Consolidated Statement of Cash Flows

For the year ended 31 December 2009
(Amounts in millions)

2009

2008

Note

RMB

RMB

           
 

Net cash from operating activities

(a)

74,988

76,756

           
 

Cash flows from investing activities

Capital expenditure

(40,311)

(46,652)

Purchase of investments

(23)

(92)

Lease prepayments

(94)

(120)

Proceeds from disposal of property, plant and equipment

393

620

Proceeds from disposal of lease prepayments

380

Proceeds from disposal of investments

735

111

Purchase of time deposits with maturity over three months

(442)

(397)

Maturity of time deposits with maturity over three months

397

222

Payment of purchase price for the acquisition of CDMA business, net of cash acquired

(4,290)

(29,511)

           
 

Net cash used in investing activities

(43,255)

(75,819)

           
 

Cash flows from financing activities

Principal element of finance lease payments

(22)

(24)

Proceeds from bank and other loans

88,958

109,235

Proceeds from issuance of medium-term notes

29,906

19,787

Repayments of bank and other loans

(111,084)

(96,650)

Repayment of short-term commercial papers

(10,000)

Repayment of amount due to China Telecommunications Corporation in connection with the First Acquisition

(15,000)

Repayment of amount due to China Telecommunications Corporation in connection with the Second Acquisition

(15,150)

Payment of purchase price for the Fourth Acquisition

(5,557)

Payment of dividends

(6,493)

(6,167)

Net cash distributions to minority interests

(908)

(39)

           
 

Net cash (used in)/generated from financing activities

(24,793)

5,585

           
 

Net increase in cash and cash equivalents

6,940

6,522

Cash and cash equivalents at 1 January

27,866

21,427

Effect of changes in foreign exchange rate

(2)

(83)

           
 

Cash and cash equivalents at 31 December

34,804

27,866

           

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

2009

2008

RMB

RMB

             
 
 

Profit before taxation

19,175

186

 

Adjustments for:

 

Depreciation and amortisation

52,243

53,880

 

Impairment loss on property, plant and equipment

753

24,167

 

Impairment losses for doubtful debts

1,791

1,828

 

Impairment losses for inventory

108

 

Investment income

(791)

(5)

 

Share of profits of associates

(101)

(112)

 

Interest income

(282)

(430)

 

Interest expense

4,724

5,336

 

Unrealised foreign exchange (gain)/loss

(67)

170

 

Loss on retirement and disposal of property, plant and equipment

1,352

2,550

             
 
 

Operating profit before changes in working capital, net of effect of acquisition

78,905

87,570

 

Increase in accounts receivable

(1,906)

(1,439)

 

(Increase)/decrease in inventories

(175)

357

 

Increase in prepayments and other current assets

(78)

(1,155)

 

Decrease in other assets

1,290

1,309

 

Increase in accounts payable

2,178

3,745

 

Increase in accrued expenses and other payables

7,105

3,000

 

Decrease in deferred revenues

(2,982)

(4,042)

             
 
 

Cash generated from operations

84,337

89,345

 

Interest received

271

440

 

Interest paid

(5,053)

(5,055)

 

Investment income received

58

21

 

Income tax paid

(4,625)

(7,995)

             
 
 

Net cash from operating activities

74,988

76,756

             

The notes on pages 110 to 166 form part of these financial statements.