TPG Telecom Limited Annual Report 2023

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FY2023 Annual Report · TPG Telecom Limited

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Annual Report
2023

Contents ............................

Chairman and 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 ................................. 125

Independent auditor’s report .................... 126

ASX additional information ....................... 131

Glossary ......................................................... 133

Upcoming key dates
14 March 2024
Ex-dividend date

15 March 2024
Dividend record date

12 April 2024
Dividend payment date

3 May 2024
Annual General Meeting

30 June 2024
End of financial half year

11 October 2024
Interim dividend payment date

23 August 2024
Half year results announcement

31 December 2024
End of financial full year

12 September 2024
Interim ex-dividend date

13 September 2024
Interim dividend record date

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 2023.

About TPG Telecom

TPG Telecom provides
telecommunications services
to consumer, business,
enterprise, government and
wholesale customers in
Australia.

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:

7.5m+

fixed and mobile
telecommunications services

5,700+

mobile sites

~35,000km

of metropolitan,inter-capital
and subsea cable systems

~6,000

employees across Australia,
Guam and the Philippines

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 and present.

Page 1 | TPG Telecom Annual Report 2023

Chairman and CEO report

Dear Shareholders,

It is our pleasure to present TPG
Telecom Limited’s (TPG Telecom
or the Company) Annual Report for
2023.

TPG Telecom and its family of
brands play a vital role in fostering
competition and choice, ensuring
millions of Australians stay
connected, productive and
entertained.

Our performance in the past year
shows we have gained momentum
in simplifying and optimising our
business, while delivering growth.

Our position as a value leader in
both mobile and broadband,
resulted in revenue growth of 4.3%
to $4,632 million and EBITDA
growth of 7.6% to $1,930 million1.
This enabled the Board to declare
a total dividend for the year of 9.0
cents per share.

Operational and customer
highlights

We ended 2023 in a strong
position, accelerating our operating
momentum to achieve our earnings
guidance while growing
subscribers and revenue.

Mobile service revenue increased
9.3% to $2,155 million as we
increased subscriber numbers by
175,000, at the same time as we
delivered plan refreshes for our
premium brand, Vodafone.

Throughout 2023, we continued to
invest in new customer
innovations, launching industry-
leading initiatives, such as In-Flight
Roaming and Vodafone Device
Care. Our other mobile brands,
including TPG, iiNet, felix and
Lebara, also continued to attract

new customers by focusing on
providing simple and affordable
plans.

Our Fixed broadband business
continued to offer a diverse range
of competitive services across
NBN and our own network.
Maintaining our position as the
second-largest retailer of NBN
services, we concluded the year as
the leading provider of NBN’s Fibre
Connect program, with more than
20,000 upgrades ordered by the
end of December.

Our Fixed Wireless broadband
service continued to grow,
achieving 227,000 subscribers by
the end of 2023, establishing TPG
Telecom as the largest provider of
great value and easy-to-use fixed
wireless services in Australia.

The Enterprise and Government
business, secured significant
customer wins through competitive
positioning of our on-net Fast Fibre
and NBN Enterprise Ethernet
solutions. Notable new customers
and re-signings included Westpac,
NAB, Amazon, Wisetech Global
and various government
departments.

Our Enterprise and Government
team met the high demand for
connectivity solutions, while
developing new capabilities in
Internet of Things, and Mobile
Private Networks for supply chain,
logistics, mining and energy
businesses.

Vision Network, our wholesale
residential access business,
continued to evolve as a high-value
alternative to the NBN. Having
transitioned to be functionally
separated, Vision Network

continued to build its business by
signing on new retail service
providers and serving superfast
connectivity to customers.

Strategic update and
Customer Transformation

Our strategic principles – Integrate
and Simplify, Win Smart, and
Maximise Our Potential – continue
to guide the Company as we seek
new and better ways to build long-
term value for our customers and
shareholders.

In 2023, we began a multi-year
program to simplify our brands,
rationalise products and modernise
our IT systems to make them more
robust and resilient.

This company-wide transformation
is crucial for developing new and
innovative ways to deliver our
services, while improving the
experience for new and existing
customers and embedding
efficiencies for our future
operations.

Significant progress was made in
2023, as we retired non-core,
legacy products (including
outdated email services), reduced
obsolete in-market plans by 40%
and started moving operations
from some of our minor brands to
our mainstream brands.

In the year ahead, our focus will be
on rationalising our more than
3,000 legacy consumer plans. This
significant reduction in plans will
improve and streamline our
customer experience and enable
our operations to react more
dynamically to changing customer
needs.

1 Statutory EBITDA excluding transformation costs and impairment charge. EBITDA growth excluding the impacts of one-off accounting
gain from the tower assets sale and transformation costs in 2022 and impacts of transformation costs and impairment charge in 2023.

Page 2 | TPG Telecom Annual Report 2023

Significant transformation work
continues in our technology
operations as we transfer critical
applications to a secure and
flexible environment, and build a
simplified and dedicated, system
architecture for enterprise and
consumer businesses.

Mobile network

We were disappointed to be
unsuccessful in overturning the
ACCC’s decision not to approve
our regional mobile network
sharing arrangement with Telstra,
nevertheless our ambition to
extend the reach and capability of
our mobile network remains
undiminished.

By the end of 2023, our 5G mobile
network was active on more than
3,000 sites, or more than 50% of
our network.

The evolution of our mobile
network continued with the
acquisition of new 3.7GHz
spectrum licenses to improve and
extend our 5G services and
coverage across Australia.

Once deployed, this spectrum will
deliver a huge capacity boost for
our 5G Mobile and Fixed Wireless
services, providing higher speeds
and better performance for
customers.

At the end of 2023, we also passed
the important milestone of closing
our 3G network, marking the end of
an era as we transition customers
to a 4G and 5G future.

We continue to explore commercial
options to expand our mobile
network into new markets and
consider strategic network
infrastructure sharing offers the
best economic solution for
customers and shareholders.

Unlocking value in fibre

In November, we ceased
discussions with Vocus Group

following its non-binding offer to
acquire our fibre network
infrastructure and some of our
Enterprise, Government and
Wholesale business.

Although we were unable to reach
alignment on the operating model
and commercial terms with Vocus
Group, we continue to explore
options to deliver value through an
ongoing strategic review of our
fibre network infrastructure assets.

Network evolution, security
and resilience

The protection of our customers
and network remain a top priority.
Our cyber security teams blocked
more than 100 million SMS and
phone scams and enhanced our
security capability through new
intelligence-sharing arrangements
with leading organisations
including the Commonwealth Bank.

We also continued to improve the
resilience of our network security
by isolating and retiring legacy
systems no longer fit for purpose.

Sustainability, People and
Culture

We continued to make progress in
our Sustainability ambitions in
2023, while also building TPG
Telecom as a great place to work.
We met a significant milestone in
our Sustainability journey as we
became the first telco in Australia
to have our net-zero emissions
targets validated by the Science
Based Targets initiative in 2023.

Our employee survey showed our
people remain passionate about
their work as we achieved an uplift
in overall engagement results
across the areas of motivation,
pride and advocacy. We were
delighted during 2023 to be
recognised with the Human
Resources Director (HRD) 5-Star

Employer of Choice award for the
second year in a row.

2024 outlook

The year ahead will be pivotal for
TPG Telecom as we continue to
focus on delivering great value and
service for customer at the same
time as we simplify brands,
rationalise products and increase
digitalisation.

Work to date has built the
foundations for a more agile
business, with our brands capable
of targeting new market segments
and driving greater value for
customers and long-term
sustainable growth for
shareholders.

Assuming no material change in
operating conditions, we expect
EBITDA for 2024 to be between
$1,950 million and $2,025 million,
including ongoing transformation
costs but excluding any material
one-off items.2 This compares with
$1,923 million on a comparable
basis in FY23.

The Board and management thank
all our people for their outstanding
work and shared successes
throughout 2023.

We also thank our customers and
shareholders for their ongoing
support of TPG Telecom. We look
forward to keeping you updated on
our progress throughout the year.

Canning Fok

Chairman

Iñaki Berroeta

Chief Executive Officer and
Managing Director

2 EBITDA guidance is subject to no material change in operating conditions and excludes any impact of material one-offs such as

transaction costs, restructuring, mergers and acquisitions, disposals, impairments, and such other items as determined by the Board and
management.

Page 3 | TPG Telecom Annual Report 2023

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 together with our purpose and
sustainability pillars shape our strategy and guide the prioritisation
of strategic initiatives and areas of focus throughout the business,
as illustrated in the diagrams below and on page 5.

Page 4 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

Our ambition and guiding principles shape our strategic initiatives

Strategic initiative

FY23 achievements

FY24 focus

Grow Mobile service revenue

Mobile service revenue grew over 9% to
$2,155 million.

Continued growth supported by ongoing
plan and product simplification.

Drive Consumer Fixed
profitability

Average margin per user up by around
14% supported by strong Fixed Wireless
growth.

Stabilisation of subscriber base,
including launch of Fibre Connect
services on Vodafone.

Grow Enterprise, Government
and Wholesale

Service revenue up around 1% to
$1,008 million, excluding Vision Network.

Grow sales in Small Medium Business
and maximise utilisation of fixed
infrastructure.

Customer experience
simplification

40% reduction in number of in-market
plans to around 110.

50% reduction to the around 3,700
legacy plans in our systems.

Simplify technology landscape

37 applications moved to the cloud and
43 legacy system decommissioned. Total
applications currently at around 580.

Targeting further 40 applications moved
to the cloud

National mobile network

Further 1,008 sites upgraded to 5G;
>50% of 5,700+ mobile sites now
upgraded.

Continuation of 5G upgrade; ongoing
exploration of optimal infrastructure
sharing strategy for regional areas.

Unlocking value of fibre

Discussions ceased following
exploration of potential transaction with
Vocus Group.

Strategic review continues to assess
value-optimising alternatives.

Page 5 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

Key financial metrics

The following section provides an overview and
management discussion and analysis of key
financial metrics from the Group’s operations. Users
of this report seeking to obtain a better
understanding of the performance of the Group
should review this section in conjunction with the
consolidated financial statements and refer to the
FY23 Investor Presentation available on the ASX
and on the Company’s website at
tpgtelecom.com.au/investor-relations.

Service revenue

Service revenue was $4,632 million, an increase of
$193 million or 4.3% compared to FY22
($4,439 million). This increase reflects growth
across all segments, primarily supported by the
Postpaid mobile plans refresh completed in April
2023, an increase in outbound roaming revenue,
and an increase in the mobile subscriber base
compared to FY22.

Service revenue bridge ($m)

EBITDA

Earnings before interest, tax, depreciation and
amortisation (EBITDA) was $1,875 million, a
decrease of $260 million or 12.2% compared to
FY22 ($2,135 million). EBITDA included
transformation costs of $38 million compared to
$60 million in FY22. This was due to the scoping
and planning of the simplification program and the
costs associated with the closure of email domain
hosting services for iiNet and TPG brands. The
Group took an impairment charge of $17 million
related to Internode’s brand name following the
Group’s decision to retire the brand. Initial steps are
progressing to transition existing customers to iiNet.

FY22 EBITDA benefited from a one-off accounting
gain of $402 million from the sale of tower assets in
2022.

Excluding the one-off costs and gains mentioned
above, EBITDA in FY23 was $1,930 million, up
7.6% compared to FY22, reflecting strong mobile

service revenue growth and cost discipline in
telecommunication services.

Cost of telecommunication services was
$1,580 million, a decrease of $56 million or 3.4%
compared to FY22 ($1,636 million). This decrease
reflected a decrease in NBN subscriber base, partly
driven by more customers moving from NBN
services to Fixed Wireless and a reduction in
intercarrier Multimedia Messaging Service access
fees offset by higher NBN wholesale per unit costs
compared to FY22.

Handsets and hardware margins were $17 million,
an increase of $15 million compared to FY22
($2 million). This increase reflected the margin
benefits of the suspension in FY22 of the sale of
mobile handset payment plan receivables to third
parties, offset by discounting activities on handset
sales to attract and retain customers.

Operating expense (opex) was $1,213 million, an
increase of $105 million or 9.5% compared to FY22
($1,108 million). This included $38 million of
transformation costs ($60 million in FY22) and
$31 million in transaction costs related to strategic
projects, including the costs incurred on the
proposed regional mobile network sharing
agreement with Telstra and the strategic review of
Vision Network.

Excluding these costs and prior year transformation
costs of $60 million, the underlying change in Opex
was an increase of $96 million, reflecting inflationary
pressures and increases in support and marking
expenditure.

EBITDA bridge ($m)

NPAT

Net profit after tax (NPAT) was $49 million, a
decrease of $464 million compared to FY22
($513 million), excluding the one-off towers gain
($402 million), NPAT was down $43 million.

Page 6 | TPG Telecom Annual Report 2023

4,439175(1)4154,632FY22Consumer MobileConsumer FixedEnterprise, Gov. & WholesaleOtherFY232,135(402)146125(7)(105)(17)1,875FY22Accounting gainConsumermarginEGW marginOther marginOpexBrand impairment chargeFY23Directors’ report | Operating and financial review continued

OFCF, excluding the reduction in handset
receivables financing, was $543 million, an increase
of $186 million compared to FY22 ($357 million).

Dividend

The TPG Telecom Board has declared a final
dividend of 9.0 cents per share to be paid on
12 April 2024, bringing total dividends for the year to
18.0 cents per share.

TPG Telecom’s dividend policy is to pay a dividend
of at least 50% of Adjusted NPAT.

Dividends paid in FY23 were $335 million, an
increase of $10 million compared to FY22 ($325
million).5

Net debt

Net borrowings (borrowings less cash) were $3,960
million, an increase of $384 million compared to 31
December 2022 ($3,576 million). Gross borrowings
were $4,076 million, an increase of $386 million
compared to 31 December 2022 ($3,690 million).
The increase in borrowings largely reflected the
decision to suspend the sale of handset receivables
to third parties.

During the year, the Group refinanced $2.02 billion
of debt facilities maturing in FY24 with a $2.0 billion
syndicated debt facility and $500 million Asian
Institutional Loan (Asian Term Loan).

Debt maturity profile as at 31 December 2023
($m)

Excluding the impact of the one-off towers gain in
FY22, the reduction in FY23 NPAT reflected an
increase in depreciation and amortisation expenses,
an increase in lease interest costs arising from the
tower assets sale and a new tower lease
agreement, and higher average interest rates on
debt partly offset by an increase in service revenue.
Adjusted NPAT1 was $584 million, a decrease of
$62 million or 9.6% compared to FY22
($646 million).

Earnings per share

Earnings per share (EPS) was 2.6 cents, a
decrease of 25.0 cents compared to FY22
(27.6 cents). EPS in FY22 included the one-off
accounting tower sale gain.
EPS (LTIP basis)2 was 11.9 cents, a decrease of 2.3
cents or 16.2% compared to FY22 (14.2 cents).
Return on Invested Capital3

Return on Invested Capital was 6.1% compared to
5.7% in FY22. The increase reflected the growth in
service revenue offset by a larger capital base.
Operating Free Cash Flow4

Operating Free Cash Flow (OFCF) was
$167 million, an increase of $75 million or 81.5%
compared to FY22 ($92 million). This increase
reflected higher EBITDA and a less negative
working capital movement, partly offset by higher
lease payments and higher capital expenditure of
$1,126 million compared to FY22 ($961 million). The
higher cash capex was primarily due to changes in
timing of supplier payments and upgrade of network
equipment to 5G.

The negative working capital movement in FY23
included a $376 million outflow from the Group’s
decision to fund mobile handset payment plans
using bank borrowings rather than selling
receivables to third parties, which would have
incurred higher overall costs.

Higher lease payments primarily arose from the full-
year impact of the tower assets sale and a new
tower lease agreement extending access to existing
tower sites.

1 For the purpose of dividend calculation, Adjusted NPAT is defined as statutory Net Profit After Tax adding back transformation and

transaction costs, customer base intangible amortisation, spectrum amortisation and non-cash tax expense.

2 Long Term Incentive Plans (LTIP) basis Earnings Per Share measures statutory NPAT adjusted by adding back customer base

amortisation and material one-offs (subject to discretion of the Board), and divided by weighted number of shares on issue. FY23 NPAT
adjusted on this basis was $221 million.

3 Return on Invested Capital measures net operating profit after tax (NOPAT) measures to remove customer base amortisation and material
one-offs (subject to discretion of the Board), divided by average invested capital excluding goodwill, brand and customer base intangibles.

4 Operating Free Cash Flow measures cash flow from operations less capex, finance lease repayments and finance lease interest (within

cash flow from financing activities). It does not include payments for spectrum and dividends and excludes any loan payments/
drawdowns.

5 Further information regarding FY23 dividends is set out in Note 21 and Note 30 of this report.

Page 7 | TPG Telecom Annual Report 2023

1,500750500840500120750Term facilities - drawnRevolving facility - drawnAsian Term LoanRevolving facility - undrawnFY23FY24FY25FY26FY27FY28FY29FY30Directors’ report | Operating and financial review continued

Business segment and product highlights

Consumer segment

Consumer mobile service revenue was $1,971
million, an increase of $175 million or 9.7%
compared to FY22 ($1,796 million). This growth
reflected an increase in subscribers during the year
compared to FY22, an increase in outbound
roaming revenue and almost nine months’ benefit
from the Group’s premium Postpaid Mobile plans
refresh.

Fixed service revenue was $1,737 million, a
decrease of $1 million or 0.1% compared to FY22
($1,738 million). This decrease reflected lower
revenue from NBN, offset by higher revenue from
Fixed Wireless services due to an increase in the
subscriber base compared to FY22.

Consumer cost of telecommunication services was
$1,492 million, an increase of $43 million or 3.0%
compared to FY22 ($1,449 million). This increase
reflected the intersegment charge related to Vision
Network’s wholesale costs and higher NBN costs,
offset by a decrease in the NBN subscriber base
and a lower intercarrier Multimedia Messaging
Service access fees. Excluding the intersegment
charge, the cost of telecommunication services was
$1,384 million, a decrease of $65 million or 4.5%
compared to FY22.

Consumer gross margin bridge ($m)

Enterprise, Government and Wholesale segment

Enterprise, Government and Wholesale revenue
was $1,116 million, an increase of $118 million or
11.8% compared to FY22 ($998 million). This
increase included the recognition of $108 million in
intersegment wholesale revenue related to Vision
Network after it functionally separated from the retail
operations in October 2022.

Excluding Vision Network, Enterprise, Government
and Wholesale revenue was $1,008 million, an
increase of $10 million or 1.0% compared to FY22
($998 million).

Enterprise and Government service revenue growth
continues to be driven by TPG Telecom’s Fast Fibre
and NBN Enterprise Ethernet services, offset by
lower revenue from non-core products.

Wholesale revenue growth was primarily driven by
the recognition of the Vision Network wholesale
revenue. Excluding Vision Network and non-core
products, wholesale revenue was up $4 million to
$218 million.

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

Page 8 | TPG Telecom Annual Report 2023

2,090175(1)11654(108)2,236FY22Mobile revenueFixed revenueHeadset and hardware marginsTelco costsOtherVision Network wholesale costsFY2372494044(9)7(38)108849FY22E&G Mobile revenueE&G Fixed revenueWholesale Fixed revenueHandset and hardware marginTelco costsOtherNon-core product revenueVision NetworkrevenueFY23Directors’ report | Operating and financial review continued

Mobile subscriber numbers and ARPU

Total fixed subscribers and AMPU

Fixed subscribers decreased by 91,000, bringing
total Fixed subscribers to 2.13 million compared to
FY22, as the Group focused on optimising the Fixed
subscriber base to improve segment profitability.

NBN subscribers declined to 1.77 million, down
109,000 reflecting a highly competitive market as
well as customers moving from NBN to Fixed
Wireless services.

Fixed Wireless subscribers grew to 227,000, up
56,000 compared to FY22. TPG subscribers on
Vision Network declined to 114,000, down 21,000.

Average Margin Per User (AMPU) across all Fixed
technologies was $25.9 per month, an increase of
$3.1 or 13.6% compared to FY22, primarily
reflecting the growth of Fixed Wireless subscribers,
modest repricing of some NBN plans in late third
quarter of 2022 and lower average NBN subscriber
base.

Fixed ARPU and AMPU by technology type

Overall Fixed subscriber (000’s)3

1,877 1,768

Mobile subscribers increased by 175,000, bringing
total Mobile subscribers to 5.46 million. Subscriber
growth moderated compared to 2022, as inbound
travellers normalised and subscriber growth was
subdued following the repricing of the Group’s
premium Postpaid Mobile plans.

Postpaid Mobile subscribers grew to 2.97 million, up
17,000 compared to FY22. Prepaid Mobile
subscribers grew to 2.18 million, up 167,000. Data
sim only subscribers declined to 299,000, down
2,000.

Average Revenue Per User (ARPU) for Mobile was
$33.5 per month, an increase of $1.5 per month or
4.7% compared to FY22 ($32.0 per month).
This reflected almost nine months benefit from the
Vodafone Postpaid Mobile plans refresh during the
period and the recovery of outbound roaming ARPU
to December 2019 level. This was partially offset by
a favourable rate change for intercarrier Multimedia
Messaging Service access fee with other mobile
carriers, which was offset in gross margin through
lower cost of telecommunication services.

Postpaid ARPU was $45.8 per month, an increase
of $3.6 or 8.5% compared to FY22. Prepaid ARPU
was $18.9 per month, a decrease of $0.3 or 1.0%
compared to FY22.
Mobile ARPU by subscriber type ($m)1

Mobile subscribers by brand (000's)2

3,228

3,247

1 In December 2022 Mobile base, Prepaid ARPU was 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 customers.
3 Due to the expected closure of the ADSL service in early 2024, approximately 8,000 ADSL subscribers were removed from FY23 base.

Page 9 | TPG Telecom Annual Report 2023

32.033.542.245.819.218.915.314.7Overall MobilePostpaidPrepaidData SimsFY22FY23893916748842398444147Vodafone - PostpaidVodafone - PrepaidKogan, Lebara, felixTPG, iiNetMVNODEC-22DEC-2366.168.057.862.840.547.122.825.9NBN ARPUVision Network ARPUFixed Wireless ARPUOverall fixed AMPUFY22FY231712271351143518NBNFixed wirelessVision NetworkADSL and otherDEC-22DEC-23Directors’ report | Operating and financial review continued

Consolidated Income Statement overview

Depreciation and amortisation

Below is a condensed version of the Group’s
income statement, together with commentary
highlighting key points not already covered in the
key financial metrics section.

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

Brand impairment charge

EBITDA

Depreciation and amortisation

Operating profit

Net financing costs

Profit before tax

Income tax expense

Profit after tax

Attributable to:

Owners of the Company

Non-controlling interest

Earnings per share (cents)

2023

2022

4,632

4,439

901

976

5,533

5,415

438

(1,580)

(1,636)

(884)

(405)

(428)

(380)

(17)

(974)

(363)

(377)

(368)

—

1,875

2,135

(1,472)

(1,389)

403

(341)

(13)

—

2.6

746

(187)

559

(46)

513

—

27.6

Depreciation and amortisation expense was $1,472
million, an increase of $83 million or 6.0% compared
to FY22 ($1,389 million). This increase primarily
reflected a larger asset base and higher right-of-use
amortisation following the tower assets sale, a new
tower lease agreement and other one-off charges.

