We have exceeded our financial targets through an effective combination of cost savings, productivity improvements and focused business development initiatives. As a result, our customers have enjoyed a cost saving of 2.5 per cent in real terms in the past year, and will continue to benefit during the next few years as we achieve further cost reductions and pass them onto our customers. The Trading Fund is well on track to achieving our planned 15 per cent productivity improvement by the year 2000.

The Trading Fund also achieved 95.6 per cent compliance of its service level agreement performance targets against a target of 95 per cent. The targets are a set of quantitative measurements to gauge the extent to which customers' needs are satisfied, under our service level agreements with them.

The biggest change during the year under review has been the reorganisation and regionalisation of operations, enabling our workforce to respond much faster to customers' requests for services and to improve efficiency. The exercise comprised several phases of complex organisational restructuring and staff re-deployment to different geographic locations, involving more than 1,000 employees directly and indirectly, in the way they operate on a daily basis. I am pleased to report that customers were quick to notice the positive changes as a result of this exercise. Response times are now much faster. Our staff are more motivated and willing to help customers in their more dynamic and positive role as business partners. We now tend to refer to new assignments as "additional business" and not as extra "workload" - a sure sign of the culture change in the Trading Fund.

During the first year of the Trading Fund operation, we introduced a number of initiatives that have enabled us to better understand our customers' perceptions and needs. These initiatives, such as the customer opinion survey, a dedicated client manager system, high-level customer seminars and customer service training for all employees, have now become on-going activities of the Trading Fund.

We recognise that communications have a vital role to play in any culture change. The Trading Fund has undertaken a review of its communications strategy and mechanisms. This was followed by a series of improvement programmes. I am happy to report that our staff, customers and business partners have responded well to the more pro-active, user-friendly and interactive communications approach that we have adopted.

Customers make huge investments in plant and equipment and it is imperative that we provide impartial advice, quality service and reliable support to ensure that customers gain the maximum long-term benefits from their investments. This is a service in which we excel. One of our advantages, compared with other E&M service providers in the market, is our unique ability to provide an objective assessment of customers' technical needs and to implement total solutions independent of commercial considerations or bias.

The Trading Fund now provides a number of additional services to customers such as indoor air quality checks, five-year periodic inspections, testing and certification of fixed electrical installations, energy efficiency programmes and fire services upgrades. These are services that the community wants, and we are proud to contribute to the well being of the community through these measures.

Looking at the year ahead, we shall continue to improve our responsiveness, engineering excellence and quality, while also seeking to achieve further cost reductions. Internally, the Trading Fund will continue to invest in ongoing skills and management training, upgrading information technology, and works and process improvements. We believe these efforts are vital in bringing us closer to the fulfillment of our mission to be "the most comprehensive and reliable provider of quality, cost effective electrical and mechanical services in Hong Kong."

The opening of the new airport at Chek Lap Kok in July 1998 heralds a new era for Hong Kong. Our staff now play a major part in the maintenance and technical support for E&M facilities at the new airport and Chek Lap Kok. We are proud of our role at one of the most advanced and sophisticated airports in the world.

The Trading Fund has made steady progress last year. One of our challenges in the years to come is to continue to expand our business despite increasing flexibility on the part of our customers to choose suppliers. Building on the momentum that has been established, I am confident of our competitiveness in the market.

On behalf of the Executive Board of the Trading Fund, I would like to express sincere thanks to my EMSTF colleagues at all levels for their dedication and hard work, and to our customers for their patronage. Without their support, we could not have made such a smooth and successful transition under the Trading Fund. We look forward to another year of progress and growth in 1999.