from earlier periods and eligible for offset, the excess is included in taxable income that is assessable in the hands of unit holders in the period and is distributed to unit holders in accordance with the requirements of the Consolidated Constitution of the Trust.

(f) Distributions In accordance with the Consolidated Constitution of the Trust, the Funds fully distribute their

distributable income to unit holders by cash or reinvestment in the Fund.

The Cash, Fixed Interest, Capital Stable, Moderate and Balanced Funds distribute income to unit holders on a quarterly basis. Distributable income of the Growth, Growth Plus, Australian Equities and International Equities Funds is distributed to unit holders half yearly.

Distributions are recognised in the Statements of Comprehensive Income as finance costs attributable to unit holders.

The distribution amount payable to investors as at the reporting date is recognised separately on the Statements of Financial Position as unit holders are presently entitled to the distributable income as at 30 June 2013.

(g) Increase/decrease in net assets attributable to unit holders Non-distributable income is transferred directly to net assets attributable to unit holders and may

consist of unrealised changes in the fair value of financial instruments at fair value through profit and loss, accrued income not yet assessable, expenses provided or accrued for which are not yet deductible, net capital losses and tax free or tax deferred income. Net capital gains on the realisation of any financial instruments at fair value through profit or loss (including any adjustments for tax deferred income previously taken directly to net assets attributable to unit holders) and accrued income not yet assessable will be included in the determination of distributable income in the same year which it becomes assessable for tax.

(h) Accounts payable and accrued expenses Accounts payable and accrued expenses are recognised when the Fund becomes obliged to make

future payments resulting from the purchase of goods and services. Payables are measured at their nominal values.

(i) Financial liabilities issued by the Funds In accordance with AASB 132 unit holders funds are classified as a financial liability and disclosed as

such in the Statements of Financial Position.

(j) Goods and Services Tax (‘GST’) GST is usually incurred on the costs of various services provided to and paid by each Fund. The

current rate of GST is 10%. Each Fund is eligible to claim a Reduced Input Tax Credit (‘RITC’) at the rate of 62.08% (2012: 75%) of the GST incurred on these services.

In the Statements of Comprehensive Income, fees and expenses have been recognised inclusive of the GST paid less the RITC claimed from the Australian Taxation Office (‘ATO’). In the Statements of Financial Position, creditors and accruals are shown inclusive of GST payable, while the amount of the RITC recoverable from the ATO is included in sundry debtors. Cash flows relating to GST are included in the Statements of Cash Flows on a gross basis.



(k) Applications and redemptions Applications received for units in each Fund are recorded at the unit price on issue for units in the

Fund. All Funds are open to additional investments.

Redemptions from each Fund are recorded at the unit price on issue for units in the Fund. The proceeds of redemption from a Fund may be applied to the acquisition of units in another Fund.

Unit prices are determined as the net asset value of the Fund divided by the number of units on issue.

(l) Rounding off of amounts The Trust is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance

with that Class Order amounts in the Financial Statements have been rounded to the nearest thousand dollars, unless otherwise indicated.

(m) The Trust financial reports reported in a single report The Responsible Entity for the Trust is State Super Financial Services Australia Limited (ABN 86 003

742 756). As such, the Trust is of a kind referred to in ASIC Class Order 06/441 which allows the financial statements of each Fund in the Trust to be reported using a single document. The financial statements and notes thereon have been prepared under ASIC Class Order 06/441.

›› 3. Distributions

(a) Distributions of Income

Details of the distributions paid or payable to unit holders during the year ended 30 June 2013 were as follows:

Quarter ended

2013

CASH FUND c/unit

FIXED INTEREST FUND c/unit

CAPITAL STABLE FUND c/unit

MODERATE FUND c/unit

BALANCED FUND c/unit

CLASS A B A B A B A B A B

30 September 2012 0.68 - 0.42 - 0.59 - 0.32 - 0.30 -

31 December 2012 0.62 - 1.14 - 0.82 - 0.72 - 0.73 -

31 March 2013 0.55 - 0.85 - 0.70 - 0.61 - 0.59 -

30 June 2013 0.53 0.60 3.51 4.30 2.29 2.78 2.32 2.87 2.23 2.17

TOTAL 2.38 0.60 5.92 4.30 4.40 2.78 3.97 2.87 3.85 2.17

2012

TOTAL 3.65 - 3.80 - 3.76 - 2.99 - 2.88 -

Quarter ended

2013

GROWTH FUND c/unit

GROWTH PLUS FUND c/unit


c/unit


c/unit

CLASS A B A B A B A B

30 September 2012 - - - - - - - -

31 December 2012 0.77 - 0.84 - 1.51 - 0.33 -

31 March 2013 - - - - - - - -

30 June 2013 1.84 2.15 2.79 - 2.34 2.30 0.81 0.89

TOTAL 2.61 2.15 3.63 - 3.85 2.30 1.14 0.89

2012

TOTAL 1.98 - 2.13 - 2.92 - 0.87 -




›› 3. Distributions (continued)

(b) Distribution Paid and Payable2013 $’000

2013 c/unit

2012 $’000

2012 c/unit

Cash Fund – Class A

Distributions paid during the year 1,288 1.85 1,940 2.85

Distribution payable – June 336 0.53 520 0.80

1,624 2.38 2,460 3.65

Cash Fund – Class B

Distributions paid during the year - - - -

Distribution payable – June 2 0.60 - -

2 0.60 - -

Fixed Interest Fund – Class A

Distributions paid during the year 210 2.41 76 2.72


507 5.92 133 3.80

Fixed Interest Fund – Class B



18 4.30 - -

Capital Stable Fund – Class A


Distribution payable – June 2,166 2.29 802 0.96

4,022 4.40 3,008 3.76

Capital Stable Fund – Class B



58 2.78 - -

Moderate Fund – Class A



931 3.97 248 2.99

Moderate Fund – Class B



44 2.87 - -

Balanced Fund – Class A


Distribution payable – June 2,211 2.23 1,117 1.08

3,817 3.85 3,038 2.88



›› 3. Distributions (continued)

