A NEW STAR A NEWATTRACTION STAR ATTRACTION OPENS OPENSIN SERIIN SERI KEMBANGAN KEMBANGAN Located in Seri Kembangan, just minutes away from Puchong,
USJ and Putrajaya, AEON Taman Equine Shopping Centre had
its soft opening on 15 June 2006. It has fast become a focal Shoppers are impressed by the clean, bright and spacious environment. point for the residents of Seri Kembangan and the surrounding
communities.
The grand opening of AEON Taman Equine Shopping Centre
was held on 21 July 2006, marking AEON CO. (M) BHD.’s 12th
shopping centre and 14th JUSCO store in Malaysia. This event
was officiated by Y.A.B. Dato’ Seri Dr. Hj. Mohamad Khir bin
Toyo, the Menteri Besar of Selangor.
The two-storey shopping centre stands on 11.81 acres of land
at the doorway to Taman Equine. It has an approximate net
lettable space of 235,000 square feet with over 78 shops, 13
eateries, recreation facilities and 1,100 car park bays, as well
as the main attraction, the JUSCO General Merchandise Store
and Supermarket.
In conjunction with the grand opening of AEON Taman Equine
Shopping Centre, the “With All Our Hearts” Malaysian JUSCO
Foundation donated educational books worth RM5,000 each
to the libraries of five schools (totalling RM25,000), namely SK
Taman Universiti, SK Sri Kembangan, SJK (C) Serdang Baru 1, The “ With All Our Hearts” Malaysian JUSCO SJK (C) Serdang Baru 2 and SMK Seri Kembangan. Foundation donated RM5,000 each to five school libraries. 044 AEON ANNUAL REPORT 2006 THE SECOND JUSCO STORE THEOPENS SECOND INJUSCO THE STORE NORTH OPENS IN THE NORTH The soft opening on 1 December 2006 of the new JUSCO Queensbay Store, the anchor tenant of Penang’s Queensbay Mall, saw visitors from all over the island and the northern states coming in throngs. The Queensbay Mall is located along Persiaran Bayan
Indah, in Sungai Nibong, Bayan Lepas.
JUSCO Queensbay, AEON’s first store in Penang, was officially opened at a Grand Opening Ceremony by Y.A.B. Tan Sri Koh Tsu
Koon, the Chief Minister of Penang on 9 December 2006, marking AEON CO. (M) BHD.’s 15th JUSCO store in Malaysia.
Covering 255,000 square feet, the JUSCO Queensbay Store has a product mix specifically tailored to meet the needs of the community. With four levels, Penangites are spoilt for choice and now have access to top-notch quality merchandise and JUSCO in-house brands.
The JUSCO Supermarket is located on the Lower Ground Floor, along with the popular ARENA Restaurant and La Boheme bakery.
The JUSCO General Merchandise Store starts on the Ground Floor with the cosmetics department and ladies’ department. On the 1st Floor are the men’s, men’s shoes & luggage, kids’ & babies’, sports and stationery departments, as well as Smart Wonder
World, the fun-themed amusement centre for the family. The JUSCO Home Centre and kitchen, dining and home appliances departments are located on the 2nd Floor.
Y.A.B. Tan Sri Koh Tsu Koon officially opens the JUSCO Queensbay Store.
Penangites now have greater variety to choose from.
505 AEON ANNUAL REPORT 2006 THE AEON SHOPPING THEEXPERIENCE AEON SHOPPING COMES EXPERIENCE TO COMESCHERAS TO CHERAS SELATAN SELATAN One-stop shopping convenience and entertainment came
closer to home for residents of Cheras Selatan, with the soft The attractive new JUSCO Cheras Selatan opening of the AEON Cheras Selatan Shopping Centre on 6 Supermarket received overwhelming response from the local residence. December 2006, marking AEON CO. (M) BHD.’s 13th shopping
centre and 16th JUSCO store in Malaysia.
At approximately 383,000 square feet in net lettable space, the
AEON Cheras Selatan Shopping Centre offers two levels of
shopping space that include the JUSCO General Merchandise
Store and Supermarket, JUSCO Home Centre, over 90 shops, Customers enjoy a clean, bright, comfortable eateries and entertainment centres, and 1,500 parking bays. shopping environment at the AEON Cheras Selatan Shopping Centre.
There are 17 food outlets located along a “Restaurant Street”
on the Ground Floor, while the entertainment zone, including a
TGV cineplex and family karaoke centre, is on the first floor.
Y.B. Datuk Hj. Mohd. Shafie bin Hj. Adpal, Minister of Domestic
Trade and Consumer Affairs officiated the grand opening of
AEON Cheras Selatan Shopping Centre on 28 December 2006.
The highlight of the ceremony was the presentation of school
uniforms to a group of underprivileged children, in line with the
“With All Our Hearts” Malaysian JUSCO Foundation’s mission.
066 AEON ANNUAL REPORT 2006 JUSCOJUSCO TAMAN TAMAN UNIVERSITI UNIVERSITI GETS A GETS BRANDA BRAND NEW LOOK NEW LOOK
In line with AEON CO. (M) BHD.’s constant interior refurbishment of stores, to project a comtemporary image and to place greater focus on commodity items, JUSCO Taman Universiti underwent a major face-lift. Starting from 21 July 2006, improvements were carried out in stages to minimise inconvenience to customers and disruptions to the store’s operations.
The delicatessen and sushi sections now feature a new assortment of mouth-watering delicacies, while fish, meat and green leafy vegetable sections were enhanced to accommodate the new ‘fresh from the farm’ concept. A new concept of health & beauty care section was added, along with a new Baby World section (a one-stop centre for babies’ needs), a new men’s and ladies’ section for branded products, as well as new items with attractive designs and colours at the bedding & interior section.
The entire renovation process was completed on 26 September 2006, bringing enhanced shopping and the best local store to the customers in Taman Universiti and its surrounding communities.
The newly renovated JUSCO Taman Universiti reflects AEON’s new store concept.
BETTERBETTER LOOKING LOOKING & BETTER VARIETY & BETTER VARIETY AT ATJUSCO JUSCO MID VALLEY MID VALLEY
Refurbishments were also carried out in stages at the JUSCO Mid Valley store in 2006, to enhance customers’ shopping convenience and comfort.
Some of the Supermarket sections that were improved included the grocery, non-food, dairy & daily and meat sections. A new delica island was added, and the non-halal section is now in the wine & liquor section. The new JUSCO Mid Valley Supermarket re-opened on 6 October 2006.
The General Merchandise Store section has three new cosmetics counters, a new facial room and new sections for in-house labels such as Arcadia, Crème and Cleef. The Smart Wonder World amusement park and the J CARD service area have been increased in size, and a greater variety of labels and brands were added to the audio visual, home appliance, toys, kitchen and dining sections.
In addition, the furniture, sports, travel goods, men’s and men’s shoes departments and the Jeans Studio were also renovated and re-opened on 20 October 2006.
Bigger, brighter and better... JUSCO Mid Valley’s enhanced shopping experience.
707 AEON ANNUAL REPORT 2006 (formerly known as J-One) D’HATID’HATI (formerly known as J-One) OPENSOPENS IN PEARLIN PEARL POINT POINT SHOPPING SHOPPING MALL MALL
Following the success of the first PASAR RAYA D’HATI (formerly known as J-One) supermarket in Damansara Damai, AEON CO. (M) BHD. opened a second PASAR RAYA D’HATI supermarket outlet in Pearl Point Shopping Mall on 7 July 2006.
The PASAR RAYA D’HATI Pearl Point supermarket covers almost 3,000 square metres and is the anchor tenant of the Pearl Point Shopping Mall in Jalan Kelang Lama, Kuala Lumpur. It provides residents of the surrounding communities a convenient shopping destination for their daily needs, with a refreshing, impressive assortment of merchandise to choose from. Customers have a choice of affordable, quality goods, including fresh meats, vegetables, toiletries, household goods and stationery, and the comfort to shop in a bright, hygienic environment.
The Managing Director and Chairman of AEON give the fresh vegetables their thumbs up.
The shelves are brimming with a wide variety of quality products at reasonable prices.
D’HATI - A NEW NAME FOR D’HATITHE - AFUTURE NEW NAME FOR THE FUTURE To further strengthen and build a long-term relationship with its valued customers, the Company invited its customers to participate in suggesting a new name for J One Supermarket. Of all the contest entries received, D’HATI, a meaningful new name conceived by one of its customers, won the hearts of the judges unanimously.
On 26 January 2007, the name Pasar Raya JUSCO J-One was officially changed to PASAR RAYA D’HATI to mark the Company’s business direction of making our new concept supermarket more localised and to be the best local supermarket.
The new name proudly displayed at the main entrance of PASAR RAYA D’HATI. Datuk Tan Aik Hong (M.D. of Aik Bee Resources Bhd.), Dato’ Abdullah (Chairman of AEON CO.(M) BHD.) and Mr. Nagahisa Oyama (Managing Director of AEON The new D’HATI sign welcomes CO. (M) BHD.) at the official launch of the new D’HATI customers to the Pearl Point name. Shopping Mall.
The new PASAR RAYA D’HATI supermarkat is a prominent presence in Damansara Damai. 088 AEON ANNUAL REPORT 2006 GREATER CHOICE, QUALITY AND GREATERVALUE-FOR-MONEY CHOICE, QUALITY AND VALUE-FOR-MONEY One of the ways that AEON contributes to Malaysia is the development of in-house brands using locally-sourced merchandise, such as JUSCO SELECTION, which offers quality and value-for-money products. Over the past year, the label has expanded to include essential products in 3 major categories.
1. JUSCO SELECTION Quality and Value focuses on daily needs such as household staples, groceries and frequent-purchase items, like rice, flour, sweetened creamer and toilet paper. These are items in which branding is less important than price, assortment and quality.
2. JUSCO SELECTION Organic Vegetables cater to the increasingly health-conscious public. These organic products are grown and processed without using chemicals and pesticides.
3. JUSCO SELECTION Premium covers Home Fashion and Premium Food products. Home Fashion merchandise focuses on contemporary living products, including bedding and home furnishing. The food items include frozen pizzas, gourmet sausages, pastas, 100% fruit juices and concentrates, and are of higher quality in terms of ingredients, taste, originality and packaging.
The top ten most popular JUSCO SELECTION products, in terms of sales, are the basic commodities such as food and non-food items.
JUSCO SELECTION Super Local Rice 15% is the best selling rice JUSCO SELECTION Concentrates are concentrated fruit juices brand, thanks to the price factor and consistent high quality. which are popular for both formal and informal occasions. They have natural, rich fruity flavours and are simple to make. JUSCO SELECTION Premium Pizza, Jumbo Chicken Cocktail Sausages and German Sausages offer a “ready meal solution” JUSCO SELECTION Sweetened Creamer is a basic ingredient for busy customers, an idea inspired by ÆON’s TopValu brand of “teh tarik”, a popular malaysian beverage. from Japan. They have become some of the best sellers in the JUSCO SELECTION Fabric Softeners are the first in the market frozen food category. JUSCO SELECTION food items appeal to have anti-bacterial properties. The 2 fragrances available are especially to health-conscious shoppers as they contain no MSG, floral and ocean breeze, and the anti-bacterial function prevents no added sugar, artificial preservatives or colouring. clothes which are soaked overnight from unwanted odours.
JUSCO SELECTION Mineral/Distilled Water is produced from Rounding off the top ten is the JUSCO SELECTION Toilet an underground water source in Taiping, Perak, and undergoes Rolls. The material used has been upgraded from recycled paper a stringent process of distillation and filtration. to 100% pulp, which offers better quality and distinguishable softness.
909 AEON ANNUAL REPORT 2006 GREENING THE ENVIRONMENT: GREENINGAN AEON THE ENVIRONMENT:INITIATIVE AN AEON INITIATIVE Tree planting ceremonies have traditionally been carried out
by AEON CO. (M) BHD. as an official ceremony to mark the
opening of each AEON Shopping Centre in Malaysia.
These efforts are partly sponsored by the AEON Environment
Foundation and the “AEON 1% Club” as part of ÆON Co.
Ltd. of Japan’s global reforestation programme.
In 2006, AEON commemorated the openings of its 12th and
13th Shopping Centres in Taman Equine and Cheras Selatan
respectively by carrying out Tree Planting Ceremonies.
The AEON Taman Equine Shopping Centre’s tree planting species. The event was officiated by YB Dato’ Hajah Azizah bt
ceremony on 27 June 2006 saw 4000 saplings being Datuk S.P. Haji Mohd Dun, the Deputy Minister of Housing
planted by 800 participants from local authorities, students and Local Government.
from nearby schools, residents associations, NGOs such The purpose of AEON’s tree planting programme is to raise as The Organisation for Industrial, Spiritual and Cultural awareness amongst the community towards AEON’s mission Advancement - International (OISCA) and Malaysia Landscape of greening the environment for future generations and to Industry Association (SILARA), JUSCO’s suppliers and tenants, assert the importance of preserving and protecting nature. J CARD Members and JUSCO staff members. The guest of
honour was YB Dato’ Ramli bin Mahmud, State Secretary of With the public’s participation, the younger generation will
Selangor. be better exposed to such environmental issues, and these
activities will help to foster better relationships between JUSCO For AEON Cheras Selatan Shopping Centre’s tree planting and local residents, who are our current and future customers. ceremony, around 1,000 enthusiastic nature lovers turned up
on 4 November 2006 to help plant 4,000 saplings of various
Dato’ Abdullah and YB Dato’ Ramli bin Mahmud lead the greening of AEON Taman Equine Shopping Centre.
YB Dato’ Hajah Azizah, Dato’ Abdullah and AEON Management planting trees around AEON Cheras Selatan Shopping Centre.
10 AEON ANNUAL REPORT 2006 20THAEON ANNIVERSARY WOODLAND TREE PLANTING PROGRESS AT PAYA INDAH AEONWETLANDSCONTINUES WOODLAND AT PAYA INDAH TO WETLANDS THRIVE CONTINUES TO THRIVE
On 15 September 2004, AEON CO. (M) BHD. held a special tree planting ceremony at the Paya Indah Wetlands in Dengkil, Selangor, to commemorate AEON’s 20 years in Malaysia. The volunteers included AEON staffs, invited customers, business associates and 1000 volunteers from Japan.
This event was sponsored by the AEON Environment Foundation of Japan, which has sponsored the planting of over 5 million trees around the world.
Representatives of the Foundation have paid regular visits to this site, called the Malaysia-Japan Friendship Forest, AEON Woodland to review the progress of the area. It is now a beautiful tract of thriving greenery.
Year 2004
Year 2007
11 AEON ANNUAL REPORT 2006 THETHE “WITH “WITH ALL OUR ALL HEARTS” OUR CHARITY HEARTS” GALACHARITY DINNER 2006 GALA DINNER 2006
The annual Charity Gala Dinner is the highlight and major fund-raising activity for the ‘With All Our Hearts’ Malaysian JUSCO Foundation. It is supported by generous donations from AEON’s numerous suppliers and business associates, who attended the dinner.
This year’s event, which was held at the Grand Ballroom of the prestigious Sunway Lagoon Resort Hotel on 23 November 2006, was billed “a night of stars”. Indeed, the night’s entertainment began with a special parody of international ‘celebrities’, such as Elvis, Madonna and Michael Jackson.
The guest of honour was Dato’ Abdullah bin Mohd Yusof, the Chairman of AEON CO. (M) BHD. Malaysia’s pop princess and ambassador of the Malaysian JUSCO Foundation, Datuk Siti Nurhaliza, entertained guests with some of her latest hits. Lending strong support were Singapore’s “king of comedy” Moe Alkaff and local entertainer Leonard Tan.
Proceeds from the evening went towards the purchase of a new Toyota Hiace 2.7 High Roof Window Van for Rumah K.I.D.S. (Rumah Kanak-kanak Ini Disayangi) to replace the old one, which had been destroyed in a fire.
A spectacular night of stars, for a worthy cause.
DATUKDATUK SITI NURHALIZA SITI NURHALIZA SINGS FOR THESINGS FOR UNDERPRIVILEGEDTHE UNDERPRIVILEGED
Fortunate shoppers and tenants were entertained to a special presentation by Datuk Siti Nurhaliza at the AEON Taman Equine Shopping Centre on 17 April 2006 and at the Alpha Angle Shopping Centre, JUSCO Wangsa Maju, on 9 July 2006. Appearing in her capacity as the ambassador of the “With All Our Hearts” Malaysian JUSCO Foundation, Datuk Siti Nurhaliza sang some of her popular hits for the excited crowd. In the meantime, she appealed to the audience to donate generously to the various charities and needy individuals supported by the Foundation. Datuk Siti Nurhaliza also made a similar appearance at the JUSCO Bukit Raja Shopping Centre on 25 June 2006 for an official handover of donations worth a total of RM18,226.14 to various charities.
...and at JUSCO Wangsa Maju. Datuk Siti Nurhaliza at JUSCO Bukit Raja...
...at JUSCO Taman Equine... 12 AEON ANNUAL REPORT 2006 CONTRIBUTIONSCONTRIBUTIONS TO THE TOCOMMUNITY THE COMMUNITY ‘GOTONG-ROYONG‘GOTONG-ROYONG AA HELPING HELPING HAND HAND FOR THE FOR BERSAMABERSAMA MASYARAKAT’ MASYARAKAT’ FLOODTHE FLOOD VICTIMS VICTIMS During the year 2006, staff members from each JUSCO store AEON CO. (M) BHD. donated more than RM50,000 worth of throughout Malaysia put aside some personal time to carry food to help the victims of the recent devastating floods in out ‘gotong-royong’ activities at orphanages, schools and Johor and Melaka. Between 21 and 23 December 2006, AEON religious organisations near their respective store. These distributed 1,400 packs of (10kg) rice, 4,224 tins of sardines, activities included painting and cleaning up the compound, 2,820 packets of crackers and 4,260 bottles of mineral water repairing electrical wiring and lights, as well as donations of to evacuees in Batu Pahat and Pontian Kecil. much-needed necessities. AEON CO. (M) BHD.’s Corporate About 75 AEON CO. (M) BHD. staff members who were Affairs Department organised these “Gotong-Royong affected by the flood were given unrecorded and Bersama Masyarakat Tempatan (Community Service with compassionate leave and food aid was provided to them and Local Communities)” activities in line with the Company’s their families as well. efforts to reach out to the surrounding communities. On 24 January 2007, 250 volunteers from AEON CO. (M) BHD. came together to help in a big 2-day clean-up effort in Tebrau, Johor Bahru.
JUSCO Store staff members giving their best to reach out to the local communities. Delivering the much-needed food and water to the flood victims. AID FOR EARTHQUAKE ORPHANS GIVEN A HEAD AID FOR EARTHQUAKE ORPHANS GIVEN A HEAD VICTIMSVICTIMS IN INYOGYAKARTA YOGYAKARTA STARTSTART AT AT SCHOOL SCHOOL On Saturday, 27 May 2006, a damaging earthquake of AEON, through the Malaysian JUSCO Foundation, launched magnitude 5.8 on the Richter Scale hit Yogyakarta in Central an innovative outreach programme called “Membeli Java, Indonesia. In response, AEON CO. (M) BHD. collected Sambil Menderma” (Donate as you Buy). JUSCO customers a total of RM36,425 through a donation drive from 2 – 25 who purchased school uniforms at the “Back To School” June 2006. The “With All Our Hearts” Malaysian JUSCO promotion (from 1 to 21 December 2006) were asked to Foundation added another RM36,425, which were presented place the price tags into special boxes provided. The Malaysian to the Embassy of Indonesia on 29 June 2006. JUSCO Foundation then donated 1% of the total sales to 16 orphanages around the country, to help them buy school uniforms for the 2007 school year.
Presenting the cheque to the Indonesian ambassador for the earthquake victims.
