TPG Telecom Limited Annual Report 2022

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FY2022 Annual Report · TPG Telecom Limited

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Annual Report
2022

Contents
Chairman’s letter

CEO’s report

Directors’ report

Operating and financial review

Business strategy

Financial performance

Summary of financial position

Strategic risk management

Sustainability

Board of Directors

Remuneration report

Auditor’s independence declaration

Financial report

Directors’ declaration

Independent auditor’s report

ASX additional information

Glossary

Upcoming key dates

15.03.23 Ex-dividend date

16.03.23 Dividend record date

13.04.23 Dividend payment date

04.05.23 Annual General Meeting

30.06.23 End of financial half year

130

131

135

137

About TPG Telecom

TPG Telecom provides telecommunications

services to consumer, business, enterprise,

government and wholesale customers in

Australia. We market our services through

multiple well-known brands including

Vodafone, TPG, iiNet, AAPT, Internode, Lebara

and felix. We provide around 7.5 million fixed

and mobile telecommunications services to

customers across more than 5,700 mobile

sites and approximately 34,000 kilometres of

metropolitan, inter-capital and subsea cable

systems. The Group employs approximately

6,000 people across Australia, Guam and the

Philippines, supported by additional

outsourced service centres in India, Fiji and

South Africa.

Purpose and values

TPG Telecom’s purpose is to build meaningful

relationships and support vibrant, connected

communities. Our values guide the company

culture, what we prioritise, and the experiences

we create for customers and communities:

• Stand together – Together we are

unstoppable.

• Own it – We step up and own what we do.

• Simple’s better – We challenge ourselves

to find a simpler, fresher way.

24.08.23 Half year results announcement

• Boldly go – We are hungry, curious and

12.09.23 Interim ex-dividend date

brave.

13.09.23 Interim dividend record date

11.10.23 Interim dividend payment date

31.12.23 End of financial full year

Note: Dividend payments are subject to TPG Telecom
Board approval. Dates may be subject to change.

Lodged with the Australian Securities Exchange
(‘ASX’) under Listing Rule 4.3A.

The ASX Appendix 4E and Full-year financial
results of TPG Telecom limited (ABN 76 096 304
620) and its controlled entities for the year
ended 31 December 2022.

Acknowledgement of Country

We acknowledge the Traditional Custodians of
Country throughout Australia and the lands on
which we and our communities, live, work and
connect. We pay our respects to their Elders,
past, present, and emerging.

Chairman’s letter

Canning Fok, Chairman

Dear Shareholders

It is my pleasure to present our Annual Report for
2022. Throughout 2022, we continued to build
the solid financial foundations we need to
achieve the potential of TPG Telecom. We are
better positioned than ever to provide the great
value telco services our customers rely on to stay
connected, productive and entertained.

Financial performance

The 2022 financial results reflect positive change
in business conditions with a return to growth in
subscriber numbers and positive momentum in
revenue and profitability.

The Group ended the year with around 7.5 million
services in operation and delivered strong
customer growth in the enterprise, government
and wholesale segment.

Total revenue for the year was $5,415 million, up
2.3% on 2021. EBITDA was $2,135 million, which
included one-off proceeds from the sale of our
passive tower and rooftop assets and the impact
of restructuring costs. Excluding these items,
EBITDA was $1,793 million, up 3.8% on 2021.

Dividends

TPG Telecom’s strong balance sheet and
financial position continue to underpin the
Board’s policy of paying a dividend of least 50%
of Adjusted NPAT.

The Board has declared a fully-franked final
dividend of 9.0 cents per share for 2022, payable
on 13 April 2023, taking total dividends for the
year to 18.0 cents per share, up 1.5 cents per
share on 2021.

Sustainability

TPG Telecom continues to progress our
sustainability strategy against its four pillars. The
Board recognises the significance of climate

change and the effect it has on society – and we
are pleased to have signed off on the Company’s
pathway to achieving net zero emissions by
2050, including near-term emissions reduction
targets by 2030, and to see progress with our
commitment to power all of our Australian
operations with renewable energy by 2025.

We also issued our inaugural report following the
Task Force on Climate-related Financial
Disclosures (TCFD) framework.

TPG Telecom is committed to gender diversity by
increasing the number of women in leadership
and STEM roles. In 2022 we achieved an uplift in
female representation in leadership roles and
across our Australian workforce.

Cyber awareness

The Board notes the increased prevalence of
cyber-attacks against Australian government
agencies and organisations, including in the
telecommunications sector.

Like other organisations, TPG Telecom is not
immune from such attacks, and continues to
work closely with cyber security partners and
relevant government agencies to have robust and
secure systems and processes.

The Board takes cyber resilience extremely
seriously. Significant investments continue to be
made to strengthen TPG Telecom’s processes
and procedures to secure customer data and
protect it from unauthorised use, access,
modification or disclosure.

Looking ahead

TPG Telecom has entered 2023 in a strong
financial position.

I thank all our employees for their hard work and
commitment to the Company’s success.

Most importantly, on behalf of the Board, I thank
our shareholders and customers for their
continued support of TPG Telecom.

Canning Fok
Chairman

Page 1 | TPG Telecom Annual Report 2022

CEO’s report

Iñaki Berroeta, CEO & Managing Director

The 2022 year was one of transformation and a
return to growth for TPG Telecom.

As our customers returned from Covid lockdowns,
we have continued to help businesses, homes and
educational institutions stay connected to the
essential communications services they need to
thrive in the digital age.

We remain focused on our ambition to be the best
telco in Australia, and by investing in the best
technology and maintaining our focus on a low-cost
base, we are in a great position to serve consumers
and businesses seeking great value and excellent
service.

With a clear strategy focused on delivering telco
services, we are now ready to move to an exciting
stage of executing against the initiatives (see page
4) to enable us to maximise our potential.

Regional network

TPG Telecom is committed to delivering essential
telecommunication services to communities
throughout Australia. Our landmark regional mobile
network sharing arrangement with Telstra has the
potential to play a vital role in achieving this,
bringing our family of brands into more households
and businesses than ever before.

While the ACCC’s decision in December 2022 not
to approve the proposed arrangement was a
disappointment, we will continue to represent the
interests of regional consumers. We are challenging
the ACCC’s decision in the Australian Competition
Tribunal, with a decision expected before the end
of June 2023. We are confident that during the
appeal process we will demonstrate the merits of
the proposed network sharing arrangement in
bringing greater choice, competition and
improved connectivity to regional, rural and
remote communities.

Cyber resilience and data privacy

The significant increase in cybercrimes against
Australian organisations in 2022 highlighted the
importance of ongoing investment in technology
and people, as well as an all-of-business
commitment to ensure processes, operations and
customers are always protected.

In December, we identified unauthorised access to
a limited number of email accounts for iiNet and
Westnet business customers. We implemented
measures to stop this unauthorised access and
further security measures were put in place. We
are continuing to communicate and support
affected customers.

We are strengthening our security processes
and capabilities to keep up with evolving
security threats to help protect customer data
from unauthorised use, access, modification
or disclosure.

People and culture

At TPG Telecom, our culture is known as the ‘Spirit
of TPG’, which is brought to life through living our
purpose and values. We continually invest in
developing our employees’ capabilities and skills
and in making TPG Telecom a great place for our
people to work and grow together. Importantly, our
latest employee engagement survey results told us
our people feel heard, informed and cared for by
their leaders, and passionate about their work and
how it contributes to our organisational goals. We
were delighted during 2022 to be recognised with
the Human Resources Director (HRD) 5-Star
Employer of Choice award.

TPG Telecom Foundation

The TPG Telecom Foundation partnered with seven
new charities during 2022, donating more than
$1 million to commence multiyear, national projects
which harness the scalable use of technology.

We are pleased to support ACON, Guide Dogs,
Starlight Children’s Foundation, Cerebral Palsy
Alliance, headspace, Missing School and
InfoXchange. These innovative projects support the
Foundation’s purpose – to create opportunities to
improve the health, wellbeing and education of
Australian communities in need.

Page 2 | TPG Telecom Annual Report 2022

Operational and customer highlights

The 2022 financial year demonstrated our
commitment to customer service, being the
industry leader on value, and continuing to innovate
for consumer and business customers.

Our Mobile business returned to subscriber growth
as the pressures created by the COVID pandemic
eased, and as we continued to be recognised for
the great value and service we deliver. This was
evidenced by numerous awards our brands won for
service and value as we delivered our biggest year
of growth since merger, adding more than 300,000
net mobile subscribers.

Our fixed broadband business also continues to
offer a great range of products and services across
our portfolio of access technologies, including the
NBN, fixed wireless over our own mobile network,
and fixed line services via our Vision Network
wholesale broadband business. The number of
customers taking up a great value alternative to the
NBN via our fixed wireless services more than
doubled in 2022, to 171,000.

In our Enterprise and Government division, we
delivered major customer wins with a total contract
value of $150 million during the year, highlights of
which included Hungry Jacks, Lifeline, Freedom
Furniture, and a major mobile private network
contract with mining company Yancoal Australia.

These customer wins reflect the dedication of our
Enterprise and Government business, significant
growth in Fast Fibre offering, and our growing
reputation to deliver robust, reliable and fast
connectivity services that businesses value. We re-
launched our wholesale residential access business
as Vision Network, which also became the first
major telco in Australia to offer G.Fast technology
across fibre-to-the-building (FTTB) and fibre to the
node (FTTN) technologies.

In networks and technology, we continued to
launch new innovations into the market and to
grow our networks. In 2022, we upgraded more
than 1,000 sites to 5G, set new 5G speed records,
introduced energy saving initiatives in our mobile
network, and launched a 5G smart-farming system

in Tamworth, NSW, to automate the labour-
intensive practice of counting cattle.

Unlocking asset value

We continue to look for ways to achieve more
efficient asset utilisation across our network and to
unlock additional value in our business.

In December, we announced a strategic review of
growth options for our Vision Network wholesale
residential access business – consistent with our
continued consideration of the optimal operating
and capital structures to support the growth and
success of our business. This follows the
completion of the sale and lease-back of our
passive mobile tower and rooftop assets in July
2022 to OMERS, generating net cash proceeds of
$892 million, which we used to reduce our levels of
bank debt and lower our volume of handset
receivables financing activity.

2023 outlook

As we move into 2023, TPG Telecom is well-
positioned to execute on its strategic initiatives, to
grow and to deliver improving returns for
shareholders. Fast, reliable and secure
telecommunication services are essential for our
always-on, connected society. At TPG Telecom, we
remain committed to delivering great products,
value and service to our customers.

Assuming no material change in operating
conditions, we expect EBITDA for 2023 to
be between $1,850 million and $1,950 million,
excluding material one-offs and transformation
costs.1

I thank all the dedicated people at TPG Telecom
who continue to work to achieve our strategic
goals while also making our organisation a great
place to work. I also thank our customers and
shareholders for their continued support and
interest in our company. We look forward to
keeping you up to date with our progress
throughout the year.

Iñaki Berroeta
Chief Executive Officer and Managing Director

1 Assuming no material change in operating condition, EBITDA guidance excludes potential material one-offs, such as any impacts or benefits from the
regional network sharing arrangement (MOCN) (subject to review by the Australian Competition Tribunal), transformation costs, mergers and
acquisitions, disposals, impairments, spectrum and such other items as determined by the Board and management.

Page 3 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Business strategy

Strategic ambition

TPG Telecom’s strategic ambition is to be Australia’s best telco for customers, shareholders, our people
and the community.

Our three guiding principles are: Integrate and Simplify, Win Smart, and Maximise our Potential.

These guiding principles shape our strategy and guide the prioritisation of strategic initiatives and areas of

focus throughout the business, as illustrated in the diagrams below.

Our strategic ambition to be Australia’s best telco for customers, shareholders, our people
and the community is supported by three guiding principles…

Integrate and Simplify

Win Smart

Maximise our Potential

Making the experiences of
our customers easier while
streamlining our products
and systems

Delivering targeted
growth, focusing on the
strengths of our
infrastructure, brands
and people

Investing in our people
and capabilities to
achieve our ambition to
be Australia’s best telco

Our ambition and guiding principles shape our strategic initiatives…

Strategic initiative

FY22 achievements

FY23 focus

Returned to strong subscriber growth

Implement simplified refreshed pricing plans

Grow Consumer Mobile service
revenue

Drive Consumer Fixed profitability

Accelerate cross-selling

Grow in Enterprise and Government

Unlock value in Wholesale

Consolidate customer platforms and
journeys

Improve customer experience

NBN re-pricing; doubled Fixed Wireless
subscribers
20% growth in Vodafone fixed base; 7%
growth in iiNet/TPG mobile base
$150m new sales; strong growth in Fast
Fibre
Launched of Vision Network and MVNE
platform
Rationalisation of contact centre software
platforms
Streamlined payment gateways from three
to one

Simplify technology landscape

Decommissioned 11 legacy IT systems

Achieve national 5G coverage
Embed capital allocation framework

Commissioned 1,000+ additional 5G sites
Tower assets sale enabled debt reduction

Optimise margin profile across Fixed
products

Leverage refocused brand proposition

Grow share of connectivity with Fast Fibre and
Enterprise Mobility

Complete Vision Network strategic review

Optimise customer support operating model

Simplify website and enhance self-service
tools
Accelerate modernisation; remove 30+ IT
systems
Surpass 3,000 5G sites, implement MOCN
Drive capital efficiency to best and highest use

Page 4 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Financial performance

Key financial metrics

Service revenue

Service revenue was $4,439 million, an increase
of $67 million or 1.5% compared to FY21 ($4,372
million). This increase reflected a return to
positive customer growth following a period of
market uncertainty arising from the impacts of the
COVID-19 pandemic and telecommunications
industry factors.

Service revenue bridge ($m)

4,372

(6)

restructuring costs. These costs included
redundancy costs, as well as investment in
more modern, agile and scalable systems and
business processes.

Excluding restructuring costs, operating expenses
were $12 million or 1.1% lower, reflecting
organisational simplification and lower network
rental costs achieved following the merger. This
was offset in part by higher electricity costs from
the ongoing upgrade of the 5G network, and
increased marketing spend.

4,439

EBITDA bridge ($m)

1,793

402

2,135

(60)

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Earnings before interest, tax, depreciation and
amortisation (EBITDA) was $2,135 million, an
increase of $408 million or 23.6% compared to
FY21 ($1,727 million). EBITDA included a gain of
$402 million from the sale of a portfolio of passive
tower and rooftop infrastructure (tower assets) to
OMERS Infrastructure Management in July 2022
and restructuring costs of $60 million. Excluding
these non-recurring items, EBITDA was
$1,793 million, up 3.8% compared to FY21,
reflecting service revenue growth and the delivery
of cost synergies from the merger of Vodafone
Hutchison Australia and TPG Corporation.

Cost of telecommunication services was
$1,636 million, a decrease of $19 million or 1.1%
compared to FY21 ($1,655 million). This decrease
reflected network operating synergies achieved
since the merger as well as a stabilisation of NBN
wholesale costs in the second half as the Group
transitioned customers from NBN services to
Fixed Wireless services.

Operating expenses were $1,108 million, an
increase of $48 million or 4.5% compared to FY21
($1,060 million), including $60 million of

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Net profit after tax (NPAT) was $513 million, an
increase of $400 million compared to FY21
($113 million). This translated to earnings per
share of 27.6 cents compared to 6.1 cents in
FY21. The increase was primarily (21.6 cents) due
to the gain on the tower assets sale.

NPAT excluding the gain on the tower assets sale,
and customer base amortisation, was
$222 million, a decrease of $3 million or 1.3%
compared to FY21 ($225 million). This decrease
was due to higher net financing costs, which were
$117 million higher in the second half of 2022
compared to the first half of 2022 ($70 million),
largely due to higher market interest rates.

Adjusted NPAT for the purpose of dividend
calculation was $646 million, an increase of
$59 million or 10.1% compared to FY21
($587 million).

Page 5 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Financial performance continued
Operating cash flow

Operating cash flow was $1,251 million, a
decrease of $371 million compared to FY21
($1,622 million). The largest driver of this
decrease was a negative working capital
movement of $265 million as the Group opted to
reduce its use of handset receivables financing
and instead fund this activity with borrowing
capacity freed up following the tower assets sale.
The handset receivable financing balance was
$543 million at 31 December 2022. Other
negative working capital movement was driven by
higher inventories, increased prepayments and
reduced trade creditors.

Capital expenditure

Capital expenditure (excluding spectrum
payments) was $961 million, an increase of $135
million compared to FY21 ($826 million). This was
primarily driven by payment for plant, property
and equipment related to the ongoing upgrade of
the Group’s mobile network infrastructure to 5G.

Spectrum payments were $31 million, a decrease
of $60 million compared to FY21 ($91 million).
The Group acquired 200Mhz of millimetre wave
spectrum during the period.

Operating Free Cash Flow

Operating Free Cash Flow (OFCF) was
$92 million, a decrease of $504 million compared
to FY21 ($596 million). This reflected the lower
operating cash flow and higher capital
expenditure compared to FY21. OFCF excluding
the reduction in handset receivables financing
was $357 million, a decrease of $239 million.

Reconciliation to OFCF ($m)

1,251

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Dividend

The TPG Telecom Board has declared a final
dividend of 9.0 cents per share to be paid on 13
April 2023, bringing total dividends for the year to
18.0 cents per share, an increase of 1.5 cents per
share or 9.1% compared to FY21 (16.5 cents per
share).

Dividends paid in FY22 were $325 million, an
increase of $37 million compared to FY21
($288 million). This reflected the FY21 final
dividend of 8.5 cents per share paid in April 2022
and the FY22 interim dividend of 9.0 cents per
share paid in September 2022.

Dividends per share (cents)

8.0

8.5

9.0

FY21
interim

FY21
final

FY22
interim

FY22
final

Net debt

Net borrowings (borrowings less cash) was
$3,576 million at 31 December 2022, a decrease
of $512 million compared to 31 December 2021
($4,088 million).

Gross borrowings were $3,690 million at
31 December 2022, a decrease of $600 million
compared to 31 December 2021 ($4,290 million).

The reduction in borrowings reflected the use of
proceeds from the tower assets sale to pay down
bank debt facilities.

Debt maturity profile as at 31 December ($m)

450

1,520

960

1,720

FY22

FY23

FY24

FY25

FY26

Undrawn committed debt facilities

Bilateral revolving facility - drawn

Syndicated term facilities - drawn

Page 6 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Financial performance continued

Business segment and product highlights

Enterprise, Government and Wholesale segment

Consumer segment

Consumer mobile service revenue was
$1,796 million, an increase of $38 million or 2.2%
compared to FY21 ($1,758 million). This reflected
a higher number of subscribers during the period,
driven by improvements in operating conditions,
notably the return of international travel to greater
than 60% compared to December 20191 following
the end of COVID-19 lockdowns.

Fixed service revenue was $1,738 million, an
increase of $21 million or 1.2% compared to FY21
($1,717 million). This reflected a positive
contribution from an increase in Fixed Wireless
subscribers and modest price increases for some
NBN plans in the third quarter, more than
offsetting the impact of the final stages of
migration away from legacy DSL services.

Handset and hardware margins decreased,
reflecting higher logistics costs and commercial
initiatives to attract customers in a highly
competitive market.

Consumer gross margin bridge ($m)

Enterprise, Government and Wholesale revenue
was $998 million, an increase of $12 million or
1.2% compared to FY21 ($986 million). In the
Enterprise and Government division, service
revenue growth was primarily driven by growth in
mobile connectivity services with relatively stable
revenues in fixed services.

The fixed performance included solid growth in
TPG Telecom’s Fast Fibre and NBN Enterprise
Ethernet services, offset by lower revenue from
legacy products.

In the Wholesale division, revenue slightly
decreased reflecting the focus on completion of
the functional separation of the Vision Network
wholesale residential access business (revenue
for which was reported in the Consumer segment
in 2022, but will be reported within Enterprise,
Government and Wholesale from 2023).

Enterprise, Government and Wholesale gross
margin bridge ($m)

(1)

720

(25)

2,090

2,046

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1 Australian Bureau of Statistics, Overseas Arrivals and Departures, Australia December 2022

Page 7 | TPG Telecom Annual Report 2022

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Directors’ report
Operating and financial review

Financial performance continued
Mobile subscriber numbers and ARPU

TPG Telecom added 300,000 net Mobile
subscribers during 2022 as market growth
returned due to the easing of COVID-19
restrictions on international travel.

The Vodafone brand drove growth in both
Postpaid and Prepaid, while all other brands also
delivered an increase in subscribers.

Average Revenue Per User (ARPU) for Mobile was
$32.4 per month, an increase of $0.6 per month
or 1.9% compared to December 2021 ($31.8 per
month), primarily reflecting higher levels of
international roaming. This was partially offset by
a rate change for interconnection revenue with
other mobile carriers, which was more than offset
in gross margin by lower charges.

Postpaid ARPU was $42.7 per month, an increase
of $1.3 or 3.1%. Prepaid ARPU was $19.6 per
month, which was broadly flat over the period.

Mobile ARPU by subscriber type ($)1

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5
.
5
1

7
.
2
4

4
.
2
3

6
9
1

2
.
5
1

J U N - 2 1

D E C - 2 1

J U N - 2 2

D E C - 2 2

Overall mobile

Postpaid

Prepaid

Data sims

Mobile subscribers by brands (000’s)2

3
9
1
,
3

6
9
8

9
1
6

7
5
3

8
4
1
,
3

1
0
8

4
4
6

2
7
3

8
2
2
3

4
6
1
,
3

3
4
8

5
9
6

9
6
3

3
9
8

8
4
7

8
9
3

J U N - 2 1

D E C - 2 1

J U N - 2 2

D E C - 2 2

Vodafone - Postpaid
Kogan, Lebara, felix

Vodafone - Prepaid
TPG, iiNet

Total fixed subscribers and AMPU

Fixed subscribers were steady at 2.2 million
compared to FY21 (2.2 million), as the Group
focused on transitioning NBN subscribers to
Fixed Wireless where appropriate, and as legacy
ADSL subscribers migrated to other products.

Fixed Wireless subscribers were 171,000 at 31
December 2022, up from 80,000 at 31 December
2021. The on-net fixed line subscriber base
remained steady at 135,000.

Average Margin Per User (AMPU) across all Fixed
technologies was $24.2 per month, an increase of
$1.8 or 8.0%, primarily reflecting Fixed Wireless
growth and modest price increases on NBN plans.

Overall fixed subscribers (000’s)

0
5
9
,
1

6
3
9
,
1

4
3
9
,
1

5
3
1

2
9

9
1

5
3
1

0
8

1
7

5
3
1

3
1
1

1
4

7
7
8
,
1

1
7
1

5
3
1

5
3

D E C - 2 1

J U N - 2 1
NBN
On-net fixed line

J U N - 2 2

D E C - 2 2

Fixed Wireless
ADSL and other

Fixed ARPU and AMPU by technology type

3
.
5
6

4
.
9
5

7
.
4
6

8
.
8
5

5
.
3
3

7
.
1
2

4
.
4
6

6
.
7
5

8
.
2
4

1
.
1
2

8
.
6
6

1
.
8
5

6
.
2
4

2
.
4
2

4
.
1
4

4
.
2
2

J U N - 2 1

D E C - 2 1

J U N - 2 2

D E C - 2 2

NBN ARPU
Fixed Wireless ARPU

On-net fixed line ARPU
Overall fixed AMPU

1 In all periods, Prepaid ARPU restated to reflect removal of approximately 70,000 inactive customers on long-dated plans from Lebara base to align with
classification in other TPG Telecom brands
2 Vodafone mobile subscribers include data SIM only customers

Page 8 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Summary of financial position

Consolidated Income Statement overview

Depreciation and amortisation

Revenue

Service revenue

Handset and hardware revenue

Total revenue

Other income

Cost of telecommunication
services

Cost of handsets and hardware
sold

Technology costs

Employee benefits expense

Other operating expenses

EBITDA

2022

2021
Restated1
$m

4,439

976

4,372

920

5,415

5,292

438

(1,636)

(1,655)

(974)

(363)

(377)

(368)

(891)

(358)

(377)

(325)

Depreciation and amortisation expense was
$1,389 million, a decrease of $26 million or 1.8%
compared to FY21 ($1,415 million). This reflected
lower depreciation expense on the tower assets
and associated right-of-use leases following the
sale to OMERS.

Net financing costs

Net financing costs were $187 million, an increase
of $38 million or 25.5% compared to FY21
($149 million). The increase reflected a
substantial increase in market interest rates
impacting interest expense in the second half of
2022, as well as an increase in lease interest
expense due to a part-year impact from the sale
of tower assets.

2,135

1,727

Income tax expense

Depreciation and amortisation

(1,389)

(1,415)

Operating profit

Net financing costs

Profit/(Loss) before tax

Income tax (expense)/benefit

Profit/(loss) after tax

Attributable to:

Owners of the Company

Non-controlling interest

746

(187)

559

(46)

513

Earnings per share (cents)

27.6

312

(149)

163

(50)

113

6.1

For detailed discussion on service revenue, cost
of telecommunication Services, operating
expense and EBITDA for the Group, please refer
to Key financial metrics section on page 5.

Income tax expense of $46 million was recorded
in the period, compared to an expense of
$50 million in FY21. This included an income tax
credit of $140 million from the tower assets sale,
that was driven by previously unrecognised
capital gains tax losses and deferred tax assets
arising from the initial recognition of the right of
use assets and lease liabilities for the lease-back
arrangement.

Excluding such adjustments, TPG’s nominal
income tax expense represents the Group’s profit
before tax for the period multiplied by the
applicable corporate tax rate of 30% (see note 6
(b) on page 80).

1 Refer to Note 2(l) of the financial report for details of restatement.

Page 9 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Summary of financial position continued

Consolidated Balance Sheet overview

Cash and cash equivalents

2021
Restated1
$m

Cash and cash equivalents were $114 million at 31
December 2022, a decrease of $88 million
compared to 31 December 2021 ($202million).

Cash and cash equivalents

Trade and other receivables

Inventories

Prepayments and other assets

Total current assets

Property, plant and equipment

Right-of-use assets

Spectrum licences

2022

114

681

155

1,033

3,580

1,527

2,007

202

476

833

3,401

1,294

2,251

Other intangible assets

10,656

10,893

Deferred tax assets

Other non-current assets

183

380

261

231

Total non-current assets

18,333

18,331

Trade and other payables

1,185

1,118

Contract liabilities

Lease liabilities

Other current liabilities

Total current liabilities

Borrowings

Lease liabilities

Other non-current liabilities

283

171

281

183

1,732

1,643

3,690

1,872

172

4,290

1,359

152

Total non-current liabilities

5,734

5,801

Net assets

11,900

11,720

Trade and other receivables

Current trade and other receivables were
$681 million at 31 December 2022, an increase of
$205 million compared to 31 December 2021
($476 million). This was driven by an increase in
trade and other receivables arising from a
reduced volume of handset receivables sale
activity in the period.

Property, plant and equipment

Property, plant and equipment (PP&E) was
$3,580 million at 31 December 2022, an increase
of $179 million compared to 31 December 2021
($3,401 million). This reflected additional network
infrastructure commissioned, offset by assets
transferred to OMERS following the tower
assets sale.

Right-of-use assets and lease liabilities

Right-of-use assets were $1,527 million at
31 December 2022, an increase of $233 million
compared to 31 December 2021 ($1,294 million).
Current and non-current lease liabilities were
$1,965 million, an increase of $545 million
compared to 31 December 2021 ($1,420 million).
These increases were primarily the result of the
tower assets sale.

Contributed equity

18,399

Spectrum licences

Reserves and accumulated
losses

Total equity

(6,499)

(6,679)

11,900

11,720

For detailed discussion on borrowing for the
Group, please refer to financial position highlights
section on page 6.

The net book value of spectrum licences was
$2,007 million at 31 December 2022, a decrease
of $244 million compared to 31 December 2021
($2,251 million). During the period, 200MHz of
millimetre wave spectrum in Melbourne, Sydney
and Perth was acquired from Dense Air for
$27 million.

Other intangible assets

Other intangible assets (excluding spectrum
licenses) were $10,656 million at 31 December
2022, a decrease of $237 million compared to
31 December 2021 ($10,893 million).

1 Refer to Note 2(l) of the financial report for details of restatement.

Page 10 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Summary of financial position continued

Consolidated Cash Flow Statement overview

Lease payments

Operating cash flow

Capital expenditure

Spectrum payments

Net cash acquired through the
merger

Disposal of subsidiary
(net of cash disposed)

Receipts of tower sale

Loan repayment from Tech 2

Interest received

Net cash flow before
financing activities

Net (repayment)/drawdown of
borrowings

Lease repayments

Net finance costs paid

Payments for Shares acquired
by TPG Telecom Employee
incentive Plan Trust

Dividends paid

2022

2021
Restated1
$m

1,251

1,622

(961)

(31)

(826)

(91)

Lease payments (principal element) for FY22 were
$123 million, a decrease of $16 million compared
to FY21 ($139 million). The decrease in FY22 was
due to non-recurring upfront fees paid in FY21 for
mobile network infrastructure.

Financing costs

892

Debt financing costs for FY22 were $180 million,
an increase of $22 million compared to FY21
($158 million). This reflected the increase in
market interest rates throughout 2022, as well as
higher lease interest payments following the sale
of the tower assets.

Net drawdown of borrowings

1,154

707

(600)

(123)

(180)

(40)

(139)

(158)

Net drawdown of borrowings for FY22 reflected a
net repayment of $600 million, an increase of
$560 million compared to FY21 ($40 million net
repayment). This reflects the repayment of TPG
Telecom’s term debt facility utilising the proceeds
from the sale of tower assets.

(14)

(325)

(288)

Net cash flow

(88)

For detailed discussion on operating cash flow,
capital expenditure, spectrum payments and
dividend paid for the Group, please refer to the
key financial metrics and financial position
highlights page 6.

1 Refer to Note 2(l) of the financial report for details of restatement.

Page 11 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Strategic risk management

KEY MITIGATIONS

CURRENT FOCUS

Network and technology resilience: network or technology platform outages caused by internal or external events
could result in poor customer experience and financial loss.

Robust network monitoring and operational incident
and escalation processes with disaster recovery plans
in place.

– Investment in Resilience Framework
– Decommissioning of legacy systems
– Rollout of 5G to achieve national coverage

Customer growth and experience: challenging market conditions including strong competition, fast-evolving digital
experience expectations, rapid technological innovation and high cost of network investment could impact market
share and margins.

Execution of key strategic initiatives for Consumer,
and Enterprise, Government & Wholesale.

– Network expansion strategy through 5G rollout and
proposed regional network sharing deal with Telstra

– Investment in improving customers’ digital experience

Cyber security and data protection: cyber incidents have the potential to cause significant business interruption or
compromise data privacy resulting in reputational damage, regulatory scrutiny and financial loss.

Continued roll out of Technology Security Framework
post-merger to improve security controls.

– Technology Security Roadmap to deliver continued uplift

in capability

– Alignment with ISO27001
– Uplift in information security controls

Legal and regulatory environment: highly regulated industry with complex and evolving legal requirements and
subject to a range of regulation from consumer service delivery through to network security.

Dedicated legal and regulatory experts to advise on
major business transactions and operations.

– Increasing investment and focus on maturing compliance

framework and capabilities

Health, safety and wellbeing: operating safely across our business operations and maintaining the health and
wellbeing of all employees is essential to reduce the risk of serious injuries, fatalities, costs and reputational
damage.

Health and safety management system including
procedures, training, incident reporting and
management.

