TPG Telecom Limited (TPM) 2013年年度報告「ASX」.pdf

《TPG Telecom Limited (TPM) 2013年年度報告「ASX」.pdf》由會員分享，可在線閱讀，更多相關《TPG Telecom Limited (TPM) 2013年年度報告「ASX」.pdf（102頁珍藏版）》請在三個皮匠報告上搜索。

1、ANNUAL REPORT2013 TPG Telecom Limited and its controlled entities ABN 46 093 058 069 Annual Report Year ended 31 July 2013 2 TPG Telecom Limited and its controlled entities Annual report For the year ended 31 July 2013 Contents Page Chairmans letter 3 Directors report 4 Consolidated income statement

2、 34 Consolidated statement of comprehensive income 35 Consolidated statement of financial position 36 Consolidated statement of changes in equity 37 Consolidated statement of cash flows 38 Notes to the consolidated financial statements 39 Directors declaration 95 Independent auditors report 96 Lead

3、auditors independence declaration 98 ASX additional information 99 3 TPG Telecom Limited and its controlled entities Chairmans letter For the year ended 31 July 2013 Dear Shareholders I am pleased to present to you,on behalf of the Board of Directors,the TPG Telecom Limited Annual Report for the fin

4、ancial year ended 31 July 2013(“FY13”).It has been another successful year for the Group with continued strong organic growth resulting in further increases in revenue,profits,and returns for shareholders.A detailed review of the Groups operating and financial performance for the year is provided in

5、 the Operating and Financial Review section of the Directors Report,starting on page 6 of this Annual Report.Set out below are some of the key financial highlights from the year.FY13$m FY12$m Movement Revenue 724.5 663.1+9%EBITDA 293.1 261.4+12%NPAT 149.2 91.0+64%EPS(cents/share)18.8 11.5+63%Dividen

6、ds(cents/share)7.5 5.5+36%Free cashflow 174.5 150.0+16%Key to the achievement of these excellent results is the hard work and commitment of all of the Groups employees.To them I would like to extend thanks on behalf of the Board and I look forward to their ongoing contribution to the Groups success.

7、On behalf of the Board,I also thank all our shareholders for their continued support of the Company.Yours faithfully David Teoh Chairman 4 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 Contents of directors report Page 1.Directors 5 2.Company secret

8、ary 6 3.Directors meetings 6 4.Operating and financial review 6 5.Corporate governance statement 16 6.Remuneration report-audited 22 7.Principal activities 30 8.Dividends 30 9.Events subsequent to reporting date 30 10.Likely developments 30 11.Directors interests 31 12.Share options and rights 31 13

9、.Indemnification and insurance of officers and auditors 32 14.Non-audit services 32 15.Lead auditors independence declaration 33 16.Rounding off 33 The directors present their report together with the financial report of the Group,being TPG Telecom Limited(the Company)and its controlled entities,for

10、 the financial year ended 31 July 2013,and the auditors report thereon.5 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 1.Directors Details of the directors of the Company who held office at any time during or since the end of the financial year are

11、as follows:Name,qualifications and independence status Age Experience,special responsibilities and other directorships David Teoh Executive Chairman Chief Executive Officer 58 David was the founder and Managing Director of the TPG group of companies.TPG Telecom Ltd(2008-current).Robert D Millner Non

12、-Executive Director F.A.I.C.D.62 TPG Telecom Ltd(2000-current),BKI Investment Company Ltd(2003-current),Apex Healthcare Berhad(2000-current),Australian Pharmaceutical Industries Ltd(2000-current),Milton Corporation Ltd(1998-current),Brickworks Ltd(1997-current),New Hope Corporation Ltd(1995-current)

13、,Washington H Soul Pattinson and Company Ltd(1984-current),Exco Resources Ltd(2012-2013),Northern Energy Corporation Ltd(2011),Souls Private Equity Ltd(2004-2012)and Choiseul Investments Ltd(1995-2010).Former Chairman of TPG Telecom Ltd,resigned position in 2008.Member of Audit&Risk and Remuneration

14、 Committees.Denis Ledbury Independent Non-Executive Director B.Bus.A.I.C.D.63 Denis was the Managing Director of TPG Telecom between 2000 and 2005,and was associated with the NBN group of companies for over 24 years(the last 14 as Chief Executive Officer).TPG Telecom Ltd(2000-current).Chairman of Au

15、dit&Risk and Remuneration Committees.Alan J Latimer Executive Director B.Com CA G.A.I.C.D 59 Prior to becoming an Executive Director of TPG Telecom,Alan was the Chief Financial Officer of the TPG group of companies.He has also previously worked with a number of large international IT and financial c

16、ompanies.TPG Telecom Ltd(2008-current).Joseph Pang Independent Non-Executive Director FCA 60 Joseph has worked in financial roles in the UK,Canada and Hong Kong prior to starting his own Management and Financial Consulting Service in Australia.TPG Telecom Ltd(2008-current).Member of Audit&Risk and R

17、emuneration Committees.Shane Teoh Non-Executive Director B.Com LLB 27 TPG Telecom Ltd(appointed 11 October 2012).Shane holds a Bachelor of Commerce and a Bachelor of Laws from the University of New South Wales.He is managing director of Total Forms Pty Ltd,a leading developer of accounting and taxat

18、ion software in Australia.6 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 2.Company secretary Mr Stephen Banfield was appointed Company Secretary on 24 October 2007.Stephen holds a BA(Hons)degree and is a member of the Institute of Chartered Account

19、ants in England and Wales.3.Directors meetings The number of Board and committee meetings held during the financial year and the number of meetings attended by each of the directors as a member of the Board or relevant committee was as follows:4.Operating and financial review 4.1 Operating result ov

20、erview The financial year ended 31 July 2013(“FY13”)was another year of strong organic growth for the TPG Telecom Limited group(“the Group”).The Group succeeded in increasing profits again this year through its continued focus on growing its consumer and corporate customer bases by delivering value

21、leading telecommunications services through its TPG and PIPE Networks brands.The Groups reported earnings before interest,tax,depreciation and amortisation(“EBITDA”)increased by 12%to$293.1m and reported net profit after tax(“NPAT”)grew 64%to$149.2m.It should be noted that the prior years NPAT resul

22、t was adversely affected by a$23.2m one-off tax expense which arose from a retrospective change in tax legislation,but even excluding the impact of this,the FY13 NPAT result still represents a 31%increase compared to FY12.Director Board Meetings Audit&Risk Committee Meetings Remuneration Committee M

23、eetings A B A B A B D Teoh 14 14-R Millner 14 14 2 2 3 3 D Ledbury 14 14 2 2 3 3 A Latimer 14 14-J Pang 14 14 2 2 3 3 S Teoh 11 11-A:Number of meetings attended.B:Number of meetings held while a member.7 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013

24、 4.Operating and financial review(continued)4.1 Operating result overview(continued)Earnings per share(“EPS”)also increased strongly by 63%to 18.8 cents per share(31%growth excluding the prior year one-off tax item).These strong earnings results were reflected in the Groups cashflow performance,with

25、$174.5m of free cashflow generated in the year after tax,interest and capital expenditure.In light of these FY13 results,the Board of Directors increased dividends to shareholders declared or paid in respect of FY13 to a total of 7.5 cents for the year(fully franked),a 36%increase over FY12.These FY

26、13 financial results and returns for shareholders are a continuation of the strong growth trend achieved by the Group over the last five years as shown in the charts below.In the charts FY12 NPAT and EPS are normalised to exclude the$23.2m one-off tax expense.0 100 200 300 FY09 FY10 FY11 FY12 FY13$m

27、 EBITDA 0 50 100 150 FY09 FY10 FY11 FY12 FY13$m NPAT*0.0 5.0 10.0 15.0 20.0 FY09 FY10 FY11 FY12 FY13 EPS*0.0 2.0 4.0 6.0 8.0 FY09 FY10 FY11 FY12 FY13 Dividends 8 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continue

28、d)4.2 Customer growth During FY13 the Group achieved continued organic growth of its broadband subscriber base,with a net increase of 76,000 subscribers compared to 47,000 in FY12.This growth comprised a net increase of 130,000 subscribers to the Groups home phone and broadband bundle plans,partiall

29、y offset by a reduction in standalone on-net(40,000)and off-net(14,000)subscribers.Since its launch in 2010,the Groups home phone and broadband bundle product has added over 350,000 customers.Complementing the growth in broadband,TPGs mobile phone subscriber base increased by 105,000 in FY13 compare

30、d to 54,000 growth in FY12.0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 Jul-10 Jul-11 Jul-12 Jul-13 Subscribers(000s)Broadband Subscribers On Net Bundle On Net Off Net 0 50 100 150 200 250 300 350 400 Jul-10 Jul-11 Jul-12 Jul-13 Subsrcibers(000s)Mobile Subscribers 9 TPG Telecom Limited a

31、nd its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.2 Customer growth(continued)As at 31 July 2013 the Group had 671,000 broadband subscribers and 360,000 mobile phone subscribers.In addition to this the Group had approximately 4,0

32、00 corporate,government,wholesale and small-medium enterprise customers.4.3 Network infrastructure update At the core of the Groups business is its extensive telecommunications network infrastructure which it continued to expand in the year with investment in the following main areas:(i)Adding more

33、capacity within the Groups 411 DSLAM exchanges to meet the demand for ADSL2+broadband services,including adding 12 new exchanges during the year;(ii)Increasing by 50 the number of exchanges directly connected to the Groups fibre network;(iii)Adding over 800 km to the Groups domestic fibre footprint

34、to meet demand for fibre services from corporate and SME customers as well as increasing on-net backhaul for all of the Groups voice and data traffic.The Groups total domestic fibre footprint is now over 3,800km;and(iv)Increasing by approximately 300 the number of buildings that are directly connect

35、ed to the Groups fibre network,with total on-net buildings now exceeding 1,600.This continued investment in infrastructure provides an important foundation for the growth of the Groups customer base and profits.During the year the Group also made a number of significant announcements in relation to