(b) Distribution Paid and Payable2013 $’000

2013 c/unit

2012 $’000

2012 c/unit

Balanced Fund – Class B



44 2.17 - -

Growth Fund – Class A


Distribution payable – June 1,136 1.84 1,139 1.50

1,642 2.61 1,544 1.98

Growth Fund – Class B



22 2.15 - -

Growth Plus Fund – Class A



39 3.63 15 2.13

Australian Equities Fund – Class A



131 3.85 28 2.92

Australian Equities Fund – Class B



13 2.30 - -

International Equities Fund – Class A

Distributions paid during the year 2 0.33 - -


8 1.14 1 0.87

International Equities Fund – Class B



2 0.89 - -



›› 4. Expenses

(a) Responsible Entity’s Fee Fees charged by the Responsible Entity State Super Financial Services Australia Limited (ABN 86 003

742 756) for performing its respective obligations are calculated daily as a rate per annum of the net asset value of each Fund and paid monthly from each Fund. The Consolidated Constitution of the Trust permits the Responsible Entity to charge a fee of up to 1.5% per annum of the net asset value of each Fund. However, during the year ended 30 June 2013, the Responsible Entity charged fees which were lower than the maximum fee as follows:

CASH FUND FIXED INTEREST FUND CAPITAL STABLE FUND

% pa % pa % pa % pa % pa % pa

CLASS A B A B A B

2013

Responsible Entity fee (excl. GST) 0.9274 0.3494 0.9493 0.3048 1.1634 0.4341

Add GST 0.0927 0.0349 0.0949 0.0305 0.1163 0.0434

Less RITC (0.0576) (0.0217) (0.0589) (0.0189) (0.0722) (0.0269)

Net Charge to the Funds 0.9625 0.3626 0.9853 0.3164 1.2075 0.4506

2012

0.9582 - 0.9991 - 1.1965 -

MODERATE FUND BALANCED FUND GROWTH FUND

% pa % pa % pa % pa % pa % pa

CLASS A B A B A B

2013

Responsible Entity fee (excl. GST) 1.0849 0.3509 1.0916 0.3936 1.1513 0.4227

Add GST 0.1085 0.0351 0.1092 0.0394 0.1151 0.0423

Less RITC (0.0674) (0.0218) (0.0678) (0.0244) (0.0715) (0.0262)

Net Charge to the Funds 1.1260 0.3642 1.1330 0.4086 1.1949 0.4388

2012

1.1215 - 1.1295 - 1.1786 -



GROWTH PLUS FUND

% pa % pa % pa % pa % pa

CLASS A B A B A

2013

Responsible Entity fee (excl. GST) 1.1834 0.4530 1.0759 0.3515 1.1214

Add GST 0.1183 0.0453 0.1076 0.0352 0.1121

Less RITC (0.0735) (0.0281) (0.0668) (0.0218) (0.0696)

Net Charge to the Funds 1.2282 0.4702 1.1167 0.3649 1.1639

2012

1.2575 - 1.1226 - 1.1364



›› 4. Expenses (continued)

(b) Investment Management Fee External investment managers provide investment management services directly to the Feeder Funds

and Sector Trusts and accordingly investment management fees are paid to the investment managers out of the assets of the underlying Feeder Funds and Sector Trusts. These fees are included in the Indirect Cost Ratio of the relevant Fund, as shown in Note 4(d).

(c) Custody Fee The Custodian of the Cash, Fixed Interest, Capital Stable, Moderate, Balanced, Growth, Growth Plus,

Australian Equities and International Equities Funds receives a fee for safe custody services. Custody fees are paid to the Custodian out of the assets of the underlying Sector Trusts and are included in the Indirect Cost Ratio of the relevant Fund, as shown in Note 4(d).

(d) Indirect Cost Ratio (‘ICR’) The ICR for each Fund is the expression of the total fees and charges of a Fund as a percentage

of the net asset value of the Fund. It is calculated as the aggregate of the total amounts paid to the Responsible Entity, the Custodian and other expenses payable either directly or indirectly by the Fund including the fees paid to the external investment managers, expressed as a percentage of the average net asset value of each Fund.

The ICR of each Fund for the past 3 years is shown in the following table:

2013 2012 2011

Class A % % %

Cash Fund 0.99 0.99 0.99

Fixed Interest Fund 1.15 1.15 -

Capital Stable Fund 1.30 1.30 1.30

Moderate Fund 1.35 1.35 -

Balanced Fund 1.40 1.40 1.40

Growth Fund 1.50 1.50 1.50

Growth Plus Fund 1.50 1.50 -

Australian Equities Fund 1.50 1.50 -

International Equities Fund 1.50 1.50 -

2013 2012 2011

Class B % % %

Cash Fund 0.39 - -

Fixed Interest Fund 0.50 - -

Capital Stable Fund 0.57 - -

Moderate Fund 0.61 - -

Balanced Fund 0.70 - -

Growth Fund 0.77 - -

Australian Equities Fund 0.77 - -

International Equities Fund 0.77 - -



›› 4. Expenses (continued)

(e) Reimbursement of Operating Expenses Under the Consolidated Constitution of the Trust, certain administrative, legal and other expenses

directly related to the operations of the Trust which have been incurred and paid by the Responsible Entity on behalf of the Trust, are subject to reimbursement from the Trust.

For the year ended 30 June 2013, the Responsible Entity elected to waive its right of reimbursement from the Trust for all of the expenses incurred by it on behalf of the Trust.

(f) Remuneration of Auditors The Trust’s auditor is the Auditor General of New South Wales. Deloitte Touche Tohmatsu has been

appointed agent of the Auditor General. During the financial year, the following fees (shown exclusive of GST) were paid to the Auditor General or Deloitte Touche Tohmatsu by the Responsible Entity from its own resources in connection with the Trust.

