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TELSTRA
ANNUAL
REPORT
2014

Table of contents

  • Page 1
    TELSTRA ANNUAL REPORT 2014

  • Page 2
    ... enterprise partners and are distributed by over 15,000 retail points of presence managed by our partners. In Australia, we provide 16 million mobile services, 7.5 million fixed voice services and 3.7 million fixed data services. Telstra's international businesses include Telstra's global networks...

  • Page 3
    Telstra Annual Report 1

  • Page 4
    ...CENT TOTAL DIVIDEND which will distribute $3.7 billion to shareholders total income up 6.1 per cent from FY13 (ii) $1.1B invested in our wireless network (i) Figures on a continuing and discontinued operations basis. For more detail, refer to page 15 of the Full Year Results and Operations Review...

  • Page 5
    ... tax up 14.6 per cent from FY13 (i) DOMESTIC RETAIL MOBILE SERVICES 82% EMPLOYEE ENGAGEMENT SCORE five percentage points above the Australian National Norm 30% REDUCTION IN CARBON EMISSIONS INTENSITY 3 PT CUSTOMERS ON A BUNDLED PLAN increase in NET PROMOTER SYSTEM SCORE Telstra Annual Report...

  • Page 6
    ... application service offerings into Asia, and launching Global Managed Network Services and Global Infrastructure as a Service. Our strategy is supported by the establishment of a new business unit, Global Enterprise and Services. This is an industry-based services and solutions business operating...

  • Page 7
    ... franked dividend for the 2014 financial year. network services, international data, voice and satellite solutions and they also manage our submarine cable networks and assets. We continue to leverage these assets for growth. We also made further changes to our international business, creating...

  • Page 8
    ... following Telstra shareholder approval gained at the Annual General Meeting in November 2011 and ACCC acceptance of Telstra's structural separation undertaking in March 2012. The Definitive Agreements, together with the regulatory undertakings given to the ACCC and associated Government policy...

  • Page 9
    ... makes our ambitions clear. It shows where you can expect us to focus our efforts towards building value. The strategy now has been consolidated into three pillars. Our Strategic Priorities Improve Customer Advocacy Drive Value from the Core Build New Growth Businesses Telstra Annual Report 7

  • Page 10
    ... business cards with direct staff phone numbers. When installing new services or fixing existing services, our communications technicians now provide customers with cards listing their name and contact number so customers can follow up directly with the technician. Our Philippines based operations...

  • Page 11
    ... help customers enjoy a number of unique experiences. Since then, over one million customers have taken up our We are increasing our investment in our digital service for customers through our multi year Digital First program. This will give our customers even greater control Telstra Annual Report...

  • Page 12
    Strategy and Performance DRIVE VALUE FROM THE CORE We recently started designing Australia's largest national public Wi-Fi access network as part of a five year $100 million project. GARY TANG TELSTRA OPERATIONS a bundled plan. You can read more detail on this topic in the Full Year Results and...

  • Page 13
    ... 2014. We believe our partnership with Platinum Equity will maximise the value of the Sensis asset for Telstra shareholders. Telstra Annual Report 11 Network Applications and Services The NAS portfolio provides business and government customers of all sizes with an extensive range of network...

  • Page 14
    ... year ahead. In our core businesses, we will continue to drive innovation and maintain our network leadership. Our fixed data network differentiation will be enhanced by the implementation of Australia's largest national public Wi-Fi access network. As the NBN rolls out to more communities around...

  • Page 15
    ... to our customers. We manage this risk centrally through our Procurement and Enterprise Services Group by undertaking a due diligence process for new third parties, assessing their compliance with our business continuity requirements, and conducting training on key Telstra Telstra Annual Report 13...

  • Page 16
    Strategy and Performance MANAGING OUR RISKS policies, while the day to day relationship is conducted and managed within the relevant business units. We have also introduced a Supplier Code of Conduct outlining our expectations of suppliers in terms of labour and human rights, environment, ethical ...

  • Page 17
    ... Earnings per share (cents) (i) Restatement due to the retrospective adoption of AASB 119: Employee Entitlements (refer note 2.1(e) of the Financial Report for details). (ii) Capex is defined as additions to property, equipment and intangible assets including capital lease additions, measured...

  • Page 18
    ...% NAS 8% PRODUCT SALES REVENUE BREAKDOWN Mobile 38% has set the foundation for future growth. Our strategy is to improve customer advocacy, drive value from the core and build new growth businesses. On 14 August 2014, the Directors of Telstra resolved to pay a fully franked final dividend of 15...

  • Page 19
    ... network delivers to enterprise, government and business customers by providing unified communications, cloud, managed networks and security services. During the year we made acquisitions to complement our capability. NSC Group is a leading provider of unified communications solutions in Australia...

  • Page 20
    ...Premium Pay TV and Foxtel on T-Box® 'paylite' services. This was offset by a decline in Sensis voice and advertising services of 22.0 per cent. CSL New World Mobility In May 2014 we announced the sale of our 76.4 per cent stake in CSL to HKT Limited, and received US$1.99 billion in proceeds (A$2.11...

  • Page 21
    ...together our key retail facing businesses including Telstra Consumer, Telstra Business, Telstra Media Group and Telstra Health. Telstra Retail provides the full range of telecommunications products, services and solutions to consumer customers and to Australia's small to medium sized enterprises, as...

  • Page 22
    ... 70 per cent shareholding in the Sensis directories business. The prior year included cash proceeds from the sale of TelstraClear of $669 million. Cash from operating activities increased by $254 million or 3.0 per cent due to the continued strong performance of our mobility products combined with...

  • Page 23
    ... cent at 30 June 2013 to 43.0 per cent at 30 June 2014 and also our debt servicing ratio. Liquidity will be reduced in the first quarter of financial year 2015 to fund planned cash outï¬,ows such as spectrum licence payments and dividend payments. Statement of Financial Position Our balance sheet...

  • Page 24
    ... governs Telstra's sustainability strategy and performance. Membership comprises Telstra's Executive Committee. Regular reports on sustainability progress and key developments are provided to the CEO and the Telstra Board. Telstra's Chief Sustainability Officer provides strategic leadership for...

  • Page 25
    ... active role as a member of the Australian Government's Online Safety Consultative Working Group and as co-chair of the Technology and Wellbeing Roundtable with ReachOut. com by Inspire Foundation. Telstra is the only Australasian member of the Family Online Safety Institute (FOSI), an international...

  • Page 26
    ... proactively reviews new site proposals, develops community consultation plans and works with the community to determine acceptable sites for new base stations. This year, we continued our mobile safety SMS campaign, sending out more than eleven million messages referring customers to www.telstra...

  • Page 27
    ... our business. We have governance structures at Board and executive levels to guide and monitor health and safety performance and have continued to focus on identifying and controlling workplace health and safety hazards and risks. This year, Telstra categorised its workforce into 12 main workgroups...

  • Page 28
    ... and intersex (GLBTI) employees. FY14 result does not include Chief Entertainment Pty Ltd, 02 Networks Pty Ltd and DCA Direct Health Pty Ltd, as they did not participate in the 2014 Employee Engagement Survey. (ii) Full time and part time staff in Telstra Corporation Limited and its wholly owned...