Net financing costs

Net financing costs were $341 million, an increase
of $154 million or 82.4% compared to FY22 ($187
million). This reflected market interest rate increases
during 2022 and 2023, as well as an increase in
lease interest expense largely due to the tower
assets sale and a new tower lease agreement.

Income tax expense

Income tax expense of $13 million was recorded in
the period, compared to an expense of $46 million in
FY22. FY22 income tax expense included a tax
credit of $140 million arising from the tower assets
sale, 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 the prior year's adjustments and the
current year’s permanent differences in tax, the
Group’s nominal income tax expense represents
profit before tax for the period multiplied by the
applicable corporate tax rate of 30% (see note 6(b)
on page 80).

Page 10 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

Consolidated Balance Sheet overview

Below is a condensed version of the Group’s
balance sheet as at 31 December 2023, together
with commentary highlighting key points not already
covered in the key financial metrics section.

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets

Total current assets

Property, plant and equipment
Right-of-use assets

Spectrum licences

Other intangible assets

Deferred tax assets

Trade and other receivables
Other non-current assets

Total non-current assets

Trade and other payables
Contract liabilities

Lease liabilities

Other current liabilities

Total current liabilities

Borrowings
Lease liabilities

Other non-current liabilities

Total non-current liabilities

Net assets

Contributed equity
Reserves and
accumulated losses
Total equity

2023

116

968

117

2022

114

681

155

1,284

1,033

3,795

1,709

1,737

3,580

1,527

2,010

10,484

10,653

171

469

183

358

18,384

18,333

1,174

1,185

294

122

132

283

171

1,722

1,732

4,076

2,112

141

3,690

1,872

172

6,329

5,734

11,617

11,900

18,399

(6,782)

(6,499)

11,617

11,900

Cash and cash equivalents

Cash and cash equivalents were $116 million at 31
December 2023, an increase of $2 million compared
to 31 December 2022 ($114 million).

Trade and other receivables

Current and non-current trade and other receivables
were $1,437 million at 31 December 2023, an
increase of $398 million compared to 31 December
2022 ($1,039 million). This increase was driven by
an increase in handset receivables on the Group’s
balance sheet following the suspension of
receivables sales to third parties.

Property, plant and equipment

Property, plant and equipment (PP&E) was $3,795
million at 31 December 2023, an increase of
$215 million compared to 31 December 2022
($3,580 million). This reflected additional
commissioned network infrastructure.

Right-of-use assets and lease liabilities

Right-of-use assets were $1,709 million at 31
December 2023, an increase of $182 million
compared to 31 December 2022 ($1,527 million).
Current and non-current lease liabilities were $2,234
million, an increase of $269 million compared to 31
December 2022 ($1,965 million). These increases
were primarily a result of a new tower lease
agreement.

Spectrum licences

The net book value of spectrum licences was
$1,737 million at 31 December 2023, a decrease of
$273 million compared to 31 December 2022
($2,010 million). This decrease reflects the Group’s
spectrum amortisation charge for the year.

Other intangible assets

Other intangible assets (excluding spectrum
licenses) were $10,484 million at 31 December
2023, a decrease of $169 million compared to 31
December 2022 ($10,653 million).

Page 11 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

Consolidated Cash Flow Statement overview

Below is a condensed version of the cash flow
statement, together with commentary highlighting
key points not already covered in the key financial
metrics section.

Cash flow from operating

Capital expenditure

Mobile spectrum payments

Net cash acquired through the
merger
Disposal of subsidiary (net of
cash disposed)
Receipts for tower sale

Loan repayment from Tech 2
Interest received

Net cash flow before
financing activities
Net drawdown/(repayment) of
borrowings
Principal elements of lease

Finance costs paid

Payments for Shares acquired
by TPG Telecom Employee
incentive Plan Trust
Dividends paid

Net cash flow

2023

2022

1,522

1,251

(1,126)

(28)

(961)

(31)

—

—
—

—

892
1

372

1,154

400

(108)

(319)

(600)

(123)

(180)

(8)

(335)

(14)

(325)

(88)

Capital expenditure

Capital expenditure for FY23 was $1,126 million, an
increase of $165 million compared to FY22
($961 million). As noted on page 7, the higher cash
capital expenditure primarily arose due to changes
in timing of supplier payments and network
equipment upgrade to 5G.

Lease payments

Lease payments (principal element) for FY23 were
$108 million, a decrease of $15 million compared to
FY22 ($123 million).

Financing costs paid

Debt financing costs for FY23 were $319 million, an
increase of $139 million compared to FY22 ($180
million). This increase comprised $93 million from
higher market interest rates on bank debt and
$46 million in higher lease financing costs, primarily
arising as a result of the full-year impact of the tower
assets sale and a new tower lease agreement.

Net drawdown of borrowings

The net change in borrowings for FY23 reflected a
net drawdown of $400 million compared with a net
repayment of $600 million in FY22. The incremental
debt drawn arose largely as a result of the
suspending the sale of handset receivables.

Page 12 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

Material risks

TPG Telecom has a robust risk management
framework to manage and respond to risks. The
governance structure and risk management
framework is outlined in detail in our Corporate
Governance Statement, which is available on our
website www.tpgtelecom.com.au.

The Group’s exposure to strategic, financial,
operational and compliance risks are regularly
reviewed and assessed. There are risks inherent to
the Group’s business model as well as industry risk
factors such as competition, technological change
and regulation that can impact business strategy.

Other risks arising from internal and external
factors can impact operations as well as the cost of
conducting business. TPG Telecom deploys a
range of risk treatments to mitigate, reduce and
transfer the risk.

The table below outlines the most material risks
which have the potential to negatively impact
business strategy including growth and profitability.
The Group continues to invest in the appropriate
management of such risks through appropriate
oversight structures, capital deployed, and
progressing various mitigating strategies.

MATERIAL RISK

KEY MITIGATIONS

CURRENT FOCUS

Network and technology
resilience
Unplanned network or
technology platform outages
and/or disruptions may
result in significant
customer dissatisfaction,
financial loss, brand and
reputation risk, and
regulatory scrutiny.

• Network redundancy and diversification.
• Business continuity and disaster recovery

planning and testing programs.

• Issue monitoring and warning systems.
• Network performance and traffic

monitoring.

• Regular maintenance and upgrade plans.
• Policies, procedures, and systems to

govern change management, problem
management, and incident management.

Sustainability pillar:
Digital Economy;
Environmental
Responsibility

• Undertaking Technology transformation
programs to simplify architecture and
modernise technology platforms.

• Progressing continuous improvement
programs to strengthen operational
resilience capabilities.

• Continuing the rollout of 5G mobile

network and exploring alternative sharing
options to expand network coverage.
• Reviewing our data centre footprint to
optimise redundancy and improve
operational efficiencies.

• Proceeding with the closure of the 3G

mobile network.

Market competition
Market factors including
rapid technological
innovation, evolving digital
experience expectations,
and new competitor
entrants could adversely
impact our market share,
growth and returns.

Sustainability pillar:
Customer Wellbeing

• Postpaid Plan refresh in 2023.
• Continued growth of Fixed Wireless.
• Launch of Fibre Connect in TPG and

iiNet.

• Focus on marketing and service

differentiation to attract and retain
customers.

• Launched the Consumer Transformation
Program to simplify and digitalise the
customer experience.

• Improving digital experience for

customers, through innovation in digital
interfaces and customer care.

• Simplification of brand portfolio and

• Consolidation of legacy products in

rationalisation of products.

Enterprise & Government.

• Removal of cross-selling constraints

• Uptake of on-net Fast Fibre, NBN
Enterprise Ethernet and SD-WAN.

across the brand portfolio.

• Expanding network services through roll

out of 5G upgrade program and
exploration of infrastructure sharing

Page 13 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

MATERIAL RISK

KEY MITIGATIONS

CURRENT FOCUS

Macroeconomic Factors
Adverse macroeconomic
conditions, including rising
interest rates, inflation, and
cost-of-living pressures
could negatively impact
consumer spending and
growth, and increase
operating costs.

Sustainability pillar:
Responsible Business
Practices

• Policies, procedures, and controls to
monitor and manage financial risk
exposures.

• Strategic portfolio management to
maintain a strong balance sheet.
• Maintaining a disciplined capital

allocation framework.

• Business strategy and performance

review processes incorporate ongoing
monitoring of changes in economic and
market conditions.

• Execution and monitoring of hedging and

portfolio management strategies.

• Managing inflationary pressures on Opex

through cost management and
contracting.

• Completed bank debt refinancing to

diversify and extend maturity of
borrowings.

• Increase in interest rate risk management

activity.

Cyber security
and Data Privacy
Cyber-attacks may result in
the loss of critical
information technology or
network systems or result in
significant data breaches
which may cause
reputational damage,
regulatory scrutiny, and
financial loss.

Sustainability pillar:
Customer wellbeing

• ISO 27001 Information Security
Management Systems (ISMS)
certification.

• Governance framework including

• Continuing investment in systems,
processes, and people to deliver
continuous uplift in cyber security
capabilities.

policies, processes, and controls to
identify and manage information and
cyber security risks.

• Execution of strategic technology security

roadmaps to deliver continuous
improvements in processes and controls.

• Cyber threat detection programs with

• Ongoing review and improvement of

response plans.

• Technical risk assessments and

governance processes to manage risks
from change programs and third parties.

ISMS to address emerging threats and
vulnerabilities.

• Continuous improvement of privacy
management framework including
policies, processes, and training.

Legal and regulatory
Complex and evolving legal
and regulatory environment
may impact business
strategy, increase
compliance risks and cost of
operations.

Sustainability pillar:
Responsible Business
Practices; Customer
wellbeing

• Dedicated legal, regulatory and

compliance experts to advise on major
business transactions, business
operations, and compliance risk
management.

• Risk Management and Compliance

Framework including systems, policies,
processes, and training programs to
support compliance risks and obligation
management.

• Proactive monitoring of regulatory

changes and reforms, as well as industry
developments.

• Implementation of a compliance roadmap
focused on the continuous improvement
of compliance risk management and
control maturity.

• Continued investment in systems,

frameworks, and capabilities to automate
compliance processes.

• Ongoing engagement with industry,

regulatory and government bodies, and
key stakeholders.

Page 14 | TPG Telecom Annual Report 2023

Directors’ report | Operating and financial review continued

MATERIAL RISK

KEY MITIGATIONS

CURRENT FOCUS

Capability and Culture
Ability to attract and retain a
diverse and engaged
workforce with the right
skills and capabilities is
fundamental to delivering
our business strategy.

Sustainability pillar:
Inclusion & Belonging

• 'Spirit of TPG’ cultural programs to
embed our purpose and values.
• Leadership and Technical learning
programs to support upskilling and
development of workforce capabilities.

• Wellbeing, inclusion and belonging

programs to promote employee health
and wellbeing, inclusion, diversity, and
equity.

• Implementation of talent strategy and
pipeline to support the continuous
identification, development, and retention
of talent.

• Ongoing succession planning and

management for critical roles across the
organisation.

• Investing in leadership framework and
capabilities development, including
women in leadership programs.
• Continue to assess the competitive

landscape of the Australian
telecommunications market and
implement strategies as required to
ensure continuity of leadership and
retention of high performing talent.

Health, safety,
and wellbeing
Effective management and
reduction of physical and
psychosocial risk exposures
in our operations is critical
to maintaining a healthy and
safe work environment for
our people.

• Occupational Health and Safety (OH&S)
management system and processes to
manage OH&S risks, monitor
performance, and support continuous
improvement.

• Workplace health and safety incident

• Investing in occupational health and
safety management systems to be
certified against ISO 45001 standard.

• Delivering ongoing safety training

modules to raise awareness and embed
a positive work health and safety culture.

reporting and management.

• Delivery of the Wellbeing Strategy to

• Safety training program for employees

and contractors.

support employee wellbeing across six
pillars.

Sustainability pillar:
Responsible Business
Practices

Environmental Social
Governance (ESG)
Factors
Purpose and values drive
the way we conduct our
business and the impact we
have on our employees,
customers and
communities. Inability to
operate responsibly could
result in loss of trust,
additional costs and impact
our growth.

Sustainability pillar:
Environmental
Responsibility;
Responsible Business
Practices

• Implementation and continual evolution

of sustainability strategy and climate risk
roadmap.

• Robust Code of Conduct and compliance

training for all people.

• Internal control and governance

processes to manage risks.

• Customer wellbeing programs in line with

regulatory obligations and industry
requirements.

• Well-being, inclusion and belonging

programs to promote employee health
and wellbeing, inclusion, diversity, and
equity.

• Execution of programs and strategies to
achieve renewable energy and emission
targets, supported by formal governance
structures.

• Undertaking quantitative climate scenario

analysis to assess, understand and
manage the impacts of climate change
across our value chain.

• Continuous program to improve customer
wellbeing including to manage hardships,
prevent scams and increase digital
safety.

• Continuous improvement of governance

and risk management programs to
manage ESG risks.

• Refer to the standalone Sustainability

Report for further information.

Page 15 | TPG Telecom Annual Report 2023

includes ‘Sustainability, environment and social
awareness’, represented by experience in managing
or overseeing sustainability, environmental and
social risks and issues and impacts, including
climate change. This is detailed within the TPG
Telecom Corporate Governance Statement.

Sustainability-related updates, including climate risk,
are provided to the ARC via quarterly enterprise risk
updates and six-monthly Sustainability Strategy
updates. The sustainability updates track the
management of material risks and progress against
significant targets and commitments.

Significant sustainability-related targets and
commitments are presented to the Board for
approval. These have included the climate risk
roadmap, emissions reduction targets, renewable
energy targets, and gender representation targets.

Management

TPG Telecom’s Executive Leadership Team (ELT)
meets regularly to monitor business performance,
as well as to develop and execute strategy. This
includes aspects of the Sustainability Strategy,
including climate-related risks and opportunities.

The Head of Sustainability and the Group Executive
Legal & External Affairs are responsible for the
execution of the Sustainability Strategy and report
regularly to the ELT on sustainability matters,
including climate risk.

The primary forum focused on the TPG Telecom
Sustainability Strategy is the Sustainability Council,
which meets on a quarterly basis. The Council,
chaired by the Group Executive Legal & External
Affairs, consists of senior leaders across the
business. The Council is accountable for monitoring
the execution of the TPG Telecom Sustainability
Strategy.

Additional working groups exist to focus on
managing specific initiatives that support the
broader Sustainability Strategy priorities. These are
managed by the Head of Sustainability, with senior
representation from the relevant teams involved.

Directors’ report | Sustainability

This section provides an overview of TPG Telecom’s
sustainability framework, aligned to the International
Sustainability Standards Board (ISSB) climate-
related disclosure standards. It covers: governance,
strategy, risk management, and metrics and targets.

This section should be read in conjunction with the
2023 Sustainability Report, the standalone Climate
Change Report and the Sustainability section on the
Company’s website at tpgtelecom.com.au/
sustainability.

Governance

Board

The Company’s 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, including climate risk, and the
Sustainability Strategy. This is detailed within the
TPG Telecom Board Charter.

The TPG Telecom Audit & Risk Committee (ARC)
oversees disclosure and management by TPG
Telecom relating to its ESG risks, including climate
risk. This is detailed within the TPG Telecom ARC
Charter.

The Board Skills Matrix, approved by the Board and
Remuneration & Governance Committee, sets out
the skills and competencies of the Board and
Committees to ensure alignment with TPG
Telecom’s strategic direction and operations. It

Page 16 | TPG Telecom Annual Report 2023

Directors’ report | Sustainability continued

Strategy

Environmental
responsibility

Customer
wellbeing

Inclusion
and belonging

Digital
economy

Responsible
Business
Practices

• Climate risks and disclosures
• Carbon footprint reduction
• Product stewardship
• Environmental products
• and services

• Customer experience
• Information security and privacy
• Online safety
• Inclusive customer practices

• Gender equality
• Reconciliation
• LGBTQI+ inclusivity
• Intercultural understanding
• Flexible working

• Next generation connectivity
• Digital skills
• Technology for good

• Environmental management
• Human rights
• Workplace health,

safety and wellbeing

• Non-financial disclosures
• Supplier governance
• Risk and governance

TPG Telecom recognises that climate risk may
impact all areas of the organisation, which is why
understanding and managing climate risk forms a
key component of the environmental responsibility
area of TPG Telecom’s Sustainability Strategy. To
drive sufficient action and progress in managing this
important issue effectively, the Group has assessed
the climate-related risks and opportunities in line
with the TCFD recommendations and set a science-
based target for reducing our greenhouse gas
(GHG) emissions, aligned to net zero. TPG Telecom
remains committed to powering its Australian
operations with 100 per cent renewable electricity
from 2025 onward, and has made important
progress in 2023, developing a formal request for
tender for renewable energy providers, with
responses expected in the first half of 2024.

The Group has undertaken climate scenario
analysis to understand how differing climate trends
might affect the impact and likelihood of its key
climate risks and opportunities in the short
(0-5 years), medium (5-15 years) and long term
(15+ years). Key risks were assessed using the
following three scenarios:

• No Climate Action – a high emission scenario,

global temperature rise exceeds 4°C

• Current Targets & Pledges – a moderate

emission scenario, global temperature rise held
below 2°C

• Aggressive Mitigation – a low emission scenario,

global temperature rise held below 1.5°C

The outputs of this analysis can be found in the
Group’s standalone Climate Change Report and will
assist in setting future business strategy and
financial planning, particularly in prioritising
mitigations to continue building resilience to climate
change.

Risk management

The Group’s approach to climate risk management
is integrated within the TPG Telecom Risk
Management Framework, which includes a policy
and procedures to outline our risk appetite, risk
identification, risk rating and management criteria.
Refer to the ‘Material risk’ section (page 13) of this
report for more information on the Group’s risk
management approach.

Through the detailed assessment of the Group’s
climate-related risks and opportunities, TPG
Telecom has identified and prioritised three key risks
that have the potential to have a material financial or
reputational impact. These risks and opportunities
were prioritised for further analysis through a
qualitative climate scenario analysis, the outcomes
of which are detailed below. These include the
potential impacts to the business, its strategic
response, and approximate timeframes on when
impacts may emerge.

TPG Telecom has also developed a multi-year
roadmap to improve climate risk management
maturity and enabling reporting against future
mandatory disclosure requirements.

Page 17 | TPG Telecom Annual Report 2023

Directors’ report | Sustainability continued

RISK

KEY MITIGATIONS

CURRENT FOCUS

Physical | Acute
Increased severity of
extreme weather events
such as heat waves, floods
and cyclones.
This may cause unplanned
network service disruptions,
damage of critical
infrastructure, and
disruptions to supply chain.

Emergence Time Frame
Short (next five years)

Transition | Technology
Transition to a low-carbon
economy requiring
renewable energy
commitments.
Increased energy demand
from operations, driven by
the transition to 5G services
and the rising cost of LGCs
and PPAs.1

Emergence Time Frame
Short (next five years)

Transition | Reputation
Evolving stakeholders’
expectations in relation to
climate action.
Meeting evolving customer,
and investor expectations
on climate change, offset by
opportunities to
demonstrate progress on
emissions disclosure and
reductions.

Emergence Time Frame
Medium (five to 15 years)

• Network and operational monitoring to

• Continued focus on improving resilience

respond to natural disasters and hazards.

• Incident management, business
continuity, and disaster recovery
framework.

• Emergency and Crisis Management Plan

across network sites and improving
controls related to power supply backup.

• Continuous improvement of resilience
strategies and plans to identify and
manage environmental threats and risks.

to respond to significant incidents.

• Uplift of third-party risk and resilience

management for critical vendors.

• Climate scenario assessment to quantify
materiality of climate risks and develop
prioritised plans to address longer term
risks.

• Where possible, redundancy is built into
the network via geographical diversity,
alternative site switching, battery and
power generators, and portable base
stations.

• Health and safety management system
and processes to support the safety and
wellbeing of our employees and
contractors.

• Close alliance with the NSW Telco

authority to identify high risk regions and
actively manage emergencies.

• Governance structures including Board,

• Development of long term energy

purchasing strategy for network assets.

• Refresh renewal energy procurement
strategy and market engagement.

• Implementation and continual evolution

of our Sustainability Strategy and climate
risk roadmap.

• Continuous improvement of annual

sustainability reporting and alignment
with globally recognised frameworks.

Executive Leadership Team and
Renewable Energy Working Group to
oversee progress of initiatives to meet
renewable energy targets.

• Budgeting and long-range planning

processes to review and plan for energy
costs.

• Energy efficiency programs to design and

implement solutions for data centres,
mobile network equipment and properties
(corporate and retail stores).

• Ongoing engagement and collaboration
with key stakeholders, including peak
bodies membership and industry
collaborations.

• Undertaking research through surveys,

and customer feedback channels.
• Materiality assessments (at minimum

every three years) to inform focus areas.

• Risk management framework

incorporates the management climate-
related risks and opportunities.

• Governance and oversight structures to

review and support progress of
sustainability initiatives and
commitments.

1. LGCs: Large-scale Generation Certificates. PPA: Power Purchase Agreements

Page 18 | TPG Telecom Annual Report 2023

Directors’ report | Sustainability continued

General sustainability-related and climate-
related performance, metrics and targets

The following section provides an overview on the
Group’s sustainability-related and climate-related
key metrics and targets. This section should be read
in conjunction with the Sustainability Report and the
Sustainability section on the Company’s website at
tpgtelecom.com.au/sustainability.

Customer Wellbeing

TPG Telecom is responsible for supporting
customers by protecting personal information and
privacy, avoiding scams and theft, maintaining
connectivity for customers, and ultimately providing
a good customer experience.

In 2023, the Company significantly increased its
technology security budget and more than doubled
the size of the team focused on managing these
risks. Ongoing programs are in place to address
security risks in the business, involving reducing
vulnerabilities, upgrading platforms, and
decommissioning legacy systems that have become
difficult to protect. This multi-year program is a
critical part of ongoing efforts to continually improve
the security of the business and its customers.

Quarterly complaint rates reduced across the
Company’s major brands, compared to the same
quarter in the previous year. While the uptick in
rates for the December quarter was higher than
expected, aspects of the Company’s customer
simplification program may have contributed to the
increase in customer complaint volume.

TIO quarterly complaints per 10,000 services

CATEGORY

Energy consumed

Scope 1 emissions

Scope 2 emissions
(market-based)
Scope 1 and 2 emissions
(market-based)
Scope 3 emissions

Emissions reduction targets

Overall net-zero target:

2022

2023

1,291

1,342

2.8

224.8

226.0

227.6

228.8

1,473.8 1,235.2

2022

2023

• committed to reaching net-zero GHG emissions

5G-enabled sites (cumulative)

2,055 3,063

across our value chain by 2050.

Environmental Responsibility

TPG Telecom is committed to managing its impact
on the environment in its operations and throughout
its value chain.

Managing its environmental impact is important to
its employees, customers and investors, as well as
the communities in which the Group operates.

TPG Telecom’s emissions reduction targets, set at
the end of 2022, were verified by the Science Based
Target initiative in October 2023.

Energy reductions occurred in fixed networks,
corporate offices and retail footprint due to site
consolidation and a reduction in locations. At the
same time, the energy consumed by mobile network
increased as customers used more data, particularly
on the 5G network.

Despite the increase in energy consumed, the
associated Scope 1 and 2 emissions remained
largely flat, due to a reduction in the underlying
emissions factors.

Reductions in Scope 3 emissions footprint were due
in large part to reduced emissions from key
suppliers.

