【正文】 o the financial contribution of the pany (for example, returns on unrelated investments and other treasury operations, gains/losses on exchange, financial interests on loans) and Corporate Center expenses that are unrelated to the business (for example, related to other subsidiaries or corporate reporting and activities that do not contribute to the Telco business). Exhibit 5 describes the basic set of detailed information that should be contained in the CFU financial reports. 中國最大的管理資源中心 第 9 頁 共 28 頁 The question arises as to whether it is appropriate to generate a full set of financial reports for the Units, that is, full balance sheets and cash flow statements that breakdown every Telco total into six CFUs. Following is our point of view on these topics. ROE vs. ROCE CFU Heads are not expected to decide on capital structure, types and sources of debt, ine tax strategies or other financial and nonoperational issues. Therefore, the Telco should not attempt to generate a Return on Equity (or full balance sheet) per unit. Cash Flow Statements As well as with Return on Equity, a cash flow statement reflects some decisions (., on cash management), that CFUs do not make. For example, motivating the CFU to increase cash inflows (mostly collection) is achieved by rewarding increases in sales and reduction in Accounts Receivable. This driver, as well Accounts Payable, are already included in CFU’s ROCE performance indicator. Other cash inflows and outflows are not managed by CFUs (see Exhibit 6) and therefore make it inappropriate to attempt to create a Cash Flow statement to attribute these elements to CFUs. Shar ed Tel ephonyI nt er connec t i onM as s M ar ketM edi um / C om m er ci alU r ban/ R ur alG over nm entBASI C SET O F DETAI LED REPO RTS FO R CFU H EADSLar ge Cl i e ntsFINANCIAL RE PO RT : L ARG E CL IE NT SS u mmar yS UM M AR Y( +) R e a l i z e d r e ve nue s– Di r e c t C ost s– Tr a nsf e r r e d C ost s– Va r i a nc e sC ont r i but i on m a r gi n% S a l e s– Al l oc a t e d C ost s a nd Va r i a nc e sEB I TR OC ELar ge C l i ent sP r oduc tRe ve n u e b r e ak d ownTot a lR e ve nue s P r i c e Vol um eN at i onalR egi on 1S h ar e d Re sou r c e s c ost b r e ak d ownC os t TypeI nf r aes t r uct ur eB ui l d 1B ui l d 2Fl eetC ar 1C ar 2IT...V ol um e U ni tC os tCu r r e n t u n i t c ost an al ysi sC os t TypeA ct ualC os tM ar ketPr i ceNe t wor k c ost b r e ak d ownPr oduc t Dr ive rB udge te dUni tC os tAc tua lUni tC os tT ota lC os tR egi onPr of i t ab i l i t y( C ont r i but i on m a r gi n)R egi onPr oductC us t om erDi r e c t Cost B r e ak d ownR egi on 1A ct i vi t y???A dver t i s i ng amp。 pr om t i onD i r ect de pr eci at i onO per at i ve TaxesC api t al i zabl e Expens esN at i onalVol um eD r i verO p e r at i n g r e t u r n on c ap i t al e mp l oye dC ont r i but i onN et ope r at i ng a s s et s :? Fi xed? W or ki ng c api t al? I nt angi bl es? D ef er r ed t axesC ont r i but i on/ ope r at i ng a s s et s :A l l ocat ed O per at i ng Es pens es / C ont r i but i on:O per at i ng a s s et s / C api t al Em pl oyed:Pr et ax O per at i ng R O C E:Y T D O U T L O O K BE N CH .Exhi bi t 5ILLUSTRA TIVEB udget A ct ualLa stYe a r B udge tC ur r e ntYe a rYTD F ULL YEA RLa stYe a r B udge tC ur r e ntYe a r 中國最大的管理資源中心 第 10 頁 共 28 頁 Shared Resource Units (SRU) and Corporate Center Units (CCU) reports SRU and CCU reports, shown in Exhibit 7, should facilitate an understanding and control of the evolution of costs of the services they provide to the units. Cost and capital efficiency reports should reflect the cost structure of the Unit vs. the budget, historical trends and benchmarks, and allow decisionmakers within these units to easily determine the elements, activities or investments that are driving variations from goals. CA S H INFLOWS A ND OUTFLO WS NOT MANA GED BY CFUs? Nat iona l? Inte rna ti ona l? Repa yme nts (Nat iona l or Int e rna ti ona l)? Conce ss ion T a x? Munici pa l T a x? Em ploye e 抯 P a yroll? Othe r pa yme nts re quire d bythe la w? P e nsions ? Nat iona l ? Inte rna ti ona l ? S uppli e rsMana ge d by Corpora te F ina nc eInte re stsP a yme ntsTa xe sLoa nsINFLOWSOUTFLOWSMana ge d by Corpora te F ina nc eMana ge d by Corpora te F ina nc eMana ge d by Huma n Resourc e s(re spond to poli c ie s or cont ra c tse stabl ished by e a c h c ountry 抯la ws )Exhi bi t 6 中國最大的管理資源中心 第 11 頁 共 28 頁 SRUs and CCUs reports will also contain variances to the budgeted costs that were caused by inaccuracies in the estimation of unit costs. (see Attribution of Variances on page 22). Corporate Finance Report The Corporate Finance Report (Exhibit 8) is unique and therefore it should include indicators for the management of the financial part of the Return on Equity. As with the rest of the reports, they should reflect performance vs. budget, historical trends and benchmarks, and allow to easily detect the elements that are driving the levels of cost or efficiency away or toward corporate goals. BASIC SET O F DET AIL