  • Page 29
    ... the starting point for all roles. Telstra is required by the Workplace Gender Equality Act 2012 to report our workforce gender profile as at 31 March each year. Our 2014 report was lodged with the Workplace Gender Equality Agency on 27 May 2014 and is provided in the corporate governance section...

  • Page 30
    ...areas of NSW. To extend the program's reach to as many seniors as possible, self-help DVDs were distributed to libraries and key community agencies. They cover subjects such as getting started with smartphones and tablets, social networking, and online banking and shopping. 28 Telstra Annual Report

  • Page 31
    ...need for smart, safe and responsible use of technology. To date, more than a third of public libraries across Australia (approximately 500 libraries) have started the eSmart journey, exceeding our FY14 target of 260. through purpose built online networks and apps or running an online business. and...

  • Page 32
    ...our products and services, and our supply chain. FY12 FY13 (ii) Australian operations for Telstra Corporation Limited. This includes relevant Australian subsidiaries, joint ventures and partnerships. Sensis Group has been included from 1 July 2013 until 28 February 2014. 30 Telstra Annual Report...

  • Page 33
    ... Climate Risk report, Connecting with a Low Carbon Future found that if ICT opportunities such as remote appliance power management, decentralised working and real time ï¬,eet management are realised, they could help Australians to achieve cost savings of almost $8.1 billion per year while cutting...

  • Page 34
    ... Managing Director of Telstra Mobiles and in December 2002 was appointed as Group Managing Director Telstra Enterprise and Government where he was responsible for the Company's corporate, government and large business customers in Australia,TelstraClear in New Zealand and Telstra's International...

  • Page 35
    ... the information technology, internet and online media industry. He led Microsoft Australia and New Zealand from 2003 to January 2007 before moving to the United States to become the company's online business head of worldwide sales and international operations. Previously, he was Chief Executive Of...

  • Page 36
    ... and administration, treasury, risk management and assurance, corporate security, investor relations, and mergers and acquisitions. International is responsible for development of Telstra operations and activities outside of Australia. Timothy Chen President, Telstra International Mr Chen's role is...

  • Page 37
    ... to risk management and assurance at Telstra in the Strategy and Performance (Managing our risks) section of this Annual Report, and diversity and inclusion in the Sustainability (Our people) section. Shareholders Our governance framework includes: › Open, clear and timely communications with...

  • Page 38
    ... to open, clear and timely communications with our shareholders and investors about matters affecting the value of their investment in Telstra. We also recognise the importance of meeting our continuous disclosure and other legal obligations to the market. We value a direct, two-way dialogue...

  • Page 39
    ... by the Board under Telstra's equity plans. › outside directorship requests from executives in relation to publicly listed companies or managers of listed managed investment schemes. › Provides a forum for communication between the Board, management and both the internal and external auditors...

  • Page 40
    ... process is supported by an independent service provider and all disclosures are treated confidentially and can be made anonymously. Securities Trading - setting out the rules and restrictions relating to buying, selling and otherwise dealing in Telstra securities by our Directors, CEO, senior...

  • Page 41
    ... the Telstra Group is set out in our Operating and Financial Review (OFR), consisting of Our Business, Key Highlights, Chairman and CEO Message, Strategy and Performance and Full Year Results and Operations Review from the inside cover to page 21 of this Annual Report. Dividends Significant changes...

  • Page 42
    ... likely developments in Telstra's operations and the expected results of those operations in future financial years (see Our Business, Key Highlights, Chairman and CEO Message, Strategy and Performance and Full Year Results and Operations Review from the inside cover to page 21 of this Annual Report...

  • Page 43
    ... of Telstra Corporation Limited effective 1 January 2012. Mr Coleman joined Telstra in 1998 and has served in senior legal roles across the company, including in Sensis, Mergers and Acquisitions and Telstra Operations. Most recently, he was General Counsel, Finance and Administration, Office of...

  • Page 44
    ...to meet Telstra's minimum standards. In response, we implemented improvements to our asbestos management procedures, including requiring all contractors to complete new training before they can work on our network, the appointment of additional supervisors to monitor worksites, and co-operating with...

  • Page 45
    ...receiver/liquidation services. A copy of the auditor's independence declaration is set out in the Auditor's Independence Declaration to the Directors of Telstra Corporation Limited on page 64 and forms part of this report. Telstra Corporation Limited and controlled entities Telstra Annual Report 43

  • Page 46
    ... opportunity, achievement by key performance indicators (KPI) and a comparison of payments to the previous year. Details the LTI outcomes for plans with a performance test at 30 June 2014. Lists the key contract terms governing the employment of Senior Executives (including termination entitlements...

  • Page 47
    ... company strategy and enhance remuneration governance. These changes were: Structural changes GE Global Enterprise & Services (GES): Brendon Riley was appointed as GE on 28 October 2013 of a newly created business unit that operates a global, industry-based services and solutions business to support...

  • Page 48
    ...FY11 LTI Plan was $2.95 and the Telstra share price as at 30 June 2014 was $5.21. This increase of 76.6 per cent is reflected in the value of the equity that became unrestricted, demonstrating the link between executive remuneration and shareholder returns. 1.3 Key Management Personnel KMP comprise...

  • Page 49
    ... performance and remuneration are reviewed and subject to Board approval. 2. SETTING SENIOR EXECUTIVE REMUNERATION 2.1 Remuneration policy, strategy and governance Our remuneration policy is designed to: • support the business strategy and reinforce our culture and values • link financial...

  • Page 50
    .... • Set based on market and internal relativities, performance, qualifications and experience. Reinforce values and cultural priorities AT RISK Short Term Incentive Reward achievement of financial and strategic objectives Align to long term shareholder value creation Long Term Incentive EQUITY...

  • Page 51
    ...Restricted Shares At the end of FY16, the Board will review Telstra's audited financial results for FCF ROI and RTSR to determine the percentage of Performance Rights that vest as Restricted Shares under the FY14 LTI Plan. Telstra Corporation Limited and controlled entities Telstra Annual Report 49

  • Page 52
    ... REPORT Until the Performance Rights vest as Restricted Shares, a Senior Executive has no legal or beneficial interest in Telstra shares, no entitlement to receive dividends and no voting rights in relation to any securities granted under the FY14 LTI Plan. If a Senior Executive leaves Telstra...

  • Page 53
    ...Senior Executives. 3.1 Financial performance Details of Telstra's performance, share price, and dividends over the past five years are summarised in the table below: Performance measures Earnings Total Income EBITDA Net Profit (2) Shareholder value Share price ($) (3) Total dividends paid per share...

  • Page 54
    ... are no windfall gains or losses due to the timing of the NBN roll out. The Board also excluded spectrum purchases as well as acquisitions and divestments including CSL, the Sensis advertising and directories business and TelstraClear. The result was reviewed by Telstra's Group Internal Audit team...

  • Page 55
    ... LTI plan format where performance testing was done in years 2, 3 and 4. This was different to the current format of a 3 year performance period plus 1 year Restriction Period. 3.4 Senior Executive contract details The key terms and conditions of service contracts for current Senior Executives are...

