EMTRAR20

Keep Cities
Moving
Annual Report 2020
Stock code: 66
SUSTAINABLE
CARING
INNOVATIVE
CONTENTS
For over four decades, MTR has evolved to become one of the
leaders in rail transit, connecting communities in Hong Kong, the
Mainland of China and around the world with unsurpassed levels
of service reliability, comfort and safety. In our Annual Report
2020, we look back at one of the most challenging years in our
history, a time when our Company worked diligently in the midst
of an unprecedented global pandemic to continue delivering high
operational standards while safeguarding the well-being of our
customers and colleagues – striving, as always, to keep cities moving.
Despite the adverse circumstances, we were still able to achieve

our objective of planning an exciting strategic direction. This report
also introduces our Corporate Strategy, “Transforming the Future”,
which outlines how innovation, technology and, most importantly,
sustainability and robust environmental, social and governance
practices will shape the future for MTR. In addition, we invite you Keep Cities
to read our Sustainability Report 2020, which covers how relevant Moving
and material sustainability issues are managed and integrated into
our business strategies. We hope that together, these reports offer
valuable insights into the events of the past year and the steps we
plan on taking toward helping Hong Kong and other cities we serve
realise a promising long-term future.
Annual Report Sustainability

2020 Report 2020
Overview Business Review and Analysis

2 Corporate Strategy Business Review
4 Highlights 36 – Hong Kong Transport Operations
7 Key Awards 46 – Hong Kong Station Commercial Businesses
8 Key Figures 50 – Hong Kong Property and Other Businesses
10 Our Network 60 – Hong Kong Network Expansion
12 Chairman’s Letter 66 – Mainland of China and International Businesses
16 CEO’s Review of Operations and Outlook 74 Corporate Responsibility
80 Human Resources
83 MTR Academy
84 Financial Review
94 Ten-Year Statistics
96 Investor Relations
Cover image: composite photograph at Kai Tak Station
Transport Property and Other
Operations (p.36) Businesses (p.50)
MTR SHOP
Network
Expansion (p.60)
Station Commercial
Businesses (p.46)
Mainland of China and

International Businesses (p.66)
Corporate Governance Financials and Other Information

98 Corporate Governance Report 185 Contents of Consolidated Accounts and Notes
123 Audit Committee Report 186 Independent Auditor’s Report
126 Risk Management 190 Consolidated Profit and Loss Account
130 Risk Committee Report 191 Consolidated Statement of Comprehensive Income
132 Capital Works Committee Report 192 Consolidated Statement of Financial Position
133 Remuneration Committee Report 193 Consolidated Statement of Changes in Equity
138 Board and Executive Directorate 194 Consolidated Cash Flow Statement
153 Key Corporate Management 195 Notes to the Consolidated Accounts
154 Report of the Members of the Board 271 Glossary
Annual Report 2020 1

CORPORATE STRATEGY
Our Vision
We aim to be an
Hong Kong Core
internationally- Attain full potential of Hong Kong
recognised company Core Business and advance our
that connects and social objectives
grows communities
with caring,
innovative and
sustainable services.
Our Purpose
Keep Cities Moving OUR
Our Values CORPORATE
•
•
Excellent Service
Value Creation STRATEGY
• Mutual Respect
We will embed sustainability,
• Enterprising Spirit
Environmental, Social and
Governance principles into our
Our Cultural businesses and operations with the
aim of creating value for all
Focus Area our stakeholders.
• Participative
Communication
• Collaboration
• Effectiveness &
Innovation
Mainland China and
• Agility to Change
International Business
Expand into new hubs and new products
across Mainland China and International
Business, maintaining a steady growth
2 MTR Corporation
3 STRATEGIC 5 ENABLERS
PILLARS Transformation
Management Office
Overview
• Dedicated to enable and deliver
the strategic transformation
• Engage MTR stakeholders for trust,
commitment & results
Organisation &
Processes
Business Review and Analysis

New Growth Engine • Clearer accountabilities and more
Invest in new technologies and effective decision-making
mobility services to reinforce our • Simplify and streamline processes
core for long-term growth
Technology
• Utilise data and analytics for
decisions and opportunities
Corporate Governance
• Invest in focus areas & systems
to improve effectiveness
and efficiency
Finance
• Redefine accountability and profit/
loss ownership of business units Financials and Other Information
• Establish & track long-term
financial goals for
financial sustainability
People
• Build new capabilities for
staff development
• Work smarter with innovative
methods and technology

HIGHLIGHTS
Hong Kong
Businesses
Tuen Ma Line
Phase 1
Commenced Service
New Signalling System and

New Trains of East Rail Line
COVID-19 Commissioned
Challenges
Awarded LOHAS
Park Property
Packages 12 and 13 and
1.3+ billion The Southside

Package 5
Total Patronage in Hong Kong
Opened
The LOHAS
99.9 % Shopping Mall
Passenger Journeys On-time
Popcorn Took on Full Interest of

Telford
Telford Plaza II and
PopCorn 2
Won
Mainland of
Shenzhen Metro Line 13 and
China and
Sweden Mälartåg Train Service
International
Businesses
4 MTR Corporation
Overview
Tuen Ma Line Full Line Operation expected by
Third Quarter 2021
Proceed with
Tung Chung Line Extension,

Tuen Mun South Extension and
Growth
Kwu Tung Station and
and
Northern Link
Outlook
Proceed with Technical Studies of
Siu Ho Wan Depot Site
Topside Property Development
Over
23,000 Residential Units and
2 Shopping Malls
under Development
Smart Mobility
Financials and Other Information
to Enhance Customer Experience
COVID-19
Challenges and “New Normal”

HIGHLIGHTS
3.4%
Voluntary Staff
Turnover Rate
Environmental, in Hong Kong
Social and
Governance
4.8 Average
Training Days
per Employee in Hong Kong
Fare Rebates
offered to passengers as
Relief Measures HK$ 15.4 million
Donated and Sponsored to
Charitable and Other Organisations
Rental Concessions
Granted
to Tenants in Stations and
Adopted
Shopping Malls
Best Practices
Issued
US$ 1.2 billion
10-year Green Bond
0.58
Reportable Events
per million passengers carried
in our Heavy Rail and
Light Rail networks
6 MTR Corporation
KEY AWARDS
Hong Kong Environmental, Social
Transport Operations and Governance
Public Transportation Award, The Asset Triple A Country Awards 2020
Hong Kong Service Awards 2020 Best Green Bond Award, Hong Kong
East Week Best Issuer for Sustainable Finance, Hong Kong
Public Transportation Service Award, The Asset
Sing Tao Service Awards 2019 15 Years Plus Caring Company Logo
Sing Tao Daily Hong Kong Council of Social Service
Public Transportation Service Award – Elite Awards 2019 2019/2020 Corporate and Employee Contribution
Ming Pao Weekly Programme
Overview
Hong Kong Power Brand Award, Diamond Award
HKIM Market Leadership Award 2019/2020 3rd Highest Donation Award for CARE Scheme
Hong Kong Institute of Marketing 4th Top Fund-raiser Award
The Community Chest
2020 Hong Kong Digital Transformer,
IDC Digital Transformation Awards 2020 HR Appreciation Awards 2020
International Data Corporation Grand Winner – COVID-19 Special Award
(Corporate)
Winner – COVID-19 Special Award (Corporate)
Hong Kong Property Winner – HR Best Practice – Compensation &

Benefits
and Other Businesses Winner – HR Best Practice – Training &
ELEMENTS – Excellence Service Award, Development (2 awards)
Hong Kong Service Awards 2020 Winner – HR Best Practice – Business Partner
East Week Classified Post
ELEMENTS – Best Property Management Award in Greater Bay Area Corporate Sustainability
Occupational Safety and Health – Gold Award, Awards 2020 – GBA’s Outstanding Corporation
The 7th Best Property Safety Management Award Social Sustainability Award – Sustainable
Occupational Safety and Health Council and Construction Cities and Communities
Industry Council Environmental Sustainability Award –
Climate Action
Telford Plaza – Shopping Mall Award for Warm Service, Metro Finance
Hong Kong Service Awards 2020
East Week Corporate Responsibility Award,
Hong Kong Service Awards 2020
Telford Plaza – Top 25 My Favourite Shopping Mall Events
East Week
Hong Kong Economic Times
Public Utility Sector – Excellence Award in
Paradise Mall – Best Use of KOL, Digital Ex Award 2020
Anti-pandemic Measures, Barrier-free Access
Metro Finance Facilities and Corporate Responsibility
Two ifc – Outstanding Team (Private Housing – Non- 01 Gold Medal Awards 2020
residential) Excellence Award, HKIH, Elite Awards 2020 HK01
The Hong Kong Institute of Housing
InnoESG Prize 2020
UNESCO HK Association Global Peace Centre,
Lions Club HKIFC, Rotary Action Group for Peace and
Mainland of China and SocietyNext Foundation
International Businesses
Beijing MTR – 2020 GoldenBee CSR China Honor Roll –
GoldenBee Enterprise
GoldenBee Think Tank & China Sustainability Tribune
Investor Relations
Shenzhen MTR – Outstanding Foreign Enterprises in 2020 Bronze Award – General Category,
Shenzhen Global Investment Promotion Conference 2020 Best Annual Reports Awards
Commerce Bureau of Shenzhen Municipality, Shenzhen Hong Kong Management Association
Association of Enterprises with Foreign Investment
Two awards received in 2020 International Annual
MTRX – Ranked 3rd in the Swedish Innovation Index 2019 Reports Competition (ARC) Awards
CTF Service Research Centre and Karlstad Business School MerComm, Inc.
Sydney Metro North West Line – Infrastructure Project of
the Year
Sydney Metro City & Southwest Line – Government
Partnership Excellence Award
National Infrastructure Awards 2020
Infrastructure Partnerships Australia

KEY FIGURES
2020 2019
HK$ million % HK$ million % Inc./(Dec.) %
Total revenue
Recurrent business revenue
– Hong Kong transport operations 11,896 28.0 19,938 36.6 (40.3)
– Hong Kong station commercial businesses 3,269 7.7 6,799 12.5 (51.9)
– Hong Kong property rental and management businesses 5,054 11.9 5,137 9.4 (1.6)
– Mainland of China and international railway, property rental
and management subsidiaries 21,428 50.3 21,085 38.7 1.6
– Other businesses 894 2.1 1,545 2.8 (42.1)
42,541 100.0 54,504 100.0 (21.9)
Property development business revenue
– Mainland of China property development – – – – n/m
Total revenue 42,541 100.0 54,504 100.0 (21.9)
Total EBITDA(1)
Recurrent business EBITDA
– Hong Kong transport operations (422) (3.6) 5,909 28.1 n/m
and management subsidiaries 533 4.6 1,325 6.3 (59.8)
– Other businesses, project studies and business
development expenses (1,881) (16.1) (2,288) (10.9) 17.8
5,194 44.5 15,351 73.0 (66.2)
Property development business EBITDA
– Hong Kong property development 6,491 55.6 5,707 27.1 13.7
– Mainland of China property development (13) (0.1) (25) (0.1) 48.0
6,478 55.5 5,682 27.0 14.0
Total EBITDA 11,672 100.0 21,033 100.0 (44.5)
Total EBIT (2)

Recurrent business EBIT
EBIT
– Hong Kong transport operations (5,408) (81.0) (591) (4.4) (815.1)
and management subsidiaries 261 3.9 1,089 8.1 (76.0)
– Other businesses, project studies and business
development expenses (1,949) (29.2) (2,353) (17.4) 17.2
Share of profit of associates and joint venture 605 9.1 288 2.1 110.1
196 3.0 7,819 57.9 (97.5)
Property development business EBIT
– Hong Kong property development 6,491 97.2 5,707 42.3 13.7
– Mainland of China property development (13) (0.2) (25) (0.2) 48.0
6,478 97.0 5,682 42.1 14.0
Total EBIT 6,674 100.0 13,501 100.0 (50.6)
Interest and finance charges (1,004) (859) 16.9

Investment property revaluation (loss)/gain (9,190) 1,372 n/m
(Loss)/profit before taxation (3,520) 14,014 n/m
Income tax (1,301) (1,922) (32.3)
(Loss)/profit for the year (4,821) 12,092 n/m
Non–controlling interests 12 (160) n/m
(Loss)/profit for the year attributable to shareholders
of the Company (4,809) 11,932 n/m
(Loss)/profit for the year attributable to shareholders
of the Company arising from:
Recurrent businesses (1,126) 4,980 n/m
Property development businesses 5,507 5,580 (1.3)
Underlying businesses 4,381 10,560 (58.5)
Investment property revaluation (loss)/gain (9,190) 1,372 n/m
Total (loss)/profit for the year attributable to
shareholders of the Company (4,809) 11,932 n/m
Notes
1 EBITDA represents operating profit/(loss) before depreciation, amortisation, variable annual payment and share of profit of associates and joint venture.
2 EBIT represents profit/(loss) before interest, finance charges and taxation and after variable annual payment.
n/m: not meaningful
8 MTR Corporation
2020 2019 Inc./(Dec.) %
Financial ratios
EBITDA margin(3)(in %) 12.2 28.1 (15.9)% pts.
EBITDA margin(3) (excluding Mainland of China and international subsidiariesδ ) (in %) 22.1 42.0 (19.9)% pts.
EBIT margin(4) (in %) (1.0) 13.8 (14.8)% pts.
EBIT margin(4) (excluding Mainland of China and international subsidiariesφ ) (in %) (3.2) 19.3 (22.5)% pts.
Net debt-to-equity ratio(5) (in %) 22.5 15.4 7.1% pts.
Return on average equity attributable to shareholders of the Company arising from
underlying businesses (in %) 2.4 5.8 (3.4)% pts.
Interest cover(6) (times) 8.2 15.3 (7.1) times
Overview
Share information
Basic (loss)/earnings per share (in HK$) (0.78) 1.94 n/m
Basic earnings per share arising from underlying businesses (in HK$) 0.71 1.72 (58.7)
Ordinary dividend per share (in HK$) 1.23 1.23 –
Share price at 31 December (in HK$) 43.35 46.05 (5.9)
Market capitalisation at 31 December (HK$ million) 267,943 283,574 (5.5)
Operations highlights

Total passenger boardings for Hong Kong (million)
Domestic Service 1,145.0 1,568.2 (27.0)
Cross-boundary Service 7.6 104.2 (92.7)
High Speed Rail 1.0 16.9 (93.9)
Airport Express 3.1 15.8 (80.5)
Light Rail and Bus 154.0 207.3 (25.8)
Average number of passengers (thousand)
Domestic Service (weekday) 3,406 4,658 (26.9)
Cross-boundary Service (daily) 20.9 285.4 (92.7)
High Speed Rail (daily) 35.6^ 46.4 (23.2)
Airport Express (daily) 8.4 43.2 (80.6)
Light Rail and Bus (weekday) 438.0 598.6 (26.8)
Average fare (in HK$)
Domestic Service 7.82 8.11 (3.6)
Cross-boundary Service 27.23 29.08 (6.4)
High Speed Rail 86.44 88.73 (2.6)
Airport Express 45.52 64.16 (29.1)
Light Rail and Bus 3.12 3.27 (4.4)
Proportion of franchised public transport boardings (in %) 45.3 47.4 (2.1)% pts.
Notes
3 EBITDA margin represents total EBITDA (excluding profit on Hong Kong property development) as a percentage of total revenue.
4 EBIT margin represents total EBIT (excluding profit on Hong Kong property development and share of profit of associates and joint venture) as a percentage of total
revenue.
5 Net debt-to-equity ratio represents loans and other obligations, short-term loans, obligations under service concession and loans from holders of non-controlling interests
net of cash, bank balances and deposits in the consolidated statement of financial position as a percentage of total equity.
6 Interest cover represents operating profit before depreciation, amortisation, variable annual payment and share of profit of associates and joint venture divided by gross
interest and finance charges before capitalisation, and utilisation of government subsidy for Shenzhen Metro Line 4 operation.

δ
Excluding the relevant revenue and expenses of Mainland of China and international subsidiaries of HK$21,428 million and HK$20,908 million (2019: HK$21,085 million
and HK$19,785 million) respectively.
φ
Excluding the relevant revenue, expenses, depreciation and amortisation of Mainland of China and international subsidiaries of HK$21,428 million, HK$20,908 million
and HK$272 million (2019: HK$21,085 million, HK$19,785 million and HK$236 million) respectively.
^
Average of 1 to 29 January 2020.

OUR NETWORK
HONG KONG OPERATING NETWORK WITH
FUTURE EXTENSIONS
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LEGEND
Station Proposed Station Shenzhen Metro Network
Interchange Station Proposed Interchange Station * Racing days only
EXISTING NETWORK
Airport Express Island Line Tuen Ma Line Phase 1 Tsuen Wan Line
Disneyland Resort Line Kwun Tong Line South Island Line Tung Chung Line
East Rail Line Light Rail Tseung Kwan O Line West Rail Line
High Speed Rail
PROJECTS IN PROGRESS
Shatin to Central Link (Tai Wai to Hung Hom Section) Shatin to Central Link (Hung Hom to Admiralty Section)
10 MTR Corporation
POTENTIAL FUTURE EXTENSIONS UNDER RAILWAY DEVELOPMENT STRATEGY 2014
Northern Link and Kwu Tung Station Tung Chung Line Extension South Island Line (West)
Tuen Mun South Extension Hung Shui Kiu Station North Island Line
East Kowloon Line
PROPERTIES OWNED / DEVELOPED / MANAGED BY THE CORPORATION

01 Telford Gardens / Telford Plaza I and II 32 MTR Hung Hom Building / Hung Hom Station Carpark
02 World-wide House 33 Trackside Villas
03 Admiralty Centre 34 The Capitol / Le Prestige / Hemera / Wings at Sea / MALIBU / LP6 / The LOHAS
04 Argyle Centre 35 The Palazzo
05 Luk Yeung Sun Chuen / Luk Yeung Galleria 36 Lake Silver
06 New Kwai Fong Gardens 37 Festival City
07 Sun Kwai Hing Gardens 38 The Riverpark
Overview
08 Fairmont House 39 Century Gateway
09 Kornhill / Kornhill Gardens 42 The Austin / Grand Austin
10 Fortress Metro Tower 45 Ocean Pride / Ocean Supreme / PARC CITY / THE PAVILIA BAY / City Point
11 Hongway Garden / Infinitus Plaza 46 Cullinan West
12 Perfect Mount Gardens 47 The Spectra / Sol City
13 New Jade Garden
14
15
Southorn Garden
Heng Fa Chuen / Heng Fa Villa / Paradise Mall
PROPERTY DEVELOPMENTS
16 Park Towers UNDER CONSTRUCTION / PLANNING
17 Felicity Garden
34 LOHAS Park Packages
18 Tierra Verde / Maritime Square 1 / Maritime Square 2
40 Tai Wai Station Packages

19 Tung Chung Crescent / Citygate / Novotel Citygate /
Seaview Crescent / Coastal Skyline / Caribbean Coast 41 Tin Wing Stop
20 Central Park / Island Harbourview / Park Avenue / Harbour Green / 43 The Southside
Bank of China Centre / HSBC Centre / Olympian City One / Olympian City Two 44 Ho Man Tin Station Packages
21 The Waterfront / Sorrento / The Harbourside / The Arch / Elements / 51 Yau Tong Ventilation Building
The Cullinan / The Harbourview Place / W Hong Kong / 52 Tung Chung Traction Substation
International Commerce Centre / The Ritz-Carlton, Hong Kong 53 Pak Shing Kok Ventilation Building
22 One International Finance Centre / Two International Finance Centre /
IFC Mall / Four Seasons Hotel / Four Seasons Place
23 Central Heights / The Grandiose / The Wings / PopCorn 1 / PopCorn 2 / WEST RAIL LINE PROPERTY
Crowne Plaza Hong Kong Kowloon East /
Holiday Inn Express Hong Kong Kowloon East / Vega Suites DEVELOPMENTS (AS AGENT FOR THE
24
25
Residence Oasis / The Lane
No.8 Clear Water Bay Road / Choi Hung Park & Ride
RELEVANT SUBSIDIARIES OF KCRC)
26 Metro Town 39 Century Gateway
27 Royal Ascot / Plaza Ascot 45 Ocean Pride / Ocean Supreme / PARC CITY / THE PAVILIA BAY / City Point
28 Ocean Walk 46 Cullinan West
29 Sun Tuen Mun Centre / Sun Tuen Mun Shopping Centre 47 The Spectra / Sol City
30 Hanford Garden / Hanford Plaza 48 Yuen Long Station
31 Citylink Plaza 49 Kam Sheung Road Station Packages
50 Pat Heung Maintenance Centre
MAINLAND OF CHINA AND MAINLAND OF CHINA AND MACAO

Beijing Shenzhen
INTERNATIONAL BUSINESSES Metro Line 4 Metro Line 4
Metro Line 4 – Daxing Line Metro Line 4 North Extension
Metro Line 14 Metro Line 13 (under construction)
Metro Line 16 Tiara
Metro Line 17 TIA Mall
(under construction)
Ginza Mall Tianjin
EUROPE Hangzhou
Shopping Mall
Stockholm Metro Line 1
Metro Line 1 Xiasha
Macao
London Light Rapid Transit Taipa Line
MAINLAND Extension
Metro Line 1 Phase 3
Beijing
OF CHINA Tianjin (Airport Extension)
Metro Line 5
AND MACAO Hangzhou Metro Line 5 West Extension
Shenzhen Hangzhou West Station
Macao Property Development
EUROPE AUSTRALIA
United Kingdom Melbourne
Sydney TfL Rail (future Elizabeth Line) Metropolitan Rail Service
Melbourne
South Western Railway
Sydney
AUSTRALIA Sweden Sydney Metro North West Line
Stockholm Metro Sydney Metro City &
(Stockholms tunnelbana) Southwest Line
MTRX (under construction)
Stockholm commuter rail
(Stockholms pendeltåg)
Mälartåg (service to be taken over)
CHAIRMAN’S
LETTER
Dear Shareholders and other Stakeholders,

For over four decades, MTR has been fulfilling its purpose to “keep cities moving”. Never has this mission been tested
more than in the past two years. From the public order events of 2019 to the COVID-19 outbreak in 2020, these have been
extraordinarily trying times for a company dedicated to keeping communities connected.
Around the world, the pandemic brought commerce to a halt, closed schools and forced employees to stay at home. In
Hong Kong, train patronage fell sharply, foot traffic at our malls and station retail areas decreased, and tenants sought
rental relief from the economic downturn, impacting our revenue across multiple business channels.
Through it all, we did our best to ensure safe, reliable, hygienic and affordable transport for our communities. We ensured
the health and safety of our staff by providing them with appropriate personal protective equipment. We intensified
the cleaning of our trains and railway facilities and employed innovative sanitisation technologies to safeguard public
health. We adjusted service frequency to match Government’s objectives in fighting the pandemic. We offered rebates to
passengers and rental concessions to retail tenants to help them weather the downturn.
Indeed, corporate responsibility and strong corporate governance principles guided our actions throughout 2020 more
prominently than ever, and our stakeholders can expect a robust environmental, social and governance (“ESG”) regime to
play an even bigger role in the Company moving forward. This is evident in our new Corporate Strategy, which the Board
approved in June 2020 to set out the direction of our future development.
Despite the difficulties faced during the year, MTR was still able to make progress on a number of important projects.
Works on the Shatin to Central Link continued. We awarded the design consultancies for two new projects under
Government’s Railway Development Strategy 2014. Residential unit pre-sales in Hong Kong progressed well, and our
investment property portfolio continued to expand.
12 MTR Corporation
None of this would have been possible without the As a global leader in railway transport, MTR is committed
contributions of our exceptional staff. I offer them to strong corporate governance and upholding the
my most sincere thanks for their hard work and highest standards of operational excellence. Regarding
professionalism, which have kept MTR and Hong Kong the Hung Hom Extension of the Shatin to Central Link
moving despite great challenges. project, we have been working diligently to implement
the recommendations made in the Final Report of
CORPORATE STRATEGY the Commission of Inquiry, which concluded that
the structures are safe and fit for purpose with the
Near-term challenges have not dampened our spirit to
suitable measures in place. These actions have now
plan for the future success of MTR and all of the cities we
been completed. In the recent report issued by the
Overview
serve. Our new Corporate Strategy, “Transforming the
Government-appointed Expert Advisor Team, it also
Future”, charts a future path marked by business and ESG
concluded that it is safe in practical terms to use the
targets that will contribute to the long-term sustainability
related built structures at Hung Hom Station for their
of the Company and the communities it serves. It also
intended purposes after the implementation of suitable
defines a more fit-for-future structure with a strengthened
measures. Following the results of the investigation
Hong Kong core, expanded Mainland of China and
into the derailment near Hung Hom Station that were
international outreach, and new growth engines to
made public in March 2020, we implemented immediate
explore – our three strategic pillars for success.

measures to address the situation and prevent similar
We aim to become an internationally recognised incidents from happening in future. In September
company that connects and grows communities with 2020, we launched a detailed internal investigation into
caring, innovative and sustainable services. By working the postponement of the commissioning of the new
together on our Corporate Strategy, I am confident that signalling system and new trains on the East Rail Line and
we will be able to build an even more effective, efficient implemented remedial measures after carrying out the
and agile organisation that can tackle the challenges of review. The new signalling system and new trains on the
tomorrow and help us create a better future. In managing East Rail Line were launched on 6 February 2021. Moving
our business sustainably and in accordance with world- forward, MTR will continuously review its practices to
class principles of governance, I also believe we can help ensure world-class design, construction and operations
individuals and communities thrive while contributing to for new projects and asset replacement works alike.
the fight against climate change. We are also seeking to improve our risk management
processes by implementing a “three lines of defence”
BUSINESS PERFORMANCE framework. This model strengthens the depth of a
company’s risk management response by retaining strong
AND GROWTH accountability at the business unit level while enhancing
In 2020, MTR was able to advance a number of railway assurance at the Executive and Board levels.
and property projects that will contribute to Hong
Kong’s transport infrastructure and the Company’s future For our existing lines, we continued to enhance our
business growth. facilities and services to keep delivering a world-class Financials and Other Information
customer experience. New technology and smart mobility

The year saw the successful opening of the Tuen Ma initiatives like QR code ticketing and our MTR Mobile – an
Line Phase 1 with new stations. We have been invited by app with features including train service information,
Government to proceed with the detailed planning and journey planning and ticketing functions as well as
design for the Tung Chung Line Extension, Tuen Mun shopping and lifestyle offers – make commuting better
South Extension (which will become the Tuen Ma Line than ever by improving convenience and enriching the
Extension in the future), and Kwu Tung Station and the customer experience. We have been expanding our Wi-Fi
Northern Link. We awarded design consultancies for the coverage and mobile charging facilities in stations to keep
first two extensions and have commenced procurement passengers connected while in transit. We are adding lift
of the design consultancy for the third project. We button sensors, drinking water dispensers, public toilets
are also making progress in planning future property and baby care rooms to improve passenger comfort.
development at the Siu Ho Wan Depot site. In addition Ultimately, we strive to design journeys around the needs
to advancing these four new projects, we submitted of each individual and ensure that our railway system is
proposals to Government for Hung Shui Kiu Station and inclusive for all, from an age-friendly policy that caters to
the South Island Line (West) project.

CHAIRMAN’S LETTER
senior citizens to ensuring accessibility for the disabled. ENVIRONMENTAL, SOCIAL

For example, new and refurbished seats throughout our
network give our customers more places to rest. AND GOVERNANCE
ESG creates shared value for our stakeholders and
In August, we were delighted to open The LOHAS
supports the symbiotic relationship between the
shopping mall, which expands our Hong Kong portfolio of
Company and the people and communities it serves. In
quality retail destinations adjacent to convenient railway
accordance with our Corporate Strategy, we are striving
transport links. We awarded the property development
to embed into our business and operations three primary
tenders for LOHAS Park Package 12 and Package 13
ESG goals: social inclusion, reducing greenhouse gas
in 2020 and The Southside (also known as the Wong
emissions, and promoting advancement and opportunity.
Chuk Hang Station Property Development) Package 5
We support social inclusion by, among other things,
in January 2021. We continued to diversify our revenue
ensuring that all individuals – regardless of age, ability
streams internationally, including in the Greater Bay
or socioeconomic status – can avail themselves of our
Area and elsewhere in the Mainland of China. In August
services. We combat climate change and aim for a carbon-
2020, the Shenzhen Municipal Government awarded
neutral future by reducing greenhouse gas emissions
the consortium led by our wholly owned subsidiary the
across our operations. We are also committed to creating
tender for Shenzhen Metro Line 13, a public-private
opportunities for our staff, supply chain and communities
partnership project that will boost our passenger
as we continue to grow and expand our network.
numbers in a growing market. During the year we opened
additional lines across the Mainland of China, including Environmental Aspects
the Shenzhen Metro Line 4 North Extension, full line
In August 2020, MTR issued a Green Bond under its
operation of Hangzhou Metro Line 5, Hangzhou Metro
new Sustainable Finance Framework to further support
Line 1 Phase 3 (Airport Extension) and the Middle Section
the Company’s sustainable development. The US$1.2
of Beijing Metro Line 16. In Sweden, our subsidiary was
billion 10-year bond was issued to fund projects that
awarded the operations and maintenance concession for
conserve energy, protect the environment, and enhance
the Mälartåg train service, which we expect to take over
and expand low-carbon railway services. It was the
from December 2021.
largest single tranche green bond for corporates in Asia
Pacific. The bond won Hong Kong’s “Best Green Bond”
FINANCIAL PERFORMANCE Award and, being at the forefront of raising sustainable
As announced on 19 January 2021, COVID-19 caused a financing, the Company was also named the “Best Issuer
substantial decrease in patronage and reduced revenue for Sustainable Finance” in Hong Kong in The Asset Triple
for our station commercial and property rental businesses A Country Awards 2020.
in 2020. As a result, the loss arising from our recurrent To help conserve our planet’s natural resources, we
businesses was HK$1,126 million. Together with the continued to reduce electricity consumption across all
profit from our property development businesses, which our businesses. We also supported the development of
decreased by 1.3% to HK$5,507 million, profit arising from renewable energy in Hong Kong through the installation
our underlying businesses was HK$4,381 million, 58.5% of a 93.24 kW solar energy system at our headquarters to
lower than the previous year. Including the loss arising start with. Actions like these will help Hong Kong achieve
from the revaluation of our investment property portfolio, its target of becoming carbon neutral in the future.
the net loss attributable to shareholders of the Company
in 2020 was HK$4,809 million, equating to a loss per share Social Aspects
of HK$0.78. Notwithstanding the challenging economic As an integral part of the wider Hong Kong community,
conditions, your Board has proposed a final ordinary MTR gives back through charitable and social
dividend of HK$0.98 per share, which, together with the programmes designed to nurture future generations
interim dividend of HK$0.25 per share, will bring the full- and help those in need. In the face of COVID-19, we
year dividend to HK$1.23 per share, same as that of 2019. launched special economic relief measures including fare
The Board of Directors of the Company will continue to rebates for passengers and rental concessions for mall
monitor the Group’s financial performance and position and station tenants. Our Board and Executive Directorate
as well as future capital requirements, but it currently donated HK$4.3 million of their remuneration to NGOs
proposes maintaining the Company’s progressive and charity organisations to help communities during
ordinary dividend policy. the pandemic. We donated 100,000 surgical masks at a
time when supply was tight, and we also set up vending
machines at 20 stations where members of the public
14 MTR Corporation
could conveniently pick up COVID-19 specimen collection “Grand Winner – COVID-19 Special Award (Corporate)”
packs. Since March 2020, we have been providing free and received other awards in the HR Appreciation Awards
Airport Express tickets through the Hospital Authority 2020 organised by Classified Post.
to healthcare workers who need to travel between
AsiaWorld-Expo Station and the urban area. Over 16,900 Governance
tickets had been provided as at the end of January 2021. Achieving the goals set out in our Corporate Strategy
We also donated 200 tablet devices to underprivileged requires having a strong governance framework in place
children to facilitate their online learning. that safeguards the best interests of MTR, its shareholders
and stakeholders. We regularly review our businesses to
Online hosting helped us carry out our social outreach
ensure we are operating according to the highest standards
Overview
efforts safely. These included our “‘Train’ for Life’s
of corporate governance and best practices in areas such as
Journeys” career- and life-coaching programmes;
functioning of the Board and Enterprise Risk Management.
“Summer Online Railway Workshops”, which introduced
railways to children on summer break through fun
activities; and “Christmas Delight” workshops, which ACKNOWLEDGEMENTS
featured Christmas carol performances in sign language AND APPRECIATION
and DIY musical instrument upcycling classes to promote We greatly value the counsel of those with the wisdom
social inclusion and green practices. MTR also hosted

to help us navigate calm and rough waters alike. I am
talks at senior centres and launched its annual elderly grateful to my fellow members of the Board for their
programme with RTHK to promote railway safety to support in these challenging times.
seniors across the territory.
I would like to thank once again Dr Allan Wong Chi-yun,
In 2020, we were once again privileged to promote who retired from the Board as an Independent Non-
artistic talent and art appreciation among the public. We executive Director on 20 May 2020, Mr James Henry Lau
installed new artworks in Wan Chai, Tiu Keng Leng and Jr, who resigned as a Non-executive Director with effect
Tuen Ma Line Phase 1 stations and organised exhibitions from 1 June 2020, and Ms Mable Chan, who ceased to be
at Sheung Wan, Sai Wan Ho and Central stations. One a Non-executive Director with effect from 1 August 2020.
highlight was a memorial exhibition for legendary singer I would also like to welcome once more Dr Bunny Chan
Teresa Teng, which received an enthusiastic response
Chung-bun, who was appointed as an Independent
from the community. Non-executive Director of the Board effective 20 May
Through our “More Time Reaching Community” Scheme, 2020, and Mr Christopher Hui Ching-yu, the newly
we encourage our staff to initiate and participate appointed Secretary for Financial Services and the
in volunteer activities that serve the community. In Treasury, who was appointed as a Non-executive Director
2020, despite the prolonged COVID-19 pandemic, 64 effective 1 June 2020. Finally, I would like to welcome
volunteering projects were organised involving a total of Miss Rosanna Law Shuk-pui, the newly appointed
6,344 volunteer hours of service, including those offering Commissioner for Transport, who was appointed as a
timely support to help underprivileged families ride out Non-executive Director with effect from 9 September 2020. Financials and Other Information
the difficulties. Many of the challenges of 2020 remain, but I truly believe
Our ESG efforts were recognised with “Outstanding that by working together, we can keep Hong Kong and all
Corporation” awards in the “Social Sustainability” and the cities we serve moving, ushering them into a future full
“Environmental Sustainability” categories of Metro of hope and prosperity once again. Our talented people
Finance’s Greater Bay Area Corporate Sustainability have a strong commitment to the city they call home, and
Awards 2020. We were awarded the “15 Years Plus Caring I feel exceptionally proud to be part of the MTR family.
Company Logo” by the Hong Kong Council of Social
Service in recognition of our care for the community, the
environment and our staff. The commitment of our staff in
contributing to the community was also reflected in their
donations to a variety of charitable causes. We received
the “Diamond Award”, “4th Top Fund-raiser Award” and
“3rd Highest Donation Award for CARE Scheme” in The Rex Auyeung Pak-kuen
Community Chest’s 2019/2020 Corporate and Employee Chairman
Contribution Programme. We were also named the Hong Kong, 11 March 2021

CEO’S REVIEW
OF OPERATIONS
AND OUTLOOK
Dear Shareholders and other Stakeholders,

The past year was one of the most difficult in the history of our company. COVID-19 presented stiff challenges to our
operations and business, demanding decisive actions and resolute execution as we worked tirelessly to ensure that Hong
Kong stayed on track throughout the worst of the pandemic.
Despite the circumstances, our dedicated colleagues rose to the occasion and performed admirably. We did our best to
support our communities with strong service performance and an unwavering commitment to health and safety. Most
importantly for the long-term prospects of both MTR and Hong Kong, we also formulated a visionary new corporate
strategy, one that will support our future growth and deliver shareholder and stakeholder value by emphasising
innovation and sustainability, particularly environmental, social and governance (“ESG”) principles.
CORPORATE STRATEGY: “TRANSFORMING THE FUTURE”

Socioeconomic trends, technological advances and increasingly interconnected communities are driving transformational
changes in our world. MTR aims to be at the vanguard of tomorrow by pursuing a new Corporate Strategy that allows us
not only to anticipate and respond to change, but also to participate in its creation.
Our Corporate Strategy, “Transforming the Future”, will firmly establish clear business and social and environmental
goals under a robust ESG framework, driving the sustainability of our business and creating healthy, long-term, symbiotic
relationships with the communities in which we operate. It will help us pursue business growth opportunities that support
local economies and keep cities moving. We also aim to foster a corporate culture that responds to external changes with
agility and care.
16 MTR Corporation
The new Corporate Strategy clearly defines our three core With the Corporate Strategy as our roadmap, we
pillars, their importance to our company and how we will continue endeavouring to “Keep Cities Moving”
intend to bolster them. sustainably and more efficiently, helping our Company,
its shareholders and stakeholders shape a better
• Pillar 1: Hong Kong Core. We will continue to realise
future together. To support the implementation of the
the full potential of our businesses in Hong Kong
Corporate Strategy, a new management organisation will
through expanding our existing businesses and
be put in place by phases with the intention of clarifying
entering into adjacencies, ensuring smooth delivery
accountability for the delivery of the Corporate Strategy
of projects as well as enhancing cost effectiveness. We
and strengthening the Company’s internal control and
will also strive to reduce carbon emissions, promote
Overview
risk management framework. The first phase of the
social inclusion and create opportunities for society as
reorganisation has been implemented as announced on
we develop new rail lines, properties and commercial
10 February 2021.
activities across the city – increasing stakeholder value
while also ensuring a sustainable business that grows
together with the areas it serves. COVID-19 AND
• Pillar 2: Mainland of China and International THE “NEW NORMAL”

Business. We will continue to maintain steady growth COVID-19 brought Hong Kong and other markets
in the Mainland of China and globally. This pillar also around the world to a virtual standstill as governments
enables us to build our presence in the Mainland issued stay-at-home mandates, restricted travel and
and international markets, leveraging our corporate implemented various other anti-pandemic guidelines.
culture, expertise and, importantly, our brand. The results were steep declines in tourism, retail, food and
beverage, travel and a number of other industries.
• Pillar 3: New Growth Engines. Technology and
innovation have long played key roles in MTR’s success. Immediately following the outbreak, we took decisive
This pillar is where we invest in new technologies and thorough measures to ensure public health and
and mobility services for long-term growth. It is safety at our facilities. We increased the frequency
instrumental both as an enabler and as a source of and comprehensiveness of our cleaning routines.
new business opportunities. We employed sanitising robots to disinfect trains,
especially in spaces that are hard to reach by cleaning
These pillars are supported by five enablers that together
crews. We applied technology to further enhance the
strengthen our operational foundation.
hygiene of public-facing facilities at stations, reinforcing
• Technology: utilising data and analytics to make photocatalytic coating and introducing touch-free
decisions and identify opportunities, as well as buttons for passenger lifts. We not only required masks
investing in technology to improve effectiveness and in trains and stations but also provided sanitiser and
efficiency and explore new business opportunities
even installed vending machines to make masks more
• Organisation and Processes: strengthening accessible to the public. We launched our own face mask
organisational structures so as to make faster production lines to ensure a steady supply for our staff
and more accountable business decisions in addition to providing workplace personal protection
equipment (“PPE”). We also initiated appropriate flexible
• People: investing resources in talent development and
work arrangements to safeguard our staff’s health and
smart working with innovative methods and technology
safety against COVID-19. Outside of Hong Kong, we
• Finance: enhancing accountability and focus on have also been dedicated in providing a safe and clean
sustainable financial goals environment for our staff and customers.
• Transformation Management Office: guiding the Importantly, the pandemic showed just how significant
delivery of our Corporate Strategy corporate responsibility and governance principles are to
MTR for ensuring sustainable operations. Underscoring
our commitment to society and our support of local

CEO’S REVIEW OF OPERATIONS AND OUTLOOK
businesses in difficult times, we introduced a number of packages; introducing new retail modes; and continuing
relief measures. These included offering fare rebates for our data strategy to capture business opportunities
commuters and granting rental concessions to most of our and make operational improvements. As an important
mall and station shop tenants, commencing in February transport provider in Hong Kong and overseas, one that
and lasting throughout the year, with priority given to keeps people moving and connected every day, we have
small to medium tenants. Earlier in the year, we donated fully taken on board the lessons of the novel coronavirus
100,000 masks to communities in need, and our Board and and will continue to help set the new standards for public
Executive Directors donated part of their remuneration health and safety and staff well-being.
to local charity groups. We also placed vending machines
at 20 stations for the public to conveniently pick up free 2020 POLICY ADDRESS
COVID-19 specimen collection packs. Initiatives such as
these demonstrated our care and commitment for the
AND RDS 2014
communities where we operate. In our Hong Kong railway business, MTR continued to
work toward helping Government achieve its objectives
Financially, MTR was affected by significantly reduced train
for the future development of the city’s transport
patronage owing to various pandemic control measures.
infrastructure as outlined in the 2020 Policy Address and
We saw lower rental income as a result of the economic
Railway Development Strategy 2014 (“RDS 2014”).
slowdown and rental concessions given to tenants who
were suffering from cross-boundary station closures and Under RDS 2014, we awarded the design consultancies
reduced footfall at our commercial properties. Advertising for the Tung Chung Line Extension and Tuen Mun South
income also came under severe pressure due to poor retail Extension (which will become the Tuen Ma Line Extension
sales and consumer sentiment. Therefore, we adopted a in the future) after being invited earlier in the year to
number of measures to alleviate these impacts, including proceed with detailed planning and design for the two
making timely adjustments of off-peak-hour service level projects. We were also invited by Government to proceed
in response to changes in travel demand; ensuring even with detailed planning and design for Kwu Tung Station
higher levels of travel health and safety; enhancing MTR and the Northern Link.
Mobile loyalty programmes and lifestyle content; making To support Government’s housing supply policy, we have
rental leases more attractive through greater flexibility and been invited by Government to proceed with technical
shorter terms; building tenant loyalty by granting rental studies on the development of the Siu Ho Wan Depot site,
concessions, particularly to small to medium tenants; and which is planned to offer approximately 20,000 residential
implementing stringent cost controls. units as well as community and retail facilities. Advance
Many of the changes our society has experienced are likely works and design are underway.
to continue as governments around the world continue to In 2020, we submitted the remaining proposals under
grapple with containing COVID-19. Mask-wearing, social RDS 2014 – the Hung Shui Kiu Station and South Island
distancing, work-from-home policies, greater reliance on Line (West) projects – to Government.
e-commerce, and intensified cleaning and sanitisation
routines are all potentially part of the “new normal”. We
are adjusting ourselves for the “new normal” through
OVERCOMING CHALLENGES
digital development. For example, we are leveraging ENCOUNTERED
MTR Mobile to further improve the customer experience; We decided in September 2020 to postpone the
providing more payment options at gates; developing commencement of the new signalling system and gradual
new and effective hygiene measures to maintain public introduction of the new nine-car trains on the East Rail
confidence; improving cost efficiency through technology Line in order to properly resolve the route recall situation,
deployment; launching “online-offline” advertising which has no impact on safety. After completing
additional testing and obtaining approvals from relevant
18 MTR Corporation
Government departments, the new signalling system and MTR made good progress in property development in
new trains on the East Rail Line were commissioned on Hong Kong. We awarded the tenders for LOHAS Park
6 February 2021. Package 12 and Package 13 in 2020 and The Southside
(also known as “Wong Chuk Hang Station Property
The Final Report of the Commission of Inquiry (“COI”)
Development”) Package 5 in January 2021, and we
into the Construction Works at and near the Hung Hom
opened The LOHAS shopping mall in August 2020.
Station Extension under the Shatin to Central Link and
the Final Report of the Expert Advisor Team (“EAT”) on In Mainland of China and International businesses,
the Shatin to Central Link project were released in May we were awarded Shenzhen Metro Line 13, a
2020 and February 2021, respectively. The COI report public-private partnership (“PPP”) project for investment
Overview
concluded that the relevant structures at and near in and construction of the line as well as operations and
Hung Hom Station are safe and fit for purpose with the maintenance (“O&M”) for 30 years after completion. We
completion of suitable measures. Separately, the EAT were awarded the O&M concession for the Mälartåg train
report also concluded that it is safe in practical terms service in Sweden for eight years starting from December
to use the related built structures at Hung Hom Station 2021. We also opened the full Hangzhou Metro Line 5
for their intended purposes after the implementation (“HZL5”) in April, the Shenzhen Metro Line 4 North
of suitable measures. Over the past two years, we Extension in October, and Hangzhou Metro Line 1

have already introduced a number of improvements Phase 3 (Airport Extension) and the Middle Section of
in our project management systems. Many of these Beijing Metro Line 16 in December.
enhancements have now been incorporated into our
As announced on 19 January 2021, our financial results
standard project management practices and procedures
in 2020 were affected by the significant impact of
and will be applied for the completion of the Shatin to
the COVID-19 pandemic. Loss arising from recurrent
Central Link as well as new railway projects.
businesses for the year was HK$1,126 million. Property
We also moved quickly to implement a number of development profit for the year decreased by 1.3%
improvement measures following the March 2020 release to HK$5,507 million. As a result, profit arising from
of the investigation report into the derailment incident underlying businesses decreased by 58.5% to HK$4,381
near Hung Hom Station along the East Rail Line. million. Including the loss arising from investment
property revaluation (a non-cash accounting item),
BUSINESS HIGHLIGHTS net loss attributable to shareholders of the Company
was HK$4,809 million, representing loss per share after
AND PERFORMANCE revaluation of HK$0.78.
In a difficult year, there were still a number of highlights
Your Board has proposed a final ordinary dividend of
to note. We once again posted excellent 99.9%
HK$0.98 per share, which together with the interim
performance for train service delivery and on-time Financials and Other Information
dividend of HK$0.25 per share brings the full-year
passenger journeys. Meanwhile, technology continued
dividend to HK$1.23 per share, same as that of 2019.
to be an increasingly important contributor to our
operations. The year under review saw us enhancing
the information, news and functions of MTR Mobile to HONG KONG BUSINESSES
improve the customer experience as well as increase MTR’s “Hong Kong Core” is one of the Company’s three
our use of smart asset management to boost railway strategic pillars. Our “Rail Plus Property” business model
reliability. We opened Tuen Ma Line Phase 1 in February drives revenue for this pillar through diversified streams,
2020 and are on schedule to open the full line in the third enabling the Company and its shareholders to participate
quarter of 2021. in and benefit from Hong Kong’s expanding transport
links as well as their associated developments.

Transport Operations
Year ended 31 December
HK$ million 2020 2019 Inc./(Dec.) %
Hong Kong Transport Operations
Total Revenue 11,896 19,938 (40.3)
(Loss)/Profit before Depreciation, Amortisation and Variable Annual
Payment (“EBITDA”) (422) 5,909 n/m
(Loss)/Profit before Interest and Finance Charges and after Variable
Annual Payment (“EBIT”) (5,408) (591) (815.1)
EBITDA Margin (in %) (3.5)% 29.6% (33.1)% pts
EBIT Margin (in %) (45.5)% (3.0)% (42.5)% pts
n/m: not meaningful
In 2020, total revenue from Hong Kong transport was HK$5,408 million. These results were primarily due to
operations decreased by 40.3% to HK$11,896 million the COVID-19 outbreak, which had negative impacts on
from HK$19,938 million in 2019. Loss before interest and patronage and average fare from early 2020 onward.
finance charges and after the variable annual payment
Patronage and Revenue

Patronage Revenue
in millions HK$ million
2020 Inc./(Dec.) % 2020 Inc./(Dec.) %
Domestic Service 1,145.0 (27.0) 9,229 (27.4)
Cross-boundary Service 7.6 (92.7) 516 (83.7)
High Speed Rail (“HSR”) 1.0 (93.9) 1,277 (39.1)
Airport Express 3.1 (80.5) 140 (86.2)
Light Rail and Bus 154.0 (25.8) 481 (29.0)
Intercity 0.1 (94.5) 20 (88.6)
1,310.8 (31.5) 11,663 (41.2)
Others 233 135.4
Total 11,896 (40.3)
Total patronage across all MTR rail and bus passenger promoting non-peak travel and creating attractive
services decreased by 31.5% to 1,310.8 million compared fare, ticket and pass promotions. We are leveraging our
to 2019. Average weekday patronage decreased by constantly evolving MTR Mobile to effectively bring
30.9% to 3.88 million. The closures of Cross-boundary the latest offers to users. More than ever, we have been
Service and the High Speed Rail (“HSR”) due to COVID-19 regularly reviewing our train schedules to account for
together had a significant impact on cross-border demand fluctuations and ensure customer convenience.
patronage. Passengers of Domestic Service decreased by We are also seeking to promote MTR to domestic users as
27.0% to 1,145.0 million as a result of Government- and the preferred transit method for exploring the numerous
workplace-mandated social distancing measures as well travel and sightseeing opportunities within Hong Kong.
as school closures, which caused more people to work
and study from home. Travel restrictions greatly affected Market Share
the number of air travellers entering and departing The Company’s overall market share of the franchised
Hong Kong, resulting in an 80.5% decrease in Airport public transport market in Hong Kong in 2020 was 45.3%
Express patronage. compared with 47.4% in 2019. This decline was mainly
due to the precipitous drop in patronage owing to the
To stimulate ridership in response to the challenges
COVID-19 pandemic for Cross-boundary Service, HSR
posed by the COVID-19 pandemic, we have been
20 MTR Corporation
and Airport Express, in which we have a relatively higher rail network experienced eight delays and no delays,
market share than other franchised transport operators. respectively, defined as those lasting 31 minutes or more
Our share of cross-harbour traffic was 66.1% compared and attributable to factors within the Company’s control.
with 67.5% in 2019. Our share of the cross-boundary The light rail network continued its record dating back
business for 2020, including HSR and Cross-boundary to 2019 of no delays lasting 31 minutes or more and
Service, fell to 47.2% from 51.3%. Our share of traffic to attributable to factors within the Company’s control.
and from the airport decreased to 16.3% from 20.5%. In all cases of delay, we thoroughly investigate the
circumstances and take necessary steps to ensure that
Fare Adjustment, Promotions and Concessions similar instances do not occur again in future.
Overview
Passengers using Octopus received a rebate of 3.3% on
An Investigation Panel was convened to examine delays
every trip, in effect paying no actual fare increase as set
to the commencement of the new signalling system and
by the +3.3% Fare Adjustment Mechanism (“FAM”) for
gradual introduction of new trains on the East Rail Line,
2019/2020. In 2020, we made no price adjustments
an important part of the Shatin to Central Link project.
for various tickets and passes, offered discount
An investigation report was submitted in January 2021.
promotions, and granted HK$1.7 billion in on-going fare
Safety has been reaffirmed by the technical investigation,
concessions to the elderly, children, students and persons
which showed that the concerned issue was caused by

with disabilities.
a non-safety-critical software module being overloaded
In April 2020, MTR announced a six-month package of by a new software module specifically built for the
economic relief measures, including a 20% rebate on Company to provide extra train monitoring information
every Octopus trip and HK$100 discounts on MTR City to the Operations Control Centre. The contractor resolved
Saver and Monthly Pass Extras; in November 2020 these the issue by upgrading the software and stopping the
measures were extended till March 2021 and June 2021, new software module. Following satisfactory completion
respectively. Government agreed to bear half of the total of all further testing and approvals from relevant
actual revenue forgone arising from these measures Government departments on the safe and sound
during the period between July 2020 and March 2021. condition of the new signalling system and new trains, the
With no fare increase in 2020 owing to the negative new signalling system and trains were commissioned on
growth of Median Monthly Household Income, the 6 February 2021.
announced 2020/2021 FAM of +2.55% may be recouped On 3 March 2020, MTR released to the public the
over the subsequent two years, with +1.28% to be investigation report detailing the train derailment near
recouped in 2021/2022 and +1.27% to be recouped in Hung Hom Station in September 2019. Investigators
2022/2023. The +0.3% fare adjustment for the announced concluded that the derailment was caused by dynamic
2019/2020 FAM that was not implemented may also be track gauge widening at a turnout near the station.
recouped in 2021/2022. Such recoupments will be made Following the release of the report, the Company took Financials and Other Information
subject to the provisions of the FAM. immediate actions to prevent similar incidents.
Service Performance Enhancing the Customer Service Experience

MTR prides itself on service reliability and excellence. MTR places great emphasis on delivering a world-class
In 2020, we were able to achieve an exemplary 99.9% customer experience, and the year under review saw
on-time mark for passenger journeys and train service us once again embark upon a number of enhancement
delivery for our heavy rail network. Passenger journeys projects for our trains and stations. In line with one
on-time are defined as those that are completed within of our core strategic pillars, we are also keen on areas
five minutes of their scheduled journey times, while train such as smart mobility as well as smart operations and
service delivery measures actual train trips against those maintenance to drive our future growth.
scheduled to be run.
Boosting Passenger Convenience
In 2020, MTR ran more than 1.78 million trips on its heavy On 14 February 2020, we opened Phase 1 of the Tuen
rail network and more than 1 million trips on its light Ma Line, commencing services at the new stations of
rail network. Of these, the heavy rail network and light Hin Keng and Kai Tak as well as the expanded section of

Diamond Hill Station. The average daily usage of these To help passengers stay connected while on the go, our
three stations was 125,000 passengers from opening to free Wi-Fi coverage was expanded during the year from
the end of 2020. station hotspots to all station platform and concourse
areas. We continued to increase the number of mobile
During the pandemic we strove to balance public health
charging spots available in stations, including USB
with the need to maintain sufficient service, increasing
charging sockets and wireless charging pads. There are
and decreasing non-peak service based on social
now mobile charging facilities at 29 stations, including all
distancing requirements as well as work and school
interchange stations.
guidelines. We continue to monitor the situation
closely to provide adequate service while also ensuring Smart Mobility to Enhance Customer Journeys
public health. MTR is committed to keeping abreast of technologies
and trends that can help communities stay connected
Greater Comfort for Passengers
and ride smart. The new MTR Mobile features railway
MTR has ordered 93 new heavy rail eight-car trains
and other transport information and functions, news and
and 40 new light rail vehicles to retire older trains and
offers from MTR Malls and station shops, and a variety of
vehicles before their life expiry. Nine new heavy rail
lifestyle content. Its MTR Points loyalty scheme enables
trains have been delivered and two more are scheduled
customers to earn and redeem MTR Points for free rides
to be delivered by early 2021. The first two new light rail
and other attractive rewards. The “Next Train” function
vehicles were put into service in November 2020; eight
now shows estimated times of arrival for selected heavy
more have been delivered and were undergoing testing
rail and light rail lines. “Trip Planner” now recommends up
and commissioning as at the end of 2020.
to three journey options. “Traffic News” lets passengers
Since 2017, we have been systematically replacing enter their preferred time and date for a point-to-point
chillers throughout our stations and depots to ensure route and informs them of any service disruptions
comfortable environments for passengers and staff. This through push notifications.
work is expected to be completed in 2023.
To digitalise and automate customer touchpoints and
We are also upgrading our signalling system to increase deliver a smarter, more seamless travel experience,
service capacity. Software revamping and assurance work a number of initiatives were introduced in 2020. For
on the Tsuen Wan Line signalling system is progressing example, passengers can purchase monthly passes in
slowly, further compounded by COVID-19 lockdown advance via MTR Mobile and avoid queues. Students may
measures imposed at the contractor’s office in Canada. now use the app to renew their “Student Status” on their
Work is also underway on the replacement of the Octopus cards and continue enjoying concessionary fares.
signalling systems for the Island, Kwun Tong and Tseung Starting from 23 January 2021, passengers can tap the
Kwan O lines. Work on the signalling of the Tung Chung entry/exit gates with a QR code ticket on MTR Mobile or
and Disneyland Resort lines as well as Airport Express will EasyGo on AlipayHK, marking a new milestone for MTR’s
be planned together with the Tung Chung Line Extension efforts to promote smart mobility.
under RDS 2014.
Smart Operations and Maintenance
Enhancing Station Facilities In 2020, we continued to improve our services through
To provide greater comfort and convenience for innovation by introducing five AI-powered “smart
passengers, we opened new public toilets and baby care trainee” robots to the Kai Tak Station operations team.
rooms at the stations along Phase 1 of the Tuen Ma Line Their functions include giving passengers directions,
in February 2020 as well as Yau Ma Tei and North Point helping with journey planning, inspecting station
stations in June 2020 and September 2020, respectively. facilities and carrying out cleaning tasks. We launched
We also continued to install drinking water dispensers at the InnoEtronic invention zone and robotics co-working
selected stations to meet passenger needs and reduce space at Kowloon Bay Depot, a strategic partnership
plastic waste. New external lifts and escalators were that explores innovative technologies for smart rolling
provided to further improve barrier-free access at stations. stock maintenance. Automatic Air-conditioning Filter
Over 100 passenger lifts across the network have now Cleaning Machines were installed at the Pat Heung and
been equipped with “contactless” lift button sensors to Chai Wan depots to replace tedious manual cleaning
protect our customers during the pandemic.
22 MTR Corporation
and standardise filter cleaning quality and efficiency. a blockchain-based platform that optimises supply chain
We started trials for an Underframe Inspection Robot at management and workflow transparency. We developed
Pat Heung Depot, which is designed to automate part an award-winning Maintenance Cloud System and
of the rolling stock inspection process by using image Condition Monitoring Hardware to manage manpower
recognition, AI and precise motion control to identify and and monitor train relay electronic performance in real
report anomalies. We also started trialling a Smart Train time. Smart Train Planning, rolled out in October 2020,
Roof and Pantograph Monitoring System at Tuen Ma Line is a self-regulating AI platform using cloud technology
Phase 1, which automatically captures a complete image that shortens train downtime by optimising train
of the train pantograph and train roof and uses image deployment and maintenance. A Digital Monitoring
Overview
recognition technology to identify potential anomalies System for workshop processes is in development to
and alert users to prevent further escalation of failure. help staff plan and monitor train maintenance. We
also began using Smart Forms mobile app to digitise
MTR has also been exploring and adopting smart asset
information and records, resulting in faster, higher-
management to improve the reliability of its railway
quality maintenance work.
services. We are currently trialling SmartChain,

Station Commercial Businesses
Hong Kong Station Commercial Businesses
Station Retail Rental Revenue 2,021 4,800 (57.9)
Advertising Revenue 516 1,130 (54.3)
Telecommunication Income 640 743 (13.9)
Other Station Commercial Income 92 126 (27.0)
Total Revenue 3,269 6,799 (51.9)
EBITDA 2,760 6,119 (54.9)
EBIT 2,502 5,122 (51.2)
EBITDA Margin (in %) 84.4% 90.0% (5.6)% pts.
EBIT Margin (in %) 76.5% 75.3% 1.2% pts.
In 2020, total revenue from all Hong Kong station sales while reducing face-to-face interaction. We also
commercial activities decreased by 51.9% to HK$3,269 digitalised our advertising panels and back-end system
million. This was mainly due to rental concessions granted to boost the visual appeal and digital creativity of our
to tenants who were affected by station closures and advertising offerings for advertisers. Financials and Other Information
suspended cross-boundary rail services following border
Rental concessions and the closure of duty free shops in
shutdowns, as well as rental concessions granted to other
border stations resulted in a 57.9% decrease in station
station shop tenants during the COVID-19 outbreak.
retail rental revenue to HK$2,021 million. In addition
During the year, COVID-19 caused steep declines in to rental concessions granted to tenants affected by
tenant business at MTR stations due to anti-pandemic the suspended cross-boundary rail services, MTR also
measures, travel restrictions and the weak economic offered rental relief to small to medium tenants in other
environment, which greatly reduced store business station shops by granting half-month reductions of
and almost completely eliminated overseas and their rents from February to April 2020. Rental relief
cross-boundary tourism. Advertising revenue was also for large corporations was considered on a case-by-
significantly impacted. To address these issues, MTR case basis. From May to December 2020, we continued
offered more aggressive advertising sales packages as offering rental relief to all tenants. Rental reversion and
well as solutions encouraging tenants to use more average occupancy rates in 2020 for station kiosks were
online-offline retail, which enables customers to receive approximately -8% and 98.3%, respectively.
offers digitally and fulfil them in-store, thus driving

During the year, the Company continued to employ convenience stores 14%, passenger services 11% and
innovative marketing promotions to stimulate retail others 37% as at 31 December 2020.
activity. The MTR Points loyalty scheme, introduced in
Revenue from advertising decreased by 54.3% to
May 2020, encourages customers to ride on MTR, make
HK$516 million in 2020 as the COVID-19 outbreak
purchases at designated station shops and MTR Malls,
resulted in steep declines in tourism and retail sales,
and redeem gifts with earned MTR Points. We also
causing advertisers to postpone or cancel campaigns.
launched promotional campaigns from time to time,
To drive sales in a difficult market, the Company offered
including special offers from station shops and MTR Malls
value-added packages to capture limited budgets and
to boost sales. Meanwhile, our two “v-smart” unmanned
late bookings.
automated station shops at Kowloon and Tsing Yi stations
continued to offer customers a new retail experience. Telecommunications revenue decreased by 13.9% to
HK$640 million in 2020. This was attributed to the special
As at 31 December 2020, the lease expiry profile of
fee concession given during the COVID-19 pandemic and
our station kiosks (including duty free shops) by area
subsequent economic downturn as well as the revised fee
occupied was such that approximately 32% will expire in
due to contract renewal. Our project to increase capacity
2021, 47% in 2022, and 21% in 2023 and beyond.
by installing a new commercial telecom system at 31 of
In terms of trade mix, food and beverage accounted for our stations is well underway with 26 stations completed
approximately 22% of the leased area of our station kiosks as at 31 December 2020. Some telecom operators had
(excluding duty free shops), followed by cake shops 16%, launched 5G services at 40 stations as at year-end.
Property Businesses
Property Rental and Management
Hong Kong Property Rental and
Property Management Businesses
Revenue from Property Rental 4,817 4,833 (0.3)
Revenue from Property Management 237 304 (22.0)
Total Revenue 5,054 5,137 (1.6)
EBITDA 4,204 4,286 (1.9)
EBIT 4,185 4,264 (1.9)
EBITDA Margin (in %) 83.2% 83.4% (0.2)% pt.
EBIT Margin (in %) 82.8% 83.0% (0.2)% pt.
Property rental revenue decreased by 0.3% year on year As at 31 December 2020, the lease expiry profile of our
to HK$4,817 million in 2020. This was mainly due to relief shopping malls by area occupied was such that
measures provided to tenants during the pandemic, approximately 33% will expire in 2021, 30% in 2022,
which were granted on a case-by-case basis with priority 20% in 2023, and 17% in 2024 and beyond.
given to small to medium tenants. However, these
In terms of trade mix as at 31 December 2020, food
concessions were partially offset by the incremental
and beverage accounted for approximately 29% of the
contribution from our newly opened and acquired
leased area of our shopping malls, followed by fashion,
shopping malls. In 2020, MTR shopping malls recorded
beauty and accessories 22%, services 22%, leisure
a negative rental reversion of approximately 21% due to
and entertainment 17%, and department stores and
adverse retail sentiment. Our shopping malls (other than
supermarkets 10%.
The LOHAS, which was opened in August 2020)
and the Company’s 18 floors in Two International Steep declines in tourist traffic and domestic spending
Finance Centre had average occupancy rates of 99% negatively impacted our mall rental business, while
and 98%, respectively. work-from-home arrangements and the weak economic
24 MTR Corporation
environment adversely affected our office tenants’ West Rail property sales activities for Cullinan West III (Nam
business expansion plans and reduced their space Cheong Station) and Sol City (Long Ping Station (South)),
requirements. We remained keenly attuned to the where we act as the agent for the Kowloon-Canton Railway
business difficulties faced by our mall tenants, particularly Corporation, also continue. The application for pre-sale
those operating in food and beverage and discretionary consent for Yuen Long Station property development
segments, collaborating with them on initiatives such as (Phase 1) is in progress.
loyalty and redemption programmes to boost business.
In February 2020, MTR awarded the tender for LOHAS Park
We helped e-commerce and online merchants open pop-
Package 12 to a subsidiary of Wheelock and Company
up stores at our properties to help drive mall traffic. We
Limited. In October 2020, the Company awarded the
Overview
are also considering widening the trade mix in our malls
tender for LOHAS Park Package 13 to a consortium
to further diversify our offerings.
formed by Sino Land Company Limited, Kerry Properties
During the year the Company held a number of marketing Limited, K. Wah International Holdings Limited and China
programmes across its commercial portfolio to drive sales. Merchants Land Limited. In January 2021, the Company
Many of these were conducted via MTR Mobile, which awarded the tender for The Southside Package 5 to a
delivers news and offers related to shopping, dining and consortium formed by New World Development Company
parking services at MTR Malls. Limited, Empire Development Hong Kong (BVI) Limited,

CSI Properties Limited and Lai Sun Development Company
In August 2020, MTR opened Phase 1 of The LOHAS
Limited. For the Ho Man Tin Station Package 1 property
shopping mall to support the daily needs of residents.
development project, a novation agreement has been
Phase 2 was opened in November 2020 with a cinema, a
reached between MTR Corporation Limited, Goldin
new retail pop-up zone, and a series of smart services and
Properties Holdings Limited and Great Eagle Group. The
digital interactive motion zones. In 2020, the Company
Company will work together with Great Eagle Group to
also acquired the remaining economic interests in Telford
bring this project to completion.
Plaza II and PopCorn 2 shopping centres and now holds
100% interest in both, alleviating the impact of COVID-19
and the economic downturn through increased rental GROWING OUR
income. Repartitioning work for the fourth and fifth levels HONG KONG BUSINESSES
of Telford Plaza II has been completed, and all shops are
MTR’s “Hong Kong core” business pillar is supported
now open.
by the “Rail Plus Property” model, which enables the
Property management revenue in Hong Kong decreased Company, its shareholders and stakeholders to benefit
by 22.0% to HK$237 million compared to 2019. from the city’s growing transport links as well as their
associated urban development. The year under review
Property Development and Tendering saw us continue to grow our Hong Kong business
Hong Kong property development profit for the year was through the Shatin to Central Link and the new projects
HK$5,442 million, which was primarily derived from the under Government’s RDS 2014.
surplus proceeds from LOHAS Park Package 6 and sales of
inventory units. Shatin to Central Link
Pre-sales activities of MTR properties have progressed The 17-km Shatin to Central Link, a Government project
well for The Pavilia Farm I and The Pavilia Farm II, both managed by MTR, is a vital infrastructure initiative that
located at Tai Wai Station, with approximately 97% and will greatly enhance the existing railway network and
95%, respectively, of units sold as at 31 December 2020. reduce travel times between major population centres in
Also as at 31 December 2020, approximately 70% of units Hong Kong.
at SEA TO SKY (LOHAS Park Package 8) and 97% of units at As at 31 December 2020, the Tai Wai to Hung Hom
MARINI, GRAND MARINI and OCEAN MARINI (LOHAS Park section of the Shatin to Central Link was 99.99%
Package 9) had been sold. Pre-sale for LP10 (LOHAS Park complete. Phase 1 of the Tuen Ma Line, which connects
Package 10) commenced in January 2021. communities around Hin Keng, Diamond Hill and Kai Tak

stations, opened in February 2020. The full opening of the to use the related built structures at Hung Hom Station
Tuen Ma Line, which will connect Phase 1 with the West for their intended purposes after the implementation of
Rail Line via Sung Wong Toi, To Kwa Wan, Ho Man Tin suitable measures.
and Hung Hom stations, is expected in the third quarter
The Group has made a provision of HK$1.4 billion for the
of 2021. Trial operations of the full Tuen Ma Line began
estimated additional cost to the Company of continuing
in January 2021, marking a major milestone towards the
to comply with its project management responsibilities in
commencement of passenger service.
its consolidated profit and loss account for the year ended
As the existing East Rail Line will connect with the future 31 December 2020. Further details can be found in note
Hung Hom to Admiralty section, its signalling system 21B to the Consolidated Accounts of this Annual Report.
must be upgraded for compatibility with the extension.
As reported earlier, the introduction of the new signalling Other New Railway Projects
system was put on hold in September 2020 and the Working under the RDS 2014 framework for the future
system was finally commissioned in February 2021 development of Hong Kong’s railway network which
following the satisfactory completion of all further testing will potentially add 35 km to our network, we were
and approvals from relevant Government departments. invited by Government in April, May and December
After reviewing the report of the investigation panel, 2020 to proceed with the detailed planning and design
the Company has established a dedicated “Shatin to of the Tung Chung Line Extension, Tuen Mun South
Central Link Technical and Engineering Assurance Extension, and Kwu Tung Station and the Northern Link,
Team” to monitor the project from both technical and respectively. We awarded the design consultancies for
service readiness perspectives, as well as to identify the Tung Chung Line Extension and Tuen Mun South
any important potential issues regarding the project’s Extension in June and October 2020, respectively, and
remaining works for timely reporting and follow-up. have proceeded with ground investigation works and
A new Service Reliability Report will also be introduced environmental impact assessments. Procurement of
as part of Government’s reviewing mechanism of the design consultancies for Kwu Tung Station and the
the commissioning of new lines to ensure the timely Northern Link has commenced.
reporting and handling of issues with potentially
In May 2020, we submitted a proposal to Government
significant reliability impacts. The Company will also
for the Hung Shui Kiu Station project, and we continue to
implement other recommendations made in the report of
provide further information and details to Government.
the investigation panel.
We also submitted a project proposal for the South Island
The Hung Hom to Admiralty section was 91.2% complete Line (West) in December 2020. We are currently working
as at 31 December 2020. In July 2020, we completed alongside Government to address technical challenges on
track-laying works for the Hung Hom Station to Admiralty the East Kowloon Line and North Island Line projects.
Station section, and a topping-out ceremony for
Exhibition Centre Station was held in November 2020. Expanding the Property Portfolio
Due to the major challenges encountered, the targeted Investment Properties
opening date of the first quarter of 2022 is significantly at
Our shopping centres in Tai Wai and Wong Chuk Hang
risk. The Company is working to the best of its ability to
(now named “The Southside”) are expected to open
open the line at the earliest opportunity.
in 2023. These two new malls will add 107,620 square
On 12 May 2020, Government released the Final Report of metres to the attributable GFA of our existing retail
the COI into the Construction Works at and near the Hung portfolio as at 31 December 2020, representing an
Hom Station Extension under the Shatin to Central Link. increase of approximately 30%.
According to the COI report, the relevant structures at and
near the Hung Hom Station Extension are safe and fit for Residential Property Development
purpose with the completion of suitable measures. These Our 17 new residential property projects under
measures were completed in mid-2020. Separately, the development are expected to deliver over 23,000 units
EAT report also concluded that it is safe in practical terms to the market in the coming five years, supporting
Government’s efforts to increase housing supply.
26 MTR Corporation
We have been invited by Government to proceed with the Building site were gazetted in June 2020. Subject to
technical studies on the Siu Ho Wan Depot site topside completion of the rezoning process and the subsequent
development, which will provide about 20,000 residential land grant for development, we will tender out these two
units in the medium to long term, about half of which sites in the next 12 months or so. Subject to our entering
will be Subsidised Sale Flats. The development will also into a project agreement with Government, we will
provide community facilities and a 30,000-square-metre tender out Tung Chung East Station Package 1 in the next
shopping mall. The design and planning of advance 12 months or so. Meanwhile, we are also exploring the
works have commenced. development potential of sites along existing and future
railway lines, including the Tuen Mun South Extension,
The draft Outline Zoning Plans for the Tung Chung
Overview
Kwu Tung Station and Northern Link.
Traction Substation site and Pak Shing Kok Ventilation
MAINLAND OF CHINA AND INTERNATIONAL BUSINESSES

MTR’s Mainland of China and International businesses subsidiaries and associates. While COVID-19 affected
together represent one of the three strategic pillars passenger numbers, patronage losses had varied impacts

of our Corporate Strategy. In 2020, it served a total of on our financial performance depending on the business
approximately 1.38 billion passengers in the Mainland models for different business contracts.
of China, Macao, Europe and Australia through various
Mainland of China and International Businesses

Mainland of China and Macao
Railway, Property Rental
and Property
Management Businesses International Railway Businesses Total
HK$ million 2020 2019 Inc./(Dec.) % 2020 2019 Inc./(Dec.) % 2020 2019 Inc./(Dec.) %
Recurrent Businesses
Subsidiaries
Revenue 1,836 1,881 (2.4) 19,592 19,204 2.0 21,428 21,085 1.6
EBITDA 224 529 (57.7) 309 796 (61.2) 533 1,325 (59.8)
EBIT 212 517 (59.0) 49 572 (91.4) 261 1,089 (76.0)
EBIT
(Net of Non-controlling Interests) 212 517 (59.0) 61 412 (85.2) 273 929 (70.6)
EBITDA Margin (in %) 12.2% 28.1% (15.9)% pts. 1.6% 4.1% (2.5)% pts. 2.5% 6.3% (3.8)% pts.
EBIT Margin (in %) 11.5% 27.5% (16.0)% pts. 0.3% 3.0% (2.7)% pts. 1.2% 5.2% (4.0)% pts.
Recurrent Business Profit/(Loss) 174 472 (63.1) (4) 200 n/m 170 672 (74.7)
Associates and Joint Venture Financials and Other Information
Share of EBIT 844 1,005 (16.0) 63 (403) n/m 907 602 50.7
Share of Profit/(Loss) 363 457 (20.6) 61 (403) n/m 424 54 685.2
EBIT of Subsidiaries (Net of
Non-controlling Interests)
and Share of EBIT of
Associates and Joint Venture 1,056 1,522 (30.6) 124 9 1,277.8 1,180 1,531 (22.9)
(Loss)/Profit Attributable to Shareholders of the Company
– Arising from Recurrent Businesses (before Business Development Expenses) 594 726 (18.2)
– Business Development Expenses (183) (201) (9.0)
– Arising from Recurrent Businesses (after Business Development Expenses) 411 525 (21.7)
– Arising from Mainland of China Property Development 65 49 32.7
– Arising from Underlying Businesses 476 574 (17.1)
n/m: not meaningful
In the Mainland of China and Macao, recurrent business COVID-19’s impact on fare revenue from Shenzhen
profit from our railway, property rental and property Metro Line 4 (“SZL4”) as well as rental concessions
management subsidiaries decreased by 63.1% to granted to our shopping mall tenants.
HK$174 million in 2020. This was mainly due to

In our International businesses, recurrent business loss operating the line in 2010. In July 2020, the Shenzhen
from our railway subsidiaries was HK$4 million for the Municipal Government publicised a fare adjustment
year compared to the recurrent business profit of HK$200 framework for the Shenzhen Metro network that will take
million in 2019. This was mainly due to lower farebox effect on 1 January 2021 for five years. This framework is
revenue from Metro Trains Melbourne Pty. Ltd. and expected to enable the establishment of a fare-setting
MTRX (formerly known as MTR Express) due to COVID-19 mechanism and the procedures for fare adjustment.
and an initial operating loss by our O&M business at However, if a suitable fare increase and adjustment
Sydney Metro North West. These impacts were partially mechanism are not implemented soon, the long-term
offset by much-improved operating performance from financial viability of this line will be impacted.
Stockholms pendeltåg.
The Company signed the O&M agreement for the SZL4
Our share of profits from our associates and joint venture North Extension in 2020, and the extension formally
increased to HK$424 million in 2020 from HK$54 million opened on 28 October 2020.
in the previous year. This was mainly due to the one-off
onerous contract provision of HK$436 million made in Hangzhou
2019 for First MTR South Western Trains Limited, which Our businesses in Hangzhou include Hangzhou Metro
was offset somewhat by the negative impact of COVID-19 Line 1 (“HZL1”), the HZL1 Xiasha Extension and HZL5.
in our Hangzhou and Beijing operations. HZL1 Phase 3 (Airport Extension) formally opened at
the end of December 2020. The full HZL5 commenced
Excluding Mainland of China property development, our
operation in April 2020.
railway, property rental and management subsidiaries
(after business development expenses), together with Property Businesses in the
our associates and joint venture outside of Hong Kong,
Mainland of China
contributed a net after-tax profit of HK$411 million in
At the Tiara – the residential development at Shenzhen
2020 on an attributable basis. This represented a decrease
Metro Longhua Line Depot Site Lot 1 – more than 98% of
of 21.7% compared with 2019.
units have been sold and handed over to buyers.
Railway Businesses in the COVID-19 negatively impacted the occupancy rates

Mainland of China and patronage of Ginza Mall in Beijing and TIA Mall in
Shenzhen. The Company granted rental concessions to
Beijing
eligible tenants to help them withstand the impact of
In Beijing, our associate operates Beijing Metro Line 4
business disruption caused by the pandemic.
(“BJL4”), the Daxing Line, the first three phases of Beijing
Metro Line 14 (“BJL14”), and the Northern and Middle In Tianjin, project completion for the Beiyunhe Station
sections of Beijing Metro Line 16 (“BJL16”). COVID-19 shopping centre development has been delayed to
impacted patronage of all lines during the year. 2024 as additional works are required for railway safety
assurance during basement construction.
Construction of the full BJL14 and BJL16 continued during
the year. BJL16 Middle Section opened in December 2020. Macao Railway Business
BJL14 full line and first phase of Beijing Metro Line 17 are
MTR operates and maintains Macao’s first rapid transit
scheduled to open in late 2021. BJL16 full line is expected
system, the Macao Light Rapid Transit Taipa Line, which
to open in late 2022 at the earliest.
opened in December 2019. We also provide project
management and technical support to other light rail
Shenzhen
lines and extensions in the city.
SZL4, operated by our wholly owned subsidiary, saw a
decline in patronage in 2020 due to COVID-19. There
has been no increase in fares at SZL4 since we began
28 MTR Corporation
Europe Railway Business Growth Outside of Hong Kong
United Kingdom In Shenzhen, the consortium led by our wholly owned
subsidiary was awarded the tender for the Shenzhen
In London, our wholly owned subsidiary operates the
Metro Line 13 PPP project, which covers investment,
Crossrail operating concession under the TfL Rail brand.
construction and O&M for a period of 30 years following
MTR continues to support the phased opening of TfL Rail,
anticipated completion in 2023. The formal PPP contract
which will be renamed Elizabeth Line upon the opening
was signed on 30 October 2020. In Chengdu, the
of the Central Operating Section. Although ridership
Company set up a new company with Chengdu Rail
has fallen, TfL Rail services have managed to minimise
Transit Group to explore and develop station commercial
Overview
the risks presented by COVID-19. Our financial interest
and related businesses in the city. In Hangzhou, our
is reasonably protected as this concession has no fare
rolling stock maintenance company with the CRRC
revenue risks.
Hangzhou Digital Technology Co., Ltd consortium won
Our associate operates the South Western Railway (“SWR”) the contracts for the rolling stock fleet overhaul for certain
franchise, one of the largest rail networks in the UK. lines in Hangzhou and Shenzhen.
Services for the SWR were also reduced during lockdown
Discussions are on-going regarding potential cooperation
as a result of COVID-19. SWR was transitioned into the

opportunities in the Guangdong-Hong Kong-Macao
Emergency Recovery Measures Agreement in September
Greater Bay Area to build transport infrastructure as well
2020 for a period spanning to May 2021.
as property and community projects. The Company has
Sweden been involved as the Transit Oriented Development
MTR is the largest rail operator in Sweden by passenger (“TOD”) advisor of Dongguan Binhaiwan New Area
volume. It operates three rail businesses via wholly owned Government for the conceptual planning of the High
subsidiaries: Stockholm Metro (Stockholms tunnelbana), Speed Rail Binhaiwan Station TOD. We are also exploring
MTRX and the Stockholm commuter rail service opportunities for rail-related projects in other Greater Bay
(Stockholms pendeltåg). Area cities. Leveraging our experience, we will continue
to play an active role in the integrated development and
During the pandemic, Stockholm Metro continued to TOD of the Greater Bay Area.
run a full service with strong operational performance.
MTRX has been operating a reduced service since March In March 2021, we jointly secured the land use right for a
2020 due to travel restrictions and decreased demand. TOD site in the south of Hangzhou West Station together
Stockholms pendeltåg continued to run a full service with our partners. This project is a mixed-use property
while recording high punctuality. development comprising serviced apartment, office, retail
and hotel components and has a total developable GFA of
Australia Railway Business approximately 688,210 square metres. The Company has
Patronage for the Melbourne metropolitan rail network a 10% interest in the project with an equity investment of
decreased sharply in 2020 amid the COVID-19 outbreak. RMB350 million.
Our subsidiary reached an agreement with the State In Sweden, our subsidiary was awarded the O&M
government in May 2020 on financial support to ease the concession for the Mälartåg train service in December
effects of the pandemic. 2020. Our subsidiary will start running this service in
Sydney Metro North West continued to run a full service December 2021 for an eight-year operating period with
in 2020. Although patronage was affected by COVID-19, a one-year extension option. Currently, there are legal
there is no fare revenue risk according to the terms of challenges from other bidders against the tender process.
this franchise. Service performance continued to improve
throughout the year. The Sydney Metro City & Southwest
project continued to move forward with milestones
achieved as planned despite some restrictions on the
flows of people and materials between countries as a
result of COVID-19.

FINANCIAL REVIEW
In addition to the above brief report of the Group’s results and operations, this section discusses and analyses such results
in more details.
Profit and Loss

Year ended 31 December Inc./(Dec.)
HK$ million 2020 2019 HK$ million %
Total Revenue 42,541 54,504 (11,963) (21.9)
ζ
Recurrent Business (Loss)/Profit
EBIT
Hong Kong Transport Operations (5,408) (591) (4,817) (815.1)
Hong Kong Station Commercial Businesses 2,502 5,122 (2,620) (51.2)
Hong Kong Property Rental and Management Businesses 4,185 4,264 (79) (1.9)
Mainland of China and International Railway, Property Rental and
Management Subsidiaries 261 1,089 (828) (76.0)
Other Businesses, Project Study and Business Development Expenses (1,949) (2,353) 404 17.2
Share of Profit of Associates and Joint Venture 605 288 317 110.1
Total Recurrent EBIT 196 7,819 (7,623) (97.5)
Interest and Finance Charges (1,097) (939) 158 16.8
Income Tax (237) (1,740) (1,503) (86.4)
Non-controlling Interests 12 (160) (172) n/m
Recurrent Business (Loss)/Profit (1,126) 4,980 (6,106) n/m
Property Development Profit (Post-tax)

Hong Kong 5,442 5,531 (89) (1.6)
Mainland of China 65 49 16 32.7
Property Development Profit (Post-tax) 5,507 5,580 (73) (1.3)
Underlying Business Profitε 4,381 10,560 (6,179) (58.5)

Investment Property Revaluation (Loss)/Gain (9,190) 1,372 (10,562) n/m
Net (Loss)/Profit Attributable to Shareholders of
the Company (4,809) 11,932 (16,741) n/m
ζ: Recurrent business (loss)/profit represents (loss)/profit from the Group’s Hong Kong transport operations, Hong Kong station commercial businesses, Hong Kong
property rental and management businesses, Mainland of China and international railway, property rental and management businesses and other businesses.
ε: Underlying business profit represents (loss)/profit from the Group’s recurrent businesses and property development businesses.
n/m: not meaningful
Total Revenue Recurrent Business Loss

The adverse impact of the on-going COVID-19 pandemic Various measures implemented by governmental
and the deterioration of the general economic authorities in Hong Kong and globally to address the
environment on the Group’s businesses has been COVID-19 pandemic have resulted in a significant
unprecedented. Total revenue of the Group in 2020 reduction in domestic and international travel demand
was HK$42,541 million, decreased by 21.9% when and consumer spending. Furthermore, prolonged
compared to 2019, mainly due to the adverse impact of closures of major passenger boundary crossings between
the COVID-19 pandemic on fare revenue of our Hong Hong Kong SAR and the Mainland of China have further
Kong transport operations (“HKTO”), as well as decrease adversely impacted the Group’s recurrent businesses. As a
in rental revenue of our Hong Kong station commercial result, the Group reported a loss of HK$1,126 million in its
businesses (“HKSC”). recurrent businesses in 2020, as compared with a profit of
HK$4,980 million in 2019.
30 MTR Corporation
EBIT cost of the Shatin to Central Link (“SCL”) project in Hong
EBIT of HKTO decreased drastically by HK$4,817 million Kong and the loss incurred by Ngong Ping 360 due to
resulting in a loss of HK$5,408 million, mainly due service suspension as a result of the COVID-19 pandemic.
to substantial reduction of 31.5% in total patronage On the other hand, the loss in 2019 was mainly due to
resulting from the COVID-19 pandemic and related a provision of HK$2 billion made in respect of the Hung
governmental measures such as the closure of several Hom Incidents of the SCL project.
boundary crossings between Hong Kong SAR and the
Share of Profit of Associates and Joint Venture
Mainland of China (including the crossings at Lo Wu,
Share of profit of associates and joint venture was HK$605
Lok Ma Chau and Hong Kong West Kowloon stations,
million in 2020, compared to a profit of HK$288 million
Overview
as well as the Intercity through train control point at
in 2019 which included a provision of onerous contract
Hung Hom Station), social distancing, work-from-home
of HK$436 million made in respect of the South Western
arrangements, school closures, entry immigration
Railway franchise agreement in the United Kingdom. If
controls and quarantine measures.
the provision in 2019 had been excluded, the share of
EBIT of the HKSC decreased by 51.2% to HK$2,502 profit in 2020 would have decreased by HK$119 million
million, mainly due to profit and loss impact of rental or 16.4% when compared with 2019, mainly due to the
adverse financial impact of the COVID-19 pandemic on

concessions granted to duty free shop concession
holders and other station kiosks as a result of the closure our associate in Hangzhou as well as Octopus Holdings
of several boundary crossings between Hong Kong Limited in Hong Kong, partly offset by the incremental
SAR and the Mainland of China, as well as retail tenants profit contribution from our joint venture of HZL5 with
of station kiosks in domestic lines whose businesses full line operation since April 2020.
have been adversely affected by reduced footfall in Property Development Profit (Post-tax)
stations, and coupled with the significant drop in our Property development profit (post-tax) slightly decreased
advertising revenue. from HK$5,580 million in 2019 to HK$5,507 million in
EBIT of the Hong Kong property rental and management 2020, which was mainly derived from the share of surplus
businesses slightly decreased by 1.9% to HK$4,185 proceeds of LP6 (LOHAS Park Package 6) as well as sales of
million, mainly due to profit and loss impact of rental inventory units.
concessions granted to retail mall tenants, but mostly Investment Property Revaluation Loss
offset by profit contribution from our new shopping Revaluation of the Group’s investment properties in
mall, The LOHAS, opened by phases in August and Hong Kong and Mainland of China, which was
November 2020 and the remaining economic interests of performed by independent professional valuation
Telford Plaza II and PopCorn 2 acquired in March 2020. firms, resulted in a revaluation loss of HK$9,190 million
EBIT of our Mainland of China and international railway, in 2020, compared to a revaluation gain of HK$1,372
property rental and management business subsidiaries million in 2019. The revaluation loss, being a non-cash
have also been adversely affected but to varying degrees item, mainly reflected the decrease in reversionary rent
(with Melbourne Train being affected the most) due as a result of the COVID-19 and the deterioration of
to the severity of COVID-19 pandemic and related general economic environment.
governmental measures in different cities we operate, Net Loss Attributable to Shareholders of
resulting in a decrease in EBIT by 76.0% to HK$261 million. the Company
EBIT of other businesses, project study and business Taking into account the Group’s recurrent businesses,
development expenses reported a loss of HK$1,949 property development businesses and investment
million in 2020 (2019: a loss of HK$2,353 million). The loss property revaluation, the Group reported a net loss
in 2020 was mainly due to a provision of HK$1.4 billion attributable to shareholders of the Company of HK$4,809
made in respect of the additional project management million in 2020, compared to a net profit of HK$11,932
million in 2019.

Financial Position
As at As at Inc./(Dec.)
31 December 31 December
Net Assets 176,981 186,798 (9,817) (5.3)
Total Assets 290,574 289,214 1,360 0.5
Total Liabilities 113,593 102,416 11,177 10.9
Gross Debt^ 50,340 39,456 10,884 27.6
Net Debt-to-equity Ratio δ
22.5% 15.4% 7.1% pts
^: Gross debt represents loans and other obligations and short-term loans.
δ: Net debt-to-equity ratio represents net debt of HK$39,887 million (2019: HK$28,764 million), which comprises loans and other obligations, short-term loans, obligations
under service concession and loan from holders of non-controlling interests net of cash, bank balances and deposit in the consolidated statement of financial position,
as a percentage of the total equity of HK$176,981 million (2019: HK$186,798 million).
Net Assets Total Liabilities

Our financial position remains strong. The Group’s net Total liabilities increased by 10.9% from HK$102,416
assets decreased by 5.3% from HK$186,798 million as million to HK$113,593 million. This was mainly due to a
at 31 December 2019 to HK$176,981 million as at 31 combination of:
December 2020 mainly reflecting the revaluation loss of
• issuance of 10-year US$1.2 billion green bond, and net
the Group’s investment property portfolio.
drawdown of loans and issuance of other bonds/notes;
Total Assets • increase in creditors, other payables and provisions
Total assets increased slightly by 0.5% from HK$289,214 mainly due to: (i) advance cash received from property
million to HK$290,574 million. This was mainly due to a development packages, and (ii) provision of HK$1,371
combination of: million made in respect of SCL project management
• increase in amounts due from related parties; cost; and partly offset by
• increase in debtors and other receivables mainly due to: • decrease in amounts due to related parties due to
(i) the portion of rental concession granted yet to be lower variable annual payment as a result of revenue
amortised to the profit and loss account, and (ii) increase decrease during the year.
in property development receivables upon the
Gross Debt and Cost of Borrowing
recognition of the property development profit of LP6;
Gross debt of the Group (being loans and other
• increase in service concession assets in respect of KCRC obligations and short-term loans) increased by 27.6% to
systems; and partly offset by HK$50,340 million as at 31 December 2020. Weighted
average borrowing cost of the Group’s interest-bearing
• net decrease in investment properties as a result of the
borrowings was at 2.3% p.a., compared to 2.8% p.a.
revaluation loss on our existing portfolio being partially
in 2019.
offset by our acquisition of remaining 50% economic
interests of Telford Plaza II and 30% in Popcorn 2. Net Debt-to-equity Ratio
Net debt-to-equity ratio increased by 7.1% points to 22.5%
as at 31 December 2020 from 15.4% as at 31 December
2019 due to (i) increase in borrowings to fund the
acquisition of the remaining economic interests in Telford
Plaza II and PopCorn 2, capital expenditure for our Hong
Kong railways and related operations as well as the net
cash used in operating activities, and (ii) decrease in
equity mainly due to the revaluation loss on the Group’s
investment property portfolio recognised.
32 MTR Corporation
Cash Flow
HK$ million 2020 2019
Net Cash (Used in)/Generated from Operating Activities after Fixed and Variable Annual Payments (2,561) 13,988
Net Receipts from Property Development 8,171 5,916
Other Net Cash Outflow from Investing Activities (9,326) (7,490)
Net Borrowing/(Repayment) of Debts, Net of Lease Rental and Interest Payment 9,661 (2,362)
Dividends Paid to Shareholders of the Company (6,808) (6,649)
(Decrease)/Increase in Cash, Bank Balances and Deposits# (872) 3,286
#: Excluding effect of exchange rate change
Overview
Net Cash (Used in)/Generated from Operating Other Net Cash Outflow from Investing Activities
Activities after Fixed and Variable Annual Payments Other net cash outflow from investing activities was
Net cash used in operating activities after fixed and HK$9,326 million, which mainly included capital
variable annual payments for Hong Kong railway and expenditure of HK$9,249 million (comprising HK$5,226
related operations was HK$2,561 million, compared to net million for investments in additional assets for Hong Kong
cash generated of HK$13,988 million in 2019, mainly due existing railways and related operations, HK$3,539 million

to decrease in operating profit resulting from the adverse for Hong Kong investment properties, HK$250 million for
impact of the COVID-19. Hong Kong railway extension projects and HK$234 million
for the Mainland of China and overseas subsidiaries).
Net Receipts from Property Development
Net receipts from property development were
HK$8,171 million, comprising mainly cash receipts
from LOHAS Park packages.
ENVIRONMENTAL, SOCIAL governance across all its businesses. Robust structures,
mechanisms and management practices are in
AND GOVERNANCE place to ensure responsible, ethical decision-making
Despite the challenges of the past year, MTR continued and transparency.
to implement ESG initiatives that contributed to the
safety, environmental protection, health and wellbeing of Safety
the city it calls home. We also strove to ensure inclusion As a major Hong Kong transport and property
with services that are accessible to all, regardless of age conglomerate, MTR places the highest priority on the
or ability. health and safety of its customers, staff and visitors. Financials and Other Information
As one of the leading railway operators in the world, our Each year we seek to make improvements and
priority is to provide convenient, efficient transport in an enhancements wherever possible to ensure that we
environmentally sound manner. In August 2020, we were are upholding industry-leading safety standards, all in
proud to issue a new US$1.2 billion 10-year Green Bond, accordance with our comprehensive Corporate Safety
the largest single-tranche green bond for corporates Policy and best practices.
in Asia-Pacific, to fund railway-related conservation The year under review presented considerable
and energy efficiency projects. During the year we also challenges, from the public order events that carried
embarked upon a consultancy study that will help us over from 2019 to the rapid spread of COVID-19 from
develop a long-term roadmap for reducing greenhouse early 2020 onward. Demonstrating our emphasis on
gas emissions; we aim to launch a comprehensive health and safety as well as our keen focus on employing
programme by 2021. We also published our Climate the latest innovations and technologies, we employed
Change Strategy outlining our three-pronged approach vaporised hydrogen peroxide robots to deep-clean our
to addressing this critical issue. trains and stations. We also applied a special coating
To ensure that MTR safeguards the best interests of on various points of frequent passenger contact to
its shareholders and stakeholders, the Company strives eliminate bacteria and viruses.
to maintain the very highest standards of corporate

To give our passengers added convenience and peace of Our staff are our most valuable asset, and their dedication
mind, we made PPE such as face masks and hand sanitiser is key to MTR’s success. We provide competitive pay and
easily accessible by installing PPE vending machines at 14 benefits, short- and long-term incentive schemes, and a
stations. To help ensure a reliable supply of quality face broad range of career development opportunities under
masks, MTR launched a production line at an ISO-certified the total reward framework to attract, retain and motivate
cleanroom at Siu Ho Wan Depot that can produce more our staff. We also recognise and reward our staff through
than 300,000 masks per month. During the year under a robust performance-based pay review mechanism as
review we also optimised our station and train ventilation, well as a variety of staff motivational schemes and awards.
filter cleaning and replacement processes in our trains, Our staff engagement efforts are reflected in our stable
stations and shopping malls. We also placed vending workforce, with the voluntary staff turnover rate in Hong
machines at 20 stations for the public to conveniently Kong staying low at 3.4% in 2020. We provided an average
pick up free COVID-19 specimen collection packs. of 4.8 training days per staff in Hong Kong during the year.
The number of reportable events on our heavy rail and Amid the unprecedented challenges of COVID-19 and the
light rail networks decreased by 45% compared to 2019. weakened macro economy, our top priority is to ensure the
The number of reportable events per million passengers health and safety of our staff, protect their jobs and ensure
carried on our heavy rail and light rail networks continued business sustainability. To safeguard our staff against the
to improve, falling to 0.58 in 2020. pandemic, we enhanced protective measures, initiated
appropriate flexible work arrangements and organised
Enterprise Risk Management programmes to enhance their total wellbeing. We have
Perhaps no year has underscored the importance taken a prudent recruitment approach since early January
of risk management more than 2020. To cope with 2020 to meet our operational needs while containing costs.
unprecedented challenges, MTR’s business units have
followed the Company’s Enterprise Risk Management MTR ACADEMY
framework in their day-to-day operations to ensure
Despite the challenges of operating during a pandemic,
business continuity, health and safety. The Company’s
the MTR Academy was still able to deliver its programmes
risk profile, top risks and key emerging risks are regularly
and expertise to railway professionals and global clients
reviewed by the Executives and the Risk Committee and
from the Mainland of China, Belt and Road countries and
reported to the Board on a half-yearly basis. “Deep dive”
elsewhere via online learning and virtual examinations. In
reviews on selected key risk areas are conducted during
September 2020, the MTR Academy also began offering
the year, and risk mitigation measures are formulated or
full-time diploma programmes.
adjusted as necessary to ensure effective risk management.
COVID-19 remains a significant risk to MTR and its business

OUTLOOK
operations and is likely to remain so well into 2021. In
COVID-19 is a global phenomenon that will have
2020, we introduced a host of initiatives to deal with the
long-lasting impacts. In 2020, it posed unprecedented
effects of the pandemic and get our operations back
challenges to our business and operations and adversely
on track as effectively and efficiently as we can. Moving
affected the financial performance of the Group.
forward, we remain committed to staying abreast of the
latest developments in order to control risks associated At the time of writing, travel restrictions, quarantine
with the pandemic as much as possible and safeguard the mandates, mask-wearing orders and social distancing
well-being of our businesses and stakeholders. guidelines are still in place to varying degrees as
everyone works together to contain and eliminate the
HUMAN RESOURCES spread of COVID-19. Although vaccines have started to
be administered around the world, it remains unclear
As at 31 December 2020, MTR along with our subsidiaries
how the current situation will develop over the coming
employed 17,288 people in Hong Kong and 16,921
months. The speed and magnitude of a global economic
people outside Hong Kong. Our associates employed an
recovery remains highly dependent on the progress made
additional 17,121 people worldwide.
in combatting the pandemic as well as the fiscal and
monetary policies of various governments.
34 MTR Corporation
In 2020, COVID-19 substantially impacted the financial Extension and Tuen Mun South Extension, and we will
performance of our recurrent businesses. Patronage commence the detailed planning and design of Kwu Tung
suffered a large drop, and shopping malls, duty free Station and the Northern Link.
shops, station kiosks and advertising were all badly
We will conduct the detailed design for the Siu Ho Wan
affected. The pandemic also resulted in a lower
Depot site and its adjacent station, and we will explore
revaluation of our investment property portfolio. Such
potential sites for residential and commercial property
effects may continue well into 2021 as a return to
development along existing and future railway lines.
normalcy for our patronage, particularly among tourist
customers, will not be immediate and could potentially To maintain world-class service for customers and keep
Overview
take longer than a year. Our station commercial and cities moving, we must continue to operate safely and
shopping mall businesses will continue to face challenges efficiently in the “new normal”. Our new Corporate
in rentals following the aftermath of last year’s negative Strategy – guided by strong ESG principles to ensure
rental reversions as well as in the accounting standard sustainable and profitable operations for years to come
requirement to spread last year’s rental rebates into – will play a key role in our progress moving forward. The
2021 and beyond. Our duty free business will depend new strategy seeks to enhance our business and profit
completely on the timing of the re-opening of borders growth in each of the three pillars: (i) attaining the full

and the recovery of border patronage while advertising potential of our world-class service performance, cost
income will be dependent on economic recovery and optimisation and new revenue-generating initiatives
consumer spending. The impact of COVID-19 on the in our Hong Kong core businesses; (ii) leveraging our
asset valuation of our investment property portfolio may competitive strengths to maintain steady growth
continue until market conditions are stabilised. through new products and new markets, particularly
in the Mainland of China and also in our international
While the near term remains challenging, we have
businesses; and (iii) embracing new technologies as
reasons to be optimistic about our medium- to long-
enablers for our existing operations and as new engines
term future. Despite the fact that our businesses suffered
to strengthen our long-term growth.
to varying degrees in 2020, the Company is in a solid
financial position, and we continue to drive a number of I would like to thank Dr Peter Ewen, who retired from the
projects and developments that offer strong potential. Company as Engineering Director on 22 February 2021,
for his contributions during his time at MTR.
Subject to market conditions and necessary Government
approvals, we aim to tender out The Southside In closing, I cannot emphasise enough how grateful I am
(also known as “Wong Chuk Hang Station Property for our exceptional staff, who have continued to deliver
Development”) Package 6, Tung Chung Traction world-class service in very challenging conditions over
Substation site, Pak Shing Kok Ventilation Building site the years, particularly in 2020. Difficult times still lie ahead,
and Tung Chung East Station Package 1 (subject to our but I believe that as we keep working together to fulfil the Financials and Other Information
entering into a project agreement with Government) in goals set in our Corporate Strategy, our Company – and
the next 12 months or so. These packages are expected to Hong Kong – will emerge from them even stronger.
provide about 4,800 residential units in total. Applications
for pre-sale consent for The Southside Package 1 and
Package 2 property development projects and The Pavilia
Farm III are in progress. Depending on construction
progress, we target to book development profits from
Packages 7, 8 and 9 of LOHAS Park in 2021.
We look forward to the Tuen Ma Line full line opening,

expected to be in the third quarter of 2021. Working
under Government’s RDS 2014 development framework Dr Jacob Kam Chak-pui
for expanding Hong Kong’s railway network, we will Chief Executive Officer
continue to progress the design of the Tung Chung Line Hong Kong, 11 March 2021

HONG KONG
TRANSPORT OPERATIONS
Enhancing
Safety Customer
Experience
Smart Mobility
and Smart
Operations and
Maintenance
Composite photograph at Kai Tak Station
45% Fewer 99.9 % 3.88 million

Reportable Passenger Journeys Average Weekday
Events On-time Patronage
36 MTR Corporation
AIM
We strive to be an internationally-recognised company that • Intensify cleaning and sanitisation procedures and
connects and grows communities with caring, innovative introduce leading-edge technologies to ensure
station and train cleanliness. Manufacture and provide
and sustainable services. We also seek to generate returns
personal protective equipment for the health and
that enable us to invest in our world-class rail network, safety of our staff and customers
further improve our high levels of service, and continue
• Launch promotions that encourage travel during
meeting the ever-changing needs and expectations of
non-peak hours and promote domestic leisure travel
our customers. These investments involve upgrading via MTR. Leverage MTR Mobile to encourage usage
and replacing our existing railway assets, as well as of our services
Overview
constructing new railway lines that reduce travel times
• Maintain high performance standards that exceed
and bring communities closer together – enabling us the targets set out in the Operating Agreement and
to develop networks that support Hong Kong’s future our own even more demanding Customer Service
growth as an economy and a society. Pledges. Continue our stringent maintenance
regime and invest significantly in renewing and
CHALLENGES upgrading our railway assets
• Maintaining high levels of health, safety and reliability • Leverage our strong culture of safety to deliver

during the COVID-19 pandemic operational excellence. Equip staff with clear
guidelines and sound training in operations and
• Patronage affected by social restrictions, work-from-
customer service, and raise public awareness of rail
home arrangements and border closures
safety through targeted campaigns and information
• Managing major asset upgrades and replacements
• Integrate innovation and technology into our
without compromising our safety and service
operations to drive customer service excellence and
performance or the customer experience
fuel future growth
STRATEGIES • Work to digitise our own internal processes, enhancing

• Adjust and optimise train services, apply cost control the customer experience and optimising operations
measures, and employ further smart operating,
and workflow
smart maintenance and automation initiatives with
a customer centric mindset to alleviate the impact of
reduced patronage due to COVID-19
OUTLOOK
The COVID-19 pandemic could have profound long-term effects in terms of how customer behave. Travel
restrictions and boundary closures have led to an almost complete halt to Hong Kong visitation by travellers Financials and Other Information
from the Mainland of China and overseas, dramatically impacting our Airport Express and High Speed Rail
(“HSR”) patronage. Domestic patronage for our heavy and light rail networks has decreased due to quarantine
measures, work- and study-from-home arrangements, and lower in-store spending by shoppers. These
conditions are expected to continue to varying degrees well into 2021.
As one of the leading operators in the railway business, we will continue to do our utmost to ensure that our
stations, trains and facilities meet the highest standards of cleanliness and sanitisation, thereby providing peace
of mind during passenger journeys. We will also keep striving for excellence in service reliability and safety,
maintaining world-class operational standards as we move closer to the full line opening of the Tuen Ma Line.
Our Corporate Strategy outlines the way forward for MTR and its transport operations. We will seek to achieve
sustainable business results by adhering to strong environmental, social and governance principles that foster
mutually beneficial growth in our communities. In 2021, this will include driving patronage by reviewing our
scheduling and fares while remaining sensitive to the latest Government guidelines and prevailing economic
conditions. MTR Mobile will enhance the customer experience by making it easier to plan trips. As always,
providing comfortable, caring and inclusive customer service will remain a key focus.