Every child deserves the opportunity to get a good education. 13 AEON ANNUAL REPORT 2006 HUMANHUMAN RESOURCE RESOURCE MANAGEMENT MANAGEMENT IMPROVINGIMPROVING THE THE QUALITY QUALITY OF OUR OF STAFF OUR WITH STAFF OUM WITH OUM On 4 August 2006, AEON CO. (M) BHD. signed a On 18 December 2006, 31 AEON staff members were awarded Memorandum of Understanding with OUM (Open University their Diploma in Management (Retailing) at OUM’s 3rd Malaysia) for the Executive Diploma (in Trade Management, Convocation ceremony, held at the PWTC’s Dewan Merdeka. Human Resource Management and Retailing) Programme. The 24 apprentice and 7 international staff members received AEON was represented by the Managing Director, Mr. their Diplomas from the Pro Chancellor, Tan Sri Dato’ Azman Nagahisa Oyama and OUM was represented by Prof. Tan Sri Hashim. Dato’ Anuwar Ali. A welcome ceremony was also held for the first batch of 69 students.
Graduates of the 3rd OUM Convocation with their well-earned diplomas. JAPAN TRAINEE THE JUSCO BUSINESS JAPANPROGRAMME TRAINEE PROGRAMME THESCHOOL JUSCO BUSINESS SCHOOL The 5th batch of trainees who successfully completed the The JUSCO Business School is an intensive course for the Japan Trainee Programme returned to Malaysia on 17 January benefit of merchandisers, store managers and deputy store 2007. They are now all holding positions as leaders in their managers organised by AEON. To celebrate the successful respective stores nationwide. completion of the course, a special closing ceremony was held on 22 September 2006. The Japan Trainee Programme is designed to help selected leaders prepare for the ever-changing retail environment, by exposing them to overseas working conditions. One of the vital ways to enhance their knowledge and skills in retailing is by giving them some experience in ÆON Japan. This programme also teaches them to be independent, in preparation for their future roles as leaders in the Company.
Participants of the 2006 JUSCO Business School.
NEWAID LEADER FOR EARTHQUAKE DEVELOPMENT TEAMORPHANS BUILDING GIVEN FOR THE A HEAD PROGRAMMEVICTIMS IN YOGYAKARTA FUTURESTART AT SCHOOL To train and develop new leaders from within the Company, AEON CO. (M) BHD. organised a number of team-building AEON CO. (M) BHD. has created a New Leader Development activities throughout the year to develop attitudes, motivation Programme (NLDP). The graduation ceremony for the 2nd and unity within the Company. Some of the programmes batch of participants was held on 12 December 2006, organised were the Teaming Up Ceremony for JUSCO Taman attended by AEON CO. (M) BHD. Executive Director, Mr. Equine staff on 24 May 2006, and a “Teaming Up Camp” Masato Yokoyama. Participants were asked to present a for D’HATI (formerly known as J-One) Pearl Point staff from project that applied all the skills and knowledge they gained 1 – 3 June 2006, followed by a “Teaming Up Ceremony” on during the one-year course. 13 June 2006. Team-building Programmes were also held for Blue Wave supervisors and assistant supervisors at Kem Bina The programme has already showed some success as 30 out Semangat Yayasan Selangor from 24 – 26 July 2006 and for Blue of the 50 participants have already been promoted to higher Wave team members at Fraser’s Hill from 1 – 3 August 2006. positions in the Company.
AEON is committed towards developing Teamwork is all about harmony and 14 leaders from within the company. attitudes. AEON ANNUAL REPORT 2006 Our Principle regardless of how times may have changed, we strive to serve the ‘Customer First’. We are always mindful of the three keywords which make up the essence and character of the retail industry and must be considered in any development: ‘peace’, ‘people’ and ‘community’. Ours is a person-to-person business and our existence is deeply intertwined with the people of the regions and societies in which we serve. These precepts remain the same wherever we do business, where we act as a contributing member of the local community. AN INTRODUCTION AN INTRODUCTION Our Strategy TOTO ÆON ÆON is to establish a solid competitive position and achieve continuous growth. Two key components underlying this AEON CO. (M) BHD. is a leading retailer in Malaysia with a total strategy are: revenue of RM1.94 billion (10 months) in the financial period • Accelerating Shopping Centre Development. We are under review. The Company was incorporated on 15 September channeling our resources towards developing attractive, 1984. AEON CO. (M) BHD. was set up in response to the Malaysian integrated commercial facilities which our customers Government’s invitation to ÆON Japan to help modernise the can fully enjoy, such as regional shopping centres and retailing industry in Malaysia. The ‘JUSCO’ name today is well community shopping centres. This segment also involves established among Malaysians as well as foreigners, especially leasing shopping space and facilities to tenants. due to its association with the international ÆON group of • Aggressive Pursuit of GMS Stores and Supermarkets. companies. AEON has established itself as a leading chain of Our General Merchandise Stores (GMS), which combine General Merchandise Stores. AEON’s constant interior supermarkets and departmental stores under one roof, refurbishment of stores to project an image designed to satisfy operate as full-line retailers. Products offered range from the ever changing needs and desires of consumers is clear food and other daily necessities, apparel and household evidence of this. The Company’s performance has been further goods. As for our supermarkets, we strive to offer our enhanced by the management’s acute understanding of target customers a refreshing “shop with convenience and market needs and the provision of a correct product-mix. AEON’s comfort” atmosphere. stores are mostly situated in suburban residential areas, catering to the vast middle income group. Our Goal is to operate as an “international-scale retailing group”, The ÆON group of companies consists of ÆON Co., Ltd., and recognised for excellence not only in Japan, but also more than 150 consolidated subsidiaries and affiliated companies. in other nations. The international recognition we are In addition to its core General Merchandise Stores (GMS) plus its working to achieve is not one which can be measured merely in quantifiable terms of size, growth and supermarket and convenience store operations, ÆON is also active profitability. We hope to be competitive at the global in specialty store operations and shopping centre development, level in intangible aspects such as customer satisfaction operations, credit card business and services. The ÆON group of and corporate citizenship. We are dedicated to the companies is an integrated Japanese retailer and is active not only idea of “quality management” to further enhance our in Japan but also in Southeast Asia, China and North America. capabilities. At all times, in every market, ÆON’s activities are guided by the unchanging ‘Customer First’ philosophy. Its aim is to surpass expectations by combining excellent products with unique personal services that enhance the shopping experience to make customers smile every time they shop.
Our “Customer First” policy begins A healthy environment is key to with our retail staff. our success in a community.
15 AEON ANNUAL REPORT 2006 CORPORATE INFORMATION AND CORPORATEDIRECTORY INFORMATION AND DIRECTORY
Board of Directors Stock Exchange Listing • Dato’ Abdullah bin Mohd Yusof (Chairman) The Company is a public listed • Mr. Toshiji Tokiwa company, incorporated and • Mr. Tatsuichi Yamaguchi domiciled in Malaysia and listed • Mr. Nagahisa Oyama on the Main Board of the • Mr. Masato Yokoyama Bursa Malaysia Securities Berhad. • Datuk Ramli bin Ibrahim • Brig. Jen. (B) Dato’ Mohd Idris bin Saman Homepage • Datuk Zawawi bin Mahmuddin http://www.jusco.com.my • Dato’ Chew Kong Seng Principal Bankers Secretaries • Bank of Tokyo-Mitsubishi UFJ • Tai Yit Chan (MAICSA 7009143) (Malaysia) Berhad (302316-U) • Saw Bee Lean (MAICSA 0793472) • Malayan Banking Berhad (3813-K) • CIMB Bank Berhad (13491-P) Registered Office and Head Office (formerly known as Bumiputra 3rd Floor, JUSCO Taman Maluri Shopping Centre, Commerce Bank Berhad) Jalan Jejaka, Taman Maluri, Cheras, 55100, Kuala Lumpur. Tel: 03-9207 2005 Fax: 03-9207 2006 / 2007
Auditors CORPORATE KPMG Desa Megat & Co. (AF0759) CORPORATE CALENDAR Chartered Accountants, CALENDAR Wisma KPMG, Jalan Dungun, Damansara Heights, Notice of Annual General Meeting 31 May 2006 50490 Kuala Lumpur. Annual General Meeting 22 June 2006 Registrars Tenaga Koperat Sdn. Bhd. (118401-V) Payment of Dividend Book Closure – 4 July 2006 20th Floor, Plaza Permata, Payment – 20 July 2006 Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur. Quarterly Results Announcement 1st Quarter – 21 April 2006 Tel: 03-4041 6522 Fax: 03-4042 6352 Quarterly Results Announcement 2nd Quarter – 10 August 2006
Quarterly Results Announcement 3rd Quarter – 7 November 2006
Quarterly Results Announcement 4th Quarter – 15 February 2007
16 AEON ANNUAL REPORT 2006 SHARE PRICE
Stock Code: 6599 Stock Name: AEON 2006 Mar Apr May Jun Jul Aug Sep Oct Nov Dec High (RM) 6.20 6.15 6.10 6.05 5.95 5.90 5.85 6.00 7.15 7.20 Low (RM) 6.00 5.90 5.65 5.70 5.55 5.75 5.75 5.65 6.05 6.95 Volume (‘000) 1562 1654 1232 485 2587 1604 5320 2589 1869 2103 RM Vol ('000)
8.00 6000 ...... 7.00 ...... 5000 ......
6.00 ...... 4000 5.00
4.00 3000
3.00 2000
2.00
1000 1.00
0.00 0 Mar Apr May Jun Jul Aug Sept Oct Nov Dec
PROFIT ATTRIBUTABLE REVENUE TO SHAREHOLDERS RM million RM million
2,000 1,962.4 120 1,941.4 1,784.6 103.2 100 1,523.8 1,500 1,368.3 80 73.2 64.2 63.6 60.5 1,000 60
40
500
20
- - 02/03 03/04 04/05 05/06 2006 02/03 03/04 04/05 05/06 2006 (10 months) (10 months) Financial Year Financial Year 17 AEON ANNUAL REPORT 2006 FIVE YEARS FINANCIAL FIVEHIGHLIGHTS YEARS FINANCIAL HIGHLIGHTS
31.12.2006 28.2.2006 28.2.2005 29.2.2004 28.2.2003 RM'000 RM'000 RM'000 RM'000 RM'000
INCOME STATEMENT Revenue 1,941,431 1,962,445 1,784,564 1,523,781 1,368,268 Retailing 1,763,283 1,807,753 1,648,475 1,406,242 1,262,851 Property Management Services 178,148 154,692 136,089 117,539 105,417 Profit before tax 140,741 112,198 99,010 96,288 90,833 Profit after tax 103,246 73,204 64,247 63,588 60,545 Net dividend 20,498 18,954 15,163 12,636 12,636
BALANCE SHEET Assets Property, plant and equipment 942,252 845,248 628,950 575,673 488,123 Prepaid lease payments 125,808 124,573 125,950 110,406 71,884 Investment 1,075 1,075 175 175 175 Current assets 369,238 240,596 259,771 266,115 226,703 Total assets 1,438,373 1,211,492 1,014,846 952,369 786,885
Equity Share capital 175,500 175,500 175,500 87,750 87,750 Revaluation reserve 33,217 33,648 34,165 34,682 35,199 Share Premium 20,609 20,609 20,609 108,488 108,488 Retained earnings 476,817 392,094 333,536 281,408 229,939 Total equity attributable to 706,143 621,851 563,810 512,328 461,376 shareholder of the Company Liabilities Deferred tax liabilities 29,113 29,281 24,429 24,322 20,523 Current liabilities 703,117 560,360 426,607 415,719 304,986 Total equity and liabilities 1,438,373 1,211,492 1,014,846 952,369 786,885
STATISTICS Net earnings/(loss) per share (sen) 58.8 41.7 36.6 *36.2 *34.5 Gross dividend per share (%) 16 15 12 20 20 Net assets per share (RM) 4.02 3.54 3.21 5.84 5.25
Note: The leasehold land has been reclassified from property, plant and equipment to prepaid lease payments during the financial period is accordance with FRS 117, Leases. Comparative figures have been restated accordingly.
* Earnings per share has been calculated based on the number of ordinary shares of 175,500,000. Comparative earnings per share information has been restated after adjusting for the bonus issue undertaken by the Company.
18 AEON ANNUAL REPORT 2006 BOARDBOARD OF DIRECTORS OF DIRECTORS
(Seated from left to right) (Standing from left to right)
Mr. Nagahisa Oyama Mr. Masato Yokoyama Managing Director Executive Director
Dato’ Abdullah bin Mohd Yusof Brig. Jen. (B) Dato’ Mohd Idris bin Saman Non-Independent Non-Executive Independent Non-Executive Director Chairman
Datuk Ramli bin Ibrahim Mr. Toshiji Tokiwa Non-Independent Non-Executive Director Non-Independent Non-Executive Vice Chairman Dato’ Chew Kong Seng Independent Non-Executive Director
Datuk Zawawi bin Mahmuddin Independent Non-Executive Director
Mr. Tatsuichi Yamaguchi Non-Independent Non-Executive Director
19 AEON ANNUAL REPORT 2006 DIRECTORS’DIRECTORS’ PROFILES PROFILES
Dato’ Abdullah bin Mohd Yusof (67), (Malaysian) Non-Independent Non-Executive Chairman Dato’ Abdullah bin Mohd Yusof was appointed the Chairman of AEON CO. (M) BHD. on 26 October 1984. He holds a Bachelor of Law (Honours) from University of Singapore, which he obtained in 1968. He has more than thirty (30) years of experience as an Advocate & Solicitor. He started his career with Skrine & Co., as a Legal Assistant in 1968 before starting his own partnership under the name of Tunku Zuhri Manan & Abdullah, Advocates & Solicitors in 1969 and subsequently renamed the law firm to Abdullah & Zainuddin, Advocates and Solicitors. He sits on the Board of Directors of MMC Corporation Berhad, Zelan Berhad (formerly known as Tronoh Consolidated Malaysia Berhad) and Tradewinds Corporation Berhad, all of which are companies listed on Bursa Malaysia Securities Berhad. He also sits on the Board of Directors of several private limited companies. He is a member of the Remuneration & Nomination Committee of the Board. Dato’ Abdullah bin Mohd Yusof has attended all the four (4) Board meetings held in the financial period. He holds 268,000 ordinary shares directly in the Company and 1,411,000 ordinary shares indirectly in the Company.
Mr. Toshiji Tokiwa (67), (Japanese) Non-Independent Non-Executive Vice Chairman Mr. Toshiji Tokiwa was appointed the Non-Executive Vice Chairman of AEON CO. (M) BHD. on 16 June 2000. He holds a Bachelor of Law Degree from Keio University, Japan, which he obtained in 1963. He joined the Dai-Ichi Kangyo Bank Ltd. (formerly known as Dai-Ichi Bank Ltd.), Japan in 1963 as a Management Trainee. In 1992, he was promoted to the position of Director and General Manager of the International Treasury Division of the Dai-Ichi Kangyo Bank Ltd. (formerly known as Dai-Ichi Bank Ltd.), and in 1994 seconded to assume the same position at the New York Branch of Dai-Ichi Kangyo Bank Ltd. (formerly known as Dai-Ichi Bank Ltd.), New York, USA. Subsequently, he was the Senior Managing Director of Dai-Ichi Kangyo Bank Ltd. (formerly known as Dai-Ichi Bank Ltd.), from 1995 to 1996. He joined Chuo Real Estate Co., Ltd., a company principally involved in the leasing and management of office buildings, as the President in 1996 and in 1997 he joined Hibiya Co., Ltd. , as the President. He was also a Non-Executive Corporate Auditor of Fujitsu General Co. Ltd. from 1997 to 2000. In 2000, he joined ÆON Co., Ltd., as Chairman and in 2003 he was appointed Director and Chairman of the Board of Directors of ÆON Co., Ltd. In 2006 he was appointed and presently holds the position of Corporate Advisor of ÆON Co., Ltd. Mr. Toshiji Tokiwa has attended all the four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
Mr. Tatsuichi Yamaguchi (61), (Japanese) Non-Independent Non-Executive Director Mr. Tatsuichi Yamaguchi was appointed Non-Executive Director of AEON CO. (M) BHD. on 23 July 2003. He holds a Degree in Management from Meiji University, Japan, which he obtained in 1969. He joined ÆON Co., Ltd., in 1969 and was promoted as the Store Manager of Toyohashi Store, Japan, in 1980. In 1986 he was seconded to Kornhill Store of JUSCO Stores (Hong Kong) Co., Ltd., where he was appointed as the Deputy Store Manager, and subsequently appointed as the Director and the Managing Director of JUSCO Stores (Hong Kong) Co., Ltd., in 1988 and 1990 respectively. He was appointed as the Director of ÆON Co., Ltd., in 1996, and the Director & General Manager (Apparel) Merchandising Division in 1997. In 2000, he assumed the position of Director & General Manager, Chubu Regional Company, and the Senior Vice President, Asia Operations, ÆON Co., Ltd. in 2003. In 2005 he assumed the position of Executive Vice President, Asia Operations, and currently holds the position of Corporate Advisor of ÆON Co., Ltd since 2006. Mr. Tatsuichi Yamaguchi is also the Chairman of the Nomination and Remuneration Committees of the Board. Mr. Tatsuichi Yamaguchi has attended all four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
Note: Save as disclosed in this annual report, all the Directors mentioned on pages 20 to 22 have no conflicts of interest with AEON CO. (M) BHD. or any family relationship with any Director and/or substantial shareholder nor have they any convictions for offences within the past 10 years, except for traffic summons, if any. 20 AEON ANNUAL REPORT 2006 Mr. Nagahisa Oyama (52), (Japanese) Managing Director Mr. Nagahisa Oyama was appointed the Managing Director of AEON CO. (M) BHD. on 22 June 2005. He holds a Bachelor's Degree in Business Management from Kinki University, Japan, which he obtained in 1977. He joined ÆON Co., Ltd. in 1977 as a Management Trainee and was promoted to be Softline Merchandiser in 1980. He was seconded to Siam Jusco, Thailand to set up the GMS Merchandising Division. Following his appointment at Siam Jusco, Thailand, from 1989 to 1991, he was promoted to become the General Manager of Tonami Regional Shopping Centre in 1991. Mr. Oyama was next appointed as the General Manager of Kaga Regional Shopping Centre in 1996. He served as General Manager of Kochi Regional Shopping Centre from 2000 to 2002. In 2002, he was promoted to become the Regional General Manager of Higashi Mikawa and Shizuoka Prefecture, Japan, where he was in-charge of the overall planning, opening and operations of three (3) new Regional Shopping Centres and the operations of seven (7) existing Regional Shopping Centres in the Shizuoka Prefecture. Mr. Nagahisa Oyama has attended all the four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
Mr. Masato Yokoyama (54), (Japanese) Executive Director Mr. Masato Yokoyama was appointed Executive Director of AEON CO. (M) BHD. on 26 October 2001. He holds a Bachelor of Arts in Commerce from Waseda University in Japan, which he obtained in 1976. He joined ÆON Co., Ltd. in 1976 and was the Store Manager of Ishioka Store prior to his secondment to AEON CO. (M) BHD. in 1993. Mr. Yokoyama held the position of Store Manager of JUSCO Taman Maluri from 1993 to 1998. He was promoted to become the Senior Softline Merchandising Manager from 1998 to 1999 and the Senior Operations Manager from 1999 to 2000. Currently, Mr. Masato Yokoyama is the Executive Director in charge of the overall Operations of the Company. Mr. Masato Yokoyama has attended all the four (4) Board meetings held in the financial period. He holds 30,000 ordinary shares directly in the Company.
Datuk Ramli bin Ibrahim (66), (Malaysian) Non-Independent Non-Executive Director Datuk Ramli bin Ibrahim was appointed Non-Executive Director of AEON CO. (M) BHD. on 20 August 1996. He is a member of the Malaysian Institute of Accountants and a Fellow of the Australian Institute of Chartered Accoutants. He was attached to KPMG Peat Marwick (“KPMG”) (now know as KPMG) in Australia, United Kingdom and Malaysia from 1959 to 1995. He was appointed a Partner of KPMG Malaysia in 1971. In 1989, he was made the first bumiputera Senior Partner of KPMG Malaysia. He also served on the Boards of KPMG International and KPMG Asia Pacific from 1990 to 1995. He retired from KPMG Malaysia in 1995. From December 1995 to December 2000, he served as the Executive Chairman of Kuala Lumpur Options & Financial Futures Exchange Berhad. Currently, he sits on the Board of Directors of Ranhill Berhad, Measat Global Berhad, BCT Technology Berhad and several other unlisted public and private limited companies including HSBC Bank Malaysia Berhad and Yayasan Tuanku Syed Sirajuddin. He is also a member of the Audit and Remuneration Committees of the Board. Datuk Ramli bin Ibrahim has attended all the four (4) Board meetings held in the financial period. He holds 280,000 ordinary shares indirectly in the Company.