Near-term targets:

• committed to reducing absolute scope 1 and 2

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

• committed to reducing 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:

• committed to maintaining at least 95% absolute
scope 1 and 2 GHG emissions reductions from
2030 through 2050, from a 2021 base year.
• committed to reducing absolute scope 3 GHG

emissions (from purchased goods and services,
fuel- and energy-related activities, upstream
leased assets, and use of sold products) 90% by
2050, from a 2021 base year.

Further information can be found in the 2023
Sustainability Report and standalone Climate
Change Report at tpgtelecom.com.au/investor-
relations.

Page 20 | TPG Telecom Annual Report 2023

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 2023.

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 is an Executive Director and
Group Co-Managing Director of CK Hutchison
Holdings Limited. He has been a Director of Cheung
Kong (Holdings) Limited and Hutchison Whampoa
Limited since 1985 and 1984 respectively, both of
which were formerly listed on the Stock Exchange of
Hong Kong Limited and became wholly owned
subsidiaries of CK Hutchison Holdings Limited in
2015. Mr Fok is also Chairman and a Non-Executive
Director of Hutchison Telecommunications Hong
Kong Holdings Limited and Hutchison Port Holdings
Management Pte. Limited as the Trustee-Manager of
Hutchison Port Holdings Trust, an Executive Director
and Chairman of Power Assets Holdings Limited and
HK Electric Investments Manager Limited as the
Trustee-Manager of HK Electric Investments and HK
Electric Investments Limited, an Executive Director
and Deputy Chairman of CK Infrastructure Holdings
Limited and Deputy President Commissioner of PT
Indosat Tbk. Mr Fok was previously a Director of
Cenovus Energy Inc. and a Director of Hutchison
Telecommunications (Australia) Limited.

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

Directorships of other ASX listed companies in
the past three years:

Hutchison Telecommunications (Australia) Limited –
1999 to December 2023.

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 27-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.

Pierre Klotz
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.

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 &
Risk Committee.

Page 21 | TPG Telecom Annual Report 2023

Directors’ report | Board of Directors continued

Robert Millner AO
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 an Officer of the Order of Australia (AO).

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 ASX 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 22 | TPG Telecom Annual Report 2023

Directors’ report | Board of Directors continued

Dr Helen Nugent AC
Independent 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.

Frank John Sixt has been a Director of TPG Telecom
since 2001. He has been a Director and Chairman
since 1998 and December 2023, and an Alternate
Director to a Director since 2008 of Hutchison
Telecommunications (Australia) Limited. Mr Sixt is an
Executive Director, Group Finance Director and
Deputy Managing Director of CK Hutchison Holdings
Limited. Since 1991, Mr Sixt has been a Director of
Cheung Kong (Holdings) Limited and Hutchison
Whampoa Limited, both of which were formerly listed
on The Stock Exchange of Hong Kong Limited and
became wholly owned subsidiaries of CK Hutchison
Holdings Limited in 2015. He is also Chairman and a
Non-Executive Director of TOM Group Limited, an
Executive Director of CK Infrastructure Holdings
Limited, and a Director of Cenovus Energy Inc. and
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. He was previously a
Commissioner of PT Indosat Tbk.

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.

Dr Nugent’s appointment to the Board commenced
on 13 July 2020.

Directorship of other ASX listed companies in the
past three years:

Hutchison Telecommunications (Australia) Limited –
1998 to current.

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

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

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

Page 23 | TPG Telecom Annual Report 2023

Directors’ report | Board of Directors continued

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.

Arlene Tansey
Independent Non-Executive Director

Arlene Tansey is currently a Non-Executive Director
of Aristocrat Leisure Limited, McMillan Shakespeare
Limited, Lend Lease Real Estate Investments Limited
and LaTrobe Financial Service Pty 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 USA. 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.

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

Page 24 | TPG Telecom Annual Report 2023

Directors’ report | Board of Directors continued

Serpil Timuray

Ms Timuray is the Vodafone Group plc CEO of
Europe Cluster and a member of the Vodafone
Executive Committee. Ms Timuray oversees
Vodafone’s interest in the joint venture companies of
VodafoneZiggo in Netherlands, VodafoneIdea in India
and TPG Telecom. She is the Chairperson of
Vodafone Turkey and Vice-Chairperson of
VodafoneZiggo Netherlands. Prior to her current role,
she was the Group Chief Commercial Operations and
Strategy Officer. Formerly she was the Regional CEO
for AMAP (Africa, Middle East, Asia, Pacific) where
she served as a Board member of the listed
companies of Vodacom Group, Safaricom and
Vodafone Qatar. Ms Timuray joined Vodafone in 2009
as the CEO of Turkey.

Prior to joining Vodafone, Ms Tumuray was the CEO
of Danone Turkey from 2002 to 2008.

She began her career at Procter & Gamble in 1991,
where she held several marketing roles and was
subsequently appointed to the Executive Committee
in Turkey.

Ms Timuray was appointed as an Independent Non-
Executive Director to British American Tobacco Plc in
December 2023. She has been an Independent Non-
Executive Director of Danone Group Plc during April
2015 – April 2023 and Chair of the Corporate Social
Responsibility Committee.

Ms Timuray holds a degree in business
administration from Bogazici University in Istanbul.

Ms Timuray’s appointment to the Board commenced
on 29 March 2023.

Former Directors

Diego Massidda

Non-Executive Director

Diego Massidda was CEO of Vodafone Partner
Markets and Carrier Services, and 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.

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 was appointed to the Board from
12 May 2020 until his resignation on 28 March 2023.

Company Secretary

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.

Page 25 | TPG Telecom Annual Report 2023

Directors’ report | Board of Directors continued

Directors’ shareholdings

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:

DIRECTORS

BOARD MEETINGS

AUDIT &
RISK COMMITTEE
MEETINGS

GOVERNANCE
REMUNERATION &
NOMINATION
COMMITTEE
MEETING1

REMUNERATION
AND GOVERNANCE
COMMITTEE
MEETING2

NOMINATION
COMMITTEE
MEETING3

Canning Fok

Iñaki Berroeta

Pierre Klotz

Diego Massidda4

Robert Millner

Antony Moffatt

Helen Nugent

Frank Sixt

Arlene Tansey

Jack Teoh

Serpil Timuray5

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

1 Governance Remuneration & Nomination Committee was dissolved on 1 November 2023
2 Remuneration and Governance Committee was established on 1 November 2023
3 Nomination Committee was established on 1 November 2023
4 Deigo Massidda resigned from the Board on 28 March 2023
5 Serpil Timuray was appointed to the Board on 29 March 2023

Page 26 | TPG Telecom Annual Report 2023

Directors’ report | Other information continued

Principal activities

Corporate Governance

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.

Review of operations

The OFR set out on page 4 to 15 provides details
relating to the Group’s operations and results for the
financial year.

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)

(ii)

the operations of the Company and of the Group
in future financial years, or

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.

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.

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 2023 Sustainability Report
and the standalone 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.

Page 27 | TPG Telecom Annual Report 2023

ASX additional information continued

Employees and Work Health and Safety (WHS)

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 29 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 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 65.

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
indicated.

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. The
Company will continue to evolve its approach to
WHS in 2024 as it further embeds a consistent
approach to systems, monitoring and compliance.

Indemnification and insurance of officers
and directors

Indemnification

TPG Telecom 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.

Page 28 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report

Remuneration Report

The Board of TPG Telecom is pleased to present its
2023 Remuneration Report.

Changes to Remuneration in 2023

As foreshadowed in the 2022 Remuneration Report,
the structure of Executive KMP remuneration
significantly changed in 2023. This followed a
period of minimal change from the time of listing
in 2020.

The most significant change was in relation to the
Long Term Incentive (LTI) plan.

Since listing, the equally weighted LTI hurdles
were Operating Free Cash Flow (OFCF) and
relative Total Shareholder Return (TSR). Strong
investor feedback in 2022 urged TPG Telecom to
change the OFCF measure in favour of a return on
capital measure, given the capital intensive nature
of the business.

The Board supported the introduction of a Return on
Invested Capital (ROIC) measure, but to ensure
alignment with the interests of shareholders,
considered that an Earnings Per Share (EPS)
measure would be complementary and provide a
stronger incentive to drive earnings growth. This
was combined with the introduction of an ESG
measure to power 100% of Australian operations
with renewable electricity by the end of 2025.
The ROIC and EPS measures were each equally
weighted at 45%, and the ESG measure at 10%.
While this change resulted in dropping the TSR
hurdle, on balance, the Board concluded it created
better alignment between the interests of Executive
Management and shareholders.

The change in hurdles required TPG Telecom to
set three year targets for ROIC and EPS. While
information on these targets was provided in the
Notice of Meeting for the 2023 Annual General
Meeting (AGM), proxy advisors and investors
wanted greater specificity. The Board has
subsequently considered that request and more
detail is provided in this Remuneration Report,
hopefully balancing investors’ requests for more
detail with the risk of providing a three year forecast
and the resulting disclosure obligations that are
created. This Report provides information on
hurdles for both the 2023 and 2024 LTI plan.

Other changes were also made to Executive KMP
remuneration for 2023. After a comprehensive
review, and no increase in fixed remuneration since
2020, fixed remuneration was increased for the
CEO. Improved alignment with shareholders was
encouraged through an increase in the Short Term

Incentive (STI) opportunity. The target STI
opportunity for the CEO was increased from
100% to 110% and from 65% to 75% for Other
Executive KMP. The maximum LTI opportunity
remained at 150% for the CEO and 100% for
Other Executive KMP.

2023 Remuneration Outcomes

The Company’s STI outcome for 2023 was 78.78%
of maximum, based on achievement against the
Company’s balanced scorecard. Financial measures
of Total Service Revenue, EBITDA, and OFCF
constituted 60% of the scorecard, with customer
and employee measures representing 20%. The
other 20% was based on individual performance
measures. The Remuneration Report provides
detail on the performance against each balanced
scorecard metric.

Based on these metrics and the CEO’s individual
performance, the Board recommended an STI
award for the CEO of $2,673,660 out of his
maximum potential of $3,300,000. 50% of this
award is paid in cash, with the other 50% to be
granted as Deferred Share Rights (DSRs) vesting
equally over two years. Shareholder approval for the
CEO’s DSRs will be sought at the 2024 AGM, even
though the shares will be purchased on market.

Shareholders voted to approve the CEO’s 2023 LTI
grant of $3,000,000 at last year’s AGM.

In addition, the three year performance period for
the 2021 LTI plan finished on 31 December 2023.
The equally weighted hurdles for that plan were
OFCF and TSR. As we committed to do, the
Remuneration Report outlines in detail the targets
that were set and performance against each. It also
shows that neither hurdle was achieved and that, as
a consequence, no performance rights have vested.

2024 Look Ahead

For 2024, fixed remuneration was benchmarked
against the median of ASX 21-60 and ASX 31-70
companies. Fixed remuneration increases will be
applied for 4 of the 5 Executive KMP. This includes
the CEO, whose base salary will increase by 3%,
which is less than the rate of inflation. Target STI
and LTI relative to Base Salary will remain
unchanged for Executive KMP, including the CEO.

2024 STI plan measures and 2024 LTI plan hurdles
remain consistent with the 2023 STI and LTI Plans,
with increased disclosure as outlined above for the
LTI hurdles.

Page 29 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

Table of Contents

2023 Remuneration Report

2 Key Management Personnel (KMP)

3 Remuneration Approach

Fixed Remuneration

5 Short Term Incentive

2023 Long Term Incentive Plan

2021 Long Term Incentive Plan

Total Remuneration Outcomes 2023

9 Minimum Shareholding Requirements

10 Looking forward to 2024

11 Remuneration Governance

12 Appendices (Statutory Tables)

After careful consideration of the Australian
telecommunications talent market and the need
to retain highly qualified Telecommunications
Executives, for 2024, a one-off Performance Rights
Retention Plan will be implemented. The equity
based 3-year plan will include a TSR hurdle
weighted at 50% and a continuous employment
hurdle weighted at 50%. The maximum opportunity
will be 100% of Base Salary as at 1 March 2024 for
Executive KMP, including the CEO.

Changes to the minimum shareholding requirement
have been implemented following feedback from
proxy advisors. Executives continue to be required
to hold a minimum share value that is the equivalent
of 100% of base salary. The calculation of this
holding is to include shares only and, therefore,
unvested performance or share rights will no longer
be included in the calculation. The acquisition period
from commencement as an Executive has been
extended from 5 years to 7 years for a number
of Executives, even though it is anticipated that
most will reach the required value before the
extended period.

Following no increase in Board Member fees,
and a small change in Committee fees since 2020,
an extensive review of benchmarking against the
median of ASX 21-60 and ASX 31-70 companies
was undertaken. This review resulted in the
following changes for 2024:

• An increase in the base Board fee for the two

Independent Non-Executive Directors;

• An increase in the Audit and Risk Committee
(ARC) Chairman and ARC Member fee; and

• An additional fee to be paid to the Senior

Independent Director.

These changes considered the benchmark data
and the additional work of the independent Non-
Executive Directors and their Committee work. Total
fees remain under the $2.5m fee pool set in 2020.

2023 Committee Changes

On 1 November 2023, in response to proxy advisor
feedback, the Board approved the separation of the
nomination responsibilities of the Governance and
Remuneration Committee’s (GRNC) of the Board.
Two new committees; the Remuneration and
Governance Committee (RGC) and the Nomination
Committee (NC), were established, superseding
the responsibilities of the GRNC. There was no
increase in Committee fees as a result of this
change, with no fee being paid to members of
the Nomination Committee.

Page 30 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

1. 2023 Remuneration Report

This report covers the period 1 January 2023 to 31 December 2023 and shows how the remuneration approach
supports short and longer-term alignment with the performance of TPG Telecom Limited (‘TPG Telecom’, ‘the
Company’) for the benefit of shareholders.

2. Key Management Personnel (KMP)

KMP have the 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. For 2023 the
CEO, Executive and Non-Executive KMP were as follows:

2.1.1 CEO and Other Executive KMP

EXECUTIVE KMP
Iñaki Berroeta

Ana Belea2

Kieren Cooney

Jonathan Rutherford

John Boniciolli
Grant Dempsey

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

TERM AS KMP1
Full year

Full year

Commenced 13 November 2023
Ceased 12 November 2023

If an Executive KMP did not serve as KMP for the full year, remuneration information disclosed in this report is from the date they
commenced as KMP in FY2023 or to the date they ceased as KMP in FY2023 unless indicated otherwise.
Ana Belea, formerly known as Ana Bordeianu.

2.1.2 Non-Executive KMP

NON-EXECUTIVE KMP
Canning Fok
Pierre Klotz
Robert Millner
Antony Moffatt

Helen Nugent

Frank Sixt
Arlene Tansey
Jack Teoh
Serpil Timuray
Diego Massidda

ROLE
Non-Executive Director and Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director & Senior
Independent Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director

TERM AS KMP1
Full year
Full year
Full year
Full year

Full year

Full year
Full year
Full year
Commenced 29 March 2023
Ceased 28 March 2023

If a Non-Executive KMP did not serve as KMP for the full year, remuneration information disclosed in this report is from the date they
commenced as KMP in FY2023 or to the date they ceased as KMP in FY2023 unless indicated otherwise.

3. Remuneration Approach

TPG Telecom’s Remuneration Framework is designed to support the reward principles and the Company’s
overall purpose and strategic ambition. The Remuneration Approach aligns with the guiding principles, purpose
and values of the Company and is governed by the Board, independent from management, to ensure that the
design and implementation of the framework strikes an appropriate balance between the interests of
Executives and shareholders.

Page 31 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

3.1 Remuneration Framework

Page 32 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

3.2 2023 Remuneration Structure

The remuneration structure has three components, namely Fixed Remuneration, Short Term Incentives and
Long Term Incentives, along with a minimum shareholding requirement. The structure is designed with
consideration for each individual remuneration component, as well as the total remuneration opportunity and
mix for Executives.

3.2.1 Remuneration Structure

COMPONENT
Fixed remuneration

Short Term Incentive (STI)

Long Term Incentive (LTI)

DESCRIPTION
Provides competitive remuneration in recognition of an Executive’s skills, experience
and accountability to deliver value to our customers and shareholders. Fixed
remuneration is benchmarked to the median of the relevant ASX peer group, which is
reviewed annually, taking into account other factors, such as inflation.
Rewards the delivery of key strategic objectives in line with the annual strategy of TPG
Telecom, delivering returns today with a view to the achievement of longer-term goals.
Provides an annual assessment of Group financial, non-financial and individual
performance. Delivered equally in cash and share rights (DSRs) which are deferred
equally over one and two years.

Rewards the delivery of longer-term strategic objectives in line with creating
sustainable shareholder value to provide alignment between Executive reward and
shareholders’ interests. Assessed over a three year period based on key drivers of
returns to shareholders. Granted as share performance rights which are subject to
hurdles.

Further information on the total remuneration approach, as well as each remuneration component, is described
further in the report.

4. Fixed Remuneration

Fixed remuneration is set at levels that are competitive to market to attract, motivate and retain individuals,
comprising base salary and superannuation.

In setting fixed remuneration for 2023, comprehensive analysis was undertaken in 2022, using data from 2022,
across the ASX 21-60 peer group. This peer group was selected after careful consideration of the Company’s
position within the ASX at that time and after reviewing both local and some international telecommunications
peers. Exclusions to the peer set were made for significant outliers or where the ownership structure or the
nature of the operation were not comparable to that of TPG Telecom.

Consideration was given to movements in market position and other local and international telecommunications
peers. In addition to benchmarking, the Remuneration and Governance Committee (RGC) recommendations to
the Board considered role size, complexity, internal relativities and inflation.

The table below sets out the annual remuneration for Executive KMP who held this role at the end of the
financial year, noting that John Boniciolli commenced as Group CFO on 13 November 2023.

4.1.1 Fixed Remuneration

EXECUTIVE KMP

ROLE

BASE SALARY

SUPERANNUATION2

Iñaki Berroeta

Chief Executive Officer

2,000,000 $

Ana Belea
John Boniciolli1

Group Chief Financial Officer

Group Executive Customer Operations and Shared Services $

785,400 $

Kieren Cooney

Group Executive Consumer

Jonathan Rutherford Group Executive Enterprise, Government and Wholesale

870,000 $

945,000 $

785,400 $

27,399

1.
2.

John Boniciolli commenced his role as a KMP on 13 November 2023. The table above represents fixed remuneration for a full year.
Superannuation is based on the statutory maximum superannuation contribution base. Actual superannuation paid is as indicated in
Table 4.1.2.

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The table below sets out the CEO and Other Executive KMP actual fixed remuneration received for 2023. It
includes the remuneration for Grant Dempsey who ceased his role as Group CFO on 12 November 2023.

4.1.2 Actual Fixed Remuneration

EXECUTIVE KMP

ROLE

TERM AS KMP

ACTUAL FIXED
REMUNERATION
(INCLUDING
SUPERANNUATION)1,2

Iñaki Berroeta

Chief Executive Officer

Ana Belea3

Group Executive Customer Operations and Shared
Services

John Boniciolli

Group Chief Financial Officer

Kieren Cooney

Group Executive Consumer

Jonathan Rutherford

Group Executive Enterprise, Government and
Wholesale

Grant Dempsey

Group Chief Financial Officer

Full year

Commenced 13
November 2023

Full Year

Full year

Ceased 12
November 2023

2,001,346

800,221

125,486

963,846

799,846

789,012

1.
2.
3.

For the relevant term as Executive KMP as per the dates detailed in the table above.
Superannuation has been calculated based on the statutory maximum superannuation contribution base.
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.

5. Short Term Incentive

The TPG Telecom Short Term Incentive (STI) plan is designed to reward Executives for their contribution to the
achievement of TPG Telecom’s annual performance targets, creating value for today and into the future. To
ensure alignment between Executive performance and shareholder value, the STI plan is designed:

• with an STI opportunity set competitively to market, comprised of equal components of cash and deferred
equity, with the latter being paid over two years. Deferred equity reinforces alignment with shareholders;

• to be paid only after gateway requirements are met on Company financial performance and risk

management, as well as individual behaviour;

• for the majority of the award to be measured on achievement of TPG Telecom’s Balanced Scorecard

targets, which are based on the key drivers of the Company’s operating performance; and

• with conditions regarding cessation of employment that align with shareholders' interests.

5.1 STI Opportunity

For 2023, the target and maximum STI opportunity for Executive KMP was as follows:

5.1.1 2023 Target and Maximum STI opportunity

KMP

CEO

Other Executive KMP

OPPORTUNITY AT TARGET ACHIEVEMENT

OPPORTUNITY AT MAXIMUM ACHIEVEMENT

110% of Base Salary

75% of Base Salary

165% of Base Salary

112.5% of Base Salary

The STI opportunity was established by comparing incentive remuneration to a peer group made up of relevant
ASX 21-60 companies, using data from 2022. This peer group was used after careful consideration of the
Company’s position by market capitalisation in 2022 when the review was undertaken.

Exclusions to the peer set were made for significant outliers or where the ownership structure or nature of the
operation were not comparable to that of TPG Telecom. Local and international telecommunications peers were
also reviewed. The target and maximum STI opportunity were set with reference to the median target

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remuneration of this peer group. Where STI maximum information was unavailable, the maximum was set with
reference to the 75th percentile of remuneration for this peer group.

To achieve a payment at the STI maximum, performance needs to have met or exceeded a set of performance
measures on the balanced scorecard. Each performance measure is assessed against threshold, target and
maximum performance, with a pro rata being applied for achievement falling between each level.

• Threshold – represents 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.

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.

5.2 STI Instruments and Conditions

STI is awarded in cash and Deferred Share Rights (DSRs), which are rights over TPG Telecom ordinary
shares.

The cash component of 50% of the overall award is paid to Executives following the end of the one year
performance period. This cash payment is in recognition of the Executive’s contribution to the annual
performance of TPG Telecom.

The remaining 50% is awarded as DSRs and is restricted in equal amounts over a 1 and 2 year period. The
amount of DSRs awarded is 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.
As these DSRs are restricted over a 1 and 2 year period, their value to the Executive KMP is aligned to that of
the Company’s shareholders.

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, with this being the case in 2023. Exercise of DSRs is automatic on
vesting and there is no exercise price.

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The STI plan is also aligned with shareholders’ interests in the event that an Executive KMP ceases
employment with TPG Telecom. Upon cessation, the STI is treated in the following way:

• 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:

–

In limited circumstances 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.

In circumstances where there may be a change of control, DSRs will be subject to the existing terms and
conditions of the award and the exercise of Board discretion.

To further align the STI plan with shareholders, it is also subject to a hedging condition, meaning that
Executives cannot enter into any arrangement that limits the economic risk of unvested DSRs. The STI plan is
also subject to a malus condition. In cases where an Executive KMP acts fraudulently or dishonestly or is in
breach of their obligations to TPG Telecom, any eligibility for STI or unvested rights will lapse.

5.3 Awarding STI Outcomes

In determining the STI outcomes, subject to the exercise of the Board’s discretion, TPG Telecom considers a
number of factors including:

• Gateway Assessment;

• Company Performance Assessment against the Balanced Scorecard and Targets; and

• Individual Performance Assessment

Gateway Assessment

An initial gateway assessment occurs to determine if any STI awards should be payable to the Executive KMP.
The purpose of this gateway assessment is to determine, as a group and then as an individual, whether the
overall financial performance of TPG Telecom has been met; that the Executives have appropriately managed
risk; and that their individual behaviour has been considered.

