Corporate Structure

The Mass Transit Railway Corporation, a statutory corporation, was established in 1975 under the Mass Transit Railway Corporation Ordinance and commissioned to build and operate Hong Kong’s underground mass transit system. In 2000, the MTR Corporation Limited (MTRCL, the Company) listed on the Hong Kong Stock Exchange. At year-end 2004, approximately 76%In addition, the Company was informed by the Hong Kong SAR Government that, as at 31 December 2004, approximately 1.37% of the Company's shares were held for the account of the Exchange Fund. The Exchange Fund is a fund established under the Exchange Fund Ordinance (Cap.66 of the Laws of Hong Kong) under the control of the Financial Secretary of the Government. of the Company’s shares was held by the Financial Secretary Incorporated in trust on behalf of the Hong Kong SAR Government. The Company operates under the Mass Transit Railway Ordinance (cap.556 of the Laws of Hong Kong) which oversees the framework for our business and operations. Being a publicly listed company, we are subject to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. Further information on the corporate structure and governance is available in the 2004 Annual Report and through the Investor Relations Department, investor@mtr.com.hk.

In February 2004, the Hong Kong SAR Government announced the invitation to the Company and the Kowloon-Canton Railway Corporation (KCRC) to commence discussions on the possible merger between the two entities. The Company and KCRC submitted a joint merger report to the Government on the possible merger between the Company and the KCRC in September 2004. In the event that this proposed merger takes place, significant changes in the structure and operations of the Company will unfold. As in all major corporate mergers, we face the critical issues of integrating operations, management and workforce. Our strategy is to achieve the key parameters set by Government while assuring stakeholders of responsible investment, maintaining transparency when communicating with our stakeholders, and assuming best practice for long-term sustainability of the new entity.