portfoliofocusPREMIUM

Annual Report for the period starting 1 July 2017 and ending 30 June 2018

Portfoliofocus - PremiumRetirement Service Series 2

and Portfoliofocus - PremiumRetirement Service

Preparation date: 15 December 2018Issued by: The Trustee, NULIS Nominees (Australia) Limited

ABN 80 008 515 633 AFSL 236465

for MLC Superannuation Fund (the Fund) ABN 40 022 701 955The Sponsor, Portfoliofocus Pty Limited ABN 40 098 278 589

This Annual Report is for the MLCSuperannuation Fund and is relevant toPortfoliofocus – Premium RetirementService Series 2 and Portfoliofocus –Premium Retirement Service.

4A year in review

5Looking out for your interests

6About your account value

7Some things you should know

9How your money is invested

11Financial Report

The Trustee is part of the National Australia Bank Group of Companies. An investment withthe Trustee is not a deposit with or liability of, and is not guaranteed by, National AustraliaBank Limited ABN 12 004 044 937 AFSL 230686 (NAB). References within the Annual Report to'we', 'us' or 'our' are references to the Trustee, unless otherwise stated.

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Contents

Our reflections and commitment to you

The past year has been confronting and challenging for the financial services industry, our peopleand members. However, it’s also given us the opportunity to further reflect on what we do, howwe do it and what is truly important to our members to ensure we continue to operate in theirbest interests.

We’re committed to improving our practices, products and services to continue to add value toour members – including correcting past mistakes and earning the trust and confidence of ourmembers and the community.

Investment performance

The shares component of members’ portfolios will have experienced another strong financialyear. Global and Australian share markets delivered double-digit returns for a second consecutiveyear. After this period of substantial growth, it wasn’t surprising to see market volatility rise inthe second half of the financial year and towards the end of 2018. If possible, during periods ofmarket volatility, you should continue to focus on how you’re progressing towards your longer-termgoals. To view the latest returns on your super account, log in online at investinfo.com.au/portfoliofocus

The year ahead

We’ll continue to see changes to super in the year ahead. There will be legislative and regulatorychanges, including some changes which may arise from the Financial Services Royal Commissionreport in February 2019.

Changes to technology will also impact the super environment, with increased focus on digitaltransformation to improve the way we deliver our products and services to you.

We’re well positioned to adapt to the changing needs of our members. Whether you’re at thestart of your career or looking forward to life after work, we’ll be there to give you the righthelp, guidance, and advice to reach your financial goals.

We'd like to thank you for choosing us to look after your super and retirement needs.

Peter PromnitzChairNULIS Nominees (Australia) Limited

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A year in review

The directors of the Trustee Board have a variety of work and lifeexperiences which help them represent and look out for yourinterests.

Made up of non-executive directors, the TrusteeBoard is responsible for the management andperformance of the Fund.

The Trustee Board has professional indemnityinsurance. And the Trustee has appointed itsrelated company, National Wealth ManagementServices Limited ABN 97 071 514 264, to carryout the day-to-day functions of the Fund.

Meet the BoardThe directors are:

Peter Promnitz (Chair)

BSc (Mathematics and Statistics)

(University of Adelaide) FAICD, FIAA

Alan Schoenheimer

MBA, B Eng (Chemical) (First Class Hons)

Andrew Gale

MBA, B Arts (Actuarial), FAICD, FIAA

Peeyush Gupta

BA (Computing Studies) (ANU)

MBA, (AGSM), FAICD

Peggy O’Neal

BA (Virginia), JD (Virginia)

Diploma of Superannuation Management(Macquarie), FAICD

Terry McCredden

B Comm (Hon) (University of Melbourne)

Trustee director movementsPeter Promnitz was appointed chair effective 1July 2018.

Nicole Smith retired effective 30 June 2018.

Evelyn Horton retired effective 30 June 2018.

Operational Risk Financial Reserve(Reserve)The Government requires superannuation fundtrustees to hold adequate financial resources(Reserve) to cover any losses that members incurdue to operational errors. The Reserve has beenestablished in full by the Trustee’s capital (viaequity contributed from its ultimateshareholder, NAB). If the Reserve falls below theTrustee’s targets, the Trustee proposes to fundthe shortfall through its own capital, rather thanseeking contributions from members. This meansthat the Trustee doesn't currently requiremembers to contribute to the Reserve, butmembers will be notified if this changes in thefuture. As the Reserve is held by the Trustee, itisn't reported in the financial statements of theFund.