– Quarterly cadence focussing on different aspects of

employee wellbeing

– Safety training modules to raise awareness and embed a

positive work health and safety culture

Capability and culture: attracting and maintaining a diverse and engaged workforce with the right skills, capabilities
and experience.

‘Spirit of TPG Telecom’ program to embed our
purpose and values.

– Development of Talent Strategy and pipeline to improve

talent identification and retention
– Investment in leadership capabilities

Climate change and sustainability: social and environmental responsibility including physical and transition risks
related to climate change

Implementation of Sustainability Strategy.

– Greenhouse gas (GHG) emissions reductions targets set
– Detailed assessment of climate-related risks and

opportunities align with TCFD framework

Macroeconomic and financial markets: exposure to adverse macroeconomic and market conditions including rising
interest rates, inflation and foreign exchange rate fluctuations could reduce consumer spending or increase costs.

Continuous monitoring of exposure to interest rate
and hedging strategies.

– Reduction in net debt using tower assets sale proceeds
– Increase in interest rate risk management activity

Page 12 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Sustainability

Governance

The highest level of responsibility for sustainability
sits with the TPG Telecom Board, which is
accountable for overseeing and monitoring
environmental, social and governance (ESG) risks
and opportunities, as well as the implementation
of the Sustainability Strategy.

The Board is supported by the Audit and Risk
Committee (ARC) and the Governance,
Remuneration and Nomination Committee
(GRNC).

The Sustainability Council, which consists of
senior leaders from various areas across the
organisation, is accountable for overseeing and
monitoring the execution and delivery of the
Sustainability Strategy. It includes initiatives
focused on managing material ESG issues,
including climate change, as they pertain to the
organisation.

The Head of Sustainability and the Group
Executive Legal & External Affairs report regularly
to the Sustainability Council, the ARC and the
Board on sustainability matters, including those
associated with climate change.

Refer to our 2022 Corporate Governance
Statement for additional detail.

Strategy

The TPG Telecom Sustainability Strategy identifies
four key areas where we are well placed to make
a meaningful difference: Customer Wellbeing,
Inclusion and Belonging, Environmental
Responsibility and Digital Economy. These are
underpinned by a set of fundamental, responsible
business practices. Together, these represent our
framework for creating a responsible and
sustainable business.

We recognise that climate change may have an
impact across all areas of our organisation, which
is why understanding and managing risks related
to climate change forms a key component of the
environmental responsibility area of the
Sustainability Strategy.

1 Includes Kogan, Lebara and felix brands

This year we developed a multi-year, forward-
looking climate risk roadmap and we are pursuing
multiple initiatives to support climate mitigation
actions.

Risk management

The Enterprise Risk function is responsible for
ensuring the successful implementation of the risk
management framework as overseen by the
Executive Leadership Team (ELT) and the ARC.
Regular reporting is provided to the ELT and ARC
on the enterprise risk profile, which outlines the
material risks to the organisation and on the Key
Risk Indicators which measure performance within
the set risk appetite.

Refer to the ‘Strategic risks management’ section
(page 12) of this report and our 2022 Corporate
Governance Statement for additional detail.

General sustainability-related metrics and
targets

Customer Wellbeing

We strive to put customers at the heart of
everything we do. A key metric that we hold
ourselves accountable to is the quarterly
Complaints in Context report produced by
Communications Alliance Ltd.

TIO quarterly complaints per 10,000 services.

CATEGORY

Vodafone1

iiNet

TPG

Industry average

MAR 22 JUN 22 SEP 22 DEC 22

2.7

5.1

4.3

4.8

2.5

3.9

3.4

3.9

2.4

3.3

2.6

3.6

2.5

3.9

2.8

3.8

We are proud to continue to see strong results for
the complaints rates of our major brands iiNet,
TPG and Vodafone.

Inclusion and Belonging

Our vision is to be an employer of choice for
women. Our aim is to increase female
representation across leadership, STEM functions
and all employees in Australia.

Page 13 | TPG Telecom Annual Report 2022

Directors’ report
Operating and financial review

Sustainability continued
Australia-based employee gender diversity

CATEGORY

TOTAL WOMEN

Employees

Leadership positions

Strategic Leadership
Team

2,961

549

195

995

168

WOMEN
(%)

33.6

30.6

37.4

STEM positions

1,054

167

15.8

Note: Numbers are based on employee headcount

In addition, we achieved a negative one per cent
pay equity gap in 2022, meaning that an analysis
of our Australian workforce (excluding our CEO)
found that women are remunerated on average
higher than men, for equivalent roles.

Digital Economy: rollout of 5G

We continue to put a strong focus on the rollout
of our 5G network. In 2022, we achieved our goal
of 95% population coverage by our 5G network in
12 of Australia’s largest cities and regions.

5G rollout progress

CATEGORY

5G sites

FY21

1,015

FY22

Total

1,040

2,055

The TPG Telecom Foundation drives our goal to
support the use of technology to create
opportunities to improve the health, wellbeing
and education of Australian communities in need.
In 2022, we established multi-year partnerships
with seven charities and distributed grants of over
$1.8 million.

2022 TPG Telecom Foundation contributions

CATEGORY OF SPEND

Cash donations - grants to
Foundation partners

Cash donations - matched giving

Management costs

Total

AMOUNT ($)

1,889,250

53,352

65,746

2,008,348

Climate-related metrics and targets

Energy and greenhouse gas emissions reporting

In 2022, we completed the mapping of our Scope
1, 2 and 3 greenhouse gas (GHG) emissions for
the first time, enabling us to set science-based
emissions reduction targets.

Energy (TJ) and GHG emissions (ktCO2-e)

CATEGORY

Energy consumed

Scope 1 emissions

Scope 2 emissions
(market-based3)

Scope 1 and 2 emissions
(market-based)

20211

20222

1,237

1,291

4.8

2.8

224.4

224.8

229.2

227.6

Scope 3 emissions

1,327.9

N/A

Emissions reduction targets

We used the 2021 emissions footprint as our
baseline in developing our emissions reduction
targets and submitting them to the Science Based
Target initiative for validation. TPG Telecom
commits to the following:

Near-term targets:
• reduce absolute scope 1 and 2 greenhouse

gas (GHG) emissions 95% by 2030 from a 2021
base year;

• reduce absolute scope 3 GHG emissions from
purchased goods and services, use of sold
products, fuel and energy related activities,
and upstream leased assets 30% by 2030 from
a 2021 base year.

Long-term target and net-zero target:
• reduce absolute scope 1, 2 and 3 GHG

emissions 90% by 2050 from a 2021 base year.
• reach net-zero GHG emissions across the value

chain by 2050 from a 2021 base year.

Further information can be found in our 2022
Sustainability Report and our Climate Change
Report at tpgtelecom.com.au/sustainability.

1 Figures re-stated from 2021 Sustainability Report as a result of a detailed internal review that resulted in a more complete and accurate reporting
approach.
2 2022 Scope 3 emissions have not been reported, as the complete data set was not available at the time of publication.
3 To support our science-based emissions reduction targets, we report our Scope 2 emissions using the market-based method as our primary method.
Our location based Scope 1 and 2 emissions are 259.6 for 2021 and 268.5 for 2022.

Page 14 | TPG Telecom Annual Report 2022

Directorships of other listed companies in the past
three years:

Hutchison Telecommunications (Australia) Limited -
1999 to current.

Special Responsibilities: Chairman of the Board.

Iñaki Berroeta
Chief Executive Officer and Managing Director

Iñaki Berroeta is the CEO and Managing Director of
TPG Telecom and was CEO of Vodafone Hutchison
Australia from 2014 to 2020. A 26-year veteran of
the telecommunications industry, Mr Berroeta
previously served as CEO of both Vodafone
Romania and Vodafone Malta, and held various
operational roles at Vodafone Spain, Global Star
USA, AirTouch International Inc. (USA) and Airtile
Moviles (Spain).

Mr Berroeta holds a Master of Science in
Telecommunications from Bilbao Superior School
of Telecommunications Engineering, Spain, and a
Master of Business Administration from Henley
Management College, UK.

Mr Berroeta’s appointment to the Board
commenced on 29 June 2020.

Special Responsibilities: Chief Executive Officer
and Managing Director

Directors’ report
Board of Directors

Details of Directors of the Company who held
office at any time during or since the end of the
financial year are set out below:

Current

The following are the Directors who held office at
31 December 2022.

Fok Kin Ning, Canning
Chairman

Fok Kin Ning, Canning has been a Director and
Chairman of TPG Telecom since 2001 and March
2021 respectively. He has been a Director of
Hutchison Telecommunications (Australia) Limited
since 1999. Mr Fok has been an Executive Director
and Group Co-Managing Director of CK Hutchison
Holdings Limited since 2015. He has been a
Director of Cheung Kong (Holdings) Limited and
Hutchison Whampoa Limited since 1985 and 1984
respectively, both of which were previously listed
on the Stock Exchange of Hong Kong Limited and
became wholly owned subsidiaries of CK Hutchison
Holdings Limited in 2015. He has been Chairman
and a Non-Executive Director of Hutchison
Telecommunications Hong Kong Holdings Limited
since 2009 and Hutchison Port Holdings
Management Pte. Limited as the Trustee-Manager
of Hutchison Port Holdings Trust since 2011, an
Executive Director since 1985 and Chairman since
2005 of Power Assets Holdings Limited, and
Chairman and an Executive Director of HK Electric
Investments Manager Limited as the Trustee-
Manager of HK Electric Investments and HK Electric
Investments Limited since 2013. He has also been
an Executive Director and Deputy Chairman of CK
Infrastructure Holdings Limited since 1997, a
Director of Cenovus Energy Inc. since January
2021 and Deputy President Commissioner of PT
Indosat Tbk since January 2022. He was a Co-
Chairman from 2000 to 2020 and was a Director
from 2000 to March 2021 of Husky Energy Inc.
(delisted on 5 January 2021 following its
combination with Cenovus Energy Inc.).

He holds a Bachelor of Arts degree and a Diploma
in Financial Management, and is a Fellow of
Chartered Accountants Australia and New Zealand.

Page 15 | TPG Telecom Annual Report 2022

Directors’ report
Board of Directors continued

Pierre Klotz
Non-Executive Director

Diego Massidda
Non-Executive Director

Pierre Klotz is the Vodafone Group plc (‘Vodafone’)
Group Corporate Finance Director. He joined
Vodafone in July 2011 and is responsible for the
Vodafone Group’s Mergers & Acquisitions and
Treasury related activities.

Previously, Mr Klotz held a number of senior
executive positions at UBS Investment Bank and at
HSBC Investment Bank.

Diego Massidda is CEO of Vodafone Partner
Markets and Carrier Services, and a Director of
Vodafone Idea Limited.

Mr Massidda joined Vodafone in 2007 as Group
Director of Broadband and Online, and
subsequently he was Group Director of Video and
Connected Home. From 2011 to 2016, he served
as CEO of Vodafone Hungary.

Mr Klotz holds a Master of Science in Business
Administration from Gothenburg School of
Economics and Commercial Law.

Mr Klotz’s appointment to the Board commenced
on 12 May 2020.

Special Responsibilities: Member of the Audit and
Risk Committee from 1 September 2021.

Prior to joining Vodafone, Mr Massidda was CEO of
the ISP Tiscali in South Africa and France, and of
Telecom Italia wireline operations in France. He
also spent 6 years with McKinsey & Company
earlier in his career.

Mr Massidda holds a degree in Civil Engineering
from the Università di Cagliari, Italy, and a Master’s
in business administration from INSEAD, France.

Mr Massidda’s appointment to the Board
commenced on 12 May 2020.

Special Responsibilities: Member of the
Governance Remuneration and Nomination
Committee.

Page 16 | TPG Telecom Annual Report 2022

Directors’ report
Board of Directors continued

Robert Millner
Non-Executive Director

Antony Moffatt
Non-Executive Director

Antony Moffatt (Tony) is a lawyer with over 30
years’ experience, practising in corporate,
commercial and telecommunications law. After five
years as a senior lawyer in an international law firm
in Singapore, Mr Moffatt became General Counsel
and Company Secretary for a start-up
telecommunications business which was acquired
by SP Telemedia Limited in 2005. He was then
appointed General Counsel for the company
formerly named TPG Telecom Limited (ASX:TPM)
in 2008 until its merger with Vodafone Hutchison
Australia Pty Ltd in 2020. In August 2020, Mr
Moffatt became Company Secretary for the merged
group. In addition, Mr Moffatt was Company
Secretary for a large privately owned Australian
winery from 2004 to 2008 and was from time to
time a director on a variety of TPG Telecom
Limited subsidiaries and Comms Alliance. Mr
Moffatt was a member of the key management
personnel of TPG Telecom Limited (ASX:TPM) and
played a significant role in its development,
including the many corporate and large commercial
transactions undertaken by that company. He is the
Company Secretary for Tuas Limited.

Mr Moffatt holds a Bachelor of Arts and Laws from
the University of New South Wales.

Mr Moffatt’s appointment to the Board commenced
on 26 March 2021.

Robert Millner served as a Non-Executive Director
of TPG Corporation from 2000 until the merger
with the Company in 2020, and was the Chairman
of TPG Corporation from 2000 until 2008.

Mr Millner brings to the Board broad corporate,
investment, portfolio and asset management
experience gained across diverse sectors including
telecommunications, mining, manufacturing, health,
finance, energy industrial and property investment
in Australia and overseas.

Mr Millner has over 30 years’ experience as a
Company Director with an extensive understanding
of governance and compliance, reporting, media
and investor relations.

Mr Millner holds directorships of the following
listed companies: Apex Healthcare Berhad
(Malaysia), Brickworks Limited, BKI Investment
Company Limited, Aeris Resources Limited, New
Hope Corporation Limited, Washington H. Soul
Pattinson and Company Limited and Tuas Limited.
He was also a former director of Australian
Pharmaceutical Industries Limited.

Mr Millner is a Fellow of the Australian Institute of
Company Directors.

Mr Millner’s appointment to the Board commenced
on 13 July 2020.

Directorship of other listed companies in the past
three years:

Brickworks Limited – 1997 to current, Washington
H. Soul Pattinson and Co. Ltd – 1984 to current,
Aeris Resources Limited – July 22 to current, New
Hope Corporation Ltd – 1995 to current, BKI
Investment Company Ltd – 2003 to current, Milton
Corporation Limited – 1998 to October 2021, Tuas
Limited – 2020 to current, Australian
Pharmaceutical Industries Ltd – 2000 to July 2020.

Page 17 | TPG Telecom Annual Report 2022

Directors’ report
Board of Directors continued

Dr Helen Nugent AC
Non-Executive Director

Frank Sixt
Non-Executive Director

Dr Nugent is Chairman of Ausgrid, the Order of
Australia Association Foundation and a Non-
Executive Director of IAG.

She has been a company director for over 20
years, and has over 40 years’ experience in the
financial services sector. This includes having been
Chairman of Veda Group, Funds SA, and Swiss Re
(Australia); and a Non-Executive Director of
Macquarie Group, Director of Strategy at Westpac
Banking Corporation, and a Partner at McKinsey &
Company.

She has also been Chairman of National Disability
Insurance Agency and Australian Rail Track
Corporation and a Non-Executive Director of Origin
Energy.

Dr Nugent has given back to the community in
education and the arts, having been Chancellor of
Bond University; President of Cranbrook School;
Chairman of the National Opera Review; Chairman
of the Major Performing Arts Inquiry; Chairman of
the National Portrait Gallery of Australia; and
Deputy Chairman of Opera Australia.

Dr Nugent is a Companion of the Order of Australia
(AC) and is a recipient of a Centenary Medal, as
well as holding an Honorary Doctorate in Business
from the University of Queensland and an Honorary
Doctorate from Bond University.

Dr Nugent holds a Bachelor of Arts (Hons) and
Doctorate of Philosophy from the University of
Queensland; and a MBA (Distinction) from the
Harvard Business School.

Dr Nugent joined the board of TPG Telecom as a
non-executive director in July 2020.

Directorship of other listed companies in the past
three years:

Insurance Australia Group (IAG) Limited –
December 2016 to current.

Special Responsibilities: Senior Independent
Director, Chairman of the Governance
Remuneration and Nomination Committee and
member of the Audit and Risk Committee

Frank John Sixt has been a Director of TPG
Telecom Limited since 2001. He has been a
Director and an Alternate Director to a Director of
Hutchison Telecommunications (Australia) Limited
since 1998 and 2008 respectively. Mr Sixt has been
an Executive Director, Group Finance Director and
Deputy Managing Director of CK Hutchison
Holdings Limited since 2015. Since 1991, Mr Sixt
has been a Director of Cheung Kong (Holdings)
Limited and Hutchison Whampoa Limited, both of
which were previously listed on the Stock
Exchange of Hong Kong Limited and became
wholly owned subsidiaries of CK Hutchison
Holdings Limited in 2015. He has been Chairman
and a Non-Executive Director of TOM Group
Limited since 1999 and an Executive Director of
CK Infrastructure Holdings Limited since 1996. He
has also been an Alternate Director to a Director of
HK Electric Investments Manager Limited as the
Trustee-Manager of HK Electric Investments and HK
Electric Investments Limited since 2015 and a
Director of Cenovus Energy Inc. since January
2021. He has also been a Commissioner of PT
Indosat Tbk since January 2022. Mr Sixt was a
Director of Husky Energy Inc. (delisted on 5
January 2021 following its combination with
Cenovus Energy Inc.) from 2000 to March 2021.

He has almost four decades of legal, global finance
and risk management experience, and possesses
deep expertise in overseeing financial reporting
system, risk management and internal control
systems as well as sustainability issues and related
risks.

Mr Sixt holds a Master’s degree in Arts and a
Bachelor’s degree in Civil Law, and is a Member of
the Bar and of the Law Society of the Provinces of
Québec and Ontario, Canada.

Directorship of other listed companies in the past
three years:

Hutchison Telecommunications (Australia) Limited -
1998 to current.

Special Responsibilities: Member of the
Governance Remuneration and Nomination
Committee and member of the Audit and Risk
Committee until 1 September 2022.

Page 18 | TPG Telecom Annual Report 2022

Directors’ report
Board of Directors continued

Arlene Tansey
Non-Executive Director

Jack Teoh
Non-Executive Director

Mr Teoh is a businessman involved in a range of
private companies, with particular experience in
finance and technology. Mr Teoh is a former
director of Tuas Limited, has been a director of Vita
Life Sciences Limited since September 2022 and is
also a director of Total Forms Pty Ltd, a private
software business.

Mr Teoh holds a Bachelor of Commerce from the
University of New South Wales.

Mr Teoh’s appointment to the Board commenced
on 26 March 2021.

Directorship of other listed companies in the past
three years:

Tuas Limited - July 2020 to July 2022,

Vita Life Sciences Limited – September 2022 to
current.

Former Directors

There were no director changes in 2022.

Arlene Tansey is currently a Non-Executive Director
of Aristocrat Leisure Limited, McMillan Shakespeare
Limited, Infrastructure NSW and Lend Lease Real
Estate Investments Limited. She is also a Board
Member of the Australian National Maritime
Museum Foundation and Council. She is a former
Non-Executive Director of WiseTech Global
Limited, Infrastructure NSW and Healius Limited.

Ms Tansey is a Member of Chief Executive Women
and the International Women’s Forum and a Fellow,
Board member and the NSW Division Director of
the Australian Institute of Company Directors.

She has a Juris Doctor (Law) from the University of
Southern California and an MBA in finance and
international business from New York University.

Ms Tansey has worked in commercial and
investment banking in Australia and the US. Her
expertise covers a variety of disciplines including
corporate advisory, M&A, commercial banking,
capital management and business turnaround.

Ms Tansey’s appointment to the Board
commenced on 13 July 2020.

Directorship of other listed companies in the past
three years:

Aristocrat Leisure Limited – July 2016 to current,
McMillan Shakespeare Limited – November 2022 –
current,

WiseTech Global Limited – June 2020 to November
2022,

Healius Limited – August 2012 to October 2020.

Special Responsibilities: Chairman of the Audit and
Risk Committee and Member of the Governance
Remuneration and Nomination Committee

Page 19 | TPG Telecom Annual Report 2022

Directors’ report
Board of Directors continued

Company Secretary

Directors’ shareholdings

Trent Czinner was appointed Company Secretary
of the Company on 26 March 2021. Mr Czinner
holds a Bachelor of Law and Administration from
the University of Newcastle, was admitted as a
Solicitor in New South Wales in 1995 and has a
Master of Business Administration from the
Australian Graduate School of Management. Mr
Czinner is also a Certified member of the
Governance Institute of Australia.

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
section 205G of the Corporations Act 2001, at the
date of this report is disclosed in the Remuneration
Report.

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 were as follows:

DIRECTOR

SCHEDULED BOARD
MEETINGS

UNSCHEDULED
BOARD MEETINGS1

AUDIT & RISK
COMMITTEE
MEETINGS

GOVERNANCE
REMUNERATION AND
NOMINATION
COMMITTEE
MEETINGS

Canning Fok

Iñaki Berroeta

Pierre Klotz2

Diego Massidda

Robert Millner

Antony Moffatt

Helen Nugent

Frank Sixt3

Arlene Tansey

Jack Teoh

NOTE:
A: Number of meetings held while a member.
B: Number of meetings attended.

–

1 TPG held one unscheduled Board meeting during the year called on short notice. Given the short notice, Mr Fok, Mr Sixt and Mr Teoh were unable to
attend.
2 Appointed as a member of the Audit & Risk Committee on 1 September 2022
3 Resigned as a member of the Audit & Risk Committee on 1 September 2022

Page 20 | TPG Telecom Annual Report 2022

Directors’ report
Other information

Principal activities

Likely developments

The OFR provides details relating to the
Company’s business strategies and prospects for
future financial years. This information in the OFR
is provided to assist with informed decision
making of shareholders.

Events subsequent to reporting date

Other than the matters described elsewhere, the
Directors are not aware of any matter or
circumstance that has arisen after the reporting
date that, in their opinion, has significantly
affected, or may significantly affect:

(i) the operations of the Company and of the

Group in future financial years, or

(ii) the results of those operations in future

financial years, or

(iii) the state of affairs of the Company and of the

Group in future financial years.

Corporate Governance

The Board of Directors and management of TPG
Telecom recognise the importance of, and are
committed to, achieving high corporate
governance standards. Our key Corporate
Governance materials including policies, code of
conduct and Board and Board Committee
Charters, can be found in the Corporate
Governance section of our website within the
Investor Relations section. In accordance with the
4th edition of the ASX Corporate Governance
Council’s Principles and Recommendations, the
Company’s Corporate Governance Statement, as
approved by the Board, is published and available
on the TPG Telecom website at
tpgtelecom.com.au/investor-relations.

The principal activity of the Group is the provision
of telecommunications services to consumers,
business, enterprise, government and wholesale
customers in Australia. There was no significant
change in the nature of this activity during the
financial year.

Significant changes in the state of affairs

In the opinion of the Directors, aside from matters
disclosed in the Operating and Financial Review
(‘OFR’) section of the Annual Report and the
Financial Report, there have been no significant
changes to the state of affairs of the Company
during the financial year. The impacts on TPG
Telecom due to the COVID pandemic are
outlined in the OFR section of the Annual
Report, where applicable.

Review of operations

The OFR set out on page 4 to 14 provides details
relating to the Group’s operations and results for
the financial year.

Dividends

TPG Telecom aims to pay in each year a dividend
of at least 50% of the Group’s net profit after tax,
adding back restructuring costs and certain non-
cash items (‘Adjusted NPAT’).

On 18 August 2022, the Board of Directors
declared a fully franked FY22 interim dividend of
9.0 cents per share. The interim FY22 dividend
had a record date of 14 September 2022 and was
paid on 12 October 2022.

On 24 February 2022, the Directors declared a
fully franked final 2021 dividend of 8.5 cents per
share. The dividend had a record date of
16 March 2022 and was paid on 13 April 2022.

Further information regarding FY22 dividends is
set out in Note 23 and Note 31 of the Annual
Report and on page 6 of the OFR.

TPG Telecom does not operate a Dividend
Reinvestment Plan.

Page 21 | TPG Telecom Annual Report 2022

Directors’ report
Other information

Legal and compliance

Environmental and sustainability

TPG Telecom seeks to comply with all laws and
regulations relevant to its operations.

This includes obligations under the National
Greenhouse and Energy Reporting Act 2007,
which requires the Company to report its
Australian greenhouse gas emissions, energy
consumption and energy production on an annual
basis to the Clean Energy Regulator.

During the financial year, there have been no
claims against TPG Telecom in respect of a
breach of environmental regulation.

For more information on environmental
performance, including environmental regulation,
see the TPG Telecom 2022 Sustainability Report
and the Climate Change Report which are
available online at tpgtelecom.com.au/
sustainability.

More information on TPG Telecom’s approach to
Sustainability is provided in the Sustainability and
Risk sections of the Annual Report.

Proceedings on behalf of the Company

TPG Telecom is not aware of any proceedings
have been brought or intervened in on behalf of
the Company with leave of the Court under
section 237 of the Corporations Act 2001.

Employees and Work Health and Safety (WHS)

TPG Telecom manages varied levels of inherent
risk within its work health and safety management
systems. These risks are both direct and indirect
in nature including from mobile and fixed network
deployment, inappropriate behaviour from the
public towards our retail employees, employee
wellbeing and associated risks within the
Company’s facilities, products and services. The
Company adopts a risk-based approach to how it
actively monitors and manages its obligations and
is aware that any failure to manage these risks
could cause harm to its people, partners or
members of the public. Over the past two years
the Company has faced new challenges in
supporting its employees and customers through
the COVID pandemic and the ongoing
consolidation of the Company’s safety
management systems with those of TPG
Corporation. The Company will continue to evolve
its approach to WHS in 2023 as it further embeds
a consistent approach to systems, monitoring and
compliance.

Page 22 | TPG Telecom Annual Report 2022

of independence for auditors imposed by the
Corporations Act 2001. The Directors are
satisfied that the provision of non-audit services
by the auditor did not compromise the auditor
independence requirements of the Corporations
Act 2001 for the following reasons:
•

all non-audit services have been reviewed by
the Audit and Risk Committee to ensure they
do not impact the impartiality and objectivity
of the auditor, and

• none of the services undermine the general

principles relating to auditor independence as
set out in APES 110 Code of Ethics for
Professional Accountants.

Auditor’s independence declaration

A copy of the auditor’s independence declaration,
as required under section 307C of the
Corporations Act 2001, is set out on page 61.

Rounding of amounts

The Company is of a kind referred to in the ASIC
Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 dated 24 March
2016 and, in accordance with that instrument, all
financial information presented in the
consolidated financial statements and Directors’
Report has been rounded to the nearest million
dollars, unless otherwise indicate.

Directors’ report
Other information

Indemnification and insurance of officers and
directors

Indemnification

The company has agreed to indemnify all
directors of the Company, on a full indemnity
basis and to the full extent permitted by law,
against all losses or liabilities (including all
reasonable legal costs, charges and expenses)
incurred by the director as a director or officer
of the Company or a related body corporate of
the Company.

Insurance policies

The Company maintains directors’ and officers’
liability insurance for the benefit of persons
defined in the policy, which includes current and
former directors and officers, including senior
executives of the Company and directors, senior
executives and secretaries of its controlled
entities to the extent permitted by the
Corporations Act 2001. The terms of the
insurance contract prohibit disclosure of the
premiums payable and other terms of the policies.

Auditor indemnity

The Company has agreed to reimburse its
auditors, PricewaterhouseCoopers (‘PwC’), for
any liability (including reasonable legal costs)
incurred by PwC in connection with any claim by
a third party arising from the Company’s breach
of the audit agreement between the Company and
PwC. The reimbursement obligation is subject to
restrictions contained in the Corporations Act
2001 (Cth). No payment has been made to
indemnify the auditors during or since the end of
the financial year.

Non-audit services

During the financial year, PwC, the Company’s
auditor, has been engaged to perform certain
other non-audit services in addition to their
statutory duties. Details of the amounts paid to
PwC for audit and non-audit services provided
during the year are set out in Note 30 of the
financial statements.

The Board of Directors, in accordance with advice
provided by the Audit and Risk Committee, is
satisfied that the provision of the non-audit
services is compatible with the general standard

Page 23 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report

Executive Summary

This Remuneration Report sets out how the
remuneration approach proposed in last year’s
report has been implemented in FY22 for both
Executive KMP and Non-Executive Directors.

More specifically, the report demonstrates how
the Company’s remuneration approach supports
the short and longer-term alignment of the
Company’s performance for the benefit of
shareholders.

The Past Year

2022 was a year of positive momentum for TPG
Telecom as we continued to focus on our
purpose to build meaningful relationships and
support vibrant, connected communities. While
progress has been made, 2022 continued to be a
challenging year for stakeholders. Financial
markets were volatile, inflationary pressures
accelerated, and the need to support employees
and customers while responding to COVID
remained in the first part of the year.

Despite this backdrop, TPG Telecom continued
to benefit from the foundations set in 2021 to
early 2022. Service revenue grew and we more
than doubled the number of fixed wireless
subscribers. We exceeded targeted cost
synergies from the 2020 merger. The sale of
tower and rooftop assets in July 2022 supported
a reduction in bank debt, and we have been
working on other key initiatives, including the
landmark regional mobile network sharing
agreement, which is subject to regulatory
approval and a decision from the Australian
Competition Tribunal is due in late June 2023.

These are specific examples of the three guiding
principles of our strategy – integrate and
simplify, win smart and maximise our potential –
as we pursue our ambition to become Australia’s
best telco. This strategic ambition provides
direction for our remuneration approach as we
seek to enhance the experience of our
customers and employees and improve returns
for shareholders.

Our approach to strategy and remuneration is
underpinned by our strongly held values, which
have been developed with significant input from

our employees: stand together; own it; simple’s
better; and boldly go.

During 2022, progress accelerated in unifying the
TPG Telecom culture and employee experience
in a competitive market for talent. This progress
was evident in continued improvement in
employee survey results—called the ‘Spirit of
TPG’ —which is one of the metrics in our
Balanced Scorecard for the Short-Term Incentive
(STI) Plan.

This improvement was achieved even though in
early 2022, in line with our principle of
integration and simplification, we undertook a
significant restructure to bring together
corporate support teams under a consolidated
operating model.

Except for the Deputy CFO and CFO, due to the
appointment of Grant Dempsey as CFO effective
1 February 2022, all Other Executive KMP served
for the entire year. The remuneration approach
outlined in the 2021 Remuneration Report
continued in 2022, with minimal change.

Fixed remuneration continued to be defined by
reference to the median of the external market
for comparable roles, taking into consideration
the size and complexity of the role, skills and
experience of the employee, and internal market
relativities.

For the purpose of 2022 fixed remuneration,
benchmark remuneration analysis was
undertaken in late 2021 against the ASX 11-50
and ASX 21-60 peer groups. Fixed remuneration
increases were recommended for two KMP for
2022.

The Short-Term Incentive (STI) approach aligns
to TPG Telecom’s strategic priorities and is
subject to Group financial and risk gateways, and
an individual behavioural gateway. Group and
individual metrics for Executive KMP were
aligned with the Group’s strategic priorities and
budget.

Service Revenue, EBITDA, and Operating Free
Cash Flow (OFCF), constitute 60% of the overall
scorecard, customer and employee measures
represent 20%, and individual performance
measures make up the balancing 20%.

Page 24 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

Based on that scorecard, and subject to Board
discretion, the CEO was eligible to earn up to
100% of base salary at target, and 150% at
maximum. The equivalent for Other Executive
KMP who held the position as at 31 December
2022, was 65% at target and 100% at maximum.
Overall, the Group balanced scorecard was
assessed with a weighted at target performance
result of 63.23% out of 80%. This represents an
award of 52.69% of maximum.

