8th Mar 2006 07:00
MTR Corporation Ltd08 March 2006 MTR Corporation Limited (Incorporated in Hong Kong with limited liability) (Stock code: 66) ANNOUNCEMENT OF AUDITED RESULTS FOR YEAR ENDED 31 DECEMBER 2005 HIGHLIGHTS ------------------------------------------------------------------------------|Financial || || ||• Revenue increased 9.6% to HK$9,153 million || || ||• Operating margin before depreciation (EBITDA margin) rose 1.5% points to || 55.7% || || ||• Property development profit of HK$6,145 million || || ||• Net profit attributable to equity shareholders, excluding investment || properties revaluation and net of deferred tax (profit from underlying || businesses), increased 36.7% to HK$6,140 million || || ||• Reported net profit, including investment properties revaluation, rose || 29.1% to HK$8,450 million || || ||• Gross debt/equity ratio at year-end improved to 40.4% from 49.1% at 2004 || year-end || || ||• Final dividend of HK$0.28 per share || |!Operational || || ||• Patronage increased 3.0% to 867 million || || ||• Strong revenue growth in station commercial, property rental and other || businesses || || ||• Package 1 and Package 2 of Tseung Kwan O Area 86 awarded in January 2005 || and January 2006 respectively || || ||• Disneyland Resort Line and AsiaWorld-Expo Station opened || || ||• Establishment of the public-private partnership company for Beijing Line || 4 project in January 2006 | ------------------------------------------------------------------------------ The Directors of MTR Corporation Limited ("the Company" or "MTRCL") are pleasedto announce the audited results of the Company and its subsidiaries ("the Group") for the year ended 31 December 2005 as follows: CONSOLIDATED PROFIT AND LOSS ACCOUNT ------------------------------------------------------------------------------------------------------------------------ Year ended 31 DecemberHK$ Million 2005 2004 (Restated)------------------------------------------------------------------------------------------------------------------------ Fare revenue 6,282 5,932Station commercial and other revenue 1,555 1,311Rental and management income 1,316 1,108 ----- ------Turnover 9,153 8,351 ----- ------Staff costs and related expenses (1,614) (1,546)Energy and utilities (541) (544)Operational rent and rates (92) (70)Stores and spares consumed (120) (128)Repairs and maintenance (496) (517)Railway support services (74) (72)Expenses relating to station commercial and other businesses (358) (315)Property ownership and management expenses (238) (207)Project study and business development expenses (142) (167)General and administration expenses (207) (167)Other expenses (170) (89) ----- ------Operating expenses before depreciation (4,052) (3,822) ----- ------Operating profit from railway and related operations before depreciation 5,101 4,529Profit on property developments 6,145 4,568 ----- ------Operating profit before depreciation 11,246 9,097Depreciation (2,682) (2,499) ----- ------Operating profit before interest and finance charges 8,564 6,598Interest and finance charges (1,361) (1,450)Change in fair value of investment properties 2,800 2,486Share of profits less losses of non-controlled subsidiaries and associates 9 39 ----- ------Profit before taxation 10,012 7,673Income tax (1,549) (1,130) ----- ------Profit for the year 8,463 6,543 ----- ------ ----- ------Attributable to:- Equity shareholders of the Company 8,450 6,543- Minority interests 13 - ----- ------ 8,463 6,543 ----- ------ ----- ------DividendsInterim dividend declared and paid during the year 764 750Final dividend proposed after the balance sheet date 1,535 1,509 ----- ------ 2,299 2,259 ----- ------ ----- ------Earnings per share:- Basic HK$1.55 HK$1.23- Diluted HK$1.55 HK$1.23 CONSOLIDATED BALANCE SHEET ------------------------------------------------------------------------------------------------------------------------HK$ Million As at As at 31 December 31 December 2005 2004 (Restated) ------------------------------------------------------------------------------------------------------------------------Assets Fixed assets - Investment properties 19,892 16,687- Other property, plant and equipment 83,383 83,005 ------ ------ 103,275 99,692 Railway construction in progress 1,006 962 Property development in progress 2,756 2,088 Deferred expenditure 281 243 Prepaid land lease payments 608 621 Interests in non-controlled subsidiaries 103 63 Deferred tax assets 19 15 Investments in securities 183 202 Staff housing loans 34 47 Properties held for sale 1,311 815 Derivative financial assets 234 - Stores and spares 248 248 Debtors, deposits and payments in advance 3,095 1,276 Amounts due from the Government and other related parties 154 133 Cash and cash equivalents 359 269 ------ ------ 113,666 106,674 ------ ------ Liabilities Bank overdrafts 14 11 Short-term loans 385 - Creditors, accrued charges and provisions 3,303 3,037 Current taxation 2 3 Contract retentions 170 240 Amounts due to related parties 17 1 Loans and obligations under finance leases 27,865 30,367 Derivative financial liabilities 307 - Deferred liabilities 112 109 Deferred income 3,584 4,638 Deferred tax liabilities 8,011 6,368 ------ ------ 43,770 44,774 ------ ------ Net assets 69,896 61,900 ------ ------ ------ ------ Equity Share capital, share premium and capital reserve 37,450 36,269 Other reserves 32,425 25,623 ------ ------ Total equity attributable to equity shareholders of the Company 69,875 61,892 Minority interests 21 8 ------ ------ Total equity 69,896 61,900 ------ ------ ------ ------ Notes:- 1. AUDITORS' REPORT The results for the year ended 31 December 2005 have been audited in accordancewith Hong Kong Standards on Auditing, issued by the Hong Kong Institute ofCertified Public Accountants ("HKICPA"), by KPMG whose unmodified audit reportis included in the annual report to be sent to shareholders. The results havealso been reviewed by the Group's Audit Committee. 2. ADOPTION OF NEW HONG KONG FINANCIAL REPORTING STANDARDS A The Group has adopted all Hong Kong Financial Reporting Standards ("HKFRSs") (which include all Hong Kong Accounting Standards ("HKASs"), Interpretations issued by the Standing Interpretations Committee of International Accounting Standards Board ("HK(SIC)-Ints") and Interpretations issued by the HKICPA ("HK-Ints")) issued up to 31 December 2005 pertinent to its operations. The applicable HKFRSs are set out below and the accounts for the year ended 31 December 2004 has been restated in accordance with the relevant requirements except for HKASs 32 and 39 which have been adopted prospectively as of 1 January 2005. HKAS 1 Presentation of Financial Statements HKAS 2 Inventories HKAS 7 Cash Flow Statements HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors HKAS 10 Events after the Balance Sheet Date HKAS 11 Construction Contracts HKAS 12 Income Taxes HKAS 14 Segment Reporting HKAS 16 Property, Plant and Equipment HKAS 17 Leases HKAS 18 Revenue HKAS 19 Employee Benefits HKAS 20 Accounting for Government Grants and Disclosure of Government Assistance HKAS 21 The Effects of Changes in Foreign Exchange Rates HKAS 23 Borrowing Costs HKAS 24 Related Party Disclosures HKAS 27 Consolidated and Separate Financial Statements HKAS 28 Investments in Associates HKAS 31 Investments in Joint Ventures HKAS 32 Financial Instruments: Disclosure and Presentation HKAS 33 Earnings Per Share HKAS 36 Impairment of Assets HKAS 37 Provisions, Contingent Liabilities and Contingent Assets HKAS 39 Financial Instruments: Recognition and Measurement HKAS 40 Investment