Annual Report 2015 1 CONTENTS 02 Global Footprint 73 Financial Statements 04 Chairman’s Statement 74 Directors’ Statement 11 Group Financial Highlights 81 Independent Auditors’ Report 14 Awards and Accolades 82 Statements of Financial Position 18 Corporate Information 84 Group Income Statement 19 Board of Directors 85 Group Comprehensive Income Statement 23 Key Management 86 Statements of Changes in Equity 30 Operations Review 88 Group Cash Flow Statement 45 Investor Relations 91 Notes to the Financial Statements 46 Corporate Governance 158 Share Price Movement Chart 65 Directors’ Particulars 159 Shareholding Statistics 68 Directories 161 Notice of Annual General Meeting 72 Financial Calendar Proxy Form 2 ComfortDelGro Corporation Limited GLOBAL FOOTPRINT SINGAPORE CHINA AUSTRALIA SINGAPORE BEIJING BALLARAT CHENGDU BLUE MOUNTAINS CHONGQING CANBERRA GUANGZHOU GEELONG JILIN CITY LAKE MACQUARIE NANJING MAITLAND NANNING MELBOURNE SHANGHAI NEWCASTLE SHENYANG PARRAMATTA SUZHOU PERTH TIANJIN QUEANBEYAN SYDNEY 7 COUNTRIES 36 CITIES Annual Report 2015 3 UNITED IRELAND VIETNAM MALAYSIA KINGDOM ABERDEEN CORK HO CHI MINH CITY KUALA LUMPUR BIRMINGHAM DUBLIN EDINBURGH GALWAY GLASGOW LIMERICK LIVERPOOL LONDON Galway • Dublin • Dublin Airport 46,648 VEHICLES 22,303 EMPLOYEES 4 ComfortDelGro Corporation Limited CHAIRMAN’S STATEMENT REVENUES AT A GLANCE SINGAPORE S$2,468.7M UNITED KINGDOM S$1,007.9M AUSTRALIA S$387.1M Unique Singapore Three significant events took place in Singapore in 2015. These were: CHINA (i) The passing of Founding Prime Minister Mr Lee Kuan Yew on 23 March; S$219.7M (ii) The 50th Anniversary of Singapore’s Independence on 9 August; and (iii) The General Parliamentary Elections on 11 September. IRELAND The respect, admiration and gratitude shown by Singaporeans for Mr Lee were unprecedented. S$16.2M Like many others, our three listed companies – ComfortDelGro Corporation Limited, SBS Transit Ltd and VICOM Ltd – have been direct beneficiaries of his exceptional leadership, as well as sound and realistic policies and practices. In commemoration, I have listed the following six land transport legacies of the late Mr Lee: VIETNAM (i) An organised bus system resulting in the formation of SINGAPORE BUS SERVICE, S$8.7M a predecessor to SBS Transit; (ii) An effective labour movement taxi co-operative resulting in the formation of COMFORT, a key component of ComfortDelGro Corporation; MALAYSIA (iii) An efficient mass rapid transit system resulting in the formation of MASS RAPID TRANSIT S$3.2M CORPORATION, a pioneer to our world-class rail network system; (iv) A clean air environment resulting in the formation of VICOM; (v) A continuous nation-wide PRODUCTIVITY MOVEMENT, one of the key factors in our economic progress and development; and (vi) A successful overseas SECOND WING, a crucial element of our Nation’s long-term goals for progress and prosperity. Annual Report 2015 5 The 50th Anniversary events celebrated percentage of 12.5% is well above the results and achievements of our hard the national average. work and successes. They also expressed appreciation to those who made their iii. Code of Corporate Governance pioneer contributions while serving The Governance and Transparency as reminders to present and future Index (GTI), devised by the generations that what Singapore had joint initiative of the Centre for achieved as a Nation was not to be taken Governance, Institutions and for granted. Organisations at NUS Business REMEMBERING School and CPA Australia, keeps track LEE KUAN YEW The results of the General Parliamentary of listed companies in Singapore Elections were significant as the People’s vis-à-vis The Code of Corporate Action Party was returned with a large Governance 2012. In 2015, it margin, thus ensuring stability in the disclosed that the average GTI score “We then decided that roll-out of land transport policies. The was 47.6 points. Our score of 68 is before the roads became most significant development during the well above the national average. chaotic and public year was the implementation of the new Bus Contracting Model. On Board matters, we have transport broke down stipulated that our non-executive completely, to clean up Global Events Directors will hold no more than the pirate taxis, improve 2015 was a challenging year by most six directorships. The Study showed the bus and taxi services. accounts. The slowdown of the global that only 24.7% of the companies economy, the threat posed by alternative surveyed have a policy of fixing As an act of faith in technologies, currency fluctuations, the number of directorships stock market shocks, frightening climatic their directors can assume. On the ability of the NTUC changes, the dramatic collapse of oil transparency and investor relations, and our workers to co- prices, drastic drops in commodity we have been conducting our Annual operate in a transport co- prices, uncertain bank interest General Meeting (AGM) by poll since