Telstra 2009 Annual Report Download

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Telstra Corporation Limited
ACN 051 775 556
ABN 33 051 775 556
11 September 2009
The Manager
Company Announcements Office
Australian Stock Exchange
4th Floor, 20 Bridge Street
SYDNEY NSW 2000
Office of the Company Secretary
Level 41
242 Exhibition Street
MELBOURNE VIC 3000
AUSTRALIA
General Enquiries 08 8308 1721
Facsimile 03 9632 3215
ELECTRONIC LODGEMENT
Dear Sir or Madam
Telstra Corporation Limited – 2009 Annual Report
In accordance with the listing rules, I attach a copy of the 2009 Annual Report which will be
sent to shareholders shortly.
Yours sincerely
Carmel Mulhern
Company Secretary

Table of contents

  • Page 1
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  • Page 2
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  • Page 16
    Telstra Corporation Limited and controlled entities Contents 1. Full year results and operations review June 2009 ... 3 2. Corporate Governance and Board Practices ...35 3. Shareholder Information ...47 4. Directors' Report ...49 5. Remuneration Report ...63 6. Financial Report ...81 1

  • Page 17
    ... and controlled entities ® Registered trade mark of Telstra Corporation Limited ™ Trade mark of Telstra Corporation Limited †Registered trade mark of Twentieth Century Fox Film Corporation ‡ Registered trade mark of Research in Motion Ltd * Registered trade mark of Citysearch Australia Pty...

  • Page 18
    ... of financial position ...Statement of cash flows ...Segment information...Statistical data summary ...Analysis information Revenue ...Fixed products:...- PSTN ...- ISDN ...- Fixed internet ...- Other fixed revenue...Mobiles ...IP and data access ...Business services and applications Advertising and...

  • Page 19
    Telstra Corporation Limited and controlled entities Full year results and operations review - June 2009 Summary financial information Results of operations 2009 $m Sales revenue...Other revenue (i) ...Total revenue ...Other income (ii) ...Total income (excl. finance income) ...25,371 136 25,507 107...

  • Page 20
    ... - accounted for using the equity method Investments - other ...Property, plant and equipment...Intangible assets...Derivative financial assets...Non current tax receivables ...Deferred tax assets ...Defined benefit assets ...Total non current assets ...Total assets ...Current liabilities Trade and...

  • Page 21
    Telstra Corporation Limited and controlled entities Full year results and operations review - June 2009 Statement of cash flows 2009 $m Cash flows from operating activities Receipts from customers (inclusive of goods and services tax (GST)) . Payments to suppliers and to employees (inclusive of GST...

  • Page 22
    ...Telstra Group (reported) ...Revenue by business segment 2009 $m Telstra Consumer PSTN products ...Fixed internet...Mobile services revenue ...Telstra Business PSTN products ...Fixed internet...Mobile services revenue ...Telstra Enterprise and Government Mobile services revenue ...IP and data access...

  • Page 23
    ... mobile services revenues. Of the total mobile SIO base more than 78% is now on the 3GSM network, up from 64% at June 2008. Fixed internet revenue has grown by 14.1% with internet direct increasing by 42.0% to $89 million driven by the Business Grade Broadband offering. Continued ADSL revenue growth...

  • Page 24
    .... As a result, Telstra Networks and Services (TN&S) is now a reportable business segment in its own right. TN&S is primarily a cost centre responsible for our network infrastructure and customer solutions supporting the revenue generating activities of our other segments. In fiscal 2009 its negative...

  • Page 25
    ...Mobile voice telephone minutes . . Number of SMS sent ...Services in operation (i) 11,005 8,943 10,096 6,973 909 1,970 9.0% 28.3% 5,435 4,590 5,177 3,749 258 841 5.0% 22.4% Jun 2009 Fixed products Basic access lines in service (thousands) ...Residential ...Business ...Total retail customers...

  • Page 26
    ... internet and data ...Total IP and data access ...Business services and applications ...Non service content ...Advertising and directories ...CSL New World ...TelstraClear ...Other offshore services revenue ...Pay TV bundling ...Other sales revenue (i) ...Sales revenue ...Other revenue (ii) ...Total...

  • Page 27
    ... (5.6%) (2.3%) 2.2% Average revenue per user per month ($'s) ...Number of local calls (millions) (i) ...National long distance minutes (millions) (i). Fixed to mobile minutes (millions) ...International direct minutes (millions) (i) ... Note: statistical data represents management's best estimates...

  • Page 28
    Telstra Corporation Limited and controlled entities Full year results and operations review - June 2009 Customer behaviour is a catalyst for the change in usage trends with the increasing preference towards mobile voice, data messaging and internet based communications. This is evident from the ...

  • Page 29
    ... fixed retail broadband revenue were higher internet direct SIOs as a result of the increased focus of selling Telstra Business broadband solutions to customers who currently have BigPond® products. As market penetration increases and competitors continue to offer low-cost broadband in metro areas...

  • Page 30
    ...• Wireless broadband revenue increased by 69.2% and SIOs grew by 98.9%. Mobiles 2009 $m Calling and access charges (i) ...Mobile data - Messaging ...- Non-messaging (handheld) ...- Wireless broadband (data cards) (ii) ...Total mobile data ...Mobiles interconnection ...Total mobile services revenue...

  • Page 31
    ... the performance remains at the top of our global peer group. With voice and access revenue largely stable, mobile growth has again been driven by mobile data. Total mobile data revenue grew by 31.3%. Data represents over 33% of mobile services revenue, up from 27.9% in fiscal 2008. Within messaging...

  • Page 32
    ...of our Next IPâ„¢ network to offer businesses of all sizes access to world-leading infrastructure that provides huge benefits in terms of productivity and innovation. Within the IP access portfolio, IP metro area network (IP MAN) was the largest contributor with $321 million of revenue, representing...

  • Page 33
    ... while global products continued its recent growth due mainly to increases in international private lines and global IP services. FY06 FY07 Specialised data FY08 IP access FY09 Business services and applications Year ended 30 June 2008 Change $m $m 1,055 (47) 2009 $m Business services and...

  • Page 34
    ...the financial year, was responsible for the $14 million revenue increase. Europe experienced a $6 million increase in revenue mainly due to growth in data and hosting revenues in the UK. Pay TV bundling 2009 $m Pay TV bundling revenue ...Total pay TV bundling SIOs (thousands) ...Total FOXTEL pay TV...

  • Page 35
    Telstra Corporation Limited and controlled entities Full year results and operations review - June 2009 Other income 2009 $m Proceeds from sale of property, plant and equipment. Proceeds from sale of intangibles ...Proceeds from sale of investments...Asset and investment sales...Cost of property, ...

  • Page 36
    ... the sale of the KAZ business from our enterprise and government segment in April 2009 resulted in salary cost savings of $38 million. The decline in the 10 year government bond rate, which required a revaluation of our long service leave balances and a subsequent increase in labour costs, accounted...