2013 $

2012 $

Audit of the financial statements – Audit Office of New South Wales 64,745 62,500

Audit of the compliance plans – Deloitte Touche Tohmatsu 25,750 25,000

90,495 87,500

›› 5. Net Assets Attributable to Unit Holders

(a) Number of Units Attributable to Unit Holders Movements in the number of units on issue during the year were as follows:


CLASS A 2013 Units 2012 Units 2013 Units 2012 Units

Units on issue at the beginning of the financial year 70,735,309 69,853,939 5,279,372 -

Units issued during the year 120,888,044 107,737,427 7,272,795 6,443,500

Units redeemed during the year (123,161,106) (106,856,057) (4,070,253) (1,164,128)

Units on issue at the end of the financial year 68,462,247 70,735,309 8,481,914 5,279,372

CAPITAL STABLE FUND MODERATE FUND


Units on issue at the beginning of the financial year 83,857,737 79,498,606 11,537,921 -






›› 5. Net Assets Attributable to Unit Holders (continued)

(a) Number of Units Attributable to Unit Holders (continued)

BALANCED FUND GROWTH FUND


Units on issue at the beginning of the financial year 103,591,805 115,039,077 75,779,619 91,427,109




AUSTRALIAN EQUITIES FUND INTERNATIONAL EQUITIES FUND


Units on issue at the beginning of the financial year 1,478,882 - 74,810 -

Units issued during the year 2,604,291 1,793,141 736,470 78,006

Units redeemed during the year (329,529) (314,259) (107,285) (3,196)

Units on issue at the end of the financial year 3,753,644 1,478,882 703,995 74,810

GROWTH PLUS FUND

CLASS A 2013 Units 2012 Units

Units on issue at the beginning of the financial year 799,124 -

Units issued during the year 984,329 800,979

Units redeemed during the year (393,996) (1,855)

Units on issue at the end of the financial year 1,389,457 799,124

As stipulated within the Consolidated Constitution of the Trust, each unit confers on its holder an equal interest in the net assets of the Fund to which the unit relates. This interest does not extend to an interest to the underlying assets in each Fund. There are no separate classes of units in the Funds.

Movements in the number of units on issue during the year were as follows:


CLASS B 2013 Units 2012 Units 2013 Units 2012 Units

Units on issue at the beginning of the financial year - - - -

Units issued during the year 2,107,598 - 452,395 -

Units redeemed during the year (1,283,346) - (42,049) -

Units on issue at the end of the financial year 824,252 - 410,346 -




(a) Number of Units Attributable to Unit Holders (continued)




Units issued during the year 2,457,157 - 1,683,408 -

Units redeemed during the year (378,359) - (126,375) -

Units on issue at the end of the financial year 2,078,798 - 1,557,033 -




Units issued during the year 2,088,034 - 1,039,023 -

Units redeemed during the year (47,579) - (22) -

Units on issue at the end of the financial year 2,040,455 - 1,039,001 -

AUSTRALIAN EQUITIES FUND INTERNATIONAL EQUITIES FUND



Units issued during the year 578,575 - 257,158 -

Units redeemed during the year - - - -

Units on issue at the end of the financial year 578,575 - 257,158 -

As stipulated within the Consolidated Constitution of the Trust, each unit confers on its holder an equal interest in the net assets of the Fund to which the unit relates. This interest does not extend to an interest to the underlying assets in each Fund. There are no separate classes of units in the Funds.




(b) Net Assets Attributable to Unit Holders Movements in the value of units on issue during the year were as follows:


CLASS A 2013 $’000

2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 70,735 69,854 5,512 -

Non distributable income - - (101) -

Value of units on issue at beginning of the period 70,735 69,854 5,411 -

Applications for the period 119,141 105,238 7,442 6,530

Redemptions for the period (123,161) (106,856) (4,313) (1,193)

Value of units issued upon reinvestment of distributions 1,747 2,499 250 74

Movement in value of units on issue during the period (2,273) 881 3,379 5,411

Non distributable income - - (182) 101

Net assets attributable to unit holders 68,462 70,735 8,608 5,512


CLASS A 2013 $’000

2012 $’000

2013 $’000

2012 $’000


Non distributable income (1,058) (370) (91) -





Movement in value of units on issue during the period 12,092 4,877 14,922 11,547

Non distributable income 2,048 1,058 656 91





(b) Net Assets Attributable to Unit Holders (continued)


CLASS A 2013 $’000

2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 117,485 132,728 68,027 85,156

Non distributable income 12,757 10,268 24,058 20,810

Value of units on issue at beginning of the period 130,242 142,996 92,085 105,966



Value of units issued upon reinvestment of distributions 2,570 7,507 1,589 4,343

Movement in value of units on issue during the period (5,254) (12,754) (13,818) (13,881)

Non distributable income (918) (12,757) (13,952) (24,058)


GROWTH PLUS FUND AUSTRALIAN EQUITIES FUND

CLASS A 2013 $’000

2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 751 - 1,390 -

Non distributable income (6) - 43 -

Value of units on issue at beginning of the period 745 - 1,433 -

Applications for the period 1,014 744 2,730 1,742

Redemptions for the period (447) (2) (359) (315)

Value of units issued upon reinvestment of distributions 22 3 64 6

Movement in value of units on issue during the period 589 745 2,435 1,433

Non distributable income 209 6 284 (43)

Net assets attributable to unit holders 1,543 751 4,152 1,390






CLASS A 2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 74 -

Non distributable income - -

Value of units on issue at beginning of the period 74 -

Applications for the period 790 77

Redemptions for the period (114) (3)

