Mission Statement. Our Vision. Our Mission. Our Commitment

Transcription

1 Comfort Group Ltd Annual Report 2002 Mission Statement Our Vision We envision the Comfort Group of Companies as a homegrown conglomerate playing a significant role in land transport-related business locally and regionally. Our Mission We aim to be the leading provider of land transport-related services to the public. Our Commitment To realise our vision and mission, we are committed to: Providing our customers and clients with quality products and services to meet their expectations. Endeavouring to achieve for our shareholders a reasonable return on their investments. Achieving a mutually beneficial business relationship with our partners, principals, suppliers, distributors and other business associates. Attracting and retaining able and talented employees to grow with the Group. Working synergistically with the Government and the trade union movement to help develop an efficient land transport service. Assisting in community welfare projects whenever our resources allow. Protecting the physical environment in which we operate. 1

2 Chairman s Statement The Group s turnover increased by $39.9 million to $454.5 million, a rise of 9.6%. 2

3 Comfort Group Ltd Annual Report 2002 Chairman s Statement I am very pleased to write this statement. It is yet another record year for the Comfort Group despite the recession and the consequential difficulties faced by so many organisations. It is commendable that the Group has excelled and continued to achieve good profit despite the tough economic environment. FINANCIAL PERFORMANCE Since our initial public listing in 1994, the year under review is the best year of our performance. For the third year in succession, the Group achieved high growth rates in both its turnover and profitability. The turnover touched a record figure close to $455 million. This is about 10% above that of the last financial year. Operating profit before depreciation, interest on borrowings, tax and minority interests almost hit the $200 million mark with a handsome figure of $197 million, approximately 9% in excess of the last financial year. Taking into account the significant amount of depreciation, interest on borrowings, tax and minority interests, the sum that is attributable to shareholders stands at $68 million. This is a 15% increase over the preceding year. Indeed, these are remarkable results for our business which is perceived to be limited in growth by the uninformed. Direct taxi service contributed about 73% of the Group s turnover but only 64% of the operating profit before interest and tax. The non-direct taxi service businesses such as vehicle repairs and maintenance, diesel sales, vehicle inspections and driver education contributed about 27% of the turnover but a higher 36% of the operating profit before interest and tax. We expect the contributions from these non-direct taxi businesses to increase in future years. For the year under review earnings per share of par value 25 cents is 8.45 cents compared to 7.35 cents a year ago. This is a 15% increase. Net tangible asset per share reached 58 cents, about 10% improvement over the last financial year. The shareholders funds of $481 million is about 12% higher than the position a year ago. What is striking, however, is that the return on the average shareholders funds came close to 15%. This is, by no means, an easy feat, in today s low interest rate environment. DIVIDEND Your Board is very conscious of its healthy cash status. Last year, I said that we would distribute at least 30% of the profit after tax and minority interests for dividend payment and I stressed that this policy was sustainable. I am very pleased to announce that your Board is more confident than ever and has decided to increase this percentage to 40%. Accordingly, a final gross dividend of 3 cents per share is recommended for your approval at the forthcoming Annual General Meeting. Together with the interim gross dividend of cents per share paid in January 2002, the total expected dividend for the entire year would amount to cents per share, representing 17.5% of the par value of each share. This is a vast improvement of 25% over the preceding year of 3.5 cents per share. In years when exceptional profits are made, special dividends would be declared. I am disclosing this fact earlier so that your Board is committed to sharing the fruits of its labour with the shareholders. 3

4 Chairman s Statement BUSINESS REVIEW Taxi Operations The excellent results achieved by our taxi services are very commendable despite the fact that our taxi rental was not increased during the year under review. However, we were granted 200 additional new taxi licences by the authorities in October 2001, six months after the financial year had begun. We could only release 60 taxis by the end of the financial year as there is a gap in the timing between the availability of the licences and the purchase of the new vehicles. The remaining 140 taxi licences were fully used by May One hundred of the new taxi licences were granted to Comfort Transportation Pte Ltd while the other 100 were allocated to our Yellow-Top Cab Pte Ltd. On top of that, our Yellow-Top fleet increased by another 53 taxis, from the purchase of taxi licences in the open market. Our total fleet today stands at 11,330 with 10,100 in the stylish blue colour and 1,230 in the yellow and navy blue code. In terms of proportion by size, close to 60% of our taxis are of large capacity, a trend that is fast emerging from the popular demand of the customers. This is an increase of 14% point compared to the position a year ago. The target of achieving 80% large taxis in 2004 remains attainable. Providing quality, prompt, reliable, consistent and safe taxi service is our hallmark. Our Comfort CabLink with two call centres running 24-hours non-stop maintained the record 8.1 million bookings achieved in the previous financial year, despite the economic downturn. We were able to attain this as more of our taxis were equipped with the taxi booking facility. I am pleased to say that the success rate is also higher at 85%. The number of bookings from the various automated means of cab bookings continued to climb, with some 640,000 successful bookings made through the automated means, a rise of 6.4%. A new 3-step booking called FastCall was introduced in July 2001, followed by the launch of *Send-A-Taxi at the start of the new financial year. Both of these automated modes of taxi booking are able to track the users location and we expect them to gain popularity amongst taxi users. For regular users who depend on taxi as a primary means of transportation, prior booking is emerging to be the norm. Our personalised land transport delivery system is different from the mass rapid rail and scheduled bus services. This has to be the case and the price mechanism would continue to be employed to differentiate the usage. In restaurant terms, we are, in fact, providing an a la carte service whereas the MRT and scheduled buses are providing buffet services. The a la carte service must rightly be more expensive than the buffet service as it is tailored to the specific needs and preference of the customers. Other than having measures driven by technological advancement and innovation, the human aspect of our delivery system was also given greater management attention. Regular training and re-training programmes, together with the carrot and stick approach to our taxi drivers, helped to ensure that the human aspect of the service is further enhanced and improved. In financial terms, turnover from the taxi services went up to $330 million, a modest 6.3% increase over the last financial year. But operating profit before interests and tax but after depreciation increased by close to 12% to about $56 million. These facts speak well of the internal efficiency achieved and the excellent measures undertaken by the Management. 4

5 Comfort Group Ltd Annual Report 2002 Chairman s Statement Bus Operations The Group has all along been a small bus operator with its fleet having small capacity vehicles compared to the scheduled buses. The Board, however, believes that there is a potential market for unscheduled buses for workers, organisations and schoolchildren. Presently, the market is sizeable but it has too many small operators. With this in mind and after our initial acquisitions of bus fleets from private bus companies in the last financial year, the Group made further inroads with more acquisitions during the period under review. Our fleet has expanded from 187 buses to 288 by March A target of growing our fleet to 500 buses is planned in the coming year. By then, the operation would achieve an economy of scale. As it is, we are already the largest single-owner private bus operator. For accountability, we have incorporated a whollyowned subsidiary, Comfort Bus Pte Ltd, to undertake this business. Based on our existing policy of a 10-year depreciation against a statutory life of 20 years for private buses, this sector turned in a small loss of $1.1 million even though its turnover had increased threefold to $12.2 million from $4.6 million. We are, however, confident, that as we review our depreciation policy and expand our fleet and hence having a larger share of the market, our performance should improve. Vehicle Repairs & Maintenance & Diesel Sales To put our taxi and bus fleets on the roads efficiently and in roadworthy conditions, we service, maintain and repair our vehicles on a planned and regular basis. We also contract to outside parties a small portion of our vehicles. In addition, we also undertake third party repairs and servicing jobs, spare parts sales and windscreen replacements for private vehicles in our five workshops scattered around the island. Parallel to our bus fleet expansion, the servicing and maintenance of our buses are also part of the growth in this business sector. Diesel sales to our taxi and bus drivers is another unique feature of our overall management system. Through these means, we are able to obtain an economy of scale in the sale of diesel to our taxi and bus drivers. With seven centres located in convenient spots all over the island, we sold 79.2 million litres of diesel to our taxi drivers during the year under review. This is 30% higher than last year s figure. Though fast becoming a habit, we provided only 50% of our taxi fleet consumption. There is still a vast scope for growth in this sector. The consumption of diesel by our bus fleet amounting to about 3 million litres a year had yet to be fully met. Presently, we supply only 43% of the requirements. This is without considering the bus fleet expansion programme. Turnover for these combined vehicle repairs & maintenance & diesel sales sectors reached $111 million during the period under review. This is 14% better than last year. In terms of operating profit, it is about $21 million, which is 13% higher than the preceding year and contributes about 24% of the Group s operating profit before interest and tax. 5

6 Chairman s Statement Comfort Vehicle Advertisements In an attempt to accurately reflect its performance, vehicle advertisement sales assumed a new dimension with the incorporation of a wholly-owned subsidiary, Comfort Ads Pte Ltd, towards the end of the financial year in February Nevertheless, during the period under review, this business sector suffered some effects of the recession and generated a lower turnover of $6.1 million and an operating profit of $1.2 million, compared to the respective figures of $7 million and $1.8 million in the preceding year. However, it is anticipated that with the recovery of the economy and an increase in large capacity taxis together with expansion in our bus fleet, this sector has potential for further growth. Vehicle Inspections VICOM Ltd, our listed subsidiary, also had a good year. Its turnover increased by 37% to $14.7 million. Its operating profit before interest and tax also went up by 41% to $6.9 million. A full report of VICOM Group s achievements is contained in its own Annual Report. Learner Driver Education Comfort Driving School continued to post growth in its turnover, up to $13.6 million from $13 million, a modest rise of 4.6%. However, the operating profit before interest and tax increased substantially from $2 million to $2.6 million, a rise of 30%. This business sector is not directly related to our main core business. A review would be undertaken to position its role. Other Minor Businesses Our car distribution business continued to be profitable. Its turnover had declined to $11.4 million from $14.9 million. Likewise, its operating profit before interest and tax also dived to $0.1 million compared to $0.8 million a year ago. To help push sales through greater brand exposure and awareness, plans are underway to appoint more dealerships for both our makes SEAT and Perodua. Still in its infancy, the courier service business achieved a turnover of $0.5 million, which is 74% better than last year. During the period under review, the business had successfully entered into strategic tie-ups with a Malaysian and an Indonesian courier companies. It is envisaged that the customer base would expand in the year ahead and that our brand would add weight to the service provided. Our only remaining property project in Simei had reported sales of up to 74%. Temporary Occupation Permit was granted in April Its performance had no relevance to our Group s turnover and profitability. OVERSEAS VENTURES Our earlier investments of small fleets of taxis in Suzhou and Xiamen continued to be profitable. However, the tour bus operations in Zhengzhou continued to incur some small losses. But our other investments in Suzhou petrol kiosk and workshop had produced a small profit. Nevertheless, our combined investment of $6.7 million in the People s Republic of China (PRC) is still insignificant but it serves as an experience which would benefit the Group in its declared expansion plans in the PRC in the light of her entry to the World Trade Organization (WTO). 6