Property HKFRS 2 Share-based Payment HKFRS 3 Business Combinations HK(SIC)-Int 15 Operating Leases - Incentives HK(SIC)-Int 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets HK(SIC)-Int 27 Evaluating the Substance of Transaction Involving the Legal Forms of a Lease HK-Int 2 The Appropriate Accounting Policies for Hotel Properties HK-Int 3 Revenue - Pre-completion Contracts for the Sale of Development Properties HK-Int 4 Leases - Determination of the Length of Lease Term in respect of Hong Kong Land Leases The adoption of the above new HKFRSs has the following impacts on the Group's accounting policies: (i) The adoption of HKASs 2, 7, 8, 10, 11, 12, 14, 16, 18, 19, 20, 21, 23, 27, 28, 31, 33, 36, 37, HKFRS 3, HK (SIC)-Ints 15, 27 and HK-Ints 3, 4 do not result in substantial changes to the Group's accounting policies. In summary: • HKASs 2, 8, 16, 27 and 28 affect certain disclosure of the accounts; and • HKASs 7, 10, 11, 12, 14, 18, 19, 20, 21, 23, 31, 33, 36, 37, HKFRS 3, HK(SIC)-Ints 15, 27 and HK-Ints 3, 4 do not have any impact as the Group's accounting policies already comply with those standards. (ii) The adoption of HKAS 1 has resulted in changes in presentation of shares of non-controlled subsidiaries' taxation and minority interests as follow: • in prior years, the Group's share of taxation of non-controlled subsidiaries accounted for using the equity method was included as part of the Group's income tax in the consolidated profit and loss account. With effect from 1 January 2005, the Group has changed the presentation and includes the share of taxation of non-controlled subsidiaries accounted for using the equity method in the respective shares of profit or loss reported in the consolidated profit and loss account before arriving at the Group's profit or loss before tax; and • in prior years, minority interests at the balance sheet date were presented in the consolidated balance sheet separately from liabilities and as deduction from net assets. Minority interests in the results of the Group for the year were also separately presented in the profit and loss account as a deduction before arriving at the profit attributable to equity shareholders (the equity shareholders of the Company). With effect from 1 January 2005, in order to comply with HKASs 1 and 27, the Group has changed its accounting policy relating to presentation of minority interests. Under the new policy, minority interests are presented as part of equity, separately from interests attributable to the equity shareholders of the Company. These changes in presentation have been applied retrospectively with comparatives restated. (iii) The adoption of HKAS 17 has resulted in a change in accounting policy relating to leasehold land. Leasehold land and buildings were previously accounted for as finance leases and were stated at cost or valuation less accumulated depreciation. In accordance with HKAS 17, a leasehold interest in land is accounted for as an operating lease where the fair value of the interest in any buildings situated on the leasehold land could be measured separately from the fair value of the leasehold interest in the land at the time the lease was first entered into by the Group, or taken over from the previous lessee, or at the date of construction of those buildings, if later. Pursuant to these requirements, the land premium paid for distinguishable leasehold land is accounted for as an operating lease and amortised over its unexpired lease term, whereas indistinguishable leasehold land and building is stated collectively at valuation less accumulated depreciation. The new accounting policies have been adopted retrospectively and the adjustments for each financial statement line item affected for 31 December 2005 and 2004 are set out in note 2B(i). (iv) The adoption of HKAS 24 resulted in an expanded definition of related parties to include post-employment benefit plans which are for the benefit of employees of the Group or of any entity that is a related party of the Group, in addition to entities that are under the significant influence of a related party that is an individual (i.e. key management personnel, significant shareholders and/or their close family members). This revised definition has not resulted in any material changes to the previously reported disclosures of related party transactions nor has it had any material effect on the disclosures made in the current period. (v) The adoption of HKASs 32 and 39 has resulted in a change in accounting policy for recognition, measurement and disclosure of financial instruments. Prior to 1 January 2005, derivatives of the Group were not recorded on the balance sheet based on the then prevailing accounting standards. In accordance with the provisions of HKAS 39, all derivatives have been recognised at their fair value on the balance sheet on 1 January 2005. Subject to meeting the requirements to qualify for hedge accounting, those underlying financial liabilities, such as loans that are designated as hedged items for fair value hedges, have been revalued at their fair values with corresponding adjustments made to their carrying amounts on the balance sheet. Depending on the type of hedging relationship, subsequent changes in fair value of derivatives and hedged items are to be charged to the profit and loss account or directly transferred to hedging reserve. The changes in accounting policies relating to accounting for financial instruments were adopted by way of opening balance adjustments to other reserves as at 1 January 2005. Comparative amounts have not been restated as the Company has adopted HKASs 32 and 39 prospectively. The adjustments for each financial statement line affected for the year ended 31 December 2005 are set out in note 2B(i). (vi) The adoption of HKAS 40 has resulted in a change in accounting policy for the Group's investment properties. In prior years, increases in the valuation of investment property were credited to the investment property revaluation reserve except when, on a portfolio basis, the reserve was insufficient to cover a deficit on the portfolio, or when a deficit previously recognised in the profit and loss account had reversed, or when an individual investment property was disposed of. In these limited circumstances, movements in the fair value were recognised in the profit and loss account. Following the adoption of HKAS 40, all changes in valuation of the investment property are to be recognised in the profit and loss account. The adoption of HK(SIC)-Int 21 has resulted in a change in accounting policy for the deferred tax treatment on the Group's investment properties. Prior to 1 January 2005, deferred tax on changes in fair value of investment properties arising from revaluation was not provided on the basis that the recovery of the carrying amount would be through sale and was calculated at the tax rate applicable on eventual sale, which in Hong Kong is nil. Following the adoption of HK(SIC)-Int 21, the deferred tax arising from revaluation of the investment properties is required to be valued on the basis that the recovery of the carrying amount of the properties would be through use and calculated at the profits tax rate and is charged to the profit and loss account. All the above changes in accounting policies relating to investment property have been adopted retrospectively. The adjustments for each financial statement line affected for 31 December 2005 and 2004 are set out in note 2B(i). (vii) The adoption of HKFRS 2 has resulted in a change in accounting policy