21 AEON ANNUAL REPORT 2006 Brig. Jen. (B) Dato’ Mohd Idris bin Saman (62), (Malaysian) Independent Non-Executive Director Brig. Jen. (B) Dato’ Mohd Idris bin Saman was appointed Non-Executive Director of AEON CO. (M) BHD. on 16 June 2000. He holds a Post Graduate Diploma in Management Studies from the Slough College, United Kingdom which he obtained in 1980. He was a graduate of the Air Command & Staff College, Maxwell, USA and the Armed Forces Defence College, Kuala Lumpur. He joined the Royal Malaysian Air Force as a Pilot Officer and served the Royal Malaysian Air Force for thirty-five (35) years, in various executive positions within its Logistic Branch. He retired from the Royal Malaysian Air Force in 2000 as Assistant Chief of the Air Force (Material). He is a Director of Affin Fund Management Sdn. Bhd. He is also a Fellow of the Malaysian Institute of Logistics. Dato’ Mohd Idris bin Saman is a member of the Audit and Nomination Committees of the Board. Dato’ Mohd Idris bin Saman has attended all the four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
Datuk Zawawi bin Mahmuddin (61), (Malaysian) Independent Non-Executive Director Datuk Zawawi bin Mahmuddin was appointed Non-Executive Director of AEON CO. (M) BHD. on 23 July 2001. He holds a Bachelor of Arts (Honours) Degree from the University of Malaya, which he obtained in 1968. Datuk Zawawi joined the Administrative and Diplomatic Service and began his career as an Administrative Officer in the Ministry of Transport in 1968. From 1970 to 1975 he served as private secretary to the Deputy Prime Minister and thereafter held various positions in the Cabinet Secretariat of the Prime Minister’s Department from 1975 to 1990. His subsequent appointments were as follows:- Federal Secretary in Sarawak (1990 – 1992), Deputy Secretary General 1, Ministry of Home Affairs (1992 – 1994), Secretary General, Ministry of Information (1994 – 2000). Datuk Zawawi was formerly on the Board of Syarikat Explosive Malaysia Sdn. Bhd. (SME), National Film Development Corporation (FINAS), Governing Council, Bernama and Sukom Ninety Eight Bhd. Besides being Chairman of Northport Distripark Sdn. Bhd., he also sits on the Board of a few private limited companies. He is also a member of the Nomination Committee of the Board. Datuk Zawawi bin Mahmuddin has attended all the four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
Dato’ Chew Kong Seng (69), (Malaysian) Independent Non-Executive Director Dato’ Chew Kong Seng was appointed Non Executive Director of AEON CO. (M) BHD. on 23 July 2001. He is a Fellow of the Institute of Chartered Accountants in England and Wales, a Member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. He was a tax officer in the Inland Revenue Department in the United Kingdom and then joined Stoy Hayward & Co. in the United Kingdom from 1964 to 1970. He returned to Malaysia and joined Turquand Young & Co. (now known as Ernst & Young) and was subsequently transferred to Sarawak office as Manager in-charge and later as Partner in-charge. He was appointed as the Managing Partner of Ernst & Young from 1990 to 1996. Currently, Dato’ Chew Kong Seng is a Director and Audit Committee Chairman of Petronas Dagangan Berhad, Industrial Concrete Products Bhd, PBA Holdings Berhad and Bank of America Malaysia Berhad, as well as a Director and a member of the Audit Committee of Petronas Gas Berhad and GuocoLand (Malaysia) Berhad (formerly known as Hong Leong Properties Berhad). He is also a Director of Encorp Berhad and Great Wall Plastic Industries Berhad. Dato’ Chew Kong Seng is the Chairman of the Audit Committee and a member of the Nomination Committee of the Board. Dato’ Chew Kong Seng has attended all the four (4) Board meetings held in the financial period. He does not hold any shares in the Company.
22 AEON ANNUAL REPORT 2006 SENIORSENIOR MANAGEMENT MANAGEMENT
(Seated from left to right) (Standing from left to right)
Mr. Nagahisa Oyama Mr. Poh Ying Loo Managing Director General Manager Finance
Ms. Chong Swee Ying Mr. Kenji Fujita General Manager Store & Shopping Centre General Manager SC Development Operations
Mr. Tomio Yokoyama Puan Nur Qamarina Chew Assistant General Manager SC Development General Manager New Business Development
Mr. Yoshihisa Tanizawa Ms. Audrey Lim Suan Imm Assistant General Manager GMS Merchandising Assistant General Manager Marketing
Lt. Col (R) Yaacob bin Mahmud Puan Noryahwati Mohd. Noh General Manager Logistics & Loss Control General Manager Human Resource, Administration and Security, Safety & Health Mr. Mitsuru Nakata Assistant General Manager SSM Merchandising Mr. Masato Yokoyama Executive Director Encik A. Rashid bin Adam General Manager Corporate Affairs
23 AEON ANNUAL REPORT 2006 CHAIRMAN’SCHAIRMAN’S STATEMENT STATEMENT
To Our Shareholders
On behalf of the Board of Directors, I am pleased to present
to you the Annual Report and Audited Financial Statements of
AEON CO. (M) BHD. (AEON) for the 10-month period ended
31 December 2006 following the change of AEON’s financial
year-end from 28 February to 31 December 2006 onwards.
Strong Financial Performance
For the ten months ended 31 December 2006, AEON
continued to achieve strong revenue and earnings growth.
Revenue was RM1.94 billion for the period under review
which, comparing on a same period basis from March 2005
to December 2005, represented a 22.9% increase. Equally,
AEON registered a strong Profit before Tax (PBT) of RM140.7
million and a Profit after Tax (PAT) of RM103.2 million for the period under review. Building our Operations across Malaysia
Despite the continuous challenging and competitive The earnings however included a gain of RM33.9 million environment of Malaysia’s retail industry, 2006 was a from the disposal of its JUSCO Kinta City Shopping Centre good year for AEON’s core businesses of retail and property in Ipoh, in a sales and leaseback transaction which was management services. AEON’s focus on providing a wide completed in the period under review. If this is excluded, assortment of quality merchandise at reasonable prices to its PAT from our operations still registered an impressive customers, supported by its loyalty programme and excellent level of a very healthy RM69.3 million for the ten-month customer service standards, have continuously proven to be period, indicating the strength and sustainability of the a successful formula. earnings from AEON’s core businesses. The proceeds from
the sales and leaseback transaction had been utilised for Retail sales contributed RM1.76 billion for the ten months development of AEON’s new outlets, refurbishment of its ended 31 December 2006, a growth of 21.0% over the existing stores and for working capital purposes. same period last year. The growth is driven both by
contributions from new stores and also better overall Earnings per share for the period under review was 58.8 performance of its existing stores. In the period under review, sen per share inclusive of the gain on disposal, or 39.5 sen the JUSCO Seremban 2 Store and JUSCO Tebrau City Store excluding the gain. AEON’s balance sheet remains healthy operated for the full period compared to the previous year as at 31 December 2006 with a net cash position and a net and new stores in Taman Equine, Queensbay Mall and asset value per share of RM4.02. Cheras Selatan opened for business. Same store growth
registered a marginal increase due to major renovations to
the JUSCO Mid Valley Store and JUSCO Taman Universiti
Store in the period under review. Excluding the JUSCO
24 AEON ANNUAL REPORT 2006 same store sales registered a commendable growth of Opportunities were also taken during these ceremonies to
2.7%. As for AEON’s supermarket business, which had a make donations to selected schools to enable the school name change from “J-One” to “PASAR RAYA D’HATI” as children to have more books and computer facilities. part of AEON’s strategy to have a more local flavour, its Through the “With All Our Hearts” Malaysian JUSCO contribution was still marginal in the period under review, Foundation, AEON continues to raise funds to provide better though AEON added a new outlet in the Pearl Point life for the young and underprivileged children, through Shopping Mall, Kuala Lumpur. various activities such as the “Shop and Donate” event at its
AEON’s vast experience in property management and services stores and the Charity Gala Dinner event. continued to place AEON in a strong position to attract In the period under review, through the “Shop and Donate” and retain tenants, which is reflected in AEON’S excellent event, funds were raised to buy books and school uniforms revenue from property management services of RM178.1 for children of sixteen orphanage homes. And through the million for the ten months ended 31 December 2006, Charity Gala Dinner event, funds were raised to purchase a representing a 46.0% increase over the same period in the van for RUMAH K.I.D.S. (Rumah Kanak-kanak Ini Disayangi) previous year. Though comparatively, the increase in revenue orphanage home. was mainly due to the full ten months’ operations of its shopping centres in Tebrau City and Seremban 2, and also the On 13 April 2006, the Malaysian JUSCO Foundation also new revenue generated from additional lettable space in the officially handed over the orphanage home, “Rumah Tunas period under review from its new shopping centres in Taman Harapan Sepenuh Hati”, which it sponsored, to the Malaysian Equine and Cheras Selatan, it also reflects AEON’s ability, Social Welfare Department for their administration. through its well designed shopping centres and commitment to timely refurbishment and upkeep, to enjoy high occupancy. During the Yogyakarta earthquake tragedy, AEON organised
At the end of 2006, the occupancy rate of AEON’s shopping a donation drive at its stores and, together with equal centres continued achieving an impressive level of 98.0%. contributions from the Malaysian JUSCO Foundation, a total
of RM72,850 in aid was channelled to assist the victims. AEON -- Corporate Social We would like to thank all our customers and staff for their Responsibilities generosity in this charitable act. Even as AEON concentrates on its business growth, it is AEON’s aim to be a friend to the many communities of During the recent floods in Johor, to ease the hardship of
Malaysians. AEON continues to give priority to preserving the the affected residents, AEON organised a mega “Gotong- surrounding environment in which it operates, as is reflected Royong” together with the local council, to clean up affected in its core mission of “Planting the Seeds of Growth to Serve areas and homes at Kampung Kangkar Tebrau, Johor, one
Our Community”. of the unfortunate villages hit by the flood. Approximately
RM50,000 worth of food, drinks and other necessities, which To this end, in the period under review, as in previous new included many contributions from AEON’s business associates store openings, AEON carried out tree planting ceremonies and AEON’s staff, were further provided to the affected together with the local communities and school children in residents. the latest AEON Taman Equine and AEON Cheras Selatan shopping centres before they opened for business. AEON continues to look forward to increase its corporate
social responsibility (CSR) activities with the local communities
of each of its stores and shopping centres. 25 AEON ANNUAL REPORT 2006 Looking to the Year Ahead Dividend The Malaysian economy grew 5.9 per cent in 2006 and The Board of Directors is recommending a first and final economic growth is expected to remain favorable in 2007. dividend of 16 per cent less 27 per cent income tax for the 10 Private consumptions and increased investment activities are months ended 31 December 2006, for your approval at the expected to provide support to sustain the favorable business forthcoming Annual General Meeting. environment. To conclude These positive economic indicators augur well for AEON Finally, I would like to take this opportunity to say some words as it will allow the Company to continue to strategise and of recognition and thanks. leverage on the momentum of its current retail business and
property management services, amid strong challenges from Firstly, on behalf of the Board, I would like to thank the
competitors and constantly changing consumer behaviours. management and staff for their untiring efforts and hard
While expanding its business and outlets, AEON needs to work put in through the year, which has enabled the
ensure that its existing outlets and core business operations Company to achieve such excellent results.
will continue to provide a wide range of quality merchandise I also want to thank our business partners and associates and, at the same time, maintain a continuous high level of for their continuous support and, finally, I would like to customer service. thank you, our valued shareholder for your support through
AEON also believes that its revenue and earnings will the year.
continue to be better supported by new stores and also
planned expansion in the coming year, in which AEON is
looking at the opening of at least two more stores. It will
lease and manage the shopping centre in Bukit Tinggi, Klang ...... and will be an anchor tenant in the Sunway Pyramid Shopping DATO’ ABDULLAH BIN MOHD YUSOF Centre, Bandar Sunway. Chairman
Regarding its supermarket business, while the contribution
is not significant at the moment, AEON will continue to
steadily develop its chain of supermarkets by sourcing for
the right locations and matching them with the right size to
further establish itself in this area of business. For the coming
year, AEON has identified some potential locations, which
will be announced in due course.
26 AEON ANNUAL REPORT 2006 REVIEWREVIEW OF OPERATIONS OF OPERATIONS
Performance Overview AEON registered a marginal increase in same-stores growth
Malaysia recorded a GDP growth of 5.9% in 2006 which for the ten months ended 31 December 2006. Excluding was slightly better compared to the 5.3% recorded for the renovations in JUSCO Taman Universiti and JUSCO Mid
2005. Overall, inflation remained moderate and economic Valley, the same-stores growth registered a commendable activities were supported by domestic demand from both increase of 2.7%. private and public spending. The services sector continued Most of AEON’s stores registered growth over the same to be the main contributor towards sustaining our economic period except for the two stores mentioned above which momentum and the retail industry growth reflected the underwent renovations, and also JUSCO Permas Jaya whose sustainability of consumer spending in 2006. business was impacted by the opening of AEON Tebrau City
Against such backdrops and amid the challenges that it faces, Shopping Centre. However, for JUSCO Permas Jaya and
AEON CO. (M) BHD. (AEON) continued to enjoy expansion JUSCO Tebrau City, the consolidated retail sales performance and growth in its retailing and property management services of both stores indicated that AEON continued to maintain businesses, registering revenue of RM1.94 billion for the ten its market share in this region. JUSCO Taman Universiti and months ended 31 December 2006, representing a growth of JUSCO Mid Valley did not operate fully during the reporting
22.9% over the previous corresponding period. Its retail sales period due to the renovations and, as such, their businesses recorded RM1.76 billion for the period under review and its dropped by 2.0% to 3.5%. property management services recorded RM178.1 million As for AEON’s other stores, growth ranged from 1.5% to during the same period. 7.1% in the period under review.
For the record, in 2006, AEON changed its accounting year end JUSCO Taman Maluri, JUSCO Melaka and JUSCO Wangsa to December, from February previously. Maju, JUSCO Bandar Baru Klang, JUSCO Bandar Puchong
Retail Sales recorded growth of between 1.5% to 3.7% in the period
Overall, AEON’s retail sales performance of RM1.76 under review, while JUSCO Bandar Utama, JUSCO Ipoh and billion in the ten months ended 31 December 2006 was JUSCO Metro Prima achieved a growth of between 4.3% to commendable. It represented an increase of 21.0% 7.1% for the same period. over the previous corresponding period of March to The performances of new JUSCO stores in the AEON Taman December 2005. Equine Shopping Centre, Queensbay Mall, Penang and AEON
The performance was driven both by organic growth from Cheras Selatan Shopping Centre were encouraging and up existing stores and by contributions from new stores which to expectations. opened for business in previous financial year and operated In the period under review, retail sales growth was also for a full ten months in the period under review, such as JUSCO contributed to by sales from AEON’s J-One supermarket Seremban 2 and JUSCO Tebrau City, as well as contribution business. In January 2007, “J-One Supermarkets” was from new stores at JUSCO Taman Equine, JUSCO Queensbay rebranded as “PASAR RAYA D’HATI”. The new name and JUSCO Cheras Selatan, which opened for business during “D’HATI “, which means “At Heart” in the Malay language, the period under review. 27 AEON ANNUAL REPORT 2006 was chosen by customers, and is in line with AEON’s aims
of projecting a Malaysian identity and to be the best local
store. In July 2006 the second D’HATI Supermarket opened
for business in Pearl Point Shopping Mall, Kuala Lumpur.
AEON’s first D’HATI Supermarket outlet in Damansara
Damai, which opened in October 2005, has also registered
improvement in its sales turnover.
Shopping centre and store openings were carried out at a
faster pace in 2006. AEON Taman Equine Shopping Centre
opened its doors in June 2006. This two-floor shopping
centre with a net lettable area of about 235,000 square feet,
consists of approximately seventy eight shops and restaurants,
together with the JUSCO General Merchandise Store and
Supermarket as anchor tenants. In July 2006, AEON’s
PASAR RAYA D’HATI supermarket, with an approximate
selling area of 25,000 square feet, opened in Pearl Point
Shopping Mall, Kuala Lumpur. In December 2006, two more
JUSCO stores started operations in Queensbay Mall, Penang
and in Cheras Selatan, Selangor. JUSCO Queensbay is the
Company’s first store in Penang and it covers approximately
255,000 square feet of space over four floors. The lower
ground floor has a supermarket as well as a restaurant and
food centre. The AEON Cheras Selatan Shopping Centre
covers approximately 383,000 square feet of net lettable
space. There are the JUSCO General Merchandise Store
and Supermarket, entertainment facilites and “Restaurant
Street” which features a variety of food outlets from snacks
to fine dining.
AEON is able to assort each store’s product offerings to
match customers’ profiles and consumption patterns of
the communities they are located in. AEON positions itself
in the minds of its customers through its JUSCO brand as
well as through in-house brands of merchandise targeted
at different age-groups and with different price points. Its
in-house merchandise brands such as Orange Sorbet, a line
of apparel and accessories for pre-teens, was successfully
28 AEON ANNUAL REPORT 2006 spin out from the General Merchandise Store into specialty Customer service is of paramount importance in the retail tenant shops. JUSCO Selection, a value-for-money line industry and to this end, AEON has continuously placed of groceries and household consumables, and Crème, a emphasis on the customer service in its stores. Through its line of stylish, premium clothing for ladies, are also doing annual cashier contest, in which customers get to nominate well and contribute steadily to revenue. At the same time, and compliment the cashiers for their services, AEON is able
AEON’s Smart Wonder World amusement centre business to inculcate into its staff, especially cashiers, a culture on the also expanded in the period under review, with new centres importance of customer service on their end and ensuring being set up in our new and existing stores. In 2006, customers leave the stores with a good impression of customers in Wangsa Maju, Tebrau City, Melaka, Taman their services.
Equine and Queensbay have been able to enjoy a fun-filled AEON also continued its efforts to make shopping more time at Smart Wonder World. New games were added to convenient and to build customer loyalty. The J CARD is provide more choices for customers’ enjoyment. one of the key items in its programme to achieve this.
AEON continues to value feedback and ideas from AEON organised successful J CARD shopping days at all its customers and staff and through its organised AEON 21 stores during which members enjoyed special discounts and campaign which is already in its sixth year and in which promotional gifts. many innovative ideas from customers and staff are AEON registered growth in the number of J CARD principal implemented to benefit shoppers, fulfiling AEON’s objective members with the total now standing at more than 600,000 in enhancing the retailer-customer relationship and providing principal members at the end of the reporting period. These better customer service. AEON 21’s 2006 campaign theme members contributed about 60 per cent of AEON’s monthly “Let’s Make Our Customer’s Smile Bloom” attracted retail sales. The JUSCO Credit Card, which was launched overwhelming response from staffs and customers and the last year in collaboration with its related company AEON winners were rewarded with their prizes in a prize giving Credit Service (M) Berhad, allows J CARD members who use ceremony on 23 November 2006. the co-branded JUSCO Credit Card to enjoy more incentives
through extra J CARD bonus points from purchases at all
JUSCO stores.
29 AEON ANNUAL REPORT 2006 Property Management Services
AEON’s property management services business achieved
revenues of RM178.1 million for the ten months ended 31
December 2006, representing an increase of 46.0% over
the same period last year.
The main factors that boosted our revenue in this core
business for this reporting period were the contributions
from the operations of the new JUSCO Seremban 2
Shopping Centre and AEON Tebrau City Shopping Centre
which opened in September 2005 and January 2006
respectively, as well as new income from additional lettable
space of further new shopping centres which opened in
2006, such as AEON Taman Equine Shopping Centre and
AEON Cheras Selatan Shopping Centre. On a same shopping
centres basis, there was also a growth in revenue of 6.7%
in the period under review.
Revenues and earnings from AEON’s property management
services operations are expected to be steady and
consistent. AEON’s well designed and managed shopping
centres as well as its continued emphasis on ensuring that
its shopping centres are always well maintained has proven
to be a successful formula in attracting shoppers and
tenants alike. For these reasons, the occupancy rate at its
shopping centres is at 98%, much higher than the national
average.