BUSINESS REVIEW
HONG KONG TRANSPORT OPERATIONS
SAFETY
Safety is always our highest priority. This year there 2020 featuring MTR Ambassador T Chai. In addition, new
was a 45% decrease in reportable events compared safety labels were placed on all escalators in Kowloon Bay,
to the same period in 2019. The number of reportable Nam Cheong and Causeway Bay stations on a trial basis.
events per million passengers carried on our heavy rail
The Platform Gap Incident Special Task Force made a
and light rail networks continued to improve, falling to
number of site visits throughout the year to identify
0.58 in 2020. While we achieved solid passenger safety
improvement opportunities and platform gap incident
performance in 2020, it must be noted that the number
control measures. In addition to the various measures we
of reportable events in the previous year was skewed by
already have in place to raise passenger awareness, we
the public order events. Further details about our safety
also held an internal promotional campaign during the
performance can be found in the Ten-Year Statistics of
year to convey the importance of the issue to staff and
this Annual Report.
encourage them to proactively remind passengers.
The Escalator Safety Special Task Force continued to
To enhance safety in our Light Rail operations, we
organise programmes following accidents to help
installed smart flashing bollards with highly visible
prevent similar occurrences in future. The Task Force also
flashing yellow strips at pedestrian crossings at two Light
took a number of proactive measures to educate the
Rail locations. We implemented our innovative Integrated
public on the importance of escalator safety, setting up
Speed and Position Supervision System, which helps
Escalator Safety Promotion Booths at various stations and
improve operational safety and efficiency by monitoring
organising Escalator Safety Walks throughout the year.
light rail vehicle speed in real time.
May saw the launch of the Escalator Safety Campaign
38 MTR Corporation
PATRONAGE AND REVENUE
Patronage Revenue
in millions HK$ million
2020 Inc./(Dec.) % 2020 Inc./(Dec.) %
Domestic Service 1,145.0 (27.0) 9,229 (27.4)
Cross-boundary Service 7.6 (92.7) 516 (83.7)
High Speed Rail (“HSR”) 1.0 (93.9) 1,277 (39.1)
Airport Express 3.1 (80.5) 140 (86.2)
Light Rail and Bus 154.0 (25.8) 481 (29.0)
Overview
Intercity 0.1 (94.5) 20 (88.6)
1,310.8 (31.5) 11,663 (41.2)
Others 233 135.4
Total 11,896 (40.3)
Total patronage for all our rail and bus passenger services Average weekday patronage for all our rail and bus
in 2020 decreased by 31.5% to 1,310.8 million passenger passenger services decreased by 30.9% to 3.88 million
trips. This was attributed to the COVID-19 pandemic and passenger trips. Our Domestic Service saw a 26.9%

its effects on both the domestic and tourist markets, decrease to 3.41 million.
which were negatively impacted by anti-pandemic
To stimulate ridership in response to the challenges
measures, cross-boundary service closures, international
posed by the COVID-19 pandemic, we have been
travel restrictions and overall economic decline.
launching promotions such as the Early Bird Discount to
Our Domestic Service (comprising the Kwun Tong, Tsuen promote non-peak travel. We have also been creating
Wan, Island, Tung Chung, Tseung Kwan O, Disneyland attractive fare, ticket and pass promotions, such as a 20%
Resort, East Rail (excluding the Cross-boundary Service), rebate on Octopus trips and HK$100 discounts on MTR
West Rail and South Island lines as well as Tuen Ma Line City Saver and Monthly Pass Extras. We are leveraging our
Phase 1) recorded total patronage of 1,145.0 million in constantly evolving MTR Mobile to deliver these attractive
2020, which was 27.0% lower than the previous year. promotions and other information to users. More than
ever, we have been regularly reviewing our train schedules
Patronage for the Cross-boundary Service to Lo Wu and
to account for demand fluctuations and ensure customer
Lok Ma Chau decreased by 92.7% to 7.6 million. This
convenience. We are also seeking to promote MTR to
was attributed to the drastic reduction in travellers from
domestic users as the preferred transit method for
the Mainland of China following the COVID-19 outbreak
exploring the numerous travel and sightseeing
and subsequent boundary closure. HSR patronage was
opportunities within Hong Kong.
1.0 million, a 93.9% decrease compared to 2019. Airport
Express patronage decreased by 80.5% to 3.1 million as a
result of the steep drop-off in air travellers.
Domestic Service – Patronage and Fare Trend

Average Fare 450
20 2,000 400
18 1,800 350
16 1,600
300
14 1,400
250
12 1,145.0 1,200
200
10 9.2 1,000
7.81 7.84 7.92 8.11 7.82 150
8 800
100
6 600
4 400 50
2 200 –
1990 1995 2000 2005 2010 2015 2020
– –
2016 2017 2018 2019 2020 HK Payroll Index Average Fare Composite
(avg. 5% (Domestic Service only) Consumer Price
Patronage Revenue Average Fare growth p.a.) (avg. 2.4% growth p.a.) Index (avg. 2.9%
(million) (HK$ billion) (HK$) growth p.a.)
(right scale) (left scale) (left scale)

BUSINESS REVIEW
MARKET SHARE
Our overall share of the franchised public transport franchised transport operators. Our share of cross-harbour
market in Hong Kong was 45.3% compared to 47.4% traffic was 66.1% against the 67.5% recorded in 2019.
in 2019. This decline was mainly due to the precipitous
In 2020, our Cross-boundary and HSR service registered
drop in patronage owing to the COVID-19 pandemic
a decrease in market share of cross-boundary business
for Cross-boundary Service, HSR and Airport Express, in
to 47.2% from 51.3%. Our market share to and from the
which we have a relatively higher market share than other
airport decreased to 16.3% from 20.5%.
Market Shares of Major Transport Market Shares of Major Transport

Operators in Hong Kong Operators Crossing the Harbour
(Percentage) (Percentage)
2020 2020
2.1 2.4
2019 2019
14.2
2.1 3.3
13.5
31.5
11.5 11.7
29.2
47.4
45.3 MTR
25.3 67.5
KMB
26.9 Other buses 66.1 MTR
Green minibus Buses
Trams and ferries Ferries
FARE ADJUSTMENTS, PROMOTIONS AND CONCESSIONS

In accordance with the Fare Adjustment Mechanism (“FAM”), package for 2020/2021. Other promotions included
the overall adjustment rate of MTR fares for 2019/2020 setting no price adjustment for the MTR City Saver and
was +3.3%. However, MTR introduced a 3.3% rebate for Tuen Mun-Nam Cheong Day Pass until 1 January 2021;
every Octopus trip valid from 30 June 2019 to 4 April 2020, setting no price adjustment for Monthly Pass Extras
meaning passengers using Octopus effectively paid no until December 2020 (which, as announced in November
actual fare increase. The +0.3% fare adjustment for the 2020, was further extended to June 2021); and extending
announced 2019/2020 FAM that was not implemented may the Early Bird Discount Promotion until 31 May 2021.
also be recouped in 2021/2022, subject to the provisions of In 2020, we offered HK$1.7 billion in on-going fare
the FAM. concessions to the elderly, children, students and persons
with disabilities.
In March 2020, we announced the fare adjustment rate for
2020/2021 is +2.55% according to the FAM. In view of the In April 2020, MTR announced a six-month package of
Affordability Cap owing to the negative growth of Median one-off relief measures, effective 1 July 2020 to 1 January
Monthly Household Income, there is no fare increase for 2021, to help people across the city deal with the adverse
2020, and +2.55% may be recouped over the subsequent economic effects of COVID-19. These included a 20%
two years, with +1.28% to be recouped in 2021/2022 and rebate on every Octopus trip, a substantial increase over
+1.27% to be recouped in 2022/2023. Such recoupments the 3.3% rebate previously being offered. Other relief
will be made subject to the provisions of the FAM. measures included a HK$100 discount on MTR City Saver
and a HK$100 discount on Monthly Pass Extras (from July
We also announced in March 2020 an extension of the
3.3% rebate to 1 January 2021 as part of a promotional
40 MTR Corporation
to December 2020). Following the announcement of the will be effective till June 2021. Government agreed to
extension of these relief measures in November 2020, the bear half of the total actual revenue forgone arising from
20% rebate will be effective till March 2021, and the these measures during the period between July 2020
discounts on MTR City Saver and Monthly Pass Extras and March 2021.
SERVICE PERFORMANCE
Despite the difficult circumstances presented by the On 3 March 2020, MTR released to the public the
Overview
COVID-19 pandemic, train service delivery and passenger investigation report detailing the train derailment that
journeys on-time for our heavy rail network both occurred in September 2019 when three cars of a Hung
remained at 99.9% in 2020, exceeding the targets set Hom-bound East Rail Line train shifted out of their
in our Operating Agreement and our own even more positions on the track, causing the fourth and fifth cars to
demanding Customer Service Pledges. Train service separate. Investigators concluded that the derailment was
delivery is a measure of the actual train trips run against caused by dynamic track gauge widening at a turnout
the train trips scheduled to be run by the Company. near Hung Hom station. Following the release of the

Passenger journeys on-time is a measure of all passenger report, the Company took immediate actions according
journeys that are completed within five minutes of their to the recommendations of the panel to prevent similar
scheduled journey times. incidents from occuring again in future.
In 2020, more than 1.78 million train trips were made on To gauge customer satisfaction levels concerning our
our heavy rail network and more than 1 million trips were services and fares, we carry out regular surveys and
made on our light rail network. There were eight delays research, the results of which are published in our Service
on the heavy rail network and no delays on the light rail Quality Index and Fare Index, respectively.
network, respectively, defined as those lasting 31 minutes Service Quality Index 2020 2019
or more and attributable to factors within the Company’s Domestic and Cross-boundary services 64^ 66
control. The light rail network continued its record dating Airport Express N/A *
79
back to 2019 of no delays lasting 31 minutes or more and Light Rail 62 58
attributable to factors within the Company’s control. Bus 75 68
On 11 September 2020, we announced a delay in the HSR N/A* 83
commencement of the new signalling system and gradual
Fare Index 2020 2019
introduction of new trains on the East Rail Line in order
Domestic and Cross-boundary services 59^ 56
to properly resolve the route recall situation, which
Airport Express N/A *
70
has no impact on safety. An Investigation Panel was Financials and Other Information
Light Rail 61 58
convened and an investigation report was submitted in
Bus 74 66
January 2021. Safety has been reaffirmed by the technical
HSR N/A* 78
investigation, which showed that the concerned issue
^ This only measured Domestic Service as the Cross-boundary services of Lo Wu
was caused by a non-safety-critical software module
and Lok Ma Chau were closed from early February 2020.
being overloaded by a new software module specifically * The Voice of Customer surveys for Airport Express and HSR in 2020 were
suspended due to the outbreak of the COVID-19 pandemic in 2020.
built for the Company to provide extra train monitoring
information to the Operations Control Centre. The MTR is one of the participants in The Community of
contractor resolved the issue by upgrading the software Metros (“CoMET”), which comprises 20 metro systems
and stopping the new software module. Following around the world to benchmark performance and
satisfactory completion of all further testing and improve practices across the industry. In 2019, our
approvals from relevant Government departments on the performance was greatly affected by the public order
safe and sound condition of the new signalling system events and saw unfavourable change in some of the key
and new trains, the new signalling system and trains were performance indicators. The 2019 CoMET benchmarking
commissioned on 6 February 2021. results can be found in the “Performance Metrics” section
of our sustainability website.

BUSINESS REVIEW
Operations Performance in 2020

Customer
Performance Service Actual
Service Performance Item Requirement Pledge Target Performance
Train service delivery
– Kwun Tong Line, Tsuen Wan Line, Island Line, Tseung Kwan O Line, South Island Line,
Tung Chung Line, Disneyland Resort Line and Airport Express 98.5% 99.5% 99.9%
– East Rail Line (including Tuen Ma Line Phase 1) 98.5% 99.5% 99.8%
– West Rail Line 98.5% 99.5% 99.9%
– Light Rail 98.5% 99.5% 99.9%
Passenger journeys on-time
Tung Chung Line and Disneyland Resort Line 98.5% 99.5% 99.9%
– Airport Express 98.5% 99.0% 99.9%
– West Rail Line 98.5% 99.0% 99.9%
Train punctuality
Tung Chung Line and Disneyland Resort Line 98.0% 99.0% 99.8%
– Airport Express 98.0% 99.0% 99.9%
– West Rail Line 98.0% 99.0% 99.9%
– Light Rail 98.0% 99.0% 99.9%
Train reliability: train car-km per train failure causing delays ≥5 minutes
Tung Chung Line, Disneyland Resort Line and Airport Express N/A 700,000 5,267,876
– East Rail Line (including Tuen Ma Line Phase 1) and West Rail Line N/A 700,000 8,877,544
Ticket reliability: smart ticket transactions per ticket failure
Tung Chung Line, Disneyland Resort Line, Airport Express, East Rail Line (including Tuen
Ma Line Phase 1) and West Rail Line N/A 10,500 34,919
Add value machine reliability
– West Rail Line 98.0% 99.0% 99.9%
Ticket machine reliability
– West Rail Line 97.0% 99.0% 99.9%
– Light Rail^ N/A N/A N/A
Ticket gate reliability
– West Rail Line 97.0% 99.0% 99.9%
Light Rail platform Octopus processor reliability* N/A N/A N/A
Escalator reliability
– West Rail Line 98.0% 99.0% 99.9%
Passenger lift reliability
– West Rail Line 98.5% 99.5% 99.9%
Temperature and ventilation
– Trains, except Light Rail: to maintain a cool, pleasant and comfortable train environment
generally at or below 26ºC N/A 97.5% 99.9%
– Light Rail: on-train air-conditioning failures per month N/A <3 0
– Stations: to maintain a cool, pleasant and comfortable environment generally at or
below 27ºC for platforms and 29ºC for station concourses, except on very hot days N/A 93.0% 99.9%
Cleanliness
– Train compartment: cleaned daily N/A 99.0% 99.9%
– Train exterior: washed every two days (on average) N/A 99.0% 100.0%
Northwest transit service area bus service
– Service Delivery N/A 99.0% 99.7%
– Cleanliness: washed daily N/A 99.0% 100.0%
Passenger enquiry response time within six working days N/A 99.0% 100.0%
^ Repair works on damaged Light Rail Ticket Machines are underway. Performance data will be available after completion of repair and testing works.
* Light Rail Platform Octopus Processor replacement works and testing are underway. Performance data will be available after completion of
installation, testing and trial operations of the new processors.
42 MTR Corporation
Overview
ENHANCING THE CUSTOMER EXPERIENCE
Delivering a world-class customer experience is one of the our scheduling in a timely manner according to the latest
hallmarks of MTR and a major focal point of our Corporate situation to meet fluctuating passenger demand and
Strategy as we seek to constantly improve the comfort deliver the highest level of service convenience.
and utility of our services for passengers from all walks of
life. During the year under review, we invested more than Greater Comfort for Passengers
HK$10.9 billion to maintain, upgrade or replace our Hong New Trains
Kong railway assets.
MTR ordered 93 new heavy rail eight-car trains earlier,
nine of which had been delivered as at the time of writing.
Boosting Passenger Convenience
Two more are scheduled to be delivered by early 2021.
New Line Openings Testing and commissioning continue with the aim of Financials and Other Information
On 14 February 2020, MTR opened Phase 1 of the Tuen retiring older trains before their life expiry.
Ma Line, commencing services at the new stations of Hin
Keng Station and Kai Tak Station, as well as the expanded New Light Rail Vehicles
section of Diamond Hill Station. Passengers travelling on We ordered 40 new light rail vehicles to retire older
the former Ma On Shan Line can now travel to Kai Tak vehicles and meet increasing demand for light rail
Station in East Kowloon via Hin Keng and Diamond Hill services. Two of these light rail vehicles were put into
stations without needing to interchange. To celebrate service in November 2020. As at the end of 2020, eight
the launch, we offered a special fare promotion for more had been delivered and were undergoing testing
passengers. The average daily usage of these three and commissioning. By 2023, we expect the size of our
stations from opening to the end of 2020 was light rail fleet to be expanded to 150.
125,000 passengers.
Replacement of Air Conditioning Systems
During the year, the frequency of our train services Work to replace approximately half our chillers with
was affected by COVID-19 and the implementation newer, more energy-efficient models continued
of work-from-home arrangements, social distancing throughout our stations and depots this year. We
measures and travel restrictions. In response, we adjusted

BUSINESS REVIEW
completed Phase 3 in November 2020; a total of concourses and on platforms to provide more places to
92 chillers in 18 stations and four depots have now been rest. We also completed the repainting of platforms and
replaced. Phase 4 began in fourth quarter 2020, which replacement of platform seats at 17 light rail stops during
involved the replacement of another 32 chillers in eight the year for improved station environment and comfort.
stations and one depot and is expected to be completed Works for remaining light rail stops are scheduled to be
in April 2021. The completion of all phases of work is completed by 2025.
expected in 2023, at which time passengers will be
To help passengers stay connected while on the go,
able to enjoy even more comfortable train and
our free Wi-Fi coverage was expanded during the year
station environments.
from station hotspots to all of the station concourse and
Upgrading of Signalling System platform areas. In addition, mobile charging stations,
including USB charging sockets and wireless charging
In order to increase the overall capacity of our services,
pads, are now available in 29 stations.
we are in the process of upgrading our signalling system.
Software revamping and assurance work on the Tsuen
Enhancing Customer Journeys
Wan Line signalling system is progressing slowly,
Through Technology
further compounded by COVID-19 lockdown measures
imposed at the contractor’s office in Canada. We are Smart Mobility
also replacing the signalling systems for the Island, Kwun New innovations and technologies are cornerstones of
Tong and Tseung Kwan O lines. Work on the signalling our future growth as we fully implement our Corporate
of the Tung Chung and Disneyland Resort lines as well Strategy. In May 2020, we launched a new version of
as Airport Express will be planned together with the MTR Mobile to provide customers with railway and other
Tung Chung Line Extension under Railway Development transport information and functions, as well as news and
Strategy 2014. offers from MTR Malls and MTR Shops plus a variety of
lifestyle content. The app also features the MTR Points
Enhancing Station Facilities loyalty scheme whereby customers can earn and redeem
During the year, we continued our efforts to make the MTR Points.
passenger experience as comfortable and convenient as
In August 2020, MTR Mobile’s “Next Train” function was
possible. In February 2020, new public toilets and baby
extended to the light rail network. Passengers may now
care rooms were opened at the stations along the newly
check the estimated arrival times for up to five routes at
opened Tuen Ma Line Phase 1, followed by openings at
each platform of any light rail stop, in real time.
Yau Ma Tei Station in June 2020 and North Point Station
in September 2020. New toilet and baby care rooms In October 2020, the app’s “Trip Planner” was improved
are scheduled to be opened at Tsim Sha Tsui Station by to recommend up to three journey options, each
2022. New external lifts and escalators were provided supplemented with estimated travel times, interchange
to further improve barrier-free access at stations. Over walking times and numbers of interchanges. “Traffic
100 passenger lifts across the network have now been News” was also enhanced to inform passengers of any
equipped with “contactless” lift button sensors to protect service disruptions based on their pre-set route via
our customers during the pandemic. push notifications.
To cater for growing passenger demand for public MTR is also committed to offering the latest in smart
drinking water facilities, support environmental mobility. A number of initiatives were introduced in 2020
protection and support Government in its pursuit of to digitalise and automate customer touchpoints and
related policies, we continued to install drinking water deliver a smarter, more seamless travel experience. For
dispensers at selected stations throughout the year. example, passengers can purchase monthly passes in
Seven newly installed dispensers were put in service in advance via MTR Mobile and avoid queuing in stations.
2020. We plan to have water dispensers installed at Students may now use the app to renew their “Student
18 stations by 2022. Status” on their Octopus cards and continue enjoying
concessionary fares. Starting from 23 January 2021, a
To meet the needs of Hong Kong’s growing aged
brand-new QR code payment service for the heavy rail
population, we installed a number of extra seats in
44 MTR Corporation
network was launched, which enables passengers to motion control, to identify and report anomalies in the
tap entry and exit gates using a QR Code Ticket on MTR underframes of rolling stock. We also started trialling a
Mobile or EasyGo on AlipayHK. Smart Train Roof and Pantograph Monitoring System at
the Tuen Ma Line Phase 1, which automatically captures
Smart Operations and Maintenance a complete image of the train pantograph and train
MTR continued to explore robotics and automation to roof and uses image recognition technology to identify
improve the effectiveness and efficiency of a variety of potential anomalies and alert users to prevent further
maintenance and back-of-house processes. In the third escalation of failure.
quarter of 2020, we introduce five AI-powered “smart
During the year, MTR introduced leading-edge smart
Overview
trainee” robots at Kai Tak Station to perform cleaning,
asset management technologies such as blockchain,
inspection and customer relations tasks. In May, we
cloud computing and AI to streamline its supply chain,
launched the InnoEtronic invention zone and robotics
improve workflow and collaboration, and optimise train
co-working space at Kowloon Bay Depot, a strategic
deployment and maintenance. We also continued to
partnership with 13 local start-ups and industry solution
apply digital technology to improve our maintenance
experts. The project aims to support the development
records and processes. MTR has also introduced a smart
and application of innovative technologies for smart
Track Dynamic Performance System on East Rail Line

maintenance, inspire future innovators and provide a
trains to monitor in real time the critical track geometry
working space for them to develop proof-of-concept
parameters and vibration measurements along the
projects and trials.
line, thereby facilitating predictive and prescriptive
Following its successful introduction at Pat Heung Depot, maintenance. In April 2020, we began using the Smart
we expanded the use of the Automatic Air-conditioning Forms mobile app to digitise maintenance information
Filter Cleaning Machine (“ACM”) to Chai Wan depot. and records, resulting in faster and higher-quality
ACMs replace tedious manual cleaning and help maintenance works.
standardise filter cleaning quality and efficiency. We
On the Light Rail, our innovative Integrated Speed and
also began trialling the Underframe Inspection Robot
Position Supervision System was enhanced so that the
(“UIR”) at Pat Heung Depot. The UIR adopts cutting-edge
speed of light rail vehicles can be monitored in real time,
technologies, including image recognition, AI and precise
further improving operational safety and efficiency.

HONG KONG STATION
COMMERCIAL BUSINESSES
Station
Advertising
Retail
Tele-
communications
5G 1,529
49,519 Data Access in Station Shops with
Advertising Units
40 Stations 67,746m 2
46 MTR Corporation
AIM STRATEGIES
We strive to deliver value-added services to our customers Station Retail
and business partners with a variety of offerings along • Foster strong tenant relations and attract new tenants
our railway network, including a wide selection of station by offering flexible as well as shorter-term rental
retail outlets as well as leading-edge, diverse advertising agreements to help retail businesses – particularly
small to medium enterprises – persevere through the
modes and telecommunications services.
economic downturn
• Help tenants leverage online-to-offline commerce
CHALLENGES and drive sales despite lower foot traffic and in-store
Overview
Station Retail shopping via offers with the MTR Mobile app and MTR
• COVID-19 outbreak and subsequent economic Points loyalty programme
downturn substantially affected tenant operations • Continue reviewing the station tenant mix to enhance
and retail sales, impacting the Company’s station customer appeal and drive rental revenue
retail business
• Continue introducing new brands into our
• Rental concessions provided to help tenants station shops
withstand station closures and reduced foot traffic
resulted in a drop in rental revenue. For leases to be Advertising

renewed, there was downward pressure on rentals due • Offer more targeted, aggressive and flexible sales
to market conditions, causing a further reduction in packages as well as extra sales incentives to capture
rental income advertisers’ limited advertising budgets
Advertising • Continue to integrate digital formats into our

• Revenue fell by more than 50% as advertising advertising mix to target online budgets and increase
spending drastically shrank following COVID-19 the media value and appeal of our media offerings
with digital solutions, driving new growth areas as per
• Traditional advertising formats continued to be our Corporate Strategy
challenged by online media
Telecommunications
Telecommunications • Continue working with telecom operators to upgrade
• Telecoms infrastructure continued to be stretched data network capacity and launch 5G across our
by growing customer demand for faster, more railway network to enhance mobile communications
sophisticated networks and wider coverage for our customers
• Reduced revenue from telecommunication operators
resulted in downward pressure on contract renewal
OUTLOOK
The COVID-19 pandemic will continue to have significant impacts on our station retail tenants and rental
revenue in 2021 as consumer sentiment is expected to remain sluggish in the near term. Our station retail
businesses may see continuing challenges in rentals resulting from the aftermath of last year’s negative
rental reversions as well as the accounting standard requirement to spread last year’s rental rebates into
2021 and beyond. Our duty free business recovery will depend completely on the timing of the re-opening
of borders and the recovery of border patronage. In the longer term, we are still well positioned for growth
as more lines and stations are added to our Hong Kong network, which will bring more passengers through
our stations and increase the prospect of more rental revenue from tenants.
Our advertising income will be dependent on economic recovery and retail spending. To capture clients’
advertising budgets, we will continue to incorporate more digital formats in our advertising portfolio to keep
up with consumer demand for dynamic, flexible and targeted offers as well as online and mobile commerce.
We will also continue to work with telecommunications providers to upgrade our networks and ensure that
we are delivering the best possible service for our passengers.

BUSINESS REVIEW
HONG KONG STATION COMMERCIAL BUSINESSES
Revenue from Hong Kong In 2020, total revenue from all Hong Kong station
Station Commercial Businesses commercial activities decreased by 51.9% to HK$3,269
(HK$ million) million. This was mainly due to rental concessions granted
6,799 to tenants who were affected by station closures and
6,458 126
5,975 126 743 suspended cross-boundary rail services following border
126 696
5,544
635
shutdowns, as well as rental concessions granted to other
170 1,130
561 1,212
station shop tenants during the COVID-19 outbreak.
1,071
1,090
3,269
92
640
4,800 516
4,143 4,424
3,723
2,021
2016 2017 2018 2019 2020
Station Retail Telecommunication Services

Advertising Others
STATION RETAIL
Rental concessions and the closure of duty free shops in As at 31 December 2020, the lease expiry profile of
border stations resulted in a 57.9% decrease in station our station kiosks (including duty free shops) by area
retail rental revenue to HK$2,021 million. occupied was such that approximately 32% will expire in
2021, 47% in 2022, and 21% in 2023 and beyond.
In addition to rental concessions granted to tenants
affected by the suspended cross-boundary rail services, In terms of trade mix, food and beverage accounted for
we offered rental relief to small to medium tenants in approximately 22% of the leased area of our station kiosks
other station shops by granting half-month reductions (excluding duty free shops), followed by cake shops 16%,
of their rents from February to April 2020, underscoring convenience stores 14%, passenger services 11% and
our commitment to society and our support of local others 37% as at 31 December 2020.
businesses in difficult times. Rental relief for large
As at 31 December 2020, there were 1,529 station
corporations was considered on a case-by-case basis.
shops occupying 67,746 square metres of retail space,
From May to December 2020, we continued offering
representing an increase of 37 shops and 409 square
rental relief to all tenants. Rental reversion and average
metres of lettable space when compared with
occupancy rates in 2020 for our station kiosks were
31 December 2019. The increases were mainly due to
approximately -8% and 98.3%, respectively.
the openings of shops at the new Hin Keng Station,
During the year, the Company continued to employ Kai Tak Station, and the expanded Diamond Hill Station
innovative marketing promotions to stimulate retail along the Tuen Ma Line Phase 1 as well as Admiralty and
activity. The MTR Mobile app’s MTR Points loyalty scheme, Kowloon stations.
introduced in May 2020, encourages customers to
To help non-governmental organisations and social
make purchases at designated station shops and MTR
enterprises provide services for the community, we rent
Malls and redeem gifts with earned MTR Points. We also
them certain station shops along the West Rail Line and
launched promotional campaigns from time to time,
other lines at a nominal rate. In 2020, a total of nine
including special offers from station shops to boost sales.
station shops were leased on this basis.
Meanwhile, our two “v-smart” unmanned automated
station shops at Kowloon and Tsing Yi stations continued
to offer customers a new retail experience. In 2020,
22 new brands were introduced to our network.
48 MTR Corporation
ADVERTISING
Revenue from advertising decreased by 54.3% to and West Rail Line. New advertising provisions were also
HK$516 million as a result of the COVID-19 outbreak, available after the opening of the Tuen Ma Line Phase 1.
leading to steep declines in tourism and retail sales and
To drive business for our advertisers, we launched
causing advertisers to postpone or cancel campaigns.
online-offline advertising modes with sales packages
As at 31 December 2020, the number of advertising units bundling our MTR Mobile app and station advertising
in stations and trains had increased to 49,519. This year platforms. We also collaborated with advertisers on
we installed a new 108” LED concourse network along various promotional activities via MTR Mobile’s
Overview
Island Line and Kwun Tong Line and two new trackside loyalty programme.
108” LED zones at Central Station and Tsim Sha Tsui
In 2020, MTR provided free advertising space to 64
Station. We also launched a new 86” 4K resolution digital
non-profit organisations to help promote their services.
panel network along East Rail Line, Tuen Ma Line Phase 1

TELECOMMUNICATIONS Financials and Other Information
Telecommunications revenue decreased by 13.9% to Our new commercial telecom system project continued
HK$640 million in 2020. This was attributed to the special during the year, with 26 of 31 stations completed as at
fee concession given during the COVID-19 pandemic and 31 December 2020. Also as at year-end, 5G services had
subsequent economic downturn as well as the revised fee been launched at 40 stations by some telecom operators.
due to contract renewal.

HONG KONG PROPERTY
AND OTHER BUSINESSES
Property Property
Development Rental
Property
Management
Over 23,000 14 Managing Over

Residential Units
and 2 Shopping Malls
Shopping Malls 111,000
in Our Portfolio Residential Units
Under Development
50 MTR Corporation
AIM
We aim to create shareholder value by maximising our assets • Remain keenly attuned to the business difficulties faced by
through exploring property development, rental, management and our mall tenants, particularly those operating in food and
acquisition opportunities, creating integrated, inclusive communities beverage and discretionary segments, by working together on
along our world-class rail network. We also strive to provide excellent collaborations such as loyalty and redemption programmes
service for these projects by applying our expertise in all aspects of • Widen the targeted trades in our malls to further diversify
property development and management as well as engaging the our offerings
community.
Property Management
CHALLENGES • Continue implementing anti-pandemic measures at our
estates, buildings and malls to ensure health and safety
Property Rental
Overview
• Optimise costs by reviewing operational processes
• COVID-19 caused steep declines in tourist traffic and domestic and expenditures
spending, negatively impacting our mall rental business • Continue offering a world-class property management
• Work-from-home arrangements and the weak economic service that meets or exceeds customer requirements
environment curbed business expansion and office demand and expectations
• The rise of e-commerce continues to affect consumer • In line with the sustainability and environmental goals set out
behaviour and retail space demand and drive business toward in the Corporate Strategy, develop and promote more green
online shopping, particularly in response to the pandemic projects with greater energy efficiency for the health of our
residents, tenants and communities
Property Management

• Statutory changes in licensing, procurement and maintenance Property Development
are impacting the residential property management industry in • Continue leveraging our proven “Rail Plus Property” integrated
Hong Kong development model as a competitive advantage for buyers
seeking quality units with convenient transportation links
Property Development • Expand by seeking the rezoning of feasible existing railway sites
• COVID-19 continues to disrupt the global economy and create for potential new developments
fluctuations in capital flow
• Deliver property developments of a high standard, on time and
within budget
STRATEGIES • Continuously improve our standards through innovation and by
Property Rental capturing new development opportunities
• Continue to support tenants, especially small to medium Property Safety
enterprises, with rental concessions and flexible lease
• Safety at our construction sites, investment and managed
arrangements in order to further build long-term relationships
properties, and adjoining railway facilities is our top priority
and maintain occupancy
OUTLOOK
COVID-19 will continue to impact mall rentals as travel restrictions limit tourism to Hong Kong, especially from the Mainland of China,
and work-from-home and social distancing policies curtail in-store spending by domestic consumers. In line with our Corporate
Strategy, which emphasises new growth engines such as digital retail as a core growth pillar, we will seek to leverage our enhanced
MTR Mobile app and new “MTR Points” loyalty programme to inform users of offers from mall tenants and drive online-to-offline
sales. We will also analyse our trade mix to determine where we can further diversify our offerings into lifestyle to attract more mall Financials and Other Information
traffic. Our shopping mall business will continue to face challenges in rentals resulting from the aftermath of last year’s negative
rental reversions as well as the spreading of last year’s rental rebates into 2021 and beyond in accordance with accounting standard
requirement. We look forward to opening the remaining shops of The LOHAS and our shopping centres in Tai Wai and Wong Chuk
Hang (now named “The Southside”) in 2023. The impact of COVID-19 on the asset valuation of our investment property portfolio may
continue until market conditions are stabilised. Office rentals will remain under pressure as work-from-home arrangements and the
weak economic environment dampen business expansion plans and office demand.
Despite the pandemic and economic downturn, our property development business is performing relatively well. Profit from property
development is dependent on the sale of the property developments and construction progress and will vary from year to year.
Depending on construction progress, we target to book development profits from Packages 7, 8 and 9 of LOHAS Park in 2021. Subject
to market conditions and necessary Government approvals, we aim to tender out The Southside (also known as “Wong Chuk Hang
Station Property Development”) Package 6, Tung Chung Traction Substation site, Pak Shing Kok Ventilation Building site and Tung
Chung East Station Package 1 (subject to our entering into a project agreement with Government) in the next 12 months or so. These
packages are expected to provide about 4,800 residential units in total. Applications for pre-sale consent for The Southside Package 1
and Package 2 property development projects and The Pavilia Farm III are in progress.
Revenue from property management is recurrent and dependent on the properties under management, which will increase as new
projects are completed.
The health and safety of our customers, staff, tenants and residents is our number one priority. As we anticipate that the societal
impacts of COVID-19 will last well into 2021, we will continue to take all necessary precautions to ensure hygiene in our estates, malls
and office buildings.

BUSINESS REVIEW
HONG KONG PROPERTY AND OTHER BUSINESSES
PROPERTY RENTAL
Property rental revenue decreased by 0.3% year on year pop-up stores at our properties to help drive mall traffic.
to HK$4,817 million in 2020. This was mainly due to relief We are also considering widening the trade mix in our
measures provided to tenants during the pandemic, malls to further diversify our offerings.
which were granted on a case-by-case basis with priority
During the year, the Company held marketing activities to
given to small to medium tenants; however, these were
drive traffic to malls and help tenants offset the adverse
partially offset by the incremental contribution from our
effects of COVID-19. Many of these were promoted via
newly opened and acquired shopping malls. In 2020, our
the upgraded MTR Mobile app, an integrated platform
shopping malls recorded a negative rental reversion rate
covering information on MTR Malls and MTR Shops,
of approximately 21% due to adverse retail sentiment.
lifestyle content, and a new “MTR Points” loyalty scheme
Our shopping malls (other than The LOHAS, which was
that allows customers to earn MTR Points for their
opened in August 2020) and the Company’s 18 floors in
purchases at designated MTR outlets and redeem them
Two International Finance Centre had average occupancy
for special rewards.
rates of 99% and 98%, respectively.
In August and November 2020, we opened phases 1
As at 31 December 2020, the lease expiry profile of our
and 2 of The LOHAS, a three-storey, 44,500-square-metre
shopping malls by area occupied was such that
shopping centre at LOHAS Park that connects seamlessly
approximately 33% will expire in 2021, 30% in 2022,
with the LOHAS Park Station and nearby residential
20% in 2023 and 17% in 2024 and beyond.
buildings. The LOHAS will be home to over 140 tenants
In terms of trade mix as at 31 December 2020, food and features Hong Kong’s largest indoor ice rink, Tseung
and beverage accounted for approximately 29% of the Kwan O’s largest cinema and a family entertainment
leased area of our shopping malls, followed by fashion, centre project that is the first of its kind in Hong Kong.
beauty and accessories for 22%, services 22%, leisure
In 2020, the Company acquired the remaining economic
and entertainment 17%, and department stores and
interests in Telford Plaza II in Kowloon Bay and PopCorn 2
supermarkets 10%.
in Tseung Kwan O from New World Development
As at 31 December 2020, the Company’s attributable Company Limited and Chow Tai Fook Enterprises Limited
share of investment properties in Hong Kong was 257,692 for a total consideration of HK$3 billion. We now hold
square metres of lettable floor area for retail properties, 100% interest in both shopping centres. Repartitioning
39,410 square metres of lettable floor area for offices and work for the fourth and fifth levels of Telford Plaza II has
18,905 square metres of property for other use. been completed, and all shops are now open.
Steep declines in tourist traffic and domestic spending Pursuant to MTR’s environmental goals of reducing
negatively impacted our mall rental business, while energy use in its investment property portfolio, the
work-from-home arrangements and the weak economic Company worked to install energy-efficient lighting,
environment adversely affected our office tenants’ water pumps, air conditioning systems and chillers in our
business expansion plans and reduced their space managed properties. In 2013, we set a target to reduce
requirements. We remained keenly attuned to the energy use in our investment properties portfolio by 12%
business difficulties faced by our mall tenants, particularly by 2023. As of 2020, our Hong Kong investment property
those operating in food and beverage and discretionary portfolio has already exceeded this target. Further
segments, collaborating with them on initiatives such as information about our environmental efforts can be
loyalty and redemption programmes to boost business. found in our Sustainability Report 2020.
We helped e-commerce and online merchants open
52 MTR Corporation
Investment Property Portfolio in Hong Kong (as at 31 December 2020)
Company’s
Lettable floor No. of parking economic
Location Type area (sq. m.) spaces interest
Telford Plaza I, Kowloon Bay, Kowloon Shopping Centre 39,331 – 100%
Car Park – 993 100%
Telford Plaza II 7–8/F, Kowloon Bay, Kowloon Shopping Centre 2,397 – 100%
Telford Plaza II 3–6/F, Kowloon Bay, Kowloon Shopping Centre 19,057 – 100%
Car Park – 136 100%
Luk Yeung Galleria, Tsuen Wan, New Territories Shopping Centre 11,094 – 100%
Car Park – 651 100%
Overview
Paradise Mall, Heng Fa Chuen, Hong Kong Shopping Centre 15,410 – 100%
Wet Market 1,216 – 100%
Kindergarten 2,497 – 100%
Car Park – 415 100%
Maritime Square 1, Tsing Yi Shopping Centre 28,547 – 100%
Kindergarten 920 – 100%
Car Park – 220 100%
Motorcycle Park – 50 100%
Maritime Square 2, Tsing Yi Shopping Centre 6,448 – 100%

Car Park – 65 100%
The Lane, Hang Hau Shopping Centre 2,629 – 100%
Car Park – 16 100%
PopCorn 2, Tseung Kwan O Shopping Centre 8,456 – 100%
Car Park – 50 100%
PopCorn 1, Tseung Kwan O Shopping Centre 12,174 – 50%
Car Park – 115 50%
G/F, No. 308 Nathan Road, Kowloon Shop Unit 70 – 100%
G/F, No. 783 Nathan Road, Kowloon Shop Unit 36 – 100%
New Kwai Fong Gardens, Kwai Chung, New Territories Kindergarten 540 – 100%
Car Park – 126 100%
International Finance Centre ("ifc"), Central, Hong Kong
– Two ifc Office 39,410 – 100%
– One and Two ifc Car Park – 1,308 51%
Phase I, Carpark Building, Kornhill, Quarry Bay, Hong Kong Car Park – 292 100%
Roof Advertising Signboard, Admiralty Centre, No. 18 Harcourt Advertising – – 100%
Road, Hong Kong Signboard
Ten Shop Units, First Floor Podium, Admiralty Centre, No. 18 Shop Unit 286 – 50%
Harcourt Road, Hong Kong Financials and Other Information
Olympian City One, Tai Kok Tsui, Kowloon Indoor Sports Hall 13,512 – 100%
Olympian City Two, Tai Kok Tsui, Kowloon Shop Unit 1,096 – 100%
Choi Hung Park & Ride Public Car Park, No. 8 Clear Water Bay Road, Car Park – 54 100%
Choi Hung, Kowloon Motorcycle Park – 10 100%
Park & Ride – 450 100%
Elements, No. 1 Austin Road West, Kowloon Shopping Centre 45,510 – 81%
Car Park – 898 81%
Cross Border Coach Terminus, No. 1 Austin Road West, Kowloon Coach Terminus 5,113 – 100%
Kindergarten, No. 1 Austin Road West, Kowloon Kindergarten 1,045 – 81%
Plaza Ascot, Fo Tan Shopping Centre 7,720 – 100%
Car Park – 67 100%
Royal Ascot, Fo Tan Residential 2,784 – 100%
Car Park – 20 100%
Ocean Walk, Tuen Mun Shopping Centre 6,083 – 100%
Car Park – 32 100%
Sun Tuen Mun Shopping Centre, Tuen Mun Shopping Centre 9,022 – 100%
Car Park – 421 100%

BUSINESS REVIEW
Investment Property Portfolio in Hong Kong (at 31 December 2020)(continued)

Company’s
Lettable floor No. of parking economic
Hanford Plaza, Tuen Mun Shopping Centre 1,924 – 100%
Car Park – 22 100%
Retail Floor and 1–6/F., Citylink Plaza, Shatin Shopping Centre 12,154 – 100%
The Capitol, LOHAS Park, Tseung Kwan O Shop Unit 391 – 100%
Residential Care 2,571 – 100%
Home for the Elderly
Le Prestige, LOHAS Park, Tseung Kwan O Kindergarten 800 – 100%
Car Park – 2 100%
The Riverpark, No.8 Che Kung Miu Road, Shatin Shop Unit 154 – 100%
Kindergarten 708 – 100%
Car Park – 5 100%
Hemera, LOHAS Park, Tseung Kwan O Kindergarten 985 – 100%
THE LOHAS, Tseung Kwan O Shopping Centre 27,852 – 100%
Kindergarten 1,141 – 100%
Car Park – 333 100%
All Properties are held by the Company and its subsidiaries under Government Leases for over 50 years except for:
• Telford Plaza I and II, Luk Yeung Galleria, Maritime Square 1 and 2, New Kwai Fong Gardens, ifc, Olympian City, Elements, Cross Border Coach Terminus and Kindergarten at No. 1
Austin Road West, Plaza Ascot, Royal Ascot, Ocean Walk, Sun Tuen Mun Shopping Centre and Hanford Plaza where the Government Leases expire on 30 June 2047
• Choi Hung Park & Ride where the Government Lease expires on 11 November 2051
• The Lane where the Government Lease expires on 21 October 2052
• PopCorn 2 where the Government Lease expires on 27 March 2052
• LOHAS Park where the Government Lease expires on 15 May 2052
• Citylink Plaza where the Government Leases expire on 1 December 2057
• The Shop Units and Kindergarten of The Riverpark where the Government Lease expires on 21 July 2058
Properties Held for Sale (as at 31 December 2020)

Company’s
Gross floor No. of parking economic
Olympian City One, No. 11 Hoi Fai Road, Kowloon Shopping Centre 6,026 * – 40%
Car Park – 330 40%
Bank of China Centre, No. 11 Hoi Fai Road, Kowloon Car Park – 117 40%
The Arch, No. 1 Austin Road West, Kowloon Residential 548 ** – 1%
Car Park – 12 1%
Harbour Green, No. 8 Sham Mong Road, Kowloon Kindergarten 1,299 – 50%
Residence Oasis, No. 15 Pui Shing Road, Hang Hau, Tseung Kwan O Motorcycle Park – 5 71%
The Grandiose, No. 9 Tong Chun Street, Tseung Kwan O Motorcycle Park – 24 70%
Wings at Sea and Wings at Sea II, LOHAS Park, Tseung Kwan O Residential 2,847 *** – 20.1%
Car Park – 300 20.1%
Motorcycle Park – 46 20.1%
MALIBU, LOHAS Park, Tseung Kwan O Residential 1,058 *** – 47%
Car Park – 111 47%
LP6, LOHAS Park, Tseung Kwan O Residential 5,238 *** – 63.3%
Car Park – 479 63.3%
Motorcycle Park – 50 63.3%
The Palazzo, No. 28 Lok King Street, Shatin Retail 2,000 – 55%
Car Park – 9 55%
Festival City, No. 1 Mei Tin Road, Shatin Car Park – 79 100%
Lake Silver, No. 599 Sai Sha Road, Shatin Car Park – 2 92.88%
The Riverpark, No. 8 Che Kung Miu Road, Shatin Car Park – 2 87%
* Lettable floor area

** Brochure gross floor area as per previously issued marketing brochures
*** Saleable area
54 MTR Corporation
Investment Properties in Hong Kong Distribution of Hong Kong Property
100 10,000 Management Income
90 9,000 (Percentage)
80 85.5 8,000 2020
70 7,000
3.8
2019
60 6,000 10.7
3.7
50 5,000
10.4
3,652 3,814 3,921 3,973 3,865
40 4,000
30 3,000
14.2
15.8
Overview
20 2,000
10 1,000
70.1
– – Residential
2016 2017 2018 2019 2020
Retail
Total Value of Investment Properties Net Rental Income 71.3
Office
(HK$ billion) (left scale) (HK$ million) (right scale)
Car Park

EXPANDING THE RETAIL PORTFOLIO
We are opening two new malls that will add The Southside
approximately 30% to the attributable GFA of our existing In January 2021, the Company announced the naming
retail portfolio as of 31 December 2020 for a total of of the mall at Wong Chuk Hang as The Southside.
107,620 square metres. Foundation works on the 47,000-square-metre (GFA)
project continued, and it is on target for completion by
Tai Wai Shopping Centre the end of 2023.
Construction of the 60,620-square-metre (GFA) shopping
centre at Tai Wai Station continued to make progress in
2020. Construction of the basement and superstructure
is in progress. The project is scheduled for completion
in 2023.

BUSINESS REVIEW
PROPERTY MANAGEMENT
Property management revenue in Hong Kong decreased residential units and over 772,000 square metres of office
by 22.0% to HK$237 million compared to 2019. As at and commercial space in Hong Kong.
31 December 2020, MTR managed more than 111,000
PROPERTY DEVELOPMENT
Hong Kong property development profit for the year was International Holdings Limited and China Merchants
HK$5,442 million, which was primarily derived from the Land Limited. In January 2021, the Company awarded
surplus proceeds from LOHAS Park Package 6 and sales of the tender for The Southside Package 5 to a consortium
inventory units. formed by New World Development Company Limited,
Empire Development Hong Kong (BVI) Limited, CSI
Pre-sales Properties Limited and Lai Sun Development Company
Despite the pandemic and economic downturn, our Limited. For the Ho Man Tin Station Package 1 property
property development business is performing relatively development project, a novation agreement has been
well with satisfactory sales. Our property development reached between MTR Corporation Limited, Goldin
projects at LOHAS Park and Tai Wai Station were received Properties Holdings Limited and Great Eagle Group. The
favourably by the market in 2020. Company will work together with Great Eagle Group to
Units Sold as at
bring this project to completion.
Pre-sales 31 December
Property Development Projects Launch Date 2020 Future Development
97% of
The Pavilia Farm I (Tai Wai Station) October 2020 783 units Our 17 new residential property projects under
95% of development are expected to deliver over 23,000 units
The Pavilia Farm II (Tai Wai Station) November 2020 1,415 units to the market in the coming five years, supporting
SEA TO SKY 70% of Government’s efforts to increase housing supply.
(LOHAS Park Package 8) June 2020 1,422 units
MARINI, GRAND MARINI and August 2019, We have been invited by Government to proceed with the
OCEAN MARINI September 2019 97% of technical studies on the Siu Ho Wan Depot site topside
(LOHAS Park Package 9) and March 2020 1,653 units
development, which will provide about 20,000 residential
Pre-sale for LP10 (LOHAS Park Package 10) commenced in units in the medium to long term, about half of which
January 2021. will be Subsidised Sale Flats. The development will also
provide community facilities and a 30,000-square-metre
Sales activities also continued for the Cullinan West III (Nam
shopping mall. The design and planning of advance
Cheong Station) and Sol City (Long Ping Station (South))
works have commenced.
property development projects, where we act as agent for
the relevant subsidiaries of the Kowloon-Canton Railway The draft Outline Zoning Plans for the Tung Chung
Corporation. As at 31 December 2020, 83% of the 1,172 units Traction Substation site and Pak Shing Kok Ventilation
at Cullinan West III and 93% of the 720 units at Sol City were Building site were gazetted in June 2020. Subject to
sold. The application for pre-sale consent for Yuen Long completion of the rezoning process and the subsequent
Station property development (Phase 1) is in progress. land grant for development, we will tender out these two
sites in the next 12 months or so. Subject to our entering
Property Tendering into a project agreement with Government, we will
In February 2020, MTR awarded the tender for LOHAS tender out Tung Chung East Station Package 1 in the next
Park Package 12 to a subsidiary of Wheelock and 12 months or so. Meanwhile, we are also exploring the
Company Limited. In October 2020, the Company development potential of sites along existing and future
awarded the tender for LOHAS Park Package 13, our last railway lines, including the Tuen Mun South Extension,
package at LOHAS Park, to a consortium formed by Sino Kwu Tung Station and Northern Link.
Land Company Limited, Kerry Properties Limited, K. Wah
56 MTR Corporation
Property Development Packages Completed during the year and awarded
Gross floor
area Expected
Location Developers Type (sq. m.) Tender award date completion date
Ho Man Tin Station
Package 1 Great Eagle Group Residential 69,000 December 2016 2022
Package 2 Chinachem Group Residential 59,400 October 2018 2024
LOHAS Park Station
LP6 Nan Fung Group Holdings Limited Residential 136,970 January 2015 2020
MONTARA and Wheelock and Company Limited Residential 70,260 June 2015 By phases from
GRAND MONTARA Retail 44,500 2019 – 2021
Overview
Kindergarten 1,160
SEA TO SKY CK Asset Holdings Limited Residential 97,000 October 2015 2021
MARINI, GRAND MARINI and Wheelock and Company Limited Residential 104,110 December 2015 By phases in 2021
OCEAN MARINI Kindergarten 810
LP10 Nan Fung Group Holdings Limited Residential 75,400 March 2016 2022
Package 11 Sino Land Company Limited, K. Wah Residential 88,858 April 2019 2025
International Holdings Limited and China
Merchants Land Limited
Package 12 Wheelock and Company Limited Residential 89,290 February 2020 2026
Package 13 Sino Land Company Limited, Kerry Properties Residential 143,694 October 2020 2026

Limited, K. Wah International Holdings
Limited and China Merchants Land Limited
Tai Wai Station
Tai Wai New World Development Company Limited Residential 190,480 October 2014 By phases from
Retail 60,620* 2022 – 2023
Tin Wing Stop
Tin Wing Sun Hung Kai Properties Limited Residential 91,051 February 2015 2024
Retail 205
Wong Chuk Hang Station
Package 1 Road King Infrastructure Limited and Ping An Residential 53,600 February 2017 2022
Real Estate Company Limited
Package 2 Kerry Properties Limited and Sino Land Residential 45,800 December 2017 2023
Company Limited
Package 3 CK Asset Holdings Limited Residential 92,900 August 2018 2024
Retail 47,000
Package 4 Kerry Properties Limited, Swire Properties Residential 59,300 October 2019 2025
Limited and Sino Land Company Limited
Package 5 New World Development Company Limited, Residential 59,100 January 2021 2026
Empire Development Hong Kong (BVI) Limited,
CSI Properties Limited and Lai Sun
Development Company Limited
Yau Tong Ventilation Building
Yau Tong Ventilation Sino Land Company Limited and Residential 30,225 May 2018 2025
Building CSI Properties Limited
Kam Sheung Road Station#
Package 1 Sino Land Company Limited, China Overseas Residential 114,896 May 2017 2025 Financials and Other Information
Land & Investment Limited and K. Wah
International Holdings Limited
Yuen Long Station#
Yuen Long Sun Hung Kai Properties Limited Residential 126,455 August 2015 2022
Retail 11,535^
# as a development agent for the relevant subsidiaries of KCRC

* excluding a bicycle park with cycle track
^ including a 24-hour pedestrian walkway and a covered landscape plaza
Property Development Packages to be Awarded Notes 1 and 2

Gross floor area Period of Expected
Location Type (sq. m.) package tenders completion date
Wong Chuk Hang Station Residential 46,800 2021 2027
Notes:
1 Property development packages for which we are acting as development agent for the relevant subsidiaries of KCRC are not included.
2 These property development packages are subject to review in accordance with planning approval, land grant conditions and completion of statutory processes.

BUSINESS REVIEW
Progress of Property Development Packages Awarded

Project Status
Location Design Foundation Works Superstructure
Ho Man Tin Station Package 1 Completed In Progress
Ho Man Tin Station Package 2 In Progress In Progress
LOHAS Park Package 6 Completed Completed Completed
LOHAS Park Package 7^ Completed Completed In Progress
LOHAS Park Package 8 Completed In Progress
LOHAS Park Package 9 Completed Completed In Progress
LOHAS Park Package 10 Completed Completed In Progress
LOHAS Park Package 11 Completed In Progress
LOHAS Park Package 12 In Progress
LOHAS Park Package 13 In Progress
Tai Wai Station Completed Completed In Progress
Tin Wing Stop Completed In Progress
The Southside Package 1 Completed Completed In Progress
The Southside Package 2 Completed Completed In Progress
The Southside Package 3 Completed In Progress
The Southside Package 4 Completed In Progress
The Southside Package 5 In Progress
Yau Tong Ventilation Building Completed In Progress
^ The shopping mall of this package (“The LOHAS”) was opened in August 2020.
West Rail Line Property Development Plan

The Company acts as development agent for the West Rail property projects.
Site Area Actual/Expected Actual/Expected
Station/Site (hectares) tender award date completion date
Property Development Packages Awarded

Tuen Mun 2.65 August 2006 By phases from 2012 – 2014
Tsuen Wan West (TW7) 2.37 September 2008 2014
Nam Cheong 6.18 October 2011 By phases from 2017 – 2019
Long Ping (North) 0.99 October 2012 2017
Tsuen Wan West (TW5) Cityside 1.34 January 2012 2018
Tsuen Wan West (TW5) Bayside 4.29 August 2012 2018
Tsuen Wan West (TW6) 1.38 January 2013 2018
Long Ping (South) 0.84 June 2013 2019
Yuen Long 3.91 August 2015 2022
Kam Sheung Road Package 1 4.17 May 2017 2025
28.12
Property Development Packages to be Awarded
Kam Sheung Road Package 2 About 5.17 2024 – 2025 2031 – 2032
Pat Heung Maintenance Centre About 23.56 Under review Under review
28.73
Total 56.85
58 MTR Corporation
Overview
OTHER BUSINESSES
Ngong Ping 360 Octopus
Due to COVID-19, revenue at the Ngong Ping Cable Car The Company’s share of profit from Octopus Holdings
and its associated theme village (“Ngong Ping 360”) Limited decreased by 22.6% to HK$181 million, mainly
decreased by 83.4% to HK$65 million while patronage due to lower transport transaction volume and lower sales
decreased by 82.1% to 0.26 million. Following the of consumer products. As at 31 December 2020, more
pandemic, cable car services either operated on than 31,000 service providers in Hong Kong accepted
shortened hours or were suspended for around 150 days Octopus payments. Total cards and other stored-value
in 2020 and provided normal service on other days. The Octopus products in circulation stood at 34.1 million,
indoor attractions at Ngong Ping Village were closed from while average daily transaction volumes and value were
27 January 2020. 11.6 million and HK$193.7 million, respectively. Financials and Other Information
In September 2020, we launched the 360 FILA Sports

Fest outdoor sports campaign in conjunction with
sporting apparel brand FILA to alleviate the financial
impact of the pandemic. We also provided various offers
for cable car tickets and products depending on the
pandemic situation.

HONG KONG
NETWORK EXPANSION
Shatin to
Central Link
Other
New Railway
Projects
Proceed with
Tai Wai to Hung Hom to
Hung Hom Section Admiralty Section 3 Railway Projects
99.99% 91.2% under Railway
Development Strategy
Complete Complete
2014
60 MTR Corporation
AIM STRATEGIES
Network expansion is a key aspect of our “Hong Kong • Further improve our project management systems
Core” strategic pillar, laying the foundations for our future and processes to ensure quality delivery of current and
growth as we enhance connectivity to meet the city’s future projects
developing transport needs. We strive to design and
• Continue digitalising our approach to project
construct new railway projects to the highest possible
management by adapting modern systems
standards of quality, emphasising safety, cost control,
and technology
efficiency and environmental sustainability.
• Continue to strengthen collaboration among internal
Overview
and key external stakeholders
CHALLENGES
• Progressing the design of railway projects under Railway • Ensure the Company’s future success by leveraging
Development Strategy 2014 (“RDS 2014”), which could and building upon previous project experience to
add 35 km to the MTR railway network in the coming secure future projects, diversify our business and
years and create further development opportunities contribute to long-term, sustainable growth
• Working toward the opening of the full Tuen Ma Line

in the third quarter of 2021; for the Hung Hom to
Admiralty section of the Shatin to Central Link, the
targeted opening date of the first quarter of 2022
is significantly at risk due to the major challenges
encountered
OUTLOOK
We continue to work toward the delivery of the 17-km Shatin to Central Link project, which will greatly
reduce travel times between major population centres in Hong Kong. We expect the full Tuen Ma Line –
connecting Phase 1 of the Tuen Ma Line with West Rail Line via Sung Wong Toi, To Kwa Wan, Ho Man Tin
and Hung Hom stations – to open in the third quarter of 2021, bringing the important Shatin to Central
Link project one step closer to completion. We are also working hard on the project’s Hung Hom to
Admiralty section.
Elsewhere, we are progressing the design of the Tung Chung Line Extension and the Tuen Mun South
Extension, and have commenced the procurement of the design consultancies for Kwu Tung Station and
the Northern Link. We are also continuing to work closely with Government on other railway projects under Financials and Other Information
RDS 2014.

BUSINESS REVIEW
HONG KONG NETWORK EXPANSION
With the opening of Tuen Ma Line Phase 1, the Shatin which will potentially increase the city’s railway network
to Central Link made further progress in 2020. We are by 35 km and bring with it even more opportunities for
continuing to work closely with Government on the RDS development and business expansion.
2014 development framework for Hong Kong railways,
SHATIN TO CENTRAL LINK

The ten-station, 17-km Shatin to Central Link, a project interchange between the Tuen Ma Line and Kwun Tong
managed by MTR on behalf of Government, is a strategic Line, allowing passengers to travel between the New
railway that will enhance the existing rail network and Territories North and East districts to East Kowloon and
improve connectivity in Hong Kong. The first phase is Hong Kong Island East more conveniently.
the 11-km Tai Wai to Hung Hom Section, and the second
Trial operations of the full Tuen Ma Line began in
phase is the 6-km Hung Hom to Admiralty Section.
January 2021, marking a major milestone toward the
The Tai Wai to Hung Hom Section will connect the former commencement of passenger service.
Ma On Shan Line to the West Rail Line via Diamond Hill
During 2020, track-laying works were completed along
and Hung Hom stations to form the Tuen Ma Line. When
the full length of the 6-km section from Hung Hom
the Hung Hom to Admiralty Section is completed, the
Station to Admiralty Station. To mark this milestone,
East Rail Line will run under Victoria Harbour to Exhibition
a small celebration event was held in the tunnel at
Centre Station and Admiralty Station via Hung Hom.
Upon completion, the Shatin to Central Link will connect

several existing railway lines and significantly reduce
travel times between New Territories North, Kowloon and
Hong Kong Island. Passengers will also have more routes
to choose from, particularly in the busy cross-harbour
section of the Tsuen Wan Line and the Tai Wai to Kowloon
Tong section of the East Rail Line.
Project Progress
As at 31 December 2020, 99.99% of the Tai Wai to Hung
Hom Section and 91.2% of the Hung Hom to Admiralty
Section had been completed.
On 11 February 2020, the Company entered into relevant

agreements with Government and Kowloon-Canton
Railway Corporation to supplement current agreements to
enable the Company to operate Tuen Ma Line Phase 1
in substantially the same manner as the existing railway
network for a period of two years from 14 February 2020.
Tuen Ma Line Phase 1, opened on 14 February 2020,

enables passengers on the former Ma On Shan Line to
travel directly to Kai Tak Station in East Kowloon via
Hin Keng and Diamond Hill stations. Meanwhile, the
expanded Diamond Hill Station has become a new
62 MTR Corporation
Exhibition Centre Station on 17 July 2020. In November relevant structures at and near the Hung Hom Station
2020, a topping-out ceremony for Exhibition Centre Extension are safe and fit for purpose with the completion
Station was held. of suitable measures. Works for the suitable measures
were completed to programme in mid-2020.
As the existing East Rail Line will connect with the future
Hung Hom to Admiralty section, its signalling system Separately, the Expert Advisor Team report also
must be upgraded for compatibility with the extension to concluded that it is safe in practical terms to use the
the line. As reported earlier, the introduction of the new related built structures at Hung Hom Station for their
signalling system was put on hold in September 2020 and intended purposes after the implementation of the
the system was finally commissioned in February 2021 suitable measures.
Overview
after the satisfactory completion of all further testing and
In its Final Report, the COI identified a number of
approvals from relevant Government departments.
inadequacies in respect of the construction process used
After reviewing the report of the investigation panel, during the construction of the Hung Hom Station and
the Company has established a dedicated “Shatin to adjacent structure (including failures in respect thereof,
Central Link Technical and Engineering Assurance such as poor workmanship incidents compounded by
Team” to monitor the project from both a technical lax supervision, and that in a number of respects also,

and service readiness perspective and to identify any management of the construction endeavour fell below
important potential issues of the remaining works for the standards of reasonable competence) and made
timely reporting and follow-up. A new Service Reliability recommendations on how the Company’s project
Report will also be introduced as part of Government’s management practices should be improved. Based on
reviewing mechanism of the commissioning of new lines the COI’s interim report and the recommendations of
to ensure the timely reporting and handling of issues with the review carried out by the Capital Works Committee
potentially significant reliability impacts. The Company of the Board in 2018, the latter aided by an external
will also implement other recommendations made in the consultant Turner & Townsend (“T&T”), the Company has
report of the investigation panel. been updating and improving its project management
practices over the past two years. Many of these have
Programme for Delivery already been incorporated into the Company’s standard
The full line opening of the Tuen Ma Line is anticipated to practices. Out of the 38 recommendations made by T&T,
be in the third quarter of 2021. As for the Hung Hom to 31 have been implemented, and implementation of the
Admiralty Section (East Rail Line extending to Admiralty remaining seven is well underway. The Company notes
Station), due to the major challenges encountered, the the comments and recommendations made by the COI
targeted opening date of the first quarter of 2022 is in its Final Report. These are now being incorporated into
significantly at risk. The Company is working to the best of our on-going work to improve our project management
its ability to open the line at the earliest opportunity. and quality assurance systems and processes for the Financials and Other Information
delivery of future railway projects.

Concerns Relating to Construction Works
In the meantime, we are continuing our discussions
On 12 May 2020, Government released the Final Report of
with the contractor about fulfilling their contractual
the Commission of Inquiry (“COI”) into the Construction
responsibilities and will be considering our legal position.
Works at and near the Hung Hom Station Extension under
the Shatin to Central Link. The report concluded that the

BUSINESS REVIEW
HONG KONG NETWORK EXPANSION
Funding disagreement to any increase in the project management

The Company carried out a further review and fee. The Company believes it is entitled (in accordance
revalidation of the Shatin to Central Link Cost to with the relevant entrustment agreement and following
Complete, and this was submitted to Government on the Company’s receipt of independent expert advice)
10 February 2020. The Company’s submission included to an increase in the project management cost, to be
an additional amount of project management cost agreed by way of good faith negotiations or otherwise
for the Company. However, Government advised the determined in accordance with the relevant entrustment
Company that Government considers there has been no agreement. Despite the fact that this matter needs to
material modification in respect of the Shatin to Central be resolved, the Company continues to comply with its
Link project and, therefore, Government disagrees with project management obligations under the agreement
the inclusion of any additional project management and meet the costs thereof, on an interim and without
cost in the Cost to Complete. The additional funding prejudice basis, to allow the Shatin to Central Link
sought by Government and subsequently approved by project to progress whilst reserving its position. The
the Legislative Council on 12 June 2020 did not include Company continues to exercise rigorous cost control
any additional amount of project management cost for with the objective of ensuring that construction costs are
the Company. Government has recently responded to contained as far as possible.
the Company that Government maintains its position of
64 MTR Corporation
In light of the matters described above, the Group has consolidated profit and loss account for the year ended
made a provision of HK$1.4 billion for the estimated 31 December 2020. Further details can be found in note
additional cost to the Company of continuing to comply 21B to the Consolidated Accounts of this Annual Report.
with its project management responsibilities in its
OTHER NEW RAILWAY PROJECTS

Working under the RDS 2014 framework for the future intermediate station between Tuen Mun Station and the
Overview
development of the Hong Kong railway network, the new Tuen Mun South Station. Construction is expected to
Company was invited by Government in April, May and commence in 2023.
December 2020 to proceed with the detailed planning and
The Kwu Tung Station and Northern Link project
design of the Tung Chung Line Extension, Tuen Mun South
comprises two phases: i) a new Kwu Tung Station along
Extension, as well as Kwu Tung Station and the Northern
the Lok Ma Chau Spur Line between Sheung Shui Station
Link, respectively. In June and October 2020, the design
and Lok Ma Chau Station, and ii) a 10.7 km-long railway
consultancies were awarded for the Tung Chung Line
line linking Kam Sheung Road Station on the West Rail

Extension and Tuen Mun South Extension, respectively.
Line (future Tuen Ma Line) with the new Kwu Tung Station
Ground investigation works and environmental impact
via three proposed intermediate stations in San Tin, Ngau
assessments have also commenced. Procurement of
Tam Mei and Au Tau. Upon completion of the project,
the design consultancies for Kwu Tung Station and the
a loop will be formed in the Northwest New Territories to
Northern Link has commenced.
enhance transport network connectivity between the east
The Tung Chung Line Extension project comprises two and west New Territories.
components: i) a new intermediate Tung Chung East
In May 2020, we submitted a proposal to Government
Station between Sunny Bay Station and Tung Chung
for the Hung Shui Kiu Station project, and we continue to
Station, and ii) an extension of the existing Tung Chung
provide further information and details to Government.
Line to a new terminal station at Tung Chung West.
We also submitted a project proposal for the South Island
Construction is expected to commence in 2023. The
Line (West) in December 2020.
Company has also agreed with Government to construct
the Airport Railway Extended Overrun Tunnel to facilitate During the year, we continued to work with Government
an increase in the train frequency of Tung Chung Line in to address technical challenges on the East Kowloon Line
the future. and North Island Line projects.
The Tuen Mun South Extension is a 2.4-km extension

of the West Rail Line (which will become the Tuen Ma Financials and Other Information
Line in the future) from the existing Tuen Mun Station
to a new terminus at Tuen Mun South via a proposed

MAINLAND OF CHINA AND
INTERNATIONAL BUSINESSES
Mainland Australia
China Business Business
Europe
Business
11 Railway 2,183km 1.38 billion

Services in Operating Route Length Total Patronage
4 Countries Outside of Hong Kong Outside of Hong Kong
66 MTR Corporation
AIM
Representing one of the three core pillars under • Operators must also continuously enhance their
our Corporate Strategy, our Mainland of China and services and facilities in order to meet rising customer
International Businesses enable us to grow and connect satisfaction standards
communities in markets beyond Hong Kong as we strive
to become a leading multinational provider of railway STRATEGIES
services, delivering world-class operations in geographies
• Continue delivering operational excellence to fulfil and
as diverse as the Mainland of China, Europe and Australia.
renew existing contracts and win new ones, capturing
Overview
both construction and O&M opportunities
CHALLENGES
• Expand business in the Mainland of China by
• COVID-19 has led to reduced patronage and services
continuing to explore transit-oriented development
due to stay-at-home policies and lockdown protocols
(“TOD”) opportunities and further participate in the
• Competition is increasing in the Mainland and development of the Greater Bay Area
international passenger rail markets as more rail
• Explore “Rail Plus Property” development opportunities
operators look outside their home markets

in Europe and Australia
• Railway operators must adjust to different operating
• Further diversify revenue streams via asset
and investment models to participate in the Mainland
replacement, maintenance and public-private
of China and overseas markets
partnership (“PPP”) infrastructure development
opportunities in selective markets
OUTLOOK
COVID-19 will continue affecting our Mainland of China and International Business for some time as the
world struggles to get the pandemic under control and re-establish business and travel as usual. Therefore,
we can expect passenger demand and revenue to fluctuate to varying degrees in 2021 depending on the
business models of different business contracts. In the meantime, we must keep adapting our operations in
different markets to continue delivering world-class railway services for our overseas customers.
Hangzhou Metro Line 1 Phase 3 (Airport Extension), the full Hangzhou Metro Line 5, Middle Section of
Beijing Metro Line 16 and Shenzhen Metro Line 4 North Extension all opened at various points
througout 2020. These lines and their related businesses should all begin making financial contributions
moving forward. Financials and Other Information
Over the coming months and years, we will strive to expand our presence in the Mainland of China market
and continue taking an active role in the development of the Greater Bay Area. We will also be seeking
new opportunities across Europe and Australia. This will be done via three primary approaches: delivering
operational excellence, exploring more TOD opportunities in the Mainland and overseas markets, and
raising our railway value chain capabilities.

BUSINESS REVIEW
Over the years, we have exported our considerable Mainland of China, Macao, Europe and Australia. These
expertise and experience in the construction, operation businesses carried a total of approximately 1.38 billion
and maintenance of world-class railway networks to a passengers and an average of approximately 4.4 million
variety of markets outside Hong Kong, including the passengers per weekday in 2020.
RAILWAY BUSINESSES IN THE MAINLAND OF CHINA

Beijing Shenzhen
In Beijing, our associate operates Beijing Metro Line 4 Shenzhen Metro Line 4 and North Extension
(“BJL4”), the Daxing Line, the first three phases of Beijing
Shenzhen Metro Line 4 (“SZL4”), operated by our
Metro Line 14 (“BJL14”) and the Northern Section and
wholly owned subsidiary, saw a decline in patronage
Middle Section of Beijing Metro Line 16 (“BJL16”). The
in 2020 due to COVID-19. Patronage decreased by 35%
average on-time performance of these four lines in 2020
to approximately 156 million passengers and average
was 99.9%.
weekday patronage dropped to approximately 446,000.
Beijing Metro Line 4 and the Daxing Line The line once again recorded exceptional on-time
performance of 99.9%.
The COVID-19 outbreak impacted patronage for BJL4
and the Daxing Line during the year. Combined ridership There has been no increase in fares at SZL4 since we
for the two lines in 2020 was approximately 239 million began operating the line in 2010. In July 2020, the
passenger trips while average weekday patronage was Shenzhen Municipal Government publicised a fare
742,000, representing year-on-year decreases of 47.5% adjustment framework for the Shenzhen Metro network
and 45%, respectively. The Daxing Line operations and that will take effect on 1 January 2021 for a period of
maintenance (“O&M”) contract has been extended to 29 five years. This framework is expected to enable the
December 2022. establishment of a fare-setting mechanism and the
procedures for fare adjustment. However, if a suitable
Beijing Metro Line 14 fare increase and adjustment mechanism are not
The first three phases of BJL14 recorded combined implemented soon, the long-term financial viability of this
passenger trips of approximately 148 million and average line will be impacted.
weekday patronage of over 479,000 in 2020, representing
The Company signed the O&M agreement for the SZL4
decreases of 40.8% and 39.2%, respectively, compared to
North Extension in 2020, and the extension formally
2019. The full opening of BJL14 is scheduled for late 2021
opened on 28 October 2020.
at the earliest.
Beijing Metro Line 16 Hangzhou

The Northern Section of BJL16 recorded approximately 25 Hangzhou Metro Line 1 and Xiasha Extension
million passenger trips and average weekday patronage Our associate operates Hangzhou Metro Line 1 (“HZL1”)
of more than 81,000 in 2020. The Middle Section of and the HZL1 Xiasha Extension. In 2020, patronage on
BJL16 opened on 31 December 2020, with the full line these lines decreased by 27.4% to about 215 million
scheduled to open in late 2022 at the earliest. year on year and average weekday patronage dropped
to about 612,000. On-time train performance remained
Beijing Metro Line 17
at 99.9%. The HZL1 Phase 3 (Airport Extension) formally
The opening of the first phase of Beijing Metro Line 17 is opened at the end of December 2020.
targeted for the end of 2021. Our associate will lease the
rolling stock over a 20-year period, with lease payments to Hangzhou Metro Line 5
be made in instalments after the opening of each phase. The full line of Hangzhou Metro Line 5 commenced
operation in April 2020. Total patronage was about 108
million in 2020 and average weekday patronage was
about 332,000.
68 MTR Corporation
Overview
PROPERTY BUSINESSES IN THE MAINLAND OF CHINA
Shenzhen Beijing
The Tiara residential development at Shenzhen Metro The occupancy rate for Ginza Mall in Beijing decreased
Longhua Line Depot Site Lot 1 has a total developable during the year to 84%. The Company extended rental
GFA of approximately 206,167 square metres with a retail relief to eligible tenants to help them withstand the
centre of about 10,000 square metres by GFA. More than impact of business disruption caused by the pandemic.
98% of residential units have been sold and handed over
to buyers. Tianjin
In Tianjin, project completion for the Beiyunhe Station
COVID-19 negatively impacted the occupancy rate and
shopping centre development has been delayed to
patronage of TIA Mall in 2020. The Company granted Financials and Other Information
2024 as additional works are required for railway safety
rental concessions to eligible tenants to help them
assurance during basement construction.
withstand the impact of business disruption caused by
the pandemic.
Property Management Businesses
As at 31 December 2020, the Company managed a total
of approximately 406,000 square metres of self-developed
and other third-party properties in the Mainland of China.

BUSINESS REVIEW
MACAO
MTR operates and maintains Macao’s first rapid transit management and technical support to other light rail
system, the Macao Light Rapid Transit Taipa Line, which lines and extensions in the city.
opened in December 2019. We also provide project
EUROPE RAILWAY BUSINESSES

United Kingdom Sweden
TfL Rail/Elizabeth Line MTR is the largest rail operator in Sweden by passenger
volume. It operates three rail businesses via wholly
In London, our wholly owned subsidiary operates the
owned subsidiaries: Stockholm Metro (Stockholms
Crossrail operating concession under the TfL Rail brand.
tunnelbana); MTRX (formerly known as MTR Express), an
Services include Liverpool Street Station to Shenfield,
intercity service between Stockholm and Gothenburg;
Paddington Station to Heathrow Airport and Paddington
and the Stockholm commuter rail service (“Stockholms
Station to Reading, the latter of which is a 57-km route
pendeltåg”), which serves the greater Stockholm area.
that was included into the service at the end of 2019.
MTR continues to support the phased opening of TfL Rail, Stockholm Metro (Stockholms tunnelbana)
which will be renamed Elizabeth Line upon the opening
During the pandemic, Stockholm Metro continued to run
of the Central Operating Section. We recently introduced
a full service with strong operational performance.
the new class 345 Full Length Unit to operate to
Heathrow Airport. MTRX
Although ridership has fallen, TfL Rail services have MTRX – which underwent a successful rebranding earlier
managed to minimise the risks presented by COVID-19. in 2020 and was recently ranked third in the Swedish
Our financial interest is reasonably protected as this Innovation Index – has been operating a reduced service
concession has no fare revenue risks. since March 2020 due to travel restrictions and decreased
demand brought by the COVID-19 outbreak.
South Western Railway
Our associate operates the South Western Railway (“SWR”) Stockholms pendeltåg
franchise, one of the largest rail networks in the UK. Stockholms pendeltåg continued to run a full service
Services for the SWR were also reduced during lockdown during the pandemic while achieving record-high
as a result of COVID-19. SWR was transitioned into the punctuality.
Emergency Recovery Measures Agreement (“ERMA”) in
September 2020 for a period spanning to May 2021. The
termination sum for the SWR franchise was agreed with
the client which will be paid at the end of the ERMA term.
The full exposure to the SWR franchise has already been
provided in our 2019 financial statements.
70 MTR Corporation
AUSTRALIA RAILWAY BUSINESSES
Melbourne’s Metropolitan Rail Service opened in May 2019 and continued to run a full service
In Melbourne, our subsidiary operates the Melbourne in 2020. Patronage was affected by COVID-19; however,
metropolitan rail network. Passenger volume decreased there is no fare revenue risk to NRT according to the
sharply in 2020 amid COVID-19 outbreak. Our subsidiary terms of this franchise. Service performance continued to
reached an agreement with the State government in improve throughout the year.
May 2020 on financial support to ease the effects of
the pandemic.
Sydney Metro City & Southwest Project
Overview
In 2019, the NRT consortium was awarded the PPP
Sydney Metro North West Line contract for delivery of new metro trains and core rail
In Sydney, MTR is a member of Northwest Rapid Transit systems, as well as operation and maintenance of the
(“NRT”) Consortium and is responsible for the delivery combined Sydney Metro North West and Sydney Metro
of the PPP contract including design, financing and City & Southwest lines until 2034. The project continued
construction of the Sydney Metro North West Line as well to move forward with milestones achieved as planned
as its on-going operations and maintenance. The line despite some restrictions on the flow of people and

materials between countries as a result of COVID-19.

BUSINESS REVIEW
GROWTH OUTSIDE OF HONG KONG

Mainland of China Binhaiwan New Area Government for the conceptual
In August 2020, the consortium led by our wholly owned planning of the High Speed Rail Binhaiwan Station
subsidiary was awarded the tender for the Shenzhen TOD. In other Greater Bay Area cities, we are exploring
the investment opportunities of rail-related projects.
Metro Line 13 PPP project. The contract was formally
Leveraging our experience, we will continue to play an
signed in October 2020. The project covers investment,
active role in the integrated development and TOD of the
construction, and operations and maintenance for a
Greater Bay Area.
period of 30 years following completion. Construction
covers track laying, rolling stock, and electrical and In March 2021, we jointly secured the land use right
mechanical systems, including the signalling system and for a TOD site in the south of Hangzhou West Station
automated fare collection system for the 22.4-km line. The together with three joint venture partners. This project
total capital cost of approximately RMB4.91 billion will be is a mixed-use property development comprising
financed by both debt and equity. The PPP project will serviced apartment, office, retail and hotel, with a total
be undertaken by a company in which our wholly owned developable GFA of approximately 688,210 square
subsidiary will have an effective interest of 83%. Shenzhen metres. The Company has a 10% interest in the project
Metro Line 13 is expected to commence service in 2023. with an equity investment of RMB350 million.
Our bid for Shenzhen Metro Line 12 was unsuccessful.
Sweden
In June 2020, the Company signed a joint venture In December 2020, our wholly owned subsidiary was
agreement with Chengdu Rail Transit Group to set up a awarded the O&M concession for the Mälartåg train
new company to explore and develop station commercial service, which covers an eight-year period with a one-
and related businesses in Chengdu. One of the priorities year option for extension. The tender process is currently
of the new company is to demonstrate the added value subject to legal challenges from other bidders, and traffic
MTR brings to station commercial activities. may start from December 2021 or later depending on
the results of these challenges. The Mälartåg network
Also in June 2020, our rolling stock maintenance company
currently serves around 11 million passenger journeys a
with the CRRC Hangzhou Digital Technology Co., Ltd
year and connects Stockholm with major towns and cities
consortium won the contracts for the rolling stock fleet
including Linköping in the south, Uppsala in the north
overhaul for certain lines in Hangzhou and Shenzhen.
and Örebro in the west. A further line extension to the
Discussions are on-going regarding potential cooperation north, the Upptåget service, will be included from mid-
opportunities in the Guangdong-Hong Kong-Macao 2022 depending on the results of the legal challenges.
Greater Bay Area to build transport infrastructure as Our bid for the O&M of Roslagsbanan, the commuter
well as property and community projects. The Company network connecting Stockholm and the municipalities
has been involved as the TOD advisor of Dongguan north of the city, was unsuccessful.
72 MTR Corporation
Mainland of China and International Railway Businesses at a Glance
Commencement
of Franchise/
MTR Expected Date of
Corporation Commencement of Franchise/ Total Number of Route Length
Shareholding Business Model Operation Concession Period Stations (km)
Mainland of China
Beijing Metro Line 4 49% Public-Private- September 2009 30 years 24 28.2
(“BJL4”) Partnership (“PPP”)
Daxing Line of BJL4 49% Operations and December 2010 10 years till 2020 and 11 21.8
Maintenance 2 years extension
(“O&M”) Concession till 2022
Beijing Metro Line 14 49% PPP Phase 1 to 3: by phases 30 years from Phase 1 to 3: 30Note 1 Phase 1 to 3: 43.8
Overview
(“BJL14”) from May 2013 to December 2015 Full Line: 37 Full Line: 47.3
December 2015
Full Line: Targeted late
2021
Beijing Metro Line 16 49% Phase 1: O&M Phase 1: December 2016 Phase 1: till full line Phase 1: 10 Phase 1: 19.6
(“BJL16”) Concession Phase 2: December 2020 opens Phase 2: 7Note 1 Phase 2: 10.9
Full Line: PPP Full Line: Targeted after Full Line: 30 years Full Line: 29 Full Line: 49.8
2021
Beijing Metro Line 17 49% O&M Concession Subject to local 20 years after service Full Line: 21 Full Line : 49.7
government commencement
arrangement (no later than 31
December 2045)

Shenzhen Metro Line 4 100% Build-Operate- Phase 1 and 2: by 30 years Full Line: 15 Full Line: 20.5
(“SZL4”) TransferNote 2 phases from July 2010
to June 2011
SZL4 North Extension 100% O&M Concession October 2020 End together with 8 10.8
SZL4 concession
Shenzhen Metro Line 13 83% PPP 2023 30 years 16 22.4
Hangzhou Metro 49% PPP November 2012 25 years 31 48
Line 1 (“HZL1”)
HZL1 Xiasha Extension 49% O&M Concession November 2015 End together with 3 5.6
HZL1 concession
HZL1 Phase 3 49% O&M Concession December 2020 End together with 5 11.2
(Airport Extension) HZL1 concession
Hangzhou Metro Line 5 60% PPP Note 3
Initial Section: 25 years 39 56.2
(“HZL5”) June 2019
Latter Section (Included
West Extension):
April 2020
Macao
Macao Light Rapid 100% O&M December 2019 80 months 11 9.3
Transit Taipa Line Service Contract
Europe
TfL Rail/Elizabeth Line, 100% O&M Concession May 2015 8 years Until End 2021: 31 Until End 2021:
United Kingdom Full line: 41 99
Full line: 128
South Western Railway, 30% O&M ConcessionNote 4 August 2017 7 years 216 998
United Kingdom
Stockholm Metro, 100% O&M Concession November 2009 8 years till 2017 and 100 108
Sweden 6 years extension till Financials and Other Information
2023
MTRX, Sweden 100% Open Access Initial service: Operating license is 7 462
Operation March 2015 subject to renewal
Full schedule:
August 2015
Stockholm commuter 100% O&M Concession December 2016 10 years 54 247
rail, Sweden
Mälartåg, Sweden 100% O&M Concession December 2021 8 years 46 1,060
Australia
Melbourne‘s 60% O&M Concession November 2009 8 years till 2017 and 222 409
Metropolitan Rail Service 7 years extension till
2024
Sydney Metro North Mixed PPP (Operations, May 2019 15 years 13 36
West Line Trains & Systems)
Sydney Metro City & Mixed PPP (Operations, Target in 2024 10 years after service 18 30
Southwest Line Trains & Systems) commencement
Notes:
1 BJL14 Phase 2 East Section has 12 stations, 11 opened (one is currently bypassed). BJL14 Phase 3 Middle Section has 11 stations, ten opened (one is currently bypassed).
BJL16 Phase 2 has seven stations, five opened (two are currently bypassed).
2 SZL4 Phase 1 assets are owned by the Shenzhen Municipal Government and MTR Corporation (Shenzhen) Limited took over the operation of Phase 1 in July 2010.
3 HZL5 West Extension is out of PPP scope.
4 South Western Railway was transitioned into Emergency Recovery Measures Agreement in September 2020.

CORPORATE RESPONSIBILITY
Environmental
Protection
Community
Investment
HK$ 15.4 million 64

Donated and Sponsored to
Volunteering Projects
Charitable and Other
Organised
Organisations
MTR’s success has been built on the clear vision, mission strategy and efforts, underpinned by our sustainable
and values that steer our corporate behaviour and guide financial model, focus on ensuring safe, responsible
us toward achieving business results. We also recognise operations in all aspects of our business and contributing
that corporate responsibility is crucial to maintaining our positively to the development of communities.
position as a responsible business that contributes to and
As outlined in our Corporate Strategy, the Company is
benefits society.
placing greater emphasis than ever on its Environmental,
As an organisation whose purpose is to “keep cities moving”, Social and Governance (“ESG”) behaviour and practices.
MTR provides rail and property services that are integral Moving forward, our aim is to foster an even stronger
parts of people’s lives. Therefore, our corporate responsibility sense of corporate responsibility as we address our
74 MTR Corporation
communities’ ever-changing societal and environmental The Sustainability Report will contain an Independent
needs and work together toward a better future. Assurance Report prepared by an external auditor,
who performed limited assurance in relation to certain
We have published a Sustainability Report every year for
sustainability performance data. These include data for
the past two decades to keep stakeholders up to date on
our Hong Kong, Mainland of China and international
our ESG performance. It fulfils the disclosure requirements
businesses covering greenhouse gas (“GHG”) emissions;
of both the Hong Kong Stock Exchange ESG Reporting
staff indicators such as turnover and training days; safety
Guide and the Global Reporting Initiative Standards: Core
performance for operations, staff and contractors;
option. We also produce a separate sustainability website,
and supply chain management numbers. The
which in addition to the Sustainability Report itself
Overview
Sustainability Report 2020 has been published on our
provides details of our approach to sustainability and
sustainability website.
serves as a focal point of the Company.
ACTIONS WE HAVE TAKEN UNDER COVID-19

The global pandemic demonstrated the power of corporate out the storm. Our Board and Executive Directors donated

social responsibility and firm action to help communities HK$4.3 million of their remuneration to local charity groups
dealing with adversity. Our responsibility is to provide safe providing special pandemic support such as food, study
and reliable service to the community, allowing cities to kits and shelter for around 50,000 beneficiaries. Such
keep moving during the pandemic. Following the outbreak initiatives supported our operational efforts to address
of COVID-19, face masks were in very short supply in Hong people’s immediate health and safety concerns, namely
Kong society. In response, we immediately donated 100,000 by requiring frontline staff to wear face masks in trains
surgical masks to communities in need. We also installed and stations and by thoroughly cleaning and disinfecting
vending machines at our stations to ensure that members our trains, stations and other facilities on a regular basis.
of the public could more easily obtain potentially life-saving We also set up vending machines at 20 stations where
personal protective equipment (“PPE”). We launched our the public could conveniently pick up COVID-19 testing
own mask production lines, provided PPE to staff for their specimen collection packs. Since March 2020, we have
protection at their workplace, and initiated appropriate been providing free Airport Express tickets through the
flexible work arrangements. Hospital Authority to healthcare workers who need to
travel between AsiaWorld-Expo Station and the urban
COVID-19 had a severely detrimental impact on the local
area. Over 16,900 tickets had been provided as at the end
economy and affected people's livelihoods. In response,
of January 2021. We also donated 200 tablet devices to
we announced a number of fare rebates to help make
underprivileged children to facilitate their
transit more affordable, and we offered rental concessions Financials and Other Information
online learning.
for many of our station and mall tenants to help them ride
CORPORATE STRATEGY
Our Corporate Strategy outlines a fresh approach to • Social inclusion: We strive to design journeys around
our business development by entrenching robust ESG each individual – from a railway system that is accessible
principles even deeper into our businesses and operations to all, to age-friendly policies catering for senior citizens.
in order to create value for all our stakeholders. We aim to We also foster diversity and inclusion to nurture the
lead the way in three priority areas: social inclusion, GHG uniqueness of Hong Kong and its community.
emissions, as well as advancement and opportunities for
our staff and the community.

• GHG emissions: The MTR railway network is already a • Advancement and opportunities: We seek to empower
green, low-carbon mode of transport, but we aim to people by striving to address societal needs and
strengthen our current actions to reduce emissions enable new growth opportunities. We will also
even further. Our long-term strategy is focused on champion ideas and innovation to support the growth
continuing to develop a low-carbon transport network, of individuals and communities, shaping a flourishing
further reducing our carbon emissions, and pursuing society and a better future.
climate adaptation and resilience.
VALUE ADDED AND DISTRIBUTION STATEMENT IN 2020

(HK$ MILLION)
Economic Value Generated Economic Value Distributed

Revenue from Hong Kong Employees
Staff Costs3
Transport Operations 15,138
11,896
Maintenance, Renewal Existing Hong Kong
and Upgrade Expenditure Railway System
Revenue from Hong Kong on Existing Hong Kong
Station Commercial Railway System 10,985
Businesses
3,269 Suppliers &
Other Operating Costs4 Business Partners
Revenue from Hong Kong

16,905
Property Rental and
Management Businesses
Fixed and Variable KCRC
5,054 Annual Payments 988
49,655 Revenue from
Mainland of China and Interest & Lenders
International Subsidiaries Finance Costs5 701
21,428
Governments
Revenue from Taxes6 TAX
Other Businesses1 1,258
1,499
HKSAR Government
5,700
Profit from Hong Kong Ordinary Dividends
Other Shareholders
Property Development2
1,881
6,509
Economic Value Retained Community Community

3,923 from Prior Years and Reinvested
in 2020
Investment7 22
Total: 53,578 Total: 53,578

Notes:
1 Includes share of profit of associates and joint venture.
2 Before taking into account staff costs of HK$18 million.
3 Excludes staff costs related to Hong Kong railway system maintenance of HK$2,430 million, capitalised for asset creation of HK$1,412 million and recoverable of
HK$596 million.
4 For simplicity reason, other operating costs include interest income, netted with non-controlling interests. Excludes operating costs related to Hong Kong railway system
maintenance of HK$2,424 million.
5 Excludes interest expenses capitalised for asset creation of HK$360 million.
6 Represents current tax and excludes deferred tax for the year.
7 Includes donations, sponsorships and other community engagement contributions, and excludes in-kind donations of HK$20 million given. In addition, there were
(i) ongoing fare concessions and promotions of HK$1,710 million, (ii) MTR's share of additional fare promotions offered to our Hong Kong passengers (including 20%
rebate on every Octopus trip and HK$100 discounts on MTR City Saver and Monthly Pass Extras), and (iii) rental concessions granted to station and mall tenants that have
not been accounted for in this amount.
76 MTR Corporation
COMMUNITY INVESTMENT
“Community Connect” is our platform for initiatives To promote STEAM (science, technology, engineering,
that help a wide range of sectors in the communities art and math) education, MTR arranged live broadcasts of
we serve while also enhancing the liveability of our city. the “Summer Online Railway Workshops” and “Christmas
Programmes and activities are carefully designed to Delight Online Workshops” in August and December
support and engage communities across all 18 districts 2020, respectively, to promote green and social inclusion
of Hong Kong. In addition, we enhance customers’ travel with railway elements. These workshops attracted
experiences and promote art appreciation through our positive feedback from netizens.
Overview
“Art in MTR” programme.
In addition to programmes for our young passengers, we
We also encourage our employees to volunteer for once again organised a variety of activities for the elderly.
activities that benefit the community. On a corporate Our annual elderly programme, launched in co-operation
level, we collaborate with non-profit organisations and with Radio Television Hong Kong (RTHK) Radio 5, featured
social enterprises to address evolving community needs. a series of posters displayed throughout the MTR network
and broadcasts on RTHK promoting railway safety
Youth, Children and the Elderly messages to seniors. We also regularly conduct outreach

Our youth and children’s programmes are designed to activities in elderly centres, both online and offline, to
support young people’s aspirations for a better future, provide railway and safety messages.
promote education, and disseminate important messages
regarding railway safety and courtesy. Community Outreach
Although many of our community programmes had
For 13 years, our annual summer programme, “‘Train’
to be curtailed due to the COVID-19 pandemic, our
for Life’s Journeys”, has been helping secondary school
staff continued to volunteer their own time to serve
students develop soft skills and strengthen their
the community through the “More Time Reaching
self-confidence through interactive workshops, adventure
Community” Scheme. In 2020 despite various
camps and on-the-job experience. The event was
challenges, 64 volunteering projects were organised
deferred and carried out online between 1 and 4 October
involving a total of 6,344 volunteer-hours of service to
2020 in view of continued disruption to school calendars
help people in need, involving over 900 participating
due to COVID-19. The four-day programme proved
volunteer headcount.
popular with nearly 100 students from Secondary Three
to Secondary Five participating in various workshops and To help the underprivileged groups ride out the
sharing sessions. pandemic, our MTR volunteers supported the Hong
Kong Council of Social Service and other NGOs on a
Since COVID-19, we created online shows on top of
variety of special volunteering activities. These included
physical show for the “MTR x Hong Kong Repertory
packing and distributing pandemic supplies to the
Theatre Drama Education Programme 2019-2020” to
underprivileged, delivering food items for low-income
promote railway safety and courteous behaviour, which
families and the elderly, and preparing learning kits for
was delivered to 24,000 students from kindergarten,
children with special education needs to learn at home.
primary and special schools. During the year, we also
launched a mobile app and online activities on social During the year, we donated and sponsored HK$15.4
media platforms to promote railway safety to children million to charitable and other organisations.
during stay-at-home periods.

