our vision our mission our commitment - zaobao.comfor the third year in succession, the group...

Comfort Group Ltd Annual Report 2002

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.

Our Commitment

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Our Vision

Our Mission

• We envision the Comfort Group of Companies as a homegrown conglomerateplaying a significant role in land transport-related business locally and regionally.

• We aim to be the leading provider of land transport-related services to the public.

Mission Statement

Chairman’s Statement

The Group’s turnover increased by $39.9 millionto $454.5 million, a rise of 9.6%.

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FINANCIAL PERFORMANCESince our initial public listing in 1994, the yearunder review is the best year of our performance.For the third year in succession, the Groupachieved high growth rates in both its turnoverand profitability. The turnover touched a recordfigure close to $455 million. This is about 10%above that of the last financial year. Operatingprofit before depreciation, interest onborrowings, tax and minority interests almost hitthe $200 million mark with a handsome figureof $197 million, approximately 9% in excess ofthe last financial year. Taking into account thesignificant amount of depreciation, interest onborrowings, tax and minority interests, the sumthat is attributable to shareholders stands at$68 million. This is a 15% increase over thepreceding year. Indeed, these are remarkableresults for our business which is perceived to belimited in growth by the uninformed.

Direct taxi service contributed about 73% of theGroup’s turnover but only 64% of the operatingprofit before interest and tax. The non-direct taxiservice businesses such as vehicle repairs andmaintenance, diesel sales, vehicle inspections anddriver education contributed about 27% of theturnover but a higher 36% of the operating profitbefore interest and tax. We expect thecontributions from these non-direct taxibusinesses to increase in future years.

For the year under review earnings per share ofpar value 25 cents is 8.45 cents compared to7.35 cents a year ago. This is a 15% increase.

I am very pleased to write this statement. It is yet another recordyear for the Comfort Group despite the recession and theconsequential difficulties faced by so many organisations. It iscommendable that the Group has excelled and continued to achievegood profit despite the tough economic environment.

Net tangible asset per share reached 58 cents,about 10% improvement over the last financialyear. The shareholders’ funds of $481 million isabout 12% higher than the position a year ago.What is striking, however, is that the return onthe average shareholders’ funds came close to15%. This is, by no means, an easy feat, in today’slow interest rate environment.

DIVIDENDYour Board is very conscious of its healthy cashstatus. Last year, I said that we would distributeat least 30% of the profit after tax and minorityinterests for dividend payment and I stressed thatthis policy was sustainable. I am very pleased toannounce that your Board is more confident thanever and has decided to increase this percentageto 40%. Accordingly, a final gross dividend of3 cents per share is recommended for yourapproval at the forthcoming Annual GeneralMeeting. Together with the interim gross dividendof 1.375 cents per share paid in January 2002,the total expected dividend for the entire yearwould amount to 4.375 cents per share,representing 17.5% of the par value of eachshare. This is a vast improvement of 25% overthe preceding year of 3.5 cents per share.

In years when exceptional profits are made,special dividends would be declared. I amdisclosing this fact earlier so that your Board iscommitted to sharing the fruits of its labour withthe shareholders.



BUSINESS REVIEWTaxi OperationsThe excellent results achieved by our taxi servicesare very commendable despite the fact that ourtaxi rental was not increased during the yearunder review. However, we were granted 200additional new taxi licences by the authorities inOctober 2001, six months after the financial yearhad begun. We could only release 60 taxis bythe end of the financial year as there is a gap inthe timing between the availability of the licencesand the purchase of the new vehicles. Theremaining 140 taxi licences were fully used byMay 2002.

One hundred of the new taxi licences weregranted to Comfort Transportation Pte Ltd whilethe other 100 were allocated to our Yellow-TopCab Pte Ltd. On top of that, our Yellow-Top fleetincreased by another 53 taxis, from the purchaseof taxi licences in the open market. Our totalfleet today stands at 11,330 with 10,100 in thestylish blue colour and 1,230 in the yellow andnavy blue code.

In terms of proportion by size, close to 60% ofour taxis are of large capacity, a trend that is fastemerging from the popular demand of thecustomers. This is an increase of 14% pointcompared to the position a year ago. The targetof achieving 80% large taxis in 2004 remainsattainable.

Providing quality, prompt, reliable, consistent andsafe taxi service is our hallmark. Our ComfortCabLink with two call centres running 24-hoursnon-stop maintained the record 8.1 millionbookings achieved in the previous financial year,despite the economic downturn. We were ableto attain this as more of our taxis were equippedwith the taxi booking facility. I am pleased to saythat the success rate is also higher at 85%.

The number of bookings from the variousautomated means of cab bookings continued toclimb, with some 640,000 successful bookingsmade through the automated means, a rise of6.4%. A new 3-step booking called FastCall wasintroduced in July 2001, followed by the launchof *Send-A-Taxi at the start of the new financialyear. Both of these automated modes of taxibooking are able to track the users’ location andwe expect them to gain popularity amongst taxiusers.

For regular users who depend on taxi as a primarymeans of transportation, prior booking isemerging to be the norm. Our personalised landtransport delivery system is different from themass rapid rail and scheduled bus services. Thishas to be the case and the price mechanismwould continue to be employed to differentiatethe usage. In restaurant terms, we are, in fact,providing an a la carte service whereas the MRTand scheduled buses are providing buffet services.The a la carte service must rightly be moreexpensive than the buffet service as it is tailoredto the specific needs and preference of thecustomers.

Other than having measures driven bytechnological advancement and innovation, thehuman aspect of our delivery system was alsogiven greater management attention. Regulartraining and re-training programmes, togetherwith the carrot and stick approach to our taxidrivers, helped to ensure that the human aspectof the service is further enhanced and improved.

In financial terms, turnover from the taxi serviceswent up to $330 million, a modest 6.3% increaseover the last financial year. But operating profitbefore interests and tax but after depreciationincreased by close to 12% to about $56 million.These facts speak well of the internal efficiencyachieved and the excellent measures undertakenby the Management.

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Bus OperationsThe Group has all along been a small bus operatorwith its fleet having small capacity vehiclescompared to the scheduled buses. The Board,however, believes that there is a potential marketfor unscheduled buses for workers, organisationsand schoolchildren. Presently, the market issizeable but it has too many small operators.

With this in mind and after our initial acquisitionsof bus fleets from private bus companies in thelast financial year, the Group made further inroadswith more acquisitions during the period underreview. Our fleet has expanded from 187 busesto 288 by March 2002. A target of growing ourfleet to 500 buses is planned in the coming year.By then, the operation would achieve aneconomy of scale. As it is, we are already thelargest single-owner private bus operator. Foraccountability, we have incorporated a wholly-owned subsidiary, Comfort Bus Pte Ltd, toundertake this business.

Based on our existing policy of a 10-yeardepreciation against a statutory life of 20 yearsfor private buses, this sector turned in a smallloss of $1.1 million even though its turnover hadincreased threefold to $12.2 million from$4.6 million. We are, however, confident, thatas we review our depreciation policy and expandour fleet and hence having a larger share of themarket, our performance should improve.

Vehicle Repairs & Maintenance & Diesel SalesTo put our taxi and bus fleets on the roadsefficiently and in roadworthy conditions, weservice, maintain and repair our vehicles on aplanned and regular basis. We also contract to


outside parties a small portion of our vehicles. Inaddition, we also undertake third party repairsand servicing jobs, spare parts sales andwindscreen replacements for private vehicles inour five workshops scattered around the island.

Parallel to our bus fleet expansion, the servicingand maintenance of our buses are also part ofthe growth in this business sector.

Diesel sales to our taxi and bus drivers is anotherunique feature of our overall managementsystem. Through these means, we are able toobtain an economy of scale in the sale of dieselto our taxi and bus drivers. With seven centreslocated in convenient spots all over the island,we sold 79.2 million litres of diesel to our taxidrivers during the year under review. This is 30%higher than last year’s figure. Though fastbecoming a habit, we provided only 50% of ourtaxi fleet consumption. There is still a vast scopefor growth in this sector.

The consumption of diesel by our bus fleetamounting to about 3 million litres a year hadyet to be fully met. Presently, we supply only43% of the requirements. This is withoutconsidering the bus fleet expansion programme.

Turnover for these combined vehicle repairs &maintenance & diesel sales sectors reached$111 million during the period under review. Thisis 14% better than last year. In terms of operatingprofit, it is about $21 million, which is 13% higherthan the preceding year and contributes about24% of the Group’s operating profit beforeinterest and tax.

Comfort Vehicle AdvertisementsIn an attempt to accurately reflect itsperformance, vehicle advertisement salesassumed a new dimension with the incorporationof a wholly-owned subsidiary, Comfort Ads PteLtd, towards the end of the financial year inFebruary 2002. Nevertheless, during the periodunder review, this business sector suffered someeffects of the recession and generated a lowerturnover of $6.1 million and an operating profitof $1.2 million, compared to the respectivefigures of $7 million and $1.8 million in thepreceding year. However, it is anticipated thatwith the recovery of the economy and an increasein large capacity taxis together with expansion inour bus fleet, this sector has potential for furthergrowth.

Vehicle InspectionsVICOM Ltd, our listed subsidiary, also had a goodyear. Its turnover increased by 37% to$14.7 million. Its operating profit before interestand tax also went up by 41% to $6.9 million. Afull report of VICOM Group’s achievements iscontained in its own Annual Report.

Learner Driver EducationComfort Driving School continued to post growthin its turnover, up to $13.6 million from$13 million, a modest rise of 4.6%. However,the operating profit before interest and taxincreased substantially from $2 million to$2.6 million, a rise of 30%. This business sectoris not directly related to our main core business.A review would be undertaken to position its role.

Other Minor BusinessesOur car distribution business continued to beprofitable. Its turnover had declined to$11.4 million from $14.9 million. Likewise, its

operating profit before interest and taxalso dived to $0.1 million compared to$0.8 million a year ago. To help push salesthrough greater brand exposure and awareness,plans are underway to appoint more dealershipsfor both our makes SEAT and Perodua.