That result occurred in the following way: Strong
growth in EBITDA including the tower sale, which
exceeded target and achieved maximum
performance. Service Revenue came in between
threshold and target. TPG and iiNet Net Promoter
Scores (NPS), along with the employee Spirit
Index, came in at threshold performance. OFCF
was below threshold performance, primarily
because of adverse working capital movements,
driven by decisions relating to inventory holdings
and other working capital items. Vodafone NPS
was also below threshold and relative peer
performance, despite year-on-year growth.

When combined with an assessment of individual
KPIs, the Board recommended an STI award for
the CEO of $1,558,255 out of a possible
maximum STI award of $2,775,000. For the 2022
STI, this will be paid 55% in cash ($857,040) and
45% in Deferred Share Rights (DSRs) ($701,215).
Shareholder approval for the DSRs will be sought
at the 2023 Annual General Meeting. If approved,
shares will be purchased on market.

Under the 2022 Long Term Incentive (LTI) Plan,
the CEO is eligible for an allocation of
performance share rights valued at 150% of base
salary at maximum, with the equivalent for Other
Executive KMP as at 31 December 2022 being
100% of base salary at maximum.

Performance is to be tested over three years
against two equally weighted performance
hurdles: OFCF, and relative Total Shareholder
Return (TSR) against a nominated peer group of
ASX 100 companies (excluding Energy, Financial,
Materials and Real Estate companies).

The number of performance rights issued
(reflecting the value allocated) is determined by
the face value of the volume weighted average

share price (VWAP) of a TPG Telecom ordinary
share over the five working days following the
announcement of the annual results and before
the grant date. In 2022, this was from 25
February 2022 to 3 March 2022.

Malus conditions apply and no arrangements can
be entered into to limit the economic risk of the
performance rights. Performance rights will
generally be forfeited if the Executive leaves,
except in special circumstances including
redundancy, retirement, death or total and
permanent disability.

At the May 2022 AGM, shareholder approval was
obtained for a grant of 486,842 performance
rights valued at $2,775,000 for the CEO, which
are subject to the terms outlined above.

In addition, the 2020 VHA Long Term Incentive
(LTI) Plan continued to operate for two former
VHA Executive KMP employed at the start of
2020. This legacy Scheme, which operates over
three years, has two equally weighted tranches:
one tranche, tested annually, depends on
meeting OFCF targets; the other tranche is
service based, requiring the Executive to still be
employed by the Company at the payment date
in February after the end of the third year, being
February 2023.

Prior to the merger, the then VHA Remuneration
Committee approved the performance outcomes
for the remaining 50% of the 2019 LTI Plan, in
addition to the first six months of the 2020 LTI
Plan. In February 2022, the legacy 2019 VHA LTI
was paid. This is reported in the Actual Cash
received for the two eligible former VHA KMP. In
addition, this Remuneration Report provides
disclosure of remuneration outcomes under the
final VHA 2020 LTI Plan.

Executive KMP need also to hold the value
equivalent of one year’s base salary in shares or
share equivalents, which can be accumulated
over five years from the date of the merger or
appointment, whichever is later.

Page 25 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

Going Forward

2023 is a year for continuing TPG Telecom’s
momentum, focusing on ongoing simplification,
and maximising asset utilisation to deliver
sustainable growth and improving returns for
shareholders.

To ensure momentum continues and consistency
is maintained, the following changes are
contemplated in the Company’s 2023
remuneration structure:

• Remuneration will be benchmarked against
the ASX 21-60 peer group, as well as with
reference to other telecommunications peers.
Specific analysis will be undertaken during the
year.

• Following extensive analysis in late 2022,

overall base remuneration increases will be
made to four of the five Executive KMP,
reflecting changes in scope of role,
consideration of internal relativities and
retention, while having reference to the
benchmarks outlined above.

•

Included in these increases is a revised base
salary for the CEO to $2,000,000. This
increase is the first for the CEO since the
merger in July 2020 and takes into
consideration the complexity of the role, skills
and experience of the CEO, and external
market data.

• The STI percent for at target performance will
increase from 100% to 110% of base salary for
the CEO and 65% to 75% of base salary for
Other Executive KMP, with a continued focus
on financial performance weighted at 60%,
alongside customer and employee measures
at a combined 20%.

• The STI percent deferred into share rights

(DSRs) will increase to 50% in 2023, the last
stage of the STI transition. This supports
stronger equity holdings and increased
alignment with shareholder outcomes for
Executive KMP.

• Following stakeholder and investor feedback,
performance measures within the 2023 LTI
Plan will replace prior year LTI Plan measures,
with the inclusion of a Return on Capital
measure, Earnings per Share (EPS) and an
Environmental, Social and Governance (ESG)
measure linked to our 2025 renewable energy
commitment outlined in our 2021
Sustainability Report.

Non-Executive Directors Governance and
Remuneration

All Non-Executive Directors held office for the
entire year, including Dr Helen Nugent AC and
Ms Arlene Tansey, who are classified as
Independent Non-Executive Directors. Dr Nugent
is also the Senior Independent Director.

The governance responsibilities of the Non-
Executive Directors have been clearly defined
and are exercised in a way that preserves their
independence from management in relation to
remuneration. Management and Non-Executive
Director conflicts of interest are rigorously
enforced. Non-Executive Directors do not
receive fees that are contingent on performance;
shares in return for their service; retirement
benefits, other than statutory superannuation; or
any termination benefits.

The Chairman is eligible to receive an annual fee
for his service of $450,000. In 2022, fees were
aligned for the Chairman of Governance,
Remuneration and Nominations Committee
(GRNC) with those of the Chairman of the Audit
and Risk Committee (ARC). The Chairman of
each committee is an Independent Director. Each
received fees of $50,000 a year for those roles in
addition to their Non-Executive Director fees.
Non-Executive Directors (other than the Board
Chairman) were eligible to receive an annual fee
of $165,000 consistent with 2021. No additional
changes were made to Non-Executive Director
fees throughout 2022.

For 2023, benchmark analysis found that
Chairman and Board Member fees were
considerably below the market benchmark and
Chairman and Member Committee fees were
within benchmark. However, no changes are
proposed for Board or Committee fees in 2023.

Page 26 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

Non-Executive Directors who personally receive
Board fees are required to hold the equivalent of
one year of their annual Non-Executive Director
fee in shares, which can be accumulated over
four years from the date of the 2020 merger or
their appointment, whichever is later. At any
point in time, the value of a Non-Executive
Director’s minimum holding will be calculated as
the higher of the purchase price or current
market price. Non-Executive Directors are
required to advise the Company Secretary of the
share price at the time of any purchase of
shares.

Contents

1. Overview ........................................................ 28

2. Key Management Personnel (KMP) .............. 28

3. 2022 Remuneration Approach ................... 29

4. Executive Remuneration Outcomes: 2022 .. 39

5. Looking forward to 2023 ............................. 47

6. Remuneration Governance ........................... 49

7. Non-Executive Director Remuneration ......... 51

8. Appendices .................................................... 53

8.1 Appendix 1 – Executive Service Agreements
....................................................................... 53

8.2 Appendix 2 – Executive Statutory
Remuneration ................................................. 54

8.3 Appendix 3 – Non-Executive Director
Statutory Remuneration .................................. 56

8.4 Appendix 4 – Equity Movements ............... 57

8.5 Appendix 5 – Additional Statutory
Information ..................................................... 58

8.6 Appendix 6 – Related Party Transactions .. 60

Page 27 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

1. Overview

This is the second full year of the operation of TPG Telecom Limited (‘TPG Telecom’, ‘the Company’) and it
is also the second full year of the operation of the new remuneration approach, which was outlined in the
2020 Remuneration Report.

This Report shows how the remuneration approach supports short and longer-term alignment of the
Company’s performance for the benefit of shareholders in the following ways:
• The remuneration approach seeks to align the interests of Executives and the performance of the

Company. (See Section 3)

• Executive remuneration outcomes for 2022 demonstrated alignment with Company performance for

the benefit of shareholders. (See Section 4)

• That alignment will continue going forward. (See Section 5)
• Non-Executive Directors have exercised effective oversight of Executive remuneration. (See Section 6)
• Non-Executive Directors are remunerated in ways that support the retention of their independence and

their commitment to performance for shareholders. (See Section 7)

Each of these conclusions is outlined in the respective sections of this report.

2. Key Management Personnel (KMP)

KMP have authority and responsibility for planning, directing and controlling the activities of TPG Telecom,
directly or indirectly, the organisation’s operating activities, and its profit and loss. This includes Non-
Executive Directors. However, while Non-Executive Directors are classified as KMP, they are not
Executives.

The full list of CEO and Other Executive KMP is reported as follows:

EXECUTIVE KMP
Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Jonathan Rutherford

Grant Dempsey
Sean Crowley
1.

ROLE

TERM AS KMP1

Chief Executive Officer
Group Executive Customer Operations
and Shared Services
Group Executive Consumer
Group Executive Enterprise,
Government and Wholesale
Group Chief Financial Officer

Full year

Commenced 1 February 2022

Interim Chief Financial Officer

Ceased 31 January 2022

If an Executive did not serve as KMP for the full year, remuneration information disclosed in this report is from the date the Executive commenced
as KMP to the date they ceased as KMP.

The full list of Non-Executive Directors is reported as follows:

NON-EXECUTIVE KMP
Canning Fok
Pierre Klotz
Diego Massidda
Robert Millner
Antony Moffatt
Helen Nugent
Frank Sixt
Arlene Tansey
Jack Teoh

ROLE

Non-Executive Director and Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director

Non-Executive Director

TERM AS KMP

Full year
Full year
Full year
Full year

Full year

Independent Non-Executive Director & Senior Independent Director Full year

Non-Executive Director

Independent Non-Executive Director

Non-Executive Director

Full year

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Remuneration report continued

3. 2022 Remuneration Approach

The remuneration approach seeks to align the interests of Executives and the performance of the
Company for the benefit of shareholders. TPG Telecom’s purpose, guiding and remuneration principles are
aligned to the purpose and values of the organisation.

To build meaningful relationships and support vibrant, connected communities

OUR PURPOSE

OUR STRATEGIC AMBITION

To be Australia’s best telco for customers, shareholders, our people and the community

OUR GUIDING PRINCIPLES

Integrate and Simplify
Making the experiences of our
customers easier while
streamlining our products and
systems

Win Smart
Delivering targeted growth,
focusing on the strengths of our
infrastructure, brands and
people

Maximise Our Potential
Investing in our people and
capabilities to achieve our
ambition to be Australia’s best
telco

Stand together

Own it

Simple’s better

Boldly go

OUR VALUES

Support our
purpose

OUR REMUNERATION PRINCIPLES

Generate
superior
returns for the
benefit of
shareholders
over both the
short and
longer term

Deliver great
value and
service for
customers
today and
tomorrow

Invest in fast,
reliable and
innovative
technology
that creates
value for
customers and
shareholders

Incentivise
high
performance
while
managing
risk

Promote an
organisational
culture aligned
with
organisation
vision and
strategy and
community
expectations

REMUNERATION GOVERNANCE

The independence of the Board from management is maintained in the design and implementation of
remuneration outcomes, while balancing the interests of Executives and shareholders

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3.1. The Remuneration Structure

The remuneration structure has three elements, namely Fixed Remuneration, Short Term Incentives and
Long Term Incentives, along with a minimum shareholding requirement.

Our remuneration structure overview

ELEMENT

Fixed remuneration

Short Term Incentive (STI)

Long Term Incentive (LTI)

DESCRIPTION

Benchmarked to the median of the relevant ASX peer
group, which is reviewed annually.

Annual performance assessment of Group financial, non-
financial and individual performance. Delivered in cash
and share rights (DSRs) deferred over one and two
years.

Assessed over a three-year period based on Group
financial performance and a market performance hurdle.
Granted as share performance rights and subject to
hurdles.1

Changes are being made to the hurdles for the 2023 LTI plan as outlined in Section 5. Reference to LTI in this table relates to 2022.

Further information on each remuneration component is described below.

3.2. Fixed Remuneration 2022

Fixed remuneration is determined by reference to the median of the external market for comparable roles,
taking into consideration the size and complexity of the role, skills and experience of the employee, and
internal market relativities. The external market data consists of median benchmarks for similar roles in
ASX peer organisations of comparable size. The benchmark used for comparison purposes for
recommendations made in 2021 for 2022, was the ASX 11-50 and ASX 21-60 peer groups. The peer
groups were adjusted if the nature of the organisation, such as ownership or management structure, was
less relevant, based on 2021 data. The benchmark was adjusted in 2022 for 2023 recommendations to the
ASX 21-60 peer group.

Fixed remuneration is comprised of base salary plus superannuation.

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3.3. Short Term Incentive 2022

STI is awarded for annual Company and individual performance in line with the achievement of TPG
Telecom’s strategic priorities. In this way, it aligns the interests of KMP with that of Company performance
for the benefit of shareholders.

The key STI elements for TPG Telecom in 2022 were as follows:

ELEMENT

DESCRIPTION

Gateway

An STI allocation to Executives will only be paid after the following considerations are taken into
account:

Assessed at a group level:
•

Financial: minimum financial performance aligned with shareholder interests is achieved. The
benchmark is set at the beginning of the performance year by the Board, following input from
the GRNC, having discretion at the end of the year as to whether it is to be exercised.

• Risk: appropriate management of financial, operational and reputational risks in the

generation of returns is assessed by the Board, following input from the GRNC, at the end of
the financial year.

Assessed at an individual level:
• Behaviours: demonstrated behaviours that are aligned with the organisation’s purpose and

culture are assessed by the Board at the end of the financial year, with input from
management, subject to the management of conflicts of interest.

STI opportunity

In 2022, the CEO was eligible to earn the STI equivalent of up to 100% of base salary at target and
up to 150% of base salary at maximum.

In 2022, Other Executive KMP who were KMP as at 31 December 2022 were eligible to earn the
STI equivalent of up to 65% of base salary at target and up to 100% of base salary at maximum.

The target STI opportunity has been set by considering the aggregate STI and LTI remuneration
against the total target remuneration levels for the median of the peer group. The maximum STI
opportunity has been determined by considering total target remuneration levels at the 75th
percentile of this peer group where maximum benchmarking information was not available.

The size of the STI pool is determined based on the specific outcomes of the STI scorecard
measures, capped by the maximum available to an individual Executive KMP.

Performance STI outcomes are assessed against a balanced scorecard developed to support the
Company’s strategic priorities. The table below outlines the type of performance measures that
were used in 2022 and their weighting at target as well as at maximum.

Funding

Performance
measures

PERFORMANCE MEASURE

Total Service Revenue

Operating Free Cash Flow
(OFCF)

EBITDA

Customer experience

Employee outcomes

Individual performance
achievement

TOTAL

SCORECARD WEIGHTING
AT TARGET

SCORECARD WEIGHTING AT
MAXIMUM

20%

15%

25%

10%

20%

100%

30%

22.5%

37.5%

15%

30%

150%

Additional information on the specific Company performance measures is provided in
Section 4.2.

Individual performance measures are role specific and set with reference to the Company’s
strategic priorities as they relate to an individual’s role.

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ELEMENT

DESCRIPTION

Balanced
Scorecard
Operation

The performance measures in the balanced scorecard are reviewed at year end against three
levels of performance – threshold, target and maximum, with a pro rata being applied in between
each level.

Threshold – the minimum level of performance which will result in the payment of any STI in
relation to the performance measure. No STI payment will be made with respect to the
performance measure if the threshold performance level is not achieved.

Target – represents performance which meets the target for the performance measure based on
the annual target set by the Board.

Maximum – represents performance which exceeds the target and delivers superior outcomes.
The application of the three levels of performance is shown below.

How
performance
is evaluated

The Board approves the details of the balanced scorecard at the start of the year.

At year end, the GRNC makes a recommendation to the Board on whether the financial or risk
gateways have been achieved.

The balanced scorecard is reviewed by the GRNC and proposed to the Board, based on financial
and non-financial calculations.

The GRNC makes a recommendation to the Board on the CEO’s performance against the Group’s
scorecard and individual goals agreed at the beginning of the financial year, after the behavioural
gateway has been reviewed.

The CEO makes a proposal to the GRNC for recommendation to the Board on the performance of
each individual Other Executive KMP against the Group’s scorecard and their individual goals,
after the behavioural gateway has been reviewed.

Any STI outcomes for the balanced scorecard and for the CEO or Other Executive KMP are
subject to overriding Board discretion and rigorous management of conflicts of interest.

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ELEMENT

DESCRIPTION

Instruments

STI is awarded in cash and Deferred Share Rights (DSRs). DSRs are rights over TPG Telecom
ordinary shares. DSRs are granted at no cost to the Executive KMP and no dividend is payable on
any unexercised DSRs. Shares are typically purchased on market.

Historically, neither legacy VHA or TPG Corporation used deferred STI arrangements. A transition
to a deferred STI commenced in 2021 and will result in a 50% equity deferral from 2023. The
transition has been staged to balance the retention of Executive KMP over the crucial post-merger
period with shareholder expectations over the near term for the proportion of STI to be retained.

The table below outlines the percentage of cash and deferred equity allocated for STI awards
across this transition period. This applies to all Executive KMP.

YEAR

2021

2022

2023 onwards

CASH COMPONENT

DSR COMPONENT

60%

55%

50%

40%

45%

50%

Performance
period

STI is assessed over a one-year period, aligned to TPG Telecom’s financial year, which is a
calendar year.

Vesting period

The cash component of the STI is paid in March following the end of the financial year.

DSRs vest equally in two tranches. The first tranche will vest in March one year after the end of
the financial year and the second tranche will vest in March two years after the end of the
financial year. Vesting of each tranche is subject to continued employment, subject to the
cessation of employment provisions outlined in the cessation of employment provision below.

Number of
DSRs issued

The number of DSRs issued is calculated based on the face value of the volume weighted average
share price (VWAP) of TPG Telecom's ordinary shares over the five working days following the
announcement of the annual results.

For DSR’s awarded as part of the STI for FY21, the calculated five-day VWAP for the period
25 February 2022 to 3 March 2022 inclusive was $5.70. This value was also used for the DSRs
issued to the CEO in May 2022 following shareholder approval.

DSR’s reflecting 2022 STI outcomes will be calculated from 28 February 2023 to 6 March 2023
inclusive.

Exercise

Exercise of DSRs is automatic on vesting and there is no exercise price.

Hedging of DSRs Executives cannot enter into any arrangements that limit the economic risk of unvested DSRs.

Malus
conditions

In cases where an Executive KMP acts fraudulently or dishonestly or is in breach of his or her
obligations to TPG Telecom, any eligibility for STI or unvested rights will lapse.

Cessation of
employment

STI will be forfeited if an Executive KMP resigns before the payment date subject to the special
circumstances outlined below.

Unvested DSRs will also be forfeited if the Executive KMP resigns before the vesting date, subject
to the special circumstances outlined below.

In special circumstances (including redundancy, retirement, death or total and permanent
disability or as otherwise agreed), the below treatment may apply:
• Cash STI may be awarded pro rata on termination. Where business performance is yet to be
determined for the period, outcomes will reflect at Target performance. Where business
performance has been determined, this will be applied to final outcomes together with an
assessment of individual performance.

• DSRs that have been allocated may be retained on cessation of employment, subject to the
existing terms and conditions of the award. This process will only apply if the Executive KMP
is employed at the date of DSRs being allocated by the Board.

Change of
control

DSRs will be subject to the existing terms and conditions of the award and the exercise of Board
discretion.

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3.4. Long Term Incentive 2022

LTI supports longer-term alignment between each Executive KMP and the return experienced by TPG Telecom
shareholders, both directly and indirectly through the Company’s performance. LTI considers both Company
performance and share plan performance relative to the external market. These elements have been applied to the
2021 and 2022 Long Term Incentive Plans.

ELEMENT

DESCRIPTION

LTI opportunity

Performance
measures and
vesting period

How is
performance
evaluated

For 2022, the target LTI opportunity, as determined in 2021, has been set by reference to the
median of the ASX peer group for comparable roles, taking into account the level of fixed, STI
and LTI remuneration. At that time the peer group was the ASX 11-50 and ASX 21-60, using data
from 2021. The maximum LTI opportunity was determined by considering the total target
remuneration levels at the 75th percentile of this peer group or the maximum at market median
where available.

For 2022, the CEO was eligible to earn the LTI equivalent of up to 100% of base salary at target
and up to 150% of base salary at maximum. The Board makes a recommendation to
shareholders on the CEO’s LTI grant for approval at the Annual General Meeting.

For 2022, Other Executive KMP were eligible to earn the LTI equivalent of up to 65% of base
salary at target and up to 100% of base salary at maximum. The GRNC makes a recommendation
to the Board on the LTI grant for Other Executive KMP.

For the 2022 LTI, performance will be tested against two equally weighted measures linked to:
• OFCF measured as operating cashflow less capex, finance lease repayments and finance
lease interest (within financing costs). It does not include payments for spectrum and
dividends and excludes any loan payments/drawdowns.

•

Total Shareholder Return (TSR) relative to a peer group of ASX 100 listed organisations
(which excludes the Energy, Financial, Materials, and Real Estate sectors).

Performance under the LTI will be tested over a three-year period, as outlined in the table below.

PERFORMANCE MEASURE

Relative TSR

OFCF

WEIGHTING

50%

If the performance hurdles are met, vesting may only occur at the end of the three-year
performance period.

Vesting schedules for the 2022 LTI performance measures are included in the table below.

Relative TSR vesting schedule

RELATIVE TSR PERFORMANCE
% RANKING WITH PEER GROUP AT THE
CONCLUSION OF THE 3 YEAR PERFORMANCE
PERIOD

Equal to or less than the 50th percentile

Between the 50.1 percentile and 75th percentile

VESTING
% OF GRANTED PERFORMANCE
RIGHTS THAT VEST

Straight-line pro rata vesting between
50.1% and 100%

Equal to the 75th percentile or above

100%

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ELEMENT

DESCRIPTION

How is
performance
evaluated

OFCF vesting schedule

OFCF PERFORMANCE
ACHIEVEMENT % OF 3 YEAR CUMULATIVE
TARGE

Less than 80% of the cumulative OFCF target
is achieved

80% of the cumulative OFCF target is
achieved

VESTING
% OF GRANTED PERFORMANCE
RIGHTS THAT VEST

50%

Between 80% and 110% of the cumulative
OFCF target is achieved

Straight-line pro rata vesting between 50.1%
and 100%

110% or more of the cumulative OFCF target
is achieved

100%

Instrument

LTI is granted as performance rights that entitle participants to a fully paid ordinary share in TPG
Telecom, subject to meeting the performance hurdles. Performance rights are granted at no
cost to the participant. No dividend is payable on unexercised rights. Shares are typically
purchased on market.

Number of
rights issued

The number of performance rights issued is calculated based on the face value of the volume
weighted average share price (VWAP) of TPG Telecom's ordinary shares over the five working
days following the announcement of the annual results.

For performance rights issued as part of the LTI for FY22, the calculated five-day VWAP for the
period 25 February 2022 to 3 March 2022 inclusive was $5.70. This value was also used for the
performance rights issued to the CEO in May 2022 following shareholder approval.

For the 2023 LTI allocation, the VWAP will be used for the five working days from 28 February
2023. This value will also be used for the performance rights granted to the CEO in May 2023,
which will be subject to shareholder approval at the May 2023 Annual General Meeting.

Exercise of performance rights is automatic on vesting and there is no exercise price.

Executives cannot enter into any arrangements to limit the economic risk of unvested
performance rights.

In cases where an Executive KMP acts fraudulently or dishonestly or is in breach of his or her
obligations to TPG Telecom, any unvested rights will lapse.

Performance rights will generally be forfeited if an Executive KMP resigns before the vesting
date. In special circumstances (including redundancy, retirement, death or total and permanent
disability or as otherwise agreed), any unvested rights may be retained on cessation of
employment, subject to the existing terms and conditions of the award (including performance
hurdles) and Board discretion.

Exercise

Hedging

Malus
conditions

Cessation of
employment

Change of
control

Performance rights will be subject to the existing terms and conditions of the award and Board
discretion.

The 2020 LTI Plan that was outstanding at the time of the merger that related to VHA was still on foot in
2022. This is described in Section 4.4.

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3.5. Minimum Shareholding Requirements

To further align the interests of the Executive with shareholders, a minimum shareholding requirement has
been approved by the Board for all Executive KMP.

Under the minimum shareholding requirement, Executive KMP are required to acquire and maintain,
directly or indirectly, a holding with a value equivalent of one year’s base salary. Each Executive KMP may
accumulate this value over five years from the date of the merger or appointment, whichever is later. The
shareholding requirements are periodically reviewed.

The value of an Executive KMP’s minimum shareholding is calculated as the higher of the purchase price or
current market price. The minimum shareholding is calculated as the total value of shares held by the
Executive KMP and unvested performance rights. For the purpose of the calculation, the value of unvested
performance rights is discounted by 50%. The GRNC annually reviews the extent to which each Executive
KMP is complying with or making progress towards complying with this requirement.

In addition, the Board has adopted a share trading policy to ensure Executives comply with, and are
perceived as complying with, insider trading laws, and their dealing in TPG Telecom shares. The policy
requires Executives to only trade within defined windows, to document all shareholdings, as well as to
provide the Company with written acknowledgement of any trades. A breach of policy would be regarded
seriously by the Board and may constitute a breach of the law, and as such may lead to action being taken
against the Executive, up to and including termination.

Compliance with minimum shareholding requirements is subject at all times to conformance with the share
trading policy and insider trading provisions of the Corporations Act 2001.

3.6. Total Target and Maximum Remuneration for 2022

Total Target remuneration for the CEO and Other Executive KMP has been set by reference to the median
of benchmark data for comparable roles in ASX peer organisations. In 2022, remuneration components for
KMP were compared to the median of the ASX 11-50 and ASX 21-60 peer groups, utilising data from 2021.
The benchmark maximum was set at the 75th percentile of total target remuneration for comparable roles
in the ASX peer organisations where maximum information was not available.

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The table below details 2022 Total Target remuneration by reward element for those Executive KMP who
held the role as at 31 December 2022. This table assumes the Executive was in the role for the entire year.

Total Target Remuneration for Executive KMP: 2022

EXECUTIVE KMP

BASE
SALARY
$2

STI
TARGET %
OF BASE
SALARY

STI
TARGET
$

% STI
DEFERRED
IN 2022

LTI
TARGET %
OF BASE
SALARY

LTI
TARGET
$

TOTAL TARGET
REMUNERATION
$3

Iñaki Berroeta

1,850,000

100%

1,850,000

Ana Bordeianu

Kieren Cooney

Grant Dempsey1

714,000

900,000

880,000

Jonathan Rutherford

714,000

65%

464,100

585,000

572,000

464,100

1. Grant Dempsey was appointed as CFO on 1 February 2022.
2.
3.

Statutory superannuation is not included in the calculation of incentives.
Excludes statutory superannuation.

45%

100%

1,850,000

5,550,000

65%

464,100

585,000

572,000

464,100

1,642,200

2,070,000

2,024,000

1,642,200

The table below details 2022 Total Maximum remuneration by reward element for those Executive KMP
who held the role as at 31 December 2022. This table assumes the Executive was in the role for the entire
year.

Total Maximum Remuneration for Executive KMP: 2022

EXECUTIVE KMP

BASE
SALARY
$2

STI
MAXIMUM
% OF BASE
SALARY

STI
MAXIMUM
$

% STI
DEFERRED
IN 2022

LTI
MAXIMUM
% OF BASE
SALARY

LTI
MAXIMUM
$

TOTAL
MAXIMUM
REMUNERATION
$3

Iñaki Berroeta

1,850,000

150%

2,775,000

Ana Bordeianu

Kieren Cooney

Grant Dempsey1

714,000

900,000

880,000

Jonathan Rutherford

714,000

100%

714,000

100%

900,000

100%

880,000

714,000

1. Grant Dempsey was appointed as CFO on 1 February 2022.
2.
3.

Statutory superannuation is not included in the calculation of incentives.
Excludes statutory superannuation.

45%

150%

2,775,000

7,400,000

100%

714,000

2,142,000

100%

900,000

2,700,000

100%

880,000

714,000

2,640,000

2,142,000

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3.7. Remuneration Mix at Target for 2022

The target remuneration mix has been structured to align remuneration for the CEO and Other Executive
KMP with the short and long-term business objectives of TPG Telecom. For the CEO and Other Executive
KMP, the graphs below outline the target remuneration mix between total fixed remuneration, short term
incentive cash and equity components and the long-term incentive. Total Fixed Remuneration (TFR)
includes base salary and statutory superannuation.

CEO

Other KMP

33%
Equity

34%
Cash

15%
Equity

18%
Cash

44%
Cash

28%
Equity

13%
Equity

15%
Cash

TFR

STI Cash

STI Equity

LTI Equity

TFR

STI Cash

STI Equity

LTI Equity

The chart below outlines the vesting timeframes for the TPG Telecom remuneration approach over which
each remuneration element operated at the end of 2022. This does not include legacy VHA LTI
arrangements.

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4. Executive Remuneration Outcomes: 2022

Executive remuneration outcomes for 2022 demonstrate alignment with Company performance for the
benefit of shareholders.

4.1. Fixed Remuneration

Fixed remuneration outcomes for 2022 reflect the principles outlined in Section 3.2 above for those who
were KMP as at 31 December 2022, along with the period for which the Executive served as KMP.

EXECUTIVE KMP

ROLE

TERM AS KMP

ACTUAL FIXED REMUNERATION
(INCLUDING SUPERANNUATION)1,2$

Iñaki Berroeta

Chief Executive Officer

Full year

Ana Bordeianu3

Group Executive Customer
Operations and Shared
Services

Full year

Kieren Cooney

Group Executive Consumer

Full Year

Grant Dempsey

Group Chief Financial Officer

Commenced 1 February
2022

Jonathan Rutherford

Group Executive Enterprise &
Government

Full year

1,874,430

736,597

924,430

831,097

736,097

For the relevant term as Executive KMP as per the dates detailed in the above table.

1.
2. Where applicable, superannuation has been calculated based on the statutory maximum superannuation contribution base.
3.

Includes an additional $500 superannuation payment related to TPG Telecom’s Super Bump program where all female employees with over 12
months tenure are provided an additional $500 superannuation payment annually.

Consideration was given to external market comparisons for similar roles in peer ASX organisations and
internal relativities within the Executive team. As determined in 2021 for 2022, TPG Telecom’s Fixed
remuneration for Executive KMP was benchmarked against the median of the ASX 11-50 and the ASX 21-
60 peer groups. In 2022, due to share price volatility, this peer group was adjusted to be the ASX 21-60
peer group for remuneration decisions for 2023.

4.2. STI Outcomes 2022

Business performance metrics reflect key drivers of shareholder returns and were set to support the
Company’s strategic priorities based on the annual budget and other strategic priorities as approved by
the Board.

Prior to assessing the performance of the STI measures and determining final STI award outcomes, the
TPG Telecom Board assesses the outcome against each gateway.

ASSESSMENT
LEVEL

GATEWAY

DESCRIPTION

Assessed at
a Group level

Financial

Minimum financial performance aligned with shareholder interests
is achieved. The benchmark is set at the beginning of the
performance year by the Board, following input from the GRNC,
having discretion at the end of the year as to whether it is to be
exercised.

Risk

Appropriate management of financial, operational and reputational
risks in the generation of returns is assessed by the Board,
following input from the GRNC, at the end of the financial year.