36、future developments of its network infrastructure,which are designed to ensure that the Group remains well positioned to continue to profitably service its growing customer base in the future.1.Spectrum The Group made a successful bid at the digital dividend auction in May 2013 for 20MHz of spectrum

37、 licences in the 2.5GHz band across the country.The acquisition of spectrum will complement the Groups fixed infrastructure,giving it opportunities to offer innovative,value-adding products to further enhance its existing product suite.The spectrum will only become available for use from October 201

38、4,with the$13.5m purchase price payable in September 2014.2.International fibre The Groups existing international fibre infrastructure includes its own submarine cable(“PPC-1”)linking Australia to Guam,as well as capacity on other cable networks linking Australia directly with New Zealand,USA,Japan,

39、Hong Kong,Singapore and Philippines.In August 2013 the Group issued a Letter of Intent to submarine cable group Hawaiki Cable Limited confirming its intention to acquire capacity on the Australia-US and Australia-NZ segments of the planned Hawaiki submarine cable system.This would provide a signific

40、ant addition to the capacity and diversity of the Groups international network which,once activated,should deliver cost savings to the Group.The expected capital expenditure in relation to this project is between US$10m and US$20m for each of the next three financial years commencing FY14,prior to t

41、he cables expected activation in FY16.10 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.3 Network infrastructure update(continued)3.Fibre to the building(FTTB)The Group is planning to increase the number o

42、f buildings directly connected to its fibre network in metro areas.With the evolution of new technologies now enabling speeds of up to 100 Mbps this will enable the Group to commence offering very high-speed broadband services to its customers at ADSL2+prices.4.4 Financial results review There follo

43、ws below a review of the key elements of the FY13 result:FY13$m%of revenue FY12$m%of revenue Revenue Consumer 480.3 66%412.7 62%Corporate 244.2 34%250.4 38%Total revenue 724.5 663.1 Telco costs Consumer(237.4)49%(215.5)52%Corporate(90.7)37%(91.6)37%Total telco costs(328.1)45%(307.1)46%Other income 3

44、.3-1.4-Employee expenses(60.1)8%(58.7)9%Other expenses(46.5)6%(37.4)6%EBITDA 293.1 40%261.4 39%Depreciation(49.9)7%(47.1)7%Amortisation(23.9)3%(34.0)5%Operating profit 219.3 30%180.4 27%Net financing costs(7.0)1%(17.1)3%Profit before tax 212.3 29%163.2 25%Income tax(63.1)-(72.3)-Profit after tax 149

45、.2 21%90.9 14%Earnings per share(cents)18.8 11.5 11 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.4 Financial results review(continued)Revenue a)Consumer Consumer revenue increased by$67.6m(16%)to$480.3m

46、in FY13.This increase was driven by an increase in subscribers on the Groups broadband,home phone and mobile phone plans.Broadband subscribers increased over the year by 76,000(13%)to 671,000(including more than 350,000 subscribers with a home phone service).Mobile phone subscribers increased by 105

47、,000(41%)to 360,000.Monthly ARPU(average revenue per user)for broadband customers increased in the year from$48.2 to$49.3 due to the increasing proportion of the customer base that is now on a plan that bundles broadband and home phone line rental.Mobile ARPU decreased from$18.8 to$17.6 as a result

48、of the increased take-up in the year of the Groups“super value plans”.(Note that ARPU is calculated using GST exclusive recurring charges only,i.e.it excludes one-off charges such as installation fees and equipment sales).b)Corporate Corporate(including government,wholesale and large SME)revenue dec

49、reased by$6.2m(2%)to$244.2m in FY13.However,included in FY13 corporate revenue is$10.5m arising from an IRU(Indefeasible Right of Use)contract which was recognised in revenue as a finance lease.This is$10.2m lower than the$20.7m IRU revenue that was accounted for in the same manner in FY12.The relev

50、ance of separately identifying these IRU amounts is because they are non-recurring in nature whereas the rest of corporate revenue generally comprises recurring charges to customers.This means that the corporate divisions recurring revenue actually grew in FY13 by$4.0m(2%).This growth,though small,h

51、as been achieved in an environment of falling prices,and also where telco industry consolidation is driving some significant reductions in wholesale revenue.Corporate sales have performed well in the year to grow recurring revenues in spite of market conditions,and pleasingly,the division has been a

52、ble to grow earnings at a faster pace than revenue due to improved margins,as explained under corporate telco costs below.Telco costs Telco costs comprise all of the direct operating costs incurred to deliver the Groups telecommunications services to customers,including amounts paid to other carrier

53、s,and the non-staff costs of operating and maintaining the Groups own network.a)Consumer Consumer telco costs reduced as a proportion of consumer revenue in FY13 from 52%to 49%.Within the costs for FY13,however,is a$10.0m one-off benefit arising primarily from credits that the Group received as a re

54、sult of regulatory decisions made by the ACCC during the year.The ACCC determined that the price Telstra had been charging industry participants,including TPG,for certain services was too high.These determinations provide benefits for the Groups ongoing cost structure as well but the amount of$10.0m

55、 is separately identified as it represents a refund in respect of previous financial years and has hence provided a one-off boost to the consumer divisions earnings in FY13.Excluding the$10.0m one-off benefit,telco costs in the consumer business have remained consistent as a proportion of revenue at

56、 52%.12 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.4 Financial results review(continued)b)Corporate Corporate telco costs in FY13 represented 37%of revenue,which was in line with FY12.However,excluding

57、 the IRU revenue,telco costs fell from 40%to 39%of recurring revenue.This margin improvement has been achieved in an environment of sharply reduced pricing in corporate business and reflects the benefits to the Group of its past and ongoing investment in network infrastructure.This has enabled highe

58、r operating margins to be generated due to the increasing proportion of customers traffic that is carried on the Groups owned infrastructure rather than on circuits leased from other carriers.Other income Other income,which grew from$1.4m to$3.3m in FY13,comprised dividend income from the Groups ASX

59、 listed investments and a gain from a small disposal of shares made during the year.Employee expenses Employee expenses grew in absolute terms in the year by$1.4m(2%)but reduced slightly as a proportion of revenue from 8.9%to 8.3%.The Groups total headcount at the end of the year was 1987.Other expe

60、nses Other expenses,which include all of the overheads incurred by the Group in running the business as well as marketing costs,grew in absolute terms in the year by$9.1m but stayed constant as a proportion of revenue at 6%.The prior year figure for other expenses,however,benefited from a one-off am

61、ount of$2.0m following the successful resolution of a commercial dispute.The increase in other expenses in FY13 excluding this is$7.1m.EBITDA Overall Group EBITDA grew by$31.7m(12%)to$293.1m in FY13.The impact of the reduction in IRU non-recurring revenue on corporate revenue and the non-recurring r

62、etrospective benefit received in the year from the Telstra credits described under consumer telco costs above broadly offset each other such that the 12%growth is a reasonable representation of underlying growth in the year.This underlying growth has been driven by strong consumer subscriber growth

63、and improved corporate revenue margins accompanied by continued cost discipline.Depreciation Depreciation expense increased by$2.8m in FY13 reflecting the Groups continued investment in network infrastructure.Amortisation Amortisation expense decreased by$10.1m in the year.This was due to the fact t

64、hat the customer bases acquired in previous years through the acquisitions of TPG Internet and PIPE Networks,which are represented as intangible assets in the Groups balance sheet,are amortised on a reducing balance basis.Net financing costs Net financing costs decreased by$10.1m as a result of the

65、significant reduction in the Groups borrowings.The Group repaid$107.0m of bank debt during FY13 and,as at 31 July 2013,it has repaid$192.0m since the beginning of FY12.13 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review

66、(continued)4.4 Financial results review(continued)Income tax The Groups effective income tax rate was 29.7%in FY13,down from 44.3%in FY12.The prior year tax expense was inflated by a$23.2m one-off expense that arose as a result of a retrospective change in tax legislation enacted in June 2012 that c

67、aused the Group to lose the right to claim tax deductions for its acquired customer base amortisation.Excluding the one-off expense,the effective tax rate for FY12 was 30.0%.Earnings per share(EPS)Reported EPS increased by 63%to 18.8 cents per share.Excluding the impact of the one-off tax expense th

68、at affected FY12(refer above),FY13 EPS still grew by 31%.Free cashflow FY13$m FY12$m Operating cashflow 318.0 277.2 Tax(79.2)(47.7)Interest(6.0)(14.9)Capital expenditure(58.3)(64.6)Free cashflow 174.5 150.0 The quality of the Groups earnings result is reflected in the strong operating cashflow gener

69、ated in the year.Operating cashflow of$318.0m in FY13 exceeded EBITDA by$24.9m,which is largely explained by the in-advance payments received from the Groups growing customer base.After tax,interest and capital expenditure,the Group generated free cashflow of$174.5m,$24.5m(16%)more than in FY12.Capi

70、tal expenditure Capital expenditure for FY13 of$58.3m was 10%lower than in FY12.The expenditure incurred reflects the Groups continued investment in its network infrastructure,predominantly adding more capacity to its DSLAM network and expanding its fibre network footprint in order to meet growing c

71、ustomer demand.Utilisation of cash FY13$m FY12$m Free cashflow 174.5 150.0 Utilisation of cash:Debt repayments 107.0 84.5 Investment in CDHL 10.0-Prior year investments-33.8 Dividends paid 49.6 26.0 Other(4.3)0.8 Increase in cash held 12.2 4.9 174.5 150.0 Debt repayments The Group made debt repaymen

72、ts of$107.0m during the year reducing its outstanding borrowings to$42.0m as at year-end.Since the Groups borrowings peaked in May 2010 at approximately$350m following the acquisition of PIPE Networks,the Group has repaid over$300m in just over three years.Investment in CDHL The Group also invested$

