Financial, Sustainable and Corporate Social Responsibility Analysis of Telstra Corporation Ltd.

This assignment provides an analysis of Telstra Corporation Ltd.'s financial, sustainable and corporate social responsibility performance. It discusses the company's strategies, financial performance, environmental performance, and more. The analysis aims to help investors decide whether to invest in the company or not.

Telstra Corporation
Ltd.

1
By student name
Professor
University
Date: 27th May 2018.
[Type here]

2
Executive Summary
In this assignment, we shall discuss about the financial/ economic, sustainable and the corporate social
responsibility of Telstra. We shall come to know as to how the strategies are being planned and measures
adopted in order to attract and retain the employees. We shall see the measures adopted for the
environment conservation. The gradual increase in the income and development of Telstra shall be
graphically analysed with the help of various snapshots of the income and expenditure statements,
balance sheet, as well as the EPS. With the help of all these factors, we shall conclude whether to invest
in the company or not. If the investment made, would be profitable or would it lead to loss.
CONTENTS:
[Type here]

3
Introduction...........…………………………………………………………………..........…....4
Analysis………………………………………………………………………………………….4-15
Financial Performance………………………………………………………………...6
Environmental Performance…………………………………………………….........9
Social Performance.......................……………….........................................................13
Conclusion.......................………………....................................................................................15
References......................………………......................................................................................
Introduction
[Type here]

4
Telstra Corporation Ltd. has its operation in telecommunication networks and deals in internet, mobile
phones, television, etc. It is Australia’s biggest telecommunication company. It is now has become
completely private as going through more developments to become more focused on customer with the
guidance of prior Chief Executive Officer named, David Thodey. The company has been operations since
ages and have been delivering quality performances to the client. There have been a lot of analysis
already done on the overall feasible status of the company and how they have been working to provide
the best results. We are here to discuss about the economic/ financial, social and environmental
performance of Telstra Corporation Ltd. The annual report of the company has been downloaded and
important analysis have been done (Telstra, 2016). Important points based on the environmental, financial
and social status of the company has been stated and also it has been recommended on the approach of the
investors of the company their in. We shall analyse both the annual (financial) as well as sustainable
reports to understand whether to invest in the company’s share or not.
Analysis:
 Purpose: The purpose is to develop bright connected future for consumers. It is aimed to provide
them with best services at affordable prices and to improve the present status of the company by
expanding the business to other parts of the world (Alexander, 2016).
[Type here]
Strategy
The strategy is to target on growth and value adding in the
Shareholders wealth. It has 3 parts.
To improve consumer
support
To earn value and growth from
the bottom
To setup new
growth businesses

5
 Vision: The old techniques and telecommunications are clashing and the innovation of
technologies is increasing. The company aims to bring in renovation in the present strata and
improve it so that customers can take full advantage of this in times to come. Technology has
evolved so much and day by day new innovations are happening hence it is imperative that the
company must offer people more advanced services which they can use and that would lead to
better results in the future. Hence the aim is to improve the present condition of the
telecommunication services that are offered and to provide more refined services.
 Improve Customer Advocacy:
To improve the customer advocacy, is the utmost priority and primary objective of Telstra. With the
provision of great services to customers, Telstra means that it shall change the perspective about the
customer thinks of us. They in turn will act like advocates and shall refer us to others as well.
Likewise the market shall prosper in the economy. The following initiatives are taken for customer
advocacy:
 Improvement in customer service.
 Improving the process of order.
 Growth in online services
 Interacting in different languages.
 More value to customers.
 Growing the Telstra wifi plan.
 Offering of more music.
 Entertaining by providing the live football passes and rewards.
 Introduction of new technologies.
 Always check-in with customers.
 Seeking feedbacks for improvement.
[Type here]

6
So, we can say based on overall analysis of the strategies of the company that they aim to improve the
current status of the technology based cellular services that are offered and to provide more refined
services that would provide faster communication for this they have developed the above plans and
strategy that would help them in achieving this in the lesser time possible and would lead to long term
growth and development on part of the customers by providing them with class services (Bromwich &
Scapens, 2016). Thus, we can say that these strategies are developed keeping in view long term gains and
long-term development and not short term development. The company has also taken help from experts
who can help them in this regard, and help them in framing strategies for the company.
 Financial Performance:
This deals with the overall financials of the company based on their financial statements of the
company, on the overall net profit and taxes related to the company. The financial performance of the
company is very important, the investors depends upon this to decide whether they want to invest in the
company or not and the overall gains they are going to make from it. In this analysis the annual report of
the company has been downloaded and the overall financials have been studied to judge how much profit
the company is making, how much growth have they achieved since previous years and what are the areas
in which they need to put more effort so that in future the overall return for the company is high. This is
how this system works and it leads to provide better insights into the overall financial position of the
company with respect to its financial data (Belton, 2017).
The capital management strategy holds a clear focus for maximising the profitability of shareholders,
to maintain the finance strength, and to hold financial flexibility. It notifies that it would return up to
around $1.5 billion capital to stakeholders, forgoing a $1.2 billion of the share in market for buy back and
$250 million on-market share buy-back. The buy-backs are supposed to be financed from the excess cash
of Telstra accumulated profits.
The performance of financial in the year 2016 are:
 Increment in total income of 3.6% to $27.1 billion
 EBDITA lowered 0.6% to $10.5 billion.
 Increment in total income of 6.3% to $28.3 billion,
 Increase in EBDITA 2.6% to $11 billion and
 Free cash flow resulted in $4.8 billion.
 Increase in net profit post tax by 35.9% to $5.8 billion.
[Type here]

