From the Chief Executive Officer
We live in a changed world – economically, socially and environmentally. As with many corporations across the global markets, we have learned much from the events of this past year and are taking on board the shift in attitudes and expectations that are shaping corporate stewardship.

Despite the impacts of the global recession, we achieved steady progress in all areas of operations during 2009. Rail operations maintained its high service standards and steady patronage and we embarked on our next round of rail asset improvement under Railway Vision 2020. Property development rebounded in the latter part of the year with strong uptake in residential properties adjacent to our network. New rail projects are also taking shape with the advances in planning and design as well as construction commencement of the West Island Line.

Significantly, we have taken on a larger international profile. Our business portfolio expanded to include the Stockholm Metro operating concession and the joint venture partnership for the Melbourne Metropolitan Train network franchise. In mainland China, with the opening of the Beijing Line 4, we are steadily gaining a national reputation as a preferred partner in rail development and operations.

Such progress in today's world would not be possible without the firm grounding in sustainable business practices, in particular those related to social advancement and environmental protection. Amongst the milestones achieved during the year, we issued a Supplier Code of Practice that guides social and environmental best practices in our supply chain. We are, as well, in the first steps of devising a carbon footprint tracking system for rail line construction that will eventually guide emissions reductions in future projects and we are leading the local property industry with progressive building practices that deliver to customer aspirations while establishing long-term environmental value.

These efforts bring international recognition. We have maintained our inclusion in the DJSI and FTSE4Good indices for the year and, for the first time, have been given the Gold Class award within the global travel and tourism industry sector from Sustainable Asset Management (SAM). We were also named Sector Leader and Sector Mover in SAM's corporate sustainability assessment undertaken in 2009.

Progress, however, has its challenges. We are competing on a global scale for the material resources, technical skills and management expertise required for the surge in national infrastructure projects. Closer to home, we are experiencing more staff retirement after 30-plus years of service. Proactive responses are well under way, in particular with people and needed technical skills. We are laying the groundwork in leadership succession, as well as mobilising technology and knowledge management platforms to enhance efficiencies. Through efforts with the local construction industry, we are promoting the needed technical training to build Hong Kong's next-generation workforce.

As we grow, we recognise that our stakeholders are increasingly diverse and more decisive in what we do and how we do it. This past year proved particularly poignant in this respect. The Express Rail Link and the redesign of the Nam Cheong Station property development provided us with the opportunity to engage and communicate with stakeholders while constructively influencing Hong Kong's sustainable development. Stakeholder voices have guided decisions in many areas of these projects.

We are increasingly perceived as a societal asset, therefore responsible to addressing the expectations of the communities we serve. Although still on the learning curve when responding to social aspirations, our established practice of early stakeholder inclusion and active engagement serves us well. I am pleased to say that our stakeholder strategy for the West Island Line is our best practice in action. We continue to build the internal skills and knowledge base to anticipate situations when navigating project issues with stakeholders and the public.

In closing, I wish to note that this is our tenth year in sharing with you our sustainability journey. This demonstrates our commitment of continuous improvement in all that we do. Most importantly, it is about how sustainability has become a seamless driver of our business strategy and guides the responsible stewardship of the organisation we have been entrusted with.

We look forward to yet another decade of sharing our journey with you.

CK Chow