73、10.0m in the year to acquire(i)a 15%equity stake in data security software business Cocoon Data Holdings Limited(CDHL),and(ii)an exclusive licence to distribute certain CDHL products in Australia and New Zealand.CDHLs Covata Secure Objects technology can be used to protect data in transit and in sto

74、rage and is expected to enable the Group to add further value to its consumer and corporate product offerings.14 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.4 Financial results review(continued)Dividend

75、s Dividends paid in the year comprise the final FY12 dividend of 2.75 cents per share(“cps”)and the interim FY13 dividend of 3.50cps.Subsequent to the year-end,the Board of directors has declared a 4.0cps final dividend for FY13 taking the total dividends paid or declared in respect of FY13 to 7.5cp

76、s,a 36%increase over FY12.Balance sheet Below is a condensed version of the Groups balance sheet as at the end of FY13,summarised in a manner to draw attention to a few key points.Please refer to the full financial statements contained in this annual report for a comprehensive balance sheet.FY13$m F

77、Y12$m Cash(1)26.1 13.8 Investments(2)81.2 47.6 Other current assets 47.2 45.9 Total current assets(3)154.5 107.3 Property,Plant&Equipment 319.2 323.9 Intangible assets 502.2 523.2 Other non-current assets(4)22.9 6.5 Total non-current assets 844.3 853.6 Deferred income(3)58.8 44.4 Other current liabi

78、lities 136.0 132.5 Total current liabilities(3)194.8 176.9 Loans and borrowings(1)39.1 144.4 Other non-current liabilities 48.9 48.8 Total non-current liabilities 88.0 193.2 Net assets 716.0 590.8 Balance sheet notes 1.Net debt Loans and borrowings of$39.1m are shown in the balance sheet net of prep

79、aid borrowing costs.Gross bank borrowings at 31 July 2013 were$42m.Taking into account the$26.1m cash balance the Group had net debt at the end of FY13 of$15.9m.2.Current investments Current investments represent the Groups investment in ASX listed shares.These shares have appreciated significantly

80、in value during the year,the benefit of which is reflected directly in equity in the Groups results(rather than through the income statement)as the shares are not held for trading purposes.3.Net current liabilities Total current liabilities of$194.8m exceeded total current assets of$154.5m as at 31

81、July 2013 by$40.3m.This net current liability position is not uncommon in the telecommunications industry for two principal reasons.First,cash generated from trading is commonly used to repay non-current debt and to invest in non-current asset network infrastructure.Second,a significant item within

82、current liabilities is deferred income which is a non-cash item.Deferred income represents cash paid in advance by customers which is not recognised in income until the service has been delivered.Excluding this item,the Group had net current assets of$18.5m at the FY13 year-end.4.Other non-current a

83、ssets Other non-current assets comprise(i)trade receivables due in greater than 12 months,which represents one specific corporate customer contract,and(ii)non-current investments.Non-current investments comprise the equity investment in CDHL made during the year.15 TPG Telecom Limited and its contro

84、lled entities Directors report For the year ended 31 July 2013 4.Operating and financial review(continued)4.5 Business outlook Prospects for FY14 In FY14 the Group will continue to focus its efforts on growing its customer base profitably by delivering value leading services.In order to enhance its

85、prospects for future growth,the Group will also continue to invest in expanding its network infrastructure.The directors have forecast continued organic growth in FY14 and have provided a guidance range for EBITDA as set out in the table below:FY13 Actual$m FY14 Guidance$m Regular EBITDA 272.6 290-3

86、00 IRU gains(1)10.5-One-off credits(2)10.0-Total EBITDA 293.1 290-300 (1)Refer to commentary on FY13 corporate revenue above.(2)Refer to commentary on FY13 consumer telco costs above.Principal business risks Like other businesses,the Group is exposed to a number of risks which may affect future fina

87、ncial performance.The material business risks identified by the Group and how they are addressed are set out below.1.Competitive environment Increased competition in the industry could impact the Groups financial performance by affecting its ability to grow its customer base and/or its ability to ma

88、ke money from its service offerings.The Group attempts to mitigate this risk by continually reviewing its customer offerings,their pricing relative to the market and customer needs.This is combined with constantly reviewing the Groups cost structures with the objective of optimising costs to ensure

89、the Group is best placed to continue providing value leading services.2.Business interruption A significant disruption of the Groups business through network or systems failure could cause financial loss for the Group and increased customer churn.The Group continually invests in its network and syst

90、ems to improve their resilience and performance.3.Regulatory environment Changes in regulation can significantly impact the Groups business.In addition,failure to comply with regulatory requirements could create financial loss for the Group.The Group attempts to mitigate this risk through close moni

91、toring of regulatory developments,engaging where necessary with the relevant regulatory bodies,and monitoring its own compliance with existing regulations.16 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 5 Corporate governance statement The Board of

92、 TPG Telecom Limited(the Company)determines the most appropriate corporate governance arrangements having regard to the best interests of the Company and its shareholders,and consistent with its responsibilities to other stakeholders.This statement outlines the Companys main corporate governance pra

93、ctices,which comply with the Australian Securities Exchange(“ASX”)Corporate Governance Principles and Recommendations(“ASX Recommendations”),unless otherwise stated.Principle 1 Lay solid foundations for management and oversight The Boards primary role is the protection and enhancement of long-term s

94、hareholder value.To fulfil this role the Board is responsible for the overall corporate governance of the Group including formulating its strategic direction,setting remuneration,appointing,removing and creating succession policies for directors and senior executives,establishing and monitoring the

95、achievement of managements goals,ensuring the integrity of risk management,internal control,legal compliance and management information systems,and approving and monitoring capital expenditure.The Board delegates to senior management responsibility for the implementation of the strategic direction o

96、f the Company.The Board Charter,which defines the functions reserved for the Board as is required by ASX Recommendation 1.1,can be found under the investor relations section of the Companys website at http:/.au/about/investorrelations.The performance of the executive directors is reviewed by the non

97、-executive directors on the Board.The performance of other senior executives is reviewed by the Chief Executive Officer(ASX Recommendations 1.2 and 1.3).Principle 2 Structure the Board to add value The Board considers that the number of directors and the composition of the Board are important for th

98、e success of the Company.The Board considers that the appropriate number of directors in the current circumstances is six,with four being non-executive directors of whom two are independent.Details of the experience and background of all directors are set out on page 5 of this Annual Report.Independ

99、ence of directors The Board believes that maximum value for shareholders is best served with the current Board composition.The Board currently comprises six directors,two of whom are independent.17 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 5.Cor

100、porate governance statement(continued)Principle 2 Structure the Board to add value(continued)The executive directors are David Teoh and Alan Latimer.The Board is of the view that the depth of experience and understanding that both directors have of the Company and of the industry in which the Compan

101、y operates provides benefits that exceed those that may flow from having independent non-executive directors.Robert Millner,a non-executive director,is not independent as he is a director of a major shareholder,Washington H Soul Pattinson and Company Limited.Robert has specific historical,financial

102、and business knowledge of the Company,the benefits of which,in the opinion of the Board,outweigh the benefits of independence at this time.Shane Teoh,a non-executive director,is not independent due to his family relationship with a major shareholder.The benefits of Shanes legal qualification,experie

103、nce in commercial and legal matters and detailed knowledge of the Company and of the industry in which it operates outweigh,in the opinion of the Board,the benefits of independence at this time.The Board believes that each director brings an independent mind and judgement to bear on all Board decisi

104、ons,notwithstanding that the Chairman and a majority of the Board are not independent(which is not in line with ASX Recommendation 2.1).All directors are able to and do review and challenge the assumptions and performance of management to ensure decisions taken are in the best interest of the Compan

105、y.Chairman of the Board The Chairman is an executive director and Chief Executive Officer of the Company.Nevertheless,the Board believes that David Teoh,in this dual role,does bring the quality and independent judgement to all relevant issues that are required of the Chairman.As Chief Executive Offi

106、cer,Mr Teoh consults the Board on matters that are sensitive,extraordinary or of a strategic nature.Nominations Committee The Board acts as the Nominations Committee and as such has responsibility for the selection and appointment of directors,undertaking evaluation of the Boards performance and dev

107、eloping and implementing a plan for identifying,assessing and enhancing directors competencies(ASX Recommendation 2.4).The process for evaluating the performance of the Board,its committees and individual directors involves the Chairman conducting individual interviews with each of the directors at

108、which time they are able to make comment or raise issues they have in relation to the Boards operations(ASX Recommendation 2.5).18 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 5.Corporate governance statement(continued)Principle 2 Structure the Boa

109、rd to add value(continued)Access to Company information and independent professional advice Directors may request additional information as and when they consider it appropriate or necessary to discharge their obligations as directors of the Company.This includes access to internal senior executives

110、 or external advisors as and when appropriate.A director must consult the Chairman before accessing external independent advice and must provide a copy of the advice received to other members of the Board(ASX Recommendation 2.6).Principle 3 Promote ethical and responsible decision-making The Company

111、 is committed to maintaining the highest standards in dealing with all of its stakeholders,both internally and externally.The Company has adopted a written Code of Conduct to assist directors and staff in understanding their responsibilities to ensure the Company conducts its business in accordance

112、with all applicable laws and regulations and in a way that enhances the Companys reputation(ASX Recommendation 3.1).The Code of Conduct is also reflected in internal policies and procedures which reinforce the Companys commitment to complying with all applicable laws and regulations.A copy of the Co

113、de of Conduct can be found on the Companys website at http:/.au/about/investorrelations(ASX Recommendation 3.5).Policy regarding trading in securities The Company has established a written Securities Trading Policy which identifies the principles by which the Company balances the investment interest

114、s of directors,senior executives and employees with the requirements for ensuring such trades only take place when all information relevant to making such investment decisions is fully disclosed to the market.Directors and senior executives are only permitted to deal in Company shares during a six w

115、eek period following the release of the Companys half-year and annual results to the ASX,the annual general meeting or any major announcement.Notwithstanding this,the Board may in certain circumstances permit dealings during other periods.Where the dealing relates to the acquisition of shares pursua