Value of units issued upon reinvestment of distributions 2 -

Movement in value of units on issue during the period 678 74

Non distributable income 107 -

Net assets attributable to unit holders 859 74


CLASS B 2013 $’000

2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period - - - -

Non distributable income - - - -

Value of units on issue at beginning of the period - - - -

Applications for the period 2,108 - 544 -

Redemptions for the period (1,283) - (50) -

Value of units issued upon reinvestment of distributions - - - -

Movement in value of units on issue during the period 825 - 494 -


Net assets attributable to unit holders 825 - 472 -






CLASS B 2013 $’000

2012 $’000

2013 $’000

2012 $’000




Applications for the period 2,973 - 2,030 -

Redemptions for the period (459) - (153) -


Movement in value of units on issue during the period 2,514 - 1,877 -

Non distributable income (69) - (42) -

Net assets attributable to unit holders 2,445 - 1,835 -


CLASS B 2013 $’000

2012 $’000

2013 $’000

2012 $’000




Applications for the period 2,532 - 1,274 -

Redemptions for the period (57) - - -


Movement in value of units on issue during the period 2,475 - 1,274 -

Non distributable income (53) - (36) -

Net assets attributable to unit holders 2,422 - 1,238 -







CLASS B 2013 $’000

2012 $’000

2013 $’000

2012 $’000




Applications for the period 693 - 313 -

Redemptions for the period - - - -

Value of units issued upon reinvestment of distributions -

-

-

-

Movement in value of units on issue during the period 693 - 313 -


Net assets attributable to unit holders 675 - 330 -


CONSOLIDATED 2013 $’000

2012 $’000

2013 $’000

2012 $’000







Movement in value of units on issue during the period (1,448) 881 3,873 5,411

Non distributable income - - (204) 101








2012 $’000

2013 $’000

2012 $’000


Non distributable income (1,058) (370) (91) -





Movement in value of units on issue during the period 14,606 4,877 16,799 11,547

Non distributable income 1,979 1,058 614 91




2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 117,485 132,728 68,027 85,156

Non distributable income 12,757 10,268 24,058 20,810

Value of units on issue at beginning of the period 130,242 142,996 92,085 105,966



Value of units issued upon reinvestment of distributions 2,570 7,507 1,589 4,343

Movement in value of units on issue during the period (2,779) (12,754) (12,544) (13,881)

Non distributable income (971) (12,757) (13,988) (24,058)








2012 $’000

2013 $’000

2012 $’000

Net assets attributable to unit holders at beginning of period 751 - 1,390 -


Value of units on issue at beginning of the period 745 - 1,433 -

Applications for the period 1,014 744 3,423 1,742

Redemptions for the period (447) (2) (359) (315)

Value of units issued upon reinvestment of distributions 22 3 64 6

Movement in value of units on issue during the period 589 745 3,128 1,433

Non distributable income 209 6 266 (43)

Net assets attributable to unit holders 1,543 751 4,827 1,390



2012 $’000

Net assets attributable to unit holders at beginning of period 74 -

Non distributable income - -

Value of units on issue at beginning of the period 74 -

Applications for the period 1,103 77

Redemptions for the period (114) (3)

Value of units issued upon reinvestment of distributions 2 -

Movement in value of units on issue during the period 991 74

Non distributable income 124 -

Net assets attributable to unit holders 1,189 74



›› 6. Net asset backing of each unitThe net tangible assets attributable to unit holders of each unit in the Trust as at 30 June 2013 was:

2013 $

2012 $

2013 $

2012 $

CLASS A A B B

CASH FUND 1.0000 1.0000 1.0000 -

FIXED INTEREST FUND 1.0149 1.0441 1.1489 -

CAPITAL STABLE FUND 1.1284 1.1145 1.1760 -

MODERATE FUND 1.0601 1.0087 1.1782 -

BALANCED FUND 1.2526 1.1341 1.1868 -

GROWTH FUND 1.0426 0.8977 1.1914 -

GROWTH PLUS FUND 1.1103 0.9398 - -

AUSTRALIAN EQUITIES FUND 1.1061 0.9396 1.1665 -

INTERNATIONAL EQUITIES FUND 1.2200 0.9810 1.2823 -

›› 7. Related party disclosures(a) Responsible Entity The Responsible Entity of the nine Funds comprising the Trust is State Super Financial Services

Australia Limited (ABN 86 003 742 756). State Super Financial Services Australia Limited is an unlisted public company incorporated and operating in Australia. The Responsible Entity is wholly owned by the Pooled Funds of which the SAS Trustee Corporation is the Trustee.

Registered office and principal place of business of State Super Financial Services Australia Limited is:

Level 7 83 Clarence Street SYDNEY NSW 2000 Tel: (02) 9333 9555

Administration of the nine Funds comprising the Trust is conducted by State Super Financial Services Australia Limited.

(b) Key Management Personnel

(i) Directors The names of each person holding the position of director of the Responsible Entity during all or

part of the year were:

›◆ P. K. Gupta (Chairman)

›◆ M. Monaghan (Managing Director)

›◆ M. Carapiet

›◆ R. M. Davis

›◆ R. N. Harty (resigned 2 May 2013)

›◆ M. G. Lambert

›◆ P. F. Scully

›◆ S. Walsh



›› 7. Related party disclosures (continued)

(b) Key Management Personnel (continued)

(ii) Other Key Management Personnel The names of other key management personnel of the Responsible Entity during all or part of the

year were:

›◆ J. T. Andriessen (General Manager, Marketing, Product & Advice)

›◆ S. Bradley (General Manager, Financial Planning)

›◆ T. Elliott (Chief Financial Officer) (Appointed 25 March 2013)

›◆ D. Graham (Chief Investment Officer)

›◆ H. M. Harms (General Manager, Information Technology)

›◆ K. S. Hughes (Company Secretary)

›◆ T. A. Murphy (General Manager, Human Resources)

›◆ T. Reid (General Manager, Corporate Development)

›◆ R. A. Dinham (Chief Investment Officer) (1 July 2012 to 30 July 2012)

›◆ J. Clark (Chief Financial Officer) (Resigned 12 October 2012)

›◆ P. Brook (Chief Financial Officer) (15 October 2012 to 24 March 2013)

(c) Key Management Personnel Compensation Key management personnel are paid by State Super Financial Services Australia Limited. Payments

made from the nine Funds comprising the Trust to State Super Financial Services Australia Limited do not include any amounts directly attributable to the compensation of key management personnel.