Given the demand for space at AEON-managed shopping
centres, AEON is able to create an optimal tenant mix to
give each shopping centre a “character” that will suit the
community in which it is located. Such a complementary
mix of tenants is in the end beneficial to all – to the tenants,
as well as to the customers who regularly patronise these
shopping centres.
30 AEON ANNUAL REPORT 2006 Prospects and Challenges
AEON remains positive in its outlook towards the economy In the coming year, AEON will also enjoy full-year revenue and the retail industry. The economy is expected to be contributions from its stores and shopping centres that favourable, with resilience against external pressures, and opened in the 10 months to December 2006 – Taman Equine, increased investment activities especially from those under Queensbay, Cheras Selatan and Pearl Point. the Ninth Malaysian Plan.
AEON maintains its commitments in ensuring all its shopping
AEON also expects the competitive conditions experienced centres are always well maintained for their customers. in 2006 to continue throughout the coming year. AEON To this end, the Company has set up a department to remains committed to its objective of being a top retailer in specifically focus on managing the maintenance facilities the country. To this end, in the coming year, focus will be of the Company. on creating a brilliant selling floor that offers merchandise assortment and customer service of the highest quality. With regards to its expansion plans, AEON will be opening
Merchandising plans include creating more private brands at least two new stores in 2007 where by it will be an and identifying core categories which will be developed to anchor tenant in the Sunway Pyramid Shopping Centre, match customers’ lifestyles. Bandar Sunway and it will manage and operate the AEON
Bukit Tinggi Shopping Centre, currently under construction.
31 AEON ANNUAL REPORT 2006 In Bandar Sunway, the Company will undertake a lease as
an anchor tenant in the new wing of the Sunway Pyramid
Shopping Centre, occupying approximately 255,000 square
feet of net lettable area, with the expected opening in the
third quarter of 2007.
The AEON Bukit Tinggi Shopping Centre in Klang will be
the biggest shopping centre that AEON will manage. The
shopping centre will have a built up area of approximately
2.1 million square feet, with approximately 750,000 square
feet of net lettable space. AEON will manage the whole
shopping centre, which will comprise of four levels with
an estimated three hundred tenants, and is expected to
open for business by the fourth quarter of 2007.
Other major expansions are currently being planned to
further establish the Company’s dominance in the retail and
property management services businesses.
With regards to its supermarket business, AEON has plans
to expand this area of business and, in the coming year,
the Company will be opening new PASAR RAYA D’HATI
supermarkets in identified locations in the Klang Valley and
Selangor.
AEON will also continue to develop and promote its own
in-house brands and will be looking to continue to open
new tenant shops for its Jeans Studio, ti:zed and Orange
Sorbet brands of apparel, as well as Smart Wonder World
amusement centres in new shopping centres that AEON will
operate in the coming year.
32 AEON ANNUAL REPORT 2006 Information Technology
AEON’s Business Systems and Solutions department, which is b. Automatic Ordering System: This system automatically responsible for implementing the Information Technology tracks the stock level of items, especially those in the
(IT) framework for the Company, continued to provide “fast moving consumer goods” category. It automatically information technology for operational needs in the period starts a reordering process when stock levels fall below under review. a pre-set point. Through the IT-triggered automatic
reordering process, the stores can hold lower inventories Among the IT related initiatives implemented during the of items which allows cost and space efficiency. period were:
c. Price Alteration System: This Price Change Suggestion/ a. Itemised Stock & Logistics Management System: Price Alteration System allows AEON to capture price Implemented within AEON’s Itemised Control System, change data and helps reduce human errors when which is designed to manage purchasing, goods transfers, making price change decisions. This allows AEON to returns, price alterations and related documentation at respond quickly to market changes, competitive activity store operation levels. and changing demand factors without losing customers.
The enhanced Itemised Control System allows better IT will increasingly be a tool to drive AEON’s productivity inventory and trade payable management by AEON. and profitability in the future. It also allows AEON to improve the efficiency of its
stores and merchandising operations with better price
management and faster goods transfer processing.
33 AEON ANNUAL REPORT 2006 STATEMENT ON CORPORATE STATEMENTGOVERNANCE ON CORPORATE GOVERNANCE Board Responsibilities A) Directors Board Meetings The Board of Directors, in recognising Board Balance The Board met four (4) times at regular the importance of corporate governance, The Board of Directors consists of intervals during the financial period is committed to ensuring that the nine (9) members; comprising one ended 31 December 2006. The details of Company’s business and operations (1) Non-Executive Chairman, one (1) attendance of each Director at the Board are in line with the principles and best Non-Executive Vice Chairman, two (2) meetings held during the financial period practices advocated in the Malaysian Executive Directors and five (5) Non- are as the table below. Code of Corporate Governance. Executive Directors. Of the five (5) Non-Executive Directors, three (3) are Supply of Information The Board of Directors assumes Independent Directors. The Company Secretary ensures that responsibilities in corporate governance all Board meetings are furnished with and has established various processes Dato’ Chew Kong Seng is the Senior proper agendas. Board papers and and committees to assist the Board in Independent Non-Executive Director to reports providing updates on financial, discharging of these responsibilities. whom concerns on matters relating to operational and corporate developments Among others, the Company’s strategies corporate governance of the Company including matters such as the Company’s and directions, shareholders and could be conveyed to. corporate social responsibilities program investors’ relationship, annual budget, The Directors bring a wide range of and staff welfare matters are circulated major capital expenditure, significant expertise and experience in various prior to the meetings to all Directors for financial matters, and the adequacy and fields such as economics, public services, them to discharge their duties effectively. integrity of internal controls including risk accounting and finance, legal, human The Directors have full access to the advice assessment are within the responsibilities resource, banking, marketing, taxation, and services of the Company Secretary. of the Board of Directors. general management, retail management In addition, the Directors, if necessary, The following paragraphs set out the and property management services. may also seek professional advice, at the Company’s application of the principles All Board members participated and Company’s expense. The Directors may and best practices of the Malaysian Code deliberated on the issues and matters also consult the Chairman and other on Corporate Governance. affecting the Company. Board members prior to seeking any independent professional advice. The profile of each Director is presented on page 20 to page 22 of the Annual Report.
Number of meetings attended/held during the No Name of Directors Director’s term in office 1 Dato’ Abdullah bin Mohd Yusof 4/4 2 Mr. Toshiji Tokiwa 4/4 3 Mr. Tatsuichi Yamaguchi 4/4 4 Mr. Nagahisa Oyama 4/4 5 Mr. Masato Yokoyama 4/4 6 Datuk Ramli bin Ibrahim 4/4 7 Brig. Jen. (B) Dato’ Mohd Idris bin Saman 4/4 8 Datuk Zawawi bin Mahmuddin 4/4 9 Dato’ Chew Kong Seng 4/4
34 AEON ANNUAL REPORT 2006 Directors’ Training The duties and responsibilities of the In the financial period under review All the Directors have attended the Committee, among others, are to the committee met to determine the Directors’ Mandatory Accreditation recommend to the Board, candidates remuneration packages of all Directors, Programme and the continuing for directorship, directors to fill seats including the Non-Executive Chairman Education Programme organised by the on Board Committees and to review and Non-Executive Vice Chairman and Bursa Malaysia Securities Berhad and annually the required mix of skills and the determination of the remuneration are also provided with updates from experience of the Board including the packages is a matter for the Board as a time to time on relevant new laws and effectiveness of the Board as a whole whole to approve. Individual Directors regulations affecting their directorship. and the contribution from each Director. concerned do not participate in the discussion on their own remuneration. Directors also from time to time visited The Board, through the Nomination existing stores and/or new sites to Committee, conducted the annual The Audit Committee have a thorough understanding of the assessment of the Directors’ performance The Board is also assisted by the Audit Company’s operational matters. and contribution, and reviewed the Committee whose members, terms of required mix of skills and experience of reference and activities for the financial Board Committees the Board to function competently and period under review are stated on page The Board of Directors is assisted by its efficiently as a whole. 38 to 40 of the Annual Report. Committees, which have been established under defined terms of reference. The Remuneration Committee Re-election The Committees are the Nomination The Remuneration Committee is made In accordance with the Company’s Committee, the Remuneration Committee up of Non-Executive Directors whose Articles of Association, all Directors retire and the Audit Committee members are Mr. Tatsuichi Yamaguchi every year. (Chairman), Dato’ Abdullah bin Mohd The Nomination Committee Yusof and Datuk Ramli bin Ibrahim. The Nomination Committee members The duties of the committee shall are Mr. Tatsuichi Yamaguchi (Chairman), be to recommend to the Board the Dato’ Abdullah bin Mohd Yusof, Dato’ remuneration of all Directors in all its Chew Kong Seng, Brig. Jen. (B) Dato’ forms. Executive Directors play no part Mohd Idris bin Saman and Datuk Zawawi in decision-making or determining their bin Mahmuddin. own remuneration.
Shareholders vote on a resolution after a lively discussion.
The AEON Board of Directors convene the 21st AGM.
35 AEON ANNUAL REPORT 2006 B) Directors Remuneration The breakdown of the remuneration of the Directors during the financial period under review is as follows: -
1) Aggregate remuneration of the Directors categorised into appropriate components:
Executive Directors Non Executive Directors Total RM RM RM
Fees 238,000 721,000 959,000 Salaries 570,456 - 570,456 Benefits-in-kind 39,500 17,550 57,050 Other emoluments 176,088 - 176,088 1,024,044 738,550 1,762,594
2) The number of Directors whose total remuneration fall within the following bands:
Number of Directors Range of Remuneration Executive Non-Executive Total RM50,001 to RM100,000 - 5 5 RM100,001 to RM150,000 - - - RM150,001 to RM200,000 - 2 2 RM200,001 to RM250,000 - - - RM250,001 to RM300,000 - - - RM300,001 to RM350,000 - - - RM350,001 to RM400,000 - - - RM400,001 to RM450,000 - - - RM450,001 to RM500,000 - - - RM500,001 to RM550,000 2 - 2 RM550,001 to RM600,000 - - - RM600,001 to RM650,000 - - - 279
C) Shareholders disseminated to shareholders and Securities Berhad as well as other Investors and Shareholders investors via announcements of its corporate information to the public. Communication quarterly performance, annual report, During the Annual General Meeting, It has always been the Company’s corporate announcements to Bursa shareholders are usually given a practice to maintain good relationship Malaysia Securities Berhad and press presentation on the Company’s with its shareholders. Major corporate conferences. Further update of the performance and major activities that developments and happenings in the Company’s activities and operations were carried out by the Company for the Company have always been duly and are also disseminated to shareholders period under review. During the meeting, promptly announced to all shareholders, and investors through dialogue with shareholders have the opportunities to in line with Bursa Malaysia Securities analysts, fund managers, investors and enquire and comment on the Company’s Berhad’s objectives of ensuring the media. performance and operations. transparency and good corporate Besides highlighting retail business governance practices. promotional activities, the Company’s The Company’s financial performance, website (www.jusco.com.my) provides major corporate developments and an update of the Company’s latest other relevant information are promptly performance released to Bursa Malaysia
36 AEON ANNUAL REPORT 2006 D) Accountability And Audit bodies. In preparing the financial Relationship With The External Financial Reporting statements, the Board of Directors has Auditors In its financial reporting via quarterly ascertained that accounting policies The Board of Directors with the assistance announcements of results, annual and reasonable prudent judgement of the Audit Committee maintains a financial statements and annual report and estimates have been consistently formal and transparent relationship with presentation including the Chairman’s applied. the Company’s External Auditors through Statement and Review of Operations, the Audit Committee, Board and formal The Directors are responsible for keeping the Board of Directors always provides meetings whereby issues are discussed. proper accounting records, which disclose a comprehensive assessment of the with reasonable accuracy at any time the The relationship between the Board and Company’s performance and prospects financial position of the Company and to the External Auditors is also formalised for the benefits of shareholders, enable them to ensure that the financial through the Audit Committee’s terms of investors and interested parties. The statements comply with the Companies reference. Audit Committee also assists the Board Act, 1965. The Directors have a general in overseeing the Company’s financial Compliance With Malaysian Code responsibility for taking such steps as is reporting processes. On Corporate Governance reasonably open to them to safeguard The Board of Directors is pleased to state the assets of the Company, to prevent Directors’ Responsibility Statement In that the Company was in compliance and detect fraud and other irregularities. Respect Of The Preparation Of The with all the principles and best practices Audited Financial Statements Going Concern as advocated in the Malaysian Code The Board of Directors is responsible The Board of Directors confirmed that on Corporate Governance during the for the preparation of the financial the Company has adequate resources to financial period under review, except for statements for each financial year of continue its business in the foreseeable disclosure of each individual Director’s the Company, which gives a true and future. For this reason, they continue remuneration. fair view of the state of affairs of the to adopt the going concern basis for Company and its results and cash flow preparing the financial statements. for the financial period ended.
Statement Of Internal Control The Board of Directors has ensured that The Statement on Internal Control set the financial statements have been out on page 41 of the Annual Report prepared in accordance with applicable provides an overview of the state of approved accounting standards in internal controls within the Company. Malaysia, the requirements of the Companies Act, 1965, Bursa Malaysia Securities Berhad and other regulatory
Mr. Oyama answering a pertinent question from the floor. The Board of Directors always provides a comprehensive assessment of the Company’s performance and prospects during the AGM.
37 AEON ANNUAL REPORT 2006 TERMS OF REFERENCE OF TERMSTHE OF AUDIT REFERENCE COMMITTEE OF THE AUDIT COMMITTEE
No Audit Committee Designation 1 Dato’ Chew Kong Seng Chairman (Independent Non-Executive Director) 2 Datuk Ramli bin Ibrahim Member (Non-Independent Non-Executive Director) 3 Brig. Jen. (B) Dato’ Mohd Idris bin Saman Member (Independent Non-Executive Director)
Constitution members as may be required to make up be circulated to the committee members The Board hereby resolves to establish a the minimum number of three members. prior to each meeting. Committee of the Board to be known as The Board shall review the terms of office The secretary shall be responsible for the Audit Committee with the following of Committee members no less than recording attendance of all members terms of reference. every three years. and invitees, keeping the minutes of the Composition Of Audit Committee meeting of the Committee, circulating Meetings The Committee shall be appointed by them to committee members and to The Committee shall meet at least four the Board from among its members and the other members of the Board of times a year. In addition, the chairperson shall consist of not less than 3 members Directors and for ensuring compliance shall convene a meeting of the Committee of whom a majority shall be Independent with Bursa Malaysia Securities Berhad’s if requested to do so by any member, the Directors. requirements. management or the internal or external The Committee shall include at least auditors to consider any matter within Reporting Procedures one person who is a member of the the scope and responsibilities of the The Committee shall prepare an annual Malaysian Institute of Accountants (MIA) Committee. report to the Board that provides or alternatively a person who must have a summary of the activities of the Attendance At Meetings at least 3 years’ working experience and Committee for inclusion in the Company’s The General Manager of Finance, the have passed the examinations specified annual report. Head of Internal Audit, the Company in Part I of the 1st. Schedule of the Secretary, the Senior Finance Manager, The Committee shall assist the Board in Accountants Act 1967 or is a member of the Compliance Officer and a preparing the following for publication in one of the associations specified in Part II representative of the External Auditors the Company’s annual report: of the said Schedule or fulfils such other shall normally attend meetings. However, requirements as prescribed by Bursa - Statement of the Company’s application the Committee may invite any person Malaysia Securities Berhad. No alternate of the principles set out in Part I of to be in attendance to assist it in its director shall be appointed as a member the Malaysian Code on Corporate deliberations. of the Committee. Governance. Non-member directors shall not attend The Committee shall elect a chairperson - Statement on the extent of compliance unless specifically invited to by the from amongst its members who is not with the Best Practices in Corporate Committee. an Executive Director or employee of Governance set out in Part II of the company or any related corporation. Secretary To Audit Committee the Malaysian Code on Corporate In the event that a member of the audit The Company Secretary shall be the Governance, specifying reasons for any committee resigns, dies or for any other secretary of the committee and shall be areas of non-compliance (if any) and reason ceases to be a member, with responsible for drawing up the agenda the alternatives adopted in such areas. the result that the number of members in consultation with the chairperson. is reduced to below three, the Board of - Statement on the Board’s responsibilities The agenda together with the relevant Directors shall, within three months of for preparing the annual audited explanatory papers and documents shall that event, appoint such number of new financial statements, and
38 AEON ANNUAL REPORT 2006 - Statement on the state of Internal Duties And Responsibilities Control of the Company. The duties and responsibilities of the - To review the internal audit plan, Committee shall be: Where the Committee is of the view consider the major findings of Internal that a matter reported by it to the Board - To review the Terms of Reference at Audit, fraud investigations and actions of Directors has not been satisfactorily least annually or as conditions dictate. and steps taken by management in resolved resulting in a breach of the response to audit findings. Listing Requirements of Bursa Malaysia - To review any financial information for - To review the adequacy and relevance Securities Berhad, the Committee shall publication, including quarterly and of the scope, functions and resources promptly report such matter to Bursa annual financial statements before of Internal Audit and the necessary Malaysia Securities Berhad. submission to the Board. authority to carry out its work. Quorum The review shall focus on: - To review any related party transactions A quorum shall consist of a majority • Any changes in accounting policies and conflict of interest situations that of committee members present at the and practices. Major judgmental may arise within the Company. meeting who are independent directors. areas. Significant audit adjustments
Authority from the External Auditors. - To consider the appointment of the External Auditors, the terms of The Committee is authorised by the • The going concern assumption. reference of its appointment and any Board to: question of resignation and dismissal • Compliance with accounting - Investigate any activity within its terms before making a recommendation to standards. of reference. the Board.
• Compliance with stock exchange - Have resources, which are reasonably - To undertake such other responsibilities and legal requirements. required to enable it to perform its as may be agreed to by the Committee
duties. - To review with the External Auditors and the Board. their audit plan, scope and nature of - Have free access to all information and - To report to the Board its activities, audit for the Company. documents it requires for the purpose significant results and findings.
of discharging its functions and - To review and discuss the External Overseeing The Internal Audit responsibilities. Auditors’ audit report, areas of concern Function arising from the audit and any other - Have direct communication channels The Committee shall oversee all Internal matters the external auditors may with the external auditors and person(s) Audit functions and is authorised wish to discuss (in the absence of carrying out the internal audit function to commission investigations to be management if necessary). or activity. conducted by Internal Audit as it deems
- To assess the adequacy and fit. The Internal Auditor shall report - Obtain outside legal or other effectiveness of the system of internal directly to the Committee and shall have independent professional advice and controls and accounting control direct access to the Chairman of the secure the attendance of outsiders with procedures of the Company by Committee. relevant experience and expertise if it reviewing the External and/or Internal considers this necessary. All proposals by management regarding Auditors’ management letters and the appointment, transfer or dismissal of - Convene meetings with the External management responses. the Internal Auditor shall require the prior Auditors, excluding the attendance - To discuss problems and reservations approval of the Committee. of the executive members of the arising from the audits and any matters committee, whenever deemed the auditors may wish to discuss. necessary.
39 AEON ANNUAL REPORT 2006 Audit Committee
Brig. Jen. (B) Dato’ Mohd. Idris bin Saman Dato’ Chew Kong Seng Datuk Ramli bin Ibrahim Member (Independent Non-Executive Director) Chairman (Independent Non-Executive Director) Member (Non-Independent Non-Executive Director)
THETHE AUDIT AUDIT COMMITTEE COMMITTEE
Terms Of Reference Of The Audit Committee During the financial period under review, there were no changes to the terms of reference of the Audit Committee. Meetings During the financial period under review, the Audit Committee convened three (3) meetings, which was one (1) meeting less than the minimum requirement stipulated in the Terms of Reference of the Audit Committee. This was due to the change in financial year end and have resulted in only 10 months in the financial period under review. The attendance records of the member of the Audit Committee are as follows:
Number of meetings attended/held during the No Name of Directors Director’s term in office 1 Dato’ Chew Kong Seng 3/3 2 Datuk Ramli bin Ibrahim 3/3 3 Brig. Jen. (B) Dato’ Mohd Idris bin Saman 3/3
The meetings were structured through the use of agendas, which were distributed to members with sufficient notification. The Company Secretary was present in all the meetings. A representative of the External Auditors, Messrs KPMG Desa Megat & Co., the General Manager of Finance, the Head of Internal Audit, the Senior Finance Manager, the Compliance Officer, attended the meetings and related management personnel attended the meetings upon invitation.
