Annual Report 2019

Consolidated Statement of Cash Flows

(All amounts in RMB millions)
Year ended 31 December
Cash flows from operating activities
Cash generated from operations2, (a)94,95293,882
Interest received1,5511,688
Interest paid(2,521)(2,457)
Income tax paid(304)(726)
Net cash inflow from operating activities293,67892,387
Cash flows from investing activities
Purchase of property, plant and equipment and right-of-use assets(56,187)(52,176)
Purchase of other assets(4,355)(4,590)
Proceeds from disposal of property, plant and equipment and other assets1,5121,090
Dividend received from financial assets at fair value through other comprehensive income205203
Investment income received from financial assets at fair value through profit and loss2436
Proceeds from disposal of financial assets at fair value through profit and loss507
Dividends received from associates8220
Decrease in short-term bank deposits343,094
Acquisition of financial assets at fair value through profit and loss(423)(585)
Acquisition of financial assets at fair value through other comprehensive income(3)
Acquisition of interest in associates(12)(67)
Acquisition of interest in joint ventures(137)(1,000)
Lending by Unicom Group Finance Company Limited ("Finance Company") to related parties(11,434)(13,558)
Repayment of loans from a related party to Finance Company11,1346,354
Net cash outflow from investing activities(59,053)(61,179)

Year ended 31 December
Cash flows from financing activities
  Capital contributions from non-controlling interests5087
  Proceeds from short-term bank loans28,78453,306
  Proceeds from commercial papers8,995
  Proceeds from promissory notes992
  Proceeds from corporate bonds2,000
  Loans from related parties503,090
  Repayment of short-term bank loans(38,290)(60,730)
  Repayment of long-term bank loans(418)(435)
  Repayment of commercial papers(9,000)
  Repayment of related party loans(48)(475)
  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 paid2(11,123)
  Payment of issuing expense for promissory notes(67)
  Dividends paid to equity shareholders of the Company33(4,100)(1,591)
  Net deposits with Finance Company by related parties2362,354
  Increase in statutory reserve deposits placed by Finance Company29(i)(351)(680)
  Net cash outflow from financing activities2(29,765)(34,058)
Net increase/(decrease) in cash and cash equivalents4,860(2,850)
  Cash and cash equivalents, beginning of year30,06032,836
  Effect of changes in foreign exchange rate2574
Cash and cash equivalents, end of year3034,94530,060
Analysis of the balances of cash and cash equivalents:
  Cash balances 11
  Bank balances 34,94430,059

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
Profit before income tax14,16713,081
Adjustments for:
  Depreciation and amortisation83,08075,777
  Interest income(1,272)(1,712)
  Finance costs1,9911,676
  Loss on disposal of property, plant and equipment2,1794,148
  Credit loss allowance and write-down of inventories3,6633,846
  Dividend from financial assets at fair value through other comprehensive income(205)(203)
  Investment income from financial assets at fair value through profit and loss(24)(36)
  Other investment gains(96)(31)
  Share of net profit of associates(1,359)(2,477)
  Share of net profit of joint ventures(646)(598)
  Expenses for restricted shares of A Share Company granted to the Group's employees571614
Changes in working capital:
  Increase in accounts receivable(5,928)(4,887)
  (Increase)/Decrease in contract assets(122)1,150
  Increase in contract costs(2,188)(3,001)
  Increase in inventories and consumables(335)(385)
  Decrease/(Increase) in restricted deposits321(581)
  (Increase)/Decrease in other assets(796)1,584
  (Increase)/Decrease in prepayments and other current assets(1,876)60
  Increase in amounts due from ultimate holding company(7)(20)
  Decrease in amounts due from related parties7452,339
  Decrease in amounts due from domestic carriers364871
  Increase in accounts payable and accrued liabilities2,3866,591
  Increase in taxes payable62333
  Increase in advances from customers245
  Decrease in contract liabilities(2,002)(4,322)
  Increase in deferred revenue1,1641,474
  (Decrease)/Increase in other obligations(16)68
  Increase in amounts due to ultimate holding company32240
  Increase/(Decrease) in amounts due to related parties216(868)
  Increase/(Decrease) in amounts due to domestic carriers30(394)
Cash generated from operations94,95293,882

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.


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