The Reserve was established in the 2016financial year. The balance of the Reserve at theend of the last 3 financial years is summarisedbelow:

30 June 2018: $269M30 June 2017: $253M30 June 2016: $240M

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Looking out for your interests

How earnings are reflected in youraccountIncome from investments will be in the form ofcapital growth, dividends, interest anddistributions that occur at different timesthroughout the year.

Please refer to the relevant investment’sdisclosure document and the AustralianSecurities Exchange (ASX) (for listed securities)for details. Income received is usually net of feesand charges.

Income distributions will be allocated to yourCash Account after we receive them.

All income distributions must be received as cashas we don’t administer dividend and distributionreinvestment plans.

Interest earned on your Cash Account is paidafter the end of each quarter.

How your account is valuedThe value of your account is based on:

prices provided by investment managersmultiplied by the number of units heldprices provided by the Australian SecuritiesExchange multiplied by the number of sharesheldany term deposits, andyour Cash Account.

Prices are generally provided daily, howeverthere may be times when we don’t receiveupdated prices. This might happen when sharesare delisted or assets can’t be valued.

In these circumstances, we may have to usedifferent valuation methods.

You should be aware that your account balancedoesn’t include the tax impact of any unrealisedgains or losses that may arise if you request afull withdrawal.

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About your account value

Transfers to an Eligible RolloverFundWe may transfer your account balance to anEligible Rollover Fund if:

you haven't made a contribution in the last12 months and your balance falls below$2,000, orwe lose contact with you and can’t locate you.

The Eligible Rollover Fund we currently use isthe Australian Eligible Rollover Fund and theycan be contacted on 1800 677 424. Alternatively,you can write to them at:

C/ - Jacques Martin Administration andConsulting Pty Ltd, Locked Bag 5429, ParramattaNSW 2124.

We’ll advise you in writing to your last knownaddress if we intend to transfer your accountbalance and will proceed if you don’t respondwith instructions regarding an alternative superfund.

Please note, a transfer to an Eligible RolloverFund may have a detrimental impact to yoursuper benefit as the Eligible Rollover Fund mayhave a different fee structure, differentinvestment strategies and may not offerinsurance benefits.

Transfers to the Australian TaxationOffice (ATO)The law and rules defining the transfer ofunclaimed superannuation money to the ATOcan be viewed at ato.gov.au

In summary, we’re generally required by law totransfer your account to the ATO if any of thefollowing occurs:

your account balance is less than $6,000 andeither:– no contributions or rollovers have been

made to your account for 12 months, youhaven't otherwise contacted the Fund for

12 months and we have no way ofcontacting you, or

– you’ve been a member of the Fund formore than 2 years, your account was set upthrough your employer, and there havebeen no contributions or rollovers made toyour account for over 5 years,

you’re over 65, contributions haven't beenmade to your account for over 2 years, youhaven’t contacted us for at least 5 years, andwe haven't been able to contact you,the ATO informs us that you were a formertemporary resident and left the country oversix months ago, orupon your death, where no contributionshave been made for at least 2 years, and aftera reasonable period of time, we’ve tried buthaven't been able to identify or contact thebeneficiary of your account.

There may be other circumstances in which weneed to transfer your account to the ATO.

If your account is transferred to the ATO, youcan contact the ATO on 13 10 20 to claim yourbenefit.

Special rules for temporaryresidentsIf you’re a temporary resident and your visa hasexpired and you leave Australia permanently,you may be able to claim the super you holdwith us as a Departing Australia SuperannuationPayment. Withholding taxes may apply to thelump-sum payment. However, if you don’t makea claim within six months of your visa expiringor your departure from Australia (whicheverhappens last), we may be required to transferyour super to the ATO as unclaimed super. If wetransfer your super to the ATO, we won't notifyyou or give you an exit statement. You can thenclaim your super from the ATO directly. Visitato.gov.au or call the ATO on 13 10 20.

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Some things you should know

Illiquid investments and portabilityWhen you ask us to roll over or transfer all orpart of your account balance, we’re generallyrequired to process your request within 3business days. There may be a delay inprocessing your request where part of youraccount balance is invested in an ‘illiquidinvestment’.

What is an illiquid investment?

An investment is considered illiquid when you’reunable to access your investment within therequired timeframes or, if you do, it would beat a materially lower price. This situation mayarise when:

a fund manager suspends transactions orcloses their fundthe normal redemption processing timeframefor a fund is greater than the requiredtimeframe, ora listed investment is under administration,suspended or delisted.

Where we’re unable to process your requestwithin the required timeframe, we’ll notify youor your financial adviser of this and providedetails of the illiquid investments.