  • Page 37
    ... contributions paid have no profit and loss impact and only impact the asset or liability recognised in the statement of financial position and the company's free cash flow. The contribution rate for the defined benefit fund in Telstra Super is currently at 27%. In fiscal 2009, we recognised $229...

  • Page 38
    ... increased by 5.5% mainly driven by the migration of customers onto the new billing systems • Promotion and advertising decreased by 17.1% as spending was more targeted Other expenses 2009 $m Property, motor vehicle and IT rental expense . Net foreign currency conversion losses / (gains) Service...

  • Page 39
    ...accounted investments. The $3 million gain for the reported period was represented by our associated entities with a $4 million profit from Keycorp Limited offset by losses from LinkMe Pty Limited which was sold in the second half of fiscal 2009. In respect to FOXTEL, REACH and Australia-Japan Cable...

  • Page 40
    ... of $92 million due to a change in the service life of other communications assets within the group. Other plant and equipment depreciation increased by $34 million, mainly due to the addition of information technology equipment related to the transformation activities. Additions to the building...

  • Page 41
    ... rate position and is due to the following factors: • an increase in our long term borrowing margins; • a reduction in base market rates; • a reduction in the number of future interest flows as we approach maturity of the financial instrument; and • the discount factor unwinding as the time...

  • Page 42
    ... information resource. Sensis help you find, buy and sell through service offerings including Yellow™, White Pages®, 1234, Citysearch*, UBD#, Gregory's# and Whereis®. Sensis also manages the group's advertising assets in China through interests in SouFun and the two Chinese internet businesses...

  • Page 43
    ... 2009. This was predominantly driven by lower voice revenues (local and international) and associated margins as well as a decline in the volume of handset sales. The EBIT decline was also impacted by accelerated depreciation on the company's old networks, following the decision to invest in new...

  • Page 44
    ...consumer revenue (including both on-net and off-net services) rising by 18.7% for the year. Broadband penetration on the consumer hybrid fibre coaxial (HFC) cable network in Wellington and Christchurch continues to grow with 70% of the customer base now enabled, while consumer PSTN access lines rose...

  • Page 45
    ... $87 million increase in our trade and other receivables resulting from higher revenue and ageing debt levels. • the net book value of property, plant and equipment declined mainly due to the accelerated depreciation on CSLNW's mobile network assets as we invested in new network technologies, and...

  • Page 46
    ...by the significant decrease in the value of the assets held by the superannuation plans as a result of the current financial crisis causing lower asset returns. • equity attributable to Telstra Entity shareholders increased by 3.3% for the year due to increases in retained earnings and the foreign...

  • Page 47
    ... 1.7% Cash flows from investing activities Payments for property, plant and equipment...Payments for intangible assets ...Capital expenditure (before investments) ...Payments for other investments ...Total capital expenditure ...Proceeds from asset sales and finance leases ...Loans/repayments to...

  • Page 48
    ...and SouFun group, to their minority shareholders during fiscal 2009; offset by • a movement in purchase of shares for employee share plans. In the prior fiscal year, $129 million of cash was used to purchase 27.5 million Telstra shares on market in order to support the long term incentive plan. We...

  • Page 49
    ... high-speed broadband network offering improved fixed line ADSL speeds. A-IFRS: Australian equivalents of International Financial Reporting Standards. ARPU: Average revenue per user. CDMA: Code division multiple access - a mobile standard that provides voice, data, fax and short messaging services...

  • Page 50
    Telstra Corporation Limited and controlled entities Corporate Governance Statement Corporate Governance & Board Practices 2009 Your Board is committed to excellence in corporate governance and enhancing our shareholders' interests. Good corporate governance is the hallmark of successful companies ...

  • Page 51
    ...Writing directly to you, our shareholders, about the half-year and annual financial results and, from time to time, on other issues that affect your investment; Placing all announcements made to the market, including transcripts of investor and media briefings and related information, on our website...

  • Page 52
    ... control and reporting systems and monitoring strategic risk management systems; Approving Telstra's statutory accounts and overseeing its financial position as well as internal and external audit activities; Approving decisions concerning Telstra's capital and determining the dividend policy...

  • Page 53
    ... with senior management outside Board meetings where appropriate, and may consult with other Telstra employees and advisers and seek additional information. Details of the number of meetings held by your Board during fiscal 2009 and attendance by Board members are set out in the Directors' Report...

  • Page 54
    ... Limited and controlled entities Corporate Governance Statement of the Company Secretary was changed so that the role reported to Telstra's Board of Directors through the Chairman. Board access to management and independent professional advice Directors have complete access to the Company's senior...

  • Page 55
    Telstra Corporation Limited and controlled entities Corporate Governance Statement • The external audit including the external auditors' qualifications, scope, independence and performance; The non-audit services disclosures to be made in the annual report including the reasons for being ...

  • Page 56
    ... performance of the CEO and key management personnel was reviewed in the manner set out in our Remuneration Report. The Committee also exercises the administrative powers delegated to it by your Board under Telstra's share option plans and, in certain circumstances, makes offers to employees under...

  • Page 57
    ... Telstra Values, Telstra Business Principles, Code of Conduct and other Company policies We have a number of internal operating policies and principles which promote ethical and responsible decision making and timely and balanced disclosure. We provide guidance to our Directors, senior management...

  • Page 58
    ... policy reflects the Telstra values of accountability, integrity and leadership, supports our Code of Conduct and complements existing management structures and functions. Share Trading Telstra's share trading policy prohibits Directors, the CEO, senior management and certain other employees...

  • Page 59
    ...regulation, information security, operational separation, financial reporting, records management, whistle-blowing and continuous disclosure. This program-based approach at a corporate level is supported by a network of senior personnel appointed to the role of Business Unit Compliance Manager. They...

  • Page 60
    ... "Performance Evaluation". See "Telstra Values, Telstra Business Principles, Code of Conduct and Other Company Policies". See also the Telstra Business Principles and Code of Conduct which are available in full from our website. 3 3 3 See "Share Trading". See also the Telstra Share Trading Policy...

  • Page 61
    ... See "Telstra Values, Telstra Business Principles, Code of Conduct and Other Company Policies". See also the Shareholders Telstra Business Principle and the Shareholder Communications Company Policy which are available in full from our website. See "Risk Oversight & Management". See also the Telstra...

  • Page 62
    Telstra Corporation Limited and controlled entities Shareholder Information Listing Information Markets in which our shares are traded We are listed, and our shares are quoted on the Australian Securities Exchange (ASX) and on the New Zealand Stock Exchange (NZX). A parcel of unquoted shares which ...

  • Page 63
    ... other substantial shareholders. Twenty largest shareholders as at 28 August 2009 The following table sets out the Top 20 holders of our shares (when multiple holdings are grouped together): Shareholders 1 HSBC Custody Nominees (Australia) Limited 2 National Nominees Limited 3 Future Fund Board Of...

  • Page 64
    ... time and generating new business. In turn the demand for high speed internet access accelerates. We aim to be at the forefront of providing leading edge telecommunications services to meet the demands of our customers. By the end of December 2009, we expect to have upgraded our HFC cable broadband...

