HKEx Stock Code: 728
NYSE Stock Code: CHA

Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows

for the year ended 31 December 2015 (Amounts in millions)
Net cash from operating activities(a)108,75096,405
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 equipment755710
Proceeds from disposal of lease prepayments58121
Proceeds from disposal of Investments2-
Purchase of short-term bank deposits(3,764)(2,566)
Maturity of short-term bank deposits2,7313,474
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 loans67,87553,022
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 interests127-
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 activities4,809(10,327)
Net increase in cash and cash equivalents11,3094,370
Cash and cash equivalents at 1 January20,43616,070
Effect of changes in foreign exchange rate124(4)
Cash and cash equivalents at 31 December31,86920,436

(a) Reconciliation of profit before taxation to net cash from operating activities

Profit before taxation26,69323,257
Adjustments for:
Depreciation and amortisation67,66466,345
Impairment losses for doubtful debts2,2312,084
Impairment losses for long-lived assets51-
Write down of inventories147151
Investment income(8)(6)
Share of losses/(profits) of associates698(34)
Interest income(375)(304)
Interest expense4,5735,650
Foreign exchange loss/(gain)75(55)
Net loss on retirement and disposal of long-lived assets1,5732,287
Gain from Tower Assets Disposal(5,214)-
Operating profit before changes in working capital98,10899,375
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 payable22,1566,473
Increase in accrued expenses and other payables7,1196,571
Decrease in deferred revenues(417)(573)
Cash generated from operations117,048108,171
Interest received375305
Interest paid(4,601)(5,693)
Investment income received2729
Income tax paid(4,099)(6,407)
Net cash from operating activities108,75096,405

(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.