Annual Financial Review

1. BASIS OF PREPARATION (CONTINUED) The Groups have not early adopted any other new or amended Hong Kong Financial Reporting Standards that are not yet effective for the current accounting period. As at December 31, 2021, the current liabilities of the Groups exceeded their current assets by HK$5,068 million. Included in the current liabilities was current portion of contract liabilities of HK$1,513 million recognized for which no direct cash settlement is required but will gradually reduce over the contract terms through the satisfaction of performance obligations. Also, considering the Groups' ability to generate net operating cash inflows and raise additional debt financing, and the undrawn banking facilities totaling HK$9,878 million as at December 31, 2021, management considers the Groups are able to meet their liabilities as and when they fall due within the next twelve-month period. Accordingly, these consolidated financial statements have been prepared on a going concern basis. The financial information of the Trustee-Manager relating to the years ended December 31, 2020 and 2021 included in this preliminary announcement of annual results for the year ended December 31, 2021 does not constitute the Trustee-Manager's statutory annual financial statements for those years but is derived from those financial statements. Further information relating to those statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance (Cap. 622) is as follows: - - The Trustee-Manager's financial statements combined with the HKT Trust and HKT Limited consolidated financial statements (collectively the "Combined Financial Statements") for the year ended December 31, 2020 have been delivered to the Registrar of Companies and the Combined Financial Statements for the year ended December 31, 2021 will be delivered to the Registrar of Companies in due course. The Trustee-Manager's auditor has reported on the financial statements of the Trustee-Manager for both years. The auditor's reports were unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its reports; and did not contain a statement under sections 406(2), 407(2) or (3) of the Hong Kong Companies Ordinance (Cap. 622). Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Groups make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Management has also made judgements in applying the Groups' accounting policies. 22 22

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