116、nt to an employee rights or option plan,through a dividend re-investment plan,or through conversion of convertible securities,these dealings are specifically excluded from this policy.Subsequent dealing in the underlying securities,however,is restricted as outlined in the policy.Directors must notif

117、y the Company Secretary in writing of all transactions in accordance with the requirements of Sections 205F and 205G of the Corporations Act 2002.The Company will notify the ASX of the details of any transaction on behalf of the directors.19 TPG Telecom Limited and its controlled entities Directors

118、report For the year ended 31 July 2013 5.Corporate governance statement(continued)Principle 3 Promote ethical and responsible decision-making(continued)A copy of the Securities Trading Policy can be found on the Companys website at http:/.au/about/investorrelations.Diversity Policy The Companys Code

119、 of Conduct provides that the Company will treat all employees and potential employees according to their skills,qualifications,competencies and potential,and will not discriminate on the basis of race,religion,gender,sexual preference,age,marital status or disability.The following guidelines have b

120、een established to ensure compliance with the Code of Conduct and,in turn,ASX Recommendation 3.2.Selection of new staff,development,promotion and remuneration is on the basis of performance and capability;Training and development is offered across the Group including external technical courses,mento

121、ring and secondments,in order to develop a diverse and skilled workforce;Flexibility is provided as appropriate in working hours to accommodate personal and family commitments;and Reporting to Senior Management by managers and supervisors takes place in relation to employment issues,and review and a

122、nalysis of exit interviews is undertaken to identify any discrimination related issues.Aside from the guidelines set out above the Company has not established measurable objectives for gender diversity in the workforce and does not have a separate written Diversity Policy.Female Representation As at

123、 31 July 2013 the proportion of females employed in the Group was as follows(ASX Recommendation 3.4):31 July 2013 31 July 2012 Number%Number%Board 0 0%0 0%Key Management Personnel 1 16.7%1 16.7%Other Management 12 25.5%13 21.0%Workforce 833 43.2%749 45.1%Workplace Gender Equality Report 2013 In acco

124、rdance with the requirements of the Workplace Gender Equality 2012(Act),the Company lodged its Workplace Gender Equality Report 2013 with the Workplace Gender Equality Agency on 29 May 2013.A copy of this report is available on the Companys website at http:/.au/about/investorrelations.20 TPG Telecom

125、 Limited and its controlled entities Directors report For the year ended 31 July 2013 5.Corporate governance statement(continued)Principle 4 Safeguarding integrity in financial reporting The Board has responsibility for ensuring the integrity of the financial statements and related notes and that th

126、e financial statements provide a true and fair view of the Companys financial position.To assist the Board in fulfilling this responsibility,the Board has established an Audit&Risk Committee which has the responsibility for providing assurance that the financial statements and related notes are comp

127、lete,are in accordance with applicable accounting standards,and provide a true and fair view.Audit&Risk Committee The Audit&Risk Committee is comprised of three non-executive directors,two of whom are independent,and is chaired by Mr Denis Ledbury.Details of all members of the Audit&Risk Committee d

128、uring the year and their qualifications are set out on page 5 of this Annual Report(ASX Recommendation 4.1,4.2&4.4).The Board has adopted a formal charter which details the function and responsibility of the Audit&Risk Committee to ensure the integrity of the financial statements and independence of

129、 the external auditor(ASX Recommendation 4.3).A copy of the charter can be found on the Companys website at http:/.au/about/investorrelations.The Audit&Risk Committees responsibilities include ensuring the integrity of the financial reporting process,the risk management process,internal reporting an

130、d controls,management of strategic and major financial and operational risks,and the external audit process,based on sound principles of accountability,transparency and responsibility.The external auditors,other directors,and the Chief Financial Officer are invited to Audit&Risk Committee meetings a

131、t the discretion of the Chairman of the Committee.The Committee meets at least twice a year.It met twice during the year and the Committee members attendance record is disclosed in the table of directors meetings on page 6 of this Annual Report(ASX Recommendation 4.4).Auditor selection and appointme

132、nt The Audit&Risk Committee reviews annually the audit process including assessment of auditor independence.Any non-audit work requires the prior approval of the Committee,which approval will only be given where it can be established that it will not compromise the independence of the audit.21 TPG T

133、elecom Limited and its controlled entities Directors report For the year ended 31 July 2013 5.Corporate governance statement(continued)Principle 5 Make timely and balanced disclosure Continuous disclosure The Company is committed to ensuring that shareholders and the wider business community be info

134、rmed of all material information concerning the Company in a timely and accurate manner.Accordingly,the Company has established a Market Disclosure Policy to ensure that the share market is properly informed of matters that may have a material impact on the price at which the Companys securities are

135、 traded(ASX Recommendation 5.1 and 5.2).A copy of the Market Disclosure Policy can be found on the Companys website at http:/.au/about/investorrelations.Principle 6 Respect the rights of shareholders The Board aims to ensure that shareholders are informed of all major developments affecting the Comp

136、any.The Company posts its annual report and major announcements on its website under the Investor Relations section(http:/.au/about/investorrelations)and provides a link via the website to the ASX website so that all ASX releases,including notices of meetings,presentations,and analyst and media brie

137、fings,can be accessed(ASX Recommendation 6.1).Historical information is also available to shareholders on the Companys website,including prior years Annual Reports.Shareholders are encouraged to participate at general meetings,either in person or by proxy,and are specifically offered the opportunity

138、 of receiving communications via email(ASX Recommendation 6.1 and 6.2).Principle 7 Recognise and manage risk The Company has an established business risk management framework to enable identification,control and oversight of material business risks facing the Group.These risks include operational,fi

139、nancial,regulatory and technical risks.The primary responsibility for identifying and controlling business risks lies with management.The Audit and Risk Committee,under delegation from the Board,plays an oversight role in ensuring that material business risks and their associated controls are regula

140、rly reported to the Board by management and that a satisfactory system of risk management and internal control is maintained.22 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 5.Corporate governance statement(continued)Principle 7 Recognise and manage

141、 risk(continued)In relation to the Groups financial statements for the financial year ended 31 July 2013,the Groups Chief Executive Officer and Chief Financial Officer,as required by the Corporations Act and ASX recommendations,have provided to the Board the following:-the declaration required by se

142、ction 295A of the Corporations Act;and-assurance that the section 295A declaration was founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.Principle 8 Remunerate fairly and re

143、sponsibly The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to executives and directors.The Remuneration Committee comprises three non-executive directors,two of whom are independent,and is chaired by Mr Denis Ledbury.The Commi

144、ttee meets as required and,at a minimum,twice a year.It met three times during the year ended 31 July 2013 and the Committee members attendance record is disclosed in the table of directors meetings on page 6 of this Annual Report.Other directors are invited to attend these meetings at the discretio

145、n of the Committee Chairman.Further information is set out in the Remuneration Report below(ASX Recommendation 8.2&8.3).6.Remuneration report-audited This remuneration report sets out the remuneration structures of the directors of the Company and of other key management personnel of the Group,as we

146、ll as explaining the principles underpinning those remuneration structures.For the purpose of this report,key management personnel are defined as those individuals who have authority and responsibility for planning,directing and controlling the activities of the Group.Key management personnel includ

147、e the directors of the Company and key Group executives including the five most highly remunerated.6.1 Remuneration principles Remuneration levels for key management personnel of the Group are designed to attract and retain appropriately qualified and experienced directors and executives.The Remuner

148、ation Committee considers the suitability of remuneration packages relative to trends in comparable companies and to the objectives of the Groups remuneration strategy.23 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 6.Remuneration report-audited(co

149、ntinued)6.1 Remuneration principles(continued)The remuneration structures explained below are designed to attract suitably qualified candidates,to reward the achievement of strategic objectives and to achieve the broader outcome of creation of value for shareholders by:a)providing competitive remune

150、ration packages to attract and retain high calibre executives;and b)ensuring that a significant proportion of executives remuneration is performance-linked;and c)setting performance hurdles for the achievement of performance-linked incentives at a sufficiently demanding level as to ensure value crea

151、tion for shareholders.6.2 Remuneration structure Remuneration packages include a mix of fixed and performance-linked remuneration.(i)Fixed remuneration Fixed remuneration consists of base salary,employer contributions to superannuation funds,and non-monetary benefits which typically only comprise an

152、nual leave entitlements but may also include such benefits as the provision of a motor vehicle.The Group pays fringe-benefits tax on such non-monetary benefits where applicable.Fixed remuneration levels are reviewed annually through a process that considers individual performance,overall performance

153、 of the Group,and remuneration levels for similar roles in comparable companies.The fixed remuneration of executive directors is determined by the Remuneration Committee.The fixed remuneration of other key management personnel is determined by the Executive Chairman in conjunction with the Remunerat

154、ion Committee.Fixed remuneration reviews for other staff are determined by the Executive Chairman.(ii)Performance-linked remuneration Performance-linked remuneration comprises both long-term and short-term incentives as set out below.a)Long-term incentives Former scheme A former incentive plan which

155、 was terminated during 2008 included a long-term component under which shares allocated to certain employees vested at 20%per annum at the end of each of the five years following allocation,provided the employee continued to be employed by the Group.The final vesting date under this plan occurred du

156、ring the year ended 31 July 2013 and there were therefore no unvested shares outstanding under this plan as at 31 July 2013.The shares that vested to key management personnel during the year are set out in section 6.4(ii)below.Current scheme The Groups current long-term incentive structure is in the

157、 form of a performance rights plan.Under the rules of the performance rights plan,participants may be granted rights to acquire fully paid ordinary shares in the Company for no consideration,subject to certain performance conditions.24 TPG Telecom Limited and its controlled entities Directors report

158、 For the year ended 31 July 2013 6.Remuneration report-audited(continued)6.2 Remuneration structure(continued)(ii)Performance-linked remuneration(continued)The plan was introduced in FY12 with the first grant of rights taking place on 9 March 2012.During FY13 a second grant of rights occurred(grant