Arts and Culture customs in various art formats such as time tunnel,
We promote the development of artistic talent, promote colourful glass canopy, platform seats and even a
public appreciation of art, and make customers’ journeys photographic installation of balletic street scenes in
more inspiring and enjoyable through our “Art in MTR” collaboration with the Hong Kong Ballet. We also hosted
programme, which offers space for art exhibitions in our a number of exhibitions, including the “Life and Hope –
highly travelled stations. Ling Tsz Hin Photo Exhibition” and Ming Yue “Embrace
Positive Energy for Hong Kong” painting exhibition,
We aim to integrate art pieces into stations and enrich across both Sheung Wan and Sai Wan Ho stations, to
passengers’ journeys. In 2020, we unveiled seven new inject positive energy into the community. In Central
artworks in Kai Tak, Diamond Hill and Hin Keng stations Station, a memorial exhibition for legendary singer Teresa
following the opening of Tuen Ma Line Phase 1 in Teng was held, which received positive response from
addition to Wan Chai Station and Tiu Keng Leng Station. the community.
These art pieces featured local heritage, history and
ENVIRONMENTAL PROTECTION
MTR is a proud provider of electrically powered World Business Council for Sustainable Development.
mass transit railway services, offering low-carbon, In tandem, we follow the guidelines published by the
environmentally sustainable transportation for large Environmental Protection Department and Electrical and
urban populations. In order to make our operations even Mechanical Services Department in Hong Kong as well as
more environmentally friendly, we strive to minimise other international guidelines.
emissions from our fleet of road vehicles, including buses;
To help conserve our planet’s natural resources, we
use resources as efficiently as possible; and minimise or
continued to reduce electricity consumption across all
mitigate other environmental impacts of our business as
our businesses. We were active in continuing to replace
set out in our Corporate Responsibility Policy.
our air conditioning systems with more energy-efficient
This past year we introduced our Corporate Strategy, chillers in our Hong Kong network. We also supported
which lays out a roadmap for our future business the development of renewable energy in Hong Kong
development as well as strong ESG guiding principles. by installing a 93.24 kW solar energy system at our
We published our Climate Change Strategy, which headquarters. Actions like these will help Hong Kong
specifies a three-pronged approach to combat climate become carbon-neutral in the future.
change: 1) providing a low-carbon transport network;
In 2020, we issued a new, US$1.2 billion 10-year Green
2) further reducing our carbon emissions; and
Bond under our new Sustainable Finance Framework
3) adapting and remaining resilient to climate change.
to fund projects that conserve energy and protect the
In line with this approach, we intend to strengthen
environment while enhancing and expanding low-carbon
our current actions and develop a long-term roadmap
railway services. It was the largest single-tranche green
to achieve even more impactful GHG reduction goals.
bond for corporates in Asia Pacific. Our Sustainable Finance
Therefore, the Company initiated a consultancy study to
Framework covers additional eligible investments that
develop long-term GHG reduction targets, and it intends
support the United Nations Sustainable Development
to launch the programme by 2021. The new targets will
Goals. Details of our sustainable investments are provided
be disclosed soon.
in our annual Green Finance Report, which will be
We have been reporting our GHG emissions since published on our sustainability website.
2002. We monitor Scope 1, 2 and 3 GHG emissions
As a builder of new railways and property developments,
in accordance with the Greenhouse Gas Protocol
we are also conscientious of meeting our environmental
established by the World Resources Institute and the
78 MTR Corporation
responsibilities when undertaking new projects. In Hong be put in place before the start of all designated projects.
Kong, an Environmental Impact Assessment must be We are also guided by Environmental Management
conducted and appropriate mitigation measures have to Systems that are independently audited and certified to
be ISO 14001 compliant.
SAFETY FIRST
The safety of our customers, employees and safety, please refer to the “Hong Kong Transport
Overview
business partners is always our number one priority. Operations” section (page 38) of this Annual Report.
We ensure a safe and healthy environment through
We take a rigorous approach with regard to the safety
cultivating a safety-first culture and promoting
of our staff, contractors and customers. To promote our
continuous improvement.
safety-first culture, we hold a Corporate Safety Month each
Our Corporate Strategic Safety Plan, which is reviewed year alongside on-going initiatives to address specific
and updated every four years, helps us focus our safety safety focuses. Another initiative is pursuing our long-term
efforts across all our business areas to maintain safety ambition to achieve a “Zero Harm” operating and working

performance excellence in support of our growth and environment by prioritising efforts in safety, health and
global expansion. We have applied a Corporate Safety well-being and building a strong preventive culture.
Management Model with a framework for overseeing
We also invest heavily in maintaining our assets, and
our safety management and governance across our
we assess operational safety impacts throughout the
businesses. For details on how we enhance customer
lifecycles of our projects.
GOVERNANCE AND POLICIES
All our corporate responsibility initiatives are aligned with provides strategic guidance and reviews our corporate
our business objectives and corporate values and are responsibility practices and performance. Please also refer
supported by our corporate governance framework. to the Corporate Responsibility Committee section of the
“Corporate Governance Report” (page 103) of this Annual
Our management approach to corporate responsibility
Report for its principal responsibilities. Our Corporate
comprises a number of policies, including our Corporate
Responsibility Steering Committee supports our
Responsibility Policy, Green Procurement Policy, Climate
corporate responsibility efforts by providing direction on
Change Strategy, and Modern Slavery and Human
responsible business practices and fostering collaboration
Trafficking Statement. These policies are overseen by Financials and Other Information
across all divisions.
the Board’s Corporate Responsibility Committee, which
RESPONSIBLE PROCUREMENT
All our suppliers and contractors are required to comply protection, both internally and among our suppliers
with our Supplier Code of Practice, which sets out a and contractors. To comply with the UK Modern Slavery
compulsory behavioural framework covering ethical Act, we have updated our Modern Slavery and Human
standards, human and labour rights, and supply chain Trafficking Statement to elucidate our commitment to
management. We also have a Green Procurement preventing any incidence of modern slavery or human
Policy that promotes high standards of environmental trafficking within our supply chains and business.

HUMAN RESOURCES
Staff
Motivation and
Engagement
Listening
and
Responding
to Staff
3.4 % 4.8 50,000+

Voluntary Staff Average Training Days
Staff Worldwide
Turnover Rate in Hong Kong per Employee in Hong Kong
Our staff are our most valuable assets, and we are and 16,921 people outside of Hong Kong. Our associates
committed to inspiring, engaging and developing them. also employed an additional 17,121 people in Hong Kong
As at 31 December 2020, the Company together with its and worldwide.
subsidiaries employed 17,288 people in Hong Kong
RECRUITMENT, TALENT DEVELOPMENT AND RETENTION

During the year, we continued to implement various ensure business sustainability. Starting from early
initiatives to enhance talent acquisition, employee January 2020, we adopted a prudent recruitment
engagement, motivation and talent development. These approach to meet our operational needs while containing
efforts are reflected in our stable workforce, with the costs. We have implemented cost control measures with
voluntary staff turnover rate in Hong Kong staying low at less impact on staff but meaningful financial outcome for
3.4% during the year. the Company.
The worldwide impact of COVID-19 posed unprecedented To fulfil our long-term manpower and succession needs,
challenges to the Company’s business performance. and to offer career opportunities to the youth of
Despite reduced patronage and revenue, we made Hong Kong, we continued our graduate recruitment
considerable efforts to protect the jobs of our staff and during the pandemic by stepping up our use of online
80 MTR Corporation
platforms. During the year, we conducted more than of China to recruit around 500 staff for the opening of the
20 virtual recruitment talks at vocational institutes and Shenzhen Metro Line 4 North Extension.
organised over 350 virtual interviews. These efforts
To attract, retain and motivate our staff, the Company
brought 30 high-calibre graduates into the Company’s
provides competitive pay and benefits, short- and
various graduate development programmes as well
long-term incentive schemes, and a broad range of
as 67 apprentices and Technician Associates into
career development opportunities under its total reward
apprenticeship programmes.
framework. We also conduct regular reviews to maintain
In support of our youth development and engagement market competitiveness of our pay and benefits for staff.
initiatives, we offered 74 internship placements to students
Overview
The Company has in place a robust performance
in Bachelor Degree and Associate Degree courses in Hong
management system. We also recognise and reward our staff
Kong in 2020. We also successfully leveraged campus
through our performance-based pay review mechanism as
recruitment campaigns in different cities in the Mainland
well as various staff motivational schemes and awards.
STAFF MOTIVATION AND ENGAGEMENT

To enhance the on-boarding experience and introduce than 2,000 Operations staff participated in the voluntary
staff development and recreational facilities to our new COVID-19 test provided by the Transport Department,
joiners, we have produced a series of virtual tours of and all tests results were negative. We also enhanced
various workplaces and staff facilities and posted them on our medical and counselling service provisions for
the New Joiner Portal. Since May 2020, we have provided assignees working overseas in the Mainland of China and
free Metro Recreation Club membership for our new international hubs to protect their health and safety.
joiners as a welcome gift and have also launched a New
Other initiatives to support our staff’s total well-being
Joiners Pulse Survey to solicit feedback on candidates’
included the introduction of one-day paid “Well-being
experience and identify areas where we can improve.
Leave” and the Flexible Benefits Online Platform for our
During the year, the Company rolled out a number of staff to redeem health products and services, and the
initiatives to support our staff to combat the COVID-19 formalisation of the staggered working hours policy for
pandemic. In February 2020, we issued Care Packs office staff. In addition to various wellness programmes
containing face masks and hand sanitiser to our staff like health talks and newsletters to help our staff relieve
at a time when personal protective equipment (“PPE”) pressure during the difficult times of 2020, we launched
supplies were tight. Later in the year, we strengthened an “Emotional Health One-stop Learning Portal” to
our staff’s PPE and launched in-house face mask provide resources such as a stress self-assessment
production lines at Siu Ho Wan Depot to fulfil the daily online questionnaire, topical learning videos and Financials and Other Information
operational needs of our local staff. In August, more scenario-based e-courses.
Staff Distribution by Geographic Location Staff Productivity – Earnings Per Employee*

(Percentage) (HK$ million)
2020
5.0 1.04
2019 0.96 0.97
14.4 0.81
4.9
13.6
12.8 12.7 51.8

50.5 0.28
Hong Kong
17.0
Australia
Sweden 2016 2017 2018 2019 2020
17.3
Mainland of China * Hong Kong businesses excluding property development
Others

HUMAN RESOURCES
LISTENING AND RESPONDING TO STAFF

During the year, the Company placed great emphasis on To foster mutual appreciation between colleagues and
launching the new Corporate Strategy, “Transforming encourage collaboration, we held promotional events
the Future”. This included communicating to our staff for the “We Praise We Support” programme and the
via channels such as the Chairman’s Letter and CEO “Living the MTR Values Award Scheme” in May 2020. To
Blog, a dedicated website set up by the Transformation enhance staff awareness of the Code of Conduct and
Management Office, quarterly pulse surveys starting in facilitate its application in the workplace, we held a series
December 2020 to solicit staff feedback, and meetings of promotional programmes in July 2020 with interactive
and forums at the corporate and departmental levels. games featuring real-life situations.
To maintain timely business communications during Through our multinational internal communication
the pandemic, the Company held a number of virtual platform MTRconnects, our staff can share corporate
forums and meetings for executive managers and updates and stories with colleagues in different business
managers around the world. Our Staff Consultation hubs across the globe. In 2020, this platform achieved
Mechanism continued to serve as a key communication a total view rate of approximately 178,000. Meanwhile,
channel between management and staff. In response our staff suggestion scheme continued to be a successful
to the COVID-19 outbreak, we also organised regular channel for soliciting innovative ideas from our staff.
communication sessions with staff representatives and
unions to proactively engage our staff and formulate
measures in a timely manner to address their concerns.
A CULTURE OF CONTINUOUS LEARNING

The Company provides a wide range of learning and groups. Such initiatives have helped our staff maintain
development programmes for new recruits and in-service business as usual and sustained the Company’s growth.
staff. In 2020, we offered 6,787 training courses in Hong
In 2020, we introduced a structured corporate
Kong, averaging 4.8 training days per staff member. In
development ladder to all newly recruited and
addition, we have launched a new learning management
promoted staff. It aims to provide colleagues with
platform with enhanced self-learning resources which
learning opportunities that strengthen their skills and
encourages staff utilisation anytime anywhere.
readiness to lead; facilitate their understanding of MTR’s
In the wake of the pandemic, the Company accelerated vision, values and DNA; enhance self-understanding; and
its use of learning technology via virtual classrooms, widen their networks within the Company to facilitate
webinars and e-learning to deliver training and collaboration. We also launched an online newsletter,
development programmes for staff. We took a blended “L&DD Learning Digest”, to provide colleagues with
approach to many of our training and development practical tips in learning and development, promote
programmes as well as our apprenticeship scheme by learning culture and encourage self-learning.
combining virtual learning and hands-on practice in small
DRIVING WORK IMPROVEMENT

MTR’s Work Improvement Team (“WIT”) programme plays
a prominent role in driving innovation and creating a
spirit of betterment. During the year, we held over 75 WIT
classes and organised 680 projects.
82 MTR Corporation
MTR ACADEMY
The MTR Academy (“MTRA” or “the Academy”) is FUTURE PLANS
recognised as a valuable centre of management and
The Hong Kong Rail Transit Innovation Research Institute
engineering expertise for the railway industry. Now
has set up a rail transit control simulation system at
offered in the Mainland of China and Belt and Road
Hung Hom Centre, which is being put into service in the
countries as well as Hong Kong, MTRA’s high-quality
first half of 2021. In addition to being used for research
programmes – in particular its Executive Certificate
purposes, it can also provide simulated facilities for
Programmes – are designed to mould the next generation
various types of Academy courses. Members of this
of railway professionals.
Research Institute are Beijing Jiaotong University, The
In September 2020, MTRA expanded its suite of Hong Kong Polytechnic University, MTR, MTR Academy
Overview
accredited programmes to include full-time programmes. and Traffic Control Technology Co. Ltd.
The Advanced Diploma in Transport & Operations
In addition, MTRA will begin offering accredited
Management and Diploma in Transport Studies are
Security Training courses in 2021. These are self-funded
accredited at Qualification Framework Level 4 and 3,
certification courses for security jobs. After MTRA
respectively. The Academy also successfully obtained
becomes recognised by the Employee Retraining Board as
programme recognition from HK PolyU SPEED and
an appointed training body, these courses can be offered
City U SCOPE, creating more articulation pathways

to a wider audience, including those seeking to re-enter
for graduates.
the employment market.
Overall, 120 students were admitted in Academic Year
2020, nearly half of whom are full-time students. A total
of 48 graduates were presented with Advanced Diploma
and Diploma awards this year.
The Applied Learning (Railway Studies) course of the New

High School (DSE) saw its first batch of graduates in 2020
with 30 students completing the course.
As part of its Corporate Programme for Belt & Road
Countries and Global Clients, MTRA held two Executive
Certificate courses in June and July 2020, attracting
43 senior managers from railway companies as well as
relevant government officials from the United States,
Singapore, Hong Kong and the Mainland of China. This
also marked the first time these programmes were
streamed live online. Programmes have a modular design Financials and Other Information
to increase flexibility for individual students in choosing
learning items.

FINANCIAL REVIEW
Revenue
Performance
Strong Credit Ratings

HK$ 42,541 million HK$ 4,381 million AA+
Total Revenue Underlying Business Profit
by Standard & Poor’s
Decreased by 21.9% Decreased by 58.5%
(long-term)
84 MTR Corporation
A review of the Group’s results and operations is featured in the preceding sections. This section discusses and analyses
such results in a greater level of detail.
PROFIT AND LOSS

Year ended 31 December Inc./(Dec.)
Total Revenue 42,541 54,504 (11,963) (21.9)
Recurrent Business (Loss)/Profit
EBIT
Overview
Hong Kong Transport Operations (5,408) (591) (4,817) (815.1)
Hong Kong Station Commercial Businesses 2,502 5,122 (2,620) (51.2)
Hong Kong Property Rental and Management Businesses 4,185 4,264 (79) (1.9)
Mainland of China and International Railway,
Property Rental and Management Subsidiaries 261 1,089 (828) (76.0)
Other Businesses, Project Study and Business
Development Expenses (1,949) (2,353) 404 17.2
Share of Profit of Associates and Joint Venture 605 288 317 110.1
Total Recurrent EBIT 196 7,819 (7,623) (97.5)

Interest and Finance Charges (1,097) (939) 158 16.8
Income Tax (237) (1,740) (1,503) (86.4)
Non-controlling Interests 12 (160) (172) n/m
Recurrent Business (Loss)/Profit (1,126) 4,980 (6,106) n/m
Property Development Profit (Post-tax) 5,507 5,580 (73) (1.3)
Underlying Business Profit 4,381 10,560 (6,179) (58.5)
Investment Property Revaluation (Loss)/Gain (9,190) 1,372 (10,562) n/m
Net (Loss)/Profit Attributable to Shareholders of
the Company (4,809) 11,932 (16,741) n/m
Total Recurrent EBIT Margin# (in %) (1.0%) 13.8% (14.8%) pts.
Total Recurrent EBIT Margin#
(excluding Mainland of China and International Subsidiaries) (in %) (3.2%) 19.3% (22.5%) pts.
# : Excluding share of profit of associates and joint venture
n/m : not meaningful
The outbreak of COVID-19 has become a pandemic and

adversely impacted all the cities where we operate. The Total Revenue
(HK$ billion)
anti-pandemic measures put in place by governmental 55.4 53.9 54.5
0.1
authorities in Hong Kong and globally, such as social 7.0 2.0 1.6
45.2
distancing and travel restrictions, have had a widespread 1.4
2.1
42.5
2.3 20.9 21.1 0.9
negative impact on the social, economic and travel 17.2
13.6
activities, hence seriously affected the Group’s businesses. 21.4
5.0 5.1
4.7 4.9
6.8
Total Revenue 5.5 6.0 6.4
5.0
The Group’s total revenue in 2020 decreased by 21.9% to 3.3
18.2 19.5 19.9
17.7
HK$42,541 million when compared to 2019, mainly due 11.9
to the adverse impact of the COVID-19 pandemic and

2016 2017 2018 2019 2020
the deterioration of the general economic environment
Total Revenue
on the fare revenue of our Hong Kong transport Mainland of China Hong Kong Property
operations (“HKTO”) and the decrease in station retail Property Development Rental and Management
Other Businesses Businesses
rental revenue of our Hong Kong station commercial Hong Kong Station
Commercial Businesses
businesses (“HKSC”). International Railway,
Property Rental and Hong Kong Transport
Management Subsidiaries Operations

FINANCIAL REVIEW
Recurrent Business Loss as the closure of several boundary crossings between

the Hong Kong SAR and the Mainland of China, social
distancing, work-from-home arrangements, school
Total Recurrent EBIT * closures, entry immigration controls and quarantine
(HK$ billion)
measures) have resulted in a significant reduction in
12.2
11.6
0.5
11.4 0.7 domestic and international travel demand, resulting in
0.5 0.7
0.5 0.8 0.3
1.1
an unprecedented drop of 31.5% in our patronage. Amid
4.2
3.9
4.1 7.8 this difficult time, the Company implemented several
4.3 0.6
0.3 relief measures for our passengers, including a substantial
4.4 5.0 4.2 increase of the “3.3% Rebate for Every Octopus Trip” to
4.7
5.1
“20% Rebate for Every Octopus Trip” from 1 July 2020 to
2.6
1.7 2.0 0.2 2.5 31 March 2021, and a price reduction for MTR City Saver
(0.3) (0.4) (0.4) (0.6) and Monthly Pass Extra from 1 July 2020 to 30 June 2021.
(2.4)
(5.4)
The Company has also deployed proactive measures to
save costs and improve operating efficiency.
(2.0) EBIT of HKSC decreased by 51.2% to HK$2,502 million.
2016 2017 2018 2019 2020 The rental revenue from our station retail business
Total Recurrent EBIT significantly decreased primarily due to the profit and
Share of Profit of Associates Hong Kong Property Rental
and Joint Venture and Management Businesses
loss impact of rental concessions granted to (i) duty
Mainland of China and Hong Kong Station free shop concession holders and other station kiosks
International Railway, Commercial Businesses
Property Rental and as a result of the closure of several boundary crossings
Hong Kong Transport
Management Subsidiaries Operations between the Hong Kong SAR and the Mainland of China,
Other Businesses, and (ii) retail tenants of station kiosks in domestic lines
Project Study and Business
Development Expenses whose businesses have been adversely affected by
* Including share of profit of associates and joint venture, project study reduced footfall in stations. Our advertising revenue also
and business development expenses recorded a major decrease mainly due to lower
advertising spending since retail and tourism market
sentiments continued to be dampened under the
Total Recurrent EBIT COVID-19 pandemic.
The Group’s total recurrent EBIT (including share of profit
EBIT of Hong Kong property rental and management
of associates and joint venture as well as project study
businesses slightly decreased by 1.9% to HK$4,185 million.
and business development expenses) in 2020 decreased
The decrease was mainly due to the profit and loss impact
by 97.5% to HK$196 million when compared to 2019. The
of rental concessions granted to retail mall tenants
decrease was mainly due to the adverse impact of the
whose businesses have been adversely affected by the
on-going COVID-19 pandemic and deterioration of the
sluggish retail sentiment and social distancing measures
general economic environment.
implemented from time to time. These rental concessions
EBIT of HKTO decreased drastically by HK$4,817 million, granted are amortised to the profit and loss account over
resulting in a loss of HK$5,408 million, mainly due to the remaining lease term of respective tenants, of which
the COVID-19 pandemic. The anti-pandemic measures a certain portion had been charged to the profit and loss
implemented by the Hong Kong Government (such account in 2020 accordingly. The adverse impact brought
86 MTR Corporation
by the COVID-19 pandemic on our property rental adverse financial impact of the COVID-19 pandemic on
business was mostly offset by (i) the profit contribution our associate in Hangzhou as well as Octopus Holdings
from the Group’s newly acquired remaining economic Limited in Hong Kong, partly offset by the incremental
interests in Telford Plaza II and PopCorn 2 since March profit contribution from our joint venture of Hangzhou
2020, (ii) the profit contribution from The LOHAS, our Metro Line 5 with full line operation since April 2020.
new shopping mall which opened by phases in August
Total Recurrent EBIT Margin
and November 2020, and (iii) substantially lower rental
Total recurrent EBIT margin maintained a stable trend
concessions granted in 2020 in respect of the public order
from 2016 to 2018 and declined in 2019 and 2020.
events (“POE”).
Overview
In 2019, the decline of total recurrent EBIT margin was
EBIT of our Mainland of China and international railway,
mainly due to the adverse impact of the POE in Hong
property rental and management subsidiaries business
Kong, as well as the provisions made for the Hung Hom
have also been adversely affected, but to varying
incidents of the SCL project in Hong Kong of HK$2 billion
degrees, resulting in a decrease in EBIT of 76.0% to
and the South Western Railway franchise agreement in
HK$261 million. Our Melbourne Train in Australia
the United Kingdom of HK$436 million.
experienced a small loss during 2020 as a result of
the COVID-19 pandemic. Our Shenzhen Metro Line In 2020, the further decline of total recurrent EBIT margin

4 in Mainland of China recorded a slight loss in 2020 was due to the adverse impact of the COVID-19 pandemic
due to the COVID-19 pandemic. Stockholm commuter in Hong Kong and globally, as well as the provision made
rail service (Stockholms pendeltåg) continued its for the SCL project management cost of HK$1.4 billion.
turnaround trajectory with its loss substantially reduced
resulting from stringent cost controls.
EBIT of other businesses, project study and business Total Recurrent EBIT Margin^
(Percentage)
development expenses reported a loss of HK$1,949
million in 2020 mainly due to a provision of HK$1.4 billion 40
made in respect of the additional project management
cost of the SCL project in Hong Kong and the loss incurred 30
by Ngong Ping 360 due to service suspension as a result

of the COVID-19 pandemic. On the other hand, the loss of 20
HK$2,353 million in 2019 was mainly due to a provision of

10
HK$2 billion made in respect of the Hung Hom Incidents
of the SCL project. 1.2
– (1.0)
(3.2)
Share of profit of associates and joint venture was HK$605
million in 2020, compared to a profit of HK$288 million -10
2016 2017 2018 2019 2020
in 2019 which included a provision of onerous contract
Total Recurrent EBIT Margin
of HK$436 million made in respect of the South Western (Excluding Mainland of China and International Subsidiaries)
Railway franchise agreement in the United Kingdom. If Total Recurrent EBIT Margin
the provision in 2019 had been excluded, the share of Total Recurrent EBIT Margin
(Mainland of China and International Subsidiaries)
profit in 2020 would have decreased by HK$119 million
^ Excluding share of profit of associates and joint venture
or 16.4% when compared with 2019, mainly due to the

FINANCIAL REVIEW
Interest and Finance Charges Investment Property Revaluation Loss

Interest and finance charges for recurrent businesses Revaluation of the Group’s investment properties in Hong
were HK$1,097 million, representing an increase of 16.8% Kong and Mainland of China, which was performed by
from 2019, mainly due to higher net interest expense independent professional valuation firms, resulted in a
as a result of higher average net borrowing. A detailed revaluation loss of HK$9,190 million for the year ended
review of the Group’s financing activities is featured in the 31 December 2020, compared to a revaluation gain of
ensuing section. HK$1,372 million for 2019.
Income Tax The revaluation loss, being a non-cash item, of a 10%
Income tax for recurrent businesses was HK$237 million, drop in the value of our investment properties in
representing a decrease of 86.4% from 2019 due to Hong Kong was mainly attributable to the decrease in
declined financial performance. reversionary rents due to the COVID-19 pandemic and the
deterioration of the general economic environment.
Property Development Profit (Post-tax)
The Group’s property development profit was HK$5,507 Net Loss Attributable to Shareholders of
million, representing a decrease of 1.3% from 2019. The the Company
property development profit for 2020 was mainly derived Taking into account the Group’s recurrent businesses,
from the share of surplus proceeds of LP6 (LOHAS Park property development businesses and investment
Package 6) and sales of inventory units. property revaluation, the Group reported a net loss
attributable to shareholders of the Company of HK$4,809
Underlying Business Profit million for the year ended 31 December 2020, compared
The Group’s underlying business profit was HK$4,381 to a net profit of HK$11,932 million for 2019.
million, representing a decrease of 58.5% from 2019 as
a result of the on-going COVID-19 pandemic and the
deterioration of the general economic environment.
Underlying Business Profit

(HK$ billion)
11.3
10.5 10.6
9.4 2.3
0.5 1.9
5.6
4.4
8.9 9.0
8.6
5.0 5.5
(1.1)
2016 2017 2018 2019 2020
Underlying Business Profit

Property Development Profit
Recurrent Business Profit/(Loss)
88 MTR Corporation
STATEMENT OF FINANCIAL POSITION
As at As at Inc./(Dec.)
31 December 31 December
Fixed Assets 220,932 225,605 (4,673) (2.1)
Property Development in Progress 11,942 12,022 (80) (0.7)
Interests in Associates and Joint Venture 11,592 10,359 1,233 11.9
Debtors and Other Receivables 13,313 11,169 2,144 19.2
Cash, Bank Balances and Deposits 20,906 21,186 (280) (1.3)
Other Assets 11,889 8,873 3,016 34.0
Overview
Total Assets 290,574 289,214 1,360 0.5
Total Loans and Other Obligations (50,340) (39,456) 10,884 27.6
Creditors and Other Liabilities (38,833) (38,881) (48) (0.1)
Obligations Under Service Concession (10,295) (10,350) (55) (0.5)
Deferred Tax Liabilities (14,125) (13,729) 396 2.9
Total Liabilities (113,593) (102,416) 11,177 10.9
Net Assets 176,981 186,798 (9,817) (5.3)

Represented by:

Total Equity Attributable to Shareholders of the Company 176,788 186,606 (9,818) (5.3)
Non-controlling Interests 193 192 1 0.5
Total Equity 176,981 186,798 (9,817) (5.3)
Fixed Assets Interests in Associates and Joint Venture

Fixed assets decreased by 2.1% to HK$220,932 million, Interests in associates and joint venture increased mainly due
mainly due to the revaluation loss of our investment to share of profit from associates and joint venture, the equity
property portfolio of HK$9,190 million, partly offset by injections into Sydney Metro City & Southwest (SMCSW) and
(i) the acquisition of the remaining economic interests in Beijing MTR, as well as exchange gain on carrying amount
Telford Plaza II and PopCorn 2 for a total consideration of mainly due to the appreciation of the Renminbi.
HK$3,000 million and (ii) renewal and upgrade works for
our existing Hong Kong railway network. With the new Debtors and Other Receivables
asset additions in our Hong Kong railway network, total Debtors and other receivables increased mainly due to
depreciation and amortisation increased by 2.4%. (i) the portion of rental concession granted yet to be
amortised to the profit and loss account, and (ii) the
increase in property development receivables upon the
Fixed Assets Growth recognition of the property development profit of LP6.
(HK$ billion)
225.6 220.9
Other Assets
215.9
209.8
201.9 31.3 32.9
Other assets increased mainly due to the increase in amount
30.4
28.3
29.8
due from related parties and properties held for sales.
103.6 102.9
102.8 102.6 102.0 Total Loans and Other Obligations
Total loans and other obligations increased mainly due to
the issuance of a 10-year US$1.2 billion green bond, and
91.7 net drawdown of loans and issuance of other bonds/notes.
77.1 82.7 86.0
70.0
Total Equity
2016 2017 2018 2019 2020
Total equity decreased by HK$9,817 million, mainly due
Total Fixed Assets Other Property,
Service Concession Assets Plant and Equipment to the investment property revaluation loss and the
Investment Properties payments of the 2019 final ordinary dividend and 2020
interim ordinary dividend during the year partly offset by
the underlying business profit recorded for the year.

FINANCIAL REVIEW
CASH FLOW
HK$ million 2020 2019
Net Cash Generated From Operating Activities and Other Receipts 835 17,164
Receipts from Property Developments 8,583 9,175
Net Cash Receipts 9,418 26,339
Capital Expenditure (9,249) (6,072)
Payments in respect of Property Developments (412) (3,259)
Fixed Annual Payment (750) (750)
Variable Annual Payment (2,583) (2,305)
Investments in Associates and Joint Venture and Loan to Associates (140) (1,539)
Total Cash Outflow (13,134) (13,925)
Net Cash (Outflow)/Inflow before Financing (3,716) 12,414

Net Drawdown/(Repayment) of Loans and Capital Market Instruments, and Lease
Rental Payments 10,145 (1,678)
Net Interest Payment (484) (684)
Net Drawdown/(Repayment) of Debts, Lease Rental and Net Interest Payments 9,661 (2,362)
Dividends Paid to Shareholders of the Company (6,808) (6,649)
Other Financing Activities (9) (117)
(Decrease)/Increase in Cash (872) 3,286
Cash, Bank Balances and Deposits as at 1 January 21,186 18,022

(Decrease)/Increase in Cash (872) 3,286
Effect of Exchange Rate Changes 592 (122)
Cash, Bank Balances and Deposits as at 31 December 20,906 21,186
Cash Flow for the Year Ended 31 December 2020

(HK$ billion)
12
8.2 (9.2)
8
0.5 (6.8)
9.2
0.8
(3.3) (3.7) (0.9)
–
(0.1)
(4)
(8)
Net Cash Net Receipts Capital Fixed and Investments in Net Cash Issuance of Net Drawdown Dividends Decrease
Generated from from Expenditure Variable Associates and Outflow before a 10-year of Loans and Paid to in Cash
Operating Property Annual Joint Venture Financing US$1.2 billion Issuance of Shareholders
Activities and Developments Payments and Loan to Green Bond Other Bonds/ of the Company
Other Receipts Associates Notes, Lease and Other
Rental and Financing Activities
Net Interest
Payments
Net Cash Generated from Operating Net Receipts from Property

Activities and Other Receipts Development
Compared to net cash generated from operating activities The net receipts from property development of
and other receipts of HK$17,164 million for 2019, the net HK$8,171 million mainly comprised cash receipts from
cash generated from operating activities and other receipts LOHAS Park Packages.
decreased by HK$16,329 million to HK$835 million, mainly
due to the decrease in operating profit resulting from the
adverse impact of the COVID-19 pandemic.
90 MTR Corporation
Capital Expenditure Investments in Associates and Joint
In 2020, capital expenditure mainly comprised cash Venture and Loan to Associates
outflow of HK$5,226 million for Hong Kong transport The investments in associates and joint venture and loans
and related operations, HK$3,539 million for Hong Kong to associates mainly related to the equity injection into
investment property projects mainly for the acquisition Sydney Metro City & Southwest (SMCSW) in 2020.
of the remaining economic interests in Telford Plaza II
and PopCorn 2 shopping malls in 2020, HK$250 million Net Drawdown of Loans and Issuance
for Hong Kong railway extension projects, and HK$234 of Other Bonds/Notes, Lease Rental and
million for Mainland of China and overseas subsidiaries. Net Interest Payments
Overview
In 2020, net drawdown of loans and issuance of other
bonds/notes, lease rental and net interest payment
Capital Expenditure comprised of (i) proceeds mainly from capital market
(HK$ billion) instruments of HK$26,872 million (including the issuance
9.2 of a 10-year US$1.2 billion green bond), (ii) mainly
0.2
repayment of loans of HK$16,495 million and (iii) net
interest payment of HK$484 million.

3.5
6.1 Total Capital Expenditure
0.2
0.3
0.3 Mainland of China and A detailed review of the Group’s financing activities is
0.3
International Subsidiaries
featured in the ensuing section.
Hong Kong
Investment Property Projects
5.3 5.2 Hong Kong Railway Dividends Paid to Shareholders of
Extension Projects
Purchase of Assets for the Company
Hong Kong Transport and
2019 2020 Related Operations
The Group paid dividends of HK$6,808 million (2019:
HK$6,649 million) in cash, being the 2019 final dividend
of HK$0.98 per share and the 2020 interim dividend of
HK$0.25 per share.
FINANCING ACTIVITIES
The year 2020 was a challenging one for companies in
Preferred Financing Model many industries all around the world. The COVID-19
and Debt Prof ile pandemic forced cities to lock down to varying degrees,
causing businesses to close and leading to substantial job Financials and Other Information
The Preferred Financing Model exemplifies the Company's
approach to debt management and helps ensure a prudent losses. Vaccines have been developed in record time, and
and well-balanced debt portfolio. several countries have launched vaccination programmes
(Preferred Financing Model) vs. Actual debt profile since late 2020. However, it may take some time for the
as at 31 December 2020 vaccination programmes to achieve their desired results.
Source
(45-80) 76.7 (20-55) 23.3
(Percentage) The US Federal Reserve cut the target range of the federal
Capital market instruments Bank facilities
funds rate to 0 – 0.25% p.a. in March 2020 and undertook
Interest rate base
(45-75) 69.8 (25-55) 30.2
(Percentage) a broad array of activities to limit the economic fallout
Fixed rate Floating rate
of the pandemic, including resuming the purchase of
Maturity
(0-30) 16.0 (20-55) 23.4 (35-65) 60.6
(Percentage) massive amounts of securities. It is expected that the
Within 2 years 2 to 5 years Beyond 5 years
Average fixed rate debt maturity: 13.1 years
federal funds rate will remain at 0 – 0.25% p.a. for some
Currency time until the average annual inflation rate reaches 2%.
(85-100) 100.0
(Percentage)
Hedged
Financing Horizon
(12-24) 13
(Month)

FINANCIAL REVIEW
Interest rates fell in 2020. The three-month USD Libor

fell to 0.24% p.a. at year-end from 1.91% p.a. at the start Maturity Profile
of the year. Likewise, the three-month HKD Hibor fell to (Percentage)
0.35% p.a. from 2.43% p.a. The 10-year US Treasury yield 100
fell to 0.91% p.a. at year-end from 1.92% p.a. at the start

of the year, while the 10-year HKD swap rate fell to 80 36.5
52.0 51.3 51.8
0.86% p.a. from 2.04% p.a. 60.6
60
The Company started the year raising financing with
shorter tenors with a view to lowering overall borrowing 40
26.2
cost. With the business environment deteriorating 63.5
44.3 46.4 23.4
sharply by the middle of March, the Company switched 20
its focus to financing facilities with longer maturities and 22.0

16.0
higher drawdown flexibility. The Company established – 3.7 2.3
2016 2017 2018 2019 2020
a Sustainable Finance Framework in August to cover
Beyond 5 years 2 to 5 years Within 2 years
green, social and sustainable financing, reflecting its
* The Company monitors the refinancing risk (i.e. the debt
commitment to the environment and sustainable maturity profile) based on available committed facilities.
community development.
In total, the Company arranged around HK$29.2 billion of

financing in 2020, including a 10-year US$1.2 billion green Gearing Ratio and Net Interest Coverage
bond, HK$5.3 billion equivalent of MTNs with maturities The Group’s gearing ratio, as measured by net debt-to-
ranging from six months to 35 years, and HK$14.6 billion equity ratio, increased by 7.1% points to 22.5% at the
in loans with maturities ranging from one to five years. end of 2020 compared to 15.4% at the end of 2019. This
was mainly due to an increase in net debts. The Group’s
The US$1.2 billion green bond issued in August 2020
interest cover decreased from 15.3 times to 8.2 times.
under the Sustainable Finance Framework is the largest
single-tranche green bond for corporates in Asia-Pacific. The graph below shows the level of leverage and our
The issuance won Hong Kong's “Best Green Bond” ability to meet interest payment obligations over the
Award and, being at the forefront of raising sustainable past five years. Despite the fact that net debt-to-equity
financing, the Company was also named the “Best Issuer ratio and interest cover in 2020 stayed at the highest and
for Sustainable Finance” in Hong Kong in The Asset Triple lowest points for the past five years respectively, they
A Country Awards 2020. remain at healthy levels.
Maturity Profile
The graph below shows the maturity profiles of the Net Debt-to-Equity Ratio and
Company‘s interest-bearing borrowings at year-end Interest Coverage
from 2016 to 2020. This demonstrates the spread of (Percentage) (Times)
the maturities of the Company’s borrowings and well- 80 20
managed refinancing risk. The increase in the proportion

15.3
of borrowings beyond five years in 2020 was mainly due 60
15.0
15
to the issuance of the 10-year USD bond. 13.6
12.7
40 10
8.2
22.5%
20.2% 20.6%
20 5
18.1%
15.4%
– –
2016 2017 2018 2019 2020
Interest cover (right axis)

Net debt-to-equity ratio (left axis)
92 MTR Corporation
Cost of Borrowing Capital expenditure on Hong Kong railway projects
The Group’s consolidated gross debt position increased (including maintenance costs for the Hong Kong railway
to HK$50,340 million at the end of 2020 compared to system) will continue to constitute a significant portion of
HK$39,456 million at the end of 2019. The weighted capital expenditure in 2021–2023.
average cost of the Group’s interest-bearing borrowings The Group believes that, based on its cash balance and
decreased to 2.3% p.a. in 2020 from 2.8% p.a. in 2019. available committed banking facilities totalling more
The diagramme below shows the Group’s gross debt level than HK$30 billion as at 31 December 2020, as well as its
and weighted average cost of interest-bearing borrowings. ready access to both the loan and debt capital markets, it
will have sufficient financing capacity to fund its capital
Overview
expenditure and investment programme.
Group’s Gross Debt Level and

Weighted Average Cost of
Interest Bearing Borrowings Capital Expenditure and Investment
(HK$ billion) (Percentage) (2021–2023)
90 3 (Percentage)
2.8% 2.8%
2.9%

2.5%
21
2.3% 58
60 2
50.3 Hong Kong
Estimated expenditure
Maintenance CAPEX
39.9
42.0 40.2 7 2021: HK$15.4 billion
39.5 Hong Kong
2022: HK$17.5 billion
New Railway Projects
2023: HK$14.2 billion
30 1 Advance Railway
7 Works related to SCL#
Mainland of China &
7 Overseas Investment
Hong Kong Property
– –
2016 2017 2018 2019 2020 #
Advanced Railway Works involve modifications to or upgrades
Weighted average cost of interest bearing borrowings (right axis) or expansion of assets for which MTR is responsible under the
existing service concession agreement with KCRC. This will
Group’s gross debt level (left axis)
predominantly be covered by the reduction in future
maintenance CAPEX during the construction period of SCL
Project which MTR would have otherwise incurred.
Capital Expenditure and Investment

The Group’s capital expenditure and investment mainly
Credit Ratings (as of 11 March 2021)
consists of three parts: Hong Kong railway projects
Short-term Long-term
(including maintenance), Hong Kong property investment Credit ratings ratings* ratings* Financials and Other Information
and development, and Mainland of China and overseas Standard & Poor’s A–1+/A–1+ AA+/AA+
investments. The total spending from 2021 to 2023 is Moody’s –/P-1 Aa3/Aa3
estimated at HK$47.1 billion. Rating & Investment
a–1+ AA+
Information, Inc. (R&I)
* Ratings for Hong Kong dollar/foreign currency denominated debts respectively

TEN-YEAR STATISTICS
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Financial
Consolidated Profit and Loss (in HK$ million)
Total revenue
– Hong Kong transport operations 11,896 19,938 19,490 18,201 17,655 16,916 16,223 15,166 14,523 13,509
– Hong Kong station commercial businesses 3,269 6,799 6,458 5,975 5,544 5,380 4,963 4,588 3,680 3,422
– Hong Kong property rental and
management businesses 5,054 5,137 5,055 4,900 4,741 4,533 4,190 3,778 3,401 3,083
– Mainland of China and international railway,
property rental and management subsidiaries 21,428 21,085 20,877 17,194 13,562 12,582 12,627 13,246 12,786 12,411
– Other businesses 894 1,545 1,990 2,174 2,339 2,290 2,153 1,929 1,349 998
– Recurrent businesses 42,541 54,504 53,870 48,444 43,841 41,701 40,156 38,707 35,739 33,423
– Mainland of China property development – – 60 6,996 1,348 – – – – –
– Total 42,541 54,504 53,930 55,440 45,189 41,701 40,156 38,707 35,739 33,423
Total EBITDA
– Recurrent businesses 5,194 15,351 18,843 17,677 16,947 16,260 15,478 14,399 12,895 12,124
– Hong Kong property development 6,491 5,707 2,574 1,097 311 2,891 4,216 1,396 3,238 4,934
– Mainland of China property development (13) (25) 25 2,314 366 (140) (55) – – –
– Total 11,672 21,033 21,442 21,088 17,624 19,011 19,639 15,795 16,133 17,058
Depreciation and amortisation (5,365) (5,237) (4,985) (4,855) (4,127) (3,849) (3,485) (3,372) (3,208) (3,206)
Variable annual payment (238) (2,583) (2,305) (1,933) (1,787) (1,649) (1,472) (1,247) (883) (647)
Total EBIT
– Recurrent business EBIT
EBIT
　Hong Kong transport operations (5,408) (591) 1,985 1,656 2,572 2,493 2,710 2,716 2,881 2,701
　Hong Kong station commercial businesses 2,502 5,122 5,025 4,722 4,362 4,230 3,927 3,668 2,969 2,799
　Hong Kong property rental and
　 management businesses 4,185 4,264 4,225 4,082 3,912 3,650 3,427 3,092 2,764 2,490
　Mainland of China and international
　railway, property rental and
　 management subsidiaries 261 1,089 722 814 490 640 782 704 520 381
　Other businesses (1,670) (2,077) (81) (53) 58 53 129 86 (7) 23
　Project studies and business
　 development expenses (279) (276) (323) (332) (361) (304) (454) (486) (323) (123)
Share of profit of associates and
joint venture 605 288 658 494 537 361 121 158 456 297
Sub-total 196 7,819 12,211 11,383 11,570 11,123 10,642 9,938 9,260 8,568
– Property development business EBIT 6,478 5,682 2,599 3,411 675 2,751 4,161 1,396 3,238 4,934
– Total 6,674 13,501 14,810 14,794 12,245 13,874 14,803 11,334 12,498 13,502
(Loss)/profit attributable to shareholders of
the Company arising from:
– Recurrent businesses (1,126) 4,980 9,020 8,580 8,916 8,565 8,024 7,437 6,914 6,243
– Property development businesses 5,507 5,580 2,243 1,935 530 2,329 3,547 1,163 2,704 4,225
– Underlying businesses 4,381 10,560 11,263 10,515 9,446 10,894 11,571 8,600 9,618 10,468
– Investment property revaluation (loss)/gain (9,190) 1,372 4,745 6,314 808 2,100 4,035 4,425 3,757 5,088
– Total (4,809) 11,932 16,008 16,829 10,254 12,994 15,606 13,025 13,375 15,556
(Loss)/profit for the year (4,821) 12,092 16,156 16,885 10,348 13,138 15,797 13,208 13,514 15,688
(Loss)/earnings per share (in HK$) (0.78) 1.94 2.64 2.83 1.74 2.22 2.69 2.25 2.31 2.69
Ordinary dividend per share (in HK$) 1.23 1.23 1.20 1.12 1.07 1.06 1.05 0.92 0.79 0.76
Ordinary dividend proposed and declared 7,602 7,574 7,359 6,728 6,317 6,207 6,116 5,335 4,575 4,396
Share price at 31 December (in HK$) 43.35 46.05 41.20 45.80 37.70 38.40 31.80 29.35 30.50 25.15
Market capitalisation at 31 December
(HK$ million) 267,943 283,574 252,947 275,156 222,629 224,956 185,284 170,187 176,692 145,490
Consolidated Financial Position (in HK$ million)
Total assets 290,574 289,214 274,687 263,768 257,340 241,103 227,152 215,823 206,687 197,684
Loans, other obligations and bank overdrafts 50,340 39,456 40,205 42,043 39,939 20,811 20,507 24,511 23,577 23,168
Obligations under service concession 10,295 10,350 10,409 10,470 10,507 10,564 10,614 10,658 10,690 10,724
Total equity attributable to shareholders
of the Company 176,788 186,606 180,447 166,304 149,461 170,055 163,325 152,557 142,904 131,907
Financial Ratios
EBITDA margin◊ (in %) 12.2 28.1 35.0 36.1 38.3 38.7 38.4 37.2 36.1 36.3
EBITDA margin◊
(excluding Mainland of China and
international subsidiaries) (in %) 22.1 42.0 54.5 53.5 54.0 53.3 53.1 53.4 53.6 55.6
EBIT marginφ (in %) (1.0) 13.8 21.5 23.8 25.2 25.5 26.1 25.3 24.6 24.7
EBIT marginφ
(excluding Mainland of China and
international subsidiaries) (in %) (3.2) 19.3 32.8 32.2 34.8 34.8 35.4 35.6 36.1 37.5
Net debt-to-equity ratio (in %) 22.5 15.4 18.1 20.6 20.2 11.3 7.6 11.8 11.0 11.6
Return on average equity attributable to
shareholders of the Company arising from
underlying businesses (in %) 2.4 5.8 6.5 6.7 5.9 6.5 7.3 5.8 7.0 8.2
Interest cover (times) 8.2 15.3 13.6 15.0 12.7 14.4 15.2 11.5 13.0 14.5
◊ Excluding profit on Hong Kong property development.

φ Excluding profit on Hong Kong property development and share of profit of associates and joint venture.
94 MTR Corporation
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Revenue car-km operated (thousand)
Domestic and Cross-boundary services 268,492 301,552 308,742 301,541 287,828 284,487 273,771 269,141 260,890 254,407
Airport Express 12,631 22,971 23,190 23,202 23,276 23,242 23,232 23,216 23,134 19,603
Light Rail 10,385 10,592 11,139 11,145 11,152 11,034 10,728 10,554 10,453 10,166
Total number of passengers (thousand)
Domestic Service 1,145,035 1,568,196 1,669,973 1,637,898 1,586,522 1,577,457 1,547,757 1,474,659 1,431,040 1,366,587
Cross-boundary Service 7,647 104,183 117,448 112,549 113,274 114,241 113,049 111,362 109,707 103,881
High Speed Rail 1,033 16,923 5,302@ – – – – – – –
Airport Express 3,070 15,764 17,710 16,621 16,133 15,725 14,881 13,665 12,695 11,799
Light Rail 111,865 155,885 179,411 178,502 178,709 176,149 174,199 171,652 167,210 161,289
Bus 42,077 51,484 51,025 50,744 50,413 50,537 50,404 47,738 45,962 43,956
Intercity 103 1,880 3,630 3,698 3,739 4,080 4,348 4,324 4,028 3,787
Average number of passengers (thousand)
Overview
Domestic Service – weekday average 3,406 4,658 4,862 4,772 4,608 4,577 4,490 4,297 4,148 3,968
Cross-boundary Service – daily average 21 285 322 308 309 313 310 305 300 285
High Speed Rail – daily average 36## 46 53# – – – – – – –
Airport Express – daily average 8 43 49 46 44 43 41 37 35 32
Light Rail – weekday average 317 448 506 503 500 493 487 482 466 451
Bus – weekday average 121 151 147 146 144 145 144 137 131 126
Intercity – daily average 4## 5 10 10 10 11 12 12 11 10
Average passenger km travelled
Domestic and Cross-boundary services 10.5 10.6 10.8 10.8 10.9 11.0 11.0 11.0 10.9 10.9
Airport Express 25.8 28.2 28.3 28.5 28.4 28.4 28.6 29.0 29.0 29.4
Light Rail 2.8 2.7 2.7 2.7 2.7 2.7 2.7 2.8 2.8 2.8
Bus 4.1 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5
Average car occupancy (number of passengers)

Domestic and Cross-boundary services 45 59 62 63 64 65 67 65 65 63
Airport Express 6 19 22 20 20 19 18 17 16 18
Light Rail 30 40 44 44 44 44 45 45 45 45
Proportion of franchised public transport
boardings (%) 45.3 47.4 49.0& 49.1 48.4 48.5 48.1 46.9 46.4 45.4
HK$ per car-km operated

(Hong Kong Transport Operations*)
Total revenue 35.6 51.7 53.4 52.5 53.0 51.3 51.0 48.4 47.6 45.9
Operating costs 33.3 33.0 28.2 28.5 27.7 27.2 26.8 24.9 24.2 23.1
Operating profit 2.3 18.7 25.2 24.0 25.3 24.1 24.2 23.5 23.4 22.8
HK$ per passenger carried
(Hong Kong Transport Operations*)
Total revenue 8.11 9.40 9.26 9.10 9.06 8.73 8.52 8.31 8.20 7.99
Operating costs 7.60 5.99 4.89 4.93 4.73 4.63 4.47 4.27 4.18 4.02
Operating profit 0.51 3.41 4.37 4.17 4.33 4.10 4.05 4.04 4.02 3.97
Safety Performance
Domestic Service, Cross-boundary Service and
Airport Express
Number of reportable events^ 656 1,164 1,056 1,148 1,134 1,246 1,327 1,408 1,761 1,769
Reportable events per million
passengers carried^ 0.57 0.69 0.58 0.65 0.66 0.73 0.79 0.88 1.13 1.19
Number of staff and contractors’
staff accidents∆ 51 81 50 46 61 64 57 67 58 44
Light Rail
Number of reportable events^ 80 163 87 104 191 157 122 118 151 164
Reportable events per million
passengers carried^ 0.72 1.05 0.48 0.58 1.07 0.89 0.70 0.69 0.90 1.02
Number of staff and contractors’
staff accidents∆ 10 8 2 5 8 6 4 4 2 7
Employees
Hong Kong
Corporate management and
support departments 1,852 1,899 1,932 1,882 1,837 1,792 1,756 1,676 1,600 1,486
Station commercial businesses 224 234 204 191 192 182 170 158 148 144
Operations 11,983 12,211 11,948 11,591 11,349 10,891 10,404 10,033 9,460 9,244
Projects 1,426 1,531 1,711 2,144 2,615 2,684 2,764 2,804 2,495 2,109
Property and other businesses 1,548 1,549 1,500 1,440 1,416 1,384 1,350 1,305 1,273 1,282
Mainland of China and international businesses 255 318 331 276 230 194 180 182 224 179
Outside of Hong Kong
Offshore employees 16,921 16,521 14,270 10,781 9,866 8,157 7,530 7,078 6,955 6,851
Total 34,209 34,263 31,896 28,305 27,505 25,284 24,154 23,236 22,155 21,295
@ High Speed Rail service commenced on 23 September 2018.

# Average of 23 September 2018 to 31 December 2018.
## Average of 1 to 29 January 2020.
& Market share for 2018 was rebased to reflect the impact on the opening of Hong Kong – Zhuhai – Macao Bridge.
* Does not include the High Speed Rail service.
^ Reportable events are occurrences affecting railway premises, plant and equipment, or directly affecting persons (with or without injuries), that are reportable to the
Secretary for Transport and Housing and Director of Electrical and Mechanical Services, Government of the Hong Kong SAR under the Mass Transit Railway Regulations,
ranging from suicides/attempted suicides, trespassing onto tracks, to accidents on escalators, lifts and moving paths.
∆ Any accident connected with the operation of the railway or with the maintenance thereof, which is notifiable to Railway Branch, Electrical & Mechanical Services
Department according to Mass Transit Railway Regulations, as a result of which an employee of the Corporation or of a contractor with the Corporation is suffering 'fatal
injury', 'serious injury', or unable to fully carry out his / her normal duties for a period exceeding 3 days immediately after the accident.

INVESTOR RELATIONS
MTR has been participating in international capital out in the “Annual General Meeting” section of the
markets for over four decades. During this time, we “Corporate Governance Report” on page 121 of this
have built a reputation as a leader in investor relations Annual Report.
practices in Asia, respected for our high standards of
corporate governance and disclosure. We believe that ACCESS TO INFORMATION
communicating our strategies, business development
Our corporate website provides investors with equal
and future outlook in a clear, transparent and proactive
and timely access to Company information. The Investor
manner enhances shareholder value, and we engage
Information section provides details on our financial
regularly with both institutional and retail investors.
performance in readily accessible form. Financial reports,
patronage figures, and other Company news and stock
COMMUNICATING WITH exchange filings are all accessible on the website.
INVESTORS In addition to the shareholder services offered by
Our continuous engagement with the investment Computershare, our dedicated hotline answered
community has made MTR one of the most widely approximately 26,000 enquiries from individual
covered listed companies in Hong Kong. We are followed shareholders in 2020.
by many international and local brokers, research
analysts, and a wide range of institutional investors.
INDEX LISTING
MTR management makes every effort to ensure that AND RECOGNITIONS
investors have a thorough understanding of the
The Company’s shares have been listed on the Stock
Company’s business. In 2020, we held 271 meetings with
Exchange of Hong Kong since 2000 and have been
institutional investors and analysts globally. Many of
included as one of the Hang Seng Index’s constituent
these meetings were held with the aid of technologies in
stocks since 2001.
observance of social distancing requirements.
Our Annual Report achieves considerable recognition
The Company’s Annual General Meeting (“AGM”) is
each year for presenting a clear picture of the Company’s
one of its principal channels of communication with
performance and strategy. These are listed in the “Key
shareholders. Further details on the 2020 AGM are set
Awards” section on page 7 of this Annual Report.
SHARE PRICE PERFORMANCE

60
120
55
110
50
100
45
Baseline
MTR share price
90
40 (HK$)(right scale)
MTR share price
relative to HSI
80 35 (Relative Index)
2020 January December (left scale)
96 MTR Corporation
FINANCIAL CALENDAR 2021 CONTACTS
Announcement of 2020 annual results 11 March
Annual General Meeting 26 May Shareholder Services
Last day to register for 2020 final dividend 31 May Any matters relating to your shareholding, such as transfer of shares,
Book closure period 1 June to 4 June change of name or address, and loss of share certificates should be
2020 final dividend payment date 20 July addressed in writing to the Registrar:
Announcement of 2021 interim results August Computershare Hong Kong Investor Services Limited
2021 interim dividend payment date October 17M Floor, Hopewell Centre,
Financial year end 31 December 183 Queen’s Road East, Wan Chai, Hong Kong
Telephone: (852) 2862 8628
Overview
DIVIDEND INFORMATION Facsimile: (852) 2529 6087
Dividend per Share (in HK$)

Shareholder Enquiries
Shareholders are, at any time, welcome to raise questions and request
2019 Total Ordinary Dividend 1.23
information (to the extent it is publicly available) from the Board and
2020 Interim Ordinary Dividend 0.25
management by writing to the Company Secretary, MTR Corporation
2020 Final Ordinary Dividend 0.98
Limited, MTR Headquarters Building, Telford Plaza, Kowloon Bay,
Dividend history can be found in the Kowloon, Hong Kong. Any such letter from the Shareholders should

“Ten-Year Statistics” section on page 94 be marked “Shareholders’ Communications” on the envelope.
of this Annual Report and our
Our enquiry hotline is operational during normal office hours:
corporate website.
Telephone: (852) 2881 8888
Investor Relations
Dividend Policy For enquiries from institutional investors and securities analysts,
MTR is committed to a progressive ordinary dividend policy. The please contact:
aim of this policy is to steadily increase or at least maintain the Hong
Kong dollar value of ordinary dividends per share annually. The Investor Relations Department, MTR Corporation Limited
prospective dividend growth, however, remains dependent upon MTR Headquarters Building, Telford Plaza, Kowloon Bay,
the financial performance and future funding needs of the Company. Kowloon, Hong Kong
Email: investor@mtr.com.hk
SHAREHOLDINGS AS AT Annual Report 2020
31 DECEMBER 2020 Shareholders can obtain copies of our annual report by writing to:
Computershare Hong Kong Investor Services Limited
Ordinary Shares 17M Floor, Hopewell Centre
Shares outstanding 6,180,927,873 shares 183 Queen’s Road East, Wan Chai, Hong Kong
Hong Kong SAR Government Shareholding 4,634,173,932 shares
If you are not a shareholder, please write to:
(74.98%)
Free float 1,546,753,941 shares Corporate Affairs Division, MTR Corporation Limited Financials and Other Information
(25.02%) MTR Headquarters Building, Telford Plaza, Kowloon Bay,
Kowloon, Hong Kong
Market Capitalisation Our annual/interim reports and
(as at 31 December 2020) HK$ 267,943 million
accounts are also available online at
our corporate website.
SHARE INFORMATION
Stock Codes
Principal Place of Business and
Ordinary Shares
Registered Office
The Stock Exchange of Hong Kong 66
MTR Corporation Limited, incorporated and domiciled in Hong Kong.
Reuters 0066.HK
MTR Headquarters Building, Telford Plaza, Kowloon Bay, Kowloon,
Bloomberg 66 HK Equity
Hong Kong
Telephone: (852) 2993 2111
Facsimile: (852) 2798 8822

CORPORATE GOVERNANCE REPORT
Strong governance is important for the Company in • The Building Excellence Quality Working Group is
achieving its vision and fulfilling its purpose, and doing responsible for coordinating and reporting on the
so in a way that delivers long term sustainable growth implementation of these recommendations to the
for its stakeholders. This Report describes the corporate Building Excellence Board monthly and to the Capital
governance best practices that the Company has adopted Works Committee quarterly; and
and highlights how the Company has applied the
• In relation to the recommendations from the COI
principles of the Code Provisions set out in the Corporate
Reports, an external consultant has been appointed to
Governance Code (the “CG Code”) contained in Appendix
audit the implementation of the recommendations.
14 to the Listing Rules.
Acting through the Risk Committee and the Audit
Committee, the Board has mandated a review of the
CORPORATE GOVERNANCE internal control and risk management systems of the
PRACTICES Company for Hong Kong operations. Following the first
Corporate governance is the collective responsibility of phase review conducted in 2019, an external consultant,
the Members of the Board and the Board firmly believes Arthur D Little, was appointed to conduct a deep-dive
that good corporate governance is fundamental in assessment of the Company’s existing Three Lines of
ensuring the proper management of the Company in Defence framework, with a view to identifying any
the interests of all of its stakeholders. The Board actively gaps in the framework and making recommendations
seeks opportunities for continuous improvement in the for improvement. The results of this assessment were
area of corporate governance and takes prompt action presented to and endorsed by the Risk Committee
in responding to identified improvement opportunities. and the Audit Committee in late 2020. The next phase
According to the “2020 HKIoD Corporate Governance of the project will be to strengthen the Company’s
Scorecard” announced by The Hong Kong Institute of Second Line of Defence (in particular) in certain key risk
Directors in May 2020, the Company is one of the top 10 areas through the establishment of new technical and
listed companies with the highest Corporate Governance engineering Centres of Excellence and the adoption of a
Index scores. new assurance framework. A further update on progress
will be presented to the Risk Committee and the Audit
Following the unearthing of various issues arising from
Committee in mid-2021.
the construction of the Hung Hom Station Extension of
the Shatin to Central Link project in 2018, improvements In addition, a Board evaluation exercise, assisted by
have been identified for implementation progressively an external consultant, has been kicked off in the
starting from 2019. In March 2020, the Commission of third quarter of 2020, with the aim of ensuring that
Inquiry (“COI”) Final Report was issued and a progress the Company’s Board is fit for purpose to support the
summary is as follows: implementation of the new corporate strategy. The
exercise will review the composition of the Board, the
• Several working groups have been established to
structure, composition and authority of the Board
oversee the implementation of the recommendations
Committees, the information provided to the Board and
from the COI Interim and Final Reports (“COI Reports”);
the Board decision-making process and effectiveness.
• A cross-referencing check has been carried out
Recognising the increasing importance of Environmental,
between the recommendations from the COI Reports,
Social and Governance (“ESG”) issues as criteria for
the recommendations from Government appointed
assessing a company’s long term sustainability and
Expert Advisor Team and the recommendations
performance, the Company publishes a separate
coming out of the Company’s own work to enhance
Sustainability Report to keep its stakeholders abreast of
its project management system to identify common
the Company’s initiatives and performance in the ESG
themes;
arena on an annual basis.
98 MTR Corporation
The Company has followed the ESG Reporting Guide (“ESG Guide”) as set out in Appendix 27 to the Listing Rules and has
made reference to various international reporting standards and guidelines in the preparation of its Sustainability Report.
The Company substantially meets the new requirements under the ESG Guide, which will be implemented for financial
years commencing on or after 1 July 2020. The Company’s Sustainability Report is available on the websites of both the
Company (www.mtr.com.hk) and the Stock Exchange.
CORPORATE GOVERNANCE CODE COMPLIANCE

During the year ended 31 December 2020, the Company has complied with the CG Code. In the following corporate
governance areas, the Company’s practices have exceeded the relevant CG Code/Listing Rules requirements:
Overview
Corporate Governance Areas Details of Exceedance
Number of Independent The number of INEDs represents more than two-thirds of the Board, which exceeds
　Non-executive Directors (“INED”) the independence requirement under the Listing Rules
Number of Members of The Audit Committee consists of five INEDs, which exceeds the independence
　Audit Committee requirement under the Listing Rules

Number of Regular Board Meetings The Company holds seven Regular Board Meetings each year; in addition, there are
Special Board Meetings when required, which exceeds the requirement under the CG
Code
Notice of Regular Board Meetings The dates of Regular Board Meetings for the following year are usually fixed in the
third quarter of the prior year
Model Code Confirmation • Confirmation of Compliance with the Model Code is obtained from each Director
and Model Code Manager half-yearly
• An electronic platform has been established to give a one-stop access to the
relevant key processes to support compliance with the Model Code
Evaluation of the Effectiveness The Company reviews not only the effectiveness of the risk management system
　of Risk Management System of the Company and its subsidiaries, but also that of its key associates operating in
Mainland of China and overseas
The Company continues to monitor developments in the arena of corporate governance externally to ensure the
suitability and robustness of its corporate governance framework in light of the evolving business and regulatory
environment and to meet the expectations of stakeholders.
THE BOARD OF DIRECTORS Financials and Other Information
Overall Management
The overall management of the Company’s business is vested in the Board. Pursuant to the Articles of Association and
the “Protocol: Matters Reserved for the Board” (the “Protocol”) adopted by the Board, the Board has delegated the
day-to-day management of the Company’s business to the Executive Committee, and focuses its attention on matters
affecting the Company’s overall strategic policies, corporate governance, finances and shareholders. These include
financial statements, dividend policy, significant changes in accounting policy, annual operating budget, certain material
contracts, strategies for future growth, major financing arrangements and major investments, corporate governance
functions, risk management and internal control systems, treasury policies and fare structures.
The commencement of the new signalling system and gradual introduction of nine-car trains on the East Rail Line as part
of the Shatin to Central Link project, originally scheduled in mid-September 2020, was deferred to February 2021 due to
a signalling system issue which could have had a potential service impact. Overseen by the Board, which received and
reviewed the investigation reports in detail, investigations have been undertaken and improvement actions have been
identified for implementation.

Below is a diagram of the governance structure of the Company:
Board Committees Note 1

Board of Directors
Audit Capital Works

Committee Committee Executive
Committee Note 2
Corporate Nominations
Responsibility Committee
Committee
Business/Functional
Management Committees Note 3
Remuneration Risk
Committee Committee
Operations of
the Group
Notes:
1 All Board Committees are provided with sufficient resources to discharge their duties and can seek independent professional advice (as and when required) at the
Company’s expense, to perform their responsibilities. The Terms of Reference of each Committee are available on the websites of both the Company (www.mtr.com.hk)
and the Stock Exchange.
2 The Executive Committee is delegated by the Board to handle the day-to-day management of the Company’s business pursuant to the Articles of Association and the
Protocol; and is chaired by the Chief Executive Officer (“CEO”) and made up of nine other Members of the Executive Directorate.
3 Key Business/Functional Management Committees are listed out on pages 115 to 116 of this Annual Report.
Composition of the Board

A list of Members of the Board and the Executive Directorate and their roles and functions is available on the respective
websites of the Company (www.mtr.com.hk) and the Stock Exchange. Biographical details of each of the Members of the
Board and the Executive Directorate are set out on pages 138 to 150 of this Annual Report.
As at the date of this Report, the Board has 20 Members, made up of 14 INEDs, five Non-executive Directors (“NEDs”) and
one Executive Director. The number of INEDs currently comprises more than two-thirds of the Company’s Board, which is
well above the Listing Rules requirement of having one-third of a board made up of INEDs. This structure ensures that the
Board comprises a majority of independent members, which is conducive to maintaining an independent and objective
decision-making process.
100 MTR Corporation

Government, through The Financial Secretary Incorporated, held approximately 74.98% of the issued shares of the
Company as at 31 December 2020, and is a substantial shareholder of the Company. The Chief Executive of the HKSAR, in
the exercise of her right under Section 8 of the MTR Ordinance, has appointed three persons as “additional directors” of
the Company (the “Additional Directors”). They are:
• The office of the Secretary for Transport and Housing (currently held by Mr Frank Chan Fan);
• The office of the Permanent Secretary for Development (Works) (currently held by Mr Lam Sai-hung); and
• The office of the Commissioner for Transport (currently held by Miss Rosanna Law Shuk-pui).
Overview
The Additional Directors are all NEDs and are treated for all purposes (other than the requirement to retire by rotation
according to the Articles of Association) in the same way as other Directors and are, therefore, subject to the usual
common law duties of directors, including the requirement to act in the best interests of the Company.
Mr Christopher Hui Ching-yu, the Secretary for Financial Services and the Treasury, is another NED of the Company.
Coming from diverse business and professional backgrounds, Members of the Board actively bring their valuable
experience to the Board for promoting the best interests of the Company and its shareholders. In addition, the INEDs also

contribute to ensuring that the interests of all shareholders of the Company are taken into account by the Board and that
relevant issues are subject to objective and dispassionate consideration by the Board.
Chairman and CEO

The posts of the Chairman and the CEO are distinct and separate. Their respective roles and responsibilities are set
out below:
Chairman (Non-executive Director) CEO (Executive Director)
Chairing and managing the operations of Head of the Executive Directorate;
the Board;
Chairman of the Executive Committee;
Monitoring the performance of the CEO and
Responsible to the Board for managing the
other Members of the Executive Directorate;
business of the Company; and
Making sure that adequate information about
Responsible for performing a bridging
the Company’s business is provided to the
function between the Board and the
Board on a timely basis;
Executive Directorate.
Providing leadership for the Board and
promoting a culture of openness;
Ensuring views on all issues are exchanged by

all Members of the Board in a timely manner;
Encouraging Members of the Board to make a

full and effective contribution to the discussion
at Board Meetings; and
Establishing good corporate governance

practices and procedures.

Board Committees • Nominating and recommending to the Board,

The Board discharges some of its responsibilities through candidates for filling the positions of CEO, Finance
delegation, with appropriate oversight, to respective Director and Chief Operating Officer (provided that the
Board Committees. The Board Committee memberships Chief Operating Officer position exists).
and the attendance record of each Member of the Board During the year, the Committee conducted reviews and
in 2020 are set out on pages 112 to 113 of this Annual made corresponding recommendations to the Board in
Report. respect of the following matters:
The duties and work performed by the Audit Committee, • Annual review of the structure, size and composition
Risk Committee, Capital Works Committee and of the Board and a list of desirable skills/experience/
Remuneration Committee during the year are set out in perspectives for the Board;
their respective reports in this Annual Report:
• Annual assessment of the independence of each INED;
• “Audit Committee Report” on pages 123 to 125;
• Re-election of Members of the Board retiring at the
• “Risk Committee Report” on pages 130 to 131; Company’s annual general meeting held on 20 May
• “Capital Works Committee Report” on page 132; and 2020 (“2020 AGM”); and
• “Remuneration Committee Report” on pages 133 • Proposed nomination of new Members of the Board
to 137. (i) for appointment by the Board during 2020; and
(ii) for election by shareholders at the 2020 AGM.
Nominations Committee
As at the date of this Report, the Nominations
Principal responsibilities: Committee has conducted an annual review of (i) the
• Reviewing the structure, size and composition current structure, size and composition of the Board
(including the perspectives, skills, diversity, knowledge and considered the same is appropriate in light of
and experience) of the Board at least annually and the Company’s strategy and business needs; (ii) the
making recommendations on any proposed changes Company’s Board Diversity Policy (the “BD Policy”); and
to the Board to complement the Company’s corporate (iii) the list of skillsets of the Board. The Nominations
strategy; Committee has also assessed that the Board (1) currently
possesses a balanced mix of skills, experience and
• Identifying individuals suitably qualified to become
diversity of perspectives, (2) is in line with the Company’s
Members of the Board and putting forward
BD Policy, and (3) is appropriate for continuing to support
nominations or recommendations to the Board for
the execution of the Company’s business strategies in
proposed appointments to the Board;
an efficient and effective manner. In addition, subject
• Assessing the independence of INEDs and, in case a to the election of a new INED by shareholders at the
proposed director will be holding his/her seventh (or forthcoming Annual General Meeting, he will hold
more) listed company directorship, his/her ability to cross-directorships with two NEDs of the Company and
devote sufficient time to Board matters; the Airport Authority. The Nominations Committee has
• Making recommendations to the Board on the assessed their cross-directorships and considered that
appointment or re-appointment of Members of the this should not have an impact on the independence of
Board and succession planning for Members of the such new INED with respect to his directorship with the
Board; and Company since all three of them are not directly involved
in the day-to-day operations of the Airport Authority.
102 MTR Corporation

Corporate Responsibility Committee • Reviewed and recommended the 2019 Sustainability
Principal responsibilities: Report to the Board for approval;
• Overseeing the Company’s stakeholder engagement • Considered the Company’s performance on various
and external communication strategies; local and international sustainability indices; and
• Recommending the Corporate Responsibility Policy to • Endorsed the commencement of a Carbon

the Board for approval; Reduction Study.
• Monitoring and overseeing the implementation of Company Secretary

the Company’s Corporate Responsibility Policy and
Overview
Ms Gillian Elizabeth Meller, being the Legal and
related initiatives;
Governance Director and a Member of the Executive
• Identifying emerging corporate responsibility issues Directorate, reports to the CEO. Her role as the Company
arising from external trends; Secretary includes:
• Reviewing the Company’s annual Sustainability Report • Providing access to advice and services for Members of
and recommending approval by the Board; the Board;

• Reviewing the Company’s environmental and social • Ensuring the correct Board procedures are followed;
performance; and
• Advising the Board on all corporate governance matters;
• Providing updates to the Board on matters falling
• Arranging for Members of the Board, their Alternate
within the Committee’s remit as required.
Directors and Members of the Executive Directorate,
Please also refer to the “Corporate Responsibility” section upon their appointment, to receive a comprehensive,
(pages 74 to 79) of this Annual Report. formal and tailored induction programme on key areas
of business operations and practices of the Company,
Work performed during the year:
as well as the general and specific duties of directors
• Monitored the advancement of the New Social under general law (common law and legislation) and
Objectives of Social Inclusion, Greenhouse Gas the Listing Rules;
Emissions and Advancement & Opportunities;
• Recommending Members of the Board, their Alternate
• Monitored the progress of various youth, elderly and Directors and Members of the Executive Directorate to
district-level community engagement and investment attend relevant seminars and courses; and
programmes;
• Arranging for training on relevant new or amended
• Reviewed a series of special measures and partnering legislation or other regulations to be provided at
initiatives in response to COVID-19 to help the Board meetings.
community tide over the challenges amidst the
In 2020, Ms Meller undertook over 15 hours of
pandemic;
professional training to update her skills and knowledge.
• Reviewed the development and strategic way
forward for the “More Time Reaching Community”
Volunteering Scheme;

Appointment, Re-election and Removal The Company has a service contract with each of the
of Members of the Board NEDs (with the exception of the Additional Directors) and
A person may be appointed as a Member of the Board at the INEDs, specifying the terms of his/her continuous
any time either by: appointment as a NED or an INED and as the chairman
or a member of the relevant Board Committee(s), for a
• the shareholders in general meeting in accordance period not exceeding three years.
with the “Appointment Procedure for Members of
the Board of the Company”, which is available on the Nomination Policy
website of the Company (www.mtr.com.hk); or A Nomination Policy (the “Nomination Policy”),
• the Board upon the recommendation of the documenting the procedures and practices that have
Nominations Committee of the Company; or been adopted by the Company, is posted on the
Company’s website (www.mtr.com.hk).
• the Chief Executive of the HKSAR in the case of the
Additional Directors. The Nomination Policy sets out the process and
procedures for governing the nomination of Members
Members of the Board who are appointed by the Board
of the Board applicable to both new appointments and
during a year must retire at the first annual general
re-appointments, except for appointments made by the
meeting after their appointment and are eligible for
Chief Executive of the HKSAR pursuant to Section 8 of the
election at that meeting.
MTR Ordinance and nomination by shareholders of the
Except for the Additional Directors, all other Members Company in accordance with the Articles of Association.
of the Board are required to retire by rotation. At each
The Board has delegated to the Nominations Committee
annual general meeting of the Company, Members of the
the authority to identify and assess potential candidates
Board who were last elected or re-elected at the annual
for appointment to the Board through different means
general meeting which was held in the third calendar year
and channels, including recommendations from Members
prior to the annual general meeting in question, are those
of the Board, use of external search firms, and any other
who will retire by rotation.
means or channels that it deems appropriate.
The Additional Directors may not be removed from office
except by the Chief Executive of the HKSAR and are not
subject to any requirement to retire by rotation.
104 MTR Corporation

Nomination Procedures
The following diagram demonstrates the nomination procedures for new appointment and re-election of a Member of
the Board:
Nominations Committee
New Appointment Re-election
Request the candidate to provide his/her Review the profile of the Member of the
biographical information and other information Board who has offered himself/herself for
Overview
deemed necessary re-appointment to consider his/her suitability
Review and take reasonable steps to verify the in light of the strategy of the Company as well
information obtained from the candidate and seek as the structure, size and composition of the
clarification, where required Board at that time
Invite the candidate to meet with the Nominations Make recommendation for the Board’s
Committee members, at their discretion, to assist consideration
them in their consideration of the proposed
nomination or recommendation

Submit nomination proposal to the Board
for consideration and approval or to make
recommendation to the shareholders for approval
Board
NEW
New Re-
Appointment election
Consider recommendation Financials and Other Information

from the Nominations Consider recommendation from the Nominations Committee and
Committee and approve make recommendation to the shareholders
the appointment during for election (re-election) of the Member of the Board
the year
Shareholders
Approve the election and/or re-election of new/existing Member
of the Board at the Company’s annual general meeting

Selection Parameters Board Diversity

In evaluating a proposed candidate, including a Member The Company has posted its BD Policy on the Company’s
of the Board eligible for re-appointment, the Nominations website (www.mtr.com.hk). The BD Policy sets out a
Committee will consider the following factors (which are clear objective and provides that the Company should
by no means exhaustive): endeavour to ensure that its Members of the Board have
(i) the strategy of the Company; the appropriate balance of skills, experience and diversity
of perspectives that are required to support the execution
(ii) the structure, size, composition and needs of the of its business strategy and in order for the Board to be
Board and its respective Board Committees at the effective. The Company is conscious of maintaining a
time, taking into account succession planning, Board made up with INEDs as the majority, together with
where appropriate; an appropriate level of female Members on the Board.
(iii) the required skills, which should be complementary While conscious efforts are being taken by the Company
to those of the existing Members of the Board; to fulfil its pledges, all appointments are ultimately made
on a merit basis taking into account available and suitable
(iv) the BD Policy of the Company as amended by the
candidates.
Board from time to time;
The Board reviews the BD Policy on a regular basis to
(v) any information obtained through third party
ensure its continued effectiveness.
references or background checks;
The BD Policy and the list of desirable skills/experience/
(vi) any other factors that may be used as reference in
perspectives Members of the Board were taken into
assessing the suitability of a proposed candidate,
account by the Nominations Committee and the Board in
including but not limited to the candidate’s
considering the following new appointments during the
reputation for integrity, accomplishments and likely
year:
commitment in terms of time and interest;
(i) Dr Bunny Chan Chung-bun as an INED; and
(vii) if a proposed candidate will be holding his/her
seventh (or more) listed company directorship, (ii) Mr Christopher Hui Ching-yu as a NED.
the candidate’s ability to devote sufficient time to The Committee and the Board formed the view
the Board; and that, with their different backgrounds and expertise,
(viii) the independence of a candidate proposed to be respective extensive experience and active involvement
appointed as an INED, in particular by reference to in community service, including youth development,
the independence requirements under the Listing social welfare and district council affairs, each of the
Rules. new Members of the Board mentioned above would
be a valuable addition to the Board and would further
The Nominations Committee is vested with discretion to
enrich the spectrum of skills, experience and diversity
take into account such other factors that it may consider
of perspectives of the Board, thereby enhancing the
appropriate.
diversity and effectiveness of the Board.
106 MTR Corporation

Gender
Male (15) Female (5)
Designation
INED (14) NED (5) ED (1)
Age Group
Overview
≤50 (1) 50-54 (2) 55-59 (2) 60-64 (3) 65-69 (8) ≥70 (4)
Number of Years
as Board Members
(Years)
0-1 (7) 2-3 (6) 4-5 (1) ≥6 (6)

Outside Directorships
(Number of listed
companies)
0 (12) 1-2 (5) 3-4 (3)
Statutory Confirmations Company in a timely manner. In relation to the two

For the year ended 31 December 2020, the Company has Members of the Board having a common directorship as
received an annual confirmation from each INED about INEDs in the Company and another company listed on
his/her independence and, where applicable, the interests the Stock Exchange, the Nominations Committee has
of his/her immediate family member(s) (as defined assessed during the year that the said cross-directorship
under the Listing Rules). The Nominations Committee should not undermine their independence.
has reviewed the said confirmations and assessed the Before each regular Board meeting, the Company
independence of the INEDs, and continues to consider reminds each Member of the Board to update his/her
each of them to be independent. “Declaration of Other Directorships, Major Appointments
Each Member of the Board ensures that he/she can give and Interests” (the “Declaration”). The Declaration of
sufficient time and attention to the affairs of the Company each Alternate Director is sent to him/her for update on
and contribute to the development of the Company’s a quarterly basis. In addition, each Member of the Board
strategy and policies through independent, constructive and each Alternate Director is required to confirm his/her
and informed comments. other directorships, major appointments and interests to
the Company twice a year.
Regarding disclosure of the number and nature of offices
held by Members of the Board in public companies Save as disclosed in this Annual Report, none of the
or organisations and other significant commitments, Members of the Board or the Executive Directorate has
as well as their identity and the time involved (the any relationship (including financial, business, family or
“Commitments”), to the Company, all Members of the other material or relevant relationships) with another
Board have disclosed their Commitments to the

Member of the Board or the Executive Directorate. In The review benchmarks the amount of cover against
addition, none of the Members of the Board holds seven other similar companies and considers whether separate
(or more) directorships in listed companies (including cover will be required for Members of the Executive
the Company) or holds any cross-directorships or has Directorate or Members of the Board. The conclusion of
significant links with other Members of the Board the review in year 2020 was that the level of cover was
through involvements in other companies or bodies as adequate and, given this, together with the indemnity
at 31 December 2020. provided by the Company to Members of the Board, the
broad policy wording and the financial strength of the
MODEL CODE FOR SECURITIES insurance panel, no additional cover was required.
TRANSACTIONS BY DIRECTORS
CORPORATE GOVERNANCE
OF LISTED ISSUERS
The Company has adopted the Model Code set out in
FUNCTIONS REVIEW
Appendix 10 to the Listing Rules (the “Model Code”). After The Board conducted an annual review of its Corporate
having made specific enquiry, the Company confirms Governance duties in accordance with its Terms of
that all Members of the Board and (where applicable) Reference on Corporate Governance Functions and
their Alternate Directors and all Members of the Executive the latest review was done in March 2021. Below is a
Directorate have complied with the Model Code summary of the work performed during the year ended
throughout the year. 31 December 2020 and up to the date of the Report:
Senior managers, other nominated managers and staff • Reviewed the Company’s policies and practices
who, because of their office in the Company, may be on corporate governance, including the corporate
in possession of Inside Information (which term shall governance framework, the BD Policy and the
bear the same meaning as in the Securities and Futures Nomination Policy;
Ordinance (Cap. 571 of the Laws of Hong Kong) (the • Reviewed and monitored the training and continuous
“SFO”)) of the Company (collectively the “Model Code professional development of Members of the Board
Managers”), have also been requested to comply with the and senior management;
provisions of the Model Code.
• Reviewed and monitored the Company’s policies
The Company launched a Model Code Managers and practices on compliance with legal and
Management System in late 2019, which provides an regulatory requirements;
electronic platform to give a one-stop access to the
• Developed, reviewed and monitored the Code of
relevant key processes to support compliance with the
Conduct and Directors’ Manual; and
Model Code and to enhance effectiveness in monitoring
such compliance. Periodic training is also required to be • Reviewed the Company’s compliance with the
completed by Model Code Managers. CG Code.
The Board considers that, overall, the Company’s

DIRECTORS’ INSURANCE Corporate Governance Functions are adequate and
As permitted under the Articles of Association, it has appropriate for the Company in light of its current
been the practice of the Company to arrange Directors’ corporate strategy. They will be kept under review in light
and Officers’ (“D&O”) Liability Insurance for which of the changing legal and regulatory environment and
Members of the Board and officers of the Company do any changes to the Company’s business.
not have to bear any excess. To ensure sufficient cover The Terms of Reference on Corporate Governance
is provided, the Company undertakes an annual review Functions are available on the websites of the Company
of the Company’s D&O insurance policy in light of recent (www.mtr.com.hk) and the Stock Exchange.
trends in the insurance market and other relevant factors.
108 MTR Corporation

BOARD PROCEEDINGS At regular Board meetings, Members of the Executive
Directorate together with senior managers report to the
The Board generally meets in person regularly. In light of
Board on their respective areas of business.
the outbreak of Coronavirus Disease 2019 (“COVID-19”)
in 2020, electronic means have also been provided to The CEO Report, provided to the Board on a monthly
Members of the Board to facilitate them to participate basis, covers the overall strategies, principal issues and
in meetings virtually, which is permissible under the key events of the Company for the relevant month and
Company’s Articles of Association, while at the same time provides key information in areas such as the Group’s
reducing face-to-face contact. The same arrangements safety performance in different business sectors, financial
also applied to the Executive Committee meetings and activities, contingent liabilities, human resources
Overview
meetings of other Board Committees. The Company’s developments and new railway projects, as well as a look
introduction of an electronic meeting solution for Board ahead to key issues or events in the following three to six
meetings and Executive Committee meetings in 2017, months. This CEO Report together with the discussions at
which has subsequently been expanded to meetings of Board meetings, ensures that Members of the Board have
other Board Committees, has also enabled all Members an overall understanding of the Company’s business and
of the Board, Executive Committee and other Board other key information about the Company, and provides
Committees to access meeting documents and join up-to-date information to enable them to make informed

virtual meetings remotely in a secure, efficient and decisions for the benefit of the Company.
convenient manner.
All Members of the Board have full and timely access MATERIAL INTERESTS
to relevant information and may take independent AND VOTING
professional advice at the Company’s expense, All Members of the Board and the Executive Directorate
if necessary, in accordance with the approved are required to comply with their common law duty to act
procedures. Members of the Board also have full access in the best interests of the Company and have particular
to Members of the Executive Directorate as and when regard to the interest of the Company’s shareholders as
they consider necessary.
a whole. To this end, all of them are required to declare
The draft agenda for Board meetings is prepared by the nature and extent of their interests, if any, in any
the Company Secretary and approved by the Chairman contract, transaction, arrangement or other proposal to
of the Company. Members of the Board are advised to be considered by the Board at Board meetings.
inform the Chairman or the Company Secretary not Unless specifically permitted by the Articles of
less than one week before the relevant Board meeting Association, a Member of the Board cannot cast a vote on
if they wish to include a matter in the agenda of the any contract, transaction, arrangement or any other kind
meeting. The agenda together with Board Papers are of proposal in which he/she has an interest which he/ Financials and Other Information
usually sent at least three days before the intended she knows is material. For this purpose, the interests of
date of the Board meeting. a person who is connected with a Member of the Board
The Board meeting dates for the following year are (including any of his/her associates) are treated as the
usually fixed by the Company Secretary with the interests of the Member of the Board himself/herself.
agreement of the Chairman, before communicating with Interests purely as a result of an interest in the Company’s
other Members of the Board, in the third quarter of shares, debentures or other securities are disregarded. A
each year. Member of the Board may not be included in the quorum
for such part of a meeting that relates to a resolution he

or she is not allowed to vote on but he or she shall be Regular Meetings

included in the quorum for all other parts of that meeting. At each Regular Meeting, the Board reviewed, discussed
This reduces potential conflicts which might otherwise and, where appropriate, approved matters relating to
arise between the Company’s business and an individual the Company’s different businesses and financial and
Member of the Board’s other interests or appointments. operational performance.
If a conflict arises between the interests of the Company In addition, other key matters discussed at Board meetings
and those of Government, each Government-nominated held in 2020 included:
Director and any Director holding a senior Government
position, is not included in the quorum for that part of • Strategy:
the meeting which relates to the contract, transaction, – Receipt of updates on the development of the new
arrangement or other proposal being considered by the Corporate Strategy and High-level Transformation
Board and in relation to which the conflict exists and is Planning Project;
not allowed to vote on the related resolution.
• Corporate Governance matters, including:
There are a number of contractual arrangements that
– Annual review of the structure, size and
have been entered into between the Company and
composition of the Board and its corporate
Government (and/or its related entities), some of
governance functions for 2019; annual assessment
which are continuing in nature. As Government is a
of (i) the independence of the INEDs; and (ii) the
substantial shareholder of the Company, such contractual
effectiveness of the Company’s risk management
arrangements are connected transactions (and in
and internal control systems for 2019;
some cases continuing connected transactions) for
the purposes of the Listing Rules. The sections headed – Recommendation of the appointment of
“Connected Transactions” and “Continuing Connected new Members of the Board and re-election of
Transactions” (pages 161 to 182) of this Annual Report retiring Members of the Board for approval by
explain how, in accordance with the Listing Rules, these shareholders at the 2020 AGM;
transactions have been treated. – Approval of changes to the composition of
Matters to be decided at Board meetings are decided by Board Committees and the annual update to the
a majority of votes from Members of the Board allowed to Directors’ Manual;
vote, although the usual practice is that decisions reflect – Receipt and consideration of reports from
the consensus of the Board. Management on key matters such as safety, risk
management and sustainability; and
BOARD MEETINGS – Receipt of shareholder analysis and investors’
The Board held 15 meetings in 2020 (seven Regular feedback;
Meetings and eight Special Meetings), well exceeding the
• Operations:
requirement of the CG Code which requires every listed
issuer to hold board meetings at least four times a year. – Review of 2019 train service performance;
In addition and as required by the Listing Rules, the – Receipt of updates on the Hung Hom derailment
Chairman has met with INEDs only without the presence incident that happened in 2019;
of other Members of the Board during the year, at which
– Contract award for asset replacement project; and
matters surrounding the functioning of the Board and
the Management team, and the strategic direction and – Receipt of updates on a signalling replacement
organisational matters of the Company were discussed. project and approval of funding for the said project;
110 MTR Corporation

• Consultancy: – Receipt of updates on the financial and other
impacts of COVID-19 and mitigation measures;
– Approval of the extension and renewal of the
maintenance contract of the Automated People – Approval of the renewal of the US$7 Billion Debt
Mover System with Airport Authority; Issuance Programme; and
• Projects: – Approval of the 2021 Budget and Longer Term

Forecast;
– Receipt of updates on the Shatin to Central Link
project and related matters; • Human Resources:
– Receipt of update on the proposal and approval of – Approval of 2020 Annual Pay Review.
Overview
budget for a consultancy for the Tung Chung Line
The minutes of Board meetings are prepared by the
Extension project at Lantau North; and
Company Secretary or her delegate with details of the
– Receipt of updates/review/approval of technical matters considered by the Board and decisions reached,
and financial proposals/funding relating to including any concerns raised by Members of the Board
proposed railway lines under the Railway or dissenting views expressed. The draft minutes are
Development Strategy 2014 (“RDS-2014”); circulated to all Members of the Board for their comments

within a reasonable time after the meeting. The approval
• Mainland of China and International Businesses:
procedure is that the Board formally adopts the draft
– Receipt of updates on Macau, Mainland of China minutes at the subsequent meeting. If Members of the
and International Businesses; and Board have any comments on the draft minutes, they will
– Approval of contracts/tender submissions for discuss it at that meeting and any agreed changes will be
projects in the Mainland of China and overseas; reflected in the formal minutes of the relevant meeting.
Minutes of Board meetings are kept by the Company
• Property:
Secretary and are open for inspection by all Members of
– Approval of tenders arrangement for property the Board at the Company’s registered office.
development in Hong Kong; and
Special Meetings
– Receipt of update on a property development
During 2020, a total of eight Special Meetings were held
project in Hong Kong;
to consider various matters including the acquisition of
• Commercial and Marketing: interests in real estate properties in Hong Kong, the Shatin
– Approval of the Company’s fares proposal for 2020 to Central Link project, the handling of the outbreak
under the Fare Adjustment Mechanism and its of COVID-19 and its financial impact on the Company,
implementation; and COVID-19 relief measures for passengers, the Tung Chung
Line Extension project at Lantau North under RDS-2014, Financials and Other Information
– Approval of renewal of a franchise agreement for
and investment projects in the Mainland of China.
station commercial space;
The attendance record of each Member of the Board (and
• Financial:
each Member of the Executive Directorate) during the
– Approval of the 2019 Annual and the 2020 Interim year is set out on pages 112 to 113 of this Annual Report.
Report and Accounts;

Members of the Board and the Executive Directorate

Attendance of Meetings and Training in 2020
Attendance
Board Meetings Board Committees Meetings 2020 AGM TrainingΩ
RM SM AC NC RC CWC RiskC CRC
Total Number of Meetings 7 8 4 2 4 4 4 2 1

Members of the Board
Non-executive Directors ("NED")
Dr Rex Auyeung Pak-kuen (Chairman) 7/7 8/8 2/2 4/4 2/2C 1/1 √
Christopher Hui Ching-yu (1)
(Secretary for Financial Services and the Treasury) 4/4 1/2 N/A 1/3 N/A* √
Secretary for Transport and Housing
(Frank Chan Fan)(2) 4/7 3/8 2/2 2/4 N/A# √
Permanent Secretary for Development (Works)
(Lam Sai-hung)(3) 5/7 4/8 4/4 3/4 N/A# √
Commissioner for Transport
(Rosanna Law Shuk-pui)(4) 2/2 1/1 1/1 1/1 N/A* √
Independent Non-executive Directors ("INED")
Andrew Clifford Winawer Brandler 7/7 5/8 3/4 4/4C 1/1 √
Dr Bunny Chan Chung-bun (5)
3/4 2/2 1/1 N/A* √
Walter Chan Kar-lok 7/7 6/8 2/2 2/2 N/A# √
Dr Pamela Chan Wong Shui 7/7 8/8 2/2C 2/2 1/1 √
Dr Dorothy Chan Yuen Tak-fai 7/7 7/8 4/4C 4/4 1/1 √
Cheng Yan-kee(6) 7/7 8/8 4/4 4/4C N/A# √
Dr Anthony Chow Wing-kin 7/7 8/8 4/4 2/4 N/A# √
Dr Eddy Fong Ching 7/7 5/8 4/4C 2/2 1/1 √
James Kwan Yuk-choi 7/7 7/8 3/4 4/4 N/A# √
Rose Lee Wai-mun 7/7 8/8 3/4 3/4 N/A# √
Lucia Li Li Ka-lai(7) 7/7 6/8 4/4 1/1 1/1 N/A# √
Jimmy Ng Wing-ka 7/7 7/8 4/4 2/2 N/A# √
Benjamin Tang Kwok-bun 6/7 7/8 4/4 2/4 N/A# √
Johannes Zhou Yuan 6/7 1/8 2/4 2/4 N/A# √
Executive Director ("ED")
Dr Jacob Kam Chak-pui (CEO) 7/7 8/8 2/2 1/1 √
Members of the Executive Directorate & the Executive Committee
Dr Jacob Kam Chak-pui (CEO) 7/7 8/8 2/2 1/1 √
Adi Lau Tin-shing(8) 1/1 √
Roger Francis Bayliss(9) 1/1 √
Margaret Cheng Wai-ching 2/2 N/A# √
Linda Choy Siu-min(10) 1/1 1/1 √
Dr Peter Ronald Ewen(11) N/A# √
Herbert Hui Leung-wah 1/1 √
Dr Tony Lee Kar-yun(12) N/A# √
Gillian Elizabeth Meller(13) 1/1 √
David Tang Chi-fai(14) 1/1 √
Jeny Yeung Mei-chun 1/1 √
Members departed during 2020
NED
James Henry Lau Jr(15)
(Secretary for Financial Services and the Treasury) 1/3 2/6 1/2 0/1 0/1 x
Commissioner for Transport
(Mable Chan)(16) 4/4 2/7 2/3 2/3 N/A# √
INED
Dr Allan Wong Chi-yun(17) 2/3 5/6 1/1 1/1C 1/1 x
Member of the Executive Directorate & the Executive Committee
Linda So Ka-pik(18) N/A √
112 MTR Corporation

Legend:
Board Meetings Board Committee Meetings 2020 AGM – Annual General Meeting of the Company held on 20 May 2020
RM – Regular Meeting(s) AC – Audit Committee
SM – Special Meeting(s) NC – Nominations Committee N/A – Not applicable
RC – Remuneration Committee * – appointed after the conclusion of 2020 AGM
CWC – Capital Works Committee # – not invited to attend 2020 AGM in person due to maintenance of social
RiskC – Risk Committee distancing during COVID–19
CRC – Corporate Responsibility Committee
C – Chairman of the committee
Ω – This includes (i) continuous professional development through attending
expert briefings/seminars/conferences relevant to the Company’s business or
directors' duties arranged by the Company or external organisations, and reading
regulatory/corporate governance or industry related updates; and (ii) induction and
Overview
familiarisation programmes attended by newly appointed Directors
Notes:
1. Mr Christopher Hui Ching-yu (Secretary for Financial Services and the Treasury) was appointed by the Board as a NED and a member of each of the NC and the RC of the
Company, all with effect from 1 June 2020.
The alternate director of Mr Christopher Hui Ching-yu, acting on his behalf, attended one SM and two RC meetings. Mr Hui was not present at a portion of a Board Meeting
at which the South Island Line (West) project was discussed for avoidance of any actual or perceived conflict of interest.
2. The alternate directors of the Secretary for Transport and Housing (Mr Frank Chan Fan), acting on his behalf, attended three RM, two SM and two RC meetings. Mr Chan
and his alternate directors were not present at the relevant Board Meetings or a portion thereof at which the Shatin to Central Link project and related matters, the Tung

Chung Line Extension project at Lantau North, the Hung Shui Kiu Station submission, the Northern Link project and the South Island Line (West) project were discussed for
avoidance of any actual or perceived conflict of interest.
3. Permanent Secretary for Development (Works) (Mr Lam Sai-hung) was not present at the relevant Board Meetings or a portion thereof at which the Shatin to Central Link
project and related matters, the Tung Chung Line Extension project at Lantau North, the Hung Shui Kiu Station submission, the Northern Link project and the South Island
Line (West) project were discussed for avoidance of any actual or perceived conflict of interest.
4. Miss Rosanna Law Shuk-pui became a NED of the Company with effect from 9 September 2020 when she took up the post of Commissioner for Transport (the “C for T”).
She also became a member of each of the AC and the RiskC of the Company, both with effect from the same date. Miss Law was not present at a portion of a Board
Meeting at which the South Island Line (West) project was discussed for avoidance of any actual or perceived conflict of interest.
5. Dr Bunny Chan Chung-bun was elected as a Board Member and became an INED of the Company with effect from the conclusion of the 2020 AGM, and was appointed by
the Board as a member of the CRC of the Company with effect from the same date.
6. Mr Cheng Yan-kee was appointed by the Board as the chairman of the CWC of the Company with effect from the conclusion of the 2020 AGM.
7. Mrs Lucia Li Li Ka-lai was appointed by the Board as a member of the NC of the Company and ceased to be a member of the CRC of the Company, both with effect from
the conclusion of the 2020 AGM.
8. Mr Adi Lau Tin-shing was appointed as the Managing Director – Operations and Mainland Business and ceased to be the Operations Director of the Company, both with
effect from 1 January 2020.
9. Mr Roger Francis Bayliss was appointed as the Capital Works Director and ceased to be the Projects Director of the Company, both with effect from 22 February 2021.
10. Ms Linda Choy Siu-min was appointed as the Corporate Affairs Director and became a Member of the Executive Directorate and a member of the CRC of the Company, all
with effect from 2 March 2020.
11. Following the retirement of Dr Peter Ronald Ewen immediately after 21 February 2021, Dr Ewen ceased to be the Engineering Director and a Member of the Executive
Directorate of the Company, both with effect from 22 February 2021.
12. Dr Tony Lee Kar-yun was appointed as the Operations Director and became a Member of the Executive Directorate of the Company, both with effect from 1 January 2020.
13. Ms Gillian Elizabeth Meller was appointed as the Legal and Governance Director and ceased to be the Legal and European Business Director of the Company, both with
effect from 22 February 2021.
14. Mr David Tang Chi-fai was appointed as the Property and International Business Director of the Company with effect from 22 February 2021; before then Mr Tang was
appointed as the Property and Australian Business Director and ceased to be the Property Director of the Company, both with effect from 1 October 2020.
15. Mr James Henry Lau Jr resigned and ceased to be a NED and a member of each of the NC and the RC of the Company, all with effect from 1 June 2020.
The alternate directors of Mr James Henry Lau Jr, acting on his behalf, attended two RM, one SM, one NC meeting, one RC meeting and the 2020 AGM. Mr Lau and his
alternate director were not present at the relevant Board Meetings or a portion thereof at which the Shatin to Central Link project and related matters, the Tung Chung
Line Extension project at Lantau North, the Hung Shui Kiu Station submission and the Northern Link project were discussed for avoidance of any actual or perceived
conflict of interest.
16. Ms Mable Chan ceased to hold the post of the C for T with effect from 1 August 2020 and, as a result, ceased to be a NED and a member of each of the AC and the RiskC of
the Company, all with effect from the same date.
The alternate director of the C for T (Ms Mable Chan), acting on her behalf, attended two SM, one AC meeting and one RiskC meeting. Ms Chan and her alternate director
were not present at the relevant Board Meetings or a portion thereof at which the Shatin to Central Link project and related matters, the Tung Chung Line Extension
project at Lantau North, the Hung Shui Kiu Station submission and the Northern Link project were discussed for avoidance of any actual or perceived conflict of interest.
Before the post of the C for T was taken up by Miss Rosanna Law, the alternate director of the C for T attended one RM.
17. Dr Allan Wong Chi-yun retired as an INED and ceased to be the chairman of the CWC and a member of the NC of the Company, all with effect from the conclusion of the
2020 AGM.
18. Ms Linda So Ka-pik resigned as the Corporate Affairs Director and ceased to be a Member of the Executive Directorate and a member of the CRC of the Company, all with
effect from 16 January 2020.