(d) Holding of Units by Related Parties As at 30 June 2013, the Responsible Entity held total of 2,289,152 units in the Trust (2012: Nil). No

units were held by nominees or associates of the Responsible Entity other than as indicated below.

The other key management personnel of the Responsible Entity, State Super Financial Services Australia Limited, held 47,408 (2012: 33,549) units in the Trust as follows:

CLASS A CASH FUND FIXED INTEREST

FUND

CAPITAL STABLE FUND

MODERATE FUND

BALANCED FUND

Units held by: Units Units Units Units Units

2013

Key management personnel 177 - - - -

Total 177 - - - -

2012

Key management personnel 173 - - - -

Total 173 - - - -




(d) Holding of Units by Related Parties (continued)

CLASS A GROWTH FUND

GROWTH PLUS FUND



Units held by: Units Units Units Units

2013

Key management personnel 40,263 - - -

Total 40,263 - - -

2012

Key management personnel 33,376 - - -

Total 33,376 - - -

CLASS B CASH FUND FIXED INTEREST FUND

CAPITAL STABLE FUND

MODERATE FUND


2013

Key management personnel - - - -

Responsible Entity - 208,108 208,108 416,216

Total - 208,108 208,108 416,216

2012


Responsible Entity - - - -

Total - - - -

CLASS B BALANCED FUND GROWTH FUND AUSTRALIAN EQUITIES FUND



2013

Key management personnel - - 6,968 -

Responsible Entity 416,216 416,216 416,181 208,108

Total 416,216 416,216 423,149 208,108

2012


Responsible Entity - - - -

Total - - - -




(e) Transactions with related parties Transactions with related parties have taken place at arm’s length and in the ordinary course of

business.

Responsible Entity fees of $4,309,306 (exclusive of GST) (2012: $4,031,343), calculated in accordance with Note 4(a), were paid to the Responsible Entity.

2013 $

2012 $

CASH FUND 633,849 635,853

FIXED INTEREST FUND 83,886 24,712

CAPITAL STABLE FUND 1,178,819 1,035,427

MODERATE FUND 218,778 63,761

BALANCED FUND 1,352,051 1,372,027

GROWTH FUND 783,897 887,171

GROWTH PLUS FUND 14,710 5,449

AUSTRALIAN EQUITIES FUND 37,730 6,794

INTERNATIONAL EQUITIES FUND 5,586 149

›› 8. Financial assets at fair value through profit or lossAs at 30 June 2013, the market value of the proportion of the units held by each Fund, in the respective Feeder Fund, is shown below:

Units in an unlisted unit trust

2013 $’000

2012 $’000

CASH FUND 65,121 66,264

FIXED INTEREST FUND 8,956 5,344

CAPITAL STABLE FUND 104,425 88,719

MODERATE FUND 28,096 10,958

BALANCED FUND 121,809 113,214

GROWTH FUND 61,664 64,617

GROWTH PLUS FUND 1,591 755

AUSTRALIAN EQUITIES FUND 4,734 1,370

INTERNATIONAL EQUITIES FUND 1,188 44



›› 9. Notes to the Statements of Cash Flows


CAPITAL STABLE FUND

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

(a) Cash and cash equivalents 4,048 4,671 201 165 4,355 4,358

(b) Reconciliation of profit attributable to unit holders for the period to net cash used by operating activities

Net Profit - - - - - -

Finance cost attributable to unit holders 1,626 2,460 220 234 5,001 3,695

Profit attributable to unit holders 1,626 2,460 220 234 5,001 3,695

Income reinvested in unit trusts (2,256) (3,073) (612) (157) (5,285) (4,045)

Net (gains)/loss on financial instruments at fair value - - 305 (101) (922) (687)

(Increase)/decrease in reduced input tax credit receivable 8 - 2 (2) 14 -

Increase/(decrease) in accrued expenses (2) (1) 4 4 17 4

Net cash used by operating activities (624) (614) (81) (22) (1,175) (1,033)

(c) Non-Cash Investing Activities

Distributions reinvested in unit trusts 2,256 3,073 612 157 5,285 4,045

(d) Non-Cash Financing Activities

Distributions reinvested by unit holders 1,747 2,499 250 74 2,551 3,311

MODERATE FUND BALANCED FUND

GROWTH FUND

2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

(a) Cash and cash equivalents 572 572 3,974 3,905 3,949 4,031



Finance cost attributable to unit holders 1,499 339 15,648 549 11,733 (1,703)

Profit attributable to unit holders 1,499 339 15,648 549 11,733 (1,703)

Income reinvested in unit trusts (1,199) (311) (5,252) (4,427) (2,465) (2,437)

Net (gains)/loss on financial instruments at fair value (524) (91) (11,786) 2,489 (10,069) 3,247

(Increase)/decrease in reduced input tax credit receivable 5 (5) 17 3 11 3

Increase/(decrease) in accrued expenses 16 11 8 (19) (3) (20)

Net cash used by operating activities (203) (57) (1,365) (1,405) (793) (910)


Distributions reinvested in unit trusts 1,199 311 5,252 4,427 2,465 2,437


Distributions reinvested by unit holders 417 132 2,570 7,507 1,589 4,343



›› 9. Notes to the Statements of Cash Flows (continued)