for employee share options and other share-based payments. Prior to this, no amounts were recognised when employees were granted share options over shares in the Company. If the employees chose to exercise the options, the nominal amount of share capital and share premium were credited only to the extent of the option's exercise price receivable. Following the adoption of HKFRS 2: • the fair value of share options at grant date are amortised over the relevant vesting periods to the profit and loss account with corresponding increases recognised in an employee share-based capital reserve within equity; and • the fair value of cash-settled share-based payments are charged to profit and loss account, with corresponding amount recorded in liabilities. The new accounting policies have been applied retrospectively with comparatives restated, except that the Group has taken advantage of the transitional provisions set out in HKFRS 2, under which the new recognition and measurement policies have not been applied to all options granted to employees on or before 7 November 2002. The adjustments for each financial statement line affected for the years ended 31 December 2005 and 2004 are set out in note 2B(i). (viii) The introduction of HK-Int 2 has resulted in a change in accounting policy on depreciation of the Group's rails assets. In prior years, certain rails assets subject to continuous repair and maintenance had been carried at historical cost without depreciation as those assets were considered to be maintained in full working condition, while the related repair and maintenance and replacement cost of which was charged to the profit and loss account as revenue expenses. Following the introduction of HK-Int 2, depreciation is provided on such rails assets and charged to the profit and loss account while rail replacement cost is capitalised and depreciated. Comparative figures have not been adjusted on adoption of the new policies as the financial impact of a retrospective adjustment is not material. B(i) Pursuant to HKAS 8 (which outlines the disclosure requirements when a change in accounting policy has a material effect on the current and prior periods presented), the Group has retrospectively restated the opening balances of the retained profits as at 1 January 2004 and 2005 to take into account the effects of changes in the above accounting policies, except for HKASs 32 and 39 (note 2B(iii)) which are applied prospectively and HK-Int 2 (note 2B(iv)) as explained in notes 2A(v) and (viii) above. The previously reported net profit for the year ended 31 December 2004 has also been adjusted. These effects on the financial statements are summarised as follows: Consolidated profit and loss account------------------------------------------------------------------------------------------------------ Effects of adoptingHK$ Million HKAS HKAS HKFRS HK(SIC)- Total 17 40 2 Int 21 ------------------------------------------------------------------------------------------------------ Effects on periods prior to 2004 Decrease in depreciation 98 - - - 98 Increase in other expenses (98) - - - (98) Revaluation gain on investment properties - 6,682 - - 6,682 Increase in deferred tax - - - (1,169) (1,169) -------- ------ ----- ------- -------- Increase in retained profits - 6,682 - (1,169) 5,513 -------- ------ ----- ------- -------- Effects on year ended 31 December 2004 Decrease in depreciation 13 - - - 13 Increase in other expenses (13) - - - (13) Revaluation gain on investment properties - 2,486 - - 2,486 Increase in deferred tax - - - (435) (435) Increase in staff costs and related expenses for share - - (4) - (4)option schemes -------- ------ ----- ------- -------- Increase in profit for the year ended 31 December 2004* - 2,486 (4) (435) 2,047 -------- ------ ----- ------- -------- Increase in retained profits as at 31 December 2004 - 9,168 (4) (1,604) 7,560 -------- ------ ----- ------- -------- -------- ------ ----- ------- -------- * Restated profit for the year ended 31 December 2004 is HK$6,543 million, after taking into account the prior year adjustments of HK$2,047 million due to changes in accounting policies (note 3). Consolidated balance sheet ---------------------------------------------------------------------------------------------------- Effects of adoptingHK$ Million HKAS HKAS HKFRS HK(SIC)- Total 17 40 2 Int 21 ---------------------------------------------------------------------------------------------------- Effects as at 31 December 2004 Assets Decrease in other property, plant and equipment (621) - - - (621) Increase in prepaid land lease payments 621 - - - 621 -------- ------ ----- ------- -------- - - - - - -------- ------ ----- ------- -------- Liabilities Increase in creditors, accrued charges and provisions - - 3 - 3 Increase in deferred tax liabilities - - - 1,604 1,604 -------- ------ ----- ------- -------- - - 3 1,604 1,607 -------- ------ ----- ------- -------- Net assets - - (3) (1,604) (1,607) -------- ------ ----- ------- -------- -------- ------ ----- ------- -------- Equity Decrease in investment property revaluation reserve - (9,168) - - (9,168) Increase in employee share-based capital reserve - - 1 - 1 Increase/(decrease) in retained profits - 9,168 (4) (1,604) 7,560 -------- ------ ----- ------- -------- - - (3) (1,604) (1,607) -------- ------ ----- ------- -------- -------- ------ ----- ------- -------- (ii) The following tables provide estimates of the extent to which each of the line items in the consolidated profit and loss account, and the consolidated balance sheet for the year ended 31 December 2005 is higher or lower than it would have been had the previous policies still been applied in the year, where it is practicable to make such estimates. Consolidated profit and loss account --------------------------------------------------------------------------------------------------- Estimated effects of adoptingHK$ Million HKAS HKASs HKAS HKFRS HK(SIC)- Total 17 32 & 39 40 2 Int 21 --------------------------------------------------------------------------------------------------- Estimated effects on year ended 31 December 2005 Decrease in depreciation 13 - - - - 13 Increase in other expenses (13) (9) - - - (22) Revaluation gain on investment properties - - 2,800 - - 2,800 Increase in interest and finance charges - (6) - - - (6) Decrease/(increase) in deferred tax - 3 - 1 (490) (486) Increase in staff costs and related expenses for - - - (5) - (5)share option schemes -------- ------ ----- ------- ------- ------Increase in profit for the year ended 31 December - (12) 2,800 (4) (490) 2,2942005 -------- ------ ----- ------- ------- ------ -------- ------ ----- ------- ------- ------ Consolidated balance sheet----------------------------------------------------------------------------------------------------- Estimated effects of adoptingHK$ Million HKAS HKASs HKAS HKFRS HK(SIC)- Total 17 32 & 39 40 2 Int 21 -----------------------------------------------------------------------------------------------------Estimated effects as at 31 December 2005 Assets Decrease in other property, plant and (608) - - - - (608)equipmentDecrease in deferred expenditure - (109) - - - (109) Increase in prepaid land lease payments 608 - - - - 608 Increase in derivative financial assets - 234 - - - 234 -------- ------ ----- ------- ------- ------ - 125 - - - 125 -------- ------ ----- ------- ------- ------ Liabilities Increase in creditors, accrued charges and - - - 7 - 7provisionsDecrease in loans - (410) - - - (410) Increase in derivative financial liabilities - 307 - - - 307 Increase/(decrease) in deferred tax - 2 - (1) 2,094 2,095liabilities -------- ------ ----- ------- ------- ------ - (101) - 6 2,094 1,999 -------- ------ ----- ------- ------- ------ Net assets - 226 - (6) (2,094) (1,874) -------- ------ ----- ------- ------- ------ -------- ------ ----- ------- ------- ------ Equity Decrease in investment property revaluation - - (11,968) - - (11,968)reserveIncrease in hedging reserve - 24 - - - 24 Increase in employee share-based capital - - - 2 - 2reserveIncrease/(decrease) in retained profits - 202 11,968 (8) (2,094) 10,068 -------- ------ ------- ------- ------- ------ - 226 - (6) (2,094) (1,874) -------- ------ ------- ------- ------- ------ -------- ------ ------- ------- ------- ------ (iii) Following the prospective adoption of HKAS 39 from 1 January 2005, the following adjustments were made on the same date: • recognise derivatives at fair value on the balance sheet on 1 January 2005 and adjust the balance to retained profits, except for those qualified for effective cash flow hedges which are recognised in the hedging reserve directly; and • revalue those financial assets or financial liabilities that should be valued at fair value and those that should be valued at amortised cost and adjust the balance to retained profits at 1 January 2005. As a result, the balances of retained profits and hedging reserve on 1 January 2005 have been increased by HK$190 million (note 3) and decreased by HK$66 million respectively. (iv) With regard to HK-Int 2, the Company has conducted an assessment of the financial implications of this new interpretation to its accounts and concluded that the impact was not significant and thus no prior period adjustment was considered necessary. 3. RETAINED PROFITS The movements of the retained profits during the years ended 31 December 2005and 2004 were as follows: -------------------------------------------------------------------------------------------------------------HK$ Million-------------------------------------------------------------------------------------------------------------Balance as at 1 January 2005, as previously reported 17,771Prior period adjustments on effects of changes in accounting policies (note 2B(i)) 7,560 ------ 25,331Effect of prospective adoption of new accounting policy with respect to financial instruments 190(note 2B(iii)) ------Balance as at 1 January 2005, as restated 25,521Dividends approved/paid (2,273)Profit for the year 8,450 ------Balance as at 31 December 2005 31,698 ------ ------ -------------------------------------------------------------------------------------------------------------HK$ Million (Restated)------------------------------------------------------------------------------------------------------------- Balance as at 1 January 2004, as previously reported 15,506Prior period adjustments on effects of changes in accounting policies (note 2B(i)) 5,513 ------Balance as at 1 January 2004, as restated 21,019Dividends approved/paid (2,231) ------Profit for the year, as previously reported | 4,496 |Effects on changes in accounting policies (note 2B(i)) | 2,047 | ------ Profit for the year, as restated 6,543 ------ Balance as at 31 December 2004, as restated 25,331 ------ ------ 4. INCOME TAX Income tax in the consolidated profit and loss account represents: ------------------------------------------------------------------------------------------------------------- Year ended 31 DecemberHK$ Million 2005 2004 (Restated)------------------------------------------------------------------------------------------------------------- Current tax - overseas 1 4 -------- --------Deferred tax expense relating to the origination and reversal of temporarydifferences on:- change in fair value of investment properties 490 435- others 1,058 691 -------- -------- 1,548 1,126 -------- -------- 1,549 1,130 -------- -------- -------- -------- No provision for current Hong Kong Profits Tax has been made in the consolidatedprofit and loss account in respect of the Company and its subsidiaries, as theCompany and its subsidiaries either have substantial accumulated tax lossesbrought forward which are available for set off against current year'sassessable profits or have sustained tax losses for the year ended 31 December2005. Taxation for overseas subsidiaries is charged at the appropriate currentrates of taxation ruling in the relevant countries. Provision for deferred tax on temporary differences arising in Hong Kong iscalculated at Hong Kong Profits Tax rate at 17.5% (2004: 17.5%). 5. DIVIDEND The Board has recommended to pay a final dividend of HK$0.28 per share. TheCompany proposes that a scrip dividend option will be offered to allshareholders except shareholders with registered addresses in the United Statesof America or any of its territories or possessions. Subject to the approval ofthe shareholders at the forthcoming Annual General Meeting, the final dividendwill be distributed on or about 27 June 2006 to shareholders whose names appearon the Register of Members of the Company as at the close of business on 11April 2006. The Company's majority shareholder, The Financial SecretaryIncorporated, has agreed to elect to receive all or part of its entitlement todividends in the form of scrip to the extent necessary to ensure that a maximumof 50% of the total dividend paid by the Company will be in the form of cash. 6. EARNINGS PER SHARE The calculation of basic earnings per share is based on the profit for the yearended 31 December 2005 attributable to equity shareholders of HK$8,450 million(2004: HK$6,543 million, as restated) and the weighted average number ofordinary shares of 5,430,594,654 in issue during the year (2004: 5,331,253,996). The calculation of diluted earnings per share is based on the profit for theyear ended 31 December 2005 attributable to equity shareholders of HK$8,450million (2004: HK$6,543 million, as restated) and the weighted average number ofordinary shares of 5,436,752,536 in issue during the year (2004: 5,337,217,673)after adjusting for the number of dilutive potential ordinary shares under theemployee share option schemes. Both basic and diluted earnings per share would have been HK$1.13 (2004:HK$0.84, as restated) if the calculation is based on profit from underlyingbusinesses attributable to equity shareholders, i.e. excluding increase in fairvalue of investment properties net of related deferred tax. 7. SEGMENTAL INFORMATION ---------------------------------------------------------------------------------------------------------------- Revenue Contribution to profit Year ended 31 Year ended 31 December DecemberHK$ Million 2005 2004 2005 2004 (Restated)---------------------------------------------------------------------------------------------------------------- Railway operations 6,282 5,932 760 670 Station commercial and other businesses 1,555 1,311 1,071 879 ------ ------ ------ --------- 7,837 7,243 1,831 1,549 Property ownership and management 1,316 1,108 1,074 897 ------ ------ ------ --------- 9,153 8,351 2,905 2,446 ------ ------ ------ ------ Property developments 6,145 4,568 ------ --------- 9,050 7,014 Unallocated corporate expenses (1,847) (1,866) Change in fair value of investment properties 2,800 2,486 Share of profits less losses of non-controlled subsidiaries and 9 39associatesIncome tax (1,549) (1,130) ------ --------- 8,463 6,543 ------ --------- ------ --------- No geographical analysis is shown as substantially all the principal operatingactivities of the Group were carried out in Hong Kong throughout the reportingperiods. 