INDUCTION PROGRAMME AND Board Visit

OTHER TRAINING In October 2020, certain Members of the Board and the
Executive Directorate visited The LOHAS, Malibu (LOHAS
Induction Programme Park Package 5) and the Public Transport Interchange in
On appointment, each new Member of the Board LOHAS Park to understand the Company’s latest property
(including Government-nominated Directors), Alternate development in LOHAS Park.
Director and Member of the Executive Directorate is
Training
given a comprehensive, formal and tailored induction
programme which covers: Materials on the subject of corporate governance and
e-learning provided by the Stock Exchange are provided/
• the roles of a director from the strategic, planning and notified to Members of the Board, Alternate Directors
management perspectives, as well as the essence of and Members of the Executive Directorate from time to
corporate governance and the trends in these areas; time to keep them abreast of the latest developments on
and this front.
• the general and specific duties of a director under Each Member of the Board and the Executive Directorate
general law (common law and legislation) and the has also provided to the Company a record of the training
Listing Rules. he/she has received during the year, which is set out on
In addition to the above, a Familiarisation Programme to pages 112 to 113 of this Annual Report.
understand the key areas of the Company’s business and
Senior Executives
operations is also provided.
A comprehensive and tailored training programme
All Members of the Board, Alternate Directors and has been developed for the Senior Executives of the
Members of the Executive Directorate are also given a Company. This programme consists of a series of
Directors’ Manual on their appointment which sets out, workshops, seminars, e-learning and benchmarking visits
amongst other things, directors’ roles and responsibilities, which are organised on an on-going basis.
their key obligations from both a statutory and a
regulatory perspective, and the Terms of Reference To support the enhancement of the business acumen,
of the Board on its Corporate Governance Functions leadership and management skills of the Senior
and of its Board Committees. The Directors’ Manual Executives, professors from renowned business schools
is updated regularly to keep the contents up to date are engaged to share cutting-edge research and
so that the Directors are kept abreast of changes and insights on thought leadership, leading change, digital
latest developments in the laws and regulations that transformation and innovation as well as contemporary
are relevant to Directors and the Company. The latest management and business topics. Various tailored
updates to the Directors’ Manual, approved by the Board global leadership development virtual workshops were
in January 2021, reflect the Company’s latest mission also organised in 2020 to enable key Senior Executives
statement with new sections covering board evaluation to enhance their leadership, customer-centric and
and ESG being added. strategic thinking capabilities.
Training and Continuous Professional ACCOUNTABILITY

Development Members of the Board are responsible for the
Members of the Board and the Executive consolidated accounts of the Group. The consolidated
Directorate accounts are prepared on a going concern basis and
To assist Members of the Board and the Executive give a true and fair view of the consolidated financial
Directorate in continuing their professional development, position of the Group as at 31 December 2020, and of
the Company Secretary recommends them to attend the Group’s consolidated financial performance and
relevant seminars and courses at the cost of the Company. consolidated cash flows for the year then ended. In
114 MTR Corporation

preparing the consolidated accounts for the year ended • Compliance with applicable laws and regulations
31 December 2020, Members of the Board have selected
• Effectiveness of risk management
appropriate accounting policies and, apart from those
new and amended accounting policies as disclosed in the Systems Overview
notes to the consolidated accounts for the year ended
The Executive Committee is responsible for:
31 December 2020, have applied them consistently with
previous financial periods. Judgments and estimates • Implementing the Board’s policies on risk management
have been made that are prudent and reasonable. The and internal controls;
reporting responsibilities of the external auditor of the • Identification and evaluation of the risks faced by the
Overview
Company (the “External Auditor”) are set out on pages Company for consideration by the Board;
186 to 189 of this Annual Report.
• Designing, operating and monitoring a suitable
In support of the above, the consolidated accounts internal control system and an ERM system; and
presented to the Board have been reviewed by Members
• Providing assurance to the Board that it has done so,
of the Executive Directorate. For both the annual
together with a confirmation that these systems are
and interim reports and consolidated accounts, the
effective and adequate.
Finance Division is responsible for clearing them with

the External Auditor and then the Audit Committee. In In addition, all employees have responsibility for risk
addition, all new and amended accounting standards management and internal controls within their areas
and requirements, as well as any changes in accounting of accountability.
policies adopted by the Group, have been discussed and
approved at the Audit Committee before adoption by Business/Functional Management
the Group. Committees
A number of committees have been established to assist
RISK MANAGEMENT AND the Executive Committee in the management and control
of the Company’s various core businesses and functions.
INTERNAL CONTROL SYSTEMS
Key committees include:
The Board is responsible for the risk management
and the internal control systems of the Company • Operations Executive Management Committee
and its subsidiaries and reviewing their effectiveness. • Property Executive Management Committee
With the assistance from the Risk Committee and the
• Project Control Group
Audit Committee respectively, the Board oversees the
Company’s risk management system (the “ERM” system) • Investment Committee
and internal control system on an on-going basis, sets • European Business Management Committee Financials and Other Information
appropriate policies and reviews the effectiveness of the
systems at least annually. • Australian and International Consultancy Business
Management Committee
The ERM system and the internal control system, with
processes put in place by the Board, management and • Mainland China Business Management Committee
other personnel, are designed to manage (as opposed • Macau Business Management Committee
to eliminate) the risk of failure and provide reasonable
• Information Technology Executive Management
assurance, and not absolute assurance, against material
Committee
misstatement or loss, regarding the achievement of
objectives in the following areas: • Corporate Safety Management Committee
• Effectiveness and efficiency of operations • Enterprise Risk Committee
• Reliability of financial reporting • Executive Tender Panel/Tender Board

• Corporate Responsibility Steering Committee business unit managers to manage the key risks facing
the Company and supports the Board in discharging its
• Cost Control Committee (Projects)
corporate governance functions.
• Executive Cost Control Committee (Projects)
More details of the features of the ERM system, the
• Corporate Cyber Security Committee process used to identify, evaluate and manage significant
• Corporate Security Management Committee risks, the significant risks being managed and the process
used to review the effectiveness of the ERM system are set
• Railway Development Steering Group
out in the “Risk Management” section (pages 126 to 129)
• Technical Management Steering Group of this Annual Report.
• Technology and Innovation Steering Committee

Control Activities and Processes
• Commercial Letting Committee To ensure the efficient and effective operation of business
• High Speed Rail Executive Management Committee units and functions, and the safety of the operating
railway and construction works in railway projects,
Internal Audit Corporation General Instruction(s) (“CGI(s)”), divisional/
The Head of Internal Audit reports directly to the Board departmental procedures and manuals, committees,
via the Audit Committee and reports administratively working groups and quality assurance units are
to the CEO. The Internal Audit Department (“IAD”) has established to monitor and enforce internal controls and
unrestricted access to information that allows it to review evaluate their effectiveness.
all aspects of the Company’s risk management, control CGIs and various departmental procedures and manuals
and governance processes. are established for preventing or detecting unauthorised
On a regular basis, it conducts audits on financial, expenditures/payments, safeguarding the Company’s
operational and compliance controls and the risk assets, ensuring the accuracy and completeness of
management functions of the Company and its accounting records, and timely preparation of reliable
subsidiaries. Relevant members of the management team financial information.
are responsible for ensuring that control deficiencies Divisional Directors, Department Heads, including
highlighted in internal audit reports are rectified within a General Managers/Project Managers for overseas
reasonable time. subsidiaries/projects, are required to conduct annual
The IAD produces an annual internal audit plan for the assessments and certifications on the effectiveness of risk
Audit Committee’s approval. The audits are selected management and internal control systems within their
based on a risk assessment to ensure that business areas of responsibility.
activities with higher risks are covered. On a half-yearly
Compliance with Statutes and Regulations
basis, the Head of Internal Audit reports to the Audit
All Department Heads, including General Managers/
Committee including his opinion on the adequacy and
Project Managers for overseas subsidiaries/projects, are
effectiveness of the Company’s internal control system.
responsible for ensuring compliance with the statutes
ERM System and regulations applicable to their own functional units in
accordance with the Regulatory Compliance Framework,
The ERM system is an essential and integral part of
with necessary legal support.
the Company’s corporate governance framework and
helps to sustain business success and create value for Issues relating to compliance with statutes and
stakeholders. It involves a corporate-wide systematic regulations, including potential and actual non-
risk identification and management process which compliances, and the status of rectification and actions
aims to assist the Executive Committee and individual taken to prevent recurrence are reported annually to the
Executive Committee and the Audit Committee.
116 MTR Corporation

Department Heads Department Heads
Maintain a list of applicable statutes / regulations Assess impact of statutes / regulations on operations
Identify relevant new or updated statutes / Review compliance at least once a year
regulations
Corporation General Instruction sets out
compliance responsibilities
Plan and
Assess
Monitor Board
Overview
via Audit Committee
Regulatory Supporting
Executive
Compliance Functions
Committee
Framework (Legal, ERM)

Department Heads
Report Improve
Department Heads report non-compliances Department Heads

to Divisional Directors Identify potential and actual non-compliances
Executive Committee and Audit Committee
Devise improvement actions
receive annual report
Whistle-blowing Policy
A whistle-blowing policy has been put in place to deal with concerns related to fraudulent or unethical acts or non-
compliances with laws and the Company’s policies that have or could have significant adverse financial, legal or
reputational impacts on the Company. The policy applies to all staff, parties who deal with the Company as well as the
general public. Every half year, a summary of all whistle-blowing cases handled by the Whistle Blowing Panel and staff Financials and Other Information
complaints handled by the Human Resources Management Department and management initiated investigations are
reported to the Executive Committee and the Audit Committee.
Inside Information Policy

The Company has developed a system with established policies, processes and procedures across all relevant Division(s)
and Department(s) for the handling and dissemination of Inside Information, which encompasses the following:
• A CGI sets out:
(i) the internal processes for identifying, assessing and escalating potential Inside Information to the Executive
Committee and the Board;
(ii) the responsibilities of Model Code Managers in preserving the confidentiality of Inside Information, escalating
upwards any such potential information and cascading down the message and responsibilities to relevant staff;
and
(iii) the process for disclosure of Inside Information;

• Training for Members of the Board and the Executive Directorate, Executive Managers, Department Heads and Model
Code Managers is provided from time to time. In particular, Members of the Executive Directorate, Executive Managers,
Department Heads and Model Code Managers are regularly required to complete a computer-based training
programme (“CBT Programme”) on Inside Information. To refresh their awareness of the Inside Information policy, the
CBT Programme as updated was re-launched in September 2020; and
• On-going training sessions on the latest developments/requirements of the SFO are arranged as appropriate.
Evaluation of the Effectiveness of the Risk Management System

The Company has surpassed the relevant requirement in the CG Code by completing an effectiveness review of the ERM
system for the Company and its subsidiaries, and extending the review to the Company’s key associates operating in
Mainland of China and overseas. For the year ended 31 December 2020, the Risk Committee, with delegated authority
from the Board, has evaluated the effectiveness of the ERM system of the Company and considers that it is overall
effective and adequate.
Details about the “Process of System Effectiveness Review” are set out in the Risk Management section (page 129) of this
Annual Report.
Evaluation of the Effectiveness of the Internal Control System

For the year ended 31 December 2020, the annual review of the effectiveness of the internal control system of the
Company and its subsidiaries and key associates was performed by the Audit Committee based on the following:
• Review of significant issues arising from internal audit reports and the external The Audit
audit report Committee
concluded that
• Private sessions with internal and external auditors
the internal
• Review of annual assessment and certification of internal controls from control system
Members of the Executive Directorate, management of overseas subsidiaries was overall
and key associates and Department Heads in their areas of responsibility effective
Evaluation of the Adequacy of Resources of the Company’s Accounting, Financial

Reporting and Internal Audit Functions
For the year ended 31 December 2020, the annual assessment performed by the Finance Division and IAD concluded that
there were adequate resources, staff qualifications and experience, training programmes and budget of the Company’s
accounting, financial reporting and internal audit functions.
The Company is committed to recruit, train and develop a team of qualified and competent accountants for overseeing
the Group’s financial reporting and other accounting-related matters. A process to capture and update relevant laws, rules
and regulations applicable to the reporting and accounting function is in place. Designated officers will ensure relevant
standards and ordinances including Hong Kong Financial Reporting Standards, the Listing Rules and the Companies
Ordinance under their responsibility are complied with. Resources and provisions required to deliver the accounting and
financial reporting function are critically reviewed during the annual budgeting exercise. Company-wide recruitment
processes and staff development programmes are in place to address the competency, qualifications and experience
118 MTR Corporation

required. Adherence to the process is confirmed on an CRISIS MANAGEMENT
annual basis by the designated officers to the Finance
To uphold the reputation of being one of the world’s
Director, who will conduct a formal annual review and
leading railway operators and in order to help ensure
report the review results to the Audit Committee.
that the Company will respond to and recover from crises
In terms of internal audit, the Company is also committed in an organised and highly effective manner, including
to recruit, train and develop a team of qualified and timely communication with principal stakeholders such
competent internal auditors to provide independent and as Government departments and shareholders, the
objective assurance and consulting services designed to add Company has an established mechanism to activate the
value and improve the Company’s operations. A process formation of the Crisis Management Team in the event of
Overview
to capture updated standards and best practices relating a crisis. The Crisis Management Team comprises relevant
to internal audit is in place. Proper recruitment processes Members of the Executive Directorate and Executive
and staff development programmes are in place to address Managers, and its operation is governed by a Crisis
the competency, qualifications and experience required. Management Plan which, among other things, sets out
The Head of Internal Audit conducts a formal annual review the duties of respective members. The Crisis Management
on the adequacy of staff resources, qualifications and Plan is kept in line with world-class standards and up-to-
experience of the internal audit function and reports the date through regular reviews. The operation of the Crisis

review results to the Audit Committee. Management Team is aided by an information system to
Based on the above, the Audit Committee considered keep track of the latest crisis situation, issues and strategic
the resources, qualifications and experience of staff, actions and disseminate crisis related information. Regular
training programmes and budget of the Company’s Crisis Management Team exercises are held to validate
accounting, financial reporting and internal audit the crisis management organisation and arrangements
functions were adequate. and to provide practices for members.
In response to the outbreak of COVID-19 since early 2020,

Board’s Annual Review the Crisis Management Team was activated to monitor
The Board has, through the Risk Committee and the Audit the situation and direct the Company’s responses and
Committee, overseen the Company’s risk management actions in a coordinated manner, with a view to striving
and internal control systems on an on-going basis. to safeguard the health and safety of our customers,
The Board has conducted its annual review of the staff and contractors and reducing the impacts on the
risk management and internal control systems of the Company’s operations.
Company and its subsidiaries and key associates for
the year ended 31 December 2020, and considers that
GOVERNANCE OF SUBSIDIARIES
such systems are overall effective and adequate, with
supporting compliance mechanisms to provide assurance AND ASSOCIATES Financials and Other Information
that the Company and its officers observe their disclosure The Company has a number of subsidiaries and
obligations in respect of Inside Information. associates which operate independent businesses in
Hong Kong, Macau, the Mainland of China and overseas.
The Board has also conducted a review of the adequacy
Notwithstanding the fact that these subsidiaries and
of resources, staff qualifications and experience, training
associates are separate legal entities, the Company has
programmes and budget of the Company’s accounting,
implemented a management governance framework
financial reporting and internal audit functions for the
(the “Governance Framework”) to ensure that it exercises
year ended 31 December 2020, and considers the above
an appropriate level of control and oversight as a
resource components to be adequate.
shareholder of these subsidiaries and associates.

The Company’s Governance Framework promotes Staff members are encouraged to report existing or
collaboration between the corresponding functions in perceived violations of the Code of Conduct as well as
the Company on the one hand and the subsidiaries and malpractices. Proper procedures related to the whistle-
associates on the other hand and the implementation blowing policy of the Company are also in place,
process of the Governance Framework in the Company’s enabling staff members to raise their concerns in a safe
subsidiaries and associates starts from inception of any environment and in complete confidence if they have
new business operations/investments. genuine suspicions about any wrongdoings.
Pursuant to the Governance Framework, the Company To assist new recruits in embracing the Company’s values
exercises its control and oversight through formulation and ethical commitments, they are briefed on the Code
of a governance structure that is tailored for individual of Conduct during the staff induction programme. New
subsidiaries and associates through (i) imposition of recruits are also required to complete the mandatory
certain internal controls in key areas; and (ii) adoption of CBT Programmes within three months of joining the
management practices and policies that are appropriate Company. The Code of Conduct is available on the
to the business nature and local situation. As a result, Company’s website (www.mtr.com.hk).
adequate internal controls will be adopted by subsidiaries
In addition, the Code of Conduct serves as a guideline
and associates and the Company will be consulted
for establishing a comparable ethical culture among our
and notified on important matters, complemented by
subsidiaries and associates in Hong Kong, Macau, the
regular reporting and assurance. Compliance with this
Mainland of China and overseas.
governance structure is reported by subsidiaries and
associates with significant operations on an annual basis.
EXTERNAL AUDITOR
BUSINESS ETHICS The Company engages KPMG as its External Auditor. In
order to maintain KPMG’s independence and objectivity
Practising integrity and responsible business ethics is
and the effectiveness of the audit process in accordance
paramount to the Company’s continued success. The
with applicable standards, the Audit Committee, under its
Company’s Code of Conduct lays down the requirements
Terms of Reference, pre-approves all audit services to be
of the Company in terms of ethical practices and obliges
provided by KPMG and discusses with KPMG the nature
staff to operate transparently and under the highest
and scope of their audit and reporting obligations before
principles of fairness, impartiality and integrity in all of the
the audit commences.
places where the Company does business.
The Audit Committee also reviews and pre-approves the
The Code of Conduct is reviewed and updated
engagement of KPMG to provide any non-audit services,
periodically to ensure appropriateness and compliance
for complying with relevant legal requirements and
with corporate and regulatory requirements. Following
seeks to balance the maintenance of objectivity with
the release of an updated Code of Conduct in July 2020, a
value for money.
new series of staff awareness programmes was launched
featuring animation videos and interactive games The nature of audit and non-audit services provided by
with real life examples to help staff members better KPMG and fees paid to KPMG (including any entity that
understand the principles of the Code and if certain acts is under common control, ownership or management
are unlawful or unacceptable. For instance, animation with KPMG or any entity that a reasonable and informed
videos under the theme of Outside Work and Workplace third party having knowledge of all relevant information
Harassment were launched in July and October 2020 would reasonably conclude as part of KPMG nationally or
respectively. Other education programmes, including internationally) are set out in note 10B to the consolidated
seminars and mandatory CBT Programmes were also accounts on page 214 of this Annual Report.
introduced to raise staff awareness.
120 MTR Corporation

For maintaining integrity and objectivity as the External of language (Cantonese, English and Putonghua). The
Auditor of the Company, KPMG implements policies webcast of the whole proceedings was also posted on the
and procedures to comply with professional ethics and Company’s website in the same evening for viewing.
independence policies and requirements applicable
The 2021 AGM has been scheduled on 26 May 2021
to the work it performs. In addition, KPMG requires its
and the Company plans to continue providing the
audit partner serving the Group to rotate off the audit
abovementioned simultaneous interpretation to further
engagement with the Group at least once every seven
facilitate smooth and direct communication between
years in accordance with the Hong Kong Institute of
the shareholders of the Company and the Company’s
Certified Public Accountants/International Federation of
Directors and management. The Company is committed
Overview
Accountants Code of Ethics.
to making available meeting facilities to enable all
eligible attendees to be able to participate in the AGM.
COMMUNICATION WITH In addition, the Company will continue to monitor the
SHAREHOLDERS legal restrictions on public gatherings in light of the
continuation of the COVID-19 pandemic and will make
Annual General Meeting (the “AGM”) appropriate arrangements with a view to safeguarding
The Company’s AGM is one of the principal channels the health and safety of attendees at the 2021 AGM while,

of communication with its shareholders. It provides an at the same time, protecting shareholders’ fundamental
opportunity for shareholders to communicate face to face rights to attend, ask questions and vote.
with the Directors about the Company’s performance and
operations. It has been the practice for the Chairman of Resolutions passed at the 2020 AGM
the Company, the chairman of each Board Committee, all The Chairman proposed separate resolutions for each
Members of the Executive Directorate and the External substantially separate issue at the 2020 AGM. Before the
Auditor of the Company to attend AGMs to answer resolutions were considered, the Chairman exercised his
shareholders’ questions. However, in light of the outbreak right as the Chairman of the 2020 AGM under Article 71 of
of COVID-19 and the Prevention and Control of Disease the Articles of Association to call a poll on all resolutions
(Prohibition on Group Gathering) Regulations (Cap. 599G conducted by electronic means.
of the Laws of Hong Kong), only the Chairman of the A total of 10 resolutions were passed at the 2020
Company, the chairman of each Board Committee, AGM (with resolution no. 3 comprising four separate
certain Members of the Executive Directorate and the resolutions), each supported by over 98% of the votes
External Auditor of the Company were invited to attend cast. The full text of the resolutions is set out in the
the 2020 AGM. 2020 AGM Circular (which comprised Notice of the 2020
The 2020 AGM was held on 20 May 2020 and the AGM) dated 14 April 2020 and the results of the AGM
Company continued providing sign language are available on the respective websites of the Company Financials and Other Information
interpretation in addition to simultaneous Cantonese, (www.mtr.com.hk) and the Stock Exchange.

English and Putonghua interpretation. The Company
also implemented a number of precautionary measures Calling General Meetings
for the 2020 AGM, including restricting the number of Directors of the Company may call a general meeting of
shareholders who could physically attend the 2020 AGM the Company.
through pre-registration and requiring submission of Shareholders representing at least 5% of the total voting
questions in advance of the meeting. For the benefit rights of all the shareholders having a right to vote
of the Company’s shareholders who were unable to at general meetings may request the Directors of the
physically attend the AGM, the Company arranged its Company to call a general meeting of the Company.
first-ever live webcast of the AGM with three choices

The requesting shareholders must state in their request The Company’s Shareholders Communication Policy has
the general nature of the business to be dealt with, set out, amongst other things, a channel for shareholders
and may include the text of a resolution to be moved access to the Board and management by writing to the
at the general meeting. The request may consist of Company Secretary of the Company.
several documents in like form and may be sent to the
Please also refer to the Investor Relations section (pages
Company in hard copy or electronic form, which must be
96 to 97) of this Annual Report on other means of
authenticated by the requesting shareholders.
communication with shareholders.
The Directors of the Company are required to call the
general meeting within 21 days after the date on which CONSTITUTIONAL DOCUMENT
the Company receives such requests, and the general
The Articles of Association (in both English and Chinese)
meeting must be held on a date not more than 28 days
are available on the websites of both the Company
after the date of the notice convening the general
(www.mtr.com.hk) and the Stock Exchange. During the
meeting. If the requests include a resolution to be moved
year ended 31 December 2020, there was no change to
at the general meeting, the notice of the general meeting
the Articles of Association.
must include notice of the resolution. If the resolution is
to be proposed as a special resolution, the Directors of the The Board has proposed to make certain amendments
Company are required to specify the intention to propose to the Articles of Association with a view to (i) providing
the resolution as a special resolution in the notice of the greater flexibility for the Company in holding general
general meeting. meetings as hybrid meetings and conducting general
meetings at more than one location where shareholders
If, within 21 days after the date on which the Company
of the Company can participate using electronic
receives the required requests, the Directors of the
facilities, in addition to/instead of attending physically;
Company do not proceed duly to call a general meeting,
(ii) empowering the Board and the chairman of general
the shareholders who requested the general meeting, or
meetings to make necessary arrangements for managing
any of them representing more than one-half of the total
shareholders’ attendance and/or participation and/or
voting rights of all of them, may themselves call a general
voting at general meetings; (iii) simplifying the
meeting, provided that the general meeting must be
calculation of the relevant value of scrip dividends
called for a date not more than 3 months after the date on
under the Company’s scrip dividend scheme in force
which the Company receives the required requests.
from time to time; (iv) providing additional means for
directors to approve written resolutions; and (v) making
Procedures for Shareholders Putting
housekeeping amendments to align the Articles of
Forward Proposals
Association with the Companies Ordinance.
Shareholders may put forward proposals for
consideration at a general meeting according to the The proposed amendments will be subject to the
Companies Ordinance and the Articles of Association. approval of the shareholders of the Company by way of
a special resolution at the forthcoming Annual General
As regards proposing a person for election as a director,
Meeting. Details will be set out in the circular to be issued
please refer to the “Appointment Procedure for Members
to shareholders together with this Annual Report.
of the Board of the Company” which is available on the
website of the Company (www.mtr.com.hk).
Enquiries from Shareholders

The Company has a Shareholders’ Communication Policy For and on behalf of the Board
(available on the website of the Company
(www.mtr.com.hk)) to provide shareholders with
information about the Company to enable them to Gillian Elizabeth Meller
engage actively with the Company and exercise their Company Secretary
rights as shareholders in an informed manner. Hong Kong, 11 March 2021
122 MTR Corporation

AUDIT COMMITTEE REPORT
As at the date of this Report, the Audit Committee of • Oversight of the Company’s financial reporting
the Company (referred to as the “Committee” in this and internal control systems, including overseeing
Report) consists of six Non-executive Directors, five of the adequacy of the resources and competence of
whom are Independent Non-executive Directors of the the Company’s accounting and financial reporting
Company. Details of the Committee’s membership and functions; and
their attendance records during 2020 are set out on pages
• Overseeing the Company’s Internal Audit function,
112 to 113 of this Annual Report. None of the Committee
including liaison with the Head of IA, approval of
members is a partner or former partner of KPMG, the
the annual internal audit plan of the Company and
Company’s external auditor.
receiving periodic reports from the Head of IA.
Overview
The Finance Director (the “FD”), the Head of Internal Audit
More details on the duties of the Committee are set out in
(the “Head of IA”) and representatives of the external
the ToR and further information can be found in the “Risk
auditor attend all meetings of the Committee. At the
Management and Internal Control Systems” section of the
discretion of the Committee, others may also be invited
Corporate Governance Report on pages 115 to 119 of this
to attend meetings. The Committee normally meets
Annual Report.
four times a year, and the Chairman of the Committee,
the external auditor or the FD may request additional Reporting to the Board

meetings if they consider necessary. The Committee may,
The Chairman of the Committee summarises the activities
upon request, approve the appointment of the Company’s
of the Committee and highlights issues arising therefrom
external auditor for undertaking non-audit work.
in a report to the Board after each Committee meeting.
The minutes of Committee meetings are prepared by

TERMS OF REFERENCE OF the secretary of the meetings with details of the matters
THE COMMITTEE considered by Committee members and decisions
The Terms of Reference of the Committee (the “ToR”) reached, including any concerns raised by Committee
is available on the respective websites of the Company members, dissenting views expressed and suggestions for
(www.mtr.com.hk) and the Stock Exchange. enhancing the governance and internal control systems
of the Company. The draft minutes are circulated to
DUTIES OF THE COMMITTEE Committee members for comment after each meeting.
The Committee formally adopts the draft minutes at the
Under the ToR, the duties of the Committee primarily
next subsequent meeting, after taking into account any
comprise the following:
comments that Committee members may have made.
• Oversight of the relationship with the Company’s Minutes of Committee meetings are open for inspection by
external auditor, including making recommendations Committee members at the Company’s registered office.
to the Board on the appointment of and any change to
In advance of the first regular Committee meeting each
the Company’s external auditor and communicating
year, the secretary of the meetings pre-agrees key agenda
with the external auditor on financial matters of
items for the year with the Chairman of the Committee
the Company;
who makes a final determination on the agenda for the
• Review of the financial information of the Committee meetings.
Company, including monitoring the integrity of
financial statements;

AUDIT COMMITTEE REPORT
WORK PERFORMED BY THE The following key matters were reviewed/considered/

endorsed (as relevant) by the Committee in 2020:
COMMITTEE IN 2020
In 2020, the Committee held four regular meetings. Financial
Representatives of the external auditor, the FD and the • The draft 2019 Annual Report and Accounts and 2020
Head of IA attended all four regular meetings to report Interim Report and Accounts, including the financial
and answer questions about their work. In addition, impact of the Company’s railway construction projects
relevant Members of the Executive Directorate were under entrustment by the HKSAR Government, and
invited to join certain presentations to the Committee. the relevant disclosure notes in the said Accounts and
The Committee also held private sessions with the recommendation of the same for the Board’s approval;
external auditors without the presence of Management
• Updates on the carrying value of the Group’s
during the year.
properties and rail fixed assets;
The Committee devoted its attention to the review of the
• Updates on the latest positions of the Company’s
Company’s annual and interim results announcement/
railway construction projects under entrustment by
accounts at the February and July meetings respectively,
the HKSAR Government;
allowing more time to review and discuss the Company’s
internal controls, internal audit and other activities at the • Update relating to Service Concession Payments and
May and November regular meetings. tax matters;
Acting through the Risk Committee and the Committee, • 2020 cost savings analysis; and
the Board has mandated a review of the internal control
• Preview of the 2020 interim and annual accounting
and risk management systems for the Company’s Hong
and financial reporting issues.
Kong operations. In 2020, an external consultant was
appointed to conduct a deep-dive assessment of the Internal Audit and Internal Control
Company’s existing Three Lines of Defence framework,
• Risk Management and Internal Control Systems
with a view to identifying any gaps in the framework and
Effectiveness for 2019 for submission to the Board
making recommendations for improvement. The results
(focused on the internal control system, as the risk
of this assessment were presented to and endorsed by
management system effectiveness was separately
the Risk Committee and the Committee in late 2020.
reviewed and endorsed by the Risk Committee of
The next phase of the project will be to strengthen the
the Company);
Company’s Second Line of Defence (in particular) in
certain key risk areas through the establishment of new • Report on Evaluation of Effectiveness of Internal Audit
technical and engineering Centres of Excellence and the Department for 2019;
adoption of a new assurance framework. A further update • Continuing Connected Transactions for 2019;
on progress will be presented to both Committees in
• Internal Audit Department’s Reports;
mid-2021.
• Whistle-blowing Progress Reports; and
• Approval of the 2021 Internal Audit Plan.
124 MTR Corporation

External Auditor RE-APPOINTMENT OF
• KPMG’s reports on the salient features of the 2019 EXTERNAL AUDITOR
Annual Accounts and 2020 Interim Accounts respectively;
The Committee was satisfied with KPMG’s work, its
• 2019 Auditor’s Report; independence and objectivity, and therefore recommended
• KPMG’s independence and other relevant factors when the re-appointment of KPMG (which has indicated
approving the appointment of KPMG in providing its willingness to continue in office) as the Group’s
non-audit services; pre-approval of the engagement external auditor for 2021 for approval by the Company’s
of KPMG to provide non-audit services; and KPMG’s Shareholders at the 2021 Annual General Meeting.
Overview
confirmation of independence in its audit report in
respect of the 2019 Annual Accounts and 2020 Interim
Accounts respectively;
• Summary of KPMG services provided to the Company

and fees received by them; Dr Eddy Fong Ching
Audit Committee Chairman
• Approval of KPMG’s fee proposal for the 2020 annual
Hong Kong, 11 March 2021

audit and the 2021 interim review, as well as other
audit related and tax services; and
The Audit Committee Report has been reviewed and endorsed by the Committee.
• KPMG’s audit plan and strategy for the year ended
31 December 2020.
Governance
• Report on compliance with statutes and regulations,
Operating Agreement and Rail Merger Related
Agreements in 2019 and outstanding litigation/
potential litigation;
• Updates on the Three Lines of Defence of the

Company; and
• Summaries on the salient features of the Audit/Risk/

Governance Committee Minutes of various subsidiaries
of the Company.

RISK MANAGEMENT
SYSTEM FEATURES this Report, the outbreak of the COVID-19 pandemic has
significantly affected the Company’s businesses. While
Business units across the Company embrace the
the ultimate duration and scale of the COVID-19 impact
Company’s Enterprise Risk Management (“ERM”)
remain uncertain, at the August workshop the Executives
framework that underpins their day-to-day business
deliberated on potential medium and long-term risk
activities. The framework provides a simple and effective
scenarios arising from the pandemic, with follow-up
management process to:
actions formulated to mitigate the associated impacts.
• Identify and review risks across all business units of
The Company’s risks are rigorously identified, assessed
the organisation
and managed. Each risk is evaluated on the basis of the
• Prioritise resources to manage risks likelihood of the identified risk and the consequence
• Give management a clear view of the significant risks of the risk event, taking into consideration the control
facing the Company measures in place. A risk matrix is used to determine
• Support decision making and project execution for risk ratings (E1 – E4), with E1 being a very high risk and
better business performance E4 being a low risk. The risk ratings reflect the required
The Board, with the assistance of the Risk Committee, management attention and risk treatment effort, and take
oversees the Company’s ERM framework and top into account the Company’s risk appetite. The highest
risks, whereas the Executive Committee, with the category of risks, “E1”, is subject to Board, Risk Committee
support of the Enterprise Risk Committee (“ERC”), is and Executive Committee oversight.
overall accountable for the ERM policy and system While risk taking is inevitable in the course of business,
implementation and continuous improvement. the Company’s appetite for risk varies, but is particularly
The Executives provide top-down views on the key risks low in certain areas, such as in relation to safety and the
of the Company through discussions on the quarterly provision of a reliable transport service.
enterprise risk reports. Two “Blue Sky” workshops were The Company’s ERM system provides an important
also held in February and August 2020 adopting a internal control in identifying and managing risks
“futures” thinking approach. At the February workshop, affecting the Company. As a learning organisation, the
the Executives reviewed the latest challenges around Company constantly looks for improvement opportunities
Environmental, Social and Governance (“ESG”) issues, through internal and external reviews and studies, as
which provided important input to the development of well as learning from incidents encountered during its
the new Corporate Strategy. As disclosed elsewhere in operations. The commencement of the new signaling
• Exercise ongoing risk oversight

• Establish appropriate risk management strategies
Board • Oversee the ERM framework
assisted by • Review top risks and emerging risks
Risk
Committee* • Conduct annual review of ERM system effectiveness
• Implement and continuously improve ERM framework

• Enterprise Risk Committee
- Chaired by Legal and Governance Director
Executive Committee
- Comprises representatives from key business functions
assisted by
Enterprise Risk Committee - Steers framework implementation and improvement
- Reviews Company’s top risks and key emerging risks
- Reports to Executive Committee and Risk Committee
quarterly, and to Board every six months
• Establish arrangements and implement risk management

process consistent with the Company’s ERM framework
Business Units and policy
• Capture identified risks in risk registers for regular review
and monitoring
* See the Risk Committee Report (pages 130 to 131 of this Annual Report) for
duties and work performed by the Committee in 2020
126 MTR Corporation

system and gradual introduction of nine-car trains on the strategies are developed for different areas including but
East Rail Line as part of the Shatin to Central Link project, not limited to construction, operations, finance, treasury,
originally scheduled in mid-September 2020, has been safety and insurance.
deferred to February 2021 due to a signaling system
The ERM Team within the Legal and Governance function
issue which could have had a potential service impact.
maintains a list of running issues and risk drivers pertinent
Investigations have been undertaken and improvement
to the changing business and external environments,
actions have been identified for implementation.
which is used to assist the ERC in identifying potential
risks that may emerge.
MANAGEMENT PROCESS FOR
Overview
In addition, the ERC, the Executive Committee and the
SIGNIFICANT RISKS Risk Committee review the Company’s enterprise risk
The Company takes proactive measures to identify, profile and brainstorm emerging risks quarterly to ensure
evaluate and manage significant risks arising from its that key risks and those cutting across different areas of
recurrent and growth businesses and from the constantly the business are captured.
changing business environment. Risk management

Report and
Identify Risk* Evaluate Risk Treat Risk*
Monitor Risk
• Existing businesses • Evaluate risk by estimating • Take into account risk • Capture risks in risk registers
• Changing external likelihood and consequence appetite • Periodic ERM reports to
environment of the risk event • Avoid risks where no – Enterprise Risk Committee
• New projects or business • Determine risk rating using appetite and possible to
the risk matrix (E1-E4) do so – Executive Committee
ventures
• Mitigate – review controls – Risk Committee
• New and emerging issues
or trends which may pose in place to evaluate – Board
significant risks adequacy and effectiveness
and ensure owners in place
• List of running issues
to implement
and risk drivers for
brainstorming • Transfer – take out insurance
to transfer risks where cost
• Change in laws and effective and efficient
regulations
• Accept once mitigated to
an appropriate level
* Areas below are not exhaustive
In 2020, the COVID-19 pandemic emerged as a key risk The long-term financial sustainability of the Company Financials and Other Information
that is significantly affecting the Company’s businesses is continuously monitored by the Executive Committee
and has required careful management to mitigate the and the Board. The impact of the Public Order Events
financial, operational, human resources and societal in 2019 and the prolonged COVID-19 pandemic have
impacts. The Infectious Disease Management Team caused short-term financial impacts on the Company’s
(“IDMT”) has been activated to coordinate corporate-wide businesses, as previously disclosed. To mitigate
strategic response actions across the Company according to the impacts, cost control initiatives, include service
the Infectious Disease Business Continuity Plan, including adjustments, a recruitment freeze as well as a reduction
overseeing the stock level of Personal Protective in discretionary spending, have been put in place.
Equipment (“PPE”), recommending work arrangements Further, the Company continues to maintain low gearing,
for risk reduction and issuing notices and situation even under the current difficult situation. Overall, the
reports for staff communication. The Company has financial position of the Company remains sound. The
made extra efforts and deployed additional resources to Company has also started implementing transformation
maintain a hygienic environment for staff and customers, initiatives with a view to further improving the Company’s
including the deployment of new technology, such as profitability in the longer term and ensuring long-term
the Vapourized Hydrogen Peroxide (“VHP”) Robot, in financial sustainability.
disinfecting company premises, stations and trains.

RISK MANAGEMENT
Key focus areas for risk management of the Company include:

Effective and Balanced Relationship with Key Stakeholders
Key Challenges • Challenging political landscape and diverse stakeholders’ expectations
• Uphold trust and public confidence in light of the earlier Shatin to Central Link incident, the Public Order Events
and operational incidents
Key Controls • Implement tailored engagement plans for different stakeholders to maintain effective communication
and understanding
• Observe the Company’s operating obligations and maintain good performance of the Company
People and Operations Safety

Key Challenges • Health threat to the workforce, loss of productivity and potential impact on normal operations arising from the
COVID-19 pandemic
• More challenging employee relations environment due to more diverse and polarised views
• Safety and security threats associated with potential further Public Order Events
Key Controls • Enhanced cleaning and sterilisation at workplaces, including offices, depots, stations and trains, provision of face
masks and personal protective equipment for staff, special work arrangements such as fixed team, split team and
work-from-home arrangements
• Robust tracking and management protocol for confirmed or close-contact cases in the workforce
• Implementation of business continuity arrangements
• Proactive employee engagement through various communication channels including virtual meetings and close
communication with staff bodies
• Enhanced security arrangements
• Review of asset and design standards
New Projects Quality, Delivery and Cost

Key Challenges • Adherence to programme, cost and quality of projects
Key Controls • Periodic audits and assurance to ensure compliance with processes and procedures
• Monitoring project quality and progress against Key Performance Indicators
• Familiarization of staff with the processes and procedures relevant to their work and encouraging lessons learned
to be shared
• Adoption of technology to strengthen supervision and record keeping
• Stringent control of contingency funds
New Business Model/Technological Disruption/Competition

Key Challenges • Current business model disrupted by new technology
• Manage competition from other transport modes
Key Controls • Invest in technology and digital solutions to strengthen business model
• Monitor competition from other transport modes and implement initiatives to maintain market share
Delivery of Growth Strategy

Key Challenges • Challenging business model for future new lines in Hong Kong
• Keen competition for business opportunities outside Hong Kong
• Business performance below the bid models and assumptions
• Heightened geopolitical risk
Key Controls • Formulate innovative business models for new lines in Hong Kong
• Maximise branding effect of the Company and stakeholder engagement
• Diversify the Company’s businesses in locations outside Hong Kong and conduct regular environmental scan for
new business opportunities
• Formulate and implement business plans for underperforming businesses for improvement and monitoring
Security Threat (Cyber/Physical)

Key Challenges • Threat of cyber-attack on Operations and IT systems
• Threats associated with Public Order Events
• Terrorist attack threat, in particular for railway operations of the Company outside Hong Kong
Key Controls • Enhanced IT network resilience to protect the Company against cyber attacks
• Implementation of cyber security protection systems for IT and railway operations systems
• Enhanced security measures
• Enhanced corporate security governance framework
128 MTR Corporation

Process of System Effectiveness Review
On behalf of the Executive Committee, the ERC evaluates the effectiveness of the ERM system at least annually. The Legal
and Governance Director, who chairs the ERC, presented the ERM system effectiveness review results for the year ended
31 December 2020 to the Executive Committee, which confirmed the review results, on 11 February 2021, and to the Risk
Committee on 26 February 2021.
For the year ended 31 December 2020, the Risk Committee, with delegated authority from the Board, has evaluated the
effectiveness and adequacy of the Company’s ERM system and considers that it is overall effective and adequate, based on a
number of review areas.
Overview
Factors considered during the review Conclusion
• Review areas suggested in the Corporate Governance Code The ERM system was
for the Board’s annual review of the risk management system considered overall effective
• Annual internal certification of risk management and adequate for the year
effectiveness by Department Heads and Heads of ended 31 December 2020.

subsidiaries/associates
• Risk management of subsidiaries and associates
• Benchmarking/roundtable/peer group ideas exchange
• Risk management training and promotion held in 2020
CONTINUOUS PROCESS IMPROVEMENT

Key initiatives undertaken in relation to the ERM system in 2020 include the following:
• The ERM Team continued to produce ERM Newsletters for dissemination to all staff focusing on topical issues in risk
management, aiming to raise risk awareness and share good risk management practices.
• A series of 3 bite-sized animated videos, which form a story to promote risk management principles and application,
has also been developed. The last of the three videos was launched in March 2020. The fun and innovative approach
has received a good response with the series receiving over 6,000 views by staff.
• In November 2020, a Risk Awareness Webinar adopting the theme “Forward Looking Risk Management” was held
covering topics such as the use of contactless technology for new travel norms and futuristic thinking tools. The
Webinar was attended by about 150 senior managers and was well received.
• Acting through the Risk Committee and the Audit Committee, the Board has mandated a review of the Company’s
internal control and risk management systems for Hong Kong operations. Following the first phase review conducted
in 2019, an external consultant, Arthur D Little, was appointed to conduct a deep-dive assessment of the Company’s
existing Three Lines of Defence framework, with a view to identifying any gaps in the framework and making
recommendations for improvement. The results of this assessment were presented to and endorsed by the Risk
Committee and the Audit Committee in late 2020. The next phase of the project will be to strengthen the Company’s
Second Line of Defence (in particular) in certain key risk areas through the establishment of new technical and
engineering Centres of Excellence and the adoption of a new assurance framework. A further update on progress will
be presented to the Risk Committee and the Audit Committee in mid-2021.
We keep ourselves abreast of the latest developments in risk management through reviews with users, cross-industry
benchmarking and experience sharing, including through participation in the UK ERM Roundtable and the HK ERM
Roundtable meetings.

RISK COMMITTEE REPORT
As at the date of this Report, the Risk Committee of the effectiveness of the ERM system are set out in the “Risk
Company (referred to as the “Committee” in this report) Management” section on pages 126 to 129 of this Annual
consists of seven non-executive Directors, five of whom Report. Each year, the Committee agrees on a list of
are Independent Non-executive Directors of the Company reviews and presentations in respect of selected key risk
(“INEDs”). Details of the Committee’s members and their areas to be considered for that year, taking into account
attendance records during 2020 are set out on pages 112 the ongoing activities of the Company at the material
to 113 of this Annual Report. time; and invites relevant management to present
on the subjects and conduct interactive discussions.
The Committee, with delegated authority from the Board,
The list of matters to be considered is updated as
has evaluated the effectiveness and adequacy of the
required to include any topical subjects or risks that
Company’s Enterprise Risk Management (“ERM”) system
may emerge during the year. The Committee provides
and considers that it is overall effective and adequate.
observations and, where applicable, recommendations to
management, based on their reviews and discussions.
DUTIES OF THE COMMITTEE
The secretary of the meetings draws up agendas for
The Committee’s Terms of Reference are available on the
each meeting in consultation with the chairman of the
respective websites of the Company (www.mtr.com.hk)
Committee, making reference to the list of reviews and
and The Stock Exchange of Hong Kong Limited.
presentations determined by the Committee, as well as
The principal duties of the Committee include reviewing topical matters at the relevant time.
the Company’s ERM framework, guidelines, policy and
The chairman of the Committee summarises the activities
procedures for risk assessment and risk management;
of the Committee and highlights issues arising therefrom
reviewing the Company’s top risks and key emerging
by a report to the Board after each Committee meeting.
risks and the controls in place to mitigate such risks;
monitoring the Company’s risk profile; conducting “deep The minutes of the Committee meetings are prepared by
dive” reviews on selected key risk areas; reviewing the the secretary of the meetings with details of the matters
effectiveness of the ERM function; and reviewing the considered by the Committee Members, including
Company’s crisis management arrangements. recommendations and any observations raised by the
Committee Members. Draft minutes are circulated to the
The Committee assists the Board in overseeing the
Committee Members before adoption. The Committee
Company’s ERM system on an ongoing basis. The
formally adopts the draft minutes at its next subsequent
Committee reviews the effectiveness of the Company’s
meeting, after taking into account any comments that the
ERM system annually, and reports to the Board in
Committee Members may have on the draft minutes.
relation to such review. More details of the features of
the ERM system and processes, the significant areas of A total of four meetings have been scheduled to be held
risk being managed, and the process used to review the on a quarterly basis in 2021.
130 MTR Corporation

WORK PERFORMED BY THE The Legal and Governance Director, the General
Manager – Governance & Risk Management and the
COMMITTEE IN 2020 Senior Manager – Enterprise Risk, representing the ERM
In 2020, the Committee held four meetings. During function, attended all four meetings in 2020 to report and
the year, the Committee reviewed the Company’s ERM answer questions on ERM related matters.
quarterly reports and the effectiveness of the Company’s
The Committee considered the following key matters in
ERM system for the year ended 31 December 2019. A
2020:
review of the Company’s ERM annual report and ERM
system effectiveness for the year ended 31 December • Impact of Public Order Events on fare business, human
Overview
2020 was conducted by the Committee on 26 February resources, station operations and asset management
2021. and maintenance
The Committee reviewed the Company’s risk profile, • Special work arrangements for protection against
top risks and key emerging risks at each of its meetings. COVID-19 infection
At its first meeting, the Committee agreed on a list of
• Medium to long term impact of COVID-19 and
“deep dive” reviews and presentations on selected key
associated risk scenarios
risk areas for the year (as adjusted during the course of

year), which reviews and presentations took place as • Management Review Report on the High Speed Rail
planned. Relevant Members of the Executive Directorate trespassing incident which occurred on 9 December
and managers were invited to present on the “deep 2019
dive” reviews to the Committee, with comments and • Management of Derailment Risks
recommendations provided by the Committee for
• Cyber security management of signalling systems
appropriate action by management.
• Near Capacity Operations on the East Rail Line in light
Acting through the Committee and the Audit Committee,
of Mixed Fleet Operations
the Board has mandated a review of the Company’s
internal control and risk management systems for • RDS-2014 projects
Hong Kong operations. Following the first phase review
• Readiness and preparation for Hangzhou Line 5 full
conducted in 2019, an external consultant, Arthur D Little,
line opening
was appointed to conduct a deep-dive assessment of the
Company’s existing Three Lines of Defence framework, • Interim update on Three Lines of Defence review
with a view to identifying any gaps in the framework and • Insurance summary update
making recommendations for improvement. The results
of this assessment were presented to and endorsed • Notable cyber security incidents summary overviews
by the Committee and Audit Committee in late 2020. • Major global rail accidents summary overviews Financials and Other Information
The next phase of the project will be to strengthen the
Company’s Second Line of Defence (in particular) in
certain key risk areas through the establishment of new
technical and engineering Centres of Excellence and the Andrew Brandler
adoption of a new assurance framework. A further update Risk Committee Chairman
on progress will be presented to the Committee and the Hong Kong, 11 March 2021
Audit Committee in mid-2021.
The Risk Committee Report has been reviewed and endorsed by the Committee.

CAPITAL WORKS COMMITTEE REPORT
As at the date of this Report, the Capital Works Committee WORK PERFORMED BY THE
of the Company (referred to as the “Committee” in this
report) consists of six Non-executive Directors, five of
COMMITTEE IN 2020
whom are Independent Non-executive Directors of the In 2020, we saw the conclusion of the Commission of
Company (“INEDs”). Mr Cheng Yan-kee succeeded Dr Inquiry (“CoI”) hearing on Hung Hom Station, and the
Allan Wong Chi-yun as the Committee Chairman on subsequent issue of their final Report. The observations
20 May 2020. Details of the Committee’s members and therein and the follow up actions necessarily dominated
their attendance records during 2020 are set out on the Committee’s agenda in the first half of 2020. During
pages 112 to 113 of this Annual Report. the year, consultant selection exercises carried out
for the Tung Chung Line Extension and the Tuen Mun
South Extension, and the major signalling issues also
DUTIES OF THE COMMITTEE merited the Committee’s attention. The Committee held
The Committee’s Terms of Reference are available on the four meetings at which the following key matters were
website of the Company (www.mtr.com.hk). reviewed and considered:
The principal duties of the Committee include overseeing • reports on the progress and cost status of the
any capital project of the Company in Hong Kong Company’s capital projects under construction
and outside of Hong Kong involving design and/or including the Express Rail Link, Shatin to Central Link,
construction activities (“Relevant Project”) with a capital the Signalling Replacement Works on the urban lines
value in excess of HK$10 billion and any other Relevant
Project, in the event that such Relevant Project is four • special reports on the CoI and the Suitable Measures at
months or more behind programme on an overall basis; Hung Hom Station and follow up action
reviewing the progress of such projects, from both a • planning work for the Tung Chung Line Extension, and
programme and cost perspective; reviewing matters that Tuen Mun South Extension
could have a material impact on the quality, delivery and
• progress of the Building Excellence programme
management of such projects, including processes and
dealing with on-going project transformation
protocols adopted by the Company in supervising and
initiatives to enhance the Company’s capability in
managing the projects and non-compliances in relation
railway capital project management
to materials, works and processes; checking that there
are adequate resources for such projects; keeping under • half-yearly reports on the construction programme and
review the Company’s communication strategy and cost status of all the awarded development projects of
protocols, and crisis management plans in respect of such the Company’s Property Division in Hong Kong
projects; and reporting to the Board on a quarterly basis • half-yearly reports on projects-related audits
or ad hoc basis if the Committee deems appropriate, in conducted by the Company’s Internal Audit
respect of the above. Department
Agendas for each meeting were drawn up taking into Projects Director, Engineering Director, Divisional General
account topical matters relating to the projects at the Manager – New Projects and General Manager –
relevant time. Procurement & Contracts attended all four Committee
The chairman of the Committee summarises the activities meetings in 2020 to report and answer questions on
of the Committee and highlights issues arising therefrom progress of projects and cost related matters. Executives
in a report to the Board after each Committee meeting. and senior managers were also invited to attend
Committee meetings when required. I thank Committee
members and colleagues for their support and hard work.
Mr Cheng Yan-kee
Capital Works Committee Chairman
The Capital Works Committee Report has been reviewed and endorsed by
the Committee.
132 MTR Corporation

REMUNERATION COMMITTEE REPORT
INTRODUCTION The principal responsibilities of the Remuneration
Committee include:
The Remuneration Committee has been delegated the
authority to consider and recommend to the Board the • Formulating a remuneration policy and practices that
Company’s remuneration policy and the remuneration facilitate the employment of top quality personnel;
packages of the Non-executive Directors, as well as to • Recommending to the Board the remuneration of the
review and determine the remuneration packages for Non-executive Directors;
the Chief Executive Officer and other Members of the
Executive Directorate. • Determining, with delegated responsibility, the
remuneration packages of Members of the Executive
Overview
Throughout the year, the Committee met regularly to Directorate; and
discuss and approve remuneration issues pertaining to the
Company’s Core Incentive Scheme, long-term incentive • Reviewing and approving performance-based
scheme, and also the remuneration packages of the Chief remuneration of Members of the Executive
Executive Officer and other Members of the Executive Directorate by reference to the Board’s corporate goals
Directorate in the light of the Company’s remuneration and objectives.
policy, and to consider and make recommendations to The Committee’s responsibilities are set out in its Terms

the Board on the remuneration packages of the Non- of Reference and are consistent with the Code.
executive Directors. In determining the remuneration of
This Remuneration Committee Report has been
the Chief Executive Officer, the Committee consults with
reviewed and authorised by the Remuneration
the Chairman and in the case of other Members of the
Committee of the Company.
Executive Directorate, the Committee consults with both
the Chairman and the Chief Executive Officer in respect of
their recommendations. REMUNERATION POLICY
It is the Company’s policy to ensure that remuneration
Currently, the Committee has seven Non-executive
is appropriate and aligns with the Company’s goals,
Directors, four of whom are independent Non-executive
objectives and performance. To achieve this, the
Directors. The Chairman of the Remuneration
Company has taken into consideration a number of
Committee is an independent Non-executive Director.
relevant factors such as salaries paid by comparable
As necessary and with the agreement of the Chairman
companies, job responsibilities, duties and scope,
of the Remuneration Committee, the Remuneration
employment conditions elsewhere in the Company and
Committee is authorised to obtain outside independent
its subsidiaries, market practices, financial and
professional advice to support the Committee on relevant
non-financial performance, and the desired mix of fixed
issues. No individual Director or any of his associates is
and performance-based remuneration.
involved in deciding his own remuneration.
The Company is committed to effective corporate
governance and employing and motivating top quality
personnel. The Company also recognises the importance
of a formal and transparent remuneration policy covering
its Board and Executive Directorate.

REMUNERATION FOR REMUNERATION FOR

NON-EXECUTIVE DIRECTORS EMPLOYEES
The Remuneration Committee makes recommendations The Company’s remuneration structure for its employees,
to the Board from time to time on the remuneration including the Chief Executive Officer and other Members
of the Members of the Board who are Non-executive of the Executive Directorate, comprises:
Directors. The remuneration of Non-executive Directors is
• fixed compensation – base salary, allowances
in the form of annual director’s fees.
and benefits-in-kind (e.g. medical);
To ensure that Non-executive Directors are appropriately
• variable incentives – discretionary or
remunerated for their time and responsibilities devoted
performance-based payment and other
to the Company, the Committee undertakes periodic
business-specific cash incentive plans;
reviews and considers the following factors as they put
forward recommendations to the Board: • long-term incentives – e.g. restricted shares
and performance shares; and
• Fees paid by comparable companies;
• retirement schemes.
• Time commitment;
The specifics of these components are described below.
• Responsibilities of the Non-executive Directors; and
• Employment conditions elsewhere in the Company. Fixed Compensation

Details of the remuneration for Non-executive Directors Base salary and allowances are set and reviewed annually.
are set out in note 11 to the accounts. The current The annual review process takes into consideration the
Non-executive Director remuneration framework, in Company’s remuneration policy, competitive market
effect since 1 January 2017, is set out below: positioning, market practice, as well as the Company’s
and the individuals’ performance. Benefits-in-kind
(HK$)
are reviewed as and when appropriate taking into
Board consideration market practices.
– Chairman 1,500,000
– Other Members 300,000 Variable Incentives
Audit Committee and Capital Works Committee The Chief Executive Officer, other Members of the
– Chairman 150,000 Executive Directorate and management of the Company
– Other Members 90,000 are eligible to receive an annual performance-based
Risk Committee, Remuneration Committee, cash incentive under the Company’s Core Incentive
Nominations Committee, and Corporate Scheme (“CIS”), the terms and rules of which are regularly
Responsibility Committee
reviewed by the Remuneration Committee.
– Chairman 110,000
– Other Members 60,000 Under the current scheme rules, the overall CIS funding is
subject to the Company’s performance which is measured
by both financial and non-financial factors including:
Financial Factors
• Operating profit;
• EBITDA margin; and
• Hong Kong property development profits.
134 MTR Corporation

Non-financial Factors business growth. In addition, a one-off special
• Results from Customer satisfaction surveys; discretionary award was granted to all staff except for key
corporate management in 2020 as a token of appreciation
• Fulfillment of the Customer Service Pledges; and for their hard work to keep Hong Kong moving in the past
• Fulfillment of Performance Requirements in relation to year, in spite of the challenges arising from the pandemic.
“Train Service Delivery”, “Passenger Journeys on Time”
and “Train Punctuality” as defined in Schedule 2, Part 1 Long-Term Incentives
of the Operating Agreement. During 2020, the Company maintained the 2007 Share
Option Scheme and the Executive Share Incentive
CIS funding will be automatically reduced if the Company
Overview
Scheme (formerly the “2014 Share Incentive Scheme”).
does not achieve any one or more of the Performance
Requirements. They will also be adjusted subject to the (i) 2007 Share Option Scheme
Company’s achievement of all the Customer Service The 2007 Share Option Scheme was approved and
Pledges. The final payout will then be adjusted based on adopted by shareholders at the Company’s Annual
the performance of individual employees. General Meeting on 7 June 2007 and terminated
Following the end of each year, the Company engages on 6 June 2014. Under the terms of the 2007 Scheme,

an independent expert to conduct a review and audit of no new grant of options could be made after 5:00 p.m.
its performance against the Performance Requirements on 6 June 2014. The Scheme includes a provision which
and Customer Service Pledges. The results of this specifies that options cannot be exercised under the
audit are shared with the Remuneration Committee Scheme unless the Company has satisfied each of the three
to determine if adjustments to the funding under the Key Performance Requirements included in the Operating
scheme are appropriate. Agreement in order for any options to be exercised.
Individual performance ratings are part of the thorough Options exercised and outstanding in respect of each
annual performance assessment process that is applied Member of the Executive Directorate as at 31 December
throughout the Company. The performance ratings and 2020 under the 2007 Scheme are set out under the
assessments reflect the full range of factors over which paragraph “Directors’ Interests in Shares and Underlying
the individual has accountability, including operational, Shares of the Company” of the Report of the Members of
other non-financial and financial factors. Performance for the Board.
the Chief Executive Officer is assessed by the Chairman, Details of the 2007 Scheme and options granted to
and the individual performance ratings for other Members of the Executive Directorate and selected
Members of the Executive Directorate are determined by employees of the Company under the Schemes are set
the Chief Executive Officer. out in notes 11 and 41 to the accounts.
Target incentive levels for the Chief Executive Officer and Financials and Other Information
other Members of the Executive Directorate represent (ii) Executive Share Incentive Scheme
approximately 25-35% of total cash compensation. On 15 August 2014, the Board approved the adoption
of the Executive Share Incentive Scheme, following the
In addition, the Company operates other business-related
expiry of the 2007 Share Option Scheme on 6 June 2014.
incentive schemes to motivate the staff concerned to
The Executive Share Incentive Scheme took effect on
reach specific business targets of the Company.
1 January 2015 for a term of 10 years (unless terminated
earlier by the Company).
Discretionary Awards
In 2020, discretionary awards were provided to The purposes of the Executive Share Incentive Scheme
non-managerial staff with competent or above are to retain management and key employees, to align
performance, as a recognition of their contribution to participants’ interest with the long-term success of the
the Company’s performance and achievements in the Company and to drive the achievement of strategic
past year and to motivate staff to strive for continuous objectives of the Company.

The Remuneration Committee may, from time to time, Retirement Schemes

at its absolute discretion, determine the criteria for any In Hong Kong, the Company operates four retirement
eligible employee to participate in the Executive Share schemes under trust, the MTR Corporation Limited
Incentive Scheme as award holders in accordance with Retirement Scheme (the “MTR Retirement Scheme”),
the rules of the Executive Share Incentive Scheme. An the MTR Corporation Limited Provident Fund Scheme
award holder may be granted an award of Restricted (the “MTR Provident Fund Scheme”) and two Mandatory
Shares and/or Performance Shares. Awards under the Provident Fund (“MPF”) Schemes, the “MTR MPF Scheme”
Executive Share Incentive Scheme were granted to and the “KCRC MPF Scheme”, with details as follows:
selected employees of the Company, including Members
of the Executive Directorate, in 2020. Award holders (i) MTR Retirement Scheme
are entitled to cash dividends accrued in respect of The MTR Retirement Scheme is a defined benefit scheme
unvested Restricted Shares that are granted on or after registered under the Occupational Retirement Schemes
1 January 2018. Ordinance (Cap. 426) (the “ORSO”) and has been granted
Restricted Shares are awarded on the basis of the an MPF Exemption Certificate by the Mandatory Provident
individual performance of the relevant eligible employee Fund Schemes Authority (the “MPFA”).
and vest ratably over three years in equal tranches (unless The MTR Retirement Scheme has been closed to new
otherwise determined by the Remuneration Committee). employees from 1 April 1999 onwards. It is administrated
Performance Shares are awarded which vest subject to in accordance with the Trust Deed and Rules by the Board
the performance of the Company over a pre-determined of Trustees, comprising management and employee
performance period, assessed with reference to such representatives, and independent non-employer
Board-approved performance metric and in respect of trustees. It provides benefits based on the greater of a
such performance period, and any other performance multiple of final salary times service and a factor times
conditions, as determined by the Remuneration the accumulated member contributions with investment
Committee from time to time. returns. Members’ contributions are based on fixed
In general, the Company will pay to the third party trustee percentages of base salary. The Company’s contributions
(the “Trustee”) monies and may give directions or a are determined by reference to an annual actuarial
recommendation to the Trustee to apply such amount valuation carried out by an independent actuarial
of monies and/or such other net amount of cash derived consulting firm.
from shares held as part of the funds of the trust to
(ii) MTR Provident Fund Scheme
acquire existing shares from the market. Such shares will
The MTR Provident Fund Scheme is a defined
be held on trust by the Trustee for the relevant award
contribution scheme registered under the ORSO and
holder. The Trustee shall not exercise any voting rights
has been granted an MPF Exemption Certificate by the
in respect of any shares held in the trust and no award
MPFA. All benefits payable under the MTR Provident Fund
holder is entitled to instruct the Trustee to exercise the
Scheme are calculated by reference to members’ own
voting rights in respect of any unvested award shares.
contributions and the Company’s contributions, together
As part of the overall governance of the Executive with investment returns on these contributions. Both
Share Incentive Scheme, the Company reviews scheme members’ and the Company’s contributions are based on
features on a regular basis to ensure continued relevance fixed percentages of members’ base salary.
and effectiveness.
(iii) MTR MPF Scheme
Details of the Executive Share Incentive Scheme and
The MTR MPF Scheme is a defined contribution scheme
shares granted to Members of the Executive Directorate
covered under an MPF master trust registered with the
and selected employees of the Company under the
MPFA. It covers those employees who did not opt for or
Executive Share Incentive Scheme are set out in notes 11
who are not eligible to join the MTR Retirement Scheme
and 41 to the accounts.
136 MTR Corporation

or the MTR Provident Fund Scheme. Both members and • reviewed and approved restricted share and/or
the Company each contribute to the MTR MPF Scheme performance share awards for eligible employees
at the mandatory levels as required by the Mandatory under the Executive Share Incentive Scheme;
Provident Fund Schemes Ordinance (Cap. 485) (the
• conducted an annual review of the remuneration
“MPFSO”). The Company makes additional contributions
packages for Members of the Executive Directorate,
above the mandatory level for eligible members who
which took effect in July 2020;
joined the MTR MPF Scheme before 1 April 2008, subject
to individual terms of employment. • conducted review on the remuneration packages for
Members of the Executive Directorate, as appropriate;
(iv) KCRC MPF Scheme
Overview
and
The KCRC MPF Scheme is a defined contribution scheme
• approved refinements of the CIS to take effect in
covered under an MPF master trust registered with the
2021 and endorsed the performance metrics which
MPFA. It covers those former KCRC employees who were
determine the vesting of Performance Shares covering
previously members of the KCRC MPF scheme and are
the performance period of 2021-2023 under the
eligible to join the MTR Provident Fund Scheme but opt
Executive Share Incentive Scheme.
to re-join the KCRC MPF Scheme. Both members and the

Company each contribute to the KCRC MPF Scheme at
the mandatory levels as required by the MPFSO. REMUNERATION OF
The Members of the Executive Directorate who were
NON-EXECUTIVE AND
hired by the Company before 1 April 1999 are eligible to EXECUTIVE DIRECTORS
join the MTR Retirement Scheme. Other Members of the The total remuneration of the Members of the Board
Executive Directorate are eligible to join either the MTR and the Executive Directorate (excluding share-based
Provident Fund Scheme or the MTR MPF Scheme. payments) is shown below and the remuneration details
are set out in note 11 to the accounts.
Dr. Jacob Kam, the Company’s Chief Executive Officer
effective from 1 April 2019, participates in the MTR in HK$ million 2020 2019
Provident Fund Scheme. Fees 9.3 10.0
Base salaries, allowances and other
For subsidiary companies in Hong Kong, Macau, the benefits-in-kind 54.2 55.1
Mainland of China, United Kingdom, Sweden and Variable remuneration related to performance 3.5 8.1
Australia, the Group operates retirement schemes Retirement scheme contributions 6.6 6.2
established in accordance with, in the case of subsidiaries Total 73.6 79.4
in Hong Kong, the MPFSO and, in the case of subsidiaries
in Macau, the Mainland of China and overseas, their Please refer to note 11 to the accounts for information
respective local laws and regulations. relating to the five highest paid employees of the Financials and Other Information
Company for the year ended 31 December 2020.
WORK PERFORMED BY THE

REMUNERATION COMMITTEE Dr Dorothy Chan Yuen Tak-fai
DURING THE YEAR Remuneration Committee Chairperson
• Approved the 2019 Remuneration Committee Report Hong Kong, 22 February 2021
as incorporated in the 2019 Annual Report;
• reviewed and approved payouts under the

Company’s performance-based CIS for the 2019
performance period;

BOARD AND EXECUTIVE DIRECTORATE
Full biographies of Members of the Board and the Executive Directorate are available on the Company’s website
(www.mtr.com.hk).
MEMBERS OF THE BOARD
Dr Rex Dr Jacob
Auyeung Pak-kuen* Kam Chak-pui*
Age 68 Age 59
Chairman since 1 July 2019 Chief Executive Officer (“CEO”)

NED since 7 March 2019 since 1 April 2019
Corporate Responsibility Committee (Chairman) Corporate Responsibility Committee (Member)
Nominations Committee (Member)
Remuneration Committee (Member) Dr Kam joined the Company in 1995 and had held various
management positions in the Operations, Projects and
Dr Auyeung is an independent non-executive director of Mainland China and International Business Divisions.
China Construction Bank (Asia) Corporation Limited and
As the CEO, Dr Kam is responsible for all performance
C-MER Eye Care Holdings Limited.
of the Company and its group companies, both in and
Dr Auyeung has over 40 years of experience in the outside Hong Kong.
insurance industry in Canada and Hong Kong. Before his
Dr Kam is the chairman of the Regional and Suburban
retirement in June 2017, Dr Auyeung was Chairman – Asia
Railways Division of the International Association of
of the Principal Financial Group Inc. (“PFG”), a Fortune 500
Public Transport (UITP), a member of the Hong Kong
company, responsible for PFG’s overall businesses in Asia.
Quality Assurance Agency Governing Council, a member
Dr Auyeung also actively serves the public sector and of the board of directors of The Community Chest of
is currently an observer of the Independent Police Hong Kong, a member of the General Committee of The
Complaints Council Observers Scheme, and a member Hong Kong General Chamber of Commerce, and a council
of the Board of Directors of the Investor and Financial member of The Hong Kong Management Association.
Education Council under the Securities and Futures
Dr Kam qualified as a Chartered Engineer in the United
Commission. In addition, he is a board member of Bo
Kingdom in 1989.
Charity Foundation (Food Angel) and a convenor of the
Advisory Committee of the Jockey Club Community
eHealth Care Project.
Dr Auyeung was previously an independent

non-executive director of HSBC Provident Fund Trustee Andrew Clifford
(Hong Kong) Limited, Standard Life (Asia) Limited and Winawer Brandler
Sompo Insurance China Co. , Ltd. , the chairman of Hong Age 64
Kong Strategy for Financial Literacy Sub-committee on
Stakeholder Coordination and Collaboration, a member
of the Independent Review Committee on Hong Kong’s INED since 17 May 2017
Franchised Bus Service, the chairman of the Council of Risk Committee (Chairman)
Lingnan University and the Senior Strategy and Business Audit Committee (Member)
Advisor at Athenex Inc. , a company listed on NASDAQ in
the United States of America. Mr Brandler is the chairman of Sir Elly Kadoorie & Sons
Limited. He was formerly the group managing director
and chief executive officer of CLP Holdings Limited from
2000 to 2013, an executive director between October
138 MTR Corporation
2013 and April 2014, and currently is a non-executive the Court of The Open University of Hong Kong, and an
director of that company. Mr Brandler is also the advisor to Our Hong Kong Foundation.
non-executive deputy chairman of The Hongkong and
Dr Chan was appointed to the Commission on Youth in
Shanghai Hotels, Limited, and a non-executive director of
2004 and was the chairman from 2009 to 2015. He set
Tai Ping Carpets International Limited. He is also currently
up the Hong Kong Association of Youth Development
the Chairman of the Board of Governors of the Chinese
in 2007 and was the former chairman of the Kwun
International School.
Tong District Council and the vice-chairperson of the
Prior to joining CLP Holdings Limited in 2000, Mr Brandler Community Care Fund Task Force of the Commission on
was an investment banker, his last position being Head Poverty. Dr Chan also served on the Financial Reporting
Overview
of Asia Pacific Corporate Finance at Schroders based Council, the Social Welfare Advisory Committee, the
in Hong Kong. He is the former chairman of The Hong Personal Data (Privacy) Advisory Committee, and the
Kong General Chamber of Commerce and a member of Council for Sustainable Development.
the Operations Review Committee of the Independent
Commission Against Corruption.
Mr Brandler is a member of The Institute of Chartered

Accountants in England and Wales.
Walter
Chan Kar-lok
Age 67
Dr Bunny
Chan Chung-bun INED since 22 May 2019
Age 63 Nominations Committee (Member)
Corporate Responsibility Committee (Member)
Mr Chan has been a practising lawyer for over 39 years
INED since 20 May 2020 and is currently a consultant of Messrs. So, Lung &
Corporate Responsibility Committee (Member) Associates, Solicitors and Messrs. Rowland Chow, Chan
& Co. , Solicitors. He is also a China Appointed Attesting
Dr Chan has over 30 years of experience in the garment
Officer. Mr Chan currently is the chairman of The Hong
industry and is the founder and chairman of Prospectful
Kong Housing Society, a convenor-cum-member of the
Holdings Limited. He is an independent non-executive
Pensions Appeal Panel under the Civil Service Bureau,
director of Li Ning Company Limited, Great Harvest
and a member of the Advisory Committee on Post-service
Maeta Group Holdings Limited, Speedy Global Holdings Financials and Other Information
Employment of Civil Servants.
Limited and Glorious Sun Enterprises Limited. Dr Chan is
currently a member of the Hong Kong delegation to the Mr Chan was formerly the chairman of Appeal Tribunal
National People’s Congress of the People’s Republic of (Buildings), a non-executive director of the Urban
China. He is also the chairman and a founding member of Renewal Authority, and a member of the Housing
the Hong Kong Army Cadets Association, the President Authority, the Town Planning Board, the Harbourfront
of the Kowloon Federation of Associations, a member of Commission and the Board of Advisors of Radio Television
Hong Kong.

Community College. She is an independent non-executive

director of AMS Public Transport Holdings Limited, the
chairperson of the Sustainable Agricultural Development
Dr Pamela Fund Advisory Committee, a director of TWGHs E-Co
Chan Wong Shui Village Limited, a Strategy Advisor to the Serco Group
Age 74 (HK) Limited, a member of the Board of Governors of the
Hong Kong Institute for Public Administration, and the
Honorary Fellow of the Chartered Institute of Logistics
INED since 4 July 2013 and Transport (“CILT”).
Nominations Committee (Chairman) Dr Chan was a board member of the Logistics and Supply
Chain MultiTech R&D Centre Limited, a member of the
Social Welfare Advisory Committee and the Advisory
Dr Chan is chairman of The Insurance Complaints Bureau,
Council on Environment of the HKSAR Government, and
vice-chairman of The Boys’ and Girls’ Clubs Association of
the International President, the Global Chairperson and
Hong Kong, an independent director of the Travel Industry
a Global Advisor for Women in Logistics and Transport
Council of Hong Kong, a member of the Judicial Officers
in CILT. She was previously the Deputy Commissioner
Recommendation Commission, chairman of the Advisory
for Transport of Government from 1995 to 2002. From
Committee of the Department of Social Behavioural
2000 to 2002, Dr Chan was the Alternate Director to the
Sciences of City University of Hong Kong and a member of
office of the Commissioner for Transport, a Non-executive
the board of The Community Chest of Hong Kong. She is
Director of the Company.
also patron of Consumers International.
Dr Chan was chief executive of the Consumer Council,

chairman of the Hong Kong Deposit Protection Board,
deputy chairman of the Hong Kong Baptist University
Council and the Court, chairman of the governing
Cheng Yan-kee*
committee of Princess Margaret Hospital, and a member
Age 66
of the Law Reform Commission of Hong Kong, Hospital
Authority, The Hong Kong Housing Authority,
Estate Agents Authority and the Private Columbaria
Appeal Board. INED since 22 May 2019
Capital Works Committee (Chairman)
Remuneration Committee (Member)
Mr Cheng is a practising civil and structural engineer,

Dr Dorothy and an Authorised Person and a Registered Structural
Chan Yuen Tak-fai* Engineer under the Buildings Ordinance. He is also a
Age 71 Class 1 Registered Structural Engineer in the People’s
Republic of China.
INED since 4 July 2013

Remuneration Committee (Chairman)
Capital Works Committee (Member)
Dr Chan is currently the Deputy Director (Administration

and Resources), Head of Centre for Logistics & Transport
and advisor of the International College of the HKU
School of Professional and Continuing Education, and a
council member of HKU SPACE Po Leung Kuk Stanley Ho
140 MTR Corporation

Mr Cheng currently is a director of H. K. Cheng & Partners Dr Chow was previously a non-executive director of
Limited and is a member of the Advisory Committee on China City Construction Group Holdings Limited, an
Post-service Employment of Civil Servants. independent non-executive director of Fountain Set
(Holdings) Limited and the president of The Law Society
Mr Cheng formerly was an independent non-executive
of Hong Kong. He is the former chairman of the Process
director of K. H. Group Holdings Limited, President of the
Review Panel for the Securities and Futures Commission
Institution of Structural Engineers, and Chairman of both
of Hong Kong and the board of stewards of The Hong
the Council of the Hong Kong Baptist University and the
Kong Jockey Club.
Corruption Prevention Advisory Committee under the
Independent Commission Against Corruption. He was
Overview
also a member of the Hospital Authority, Town Planning
Board and Hong Kong Housing Authority.
Dr Eddy
Fong Ching*^
Age 74
Dr Anthony

Chow Wing-kin
Age 70 INED since 13 January 2015
Audit Committee (Chairman)
Nominations Committee (Member)
INED since 18 May 2016

Dr Fong is currently an independent non-executive
director of Standard Chartered Bank (Hong Kong) Limited.
Dr Fong was the non-executive chairman of the
Dr Chow is a solicitor admitted to practise in Hong Kong Securities and Futures Commission from 2006 to 2012
and England and Wales. He has been a practising solicitor
and the past chairman of both the Council of The Open
in Hong Kong for over 34 years and is currently the Senior University of Hong Kong and the Process Review Panel
Consultant and Global Chairman of the law firm Messrs. in relation to the Regulation of Mandatory Provident
Guantao & Chow Solicitors and Notaries. Dr Chow is a Fund Intermediaries. His other past public duties include
China Appointed Attesting Officer and an arbitrator of director of The Hong Kong Mortgage Corporation Limited,
the South China International Economic and Trade the Mandatory Provident Fund Schemes Authority and
Arbitration Commission/Shenzhen Court of International the Exchange Fund Investment Limited; a member of The
Arbitration. He is currently the deputy chairman of the Hong Kong Housing Authority and the Greater Pearl River
Council of The Hong Kong Academy for Performing Arts, Delta Business Council; and a council member of The
a non-executive director of Kingmaker Footwear Holdings Hong Kong Academy for Performing Arts. Dr Fong was
Limited, an independent non-executive director of also a senior audit partner with PricewaterhouseCoopers
S. F. Holding Co., Ltd. and Ping An Healthcare and specialising in capital markets work in Hong Kong and the
Technology Company Limited, and an independent Mainland of China until his retirement in 2003.
director of OneConnect Financial Technology Co., Ltd.
Dr Fong is a member of the Institute of Chartered
Accountants in England and Wales and the Hong Kong
Institute of Certified Public Accountants.

Member of the West Kowloon Cultural District Authority,

and Vice Patron of the Community Chest of Hong Kong.
Ms Lee is a Fellow of The Hong Kong Institute of Bankers.
James
She was previously Vice-Chairman and Chief Executive of
Kwan Yuk-choi#
Hang Seng Bank Limited, Group General Manager of HSBC
Age 69 Holdings plc, Director of The Hongkong and Shanghai
Banking Corporation Limited and Chairman of the Board
of Governors of Hang Seng University. In addition, she
INED since 14 October 2014 was previously Vice President of The Hong Kong Institute
Capital Works Committee (Member) of Bankers, Board Member and Deputy Chairman of the
Risk Committee (Member) Executive Committee of The Community Chest of Hong
Kong, and a member of the Financial Services Advisory
Mr Kwan is currently an independent non-executive
Committee of the Hong Kong Trade Development Council.
director of Towngas China Company Limited.
Mr Kwan was previously a senior adviser, an executive

director and the chief operating officer of The Hong
Kong and China Gas Company Limited, and a director
of Shenzhen Gas Corporation Limited. He was also the Lucia
President of The Institution of Gas Engineers (currently Li Li Ka-lai#
known as The Institution of Gas Engineers & Managers) Age 66
(“IGEM”) in the United Kingdom in 2000/2001 and The
Hong Kong Institution of Engineers (“HKIE”) in 2004/2005.
Mr Kwan is a former member of the Construction INED since 14 October 2014
Industry Council, the Transport Advisory Committee, the Audit Committee (Member)
Vocational Training Council, and the Standing Committee Nominations Committee (Member)
on Disciplined Services Salaries and Conditions of Service
of the HKSAR Government. Mrs Li is a retired civil servant. She was Director of
Accounting Services of the HKSAR Government from
Mr Kwan is a Chartered Engineer.
October 2003 to January 2009. Mrs Li was formerly a
member of the Public Service Commission, a member
of the Communications Authority, a board member
and treasurer of Chung Ying Theatre Company (HK)
Rose Limited, and a member of a task force formed by the
Lee Wai-mun^ Commissioner for Innovation and Technology to follow
up on the Director of Audit’s Report No. 61 with regard to
Age 68
the Small Entrepreneur Research Assistance Programme.
Mrs Li is a Fellow member of the Hong Kong Institute of

INED since 16 May 2018 Certified Public Accountants.
Audit Committee (Member)
Risk Committee (Member)
Ms Lee is an Independent Non-Executive Director of CK

Hutchison Holdings Limited and Swire Pacific Limited. Ms
Lee is also a member of the Election Committee of the
13th National People’s Representative Meeting, a Board
142 MTR Corporation

Chairman of its Broadcast Complaints Committee. He is
also an independent non-executive director of
BE Reinsurance Limited and United Builders Insurance
Jimmy Company, Limited.
Ng Wing-ka
Mr Tang joined the Hong Kong Civil Service in 1974.
Age 51 From the late 1990s to early 2000s, he served as the
Government Printer and the Commissioner of Insurance.
Mr Tang was appointed by the Central Government of
INED since 22 May 2019 the People’s Republic of China as the Director of Audit of
Overview
Capital Works Committee (Member) the HKSAR in December 2003 until he retired in July 2012.
Corporate Responsibility Committee (Member) He was appointed a Commissioner of the Commission of
Inquiry Into the Collision of Vessels Near Lamma Island in
Mr Ng is a solicitor admitted to practise in Hong Kong
2012, and the Commission’s report was presented to the
and currently is a partner of Messrs. Tung, Ng, Tse &
Chief Executive in April 2013.
Lam, Solicitors. He is a Legislative Council member
representing the Industrial (Second) Functional

Constituency. Mr Ng is an independent non-executive
director of Yanchang Petroleum International Limited
and Glorious Sun Enterprises Limited. He is the chairman Johannes
of the Hong Kong – Taiwan Business Co-operation Zhou Yuan
Committee and the HKSAR Passports Appeal Board, a
Age 65
vice-chairman of the Independent Police Complaints
Council, a director of Hong Kong Science and Technology
Parks Corporation, and a member of the Court of The
INED since 17 May 2017
University of Hong Kong, the Council of The Hong Kong
Polytechnic University, the Competition Commission and
the Chinese People’s Political Consultative Conference of
Chongqing City, the People’s Republic of China. Mr Zhou is an independent director of Citibank (China)
Mr Ng was formerly an independent non-executive Co. , Ltd.
director of China Weaving Materials Holdings Limited Mr Zhou retired in June 2016 as Chief Strategic Officer of
and a member of the Small and Medium Enterprises China Investment Corporation (“CIC”). He joined CIC in
Committee of the Trade and Industry Department. 2008 and held a variety of portfolios of responsibilities
including alternative assets, direct investments, asset Financials and Other Information
allocation and finance/treasury. Prior to that, Mr Zhou
led Asia business development at Chicago Mercantile
Exchange. From 2001 to 2005, he worked as a financial
Benjamin
researcher and consultant, working on assignments
Tang Kwok-bun^
ranging in asset management, private equity, hedge
Age 69 funds, risk models, financial software architecture, and
financial market reform, with consulting work done for
INED since 14 October 2014

Mr Tang is Chairman of the Operations Review Committee

and a member of the Advisory Committee on Corruption
of the Independent Commission Against Corruption,
and a member of the Communications Authority and

the China Securities Regulatory Commission, Shanghai Mr Hui was an Administrative Officer in the HKSAR
Futures Exchange and a number of western firms. From Government from 1999 to 2003 and held different
1998 to 2001, Mr Zhou was chief executive officer of positions in the Economic Development Branch, the
HKFE Clearing Corporation Limited and concurrently Office of the HKSAR Government in Beijing and the Home
chief financial officer of Hong Kong Futures Exchange Affairs Department. After he left the HKSAR Government
Limited, responsible for the Exchanges’s finance, in 2003, Mr Hui worked in the banking sector before
treasury, risk and clearing functions. He was UBS AG’s joining Hong Kong Exchanges and Clearing Limited
China country head from 1994 to 1998, responsible for (“HKEx”) in 2006. From 2006 to 2018, Mr Hui held various
the bank’s investment banking, commercial banking, senior positions in the Market Development Division and
asset management and private banking businesses in Listing Division in HKEx and was the Managing Director
China. From 1988 to 1994, Mr Zhou worked at State at the time he left HKEx. He was the Executive Director of
Street Bank in Boston, where he founded and managed FSDC from 2019 to 2020.
the research department. Prior to that, he taught at
Brandeis University, United States of America. Alternate Directors
(i) Joseph Chan Ho-lim (since 1 June 2020)
(ii) Alice Lau Yim (since 1 June 2020)
(iii) Maurice Loo Kam-wah (since 10 August 2020)
Christopher
Hui Ching-yu^
(Secretary for
Financial Services Secretary for
and the Treasury) Transport and
Age 44 Housing@
(Frank Chan Fan)
NED since 1 June 2020
Nominations Committee (Member) Age 63
NED since 1 July 2017
Mr Hui sits on the boards of several public bodies, including Nominations Committee (Member)
Airport Authority Hong Kong, Mandatory Provident Fund Remuneration Committee (Member)
Schemes Authority, The Hong Kong Mortgage Corporation
Limited and West Kowloon Cultural District Authority, Mr Chan, in his official capacity, acts as the chairman
and is the Chairman of the Kowloon-Canton Railway of The Hong Kong Housing Authority and a board
Corporation and an ex-officio member of the Financial member of Airport Authority Hong Kong. He is also a
Services Development Council (“FSDC”) in his official non-executive director of The Hong Kong Mortgage
capacity. He is also, in his official capacity, a director of Corporation Limited.
Hongkong International Theme Parks Limited. In addition, Mr Chan joined the Electrical and Mechanical Services
Mr Hui is a member of the Democratic Alliance for the Department as an Assistant Electronics Engineer in
Betterment and Progress of Hong Kong. August 1982. He was promoted to Chief Electronics
Engineer in February 2001 and to Government Electrical
and Mechanical Engineer in May 2005. Mr Chan was
appointed as the Deputy Director of Electrical and
Mechanical Services in January 2009 and was the Director
of Electrical and Mechanical Services and the General
Manager of the Electrical and Mechanical Services Trading
Fund from December 2011 to June 2017.
144 MTR Corporation

Mr Chan is an Honorary Fellow of the Institution of
Mechanical Engineers, United Kingdom, and a Fellow of
The Hong Kong Institution of Engineers. Commissioner
for Transport@
Alternate Directors (Rosanna
(i) Under Secretary for Transport and Housing Law Shuk-pui)
(Dr Raymond So Wai-man since 25 September 2017) Age 53
(ii) Permanent Secretary for Transport and Housing (Transport)
(Mable Chan since 1 August 2020)
NED since 9 September 2020
Overview
(iii) Deputy Secretaries for Transport and Housing (Transport)
(Amy Wong Pui-man since 14 December 2020 and Risk Committee (Member)
Sharon Yip Lee Hang-yee since 15 July 2019)
Miss Law, in her official capacity as Commissioner for
Transport, also serves as a director of several
transport-related companies including The Kowloon
Permanent Secretary Motor Bus Company (1933) Limited, Long Win Bus
for Development

Company Limited, New World First Bus Services Limited,
(Works)@ New Lantao Bus Company (1973) Limited, Citybus
(Lam Sai-hung) Limited, The “Star” Ferry Company Limited, New Hong
Age 59 Kong Tunnel Company Limited, Western Harbour Tunnel
Company Limited and Route 3 (CPS) Company Limited.
NED since 13 October 2018
Miss Law joined the Hong Kong Government in
1989 and has served in various policy bureaux and
departments, including as Principal Assistant Secretary
Mr Lam joined the Hong Kong Government in August for the Environment, Transport and Works (Transport)
1986 and was the Director of Civil Engineering and (later renamed to Principal Assistant Secretary for
Development from September 2016 to October 2018. Transport and Housing (Transport)) from March 2007 to
August 2009, Deputy Commissioner for Tourism from
Mr Lam is a Fellow of The Hong Kong Institution of August 2010 to September 2016, and Deputy Secretary
Engineers, the Institution of Civil Engineers, United for Constitutional and Mainland Affairs from September
Kingdom, and the China Hong Kong Railway Institution. 2016 to September 2020.
Alternate Director Alternate Director

Deputy Secretary for Development (Works)2 Deputy Commissioner for Transport/Transport Services
(Mak Shing-cheung since 5 October 2016) and Management

(Macella Lee Sui-chun since 1 September 2016)
Notes:
* Also a director of the Company’s subsidiary(ies).
^ Up for retirement by rotation and eligible for re-election/election at the Company’s forthcoming Annual General Meeting (“AGM”).
# Director who will retire after the conclusion of the Company’s forthcoming AGM.
@ Director appointed by the Chief Executive of the HKSAR pursuant to Section 8 of the MTR Ordinance, who is not required to retire by rotation under the Articles
of Association.
INED : independent non-executive director
NED : non-executive director

Members of the Executive Directorate

From left to right:
Linda Choy Siu-min, Margaret Cheng Wai-ching, Dr Tony Lee Kar-yun, Adi Lau Tin-shing, Dr Jacob Kam Chak-pui,
Herbert Hui Leung-wah, Jeny Yeung Mei-chun, David Tang Chi-fai, Gillian Elizabeth Meller, Roger Francis Bayliss
A composite photograph at the Kai Tak Station.
MEMBERS OF THE EXECUTIVE DIRECTORATE
Dr Jacob Kam Chak-pui* Adi Lau Tin-shing*

Age 59 Age 61
Chief Executive Officer (since 1 April 2019) Managing Director – Operations and
Corporate Responsibility Committee (Member) Mainland Business (since 1 January 2020)
His biography is set out on page 138. Mr Lau joined the Company in 1982 and has held
various management positions related to the design,
construction, operations and maintenance of the
Company’s railway system in Hong Kong and the
Company’s rail business in the Mainland of China.
146 MTR Corporation

Roger Francis Bayliss
Age 64
Capital Works Director (since 22 February 2021)
Mr Bayliss joined the Company as Projects Director in

March 2019.
Overview
Mr Bayliss is responsible for leading the Capital Works
Business Unit, overseeing the Company’s capital
works portfolio covering new railway extensions and
operations projects.
Mr Bayliss has over 40 years of experience in project

management, implementation and delivery of large scale

infrastructure and railway projects in Hong Kong, the
Mainland of China and the United Kingdom. Between
1992 and 2004, he worked for the Company and managed
the completion of several construction contracts leading
to the delivery of the Lantau Airport Railway, the Tseung
Kwan O Extension and Ngong Ping 360. In 2004, Mr
Bayliss joined BAA plc. (now known as LHR Airports
Limited), prior to joining Skanska UK in 2007. Before
joining the Company, he was the Senior Vice President
Operational Efficiency (responsible for driving operational
efficiency and the development of a digital business
strategy) at Skanska AB, a company listed in Sweden.
Mr Bayliss is a Fellow of The Hong Kong Institution of

Engineers and the Institution of Civil Engineers in the
Mr Lau is responsible for managing and overseeing the
United Kingdom.
Company’s railway related operations in Hong Kong and
its rail and property businesses in the Mainland of China.
He is also responsible for overseeing railway operations
standards and ensuring mutual sharing and learning
Margaret Cheng Wai-ching*
of best practices among all the Company’s railway
Age 55
operations globally.
Mr Lau is the president of the China Hong Kong

Human Resources Director (since 1 June 2016)
Railway Institution, vice president of the International
Association of Public Transport (UITP) Asia-Pacific
Committee and the former chairman of the UITP
Ms Cheng is responsible for all of the Company’s human
Asia-Pacific Urban Rail Platform.
resources and administration affairs.
Mr Lau is a Chartered Engineer, a Corporate Member of
Ms Cheng is a seasoned human resources practitioner
the Institution of Civil Engineers in the United Kingdom
with rich senior management experience. She took up
and a Fellow of The Hong Kong Institution of Engineers.
different human resources roles in Citibank, N. A. between

1993 and 1997, and was with JP Morgan as Vice President, Ms Choy has extensive experience in public affairs and
Human Resources between 1997 and 2001. From 2001 to communications, public engagement and journalism.
2013, Ms Cheng was with The Hongkong and Shanghai She started her career in 1992 as a reporter for the South
Banking Corporation Limited (“HSBC”) and was Head of China Morning Post (“SCMP”) and later joined the HKSAR
Human Resources, Hong Kong and Global Business, Asia Government as an Administrative Officer, holding a
Pacific when she left HSBC. Before joining the Company, number of positions in various policy bureaux between
she was Group Head of Human Resources of Hong Kong 1998 and 2004. Ms Choy rejoined SCMP as its China News
Exchanges and Clearing Limited. Editor in 2004 and was later promoted to News Editor
before she took on the position of Director, Government
Ms Cheng is serving as the vice chairman of the
Relations of Hong Kong Disneyland Management Limited
Cross-Industry Training Advisory Committee for the
(“HKDML”) in 2007. In 2008, she left this role and was
Human Resource Management Sector under the
appointed by the HKSAR Government as the Political
Qualifications Framework of Education Bureau of
Assistant to the Secretary for the Environment until 2012,
the HKSAR Government; a member of The Standing
after which she rejoined HKDML as its Vice President,
Committee on Disciplined Services Salaries and
Communications & Public Affairs, a position which she
Conditions of Service of the HKSAR Government and
held from 2013 to January 2020.
the chairman of its Police Sub-Committee; a member of
the Labour Advisory Board Committee on Employment Ms Choy is currently the Chairperson of Make-A-Wish
Services of Labour Department of the HKSAR Foundation of Hong Kong Limited, a Non-official
Government; and a member of the Panel of Arbitrators Member of the Community Involvement Committee
appointed under the Labour Relations Ordinance. She on Greening, and a Member of the Board of Advisors of
is also a member of the Hospital Authority, a council Radio Television Hong Kong, the Public Libraries Advisory
member of The Hong Kong Management Association and Committee, and the Advisory Board of The Hong Kong
the Hong Kong Council for Accreditation of Academic Red Cross. She was formerly the President of the Hong
and Vocational Qualifications, and an honorary advisor Kong Association of Amusement Parks and Attractions
of the ERB Manpower Developer Award Scheme of the Limited and the Vice-chairwoman of Lantau Development
Employees Retraining Board. Alliance Limited.
Ms Cheng is currently the President and a Fellow Member of

the Hong Kong Institute of Human Resource Management.
Herbert Hui Leung-wah*
Age 58
Linda Choy Siu-min
Age 50 Finance Director (since 2 July 2016)
Corporate Affairs Director (since 2 March 2020) Mr Hui joined the Company in June 2016.
Corporate Responsibility Committee (Member) Mr Hui is responsible for the financial management of all
of the Company’s affairs, including financial planning and
Ms Choy is responsible for overseeing the Company’s control, budgeting, accounting and reporting, corporate
stakeholder engagement activities, external finance, and the treasury function. He also leads the
communications and corporate responsibility function. Company’s investor relations as well as materials and
stores functions.
148 MTR Corporation