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5.3.1 Gateway Assessment Description

ASSESSMENT LEVEL
Assessed at a Group
level

GATEWAY
Financial

Risk

Assessed at an
Individual level

Behaviours

DESCRIPTION
Sets minimum financial performance aligned with shareholder interests. It is set
at the start of the financial year and assessed by the RGC and the Board at
year end. The assessment considers whether performance falls significantly
below the threshold level for the key financial STI measures in the balanced
scorecard. In 2023 they were Service Revenue, EBITDA and OFCF. The
threshold levels are outlined in Table 5.4.2.

Defines appropriate management of financial, operational and reputational risks
in the generation of returns. It is assessed by the Board, following input from
the RGC, at the end of the financial year after the criteria is set at the beginning
of the year. The assessment considers key risks such as environmental
incidents, network incidents affecting services, anti-competitive conduct or
fraud. Reputational risks, data security, cost management and significant
declines in employee engagement are also considered.

Assesses alignment of demonstrated behaviours with the organisation’s
purpose and culture. This is assessed by the Board at the end of the financial
year, with input from management, subject to managing conflicts of interest.
The assessment includes potential code of conduct and contract breaches.

Balanced Scorecard and Targets

A balanced scorecard is set each year, with consideration given to the key drivers of TPG Telecom’s annual
operating performance that influences shareholder returns. These metrics are common in the
telecommunications industry. The 2023 scorecard measures support TPG Telecom’s strategic priorities; are key
drivers of short term performance; and are linked to shareholder value as outlined in Table 5.3.2.

5.3.2 STI Measure Alignment to Shareholder Value and Company Strategy

PERFORMANCE
MEASURE
Total Service
Revenue
Operating Free
Cash Flow (OFCF)

EBITDA

Customer Net
Promoter Score
(NPS)
Employee
Experience – Spirit
Index

ALIGNMENT TO SHAREHOLDER VALUE AND COMPANY STRATEGY

Supports TPG Telecom’s strategic focus on growing the value of customer relationships. Reflects
changes in both subscriber numbers and pricing.
Supports TPG Telecom’s strategic focus on capital efficiency and is a proxy for recurring cash
generated which is available to shareholders prior to the impact of tax payments and servicing of
leases and bank borrowings. Excludes payments for spectrum, which tend to be large, uneven, and
non-recurring year to year.
Recognises the principal metric of recurring ongoing operating profit across the telecommunications
sector in Australia, capturing benefits of operating cost outcomes as well as gross margin growth.
Excludes the accounting impact of depreciation and amortisation, which can fluctuate year to year
subject to the stage of the investment cycle and material one-off costs.
Aligns to TPG Telecom’s business strategy by measuring the nature of the customer experience,
with a view to minimising churn and accelerating revenue growth.

Supports TPG Telecom’s strategic goal of driving a high performing, values-based culture. The Spirit
Index measures the extent to which the four values, outlined in Section 3.1, are demonstrated in the
everyday experience of employees as well as the consistency of the culture across the organisation.
This is a tailored index, measured by an employee survey typically twice a year.

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Setting Performance Targets
Targets for the STI plan are set with consideration to TPG Telecom’s strategy and prior year performance. The
table below outlines the 2022 outcome and the 2023 measure at target.

5.3.3 Achievement against 2022 STI Outcome compared with 2023 STI Target

STI MEASURE & TARGET
WEIGHTING
Total Service Revenue
(20%)

2022 OUTCOME

2023 TARGET

2023 TARGET SETTING

$4,439m

$4,634m

OFCF (15%)

$92m

$135m

EBITDA (25%)

$2,135m

$1,850m

Customer NPS (10%)

Vodafone (5%)
TPG (2.5%)
iiNet (2.5%)
Employee Experience –
Spirit Index (10%)

13
12
14
79

8
4
10
Maintain Baseline
(79)

Targeted to achieve year on year growth with
consideration for subscriber numbers and refresh of
plans.
Targeted to deliver growth above 2022, following a
decline in 2022 predominantly associated with a
change in approach to handset refinancing.
2022 EBITDA outcome included the one-off proceeds
from the sale of some mobile tower assets as well as
restructuring and transformation costs. Excluding
these items, 2022 EBITDA was $1,793m1. Consistent
with what was disclosed to investors in the 2023
Outlook at the 2022 full year results investor
presentation, the target excluded forecast
transformation costs of $50m.
2022 outcomes are a rolling 12 month average.
Targets were set with reference to the December
2022 monthly result. For TPG and iiNet it was
anticipated that plan changes in late 2022 would have
a negative impact on NPS. Similarly for Vodafone,
consumer plan changes in 2023 were forecast to
have a negative impact on NPS which was reflected
in target setting.
Set taking into account the already strong results in
2022.

The Tower sale gain was included in the calculation of the remuneration outcome for 2022 as the asset sale aligned with shareholders’
interests by enabling the repayment of debt during a rising interest rate environment and allowed on-balance sheet funding of handset
receivables at a lower cost.

Individual performance assessment

The individual component represents 20% of the total STI payment at target. The RGC, with input from the
CEO, reviews and assesses each Executive KMP’s performance relative to their individual goals. For the CEO,
the assessment is completed by the RGC and the Board. Information on the CEO’s and Executive KMP’s
individual performance assessment is outlined in Section 5.5.

5.4 2023 STI Assessment, Achievement and Outcomes
The Board reviewed and assessed that the Group’s financial and risk gateways as outlined in Table 5.4.1 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.

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5.4.1 2023 STI Gateway Assessment

GATEWAY

ASSESSMENT

ASSESSMENT
LEVEL
Assessed at a
Group level

Financial

Risk

Assessed at an
Individual level

Behaviours

Minimum financial performance has been met and TPG
Telecom paid dividends to shareholders at 9 cents in April
and October 2023. A final dividend of 9 cents was declared
for FY2023.
Appropriate risk management processes and controls have
been put in place to manage risk within the business.
Incidents have been appropriately managed to limit impacts
on the business and customers.
Behavioural standards were met.

GATEWAY OUTCOME

Achieved

STI outcomes were calculated based on the achievement against TPG Telecom’s 2023 STI balanced scorecard
targets. A description of the business performance measures, targets and an assessment of the achievement
against these targets is detailed in Table 5.4.2.

5.4.2 2023 STI Balanced Scorecard Assessment

TOTAL SERVICE REVENUE (20%)

Measures recurring revenue generated from the provision of telecommunications services excluding handset, accessory,
and other hardware revenue. The Total Service Revenue outcome for 2023 was $4,632 million resulting in an STI
payment outcome between threshold and target. The result delivered growth of 4% compared with the prior year
supported by strong growth in mobile (+9%) driven by increases in both customers and ARPU.

OPERATING FREE CASH FLOW (OFCF) (15%)
Measures cash flow from operations less capex, finance lease repayments and finance lease interest (within cash flow
from financing activities). It does not include payments for spectrum and dividends and excludes any loan payments/
drawdowns. The OFCF outcome for 2023 was $166.5 million, resulting in an STI payment outcome at maximum. This
outperformance versus target was driven by a better result than targeted in working capital which more than offset
increased capital and finance lease expenditure.

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EBITDA (25%)

Measures the profit TPG Telecom makes after operating costs and before charges for depreciation and amortisation,
interest, and tax and excludes transformation and one-off charges for impairment of acquired brand intangibles. The
EBITDA outcome, which is calculated as Statutory EBITDA excluding transformation costs and a one-off charge for
impairment of an intangible for the Internode brand, was $1,929.9 million, resulting in a payment outcome between target
and maximum.

Transformation costs reported within Statutory EBITDA of $38.3 million have been excluded consistent with the basis of
the EBITDA target that was set for guidance and remuneration purposes. These were anticipated to be $50 million when
the EBITDA target of $1,850 million was set. This information was included in the 2023 Outlook statement in the 2022 full
year results. The Internode brand impairment of $17 million reported within Statutory EBITDA relates to an acquired
brand intangible from the merger of TPG and Vodafone Hutchison Australia in 2020 that was triggered by a business
consolidation that took place in December 2023. The impairment is non-cash and has been excluded as a one-off item
that was not captured in the target. Included within Statutory EBITDA are transaction costs of $31 million that were not
captured in the target. Although material and one-off in nature, these have not been adjusted as they were included
within the updated EBITDA guidance provided when the half year results were announced in August 2023.

The result of $1,929.9 million delivered growth of 7.6% compared with the prior year on a comparable basis1, primarily
driven by an 8% increase in service margin due to a 4% increase in Service Revenue (as noted above under Service
Revenue), together with a 4% reduction in direct costs as a result of improvements in the fixed broadband subscriber mix
(i.e. more fixed wireless customers).

The 2022 EBITDA comparator is $1,793 million, consisting of reported EBITDA of $2,135 million, excluding transformation costs of
$60 million and tower sale gain of $402 million.

CUSTOMER NPS (10%)
Measures the changes in brand score, calculated using the average of the scores across the year compared to the
baseline. The result for 2023 was positive to target and indicates strong management of the customer base, especially
when considering market pressure from cost of living increases and competitor crises. An outline by brand is provided
below.

Vodafone (5%)
There was an expectation of some decline in the first half of 2023, due to the plan changes initiated in Q1. This decline
was experienced by the brand during Q2 and Q3, but recovered in Q4. The brand outperformed targets and has regained
NPS leadership versus its competitors.

TPG (2.5%)
While TPG NBN plan changes took place in 2022, there was an expectation of long-term downward pressure on NPS
across 2023. Over the course of 2023, perceptions have slowly returned to pre plan change levels.

iiNet (2.5%)
iiNet has performed solidly across 2023. While there have been some fluctuations in NPS performance in Q3, the brand
has ended the year in a strong position.

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EMPLOYEE EXPERIENCE - VALUES ALIGNMENT INDEX (10%)
Index score is based on 16 values-based questions contained within the TPG Telecom culture survey. There are
4 questions for each of TPG Telecom’s values: Stand together, Own it, Simple’s better and Boldly go. The questions
evaluate the extent to which each value is demonstrated in the everyday experience of employees and measures themes
including accountability, respect at work, collaboration, communication, simplicity, innovation, career opportunities and
TPG Telecom’s strategy.

The result for 2023 was 77, a decrease of 2 on the target of 79 which equates to an outcome between threshold and
target. The target of 79 was set to maintain the already strong results from 2022. The experience of our people has been
impacted as the business goes through significant change involving a multi-year transformation program to simplify the
brand portfolio, rationalise products and customer journeys, and streamline internal systems and platforms. The
transformation program combined with a proposed asset sale, increased uncertainty across the Company.

Based on the 2023 STI Balanced Scorecard Assessment, the overall Company performance outcome is
summarised in Table 5.4.3 as a percentage of both target and maximum.

5.4.3 2023 STI Payment Outcome Percentages against Target and Maximum

PERFORMANCE
MEASURES

Total Service
Revenue1

WEIGHTING THRESHOLD

TARGET

MAXIMUM

ACTUAL

PAYOUT
VS
TARGET

PAYOUT
VS
MAXIMUM

WEIGHTED
%
PAYOUT

20%

$4,171m

$4,634m

$5,097m

$4,632m

99.8

66.53

19.96

Operating Free
Cash Flow2

15%

$108m

$135m

$162m

$166.5m

150

100

22.5

EBITDA3

25%

$1,665m

$1,850m

$2,035m $1,929.9m

121.6

81.07

30.4

5%
Vodafone

2.5%
TPG

2.5%
iiNet

10%

150

100

7.5

100

3.75

100

3.75

66.67

44.45

6.67

Customer
NPS
measure

Employee
culture
measure

Total Achievement out of Company Performance at Target (80%)

94.53

Total Achievement out of Company Performance at Maximum (120%)

78.78

1. Measures recurring revenue generated from the provision of telecommunications services excluding handset, accessory, and other

hardware revenue.

2. Measures cash flow from operations less capex, finance lease repayments and finance lease interest (within cash flow from financing

activities). It does not include payments for spectrum and dividends and excludes any loan payments/drawdowns.

3. Measures the earnings after operating costs and before charges for depreciation and amortisation, interest, and tax. The EBITDA

outcome outlined above is Statutory EBITDA of $1,874.6 million that adds back transformation costs of $38.3 million and Internode
impairment of $17 million bringing the total to $1,929.9 million. Transaction costs of $31m are included within statutory EBITDA and
are not added back to Statutory EBITDA, although they could be considered a one-off.

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5.5 2023 Individual Executive Assessment

2023 CEO Individual STI Outcome

The final 20% of the STI measure is based on an individual performance assessment against measures aligned
to TPG Telecom’s Strategic Pillars.

In addition to the Company’s STI scorecard performance and the STI gateway assessment, the CEO’s
performance was assessed against individual specific objectives approved at the start of the year by the Board
as outlined in Table 5.5.1. The objectives reflected the guiding principles outlined earlier in Section 3.1.

The RGC and Board assessed the CEO’s performance, which was supported by a stewardship report. The
outcome of this assessment is outlined in Table 5.5.2 and the CEO’s total STI outcome, based on both
Company performance and individual achievement is outlined in Table 5.5.3. The value of the deferred
component of the award will be subject to movements in the share price at vesting.

5.5.1 2023 CEO STI Performance Objectives

PERFORMANCE
OBJECTIVES

Deliver simplification
program to reduce
complexity and
enhance customer
experience.

INDIVIDUAL
PERFORMANCE
MEASURE
Measured by the
reduction of
Consumer ‘front
book’ products.
Measured by the
decommissioning of
IT systems.

THRESHOLD

TARGET

MAXIMUM

30% reduction in the
number of products
in the ‘front book’ for
Consumer.

35% reduction in the
number of products
in the ‘front book’ for
Consumer.

40% reduction in the
number of products in the
‘front book’ for Consumer.

10 IT systems
decommissioned.

20 IT systems
decommissioned.

32 IT systems
decommissioned.

Enhance network
experience.

Measured by the
delivery of additional
5G sites.

Deliver 934
additional 5G sites.

Deliver 1038
additional 5G sites.

Implement the Telstra
network sharing
arrangement if regulatory
approval is granted, or
otherwise have an
alternative regional mobile
coverage strategy
presented to the Board.

Successful execution
& delivery of growth
initiatives for
Consumer postpaid
mobile and
Enterprise,
Government &
Wholesale (EG&W)
non legacy product
margin.

Measured by the
achievement of
Consumer postpaid
ARPU.

Measured by the
achievement of
EG&W non legacy
product margin
targets.

Achieve Consumer
postpaid ARPU of
$44.40.

Achieve Consumer
postpaid ARPU of
$45.80.

Achieve Consumer postpaid
ARPU of $46.50.

Achieve EG&W non
legacy product
margin of $605m.

Achieve EG&W non
legacy product
margin of $623m.

Achieve EG&W non legacy
product margin of $640m.

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5.5.2 2023 CEO STI Performance Assessment

2023 CEO STI PERFORMANCE ASSESSMENT

ACHIEVEMENT AGAINST MEASURES

BOARD
ASSESSMENT ON
ACHIEVEMENT

Deliver simplification program to reduce
complexity and enhance customer
experience. Measured by the reduction in the
number of ‘front book’ products for Consumer
and decommissioning of IT systems.

Enhance network experience. Measured by
the delivery of additional 5G sites.

Successful execution & delivery of growth
initiatives for Consumer postpaid mobile and
Enterprise, Government & Wholesale
(EG&W) non legacy product margin.

40% reduction in the number of products in
the ‘front book’ for Consumer.

At Maximum

Decommissioned 43 IT systems.

At Maximum

TPG Telecom delivered 1,008 5G sites in
2023, representing 97% of the target of
1038 5G sites.

Between Threshold
and Target

Consumer postpaid ARPU was $46.90.

At Maximum

EG&W non legacy product margin was
$634.5m.

Between Target and
Maximum

5.5.3 CEO 2023 STI Outcomes

EXECUTIVE KMP

2023 STI CASH
ACTUAL

2023 STI
DEFERRED
ACTUAL1

TOTAL 2023 STI
ACTUAL

PERCENTAGE OF
TARGET

PERCENTAGE
OF MAXIMUM

Iñaki Berroeta

1,336,830 $

2,673,660

121.53%

81.02 %

1. Deferred equity vests in two equal tranches over one and two years.

2023 Other Executive KMP STI Outcomes

The final 20% for the Other Executive KMP STI outcome is based on an individual performance assessment.
The RGC, following input from the CEO, reviewed and assessed each Executive KMP’s performance relative to
their individual goals, along with a review of key performance measures. This review is supported with a
performance report for the Executives outlining their individual goals and key performance measures which are
set based on TPG Telecom’s strategy. The assessment of Other Executive KMP STI outcomes for 2023 also
takes into account the additional workload required of Executives due to the number of transactions undertaken
during the year, notwithstanding the outcomes.

The total STI allocated for each eligible Other Executive KMP in 2023, based on both Company performance
and individual achievement is outlined in Table 5.5.4. The value of the deferred component of the award will be
subject to movements in the share price at vesting. It is due to vest equally over two years.

5.5.4 Other Executive KMP 2023 STI Outcomes

EXECUTIVE KMP

2023 STI CASH
ACTUAL

2023 STI
DEFERRED
ACTUAL1

TOTAL 2023 STI
ACTUAL

PERCENTAGE OF
TARGET

PERCENTAGE OF
MAXIMUM

Ana Belea

Kieren Cooney

Jonathan
Rutherford

Grant Dempsey2

366,772 $

733,544

124.53%

83.02%

427,128 $

854,256

120.53%

80.35%

354,991 $

709,982

120.53%

80.35%

377,949 $

— $

377,949

57.27%

38.18%

1. Deferred equity vests in two equal tranches over one and two years.
2. Deferred equity component of the 2023 STI has not been awarded due to departure.

Page 43 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

6. 2023 Long Term Incentive Plan

The structure and details of TPG Telecom’s Long Term Incentive (LTI) plan are critical to creating alignment
between Executives and the performance of the business over the longer term.

TPG Telecom’s LTI plan has evolved since the merger in 2020. The history of the LTI plans and rationale for
adjustments in 2023 are described below.

Prior to the 2020 merger, Vodafone Hutchison Australia (VHA) had a three year cash based plan consisting of
a retention hurdle and a single performance hurdle which was OFCF, reset annually. TPG Corporation had a
4 year equity based plan with a retention hurdle and a financial performance hurdle.

At merger, a new LTI plan was implemented. This LTI plan was an equity based plan that had two equally
weighted hurdles of OFCF and relative Total Shareholder Return (TSR), with performance to be assessed at
the end of a three year period. This approach was adopted for both the 2021 and 2022 LTI plans.

Significant changes were adopted for the 2023 LTI plan. In making these changes, a comprehensive review
was undertaken by the Board which considered:

• Significant feedback from proxy advisors;

–

that given the capital intensive nature of the business, the plan should include a return on capital
measure;

the appropriateness of including OFCF as a measure in both the LTI and STI plans.

• The Company’s prior commitment to introducing an ESG target into the 2023 LTI plan.

In considering these issues, the Board also had regard to other factors, which they considered critical to
aligning the interests of Executives and shareholders.

Foremost was the need to balance a growth in Earnings Per Share (EPS) with a return on capital measure
to drive returns for shareholders. A return on capital measure requires the complementarity of growing EPS
to create value for shareholders over the longer term. They are also measures over which management
has control.

At the same time, significant thought was given to including a TSR measure, which is common market practice
and which had previously been a TPG Telecom LTI hurdle. However, on balance, it was considered that EPS is
more important and that having a fourth hurdle (TSR), was not appropriate practice.

As a result, the new hurdles adopted for the 2023 LTI Plan were Return on Invested Capital (ROIC), Earnings
Per Share (EPS) and a renewable electricity hurdle, which are outlined in Tables 6.1.1 and 6.2.1. While more
information on these hurdles was provided in the Notice of Meeting for the May 2023 Annual General Meeting,
it is acknowledged that greater detail, including on targets, could have been provided in the 2022 Remuneration
Report.

6.1 2023 LTI Performance Hurdles

The 2023 LTI plan hurdles, weightings, definitions and alignment to shareholder value and the longer-term
strategy of TPG Telecom are outlined in the table below.

6.1.1 2023 LTI plan hurdles, weightings, definitions and alignment to shareholder value

2023 PERFORMANCE
HURDLES AND
WEIGHTINGS
Return on Invested
Capital1
(ROIC)
45%

DEFINITION OF HURDLE, ALIGNMENT TO SHAREHOLDER VALUE AND COMPANY
STRATEGY

ROIC is a core metric of return for all capital deployed by TPG Telecom, noting the
current period of elevated investment to facilitate programs for 5G and IT transformation,
as well as spectrum agreements, to encourage higher returns on capital.
ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base
amortisation and material one-offs (subject to the discretion of the Board), divided by
average invested capital excluding goodwill, brand and customer base intangibles.

1. ROIC and EPS targets exclude the impact of purchased intangibles from business combinations. This treatment is consistent with

market practice.

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Directors’ report | Remuneration report continued

2023 PERFORMANCE
HURDLES AND
WEIGHTINGS
Earnings Per Share1
(EPS)
45%

ESG
Renewable Electricity
10%

DEFINITION OF HURDLE, ALIGNMENT TO SHAREHOLDER VALUE AND COMPANY
STRATEGY

The EPS measure is aimed at aligning Executive incentives with growth in the value
flowing directly to equity holders. EPS (LTIP basis) measures statutory net profit after tax
(NPAT), adjusted by adding back customer base amortisation and material one-offs
(subject to the discretion of the Board), divided by the weighted average number of
shares on issue over the year.
The ESG performance condition is aligned with TPG Telecom’s renewable energy target,
which was announced on 31 March 2021, which set a goal to power all Australian
operations with 100% renewable electricity by the end of 2025.

1. ROIC and EPS targets exclude the impact of purchased intangibles from business combinations. This treatment is consistent with

market practice.

6.2 2023 LTI Plan Hurdles and Vesting Schedules

The 2023 LTI plan has a performance period of three years, commencing 1 January 2023 and concluding
31 December 2025. The achievement against the performance hurdles is assessed after the conclusion of
the performance period.

6.2.1 2023 LTI Vesting Schedule and Targets

LTI
MEASURE

ROIC1

EPS3

ESG

TARGETS

ROIC is measured against targets set by the
Board to achieve a significantly improved
return on investment over the three year LTI
period (2023 to 2025).
Performance at target is set to exceed the
2022 post-tax weighted average cost of
capital (WACC), with maximum representing
further improvement to achieve a double-digit
compound average annual growth rate in
ROIC from the 2022 base year.
In 2022 actual ROIC on a comparable basis
was 5.7%2 which was below WACC. ROIC is
measured at the end of the performance
period.
EPS is measured against targets set by the
Board to achieve significantly improved
performance over the three year LTI period
(2023 to 2025).
At maximum, EPS performance is set to
achieve a double-digit compound average
annual growth rate against the 2022 base
year.
The baseline EPS result in 2022 was 14.2
cents per share4. EPS is measured at the end
of the performance period.
Power all Australian operations with 100%
renewable electricity by the end of 2025.

