Consolidated Statement of Cash Flows

(All amounts in RMB millions)

Year ended 31 December
Note 2016 2015
Cash flows from operating activities
Cash generated from operations (a) 81,168 91,169
Interest received 335 319
Interest paid (4,938) (4,943)
Income tax paid (1,972) (2,244)
Net cash inflow from operating activities 74,593 84,301
Cash flows from investing activities
Purchase of property, plant and equipment (98,293) (88,465)
Proceeds from disposal of property, plant and equipment and other assets 6,390 2,336
Dividends received from financial assets at fair value through other comprehensive income 357 365
Proceeds from disposal of financial assets at fair value through profit and loss 68 19
Dividends received from associates - 10
Decrease/(Increase) in short-term bank deposits and restricted deposits 2 (3)
Purchase of other assets (4,092) (4,542)
Acquisition of financial assets at fair value through profit and loss (51) (66)
Acquisition of financial asset at fair value through other comprehensive income (18) -
Acquisition of interest in associates (48) (8)
Acquisition of interest in joint ventures (64) (1,000)
Net cash outflow from investing activities (95,749) (91,354)
Cash flows from financing activities
Proceeds from exercise of share options - 1
Capital contributions from non-controlling interests 270 -
Proceeds from commercial papers 59,880 30,000
Proceeds from short-term bank loans 142,567 139,663
Proceeds from long-term bank loans 3,307 1,920
Proceeds from ultimate holding company loan - 1,344
Proceeds from promissory notes - 17,957
Proceeds from corporate bonds 17,965 -
Repayment of commercial papers (44,000) (20,000)
Repayment of short-term bank loans (149,425) (149,072)
Repayment of long-term bank loans (84) (45)
Repayment of related party loan - (473)
Repayment of ultimate holding company loan (1,344) (1,344)
Repayment of convertible bond - (11,664)
Repayment of finance lease (406) (217)
Repayment of promissory notes (2,500) -
Payment of issuing expense for promissory notes (102) -
Dividends paid to equity shareholders of the Company 29 (4,071) (4,643)
Net deposits received by Finance Company 2,397 -
Statutory reserve deposits placed by Finance Company 25(i) (1,577) -
Net cash inflow from financing activities 22,877 3,427
Net increase/(decrease) in cash and cash equivalents 1,721 (3,626)
Cash and cash equivalents, beginning of year 21,755 25,308
Effect of changes in foreign exchange rate 157 73
Cash and cash equivalents, end of year 26 23,633 21,755
Analysis of the balances of cash and cash equivalents:
Cash balances 1 1
Bank balances 23,632 21,754
23,633 21,755

The notes on pages 93 to 161 are an integral part of these consolidated financial statements.

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

Year ended 31 December
2016 2015
Profit before income tax 784 14,035
Adjustments for:
Depreciation and amortisation 76,805 76,738
Interest income (1,160) (120)
Finance costs 4,832 6,641
Loss/(Gain) on disposal of property, plant and equipment and other assets 355 (7,280)
Impairment losses for doubtful debts and write-down of inventories 4,173 4,054
Impairment losses for property, plant and equipment - 29
Dividends from financial assets at fair value through other comprehensive income (357) (397)
Share of net (profit)/loss of associates (204) 759
Share of net (profit)/loss of joint ventures (153) 42
Other investment (gain)/loss

(9) 8
Changes in working capital:
Increase in accounts receivable (2,664) (3,666)
Decrease/(Increase) in inventories and consumables 1,354 (73)
Decrease/(Increase) in short-term bank deposits and restricted deposits 23 (146)
Increase in other assets (4,763) (6,142)
Decrease/(Increase) in prepayments and other current assets 4,171 (1,630)
(Increase)/Decrease in amounts due from related parties (3,302) 2,905
(Increase)/Decrease in amounts due from domestic carriers (1,914) 126
Decrease in accounts payable and accrued liabilities (835) (1,781)
(Decrease)/Increase in taxes payable (1,176) 5,126
(Decrease)/Increase in advances from customers (1,329) 1,465
Increase/(Decrease) in deferred revenue 395 (81)
Increase/(Decrease) in other obligations 69 (17)
Increase/(Decrease) in amounts due to ultimate holding company 73 (185)
Increase in amounts due to related parties 5,311 861
Increase/(Decrease) in amounts due to domestic carriers 689 (102)
Cash generated from operations 81,168 91,169

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