Mr Hui has extensive corporate finance and investment
banking experience. He began his career at Morgan
Stanley Asia Limited in 1988. Mr Hui left in 1990 to pursue Gillian Elizabeth Meller*
a career in corporate finance with Wardley Corporate Age 48
Finance Limited (later known as Corporate, Investment
Banking and Markets Division of The Hongkong and
Legal and Governance Director
Shanghai Banking Corporation Limited) and was the Chief (since 22 February 2021)
Operating Officer, Investment Banking, Asia Pacific and
Co-Head, Corporate Finance Execution when he left in Ms Meller joined the Company in August 2004 as Legal
Overview
2004. He was General Manager – Corporate Finance of Adviser. Prior to her current position, Ms Meller was the
the Company from 2004 to 2011, and the Chief Financial Legal Director & Secretary between September 2011 and
Officer of Digital China Holdings Limited from 2011 to June 2016, and the Legal and European Business Director
2012. Mr Hui was the Chief Financial Officer of K. Wah between July 2016 and February 2021.
International Holdings Limited before re-joining the
Company in 2016. Ms Meller is responsible for overseeing the Company’s
legal, company secretarial, insurance and risk
Mr Hui is a Chartered Financial Analyst.

management functions and a central procurement and
supply chain function. She is also responsible for leading
the Company’s assurance function with the aim of
providing a strengthened second line of defence across
Dr Tony Lee Kar-yun*
key risk areas of the Company.
Age 60
Before joining the Company, Ms Meller was Director of
Legal Services for Metronet Rail SSL Limited in London,
Operations Director (since 1 January 2020)
the United Kingdom, and a solicitor at CMS Cameron
McKenna in London, the United Kingdom.
Dr Lee joined the Company in 1991 and has held
various management positions related to the design, Ms Meller is a vice chairman of the Legal Committee
construction, operations and maintenance of the of The Hong Kong General Chamber of Commerce,
Company’s railway system in Hong Kong. and a member of the Standing Committee on Company
Law Reform.
Dr Lee is responsible for managing the Company’s railway
related operations in Hong Kong. Ms Meller is qualified to practise as a solicitor in Hong
Kong and England and Wales. She is the President of The
Dr Lee is a Chartered Engineer and is a Member of The Hong Kong Institute of Chartered Secretaries.
Hong Kong Institution of Engineers, The Institution Financials and Other Information
of Engineering and Technology and The Hong Kong
Institute of Directors. He is also a Member of the Electrical
Discipline Advisory Panel of The Hong Kong Institution
David Tang Chi-fai*
of Engineers, a Member of the Engineering Discipline
Age 56
Advisory Board of the Hong Kong Institute of Vocational
Education, and an Honorary Advisory Board Member of
the Theme-based Research Scheme Project on “Safety, Property and International Business Director
Reliability, and Disruption Management of High Speed Rail (since 22 February 2021)
and Metro Systems” of the City University of Hong Kong.
Mr Tang joined the Company in August 2004 as Contracts
& Commercial Manager – China Business. Prior to his
current position, Mr Tang was appointed as the Property
Director in October 2011 and the Property and Australian

Business Director in October 2020, and before that he

had held various senior management positions in the
then Legal and Procurement Division, the China and Jeny Yeung Mei-chun*
International Business Division, and the Property Division. Age 56
Mr Tang is responsible for all of the property development
projects, asset and leasing management of investment Commercial Director (since 1 September 2011)
properties (including shopping malls and offices), and
property management business of the Company in Hong Ms Yeung joined the Company in November 1999. She is
Kong, as well as overseeing the Company’s Australian responsible for the marketing of the Company’s railway
and European businesses. He is also accountable for services as well as managing and enhancing the MTR
the business results of the Hong Kong Property and Brand. Ms Yeung is also responsible for customer service
International Business portfolios. development and the management of station shops
rental, advertising media and other non-fare businesses.
Before joining the Company, Mr Tang was Commercial
In addition, she oversees the Company’s business in
Manager – Hong Kong & China Region, and Deputy
Macau and is the Chairlady of Ngong Ping 360 Limited.
General Manager – Hong Kong & China Region for
Ms Yeung is currently a Director of Octopus Holdings
Acciona, S. A. He had close to 20 years’ working
Limited and two members of its group.
experience in contract administration, project
management and quantity surveying in the United Before joining the Company, Ms Yeung held various
Kingdom and Hong Kong after starting his career as a marketing and business development positions in
Group Trainee of George Wimpey Plc. Standard Chartered Bank (Hong Kong) Limited and
Citibank in Hong Kong.
Mr Tang is a co-opted member of the Public Private
Partnership Projects Committee under the Board of the Ms Yeung is a member of the Advisory Committee on
West Kowloon Cultural District Authority and a former Enhancing Self-Reliance Through District Partnership
non-executive director of the Urban Renewal Authority of Programme, the Advisory Committee on Enhancing
the HKSAR Government. He is also an adjunct professor Employment of People with Disabilities, the Marketing
in the Department of Real Estate and Construction at The Management Committee of The Hong Kong Management
University of Hong Kong. Association, the Hong Kong Trade Development Council
Infrastructure Development Advisory Committee
Mr Tang is a Chartered Surveyor.
and the Cyberport Advisory Panel of Hong Kong
Cyberport Management Company Limited (“Hong
Kong Cyberport”), and a non-official member of the
Immigration Department Users’ Committee. She is also an
independent non-executive director of Mox Bank Limited.
Ms Yeung was a director of Hong Kong Cyberport and a
member of the Hong Kong Tourism Board.
Ms Yeung is a Fellow of The Chartered Institute

of Marketing.
* Also a director of the Company’s subsidiary(ies).
150 MTR Corporation

CHANGES IN INFORMATION
Changes in information of Directors during 2020 and up to the date of this Report which are required to be disclosed
pursuant to the Listing Rules are set out below:
(i) Changes in Biographical Details

Nature and
Effective Date of
Name Change(s) Change(s)
Dr Rex Auyeung Pak-kuen The Community Chest of Hong Kong Cessation
• Member of the Investment Sub-committee (22 June 2020)
Overview
HSBC Provident Fund Trustee (Hong Kong) Limited Cessation
• Independent Non-executive Director (14 August 2020)
C-MER Eye Care Holdings Limited Appointment
• Independent Non-executive Director (6 November 2020)
Lingnan University Conferment
• Doctor of Business Administration, honoris causa (19 November 2020)
Dr Bunny Chan Chung-bun Council for Sustainable Development (Hong Kong) Cessation
• Member (1 March 2021)

Walter Chan Kar-lok Radio Television Hong Kong Cessation
• Member of Board of Advisors (1 September 2020)
Dr Pamela Chan Wong Shui Private Columbaria Appeal Board (Hong Kong) Cessation
• Member (29 September 2020)
Dr Dorothy Chan Yuen Tak-fai The Chartered Institute of Logistics and Transport Cessation
• Global Chairperson and Global Advisor for Women in Logistics and Transport (1 July 2020)
Dr Anthony Chow Wing-kin The Hong Kong Academy for Performing Arts Appointment
• Deputy Chairman of the Council (1 January 2020)
The Hong Kong Jockey Club Cessation
• Chairman of the board of stewards (22 June 2020)
OneConnect Financial Technology Co., Ltd. Appointment
• Independent Director (1 October 2020)
Dr Eddy Fong Ching Mox Bank Limited (formerly known as SC Digital Solutions Limited) Cessation
• Independent Non-executive Director (26 July 2020)
Standard Chartered Bank (China) Limited Cessation
• Independent Non-executive Director (4 November 2020)
Christopher Hui Ching-yu The Hong Kong Mortgage Corporation Limited Appointment
• Non-executive Director (25 May 2020)
Jimmy Ng Wing-ka Competition Commission (Hong Kong) Appointment
• Member (1 May 2020)
The University of Hong Kong Appointment
• Member of the Court (5 June 2020) Financials and Other Information
Independent Police Complaints Council (Hong Kong) Appointment

• Vice-Chairman (1 January 2021)
Trade and Industry Department (Hong Kong) Cessation
• Member of the Small and Medium Enterprises Committee (1 January 2021)

(i) Changes in Biographical Details (continued)

Nature and
Effective Date of
Name Change(s) Change(s)
James Henry Lau Jr The Government of the HKSAR Cessation
(Resigned on 1 June 2020) • Secretary for Financial Services and the Treasury (22 April 2020)
Kowloon-Canton Railway Corporation Cessation
• Chairman (22 April 2020)
Hongkong International Theme Parks Limited Cessation
• Director (22 April 2020)
Mandatory Provident Fund Schemes Authority (Hong Kong) Cessation
• Director (22 April 2020)
Airport Authority Hong Kong Cessation
• Board Member (22 April 2020)
West Kowloon Cultural District Authority (Hong Kong) Cessation
• Board Member (22 April 2020)
Financial Services Development Council (Hong Kong) Cessation
• Ex-officio Member (22 April 2020)
The Hong Kong Mortgage Corporation Limited Cessation
• Non-executive Director (25 May 2020)
Benjamin Tang Kwok-bun United Builders Insurance Company, Limited Appointment
• Independent Non-executive Director (13 February 2020)
Communications Authority (Hong Kong) Appointment
• Chairman of the Broadcast Complaints Committee (8 April 2020)
Dr Jacob Kam Chak-pui Vocational Training Council in Hong Kong Cessation
• Council Member (1 July 2020)
The Hong Kong Management Association Appointment
• Council Member (2 July 2020)
Margaret Cheng Wai-ching Hospital Authority (Hong Kong) Appointment
• Member (1 April 2020)
Labour and Welfare Bureau (Hong Kong) Appointment
• Member of Panel of Arbitrators under the Labour Relations Ordinance (1 October 2020)
Linda Choy Siu-min Public Libraries Advisory Committee (Hong Kong) Appointment
The Hong Kong Red Cross Appointment
• Member of the Advisory Board (1 September 2020)
Community Involvement Committee on Greening (Hong Kong) Appointment
• Non-official Member (1 March 2021)
Dr Tony Lee Kar-yun The Hong Kong Institute of Directors Admission
Gillian Elizabeth Meller The Hong Kong Institute of Chartered Secretaries Appointment
• President (1 January 2020)
• Vice-president Cessation
(1 January 2020)
David Tang Chi-fai The University of Hong Kong Appointment
• Adjunct Professor in the Department of Real Estate and Construction (1 June 2020)
Octopus Holdings Limited and two members of its group Cessation
• Director and Alternate Director (1 March 2021)
Jeny Yeung Mei-chun Octopus Holdings Limited and two members of its group Appointment
• Director (1 March 2021)
(ii) Changes in Directors’ Remuneration

For details of the changes in Directors’ remuneration, please refer to pages 215 to 219 of the Annual Report.
152 MTR Corporation

KEY CORPORATE MANAGEMENT
Jacob Kam Chak-pui
Chief Executive Officer
Hong Kong Property & Macau & Mainland China Business
Adi Lau Tin-shing
International Business Macau
Managing Director – Operations & Mainland Business David Tang Chi-fai Jeff Chan Yue-chiu
Property & International Business Director (w.e.f. 22 February 2021) General Manager – Macau Light Rapid Transit
Peter Ewen
Engineering Director (up to 21 February 2021) Australia Mainland China
Capital Works Terry Wong Ping-sau
Deputy Director – Australian Business
Jeremy Xu Muhan
Deputy Director – Mainland China Business
Roger Bayliss
Capital Works Director (w.e.f. 22 February 2021) Raymond O’Flaherty Paul Wong Kah-ming
Chief Executive Officer – Metro Trains Melbourne Chief of Engineering (Beijing)
Andrew Mead
Chief Architect (ARBUK) Nigel Holness Tse Che-ming
Chief Executive Officer – Metro Trains Sydney Chief of Engineering (Hangzhou)
Thomas Lau Ming-yu (up to 19 February 2021)
Chief Design Manager Ronnie Tong Chai-ming
Daniel Williams Deputy General Manager – Operations (Beijing)
Barry Sum Pang-tuen Chief Executive Officer – Metro Trains Sydney
Divisional General Manager – New Projects (w.e.f. 25 January 2021) George Mui Wai-ming
Deputy General Manager – Operations (Hangzhou)
James Chow So-hung Tommy Lam Choi-fung (w.e.f. 1 February 2021)
Divisional General Manager – Projects Construction
Overview
Design & Delivery Director – SMC&SW
Scott Mackenzie Justin Man Wing-fai
David Yam Pak-nin Deputy General Manager – Operations (Shenzhen)
General Manager – Commercial Management General Manager – Business Development
(w.e.f. 22 February 2021) Charles Lau Kam-keung
Peter Leung Man-fat Europe Deputy General Manager – Projects (Beijing)
General Manager – Operations Projects Joakim Sundh Jia Jun
Chief Executive Officer – MTR Express (w.e.f. 8 March 2021) General Manager – Business Development (Mainland China)
Lawrence Chung Kwok-leung
General Manager – Planning & Civil Engineering Mark Jensen Frank Liu Zhui-ming
Chief Executive Officer – MTR Nordic (up to 28 February 2021) General Manager – Hangzhou
Ken Wong Kin-wai
General Manager – Projects Henrik Dahlin Wilson Shao Shing-ming
Chief Executive Officer – MTR Nordic (w.e.f. 1 March 2021) General Manager – Jing-Jin-Ji
Henry Young
General Manager – Projects Management Office Mats Johannesson Oscar Ho Ka-wa
Chief Executive Officer – MTR Pendeltågen (w.e.f. 8 March 2021) General Manager – Mainland China Property
Leung Chi-lap
Head of E&M Construction Erika Enestad Terry Wong Wing-kin

Chief Executive Officer – MTR Tech / Emtrain General Manager – Shenzhen
Wong Sha
Head of E&M Engineering Caroline Astrand
Chief Executive Officer – MTR Tunnelbanan
MTR Academy
Clement Ngai Yum-keung Margaret Cheng Wai-ching
Head of Project Engineering (up to 31 December 2020) Steve Murphy President of MTR Academy (Acting)
Robin Wong Koon-sang Chief Executive Officer – MTR UK
Head of Technical (w.e.f. 22 February 2021) Richard Schofield Operations
Neil Ng Wai-hang Interim Managing Director – MTR Elizabeth Line Tony Lee Kar-yun
Lead Project Manager – SCL Civil – NSL (up to 14 March 2021) Operations Director
Timothy Edmonds Nigel Holness Sammy Wong Kwan-wai
Principal Contracts Administration Manager – HSR Managing Director – MTR Elizabeth Line (w.e.f. 15 March 2021) Chief of Operating
Raymond Au Koon-shan Hong Kong Property Nelson Ng Wai-hung
Principal Contracts Administration Manager – SCL Angus Lee Chun-ming # Chief of Operations Engineering
Chan Chun-sing Chief Executive Officer – OHL Gordon Lam Bik-shun
Project Manager – Rolling Stock Edward Wong Koon-pong Chief Signal Engineer (Operations)
Walter Lam Wai-tak Deputy General Manager – Property Project Joseph Sin Chi-man
Project Manager – SCL Civil – Exhibition Station Debbie Chan Yuen-ping Chief Signalling Design Manager
Tim Leung Chi-tim General Manager – Investment Property (Team 1) Michael Leung Yu-hing
Project Manager – SCL E&M Kenneth Lung Tze-ho Deputy General Manager – Technical & Asset Engineering
Terence Law Che-chung General Manager – Investment Property (Team 2) Chan Hing-keung
Project Manager – Signalling Melissa Pang Mee-yuk Deputy General Manager – Train Services & Systems Engineering
Nelson Yeung Kin-wa General Manager – Property Development Carmen Li Wai-ching
Project Manager – TME Kenny Chow Chun-ling General Manager – HSR & Intercity
Lesly Leung Po-po General Manager – Property Management Ronald Cheng Kin-wai
Project Manager – TUE Wilfred Yeung Sze-wai General Manager – Planning & Development
(up to 31 December 2020)
Commercial & Marketing General Manager – Property Project
Allen Ding Ka-chun
Sharon Liu Chung-gay
Jeny Yeung Mei-chun General Manager – Town Planning (w.e.f. 1 March 2021) General Manager – Planning & Development (w.e.f. 1 January 2021)
Commercial Director Alex Lau Hing-hon
Karen Woo Kit-sum Human Resources & Administration General Manager – Safety & Quality
General Manager – Branding & Marketing Margaret Cheng Wai-ching Manho John-william
Diane Chiu Man Human Resources Director General Manager – Special Duties (up to 31 December 2020)
General Manager – Business Insights & Growth Albert Man Tat-shing Weller Chan Kwok-wai
Annie Leung Ching-man General Manager – Corporate Security General Manager – Works Management
General Manager – Customer Experience Development Doreen Siu Wai-man Ben Lui Gon-yee
Margaret Chu Fung-kuen General Manager – Human Resources Head of Operating – South Region
General Manager – Station Retail Denise Ng Kee Wing-man Cheung Chi-keung
Andy Lau Wai-ming General Manager – Learning & Human Resources Transformation Head of Operating – West Region
Managing Director of Ngong Ping 360 Lillian Ng Lok-yee Siman Tang
Corporate Affairs General Manager – Performance & Reward Head of Operations Strategic Business Management
Linda So Ka-pik Internal Audit Rick Wong Hoi-wah
Head of P-Way Asset Replacement (w.e.f. 1 January 2021)
Corporate Affairs Director (up to 15 January 2020) Paul Chow Yuen-ming
Linda Choy Siu-min Head of Internal Audit Lee Kim-hung
Head of Workshops
Corporate Affairs Director (w.e.f. 2 March 2020) Legal & Governance
Osbert Kwan Wing-cheung Gillian Meller Strategy, Innovation & Technology
Deputy General Manager – Media & Corporate Communications Legal & Governance Director (w.e.f. 22 February 2021) Jerry Li Zhe
Lam Chan Lam-sang Stephen Hamill Deputy Director – Strategy, Innovation & Technology
Deputy General Manager – Projects & Property Communications Chief Engineer (w.e.f. 22 February 2021) Ted Suen Yiu-tat
Eric Lee Ka-chun Brian Downie Chief Information Officer
General Manager – Public Affairs Deputy Director – Legal, Procurement & Supply Chain Sylvia Ng Yuen-hung
Finance (w.e.f. 22 February 2021) General Manager – Corporate Strategy
Roger Lee Chak-man Daniel Wong
Herbert Hui Leung-wah General Manager – Corporate Safety (w.e.f. 16 February 2021) General Manager – Global Innovation
Finance Director
Cecilia Cheng Yuet-fong Raymond Yuen Lap-hang
Sammy Jim Kwok-wah General Manager – Governance & Risk Management Transformation Lead – Hong Kong Core Business
General Manager – Corporate Finance
Linda Li Sau-lin Vinnie Chi Man-yan
Dennis Tam Lup-kwan General Manager – Legal (Property) Transformation Lead – People
General Manager – Financial Control
Nicholas Zhang Xiaolong Cheris Lee Yuen-ling
Candy Ng Chui-lok General Manager – Procurement & Supply Chain Transformation Programme Manager
Head of Investor Relations & Retirement Benefits (w.e.f. 22 February 2021)
David Pang Hoi-hing Vincent Simon Ho
Treasurer Head of Corporate Safety (up to 31 December 2020)
# Mr. Angus Lee is seconded to Octopus Holdings Limited and Octopus Cards Limited to take up the role of Chief Executive Officer.

REPORT OF THE MEMBERS
OF THE BOARD
The Members of the Board have pleasure in submitting their Report and the audited statement of Consolidated Accounts
for the financial year ended 31 December 2020.
PRINCIPAL ACTIVITIES OF THE GROUP

The Group is principally engaged in the following core businesses: railway design, construction, operation, maintenance
and investment in Hong Kong, Macau, the Mainland of China and a number of overseas cities; project management in
relation to railway and property development businesses in Hong Kong and the Mainland of China; station commercial
business including leasing of station retail space, leasing of advertising space inside trains and stations, and enabling of
telecommunication services on the railway system in Hong Kong; property business including property development and
investment, management and leasing management of investment properties (including shopping malls and offices) in
Hong Kong and the Mainland of China; investment in Octopus Holdings Limited; and provision of railway management,
engineering and technology training.
The principal businesses of the Company’s principal subsidiaries and associates as at 31 December 2020 are set out in
notes 23 and 24 to the Consolidated Accounts.
BUSINESS REVIEW
The Company has always been committed to providing comprehensive reviews of the Group’s businesses and
performance in its Annual Reports. A summary of the relevant sections in the Company’s Annual Report 2020 covering the
required disclosures under the Companies Ordinance is set out below for ease of reference.
Required Disclosures Relevant Sections
(1) A fair review of the Group’s businesses and a discussion and an • Chairman’s Letter (pages 12 to 15)
analysis of the Group’s performance during the financial year 2020 • CEO’s Review of Operations and Outlook (pages 16 to 35)
• Business Review (pages 36 to 73)
• Financial Review (pages 84 to 93)
(2) Particulars of important events affecting the Group that have • Chairman’s Letter (pages 12 to 15)
occurred since the end of the financial year 2020 • CEO’s Review of Operations and Outlook (pages 16 to 35)
(3) Description of the significant risks and uncertainties facing • CEO’s Review of Operations and Outlook (pages 16 to 35)
the Group • Business Review (pages 36 to 73)
• Risk Management (pages 126 to 129)
• Financial Risks – note 27B to the Consolidated Accounts (pages 240
to 241)
(4) Outlook for the Group’s businesses • Chairman’s Letter (pages 12 to 15)
• CEO’s Review of Operations and Outlook (pages 16 to 35)
(5) Details regarding the Group’s compliance with relevant laws and • Corporate Governance Report (pages 98 to 122)
regulations which have a significant impact on the Group
(6) Description of the Group’s relationships with its key stakeholders • Chairman’s Letter (pages 12 to 15)
• CEO’s Review of Operations and Outlook (pages 16 to 35)
• Investor Relations (pages 96 to 97)
• Corporate Responsibility (pages 74 to 79)
• Human Resources (pages 80 to 82)
• Sustainability Report 2020 (www.mtr.com.hk)
(7) Description of the Group’s environmental policies • Chairman’s Letter (pages 12 to 15)
and performance • CEO’s Review of Operations and Outlook (pages 16 to 35)
• Corporate Responsibility (pages 74 to 79)
• Sustainability Report 2020 (www.mtr.com.hk)
154 MTR Corporation

DIVIDENDS
The Board has recommended to pay a final dividend of HK$0.98 per share (2019: HK$0.98 per share) and proposes that
a scrip dividend option will be offered to all shareholders of the Company (except for those with registered addresses
in New Zealand or the United States of America or any of its territories or possessions). Subject to the approval of the
shareholders at the Company’s forthcoming annual general meeting (“AGM”), the proposed 2020 final dividend, with a
scrip dividend option, is expected to be distributed on 20 July 2021 to shareholders whose names appear on the Register
of Members of the Company as at the close of business on 4 June 2021.
ACCOUNTS
Overview
The financial position of the Group as at 31 December 2020 and the Group’s financial performance and cash flows for the
year are set out in the Consolidated Accounts on pages 190 to 270.
TEN-YEAR STATISTICS
A summary of the results and of the assets and liabilities of the Group together with some major operational statistics for
the last ten years are set out on pages 94 to 95.

DIRECTORS
Members of the Board (including Alternate Directors) and the Executive Directorate as at the date of this Report are stated below:

• Dr Rex Auyeung Pak-kuen (Chairman) • Secretary for Transport and Housing
• Dr Jacob Kam Chak-pui (CEO) (Frank Chan Fan)
• Andrew Clifford Winawer Brandler Alternate Directors:
• Dr Bunny Chan Chung-bun – Under Secretary for Transport and Housing
• Walter Chan Kar-lok (Dr Raymond So Wai-man)
• Dr Pamela Chan Wong Shui
– Permanent Secretary for Transport and Housing (Transport)
• Dr Dorothy Chan Yuen Tak-fai (Mable ChanNote 1)
• Cheng Yan-kee – Deputy Secretaries for Transport and Housing (Transport)
• Dr Anthony Chow Wing-kin (Amy Wong Pui-manNote 2 and Sharon Yip Lee Hang-yee)
• Dr Eddy Fong Ching
• James Kwan Yuk-choi • Permanent Secretary for Development (Works)
• Rose Lee Wai-mun (Lam Sai-hung)
• Lucia Li Li Ka-lai Alternate Director:
• Jimmy Ng Wing-ka – Deputy Secretary for Development (Works)2
• Benjamin Tang Kwok-bun (Mak Shing-cheung)
• Johannes Zhou Yuan Financials and Other Information
• Christopher Hui Ching-yu • Commissioner for Transport
(Secretary for Financial Services and the Treasury) (Rosanna Law Shuk-puiNote 3)
Alternate Directors: Alternate Director:
– Joseph Chan Ho-lim – Deputy Commissioner for Transport /
– Alice Lau Yim Transport Services and Management
– Maurice Loo Kam-wah (Macella Lee Sui-chun)
Notes
1 Change of holder of the post from Joseph Lai Yee-tak to Mable Chan with effect from 1 August 2020.
2 Change of holder of the post from Kevin Choi to Amy Wong Pui-man with effect from 14 December 2020.
3 Change of holder of the post from Mable Chan (ceased on 1 August 2020) to Rosanna Law Shuk-pui (appointed on 9 September 2020).

• Dr Jacob Kam Chak-pui (CEO) • Herbert Hui Leung-wah (Finance Director)
• Adi Lau Tin-shing (Managing Director – • Dr Tony Lee Kar-yun (Operations Director)
Operations and Mainland Business) • Gillian Elizabeth Meller (Legal and Governance Director)
• Roger Francis Bayliss (Capital Works Director) • David Tang Chi-fai (Property and International
• Margaret Cheng Wai-ching (Human Resources Director) Business Director)
• Linda Choy Siu-min (Corporate Affairs Director) • Jeny Yeung Mei-chun (Commercial Director)
The biographies of each Member of the Board and the Executive Directorate as at the date of this Report are set out on
pages 138 to 150.

REPORT OF THE MEMBERS OF THE BOARD
In addition, resolutions for electing Mr Hui Siu-wai and Mr Adrian Wong Koon-man as new Directors will be proposed at
the 2021 AGM. Please refer to the Company’s circular containing the Notice of the 2021 AGM sent together with this Report.
Members of the Board, the Alternate Director(s) and Members of the Executive Directorate who were directors/alternate
director(s) during the course of 2020 but have since ceased their position with the Company are stated below:
• Dr Allan Wong Chi-yun (retired on 20 May 2020) • Linda So Ka-pik (resigned on 16 January 2020)
• James Henry Lau Jr (resigned on 1 June 2020) • Dr Peter Ronald Ewen (retired on 22 February 2021)
• Andrew Lai Chi-wah (ceased on 25 July 2020)
DIRECTORS OF SUBSIDIARY UNDERTAKINGS

The directors of the subsidiary undertakings of the Company during the year and up to the date of this Report (unless
otherwise stated) are listed on page 184.
DIRECTORS’ SERVICE CONTRACTS

No Director proposed for election or re-election at the forthcoming AGM has a service contract which is not
determinable by the Company or any of its subsidiaries within one year without payment of compensation, other than
statutory compensation.
DIRECTORS’ MATERIAL INTERESTS IN TRANSACTIONS,

ARRANGEMENTS OR CONTRACTS
Except for, in respect of Mr James Henry Lau Jr (up to 31 May 2020) and Mr Christopher Hui Ching-yu (since 1 June 2020)
(Secretary for Financial Services and the Treasury), Secretary for Transport and Housing (Mr Frank Chan Fan), Permanent
Secretary for Development (Works) (Mr Lam Sai-hung), and Commissioner for Transport (Ms Mable Chan (up to 31
July 2020) and Miss Rosanna Law Shuk-pui (since 9 September 2020)), all of whom were officials of Government, those
connected transactions and continuing connected transactions between the Company and Government (and/or its
associates) which are described on pages 161 to 182, there was no transaction, arrangement or contract of significance
in relation to the Group’s business, to which the Company or any of its subsidiary undertakings was a party and in which
a Member of the Board or a Member of the Executive Directorate or an entity connected with him/her had a material
interest (whether direct or indirect), which was entered into during the year or subsisted at any time during the year.
DIRECTORS’ INTERESTS IN SHARES AND UNDERLYING SHARES OF

THE COMPANY
As at 31 December 2020, the interests or short positions of the Members of the Board and the Executive Directorate in the
shares, underlying shares and debentures of the Company (within the meaning of Part XV of the Securities and Futures
Ordinance (Cap. 571 of the Laws of Hong Kong) (“SFO”)) as recorded in the register required to be kept under section 352
of the SFO or as otherwise notified to the Company and the HKSE pursuant to the Model Code set out in Appendix 10 of
the Listing Rules (the “Model Code”) were as follows:
No. of share No. of award Percentage
No. of Ordinary Shares held options# shares# of aggregate
Members of the Board/ interests to
Alternate Directors/ total no. of
Members of the Personal Family Other Personal Personal Total voting shares
Executive Directorate interests* interests† interests interests* interests* interests in issueD
Dr Jacob Kam Chak-pui 312,837 – – – 391,618 704,455 0.01140
Dr Pamela Chan Wong Shui 9,072 1,675 – – – 10,747 0.00017
(Note 1)
Cheng Yan-kee – 2,000 – – – 2,000 0.00003
(Note 1)
Rose Lee Wai-mun 3,350 – – – – 3,350 0.00005
156 MTR Corporation

DIRECTORS’ INTERESTS IN SHARES AND UNDERLYING SHARES OF
THE COMPANY (continued)
No. of share No. of award Percentage
No. of Ordinary Shares held options# shares# of aggregate
Members of the Board/ interests to
Alternate Directors/ total no. of
Members of the Personal Family Other Personal Personal Total voting shares
Executive Directorate interests* interests† interests interests* interests* interests in issueD
Lucia Li Li Ka-lai – 1,614 2,215 – – 3,829 0.00006
(Note 1) (Note 2)
Alice Lau Yim 1,116 – – – – 1,116 0.00002
Overview
Maurice Loo Kam-wah 588 – – – – 588 0.00001
Mak Shing-cheung 558 8,058 – – – 8,616 0.00014
(Note 1)
Dr Raymond So Wai-man – 1,675 – – – 1,675 0.00003
(Note 1)
Adi Lau Tin-shing 138,637 – – – 105,868 244,505 0.00396
Roger Francis Bayliss – – – – 60,400 60,400 0.00098
Margaret Cheng Wai-ching 133,371 – – – 99,802 233,173 0.00377
Dr Peter Ronald Ewen 99 – – – 89,368 89,467 0.00145

Herbert Hui Leung-wah 57,109 2,233 – – 93,434 152,776 0.00247
(Note 1)
Dr Tony Lee Kar-yun 41,910 – – 47,500 34,168 123,578 0.00200
Gillian Elizabeth Meller 127,347 – – – 91,734 219,081 0.00354
David Tang Chi-fai 211,084 – – – 98,885 309,969 0.00501
Jeny Yeung Mei-chun 681,886 – – – 99,784 781,670 0.01265
Notes
As at 31 December 2020,
1 these shares were held by the Director’s spouse.
2 the 2,215 shares were jointly held by Mrs Lucia Li Li Ka-lai and her spouse.
# Details of the share options and award shares are set out in the sections headed “2007 Share Option Scheme” and “Executive Share Incentive Scheme”, respectively, on
pages 158 to 159
* Interests as beneficial owner
† Interests of spouse or child under 18 as beneficial owner
D The Company’s total number of voting shares in issue as at 31 December 2020 was 6,180,927,873
Save as disclosed above and in the sections headed “2007 Share Option Scheme” and “Executive Share Incentive Scheme”:
A as at 31 December 2020, no Member of the Board or the Executive Directorate of the Company had any interest or
short position in the shares, underlying shares or debentures of the Company or any of its associated corporations
(within the meaning of Part XV of the SFO); and
B during the year ended 31 December 2020, no Member of the Board or the Executive Directorate of the Company nor Financials and Other Information
any of their spouses or children under 18 years of age held any rights to subscribe for equity or debt securities of the
Company nor had there been any exercises of any such rights by any of them,
as recorded in the register kept by the Company under section 352 of the SFO or otherwise notified to the Company and
the HKSE pursuant to the Model Code.
SUBSTANTIAL SHAREHOLDERS’ INTERESTS

Set out below is the name of the party which was interested in 5% or more of all the Company’s voting shares in issue and
the number of shares in which it was interested as at 31 December 2020 as recorded in the register kept by the Company
under section 336 of the SFO:
No. of Percentage of Ordinary Shares to all

Name Ordinary Shares held the voting shares in issueD
The Financial Secretary Incorporated (“FSI”) 4,634,173,932 74.98%
(in trust on behalf of Government)
D The Company’s total number of voting shares in issue as at 31 December 2020 was 6,180,927,873

The Company has been informed by the Hong Kong Monetary Authority that, as at 31 December 2020, approximately
0.30% of the Ordinary Shares in issue (not included in the FSI shareholding set out in the above table) 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.
OTHER PERSONS’ INTERESTS

Pursuant to section 337 of the SFO, the Company has maintained a register recording the shareholding information
provided by persons in response to the Company’s requests pursuant to section 329 of the SFO.
Save as disclosed above and in the sections headed “Directors’ Interests in Shares and Underlying Shares of the Company”
and “Substantial Shareholders’ Interests”, as at 31 December 2020, the Company has not been notified of any other
persons who had any interests or short positions in the shares or underlying shares of the Company which would be
required to be recorded in the register kept by the Company pursuant to section 336 of the SFO.
2007 SHARE OPTION SCHEME

Movements in the outstanding share options to subscribe for Ordinary Shares granted under the 2007 Share Option
Scheme during the year ended 31 December 2020 are set out below:
Weighted
average
closing price
of shares
immediately
before the
Options Exercise Options date(s)
Members of the Options outstanding Options Options Options price per outstanding on which
Executive granted Period during which as at vested lapsed exercised share of as at options were
Directorate and Date (Notes rights exercisable 1 January during the during the during the options 31 December exercised
eligible employees granted 1 to 3) (day/month/year) 2020 year year year (HK$) 2020 (HK$)
Adi Lau Tin-shing 30/5/2014 80,000 23/5/2015 – 23/5/2021 26,000 – – 26,000 28.65 – 42.50
Dr Tony Lee Kar-yun 30/5/2014 71,500 23/5/2015 – 23/5/2021 47,500 – – – 28.65 47,500 –
Other eligible 6/5/2013 20,331,500 26/4/2014 – 26/4/2020 1,385,500 – – 1,385,500 31.40 – 42.08
employees 30/5/2014 19,812,500 23/5/2015 – 23/5/2021 3,450,000 – 14,000 1,136,000 28.65 2,300,000 41.86
Notes
1 No option may be exercised later than seven years after its date of offer and no option may be offered to be granted more than seven years after the adoption of the 2007
Share Option Scheme on 7 June 2007. The 2007 Share Option Scheme expired at 5.00 p.m. on 6 June 2014, with no further option granted since then.
2 Unless approved by shareholders in the manner as required by the Listing Rules, the total number of shares issued and issuable upon exercise of the options granted to
any eligible employee under the 2007 Share Option Scheme together with the total number of shares issued and issuable upon the exercise of any option granted to such
eligible employee under any other share option scheme of the Company (including, in each case, both exercised and outstanding options) in any 12-month period must
not exceed 0.2% of the shares of the Company in issue at the date of offer in respect of such option under the 2007 Share Option Scheme.
3 The share options granted were subject to a vesting schedule in tranches of one-third each per annum starting from the first anniversary of the date of offer of the options
(the “Offer Anniversary”) and became fully vested on the third Offer Anniversary.
4 Pursuant to the terms of the 2007 Share Option Scheme, each grantee undertakes to pay HK$1.00, on demand, to the Company, in consideration for the grant of the options.
5 Other details of the 2007 Share Option Scheme are set out in notes 11B and 41(i) to the Consolidated Accounts.
EQUITY-LINKED AGREEMENT
Save as disclosed in the section headed “2007 Share Option Scheme” above, no equity-linked agreements were entered
into during the year ended 31 December 2020 or subsisted at the end of the year.
EXECUTIVE SHARE INCENTIVE SCHEME

The Company adopted the Executive Share Incentive Scheme with effect from 1 January 2015 (“Effective Date”) for a term
of ten years. Further details on the purposes and operation of the Executive Share Incentive Scheme are set out in the
section headed “Long-Term Incentives” under the Remuneration Committee Report (pages 135 to 136) and notes 11C and
41(ii) to the Consolidated Accounts in this Report.
The maximum number of award shares that may at any time be the subject of an outstanding award granted under the
Executive Share Incentive Scheme shall not exceed 2.5% of the number of issued Ordinary Shares as at the Effective Date.
158 MTR Corporation

The particulars of the award shares granted are as follows:
Types of award
shares granted
Award shares Award shares Award shares
(Note 1)
outstanding lapsed and/or outstanding
Members of the Restricted Performance as at Award shares forfeited as at
Executive Directorate and Date of shares shares 1 January vested during during 31 December
eligible employees award (Note 2) (Note 3) 2020 the year the year 2020
Dr Jacob Kam Chak-pui 10/4/2017 22,050 – 7,350 7,350 – –
10/4/2018 25,550 50,450 67,484 8,516 – 58,968
1/4/2019 120,000 – 120,000 – – 120,000
8/4/2019 47,400 91,750 139,150 15,800 – 123,350
Overview
8/4/2020 89,300 – – – – 89,300
Adi Lau Tin-shing 10/4/2017 17,700 25,050 5,900 5,900 – –
10/4/2018 16,450 50,450 61,417 5,483 – 55,934
8/4/2019 16,250 – 16,250 5,416 – 10,834
8/4/2020 39,100 – – – – 39,100
Roger Francis Bayliss 8/4/2019 – 30,150 30,150 – – 30,150
8/4/2020 30,250 – – – – 30,250

Margaret Cheng Wai-ching 10/4/2017 16,950 30,400 5,650 5,650 – –
10/4/2018 17,600 50,450 62,184 5,866 – 56,318
8/4/2019 16,550 – 16,550 5,516 – 11,034
8/4/2020 32,450 – – – – 32,450
Dr Peter Ronald Ewen 10/4/2017 15,050 – 5,018 5,018 – –
10/4/2018 12,250 50,450 58,617 4,083 – 54,534
8/4/2019 12,500 – 12,500 4,166 – 8,334
8/4/2020 26,500 – – – – 26,500
Herbert Hui Leung-wah 10/4/2017 15,200 30,400 5,068 5,068 – –
10/4/2018 14,200 50,450 59,917 4,733 – 55,184
8/4/2019 13,800 – 13,800 4,600 – 9,200
8/4/2020 29,050 – – – – 29,050
Dr Tony Lee Kar-yun 10/4/2017 6,800 – 2,268 2,268 – –
10/4/2018 7,900 10,500 15,767 2,633 – 13,134
8/4/2019 8,300 – 8,300 2,766 – 5,534
8/4/2020 15,500 – – – – 15,500
Gillian Elizabeth Meller 10/4/2017 16,200 – 5,400 5,400 – –
10/4/2018 16,050 50,450 61,150 5,350 – 55,800
8/4/2019 13,400 – 13,400 4,466 – 8,934
8/4/2020 27,000 – – – – 27,000 Financials and Other Information
David Tang Chi-fai 10/4/2017 17,250 – 5,750 5,750 – –
10/4/2018 16,850 50,450 61,684 5,616 – 56,068
8/4/2019 17,200 – 17,200 5,733 – 11,467
8/4/2020 31,350 – – – – 31,350
Jeny Yeung Mei-chun 10/4/2017 17,700 – 5,900 5,900 – –
10/4/2018 17,350 50,450 62,017 5,783 – 56,234
8/4/2019 16,350 – 16,350 5,450 – 10,900
8/4/2020 32,650 – – – – 32,650
Other eligible employees 10/4/2017 2,100,300 26,350 547,682 538,582 9,100 –
10/4/2018 2,064,750 1,358,800 2,314,805 599,955 139,534 1,575,316
8/4/2019 1,780,400 122,750 1,835,300 624,783 83,639 1,126,878
8/4/2020 1,981,600 6,950 – 70,800 51,400 1,866,350
Notes
1 The award shares to be granted under the Executive Share Incentive Scheme are issued Ordinary Shares.
2 Restricted shares are awarded to selective eligible employees and vest over three years in equal tranches (unless otherwise determined by the Remuneration Committee).
3 Performance shares are awarded to eligible employees generally on a three-year performance cycle, subject to review and approval by the Remuneration Committee from
time to time.

SHARES ISSUED
No. of Ordinary Consideration/Value
Shares issued (HK$)
As at 31 December 2019 6,157,948,911 N/A
Shares issued under the 2007 Share Option Scheme 2,547,500 77 million
(Further details can be found in note 41(i) to the Consolidated Accounts) (received by the Company)
Scrip shares issued in respect of 2019 final dividend 18,426,649 692 million
Scrip shares issued in respect of 2020 interim dividend 2,004,813 81 million
As at 31 December 2020 6,180,927,873 N/A
Details of the movements in share capital of the Company during the year are set out in note 38 to the Consolidated Accounts.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

The Group did not purchase, sell or redeem any of the Group’s listed securities during the year ended 31 December
2020. However, the Trustee of the Executive Share Incentive Scheme, pursuant to the terms of the rules and the trust
deed of the Executive Share Incentive Scheme, purchased on the HKSE a total of 2,020,000 Ordinary Shares for a total
consideration of approximately HK$86 million during the year ended 31 December 2020 (2019: HK$88 million).
PUBLIC FLOAT
The HKSE granted to the Company, at the time of its listing on the Main Board of the HKSE in 2000, a waiver from
strict compliance with Rule 8.08(1) of the Listing Rules (“Public Float Waiver”). Pursuant to the Public Float Waiver, the
Company’s prescribed minimum percentage of shares which must be in the hands of the public must not be less than
10% of the total number of issued shares of the Company. Based on the information that is publicly available to the
Company and within the knowledge of the Directors, the Company has maintained the prescribed amount of public float
during the year and up to the date of this Report as required by the Public Float Waiver.
MAJOR SUPPLIERS AND CUSTOMERS

Information in respect of the Group’s major suppliers and major customers for the year ended 31 December 2020 is as follows:
As a percentage of
the Group’s total supplies
Total value of supplies (not of a capital nature) attributable to the Group’s five largest suppliers 19.94%
As a percentage of
the Group’s total revenue
Total revenue attributable to the Group’s five largest customers 38.95%
Total revenue attributable to the Group’s largest customer 16.49%
As at 31 December 2020, no Members of the Board or the Executive Directorate or any of their respective close associates
or any shareholder including the FSI, the substantial shareholder of the Company (which, to the knowledge of the
Members of the Board or the Executive Directorate, owned more than 5% of all the Company’s voting shares in issue), had
any beneficial interests in the Group’s five largest customers.
DONATIONS
During the year, the Group donated and sponsored approximately HK$15.4 million (2019: approximately HK$12.7 million)
to charitable and other organisations.
160 MTR Corporation

BANK OVERDRAFTS, CONNECTED TRANSACTIONS
BANK LOANS AND During the year under review, the transactions described
OTHER BORROWINGS below were entered into with Government (which is a

substantial shareholder of the Company as defined in
The total borrowings of the Group as at 31 December
the Listing Rules). Government is therefore a “connected
2020 amounted to HK$50,340 million (2019: HK$39,456
person” of the Company for the purposes of the Listing
million). Particulars of the borrowings are set out in
Rules, and each transaction described below is a connected
note 32 to the Consolidated Accounts.
transaction for the Company under the Listing Rules.
Overview
BONDS AND NOTES ISSUED As disclosed in the announcement of the Company
dated 13 January 2005, the Stock Exchange has granted
The Group issued notes with total face value amounting a waiver to the Company from strict compliance with
to HK$14,642 million equivalent during the year the requirements of Chapter 14A of the Listing Rules
ended 31 December 2020 (2019: HK$1,183 million which would otherwise apply to connected transactions
equivalent), details of which are set out in note 32C to and continuing connected transactions between the
the Consolidated Accounts. Such notes were issued in Company and Government, subject to certain conditions
order to meet the Group’s general corporate funding

(the “Waiver”).
requirements, including financing of capital expenditure
and refinancing of debts. Consequently, the Company makes the disclosures below
in accordance with Rule 14A.71 of the Listing Rules and in
accordance with the conditions of the Waiver.
LOAN AGREEMENTS WITH
COVENANT RELATING TO Land Agreements
SPECIFIC PERFORMANCE OF THE A On 14 February 2020, the Company accepted an
CONTROLLING SHAREHOLDER offer dated 30 December 2019 from Government to

proceed with the proposed LOHAS Park Package Twelve
As at 31 December 2020, the Group had borrowing of
Property Development at Site D of The Remaining Portion
HK$500 million (2019: HK$32,183 million) with maturity in
of Tseung Kwan O Town Lot No. 70 subject to payment
2022 and no undrawn committed banking facility (2019:
of a land premium of HK$2,725,000,000 and on the terms
HK$5,568 million), which were subject to the condition
and conditions of the relevant modification to New Grant
that Government, being the Company’s controlling
No. 9689.
shareholder, owns more than half of all the Company’s
voting shares in issue. Failure to satisfy such condition B On 6 November 2020, the Company accepted an
may result in immediate repayment of the borrowings offer dated 29 September 2020 from Government to
being demanded and cancellation of the undrawn proceed with the proposed LOHAS Park Package Thirteen Financials and Other Information
committed banking facilities. Property Development at Site KL of The Remaining

Portion of Tseung Kwan O Town Lot No. 70 subject to
payment of a land premium of HK$5,568,000,000 and on
PROPERTIES the terms and conditions of the relevant modification to
Particulars of the principal investment properties and New Grant No. 9689.
properties held for sale of the Company are shown on
pages 53 to 54. C On 8 February 2021, the Company accepted an offer
dated 29 December 2020 from Government to proceed
with the proposed Wong Chuk Hang Station Package
Five Property Development at Site E of Aberdeen Inland
Lot No. 467 subject to payment of a land premium of
HK$6,437,310,000 and on the terms and conditions of the
relevant Conditions of Exchange No. 20304.

CONTINUING CONNECTED I Merger-related Continuing

TRANSACTIONS Connected Transactions
Each of the transactions listed in paragraphs A to C below
During the year under review, the following transactions
of this section (together, the “Merger-related Continuing
and arrangements described below involved the
Connected Transactions”) and which formed part of
provision of goods or services carried out on an ongoing
the Rail Merger, was approved by the independent
or recurring basis and are expected to extend over a
shareholders of the Company at an Extraordinary General
period of time with Government and/or KCRC, the Airport
Meeting held on 9 October 2007. These paragraphs
Authority (the “AA”) and Leighton Contractors (Asia)
should be read in conjunction with the paragraphs
Limited (“LCAL”).
contained in the section headed “Additional Information
As noted above under the section headed “Connected in respect of the Rail Merger”.
Transactions”, Government is a substantial shareholder of
As disclosed in the circular issued by the Company on
the Company for the purposes of the Listing Rules. KCRC
3 September 2007 in connection with the Rail Merger,
and the AA are both associates of Government and they
the Stock Exchange granted a waiver to the Company
are also connected persons of the Company as defined in
from strict compliance with the requirements under
the Listing Rules.
Chapter 14A of the Listing Rules which would otherwise
Metro Trains Melbourne Pty. Ltd. is a company apply to continuing connected transactions between the
incorporated in Australia, which is wholly owned by Metro Company, Government and/or KCRC arising as a result
Trains Australia Pty Ltd (“MTA”). The Company, UGL Rail of the Rail Merger, subject to certain conditions (the
Services Pty Limited (“UGL”) and John Holland MTA Pty “Merger-related Waiver”).
Ltd (“JHMTA”) own 60%, 20% and 20% respectively of
MTA and are, therefore, substantial shareholders of MTA. A Merger Framework Agreement
Accordingly, UGL and JHMTA are connected persons of The Merger Framework Agreement was entered into on
the Company. 9 August 2007 between the Company, KCRC and the Secretary
for Transport and Housing and the Secretary for Financial
Since both UGL and LCAL are indirect wholly owned
Services and the Treasury for and on behalf of Government.
subsidiaries of CIMIC Group Limited, LCAL is an associate
of UGL and is also a connected person of the Company. The Merger Framework Agreement contains provisions
for the overall structure and certain specific aspects of the
Therefore, each of Government, KCRC, the AA and LCAL
Rail Merger, including in relation to:
is a “connected person” of the Company for the purposes
of the Listing Rules and, during 2020, each transaction • a seamless interchange programme;
set out at sections I, II III, IV and V below constituted a
• corporate governance of the Company Post-Rail
continuing connected transaction for the Company under
Merger;
the Listing Rules.
• payments relating to property enabling works;
In accordance with the Guidance Letter GL 73-14 issued
by the Stock Exchange and taking into account the Stock • arrangements relating to the establishment
Exchange’s recommendation, the Company’s Internal of a rolling programme on the level of flat
Audit Department (“IAD”) has reviewed the Company’s production arising from tenders for railway
continuing connected transactions set out below and the property development;
related internal control procedures. IAD found that the • arrangements in relation to the assessment of land
internal control procedures put in place by the Company premium amounts;
were adequate and effective and reported the same
• arrangements in relation to the employees of the
to the Audit Committee of the Company to assist the
Company and KCRC, including provisions preventing
Company’s Independent Non-executive Directors in their
the Company from terminating the employment of
annual review and confirmation required to be given
relevant frontline staff for any reason that relates
pursuant to the Merger-related Waiver (as defined below),
to the process of integrating the operations of the
the Waiver and the Listing Rules (as appropriate).
Company and KCRC;
162 MTR Corporation

• the implementation of certain fare reductions; C Property Package Agreements
• arrangements in relation to the proposed Shatin to Category 2A Properties
Central Link; On 9 August 2007, Government entered into an
undertaking that it would issue to KCRC an offer for
• KCRC’s continuing responsibility for its existing
the grant at nil premium of Government leases in
financial arrangements;
respect of the land upon which certain properties
• treatment of KCRC’s cross border leases; (the “Category 2A Properties”) are situated (the “said
• the payment of HK$7.79 billion in respect of the Government Leases”). The Category 2A Properties were
Property Package Agreements (as described in held by KCRC as vested land under the Kowloon-Canton
Overview
paragraph C on pages 163 to 164 and in paragraph Railway Corporation Ordinance (Cap. 372 of the Laws of
E in the section headed “Additional Information in Hong Kong). On 9 August 2007, KCRC entered into an
respect of the Rail Merger” below); undertaking that it would, immediately after the grant of
the said Government Leases referred to in the preceding
• the allocation of liability for any Pre-Rail Merger and sentence, enter into agreements for sale and purchase
Post-Rail Merger claims by third parties; and to sell the Category 2A Properties to the Company (the
• the Company’s retention of its English name and “said Agreements for Sale and Purchase”). Assignments

(pursuant to the Rail Merger Ordinance) the change of of the Category 2A Properties to the Company shall then
its Chinese name to “香港鐵路有限公司”. take place pursuant to the said Agreements for Sale and
Purchase (the “said Assignments”).
B West Rail Agency Agreement
The said Government Leases were issued to KCRC
The West Rail Agency Agreement and related agreements
respectively on 27 March 2009 and 31 March 2009. The
were entered into on 9 August 2007 between the
said Agreements for Sale and Purchase were entered into
Company, KCRC and certain KCRC subsidiary companies
between KCRC and the Company on 27 March 2009 and
(the “West Rail Subsidiaries”). Pursuant to the terms of the
31 March 2009 respectively and the said Assignments to
West Rail Agency Agreement, the Company was appointed:
the Company were executed on 27 March 2009 and
• to act as KCRC’s agent, and donee under powers of 31 March 2009 respectively. Deeds of Mutual Grant were
attorney, to exercise certain rights and perform certain also entered into between the Company and KCRC on
obligations relating to specified development sites 27 March 2009 and 31 March 2009 respectively setting
along West Rail; and out the easements, rights, entitlements, privileges and
liberties of the Company and KCRC in the land on which
• to act as agent for, and donee under powers of
the Category 2A Properties are situated.
attorney from, each of the West Rail Subsidiaries to
exercise certain rights and perform certain obligations Category 2B Property
relating to specified development sites along West Rail. On 9 August 2007, Government entered into an
The Company will receive an agency fee of 0.75% of the undertaking that it would issue to the Company an offer
gross sale proceeds in respect of the unawarded West for the grant of a Government Lease of a certain property
Rail development sites and 10% of the net profits accrued (the “Category 2B Property”) on terms to be agreed.
to the West Rail Subsidiaries under the development The basic terms offer for the Category 2B Property (i.e.
agreements in respect of the awarded West Rail Trackside Villas) was issued and accepted by the Company
development sites. The Company will also recover from on 31 December 2009 and Government Lease in respect
the West Rail Subsidiaries its costs (including internal of Tai Po Town Lot No. 199 dated 29 March 2010 was
costs) incurred in respect of the West Rail development issued for a term of 50 years from 2 December 2007.
sites plus 16.5% on-cost, together with interest
accrued thereon.

Category 3 Properties KCRC is required to account for revenue received in

On 9 August 2007, the Company entered into three respect of a Category 3 Property by way of balance sheet
agreements (the “Category 3 Agreements”) and related movement (rather under its profit and loss account),
powers of attorney with KCRC. Each Category 3 provided that such treatment is permitted under law and
Agreement relates to a certain property (each a accounting principles and practices.
“Category 3 Property”). KCRC has previously entered into
KCRC shall not take any action in respect of a Category 3
a development agreement in respect of each Category 3
Property which is not carried out by the Company
Property. None of the rights and obligations granted to or
(acting as KCRC’s agent), or according to the Company’s
undertaken by the Company under the Category 3
instructions, or otherwise in accordance with the terms of
Agreements may be exercised or performed by the
the Category 3 Agreement.
Company if they relate exclusively to the concession
property situate on any Category 3 Property. Matters As consideration for acting as KCRC’s agent, the Company
affecting the concession property situate on any shall be paid a fee which is expected to be similar in
Category 3 Property are dealt with under the terms quantum to the profits made by KCRC in respect of the
of the Service Concession Agreement (as defined and relevant Category 3 Property (after deducting certain
summarised on pages 180 to 181). initial and upfront payments and consultant contribution
costs, in each case paid or to be paid by the relevant
Pursuant to the terms of each Category 3 Agreement, the
developer to KCRC). Generally, the Company’s fee shall
Company has been appointed to act as KCRC’s agent,
be payable in instalments promptly following receipt
and donee under powers of attorney, to exercise rights
of relevant funds by KCRC (but subject to specified
and to perform obligations of KCRC which relate to the
deductions of amounts due from KCRC to the relevant
Category 3 Property (but excluding the right or obligation
Category 3 Property developer).
to dispose of the relevant Category 3 Property).
The Company has agreed to give certain indemnities to
The Company is required at all times to comply with
KCRC in respect of each Category 3 Property.
statutory restrictions and obligations binding on KCRC
which relate to the Category 3 Properties, and shall pay The Company shall be the first manager, or shall ensure
all amounts due and payable from KCRC which have been that a manager is appointed in respect of, each Category
incurred by KCRC as a result of the Company’s actions. 3 Property (once developed).
In acting as KCRC’s agent, the Company is required to act The Company’s appointment as agent shall terminate
according to prudent commercial principles, and aim to when KCRC ceases to have any undivided share in the
maximise gross profits under the Category 3 Properties relevant Category 3 Property, other than concession
and to run a safe and efficient railway. In order to assist property, and neither KCRC nor the developer nor
the Company in performing its agency functions, KCRC the guarantors have any further rights to exercise,
has granted powers of attorney to the Company. The or obligations to perform, under the development
Company may only use the powers of attorney to exercise agreement relating to the relevant Category 3 Property.
rights and perform obligations conferred or undertaken
by it under the relevant Category 3 Agreement. As well
II Non Merger-related Continuing
as acting as KCRC’s agent, the Company has the right to Connected Transactions
give KCRC instructions in respect of any action or matter The following disclosures, in paragraphs A1 to D below
relating to each Category 3 Property (including its related of this section together with the Third XRL Agreement
development agreement) which the Company is unable (as defined below) (together, the “Non Merger-related
to take by reason of the limitation of the scope of its Continuing Connected Transactions”), are made in
agency powers. KCRC is required to comply promptly with accordance with the conditions of the Waiver and Rule
those instructions provided that it is permitted under law, 14A.71 of the Listing Rules.
and under the relevant Government grant, to carry out
those instructions.
164 MTR Corporation

A1 Entrustment Agreement for Design and A2 Entrustment Agreement for Advance Works
Site Investigation in relation to the Shatin to relating to the Shatin to Central Link
Central Link The Entrustment Agreement for Advance Works relating
The Entrustment Agreement for Design and Site Investigation to the Shatin to Central Link (the “Second SCL Agreement”)
in relation to the Shatin to Central Link (the “First SCL was entered into on 17 May 2011 between the Company
Agreement”) was entered into on 24 November 2008 and the Secretary for Transport and Housing for and on
between the Company and the Secretary for Transport behalf of Government.
and Housing for and on behalf of Government.
The Second SCL Agreement contains the following
The First SCL Agreement contains provisions for the provisions:
Overview
design of and site investigation and procurement
• in consideration of the Company executing or procuring
activities in relation to the proposed Shatin to Central
the execution of certain entrustment activities as set
Link, including in relation to:
out in the Second SCL Agreement and carrying out its
• Government’s obligation to pay the Company up to other obligations under the Second SCL Agreement,
a maximum aggregate amount of HK$1,500 million Government shall pay to the Company the Company’s
in respect of certain costs incurred by the Company project management cost. The amount of such project

pursuant to the First SCL Agreement, including the management cost is to be agreed between the Company
Company’s in-house design costs and certain on-costs and Government and prior to such agreement, the
and preliminary costs; project management cost shall be paid by Government
• Government’s obligation to bear and finance the total to the Company on a provisional basis calculated in
cost of the design and site investigation activities accordance with the Second SCL Agreement;
under the First SCL Agreement (subject to the limit • the Company and Government may agree that the
noted above in respect of payments to the Company) Company will carry out (or procure the carrying out of)
and arrangements for the payment of these costs certain additional works for Government (such agreed
directly by Government; additional works being “miscellaneous works”).
• the Company’s obligation to carry out or procure the Miscellaneous works (if any) are to be carried out by the
carrying out of the design and site investigation activities Company in the same manner as if they had formed
in relation to the proposed Shatin to Central Link; part of the activities specified to be carried out under
the Second SCL Agreement and in consideration of the
• the limitation of the Company’s liability to Company executing or procuring the execution of such
Government under the First SCL Agreement, except miscellaneous works (if any) and carrying out its other
in respect of death or personal injury caused by the obligations under the Second SCL Agreement in relation
negligence of the Company, to HK$600 million; and to such miscellaneous works (if any), Government shall
• should the railway scheme for the Shatin to Central pay to the Company an amount to be agreed between
Link be authorised under the Railways Ordinance the Company and Government as being the project
(Cap. 519 of the Laws of Hong Kong), the execution of management fee payable to the Company for designing
a further agreement by Government and the Company and constructing such miscellaneous works;
setting out each of their rights, obligations, duties and • Government shall bear all of the “Works Cost” (as
powers with respect to the financing, construction, defined in the Second SCL Agreement). In this
completion, testing, commissioning and putting into connection, Government will make payments to the
service the works necessary for the construction and Company in respect of the Works Cost on a provisional
operation of the Shatin to Central Link. basis, subject to adjustments when the final outturn
cost of the Works Cost is determined;

• Government shall bear land acquisition, clearance and • the Company warrants that:
related costs and those costs which are incurred by
– in the case of those activities under the Second SCL
the Lands Department in connection with the Shatin
Agreement that relate to the provision of project
to Central Link project;
management services, such activities shall be carried
• the maximum aggregate amount payable by out with the skill and care reasonably to be expected
Government to the Company under the Second SCL of a professional and competent project manager;
Agreement is limited to approximately HK$3,000
– in the case of those activities under the Second SCL
million per annum and a total in aggregate of
Agreement that relate to the provision of design
approximately HK$15,000 million;
services, such activities shall be carried out with
• the Company shall carry out or procure the carrying out the skill and care reasonably to be expected of a
of certain enabling works on the expanded Admiralty professional and competent design engineer; and
Station and the to be constructed Ho Man Tin Station,
– in the case of those activities under the Second
the reprovisioning of the International Mail Centre
SCL Agreement that relate to the carrying out of
from Hung Hom to Kowloon Bay and other works as
construction activities, such activities shall be carried
described under the Second SCL Agreement;
out with the skill and care reasonably to be expected
• the Company’s total liability to Government under the of, and by utilising such plant, goods and materials
First SCL Agreement and the Second SCL Agreement, reasonably to be expected from, a competent and
except in respect of death or personal injury caused workmanlike construction contractor; and
by the negligence of the Company, is limited to the
• Government further undertakes to use reasonable
aggregate fees that have been and will be received by
endeavours to provide the Company with assistance of
the Company from Government under the First SCL
a non-financial nature, including taking all reasonable
Agreement and the Second SCL Agreement;
steps to procure that all necessary licences and
• the Company will provide to Government by the end consents, required in connection with the design,
of each calendar month, a progress report on the construction and operation of the Shatin to Central Link
activities under the Second SCL Agreement that were are given or granted.
carried out in the immediately preceding calendar
month and, within three months following the A3 Entrustment Agreement for Construction and
completion of the relevant works, a final report on the Commissioning of the Shatin to Central Link
activities required to be carried out under the Second The Entrustment Agreement for Construction and
SCL Agreement; Commissioning of the Shatin to Central Link (the “Third
SCL Agreement”) was entered into on 29 May 2012
• the Company shall be responsible for the care of all
between the Company and the Secretary for Transport
works constructed under the Shatin to Central Link
project from the commencement of construction until
the date of handover of those works to Government The Third SCL Agreement contains the following
and for completing or procuring the completion provisions:
of any outstanding works and/or defective works • in consideration of the Company executing or
identified prior to the handover of the works; procuring the execution of certain entrustment
• during the period of twelve years following the issue activities as set out in the Third SCL Agreement and
of a certificate of completion by the Company in carrying out its other obligations under the First
respect of work carried out under any contract with SCL Agreement and the Second SCL Agreement,
any third party, the Company shall be responsible Government shall pay to the Company the Company’s
for the repair of any defects in such work that are project management cost. The amount of the project
identified following the expiry of any defects liability management cost is HK$7,893 million and will be paid
period under the relevant contract; by Government to the Company on a quarterly basis;
166 MTR Corporation

• the Company and Government may agree that the • the Company will provide to Government by the
Company will carry out (or procure the carrying out of) end of each calendar month, a progress report on
certain additional works for Government (such agreed the activities under the Third SCL Agreement that
additional works being “miscellaneous works”). were carried out in the immediately preceding
Miscellaneous works (if any) are to be carried out by the calendar month and, within three months following
Company in the same manner as if they had formed the handover of the Shatin to Central Link project to
part of the activities specified to be carried out under Government, a final report on the activities required to
the Third SCL Agreement and in consideration of the be carried out under the Third SCL Agreement;
Company executing or procuring the execution of such
Overview
miscellaneous works (if any) and carrying out its other
works constructed under the Shatin to Central Link
obligations under the Third SCL Agreement in relation
project from the commencement of construction until
to such miscellaneous works (if any), Government
the date of handover of those works to Government
shall pay to the Company an amount to be agreed
and for completing or procuring the completion of any
between the Company and Government as being the
outstanding works and/or defective works identified
project management fee payable to the Company for
prior to the handover of the works;
designing and constructing such miscellaneous works;

• during the period of twelve years following the issue of
• Government shall bear certain “Third Party Costs”, any
a certificate of completion by the Company in respect
“Interface Works Costs” and any “Direct Costs” (each as
of work carried out under any contract with any third
defined in the Third SCL Agreement);
party, the Company shall be responsible for the repair
• Government shall bear land acquisition, clearance and of any defects in such work that are identified following
related costs and those costs which are incurred by the expiry of any defects liability period under the
the Lands Department in connection with the Shatin relevant contract;
to Central Link project;
• the Company warrants that:
• the maximum aggregate amount payable by
– in the case of those activities under the Third SCL
Government to the Company under the Third SCL
Agreement that relate to the provision of project
Agreement is limited to HK$3,000 million per annum
management services, such activities shall be carried
and a total in aggregate of HK$15,000 million;
out with the skill and care reasonably to be expected
• the maximum aggregate amount payable by the of a professional and competent project manager;
Company to Government under the Third SCL
– in the case of those activities under the Third SCL
Agreement in relation to its contribution to certain
railway works under the Third SCL Agreement is
limited to HK$4,000 million per annum and a total in
the skill and care reasonably to be expected of a
aggregate of HK$15,000 million;
professional and competent design engineer; and
• the Company’s total liability to Government under
– in the case of those activities under the Third
the First SCL Agreement, the Second SCL Agreement
SCL Agreement that relate to the carrying out
and the Third SCL Agreement, except in respect of
of construction activities, such activities shall
death or personal injury caused by the negligence of
be carried out with the skill and care reasonably
the Company, is limited to the aggregate fees that
to be expected of, and by utilising such plant,
have been and will be received by the Company from
goods and materials reasonably to be expected
Government under the First SCL Agreement, the
from, a competent and workmanlike construction
Second SCL Agreement and the Third SCL Agreement;
contractor; and

• Government further undertakes to use reasonable completion, testing, commissioning and putting into
endeavours to provide the Company with assistance of service the works necessary for the construction and
a non-financial nature, including taking all reasonable operation of the Express Rail Link.
steps to procure that all necessary licences and
consents, required in connection with the design, B2 Entrustment Agreement for Construction,
construction and operation of the Shatin to Central Link Testing and Commissioning of the Express Rail Link
are given or granted. The Entrustment Agreement for the Construction and
Commissioning of the Express Rail Link was entered
B1 Entrustment Agreement for Design and Site into on 26 January 2010 between the Company and the
Investigation in relation to the Express Rail Link Secretary for Transport and Housing for and on behalf of
The Entrustment Agreement for Design and Site Government (the “Second XRL Agreement”).
Investigation in relation to the Express Rail Link (the “First
The scheme in respect of the Express Rail Link was first
XRL Agreement”) was entered into on 24 November 2008
gazetted under the Railways Ordinance (Cap. 519 of
between the Company and the Secretary for Transport
the Laws of Hong Kong) on 28 November 2008, with
amendments and corrections gazetted on 30 April 2009.
The First XRL Agreement contains provisions for the The scheme, as amended with such minor modifications
design of and site investigation and procurement as deemed necessary, was authorised by the Chief
activities in relation to the proposed Express Rail Link, Executive in Council on 20 October 2009 and funding
including in relation to: support approved by the Finance Committee on
16 January 2010.
• Government’s obligation to pay the Company, up to
a maximum aggregate amount of HK$1,500 million, The Second XRL Agreement contains the following
in respect of certain costs incurred by the Company provisions:
pursuant to the First XRL Agreement, including the
• in consideration of the Company executing or
Company’s in-house design costs and certain on-costs,
procuring the execution of certain entrustment
preliminary costs and recruited staff costs;
activities as set out in the Second XRL Agreement
• Government’s obligation to bear and finance the total and carrying out its other obligations under the
cost of the design and site investigation activities Second XRL Agreement and the First XRL Agreement,
under the First XRL Agreement (subject to the limit Government shall pay to the Company HK$4,590
noted above in respect of payments to the Company) million (further details relating to the amendments to
and arrangements for the payment of these costs this provision are set out in the section headed “The
directly by Government; Third Agreement in relation to the Express Rail Link”),
to be paid in cash quarterly in advance on a scheduled
• the Company’s obligation to carry out or procure
basis as such sum may be varied in accordance with
the carrying out of the design and site investigation
the Second XRL Agreement, subject to the maximum
activities in relation to the proposed Express Rail Link;
payment limits stated in the Second XRL Agreement
• the limitation of the Company’s liability to (being HK$2,000 million annually and HK$10,000
Government under the First XRL Agreement, except million in total) (the “Maximum Payment Limits”);
in respect of death or personal injury caused by the
• the Company and Government may agree that the
negligence of the Company, to HK$700 million; and
Company will carry out (or procure the carrying
• should the railway scheme for the Express Rail Link be out of) certain additional works for Government
authorised under the Railways Ordinance (Cap. 519 (such agreed additional works being “miscellaneous
of the Laws of Hong Kong), the execution of a further works”). Miscellaneous works (if any) are to be carried
agreement by Government and the Company setting out by the Company in the same manner as if they
out each of their rights, obligations, duties and had formed part of the activities specified to be
powers with respect to the financing, construction, carried out under the Second XRL Agreement and in
168 MTR Corporation

consideration of the Company executing or procuring – in the case of those activities under the Second
the execution of the miscellaneous works (if any) and XRL Agreement that relate to the carrying out of
carrying out its other obligations under the Second XRL construction activities, such activities shall be carried
Agreement in relation to the miscellaneous works (if out with the skill and care reasonably to be expected
any), Government shall pay to the Company an amount of, and by utilising such plant, goods and materials
equal to an agreed fixed percentage of third party costs reasonably to be expected from, a competent and
attributable to the miscellaneous works from time to workmanlike construction contractor;
time subject to the Maximum Payment Limits;
• Government is required to bear (i) any costs payable
• the Company will provide to Government by the to third parties, (ii) any charges, costs or amounts
Overview
end of each calendar month, a progress report on payable to any Government department, bureau,
the activities under the Second XRL Agreement agency or body in relation to the activities to be
that were carried out in the immediately preceding carried out under the Second XRL Agreement, (iii) any
calendar month and, within three months following and all amounts payable to KCRC as compensation for
the earlier of handover of the Express Rail Link project damage arising as a result of the Company and/or a
to Government or termination of the Second XRL third party contractor carrying out activities under the
Agreement, a final report on the activities required to Second XRL Agreement; and (iv) all land acquisition,

be carried out under the Second XRL Agreement; clearance and related costs (including all amounts
arising as a result of any claim for compensation by
any third party) and those costs which are incurred
works constructed under the Express Rail Link project
by the Lands Department in connection with the
from the commencement of construction until the
Express Rail Link project (further details relating to
date of handover of those works to Government
the amendments to this provision are set out in the
(or to a third party directed by Government) and
section headed “The Third Agreement in relation to
for completing or procuring the completion of any
the Express Rail Link”); and
outstanding works and/or defective works identified
prior to the handover of the works; • Government further undertakes to use reasonable
endeavours to provide the Company with assistance
• during the period of twelve years following the issue
of a non-financial nature, including taking all
of a certificate of completion by the Company in
reasonable steps to procure that all necessary licences
respect of work carried out under any contract with
and consents, required in connection with the design,
any third party, the Company shall be responsible
construction and operation of the Express Rail Link are
for the repair of any defects in such work that are
given or granted.
identified following the expiry of any defects liability
period under the relevant contract; Government had agreed that the Company would
proceed with the construction, testing and commissioning
• the Company warrants that:
of the Express Rail Link (pursuant to and on the terms of
– in the case of those activities under the Second the Second XRL Agreement) on the understanding that
XRL Agreement that relate to the provision of the Company would be invited to undertake the operation
project management services, such activities shall of the Express Rail Link under the concession approach.
be carried out with the skill and care reasonably
to be expected of a professional and competent The Third Agreement in relation to the Express
project manager; Rail Link
On 30 November 2015, Government and the Company
– in the case of those activities under the Second XRL
entered into the deed of agreement relating to the further
funding and completion of the Express Rail Link project
(the “Third XRL Agreement”). The Third XRL Agreement
the skill and care reasonably to be expected of a
contains an integrated package of terms and provides that:
professional and competent design engineer; and

(i) Government will bear and finance the project cost up “System”) for a seven-year period (the “Existing Contract”),
to HK$84.42 billion; effective from 6 July 2013. It is expected that the highest
amount per year receivable from the AA under the
(ii) if the project cost exceeds HK$84.42 billion, the
Existing Contract will be no more than HK$85 million.
Company will bear and finance the portion which
exceeds that sum (if any), except for certain agreed The Existing Contract contains provisions relating to
excluded costs; the operation and maintenance by the Company of the
System and the carrying out by the Company of certain
(iii) the Company will pay a special dividend of HK$4.40 in
specified services in respect of the System, they include
aggregate per share in two equal tranches (of HK$2.20
the following:
per share, in cash in each tranche);
• provisions stating that the duration of the Existing
(iv) certain amendments will be made to the existing
Contract shall be seven years from 6 July 2013 up to
entrustment arrangements entered into in 2010
and including 5 July 2020;
relating to the Express Rail Link, including an increase
in the project management fee payable to the • provisions relating to the performance of scheduled
Company to HK$6.34 billion; maintenance works and overhaul of the System by
the Company;
(v) Government reserves the right to refer to arbitration,
after commencement of operations on the Express • provisions relating to monitoring the System for
Rail Link, the question of the Company’s liability for any breakdown and the Company providing repair
the current cost overrun (if any); and services where necessary;
(vi) the Third XRL Agreement was subject to (a) the • provisions relating to the standards to which the
obtaining of approval of the Company’s independent Company must operate the System;
shareholders (which was obtained on 1 February 2016)
• provisions relating to the carrying out by the
and (b) the obtaining of approval of the Legislative
Company (as additional services), in certain
Council for Government’s additional funding
circumstances, of upgrade work on the System; and
obligations (which was obtained on 11 March 2016).
• provisions relating to the operations of and
The first tranche of the special dividend of HK$2.20 per
maintenance for the extension of the System to the
share was distributed on 13 July 2016 and the second
Midfield Concourse.
tranche, also of HK$2.20 per share, was distributed on
12 July 2017. With the outbreak of COVID-19 and its disruptions to the
aviation industry, the Existing Contract was extended
Pursuant to the Third XRL Agreement, certain
for 6 months to 5 January 2021 and, on 2 July 2020, the
amendments have been made to the Second XRL
Company entered into a new contract with the AA for
Agreement to reflect the arrangements contained in the
the maintenance of the System for a seven-year period
Third XRL Agreement, including (i) amendments to the
(“the New Contract”) effective from 6 January 2021. It is
arrangements for the bearing and financing of the project
expected that the highest amount per year receivable
cost; and (ii) an increase in the project management cost
from the AA will be no more than HK$130 million under
payable to the Company to an aggregate of HK$6.34
the New Contract.
billion (which reflects the estimate of the Company’s
expected internal costs in performing its obligations in The New Contract contains provisions relating to the
relation to the Express Rail Link project). operation and maintenance by the Company of the
System and the carrying out by the Company of certain
C1 Maintenance Agreements for the Automated specified services in respect of the System, they include
People Mover System at the Hong Kong the following:
International Airport
• provisions stating that the duration of the New
On 5 July 2013, the Company entered into a contract with
Contract shall be seven years from 6 January 2021 up to
the AA for the maintenance of the Automated People
and including 5 January 2028;
Mover system at the Hong Kong International Airport (the
170 MTR Corporation

• provisions relating to the performance of scheduled testing and commissioning by the Company of the
maintenance works and overhaul of the System by railway works required in order to bring the West
the Company; Island Line into operation in accordance with the MTR
Ordinance, the Operating Agreement between the
• provisions relating to monitoring the System for any
Company and the Secretary for Transport and Housing
breakdown and the Company providing repair services
for and on behalf of Government dated 9 August 2007
where necessary;
and the WIL Project Agreement. The West Island Line will
• provisions relating to the standards to which the be owned, operated and maintained by the Company for
Company must operate the System; its own account for the period of the Company’s railway
Overview
• provisions relating to the carrying out by the Company franchise. The final payment certificate was issued on
(as additional services), in certain circumstances, of 28 June 2019.
upgrade work on the System; and The WIL Project Agreement includes provisions in
• provisions of operational training and corresponding relation to:
qualifications to the AA’s personnel. • payment by Government of HK$12,252 million to
the Company in consideration of the Company’s
C2 Subcontractor Warranty to the AA

obligations under the WIL Project Agreement, such sum
On 18 May 2018, the Company provided a sub-contractor
constituting funding support from Government for the
warranty to the AA as a result of obtaining a subcontract
Company to implement the West Island Line project;
from Niigata Transys Co., Ltd. (“NTS”) for the modification
works of the existing System for a seven-year period, • within 24 months of commercial operations
effective from 25 September 2017 (the “Subcontract”). It commencing on the West Island Line on a revenue
is expected that the highest amount per year receivable earning basis and providing scheduled transport for
from NTS will be no more than HK$60 million. the public (which period was extended to no later
than 30 June 2018 by a supplemental agreement
The Subcontract contains provisions covering the
between the Company and Government dated
provision and modification of the power distribution,
23 December 2016, further extended for a period
communication and control subsystems in respect of the
ended on or before 31 March 2019 by a second
System, which includes the following:
supplemental agreement between the Company
• modification of the existing System for its extension to and Government dated 29 June 2018, and further
the new Automated People Mover Interchange Station; extended for a period ended on 30 June 2019 by a
third supplemental agreement between the Company
• provision of related electrical and mechanical
and Government dated 29 March 2019), payment
systems, including power distribution system,
by the Company to Government of any “Repayment
telecommunication systems and maintenance Financials and Other Information
Amounts” for any over-estimation of certain capital
equipment; and
expenditure, price escalation costs, land costs and
• relocation of existing maintenance equipment to the the amount of contingency in relation to the railway
new Automated People Mover depot. works and reprovisioning, remedial and improvement
works (together with interest);
D Project Agreement for the Financing, Design,
Construction and Operation of the West Island Line • the design, construction and completion of the
The Project Agreement for the Financing, Design, associated reprovisioning, remedial and improvement
Construction and Operation of the West Island Line works (the cost of which shall be the responsibility
(the “WIL Project Agreement”) was entered into on of the Company) and the associated essential public
13 July 2009 between the Company and the Secretary for infrastructure works (the cost of which shall be the
Transport and Housing for and on behalf of Government. responsibility of Government);
The WIL Project Agreement contains provisions for • the Company’s responsibility for costs relating to
the financing of and the carrying out, or procuring the land acquisition, clearance and related costs arising
carrying out, of the design, construction, completion, from the implementation of the West Island Line

project (save for costs arising from certain claims for Principal Terms of the AOA are as follows:
compensation by third parties) and all costs, expenses
The terms of the AOA are based substantially on the terms
and other amounts incurred or paid by the Lands
of the Existing Integrated Operating Agreement. The AOA
Department pursuant to the involvement of the Lands
has taken effect on 23 September 2018 (the “Commercial
Department in connection with the implementation
Operation Date (High Speed Rail)”) and will expire at
of the West Island Line project; and
the same time as the Supplemental Service Concession
• the Company carrying out measures specified in Agreement (the “SSCA”) entered into between the
the environmental impact assessment and the Company and KCRC on 23 August 2018.
environmental permit issued by Government to
Certain principal terms of the AOA that are specific to the
the Company in relation to the West Island Line on
High Speed Rail include:
12 January 2009.
• obligations on the Company to maintain specific
III Continuing Connected Transactions performance requirements in relation to train service
relating to the Operation of the High delivery, ticket machine reliability, ticket-gate reliability
Speed Rail (formerly known as the and escalators and passenger lifts reliability;
Express Rail Link) • obligations on the Company to publish specific
The following disclosures, in paragraphs A and B below customer services pledges in relation to train service
of this section (together, the “Continuing Connected delivery, ticket machine reliability, ticket-gate reliability,
Transactions relating to the Operation of the High Speed escalators and passenger lifts reliability, temperature
Rail”), are made in accordance with the conditions of the and ventilation levels, railway cleanliness (relating only
Waiver, the Merger-related Waiver and Rule 14A.71 of the to the Company’s High Speed Rail trains) and passenger
Listing Rules. enquiry response time;
A Amendment Operating Agreement • obligations in relation to the carrying out of the

maintenance of the Company’s High Speed Rail trains
On 23 August 2018, the Company and the Secretary for
outside Hong Kong;
Transport and Housing, for and on behalf of Government,
entered into the Amendment Operating Agreement • obligations on the Company to carry out design
(the “AOA”) to amend and supplement the Integrated checks and tests to verify that the Mainland operator’s
Operating Agreement dated 9 August 2007 (as described High Speed Rail trains are compatible with the
in paragraph D of the section headed “Additional Company’s infrastructure and can run on the High
Information in respect of the Rail Merger” on page 181, as Speed Rail safely;
amended (“Existing Integrated Operating Agreement”),
• establishing procedures with the Mainland operator for
in order to prescribe the operational requirements that
approving the Mainland operator’s trains to run on the
will apply to the High Speed Rail. The intent and effect
High Speed Rail safely and for informing Government
of the AOA is that the operational requirements that are
of the modification of any such trains;
applicable to the existing railway network will apply in
substantially the same manner to the High Speed Rail, • developing and maintaining a training qualification
save where any amendments are necessary to reflect the system for drivers of High Speed Rail trains;
particular characteristics of, and arrangements for, the • facilitating the carrying out of inspections by the
High Speed Rail. railway inspector, including liaising with the Mainland
The AOA is an “operating agreement” for the purposes of operator for this purpose, where necessary;
the MTR Ordinance, forms part of the legal and regulatory • security obligations in relation to maintaining the
regime for the operation of railways in Hong Kong and is integrity and security of the boundaries of the Mainland
required for the purposes of the MTR Ordinance so that Port Area and the Cross-Boundary Restricted Area; and
the High Speed Rail is properly regulated under the
MTR Ordinance.
172 MTR Corporation

• mechanisms and Government approval procedures (i) a revocation of the Company’s franchise under the
for setting fares for High Speed Rail train journeys, MTR Ordinance in whole or in respect of the High
including that: Speed Rail; and
(i) prior to the Commercial Operation Date (High (ii) the date falling immediately before the tenth
Speed Rail), the Company will seek prior written anniversary of the Commercial Operation Date (High
consent from Government before setting the fares Speed Rail), but may be extended subject to further
for the various available High Speed Rail ticket negotiation between the Company and KCRC in
types; and accordance with the mechanism set out in the SSCA,
in which case it shall terminate on such other date
Overview
(ii) thereafter, fares cannot be adjusted, introduced or
as is agreed between the Company and KCRC (the
withdrawn without the prior consent of Government.
“Concession Period (High Speed Rail)”).
B Supplemental Service Concession Agreement Certain principal terms of the SSCA that are specific to the
On 23 August 2018, the Company and KCRC entered High Speed Rail include:
into the SSCA to supplement the Service Concession
• Additional concession payments for the High Speed Rail
Agreement dated 9 August 2007 (as described in

paragraph B of the section headed “Additional Information (i) General
in respect of the Rail Merger” on pages 180 and 181) (the
The additional concession payments to be
“Existing Service Concession Agreement”) in order for
made by the Company to KCRC and by KCRC to
KCRC to grant a concession to the Company in respect
the Company in respect of the High Speed Rail
of the High Speed Rail and to prescribe the operational
(described below) have been designed to reflect
and financial requirements that will apply to the High
the requirements under the Existing Integrated
Speed Rail. The intent and effect of the SSCA is that the
Operating Agreement, inter alia, for the Company
operational requirements that are applicable to the
to retain 10% of the currently expected positive
Company’s operation of the existing KCRC railway system
discounted net cash flow from the operation
will apply in substantially the same manner to the High
of the High Speed Rail (being discounted at
Speed Rail, save where any amendments are necessary to
a discount rate which reflects the Company’s
reflect the particular characteristics of, and arrangements
commercial rate of return in relation to the High
for, the High Speed Rail. The financial provisions in the
Speed Rail).
SSCA have been designed to reflect the provisions of the
Existing Integrated Operating Agreement that relate to The SSCA provides for the fixed annual payments
new concession projects, such as the High Speed Rail and variable annual payments structure for the
subject as set out below. additional concession payments, to reflect the
current concession payments structure for the Financials and Other Information
The SSCA is a “service concession agreement” for the
existing KCRC system under the Existing Service
purposes of the MTR Ordinance, forms part of the legal
Concession Agreement.
and regulatory regime for the operation of railways in
Hong Kong and is required for the purposes of the MTR The additional concession payments for the
Ordinance so that the High Speed Rail is properly regulated High Speed Rail are in addition to, and do not
under the MTR Ordinance. replace, the payments made in respect of the
existing KCRC system under the Existing Service
Principal Terms of the SSCA
Concession Agreement.
The terms of the SSCA are based substantially on the terms
(ii) Variable annual payments
of the Existing Service Concession Agreement. The operating
period with respect to the High Speed Rail has commenced The variable annual payments (being payments
on the Commercial Operation Date (High Speed Rail) and by the Company to KCRC) will be calculated in
will terminate automatically on the earlier of: the same manner prescribed under the Existing
Service Concession Agreement whereby the

Company pays to KCRC, for each financial year, (ii) Incremental revenue adjustment
a certain percentage of the revenue generated
In respect of actual deviations from the currently
from the KCRC system (being 35% for revenues
projected patronage for the Company’s existing
generated from the KCRC system that are beyond
cross-boundary services to and from Lo Wu and
the first HK$7.5 billion). For the purposes of
Lok Ma Chau, and the existing intercity service, the
calculating the variable annual payments, the
Company may receive two payments from KCRC
revenue generated from the KCRC system shall
(in respect of the period from and including the
include the actual revenue from the High Speed
Commercial Operation Date (High Speed Rail) up
Rail fares received or retained by the Company
to and including 31 December 2023 and in respect
and revenue derived from businesses related to
of the period from and including 1 January 2024
the High Speed Rail which may include, without
up to and including the day falling immediately
limitation, advertising, telecommunications, duty
before the tenth anniversary of the Commercial
free and kiosk rental.
Operation Date (High Speed Rail), respectively)
(iii) Fixed annual payments for the High Speed Rail and which will be capped at HK$500 million and
HK$1,000 million, respectively.
In light of the variable annual payments described
in paragraph (ii) above and in order for the (iii) Mainland discount programme loss
Company to be able to retain 10% of the currently
In respect of revenue loss resulting from the
expected positive discounted net cash flow from
Mainland Student Ticket Discount and the
the operation of the High Speed Rail as described
Mainland Disabled Military/Police Officer Discount
above, the fixed annual payments shall comprise
programmes adopted by the Mainland operator, the
payments from KCRC to the Company which,
Company will receive reimbursement payments from
in aggregate, over the Concession Period (High
KCRC on an annual basis.
Speed Rail), will be equal to HK$7,965 million.
KCRC and the Company will also discuss in good
These fixed annual payments shall be without
faith similar reimbursement arrangements should
prejudice to the Company’s obligation to pay the
the Mainland operator introduce any other discount
fixed annual payments of HK$750 million each
programmes in future.
financial year to KCRC under the Existing Service
Concession Agreement. (iv) Service fees subsidy
• Revenue-related arrangements In respect of the proportion of the service fee

charged in respect of tickets sold at West Kowloon
In addition, the SSCA contains the following revenue-
Station for journeys originating from and terminating
related arrangements:
at any railway station in the Mainland which
(i) Patronage adjustment Government has directed should be borne by the
Company, the Company will receive reimbursement
In respect of actual deviations from the current
payments from KCRC on an annual basis.
patronage projections for the High Speed Rail:
• Pre-operating costs reimbursements
(a) any excess or shortfall in actual patronage of
up to 15% in relation to the currently projected In addition, KCRC shall reimburse the Company for
patronage for the High Speed Rail will be the pre-operating costs that are agreed between
borne by the Company; and the Company and KCRC, being costs and expenses
reasonably incurred by the Company prior to the
(b) any excess or shortfall in actual patronage
Commercial Operation Date (High Speed Rail) that
greater than 15% in relation to the currently
satisfy all of the following criteria:
projected patronage for the High Speed Rail
will be borne between the Company and KCRC (i) that directly resulted from the planning and
in the proportions of 30% by the Company and commencement of the operation of the relevant
70% by KCRC. High Speed Rail assets;
174 MTR Corporation

(ii) that have not already been paid, and will not be • Return requirements
paid or payable, by Government to the Company
If the Concession Period (High Speed Rail) expires
under any relevant agreement or which the
or is terminated, the Company shall, at no cost to
Company and Government otherwise agree in
KCRC, redeliver possession of the High Speed Rail
writing should be treated as a pre-operating cost;
concession property.
(iii) that are not covered in any of the payments to be
made by KCRC to the Company under the SSCA; and IV Continuing Connected Transactions
(iv) that fall within certain other types of agreed costs
relating to the Operation of the First
Phase of the Tuen Ma Line
Overview
and expenses in connection with the operation
of the High Speed Rail (including, mobilisation The following disclosures, in paragraphs A and B below
activities in preparation for the opening of the of this section (together, the “Continuing Connected
High Speed Rail and trial operations prior to the Transactions relating to the Operation of the first phase
opening of the High Speed Rail, and other items as of the Tuen Ma Line”), are made in accordance with the
may be agreed between KCRC and the Company). conditions of the Waiver, the Merger-related Waiver and
Rule 14A.71 of the Listing Rules.
• Equalisation payment

If the franchise is revoked by Government prior
A Amendment Operating Agreement and
Supplemental Operating Agreement
to 31 December 2023, KCRC is required to make
a payment to the Company of an amount that is On 11 February 2020, the Company and the Secretary for
equivalent to the aggregate fixed annual payment Transport and Housing, for and on behalf of Government,
payable by KCRC over the ten-year life of the entered into the Amendment Operating Agreement
concession, reduced pro rata to take account of (“TML1 AOA”) and the Company and the Commissioner
the time at which termination occurs, and less any for Transport, for and on behalf of Government, entered
amounts of the fixed annual payment already paid into the Supplemental Operating Agreement (“TML1
to the Company. The intention of this equalisation SOA”) to amend and supplement, respectively, the
payment is to ensure that the Company is partly Existing Integrated Operating Agreement in order to
protected in the event of early termination of the prescribe the operational requirements, such as service
concession in respect of the High Speed Rail. standards, that will apply to the first phase of the Tuen
Ma Line (“TML1”) which shall extend the existing Ma
• High Speed Rail services On Shan Railway from Tai Wai to Kai Tak with two new
The Company is obliged to operate the High Speed stations at Hin Keng and Kai Tak, and an interchange
Rail during the Concession Period (High Speed Rail) station at Diamond Hill. The intent and effect of the TML1
to the standards prescribed in the MTR Ordinance AOA and the TML1 SOA together is that the operational
and the Existing Operating Agreement (subject requirements that are applicable to the existing railway
as otherwise stated herein). The Company is not network will apply in substantially the same manner
regarded as having failed to meet a requirement to TML1.
under the MTR Ordinance or the Existing Integrated The TML1 AOA and the TML1 SOA are each an “operating
Operating Agreement if the failure has resulted from agreement” for the purposes of the MTR Ordinance, form
anything done or omitted to be done by the Mainland part of the legal and regulatory regime for the operation
operator, any Mainland authority or persons directly of railways in Hong Kong and are required for the
under their control. purposes of the MTR Ordinance so that TML1 is properly
regulated under the MTR Ordinance.