7 Comfort Group Ltd Annual Report 2002 Chairman s Statement Last year I mentioned that we took a 25% stake amounting to $9.3 million in a Hong Kong based company, Trans-Island Limousine Service Limited. The Company provides coach and limousine service between the new Hong Kong airport and the various hotels in the city. It also engages in cross-border bus operations between Hong Kong and the various large cities in the southern Guangdong Province. Again, the profitability has no significant impact on the Group in the short term but complements the Group s activities in the PRC. We also have an investment of $4.7 million in German Automobiles Pte Ltd which holds both the international Hertz car rental franchise as well as the distributorship of BMW vehicles in PRC. The company has recently been successfully listed on the Stock Exchange of Hong Kong under the name G.A. Holdings Limited. While our 19% stake has been diluted upon its flotation to 15.42%, based on the initial offer price per GA share of HK$0.50 against our cost of HK$ per GA share, we have a modest unrealised gain. In August 2001, Comfort Transportation took a 15% equity stake in a Taiwan based company, Transportation High Tech, Inc. Its business plan is that of a call centre, modelled on our own Comfort CabLink for a fleet of 10,000 taxis in Taiwan. It has yet to commence operations. Again, this is considered as the seed for our expansion into the Taiwan market in future. Our investment is of the order of $2 million. To-date, our total investments abroad stand at $22.8 million, representing about 4.7% of our total shareholders funds as at the close of the financial year. CORPORATE GOVERNANCE The year under review witnessed intensive public debates and discussions on the subject of corporate governance, both locally and worldwide. I mentioned in the Chairman s Statement last year that at the Senior Management Seminar, I had stressed to our staff that we were a public listed company and that we were responsible to all our shareholders, and that the Singapore Labour Foundation and the unions were not the only shareholders. I urged management to adopt market practices of doing business like rewarding staff and streamlining our procedures. I am pleased that improvements had been made in these areas. With the impending implementation of the Code of Corporate Governance, we had established the Nominating Committee and revamped the Audit Committee. We already have the Remuneration Committee. In addition, we also have an Executive Committee. In fact, since inception, we have taken the position that the Chairman of the Board and the Chief Executive Officer should be separate persons. Such has been our effort to demonstrate accountability and transparency. Because of our historical past and its noble mission and the unique situation of our taxi business in Singapore, which is still the bulk of our operations, I had stressed to our management that a meaningful and rewarding balance had to exist among the authorities (which provide the taxi licences), our taxi operator partners and management. We therefore have to be a good and responsible corporate citizen. Donations to the handicapped, education and labour movement have to be part and parcel of our 7

8 Chairman s Statement commitments and responsibility. Looking after the welfare of our taxi drivers has to be our prime concern, for after all, they are the people who rent our taxis and serve the public. The Code also deals with the responsibility and training of the directors. Our directors attend various courses. They are also provided with relevant articles appearing in international business journals so that they can be kept abreast of new developments. I also urged that the two booklets produced by NTUC in conjunction with their 40th anniversary, namely Stretching the Dollar and Managing the Crisis, be prescribed readings for the directors and senior staff. Though the Group is not yet affected by the approved recommendations of the Disclosure and Accounting Standards Committee, the Board has decided that we should proceed with quarterly reporting of our financial results commencing this financial year. We are therefore a year ahead of schedule. Coupled with that, we also want to release these quarterly results within 45 days instead of the recommended 60 days after the period ended. For this, we are two years ahead of schedule. As we have already prepared ourselves for these events, we see no reason why we should not implement them earlier. GROWTH AND PROSPECTS No doubt taxi service is our main core business, there is always scope for further profitability as we improve our efficiency and operation system. Once in a while, there is an increase in new taxi licences granted by the authorities. The recent release of 200 new taxi licences is a case in point. As population and tourist arrivals increase, this trend is expected. But related to taxi service, growth in diesel sales and vehicle repairs are real and should be exploited. Vehicles advertisement is another potential source of growth. We also do not rule out being a significant player in bus operations as we expand and acquire experience and expertise in running larger and bigger fleets. We believe that we can carve out a niche in this area. The Board has therefore decided to set aside $80 million for the next two years to undertake expansion in this sector. With the PRC being a recent member of the WTO, we are of the view that there is a rare window of opportunity for the Group to play a larger and more active role in that vast country. Besides taxi service, branded car rental business targeted at foreign businessmen and tourists to the PRC, and foreign and local car distributions earmarked for the more affluent locals are areas that the Group would be exploring. A sum of up to $100 million would be allocated for investments in these sectors in the PRC. I want to assure our shareholders and investors that we do not expand for the sake of expansion. Neither are we risk adverse. We make calculated risks and move with care, caution and optimism. Much is expected of management to deliver since financial resources have been allocated for meaningful investments in our core and its related businesses. We promise to stay focused and it will be the Board s responsibility to ensure that this is so. 8

9 Comfort Group Ltd Annual Report 2002 Chairman s Statement The recent budget announcement on revision of some taxes like the revised Additional Registration Fee, Excise Duty Rate and changes to the Preferential Registration Fee, would result in an overall capital cost increase of taxis in Singapore. This can be mitigated partly by the reduced corporate tax rate, and hopefully a fall in the Prevailing Quota Premium. Nevertheless, the Board is of the view that the impact is not expected to be significant in the near term. Barring any adverse change in circumstances, the Board expects another year of profit growth. APPRECIATION Our recent successes would not have been possible if not for the strong support of the Government which has confidence in us in running the largest taxi fleet in Singapore, our 22,000 strong taxi and bus drivers, our hardworking and dedicated staff and our sympathetic and understanding labour movement. On behalf of the Board, I wish to express my deepest appreciation to all of them. We are pleased and proud that three of our directors were elected to the Parliament in the General Elections held on 3 November I refer to Dr Wang Kai Yuen, Mr Ong Ah Heng and Mr Heng Chee How. Unfortunately, Mr Heng Chee How s success is our loss. Upon his election as a Member of Parliament, he was made Mayor of Central Singapore District. He left us on 15 December 2001 after having been with the Board for about five years. On behalf of the Board and Management, we wish him greater success in his more urgent and demanding tasks ahead. Finally, I wish to thank all my fellow directors for their untiring guidance and counsel. It has been a pleasure working with a very independentminded board made up of people fluent and well versed in business, finance, management and the ground. Lim Jit Poh Chairman Note: Previous year s figures were adjusted to comply with the revised and new accounting standards. 9

10 Board of Directors < Lim Jit Poh, appointed as Director in 1993 and Chairman of the Board in 1999, is also Chairman of the Executive Committee and the Remuneration Committee. Mr Lim is also Chairman of VICOM Ltd as well as a director of L.C. Development Ltd, DelGro Corporation Limited, The Ascott Group Limited, Inchem Holdings International Limited and HBM Print Ltd. All these are public companies listed on the Singapore Exchange. Lim Jit Poh was a former top civil servant and a Fulbright scholar. He was awarded the Public Administration Medal by the Government of Singapore in 1972 and three awards by the National Trade Union Congress, namely Friend of Labour Award in 1986, Meritorious Service Award in 1990 and Distinguished Service Award in Mr Lim is a Member of the Council of the National University of Singapore, a Trustee of the Singapore National Employers Federation and a Council Member of the Singapore Chinese Chamber of Commerce & Industry. Mr Lim Jit Poh Chairman Goh Chee Wee, appointed as Group Managing Director in 1997 and redesignated as Group Managing Director/Chief Executive Officer in 2000, is also Member of the Executive Committee and the Remuneration Committee. He is also the Deputy Chairman/Chief Executive Officer of the Group s public listed subsidiary VICOM Ltd. < Prior to joining Comfort Group Ltd, he was the Minister of State, Ministry of Trade & Industry and the Ministry of Communications and a Member of Parliament for the Boon Lay Constituency and Deputy Government Whip. He is currently the Chairman of Board of Trustees of NTUC and NTUC Administration and Research Unit. Mr Goh is also a Director of the Singapore Labour Foundation and the Ong Teng Cheong Institute of Labour Studies. Mr Goh is Chairman of NTUC Media Co-operative Limited, Chairman of Board of Trustees of Singapore National Co-operative Federation Ltd and Deputy Chairman of NTUC FairPrice. He is the Chairman of GA Holdings Ltd, a company listed on the Stock Exchange of Hong Kong. He is also a Director of Stamford Tyres Corporation Limited, Tye Soon Limited, Chip Eng Seng Corporation Ltd and King Wan Corporation Limited, all of which are public listed companies. Mr Goh Chee Wee Group Managing Director/ Chief Executive Officer 10

11 Comfort Group Ltd Annual Report 2002 Board of Directors < Dr Wang Kai Yuen, appointed as Director in 1993, is Chairman of the Nominating Committee and a member of the Executive Committee. Dr Wang is a Member of Parliament for the Bukit Timah Single Member Constituency. He is also the Managing Director of Xerox Singapore Software Centre and the Chairman of Xpress Holdings Ltd. Dr Wang also holds directorships at SuperBowl Holdings Ltd, Asian Micro Holdings Ltd, Hong Lai Huat Group Limited, Nylect Technology Ltd and COSCO Investment (Singapore) Ltd. Dr Wang Kai Yuen Director John Loo Say Lin, appointed as Director in 1993, is also Chairman of the Audit Committee and a member of the Remuneration Committee. < He is Managing Director of Elpiji (S) Pte Ltd and a Director of several companies in Singapore, Vietnam and the People s Republic of China in consultancy, oil and gas engineering, and health products. Mr Loo was awarded Friend of Labour Award Medal by NTUC in 1980 and the Rochdale Medal by the Singapore National Co-operative Federation Ltd in Mr John Loo Say Lin Director 11