MEETS
THRESHOLD

50% of rights
granted vest

BETWEEN
THRESHOLD
AND MAXIMUM
Straight-line pro
rata vesting
between 50.1%
and 100%

EXCEEDS
MAXIMUM

100% of rights
granted vest

50% of rights
granted vest

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

100% of rights
granted vest

75% of rights
granted vest

N/A

100% of rights
granted vest

1. ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base amortisation and material one-offs (subject

to the discretion of the Board), divided by average invested capital excluding goodwill, brand and customer base intangibles.
FY22 baseline ROIC is adjusted for transformation costs and excludes any one-off benefit from the sale of TPG Telecom's passive
tower and rooftop assets in July 2022. Adjustment for transformation costs or any one-offs in the testing year for the LTI plan is subject
to the discretion of the Board.
EPS (LTIP basis) measures statutory net profit after tax (NPAT), adjusted by adding back customer base amortisation and material
one-offs (subject to the discretion of the Board), divided by the weighted average number of shares on issue over the year.
FY22 baseline EPS is adjusted for transformation costs and excludes the one-off benefit from the sale of TPG Telecom's passive
tower and rooftop assets in July 2022. For the purpose of calculating the FY22 baseline EPS, a tax rate of 30% has been applied to
the sale of tower and rooftop assets. Adjustment for transformation costs or any one-offs in the testing year for the LTI plan is subject
to the discretion of the Board.

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Directors’ report | Remuneration report continued

The assessment of achievement against the 2023 LTI plan targets for all measures will be reported in the 2025
Annual Report. The Board has discretion to make downward or upward adjustments for one-off or other items
as it deems appropriate, while taking into consideration the benefits or otherwise for shareholders.

The targets that have been disclosed aim to strike an appropriate balance between giving shareholders insight
that the targets are appropriate to drive performance, while avoiding providing specific disclosure over a
forward three year period.

6.3 2023 LTI Instruments and Conditions

LTI is granted as performance rights that entitle participants to a fully paid ordinary share in TPG Telecom,
subject to meeting performance hurdles as defined. Performance rights are granted at no cost to the
participant.

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.

In 2023, the five working days following the announcement of the annual results was from 28 February 2023 to
6 March 2023. The VWAP for the 2023 LTI grant of performance rights was approved by the Board at $4.99 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 value by the Board approved VWAP share price. In the
case of the CEO, shareholder approval was sought and obtained at the May 2023 Annual General Meeting.

Shares are typically purchased on market, which was the case in 2023. The quantity of shares purchased on
market reflects the likely vesting patterns of prior share grants.

Exercise of performance rights is automatic if the hurdles are met and the shares vest. There is no exercise
price. No dividend is payable on unexercised rights.

The LTI plan is also aligned with shareholders’ interests in the event that an Executive KMP ceases
employment with TPG Telecom. Upon cessation, 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.

In circumstances where there is a change of control, performance rights will be subject to the existing terms
and conditions of the award and the exercise of Board discretion.

To further align the LTI plan with the interests of shareholders, the plan is also subject to a hedging condition,
meaning that Executives cannot enter into any arrangements that limit the economic risk of unvested
performance rights.

The LTI plan is also subject to a malus condition. In cases where an Executive KMP acts fraudulently or
dishonestly or is in breach of their obligations to TPG Telecom, any unvested rights will lapse.

6.4 2023 LTI Opportunity
For 2023, the maximum LTI opportunity for Executive KMP was as follows:

6.4.1 2023 Maximum LTI Opportunity

KMP

CEO

Other Executive KMP

OPPORTUNITY AT MAXIMUM ACHIEVEMENT

150% of Base Salary

100% Base Salary

The LTI opportunity is set with reference to a peer group of relevant ASX peers based on the Company’s
market capitalisation. For 2023, based on analysis undertaken in 2022, this was the ASX 21-60, using data
from 2022. This peer group was selected after careful consideration of the Company’s position within the ASX
at that time and after reviewing both local and some international telecommunications peers. Exclusions to the

Page 46 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

peer set were made for significant outliers including if their ownership structure or the nature of the operations
were not comparable to that of TPG Telecom.

The target and maximum LTI opportunity were set with reference to the median target for overall remuneration
of this peer group, after considering the level of fixed remuneration and STI, as well as the appropriate balance
between STI and LTI. Where LTI maximum information was unavailable, this was set with reference to the 75th
percentile of remuneration of this peer group, considering the balance of the fixed, short term and long-term
components of the total remuneration package.

To achieve a payment at the LTI maximum after a three year period, performance needs to have met or
exceeded the maximum set for the LTI performance measure. Each performance measure is assessed against
threshold and maximum performance with a pro rata outcome applied if achievement falls between threshold
and maximum. ROIC, EPS and renewable electricity will be measured at the end of the performance period.
Table 6.2.1 above outlines the specific payout schedule for the ESG measure, which is set separately due to
the nature of the measure.

Table 6.4.2 details the number of performance rights granted to each Executive KMP under the 2023 LTI Plan
and the share price at the time of grant for those Executive KMP. Shareholder approval was obtained for the
grant of the CEO’s performance rights at the Annual General Meeting on 4 May 2023, even though this was not
required as the shares were acquired on market. Performance rights are subject to performance hurdles and
have no value unless those hurdles are met.

6.4.2 2023 LTI Plan Executive KMP LTI Grants

EXECUTIVE KMP1

Iñaki Berroeta
Ana Belea
Kieren Cooney
Jonathan Rutherford
Grant Dempsey

POTENTIAL
MAXIMUM as a % of
BASE SALARY

POTENTIAL
MAXIMUM
2023

SHARE PRICE AT
GRANT

150% $
100% $
100% $
100% $
100% $

3,000,000 $
785,400 $
945,000 $
785,400 $
880,000 $

4.99
4.99
4.99
4.99
4.99

NUMBER OF 2023 LTI
PERFORMANCE RIGHTS
GRANTED
601,202
157,394
189,378
157,394
176,352

John Boniciolli was not granted rights under the 2023 LTI plan.

7. 2021 Long Term Incentive Plan

This section of the report outlines the outcome of the 2021 LTI plan, following the end of the performance
hurdle period. This is consistent with the commitment made in the 2021 Remuneration Report to describe
targets and the outcome after the end of the vesting period.

7.1 2021 LTI Plan Outcome

The 2021 LTI plan performance period was from 1 January 2021 to 31 December 2023. The 2021 LTI Plan is
the first of the two plans that had equally weighted hurdles of OFCF and TSR.

OFCF measures cash flow from operations less capex, finance lease repayments and finance lease interest
(within cash flow from financing activities). It does not include payments for spectrum and dividends and
excludes any loan payments/drawdowns. OFCF is a cumulative target tested at the end of the period. The
cumulative OFCF result was impacted by a number of factors not anticipated at the time the target was set at
the commencement of the 2021 LTI plan. These include a shortfall in revenue from the higher-than-expected
impact of COVID, CAPEX investment during the period being higher than anticipated to support the accelerated
5G RAN refresh and infrastructure modernisation, and other movements including handset receivables debt
payment and the impact of finance leases.

TSR was assessed at the end of 2023 against 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). A
decline in TPG Telecom’s share performance over the course of 2023 resulted in the TSR outcome being below
threshold. External input and certification was obtained on the TSR outcome.

Page 47 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

7.1.1 OFCF Outcome

MEASURE &
WEIGHTING

OFCF (50%)

VESTING SCHEDULE

50% of rights vest when 80% of
the Cumulative OFCF is
achieved, up to 100% when
110% is achieved.

7.1.2 Relative TSR Outcome

CUMULATIVE
TARGET

OUTCOME

YEAR 1

YEAR 2

YEAR 3

TOTAL

% VESTED

$2,073m

$596m

$92m $166.5m $854m

MEASURE &
WEIGHTING

Relative TSR
(50%)

VESTING SCHEDULE

TARGET

OUTCOME1

% VESTED

50% of rights vest at the 50.1st
percentile, up to 100% at the 75th
percentile.

75th percentile

12th percentile

1. Outcome has been externally certified.

Based on the achievement against the 2021 LTI hurdles outlined in Tables 7.1.1 and 7.1.2, no performance
rights granted in respect to either hurdle under the 2021 LTI plan will vest.

8. Total Remuneration Outcomes 2023

8.1 2023 Total Remuneration Allocated

Table 8.1.1 below details actual total remuneration allocated to Executive KMP (both in cash and the face value
of equity) for 2023. The 2023 LTI allocation will only have value if the specified hurdles are met.

Where a sign on amount was paid in cash in 2023, this is for an amount paid by the Company related to the
forfeiture of incentives from a previous employer. Forfeitures are verified before such arrangements are entered
into and the timing of sign on payments reflects the timing of payment from the previous employer. Sign on
arrangements were in place for Kieren Cooney who commenced on 8 March 2021, Grant Dempsey who
commenced on 1 February 2022 and John Boniciolli who commenced on 13 November 2023. Sign on
payments are shown as Other Payments in Table 8.1.1 below.

8.1.1 2023 Total Remuneration Allocated

EXECUTIVE KMP

Iñaki Berroeta
Ana Belea
John Boniciolli2
Kieren Cooney
Jonathan
Rutherford
Grant Dempsey4

$
$
$
$

2023 FIXED
REMUNERATION

OTHER
PAYMENTS1

2023 STI
3
ACTUAL

2,001,346 $
800,221 $
125,486 $
963,846 $

— $
— $
115,000 $
71,250 $

2,673,660 $
733,544 $
— $
854,256 $

2023 LTI GRANT
ALLOCATED
VALUE
3,000,000 $
785,400 $
— $
945,000 $

2023 ACTUAL TOTAL
REMUNERATION
ALLOCATED
7,675,006
2,319,165
240,486
2,834,352

799,846 $

— $

709,982 $

785,400 $

789,012 $

99,584 $

377,949 $

880,000 $

2,295,228

2,146,545

2.
3.
4. Grant Dempsey ceased his role as a KMP on 12 November 2023.

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Directors’ report | Remuneration report continued

8.2 2023 Total Remuneration Received

Table 8.2.1 below details total actual remuneration received by each Executive KMP in 2023, comprising cash
payments made and the value of any short term equity from previously awarded STI plans that vested in 2023.

8.2.1 2023 Actual Cash Received

EXECUTIVE KMP

Iñaki Berroeta

Ana Belea
John Boniciolli5

Kieren Cooney

Jonathan Rutherford
Grant Dempsey6

FIXED
REMUNERATION

OTHER
PAYMENTS1

2023 STI
CASH2

STI VESTED3,4 TOTAL CASH RECEIVED7

2,001,346 $

800,221 $

— $ 1,336,830 $

552,882 $

— $

366,772 $

90,231 $

125,486 $

115,000 $

— $

963,846 $

71,250 $

427,128 $

799,846 $

— $

354,991 $

789,012 $

99,584 $

377,949 $

— $

95,036 $

39,056 $

— $

3,891,058

1,257,224

240,486

1,557,260

1,193,893

1,266,545

2.
3.

1. Other Payments includes payments made in 2023 related to a sign on payment, agreed on an Executives appointment with the
Company related to the forfeiture of incentives from a previous employer. The payments mirror the timing and at target value of
incentive payments from the previous employer.
2023 STI plan cash payment that will be made in 2024.
Includes Tranche 2 of the 2020 STI DSRs for the CEO and Tranche 1 of the 2021 STI DSRs for the CEO and Executive KMP, both of
which vested on 31 March 2023.
Value is calculated at the time of grant, using the VWAP from the 5 days after TPG Telecom’s Annual Results are released. For
Tranche 2 of the 2020 DSRs this was $6.80, and for Tranche 1 of the 2021 DSRs this was $5.70. The closing share price on the
vesting date was $4.88.
John Boniciolli was appointed as a KMP on 13 November 2023.

5.
6. Grant Dempsey ceased his role as a KMP on 12 November 2023.
7.

Excludes the vesting of the legacy VHA 2020 Cash LTI plan for Iñaki Berroeta which was $962,317 and Ana Belea which was
$321,501.

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Directors’ report | Remuneration report continued

8.3 Alignment with Shareholder Interests

The alignment of the Company’s performance for FY23 with remuneration outcomes for Executive KMP is
outlined in Table 8.3.1.

8.3.1 Five year Performance History

FINANCIAL1
Service revenue2
EBITDA3
OFCF4
NPAT5
ROIC6
EPS9
Dividend Paid
Share Price12

2019

2,271

1,178

568

—

2020

3,295

1,391

361

734

—

N/A

7.22

2021

4,372

1,727

596

113

5 %

12.1

288

5.89

2022

4,439

2,135

513
5.7%7
14.210
325

4.89

2023

4,632

1929.9

166.5

49
6.1%8
11.911
335

5.18

1. Historic performance in 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.
Service revenue is customer mobile, fixed broadband, data and internet service revenue and excludes handset, accessory and other
hardware revenue.
EBITDA is defined as earnings after operating costs and before depreciation and amortisation, interest and tax. For 2022 this included
the Tower Sale and transformation costs. In 2023 transformation costs of $38.3m and Internode impairment costs of $17m were
excluded.

4. OFCF is cash flow from operations less capex, finance lease repayments and finance lease interest (within cash flow from financing

activities). It does not include payments for spectrum and dividends and excludes any loan payments/drawdowns.

5. NPAT reflects statutory NPAT.
6. ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base amortisation and material one-offs (subject

to the discretion of the Board), divided by average invested capital excluding goodwill, brand and customer base intangibles
FY22 baseline ROIC is adjusted for transformation costs and excludes any one-off benefit from the sale of TPG Telecom's passive
tower and rooftop assets in July 2022. Adjustment for transformation costs or any one-offs in the testing year for the LTI plan is subject
to the discretion of the Board.
FY23 baseline ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base amortisation, transformation
costs, transaction costs and Internode brand impairment divided by average invested capital excluding goodwill, brand and customer
base intangibles
EPS (LTIP Basis) measures statutory net profit after tax (NPAT), adjusted by adding back customer base amortisation and material
one-offs (subject to the discretion of the Board), divided by the weighted average number of shares on issue over the year.
10. FY22 baseline EPS is adjusted for transformation costs and excludes the one-off benefit from the sale of TPG Telecom's passive

tower and rooftop assets in July 2022. For the purpose of calculating the FY22 baseline EPS, a tax rate of 30% has been applied to
the sale of tower and rooftop assets.

11. FY23 baseline EPS is adjusted for transformation costs, transaction costs, Internode brand impairment. Adjustment for transformation

costs or any one-offs in the testing year for the LTI plan is at Board discretion, which if exercised would be disclosed.

12. Represents the closing share price as at 31 December.

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Directors’ report | Remuneration report continued

9. Minimum Shareholding Requirements

To align Executive interests with shareholders, a minimum shareholding requirement is set for all Executive
KMP as follows:

9.1.1 Executive KMP Minimum Shareholding Requirement

EXECUTIVE KMP
Commenced as KMP before
1 January 2023
Commenced as KMP after
1 January 2023

MINIMUM SHAREHOLDING

TIMEFRAME TO ACHIEVE

One year’s base salary calculated on
the value of shares held directly or
indirectly by the Executive KMP.

7 years from commencement

5 years from commencement

In 2023, the policy was amended based on shareholder feedback to exclude unvested performance rights and
deferred share rights in the calculation of the minimum shareholding. To mitigate the cash impact on Executive
KMP given prior expectations and to ensure Executive retention, the timeframe for achieving the minimum
shareholding was increased from 5 to 7 years for selected executives. Notwithstanding the increased
timeframe, it is forecast that most Executive KMP will achieve the minimum shareholding prior to 7 years. The
timeframe for new Executive KMP remains at 5 years.

The RGC monitors compliance annually. A share trading policy ensures Executives adhere to insider trading
laws, restricting trades to defined windows. Any breach is taken seriously and may result in legal action, up to
and including termination. Compliance with shareholding requirements is contingent on adherence to the share
trading policy and insider trading provisions of the Corporations Act 2001.

10. Looking forward to 2024

For 2024, a comprehensive analysis was undertaken across the ASX 21-60 and ASX 31-70 peer group, based
on data as at December 2023. Limited changes are proposed for fixed remuneration, STI and LTI for Executive
KMP in 2024. The effective date for the fixed remuneration changes will be 1 March 2024, aligned with the rest
of the Company. The effective date for the purpose of calculating STI and LTI is 1 January 2024.

10.1 Base Salary

Base salaries, which are typically reviewed annually, will increase by 3% for all ongoing specified Executive
KMP, except the CFO who has recently joined TPG Telecom. 3% is below the rate of inflation, which was 4.6%
in November 2023.

10.2 2024 STI

The percentage of STI opportunity relative to Base Salary and the STI measures remains as was the case in
2023. However, in response to shareholder feedback, alternative approaches to the customer measure are
being reviewed for the 2025 STI plan.

The Board will retain discretion to exclude one-off items in the calculation of STI outcomes. If these exclusions
are known at the time, they will be included in the full-year guidance for 2024.

10.3 2024 LTI

The percentage of LTI opportunity relative to Base Salary will remain unchanged. LTI Hurdles will remain
consistent with EPS and ROIC weighted at 45% each and an ESG measure weighted at 10%. The targets and
vesting schedule for the 2024 LTI plan are as follows:

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Directors’ report | Remuneration report continued

10.3.1 2024 LTI Plan Measures and Targets

PERFORMANCE
MEASURES AND
WEIGHTINGS
ROIC1
45%

EPS3
45%

ESG – Renewable
Electricity Target
10%

TARGETS

ROIC is measured against targets set by the Board to
achieve growth over a three year period (2024 to
2026).
Performance at target is set to exceed the 2023 post-
tax weighted average cost of capital (WACC) and the
2023 base year ROIC, which on a comparable basis
was 6.1%2.
Performance at maximum would reflect a further
significant improvement. ROIC is measured at the end
of the performance period.

EPS is measured against targets set by the Board to
achieve significantly improved performance over a
three year period (2024 to 2026).
The baseline EPS result in 2023 was 11.9 cents per
share4. At threshold, target and maximum levels, the
hurdle for the 2024 LTI plan is equal to the 2023 LTI
plan, despite the reduction in the 2023 base year EPS
from 2022, which was 14.2 cents a share in 2022.
As such, achievement at maximum in 2026 would
reflect double digit average compound annual growth
against the 2023 base year. EPS is measured at the
end of the performance period.
All operations powered by renewable electricity by the
end of the performance period.
Threshold performance is reached if 90%-99.9% of all
operations are powered by renewable electricity by
the end of the performance period.
Maximum performance is reached if 100% of all
operations are powered by renewable energy by the
end of the performance period.

MEETS
THRESHOLD

50% of rights
granted vest

BETWEEN
THRESHOLD
AND MAXIMUM
Straight-line
pro rata
vesting
between
50.1% and
100%

EXCEEDS
MAXIMUM

100% of
rights
granted
vest

50% of rights
granted vest

100% of
rights
granted
vest

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

75% of rights
granted vest

N/A

100% of
rights
granted
vest

1. ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base amortisation and material one-offs (subject

to the discretion of the Board), divided by average invested capital excluding goodwill, brand and customer base intangibles.
FY23 baseline ROIC measures net operating profit after tax (NOPAT) adjusted to remove customer base amortisation, transformation
costs, transaction costs and Internode brand impairment divided by average invested capital excluding goodwill, brand and customer
base intangibles.
EPS (LTIP basis) measures statutory net profit after tax (NPAT), adjusted by adding back customer base amortisation and material
one-offs (subject to the discretion of the Board), divided by the weighted average number of shares on issue over the year.
FY23 Baseline EPS is adjusted for transformation costs, transaction costs, Internode brand impairment. Adjustment for transformation
costs or any one-offs in the testing year for the LTI plan is at Board discretion, which if exercised would be disclosed.

The assessment of achievement against the 2024 LTI plan targets for all measures will be reported in the 2026
Annual Report. The Board has discretion to make downward or upward adjustments for one-off or other items
as it deems appropriate, while taking into consideration the benefits or otherwise for shareholders.

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Directors’ report | Remuneration report continued

10.4 2024 Performance Retention Rights Plan

While the Company’s existing executive remuneration structure aligns with market benchmarks, the continuity
of leadership and retention of a high performing team is considered critical in what continues to be a highly
competitive landscape for executive leadership and talent. Furthermore, the number of highly skilled
telecommunications executives in the Australian market is limited and telecommunications executives are
highly sought after. These factors, combined with the need to retain top talent to ensure sustained success and
shareholder value creation, prompted careful consideration by Directors of a special incentive. A one-off
performance rights retention plan was designed to retain high-performing Executives, ensuring stability in
leadership and alignment on improving value for shareholders. The plan details, offered to eligible Executives in
2024, are as follows:

• The performance period of the plan is over three years, commencing 1 January 2024 and concluding

31 December 2026.

• Plan performance is measured against two equally weighted tranches: a relative TSR condition and a

service condition, requiring the Executive to be employed and not under notice at vesting.

• Eligible Executive KMP have an opportunity equivalent to 100% of their base salary, as at 1 March 2024,
which will be converted to performance rights by using the VWAP from the five working days following the
announcement of the annual results.

• Shareholder approval will be sought at the 2024 Annual General Meeting for rights proposed to be granted

to the CEO, even though those shares will be acquired on market.

The vesting schedule for these hurdles is outlined in Table 10.4.1 below.

10.4.1 2024 Performance Retention Rights Plan Measures and Targets

PERFORMANCE
MEASURE AND
WEIGHTING

Relative Total
Shareholder Return
(TSR)
50%

Retention
50%

TARGET & VESTING SCHEDULE

TPG Telecom’s TSR relative to a peer group of ASX 100 listed organisations (which excludes the
Energy, Financial, Materials and Real Estate sectors) as at 31 December 2026, must be between
the 50.1 and 75th percentile for rights granted under this tranche.
Achievement between the 50.1 percentile and 75th percentile results in a straight line pro rata
vesting. Achievement equal to or above the 75th percentile results in 100% of the rights granted
under this tranche vesting.
Rights under this condition will generally be forfeited if the Executive is not employed or is under
notice of termination at the time of vesting.
An Executive must be employed and not under notice of termination at the time of vesting.
100% of rights granted under this tranche will vest if the Executive meets this condition.

More information about the plan will be included in the Company’s 2024 Remuneration Report.

11. Remuneration Governance

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

The Remuneration and Governance Committee (RGC) undertakes detailed work on remuneration and provides
advice to the full Board through formal reports and recommendations, minutes and verbal reports provided to
the Board by the Chairman of the RGC. Prior to November 2023, these functions were undertaken by the
Governance, Remuneration and Nomination Committee (GRNC). At this time, a separate Nomination
Committee was established to ensure greater compliance with the ASX Corporate Governance Principles
and in response to feedback from a proxy advisor.

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Directors’ report | Remuneration report continued

11.1 Responsibilities of the Board and the RGC

The responsibilities of the Board and the RGC, as defined in the Board and Remuneration and Governance
Committee Charters, are outlined in Table 11.1.1.

11.1.1 Responsibilities of the Board and the RGC

AREA

Executive
remuneration

APPROVED BY BOARD ON
RECOMMENDATION OF RGC
• 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

bias

• Minimum shareholding policy

ROLE OF RGC

In addition to making recommendations to the Board,
the RGC 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
retention risk given market conditions

• Assesses performance against gateways and STI

performance against metrics

• Exercises delegated discretions under employee

incentive and equity plans

• Monitors the effectiveness of employee incentive

and equity plans

• Ensures practices and procedures comply with
legal and ASX requirements and are in line with
current market practices

• Reviews remuneration reporting to ensure it

complies with legal and governance requirements

• Monitors conformance with minimum

shareholding requirement

Non-Executive
Director
remuneration

• Remuneration policies
• Remuneration fees (subject to the aggregate

• Monitors conformance with minimum

shareholding requirement

cap) as approved by shareholders

• Minimum shareholding policy

11.2 Composition of the RGC

The RGC consists of three Non-Executive Directors, with a majority (two) being independent. The previous
GRNC had the same composition from 28 March 2023, when the Committee size was reduced by one and the
percent of independents was increased.