The principal terms of the TML1 AOA and the TML1 SOA (i) the effective date of the revocation of the franchise
have the effect of bringing TML1 within the legal and pursuant to the MTR Ordinance as it relates to the
regulatory regime for the operation of railways in Hong KCRC railway;
Kong contained in the Existing Integrated Operating
(ii) the effective date of the withdrawal or revocation
Agreement, as explained above. The amendments
of the permission by the Director of Lands pursuant
under the TML1 AOA and the TML1 SOA took effect on
to the vesting deed entered into between KCRC and
14 February 2020.
Government as well as the revocation of the franchise
B Supplemental Service Concession Agreement pursuant to the MTR Ordinance as it relates to TML1;
On 11 February 2020, the Company and KCRC entered (iii) the first date of commissioning and commercial
into the Supplemental Service Concession Agreement operation of the entire Tuen Ma Line (“TML2”) to be
No. 2 (“TML1 SSCA”) relating to TML1, to supplement designated by Government under a new supplemental
the Existing Service Concession Agreement in order service concession agreement for TML2 (which shall
for KCRC to grant a concession to the Company in supersede and replace the TML1 SSCA); and
respect of TML1 and to prescribe the operational and
(iv) the day falling immediately before the second
financial requirements that will apply to TML1. The intent
anniversary of the New Project Effective Date (TML1),
and effect of the TML1 SSCA is that the operational
or such later date as each of the Company, KCRC
requirements that are applicable to the Company’s
and Government may agree in a written agreement
operation of the existing KCRC railway system will
by no later than the date falling one month prior to
apply in substantially the same manner to TML1, save
the second anniversary of the New Project Effective
where any amendments are necessary to reflect the
Date (TML1) or prior to the last extended date (where
particular characteristics of, and arrangements for,
applicable) (“Natural Expiry Date (TML1)”).
TML1. The financial provisions in the TML1 SSCA have
been designed to reflect the principles contained in the Certain principal terms of the TML1 SSCA that are specific
Existing Integrated Operating Agreement that relate to to TML1 include:
new concession projects, such as TML1 (as referred to in • Concession payments
paragraph A above of this section) other than as set
(i) Variable annual payments
out below.
The variable annual payments (being payments
The TML1 SSCA is a “service concession agreement” for
by the Company to KCRC) will be calculated in
the purposes of the MTR Ordinance, forming part of the
the same manner prescribed under the Existing
legal and regulatory regime for the operation of railways
Service Concession Agreement whereby the
in Hong Kong, and is required for the purposes of the MTR
Company pays to KCRC, for each financial year,
Ordinance so that TML1 is properly regulated under the
a certain percentage of the revenue generated
MTR Ordinance.
from the KCRC system (being 35% for revenues
Principal Terms of the TML1 SSCA generated from the KCRC system that are
The terms of the TML1 SSCA are based substantially on beyond the first HK$7.5 billion). For the purposes
the terms of the Existing Service Concession Agreement, of calculating the variable annual payments,
as explained above. The TML1 SSCA was made on the revenue generated from the KCRC system
11 February 2020 and the term of the service concession shall include the actual revenue from the TML1
and licence granted by KCRC to the Company pursuant fares received or retained by the Company and
to the terms of the TML1 SSCA and the commercial revenue derived from businesses related to
operation of TML1 commenced on 14 February 2020 (the TML1 which may include, without limitation,
“New Project Effective Date (TML1)”), which will terminate telecommunications and kiosk rental.
automatically on and from the earlier of (being the
“Termination Date (TML1)”):
176 MTR Corporation

(ii) Fixed annual payments for TML1 V Non-Governmental Continuing
In light of the variable annual payments described Connected Transaction
above and in order for the Company to be able to The following disclosure (the “Non-Governmental
earn a commercial return as described above, the Continuing Connected Transaction”) is made in
fixed annual payments for TML1 shall comprise accordance with Rule 14A.71 of the Listing Rules.
payments from KCRC to the Company which, in
aggregate over the period commencing on the Contract 903 between the Company and LCAL
relating to certain works on the South Island
New Project Effective Date (TML1) and ending
Line (East)
on the day prior to the Termination Date (TML1)
Overview
As explained above, LCAL is a “connected person” of
(“Concession Period (TML1)”) and assuming that
the Company within the meaning of Chapter 14A of the
the Concession Period (TML1) terminates on
Listing Rules. Contract 903 (as defined below) is therefore
the Natural Expiry Date (TML1), will be equal to
a “continuing connected transaction” within the meaning
HK$465 million. These fixed annual payments
of Rule 14A.31 of the Listing Rules.
shall be without prejudice to the Company’s
obligation to pay the fixed annual payments of On 17 May 2011, the Company and LCAL entered into
HK$750 million each financial year to KCRC under Contract 903 (as amended by supplementary agreement

the Existing Service Concession Agreement. no. 1 on 14 November 2014 and supplementary
agreement no. 2 on 8 October 2020) (the “Contract 903”)
• A new supplemental service concession agreement
for the construction of certain works relating to the
for TML2
Aberdeen Channel Bridge, Wong Chuk Hang Station and
On and from the date of the TML1 SSCA, to and Ocean Park Station in respect of the South Island Line
including the date that is four months before the (East) (the “Contract 903 Works”).
Natural Expiry Date (TML1) (prior to any extension or
Contract 903 is in substantially the same form as the
otherwise after such extension(s) as agreed in writing
Company’s standard conditions of contract for target cost
by the Company, KCRC and Government for the
construction and contains the following provisions:
purposes of this end date), Government, the Company
and KCRC shall commence exclusive negotiations • the principal obligation of LCAL under Contract 903 is
in good faith with a view to agreeing the terms of a the construction of the Contract 903 Works;
supplemental service concession agreement for TML2
• LCAL shall indemnify the Company against any loss
which shall, in accordance with the Existing Integrated
or expense sustained by the Company and against
Operating Agreement, enable the Company to earn
all losses and claims in respect of death or injuries or
a commercial rate of return from its operation of
damage to any person or property whatsoever which
TML2 (and that new supplemental service concession
may arise out of or in consequence of the execution Financials and Other Information
agreement for TML2 is intended to replace the
of the Contract 903 Works and against all claims,
TML1 SSCA).
proceedings, damages, costs, charges and expenses
• Return requirements whatsoever in respect of or in relation thereto,
except for compensation or damages related to the
If the Concession Period (TML1) expires or is
permanent use or occupation of land by the Contract
terminated, and no supplemental service concession
903 Works, or the right of the Company to execute
agreement is entered into for TML2, the Company
the Contract 903 Works on any part of the land, or
shall, at no cost to KCRC, redeliver possession of the
on account of any negligence by the Company, its
TML1 concession property.
agents, servants or other contractors, not being
employed by LCAL;

• LCAL shall indemnify the Company against all to LCAL are paid on a scheduled basis as set out in
damages and compensation and against all Contract 903, the maximum aggregate annual amount
claims, demands, proceedings, costs, charges and is set by reference to the highest amount payable by
expenses whatsoever in respect of any damages the Company in any given year under such schedule;
or compensation payable at law in respect of or in
• the Company is obliged to effect “Contractor’s All
consequence of any accident, injury or illness to any
Risks” and “Third Party Liability” insurance with a third
workman or other person in the employment of LCAL
party liability limit of not less than HK$700 million.
or its sub-contractors or suppliers arising out of and in
In addition, LCAL has agreed to separately purchase
the course of such employment;
additional cover for “Third Party Liability” insurance in
• LCAL shall effect and maintain insurance with a limit the amount of HK$3,638 million; and
of not less than HK$200 million in relation to certain of
• the Company may at any time, by giving 30 days’
its liabilities;
notice in writing to LCAL, terminate Contract 903 but
• a bond issued by Chartis Insurance Hong Kong without prejudice to any claims by the Company for
Limited has been provided to the Company in respect breach of contract.
of the obligations of LCAL under Contract 903;
The final payment certificate of Contract 903 was issued
• LCAL’s liability to indemnify the Company is reduced to LCAL and payment was settled in September 2020.
proportionally to the extent that any act or neglect The final account price for Contract 903 was settled and
of the Company, the Engineer or any other person agreed between the Company and LCAL, and the bond
employed by the Company in connection with issued by Chartis Insurance Hong Kong Limited was
the Contract 903 Works, their respective agents, returned to LCAL in October 2020.
employees or representatives, may have contributed
In relation to the Merger-related Continuing Connected
to the relevant death, illness, or damage. The total
Transactions, the Non Merger-related Continuing
liability of LCAL to the Company for all damages
Connected Transactions, the Continuing Connected
(liquidated damages and general) for delay shall not
Transactions relating to the Operation of the High
exceed 10% of the target cost plus fees as calculated
Speed Rail, the Continuing Connected Transactions
under Contract 903;
relating to the Operation of the first phase of the
• the total amount payable by the Company to LCAL Tuen Ma Line and the Non-Governmental Continuing
under Contract 903 includes costs for the Contract 903 Connected Transaction (collectively “Transactions”) and
Works and fees to LCAL. From time to time the scope in accordance with (i) in the case of the Merger-related
of the Contract 903 Works may vary and the Company Continuing Connected Transactions, paragraph B(I)(i)
will be obliged to revise the fees payable to LCAL in of the Merger-related Waiver; (ii) in the case of the Non
accordance with the terms of the Contract; Merger-related Continuing Connected Transactions,
paragraph B(I)(iii)(a) of the Waiver; (iii) in the case of
• the Company is obliged to pay the costs for the
the Continuing Connected Transactions relating to the
Contract 903 Works to LCAL on a scheduled basis
Operation of the High Speed Rail, paragraph B(I)(i) of
set out in Contract 903. If the final total cost of the
the Merger-related Waiver and paragraph B(I)(iii)(a) of
Contract 903 Works exceeds or is less than the target
the Waiver; (iv) in the case of the Continuing Connected
cost for the Works, the deficit or, as the case may
Transactions relating to the Operation of the first phase of
be, the excess will be borne by or, as the case may
the Tuen Ma Line, paragraph B(I)(i) of the Merger-related
be, distributed to the Company and LCAL on a basis
Waiver and paragraph B(I)(iii)(a) of the Waiver; and (v) in
calculated in accordance with Contract 903;
the case of the Non-Governmental Continuing Connected
• the maximum aggregate amount payable annually Transaction, Rule 14A.55 of the Listing Rules, the
by the Company under Contract 903 is approximately Company confirms that the Independent Non-executive
HK$1,400 million. As payments by the Company
178 MTR Corporation

Directors of the Company have reviewed and confirmed in the case of the Non-Governmental Continuing
that each of the Transactions was entered into: Connected Transaction, in addition, that:
(1) in the ordinary and usual course of business (within (c) for transactions involving the provision of goods or
the meaning of the Listing Rules) of the Group; services by the Group, nothing has come to their
attention that causes them to believe that such
(2) on normal commercial terms or better (within the
transactions were not, in all material respects, in
meaning of the Listing Rules); and
accordance with the pricing policies of the Group; and
(3) according to the agreement governing them on terms
(d) with respect to the aggregate amount of each of such
that are fair and reasonable and in the interests of the
Overview
transactions, nothing has come to their attention
Company’s shareholders as a whole.
that causes them to believe that such transactions
The Company has engaged the auditors of the Company have exceeded the relevant annual caps as set by the
to report on the Transactions in accordance with Hong Company in respect of each of such transactions.
Kong Standard on Assurance Engagements 3000 (Revised)
“Assurance Engagements Other Than Audits or Reviews Additional Information in respect of the
of Historical Financial Information” and with reference Rail Merger

to Practice Note 740 “Auditor’s Letter on Continuing The Rail Merger consisted of a number of separate
Connected Transactions under the Hong Kong Listing agreements, each of which was detailed in the circular
Rules” issued by the Hong Kong Institute of Certified issued by the Company on 3 September 2007 in
Public Accountants. In accordance with (i) in the case of connection with the Rail Merger, and which together
the Merger-related Continuing Connected Transactions, formed a complete package deal which was approved
paragraph B(I)(ii) of the Merger-related Waiver; (ii) in the by the independent shareholders of the Company at an
case of the Non Merger-related Continuing Connected Extraordinary General Meeting held on 9 October 2007. The
Transactions, paragraph B(I)(iii)(b) of the Waiver; (iii) in the information set out at paragraph A below of this section
case of the Continuing Connected Transactions relating describes the payment framework adopted in respect of
to the Operation of the High Speed Rail, paragraph B(I)(ii) the Rail Merger and paragraphs B to E below of this section
of the Merger-related Waiver and paragraph B(I)(iii)(b) of set out summaries of the various agreements entered into
the Waiver; (iv) in the case of the Continuing Connected by the Company in respect of the Rail Merger in addition
Transactions relating to the Operation of the first phase of to those agreements disclosed above under the heading
the Tuen Ma Line, paragraph B(I)(ii) of the Merger-related “Merger-related Continuing Connected Transactions”.
Waiver and paragraph B(I)(iii)(b) of the Waiver; and (v) in
the case of the Non-Governmental Continuing Connected A Payments in connection with Merger-related
Transaction, Rule 14A.56 of the Listing Rules, the auditors Agreements
have provided a letter to the Board confirming that: In connection with the Rail Merger, the following initial Financials and Other Information
payments were made by the Company to KCRC on
(a) nothing has come to their attention that causes them
2 December 2007 (being the Merger Date):
to believe that any of the Transactions has not been
approved by the Board; • an upfront payment of HK$4.25 billion, payable under
the Service Concession Agreement (as described in
(b) nothing has come to their attention that causes them
paragraph B below of this section), being the upfront
to believe that any of the Transactions was not entered
fee for the right to operate the Service Concession (as
into, in all material respects, in accordance with the
defined in paragraph B below of this section) and the
relevant agreements governing such transactions; and
consideration for the purchased rail assets; and

• an upfront payment of HK$7.79 billion payable under • the grant of the Service Concession to the Company
the Merger Framework Agreement (as described on to access, use and operate the concession property
pages 162 to 163) in consideration for the execution (other than KCRC railway land referred to immediately
of the Property Package Agreements (as described below) to certain specified standards;
on pages 163 to 164 and in paragraph E below of this
• the grant of a licence to access and use certain KCRC
section) and the sale of the shares in the subsidiaries of
railway land;
KCRC (the “KCRC Subsidiaries”) that were transferred to
the Company under the Sale and Purchase Agreement • the term (being an initial period of 50 years from the
which was entered into on 9 August 2007 between the Merger Date) of the Service Concession and redelivery
Company and KCRC. of the KCRC system upon expiry or termination of the
concession period. The Service Concession will end if
In addition to the initial payments above, the Company
the Company’s franchise relating to the KCRC railway
is also required to make the following payments to KCRC
is revoked;
going forward:
• the payments of an upfront payment of HK$4.25 billion
• fixed annual payments of HK$750 million payable
and fixed annual payments and variable annual
under the Service Concession Agreement, for the right
payments (as described in paragraph A above in
to use and operate the concession property for the
this section);
operation of the service concession, in arrears on the
day immediately preceding each anniversary of the • KCRC remaining the legal and beneficial owner of
Merger Date which falls during the concession period in the concession property as at the Merger Date and
respect of the 12-month period up to and including the the Company being the legal and beneficial owner of
date on which such payment falls due; and certain future concession property (the “Additional
Concession Property”);
• variable annual payments payable under the Service
Concession Agreement, for the right to use and • the regime for compensation payable by KCRC to
operate the concession property for the operation of the Company if Additional Concession Property is
the service concession, in each case, calculated on a returned to KCRC at the end of the concession period;
tiered basis by reference to the amount of revenue • the rights and restrictions of the Company and KCRC
from the KCRC system (as determined in accordance in relation to the concession property; and
with the Service Concession Agreement) for each
• subject to certain conditions, the Company bearing
financial year of the Company. No variable annual
all risks, liabilities and/or costs whatsoever associated
payment is payable in respect of the first 36 months
with or arising from the concession property and
following the Merger Date.
the land on which any of the concession property is
As a complete package deal, other than the payment located during the concession period.
elements described above and unless stated otherwise in
On 23 August 2018, the Company and KCRC entered
the relevant paragraph below in this section, no specific
into the SSCA in order for KCRC to grant a concession to
allocation was made between the various elements of the
the Company in respect of the High Speed Rail and to
Rail Merger.
prescribe the operational and financial requirements that
B Service Concession Agreement will apply to the High Speed Rail. Further details are set
The Service Concession Agreement was entered into on out in the sub-section headed “III Continuing Connected
9 August 2007 between the Company and KCRC. Transactions relating to the Operation of the High Speed
Rail (formerly known as the Express Rail Link)” in the
The Service Concession Agreement contains provisions in
section headed “Continuing Connected Transactions”.
relation to the grant and operation of a service concession
and licence granted by KCRC to the Company (the On 11 February 2020, the Company and KCRC entered
“Service Concession”), including in relation to: into the TML1 SSCA in order for KCRC to grant a
concession to the Company in respect of the first phase
180 MTR Corporation

of the Tuen Ma Line of the Shatin to Central Link and to • the adjustment mechanism to be applied to certain of
prescribe the operational and financial requirements the Company’s fares; and
that will apply to the TML1. Further details are set out
• compensation which may be payable under the MTR
in the sub-section headed “IV Continuing Connected
Ordinance to the Company in relation to a suspension,
Transactions relating to the Operation of the First Phase
expiry or termination of the franchise.
of the Tuen Ma Line” in the section headed “Continuing
Connected Transactions”. Under the Operating Agreement, the fare adjustment
mechanism is subject to review periodically. The first of
C Sale and Purchase Agreement such reviews was undertaken in 2013 and the second was
Overview
The Sale and Purchase Agreement was entered into on conducted in 2017. The Company and Government agreed
9 August 2007 between the Company and KCRC. on 16 April 2013 to amend the fare adjustment mechanism.
On 21 March 2017, the Company announced that it and
The Sale and Purchase Agreement provides the terms
Government had agreed to maintain the fare adjustment
pursuant to which the Company acquired certain assets
mechanism formula and direct-drive nature of such formula,
and contracts (the “Purchased Rail Assets”) from KCRC.
save for certain consequential changes as a result of the
The consideration for the sale of the Purchased Rail review of the formula having been advanced by one year.

Assets (excluding the shares in the KCRC Subsidiaries) In addition, the wider terms of the Operating Agreement
formed part of the upfront payment of HK$4.25 billion. are subject to review every five years and such a review
The consideration for the sale of the shares in the KCRC was also undertaken in 2013. As a result of such review, the
Subsidiaries (which own the Category 1A Properties Company and Government agreed measures in enhancing
referred to at paragraph E below in this section and act communication and liaison on operational arrangements.
as property managers) formed part of the payment of
On 23 August 2018, the Company and the Secretary for
HK$7.79 billion for the property package (as described
Transport and Housing, for and on behalf of Government,
in paragraph A above in this section and in paragraph E
entered into the AOA to amend and supplement the
below in this section).
Integrated Operating Agreement dated 9 August 2007, as
D Operating Agreement amended, in order to prescribe the operational requirements
The Operating Agreement was entered into on 9 August that will apply to the High Speed Rail. Further details are set
2007 between the Company and the Secretary for out in the sub-section headed “III Continuing Connected
Transport and Housing for and on behalf of Government Transactions relating to the Operation of the High Speed
as contemplated in the MTR Ordinance. Rail (formerly known as the Express Rail Link)” in the section
headed “Continuing Connected Transactions”.
The Operating Agreement is based on the previous
Operating Agreement which was signed on 30 June On 11 February 2020, the Company and the Secretary for
2000. The Operating Agreement differs from the previous Transport and Housing, for and on behalf of Government, Financials and Other Information
Operating Agreement to provide for, amongst other entered into the TML1 AOA and the Company and
things, the nature of the combined MTRC railway and the Commissioner for Transport, for and on behalf of
KCRC railway. Government, entered into the TML1 SOA to amend
and supplement, respectively, the Existing Integrated
The Operating Agreement includes terms relating to: Operating Agreement, in order to prescribe the operational
• the extension of the Company’s franchise under the requirements that will apply to the first phase of the Tuen
MTR Ordinance; Ma Line of the Shatin to Central Link. Further details are set
out in the sub-section headed “IV Continuing Connected
• the design, construction and maintenance of the railway;
Transactions relating to the Operation of the First Phase
• passenger services; of the Tuen Ma Line” in the section headed “Continuing
• a framework for the award of new projects and the Connected Transactions”.
operation and ownership structure of new railways;

E Additional Property Package Agreements share capital of Metropolis is 25,500 A shares (which are
Category 1A Properties held by KCRC) and 24,500 B shares (which are held by
The Category 1A Properties are held by the KCRC Cheung Kong Property Management Limited). Metropolis’
Subsidiaries. Under the terms of the Sale and Purchase business is property management.
Agreement, the Company acquired from KCRC the shares
F Application of Merger-related Waiver
in the KCRC Subsidiaries (and thereby indirectly acquired
In relation to the Operating Agreement and the Service
the “Category1A Properties”).
Concession Agreement, pursuant to paragraph A of the
Category 1B Properties Merger-related Waiver, the Stock Exchange granted a
On 9 August 2007, KCRC and the Company entered into waiver to the Company from strict compliance with all
an agreement for sale and purchase under which KCRC the continuing connected transaction requirements of
agreed to assign certain properties (the “Category 1B Chapter 14A of the Listing Rules.
Properties”) to the Company on the Merger Date. The
relevant assignment was executed between KCRC and CAPITAL AND
the Company on 2 December 2007.
REVENUE EXPENDITURE
Category 4 Properties There are defined procedures for the appraisal, review
On 9 August 2007, Government entered into an and approval of major capital and revenue expenditures.
undertaking that it would, within periods to be agreed During the year ended 31 December 2020, all project
between the Company and Government, offer to the expenditures over 0.2% of the net assets of the Company
Company a private treaty grant in respect of certain and the employment of consultancy services over 0.1% of
development sites (the “Category 4 Properties”). The the net assets of the Company required the approval of
terms of each private treaty grant shall generally be the Board.
determined by Government, and the premium for each
private treaty grant shall be assessed on a full market
value basis ignoring the presence of the railway other
REPORTING AND MONITORING
than the Tin Shui Wai Terminus, Light Rail, Yuen Long, There is a comprehensive budgeting system for all
New Territories. operational and business activities, with an annual budget
approved by the Board. Monthly results of the Company’s
On 9 August 2007, the Company issued a letter to KCRC
operations, businesses and projects are reported against
confirming that, if there should be any railway premises
the budget to the Board and updated forecasts for the
on the Category 4 Properties, the Company would assign
year are prepared regularly.
the railway premises to KCRC.
Metropolis Equity Sub-participation Agreement TREASURY MANAGEMENT

The Metropolis Equity Sub-participation Agreement The Company’s Treasury Department operates within
was entered into on 9 August 2007 between KCRC and approved guidelines from the Board. It manages the
the Company. KCRC is obliged to act on the Company’s Company’s debt portfolio with reference to the Preferred
instructions, and pay to the Company any distributions, Financing Model which defines the preferred mix of
or proceeds of sale, relating to its shareholding in financing instruments, fixed and floating rate debt,
the property management company The Metropolis maturities, interest rate risks, currency exposure and
Management Company Limited (“Metropolis”). The issued financing horizon. The model is reviewed and refined
periodically to reflect changes in the Company’s financing
182 MTR Corporation

requirements and the market environment. Derivative PERMITTED INDEMNITY
financial instruments such as interest rate swaps and
cross currency swaps are used only as hedging tools
PROVISION
to manage the Group’s exposure to interest rate and Pursuant to the Articles of Association, subject to the
currency risks. Prudent guidelines and procedures are statutes, the Company will indemnify every Director of
in place to control the Company’s derivatives activities, the Company out of its own assets against any liability
including a comprehensive credit risk management incurred by him/her in the execution of his/her office in
system for monitoring counterparty credit exposure using defending any civil or criminal proceedings. The relevant
the Value-at-Risk approach. There is also appropriate Article was in force during the year ended 31 December
Overview
segregation of duties within the Company’s 2020 and on 11 March 2021 when this Report was
Treasury Department. approved. To ensure sufficient coverage is provided, the
Company undertakes an annual review of the Directors’
Major financing transactions and guidelines for
and Officers’ liability insurance policy of the Company
derivatives transactions, including the credit risk
(the “D&O Insurance Policy”) in light of recent trends in
management framework, are approved at the
the insurance market and other relevant factors. The
Board level.
D&O Insurance Policy also indemnifies the other directors

within the Group.
COMPUTER PROCESSING
There are defined procedures, controls and regular quality GOING CONCERN
reviews on the operation of computer systems to ensure
The Consolidated Accounts on pages 190 to 270 have
the accuracy and completeness of financial records and
been prepared on a going concern basis. The Board has
efficiency of data processing. The Company’s computer
reviewed the Group’s budget for 2021, together with
centre operation and support, help desk operation and
the longer-term forecast for the following five years and
support services, and also software development and
is satisfied that the Group has sufficient resources to
maintenance, have been certified under ISO 9001:2015.
continue as a going concern for the foreseeable future.
Disaster recovery rehearsal on critical applications is
conducted annually. For cyber security, the Company has
been certified with ISO 27001:2013 on the Information AUDITORS
Security Management System that complies with the The retiring auditors, KPMG, have signified their
required standard for the comprehensive scope of willingness to continue in office. A resolution will be
IT services operation. The Corporate Cyber Security proposed at the forthcoming AGM to reappoint them and
Committee sets the direction, strategy, and policies to authorise the Directors to fix their remuneration.
related to cyber security for the Company. It steers and
oversees the management and performance of all matters Financials and Other Information
relating to cyber security. Various security controls have For and on behalf of the Board
been implemented and are reviewed regularly to protect
the Company from cyber-attacks.
Gillian Elizabeth Meller
Company Secretary

DIRECTORS OF SUBSIDIARY UNDERTAKINGS

The directors of the subsidiary undertakings of the Company during the year and up to the date of this Report (unless
otherwise stated) are listed below:
Name Director Alternate Director Name Director Alternate Director

Altamirano Celis, Sandra Elena √ Li Jerry Zhe* √
Arrowsmith, Stephen √ Liu Chung-gay √(Resigned)
Dr Auyeung Pak-kuen, Rex √ Long, Jeremy Paul Warwick* √(Resigned)
Bailie, William Paul √ Lung Tze-ho* √ √
Butcher, Stephen Anthony* √ Luo Jiancheng √
Chan Chi-kun √ McCusker, Andrew* √
Chan Hing-keung √ McKenzie, Andrew Charles* √(Resigned)
Chan Wai-man, Raymond* √ Meller, Gillian Elizabeth* √
Chan Yuen-ping* √(Resigned) Meyer, Peter* √
Dr Chan Yuen Tak-fai, Dorothy √ Moros, Tony Antonio √
Chen Lei √ Murphy, Stephen John* √
Cheng Wai-ching, Margaret* √ Mylvaganam, Deva Rajan* √
Cheng Yan-kee √ Nelson, Michael John* √(Resigned)
Chow Chiu-wai* √ Ng Yuen-fan, Hannah √
Chow Chun-ling* √ Nilsson, Per Håkan Lennart* √
Chu Fung-kuen, Margaret √ Norris, Mark Frederick* √(Resigned)
Collis, Charles G. √ O’Flaherty, Raymond Anthony* √
Dalin, Bengt Carl Harald Henrik* √ √(Resigned) Oscarsson, Karl Johan* √(Resigned)
Damm, Bo Fredrik √ Pang Hoi-hing* √
Downie, Brian Francis* √ √ Poon Kai-chung* √
Edlund, Lars Anders √(Resigned) Quarrie, Ian Roger* √
Dr Ewen, Peter Ronald* √(Resigned) Shao Jianming √
Dr Fong Ching, Eddy √ Shen Linchong √
Fu Oi-yu √ Sin Pik-kwan √
Fung Wai-yee* √ Söderström, Tim Rafael √
Gao Ling √ Soo Tsung Lee, Gene √
Hellners, Karl Erik Hjalmar* √ Suen Yiu-tat √
Ho Ka-wa* √ Tam Lup-kwan* √ √
Holness, Nigel Graham √(Resigned) Tang Chi-fai, David* √
Hui Leung-wah, Herbert* √ Waymark, Leah Nicole √(Resigned)
Jensen, Frederik Mark* √(Resigned) Wei Li-ping √
Jia Jun √ Williams Daniel √
Jim Kwok-wah* √ Dr Wong Chi-yun, Allan √(Resigned)
Johannesson, Mats Göran √ Wong Daniel* √
Jones, Niel L. √ Wong Ho-leung* √(Resigned)
Jubian, Albert* √ Wong Kin-wai* √
Dr Kam Chak-pui, Jacob* √ Wong Kwan-wai, Sammy √
King, Andrew Lewis* √ Wong O-cheung, Ernest √
Kwok Lai-kay, Lena* √ √ Wong Ping-sau* √
Kwong Chung-hing* √ Wong Wing-kin* √
Lai Ching-kai* √ Xia Jing √
Lau Kwai-hin, Kenneth* √ Xu Muhan* √
Lau Tin-shing, Adi* √ Yam Pak-nin* √ √
Lau Wai-ming* √ Yeung Mei-chun, Jeny* √
Dr Lee Kar-yun, Tony* √ Young Ka-fan, Glen √
Lee Yuen-ling* √ Yuen Lai-ki* √
Leung Hang-kin √(Resigned) Yuen Lap-hang √
Leung Yiu-fai, David √ Zhang Ling √
Li Sau-lin, Linda* √ Zhu Chunlei √
* Person who serves as a director and/or an alternate director in more than one subsidiary.
184 MTR Corporation

CONTENTS OF CONSOLIDATED ACCOUNTS AND NOTES
186 Independent Auditor’s Report 244 31 Cash, Bank Balances and Deposits
Consolidated Accounts 244 32 Loans and Other Obligations
190 Consolidated Profit and Loss Account 246 33 Creditors, Other Payables and Provisions
191 Consolidated Statement of Comprehensive Income 248 34 Amounts Due to Related Parties
192 Consolidated Statement of Financial Position 248 35 Obligations under Service Concession
193 Consolidated Statement of Changes in Equity 248 36 Loans from Holders of Non-controlling Interests
194 Consolidated Cash Flow Statement 249 37 Income Tax in the Consolidated Statement of Financial
Position
Notes to the Consolidated Accounts
250 38 Share Capital, Shares Held for Executive Share Incentive
195 1 Statement of Compliance Scheme, Company-level Movements in Components of
195 2 Principal Accounting Policies Equity and Capital Management
Overview
207 3 Rail Merger with Kowloon-Canton Railway Corporation 253 39 Other Cash Flow Information
and Operating Arrangements for High Speed Rail and 255 40 Fair Value Measurement
Tuen Ma Line Phase 1
256 41 Share-based Payments
208 4 Revenue from Hong Kong Transport Operations
259 42 Retirement Schemes
209 5 Revenue from Hong Kong Station Commercial
Businesses 260 43 Defined Benefit Retirement Scheme
209 6 Revenue from Hong Kong Property Rental and 263 44 Material Related Party Transactions
Management Businesses
265 45 Commitments

209 7 Revenue and Expenses Relating to Mainland of China
and International Subsidiaries 268 46 Company-level Statement of Financial Position
210 8 Revenue from Other Businesses 269 47 Accounting Estimates and Judgements
210 9 Segmental Information 270 48 Possible Impact of Amendments, New Standards and
Interpretations Issued but Not Yet Effective for the
214 10 Operating Expenses Annual Accounting Year Ended 31 December 2020
215 11 Remuneration of Members of the Board and the 270 49 Approval of the Consolidated Accounts
Executive Directorate
219 12 Profit on Hong Kong Property Development
219 13 Depreciation and Amortisation
220 14 Interest and Finance Charges
221 15 Income Tax in the Consolidated Profit and Loss Account
222 16 Dividends
222 17 (Loss)/Earnings Per Share
223 18 Other Comprehensive Income
223 19 Investment Properties and Other Property, Plant and
Equipment
227 20 Service Concession Assets
228 21 Railway Construction Projects under Entrustment by the
HKSAR Government Financials and Other Information
234 22 Property Development in Progress

235 23 Investments in Subsidiaries
236 24 Interests in Associates and Joint Venture
237 25 Investments in Securities
237 26 Properties Held for Sale
238 27 Derivative Financial Assets and Liabilities
242 28 Stores and Spares
242 29 Debtors and Other Receivables
243 30 Amounts Due from Related Parties

INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report to the members of MTR Corporation Limited

(incorporated in Hong Kong with limited liability)
Opinion
We have audited the consolidated accounts of MTR Corporation Limited (“the Company”) and its subsidiaries (“the Group”) set out on pages 190
to 270, which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated profit and loss account, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for
the year then ended and notes to the consolidated accounts, including a summary of significant accounting policies.
In our opinion, the consolidated accounts give a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and
of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting
Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and have been properly prepared in compliance
with the Hong Kong Companies Ordinance.
Basis for opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the consolidated accounts section of our report. We are independent
of the Group in accordance with the HKICPA’s Code of Ethics for Professional Accountants (“the Code”) and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated accounts of
the current period. These matters were addressed in the context of our audit of the consolidated accounts as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Railway construction in progress under entrustment by the HKSAR Government
Refer to note 21 to the consolidated accounts and the accounting policies in note 2AA
The key audit matter How the matter was addressed in our audit
The Group and the Government of the Hong Kong Special Administrative Our audit procedures in relation to railway construction in progress under
Region (“HKSAR Government”) have entered into certain entrustment entrustment by the HKSAR Government included the following:
arrangements whereby the Group has been entrusted by the HKSAR
Government to proceed with the planning, design, construction, testing • inspecting the minutes of the relevant committees of the Group and
and commissioning of the Hong Kong Section of the Guangzhou-Shenzhen- discussing with management the current status of the HSR and SCL
Hong Kong Express Rail Link (“the HSR”) and the Shatin to Central Link (“the projects, including:
SCL”). As the HKSAR Government is the owner of both the HSR and the SCL, (a) For the HSR, the forecast total project costs, assessment of contract
the financing of the development of these two railway lines is borne by the claims, estimate of further internal costs to be incurred and the
HKSAR Government, with the Group receiving project management fees. assessment of the financial implications of the project for the Group;
HSR (b) For the SCL, the costs incurred to date, remaining critical milestones
Pursuant to an agreement entered into with the HKSAR Government on 30 and estimated costs to complete, and further internal costs to be
November 2015, the Group will bear and finance project costs for the HSR incurred and the assessment of the financial implications of the
(including the Group’s project management fees) which exceed HK$84.42 project for the Group;
billion and the HKSAR Government reserves the right to refer to arbitration • assessing the design and implementation of management’s key internal
the question of the Group’s liability, if any, in respect of the project costs controls over the determination of the project costs for the HSR and
borne and financed by the HKSAR Government which exceed HK$65 billion SCL projects;
up to HK$84.42 billion. In the event that the Group is found to be liable under
the relevant HSR entrustment agreements, the Group’s liability for such • evaluating the qualifications, experience, expertise, independence and
costs is currently limited to the amount of the project management fees and objectivity of the independent expert engaged by management for
certain other additional fees received by the Group under the agreements. the HSR;
In September 2018, construction of the HSR was completed following which • discussing with the independent expert the forecast total project costs
commercial operations commenced. However, the total project costs can for the HSR project and the risk of these exceeding HK$84.42 billion, and
only be ascertained upon finalisation of all construction contracts which comparing, on a sample basis, the assessed project costs for the HSR with
may take several years to reach agreement and settlement. relevant underlying documentation;
Management has engaged an independent expert to provide an • comparing, on a sample basis, costs incurred during the current year in
independent assessment of management’s estimate of cost to complete the respect of the HSR and SCL with underlying contracts and interim or final
HSR project. payment certificates;
As at 31 December 2020, the Group has made a provision for project
management costs as it estimated that the total costs to complete its
performance obligations under the HSR entrustments are likely to exceed
the project management fees from the HKSAR Government. No other
provision for project costs has been made.
186 MTR Corporation

Railway construction in progress under entrustment by the HKSAR Government (continued)
Refer to note 21 to the consolidated accounts and the accounting policies in note 2AA
SCL • inspecting the relevant entrustment agreements to ascertain project

Towards the end of the first half of 2018, there were allegations concerning management fees receivable and comparing the receipt of such project
workmanship in relation to the Hung Hom Station extension. A commission management fees for the year with bank statements and other relevant
of enquiry (“COI”) was set up by the HKSAR Government to investigate, documentation;
inter-alia, certain construction works at the Hung Hom station extension.
• assessing the provisions made for the Hung Hom Incidents Related Costs
Subsequently, the Group advised the HKSAR Government of an insufficiency
and Project Management Costs, which are funded by the Group, by
of construction records and certain construction issues at the Hung Hom
inspecting, on a sample basis, the relevant underlying documentation
North Approach Tunnel, the South Approach Tunnel and the Hung Hom
and, where applicable, the actual amounts incurred during the year;
Stabling Sidings. The terms of the COI were expanded in February 2019. A
redacted final report from the COI was published in May 2020, in which the • holding discussions with management and the Group’s external legal
Overview
COI determined that it is satisfied that, with suitable measures completed, advisors to assess the Group’s legal obligations and financial exposure in
the relevant structures will be safe and fit for purpose. The management connection with the HSR and SCL projects; and
considered that the suitable measures for the relevant structures were
completed during the year. • assessing the disclosures in the consolidated accounts in relation to
the HSR and SCL projects with reference to the requirements of the
In July 2019, the HKSAR Government accepted the Group’s prevailing accounting standards.
recommendation that the Tuen Ma Line should open in phases (“Phased
Opening”). The Group has announced that it would fund, on an interim
and without prejudice basis, certain costs arising from the Hung Hom
incidents and certain costs associated with the Phased Opening (“Hung
Hom Incidents Related Costs”), which were estimated to be around HK$2

billion in aggregate, and has charged the full amount of such estimate in its
consolidated profit and loss account for the year ended 31 December 2019.
In February 2020, the Group notified the HKSAR Government of the latest
estimate of the cost to complete the SCL Project of HK$82,999 million
including the additional project management fee payable to the Group of
HK$1,371 million, which increased from the original estimate of HK$70,827
million. In June 2020, the Legislative Council approved additional funding
amounting to HK$10,801 million sought by the HKSAR Government, which
excludes the Hung Hom Incidents Related Costs and the additional project
management fee for the Group, and the HKSAR Government has maintained
its position of disagreement to any increase in the project management fee.
The Group has announced that it would continue to meet, on an interim and
without prejudice basis, the costs of complying with its project management
obligations under the entrustment agreements, which were estimated to be
around HK$1,371 million (“Project Management Costs”), and has charged the
full amount of such estimate in its consolidated profit and loss account for
the year ended 31 December 2020.
The above matters are ongoing and the timing of their ultimate resolution
and any further financial impact to the Group are highly uncertain at this
stage.
In the event that the Group is found to be liable under the entrustment
agreements, the Group’s liability is currently limited to a cap equal to the
aggregate fees received by the Group under the relevant SCL agreements.
However, such cap could not be relied upon if the Group were, in
accordance with general principles of law, found to be liable for any loss
that had been caused by the fraudulent or other dishonest conduct of its
employees or agents. Financials and Other Information
We identified railway construction in progress under entrustment by the
HKSAR Government as a key audit matter because the arrangements in
respect of these railway projects are highly complex and convey rights and
obligations on the Group which could potentially have significant financial
implications for the Group.

INDEPENDENT AUDITOR’S REPORT
Valuation of investment properties (“IP”)
Refer to note 19A to the consolidated accounts and the accounting policies in note 2E(i)
The fair value of the Group’s IP as at 31 December 2020 was HK$86,058 Our audit procedures to assess the valuation of the Group’s IP included the
million, with a revaluation loss for the year ended 31 December 2020 following:
recorded in the consolidated profit and loss account of HK$9,190 million.
• obtaining and inspecting the IP valuation reports prepared by the
The Group’s IP, which are mainly located in Hong Kong, principally external property valuers;
comprise shopping malls and office premises.
• evaluating the independence, qualifications, expertise and objectivity of
The fair values of the Group’s IP were assessed by external property valuers the external property valuers;
based on independent valuations.
• evaluating the valuation methodologies adopted with reference to
We identified valuation of the Group’s IP as a key audit matter because prevailing accounting standards and those applied by other external
of the significance of IP to the consolidated accounts and because property valuers for similar property types;
the determination of the fair values involves significant judgement
and estimation, particularly in selecting the appropriate valuation • holding discussions with management and the external property
methodology, market yields and market rents. valuers and challenging the key assumptions and estimates adopted
in the valuations, including prevailing market rents and market yields
applied by comparing, on a sample basis, the key estimates adopted with
comparable available market data; and
• comparing the tenancy information, including occupancy rates and
market rents, provided by the Group to the external property valuers with
underlying contracts and documentation, on a sample basis.
Assessing potential impairment of fixed assets other than assets carried at revalued amounts
Refer to notes 19B and 20 to the consolidated accounts and the accounting policies in note 2I(ii)
The carrying value of the Group’s fixed assets other than assets carried at Our audit procedures to assess the potential impairment of fixed assets
revalued amounts as at 31 December 2020 totalled HK$131,127 million and other than assets carried at revalued amounts included the following:
the related depreciation and amortisation charge for the year ended 31
December 2020 amounted to HK$5,589 million. • discussing indicators of impairment on fixed assets with management,
and where such indicators were identified, evaluating management’s
The carrying values of these assets are reviewed annually by management impairment assessments and the assumptions adopted therein, including
for potential indicators of impairment. For assets where such indicators revenue assumptions, with reference to the actual revenue levels
exist, management performs detailed impairment reviews, taking into achieved in the current year, future operating plans and broader city
account, inter alia, the impact of revenue assumptions and technical factors specific developments;
which may affect the expected remaining useful lives and carrying value of
the assets. • assessing the discount rates adopted by management in the impairment
assessments by comparison with available financial information of other
We identified the potential impairment of fixed assets other than assets similar companies taking into account regional and industry specific risk
carried at revalued amounts as a key audit matter because the assessment premiums;
can involve a significant degree of management judgement in determining
the key assumptions such as expected revenue levels. • comparing the assumptions adopted in the prior year’s impairment
assessments with actual results for the current year, investigating
significant variances identified and considering the impact on the current
year’s impairment assessments; and
• performing sensitivity analyses for the discount rates applied and the
assumptions for revenue levels adopted and considering the information
used to derive the most sensitive assumptions and whether there were
any indicators of management bias in their selection.
Information other than the consolidated accounts and auditor’s report thereon
The directors are responsible for the other information. The other information comprises all the information included in the annual report, other
than the consolidated accounts and our auditor’s report thereon.
Our opinion on the consolidated accounts does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated accounts, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the consolidated accounts or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of the directors for the consolidated accounts

The directors are responsible for the preparation of the consolidated accounts that give a true and fair view in accordance with HKFRSs issued by the
HKICPA and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
consolidated accounts that are free from material misstatement, whether due to fraud or error.
188 MTR Corporation

In preparing the consolidated accounts, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
The directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated accounts

Our objectives are to obtain reasonable assurance about whether the consolidated accounts as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. This report is made solely to you, as a body, in accordance
with section 405 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to
any other person for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
Overview
they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated accounts.
As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated accounts, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated accounts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated accounts, including the disclosures, and whether the consolidated
accounts represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence and
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the
consolidated accounts of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Leung Sze Kit Roy.
KPMG
Certified Public Accountants

8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
11 March 2021

CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December in HK$ million Note 2020 2019
Revenue from Hong Kong transport operations 4 11,896 19,938
Revenue from Hong Kong station commercial businesses 5 3,269 6,799
Revenue from Hong Kong property rental and management businesses 6 5,054 5,137
Revenue from Mainland of China and international railway,
property rental and management subsidiaries 7 21,428 21,085
Revenue from other businesses 8 894 1,545
42,541 54,504
Revenue from Mainland of China property development 7 – –
Total revenue 42,541 54,504
Expenses relating to Hong Kong transport operations
– Staff costs and related expenses 10A (6,317) (6,489)
– Maintenance and related works (2,085) (2,662)
– Energy and utilities (1,671) (1,841)
– General and administration expenses (888) (1,209)
– Railway support services (295) (630)
– Stores and spares consumed (572) (613)
– Government rent and rates (284) (256)
– Other expenses (206) (329)
(12,318) (14,029)
Expenses relating to Hong Kong station commercial businesses (509) (680)
Expenses relating to Hong Kong property rental and management businesses (850) (851)
Expenses relating to Mainland of China and international railway,
property rental and management subsidiaries 7 (20,895) (19,760)
Expenses relating to other businesses 21B(b)(iii)& (2,496) (3,557)
(c)(iii)
Project study and business development expenses (279) (276)
(37,347) (39,153)
Expenses relating to Mainland of China property development 7 (13) (25)
Operating expenses before depreciation, amortisation and
variable annual payment 10B&C (37,360) (39,178)
Operating profit before Hong Kong property development,
depreciation, amortisation and variable annual payment
– Arising from recurrent businesses 5,194 15,351
– Arising from Mainland of China property development (13) (25)
5,181 15,326
Profit on Hong Kong property development 12 6,491 5,707
Operating profit before depreciation, amortisation and
variable annual payment 11,672 21,033
Depreciation and amortisation 13 (5,365) (5,237)
Variable annual payment (238) (2,583)
Share of profit of associates and joint venture 24 605 288
Profit before interest, finance charges and taxation 6,674 13,501
Interest and finance charges 14 (1,004) (859)
Investment property revaluation (loss)/gain 19A (9,190) 1,372
(Loss)/profit before taxation (3,520) 14,014
Income tax 15A (1,301) (1,922)
(Loss)/profit for the year (4,821) 12,092
Attributable to:
– Shareholders of the Company (4,809) 11,932
– Non-controlling interests (12) 160
(Loss)/profit for the year attributable to shareholders of the Company:
– Arising from recurrent businesses (1,126) 4,980
– Arising from property development 5,507 5,580
– Arising from underlying businesses 4,381 10,560
– Arising from investment property revaluation (9,190) 1,372
(4,809) 11,932
(Loss)/earnings per share: 17
– Basic (HK$0.78) HK$1.94
– Diluted (HK$0.78) HK$1.94
The notes on pages 195 to 270 form part of the consolidated accounts.
190 MTR Corporation

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME

Other comprehensive income for the year
(after taxation and reclassification adjustments): 18
Items that will not be reclassified to profit or loss:
– (Loss)/surplus on revaluation of self-occupied land and buildings (274) 121
– Remeasurement of net asset/liability of defined benefit schemes 752 730
478 851
Items that may be reclassified subsequently to profit or loss:
– Exchange differences on translation of:
Overview
– financial statements of subsidiaries, associates and joint venture outside Hong Kong 1,282 (344)
– non-controlling interests 13 (15)
– Cash flow hedges: net movement in hedging reserve (73) 244
1,222 (115)
1,700 736
Total comprehensive (loss)/income for the year (3,121) 12,828
Attributable to:

– Shareholders of the Company (3,122) 12,683
– Non-controlling interests 1 145
Total comprehensive (loss)/income for the year (3,121) 12,828

FINANCIAL POSITION
At 31 December At 31 December
in HK$ million Note 2020 2019
Assets
Fixed assets
　– Investment properties 19A 86,058 91,712
　– Other property, plant and equipment 19B 101,999 102,632
　– Service concession assets 20 32,875 31,261
220,932 225,605
Goodwill and property management rights 79 77
Property development in progress 22A 11,942 12,022
Deferred expenditure 1,116 1,948
Interests in associates and joint venture 24 11,592 10,359
Deferred tax assets 37B 470 134
Investments in securities 25 468 386
Properties held for sale 26 1,800 1,245
Derivative financial assets 27 480 198
Stores and spares 28 2,014 1,844
Debtors and other receivables 29 13,313 11,169
Amounts due from related parties 30 5,462 3,041
Cash, bank balances and deposits 31 20,906 21,186
290,574 289,214
Liabilities
Short-term loans 32A 3,357 3,371
Creditors, other payables and provisions 33 36,837 33,315
Current taxation 37A 1,004 2,024
Amounts due to related parties 34 453 2,990
Loans and other obligations 32A 46,983 36,085
Obligations under service concession 35 10,295 10,350
Derivative financial liabilities 27 381 408
Loans from holders of non-controlling interests 36 158 144
Deferred tax liabilities 37B 14,125 13,729
113,593 102,416
Net assets 176,981 186,798
Capital and reserves 38
Share capital 59,666 58,804
Shares held for Executive Share Incentive Scheme (262) (263)
Other reserves 117,384 128,065
Total equity attributable to shareholders of the Company 176,788 186,606
Non-controlling interests 193 192
Total equity 176,981 186,798
Approved and authorised for issue by the Members of the Board on 11 March 2021
Rex P K Auyeung Jacob C P Kam Herbert L W Hui

Chairman Chief Executive Officer Finance Director
192 MTR Corporation

CHANGES IN EQUITY
Other reserves
Shares
held for
Executive Employee Total equity
Share Fixed assets share-based attributable to Non-
for the year ended 31 December Share Incentive revaluation Hedging capital Exchange Retained shareholders of controlling Total
in HK$ million Note capital Scheme reserve reserve reserve reserve profits the Company interests equity
2020
Balance as at 1 January 2020 58,804 (263) 3,936 221 160 (1,132) 124,880 186,606 192 186,798
Changes in equity for the year ended
31 December 2020:
– Loss for the year – – – – – – (4,809) (4,809) (12) (4,821)
– Other comprehensive income
for the year 18 – – (274) (73) – 1,282 752 1,687 13 1,700
– Total comprehensive loss
Overview
for the year – – (274) (73) – 1,282 (4,057) (3,122) 1 (3,121)
– 2019 final ordinary dividend 16 – – – – – – (6,036) (6,036) – (6,036)
– Shares issued in respect of scrip
dividend of 2019 final
ordinary dividend 38A 692 (2) – – – – 2 692 – 692
– 2020 interim ordinary dividend 16 – – – – – – (1,545) (1,545) – (1,545)
dividend of 2020 interim
– Shares purchased for Executive
Share Incentive Scheme 38B – (86) – – – – – (86) – (86)

– Vesting and forfeiture of
award shares of Executive
Share Incentive Scheme 38B 6 90 – – (94) – (2) – – –
– Employee share-based payments – – – – 121 – – 121 – 121
– Employee share options
exercised 38A 83 – – – (6) – – 77 – 77
Balance as at 31 December 2020 59,666 (262) 3,662 148 181 150 113,243 176,788 193 176,981
2019
Balance as at 1 January 2019 57,970 (265) 3,815 (26) 142 (788) 119,591 180,439 172 180,611
Changes in equity for the year ended
31 December 2019:
– Profit for the year – – – – – – 11,932 11,932 160 12,092
– Other comprehensive income
for the year 18 – – 121 244 – (344) 730 751 (15) 736
– Total comprehensive income
for the year – – 121 244 – (344) 12,662 12,683 145 12,828
– Amounts transferred from
hedging reserve to initial
carrying amount of
hedged items – – – 3 – – – 3 – 3
– 2018 final ordinary dividend 16 – – – – – – (5,835) (5,835) – (5,835)
dividend of 2018 final
– 2019 interim ordinary dividend 16 – – – – – – (1,539) (1,539) – (1,539)
dividend of 2019 interim
– Shares purchased for Executive
Share Incentive Scheme 38B – (88) – – – – – (88) – (88)
– Vesting and forfeiture of
award shares of Executive
Share Incentive Scheme 38B 5 93 – – (96) – (2) – – –
– Ordinary dividends paid to
holders of non-controlling
interests – – – – – – – – (125) (125)
– Employee share-based payments – – – – 122 – – 122 – 122
– Employee share options
exercised 38A 104 – – – (8) – – 96 – 96
Balance as at 31 December 2019 58,804 (263) 3,936 221 160 (1,132) 124,880 186,606 192 186,798

CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating activities

Cash generated from operations 39 2,548 17,120
Receipt of government subsidy for Shenzhen Metro Line 4 operation 587 608
Purchase of tax reserve certificates (57) (54)
Current tax paid
– Hong Kong Profits Tax paid (1,964) (308)
– Tax paid outside Hong Kong (342) (323)
Net cash generated from operating activities 772 17,043
Cash flows from investing activities

Capital expenditure
– Purchase of assets for Hong Kong transport and related operations (5,226) (5,291)
– Hong Kong railway extension projects (250) (292)
– Investment property projects and fitting out work (3,539) (308)
– Other capital projects (234) (181)
Fixed and variable annual payments (3,333) (3,055)
Receipts in respect of property development 8,583 9,175
Payments in respect of property development (412) (3,259)
Decrease/(increase) in bank deposits with more than three months to maturity
when placed or pledged 3,813 (3,683)
Investments in associates and joint venture (210) (1,416)
Others 133 (2)
Net cash used in investing activities (675) (8,312)
Cash flows from financing activities

Proceeds from shares issued under share option scheme 77 96
Purchase of shares for Executive Share Incentive Scheme (86) (88)
Proceeds from loans and capital market instruments 26,872 11,659
Repayment of loans and capital market instruments (16,495) (13,172)
Interest and finance charges paid (1,039) (1,054)
Interest received 555 370
Capital element of lease rentals paid (232) (165)
Dividends paid to shareholders of the Company (6,808) (6,649)
Dividends paid to holders of non-controlling interests – (125)
Net cash generated from/(used in) financing activities 2,844 (9,128)
Net increase/(decrease) in cash and cash equivalents 2,941 (397)

Cash and cash equivalents at 1 January 8,346 8,865
Effect of exchange rate changes 592 (122)
Cash and cash equivalents at 31 December 31 11,879 8,346
194 MTR Corporation

NOTES TO THE CONSOLIDATED ACCOUNTS
1 Statement of Compliance
These accounts have been prepared in compliance with the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). These accounts have also been prepared in
accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”), which collective term includes all applicable individual Hong
Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified
Public Accountants (“HKICPA”), and accounting principles generally accepted in Hong Kong. The HKFRSs are fully converged with International
Financial Reporting Standards in all material respects. A summary of the principal accounting policies adopted by the Group is set out in note 2.
The HKICPA has issued certain amendments to HKFRSs that are first effective or available for early adoption for accounting periods beginning on or
after 1 January 2020. None of these have had a material effect on how the Group’s results and financial position for the current or prior periods have
been prepared or presented in this annual report. The Group has not applied any new standard or amendment to standards that is not yet effective
for the current accounting period (note 48).
Overview
2 Principal Accounting Policies
A Basis of Preparation of the Consolidated Accounts
(i) The measurement basis used in the preparation of the consolidated accounts is the historical cost basis except that the following assets and
liabilities are stated at their fair value as explained in the accounting policies set out below:
• investment properties (note 2E(i));

• self-occupied buildings (note 2E(ii));
• investments in securities (note 2O); and

• derivative financial instruments (note 2V).
(ii) The preparation of the consolidated accounts in conformity with HKFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenditure. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgements and estimations about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
Judgements made by management in the application of HKFRSs that have significant effect on the consolidated accounts and estimates are
discussed in note 47.
B Basis of Consolidation
The consolidated accounts include the accounts of the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest
in associates and joint venture (note 2D) made up to 31 December each year. The results of subsidiaries acquired or disposed of during the year are
included in the consolidated profit and loss account from or to the date of their acquisition or disposal, as appropriate.
C Subsidiaries and Non-controlling Interests

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights, to variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Group has Financials and Other Information
power, only substantive rights (held by the Group or other parties) are considered.
An investment in a subsidiary is consolidated into the consolidated accounts from the date that control commences until the date that control
ceases. Intra-group balances, transactions and cash flows and any unrealised profits arising from intra-group transactions are eliminated in full in
preparing the consolidated accounts. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated profit and loss account, consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position respectively.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss
being recognised in the consolidated profit and loss account. Any interest retained in that former subsidiary at the date when control is lost is
recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial
recognition of an investment in an associate or a joint venture (note 2D).
Investments in subsidiaries are carried in the Company’s statement of financial position at cost less any impairment losses (note 2I(ii)).

2 Principal Accounting Policies (continued)

D Associates and Joint Ventures
An associate is an entity over which the Group or the Company has significant influence, but not control or joint control, over its management,
including participation in the financial and operating policy decisions.
A joint venture is an arrangement whereby the Group or the Company and other parties contractually agree to share control of the arrangement,
and have rights to the net assets of the arrangement.
An investment in an associate or a joint venture is accounted for in the consolidated accounts of the Group using the equity method and is initially
recorded at cost and adjusted thereafter for the post acquisition change in the Group’s share of the investees’ net assets and any impairment loss
relating to the investment (note 2I(ii)). At each reporting date, the Group assesses whether there is any objective evidence that the investment is
impaired. The Group’s share of the post-acquisition, post-tax results of the investees and any impairment losses for the year is recognised in the
consolidated profit and loss account, whereas the Group’s share of the post-acquisition items of the investees’ other comprehensive income is
recognised in the consolidated statement of comprehensive income.
When the Group’s share of losses equals or exceeds its interest in the associate or the joint venture, the Group’s interest is reduced to nil and
recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the investee. For this purpose, the Group’s interest in the investee is the carrying amount of the investment under the equity method
together with any other long-term interests that in substance form part of the Group’s net investment in the associate or the joint venture (after
applying the expected credit losses (“ECL”) model to such other long-term interests where applicable (note 2I(i)).
Unrealised profits and losses resulting from transactions between the Group and its associates and joint venture are eliminated to the extent of the
Group’s interest in the investee, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are
recognised immediately in the consolidated profit and loss account.
If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured. Instead, the investment
continues to be accounted for under the equity method.
In all other cases, when the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a
disposal of the entire interest in that investee, with a resulting gain or loss being recognised in the consolidated profit and loss account. Any interest
retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as
the fair value on initial recognition of a financial asset.
In the Company’s statement of financial position, investments in associates and joint venture are stated at cost less impairment losses (note 2I(ii)).
E Fixed Assets
(i) Investment Properties
Investment properties are land and/or buildings which are owned or held under a leasehold interest to earn rental income and/or for capital
appreciation. These include properties that are being constructed or developed for future use as investment properties.
Investment properties are stated at fair value as measured semi-annually by independent professionally qualified valuers. Gains or losses arising
from changes in the fair value are recognised in the consolidated profit and loss account in the period in which they arise.
(ii) Other Property, Plant and Equipment

Leasehold land registered and located in the Hong Kong Special Administrative Region is stated at cost less accumulated depreciation and
impairment losses (note 2I(ii)). Self-occupied leasehold buildings where the Group is the registered owner of the property interest are stated at their
fair value at the date of revaluation less any subsequent accumulated depreciation. Revaluations are performed by independent qualified valuers
semi-annually, with changes in the fair value arising on revaluations recorded as movements in the fixed assets revaluation reserve, except:
(a) where the balance of the fixed assets revaluation reserve relating to a self-occupied leasehold building is insufficient to cover a revaluation
deficit of that property, the excess of the deficit is charged to the consolidated profit and loss account; and
(b) where a revaluation deficit had previously been charged to the consolidated profit and loss account and a revaluation surplus subsequently
arises, this surplus is firstly credited to the consolidated profit and loss account to the extent of the deficit previously charged to the consolidated
profit and loss account, and thereafter taken to the fixed assets revaluation reserve.
Civil works and plant and equipment, including right-of-use assets arising from freehold or leasehold properties where the Group is not the
registered owner of the property interest, and right-of-use assets arising from leases of underlying plant and equipment are stated at cost less
accumulated depreciation and impairment losses (note 2I(ii)).
Assets under construction include capital works on operating railway and are stated at cost less impairment losses (note 2I(ii)). Cost comprises direct
costs of construction, such as materials, staff costs and overheads, together with interest expense capitalised during the period of construction or
installation and testing. Capitalisation of these costs ceases and the asset concerned is transferred to the appropriate fixed assets category when
substantially all the activities necessary to prepare the asset for its intended use are completed.
196 MTR Corporation

E Fixed Assets (continued)
(iii) Service Concession Assets
Where the Group enters into service concession arrangements under which the Group acquires the right to access, use and operate certain assets
for the provision of public services, upfront payments and expenditure directly attributable to the acquisition of the service concession up to
inception of the service concession are capitalised as service concession assets and amortised on a straight-line basis over the period of the service
concession. Annual payments over the period of the service concession with the amounts fixed at inception are capitalised at their present value,
calculated using the incremental long term borrowing rate determined at inception as the discount rate, as service concession assets and amortised
on a straight-line basis over the period of the service concession, with a corresponding liability recognised as obligations under service concession.
Annual payments for the service concession which are not fixed or determinable at inception and are contingent on future revenue are charged to
the consolidated profit and loss account in the period when incurred.
Where the Group enters into service concession arrangements under which the Group constructs, uses and operates certain assets for the provision
Overview
of public services, construction revenue and costs are recognised in the consolidated profit and loss account by reference to the stage of completion
at the end of the reporting period while the fair value of construction service is capitalised initially as service concession assets in the consolidated
statement of financial position and amortised on a straight-line basis over the shorter of the assets’ useful lives and the period in which the service
concession assets are expected to be available for use by the Group.
Expenditure for assets subject to service concession is capitalised and amortised on a straight-line basis at rates sufficient to write off their cost less
their estimated residual value, if any, over the shorter of the assets’ useful lives and the remaining period of the service concession.
Service concession assets are carried at cost less accumulated amortisation and impairment losses, if any (note 2I(ii)).

(iv) Subsequent Expenditure and Gains or Losses on Retirement or Disposal
Subsequent expenditure relating to the replacement and/or upgrade of certain parts of an existing asset is recognised in the carrying amount of the
asset if it is probable that future economic benefit will flow to the Group and the cost of the item can be measured reliably. The carrying amount of
those parts that are replaced is derecognised, with any gain or loss arising therefrom being dealt with in the consolidated profit and loss account.
Expenditure on repairs or maintenance of an existing asset to restore or maintain the originally assessed standard of performance of that asset is
charged as an expense in the consolidated profit and loss account when incurred.
Gains or losses arising from the retirement or disposal of an asset are determined as the difference between the net disposal proceeds and the
carrying amount of the asset. Such gains or losses are recognised as income or expense in the consolidated profit and loss account on the date
of retirement or disposal. Any related revaluation surplus is transferred from the fixed assets revaluation reserve to retained profits and is not
re-classified to consolidated profit and loss account.
F Leased Assets
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has
both the right to direct the use of the identified asset and to obtain substantially all of the economic benefits from that use.
(i) As a Lessee
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except for short-term leases that have a lease term
of 12 months or less and leases of low-value assets. When the Group enters into a lease in respect of a low-value asset, the Group decides whether
to capitalise the lease on a lease-by-lease basis. The lease payments associated with those leases which are not capitalised are recognised as an
expense on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease payments payable over the lease term,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using a relevant incremental borrowing rate.
After initial recognition, the lease liability is measured at amortised cost and interest expense is calculated using the effective interest method.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which comprises the initial amount of the lease liability plus
any lease payments made at or before the commencement date, and any initial direct costs incurred. Where applicable, the cost of the right-of-use
assets also includes an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, discounted to their present value, less any lease incentives received. The right-of-use asset is subsequently stated at cost less accumulated
depreciation and impairment losses (notes 2J and 2I(ii)), except for the following types of right-of-use asset:
– right-of-use assets that meet the definition of investment property are carried at fair value in accordance with note 2E(i);
– right-of-use assets related to leasehold self-occupied buildings where the Group is the registered owner of the leasehold interest are carried at
fair value in accordance with note 2E(ii); and
– right-of-use assets related to interests in leasehold land where the interest in the land is held as inventory are carried at the lower of cost and net
realisable value in accordance with note 2N.


F Leased Assets (continued)
The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, or there is a change in
the Group’s estimate of the amount expected to be payable under a residual value guarantee, or there is a change arising from the reassessment of
whether the Group will be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.
The lease liability is also remeasured when there is a change in the scope of a lease or the consideration for a lease that is not originally provided
for in the lease contract (“lease modification”) that is not accounted for as a separate lease. In this case the lease liability is remeasured based on the
revised lease payments and lease term using a revised discount rate at the effective date of the modification.
(ii) As a Lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as
a finance lease if it transfers substantially all the risks and rewards incidental to the ownership of an underlying assets to the lessee. If this is not the
case, the lease is classified as an operating lease.
When a contract contains lease and non-lease components, the Group allocates the consideration in the contract to each component on a relative
stand-alone selling price basis. The rental income from operating leases is recognised in accordance with note 2AA(ii).
G Goodwill
Goodwill represents the excess of:
(i) the aggregate of the fair value of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value
of the Group’s previously held equity interest in the acquiree; over
(ii) the net fair value of the acquiree’s identifiable assets and liabilities measured as at the acquisition date.
When (ii) is greater than (i), then this excess is recognised immediately in profit or loss as a gain on a bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating unit,
or groups of cash-generating units, that is expected to benefit from the synergies of the combination and is tested annually for impairment (note
2I(ii)).
On disposal of a cash-generating unit during the year, any attributable amount of purchased goodwill is included in the calculation of the profit or
loss on disposal.
H Property Management Rights

Where the Group makes payments for the acquisition of property management rights, the amounts paid are capitalised as intangible assets and
stated at cost less accumulated amortisation and impairment losses (note 2I(ii)). Property management rights are amortised to the consolidated
profit and loss account on a straight-line basis over the terms of the management rights.
I Impairment of Assets
(i) Credit Losses from Financial Instruments, Contract Assets and Lease Receivables
For the Group’s trade receivables, contract assets and lease receivables, the Group recognises a loss allowance for expected credit losses (“ECL”)
which is measured at an amount equal to “lifetime ECLs” (which are the losses that are expected to result from all possible default events over the
expected lives of the items to which the ECL model applies). For the Group’s other financial assets measured at amortised cost, the loss allowance is
measured at an amount equal to “12-month ECLs” (which are losses that are expected to result from possible default events within the 12 months
after the reporting date) unless there has been a significant increase in credit risk of the financial instrument since initial recognition, in which case
the loss allowance is measured at an amount equal to “lifetime ECLs”. Financial assets measured at fair value are not subject to the ECL assessment.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all expected cash shortfalls (i.e. the
difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive).
In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition, the Group compares the risk of
default occurring on the financial instrument assessed at the reporting date with that assessed at the date of initial recognition. The Group considers
both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information
that is available without undue cost or effort.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk since initial recognition. Any change in the ECL
amount is recognised as an impairment gain or loss in profit or loss. The Group recognises an impairment gain or loss for all financial instruments
with a corresponding adjustment to their carrying amount through a loss allowance account.
198 MTR Corporation

I Impairment of Assets (continued)
(ii) Impairment of Other Assets
Internal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be
impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased:
• fixed assets (including right-of-use assets and service concession assets but other than assets carried at revalued amounts);
• property management rights;
• goodwill;
• railway construction in progress;
• property development in progress;
• deferred expenditure; and
Overview
• investments in subsidiaries, associates and joint ventures.
If any such indication exists, the asset’s recoverable amount is estimated. In addition, the recoverable amount for goodwill is estimated annually
whether or not there is any indication of impairment.
The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the
recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

An impairment loss is recognised in the consolidated profit and loss account whenever the carrying amount of an asset, or the cash-generating unit
to which it belongs, exceeds its recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce
the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other
assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value
less costs of disposal (if measurable) or value in use (if determinable).
In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable change in the estimates used to determine the
recoverable amount of the asset. An impairment loss in respect of goodwill is not reversed.
A reversal of impairment losses is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised
in prior years. Reversals of impairment losses are credited to the consolidated profit and loss account in the year in which the reversals are
recognised.
J Depreciation and Amortisation
(i) Investment properties are not depreciated.
(ii) Fixed assets other than investment properties, assets under construction and service concession assets which are amortised over the entire or
remaining period of the service concession (note 2E(iii)) are depreciated or amortised on a straight-line basis at rates sufficient to write off their cost
or valuation, less their estimated residual value, if any, over their estimated useful lives as follows:
Land and Buildings

Self-occupied buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the shorter of 50 years and the unexpired term of the lease
Leasehold land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the unexpired term of the lease
Civil Works
Excavation and boring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indefinite
Tunnel linings, underground civil structures, overhead structures and immersed tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 years
Station building structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 years
Depot structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 years
Kiosk structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 – 30 years
Cableway station tower and theme village structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 – 30 years


J Depreciation and Amortisation (continued)
Plant and Equipment
Rolling stock and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 – 42 years
Platform screen doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 – 35 years
Rail track . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 – 50 years
Environmental control systems, lifts and escalators, fire protection and drainage system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 – 45 years
Power supply systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 – 40 years
Aerial ropeway and cabin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 – 27 years
Automatic fare collection systems, metal station kiosks, and other mechanical equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 – 25 years
Train control and signalling equipment, station announcement systems, telecommunication systems and advertising panels . . . . . . . . . . . . 5 – 35 years
Station architectural finishes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 – 30 years
Fixtures and fittings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 – 25 years
Maintenance equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 – 40 years
Office furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 – 15 years
Computer software licences and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 – 10 years
Computer equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 – 5 years
Cleaning equipment and tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Motor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 – 12 years
Where parts of an item of property, plant and equipment have different useful lives, each part is depreciated or amortised separately. The useful
lives of the various categories of fixed assets are reviewed annually in the light of actual asset condition, usage experience and the current asset
replacement programme.
(iii) No depreciation or amortisation is provided on assets under construction until the construction is completed and the assets are ready for
their intended use.
K Construction Costs
(i) Costs incurred by the Group in respect of feasibility studies on proposed railway related construction projects (including consultancy fees,
in-house staff costs and overheads) are dealt with as follows:
• where the proposed projects are at a preliminary review stage with no certainty of materialising, the costs concerned are charged to the
consolidated profit and loss account; and
• where the proposed projects are at a detailed study stage, having been agreed based on a feasible financial plan, the costs concerned
are recorded as deferred expenditure until such time as a project agreement is reached, whereupon the costs are transferred to railway
construction in progress.
(ii) After entering into a project agreement, all costs incurred in the construction of the railway are dealt with as railway construction in progress
until commissioning of the railway line, whereupon the relevant construction costs are transferred to fixed assets.
L Joint Operations
A joint operation is an arrangement whereby the Group and other parties contractually agree to share control of the arrangement, and have rights
to the assets, and obligations for the liabilities, relating to the arrangement. The Group recognises its interest in the joint operation by combining the
assets, liabilities, revenues and expenses relating to its interest with similar items on a line by line basis. Consistent accounting policies are applied for
like transactions and events in similar circumstances.
The arrangements entered into by the Group with developers for Hong Kong property development without establishing separate entities are
considered to be joint operations in accordance with HKFRS 11, Joint Arrangements. Under the development arrangements, the Group is normally
responsible for its own costs, including in-house staff costs and the costs of enabling works, and the developers normally undertake to pay for all
other project costs such as land premium (or such remaining portion as not already paid by the Group), construction costs, professional fees, etc.
In respect of its interests in such operations, the Group accounts for the purchase consideration of development rights, costs of enabling works
(including any interest accrued) and land costs (including any land premiums) paid net of payments received as property development in progress.
In cases where payments received from developers exceed the related expenditures incurred by the Group, such excess is recorded as deferred
income. Expenses incurred by the Group on staff, overhead and consultancy fees in respect of these developments are also capitalised as property
development in progress. The Group’s share of income earned from such operations is recognised in the consolidated profit and loss account on the
basis of note 2M(iii) after netting off any related balance in property development in progress at that time.
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M Property Development
(i) Costs incurred by the Group in respect of site preparation, land costs, acquisition of development rights, aggregate cost of development,
borrowing costs capitalised, provisions and other direct expenses are dealt with as property development in progress.
(ii) Payments received from developers in respect of property developments are offset against the amounts in property development in progress
attributable to that development. Payments received from developers in excess of the balance in property development in progress are transferred
to deferred income which is included in creditors and other payables. In these cases, further costs subsequently incurred by the Group in respect of
that development are charged against deferred income.
(iii) Profits arising from the development of properties in Hong Kong undertaken in conjunction with property developers are recognised in the
consolidated profit and loss account as follows:
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where the Group receives payments from developers, profits arising from such payments are recognised when the foundation and site
enabling works are complete and acceptable for development, and after taking into account the outstanding risks and obligations, if any,
retained by the Group in connection with the development;
• where the Group receives a right to a share of the net surplus from the development, the Group’s share of the profit is initially recognised
once the amounts of revenue (including the fair value of any unsold properties) and costs for the development as a whole can be estimated
reliably. The Group’s interest in any unsold properties is subsequently remeasured on a basis consistent with the policy set out in note 2N and
included within properties held for sale; and
• where the Group receives a distribution of the assets of the development, profit is recognised based on the fair value of such assets at
the time of receipt and after taking into account any outstanding risks and obligations retained by the Group in connection with the
development.

Upon recognition of profit, the balance of deferred income or property development in progress relating to that development is credited or charged
to the consolidated profit and loss account, as the case may be.
(iv) Revenue arising from sales of properties in Mainland of China is recognised when the legal assignment is completed, which is the point in
time when the purchaser has the ability to direct the use of the properties and obtain substantially all of the remaining benefits of the properties.
Deposits and instalments received on properties sold prior to the date of revenue recognition are included in the consolidated statement of financial
position under “Creditors and other payables”.
(v) Where properties under construction are received from a development for investment purpose, these properties are recognised as
investment properties at fair value. Further costs incurred in the construction of those assets and the related fitting out costs are capitalised in
investment properties.
N Properties Held for Sale
Where properties are held for sale, those properties are stated initially at their cost and subsequently carried at the lower of cost and net realisable
value.
For those properties in Hong Kong, cost represents the fair value, as determined by reference to an independent open market valuation, upon the
recognition of profits arising from the development as set out in note 2M(iii).
For those properties in Mainland of China, cost is determined by the apportionment of the development costs attributable to the unsold properties.
Net realisable value represents the estimated selling price less costs to be incurred in selling the properties.
The amount of any write-down of properties to net realisable value is recognised as an expense in the period the write-down occurs. The amount of
any reversal of any write-down of properties arising from an increase in net realisable value is recognised as a reduction in the cost of properties sold
in the period in which the reversal occurs.
When properties held for sale are sold, the carrying amount of those properties is recognised in the consolidated profit and loss account.


O Investments in Securities
Investments in securities (other than investments in subsidiaries, associates and joint venture) are classified as at fair value through profit or loss
(“FVPL”). Changes in the fair value of the investments (including interest) are recognised in profit or loss.
Investments in securities are recognised/derecognised on the date the Group commits to purchase/sell the investments. Profit or loss on disposal of
investments in securities are determined as the difference between the net disposal proceeds and the carrying amount of the investments and are
accounted for in the consolidated profit and loss account as they arise.
P Stores and Spares

Stores and spares used for business operation are categorised as either revenue or capital. Revenue spares are stated at cost, using the weighted
average cost method and are recognised as expenses in the period in which the consumption occurs. Provision is made for obsolescence where
appropriate. Capital spares are included in fixed assets and stated at cost less accumulated depreciation and impairment losses (note 2I(ii)).
Depreciation is charged at the rates applicable to the relevant fixed assets against which the capital spares are held in reserve.
Q Contract Assets and Contract Liabilities

A contract asset is recognised when the Group recognises revenue (note 2AA) before being unconditionally entitled to the consideration under the
payment terms set out in the contract. Contract assets are assessed for ECL in accordance with the policy set out in note 2I(i) and are reclassified to
receivables when the right to the consideration has become unconditional (note 2S).
A contract liability is recognised when the customer pays consideration before the Group recognises the related revenue (note 2AA). A contract
liability would also be recognised if the Group has an unconditional right to receive consideration before the Group recognises the related revenue.
In such cases, a corresponding receivable would also be recognised (note 2S).
For a single contract with the customer, either a net contract asset or a net contract liability is presented. For multiple contracts, contract assets and
contract liabilities of unrelated contracts are not presented on a net basis.
When the contract includes a significant financing component, the contract balance includes interest accrued under the effective interest method
(note 2AB).
R Cash and Cash Equivalents

Cash and cash equivalents comprise cash at banks and on hand, demand deposits with banks and other financial institutions, and short-term highly
liquid investments that are readily convertible into known amounts of cash and subject to an insignificant risk of changes in value with a maturity at
acquisition within three months. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are also
included as a component of cash and cash equivalents for the purpose of the consolidated cash flow statement.
S Debtors and Other Receivables

A receivable is recognised when the Group has an unconditional right to receive consideration. A right to receive consideration is unconditional
if only the passage of time is required before payment of that consideration is due. If revenue has been recognised before the Group has an
unconditional right to receive consideration, the amount is presented as a contract asset (note 2Q). Receivables are stated at amortised cost using
the effective interest method less allowance for credit losses (note 2I(i)).
T Interest-bearing Borrowings
Interest-bearing borrowings are measured initially at fair value net of transaction costs incurred. The interest-bearing borrowings not subject to fair
value hedges are subsequently stated at amortised costs using effective interest method. Interest expense is recognised in accordance with the
Group’s accounting policy for interest and finance charges (note 2AB).
Subsequent to initial recognition, the carrying amount of interest-bearing borrowings subject to fair value hedges is remeasured and the change in
fair value attributable to the risk being hedged is recognised in the consolidated profit and loss account to offset the effect of the gain or loss on the
related hedging instrument.
U Creditors and Other Payables

Creditors and other payables are stated at amortised cost if the effect of discounting would be material, otherwise they are stated at cost.
V Derivative Financial Instruments and Hedging Activities

The Group uses derivative financial instruments such as interest rate swaps and currency swaps to manage its interest rate and foreign exchange
exposure. Based on the Group’s policies, these instruments are used solely for reducing or eliminating financial risks associated with the Group’s
investments and liabilities and not for trading or speculation purposes.
Derivatives are recognised at fair value and are remeasured at their fair value at the end of each reporting period. The method of recognising the
resulting gain or loss depends on whether the derivative is designated as a hedging instrument and the nature of the item being hedged.
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V Derivative Financial Instruments and Hedging Activities (continued)
Where hedge accounting applies, the Group designates derivatives employed as either: (1) a fair value hedge: to hedge the fair value of recognised
liabilities; (2) a cash flow hedge: to hedge the variability in cash flows of a recognised liability or the foreign currency risk of a firm commitment; or
(3) a hedge of a net investment: to hedge the variability in cash flows of a monetary item that is receivable from or payable to a foreign operation
where the settlement for the monetary item is neither planned nor likely to occur in foreseeable future.
(i) Fair Value Hedge

Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in the consolidated profit and loss
account, together with any changes in the fair value of the hedged assets or liabilities that are attributable to the hedged risk.
(ii) Cash Flow Hedge

The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognised in other
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comprehensive income which is accumulated separately in equity in the hedging reserve. The gain or loss relating to the ineffective portion is
recognised immediately in the consolidated profit and loss account.
Amounts previously recognised in other comprehensive income and accumulated in equity are transferred to the consolidated profit and loss
account in the periods when the hedged item is recognised in the consolidated profit and loss account. However, when the transaction in respect
of the hedged item results in the recognition of a non-financial asset or liability, the associated gains and losses that were previously recognised
in other comprehensive income and accumulated in equity are transferred from equity and included in the initial cost or carrying amount of the
non-financial asset or liability.
When a hedging instrument expires or is sold, terminated or exercised, or the Group revokes designation of the hedge relationship but the

transaction in respect of the hedged item is still expected to occur, the cumulative gain or loss existing in equity at that time remains in equity until
the transaction occurs and it is recognised in accordance with the above policy. However, if the transaction in respect of the hedged item is no
longer expected to occur, the gain or loss accumulated in equity is immediately transferred to the consolidated profit and loss account.
(iii) Hedge of a Net Investment

The effective portion of changes in the fair value of derivatives that are designated and qualified as hedges of net investments in foreign operations
is recognised in other comprehensive income which is accumulated separately in equity in the exchange reserve. The gain or loss relating to the
ineffective portion is recognised immediately in the consolidated profit and loss account.
Amounts previously recognised in other comprehensive income and accumulated in equity are transferred to the consolidated profit and loss
account as a reclassification adjustment on the disposal or partial disposal of the foreign operation.
(iv) Derivatives That Do Not Qualify for Hedge Accounting
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the consolidated
profit and loss account.
W Employee Benefits
(i) Salaries, annual leave, other allowances, contributions to defined contribution retirement schemes, including contributions to Mandatory
Provident Funds (“MPF”) as required under the Hong Kong Mandatory Provident Fund Schemes Ordinance, and other costs of non-monetary
benefits are accrued in the period in which the associated services are rendered by employees of the Group. Where these benefits are incurred for
staff relating to construction projects, capital works and property developments, they are capitalised as part of the cost of the qualifying assets. In
other cases, they are recognised as expenses in the consolidated profit and loss account as incurred.
(ii) The Group’s net obligation in respect of defined benefit retirement schemes is calculated separately for each scheme by estimating Financials and Other Information
the amount of future benefit that employees have earned in return for their service in the current and prior years; that benefit is discounted to
determine the present value, and the fair value of any scheme assets is deducted. The calculation is performed by a qualified actuary using the
Projected Unit Credit Method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the scheme or reductions in future contributions to the scheme. Service cost and net
interest expense/income on the net defined benefit liability/asset are recognised either as an expense in the consolidated profit and loss account, or
capitalised as part of the cost of the relevant construction projects, capital works or property developments, as the case may be. Current service cost
is measured as the increase in the present value of the defined benefit obligation resulting from employee service in the current period. Net interest
expense/income for the period is determined by applying the discount rate used to measure the defined benefit obligation at the beginning of the
reporting period to the net defined benefit liability/asset. The discount rate is the yield at the end of the reporting period on high quality corporate
bonds that have maturity dates approximating the weighted average duration of the scheme’s obligations.


W Employee Benefits (continued)
When the benefits of a scheme are changed, or when a scheme is curtailed, current service cost for the portion of the changed benefit related to past
service by employees, or the gain or loss on curtailment, is recognised as an expense in the profit or loss account or capitalised at the earlier of when
the scheme amendment or curtailment occurs and when related restructuring costs or termination benefits are recognised.
Remeasurements arising from defined benefit retirement schemes are recognised in other comprehensive income and reflected immediately in
retained earnings. Remeasurements comprise of actuarial gains and losses, the return on scheme assets (excluding amounts included in net interest
on the net defined benefit liability/asset) and any change in the effect of the asset ceiling (excluding amounts included in net interest on the net
defined benefit liability/asset).
(iii) Equity-settled share-based payments are measured at fair value at the date of grant.
• For share options, the fair value determined at the grant date is recognised as staff costs, unless the relevant employee expenses qualify for
recognition as an asset, on a straight-line basis over the vesting period and taking into account the probability that the options will vest,
with a corresponding increase in the employee share-based capital reserve within equity. Fair value is measured by use of the Black-Scholes
model, taking into account the terms and conditions upon which the options are granted. The expected life used in the model is adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
During the vesting period, the number of share options that is expected to vest is reviewed. Any adjustment to the cumulative fair value
recognised in prior years is charged/credited to the consolidated profit and loss account in the year of the review, unless the original
employee expenses qualify for recognition as an asset, with a corresponding adjustment to the employee share-based capital reserve. On
vesting date, the amount recognised as an expense is adjusted to reflect the actual number of share options that vest (with a corresponding
adjustment to the employee share-based capital reserve). The equity amount is recognised in the employee share-based capital reserve until
either the option is exercised which is transferred to the share capital account or the option is lapsed (on expiry of the share options) which is
released directly to retained profits.
• For award shares under the Executive Share Incentive Scheme, the amounts to be expensed as staff costs are determined by reference to
the fair value of the award shares granted, taking into account all non-vesting conditions associated with the grants. The total expense is
recognised over the relevant vesting periods, with a corresponding credit to the employee share-based capital reserve under equity.
For those award shares which are amortised over the vesting periods, the Group reviews its estimates of the number of award shares
that are expected to ultimately vest based on the vesting conditions at the end of each reporting period. Any resulting adjustment to the
cumulative fair value recognised in prior years is charged/credited to consolidated profit and loss account in the year of the review, with a
corresponding adjustment to the employee share-based capital reserve. Upon vesting of award shares, the related costs of the vested award
shares purchased from the market (the “purchased shares”) and shares received in relation to scrip dividend and shares purchased from
the proceeds of cash ordinary dividends received (the “ordinary dividend shares”) are credited to Shares held for Executive Share Incentive
Scheme, with a corresponding decrease in employee share-based compensation reserve for the purchased shares, and decrease in retained
earnings for the ordinary dividend shares.
For cash-settled share-based payments, a liability equal to the portion of the services received is recognised at the fair value of the shares
determined at the end of each reporting period.
(iv) Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when it
recognises restructuring costs involving the payment of termination benefits.
X Income Tax
(i) Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Income tax is recognised in the
consolidated profit and loss account except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in
which case it is recognised in other comprehensive income or directly in equity respectively.
(ii) Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the
reporting period, and any adjustment to tax payable in respect of previous years.
(iii) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets also arise from unused tax losses and
unused tax credits. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit (provided they are not part of a business combination).
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X Income Tax (continued)
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and an associate, and interests
in a joint venture, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and
interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Where investment properties are carried at their fair value in accordance with the accounting policy set out in note 2E(i), the amount of deferred tax
recognised is measured using the tax rates that would apply on sale of those assets at their carrying value at the end of the reporting period unless
the property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied
in the property over time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based on the expected
manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the end of
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the reporting period. Deferred tax assets and liabilities are not discounted.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it
becomes probable that sufficient taxable profits will be available.
Y Financial Guarantee Contracts

Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder of the guarantee for a loss it incurs
because a specified debtor fails to make payment to the holder when due in accordance with the original or modified terms of a debt instrument.

When the Group issues a financial guarantee, where the effect is material, the fair value of the guarantee, after netting off any consideration received
or receivable at inception, is initially debited to the consolidated profit and loss account and recognised as deferred income within creditors
and other payables. The fair value of financial guarantees issued at the time of issuance is determined by reference to fees charged in an arm’s
length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by
comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had
the guarantees not been available, where reliable estimates of such information can be made.
The amount of the guarantee initially recognised as deferred income is amortised in the consolidated profit and loss account over the term of the
guarantee as income from financial guarantees issued.
The Group monitors the risk that the specified debtor will default on the contract and recognises a provision when ECLs on the financial guarantees
are determined to be higher than the amount carried in creditors and other payables in respect of the guarantees (i.e. the amount initially
recognised, less accumulated amortisation). To determine ECLs, the Group considers changes in the risk of default of the specified debtor since the
issuance of the guarantee. A 12-month ECL is measured unless the risk that the specified debtor will default has increased significantly since the
guarantee is issued, in which case a lifetime ECL is measured. The same definition of default and the same assessment of significant increase in credit
risk as described in note 2I(i) apply.
As the Group is required to make payments only in the event of a default by the specified debtor in accordance with the terms of the instrument that
is guaranteed, an ECL is estimated based on the expected payments to reimburse the holder for a credit loss that it incurs less any amount that the
Group expects to receive from the holder of the guarantee, the specified debtor or any other party. The amount is then discounted using the current
risk-free rate adjusted for risks specific to the cash flows.
Z Provisions, Contingent Liabilities and Onerous Contracts

(i) Provisions and Contingent Liabilities Financials and Other Information
Provisions are recognised when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow
of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material,
provisions are stated at the present value of the expenditure expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only
be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote.
(ii) Onerous Contracts

An onerous contract exists when the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received from the contract. Provisions for onerous contracts are measured at the present value of the lower of
the expected cost of terminating the contract and the net cost of continuing with the contract.


AA Revenue Recognition
Revenue is recognised when control over a product or service is transferred to the customer, or the lessee has the right to use the asset, at the
amount of promised consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf of third parties.
Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts. Further details of the Group’s revenue and other
income recognition policies are as follows:
(i) Fare revenue is recognised when the journey is provided.
(ii) Rental income from investment properties, station kiosks and other railway premises under operating leases is recognised in profit or loss in
equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to
be derived from the use of the leased assets. Lease incentives granted are recognised in the consolidated profit and loss account as an integral part
of the aggregate net lease payments receivable. Variable lease payments that do not depend on an index or a rate are recognised as income in the
accounting period in which they are earned.
(iii) Contract revenue is recognised when the outcome of a consultancy, construction or service contract can be estimated reliably. Contract
revenue is recognised progressively over-time using the cost-to-cost method, i.e. based on the proportion of the actual costs incurred relative to the
estimated total costs. When the outcome of a consultancy, construction or service contract cannot be estimated reliably, revenue is recognised only
to the extent of contract costs incurred that are expected to be recovered.
(iv) Income from other railway and station commercial businesses, property management, railway franchises and service concessions are
recognised when the services are provided.
AB Interest and Finance Charges

Interest income and expense directly attributable to the financing of capital projects prior to their completion or commissioning are capitalised.
Exchange differences arising from foreign currency borrowings relating to the acquisition of assets are capitalised to the extent that they are
regarded as an adjustment to capitalised interest costs. Interest expense attributable to other purposes is charged to the consolidated profit and loss
account.
Finance charges on lease liabilities are charged to the consolidated profit and loss account over the period of the lease so as to produce an
approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period.
AC Foreign Currency Translation

Foreign currency transactions during the year are translated into Hong Kong dollars and recorded at exchange rates ruling at the transaction dates.
Foreign currency monetary assets and liabilities are translated into Hong Kong dollars at the exchange rates ruling at the end of the reporting period.
Exchange gains and losses are recognised in the consolidated profit and loss account.
The results of foreign enterprises are translated into Hong Kong dollars at the average exchange rates for the year. Statement of financial position
items are translated into Hong Kong dollars at the closing exchange rates at the end of the reporting period. The resulting exchange differences are
recognised in other comprehensive income and accumulated separately in equity in the exchange reserve.
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AD Segment Reporting
Operating segments, and the amounts of each segment item reported in the consolidated accounts, are identified from the financial information
provided regularly to the Group’s most senior executive management for the purposes of allocating resources to, and assessing the performance of,
the Group’s various lines of businesses and operations in different geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic
characteristics and are similar in respect of the nature of services and products, the type or class of customers, the methods used to provide the
services or distribute the products, and the nature of the regulatory environment. Operating segments which are not individually material may be
aggregated if they share a majority of these criteria.
AE Related Parties
For the purposes of these accounts, a person, or a close member of that person’s family, is related to the Group if that person has control, joint
Overview
control or significant influence over the Group, or is a member of the key management personnel of the Group.
An entity is related to the Group if (i) the entity and the Group are members of the same group; (ii) the entity is an associate or joint venture of the
Group; (iii) the entity is a post-employment benefit scheme for the benefit of employees of the Group or of any entity that is a related party of the
Group; (iv) an individual who is a related party of the Group has control or joint control over that entity; (v) a person, or a close member of that
person’s family, who has control or joint control over the Group has significant influence over the entity or is a member of the key management
personnel of that entity; or (vi) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group
or to the Group’s parent.

AF Government Grants
Government grants are assistance by governments in the form of transfer of resources in return for the Group’s compliance with the conditions
attached thereto. Government grants which represent compensation for the cost of an asset are deducted from the cost of the asset in arriving at
its carrying value to the extent of the amounts received and receivable as at the end of the reporting period. Government grants which represent
compensation for expenses or losses are deducted from the related expenses. Any excess of the amount of grant received or receivable over the cost
of the asset or the expenses or losses at the end of the reporting period are carried forward as advance receipts or deferred income to set off against
the future cost of the asset or future expenses or losses.
3 Rail Merger with Kowloon-Canton Railway Corporation and Operating

Arrangements for High Speed Rail and Tuen Ma Line Phase 1
Rail Merger
On 2 December 2007 (the “Appointed Day”), the Company’s operations merged with those of Kowloon-Canton Railway Corporation (“KCRC”) (the
“Rail Merger”). The structure and key terms of the Rail Merger were set out in a series of transaction agreements entered into between, inter alia, the
Government of the Hong Kong Special Administrative Region (the “HKSAR Government”), KCRC and the Company including the Service Concession
Agreement, Property Package Agreements and Merger Framework Agreement.
Pursuant to the Service Concession Agreement (“SCA”), KCRC granted the Company the right to access, use and operate the KCRC system for an
initial term of 50 years (the “Concession Period”), which will be extended if the franchise period (as it relates to the KCRC railway) is extended. In
accordance with the terms of the SCA, the Company paid an upfront lump sum to KCRC on the Appointed Day and is obliged to pay to KCRC fixed
annual payments and variable annual payments (calculated on a tiered basis by reference to the revenue generated from the KCRC system above
certain thresholds).
Under the SCA, the Company is responsible for the expenditure incurred in relation to the maintenance, repair, replacement and upgrade of the
KCRC system (with any new assets acquired being classified as “additional concession property”). To the extent that such expenditure exceeds an
agreed threshold (“Capex Threshold”), the Company will be reimbursed for any above-threshold expenditure at the end of the Concession Period
with such reimbursement to be on the basis of depreciated book value.
Details of the Rail Merger are disclosed in the Company’s circular dated 3 September 2007.

3 Rail Merger with Kowloon-Canton Railway Corporation and Operating

Arrangements for High Speed Rail and Tuen Ma Line Phase 1 (continued)
Operating Arrangements for High Speed Rail
On 23 August 2018, the Company entered into relevant agreements with the HKSAR Government and KCRC to supplement and amend the then
current agreements to enable the Company to operate the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (“High
Speed Rail” or “HSR”) in substantially the same manner as the existing railway network. Under the supplemental service concession agreement that
was executed on 23 August 2018 (“SSCA-HSR”), the operating period with respect to the HSR is for an initial term of 10 years from 23 September
2018 (“Concession Period (High Speed Rail)”), which may be extended subject to further negotiation between the Company and KCRC in accordance
with the mechanism set out in the SSCA-HSR. Under the SSCA-HSR, the Company is responsible for the expenditure incurred in relation to the
maintenance, repair, replacement and upgrade of the concession property of the High Speed Rail (with any new assets acquired being classified
as “additional concession property (High Speed Rail)”). To the extent that such expenditure exceeds an agreed threshold (“Capex Threshold (High
Speed Rail)”), the Company will be reimbursed for any above-threshold expenditure at the end of the concession period with such reimbursement
to be on the basis of depreciated book value.
Details of the SSCA-HSR are disclosed in the Company’s announcement dated 23 August 2018.
Operating Arrangements for Tuen Ma Line Phase 1

On 11 February 2020, the Company entered into relevant agreements with the HKSAR Government and KCRC to supplement and amend the
then current agreements to enable the Company to operate Tuen Ma Line Phase 1 (which extends the Ma On Shan Line from Tai Wai to Kai Tak) in
substantially the same manner as the existing railway network for a period of two years from 14 February 2020 including a supplemental service
concession agreement (“SSCA-SCL”) with KCRC. Prior to the full opening of the Tuen Ma Line, the parties are obliged to commence exclusive
negotiations in good faith with a view to agreeing the terms of a supplemental service concession agreement for the entire Tuen Ma Line (which is
intended to replace the SSCA-SCL that was executed on 11 February 2020). Under the SSCA-SCL, the Company is responsible for the expenditure
incurred in relation to the maintenance, repair, replacement and upgrade of the concession property of the Tuen Ma Line Phase 1.
Details of the SSCA-SCL are disclosed in the Company’s announcement dated 11 February 2020.
4 Revenue from Hong Kong Transport Operations

Revenue from Hong Kong transport operations comprises:
in HK$ million 2020 2019

Domestic Service 9,229 12,714
Cross-boundary Service 516 3,164
High Speed Rail 1,277 2,098
Airport Express 140 1,011
Light Rail and Bus 481 677
Intercity Service 20 175
Others 233 99
11,896 19,938
Domestic Service comprises the Kwun Tong, Tsuen Wan, Island, South Island, Tung Chung, Tseung Kwan O, Disneyland Resort, East Rail (excluding
Cross-boundary Service), West Rail and Ma On Shan Lines, and Tuen Ma Line Phase 1. Others include mainly by-law infringement surcharge, Octopus
load agent fees and other rail-related income.
208 MTR Corporation

5 Revenue from Hong Kong Station Commercial Businesses
Revenue from Hong Kong station commercial businesses comprises:

Duty free shops and kiosks 2,021 4,800
Advertising 516 1,130
Telecommunication income 640 743
Other station commercial income 92 126
3,269 6,799
6 Revenue from Hong Kong Property Rental and Management Businesses
Overview
Revenue from Hong Kong property rental and management businesses comprises:

Property rental income 4,817 4,833
Property management income 237 304
5,054 5,137

7 Revenue and Expenses Relating to Mainland of China and International
Subsidiaries
Revenue and expenses relating to Mainland of China and international subsidiaries comprise:
2020 2019
in HK$ million Revenue Expenses* Revenue Expenses*

Melbourne Train 10,308 10,280 10,680 10,154
Sydney Metro North West 681 752 1,110 1,073
Sydney Metro City & Southwest 1,493 1,474 515 450
MTR Nordic** 4,747 4,600 4,862 4,832
TfL Rail/Elizabeth Line 2,363 2,177 2,037 1,899
Shenzhen Metro Line 4 (“SZL4”) 692 719 761 599
Others 1,144 893 1,120 753
21,428 20,895 21,085 19,760
Property development in Mainland of China – 13 – 25
Total Mainland of China and international subsidiaries 21,428 20,908 21,085 19,785
* Expenses include staff costs of HK$9,260 million (2019: HK$9,006 million) (note 10A), maintenance and related work costs of HK$2,850 million (2019: HK$3,322 million)
and energy and utilities of HK$782 million (2019: HK$876 million). Financials and Other Information
** MTR Nordic comprises the Stockholm Metro, MTR Tech, MTRX (formerly known as “MTR Express”), Stockholm Commuter Rail (“Stockholms pendeltåg”) and Emtrain
operations in Sweden.

8 Revenue from Other Businesses

Revenue from other businesses comprises income from:

Ngong Ping 360 65 392
Consultancy business 231 184
Project management for HKSAR Government 565 935
Miscellaneous businesses 33 34
894 1,545
9 Segmental Information
The Group’s businesses consist of (i) recurrent businesses (comprising Hong Kong transport operations, Hong Kong station commercial businesses,
Hong Kong property rental and management businesses, Mainland of China and international railway, property rental and management businesses
and other businesses) and (ii) property development businesses (together with recurrent businesses referred to as underlying businesses).
The Group manages its businesses by the various business executive committees. In a manner consistent with the way in which information is
reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the
Group has identified the following reportable segments:
(i) Hong Kong transport operations: The provision of passenger operation and related services on the domestic mass transit railway system in
Hong Kong, the Airport Express serving both the Hong Kong International Airport and the AsiaWorld-Expo at Chek Lap Kok, cross-boundary railway
connection with the border of Mainland of China at Lo Wu and Lok Ma Chau, the Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong
Section) (“High Speed Rail”), light rail and bus feeder with railway system in the north-west New Territories and intercity railway transport with
certain cities in the Mainland of China.
(ii) Hong Kong station commercial businesses: Commercial activities including the letting of advertising, retail and car parking spaces at railway
stations, the provision of telecommunication and bandwidth services in railway premises and other commercial activities within the Hong Kong
transport operations network.
(iii) Hong Kong property rental and management businesses: The letting of retail, office and car parking spaces and the provision of estate
management services in Hong Kong.
(iv) Hong Kong property development: Property development activities at locations near the railway systems in Hong Kong.
(v) Mainland of China and international railway, property rental and management businesses: The construction, operation and maintenance of
mass transit railway systems including station commercial activities outside of Hong Kong and the letting of retail spaces and provision of estate
management services in the Mainland of China.
(vi) Mainland of China property development: Property development activities in the Mainland of China.
(vii) Other businesses: Businesses not directly relating to transport operations or properties such as Ngong Ping 360, which comprises cable
car operation in Tung Chung and related businesses at the Ngong Ping Theme Village, railway consultancy business and the provision of project
management services to the HKSAR Government.
210 MTR Corporation

9 Segmental Information (continued)
The results of the reportable segments and reconciliation to the corresponding consolidated totals in the consolidated accounts are shown below:
international affiliates
Mainland of
China and
international
Hong Kong railway,
Hong Kong property property Mainland
Hong Kong station rental and Hong Kong rental and of China
transport commercial management property management property Other Un-allocated
in HK$ million operations businesses businesses development businesses development businesses amount Total
2020
Revenue from contracts with
customers within the scope
of HKFRS 15 11,896 1,262 315 – 21,289 – 886 – 35,648
Overview
– Recognised at a point
in time 11,140 29 – – 1,994 – 67 – 13,230
– Recognised over time 756 1,233 315 – 19,295 – 819 – 22,418
Revenue from other sources – 2,007 4,739 – 139 – 8 – 6,893
– Lease payments that are
fixed or depend on
an index or a rate – 1,971 4,664 – 137 – 7 – 6,779
– Variable lease payments
that do not depend on
an index or a rate – 36 75 – 2 – 1 – 114
Total revenue 11,896 3,269 5,054 – 21,428 – 894 – 42,541

Operating expenses (12,318) (509) (850) – (20,895) (13) (2,496) – (37,081)
Project study and business
development expenses – – – – (183) – – (96) (279)
Operating (loss)/profit
before Hong Kong property
development, depreciation,
amortisation and variable
annual payment (422) 2,760 4,204 – 350 (13) (1,602) (96) 5,181
Profit on Hong Kong property
development – – – 6,491 – – – – 6,491
Operating (loss)/profit before
depreciation, amortisation
and variable annual
payment (422) 2,760 4,204 6,491 350 (13) (1,602) (96) 11,672
Depreciation and amortisation (4,810) (197) (18) – (272) – (68) – (5,365)
Variable annual payment (176) (61) (1) – – – – – (238)
Share of profit of associates
and joint venture – – – – 424 – 181 – 605
(Loss)/profit before interest,
finance charges and taxation (5,408) 2,502 4,185 6,491 502 (13) (1,489) (96) 6,674
Interest and finance charges – – – – (62) 93 – (1,035) (1,004)
Investment property
revaluation loss – – (9,090) – (100) – – – (9,190)
Income tax – – – (1,049) (41) (15) – (196) (1,301)
(Loss)/profit for the year ended
31 December 2020 (5,408) 2,502 (4,905) 5,442 299 65 (1,489) (1,327) (4,821)
Assets
Fixed assets 124,355 2,928 85,532 – 7,473 58 586 – 220,932
Other segment assets * 6,610 587 911 3,412 9,739 4,447 1,760 14,709 42,175
Goodwill and property Financials and Other Information
management rights – – 16 – 63 – – – 79
Property development
in progress – – – 11,942 – – – – 11,942
Deferred expenditure 326 – 16 3 – – 771 – 1,116
Deferred tax assets – 2 – – 443 – 25 – 470
Investments in securities – – – – 5 249 214 – 468
Properties held for sale – – – 1,572 – 228 – – 1,800
Interests in associates and
joint venture – – – – 10,530 – 1,062 – 11,592
Total assets 131,291 3,517 86,475 16,929 28,253 4,982 4,418 14,709 290,574
Liabilities
Segment liabilities 8,045 2,090 2,588 12,924 11,024 875 3,417 62,335 103,298
Obligations under service
concession 10,114 – – – 181 – – – 10,295
Total liabilities 18,159 2,090 2,588 12,924 11,205 875 3,417 62,335 113,593
Other information
Capital expenditure on:
Fixed assets 5,928 497 3,516 – 249 – 30 – 10,220
in progress – – – 687 – – – – 687
* Other segment assets mainly include debtors, stores and spares, cash and cash equivalents and other assets employed in the operations of individual business
segments.


international affiliates
Mainland of
China and
international
Hong Kong railway,
Hong Kong property property Mainland
Hong Kong station rental and Hong Kong rental and of China
transport commercial management property management property Other Un-allocated
in HK$ million operations businesses businesses development businesses development businesses amount Total
2019
Revenue from contracts with
customers within the scope
of HKFRS 15 19,938 2,026 304 – 20,902 – 1,529 – 44,699
– Recognised at a point
in time 19,174 49 – – 2,701 – 387 – 22,311
– Recognised over time 764 1,977 304 – 18,201 – 1,142 – 22,388
Revenue from other sources – 4,773 4,833 – 183 – 16 – 9,805
– Lease payments that are
fixed or depend on
an index or a rate – 4,511 4,702 – 182 – 14 – 9,409
– Variable lease payments
that do not depend on
an index or a rate – 262 131 – 1 – 2 – 396
Total revenue 19,938 6,799 5,137 – 21,085 – 1,545 – 54,504

Operating expenses (14,029) (680) (851) – (19,760) (25) (3,557) – (38,902)
Project study and business
development expenses – – – – (201) – – (75) (276)
Operating profit/(loss)
before Hong Kong property
development, depreciation,
amortisation and variable
annual payment 5,909 6,119 4,286 – 1,124 (25) (2,012) (75) 15,326
Profit on Hong Kong property
development – – – 5,707 – – – – 5,707
Operating profit/(loss) before
depreciation, amortisation
and variable annual
payment 5,909 6,119 4,286 5,707 1,124 (25) (2,012) (75) 21,033
Depreciation and amortisation (4,728) (192) (16) – (236) – (65) – (5,237)
Variable annual payment (1,772) (805) (6) – – – – – (2,583)
Share of profit of associates
and joint venture – – – – 54 – 234 – 288
(Loss)/profit before interest,
finance charges and taxation (591) 5,122 4,264 5,707 942 (25) (1,843) (75) 13,501
Interest and finance charges – – – – (57) 80 – (882) (859)
Investment property
revaluation gain/(loss) – – 1,449 – (77) – – – 1,372
Income tax – – – (176) (200) (6) – (1,540) (1,922)
(Loss)/profit for the year ended
31 December 2019 (591) 5,122 5,713 5,531 608 49 (1,843) (2,497) 12,092
Assets
Fixed assets 123,669 2,598 91,110 – 7,544 58 626 – 225,605
Other segment assets* 3,552 310 459 2,850 8,549 4,500 1,665 15,553 37,438
Goodwill and property
management rights – – 21 – 56 – – – 77
in progress – – – 12,022 – – – – 12,022
Deferred expenditure 140 – 7 – – – 1,801 – 1,948
Deferred tax assets – 2 – – 131 1 – – 134
Investments in securities – – – – – – 386 – 386
Properties held for sale – – – 1,034 – 211 – – 1,245
Interests in associates and
joint venture – – – – 9,335 – 1,024 – 10,359
Total assets 127,361 2,910 91,597 15,906 25,615 4,770 5,502 15,553 289,214
Liabilities
Segment liabilities 11,694 2,126 2,379 10,434 9,449 864 3,162 51,958 92,066
Obligations under service
concession 10,177 – – – 173 – – – 10,350
Total liabilities 21,871 2,126 2,379 10,434 9,622 864 3,162 51,958 102,416
Other information
Capital expenditure on:
Fixed assets 5,085 449 311 – 204 – 28 – 6,077
in progress – – – 3,819 – – – – 3,819
* Other segment assets mainly include debtors, stores and spares, cash and cash equivalents and other assets employed in the operations of individual business
segments.
212 MTR Corporation

Unallocated assets and liabilities mainly comprise cash, bank balances and deposits, tax reserve certificates, derivative financial assets and liabilities,
interest-bearing loans and borrowings, current taxation as well as deferred tax liabilities.
For the year ended 31 December 2020, revenue from two customers (2019: one customer) of the Mainland of China and international railway,
property rental and management businesses segment has exceeded 10% of the Group’s revenue. Approximately 16.49% and 10.60% of the Group’s
total revenue was attributable to each of the two customers respectively (2019: Approximately 14.47% of the Group’s total revenue was attributable
to the customer).
The following table sets out information about the geographical location of the Group’s revenue from external customers and the Group’s fixed
assets, goodwill and property management rights, property development in progress, deferred expenditure and interests in associates and joint
venture (“specified non-current assets”). The geographical location of customers is based on the location at which the services were provided or
goods were delivered. The geographical location of the specified non-current assets is based on the physical location of the asset in the case of
investment properties, other property, plant and equipment and property development in progress, the location of the proposed capital project
Overview
in the case of deferred expenditure, the location of the operation to which they are related in the case of service concession assets, goodwill and
property management rights and the location of operation in the case of interests in associates and joint venture.
Revenue from external customers Specified non-current assets
in HK$ million 2020 2019 2020 2019

Hong Kong SAR (place of domicile) 21,043 33,357 227,537 233,019

Australia 12,482 12,305 1,309 941
Mainland of China and Macao SAR 1,896 1,934 15,935 15,155
Sweden 4,747 4,862 819 786
United Kingdom 2,373 2,046 61 110
21,498 21,147 18,124 16,992
42,541 54,504 245,661 250,011
As at 31 December 2020, the aggregated amount of the transaction price allocated to the remaining performance obligation under the Group’s
existing contracts is HK$41,913 million (2019: HK$42,183 million). This amount represents revenue expected to be recognised in the future
mainly from the fixed annual payments in relation to High Speed Rail under the SSCA-HSR, as well as the construction, consultancy and project
management contracts entered into with the Group’s customers. The Group will recognise the expected revenue in future when or as the work is
completed which is expected to occur over the next one to fifteen years.
The Group has applied the practical expedients in paragraph 121 of HKFRS 15 to exempt the disclosure of revenue expected to be recognised in the
future arising from certain contracts with customers in existence at the reporting date that are billed based on the performance completed to date
or have an original expected duration of one year or less.