  • Page 65
    ...). Growth in total revenue was mainly attributable to mobiles revenue - increased by $469 million, up 7.3%; fixed internet - increased by $140 million, up 6.9%; and IP and data access revenue - increased by $130 million, up 8.1%. Mobile services revenue (including wireless broadband) continues to...

  • Page 66
    ...and possible divestment of Telstra Cable related assets); changes to universal service arrangements; and greater customer service guarantee requirements. Information about our directors and senior executives is provided as follows and forms part of this report: • names of directors and details of...

  • Page 67
    Telstra Corporation Limited and controlled entities Directors' Report • • • number of Board and Committee meetings and attendance by directors at these meetings is provided on page 59; details of director and senior executive shareholdings in Telstra are shown on pages 59 to 60; and details ...

  • Page 68
    ...via semi-annual reports to the Audit Committee. • • • Ernst & Young is specifically prohibited from performing any of the following services: • bookkeeping services and other services related to preparing our accounting records of financial statements; financial information system design...

  • Page 69
    ... financial report have been rounded to the nearest million dollars, except where otherwise indicated. This report is made in accordance with a resolution of the directors. Catherine B Livingstone Chairman 13 August 2009 David I Thodey Chief Executive Officer and Executive Director 13 August 2009...

  • Page 70
    ... the company's corporate, government and large business customers in Australia, TelstraClear in New Zealand and Telstra's international sales division. Before joining Telstra, Mr Thodey was Chief Executive Officer of IBM Australia/New Zealand and previously held several senior executive positions in...

  • Page 71
    Telstra Corporation Limited and controlled entities Directors' Report improvement. He also managed Telstra's involvement in the Federal Government's T3 sale of Telstra shares. Directorships of other listed companies - current: Director, AGL Energy Limited (2009- ) Directorships of listed companies ...

  • Page 72
    ... Directorships of Listed companies - past three years: Director and Chief Executive Officer, National Australia Bank (2004-2008). Other: Current: Member, Scottish Enterprise's International Advisory Board (2006- ); Member, the Federal Attorney General's Business-Government Advisory Group on national...

  • Page 73
    ... of the annual general meeting and annual financial results announcements. She played a key role in the T2 and T3 floats, Telstra's first off-market share buy-back, and the introduction of the dividend reinvestment plan. Before joining Telstra, Ms Mulhern was a senior associate in a leading national...

  • Page 74
    ... on 25 February 2009. (7) Retired from Board on 8 May 2009. (8) Ceased on the Board effective 15 May 2009. (9) NBN Committee was established in April 2009 as a joint Board-management Committee. Director and senior executive shareholdings in Telstra As at 13 August 2009: Directors Direct interest...

  • Page 75
    Telstra Corporation Limited and controlled entities Directors' Report Senior executives Direct interest 139,961 10,240 199,886 721,534 441,982 294,576 Number of shares held Indirect interest (1) - Bruce Akhurst Nerida Caesar Justin Milne . David Moffatt Michael Rocca Deena Shiff . . ... ... ... ...

  • Page 76
    Auditor's Independence Declaration to the Directors of Telstra Corporation Limited In relation to our audit of the financial report of Telstra Corporation Limited for the financial year ended 30 June 2009, to the best of my knowledge and belief, there have been no contraventions of the auditor ...

  • Page 77
    Telstra Corporation Limited and controlled entities (This page has been left blank intentionally) 62

  • Page 78
    ...'s strategy and business objectives; and to link at-risk remuneration to the creation of shareholder value. The effectiveness of our philosophy and strategy is detailed throughout the Report. This is evidenced by Our Senior Executives' Long Term Incentive plan (LTI) accounting for the largest...

  • Page 79
    ... with authority and responsibility for planning, directing and controlling the activities of the Company and the Group, directly or indirectly). Most Recent KMP Position Title Chief Executive Officer Chief Executive Officer - Sensis Group Managing Director (GMD) - Telstra Enterprise & Government GMD...

  • Page 80
    ... the fiscal 2009 LTI plan. Return on Investment (ROI) was maintained as a performance measure for Telstra's LTI Plan as it rewards executives for successfully generating value for shareholders from the Company's investments. Telstra's Senior Executives (and other invited senior management employees...

  • Page 81
    ... the share price increase of an ordinary Telstra share plus the value of any cash dividends or other shareholder benefits relative to the other companies in the LTI comparator group. ROI measures how well Telstra has utilised its capital over the relevant performance period. The LTI plan relates to...

  • Page 82
    ...Policy Telstra's Executive Share Ownership Policy requires Senior Executives to acquire and retain a number of shares equivalent in value to a minimum of 100 per cent of their fixed remuneration. Shares need to be acquired by 30 June 2012 or within five years of appointment to Senior Executive level...

  • Page 83
    Telstra Corporation Limited and controlled entities Remuneration Report 3.8 Restrictions and Governance Telstra implemented a policy from 1 October 2008 that prohibits its Directors, Senior Executives and other designated people from using Telstra shares as collateral in any financial transaction (...

  • Page 84
    ... remuneration and Short Term Incentive at Target as disclosed in this Report. The terms of Mr Winn's consultancy agreement ensured his services were available full time for Telstra and prohibited him from providing any services in any capacity to any telecommunications business in Australia or New...

  • Page 85
    Telstra Corporation Limited and controlled entities Remuneration Report percent requirement voluntary from 1 July 2009. The Board has however decided to establish guidelines to encourage nonexecutive Directors to hold Telstra shares equivalent to at least 50 per cent of their annual fees. Such ...

  • Page 86
    ... Unified Messaging Revenue Growth Return On Investment Total Shareholder Return Total 8.4.3 - Other Senior Executives - (Sensis CEO, GMD Enterprise and Government, GMD Consumer, GMD Telstra Business and GMD Telstra Networks & Services) Component Fixed Remuneration Short Term Incentive Long Term...

  • Page 87
    72 Post-employment Termination Other Long Equity Settled Share-based Benefits Benefits Term Benefits Payments Superannuation (5) 9. Remuneration Tables and Data 9.1 Senior Executives Remuneration (main table) Short Term Employee Benefits Name Year NonSalary and Short Term Incentives monetary ...

  • Page 88
    ... Superannuation) and fringe benefits tax. Short term incentive relates to performance in fiscal 2008 and fiscal 2009 respectively and is based on actual performance for Telstra and the individual. The values shown represent the cash element only of the STI. Where a Senior Executive was not a KMP...

  • Page 89
    Telstra Corporation Limited and controlled entities Remuneration Report 9.2 Non-executive Director Remuneration Short Term Employee Benefits Post-employment Benefits Superannuation Equity Settled Share-based Payments Directshare (9) Name Year Salary and Fees (1) (9) Non-monetary Benefits (2) ...

  • Page 90
    Telstra Corporation Limited and controlled entities Remuneration Report 9.3 STI Payments (cash and shares) Name Year Maximum Potential STI ($) (1) 2,097,145 1,856,000 2,099,200 2,000,000 159,217 718,452 840,000 798,781 2,209,600 2,104,000 793,...