159、date 24 December 2012).The key terms of both lots of rights are consistent with one another and are as follows:One third of the performance rights granted will vest following the release of the Groups audited financial statements for each of the 3 financial years ending after the date of grant,subje

160、ct to the satisfaction of performance conditions.At each vesting date:o 30%of the performance rights that are due to vest on that date will vest if the rights holder has been continuously employed by the Group up until and including the relevant vesting date;and o 70%of the performance rights that a

161、re due to vest on that date will vest if the rights holder has been continuously employed by the Group up until and including the relevant vesting date and the Group has met its financial objectives for the financial year immediately preceding the relevant vesting date.Any performance rights which d

162、o not vest,automatically lapse.The financial objectives that form part of the vesting conditions described above are determined annually by the Remuneration Committee.Details of the performance rights that have been granted to key management personnel during the year ended 31 July 2013 are set out i

163、n table 6.4(i)below.b)Short-term incentives Short-term incentive cash bonuses may be paid by the Group,including to key management personnel,depending on the Groups performance and to award individual performance.Bonuses awarded to the executive directors are determined by the Remuneration Committee

164、.Bonuses awarded to other key management personnel are determined by the Executive Chairman in conjunction with the Remuneration Committee.Bonuses awarded to other staff are made at the discretion of the Executive Chairman.Details of the short-term incentives paid to key management personnel during

165、the current reporting period are set out at table 6.3 below.Link to Group Financial Performance In determining the short-term incentive component of key management personnel remuneration,consideration is given to the Groups performance,including against its financial targets.The Group achieved EPS g

166、rowth of 63%in the year to 31 July 2013 and increased declared dividends by 36%.This represents the 5th consecutive year of strong EPS and dividend growth by the Group as reflected in the following table.25 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2

167、013 6.Remuneration report-audited(continued)6.2 Remuneration structure(continued)(ii)Performance-linked remuneration(continued)2009 2010 2011 2012 2013 EPS(cents)2.6 7.6 10.1 11.5 18.8 Ordinary dividends paid or declared(cps)2.0 4.0 4.5 5.5 7.5 The Remuneration Committee believes that the current re

168、muneration structures described in this report have been effective in motivating and rewarding the achievement of these strong results.(iii)Service contracts No key management personnel employment contract has a fixed term,nor do any contain any provision for termination benefits other than as requi

169、red by law.No key management personnel employment contract has a notice period of greater than one month,except for the Groups employment contract with Mr D Teoh,which provides that the contract may be terminated by either party giving three months notice.(iv)Non-executive director fees The aggregat

170、e remuneration of non-executive directors was last voted upon by shareholders at the 2004 AGM,when an aggregate limit of$500,000 per annum was approved.Actual non-executive director remuneration for the year ended 31 July 2013 was$289,145(2012:$215,275).Non-executive directors do not receive perform

171、ance-linked remuneration nor are they entitled to any retirement benefit.Directors fees cover all main board activities and membership of committees.6.3 Directors and executive officers remuneration The key management personnel of the Company and of the Group during the year were as follows:Mr D Teo

172、h Executive Chairman&Chief Executive Officer Mr A Latimer Executive Director,Finance&Corporate Services Mr D Ledbury Non-Executive Director Mr R Millner Non-Executive Director Mr J Pang Non-Executive Director Mr S Teoh Non-Executive Director Ms M De Ville Chief Information Officer Mr S Banfield Chie

173、f Financial Officer&Company Secretary Mr C Levy General Manager,Consumer Mr J Paine National Technical&Strategy Manager Mr W Springer General Manager,Corporate Sales Mr T Moffatt General Counsel 26 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 6.Rem

174、uneration report audited(continued)6.3 Directors and executive officers remuneration(continued)Details of the nature and amount of each major element of remuneration of each director of the Company and of other key management personnel of the Group are set out in the tables below:Short-term Post-emp

175、loyment Proportion of remuneration performance related%Share-based payments as proportion of remuneration%Directors Salary&fees$(note A)STI cash bonus$(note B)Non-monetary benefits$Total$Superannuation benefits$(note C)Other long term$Share-based payments$Total$Executive Directors Mr D Teoh,Chairman

176、 2013 814,423 900,000 229,661 1,944,084 23,534 86,739-2,054,357 44%-2012 611,538 800,000 222,246 1,633,784 46,346 71,665-1,751,795 46%-Mr A Latimer 2013 260,960 400,000(11,579)649,381 23,431 4,190-677,002 59%-2012 256,584 200,000 8,903 465,487 22,270 6,961-494,718 40%-Non-Executive Directors Mr D Le

177、dbury 2013 78,958-78,958 7,156-86,114-2012 67,500-67,500 6,075-73,575-Mr R Millner 2013 69,583-69,583 6,306-75,889-2012 65,000-65,000 5,850-70,850-Mr J Pang 2013 69,583-69,583 6,306-75,889-2012 65,000-65,000 5,850-70,850-Mr S Teoh(1)2013 46,984-46,984 4,269-51,253-2012-(1)Mr S Teoh was appointed on

178、11 October 2012 27 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 6.Remuneration report audited(continued)6.3 Directors and executive officers remuneration(continued)Short-term Post-employment Share-based payments Proportion of remuneration performan

179、ce related%Share-based payments as proportion of remuneration%Executives Salary&fees$(note A)STI cash bonus$(note B)Non-monetary benefits$Total$Superannuation benefits$(note C)Other long term$(note D)Performance rights$(note E)Shares$Total$Ms M De Ville 2013 211,609 10,000 7,304 228,913 19,956 3,515

180、 17,337 1,500 271,221 11%7%2012 211,609 10,000 2,989 224,598 19,891 3,226-2,708 250,423 5%1%Mr S Banfield 2013 198,186 104,920 158 303,264 25,871 6,255 105,696 6,500 447,586 49%25%2012 183,917 85,000 8,481 277,398 24,127 4,621 42,766 8,473 357,385 38%14%Mr C Levy 2013 243,100 166,533 19,956 429,589

181、37,090 14,176 141,891 6,000 628,746 50%24%2012 183,677 135,000 2,029 320,706 28,627 4,215 57,021 7,667 418,236 48%15%Mr J Paine 2013 195,833 67,460 10,469 273,762 23,034 7,216 105,696-409,708 42%26%2012 188,515 85,000 6,942 280,457 23,850 3,004 42,766-350,077 36%12%Mr W Springer 2013 194,362 94,920

182、10,872 300,154 27,085 7,511 105,696-440,446 46%24%2012 183,400 85,000 7,418 275,818 23,400 2,923 42,766-344,907 37%12%Mr T Moffatt(1)2013 187,267 94,920 3,793 285,980 25,826 5,196 105,696 4,500 427,198 48%26%2012-(1)Mr T Moffatt has been recognised within key management personnel from 1 August 2012

183、28 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 6.Remuneration report-audited(continued)6.3 Directors and executive officers remuneration(continued)Notes in relation to the table of directors and executive officers remuneration A.The short-term inc

184、entive bonuses paid during the years ended 31 July 2013 and 31 July 2012 were for performance during those years.B.The amounts disclosed under Non-monetary benefits reflect exclusively the movement in the annual leave balance of each individual in the period,with the exception of Mr D Teoh whose amo

185、unt also includes the provision of other fringe benefits(principally a motor vehicle).C.The amounts disclosed under Other long-term reflect the movement in the long-service leave balance of each individual in the period.D.The share-based payments disclosed under Performance Rights reflect the fair v

186、alue of each right multiplied by the number of rights granted to each individual,amortised pro-rata over the vesting period of each right.The fair value of each right is calculated at date of grant by subtracting the expected dividend payments per share during the vesting period from the share price

187、 at date of grant.The number of rights granted to each key management person is disclosed in 6.4(i)below.The rules of the performance rights plan are explained in 6.2(ii)(a)above.E.The share-based payments disclosed under Shares reflect the fair value of each share multiplied by the number of shares

188、 granted to each individual,amortised pro-rata over the vesting period of each share.The fair value of the shares is the market value of the shares purchased for the individual under the scheme.The number of shares granted to each key management person is disclosed in 6.4(ii)below.The rules of the s

189、hare plan are explained in 6.2(ii)(a)above.6.4 Share-based payments (i)Performance rights granted as remuneration Details of performance rights that were granted to key management personnel during the financial year ended 31 July 2013 are set out below.All rights had a grant date of 24 December 2012

190、,were provided at no cost to the recipients and have an exercise price of$nil.FY13 Performance rights grant Number of rights granted during FY13 Number of rights forfeited during FY13 Number of rights vested during FY13 Number of rights held as at 31 July 2013 Fair value per right at grant date($)Mr

191、 S Banfield 60,000-60,000 2.3267 Mr C Levy 81,000-81,000 2.3267 Mr J Paine 60,000-60,000 2.3267 Mr W Springer 60,000-60,000 2.3267 Mr T Moffatt 60,000-60,000 2.3267 Ms M De Ville 18,000-18,000 2.3267 29 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013

192、6.Remuneration report-audited(continued)6.4 Share-based payments(continued)(i)Performance rights granted as remuneration(continued)Details of performance rights that were granted to key management personnel during previous financial years and that remained outstanding at the start of FY13 are set ou

193、t below.All rights in the table below had a grant date of 9 March 2012,were provided at no cost to the recipients and have an exercise price of$nil.FY12 Performance rights grant Number of rights held as at 31 July 2012 Number of rights forfeited during FY13 Number of rights vested during FY13 Number

194、 of rights held as at 31 July 2013 Fair value per right at grant date($)Mr S Banfield 75,000-25,000 50,000 1.4733 Mr C Levy 100,000-33,333 66,667 1.4733 Mr J Paine 75,000-25,000 50,000 1.4733 Mr W Springer 75,000-25,000 50,000 1.4733 Mr T Moffatt 75,000-25,000 50,000 1.4733 There has been no vesting