  • Page 56
    ... under the equity settled share based payments columns are based on accounting values and do not reflect actual payments received by Senior Executives in FY14. Short term employee benefits Postemployment benefits Termination benefits Other long term benefits Name and title Year David Thodey...

  • Page 57
    ...) and fringe benefits tax. (2) Short term incentives (cash) relates to performance in FY13 and FY14 respectively and is based on actual performance for Telstra and the individual. (3) Includes the value of personal home security services provided by Telstra, provision of car parking and in the...

  • Page 58
    ... Report. The Restricted Shares are subject to a Restriction Period, half for one year, half for two years ending 30 June 2015 and 30 June 2016 respectively, subject to the Senior Executive's continued employment. Refer to section 2.2.2 for further details. Rick Ellis did not receive an STI payment...

  • Page 59
    ... tranche is scheduled to vest on 14 December 2014 subject to Andrew Penn's continued employment and satisfactory performance. As Rick Ellis ceased to be a KMP as at 31 March 2014, he has been excluded from the table above. Telstra Corporation Limited and controlled entities Telstra Annual Report 57

  • Page 60
    .... 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 5.1. (2) (3) Telstra Corporation Limited and controlled entities 58 Telstra Annual Report

  • Page 61
    ... and the resultant Restricted Share has been released from restriction and provided to the executive. Table 5.8 includes details of such Restricted Shares allocated during FY14. All service and performance conditions for each of the options or rights granted in previous financial years and that...

  • Page 62
    ... instruments that have lapsed during the year represents the value foregone and is calculated at the date the equity instruments lapsed using valuation methodologies as described in note 27 to the financial statements. Telstra Corporation Limited and controlled entities 60 Telstra Annual Report

  • Page 63
    ... Short term employee benefits Name Catherine B Livingstone Chairman Geoffrey A Cousins (3) Director Russell A Higgins Director Chin Hu Lim (4) (7) Director John P Mullen Director Nora L Scheinkestel Director Margaret L Seale Director Steven M Vamos (5) Director John D Zeglis (7) Director Total...

  • Page 64
    ... KMP and their related parties held share capital of the Telstra Entity directly, indirectly or beneficially as follows: Total shares Equity instru- STI Restricted held at ments vested/ Shares 30 June 2013 exercised granted (2) (1) Non-Executive Directors Catherine B Livingstone Geoffrey A Cousins...

  • Page 65
    ... detailed in Table 5.7 for non-executive Directors Performance Share Restricted Share Restriction Period RTSR Senior Executive Service Agreement SSU STI STI Deferral Plan Straight-line Vesting Total Income Total Remuneration Telstra Corporation Limited and controlled entities Telstra Annual Report...

  • Page 66
    ... any applicable code of professional conduct. Ernst & Young Catherine B Livingstone AO Chairman 14 August 2014 David I Thodey Chief Executive Officer and Executive Director 14 August 2014 SJ Ferguson Partner Sydney 14 August 2014 A member firm of Ernst & Young Global Limited Liability limited by...

  • Page 67
    ... controlled entities...Note 26 - Investments in joint ventures and associated entities...Note 27 - Employee share plans ...Note 28 - Key management personnel compensation...Note 29 - Related party disclosures ...Note 30 - Parent entity information...Note 31 - Events after reporting date...Directors...

  • Page 68
    ... operations (cents per share) Basic ...3 Diluted ...3 Earnings per share (cents per share) Basic ...3 Diluted ...3 The notes following the financial statements form part of the financial report. 34.4 34.3 30.1 30.0 Telstra Corporation Limited and controlled entities 66 Telstra Annual Report

  • Page 69
    ......- changes in fair value transferred to other expenses...- changes in fair value transferred to goods and services purchased ...- changes in fair value transferred to finance costs ...- income tax on movements in the cash flow hedging reserve ... Telstra Group Year ended 30 June Restated 2014 2013...

  • Page 70
    ...Total non current liabilities ...Total liabilities ...Net assets ...Equity Share capital ...19 Reserves ...Retained profits ...Equity available to Telstra Entity shareholders...Non-controlling interests...Total equity ...The notes following the financial statements form part of the financial report...

  • Page 71
    ...investments...Total capital expenditure (including investments)...Proceeds from: - sale of property, plant and equipment ...- sale of intangible assets...- sale of shares in controlled entities (net of cash disposed) ...20(d) - sale of businesses (net of cash disposed) ...Proceeds from finance lease...

  • Page 72
    ... and equipment or inventory. (c) The general reserve represents other items we have taken directly to equity. (d) During the year we decreased our ownership of Autohome Inc. from 66.0 per cent at 30 June 2013 to 63.2 per cent at 30 June 2014 via share buy-back, subsequent initial public offering and...

  • Page 73
    ... other financial measures, primarily to evaluate the Company's operating performance before financing, income tax and non-cash capital related expenses. In addition, we believe EBITDA is useful to investors because analysts and other members of the investment community largely view EBITDA as a key...

  • Page 74
    ... against our previous fair value measurements of assets and liabilities and there is no change to how we measure fair value. We use exit prices and, where possible, observable market-based inputs to determine fair value. Telstra Corporation Limited and controlled entities 72 Telstra Annual Report

  • Page 75
    ... classified as long term employee benefits and needs to be measured on a discounted basis. We have assessed the financial effect of discounting our long term annual leave balances to be immaterial to our financial results. Telstra Corporation Limited and controlled entities Telstra Annual Report 73

  • Page 76
    ... our financial report. (h) Other In addition to the above changes in accounting policy, we note the following new accounting standards that are applicable to us from 1 July 2013: • AASB 2011-4: "Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure...

  • Page 77
    ... equivalents include cash at bank and on hand, bank deposits, negotiable certificates of deposit and bills of exchange that are held for the purposes of meeting short term cash commitments rather than investment purposes. Telstra Corporation Limited and controlled entities Telstra Annual Report 75

  • Page 78
    ... require the unanimous consent of the parties sharing control. The classification of a joint arrangement as a joint operation or joint venture depends on the rights and obligations of the parties to the arrangement. Telstra Corporation Limited and controlled entities 76 Telstra Annual Report

  • Page 79
    ...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 active market, we use the current quoted market bid price at reporting date • for investments in unlisted entities whose securities...

  • Page 80
    ... of service lives for financial year 2014 was a decrease in depreciation expense of $200 million (2013: $224 million) for the Telstra Group. Our major repairs and maintenance expenses relate to maintaining our exchange equipment and the customer access network. We charge to operating expenses...

  • Page 81
    ... (b) Internally generated intangible assets Where we acquire non current assets via a finance lease, the lower of the fair value of the asset and the present value of future minimum lease payments is capitalised as equipment under finance leases at the beginning of the lease term. Capitalised lease...

  • Page 82
    ... securities with due dates similar to those of our liabilities. Identifiable intangible assets Software assets ...Patents and trademarks ...Mastheads...Licences...Brand names ...Customer bases ...Deferred expenditure... Telstra Corporation Limited and controlled entities 80 Telstra Annual Report

  • Page 83
    ... calculation of our long service leave provision at reporting date: • weighted average projected increases in salaries • discount rate (determined by reference to a State and Commonwealth blended 10-year Australian government bond rate). Refer to note 16 for further details on the key management...

