Annual Report 2013 Contents
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ANNUAL REPORT 2013 CONTENTS 01 Our Vision 69 Financial Statements 02 Global Footprint 70 Report of the Directors 04 Chairman’s Statement 76 Statement of Directors 11 Group Financial 77 Independent Auditors’ Report Highlights 78 Statements of Financial 14 Awards and Accolades Position 18 Corporate Information 80 Group Income Statement 19 Board of Directors 81 Group Comprehensive Income Statement 24 Key Management 82 Statements of Changes 31 Operations Review in Equity 45 Green Statement 84 Group Cash Flow Statement 46 Sustainability Report 87 Notes to the Financial 50 Investor Relations Statements 51 Corporate Governance 152 Share Price Movement Chart 60 Risk Management 153 Shareholding Statistics 63 Directories 155 Notice of Annual General 68 Financial Calendar Meeting Proxy Form OUR VISION OUR CORE VALUES To be the world’s land Results Orientation transport operator of choice. We will: • Set challenging and realistic goals • Focus on results • Identify and solve problems OUR STRATEGIES • Have a sense of urgency and ownership Integrity and Ethics FOR SUCCESS We will: Look Beyond the Horizon • Conduct our affairs in a manner consistent with the highest ethical and professional standards • Innovate and be receptive to • Engage in fair and honest business practices new ideas and opportunities • Show respect for each other, our customers, business partners, suppliers, shareholders, the authorities and the communities we • Solve problems in a prompt and effective manner operate in • Communicate in a factual, honest and prompt manner • Anticipate and embrace • Be open and transparent in our dealings change • Exhibit strong environmental stewardship Commitment Do the Right Things – Right We will: • Anticipate our customers’ needs and constantly upgrade ourselves • Never take our eyes off the ball to provide them with outstanding service • Foster an environment of trust by engaging the communities we • Deploy people and assets for serve value enhancement • Reward our shareholders by delivering steady and sustainable • Admit and learn from mistakes results through growth in our businesses • Care for our staff by providing a challenging environment with ample opportunities for growth and development. Build on staff capabilities through effective recruitment, training and career Grow Our Talent Base planning so as to develop their full potential. Promote teamwork, • Set the performance bar above initiative and creativity industry norms • Stay committed to the authorities by complying with regulatory requirements • Give credit where credit is due • Reward equitably 1 GLOBAL FOOTPRINT Aberdeen Glasgow Dublin Edinburgh Clifden Liverpool Galway Birmingham Cork London 31 CitiEs 7 CountriEs 21,042 EmployEEs 46,092 VEhiClEs 2 Jilin City Shenyang Beijing Yantai Nanjing Suzhou Shanghai Chongqing Chengdu Hengyang Guangzhou Nanning Ho Chi Minh City Puchong Kuala Lumpur Singapore Perth Sydney Canberra Queanbeyan Melbourne 3 Chairman’S Statement ground towards the end of the year. The Australian Dollar THE NEW NORMAL continued to weaken as growth slowed while the Chinese In my mind, the term, ‘New Normal’, first coined during Renminbi (RMB), which had strengthened, looks set to the 2008 global financial crisis, resurfaced in 2013 amid a be internationalised. All in, the currency situation remains landscape of vast political and economic changes. highly unpredictable. Politically, 2013 was fraught with uncertainty. Chemical For sure, a new normal that smacked of uncertainty, had weapons were reportedly employed in Syria, while the indeed taken root. United States underwent yet another round of internal political strife. Problems continued to plague Europe while relations between Japan and China worsened over the CORPORATE GOVERNANCE sovereignty of the Diaoyu/Senkaku Islands. Corporate Singapore and issues on Governance continued to evolve in 2013. Economically, the US economy was still unpredictable while the Euro Zone entered its fourth year of recession, with (i) Revised Code of Corporate Governance some members still registering very high unemployment The Revised Code of Corporate Governance was put rates. China’s economy, which has been the engine into effect in 2013. Our position on some of the major powering the global economy, started to slow while Japan issues has already been reflected in our 2012 Annual was trying hard to revive its economy with another form of Report. These are also included in this annual report Quantitative Easing commonly known as Abenomics. India under the section ‘Corporate Governance’. continued to struggle with its modernisation plans while most parts of Asean remained in the doldrums. Myanmar, (ii) The Companies Act which had hitherto been closed off from the global The Singapore Government is seeking further public economy, was slowly opening up its doors. views on the proposed amendments to the Companies Act with a Draft Companies (Amendment) Bill 2013 On the currency front, the US Dollar remained weak comprising 55 consultation questions. As at the end of for a large part of the year because of its Quantitative 2013, the Draft Bill had yet to reach Parliament. Easing activities, strengthening only towards the end of 2013 when an announcement was made on its tapering (iii) Board Diversity policy. Similarly, the Sterling Pound weakened against Diversity of board representation is becoming a the Singapore Dollar for most of 2013 and gained subject of public interest and debate. 