Still in its infancy, the courier service businessachieved a turnover of $0.5 million, which is 74%better than last year. During the period underreview, the business had successfully entered intostrategic tie-ups with a Malaysian and anIndonesian courier companies. It is envisaged thatthe customer base would expand in the yearahead and that our brand would add weight tothe service provided.

Our only remaining property project in Simei hadreported sales of up to 74%. TemporaryOccupation Permit was granted in April 2002.Its performance had no relevance to our Group’sturnover and profitability.

OVERSEAS VENTURESOur earlier investments of small fleets of taxis inSuzhou and Xiamen continued to be profitable.However, the tour bus operations in Zhengzhoucontinued to incur some small losses. But ourother investments in Suzhou petrol kiosk andworkshop 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 anexperience which would benefit the Group in itsdeclared expansion plans in the PRC in the lightof her entry to the World Trade Organization(WTO).


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Last year I mentioned that we took a 25% stakeamounting to $9.3 million in a Hong Kong basedcompany, Trans-Island Limousine Service Limited.The Company provides coach and limousineservice between the new Hong Kong airport andthe various hotels in the city. It also engages incross-border bus operations between Hong Kongand the various large cities in the southernGuangdong Province. Again, the profitability hasno significant impact on the Group in the shortterm but complements the Group’s activities inthe PRC.

We also have an investment of $4.7 million inGerman Automobiles Pte Ltd which holds boththe international Hertz car rental franchise as wellas the distributorship of BMW vehicles in PRC.The company has recently been successfully listedon the Stock Exchange of Hong Kong under thename G.A. Holdings Limited. While our 19%stake has been diluted upon its flotation to15.42%, based on the initial offer price per GAshare of HK$0.50 against our cost of HK$0.3325per GA share, we have a modest unrealised gain.

In August 2001, Comfort Transportation took a15% equity stake in a Taiwan based company,Transportation High Tech, Inc. Its business planis that of a call centre, modelled on our ownComfort CabLink for a fleet of 10,000 taxis inTaiwan. It has yet to commence operations.Again, this is considered as the seed for ourexpansion into the Taiwan market in future. Ourinvestment is of the order of $2 million.

To-date, our total investments abroad stand at$22.8 million, representing about 4.7% of ourtotal shareholders’ funds as at the close of thefinancial year.

CORPORATE GOVERNANCEThe year under review witnessed intensive publicdebates and discussions on the subject ofcorporate governance, both locally andworldwide. I mentioned in the Chairman’sStatement last year that at the SeniorManagement Seminar, I had stressed to our staffthat we were a public listed company and thatwe were responsible to all our shareholders, andthat the Singapore Labour Foundation and theunions were not the only shareholders. I urgedmanagement to adopt market practices of doingbusiness like rewarding staff and streamlining ourprocedures. I am pleased that improvements hadbeen made in these areas.

With the impending implementation of the Codeof Corporate Governance, we had establishedthe Nominating Committee and revamped theAudit Committee. We already have theRemuneration Committee. In addition, we alsohave an Executive Committee. In fact, sinceinception, we have taken the position that theChairman of the Board and the Chief ExecutiveOfficer should be separate persons. Such hasbeen our effort to demonstrate accountability andtransparency.

Because of our historical past and its noblemission and the unique situation of our taxibusiness in Singapore, which is still the bulk ofour operations, I had stressed to our managementthat a meaningful and rewarding balance hadto exist among the authorities (which provide thetaxi licences), our taxi operator partners andmanagement. We therefore have to be a goodand responsible corporate citizen. Donations tothe handicapped, education and labourmovement have to be part and parcel of our


commitments and responsibility. Looking after thewelfare of our taxi drivers has to be our primeconcern, for after all, they are the people whorent our taxis and serve the public.

The Code also deals with the responsibility andtraining of the directors. Our directors attendvarious courses. They are also provided withrelevant articles appearing in internationalbusiness journals so that they can be kept abreastof new developments. I also urged that the twobooklets produced by NTUC in conjunction withtheir 40th anniversary, namely “Stretching theDollar” and “Managing the Crisis”, be prescribedreadings for the directors and senior staff.

Though the Group is not yet affected by theapproved recommendations of the Disclosure andAccounting Standards Committee, the Board hasdecided that we should proceed with quarterlyreporting of our financial results commencing thisfinancial year. We are therefore a year ahead ofschedule. Coupled with that, we also want torelease these quarterly results within 45 daysinstead of the recommended 60 days after theperiod ended. For this, we are two years aheadof schedule. As we have already preparedourselves for these events, we see no reason whywe should not implement them earlier.

GROWTH AND PROSPECTSNo doubt taxi service is our main core business,there is always scope for further profitability aswe improve our efficiency and operation system.Once in a while, there is an increase in new taxilicences granted by the authorities. The recentrelease of 200 new taxi licences is a case in point.As population and tourist arrivals increase, thistrend is expected.

But related to taxi service, growth in diesel salesand vehicle repairs are real and should beexploited. Vehicles advertisement is anotherpotential source of growth.

We also do not rule out being a significant playerin bus operations as we expand and acquireexperience and expertise in running larger andbigger fleets. We believe that we can carve outa niche in this area. The Board has thereforedecided to set aside $80 million for the next twoyears 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 ofopportunity for the Group to play a larger andmore active role in that vast country. Besides taxiservice, branded car rental business targeted atforeign businessmen and tourists to the PRC, andforeign and local car distributions earmarked forthe more affluent locals are areas that the Groupwould be exploring. A sum of up to $100 millionwould be allocated for investments in thesesectors in the PRC.

I want to assure our shareholders and investorsthat we do not expand for the sake of expansion.Neither are we risk adverse. We make calculatedrisks and move with care, caution and optimism.Much is expected of management to deliver sincefinancial resources have been allocated formeaningful investments in our core and its relatedbusinesses. We promise to stay focused and itwill be the Board’s responsibility to ensure thatthis is so.


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Lim Jit PohChairman

Note: Previous year’s figures were adjusted to comply with the revised and new accounting standards.


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The recent budget announcement on revision ofsome taxes like the revised Additional RegistrationFee, Excise Duty Rate and changes to thePreferential Registration Fee, would result in anoverall capital cost increase of taxis in Singapore.This can be mitigated partly by the reducedcorporate tax rate, and hopefully a fall in thePrevailing Quota Premium. Nevertheless, theBoard is of the view that the impact is notexpected to be significant in the near term.

Barring any adverse change in circumstances, theBoard expects another year of profit growth.

APPRECIATIONOur recent successes would not have beenpossible if not for the strong support of theGovernment which has confidence in us inrunning the largest taxi fleet in Singapore, our22,000 strong taxi and bus drivers, ourhardworking and dedicated staff and our


sympathetic and understanding labourmovement. On behalf of the Board, I wish toexpress my deepest appreciation to all of them.

We are pleased and proud that three of ourdirectors were elected to the Parliament in theGeneral Elections held on 3 November 2001. Irefer to Dr Wang Kai Yuen, Mr Ong Ah Hengand Mr Heng Chee How. Unfortunately, Mr HengChee How’s success is our loss. Upon his electionas a Member of Parliament, he was made Mayorof Central Singapore District. He left us on 15December 2001 after having been with the Boardfor about five years. On behalf of the Board andManagement, we wish him greater success in hismore urgent and demanding tasks ahead.

Finally, I wish to thank all my fellow directors fortheir untiring guidance and counsel. It has beena pleasure working with a very independent-minded board made up of people fluent and wellversed in business, finance, management and theground.

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Mr Goh Chee WeeGroup Managing Director/Chief Executive Officer

Mr Lim Jit PohChairman

Lim Jit Poh, appointed as Director in 1993 andChairman of the Board in 1999, is also Chairmanof the Executive Committee and theRemuneration Committee. Mr Lim is alsoChairman of VICOM Ltd as well as a director ofL.C. Development Ltd, DelGro CorporationLimited, The Ascott Group Limited, InchemHoldings International Limited and HBM Print Ltd.All these are public companies listed on theSingapore Exchange.

Lim Jit Poh was a former top civil servant and aFulbright scholar. He was awarded the PublicAdministration Medal by the Government ofSingapore in 1972 and three awards by theNational Trade Union Congress, namely Friendof Labour Award in 1986, Meritorious ServiceAward in 1990 and Distinguished Service Awardin 2000. Mr Lim is a Member of the Council ofthe National University of Singapore, a Trusteeof the Singapore National Employers Federationand a Council Member of the Singapore ChineseChamber of Commerce & Industry.

Goh Chee Wee, appointed as Group ManagingDirector in 1997 and redesignated as GroupManaging Director/Chief Executive Officer in 2000,is also Member of the Executive Committee and theRemuneration Committee. He is also the DeputyChairman/Chief Executive Officer of the Group’spublic listed subsidiary VICOM Ltd.

Prior to joining Comfort Group Ltd, he was theMinister of State, Ministry of Trade & Industry andthe Ministry of Communications and a Member ofParliament for the Boon Lay Constituency and DeputyGovernment Whip. He is currently the Chairman ofBoard of Trustees of NTUC and NTUC Administrationand Research Unit. Mr Goh is also a Director of theSingapore Labour Foundation and the Ong TengCheong Institute of Labour Studies. Mr Goh isChairman of NTUC Media Co-operative Limited,Chairman of Board of Trustees of Singapore NationalCo-operative Federation Ltd and Deputy Chairmanof NTUC FairPrice. He is the Chairman of GA HoldingsLtd, a company listed on the Stock Exchange of HongKong. He is also a Director of Stamford TyresCorporation Limited, Tye Soon Limited, Chip EngSeng Corporation Ltd and King Wan CorporationLimited, all of which are public listed companies.

Board of Directors

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Mr John Loo Say LinDirector


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Dr Wang Kai YuenDirector

John Loo Say Lin, appointed as Director in1993, is also Chairman of the AuditCommittee and a member of theRemuneration Committee.