  • Page 84
    ...our 100 per cent shareholding in Sensis Pty Ltd and its controlled entities (Sensis Group) and acquisition of 30 per cent of Project Sunshine I Pty Ltd, the new holding company of the Sensis Group. The sale excluded the voice services business. As a result, the Sensis Group advertising and directory...

  • Page 85
    ... has risks of ownership of the product or delivery of the services • Telstra is involved in price setting • Telstra is involved in determining the product or service specifications • Telstra bears the credit risk. Telstra Corporation Limited and controlled entities Telstra Annual Report 83

  • Page 86
    ...shareholders after tax by the weighted average number of ordinary shares outstanding during the period (adjusted for the effects of the instruments in the Telstra Growthshare Trust and the Telstra Employee Share Ownership Plans). Telstra Corporation Limited and controlled entities 84 Telstra Annual...

  • Page 87
    ... next annual reporting period. On 28 February 2014, we divested 70 per cent of our directories business via disposal of our 100 per cent shareholding in Sensis Pty Ltd and its controlled entities (Sensis Group) and acquisition of 30 per cent of Project Sunshine I Pty Ltd, the new holding company of...

  • Page 88
    ... in offsetting changes in fair values or cash flows of hedged items. Purchases and sales of derivative financial instruments are recognised on the date on which we commit to purchase or sell an asset or liability. (a) Fair value hedges 2.21 Employee Share Plans (continued) The Telstra Growthshare...

  • Page 89
    ... whether an obligation should be recorded as a liability or a contingent liability. This requires management to assess the probability that Telstra will be required to make payment as well as an estimate of that payment. Telstra Corporation Limited and controlled entities Telstra Annual Report 87

  • Page 90
    ... tax assets, assets arising from employee benefits and financial assets that are carried at fair value. An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases...

  • Page 91
    ..." • AASB 2014-1 "Australian Accounting Standards - Part A: Annual Improvements 2010 - 2012 and 2011-2013 Cycles, Part B: "Defined Benefit Plans: Employee Contributions (Amendments to AASB 119)" • Amendments to IFRS 11 "Accounting for Acquisitions of Interests in Joint Operations" • Amendments...

  • Page 92
    ... schemes are not considered dilutive to earnings per share. Refer to note 27 for details of equity instruments issued under the Growthshare and TESOP share plans. 12,443 (25) 12,418 27 12,445 12,443 (37) 12,406 38 12,444 Telstra Corporation Limited and controlled entities 90 Telstra Annual Report

  • Page 93
    ...) Financial Report 4. DIVIDENDS Telstra Entity Year ended 30 June 2014 2013 $m $m Dividends paid Previous year final dividend paid...Interim dividend paid...Total dividends paid ...Dividends paid per ordinary share Previous year final dividend paid...Interim dividend paid...Total dividends paid...

  • Page 94
    ...business and government customers in Australia and globally • product management for advanced technology solutions, including data and Internet Protocol (IP) networks, and NAS such as managed network, unified communications, cloud, industry solutions and integrated services • technology delivery...

  • Page 95
    ... cable network • domestic promotion and advertising expenses for the Telstra Entity are recorded centrally in the TR head office function • call centre costs associated with the GES segment are included in the TR segment. Telstra Corporation Limited and controlled entities Telstra Annual Report...

  • Page 96
    ... tables detail our segment results based on our reporting structure as at 30 June 2014: Telstra Group Year ended 30 June 2014 Revenue from external customers (iii)(v)...Other income...Total income ...Labour expenses...Goods and services purchased (v)...Other expenses ...Share of equity accounted...

  • Page 97
    ..., other than our Australian operations, forms a significant part of our operations. (viii) The carrying amount of our segment non current assets excludes derivative assets, defined benefit assets and deferred tax assets. Telstra Corporation Limited and controlled entities Telstra Annual Report 95

  • Page 98
    ... products and services Fixed...Mobile ...Data and IP ...Network applications and services ...Media ...CSL Group...China digital media...Global connectivity and NAS...TelstraClear ...Other sales revenue (ix) ...Other revenue (x) ...6 Other income...6 Sensis Group ...12 Total income (excluding finance...

  • Page 99
    ...) Financial Report 6. INCOME Telstra Group Year ended 30 June Restated 2014 2013 $m $m Note Continuing operations Sales revenue Rendering of services ...Sale of goods ...Rent of network facilities and access ...Construction contracts ...Advertising...Other revenue (excluding finance income...

  • Page 100
    NOTES TO THE FINANCIAL STATEMENTS (Continued) 7. EXPENSES Telstra Group Year ended 30 June Restated 2014 2013 $m $m Note Continuing operations Labour Included in our labour expenses are the following: Employee redundancy ...Share-based payments...Defined benefit plan expense ...24 Cost of goods ...

  • Page 101
    ...and other intangible assets. Refer to note 14 for further details. (b) During the financial year 2013, we recognised an impairment loss of $28 million relating to the impairment of TelstraClear net assets. This was due to the operating results of TelstraClear increasing the net assets at the date of...

  • Page 102
    ... independence guidelines clearly identify prohibited services. All additional approved EY engagements are reported to the Audit and Risk Committee at the next meeting. 7.556 7.796 1.162 0.111 1.273 1.374 0.454 1.828 Telstra Corporation Limited and controlled entities 100 Telstra Annual Report

  • Page 103
    ...) Financial Report 9. INCOME TAXES Telstra Group As at 30 June Restated 2014 2013 $m $m Major components of income tax expense Current tax expense...Deferred tax resulting from the origination and reversal of temporary differences ...Under provision of tax in prior years...Notional income tax...

  • Page 104
    ...38 million net expense, 2013: $2 million net benefit). (b) Our net deferred tax liability on our defined benefit asset for the Telstra Group is $15 million (2013: $11 million deferred tax asset). (c) When the underlying transactions to which our deferred tax relates are recognised directly in other...

  • Page 105
    ... due 61 - 90 days ...Past due 91 - 120 days ...Past 120 days ...2,297 631 135 62 49 93 3,267 (25) (12) (8) (12) (10) (53) (120) 2013 Gross Allowance $m $m 2,817 598 176 72 49 124 3,836 (13) (32) (16) (16) (14) (89) (180) Telstra Corporation Limited and controlled entities Telstra Annual Report 103

  • Page 106
    ... for communication assets dedicated to solutions management and outsourcing services that we provide to our customers. The average term of finance leases entered into is between 2 and 5 years (2013: 2 and 5 years). Telstra Corporation Limited and controlled entities 104 Telstra Annual Report

  • Page 107
    ... (continued) Telstra Group As at 30 June 2014 2013 $m $m Amounts receivable under finance leases Within 1 year...Within 1 to 5 years...After 5 years ...Total minimum lease receivables ...Less unearned finance income...Present value of minimum lease receivables...Included in the financial statements...

