04 ComfortDelGro Corporation Limited INTRODUCTION now politicised. We can expect further CHAIRMAN’S fallout from the approaches adopted STATEMENT The major disruptions to our business by the two leading powers in their 2017 environment that I wrote about in my last “America First” and 2015 “Made in China Statement in 2017 continued into 2018. In 2025” policies. The uncertainty of Brexit, fact, these have been enhanced and are coming close to its deadline of 29 March now firmly entrenched, becoming part 2019, is also another area of concern for and parcel of the New Normal. us. Currency fluctuations in our major overseas locations in respect of Sterling I have also highlighted to Senior Pound (GBP), Australian Dollar (AUD) and Management in my annual January Chinese Renminbi (RMB) are a constant 2019 address to them that they need area of worry. to pay close attention to the key issues of politics; Artificial Intelligence (AI) and LAND TRANSPORT Information Technology (IT), which are major emphases of the Fourth Industrial Electric vehicles or EVs continued to S$3,805.2 million Revolution; the emergence of new vehicle be under active discussion, review and manufacturing modes; and of course, development in 2018. We had a good Total Revenue matters a"ecting our Shareholders. I have discussion with the Smart Nation and also highlighted important changes in Digital Government O'ce, a unit of the directorships which will have an impact Prime Minister’s O'ce, Singapore, on the on the Group as a whole. My message is future of autonomous vehicles or AVs. this: Urgent attempts must be made to We also noted that Dyson Ltd, a British know, understand and appreciate these firm, had announced its intention to set disruptions and concrete steps must be up a plant in Singapore to manufacture 2018 would “go taken to tackle them appropriately and EVs and SP Group planned to roll out swiftly. 1,000 charging stations by 2020. At the down in the history same time, AVs will be put on trial in new The severe trade tensions between the housing estates in the future as we move of the Group as an United States of America (USA) and towards a car-lite society. the People’s Republic of China (PRC) Australian Year. are weighing down on global business Management continued to keep close tabs sentiment and have serious implications on the subject with visits to EV production “ on world economic growth. Trade is plants (BYD Auto Co., Ltd and Zhengzhou Lim Jit Poh Chairman Annual Report 2018 05 Yutong Bus Co., Ltd) in China as well as one In the Annual Public Transport Customer CORPORATE GOVERNANCE to EasyMile Pte Ltd in Toulouse, France, Satisfaction Survey, released by the Public on AVs in 2018. These followed a visit in Transport Council (PTC), the overall (i) Code of Corporate 2017 to the Volvo facility in Sweden. satisfaction score for bus services remained at 7.9, similar to the previous year. However, Governance (‘Code’) The Group adopted EVs in different the percentage of respondents satisfied The revised Code or Code 2018 was geographies and vehicle types. In London, with the services increased to 98.0%, up announced in August 2018. As expected, Metroline Limited now runs normal from the 96.7% in the previous year. The the significant changes touch on shifting scheduled routes with EVs while in overall satisfaction score for rail was 7.9, some of the guidance points from “Comply Singapore, the Land Transport Authority an improvement from 7.5 in the previous or Explain” to “Listing Rules”. In other (LTA) has awarded contracts to buy year. The percentage of respondents words, these are now mandatory. I see electric buses while trialling some routes satisfied with the services saw an increase no di'culty in us adopting them. with hybrid (diesel/electric) buses. The from 91.8% to 97.8%. Notably, our rail Group is also testing a few electric taxis overall satisfaction score compared with The other major issue is the Nine-Year in Singapore. the industry’s was a tad higher at 8.0 Rule for independent directors in which and with the percentage of respondents I think we should also have no di'culty Management has also announced its e"orts in satisfied with the services at 98.3%. The in complying. partnering EasyMile and Inchcape Singapore Mean Kilometre Between Failure (MKBF) to run an autonomous shuttle bus service set at a high level from 300,000 train-km on a 1.6km route in the National University in 2017 to 1 million train-km by 2020 has of Singapore’s Kent Ridge Campus. This been reached very satisfactorily in 2018. is our third experiment in AVs, following Our two lines have, in fact, done very two under SBS Transit Ltd in Sentosa and well, with the North East Line (NEL) and Revenue Jurong Island with ST Engineering. Our the Downtown