Assessed at
an Individual
level

Behaviours Demonstrated behaviours that are aligned with the organisation’s
purpose and culture are assessed by the Board at the end of the
financial year, with input from management, subject to the
management of conflicts of interest.

OUTCOME OF
BOARD
ASSESSMENT

Achieved

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The Board found that the Group financial and risk gateways had been achieved. The Board also assessed
the individual behavioural gateway for the CEO and Other Executive KMP and concluded that all had met
the behavioural gateway for the STI Plan.

STI outcomes were then calculated based on the achievement against TPG Telecom’s 2022 STI plan
measures as outlined in the table below. An outline of performance against historical STI measures is
detailed in Section 4.6.

DESCRIPTION

THRESHOLD

TARGET

MAXIMUM1

MEASURE AND
WEIGHTING
AT TARGET

Total Service Revenue
(20%)2

OFCF
(15%)3

EBITDA
(25%)

Customer NPS
Vodafone Brand
Mobile
(5%)

Customer NPS TPG &
iiNet Brands Fixed
(5%)

Measures recurring revenue
generated from the provision
of telecommunications services
excluding handsets,
accessories, and other
hardware revenue.

Measures Operating cash flow
less capex, finance lease
repayments and finance lease
interest (within financing
costs). It does not include
payments for spectrum and
dividends and excludes any
loan payments/drawdowns.

Measures the profit TPG
Telecom makes after operating
costs and before charges for
depreciation and amortisation,
interest, and tax

Measures the number of
months of the year that the
target ranking has been
achieved.
The customer measures are
tested independently of each
other.

$4,067 million

$4,519 million

$4,971 million

$206 million

$257 million

$308 million

$1,599 million

$1,777 million

$1,955 million

Lead position
for 50% of the
year

Lead position
for 83% of the
year

Lead position of
1 or 2 for 83% of
the year

Lead position of
1 or 2 for 91% of
the year

Lead position for
100% of year and
increase gap to
competitors

Lead position of 1
or 2 for 100% of
year and 10
percentage point
gap to no. 3

+3 from
baseline (of 76)

+5 from
baseline

+7 from
baseline

Employee Experience
- Values Alignment
Index
(10%)

Index score based on 16
values-based statements
contained within the TPG
Telecom culture survey

Measures aligned to Strategic Pillars

Individual
(20%)
1.
2.
3.

STI capped at 150% of payout for maximum performance achievement.
2022 target adjusted for Multimedia Messaging Service (MMS) revenue.
2022 target adjusted to account for changes from initial target in handset receivable financing, transformation costs and Radio Access Network
(RAN) acceleration.

The result achieved for each business performance measure was assessed against targets.

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MEASURE AND
WEIGHTING
AT TARGET

Total Service Revenue
(20%)

OFCF
(15%)

EBITDA (25%)

Customer NPS
Vodafone Brand
Mobile
(5%)

COMMENTARY

OUTCOME

PERFORMANCE OUTCOME
ACHIEVEMENT

Total Service Revenue result driven by
shortfalls against ambitious growth
targets for fixed consumer broadband
and Enterprise, Government &
Wholesale. This was partially mitigated
by strong mobile customer numbers
with a return to growth in both post-
paid and prepaid customers and
boosted by return of international
roaming revenues.

Result due to adverse working capital
movements driven by an increase in
inventory holdings (exacerbated
by fixed wireless modems), and
negative movements in other working
capital items.

Result exceeded target with service
revenue driven shortfalls more than
mitigated by delivery of margin cost
savings ahead of target and one-off gain
from sale of Tower assets.

Vodafone maintained low
Telecommunications Industry
Ombudsman (TIO) complaints and
doubled NPS in 2022. Despite the
growth in NPS, Vodafone did not hold
the lead position throughout the year.

$ 4,439 million

Between Threshold and
Target

$ 92 million

Less than Threshold

$ 2,135 million

Greater than Maximum

0%
(0 of 12 months)

Less than Threshold

Customer NPS TPG &
iiNet Brands Fixed
(5%)

TPG improved NPS by 9% across the
year; iiNet regularly held lead position
throughout the year.

Employee Experience
- Values Alignment
Index
(10%)

An improvement was recorded in the
scores of all 16 questions in the Index.
The area of simplification remains the
most significant area of opportunity.

83%
(10 of 12 months)

79
(+3 from baseline
76)

Threshold

The performance outcome achievement for each of the 2022 Business Performance measures is converted
to a STI Payment percent based on the scale in the following table.

PERFORMANCE OUTCOME
ACHIEVEMENT

Below Threshold

Threshold

STI PAYMENT % VS TARGET

STI PAYMENT % VS MAXIMUM

50%

33.33%

Between Threshold and Target

Pro-rated 50% - 100%

Pro-rated 33.33% - 67%

Target

100%

67%

Between Target and Maximum

Pro-rated 100%-150%

Pro-rated 67%-100%

Greater than Maximum

150%

100%

The STI Payment percent for each 2022 Business Performance measure and the weighted STI Payment
percent is detailed in the following table.

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Directors’ report
Remuneration report continued

WEIGHTED STI
PAYMENT % AT
TARGET
(80% TOTAL)

WEIGHTED STI
PAYMENT % AT
MAXIMUM
(120% TOTAL)

PERFORMANCE
OUTCOME
ACHIEVEMENT

ACTUAL STI
PAYMENT AS %
OF TARGET

WEIGHTED
ACTUAL STI
PAYMENT % OF
TARGET

ACTUAL STI
PAYMENT AS %
OF MAXIMUM

20.00%

30.00%

OFCF2

15.00%

22.50%

EBITDA3

25.00%

37.50%

5.00%

7.50%

Between
Threshold and
Target

Less than
Threshold

Greater than
Maximum

Less than
Threshold

91.15%

18.23%

60.76%

0.00%

150.00%

37.50%

100.00%

0.00%

5.00%

7.50%

Threshold

50.00%

2.50%

33.33%

10.00%

15.00%

Threshold

50.00%

5.00%

33.33%

MEASURES

Total Service
Revenue1

Customer NPS
Vodafone
Brand Mobile
Customer NPS
TPG & iiNet
Brands Fixed
Employee
Experience -
Values
Alignment
Index

Total Weighted STI Payment %

63.23% out of
80% at target4

52.69% out of
120% at
maximum

Revenue from contracts with customers excluding handsets, accessories, and other hardware revenue.

1.
2. Operating cash flow less capex, finance lease repayments and finance lease interest (within financing costs). This does not include payments for

3.
4.

spectrum and dividends and excludes any loan payments/drawdowns.
EBITDA measures the profit TPG Telecom makes after operating costs and before depreciation and amortisation, interest and tax.
The 80% at target represents the business performance component (120% at maximum), the remaining 20% is assessed on individual performance
(with a possible 30% at maximum).

For the purposes of calculating the STI outcome, the Board, following input from the GRNC, approved the
Business Performance component of the STI payment as 63.23% out of a total of 80% at target, or an
outcome of 52.69% out of 120% at maximum.

Assessments were also undertaken for each individual, representing 20% of their overall STI outcome. The
CEO’s performance was assessed against individual specific goals approved by the Board, which reflected
the following strategic pillars:

STRATEGIC PILLARS

COMMENTARY ON ACHIEVEMENT AGAINST
PILLARS

BOARD ASSESSMENT ON
ACHIEVEMENT

Delivery of merger integration synergies Delivered synergies of $140 million against

Delivery of growth in fixed wireless

Successful execution of asset
monetisation and infrastructure/network
sharing strategies

a target of $132 million.

More than doubled fixed wireless
subscribers in 2022 from 80,000 to
171,000.

Completed the sale of mobile tower and
rooftop infrastructure; Executed network
sharing agreement; Strategic review of
Vision Networks.

Between Target and
Maximum

Between Threshold and
Target

Maximum

The GRNC, following input from the CEO, reviewed and assessed each Executive KMP’s performance
relative to their individual goals. The individual component represents 20% of the total STI payment at
target. The value of the deferred component of the award will be subject to the share price at vesting.

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Directors’ report
Remuneration report continued

The table below shows the 2022 STI payment for Executives who were KMP as at 31 December 2022, split
into cash at 55% and deferred at 45% as well as the total amount. It also reflects the Executive KMP’s STI
given their period of appointment. Information on 2023 STI Target and Maximum and STI measures is
outlined in Section 5.

TOTAL 2022 STI
ACTUAL

PERCENTAGE OF
TARGET

PERCENTAGE OF
MAXIMUM

EXECUTIVE KMP

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Grant Dempsey3

Jonathan
Rutherford

2022 STI
CASH
ACTUAL1

857,040

215,001

267,793

241,139

2022 STI
DEFERRED
ACTUAL2

701,215

175,910

219,103

197,295

1,558,255

390,911

486,896

438,434

212,449

173,822

386,271

84.23%

83.23%

84.23%

83.23%

56.15%

54.75%

54.10%

54.75%

54.10%

1.
2.

2022 STI Cash is paid to the Executive as a gross payment in March 2023.
2022 STI Deferred is granted in 2023 to the Executive in DSRs over TPG Telecom ordinary shares deferred over one and two years with vesting
occurring in March 2024 and March 2025.
STI target pro-rated based on term as KMP from 1 February 2022 to 31 December 2022.

4.3. LTI Grants 2022

The 2022 LTI Grant was made at the start of 2022 with performance to be tested over a three-year period
against two equally weighted performance hurdles:

PERFORMANCE MEASURE

Relative TSR

OFCF

WEIGHTING

50%

The performance for Relative TSR will be assessed at the end of the three-year performance period relative
to a peer group of ASX 100 listed organisations set at the commencement of the LTI Plan (which excludes
the Energy, Financial, Materials, and Real Estate sectors).

The number of performance rights issued (reflecting the value allocated) was determined by the face value
of the volume weighted average share price (VWAP) of a TPG Telecom ordinary share over the five
working days following announcement of the annual results, which was from 25 February 2022 to 3 March
2022. The VWAP for the 2022 LTI grant of performance rights was approved by the Board at $5.70 per
performance right. The calculation used to determine the number of performance rights at grant for each
Executive KMP, was to divide their maximum LTI dollar package value by the Board approved VWAP share
price. In the case of the CEO, shareholder approval was sought and obtained at the May 2022 Annual
General Meeting.

The table below details the number of performance rights granted under the 2022 LTI and the share price
at the time of grant for those Executive KMP who held that role as at 31 December 2022. Performance
rights are subject to performance hurdles and have no value unless those hurdles are met.

EXECUTIVE KMP

Iñaki Berroeta2
Ana Bordeianu
Kieren Cooney
Grant Dempsey
Jonathan Rutherford
1.
2.

POTENTIAL MAXIMUM
2022 LTI
%
150%
100%
100%
100%
100%

POTENTIAL MAXIMUM
2022 LTI
($)
2,775,000
714,000
900,000
880,000
714,000

SHARE PRICE
AT GRANT ($)

5.70
5.70
5.70
5.70
5.70

NUMBER OF 2022 LTI
PERFORMANCE RIGHTS
GRANTED1
486,842
125,263
157,894
154,385
125,263

Refer to Section 3.4 for how LTI performance is evaluated.
The CEO received shareholder approval for the LTI grant at the 3 May 2022 Annual General Meeting.

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Remuneration report continued

4.4. 2022 LTI Outcome for 2020 VHA LTI Allocation

Existing VHA LTI Plans that were in place for former VHA Executives were retained following the merger
on 26 June 2020. None were in existence for TPG Corporation. The 2020 LTI Plan is the last legacy VHA
plan that remained on foot in 2022.

Under the legacy VHA LTI scheme, performance has been tested annually against two equally weighted
independent tranches. One tranche is subject to meeting OFCF performance targets and the other is
service based, requiring the Executive to still be employed by the Company at the payment date in
February after the end of the third year. In special circumstances (including redundancy, retirement, death
or total and permanent disability or as otherwise agreed), a pro rata payment may be awarded on
termination. Performance of the LTI plan is assessed annually over a three-year period.

The performance period for the 2020 VHA LTI Plan was from 1 January 2020 to 31 December 2022. It
vested (subject to performance hurdles) on 31 December 2022 and with payment made in February 2023.

For the 2020 performance year of the 2020 LTI Plan, the VHA Remuneration Committee, prior to merger
implementation, determined the performance outcome for the first half of 2020 at 125% of the VHA OFCF
target. A subsequent recommendation and decision made by the GRNC and the TPG Telecom Board was
made in relation to 2H 2020 performance at 75% of the TPG Telecom OFCF target.

For the 2021 performance year, OFCF performance was approved by the TPG Telecom Board at 125% of
the TPG Telecom OFCF target of $485 million. For the 2022 performance year, performance was assessed
as at 31 December 2022 and determined to be below threshold of the TPG Telecom OFCF target of
$257 million and the decision was made by the TPG Telecom Board in relation to the outcome of the final
year of the 2020 VHA LTI at 0%.

The table below details the performance outcome for the 2020 LTI Plan.

LTI
GRANT

2020
LTI
1.

PERFORMANCE
PERIOD
START DATE
1 January 2020

PERFORMANCE
PERIOD
END DATE
31 December
2022

PERFORMANCE
YEAR 1

PERFORMANCE
YEAR 2

PERFORMANCE
YEAR 3

OUTCOME
%

99.9%1

125%2

74.97%

Performance for 1H 2020 of the 2020 LTI grant was approved by the VHA Remuneration Committee prior to merger at 125% of target. 2H 2020 was
approved by the TPG Telecom Board at 75% of target.
Performance is based on the OFCF measure with an outcome of $596 million against the TPG Telecom target set at $485 million.

As a result of the approved 2020 LTI plan outcome, the table below outlines the payments to Executive
KMP who held the position as at 31 December 2022, that were paid in February 2023.

The payments will be reflected in the Actual Cash remuneration for these Executive KMP in the 2023
Remuneration Report.

EXECUTIVE KMP

Iñaki Berroeta

Ana Bordeianu

2020 LTI PAYMENT

$962,317

$321,501

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4.5. Total Remuneration Outcomes 2022

The table below details actual total remuneration allocated to Executives (both in cash and the face value
of equity) for 2022 for Executive KMP who held that role as at 31 December 2022. The 2022 LTI allocation
will only have value if the specified hurdles are met.

EXECUTIVE KMP

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Grant Dempsey4

Jonathan Rutherford

2022 FIXED
REMUNERATION $

OTHER
PAYMENTS $1

2022
SHORT TERM
INCENTIVE
ACTUAL $

2022
LTI GRANT
ALLOCATED
VALUE $

2022
ACTUAL TOTAL
REMUNERATION
ALLOCATED $

1,874,430

92,5002

1,558,255

2,775,000

736,597

924,430

831,097

736,097

196,2503

390,911

486,896

438,434

386,271

714,000

900,000

880,000

714,000

6,300,185

1,841,508

2,507,576

2,149,531

1,836,368

1. Other Payments includes payments related to retention and sign on.
2.
3.

Represents the final tranche of the CEO’s contracted retention payment paid in January 2022, as per the CEO’s 2020 contract.
Represents the payment to Kieren Cooney agreed on commencement with the Company for his forfeited STI and LTI as a result of his resignation
from his previous employer. The final payment will occur in September 2023.

4. Grant Dempsey was appointed as CFO on 1 February 2022.

The table below details Actual cash remuneration paid to Executive KMP who held that role as at 31
December 2022.

EXECUTIVE KMP

2022
FIXED
REMUNERATION $

OTHER
PAYMENTS $1

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Grant Dempsey

Jonathan Rutherford

1,874,430

92,5004

736,597

924,430

831,097

736,097

196,2505

2022
SHORT TERM
INCENTIVE
ACTUAL
CASH $2

857,040

215,001

267,793

241,139

212,449

2022
LONG TERM
INCENTIVE
ACTUAL
CASH $3

499,608

157,500

2022
ACTUAL
CASH TOTAL
REMUNERATION $

3,323,578

1,109,098

1,388,473

1,072,236

948,546

1. Other Payments includes payments related to retention and sign on.
2. Represents actual cash payments in March 2023 related to 2022 STI performance outcomes. This excludes the value of DSRs.
3. 2022 Long Term Incentive Actual Cash payments are from 2019 VHA LTI as reported in the 2021 Remuneration Report.
4. Represents the final tranche of the CEO’s contracted retention payment paid in January 2022, as per the CEO’s 2020 contract.
5. Represents the payment to Kieren Cooney agreed on commencement with the Company for his forfeited STI and LTI as a result of his resignation

from his previous employer. The final payment will occur in September 2023.

Additionally in March 2022, Tranche 1 of the CEO’s deferred STI allocation for 2020 vested. This consisted
of 27,355 shares which at the time of allocation were valued at $186,014 (using a share price of $6.80, which
was the VWAP from the five working days from 25 February 2021 to 4 March 2021). This has not been
included in the CEO’s Total Cash Remuneration in the table above.

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Remuneration report continued

4.6. Alignment with Shareholder interests

This section of the Remuneration Report provides an overview of the alignment of the Company’s
performance for FY22 with remuneration outcomes for Executive KMP. The table below is a statutory
reporting requirement.

FINANCIAL1

Service revenue2

EBITDA4

OFCF5

Dividend Paid

Share Price6

NPAT

2018

2,391

1,102

564

2019

2,271

1,178

568

2020

3,295

1,391

361

N/A

7.22

734

2021

4,3723

1,7277

596

288

5.89

1138

2022

4,439

2,135

325

4.89

513

1. Historic performance from 2018 to 2019 relates to TPG Telecom (then VHA) and not to the merged entity. 2020 includes a full
12 months of results for VHA and 6 months and 4 days of contribution from TPG Corporation. Service revenue and EBITDA are
derived from statutory financial statements.

2. Service revenue is customer mobile, fixed broadband, data and internet service revenue and excludes handset, accessories and

other hardware revenue.

3. Refer to Note 2(m) and Note 4 of the financial statements regarding change in presentation of the Consolidated Income

Statement.
EBITDA is defined as earnings after operating costs and before depreciation and amortisation, interest and tax.

4.
5. OFCF is Operating cash flow less capex, finance lease repayments and finance lease interest (within financing costs). It does not

include payments for spectrum and dividends and excludes any loan payments/drawdowns.

6. Represents the closing share price as at 31 December.
7.

EBITDA for 2021 has been restated from $1,731 million to $1,727 million reflecting the change in accounting policy for
government grants that was implemented for the 2022 financial results.

8. NPAT for 2021 has been restated from $110 million to $113 million reflecting the change in accounting policy for government

grants which was implemented for the 2022 financial results.

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Remuneration report continued

5. Looking forward to 2023

5.1. 2023 Fixed Remuneration

For 2023, a comprehensive analysis was undertaken across the ASX 21-60 peer group, based on 2022
data. Consideration was given to movements in market position and telecommunication peers. In addition
to the benchmarking exercise, the GRNC recommendation to the Board considered role size, complexity
and internal relativities. The Board awarded base salary increases to 4 of the 5 Executive KMP. The CEO’s
base salary was increased to $2,000,000 and STI at Target was increased from 100% to 110%. This reflects
not just benchmark data but also that the CEO’s remuneration has not changed since the merger in 2020.

The effective date for the fixed remuneration recommendations will be 1 March 2023, which is consistent
with the rest of the Company. The effective date for the purpose of calculating STI and LTI is 1 January
2023. The table below sets out the CEO and Other Executive KMP fixed remuneration for 2023.

EXECUTIVE KMP

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Grant Dempsey

Jonathan Rutherford

BASE SALARY
$

SUPERANNUATION
$1

2,000,000

785,400

945,000

880,000

785,400

25,292

TOTAL FIXED
REMUNERATION
$

2,025,292

810,692

970,292

905,292

810,692

Superannuation reflects the amount payable up to the statutory superannuation cap which came into effect from 1 July 2022.

5.2. 2023 Short Term Incentive

For Executives who were KMP as at 31 December 2022, the table below shows their potential 2023 STI at
Target and at Maximum as well as the percentage of cash and deferred equity to be potentially allocated
for STI awards. These decisions have been made with reference to overall benchmark data.

EXECUTIVE KMP

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Grant Dempsey

Jonathan
Rutherford

2023 STI
TARGET
% BASE
SALARY

2023 STI
TARGET
$

2023 STI
MAXIMUM
%

2023 STI
MAXIMUM
$

2023 STI
CASH
%

2023 STI
DEFERRED
%

110%

2,200,000

75%

589,050

708,750

660,000

589,050

165.0%

112.5%

3,300,000

883,575

1,063,125

990,000

883,575

50%

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Directors’ report
Remuneration report continued

The allocation of STI will reflect business performance metrics against the 2023 STI scorecard. The key
elements are outlined below and reflect key drivers of shareholder returns that have been set to support
the Company’s strategic priorities based on the annual budget and other strategic priorities as approved
by the Board. The scorecard measures and weighting are consistent with the 2022 STI scorecard.

MEASURE

WEIGHTING AT TARGET

WEIGHTING AT MAXIMUM

Total Service Revenue

OFCF

EBITDA

Customer Experience

Employee Experience

Individual performance achievement

TOTAL

20%

15%

25%

10%

20%

100%

30%

22.5%

37.5%

15%

30%

150%

All targets are subject to Board discretion. The exercise of any discretion will be reported to
shareholders.

5.3. LTI Grants 2023

In considering the performance hurdles for the 2023 LTI plan, the Board sought to improve the alignment
between company performance and long-term incentive outcomes. A review was undertaken which
considered market practice, feedback from shareholders and the extent to which the performance hurdles
were incentivising Executives. As noted in the 2021 Remuneration Report, the Board was considering the
introduction of an Environmental, Social and Governance (ESG) measure for 2023.

The Board approved a change to the performance hurdles for the 2023 LTI plan to reflect shareholder
feedback to more closely align the financial measures with the creation of shareholder value, as well as to
introduce an ESG measure. The two financial measures, equally weighted, are a Return on Capital measure
and Earnings Per Share (EPS). A Return on Capital measure is intended to reward Executives for prudent
management of capital to drive positive and improved financial returns. The EPS measure is aimed at
aligning executive incentives strongly with growth in the value flowing directly to equity holders. The ESG
measure will be linked to renewable energy targets, demonstrating TPG Telecom’s focus on addressing
climate change and aligning with community expectations, including attracting capital.

The 2023 LTI Grant will be made at the start of 2023 with performance tested over a three-year period
against three hurdles. For the 2023 LTI allocation, the VWAP used will be for the five working days from
28 February 2023. This value will also be used for the performance rights granted to the CEO in May 2023,
which will be subject to shareholder approval at the May 2023 Annual General Meeting.

There is no change in the performance hurdles for the 2021 and 2022 LTI Grants which are already in
operation.

PERFORMANCE MEASURE

A Return on Capital Measure

Earnings Per Share (EPS)

ESG – Renewable Energy Target

TOTAL

WEIGHTING

45%

10%

100%

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Directors’ report
Remuneration report continued

The table below shows the LTI Maximum as a percentage of Base Salary for those who were Executive
KMP as at 31 December 2022, proposed to be granted in March 2023.

EXECUTIVE KMP

Iñaki Berroeta1

Ana Bordeianu

Kieren Cooney

Grant Dempsey

Jonathan Rutherford

2023 LTI MAXIMUM %
OF BASE SALARY

150%

100%

2023 LTI
MAXIMUM $

3,000,000

785,400

945,000

880,000

785,400

Shareholder approval for the LTI grant to the CEO will be sought at the May 2023 Annual General Meeting.

6. Remuneration Governance

6.1. Governance responsibilities have been clearly defined.

The Board of Directors of TPG Telecom has oversight of TPG Telecom’s remuneration arrangements and is
accountable for remuneration as well as related policies and processes.

The GRNC undertakes detailed work on remuneration and reports to the full Board through both formal
minutes as well as a verbal report provided to the Board by the Chairman of the GRNC.

The responsibilities of the Board and the GRNC, as defined in the Board and GRNC Charters, are as
follows:

AREA

Executive
remuneration

APPROVED BY BOARD ON
RECOMMENDATION OF GRNC
• Remuneration policies
• Remuneration arrangements for CEO and
Executives and the Company Secretary
Performance and remuneration outcomes
for the CEO and Executives (including
annual or ad-hoc reviews)

•

• Design and outcomes for all employee
incentive plans involving equity in the
Company

• Assessment of performance against STI

Group financial and risk gateways and
individual behavioural gateways

• Gender outcomes to avoid gender or other

ROLE OF GRNC

In addition to making recommendations to the
Board, the GRNC undertakes the following:
• Reviews remuneration policies to ensure they

reflect:
– ASX position and complexity of roles
–
–
–

risks involved
time demands
relevant industry and related benchmarks
• Assesses performance against gateways and

•

STI performance against metrics
Exercises delegated discretions under
employee incentive and equity plans
• Monitors the effectiveness of employee

bias

• Minimum shareholding policy

•

incentive and equity plans
Ensures practices and procedures comply
with legal and ASX requirements and are in
line with current market practices

Non-Executive
Director
remuneration

• Remuneration policies
• Remuneration fees (subject to the
aggregate cap) as approved by
shareholders

• Minimum shareholding policy

• Reviews remuneration reporting to ensure it

complies with legal requirements
• Monitors conformance with minimum

shareholding requirement

• Monitors conformance with minimum

shareholding requirement

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Directors’ report
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6.2. The relevant Board Committee is composed of Non-Executive Directors, who operate independently

of management.

The GRNC consists of four Non-Executive Directors, two of whom, including the Committee Chairman, are
independent Non-Executive Directors. All Committee members have a comprehensive understanding of
the Company and the interaction of remuneration, risk and performance.

NON-EXECUTIVE KMP

ROLE

Helen Nugent

Arlene Tansey

Independent Non-Executive Director, Senior Independent
Director and GRNC Chairman

Independent Non-Executive Director and Audit & Risk
Committee Chairman

Diego Massidda

Non-Executive Director

Frank Sixt

Non-Executive Director

TERM AS KMP

Full year

All members of the GRNC have experience in both human resources and risk to achieve effective
governance of TPG Telecom’s remuneration system. In addition, all members of the GRNC have extensive
experience in remuneration either through their professional background or as members of the
committees of other boards, either in Australia or overseas.

6.3. Effective remuneration governance processes are in operation.

In 2022, the GRNC met six times. Director’s attendance at the meetings is set out in the Directors’ report.
Over that period, the GRNC paid sustained attention to the design and operation of remuneration policies
and practices, including benchmarking for KMP roles, at the same time as being acutely aware of the need
to motivate and retain employees in a highly competitive talent market.

More specifically, the GRNC and the Board have strong processes in place for making remuneration
decisions for senior employees, including Executive KMP, which also involve assiduous management of
conflicts of interest. These processes are rigorously followed both by the GRNC and the Board.

The GRNC also discusses with the CEO the performance of each member of the senior management team,
including Executive KMP.

The GRNC and Board meet without the CEO in attendance to evaluate his performance, with this
conversation supported by a performance report.

6.4. The Board reached its own decision on benchmark information.

A range of benchmark data was sought from independent third parties: Aon Hewitt and Guerdon
Associates, in addition to publicly available information including detailed analysis of ASX annual reports.
This data was considered in detail by the GRNC as input to its recommendations and decision-making and
in determining the relevant ASX peer group.

However, no recommendation, as defined by the Corporations Act 2001 (Cth), was sought from a third
party.

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7. Non-Executive Director Remuneration

Non-Executive Directors are remunerated in ways that support the retention of their independence and
their commitment to performance for shareholders.

7.1. The fees paid to Non-Executive Directors are appropriate.

The maximum aggregate fee pool available for Non-Executive Directors is $2.5 million. Non-Executive
Director fees were determined with reference to the median of the relevant ASX peer group of companies.
For 2022, fees were aligned for the Chairman of the Audit and Risk Committee and the Chairman of the
Governance, Remuneration and Nomination Committee consistent with the responsibilities of the
committees. No further changes were made in 2022. The table below outlines the fees (inclusive of
superannuation) paid to Non-Executive Directors in 2022.

ROLE

Chair

Member

BOARD
$

450,000

165,000

AUDIT AND RISK
COMMITTEE
$

GOVERNANCE, REMUNERATION AND
NOMINATION COMMITTEE
$

50,000

25,000

50,000

25,000

A market review of Board and Committee Chair and Member fees was undertaken in late 2022. Even
though fees were found to be significantly below the market benchmark, no changes are proposed for
Director’s fees in 2023. In making this decision, conflict of interest considerations were assiduously
managed.

The table below outlines the fees (inclusive of superannuation) that will be paid to Non-Executive Directors
for the 2023 financial year.

ROLE

Chair

Member

BOARD
$

450,000

165,000

AUDIT AND RISK
COMMITTEE
$

GOVERNANCE, REMUNERATION AND
NOMINATION COMMITTEE
$

50,000

25,000

50,000

25,000

A Non-Executive Director nominated by a shareholder may elect to have their Director’s fees paid to their
nominating shareholder. For current Non-Executive Directors this includes Canning Fok, Frank Sixt, Pierre
Klotz and Diego Massidda.

Page 51 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

7.2. Non-Executive Directors are required to hold a minimum shareholding of TPG Telecom shares.

To align the interests of the Board with that of shareholders, the Board has a minimum shareholding
requirement for Non-Executive Directors.

Under the minimum shareholding requirement, Non-Executive Directors are required to acquire and
maintain, directly or indirectly, a holding with a value equivalent of one year of base Non-Executive fees
(excluding Committee fees). Each Non-Executive Director may accumulate this value over four years from
the date of the merger or appointment, whichever is later.

The shareholding requirement is reviewed annually. This requirement does not apply to any Non-Executive
Director appointed by a nominating shareholder who does not personally receive Non-Executive Director
fees from the Company. At any point in time, the value of a Non-Executive Director’s minimum holding is
calculated as the higher of the purchase price or current market price.

As at 31 December 2022, all Non-Executive Directors who personally receive fees from the Company have
achieved the minimum shareholding requirement.

In addition, the Board has adopted a share trading policy to ensure Non-Executive Directors comply with
insider trading laws and their trading of TPG Telecom shares. The policy requires Non-Executive Directors
to only trade within defined windows, document all shareholdings, as well as to provide the Company with
written acknowledgement of any trades.

Non-Executive Directors are required to advise the Company Secretary of the purchase price at the time of
purchase.

A breach of policy is regarded seriously by the Board and may constitute a breach of the law, and as such
lead to appropriate action being taken against the Non-Executive Director. The GRNC annually monitors
conformance of Non-Executive Directors with this policy. There were no breaches of this policy in 2022.

Page 52 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8. Appendices

8.1. Executive Service Agreements

The table below sets out the main terms and conditions of the employment contracts of those who were
Executive KMP as at 31 December 2022.

CEO
IÑAKI BERROETA

EXECUTIVE KMP
(EMPLOYED PRIOR TO 1
JANUARY 2022)

EXECUTIVE KMP
(EMPLOYED AFTER 1 JANUARY
2022)

Employee notice period

12 months

TPG Telecom notice period

12 months

6 months

Term of Agreement

Unlimited term

Remuneration Review

Annual

Restraint and non-
solicitation period

Termination arrangements

12 months

Entitled to severance of
6 months’ base salary

Annual

6 months

Annual

6 months

Entitled to severance of 3
months base salary or
statutory entitlement
whichever is greater

As per statutory entitlements

Page 53 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8.2. Executive Statutory Remuneration

Details of remuneration for Executives are set out below in accordance with statutory disclosure requirements under the Corporations Act and the Australian
Accounting Standards. Due to the accounting standards required statutory disclosure does not reflect cash received throughout 2022.