  • Page 108
    ... goods recorded at net realisable value ... 29 29 27 27 (a) Construction contract disclosures are shown as follows: Contract costs incurred and recognised profits ...Progress billings ... 589 (517) 72 592 (512) 80 Telstra Corporation Limited and controlled entities 106 Telstra Annual Report

  • Page 109
    ...months (2013: 12 months) of consolidated results to the date of disposal and a $24 million (2013: nil) share of net profit from our 30 per cent investment in the new holding company of the Sensis Group. Financial information related to the discontinued operation is set out below. Financial year 2014...

  • Page 110
    ... assets and liabilities of the disposal group the carrying value of the Sensis Group goodwill was impaired by $150 million and recognised in the loss for the year from the discontinued operation. Telstra Entity Year ended 2014 2013 $m $m Profit/(loss) attributable to equity holders of Telstra Entity...

  • Page 111
    ... FOR SALE AND DISCONTINUED OPERATION (CONTINUED) Sequel Media disposal group (continued) Sequel Media Group As at 30 June 2014 2013 $m $m Current assets Trade and other receivables...Total current assets ...Non current assets Property, plant and equipment...Intangible assets ...Deferred tax assets...

  • Page 112
    ...13. PROPERTY, PLANT AND EQUIPMENT Telstra Group As at 30 June 2014 2013 $m $m Land and site improvements At cost ...Buildings (including leasehold improvements) At cost ...Accumulated depreciation and impairment... 51 52 1,209 (606) 603 1,166 (586) 580 Communication assets At cost ...Accumulated...

  • Page 113
    ... to qualifying assets. (d) $40 million is the net result of refinancing a property under a finance lease owned by Telstra Europe Limited, during financial year 2013. Refer to note 22 for further details. Work in progress As at 30 June 2014, the Telstra Group has property, plant and equipment under...

  • Page 114
    ... Deferred expenditure...Accumulated amortisation and impairment ...Total intangible assets At cost ...Accumulated amortisation and impairment ... 1,667 (824) 843 12,659 (6,277) 6,382 1,450 (595) 855 14,171 (5,969) 8,202 Telstra Corporation Limited and controlled entities 112 Telstra Annual Report

  • Page 115
    ... operation (h) - amortisation expense from continuing operations - amortisation expense from discontinued operation - net foreign currency exchange differences ...- transfers to non current assets held for sale (g) ...Written down value at 30 June 2014 ... Financial Report Telstra Annual Report...

  • Page 116
    ... 2013 and subsequent disposal on 28 February 2014, we recognised an impairment charge of $150 million against goodwill for the Sensis Group and Location Navigation CGUs. Refer to notes 12 and 21 for further details. Telstra Corporation Limited and controlled entities 114 Telstra Annual Report

  • Page 117
    ...are non-interest bearing liabilities. We generally process trade creditor payments once they have reached 30 days for electronic funds transfer payments, or 30 days from the end of the month of invoice for other payments. Telstra Corporation Limited and controlled entities Telstra Annual Report 115

  • Page 118
    ...12 months ...Employee benefits are measured at their present value. Refer to note 2.14 for further details. The following assumptions were adopted in measuring this amount. Telstra Group As at 30 June 2014 2013 Weighted average projected increase in salaries, wages and associated on-costs...Discount...

  • Page 119
    ...STATEMENTS (Continued) Financial Report 16. PROVISIONS (CONTINUED) (b) Movement in provisions, other than employee benefits Telstra Group Year ended 30 June 2014 2013 $m $m Workers' compensation (i) Opening balance ...- additional provisions...- amount used...- unwinding of discount on liabilities...

  • Page 120
    ... amount of dividends paid to shareholders, return capital to shareholders or issue new shares. During financial year 2014, we paid dividends of $3,545 million (2013: $3,480 million). Refer to note 4 for further details. Short term debt...Long term debt (including current portion)...Total debt ...Net...

  • Page 121
    ... 2020, and are issued to wholesale investors. Domestic borrowings as at 30 June 2014 total $2,560 million, with various maturity dates up until the year 2020. Refer to Table E for details on debt issuance and maturities. Table B Telstra Group As at 30 June 2014 2013 $m $m 190 9,533 1,210 361 494...

  • Page 122
    ... movements attributable to the hedged risk. (iii) Investments in unlisted securities are measured at historical cost. Fair value for these securities cannot be reliably measured. Refer to section (g) for further details. Telstra Corporation Limited and controlled entities 120 Telstra Annual Report

  • Page 123
    ... amounts. The carrying amounts reflect a part of our borrowing portfolio at fair value, with the remaining part at amortised cost, whereas the face values represent the undiscounted contractual liability at maturity date. Telstra Corporation Limited and controlled entities Telstra Annual Report 121

  • Page 124
    .... Table E Telstra Group Year ended 30 June 2014 2013 $m $m During the year we issued a domestic public bond with proceeds of $498 million (face value $500 million), maturing on 13 November 2018. Our unsecured promissory notes are used principally to support working capital and short term liquidity...

  • Page 125
    ... Financial Report 17. CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS (CONTINUED) (e) Interest and yields The net interest on borrowings is shown in Table F below. Where applicable, finance costs are assigned to categories on the basis of the hedged item. Table F Telstra Group As at 30 June 2014 2013...

  • Page 126
    ... example property, plant and equipment) the gain or loss in the cash flow hedging reserve will be transferred and included in the measurement of the initial cost of the asset at the date on which the asset is recognised. Telstra Corporation Limited and controlled entities 124 Telstra Annual Report

  • Page 127
    ... life of the transaction. Telstra Group As at 30 June 2014 Level 1 Level 2 Level 3 $m $m $m Total $m (g) Fair value hierarchy We use various methods to estimate the fair value of our financial instruments: • Level 1: the fair value is calculated using quoted prices (unadjusted) in active markets...

  • Page 128
    ... securities Box Inc. Nexmo Inc. Matrixx Software Inc. Telesign Holdings Inc. Docusign Inc. As at 30 June 2014, all of our available-for-sale investments totalled $127 million (2013: $38 million). These are securities with no quoted market price in an active market and for which the fair value...

  • Page 129
    ... contractual provisions, in the event of insolvency all derivatives with a positive or negative fair value that exist with the respective counterparty are offset against each other, leaving a net receivable or liability. Telstra Corporation Limited and controlled entities Telstra Annual Report 127

  • Page 130
    ... business activities. Section (a) of this note sets out the key financial risk factors that arise from our activities, including our policies for managing these risks. Sections (b) and (c) provide details of our hedging strategies and hedge relationships that are used for financial risk management...

  • Page 131
    ... majority of our instruments in Table A represent Australian dollar interest positions. Principal/notional amounts shown are net of discounts and therefore differ from the face value disclosed in note 17 (Tables C and D). Telstra Corporation Limited and controlled entities Telstra Annual Report 129

  • Page 132
    ...277 451 3 (9,574) 6.13 12.00 2.86 214 451 7 (12,466) 7.72 12.00 3.30 (#) In the prior year we had cross currency swaps in place to hedge our offshore investment in the CSL Group which was disposed of during the year. Telstra Corporation Limited and controlled entities 130 Telstra Annual Report

  • Page 133
    ... in interest rates based on the net debt balances as at reporting date • the effect on interest expense on our floating rate borrowings from a 10 per cent movement in interest rates at each reset date during the year. Telstra Corporation Limited and controlled entities Telstra Annual Report 131

  • Page 134
    ...receipts and payments settled in foreign currencies or with prices dependent on foreign currencies • net investments in foreign operations. We are exposed to foreign exchange risk from various currency exposures, including Euro United States dollar British pound sterling New Zealand dollar Swiss...