GROWTH PLUS FUND



2013 $’000

2012 $’000

2013 $’000

2012 $’000

2013 $’000

2012 $’000

(a) Cash and cash equivalents - - 99 30 - 30



Finance cost attributable to unit holders 242 21 455 (13) 134 -

Profit attributable to unit holders 242 21 455 (13) 134 -

Income reinvested in unit trusts (54) (21) (183) (33) (15) (1)

Net (gains)/loss on financial instruments at fair value (203) (6) (310) 41 (125) 1

(Increase)/decrease in reduced input tax credit receivable - - 1 - - -

Increase/(decrease) in accrued expenses 1 1 2 1 1 -

Net cash used by operating activities (14) (5) (35) (4) (5) -


Distributions reinvested in unit trusts 54 21 183 33 15 1


Distributions reinvested by unit holders 22 3 63 6 2 -

›› 10. Financial instruments

(a) Financial Instrument Management To give effect to the investment objectives of the nine Funds of the Trust, the Responsible Entity has

established similarly named Feeder Funds, into which the respective Funds predominantly invest. The Feeder Funds invest in one or more Sector Trusts, each taking on the name of the asset class in which it invests.

There are nine Feeder Funds: Cash Fund, Capital Stable Fund, Balanced Fund, Growth Fund, Fixed Interest Fund, Moderate Fund, Growth Plus Fund, Australian Equities Fund, International Equities Fund.

There are ten Sector Trusts: Australian Equities, Australian Fixed Interest, Australian Unlisted Property, Cash, Enhanced Cash, Global High Yield Debt, Global Listed Infrastructure Securities, Global Listed Property Securities, International Equities, International Fixed Interest.

The Trustee of the Feeder Funds and Sector Trusts is State Super Financial Services Australia Limited.

The allocation of investments made by each Feeder Fund and Sector Trusts is dependent on the investment objectives of each Fund. These are generally reviewed annually and may be reviewed on an ad hoc basis if required. The Responsible Entity mitigates the risk that the longer term strategic asset allocation of each Fund may not achieve its investment objectives by careful research using the Responsible Entity’s expertise and that of specialist asset consultants.

The Responsible Entity researches possible new specialist managers to manage the investments of each Sector Trust. Prior to an appointment the Responsible Entity conducts research and due diligence on each specialist investment manager. The Responsible Entity conducts formal reviews of each appointed specialist investment managers performance.



›› 10. Financial instruments (continued)

(a) Financial Instrument Management (continued) Generally on an annual basis the Responsible Entity reviews the existing Sector Trusts including the

number and type of investment managers, possible new asset classes or possible termination of asset classes. The Responsible Entity receives advice from specialist asset consultants on the nature and type of Sector Trusts including the possible opening or closure of Sector Trusts.

The performance of each investment manager is calculated monthly, reviewed continuously throughout the financial year and compared to benchmarks such as predetermined market based investment benchmarks. Daily the Custodian monitors and reports (on an exceptions basis) on each specialist investment manager’s compliance with their investment mandate.

Monthly the investment performance of each Fund is calculated and disclosed on the Responsible Entity’s website.

JP Morgan Chase N.A. acts as the master custodian on behalf of the Responsible Entity and provides services such as physical custody and safe keeping of assets, settlement of investment trades and collection of dividends. JP Morgan Chase N.A. also provides other services such as accounting, monitoring and reporting functions for each Fund and the Feeder Funds and Sector Trusts.

(b) Significant Accounting Policies Details of the significant accounting policies and methods adopted, including the criteria for

recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in Note 2 to the financial statements.

(c) Capital Risk Management The Responsible Entity for the State Super Investment Fund is required under license requirements to

maintain at least $5,000,000 in liquid assets at all times. The Responsible Entity has complied with its financial obligations throughout the financial year.

(d) Categories of Financial Instruments The Feeder Funds and Sector Trusts are unit trusts. The Funds’ investments in the Feeder Funds

are valued using unit prices which reflect the fair value of the underlying assets. Net market value approximates fair value. Changes in net market value are recognised through the Statements of Comprehensive Income.

The Funds have investments in the following categories of financial assets and liabilities:


2013 $’000

2012 $’000

2013 $’000

2012 $’000

Financial Assets

Financial assets held at fair value through profit and loss 65,121 66,264 8,956 5,344

Cash and cash equivalents 4,048 4,671 201 165

Receivables * 1,361 947 421 71

Financial Liabilities

Payables 1,243 1,147 498 68




(d) Categories of Financial Instruments (continued)


2013 $’000

2012 $’000

2013 $’000

2012 $’000

Financial Assets


Cash and cash equivalents 4,355 4,358 572 572

Receivables * 2,763 1,283 971 233


Payables 2,555 899 679 125


2013 $’000

2012 $’000

2013 $’000

2012 $’000

Financial Assets


Cash and cash equivalents 3,974 3,905 3,949 4,031

Receivables * 3,172 1,497 1,207 824


Payables 2,463 1,131 1,267 1,445


2013 $’000

2012 $’000

2013 $’000

2012 $’000

Financial Assets

Financial assets held at fair value through profit and loss 1,591 755 4,734 1,370

Cash and cash equivalents - - 99 30

Receivables * 30 9 100 16


Payables 78 13 106 26


2013 $’000

2012 $’000

Financial Assets

Financial assets held at fair value through profit and loss 1,188 44

Cash and cash equivalents - 30

Receivables * 10 1


Payables 9 1

* All receivables are current and there are no amounts past due or impaired.




(e) Financial Risk Management Objectives The Funds have an exposure to the Feeder Funds and Sector Trusts. As a result, the Funds are

exposed to a variety of financial risks. These risks include credit risk, liquidity and cash flow risk and market risk (including interest rate risk management, foreign currency risk and price risk). The Funds’ risk management and investment policies, as approved by the Responsible Entity, seek to minimise the potential adverse effects of these risks on the Funds’ financial performance.

