We are pleased to present to you the fourth report of our work in progress towards best practice in sustainable development. We review our performance, mark achievements and reflect on our shortfalls for the 2004 fiscal year. We address the road ahead both within our operations, in transforming our mindset to be world-class enterprise, and, externally, as a growing corporation expanding both business disciplines and operations across Asia and in Europe.

It has been a learning year for us and a time to pause and deliberate our future strategy. We are faced with events and opportunities that will dramatically alter the company's footprint as we know it today. We have focused this past year on the necessary corporate strategy and supporting management infrastructure to meet the risks and opportunities that lay in the years ahead.

The 2004 report has been revamped to bring better comparability and a focus on specific rail transport industry issues in sustainable development. We have structured this online version to interface with other corporate documents available on our website and, to support information given in our printed report. This integration of information gives a detailed view of our sustainability strategy and activities supported by further reading links that bring in-depth treatment and measurable indicators on our progress for the year. As in previous years, we have applied the GRI Guidelines in the preparation of this report.

Continuing the improvement of the data collection and the reporting systems that underpin our identified priority risk areas have been the principal undertakings in our assurance programme during 2004. This is the second of our four-year programme engaging PricewaterhouseCoopers as our assurance auditors. They have assisted and guided us in processes and have provided their report.

By compiling this report we benchmark ourselves against the best in overall international market practices and against our peers in the rail services industry. Just as importantly, we use this exercise as a means to measure and focus on our own basic framework for building our sustainable future. This framework and it supporting systems are the tools with which we will address our future risks and opportunities.

We welcome comments and dialogue with readers of this report. Previous years' feedback has provided invaluable insight into our reporting standards and we look forward to your continued correspondence in helping us to improve ourselves and ultimately, the world in which we operate.

Contact: Sustainability Development Manager, sdmngr@mtr.com.hk