operative, Comfort was movements, aggressive Islamic State 2011. So far, only 55.2% of listed launched to give the taxi scenes as well as Europe’s refugee crisis companies do so. On remuneration, are just some of the upheavals that we have tied this to performance drivers – many of whom occurred during the year. since our incorporation in 2003 – were formerly running and only 37.4% of all companies are pirate taxis and others Corporate Governance practising it now. At the same time, were being exploited by i. The Companies Act we have also been disclosing our Further to my Statement since dividend policy since incorporation taxi owners – a chance 2012 on the proposed massive – where only 21.8% of companies to own the taxis and the amendments to the Singapore’s do so. mini buses. Companies Act, I am pleased to advise that Parliament had adopted We continue to be committed This act of faith has the changes in October 2014. Full to upholding high standards of proved not misplaced.” implementation of the amendments corporate governance. took effect on 3 January 2016. iv. Audits – Mr Lee Kuan Yew, “Act of ii. Board Diversity As Group non-executive Chairman, faith in workers justified, The Diversity Action Committee, I continued my practice of meeting says Lee” (The Straits Times, established after the release of the with all the Chairmen of our three 13 March 1973) Report entitled “Gender Diversity Audit and Risk Committees (ARCs) on Boards: A Business Perspective”, together with the External Auditors which I reported in 2014, announced in the absence of Management. that the percentage of women The situation in this area continues directors in listed companies in 2015 to remain good with Management had increased by 0.7 percentage extending full cooperation and point from 8.8% to 9.5%. Our assistance to the Auditors. This is 6 ComfortDelGro Corporation Limited CHAIRMAN’S STATEMENT in addition to each of the ARCs having their own separate Most Transparent Company Award in the Travel, Leisure meetings with the External Auditors, also in the absence & Automobiles & Parts category. In 2014, we were the of Management. runner-up. Our listed subsidiary, VICOM, won the Best Investor Relations Award (Bronze) for companies with Our Internal Audit Unit conducted 31 assignments during S$300 million to S$1 billion in market capitalisation at the course of the year with 16 confined to overseas entities the Singapore Corporate Awards 2015. in the United Kingdom (UK), Ireland and China. No major issues were raised. These internal audits were confined Profile-wise, our Shareholders continue to come from to issues of corporate governance, risk management and Singapore (29%), United States of America (USA) (29%) Information Technology (IT) security. and the UK (13%). The top 20 Shareholders own 46.1% of the total shareholdings. I am also pleased to report that PricewaterhouseCoopers LLP had completed its review of our quality assurance in We also received letters from institutional investors internal audits in accordance with the Institute of Internal offering their views on some aspects of corporate Auditors standards and had concluded that our Internal governance. Of particular interest is one substantial Audit Unit generally conforms with the standards. Shareholder reiterating its stand to resist short-term market pressures of returning excessive amounts of capital v. Investor Relations and Awards to investors through record levels of dividends and share Our Investor Relations Unit continued to have an active buy-backs. We share this sentiment. engaging programme with investors and research analysts. Regular meetings were held with the media and the ComfortDelGro continued to be one of the 30 stocks of analysts. In addition, we also participated in 10 investor the Straits Times Index (STI). At the end of December conferences and non-deal road shows in Singapore, Kuala 2015, ComfortDelGro had a market capitalisation of Lumpur, Hong Kong and Tokyo in 2015. Close to 140 S$6.56 billion, almost four times that of our initial reports were produced by 13 research houses on our Group. S$1.67 billion in 2003. This is 18% higher than that of I consider that we have a meaningful and acceptable level S$5.56 billion at the end of December 2014. The fact that of communication with the investing community and there we were able to exceed S$6 billion in 2015, just a year after is an adequate coverage of our activities by the analysts reaching S$5 billion in 2014, speaks well of the investors’ and fund managers. confidence in the stock. In fact, we have increased our market capitalisation by about S$1 billion every year Our investment community is fully kept abreast of Group since 2011. We were ranked 25th in terms of market developments and progress through our websites and capitalisation in 2015 – a vast improvement over our Singapore Exchange (SGX) announcements. Dates of our 33rd position in 2014. result announcements are also released early.