Annual Report 2020 Stock Code: 66
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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 Hong Kong Core We aim to be an 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 Focus Area aim of creating value for all 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 Annual Report 2020 3 3 STRATEGIC 5 ENABLERS PILLARS Transformation Management Office • Dedicated to enable and deliver the strategic transformation Overview • Engage MTR stakeholders for trust, commitment & results Organisation & Processes 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 Business Review and Analysis Technology • Utilise data and analytics for decisions and opportunities • Invest in focus areas & systems to improve effectiveness and efficiency Corporate Governance Finance • Redefine accountability and profit/ loss ownership of business units • Establish & track long-term financial goals for financial sustainability People • Build new capabilities for Financials and Other Information staff development • Work smarter with innovative methods and technology 2 MTR Corporation Annual Report 2020 3 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 Total Patronage in Hong Kong Package 5 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 Annual Report 2020 5 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 Business Review and Analysis Proceed with Technical Studies of Siu Ho Wan Depot Site Topside Property Development Over 23,000 Residential Units and 2 Shopping Malls Corporate Governance under Development Smart Mobility to Enhance Customer Experience COVID-19 Challenges and “New Normal” Financials and Other Information 4 MTR Corporation Annual Report 2020 5 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 Corporate Governance 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 Annual Report 2020 7 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 Hong Kong Power Brand Award, Diamond Award rd 3 Highest Donation Award for CARE Scheme HKIM Market Leadership Award 2019/2020 Overview th Hong Kong Institute of Marketing 4 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 Business Review and Analysis 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 Corporate Governance 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 Investor Relations GoldenBee Think Tank & China Sustainability Tribune Shenzhen MTR – Outstanding Foreign Enterprises in 2020 Bronze Award – General Category, Financials and Other Information 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