SHORT TERM BENEFITS

POST-
EMPLOYMENT
BENEFITS

OTHER
PAYMENTS

LONG
TERM
BENEFITS

PAYMENTS TO BE SETTLED

NAME

YEAR

BASE
CASH
SALARY

STI CASH1

NON-
MONETARY
BENEFITS2

SUPER-
ANNUATION3

TERMINATION
/ RETENTION /
SIGN-ON
PAYMENTS

LEAVE4

STI TO BE
SETTLED
IN EQUITY5

LTI TO BE
SETTLED IN
CASH &
EQUITY6,7

TOTAL

PERFORMANCE
RELATED
REMUNERATION
(%)

I Berroeta

A
Bordeianu

K Cooney10

2022

1,850,000

857,040

2021

1,850,000

1,100,617

2022

2021

2022

2021

711,667

215,001

700,000

270,692

900,000

267,793

737,260

285,101

18,196

15,335

2,821

36,027

14,374

12,562

24,430

22,631

24,9309

23,131

24,430

22,631

92,5008

(175,538)

616,231

839,386

4,122,245

370,000

30,808

68,389

1,080,099

4,537,879

(32,045)

136,698

262,388

1,321,460

13,660

62,915

374,280

1,480,705

214,06311

(6,923)

158,752

213,745

1,786,234

969,366

66,264

123,419

2,216,603

56%

50%

46%

48%

36%

21%

1. STI Cash includes actual STI amounts relating to the 2022 STI Plan performance year.
2. Non-monetary benefits are inclusive of any relevant fringe benefits tax and includes car parking, medical and health insurance costs, tax support, relocation and permanent residency costs, and corporate hospitality.
3. For Executive KMP employed for the full year, the annual statutory cap has been disclosed. The superannuation amount for KMPs not employed for the full year has been disclosed as the amount actually paid.
4. Leave takes into account the Annual Leave and Long Service Leave movement across 2022.
5. For Equity settled in STI, 50% of the deferred share rights (DSRs) accrued will vest after one year, with the remainder accrued and vesting after two years, both subject to relevant forfeiture conditions. The fair value of the
rights is determined based on the market price of the Company’s shares at year-end, with an adjustment made to take into account the vesting period and expected dividends during that period that will not be received by each
KMP. The fair value of rights granted in prior years included in these figures are determined based on the market price on the grant date, with an adjustment made to take into account the vesting period and expected dividends
during that period that were not received by the KMP. These figures represent all STI plans currently on foot for the Executive KMP.
6. LTI Cash includes the accrued amounts during the year relating to the 2022 performance year of the 2020 VHA LTI Plan Award. The 2019 VHA LTI Plan Award is reflected in the Actual Cash remuneration in this report. The full
payment of the 2020 VHA LTI Plan award will be reflected in the Actual Cash remuneration in the 2023 Remuneration Report.
7. Performance share rights (PSRs) for 2022, subject to meeting hurdles, will vest on 31 March 2025. The total number of PSRs to be allocated was calculated based on the five-day VWAP of $5.70 over the period of 25 February
2022 and 3 March 2022. The fair value of these rights was determined for the grants dates of 3 & 5 May 2022 using: i) the Monte-Carlo model for the relative total shareholder return (rTSR) hurdle and ii) the Black-Scholes model
for the Operating Free Cash Flow (OFCF) hurdle.
8. The CEO’s Other Payments include the final of six retention payments of $92,500 each made across 2020, 2021 and 2022.
9. Superannuation includes an additional $500 superannuation payment related to TPG Telecom’s Super Bump program where all female employees with over 12 months tenure are provided an additional $500 superannuation
annually.
10. 2022 represents a full year as Executive KMP. 2021 reflects part year service from 8 March 2021 to 31 December 2021.
11. Represents the payment received in 2022 and the accrual of an amount to be paid in 2023, agreed on commencement with the Company related to the forfeiture of incentives. The final payment will occur in September
2023.

Page 54 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

POST-
EMPLOYMENT
BENEFITS

OTHER
PAYMENTS

LONG
TERM
BENEFITS

PAYMENTS TO BE SETTLED

LEAVE4

STI TO BE
SETTLED
IN EQUITY5

LTI TO BE
SETTLED IN
CASH &
EQUITY6,7

TOTAL

PERFORMANCE
RELATED
REMUNERATION
(%)

SHORT TERM BENEFITS

BASE
CASH
SALARY

48,333

96,932

STI CASH1

11,284

28,834

806,667

241,139

711,667

212,449

303,014

117,176

NON-
MONETARY
BENEFITS2

SUPER-
ANNUATION3

2,563

57,742

17,163

4,833

3,939

24,430

11,725

TERMINATION
/ RETENTION /
SIGN-ON
PAYMENTS

21,726

91,28614

673,151

262,529

14,747

21,735

755,945

14,517

576,986

223,122

14,747

21,735

538,230

9,995

157,260

620,548

3,235

12,688

93,133

4,874

175,000

18,571

7,917

4,610

1,614

7,267

6,701

8,918

38,897

85,245

201,206

33,197

80,386

152,042

1,429,147

21,969

107,330

174,417

1,310,004

15,177

33,333

497,588

92,312

1,834,936

305,841

1,690,656

340,369

659,724

32%

37%

33%

38%

33%

19%

31%

45%

34%

2022 5,028,334

1,804,706

127,483

397,849

(154,730)

1,106,664

1,650,896

10,054,335

2021

5,715,151

2,288,071

129,067

150,972

2,830,267

78,511

219,446

2,048,181

13,459,666

NAME

YEAR

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

S Crowley12

G
Dempsey13

J
Rutherford15

C Levy

D Lloyd

E Aris

S Banfield

Total

12. Represents remuneration received during period as KMP from 1 November 2021 to 31 January 2022.
13. Represents remuneration received during period as KMP in 2022, commencing 1 February 2022.
14. Represents the accrual of an amount to be paid in 2023, agreed on commencement with the Company related to the forfeiture of incentives. The payment will be reflected in the Actual Cash Remuneration in the 2023
Remuneration Report.
15. 2022 represents a full year as Executive KMP. 2021 reflects part-year service from 27 July 2021 to 31 December 2021.

Page 55 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8.3. Non-Executive Director Statutory Remuneration

Details of remuneration for Non-Executive Directors are set out below in accordance with statutory
disclosure requirements under the Corporations Act and the Australian Accounting Standards. This
statutory disclosure does not necessarily reflect cash received throughout 2022.

SHORT-TERM
BENEFITS

POST-EMPLOYMENT
BENEFITS

NAME

YEAR

CASH
SALARY
AND FEES

NON-
MONETARY
BENEFITS

SUPERANNUATION

TERMINATION
BENEFITS

TOTAL

450,000

382,880

173,333

181,667

190,000

185,000

165,000

126,141

240,000

230,000

206,667

193,333

240,000

235,000

165,000

126,141

108,164

37,972

- 1,995,000

- 1,971,300

C Fok

P Klotz

D Massidda

R Millner

A Moffatt

Dr H Nugent
AC

F Sixt

A Tansey

J Teoh

D Teoh

S Teoh

Total

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

450,000

382,880

173,333

181,667

190,000

185,000

149,661

150,340

149,661

114,855

217,688

209,564

206,667

193,333

228,597

214,120

149,661

114,855

98,780

34,678

1,915,268

1,880,073

15,339

14,660

15,339

11,286

22,312

20,436

11,403

20,880

15,339

11,286

9,384

3,294

79,732

91,227

Page 56 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8.4. Equity Movements

The table below provides movements in equity during the financial year for Non-Executive Directors and
Executives who were KMP for all or part of 2022. The numbers in the table reflect equity holdings and
movements only for the period the Non-Executive Director or Executive was KMP.

NAME

Canning Fok

Pierre Klotz

Diego Massidda

Robert Millner

Antony Moffatt

Dr Helen Nugent AC

Frank Sixt

Arlene Tansey

Jack Teoh

Iñaki Berroeta

Ana Bordeianu

Kieren Cooney

Sean Crowley1

Grant Dempsey2

Jonathan Rutherford

HOLDING AT START
OF TERM AS KMP IN
2022

GRANTED AS
REMUNERATION

PURCHASED /
(SOLD)

BALANCE AT END OF
TERM AS KMP IN
2022

8,573,058

611,269

11,000

20,000

133,258

116,000

27,355

100,000

8,673,058

611,269

17,000

5,000

28,000

25,000

133,258

143,355

Sean Crowley was KMP (Interim CFO) for the period 1 January 2022 to 31 January 2022.

1.
2. Grant Dempsey was appointed KMP on 1 February 2022.

Page 57 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8.5. Additional Statutory Information

Terms and conditions of the share-based payment arrangements

Terms and conditions of each grant of Share Rights to the Executive KMP in a current or future reporting
period are as follows:

GRANT DATE

VESTING DATE

EXPIRY DATE

STI Deferred Share Rights

6 May 2021

3 & 5 May 2022

31 March 2022

31 March 2023

31 March 2024

31 March 2023

31 March 2024

31 March 2025

FAIR VALUE PER
SHARE RIGHT AT
GRANT DATE

NUMBER OF SHARE
RIGHTS AT GRANT
DATE

%
VESTED

$4.80

$5.47

$5.26

27,355

27,354

113,808

113,805

100%

FAIR VALUE
PER SHARE
RIGHT AT
GRANT DATE

NUMBER OF
SHARE RIGHTS
AT GRANT DATE

%
VESTED

GRANT DATE

VESTING DATE

EXPIRY DATE

HURDLE

LTI Performance Share Rights

6 May 2021

31 March 2024 31 March 2025

24 September 2021

31 March 2024 31 March 2025

24 September 2021

31 March 2024 31 March 2025

3 May 2022

5 May 2022

31 March 2025 31 March 2026

OFCF

rTSR

OFCF

rTSR

OFCF

rTSR

OFCF

rTSR

$4.80

$1.26

$6.54

$2.73

$5.07

$3.02

$5.07

$2.98

381,162

381,159

73,751

73,750

299,720

299,716

243,421

Page 58 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

Reconciliation of shares rights and ordinary shares held by KMP

The table below shows how many share rights were granted, vested and forfeited during the year.

NAME

GRANT
TYPE1,2

BALANCE
AT START
OF YEAR
(NUMBER)

GRANTED
DURING
YEAR
(NUMBER)

VESTED
(NUMBER)

VESTED
(%)

FORFEITED
(NUMBER)

FORFEITED
(%)

BALANCE AT
END OF THE
YEAR
(UNVESTED)
(NUMBER)

54,709

27,355

50%

2020 DSR

2021 DSR

2021 LTI

2022 LTI

2021 DSR

2021 LTI

2022 LTI

2021 DSR

2021 LTI

2022 LTI

2021 DSR

2021 LTI

2022 LTI

2021 DSR

2021 LTI

2022 LTI

2021 DSR

2021 LTI

I
Berroeta

A
Bordeianu

K
Cooney

S
Crowley

G
Dempsey

J
Rutherford

128,727

408,088

486,842

31,659

102,941

125,263

33,345

132,352

30,705

157,894

20,178

36,631

154,385

13,704

44,560

2022 LTI

-
DSR includes 2021 STI deferred share rights.
PSR includes 2021 and 2022 performance rights.

1.
2.

125,263

27,354

128,727

408,088

486,842

31,659

102,941

125,263

33,345

132,352

157,894

20,178

30,705

36,631

154,385

13,704

44,560

125,263

Page 59 | TPG Telecom Annual Report 2022

Directors’ report
Remuneration report continued

8.6. Related Party Transactions

There are no related party transactions in 2022 and no loans were made to any KMP.

This concludes the Remuneration Report, which has been audited as required by section 308(3C) of the
Corporations Act 2001 (Cth).

This Directors’ report is made in accordance with a resolution of the Directors on 27 February 2023.

Fok Kin Ning, Canning
Chairman
27 February 2023

Iñaki Berroeta
Chief Executive Officer and Managing Director
27 February 2023

Page 60 | TPG Telecom Annual Report 2022

Auditor’s independence declaration

Page 61 | TPG Telecom Annual Report 2022

Financial report

About this report

Contents

The Financial Report covers the group consisting of
TPG Telecom Limited and its controlled entities.

All amounts are presented in Australian dollars
unless stated otherwise.

TPG Telecom Limited is a company limited by
shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:

Level 1, 177 Pacific Highway North Sydney NSW
2060

A description of the nature of the Group’s
operations and its principal activities is included in
the Directors’ report on pages 4 to 60.

The financial report was authorised for issue by the
Directors on 27 February 2023. The Directors have
the power to amend and reissue the financial
report.

Financial Statements
Consolidated Income Statement
Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows

64
65
66
67

Notes to the Consolidated Financial Statements
68
Note 1. Reporting entity
68
Note 2. Basis of preparation
Note 3. Segment reporting
74
Note 4. Revenue from contracts with customers 76
78
Note 5. Other profit and loss items
79
Note 6. Income tax
83
Note 7. Earnings per share
83
Note 8. Cash and cash equivalents
86
Note 9. Trade and other receivables
Note 10. Inventories
88
Note 11. Derivative financial instruments and
hedge accounting
88
Note 12. Interests in other entities
91
Note 13. Tower assets sale transaction
95
95
Note 14. Property, plant and equipment
Note 15. Right-of-use assets and lease liabilities 98
102
Note 16. Intangible assets
107
Note 17. Trade and other payables
108
Note 18. Borrowings
108
Note 19. Provisions
110
Note 20. Other liabilities
110
Note 21. Contributed equity
111
Note 22. Reserves
112
Note 23. Dividends
112
Note 24. Related party transactions
114
Note 25. Share-based payments
117
Note 26. Commitments and contingencies
118
Note 27. Parent entity financial information
120
Note 28. Deed of cross guarantee
122
Note 29. Financial risk management
Note 30. Auditor’s remuneration
128
Note 31. Events occurring after the reporting
period

129

Directors’ Declaration

Independent Auditor’s Report

130

131

Page 62 | TPG Telecom Annual Report 2022

Consolidated income statement
for the year ended 31 December 2022

Revenue from contracts with customers

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Technology costs

Employee benefits expense

Other operating expenses

Earnings before interest, tax, depreciation and amortisation

Depreciation and amortisation expense

Results from operating activities

Finance income

Finance expenses

Net financing costs

Profit before income tax

Income tax expense

Profit for the year

Attributable to:

Owners of the Company

NOTES

2022

5,415

438

2021
Restated*
$m

5,292

(1,636)

(1,655)

(974)

(363)

(377)

(368)

(891)

(358)

(377)

(325)

2,135

1,727

(1,389)

(1,415)

746

(189)

(187)

559

(46)

513

312

(150)

(149)

163

(50)

113

2022

2021

CENTS
PER
SHARE

Earnings per share for profit attributable to owners of the Company

Basic earnings per share

Diluted earnings per share

*Refer to Note 2(l) for restatement.

27.6

6.1

The above consolidated income statement should be read in conjunction with the accompanying notes.

Page 63 | TPG Telecom Annual Report 2022

Consolidated statement of comprehensive income
for the year ended 31 December 2022

Profit for the year

Other comprehensive income

Items that may subsequently be reclassified to the income statement,
net of tax:

Net gain on cash flow hedges taken to equity

Other comprehensive income for the year, net of tax

Total comprehensive income for the year

Attributable to:

Owners of the Company

2022

513

2021
Restated*
$m

113

515

114

515

114

*Refer to Note 2(l) for restatement.

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
notes.

Page 64 | TPG Telecom Annual Report 2022

Consolidated statement of financial position
as at 31 December 2022

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Prepayments and other assets

Total current assets

Non-current assets

Trade and other receivables

Property, plant and equipment

Right-of-use assets

Intangible assets

Deferred tax assets

Derivative financial instruments

Prepayments and other assets

Total non-current assets

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Contract liabilities

Lease liabilities

Provisions

Other liabilities

Total current liabilities

Non-current liabilities

Contract liabilities

Borrowings

Lease liabilities

Provisions

Other liabilities

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Contributed equity

Reserves

Accumulated losses

Equity attributable to owners of the Company

Total equity

*Refer to Note 2(l) for restatement.

2022

NOTES

2021
Restated*
$m

114

681

155

1,033

358

3,580

1,527

202

476

833

204

3,401

1,294

12,663

13,144

183

261

18,333

19,366

18,331

19,164

1,185

283

1,118

281

108

1,732

1,643

3,690

1,872

5,734

7,466

4,290

1,359

5,801

7,444

11,900

11,720

18,399

(3)

(6,496)

(6,684)

11,900

11,720

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

Page 65 | TPG Telecom Annual Report 2022

Consolidated statement of changes in equity
for the year ended 31 December 2022

ATTRIBUTABLE TO OWNERS OF THE
COMPANY

CONTRIBUTED
EQUITY
$m

NOTES

RESERVES
$m

ACCUMULATED
LOSSES
$m

TOTAL
EQUITY
$m

Balance at 1 January 2022 (restated*)

18,399

Profit for the year

Other comprehensive income, net of tax

Employee share schemes – value of
employee services

Acquisition of treasury shares

Dividends paid

Balance at 31 December 2022

Balance reported at 1 January 2021

Opening restatement*

Balance at 1 January 2021 (restated*)

Profit for the year

Other comprehensive income, net of tax

Employee share schemes – value of
employee services

Dividends paid

18,399

Balance at 31 December 2021 (restated*)

18,399

*Refer to Note 2(l) for restatement.

(14)

(3)

(6,684)

11,720

513

(325)

513

(14)

(325)

(6,496)

11,900

(6,508)

(1)

(6,509)

113

11,892

11,891

113

(288)

(6,684)

11,720

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Page 66 | TPG Telecom Annual Report 2022

Consolidated statement of cash flows
for the year ended 31 December 2022

Cash flows from operating activities

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Income taxes paid

2022

NOTES

2021
Restated*
$m

5,652

5,715

(4,401)

(4,089)

1,251

1,626

(4)

Net cash generated from operating activities

8(b)

1,251

1,622

Cash flows from investing activities

Payments for property, plant and equipment

Payments for spectrum licenses

Receipts on sale of tower assets

Receipts on sale of spectrum licenses

Payments for intangible assets

Loan repayment from Tech2

Interest received

Net cash outflows from investing activities

Cash flows from financing activities

Proceeds from borrowings

Repayment of borrowings

Principal elements of lease payments

Payments for shares acquired by the TPG Employee Incentive Plan Trust

Finance costs paid

Dividends paid

Net cash outflows from financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

*Refer to Note 2(l) for restatement.

(745)

(31)

892

(602)

(106)

(216)

(224)

(97)

(915)

470

1,420

(1,070)

(1,460)

(123)

(14)

(180)

(325)

(1,242)

(88)

202

114

(139)

(158)

(288)

(625)

120

202

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

Page 67 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements

Note 1. Reporting entity

TPG Telecom Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s
registered office is Level 1, 177 Pacific Highway, North Sydney NSW 2060. The consolidated financial
statements as at, and for the year ended 31 December 2022 (referred to throughout this report as ‘2022’),
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 involved in the provision of telecommunications services.

Note 2. Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations
Act 2001.

The consolidated financial statements of the Group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements are presented without the parent entity financial statements.
Disclosures in relation to the parent entity required under paragraph 295(3)(a) of the Corporations Act
2001 have been included in Note 27.

The financial statements are prepared in accordance with the historical cost convention, except for unsold
handset and accessory receivables, derivative financial instruments and assets held for sale, which, as
noted, are at fair value. Unless otherwise stated, the accounting policies adopted are consistent with those
of the previous year.

(a) Net current asset deficiency

At 31 December 2022, the Group had a deficiency of net current assets of $699 million (2021: a deficiency
of $810 million). The Group is satisfied that it will be able to meet all its obligations as and when they fall
due, supported by its history of generating positive operating cash flows, its current cash reserves, and
available debt facilities.

(b) Principles of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries). Subsidiaries are all entities over which the Company has
control. The Company controls an entity when the Company is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity.

The acquisition method of accounting is used to account for business combinations by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are
deconsolidated from the date that control ceases.

All intercompany transactions, balances and unrealised gains on transactions between companies within
the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of
an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated
Income Statement, Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet
respectively.

Page 68 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

Ordinary shares are classified as equity. Shares held by the TPG Employee Incentive Plan Trust are
disclosed as treasury shares and deducted in the reserves.

(d) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the acquisition
of a subsidiary company comprises:
•
•
• equity interest issued by the Group,
•
•

fair value of any assets or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.

fair values of assets transferred,
liabilities incurred to the former owners of the acquired business,

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the:
• consideration transferred,
•
•

amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the
net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the business acquired, the difference is recognised in the Consolidated
Income Statement as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of acquisition. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in the
Consolidated Income Statement.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains
or losses arising from such remeasurement are recognised in the Consolidated Income Statement.

(e) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. It has been determined the Board of directors is the chief operating decision
maker, as they are ultimately responsible for allocating resources and assessing performance.

Page 69 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(f) Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group’s subsidiaries are measured using the
currency of the primary economic environment in which the entity operates (the ‘functional currency’). The
consolidated financial statements are presented in Australian dollars, which is the Company’s functional
and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the Consolidated Income Statement
except when they relate to financial instruments qualifying for hedges as set out in Note 11.

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 at fair value are translated to Australian dollars at foreign
exchange rates ruling at the dates the fair value was determined.

Foreign operations

The assets and liabilities of foreign operations are translated to Australian dollars 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 reserve in equity.

(g) Goods and Services Tax (‘GST’)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the cost of
acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or
payables in the Consolidated Statement of Financial Position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.

(h) Rounding of amounts

The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’
of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial
report have been rounded off to the nearest million dollars in accordance with the instrument, unless
otherwise indicated.

Page 70 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(i) Update on COVID-19

The FY21 results were impacted by COVID-19 as a result of the containment policies, restrictions and
measures put in place to limit movement both domestically and internationally which materially affected
inbound related connections, visitor revenue and international roaming revenue of the Group during 2021.

The Group has considered the impact of the COVID-19 pandemic on the financial statements for the year
ended 31 December 2022. FY22 saw the re-opening of international borders and a cessation of most
restrictions. As a result, visitor and international roaming revenue as well as inbound migrations are
beginning to return to pre-COVID levels. Consequently, the impacts occurring in the FY21 results started
to reverse in FY22 and there were no new and/or emerging material impacts to the Group’s results or
operations arising from COVID-19 for the year ended 31 December 2022.

(j) New accounting standards and Interpretations

New and amended standards adopted by the Group

A number of new or amended standards became applicable for the current reporting period. The Group
did not have to change its accounting policies or make retrospective adjustments as a result of adopting
these standards.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 31
December 2022 reporting periods and have not been early adopted by the Group. Those which may be
relevant to the Group and its financial impact are set out below.
• Lease liability in sale and leaseback (Amendments to AASB 16 Leases)

Amendments to AASB 16 Leases impact how a seller-lessee accounts for variable lease payments that
arise in a sale-and-leaseback transaction. The amendments introduce a new accounting model for
variable payments and will require seller-lessees to reassess and potentially restate sale-and-leaseback
transactions entered into since 2019. The amendments are effective for annual reporting periods
beginning on or after 1 January 2024, with earlier application permitted.

The Group is currently assessing the financial impact of the Amendments to AASB 16.

• Classification of liabilities as current or non-current (Amendments to AASB 101 Presentation of

Financial Statements)

The amendments, as issued in 2020, aim to clarify the requirements on determining whether a liability
is current or non-current, and apply for annual reporting periods beginning on or after 1 January 2023.
However, the IASB has subsequently proposed further amendments and the deferral of the effective
date of the 2020 amendments to no earlier than 1 January 2024.

Due to these ongoing developments, the Group is unable to determine the impact of these
amendments on the consolidated financial statements in the period of initial application. The Group is
closely monitoring the developments.

• Other standards

The following new and amended standards are not expected to have a significant impact on the
Group’s consolidated financial statements:
• AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies

and Definition of Accounting Estimates

Page 71 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(k) Key accounting estimates and judgements

Summary of key accounting estimates and judgements

The preparation of financial statements requires the use of accounting estimates, which, by definition, will
seldom equal the actual results. The Group also needs to exercise judgement in applying its accounting
policies.

Information about significant areas of estimation uncertainties and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial
statements is provided in the following notes:
• Note 6
• Note 9
• Note 9
• Note 13
• Note 14
• Note 15
• Note 16
• Note 16
• Note 17

Recognition of deferred tax assets
Loss allowance on trade and other receivables
Recognition of unbilled handset and accessories revenue
Fair value of assets sold
Useful lives of property, plant and equipment
Lease terms and incremental borrowing rates
Useful lives of intangible assets
Determination of the Group’s cash generating units
Impairment of intangible assets with indefinite lives

Estimates and judgements are continually evaluated. They are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Group and that are
believed to be reasonable under the circumstances.

(l) Voluntary changes in accounting policy – Government Grants

The Group has decided to voluntarily amend the accounting policy for government grants.

Historically, government grants have been recognised as deferred revenue in the Consolidated Statement
of Financial Position, and subsequently recognised in Other Income in the Consolidated Income Statement
over the useful life of the asset. The new accounting policy deducts the grant in arriving at the carrying
amount of the asset, rather than being disclosed as Other Income in the Consolidated Income Statement.

The Group receives grants from the government which are considered, in substance, funding to develop
and maintain assets. The assets are usually for assistance with emergency response, data collection or to
provide stronger coverage in rural areas. The Group’s view is that the new accounting policy more clearly
represents TPG’s actual costs to develop and operate these assets and is therefore more relevant.

Note that both policies are acceptable under the Australian Accounting Standards.

Page 72 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(l) Voluntary changes in accounting policy – Government Grants continued

The change in accounting policy results in the following changes to the prior period amounts:

OTHER

INCOME

DEPRECIATION
AND
AMORTISATION
EXPENSE

INCOME
TAX
EXPENSE

PROPERTY,
PLANT AND
EQUIPMENT

DEFERRED
TAX
ASSETS

OTHER
LIABILITIES
(CURRENT)

ACCUMULATED
LOSSES

Opening
balance at
1 January 2021

Impact of
change in
accounting
policy

Opening
balance at
1 January 2021
(restated)

Disclosed
amount at
31 December
2021

Impact of
change in
accounting
policy

Disclosed
amount at
31 December
2021 (restated)

3,258

264

(6,508)

(20)

(19)

(1)

3,238

264

(6,509)

1,423

3,422

262

(6,686)

(4)

(8)

(21)1

(1)

(24)

1,415

3,401

261

(6,684)

Property, plant and equipment impact of $21 million outlined in Note 14 comprises a $54 million reduction in the cost base
and a $33 million reduction for accumulated depreciation within network equipment and infrastructure assets.

All prior period balances have been restated in the financial report to reflect the updated balances. The
Group has adopted the new accounting policy from 1 January 2022.

All prior period balances in Note 27 Parent entity financial information and Note 28 Deed of cross
guarantee have been restated to reflect the impact of change in accounting policy noted above.

(m) Change in presentation of the Consolidated Income Statement

The Consolidated Income Statement has been amended to provide further information on the breakdown
of costs. The amendment has resulted in balances not directly being attributed to cost of sales to be
reclassified to technology costs, employee benefits expense or other operating expenses.

These amendments have been made to enhance comparability for both the current year and prior year
comparative balances and better reflect the Group’s view on the business’ operations.

Page 73 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 3. Segment reporting

(a) Basis for segmentation

The Group has the following two reportable segments which are managed and organised separately
because they require different product and service offerings to address different segments in the market.
The organisational structure for these segments include dedicated, sales, marketing and customer care
teams, that are supported by the technology and support functions within the Group. The following
summary describes the operations of each reportable segment.

SEGMENT

PRINCIPAL ACTIVITIES

Consumer

Provision of telecommunications services to residential and SOHO customers.

Enterprise,
Government and
Wholesale

Provision of telecommunications services to corporate, government and wholesale customers.

Mobile SME customers have been categorised in this segment.

In the current year, the ‘Corporate’ segment was formally renamed to the ‘Enterprise,
Government and Wholesale’ segment.

The Board of directors and executive management primarily use a measure of segment result to assess the
performance of the operating segments. Consistent with information presented for internal management
reporting, the result of each operating segment is measured based on its EBITDA contribution, which
differs from our reported EBITDA. Information about segment revenue is disclosed in Note 4.

Segment result excludes discontinued operations and effects of significant items of income and
expenditure which may have an impact on the quality of earnings such as restructuring costs, legal
expenses and impairments where the impairment is the result of an isolated, non-recurring event. It also
excludes the effects of unrealised gains or losses on financial instruments.

Unallocated items include net financing costs, depreciation and amortisation costs, certain head office
costs, other extraordinary incomes and other one-off transactions. There were no one-off transactions that
met the quantitative thresholds for reportable segments in 2022 and 2021.

Interest income and finance costs are not allocated to segments, as this type of activity is driven by the
central treasury function, which manages the cash position of the Group.

Page 74 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 3. Segment reporting continued

(b) Information about reportable segments

CONSUMER

For the year ended 31 December 2022

Revenue from contracts with customers

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Segment gross margin

Segment EBITDA

Unallocated items

Net financing costs

Depreciation and amortisation

Head office costs

Gain on sale of tower assets

Other income

One-off restructuring costs

Profit before tax from continuing operations

For the year ended 31 December 2021 (Restated**)

Revenue from contracts with customers

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Segment gross margin

Segment EBITDA

Unallocated items

Net financing costs

Depreciation and amortisation

Head office costs

Other income (Restated*)

Profit before tax from continuing operations

*Refer to Note 2(l) for restatement.

4,417

(1,449)

(878)

2,090

1,276

4,306

(1,457)

(802)

2,047

1,223

ENTERPRISE,
GOVERNMENT AND
WHOLESALE
$m

998

(185)

(96)

724

490

986

(195)

(89)

720

480

CONSOLIDATED

5,415

(1,634)

(974)

2,814

1,766

(187)

(1,389)

(2)

402

(60)

559

5,292

(1,652)

(891)

2,767

1,703

(149)

(1,415)

163

**Refer to Note 2(m) for change in presentation of the Consolidated Statement of Comprehensive income.

Page 75 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 3. Segment reporting continued

The majority of the Group’s revenues are derived from Australian based entities, and no single customer
generates revenue greater than 10% of the Group’s total revenue. A geographic analysis of the Group’s
non-current assets is set out below:

Australia

Other

2022

18,075

258

18,333

2021
Restated*
$m

18,063

268

18,331

‘Other’ predominantly relates to submarine cables located in international waters.

Note 4. Revenue from contracts with customers

Revenue is recognised when (or as) the Group satisfies a performance obligation by transferring a
promised good or service to a customer. Revenue is measured based on the consideration specified in a
contract with a customer. Revenue is presented net of GST, rebates and discounts.

Revenue arrangements with multiple deliverables

Goods and services may be sold separately or in bundled packages. For bundled packages, e.g., mobile
devices and monthly service fees, the Group accounts for revenue from individual goods and services. The
consideration for the bundled packages comprises cash flows from the customers (expected to be
received) in relation to goods and services delivered over the contract term. The consideration
(transaction price) is allocated between separate goods and services in a bundle based on their relative
stand-alone selling prices. If an observable price is available, it is used to determine the stand-alone selling
price. In the absence of observable prices, the Group uses various estimation methods, including an
adjusted market assessment and cost plus margin approach, to arrive at a stand-alone selling price. The
Group has determined that the estimated prices are largely aligned to the stand-alone selling prices.

Where a discount is provided to the customer for bundled packages they are recognised in proportion
with the hardware and service equivalent stand-alone prices.

Service revenue - Telecommunication services

The Group sells telecommunication services of the following nature: post-paid and prepaid mobile
services, fixed data, internet and voice services, device replacement services and content services.
Telecommunication services include monthly access charges for voice, messaging and data services, fees
for connecting users of fixed line and other mobile providers to the network and agreements entered into
with other telecommunications networks.

