Detailed Financial Analysis of TPG Telecom's 2017 Annual Report

This report presents a comprehensive financial analysis of TPG Telecom's 2017 annual report, focusing on key areas such as subsequent events, including the declaration of a final dividend and revised debt financing agreements. The analysis delves into the financial implications of the dividend, the details of the revised debt agreements, and the impact of foreign subsidiaries' assets and liabilities. The report also examines liquidity risk, segment reporting (Consumer and Corporate segments), intra-group transactions, and credit risk management within TPG Telecom. It highlights the company's strategies for managing liquidity, segment performance, and credit exposure, providing a detailed overview of the financial health and operational aspects of the company during the fiscal year 2017. The analysis provides valuable insights into TPG Telecom's financial performance and risk management practices during the period.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
STUDENT NAME

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
Brief :
• Company engaged in business of telecommunication services.
• It provides Telephony service, Broadband Service, NBN etc.
• Focus Customers like Government Departments, local users, Small and Medium
Enterprises etc.
• It has above 100 subsidiaries companies.
• It has operation not only in Australia but also in USA, Singapore, New Zealand
etc.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
ANNUAL FINANCIAL REPORT-2017
We are analyzing the financial statement of the financial year 2017 of the company. In
the section we are discussing the subsequent events occurred after the balance sheet
date. There are two events were occurred which are as follows:
a) The board has declared a final dividend for F.Y. 2017 of 2.0 cents
b) The Group has entered into revised debt financing agreements.
Apart from the above, there was not subsequent event which effect the operations
of group significantly.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
FINAL DIVIDEND
• According to annual report of the financial year 2017, the company has already
paid the dividend of 8 cents per share.
• After that, director of the company has declared a final dividend for the year 2
cents per shares. (i.e. subsequent year)
• Total dividend for the financial year is 10 cents per share.
• Financial impact of this dividend (subsequent) has not been considered in this year
and it would be considered in next financial year.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
REVISED DEBT FINANCIAL AGREEMENT
• The group has a debt facility of $ 1635m as at 31 July 2017.
• The group has entered into revised debt financial agreement in December, 2017.
• Purpose for the same was to extend the facility, extend the tenure of the facilities
etc.
• Facilities has been increased from $ 742m to $ 2377m and tenure has been
extended from 3 to 7 years.
• Facility includes Singapore $ 100 which has been translated to AUD using the 31
July 2017 spot rate.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
FOREIGN SUBSIDIARIES
• The assets and liabilities of foreign subsidiaries have been converted to Australian
dollar.
• The rate of exchange for the same is the rate on the date of reporting.
• The income and expenses are also reported in Australian dollar.
• The rate of exchange, that was taken for translation of income and expenses, is the
rate of date on which transactions have been taken place.
• Difference in the foreign currency exchange are recognized as comprehensive
income.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
LIQUIDITY RISK
• It is the risk which refers to the organization’s incapacity to pay its dues as and
when they become due.
• In the present case, the company has managed its liquidity and have a sufficient
liquidity to meet its financial obligations.
• The company has sufficient cash flows which ensure the fulfillment of requirement
of its subsidiaries.
• It maintain the cash reserves to meets its operational expenses.
• In addition to that it has a debt facility which overcome the liquidity risk of the
group as a whole.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
SEGMENT REPORTING
• It refers to the component of the group through which company is engaged in the
business activities to earn the revenue and incur the expenses.
• In the year 2017, there are two segment which are i) Consumer Segment, ii)
Corporate Segment.
• Consumer Segment: It provides the telecommunication services to the small
business consumers.
• Corporate Segment: It provide the telecommunication service to wholesale
businesses, government etc.
• Unallocated Segment refers to the start-up expenses of the group’s Singapore unit.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
INTRA-GROUP TRANSACTIONS
• Transactions which are taken places among companies of the same group.
• At the time of consolidation of financial statement of the group, these transaction
become reciprocal to each other (SigmaConso, no date).
• There may be some reasons for differences in balances of intra-group transactions
such as:- a) difference in reporting period, b) Sales booked as fixed assed etc.
• In the present case, balance of intra-group transactions are nil.
• Unrealized gain and loss have been eliminated from the consolidated financial
statement.

FINANCIAL ACCOUNTING AND REPORTING
ACCM 4300
COMPANY:
TPG TELECOM
CREDIT RISK
• It refers to the risk to an organization, where counterparty fails to meet its financial
obligation on due date.
• It arises from the account receivables of the organization.
• An organization needs to minimize such type of risk because it directly affects the
liquidity of the organization.
• The group has established a credit policy to its customers to analyze its
creditworthiness, credit history etc.
• Credit policy has group’s terms and conditions of payments , external ratings etc.