195、 or granting of any rights since the year-end.(ii)Shares granted as remuneration The shares in the table below were granted on 13 December 2007 under a former incentive plan that ceased to operate in 2008,the rules of which are described in 6.2(ii)(a)above.The table below shows the number of shares

196、that vested during the year under this plan to each key management person.As the final vesting date under this plan occurred during the year,there were no unvested shares as at 31 July 2013.Number of unvested shares as at 31 July 2012 Number of shares vested during 2013 Number of unvested shares as

197、at 31 July 2013 Fair value per share at grant date($)Mr S Banfield 15,623 15,623-$0.41611 Mr C Levy 14,419 14,419-$0.41611 Ms M De Ville 3,607 3,607-$0.41611 Mr T Moffatt 10,814 10,814-$0.41611 (iii)Modification of terms of share-based payment transactions No terms of share-based payment transaction

198、s have been altered or modified by the issuing entity during the reporting period or the prior period.30 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 7.Principal activities During the financial year the principal activities of the Group continued t

199、o be the provision of consumer,wholesale and corporate telecommunications services.8.Dividends Dividends paid or declared by the Company since the end of the previous financial year were as follows:Cents per share Total amount$000 Franked/unfranked Date of payment Final 2012 ordinary 2.75 21,830 Fra

200、nked 20 Nov 2012 Interim 2013 ordinary 3.50 27,783 Franked 21 May 2013 Total amount 49,613 Dividends declared and paid during the year were fully franked at the rate of 30 per cent.After the balance sheet date the directors have declared a fully franked final FY13 dividend of 4.0 cents per ordinary

201、share,payable on 19 November 2013 to shareholders on the register at 15 October 2013.The financial effect of this dividend has not been brought to account in the financial statements for the year ended 31 July 2013 and will be recognised in subsequent financial reports.9.Events subsequent to reporti

202、ng date There has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely,in the opinion of the directors of the Company,to affect significantly the operations of the Group,the results of those

203、 operations,or the state of affairs of the Group in future financial years.10.Likely developments There are no material likely developments for the Group to disclose outside of normal business operations at the date of this report.31 TPG Telecom Limited and its controlled entities Directors report F

204、or the year ended 31 July 2013 11.Directors interests The relevant interest of each director in the shares and options over such instruments issued by the companies within the Group and other related bodies corporate,as notified by the directors to the Australian Stock Exchange in accordance with S2

205、05G(1)of the Corporations Act 2001,at the date of this report is as follow:Shares in TPG Telecom Limited Mr D Teoh 291,625,603 Mr R Millner 7,374,175 Mr D Ledbury 100,000 Mr A Latimer 200,000 Mr J Pang 88,812 Mr S Teoh 90,251 12.Share options and rights Rights granted to directors and executives of

206、the Group During the financial year,the Group granted rights over ordinary shares in the Company to the following of the five most highly remunerated officers of the Group as part of their remuneration:Number of rights granted Mr S Banfield 60,000 Mr C Levy 81,000 Mr J Paine 60,000 Mr W Springer 60,

207、000 Mr T Moffatt 60,000 All rights were granted during the financial year.No rights or options have been granted since the end of the financial year.Unissued shares under options At the date of this report there are no unissued ordinary shares of the Company under option.Shares issued on exercise of

208、 options The Company issued no ordinary shares as a result of the exercise of options(nor were any options available to be exercised)either during or subsequent to the year ended 31 July 2013(2012:Nil).32 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 201

209、3 13.Indemnification and insurance of officers and auditors Indemnification The Company has agreed to indemnify all directors and officers of the Company against all liabilities to another person(other than the Company or a related body corporate)that may arise from their position as a director or a

210、s an officer of the Company and its controlled entities,except where the liability arises out of conduct involving a lack of good faith.The agreement stipulates that the Company will meet the full amount of any such liabilities,including costs and expenses.Insurance premiums Since the end of the pre

211、vious financial year the Group has paid insurance premiums of$50,541(2012:$48,276)in respect of directors and officers liability insurance for current and former directors and officers,including senior executives of the Company and directors,senior executives and secretaries of its controlled entiti

212、es.The insurance premiums relate to:costs and expenses that may be incurred by the relevant officers in defending proceedings,whether civil or criminal and whatever their outcome;and other liabilities that may arise from their position,with the exception of conduct involving a wilful breach of duty

213、or improper use of information or position to gain a personal advantage.14.Non-audit services During the year KPMG,the Companys auditor,has performed certain other services in addition to their statutory duties.The Board has considered the non-audit services provided during the year by the auditor a

214、nd is satisfied that the provision of those non-audit services during the year by the auditor is compatible with,and did not compromise,the auditor independence requirements of the Corporations Act 2001 for the following reasons:all non-audit services were subject to the corporate governance procedu

215、res adopted by the Company and have been reviewed by the Audit&Risk Committee to ensure they do not impact the integrity and objectivity of the auditor;and the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics f

216、or Professional Accountants,as they did not involve reviewing or auditing the auditors own work,acting in a management or decision making capacity for the Company,acting as an advocate for the Company or jointly sharing risks and rewards.Details of the amounts paid to the auditor of the Company,KPMG

217、,and its related practices for audit and non-audit services provided during the year are set out below.33 TPG Telecom Limited and its controlled entities Directors report For the year ended 31 July 2013 14.Non-audit services(continued)2013$2012$Audit services:Audit and review of financial reports 39

218、4,800 405,012 Services other than statutory audit:Other regulatory audit services:-Telecommunications USO return 8,000 8,000-Bank covenant compliance certificate 7,500 7,500 Other services:-Taxation advisory services 51,905 32,321 67,405 47,821 15.Lead auditors independence declaration The lead audi

219、tors independence declaration is set out on page 98 and forms part of the directors report for the financial year ended 31 July 2013.16.Rounding off The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and,in accordance with that Class Order,amounts in the consolidated

220、financial statements and directors report have been rounded off to the nearest thousand dollars,unless otherwise stated.This report is made with a resolution of the directors.David Teoh Chairman Dated at Sydney this 11th day of October,2013 34 TPG Telecom Limited and its controlled entities Consolid

221、ated income statement For the year ended 31 July 2013 The notes on pages 39 to 94 are an integral part of these consolidated financial statements.Note 2013 2012 In thousands of AUD Revenue 7 724,533 663,139 Other income 8 3,349 1,438 Telecommunications expense (328,139)(307,066)Employee benefits exp

222、ense (60,067)(58,660)Other expenses (46,590)(37,445)Earnings before interest,tax,depreciation and amortisation 293,086 261,406(EBITDA)Depreciation of plant and equipment 19(49,892)(47,063)Amortisation of intangibles 20(23,942)(33,957)Results from operating activities 219,252 180,386 Finance income 2

223、,447 718 Finance expenses (9,400)(17,863)Net financing costs 9(6,953)(17,145)Profit before income tax 212,299 163,241 Income tax expense 10(63,134)(72,277)Profit for the year attributable to owners of the company 149,165 90,964 Earnings per share:Basic and diluted earnings per share(cents)11 18.8 11

224、.5 35 TPG Telecom Limited and its controlled entities Consolidated statement of comprehensive income For the year ended 31 July 2013 The notes on pages 39 to 94 are an integral part of these consolidated financial statements.Note 2013 2012 In thousands of AUD Profit for the year 149,165 90,964 Items

225、 that may be reclassified subsequently to profit or loss:Foreign exchange translation differences 23 6 Net change in fair value of available-for-sale financial assets,net of tax 15 24,435 9,744 Other comprehensive income,net of tax 24,458 9,750 Total comprehensive income attributable to owners of th

226、e company 173,623 100,714 36 TPG Telecom Limited and its controlled entities Consolidated statement of financial position As at 31 July 2013 The notes on pages 39 to 94 are an integral part of these consolidated financial statements.In thousands of AUD Note 31 July 2013 31 July 2012 Assets Cash and

227、cash equivalents 12 26,128 13,767 Trade and other receivables 13 40,676 38,013 Inventories 14 179 363 Investments 15 81,181 47,619 Prepayments and other assets 16 6,352 7,515 Total Current Assets 154,516 107,277 Trade and other receivables 13 15,268 6,049 Investments 15 7,333-Property,plant and equi

228、pment 19 319,159 323,915 Intangible assets 20 502,201 523,225 Prepayments and other assets 16 339 434 Total Non-Current Assets 844,300 853,623 Total Assets 998,816 960,900 Liabilities Trade and other payables 21 94,122 85,376 Loans and borrowings 22 169 357 Current tax liabilities 17 33,628 39,542 E

229、mployee benefits 23 5,241 4,606 Provisions 24 2,616 2,347 Accrued Interest 276 276 Deferred income and other liabilities 25 58,784 44,443 Total Current Liabilities 194,836 176,947 Loans and borrowings 22 39,134 144,360 Deferred tax liabilities 18 15,410 15,140 Employee benefits 23 349 743 Provisions

230、 24 7,111 6,671 Deferred income and other liabilities 25 26,010 26,262 Total Non-Current Liabilities 88,014 193,176 Total Liabilities 282,850 370,123 Net Assets 715,966 590,777 Equity Share Capital 26 516,907 516,907 Reserves 36,134 10,497 Retained earnings 162,925 63,373 Total Equity 715,966 590,77

231、7 37 TPG Telecom Limited and its controlled entities Consolidated statement of changes in equity For the year ended 31 July 2013 The notes on pages 39 to 94 are an integral part of these consolidated financial statements.ForeignShare-In thousands of AUDcurrencybasedSharetranslationpaymentsFair value

232、TotalRetainedTotalNotecapitalreservereservereservereservesearningsequityBalance as at 1 August 2011502,874 100 (81)1,092 1,111 11,876 515,861 Profit for the year-90,964 90,964 Foreign currency translation differences-6 -6 -6 Net change in fair value of available-for-sale financial assets,net of tax1

233、5-9,744 9,744 -9,744 Total comprehensive income for the period-6 -9,744 9,750 90,964 100,714 Share-based payment transactions-(364)-(364)-(364)Issue of ordinary shares26 607 -607 Transaction costs,net of tax26 (24)-(24)Dividends paid to shareholders26 13,450 -(39,467)(26,017)Total contributions by a

