Consolidated Statement of Cash Flows

for the year ended 31 December 2013 (Amounts in millions)

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Net cash from operating activities(a)88,35170,722
Cash flows used in investing activities
Capital expenditure(70,921)(50,071)
Lease prepayments(111)(133)
Proceeds from disposal of property, plant and equipment1,5382,696
Proceeds from disposal of lease prepayments360255
Net cash inflow/(outflow) from disposal of a subsidiary1512(116)
Purchase of time deposits with maturity over three months(2,750)(2,730)
Maturity of time deposits with maturity over three months3,1931,804
Payment for the payable to China Telecommunications Corporation related to the Mobile Network Acquisition (as defined in Note 16)(14,269)-
Payment for the first installment of the Mobile Network Acquisition(25,500)-
Net cash used in investing activities(107,948)(48,295)
Cash flows from/(used in) financing activities
Principal element of finance lease payments(2)-
Proceeds from bank and other loans54,9839,702
Repayment of bank and other loans(44,053)(24,133)
Payment of dividends(5,433)(5,625)
Payment for the acquisition price of the Fifth Acquisition1-(29)
Payment for the acquisition price of the Sixth Acquisition1-(48)
Net cash contributions from non-controlling interests142331
Net cash from/(used in) financing activities5,637(19,802)
Net (decrease)/increase in cash and cash equivalents(13,960)2,625
Cash and cash equivalents at 1 January30,09927,475
Effect of changes in foreign exchange rate(69)(1)
Cash and cash equivalents at 31 December16,07030,099

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

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Profit before taxation23,08819,817
Adjustments for:
Depreciation and amortisation69,08349,666
Impairment losses for doubtful debts1,7441,612
Write down of inventories360235
Investment income(670)(93)
Share of profits of associates(103)(78)
Interest income(361)(591)
Interest expense5,5112,154
Unrealised foreign exchange loss/(gain)3(1)
Gain on retirement and disposal of property, plant and equipment(1,021)(2,429)
Operating profit before changes in working capital97,63470,292
Increase in accounts receivable(3,156)(2,124)
Increase in inventories(955)(1,185)
Increase in prepayments and other current assets(1,077)(1,045)
Decrease in other assets294484
Increase in accounts payable3,2105,016
Increase in accrued expenses and other payables3,1486,245
Decrease in deferred revenues(1,014)(1,360)
Cash generated from operations98,08476,323
Interest received358587
Interest paid(5,573)(2,200)
Investment income received2123
Income tax paid(4,539)(4,011)
Net cash from operating activities88,35170,722

The notes on pages 118 to 185 form part of these financial statements.