12 Board of Directors < Dr Ho Kah Leong, appointed as Director in 1997, is also a member of the Audit Committee. He was former Senior Parliamentary Secretary to the Minister for the Environment. Currently, he serves as Principal of the Nanyang Academy of Fine Arts and a Director of SuperBowl Holdings Ltd, G&W Group Holdings Limited, Nanyang Fine Arts Foundation Ltd, Sculpture Square Foundation Ltd, Parkway Healthcare Foundation Ltd, Green World Holdings Ltd, Dayen Environment Ltd and Ang Mo Kio Hospital Ltd. He is a celebrated artist in Singapore and the President of Singapore Arts Federation. In 2001, he was conferred the PhD in Doctor of Philosophy in Arts, Honoris Causa, by Wisconsin International University, USA. Dr Ho Kah Leong Director Pang Kim Hin, appointed as Director in 1993, is also a Member of the Nominating Committee and the Audit Committee. He is Executive Chairman of Hong Kong-based Mother & Child Limited. He also holds directorships in local and overseas companies in retailing, warehousing and investment, including being a non- Executive Director of public listed Asian Micro Holdings Ltd. < He was awarded the Friend of Labour Award in 1980 and the Meritorious Service Award in 1993 by NTUC. Mr Pang Kim Hin Director 12

13 Comfort Group Ltd Annual Report 2002 Board of Directors < Nancy Teo Geok Har, appointed as Director in 1995, is also a member of the Executive Committee and the Nominating Committee. She is Chief Executive Officer of the Singapore Labour Foundation and a Director of Pasir Ris Resort Pte Ltd, SLF Leisure Enterprises Pte Ltd, SLF Management Services Pte Ltd, SLF Properties Pte Ltd and other private companies and NTUC co-operatives in the property, leisure and service industries. She is also a Director of VICOM Ltd. Ms Nancy Teo Geok Har Director Ong Ah Heng, appointed as Director in 1999, is also a member of the Audit Committee. Mr Ong is a Member of Parliament for Nee Soon Central Single Member Constituency. He is also Assistant Secretary-General, NTUC, Director, Community Development Department and Executive Secretary of the National Transport Workers Union. He is a Director of Singapore Post. < Mr Ong Ah Heng Director 13

14 Corporate Information Board Of Directors Lim Jit Poh, Chairman Goh Chee Wee, Group Managing Director / Chief Executive Officer John Loo Say Lin Wang Kai Yuen Pang Kim Hin Nancy Teo Geok Har Ho Kah Leong Ong Ah Heng Company Secretary Doreen Nah Board Executive Committee Lim Jit Poh, Chairman Goh Chee Wee Wang Kai Yuen Nancy Teo Geok Har Audit Committee John Loo Say Lin, Chairman Pang Kim Hin Ho Kah Leong Ong Ah Heng Remuneration Committee Lim Jit Poh, Chairman John Loo Say Lin Goh Chee Wee Nominating Committee Wang Kai Yuen, Chairman Pang Kim Hin Nancy Teo Geok Har Share Registrar Barbinder & Co Pte Ltd 8 Cross Street #11-00 PWC Building Singapore Auditor PricewaterhouseCoopers Certified Public Accountants 8 Cross Street #11-00 PWC Building Singapore Date of Appointment: 7 September 1993 Partner-in-charge: Lim Seow Chiang Subsidiaries Not Audited by PricewaterhouseCoopers Subsidiary Companies Suzhou Comfort Taxi Co., Ltd Xiamen Comfort Taxi Co., Ltd Zhengzhou Comfort Tour Bus Service Co., Ltd Suzhou Industrial Park Zhong Xing Comfort Petrol Service Station Co., Ltd Auditors Suzhou Dongwu CPA Xiamen Yong He Certified Public Accountants Co., Ltd Tian Yi Certified Public Accountants Co., Ltd Suzhou Dongwu CPA 14

15 Comfort Group Ltd Annual Report 2002 Comfort Group Structure TAXI & BUS OPERATIONS & RELATED SERVICES 100% Comfort Transportation Pte Ltd 100% Yellow - Top Cab Pte Ltd 100% Comfort Bus Pte Ltd 100% Comfort Ads Pte Ltd 15% Transportation High Tech, Inc (Taiwan) VEHICLE INSPECTION, REPAIR, MAINTENANCE & ACCESSORIES 100% Comfort Automotive Services Pte Ltd 100% General Automotive Services Pte Ltd 73.61% VICOM Ltd* 100% Comfort Diesel Pte Ltd 20.27% [Stamford Tyres Corporation Limited*] VEHICLE DISTRIBUTION 74% Perocom Motors Pte Ltd 74% ComTrucks Pte Ltd 99.99% Barcelona Motors Pte Ltd 100% Eurocom Motors Pte Ltd 51% VICOM Assessment Centre Pte Ltd 100% VICOM Nominee Investment Pte Ltd 100% VICOM Inspection Centre Pte Ltd 100% Sinamex Car Rental & Leasing Pte Ltd LEARNER - DRIVER TRAINING 90% Comfort Driving Centre Pte Ltd OTHER INVESTMENTS 100% Comfort Courier Services Pte Ltd 100% Comfort Nominees Pte Ltd 100% Comfort Group Investments Pte Ltd 100% Comfort Properties Pte Ltd 7.01% 30% 20.13% ST Mobile Data Pte Ltd [Boon Lay Executive Condominiums Pte Ltd] [NCH (Tampines) Pte Ltd] REGIONAL NETWORK [ ] 100% Comfort (China) Pte Ltd 25% [Trans-Island Limousine Service Limited (Hong Kong)] Core Business Subsidiaries Associated Companies Strategic Investments 70% 70% 80% 15.42% 20% Suzhou Comfort Taxi Co. Ltd Xiamen Comfort Taxi Co. Ltd Zhengzhou Comfort Tour Bus Service Co. Ltd G.A. Holdings Limited** [SLF International Pte Ltd] 90% Suzhou Industrial Park Zhong Xing Comfort Petrol Service Station Co., Ltd 25% Suzhou Industrial Park Comfort Trading Co Ltd Suzhou Comfort - Toyota Vehicle Authorised Service Centre (A registered business division of Suzhou Comfort Taxi Co. Ltd) * Listed on the Singapore Exchange Securities Trading Limited ** Listed on the Stock Exchange of Hong Kong 15

16 Directors of Comfort Group of Companies 16 Comfort Transportation Pte Ltd/ Yellow-Top Cab Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Nancy Teo Geok Har Wang Kai Yuen Yang Ban Seng (Executive Director) Comfort Automotive Services Pte Ltd/ General Automotive Services Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Nancy Teo Geok Har Wang Kai Yuen Simon Soh Guan Bin (Executive Director) Comfort Bus Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Wang Kai Yuen Nancy Teo Geok Har Yang Ban Seng (Executive Director) VICOM Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman & CEO) Heng Chye Kiou (Executive Director) Ong Teong Wan Cheong Yip Seng Ong Chow Hong Sim Cheok Lim Nancy Teo Geok Har VICOM Inspection Centre Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Heng Chye Kiou (Executive Director) VICOM Assessment Centre Pte Ltd Goh Chee Wee (Chairman) Heng Chye Kiou (Executive Director) Tan Soon Heng Swee Lee Chun VICOM Nominee Investment Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Heng Chye Kiou (Executive Director) Eurocom Motors Pte Ltd Goh Chee Wee (Chairman) Peter Leong Kock Wah Chong San Chew Perocom Motors Pte Ltd/ ComTrucks Pte Ltd Goh Chee Wee (Chairman) Peter Leong Kock Wah Chong San Chew Umar Bin Abdul Hamid Ridzwan Bin Raihan Barcelona Motors Pte Ltd Goh Chee Wee (Chairman) Peter Leong Kock Wah Chong San Chew Sinamex Car Rental & Leasing Pte Ltd Goh Chee Wee Peter Leong Kock Wah Comfort Driving Centre Pte Ltd Goh Chee Wee (Chairman) Huam Chak Khoon Takaharu Matsumoto Peter Leong Kock Wah Hiroto Matsunaga (alternate Director to Takaharu Matsumoto) Comfort Ads Pte Ltd Goh Chee Wee (Chairman) Yang Ban Seng (Executive Director) Comfort Courier Services Pte Ltd Goh Chee Wee (Chairman) Chong San Chew Yang Ban Seng Comfort (China) Pte Ltd/ Comfort Properties Pte Ltd Lim Jit Poh (Chairman) Goh Chee Wee (Deputy Chairman) Nancy Teo Geok Har Wang Kai Yuen Suzhou Comfort Taxi Co. Ltd Goh Chee Wee (Chairman) Li Jin Hai (Deputy Chairman) Chua Huat Hwee Peter Leong Kock Wah Zhang Cheng Lin Suzhou Comfort Toyota Vehicle Authorized Service Centre (An Enterprise of Suzhou Comfort Taxi Co. Ltd) Suzhou Industrial Park Zhong Xing Comfort Petrol Service Station Co., Ltd Chua Huat Hwee (Chairman) Zhang Cheng Lin (Vice Chairman) Han Jian Qing Xiamen Comfort Taxi Co. Ltd Goh Chee Wee (Chairman) Li Wei Zhao (Deputy Chairman) Chua Huat Hwee Peter Leong Kock Wah Zhang Shao Qi Zhengzhou Comfort Tour Bus Service Co. Ltd Goh Chee Wee (Chairman) Wang Xin Yao (Vice Chairman) Chua Huat Hwee Peter Leong Kock Wah Li Wei Comfort Nominees Pte Ltd Goh Chee Wee (Chairman) Peter Leong Kock Wah Comfort Group Investments Pte Ltd Goh Chee Wee (Chairman) Peter Leong Kock Wah Comfort Myanmar Pte Ltd Goh Chee Wee (Chairman) Heng Chye Kiou Peter Leong Kock Wah Chong San Chew (alternate Director to Goh Chee Wee) Suzhou Industrial Park Comfort Trading Co. Ltd Li Jin Hai (Chairman) Chua Huat Hwee (Deputy Chairman) Zhang Cheng Lin