234、nd distributions to owners14,033 -(364)-(364)(39,467)(25,798)Balance as at 31 July 2012516,907 106 (445)10,836 10,497 63,373 590,777 Balance as at 1 August 2012516,907 106 (445)10,836 10,497 63,373 590,777 Profit for the year-149,165 149,165 Foreign currency translation differences-23 -23 -23 Net ch

235、ange in fair value of available-for-sale financial assets,net of tax15-24,435 24,435 -24,435 Total comprehensive income for the period-23 -24,435 24,458 149,165 173,623 Share-based payment transactions-1,179 -1,179 -1,179 Dividends paid to shareholders26 -(49,613)(49,613)Total contributions by and d

236、istributions to owners-1,179 -1,179 (49,613)(48,434)Balance as at 31 July 2013516,907 129 734 35,271 36,134 162,925 715,966 Attributable to owners of the Company 38 TPG Telecom Limited and its controlled entities Consolidated statement of cash flows For the year ended 31 July 2013 The notes on pages

237、 39 to 94 are an integral part of these consolidated financial statements.In thousands of AUD Note 2013 2012 Cash flows from operating activities Cash receipts from customers 800,467 726,940 Cash paid to suppliers and employees (482,450)(449,765)Cash generated from operations 318,017 277,175 Income

238、taxes paid (79,218)(47,703)Net cash from operating activities 238,799 229,472 Cash flows from investing activities Acquisition of property,plant and equipment (58,320)(64,164)Acquisition of subsidiaries,net of cash acquired 36 -(11,313)Costs incurred on acquisition of subsidiaries 36-(132)Acquisitio

239、n of investments 15(7,333)(22,406)Acquisition of intangibles 20(2,918)(446)Proceeds from sale of investments 2,475-Dividends received 8 2,219 1,438 Net cash used in investing activities (63,877)(97,023)Cash flows from financing activities Transaction costs related to issue of shares -(34)Transaction

240、 costs related to loans&borrowings -(1,290)Payment of finance lease liabilities (372)(843)Proceeds from borrowings 22 27,000 25,000 Repayment of borrowings 22 (134,000)(109,548)Interest received 1,411 349 Interest paid (7,363)(15,179)Dividends paid,net of Dividend Reinvestment Plan 26(49,613)(26,017

241、)Net cash used in financing activities (162,937)(127,562)Net increase in cash and cash equivalents 11,985 4,887 Cash and cash equivalents at beginning of the year 12 13,767 9,525 Effect of exchange rate fluctuations 376(645)Cash and cash equivalents at end of the year 12 26,128 13,767 39 TPG Telecom

242、 Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 Index to notes to the consolidated financial statements Page Page 1.Reporting entity 40 20.Intangible assets 70 2.Basis of preparation 40 21.Trade and other payables 71 3.Significant a

243、ccounting policies 41 22.Loans and borrowings 72 4.Determination of fair values 56 23.Employee benefits 73 5.Financial risk management 57 24.Provisions 75 6.Segment reporting 60 25.Deferred income and other liabilities 76 7.Revenue 62 26.Capital and reserves 76 8.Other income 62 27.Financial instrum

244、ents 78 9.Finance income and expenses 62 28.Operating leases 83 10.Income tax expense 63 29.Capital and other commitments 84 11.Earnings per share 64 30.Contingencies 84 12.Cash and cash equivalents 64 31.Consolidated entities 85 13.Trade and other receivables 64 32.Reconciliation of cash flows from

245、 86 operating activities 14.Inventories 65 33.Parent entity disclosures 87 15.Investments 65 34.Related parties 88 16.Prepayments and other assets 65 35.Subsequent events 91 17.Current tax liabilities 66 36.Business combinations 91 18.Deferred tax assets and liabilities 66 37.Auditors remuneration 9

246、1 19.Property,plant and equipment 68 38.Deed of cross guarantee 91 40 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 1.Reporting entity TPG Telecom Limited(the Company)is a company domiciled in Australia.The address of t

247、he Companys registered office is 65 Waterloo Road,Macquarie Park,NSW 2113.The consolidated financial statements as at,and for the year ended 31 July 2013,comprise the accounts of the Company and its subsidiaries(together referred to as the Group).The Group is a for-profit entity and is primarily inv

248、olved in the provision of consumer,wholesale and corporate telecommunications services.2.Basis of preparation a.Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards(AASBs)ado

249、pted by the Australian Accounting Standards Board(AASB)and the Corporations Act 2001.The consolidated financial statements comply with International Financial Reporting Standards(IFRSs)adopted by the International Accounting Standards Board(IASB).The consolidated financial statements were approved b

250、y the Board of Directors on 11 October 2013.b.Basis of measurement The consolidated financial statements have been prepared on the historical cost basis with the exception of assets and liabilities acquired through business combinations and financial instruments which are measured at fair value.The

251、methods used to measure fair values are discussed further at note 4.Notwithstanding the fact that the classifications within the 31 July 2013 consolidated statement of financial position show a net current liability position,the accounts have been prepared on a going concern basis as there are reaso

252、nable grounds to believe that the Group will be able to pay its debts as and when they become due and payable based on its Board approved cashflow projections,and also the undrawn debt facility available to it(refer note 22).c.Functional and presentation currency These consolidated financial stateme

253、nts are presented in Australian dollars,which is the functional currency of the majority of the subsidiaries of the Group.The Group is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and,in accordance with that Class Order,all financial information presented in Australian dollars

254、 has been rounded to the nearest thousand unless otherwise stated.41 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 2.Basis of preparation(continued)d.Use of estimates and judgements Preparation of the consolidated finan

255、cial statements in conformity with IFRSs requires management to make judgements,estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,liabilities,income and expenses.Actual results may differ from these estimates.Estimates and underlying assu

256、mptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.In particular,information about significant areas of estimation uncertainty and critical judgements in applying accounting polic

257、ies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes:note 3(m)(iii)and note 7 Revenue recognition for network capacity sales;note 20 measurement of the recoverable amounts of cash-generating units containing goodwill;not

258、e 27 valuation of financial instruments;note 36 business combinations.3.Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently across the Group.a.Basis

259、 of consolidation(i)Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date,which is the date on which control is transferred to the Group.Control is the power to govern the financial and operating policies of an entity so as to obtain be

260、nefits from its activities.In assessing control,the Group takes into consideration potential voting rights that currently are exercisable.Acquisitions on or after 1 July 2009 For acquisitions on or after 1 July 2009,the Group measures goodwill at the acquisition date as:the fair value of the conside

261、ration transferred;plus the recognised amount of any non-controlling interests in the acquiree;plus if the business combination is achieved in stages,the fair value of the existing equity interest in the acquiree;less the net recognised amount(generally fair value)of the identifiable assets acquired

262、 and liabilities assumed.42 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)a.Basis of consolidation(continued)Costs,other than those associated with the issue of debt or equity

263、 securities,that the Group incurs in connection with a business combination are expensed as incurred.Any contingent consideration payable is recognised at fair value at the acquisition date.If the contingent consideration is classified as equity,it is not remeasured and settlement is accounted for w

264、ithin equity.Otherwise,subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.When share-based payment awards(replacement awards)are required to be exchanged for awards held by the acquirees employees(acquirees awards)and relate to past services,then al

265、l or a portion of the amount of the acquirers replacement awards is included in measuring the consideration transferred in the business combination.This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquirees awards and the ext

266、ent to which the replacement awards relate to past and/or future service.Acquisitions pre 1 July 2009 For acquisitions pre 1 July 2009,goodwill represents the excess of the cost of the acquisition over the Groups interest in the recognised amount(generally fair value)of the identifiable assets,liabi

267、lities and contingent liabilities of the acquiree.Transaction costs that the Group incurred in connection with business combinations,other than those associated with the issue of debt or equity securities,were capitalised as part of the cost of the acquisition.Acquisitions of non-controlling interes

268、ts are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions.The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.(ii)Subsidiaries Subsidiaries are

269、 entities controlled by the Group.Control exists when the Group has the power,directly or indirectly,to govern the financial and operating policies of an entity so as to obtain benefits from its activities.In assessing control,potential voting rights that presently are exercisable or convertible are

270、 taken into account.The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted

271、by the Group.Such changes have been made with effect from the date of acquisition.43 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)a.Basis of consolidation(continued)(iii)Tran

272、sactions eliminated on consolidation Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.b.Foreign currency transactions Transactions in foreign currencies are translat

273、ed at the foreign exchange rate ruling at the date of the transaction.Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate ruling at that date.Foreign exchange differences arising on translation

274、are recognised in the income statement.Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.Non-monetary assets and liabilities denominated in foreign currencies that are stated a

275、t fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.c.Foreign operations The assets and liabilities of foreign operations,including goodwill and fair value adjustments arising on acquisition,are translated to Australian dollar

276、s at exchange rates at the reporting date.The income and expenses of foreign operations are translated to Australian dollars at exchange rates at the dates of the transactions.Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation

277、reserve in equity.d.Financial instruments(i)Non-derivative financial assets The Group initially recognises loans and receivables and deposits on the date that they are originated.All other financial assets are recognised initially on the trade date at which the Group becomes a party to the contractu

278、al provisions of the instrument.The Group derecognises a financial asset when the contractual rights to the cashflows from the asset expire,or it transfers the rights to receive the contractual cashflows on the financial asset in a transaction in which substantially all the risks and rewards of owne

279、rship of the financial asset are transferred.Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.44 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 Ju

280、ly 2013 3.Significant accounting policies(continued)d.Financial instruments(continued)Financial assets and liabilities are offset and the net amount presented in the statement of financial position only when the Group has a legal right to offset the amounts and intends either to settle on a net basi

281、s or to realise the asset and settle the liability simultaneously.The Group has the following non-derivative financial assets:Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market.Such assets are recognised initia

