Telstra 2011 Annual Report Download - page 226

Telstra Corporation Limited and controlled entities
211
Notes to the Financial Statements (continued)
(a) Includes $283 million (2010: $404 million) of impairment
losses relating to the value of our investments in and amounts
owed by our controlled entities. The impairment losses have been
eliminated on consolidation of the Telstra Group.
Except for those noted below, our accounting policies for the
Telstra Entity are consistent with those for the Telstra Group:
• Under our tax funding arrangements, amounts receivable (or
payable) recognised by the Telstra Entity for the current tax
payable (or receivable) assumed from our wholly owned entities
are booked as current assets or liabilities.
• Investments in controlled entities, included within non current
assets above, are recorded at cost less impairment of the
investment value. Where we hedge the value of our investment
in an overseas controlled entity, the hedge is accounted for in
accordance with note 2.22. Refer to note 25 for details on our
investments in controlled entities.
• Our interests in associated and jointly controlled entities,
including partnerships, are accounted for using the cost method
of accounting and are included within non current assets in the
table above.
Property, plant and equipment commitments
Contingent liabilities and guarantees
Common law claims
Certain common law claims by employees and third parties are yet
to be resolved. As at 30 June 2011, management believes that the
resolution of these contingencies will not have a significant effect
on the Telstra Entity's financial position, results of operations or
cash flows. The maximum amount of these contingent liabilities
cannot be reasonably estimated.
Included in our common law claims is the following litigation case:
Optus Confidential Information
Optus commenced proceedings in the Federal Court of Australia in
December 1997 alleging that Telstra breached the Trade Practices
Act and misused Optus’ confidential information. All the claims
were subsequently settled or withdrawn other than a confidential
information claim (relating to the preparation and use of STD and
IDD market share reports). It relates to historical events in the
period from 1993-2003.
In April 2009, the Federal Court held that Telstra breached the
terms of its Access Agreement with Optus by preparing STD and
IDD market share reports, but that Telstra had not also breached
an equitable duty of confidence. Optus successfully appealed the
equity finding to the Full Federal Court in early 2010. Telstra filed
a special leave application on this issue to the High Court. On 30
July 2010, the High Court dismissed Telstra’s application as
premature but made it clear that Telstra’s right to seek leave to
appeal on this issue was preserved until after the final judgment in
these proceedings. Optus has not yet quantified its claim and no
trial date has been set. Hence, it is not yet possible to estimate
Telstra’s actual liability to Optus, if any.
30. Parent entity information
Telstra Entity
As at 30 June
2011 2010
$m $m
Statement of Financial Position
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,430 6,363
Total non current assets (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,679 32,946
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,109 39,309
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,726 9,321
Total non current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,871 17,342
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,597 26,663
Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,610 5,590
Cashflow hedging reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14) 157
General reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 194
Retained profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,722 6,705
Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,512 12,646
Telstra Entity
Year ended 30 June
2011 2010
$m $m
Statement of Comprehensive Income
Profit for the year (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,367 3,811
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,319 3,767
Telstra Entity
As at 30 June
2011 2010
$m $m
Total property, plant and equipment
expenditure commitments contracted for
at balance date but not recorded in the
financial statements . . . . . . . . . 415 578