FINANCIAL REPORT

Consolidated Statement of Cash Flows

for the year ended 31 December 2023 (Amounts in millions)

2023

2022

Notes

RMB

RMB

Net cash from operating activities

(a)

137,508

136,432

Cash flows used in investing activities

Capital expenditure

(89,866)

(89,705)

Purchase of investments

(109)

(175)

Payments for right-of-use assets

(307)

(1,807)

Proceeds from disposal of property, plant and equipment

1,223

1,422

Proceeds from disposal of right-of-use assets

89

142

Proceeds from disposal of investments

124

200

Payments for equity instruments at fair value through other
comprehensive income

(30)

(15)

Purchase of short-term bank deposits

(13,349)

(2,537)

Maturity of short-term bank deposits

6,742

1,750

Short-term loans granted to China Telecom Group by
Finance Company

(b)

(8,100)

(8,105)

China Telecom Group’s repayments of short-term loans
granted by Finance Company

(b)

8,091

2,034

Net cash used in investing activities

(95,492)

(96,796)

Cash flows used in financing activities

Repayments of principal of lease liabilities

(14,647)

(15,897)

Proceeds from bank and other loans

5,988

3,692

Repayments of bank and other loans

(11,239)

(9,615)

Payments of dividends

(20,059)

(26,537)

Distribution to non-controlling interests

(79)

(90)

Payment for the acquisition of non-controlling interests

(1)

Contribution from non-controlling interests

3,675

Net deposits with Finance Company

(b)

6,680

4,411

Increase in statutory deposit reserves placed by
Finance Company

(b)

(121)

(541)

Consideration paid for entity combination under
common control

(3)

Net cash used in financing activities

(33,477)

(40,906)

Net increase/(decrease) in cash and cash equivalents

8,539

(1,270)

Cash and cash equivalents as at 1 January

72,465

73,284

Effect of changes in foreign exchange rate

42

451

Cash and cash equivalents as at 31 December

81,046

72,465

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

2023

2022

RMB

RMB

Profit before taxation

39,204

35,714

Adjustment for:

Depreciation and amortisation

99,702

96,932

Impairment losses for financial assets and contract assets,
net of reversal

3,419

2,340

Write-down of inventories, net of reversal

7

(61)

Investment income and others

(295)

(243)

Share of profits of associates and joint ventures

(2,116)

(2,051)

Interest income

(2,368)

(1,808)

Net interest expense

2,545

1,881

Net foreign exchange gain or loss and others

155

(66)

Net loss on retirement and disposal of long-lived assets
and others

4,046

6,158

144,299

138,796

Increase in accounts receivable

(11,067)

(3,842)

Increase in contract assets

(1,813)

(2,185)

Decrease in inventories

90

370

Decrease/(Increase) in prepayments and other current assets

130

(4,302)

Increase in restricted cash

(182)

(496)

Increase in other assets

(683)

(449)

Increase in accounts payable

10,176

9,683

Increase in accrued expenses and other payables

1,657

4,293

Decrease in contract liabilities

(2,432)

(3,165)

Cash generated from operations

140,175

138,703

Interest received

2,225

1,754

Interest paid

(2,646)

(1,993)

Investment income received

1,530

1,208

Income tax paid

(3,776)

(3,240)

Net cash from operating activities

137,508

136,432

(b) “Finance Company” refers to China Telecom Group Finance Co., Ltd., a subsidiary of the Company established on 8 January 2019, which provides capital and financial management services to the member units of China Telecommunications Corporation, the parent and ultimate holding company of the Company. These transactions are conducted on normal commercial terms or better.

(c) Significant non-cash transactions

For the years ended 31 December 2023 and 2022, the Group did not have significant non-cash investing and financing activities, except for the additions of right-of-use assets and lease liabilities, and the additions of equipment in instalment purchase of equipment.

The notes on pages 170 to 252 form part of these consolidated financial statements.