He is Managing Director of Elpiji (S) Pte Ltdand a Director of several companies inSingapore, Vietnam and the People’s Republicof China in consultancy, oil and gasengineering, and health products. Mr Loowas awarded Friend of Labour Award Medalby NTUC in 1980 and the Rochdale Medalby the Singapore National Co-operativeFederation Ltd in 1993.

< Dr Wang Kai Yuen, appointed as Director in1993, is Chairman of the NominatingCommittee and a member of the ExecutiveCommittee.

Dr Wang is a Member of Parliament for theBukit Timah Single Member Constituency. Heis also the Managing Director of XeroxSingapore Software Centre and the Chairmanof Xpress Holdings Ltd. Dr Wang also holdsdirectorships at SuperBowl Holdings Ltd, AsianMicro Holdings Ltd, Hong Lai Huat GroupLimited, Nylect Technology Ltd and COSCOInvestment (Singapore) Ltd.

Board of Directors

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Mr Pang Kim HinDirector

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Dr Ho Kah LeongDirector

Pang Kim Hin, appointed as Director in 1993, is alsoa Member of the Nominating Committee and theAudit Committee.

He is Executive Chairman of Hong Kong-basedMother & Child Limited. He also holds directorshipsin local and overseas companies in retailing,warehousing and investment, including being a non-Executive Director of public listed Asian MicroHoldings Ltd.

He was awarded the Friend of Labour Award in 1980and the Meritorious Service Award in 1993 by NTUC.

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 tothe Minister for the Environment. Currently, heserves as Principal of the Nanyang Academy ofFine Arts and a Director of SuperBowl HoldingsLtd, G&W Group Holdings Limited, Nanyang FineArts Foundation Ltd, Sculpture Square FoundationLtd, Parkway Healthcare Foundation Ltd, GreenWorld Holdings Ltd, Dayen Environment Ltd andAng Mo Kio Hospital Ltd.

He is a celebrated artist in Singapore and thePresident of Singapore Arts Federation.

In 2001, he was conferred the PhD in Doctor ofPhilosophy in Arts, Honoris Causa, by WisconsinInternational University, USA.


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Mr Ong Ah HengDirector

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 NeeSoon Central Single Member Constituency. Heis also Assistant Secretary-General, NTUC,Director, Community DevelopmentDepartment and Executive Secretary of theNational Transport Workers’ Union. He is aDirector of Singapore Post.

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Ms Nancy Teo Geok Har

Nancy Teo Geok Har, appointed as Director in1995, is also a member of the ExecutiveCommittee and the Nominating Committee.

She is Chief Executive Officer of the SingaporeLabour Foundation and a Director of Pasir RisResort Pte Ltd, SLF Leisure Enterprises Pte Ltd,SLF Management Services Pte Ltd, SLF PropertiesPte Ltd and other private companies and NTUCco-operatives in the property, leisure and serviceindustries. She is also a Director of VICOM Ltd.

Board of Directors

Board Of DirectorsLim Jit Poh, ChairmanGoh Chee Wee, Group Managing Director / Chief Executive OfficerJohn Loo Say LinWang Kai YuenPang Kim HinNancy Teo Geok HarHo Kah LeongOng Ah Heng

Company SecretaryDoreen Nah

Board Executive CommitteeLim Jit Poh, ChairmanGoh Chee WeeWang Kai YuenNancy Teo Geok Har

Audit CommitteeJohn Loo Say Lin, ChairmanPang Kim HinHo Kah LeongOng Ah Heng

Subsidiaries Not Audited by PricewaterhouseCoopers

Subsidiary Companies AuditorsSuzhou Comfort Taxi Co., Ltd Suzhou Dongwu CPAXiamen Comfort Taxi Co., Ltd Xiamen Yong He Certified Public Accountants Co., LtdZhengzhou Comfort Tour Bus Service Co., Ltd Tian Yi Certified Public Accountants Co., LtdSuzhou Industrial Park Zhong Xing Suzhou Dongwu CPA Comfort Petrol Service Station Co., Ltd

Remuneration CommitteeLim Jit Poh, ChairmanJohn Loo Say LinGoh Chee Wee

Nominating CommitteeWang Kai Yuen, ChairmanPang Kim HinNancy Teo Geok Har

Share RegistrarBarbinder & Co Pte Ltd8 Cross Street #11-00PWC BuildingSingapore 048424

AuditorPricewaterhouseCoopersCertified Public Accountants8 Cross Street#11-00 PWC BuildingSingapore 048424Date of Appointment: 7 September 1993

Partner-in-charge: Lim Seow Chiang

Corporate Information

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OTHER INVESTMENTS

REGIONAL NETWORK

Comfort (China) Pte Ltd[Trans-Island Limousine ServiceLimited (Hong Kong)]

* Listed on the Singapore Exchange Securities Trading Limited** Listed on the Stock Exchange of Hong Kong

[Boon Lay Executive Condominiums Pte Ltd][NCH (Tampines) Pte Ltd]

100%25%

7.01%30%

20.13%

ST Mobile Data Pte Ltd

Comfort Courier Services Pte LtdComfort Nominees Pte LtdComfort Group Investments Pte LtdComfort Properties Pte Ltd

100%100%100%100%

Core BusinessSubsidiariesAssociated Companies

Strategic Investments

[ ]

Suzhou Comfort TaxiCo. LtdXiamen Comfort TaxiCo. LtdZhengzhou ComfortTour Bus Service Co.LtdG.A. HoldingsLimited**[SLF InternationalPte Ltd]

70%

70%

80%

15.42%

20%

Suzhou IndustrialPark Zhong XingComfort PetrolService Station Co.,LtdSuzhou IndustrialPark ComfortTrading Co Ltd

90%

25%

Suzhou Comfort -Toyota VehicleAuthorised ServiceCentre (A registeredbusiness division ofSuzhou Comfort TaxiCo. Ltd)


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LEARNER - DRIVER TRAINING

VEHICLE DISTRIBUTION

TAXI & BUS OPERATIONS & RELATED SERVICES

100%100%100%100%

Comfort Transportation Pte LtdYellow - Top Cab Pte LtdComfort Bus Pte LtdComfort Ads Pte Ltd

51% VICOM Assessment Centre Pte Ltd100% VICOM Nominee Investment Pte Ltd100% VICOM Inspection Centre Pte Ltd

VEHICLE INSPECTION, REPAIR,MAINTENANCE & ACCESSORIES

100%100%

73.61%100%

20.27%

Comfort Automotive Services Pte LtdGeneral Automotive Services Pte LtdVICOM Ltd*Comfort Diesel Pte Ltd[Stamford Tyres Corporation Limited*]

74%74%

99.99%100%

Perocom Motors Pte LtdComTrucks Pte LtdBarcelona Motors Pte LtdEurocom Motors Pte Ltd

100% Sinamex Car Rental & Leasing Pte Ltd

Comfort Driving Centre Pte Ltd90%

Comfort Group Structure

15% Transportation High Tech, Inc (Taiwan)

Directors of Comfort Group of CompaniesComfort Transportation Pte Ltd/Yellow-Top Cab Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Nancy Teo Geok HarWang Kai YuenYang Ban Seng (Executive Director)

Comfort Automotive Services Pte Ltd/General Automotive Services Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Nancy Teo Geok HarWang Kai YuenSimon Soh Guan Bin (Executive Director)

Comfort Bus Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Wang Kai YuenNancy Teo Geok HarYang Ban Seng (Executive Director)

VICOM LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman & CEO)Heng Chye Kiou (Executive Director)Ong Teong WanCheong Yip SengOng Chow HongSim Cheok LimNancy Teo Geok Har

VICOM Inspection Centre Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Heng Chye Kiou (Executive Director)

VICOM Assessment Centre Pte LtdGoh Chee Wee (Chairman)Heng Chye Kiou (Executive Director)Tan Soon HengSwee Lee Chun

VICOM Nominee Investment Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Heng Chye Kiou (Executive Director)

Eurocom Motors Pte LtdGoh Chee Wee (Chairman)Peter Leong Kock WahChong San Chew

Perocom Motors Pte Ltd/ComTrucks Pte LtdGoh Chee Wee (Chairman)Peter Leong Kock WahChong San ChewUmar Bin Abdul HamidRidzwan Bin Raihan

Barcelona Motors Pte LtdGoh Chee Wee (Chairman)Peter Leong Kock WahChong San Chew

Sinamex Car Rental & Leasing Pte LtdGoh Chee WeePeter Leong Kock Wah

Comfort Driving Centre Pte LtdGoh Chee Wee (Chairman)Huam Chak KhoonTakaharu MatsumotoPeter Leong Kock WahHiroto Matsunaga(alternate Director to Takaharu Matsumoto)

Comfort Ads Pte LtdGoh Chee Wee (Chairman)Yang Ban Seng (Executive Director)

Comfort Courier Services Pte LtdGoh Chee Wee (Chairman)Chong San ChewYang Ban Seng

Comfort (China) Pte Ltd/Comfort Properties Pte LtdLim Jit Poh (Chairman)Goh Chee Wee (Deputy Chairman)Nancy Teo Geok HarWang Kai Yuen

Suzhou Comfort Taxi Co. LtdGoh Chee Wee (Chairman)Li Jin Hai (Deputy Chairman)Chua Huat HweePeter Leong Kock WahZhang Cheng Lin

Suzhou Comfort Toyota VehicleAuthorized Service Centre(An Enterprise of Suzhou Comfort Taxi Co. Ltd)

Suzhou Industrial Park Zhong XingComfort Petrol Service Station Co., LtdChua Huat Hwee (Chairman)Zhang Cheng Lin (Vice Chairman)Han Jian Qing

Xiamen Comfort Taxi Co. LtdGoh Chee Wee (Chairman)Li Wei Zhao (Deputy Chairman)Chua Huat HweePeter Leong Kock WahZhang Shao Qi

Zhengzhou Comfort Tour Bus Service Co. LtdGoh Chee Wee (Chairman)Wang Xin Yao (Vice Chairman)Chua Huat HweePeter Leong Kock WahLi Wei

Comfort Nominees Pte LtdGoh Chee Wee (Chairman)Peter Leong Kock Wah

Comfort Group Investments Pte LtdGoh Chee Wee (Chairman)Peter Leong Kock Wah

Comfort Myanmar Pte LtdGoh Chee Wee (Chairman)Heng Chye KiouPeter Leong Kock WahChong San Chew(alternate Director to Goh Chee Wee)

Suzhou Industrial ParkComfort Trading Co. LtdLi Jin Hai (Chairman)Chua Huat Hwee (Deputy Chairman)Zhang Cheng Lin

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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 2002.

