Annual Financial Review

3. REVENUE (CONTINUED) a. Revenue recognition in relation to contract liabilities In HK$ million 2020 2021 Revenue recognized that was included in the contract liability balance at the beginning of the year 1,361 1,423 b. Unsatisfied long-term fixed-price contracts In HK$ million 2020 2021 Aggregate amount of the transaction price allocated to long-term fixed-price contracts that are partially or fully unsatisfied as at December 31, 18,670 20,107 As at December 31, 2021, management expected that 57% and 24% (2020: 58% and 25%) of the transaction price allocated to the unsatisfied long-term fixed-price contracts would be recognized as revenue during the first and second year respectively after the end of the reporting period. The remaining 19% (2020: 17%) would be recognized as revenue in the periods afterwards. The amount disclosed above does not include unsatisfied performance obligation that is related to the Groups' contracts with customers with duration of one year or less and contracts with customers billed directly according to performance completed to date. 4. OTHER GAINS/(LOSSES), NET 2020 2021 In HK$ million Negative goodwill on acquisition of subsidiaries Write-off of intangible assets 692 (302) Loss on disposal of subsidiaries, net Others 5. PROFIT BEFORE INCOME TAX Profit before income tax was stated after charging the following: (35) 6 361 (8) In HK$ million 2020 2021 Cost of inventories sold 5,130 6,648 Cost of sales, excluding inventories sold 10,573 10,081 Depreciation of property, plant and equipment 1,118 1,234 Depreciation of right-of-use assets - land and buildings 1,302 1,338 Depreciation of right-of-use assets – network capacity and equipment 175 139 Amortization of land lease premium - interests in leasehold land 13 13 Amortization of intangible assets 1,327 1,500 Amortization of fulfillment costs 481 393 Amortization of customer acquisition costs 925 1,035 26

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