Consolidated Statement of Cash Flows
for the year ended 31 December 2014 (Amounts in millions)
| Note | 2014 RMB | 2013 RMB | |
|---|---|---|---|
| Net cash from operating activities | (a) | 96,405 | 88,351 |
| Cash flows used in investing activities | |||
| Capital expenditure | (80,273) | (70,921) | |
| Lease prepayments | (184) | (111) | |
| Purchase of investments | (2,990) | - | |
| Proceeds from disposal of property, plant and equipment | 710 | 1,538 | |
| Proceeds from disposal of lease prepayments | 121 | 360 | |
| Net cash inflow from disposal of a subsidiary | - | 512 | |
| Purchase of short-term bank deposits | (2,566) | (2,750) | |
| Maturity of short-term bank deposits | 3,474 | 3,193 | |
| Payment for the payable to China Telecommunications Corporation related to the Mobile Network Acquisition (as defined in Note 16) | - | (14,269) | |
| Payment for the first installment of the Mobile Network Acquisition | - | (25,500) | |
| Net cash used in investing activities | (81,708) | (107,948) | |
| Cash flows (used in)/from financing activities | |||
| Principal element of finance lease payments | (1) | (2) | |
| Proceeds from bank and other loans | 53,022 | 54,983 | |
| Repayment of bank and other loans | (56,819) | (44,053) | |
| Payment of dividends | (6,198) | (5,433) | |
| Payment of the acquisition price of the Seventh Acquisition | (b) | (278) | - |
| Net cash (distributions to)/contributions from non-controlling interests | (53) | 142 | |
| Net cash (used in)/from financing activities | (10,327) | 5,637 | |
| Net increase/(decrease) in cash and cash equivalents | 4,370 | (13,960) | |
| Cash and cash equivalents at 1 January | 16,070 | 30,099 | |
| Effect of changes in foreign exchange rate | (4) | (69) | |
| Cash and cash equivalents at 31 December | 20,436 | 16,070 |
The notes on pages 128 to 193 form part of these financial statements.
(a) Reconciliation of profit before taxation to net cash from operating activities
| 2014 RMB | 2013 RMB | |
|---|---|---|
| Profit before taxation | 23,257 | 23,088 |
| Adjustments for: | ||
| Depreciation and amortisation | 66,345 | 69,083 |
| Impairment losses for doubtful debts | 2,084 | 1,744 |
| Write down of inventories | 151 | 360 |
| Investment income | (6) | (670) |
| Share of profits of associates | (34) | (103) |
| Interest income | (304) | (361) |
| Interest expense | 5,650 | 5,511 |
| Unrealised foreign exchange (gain)/loss | (55) | 3 |
| Loss/(gain) on retirement and disposal of property, plant and equipment | 2,287 | (1,021) |
| Operating profit before changes in working capital | 99,375 | 97,634 |
| Increase in accounts receivable | (3,594) | (3,156) |
| Decrease/(increase) in inventories | 2,280 | (955) |
| Increase in prepayments and other current assets | (2,359) | (1,077) |
| (Increase)/decrease in other assets | (2) | 294 |
| Increase in accounts payable | 6,473 | 3,210 |
| Increase in accrued expenses and other payables | 6,571 | 3,148 |
| Decrease in deferred revenues | (573) | (1,014) |
| Cash generated from operations | 108,171 | 98,084 |
| Interest received | 305 | 358 |
| Interest paid | (5,693) | (5,573) |
| Investment income received | 29 | 21 |
| Income tax paid | (6,407) | (4,539) |
| Net cash from operating activities | 96,405 | 88,351 |
(b)
The Seventh Acquisition represents the acquisition of the 100% equity interest in China Telecom (Europe) Limited, a wholly owned subsidiary of China Telecommunications Corporation, by China Telecom Global Limited (“CT Global”, a subsidiary of the Company) from China Telecommunications Corporation on 31 December 2013.
The notes on pages 128 to 193 form part of these financial statements.