11.2.1 Members of the RGC

NON-EXECUTIVE KMP

ROLE

Dr Helen Nugent AC

Arlene Tansey

Frank Sixt

Independent Non-Executive Director, Senior Independent Director,
Remuneration & Governance Committee Chairman & Nomination
Committee Chairman
Independent Non-Executive Director and Audit & Risk Committee
Chairman
Non-Executive Director

Diego Massidda ceased as a member of the GRNC on 28 March 2023.

TERM AS KMP

Full year

All members of the RGC have experience in both human resources and risk to achieve effective governance of
TPG Telecom’s remuneration system. In addition, all members of the RGC have extensive experience in

Page 54 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

remuneration either through their professional background or as members of the committees of other boards,
either in Australia or overseas.

11.3 Remuneration Governance processes

In 2023, the RGC and its predecessor, the GRNC, met 6 times to address remuneration issues. Director’s
attendance at the meetings is set out in the Directors’ report.

Over that period, the RGC 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, particularly given changes occurring in the
telecommunications sector. Significant attention was also paid to feedback from investors and proxy advisors in
response to the 2022 Remuneration Report.

Strong and robust processes exist 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 RGC and the Board.

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

The RGC and the Board also met without the CEO in attendance to evaluate his performance, with this
conversation supported by a stewardship report.

To assist with this process, a range of benchmark data was sought from Aon Hewitt as an independent third
party, in addition to assessing publicly available information including detailed analysis of ASX annual reports.
This data was considered in detail by the RGC 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.

11.4 Non-Executive Director Remuneration

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

As approved by shareholders in 2020, 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, which for 2023 was the ASX 21-60. There were no changes to Non-Executive Director fees in 2023
and no additional fees were provided as a result of establishing a separate Nomination Committee. Table 11.4.1
below outlines the fees (inclusive of superannuation) paid to Non-Executive Directors in 2023.

11.4.1 Non-Executive Director Fees for 2023

ROLE

BOARD

AUDIT AND RISK
COMMITTEE

REMUNERATION &
GOVERNANCE COMMITTEE1

NOMINATION COMMITTEE

Chairman

$ 450,000 $

Member

$ 165,000 $

50,000 $

25,000 $

50,000

25,000

No additional fees were paid
to the Chairman or Members of
the Nomination Committee

Formerly Governance, Remuneration and Nomination Committee (GRNC).

It was indicated in the 2022 Remuneration Report that a review of Non-Executive Director fees would be
undertaken in 2023. That review indicated that even when examining the ASX 31-70 peer group, which was
selected after careful consideration of the Company’s position within the ASX, Non-Executive Director fees
remain significantly below market. As a result of this review, the following changes have been made, effective
1 January 2024:

• An increase to the base fee for the two Independent Non-Executive Directors
• An increase for the Chairman and Non-Executive Director fees for the Audit and Risk Committee
• An additional fee payable to the Senior Independent Non-Executive Director

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Directors’ report | Remuneration report continued

These changes have been made after considering the current market positioning, scope and responsibilities of
the role of Independent Non-Executive Directors and Committee roles at TPG Telecom, including the significant
additional workload of the Independent Non-Executive Directors and the Senior Independent Non-Executive
Director.

At TPG Telecom, the Audit and Risk functions are combined (as opposed to attracting two different fees) and
the Remuneration and Governance functions are handled by the same committee.

The table below outlines the fees (inclusive of superannuation) that will be paid to Non-Executive Directors for
the 2024 financial year.

11.4.2 Non-Executive Director Fees for 2024

ROLE

Chairman

Independent
Non-Executive Director
Non-Independent
Non-Executive Director
Senior Independent
Non-Executive Director

BOARD

AUDIT AND RISK
COMMITTEE

REMUNERATION &
GOVERNANCE
COMMITTEE

450,000 $

60,000 $

185,000 $

30,000 $

50,000

25,000

165,000 $

30,000 $

25,000

NOMINATION COMMITTEE

No additional fees are paid
to the Chairman or Members
of the Nomination
Committee

20,000
(additional fee)

A Non-Executive Director nominated by a shareholder may elect to have their Director’s fees paid to
their nominating shareholder. For Non-Executive Directors in 2023, this included Canning Fok, Frank Sixt,
Pierre Klotz, Diego Massidda and Serpil Timuray.

11.5 Non-Executive Director Minimum Shareholding Requirement

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

11.5.1 Non-Executive Director Minimum Shareholding Requirement

NON-EXECUTIVE DIRECTOR

Non-Executive Directors who directly
receive fees.

MINIMUM SHAREHOLDING
One year’s base fee calculated on the value of
shares held directly or indirectly by the Non-
Executive Director.

TIMEFRAME TO ACHIEVE

Four years from the date of
appointment.

Non-Executive Directors whose fees
are paid to a nominated shareholder.

No minimum shareholding requirement.

No minimum shareholding
requirement.

The shareholding requirement is reviewed annually. 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 2023, 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 in 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. Management monitors trading of all Non-Executive Directors.

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Directors’ report | Remuneration report continued

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 RGC annually monitors conformance
of Non-Executive Directors with this policy. There were no breaches of this policy in 2023.

12. Appendices (Statutory Tables)

12.1 Executive Service Agreements

Table 12.1.1 below sets out the main terms and conditions of the employment contracts of those who were
Executive KMP as at 31 December 2023.

12.1.1 Executive Terms of Service

CEO
IÑAKI BERROETA

Employee notice period

12 months

EXECUTIVE KMP
(EMPLOYED PRIOR TO 1
JANUARY 2022)
6 months

EXECUTIVE KMP
(EMPLOYED AFTER 1 JANUARY
2022)
6 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

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Directors’ report | Remuneration report continued

12.2 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 requirements of the accounting standards, statutory disclosure does not reflect cash received throughout 2023.

12.2.1 Executive Statutory Remuneration

SHORT TERM BENEFITS

NAME

YEAR

BASE CASH
SALARY

STI CASH1

NON-
MONETARY
BENEFITS2

POST-
EMPLOYMENT
BENEFITS

SUPER-
ANNUATION3

OTHER
PAYMENTS

LONG TERM
BENEFITS

PAYMENTS TO BE SETTLED

TERMINATION /
RETENTION /
SIGN-ON
PAYMENTS

LEAVE4

STI TO BE
SETTLED IN
EQUITY5

LTI TO BE
SETTLED IN
EQUITY6,7

TOTAL

PERFORMANCE
RELATED
REMUNERATION

I
Berroeta

A
Belea

J
Boniciolli11

2023 $ 1,975,000 $ 1,336,830 $
2022 $ 1,850,000 $ 857,040 $
2023 $ 773,375 $ 366,772 $
2022 $ 711,667 $ 215,001 $
— $
2023 $ 118,637 $
— $
— $
2022 $

27,622 $
18,196 $
4,166 $
2,821 $
1,489 $
— $

26,346 $
24,430 $
26,846 9 $
24,930 10 $
6,850 $
— $

— $
92,500 8 $
— $
— $
115,000 12 $
— $

501,626 $
(175,538) $
1,125 $
(32,045) $
10,971 $
— $

808,262 $
616,231 $
205,414 $
136,698 $
— $
— $

836,696 $
839,386 $
208,427 $
262,388 $
— $
— $

5,512,382
4,122,245
1,586,125
1,321,460
252,947
—

54 %
56 %
49 %
46 %
— %
— %

1 2023 STI Cash includes actual STI amounts relating to the 2023 STI plan performance year to be paid in 2024. 2022 STI Cash includes actual STI amounts relating to the 2022 STI plan performance year

paid in 2023.

2 Non-monetary benefits are inclusive of any relevant fringe benefits tax and include car parking, medical and health insurance costs, tax support, relocation and permanent residency costs.
3 For Executive KMP employed for the full year, the annual statutory cap has been disclosed. The superannuation amount for KMP not employed for the full year has been disclosed as the amount actually

paid.

4 Leave is calculated based on the movement in Annual Leave and Long Service Leave comparing the accrual at the beginning of FY2023 to the accrual at the end of FY2023.
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 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
(TSR) hurdle and ii) the Black-Scholes model for the Operating Free Cash Flow (OFCF) hurdle.

7 Performance share rights (PSRs) for 2023, subject to meeting hurdles, will vest on 31 March 2026. The total number of PSRs to be allocated was calculated based on the five-day VWAP of $4.99 over the

period of 28 February 2023 to 6 March 2023. The fair value of these rights was determined for the grant date of 11 May using the Black-Scholes model for all hurdles.

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.

10Superannuation 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.

11Represents remuneration received during period as KMP, commencing 13 November 2023.
12Represents an amount paid in 2023, agreed on the Executives appointment with the Company related to the forfeiture of incentives from a previous employer. The payments mirror the timing and at target

value of incentive payments from the previous employer. The actual cash payment is reflected in Table 8.2.1.

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Directors’ report | Remuneration report continued

SHORT TERM BENEFITS

NAME

YEAR

BASE CASH
SALARY

STI CASH1

NON-
MONETARY
BENEFITS2

K
Cooney

J
Rutherford

Subtotal

2023 $ 937,500 $ 427,128 $
2022 $ 900,000 $ 267,793 $
2023 $ 773,500 $ 354,991 $
2022 $ 711,667 $ 212,449 $
2023 $ 4,578,012 $ 2,485,721 $
2022 $ 4,173,334 $ 1,552,283 $

Former KMP
S
Crowley15
G
Dempsey16

Subtotal

— $
— $
2023 $
2022 $
11,284 $
48,333 $
2023 $ 762,667 $ 377,949 $
2022 $ 806,667 $ 241,139 $
2023 $ 762,667 $ 377,949 $
2022 $ 855,000 $ 252,423 $

17,498 $
14,374 $
46,011 $
57,742 $
96,786 $
93,133 $

— $
— $
4,753 $
— $
4,753 $
— $

POST-
EMPLOYMENT
BENEFITS

SUPER-
ANNUATION3

OTHER
PAYMENTS

LONG TERM
BENEFITS

PAYMENTS TO BE SETTLED

TERMINATION /
RETENTION /
SIGN-ON
PAYMENTS

LEAVE4

STI TO BE
SETTLED IN
EQUITY5

LTI TO BE
SETTLED IN
EQUITY6,7

TOTAL

PERFORMANCE
RELATED
REMUNERATION

26,346 $
24,430 $
26,346 $
24,430 $
112,734 $
98,220 $

— $
4,833 $
26,346 $
24,430 $
26,346 $
29,263 $

53,438 13 $
214,063 14 $
— $
— $
168,438 $
306,563 $

14,335 $
(6,923) $
8,973 $
21,969 $

243,794 $
158,752 $
187,541 $
107,330 $
537,030 $ 1,445,011 $
(192,537) $ 1,019,011 $

263,603 $
213,745 $
274,096 $
174,417 $
1,582,822 $
1,489,936 $

1,983,642
1,786,234
1,671,458
1,310,004
11,006,554
8,539,943

— $
— $
176,893 17 $
91,286 20 $
176,893 $
91,286 $

— $
— $
— $
4,610 $
8,918 $
7,267 $
70,657 $ 129,956 18 $ 1,103,875 19 $
152,042 $
80,386 $
33,197 $
1,103,875 $
129,956 $
70,657 $
160,960 $
87,653 $
37,807 $

—
85,245
2,653,096
1,429,147
2,653,096
1,514,392

Total

2023 $ 5,340,679 $ 2,863,670 $ 101,539 $
93,133 $
2022 $ 5,028,334 $ 1,804,706 $

139,080 $
127,483 $

345,331 $
397,849 $

607,687 $ 1,574,967 $
(154,730) $ 1,106,664 $

2,686,697 $
1,650,896 $

13,659,650
10,054,335

47 %
36 %
49 %
38 %
50 %
48 %

— %
32 %
61 %
33 %
61 %
33 %

52 %
45 %

13Represents the accrued portion of an amount paid in September 2023. The amount was agreed on at the time of the Executives appointment with the Company and is related to the forfeiture of incentives

from a previous employer. The payment mirrors the timing and at target value of incentive payments from the previous employer. The actual cash payment is reflected in Table 8.2.1.

14Represents a payment received in 2022 and a portion of the accrual of an amount paid in September 2023. The amount was agreed on at the Executives appointment with the Company and is related to the
forfeiture of incentives from a previous employer. The payment mirrors the timing and at target value of incentive payments from the previous employer. The actual cash payment received in 2023 is reflected
in Table 8.2.1.

15Represents remuneration received during period as KMP, commencing 1 January 2022 and ceasing 31 January 2022.
16Represents remuneration received during period as KMP, ceasing 12 November 2023. STI Cash represent the full period.
17Represents the accrued portion of an amount paid in 2023 for period as KMP. The amount was agreed on at the time of the Executives appointment with the Company and is related to the forfeiture of

incentives from a previous employer. The payment mirrors the timing and at target value of incentive payments from the previous employer. The actual cash payment is reflected in Table 8.2.1.

18Includes deferred equity granted under the 2022 STI Plan that remains on foot but which under accounting standards needs to be fully recognised in this statutory remuneration report.
19Includes performance rights granted under the 2022 LTI Plan and 2023 LTI Plan that remains on foot but which under accounting standards needs to be fully recognised in this statutory remuneration report.
20Represents the 2022 accrual of an amount paid in 2023 for period as KMP. The amount was agreed at the time of the Executives appointment with the Company and is related to the forfeiture of incentives

from a previous employer. The payment mirrors the timing and at target value of incentive payments from the previous employer. The actual cash payment received in 2023 is reflected in Table 8.2.1.

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12.3 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 2023.

12.3.1 Non-Executive Director Statutory Remuneration

SHORT-TERM BENEFITS

POST-EMPLOYMENT
BENEFITS

NAME

YEAR

C Fok

P Klotz

D Massidda1

R Millner

A Moffatt

Dr H Nugent
AC

F Sixt

A Tansey

J Teoh

S Timuray2

TOTAL

2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022

CASH SALARY
AND FEES

450,000 $
$
450,000 $
$
190,000 $
$
173,333 $
$
45,968 $
$
190,000 $
$
148,985 $
$
149,661 $
$
148,985 $
$
149,661 $
$
216,705 $
$
217,688 $
$
190,000 $
$
206,667 $
$
222,651 $
$
228,597 $
$
148,985 $
$
149,661 $
$
124,637 $
$
$
— $
$ 1,886,916 $
$ 1,915,268 $

NON-
MONETARY
BENEFITS

SUPERANNUATION

TERMINATION
BENEFITS

— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $

— $
— $
— $
— $
— $
— $
16,015 $
15,339 $
16,015 $
15,339 $
23,295 $
22,312 $
— $
— $
17,349 $
11,403 $
16,015 $
15,339 $
— $
— $
88,689 $
79,732 $

— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $

TOTAL

450,000
450,000
190,000
173,333
45,968
190,000
165,000
165,000
165,000
165,000
240,000
240,000
190,000
206,667
240,000
240,000
165,000
165,000
124,637
—
1,975,605
1,995,000

1. Diego Massidda ceased his role as a Non-Executive Director on 28 March 2023.
Serpil Timuray was appointed a Non-Executive Director on 29 March 2023.
2.

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Directors’ report | Remuneration report continued

12.4 Equity Movements

Table 12.4.1 provides movements in equity during the financial year for Non-Executive Directors and
Executives who were KMP for all or part of 2023. The numbers in this table reflect equity holdings and
movements only for the period the Non-Executive Director or Executive was KMP.

12.4.1 Equity Movements

NAME

HOLDING AT START OF
TERM AS KMP IN 2023

GRANTED AS
REMUNERATION

PURCHASED/
(SOLD)

BALANCE AT END OF
TERM AS KMP IN 2023

Canning Fok

Pierre Klotz

Diego Massidda1

Serpil Timuray2

Robert Millner

Antony Moffatt

Dr Helen Nugent AC

Frank Sixt

Arlene Tansey

Jack Teoh

Iñaki Berroeta

Ana Belea

John Boniciolli3

Kieren Cooney

Jonathan Rutherford

Grant Dempsey4

—

8,673,058

611,269

28,000

—

25,000

133,258

143,355

—

91,718

15,830

—

16,673

6,852

—

(7,000)

—

8,673,058

611,269

28,000

—

25,000

133,258

235,073

8,830

—

16,673

6,852

—

1. Diego Massidda ceased his role as a Non-Executive Director on 28 March 2023.
Serpil Timuray was appointed a Non-Executive Director on 29 March 2023.
2.
3.
John Boniciolli was appointed a KMP on 13 November 2023.
4. Grant Dempsey ceased as a KMP on 12 November 2023.

Page 61 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

12.5 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:

12.5.1 STI Deferred Share Rights

GRANT DATE

VESTING DATE

EXPIRY DATE

STI Deferred Share Rights

6 May 2021

31 March 2022

31 March 2023

31 March 2024

3 & 5 May 2022

31 March 2023

31 March 2024

3 & 5 May 2022

31 March 2024

31 March 2025

11 May 2023

31 March 2024

31 March 2025

31 March 2026

12.5.2 LTI Performance Share Rights

FAIR VALUE PER
SHARE RIGHT AT
GRANT DATE

NUMBER OF
SHARE RIGHTS AT
GRANT DATE

%
VESTED

$4.80

$5.47

$5.26

$5.41

$5.23

27,355

27,354

113,808

113,805

147,028

147,027

100 %

— %

GRANT DATE

VESTING DATE

EXPIRY DATE

HURDLE

LTI Performance Share Rights

6 May 2021

31 March 2024

31 March 2025

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

11 May 2023

31 March 2025

31 March 2026

31 March 2025

31 March 2026

31 March 2025

31 March 2026

31 March 2025

31 March 2026

31 March 2027

31 March 2026

31 March 2027

31 March 2026

31 March 2027

OFCF

TSR

OFCF

TSR

OFCF

TSR

OFCF

TSR

ROIC

EPS

ESG

FAIR VALUE
PER SHARE
RIGHT AT
GRANT DATE

NUMBER OF
SHARE RIGHTS
AT GRANT DATE

%
VESTED

$4.80

$1.26

$6.54

$2.73

$5.07

$3.02

$5.07

$2.98

$5.06

381,162

381,159

73,751

73,750

299,720

299,716

243,421

576,777

576,773

128,170

— %

Page 62 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

Reconciliation of shares rights and ordinary shares held by KMP

Table 12.5.3 below shows how many share rights were granted, vested and forfeited during the year.

12.5.3 Reconciliation of shares rights and ordinary shares held by KMP

NAME1

GRANT
TYPE2,3

BALANCE AT
START OF
YEAR

GRANTED
DURING
YEAR

NUMBER
OF
RIGHTS
VESTED

VESTED
%

NUMBER OF
RIGHTS
FORFEITED

FORFEITED
%

BALANCE AT
END OF THE
YEAR
(UNVESTED)

I
Berroeta

A
Belea

K
Cooney

J
Rutherford

G
Dempsey

2020 DSR

2021 DSR

2022 DSR

2021 LTI

2022 LTI

2023 LTI

2021 DSR

2022 DSR

2021 LTI

2022 LTI

2023 LTI

2021 DSR

2022 DSR

2021 LTI

2022 LTI

2023 LTI

2021 DSR

2022 DSR

2021 LTI

2022 LTI

2023 LTI

2021 DSR

2022 DSR

2021 LTI

2022 LTI

2023 LTI

27,354

100 %

27,354

128,727

140,523

408,088

486,842

601,202

64,364

31,659

15,830

35,252

102,941

125,263

157,394

33,345

16,673

43,908

132,352

157,894

189,378

13,704

6,852

34,834

44,560

125,263

154,385

157,394

39,538

176,352

50 %

— %

50 %

— %

50 %

— %

64,363

140,523

408,088

486,842

601,202

15,829

35,252

102,941

125,263

157,394

16,672

43,908

132,352

157,894

189,378

6,852

34,834

44,560

125,263

157,394

39,538

154,385

176,352

John Boniciolli commenced as Group CFO on 13 November 2023 and was not eligible for any share right grants in 2023.

1.
2. DSRs includes 2021 and 2022 STI deferred share rights.
3.

LTI includes 2021, 2022 and 2023 performance rights. LTI rights are granted at maximum opportunity for Executive KMP.

Page 63 | TPG Telecom Annual Report 2023

Directors’ report | Remuneration report continued

12.6 Related Party Transactions

There are no related party transactions in 2023 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 26 February 2024.

Fok Kin Ning, Canning

Iñaki Berroeta

Chairman

26 February 2024

Chief Executive Officer and Managing Director

26 February 2024

Page 64 | TPG Telecom Annual Report 2023

Auditor’s independence declaration

Page 65 | TPG Telecom Annual Report 2023

Financial report

About this report

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 27, Tower Two, International Towers Sydney,
200 Barangaroo Avenue, Barangaroo NSW 2000.

A description of the nature of the Group’s operations
and its principal activities is included in the Directors’
report on pages 4 to 64.

The financial report was authorised for issue by the
Directors on 26 February 2024. The Directors have
the power to amend and reissue the financial report.

68
69
70
71

72
72
75
77
79
80
84
84
87
89

Contents
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
Notes to the Consolidated Financial Statements
Note 1. Reporting entity
Note 2. Basis of preparation
Note 3. Segment reporting
Note 4. Revenue from contracts with customers
Note 5. Other profit and loss items
Note 6. Income tax
Note 7. Earnings per share
Note 8. Cash and cash equivalents
Note 9. Trade and other receivables
Note 10. Inventories
Note 11. Derivative financial instruments and
hedge accounting
Note 12. Property, plant and equipment
Note 13: Right-of-use assets and lease liabilities
Note 14. Intangible assets
Note 15.Trade and other payables
Note 16. Borrowings
Note 17. Provisions
Note 18. Other liabilities
Note 19. Contributed equity
Note 20. Reserves
Note 21. Dividends
Note 22. Interests in other entities
Note 23. Related party transactions
Note 24. Share-based payments
Note 25. Commitments and contingencies
Note 26. Parent entity financial information
Note 27. Deed of cross guarantee
Note 28. Financial risk management
Note 29. Auditor's remuneration
Note 30. Events occurring after the reporting
period
Directors’ Declaration
Independent Auditor’s Report

89
92
94
98
102
103
103
105
105
106
107
108
110
111
113
114
116
118
124

124
125
126

Page 66 | TPG Telecom Annual Report 2023

Consolidated income statement
for the year ended 31 December 2023

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

Brand impairment charge

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

Earnings per share for profit attributable to owners of the Company

Basic earnings per share

Diluted earnings per share

2023

2022

$m
5,533
36
(1,580)
(884)
(405)
(428)
(380)

(17)

$m
5,415
438
(1,636)
(974)
(363)
(377)
(368)

—

1,875

2,135

(1,472)
403

(1,389)
746

4
(345)
(341)
62

(13)

2
(189)
(187)
559

(46)

513

2023
CENTS
PER
SHARE

2022
CENTS
PER
SHARE

2.6

27.6

NOTES
4
5

5
5

NOTES

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

Page 67 | TPG Telecom Annual Report 2023

Consolidated statement of comprehensive income
for the year ended 31 December 2023

Profit for the year

Other comprehensive income

NOTES

2023

2022

$m
49

$m
513

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, net of tax

Attributable to:

Owners of the Company

515

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

Page 68 | TPG Telecom Annual Report 2023

Consolidated statement of financial position
as at 31 December 2023

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Derivative financial instruments

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

2023

2022

NOTES

9
12

19
20

116

968

117

114

681

155

—

1,284

1,033

469
3,795

1,709

358
3,580

1,527

12,221

12,663

171

183

18,384

19,668

18,333

19,366

1,174

294

122

1,185

283

1,722

1,732

4,076

2,112

6,329

8,051

3,690

1,872

5,734

7,466

11,617

11,900

18,399
—

(6,782)

11,617

18,399
(3)

(6,496)

11,900

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

Page 69 | TPG Telecom Annual Report 2023

Consolidated statement of changes in equity
for the year ended 31 December 2023

ATTRIBUTABLE TO OWNERS OF THE COMPANY

CONTRIBUTED
EQUITY
$m

RESERVES

ACCUMULATED
LOSSES
$m

TOTAL EQUITY

NOTES

Balance at 1 January 2023
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 2023

Balance at 1 January 2022
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

18,399

—
—

—

—
18,399

18,399
—
—

—

—
18,399

(3)

—
3

(8)

—
—

5
—
2

(14)

—
(3)

(6,496)

11,900

49
—

—

49
3

(8)

(335)
(6,782)

(335)
11,617

(6,684)
513
—

—

(325)
(6,496)

11,720
513
2

(14)

(325)
11,900

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

Page 70 | TPG Telecom Annual Report 2023

Consolidated statement of cash flows
for the year ended 31 December 2023

2023

2022

NOTES

Cash flows from operating activities

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Net cash generated from operating activities

8(b)

Cash flows from investing activities
Payments for property, plant and equipment

Payments for spectrum licenses

Receipts from sale of tower assets

Payments for intangible assets

Loan repayment from Tech2

Interest received

5,725

(4,203)

1,522

5,652

(4,401)

1,251

(862)

(28)

—

(264)

—

(745)

(31)

892

(216)

Net cash outflows from investing activities

(1,150)

(97)

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 increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

3,670

(3,270)

470

(1,070)

(108)

(8)
(319)

(335)

(370)

2
114

116

(123)

(14)
(180)

(325)

(1,242)

(88)
202

114

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

Page 71 | TPG Telecom Annual Report 2023

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 27, Tower Two, International Towers Sydney, 200 Barangaroo Avenue, Barangaroo
NSW 2000. The consolidated financial statements as at, and for the year ended 31 December 2023 (referred to
throughout this report as ‘2023’), comprise the accounts of the Company and entities controlled by the
Company (its subsidiaries) (together referred to as the ‘Group’). Comparative information is for the year ended
31 December 2022 (referred to throughout this report as “2022”) 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 (AASB) 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).