Summary of the Audit Committee’s by reviewing the External and Internal b. Reviewed and analysed certain key Activities during the Period Under Auditors’ management letters and business processes identified in the Review management responses. annual audit plan, reported ineffective During the period under review, the and inadequate controls, and made g. Reviewed the adequacy and relevance Audit Committee carried out its duties in recommendations to improve their of scope, functions and resources accordance with its terms of reference as effectiveness. of Internal Audit and that it has the follows: necessary authority to carry out its c. Monitored and ensured management a. Reviewed the quarterly unaudited work. implemented corrective action plans. financial results and annual audited h. Reviewed related party transactions. d. Monitored compliance with policies financial statements before submission and procedures. to the Board for consideration and i. Reported to the Board on its activities approval. and significant findings and results of e. Reviewed the adequacy and the External and Internal Audits. effectiveness of the internal control b. Reviewed the External Auditors’ scope structures of the Company. of work and audit plan for the period. The Audit Committee held one meeting with the External Auditor without the f. Assisted the Board of Directors and c. Reviewed and discussed the External presence of the management, to allow Management on compliance matters Auditors’ audit report and areas of the auditor to discuss any issues arising required by the Malaysian Code on concern. from the audit exercise or any other Corporate Governance. d. Considered the appointment of the matters, which the External Auditor g. Assisted the Board of Directors and External Auditors and the terms of wished to raise. Management by reviewing the risk reference of their appointment. During the period under review, the policy and control strategies in the e. Reviewed the internal audit plan, Internal Audit Department carried out organisation. considered the major findings of the following activities: h. Carried out investigative assignments. Internal Audit, fraud investigations a. Presented and obtained approval and actions taken by management in i. Continued inculcating good risk from Audit Committee, the response to the audit findings. management practices throughout annual internal audit plan, which the Company. f. Assessed the adequacy and supplemented the approved 3-year effectiveness of the system of internal audit plan, its audit strategy internal controls and accounting and audit scope of work. control procedures of the Company 40 AEON ANNUAL REPORT 2006 STATEMENT ON INTERNAL STATEMENTCONTROL ON INTERNAL CONTROL Board’s Responsibilities on the basis of a three-year internal - The Audit Committee is responsible The Board of Directors recognises its audit plan that was presented and for reviewing the statutory annual responsibilities over the Company’s approved by the Audit Committee. The financial statements and the quarterly system of internal controls, covering all internal audit function adopts a risk- announcements to Bursa Malaysia its financial and operating activities to based approach and prepares its audit Securities Berhad and recommends safeguard shareholders’ investment and strategy and plan based on the risk to the Board for approval prior to the Company’s assets. profiles of the major business units of submission to Bursa Malaysia Securities the Company. Berhad; The Board has an established on-going process for identifying, evaluating System Of Internal Controls - The Internal Audit Department and managing the significant risks The Board of Directors is responsible for periodically monitors the effectiveness encountered by the Company. The Board managing the key business risks of the and evaluates the proper functioning through its Audit Committee regularly Company and implementing appropriate of the internal control system on an reviews this process. internal control system to manage those ongoing basis to ascertain compliance risks. The Board reviewed the adequacy with the control procedures and policies In view of the limitations inherent in any and integrity of the system of internal of the Company. The Head of Internal system of internal controls, the system controls as it operated during the period. Audit reports to Audit Committee on is designed to manage, rather than to The following are the key elements of the the status of internal control system on eliminate the risk of failure to achieve the Company’s system of internal controls: a quarterly basis; Company’s corporate objectives. - The management structure of the - Project teams are set up from time The Audit Committee assists the Board Company formally defines lines to time to address business and to review the adequacy and integrity of responsibility and delegation operational issues to meet the of the system of internal controls in of authority for all aspect of the business objectives and operational the Company and to ensure that an Company’s affairs. Senior management requirements of the Company. appropriate mix of techniques is used to and business unit’s managers submit obtain the level of assurance required by All the above-mentioned processes have and present their operational the Board. The Audit Committee presents been in place and provide reasonable performance reviews as well as its findings to the Board. assurance on the effectiveness of the business plans and strategic measures internal control system. Internal Audit Function in regularly held Executive Committee The Audit Committee, assisted by the and Management Meetings; Conclusion Internal Audit Department, provides the The Board of Directors reviewed the - The Board approves the annual budget Board with the assurance it requires on adequacy and integrity of the system and reviews key business variables the adequacy and integrity of the system of internal controls that provides and monitors the achievements of the of internal controls. The Internal Audit reasonable assurance to the Company in Company’s performance on a quarterly Department independently reviews achieving its business objectives. As the basis ; the risk identification procedures and development of sound system of internal control processes implemented by the - The authorisation limits and approvals controls is an on-going process, the management, conducts audits that authority threshold of the Company Board and the management maintain encompasses reviewing critical areas that encompasses internal control an on-going commitment and continue the Company faces, and reports to the procedures. These procedures are to take appropriate measures to Audit Committee on a quarterly basis. subject to review by the management strengthen the internal control to incorporate changing business risks environment of the Company. The Internal Audit Department also and operational efficiency; carried out internal control reviews on key activities of the Company’s business
41 AEON ANNUAL REPORT 2006 OTHER OTHER INFORMATION INFORMATION
Material Contracts involving Directors Masato Yokoyama, a Director of AEON The purchase of the transaction and Substantial Shareholders. CO. (M) BHD. is also a shareholder receipts will be net of the credit Material contracts entered into by the of AEON Credit Service (M) Berhad card commission payable and upon Company which involve Directors’ and ÆON Co., Ltd. has an indirect interest terms and conditions as stated in the major Shareholders’ interests and still in AEON Credit Service (M) Berhad merchant agreement. The total value subsisting at the end of the financial through AEON Credit Service Co. Ltd. of the transaction receipts purchased period ended 31 December 2006, or c) On 23 June 2005, the Company by AEON Credit Service (M) Berhad in entered into since the end of the previous entered into a JUSCO Credit Card the period under review was RM35.47 financial year, comprise the following: Agreement with AEON Credit Service million and the total commission a) On 12 October 2000 and through (M) Berhad to set out the terms and payable is RM515 thousand. Dato’ a supplementary agreement on 1 conditions for the issuance of a credit Abdullah bin Mohd Yusof and Datuk January 2006, the Company entered card called JUSCO Credit Card by AEON Ramli bin Ibrahim, both Directors into a Technical Service Agreement Credit Service (M) Berhad, in affiliation of AEON CO. (M) BHD. are also with ÆON Co., Ltd. whereby the or association with the Company, to Directors and shareholders in AEON Company is granted the exclusive further promote and enhance AEON Credit Service (M) Berhad Mr. Masato right by ÆON Co., Ltd. to use their Credit Service (M) Berhad credit card Yokoyama, a Director of AEON CO. trademark in relation to goods and business and the Company’s retailing (M) BHD. is also a shareholder of AEON services. The Company is also granted business. The Company permits Credit Service (M) Berhad ÆON Co., the non-exclusive right to use the AEON Credit Service (M) Berhad Ltd. has an indirect interest in AEON information and know-how, employed to promote JUSCO Credit Card to Credit Service (M) Berhad through or developed by ÆON Co., Ltd. for the consumers in return for allowing the AEON Credit Service Co. Ltd. management and operation of retail consumers to use JUSCO Credit Card stores, wholesale business and related for the purchase of goods and services Non Audit Fees supporting activities. The total cash offered by the Company. JUSCO The amount of non-statutory audit fees consideration payable by the Company Credit Card holders who are also paid to External Auditor and its affiliates to ÆON Co., Ltd. for the period under J CARD members will enjoy additional during the period under review is RM review amounted to RM11.18 million. J CARD loyalty points provided by 90,350 comprising of mainly advisory, ÆON Co., Ltd. is the holding company AEON Credit Service (M) Berhad review and tax services. of AEON CO. (M) BHD. through purchase of the additional Revaluation policy on landed b) On 1 July 1997, the Company entered J CARD points from the Company. properties into a Factoring Agreement with a During the period under review, There is no revaluation policy on related company, AEON Credit Service the total additional J CARD points the Company’s landed properties. The (M) Berhad whereby the Company’s purchased by AEON Credit Service (M) Company adopted the transitional goods sold on credit under its easy Berhad was RM378 thousand. The provisions issued by Malaysian payment scheme are factored to Company further agreed to appoint Accounting Standards Board (MASB) to AEON Credit Service (M) Berhad. The AEON Credit Service (M) Berhad as the retain the carrying amount on the basis debts sold to AEON Credit Service (M) sole acquirer of the card transaction of their previous revaluation as stated in Berhad are at full value of the goods transacted using AEON Credit Service page 58 of this Annual Report. and upon the terms and conditions as (M) Berhad issued cards. stated in the factoring agreement. The d) On 29 December 2005, the Company total value of the debts sold to AEON entered into a credit card merchant Credit Service (M) Berhad in the period agreement with AEON Credit Service under review amounted to RM4.21 (M) Berhad whereby the Company’s million. Dato’ Abdullah bin Mohd goods sold on credit through credit Yusof and Datuk Ramli bin Ibrahim, cards issued by AEON Credit Service both Directors of AEON CO. (M) BHD. (M) Berhad, AEON Credit Service are also Directors and shareholders in (M) Berhad will purchase from the AEON Credit Service (M) Berhad Mr. Company all such transaction receipts. 42 AEON ANNUAL REPORT 2006
DIRECTORS’ REPORT for the period ended 31 December 2006
The Directors have pleasure in submitting their report and the audited financial statements of the Company for the period ended 31 December 2006.
Principal activities The Company is principally engaged in the operations of a chain of superstores selling a broad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation. There has been no significant change in the nature of these activities during the financial period.
Change of financial year end The Company changed its financial year end from 28 February to 31 December to be in line with AEON Group’s reporting. The comparatives for the Income Statement, Statement of Changes in Equity and Cash Flow Statement as well as the comparatives in the notes to the financial statements relating to the Income Statement are for the previous twelve months ended 28 February 2006 and hence, are not comparable to that for the current ten months ended 31 December 2006.
Results RM’000
Profit for the period 103,246
Reserves and provisions There were no material transfers to or from reserves and provisions during the period under review except as disclosed in the financial statements.
Dividend Since the end of the previous financial year, the Company paid a first and final dividend of 15% less tax of 28%, totalling RM18,954,000 in respect of the year ended 28 February 2006 on 20 July 2006.
The first and final dividend recommended by the Directors in respect of the period ended 31 December 2006 is 16% less tax of 27%, amounting to RM20,498,400 which is subject to the approval of members at the forthcoming Annual General Meeting of the Company.
Directors of the Company Directors who served since the date of the last report are:
Dato’ Abdullah bin Mohd Yusof Toshiji Tokiwa Nagahisa Oyama Masato Yokoyama Tatsuichi Yamaguchi Datuk Ramli bin Ibrahim Brig. Jen. (B) Dato’ Mohd Idris bin Saman Datuk Zawawi bin Mahmuddin Dato’ Chew Kong Seng @ Chew Kong Huat
44 AEON ANNUAL REPORT 2006 Directors’ interests The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations of those who were Directors at period end as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares At At 1.3.2006 Acquired Sold 31.12.2006
Shareholdings in which Directors have direct interests
Interest of Dato’ Abdullah bin Mohd Yusof in: AEON CO. (M) BHD. 308,000 - (40,000) 268,000
Interest of Toshiji Tokiwa in: AEON Co., Ltd. 17,700 - - 17,700 AEON Credit Management Co., Ltd. 10 - - 10 AEON Credit Service (M) Berhad 20,000 - - 20,000 AEON Thana Sinsap (Thailand) Plc. 500,000 - - 500,000 Maxvalu Tokiu Co., Ltd. 7,500 - - 7,500 Zwei Co., Ltd. 1,000 - - 1,000
Interest of Masato Yokoyama in: AEON CO. (M) BHD. 30,000 - - 30,000
Interest of Tatsuichi Yamaguchi in: AEON Co., Ltd. 24,000 - - 24,000 AEON Stores (Hong Kong) Co., Ltd. 22,000 - - 22,000
Shareholdings in which Directors have deemed interests
Interest of Dato’ Abdullah bin Mohd Yusof in: AEON CO. (M) BHD. 4,030,000 - (2,529,000) 1,501,000
Interest of Datuk Ramli bin Ibrahim in: AEON CO. (M) BHD. 280,000 - - 280,000
None of the other Directors holding office at 31 December 2006 had any interest in the ordinary shares of the Company or of its related corporations during the financial period.
45 AEON ANNUAL REPORT 2006 Directors’ benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, except for certain Directors who may be deemed to derive a benefit by virtue of those transactions, advisory services and tenancy between the Company and corporations in which the Directors are deemed to have interest.
There were no arrangements during and at the end of the financial period which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Issue of shares and debentures There were no changes in the authorised, issued and paid-up capital of the Company during the financial period.
Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the financial period.
Other statutory information Before the financial statements of the Company were made out, the Directors took reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) all current assets have been stated at the lower of cost and net realisable value.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the financial statements of the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Company misleading.
At the date of this report, there does not exist:
i) any charge on the assets of the Company that has arisen since the end of the financial period and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Company that has arisen since the end of the financial period.
No contingent liability or other liability of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial period which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due.
In the opinion of the Directors, except as disclosed below, the results of the operations of the Company for the financial period ended 31 December 2006 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial period and the date of this report.
46 AEON ANNUAL REPORT 2006 Significant event during the financial period On 29 September 2006, the transaction for the conditional Sale and Leaseback Agreement entered into by the Company with Equity Nirvana Sdn. Bhd. in the previous financial year has been completed. This transaction was in respect of the sale of a property known as Kinta City Shopping Centre, comprising a freehold land located in the Mukim of Hulu Kinta, District of Kinta, Perak and a three (3) storey shopping mall constructed thereon together with specified plant and machinery. The Company derived a gain of RM33.9 million from the disposal for a total cash consideration of RM121.0 million.
The leaseback of the same property from Equity Nirvana Sdn. Bhd. commenced on 29 September 2006 for an initial period of nine (9) years with options for renewals upon completion of the initial lease.
Auditors The auditors, Messrs KPMG Desa Megat & Co., have indicated their willingness to accept re-appointment.
Signed in accordance with a resolution of the Directors:
...... Nagahisa Oyama
...... Dato’ Abdullah bin Mohd Yusof
Kuala Lumpur, Date: 15 February 2007
47 AEON ANNUAL REPORT 2006 BALANCE SHEET at 31 December 2006
Note 31.12.2006 28.2.2006 RM’000 RM’000 restated Assets Property, plant and equipment 3 942,252 845,248 Prepaid lease payments 4 125,808 124,573 Investments 5 1,075 1,075 Total non-current assets 1,069,135 970,896
Inventories 6 214,183 159,061 Prepaid lease payments 4 1,461 1,435 Receivables, deposits and prepayments 7 45,669 26,695 Cash and cash equivalents 8 107,925 53,405 Total current assets 369,238 240,596 Total assets 1,438,373 1,211,492
Equity Share capital 175,500 175,500 Reserves 53,826 54,257 Retained earnings 476,817 392,094 Total equity attributable to shareholders of the Company 9 706,143 621,851
Liabilities Deferred tax liabilities 10 29,113 29,281
Total non-current liabilities 29,113 29,281
Payables and accruals 11 677,930 547,152 Borrowings (unsecured) 12 - 625 Taxation 25,187 12,583 Total current liabilities 703,117 560,360 Total liabilities 732,230 589,641 Total equity and liabilities 1,438,373 1,211,492
The notes on pages 52 to 67 are an integral part of these financial statements.
48 AEON ANNUAL REPORT 2006 INCOME STATEMENT for the period ended 31 December 2006
Note 1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
restated Continuing operations Revenue 1,941,431 1,962,445 Other operating income 35,594 1,067 Changes in inventories 55,122 19,765 Net purchases (1,425,525) (1,433,814) Staff costs (108,808) (111,708) Depreciation 3 (69,086) (57,850) Operating expenses (286,567) (267,457)
Operating profit 13 142,161 112,448 Interest expense 15 (1,962) (595) Interest income 542 345
Profit before tax 140,741 112,198 Tax expense 16 (37,495) (38,994)
Profit for the period/year attributable 103,246 73,204 to shareholders of the Company
Basic earnings per ordinary share (sen) 17 58.8 41.7
The notes on pages 52 to 67 are an integral part of these financial statements.
49 AEON ANNUAL REPORT 2006 STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2006
Non-distributable Distributable Share Share Revaluation Retained capital premium reserve profi ts Total Note RM’000 RM’000 RM’000 RM’000 RM’000
At 1 March 2005 175,500 20,609 34,165 333,536 563,810
Profit for the year - - - 73,204 73,204 Transfer from revaluation reserve to retained profits - - (517) 517 - Total recognised income and expense for the year - - (517) 73,721 73,204
Dividend - 2005 final 18 - - - (15,163) (15,163)
At 28 February 2006/ 1 March 2006 175,500 20,609 33,648 392,094 621,851
Profit for the period - - - 103,246 103,246 Transfer from revaluation reserve to retained profits - - (431) 431 - Total recognised income and expense for the period - - (431) 103,677 103,246
Dividend - 2006 final in respect of year ended 28 February 2006 18 - - - (18,954) (18,954)
At 31 December 2006 175,500 20,609 33,217 476,817 706,143
The notes on pages 52 to 67 are an integral part of these financial statements.
50 AEON ANNUAL REPORT 2006 CASH FLOW STATEMENT for the period ended 31 December 2006
Note 1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
restated Cash flows from operating activities Profit before tax 140,741 112,198 Adjustments for: Depreciation 3 69,086 57,850 Amortisation of prepaid lease payments 4 1,202 1,377 Interest expense 1,962 595 Interest income (542) (345) (Gain)/loss on disposal of property, plant and equipment (34,073) 83 Property, plant and equipment written off 1,387 824
Operating profit before changes in working capital 179,763 172,582 Changes in working capital: Inventories (55,122) (19,765) Trade and other receivables (12,924) (18) Trade and other payables 130,778 133,603
Cash generated from operations 242,495 286,402 Tax paid (25,059) (34,310) Net cash from operating activities 217,436 252,092
Cash flows from investing activities Acquisition of property, plant and equipment 3 (252,862) (275,375) Proceeds from disposal of property, plant and equipment 113,408 320 Purchase of unquoted shares - (900) Interest received 542 345 Payment of lease liabilities 4 (2,463) - Net cash used in investing activities (141,375) (275,610)
Cash flows from financing activities Dividend paid to shareholders of the Company (18,954) (15,163) Interest paid (1,962) (595)
Net cash used in financing activities (20,916) (15,758) Net increase/(decrease) in cash and cash equivalents 55,145 (39,276) Cash and cash equivalents at beginning of period/year 52,780 92,056 Cash and cash equivalents at end of period/year 107,925 52,780
Cash and cash equivalents Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:
Note 31.12.2006 28.2.2006 RM’000 RM’000
restated
Cash and bank balances 8 107,925 27,105 Deposits with licensed financial institutions 8 - 26,300 Bank overdrafts 12 - (625) 107,925 52,780
The notes on pages 52 to 67 are an integral part of these financial statements.
51 AEON ANNUAL REPORT 2006 NOTES TO THE FINANCIAL STATEMENTS
AEON CO. (M) BHD. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of the Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follow: Registered office and Principal place of business 3rd Floor Jusco Taman Maluri Shopping Centre Jalan Jejaka, Taman Maluri Cheras 55100 Kuala Lumpur
The Company is principally engaged in the operations of a chain of superstores selling a broad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation.
On 24 April 2006, the Company became a subsidiary of ÆON Co., Ltd., a company incorporated in Japan.
1. Basis of preparation (a) Statement of compliance The financial statements of the Company has been prepared in accordance with applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, 1965. These financial statements also comply with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad.
The MASB has issued a number of new and revised Financial Reporting Standards (FRSs) that are effective for accounting periods beginning after 1 January 2006 or available for early adoption. In this set of financial statements, the Company has chosen to early adopt FRS 117, Leases and FRS 124, Related Party Disclosures which are effective for annual periods beginning on or after 1 October 2006.