7
 EPS increased from 37.4% to 47.4%.
 Addition of 560000 domestic retail mobile customer services and 235000 of domestic retail fixed
broadband consumers.
 The subsidiary Ooyala intelligent video of $246 million got impaired.
 $1.8 billion profit earned on the sale of Automobile shares.
 56% reduced greenhouse gas emission intensity.
 533 people with disability given employment are supported through workforce program.
 58% of all customers’ services are resolved online.
 $1.3 billion is invested in the mobile business (Das, 2017).
 The services of network application and business grew by 14.3%.
 Achieving a sustainable engagement score of 71% with 80% response from people.
 Giving away more than 20k mobile phones to those women impacted by family violence.
 4G services spreading and reaching to 98% population in Australia.
 Dividend pay-out of 31% per share in the current year (FY16).
We have provided here a snapshot of the company’s financial position as of FY16. We also have a
comparability of the current year report with the prior year report summary of the same company. With it,
we shall have a specific picture of the data and information related to each income and expenditure
statements, the assets and liabilities of the company. Furthermore, we can also see as to how it has an
impact on the Earnings per share of the company with regards to the current year in comparison with the
prior year. We can see that the value of Current year EPS is higher than the prior year. This shows that it
is revenue generating company and investment decision in Telstra shall hold good. However, along with
the financial position and performance, we shall also consider the major parameters of social as well as
environmental performance of the company as well (Dichev, 2017).
[Type here]

8
[Type here]

9
Based on the overall financial analysis it can be said that since previous years the company has shown
great amount of growth and that is visible from the overall financials of the company when we compare it
with the previous year financials of the company (Farmer, 2018). On the sustainability front also, the
company has taken effective steps and that is evident from the overall reduction in the greenhouse gases
of the company, it is also evident from the reduction of carbon emission, thus we see that the company is
trying to perform as per the energy standards that have been set as palpable and correct by authorities.
[Type here]

10
This has effect on the financials of the company. The overall share prices of the company have improved
and thus investors have
A great deal based on which they can invest in the financials of the company and that can earn them huge
returns.
 Environmental Performance:
Environment Strategy:
The environment strategy lays down the solution for how to address all the issues related to environment
and its opportunities. This strategy aims to enhance the performance of environment for the operations
and the shareholders to the whole value chain. The Telstra’s strategy has 3 focus. These are:
1. Environmental Consumer Value Hypothesis:
Evaluating the quantity and educating how the services and products can make the customers to reduce
the effect on environment, specially the energy consumption, and carbon emissions. This will help in
understanding what are the main reasons because of which emissions are happening in the environment
and how they can reduce it. It is important to find the source and then only efforts can be taken which can
help the management of the company, and then customers can be educated to reduce energy emission
from those sources as those would help them in getting a sustainable environment (Farmer, 2018).
2. Excelling in Operations:
Staying super active in locating and lowering the huge environmental impacts and the costs related to
operation of the businesses. This will help in putting the framed strategies to operations and that would be
helpful in the long run, as that would help in reducing cost and generating operational results. For this
proper budgeting needs to be done, experts need to be hired who have good knowledge about this matter
and then applying them so that all of these operations can begin for long term results (Goldmann, 2016).
3. Sustainable Supply Chain:
[Type here]