  • Page 91
    Telstra Corporation Limited and controlled entities Remuneration Report 9.4 Summary of LTI Plans as at 30 June 2009 As at 30 June 2009 the vesting status of all LTI equity plans is as follows: Plan Type of Instrument Granted Options Performance Period Result Future Financial Years in which Grants ...

  • Page 92
    ... allocation. Total Remuneration is the sum of short term employee benefits, post employment benefits, termination benefits, other long term benefits and equity settled share- based payments as detailed in table 9.1 of this Report. As required under accounting standards, accounting expense that...

  • Page 93
    Telstra Corporation Limited and controlled entities Remuneration Report 9.6 Number of Equity Instruments Granted and Vested During Fiscal 2009 Name Options Performance Rights 89,814 97,848 11,116 106,050 42,584 75,334 167,364 Restricted Shares 279,357 300,917 42,010 117,317 316,743 276,950 235,093 ...

  • Page 94
    ... 2007 LTI plan options had an exercise price that was greater than the market price of Telstra shares (ie were out of the money), there was no value associated with these lapsed options. 9.8 KMP Contract Details The key terms and conditions of service contracts for current Senior Executives are...

  • Page 95
    Telstra Corporation Limited and controlled entities (This page has been left blank intentionally) 80

  • Page 96
    ... Telstra Corporation Limited and controlled entities Australian Business Number (ABN): 33 051 775 556 Financial Report as at 30 June 2009 Financial Statements Income Statement ...Statement of Comprehensive Income. Statement of Financial Position ...Statement of Cash Flows...Statement of Changes...

  • Page 97
    Telstra Corporation Limited and controlled entities Income Statement for the year ended 30 June 2009 Telstra Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note Income Revenue (excluding finance income) ...6 Other income ...6 Expenses Labour ...Goods and...

  • Page 98
    ...Translation of financial statements of non-Australian controlled entities ...Actuarial loss on defined benefit plans ...24 30 (7) 23 3,859 (19) (19) 3,241 3,526 3,645 Total comprehensive income for the year ...Attributable to: Profit for the year attributable to equity holders of Telstra Entity...

  • Page 99
    ... - accounted for using the equity method Investments - other ...Property, plant and equipment...Intangible assets...Derivative financial assets...Non-current tax receivables ...Deferred tax assets ...Defined benefit assets ...Total non current assets ...Total assets ...Current liabilities Trade and...

  • Page 100
    ... from investing activities Payments for: - property, plant and equipment ...- intangible assets ...Capital expenditure (before investments) ...- shares in controlled entities (net of cash acquired) ...- payments for other investments ...Total capital expenditure ...Proceeds from: - sale of property...

  • Page 101
    ... our share of the fair value adjustments to TelstraClear Limited net assets upon acquisition of a controlling interest. The reserve balance is amortised over the useful life of the underlying revalued assets. (iv) The general reserve represents other items we have taken directly to equity. 86

  • Page 102
    Telstra Corporation Limited and controlled entities Statement of Changes in Equity (continued) for the year ended 30 June 2009 Telstra Entity Cash flow hedging reserve (ii) $m 38 126 164 (72) 92 Share capital $m Balance at 1 July 2007 ...- total comprehensive income for the year...- dividends ...-...

  • Page 103
    ... of the Telstra Board of Directors on 13 August 2009. The principal accounting policies used in preparing the financial report of the Telstra Group and the Telstra Entity as set out in note 2 to our financial statements. 1.2 Clarification of terminology used in our income statement Under the...

  • Page 104
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 2. Summary of accounting policies 2.1 Changes in accounting policies The following accounting policy changes occurred during the year ended 30 June 2009. (a) Transfer of Assets from Customers AASB ...

  • Page 105
    ... dollars. The financial statements of these entities are translated to Australian dollars (our presentation currency) using the following method: • assets and liabilities are translated into Australian dollars using market exchange rates at balance date; • equity at the date of investment...

  • Page 106
    ...-for-sale' financial assets and are measured at fair value at each reporting date. Fair values are calculated on the following basis: • for listed securities traded in an organised financial market, we use the current quoted market bid price at balance date; and • for investments in unlisted...

  • Page 107
    ... of historical information and expectations of future performance. The expected net cash flows included in determining recoverable amounts of our assets are discounted to present values using a market determined, risk adjusted, discount rate. When determining an appropriate discount rate, we use the...

  • Page 108
    ... over the shorter of the useful life of the improvements or the term of the lease. (b) Telstra as a lessor Where we lease non current assets via a finance lease, a lease receivable equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual...

  • Page 109
    ... of materials and services consumed; and • payroll and direct payroll-related costs for employees (including contractors) directly associated with the project. Software assets developed for internal use have a finite life and are amortised on a straight line basis over their useful lives to us...

  • Page 110
    ...and periods of service. We calculate present values using rates based on government guaranteed securities with similar due dates to our liabilities. We apply management judgement in estimating the following key assumptions used in the calculation of our long service leave provision at reporting date...

  • Page 111
    ...21 for further details regarding our accounting for employee share plans. 2.17 Revenue recognition Our categories of sales revenue are recorded after deducting sales returns, trade allowances, discounts, sales incentives, duties and taxes. (a) Rendering of services Revenue from the provision of our...

  • Page 112
    ... the Financial Statements (continued) 2. Summary of accounting policies (continued) 2.17 Revenue recognition (continued) (c) Rent of network facilities We earn rent mainly from access to retail and wholesale fixed and mobile networks and from the rent of dedicated lines, customer equipment, property...

  • Page 113
    ... is used to determine the value of the plan assets at reporting date and is calculated by reference to the net market values of the plan assets. Defined benefit obligations are based on the expected future payments required to settle the obligations arising from current and past employee services...

  • Page 114
    ...the effect of changes in actuarial assumptions. We apply judgement in estimating the following key assumptions used in the calculation of our defined benefit liabilities and assets at reporting date: • discount rates; • salary inflation rate; and • expected return on plan assets. The estimates...

  • Page 115
    ... and sales of derivative financial instruments are recognised on the date on which we commit to purchase or sell an asset. (a) Fair value hedges We use fair value hedges to mitigate the risk of changes in the fair value of our foreign currency borrowings from foreign currency and interest rate...

  • Page 116
    ...exchange market rates for contracts with similar maturity profiles at the time of valuation. The net fair values of our cross currency and interest rate swaps and other financial assets and financial liabilities that are measured at fair value (apart from our listed investments) are determined using...

  • Page 117
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 2. Summary of accounting policies (continued) 2.24 Recently issued accounting standards to be applied in future reporting periods (continued) (e) Other In addition to the above recently issued ...

  • Page 118
    ... 2008 only); • incentive shares granted under the Growthshare short term incentive scheme; • certain performance rights granted under the Growthshare long term incentive scheme; and • share options issued under TESOP97. In fiscal 2009 and fiscal 2008, the following equity instruments are not...