Disclosures in relation to the parent entity required under paragraph 295(3)(a) of the Corporations Act 2001
have been included in Note 26.

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

Comparative information is reclassified where appropriate to enhance comparability.

(a) Going Concern

The consolidated financial statements have been prepared on a going concern basis, which assumes the
Group will be able to realise its assets and discharge its liabilities in the normal course of business.

At 31 December 2023, the Group had a deficiency of net current assets of $438 million (2022: a deficiency of
$699 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 profits, positive operating cash flows, 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). A list of material controlled entities is set out in Note 22.
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 Statement of
Financial Position respectively.

Page 72 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

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.

(d) 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.

(e) 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 73 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(f) 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 but none have had
a material impact on our accounting policies with the exception of:

• AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two

Model Rules.

In June 2023, the AASB made narrow-scope amendments to AASB 112 which provide a temporary relief
from the requirement to recognise and disclose deferred taxes arising from enacted or substantively
enacted tax law that implements the Pillar Two model rules, including tax law that implements qualified
domestic minimum top-up taxes described in those rules.

The amendments also require affected companies to disclose:

• the fact that they have applied the exception to recognising and disclosing information about deferred tax

assets and liabilities related to Pillar Two income taxes

• their current tax expense (if any) related to the Pillar Two income taxes, and

• during the period between the legislation being enacted or substantially enacted and the legislation

becoming effective, known or reasonably estimable information that would help users of financial statements
to understand an entity’s exposure to Pillar Two income taxes arising from that legislation.

At 31 December 2023, the Pillar Two legislation had not been enacted or substantively enacted in Australia
or any jurisdiction where the group operates. There were no current tax expenses related to Pillar Two
income taxes. The Group has applied the exception to recognising and disclosing information about
deferred tax assets and liabilities related to Pillar Two income taxes.

The Group will continue to monitor developments in tax legislation and recognise the impact of the
amendments in the financial statements when applicable.

New standards and interpretations not yet adopted by the Group

Certain new accounting standards and interpretations have been published that are not mandatory for 31
December 2023 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 does not expect a material impact on the Group’s consolidated financial statements.

• Supplier Finance Arrangements (Proposed amendments to AASB 107 and AASB 7)

The amendments introduce new disclosures relating to supplier finance arrangements that assist users of
the financial statements to assess the effects of these arrangements on an entity’s liabilities and cash flows
and on an entity’s exposure to liquidity risk. The amendments apply for annual periods beginning on or after
1 January 2024.

The Group will include disclosures in future years where applicable and in accordance with the
amendments.

Page 74 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 2. Basis of preparation continued

(g) 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:

Recognition of deferred tax assets
Loss allowance on trade and other receivables
Lease terms and incremental borrowing rates

• Note 6
• Note 9
• Note 13
• Note 14 Useful lives of intangible assets
• Note 14 Determination of the Group’s cash generating units
Impairment of intangible assets with indefinite lives
• Note 14

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.

Note 3. Segment reporting

(a) Basis for segmentation

TPG has identified its operating segments based on the internal reports that are reviewed and used by the
Group Chief Executive Officer (being the chief operating decision maker) in assessing performance and in
determining the allocation of resources.

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

Consumer

Enterprise,
Government and
Wholesale

PRINCIPAL ACTIVITIES

Provision of telecommunications services to residential and small office/home office customers.

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

Mobile small and medium-sized enterprise customers have been categorised in this segment.

The Group Chief Executive Officer primarily uses 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 the effects of significant items of income and expenditure which may have an impact
on the quality of earnings such as restructuring, impairment charges and transformation costs.

Unallocated items include net financing costs, depreciation and amortisation costs, certain head office costs,
other income and other one-off expenses. There were no one-off transactions that met the quantitative
thresholds for reportable segments in 2023 and 2022.

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 75 | TPG Telecom Annual Report 2023

ENTERPRISE,
GOVERNMENT
AND
WHOLESALE
$m

ELIMINATIONS

TOTAL
REPORTABLE
SEGMENTS

Notes to the consolidated financial statements continued

Note 3. Segment reporting continued

(b) Information about reportable segments

CONSUMER

For the year ended 31 December 2023

Revenue from contracts with customers

Inter-segment revenue

Segment revenue

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Segment gross margin

Segment EBITDA

For the year ended 31 December 2022

Revenue from contracts with customers
Inter-segment revenue

Segment revenue

Other income

Cost of provision of telecommunication services

Cost of handsets and hardware sold

Segment gross margin

Segment EBITDA

4,525

—

4,525

—

(1,492)

(797)

2,236

1,358

4,417
—

4,417

—

(1,449)

(878)

2,090

1,276

1,008

108

1,116

(194)

(87)

849

583

998
—

998

(185)

(96)

724

490

—

(108)

—

108

—

—
—

—

Reconciliation of segment EBITDA to the Group’s profit before income tax is as follows:

Total segment EBITDA
Other income
Head office costs
Transformation costs
Transaction costs
Brand impairment charge
Gain on sale of tower assets
Depreciation and amortisation expense
Net financing costs
Profit before income tax

2023

$m
1,941
22
(2)
(38)
(31)
(17)
—
(1,472)
(341)

Page 76 | TPG Telecom Annual Report 2023

5,533

—

5,533

(1,578)

(884)

3,085

1,941

5,415
—

5,415

(1,634)

(974)

2,814

1,766

2022

$m
1,766
29
(2)
(60)
—
—
402
(1,389)
(187)

559

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

2023

18,144

240

18,384

2022

$m
18,075

258

18,333

‘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 77 | TPG Telecom Annual Report 2023

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 or partial 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

2023

2022

2023

2022

2023

Mobile – Post-paid

Mobile – Prepaid

Over time

$m
1,489

$m
1,347

482

449

Fixed (including data and internet)

Over time

1,737

1,738

Other service revenue
Handsets, accessories and other
hardware

Over time

Point in time

807

877

$m
184

—

629

101

$m
175

—

$m
1,673

482

2022

$m
1,522

449

634

2,366

2,372

111

901

976

4,525

4,417

1,008

998

5,533

5,415

(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 14 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 $275 million (2022: $278 million).

Contract liabilities

2023

$m
310

2022

$m
301

Page 78 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 5. Other profit and loss items

(a) Other income

Gain on sale of tower assets
Other income

2023

$m
—
36
36

2022

$m
402
36
438

The Group recognised a gain of $402 million from the sale of mobile towers and rooftop infrastructures in the
prior year. Details of the sale are disclosed in Note 13 of the 31 December 2022 annual report.

(b) Employee benefits expense

Superannuation expense
Redundancy costs
Other employee benefits expense

Advertising and promotion expenses
Consulting and outsourced services costs
Facilities expenses
Administration and other expenses

(d) Brand impairment charge

Brand impairment charge

(e) Depreciation and amortisation expense

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

(f) Net Financing costs

Finance income

Interest income

Finance expenses

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

Page 79 | TPG Telecom Annual Report 2023

2023

$m
40
2
386

428

2023

$m
132
161
33
54

380

2023

$m
17

2022

$m
33
18
326

377

2022

$m
122
155
36
55

368

2022

$m
—

—

2023

2022

$m
570
195
707
1,472

$m
554
143
692
1,389

2023

2022

(4)

(2)

10
335

341

6
183

187

Notes to the consolidated financial statements continued

Note 6. Income tax

The consolidated current tax payable or receivable 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

NOTES

2023

Current tax

Current tax on profit / loss for the period

Adjustments for current tax in respect of prior periods

Total current tax expense/ (benefit)

Deferred tax
Decrease in deferred tax assets

Increase in deferred tax liabilities

Adjustments for deferred tax of prior periods

Total deferred tax expense

6(d)

Income tax expense attributable to continuing operations

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

(5)

11
1

—

2022

(44)

(30)

(2)

Profit before tax for the year

2023

$m
62

2022

$m
559

Income tax expense using the Australian tax rate of 30% (31 December 2022: 30%)

168

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

Income tax expense

(5)

—

(2)
13

(212)

72
46

Page 80 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 6. Income tax continued

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% (2022: 30%)

2023

$m
2,275
2,275
683

2022

$m
2,275

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.

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.

Page 81 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 6. Income tax continued

(d) Deferred tax assets and liabilities continued

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 2023, $254 million (2022: $326 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

2023

2022

650

254

570

326

1,134

1,145

(963)
171

(962)
183

Page 82 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 6. Income tax continued

(d) Deferred tax assets and liabilities continued

EMPLOYEE
BENEFITS

DEFERRED
REVENUE

PROPERTY,
PLANT AND
EQUIPMENT
$m

PROVISIONS
AND
ACCRUALS
$m

LEASE
LIABILITIES

TAX
LOSSES

OTHER COPYRIGHT

TOTAL

MOVEMENTS
At 1 January 2023
(charged)/credited

- To profit or loss
At 31 December 2023
At 1 January 2022
(charged)/credited
- To profit or loss

At 31 December 2022

(2)
18

(6)

2
15

(19)

163

(79)
84

12
70

570

326

43 1,145

(72)

(2)

(11)

650

254

41 1,134

416

477

45 1,206

154
570

(151)
326

5
19

(61)
(2)
43 1,145

2023

489

464

(963)
—

2022

436

517

(962)
—

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

MOVEMENTS
At 1 January 2023 (charged)/credited

- To profit or loss

At 31 December 2023

At 1 January 2022 (charged)/credited

- To profit or loss

At 31 December 2022

RIGHT-OF-USE
ASSETS
$m
437

INTANGIBLE
ASSETS
$m
516

489

374

437

(52)
464
564

(48)
516

OTHER

TOTAL

1
10
7

2
9

$m
962

963

945

962

Page 83 | TPG Telecom Annual Report 2023

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 during the year in calculating
basic earnings per share
Weighted average number of ordinary shares during the year in calculating
diluted earnings per share

UNITS
cents

cents

2023

2.6

2022

27.6

513

number

1,856,238,552 1,857,835,988

number

1,857,788,705 1,858,761,611

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 the TPG Employee Incentive Plan Trust. Refer to Note 24 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 2023, $2 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 (2022: $6 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 84 | TPG Telecom Annual Report 2023

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

Impairment of intangibles

Net financing costs

Tower sale gain

Share based payment expense

Other non-operating costs

Movements in operating assets and liabilities:

Increase in trade and other receivables

Decrease/ (increase) in inventories

Increase in other assets

Decrease in deferred tax assets

Decrease in trade and other payables

Increase in contract liabilities

Decrease in other liabilities

Increase/ (decrease) in provisions

Net cash generated from operating activities

Acquisition of right-of-use assets

(d) Net debt reconciliation

2023

2022

513

1,472

1,389

341

—

187

(402)

—

1,894

1,692

(369)

(339)

(5)

(14)

(51)

(60)

(23)

(24)

(30)

(14)

(372)

(441)

1,522

1,251

2023

333

2022

565

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

Lease liabilities

Net debt

2023

$m
116

(4,076)

(2,234)

(6,194)

2022

$m
114

(3,690)

(1,965)

(5,541)

Page 85 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 8. Cash and cash equivalents continued

(d) Net debt reconciliation continued

Net debt at 1 January 2023

Cash flows
Lease acquisitions
Interest unwinding
Lease revaluations and
terminations
Foreign exchange adjustments
Interest rate swaps
Proceeds from borrowings
Repayment of borrowings
Other

Net debt at 31 December 2023

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

Net debt at 31 December 2022

(e) Guarantees

Secured guarantees

Unsecured guarantees

CASH AND CASH

EQUIVALENTS LEASE LIABILITIES

BORROWINGS

$m
114
2
—
—

—

—
—
—
—
—
116

$m
(1,965)
229
(331)
(121)

(34)

—
—
—
—
(12)
(2,234)

$m
(3,690)
—
—
—

—

—
—
(3,670)
3,270
14
(4,076)

CASH AND CASH

EQUIVALENTS LEASE LIABILITIES

BORROWINGS

$m
202
(88)
—
—
—

—
—
—
—
—
114

$m
(1,420)
198
(803)
(75)
144

—
—
—
—
(9)
(1,965)

$m
(4,290)
—
—
—
—

—
—
(470)
1,070
—
(3,690)

TOTAL

$m
(5,541)
231
(331)
(121)

(34)

—
—
(3,670)
3,270
2
(6,194)

TOTAL

$m
(5,508)
110
(803)
(75)
144

—
—
(470)
1,070
(9)
(5,541)

2023

—

2022

—

The Group has provided bankers’ guarantees to support various commercial and regulatory obligations of $51
million (2022: $25 million).

Page 86 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 9. Trade and other receivables

Trade receivables are amounts due from customers for goods and services provided in the ordinary course of
business. Trade receivables are recognised initially at the amount of consideration that is unconditional less a
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 Financial
Instruments (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 were satisfied, the fair value of the current receivables sold were
derecognised from the financial statements. Unsold handset receivables were not derecognised by the Group if
they were yet to satisfy the qualifying criteria required under the risk transfer arrangement with third parties.

TPG did not carry any of its handset related receivables at fair value as at 31 December 2023 (2022: nil).

Page 87 | TPG Telecom Annual Report 2023

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

(b) Handset and accessories receivables

Handset 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.

2023
$m

2022
$m

265

(16)

249

576

115

968

465

469

2023
$m
(17)

(7)

(16)

2023
$m

1,102

(61)

1,041

—

219

(17)

202

377

681

353

358

2022
$m
(20)

(11)

(17)

2022
$m

793

(63)

730

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.

Page 88 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

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

2023
$m
117

2022
$m
155

Inventories expensed in the Consolidated Income Statement during the year ended 31 December 2023
amounted to $843 million (2022: $908 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 the economic relationship between the hedged item and hedging
instrument is maintained.

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.

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.

Page 89 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 11. Derivative financial instruments and hedge accounting continued

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, or is
terminated, 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.

Current assets

Interest rate swaps

Non-current assets

Interest rate swaps

2023
$m

2022
$m

—

The Group enters into interest rate swaps 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, 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 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
2023 and 2022.

Page 90 | TPG Telecom Annual Report 2023

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

2023
$m

2022
$m

2,500
2024-2025

1,000
2024-2025

1:1

—

4 %

1:1

—

n/a

The Group’s hedging reserves disclosed in Note 20 relate to the following hedging instrument:

At 1 January 2022

Change in fair value of hedging instrument recognised in OCI

At 31 December 2022

Change in fair value of hedging instrument recognised in OCI
At 31 December 2023

INTEREST RATE
SWAPS
$m

—

3
5

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

Page 91 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 12. Property, plant and equipment

ASSET CLASS

RECOGNITION AND MEASUREMENT

Property, plant and
equipment

Property, plant and equipment (PP&E) 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.

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
Network & IT equipment and Infrastructure

40 years
3 to 10 years
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.

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 or intangible assets with indefinite useful lives are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. This includes assets under 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. 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 92 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 12. Property, plant and equipment continued

LAND AND
BUILDINGS

LEASEHOLD
IMPROVEMENTS

At 31 December 2021

Cost

Accumulated depreciation

Net book value

Year ended 31 December 2022

Opening net book value

Additions
Transfers in/(out) of other PPE and
intangibles
Disposal

Depreciation

Net book value

At 31 December 2022

Cost

Accumulated depreciation

Net book value

Year ended 31 December 2023

Opening net book value

Additions
Transfers in/(out) of other PPE and
intangibles
Disposal

Depreciation

Net book value

As at 31 December 2023

Cost

Accumulated depreciation

Net book value

(4)

—

(2)

(6)

—

(3)

(10)

116

(99)

—

(8)

(69)

—

(9)

101

(73)

NETWORK & IT
EQUIPMENT AND
INFRASTRUCTURE
$m

ASSETS UNDER
CONSTRUCTION

TOTAL

6,359

(3,655)

2,704

2,704
1101

623

(237)1,3
(502)

2,698

5,956

(3,258)

2,698

2,698
364

744

(38)4
(555)

2,885

5,746

(2,861)

2,885

674

7,192

(33)

(3,791)

641

3,401

641

971

(740)

(1)

(42)

829

3,401

1,081

(110)2

(238)

(554)

3,580

881

6,965

(52)

(3,385)

829

3,580

829

981

(950)

(9)

(3)

3,580

1,017

(185)5

(47)

(570)

848

3,795

917

6,808

(69)

(3,013)

848

3,795

1. The additions of $110 million and disposal of $105 million related to equipment that were accounted for as asset swaps.
2. 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).

3. The network-related towers and rooftops of $132 million were disposed as part of the tower assets sale transaction
4. The additions of $36 million and disposal of $36 million related to equipment that were accounted for as asset swaps.
5. The transfer balance of $185 million was transferred as addition to intangibles ($177 million cost only), and to right-of-use assets for

leases ($8 million cost only).

Page 93 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 13. 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, when they
are considered 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.

(a) 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,
• the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Page 94 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 13. Right-of-use assets and lease liabilities continued

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

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 95 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 13. 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.

Page 96 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 13. Right-of-use assets and lease liabilities continued

(e) Site Sharing Agreements 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

2023

207

1,502

1,709

122

2,112

2,234

2022

182

1,345

1,527

1,872

1,965

• Additions to the right-of-use assets during the 2023 financial year were $333 million (2022: $565 million).

This includes transfers from assets under construction in property, plant & equipment of $8 million (refer to
Note 12).

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 2023 was $270 million (2022: $253 million).

2023

130

195

121

2022

101

143

Page 97 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 14. Intangible assets

ASSET CLASS

RECOGNITION AND MEASUREMENT

Goodwill

Brand names

Computer software

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.

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. All current brand names have
an indefinite useful life.
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.

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.

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.
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.

Acquired customer
base

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.

Indefeasible rights of
use 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.

(a) Amortisation

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

Spectrum licences
Computer software
Contract costs
Customer base
Indefeasible rights of use (IRUs)

9 to 20 years
3 to 8 years
1 to 3 years
8 to 15 years
8 to 15 years

Page 98 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 14. Intangible assets continued

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.

(b) Intangibles assets movement schedule

BRAND
NAMES
$m

SPECTRUM
LICENCES
$m

COMPUTER
SOFTWARE
$m

CONTRACT
COSTS
$m

CUSTOMER
BASE
$m

IRUS GOODWILL TOTAL

425

(1)

424

3,125

(874)

2,251

989

(704)

285

115

(65)

1,689

202

8,515 15,060

(242)

(30)

— (1,916)

1,447

172

8,515 13,144

At 1 January 2022

Cost

Accumulated amortisation

Net book value

Year ended 31 December
2022
Opening net book balance

Additions

Transfers in from PPE

Written-off

Amortisation

424

2,251

285

—

(269)

Net book value

424

2,010

At 31 December 2022
Cost

425

3,153

Accumulated amortisation

(1)

(1,143)

Net book value

424

2,010

Year ended 31 December
2023
Opening net book balance

Additions

Transfers in from PPE
Written-off

Amortisation

Net book value

As at 31 December 2023
Cost

Accumulated amortisation

Written-off

Net book value

424

2,010

—

—
(17)

—

(1)
—

(276)

407

1,737

424

3,160

(17)

407

(1,423)

—

1,737

—

(1)

(160)

188

948

(760)

188

—

178
—

(148)

218

774

(556)

—

218

105

—

(81)

170

(96)

101

—
—

1,447

172

8,515 13,144

—

132

—

(1)

(160)

(22)

—

(692)

1,287

165

8,515 12,663

1,689

217

8,515 15,117

(402)

(52)

— (2,454)

1,287

165

8,515 12,663

1,287

165

8,515 12,663

—

—
—

—

—
—

—

—
—

105

177
(17)

(101)

(160)

(22)

—

(707)

1,127

143

8,515 12,221

202

(128)

—

1,689

217

8,515 14,981

(562)

(74)

—

— (2,743)

—

(17)

1,127

143

8,515 12,221

Page 99 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 14. Intangible assets continued

Refer to Note 12 for the Group’s non-financial asset impairment policy.

(d) 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’).

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.

2023

2022

Consumer CGU
Enterprise, Government
and Wholesale CGU

BRAND NAMES

GOODWILL

TOTAL

BRAND NAMES

GOODWILL

TOTAL

$m
3091

98
407

6,386

6,695

2,129
8,515

2,227
8,922

326

98
424

6,386

6,712

2,129
8,515

2,227
8,939

1) During the year, TPG announced that it would stop the sale of Internode branded products to new customers. As a result, an impairment

was recognised against the brand intangible asset.

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 cannot be subsequently reversed, whereas for identified intangibles
the charge can be reversed where estimates used to determine the recoverable amount have changed.

Page 100 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 14. 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.

Discount rate (pre-tax)

Discount rate (post-tax)

Terminal growth rate

31 DECEMBER 2023

31 DECEMBER 2022

CONSUMER

ENTERPRISE,
GOVERNMENT
AND
WHOLESALE

9.03%

7.65%

3.00%

9.80%

8.05%

3.00%

9.59%

7.65%

3.00%

10.07%

8.05%

3.00%

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.