8. DEBTORS AND CREDITORS A The Group's debtors, deposits and payments in advance amounted to HK$3,095 million (2004: HK$1,276 million), out of which HK$1,991 million (2004: HK$263 million) in respect of receivables from property developments which are not yet due, and HK$655 million (2004: HK$892 million) are amounts receivable from rental, advertising and telecommunication activities with due dates ranging from 7 to 50 days, swap interest receivable from debt portfolio management activities due in accordance with the respective terms of the agreements, and amounts receivable from consultancy services income due within 30 days. As of 31 December 2005, HK$185 million (2004: HK$202 million) have been overdue out of which HK$78 million (2004: HK$96 million) were overdue by more than 30 days. B Creditors, accrued charges and provisions amounted to HK$3,303 million (2004: HK$3,037 million, as restated), majority of which relate to capital project payments to be settled upon certification of work in progress, as well as swap interest payable under the terms of respective swap agreements for debt portfolio management purposes. The Group has no significant balances of trade creditors resulting from its provision of transportation and related services. 9. PURCHASE, SALE OR REDEMPTION OF OWN SECURITIES During the year ended 31 December 2005, neither the Company nor any of itssubsidiaries purchased, sold or redeemed any of its listed securities. 10. CHARGE ON GROUP ASSETS None of the Group's assets is charged or subject to any encumbrance. 11. ANNUAL GENERAL MEETING It is proposed that the Annual General Meeting of the Company will be held on 8June 2006. For details of the Annual General Meeting, please refer to the Noticeof Annual General Meeting which is expected to be published on or about 18 April2006. 12. CORPORATE GOVERNANCE The Company has complied throughout the year ended 31 December 2005 with theCode Provisions set out in the Code on Corporate Governance Practices containedin Appendix 14 of the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited (the "Stock Exchange") except that, with respectto Code Provision A.4.1, non-executive Directors of the Company are notappointed for a specific term but are subject (save for those appointed pursuantto Section 8 of the Mass Transit Railway Ordinance (Cap. 556 of the Laws of HongKong)) to retirement by rotation and re-election at the Company's annual generalmeetings in accordance with Articles 87 and 88 of the Company's Articles ofAssociation. Dr. Raymond Ch'ien Kuo-fung, a Member of the Board, was appointedas the non-executive Chairman of the Company with effect from 21 July 2003 for aterm of three years. 13. PUBLICATION OF THE RESULTS ANNOUNCEMENT AND ANNUAL REPORT This results announcement is published on the Company's website atwww.mtr.com.hk and the website of the Stock Exchange. The Annual Report willalso be available at the Company's and the Stock Exchange's websites in midApril 2006 and will be despatched to shareholders of the Company in mid April2006. KEY STATISTICS ----------------------------------------------------------------------------------------------------------------------- Year ended 31 December 2005 2004----------------------------------------------------------------------------------------------------------------------- Total passenger boardings- MTR Lines (in million) 858.0 833.6- Airport Express Line (in thousands) 8,493 8,015Average number of passengers (in thousands)- MTR Lines (weekday) 2,497 2,403- Airport Express Line (daily) 23.3 21.9Operating profit from railway and related operations before depreciation as a percentage of 55.7% 54.2%turnover MANAGEMENT REVIEW AND OUTLOOK The strategy of MTR Corporation is to create value by seeking growth both inHong Kong and overseas. I am pleased to report that MTR Corporation achievedstrong financial results in 2005 with contributions from all our businesses. Wewere also encouraged to see that our international expansion strategy has begunto take root and achieved a number of important milestones. For the year, MTRCorporation generated revenue of HK$9,153 million, 9.6% higher than previousyear, while net profit attributable to equity shareholders, excludingrevaluation of investment properties and net of deferred tax, rose 36.7% toHK$6,140 million. As I noted in last year's annual report, a number of newaccounting standards were introduced in Hong Kong effective 1 January 2005. Oneof these new standards required the revaluation of our investment properties tobe recognised as a profit or loss in the year. In 2005, investment propertyrevaluation yielded a profit of HK$2,800 million pre-tax (HK$2,310 million posttax). Including investment property revaluation, net profit attributable toequity shareholders of MTR Corporation has therefore increased by 29.1% toHK$8,450 million with earnings per share increasing 26.0% to HK$1.55. The Boardhas recommended a final dividend of HK$0.28 which when combined with the interimdividend of HK$0.14 brings the full year dividend to HK$0.42, which is the sameas last year. Operational Review In Hong Kong, MTR Corporation benefited from a buoyant economy and an activeproperty market. Hong Kong Railway Operations It is MTR Corporation's mission to provide world class rail services to thepeople of Hong Kong. The year 2005 drew to a close with record patronage forMTR. On 23 December 2005, 2.81 million passengers rode on MTR, the highestnumber of passenger trips the Company has ever recorded on a single, regular19-hour service day since we began operations 26 years ago. For the year as a whole, total patronage on the MTR Lines reached a record highof 858 million, an increase of 2.9% over 2004. It is pleasing to see that, underintense competition, MTR Corporation's share of the total franchised publictransport market has increased to 25.2% from 24.8% in 2004, and ourcross-harbour market share to 61.2% from 59.6% in 2004. Patronage on the Airport Express Line (AEL) also increased by 6.0% to 8.5million due to higher numbers of air passenger arrivals and departures at theHong Kong International Airport, boosting the average daily patronage to 23,300. For the sixth year in a row, our customer service performance surpassed both theGovernment's minimum requirement under the Operating Agreement, and our own morestringent Customer Service Pledges. During the year, train service delivery was99.9%, making MTR one of the most reliable rail systems in the world. In linewith our continuous improvement culture, MTR Corporation has taken on board allthe recommendations to enhance asset management contained in the Lloyd'sRegister Rail Report issued in February 2005, with 12 out of the 16recommendations completed within the year. Our network expanded in 2005 with the opening of the Disneyland Resort Line(DRL) in August. It connects Hong Kong Disneyland with the MTR network via theinterchange station at Sunny Bay on the Tung Chung Line. With its creativedesign, this theme train quickly became a favourite of Disneyland visitors. InDecember the AsiaWorld-Expo Station on AEL was opened, providing direct serviceto and from Hong Kong's newest and largest exhibition facility. The programme toretrofit platform screen doors in MTR underground stations was substantiallycompleted at the end of 2005, providing a better station environment for ourpassengers. Final completion of the programme is expected in the first quarterof 2006. The Company was again recognised for providing high quality service by a numberof external