  • Page 135
    ...risk associated with trade and other liability and asset balances using forward foreign currency contracts. Refer to section (b) "Hedging strategies" and section (c) "Hedge relationships" in this note for further information. Telstra Corporation Limited and controlled entities Telstra Annual Report...

  • Page 136
    ... of net investments in foreign controlled entities were in place and accordingly the net gain or loss in the sensitivity analysis represents the impact relating to unhedged net assets of our foreign controlled entities. Telstra Corporation Limited and controlled entities 134 Telstra Annual Report

  • Page 137
    ...-for-sale financial assets, finance lease receivables and derivative financial 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 deal...

  • Page 138
    ..., availablefor-sale financial assets and other interest and non-interest bearing financial assets. Liquidity risk associated with these financial instruments is represented by the face values as shown in note 17, Table C. Telstra Corporation Limited and controlled entities 136 Telstra Annual Report

  • Page 139
    ...Liquidity risk (continued) Table E NOTES TO THE FINANCIAL STATEMENTS As at 30 June 2013 Contractual maturity (nominal cash flows) Less than 1 to 2 2 to 5 Over 5 1 year years years years Total $m $m $m $m $m Telstra Corporation Limited and controlled entities Carrying amount $m Telstra Group As...

  • Page 140
    ...met hedge effectiveness requirements for hedge accounting purposes at the reporting date. Telstra Corporation Limited and controlled entities (b) Hedging strategies We hold a number of different financial instruments to hedge risks relating to underlying transactions. Our major exposure to interest...

  • Page 141
    ...flow hedges Cash flow hedges are predominantly used to hedge exposures relating to our borrowings and our ongoing business activities where we have highly probable purchase or settlement commitments in foreign currencies. Telstra Corporation Limited and controlled entities Telstra Annual Report 139

  • Page 142
    ... in Australian dollars based on the applicable exchange rate as at 30 June and represent the identified foreign currency exposures at reporting date in relation to our cash flow hedges. Table G Telstra Group Nominal cash outflows As at 30 June 2014 2013 $m $m (c) Hedge relationships The following...

  • Page 143
    18. FINANCIAL RISK MANAGEMENT (CONTINUED) (Continued) (c) Hedge relationships (continued) Telstra Group - 30 June 2014 Table H Face value Final currency and interest positions Notional/face value NOTES TO THE FINANCIAL STATEMENTS Telstra Corporation Limited and controlled entities Pre hedge...

  • Page 144
    18. FINANCIAL RISK MANAGEMENT (CONTINUED) (Continued) (c) Hedge relationships (continued) Telstra Group - 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS 142 Telstra Annual Report Table I Face value Pre hedge underlying exposure Local currency $m (Pay)/receive float $m Local currency $m $m $m...

  • Page 145
    ...Local currency 2014 2013 $m $m Forward contracts hedging interest bearing debt Promissory notes United States dollars - contractual maturity 03 months (2013: nil) ...New Zealand dollars - contractual maturity nil (2013: 0-3 months) ...Loans to and from wholly owned controlled entities British pounds...

  • Page 146
    NOTES TO THE FINANCIAL STATEMENTS (Continued) 19. SHARE CAPITAL Telstra Group As at 30 June 2014 2013 $m $m Contributed equity...Share loan to employees ...Shares held by employee share plans...Net services received under employee share plans ... 5,793 (17) (107) 50 5,719 5,793 (20) (129) 67 5,...

  • Page 147
    ... Foxtel Partnership ...Share-based payments...Defined benefit plan expense ...Consideration in kind...Net gain on disposal of property, plant and equipment ...Net gain on disposal of intangibles...Net gain on de-recognition of finance leases ...22 Net (gain)/loss on disposal of controlled entities...

  • Page 148
    ... shares in controlled entities is detailed below: Total acquisitions Year ended 30 June 2014 2014 $m $m 166 10 176 (5) (10) 4 165 Fair Value Carrying Value Assets/(liabilities) at acquisition date Cash and cash equivalents ...Trade and other receivables...Property, plant and equipment...Intangible...

  • Page 149
    ... in Octave Investments Holdings Limited for a total consideration of $5 million, including $1 million of cash disposed, in exchange for selling the net assets of the five variable interest entities controlled by Sharp Point Group Limited. Refer to note 25 for further details. Prior year iVision...

  • Page 150
    ... On 31 October 2012, our controlled entity Telstra New Zealand Holdings Limited sold its 100 per cent shareholding in TelstraClear Limited and its controlled entity (TelstraClear). The effect of the disposal is detailed below: TelstraClear Year ended 30 June 2013 $m Consideration on disposal...

  • Page 151
    ...). Refer to note 20 for further details. (g) The Telstra Enterprise & Services Group includes goodwill from past acquisitions integrated into our business. On 22 August 2013, we acquired a100 per cent shareholding in NSC Group Pty Ltd and its controlled entities (NSC Group) which is also included in...

  • Page 152
    ... assets have been allocated: Discount rate (h) As at 30 June 2014 2013 % % CSL New World Group...Telstra UK Group ...Sensis Group ...Location Navigation...1300 Australia Group...Autohome (j) ...Sequel Media ...O2 Networks Group...DCA Health Group ...Fred IT Group ...Telstra Enterprise & Services...

  • Page 153
    ... Telstra Group As at 30 June 2014 2013 $m $m Capital expenditure commitments Total capital expenditure commitments contracted for at balance date but not recorded in the financial statements: Property, plant and equipment commitments (a) ...Intangible assets commitments (b) ...Operating lease...

  • Page 154
    ... processing equipment and other related equipment as part of the solutions management and outsourcing services that we provide to our customers. Refer to note 10 for further details on these finance subleases. During financial year 2013, we acquired the property head leases held by Telstra Limited...

  • Page 155
    ... appear in note 25. Each of these companies (except Telstra Finance Limited) guarantees the payment in full of the debts of the other named companies in the event of their winding up. Refer to note 25 for further details. Telstra Corporation Limited and controlled entities Telstra Annual Report 153

  • Page 156
    ... The fair value of the defined benefit plan assets and the present value of the defined benefit obligations are determined by our actuaries. The details of the defined benefit divisions are set out in the following pages. Telstra Corporation Limited and controlled entities 154 Telstra Annual Report

  • Page 157
    ... of changes in fair value of defined benefit plan assets Telstra Group As at 30 June Restated 2014 2013 $m $m Fair value of defined benefit plan assets at beginning of year ...Employer contributions...Member contributions...Benefits paid (including contributions tax) (i) ...Plan expenses after tax...

  • Page 158
    ... funded defined benefit obligation Telstra Group As at 30 June Restated 2014 2013 $m $m Present value of defined benefit obligation at beginning of year ...Current service cost...Interest cost ...Member contributions...Benefits paid (i) ...Actuarial loss/(gain) due to change in financial assumptions...