Revenue from telecommunication services is measured based on the consideration specified in a contract
with a customer. The Group recognises service revenue over time in the accounting period in which the
services are rendered, as customers simultaneously receive and consume the benefits from the services
provided. Revenue is recognised based on output measures of the value to the customer of goods or
services transferred to date, such as minutes, texts, amount of data consumed or time elapsed. Given the
evolution of products towards the provision of unlimited services, time elapsed is the measure that is the
most applied.

Set-up revenue for certain products does not satisfy the definition of a performance obligation and is
treated as part of the total contract price and allocated over the identified performance obligations.
Certain equipment used to deliver services are accounted for as either an asset or fulfillment cost if the
equipment is not a promised good or service to be transferred to customers. Revenue from content
services is recognised on a net basis when the Group acts as agent.

Page 76 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 4. Revenue from contracts with customers continued

Hardware revenue

Revenue from the sale of handsets, modems and accessories is recognised at a point in time when the
handsets, modems and accessories are delivered, the legal title has passed, and the customer has
accepted the goods.

For mobile devices sold in bundled contracts, customers are offered a no lock in (monthly) service plan.
Customers have two options for payment – full payment at the commencement of the contract or
instalments. A receivable is recognised for handset and accessories instalment plans. If a customer cancels
their no lock in service plan, any outstanding hardware balance becomes payable immediately. The Group
has determined no significant financing component exists for bundled contracts with monthly handset and
accessories repayments. Factors such as the hardware device retail price, the significance of financing
within the contract as a whole and the duration of the deferred payment terms have been considered.

The total transaction price for hardware revenue paid through instalments is subject to risks around
collectability, impacts of new plans and industry trends. Accordingly, judgement is used to estimate the
impacts of these risks at the time of sale using a portfolio estimate.

(a) Major product categories

TIMING OF
REVENUE
RECOGNITION

CONSUMER

ENTERPRISE,
GOVERNMENT AND
WHOLESALE

TOTAL

Mobile – Post-paid

Mobile – Prepaid

Over time

Fixed (including data and internet)

Over time

Other service revenue

Over time

2022

1,347

449

1,738

Handsets, accessories and other
hardware

Point in time

877

2021
Restated*
$m

1,319

439

1,717

827

2022

175

634

2021
Restated*
$m

2022

2021
Restated*
$m

172

1,522

449

643

2,372

976

1,491

439

2,360

920

4,417

4,306

998

986

5,415

5,292

*Refer to Note 2(m) for change in presentation of the Consolidated Statement of Comprehensive income.

(b) Assets and liabilities related to contracts with customers

Contract assets (referred to as trade receivables) are amounts due from customers for goods and services
performed in the ordinary course of business. Trade receivables are recognised initially at the amount of
consideration that is unconditional less loss allowance. Refer to Note 9 for further details.

Contract costs are recognised as an asset and expensed over the expected life of a customer contract
consistent with the transfer of the goods and services to which the capitalised costs relate to deliver the
customer contract. Refer to Note 16 for further details.

Contract liabilities relate to unearned revenue. Unearned revenue arises from consideration received from
prepaid services which have not been utilised, or from post-paid services which have not yet been
provided. Contract liabilities relating to prior year released during the year were $278 million (2021: $258
million).

Contract liabilities

2022

2021

301

298

Page 77 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 5. Other profit and loss items

(a) Other income

Gain on sale of tower assets (refer to Note 13)
Gain on sale of spectrum
Other income

(b) Employee benefits expense

Superannuation expense
Redundancy costs
Other employee benefits expense

Advertising and promotion expenses
Consulting and outsourced services costs
Facilities expenses
Transaction costs associated with the merger
Administration and other expenses

(d) Depreciation and amortisation expense

Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets

*Refer to Note 2(l) for restatement.

(e) Net financing costs

Finance income

Interest income

Finance expenses

Amortisation of borrowing costs
Interest and finance charges for borrowings and lease liabilities

Page 78 | TPG Telecom Annual Report 2022

2022

402
-
36
438

2021
Restated*
$m
-
7
34
41

2022
$m
33
18
326
377

2022
$m
122
155
36
-
55
368

2022

554
143
692

2021
$m
33
9
335
377

2021
$m
110
130
36
(4)
53
325

2021
Restated*
$m
607
141
667

1,389

1,415

2022
$m

2021
$m

(2)

(1)

6
183
187

9
141
149

Notes to the consolidated financial statements continued

Note 6. Income tax

The consolidated current tax payable or recoverable is based on taxable profit for the year. Taxable profit
differs from profit reported in the Consolidated Income Statement because some items of income or
expense are taxable or deductible in different periods or may never be taxable or deductible. The Group’s
liability for current tax is calculated using Australian tax rates (and laws) that have been enacted or
substantively enacted by the reporting date.

Tax is charged or credited to the Consolidated Income Statement, except when it relates to items charged
or credited directly to equity, in which case the tax is also recognised directly in equity.

For tax purposes, with effect from 13 July 2020, the wholly owned Australian subsidiaries acquired as part
of the merger with TPG Corporation entered the tax consolidated group, of which the Company is the
head entity, in accordance with Australian taxation law. The tax sharing agreement entered into between
the entities within the tax consolidated group provides for the determination of the allocation of the
income tax liabilities between entities should the head entity default in its tax payment obligations or if an
entity should leave the tax consolidated group. The effect of the tax sharing agreement is that the
company’s liability for tax payable by the tax consolidated group is limited to the amount payable to the
head entity under the tax funding arrangement.

(a) Income tax expense

Current tax

Current tax expense on profit for the period

Adjustments for current tax in respect of prior periods

Total current tax expense

Deferred tax

Decrease / (increase) in deferred tax assets

Increase / (decrease) in deferred tax liabilities

Adjustments for deferred tax of prior periods

Total deferred tax expense/(benefit)

Income tax expense/(benefit)

*Refer to Note 2(l) for restatement.

2022

NOTES

2021
Restated*
$m

(44)

(30)

(2)

(19)

(2)

6(d)

Page 79 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 6. Income tax continued

(b) Numerical reconciliation between tax expense and pre-tax accounting profit

Profit from operations before income tax

Income tax expense using the Australian tax rate of 30% (2021: 30%)

Tax effect of amounts which are (not deductible)/taxable in calculating taxable income:

Non-deductible expenses

Under/over from prior periods

Initial recognition of deferred tax balances related to tower sale

Tax expense differential between accounting gain and capital gain on tower sale

Other

Income tax expense

*Refer to Note 2(l) for restatement.

Unused transferred tax losses for which no deferred tax asset has been recognised

Total tax losses for which no deferred tax asset has been recognised

Potential tax benefit at 30% (2021: 30%)

2022

559

168

(212)

2022
$m

2,275

683

2021
Restated*
$m

159

2021
$m

2,275

683

The transferred losses of $2,275 million arose from the Vodafone and ‘3’ merger in 2009 and were
transferred to VHA at that time. These transferred losses are subject to an available fraction calculation
which determines the rate at which the transferred losses can be utilised.

(d) Deferred tax assets and liabilities

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary
differences between the carrying amounts of assets and liabilities in the consolidated financial statements
and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the
liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries and associates, and interests in joint ventures, except where the associated entity is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset realised, based on tax rates (and laws) that have been enacted or substantively
enacted by the reporting date.

Page 80 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 6. Income tax continued

(d) Deferred tax assets and liabilities continued

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Critical Estimates and Judgements: Recognition of deferred tax assets

Judgement is required to determine the recognition of deferred tax assets, which is reviewed at the
end of each reporting period. The carrying amount of deferred tax assets is only recognised to the
extent that it is probable that sufficient taxable profit will be available in the future to utilise this
benefit. This assessment requires assumptions about the generation of future taxable profit derived
from the Group’s estimates of future cash flows. Judgements are also required about the application of
income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence
there is a possibility that changes in circumstances will alter expectations, which may impact the
amount of deferred tax assets and deferred tax liabilities recognised in the Consolidated Statement of
Financial Position and the amount of tax losses and temporary differences not yet recognised.

With regard to tax losses carried forward, the benefit of tax losses will only be obtained if the specific
entity carrying forward the tax losses derives future assessable income of an amount sufficient to
enable the benefit from the deductions for the losses to be realised, and the Company complies with
the conditions for deductibility imposed by tax legislation. At 31 December 2022, $326 million (2021:
$477 million) of deferred tax assets from tax losses have been recognised based on the Group’s
assessment of the availability of the tax losses, and the future rate of utilisation of tax losses based on
the Group’s estimates of future cash flows.

Amounts unrecognised as at the reporting date could be subsequently recognised if it becomes
probable that future taxable profit will allow the Group to benefit from these unrecognised tax losses.

Deferred tax assets

The balance comprises temporary differences attributable to:

Employee benefits

Deferred revenue

Property, plant and equipment

Provisions and accruals

Lease liabilities

Tax losses

Other

Total deferred tax assets

Set off tax liabilities pursuant to set-off provisions

Net deferred tax assets

*Refer to Note 2(l) for restatement.

Page 81 | TPG Telecom Annual Report 2022

2022

2021
Restated*
$m

570

326

163

416

477

1,145

(962)

183

1,206

(945)

261

Notes to the consolidated financial statements continued

Note 6. Income tax continued

- to profit or loss

(2)

(79)

EMPLOYEE
BENEFITS
$m

DEFERRED
REVENUE
$m

PROPERTY,
PLANT AND
EQUIPMENT
$m

PROVISIONS
AND
ACCRUALS
$m

LEASE
LIABILITIES
$m

TAX
LOSSES
$m

OTHER
$m

TOTAL
$m

163

(2)

134

(3)

(11)

416

477

45 1,206

154

(151)

(2)

(61)

570

326

336

590

1,145

1,187

(113)

(7)

(3)

(26)

MOVEMENTS

At 1 January
2022
(charged)/credited

At 31 December 2022

At 1 January 2021
(charged)/credited

- addition from business
combination

- to profit or loss
(restated*)

At 31 December 2021
(restated*)

163

416

477

45 1,206

*Refer to Note 2(l) for restatement.

Deferred tax liabilities

The balance comprises temporary differences attributable to:

Right-of-use assets

Intangible assets

Other

Set off tax liabilities pursuant to set-off provisions

Net deferred tax liabilities

2022
$m

436

517

962

(962)

2021
$m

374

564

945

(945)

MOVEMENTS

At 1 January 2022 (charged)/credited

- to profit or loss

At 31 December 2022

At 1 January 2021 (charged)/credited

- to profit or loss

At 31 December 2021

RIGHT-OF-USE
ASSETS
$m

INTANGIBLE
ASSETS
$m

OTHER
$m

TOTAL
$m

374

437

298

374

564

(48)

516

612

(48)

564

(6)

945

962

923

945

Page 82 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 7. Earnings per share

Basic earnings per share

Diluted earnings per share

Profit attributable to the owners of the Company used in
calculating basic and diluted earnings per share

Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share

Weighted average number of ordinary shares used as the
denominator in calculating diluted earnings per share

Units

cents

2022

27.6

513

2021

6.1

113

number

1,857,835,988 1,859,341,669

number

1,858,761,611 1,859,655,262

The Group presents basic and diluted earnings per share (‘EPS’) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to owners of the Company by the weighted average
number of ordinary shares during the period. The weighted average number of ordinary shares is adjusted
to exclude the shares held by TPG Employee Incentive Plan Trust. Refer to note 25 for information on
equity instruments issued under the employee share scheme.

Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding for
the effects of all dilutive potential ordinary shares. Rights granted to employees under share-based
payments arrangements are considered to be potential ordinary shares and have been included in the
determination of diluted earnings per share.

Note 8. Cash and cash equivalents

For the purposes of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents
include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management.

(a) Restricted cash

At 31 December 2022, $6 million of the cash and cash equivalents balance held by the Group were subject
to restrictions and therefore not available for general use by other entities within the Group (2021: $3
million). These deposits represent funds collected on behalf of a third party that has purchased various
handset receivable contracts.

(b) Reconciliation of cash flows from operating activities

The presentation of cash flows from operating activities in the Consolidated Statement of Cash Flows has
been prepared based on the direct method, as it provides more relevant information for the users of the
financial report.

Page 83 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 8. Cash and cash equivalents continued

(b) Reconciliation of cash flows from operating activities continued

The reconciliation of net operating cash flows has been disclosed in the below table.

Cash flows from operating activities

Profit for the year after income tax

Adjustments for:

Depreciation and amortisation expense

Net financing costs

Tower sale gain

Share based payment expense

Gain on sale of spectrum

Movements in operating assets and liabilities:

(Increase) in trade and other receivables

(Increase) in inventories

(Increase)/ decrease in prepayments

Decrease in deferred tax assets

(Decrease)/ increase in trade and other payables

Increase in contract liabilities

(Decrease)/ increase in other liabilities

(Decrease)/ increase in provisions

Net cash generated from operating activities

*Refer to Note 2(l) for restatement.

Acquisition of right-of-use assets

(d) Net debt reconciliation

2022

2021
Restated*
$m

513

113

1,389

187

(402)

1,415

149

(7)

1,692

1,670

(339)

(60)

(23)

(24)

(30)

(14)

(144)

(44)

(441)

1,251

(48)

1,622

2022
$m

565

2021
$m

124

This section sets out an analysis of net debt and the movements in net debt for each of the periods
presented.

Cash and cash equivalents

Borrowings (non-current)

Lease liabilities (current)

Lease liabilities (non-current)

Derivative financial instruments

Net debt

2022
$m

114

2021
$m

202

(3,690)

(4,290)

(93)

(61)

(1,872)

(1,359)

(5,539)

(5,508)

Page 84 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 8. Cash and cash equivalents continued

(d) Net debt reconciliation continued

Net debt at 1 January 2022

Cash flows

Lease acquisitions

Interest unwinding

Lease revaluations and

terminations

Foreign exchange adjustments

Interest rate swaps

Proceeds from borrowings

Repayment of borrowings

Other

CASH AND
CASH
EQUIVALENTS
$m

202

(88)

LEASE
LIABILITIES
$m

BORROWINGS
$m

DERIVATIVE
FINANCIAL
INSTRUMENTS
$m

TOTAL
$m

(1,420)

(4,290)

(5,508)

198

(803)

(75)

144

(9)

(470)

1,070

110

(803)

(75)

144

(470)

1,070

(9)

(5,539)

TOTAL
$m

Net debt at 31 December 2022

114

(1,965)

(3,690)

CASH AND
CASH
EQUIVALENTS
$m

LEASE
LIABILITIES
$m

BORROWINGS
$m

DERIVATIVE
FINANCIAL
INSTRUMENTS
$m

(1,143)

(4,330)

(1)

(5,354)

Net debt at 1 January 2021

Cash flows

Lease acquisitions

Interest unwinding

Lease revaluations and

terminations

Foreign exchange adjustments

Proceeds from borrowings

Repayment of borrowings

120

200

(124)

(61)

(292)

Net debt at 31 December 2021

202

(1,420)

(e) Guarantees

Secured guarantees

Unsecured guarantees

(1,420)

1,460

(4,290)

282

(124)

(61)

(292)

(1,420)

1,460

(5,508)

2022

2021

The Group has provided bankers’ guarantees to support various commercial and regulatory obligations of
$25 million (2021: $18 million).

Page 85 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 9. Trade and other receivables

Trade receivables are amounts due from customers for goods and services performed in the ordinary
course of business. Trade receivables are recognised initially at the amount of consideration that is
unconditional less loss allowance. Trade receivables are generally due for settlement within 0 to 60 days,
except for handset and accessories receivables which are collected over the term of the contract. The
group holds the trade receivables with the objective of collecting the contractual cash flows and therefore
measures them subsequently at amortised cost using the effective interest method. For handset and
accessories receivables which have not been sold to third parties in accordance with the Group’s
arrangements, these are initially recognised at the amount expected to be recoverable over the term of the
contract, subject to collectability reviews.

Collectability of receivables is reviewed on an ongoing basis. The Group applies the AASB 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all
receivables. To measure the expected credit losses, trade receivables have been grouped based on shared
credit risk characteristics and the days past due.

The expected loss rates are based on the payment profiles of sales over relevant historical periods before
year end and the corresponding historical credit losses experienced within this period. The historical loss
rates are adjusted to reflect current and forward looking information on macroeconomic and commercial
factors affecting the ability of customers to settle the receivables.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include inactive accounts, the failure of a debtor to engage in a
repayment plan with the Group and a failure to make contractual payments for a period of greater than 90
to 120 days past due. Impairment losses on trade receivables are presented as impairment of receivables
within other operating expenses in the Consolidated Income Statement. Subsequent recoveries of
amounts previously written off are credited against the same line item.

The Group has entered into arrangements which allows them to sell certain handset and accessories
receivables to a third party.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of
the asset to another party. On derecognition of a financial asset, the difference between the asset’s
carrying amount and the sum of the consideration received and receivable is recognised as handset
receivable expense within cost of handsets sold in the Consolidated Income Statement.

As the relevant criteria in AASB 9 Financial Instruments were satisfied, the fair value of the current
receivables sold were derecognised from the financial statements. The following unsold handset
receivables were yet to satisfy the qualifying criteria required under the risk transfer arrangement with third
parties, and were not derecognised by the Group.

Unsold handset receivables measured at fair value

2022

2021

130

Page 86 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 9. Trade and other receivables continued

Current

Trade receivables

Less: expected credit loss allowance

Handset and accessories receivables

Accrued revenue

Receivables from related parties

Other receivables

Non-current

Handset and accessories receivables

Other receivables

(a) Movement in provision for impairment of trade receivables

Balance at 1 January

Provision for impairment recognised during the year

Receivables written off during the year

Balance at 31 December

2022
$m

2021
$m

219

(17)

202

377

681

353

358

2022
$m

(20)

(11)

(17)

204

(20)

184

214

476

199

204

2021
$m

(37)

(15)

(20)

Critical Estimates and Judgements: Loss allowance on trade and other receivables

Judgement is required to determine the allowance for doubtful debts for the Group’s trade
receivables. During the financial year, the loss assumptions used in determining the provision for trade
and other receivables were reviewed against, and updated to align with, actual debtor collectability
using latest available data.

(b) Handset and accessories receivables

Handsets and accessories receivables

Estimated future adjustments to unbilled revenue1

Handset receivables sale expense

1 This includes estimated future adjustments to unbilled revenue and loss allowance.

2022

2021

793

(63)

730

473

(60)

413

Page 87 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 9. Trade and other receivables continued

Critical Estimates and Judgements: Recognition of unbilled handset and accessories
revenue

Judgement is required to determine the potential future adjustments to handset and accessories
revenue. Handset and accessories revenue is recognised upfront, with cash collected from customers
over the instalment contract period. At the end of the reporting period, the Group assesses the risks
associated with the recovery of unsold handset receivables paid through instalments and potential
future buy-backs of sold receivables, and other loss risks relating to factors such as the introduction of
new pricing plans, industry trends and company policies. During the financial year, the Group has
performed a detailed analysis of historical data and future expected trends to identify any required
revenue reversal to the original transaction price.

Note 10. Inventories

Finished goods include handsets, modems, other connectivity devices and accessories and are stated at
the lower of cost and net realisable value. The costs of individual items of inventory are determined using
the weighted average cost or standard cost method. The standard costs are regularly reviewed and, if
necessary, revised in the light of current conditions. The same cost formula is applied to all inventories
with a similar nature and use to the Group. Cost comprises the purchase price and any expenditure that is
directly attributable to the acquisition of the inventory after deducting rebates and discounts. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale.

Finished goods at net realisable value

2022

2021

155

Inventories expensed in the Consolidated Income Statement during the year ended 31 December 2022
amounted to $908 million (2021: $806 million).

Note 11. Derivative financial instruments and hedge accounting

Derivative financial instruments are utilised by the Group in the management of its foreign currency and
interest rate risk exposures. The Group’s policy is not to utilise derivative financial instruments for trading
or speculative purposes.

The Group designates derivatives as hedging instruments to hedge the variability in cash flow associated
with known or highly probable forecast transactions arising from changes in interest rates.

At inception of the hedge relationship, the Group documents the economic relationship between hedging
instruments and hedged items including whether changes in the cash flows of the hedging instruments are
expected to offset changes in the cash flows of hedged items. The Group documents its risk management
objective and strategy for undertaking its hedge transactions.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments to ensure that an economic relationship exists between the hedged
item and hedging instrument.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged.

Page 88 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 11. Derivative financial instruments and hedge accounting continued

The fair values of derivative financial instruments designated in hedge relationships are classified as non-
current assets or liabilities, except for those that mature in less than 12 months from the reporting date,
which are classified as current.

For derivatives that do not qualify for hedge accounting, changes in fair value are recognised in the
Consolidated Income Statement.

Cash flow hedges that qualify for hedge accounting

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the
fair value of derivatives is recognised in other comprehensive income and accumulated in the hedging
reserve. The effective portion of changes in the fair value of the derivative that is recognised in other
comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on
a present value basis, from inception of the hedge. The gain or loss relating to the ineffective portion is
recognised immediately in the Consolidated Income Statement within other income or other operating
expenses. The Group tests cash flow hedges for effectiveness at each reporting date prospectively.

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires,
is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge
accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging
reserve remains in equity until it is reclassified to profit or loss in the same period as the hedged expected
future cash flows affect profit or loss.

Non-current assets

Interest rate swaps

2022
$m

2021
$m

The Group enters into interest rate swaps on trade date for risk management purposes that are designed
as cash flow hedges. The Group’s outstanding interest rate swaps have similar critical terms as the hedged
item, such as reference rate, reset date, payment dates, maturities and notional amount. The group does
not hedge 100% of its loans, therefore the hedged item is identified as a proportion of the outstanding
loans up to the notional amount of the swaps. As all critical terms matched during the year, there is an
economic relationship. The interest rate swaps have floating legs that are indexed to 3-month BBSY rate
on the reset date, being the first day of the calculation period. The Group’s derivative instruments are
governed by contracts based on the International Swaps and Derivatives Association (‘ISDA’)’s master
agreements.

Hedge ineffectiveness for interest rate swaps may occur due to:

• The credit value/debit value adjustment on the interest rate swaps which is not matched by the

loan, and

• Difference in critical terms between the interest rate swaps and loans.

Hedge ineffectiveness in relation to the interest rate swaps was negligible for the years ended 31
December 2022 and 2021.

Page 89 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 11. Derivative financial instruments and hedge accounting continued

Interest rate swaps continued

Other information relating to interest rate swaps designated as cash flow hedges were as follows

INTEREST RATE SWAPS
(CURRENT & NON-CURRENT ASSETS)

Carrying amount

Notional amount

Maturity date

Hedge ratio

Change in fair value of outstanding hedging instruments since inception of
the hedge

Change in value of hedged item used to determine hedge ineffectiveness

Weighted average hedged rate

Hedging reserves

2022
$m

1,000

2024-2025

1:1

n/a

2021
$m

The group’s hedging reserves disclosed in note 23 relate to the following hedging instrument:

At 1 January 2021

Change in fair value of hedging instrument recognised in OCI

At 31 December 2021

Change in fair value of hedging instrument recognised in OCI

At 31 December 2022

INTEREST RATE
SWAPS
$m

There were no reclassifications from the cash flow hedge reserve to profit or loss during the period.

Page 90 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 12. Interests in other entities

(a) Subsidiaries

Investments in subsidiaries are measured at cost in the Company’s financial statements. The following is a
list of all entities that formed part of the Group as at 31 December 2022.

NAME OF ENTITY

Vodafone Hutchison Spectrum Pty Limited

Vodafone Hutchison Receivables Pty. Ltd.

H3GA Properties (No. 3) Pty Limited

Vodafone Foundation Australia Pty Limited

Vodafone Australia Pty Limited

Vodafone Pty Limited

Vodafone Network Pty Limited

Mobileworld Operating Pty Ltd

Mobileworld Communications Pty Ltd

Mobile JV Pty Limited

AAPT Limited

A.C.N. 088 889 230 Pty Ltd

A.C.N. 139 798 404 Pty Ltd

Adam Internet Holdings Pty Ltd

Adam Internet Pty Ltd

Agile Pty Ltd

AlchemyIT Pty Ltd

Blue Call Pty Ltd

Cable Licence Holdings Pty Ltd

Chariot Pty Ltd

Chime Communications Pty Ltd

Connect Internet Solutions Pty Limited

Connect West Pty Ltd

3.6 GHZ Spectrum Pty Ltd

Destra Communications Pty Ltd

Digiplus Contracts Pty Ltd

Digiplus Holdings Pty Limited

Digiplus Investments Pty Ltd

Digiplus Pty Ltd

Vision Network Pty Limited

Hosteddesktop.com Pty Ltd

iHug Pty Ltd

NOTES

COUNTRY OF
INCORPORATION

2,6

4,6

1,3

2,6

Australia

EQUITY HOLDINGS

2022

2021

100

Page 91 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 12. Interests in other entities continued

(a) Subsidiaries continued

NAME OF ENTITY

iiNet (New Zealand) AKL Limited

iiNet (OzEmail) Pty Ltd

iiNet Labs Pty Ltd

iiNet Limited

Internode Pty Ltd

Intrapower Pty Limited

Intrapower Terrestrial Pty Ltd

IP Group Pty Ltd

IP Service Xchange Pty Ltd

Jiva Pty Ltd

Kooee Communications Pty Limited

Kooee Mobile Pty Limited

Kooee Pty Ltd

Mercury Connect Pty Ltd

Neighbourhood Cable Unit Trust

Netspace Online Systems Pty Ltd

Numillar IPS Pty Ltd

Orchid Cybertech Services Incorporated

Orchid Human Resources Pty Ltd

PIPE International (Australia) Pty Ltd

PIPE Networks Pty Limited

PIPE Transmission Pty Ltd

PowerTel Limited

PPC 1 (US), Inc.

PPC 1 Limited

Request Broadband Pty Ltd

Soul Communications Pty Ltd

Soul Contracts Pty Ltd

Soul Pattinson Telecommunications Pty Limited

SPT Telecommunications Pty Limited

SPTCom Pty Limited

Telecom Enterprises Australia Pty Limited

Telecom New Zealand Australia Pty Ltd

TPG (NZ) Pty Limited

TPG Corporation Limited

TPG Energy Pty Ltd

NOTES

6,8

3,6

2,6

COUNTRY OF
INCORPORATION

New Zealand

Australia

Philippines

Australia

USA

Bermuda

Australia

5,6,8

New Zealand

Australia

EQUITY HOLDINGS

2022

2021

100

88.57

99.99

88.57

99.99

100

Page 92 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 12. Interests in other entities continued

(a) Subsidiaries continued

NAME OF ENTITY

TPG Finance Pty Limited

TPG Holdings Pty Limited

TPG Internet Pty Ltd

TPG JV Company Pty Ltd

TPG Network Pty Ltd

TransACT Broadcasting Pty Ltd

TransACT Capital Communications Pty Ltd

TransACT Communications Pty Limited

TransACT Victoria Communications Pty Ltd

TransACT Victoria Holdings Pty Ltd

Transflicks Pty Ltd

Trusted Cloud Pty Limited

Trusted Cloud Solutions Pty Limited

Value Added Network Pty Limited

Virtual Desktop Pty Ltd

VtalkVoip Pty Ltd

Westnet Pty Ltd

NOTES

COUNTRY OF
INCORPORATION

2,6

3,6

2,6

Australia

EQUITY HOLDINGS

2022

2021

100

1. These companies are exempt from financial reporting requirements and do not form part of the deed of cross

guarantee and are recognised as a small proprietary company.

2. These companies were deregistered on 1 May 2022.
3. These companies were deregistered on 11 May 2022.
4. The company FTTB Wholesale Pty Ltd changed its name to Vision Network Pty Limited from 5 August 2022.
5. This company was deregistered on 10 November 2022.
6. Pursuant to the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, these wholly-owned
subsidiaries within the Closed Group are relieved from the Corporations Act 2001 (Cth) requirements to
prepare and lodge separate financial reports for the year ended 31 December 2022 (to the extent they apply).

7. This company is a Trustee company for the TPG Telecom Foundation and is required to prepare financial

reporting under Australian Charities and Not-for-profits Commission.

8. These companies are exempt from financial reporting requirements in New Zealand and are not recognised as

large companies in New Zealand.

Page 93 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 12. Interests in other entities continued

(b) Joint ventures

Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint
operations or joint ventures. The classification depends on the contractual rights and obligations of each
investor, rather than the legal structure of the joint arrangement.

Joint ventures

Interests in joint ventures are accounted for using the equity method after initially being recognised at cost
in the consolidated statement of financial position.

Equity method

Under the equity method of accounting, investments are initially recognised at cost and adjusted thereafter
to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and
the Group’s share of movements in other comprehensive income of the investee in other comprehensive
income. Dividends received or receivable from associates and joint ventures are recognised as a reduction
in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to
the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity
accounted investees have been changed where necessary to ensure consistency with the policies adopted
by the Group.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the
policy described in Note 14.

The following is a list of all entities accounted for using the equity method as at 31 December 2022.

NAME OF ENTITY

3GIS Pty Limited

3GIS Properties (No 1) Pty Limited

3GIS Properties (No 2) Pty Limited

Tovadan Pty Limited

Mondjay Pty Limited

COUNTRY OF
INCORPORATION

Australia

EQUITY HOLDINGS

2022

2021

Page 94 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 13. Tower assets sale transaction

In May 2022, the Group announced that it had entered into a binding agreement to sell 100% of passive
mobile tower and rooftop infrastructure. The sale was completed on 29 July 2022, through the sale of a
special purpose vehicle that was a wholly owned subsidiary of TPG Telecom Limited. The agreement
includes a sale-and-leaseback arrangement, whereby the Group has entered into a master services
arrangement to leaseback access to the towers for 20 years.

The Group recognised total cash proceeds of $911 million during the year in investing cash inflows. The
net impact on profit and loss before tax of the transaction was $402 million (Refer to Note 5). This amount
consists of a $409 million net gain on sale (after transaction costs of $25 million) less $7 million of net
loss from lease modifications. Net cash proceeds after transaction costs were used to repay existing bank
debt (Refer to Note 18).

The master service agreement resulted in a net addition to lease liabilities of $519 million and right-of-use
assets of $234 million. As part of the transaction, the Group also entered into an agreement to lease
access to future towers that the purchaser will build at the direction of the Group, resulting in a financial
liability of $22 million (Refer to Note 20).

Critical Estimates and Judgements: Fair value of assets sold

Judgement is required to determine the fair value of the assets sold as a part of the transaction, which
impacts the portion of the assets for which control has passed to the buyer-lessor in the sale-and-
leaseback transaction. The Group engaged valuation specialists to determine the fair value of asset
components at the transaction date.

Note 14. Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to bringing the asset to the location and
condition necessary for its intended use. Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are included as part of the cost of that asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
the Consolidated Income Statement during the financial period in which they are incurred.

(a) Depreciation

Depreciation is provided on property, plant and equipment excluding land. Depreciation is calculated on a
straight-line basis to write off the depreciable amount of each item of property, plant and equipment over
its expected useful life to the Group. The assets’ residual values and useful lives are reviewed at each
reporting date and adjusted if appropriate. Assets are depreciated from the date they are brought into
commercial service, or in respect of internally constructed assets from the time the asset is completed and
is available for commercial use. The cost of internally constructed assets includes the cost of materials,
direct labour, and the initial estimate, where relevant, of the costs of dismantling and removing the items
and restoring the site on which they are located.