organisations. Locally, these included the Public Transport Categoryaward in East Week Magazine's first ever "Quality Living Award HK 2005", and forthe seventh year in a row, the "Top Service Award 2005" - Public Transport fromNext Magazine. We also won our first major award in China - the "2005 ChinaNational Quality Management Award" from the China Association for Quality. MTRCorporation was also named runner-up in the global "Robert W. Campbell Award"for demonstrating leadership and excellence in integrating safety, health andthe environment into operations. On a lighter note, one of the Company's 25thAnniversary TV Commercial "MTR - Metro News Version" received the "MostDelightful TV Commercial" award at the 11th Annual Most Popular TV CommercialAward Presentation organised by ATV in Hong Kong. I would like to pay tribute to those colleagues who kept Hong Kong moving in theweek of the World Trade Organisation Hong Kong Ministerial Conference inDecember 2005. Through their meticulous planning and skillful implementation,MTR Corporation was able to provide continuous service for the people of HongKong during that turbulent week. Station Commercial and Other Businesses Accelerating the growth of non-fare revenue is an important part of MTRCorporation's strategy. Our station commercial and other businesses registered18.6% revenue growth to HK$1,555 million during the year on the back of a strongeconomy, improved consumer spending and higher consultancy revenue. In advertising, we continued to enhance the attraction of our advertising venuesthrough format refinement and innovation. During the year, audio advertising,platform bunting in stations, lit-up billboards above station entrances andenlarged advertising cards in trains running on the MTR Lines were introduced inour system. MTR Corporation is the leader in outdoor advertising market in HongKong. In 2005, revenue from advertisement grew by 9.2% to HK$510 million. Intelecommunications, our entire network was upgraded to achieve full 3G coveragein October. Station retail rental income benefited from a combination ofincreased patronage, strong consumer spending, higher rentals and expandedretail floor space brought about by the renovation of stations. In 2005, wecompleted renovation of the retail zones at 20 stations, which allowing forrepossession of retail area of 1,690 square metres in Kowloon Station tofacilitate integration works with Union Square, added 353 net square metres ofcommercial space and a total of 99 new shops. Revenue from station retail rentalgrew by 15.4% to HK$344 million. In our external consultancy business, our strategy is to develop opportunitiesfor our overseas investment business utilising core capabilities of the Company.In 2005, this business continued to grow, with revenue reaching HK$211 million.In the Mainland of China, several new consulting and training contracts weresigned in cities including Beijing, Changchun, Shanghai, Tianjin, Guangzhou andZhuzhou for local as well as multinational organisations. The projectconsultancy work for Line 9 of Shanghai Rail Transit is progressing well. InHong Kong, we secured a renewal of the maintenance contract for the AutomatedPeople Mover system at the Hong Kong International Airport, and have begun workon the extension of the system to SkyPlaza and the SkyPier. Overseas, more than30 new projects were secured. Major milestones were reached on existing work inMacau, Taiwan, the UK and the Netherlands. New Hong Kong Projects With DRL and AsiaWorld-Expo Station successfully completed, our focus has turnedto "Ngong Ping 360" which will be a world class tourist attraction in Hong Kong.It comprises a cable car ride starting from Tung Chung and passing over some ofthe most beautiful natural scenery in Lantau Island to a cultural theme villagein Ngong Ping. Substantial progress was made during 2005 on this project,including work on the superstructures at the two terminals and two anglestations, installation of the electrical and mechanical equipment, as well ascompletion of all sections of rope pulling. Based on progress to date, "NgongPing 360" is expected to open in mid 2006. Public support remains extremely strong for the construction of the West IslandLine which will extend the current MTR Island Line service to the WesternDistrict of Hong Kong Island. After the Government's decision in June to requestthe Company to proceed with further planning and preparation of this extension,we have begun preliminary design work and are in active discussions with theGovernment on detailed scope, cost and implementation, as well as funding. Weshall work hard to commence the construction process as soon as final approvalsfrom the Government are obtained in order to provide an efficient and highquality mass transit service for the 200,000 people living and working in theWestern District. Also under discussion with the Government is the South Island Line (East), whichwill provide much improved transport services between Central and the Southernpart of Hong Kong Island and facilitate the rapid development of tourism andcommercial activities in the Southern District. We shall work with theGovernment to develop this concept further as part of the overall planningreview of tourism and commercial development in the Southern District of HongKong Island and the Ocean Park Re-development. Property Businesses Our property businesses benefited from a strong economy and positive sentimentin the property market, albeit successive increases in interest rates had amoderating effect on the market towards the latter part of the year. Taking advantage of favourable market conditions, we launched sales andpre-sales programmes for a number of residential developments along the AirportRailway and the Tseung Kwan O Line during the year. They included, along theAirport Railway, Harbour Green at Olympic Station, Carmel Cove at CaribbeanCoast, Le Bleu at Coastal Skyline and The Arch at Kowloon Station and, on theTseung Kwan O Line, The Grandiose (Area 55b), Central Heights (Area 57a) andPhase 1 of Metro Town (Tiu Keng Leng Station). All of them met with strongresponses. Following the successful tender of Tseung Kwan O Area 86 Package One in January,invitation for the tender of Tseung Kwan O Package Two took place in Decemberand the development right was awarded to Rich Asia Investments Limited, asubsidiary of Cheung Kong (Holdings) Limited, in January 2006. After evaluatingmarket condition and balancing reward and risk, in 2005 we decided to pay halfof the land premium in return for a larger share of development profit forPackage One, and in 2006, to extend a HK$4.0 billion interest free loan to thedeveloper in return for an increased sharing in kind of the Package Twodevelopment. Property development profit in 2005 was HK$6,145 million. It was recognisedmainly from projects along the Airport Railway, which comprised profit sharingfrom The Arch, deferred income recognition and sharing in kind, mainly from thereceipt of an additional retail shell area of 16,560 square metres gross atElements in Union Square. From Tseung Kwan O Line developments, profit wasprimarily recognised from sharing in kind from The Lane and further proceedsfrom Residence Oasis, both at Hang Hau Station, and sale of the small retailpodium at Central Heights (Area 57a). In our investment property business, rental income increased by 19.0% toHK$1,183 million. Occupancy levels at all our shopping centres were maintainedat 100%. The Lane, which opened in April, added 3,500 square metres gross ofretail space and was fully