  • Page 159
    ... active markets. Telstra Super's investments in debt and equity instruments include bonds issued by, and shares in, Telstra Corporation Limited. Refer to note 29 for further details. (f) Principal actuarial assumptions We used the following major annual assumptions to determine our defined benefit...

  • Page 160
    ... 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 leave the fund voluntarily on the valuation date. The VBI assesses the short term financial position of the plan. On the other...

  • Page 161
    ... participate in defined contribution schemes that receive employer and employee contributions based on a percentage of the employees' salaries. We made contributions to these schemes of $31 million (2013: $24 million). Telstra Corporation Limited and controlled entities Telstra Annual Report 159

  • Page 162
    ... June 2014 2013 % % Name of entity Parent entity Telstra Corporation Limited (a) ...Controlled entities Chief Entertainment Pty Ltd ...Muru-D Pty Ltd (f) ...Research Resources Pty Ltd ...Telstra 3G Spectrum Holdings Pty Ltd ...Telstra Business Systems Pty Ltd (b) ...Telstra Communications Limited...

  • Page 163
    ... STATEMENTS (Continued) Financial Report 25. INVESTMENTS IN CONTROLLED ENTITIES (CONTINUED) Telstra Entity's recorded amount of investment (#) As at 30 June 2014 2013 $m $m 27 41 41 7,474 7,474 - Name of entity Country of incorporation Controlled entities (continued) Fred IT Group Pty Ltd...

  • Page 164
    ...As at 30 June 2014 2013 $m $m - Name of entity Country of incorporation Controlled entities (continued) • Telstra Asia Limited (c) ...• Telstra SE Asia Holdings Limited (c) ...• PT Reach Network Services Indonesia ...• Telstra Asia Regional Holdings Limited (c) ...• Telstra Malaysia Sdn...

  • Page 165
    ... Philippines Inc...• Telstra International PNG Limited (c) ...• Telstra Japan K. K...• Telstra Network Services NZ Limited ...• Telstra New Zealand Holdings Limited (b)...• Telstra NZ Limited ...• Telstra Services Korea Limited...• Telstra Singapore Pte. Ltd...• Telstra Technology...

  • Page 166
    ...their full year results in financial year 2013. Sensis Pty Ltd and its controlled entities (Sensis Group) is disclosed as a discontinued operation. Refer to note 12 for further details on the disposal of the Sensis Group. Telstra Corporation Limited and controlled entities 164 Telstra Annual Report

  • Page 167
    ... accounted for using the equity method ...Investments in controlled entities...Investments - other ...Property, plant and equipment...Intangible assets ...Deferred tax assets...Derivative financial assets...Defined benefit asset ...Total non current assets...Total assets ...Current liabilities Trade...

  • Page 168
    ... profits from removal of entities from the closed group...Total comprehensive income recognised in retained profits ...Dividends ...Retained profits at the end of the financial year available to the closed group ... Telstra Corporation Limited and controlled entities 166 Telstra Annual Report

  • Page 169
    ... companies have reporting dates that differ from our reporting date of 30 June for the financial year 2014: 31 December Autohome Inc. and its controlled entities Sequel Media Inc. and its controlled entities Telstra Asia Holdings Limited and its controlled entities Telstra Asia Limited Telstra...

  • Page 170
    ... 2013, Telstra Octave Holdings Limited acquired the remaining 33 per cent interest in Octave Investments Holdings Limited in exchange for selling the net assets of the five variable interest entities controlled by Sharp Point Group Limited. As a result our shareholding in Octave Investments Holding...

  • Page 171
    ... and associated entities are listed below: Name of Entity Principal activities Ownership interest As at 30 June 2014 2013 % % Joint ventures Foxtel Partnership (f)(g) Foxtel Television Partnership (f)(g) Customer Services Pty Ltd (f)(g) Foxtel Management Pty Ltd (f)(g) Foxtel Cable Television...

  • Page 172
    ...we consolidate on a prospective basis the TFL results previously accounted for as an associate, as we meet the criteria for control under AASB 10: "Consolidated Financial Statements". Refer to note 25 for further details. Telstra Corporation Limited and controlled entities 170 Telstra Annual Report

  • Page 173
    ... to our MSG, Foxtel has other commitments, including obligations for satellite transponder costs and digital set top box units. 5 2 (2) 5 (1) 4 5 2 3 5 5 10 13 158 (1) (2) 168 25 (1) 192 10 5 15 (1) (1) 13 - 4 1 - - Telstra Corporation Limited and controlled entities Telstra Annual Report 171

  • Page 174
    ... Group Year ended 30 June Joint ventures Associated entities 2014 2013 2014 2013 $m $m $m $m Profit/(loss) for the year ...Other comprehensive income ...Total comprehensive income ...(2) 1 (1) 2 (8) (6) 36 1 37 7 (5) 2 Telstra Corporation Limited and controlled entities 172 Telstra Annual Report

  • Page 175
    ...and/or reductions in the equity accounted carrying amount, is shown below: Telstra Group Year ended 30 June Period Cumulative Period Cumulative 2014 2014 2013 2013 $m $m $m $m Joint ventures Foxtel ...Reach Ltd...Associated entities Australia-Japan Cable Holdings Limited... 31 - 197 558 4 (2) 166...

  • Page 176
    ... in financial year 2000. Under the trust, we operate a number of different equity plans, including: • short term incentive plans • long term incentive plans • other equity plans. The trustee for the trust is Telstra Growthshare Pty Ltd. This company is 100 per cent owned by Telstra. Funding is...

  • Page 177
    ... rights Free-Cashflow Return-on-Investment (FC ROI) performance rights • Employee Share Plan (ESP) restricted shares • Employee Share Rights Plan (ESRP) performance rights • GE Telstra Wholesale restricted shares. Telstra Corporation Limited and controlled entities Telstra Annual Report 175

  • Page 178
    ... shares Telstra Growthshare Trust (continued) (b) (i) Long term incentive (LTI) plans (continued) Outstanding equity based instruments (continued) In relation to these executive LTI plans, the Board may, in its discretion, reset the hurdles governing the financial year 2014, 2013 and 2012 equity...

  • Page 179
    ...subject to any performance conditions). (iii) Performance hurdles Performance rights Details of the relevant performance hurdles in relation to performance rights, are set out below: Relative Total Shareholder Return (RTSR) performance rights For financial years 2014, 2013, 2012, 2011 and 2010 RTSR...

  • Page 180
    ...25 per cent of the options will lapse. As part of the financial year 2014, 2013 and 2012 ESP, certain eligible employees were provided with restricted shares. There are no performance hurdles for these restricted shares. Telstra Corporation Limited and controlled entities 178 Telstra Annual Report

  • Page 181
    ... THE FINANCIAL STATEMENTS (Continued) Financial Report 27. EMPLOYEE SHARE PLANS (CONTINUED) Telstra Growthshare Trust (continued) (b) (iv) Long term incentive (LTI) plans (continued) Summary of movements and other information Number of equity instruments Outstanding at 30 June 2013 Growthshare...