(f) Credit Risk Credit risk is the risk that the counterparty will fail to perform contractual obligations, either in whole or

in part, under contract resulting in a financial loss.

Concentrations of credit risk are minimised primarily by:

›◆ The Funds investing in units in the Feeder Funds and the Feeder Funds investing in units in the Sector Trusts.

›◆ Ensuring that Feeder Funds and Sector Trust transactions are undertaken with a large number of counterparties.

›◆ Where appropriate Sector Trusts undertake transactions on recognised exchanges and with a variety of counterparties.

›◆ The appointment of investment managers with appropriate credit assessment skills, setting and monitoring limits in investment manager mandates.

The Funds do not have a concentration of credit risk to underlying counterparties. The maximum credit risk to which the Funds are exposed to is equal to the Fund’s carrying value of the units in the Feeder Funds and the cash balances.

(g) Liquidity and Cash Flow Risk Liquidity and cash flow risk is the risk that the Funds will experience difficulty either realising assets or

otherwise raising sufficient funds to satisfy commitments associated with financial instruments.

Ultimate responsibility for liquidity risk management rests with the Responsible Entity. The Responsible Entity has built an appropriate risk framework for the management of each Fund’s liquidity management requirements. In particular, the liquidity of each Fund is managed in accordance with each Fund’s investment strategy. The Fund’s net cash flows are continually monitored. The liquidity risk associated with the need to satisfy unit holders’ requests for redemptions are mitigated by new contributions and maintaining adequate liquidity to satisfy usual levels of demand. The overall strategy to manage liquidity risk remains unchanged from 2012.

Liabilities attributable to unit holders, accounts payable and distributions payable are at call.

(h) Market Risk Market risk arises from factors such as economic, technological, political or legal conditions which can

adversely affect investment markets. In turn, this can cause market prices to fluctuate and affect the value of investment portfolios.

Market risk comprises three types of risk: foreign exchange (currency risk), market interest rates (interest rate risk) and market prices (price risk). The policies and procedures put in place to mitigate the Funds’ exposure to market risk are detailed in the Responsible Entity’s investment policies and Risk Management Strategy and Plan. There has been no change in the Funds’ exposure to market risk or the manner in which it manages or measures risk.




(h) Market Risk (continued) The Funds, predominantly invest into similarly named Feeder Funds. The Feeder Funds in turn, invest in

one or more Sector Trusts, each taking on the name of the asset class in which it invests.

Concentrations of market risk are minimised primarily by:

›◆ Careful research of strategic asset allocation of each Fund.

›◆ Use of, and advice from, specialist asset consultants.

›◆ Careful research, hiring and monitoring of professional specialist investment managers.

›◆ Sector Trusts using a diversified mix of specialist investment managers who the Responsible Entity believes are the most appropriate for each asset class.

›◆ Where appropriate, Sector Trusts undertaking transactions on recognised exchanges and with a variety of counterparties.

This risk is managed by ensuring that all activities are transacted in accordance with investment mandates, overall investment strategy and within approved limits.

(i) Foreign Exchange Risk Foreign currency contracts are used primarily to manage the foreign exchange risk implicit in the value

of Sector Trust portfolio securities denominated in foreign currency, and to secure a particular exchange rate for a planned purchase or sale of securities. The terms and conditions of these contracts rarely exceed twelve months.

The Funds through their investment in units in Feeder Funds have a risk associated with movements in the value of financial assets and or liabilities denominated in foreign currencies.

Foreign currency risk is mitigated by hiring specialist foreign currency managers ensuring that all activities are transacted in accordance with mandates, overall investment strategy and within approved limits.

Movements in foreign currencies are reflected in the value of units invested in Feeder Funds and in the value of units invested by Feeder Funds in Sector Trusts.

(j) Interest Rate Risk Interest rate risk is the risk the value of financial assets will fluctuate due to changes in market interest

rates.

Interest rate risk is managed through the allocation of investments made by each Feeder Fund in Sector Trusts that have an exposure to market interest rates.

The Funds, through their investments in units in Feeder Funds and direct holdings in cash, have a risk associated with movements in interest rates. Movements in market interest rates are reflected in the value of units of the Funds, value of units invested in Feeder Funds and in the value of units invested by Feeder Funds in Sector Trusts.

Interest rate risk is mitigated by hiring professional, specialist investment managers ensuring all activities are transacted in accordance with mandates, overall investment strategy and within approved limits.




(j) Interest Rate Risk (continued)


2013 2012 2013 2012 2013 2012

Weighted Average Interest Rate 2.02% 2.82% 2.02% 2.82% 2.02% 2.82%

Variable Interest Rate Instruments $'000 $'000 $'000 $'000 $'000 $'000

Cash at bank 4,048 4,671 201 165 4,355 4,358

Non-Interest Bearing

Units in an unlisted unit trust 65,121 66,264 8,956 5,344 104,425 88,719

Distribution receivable 501 681 340 69 2,548 1,074

Other receivable 860 266 81 2 215 209

Total 70,530 71,882 9,578 5,580 111,543 94,360


2013 2012 2013 2012 2013 2012



Cash at bank 572 572 3,974 3,905 3,949 4,031


Units in an unlisted unit trust 28,096 10,958 121,809 113,214 61,664 64,617

Distribution receivable 744 142 2,638 1,457 1,154 813

Other receivable 227 91 534 40 53 11

Total 29,639 11,763 128,955 118,616 66,820 69,472



2013 2012 2013 2012 2013 2012



Cash at bank - - 99 30 - 30


Units in an unlisted unit trust 1,591 755 4,734 1,370 1,188 44

Distribution receivable 28 9 97 15 10 1

Other receivable 2 - 3 1 - -

Total 1,621 764 4,933 1,416 1,198 75




(k) Other Market Price Risk Market price risk is the risk that the total value of investments will fluctuate as a result of changes

in market prices, whether caused by factors specific to an individual investment, its issuer or other factors affecting instruments traded in the market.