17 Comfort Group Ltd Annual Report 2002 Corporate Governance Consonant with the Code of Corporate Governance issued by the Corporate Governance Committee on 21 March 2001 (the Code ), Comfort Group Ltd ( CGL ) considered and approved new initiatives, including the establishment of a new Nominating Committee and adoption of its terms of reference, the review and adoption of the terms of references of the existing Board Committees (i.e. Audit Committee, Remuneration Committee and the Executive Committee), quarterly reporting of financial results and the adoption of a new policy on dealings in the securities of CGL and its listed subsidiary, VICOM Ltd ( VICOM ) by Directors and certain employees of the Group. The Board and Management The Board of CGL comprises 8 members with extensive government, trade union, corporate and industry experiences. Biographical details (including other directorships and former positions) of each of the Directors are set out on pages 10 to 13 of this Report. All except the Group Managing Director/Chief Executive Officer ( GMD/CEO ) are non-executive Directors. Amongst the 7 non-executive Directors, 5 members (including the Chairman of the Board) are considered by the Board to be independent of management and free from any relationship that could interfere with the exercise of their independent judgment. The Board structure ensures that no individual or group of individuals dominates the Board s decision-making process. The Board s primary responsibilities are to establish policy guidelines, to review and approve the overall direction of the Group and to ensure that the strategies undertaken lead to enhanced shareholder wealth. GMD/CEO and his management team are responsible for implementation of the Board s policy and the effective management of the businesses of the Group. The Board met 6 times during the financial year ended 31 March The Articles of Association of CGL require one third of the Directors (other than the Managing Director) to retire from office at each annual general meeting. Directors are eligible for re-election by shareholders. Proposed changes to the existing Articles of Association of CGL relating inter alia, to the removal of the exemption that currently applies to the Managing Director on retirement by rotation, accommodation of meetings by telephonic or video-conferencing and voting in absentia by shareholders, are being considered and will be proposed to shareholders on or by the 2003 Annual General Meeting of CGL. 17

18 Corporate Governance Executive Committee The Executive Committee ( EXCO ) is set up to provide greater responsiveness in the Group s decisionmaking process. Comprising the Chairman, GMD/CEO and 2 other Directors, it oversees the operations of the Group in accordance with the terms of reference established by the Board. The EXCO reviews and approves the operating plans, budgets, capital expenditures of and investments undertaken by the Group. It provides overall direction to the management, delegates discretionary powers to senior management and monitors the financial performance of the Group s operating companies. Where appropriate, the EXCO initiates special reviews and actions for prudential management of the Group. The EXCO also assumes the responsibility of considering and making recommendations for approval by the respective Boards, nominations or re-nominations of candidates for chief executive officers, executive and non-executive Board appointments of the Group s non-listed subsidiaries and associated companies as well as other companies in which the Group has Board representations. The EXCO met 8 times during the financial year ended 31 March Nominating Committee On 19 March 2002, the Board established the Nominating Committee which had been tasked with the authority and responsibility inter alia, to devise an appropriate process to review and evaluate the performance of the Board as a whole as well as individual directors on the Board. The Nominating Committee will also be responsible for the review of the independence of all Directors of Comfort Group Ltd and reaffirm their independent status on the Board. The Nominating Committee will meet at least twice a year. Remuneration Committee Formerly constituted Executive Remuneration Committee was renamed as Remuneration Committee ( RC ) on 16 November The terms of reference of the RC was amended in line with the spirit of the Code. The RC comprises the Chairman of the Board, GMD/CEO and an independent Director. The RC supports and advises the Board on inter alia, executive remuneration policy, remuneration of executive directors as well as reviewing and approving reward schemes, career development and advancement of chief executive officers and senior executives of the Group. The roles and responsibilities of Administration Committee for the 2000 Comfort Share Option Scheme were also subsumed under the Remuneration Committee. The RC met twice during the financial year. 18

19 Comfort Group Ltd Annual Report 2002 Corporate Governance Audit Committee The Audit Committee comprises 4 members, all of whom are non-executive directors. Two of the members of the Audit Committee have extensive accounting and related financial management experience. Its terms of reference have been amended in line with the Code to include the provision of assistance to the Board to fulfil its corporate governance and oversight responsibility in relation to financial reporting, internal control structures, risk management systems and internal and external audit functions. The Audit Committee met 4 times during the financial year. Internal Financial Controls The Group has in place a system of internal financial controls to ensure that assets are safeguarded, proper accounting records are maintained and financial information used within the business and for publication is reliable. The controls include the documentation of key procedures and rules relating to the delegation of authorities. Performance Reporting The Group has in place a formal planning and budget system that facilitates its short and medium term business plans. This information is incorporated into the monthly management and financial reports. Variances between actual performance and the plan are investigated as appropriate. Securities Transactions The Group has adopted an internal compliance code to provide guidance to its Directors and certain officers in relation to the dealings in its securities. Directors, principal officers and relevant officers who have access to price sensitive information are required to report on their dealings in securities of CGL and VICOM. They are reminded not to deal in the securities of CGL and VICOM during the periods commencing 2 weeks before the announcement of each quarterly financial results of CGL and VICOM (as the case may be) and ending on the date of announcement of the relevant financial results. 19

20 Investor Relations and Group Communication The Comfort Group recognises the importance of communication with its many stakeholders: clients, taxi drivers, employees, suppliers, shareholders and the public. Capitalising on the broad reach of the Internet, the easy accessibility of the print media and the unique attraction of personal interaction, the Group continuously seeks to increase the transparency of its organisation. The efforts and developments in the year under review include the following : Newsletters The Group publishes six newsletters. For its staff, there is Comfort Chat - a quarterly publication that gives the latest news on the Group s business ventures, its future directions and strategic developments. GAS and CAS staff also receive the GAS/CAS Gazette that carries service initiatives and company developments. Cabby, a monthly newsletter is targeted at drivers of the Group s taxi fleets. It contains updates on service initiatives and company policies that directly affect both Comfort and Yellow-Top Cab drivers. A similar publication, Comfort Bus Link, is targeted at drivers of our buses. Sovereign - a quarterly newsletter is distributed to the corporate clients of our Mercedes limousine cabs while VICOM circulates VICOM Newsline, a newsletter that informs motorists of the latest industry trends and developments. Brochures Overseas visitors, investors and other interested parties are provided with easy-to-read information brochures on the Group and its various subsidiaries. Annual Report The Group s annual reports are routinely sent to shareholders, institutional investors, analysts, journalists and any other interested parties. In addition to the print edition of the Annual Report, there is also a web-based edition of the Group s Annual Report. The Website The Group s English language website ( has two platforms, one for corporate information and the other for consumer information. The former is rich in financial and other corporate informational content while the latter provides users with an easy-to-use guide of the Group s products and services. In September 2001, an additional website was developed in Chinese ( and is hosted by the Chinese language newspaper Lianhe Zaobao. This is essentially an investor relations website that carries the Group s latest developments as well as analyst comments and recommendations. To date, it has been well received. In March 2002 for instance, the number of pageviews reached a high of 8,007 visits. Since its launch till March 2002, the total number of visits to the site was about 44,800, with views coming from China, Hong Kong, Taiwan and Singapore. Analysts Meetings The Group took advantage of the many opportunities, locally and overseas, to present itself to analysts, fund managers, stockbrokers, journalists and investors during the financial year. These meetings and the presentations ensured that the accounts, financial performance and other service indicators of the Group were well understood and a better appreciation of the value of the Company s shares gained. 20

21 Comfort Group Ltd Annual Report 2002 Corporate Management Left to Right (Front Row) Doreen Nah Group Legal Manager Cum Company Secretary Peter Leong Group Financial Controller Left to Right (Back Row) Jacqueline Tham Group Public Relations Manager Joan Chung Group Human Resource Manager Chong San Chew Group Corporate Planning & Business Development Manager Wong Soo Leong Group Internal Audit Manager 21

22 Prime Movers > Left to Right (Front Row) Heng Chye Kiou Executive Director VICOM Ltd VICOM Inspection Centre VICOM Assessment Centre VICOM Nominee Investment Yang Ban Seng Executive Director Comfort Transportation Yellow-Top Cab Comfort Bus Comfort Ads (Back Row) Simon Soh Executive Director General Automotive Services Comfort Automotive Services < Left to Right (Front Row) Steven Lam General Manager Comfort Courier Services Thomas Ang General Manager Comfort Ads (Back Row) Chu Chee Leong General Manager VICOM Assessment Centre 22

23 Comfort Group Ltd Annual Report 2002 Prime Movers > Left to Right: Teo Chee Tiong General Manager Comfort Transportation Mark Yip General Manager Comfort Bus B. Sim General Manager Yellow-Top Cab < Left to Right: David Leng General Manager Eurocom, Perocom, Barcelona Motors, ComTrucks Chua Huat Hwee General Manager Comfort (China) Huam Chak Khoon General Manager Comfort Driving Centre 23

24 Do you know? Comfort Group s turnover soared by $39.9 million to reach $454.5 million. Comfort Group posted record profit for the 3 rd year in a row. After tax profit reached $68 million. Total dividend declared amount to 40.1% of Group s profit after tax and minority interests. Total recommended gross dividend is cents per share, a 25% increase over 3.5 cents given out in FY 00/01. Earnings per share went up by 15% from 7.35 cents to 8.45 cents. Return on average shareholders fund increased from percent to percent. 200 additional taxi licences were granted to Comfort Group, which translate to $6.5 million additional rental income a year. Comfort Group, Singapore s largest taxi operator expanded its taxi fleets to reach 11,330 taxis. Comfort Bus is Singapore s largest private bus operator with a fleet of over 320 buses. CabLink catered 8.1 million taxi bookings in FY 01/02. $25.8 million in taxi booking fees were collected in the last fiscal year. $8.3 million in taxi fares was transacted through cashless modes, including taxi vouchers last financial year. Vehicle inspection and assessment registered a 37.4% growth in turnover, from $10.7 million to $14.7 million in FY 01/02. 24

25 Comfort Group Ltd Annual Report 2002 Do You Know? Our vehicle servicing and diesel sales businesses surged a double digit 14% in turnover, from $97.2 million to $111 million. Comfort s fleets of taxis make 396,550 trips a day, 144,740,750 trips a year. Comfort Automotive Services dispensed 79.2 million litres of diesel last fiscal year. Comfort Group performs 187,000 vehicle servicings a year. VICOM inspects 300,000 vehicles a year. General Automotive Services & Comfort Automotive Services were awarded the Singapore Quality Class status in CabLink was nominated a finalist in the inaugural Annual Call Centre Award organised by the Call Centre Council of Singapore. CabLink s catered rate came close to 90% in the first 3 months of We registered 4 complaints per 100,000 taxi trips, but a higher 6 good acts per 100,000 trips. Bouquets on Comfort s taxi service increased by 70% last year. Comfort is a pioneer member of the Half Percent Club launched by Prime Minister Goh Chok Tong to promote corporate welfarism. 98% of new Comfort drivers kept a complaints and accident-free record during their 6-month long probation. Comfort s new taxi livery won an International Award of Distinction for design excellence. This award is organised by Creativity, Inc. USA. 25

