for the year ended 31 December 2015 (Amounts in millions)
The notes on pages 128 to 193 form part of these consolidated financial statements.
| Note | 2015 RMB | 2014 RMB | |
|---|---|---|---|
| Net cash from operating activities | (a) | 108,750 | 96,405 |
| Cash flows used in investing activities | |||
| Capital expenditure | (101,898) | (80,273) | |
| Lease prepayments | (124) | (184) | |
| Purchase of investments | (b) | (10) | (2,990) |
| Proceeds from disposal of property, plant and equipment | 755 | 710 | |
| Proceeds from disposal of lease prepayments | 58 | 121 | |
| Proceeds from disposal of Investments | 2 | - | |
| Purchase of short-term bank deposits | (3,764) | (2,566) | |
| Maturity of short-term bank deposits | 2,731 | 3,474 | |
| Net cash used in investing activities | (102,250) | (81,708) | |
| Cash flows from/(used in) financing activities | |||
| Principal element of finance lease payments | (14) | (1) | |
| Proceeds from bank and other loans | 67,875 | 53,022 | |
| Repayment of bank and other loans | (56,862) | (56,819) | |
| Payment of dividends | (6,160) | (6,198) | |
| Payment for the acquisition of non-controlling interests | (7) | - | |
| Contribution from non-controlling interests | 127 | - | |
| Payment of the acquisition price of the Seventh Acquisition | (c) | - | (278) |
| Net cash distributions to non-controlling interests | (150) | (53) | |
| Net cash from/(used in) financing activities | 4,809 | (10,327) | |
| Net increase in cash and cash equivalents | 11,309 | 4,370 | |
| Cash and cash equivalents at 1 January | 20,436 | 16,070 | |
| Effect of changes in foreign exchange rate | 124 | (4) | |
| Cash and cash equivalents at 31 December | 31,869 | 20,436 |
(a) Reconciliation of profit before taxation to net cash from operating activities
| 2015 RMB | 2014 RMB | |
|---|---|---|
| Profit before taxation | 26,693 | 23,257 |
| Adjustments for: | ||
| Depreciation and amortisation | 67,664 | 66,345 |
| Impairment losses for doubtful debts | 2,231 | 2,084 |
| Impairment losses for long-lived assets | 51 | - |
| Write down of inventories | 147 | 151 |
| Investment income | (8) | (6) |
| Share of losses/(profits) of associates | 698 | (34) |
| Interest income | (375) | (304) |
| Interest expense | 4,573 | 5,650 |
| Foreign exchange loss/(gain) | 75 | (55) |
| Net loss on retirement and disposal of long-lived assets | 1,573 | 2,287 |
| Gain from Tower Assets Disposal | (5,214) | - |
| Operating profit before changes in working capital | 98,108 | 99,375 |
| Increase in accounts receivable | (1,778) | (3,594) |
| (Increase)/decrease in inventories | (2,199) | 2,280 |
| Increase in prepayments and other current assets | (5,854) | (2,359) |
| Increase in other assets | (87) | (2) |
| Increase in accounts payable | 22,156 | 6,473 |
| Increase in accrued expenses and other payables | 7,119 | 6,571 |
| Decrease in deferred revenues | (417) | (573) |
| Cash generated from operations | 117,048 | 108,171 |
| Interest received | 375 | 305 |
| Interest paid | (4,601) | (5,693) |
| Investment income received | 27 | 29 |
| Income tax paid | (4,099) | (6,407) |
| Net cash from operating activities | 108,750 | 96,405 |
(b)
Major non-cash transaction: The Company completed the disposal of certain telecommunications towers and related assets and injecting cash to China Tower Corporation limited (“China Tower”) in return for new shares issued by China Tower on 31 October 2015. The cash injection was not paid by 31 December 2015, therefore the transaction has no impact on the consolidated statement of cash flows for the year ended 31 December 2015.(c)
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 consolidated financial statements.