11
Joining hands with suppliers and making them to lessen the major impact affecting the society and
environment, with the products and services provided by them to the Telstra. This is a very important step
this will help the company in getting help from suppliers who can help them in creating such products and
taking such steps that would help them in reducing the overall emission of gases and providing quality
products to the customers (Telstra, 2016). This supply management is a very important task, developing a
connection with the suppliers and getting them to deliver what the management really requires is
important for the long-term success of the company and will help to reach to their goals in the best ways
possible. Experts can be appointed who can help the management in managing these supply chains and
regulate them effectively.
Environmental Customer Value Proposition:
a. Designing and Developing of Green product:
To embed into the designing and development of current products and services all of the environment
consciousness. It is important that all products that are build should match up to the environmental
standards and should be in that limit as set by the environmental authorities and it should not lead to too
much emission of gases and other harmful gases in the environment.
b. Awareness of the benefit of environment of ICT:
It relates to communicating the advantages to environment with the goods and services that is being sold.
The customers should know what they are using and how much harm can it cause to the environment to
which it is being served and how they should use it so that in future it will lead to sustainable use and
protect the environment from all kind of harms. Awareness should be spread so that the customers are
aware about the steps that the company is taking to protect the environment from all kind of harms.
c. Innovating the environment:
It helps in introducing new products and services that leads to the advantage of environment. The
company needs to make use of technology to see how they can reduce the harmful effect on the
environment, develop new strategies that would help them in the long run to protect the environment. For
this the company needs to do a lot of research and innovation and make use of the resources that they
have to deliver the customers the best products which is both environment friendly and as per the needs of
the people who are using it (Kuhn & Morris, 2016).
d. Advantages of cloud to the environment:
[Type here]

12
The research has been completed that was due to be introduced in the end of 2016 that determines all the
chances that could be obtained from the cloud services. The name of the report being “Connecting with
the cloud, a low-carbon future is ahead” that shall enhance the financial and environmental advantages to
Telstra’s Australian paved and sharing of the services of cloud. It is one of the biggest steps that has been
taken by the company based on its CSR policies and helps them in long run to get the best environment
friendly results for future growth and development. Cloud is thus one of the most greatest innovations for
the company.
Use of Energy and its efficiency:
a. E-waste:
To lessen by providing more chances and education of reusing, reutilizing, and recycling and to
ensure that the appropriate practices of disposal is considered. E-waste is one of the highest rising
waste elements that has been increasing since the recent times, as there has been overall increase in
the use of technology, fuels and other such elements that has led to increase in the waste and is
harming the environment in which the company is operating (Kangarluie & Aalizadeh, 2017).
b. Renewal of Energy:
To ensure that there is reduction of emission of energy and finding of more opportunities for the
renewal sources of energy. Energy is a very rare resource hence effort must be taken to protect it so
that in future enough of it is left for the people to use. Thus, for that reason renewal of the energy
based resources are required as they would suffice the needs of the future generation.
c. Efficiency of Energy:
To enhance the efficiency of energy of the data centres, workplace, ICT Equipment, the architect of
networks, the buildings of network, etc. energy can be used for a variety of purpose, but given that it
is a rare resource, people should take efforts to make sure that they are using it efficiently and there is
no loophole and wastage in that. The less there will be wastage the better it would be for future.
d. Emissions of Green House gas:
The Green House Emission rate has dropped by 56% from the bassline year i.e. 2014, which reflects
that the target has been achieved one year before than it was estimated. Thus, if the company keep
working in this zone, they would be able to reduce the overall emission of the gases to a large extent
[Type here]

13
and that would ensure that their overall CSR goals have been met and the management of the
company can also take efforts so that in future the overall reduction is more.
Use of Resource, waste and e-waste:
The ICT gives away a broad range of social, economic and environmental benefits. A digitalised era
provides more opportunities to stay, work, operate more effectively and interacting with people. As
and when with the gradual increment in e-waste, we are being responsible to go through our value
chain to derive more chances and plans so that we can introduce a more sustainable manner to
maintain our resources, wastage and e-waste (Sithole, et al., 2017).
[Type here]

14
a. Waste Management:
With the past 3 years, the entire wastage has been reduced by 23% that was consistent in 2016 as
well. Yet, the waste enhanced to 6% and the recycling rate resulted in decrement by 19%. Also there
is constant effort to improve the waste management and also to focus properly on recycling the waste
(Heminway, 2017).
b. Use of Water:
[Type here]

15
With regards to Telstra, the consumption of water has decreased by 3%, this is since a program was
help for detecting leakage of water at the operating sites, and also to respond and make correct the
located leakages.
c. Responsible use of paper:
There has been considerable decrease in the use of paper by 26%, due to reducing the commercial
printing and billing paper. It is being encouraged to use the paper in the operations, which is inclusive
of printed marketing material that is being complete by professional printers. Also due to the shift
towards the digitalisation, there has been decrement in commercial printing by 47% with respect to
the last year (Telstra, 2016).
 Social Performance:
Since we know that there is gradual evolvement of Technology, we understand that the expectation of
consumer is changing. In order to make sure, that it is possible to cope up with this situation, several
measures have been adopted to attract employees and retain them, so that it is possible to make Telstra a
world class technology company. Not only these, but there are a lot of investment made for attraction and
retention of employees by conducting various programs, in order to make the employees efficient,
[Type here]