26 Significant Events Apr 2001 In a move to streamline the operations of VICOM Ltd, VICOM Inspection Centre Pte Ltd was incorporated to take over the vehicle inspection business. Comfort Group became one of the pioneer corporate founder members of the Half Percent Club, an initiative mooted by Prime Minister Goh Chok Tong. It will commit at least half a percent of its profit after tax towards projects that benefit the society. May 2001 Jun 2001 Comfort launched a door-to-door service in which drivers act as chaperons to cataract patients going to Alexandra Hospital for their operations. Comfort Automotive Services opened a diesel kiosk at VICOM (Yishun) to serve cabbies living in the north. This is its seventh diesel kiosk. Comfort Driving Centre clinched the Ministry of Home Affairs Special Award and Singapore Arm Forces Commendation Award for its continuing support towards Singapore s national service activities. Jul 2001 Aug 2001 Comfort Transportation introduced FastCall, a three-step way of booking a taxi. These FastCall panels which have their own unique location pin number are located at 200 high traffic areas to make taxi booking more convenient. Comfort distributed $2.6 million of rental rebates to over 9,500 deserving Comfort and Yellow-Top Cab drivers. This is the first year that relief drivers are entitled to the rebate. Comfort Transportation invested $2 million to acquire a 15% equity stake in Transportation High Tech, Inc (THT) in Taiwan. With this partnership, Comfort will also offer consulting expertise to help THT start a high-tech call centre for a fleet of 10,000 taxis in Taipei. Comfort introduced a medical scheme for Comfort and Yellow-Top Cab drivers where drivers will receive compensation for sick leave and reimbursements for medical consultation, in addition to its in-patient plan. Comfort Transportation acquired a fleet of 20 buses from Hong Zhan Transport & Trading Co, with an accompanying contract worth $1.7 million. Suzhou Comfort Taxi set up Suzhou Industrial Park Comfort Trading Co. Ltd, which deals primarily with vehicle distribution and automotive parts trading. Sep 2001 Comfort Ads introduced Asia s first Light Emitting Diode (LED) rooftop advertising, a cheaper and more convenient method of spreading a message. It was also the first in Asia to broadcast news live on its taxitop. Comfort rolled out enhanced bi-coloured LED taxi rooftop signage to help commuters spot the availability of taxis with ease and to remove the misuse of manual taxi signs. Comfort installed the first batch of second generation In-Vehicle Equipment known as Sapphire in 300 taxis for a trial run. The Sapphire boasts of bigger text display and announces locations of booking jobs. 26

27 Comfort Group Ltd Annual Report 2002 Significant Events Oct 2001 Comfort Group was granted an additional 200 taxi licences by the Land Transport Authority. These will boost our rental prospects by some $6.5 million a year. Comfort announced a $15.8 million relief package in rental rebates and diesel subsidies to help drivers tide over the economic downturn. Comfort Transportation was awarded the Corporate Gold Award by His Excellency, President S R Nathan, for its significant donations to the Community Chest. As part of Comfort s Commuter Communication Programme, it distributed 30,000 postcards and brochures offering handy tips on better taxi commuting to commuters. General Automotive Services was conferred the Star of Commendation 2001 Award by the Singapore Industrial and Services Employees Union (SISEU) for sustaining good management-union relations. Nov 2001 Minister-without-Portfolio and NTUC Secretary-General, Mr Lim Boon Heng, launched Comfort Transportation s 30th anniversary publication, Remarkable Triumph at Comfort Operators Day. Minister Lim also launched VICOM s 20th anniversary publication A Task Achieved at the same event. Comfort Transportation and Yellow-Top Cab drivers and staff clinched a total of 303 Excellent Service Awards (EXSA), the highest number for transport companies. Comfort CabLink was nominated a finalist for the First Annual Call Centre Awards organised by Call Centre Council of Singapore. Comfort Transportation and Yellow-Top Cab were presented the People Developer Award by SPRING Singapore (formerly known as Singapore Productivity and Standards Board) for their commitment to develop their staff and drivers through a comprehensive training system. Comfort Transportation s new taxi livery won an international Award of Distinction for design excellence. Sovereign driver Albert Tan was nominated finalist for the Tourism Host of the Year (Transport - Taxi) Award. Comfort Driving Centre launched its internet booking portal to give learners 24-hour access to its enrolment and booking services. VICOM succeeded in converting to ISO 9001:2000 standard. Jan 2002 Feb 2002 Comfort Automotive Services introduced an interest-free car repairs and maintenance instalment plan to aid car owners during the economic downturn. Advertising arm of Comfort Transportation was incorporated as Comfort Ads Pte Ltd to expand taxi and bus advertisements, and explore other forms of outdoor advertising mediums beyond vehicle advertisement. Comfort Automotive Services registered a record monthly diesel sales of 7.8 million litres. 27

28 Operations Review Taxi services turnover increased by $19.6 million to reach $330.4 million, a rise of 6.3%. Comfort Transportation s new blue taxi livery won an international Award of Distinction for design excellence. 28

29 Comfort Group Ltd Annual Report 2002 Operations Review TAXI OPERATIONS Singapore s largest taxi fleet operator continued to perform well in FY 01/02. For the year ended 31 March 2002 taxi services turnover was $330.4 million, a rise of 6.3% compared to $310.8 million in FY 00/ 01. Profit before tax reached $55.9 million, up from $50.0 million and we maintained our pre-tax margin of about 17%. In October 2001, to help drivers out during the economic downturn, Comfort announced a $15.8 million relief package for Comfort and Yellow- Top Cab drivers, half of which was to be given out as additional rental rebates, and the other half as diesel subsidies. Excluding the Government grant of $5.5 million (in diesel tax reduction and a onetime $100 road tax rebate per taxi), Comfort injected $10.3 million into this relief package. Some $6.7 million was given out by the close of FY 01/ 02. This was on top of the rental rebates of $2.6 million given to both hirers and relief drivers in August 2002 in recognition of their good service. Comfort Transportation In October 2001, Comfort Transportation was granted 100 new taxi licences by the Land Transport Authority. By end March 2002, 20 new taxis were placed on the road, and fleet size reached 10,020. To help keep Comfort taxis competitive, the company continued with its strategy of replacing scrapped taxis with bigger capacity taxis that are more popular with commuters. The larger taxis are also highly demanded by taxi drivers. In FY 01 /02, 991 small taxis were scrapped and replaced with the bigger taxis. By the close of the financial year, the number of big taxis it owned stood at 5,264, which was 53% of its entire fleet, up from 4,197 in FY 00/01. Over 35% of its fleet are less than 3 years old. The company intends to further increase the ratio of big taxis, with 70% being big taxis by FY 02/03. During FY 01/02, the company continued to woo corporate users. This yielded good results, with the corporate client voucher scheme reaping more than 10% increase in transacted volume. Billings increased by $600,000 to reach $5.8 million, as opposed to $5.2 million in FY 00/01. With the installation of another 6,516 cashless payment machines onboard our taxis, payment by credit and charge cards, yet another form of cashless payment, reached $2.5 million. 29

30 Operations Review During the year, a new automated mode of booking a Comfort cab - FastCall, was introduced. It allows users to follow simple and brief steps to call a cab using their mobile phone. The user only needs key in the location pin and our Call centre will be able to locate the passenger instantaneously. Currently, there are 200 FastCall panels located at high traffic areas to capture an even bigger slice of the taxi booking market. The Company also extended its e-comfort Taxi Booking, first introduced to Singtel WAP phone users, to M1 WAP phone users. On 22 April 2002, the Minister for the Environment Mr Lim Swee Say launched a CNG pilot project in its push for greener fuel options for the republic. 50 extra taxi licences were granted to C o m f o r t Transportation to run CNG taxis. Comfort s partners Borneo Motors Pte Ltd and PETRONAS NGV Sdn Bhd showcased a CNG Toyota passenger car and the Enviro 2000 taxi r espectively. Comfort hopes to kick off its CNG taxi pilot run in the new financial year to establish the viability of using compressed natural gas (CNG) to fuel its taxis. Commuter comfort and safety will take top priority. With the 100 additional licences granted by the Land Transport Authority and the steady pace of small to big taxi conversion, with some 1,000 small taxis replaced by big taxis annually, the Company expects to enjoy profit growth. By May 2002, the remaining 80 new licences were utilised and the taxis had started plying the roads. Yellow-Top Cab The fleet size of Yellow-Top cabs (YTC) stood at 1,158 taxis as at 31 March The fleet increase came from the purchase of 53 private taxi licences, as well as the successful rental of 40 new taxis out of the 100 new taxi licences given by the Land Transport Authority. The remaining 60 licences were used by May Despite the sluggish economy, the premier service Sovereign managed to maintain demand. It signed up close to 100 new corporate clients, including the Ministries, MNCs, SMEs, travel agencies and their representative offices in FY 01/02. Efforts in promoting the service amongst corporate clients will be sustained in the new financial year. The target groups include travel agencies and the Concierge Association, the latter being an invaluable conduit for hotel guests who may not be aware of the Sovereign taxi service. 30

31 Comfort Group Ltd Annual Report 2002 Operations Review Sovereign drivers continued to impress commuters as the creme de la creme of our transport providers. Driver Albert Tan did us proud when he emerged as one of three finalists for the Tourism Host of the Year (Transport - Taxi) Award. Comfort CabLink Notwithstanding the economic slow-down, bookings via our CabLink system stood at 8.1 million for FY 01 /02, the same as the record 8.1 million bookings achieved in FY 00/01. Twice in December 2001, CabLink successfully catered a record high of over 40,000 jobs a day. The good performance was due in part to the higher call answered rate as a result of the addition of a second call centre, as well as the higher catered rate, up from 78% to 85%. The latter improvement is due to a larger fleet of taxis that had been equipped with the CabLink booking facility. By FY 01 / 02, some 9,400 taxis were fitted with the call booking facility. With booking charges reinstated in March 2001 to the same rate as that prevailing the year before, namely $3.20 for current bookings and $5.20 for advance bookings, the total income from CabLink bookings came up to about $25.8 million, up from $20.9 million last year. To increase productivity, we promoted automated means of booking a cab. Total automated booking jobs, which included AutoCall, FastCall and TOT, increased by 6.4%, up from 599,900 jobs in FY 00/01 to some 640,000 jobs in FY 01/02. Our marketing promotions with some handphone companies helped build up 2,400 new AutoCall users during the year. More taxis were fitted with the cashless payment system in FY 01/ 02. By end March 2002, 6,516 taxis had the facility installed. To encourage the use of credit cards under the cashless system, the 10% service charge was waived during its introductory period. Since February 2002, the charge has been reinstated. A total of 180,000 trips using the cashless system were recorded for FY 01/02 and the total collection of fares came up to $2.5 million. In September 2001, 300 taxis were installed with Sapphire, a new mobile data terminal that allows drivers to magnify booking information displayed. This facility also performs voice broadcast for the convenience of our drivers. The pilot study was successful and by March 2002, over 1,600 taxis were installed with this device. Backend, the infrastructure for CabLink was upgraded to further minimise breakdown and enable quick turnaround. This is expected to improve CabLink s taxi take-up rate as well as prevent the loss of data in the system. In November 2001, CabLink was nominated a finalist for the First Annual Call Centre Awards organised by the Call Centre Council of Singapore. 31