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.

18

Executive Committee

The Executive Committee (“EXCO”) is set up to provide greater responsiveness in the Group’s decision-

making 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 2002.

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 2001. 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.



19

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.


Investor Relations andGroup 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 accessibilityof the print media and the unique attraction of personal interaction, the Group continuously seeks to increase thetransparency of its organisation. The efforts and developments in the year under review include the following :

NewslettersThe Group publishes six newsletters. For its staff, there is Comfort Chat - a quarterly publication that gives the latestnews on the Group’s business ventures, its future directions and strategic developments. GAS and CAS staff alsoreceive the GAS/CAS Gazette that carries service initiatives and company developments. Cabby, a monthly newsletteris targeted at drivers of the Group’s taxi fleets. It contains updates on service initiatives and company policies thatdirectly affect both Comfort and Yellow-Top Cab drivers. A similar publication, Comfort Bus Link, is targeted atdrivers of our buses. Sovereign - a quarterly newsletter is distributed to the corporate clients of our Mercedeslimousine cabs while VICOM circulates VICOM Newsline, a newsletter that informs motorists of the latest industrytrends and developments.

BrochuresOverseas visitors, investors and other interested parties are provided with easy-to-read information brochures onthe Group and its various subsidiaries.

Annual ReportThe Group’s annual reports are routinely sent to shareholders, institutional investors, analysts, journalists and anyother interested parties. In addition to the print edition of the Annual Report, there is also a web-based edition ofthe Group’s Annual Report.

The WebsiteThe Group’s English language website (www.comfortgroup.com.sg) has two platforms, one for corporate informationand the other for consumer information. The former is rich in financial and other corporate informational contentwhile 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 (http://ir.zaobao.com/comfortgroup) and is hosted by the Chineselanguage newspaper Lianhe Zaobao. This is essentially an investor relations website that carries the Group’s latestdevelopments as well as analyst comments and recommendations. To date, it has been well received. In March2002 for instance, the number of pageviews reached a high of 8,007 visits. Since its launch till March 2002, thetotal number of visits to the site was about 44,800, with views coming from China, Hong Kong, Taiwan andSingapore.

Analysts’ MeetingsThe Group took advantage of the many opportunities, locally and overseas, to present itself to analysts, fundmanagers, stockbrokers, journalists and investors during the financial year. These meetings and the presentationsensured that the accounts, financial performance and other service indicators of the Group were well understoodand a better appreciation of the value of the Company’s shares gained.

20

Corporate Management

Group Legal ManagerCum Company Secretary

Group Financial ControllerPeter LeongDoreen Nah

Left to Right (Front Row)

Group Corporate Planning &Business DevelopmentManager

Group PublicRelations Manager

Jacqueline Tham Chong San Chew

Left to Right (Back Row)

Group InternalAudit Manager

Wong Soo LeongGroup HumanResource Manager

Joan Chung


21

Prime Movers

22

General ManagerComfort Courier Services

General ManagerVICOM Assessment Centre

Executive DirectorComfort TransportationYellow-Top CabComfort BusComfort Ads

Yang Ban Seng

Heng Chye KiouExecutive DirectorVICOM LtdVICOM Inspection CentreVICOM Assessment CentreVICOM Nominee Investment

Executive DirectorGeneral Automotive ServicesComfort Automotive Services

Simon Soh

> Left to Right (Front Row)

Steven Lam

Chu Chee Leong

General ManagerComfort Ads

Thomas Ang

< Left to Right (Front Row)

(Back Row)

(Back Row)

General ManagerYellow-Top Cab

B. Sim

Teo Chee TiongGeneral ManagerComfort Transportation

General ManagerComfort Bus

Mark Yip

General ManagerComfort Driving Centre

Huam Chak Khoon

David LengGeneral ManagerEurocom, Perocom, BarcelonaMotors, ComTrucks

General ManagerComfort (China)

Chua Huat Hwee

> Left to Right:

< Left to Right:

Prime Movers


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 3rd 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 4.375 cents per share, a 25% increase over 3.5 cents given out inFY 00/01.

Earnings per share went up by 15% from 7.35 cents to 8.45 cents. Return on average shareholders’

fund increased from 14.23 percent to 14.91 percent.

200 additional taxi licences were granted to Comfort Group, which translate to $6.5 millionadditional rental income a year.

Comfort Group, Singapore’s largest taxi operator expanded its taxi fleets to reach 11,330taxis.

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.

25

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 SingaporeQuality Class status in 2002.

CabLink was nominated a finalist in the inaugural Annual Call Centre Awardorganised by the Call Centre Council of Singapore.

CabLink’s catered rate came close to 90% in the first 3 months of 2002.

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 Tongto 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 ofDistinction for design excellence. This award is organised by Creativity, Inc. USA.

Do You Know?


26

Significant Events

In a move to streamline the operations of VICOM Ltd, VICOM Inspection Centre Pte Ltd was incorporatedto take over the vehicle inspection business.

Comfort Group became one of the pioneer corporate founder members of the Half Percent Club, aninitiative mooted by Prime Minister Goh Chok Tong. It will commit at least half a percent of its profit aftertax towards projects that benefit the society.

Comfort launched a door-to-door service in which drivers act as chaperons to cataract patients going toAlexandra Hospital for their operations.

Comfort Automotive Services opened a diesel kiosk at VICOM (Yishun) to serve cabbies living in thenorth. This is its seventh diesel kiosk.

Comfort Driving Centre clinched the Ministry of Home Affairs Special Award and Singapore Arm ForcesCommendation Award for its continuing support towards Singapore’s national service activities.

Comfort Transportation introduced FastCall, a three-step way of booking a taxi. These FastCall panelswhich have their own unique location pin number are located at 200 high traffic areas to make taxibooking more convenient.

Comfort distributed $2.6 million of rental rebates to over 9,500 deserving Comfort and Yellow-Top Cabdrivers. 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 ahigh-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 receivecompensation for sick leave and reimbursements for medical consultation, in addition to its in-patientplan.

Comfort Transportation acquired a fleet of 20 buses from Hong Zhan Transport & Trading Co, with anaccompanying contract worth $1.7 million.

Suzhou Comfort Taxi set up Suzhou Industrial Park Comfort Trading Co. Ltd, which deals primarily withvehicle distribution and automotive parts trading.

Comfort Ads introduced Asia’s first Light Emitting Diode (LED) rooftop advertising, a cheaper and moreconvenient method of spreading a message. It was also the first in Asia to broadcast news live on its taxi-top.

Comfort rolled out enhanced bi-coloured LED taxi rooftop signage to help commuters spot the availabilityof 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 300taxis for a trial run. The Sapphire boasts of bigger text display and announces locations of booking jobs.

Apr 2001

May 2001

Jun 2001

Jul 2001

Aug 2001

Sep 2001

Jan 2002

Feb 2002

27

Oct 2001

Nov 2001

Comfort Group was granted an additional 200 taxi licences by the Land Transport Authority. Thesewill 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 helpdrivers 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 andbrochures offering handy tips on better taxi commuting to commuters.

General Automotive Services was conferred the Star of Commendation 2001 Award by the SingaporeIndustrial and Services Employees Union (SISEU) for sustaining good management-union relations.

Minister-without-Portfolio and NTUC Secretary-General, Mr Lim Boon Heng, launched ComfortTransportation’s 30th anniversary publication, Remarkable Triumph at Comfort Operators’ Day.Minister Lim also launched VICOM’s 20th anniversary publication A Task Achieved at the sameevent.

Comfort Transportation and Yellow-Top Cab drivers and staff clinched a total of 303 Excellent ServiceAwards (EXSA), the highest number for transport companies.

Comfort CabLink was nominated a finalist for the First Annual Call Centre Awards organised by CallCentre Council of Singapore.

Comfort Transportation and Yellow-Top Cab were presented the People Developer Award by SPRINGSingapore (formerly known as Singapore Productivity and Standards Board) for their commitment todevelop their staff and drivers through a comprehensive training system.

Comfort Transportation’s new taxi livery won an international Award of Distinction for designexcellence.

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 itsenrolment and booking services.

VICOM succeeded in converting to ISO 9001:2000 standard.

Comfort Automotive Services introduced an interest-free car repairs and maintenance instalmentplan to aid car owners during the economic downturn.

Advertising arm of Comfort Transportation was incorporated as Comfort Ads Pte Ltd to expand taxiand bus advertisements, and explore other forms of outdoor advertising mediums beyond vehicleadvertisement.

Comfort Automotive Services registered a record monthly diesel sales of 7.8 million litres.

Significant Events


Operations Review

Taxi services turnover increased by $19.6 millionto reach $330.4 million, a rise of 6.3%.

Comfort Transportation’s new blue taxi livery wonan international Award of Distinction for designexcellence.

28

In October2001, to helpdrivers outduring thee c o n o m i cd o w n t u r n ,C o m f o r tannounced a$15.8 millionrelief packagefor Comfortand Yellow-Top Cabdrivers, half ofwhich was tobe given out asa d d i t i o n a l

rental rebates, and the other half as dieselsubsidies. Excluding the Government grant of$5.5 million (in diesel tax reduction and a one-time $100 road tax rebate per taxi), Comfortinjected $10.3 million into this relief package.Some $6.7 million was given out by the closeof FY 01/ 02. This was on top of the rentalrebates of $2.6 million given to both hirers andrelief drivers in August 2002 in recognition oftheir good service.