  • Page 119
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 4. Dividends Telstra Entity Year ended 30 June 2009 2008 $m $m Dividends paid Previous year final dividend paid ...Interim dividend paid ...Total dividends paid...Dividends paid per ordinary share ...

  • Page 120
    ... will be used when the Telstra Entity pays its 2009 final ordinary dividend during fiscal 2010. (b) Franking credits/debits that will arise from the payment/receipt of income tax are expressed at the 30% tax rate on a tax paid basis. These balances represent the current tax payable and current tax...

  • Page 121
    ... services to the New Zealand market. Telstra Country Wide (TCW) is responsible for: • the local management and control of providing telecommunication products, services and solutions to all consumer customers, except those in Sydney and Melbourne, and small business, enterprise and some government...

  • Page 122
    ... of corporate planning, accounting and administration, treasury, risk management and assurance, investor relations and procurement. It also includes providing financial support to all business units and financial management of the majority of the Telstra Entity fixed assets (including network assets...

  • Page 123
    ... to the Financial Statements (continued) 5. Segment information (continued) Telstra Group TC Year ended 30 June 2009 Revenue from external customers . . Other income ...Total income ...Labour expenses ...Goods and services purchased...Other expenses ...Share of equity accounted (profits)/ losses...

  • Page 124
    ... non current assets excludes derivative financial assets, defined benefit assets and deferred tax assets. Note Information about our products and services PSTN products ...ISDN products ...Fixed internet...Other fixed revenue ...Mobiles ...IP and data access ...Business services and applications...

  • Page 125
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 6. Income Telstra Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note Sales revenue Rendering of services ...Sale of goods ...Rent of network facilities and access...

  • Page 126
    ...: Employee redundancy ...Share based payments ...Defined benefit plan expense...24 Goods and services purchased Included in our goods and services purchased are the following: Cost of goods sold ...Rental expense on managed services ...Other expenses Impairment losses: - impairment in value of...

  • Page 127
    ... rate positions relating to the effective component of our fair value hedges: • An increase in Telstra's long term borrowing margins; • A reduction in base market rates; • A reduction in the number of future interest flows as we approach maturity of the financial instrument; and • Discount...

  • Page 128
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 8. Remuneration of auditors Telstra Group Year ended 30 June 2009 2008 $m $m Audit fees Ernst & Young has charged the following amounts for auditing and reviewing the financial reports ...Other services...

  • Page 129
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 9. Income taxes Telstra Group As at 30 June 2009 2008 $m $m Major components of income tax expense Current tax expense...Deferred tax resulting from the origination and reversal of temporary ...

  • Page 130
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 9. Income taxes (continued) Telstra Group As at 30 June 2009 2008 $m $m Deferred tax asset/(deferred tax liability) Deferred tax items recognised in income statement Property, plant and equipment......

  • Page 131
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 9. Income taxes (continued) Telstra Group As at 30 June 2009 2008 $m $m Deferred tax assets not recognised (e): Income tax losses ...Capital tax losses ...Deductible temporary differences ...Telstra ...

  • Page 132
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 10. Trade and other receivables Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at 30 June 2009 2008 $m $m Note Current Trade receivables (a) ...Allowance for doubtful debts (a) ... 3,...

  • Page 133
    ... Post business to Telstra Corporation Limited Closing balance ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... Our policy requires customers to pay us in accordance with agreed payment terms. Depending on the customer segment, our settlement terms are generally 14 to 30 days from date...

  • Page 134
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 10. Trade and other receivables (continued) (b) Finance lease receivable We enter into finance leasing arrangements predominantly for communication assets dedicated to solutions management and ...

  • Page 135
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) . 11. Inventories Telstra Group As at 30 June 2009 2008 $m $m Current Finished goods recorded at cost ...Finished goods recorded at net realisable value ...Total finished goods ...Raw materials and ...

  • Page 136
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 12. Investments Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at 30 June 2009 2008 $m $m Note Investments - accounted for using the equity method Investments in jointly controlled ...

  • Page 137
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 13. Property, plant and equipment Telstra Group As at 30 June 2009 2008 $m $m Land and site improvements At cost ...Buildings (including leasehold improvements) At cost ...Accumulated depreciation/...

  • Page 138
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 13. Property, plant and equipment (continued) Telstra Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note Land and site improvements Opening cost . - ...

  • Page 139
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 13. Property, plant and equipment (continued) Telstra Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note Communication assets (including leasehold ...

  • Page 140
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 13. Property, plant and equipment (continued) Telstra Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note Other plant, equipment and motor vehicles Opening ...

  • Page 141
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 14. Intangible assets Telstra Group As at 30 June 2009 2008 $m $m Goodwill ...Internally generated intangible assets Software assets developed for internal use (a) ...Accumulated amortisation ......

  • Page 142
    ... assets Software assets developed for internal use (a) Opening cost ...- additions...- disposals ...- acquisitions through business combinations ...- disposals through sale of a controlled entity ...- impairment losses ...- foreign currency exchange differences ...- transfer of Trading Post business...

  • Page 143
    ... Limited and controlled entities Notes to the Financial Statements (continued) 14. Intangible assets (continued) Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at 30 June 2009 2008 $m $m Note Patents and trademarks Opening cost ...- disposals ...- acquisitions through business...

  • Page 144
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 14. Intangible assets (continued) Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at 30 June 2009 2008 $m $m Note Customer bases Opening cost ...- disposals ...- acquisitions through business...

  • Page 145
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 14. Intangible assets (continued) Telstra Group As at 30 June 2009 2008 $m $m Deferred expenditure (c) Opening cost ...- additions...- amounts written off (d) ...- foreign currency exchange movements. ...

  • Page 146
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 15. Trade and other payables Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at 30 June 2009 2008 $m $m Note Current Trade creditors (a) ...Accrued expenses ...Accrued capital ...

  • Page 147
    ... annual leave and long service leave accrued by employees. Non current employee benefits for long service leave are measured at their present value. The following assumptions were adopted in measuring this amount: Telstra Group As at 30 June 2009 2008 Weighted average projected increase in salaries...

  • Page 148
    ..., other than employee benefits Telstra Group Year ended 30 June 2009 2008 $m $m Workers' compensation (c) Opening balance ...- additional provisions ...- amount used ...- unwinding of discount on liabilities recognised at present value - effect of any change in the discount rate ...- reversal of...

  • Page 149
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 16. Provisions (continued) (c) Information about our provisions, other than provision for employee benefits Workers' compensation We self insure for our workers' compensation liabilities. We provide ...

  • Page 150
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities This note provides information on our capital structure and our underlying economic positions as represented by the carrying values, ...

  • Page 151
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (a) Capital management (continued) Interest and yields (continued) Table B Telstra Group As at 30 June 2009 2008 $m $m ...

  • Page 152
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (b) Financial assets and financial liabilities The carrying amounts, fair values and face values of our financial assets ...

  • Page 153
    ...Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (b) Financial assets and financial liabilities (continued) Table C Telstra Group As at 30 June 2009 Carrying Fair value Face value...

  • Page 154
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (b) Financial assets and financial liabilities (continued) Table D Telstra Entity As at 30 June 2009 Carrying Fair value Face...