Line ranking as number intention for these trials is to gain some one and two respectively with figures of At A Glance experience in managing AVs. 1.37 million and 0.93 million respectively. Singapore Our intended purchase of Uber Technologies Transport fares, as announced by the PTC, S$2,241.4 million Inc’s private hire business was aborted increased by 4.3% from 29 December 2018 following a ruling by the Competition after reductions in the last three years. United Kingdom and Consumer Commission of Singapore This is a result of the new fare formula for on the Grab and Uber merger. Grab is the 2018-2022 Fare Review Period. The S$867.0 million now the main player in the ride hailing new formula made revisions to the wage sector. Hopefully, the entrance of GOJEK and price index weightages, productivity Australia will not bring in another round of fierce extraction factor, and introduced a new competition witnessed earlier between Grab component called Network Capacity Factor S$503.4 million and Uber. As mentioned in my Statement to track capacity provision in relation to last year, the taxi and private hire business passenger demand. The new formula is China environment has reached some degree more reflective of changes in operating S$163.5 million of stability following some rulings by the costs and network capacity. Authorities on the latter to partially level the playing field. It is hoped that with the Other attempts to improve delivery services Ireland recent public consultation sought by the in reliability, convenience and security S$24.0 million LTA on proposed changes to regulations for continued to be rolled out by the LTA and the point-for-point transport sector, these the operators. These include free Wi-Fi on moves would further level the business buses and security checks at stations – Vietnam conditions. We shall accordingly submit much like those already in place in airports. S$3.3 million our suggestions. The LTA also actively solicited views and gathered feedback from the public and Malaysia industry stakeholders on its 2040 Land Transport Master Plan. S$2.6 million 06 ComfortDelGro Corporation Limited CHAIRMAN’S STATEMENT ComfortDelGro Corporation Limited and three years with assistance from external meetings, our percentages are extremely our listed subsidiary, VICOM Ltd, achieved consultants. We have also appointed a new high with ComfortDelGro at 97%, SBS Transit high scores of 100 points each in the Director in January 2019 with expertise at 98% and VICOM at 100%. On gender Annual Governance and Transparency in sustainability. We therefore place the diversity, it is discovered that more than Index Survey 2018 while the other listed subject as a top priority in our business 50% of the boards continue not to have subsidiary, SBS Transit, had a score of 84. strategy. any female representation, 34.9% have one These scores were well above the average female director while 14.4% have two or of 56.3. All the three companies were still A new securities settlement and depository more women directors. ComfortDelGro in the top 7% of the 589 listed entities framework was introduced on 10 December now has three female Directors and SBS in 2018. For ComfortDelGro, it was an 2018 by the SGX in which settlement cycles Transit and VICOM have two each. Soon, improvement from 25th to 17th position were reduced from three to two trading they too will have a third. while VICOM moved from 16th to 17th. days. Companies with good corporate For SBS Transit, it slipped from 32nd to governance practices and compliance (v) Corporate Awards the 40th spot. The marked improvement track records can now enjoy fast-tracked in ComfortDelGro was probably due to approval for certain corporate actions In the Singapore Corporate Awards 2018, our e"orts in initiating director renewals such as prioritised clearance for selected ComfortDelGro won the Bronze Award and disclosing remuneration on a named corporate-action submissions (circulars, for Best Investor Relations in the Big-Cap basis although these were also done by request for waiver and applications for share Category. SBS Transit and VICOM. placement). All our three listed companies qualified under the programme. At the 19th SIAS Investors’ Choice Awards In the ASEAN Corporate Governance 2018, VICOM was the Winner of the Scorecard for rankings among 100 largest (iii) Diversity Action Singapore Corporate Governance Award Singapore companies, ComfortDelGro Committee (DAC) for the Mid-Cap Category as well as Runner- ranked 18th (2017: 25th). SBS Transit and Up in the Most Transparent Company VICOM, which were not even ranked in Our female director participation rate in Award in the Services Category. 2017, came in the 29th and 32nd positions our three listed companies is high.