4 Revenues at A Glance S$ 2,229.8m S$ 788.1m S$ 485.0m S$ 220.1m S$ 14.2m S$ 6.3m S$ 4.2m Singapore United Australia China Ireland Vietnam Malaysia Kingdom The 2013 Singapore Board Diversity Report indicated sales figures. This had also resulted in the company’s that some companies with meaningful female director share price diving by an even higher 50%. participation have enjoyed better returns on assets and returns on equity, although not necessarily (v) Audits on market value. The 2013 Report, which was We conducted 21 internal audits during the year, eight undertaken by the National University of Singapore of which were of our overseas units. The approach Business School’s Centre for Governance, Institutions is still risk-based. All our three listed companies were and Organisations and Board Agender, an arm of the covered. The overall outcome is that strong internal Singapore Council of Women’s Organisations, found control systems are in place within the Group. There that of the 677 Singapore Stock Exchange (SES) were no major issues of concern. listed companies studied, 7.9% of the total number of board directors were women compared to 7.3% in I also continued my practice of meeting the External 2012 and 6.9% in 2011. Auditors and Chairmen of all our three Audit and Risk Committees (ARC) without the presence of Meanwhile, the Singapore National Employers Management. This was conducted over and above the Federation and the Singapore Institute of Directors meetings which our three ARCs held with our External have embarked on a survey to address gender Auditors and Internal Auditor, also in the absence diversity issues. of Management. All parties were happy with the activities undertaken and the assistance provided by A Task Force, initiated by the Speaker of Parliament Management in the course of their work. when she was then the Minister of State for Social and Family Development, and comprising the former (vi) Rankings and Awards Chairman of the SES, its present Chief Executive We continued to be one of the 30 component stocks Officer (CEO) and three prominent women directors, of the Straits Times Index (STI). All our three listed is expected to publish its report on gender diversity companies ranked highly in the 2013 Business Times in senior management and its impact on corporate Governance and Transparency Index. Of the 663 performance and governance in 2014. companies covered, we ranked in the top 10% with ComfortDelGro Corporation Limited ranked 35th, (iv) Stock Exchange VICOM Ltd 52nd and SBS Transit Ltd 57th. In Singapore, where we are listed, there were still a few cases of insider trading with the culprits punished At the 2013 Singapore Corporate Awards, VICOM accordingly. In the investment scene, a shortselling won the Best Investor Relations Award (Bronze) for research house which cited huge negative cash flows companies with a market capitalisation of between of an SGX-listed company, resulted in a sharp fall of S$300 million and S$1 billion. At the 2013 Securities 20% of the market price of the company. This is the Investors Association of Singapore (SIAS) Investors’ first time that such an attack happened in Singapore. Choice Awards, ComfortDelGro won the “Most In yet another case, an American research house Transparent Company Award” in the Travel, Leisure accused another SGX-listed company of fabricating and Automobiles and Parts Category while SBS Transit 5 Chairman’S Statement was the Runner-Up in the “Singapore Corporate for the rollover of unused fare adjustments to the following Governance Award” in the Mid-Cap category. year. Of significance is the mandatory contribution by the operators to the Public Transport Fund. This has been set at between 20% and 50% of the increase in fare revenue. The SINGAPORE BUSINESS New Fare Formula is applicable for the period 2013 to 2017. Intensive efforts continued to be made by the Singapore Government to improve public land transport services. In the first year of implementation of the New Fare Formula, The rollout of the S$1.1 billion Bus Service Enhancement the Public Transport Council had increased the 2014 fares Programme (BSEP), which commenced in September 2012, by 3.2%, a figure lower than the average national wage rise intensified during the year with the introduction of new bus as indicated by the Minister for Transport. It also carried over routes and the addition of new buses to existing routes. the remaining 3.4% to the following year in accordance with the New Fare Formula. More details of these appear in SBS More bus lanes, full-day bus lanes and bus bays under Transit’s Annual Report.