Financial Highlights

CONSOLIDATED STATEMENT OF CASH FLOWS

(All amounts in RMB millions)

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  Year ended 31 December
  Note 2019 2020
Cash flows from operating activities
Cash generated from operations 94,952 107,428
Interest received   1,551 1,309
Interest paid   (2,521) (1,832)
Income tax paid   (304) (1,354)
Net cash inflow from operating activities 93,678 105,551
Cash flows from investing activities
Purchase of property, plant and equipment and right-of-use assets (56,187) (53,981)
Purchase of other assets (4,355) (4,675)
Proceeds from disposal of property, plant and equipment and other assets 1,512 1,647
Acquisition of financial assets measured at FVPL (423) (5,751)
Proceeds from disposal of financial assets measured at FVPL 531 4,268
Acquisition of debt securities measured at FVOCI (recycling) (42,650)
Proceeds from disposal of debt securities measured at FVOCI (recycling) 19,511
Acquisition of other financial assets measured at amortised cost (9,050)
Proceeds from disposal of other financial assets measured at amortised cost 9,050
Dividend received from financial assets measured at FVOCI (non-recycling) 205 210
Acquisition of interest in associates (15) (1,349)
Acquisition of interest in joint ventures (137) (117)
Proceeds from disposal of associates and a joint venture 19
Dividends received from associates 82 546
Decrease/(Increase) in short-term bank deposits and restricted deposits 34 (6,900)
Lending by Unicom Group Finance Company Limited (“Finance Company”) to a related party (11,434) (16,500)
Repayment of loans from related parties to Finance Company 11,134 13,704
Net cash outflow from investing activities   (59,053) (92,018)
Cash flows from financing activities
Capital contributions from non-controlling interests 508 66
Proceeds from short-term bank loans 28,784 2,740
Proceeds from commercial papers 8,995 8,000
Proceeds from promissory notes 992
Proceeds from corporate bonds 2,000
Loans from a related party 50
Repayment of short-term bank loans (38,290) (7,564)
Repayment of long-term bank loans (418) (395)
Repayment of commercial papers (10,000)
Repayment of related party loans (48) (50)
Repayment of corporate bonds (17,000)
Capital element of lease rentals paid (11,123) (11,696)
Payment of issuing expense for commercial papers (7)
Dividends paid to equity shareholders of the Company 32 (4,100) (5,447)
Net deposits with Finance Company by related parties 236 283
Increase in statutory reserve deposits placed by Finance Company (351) (1,140)
Net cash outflow from financing activities (29,765) (25,210)
Net increase/(decrease) in cash and cash equivalents 4,860 (11,677)
Cash and cash equivalents, beginning of year 30,060 34,945
Effect of changes in foreign exchange rate 25 (183)
Cash and cash equivalents, end of year 29 34,945 23,085
Analysis of the balances of cash and cash equivalents:
Cash balances 1 1
Bank balances 34,944 23,084
    34,945 23,085

The notes on pages 102 to 185 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
  2019 2020
Profit before income tax   14,167 16,027
Adjustments for:
Depreciation and amortisation   83,080 83,017
Interest income   (1,272) (1,366)
Finance costs   1,991 1,564
Loss on disposal of property, plant and equipment   2,179 2,365
Credit loss allowance and write-down of inventories 3,663 5,584
Dividend from financial assets measured at FVOCI (non-recycling) (205) (210)
Gains on disposal of financial assets measured at FVPL (24) (87)
Investment income from debt securities measured at FVOCI (recycling) (174)
Fair value gains on financial assets measured at FVPL (96) (154)
Share of net profit of associates (1,359) (1,588)
Share of net profit of joint ventures (646) (787)
Expenses for restricted shares of A Share Company granted to the Group’s employees 571 375
Changes in working capital:
Increase in accounts receivable (5,928) (4,151)
(Increase)/Decrease in contract assets (122) 1,125
Increase in contract costs (2,188) (1,371)
(Increase)/Decrease in inventories and consumables (335) 59
Decrease/(Increase) in restricted deposits 321 (233)
Increase in other assets (796) (1,694)
Increase in prepayments and other current assets (1,876) (4,178)
Increase in amounts due from ultimate holding company (7) (36)
Decrease/(Increase) in amounts due from related parties   745 (5)
Decrease/(Increase) in amounts due from domestic carriers 364 (217)
Increase in accounts payable and accrued liabilities 2,386 8,210
Increase in taxes payable 623 1,271
Increase in advances from customers 2 29
(Decrease)/Increase in contract liabilities (2,002) 1,993
Increase in deferred revenue 1,164 1,076
Decrease in other obligations (16) (198)
Increase/(Decrease) in amounts due to ultimate holding company 322 (11)
Increase in amounts due to related parties 216 1,076
Increase in amounts due to domestic carriers 30 117
Cash generated from operations 94,952 107,428