This report covers the 2006 financial year for the Corporation. It marks our seventh year of reporting to our stakeholders and other interested parties about our sustainable development journey. While we cannot include all events and initiatives undertaken during the year, we have endeavoured to demonstrate a balanced and inclusive review of the organisation's activities and strategy in terms of our economic, social and environmental progress for the year. The Report covers MTR Corporation's operations in Hong Kong and in its international centres, including mainland China, Southeast Asia, the Middle East and Europe where specified.

In reporting our performance for 2006 we are broadly moving on from our previous two years in treatment of processes and systems (2004) and stakeholder engagement (2005) to this year, in which we address our value proposition, which combines the two dynamics in performance management. This illustrates our chosen theme of convergence.

Throughout this Report we quantify value in terms of sustainable competitive advantage and the outcomes for our business operations and impact on our stakeholders, more specifically staff, customers, community, business partners and investors. We define competitive advantage as the combined articulation of risk management (cost leadership), business strategy (MTR Diamond Vision) and differentiation (engagement). By way of illustrating this, we include in the Report a number of initiatives and case studies that demonstrate active sustainable competitive advantage.

This year, our discussions highlight workplace achievements that support our business case for sustainable development. This reflects the evolution of our reporting mechanism from previous years' baseline data and process focus to discussions on the application of strategy that drives the systematic management of practical corporate issues while supporting the business case for sustainability. We add further insight into this reporting strategy and our view on the Corporation's evolving sustainability journey through an interview with our Sustainability Development Manager. Our seven-year history of reporting under international best practices and benchmarking exercises has helped foster a new direction in thinking and how and on what we report. This year's Report reflects the start of this direction and is summarised in the interview.

We have elected for 2006 to report under the Global Reporting Initiative (GRI) - 2002 Sustainability Reporting Guidelines. However, in light of the G3 Guidelines, we have adopted a new approach to defining and managing content, so this Report could be considered a consolidated form of the cited Discussions of Management Approach, with supporting data available online within this website. The managing of the materiality and inclusiveness of content as they affect our business case is explained in the Materiality Map discussions.

We also continue to include and integrate other standards and benchmarking practices that we consider relevant to industry, stakeholders and our sustainability business case. This year, we introduce a self-assessed graphic summary of our six-year performance record under the principles identified in the Maturity Matrix used in the directive BS8900:2006 Guidance for Managing Sustainable Development, issued by the BSi Group.

The 2006 year marked the final year of the four-year assurance programme undertaken by PricewaterhouseCoopers Hong Kong. Their work focuses on the critical social responsibility, environmental and economic contributions of the Corporation as identified by our priority risk management model. Their independent assurance report of this Report.

Again, the Corporation values reader feedback and dialogue with stakeholders. These serve as independent sources of information and as constructive critiques on how we report and what areas are in need of our attention. We encourage your feedback to help us deliver the information you seek better. Contact the Sustainability Development Manager at sdmngr@mtr.com.hk for further information or with any queries regarding our reporting mechanism