The MASB has also issued FRS 139, Financial Instruments: Recognition and Measurement but for which the MASB has yet to announce the effective date of this standard. The Company has not adopted FRS 139 and by virtue of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on its financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed.
There is no effect of adopting the new/revised FRSs in 2006.
The financial statements were approved by the Board of Directors on 15 February 2007. (b) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the notes to the financial statements. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
2. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, unless otherwise stated.
Certain comparative amounts have been reclassified to conform to the current year’s presentation (see note 3 and note 4). (a) Foreign currency Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies at exchange rates at the dates of the transaction.
52 AEON ANNUAL REPORT 2006 2. Significant accounting policies (continued) (a) Foreign currency (continued) Foreign currency transactions (continued) Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement. (b) Property, plant and equipment (i) Recognition and measurement Property, plant and equipment except for freehold land and construction work-in-progress are stated at cost/ valuation less accumulated depreciation and accumulated impairment losses, if any.
The Company has availed itself to the transitional provision when the MASB adopted International Accounting Standard No.16 (Revised), Property, Plant and Equipment. Certain leasehold land and buildings were revalued in February 1995 and no later valuation has been recorded for these property, plant and equipment. During the year, leasehold land has been reclassified to prepaid lease payments (see Note 2(c)).
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
(ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.
(iii) Depreciation Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.
The estimate useful lives for the current and comparative period are as follows:
Buildings 2% - 5% Structures 10% Office equipment 10% Machinery and equipment 10% - 33.3% Furniture, fixtures and fittings 20% Motor vehicles 20% IT equipment 20%
The depreciable amount is determined after deducting the residual value.
Depreciation methods, useful lives and residual values are reassessed at the reporting date. (c) Leased assets Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognised on the Company’s balance sheet.
Accounting policy note on Leasehold land/Prepaid lease payments Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided.
The Company had previously classified lease of land as finance lease and had recognised the amount of prepaid lease payments as property within its property, plant and equipment. These leasehold land are stated at Directors’ valuation and the Company has availed itself to the transitional provision when MASB adopted International Accounting Standard No. 16 (Revised), “Property, Plant and Equipment”, the valuation of these assets has not been updated and they continue to be stated at their existing carrying amounts less accumulated depreciation. 53 AEON ANNUAL REPORT 2006 2. Significant accounting policies (continued) (c) Leased assets (continued) Accounting policy note on Leasehold land/Prepaid lease payments (continued) On early adoption of FRS 117, Leases, the Company treats such a lease as an operating lease, with the unamortised carrying amount classified as prepaid lease payments in accordance with the transitional provisions in FRS 117.67A. (d) Investments in equity securities Investments in equity securities are recognised initially at fair value plus attributable transaction costs.
Subsequent to initial recognition: • Investments in non-current equity securities, are stated at cost less allowance for diminution in value, • All current investments are carried at the lower of cost and market value, determined on an individual investment basis by category of investments.
Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement.
All investments in equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) the recognition of an asset on the day it is received by the entity, and b) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered. (e) Inventories Inventories are measured at the lower of cost and net realisable value with weighted average cost being the main basis for cost. Cost comprises the weighted average cost of merchandise derived at by using the Retail Inventory Method. Weighted average cost includes related charges incurred in purchasing such merchandise.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (f) Receivables Trade and other receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.
Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.
Receivables are not held for the purpose of trading. (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts. (h) Impairment of assets The carrying amounts of assets except for inventories and financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised, unless it reverses an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where an impairment loss on the same revalued asset was previously recognised in the income statement, a reversal of that impairment loss is also recognised in the income statement.
54 AEON ANNUAL REPORT 2006 2. Significant accounting policies (continued) (i) Employee benefits Short term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
The Company’s contribution to the Employee’s Provident Fund is charged to the income statements in the year to which they relate. Once the contributions have been paid, the Company has no further payment obligations. (j) Payables Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity. (k) Revenue Goods sold and services rendered Revenue from the sale of goods represents gross trading sales, including concessionaire sales which the Company is able to exercise control, less returns and discounts. Revenue is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.
Property management services from shopping centre operation which include rental income, service charge, sales commission and distribution centre charges earned are recognised on an accrual basis. (l) Interest income and borrowing costs Interest income is recognised as it accrues, using the effective interest method.
All borrowing costs are recognised in the income statement using the effective interest method, in the period in which they are incurred. (m) Lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. (n) Tax expense Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax liability is recognised for all taxable temporary differences.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. (o) Earnings per share The Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. (p) Segment reporting A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.
55 AEON ANNUAL REPORT 2006
886,589 1,157,869 1,297,209
ttings vehicles equipment progress Total xtures & xtures Motor IT in work ce and fi land (at (at land (at Buildings Offi (60,761) - (75,607) ------(136,368) -
87,666 - 126,003 245,198 - 82,878 87,666 6,551 - 126,003 173,346 141,308 4,386 369,595 - 100,684 66,795 260 7,663 18,993 257,597 - 126,003 173,849 392,447 4,931 - 123,467 308 9,783 29,573 343,773 217,574 5,803 412 11,152 Freehold Leasehold Buildings Leasehold Machinery Furniture, Construction
land At 1 March 2005 - As previously reported 87,666 - Effect of adopting 60,761 FRS 117 126,003 75,607 245,198 82,878 6,551 - 173,346 141,308 4,386 260 18,993 1,022,957 Cost/Valuation Additions Disposals Transfer in/(out) At 28 February 2006/ 1 March 2006 ------121,247 - - 14,135 3,150 - 4,132 1,870 - (461) 84,046 32,803 (758) - 2,014 (1,809) 1,095 (517) 255 48 (550) 20,131 - 275,375 - - (9,551) - (4,095) - RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 (at cost) valuation) valuation) cost) (at cost) Structures equipment equipment fi Additions Disposals Written off Transfer in/(out) At 31 December 2006 (20,871) ------(74,728) - - - 69,243 (2,234) 25,806 - - 28,337 (36) 2,434 - 207 (4,952) (996) 92,723 (1,018) 51,491 (278) - (63) (1,597) 936 (6,748) 2 - 104 (1) 10,125 252,862 - (103,902) - - - - - (28,546) (9,620) - At 1 March 2005, restated 3. Property, plant and equipment and equipment plant 3. Property,
56 AEON ANNUAL REPORT 2006
354,957 628,950 845,248 942,252 ttings vehicles equipment progress Total xtures & xtures Motor IT in work ce and fi land (at (at land (at Buildings Offi
- - 26,931 - - 39,917 - 25,368 29,451 3,614 61,854 - 45,757 - 96,832 33,811 2,901 - 3,454 30,069 222 82,449 114,306 - 40,798 3,156 - 41,179 257,639 237 3,728 110,101 - 125,160 312,621 3,665 257 -
87,666 87,666 - 99,072 66,795 - 96,552 - 205,281 - 95,934 57,510 - 323,838 2,937 - 351,649 66,873 111,492 82,288 4,209 44,476 6,055 175,148 1,485 233,672 59,543 92,414 38 1,775 2,138 18,993 71 155 29,573 11,152 Freehold Leasehold Buildings Leasehold Machinery Furniture, Construction
At 1 March 2005 - As previously reported - Effect of adopting FRS 117 - 6,540 26,931 2,443 39,917 25,368 - (6,540) 3,614 - 61,854 (2,443) 96,832 2,901 - 222 - - - 266,622 - - - - - (8,983) At 1 March 2005, restated At 28 February 2006/ 1 March 2006, restated Depreciation Depreciation for the year Disposals - At 28 February 2006/ 1 March 2006 - Depreciation for the period 2,520 Disposals Written off - - - 5,840 - At 31 December 2006 - 8,641 618 Carrying amounts - 536 - - - - 21,718 7,844 - 8,823 At 31 December 2006 - 17,943 - (198) - 533 637 - (696) 32,724 - (12,803) (1,123) - 15 (1,003) 17,952 (469) 572 - (25) (382) (452) - 57,850 (3,697) 20 (234) - (927) (1,375) - (62) (6,171) - (2,868) 69,086 (1) - - - (18,517) - (8,233) land cost) valuation) RM’000 (at RM’000 RM’000 cost) RM’000 equipment cost) Structures fi RM’000 RM’000 (at RM’000 RM’000 At 1 March 2005, restated 3. Property, plant and equipment (continued) and equipment plant 3. Property,
57 AEON ANNUAL REPORT 2006 3. Property, plant and equipment (continued) One of the buildings of the Company is situated on land belonging to a third party.
The buildings stated at Directors’ valuation are based on professional valuation carried out by an independent firm of valuers in February 1995 using the open market value and on an existing use basis. In accordance with the transitional provisions issued by Malaysian Accounting Standards Board (“MASB”) upon adoption of International Accounting Standard No. 16 (Revised), “Property, Plant and Equipment”, the valuation of these assets has not been updated, and they continue to be stated at their existing carrying amounts less accumulated depreciation.
Had the buildings been carried at historical cost less accumulated depreciation, the carrying amount of the revalued assets that would have been included in the financial statements at the end of the period would be as follows:
31.12.2006 28.2.2006 RM’000 RM’000
Buildings 59,125 60,538
The leasehold land has been reclassified as prepaid lease payments during the financial year in accordance with FRS 117.
4. Prepaid lease payments
Unexpired period more than 50 years Note RM’000
Cost At 1 March 2005 - Effect of adopting FRS 117 136,368
At 1 March 2005, restated/28 February 2006/1 March 2006 136,368 Additions 2,463
At 31 December 2006 138,831
Amortisation At 1 March 2005 - Effect of adopting FRS 117 8,983
At 1 March 2005, restated 8,983 Amortisation for the year 13 1,377
At 28 February 2006/1 March 2006 10,360 Amortisation for the period 13 1,202
At 31 December 2006 11,562
Carrying amounts At 1 March 2005, restated - Current 1,435 - Non-current 125,950
127,385
At 28 February 2006/1 March 2006 - Current 1,435 - Non-current 124,573
126,008
At 31 December 2006 - Current 1,461 - Non-current 125,808
127,269
58 AEON ANNUAL REPORT 2006 5. Investments
31.12.2006 28.2.2006 RM’000 RM’000
Non-current Unquoted shares, at cost Golf membership 45 45 Equity investment 1,030 1,030
1,075 1,075
6. Inventories
31.12.2006 28.2.2006 RM’000 RM’000
At cost: Retail merchandise 132,555 113,430 Food and others 81,628 45,631
214,183 159,061
During the financial period, inventories recognised as cost of sales amounted to RM1,370,402,706 (28.2.2006 - RM1,414,049,468).
7. Receivables, deposits and prepayments
31.12.2006 28.2.2006 Note RM’000 RM’000 restated Current Trade Trade receivables a 22,850 9,957 Less: Allowance for doubtful debts (722) (1,286)
22,128 8,671 Non-trade Other receivables and prepayments b 9,261 4,545 Rental and utility deposits 14,280 13,479
45,669 26,695 Note a Included in trade receivables is an amount of RM816,180 (28.2.2006 - RM470,006) due from companies with common Directors. During the period, trade receivables of RM563,629 were written off against allowance for doubtful debts. Note b Included in other receivables and prepayments is an amount of RM6,050,000 with the Company’s lawyer as stakeholder which represents the balance of the purchase consideration for the disposal of Kinta City Shopping Centre.
8. Cash and cash equivalents
31.12.2006 28.2.2006 RM’000 RM’000
Cash and bank balances 107,925 27,105 Deposits with licensed financial institutions - 26,300
107,925 53,405
59 AEON ANNUAL REPORT 2006 9. Capital and reserves
31.12.2006 28.2.2006 RM’000 RM’000 Share capital Ordinary shares of RM1.00 each: Authorised 500,000 500,000
Issued and fully paid 175,500 175,500 Share premium Share premium relates to the amount that shareholders have paid for the shares in excess of the nominal value. Revaluation reserve The revaluation reserve relates to the revaluation of property, plant and equipment in prior years. Section 108 tax credit Subject to agreement of the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank all of its retained profits at 31 December 2006 if paid out as dividends.
10. Deferred tax liabilities Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net 31.12.2006 28.2.2006 31.12.2006 28.2.2006 31.12.2006 28.2.2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 restated Property, plant and equipment - capital allowance - - (17,863) (17,863) (17,863) (17,863) - revaluation - - (12,916) (13,084) (12,916) (13,084) Provisions 1,666 1,666 - - 1,666 1,666
Net tax assets/ (liabilities) 1,666 1,666 (30,779) (30,947) (29,113) (29,281)
Movement in temporary differences during the year/period:
Recognised At Recognised At in income 28.2.2006/ in income At 1.3.2005 statement 1.3.2006 statement 31.12.2006 RM’000 RM’000 RM’000 RM’000 RM’000
Deferred tax liabilities Property, plant and equipment - capital allowance 11,888 5,975 17,863 - 17,863 - revaluation 13,286 (202) 13,084 (168) 12,916
25,174 5,773 30,947 (168) 30,779
Deferred tax assets Provisions (745) (921) (1,666) - (1,666)
24,429 4,852 29,281 (168) 29,113
Note 16 Note 16 29,113
60 AEON ANNUAL REPORT 2006 11. Payables and accruals
31.12.2006 28.2.2006 Note RM’000 RM’000 Trade Trade payables 389,394 324,716 Non-trade Other payables and accrued expenses 167,188 133,918 Progress claim from contractors 42,220 19,766 Rental and utility deposits 78,705 67,308 Holding company a 423 - Affiliated company b - 1,444
677,930 547,152 Note a ÆON Co., Ltd., a company incorporated in Japan was an affiliated company of the Company in the previous year and became the holding company during the period. The amount due to holding company is unsecured, interest free and repayable on demand. Note b In the previous year, the amount due to affiliated company was unsecured, interest free and repayable on demand.
12. Borrowings (unsecured)
31.12.2006 28.2.2006 RM’000 RM’000 Current Bank overdrafts - 625
In the previous year, the bank overdrafts of the Company were subject to interest at 0.5% above the lender’s base lending rates.
13. Operating profit
1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
Operating profit is arrived at after crediting: Gain on disposal of property, plant and equipment 34,073 - Rental income on shopping centre operation 150,285 128,574
and after charging: Auditors’ remuneration - Audit services - Auditors of the Company 130 120 - Other services by auditors of the Company 25 - Amortisation of prepaid lease payment 1,202 1,377 Depreciation 69,086 57,850 Loss on disposal of property, plant and equipment - 83 Personnel expenses - Contributions to Employee Provident Fund 11,143 11,136 - Wages, salaries and others 97,665 100,572 Property, plant and equipment written off 1,387 824 Rental expense - land 941 1,132 - buildings 45,236 42,995 - equipment 475 249 - fixtures and fittings 222 362 - hostel 7 203 Royalty 11,181 10,835
61 AEON ANNUAL REPORT 2006 14. Key management personnel compensation
The key management personnel compensations are as follows:
1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
Directors - Fees 959 1,048 - Remuneration 747 1,021 - Other short term employee benefits (including estimated monetary value of benefits-in-kind) 57 59
1,763 2,128 15. Interest expense
1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
Bank overdrafts 41 37 Other borrowings 1,921 558
1,962 595
16. Tax expense
1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 RM’000 RM’000
Current tax expense 37,663 34,142 Deferred tax expense (Note 10) - origination and reversal of temporary differences (168) 4,852
Total tax expense 37,495 38,994
Reconciliation of effective tax expense
Profit before taxation 140,741 112,198
Tax calculated using Malaysian tax rate of 27% (28.2.2006 - 28%) 38,000 31,415 Income not subject to tax (9,170) - Non-deductible expenses 8,833 7,781 R eversal of deferred tax liabilities on crystallisation of revaluation reserves of property, plant and equipment (168) (202)
Tax expense 37,495 38,994
In the Malaysia Budget 2007, it was announced that for the year of assessment 2007, the rate will be reduced from 28% to 27% and for the year of assessment 2008, the rate will be reduced to 26%.
Due to the change of its financial year end from 28 February to 31 December, the Company’s basis period for the year of assessment 2007 is from 1 March 2006 to 31 December 2007. As a result, the statutory tax rate in this financial period is 27%.
17. Basic earnings per ordinary share
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of RM103,246,050 (28.2.2006 - RM73,204,059) by the number of ordinary shares outstanding of 175,500,000 during the period.
62 AEON ANNUAL REPORT 2006 18. Dividend
Dividend recognised in the current year by the company is:
Total Sen amount Date of per share RM’000 payment
1.3.2006 to 31.12.2006 Final 28.2.2006 ordinary less 28% tax 10.8 18,954 20 July 2006
1.3.2005 to 28.2.2006 Final 2005 ordinary less 28% tax 8.6 15,163 20 July 2005
After the balance sheet date the following dividend was proposed by the Directors. This dividend will be recognised in subsequent financial reports upon approval by the shareholders.
Total Sen amount per share RM’000
Final ordinary less 27% tax 11.7 20,498
19. Segmental reporting Segment information is presented in respect of the Company’s business segment. The primary format, business segments, is based on the Company’s management and internal reporting structure. There is no segmental analysis by geographical location as the Company’s operations are principally located in Malaysia. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue and income taxes. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period. Business segments The Company comprises the following main business segments: Retailing The operations of a chain of superstores selling clothing, food, household goods and other merchandise. Property management services Shopping centre operation and distribution centre charges earned.
Property Retailing management services Total 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 31.12.2006 28.2.2006 31.12.2006 28.2.2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Business segments Revenue from external customers 1,763,283 1,807,753 178,148 154,692 1,941,431 1,962,445
Total revenue 1,763,283 1,807,753 178,148 154,692 1,941,431 1,962,445
Operating profit before disposal of Kinta City Shopping Centre 61,832 72,629 46,366 39,819 108,198 112,448 Gain on disposal of Kinta City Shopping Centre - - 33,963 - 33,963 -
Operating profit after disposal of Kinta City Shopping Centre 142,161 112,448
Interest expense (1,962) (595) Interest income 542 345
Profit before taxation 140,741 112,198 Tax expense (37,495) (38,994)
Profit for the period/year 103,246 73,204
63 AEON ANNUAL REPORT 2006 19. Segmental reporting (continued)
Property Retailing management services Total 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 31.12.2006 28.2.2006 31.12.2006 28.2.2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Segment assets 601,218 386,606 837,155 798,586 1,438,373 1,185,192 Unallocated assets - 26,300 Total assets 1,438,373 1,211,492
Segment liabilities (525,739) (438,778) (152,191) (108,999) (677,930) (547,777) Unallocated liabilities (54,300) (41,864)
Total liabilities (732,230) (589,641)
Capital expenditure 108,603 62,535 144,259 212,840 252,862 275,375 Depreciation 41,279 38,738 27,807 19,112 69,086 57,850 Amortisation of prepaid lease payment - - 1,202 1,377 1,202 1,377 Non-cash expenses other than depreciation 1,371 299 16 525 1,387 824
20. Operating leases Leases as lessee Total future minimum lease payments under non-cancellable operating leases are as follows:
31.12.2006 28.2.2006 RM’000 RM’000 Less than one year 64,276 44,369 Between one and five years 409,324 262,459 More than five years 471,111 325,806
944,711 632,634
The Company leases a number of land and buildings under operating leases. The leases have initial periods ranging from 3 to 25 years, with an option to renew the respective leases for another 3 to 15 years.