  • Page 182
    ... TO THE FINANCIAL STATEMENTS (Continued) 27. EMPLOYEE SHARE PLANS (CONTINUED) Telstra Growthshare Trust (continued) (b) (iv) Long term incentive (LTI) plans (continued) Summary of movements and other information (continued) Number of equity instruments Outstanding at 30 June 2012 Growthshare 2006...

  • Page 183
    ...and 2011 allocations of performance rights, and $5.11 for financial years 2012, 2013 and 2014 allocations of ESP restricted shares respectively. These share prices were based on the closing market price on the exercise dates. Telstra Corporation Limited and controlled entities Telstra Annual Report...

  • Page 184
    ...Oct 2013 Share price ...Risk-free rate ...Dividend yield ...Expected stock volatility ...Expected life...Expected rate of achievement of TSR performance hurdles...(*) The date on which the instruments become exercisable. For financial year 2014 LTI FCF ROI and RTSR performance rights, the fair value...

  • Page 185
    ... during financial year 2014, therefore the weighted average fair value of fully paid shares granted to participants as at 30 June 2014 was nil (2013: $4.03) and the total fair value of shares granted was nil (2013: $632,808). Telstra Corporation Limited and controlled entities Telstra Annual Report...

  • Page 186
    ... to these instruments are transferred to the participants at the completion of the restriction period (unless an Ownshare participant directs the trustee to sell the Ownshare instruments on the participant's behalf). Telstra Corporation Limited and controlled entities 184 Telstra Annual Report

  • Page 187
    ... plans are not restricted to senior executives. The plans are granted on an ad hoc basis and the participants receive Telstra shares subject to satisfaction of certain conditions. As part of his service agreement negotiated upon appointment, the Chief Financial Officer (CFO) and GE, International...

  • Page 188
    ... at 30 June 2014 ...(*) The fair value of these shares is based on the market value of Telstra shares at reporting date and exercise date. (#) The amount exercised relates to the shares released from trust as a result of the interest free loan to employees being fully repaid during the year. (^) The...

  • Page 189
    ... the Chief Executive Officer's (CEO's) senior leadership team, including the CEO. KMP aggregate compensation During financial years 2014 and 2013, the aggregate compensation provided to our KMP was as follows: Telstra Group As at 30 June 2014 2013 $ $ Short term employee benefits ...Post employment...

  • Page 190
    ... that store the hybrid fibre coaxial (HFC) cable network • the Telstra Entity paid for international connectivity and management services to Telstra International Limited amounting to $249 million (2013: $221 million). Telstra Corporation Limited and controlled entities 188 Telstra Annual Report

  • Page 191
    ... Report 29. RELATED PARTY DISCLOSURES (CONTINUED) Transactions involving our controlled entities (continued) (b) During financial year 2014, the Telstra Entity recorded dividend revenue, including mainly: • $150 million (2013: $114 million) from Telstra Media Pty Limited • $64 million (2013...

  • Page 192
    ...the loan amount in the medium term. In April 2012, Telstra Corporation Limited provided a loan to Foxtel Management Pty Ltd to fund the acquisition of shares in AUSTAR. The loan is interest bearing and it has a minimum term of just over 10 years and a maximum of 15 years. Commitments to and from our...

  • Page 193
    ..., plant and equipment commitments Total property, plant and equipment expenditure commitments contracted for at balance date but not recorded in the financial statements amounted to $847 million (2013: $1,222 million). Telstra Corporation Limited and controlled entities Telstra Annual Report 191

  • Page 194
    ... under these performance guarantees has been indemnified for all guarantees that were in place at the time of sale. Therefore, the overall net exposure to any loss associated with a claim has effectively been offset. Telstra Corporation Limited and controlled entities 192 Telstra Annual Report

  • Page 195
    ...future years: • our operations • the results of those operations or • the state of our affairs other than the following: Final dividend On 14 August 2014, the Directors of Telstra Corporation Limited resolved to pay a fully franked final dividend of 15 cents per ordinary share. The record date...

  • Page 196
    ... the Deed of Cross Guarantee described in note 25(a). For and on behalf of the board Catherine B Livingstone AO Chairman David I Thodey Chief Executive Officer and Executive Director 14 August 2014 Sydney, Australia Telstra Corporation Limited and controlled entities 194 Telstra Annual Report

  • Page 197
    ... Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent Auditor's report to the Members of Telstra Corporation Limited Report on the Financial Report We have audited the accompanying financial report of Telstra Corporation Limited...

  • Page 198
    ...,074,357 % 2.98% 9.79% 7.03% 19.53% 60.67% 100.00% Total The number of shareholders holding less than a marketable parcel of shares was 15,014 holding 659,660 shares (based on the closing market price on 14 July 2014). Telstra Corporation Limited and controlled entities 196 Telstra Annual Report

  • Page 199
    ... COM AU NOMINEES PTY LIMITED 13 QUESTOR FINANCIAL SERVICES LIMITED 14 TELSTRA GROWTHSHARE PTY LTD 15 NAVIGATOR AUSTRALIA LTD 16 NULIS NOMINEES (AUSTRALIA) LIMITED 17 SHARE DIRECT NOMINEES PTY LTD 18 NETWORK INVESTMENT HOLDINGS PTY LTD 19 EQUITAS NOMINEES PTY LTD 20 MILTON CORPORATION LIMITED Total...

  • Page 200
    ... partnerships. Sensis Group has been included from 1 July 2013 until 28 February 2014. Gender equality Women in executive management (%) (iii) Volunteering during Telstra time(iv) Total (days) Payroll giving Participation rate (%) Social and community investment(iv) Value ($m) Everyone Connected...

  • Page 201
    ...for the equity share on the profit of our 30% interests in Project Sunshine I Pty Ltd as an associated entity, the new holding company of the Sensis Group from the reported Telstra Group results. Adjustment for the sale proceeds from the divestment of 70% of our Sensis directories business from the...

  • Page 202
    ... data, video and voice from multiple locations in one supported product. Wi-Fi hotspot - A device that other devices can connect to wirelessly in order to access the Internet. (Wi-Fi refers to a set of wireless standards commonly used by devices for short-distance wireless communication). Financial...

  • Page 203
    ...) Controlled Entities (20, 27, 169) Contact Details (inside back cover) Corporate Governance (IFC, 27, 33, 34, 35-38) Credit Rating (135) CSL New World Mobility Limited (5, 11, 15, 16, 18, 20, 21, 25, 51, 92, 147, 149, 150, 154) Customer Service (4, 5, 9, 10, 12, 13, 16, 17) D Director's Report (IFC...

  • Page 204
    NOTES 202 Telstra Annual Report

  • Page 205
    NOTES Telstra Annual Report 203

  • Page 206
    ... options: Holdings - transaction history, holding balance and value and latest closing share price. Payment and Tax - dividend payment history, payment instructions and TFN details. You can update your bank details here. Communication - become an e-Shareholder and update postal/email addresses and...

  • Page 207
    ....nz Link Market Services Limited PO Box 91976 Auckland 1142 New Zealand Indicative Financial Calendar (i) Final dividend paid Annual General Meeting Half-Year Results announcement Ex-dividend share trading commences Record date for interim dividend Interim dividend paid Annual Results announcement...

  • Page 208
    telstra.com.au/investor