Consolidated Statement of Cash Flows

(All amounts in RMB millions)
Year ended 31 December
Note 2018 2017
Cash flows from operating activities
Cash generated from operations (a) 93,882 91,519
Interest received 1,688 807
Interest paid (2,457) (6,293)
Income tax paid (726) (979)
Net cash inflow from operating activities 92,387 85,054
Cash flows from investing activities
Purchase of property, plant and equipment (52,176) (61,489)
Proceeds from disposal of Tower Assets and other property, plant and equipment 1,090 22,121
Dividend received from financial assets at fair value through other comprehensive income 203 167
Investment income received from financial assets at fair value through profit and loss 36 -
Proceeds from disposal of financial assets at fair value through profit and loss - 60
Dividends received from associates 20 10
Decrease/(lncrease) in short-term bank deposits and restricted deposits 3,094 (3,094)
Purchase of other assets (4,590) (4,204)
Acquisition of financial assets at fair value through profit and loss (585) (74)
Acquisition of financial assets at fair value through other comprehensive income - (8)
Acquisition of interest in associates (67) (5)
Acquisition of interest in joint ventures (1,000) (620)
Lending by Unicom Group Finance Company Limited ("Finance Company") (13,558) (700)
Repayment of loan lent by Finance Company 6,354 500
Net cash outflow from investing activities (61,179) (47,336)
Cash flows from financing activities
Proceeds from shares issued - 74,954
Capital contributions from non-controlling interests 7 -
Proceeds from commercial papers - 26,941
Proceeds from short-term bank loans 53,306 117,571
Proceeds from long-term bank loans - 1,549
Loans from ultimate holding company - 5,237
Loans from related parties 3,090 535
Repayment of commercial papers (9,000) (54,000)
Repayment of short-term bank loans (60,730) (172,065)
Repayment of long-term bank loans (435) (2,686)
Repayment of related party loan (475) (60)
Repayment of ultimate holding company loan (1,344) (3,893)
Repayment of finance lease (493) (695)
Repayment of promissory notes (18,000) (19,000)
Repayment of corporate bonds - (2,000)
Payment of issuing expense for promissory notes (67) (82)
Dividends paid to equity shareholders of the Company 32 (1,591) -
Net deposits/(withdrawal) with/from Finance Company 2,354 (100)
Increase in statutory reserve deposits placed by Finance Company 28(i) (680) (620)
Net cash outflow from financing activities (34,058) (28,414)
Net (decrease)/increase in cash and cash equivalents (2,850) 9,304
Cash and cash equivalents, beginning of year 32,836 23,633
Effect of changes in foreign exchange rate 74 (101)
Cash and cash equivalents, end of year 29 30,060 32,836
Analysis of the balances of cash and cash equivalents:
Cash balances 1 3
Bank balances 30,059 32,833
30,060 32,836
Note: The Group has initially applied IFRS/HKFRS 15 and IFRS/HKFRS 9 (2014) at 1 January 2018. Under the transition method chosen, comparative information is not restated. See Note 2.

The notes on pages 102 to 193 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
  20182017
Profit before income tax 13,081 2,593
Adjustments for:
Depreciation and amortisation 75,777 77,492
Interest income (1,712) (1,647)
Finance costs 1,676 5,363
Loss on disposal of property, plant and equipment 4,148 3,489
Credit loss allowance and write-down of inventories 3,846 3,955
Dividend from financial assets at fair value through other comprehensive income (203) (206)
Investment income from financial assets at fair value through profit and loss (36) -
Share of net profit of associates (2,477) (893)
Share of net profit of joint ventures (598) (574)
Expenses for restricted shares of A Share Company granted to the Group's employees 614 -
Other investment gain (31) (19)
Changes in working capital:
Increase in accounts receivable (4,887) (3,667)
Decrease in contract assets 1,150 -
Increase in contract costs (3,001) -
(lncrease)/Decrease in inventories and consumables (385) 81
Increase in short-term bank deposits and restricted deposits (581) (58)
Decrease/(lncrease) in other assets 1,584 (2,034)
Decrease in prepayments and other current assets 60 166
Increase in amounts due from ultimate holding company (20) (39)
Decrease in amounts due from related parties 2,339 112
Decrease/(lncrease) in amounts due from domestic carriers 871 (775)
Increase in accounts payable and accrued liabilities 6,591 5,752
Increase in taxes payable 33 362
Increase in advances from customers 45 2,255
Decrease in contract liabilities (4,322) -
Increase in deferred revenue 1,474 365
Increase in other obligations 68 45
lncrease/(Decrease) in amounts due to ultimate holding company 40 (203)
Decrease in amounts due to related parties (868) (945)
(Decrease)/lncrease in amounts due to domestic carriers (394) 549
Cash generated from operations 93,882 91,519

MY ANNUAL REPORT

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