21. Capital commitments
31.12.2006 28.2.2006 RM’000 RM’000 Property, plant and equipment Contracted but not provided for and payable: Within one year 30,622 64,013
22. Related parties Identity of related parties For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Company has a related party relationship with its Directors, its holding company and the holding company’s subsidiaries. In the previous year, the Company had a related party relationship with its affiliated company and the affiliated company’s subsidiaries. Transactions with key management personnel (i) Key management personnel compensation Key management personnel compensation is disclosed in note 14. (ii) Transactions with key management personnel other than compensation A number of key management personnel, of their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. 64 AEON ANNUAL REPORT 2006 22. Related parties (continued)
Transaction value Balance outstanding 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to Note 31.12.2006 28.2.2006 31.12.2006 28.2.2006 RM’000 RM’000 RM’000 RM’000 Director With companies in which Dato’ Abdullah bin Mohd Yusof and Datuk Ramli bin Ibrahim have interests:
Laura Ashley (Malaysia) Sdn. Bhd. Management fee receivable a 43 58 5 3 Rental income receivable b 332 436 - -
With companies in which Dato’ Abdullah bin Mohd Yusof has interest: Abdullah & Zainudin Legal fees payable c (24) (21) - -
With companies in which Dato’ Abdullah bin Mohd Yusof, Toshiji Tokiwa, Masato Yokoyama and Datuk Ramli bin Ibrahim have interests:
AEON Credit Service (M) Berhad (a related Company) Sales through easy payment scheme financing d 4,211 4,467 816 470 Rental income e 765 44 - 4 Sales through AEON credit card f 35,466 5,908 653 (456) Convertible J CARD point income g 378 15 - - Credit card sales commission expenses h (515) (83) - -
Note a Management fee on administrative services rendered by the Company to Laura Ashley (Malaysia) Sdn. Bhd. Amounts were billed based on normal market rates for such services and were due and receivable under normal payment terms. Note b Rental of premises to Laura Ashley (Malaysia) Sdn. Bhd. for the usage as shoplot in a shopping centre at 1, Leboh Bandar Utama, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan. Amounts were billed based on normal market rates, and amounts were due and receivable under normal payment terms. Note c Professional fees payable to Abdullah & Zainudin for professional legal services rendered. Amounts were billed based on normal market rates for such services and were due and payable under normal payment terms. Note d Sales through easy payment instalment scheme factored to AEON Credit Service (M) Berhad. Note e Rental of premises to AEON Credit Service (M) Berhad for the usage of a shoplot in a shopping centre at Jusco Seremban 2 Shopping Centre, Seremban and AEON Tebrau City Shopping Centre, Johor Bahru. Amounts were billed based on normal market rates, and amounts were due and receivable under normal payment terms. Note f Sales through credit card issued by AEON Credit Service (M) Berhad. Note g Convertible J CARD points purchased by AEON Credit Service (M) Berhad for J CARD gift redemption given to cardholders who are also J CARD members of the Company. Note h Credit card commission payable to AEON Credit Service (M) Berhad for the sales through credit cards.
65 AEON ANNUAL REPORT 2006 22. Related parties (continued) Other related party transactions Transaction value Balance outstanding 1.3.2006 to 1.3.2005 to 1.3.2006 to 1.3.2005 to 31.12.2006 28.2.2006 31.12.2006 28.2.2006 RM’000 RM’000 RM’000 RM’000
Holding company Royalty expenses 11,181 - 11,181 -
Affiliated company Royalty expenses - 10,835 - 10,835
Holding company’s subsidiaries Purchase of merchandise 1,118 - 125 - Consultation fees 300 - 52 -
Affiliated company’s subsidiaries Purchase of merchandise - 1,568 - 202 Consultation fees - 171 - 26
All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cash. None of the balances is secured.
23. Financial instruments Exposure to credit risk, interest rate risk, foreign currency risk and liquidity risk arises in the normal course of the Company’s business. The Company’s policies for managing each of these risks are summarised below. Credit risk The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on shopping centre tenants and the Company requires all tenants to place adequate security deposits as stipulated under the tenancy agreement. At balance sheet date, the Company does not have any major concentration of credit risk on its shopping centre tenants. The maximum exposure to credit risk for the Company was represented by the carrying amount of each financial asset. Foreign currency risk The Company does not have any significant exposure to foreign currency risk as its transactions and balances are substantially denominated in Ringgit Malaysia. Liquidity risk The Company monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows. Interest rate risk The Company’s exposure to interest rate risk relates only to its short term borrowings such as overdraft and trade financing facilities. Interest-earning financial assets are mainly deposits placed with financial institutions that generate interest income for the Company. The management monitors the prevailing interest rates at regular intervals, and maintains an appropriate level of cash and cash equivalents to finance the working capital requirements and mitigate the effects of fluctuation in cash flow and liquidity positions of the Company. In view of the competitive rates that are available from the prevailing banking facilities granted to the Company to finance its working capital requirements and the prevailing low interest rate scenario, the interest rate risk is not expected to have a material impact on the Company. Effective interest rates and repricing analysis In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rate at the balance sheet date and the periods in which they reprice or mature, whichever is earlier:
31.12.2006 28.2.2006 Effective Within Effective Within interest rate per Total 1 period interest rate per Total 1 period annum % RM’000 RM’000 annum % RM’000 RM’000 Financial assets Deposits placed with licensed financial institutions - - - 2.85 26,300 26,300 Financial liabilities Bank overdrafts - - - 7.00 625 625
66 AEON ANNUAL REPORT 2006 23. Financial instruments(continued) Fair values In respect of cash and cash equivalents, trade and other receivables, trade and other payables and short term borrowings, the carrying amounts approximate fair value due to the relatively short term nature of these financial instruments.
The aggregate fair values of other financial assets carried on the balance sheet are shown below:
31.12.2006 28.2.2006 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000
Financial assets Long-term investments for which it is: Practical to estimate fair value 45 42 45 36 Not practical to estimate fair value 1,030 - 1,030 -
It was not practicable to estimate the fair value of an investment in an unquoted company due to the lack of compensation quoted market prices and the inability to estimated fair value without incurring excessive costs. That investment is carried at its original cost of RM1,030,000 (28.2.2006 - RM1,030,000) in the balance sheet. At period end, the share of the net tangible assets in this unquoted company is RM2,647,302 (28.2.2006 - RM2,260,224).
24. Change of financial year end
The Company changed its financial year end from 28 February to 31 December to be in line with AEON Group’s reporting. The comparatives for the Income Statement, Statement of Changes in Equity and Cash Flow Statement as well as the comparatives in the notes to the financial statements relating to the Income Statement are for the previous twelve months ended 28 February 2006 and hence, are not comparable to that for the current ten months ended 31 December 2006.
25. Comparative figures
Certain comparative figures have been reclassified. As As previously restated stated RM’000 RM’000
Balance sheet Non-current assets Property, plant and equipment 845,248 971,256 Prepaid lease payments 124,573 - Current assets Prepaid lease payments 1,435 -
971,256 971,256 Income statement Depreciation (57,850) (59,227) Operating expenses (267,457) (266,080)
Cash flow statement Depreciation 57,850 59,227 Amortisation of prepaid lease payments 1,377 -
Leasehold land amounting to RM126,008,000 as of 28 February 2006 was reclassified from property, plant and equipment to prepaid lease payments to comply with the requirements of FRS 117, Leases. Accordingly, the depreciation is also classified as amortisation of prepaid lease payments.
67 AEON ANNUAL REPORT 2006 STATEMENT BY DIRECTORS pursuant to Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 48 to 67 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Company at 31 December 2006 and of the results of its operations and cash flows for the period ended on that date.
Signed in accordance with a resolution of the Directors:
...... Dato’ Abdullah bin Mohd Yusof
...... Nagahisa Oyama
Kuala Lumpur, Date: 15 February 2007
STATUTORY DECLARATION pursuant to Section 169(16) of the Companies Act, 1965
I, Poh Ying Loo, the officer primarily responsible for the financial management of AEON CO. (M) BHD., do solemnly and sincerely declare that the financial statements set out on pages 48 to 67 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 15 February 2007.
…………………………………………….. Poh Ying Loo
Before me:
68 AEON ANNUAL REPORT 2006 REPORT OF THE AUDITORS to the members of AEON CO. (M) BHD.
We have audited the financial statements set out on pages 48 to 67. The preparation of the financial statements is the responsibility of the Company’s Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the contents of this report.
We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:
(i) the state of affairs of the Company at 31 December 2006 and of the results of its operations and cash flows for the period ended on that date; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Company; and
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company have been properly kept in accordance with the provisions of the said Act.
...... KPMG Desa Megat & Co. Firm Number: AF 0759 Chartered Accountants
...... Abdullah Abu Samah Partner Approval Number: 2013/06/08(J)
Kuala Lumpur, Date: 15 February 2007
69 AEON ANNUAL REPORT 2006 ANALYSIS OF SHAREHOLDINGS as at 28 February 2007
Authorised Share Capital : RM500,000,000 Paid-up Share Capital : RM175,500,000 Class of Shares : Ordinary Share of RM1 each Voting Rights : 1 vote per Ordinary Share
Size of No. of % of No. of % of Shareholdings Shareholders/ Shareholders/ Shares Held Issued Capital Depositors Depositors
1 - 99 91 7.06 1,390 0.00 100 - 1,000 306 23.74 235,410 0.13 1,001 - 10,000 715 55.47 2,608,600 1.49 10,001 - 100,000 116 9.00 3,395,800 1.93 100,001 - 8,774,999 60 4.65 79,753,800 45.44 8,775,000 and above 1 0.08 89,505,000 51.00
Total 1289 100.00 175,500,000 100.00
Substantial Shareholders as per Register of Substantial Shareholders
No. Name No. of Shares
Direct Interest % Indirect Interest % 1. AEON Co., Ltd. 89,505,000 51.0000 - - 2. Aberdeen Asset Management PLC 12,991,200 7.4024 - -
Directors’ Interests
No. Name No. of Shares
Direct Interest % Indirect Interest % 1. Dato’ Abdullah bin Mohd Yusof 268,000 0.1527 1,411,000 0.8040 2. Masato Yokoyama 30,000 0.0171 - - 3. Datuk Ramli bin Ibrahim - - 280,000 0.1595
70 AEON ANNUAL REPORT 2006 LIST OF 30 LARGEST SHAREHOLDERS as at 28 FEBRUARY 2007
No. Name of Shareholders No. of Shares % of Share held
1 AEON Co., Ltd. 89,505,000 51.00
2 HSBC Nominees (Asing) Sdn Bhd 8,278,200 4.71 BBH (Lux) SCA for Genesis Smaller Companies
3 Amanah Raya Nominees (Tempatan) Sdn Bhd 7,000,000 3.99 Skim Amanah Saham Bumiputera
4 Amanah Raya Nominees (Tempatan) Sdn Bhd 6,079,300 3.46 Amanah Saham Wawasan 2020
5 HSBC Nominees (Asing) Sdn Bhd 5,383,000 3.07 Exempt An for BNP Paribas Securities Services (Convert in USD)
6 Cartaban Nominees (Asing) Sdn Bhd 4,907,500 2.80 SSBT Fund D26J for Emerging Markets Global Small Capitalization Fund (TEMMUF)
7 HSBC Nominees (Asing) Sdn Bhd 3,272,600 1.86 Exempt An for JPMorgan Chase Bank, National Association (Nordea Bank S.A)
8 Malaysia Nominees (Tempatan) Sendirian Berhad 3,106,700 1.77 Great Eastern Life Assurance (Malaysia) Berhad (Par 1)
9 HSBC Nominees (Asing) Sdn Bhd 2,416,300 1.38 HSBC-FS for Aberdeen Malaysia Equity Fund
10 Cartaban Nominees (Asing) Sdn Bhd 2,179,100 1.24 State Street London Fund XCB9 for Aberdeen Asian Smaller Companies Investment Trust PLC
11 Employees Provident Fund Board 2,162,400 1.23
12 HSBC Nominees (Asing) Sdn Bhd 2,130,000 1.21 HSBC-FS I for Apollo Asia Fund Ltd
13 Cartaban Nominees (Asing) Sdn Bhd 1,893,300 1.08 Government of Singapore Investment Corporation Pte Ltd for Government of Singapore (C)
14 Syarikat Maluri Sdn Bhd 1,865,000 1.06
15 HSBC Nominees (Asing) Sdn Bhd 1,733,500 0.99 Exempt An for JPMorgan Chase Bank, National Association (JERSEY)
71 AEON ANNUAL REPORT 2006 No. Name of Shareholders No. of Shares % of Share held
16 Permodalan Nasional Berhad 1,616,200 0.92
17 Mayban Nominees (Tempatan) Sdn Bhd 1,515,000 0.86 Aberdeen Asset Management Sdn Bhd for The Employees’ Provident Fund Board (250416)
18 HSBC Nominees (Asing) Sdn Bhd 1,309,900 0.75 BBH and Co Boston for Smaller Companies Portfolio (GEMOFL)
19 HSBC Nominees (Tempatan) Sdn Bhd 1,290,000 0.74 Nomura Asset Mgmt SG for Employees Provident Fund
20 Takuya Okada 1,200,000 0.68
21 Rozilawati binti Haji Basir 1,155,000 0.66
22 Rozana Zeti binti Basir 1,155,000 0.66
23 Roshayati binti Basir 1,155,000 0.66
24 HSBC Nominees (Asing) Sdn Bhd 1,100,000 0.63 Exempt An for JPMorgan Chase Bank, National Association (Norges Bank)
25 CIMSEC Nominees (Tempatan) Sdn Bhd 1,075,700 0.61 CIMB-Principal Asset Management Berhad for Employees Provident Fund Board
26 Status Resources Sdn Bhd 911,000 0.52
27 Cartaban Nominees (Asing) Sdn Bhd 899,300 0.51 Government of Singapore Investment Corporation Pte Ltd for Monetary Authority of Singapore (H)
28 HSBC Nominees (Asing) Sdn Bhd 858,800 0.49 Exempt An for JPMorgan Chase Bank, National Association (U.K.)
29 MCIS Zurich Insurance Berhad 730,200 0.42
30 CIMSEC Nominees (Tempatan) Sdn Bhd 730,000 0.42 CIMB-Principal Asset Management Berhad for Pensions Trust Fund Council
Total 158,613,000 90.38
72 AEON ANNUAL REPORT 2006 PARTICULARS OF PROPERTIES
Location Description/ Land/ Date of Approx. Tenure Net book Existing use Built-up Acquisition (A)/ age of (Year of value as at area Completion (C)/ building expiry for 31/12/2006 (sq ft) Revaluation (R) (year) leasehold) (RM’000) Details of AEON’s properties as at 31 December 2006 are set out below: Lot 7041, Existing two-storey 200,316 February 1995 (R) 15 - 44,598 Mukim of Bukit Baru, shopping centre 1 District of Extention/Renovation 179,989 8 /2 Melaka Tengah, Melaka.
1 Lot 23551, Two-storey shopping 666,694 February 1995 (R) 14 /2 - 48,797 Mukim of Setapak, centre and three-storey District and State car park of Wilayah Persekutuan. Lot PT 21441, Two-storey shopping 691,414 October 1995 (C) 11 - 50,169 Mukim of Kapar, centre and District of Klang, two-storey car park Selangor.
1 Lot 49045, Freehold land/ 377,490/ April 2002 (A)/ 4 /2 Freehold 28,679 Mukim of Pulai, Two-storey shopping 483,299 August 2002 (C) District of Johor centre including Bahru, Johor. covered car park Lot 4086, Kawasan A, Two-storey shopping 906,497 January 2004 (C) 3 - 50,020 Mukim Batu, centre and two-storey Daerah Kuala Lumpur, car park Wilayah Persekutuan. Lot PTD 114179, Freehold land/ 1,308,035/ March 2004 (A) 1 Freehold 163,862 Mukim of Tebrau, Three-storey shopping 1,468,693 January 2006 (C) District of Johor centre and one-storey Bahru, Johor. car park Lot 3144, Freehold land/ 113,451/ April 2004 (A) - Freehold 69,751 Mukim of Cheras, Two-storey shopping 893,819 December 2006 (C) District of Ulu Langat, centre and two-storey Selangor. car park Details of AEON’s prepaid lease payments as at 31 December 2006 are set out below: Lot 7041, Leasehold land 436,036 February 1995 (R) - 99 years 13,402 Mukim of Bukit Baru, expiring on District of 19/12/2089 Melaka Tengah, Melaka. Lot 23551, Leasehold land 368,516 February 1995 (R) - 95 years 39,467 Mukim of Setapak, expiring on District and State 28/3/2085 of Wilayah Persekutuan. Lot PT 21441, Leasehold land 643,753 June 1994 (A) - 99 years 16,742 Mukim of Kapar, expiring on District of Klang, 9/5/2093 Selangor. Lot 4086, Kawasan A, Leasehold land 410,815 January 2004 (C) - 99 years 41,219 Mukim Batu, expiring on Daerah Kuala Lumpur, April 2101 Wilayah Persekutuan.
Lot PT 41977, Leasehold land 550,910 April 2004 (A) - 99 years 16,439 Mukim of Cheras, expiring on District of Ulu Langat, 12/4/2103 Selangor.
Note: Leasehold land as at 31 December 2006 was reclassified from property, plant and equipment to prepaid lease payments to comply with the requirements of FRS 117, Leases. 73 AEON ANNUAL REPORT 2006 JUSCO STORES & JUSCOSHOPPING STORES & SHOPPING CENTERS CENTRES Directory
PULAU PINANG JUSCO IPOH No.2, Jalan Teh Lean Swee, IPOH Off Jalan Sultan Azlan Shah Utara, KUANTAN 31400 Ipoh, Perak Darul Ridzuan. NORTHERN Tel: 05-549 9633
KUALA LUMPUR KINTA CITY SHOPPING CENTRE Tel: 05-548 4668 MELAKA
JOHOR BAHRU
JUSCO TAMAN MALURI PULAU PINANG Jalan Jejaka, Taman Maluri, IPOH Cheras, 55100 Kuala Lumpur.
KUANTAN Tel: 03-9285 5222 JUSCO TAMAN MALURI
KUALA LUMPUR SHOPPING CENTRE Tel: 03-9200 1004 CENTRAL MELAKA
JOHOR BAHRU
JUSCO BANDAR BARU KLANG JUSCO MID VALLEY Persiaran Bukit Raja 2, AT3 Mid Valley Megamall, Bandar Baru Klang, 41150 Mid Valley City, Klang, Selangor Darul Ehsan. Lingkaran Syed Putra, Tel: 03-3343 9366 59200 Kuala Lumpur. BUKIT RAJA SHOPPING CENTRE Tel:03-2284 4800 Tel: 03-3343 2166
JUSCO TAMAN EQUINE JUSCO CHERAS SELATAN No. 2, Jalan Equine, Taman Equine, Aras Mezzanine, Bandar Putra Permai, Lebuh Tun Hussien Onn, 43300 Seri Kembangan, 43200 Balakong, Selangor Darul Ehsan. Selangor Darul Ehsan. Tel: 03-8941 3700 Tel: 03-9080 3018 AEON TAMAN EQUINE AEON CHERAS SELATAN SHOPPING CENTRE SHOPPING CENTRE Tel: 03-7545 2700 Tel: 03-9080 3498
JUSCO MELAKA PULAU PINANG Leboh Ayer Keroh, IPOH 75450 Melaka. Tel: 06-232 4899 KUANTAN JUSCO MELAKA SHOPPING CENTRE KUALA LUMPUR Tel: 06-233 2988 MELAKA
JOHOR BAHRU
JUSCO SEREMBAN 2 112, Persiaran S2 B1, Seremban 2, 70300 Seremban, Negeri Sembilan Darul Khusus. Tel: 06-601 5633 SOUTHERN JUSCO SEREMBAN 2 SHOPPING CENTRE Tel: 06-601 5618
74 AEON ANNUAL REPORT 2006 JUSCO QUEENSBAY 1F-01 Persiaran Bayan Indah, Sungai Nibong, 11900 Bayan Lepas, Penang. Tel: 04-641 3822
JUSCO WANGSA MAJU JUSCO BANDAR UTAMA Jalan R1, Seksyen 1, No. 1, Leboh Bandar Utama, Bandar Baru Wangsa Maju, Bandar Utama, Damansara, 53300 Kuala Lumpur. 47800 Petaling Jaya, Tel: 03-4149 7666 Selangor Darul Ehsan. ALPHA ANGLE SHOPPING CENTRE Tel: 03-7726 6266 Tel: 03-4149 5288 1 UTAMA SHOPPING CENTRE Tel: 03-7726 6033
JUSCO BANDAR PUCHONG JUSCO METRO PRIMA Lot G40, IOI Mall, Batu 9, No. 1, Jalan Metro Prima, Jalan Puchong, 52100 Kepong, Bandar Puchong Jaya, Kuala Lumpur 47100 Puchong, Tel: 03-6257 2121 Selangor Darul Ehsan. JUSCO METRO PRIMA Tel: 03-8070 1200 SHOPPING CENTRE Tel: 03-6259 1122
PASAR RAYA D’HATI PASAR RAYA D’HATI DAMANSARA DAMAI, PEARL POINT, (formerly known as J-One Damansara Damai) (formerly known as J-One Pearl Point) C-1-05, Park Avenue, Lot 1.0.49, Ground Floor, Jalan PJU 10/1, PJU 10, Pearl Point Shopping Mall, Damansara Damai, Jalan Klang Lama, 47830 Petaling Jaya, 58000 Kuala Lumpur. Selangor Darul Ehsan. Tel: 03-7982 0422 Tel: 03-6157 1432
JUSCO TAMAN UNIVERSITI JUSCO PERMAS JAYA No. 4, Jalan Pendidikan, No. 1, Jalan Permas Utara, Taman Universiti, 81300 Bandar Baru Permas Jaya, Skudai, Johor Darul Takzim. 81750 Johor Bahru, Tel: 07-521 8000 Johor Darul Takzim. JUSCO TAMAN UNIVERSITI Tel: 07-386 8900 SHOPPING CENTRE JUSCO PERMAS JAYA Tel: 07-520 8700 SHOPPING CENTRE Tel: 07-386 0600
JUSCO TEBRAU CITY No 1, Jalan Desa Tebrau, Taman Desa Tebrau, 81100 Johor Bahru, Johor Darul Takzim. Tel: 07-3511 110 AEON TEBRAU CITY SHOPPING CENTRE Tel: 07-3522 220
75 AEON ANNUAL REPORT 2006 MILESTONESMILESTONES
1984 SEPTEMBER – JAYA JUSCO STORES SDN BHD established, in response to a request from Prime Minister Y.A.B. Datuk Seri Dr Mahathir bin Mohamad, to help modernise the retailing industry in Malaysia.