Comfort TransportationIn October 2001, Comfort Transportation wasgranted 100 new taxi licences by the LandTransport Authority. By end March 2002, 20

29


TAXI OPERATIONS

Operations Review

Singapore’s largest taxi fleet operator continued to perform well inFY 01/02. For the year ended 31 March 2002 taxi services turnoverwas $330.4 million, a rise of 6.3% compared to $310.8 million inFY 00/ 01. Profit before tax reached $55.9 million, up from$50.0 million and we maintained our pre-tax margin of about 17%.

new taxis were placed on the road, and fleetsize reached 10,020. To help keep Comforttaxis competitive, the company continued withits strategy of replacing scrapped taxis withbigger capacity taxis that are more popular withcommuters. The larger taxis are also highlydemanded by taxi drivers. In FY 01 /02, 991small taxis were scrapped and replaced withthe bigger taxis. By the close of the financialyear, the number of big taxis it owned stoodat 5,264, which was 53% of its entire fleet,up from 4,197 in FY 00/01.Over 35% of its fleet areless than 3 years old. Thecompany intends to furtherincrease the ratio of bigtaxis, with 70% being bigtaxis by FY 02/03.

During FY 01/02, thecompany continued to woocorporate users. Thisyielded good results, withthe corporate clientvoucher scheme reaping more than 10%increase in transacted volume. Billingsincreased by $600,000 to reach $5.8 million,as opposed to $5.2 million in FY 00/01. Withthe installation of another 6,516 cashlesspayment machines onboard our taxis, paymentby credit and charge cards, yet another formof cashless payment, reached $2.5 million.

30

Operations Review

During the year, a new automated mode ofbooking a Comfort cab - FastCall, wasintroduced. It allows users to follow simple andbrief steps to call a cab using their mobilephone. The user only needs key in the locationpin and our Call centre will be able to locatethe passenger instantaneously. Currently, thereare 200 FastCall panels located at high trafficareas to capture an even bigger slice of thetaxi booking market.

The Company also extended its e-Comfort TaxiBooking, first introduced to Singtel WAP phoneusers, to M1 WAP phone users.

On 22 April 2002, the Minister for theEnvironment Mr Lim Swee Say launched a CNGpilot project in its push for greener fuel optionsfor the republic. 50 extra taxi licences weregranted toC o m f o r tTransportationto run CNGtaxis. Comfort’spartners BorneoMotors PteLtd andP E T R O N A SNGV Sdn Bhdshowcased aCNG Toyotapassenger carand the Enviro2000 taxir e s p e c t i v e l y.

Comfort hopes to kick off its CNG taxi pilotrun in the new financial year to establish theviability of using compressed natural gas (CNG)to fuel its taxis. Commuter comfort and safetywill take top priority.

With the 100 additional licences granted bythe Land Transport Authority and the steadypace of small to big taxi conversion, with some1,000 small taxis replaced by big taxis annually,the Company expects to enjoy profit growth.By May 2002, the remaining 80 new licenceswere utilised and the taxis had started plyingthe roads.

Yellow-Top CabThe fleet size of Yellow-Top cabs (YTC) stoodat 1,158 taxis as at 31 March 2002. The fleetincrease came from the purchase of 53 privatetaxi licences, as well as the successful rental of40 new taxis out of the 100 new taxi licencesgiven by the Land Transport Authority. Theremaining 60 licences were used by May 2002.

Despite the sluggish economy, the premierservice Sovereign managed to maintaindemand. It signed up close to 100 newcorporate clients, including the Ministries,MNCs, SMEs, travel agencies and theirrepresentative offices in FY 01/02. Efforts inpromoting the service amongst corporateclients will be sustained in the new financialyear. The target groups include travel agenciesand the Concierge Association, the latter beingan invaluable conduit for hotel guests who maynot be aware of the Sovereign taxi service.

Sovereign drivers continued to impresscommuters as the creme de la creme of ourtransport providers. Driver Albert Tan did usproud when he emerged as one of threefinalists for the Tourism Host of the Year(Transport - Taxi) Award.

Comfort CabLinkNotwithstanding the economic slow-down,bookings via our CabLink system stood at8.1 million for FY 01 /02, the same as the record8.1 million bookings achieved in FY 00/01.Twice in December 2001, CabLink successfullycatered a record high of over 40,000 jobs aday. The good performance was due in part tothe higher call answered rate as a result of theaddition of a second call centre, as well as thehigher catered rate, up from 78% to 85%. Thelatter improvement is due to a larger fleet oftaxis that had been equipped with the CabLinkbooking facility. By FY 01 / 02, some 9,400taxis were fitted with the call booking facility.

With booking charges reinstated in March2001 to the same rate as that prevailing theyear before, namely $3.20 for current bookingsand $5.20 for advance bookings, the totalincome from CabLink bookings came up toabout $25.8 million, up from $20.9 million lastyear.

To increase productivity, we promotedautomated means of booking a cab. Totalautomated booking jobs, which included

31


Operations Review

AutoCall, FastCall and TOT, increased by 6.4%,up from 599,900 jobs in FY 00/01 to some640,000 jobs in FY 01/02. Our marketingpromotions with some handphone companieshelped build up 2,400 new AutoCall usersduring the year.

More taxis were fitted with the cashlesspayment system in FY 01/ 02. By end March2002, 6,516 taxis had the facility installed. Toencourage the use of credit cards under thecashless system, the 10% service charge waswaived during its introductory period. SinceFebruary 2002, the charge has been reinstated.A total of 180,000 trips using the cashlesssystem were recorded for FY 01/02 and thetotal collection of fares came up to $2.5 million.

In September 2001, 300 taxis were installedwith Sapphire, a new mobile data terminal thatallows drivers to magnify booking informationdisplayed. This facility also performs voicebroadcast for the convenience of our drivers.The pilot study was successful and by March2002, over 1,600 taxis were installed with thisdevice.

Backend, the infrastructure for CabLink wasupgraded to further minimise breakdown andenable quick turnaround. This is expected toimprove CabLink’s taxi take-up rate as well asprevent the loss of data in the system.

In November 2001, CabLink was nominated afinalist for the First Annual Call Centre Awardsorganised by the Call Centre Council ofSingapore.

Operations Review

Comfort BusTurnover from bus operation rose by 165.2%,from $4.6 million in FY 00/01 to $12.2 millionin FY 01 /02. Comfort Bus expanded its fleetby more than a third in FY 01/ 02, mainly fromacquisitions of bus fleets from private buscompanies, at a capital expenditure of$12.4 million. Its fleet grew from 187 buses to288. About half of its fleet are under five yearsof age and the rest ranging from 6 to 20 yearsof age.

The revenue stream from buses came mainlyfrom contract and shuttle services provided tolocal and international schools, factories,condominiums, country clubs, hotels and pubs.About 87% of its contracts each has an annualworth of $15,000 or more.

Prospects are good for bus operations, as weare able to tap on the support infrastructureprovided by the Group’s vehicle inspection,maintenance, repair and diesel dispensingfacilities. It also enjoys a good repute becauseof the Group’s strength in taxi operations.Already, we have seen new contractscumulatively contributing to revenues at about$217,000 per month. The Company expectsmore new contracts to keep its fleet fullyoccupied during the current financial year as itembarks on an aggressive marketing drive toschools, hotels, condominiums, sportingorganisations and other civic associations.

32

Operations Review

Bus operations turnover rose by 165.2%,from $4.6 million to $12.2 million.

Comfort Bus Pte Ltd, formerly a business division of ComfortTransportation, was incorporated as a new subsidiary of the ComfortGroup in November 2001 to grow this business. The Group aims toleverage on its fleet management expertise as it gears up to becomeSingapore’s third public bus operator when the opportunity arises.

BUS OPERATIONS

Operations Review


Operations Review

Comfort AdsIn FY 01/02, the company strengthened itsposition as the top choice for innovative taxiadvertising when it became the first in Asia tobroadcast news, atop taxi roof top advertisingpanels, fed live from CNBC. It also introducedconvex-top advertising where messages aredisplayed on aerodynamic-shaped taxi rooftoppanels. Comfort Ads expects the new convex-top, which debuted in August 2001 to do welland will install about 2,000 units of convex-tops to replace the existing conventional taxi-tops. Take-up rate for the new, elegantlydesigned convex-tops is expected to be betterthan the older version taxi-tops.

In the new financial year, Comfort Ads beganmarketing advertising space for the Group’sfleet of over 300 buses. Beyond that, it hasbeen awarded sole agent for the marketing ofadvertising space at the soon-to-be launchedEsplanade - Theatres on the Bay. The Companywill also pilot in-taxi LCD-TV advertising inComfort cabs using an interactive mobilesystem. This new medium called “Mr Taxi”, isthe world’s first mobile interactive point ofinformation and advertisement designed fortaxis.

Comfort Ads, formerly the advertising arm of ComfortTransportation, was incorporated as a subsidiary of Comfort Groupin February 2002. It posted a turnover of $6.1 million and an aftertax profit of $1.2 million. Its incorporation as a separate entity willsee the company expanding full force into bus and other outdooradvertising to complement its current range of taxi advertising.

OUTDOOR ADVERTISING

34

Vehicle inspection and assessment recorded astrong growth in turnover for FY 01/ 02,reaching $14.7 million. Part of the rise camefrom an increase in inspection fees by $4 and$2 for the first and repeat inspectionrespectively, as well as a rise in revenue fromemission tests. In addition, two new satellitecentres started operations during the year andcontributed to revenue growth. Profit after taxcame to $6.9 million, a rise of 40.8%.

As part of its continuing efforts to offer acomprehensive range of vehicle-relatedservices, the vehicle assessment centrecontinued to provide services for insuranceclaims and second hand vehicle purchasers. Inaddition, the satellite inspection centres alsoprovided in-vehicle unit inspection services.

As a market leader in inspection services,VICOM implemented plans to improve servicequality and in 2001 was awarded theISO9001:2000 standard, ahead of schedule. Italso implemented several service initiativesaimed at enhancing customer satisfaction aswell as improving operational efficiency.

