Financial Highlights

Consolidated Statement of Cash Flows

(All amounts in RMB millions)

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  Year ended 31 December
  Note 2018 2019
Note
Cash flows from operating activities
Cash generated from operations 2, (a) 93,882 94,952
Interest received   1,688 1,551
Interest paid   (2,457) (2,521)
Income tax paid   (726) (304)
Net cash inflow from operating activities 2 92,387 93,678
Cash flows from investing activities
Purchase of property, plant and equipment and right-of-use assets (52,176) (56,187)
Purchase of other assets (4,590) (4,355)
Proceeds from disposal of property, plant and equipment and other assets 1,090 1,512
Dividend received from financial assets at fair value through other comprehensive income 203 205
Investment income received from financial assets at fair value through profit and loss 36 24
Proceeds from disposal of financial assets at fair value through profit and loss 507
Dividends received from associates 20 82
Decrease in short-term bank deposits 3,094 34
Acquisition of financial assets at fair value through profit and loss (585) (423)
Acquisition of financial assets at fair value through other comprehensive income (3)
Acquisition of interest in associates (67) (12)
Acquisition of interest in joint ventures (1,000) (137)
Lending by Unicom Group Finance Company Limited (“Finance Company”) to related parties (13,558) (11,434)
Repayment of loans from a related party to Finance Company 6,354 11,134
Net cash outflow from investing activities   (61,179) (59,053)
Cash flows from financing activities
Capital contributions from non-controlling interests 7 508
Proceeds from short-term bank loans 53,306 28,784
Proceeds from commercial papers 8,995
Proceeds from promissory notes 992
Proceeds from corporate bonds 2,000
Loans from related parties 3,090 50
Repayment of short-term bank loans (60,730) (38,290)
Repayment of long-term bank loans (435) (418)
Repayment of commercial papers (9,000)
Repayment of related party loans (475) (48)
Repayment of ultimate holding company loan (1,344)
Repayment of promissory notes (18,000)
Repayment of corporate bonds (17,000)
Repayment of finance lease (493)
Capital element of lease rentals paid 2 (11,123)
Payment of issuing expense for promissory notes (67)
Dividends paid to equity shareholders of the Company 33 (1,591) (4,100)
Net deposits with Finance Company by related parties 2,354 236
Increase in statutory reserve deposits placed by Finance Company 29(i) (680) (351)
Net cash outflow from financing activities 2 (34,058) (29,765)
Net (decrease)/increase in cash and cash equivalents (2,850) 4,860
Cash and cash equivalents, beginning of year 32,836 30,060
Effect of changes in foreign exchange rate 74 25
Cash and cash equivalents, end of year 30 30,060 34,945
Analysis of the balances of cash and cash equivalents:
Cash balances 1 1
Bank balances 30,059 34,944
    30,060 34,945

The notes on pages 102 to 197 are an integral part of these consolidated financial statements.

(a) The reconciliation of profit before income tax to cash generated from operating activities is as follows:

  Year ended 31 December
  2018 2019
Note
Profit before income tax   13,081 14,167
Adjustments for:
Depreciation and amortisation   75,777 83,080
Interest income   (1,712) (1,272)
Finance costs   1,676 1,991
Loss on disposal of property, plant and equipment   4,148 2,179
Credit loss allowance and write-down of inventories 3,846 3,663
Dividend from financial assets at fair value through other comprehensive income (203) (205)
Investment income from financial assets at fair value through profit and loss (36) (24)
Other investment gains (31) (96)
Share of net profit of associates (2,477) (1,359)
Share of net profit of joint ventures (598) (646)
Expenses for restricted shares of A Share Company granted to the Group's employees 614 571
Changes in working capital:
Increase in accounts receivable (4,887) (5,928)
Decrease/(Increase) in contract assets 1,150 (122)
Increase in contract costs (3,001) (2,188)
Increase in inventories and consumables (385) (335)
(Increase)/Decrease in restricted deposits (581) 321
Decrease/(Increase) in other assets 1,584 (796)
Decrease/(Increase) in prepayments and other current assets 60 (1,876)
Increase in amounts due from ultimate holding company (20) (7)
Decrease in amounts due from related parties   2,339 745
Decrease in amounts due from domestic carriers 871 364
Increase in accounts payable and accrued liabilities 6,591 2,386
Increase in taxes payable 33 623
Increase in advances from customers 45 2
Decrease in contract liabilities (4,322) (2,002)
Increase in deferred revenue 1,474 1,164
Increase/(Decrease) in other obligations 68 (16)
Increase in amounts due to ultimate holding company 40 322
(Decrease)/Increase in amounts due to related parties (868) 216
(Decrease)/Increase in amounts due to domestic carriers (394) 30
Cash generated from operations 93,882 94,952

Note: The Group has initially applied IFRS/HKFRS 16 at 1 January 2019 using the modified retrospective approach. Under this approach, comparative information is not restated. See Note 2.