Page 95 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 14. Property, plant and equipment continued

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 expected useful lives for PP&E assets are as
follows:

Buildings

Leasehold improvements

40 years

3 to 10 years

Network & IT equipment and infrastructure

2 to 25 years

The depreciable amount of improvements to or on leasehold properties and leased plant and equipment is
amortised over the unexpired period of the lease or the estimated useful life of the leasehold improvement
stated above to the Group, whichever is the shorter.

Depreciation rates and methods are reviewed at least annually and adjusted on a prospective basis as
required by accounting standards.

Critical Estimates and Judgements: Useful lives of property, plant and equipment

Judgement is required to determine the estimated useful lives of property, plant and equipment for the
basis of the depreciation period over which economic benefit will be derived from the asset. The
Group reviews the useful lives at the end of each reporting period, based on the Group’s expected life
of each asset class, including expected use of specific assets and other relevant factors such as any
expected changes in technology.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. The recoverable amount is the higher of an
asset’s fair value less cost of disposal and value in use.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the Consolidated Income Statement.

(b) Impairment of assets

Non-financial assets other than goodwill are tested for impairment at each reporting date or whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. This
includes intangible assets in the course of construction. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period or when there is an indication that
the impairment loss may no longer exist. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.

Page 96 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 14. Property, plant and equipment continued

LAND AND
BUILDINGS
$m

LEASEHOLD
IMPROVEMENTS
$m

NETWORK & IT
EQUIPMENT AND
INFRASTRUCTURE
$m

ASSETS UNDER
CONSTRUCTION
$m

TOTAL
$m

At 31 December 2020

Cost (restated)

Accumulated depreciation (restated)

Restated net book value

Year ended 31 December 2021

Opening net book value

Additions (restated)

Transfers

Disposals

Depreciation (restated)

Restated net book value

At 31 December 2021

Cost

Accumulated depreciation

Restated net book value

(1)

(3)

(4)

111

(85)

(14)

116

(99)

1. Refer to Note 2(l) for restatement in relation to the voluntary changes in accounting policy.

5,992

(3,234)

2,758

444

(28)

(561)

2,704

6,359

(3,655)

2,704

LAND AND
BUILDINGS
$m

LEASEHOLD
IMPROVEMENTS
$m

NETWORK & IT
EQUIPMENT AND
INFRASTRUCTURE
$m

ASSETS UNDER
CONSTRUCTION
$m

Year ended 31 December 2022

Opening net book value

Additions

Transfers

Disposals

Depreciation

Net book value

At 31 December 2022

Cost

Accumulated depreciation

Net book value

(2)

(6)

(8)

(69)

2,704

1102

623

(237)2,4

(502)

2,698

5,956

(3,258)

2,698

2. The additions of $110 million and disposal of $105 million related to equipment that were accounted for as asset swaps.
3. The transfer balance of $110 million was transferred as additions to intangibles ($85 million cost and $5 million depreciation), and to right-of-use

assets for leases ($31 million cost and $1 million depreciation).

4. The network-related towers and rooftops of $132 million were disposed as part of the tower assets sale transaction (Refer to Note 13).

Page 97 | TPG Telecom Annual Report 2022

416

6,562

(4)

(3,324)

412

3,2381

412

875

(617)

(29)

641

674

(33)

641

971

(740)

(1)

(42)

3,238

9711

(173)

(28)

(607)

3,4011

7,192

(3,791)

3,4011

TOTAL
$m

3,401

1,081

(110)3

(238)

(554)

829

3,580

881

(52)

829

6,965

(3,385)

3,580

Notes to the consolidated financial statements continued

Note 15. Right-of-use assets and lease liabilities

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.

The Group has leases for various network sites, offices, retail stores and data centres. Rental contracts
may contain both lease and non-lease components. The Group allocates the consideration in the contract
to the lease and non-lease components based on their relative stand-alone prices.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants other than the security interests in the
leased assets that are held by the lessor. Leased assets may not be used as security for borrowing
purposes.

Critical Estimates and Judgements: Determining lease terms

Judgement is required to determine the lease term for leases that include additional optional extension
periods beyond the initial non-cancellable period. As a lessee, extension periods are included in the
lease term in determining the lease liability if the Group is reasonably certain that the extension option
will be exercised. An assessment of the likelihood of exercising renewal options, based on relevant
facts and circumstances, such as historical lease durations, costs and business disruption required to
replace the leased asset or relocate the site, the existence of termination penalties and the Group’s
future plans, is performed on initial recognition of the lease. The lease term is reassessed if an option
is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it.
The assessment is only revised if a significant event or a significant change in circumstances occurs,
and that is within the control of the Group.

For the Group’s network lease portfolio, renewal options are generally included in the lease term, as it
is reasonably certain, based on the type and use of the underlying asset, that the lease will be
extended. The length of the initial lease term is also considered, as the likelihood of exercising an
option diminishes the longer the non-cancellable period.

For the Group’s commercial lease portfolio, which includes office buildings, data centres and retail
stores, renewal options are generally not included in the lease term, and is assessed against the
Group’s plan for its corporate and retail footprint.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a
lease term of 12 months or less. Low-value assets comprise IT equipment and typically have an underlying
value of less than $10,000.Initial measurement

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
•
•

fixed payments (including in-substance fixed payments), less any lease incentives receivable,

variable lease payment that are based on an index or a rate, initially measured using the index or rate
as at the commencement date,

amounts expected to be payable by the Group under residual value guarantees,

•
•
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that

the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and

option.

Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability.

Page 98 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 15. Right-of-use assets and lease liabilities continued

(a) Initial measurement continued

Right-of-use assets are measured at cost comprising the following:
•
•
•
•

the amount of the initial measurement of lease liability,
any lease payments made at or before the commencement date less any lease incentives received,
any initial direct costs, and
restoration costs.

Critical Estimates and Judgements: Determining incremental borrowing rate

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in the Group, the lessee’s incremental
borrowing rate is used.

Judgement is required to determine the incremental borrowing rate used to measure the Group’s
network and commercial leases. The Group is of the view that interest rates implicit in the Group’s
leases are not readily determinable.

The incremental borrowing rate represents the rate that the individual lessee would have to pay to
borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions. To determine the incremental
borrowing rate, the Group where possible, uses recent third-party financing received by the individual
lessee as a starting point, adjusted to reflect changes in financing conditions since the third party
financing was received and considering elements specific to the lease, e.g. term of lease.

(b) Subsequent measurement

The Group is exposed to potential future increases in variable lease payments based on an index or rate,
which are not included in the lease liability until they take effect. When adjustments to lease payments
based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use
asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to the profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.

Right-of-use assets are generally depreciated over the lease term on a straight- line basis. If the Group is
reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset’s useful life.

Page 99 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 15. Right-of-use assets and lease liabilities continued

The Group has entered into lease agreements as an intermediate lessor for various retail stores and
offices. When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two
separate contracts. The sublease is classified as a finance or operating lease by reference to the right-of-
use asset arising from the head lease.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the
Group’s net investment in the leases. The net investment in each sublease is determined by discounting
the rental payments expected to be received from the sublessee over the term of the sublease. The
interest income associated with the discounting of the rental payments is recognised over the term of the
sublease.

(d) Sale-and-leaseback

A sale-and-leaseback transaction is one where the Group sells an asset and immediately reacquires the use
of the asset by entering into a lease with the buyer. The accounting treatment depends on whether the
transfer of the asset by the seller-lessee satisfies the requirement of AASB 15 to be accounted for as a sale
of the asset:
•

if yes, as a seller-lessee, the Group measures the right-of-use asset arising from the leaseback at the
proportion of the previous carrying amount of the asset that relates to the right-of-use retained by the
Group as a seller-lessee. Accordingly, the Group recognises only the amount of any gain or loss that
relates to the rights transferred to the buyer-lessor.
if not, as a seller-lessee, the Group continues to recognise the transferred assets and recognises a
financial liability equal to the transfer proceeds.

•

(e) Site Sharing Agreements

The Group has entered into a Site Sharing Agreement for various network sites. The purpose of this
agreement is to share the costs relating to telecommunication equipment on certain network sites. Under
this Agreement, access to network sites is granted to the other party in return for an access fee, which is
settled on a net basis each quarter.

The Group considers the core purpose of the Agreement is for the convenience of each party rather than
to generate lease income. The Group accounts for the subleases arising from the exchange of access fees
on a net basis, as the exchanged right-of-use assets are similar in nature, the timing of cash flows between
the parties mirrors the timing of receipts/payments under the head lease agreements, and the amount of
cash flows is not expected to be materially different between the exchanged right-of-use assets. The
Group is in a net payment position under the Agreement, and as a result the Group recognises a right-of-
use asset and lease liability for the net payment portion in accordance with AASB 16.

(f) Impairment of assets

Refer to Note 14 for the Group’s non-financial asset impairment policy.

Page 100 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 15. Right-of-use assets and lease liabilities continued

The Consolidated Statement of Financial Position shows the following amounts relating to leases:

Right-of-use assets

Commercial properties

Network properties

Lease liabilities

Current

Non-current

2022

182

1,345

1,527

1,872

1,965

2021

194

1,100

1,294

1,359

1,420

• Additions to the right-of-use assets during the 2022 financial year were $565 million (2021: $124

million). This includes transfers from assets under construction in property, plant & equipment of $30
million (Refer to Note 14).

• The increase in right-of-use assets and lease liabilities during the year included lease modification

arising from the transfer of existing leases to OMERS, and the sale-and-leaseback of the majority of
sites as parts of the tower sale transaction (Refer to Note 13).

The Consolidated Income Statement shows the following amounts relating to leases:

Depreciation of right-of-use assets

Commercial properties

Network properties

Interest expense (included in finance expenses)

Expense relating to short-term and low-value leases (included in technology costs and
other operating expenses)

The total cash outflow for leases in 2022 was $253 million (2021: $262 million).

2022

2021

101

143

107

141

Page 101 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 16. Intangible assets

(a) Goodwill

Goodwill arising in a business combination is recognised as an asset at the date that control is acquired
(the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held
equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable
assets acquired and the liabilities assumed. If, after reassessment, the Group’s interest in the fair value of
the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest
in the acquiree (if any), the excess is recognised immediately in the Consolidated Income Statement as a
bargain purchase gain.

Goodwill is classified as an indefinite life intangible asset. Goodwill is not subject to amortisation and is
tested annually for impairment, or more frequently, if events or changes in circumstances indicate that it
might be impaired. Goodwill is allocated to cash generating units for the purpose of impairment testing.

(b) Brand names

On acquisition, brands of the acquiree are valued and brought to account as intangible assets. The value is
calculated using the relief from royalty method. Brand names are classified as either finite or indefinite life
intangible assets depending on the Group’s assessment of the expected pattern of economic benefits that
they will generate for the Group.

Amortisation is charged to the Consolidated Income Statement on a straight-line basis over the estimated
useful lives for the finite life brand names. Indefinite life brand names are not subject to amortisation and
are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that
it might be impaired. Indefinite life brand names are allocated to cash generating units for the purpose of
impairment testing.

Computer software comprises computer software purchased from third parties as well as the cost of
internally developed software. Computer software licences are capitalised on the basis of the costs
incurred to acquire and bring into use the specific software. Costs that are directly associated with the
production of identifiable and unique software products controlled by the Group and are probable of
producing future economic benefits are recognised as intangible assets. Direct costs include software
development employee costs and directly attributable overheads. Software integral to a related item of
hardware equipment is accounted for as property, plant and equipment.

Costs associated with maintaining computer software programs are recognised as an expense when they
are incurred.

Internally developed software is recognised only if all of the following conditions are met:
•
•
•

an asset is created that can be separately identified;
it is probable that the asset created will generate future economic benefits; and
the development cost of the asset can be measured reliably.

On acquisition, internally developed software and systems of the acquiree are valued and brought to
account as intangible assets. The software is valued at its amortised replacement cost.

Amortisation is charged to the Consolidated Income Statement on a straight-line basis over the estimated
useful lives from the date the software is available for use.

The carrying values of these intangible assets are reviewed on a regular basis and written down to the
recoverable amount where this is less than the carrying value.

Page 102 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 16. Intangible assets continued

(d) Spectrum licences

Costs associated with acquiring spectrum licences are capitalised. The amortisation of the spectrum
licences commences upon the later of the readiness of the network and the spectrum licences being
allocated. The spectrum licences are amortised on a straight-line basis over the periods of their expected
benefit. The carrying values of these intangible assets are reviewed on a regular basis and written down to
the recoverable amount where this is less than the carrying value.

(e) Contract costs

Under AASB 15 Revenue from Contracts with Customers, incremental costs associated with acquiring and
renewing a contract that are expected to be recovered are required to be initially recognised as an asset
and expensed over the expected life of a customer contract consistent with the transfer to the customer of
the goods and services to which the capitalised costs relate. The carrying values of these assets are
reviewed on a regular basis. Contracts costs associated with acquiring and renewing a service contract are
capitalised and amortised over the life of the contract. Contract costs associated with the sale of handsets
are capitalised and amortised upfront in line with transfer of handsets to the customer.

Connection costs, being costs of fulfilling orders, are capitalised and amortised over the life of the
contract.

(f) Acquired customer bases

On acquisition, customer contracts and relationships of the acquiree are valued based on their expected
future economic benefits (using discounted cash flow projections) and brought to account as intangible
assets. The acquired customer bases are amortised to the Consolidated Income Statement on a straight-
line basis in line with the expected economic benefits to be derived.

(g) Indefeasible rights of use of capacity (‘IRUs’)

Indefeasible rights of use (‘IRUs’) of acquired network capacity are brought to account as intangible assets
at the present value of the future cash flows payable for the right. IRUs of acquired subsidiaries are
accounted for at their fair value as at the date of acquisition. Amortisation is charged to the Consolidated
Income Statement on a straight-line basis over the estimated useful lives of the IRU contracts.

(h) Amortisation

The expected useful lives of the intangible assets, other than goodwill and indefinite life brand names, are
as follows:

1 to 5 years
Definite life brand name
9 to 20 years
Spectrum licences
3 to 8 years
Computer software
1 to 3 years
Contract costs
Customer bases
8 to 15 years
Indefeasible rights of use (IRUs) 10 to 15 years

Critical Estimates and Judgements: Useful lives of intangible assets

Judgement is required to determine the estimated useful lives of intangible assets for the basis of the
amortisation period over which economic benefit will be derived from the asset. The Group reviews
the useful lives at the end of each reporting period, based on the Group’s expected life of each asset
class, including expected use of specific assets and other relevant factors such as any expected
changes in technology.

Page 103 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 16. Intangible assets continued

(i) Intangibles assets movement schedule

BRAND
NAMES
$m

SPECTRUM
LICENCES
$m

COMPUTER
SOFTWARE
$m

CONTRACT
COSTS
$m

CUSTOMER
BASES
$m

IRUS
$m

GOODWILL
$m

TOTAL
$m

At 1 January 2021

Cost
Accumulated amortisation

Net book value

Year ended 31 December
2021

Opening net book value
Finalisation of Purchase
Price Accounting
Additions
Transfers
Written-off
Amortisation

425
(1)

424

2,945
(620)

2,325

424

2,325

-
-
-
-
-

-
195
-
(8)
(261)

Net book value

424

2,251

At 31 December 2021

Cost

Accumulated amortisation

Net book value

Year ended 31 December
2022

Opening net book value
Additions
Transfers
Written-off
Amortisation

Net book value

At 31 December 2022
Cost
Accumulated amortisation

Net book value

425

(1)

424

3,125

(874)

2,251

424
-
-
-
-

424

2,251
27
1
-
(269)

2,010

425
(1)

424

3,153
(1,143)

2,010

852
(543)

309

-
6
131
-
(161)

285

989

(704)

285

285
-
64
(1)
(160)

188

948
(760)

188

105
(60)

1,689
(82)

1,607

201
(10)

191

8,568 14,785
(1,316)

8,568 13,469

1,607

191

8,568 13,469

-
66
-
4
(65)

115

(65)

50
105
-
-
(81)

170
(96)

-
-
-
-
(160)

-
-
1
-
(20)

(53)
-
-
-
-

(53)
267
132
(4)
(667)

1,447

172

8,515 13,144

1,689

(242)

1,447

202

(30)

172

8,515 15,060

(1,916)

8,515 13,144

1,447
-
-
-
(160)

172
-
15
-
(22)

8,515 13,144
132
80
(1)
(692)

-
-
-
-

1,287

165

8,515 12,663

1,689
(402)

217
(52)

8,515 15,117
(2,454)

1,287

165

8,515 12,663

Page 104 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 16. Intangible assets continued

(j) Impairment of assets (intangible assets with finite useful lives)

Refer to Note 14 for the Group’s non-financial asset impairment policy.

(k) Impairment testing for intangible assets with indefinite useful lives

Indefinite life intangible assets, such as goodwill and brand names, are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that it
might be impaired. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows known as cash generating units (‘CGUs’).

In the current year, the ‘Corporate’ CGU was formally renamed to the ‘Enterprise, Government and
Wholesale’ CGU

Critical Estimates and Judgements: Determining the Group’s cash generating units

Judgement is required in determining the Group’s CGUs. The Group is of the view that its
telecommunications network is integrated in nature, and no single component of the network
individually generates cash flows from delivering products and services. For the purposes of goodwill
allocation and impairment testing, the Group is of the view that the manner in which operations are
monitored by the Group best reflects the Group’s CGUs.

During the financial year, there have been no changes to the manner in which the Group’s operations
are monitored. The Group has identified the ‘Consumer’ and ‘Enterprise, Government and Wholesale’
CGU to be the lowest level at which goodwill is monitored for internal management purposes.

Consumer CGU

Enterprise, Government
and Wholesale CGU

2022

2021

BRAND
NAMES

326

424

GOODWILL

TOTAL

6,386

6,712

2,129

8,515

2,227

8,939

BRAND
NAMES

326

424

GOODWILL

TOTAL

6,386

6,712

2,129

2,227

8,515

8,939

A CGU is impaired when the recoverable amount of the CGU is lower than the carrying amount of the CGU.
The recoverable amount is the higher of an asset’s value-in-use and fair value less cost of disposal.

The Group uses the value-in-use method in order to assess the recoverable amount of the CGUs to which
the indefinite life intangible assets have been allocated. If the recoverable amount of the CGU is less than
its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the CGU and then to the other assets of the CGU pro rata on the basis of the carrying amount
of each asset in the CGU.

An impairment loss recognised for goodwill is not reversed in a subsequent period.

Page 105 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 16. Intangible assets continued

Critical Estimates and Judgements: Impairment of goodwill

Goodwill is not subject to amortisation and is assessed for impairment at least on an annual basis, or whenever
an indication of potential impairment arises.

Judgement is required to determine the recoverable amounts of the Group's CGUs, which have been
determined using a value-in-use calculation. The following key assumptions have been used in determining the
recoverable amount of the CGUs with allocated goodwill:
• Cash flow projections - cash flow projections are based on a five-year board approved long range plan.

These include EBITDA related assumptions (such as expected customer subscriber growth rates, average
revenue per user, product and pricing mix changes, direct costs to deliver telecommunication services,
forecast employee headcount and wage inflation, marketing costs and other overheads), and capital
related assumptions (including mobile and fixed networks, IT systems and spectrum). These assumptions
are determined by an extrapolation of historical performance and future company plans.

• Discount rate - a pre-tax discount rate has been used to discount the projected cash flows of the CGUs
and is based on the Group's weighted average cost of capital adjusted to reflect an estimate of specific
risks assumed in the cash flow projections.

• Terminal value growth rate – a long term growth rate is applied to extrapolate a CGU’s cash flows beyond
the five-year forecast period. This growth rate is based on the expected long-term performance for the
market.

31 DECEMBER 2022

31 DECEMBER 2021

CONSUMER

ENTERPRISE,
GOVERNMENT
AND WHOLESALE

CONSUMER

ENTERPRISE,
GOVERNMENT
AND WHOLESALE

Discount rate (pre-tax)

Discount rate (post-tax)

Terminal growth rate

9.59%

7.65%

3.00%

10.07%

8.05%

3.00%

8.90%

7.20%

2.50%

9.21%

7.60%

2.50%

Sensitivity analysis on all of the key assumptions employed in the value-in-use calculations has been
performed. From this, the Group has concluded that a reasonable possible change in the key assumptions will
not cause the carrying amounts of the Consumer and EGW CGUs to exceed the recoverable amounts.

Included in the table below is a sensitivity analysis of the recoverable amounts of the CGU’s considering
reasonable possible change scenarios relating to key assumptions at 31 December 2022.

CONSUMER

ENTERPRISE, GOVERNMENT AND WHOLESALE

Post-tax
discount rate

Terminal
growth rate

EBITDA

Post-tax
discount rate

Terminal
growth rate

EBITDA

+0.3%

-0.3%

-2%

+0.3%

-0.3%

-2%

Change in
recoverable amount
($m)

Headroom ($m)

815

420

705

530

516

309

266

183

719

1,002

1,045

1,128

Page 106 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 17. Trade and other payables

Trade creditors and accruals

Employee benefits related payables

Other creditors

Payables to related parties

(a) Trade creditors and accruals

2022
$m

1,106

2021
$m

1,045

1,185

1,118

These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period and which are unpaid. The amounts are unsecured and are usually paid or payable within 7
to 90 days of recognition. The carrying amounts of trade and other payables are considered to be the
same as their fair values, due to their short-term nature.

(b) Employee benefits – Wages and salaries

Liabilities for wages and salaries, including non-monetary benefits, that are expected to be settled wholly
within 12 months after the end of the reporting period in which the employees render the related service
are recognised in other creditors in respect of employees’ services up to the reporting date and are
measured at the amounts expected to be paid when the liabilities are settled. Liabilities for sick leave are
recognised when the leave is taken and measured at the rates paid or payable.

The Group pays contributions to defined contribution superannuation plans on a mandatory, contractual or
voluntary basis. The Group has no further superannuation payment obligations once the contributions have
been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future
payments is available.

(d) Employee benefits – STI and LTI

A liability for employee benefits in the form of a STI plan is recognised in other creditors when there is no
realistic alternative but to settle the liability and at least one of the following conditions is met:
•
•
• past practice gives clear evidence of the amount of the obligation.

there are formal terms in the plan for determining the amount of the benefit;
the amounts to be paid are determined before the time of completion of the financial statements; or

Liabilities for STI plans are expected to be settled within 12 months and are measured at the amounts
expected to be paid when they are settled. Deferred short term incentives awarded as deferred share
rights are allocated based on performance and vest subject to continued employment.

The Group accrues for long-term incentives that are provided to a number of eligible employees. Long
term incentives granted as performance rights are subject to meeting the performance hurdles.

(e) Employee benefits - Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal
retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The
Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no
longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring
that is within the scope of AASB 137 Provisions, Contingent Liabilities and Contingent Assets and involves
the payment of termination benefits.

Page 107 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 18. Borrowings

Borrowings are initially recognised at fair value net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds and the redemption
amount is recognised in the Consolidated Income Statement over the period of the borrowings using the
effective interest method.

Fees paid on the establishment of loan facilities, which are not incremental costs relating to the drawdown
of the facilities, are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down, otherwise they are recognised as prepayments and amortised on a
straight-line basis over the term of the facility.

Non-current

Bank loans (unsecured)

(a) Available facilities

2022
$m

2021
$m

3,690

4,290

At 31 December 2022, the Group has total loan facilities of $4,700 million (31 December 2021: $5,250
million). The total amount of undrawn borrowing facilities at 31 December 2022 was $1,045 million (31
December 2021: $995 million) which includes a committed overdraft facility of $35 million (31 December
2021: $35 million).

The Group’s bank loan facilities contain undertakings to comply with financial covenants. These require
that the Group operates within certain financial ratios. The financial covenants that the Group is subject to
are Leverage and Interest Coverage. Additionally, the Group is required to ensure that the Total Assets and
EBITDA of the guarantors meet minimum threshold amounts of Total Assets and consolidated EBITDA of
the Group.

There were no breaches of financial covenants during the year ended 31 December 2022.

Note 19. Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount
has been reliably estimated. Provisions are not recognised for future operating losses. Provisions are
measured at the present value of the Group’s best estimate of the expenditure required to settle the
present obligation at the reporting date.

The discount rate used to determine the present value reflects current market assessments of the time
value of money and the risks specific to the liability.

(a) Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as a provision. An
onerous contract is considered to exist where the Group has a contract under which the unavoidable costs
of meeting the obligations under the contract exceed the economic benefits expected to be received
under it.

(b) Make good provisions

A provision has been made for the present value of anticipated future costs of restoration of leased
premises.

The provision includes future cost estimates associated with removing any leasehold improvements. The
costs have been capitalised as part of the cost of leasehold improvements and are amortised over the
shorter of the term of the lease or the useful life of the assets.

Page 108 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 19. Provisions continued

The Group records a provision for decommissioning costs on its network. Decommissioning costs are
provided at the present value of expected costs to settle the obligation using estimated cash flows and are
recognised as part of the cost of that particular asset. The estimated future costs of decommissioning are
reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount
rate applied are added to or deducted from the cost of the asset.

(d) Annual leave employee benefit obligations

Liabilities for annual leave that are expected to be settled wholly within 12 months after the end of the
reporting period in which the employees render the related service are recognised in provision for
employee benefits in respect of employees’ services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled.

(e) Long service leave and other long-term employee benefit obligations

The Group has liabilities for long service leave that are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service. The liability for long service
leave is recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on
national corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows. The obligations are presented as current liabilities in the consolidated
statement of financial position if the entity does not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless of when the actual settlement is expected to
occur.

Current

Employee benefits

Decommissioning and make good

Other provisions

Non-current

Employee benefits

Decommissioning and make good

2022
$m

2021
$m

108

(a) Movement in provisions (excluding employee benefits)

Balance at 1 January 2022

Additional amounts recognised during the year

Amounts used during the year

Balance at 31 December 2022

DECOMMISSIONING
AND MAKE GOOD
$m

OTHER
PROVISIONS
$m

TOTAL
$m

(14)

(16)

107

(30)

Page 109 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 20. Other liabilities

Current

Carrier network payables

Other contract liabilities

Other payables

Non-current

Carrier network payables

Other financial liabilities

Other contract liabilities

Other payables

2022

2021
Restated*
$m

*Refer to Note 2(l) for restatement.

Other financial liabilities represent amounts arising from sale-and-leaseback transaction accounted as
financial liability under the accounting standards (Refer to Note 13).

Other contract liabilities represent amounts arising from the master service agreement with OMERS, which
are different from the contract liabilities associated with unearned revenue that primarily relate to the
advance consideration received from customers for services provided.

Note 21. Contributed equity

Where any Group company purchases the Company’s equity instruments, for example as a result of a
share-based payment plan, the consideration paid, including any directly attributable incremental costs
(net of income taxes) is deducted from equity attributable to the Owners of the Company as treasury
shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued,
any consideration received, net of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the Owners of the Company.

Shares held by the TPG Employee Incentive Plan Trust are disclosed as treasury shares and deducted in
the reserves.

2022
SHARES

2021
SHARES

2022
$m

2021
$m

Ordinary shares (fully paid)

1,859,341,669

18,399

Page 110 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 22. Reserves

(a) Cash flow hedge reserve

The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value
of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss or
directly included in the initial cost or other carrying amount of a non-financial asset or non-financial
liability.

(b) Foreign currency translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the presentation
currency of the reporting entity.

The share-based payments reserve is used to recognise the fair value of all shares and rights both issued
and issued but not exercised under the various employee share plans, as well as purchases of shares by
the TPG Employee Incentive Plan Trust. (Refer to Note 25).

The table below provides the number and amount of treasury shares in the share-based payments reserve

Shares acquired by the TPG Employee
Incentive Plan Trust
(average price: $5.94 per share)

(d) Common control reserve

31 DEC
2022
SHARES

31 DEC
2021
SHARES

31 Dec
2022
$m

31 Dec
2021
$m

2,395,453

The common control reserve comprises differences arising from transfers of assets and liabilities in
exchange of equity interests among entities with shareholders that had jointly controlled the Company
during the year.

Cash flow hedge reserve

Foreign currency translation reserve

Common control reserve

Share-based payments reserve

Movement in reserves

Balance at 1 January

Change in value of cash flow hedge reserve

Change in value foreign currency translation reserve

Change in value of common control reserve

Change in value of share-based payments reserve

Balance at 31 December

Page 111 | TPG Telecom Annual Report 2022

2022

(1)

(7)

(3)

(10)

(3)

2021

(1)

Notes to the consolidated financial statements continued

Note 23. Dividends

During the year ended 31 December 2022, the following dividends were paid:
•

fully franked final FY21 dividend of $158 million (8.5 cents per fully paid share) was paid on 11 April
2022 (2021: $139 million)
fully franked interim FY22 dividend of $167 million (9.0 cents per fully paid share) was paid on 12
October 2022 (2021: $149 million)

•

Subsequent to year end, on 27 February 2023, the Board of directors have declared a fully franked final
FY22 dividend of 9.0 cents per share. As the final dividend was not declared or resolved to be paid by the
Board as at 31 December 2022, the dividend has not been provided for in the Consolidated Statement of
Financial Position. The final FY22 dividend has a record date of 16 March 2023 and will be paid on 13 April
2023.

All dividends declared or paid during the year were fully franked at the tax rate of 30%.

Dividend franking account

Franking credits available for subsequent reporting periods based on a tax rate of 30%
(2021 – 30%)

2022

2021

277

417

The above available amounts are based on the balance of the dividend franking account at year-end
adjusted for:
•
•

franking credits that will arise from the payment of the current tax liabilities; and
franking credits transferred in on business combinations.

Note 24. Related party transactions

(a) Parent entity

TPG Telecom Limited is the head entity of the Group.

(b) Interests in other entities

Interests in other entities are set out in Note 12.

The aggregate compensation made to directors and other members of the key management personnel of
the Group is set out below:

Short-term employee benefits

Post-employment benefits

Long-term benefits

Termination, retention and sign-on payments

Share and cash incentive payments

2022
$’000

8,841

207

(155)

398

2,758

2021
$’000

11,373

242

1,469

2,268

12,049

15,431

Page 112 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 24. Related party transactions continued

(d) Transactions with related parties

Purchases of goods and services

Purchases of equipment

Service expense

Roaming expense

Inter-operator tariff expense

Provision of services

Service income

Roaming income

Inter-operator tariff income

Other transactions

Office rental

2022
$’000

2021
$’000

815

46,270

8,237

2,118

1,097

1,350

1,177

26,124

44,931

2,810

3,390

1,679

1,111

3,204

1,728

1,723

All transactions were made on normal commercial terms and conditions and at market rates.

(e) Outstanding balances arising from sales/purchases of goods and services

The following balances are outstanding at the end of the reporting period in relation to transactions with
related parties:

Current receivables

Related parties

Current payables

Related parties

2022
$’000

2021
$’000

1,445

347

7,030

5,045

Page 113 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 25. Share-based payments

(a) Share-based payments expense

Share-based compensation benefits are provided to Executives and eligible employees via the short-term
incentive (STI) and long-term incentive (LTI) schemes.

The fair value of shares granted to employees for nil consideration is recognised as an expense over the
relevant service period, being the year (or years) to which the STI and LTI relates and the vesting period of
the shares. The fair value is measured at the grant date of the shares and is recognised in equity in the
share-based payment reserve. The number of shares expected to vest is estimated based on non-market
and market performance conditions. (Non-market performance conditions being operating free cash flow
and market performance conditions being total shareholder return.) The estimates are revised at the end
of each reporting period and adjustments are recognised in profit or loss and the share-based payment
reserve.

Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expenses
previously recognised in relation to such shares are reversed effective from the date of the forfeiture.