The company is in the process of makingoperational an e-portal to provide seamlesssupport for its multi-centre operations, as wellas a platform for its e-bidding for repairsservice.

35

VICOM

VEHICLE INSPECTION AND ASSESSMENT

Operations Review

In FY 01/02, the vehicle inspection subsidiary of the Group, VICOMLtd reorganised its activities and transferred all vehicle inspectionservice centres to a new subsidiary, VICOM Inspection Centre PrivateLimited. All other services continued to be directly operated byVICOM Ltd.


Operations Review

Vehicle servicing and diesel sales’ turnover rose 14%to hit $111 million.

36

General Automotive ServicesThe Company’s efforts in providing bettermaintenance services to the Group’s taxi fleetsresulted in productivity improvements, with taxidowntime falling by 12%. It also achieved a21% reduction in emission offences and a100% pass rate for all inspections of Comfortand Yellow-Top cabs.

Several new service initiatives were introduced.For the convenience of cabbies, it started theprovision of night servicings at its Senokobranch.

For its excellent management-labour relations,it was awarded the Star of Commendation2001 by the Singapore Industrial and ServicesEmployees Union in October 2001.

In tandem with Comfort Bus’ fleet expansion,GAS expects to service a larger bus fleet at itsUbi workshop in the new financial year.

Comfort Automotive ServicesThe Company’s various business segmentsposted growth all round: Turnover for generalrepairs went up by 18%, while spare parts salesand windscreen replacements sawimprovements in turnover by 93% and 31%respectively. Air-conditioning jobs also rose bya healthy 35%. Private car crash repairs gaineda 24% increase in business volume, from 4,200to 5,200 jobs in FY 01/02.

A number of factors contributed to theseincreases. The introduction of greater flexibilityin payment, in the form of a 0% interest freeinstalment plan made available tocardmembers of major credit cards, had madeits range of services more attractive. Its towingtrial exercise with Asia Insurance and SumitomoMitsui and Marine Insurance, with a combinedmembership base of some 30,000 resulted in

37

Operations Review

the successful conversion of 800 members asCAS’ Car Aid Plus members. Towing servicessaw significant increase in business activities,with towing jobs up from 800 to 1,900 amonth. A substantial number of the towedvehicles were repaired at CAS.

With a new diesel centre at VICOM (Yishun) inJune 2001, diesel sales volume rose further,from an average 5.1 million litres per monthto 6.6 million litres. Several promotions wereundertaken during the year, such as monthlylucky draws, the National Day Promotion 2001,and the launch of the Diesel Medical Schemefor taxi hirers. The lucky draw brought in dieselsales of 7.8 million litres in the first month ofits launch. All these boosted diesel sales whiledrivers enjoyed lower diesel prices,cash prizes and diesel vouchers, therebycreating a win-win situation for all partiesconcerned. By the close of the financial year,17,000 of the 22,000 taxi drivers had pumpeddiesel at least once at CAS, and 40% of thesepumped more than 500 litres of diesel at CASevery month. Plans are afoot to secure morediesel dispensing sites to capture an evenbigger share of the taxi fleets’ dieselconsumption.

On the commercial fleet front, CAS attracted136 corporate fleet customers, boostingturnover at its Pandan/Senoko and Ubiworkshops by $88,000 and $237,000respectively.

At the close of the financial year, CAS wasappointed by DBS and Citibank as the exclusivetowing agent for their cardholders. Theircombined membership is 250,000.

VEHICLE SERVICING AND DIESEL SALESThe Group’s vehicle servicing and diesel sales achieved aturnover of $111 million, contributing 24% of the Group’sturnover. Business activities in both private cars and commercialfleets repairs and maintenance saw healthy increases.


Operations Review

The Group’s vehicle distribution operation comprises BarcelonaMotors, which distributes SEAT; and Perocom Motors, whichmarkets the Perodua marque. During the year, the SEAT Toledoremained popular while the Perodua Kembara catered to theniche market of four-wheel drives.

VEHICLE DISTRIBUTION

We will also be launching the Perodua Kelisa1.0 Manual and Automatic to provide anotheroption for city cruising.

Presently, the Group has two dealers locatedin the east and southeast of the island. Goingforward, the Group plans to appoint moredealers for both marques in various parts ofthe island to achieve greater exposure andcoverage. Greater emphasis will also be placedon after-sales and servicing to build brandloyalty and confidence. We expect to see betterperformance this year with the introductionof the award winning SEAT Leon which comesin 1.4 and 1.6 litre versions.

38

Operations ReviewSafe motoring is of paramount importanceand Comfort Driving Centre started additionalsafety training for motocyclists.

39

Operations Review

Comfort Driving CentreIn the year under review, Comfort Driving Centreimplemented additional safety training formotorcyclists to help them cope with wetsurfaces and improve their riding skills especiallyat night. The Centre computerised its planningsystem and switched over from a manualmatching system to a fully automated systemto more efficiently match learners, instructorsand vehicles. Other service enhancementsundertaken included an Internet-enabledbooking system and a self-service station thatallowed its students to pay for their lessons usingstored value cards.

During the year, CDC clinched the MHA SpecialAward 2001 and the SAF CommendationAward 2001 for its continuing support ofSingapore’s national service activities. It alsoreceived the SLF Model Workers Award 2001.

We expect prospects for the current year toimprove further as we add value to our drivingcentre, consolidate our resources and improveon efficiency through the adoption ofISO 9001:2000 standards.

Comfort Courier ServicesTurnover for Comfort Courier Services almostdoubled to slightly above half a million in itssecond year of operations, although thecompany has yet to make a profit. The numberof delivery jobs increased by 40%, from 500runs to 700 runs a day.

In FY 01/02, 10 Toyota cars were added to Comfort DrivingCentre’s (CDC) training fleet. Its training fleet now stands at54 cars and 60 motorcycles.

OTHER INVESTMENTS

In FY 01/02, Comfort Courier Services venturedinto the new markets of Malaysia andIndonesia. Strategic tie-ups were establishedwith GD Express Sdn Bhd, the third largestdomestic courier company in Malaysia and PTRoyal Cargo Courier of Indonesia. Thesereciprocal arrangements with the Malaysianand Indonesian companies will enlarge ourservice network and improve sales, beyond ourshores.

40

Comfort (China)Taxi operations in Suzhou and Xiamenremained profitable in FY 01/02. TheZhengzhou tour bus operations posted a 6.5%increase in turnover but has yet to return aprofit. This is due to the high fixed cost and aconservative depreciation policy of 8 years forthe buses.

The Suzhou Petrol Kiosk established a strongbase, registering profits in its first year ofoperations. The Suzhou workshop saw animprovement in revenues month on month buthas yet to record profits due to high fixedoverheads. It repaired 3,876 cars in FY 01/02,compared to 1,385 cars in FY 00/01. Thegrowth mainly came from the increase, by fourtimes, in the number of Toyota cars beingrepaired at the workshop, on the strength ofits appointment as the sole authorised servicecentre for Toyota vehicles.

Suzhou Comfort Taxi Co Ltd (SCTCL) hasventured into a new line of business, namely,trading. It has formed a joint venture, SuzhouIndustrial Park Comfort Trading Co Ltd(SIPCTCL), with a local partner. The mainbusiness of the joint-venture company will bethe distribution of cars and vehicle spare partswithin China.

41

OVERSEAS INVESTMENTS

Operations Review

Comfort’s Suzhou and Xiamen taxi services stayed profitable,while its Suzhou workshop, the only authorised service centrefor Toyota vehicles, made good headway in vehicle repairs.


Service Initiatives

As the largest taxi operator in Singapore, the Group undertook proactivesteps to scale greater heights in service excellence. Driver recruitment,training, rewards and discipline went under review, with improvementsintroduced, all aimed at improving the overall quality of our taxi servicefor the benefit of our commuters. These initiatives helped improved ourtaxi service and more good service acts were recorded than service lapsesin the year. We also came out tops in the Excellence Service Awardspresented by SPRING Singapore (formerly known as the Productivity &Standards Board).

Driver recruitment and disciplineDriver applicants now go through 2 rounds of stringent screening andtesting. Only those with good route knowledge, able to use the streetdirectory, speak and understand English and display good service attitudeare recruited.

Probation for new hirers and relief driversNew hirers and relief drivers undergo a probation of 6 months and a yearrespectively, during which they are to keep a complaints and accident-free record. 98% of our new drivers made the grade.

Comfort Driver GuideAll hirers and relief drivers are given a Driver Service Standards Guide,which lists the service standards expected of drivers.

Redoubled spot checksComfort increased its spot checks to 298 rounds in FY 01/02 (83 morethan in FY 00/01) on various areas of service. Areas checked included themisuse of taxi signs, touting, pick and choose, cabby attire and helpingwith luggage at the airport.

Taxi auditsMonthly mystery audits by customers and staff started in January 2002 tomonitor our taxi service and identify areas of weakness. The majority ofComfort and Yellow-Top Cab drivers did well under scrutiny. Drivers withservice lapses were corrected and disciplined.

Driver performance statementAll drivers started receiving a 6-monthly performance statement thatmonitors their service performance. The first performance review periodis January to March 2002.

Driver uniformTo present a professional image, Comfort/YTC shirts are distributed freeto every new hirer and relief driver.

Total Number of Good Acts

0

FY 01/02

7425

8768

FY 00/01

6000

7000

8000

Comparison of Good Actsversus Complaints

0

6

4

No. of Good Actsper 100,000 trips

2

4

6

Drivers with Merit Points

15,000

FY 01/02

16,801

19,344

FY 00/01

16,000

No. ofComplaints per100,000 trips

17,000

18,000

19,000

20,000

9000

42

700

FY 01/02

788

FY 00/01

750

800

850

900

EXSA Award

0

50

100

150

200

250

Year 2000 Year 2001

0 228

222

4360

Star Gold Silver

43

Comfort Club Membership

942950

Service Initiatives


Introduction of new merit points systemA new merit point system was introduced in April 2002, with moreweightage given to service acts and awards so as to better motivate driverstowards service excellence.