The Fund through their investments in units in Feeder Funds have a risk associated with movements in market prices. Movements in market prices are reflected in the value of units invested in Feeder Funds and in the value of units invested by Feeder Funds in Sector Trusts.

Other market price risk is mitigated by hiring professional, specialist investment managers ensuring that all activities are transacted in accordance with mandates, overall investment strategy and within approved limits.

(l) Fair Value Measurements Recognised in the Statement of Financial Position The following table provides an analysis of financial instruments that are measured subsequent to

initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

›◆ Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

›◆ Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

›◆ Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial Assets at Fair Value Through Profit and Loss

2013Level 2$’000

2013Total$’000

2012Level 2$’000

2012Total$’000

CASH FUND

Units in an unlisted unit trust 65,121 65,121 66,264 66,264

FIXED INTEREST FUND


CAPITAL STABLE FUND


MODERATE FUND


BALANCED FUND


GROWTH FUND


GROWTH PLUS FUND

Units in an unlisted unit trust 1,591 1,591 755 755




(l) Fair Value Measurements Recognised in the Statement of Financial Position (continued)

Financial Assets at Fair Value Through Profit and Loss

2013Level 2$’000

2013Total$’000

2012Level 2$’000

2012Total$’000




Units in an unlisted unit trust 1,188 1,188 44 44

There were no transfers between any of the three levels in the period.

The Funds’ investment in the Feeder Funds (which are unlisted unit trusts) is valued using unit prices which reflect the fair value of the underlying assets.

(m) Sensitivity Analysis The following table summarises the sensitivity of each Fund’s Statement of Comprehensive Income

and Statement of Financial Position to foreign exchange risk, interest rate risk and other market price risk through its investment in the Feeder Funds and Sector Trusts.

The sensitivity analyses below have been determined based on the exposure to change in the value of units in each Fund at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period.

The Responsible Entity has sought and received advice from a specialist asset consultant on possible changes in the unit prices of the Funds due to possible changes in market risk.

The changes in the investment returns of the Funds used to prepare the sensitivity analysis set out below equate to a measure of the long term assumptions for the expected standard deviation of an asset class or financial variable. Management believes that using standard deviation as a risk measure is appropriate for measuring each category of market risk that the individual funds are exposed to. Based on the advice from specialist asset consultants, management is satisfied with the use of a single overall risk variable for the sensitivity analysis as set out below. The long term assumptions used in the calculation of standard deviation are intended to be forward looking, and have been set using a combination of actual historical returns, economic theory and current market conditions. This methodology is consistent with the approach adopted and used in the sensitivity analysis for 2013.

However, actual movements in investment returns may be greater than anticipated due to a number of factors, including unusually large market shocks resulting from changes in the performance of economies, market and securities in which the Sector Trusts invest. As a result, historic variations in risk variables are not a definitive indicator of future variations in the risk variables.




(m) Sensitivity Analysis (continued)


2013$’000

2012$’000

2013$’000

2012$’000

2013$’000

2012$’000

Net Assets attributable to unit holders 69,287 70,735 9,080 5,512 108,988 93,461

Change in variable rate 1.30% 2.20% 3.50% 2.90% 2.90% 3.50%

+ % Effect 901 1,556 318 160 3,161 3,271

- % Effect (901) (1,556) (318) (160) (3,161) (3,271)


2013$’000

2012$’000

2013$’000

2012$’000

2013$’000

2012$’000

Net Assets attributable to unit holders 28,960 11,638 126,492 117,485 65,553 68,027


+ % Effect 1,419 780 9,740 11,749 7,604 9,456

- % Effect (1,419) (780) (9,740) (11,749) (7,604) (9,456)



2013$’000

2012$’000

2013$’000

2012$’000

2013$’000

2012$’000

Net Assets attributable to unit holders 1,543 751 4,827 1,390 1,189 74


+ % Effect 213 130 840 267 187 13

- % Effect (213) (130) (840) (267) (187) (13)

›› 11. Contingent assets and contingent liabilitiesAs at 30 June 2013, the Trust did not have any contingent assets and contingent liabilities (2012: $ nil).

›› 12. Subsequent eventsThere has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Trust, the results of those operations, or the state of affairs of the Trust in future financial years.


The financial report of the State Super Investment Fund (‘the Trust’) for the year ended 30 June 2013 has been prepared by State Super Financial Services Australia Limited, the Responsible Entity. The Trust comprises the Cash Fund, Fixed Interest Fund, Capital Stable Fund, Moderate Fund, Balanced Fund, Growth Fund, Growth Plus Fund, Australian Equities Fund and International Equities Fund (‘the Funds’).

The Directors of the Responsible Entity declare that:

a) In the Directors’ opinion, there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable;

b) In the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in Note 2 to the financial statements;

c) In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Trust; and

d) The Directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors of the Responsible Entity made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors of the Responsible Entity, State Super Financial Services Australia Limited.

Michael Monaghan Managing Director 27 August 2013

› Directors’ Declaration


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Melbourne VIC Level 16, 440 Collins Street, MELBOURNE GPO Box 2817 Melbourne VIC 3001 Client Services: 03 8615 3055 Charge Free: 1800 805 233

Brisbane QLDLevel 10, 133 Mary Street, BRISBANE PO Box 15499 City East QLD 4002 Client Services: 07 3335 7055 Charge Free: 1800 357 085

Perth WALevel 3, 197 St Georges Terrace, PERTH PO Box 5657 Perth WA 6831 Client Services: 08 9214 4155 Toll Fee: 1800 332 308

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North West NSWLevel 2, 24 Fitzroy Street, TAMWORTH PO Box 297 Tamworth NSW 2340 Client Services: 02 6755 2055 Charge Free: 1800 248 609

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Registry ServicesGPO Box 5336 Sydney NSW 2001

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