10 Operating Expenses
A Total staff costs include:

Amounts charged to consolidated profit and loss account under:
– staff costs and related expenses for Hong Kong transport operations 6,317 6,489
– maintenance and related works for Hong Kong transport operations 105 117
– other expense line items for Hong Kong transport operations 505 304
– expenses relating to Hong Kong station commercial businesses 120 117
– expenses relating to Hong Kong property rental and management businesses 147 149
– expenses relating to Mainland of China and international subsidiaries 9,260 9,006
– expenses relating to other businesses 884 1,384
– project study and business development expenses 212 271
– profit on Hong Kong property development 18 24
Amounts capitalised under:
– property development in progress 204 194
– assets under construction and other projects 759 733
– service concession assets 449 359
Amounts recoverable 596 602
Total staff costs 19,576 19,749
Amounts recoverable relate to property management, entrustment works and other agreements.
The following expenditures are included in total staff costs:

Share-based payments 121 122
Contributions to defined contribution retirement schemes and Mandatory Provident Fund 921 907
Amounts recognised in respect of defined benefit retirement schemes 451 469
1,493 1,498
B Auditors’ remuneration charged to the consolidated profit and loss account include:

Audit services 19 19
Tax services 2 2
Other audit related services 6 6
27 27
C Loss on disposal of fixed assets of HK$104 million (2019: HK$57 million) is included in operating expenses.
214 MTR Corporation

11 Remuneration of Members of the Board and the Executive Directorate
A Remuneration of Members of the Board and the Executive Directorate
(i) The emoluments of Members of the Board and the Executive Directorate of the Company were as follows:
Variable
Base pay, Retirement remuneration
allowances and scheme related to
in HK$ million Fees benefits in kind contribution performance Total
2020
– Rex Auyeung Pak-kuen 1.6 – – – 1.6
– Andrew Clifford Winawer Brandler 0.5 – – – 0.5
– Bunny Chan Chung-bun (appointed on 20 May 2020)** 0.2 – – – 0.2
0.4 – – – 0.4
Overview
– Walter Chan Kar-lok
– Pamela Chan Wong Shui 0.5 – – – 0.5
– Dorothy Chan Yuen Tak-fai 0.5 – – – 0.5
– Cheng Yan-kee 0.5 – – – 0.5
– Anthony Chow Wing-kin 0.4 – – – 0.4
– Eddy Fong Ching 0.5 – – – 0.5
– James Kwan Yuk-choi 0.4 – – – 0.4
– Rose Lee Wai-mun 0.4 – – – 0.4
– Lucia Li Li Ka-lai 0.4 – – – 0.4
– Jimmy Ng Wing-ka 0.4 – – – 0.4
– Benjamin Tang Kwok-bun 0.4 – – – 0.4

– Allan Wong Chi-yun (retired on 20 May 2020)* 0.2 – – – 0.2
– Johannes Zhou Yuan 0.4 – – – 0.4
– James Henry Lau Jr (resigned on 1 June 2020) 0.2 – – – 0.2
– Christopher Hui Ching-yu (appointed on 1 June 2020) 0.2 – – – 0.2
– Secretary for Transport and Housing 0.4 – – – 0.4
– Permanent Secretary for Development (Works) 0.4 – – – 0.4
– Commissioner for Transport 0.4 – – – 0.4
– Jacob Kam Chak-pui – 8.0 1.2 0.8 10.0
– Adi Lau Tin-shing – 5.6 –~ 0.3 5.9
– Roger Francis Bayliss – 4.6 –~~ 0.3 4.9
– Margaret Cheng Wai-ching – 5.2 0.7 0.3 6.2
– Linda Choy Siu-min (appointed on 2 March 2020)**** – 3.2 0.5 0.2 3.9
– Peter Ronald Ewen (retired on 22 February 2021) – 4.3 0.7 0.2 5.2
– Herbert Hui Leung-wah – 4.8 0.7 0.3 5.8
– Tony Lee Kar-yun (appointed on 1 January 2020)**** – 4.2 0.7 0.2 5.1
– Gillian Elizabeth Meller – 4.3 0.7 0.3 5.3
– Linda So Ka-pik (resigned on 16 January 2020)*** – 0.5 –~~~ –~~~ 0.5
– David Tang Chi-fai – 4.8 0.7 0.3 5.8
– Jeny Yeung Mei-chun – 4.7 0.7 0.3 5.7
9.3 54.2 6.6 3.5 73.6
* Allan C Y Wong retired as a Member of the Board on the date shown in the above table. The amount of his emolument shown in the above table covers the period
from 1 January 2020 to the date of his retirement.
** Bunny C B Chan was appointed as a Member of the Board on the date shown in the above table. The amount of his emolument shown in the above table covers the
period from the date of his appointment to 31 December 2020.
*** Linda K P So resigned as a Member of the Executive Directorate on the date shown in the above table. The amount of her emolument shown in the above table covers
the period from 1 January 2020 to the date of her resignation.
**** Linda S M Choy and Tony K Y Lee were appointed as Members of the Executive Directorate on the date shown in the above table. The amounts of their emolument
shown in the above table cover the period from the dates of their respective dates of appointment to 31 December 2020.
~ The total contributions paid by the Company attributable to the financial year ended 31 December 2020 for Adi T S Lau, who participated in MTR Retirement Scheme
was HK$20,475, pursuant to the requirement of the scheme.
~ ~ The total contributions paid by the Company attributable to the financial year ended 31 December 2020 for Roger F Bayliss, who participated in Mandatory Provident
Fund Scheme was HK$18,000.
~ ~ ~ The total contributions under MTR Provident Fund Scheme paid by the Company and the pro-rated variable remuneration related to performance for the period from
1 January 2020 to the date of resignation for Linda K P So was HK$24,024 and HK$10,174 respectively.
All Members of the Board except Bunny Chan Chung-bun (appointed on 20 May 2020) and Christopher Hui Ching-yu (appointed on 1 June 2020)
agreed to waive HK$25,000 of each of their director fees for the year ended 31 December 2020. The aggregate amount of such remuneration waived
was donated by the Company for charity use. The amounts waived are excluded from the above table.
All Members of the Executive Directorate except Linda So Ka-pik (resigned on 16 January 2020) agreed to waive a portion of their remuneration for
the year ended 31 December 2020 (HK$566,040 for Jacob Kam Chak-pui, HK$378,000 for Adi Lau Tin-shing, HK$329,220 for Roger Francis Bayliss,
HK$326,400 for Margaret Cheng Wai-ching, HK$270,000 for Linda Choy Siu-min, HK$299,580 for Peter Ronald Ewen, HK$325,560 for Herbert Hui
Leung-wah, HK$282,000 for Tony Lee Kar-yun, HK$309,120 for Gillian Elizabeth Meller, HK$345,600 for David Tang Chi-fai and HK$337,320 for
Jeny Yeung Mei-chun). The aggregate amount of such remuneration waived was donated by the Company for charity use. The amounts waived
are excluded from the above table.


(continued)
A Remuneration of Members of the Board and the Executive Directorate (continued)

Variable
Base pay, Retirement remuneration
allowances and scheme related to
in HK$ million Fees benefits in kind contribution performance Total
2019
– Frederick Ma Si-hang (retired on 1 July 2019)# 0.9 – – – 0.9
– Rex Auyeung Pak-kuen (appointed on 7 March 2019)## 0.9 – – – 0.9
– Andrew Clifford Winawer Brandler 0.5 – – – 0.5
– Walter Chan Kar-lok (appointed on 22 May 2019)## 0.2 – – – 0.2
– Pamela Chan Wong Shui 0.4 – – – 0.4
– Dorothy Chan Yuen Tak-fai 0.5 – – – 0.5
– Cheng Yan-kee (appointed on 22 May 2019)## 0.3 – – – 0.3
– Vincent Cheng Hoi-chuen (retired on 22 May 2019)# 0.2 – – – 0.2
– Anthony Chow Wing-kin 0.5 – – – 0.5
– Eddy Fong Ching 0.5 – – – 0.5
– James Kwan Yuk-choi 0.5 – – – 0.5
– Kaizer Lau Ping-cheung (retired on 22 May 2019)# 0.2 – – – 0.2
– Rose Lee Wai-mun 0.4 – – – 0.4
– Lucia Li Li Ka-lai 0.5 – – – 0.5
– Jimmy Ng Wing-ka (appointed on 22 May 2019)## 0.3 – – – 0.3
– Abraham Shek Lai-him (retired on 22 May 2019)# 0.2 – – – 0.2
– Benjamin Tang Kwok-bun 0.4 – – – 0.4
– Allan Wong Chi-yun 0.5 – – – 0.5
– Johannes Zhou Yuan 0.5 – – – 0.5
– James Henry Lau Jr 0.4 – – – 0.4
– Secretary for Transport and Housing 0.4 – – – 0.4
– Permanent Secretary for Development (Works) 0.4 – – – 0.4
– Commissioner for Transport 0.4 – – – 0.4

– Lincoln Leong Kwok-kuen (retired on 1 April 2019)### – 4.4 0.3 – 4.7
– Jacob Kam Chak-pui – 8.1 1.2 1.4 10.7
– Roger Francis Bayliss (appointed on 18 March 2019)#### – 4.0 –^ 0.6 4.6
– Margaret Cheng Wai-ching – 5.0 0.7 0.8 6.5
– Peter Ronald Ewen – 4.5 0.6 0.7 5.8
– Herbert Hui Leung-wah – 5.0 0.7 0.7 6.4
– Adi Lau Tin-shing – 5.1 –^^ 0.9 6.0
– Gillian Elizabeth Meller – 4.5 0.7 0.7 5.9
– Linda So Ka-pik – 4.5 0.6 0.7 5.8
– David Tang Chi-fai – 5.1 0.7 0.8 6.6
– Jeny Yeung Mei-chun – 4.9 0.7 0.8 6.4
10.0 55.1 6.2 8.1 79.4
# Frederick S H Ma, Vincent H C Cheng, Kaizer P C Lau and Abraham L H Shek retired as Members of the Board on the date shown in the above table. The amounts of
their emolument shown in the above table cover the period from 1 January 2019 to the respective dates of retirement.
## Rex P K Auyeung, Walter K L Chan, Cheng Y K and Jimmy W K Ng were appointed as Members of the Board on the date shown in the above table. The amounts of
their emolument shown in the above table covers the period from the date of their respective dates of appointment to 31 December 2019.
### Lincoln K K Leong retired as a Member of the Executive Directorate on the date shown in the above table. The amount of his emolument shown in the above
table covers the period from 1 January 2019 to his retirement date. Lincoln K K Leong agreed to waive his variable remuneration related to performance in 2019 of
approximately HK$6,613,020.
#### Roger F Bayliss was appointed as a Member of the Executive Directorate on the date shown in the above table. The amount of his emolument shown in the above
table covers the period from the date of his appointment to 31 December 2019.
^ The total contributions paid by the Company attributable to the financial year ended 31 December 2019 for Roger F Bayliss, who participated in Mandatory Provident
Fund Scheme was HK$15,000.
^^ The total contributions paid by the Company attributable to the financial year ended 31 December 2019 for Adi T S Lau, who participated in MTR Retirement Scheme
was nil, pursuant to the requirement of the scheme.
216 MTR Corporation

(continued)

The above emoluments do not include the fair value of Award Shares granted under the Executive Share Incentive Scheme.
The director’s fees in respect of the office of the Secretary for Transport and Housing (Frank Chan Fan), the office of the Permanent Secretary for
Development (Works) (Lam Sai-hung) and the office of the Commissioner for Transport (Mable Chan for the period from 1 January 2020 to 31 July
2020 and Rosanna Law Shuk-pui for the period from 9 September 2020 to 31 December 2020), each of whom was appointed Director by the Chief
Executive of the HKSAR pursuant to Section 8 of the Mass Transit Railway Ordinance (“MTR Ordinance”), were received by Government rather than
by the individuals concerned.
The director’s fee in respect of James Henry Lau Jr (for the period from 1 January 2020 to 31 May 2020) and Christopher Hui Ching-yu (for the period
from 1 June 2020 to 31 December 2020), being the Secretary for Financial Services and the Treasury of Government for the respective periods, was
Overview
received by Government rather than by the individuals personally.
Alternate Directors were not entitled to director’s fees.
(ii) Restricted Shares and Performance Shares were granted to Members of the Executive Directorate under the Company’s Executive Share
Incentive Scheme. Performance Shares offered to Members of the Executive Directorate under such grants, in general, covered a period of three
years from the date of grant. The entitlements of each of the Members of the Executive Directorate with vesting periods falling in the years ended
31 December 2019 and 2020, if any, are as follows:
• Jacob C P Kam was granted 21,550 Restricted Shares on 8 April 2016, 22,050 Restricted Shares on 10 April 2017, 25,550 Restricted Shares

and 50,450 Performance Shares on 10 April 2018, 120,000 Contract-end Restricted Shares on 1 April 2019, 47,400 Restricted Shares and
91,750 Performance Shares on 8 April 2019, and 89,300 Restricted Shares on 8 April 2020, of which a total of 31,666 Restricted Shares were
vested in 2020 (2019: 23,050 Restricted Shares), and the respective fair value of the share-based payments recognised for the year ended
31 December 2020 was HK$7.6 million (2019: HK$5.5 million). No award shares were lapsed/forfeited in 2020 (2019: nil);
• Adi T S Lau was granted 8,400 Restricted Shares on 8 April 2016, 17,700 Restricted Shares on 10 April 2017, 16,450 Restricted Shares and
50,450 Performance Shares on 10 April 2018, 16,250 Restricted Shares on 8 April 2019 and 39,100 Restricted Shares on 8 April 2020, of which
a total of 16,799 Restricted Shares were vested in 2020 (2019: 14,183 Restricted Shares), and the respective fair value of the share-based
payments recognised for the year ended 31 December 2020 was HK$1.9 million (2019: HK$1.5 million). No award shares were lapsed/forfeited
in 2020 (2019: nil);
• Roger Francis Bayliss was granted 30,150 Performance Shares on 8 April 2019 and 30,250 Restricted Shares on 8 April 2020, of which nil was
vested in 2020 (2019: nil), and the respective fair value of the share-based payments recognised for the year ended 31 December 2020 was
HK$1.3 million (2019: HK$0.5 million). No award shares were lapsed/forfeited in 2020 (2019: nil);
• Margaret W C Cheng was granted 71,428 Restricted Shares on 19 August 2016, 16,950 Restricted Shares on 10 April 2017, 17,600 Restricted
Shares and 50,450 Performance Shares on 10 April 2018, 16,550 Restricted Shares on 8 April 2019 and 32,450 Restricted Shares on 8 April
2020, of which a total of 17,032 Restricted Shares were vested in 2020 (2019: 35,326 Restricted Shares), and the respective fair value of the
share-based payments recognised for the year ended 31 December 2020 was HK$1.8 million (2019: HK$1.7 million). No award shares were
lapsed/forfeited in 2020 (2019: nil);
• Peter Ronald Ewen was granted 15,050 Restricted Shares on 10 April 2017, 12,250 Restricted Shares and 50,450 Performance Shares on
10 April 2018, 12,500 Restricted Shares on 8 April 2019 and 26,500 Restricted Shares on 8 April 2020, of which 13,267 Restricted Shares were
vested in 2020 (2019: 9,099 Restricted Shares), and the respective fair value of the share-based payments recognised for the year ended
31 December 2020 was HK$1.6 million (2019: HK$1.3 million). No award shares were lapsed/forfeited in 2020 (2019: nil);
• Herbert L W Hui was granted 15,200 Restricted Shares on 10 April 2017, 14,200 Restricted Shares and 50,450 Performance Shares on 10 April
2018, 13,800 Restricted Shares on 8 April 2019 and 29,050 Restricted Shares on 8 April 2020, of which 14,401 Restricted Shares were vested in Financials and Other Information
2020 (2019: 9,799 Restricted Shares), and the respective fair value of the share-based payments recognised for the year ended 31 December
2020 was HK$1.6 million (2019: HK$1.3 million). No award shares were lapsed/forfeited in 2020 (2019: nil);
• Tony K Y Lee was granted 7,150 Restricted Shares on 8 April 2016, 6,800 Restricted Shares on 10 April 2017, 7,900 Restricted Shares and
10,500 Performance Shares on 10 April 2018, 8,300 Restricted Shares on 8 April 2019 and 15,500 Restricted Shares on 8 April 2020, of which
a total of 7,667 Restricted Shares were vested in 2020 (2019: 7,283 Restricted Shares), and the respective fair value of the share-based
payments recognised for the year ended 31 December 2020 was HK$0.6 million. No award shares were lapsed/forfeited in 2020;
• Gillian E Meller was granted 17,300 Restricted Shares on 8 April 2016, 16,200 Restricted Shares on 10 April 2017, 16,050 Restricted Shares
and 50,450 Performance Shares on 10 April 2018, 13,400 Restricted Shares on 8 April 2019 and 27,000 Restricted Shares on 8 April 2020, of
which a total of 15,216 Restricted Shares were vested in 2020 (2019: 16,518 Restricted Shares), and the respective fair value of the share-based
in 2020 (2019: nil);
• Linda K P So was granted 16,400 Restricted Shares on 8 April 2016, 15,300 Restricted Shares on 10 April 2017, 14,200 Restricted Shares
and 50,450 Performance Shares on 10 April 2018 and 14,800 Restricted Shares on 8 April 2019, of which nil was vested in 2020
(2019: 15,301 Restricted Shares), and the respective fair value of the share-based payments recognised for the year ended 31 December 2019
was HK$1.4 million. 79,817 award shares were lapsed/forfeited in 2020 (2019: nil);
• David C F Tang was granted 17,950 Restricted Shares on 8 April 2016, 17,250 Restricted Shares on 10 April 2017, 16,850 Restricted Shares
in 2020 (2019: nil);


(continued)

• Jeny M C Yeung was granted 18,850 Restricted Shares on 8 April 2016, 17,700 Restricted Shares on 10 April 2017, 17,350 Restricted Shares
in 2020 (2019: nil); and
• Lincoln K K Leong was granted 64,850 Restricted Shares on 8 April 2016, 63,900 Restricted Shares on 10 April 2017, 80,000 Contract-end
Restricted Shares on 16 March 2018 and 73,300 Restricted Shares and 239,950 Performance Shares on 10 April 2018, of which a total of
217,518 Restricted Shares were vested in 2019, and the respective fair value of the share-based payments recognised for the year ended
31 December 2019 was HK$6.5 million. No award shares were lapsed/forfeited in 2019.
None of the Performance Shares awarded to the Members of the Executive Directorate were vested in 2020 (2019: nil).
The details of Board Members’ and Members of the Executive Directorate’s interest in the Company’s shares are disclosed in the Report of the
Members of the Board and note 41.
(iii) For the year ended 31 December 2020, two (2019: three) Members of the Executive Directorate of the Company, whose emoluments are
shown above, were among the five individuals whose emoluments were the highest. The total remuneration of the five highest paid individuals for
the year is shown below:

Base pay, allowances and benefits in kind 29.6 30.1
Variable remuneration related to performance 2.0 6.2
Retirement scheme contributions 4.3 2.6
35.9 38.9
The emoluments of the top 5 highest paid individuals for the year are within the following bands:
2020 2019
HK$6,000,001 – HK$6,500,000 3 1
HK$6,500,001 – HK$7,000,000 – 2
HK$7,000,001 – HK$7,500,000 1 –
HK$8,000,001 – HK$8,500,000 – 1
HK$10,000,001 – HK$10,500,000 1 –
HK$10,500,001 – HK$11,000,000 – 1
5 5
(iv) The aggregate emoluments and share-based payments of Members of the Board and the Executive Directorate for the year was
HK$95.2 million (2019: HK$103.5 million).
(v) The Company has a service contract with each of the independent non-executive Directors (“INED”)/non-executive Directors (“NED”)
(excluding three additional directors appointed pursuant to Section 8 of the MTR Ordinance) specifying the terms of his/her continuous
appointments as an INED/a NED and a Member of the relevant Board Committees, for a period not exceeding three years. He/she is also subject to
retirement by rotation and re-election at the Company’s annual general meetings in accordance with the Articles of Association where applicable.
Dr Rex P K Auyeung was appointed by the Financial Secretary Incorporated (“FSI”) as non-executive Chairman of the Company for a term
commencing from 1 July 2019 until 31 December 2021 (both dates inclusive).
B Share Options
Options exercised and outstanding in respect of each Member of the Executive Directorate as at 31 December 2020 are set out in the Report of the
Members of the Board.
Under the 2007 Share Option Scheme (the “2007 Option Scheme”) as described in note 41(i), all Members of the Executive Directorate were granted
options to acquire shares between 2007 and 2014. No grant was made after the scheme’s expiry date on 6 June 2014.
Under the vesting terms of the options, options granted will be evenly vested in respect of their underlying shares over a period of three years from
the date of offer to grant such options. As all the share options granted to each Member of the Executive Directorate were vested prior to 2018, the
respective fair value of the share based payments recognised for the year ended 31 December 2020 was HK$nil (2019: HK$nil).
218 MTR Corporation

(continued)
C Award Shares
Award Shares outstanding in respect of each Member of the Executive Directorate as at 31 December 2020 are set out in the Report of the Members
of the Board.
Under the Executive Share Incentive Scheme as described in note 41(ii), all Members of the Executive Directorate may be granted an award of
Restricted Shares and/or Performance Shares (collectively known as “Award Shares”). Restricted Shares are awarded on the basis of individual
performance. Performance Shares are awarded which vest subject to the performance of the Company over a pre-determined performance
period, assessed by reference to such Board-approved performance metric and in respect of such performance period and any other performance
conditions, as determined by the Remuneration Committee from time to time.
An award of Restricted Shares will vest ratably over three years in equal tranches (unless otherwise determined by the Remuneration Committee). An
Overview
award of Performance Shares will vest upon certification by the Remuneration Committee that the relevant performance metric and performance
conditions have been achieved.
12 Profit on Hong Kong Property Development

Profit on Hong Kong property development comprises:

Share of surplus, income and interest in unsold properties from property development 6,481 4,376

Income from receipt of properties for investment purpose – 1,211
Agency fee and other income from West Rail property development (note 22C) 42 182
Overheads and miscellaneous studies (32) (62)
6,491 5,707
During the year ended 31 December 2020, profit attributable to joint operations of HK$6,481 million (2019: HK$5,587 million) was recognised.
13 Depreciation and Amortisation

Depreciation and amortisation comprise:
Depreciation charge relating to:
– Owned property, plant and equipment 3,788 3,865
– Right-of-use assets 357 332
4,145 4,197
Amortisation charge:
– Amortisation charge relating to service concession assets and other intangible assets 1,601 1,439
– Utilisation of government subsidy for SZL4 operation (381) (399)
1,220 1,040
5,365 5,237

14 Interest and Finance Charges

Interest expenses in respect of:
– Bank loans, overdrafts and capital market instruments 1,001 1,053
– Obligations under service concession 696 700
– Lease liabilities 56 58
– Others 25 23
Finance charges 52 42
Exchange loss/(gain) 234 (53)
2,064 1,823
Utilisation of government subsidy for SZL4 operation (58) (70)
Derivative financial instruments:
– Fair value hedges 2 1
– Cash flow hedges:
– transferred from hedging reserve to interest expenses (21) (32)
– transferred from hedging reserve to offset exchange (loss)/gain (240) 69
– Hedge of net investments:
– ineffective portion – (1)
– Derivatives not adopted hedge accounting 1 –
(258) 37
Interest expenses capitalised (360) (449)
1,388 1,341
Interest income in respect of:
– Deposits with banks (348) (466)
– Others (36) (16)
(384) (482)
1,004 859
During the year ended 31 December 2020, interest expenses capitalised were calculated on a monthly basis at the pre-determined cost of
borrowings and/or the relevant group companies’ borrowing cost which varied from 2.0% to 2.9% per annum (2019: 2.5% to 2.9% per annum).
During the year ended 31 December 2020, interest and finance charges net of interest expenses capitalised in relation to the SZL4 were
HK$58 million (2019: HK$70 million), which was fully offset by the subsidy received from the Shenzhen Municipal Government.
During the year ended 31 December 2020, the loss resulting from fair value changes of the underlying financial assets and liabilities being hedged
under fair value hedge was HK$140 million (2019: HK$45 million) while the gain resulting from fair value changes of hedging instruments comprising
interest rate and cross currency swaps was HK$138 million (2019: HK$44 million), thus resulting in a net loss of HK$2 million (2019: HK$1 million).
220 MTR Corporation

15 Income Tax in the Consolidated Profit and Loss Account
A Income tax in the consolidated profit and loss account represents:

Current tax
– Hong Kong Profits Tax 958 1,191
– Tax outside Hong Kong 328 264
1,286 1,455
Less: Utilisation of government subsidy for SZL4 operation (28) (71)
1,258 1,384
Deferred tax
Overview
– Origination and reversal of temporary differences on:
– tax losses (20) (1)
– depreciation allowances in excess of related depreciation 356 620
– revaluation of properties (1) (5)
– provisions and others (292) (76)
43 538
1,301 1,922

Except for the Company which is a qualifying corporation under the two-tiered Profits Tax rate regime in Hong Kong, the provision for Hong Kong
Profits Tax for the year ended 31 December 2020 is calculated at 16.5% (2019: 16.5%) on the estimated assessable profits for the year after deducting
accumulated tax losses brought forward, if any. Under the two-tiered Profits Tax rate regime, the Company’s first HK$2 million of assessable profits
are taxed at 8.25% and the remaining assessable profits are taxed at 16.5%. The provision for Hong Kong Profits Tax for the Company was calculated
on the same basis in 2020 and 2019.
Current taxes for subsidiaries outside Hong Kong are charged at the appropriate current rates of taxation ruling in the relevant tax jurisdictions.
Provision for deferred tax on temporary differences arising in Hong Kong is calculated at the Hong Kong Profits Tax rate at 16.5% (2019: 16.5%), while
that arising outside Hong Kong is calculated at the appropriate current rates of taxation ruling in the relevant tax jurisdictions.
The Company purchased tax reserve certificates in connection with the tax deductibility of certain payments relating to the Rail Merger. Please refer
to note 29 to the consolidated accounts for details.
B Reconciliation between tax expense and accounting profit or loss at applicable tax rates:
2020 2019
HK$ million % HK$ million %

(Loss)/profit before taxation (3,520) 14,014
Notional tax on (loss)/profit before taxation, calculated at the rates applicable to
profits in the tax jurisdictions concerned (728) (20.7) 2,330 16.6
Tax effect of non-deductible expenses 2,232 63.4 1,241 8.8 Financials and Other Information
Tax effect of non-taxable revenue (207) (5.9) (1,562) (11.1)

Tax effect of unused tax losses not recognised 32 0.9 (16) (0.1)
Utilisation of government subsidy for SZL4 operation (28) (0.8) (71) (0.5)
Actual tax expenses 1,301 36.9 1,922 13.7

16 Dividends
During the year, ordinary dividends paid and proposed to shareholders of the Company comprise:

Ordinary dividends attributable to the year
– Interim ordinary dividend declared of HK$0.25 (2019: HK$0.25) per share 1,545 1,539
– Final ordinary dividend proposed after the end of the reporting period of HK$0.98
(2019: HK$0.98) per share 6,057 6,035
7,602 7,574
Ordinary dividends attributable to the previous year
– Final ordinary dividend of HK$0.98 (2019: HK$0.95 per share attributable to year 2018)
per share approved and payable/paid during the year 6,036 5,835
The final ordinary dividend proposed after the end of the reporting period has not been recognised as a liability at the end of the reporting period.
For 2020 final ordinary dividend, the Board proposed that a scrip dividend option will be offered to all shareholders of the Company whose names
appeared on the register of members of the Company as at the close of business on 4 June 2021 (except for those with registered addresses in New
Zealand or the United States of America or any of its territories or possessions).
Details of ordinary dividends paid to the Financial Secretary Incorporated are disclosed in note 44O.
17 (Loss)/Earnings Per Share

A Basic (Loss)/Earnings Per Share
The calculation of basic (loss)/earnings per share is based on the loss for the year attributable to shareholders of HK$4,809 million (2019: profit of
HK$11,932 million) and the weighted average number of ordinary shares in issue less shares held for Executive Share Incentive Scheme, which is
calculated as follows:
2020 2019
Issued ordinary shares at 1 January 6,157,948,911 6,139,485,589
Effect of scrip dividend issued 8,968,601 6,682,480
Effect of share options exercised 1,399,931 2,130,711
Less: Shares held for Executive Share Incentive Scheme (5,787,780) (5,752,047)
Weighted average number of ordinary shares less shares held for Executive Share Incentive Scheme
at 31 December 6,162,529,663 6,142,546,733
B Diluted (Loss)/Earnings Per Share

The calculation of diluted (loss)/earnings per share is based on the loss for the year attributable to shareholders of HK$4,809 million (2019: profit
of HK$11,932 million) and the weighted average number of ordinary shares in issue less shares held for Executive Share Incentive Scheme after
adjusting for the dilutive effect of the Company’s share option scheme and Executive Share Incentive Scheme, which is calculated as follows:
2020 2019
Weighted average number of ordinary shares less shares held for Executive Share Incentive Scheme
at 31 December 6,162,529,663 6,142,546,733
Effect of dilutive potential shares under the share option scheme – 2,218,657
Effect of shares awarded under Executive Share Incentive Scheme – 5,759,306
Weighted average number of shares (diluted) at 31 December 6,162,529,663 6,150,524,696
The effect of the Group’s share option scheme (1,055,658 shares) and Executive Share Incentive Scheme (5,836,013 shares) are anti-dilutive for the
year ended 31 December 2020 since they would result in a decrease in the loss per share.
C Both basic and diluted earnings per share would have been HK$0.71 (2019: HK$1.72), if the calculation is based on profit attributable to
shareholders of the Company arising from underlying businesses of HK$4,381 million (2019: HK$10,560 million).
222 MTR Corporation

18 Other Comprehensive Income
A Tax effects relating to each component of other comprehensive income of the Group are shown below:
2020 2019
Tax
Before-tax benefit/ Net-of-tax Before-tax Tax Net-of-tax
in HK$ million amount (expense) amount amount (expense) amount
Exchange differences on translation of:
– Financial statements of overseas subsidiaries,
associates and joint venture 1,282 – 1,282 (344) – (344)
– Non-controlling interests 13 – 13 (15) – (15)
1,295 – 1,295
Overview
(359) – (359)
(Loss)/surplus on revaluation of self-occupied land
and buildings (328) 54 (274) 145 (24) 121
Remeasurement of net asset/liability of defined
benefit schemes 893 (141) 752 869 (139) 730
Cash flow hedges: net movement in hedging
reserve (note 18B) (87) 14 (73) 292 (48) 244
Other comprehensive income 1,773 (73) 1,700 947 (211) 736

B The components of other comprehensive income of the Group relating to cash flow hedges are as follows:

Cash flow hedges:
Effective portion of changes in fair value of hedging instruments recognised during the year 174 255
Amounts (credited)/charged to profit or loss:
– Interest and finance charges (note 14) (261) 37
(87) 292
Tax effect resulting from:
– Effective portion of changes in fair value of hedging instruments recognised during the year (29) (42)
– Amounts charged/(credited) to profit or loss 43 (6)
(73) 244
19 Investment Properties and Other Property, Plant and Equipment

A Investment Properties
Movements and analysis of the Group’s investment properties, all of which being held in Hong Kong and Mainland of China and carried at fair value,
are as follows:
At 1 January 91,712 83,037
Additions 3,501 7,316
Change in fair value (9,190) 1,372
Exchange gain/(loss) 35 (13)
At 31 December 86,058 91,712
All investment properties of the Group were revalued at 31 December 2020 and 2019. Details of the fair value measurement are disclosed in
note 40. The net decrease in fair value of HK$9,190 million (2019: net increase of HK$1,372 million) arising from the revaluation has been debited
(2019: credited) to the consolidated profit and loss account. Investment properties in Hong Kong and Mainland of China are revalued semi-annually
by Colliers International (Hong Kong) Limited (2019: Jones Lang LaSalle Limited) and Cushman & Wakefield Limited respectively. Future market
condition changes may result in further gains or losses to be recognised through consolidated profit and loss account in subsequent periods.
Included in the Group’s investment properties as at 31 December 2020 was HK$605 million (2019: HK$670 million) relating to properties in Mainland
of China.

19 Investment Properties and Other Property, Plant and Equipment (continued)

B Other Property, Plant and Equipment
Self-
Leasehold occupied Plant and Assets under
in HK$ million land buildings Civil works equipment construction Total
2020
Cost or Valuation
At 1 January 2020 1,765 4,650 62,378 88,175 6,835 163,803
Additions – 30 3 348 3,401 3,782
Disposals/write-offs – (1) – (544) (3) (548)
Loss on revaluation – (480) – – – (480)
Transfer to additional concession property
(note 20) – – (4) 1 (8) (11)
Other assets commissioned – – 76 1,798 (1,874) –
Exchange differences – 23 – 195 4 222
At 31 December 2020 1,765 4,222 62,453 89,973 8,355 166,768
At Cost 1,765 475 62,453 89,973 8,355 163,021

At 31 December 2020 Valuation – 3,747 – – – 3,747
Aggregate depreciation
At 1 January 2020 374 74 9,388 51,335 – 61,171
Charge for the year 34 233 521 3,357 – 4,145
Written back on disposals – (1) – (491) – (492)
Written back on revaluation – (152) – – – (152)
Exchange differences – 4 – 93 – 97
At 31 December 2020 408 158 9,909 54,294 – 64,769
Net book value at 31 December 2020 1,357 4,064 52,544 35,679 8,355 101,999
2019
Cost or Valuation
At 1 January 2019 1,757 4,597 62,385 86,824 5,115 160,678
Additions – 60 – 292 3,173 3,525
Disposals/write-offs – – (2) (315) (6) (323)
Loss on revaluation – (7) – – – (7)
Transfer to stores and spares – – – (12) – (12)
Transfer to additional concession property
(note 20) – – – (4) (2) (6)
Other assets commissioned 8 – (5) 1,441 (1,444) –
Exchange differences – – – (51) (1) (52)
At 31 December 2019 1,765 4,650 62,378 88,175 6,835 163,803
At Cost 1,765 423 62,378 88,175 6,835 159,576

At 31 December 2019 Valuation – 4,227 – – – 4,227
Aggregate depreciation
At 1 January 2019 340 – 8,865 48,206 – 57,411
Charge for the year 34 226 523 3,414 – 4,197
Written back on disposals – – – (270) – (270)
Written back on revaluation – (152) – – – (152)
Exchange differences – – – (15) – (15)
At 31 December 2019 374 74 9,388 51,335 – 61,171
Net book value at 31 December 2019 1,391 4,576 52,990 36,840 6,835 102,632
224 MTR Corporation

C Right-of-use Assets
The analysis of the net book value of right-of-use assets by class of underlying asset is as follows:
in HK$ million Note 31 December 2020 31 December 2019

Ownership interests in leasehold land held for own use, with remaining lease term of: (i)
– less than 50 years 1,357 1,391
Ownership interests in self-occupied buildings held for own use, with remaining lease
term of: (i)
– less than 50 years 3,747 4,227
Other self-occupied buildings leased for own use, with remaining lease term of: (ii)
– less than 10 years 317 349
Overview
Plant and equipment, with remaining lease term of: (iii)
5,928 6,470
Ownership interests in leasehold investment property, with remaining lease term of:
– 50 years or more 14 15
– less than 50 years 85,801 91,412

85,815 91,427
Other leasehold investment property, with remaining lease term of:
86,058 91,712
91,986 98,182
The analysis of expense items in relation to leases recognised in profit or loss is as follows:

Depreciation charge of right-of-use assets by class of underlying asset:
　Ownership interests in leasehold land held for own use 34 34
　Ownership interests in self-occupied buildings held for own use 152 152
　Other self-occupied buildings leased for own use 81 74
　Plant and equipment 90 72
357 332
Interest on lease liabilities 56 58
Expense relating to short-term leases and other leases with remaining lease term ending on or
before 31 December 14 37
Expense relating to leases of low-value assets, excluding short-term leases of low-value assets 22 22
During the year, additions to right-of-use assets were HK$3,566 million (2019: HK$7,438 million). This amount primarily related to additions of Financials and Other Information
investment properties.
Details of total cash outflow for leases and the maturity analysis of lease liabilities are set out in notes 39C and 32D, respectively.
(i) Ownership Interests in Leasehold Land and Buildings Held for Own Use
The lease of the land on which civil works as well as plant and equipment are situated for Hong Kong transport operations was granted to the
Company under a running line lease which is coterminous with the Company’s franchise to operate the mass transit railway under the Operating
Agreement (notes 44A, 44B and 44C).
Under the terms of the lease, the Company undertakes to keep and maintain all the leased areas, including underground and overhead structures, at
its own cost. With respect to parts of the railway situated in structures where access is shared with other users, such as the Lantau Fixed Crossing, the
Company’s obligation for maintenance is limited to the railway only. All maintenance costs incurred under the terms of the lease have been dealt
with as expenses relating to Hong Kong transport operations in the consolidated profit and loss account.
All self-occupied buildings of the Group in Hong Kong are carried at fair value. The details of the fair value measurement are disclosed in note 40.
The revaluation loss of HK$328 million (2019: surplus of HK$145 million) and the related deferred tax credit of HK$54 million (2019: expenses of
HK$24 million) has been recognised in other comprehensive income and accumulated in the fixed assets revaluation reserve (note 38D). The
carrying amount of the self-occupied buildings at 31 December 2020 would have been HK$665 million (2019: HK$692 million) had the buildings
been stated at cost less accumulated depreciation.


C Right-of-use Assets (continued)
(ii) Other Self-occupied Buildings Leased for Own Use
The Group has obtained the right to use other properties as its offices through tenancy agreements. The leases typically run for an initial period
of 4 to 7 years.
(iii) Other Leases

The Group leases plant and equipment under leases expiring from 2 to 20 years. Some leases include an option to renew the lease when all terms
are renegotiated, while some include an option to purchase the leased equipment at the end of the lease term at a price deemed to be a bargain
purchase option. None of the leases includes variable lease payments.
D Properties Leased Out under Operating Leases

The Group leases out investment properties and station kiosks, including duty free shops, under operating leases. The leases typically run for an
initial period of one to ten years, with an option to renew the lease after that date, at which time all terms will be renegotiated. Lease payments
are adjusted periodically to reflect market rentals. Certain leases carry additional rental based on turnover, some of which are with reference
to thresholds. Lease incentives granted are amortised in the consolidated profit and loss account as an integral part of the net lease payment
receivable.
The gross carrying amount of investment properties of the Group held for use in operating leases were HK$86,058 million (2019: HK$84,624 million).
The costs of station kiosks of the Group held for use in operating leases were HK$818 million (2019: HK$775 million) and the related accumulated
depreciation charges were HK$519 million (2019: HK$493 million).
Total future minimum lease receipts under non-cancellable operating leases are receivable as follows:

Within 1 year 8,436 8,466
After 1 year but within 2 years 6,038 6,629
After 2 years but within 3 years 2,666 4,234
After 3 years but within 4 years 1,440 985
After 4 years but within 5 years 1,077 305
After 5 years 1,903 341
21,560 20,960
E In March 2003, the Group entered into a series of structured transactions with unrelated third parties to lease out and lease back certain of its
passenger cars (“Lease Transaction”) involving a total original cost of HK$2,562 million and a total net book value of HK$1,674 million as at 31 March
2003. Under the Lease Transaction, the Group has leased the assets to institutional investors in the United States (the “Investors”), who have prepaid
all the rentals in relation to the lease agreement. Simultaneously, the Group has leased the assets back from the Investors based on terms ranging
from 21 to 29 years with an obligation to pay rentals in accordance with a pre-determined payment schedule. The Group has an option to purchase
the Investors’ leasehold interest in the assets at the expiry of the lease term for fixed amounts. Part of the rental prepayments received from the
Investors has been invested in debt securities to meet the Group’s rental obligations and the amount payable for exercising the purchase option
under the Lease Transaction. The Group has an obligation to replace these debt securities with other debt securities in the event those securities
do not meet certain credit ratings requirements. In addition, the Group has provided standby letters of credit to the Investors to cover additional
amounts payable by the Group in the event the transactions are terminated prior to the expiry of the lease terms.
The Group retains legal title to the assets and there are no restrictions on the Group’s ability to utilise these assets in the operation of the railway
business.
As a result of the Lease Transaction, an amount of approximately HK$3,688 million was received in an investment account and was used to purchase
debt securities (“Defeasance Securities”) to be used to settle the long-term lease payments with an estimated net present value of approximately
HK$3,533 million in March 2003. This resulted in the Group having received in 2003 an amount of HK$141 million net of costs. As the Group is not
able to control the investment account in pursuit of its own objectives and its obligations to pay the lease payments are funded by the proceeds of
the above investments, those obligations and investments in the Defeasance Securities were not recognised in March 2003 as liabilities and assets of
the Group. The net amount of cash received was accounted for as deferred income by the Group and amortised to the consolidated profit and loss
account over the lease period until 2008, when credit ratings of some of these Defeasance Securities were downgraded and subsequently replaced
by standby letters of credit, the charge on which had fully offset the remaining balance of the deferred income.
226 MTR Corporation

20 Service Concession Assets
Movements and analysis of the Group’s service concession assets are as follows:
KCRC Rail Merger
Additional Additional
concession concession
Initial Additional property property
concession concession (High Speed (Tuen Ma Shenzhen TfL Rail/
in HK$ million property property Rail) Line) Metro Line 4 MTR Nordic Elizabeth Line Total
2020
Cost
At 1 January 2020 15,226 17,582 51 – 8,460 76 58 41,453
Net additions during the year – 2,741 129 10 57 – – 2,937
Overview
Disposals – (97) – – (91) – – (188)
Transfer from other property,
plant and equipment (note 19) – 3 – 8 – – – 11
Reclassification within service
concession assets – (9) – 9 – – – –
Exchange differences – – – – 511 10 2 523
At 31 December 2020 15,226 20,220 180 27 8,937 86 60 44,736
Accumulated amortisation

At 1 January 2020 3,680 3,509 – – 2,903 63 37 10,192
Charge for the year 305 894 4 1 384 2 6 1,596
Written-off on disposals – (82) – – (53) – – (135)
Exchange differences – – – – 198 9 1 208
At 31 December 2020 3,985 4,321 4 1 3,432 74 44 11,861
Net book value at 31 December 2020 11,241 15,899 176 26 5,505 12 16 32,875
2019
Cost
At 1 January 2019 15,226 15,397 1 – 8,587 84 56 39,351
Net additions during the year – 2,232 50 – 75 – – 2,357
Disposals – (53) – – (45) (4) – (102)
Transfer from other property,
plant and equipment (note 19) – 6 – – – – – 6
Exchange differences – – – – (157) (4) 2 (159)
At 31 December 2019 15,226 17,582 51 – 8,460 76 58 41,453
Accumulated amortisation
At 1 January 2019 3,375 2,825 – – 2,584 65 29 8,878
Charge for the year 305 719 – – 401 2 7 1,434
Written-off on disposals – (35) – – (27) (1) – (63)
Exchange differences – – – – (55) (3) 1 (57)

At 31 December 2019 3,680 3,509 – – 2,903 63 37 10,192
Net book value at 31 December 2019 11,546 14,073 51 – 5,557 13 21 31,261
SZL4 forms part of the Shenzhen Metro, which is operated by a wholly-owned subsidiary, MTR Corporation (Shenzhen) Limited (“MTRSZ”). There
has been no increase in fare since MTRSZ started operating the line in 2010. In July 2020, the Shenzhen Municipal Government has publicised a fare
adjustment framework for Shenzhen Metro network which will take effect on 1 January 2021. The framework sets out the mechanism of fare setting
and the procedures of fare adjustment. Based on progress of the fare adjustment made to date, no impairment loss is recognised at 31 December
2020. If a suitable fare adjustment mechanism is not put in place, the long-term financial viability of SZL4 is expected to be impacted.
Initial concession property relates to the payments recognised at inception of the Rail Merger with KCRC while additional concession property
relates to the expenditures for the upgrade of the initial concession property after inception of the Rail Merger. Additional concession property (High
Speed Rail) and additional concession property (Tuen Ma Line) relate to the expenditures for the upgrade of the concession property of High Speed
Rail and Tuen Ma Line respectively.

21 Railway Construction Projects under Entrustment by the HKSAR

Government
A Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (“High Speed
Rail” or “HSR”) Project
(a) HSR Preliminary Entrustment Agreement
On 24 November 2008, the HKSAR Government and the Company entered into an entrustment agreement for the design of and site investigation
and procurement activities in relation to the HSR (the “HSR Preliminary Entrustment Agreement”). Pursuant to the HSR Preliminary Entrustment
Agreement, the HKSAR Government is obligated to pay the Company the Company’s in-house design costs and certain on-costs, preliminary costs
and staff costs.
(b) HSR Entrustment Agreement

In 2009, the HKSAR Government decided that the Company should be asked to proceed with the construction, testing and commissioning of the
HSR on the understanding that the Company would subsequently be invited to undertake the operation of the HSR under the service concession
approach. On 26 January 2010, the HKSAR Government and the Company entered into another entrustment agreement for the construction,
and commissioning of the HSR (the “HSR Entrustment Agreement”). Pursuant to the HSR Entrustment Agreement, the Company is responsible
for carrying out or procuring the carrying out of the agreed activities for the planning, design, construction, testing and commissioning of the
HSR and the HKSAR Government, as owner of HSR, is responsible for bearing and financing the full amount of the total cost of such activities (the
“Entrustment Cost”) and for paying to the Company a fee in accordance with an agreed payment schedule (the “HSR Project Management Fee”)
(subsequent amendments to these arrangements are described below). As of 31 December 2020, the Company had received full payment of the
HSR Project Management Fee from the HKSAR Government.
The HKSAR Government has the right to claim against the Company if the Company breaches the HSR Entrustment Agreement (including, if
the Company breaches the warranties it gave in respect of its project management services) and, under the HSR Entrustment Agreement, to be
indemnified by the Company in relation to losses suffered by the HKSAR Government as a result of any negligence of the Company in performing its
obligations under the HSR Entrustment Agreement or any breach of the HSR Entrustment Agreement by the Company. Under the HSR Entrustment
Agreement, the Company’s total aggregate liability to the HKSAR Government arising out of or in connection with the HSR Preliminary Entrustment
Agreement and the HSR Entrustment Agreement (other than for death or personal injury) is subject to a cap equal to the HSR Project Management
Fee and any other fees that the Company receives under the HSR Entrustment Agreement and certain fees received by the Company under the HSR
Preliminary Entrustment Agreement (the “Liability Cap”). In accordance with general principles of law, such Liability Cap could not be relied upon
if the Company were found to be liable for the fraudulent or other dishonest conduct of its employees or agents, to the extent that the relevant loss
had been caused by such fraudulent or other dishonest conduct. Although the HKSAR Government has reserved the right to refer to arbitration the
question of the Company’s liability for the Current Cost Overrun (as defined hereunder) (if any) under the HSR Preliminary Entrustment Agreement
and the HSR Entrustment Agreement (as more particularly described in note 21A(c)(iv) below), up to the date of this annual report, no claim has
been received from the HKSAR Government.
In April 2014, the Company announced that the construction period for the HSR project needed to be extended, with the target opening of the line
for passenger service revised to the end of 2017.
On 30 June 2015, the Company reported to the HKSAR Government that the Company estimated:
• the HSR would be completed in the third quarter of 2018 (including programme contingency of six months) (the “HSR Revised
Programme”); and
• the total project cost of HK$85.3 billion (including contingency), based on the HSR Revised Programme.
As a result of adjustments being made to certain elements of the Company’s estimated project cost of 30 June 2015, the HKSAR Government and
the Company reached agreement that the estimated project cost be reduced to HK$84.42 billion (the “Revised Cost Estimate”). Further particulars
relating to the Revised Cost Estimate are set out in notes 21A(c) and (e) below.
(c) HSR Agreement

On 30 November 2015, the HKSAR Government and the Company entered into an agreement (the “HSR Agreement”) relating to the further
funding and completion of the HSR. The HSR Agreement contains an integrated package of terms (subject to conditions as set out in note 21A(c)(vi)
below) and provides that:
(i) The HKSAR Government will bear and finance the project cost up to HK$84.42 billion (which includes the original budgeted cost of
HK$65 billion plus the agreed increase in the estimated project cost of HK$19.42 billion (the portion of the entrustment cost (up to HK$84.42 billion)
that exceeds HK$65 billion being the “Current Cost Overrun”));
(ii) The Company will, if the project exceeds HK$84.42 billion, bear and finance the portion of the project cost which exceeds that sum (if any)
(the “Further Cost Overrun”) except for certain agreed excluded costs (namely, additional costs arising from changes in law, force majeure events or
any suspension of construction contracts specified in the HSR Agreement);
(iii) The Company will pay a special dividend in cash of HK$4.40 in aggregate per share in two equal tranches (of HK$2.20 per share in cash in
each tranche) (“Special Dividend”). The first tranche was paid on 13 July 2016 and the second tranche was paid on 12 July 2017;
228 MTR Corporation

Government (continued)
Rail” or “HSR”) Project (continued)
(iv) The HKSAR Government reserves the right to refer to arbitration the question of the Company’s liability for the Current Cost Overrun (if any)
under the HSR Preliminary Entrustment Agreement and HSR Entrustment Agreement (“Entrustment Agreements”) (including any question the
HKSAR Government may have regarding the validity of the Liability Cap). The Entrustment Agreements contain dispute resolution mechanisms
which include the right to refer a dispute to arbitration. Under the HSR Entrustment Agreement, the Liability Cap is equal to the HSR Project
Management Fee and any other fees that the Company receives under HSR Entrustment Agreement and certain fees received by the Company
under the Preliminary Entrustment Agreement. Accordingly, the Liability Cap increases from up to HK$4.94 billion to up to HK$6.69 billion as the
HSR Project Management Fee is increased in accordance with the HSR Agreement (as it will be equal to the increased HSR Project Management Fee
under the HSR Entrustment Agreement of HK$6.34 billion plus the additional fees referred to above). If the arbitrator does not determine that the
Overview
Liability Cap is invalid and determines that, but for the Liability Cap, the Company’s liability under the Entrustment Agreements for the Current Cost
Overrun would exceed the Liability Cap, the Company shall:
• bear such amount as is awarded to the HKSAR Government up to the Liability Cap;
• seek the approval of its independent shareholders, at another General Meeting (at which the FSI, the HKSAR Government and their Close
Associates and Associates and the Exchange Fund will be required to abstain from voting), for the Company to bear the excess liability; and
• if the approval of the independent shareholders (referred to immediately above) is obtained, pay the excess liability to the HKSAR
Government. If such approval is not obtained, the Company will not make such payment to the HKSAR Government;

(v) Certain amendments are made to the HSR Entrustment Agreement to reflect the arrangements contained in the HSR Agreement, including
an increase in HSR Project Management Fee payable to the Company under HSR Entrustment Agreement to an aggregate of HK$6.34 billion (which
reflects the estimate of the Company’s expected internal costs in performing its obligations under the HSR Entrustment Agreement in relation to
HSR project) and to reflect the HSR Revised Programme;
(vi) The arrangements under the HSR Agreement (including the payment of the Special Dividend) were conditional on:
• independent shareholder approval (which was sought at the General Meeting held on 1 February 2016); and
• Legislative Council approval in respect of the HKSAR Government’s additional funding obligations.
The HSR Agreement (and the Special Dividend) was approved by the Company’s independent shareholders at the General Meeting held on
1 February 2016 and became unconditional upon approval by the Legislative Council on 11 March 2016 of the HKSAR Government’s additional
funding obligations.
(d) Operations of HSR
On 23 August 2018, the Company and KCRC entered into the supplemental service concession agreement for the HSR (“SSCA-HSR”) to supplement
the Service Concession Agreement dated 9 August 2007 in order for KCRC to grant a concession to the Company in respect of the HSR and to
prescribe the operational and financial requirements that will apply to the HSR. The commercial operation of HSR began on 23 September 2018.
(e) Based on the Company’s latest review of the Revised Cost Estimate for the agreed scope of the project and having taken account of the
opinion of independent experts including one on the review of the Revised Cost Estimate, the Company believes that, although the latest final
project cost is likely to come close to the Revised Cost Estimate, the Revised Cost Estimate is still achievable and there is no current need to revise
further such estimate. However, the final project cost can only be ascertained upon finalisation of all contracts, some of which will involve the
resolution of commercial issues and may take several years to reach settlement based on past experience.
Having considered the number of contracts yet to be finalised and the contingency allowance currently available, there can be no absolute
assurance that the final project cost will not exceed the Revised Cost Estimate, particularly if unforeseen difficulties arise in the resolution of
commercial issues during the process of negotiating the final accounts. In such case, under the terms of the HSR Agreement, the Company will be
required to bear and finance the portion of the project cost that exceeds the Revised Cost Estimate (if any) except for certain agreed excluded costs
(as more particularly described in note 21A(c)(ii) above).
(f) The Company has not made any provision in its consolidated accounts in respect of:
(i) any possible liability of the Company for any Further Cost Overrun (if any), given the Company does not currently believe based on
information available to date there is any need to revise further the Revised Cost Estimate. However, the final project cost can only be ascertained
upon finalisation of all contracts, some of which will involve the resolution of commercial issues and may take several years to reach settlement;
(ii) any possible liability of the Company that may be determined in accordance with any arbitration that may take place (as more particularly
described in note 21A(c)(iv) above), given that (a) the Company has not received any notification from the HKSAR Government of any claim by the
HKSAR Government against the Company or of any referral by the HKSAR Government to arbitration (which, as a result of the HSR Agreement,
cannot take place until after commencement of commercial operations on the HSR) as of 31 December 2020 and up to the date of this annual
report; (b) the Company has the benefit of the Liability Cap; and (c) as a result of the HSR Agreement, the Company will not make any payment to the
HKSAR Government in excess of the Liability Cap pursuant to a determination of the arbitrator without the approval of its independent shareholders;
and
(iii) where applicable, because the Company is not able to measure with sufficient reliability the amount of the Company’s obligation or liability
(if any).


Rail” or “HSR”) Project (continued)
(g) During the year ended 31 December 2020, HSR Project Management Fee of HK$nil (2019: HK$78 million) was recognised in the consolidated
profit and loss account. As at 31 December 2020, the total HSR Project Management Fee and the additional fees referred to above recognised to
date in the consolidated profit and loss account amounted to HK$6,548 million (as at 31 December 2019: HK$6,548 million).
In relation to the sufficiency of the HSR Project Management Fee, the Company estimated that the total costs to complete performance of its
obligations in relation to the HSR project are likely to exceed the HSR Project Management Fee. Accordingly, an appropriate amount of provision
was recognised in the consolidated profit and loss account in the prior years.
B Shatin to Central Link (“SCL”) Project

(a) SCL Agreements
The Company and the HKSAR Government entered into the SCL Preliminary Entrustment Agreement (“SCL EA1”) in 2008, the SCL Advance Works
Entrustment Agreement (“SCL EA2”) in 2011, and the SCL Entrustment Agreement (“SCL EA3”) in 2012 (together, the “SCL Agreements”), in relation
to the SCL.
Pursuant to the SCL EA1, the Company is responsible for carrying out or procuring the carrying out of the design, site investigation and procurement
activities while the HKSAR Government is responsible for funding directly the total cost of such activities.
Pursuant to the SCL EA2, the Company is responsible for carrying out or procuring the carrying out of the agreed works while the HKSAR
Government is responsible for bearing and paying to the Company all the work costs (“EA2 Advance Works Costs”). The EA2 Advance Works Costs
and the Interface Works Costs (as described below) are payable by the HKSAR Government to the Company. During the year ended 31 December
2020, HK$122 million (2019: HK$343 million) of costs were incurred by the Company, which are payable by the HKSAR Government. As at
31 December 2020, the amount of such costs which remained outstanding from the HKSAR Government was HK$1,035 million (as at 31 December
2019: HK$1,219 million).
The SCL EA3 was entered into in 2012 for the construction and commissioning of the SCL. The HKSAR Government is responsible for bearing all
the work costs specified in the SCL EA3 including costs to contractors and costs to the Company (“Interface Works Costs”) (which the Company
would pay upfront and recover from the HKSAR Government) except for certain costs of modification, upgrade or expansions of certain assets
(including rolling stock, signalling, radio and main control systems) for which the Company is responsible under the existing service concession
agreement with KCRC. The Company will contribute an amount in respect of the costs relating to such modifications, upgrades or expansions. This
will predominantly be covered by the reduction in future maintenance capital expenditure which the Company would have otherwise incurred. The
total sum entrusted to the Company by the HKSAR Government for the main construction works under the SCL EA3, including project management
fee, was HK$70,827 million (“Original Entrusted Amount”).
The Company is responsible for carrying out or procuring the carrying out of the works specified in the SCL Agreements for a project management
fee of HK$7,893 million (the “Original PMC”). As at 31 December 2020 and up to the date of this annual report, the Company has received payments
of the Original PMC from the HKSAR Government in accordance with the original agreed payment schedule. During the year ended 31 December
2020, Original PMC of HK$565 million (2019: HK$857 million) was recognised in the consolidated profit and loss account. As at 31 December 2020,
the total Original PMC recognised to date in the consolidated profit and loss account amounted to HK$7,893 million (as at 31 December 2019:
HK$7,328 million).
(b) SCL EA3 Cost Overrun

(i) Cost to Complete
The Company has previously announced that, due to the continuing challenges posed by external factors, the Original Entrusted Amount under
SCL EA3 would not be sufficient to cover the total estimated cost to complete (“CTC”) and would need to be revised upwards significantly. The
Company carried out a detailed review of the estimated CTC for the main construction works in 2017 and submitted a revised estimated total CTC of
HK$87,328 million, including an increase in the project management fee payable to the Company (“2017 CTC Estimate”) to the HKSAR Government
on 5 December 2017, taking into account a number of factors, including issues such as archaeological relics, the HKSAR Government’s requests for
additional scope and late or incomplete handover of construction sites.
The Company then carried out and completed a further review and revalidation of the CTC and, on 10 February 2020, notified the HKSAR Government,
in accordance with the terms of the SCL EA3, of the latest estimate of the CTC, being HK$82,999 million (“2020 CTC Estimate”), including additional
project management fee payable to the Company of HK$1,371 million (“Additional PMC”), being the additional cost to the Company of carrying out
its remaining project management responsibilities under the SCL EA3, as detailed in note 21B(b)(ii) below but excluding the Hung Hom Incidents
Related Costs in respect of which the Company has already recognised a provision of HK$2 billion in its consolidated profit and loss account for the
year ended 31 December 2019 (as detailed in note 21B(c)(iii) below). The 2020 CTC Estimate represents an increase of HK$12,172 million from the
Original Entrusted Amount of HK$70,827 million, which is less than the increase in the 2017 CTC Estimate of HK$16,501 million.
In accordance with the terms of SCL EA3, the HKSAR Government issued its paper on 18 March 2020 to seek the approval of Legislative Council for
additional funding required for the SCL Project amounting to HK$10,801 million (“Additional Funding”) so that the SCL can be completed. On
12 June 2020, the Legislative Council approved the Additional Funding for the SCL Project. For the avoidance of doubt, the Additional Funding
sought by the HKSAR Government and approved by the Legislative Council excluded the Hung Hom Incidents Related Costs (as detailed in
note 21B(c)(iii) below) and any Additional PMC for the Company as further detailed in note 21B(b)(ii) below.
230 MTR Corporation

B Shatin to Central Link (“SCL”) Project (continued)
(ii) Additional PMC
As detailed in note 21B(b)(i) above and as previously disclosed by the Company, the programme for the delivery of the SCL Project has been
significantly impacted by certain key external events. Not only do these matters increase the cost of works, they also increase the cost to the
Company of carrying out its project management responsibilities under the relevant SCL entrustment agreement, which is estimated to be around
HK$1,371 million.
By December 2020, the aggregate amount of project management fee paid by the HKSAR Government to the Company in accordance with the
payment schedule contained in the SCL EA3 was substantially close to the Original PMC (excluding, for the avoidance of doubt, the Additional PMC
of HK$1,371 million previously sought by the Company) and has been expended in full by the Company. The Additional Funding approved by the
Overview
Legislative Council did not include any Additional PMC for the Company which the Company had previously sought from the HKSAR Government.
Therefore, the cost to the Company of continuing to comply with its project management obligations under the SCL EA3 is currently being met by
the Company on an interim and without prejudice basis (to allow the SCL Project to progress in accordance with the latest programme) and the
Company reserves its position as to the ultimate liability for such costs and as to its right to pursue the courses of action and remedies available
under the SCL EA3.
However, given the Company’s view that there has been a significant delay to the project programme and associated increase in project management
costs to the Company, the Company has recently written to the HKSAR Government to restate the Company’s belief that the Company is entitled
(in accordance with the terms of the SCL EA3 and following the Company’s receipt of independent expert advice) to an increase in the project
management fee, to be agreed by way of good faith negotiations or otherwise determined in accordance with the provisions of the SCL EA3.

However, the HKSAR Government has responded to the Company by reiterating that the HKSAR Government considers there have not been any
material modifications to any of the scope of works, entrustment activities and/or entrustment programme contained in the SCL EA3 and, as such,
the HKSAR Government maintains its position of disagreement to any increase in the project management fee.
Despite the fact that this matter needs to be resolved, the Company has continued, and intends to continue, to comply with its project management
obligations under the SCL EA3 and has met, and intends to continue to meet, the costs thereof, on an interim and without prejudice basis, to allow
the SCL Project to progress in accordance with the latest programme in order to achieve a full opening of the SCL as soon as reasonably practicable,
whilst reserving its position as to the ultimate liability for such costs and as to its rights to pursue the courses of action and remedies available under
the SCL EA3.
(iii) Provision for the SCL PMC
After taking into account the matters described in note 21B(b)(ii) above, and in particular, the Company meeting, on an interim and without
prejudice basis (whilst reserving its position as to the ultimate liability for such costs and as to its rights to pursue the courses of action and
remedies available under the SCL EA3), the cost to the Company of continuing to comply with its project management obligations, the Group has
recognised a provision of HK$1,371 million, for the estimated additional cost to the Company of continuing to comply with its project management
responsibilities, in its consolidated profit and loss account for the year ended 31 December 2020. During the year ended 31 December 2020, the
provision utilised amounted to HK$45 million and no provision was written back. The provision (net of amount utilised) is included in “Creditors,
other payables and provisions” in the consolidated statement of financial position.
This amount does not take into account any potential payment to the Company of any Additional PMC (whether in the circumstances that no overall
settlement is reached and / or as a result of an award, settlement or otherwise). Accordingly, if any such potential payment becomes virtually certain,
the amount of any such payment will be recognised and credited to the Company’s consolidated profit and loss account in that financial period.
(c) Hung Hom Incidents Financials and Other Information

As stated in the Company’s announcement dated 18 July 2019, towards the end of the first half of 2018, there were allegations concerning
workmanship in relation to the Hung Hom Station extension (“First Hung Hom Incident”). The Company took immediate steps to investigate
the issues, report the Company’s findings to the HKSAR Government and reserve the Company’s position against relevant contractors. To address
the First Hung Hom Incident, the Company submitted to the HKSAR Government a holistic proposal for the verification and assurance of the
as-constructed conditions and workmanship quality of the Hung Hom Station extension.
In late 2018 and early 2019, the Company advised the HKSAR Government of an insufficiency of construction records and certain construction issues
at the Hung Hom North Approach Tunnel (“NAT”), the South Approach Tunnel (“SAT”) and the Hung Hom Stabling Sidings (“HHS”), forming an
addition to the First Hung Hom Incident (“Second Hung Hom Incident”). To address the Second Hung Hom Incident, the Company submitted to
the HKSAR Government a verification proposal for verification of the as-constructed condition and workmanship quality of these areas.
(i) Commission of Inquiry (“COI”)
On 10 July 2018, the COI was set up by the HKSAR Chief Executive in Council pursuant to the Commissions of Inquiry Ordinance (Chapter 86 of the
Laws of Hong Kong). The Company has cooperated fully with the COI. The COI process included hearing of evidence from factual witnesses and
reviewing evidence from experts on project management and structural engineering issues. On 29 January 2019, the HKSAR Government made
its closing submission to the first phase of the COI in which it stated its view that the Company ought to have provided the required skills and care
reasonably expected of a professional and competent project manager but that the Company had failed to do so.


On 25 February 2019, the COI submitted an interim report to the Chief Executive on its findings and recommendations on matters covered by the
original terms of reference. On 26 March 2019, the HKSAR Government published the redacted interim report in which the COI, while recognising it
to be an interim report, found that although the Hung Hom Station extension diaphragm wall and platform slab construction works are safe, they
were not executed in accordance with the relevant contract in material aspects. The COI also made a number of comments regarding the Company’s
performance and systems as well as a number of recommendations for the future.
On 18 July 2019, the Company completed and submitted to the HKSAR Government two separate final reports, one in respect of the First Hung Hom
Incident and one in respect of the Second Hung Hom Incident, containing, inter alia, proposals for suitable measures required at certain locations to
achieve code compliance. These suitable measures have been implemented to enable the SCL Project to be completed for public use in accordance
with the latest project programme.
On 22 January 2020, the HKSAR Government reiterated, in its closing submissions on factual evidence for the extended inquiry submitted to the COI,
that there was failure on the part of both the Company and the contractor Leighton Contractors Asia Limited to perform the obligations which the
two parties undertook for the SCL project and that the Company, which was entrusted by the HKSAR Government as the project manager of the SCL
project, ought to have provided the requisite degree of skill and care reasonably expected of a professional and competent project manager.
On 27 March 2020, the COI submitted its final report to the Chief Executive on its findings and recommendations on matters covered by the original
and extended terms of reference. On 12 May 2020, the HKSAR Government published the final report in which the COI determined that it is fully
satisfied that, with the suitable measures in place, the station box structure will be safe and also fit for purpose. The COI also stated that it is satisfied
that, with suitable measures completed, the NAT, SAT and HHS structures will be safe and fit for purpose. The suitable measures for the station box
structure were completed in June 2020 and the suitable measures for the NAT, SAT and HHS structures were completed in May 2020. The COI also
made a number of comments on the construction process (including regarding failures in respect thereof such as unacceptable incidents of poor
workmanship compounded by lax supervision and that in a number of respects also, management of the construction endeavour fell below the
standards of reasonable competence) and made recommendations to the Company for the future.
(ii) Expert Adviser Team (“EAT”)
On 1 February 2021, the EAT on the SCL project, which was appointed by the HKSAR Government in August 2018 to conduct an overall review
of the Company’s project management system and recommend additional management and monitoring measures to be undertaken by the
Company and the HKSAR Government in taking forward the SCL project, has submitted its final report to the HKSAR Government. The report noted
that it is safe in practical terms to use the related built structures at Hung Hom Station for their intended purposes after the implementation of the
suitable measures. The EAT has also put forward in the report recommendations to the Company and the HKSAR Government for the continuous
improvement of railway project management.
(iii) Provision for the Hung Hom Incidents Related Costs
In July 2019, the HKSAR Government accepted the Company’s recommendation that the Tuen Ma Line (Tai Wai to Hung Hom Section of the SCL)
should open in phases, with the first phase involving the opening of commercial service on the Tuen Ma Line from Tai Wai Station to Kai Tak Station
(“Phased Opening”) which occurred on 14 February 2020.
In order to progress the SCL Project and to facilitate the Phased Opening in the first quarter of 2020, the Company announced in July 2019 that it
would fund, on an interim and without prejudice basis, certain costs arising from the Hung Hom Incidents and certain costs associated with Phased
Opening (being costs for alteration works, trial operations and other costs associated with the preparation activities for the Phased Opening) (“Hung
Hom Incidents Related Costs”), whilst reserving the Company’s position as to the ultimate liability for such costs.
The Company and the HKSAR Government will continue discussions with a view to reaching an overall settlement in relation to the Hung Hom
Incidents and their respective funding obligations relating to the CTC and the Hung Hom Incidents Related Costs. If no overall settlement is reached
between the Company and the HKSAR Government within a reasonable period, the provisions of the SCL EA3 shall continue to apply (as they
currently do) including in relation to such costs, and the responsibility for the funding of such costs shall be determined in accordance with the
SCL EA3.
After taking into account the matters described in note 21B(c) above, and in particular, the Company’s decision to fund, on an interim and without
prejudice basis, the Hung Hom Incidents Related Costs, the Company recognised a provision of HK$2,000 million in its consolidated profit and loss
account for the year ended 31 December 2019. During the year ended 31 December 2020, the provision utilised amounted to HK$566 million (2019:
HK$284 million) and no provision was written back (2019: HK$nil). The provision (net of amount utilised) is included in “Creditors, other payables and
provisions” in the consolidated statement of financial position.
This amount does not take into account any potential recovery from any other party (whether in the circumstances that no overall settlement is
reached and/or as a result of an award, settlement or otherwise). Accordingly, if any such potential recovery becomes virtually certain, the amount of
any such recovery will be recognised and credited to the Company’s consolidated profit and loss account in that financial period.
232 MTR Corporation

(d) Mixed Fleet Operation Incident
On 11 September 2020, the Company announced the delay in service commencement of the new East Rail Line (“EAL”) signalling system and
introduction of new nine-car trains which was originally scheduled for 12 September 2020 (collectively “Mixed Fleet Operation Incident”),
following a review on the new signalling system conducted by the Company prior to service commencement.
On 13 September 2020, the Company announced the setting up of the Investigation Panel to look into the Mixed Fleet Operation Incident and to
submit an investigation report to the HKSAR Government. On 21 January 2021, the Company submitted to the HKSAR Government for its review
the report from the Investigation Panel. The Company acknowledged and accepted the findings of the Investigation Panel which include a finding
that the issue concerned in the Mixed Fleet Operation Incident is not an issue of safety but of service reliability. The Company also accepted and will
Overview
implement the recommendations made in the report. Following the satisfactory completion of further additional testing and approval by relevant
HKSAR Government departments, the new signalling system and the new nine-car trains on the EAL were commissioned on 6 February 2021 in
preparation for extending the EAL across the harbour to Admiralty Station.
(e) Potential Claims from and Indemnification to the HKSAR Government

The HKSAR Government has the right to claim against the Company if the Company breaches the SCL Agreements (including, if the Company
breaches the warranties it gave in respect of its project management services) and, under each SCL Agreement, to be indemnified by the Company
in relation to losses incurred by the HKSAR Government as a result of the negligence of the Company in performing its obligations under the
relevant SCL Agreement or breach thereof by the Company. Under the SCL EA3, the Company’s total aggregate liability to the HKSAR Government
arising out of or in connection with the SCL Agreements (other than for death or personal injury) is subject to a cap equal to the fees that the

Company receives under the SCL Agreements. In accordance with general principles of law, such cap could not be relied upon if the Company were
found to be liable for the fraudulent or other dishonest conduct of its employees or agents, to the extent that the relevant loss had been caused by
such fraudulent or other dishonest conduct. Although the HKSAR Government has stated that it reserves all rights to pursue further actions against
the Company and related contractors and has made the statements in its closing submission to the COI (as stated in note 21B(c)(i) above), up to the
date of this annual report, no claim has been received from the HKSAR Government in relation to any SCL Agreement. It is uncertain as to whether
such claim will be made against the Company in the future and, if made, the nature and amount of such claim.
The eventual outcome of the discussions between the Company and the HKSAR Government on various matters including the timing of any overall
settlement in relation to the Hung Hom Incidents and their respective funding obligations relating to the Hung Hom Incidents Related Costs and
the level of recovery from relevant parties remain highly uncertain at the current stage. As a result, no additional provision other than as stated
above has been made as the Company is currently not able to measure with sufficient reliability the ultimate amount of the Company’s obligation
or liability arising from the SCL Project as a whole in light of the significant uncertainties involved. While no provision in respect of the SCL Project
related matters was recognised at 31 December 2020 other than as stated above, the Company will reassess on an ongoing basis the need to
recognise any further provision in the future in light of any further development.
(f) Phased Opening of SCL
On 11 February 2020, the Company entered into relevant agreements with the HKSAR Government and KCRC to supplement and amend the current
agreements to enable the Company to operate Tuen Ma Line Phase 1 in substantially the same manner as the existing railway network for a period
of two years from 14 February 2020 including with KCRC the supplemental service concession agreement (“SSCA-SCL”). Prior to the full opening of
the Tuen Ma Line, the parties are obliged to commence exclusive negotiations in good faith with a view to agreeing the terms of a supplemental
service concession agreement for the entire Tuen Ma Line (which is intended to replace the SSCA-SCL that was executed on 11 February 2020).

22 Property Development in Progress

Pursuant to the project agreements in respect of the construction of railway extensions and the Property Package Agreements in respect of the Rail
Merger, the HKSAR Government has granted the Company with development rights on the land over the stations along railway lines.
As at 31 December 2020, the outstanding Hong Kong Property Development Projects of the Company include the Tseung Kwan O Extension
Property Projects at the depot sites in Tseung Kwan O Area 86 (LOHAS Park) and at the ventilation building in Yau Tong, South Island Line Property
Project at sites in Wong Chuk Hang, Kwun Tong Line Extension Property Project at sites in Ho Man Tin and the East Rail Line/Light Rail Property
Projects at sites along the related railway lines.
A Property Development in Progress

Offset against
payments
Balance at received from Transfer out to Balance at
in HK$ million 1 January Expenditure developers profit or loss 31 December
2020
Hong Kong Property Development Projects 12,022 687 (276) (491) 11,942
2019
Hong Kong Property Development Projects 14,840 3,819 (662) (5,975) 12,022
The lease terms of leasehold land in Hong Kong included under property development in progress are between 10 and 50 years.
B Stakeholding Funds
Being the stakeholder under certain Airport Railway, Tseung Kwan O Extension and East Rail Line Property Projects, the Company receives and
manages deposit monies and sales proceeds in respect of sales of properties under those developments. These monies are placed in separate
designated bank accounts and, together with any interest earned, are to be released to the developers for the reimbursement of costs of the
respective developments in accordance with the terms and conditions of the HKSAR Government Consent Schemes and development agreements.
Any balance remaining is to be released for distribution only after all obligations relating to the developments have been met. Accordingly, the
balances of the stakeholding funds and the corresponding bank balances have not been included in the consolidated statement of financial
position. As at 31 December 2020, the balance of the stakeholding funds was HK$16,034 million (2019: HK$21,283 million).
C West Rail Property Development

As part of the Rail Merger, the Company was appointed to act as the agent of KCRC and certain KCRC subsidiary companies (“West Rail Subsidiaries”)
in the development of specified development sites along the West Rail. The Company can receive an agency fee of 0.75% of the gross sale proceeds
in respect of the developments except for the Tuen Mun development on which the Company can receive 10% of the net profits accrued under
the development agreement. The Company can also recover from the West Rail Subsidiaries all the costs incurred in respect of the West Rail
development sites plus 16.5% on-cost, together with interest accrued thereon. During the year ended 31 December 2020, HK$42 million (2019:
HK$182 million) agency fee and other income in respect of West Rail property development was recognised (note 12). During the year ended
31 December 2020, the reimbursable costs incurred by the Company including on-cost and interest accrued were HK$70 million (2019: HK$81 million).
234 MTR Corporation

23 Investments in Subsidiaries
The following list contains the particulars of principal subsidiaries of the Company:
Proportion of ownership interest
Issued Place of
share capital/ Group’s incorporation/
contributed effective Held by the Held by establishment
Name of company registered capital interest Company subsidiary(ies) and operation Principal activities
MTR Academy (HK) Company Limited HK$10,000 100% – 100% Hong Kong Administering
the operation of
MTR Academy
MTR Telecommunication Company Limited HK$100,000,000 100% 100% – Hong Kong Mobile
telecommunication
services
Overview
Ngong Ping 360 Limited HK$2 100% 100% – Hong Kong Operating the Tung
Chung to Ngong Ping
cable car system and
theme village
in Ngong Ping
Pierhead Garden Management HK$50,000 100% 100% – Hong Kong Property investment
Company Limited
TraxComm Limited HK$15,000,000 100% 100% – Hong Kong Fixed telecommunication
network and
related services

Metro Trains Melbourne Pty. Ltd.* AUD39,999,900 60% on – 100% on Australia Railway operations
ordinary ordinary and maintenance
shares; shares;
AUD100 30% on – 100% on
Class A Class A
shares shares
Metro Trains Sydney Pty Ltd* AUD100 60% – 60% Australia Railway operations
and maintenance
MTR Corporation (Sydney) NRT Pty Limited AUD2 100% – 100% Australia Design and delivery of
railway related systems
MTR Corporation (Sydney) SMCSW Pty AUD1 100% – 100% Australia Design, delivery and
Limited integration of railway
related systems
MTR Corporation (C.I.) Limited US$1,000 100% 100% – Cayman Islands/ Financing
Hong Kong
MTR Consultadoria (Macau) Sociedade MOP25,000 100% – 100% Macao Railway consultancy
Unipessoal Lda. services
MTR Operações Ferroviárias (Macau) MOP25,000 100% – 100% Macao Railway operations
Sociedade Unipessoal Lda. and management
(also known as MTR Railway Operations
(Macau) Company Limited)
MTR Express (Sweden) AB SEK10,050,000 100% – 100% Sweden Railway operations
and maintenance,
property investment
and management Financials and Other Information
MTR Pendeltågen AB SEK10,050,000 100% – 100% Sweden Railway operations,
maintenance and
station management
MTR Tech AB SEK30,000,000 100% – 100% Sweden Railway maintenance
MTR Tunnelbanan AB SEK40,000,000 100% – 100% Sweden Railway operations
and maintenance
MTR (Beijing) Commercial Facilities HK$93,000,000 100% – 100% The People’s Property leasing
Management Co., Ltd.^ Republic of China and management
MTR Corporation (Shenzhen) Limited^ HK$2,636,000,000 100% – 100% The People’s Railway construction,
Republic of China operations and
management
MTR Property Development HK$2,180,000,000 100% – 100% The People’s Property development,
(Shenzhen) Company Limited# Republic of China operation, leasing,
management and
consultancy services
MTR Corporation (Crossrail) Limited GBP1,000,000 100% – 100% United Kingdom Railway operations
and maintenance
* Subsidiaries not audited by KPMG

^ Wholly foreign owned enterprise registered under PRC Law
# Sino-foreign equity joint venture registered under PRC Law

23 Investments in Subsidiaries (continued)

The Directors of the Company are of the opinion that a complete list of all subsidiaries and their particulars will be of excessive length and therefore
the above table contains only those subsidiaries which, in the opinion of the Directors, materially contribute to the Group’s results, assets or
liabilities.
24 Interests in Associates and Joint Venture

The following list contains the particulars of material associates and joint venture, all of which are unlisted corporate entities whose quoted market
price is not available:
Proportion of ownership interest
Place of
Group’s incorporation/
effective Held by the Held by establishment
Name of company interest Company subsidiary and operation Principal activities
Associates
Octopus Holdings Limited 57.4% 57.4% – Hong Kong Holding company of a group
of companies which engage in
the operation of a contactless
smartcard common payment
system in Hong Kong and
consultancy services
Beijing MTR Corporation Limited~ 49% – 49% The People’s Metro investment,
Republic of China construction, operations
and passenger services
Beijing MTR L16 Corporation Limited# 49% – 49% The People’s Metro investment,
Republic of China construction and operations
Hangzhou MTR Corporation Limited*~ 49% – 49% The People’s Railway operations
Republic of China and management
First MTR South Western Trains Limited* 30% – 30% United Kingdom Railway operations
and management
NRT Pty Ltd* 27.55% – 27.55% Australia Financing, railway operations
and maintenance
Joint Venture
Hangzhou MTR Line 5 Corporation Limited~ 60% – 60% The People’s Railway electrical and
Republic of China mechanical construction,
operations and management
* Companies not audited by KPMG

~ Sino-foreign co-operative joint venture registered under PRC Law
# Limited liability company (wholly owned by a legal person) under PRC Law
All the associates and joint venture are accounted for using the equity method in the consolidated accounts and considered to be not individually
material.
236 MTR Corporation

24 Interests in Associates and Joint Venture (continued)
The summary financial information of the Group’s effective interests in associates and joint venture is as follows:

Assets 30,576 28,085
Liabilities (19,036) (17,765)
Net assets 11,540 10,320
Income 6,228 8,424
Expenses and others (5,412) (7,794)
Profit before taxation 816 630
Income tax (211) (342)
Overview
Net profit 605 288
Other comprehensive income 600 (185)
Total comprehensive income 1,205 103
Group’s share of net assets of the associates and joint venture 11,540 10,320
Goodwill 52 39
Carrying amount in the consolidated statement of financial position 11,592 10,359
In March 2017, the Department for Transport of the United Kingdom (“DfT”) awarded the South Western Railway franchise (“Franchise”) to First

MTR South Western Trains Limited (“SWR”), an associate of the Company which the Company holds a 30% shareholding and FirstGroup plc in the
United Kingdom holds a 70% shareholding. Pursuant to a franchise agreement (“Franchise Agreement”) with DfT, the period of the Franchise runs
from 20 August 2017 for seven years, with an option for an eleven-month extension at the discretion of the DfT. As noted in the Company’s 2019
annual accounts, a provision of GBP43 million (HK$436 million) has been made under “share of profit or loss of associates and joint venture” in the
consolidated profit and loss account for the year ended 31 December 2019 which represents the Company’s 30% share of the maximum potential
loss under the Franchise Agreement. Since March 2020, the franchise has been operating under the terms of the Emergency Measures Agreement
and subsequently the Emergency Recovery Measures Agreement (“ERMA”) put in place by the UK Government. As required under ERMA, SWR has
agreed with DfT the termination sum required to terminate the pre-existing Franchise Agreement. Such termination sum will fall due at the end of
the ERMA term, at which point the pre-existing franchise contract would also terminate by agreement. At the end of 2020, SWR is in the process of
negotiating a new directly awarded management contract with the DfT, which will come into effect at the end of the ERMA. SWR’s ERMA is in place
up to 29 May 2021.
25 Investments in Securities
Investments in securities at 31 December 2020 represented investments in unlisted equity securities held by subsidiaries in the Mainland of China
of HK$254 million (2019: HK$nil) and debt securities held by an overseas insurance underwriting subsidiary measured at FVPL of HK$214 million
(2019: HK$386 million). As at 31 December 2020, all debt securities were expected to mature within one year except for HK$154 million
(2019: HK$332 million) which were expected to mature after one year.
26 Properties Held for Sale

Properties held for sale
– at cost 1,159 1,125
– at net realisable value 641 120
1,800 1,245
Representing:
Hong Kong property development 1,572 1,034
Mainland of China property development 228 211
1,800 1,245
Properties held for sale of the Group at 31 December 2020 comprise interests in properties from property developments in Hong Kong and Mainland
of China.
For Hong Kong property development, the net realisable values as at 31 December 2020 and 2019 were determined by reference to an open market
valuation of the properties as at those dates, undertaken by an independent firm of surveyors, Colliers International (Hong Kong) Limited (2019:
Jones Lang LaSalle Limited), who have among their staff Members of the Hong Kong Institute of Surveyors.
Properties held for sale at net realisable value of the Group are stated net of provision of HK$8 million (2019: HK$12 million) made in order to state
these properties at the lower of their cost and estimated net realisable value. The remaining lease terms of leasehold land in Hong Kong included
under properties held for sale are between 10 and 50 years.

27 Derivative Financial Assets and Liabilities

A Fair Value
The contracted notional amounts, fair values and maturities based on contractual undiscounted cash flows of derivative financial instruments
outstanding are as follows:
Notional
amount Fair value Contractual undiscounted cash flows maturing in
Less than Over

in HK$ million 1 year 1-2 years 2-5 years 5 years Total
2020
Derivative Financial Assets
Gross settled:
Foreign exchange forwards
– cash flow hedges: 386 11
– inflow 269 78 40 9 396
– outflow (263) (75) (39) (9) (386)
– not qualified for hedge accounting: 482 19
– inflow 471 30 1 – 502
– outflow (453) (28) (1) – (482)
Cross currency swaps
– fair value hedges: 2,333 110
– inflow 1,274 14 478 705 2,471
– outflow (1,176) (3) (466) (698) (2,343)
– cash flow hedges: 12,797 277
– inflow 279 280 840 16,629 18,028
– outflow (249) (248) (746) (16,432) (17,675)
Net settled:
Interest rate swaps
– fair value hedges 4,390 62 55 21 15 – 91
– cash flow hedges 250 1 (2) (2) (2) 7 1
– not qualified for hedge accounting 413 – – – – – –
21,051 480 205 67 120 211 603
Derivative Financial Liabilities
Gross settled:
– fair value hedges: 1,960 25
– inflow 1,960 – – – 1,960
– outflow (1,985) – – – (1,985)
– inflow – 1 5 – 6
– outflow – (2) (5) – (7)
– not qualified for hedge accounting: 1,390 6
– inflow 1,371 19 – – 1,390
– outflow (1,377) (19) – – (1,396)
– inflow 126 127 649 5,728 6,630
– outflow (146) (146) (759) (5,873) (6,924)
Net settled:
Interest rate swaps
– cash flow hedges 3,250 47 (21) (16) (33) 22 (48)
– not qualified for hedge accounting 1,734 1 1 – (1) – –
14,071 381 (71) (36) (144) (123) (374)
Total 35,122
238 MTR Corporation

27 Derivative Financial Assets and Liabilities (continued)
A Fair Value (continued)
Notional
amount Fair value Contractual undiscounted cash flows maturing in
Less than Over 5

in HK$ million 1 year 1-2 years 2-5 years years Total
2019
Derivative Financial Assets
Gross settled:
Overview
– inflow 42 10 – – 52
– outflow (41) (10) – – (51)
– inflow 640 84 – – 724
– outflow (622) (82) – – (704)
– fair value hedges: 698 9
– inflow 1 1 5 700 707
– outflow – – – (698) (698)

– inflow 244 245 737 9,276 10,502
– outflow (218) (218) (657) (9,214) (10,307)
– hedges of net investments: 64 1
– inflow 67 – – – 67
– outflow (66) – – – (66)
Net settled:
Interest rate swaps
– fair value hedges 8,841 12 14 2 2 – 18
– cash flow hedges 1,250 14 11 4 – – 15
– not qualified for hedge accounting 1,913 3 2 2 2 – 6
21,968 198 74 38 89 64 265
Derivative Financial Liabilities
Gross settled:
– inflow 150 135 22 2 309
– outflow (154) (142) (23) (2) (321)
– hedges of net investments: 1,984 16
– inflow 1,984 – – – 1,984
– outflow (2,000) – – – (2,000)
– inflow 650 118 – – 768
– outflow (663) (120) – – (783) Financials and Other Information
– inflow 78 79 504 8,136 8,797
– outflow (101) (100) (633) (8,343) (9,177)
Net settled:
Interest rate swaps
– fair value hedges 3,785 11 (14) (3) (2) – (19)
– cash flow hedges 100 3 – – (1) (1) (2)
– not qualified for hedge accounting 783 2 – – – – –
13,202 408 (70) (33) (133) (208) (444)
Total 35,170
The Group’s derivative financial instruments consist predominantly of interest rate and cross currency swaps entered into exclusively by the
Company, and the relevant interest rate swap curves as of 31 December 2020 and 2019 were used to discount the cash flows of financial
instruments. Interest rates used ranged from 0.163% to 1.105% (2019: 1.760% to 2.666%) for Hong Kong dollars, 0.164% to 1.189% (2019: 1.630%
to 2.010%) for US dollars, 0.020% to 1.325% (2019: 0.809% to 1.768%) for Australian dollars and -0.058% to 0.183% (2019: 0.012% to 0.124%) for
Japanese yen.
The table above details the remaining contractual maturities at the end of the reporting period of the Group’s derivative financial assets and
liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating,
based on rates current at the end of the reporting period) and the earliest date the Group can be required to pay. The details of the fair value
measurement are disclosed in note 40.


B Financial Risks
The Group’s operating activities and financing activities expose it to four main types of financial risks, namely liquidity risk, interest rate risk, foreign
exchange risk and credit risk. The Group’s overall risk management policy focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects of these financial risks on the Group’s financial performance.
The Board of Directors provides principles for overall risk management and approves policies covering specific areas, such as liquidity risk, interest
rate risk, foreign exchange risk, credit risk, concentration risk, use of derivative financial instruments and non-derivative financial instruments, and
investment of excess liquidity. The Group’s Preferred Financing Model (the “Model”) for the Company is an integral part of its risk management
policies. The Model specifies, amongst other things, the preferred mix of fixed and floating rate debts, the permitted level of foreign currency debts
and an adequate length of financing horizon for coverage of forward funding requirements, against which the Company’s financing related liquidity,
interest rate and currency risk exposures are measured, monitored and controlled. The Board regularly reviews its risk management policies and
authorises changes if necessary based on operating and market conditions and other relevant factors. The Board also reviews on an annual basis
as part of the budgeting process and authorises changes if necessary to the Model in accordance with changes in market conditions and practical
requirements.
The use of derivative financial instruments to control and hedge against interest rate and foreign exchange risk exposures is an integral part of the
Group’s risk management strategy. In accordance with Board policy, these instruments shall only be used for controlling or hedging risk exposures,
and cannot be used for speculation purposes. All of the derivative instruments used by the Company are over-the-counter derivatives comprising
principally interest rate swaps, cross currency swaps and foreign exchange forward contracts.
(i) Liquidity Risk

Liquidity risk refers to the risk that funds are not available to meet liabilities as they fall due, and it may result from timing and amount mismatches of
cash inflow and outflow.
The Group employs projected cash flow analysis to manage liquidity risk by forecasting the amount of cash required, including working capital, debt
repayments, dividend payments, capital expenditures and new investments, and by maintaining sufficient cash balance and/or undrawn committed
banking facilities to ensure these requirements are met. It adopts a prudent approach and will maintain sufficient cash balance and committed
banking facilities to provide forward coverage of at least 12 to 24 months of projected cash requirements at the parent company level as specified
in the Model. The Company also conducts stress testing of its projected cash flow to analyse liquidity risk, and would arrange additional banking
facilities or debt issuance or otherwise take appropriate actions if such stress tests reveal significant risk of material cash flow shortfall.
The following table details the remaining contractual maturities at the end of the reporting period of the Group’s loans and other obligations other
than lease liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if
floating, based on rates current at the end of the reporting period) and the earliest date the Group can be required to pay:
2020 2019
Capital Capital
market market
in HK$ million instruments Bank loans Others Total instruments Bank loans Others Total
Loans and other obligations

Amounts repayable beyond 5 years 35,782 731 – 36,513 25,138 887 – 26,025
Amounts repayable within a period
of between 2 and 5 years 3,881 1,979 618 6,478 4,517 3,001 624 8,142
of between 1 and 2 years 3,220 234 – 3,454 1,029 254 – 1,283
Amounts repayable within 1 year 4,985 9,608 – 14,593 3,513 9,489 – 13,002
47,868 12,552 618 61,038 34,197 13,631 624 48,452
Others represent obligations under lease out/lease back transaction (note 19E).
240 MTR Corporation

B Financial Risks (continued)
(ii) Interest Rate Risk
The Group’s interest rate risk arises principally from its borrowing activities at the parent company level (including its financing vehicles). Borrowings
based on fixed and floating rates expose the Group to fair value and cash flow interest rate risk respectively due to fluctuations in market interest
rates. The Group manages and controls its interest rate risk exposure at the parent company level by maintaining a level of fixed rate debt between
45% and 75% (2019: 45% and 75%) of total debt outstanding as specified by the Model. Should the actual fixed rate debt level deviate substantially
from the Model, derivative financial instruments such as interest rate swaps would be procured to align the fixed and floating mix with the Model.
As at 31 December 2020, 70% (2019: 63%) of the Company’s (including financing vehicles) total debt outstanding was denominated either in or
converted to fixed interest rate after taking into account outstanding cross currency and interest rate swaps. Interest rate risk at subsidiary, associate
and joint venture companies are managed separately based on their own borrowing requirement, circumstances and market practice.
As at 31 December 2020, it is estimated that a 100 basis points increase/25 basis points decrease in interest rates, with all other variables held
Overview
constant, would decrease/increase the Group’s loss after tax and increase/decrease the Group’s retained profits by approximately HK$73 million/
HK$18 million. Other components of consolidated equity would increase/decrease by approximately HK$195 million/HK$52 million.
The sensitivity analysis above has been determined assuming that the change in interest rates had occurred at the end of the reporting period
and had been applied to the exposure to interest rate risk for both derivative and non-derivative financial instruments in existence at that date.
The interest rate assumptions represent management’s assessment of a reasonably possible change in interest rates over the period until the next
annual financial period.
In 2019, a similar analysis was performed based on the assumption of a 100 basis points increase/100 basis points decrease in interest rates,
which would decrease/increase the Group’s profit after tax and the Group’s retained profits by approximately HK$46 million/HK$51 million. Other

components of consolidated equity would increase/decrease by approximately HK$30 million/HK$30 million.
(iii) Foreign Exchange Risk

Foreign exchange risk arises when recognised assets and liabilities are denominated in a currency other than the functional currency of the Group’s
companies to which they relate. For the Group, it arises principally from its borrowing as well as overseas investment and procurement activities.
The Group manages and controls its foreign exchange risk exposure by maintaining a modest level of unhedged non-Hong Kong dollar debt at
the parent company level as specified by the Model, and minimal foreign exchange open positions created by its investments and procurements
overseas. Where the currency of a borrowing is not matched with that of the expected cash flows for servicing the debt, the Company would convert
its foreign currency exposure resulting from the borrowing to Hong Kong dollar exposure through cross currency swaps. For investment and
procurement in foreign currencies, the Group would purchase the foreign currencies in advance or enter into foreign exchange forward contracts to
secure the necessary foreign currencies at pre-determined exchange rates for settlement.
The Company’s exposure to US dollars due to its foreign currency borrowings is also offset by the amount of US dollar cash balances, bank deposits
and investments that it maintains.
As most of the Group’s receivables and payables are denominated in the respective Group companies’ functional currencies (Hong Kong dollars,
Renminbi, Australian dollars, British Pound or Swedish Krona) or United States dollars (with which Hong Kong dollars are pegged) and most of its
payment commitments denominated in foreign currencies are covered by foreign exchange forward contracts, management does not expect that
there will be any significant currency risk associated with them.
(iv) Credit Risk

Credit risk refers to the risk that a counterparty will be unable to pay amounts in full when due. For the Group, this arises mainly from the deposits
it maintains and the derivative financial instruments that it has entered into with various banks and counterparties as well as from the Defeasance
Securities it procured under the lease out/lease back transaction (note 19E). The Group limits its exposure to credit risk by placing deposits and
transacting derivative financial instruments only with financial institutions with acceptable investment grade credit ratings or guarantee, and
diversifying its exposure to various counterparties.
All derivative financial instruments are subject to a maximum counterparty limit based on the respective counterparty’s credit ratings in accordance
with policy approved by the Board. Credit exposure in terms of estimated fair market value of and largest potential loss arising from these
instruments based on the “value-at-risk” concept is measured, monitored and controlled against their respective counterparty limits. To further
reduce counterparty risk exposure, the Group also applies set-off and netting arrangements across all derivative financial instruments and other
financial transactions with the same counterparty.
All deposits and investments are similarly subject to a separate maximum counterparty/issuer limit based on the respective counterparty/issuer’s
credit ratings and/or status as Hong Kong’s note-issuing banks. There is also a limit on the length of time that the Group can maintain a deposit with
a counterparty or investment from an issuer based upon the counterparty/issuer’s credit ratings. Deposit/investment outstanding and maturity
profile are monitored regularly to ensure they are within the limits established for the counterparties/issuers. In addition, the Group actively
monitors the credit default swap levels of counterparties/issuers and their daily changes, and may on the basis of the observed levels and other
considerations adjust its exposure and/or maximum counterparty/issuer limit to the relevant counterparty.
As at the end of the reporting period, the maximum exposure to credit risk of the Group with respect to derivative financial assets and bank deposits
is represented respectively by the carrying amount of the derivative financial assets and the aggregate amount of deposits on its consolidated
statement of financial position. As at the end of the reporting period, there was no significant concentration risk to a single counterparty.
In addition, the Company also manages and controls its exposure to credit risks in respect of receivables as stated in note 29.