32 Operations Review BUS OPERATIONS Comfort Bus Pte Ltd, formerly a business division of Comfort Transportation, was incorporated as a new subsidiary of the Comfort Group in November 2001 to grow this business. The Group aims to leverage on its fleet management expertise as it gears up to become Singapore s third public bus operator when the opportunity arises. Comfort Bus Turnover from bus operation rose by 165.2%, from $4.6 million in FY 00/01 to $12.2 million in FY 01 /02. Comfort Bus expanded its fleet by more than a third in FY 01/ 02, mainly from acquisitions of bus fleets from private bus companies, at a capital expenditure of $12.4 million. Its fleet grew from 187 buses to 288. About half of its fleet are under five years of age and the rest ranging from 6 to 20 years of age. The revenue stream from buses came mainly from contract and shuttle services provided to local and international schools, factories, condominiums, country clubs, hotels and pubs. About 87% of its contracts each has an annual worth of $15,000 or more. Prospects are good for bus operations, as we are able to tap on the support infrastructure provided by the Group s vehicle inspection, maintenance, repair and diesel dispensing facilities. It also enjoys a good repute because of the Group s strength in taxi operations. Already, we have seen new contracts cumulatively contributing to revenues at about $217,000 per month. The Company expects more new contracts to keep its fleet fully occupied during the current financial year as it embarks on an aggressive marketing drive to schools, hotels, condominiums, sporting organisations and other civic associations. Operations Review Bus operations turnover rose by 165.2%, from $4.6 million to $12.2 million. 32

33 Comfort Group Ltd Annual Report 2002 Operations Review

34 Operations Review OUTDOOR ADVERTISING Comfort Ads, formerly the advertising arm of Comfort Transportation, was incorporated as a subsidiary of Comfort Group in February It posted a turnover of $6.1 million and an after tax profit of $1.2 million. Its incorporation as a separate entity will see the company expanding full force into bus and other outdoor advertising to complement its current range of taxi advertising. Comfort Ads In FY 01/02, the company strengthened its position as the top choice for innovative taxi advertising when it became the first in Asia to broadcast news, atop taxi roof top advertising panels, fed live from CNBC. It also introduced convex-top advertising where messages are displayed on aerodynamic-shaped taxi rooftop panels. Comfort Ads expects the new convextop, which debuted in August 2001 to do well and will install about 2,000 units of convextops to replace the existing conventional taxitops. Take-up rate for the new, elegantly designed convex-tops is expected to be better than the older version taxi-tops. In the new financial year, Comfort Ads began marketing advertising space for the Group s fleet of over 300 buses. Beyond that, it has been awarded sole agent for the marketing of advertising space at the soon-to-be launched Esplanade - Theatres on the Bay. The Company will also pilot in-taxi LCD-TV advertising in Comfort cabs using an interactive mobile system. This new medium called Mr Taxi, is the world s first mobile interactive point of information and advertisement designed for taxis. 34

35 Comfort Group Ltd Annual Report 2002 Operations Review VEHICLE INSPECTION AND ASSESSMENT In FY 01/02, the vehicle inspection subsidiary of the Group, VICOM Ltd reorganised its activities and transferred all vehicle inspection service centres to a new subsidiary, VICOM Inspection Centre Private Limited. All other services continued to be directly operated by VICOM Ltd. VICOM Vehicle inspection and assessment recorded a strong growth in turnover for FY 01/ 02, reaching $14.7 million. Part of the rise came from an increase in inspection fees by $4 and $2 for the first and repeat inspection respectively, as well as a rise in revenue from emission tests. In addition, two new satellite centres started operations during the year and contributed to revenue growth. Profit after tax came to $6.9 million, a rise of 40.8%. As part of its continuing efforts to offer a comprehensive range of vehicle-related services, the vehicle assessment centre continued to provide services for insurance claims and second hand vehicle purchasers. In addition, the satellite inspection centres also provided in-vehicle unit inspection services. As a market leader in inspection services, VICOM implemented plans to improve service quality and in 2001 was awarded the ISO9001:2000 standard, ahead of schedule. It also implemented several service initiatives aimed at enhancing customer satisfaction as well as improving operational efficiency. The company is in the process of making operational an e-portal to provide seamless support for its multi-centre operations, as well as a platform for its e-bidding for repairs service. 35

36 Operations Review Vehicle servicing and diesel sales turnover rose 14% to hit $111 million. 36

37 Comfort Group Ltd Annual Report 2002 Operations Review VEHICLE SERVICING AND DIESEL SALES The Group s vehicle servicing and diesel sales achieved a turnover of $111 million, contributing 24% of the Group s turnover. Business activities in both private cars and commercial fleets repairs and maintenance saw healthy increases. General Automotive Services The Company s efforts in providing better maintenance services to the Group s taxi fleets resulted in productivity improvements, with taxi downtime falling by 12%. It also achieved a 21% reduction in emission offences and a 100% pass rate for all inspections of Comfort and Yellow-Top cabs. Several new service initiatives were introduced. For the convenience of cabbies, it started the provision of night servicings at its Senoko branch. For its excellent management-labour relations, it was awarded the Star of Commendation 2001 by the Singapore Industrial and Services Employees Union in October In tandem with Comfort Bus fleet expansion, GAS expects to service a larger bus fleet at its Ubi workshop in the new financial year. Comfort Automotive Services The Company s various business segments posted growth all round: Turnover for general repairs went up by 18%, while spare parts sales and windscreen replacements saw improvements in turnover by 93% and 31% respectively. Air-conditioning jobs also rose by a healthy 35%. Private car crash repairs gained a 24% increase in business volume, from 4,200 to 5,200 jobs in FY 01/02. A number of factors contributed to these increases. The introduction of greater flexibility in payment, in the form of a 0% interest free instalment plan made available to cardmembers of major credit cards, had made its range of services more attractive. Its towing trial exercise with Asia Insurance and Sumitomo Mitsui and Marine Insurance, with a combined membership base of some 30,000 resulted in the successful conversion of 800 members as CAS Car Aid Plus members. Towing services saw significant increase in business activities, with towing jobs up from 800 to 1,900 a month. A substantial number of the towed vehicles were repaired at CAS. With a new diesel centre at VICOM (Yishun) in June 2001, diesel sales volume rose further, from an average 5.1 million litres per month to 6.6 million litres. Several promotions were undertaken during the year, such as monthly lucky draws, the National Day Promotion 2001, and the launch of the Diesel Medical Scheme for taxi hirers. The lucky draw brought in diesel sales of 7.8 million litres in the first month of its launch. All these boosted diesel sales while drivers enjoyed lower diesel prices, cash prizes and diesel vouchers, thereby creating a win-win situation for all parties concerned. By the close of the financial year, 17,000 of the 22,000 taxi drivers had pumped diesel at least once at CAS, and 40% of these pumped more than 500 litres of diesel at CAS every month. Plans are afoot to secure more diesel dispensing sites to capture an even bigger share of the taxi fleets diesel consumption. On the commercial fleet front, CAS attracted 136 corporate fleet customers, boosting turnover at its Pandan/Senoko and Ubi workshops by $88,000 and $237,000 respectively. At the close of the financial year, CAS was appointed by DBS and Citibank as the exclusive towing agent for their cardholders. Their combined membership is 250,

38 Operations Review VEHICLE DISTRIBUTION The Group s vehicle distribution operation comprises Barcelona Motors, which distributes SEAT; and Perocom Motors, which markets the Perodua marque. During the year, the SEAT Toledo remained popular while the Perodua Kembara catered to the niche market of four-wheel drives. Presently, the Group has two dealers located in the east and southeast of the island. Going forward, the Group plans to appoint more dealers for both marques in various parts of the island to achieve greater exposure and coverage. Greater emphasis will also be placed on after-sales and servicing to build brand loyalty and confidence. We expect to see better performance this year with the introduction of the award winning SEAT Leon which comes in 1.4 and 1.6 litre versions. We will also be launching the Perodua Kelisa 1.0 Manual and Automatic to provide another option for city cruising. 38

39 Operations Review Safe motoring is of paramount importance and Comfort Driving Centre started additional safety training for motocyclists. 39

40 Operations Review OTHER INVESTMENTS In FY 01/02, 10 Toyota cars were added to Comfort Driving Centre s (CDC) training fleet. Its training fleet now stands at 54 cars and 60 motorcycles. Comfort Driving Centre In the year under review, Comfort Driving Centre implemented additional safety training for motorcyclists to help them cope with wet surfaces and improve their riding skills especially at night. The Centre computerised its planning system and switched over from a manual matching system to a fully automated system to more efficiently match learners, instructors and vehicles. Other service enhancements undertaken included an Internet-enabled booking system and a self-service station that allowed its students to pay for their lessons using stored value cards. In FY 01/02, Comfort Courier Services ventured into the new markets of Malaysia and Indonesia. Strategic tie-ups were established with GD Express Sdn Bhd, the third largest domestic courier company in Malaysia and PT Royal Cargo Courier of Indonesia. These reciprocal arrangements with the Malaysian and Indonesian companies will enlarge our service network and improve sales, beyond our shores. During the year, CDC clinched the MHA Special Award 2001 and the SAF Commendation Award 2001 for its continuing support of Singapore s national service activities. It also received the SLF Model Workers Award We expect prospects for the current year to improve further as we add value to our driving centre, consolidate our resources and improve on efficiency through the adoption of ISO 9001:2000 standards. Comfort Courier Services Turnover for Comfort Courier Services almost doubled to slightly above half a million in its second year of operations, although the company has yet to make a profit. The number of delivery jobs increased by 40%, from 500 runs to 700 runs a day. 40