Training videosTwo driver videos on taxi service excellence were produced. These arescreened at driver induction programmes and at waiting areas at bothSin Ming and Loyang premises to inculcate good service.

TAXI FACILITIES

Automated LED signsOver 8,000 taxis were installed with the new automated signs to stemout the misuse of taxi signs and eradicate pick-and-choose behaviour.Following this, the percentage of drivers booked for pick-and-choosebehaviour reduced from 10% to 4% of those surveyed.

Provision of boot boxesTaxi drivers are given custom-made boxes to keep their personal items soas to free the rest of the boot for passengers’ luggage.

TAXI SERVICES

Introduction of chaperon serviceIn May 2001, Comfort introduced a chaperon service for cataract patientsof Alexandra Hospital who are unaccompanied by family members. Ourdrivers will assist these patients all the way to their doorstep.

RESULTS

Better driver performanceThe number of bouquets on taxi service increased in FY 01/ 02. Comfortregistered more good acts by drivers and fewer complaints. More driverswere awarded merit points in FY 01/02, up from 16,801 drivers inFY 00/01 to 19,344. The fiscal year also saw more nominees for theComfort Taxi Driver of the Month award and more drivers being admittedto the Comfort Club that recognises our top drivers.

In 2001, two Sovereign drivers won the EXSA Star Award and Comfortand YTC drivers hauled in 222 Gold and 60 Silver awards. Our performancewas the best amongst all land transport companies.

Developing Our Human Capital

STAFF TRAINING

At Comfort, our employees are our most important assets. We are committed to developing their skills andexpertise 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 theGroup’s frontline staff and our team of about 200 Call Centre agents. Equal emphasis was given to cultivating aharmonious 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 weretailored 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 cameup to 4% of total payroll, meeting industry standards.

In recognition of their people development efforts, Comfort Transportation and Yellow-Top Cab were presentedthe People Developer Standard in FY 01/02. The People Developer Standard provides a framework for a systematicprocess to review and develop and improve staff training effectiveness. Using this framework, Comfort and YTCanalysed its employees’ training needs and training plans were tailored for each individual, in line with meetingthe corporate business objectives.

In April 2002, both GAS and CAS attained the prestigious Singapore Quality Class (SQC) status for theircomprehensive training programme, process management, innovative practices, and contributions towards thecommunity and the environment.

“The training that I’ve undergone has helped me tremendously in my job. After attendingthe courses on service recovery and telephone skills, I am able to attend to the needs of mycustomers more confidently and effectively.” Sabarina Jumarubin, Customer ServiceAssistant, Comfort Transportation.

“I find the Training Needs Analysis exercise very useful. It helps my manager and I to jointlyidentify my areas of weakness. We can then focus on specific training programmes to improvemy 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 toapply the knowledge to produce a more exciting membership newsletter.” Vonnia Soh,Membership Officer, Comfort Automotive Services.

“In line with the company’s constant pursuit for innovation, the Quality Circle Committeeseeks 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 goodideas that were original, that helped to reduce operational costs and improve work processesand the environment. Quality Circle members also benefited from their training to thinkcreatively and evaluate ideas critically.“ Adrian Tan, Maintenance Engineer, VICOM Ltdand Chairman of VICOM’s Quality Circle.

44

“I think it is important for taxi drivers to become knowledge-based workers. One of thecore SRP competencies taught me the many ways of listening. Now, I listen patiently to apassenger’s instructions and ask appropriate questions. If a driver were to pick up theknowledge gained through SRP and apply it, I think he would improve a great deal. I haveimproved a lot since attending SRP.” Comfort Cabby Lee Tat Meng

“I appreciate the language lessons that SRP offers. Even though I had little education, Ihave picked up better English through the lessons. I have also started studying Japanese tohelp make Japanese passengers feel at ease. I would love to continue learning if I have thechance.” Comfort Cabby Low Hian Tee

45

Comfort recognises that families play an important role in our employees’ well being. Our policies, practices andbenefits 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 developmentof strong and stable families. It actively promotes and organises family life, activities and education programmesto foster pro-family development. Information on externally-organised FLA activities is also disseminated to ouremployees through notice boards, email and brochures.

DRIVER TRAINING

As our key partners, Comfort and YTC drivers’ training needs were given top priority. Close to 900 drivers successfullycompleted the 9-month Skills Redevelopment Programme (SRP) in FY 01 /02 and another 410 drivers have embarkedon the SRP programme. This training will equip our cabbies with the skills to deliver good taxi service under allcircumstances. Drivers can also opt to learn a foreign language as well as learn the finer points of delighting aforeign visitor.

To stress road safety, some 700 drivers were identified for additional road safety training, with trainees keepingbetter driving record after the training.

Developing Our Human Capital

“Comfort really looks into the staff’s family benefits. When my wife delivered our secondchild, the Company sent a fruit basket within half an hour after I informed them. We wereso touched. My elder son was granted a scholarship for his good results and it served as abig motivation for him to do better.

The staff development and enrichment subsidy also helps to relieve the expenses of buyingnew textbooks for my child.” Simon Lee, Investigation Officer, Comfort Transportation

“It’s great the company organises family life talks for the staff during lunchtime. Especiallyfor us who have children, it saves us the hassle of taking time out during our weekends toattend them. The topics such as communicating with your child and reducing stress at workwere relevant and beneficial. “ Susie Yeow, Legal Division Secretary, Comfort Group


Caring for Our Society

In April 2001, Comfort Group became one of the pioneer companies to be admitted to the Half Percent Club, aninitiative mooted by Prime Minister Goh Chok Tong. Members of the Club will channel at least half a percent oftheir profit after tax toward projects that will benefit our society. Fulfilling this commitment, Comfort contributedclose to $700,000 towards several initiatives that benefited the disabled, the aged, the needy and the motoringpublic. It helped raised another $120,000 from its business associates for the President’s Challenge 2001. In thesame year, Comfort Transportation was presented the Corporate Gold Award by His Excellency President SRNathan, 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 permonth, up from about 500 trips the year before. An annual amount of $100,000 is set aside to fund therequirements 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 cataractpatients going to Alexandra Hospital for their operations. The service ensures that patients are accompanied tothe 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 Campaignspearheaded by The Traffic Police in November 2001. The following month, our taxis provided 250 free trips totransport gifts donated by the public to beneficiaries of the Sharity Gift Box. This is the fifth consecutive yearComfort 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 ofscholarships 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 HougangDistrict 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 thehospital. 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 YewWah who ferries HWA members to and from homes to their work places, or to the hospitalfor their physiotherapy sessions.

“I have met a few good Handicare drivers before but Cabby Ang left mewith the deepest impression. It’s really so rare to find someone like himin this hustle and bustle society. I was touched to tears by his kindness.”Touched by relief driver Cabby Ang Yeow Chuan’s compassion towardsher, Ms Virginia Inton, another member of Handicaps WelfareAssociation, wrote to Comfort Transportation to commend him as a‘cabby extraordinaire’.

46

47

Group Financial Highlights

Year Ended Year EndedMar 02 Mar 01 Change Change $’000 $’000 $’000 %

Turnover1st Half 227,187 199,102 28,085 14.12nd Half 227,363 215,546 11,817 5.5Total 454,550 414,648 39,902 9.6

Operating Profit (Before Associates’ Results)1st Half 42,779 40,512 2,267 5.62nd Half 45,545 38,022 * 7,523 19.8Total 88,324 78,534 * 9,790 12.5

Share of Results of Associates1st Half 579 633 (54) (8.5)2nd Half 649 646 3 0.5Total 1,228 1,279 (51) (4.0)

Dividend, Interest & Other Income1st Half 3,081 2,511 570 22.72nd Half 2,583 2,902 (319) (11.0)Total 5,664 5,413 251 4.6

Profit Before Taxation1st Half 43,358 41,145 2,213 5.42nd Half 46,194 38,668 * 7,526 19.5Total 89,552 79,813 * 9,739 12.2

Profit Attributable to Members of the Company1st Half 31,883 30,080 1,803 6.02nd Half 36,135 28,873 * 7,262 25.2Total 68,018 58,953 * 9,065 15.4

As at 31 MarchShareholders’ Funds 481,263 431,350 * 49,913 11.6Fixed Assets 515,821 510,885 4,936 1.0Other Long-Term Assets 46,596 36,777 * 9,819 26.7Current Assets 173,534 134,859 38,675 28.7Current Liabilities 160,849 164,610 * (3,761) (2.3)Long-Term Liabilities 80,040 73,573 # 6,467 8.8Minority Interests 13,799 12,988 # 811 6.2

Financial RatiosEarnings After Tax & MI But Before

Extraordinary Item Per Share (S cents) 8.45 7.35 * 1.10 15.0

Earnings After Tax, MI & ExtraordinaryItem Per Share (S cents) 8.45 7.35 * 1.10 15.0

Net Tangible Assets Per Share (S $) 0.58 0.53 * 0.05 9.4

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.


Year Ended Year Ended Year Ended Year Ended Year EndedMar 98 Mar 99 Mar 00 Mar 01 Mar 02 $’000 $’000 $’000 $’000 $’000

Turnover 278,890 323,321 358,822 414,648 454,550

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 388,551 446,701 460,145 510,885 515,821

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 89,339 142,057 134,859 173,534

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)

347,603 363,940 410,990 444,338 495,062

Represented by :

Issued Share Capital 133,134 133,134 133,710 200,581 201,942

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 335,806 350,865 397,439 431,350 481,263

Minority Interests 11,797 13,075 13,551 12,988 * 13,799

Deferred Income - - - - -

347,603 363,940 410,990 444,338 495,062

Financial Ratios

Earnings After Tax & MI But BeforeExtraordinary Item Per Share (S cents) # 2.31 2.51 5.56 ** 7.35 ** 8.45

Earnings After Tax, MI & AfterExtraordinary Item Per Share (S cents) # 2.31 2.51 6.33 ** 7.35 ** 8.45

Gross Dividend Per Share (S cents) # 0.83 0.83 2.00 3.50 4.375

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 ** 11.92 ** 14.23 ** 14.91

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.