  • Page 155
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (b) Financial assets and financial liabilities (continued) (i) This includes our Euro bond issue in fiscal 2008 not in a ...

  • Page 156
    ... cash balances / finance leases held in foreign currencies by our foreign controlled entities. These foreign currency amounts are reported in Australian dollars based on the applicable exchange rate as at 30 June. Table F Total net debt in Table F agrees to the face value of our financial assets and...

  • Page 157
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (d) Borrowings Our borrowings are unsecured, except for finance leases which are secured, as the rights to the leased ...

  • Page 158
    ... months. Australian dollar...Euro ...United States dollar. . British pound sterling. Japanese yen...New Zealand dollar . . Swiss francs... ... (iii) Telstra bonds and domestic loans Telstra bonds currently on issue relate to wholesale investors and mature up until the year 2020. During fiscal 2009...

  • Page 159
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 17. Capital management, financial assets and financial liabilities (continued) (e) Derivative financial instruments (continued) Table I Cross currency swaps Asset Liability $m $m Current Fair value ...

  • Page 160
    ...; listed investments and investments in other corporations; various forms of borrowings, including medium term notes, promissory notes, bank loans and private placements; and • derivatives. Our activities result in exposure to operational risk and a number of financial risks, including market risk...

  • Page 161
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risk and mitigation (continued) (i) Interest rate risk (continued) The weighted average interest rates on our fixed and floating rate financial instruments...

  • Page 162
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risk and mitigation (continued) (i) Interest rate risk (continued) (*) The average rate is calculated as the weighted average (based on principal / ...

  • Page 163
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risk and mitigation (continued) (ii) Sensitivity analysis - interest rate risk (continued) The following sensitivity analysis is based on our interest rate...

  • Page 164
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risk and mitigation (continued) (iii) Foreign currency risk Foreign currency risk refers to the risk that the value of a financial commitment, forecast ...

  • Page 165
    ... our offshore investments is predominantly Hong Kong dollars, New Zealand dollars and Chinese renminbi (relating to our investments in Hong Kong CSL Limited, TelstraClear Limited, SouFun Holdings Limited, Sequel Limited and Telstra Octave Holdings Limited). Other balances, such as trade and other...

  • Page 166
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risks and mitigation (continued) (iv) Sensitivity analysis - foreign currency risk (continued) The following sensitivity analysis is based on our foreign ...

  • Page 167
    ...receivables, available-for-sale financial assets, finance lease receivables and derivative instruments. To help manage this risk: • we have a policy for performing credit risk assessments on new and existing customers and where required, establishing credit limits and payment terms for entities we...

  • Page 168
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risks and mitigation (continued) Credit risk (continued) In determining the potential credit limit factors to be used in these calculations, the following ...

  • Page 169
    ... a balance between continuity of funding and flexibility through the use of liquid instruments, borrowings and committed available credit lines. At 30 June 2009, based on contractual face values, 9% of the Telstra Group's and the Telstra Entity's debt, comprising offshore borrowings, Telstra bonds...

  • Page 170
    ... financial liabilities Telstra bonds and domestic loans ...Trade/other creditors and accrued expenses...Offshore loans ...Finance leases ...Promissory notes ...Deferred consideration for capital expenditure . (4,780) (3,712) (12,149) (95) (299) (267) (i) Net amounts for interest rate swaps...

  • Page 171
    .... Financial risk management (continued) (a) Risks and mitigation (continued) Liquidity risk (continued) TABLE G Telstra Corporation Limited and controlled entities Carrying amount $m Notes to the Financial Statements (continued) Derivative financial liabilities Interest rate swaps - pay fixed...

  • Page 172
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (a) Risks and mitigation (continued) Liquidity risk (continued) Financing arrangements Table H Telstra Group As at 30 June 2009 2008 $m $m Telstra Entity As at...

  • Page 173
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (b) Hedging strategies (continued) Borrowings de-designated from fair value hedge relationships (continued) In fiscal 2009, the impact on our income statement ...

  • Page 174
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (b) Hedging strategies (continued) Cash flow hedges Cash flow hedges are used to hedge exposures relating to our borrowings and our ongoing business activities...

  • Page 175
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (b) Hedging strategies (continued) Hedges of net investments in foreign operations We have exposure to foreign currency risk as a result of our investments in ...

  • Page 176
    18. Financial risk management (continued) (c) Hedge relationships (continued) Telstra Group and Telstra Entity - 30 June 2009 Table J Face value Pre hedge underlying exposure Native currency $m (Pay)/receive float $m Native currency $m $m $m $m Final leg - Australian dollar $m $m Derivative ...

  • Page 177
    ...200) 640 (9,808) (269) (275) (5,403) 640 (4,930) (275) (5,672) 18. Financial risk management (continued) (c) Hedge Relationships (continued) Table K Face value Telstra Corporation Limited and controlled entities Pre hedge underlying exposure Native currency $m Derivative hedging instruments...

  • Page 178
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (c) Hedge Relationships (continued) Table L describes each of our hedge relationships, where forward foreign currency exchange contracts are used as the ...

  • Page 179
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 18. Financial risk management (continued) (c) Hedge Relationships (continued) Table M describes our hedge relationships where offshore loans and promissory notes are used as the hedging instruments. ...

  • Page 180
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 19. Share capital Telstra Group As at 30 June 2009 2008 $m $m Contributed equity ...Share loan to employees...Shares held by employee share plans...Net services received under employee share plans...5,...

  • Page 181
    ... ...Finance costs ...Dividend revenue ...Distribution from FOXTEL partnership ...Share based payments ...Defined benefit plan expense...Net gain on disposal of property, plant and equipment ...Net gain on disposal of intangibles ...Net gain on disposal of investments ...Share of net (profits)/losses...

  • Page 182
    ... exchange rate at 30 June 2009. Octave Investments Holdings Limited acquired 100% of two businesses being Beauty Sunshine Investments Limited (ChinaM) and Sharp Point Group Limited (Sharp Point). ChinaM is a leading supplier of consumer mobile content and Sharp Point provides technical services...

  • Page 183
    ... fiscal 2009 ...Total purchase consideration ...76 68 3 147 (6) 141 Fair Carrying value value Assets/(liabilities) at acquisition date Cash and cash equivalents ...Trade and other receivables ...Property, plant and equipment...Intangible assets...Trade and other payables ...Deferred tax liabilities...

  • Page 184
    ... International HK Limited sold its 100% shareholding in Damovo Hong Kong Limited for nominal consideration; and • On 30 April 2009, our controlled entity Telstra Service Solutions Holdings sold its 100% shareholding in KAZ Group Pty Limited and KAZ Technology Services Pty Limited for a total...

  • Page 185
    ... of telecommunications equipment is of any value without the other assets to which it is connected in order to achieve delivery of our products and services. As noted in (b) above, the Telstra Entity CGU also includes the Trading Post mastheads and TBS goodwill. (f) During fiscal 2009 the digital...