41 Comfort Group Ltd Annual Report 2002 Operations Review OVERSEAS INVESTMENTS Comfort s Suzhou and Xiamen taxi services stayed profitable, while its Suzhou workshop, the only authorised service centre for Toyota vehicles, made good headway in vehicle repairs. Comfort (China) Taxi operations in Suzhou and Xiamen remained profitable in FY 01/02. The Zhengzhou tour bus operations posted a 6.5% increase in turnover but has yet to return a profit. This is due to the high fixed cost and a conservative depreciation policy of 8 years for the buses. The Suzhou Petrol Kiosk established a strong base, registering profits in its first year of operations. The Suzhou workshop saw an improvement in revenues month on month but has yet to record profits due to high fixed overheads. It repaired 3,876 cars in FY 01/02, compared to 1,385 cars in FY 00/01. The growth mainly came from the increase, by four times, in the number of Toyota cars being repaired at the workshop, on the strength of its appointment as the sole authorised service centre for Toyota vehicles. Suzhou Comfort Taxi Co Ltd (SCTCL) has ventured into a new line of business, namely, trading. It has formed a joint venture, Suzhou Industrial Park Comfort Trading Co Ltd (SIPCTCL), with a local partner. The main business of the joint-venture company will be the distribution of cars and vehicle spare parts within China. 41

42 Service Initiatives As the largest taxi operator in Singapore, the Group undertook proactive steps to scale greater heights in service excellence. Driver recruitment, training, rewards and discipline went under review, with improvements introduced, all aimed at improving the overall quality of our taxi service for the benefit of our commuters. These initiatives helped improved our taxi service and more good service acts were recorded than service lapses in the year. We also came out tops in the Excellence Service Awards presented by SPRING Singapore (formerly known as the Productivity & Standards Board). Driver recruitment and discipline Driver applicants now go through 2 rounds of stringent screening and testing. Only those with good route knowledge, able to use the street directory, speak and understand English and display good service attitude are recruited. Probation for new hirers and relief drivers New hirers and relief drivers undergo a probation of 6 months and a year respectively, during which they are to keep a complaints and accidentfree record. 98% of our new drivers made the grade. Comfort Driver Guide All hirers and relief drivers are given a Driver Service Standards Guide, which lists the service standards expected of drivers. Redoubled spot checks Comfort increased its spot checks to 298 rounds in FY 01/02 (83 more than in FY 00/01) on various areas of service. Areas checked included the misuse of taxi signs, touting, pick and choose, cabby attire and helping with luggage at the airport. Taxi audits Monthly mystery audits by customers and staff started in January 2002 to monitor our taxi service and identify areas of weakness. The majority of Comfort and Yellow-Top Cab drivers did well under scrutiny. Drivers with service lapses were corrected and disciplined. Driver performance statement All drivers started receiving a 6-monthly performance statement that monitors their service performance. The first performance review period is January to March Driver uniform To present a professional image, Comfort/YTC shirts are distributed free to every new hirer and relief driver ,000 19,000 18,000 17,000 16,000 15,000 Total Number of Good Acts 7425 FY 00/ FY 01/02 Comparison of Good Acts versus Complaints 6 No. of Good Acts per 100,000 trips Drivers with Merit Points 16,801 FY 00/01 4 No. of Complaints per 100,000 trips 19,344 FY 01/02 42

43 Comfort Group Ltd Annual Report 2002 Service Initiatives Introduction of new merit points system A new merit point system was introduced in April 2002, with more weightage given to service acts and awards so as to better motivate drivers towards service excellence. Training videos Two driver videos on taxi service excellence were produced. These are screened at driver induction programmes and at waiting areas at both Sin Ming and Loyang premises to inculcate good service. TAXI FACILITIES Automated LED signs Over 8,000 taxis were installed with the new automated signs to stem out the misuse of taxi signs and eradicate pick-and-choose behaviour. Following this, the percentage of drivers booked for pick-and-choose behaviour reduced from 10% to 4% of those surveyed. Comfort Club Membership Provision of boot boxes Taxi drivers are given custom-made boxes to keep their personal items so as to free the rest of the boot for passengers luggage TAXI SERVICES Introduction of chaperon service In May 2001, Comfort introduced a chaperon service for cataract patients of Alexandra Hospital who are unaccompanied by family members. Our drivers will assist these patients all the way to their doorstep. 700 FY 00/01 FY 01/02 RESULTS EXSA Award Better driver performance The number of bouquets on taxi service increased in FY 01/ 02. Comfort registered more good acts by drivers and fewer complaints. More drivers were awarded merit points in FY 01/02, up from 16,801 drivers in FY 00/01 to 19,344. The fiscal year also saw more nominees for the Comfort Taxi Driver of the Month award and more drivers being admitted to the Comfort Club that recognises our top drivers. In 2001, two Sovereign drivers won the EXSA Star Award and Comfort and YTC drivers hauled in 222 Gold and 60 Silver awards. Our performance was the best amongst all land transport companies Star Gold Silver Year 2000 Year

44 Developing Our Human Capital STAFF TRAINING At Comfort, our employees are our most important assets. We are committed to developing their skills and expertise to meet the changing needs of a knowledge-based economy. In a concerted push toward better customer service, we emphasised customer service training, particularly for the Group s frontline staff and our team of about 200 Call Centre agents. Equal emphasis was given to cultivating a harmonious and innovative workforce. Core training areas in FY 01 /02 included customer service handling skills, service recovery, communications, creativity, problem solving and IT. In addition, functional programmes were tailored to meet the specific needs of divisions. In FY 01/02, the Group invested an average of more than 40 training hours per staff. Training expenditure came up to 4% of total payroll, meeting industry standards. In recognition of their people development efforts, Comfort Transportation and Yellow-Top Cab were presented the People Developer Standard in FY 01/02. The People Developer Standard provides a framework for a systematic process to review and develop and improve staff training effectiveness. Using this framework, Comfort and YTC analysed its employees training needs and training plans were tailored for each individual, in line with meeting the corporate business objectives. The training that I ve undergone has helped me tremendously in my job. After attending the courses on service recovery and telephone skills, I am able to attend to the needs of my customers more confidently and effectively. Sabarina Jumarubin, Customer Service Assistant, Comfort Transportation. I find the Training Needs Analysis exercise very useful. It helps my manager and I to jointly identify my areas of weakness. We can then focus on specific training programmes to improve my work performance. One of the courses, Creative In-house Publication and Newsletter, that I attended was very relevant to my job and had helped me tremendously. I was able to apply the knowledge to produce a more exciting membership newsletter. Vonnia Soh, Membership Officer, Comfort Automotive Services. In April 2002, both GAS and CAS attained the prestigious Singapore Quality Class (SQC) status for their comprehensive training programme, process management, innovative practices, and contributions towards the community and the environment. In line with the company s constant pursuit for innovation, the Quality Circle Committee seeks to promote and implement staff suggestions. Through the Staff Suggestion Scheme, staff are encouraged to look beyond their routine duties. We have had received very good ideas that were original, that helped to reduce operational costs and improve work processes and the environment. Quality Circle members also benefited from their training to think creatively and evaluate ideas critically. Adrian Tan, Maintenance Engineer, VICOM Ltd and Chairman of VICOM s Quality Circle. 44

45 Comfort Group Ltd Annual Report 2002 Developing Our Human Capital Comfort recognises that families play an important role in our employees well being. Our policies, practices and benefits reflect our commitment to help our employees achieve a healthy balance between work and family life. Our pro-family benefits include prenatal care subsidy for up to the third child, paternity leave and child sick leave. As a Family Life Ambassador (FLA), the Group is committed to promoting family life education for the development of strong and stable families. It actively promotes and organises family life, activities and education programmes to foster pro-family development. Information on externally-organised FLA activities is also disseminated to our employees through notice boards, and brochures. Comfort really looks into the staff s family benefits. When my wife delivered our second child, the Company sent a fruit basket within half an hour after I informed them. We were so touched. My elder son was granted a scholarship for his good results and it served as a big motivation for him to do better. The staff development and enrichment subsidy also helps to relieve the expenses of buying new textbooks for my child. Simon Lee, Investigation Officer, Comfort Transportation It s great the company organises family life talks for the staff during lunchtime. Especially for us who have children, it saves us the hassle of taking time out during our weekends to attend them. The topics such as communicating with your child and reducing stress at work were relevant and beneficial. Susie Yeow, Legal Division Secretary, Comfort Group DRIVER TRAINING As our key partners, Comfort and YTC drivers training needs were given top priority. Close to 900 drivers successfully completed the 9-month Skills Redevelopment Programme (SRP) in FY 01 /02 and another 410 drivers have embarked on the SRP programme. This training will equip our cabbies with the skills to deliver good taxi service under all circumstances. Drivers can also opt to learn a foreign language as well as learn the finer points of delighting a foreign visitor. To stress road safety, some 700 drivers were identified for additional road safety training, with trainees keeping better driving record after the training. I think it is important for taxi drivers to become knowledge-based workers. One of the core SRP competencies taught me the many ways of listening. Now, I listen patiently to a passenger s instructions and ask appropriate questions. If a driver were to pick up the knowledge gained through SRP and apply it, I think he would improve a great deal. I have improved a lot since attending SRP. Comfort Cabby Lee Tat Meng I appreciate the language lessons that SRP offers. Even though I had little education, I have picked up better English through the lessons. I have also started studying Japanese to help make Japanese passengers feel at ease. I would love to continue learning if I have the chance. Comfort Cabby Low Hian Tee 45

46 Caring for Our Society In April 2001, Comfort Group became one of the pioneer companies to be admitted to the Half Percent Club, an initiative mooted by Prime Minister Goh Chok Tong. Members of the Club will channel at least half a percent of their profit after tax toward projects that will benefit our society. Fulfilling this commitment, Comfort contributed close to $700,000 towards several initiatives that benefited the disabled, the aged, the needy and the motoring public. It helped raised another $120,000 from its business associates for the President s Challenge In the same year, Comfort Transportation was presented the Corporate Gold Award by His Excellency President SR Nathan, in recognition of its contribution to the Community Chest. The Group s Comfort Handicare Cab Service saw an increase in demand for its services with 750 trips made per month, up from about 500 trips the year before. An annual amount of $100,000 is set aside to fund the requirements of the disabled who are members of the Handicaps Welfare Association. The success of the Comfort Handicare Cab Service has given rise to another door-to-door service for cataract patients going to Alexandra Hospital for their operations. The service ensures that patients are accompanied to the hospital and home under the care of a trained driver who also acts as a chaperon. To help keep the roads safe for all users, Comfort Transportation supported the annual Anti Drink Drive Campaign spearheaded by The Traffic Police in November The following month, our taxis provided 250 free trips to transport gifts donated by the public to beneficiaries of the Sharity Gift Box. This is the fifth consecutive year Comfort served as the programme s official transport company. In support of the labour movement, the Group contributed $100,000 towards the NTUC May Day Celebrations. The welfare of our drivers and their families were also taken care of. Comfort awarded $220,000 worth of scholarships to our drivers children pursuing primary to tertiary education. This is a 29% increase from the $170,000 granted last year. To provide our drivers with a better environment to rest, we refurbished the Hougang District Taxi Kiosk at a cost of $130,000. Cabby Ng deserves 5 stars rating for always cheering me up whenever I had to go to the hospital. He isn t just a taxi driver but an uncle to me. Handicaps Welfare Association (HWA) s member, Mr Lim Fook Chiong on Cabby Ng Yew Wah who ferries HWA members to and from homes to their work places, or to the hospital for their physiotherapy sessions. I have met a few good Handicare drivers before but Cabby Ang left me with the deepest impression. It s really so rare to find someone like him in this hustle and bustle society. I was touched to tears by his kindness. Touched by relief driver Cabby Ang Yeow Chuan s compassion towards her, Ms Virginia Inton, another member of Handicaps Welfare Association, wrote to Comfort Transportation to commend him as a cabby extraordinaire. 46