282、lly at fair value plus any directly attributable transaction costs.Subsequent to initial recognition,loans and receivables are measured at amortised cost using the effective interest method,less any impairment losses.Loans and receivables comprise trade and other receivables.Cash and cash equivalent

283、s Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in a

284、ny other category of financial assets.Subsequent to initial recognition,they are measured at fair value and changes therein,other than impairment losses(see note 3(h)(i),are recognised in other comprehensive income and presented within equity in the fair value reserve in equity.When an investment is

285、 derecognised,the cumulative gain or loss in equity is transferred to profit or loss.Available-for-sale financial assets comprise equity securities.(ii)Non-derivative financial liabilities The Group initially recognises debt securities issued and subordinated liabilities on the date that they are or

286、iginated.All other financial liabilities(including liabilities designated at fair value through profit or loss)are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.The Group derecognises a financial liability when its contractu

287、al obligations are discharged or cancelled or expire.Financial assets and liabilities are offset and the net amount presented in the statement of financial position only when the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and set

288、tle the liability simultaneously.45 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)d.Financial instruments(continued)Non-derivative financial liabilities are recognised initial

289、ly at fair value plus any directly attributable transaction costs.Subsequent to initial recognition,these financial liabilities are measured at amortised cost using the effective interest rate method.Non-derivative financial liabilities comprise loans and borrowings,bank overdrafts and trade and oth

290、er payables.Bank overdrafts that are repayable on demand and form an integral part of the Groups cash management are included as a component of cash and cash equivalents for the purpose of the statement of cashflows.(iii)Share capital Ordinary shares are classified as equity.Incremental costs direct

291、ly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity,net of any tax effects.e.Property,plant and equipment(i)Owned assets Items of property,plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses(se

292、e accounting policy(h).Cost includes expenditure that is directly attributable to the acquisition of the asset.The cost of self-constructed assets includes the cost of materials,direct labour,the initial estimate,where relevant,of the costs of dismantling and removing the items and restoring the sit

293、e on which they are located.Where parts of an item of property,plant and equipment have different useful lives,they are accounted for as separate items of property,plant and equipment.The gains and losses on disposal of an item of property,plant and equipment are determined by comparing the proceeds

294、 from disposal with the carrying amount of property,plant and equipment and are recognised net within other expenses in profit or loss.(ii)Leased assets Leases in the terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.Other leases a

295、re operating leases and are not recognised in the Groups statement of financial position.46 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)e.Property,plant and equipment(contin

296、ued)(iii)Subsequent costs The Group recognises in the carrying amount of an item of property,plant and equipment the cost of replacing part of such an item when that cost is incurred,if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of t

297、he item can be measured reliably.All other costs are recognised in the income statement as an expense as incurred.(iv)Depreciation Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property,plant and equipment.The esti

298、mated useful lives used in both the current and comparative periods are as follows:Network infrastructure 2.5-25 years Buildings 40 years Leasehold improvements 8 years The residual value,the useful life and the depreciation method applied to an asset are reassessed at least annually.f.Intangible as

299、sets(i)Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets.For the measurement of goodwill at initial recognition,see note 3(a)(i).Subsequent to its initial recognition,goodwill is measured at cost less accumulated impairment losses.(ii)Other intangibl

300、e assets Other intangible assets that are acquired by the Group and have finite useful lives are stated at cost less accumulated amortisation(see below)and any accumulated impairment losses(see accounting policy h).47 TPG Telecom Limited and its controlled entities Notes to the consolidated financia

301、l statements For the year ended 31 July 2013 3.Significant accounting policies(continued)f.Intangible assets(continued)The various categories of other intangible assets in the Groups accounts are as follows:-Trademark On acquisition of a subsidiary,trademarks of the acquired subsidiary are valued an

302、d brought to account as intangible assets.The valuation of a trademark is calculated using the Relief from Royalty Method.-Acquired customer bases On acquisition of a subsidiary,customer contracts and relationships of the acquired subsidiary are valued at the expected future economic benefits(based

303、on discounted cashflow projections)and brought to account as intangible assets.-Internally-generated software On acquisition of a subsidiary,internally developed software and systems are valued and brought to account as intangible assets.The software is valued at its amortised replacement cost.-Inde

304、feasible right of use of capacity Indefeasible rights of use(IRUs)of acquired network capacity are brought to account as intangible assets at the present value of the future cashflows payable for the right.IRUs of acquired subsidiaries are accounted for at their fair value as at the date of acquisit

305、ion.-Development costs Operating costs incurred in developing or acquiring income producing assets are recognised as an asset and amortised using the straight line method from the date of initial recognition over the period during which the future economic benefits are expected to be obtained.-Licen

306、ces Licences include acquired distribution rights for third party products.Licences are recognised as intangible assets at cost and are amortised using the straight line method over the term of the licence.(iii)Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capital

307、ised only when it increases the future economic benefits embodied in the specific asset to which it relates.All other expenditure is expensed as incurred.48 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant ac

308、counting policies(continued)f.Intangible assets(continued)(iv)Amortisation Amortisation is charged to the income statement on a straight-line basis,unless otherwise stated,over the estimated useful lives of intangible assets unless such lives are indefinite.Goodwill and intangible assets with an ind

309、efinite useful life are systematically tested for impairment at each balance sheet date.Other intangible assets are amortised from the date they are available for use.The estimated useful lives used in both the current and comparative periods are as follows:Goodwill-Indefinite life Acquired customer

310、 bases&reacquired rights-Amortised on a reducing balance basis in line with the expected economic benefits to be derived from the acquired customer base Trademark Indefinite life Internally generated software-5 years Indefeasible right of use(IRU)of capacity-Amortised over the life of the IRU Develo

311、pment costs-2-20 years Licences-Amortised over the term of the licence g.Inventories Inventories are stated at the lower of cost and net realisable value.Net realisable value is the estimated selling price in the ordinary course of business,less estimated selling expenses.h.Impairment A financial as

312、set is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cashflows of that asset.The carryi

313、ng amounts of the Groups non-financial assets,other than inventories and deferred tax assets,are reviewed at each reporting date to determine whether there is any indication of impairment.If any such indication exists,the assets recoverable amount is estimated.For goodwill,and intangible assets that

314、 have indefinite useful lives or that are not yet available for use,the recoverable amount is estimated each year at the same time.An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.Impairment losses are recognised in

315、the income statement unless an asset has previously been revalued,in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.49 TPG Telecom Limited and its controlled entities Notes to the consolidated fi

316、nancial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)h.Impairment(continued)Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units/group of units a

317、nd then to reduce the carrying amount of the other assets in the units/group of units on a pro rata basis.(i)Calculation of recoverable amount Impairment of receivables is not recognised until objective evidence is available that a loss event has occurred.Significant receivables are individually ass

318、essed for impairment.Impairment testing of significant receivables that are not assessed as impaired individually is performed by placing them into portfolios of significant receivables with similar risk profiles and undertaking a collective assessment of impairment.Non-significant receivables are n

319、ot individually assessed.Instead,impairment testing is performed by placing non-significant receivables in portfolios of similar risk profiles,based on objective evidence from historical experience adjusted for any effects of conditions existing at each balance sheet date.The recoverable amount of o

320、ther assets is the greater of their fair value less costs to sell and value in use.In assessing value in use,the estimated future cashflows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the as

321、set.For an asset that does not generate largely independent cash inflows,the recoverable amount is determined for the cash-generating unit to which the asset belongs.(ii)Reversals of impairment Impairment losses,other than in respect of goodwill,are reversed when there is an indication that the impa

322、irment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount.An impairment loss in respect of goodwill cannot be reversed.An impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in recovera

323、ble amount can be related objectively to an event occurring after the impairment loss was recognised.An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined,net of depreciation or amortisation,if no impairm

324、ent loss had been recognised.i.Employee benefits(i)Long-term service benefits The Groups net obligation in respect of long-term service is the amount of future benefit that employees have earned in return for their service in the current and prior periods.The obligation is calculated using expected

325、future increases in wage and salary rates including related on-costs and 50 TPG Telecom Limited and its controlled entities Notes to the consolidated financial statements For the year ended 31 July 2013 3.Significant accounting policies(continued)i.Employee benefits(continued)expected settlement dat

326、es,and is discounted using the rates attached to the Commonwealth Government bonds at the balance sheet date which have maturity dates approximating to the terms of the Groups obligations.(ii)Wages,salaries,annual leave and non-monetary benefits Liabilities for employee benefits for wages,salaries a

327、nd annual leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees services provided up to the reporting date,and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pa

328、y as at reporting date including related on-costs such as workers compensation insurance and payroll tax.Non-accumulating non-monetary benefits,such as medical care,cars and free or subsidised goods and services,are expensed based on cost to the Group as the benefits are taken by the employees.(iii)

329、Performance rights plan The Group has in place a performance rights plan that provides for selected employees to be granted rights to acquire fully paid ordinary shares in the Company for no consideration,subject to certain performance conditions.Under this scheme funds are transferred to a trust wh

330、ich acts as an agent and purchases shares for the benefit of the selected employees.A share-based payments reserve is recognised for the funds transferred to the scheme.An employee expense is recognised over the period during which the employees become unconditionally entitled to the shares with a c

331、orresponding decrease in the share-based payments reserve.The employee expense is based on the fair value at date of grant of the rights.The fair value is calculated by subtracting the expected dividend payments per share during the vesting period from the share price at date of grant.(iv)Employee s

332、hare scheme The Group has in place an Employee Share Scheme that provides for selected employees to receive ordinary shares in the Company.Under this scheme funds are transferred to a trust which acts as an agent and purchases shares for the benefit of the selected employees.A share-based payments r

333、eserve is recognised for the funds transferred to the scheme.An employee expense is recognised over the period during which the employees become unconditionally entitled to the shares with a corresponding decrease in the share-based payments reserve.(v)Superannuation The Group contributes to several defined contribution superannuation plans.Contributions are recognised as an expense in the income