let from the first day of operation. Rental incomewas also boosted by the increased share of income from Telford Plaza II, as aresult of the commercial agreement with the other co-owner, beginning in January2005. International marketing and pre-letting of Elements, our new flagship mall atUnion Square, has met with a positive response, and pre-letting of The Edge, anew shopping centre at Tseung Kwan O Station, also saw good progress. Our 18office floors at Two International Finance Centre remained fully let in 2005. InBeijing, we signed a long-term head lease with a Beijing developer for theoperation and property management of Oriental Kenzo, a shopping centre of 31,000square metres gross in the city's Dong Cheng district, with target re-opening inlate 2006 after refurbishment. The property management business saw steady growth in revenue during the year,with units added from Caribbean Coast, Le Bleu and Residence Oasis. As at theend of 2005, the number of residential units under MTR Corporation's managementin Hong Kong rose to 54,358 flats, while commercial and office space increasedto 562,296 square metres. Overseas Growth MTR Corporation seeks profitable growth outside of Hong Kong by pursuing metroinvestment opportunities in the Mainland of China and "asset light" railwayoperating franchises in Europe. Mainland of China In the Mainland of China, a number of significant milestones were achieved in2005. In 2004, we had signed an Agreement in Principle with the Shenzhen MunicipalGovernment to build Phase 2 of the Shenzhen Metro Line 4 and to operate bothPhase 1 and Phase 2 of the line for 30 years. As part of the agreement, theCompany will be granted development rights for 2.9 million square metres grossfloor area. This replicates the "rail and property" business model which hasbeen successfully employed by the Company for the development of the Hong Kongmetro network. In May 2005, the Concession Agreement for this RMB6 billionproject was initialled between the Company and the Shenzhen MunicipalGovernment, and a feasibility study report was submitted for Central Governmentapproval to the National Development and Reform Commission (NDRC). This wasfollowed by detailed design and site preparation work, and subsequently inNovember by ground breaking for a trial section of Phase 2. A Memorandum ofUnderstanding (MOU) was signed with the Shenzhen Municipal Government in May,which covers co-operation on Shenzhen Metro Line 3, and discussions continue. We also made good progress on our first investment project in Beijing. InFebruary, the public-private partnership (PPP) company 49% owned by the Company,2% by Beijing Infrastructure Investment Co. Ltd. and 49% by Beijing CapitalGroup, initialled the Concession Agreement for investment, construction andoperation of Beijing Metro Line 4 for 30 years with the Beijing MunicipalGovernment. With a total investment of RMB15.3 billion, the project involvesinvestment of around RMB4.6 billion by the PPP company to finance the provisionof trains and related mechanical and electrical systems, and the balance by theBeijing Municipal Government for land acquisition and civil construction. InSeptember, NDRC granted approval for the project and in December, the JointVenture Agreement and Company Articles of Association were approved by theMinistry of Commerce, followed by issuance of a business license by the StateAdministration of Industries and Commerce in January 2006, thus completing allrequired registrations for the PPP company. Preparation work, including drawingup tenders for the provision of trains and electrical and mechanical systems, isnow well underway. Beijing Metro Line 4 is expected to commence operation in thesecond half of 2009. We have initialled the term sheet and loan agreements relating to thenon-recourse bank financings respectively for the Shenzhen and Beijing projects.These are denominated in RMB and provide a substantial portion of fixed ratefunding and a long maturity period, which will reduce the financial risk. A number of other cities in China have plans to construct metro systems underthe policy of using rail as the backbone of metropolitan transport. MTRCorporation is well positioned to take advantage of this very considerablebusiness opportunity. In May, we signed an MOU with Wuhan Urban ConstructionInvestment and Development Group Co. Ltd. and Wuhan Municipal DevelopmentPlanning Commission of the Wuhan Municipal Government, which covers co-operationopportunities for the construction and operation of the Wuhan metro network. Europe During 2005, we participated in the bidding for three train operatingfranchises, two in the UK in conjunction with local partners, and one inScandinavia. Although we did not succeed in these bids, we have gained valuableexperience from the process which will allow us to be a stronger contender forfuture opportunities. For 2006, we have identified and are likely to work on anumber of possibilities in the UK and Scandinavia. These include the SouthWestern Trains Franchise, for which the Company has been pre-qualified forbidding, and the North London Railway Franchise (formerly Silverlink MetroFranchise), both in the UK. Financial Review As noted in last year's Annual Report, our financial results in 2005 wereimpacted by a number of accounting changes, particularly that relating toinvestment property revaluation. In our operations, we achieved strong financialresults in all areas of business. Fare revenue for the MTR Lines rose by 5.6%from 2004 to HK$5,721 million while that for the AEL increased 8.9% to HK$561million. Non-fare revenue, including advertising, telecommunications, stationcommercial business, property rental and management income as well as incomefrom consultancy business, jumped 18.7% to HK$2,871 million. As a result, totalrevenue for the year reached HK$9,153 million, an increase of 9.6% from 2004. Despite the increased scale of business, the opening of DRL and theAsiaWorld-Expo Station and growth costs related to our overseas expansion, wewere successful in containing cost increases to a level below revenue growth.Operating costs excluding depreciation for the year amounted to HK$4,052million, 6.0% higher than last year. This helped boost operating profit beforedepreciation for the year to HK$5,101 million, a 12.6% increase from 2004 withoperating margin before depreciation improving to 55.7% from 54.2% in 2004. Benefiting from the improved property market sentiment in the year, profit fromproperty development was HK$6,145 million, an increase of 34.5% from 2004.Depreciation charges increased by 7.3% to HK$2,682 million mainly due tocompletion of the DRL, further platform screen door retrofitting, stationrenovation projects and the change in an accounting policy on rails. Netinterest expenses decreased by 6.1% to HK$1,361 million mainly as a result ofstrong cash flow and reduced borrowings. Excluding investment propertyrevaluation, MTR Corporation's profit after tax from underlying businesses wasHK$6,140 million or HK$1.13 per share, increases of 36.7% and 34.5% respectivelyfrom last year. After accounting for revaluation of investment properties,reported earnings attributable to equity shareholders of MTR Corporation for2005 were HK$8,450 million with earnings per share of HK$1.55, representingincreases of 29.1% and 26.0% respectively to reported earnings of last year asrestated for the accounting changes. MTR Corporation's cash flow was strong in the year with net inflows of HK$5,189million from our recurring businesses and HK$2,610 million from propertydevelopment. After