32
China Communications Services Corporation Limited Annual Report 2015
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
In 2015, net cash used in financing activities was RMB793 million, representing an increase of RMB637 million from RMB156
million in 2014. The change in cash flow from financing activities was mainly due to the increase in debt financing from the
introduction of strategic investor for overseas business expansion in 2014.
WORKING CAPITAL
As at the end of 2015, the Group’s working capital (i.e. current assets net of current liabilities) was RMB17,580 million, increased
by RMB1,750 million from RMB15,830 million in 2014. The increase in working capital was mainly due to the expansion of the
Group’s business and effective management of accounts receivable which led to an increase in cash.
INDEBTEDNESS
As at the end of 2015, total indebtedness of the Group was RMB861 million, decreased by RMB36 million from RMB897 million
as at the end of 2014. Indebtedness of the Group were mainly denominated in US dollar, of which Renminbi loan accounted for
5.4%, US dollar loan accounted for 94.1% and South African Rand loan accounted for 0.5%, and of which 24% was fixed
interest rate loans and 76% was floating interest rate loans.
As at the end of 2015, our gearing ratio
1
was 3.4%, representing a decrease of 0.4 percentage point from 3.8% as at the end of
2014.
CONTRACTUAL OBLIGATIONS
The following table sets out our contractual commitments as at 31 December 2015:
Total
2016
2017
2018
2019
2020
and after
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Short-term debt
177,005 177,005
—
—
—
—
Long-term debt
34,455
— 18,221
16,234
—
—
Convertible preference shares
and preference shares
649,360
—
—
—
— 649,360
Operating lease commitments
782,787 308,106 180,052
83,664
53,001 157,964
Capital commitments
522,101 522,101
—
—
—
—
Of which:
Authorized and contracted for
317,445 317,445
—
—
—
—
Total of contractual obligations
2,165,708 1,007,212 198,273
99,898
53,001 807,324
EXCHANGE RATE
Most of the Group’s revenues and expenses are denominated in Renminbi. As at the end of 2015, the balance of our cash and
cash equivalents in foreign currencies accounted for 7.8% of the Group’s total cash and cash equivalents, of which 4.7% and 0.3%
were denominated in US dollars and Hong Kong dollars, respectively.
1
Gearing ratio equals to total interest-bearing debts at the end of the financial year divided by the sum of equity attributable to equity shareholders of the
Company and interest-bearing debts.