16
effective, skilful, passionate in their work to help Telstra to become a world class company in terms of
technology. This is done as follows:
a. Employee engagement:
The score of employee engagement is 71% with the response rate of 80%. The primary focus has
been to improve customer satisfaction, improving the personnel advocacy, and also enabling the
people to derive excellent experience by minimising the difficulties and issues. The target was to
reach the standard rate of 84%. Always seeking and working upon feedbacks from employees assists
Telstra a great place to work.
b. Nurturing the Talent and attraction for them:
Since the market is very intense, it will become more complex to retain the experienced employee. In
order to attract and restore these employees, this year a new survey has been launched that helps to
recruit only the experienced employees who are trained at customer advocacy and have a mentality to
handle the customers. Conducting several workshops of employees with the leaders, also is a way to
encourage the employees.
c. Management of Performance:
The management of performance is done by mutual discussion of employees with the leaders. Here
they discuss the noticed best practices feedbacks from the personnel. This year, a new initiative has
been taken to enable the employees to have a constant conversation with the leaders, regarding their
observations, approach, priorities, and progress that might help the company to achieve its key
priorities. The initiative is relatively flexible so as to change itself as per the needs and desire of the
employees. It is important to put efforts for the development of the employees as these are the people
on whom the growth and development of the company is based. The overall social performance deals
with how good the company is with its peers and how much steps they are taking in that regard for
the company.
d. Imparting learning and developmental opportunities:
 Delivering proper training to the employees and drive them to develop key business skills and
practices that are new. We know that more than 2000 employees across Australia, have
undergone Core Capabilities training in 2016.
[Type here]

17
 Providing a Telstra Leadership programs for new, experienced and very aspiring talents, high
level employees, leaders, providing them both in person as well as online coaching classes. These
classes were taken by more than 1400 employees in 2016.
 Introduction of “Get Started”, a new digitalised portal for induction of new employees global
based. With this, now the employees are introduced with the cultures, code of conduct, and
strategy in a straight manner that their primary focus remains at customer advocacy.
 To encourage the employees to participate in volunteering and giving away their time and interest
in a particular cause they wish to. This is among the sustainability programs of Telstra.
[Type here]

18
Conclusion and Reccomendation:
We therefore can conclude that even if the telecommunication industry has deregulated in 1990, yet
Telstra has somehow made it possible to remain the biggest producer of telecommunication services in
Australia. We can see that 72% of Australia’s small and medium businesses (SMBs) are the consumers of
Telstra. These are making the utmost utilisation of the products and services to the customer and to do
business. Telstra is adjoining the innovation technology, the capacity and the talent all around the world,
in order to provide great satisfaction for the customers. This is the only company, maintaining and setting
up the target of customer advocacy at peak, thereby adopting more measures for customer satisfaction.
The company has done commendable job since years to maintain a sustainable level of use of resources
and to put them to best use that can help them in the future and has uplifted the overall CSR policies that
companies should follow. On the basis it can be recommended that people should invest in the company,
as they have been taking deliberate steps in keeping up with the CSR policies, they have taken steps to
ensure that the company is working towards growth and expansion. The company has also taken steps to
ensure that their financial performance improves from the previous years and this is clearly reflected from
their high financial performance. Overall it would be recommended to invest in the shares of the company
to get good returns.
[Type here]

19
References
Alexander, F., 2016. The Changing Face of Accountability. The Journal of Higher Education, 71(4), pp.
411-431.
Belton, P., 2017. Competitive Strategy: Creating and Sustaining Superior Performance. London: Macat
International ltd.
Bromwich, M. & Scapens, R., 2016. Management Accounting Research: 25 years on. Management
Accounting Research, Volume 31, pp. 1-9.
Das, P., 2017. Financing Pattern and Utilization of Fixed Assets - A Study. Asian Journal of Social Science
Studies, 2(2), pp. 10-17.
Dichev, I., 2017. On the conceptual foundations of financial reporting. Accounting and Business
Research, 47(6), pp. 617-632.
Farmer, Y., 2018. Ethical Decision Making and Reputation Management in Public Relations. Journal of
Media Ethics, pp. 1-12.
Goldmann, K., 2016. Financial Liquidity and Profitability Management in Practice of Polish Business.
Financial Environment and Business Development, Volume 4, pp. 103-112.
Heminway, J., 2017. Shareholder Wealth Maximization as a Function of Statutes, Decisional Law, and
Organic Documents. SSRN, pp. 1-35.
Kangarluie, S. & Aalizadeh, A., 2017. 'The expectation gap in auditing. Accounting, 3(1), pp. 19-22.
Kuhn, J. & Morris, B., 2016. IT internal control weaknesses and the market value of firms. Journal of
Enterprise Information Management, 30(6).
Sithole, S., Chandler, P., Abeysekera, I. & Paas, F., 2017. Benefits of guided self-management of attention
on learning accounting. Journal of Educational Psychology, 109(2), p. 220.
Telstra, 2016. FY16-Annual-Report. Telstra.
[Type here]

20
[Type here]