  • Page 186
    ... or indefinite life intangible assets has been allocated: Discount rate (g) As at 30 June 2009 2008 % % CSL New World Group...TelstraClear Group...Telstra Europe Group ...Sensis Group ...Location Publishing Group...Adstream Group ...Telstra Business Systems Pty Ltd SouFun Group ...1300 Australia Pty...

  • Page 187
    ... Telstra Group As at 30 June 2009 2008 $m $m (a) Capital expenditure commitments Total capital expenditure commitments contracted for at balance date but not recorded in the financial statements: Property, plant and equipment commitments Within 1 year ...Within 1 to 5 years...Intangible assets...

  • Page 188
    ... Included in the financial statements as: Current borrowings ...17 Non current borrowings ...17 Total finance lease liabilities ...17 Description of our finance leases We have finance leases for the following types of assets: • property leases in our controlled entity, Telstra Europe Limited; and...

  • Page 189
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 22. Expenditure commitments (continued) Telstra Group As at 30 June 2009 2008 $m $m (d) Other commitments Other expenditure commitments, other than commitments dealt with in (a), (b) and (c) above, ...

  • Page 190
    ... Service (ULLS) and Line Sharing Service (LSS) A number of Telstra competitors have notified access disputes in relation to ULLS and LSS. The ACCC has made interim determinations in most of these disputes setting access prices for LSS at $2.50 per month and the key Band 2 ULL price of $16 per month...

  • Page 191
    ... contingent assets (continued) Telstra Entity (continued) Indemnities, performance guarantees and financial support (continued) • During fiscal 1998, we resolved to provide IBM Global Services Australia Limited (IBMGSA) with guarantees issued on a several basis up to $210 million as a shareholder...

  • Page 192
    ... by members of the defined benefit schemes are based on the employees' remuneration and length of service. Measurement dates For Telstra Super actual membership data as at 30 April was used to value precisely the defined obligations as at that date. Details of assets, contributions, benefit payments...

  • Page 193
    ...(continued) 24. Post employment benefits (continued) (a) Net defined benefit plan liability / asset - historical summary Our net defined benefit plan liability / asset recognised in the statement of financial position for the current and previous periods is determined as follows: Telstra Group As at...

  • Page 194
    ...) 24. Post employment benefits (continued) (c) Reconciliation of changes in fair value of plan assets Telstra Group As at 30 June 2009 2008 $m $m Fair value of defined benefit plan assets at beginning of year Expected return on plan assets ...Employer contributions ...Contributions tax ...Member...

  • Page 195
    ... Group Year ended 30 June 2009 2008 $m $m Telstra Entity Year ended 30 June 2009 2008 $m $m Note The components of defined benefit plan expense recognised in the income statement within labour expenses are as follows: Current service cost ...Interest cost...Expected return on plan assets ...Member...

  • Page 196
    ... strategic asset allocation of total plan assets. (ii) The present value of our defined benefit obligations is determined by discounting the estimated future cash outflows using a discount rate based on government guaranteed securities with similar due dates to these expected cash flows. For Telstra...

  • Page 197
    ...which forms the basis for determining our contribution levels under the funding deed, represents the total amount that Telstra Super would be required to pay if all defined benefit members were to voluntarily leave the fund on the valuation date. The VBI assesses the short term financial position of...

  • Page 198
    ... (b) ...Telstra Payment Solutions Pty Limited (b) ...Telstra Business Systems Pty Ltd (a) ...Telstra Plus Pty Ltd ...Clayton 770 Pty Ltd ...1300 Australia Pty Ltd ...• Alpha Phone Words Pty Ltd ...Telstra Communications Limited (a) ...• Telecom Australia (Saudi) Company Limited (c)(d)(e) Telstra...

  • Page 199
    ... Permanence Technology Company Limited (c)(f) ...• Sharp Point Group Limited (c)(f) ...• Beijing Liang Dian Shi Jian Technology Company Limited (c)(f) ...• Reach Holdings Limited (c)(e)(f) ...• Reach Network India Private Limited (c)(e)(f) ...• Reach Data Services India Private Limited...

  • Page 200
    ... Controlled entities (continued) • Beijing Australia Telecommunications Technical Consulting Services Company Limited (c) ...• Telstra Holdings (Bermuda) No. 2 Limited ...• CSL New World Mobility Limited ...• Bestclass Holdings Ltd (b) ...• New World PCS Holdings Limited...• CSL Limited...

  • Page 201
    ... Pty Ltd (a)...• Trading Post (TCA) Pty Limited (a) ...• Trading Post Australia Pty Limited (a) ...• Sensis Holdings Pty Ltd (a)...• Telstra Sensis (Beijing) Co Limited (c)(e)(f) ...• Universal Publishers Pty Limited (a) ...• Sensis (Victoria) Pty Ltd ...Total investment in consolidated...

  • Page 202
    ... Services Solutions Holdings Limited; Sensis Pty Ltd; Universal Publishers Pty Limited; Sensis Holdings Pty Ltd; Telstra Pay TV Pty Ltd; and Telstra Business Systems Pty Ltd. ASIC deed of cross guarantee financial information The consolidated income statement and statement of financial position...

  • Page 203
    ... ...Investments - accounted for using the equity method Investments - other ...Property, plant and equipment...Intangible assets...Derivative financial assets...Non current tax receivables ...Defined benefit assets ...Total non current assets ...Total assets ...Current liabilities Trade and...

  • Page 204
    ... deed of cross guarantee financial information (continued) Closed group income statement and retained profits reconciliation Closed group Year ended 30 June 2009 2008 $m $m Income Revenue (excluding finance income) ...Other income ...Expenses Labour ...Goods and services purchased ...Other expenses...

  • Page 205
    ... the financial results, position and cash flows of these entities into our group financial report. The following companies have applied to the ASIC for deregistration during fiscal 2009 Telstra Corporate Services Pty Limited; Collectormania Australia Pty Ltd; Communications Network Holdings Pty...

  • Page 206
    ...Octave Investments Holdings Limited acquired 100% of the issued capital of Beauty Sunshine Investments Limited and Sharp Point Group Limited along with their controlled entities. These entities are internet businesses with leading positions in the mobile content and online music sectors. • Two new...

  • Page 207
    ... Telstra Foundation Ltd (a) LinkMe Pty Ltd (b) (f)(g) Pay television Pay television Customer service Management services Pay television International connectivity services Toll free number portability in New Zealand Management services 3G network services Regional roaming provider Mobile phone...

  • Page 208
    ... Mobile Pte Ltd - 31 March; and Australia-Japan Cable Holdings Limited - 31 December. Financial reports prepared as at 30 June are used for equity accounting purposes. Our ownership interest in jointly controlled and associated entities with different balance dates is the same at that balance date...

  • Page 209
    ... on future property payments under agreements entered into between the 3GIS Partnership and various other parties. 15 - - 23 7 1 1 2,043 1,983 1 2 Under the Telstra Network Access Contract dated 6 December 2004, we are charged a 3G Network Access Charge that includes our 50% share of the...