Treasury shares are shares in TPG Telecom Limited that are held by the TPG Employee Incentive Plan Trust
for the purpose of issuing shares under the short-term incentive (STI) and long-term incentive (LTI)
schemes provided to Executives and eligible employees. The TPG Employee Incentive Plan Trust was
established on 17 March 2022 for the purposes of acquiring shares under the STI and LTI plans.

Shares issued to employees are recognised on a first-in-first-out basis.

The shares are administered by the TPG Employee Incentive Plan Trust. This trust is consolidated in
accordance with note 2 (b). The shares are acquired on market at the Board's discretion and are held as
treasury shares until such time as they are vested. Forfeited shares are reallocated in subsequent grants.
Under the terms of the trust deed, TPG Telecom Limited is required to provide the trust with the necessary
funding for the acquisition of the shares. The number of shares held by the TPG Employee Incentive Plan
Trust on 31 December 2022 is 2,395,453, acquired at an average price of $5.94 per share (31 December
2021 nil shares were held).

The remuneration report sets out the details relating to the TPG share plans (pages 31 to 35),
together with details of the LTI performance share rights (pages 34 to 35) and deferred share rights (pages
31 to 33) issued to the CEO and other key management personnel.

The Group continues to recognise its Share-based payment schemes as an employee benefits expense
with a corresponding increase in reserves. The amount expensed in the year was $4,808,000 (31
December 2021: $2,817,000).

(b) Performance rights - LTI

Under the LTI scheme, the CEO and Executives are granted a LTI amount in the form of rights to shares of
the Company. The rights are granted in the first year, and subject to the achievement of the LTI scheme
performance conditions, will vest at the end of the three-year performance period. They automatically
convert into one ordinary share each on vesting at an exercise price of nil. The Executives do not receive
any dividends and are not entitled to vote in relation to the performance rights during the vesting period. If
any executive ceases to be employed by the Group within this period, the rights will be forfeited, except in
special circumstances (including redundancy, retirement, death or total and permanent disability or as
otherwise agreed by the Board).

Page 114 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 25. Share-based payments continued

(b) Performance rights – LTI continued

The number of rights granted or outstanding during the year ended 31 December 2022 are set out below.

Weighted average of contractual life of all performance share rights
outstanding

At 1 January

Granted during the year

Vested during the year

Forfeited during the year

At 31 December

31 DECEMBER

2022

2021

NUMBER OF
RIGHTS

1.75 years

2.25 years

1,160,407

1,373,497

1,270,701

(110,294)

2,533,904

1,160,407

All awards granted during the year have a $0 exercise price

The accounting valuation represents the independent valuation of each tranche of Performance Share
Rights (‘PSR’) at their respective grant dates. The valuations for the year ended 31 Dec 2022 have been
performed by an external independent valuer using Total Shareholder Return (‘TSR’) and Operating Free
Cash Flow (‘OFCF’). Performance Share Rights with a market vesting condition (for example, TSR)
incorporates the likelihood that the vesting condition will be met. The accounting valuation of Performance
Share Rights with a non-market vesting condition (for example, OFCF) considers the likelihood that the
vesting condition will be met.

TSR hurdle – The external independent valuer has utilised the Monte-Carlo model which incorporates the
impact of performance hurdles and the vesting scale on the value of the PSRs was used. This pricing
model takes into account factors such as the Company’s share price at the date of grant, volatility of the
underlying shares, the risk-free rate of return, expected dividend yield and the likelihood that vesting
conditions will be met. The accounting valuation of rights issued is allocated equally over the vesting
period.

OFCF hurdle – The external independent valuer has utilised the Black-Scholes model to determine the fair
value of PSRs. This pricing model takes into account factors such as the Company’s share price at the date
of grant, the risk-free rate of return, expected dividend yield and time to maturity. The accounting valuation
of rights issued is allocated over the vesting period so as to take into account the expected level of
vesting over the performance period.

Page 115 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 25. Share-based payments continued

(b) Performance rights – LTI continued

The model inputs for performance share rights granted during the year ended 31 December 2022 included:

GRANT DATE

3-MAY-22

5-MAY-22

6-MAY-21

24-SEP-21

Share price as at Grant Date

Risk-free rate

Dividend yield

Effective life

Exercise price

TPG volatility

$5.66

2.98%

3.8%

2.9

Nil

30%

$5.66

2.92%

3.8%

2.9

Nil

30%

$5.24

0.23%

3.33%

2.65

Nil

30%

$6.91

0.10%

2.43%

2.27

Nil

30%

The expected price volatility is based on the historic volatility of share prices of each company within the
peer group of TPG Telecom.

Consolidated - 2022

GRANT
DATE

PLAN

EXPIRY DATE HURDLE

3-May-22

LTI 2022-2024

31-Mar-26

OFCF

3-May-22

LTI 2022-2024

31-Mar-26

TSR

5-May-22

LTI 2022-2024

31-Mar-26

OFCF

5-May-22

LTI 2022-2024

31-Mar-26

TSR

Consolidated - 2021

GRANT DATE PLAN

EXPIRY DATE HURDLE

6-May-21

LTI 2021-2023

31-Mar-25

OFCF

6-May-21

LTI 2021-2023

31-Mar-25

TSR

24-Sep-21

LTI 2021-2023

31-Mar-25

OFCF

24-Sep-21

LTI 2021-2023

31-Mar-25

TSR

FAIR VALUE PER
PERFORMANCE SHARE
RIGHT AT GRANT DATE

SHARE
PRICE

VESTING

DATE

$5.07

$5.66

31-Mar-25

$3.02

$5.66 31-Mar-25

$5.07

$5.66 31-Mar-25

$2.98

$5.66 31-Mar-25

FAIR VALUE PER
PERFORMANCE SHARE
RIGHT AT GRANT DATE

SHARE
PRICE

VESTING
DATE

$4.80

$5.24 31-Mar-24

$1.26

$5.24 31-Mar-24

$6.54

$6.91 31-Mar-24

$2.73

$6.91 31-Mar-24

Page 116 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 25. Share-based payments continued

The Group offers a short-term incentive scheme to executives who receive 55% of the annual STI achieved
in cash and 45% in the form of rights to deferred shares of TPG Telecom (60% cash and 40% deferred
share rights in 2021). The rights are granted the following year and vest equally in two tranches. The first
tranche will vest in March one year after the end of the financial year and the second tranche will vest in
March two years after the end of the financial year. They automatically convert into one ordinary share
each on vesting at an exercise price of nil. The executives do not receive any dividends and are not
entitled to vote in relation to the deferred shares during the vesting period. If any executive or eligible
employee ceases to be employed by the Group within this period, the rights will be forfeited, except in
special circumstances (including redundancy, retirement, death or total and permanent disability or as
otherwise agreed by the Board).

The number of rights to be granted is determined based on the currency value of the achieved STI divided
by the volume weighted average price of the Group’s ordinary shares over 5 days following the
announcement of annual results ($5.70 for rights granted 3 May 2022 and 5 May 2022 and $6.80 for the
rights granted in 2021).

As at 1 January

Granted during the year

Vested during the year

Forfeited during the year

As at 31 December

Weighted average remaining contractual life of the deferred
shares outstanding at the end of the period

Note 26. Commitments and contingencies

(a) Capital commitments

2022

2021

NUMBER OF SHARES

54,709

563,629

(27,355)

590,983

0.58 years

54,709

0.75 years

Significant capital expenditure contracted for at the end of the reporting period but not recognised as
liabilities is as follows:

Property, plant & equipment

(b) Contingent liabilities

2022
$m

454

2021
$m

323

The Group will incur approximately $29 million of decommissioning costs related to the Regional Multi-
Operator Core Network Agreement with Telstra (refer to Note 31) which will be recognised on approval by
the Australian Competition Tribunal.

Page 117 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 27. Parent entity financial information

Investments in subsidiaries by the Company are accounted for at cost. The financial information for the
Company has been prepared on the same basis as the consolidated financial statements.

The parent entity financial information for the year ended 31 December 2022 has been prepared on the
basis that the transactions and balances of the Group are all recorded in the Parent Entity of the Group,
being TPG Telecom Limited.

TPG Telecom Limited and its wholly-owned subsidiary Australian controlled entities have implemented the
tax consolidation legislation.

The head entity, TPG Telecom Limited, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the
tax consolidated group continues to be a stand-alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, TPG Telecom Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully
compensate TPG Telecom Limited for any current tax payable assumed and are compensated by TPG
Telecom Limited for any current tax receivable and deferred tax assets relating to unused tax losses or
unused tax credits that are transferred to TPG Telecom Limited under the tax consolidation legislation. The
funding amounts are determined by reference to the amounts recognised in the wholly-owned entities'
financial statements.

(a) Summary financial information

Financial position

Assets

Current assets

Non-current assets

Total assets

Liabilities

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Cash flow hedge reserve

Pre-merger accumulated losses

Post-merger retained earnings

Total equity

Financial performance

Profit for the year

Total comprehensive profit for the year

2022

2021
Restated
$m

812

2,178

19,813

18,5041

20,625

20,682

1,497

6,521

8,018

1,416

6,5791

7,995

12,607

12,687

18,399

(1)

(7,389)

1,598

1,674

12,607

12,687

249

251

567

568

1. In addition to note 2(l), parent entity comparatives have been adjusted to fully reflect gross inter-company balances. These
changes in the parent entity had no impact on the Group balances due to being eliminated on consolidation.

Page 118 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 27. Parent entity financial information continued

(b) Guarantees entered into by the parent entity

Unsecured

2022
$m

2021
$m

As at 31 December 2022, the parent entity had the following contractual commitments for the acquisition
of property, plant or equipment. These commitments are not recognised as liabilities as the relevant assets
have not yet been received.

Property, plant & equipment

(d) Contingent liabilities

2022
$m

454

2021
$m

323

The parent entity will incur approximately $29 million of decommissioning costs related to the Regional
Multi-Operator Core Network Agreement with Telstra (refer to Note 31) which will be recognised on
approval by the Australian Competition Tribunal.

Page 119 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 28. Deed of cross guarantee

The parties to the deed of cross guarantee are those as disclosed in Note 12. Each entity that is a party to
the deed of cross guarantee has guaranteed the debts of the other parties. By entering into the deed, each
of the wholly-owned entities that would otherwise be subject to the requirement to prepare a financial
report and director’s report have been relieved from that requirement under ASIC Corporations (Wholly-
owned Companies) Instrument 2016/785.

Set out below is the summarised consolidated statement of profit or loss and other comprehensive income
for the entities that are parties to the deed of cross guarantee.

Revenue from contracts with customers

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Technology costs

Employee benefits expense

Other operating expenses

Earnings before interest, tax, depreciation and amortisation

Depreciation and amortisation expense

Results from operating activities

Finance income

Finance expenses

Net financing costs

Profit before income tax

Income tax expense

Profit for the year

Items that may subsequently be reclassified to the income statement, net of tax:

Net gain on cash flow hedges taken to equity

Other comprehensive income for the year, net of tax

Total comprehensive income for the year

*Refer to Note 2(l) for restatement.

Summary of movements in consolidated retained earnings

Accumulated losses at the beginning of the financial year

Profit for the year

Dividends paid

Accumulated losses at the end of the financial year

*Refer to Note 2(l) for restatement.

Page 120 | TPG Telecom Annual Report 2022

2022

5,415

438

2021
Restated*
$m

5,273

(1,635)

(1,652)

(974)

(359)

(334)

(421)

(891)

(358)

(360)

(322)

2,130

1,731

(1,374)

(1,409)

756

(189)

(187)

569

(45)

322

(150)

(149)

173

(50)

524

123

526

124

2022

2021
Restated*
$m

(6,675)

(6,510)

524

(325)

123

(288)

(6,476)

(6,675)

Notes to the consolidated financial statements continued

Note 28. Deed of cross guarantee continued

Set out below is the consolidated statement of financial position for the deed of cross guarantee.

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Prepayments and other assets

Total current assets

Non-current assets

Trade and other receivables

Property, plant and equipment

Right-of-use assets

Intangible assets

Deferred tax assets

Derivative financial instruments

Prepayments and other assets

Total non-current assets

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Contract liabilities

Lease liabilities

Provisions

Other liabilities

Total current liabilities

Non-current liabilities

Contract liabilities

Borrowings

Lease liabilities

Provisions

Other liabilities

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Contributed equity

Reserves

Accumulated losses

Total equity

*Refer to Note 2(l) for restatement.

Page 121 | TPG Telecom Annual Report 2022

2022

2021
Restated*
$m

112

834

155

1,183

357

3,518

1,503

200

461

814

203

3,290

1,294

12,556

13,075

183

261

18,139

19,322

18,150

18,964

1,125

283

909

281

108

1,672

1,458

3,690

1,868

5,730

7,402

11,920

4,290

1,359

5,777

7,235

11,729

18,399

(3)

(6,476)

11,920

(6,675)

11,729

Notes to the consolidated financial statements continued

Note 29. Financial risk management

The Group’s activities are exposed to a variety of financial risks which include market risk (including
interest rate risk and foreign currency risk), credit risk and liquidity risk. The Group’s overall risk
management seeks to minimise the potential adverse effects of these risks on the financial performance of
the Group.

The Board of directors has overall responsibility for the establishment and oversight of the risk management
framework.

The Group’s exposure to each of the above risks is managed in accordance with the Board approved
Treasury Policy. This note presents information about the Group’s exposure to the above risks and the
management thereof. Further quantitative disclosures are included throughout this financial report.

The Treasury Policy includes the identification, management and reporting of financial risks and associated
controls. The Treasury Policy and systems are reviewed regularly to reflect changes in market conditions
and in the Group’s activities. The Treasury Policy establishes a disciplined and constructive control
environment in which all employees understand their roles and obligations.

The Group’s Audit & Risk Committee oversees how management monitors compliance with the Group’s
Treasury Policy and reviews the adequacy of the risk management framework in relation to the financial
risks faced by the Group.

Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch
between the hedging instrument and the hedged item. This will effectively result in recognising interest
expense at a fixed interest rate for the hedged floating rate loans.

Refer to Note 11 for the derivative financial instruments held and hedging accounting applied by the
Group.

(a) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while
optimising return.

(b) Interest rate risk

The Group has cash balances placed with reputable banks and financial institutions which generate interest
income for the Group. The Group manages its interest rate risks on its interest income by placing the cash
balances on varying maturities and interest rate terms.

The Group’s borrowings include bank borrowings and leases. The Group’s main interest rate risk arises
from bank borrowings, which expose the Group to interest rate risk. As at the end of the reporting period,
the exposure of the Group’s borrowings (excluding leases under AASB 16) to interest rate changes are as
follows:

Variable rate borrowings

Fixed rate borrowings

2022

3,690

PERCENTAGE OF
TOTAL LOANS

100%

2021

4,290

PERCENTAGE OF
TOTAL LOANS

100%

Page 122 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

(b) Interest rate risk continued

During the year, the Group has entered forward-start interest rate swaps that hedge a portion of the
Group’s interest expenses in future periods. Swaps currently in place cover 0% (2021: 0%) of the variable
loan principal outstanding as at 31 December 2022.

The swap contracts require settlement of net interest receivable or payable every three months. The
settlement dates coincide with the dates on which interest is payable on the underlying debt.

As at 31 December 2022, a change in the market interest rate of 50 basis points would have increased
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables remain constant.

Interest rates – Increase by 50 basis points

Interest rates – Decrease by 50 basis points

PROFIT/(LOSS)1

EQUITY1

2022
$m

(13)

2021
$m

(15)

2022
$m

(13)

2021
$m

(15)

1. This is a result of the net changes in interest expenses and income tax expenses.

The Group is exposed to currency risk on revenues, expenses, receivables and payables that are
denominated in a currency other than its functional currency, the Australian dollar (AUD). The Group is
mainly exposed to the United States Dollar (USD) with minor exposures to other currencies.

The group’s exposure to USD at the end of the year, expressed in Australian dollar, was as follows:

Trade and other receivables

Trade and other payables

2022
$m

2021
$m

During the year, the following foreign exchange related amounts were recognised in consolidated income
statement and consolidated statement of comprehensive income:

Profit or loss

Foreign exchange (loss)/gain

Other comprehensive income

Movement in reserves

2022
$m

2021
$m

(10)

(1)

Page 123 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

The following table details the Group’s sensitivity to movements in the Australian dollar against relevant
foreign currencies. The percentages disclosed below represent changes in spot foreign exchange rates
(i.e. forward exchange points and discount factors have been kept constant). The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjusts their translation at
the period end for a given percentage change in foreign exchange rates. A positive number indicates an
increase in profit and equity and a negative number indicates a decrease in profit and equity.

USD impact

10%

(10%)

PROFIT/(LOSS)1

EQUITY

2022
$m

2021
$m

2022
$m

2021
$m

(1)

(2)

1. Profit/(loss): this is mainly as a result of the after-tax changes in the value of forward foreign exchange contracts not designated

in a hedge relationship, foreign currency investments, receivables and payables.

(d) Credit risk

Credit risk is managed on an entity basis. Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions, as well as credit exposures to related parties. The Group has adopted a
policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss
from defaults.

Impairment of financial assets (trade receivables)

The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all receivables. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due.

1-30
DAYS
PAST DUE

31 TO 60
DAYS
PAST DUE

61 TO 90
DAYS
PAST DUE

MORE THAN
91 DAYS
PAST DUE

TOTAL

CURRENT

At 31 December 2022

Expected loss rate

Gross trade receivables $m

Loss allowance

At 31 December 2021

Expected loss rate

Gross trade receivables $m

Loss allowance

3.8

161

5.8

151

8.1

9.0

17.0

30.0

82.0

23.0

37.9

79.3

219

204

The table above covers the expected credit loss rate of trade receivables and other debtors. Collectability
of receivables are reviewed on an ongoing basis. The Group applies the AASB 9 simplified approach to
measuring expected credit losses which uses a lifetime expected loss allowance for all receivables. To
measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due.

Geographically, the Group is subject to a concentration of credit risk as predominantly all of its revenue is
generated in Australia.

Page 124 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

(e) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. Treasury aims at maintaining flexibility in funding by
keeping committed credit lines available with a variety of counterparties. Surplus funds are generally only
invested in instruments that are tradeable in highly liquid markets.

Contractual maturities of financial liabilities

The contractual maturities of the Group’s financial liabilities were as follows:

FINANCIAL
LIABILITIES

At 31 December 2022

Non-derivatives

Trade and other
payables

Borrowings

Lease liabilities

At 31 December 2021

Non-derivatives

Trade and other
payables

Borrowings

Lease liabilities

LESS
THAN
6 MONTHS
$m

6-12
MONTHS
$m

BETWEEN
1-2 YEARS
$m

BETWEEN
2-5 YEARS
$m

OVER
5 YEARS
$m

TOTAL
CONTRACTUAL
CASH FLOWS
$m

CARRYING
AMOUNT
OF
LIABILITIES
$m

1,185

1,364

1,118

103

109

212

1,239

122

2,111

204

2,315

1,854

578

2,432

162

237

4,383

427

4,810

2,024

1,280

1,185

4,157

3,005

8,347

3,690

1,965

6,840

1,118

4,531

2,039

7,688

4,290

1,420

6,828

Page 125 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

(f) Fair value measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction in the principal market at the measurement date under current market conditions. Fair
value is an exit price regardless of whether that price is directly observable or estimated using another
valuation technique.

Specific valuation techniques used to value financial instruments include:
•
•

the use of quoted market prices or dealer quotes for similar instruments;
the fair value of interest rate swaps is determined using the present value of the estimated cash flows
based on observable yield curves; and
the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

•

The following table summarises information on how the fair values of financial instruments measured at fair
value are determined.

DESCRIPTION

VALUATION TECHNIQUE

Handset receivables Trade receivables from contracts with customers measured at fair value are such where the

instrument does not meet the classification requirements of financial assets at amortised cost.

Handset receivables expected to be sold are measured at fair value based on quoted price
from the third party factor (e.g. banks or other financial institutions).

(g) Fair value hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Group
classifies its financial instruments into the three levels prescribed under the accounting standards.

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivative,
and trading and available-for-sale securities) is based on quoted (unadjusted) market prices at the
end of the reporting period. The quoted market price used for financial assets held by the Group
is the current bid price. These instruments are included in Level 1.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-

the-counter derivatives) is determined using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as little as possible on
entity specific estimates. If all significant inputs required to fair value an instrument are observable,
the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is

included in Level 3. This is the case for unlisted equity securities.

Page 126 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

(g) Fair value hierarchy continued

The following table presents the Group’s financial assets measured and recognised at fair value at
31 December 2022 and 31 December 2021 on a recurring basis:

At 31 December 2022

Financial assets

Handset receivables

Interest rate swaps

Total financial assets

At 31 December 2021

Financial assets

Handset receivables

Total financial assets

LEVEL 1
$m

LEVEL 2
$m

LEVEL 3
$m

TOTAL
$m

130

There were no financial liabilities measured and recognised at fair value at 31 December 2022 and 31
December 2021.

The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the
end of the reporting period. There were no transfers between levels during the period.

The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis
as at 31 December 2022 (2021: nil).

Page 127 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 29. Financial risk management continued

(h) Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain the future development of the business. The Board monitors return on capital,
which the Group defines as profit from operating activities divided by total shareholders’ equity. The Board
also determines the level of dividends to be paid to shareholders.

The Board seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings, and the advantages and security afforded by a sound capital position.

From time to time, the Group may purchase its own shares on market for the purpose of issuing shares
under employee share plans. The Group does not currently have a defined share buy-back plan.

There were no changes to the Group’s capital management during the year.

The Group’s net debt to equity ratio at the reporting date was as follows:

Cash and cash equivalents

Borrowings (current)

Borrowings (non-current)

Lease liabilities (current)

Lease liabilities (non-current)

Net debt

Total equity

Net debt to equity ratio at 31 December

Note 30. Auditor’s remuneration

2022
$m

114

2021
$m

202

(3,690)

(4,290)

(93)

(61)

(1,872)

(1,359)

(5,541)

(5,508)

11,900

11,718

0.47

The Group’s external auditor is PricewaterhouseCoopers (PwC). In addition to the audit and review of the
Group’s financial reports, PwC provides other services throughout the year. This note shows the total fees
to external auditors split between audit, audit related and non-audit services.

Audit and other assurance services

Audit and review of financial statements

Audit of non-statutory financial statements and reports

Other statutory audit services

Other assurance services

Non-audit services

2022
$’000

2021
$’000

2,365

2,138

481

2,882

2,211

2,882

2,211

Page 128 | TPG Telecom Annual Report 2022

Notes to the consolidated financial statements continued

Note 31. Events occurring after the reporting period

Other than the below mentioned matters, there have been no other matter or circumstance that has arisen
after the reporting date that has significantly affected, or may significantly affect:

(i) the operations of the Company and of the Group in future financial years, or

(ii) the results of those operations in future financial years, or

(iii) the state of affairs of the Company and of the Group in future financial years.

Update on the regional MOCN agreement with Telstra

On 21 February 2022, the Group announced a regional Multi-Operator Core Network (‘MOCN’) agreement
with Telstra (ASX:TLS) which will provide TPG Telecom’s subscribers with 4G and 5G coverage for data,
calls and messaging from over 3,700 Telstra sites in regional and rural Australia.

On 21 December 2022, the Australian Competition & Consumer Commission (‘ACCC’) decided not to grant
authorisation for the proposed arrangement.

Consequently, TPG Telecom has submitted an application to the Australian Competition Tribunal for a
review of the decision, with a Tribunal decision expected in the first half of FY23.

As a result, the potential financial impacts highlighted in the FY22 half year report (impairment of fixed
assets and ROU assets) have not been recognised in FY22.

Dividends declared

The Board of directors have declared a fully-franked final FY22 dividend of 9.0 cents per share on 27
February 2023. As the final dividend was not declared or resolved to be paid by the Board of directors as
at 31 December 2022, the dividend has not been provided for in the Consolidated Statement of Financial
Position. The dividend has a record date of 16 March 2023 and will be paid on 13 April 2023. All dividends
declared or paid were fully franked at the tax rate of 30%. The ability to utilise the franking credits is
dependent upon the ability of the Company to pay dividends. The impact on the dividend franking account
of dividends proposed after the balance sheet date but not yet recognised as a liability is to reduce it by
$72 million (2021: $68 million).

Page 129 | TPG Telecom Annual Report 2022

Directors’ declaration

In the Directors’ opinion:

(a) the financial statements and notes are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standards, the Corporations Regulation 2001 and other mandatory

professional reporting requirements, and

(ii) giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its

performance for the financial year ended on that date, and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when

they become due and payable, and

extended closed group identified in Note 12 will be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee described in Notes 12 and
28.

Note 2 confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial
Officer as required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

Fok Kin Ning, Canning
Chairman

27 February 2023

Iñaki Berroeta
Chief Executive Officer and Managing Director

27 February 2023

Page 130 | TPG Telecom Annual Report 2022

Independent auditor’s report

Page 131 | TPG Telecom Annual Report 2022

Independent auditor’s report continued

Page 132 | TPG Telecom Annual Report 2022

Independent auditor’s report continued

Page 133 | TPG Telecom Annual Report 2022

Independent auditor’s report continued

Page 134 | TPG Telecom Annual Report 2022

ASX additional information
for the year ended 31 December 2022

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below. The shareholding information is current as at 3 February 2023.
As at that date, there were 1,859,341,669 ordinary shares held by 24,215 shareholders.

Substantial shareholders

The number of shares in which the substantial shareholders and their associates have disclosed a Relevant
Interest pursuant to the Corporations Act 2001 Section 671B are listed below.

NAME OF SHAREHOLDER

CK Hutchison Holdings Limited and its
subsidiaries1

Vodafone Group Plc and its subsidiaries1

Vodafone Hutchison (Australia) Holdings
Pty Ltd1

Li Ka-Shing Unity Trustee Company
Limited as trustee of The Li Ka-Shing
Unity Trust2

David Teoh and Vicky Teoh and their
associates

Washington H Soul Pattinson and
Company Limited

Brickworks Limited3

NUMBER OF ORDINARY SHARES IN WHICH
A RELEVANT INTEREST IS HELD*

ISSUED CAPITAL

931,530,176

264,121,325

234,396,121

50.10%

14.21%

12.61%

* Relevant Interest as defined in the Corporations Act 2001 Sections 608 and 609, and provided in the above-referenced notices.
1. Substantial holding includes 25.05% from a deemed relevant interest arising from a shareholders agreement dated 24 June 2020.

For further details, see Form 604s lodged with the ASX on 13 July 2022 and 15 July 2020.

2. Substantial holding arises from its interests in CK Hutchison Holdings Limited. The interests disclosed for this substantial holder

are in respect of the same shares identified as being interests of CK Hutchison Holdings Limited. For further details see Form 604
lodged with the ASX on 15 July 2020.

3. Brickworks Limited’s substantial holding in the company arises by virtue of it holding an interest in Washington H Soul Pattinson

and Company Limited. For further details see Form 604 lodged with the ASX on 17 July 2020.

Voting rights (ordinary shares)

On a show of hands every member present at a meeting in person or by proxy shall have one vote, and
upon a poll each share shall have one vote.

Distribution of equity security holders

An analysis of the number of shareholders by size of holding as at 3 February 2023 is set out below:

NUMBER OF SHARES HELD

NUMBER OF HOLDERS

UNITS

% UNITS

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 Over

12,540

5,148,551

8,312

1,790

1,406

20,646,496

13,191,910

34,141,869

117

1,786,212,843

24,165

1,859,341,669

0.28

1.11

0.71

1.84

96.07

100.00

The number of shareholders holding less than a marketable parcel of ordinary shares is 2,428.

Page 135 | TPG Telecom Annual Report 2022

ASX additional information continued

Twenty largest shareholders (as at 3 February 2023)

NAME OF SHAREHOLDER

VODAFONE HUTCHISON (AUSTRALIA) HOLDINGS LIMITED

WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED

HUTCHISON 3G AUSTRALIA HOLDINGS PTY LIMITED

VODAFONE INTERNATIONAL OPERATIONS LIMITED

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

NETWEALTH INVESTMENTS LIMITED

TSH HOLDINGS PTY LTD

VICTORIA HOLDINGS PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

CITICORP NOMINEES PTY LIMITED

NATIONAL NOMINEES LIMITED

VICTORIA HOLDINGS NO 3 PTY LTD

BNP PARIBAS NOMINEES PTY LTD < DRP>

VICTORIA HOLDINGS NO 1 PTY LTD

VICTORIA HOLDINGS NO 2 PTY LTD

BNP PARIBAS NOMS PTY LTD < AGENCY LENDING DRP>

J S MILLNER HOLDINGS PTY LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

TSH HOLDINGS NO 1 PTY LTD

TSH HOLDINGS NO 2 PTY LTD

NUMBER OF ORDINARY

SHARES HELD % OF CAPITAL HELD

517,345,024

227,744,846

207,092,576

132,925,266

86,815,491

68,278,498

66,654,913

63,215,698

52,946,701

26,733,742

12,625,118

11,677,394

9,468,839

7,596,020

7,220,199

6,391,902

6,312,559

1,733,918,760

27.82

12.25

11.14

7.15

4.67

3.67

3.58

3.40

2.85

1.44

0.68

0.63

0.51

0.41

0.39

0.34

93.25

NUMBER OF
HOLDERS

Unquoted equity securities

As at 3 February 2023, the number of unquoted equity securities is:

UNQUOTED EQUITY SECURITIES

NUMBER OF SECURITIES

Performance rights

Deferred share rights

Stock exchange

2,533,904

585,264

TPG Telecom Limited is listed on the Australian Stock Exchange. The home exchange is Sydney, and the
ASX code is TPG.

Other information

TPG Telecom Limited, incorporated and domiciled in Australia, is a publicly listed company limited by
shares.

Page 136 | TPG Telecom Annual Report 2022

ASX additional information continued

Principal Registered Office

Level 1, 177 Pacific Highway
North Sydney NSW 2060

Telephone: 133 121

Email: investor.relations@tpgtelecom.com.au

Website: tpgtelecom.com.au

Share Registry

Computershare Investor Services Pty Ltd
Level 3, 60 Carrington Street
Sydney NSW 2000

Telephone:
(within Australia) 1300 850 505
(international) +61 3 9415 4000

Website: investorcentre.com/au

Glossary

TERM

EXPLANATION

Adjust NPAT

Statutory Net Profit After Tax adding back restructuring costs, customer base intangible
amortisation, spectrum amortisation and non-cash tax expense.

AMPU

ARPU

BBSY

Capex

Average Margin Per Unit.

Average Revenue Per Unit.

Bank Bill Swap Rate (ask and bid) – a widely used benchmark rate in both lending transactions
and interest rate derivative products.

Cash invested to fund the purchase, upgrade or improve long term assets.

EBITDA

Earnings before interest, income tax expense, depreciation and amortisation.

mmWave

Millimetre wave - the band of high frequency spectrum a ranging from 30 to 300 gigahertz.

FCF

NB-IOT

NPAT

OFCF

Free Cash Flow, defined as “net cash flow” add “dividend paid” add “net change in
borrowings”.

NarrowBand-Internet of Things.

Net profit after tax - the total revenue minus all expenses and tax.

Operating Free Cash Flow, defined as “Operating cash flow” less “tax paid” less “capital
expenditure” less “lease payments”.

Spectrum

Radio frequency spectrum is where radio waves are transmitted and received.

TCFD

VHA

Task Force on Climate-related Financial Disclosures.

Vodafone Hutchison Australia Pty Limited. VHA merged with TPG on 13 July 2020 and was
renamed TPG Telecom Limited.

Page 137 | TPG Telecom Annual Report 2022