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Mainland of China and International Business

Introduction

Outside of Hong Kong, we invest selectively in rail-related projects, including property developments, which we believe will generate sustainable returns within clear risk parameters.

Currently, our subsidiaries and associates are involved in building, operating and maintaining mass transit railway systems and providing related services in the Mainland of China, the United Kingdom, Sweden and Australia. In the Mainland of China, we are also involved in the leasing of retail space, providing estate management services and developing properties.

In order to ensure good corporate governance and management of financial and reputational risks, we exercise oversight over our subsidiaries and associates. Beyond this, we are committed to promoting best practices in all areas where we have substantive control or influence.

In this section of the report, we highlight key aspects of the sustainability performance of railway operations managed by our subsidiaries around the world, namely, Shenzhen Metro in the Mainland of China, Stockholm Metro in Sweden and Melbourne Metro in Australia. A data table containing key performance indicators (KPIs) for these railway operations is also available in Performance Metrics.

 

Learn more…

 

Please refer to our Annual Report 2014.

 

Management Approach

GUIDING FRAMEWORK

Governance of Subsidiaries and Associates

Following the changes affecting our Executive Directorate in 2014, the Chief Executive Officer is responsible for oversight on governance of subsidiaries and associates. He is supported in this role by the Human Resources Director and the Operations Director.

Management Directives

Our wholly-owned and majority-owned subsidiaries are mandated to adopt a set of management directives relating to internal controls, consultation and reporting:

  • Internal controls — Subsidiaries must implement appropriate procedures and management systems to ensure compliance with relevant laws and regulations, as well as the Company’s specific requirements on safety, enterprise risk and asset management, among other issues.
  • Consultation — Headquarters must be consulted on matters relating to material variation of the concession or franchise agreement, appointment of senior managers, litigation and non-compliance with relevant laws and regulations, among other issues.
  • Reporting — Subsidiaries must provide timely reporting on financial, operational and safety performance.

Operating Agreements

Our subsidiaries and associates participate in various forms of agreements with local authorities, including Operations & Maintenance (O&M), Public-Private Partnerships (PPPs), and Build-Operate-Transfer (BOT) arrangements. Our ability to influence environmental, social and governance impacts through the activities of our subsidiaries and associates is largely determined by the specific terms of these agreements as well as local conditions and circumstances.

Code of Conduct

All members of staff, irrespective of their location of employment, are expected to abide by the Code of Conduct. They should not only conduct themselves in accordance with the highest ethical standards at all times, but also identify and address any instances of behaviour by other members of staff that are not in accordance with the Code.

Fair and Ethical Business

We promote a culture of fair and ethical business practices across all of our subsidiaries and associates. With respect to prevention of bribery and illegal practices, whenever the laws or customs of another country impose stricter standards than our own anti-bribery regime in Hong Kong the higher standard always prevails.

Shared Support Services

A number of business units in Hong Kong provide shared support services to promote the adoption of best practices in our subsidiaries and associates. For example, the Corporate Finance and Development team provides support for evaluation and formulation of investment proposals, the Human Resources Division provides assistance on strategic issues relating to staff, and our Operations and Safety team ensures full compliance with the corporate safety policy and strategic plan.

KEY PRINCIPLES AND PROCESSES

Assurance and Audit

We conduct thorough assurance and regular audits on all subsidiaries and associates, including a safety assurance assessment and enterprise risk management review, before the start of operations and following any substantive change in operational or business activity.

Local Talent

In general, our subsidiaries and associates are run by local teams; whenever possible, we bring on board people who share our values and contribute to fostering our unique corporate culture in their local context.

Learning and Sharing

In order to promote the flow of information and development of an open, trusting relationship, members of staff from all major business units in Hong Kong are encouraged to develop relationships with their counterparts in our subsidiaries and associates.

Working closely with colleagues from around the world creates opportunities for learning, such as the implications of severely cold weather on our operations in Stockholm or of the Victorian heritage infrastructure on our operations in Melbourne. It also provides opportunities for sharing; for example, many members of our staff enjoyed Metro Trains Melbourne’s Dumb Ways to Die safety campaign and discussed it with their friends and family in Hong Kong.

Building on Firm Foundations

We are exercising prudence in our approach to the continued expansion of our global footprint. When considering future plans outside of Hong Kong, we have a strong preference for consolidating our position in countries and cities where we already have a presence.

 

Did you know?

 

Dumb Ways to Die is a public service campaign created by Metro Trains Melbourne to promote rail safety, featuring 21 characters killing themselves in increasingly stupid ways and culminating in the last 3 characters being killed by trains due to unsafe behaviour.

When it was launched in November 2012, the campaign video went viral on YouTube. Two years later, it continues to be highly popular with audiences around the world. By the end of December 2014, it had attracted over 95 million views.

Click here to check out for yourself what all the fuss is about.

 

Links to Other Sections

About MTR — This section contains an introduction to our subsidiaries and associates that are not covered in this section of the report, either because they are not currently involved in railway operations or they are not majority-owned and controlled by the Company.

Staff — An important challenge that we are facing as a consequence of expanding our global footprint is how to translate our values and extend our corporate culture to different geographical and business contexts.

Future Plans Outside of Hong Kong — This section contains a summary of our future plans outside of Hong Kong, including a number of exciting new projects that are currently underway in the Mainland of China, Australia and Europe.