Annual Report 2019

169 ANNUAL REPORT 2019 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) 4.2 Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see above), that the directors of the Company have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements. Control over investees accounted for as subsidiaries Certain entities are considered to be subsidiaries of the Company despite the interests therein are not more than 50% of the issued share capital of the relevant entities. Based on the contractual power pursuant to the relevant shareholders’ agreements between the Group and the other shareholders, the Group has voting rights in the respective investees sufficient to give it the practical ability to direct the relevant activities of each of these investees unilaterally, and hence has control over these investees. Accordingly, those entities are accounted for as subsidiaries of the Company. Further details are set out in note 44. 5. 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. 2019 2018 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 8,243 9,544 Warehousing services income, representing temporary storage of cargos and containers, customs clearance services and the auxiliary services 467 459 Revenue from contracts with customers 8,710 10,003 Gross rental income that are fixed from investment properties (Note) 188 157 8,898 10,160 Note: Direct operating expenses incurred for gross rental income from investment properties amounted to HK$56 million (2018: HK$68 million) during the year ended 31 December 2019.