Suspended or terminated managedfunds

Some investment managers suspendredemptions on their funds.

In some cases the managed fund may have beenclosed.

If you have some of these investments, we’vealready notified you about these changes.

You can find a summary of these managedfunds, including details of their current status,on investinfo.com.au/portfoliofocus

Resolving complaintsWe can usually resolve your complaint quicklyover the phone on 1300 769 613.

Alternatively, you can email or write to us. Youcan escalate your complaint through ourinternal dispute resolution process in which we'llconduct a review and provide a final writtenoutcome including the reasons for our decision.

More information about how to contact us andthe complaint resolution process is available atinvestinfo.com.au/portfoliofocus

If your concerns haven't been resolved to yoursatisfaction or we haven't responded to youwithin 90 days, you can lodge a complaint withthe Australian Financial Complaints Authority(AFCA). You can contact AFCA at:

Website: afca.org.auEmail: info@afca.org.auTelephone: 1800 931 678 (free call)In writing to: Australian Financial ComplaintsAuthority Limited, GPO Box 3, Melbourne VIC3001

AFCA is an independent financial servicescomplaint resolution scheme that is free toconsumers. Time limits apply to certaincomplaints; you should contact AFCA to findout if a time limit applies.

If you have a complaint about the financialadvice you received, you should follow thecomplaint resolution process explained in theFinancial Services Guide provided by yourfinancial adviser.

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Some things you should know

The investment objective of the Fund is to giveyou a wide choice of investment options fromwhich you and your financial adviser can selectinvestment strategies to suit your investmentneeds.

You can choose investments from:over 350 managed investmentsover 500 ASX listed investments, such as directshares, and exchange traded fundsa variety of term deposits, anda Separately Managed Account (SMA)providing access to a range of direct shareand multi-asset portfolios.

If you haven’t chosen a particular investmentoption, or your instructions aren’t clear, yourmoney will be retained in your Cash Accountuntil we receive a clear instruction.

The full list of investment options is containedin the Investment Menu. For specific informationon an investment option, please refer to thecompany information or the relevant disclosuredocument for that investment option. All thesedocuments are available from your financialadviser or on our website.

No matter your type of investment, it’simportant to remain informed about changesto the underlying investment option. You canfind investment manager updates on investinfo.com.au/portfoliofocus. You also need to makesure you have an up-to-date Product DisclosureStatement (PDS) for any investments you haveselected, as additional units may be purchasedover time.

You can access these PDSs at investinfo.com.au/portfoliofocus

Performance informationFor actual performance of your account in thePortfoliofocus – Premium Retirement Service(including Series 2) for the year ended 30 June2018, please refer to your Annual Statement.

For more recent performance information, youmay access this on the website or by calling us.

Asset allocation and largeinvestmentsThe breakdown of assets held in the Fund isdetermined at an individual member level.Further information about your actual assetallocation can be found in your AnnualStatement.

The assets of the Fund are invested entirely intothe MLC Pooled Superannuation Trust (PST). ThePST then invests funds into the underlyinginvestment products to correspond with thoseselected by members, and holds thoseinvestments on behalf of the Fund.

As at 30 June 2018, the MLC SuperannuationFund, through its PST holding, held thefollowing assets with a value of greater than5% of the Fund’s total assets:

NAB – 13.1%1

1 This holding consists of:Cash - 7.8%Term deposits - 3.6%Fixed interest securities - 0.3%Direct shares - 1.1%Shares held through SMAs - 0.3%

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How your money is invested

DerivativesDerivatives are contracts that have a valuederived from another source such as an asset,market index or interest rate. There are manytypes of derivatives including swaps, optionsand futures. They are a common tool used tomanage risk or improve returns.

Some derivatives allow investment managers toearn large returns from small movements in theunderlying asset’s price. However, they can loselarge amounts if the price movement in theunderlying asset is unfavourable.

Risks particular to derivatives include the riskthat the value of a derivative may not move inline with the underlying asset, the risk thatcounterparties to the derivative may not be ableto meet payment obligations and the risk thata particular derivative may be difficult or costlyto trade.

How investment managers invest in derivativesis included in their PDS, available on investinfo.com.au/portfoliofocus

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How your money is invested

The following abridged financial informationfor the financial year ended 30 June 2018 is forthe whole of the MLC Superannuation Fund.

The assets for the Portfoliofocus - PremiumRetirement Service are $188.8 million.

Please call us if you wish to receive a printedcopy of the full audited financial statementsand auditor's report.