Page 101 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 15. Trade and other payables

Trade creditors and accruals

Employee benefits related payables

Other creditors

Payables to related parties

(a) Trade creditors and accruals

2023

$m
1,091

2022

$m
1,106

1,174

1,185

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
180 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:

• 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
• past practice gives clear evidence of the amount of the obligation.

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 102 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 16. Borrowings

Borrowings are initially recognised at fair value net of unamortised 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

2023

2022

4,076

3,690

At 31 December 2023, the Group has total loan facilities of $4,960 million (31 December 2022: $4,700 million).
The total amount of undrawn borrowing facilities at 31 December 2023 was $905 million (31 December 2022:
$1,045 million) which includes a committed overdraft facility of $35 million (31 December 2022: $35 million).

In July 2023, the Group refinanced $2,020 million of debt facilities maturing in FY24. The new $2,000 million
syndicated debt facility includes 4, 5 and 7-year tranches. In August 2023, a portion of the proceeds from a
subsequent $500 million 6-year Asian Institutional Loan (Asian Term Loan) were applied to repay and cancel
$220 million of debt maturing in FY26. Included in the loan balance are refinancing costs of $14 million incurred
during the year that will be amortised over the remaining term of the loan.

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 2023.

Note 17. 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 103 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 17. 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 high-quality 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

2023

2022

(f) Movement in provisions (excluding employee benefits)

Balance at 1 January 2023

Additional amounts recognised during the year

Amounts used during the year

Balance at 31 December 2023

DECOMMISSIONING
AND MAKE GOOD

OTHER
PROVISIONS

TOTAL

$m
72

(6)

$m
16

—

$m
88

(6)

Page 104 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 18. Other liabilities

Current

Carrier network payables

Other contract liabilities

Other payables

Non-current
Carrier network payables

Other financial liabilities

Other contract liabilities

Other payables

2023

2022

Other financial liabilities represent amounts arising from sale-and-leaseback transaction accounted as financial
liability under the accounting standards.

Note 19. 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.

Ordinary shares (fully paid)

1,859,341,669

18,399

There were no movements in ordinary shares during the year ended 31 December 2023

2023

2022

2023

2022

Page 105 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 20. 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 24).

The table below provides the number and amount of treasury shares in the share-based payments reserve

Opening balance at 1 January 2023

Shares acquired by the TPG Employee Incentive Plan Trust

Issue of shares under the employee incentive plan

Balance as at 31 December 2023

Opening balance at 1 January 2022

Shares acquired by the TPG Employee Incentive Plan Trust

Issue of shares under the employee incentive plan

Balance as at 31 December 2022

(d) Common control reserve

NUMBER OF SHARES

2,395,453

1,565,136

(333,676)

3,626,913

NUMBER OF SHARES

—

2,395,453

—

2,395,453

(1)

—

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

2023

(1)

(7)

—

(3)

—

2022

$m
2

(1)

(7)

(3)

—

(10)

(3)

Page 106 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 21. Dividends

During the year ended 31 December 2023, the following dividends were paid:

• fully franked final FY22 dividend of $167 million (9.0 cents per fully paid share) was paid on 13 April 2023

(2022: $158 million)

• fully franked interim FY23 dividend of $167 million (9.0 cents per fully paid share) was paid on 11 October

2023 (2022: $167 million)

Subsequent to year end, on 26 February 2024, the Board of directors have declared a fully franked final FY23
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 2023, the dividend has not been provided for in the Consolidated Statement of Financial Position.
The final FY23 dividend has a record date of 15 March 2024 and will be paid on 12 April 2024.

All dividends declared or paid during the year were fully franked at the tax rate of 30%.

The Group does not operate a Dividend Reinvestment Plan.

Dividend franking account

Franking credits available for subsequent reporting periods based on a tax rate of 30% (2022:
30%)

2023

133

2022

277

The above available amounts are based on the balance of the dividend franking account at year-end adjusted
for dividends paid during the year.

Page 107 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 22. 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 material entities that formed part of the Group as at 31 December 2023.

EQUITY HOLDINGS

NAME OF ENTITY
Vodafone Hutchison Spectrum Pty Limited
H3GA Properties (No. 3) Pty Limited
Vodafone Foundation Australia Pty Limited
Vodafone Australia Pty Limited
Mobile JV Pty Limited
AAPT Limited
A.C.N. 139 798 404 Pty Ltd
Adam Internet Holdings Pty Ltd
Agile Pty Ltd
Chariot Pty Ltd
Chime Communications Pty Ltd
Vision Network Pty Limited
iiNet Limited
Internode Pty Ltd
Intrapower Pty Limited
Intrapower Terrestrial Pty Ltd
Orchid Cybertech Services Incorporated
PIPE International (Australia) Pty Ltd
PIPE Networks Pty Limited
PIPE Transmission Pty Ltd
PPC 1 (US), Inc.
PPC 1 Limited
Soul Communications Pty Ltd
Soul Pattinson Telecommunications Pty Limited
TPG Telecom Foundation
TPG Corporation Limited
TPG Finance Pty Limited
TPG Holdings Pty Limited
TPG Internet Pty Ltd
TPG Network Pty Ltd
TransACT Capital Communications Pty Ltd
TPG Telecom Employee Share Trust
TransACT Communications Pty Limited
Trusted Cloud Pty Limited
Value Added Network Pty Limited
Neighbourhood Cable Unit Trust

NOTES
2
1
3
2
2
2
2
2
2
2
2
2
2
2
2
2

2
2
2

2
2

2
2
2
2
2
2
4
2
2
2
5

COUNTRY OF
INCORPORATION
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Philippines
Australia
Australia
Australia
USA
Bermuda
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

2023
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99.99
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
—

2022
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99.99
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

This company is exempt from financial reporting requirements and does not form part of the deed of cross guarantee and is
recognised as a small proprietary company.
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 2023 (to the extent they apply).
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.
TPG Telecom (TPG) Employee Share Trust was established for the purpose of subscribing for, acquiring and holding shares in TPG
for the benefit of employees, and to ensure TPG does not contravene the Corporations Act 2001 (Cth) Section 259A in relation to the
direct acquisition of the TPG’s own shares. Shares acquired are held by the Trustee on the terms and conditions of the trust deed.

5. Neighbourhood Cable Unit Trust was deregistered on 19th December 2023.

Page 108 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 22. 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 12.

The following is a list of all entities accounted for using the equity method as at 31 December 2023.

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
Australia
Australia
Australia
Australia

EQUITY HOLDINGS

2023
%
50
50
50
50
50

2022
%
50
50
50
50
50

Page 109 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 23. Related party transactions

(a) Parent entity

TPG Telecom Limited is the head entity of the Group. Further information is detailed in Note 26.

(b) Interests in other entities

Material interests in other entities are set out in Note 22.

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

(d) Transactions with related parties

Purchases of goods and services

Purchases of equipment

Service expense

Roaming expense

Provision of services

Service income

Roaming income

Other transactions

Office rental

2023

$'000

2022

$'000

10,193

8,841

228

608

345

207

(155)

398

4,262

2,758

15,636

12,049

2023

$'000

2022

$'000

—

44,658

12,027

815

46,270

10,355

1,025

1,819

1,097

2,527

3,013

1,728

Transactions with related parties include purchase and sale contracts with entities controlled by, or associated
with the Group’s substantial shareholders. All transactions were made at arms-length, 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

2023
$'000

2,497

5,350
5,350

2022
$'000

1,445

7,030

Page 110 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 24. 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. 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 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 2023 is 3,626,913, acquired at an average price of $5.73 per share (31 December 2022:
2,395,453 shares held, acquired at an average price of $5.94 per share).

The remuneration report sets out the details relating to the TPG share plans (pages 34 to 47), with details of
the LTI performance share rights (pages 44 to 47) and deferred share rights (pages 34 to 43) 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 $7,946,830 (31 December 2022:
$4,808,000).

(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).

The number of rights granted or outstanding during the year ended 31 December 2023 are set out below.

At 1 January

Granted during the year

Vested during the year

Forfeited during the year
At 31 December1
Weighted average of contractual life of all performance share rights
outstanding

All awards granted during the year have an exercise price of nil

31 DECEMBER 2023

31 DECEMBER 2022

NUMBER OF RIGHTS NUMBER OF RIGHTS
1,160,407

2,533,904

1,664,239

1,373,497

—

4,198,143

2,533,904

1.25 years

1.75 years

Page 111 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 24. Share-based payments continued

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 December 2023 have been
performed by an external independent valuer using Return on invested capital (‘ROIC’), Earnings per share
(‘EPS’) and Environmental, social and governance (‘ESG’). Performance Share Rights with a market vesting
condition (for example, Total Shareholder Return ‘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, ROIC) considers the likelihood that the vesting condition will be met.

ROIC, EPS and ESG hurdles – 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.

The model inputs for performance share rights granted during the years ended 31 December 2023 and 31
December 2022 included:

GRANT DATE

Share price at Grant Date

Risk-free rate

Dividend yield

Effective life

Exercise price

TPG price volatility

11-MAY-23

3-MAY-22

5-MAY-22

$5.58

3.07 %

3.40 %

2.90

Nil

30 %

$5.66

2.98 %

3.80 %

2.90

Nil

30 %

$5.66

2.92 %

3.80 %

2.90

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 - 2023

GRANT
DATE
11-May-2023

PLAN
LTI 2023-2025

EXPIRY DATE
31-Mar-2027

HURDLE
ROIC

11-May-2023

LTI 2023-2025

31-Mar-2027

11-May-2023

LTI 2023-2025

31-Mar-2027

EPS

ESG

Consolidated - 2022

GRANT
DATE
3-May-2022

PLAN
LTI 2022-2024

EXPIRY DATE
31-Mar-2026

HURDLE
OFCF

3-May-2022

LTI 2022-2024

31-Mar-2026

TSR

5-May-2022

LTI 2022-2024

31-Mar-2026

OFCF

5-May-2022

LTI 2022-2024

31-Mar-2026

TSR

FAIR VALUE PER
PERFORMANCE SHARE
RIGHT AT GRANT DATE

$5.06

VESTING
SHARE
PRICE
DATE
$5.58 31-Mar-2026

$5.06

$5.58 31-Mar-2026

$5.06

$5.58 31-Mar-2026

FAIR VALUE PER
PERFORMANCE SHARE
RIGHT AT GRANT DATE

$5.07

VESTING
SHARE
PRICE
DATE
$5.66 31-Mar-2025

$3.02

$5.66 31-Mar-2025

$5.07

$5.66 31-Mar-2025

$2.98

$5.66 31-Mar-2025

Page 112 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 24. Share-based payments continued

The Group offers a short-term incentive scheme to executives who receive 50% of the annual STI achieved in
cash and 50% in the form of rights to deferred shares of TPG Telecom (55% cash and 45% deferred share
rights in 2022). 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 ($4.99 for rights granted on 11 May 2023 and $5.70 for the rights granted in 2022).

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 25. Commitments and contingencies

(a) Capital commitments

2023

2022

NUMBER OF SHARES

590,983

915,872

(306,321)

(5,719)

1,194,815

NUMBER OF SHARES
54,709

563,629

(27,355)

—

590,983

0.59 years

0.58 years

Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities
is as follows:

Property, plant & equipment

Spectrum acquisition

2023

427

128

555

2022

454

—

454

In November 2023, the group acquired new licenses in the 3.7 GHz spectrum brand for a total of $128 million
as part of the Australian Communications and Media Authority’s (ACMA) spectrum auction. These licenses
were paid in January 2024.

Page 113 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 26. Parent entity financial information

The Company’s investments in subsidiaries 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 includes certain transactions and balances of other Group entities as
they operate under an agency agreement.

Tax consolidation legislation

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 current 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

2023

2022

1,268

20,351

21,619

1,498

7,636
9,134
12,485

812

19,813

20,625

1,497

6,521
8,018

12,607

18,399

(4)

(7,389)

1,479
12,485

(1)

(7,389)

1,598
12,607

216
219

249
251

Page 114 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 26. Parent entity financial information continued

(b) Guarantees entered into by the parent entity

Unsecured

2023

$m
46

2022

$m
18

Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities
is as follows:

Property, plant & equipment

2023

$m
427
427

2022

$m
454

454

Page 115 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 27. Deed of cross guarantee

The parties to the deed of cross guarantee are those as disclosed in Note 22. 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

Brand impairment charge

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

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

2023

$m
5,533

2022

$m
5,415

438

(1,578)

(1,635)

(884)

(405)
(381)

(17)

(434)

(974)

(359)
(334)

—

(421)

1,870

(1,457)

2,130

(1,374)

413
4

(345)

(341)

72
(12)

756
2

(189)

(187)

569
(45)

524

526

2023

$m
(6,476)

(335)

2022

$m
(6,675)

524

(325)

(6,751)

(6,476)

Page 116 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 27. Deed of cross guarantee continued

Set out below is the consolidated statement of financial position for the deed of cross guarantee.

2023

111

765

117

2022

112

834

155

—

1,076

1,183

468

3,744

1,708

357

3,518

1,503

12,079

12,556

171

183

18,189

19,265

18,139

19,322

740

294

121

1,125

283

1,288

1,672

4,076

2,112

6,329

7,617

3,690

1,868

5,730

7,402

11,648

11,920

18,399

—

(6,751)

11,648

(3)

(6,476)

11,920

ASSETS

Current assets
Cash and cash equivalents

Trade and other receivables

Inventories

Derivative financial instruments

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

Page 117 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management

The Group’s activities are exposed to a variety of financial risks which include market risk (including interest
rate and foreign currency risks), 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 relevant criteria are met, hedge accounting is applied which removes the accounting and economic
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.

■ Interest rate risk

The Group has cash balances placed with reputable banks and financial institutions which generate interest
income for the Group.

The Group’s bank borrowings 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

2023

4,090

—

4,090

PERCENTAGE OF
TOTAL LOANS

100 %

— %

100 %

2022

3,690

—

3,690

PERCENTAGE OF
TOTAL LOANS

100 %

— %

100 %

Page 118 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management continued

(a) Market risk continued

■ 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 61% (2022: 0%) of the variable loan
principal outstanding as at 31 December 2023.

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 2023, 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

2023

(14)

2022

(13)

EQUITY1
2023

(14)

2022

(13)

This is a result of the net changes in interest expenses net of income tax expenses.

■ Foreign currency risk

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

2023

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 gain/ (loss)

2023

2022

(10)

Page 119 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management continued

(a) Market risk continued

■ Foreign currency risk 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

2023

2022

EQUITY

2023

(2)

(1)

(2)

2022

(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.

(b) 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.

CURRENT

1-30 DAYS
PAST DUE

31 TO 60
DAYS PAST
DUE

61 TO 90
DAYS PAST
DUE

MORE THAN 91
DAYS PAST
DUE

22.2

16.7

23.1

TOTAL

265

At 31 December 2023

Expected loss rate

Gross trade receivables

Loss allowance

At 31 December 2022
Expected loss rate

Gross trade receivables

Loss allowance

3.7

189

3.8

161

6.3

8.1

17.0

30.0

82.0

219

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 120 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management continued

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. Treasury aims at
maintaining flexibility in funding by keeping committed credit lines available with a variety of counterparties.
Surplus funds are generally placed on deposit.

Contractual maturities of financial liabilities

The contractual maturities of the Group’s financial liabilities were as follows:

LESS THAN
6 MONTHS

6-12
MONTHS

BETWEEN
1-2 YEARS

BETWEEN
2-5 YEARS

FINANCIAL LIABILITIES

OVER 5
YEARS

TOTAL
CONTRACTUAL
CASH FLOWS
$m

CARRYING
AMOUNT OF
LIABILITIES
$m

At 31 December 2023
Non-derivatives

Trade and other
payables
Borrowings
Lease liabilities

At 31 December 2022
Non-derivatives

Trade and other
payables
Borrowings

Lease liabilities

1,174

58
125

1,357

1,185

1,364

—

169
120

289

—

103

109

212

—

208
237

445

—

1,174

3,345
704

4,049

1,079
2,178

3,257

4,859
3,365
9,398

4,076
2,234

7,484

—

2,111

1,854

204

578

2,315

2,432

—

2,024

1,185

4,157

3,005

8,347

3,690

1,965

6,840

(d) 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.

Page 121 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management continued

(e) 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.

The following table presents the Group’s financial assets measured and recognised at fair value at 31
December 2023 and 31 December 2022 on a recurring basis:

At 31 December 2023

Financial assets

Interest rate swaps

Total financial assets

At 31 December 2022

Financial assets

Interest rate swaps

Total financial assets

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

—

There were no financial liabilities measured and recognised at fair value at 31 December 2023 and 31
December 2022.

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 2023 (2022: nil).

Page 122 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 28. Financial risk management continued

(f) 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 prudent capital structure.

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

2023

$m
116

—

(4,076)

(122)
(2,112)

(6,194)

2022

$m
114

—

(3,690)

(93)
(1,872)

(5,541)

11,617

11,900

0.53

0.47

Page 123 | TPG Telecom Annual Report 2023

Notes to the consolidated financial statements continued

Note 29. Auditor's remuneration

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 statutory financial statements

Other assurance services required by legislation
Other assurance services

Other statutory assurance services

Non-audit services

2023

$'000

2022

$'000

2,788

2,365

420
179

18
3,405
—

3,405

310
189

2,882

—

2,882

In accordance with advice received from the Audit and Risk Committee, the Directors are satisfied that the
provision of non-audit services provided by PwC is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The Directors are satisfied because the Audit and Risk
Committee or its delegate, in accordance with the pre-approved policies and procedures, has assessed each
service, having regard to auditor independence requirements of applicable laws, rules and regulations, and
concluded that the provision of each service or type of service would not impair the independence of PwC.

Note 30. 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.

Dividends declared

The details of dividends declared after 31 December 2023 are disclosed in Note 21.

Page 124 | TPG Telecom Annual Report 2023

Directors’ declaration

In the Directors’ opinion:

(a) the financial statements and notes are in accordance with the Corporations Act 2001, including:

(i)

(ii)

complying with Accounting Standards, the Corporations Regulation 2001 and other mandatory
professional reporting requirements, and

giving a true and fair view of the Group’s financial position as at 31 December 2023 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

closed group identified in Note 22 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 22 and 27.

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

Iñaki Berroeta

Chairman

26 February 2024

Chief Executive Officer and Managing Director

26 February 2024

Page 125 | TPG Telecom Annual Report 2023

Independent auditor’s report

Page 126 | TPG Telecom Annual Report 2023

Independent auditor’s report continued

Page 127 | TPG Telecom Annual Report 2023

Independent auditor’s report continued

Page 128 | TPG Telecom Annual Report 2023

Independent auditor’s report continued

Page 129 | TPG Telecom Annual Report 2023

Independent auditor’s report continued

Page 130 | TPG Telecom Annual Report 2023

ASX additional information

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 9 February 2024. As at
that date, there were 1,859,341,669 ordinary shares held by 23,014 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

NUMBER OF ORDINARY SHARES IN WHICH A
RELEVANT INTEREST IS HELD*

ISSUED CAPITAL

CK Hutchison Holdings Limited and its
subsidiaries1
Vodafone Group Plc and its subsidiaries1
Vodafone Hutchison (Australia) Holdings
Limited1
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

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.
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.
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 9 February 2024 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

11,663

7,904

1,908

1,428

111

4,721,053

20,010,481

13,878,890

33,549,342

1,787,181,903

23,014

1,859,341,669

0.25

1.08

0.75

1.80

96.12

100.00

The number of shareholders holding less than a marketable parcel of ordinary shares is 1,601.

Page 131 | TPG Telecom Annual Report 2023

ASX additional information continued

Twenty largest shareholders (as at 9 February 2024)

NAME OF SHAREHOLDER

NUMBER OF ORDINARY
SHARES HELD

% OF CAPITAL HELD

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

CITICORP NOMINEES PTY LIMITED

TSH HOLDINGS PTY LTD

VICTORIA HOLDINGS PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

VICTORIA HOLDINGS NO 3 PTY LTD

NATIONAL NOMINEES LIMITED

VICTORIA HOLDINGS NO 1 PTY LTD

VICTORIA HOLDINGS NO 2 PTY LTD

J S MILLNER HOLDINGS PTY LIMITED

BNP PARIBAS NOMS PTY LTD

TSH HOLDINGS NO 1 PTY LTD

TSH HOLDINGS NO 2 PTY LTD

FARJOY PTY LTD

BKI INVESTMENT COMPANY LIMITED

517,345,024

237,544,846

207,092,576

130,235,619

86,627,652

68,823,261

68,278,498

66,654,913

64,970,698

12,625,118

11,265,472

9,468,839

7,220,199

6,741,118

6,312,559

6,254,236

5,748,362

27.82

12.78

11.14

7.00

4.66

3.70

3.67

3.58

3.49

0.68

0.61

0.51

0.39

0.36

0.34

0.31

Unquoted equity securities

As at 9 February 2024, the number of unquoted equity securities is:

UNQUOTED EQUITY SECURITIES

NUMBER OF SECURITIES NUMBER OF HOLDERS

1,736,082,964

93.37

Performance rights

Deferred share rights

Stock exchange

4,198,143

1,190,112

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 132 | TPG Telecom Annual Report 2023

ASX additional information continued

Principal Registered Office

Share Registry

Level 27, Tower Two, International Towers Sydney
200 Barangaroo Ave

Barangaroo NSW 2000

Telephone: 133 121

Email: investor.relations@tpgtelecom.com.au

Website: tpgtelecom.com.au

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

Disclaimer
Forward-looking statements

Forward-looking statements, opinions and estimates provided in this report are based on assumptions and
contingencies which are subject to change without notice, as are statements about market and industry trends,
which are based on interpretations of current market conditions. Forward-looking statements, including
projections, guidance on future earnings and estimates, are provided as a general guide only and should not be
relied upon as an indication or guarantee of future performance.

Investors should form their own views as to these matters and any assumptions on which any forward-looking
statements, estimates or opinions are based. Except as required by applicable laws or regulations, TPG
Telecom does not undertake to publicly update or revise any forward-looking statements to reflect any change
in expectations, contingencies or assumptions, whether as a result of new information or future events. To the
maximum extent permitted by law, none of TPG Telecom, its directors, employees or agents, nor any other
person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any
loss arising from the use of the information contained in this report.

Glossary

TERM

EXPLANATION

Adjust NPAT

Statutory Net Profit After Tax adding back transformation and transaction costs, customer base
intangible amortisation, spectrum amortisation and non-cash tax expense.

AMPU

ARPU

Capex

Average Margin Per User.

Average Revenue Per User.

Cash invested to fund the purchase, upgrade or improve long term assets.

EPS (LTIP basis)

Long Term Incentive Plans (LTIP) basis Earnings Per Share measures statutory NPAT adjusted by
adding back customer base amortisation and material one-offs (subject to discretion of the Board),
and divided by weighted number of shares on issue.

Group

Opex

EBITDA

NPAT

OFCF

ROIC

the Company and entities controlled by the Company (its subsidiaries)

Operating expenses.

Earnings before interest, income tax expense, depreciation and amortisation.

Net Profit After Tax - the total revenue minus all expenses and tax.

Operating Free Cash Flow measures cash flow from operations less capex, finance lease
repayments and finance lease interest (within cash flow from financing activities). It does not include
payments for spectrum and dividends and excludes any loan payments/drawdowns.

Return on Invested Capital measures net operating profit after tax (NOPAT) adjusted to remove
customer base amortisation, divided by average invested capital excluding goodwill, brand and
customer base intangibles.

Spectrum

Radio frequency spectrum is where radio waves are transmitted and received.

Page 133 | TPG Telecom Annual Report 2023