payments for capital expenditure and interest, MTRCorporation recorded positive cash flow before dividends and loan repayment ofHK$2,823 million. Dividend payments in 2005 were HK$1,138 million and themajority of the remaining net cash flow of HK$1,685 million was used to repaydebt. Merger Discussions In September 2004, MTR Corporation and Kowloon-Canton Railway Corporationpresented a joint merger proposal to the Government which we believe adequatelyaddresses the parameters as set out by the Government. During the year wecontinued discussions with the Government on the terms of the possible merger,and the proposal is still under review by the Government. People The success of our business heavily depends on skilled and dedicated people andwe have continued to invest heavily in their training and development. Anindividualised and focused approach to leadership development was introduced toenhance the effectiveness of our managers. We launched three new core programmesto develop the consulting and business skills of our dedicated resource pool tosupport the Corporation's growth business. We also introduced a series of skillenhancement programmes for managers and supervisors focusing on effectivecommunication and management skills. In line with our core values to foster a culture of "Enterprising Spirit", aninnovative scheme, the Enterprising Pod, was launched in 2005 to encourage staffto generate and contribute their original ideas that lead to business growth. Asenior manager will perform the role of an "Idea Guardian Angel" to nurture eachidea so that it can be tried and tested in real life operation. The scheme hadreceived numerous submissions from staff at different levels. I take great pride in the ability and performance of the 6,513 staff of MTRCorporation. They are amongst the most capable and dedicated in Hong Kong and Ithank them for providing Hong Kong with one of the world's best mass transitsystems. The Company is committed to providing staff with a safe and attractiveworking environment, as well as training and development opportunities to helpthem fulfil their ambitions. In 2005, MTR Corporation provided a total of 36,689man-days of training to our workforce. In addition, a series of work/lifebalance seminars were held to raise staff awareness of the concept of "healthymind, healthy body", a lifestyle that would not only enhance the well-being ofour staff, but contribute to an even higher level of performance. Outlook Barring a pandemic or other major external shocks, we have a positive outlook onbusiness conditions in Hong Kong in 2006. However the rate of economic growth isanticipated to be slower than that of last year due to high oil prices andhigher interest rates. Our rail business should benefit from economic growth as well as the full yearimpact of the opening of DRL. Although economic activities may positively impactour station commercial and related businesses, as the one-off income fromtermination of a telecommunication agreement in 2005 will not be repeated in2006, the intense competition among mobile network operators is likely tocontinue as is the migration of 2G to 3G mobile telephone, ourtelecommunications revenue will be negatively impacted. In our property rentalbusiness, significant renovation will take place in Telford Plaza to improve itscompetitive strength. This renovation programme is anticipated to slow rentalrevenue growth in 2006 but will benefit us in later years. As a result, theoverall growth of non-fare revenue in 2006 is likely to be constrained. In our property development business, projects along both the Airport Railwayand Tseung Kwan O Line should contribute to profit. Along the Airport Railway,projects with deferred income will be recognised in accordance with constructionprogress and pre-sales; given current market conditions we expect the remainingdeferred income to be recognised largely over the next two years. In 2006, wealso expect to receive an additional retail shell area of 7,685 square metresgross at Elements. Along the Tseung Kwan O Line, we expect booking of profit ofdevelopments at The Grandiose (Area 55b) for which the Occupation Permit wasissued in January 2006 and, depending on the issuance of Occupation Permit, atPhase 1 of Metro Town (Tiu Keng Leng Station), comprising 1,676 units. It shouldbe noted that in accordance with our accounting policy, when profit isrecognised for Phase 1 of Metro Town, such recognition would be after deductingall costs for the whole development, including costs of Phase 2. Depending onsales progress, the remaining profit for the 390 units of development at TseungKwan O Town Centre Area 57a may also be booked in 2006. Finally, I would like to take the opportunity to thank all of my colleagues fortheir strong contribution to another successful year for the Company. By Order of the BoardC K ChowChief Executive Officer Hong Kong, 7 March 2006 The financial information relating to the financial year ended 31 December 2005set out above does not constitute the Group's statutory financial statements forthe year ended 31 December 2005, but is derived and represents an extract fromthose financial statements. Statutory financial statements for the year ended 31December 2005, which contain an unqualified auditor's report, will be deliveredto the Registrar of Companies. Certain statements contained in this Press Announcement may be viewed as "forward-looking statements" within the meaning of Section 27A of the U.S.Securities Act of 1933, as amended, and Section 21E of the U.S. SecuritiesExchange Act of 1934, as amended. Such forward-looking statements involve knownand unknown risks, uncertainties and other factors, which may cause the actualperformance, financial condition or results of operations of MTR CorporationLimited to be materially different from any future performance, financialcondition or results of operations implied by such forward-looking statements.Further information regarding these risks, uncertainties and other factors isincluded in the Annual Report on Form 20-F for the year ended 31 December 2004filed with the U.S. Securities and Exchange Commission (the "SEC") and in theCompany's other filings with the SEC. CLOSURE OF REGISTER OF MEMBERS The Register of Members of the Company will be closed from 3 April 2006 to 11April 2006 (both dates inclusive). In order to qualify for the final dividend,all transfers, accompanied by the relevant share certificates, must be lodgedwith the Company's Registrar, Computershare Hong Kong Investor Services Limitedat Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, HongKong for registration not later than 4 p.m. on 31 March 2006. It is expectedthat the final dividend will be paid on or about 27 June 2006. Members of the Board: Dr. Raymond Ch'ien Kuo-fung (Chairman)**, Chow Chung-kong(Chief Executive Officer), Professor Cheung Yau-kai*, David Gordon Eldon*,Christine Fang Meng-sang*, Edward Ho Sing-tin*, Lo Chung-hing*, T. BrianStevenson*, Frederick Ma Si-hang (Secretary for Financial Services and theTreasury)**, Secretary for the Environment, Transport and Works (Dr. Sarah LiaoSau-tung)** and Commissioner for Transport (Alan Wong Chi-kong)** Members of the Executive Directorate: Chow Chung-kong, Russell John Black,William Chan Fu-keung, Thomas Ho Hang-kwong, Lincoln Leong Kwok-kuen, FrancoisLung Ka-kui, Andrew McCusker and Leonard Bryan Turk * independent non-executive Directors ** non-executive Directors This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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