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Financial Report

MLC Superannuation FundAbridged Financial Information – Statement of Financial Position

As at 30 June 2018

MLC Superannuation Fund

Statement of financial position

As at 30 June 2018

2018 2017

$m $m

Assets

Cash and cash equivalents 35 46

Receivables 14 7

Investments measured at fair valueMLC Pooled Superannuation Trust 19,639 18,629

Total assets 19,688 18,682

Liabilities

Payables 14 7

Total liabilities excluding member benefits 14 7

Net assets available for member benefits 19,674 18,675

Member benefits

Allocated to members 19,634 18,596

Unallocated contributions 35 46

Total member liabilities 19,669 18,642

Total net assets 5 33

Equity

Investment reserve 21 20Not yet allocated to members (16) 13Total equity 5 33

The above statement of financial position should be read in conjunction with the accompanying notes to the financial statements.

MLC Superannuation Fund 1

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Financial Report

MLC Superannuation FundAbridged Financial Information – Income Statement

For the year ended 30 June 2018

MLC Superannuation Fund

Income Statement

For the year ended 30 June 2018

2018 2017

$m $m

Superannuation activities

Changes in investments measured at fair value 1,393 1,374

Total superannuation activities income 1,393 1,374

Administration fees 114 99

Total expenses 114 99

Net result from superannuation activities 1,279 1,275

Profit from operating activities 1,279 1,275

Less: Net benefits allocated to members' accounts 1,333 1,362

Profit/(loss) before income tax (54) (87)

Income tax expense/(benefit) (26) (28)

Profit/(loss) after income tax (28) (59)

The above income statement should be read in conjunction with the accompanying notes to the financial statements.

MLC Superannuation Fund 2

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Financial Report

MLC Superannuation FundAbridged Financial Information – Statement of changes in memberbenefits

For the year ended 30 June 2018

MLC Superannuation FundStatement of changes in member benefits

For the year ended 30 June 2018

2018 2017

$m $m

Opening balance of member benefits as at 1 July 2017 18,596 16,951Contributions:Employer 184 220Member 514 865Transfer from other superannuation entities 1,416 1,419Transfer to other superannuation entities (1,103) (806)Income tax on contributions (26) (28)Net after tax contributions 985 1,670Benefits to members/beneficiaries (1,237) (1,345)Insurance premiums charged to members' accounts (43) (42)Benefits allocated to members' accounts comprising: Net investment income 1,438 1,461 Administration fees (105) (99)

Closing balance of member benefits as at 30 June 2018 19,634 18,596

The above statement of changes in member benefits should be read in conjunction with the accompanying notes to the financial statements.

MLC Superannuation Fund 3

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Financial Report

MLC Superannuation FundAbridged Financial Information – Statement of changes in reserve

For the year ended 30 June 2018

MLC Superannuation FundStatement of changes in reserve

For the year ended 30 June 2018

2018 2017

$m $m

Opening balance of investment reserve 20 19

Profit/(loss) on reserve 1 1

Closing balance of investment reserve 21 20

The above statement of changes in reserves should be read in conjunction with the accompanying notes to the financial statements.

MLC Superannuation Fund 4

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Financial Report

MLC Superannuation FundAbridged Financial Information – Statement of cash flows

For the year ended 30 June 2018

MLC Superannuation FundStatement of cash flows

For the year ended 30 June 2018

d 2018 2017

$m $m

Cash flows from operating activities

Insurance premiums paid (43) (42)

Administration fees (114) (99)

Income tax received 26 28Net cash flows from operating activities (131) (113)

Cash flows from investing activities

Proceeds from sale of investments 2,497 2,294

Purchases of investments (2,056) (2,429)Net cash flows from investing activities 441 (135)

Cash flows from financing activities

Employers' contributions 173 239

Members' contributions 514 788

Transfer from other superannuation plans 1,358 1,418

Transfer to other superannuation plans (1,103) (806)

Benefits to members/beneficiaries (1,237) (1,343)

Income tax on contributions (26) (28)Net cash flows from financing activities (321) 268

Net (decrease)/increase in cash and cash equivalents (11) 20

Cash and cash equivalents at the beginning of the year 46 26

Cash and cash equivalents at the end of the year 35 46

The above statement of cash flows should be read in conjunction with the accompanying notes to the financial statements.

MLC Superannuation Fund 5

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Financial Report

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For more information call us from anywhere inAustralia on 1300 769 613 or contact your financialadviser.

Postal address

GPO Box 1274Melbourne VIC 3001

Registered office

Ground Floor, MLC Building105–153 Miller StreetNorth Sydney NSW 2060

investinfo.com.au/portfoliofocus