Annual Report 2023

131 ANNUAL REPORT 2023 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) 3.2 Key sources of estimation uncertainty (continued) Deferred tax asset As at 31 December 2023, a deferred tax asset of HK$6 million (2022: HK$32 million) in relation to unused tax losses has been recognised in the consolidated statement of financial position. No deferred tax asset has been recognised on the tax losses of HK$1,072 million (2022: HK$1,570 million) due to the unpredictability of future profit streams. The realisability of the deferred tax asset mainly depends on whether sufficient future profits or taxable temporary differences will be available in the future, which is a key source of estimation uncertainty. In cases where the actual future taxable profits generated are less or more than expected, or change in facts and circumstances which result in revision of future taxable profits estimation, a material reversal or further recognition of deferred tax assets may arise, which would be recognised in profit or loss for the period in which such a reversal or further recognition takes place. Useful lives of property, plant and equipment The management of the Group determines the estimated useful lives and related depreciation charges for its property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions. It could change significantly as a result of technical innovations and expected actions by competitors or potential competitors in response to changes in market demands. The management will increase the depreciation charge where useful lives are less than previously estimated lives, or will write down or write off technically obsolete or non-strategic assets that have been abandoned or sold. 4. REVENUE The principal activities of the Group comprise ports operation, bonded logistics operation and property investment. The following is an analysis of the Group’s revenue from its major services offered during the year. 2023 2022 HK$’million HK$’million Terminal handling charge, representing loading of cargos and containers on and off vessels at the Group’s port terminals, stevedoring and the auxiliary services 10,680 11,833 Warehousing services income, representing temporary storage of cargos and containers, customs clearance services and the auxiliary services 593 522 Revenue from contracts with customers 11,273 12,355 Gross rental income from investment properties (Note) 209 190 11,482 12,545 Note: Direct operating expenses incurred for gross rental income from investment properties amounted to HK$47 million (2022: HK$55 million) during the year ended 31 December 2023.