28 Stores and Spares

As at 31 December 2020, stores and spares net of provision for obsolete stock of HK$19 million (2019: HK$21 million) amounted to HK$2,014 million
(2019: HK$1,844 million), of which HK$1,434 million (2019: HK$1,310 million) is expected to be consumed within 1 year and HK$580 million (2019:
HK$534 million) is expected to be consumed after 1 year. Stores and spares expected to be consumed after 1 year comprise mainly contingency
spares and stocks kept to meet cyclical maintenance requirements.
29 Debtors and Other Receivables

The Group’s credit policies in respect of receivables arising from its principal activities are as follows:
(i) The majority of fare revenue from Hong Kong transport operation (except for that from the High Speed Rail as described in note 29 (ii) below)
is collected either through Octopus Cards with daily settlement on the next working day or in cash for other ticket types. A small portion of it is
collected through pre-sale agents which settle the amounts due within 21 days.
(ii) In respect of the High Speed Rail, tickets are sold by the Company and other mainland train operators. The clearance centre of China Railway
Corporation administers the revenue allocation and settlement system of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and allocates the
revenue of the High Speed Rail to the Company under a “section-based” approach with settlement in the following month.
(iii) Fare revenue from SZL4 is collected either through Shenzhen Tong Cards or QR code payment with daily settlement on the next working day
or in cash for other ticket types. Fare revenue from MTRX is collected through a third party financial institution with settlement within 14 days and
sales through pre-sale agents are settled in the following month.
(iv) Franchise revenue in Australia is collected either daily or monthly depending on the revenue nature. The majority of the franchise revenue
from operations in Stockholm is collected in the transaction month with the remainder being collected in the following month. Concession revenue
for TfL Rail/Elizabeth Line is collected once every 4 weeks. Service fees from Macao Light Rapid Transit Taipa Line are billed monthly with due dates
in accordance with the terms of the service agreement.
(v) Rentals, advertising and telecommunication service fees are billed monthly with due dates ranging from immediately due to 50 days. Tenants
of the Group’s investment properties and station kiosks are required to pay three months’ rental deposit upon the signing of lease agreements.
(vi) Amounts receivable under interest rate and currency swap agreements with financial institutions are due in accordance with the terms of the
respective agreements.
(vii) Consultancy service incomes are billed monthly for settlement within 30 days upon work completion or on other basis stipulated in the
consultancy contracts.
(viii) Debtors in relation to contracts and capital works entrusted to the Group, subject to any agreed retentions, are due within 30 days upon the
certification of work in progress.
(ix) Amounts receivable in respect of property development are due in accordance with the terms of relevant development agreements or sale
and purchase agreements.
The ageing of debtors is analysed as follows:

Amounts not yet due 3,343 2,775
Overdue by 30 days 209 153
Overdue by more than 90 days 126 192
Total debtors 3,782 3,220
Other receivables and contract assets 9,531 7,949
13,313 11,169
Included in other receivables as at 31 December 2020 was HK$3,387 million (2019: HK$2,813 million) in respect of property development profit in
Hong Kong distributable from stakeholding funds and receivables from property purchasers based on the terms of the development agreements
and sales and purchase agreements.
During the years ended 31 December 2017 and 2018, the Inland Revenue Department of Hong Kong (“IRD”) issued notices of assessment/additional
assessment for the years of assessment 2010/2011 to 2017/2018 following queries in connection with the tax deductibility of certain payments
relating to the Rail Merger.
242 MTR Corporation

29 Debtors and Other Receivables (continued)
Based on the strength of advice from external senior counsels and tax advisor, the directors of the Company have determined to strongly contest
the assessments raised by the IRD. The Company has lodged objections against these tax assessments and has applied to hold over the additional
tax demanded. The IRD has agreed to the holdover of the additional tax demanded subject to the purchases of tax reserve certificates (“TRCs”)
amounting to HK$1,816 million and HK$462 million in 2017 and 2018 respectively. The purchases of TRCs do not prejudice the Company’s tax
position and the purchased TRCs were included in debtors and other receivables in the Group’s consolidated statement of financial position.
No additional tax provision has been made during the years ended 31 December 2019 and 2020 in respect of the above notices of assessment/
additional assessment.
On 23 March 2017, MTR Property (Tianjin) No.1 Company Limited (“MTR TJ No.1”) entered into a Framework Agreement comprising, inter alia, a
Share Transfer Agreement, with Tianjin Xingtai Jihong Real Estate Co., Ltd. (“TJXJRE”), a wholly-owned subsidiary of Beijing Capital Land Ltd., for the
disposal of MTR TJ No.1’s 49% equity interest in Tianjin TJ – Metro MTR Construction Company Limited (“Tianjin TJ – Metro MTR”) at a consideration
of RMB1.3 billion; and MTR TJ No.1’s conditional future acquisition of a shopping centre to be developed on the same site at a consideration of
RMB1.3 billion subject to the agreement of Tianjin TJ – Metro MTR. The disposal was completed on 10 July 2017 and consequently a prepayment
Overview
is recognised on the consolidated statement of financial position. A performance bond in the amount of RMB1.6 billion issued by a Hong Kong
licensed bank has been provided by TJXJRE to MTR TJ No.1 to guarantee its obligations under the Framework Agreement.
The Group’s exposure to credit risk on debtors and other receivables mainly relates to debtors relating to rental receivables in Hong Kong and
franchise fee/project fee receivables outside of Hong Kong. Given the Group’s policy is to receive rental deposits from tenants in Hong Kong and the
debtors in relation to the franchise fee/project fee receivables outside of Hong Kong are government related entities, the Group considers the credit
risk is low and the expected credit loss is immaterial.
As at 31 December 2020, all debtors and other receivables were expected to be recovered within one year except for amounts relating to deposits
and other receivables of HK$4,844 million (2019: HK$2,548 million) in the Group which were expected to be recovered after more than one year. The

nominal values less credit losses are not discounted as it is considered that the effect of discounting would not be significant.
Included in debtors and other receivables are the following amounts denominated in a currency other than the functional currency of the entity to
which they relate:
in million 2020 2019

Australian dollars 8 8
Renminbi 12 66
United States dollars 12 8
30 Amounts Due from Related Parties
Amounts due from:
– HKSAR Government 2,504 1,783
– KCRC 2,859 1,159
– associates 99 99
5,462 3,041
As at 31 December 2020, the amount due from the HKSAR Government mainly related to the recoverable cost for the advanced works in relation Financials and Other Information
to the Shatin to Central Link, reimbursable costs for the essential public infrastructure works in respect of the South Island Line and Kwun Tong
Line Extension projects, reimbursement of the fare revenue difference shared by the HKSAR Government in relation to the “20% Rebate for Every
Octopus Trip” scheme, reimbursement of the fare revenue difference in relation to the “Public Transport Fare Concession Scheme for the Elderly and
Eligible Persons with Disabilities”, agency fee receivables and reimbursable costs in respect of West Rail property development (note 22C), as well as
receivables and retention for other entrustment and maintenance works.
The amount due from KCRC mainly related to the recoverable cost for certain capital works in accordance with the agreements in relation to the Rail
Merger, as well as amounts in relation to the High Speed Rail.
Given the amounts due from related parties mainly related to HKSAR Government and government related entity, the Group considers the credit
risk is low and the expected credit loss is immaterial.
As at 31 December 2020, all amounts due from related parties were expected to be recovered within one year except for HK$2,077 million
(2019: HK$1,156 million) which were expected to be recovered after more than one year. The carrying amounts of amounts due from the HKSAR
Government and other related parties are considered not significantly different from their fair values.

31 Cash, Bank Balances and Deposits

Deposits with banks and other financial institutions 10,869 13,892
Cash at banks and on hand 10,037 7,294
Cash, bank balances and deposits 20,906 21,186
Less: Bank deposits with more than three months to maturity when placed or pledged deposits
(note 32E) (9,027) (12,840)
Cash and cash equivalents in the cash flow statement 11,879 8,346
Included in cash, bank balance and deposits in the consolidated statement of financial position are the following amounts denominated in a
currency other than the functional currency of the entity to which they relate:

Euros 13 8
Japanese yen 957 893
Pound sterling 210 8
32 Loans and Other Obligations

A By Type
2020 2019
Carrying Repayable Carrying Repayable

in HK$ million amount Fair value amount amount Fair value amount
Capital market instruments

Listed or publicly traded:
Debt issuance programme notes due during
2023 to 2047 (2019: due during 2026 to 2047) 18,382 21,555 18,575 8,712 10,110 8,852
Unlisted:
Debt issuance programme notes due during
2021 to 2055 (2019: due during 2020 to 2055) 17,614 21,143 17,767 15,492 17,418 15,973
Total capital market instruments 35,996 42,698 36,342 24,204 27,528 24,825
Bank loans 9,287 9,287 9,293 10,141 10,142 10,147
Lease liabilities 1,180 1,240 1,180 1,241 1,311 1,241
Others 520 611 520 499 573 499
Loans and other obligations 46,983 53,836 47,335 36,085 39,554 36,712
Short-term loans 3,357 3,357 3,357 3,371 3,371 3,371
Total 50,340 57,193 50,692 39,456 42,925 40,083
Others include non-defeased obligations under lease out/lease back transaction (note 19E).
The fair values are based on the discounted cash flows method which discounts the future contractual cash flows at the current market interest and
foreign exchange rates that is available to the Group for similar financial instruments. The carrying amounts of short-term loans approximated their
fair values. Details of the fair value measurement are disclosed in note 40.
244 MTR Corporation

32 Loans and Other Obligations (continued)
A By Type (continued)
The amounts of borrowings, denominated in a currency other than the functional currency of the entity to which they relate, before and after
currency hedging activities are as follows:
Before hedging activities After hedging activities
in million 2020 2019 2020 2019

Australian dollars 431 431 – –
Japanese yen 15,000 15,000 – –
Renminbi 1,130 – – –
United States dollars 2,290 1,130 – –
Overview
B By Repayment Terms
2020 2019
Capital Capital
market Bank Lease market Bank Lease
in HK$ million instruments loans liabilities Others Total instruments loans liabilities Others Total

Amounts repayable beyond 5 years 28,119 807 15 – 28,941 18,738 978 27 – 19,743
of between 2 and 5 years 1,732 2,024 192 520 4,468 2,847 2,952 788 499 7,086
of between 1 and 2 years 2,430 231 322 – 2,983 413 217 194 – 824
Amounts repayable within 1 year 4,061 6,231 651 – 10,943 2,827 6,000 232 – 9,059
36,342 9,293 1,180 520 47,335 24,825 10,147 1,241 499 36,712
Short-term loans – 3,357 – – 3,357 – 3,371 – – 3,371
36,342 12,650 1,180 520 50,692 24,825 13,518 1,241 499 40,083
Less: U
namortised discount/
premium/finance
charges outstanding (286) (6) – – (292) (148) (6) – – (154)
Adjustment due to fair value
change of financial instruments (60) – – – (60) (473) – – – (473)
Total carrying amount of debt 35,996 12,644 1,180 520 50,340 24,204 13,512 1,241 499 39,456
The amounts repayable within 1 year in respect of capital market instruments and bank loans are included in long-term loans as these amounts are
intended to be refinanced on a long-term basis.
C Bonds and Notes Issued and Redeemed

Notes issued during the years ended 31 December 2020 and 2019 comprise:
2020 2019
Principal Net consideration Principal Net consideration

in HK$ million amount received amount received
Debt issuance programme notes 14,642 14,511 1,183 1,183
During the year ended 31 December 2020, the Company issued HK$3,630 million, RMB720 million (or HK$782 million), and USD60 million
(or HK$465 million) of its unlisted debt securities in the respective currency (2019: HK$400 million and USD100 million (or HK$783 million) of its
unlisted debt securities) and RMB410 million (or HK$465 million) and USD1,200 million (or HK$9,300 million) of its listed debt securities in the
respective currency (2019: HK$nil).
As at 31 December 2020, there were outstanding debt securities issued by a wholly-owned subsidiary, MTR Corporation (C.I.) Limited (“MTRCI”). The
obligations of the debt securities issued by MTRCI are direct, unsecured and unsubordinated to the other unsecured obligations of MTRCI which
are unconditionally and irrevocably guaranteed by the Company. The obligations of the Company under the guarantee are direct, unsecured,
unconditional, and unsubordinated to other unsecured and unsubordinated obligations of the Company.
During the year ended 31 December 2020, the Group redeemed HK$2,348 million and USD100 million (or HK$783 million) of its unlisted debt
securities (2019: HK$500 million) and did not redeem any of its listed debt securities (2019: HK$nil).

32 Loans and Other Obligations (continued)

D Lease Liabilities
At 31 December 2020 and 2019, the Group had lease liabilities as follows:
2020 2019
Present value of Present value of

the minimum Total minimum the minimum Total minimum
in HK$ million lease payments lease payments lease payments lease payments
Within 1 year 651 704 232 276

After 1 year but within 2 years 322 343 194 235
After 2 years but within 5 years 192 206 788 876
After 5 years 15 16 27 28
529 565 1,009 1,139
1,180 1,269 1,241 1,415
Less: Total future interest expenses (89) (174)
Present value of lease obligations 1,180 1,241
E Guarantees and Pledges

(i) There were no guarantees given by the HKSAR Government in respect of the loan facilities of the Group as at 31 December 2020 and 2019.
(ii) As at 31 December 2020, MTR Corporation (Shenzhen) Limited has pledged the fare and non-fare revenue and the benefits of insurance
contracts in relation to Phase 2 of Shenzhen Metro Line 4 as security for the RMB1,653 million (2019: RMB1,847 million) bank loan facility granted to it.
Save as disclosed above and those disclosed elsewhere in the consolidated accounts, none of the other assets of the Group was charged or subject
to any encumbrance as at 31 December 2020.
33 Creditors, Other Payables and Provisions

Creditors and accrued charges 19,419 19,315
Other payables and provisions (notes 21B(b)(iii)&(c)(iii)) 14,974 11,787
Contract liabilities 2,444 2,213
36,837 33,315
A Creditors and Accrued Charges

The analysis of creditors by due dates is as follows:

Due within 30 days or on demand 8,024 7,157
Due after 30 days but within 60 days 1,450 1,559
Due after 60 days but within 90 days 638 774
Due after 90 days 4,844 4,978
14,956 14,468
Rental and other refundable deposits 2,989 2,857
Accrued employee benefits 1,474 1,990
19,419 19,315
The Group’s general payment terms are one to two months from the invoice date.
246 MTR Corporation

33 Creditors, Other Payables and Provisions (continued)
A Creditors and Accrued Charges (continued)
Movements in contract liabilities of the Group during the year ended 31 December are as follows:

Balance as at 1 January 2,213 2,116
Increase in contract liabilities as a result of billing in advance 981 1,520
Decrease in contract liabilities as a result of revenue recognised during the year that was included
in the contract liabilities at the beginning of the year (836) (1,410)
Exchange differences 86 (13)
Balance as at 31 December 2,444 2,213
Overview
Contract liabilities mainly arise from construction contracts and other project arrangements, when the Group receives a deposit before the activity
commences and until the revenue recognised on the project exceeds the amount of the deposit received. The payment terms are negotiated on a
case by case basis with customers.
The nominal values of creditors and accrued charges are not significantly different from their fair values.
Included in creditors and accrued charges are the following amounts denominated in a currency other than the functional currency of the entity to
which they relate:

Euros 18 9
Pound sterling 4 3
Renminbi 113 8
B Other Payables
Other payables comprised contract retentions and deferred income. Deferred income related to the surplus amounts of payments received from
property developers in excess of the balance in property development in progress, as well as the unutilised government subsidy for SZL4 operation.
As at 31 December 2020, all of the creditors and other payables were expected to be settled or recognised as income within one year except for
HK$16,043 million (2019: HK$16,204 million), including contract liabilities of HK$963 million (2019: HK$801 million), of the Group which were
expected to be settled or recognised as income after one year. The amounts due after one year for the Group as at 31 December 2020 mainly relate
to rental deposits received from investment property and station kiosk tenants and advance income received, majority of which are due to be repaid
within three years. The Group considers the effect of discounting would be immaterial.

34 Amounts Due to Related Parties

Amounts due to:
– HKSAR Government 94 117
– KCRC 301 2,873
– associates 58 –
453 2,990
The amount due to the HKSAR Government as at 31 December 2020 relates to land administrative fees in relation to railway extensions.
The amount due to KCRC as at 31 December 2020 mainly relates to the accrued portion of the fixed annual payment and variable annual payment
that is expected to be settled within 12 months.
35 Obligations under Service Concession

Movements of the Group’s obligations under service concessions are as follows:

Balance as at 1 January 10,350 10,409
Less: Net amount repaid during the year (65) (56)
Exchange differences 10 (3)
Balance as at 31 December 10,295 10,350
The outstanding balances as at 31 December 2020 and 2019 are repayable as follows:
2020 2019
Interest Interest
Present expense Present expense
value of relating Total value of relating Total
payment to future payment payment to future payment
in HK$ million obligations periods obligations obligations periods obligations
Amounts repayable beyond 5 years 9,904 14,346 24,250 9,978 15,013 24,991
Amounts repayable within a period of
between 2 and 5 years 247 1,976 2,223 238 1,990 2,228
Amounts repayable within a period of
between 1 and 2 years 74 688 762 69 692 761
Amounts repayable within 1 year 70 692 762 65 696 761
10,295 17,702 27,997 10,350 18,391 28,741
36 Loans from Holders of Non-controlling Interests

Loans from holders of non-controlling interests as at 31 December 2020 mainly represents the portion of total shareholder loan of AUD60 million
(HK$359 million) (2019: AUD60 million (HK$328 million)) granted to Metro Trains Australia Pty. Ltd. (“MTA”) by the holders of its non-controlling
interests. The loan carries an interest rate of 6.2% per annum and is repayable at the discretion of MTA or on 1 December 2024, whichever is earlier.
248 MTR Corporation

37 Income Tax in the Consolidated Statement of Financial Position
A Current taxation in the consolidated statement of financial position includes:

Balance relating to Hong Kong Profits Tax 898 1,904
Balance relating to tax outside Hong Kong 106 120
1,004 2,024
B Deferred Tax Assets and Liabilities Recognised

The components of deferred tax assets and liabilities recognised in the consolidated statement of financial position and the movements during the
year are as follows:
Overview
Deferred tax arising from
Depreciation
allowances Provision
in excess and other
of related Revaluation temporary Cash flow
in HK$ million depreciation of properties differences hedges Tax losses Total
2020
Balance as at 1 January 2020 13,007 778 (123) 43 (110) 13,595

Charged/(credited) to consolidated profit and
loss account 356 (1) (292) – (20) 43
(Credited)/charged to reserves – (54) 141 (14) – 73
Exchange differences 2 – (40) – (18) (56)
Balance as at 31 December 2020 13,365 723 (314) 29 (148) 13,655
2019
Balance as at 1 January 2019 12,385 759 (183) (5) (103) 12,853
Charged/(credited) to consolidated profit and
loss account 620 (5) (76) – (1) 538
Charged to reserves – 24 139 48 – 211
Acquisition of subsidiary – – – – (12) (12)
Exchange differences 2 – (3) – 6 5
Balance as at 31 December 2019 13,007 778 (123) 43 (110) 13,595

Net deferred tax assets (470) (134)
Net deferred tax liabilities 14,125 13,729
13,655 13,595 Financials and Other Information
C The Group has not recognised deferred tax assets in respect of some of its subsidiaries’ cumulative tax losses of HK$410 million (2019:
HK$326 million) as it is not probable that future taxable profits against which the losses can be utilised will be available in the relevant tax
jurisdictions and entities.

38 Share Capital, Shares Held for Executive Share Incentive Scheme,

Company-level Movements in Components of Equity and Capital
Management
A Share Capital
2020 2019
Number of shares HK$ million Number of shares HK$ million

Ordinary shares, issued and fully paid:
At 1 January 6,157,948,911 58,804 6,139,485,589 57,970
Shares issued in respect of scrip dividend of
2019/2018 final ordinary dividend 18,426,649 692 13,707,539 654
2020/2019 interim ordinary dividend 2,004,813 81 1,494,283 71
Vesting of shares of Executive Share Incentive
Scheme – 6 – 5
Shares issued under the share option scheme 2,547,500 83 3,261,500 104
At 31 December 6,180,927,873 59,666 6,157,948,911 58,804
In accordance with section 135 of the Companies Ordinance, the ordinary shares of the Company do not have a par value.
B Shares Held for Executive Share Incentive Scheme

During the year ended 31 December 2020, the Company awarded Performance Shares and Restricted Shares under the Company’s Executive Share
Incentive Scheme to certain eligible employees of the Company (note 41(ii)). In this regard, a total of 6,950 Performance Shares (2019: 244,650) and
2,334,750 Restricted Shares (2019: 2,062,150) were awarded and accepted by the grantees on 8 April 2020 (2019: 1 April 2019 and 8 April 2019). The
fair values of these Award Shares were HK$41.90 per share (2019: HK$48.90 per share on 1 April 2019 and HK$48.40 per share on 8 April 2019).
During the year ended 31 December 2020, the Trustee of the Executive Share Incentive Scheme, pursuant to the terms of the rules and the trust
deed of the Executive Share Incentive Scheme, purchased on the Hong Kong Stock Exchange a total of 2,020,000 Ordinary Shares (2019: 1,870,000
Ordinary Shares) of the Company for a total consideration of approximately HK$86 million (2019: HK$88 million). During the year ended
31 December 2020, 58,339 Ordinary Shares of the Company (2019: 64,088 Ordinary Shares) were issued to the Executive Share Incentive Scheme
in relation to scrip dividend issued amounting to HK$3 million (2019: HK$3 million).
During the year ended 31 December 2020, 1,984,400 shares (2019: 2,230,420 shares) were transferred to the awardees under the Executive Share
Incentive Scheme upon vesting. The total cost of the vested shares was HK$90 million (2019: HK$93 million). During the year ended 31 December
2020, HK$6 million (2019: HK$5 million) was credited to share capital in respect of vesting of shares whose fair values at the grant date were higher
than the costs of the vested shares. During the year ended 31 December 2020, 283,673 award shares (2019: 174,697 award shares) were lapsed/
forfeited.
As at 31 December 2020, taking into account the shares acquired out of the dividends from the shares held under the trust, there were
5,947,665 shares (2019: 5,853,726) held in trust under the Executive Share Incentive Scheme (excluding shares vested but not yet transferred
to awardees).
C New Shares Issued and Fully Paid Up during the Year

Weighted average
Number of shares exercise price
HK$
Employee share options exercised:
– 2007 Share Option Scheme 2,547,500 30.146
An analysis of the Company’s outstanding share options as at 31 December 2020 is disclosed in note 41.
250 MTR Corporation

Management (continued)
D The fixed assets revaluation reserve is used to deal with the surpluses or deficits arising from the revaluation of self-occupied buildings
(note 2E(ii)).
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges
pending subsequent recognition of the hedged cash flow in accordance with the accounting policy adopted for cash flow hedges as explained in
note 2V(ii).
The employee share-based capital reserve comprises the share-based payment expenses recognised in respect of share options under the share
option scheme which are yet to be exercised, and in respect of award shares under the Executive Share Incentive Scheme granted which are yet
to be vested, as explained in the accounting policy under note 2W(iii). The amount will either be transferred to the share capital account when the
Overview
option is exercised or when the award share is vested, or be released directly to retained profits if the option is lapsed.
The exchange reserve comprises all foreign exchange differences arising from the translation of the accounts of foreign enterprises. The reserve is
dealt with in accordance with the accounting policy set out in note 2AC.
Apart from retained profits, the other reserves are not available for distribution to shareholders because they do not constitute realised profits. In
addition, the Company considers the cumulative surpluses on revaluation of investment properties of HK$51,935 million (2019: HK$60,964 million)
included in retained profits of the Company are non-distributable as they do not constitute realised profits. As at 31 December 2020, the Company
considers that the total amount of reserves of the Company available for distribution to shareholders amounted to HK$54,347 million (2019:
HK$56,546 million).

Included in the Group’s retained profits as at 31 December 2020 is an amount of HK$2,656 million (2019: HK$2,431 million), being the retained
profits attributable to the associates and joint venture.
E Capital Management
The Group’s primary objectives in managing capital are to safeguard its ability to continue as a going concern, and to generate sufficient profit to
maintain growth and provide an adequate return to its shareholders.
The Group manages the amount of capital in proportion to risk, and makes adjustments to its capital structure through the amount of dividend
payment to shareholders, issuance of scrip and new shares, and managing its debt portfolio in conjunction with projected financing requirement.
The Financial Secretary Incorporated of the HKSAR Government is the majority shareholder of the Company holding 4,634,173,932 shares as at
31 December 2020, representing 74.98% of total equity interest in the Company.
The Group monitors capital on the basis of the net debt-to-equity ratio, which is calculated based on net borrowings as a percentage of the total
equity, where net borrowings are represented by the aggregate of loans and other obligations, obligations under service concession and loans from
holders of non-controlling interests net of cash and cash equivalents and bank medium term notes. As at 31 December 2020, the Group’s net
debt-to-equity ratio is 22.5% (2019: 15.4%).
Fasttrack Insurance Ltd. is required to maintain a minimum level of shareholders’ fund based on the Bermuda Insurance Act. MTR Corporation
(Shenzhen) Limited is required to maintain a registered capital at or above 40% of the total investment for the SZL4 project in accordance with
the concession agreement. MTR Property Development (Shenzhen) Company Limited is required to maintain a registered capital at or above 33%
of the total investment based on Jianfang [2015] No. 122. Metro Trains Melbourne Pty. Ltd. is required to maintain total shareholders’ funds at a
specified amount in accordance with the franchise agreement. All the Group’s subsidiaries in Sweden are required to maintain total shareholders’
fund at or above 50% of their respective registered share capital based on the Swedish Companies Act. MTR Travel Limited is required to maintain Financials and Other Information
a certain level of paid-up capital in order to maintain membership of the Travel Industry Council of Hong Kong. As at 31 December 2020, all these
capital requirements were met. Apart from these, neither the Company nor any of its other subsidiaries are subject to externally imposed capital
requirements.


Management (continued)
F Company-level Movements in Components of Equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated equity is set out in the consolidated
statement of changes in equity. Details of the changes in the Company’s individual components of equity between the beginning and the end of the
year are set out below:
Other reserves
Shares
held for
Executive Fixed Employee
Share assets share-based
Share Incentive revaluation Hedging capital Retained Total
in HK$ million Note capital Scheme reserve reserve reserve profits equity
2020
Balance as at 1 January 2020 46 58,804 (263) 3,936 175 160 117,510 180,322
Loss for the year – – – – – (4,311) (4,311)
Other comprehensive income for the year – – (274) (227) – 715 214
Total comprehensive loss for the year – – (274) (227) – (3,596) (4,097)
2019 final ordinary dividend – – – – – (6,036) (6,036)
2019 final ordinary dividend 692 (2) – – – 2 692
2020 interim ordinary dividend – – – – – (1,545) (1,545)
2020 interim ordinary dividend 81 (1) – – – 1 81
Shares purchased for Executive Share
Incentive Scheme – (86) – – – – (86)
Vesting and forfeiture of award shares of
Executive Share Incentive Scheme 6 90 – – (94) (2) –
Employee share-based payments – – – – 121 – 121
Employee share options exercised 83 – – – (6) – 77
Balance as at 31 December 2020 46 59,666 (262) 3,662 (52) 181 106,334 169,529
2019
Balance as at 1 January 2019 57,970 (265) 3,815 (99) 142 113,376 174,939
Profit for the year – – – – – 10,805 10,805
Other comprehensive income for the year – – 121 271 – 702 1,094
Total comprehensive income for the year – – 121 271 – 11,507 11,899
Amounts transferred from hedging
reserve to initial carrying amount of
hedged items – – – 3 – – 3
2018 final ordinary dividend – – – – – (5,835) (5,835)
2018 final ordinary dividend 654 (2) – – – 2 654
2019 interim ordinary dividend – – – – – (1,539) (1,539)
2019 interim ordinary dividend 71 (1) – – – 1 71
Shares purchased for Executive Share
Incentive Scheme – (88) – – – – (88)
Vesting and forfeiture of award shares of
Executive Share Incentive Scheme 5 93 – – (96) (2) –
Employee share-based payments – – – – 122 – 122
Employee share options exercised 104 – – – (8) – 96
Balance as at 31 December 2019 46 58,804 (263) 3,936 175 160 117,510 180,322
252 MTR Corporation

39 Other Cash Flow Information
A Reconciliation of the Group’s operating profit before Hong Kong property development, depreciation, amortisation and variable annual
payment from recurrent businesses to cash generated from operations is as follows:

Operating profit before Hong Kong property development, depreciation, amortisation and
variable annual payment from recurrent businesses 5,194 15,351
Adjustments for non-cash items 1,519 1,836
Operating profit before working capital changes 6,713 17,187
Increase in debtors and other receivables (3,583) (1,372)
Increase in stores and spares (119) (188)
Overview
(Decrease)/increase in creditors and other payables (463) 1,493
Cash generated from operations 2,548 17,120
B Reconciliation of the Group’s liabilities arising from financing activities is as follows:

Interest and
Capital finance
market Bank Lease Short-term charges
in HK$ million instruments loans liabilities Others loans payables Total

2020
At 1 January 2020 24,204 10,141 1,241 499 3,371 145 39,601
Changes from financing cash flows:
– Proceeds from loans and capital
market instruments 14,511 12,287 – – 74 – 26,872
– Repayment of loans and capital
market instruments (3,130) (13,274) – – (91) – (16,495)
– Capital element of lease rentals paid – – (232) – – – (232)
– Interest and finance charges – – – – – (1,039) (1,039)
11,381 (987) (232) – (17) (1,039) 9,106

Exchange differences 4 133 107 (4) 3 (7) 236
Other changes:
– Adjustment due to fair value change
of financial instruments 407 – – – – – 407
– Recognition of lease liabilities – – 64 – – – 64
– Interest and finance charges – – – 25 – 1,051 1,076
407 – 64 25 – 1,051 1,547 Financials and Other Information
At 31 December 2020 35,996 9,287 1,180 520 3,357 150 50,490

39 Other Cash Flow Information (continued)

B Reconciliation of the Group’s liabilities arising from financing activities is as follows (continued):

Interest and
Capital finance
market Bank Lease Short-term charges
in HK$ million instruments loans liabilities Others loans payables Total
2019
At 1 January 2019 23,541 11,312 1,315 478 4,424 113 41,183
Changes from financing cash flows:
– Proceeds from loans and capital
market instruments 1,182 10,477 – – – – 11,659
– Repayment of loans and capital
market instruments (500) (11,619) – – (1,053) – (13,172)
– Capital element of lease rentals paid – – (165) – – – (165)
– Interest and finance charges – – – – – (1,054) (1,054)
682 (1,142) (165) – (1,053) (1,054) (2,732)
Exchange differences (3) (42) (54) (2) – (8) (109)

Other changes:
– Adjustment due to fair value change
of financial instruments (16) 13 – – – – (3)
– Recognition of lease liabilities – – 145 – – – 145
– Interest and finance charges – – – 23 – 1,094 1,117
(16) 13 145 23 – 1,094 1,259
At 31 December 2019 24,204 10,141 1,241 499 3,371 145 39,601
C Total Cash Outflow for Leases

Amounts included in the cash flow statement for leases comprise the following:

Within operating cash flows 36 50
Within financing cash flows 288 213
324 263
These amounts relate to the leases of the following:

Buildings 197 189
Plant and equipment 127 74
324 263
254 MTR Corporation

40 Fair Value Measurement
In accordance with HKFRS 13, Fair Value Measurement, the level into which a fair value measurement is classified is determined with reference to the
observability and significance of the inputs used in the valuation technique as follows:
Level 1: Fair value measured using only Level 1 inputs, i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the
measurement date
Level 2: Fair value measured using Level 2 inputs, i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs.
Unobservable inputs are inputs for which market data are not available
Level 3: Fair value measured using significant unobservable inputs
A Fair Value Measurements of Fixed Assets

All of the Group’s investment properties and self-occupied buildings measured at fair value on a recurring basis are categorised as Level 3 of the fair
Overview
value hierarchy.
During the year ended 31 December 2020, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 in respect of the
Group’s investment properties and self-occupied buildings. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at
the end of the reporting period in which they occur.
All the Group’s investment properties and self-occupied buildings were revalued as at 31 December 2020 and 2019 by independent qualified
surveyors. The Group’s senior management have discussion with the surveyors on the valuation assumptions and valuation results when the
valuation is performed at each interim and annual reporting date.

The fair value of all the Group’s self-occupied buildings is determined on a recurring basis using primarily the direct comparison approach assuming
sale of properties in their existing state with vacant possession.
The property interests of all the shopping malls and office accommodation held by the Group as investment properties have been valued using the
income capitalisation approach. Under this approach, the market value is derived from the capitalisation of the rental revenue to be received under
existing tenancies and the estimated full market rental value to be received upon expiry of the existing tenancies with reference to the market rental
levels prevailing as at the date of valuation by an appropriate single market yield rate. The range of market yield rate adopted for the valuation of
major investment properties as at 31 December 2020 was 3.5% - 5.75% (2019: 3.5% - 5.75%) with a weighted average of 4.8% (2019: 4.8%). The fair
value measurement is negatively correlated to the market yield rate.
The movements of investment properties during the year ended 31 December 2020 are shown in note 19A. All the fair value adjustment related to
investment properties held as at 31 December 2020 was recognised under “Investment property revaluation (loss)/gain” in the consolidated profit
and loss account.
B Fair Value Measurements of Financial Instruments
(i) Financial Assets and Liabilities Carried at Fair Value
All of the Group’s investments in debt securities were carried at fair value using Level 1 measurements, and the fair value of these financial assets
as at 31 December 2020 was HK$214 million (2019: HK$386 million). The derivative financial instruments were carried at fair value using Level 2
measurements. As at 31 December 2020, the fair values of derivative financial assets and derivative financial liabilities were HK$480 million (2019:
HK$198 million) and HK$381 million (2019: HK$408 million) respectively. The investments in unlisted equity securities were carried at fair value using
Level 3 measurements.
The discounted cash flow method, which discounts the future contractual cash flows at the current market interest rates, is the main valuation
technique used to determine the fair value of the Group’s borrowings and derivative financial instruments. For interest rate swaps, cross currency Financials and Other Information
swaps and foreign exchange forward contracts, the discount rates used were derived from the swap curves of the respective currencies and the
cross currency basis curves of the respective currency pairs at the end of the reporting period. Closing exchange rates at the end of the reporting
period were used to convert value in foreign currency to local currency.
During the year, the additions to the investments in unlisted equity securities amounted to HK$254 million (2019: HK$nil). As at 31 December
2020, the fair value of investments in equity securities was HK$254 million (2019: HK$nil). The fair value of the Group’s investments in unlisted
equity securities is determined based on the adjusted net asset method. The significant unobservable input includes the fair value of the individual
assets and liabilities (recognised and unrecognised). The fair value measurement is positively correlated to the fair value of the individual assets
and liabilities (recognised and unrecognised). As at 31 December 2020, it is estimated that a 5-percent increase/decrease in fair value of the total
individual assets and liabilities (recognised and unrecognised), with all other variables held constant, would decrease/increase the Group’s loss after
tax by approximately HK$13 million/HK$13 million.
At the end of each interim and annual reporting period, valuations are performed for the financial instruments which are categorised into Level 3 of
the fair value hierarchy, and the valuation assumptions and results are reviewed by the Group’s management accordingly.
During the years ended 31 December 2020 and 2019, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The
Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.

40 Fair Value Measurement (continued)

B Fair Value Measurements of Financial Instruments (continued)
(ii) Financial Assets and Liabilities Not Carried at Fair Value
The carrying amounts of the Group’s financial assets and liabilities not carried at fair value are not materially different from their fair values as at
31 December 2020 and 2019 except for capital market instruments and other obligations, for which their carrying amounts and fair values are
disclosed below:
At 31 December 2020 At 31 December 2019
in HK$ million Carrying amount Fair value Carrying amount Fair value
Capital market instruments 35,996 42,698 24,204 27,528
Other obligations 1,700 1,851 1,740 1,884
The above fair value measurement is categorised as Level 2. The discounted cash flow method, which discounts the future contractual cash flows
at the current market interest rates, is the main valuation technique used to determine the fair value of the Group’s capital market instruments and
other obligations. The discount rates used were derived from the swap curves of the respective currencies at the end of the reporting period. Closing
exchange rates at the end of the reporting period were used to convert value in foreign currency to local currency.
41 Share-based Payments
Equity-settled Share-based Payments
The Group granted share options under share option scheme and share awards under Executive Share Incentive Scheme to its Members of the
Executive Directorate and certain employees. As at 31 December 2020, the Company maintained the 2007 Share Option Scheme and the Executive
Share Incentive Scheme. Details of the schemes are as follows:
(i) 2007 Share Option Scheme

Following the expiry of the New Joiners Share Option Scheme (the “New Option Scheme”) in May 2007, the 2007 Share Option Scheme (the “2007
Option Scheme”) was submitted and approved at the 2007 Annual General Meeting to enhance the Company’s ability to attract the best available
personnel, to retain and motivate critical and key employees, to align their interest to the long-term success of the Company and to provide them
with fair and market competitive remuneration. Under the Rules of the 2007 Option Scheme, a maximum of 277,461,072 shares may be issued
pursuant to the exercise of options granted after 7 June 2007 under all share option schemes of the Company including the 2007 Option Scheme.
Options granted will be vested in respect of their underlying shares not less than 1 year from the date on which the relevant option is offered. The
exercise price of any option granted under the 2007 Option Scheme is to be determined by the Company upon the offer of grant of the option
and the exercise price should not be less than the greatest of (i) the average closing price of an MTR share for the five business days immediately
preceding the day of offer of such option; (ii) the closing price of an MTR share on the day of offer of such option, which must be a business day; and
(iii) the nominal value of an MTR share.
Subject to the rules of the 2007 Option Scheme, the Company may, from time to time during the scheme period, offer to grant share options to any
eligible employees at its absolute discretion. Under the 2007 Option Scheme, the date of grant is defined as the date of acceptance of the offer to
grant the option. The 2007 Option Scheme expired in June 2014. All the share options granted were vested prior to 2018.
The following table summarises the outstanding share options as at 31 December 2020 granted under the 2007 Option Scheme since inception:
Date of grant Number of share options Exercise price Exercisable period

HK$
2014 Award
30 May 2014 2,347,500 28.65 on or prior to 23 May 2021
256 MTR Corporation

41 Share-based Payments (continued)
Equity-settled Share-based Payments (continued)
Movements in the number of share options outstanding and their related weighted average exercise prices were as follows:
2020 2019
Number of Weighted average Number of Weighted average

share options exercise price share options exercise price
HK$ HK$
Outstanding as at 1 January 4,909,000 29.426 8,170,500 29.441
Exercised during the year (2,547,500) 30.146 (3,261,500) 29.465
Forfeited during the year (14,000) 28.650 – –
Overview
Outstanding as at 31 December 2,347,500 28.650 4,909,000 29.426
Exercisable as at 31 December 2,347,500 28.650 4,909,000 29.426
The weighted average closing price in respect of the share options exercised during the year was HK$42.138 (2019: HK$47.750).
Share options outstanding at the end of the reporting period had the following exercise prices and remaining contractual lives:
2020 2019
Number of Remaining Number of Remaining

Exercise price share options contractual life share options contractual life
years years
HK$31.40 – – 1,385,500 0.3
HK$28.65 2,347,500 0.4 3,523,500 1.4
2,347,500 4,909,000
During the year ended 31 December 2020, no expense was recognised for the equity-settled share-based payments relating to the 2007 Share
Option Scheme (2019: HK$nil).
(ii) Executive Share Incentive Scheme

On 15 August 2014, the Board of the Company approved the adoption of the Executive Share Incentive Scheme, following the expiry of the
2007 Option Scheme on 6 June 2014. The purposes of the Executive Share Incentive Scheme are to retain management and key employees, to
align participants’ interest with the long-term success of the Company and to drive the achievement of strategic objectives of the Company. The
Executive Share Incentive Scheme took effect on 1 January 2015 for a term of 10 years, under which an award holder may be granted an award of
Restricted Shares and/or Performance Shares (collectively known as “Award Shares”). Restricted Shares are awarded to selective eligible employees.
Performance Shares are awarded to eligible employees which vest subject to the performance of the Company over a pre-determined performance
period, assessed by reference to such Board-approved performance metric and in respect of such performance period and any other performance
conditions as determined by the Remuneration Committee from time to time.
Subject to the Scheme Rules, the Remuneration Committee shall determine the vesting criteria and conditions or periods for the Award Shares to
be vested, subject to review from time to time. An award of Restricted Shares will vest ratably over three years in equal tranches (unless otherwise
determined by the Remuneration Committee). An award of Performance Shares will vest upon certification by the Remuneration Committee that
the relevant performance metric and performance conditions have been achieved. The Executive Share Incentive Scheme will be administered
by the Company in accordance with the Scheme Rules and the Company has entered into a Trust Deed with the Trustee for the purpose of Financials and Other Information
implementing the Scheme. The number of Award Shares will be acquired in the market at the cost of the Company by the Trustee. Award Shares will
be held on trust by the Trustee until the end of each vesting period.

41 Share-based Payments (continued)

Equity-settled Share-based Payments (continued)
As at 31 December 2020, the following awards of shares with vesting period falling in the years ended 31 December 2019 and 2020 were offered to
Members of the Executive Directorate and selected employees of the Company under the Executive Share Incentive Scheme:
Number of Average fair

Award Shares granted value per share Vesting period
Restricted Performance
Date of award Shares Shares HK$ From To
8 April 2016 2,401,150 – 38.65 1 April 2016 1 April 2019
19 August 2016 71,428 – 42.50 15 August 2016 15 August 2019
10 April 2017 2,245,200 – 44.45 3 April 2017 3 April 2020
16 March 2018 80,000 – 43.70 16 March 2018 31 March 2019
10 April 2018 2,208,950 1,772,900 42.80 3 April 2018 3 April 2021 (Restricted Shares)
3 April 2021 (Performance Shares)
1 April 2019 120,000 – 48.90 1 April 2019 31 March 2022
8 April 2019 1,942,150 244,650 48.40 1 April 2019 1 April 2022 (Restricted Shares)
8 April 2020 2,334,750 6,950 41.90 1 April 2020 1 April 2023 (Restricted Shares)
Movement in the number of Award Shares outstanding was as follows:
2020 2019
Number of Award Shares Number of Award Shares

Outstanding as at 1 January 5,659,978 5,758,295
Awarded during the year 2,341,700 2,306,800
Vested during the year (1,984,400) (2,230,420)
Forfeited during the year (283,673) (174,697)
Outstanding as at 31 December 5,733,605 5,659,978
Award Shares outstanding at 31 December 2020 had the following remaining vesting periods:
Award Shares Remaining vesting period Number of Award Shares

years
Restricted Shares
10 April 2018 0.26 543,990
1 April 2019 1.25 120,000
8 April 2019 1.25 1,122,465
8 April 2020 2.25 2,212,550
Performance Shares
10 April 2018 0.26 1,493,500
8 April 2019 0.25 234,150
8 April 2020 0.25 6,950
The details of the Executive Share Incentive Scheme are also disclosed in the Remuneration Report.
During the year ended 31 December 2020, the equity-settled share-based payments relating to the Executive Share Incentive Scheme recognised as
an expense amounted to HK$121 million (2019: HK$122 million).
258 MTR Corporation

42 Retirement Schemes
The Group operates a number of retirement schemes in Hong Kong, the Mainland of China, Macao, United Kingdom, Sweden and Australia. The
assets of these schemes are held under the terms of separate trust arrangements so that the assets are kept separate from those of the Group. The
majority of the Group’s employees are covered by the retirement schemes operated by the Company.
A Retirement Schemes Operated by the Company in Hong Kong

The Company operated four retirement schemes under trust in Hong Kong during the year ended 31 December 2020, including the MTR
Corporation Limited Retirement Scheme (the “MTR Retirement Scheme”), the MTR Corporation Limited Provident Fund Scheme (the “MTR Provident
Fund Scheme”) and two Mandatory Provident Fund (“MPF”) Schemes, the “MTR MPF Scheme” and the “KCRC MPF Scheme”.
Currently, new eligible employees can choose between the MTR Provident Fund Scheme and the MTR MPF Scheme while the MTR MPF Scheme
covers employees who did not opt for or who are not eligible to join the MTR Provident Fund Scheme.
Overview
(i) MTR Retirement Scheme
The MTR Retirement Scheme is a defined benefit scheme registered under the Occupational Retirement Schemes Ordinance (Cap. 426) (the “ORSO”)
and has been granted with an MPF Exemption Certificate by the Mandatory Provident Fund Schemes Authority (the “MPFA”).
The MTR Retirement Scheme has been closed to new employees from 1 April 1999 onwards. It is administrated in accordance with the Trust Deed
and Rules by the Board of Trustees, comprising management and employee representatives, and independent non-employer trustees. It provides
benefits based on the greater of a multiple of final salary times service and a factor times the accumulated member contributions with investment
returns. Members’ contributions are based on fixed percentages of base salary. The Company’s contributions are determined by reference to an
annual actuarial valuation carried out by an independent actuarial consulting firm. As at 31 December 2020, the total number of member was
3,100 (2019: 3,356). In 2020, members contributed HK$65 million (2019: HK$69 million) and the Company contributed HK$253 million (2019:

HK$351 million) to the MTR Retirement Scheme. The net asset value of the MTR Retirement Scheme excluding the portion attributable to members’
voluntary contributions as at 31 December 2020 was HK$9,855 million (2019: HK$9,417 million).
The actuarial valuations as at 31 December 2019 and 2020 to determine the accounting obligations in accordance with HKAS 19, Employee benefits,
were carried out by an independent actuarial consulting firm, Willis Towers Watson, which is represented by Ms Wing Lui, a Fellow of the Society of
Actuaries of the United States of America, using the Projected Unit Credit Method. The results of the valuation are shown in note 43.
The actuarial valuations as at 31 December 2019 and 2020 to determine the cash funding requirements were also carried out by Ms Wing Lui of Willis
Towers Watson using the Attained Age Method. The principal actuarial assumptions used for the valuation as at 31 December 2020 included a
long-term rate of investment return net of salary increases of 0.25% (2019: -0.25%) per annum, together with appropriate allowances for expected
rates of mortality, turnover and retirement. As at the valuation date of 31 December 2020:
(a) the MTR Retirement Scheme was solvent, covering 113.8% (2019: 105.8%) of the aggregate vested liability had all members left service with
their leaving service benefits secured, resulting in a solvency surplus of HK$1,218 million; and
(b) on the assumption that the MTR Retirement Scheme would continue in force, its value of assets was more than sufficient to cover the
aggregate past service liability, with a funding level of 113.2% (2019: 101.3%), representing a past service surplus of HK$1,173 million.
(ii) MTR Provident Fund Scheme

The MTR Provident Fund Scheme is a defined contribution scheme registered under the ORSO and has been granted an MPF Exemption Certificate
by the MPFA. All benefits payable under the MTR Provident Fund Scheme are calculated by reference to members’ own contributions and the
Company’s contributions, together with investment returns on these contributions. Both members’ and the Company’s contributions are based on
fixed percentages of members’ base salary.
As at 31 December 2020, the total number of employees participating in the MTR Provident Fund Scheme was 10,614 (2019: 10,571). In 2020, Financials and Other Information
total members’ contributions were HK$159 million (2019: HK$153 million) and total contributions from the Company were HK$372 million
(2019: HK$362 million). No contributions forfeited by employees leaving the scheme were utilised to offset contributions during the year
(2019: HK$nil). As at the end of the reporting period, forfeited contributions of HK$75 million (2019: HK$54 million) were available to reduce the
contributions payable in future years. The net asset value as at 31 December 2020 was HK$7,523 million (2019: HK$6,843 million).
(iii) MTR MPF Scheme

The MTR MPF Scheme is a defined contribution scheme covered under an MPF master trust registered with the MPFA. It covers those employees
who did not opt for or who are not eligible to join the MTR Retirement Scheme or the MTR Provident Fund Scheme. Both members and the
Company each contribute to the MTR MPF Scheme at the mandatory levels as required by the Mandatory Provident Fund Schemes Ordinance
(Cap. 485) (the “MPFSO”). The Company makes additional contributions above the mandatory level for eligible members who joined the MTR MPF
Scheme before 1 April 2008, subject to individual terms of employment.
As at 31 December 2020, the total number of employees participating in the MTR MPF Scheme was 5,068 (2019: 5,747). In 2020, total members’
contributions were HK$49 million (2019: HK$50 million) and total contribution from the Company were HK$52 million (2019: HK$56 million). No
contributions forfeited by employees leaving the scheme were utilised to offset contributions during the year (2019: HK$nil). As at the end of the
reporting period, there were no forfeited contributions (2019: HK$nil) available to reduce the contributions payable in future years.

42 Retirement Schemes (continued)

A Retirement Schemes Operated by the Company in Hong Kong (continued)
(iv) KCRC MPF Scheme
The KCRC MPF Scheme is a defined contribution scheme covered under an MPF master trust registered with the MPFA. It covers those former KCRC
employees who were previously members of the KCRC MPF Scheme and are eligible to join the MTR Provident Fund Scheme but opt to re-join the
KCRC MPF Scheme. Both members and the Company each contribute to the KCRC MPF Scheme at the mandatory levels as required by the MPFSO.
As at 31 December 2020, the total number of employees participating in the KCRC MPF Scheme was 329 (2019: 372). In 2020, total members’
contributions were HK$4 million (2019: HK$5 million) and total contribution from the Company were HK$4 million (2019: HK$5 million). No
contributions forfeited by employees leaving the scheme were utilised to offset contributions during the year (2019: HK$nil). As at the end of the
reporting period, there were no forfeited contributions (2019: HK$nil) available to reduce the contributions payable in future years.
B Retirement Schemes for Employees of Mainland of China and Overseas Offices and
Subsidiaries
Employees not eligible for joining the retirement schemes operated by the Company in Hong Kong are covered by the retirement schemes
established by their respective subsidiary companies or in accordance with respective applicable labour regulations.
Certain employees of the Group’s Australian subsidiary are entitled to receive retirement benefits from the Emergency Services Superannuation
Scheme operated in Australia. The benefit amounts are calculated based on the member’s years of service and final average salary. The Group
does not recognise any defined benefit liability in respect of this scheme because the Group has no legal or constructive obligation to pay future
benefits relating to its employees; its only obligation is to pay contributions as they fall due. As at 31 December 2020, total number of the Group’s
employees participating in this scheme was 533 (2019: 546). In 2020, total members’ contributions were HK$11 million (2019: HK$23 million) and
total contribution from the Group was HK$62 million (2019: HK$59 million).
Certain employees of the Group’s Swedish subsidiaries are entitled to receive retirement benefits from the ITP 2 Retirement Scheme operated in
Sweden. The benefit amounts are calculated based on the member’s years of service and annual salary. The Group does not recognise any defined
benefit liability in respect of this scheme because the Group has no legal or constructive obligation to pay future benefits relating to its employees;
its only obligation is to pay contributions as they fall due. As at 31 December 2020, total number of the Group’s employees participating in this
scheme was 786 (2019: 741). In 2020, total contribution from the Group was HK$20 million (2019: HK$23 million).
Certain employees of the Group’s MTR Crossrail subsidiary are entitled to join the MTR Corporation (Crossrail) section of the Railway Pension Scheme
in the United Kingdom. The scheme is a shared cost arrangement whereby the Group is only responsible for a share of the cost. The benefit amounts
are calculated based on the member’s years of service and final average salary. The Group does not recognise any net defined benefit liability in
respect of this scheme because the Group has no legal or constructive obligation for any deficit in the value of the scheme. Its only obligation is to
pay contributions as they fall due. As at 31 December 2020, total number of the Group’s employees participating in this scheme was 736 (2019: 621).
In 2020, total members’ contributions were HK$26 million (2019: HK$22 million) and total contribution from the Group was HK$39 million (2019:
HK$32 million). Pension expense of HK$86 million (2019: HK$67 million) was recognised in profit and loss and actuarial gain of HK$37 million (2019:
HK$28 million) was recognised in the statement of other comprehensive income.
Except for the retirement schemes described above, all other retirement schemes to cover employees in overseas offices or in subsidiaries in Hong
Kong, the Mainland of China, Macao or overseas are defined contribution schemes. For Hong Kong employees, these schemes are registered under
the MPFSO in Hong Kong. For the Mainland of China, Macao or overseas employees, these schemes are operated in accordance with the respective
local laws and regulations. As at 31 December 2020, the total number of employees of the Group participating in these schemes was 16,161 (2019:
14,015). In 2020, total members’ contributions were HK$110 million (2019: HK$95 million) and total contribution from the Group was HK$493 million
(2019: HK$484 million). During the years ended 31 December 2019 and 2020, the amount of contributions forfeited in accordance to the schemes’
rules, if applicable, is not significant.
43 Defined Benefit Retirement Scheme

The Company makes contributions to and recognises defined benefit liabilities in respect of MTR Retirement Scheme which provides employees
with benefits upon retirement or termination of services for other reasons (note 42). This defined benefit scheme exposes the Group to actuarial
risks, such as interest rate, salary increase and investment risks. The information about the MTR Retirement Scheme is summarised as below:
A Amounts Recognised in the Consolidated Statement of Financial Position

Present value of defined benefit obligations (9,517) (9,905)
Fair value of scheme assets 9,855 9,417
Net assets/(liabilities) 338 (488)
The net assets (2019: net liabilities) are recognised under “Debtors and other receivables” (2019: “Creditors, other payables and provisions”) in the
consolidated statement of financial position. A portion of the above obligations is expected to be paid after more than one year. However, it is
not practicable to segregate this amount from the amounts to be paid in the next twelve months, as future contributions will also relate to future
services rendered and future changes in actuarial assumptions and market conditions. The Company expects to pay HK$29 million in contribution to
the MTR Retirement Scheme in 2021.
260 MTR Corporation

43 Defined Benefit Retirement Scheme (continued)
B Scheme Assets
Equity securities
– Financial institutions 396 482
– Non-financial institutions 4,091 4,046
4,487 4,528
Bonds
– Government 1,831 2,173
– Non-government 3,384 2,614
Overview
5,215 4,787

Cash 367 297
10,069 9,612
Voluntary units (214) (195)
9,855 9,417

The scheme assets did not include any ordinary shares of the Company as at 31 December 2020 (2019: HK$nil). Also, there were no investment in
other shares and debt securities of the Company as at 31 December 2020 and 2019. All of the equity securities and bonds have quoted prices in
active markets.
An asset-liability modelling review is performed periodically to analyse the strategic investment policies of the MTR Retirement Scheme. Based on
the latest study, the long-term strategic asset allocation of the MTR Retirement Scheme as at 31 December 2020 is set at 42.5% in equities and 57.5%
in bonds and cash (2019: 42.5% in equities and 57.5% in bonds and cash).
C Movements in the Present Value of the Defined Benefit Obligations

At 1 January 9,905 10,022
Remeasurements:
– Actuarial (gains)/losses arising from changes in liability experience (127) 252
– Actuarial (gains)/losses arising from changes in demographic assumptions – –
– Actuarial losses/(gains) arising from changes in financial assumptions 163 (96)
36 156

Members’ contributions paid to the scheme 65 69
Benefits paid by the scheme (1,000) (876)
Current service cost 269 285 Financials and Other Information
Interest cost 242 249

At 31 December 9,517 9,905
The weighted average duration of the present value of the defined benefit obligations was 5.6 years as at 31 December 2020 (2019: 6.0 years).

43 Defined Benefit Retirement Scheme (continued)

D Movements in Scheme Assets
At 1 January 9,417 8,662
Company’s contributions paid to the scheme 253 351
Members’ contributions paid to the scheme 65 69
Benefits paid by the scheme (1,000) (876)
Administrative expenses paid from scheme assets (5) (5)
Interest income 233 219
Return on scheme assets, excluding interest income 892 997
At 31 December 9,855 9,417
E Expenses Recognised in the Profit and Loss and Other Comprehensive Income
Current service cost 269 285
Net interest on net defined benefit liability 9 30
Administrative expenses paid from scheme assets 5 5
283 320
Less: Amount capitalised (49) (41)
Net amount recognised in profit or loss 234 279
Actuarial losses 36 156
Return on scheme assets, excluding interest income (892) (997)
Amount recognised in other comprehensive income (856) (841)
The retirement scheme expense is recognised under staff costs and related expenses in the consolidated profit and loss account.
F Significant Actuarial Assumptions and Sensitivity Analysis

2020 2019
Discount rate 1.17% 2.61%
Future salary increase 2.75% 4.00%
Unit value increase 3.00% 3.75%
The below analysis shows how the present value of the defined benefit obligations as at 31 December would have increased/(decreased) as a result
of 0.25% change in the significant actuarial assumptions:
2020 2019
Increase in 0.25% Decrease in 0.25% Increase in 0.25% Decrease in 0.25%

HK$ million HK$ million HK$ million HK$ million
Discount rate (131) 135 (142) 146
Future salary increases 103 (98) 127 (122)
Unit value increase 32 (29) 13 (11)
The above sensitivity analysis is based on the assumption that changes in actuarial assumptions are not correlated and therefore it does not take
into account the correlations between the actuarial assumptions.
262 MTR Corporation

44 Material Related Party Transactions
The Financial Secretary Incorporated, which holds approximately 74.98% of the Company’s issued share capital on trust for the HKSAR Government
as at 31 December 2020, is the majority shareholder of the Company. Transactions between the Group and the HKSAR Government departments
or agencies, or entities controlled by the HKSAR Government, other than those transactions such as the payment of fees, taxes, leases and rates, etc.
that arise in the normal dealings between the HKSAR Government and the Group, are considered to be related party transactions pursuant to
HKAS 24 (revised), Related party disclosures, and are identified separately in these accounts.
Major related party transactions entered into by the Group which are relevant for the current year include:
A On 30 June 2000, the Company was granted by the HKSAR Government a franchise, for an initial period of 50 years, to operate the then
existing mass transit railway, and to operate and construct any extension to the railway. On the same day, the Company and the HKSAR Government
entered into an operating agreement which laid down the detailed provisions for the design, construction, maintenance and operation of the
railway under the franchise. With the Rail Merger, the operating agreement was replaced with effect from 2 December 2007 by a new operating
agreement, details of which are set out in note 44C below.
Overview
B On 14 July 2000, the Company received a comfort letter from the HKSAR Government pursuant to which the HKSAR Government agreed
to extend the period of certain of the Company’s land interests so that they are coterminous with the Company’s franchise period. To prepare for
the Rail Merger, on 3 August 2007, the HKSAR Government wrote to KCRC confirming that, subject to all necessary approvals being obtained, the
period of certain of KCRC’s land interests (which are the subject of the service concession under the Rail Merger) will be extended so that they are
coterminous with the concession period of the Rail Merger.
C In connection with the Rail Merger (note 3), on 9 August 2007, the Company and the HKSAR Government entered into a new operating
agreement (“OA”), which is based on the then existing operating agreement referred to in note 44A above. On the Appointed Day, the Company’s

then existing franchise under the Mass Transit Railway Ordinance was expanded to cover railways other than the then existing MTR railway for an
initial period of 50 years from the Appointed Day (“expanded franchise”). A detailed description of the OA is contained in the circular to shareholders
in respect of the Extraordinary General Meeting convened to approve the Rail Merger. Such transaction is considered to be a related party
transaction and also constitute continuing connected transaction as defined under the Listing Rules.
D Other than the OA described in note 44C above, the Company also entered into principal agreements with KCRC and the HKSAR Government
in connection with the Rail Merger. These principal agreements are: (i) Merger Framework Agreement, (ii) Service Concession Agreement,
(iii) Sale and Purchase Agreement, (iv) West Rail Agency Agreement, and (v) Property Package Agreements. For the year ended 31 December 2020,
amounts recoverable or invoiced by the Company under West Rail Agency Agreement and Property Package Agreements are HK$57 million
(2019: HK$84 million) and HK$nil (2019: HK$3 million) respectively and the net amounts payable or paid by the Company in relation to the Service
Concession is HK$830 million (2019: HK$3,333 million).
The above agreements are considered to be related party transactions and also constitute continuing connected transactions as defined under the
Listing Rules. A detailed description of each of the agreements is contained under the paragraph “Continuing Connected Transactions” in the Report
of the Members of the Board.
E The Company entered into the following principal agreements with KCRC and the HKSAR Government in connection with the operation of
the High Speed Rail:
(i) An amendment operating agreement, which was entered into with the HKSAR Government on 23 August 2018, to amend and supplement
the OA, in order to prescribe the operational requirements that will apply to the High Speed Rail.
(ii) A supplemental service concession agreement, which was entered into with KCRC on 23 August 2018, to supplement the SCA, in order for
KCRC to grant a concession to the Company in respect of the High Speed Rail and to prescribe the operational and financial requirements that will Financials and Other Information
apply to the High Speed Rail. During the year ended 31 December 2020, net revenue received or receivable from KCRC in respect of the High Speed
Rail amounted to HK$1,536 million (2019: HK$717 million).
The above transactions are considered to be related party transactions and also constitute continuing connected transactions as defined under the
Listing Rules. A detailed description of each of the above agreements is contained under the paragraph “Continuing Connected Transactions” in the
Report of the Members of the Board.
F The Company entered into the following principal agreements with KCRC and the HKSAR Government in connection with the operation of
the Tuen Ma Line Phase 1:
(i) An amendment operating agreement and a supplemental operating agreement, which were entered into with the HKSAR Government on
11 February 2020, to amend and supplement, respectively, the OA, in order to prescribe the operational requirements that will apply to the Tuen Ma
Line Phase 1.
(ii) A supplemental service concession agreement, which was entered into with KCRC on 11 February 2020, to supplement the SCA, in order for
KCRC to grant a concession to the Company in respect of the Tuen Ma Line Phase 1 and to prescribe the operational and financial requirements that
will apply to the Tuen Ma Line Phase 1. During the year ended 31 December 2020, net revenue received or receivable from KCRC in respect of the
Tuen Ma Line Phase 1 amounted to HK$276 million (2019: HK$nil).

44 Material Related Party Transactions (continued)

G The Company and the HKSAR Government entered into Preliminary Project Agreement, which was signed on 6 February 2008, and Project
Agreement, which was signed on 13 July 2009 in respect of the Island Line Extension to the Western District. Pursuant to the agreements, the
Company has received from the HKSAR Government a total of HK$12,652 million of government grant as funding support subject to a repayment
mechanism. The timeframe for the repayment mechanism was extended for a period ended on or before 30 June 2019 pursuant to various
supplemental agreements between the Company and the HKSAR Government. During the year ended 31 December 2019, the Company has made
a final repayment to the HKSAR Government with a principal of HK$114 million and interest of HK$59 million. Such transactions are considered to
be related party transactions and also constitute continuing connected transactions as defined under the Listing Rules. A detailed description of the
Project Agreement is contained under the paragraph “Continuing Connected Transactions” in the Report of the Members of the Board.
H The Company entered into entrustment agreements with the HKSAR Government for the design, site investigation, procurement activities,
construction, testing and commissioning of HSR and SCL. Detailed description of the agreements and the amount of project management fees
recognised for the year ended 31 December 2020 are provided in notes 21A and 21B. In addition, an amount of HK$580 million was paid/payable
to the HKSAR Government in 2020 (2019: HK$891 million) under SCL EA3’s payment arrangement with the HKSAR Government and relevant
contractors.
I In connection with certain property developments along the railway system, the Company has been granted land lots by the HKSAR
Government or allowed to proceed with the development at the following sites during the year:
Land grant/land premium Total Land premium

Property development site offer acceptance date land premium settlement date
in HK$ million
Site D of the Remaining Portion of
Tseung Kwan O Town Lot No. 70 14 February 2020 2,725 19 March 2020
Site KL of the Remaining Portion of
Tseung Kwan O Town Lot No. 70 6 November 2020 5,568 4 December 2020
J On 8 February 2021, the Company accepted an offer from the HKSAR Government to proceed with THE SOUTHSIDE (or Wong Chuk Hang
Station) Package Five Property Development at Site E of Aberdeen Inland Lot No. 467 at a land premium of HK$6,437.31 million and on the terms
and conditions of the relevant Conditions of Exchange No. 20304. The land premium is expected to be paid on or before mid March 2021.
K On 5 July 2013, the Company entered into a contract with the Hong Kong Airport Authority (“HKAA”) for the maintenance of the Automated
People Mover system at the Hong Kong International Airport (“System”) for a seven-year period (“Existing Contract”), effective from 6 July 2013.
During the year, the Existing Contract was extended for 6 months to 5 January 2021 and, on 2 July 2020, the Company entered into a new contract
with the HKAA for the maintenance of the System for a seven-year period effective from 6 January 2021. In respect of the services provided,
HK$122 million was recognised as consultancy income during the year ended 31 December 2020 (2019: HK$82 million).
On 18 May 2018, the Company provided a sub-contractor warranty to the HKAA as a result of obtaining a subcontract from a third party for the
modification works of the existing System for a seven year period, effective from 25 September 2017 (“Subcontract”). The Subcontract contains
provisions covering the provision and modification of the power distribution, communication and control subsystems in respect of the System.
L During the year ended 31 December 2020, the Group incurred HK$82 million (2019: HK$148 million) of expenses for the central clearing
services provided by Octopus Cards Limited (“OCL”), a wholly owned subsidiary of Octopus Holdings Limited (“OHL”). OCL incurred HK$25 million
(2019: HK$42 million) of expenses for the load agent and Octopus card issuance and refund services, computer equipment and relating services as
well as warehouse storage space provided by the Group. During the year, OHL distributed HK$144 million (2019: HK$187 million) of dividends to
the Group.
During the year ended 31 December 2020, MTR Corporation (Sydney) NRT Pty Ltd, through its joint operation, provided services in respect of the
design and delivery of electrical and mechanical systems and rolling stock to NRT Pty Ltd at a total amount of AUD13 million (HK$68 million) (2019:
AUD106 million or HK$587 million). Metro Trains Sydney Pty Ltd also provided operations and maintenance services in respect of Sydney Metro
North West to NRT Pty Ltd at a total amount of AUD99 million (HK$526 million) (2019: AUD96 million or HK$523 million) and mobilisation services in
respect of Sydney Metro City & Southwest to NRT CSW Pty Ltd at a total amount of AUD6 million (HK$30 million). MTR Corporation (Sydney) SMCSW
Pty Limited also provided delivery of electrical and mechanical systems and rolling stock as well as integration of railway system services to NRT CSW
Pty Ltd at a total amount of AUD286 million (HK$1,540 million) (2019: HK$nil).
264 MTR Corporation

44 Material Related Party Transactions (continued)
M Other than those stated in notes 44A to 44L, the Company has business transactions with the HKSAR Government, entities related to the
HKSAR Government and the Company’s associates in the normal course of business operations. Details of the transactions and the amounts
involved for the reporting period are disclosed in notes 30 and 34.
N The Group has paid remuneration to Members of the Board and the Executive Directorate. Details of these transactions are described in note
11A. In addition, Members of the Executive Directorate were granted share options under the Company’s 2007 Share Option Scheme and award
shares under the Executive Share Incentive Scheme. Details of the terms of these options and award shares are disclosed in note 11B, note 11C and
the Report of the Members of the Board. Their gross remuneration charged to the consolidated profit and loss account is summarised as follows:

Short-term employee benefits 67.0 73.2
Overview
Post-employment benefits 6.6 6.2
Equity compensation benefits 21.6 24.1
95.2 103.5
The above remuneration is included in staff costs and related expenses disclosed in note 10A.
O During the year, the following dividends were paid to the Financial Secretary Incorporated of the HKSAR Government:

Ordinary dividends
– Cash dividends paid 5,700 5,561
45 Commitments
A Capital Commitments
(i) Outstanding capital commitments as at 31 December 2020 not provided for in the consolidated accounts were as follows:
Hong Kong
transport
operations,
station Hong Kong Hong Kong Mainland of
commercial railway property China and
and other extension rental and overseas
in HK$ million businesses projects development operations Total
At 31 December 2020
Authorised but not yet contracted for 10,799 – 2,127 67 12,993
Authorised and contracted for 19,473 115 991 9 20,588
30,272 115 3,118 76 33,581
At 31 December 2019
Authorised but not yet contracted for 8,476 – 2,442 9 10,927
Authorised and contracted for 13,558 170 1,183 20 14,931
22,034 170 3,625 29 25,858
In addition to the above, the Group has the following capital commitments in respect of its investments in associates and joint venture:
In respect of Shenzhen Metro Line 13, the Group is responsible to contribute equity injection of up to RMB1,428 million. Up to the end of December
2020, the Group has not contributed equity to the project.
In respect of Sydney Metro City & Southwest, the Group is expected to further contribute equity of approximately AUD12.7 million and loans of
approximately AUD13.3 million to the project for the share of investment.

45 Commitments (continued)
A Capital Commitments (continued)
(ii) The commitments under Hong Kong transport operations, station commercial and other businesses comprise the following:
Improvement, Acquisition of Additional

enhancement and property, plant concession
in HK$ million replacement works and equipment property Total
At 31 December 2020
Authorised but not yet contracted for 5,395 1,533 3,871 10,799
Authorised and contracted for 16,121 491 2,861 19,473
21,516 2,024 6,732 30,272
At 31 December 2019
Authorised but not yet contracted for 4,090 746 3,640 8,476
Authorised and contracted for 10,267 246 3,045 13,558
14,357 992 6,685 22,034
B Liabilities and Commitments in respect of Property Management Contracts

The Group has, over the years, jointly developed with outside property developers certain properties above or adjacent to railway depots and
stations. Under most of the development agreements, the Group retained the right to manage these properties after their completion. The Group,
as manager of these properties, enters into service contracts with outside contractors for the provision of security, cleaning, maintenance and
other services on behalf of the managed properties. The Group is primarily responsible for these contracts, but any contract costs incurred will be
reimbursed by the owners and tenants of the managed properties from the management funds as soon as they are paid.
As at 31 December 2020, the Group had total outstanding liabilities and contractual commitments of HK$2,718 million (2019: HK$3,101 million)
in respect of these works and services. Cash funds totalling HK$3,010 million (2019: HK$2,820 million) obtained through monthly payments of
management service charges from the managed properties are held by the Group on behalf of those properties for settlement of works and services
provided.
C Material Financial and Performance Guarantees

In respect of the debt securities issued by MTR Corporation (C.I.) Limited (note 32C), the Company has provided guarantees to the investors of
approximately HK$18,544 million (in notional amount) as at 31 December 2020. The proceeds from the debts issued are on lent to the Company. As
such, the primary liabilities have been recorded in the Company’s statement of financial position.
In respect of the lease out/lease back transaction (“Lease Transaction”) (note 19E), the Group has provided standby letters of credit (“standby LC’s”)
to the Investors to cover additional amounts payable by the Group in the event the transactions are terminated prior to the expiry of the lease terms,
and such standby LC’s amounted to US$76.5 million (HK$593 million) as at 31 December 2020. The Group has also provided standby LC’s to certain
of the Investors under the Lease Transaction to replace some of the Defeasance Securities previously used to support the corresponding long-term
lease payments as a result of credit rating downgrades of these securities, and such standby LC’s amounted to US$62.5 million (HK$485 million) as at
31 December 2020.
In respect of the lease on the shopping centre in Beijing, the Group provided a bank guarantee of RMB12.5 million (HK$15 million) and a parent
company guarantee of RMB52.5 million (HK$62 million) in respect of the quarterly rental payments to the landlord.
In respect of the SZL4 concession, the Group has provided to the Shenzhen Municipal Government a parent company guarantee in respect of MTR
Corporation (Shenzhen) Limited’s performance and other obligations under the concession agreement, which can be called if the performance and
other obligations are not met.
In respect of the Melbourne train system franchise, the Group and the other shareholders of the Group’s 60% owned subsidiary, Metro Trains
Melbourne Pty. Ltd. (“MTM”), have provided to the Public Transport Victoria a joint and several parent company guarantee of AUD147.3 million
(HK$880 million) and a performance bond of AUD57.0 million (HK$341 million) for MTM’s performance and other obligations under the franchise
agreement, with each shareholder bearing its share of liability based on its shareholdings in MTM. In respect of the lease of the office premises, MTM
has provided bank guarantees of AUD2.6 million (HK$16 million) for the monthly rental payments to the landlords.
In respect of the Stockholm metro franchise, the Group has provided to the Stockholm transport authority a guarantee of SEK1,000 million
(HK$945 million), which can be called if the franchise is terminated early as a result of default by MTR Tunnelbanan AB, the wholly owned subsidiary
of the Group to undertake the franchise.
In respect of the Stockholms pendeltåg franchise, the Group has provided to the Stockholm transport authorities a guarantee of SEK1,000 million
(HK$945 million), which can be called if the franchise is terminated early as a result of default by MTR Pendeltågen AB, the wholly owned subsidiary
of the Group to undertake the franchise.
In December 2020, the Group was awarded the Mälartåg franchise in Stockholm, Sweden. The Group commits to provide to the Stockholm
transport authorities a bank guarantee of SEK300 million (HK$284 million) upon signing the franchise agreement. The bank guarantee can be called
if the franchise is terminated early as a result of default by MTR Jota AB (to be renamed MTR Mälartåg AB), the wholly owned subsidiary of the Group
to undertake the franchise.
266 MTR Corporation

45 Commitments (continued)
C Material Financial and Performance Guarantees (continued)
In respect of the TfL Rail/Elizabeth Line Franchise in London, the Group has provided to the Rail for London Limited a parent company guarantee of
GBP80 million (HK$847 million) and a performance bond of GBP25 million (HK$265 million) for MTR Corporation (Crossrail) Limited’s performance
and other obligations under the franchise agreement.
In respect of the Sydney Metro North West Franchise, the Group has provided to NRT Pty Ltd, an associate of the Group, a parent company
guarantee with a liability cap of AUD1,526 million (HK$9,118 million) for the design and construction contract as well as the mobilisation phase
of the operations and maintenance contract (the cap being subject to the usual exclusions of losses arising from wilful misconduct, fraudulent
and criminal actions and, in addition, losses arising from abandonment of the contracts). The Group has also provided a performance bond of
AUD17.8 million (HK$106 million) for the performance and other obligations under the design and construction sub-contract. The Group has also
provided a parent company guarantee with a liability cap of AUD147.6 million (HK$882 million) for the operation and maintenance of Sydney Metro
North West, which can be called if the franchise is terminated early as a result of default by Metro Trains Sydney Pty Limited. The Group has also
Overview
provided bank guarantee amounting to AUD25.3 million (HK$151 million) as at 31 December 2020 for the operation and maintenance of Sydney
Metro North West.
In respect of the Sydney Metro City & Southwest Franchise, the Group has provided to NRT CSW Pty Ltd, an associate of the Group, a parent
company guarantee with a liability cap of approximately AUD602 million (HK$3,597 million) for the integrator works under the integrator contract
(the cap being subject to the usual exclusions of losses arising from wilful misconduct, fraudulent and criminal actions and, in addition, losses
arising from abandonment of the contracts). The Group has also provided a parent company guarantee with a liability cap of approximately
AUD27.5 million (HK$164 million) for the mobilisation phase of the operation and maintenance of Sydney Metro City & Southwest. The Group has
also provided a parent company guarantee to Metro Trains Sydney Pty Ltd with a liability cap of approximately AUD221 million (HK$1,321 million)
and a parent company guarantee to MTR Corporation (Sydney) SMCSW Pty Limited with a liability cap of approximately AUD221 million

(HK$1,321 million) for the interface works under Sydney Metro North West and Sydney Metro City & Southwest.
In respect of the South Western Trains Franchise, the Group has provided to the Secretary of State for Transport a parent company guarantee of
GBP13.1 million (HK$139 million), a parent company support facility of GBP1.1 million (HK$12 million), a performance bond of GBP4.8 million
(HK$51 million) and a season ticket bond amounting to GBP20.8 million (HK$221 million) as at 31 December 2020 for the performance and other
obligations under the franchise agreement.
In respect of the various lines of the Macao Light Rapid Transit, the Group has provided to Macao Light Rapid Transit Corporation, Limited and
the Infrastructures Development Bureau of the Macao SAR Government (Gabinete para o Desenvolvimento de Infra-estruturas) a number of bank
guarantees amounting to MOP277.3 million (HK$269 million) as at 31 December 2020 for the performance and other obligations under the project.
In respect of the Hangzhou Metro Line 1 and Line 5 concessions, the Group is required to provide handover bank bonds to the Hangzhou Municipal
Government before the end of the concessions for a period of three years to cover any non-compliance of handover requirements under the
concession agreements.
Except for the provision of SWR as discussed in note 24, no other provision was recognised in respect of the above financial and performance
guarantees as at 31 December 2020.
D Service Concession in respect of the Rail Merger

Pursuant to the Rail Merger, the Company is obliged under the SCA to pay an annual fixed payment of HK$750 million to KCRC over the period of the
service concession. Additionally, commencing after three years from the Appointed Day, the Company is obliged to pay a variable annual payment
to KCRC based on the revenue generated from the KCRC system above certain thresholds. Furthermore, under the SCA, the Company is obliged
to maintain, repair, replace and/or upgrade the KCRC system over the period of the service concession which is to be returned at the expiry of the
service concession.

46 Company-level Statement of Financial Position

At 31 December At 31 December
Assets
Fixed assets
– Investment properties 83,560 89,105
– Other property, plant and equipment 99,865 100,681
– Service concession assets 27,311 25,638
210,736 215,424
Property management rights 16 21
Property development in progress 11,942 12,022
Deferred expenditure 1,116 1,948
Investments in subsidiaries 2,175 1,955
Interests in associates 24 24
Properties held for sale 1,572 1,034
Derivative financial assets 480 198
Stores and spares 1,378 1,200
Debtors and other receivables 8,381 6,727
Amounts due from related parties 21,524 18,413
Cash, bank balances and deposits 11,769 12,934
271,113 271,900
Liabilities
Short-term loans 3,259 3,342
Creditors, other payables and provisions 27,781 25,829
Current taxation 898 1,842
Amounts due to related parties 19,800 23,322
Loans and other obligations 25,422 13,117
Obligations under service concession 10,114 10,177
Derivative financial liabilities 381 408
Deferred tax liabilities 13,929 13,541
101,584 91,578
Net assets 169,529 180,322
Capital and reserves
Share capital 59,666 58,804
Shares held for Executive Share Incentive Scheme (262) (263)
Other reserves 110,125 121,781
Total equity 169,529 180,322
Approved and authorised for issue by the Members of the Board on 11 March 2021
Rex P K Auyeung Jacob C P Kam Herbert L W Hui

Chairman Chief Executive Officer Finance Director
268 MTR Corporation

47 Accounting Estimates and Judgements
A Key sources of accounting estimates and estimation uncertainty include the following:
(i) Estimated Useful Life and Depreciation and Amortisation of Property, Plant and Equipment and Service Concession Assets
The Group estimates the useful lives of the various categories of property, plant and equipment and service concession assets on the basis of their
design lives, planned asset maintenance programme and actual usage experience. Depreciation is calculated using the straight-line method at rates
sufficient to write off their cost or valuation over their estimated useful lives (note 2J).
(ii) Impairment of Long-lived Assets

The Group reviews its long-lived assets for indications of impairment at the end of each reporting period according to accounting policies set out
in note 2I(ii). Long-lived assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate that
the carrying amount of the assets exceeds its recoverable amount. The recoverable amount of an asset is the greater of the fair value less costs of
disposal and value in use. In estimating the value in use, the Group uses projections of future cash flows from the assets based on management’s
Overview
assignment of a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(iii) Pension Costs

The Group employs independent valuation professionals to conduct annual assessment of the actuarial position of the MTR Retirement Scheme.
The determination of the Group’s obligation and expense for the defined benefit element of the scheme is dependent on certain assumptions and
factors provided by the Company, which are disclosed in notes 42A(i) and 43F.
(iv) Profit Recognition on Hong Kong Property Development

Recognition of Hong Kong property development profits requires management’s estimation of the final project costs upon completion, assessment

of outstanding transactions and market values of unsold units and, in the case of sharing-in-kind properties, the properties’ fair value upon
recognition. The Group takes into account independent qualified surveyors’ reports, past experience on sales and marketing costs when estimating
final project costs on completion and makes reference to professionally qualified valuers’ reports in determining the estimated fair value of sharing-
in-kind properties.
(v) Properties Held for Sale

The Group values unsold interests in properties at the lower of their costs and net realisable values (note 26) at the end of each reporting period. In
ascertaining the properties’ net realisable values, which are represented by the estimated selling prices less costs to be incurred in relation to the
sales, the Group employs independent valuation professionals to assess the properties’ estimated selling prices and makes estimations on further
selling and property holding costs to be incurred based on past experience and with reference to general market practice.
(vi) Valuation of Investment Properties

The valuation of investment properties requires management’s input of various assumptions and factors relevant to the valuation. The Group
conducts semi-annual revaluation of its investment properties by independent professionally qualified valuers based on these assumptions agreed
with the valuers prior to adoption.
(vii) Franchise in Hong Kong

The current franchise under which the Group is operating in Hong Kong allows the Group to run the mass transit railway system in Hong Kong
until 1 December 2057. Pursuant to the terms of the OA and the MTR Ordinance, the Company may apply for extensions of the franchise and the
Secretary for Transport and Housing shall, subject to certain provisions, recommend to the Chief Executive in Council that the franchise should
be extended for a further period of 50 years (from a date relating to certain capital expenditure requirements) if the Company has satisfied such
capital expenditure requirements, at no additional payment for any such extension. If the franchise is not extended, it will expire on 1 December
2057. Following such expiry, the HKSAR Government has the right to take possession of railway property (and, where the HKSAR Government has
taken possession of any such property which is not concession property, the Company may require the HKSAR Government to take possession of
any other property which the HKSAR Government was entitled to take possession of, but did not take possession of), but must compensate the
Company: (i) in the case of such property which is not concession property, at the higher of fair value and depreciated book value, and (ii) in the case
of such property which is concession property and to the extent that the capital expenditure exceeds an agreed threshold (“Capex Threshold”), in an
amount equal to any above-threshold expenditure at the end of the Concession Period with such reimbursement to be on the basis of depreciated
book value. The Group’s depreciation policies (note 2J) for such property which is not concession property with assets’ lives which extend beyond
2057 reflect the above.
(viii) Income Tax

Certain treatments adopted by the Group in its Hong Kong Profits Tax returns in the past years are yet to be finalised with the Hong Kong Inland
Revenue Department. In assessing the Group’s income tax and deferred taxation in the consolidated accounts, the Company has predominantly
followed the tax treatments it has adopted in these tax returns, which may be different from the final outcome in due course.
As detailed in note 29, there are tax queries from the IRD with the Company on tax deductibility of certain expenses and payments for which the
ultimate tax determination is uncertain up to the date of this annual report. The Group recognises tax provision for these tax matters based on
estimates of whether additional taxes will eventually be due. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such difference will impact the income tax expenses in the period when such determination is made.
(ix) Project Provisions

The Group establishes project provisions for the settlement of estimated claims that may arise due to time delays, additional costs or other
unforeseen circumstances common to major construction contracts. The claims provisions are estimated based on an assessment of the Group’s
liabilities under each contract by professionally qualified personnel, which may differ from the actual claims settlement.

47 Accounting Estimates and Judgements (continued)

A Key sources of accounting estimates and estimation uncertainty include the following: (continued)
(x) Fair Value of Derivatives and Other Financial Instruments

In determining the fair value of financial instruments, the Group uses its judgement to select a variety of methods and make assumptions that are
mainly based on market conditions existing at the end of each reporting period. For financial instruments that are not traded in active markets, the
fair values were derived using the discounted cash flows method which discounts the future contractual cash flows at the current market interest or
foreign exchange rates, as applicable, for similar financial instruments that were available to the Group at the time.
(xi) Obligations under Service Concession

In determining the present value of the obligations under service concession, the discount rate adopted was the relevant Group company’s
estimated long-term incremental cost of borrowing at inception after due consideration of the relevant Group company’s existing fixed rate
borrowing cost, future interest rate and inflation trends.
B Critical accounting judgements in applying the Group’s accounting policies include the following:
(i) Provisions and Contingent Liabilities

The Group recognises provisions for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result
of a past event (including in relation to those under entrustment arrangements), and it is probable that an outflow of economic benefits will be
required to settle the obligation and a reliable estimate can be made. Where it is not probable that an outflow of economic benefits will be required,
or the amount cannot be estimated reliably, the obligation is disclosed as contingent liability. Other than set out in note 21, as at 31 December 2020,
the Group considered that it had no disclosable contingent liabilities as there were neither pending litigations nor events with potential obligation
which were probable to result in material outflow of economic benefits from the Group.
48 Possible Impact of Amendments, New Standards and Interpretations

Issued but Not Yet Effective for the Annual Accounting Year Ended
31 December 2020
Up to the date of issue of these accounts, the HKICPA has issued a number of amendments and a new standard, HKFRS 17, Insurance contracts, which
are not yet effective for the year ended 31 December 2020 and which have not been adopted in these accounts. These developments include the
following which may be relevant to the Group:
Effective for accounting periods

beginning on or after
Amendments to HKFRS 16, Covid-19-Related Rent Concessions 1 June 2020
Amendments to HKFRS 3, HKAS 16 and HKAS 37, Narrow-scope amendments 1 January 2022
Annual Improvements to HKFRSs 2018-2020 Cycle 1 January 2022
Amendments to HKAS 1, Classification of Liabilities as Current or Non-current 1 January 2023
HKFRS 17, Insurance contracts 1 January 2023
The Group is in the process of making an assessment of what the impact of these new issues or amendments is expected to be in the period of initial
application. So far, the Group considers that the adoption of them is unlikely to have a significant impact on the Group’s accounts.
49 Approval of the Consolidated Accounts

The consolidated accounts were approved by the Board on 11 March 2021.
270 MTR Corporation

GLOSSARY
Airport Express Train service provided between AsiaWorld-Expo Station and Hong Kong Station
Appointed Day or Merger Date 2 December 2007 when the Rail Merger was completed
Articles of Association The articles of association of the Company
Board The board of directors of the Company
Bus Feeder bus services operated in support of West Rail Line, East Rail Line and Light Rail
Company or MTR Corporation MTR Corporation Limited, a company which was incorporated in Hong Kong under the Companies
Ordinance on 26 April 2000
Overview
Companies Ordinance The Companies Ordinance (Chapter 622 of the Laws of Hong Kong or the predecessor Companies
Ordinance Chapter 32 of the Laws of Hong Kong (as the case may be))
Computershare Computershare Hong Kong Investor Services Limited, the share registrar of the Company
Cross-boundary Service or Journeys with the destination to/commencing from Lo Wu and Lok Ma Chau stations
Cross-boundary
Customer Service Pledge Annually published performance targets in accordance with the Operating Agreement

Director or Member of the Board A member of the Board
Domestic Service Collective name for Kwun Tong, Tsuen Wan, Island, South Island, Tung Chung, Tseung Kwan O, Disneyland
Resort, East Rail (excluding Cross-boundary Service), West Rail lines and Tuen Ma Line Phase 1
EBITDA Operating profit / loss before depreciation, amortisation, variable annual payment and share of profit or
loss of associates and joint venture
EBITDA Margin EBITDA as a percentage of revenue
EBIT Profit / loss before interest, finance charges and taxation and after variable annual payment
EBIT Margin EBIT as a percentage of revenue
Express Rail Link or Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, also known as Guangzhou-
High Speed Rail or HSR Shenzhen-Hong Kong High Speed Rail (Hong Kong Section) after the commencement of passenger
service on 23 September 2018
Fare Index A measure of customer satisfaction for the fares charged for Domestic and Cross-boundary services, HSR,
Airport Express, Light Rail and Bus based on satisfaction scores for different fare attributes weighted by the
corresponding importance rating from the customer research
FSI The Financial Secretary Incorporated, a corporation solely established under the Financial Secretary
Incorporation Ordinance (Chapter 1015 of the Laws of Hong Kong)
Government The Government of the Hong Kong SAR
Group The Company and its subsidiaries
HKSE or Stock Exchange The Stock Exchange of Hong Kong Limited
Heavy Rail Collective name for Domestic Service, Cross-boundary Service and Airport Express

GLOSSARY
Hong Kong or The Hong Kong Special Administrative Region of the People’s Republic of China
Hong Kong SAR or HKSAR
Intercity Service or Intercity Intercity through train services operated between Hong Kong and major cities in the Mainland of China
such as Beijing, Shanghai and Guangzhou
Interest Cover Operating profit before depreciation, amortisation and variable annual payment divided by gross interest
and finance charges before capitalisation, utilisation of government subsidy for Shenzhen Metro Line 4
operation and accreted interest on loan to a property developer
KCRC Kowloon-Canton Railway Corporation
KPMG KPMG, Certified Public Accountants, the independent auditor of the Company. KPMG is a Public Interest
Entity Auditor registered in accordance with the Financial Reporting Council Ordinance
Light Rail Light rail system serving North West New Territories
Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
MTR Ordinance The Mass Transit Railway Ordinance (Chapter 556 of the Laws of Hong Kong)
Net Debt-to-equity Ratio Loans and other obligations, bank overdrafts, short-term loans, obligations under service concession
and loan from holders of non-controlling interests net of cash, bank balances and deposits, and
investment in bank medium term notes in the consolidated statement of financial position as a
percentage of the total equity
Operating Agreement The agreement entered into by the Company and the Government on 30 June 2000 for the operation of
our rail services before the Rail Merger and a new agreement entered on 9 August 2007 for the operation
of all of our rail and bus passenger services after the Rail Merger
Ordinary Shares Ordinary shares in the capital of the Company
Rail Merger or Merger The merger of the rail operations of MTR Corporation and KCRC and the acquisition of certain property
interests by MTR Corporation from KCRC, full details of which are set out in the Rail Merger Circular.
The Rail Merger was completed on 2 December 2007
Rail Merger Ordinance The Rail Merger Ordinance (Ordinance No.11 of 2007)
Return on Average Equity Profit attributable to shareholders of the Company arising from underlying businesses as a percentage of
Attributable to Shareholders the average of the beginning and closing total equity attributable to shareholders of the Company of
of the Company arising from the period
Underlying Businesses
Service Concession A contract to provide services for a particular period which is awarded by a public sector entity to an
operator; in the context of concession projects in Hong Kong, service concession refers to the concession
granted or to be granted by KCRC and/or Government to the Company to operate, maintain and renew
certain railway lines under the Service Concession Agreement or a Supplemental Service Concession
Agreement, as more particularly described in the Rail Merger Circular; in the context of concession
projects in the Mainland of China and Overseas, service concession refers to the concession granted by the
government or relevant public sector entity to a subsidiary or associate of the Company to provide certain
specified services for a specified period under a negotiated concession agreement
Service Quality Index A measure of customer satisfaction for the services provided by Domestic and Cross-boundary services,
HSR, Airport Express, Light Rail and Bus based on satisfaction scores for different service attributes
(excluding fares) weighted by the corresponding importance rating from the customer research
272 MTR Corporation

Concept & Design: YELLOW CREATIVE (HK) LIMITED Printed by Magnum Offset Printing Co., Ltd.
SHAREHOLDER SERVICES
Any matters relating to your shareholding, such as transfer of shares,
change of name or address, and loss of share certificates should be
addressed in writing to the Registrar:
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre,
183 Queen’s Road East, Wan Chai, Hong Kong
Telephone: (852) 2862 8628 Facsimile: (852) 2529 6087
MTR Corporation Limited
MTR Headquarters Building, Telford Plaza
Kowloon Bay, Kowloon, Hong Kong
GPO Box 9916, Hong Kong
Telephone : (852) 2993 2111
Facsimile : (852) 2798 8822
www.mtr.com.hk

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Keep Cities

Despite the adverse circumstances, we were still able to achieve

Annual Report Sustainability

Overview Business Review and Analysis

Mainland of China and

Corporate Governance Financials and Other Information

Annual Report 2020 1

Business Review and Analysis

Annual Report 2020 3

New Signalling System and

1.3+ billion The Southside

Popcorn Took on Full Interest of

Business Review and Analysis

23,000 Residential Units and

to Enhance Customer Experience

Annual Report 2020 5

Business Review and Analysis

Annual Report 2020 7

Total EBIT (2)

Interest and finance charges (1,004) (859) 16.9

Business Review and Analysis

Annual Report 2020 9

Ngong Ping 360 T 44 a

Tung Chung East

PROPERTIES OWNED / DEVELOPED / MANAGED BY THE CORPORATION

Business Review and Analysis

MAINLAND OF CHINA AND MAINLAND OF CHINA AND MACAO

Dear Shareholders and other Stakeholders,

Business Review and Analysis

customer experience. New technology and smart mobility

Annual Report 2020 13

senior citizens to ensuring accessibility for the disabled. ENVIRONMENTAL, SOCIAL

Business Review and Analysis

Annual Report 2020 15

Dear Shareholders and other Stakeholders,

CORPORATE STRATEGY: “TRANSFORMING THE FUTURE”

Business Review and Analysis

Annual Report 2020 17

Business Review and Analysis

Annual Report 2020 19

n/m: not meaningful

Patronage and Revenue

Business Review and Analysis

Service Performance Enhancing the Customer Service Experience

Annual Report 2020 21

Business Review and Analysis

Annual Report 2020 23

Business Review and Analysis

Annual Report 2020 25

MAINLAND OF CHINA AND INTERNATIONAL BUSINESSES

Business Review and Analysis

Mainland of China and International Businesses

n/m: not meaningful

Annual Report 2020 27

Railway Businesses in the COVID-19 negatively impacted the occupancy rates

Business Review and Analysis

Annual Report 2020 29

Profit and Loss

Property Development Profit (Post-tax)