Five-Year Financial Summary

48

98 99 00 01 02

(S$’000)

Year ended March

33,91636,073

62,854

79,813

89,552

Profit before tax improved by $10 million to $90 million. Apartfrom the improvements recorded at the OP level, the increasein depreciation was lower than that of the previous year. Withthe more moderate increase in depreciation, improvements atthe OP level was able to provide a more meaningful contributionat the profit before tax level.

Profit Before Tax

49

Business Operation

98 99 00 01 02

(S$’000)

Year ended March

98 99 00 01 02

(S$’000)

Year ended March

278,890323,321

358,822

414,648

454,550

109,498

136,454154,878

179,118

194,919

Five-Year Key Performance Indicators

The higher turnover was the result of the increase in the ratioof larger taxis, expansion in the bus operation throughprogressive acquisitions of businesses from other bus operators,as well as increase in business activities in vehicle servicing, dieselsales, vehicle inspection and assessment.

The increased business activities of the core business, costcontainment measures taken and better performance from theinvestment companies have contributed to the higher operatingprofit in the current financial year.

Turnover

Operating Profit Before Depreciation &Interest (“OP”)


Financial Strength

Shareholders’ Wealth

98 99 00 01 02

98 99 00 01 02

98 99 00 01 02

(%)

(S$’000)

(S Cents)

Year ended March

Year ended March

Year ended March

335,806350,865

397,439

431,350

481,263

2.312.51

5.567.35

8.45

5.61

5.84

11.92

14.23

14.91

The continued profitability of the Group’s operation hascontributed to the increase in the shareholders’ funds.

Each Comfort Group Ltd ordinary share (“Comfort Share”)generated an earnings of 8.45 cents. This is substantially higherthan that achieved in FY 00/01 of 7.35 cents.

The Group’s repeated strong performance had contributedto a higher return on shareholders’ investment in the businessof the Group. Shareholders’ investment is represented by theGroup’s shareholders’ funds. The return on averageshareholders’ funds for FY 01/02 rose to 14.91% against14.23% recorded in FY 00/01.

Shareholders’ Funds

Earnings after Tax and MinorityInterests but before Extraordinary Itemper share

Return On Average Shareholders’ Fund


50

98 99 00 01 02

(%)

Year ended March

31.50

62.00

57.50 58.00

73.50

0.83 0.83 2.00 3.504.375

2.63%

1.34%

3.48%

6.03%Although gross recommended dividend per share in FY 01/02 wouldbe 25% higher than the payout in FY 00/01, dividend yield howeverwould be marginally lower at 5.95% in FY 01/02 against 6.03%in FY 00/01. This was attributed to a significant appreciation inComfort share price, from 58 cents per share in FY 00/01 to 73.5cents per share in FY 01/02.

Closing Share price the day after announcementof final results

Gross Dividend per share

Dividend Yield

Dividend Yield per ordinary share

5.95%

(S Cents)

51

98 99 00 01 02

(S Cents)

Year ended March

98 99 00 01 02

(S Cents)

Year ended March

4143

49

53

58

0.83 0.83

2.00

3.50

4.375

By reinvesting a substantial portion of the earnings in thebusiness, the Group has strengthened the asset backing of eachComfort Share. At the end of FY 01/02 each Comfort Share isbacked by 58 cents worth of tangible assets. This is an improve-ment of 5 cents over that of FY 00/01.

Dividend is one of the tangible return on investment shareholderscan expect to receive. In FY 01/02 the Directors have revised thepolicy, thereby increasing the percentage of the Group’s profitafter tax and minority interests to be distributed as dividend, from30% to 40%. A final gross dividend of 3 cents per share isrecommended for FY 01/02. The total gross dividend paymentfor FY 01/02 would amount to 4.375 cents per share against 3.5cents per share for FY 00/01.

Net Tangible Assets Value Per Share

Dividend Payment on the par value of 25cents per ordinary share




Profit growth from non-taxi operations has improved tremendously and has contributed a significant portion to thecurrent year’s profit. The growth in the profit from non-taxi operations is in tandem with the increase in the turnoverfrom these businesses.

SEGMENTAL REPORT

Turnover

52

98 99 00 01 02

Turnover (S$’000)

Year ended March

278,890323,321

358,822 414,648454,550

% of Turnover

Year ended March

98 99 00 01 02

% of Turnover from Non-Taxi Operations

Year ended March

Vehicle Servicing & Diesel SalesVehicle Inspection & AssessmentOther 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 progressivelycontributed more towards the Group’s turnover. The main increase in non-taxi operations came from vehicle servicing,repairs and diesel sales.

98 99 00 01 02

Operating Profit BeforeInterest & Tax (S$’000)

Year ended March

37,521

61,71177,531

87,525

98 99 00 01 02

% of Operating ProfitBefore Interest & Tax

Year ended March

$33.4m

98 99 00 01 02

% of Operating Profit Before Interest& Tax from Non-Taxi Operations

Year ended March

Vehicle Servicing & Diesel SalesVehicle Inspection & AssessmentOther Activities

Note: For year ended Mar 98, profit before interest & tax from vehicle inspection had been included under vehicle servicing.

Non-taxi Taxi Non-taxi Taxi

19% 21% 19%25%

27%

Non-taxi Taxi Non-taxi Taxi

-29%

-7%28%

36% 36%

224,825254,435

290,158310,542

330,111 81

19

98 99 00 01 02

79

21

81

19

75

25

73

27

6

13 15

33

8

3

8

12

11

14

3

10

2

33,399

42,98140,149

44,29250,002

55,894

129

-29

107

72

28

64

36

-7

64

36

-35

6

-53

15

31

-2

219

24

66

24

48

Operating Profit Before Interest and Tax

$37.5m$61.7m $77.5m $87.5m

$278.9m $323.3m $358.8m $414.6m $454.5m

53


Share Price Movement

2002

Comfort Daily Closing Share Price, Volume and 20-Day Moving AveragePrice S$

0.20

0.10

0.00

Volume

0

3000

2000

1000

DecMay June July Aug Sep Oct Nov Jan Feb Mar Apr May

0.80

0.70

0.60

0.50

0.40

0.30

4000

2 April 2001 to 27 May 2002High: S$0.765Ave Volume: 725,180

Low: S$0.515

Volume ‘000

20 Day MA

7000

5000

6000

Comfort

Apr2001

Relative Performance of Comfort Weekly Share Price Movement AgainstBTSRI, STI & MSCI (S’pore)

0

20

40

60

100

120

140

160

80

DecApr2001

May June July Aug Sep Oct Nov Jan Feb Mar Apr May2002

2 April 2001 to 27 May 2002

ComfortST IndexBTSRIMSCI (S’pore)

2-Apr-01$0.515

1,649674974

27-May-02$0.760

1,722735

1,007

Change47.57%4.43%9.05%3.39%

Comfort

BTSRI

MSCISTI

Financial Calendar

FINANCIAL YEAR ENDED 31 MARCH 2002Announcement of Half-Year ResultsAnnouncement of Full-Year ResultsAnnual General MeetingBooks Closure Dates

Payment of FY 01/02 Interim Dividend

Proposed Payment of FY 01/02 Final Dividend

FINANCIAL YEAR ENDING 31 MARCH 2003Proposed Announcement ofFirst Quarter Results

Proposed Announcement ofHalf-Year Results

Proposed Announcement ofThird Quarter Results

Proposed Announcement ofFull-Year Results

FINANCIAL CALENDAR

161521

23

1513

November 2001May 2002August 2002September 2002 -September 2002January 2002September 2002

August 2002

November 2002

February 2003

May 2003

54


56 Directors’ Report 68 Statement by Directors 69 Auditors’ Report70 Income Statements 71 Balance Sheets 72 Consolidated Statement ofChanges in Equity 73 Statement of Changes in Equity - Company74 Consolidated Cash Flow Statement 76 Notes to the Financial Statements112 Shareholding Statistics 114 Notice of Annual General MeetingProxy form

Contents

55

Financial Statements

The Comfort Group yet again enjoys a good year. Over the years, we have evolved beyondtaxi operations, and have begun to reap yields from vehicle repairs, assessment andmaintenance, diesel sales and our overseas ventures. We have grown with our associates,customers and shareholders and will continue to strengthen our position as Singapore’s leadingprovider of transport-related services. As we present you with yet another healthy report, wewill also assess our strengths and future challenges. Looking forward, we will continue tostrive in increasing shareholder value. Here’s to another year of good health!

[kang] Good health

[fu] Prosperity

Prosperity aptly summarises the Comfort Group’s state of financial health for FY 01/02.These financial statements are testaments to our success and commitment in increasingshareholder value. As a policy, the Board is recommending setting aside 40% of the profitafter tax and minority interests as dividend payment. Our stakeholders can indeed lookforward to sharing in our prosperity.

1 Mission Statement 2 Chairman’s Statement 10 Board of Directors14 Corporate Information 15 Comfort Group Structure 16 Directors ofComfort Group of Companies 17 Corporate Governance 20 InvestorRelations & Group Communication 21 Corporate Management 22 PrimeMovers 24 Do you know? 26 Significant Events 28 Operations Review42 Service Initiatives 44 Developing Our Human Capital 46 Caring for OurSociety 47 Group Financial Highlights 48 Five-Year Financial Summary49 Five-Year Key Performance Indicators 53 Share Price Movement54 Financial Calendar 55 Financial Statements

Contents

www.comfortgroup.com.sgir.zaobao.com/comfortgroup

383 Sin Ming Drive Singapore 575717 Tel: 6457 6255 Fax: 6453 3183

annual report 2002

www.comfortgroup.com.sgir.zaobao.com/comfortgroup

383 Sin Ming Drive Singapore 575717 Tel: 6457 6255

annual report 2002

our vision our mission our commitment - zaobao.comfor the third year in succession, the group...

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