47 Comfort Group Ltd Annual Report 2002 Group Financial Highlights Year Ended Year Ended Mar 02 Mar 01 Change Change $ 000 $ 000 $ 000 % Turnover 1st Half 227, ,102 28, nd Half 227, ,546 11, Total 454, ,648 39, Operating Profit (Before Associates Results) 1st Half 42,779 40,512 2, nd Half 45,545 38,022 * 7, Total 88,324 78,534 * 9, Share of Results of Associates 1st Half (54) (8.5) 2nd Half Total 1,228 1,279 (51) (4.0) Dividend, Interest & Other Income 1st Half 3,081 2, nd Half 2,583 2,902 (319) (11.0) Total 5,664 5, Profit Before Taxation 1st Half 43,358 41,145 2, nd Half 46,194 38,668 * 7, Total 89,552 79,813 * 9, Profit Attributable to Members of the Company 1st Half 31,883 30,080 1, nd Half 36,135 28,873 * 7, Total 68,018 58,953 * 9, As at 31 March Shareholders Funds 481, ,350 * 49, Fixed Assets 515, ,885 4, Other Long-Term Assets 46,596 36,777 * 9, Current Assets 173, ,859 38, Current Liabilities 160, ,610 * (3,761) (2.3) Long-Term Liabilities 80,040 73,573 # 6, Minority Interests 13,799 12,988 # Financial Ratios Earnings After Tax & MI But Before Extraordinary Item Per Share (S cents) * Earnings After Tax, MI & Extraordinary Item Per Share (S cents) * Net Tangible Assets Per Share (S $) * MI = Minority Interests * Figures have been adjusted to comply with the new and revised requirements of SAS 10 & 34. # Figures have been reclassified to conform with the current financial year s presentation. 47

48 Five-Year Financial Summary Year Ended Year Ended Year Ended Year Ended Year Ended Mar 98 Mar 99 Mar 00 Mar 01 Mar 02 $ 000 $ 000 $ 000 $ 000 $ 000 Turnover 278, , , , ,550 Profit Before Tax 33,916 36,073 62,854 ** 79,813 ** 89,552 Profit After Tax And Minority Interests 18,485 20,038 44,605 ** 58,953 ** 68,018 Net Final Dividends 4,926 4,926 11,954 13,693 18,902 Group Balance Sheet Fixed Assets 388, , , , ,821 Associated Companies 20,894 9,704 11,541 19,010 20,471 Other Investments 12,821 11,246 7,892 9,815 16,732 Other Long-Term Assets 9,982 9,559 8,505 ** 7,952 ** 9,393 Current Assets 90,855 89, , , ,534 Current Liabilities (87,563) ** (97,517) ** (144,204) ** (164,610) ** (160,849) Long-Term Liabilities (87,937) (105,092) (74,946) (73,573) * (80,040) 347, , , , ,062 Represented by : Issued Share Capital 133, , , , ,942 Share Premium 93,597 93,597 94,023 27,170 28,924 Non-distributable Reserves 10,661 10,615 10,383 8,206 9,067 Retained Profits 98,414 ** 113,519 ** 159,323 ** 195,393 ** 241,330 Shareholders Fund 335, , , , ,263 Minority Interests 11,797 13,075 13,551 12,988 * 13,799 Deferred Income , , , , ,062 Financial Ratios Earnings After Tax & MI But Before Extraordinary Item Per Share (S cents) # ** 7.35 ** 8.45 Earnings After Tax, MI & After Extraordinary Item Per Share (S cents) # ** 7.35 ** 8.45 Gross Dividend Per Share (S cents) # Net Tangible Assets Per Share (S $) # 0.41 ** 0.43 ** 0.49 ** 0.53 ** 0.58 Return On Average Shareholders Funds (%) 5.61 ** 5.84 ** ** ** MI = Minority Interests * Figures have been reclassified to conform with the current financial year s presentation. ** Figures have been adjusted to comply with the requirements of the new and revised accounting standards. # The figures up to year ended 31 March 2000 have been adjusted for the effect of the bonus issue. 48

49 Comfort Group Ltd Annual Report 2002 Five-Year Key Performance Indicators Business Operation Turnover (S$ 000) 454,550 The higher turnover was the result of the increase in the ratio of larger taxis, expansion in the bus operation through progressive acquisitions of businesses from other bus operators, as well as increase in business activities in vehicle servicing, diesel sales, vehicle inspection and assessment. 323, , , , Year ended March Operating Profit Before Depreciation & Interest ( OP ) (S$ 000) 194,919 The increased business activities of the core business, cost containment measures taken and better performance from the investment companies have contributed to the higher operating profit in the current financial year. 109, , , , Year ended March Profit Before Tax (S$ 000) 89,552 Profit before tax improved by $10 million to $90 million. Apart from the improvements recorded at the OP level, the increase in depreciation was lower than that of the previous year. With the more moderate increase in depreciation, improvements at the OP level was able to provide a more meaningful contribution at the profit before tax level. 79,813 62,854 33,916 36, Year ended March 49

50 Five-Year Key Performance Indicators Financial Strength Shareholders Funds The continued profitability of the Group s operation has contributed to the increase in the shareholders funds. (S$ 000) 481, , , ,865397, Year ended March Shareholders Wealth Earnings after Tax and Minority Interests but before Extraordinary Item per share (S Cents) Each Comfort Group Ltd ordinary share ( Comfort Share ) generated an earnings of 8.45 cents. This is substantially higher than that achieved in FY 00/01 of 7.35 cents Year ended March Return On Average Shareholders Fund (%) The Group s repeated strong performance had contributed to a higher return on shareholders investment in the business of the Group. Shareholders investment is represented by the Group s shareholders funds. The return on average shareholders funds for FY 01/02 rose to 14.91% against 14.23% recorded in FY 00/ Year ended March 50

51 Comfort Group Ltd Annual Report 2002 Five-Year Key Performance Indicators (S Cents) Net Tangible Assets Value Per Share 58 By reinvesting a substantial portion of the earnings in the business, the Group has strengthened the asset backing of each Comfort Share. At the end of FY 01/02 each Comfort Share is backed by 58 cents worth of tangible assets. This is an improvement of 5 cents over that of FY 00/ Year ended March Dividend Payment on the par value of 25 cents per ordinary share (S Cents) Dividend is one of the tangible return on investment shareholders can expect to receive. In FY 01/02 the Directors have revised the policy, thereby increasing the percentage of the Group s profit after tax and minority interests to be distributed as dividend, from 30% to 40%. A final gross dividend of 3 cents per share is recommended for FY 01/02. The total gross dividend payment for FY 01/02 would amount to cents per share against 3.5 cents per share for FY 00/ Year ended March Dividend Yield per ordinary share (S Cents) (%) Although gross recommended dividend per share in FY 01/02 would be 25% higher than the payout in FY 00/01, dividend yield however would be marginally lower at 5.95% in FY 01/02 against 6.03% in FY 00/01. This was attributed to a significant appreciation in Comfort share price, from 58 cents per share in FY 00/01 to 73.5 cents per share in FY 01/ % % % 2.63% 1.34% Year ended March Closing Share price the day after announcement of final results Gross Dividend per share Dividend Yield 51

52 Five-Year Key Performance Indicators SEGMENTAL REPORT Turnover Turnover (S$ 000) % of Turnover % of Turnover from Non-Taxi Operations 278, , , , , , , , , , Year ended March $454.5m $414.6m $323.3m $358.8m $278.9m Year ended March 73 19% 21% 19% 25% Year ended March 27% Non-taxi Taxi Non-taxi Taxi Vehicle Servicing & Diesel Sales Vehicle Inspection & Assessment Other Activities Note: For year ended Mar 98, turnover from vehicle inspection had been included under vehicle servicing. Taxi turnover has achieved continuous growth in the last 5 years. However, non-taxi operations have progressively contributed more towards the Group s turnover. The main increase in non-taxi operations came from vehicle servicing, repairs and diesel sales. Operating Profit Before Interest and Tax Operating Profit Before Interest & Tax (S$ 000) % of Operating Profit Before Interest & Tax % of Operating Profit Before Interest & Tax from Non-Taxi Operations $33.4m $37.5m 87,525 $61.7m $77.5m $87.5m 77, , , ,521 50,002 55, ,981 44, , Year ended March Year ended March Non-taxi Taxi Non-taxi Taxi -29% % % Year ended March 36% 36% Vehicle Servicing & Diesel Sales Vehicle Inspection & Assessment Other Activities Note: For year ended Mar 98, profit before interest & tax from vehicle inspection had been included under vehicle servicing. Profit growth from non-taxi operations has improved tremendously and has contributed a significant portion to the current year s profit. The growth in the profit from non-taxi operations is in tandem with the increase in the turnover from these businesses. 52

53 Comfort Group Ltd Annual Report 2002 Share Price Movement Price S$ Comfort Daily Closing Share Price, Volume and 20-Day Moving Average 2 April 2001 to 27 May 2002 High: S$0.765 Low: S$0.515 Ave Volume: 725,180 Comfort 20 Day MA Volume Volume Apr 2001 May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Relative Performance of Comfort Weekly Share Price Movement Against BTSRI, STI & MSCI (S pore) 140 Comfort STI BTSRI MSCI Apr 2001 Comfort ST Index BTSRI MSCI (S pore) 2 April 2001 to 27 May Apr-01 $ , May-02 $ , ,007 Change 47.57% 4.43% 9.05% 3.39% May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May