  • Page 210
    ..., revenue and expense items (including jointly controlled and associated entities where equity accounting has been suspended): Jointly controlled entities Telstra Group Year ended/As at 30 June 2009 2008 $m $m Current assets ...Non current assets...Total assets ...Current liabilities ...Non current...

  • Page 211
    ... Partnership, Customer Services Pty Limited, FOXTEL Management Pty Limited and FOXTEL Cable Television Pty Ltd. A $100 million distribution was received from FOXTEL during the year (2008: $130 million). This has been recorded as revenue in the income statement and has increased our cumulative share...

  • Page 212
    ... of equity instruments Incentive shares (fiscal 2009 and 2008 (all eligible executives except former CEO)): Historically, as part of the short term incentive scheme, the Board allocated 25% of executives' actual short term incentives as Telstra shares. As the recent changes to tax laws governing...

  • Page 213
    ...Long term incentive (LTI) plans The purpose of the long term incentive (LTI) plans is to align key executives' rewards with shareholders' interests, and reward performance improvement whilst supporting business plans and corporate strategies. The Telstra Growthshare Trust Board administers the plans...

  • Page 214
    ... Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (i) Outstanding equity based instruments Allocations have been made over a number of years in the form of performance rights, restricted shares...

  • Page 215
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (i) Outstanding equity based instruments (continued) In relation to these executive...

  • Page 216
    ... employed by an entity that forms part of the Telstra Group three years after the commencement date of the options, the options will vest. These options are not subject to any performance hurdles. Relative Total Shareholder Return (RTSR) options (fiscal 2009 for all executives except the former CEO...

  • Page 217
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iii) Performance hurdles (continued) If Telstra achieves a rank of less than ...

  • Page 218
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iii) Performance hurdles (continued) During fiscal 2009, the Board approved a change...

  • Page 219
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iii) Performance hurdles (continued) Operating Expense Growth (OEG), Revenue ...

  • Page 220
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iv) Summary of movements and other information Number of equity instruments ...

  • Page 221
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iv) Summary of movements and other information (continued) Number of equity ...

  • Page 222
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (iv) Summary of movements and other information (continued) Options (*) ...

  • Page 223
    ... to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (b) Long term incentive (LTI) plans (continued) (v) Fair value of equity instruments granted The fair value of LTI instruments granted during the financial year was calculated using...

  • Page 224
    ... relates to employees short term incentive payments and the 24 October 2008 grant relates to shares acquired through salary sacrifice by employees. The weighted average fair value of fully paid shares granted to directors and executives under the Directshare and Ownshare plans as at 30 June 2009...

  • Page 225
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) Telstra Growthshare Trust (continued) (c) Telstra Directshare and Ownshare (continued) (iii) Summary of movements The table below provides information about our ...

  • Page 226
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) TESOP99 and TESOP97 As part of the Commonwealth's sale of its shareholding in fiscal 2000 and fiscal 1998 we offered eligible employees the opportunity to buy ordinary...

  • Page 227
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 27. Employee share plans (continued) TESOP99 and TESOP97 (continued) The Telstra ESOP Trustee continues to hold the loan shares where the employee has ceased employment and elected not to repay the ...

  • Page 228
    ... Our key management personnel (KMP) have authority and responsibility for planning, directing and controlling the activities of the Telstra Group. Our KMP consist of: • the Directors of the Telstra Entity; and • certain executives in the Chief Executive Officer's (CEO's) senior leadership...

  • Page 229
    ... Financial Statements (continued) 28. Key management personnel compensation (continued) KMP aggregate compensation During fiscal 2009 and fiscal 2008, the aggregate compensation provided to our KMP was: Telstra Group As at 30 June 2009 2008 $ $ Short term employee benefits Post employment benefits...

  • Page 230
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 28. Key management personnel compensation (continued) KMP interests in shares of Telstra Entity During fiscal 2009, our KMP and their related entities held share capital of the Telstra Entity directly,...

  • Page 231
    ... Limited and controlled entities Notes to the Financial Statements (continued) 28. Key management personnel compensation (continued) KMP interests in shares of Telstra Entity (continued) During fiscal 2008, our KMP and their related entities held share capital of the Telstra Entity directly...

  • Page 232
    ... Corporation Limited and controlled entities Notes to the Financial Statements (continued) 28. Key management personnel compensation (continued) KMP interests in options and rights of Telstra Entity The following details the balances and changes in instruments issued for our KMP during fiscal 2009...

  • Page 233
    ... in options and rights of Telstra Entity (continued) Vested and Total held exercisable Vested Exercised during the Other at 30 June at 30 June during the year changes (b) 2009 (c) 2009 (c) year Number Number Number Number Number Instrument type director/senior executive Incentive shares rights...

  • Page 234
    Telstra Corporation Limited and controlled entities Notes to the Financial Statements (continued) 28. Key management personnel compensation (continued) KMP interests in options and rights of Telstra Entity (continued) The following details the balances and changes in instruments issued for our KMP ...

  • Page 235
    ...contract management services for the national directory service; and • the Telstra Entity received income from its controlled entity Telstra Multimedia Pty Ltd amounting to $331 million (2008: $309 million) for access to ducts that store the national hybrid fibre coaxial (HFC) cable network. 220

  • Page 236
    ...million from Telstra Holdings Pty Ltd during fiscal 2009. The Telstra Entity recorded dividend revenue from Telstra Media Pty Limited of $127 million, Sensis Pty Ltd of $81 million and Telstra Services Solutions Holdings Limited of $48 million in fiscal 2008. (c) The profit before income tax expense...

  • Page 237
    ... Reach Ltd (Reach) in line with market prices. These were for both the purchase of, and entitlement to, capacity and connectivity services; and • sales to Reach were made for international inbound call termination services, construction and consultancy by the Telstra Group of $69 million (2008...

  • Page 238
    ... by Telstra Corporation Limited. These bonds had a cost of $6 million and a market value of $6 million at 30 June 2008. All purchases and sales of Telstra shares and bonds by Telstra Super are determined by the trustee and/or its investment managers on behalf of the members of Telstra Super. Key...

  • Page 239
    ...reinvestment plan (DRP) for the 2009 final dividend and accordingly the directors of Telstra Corporation Limited have determined the DRP continues to be suspended. Change in Directshare terms As a result of the changes to tax laws governing employee share schemes, creating uncertainty in relation to...

  • Page 240
    ... declared: (a) the financial statements and notes of the Telstra Entity and the Telstra Group set out on pages 81 to 224: (i) comply with the Accounting Standards and Corporations Regulations; (ii) give a true and fair view of the financial position as at 30 June 2009 and performance, as represented...

  • Page 241
    ... financial report of Telstra Corporation Limited and the entities it controlled during the year ended 30 June 2009 (the Telstra Group), which comprises the statement of financial position as at 30 June 2009, and the income statement, statement of comprehensive income, statement of changes in equity...

  • Page 242
    Telstra Corporation Limited and controlled entities (This page has been left blank intentionally) 227

  • Page 243
    Telstra Corporation Limited and controlled entities (This page has been left blank intentionally) 228

  • Page 244
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