1985 JUNE – The first pilot store, JAYA JUSCO Dayabumi, opened.
DECEMBER – The second pilot store, JAYA JUSCO Taman Tun, opened.
1989 JUNE – JAYA JUSCO Dayabumi closed.
OCTOBER – The first Superstore, JAYA JUSCO Taman Maluri, opened.
1990 JUNE – “Japan Management Training Programme” begun.
NOVEMBER – 28 Malaysian students invited to Japan as “Ambassadors” through the ÆON “1% Club” Programme.
1991 OCTOBER – JUSCO Melaka was opened and fully operated by Malaysian staff. – The ÆON Group’s “Hometown Forest” programme was launched simultaneously at the inauguration of JUSCO Melaka.
1992 APRIL – JUSCO Wangsa Maju (Alpha Angle Shopping Centre), our first Shopping Centre, opened.
1994 AUGUST – Our Distribution Centre begun operations.
OCTOBER – Japanese Trainee Programme begun.
1995 JUNE – JAYA JUSCO Taman Tun Dr. Ismail closed.
AUGUST – JUSCO Bandar Utama (1 Utama Shopping Centre) opened.
OCTOBER – JUSCO Bandar Baru Klang (Bukit Raja Shopping Centre) opened.
1996 DECEMBER – JAYA JUSCO STORES BHD was listed on the Main Board of the KLSE.
1997 AUGUST – JUSCO Ipoh (Kinta City Shopping Centre) opened.
1998 DECEMBER – JUSCO Melaka Superstore was upgraded to a Shopping Centre.
1999 DECEMBER – JUSCO Mid Valley opened.
2000 DECEMBER – JUSCO Taman Maluri Superstore was upgraded to a Shopping Centre. – JUSCO Bandar Puchong opened.
2001 OCTOBER – Launch of WAOH Charity Fund / JUSCO Fest / JUSCO’s 17th Anniversary.
NOVEMBER – 22 Malaysian students and 2 former participants from the 1990 batch were invited to Japan as ‘Ambassadors’ through the ÆON “1% Club” Programme.
2002 APRIL – Establishment of JUSCO-OUM Retail Centre in Alpha Angle Shopping Centre, at Wangsa Maju.
JULY – JUSCO Taman Universiti opened, Japan Management Training Programme reactivated.
2003 JULY – WAOH Charity Bazaar.
76 AEON ANNUAL REPORT 2006 MILESTONESMILESTONES
2003 AUGUST – Smart Wonder World opened in JUSCO Taman Maluri.
OCTOBER – JUSCO Home Centre opened in 1 Utama Shopping Centre.
DECEMBER – 3,000 seedlings were planted in the vicinity of the JUSCO Permas Jaya store as part of ÆON’s environmental campaign, ‘Planting Seeds of Growth’. – JUSCO Permas Jaya Shopping Centre opened.
2004 JANUARY – JUSCO Metro Prima Tree Planting Ceremony was held. 2,000 seedlings were planted. – JUSCO Metro Prima Shopping Centre opened.
JUNE – WAOH Charity Fund officially registered as the “WAOH” Malaysian JUSCO Foundation.
SEPTEMBER – JAYA JUSCO STORES BHD. officially changed name to AEON CO. (M) BHD. – JUSCO celebrated 20th Anniversary in Malaysia with Gala Dinner. – Official launch of “WAOH” Malaysian JUSCO Foundation. – 30,000 seedlings planted in the Malaysia-Japan Friendship Forest, AEON Woodland, Paya Indah Wetlands.
AUGUST – Company authorised share capital increased from RM100,000,000 to RM500,000,000.
OCTOBER – Completed Bonus Issue (1:1) for 87,750,000 new Ordinary Shares.
2005 MARCH – AEON CO. (M) BHD. received a certificate of appreciation from the Prime Minister for its tree planting activities.
JULY – Charity Gala Dinner was held.
AUGUST – The management of AEON CO. (M) BHD. met with the Menteri Besar of Negeri Sembilan, Y.A.B. Datuk Seri Utama Hj Mohamad bin Hj Hasan.
SEPTEMBER – JUSCO Seremban 2 Tree Planting ceremony was held. 3,300 seedlings were planted. – JUSCO Seremban 2 Shopping Centre opened.
OCTOBER – The 1st PASAR RAYA D’HATI (formerly known as J-One) supermarket in Damansara Damai opened.
DECEMBER – AEON Tebrau City Tree Planting ceremony was held. 6,000 seedlings were planted.
2006 JANUARY – AEON Tebrau City Shopping Centre opened.
APRIL – Change of financial year end.
JUNE – AEON Taman Equine Tree Planting Ceremony held. 4,000 seedlings were planted.
JULY – AEON Taman Equine Shopping Centre opened. – PASAR RAYA D’HATI (formerly known as J-One) supermarket in Pearl Point opened.
NOVEMBER – AEON Cheras Selatan Tree Planting Ceremony held. 4,000 seedlings were planted. – WAOH Charity Gala Dinner held.
DECEMBER – JUSCO Queensbay Store opened. – AEON Cheras Selatan Shopping Centre opened.
2007 JANUARY – PASAR RAYA D’HATI name change ceremony held at Pearl Point Shopping Mall.
77 AEON ANNUAL REPORT 2006 NOTICE OF ANNUAL GENERAL NOTICEMEETING OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Twenty-Second Annual General Meeting of AEON CO. (M) BHD. will be held at Ballroom 1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 24 April 2007 at 10.30 a.m. for the following purposes:-
AGENDA As Ordinary Business 1. To receive and adopt the Audited Financial Statements for the financial period ended 31 December 2006 together with the Reports of the Directors and Auditors thereon. Ordinary Resolution 1
2. To declare a First and Final Dividend of 16 sen per share less 27% income tax for the financial period ended 31 December 2006. Ordinary Resolution 2
3. To approve the payment of Directors’ Fees for the financial period ended 31 December 2006. Ordinary Resolution 3
4. To re-elect the following Directors retiring under Article 74 of the Articles of Association of the Company:-
i) Dato’ Abdullah bin Mohd Yusof Ordinary Resolution 4 ii) Mr. Toshiji Tokiwa Ordinary Resolution 5 iii) Mr. Tatsuichi Yamaguchi Ordinary Resolution 6 iv) Mr. Nagahisa Oyama Ordinary Resolution 7 v) Mr. Masato Yokoyama Ordinary Resolution 8 vi) Datuk Ramli bin Ibrahim Ordinary Resolution 9 vii) Brig. Jen. (B) Dato’ Mohd Idris bin Saman Ordinary Resolution 10 viii) Datuk Zawawi bin Mahmuddin Ordinary Resolution 11 ix) Dato’ Chew Kong Seng Ordinary Resolution 12
5. To re-appoint Messrs KPMG Desa Megat & Co. as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 13
As Special Business To consider and, if thought fit, to pass the following ordinary resolution :-
6. PROPOSED RENEWAL OF EXISTING SHAREHOLDERS’ MANDATE FOR THE RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE”)
“THAT approval be and is hereby given to the Company, to enter and give effect to the recurrent related party transactions of a revenue or trading nature (hereinafter to be referred to as “Recurrent Transactions”) with the related parties as stated in Section 2.2 of the Circular to Shareholders dated 2 April 2007 which are necessary for the Company’s day-to-day operations subject further to the following:-
78 AEON ANNUAL REPORT 2006 (i) the Recurrent Transactions contemplated are in the ordinary course of business and on terms which are not more favourable to related parties than those generally available to the public, and are not to the detriment of the minority shareholders;
(ii) the approval is subject to annual renewal and shall only continue to be in force until:-
(a) the conclusion of the next Annual General Meeting of the Company following the forthcoming Annual General Meeting of the Company at which the Proposed Renewal of Shareholders’ Mandate is approved, at which time it will lapse unless by a resolution passed at the Annual General Meeting the mandate is again renewed;
(b) the expiration of the period within which the next Annual General Meeting of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or
(c) revoked or varied by resolution passed by the shareholders in general meeting,
whichever is the earlier; and
(iii) the disclosure of the breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Renewal of Shareholders’ Mandate in the Annual Report of the Company based on the following information:-
(a) the type of Recurrent Transactions entered into; and
(b) the names of the related parties involved in each type of the Recurrent Transactions entered into and their relationship with the Company.
AND THAT the Directors of the Company be and are hereby authorised to do all acts and things to give full effect to the Recurrent Transactions contemplated and/or authorised by this resolution, as the Directors of the Company, in their absolute discretion, deem fit.” Ordinary Resolution 14
7. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION
“THAT the deletions, alterations, modifications, variations and additions to the Articles of Association of the Company as set out in Appendix I attached with the Annual Report for financial period ended 31 December 2006 be and are hereby approved.” Special Resolution 1
79 AEON ANNUAL REPORT 2006 NOTICENOTICE OF DIVIDEND OF DIVIDEND PAYMENT PAYMENT
NOTICE IS HEREBY GIVEN THAT, subject to the approval of shareholders at the Twenty-Second Annual General Meeting, a first and final dividend of 16 sen per share less 27% income tax in respect of the financial period ended 31 December 2006 will be paid to shareholders on 24 May 2007. The entitlement date for the said dividend shall be 4 May 2007.
A Depositor shall qualify for entitlement to the Dividend only in respect of :-
(a) Shares transferred to the Depositor’s securities account before 4.00 p.m. on 4 May 2007 in respect of transfers.
(b) Shares bought on Bursa Malaysia Securities Berhad on cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
BY ORDER OF THE BOARD
…………………………………………….. SAW BEE LEAN (MAICSA 0793472) Secretary
Kuala Lumpur Date: 2 April 2007
NOTES :
1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting, provided that the provisions of Section 149(1)(c) of the Act are complied with.
3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.
4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 3rd Floor, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur not less than 48 hours before the time set for holding the meeting.
5. If the appointor is a corporation, the instrument appointing a proxy must be executed under its Common Seal or under the hand of its attorney.
6. Explanatory Note on the Special Business Ordinary Resolution 14 on the Proposed Renewal of Shareholders’ Mandate The Ordinary Resolution 14 proposed, if passed, will empower the Directors from the date of the Twenty-Second Annual General Meeting, to deal with the related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for the Company’s day-to-day operations. These recurrent related party transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders. This authority unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company and subject always to provision (ii) of the resolution. The details of the recurrent related party transactions are set out in the Circular to the Shareholders dated 2 April 2007, which is despatched together with this Annual Report. Special Resolution 1 on the Proposed Amendments to the Articles of Association The Special Resolution 1 proposed, if passed, will render the Articles of Association of the Company to be consistent with the new requirements under Chapter 7 of the Listing Requirements of Bursa Malaysia Securities Berhad pursuant to the letter dated 14 December 2006 from Bursa Malaysia Berhad and any prevailing laws, rules, regulations, orders, guidelines and requirements of the relevant authorities.
80 AEON ANNUAL REPORT 2006 STATEMENT ACCOMPANYING NOTICE STATEMENTOF TWENTY-SECOND ACCOMPANYING NOTICE ANNUAL OF TWENTY-SECOND ANNUALGENERAL GENERAL MEETING MEETING Pursuant to the Paragraph 8.28(2) of the Bursa Securities Listing Requirements appended hereunder are:-
a. Further details of Directors standing for re-election Details of Directors’ standing for re-election are set out in Directors’ Profiles appearing on pages 20-22 of the Annual Report for the financial period ended 31 December 2006.
The remaining part of this page was intentionally left blank.
81 AEON ANNUAL REPORT 2006 APPENDIX I PROPOSEDPROPOSED AMENDMENTS AMENDMENTS TO THE ARTICLES TO OF THEASSOCIATION ARTICLES OF ASSOCIATION
The Articles of Association of the Company are proposed to be amended in the following manner:-
1. Article 2
To delete the following interpretations in the existing Article 2 and substituted as follows:-
Existing New
“Central Depository - Malaysian Central “Depository - Bursa Malaysia Depository Sdn. Bhd.” Depository Sdn Bhd”
“Company - Jaya Jusco Stores Bhd.” “Company - AEON CO. (M) BHD.”
“Exchange - Kuala Lumpur Stock “Exchange - Bursa Malaysia Exchange” Securities Berhad”
All reference to the abovementioned interpretations throughout the whole Articles of Association be changed accordingly.
2. Article 4 (i) To delete the existing 1st paragraph of Article 4 in its entirety and to adopt the following new paragraph:-
Existing 1st paragraph of Article 4
“Subject to the Act, any preference shares may, with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time and the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts, and attending general meetings of the Company;”
New 1st paragraph of Article 4
“Subject to the Act, any preference shares may, with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed and the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts, and attending general meetings of the Company;”
(ii) To delete the existing last paragraph of Article 4 which reads as follows in its entirety:-
Existing last paragraph of Article 4
“The holder of a preference share must be entitled to a return of capital in preference to holders of ordinary shares when the Company is wound up.”
82 AEON ANNUAL REPORT 2006 3. Article 50 (2) To delete the existing Article 50 (2) in its entirety and to adopt the following new Article 50 (2):-
Existing Article 50 (2)
“The Company shall request the Central Depository in accordance with the Rules to issue a Record of Depositors as at a date not less than three (3) market days before the general meeting (hereinafter referred to as “the General Meeting Depositors”).”
N New Article 50 (2)
“The Company shall request the Central Depository in accordance with the Rules to issue a Record of Depositors as at the latest date which is reasonably practicable which shall in any event be not less than three (3) market days before the general meeting (hereinafter referred to as “the General Meeting Depositors”).”
4. Article 62 To delete the existing Article 62 in its entirety and to adopt the following new Article 62:-
Existing Article 62
“Subject to any special rights or restrictions for the time being attached to any classes of shares at meetings of members or classes of members, each member entitled to vote may vote in person or by proxy or by attorney or by duly authorised representative and on a show of hands every person who is a member or proxy or attorney or representative of a member shall have one vote, and on a poll every member present in person or by proxy or attorney or representative shall have one vote for each share he holds.”
N New Article 62
“Subject to any special rights or restrictions for the time being attached to any classes of shares at meetings of members or classes of members, each member entitled to vote may vote in person or by proxy or by attorney or by duly authorised representative and on a resolution to be decided on a show of hands, a holder of ordinary shares or preference shares who is personally present and entitled to vote or by proxy or by attorney or by duly authorised representative shall be entitled to one vote and on a poll a holder of ordinary shares or preference shares who is personally present and entitled to vote or by proxy or by attorney or by duly authorised representative shall be entitled to one vote for each share he holds.”
5. Article 73 To delete the existing Article 73 in its entirety and to adopt the following new Article 73:-
Existing Article 73
“All the Directors of the Company shall be natural persons and until otherwise determined by general meeting the number of Directors shall not be less than five (5) or more than thirteen (13). The Board must have a minimum of two (2) Directors or one-third in number, whichever is the higher who are independent directors as defined in the Listing Requirements and if the number of Directors of the Company is not 3 or a multiple of 3, then the number nearest one-third shall be used.”
N New Article 73
“Until otherwise determined by general meeting the number of Directors shall not be less than five (5) or more than thirteen (13). The Board must have a minimum of two (2) Directors or one-third in number, whichever is the higher who are independent directors as defined in the Listing Requirements and if the number of Directors of the Company is not 3 or a multiple of 3, then the number nearest one-third shall be used.”
83 AEON ANNUAL REPORT 2006 6. New Article 75A
To insert a new Article 75A as follows:- “The cost of serving the notice to propose the election of a Director where the nomination is made by a member, shall be borne by the member making the nomination.”
7. Article 84 (a) To delete the existing Article 84 (a) in its entirety and to adopt the following new Article 84 (a):-
Existing Article 84 (a)
“The office of Director shall become vacant if the Director:-
becomes bankrupt or makes any arrangement or composition with his creditors generally;”
N New Article 84 (a)
“The office of Director shall become vacant if the Director:-
becomes bankrupt or makes any arrangement or composition with his creditors generally during his term of office;”
8. Article 84 (d) To delete the existing Article 84 (d) in its entirety and to adopt the following new Article 84 (d):-
Existing Article 84 (d)
“The office of Director shall become vacant if the Director:-
becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to mental disorder;”
N New Article 84 (d)
“The office of Director shall become vacant if the Director:-
becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to mental disorder during his term of office;”
84 AEON ANNUAL REPORT 2006 PROXY FORM No. of Shares AEON CO. (M) BHD. (126926-H) CDS account No. (Incorporated in Malaysia)
I/We, ...... (name of shareholder as per NRIC, in capital letters) IC No./ID No./Company No...... (new) ...... (old) of...... (full address) being a member(s) of the abovenamed Company, hereby appoint...... (name of proxy as per NRIC, in capital letters) IC No...... (new)...... (old) of ...... (full address) or failing him/her ...... (name of proxy as per NRIC, in capital letters) IC No...... (new) ...... (old) of ...... (full address) as my/our proxy to vote for me/us on my/our behalf at the Twenty-Second Annual General Meeting of the Company to be held at Ballroom 1, Level 2, Hotel Nikko 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 24 April 2007 at 10.30 a.m and at any adjournment thereat.
My/our proxy is to vote as indicated below :
NO. RESOLUTION FOR AGAINST
ORDINARY BUSINESS Ordinary Resolution 1 Adoption of Audited Financial Statements and Reports for the financial period ended 31 December 2006
Ordinary Resolution 2 Declaration of a first and final dividend of 16 per share less 27% income tax for the financial period ended 31 December 2006. Ordinary Resolution 3 Approval of Directors’ Fees
Ordinary Resolution 4 Re-election of Dato’ Abdullah bin Mohd Yusof
Ordinary Resolution 5 Re-election of Mr. Toshiji Tokiwa
Ordinary Resolution 6 Re-election of Mr. Tatsuichi Yamaguchi
Ordinary Resolution 7 Re-election of Mr. Nagahisa Oyama
Ordinary Resolution 8 Re-election of Mr. Masato Yokoyama
Ordinary Resolution 9 Re-election of Datuk Ramli bin Ibrahim
Ordinary Resolution 10 Re-election of Brig. Jen (B) Dato’ Mohd Idris bin Saman
Ordinary Resolution 11 Re-election of Datuk Zawawi bin Mahmuddin Ordinary Resolution 12 Re-election of Dato’ Chew Kong Seng
Ordinary Resolution 13 Re-appointment of Messrs KPMG Desa Megat & Co.
SPECIAL BUSINESS
Ordinary Resolution 14 Proposed Renewal of Existing Shareholders’ Mandate for the Recurrent Related Party Transactions of a Revenue or Trading Nature Special Resolution 1 Proposed Amendments to the Articles of Association
[Please indicate with an “X” in the spaces provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fit.]
For appointment of two proxies, percentage of shareholdings to be represented by the proxies: ...... No. of shares Percentage Signature: Shareholder or Common Seal Proxy 1 ...... % Dated this...... day of...... 2007 Proxy 2 % Total 100%
NOTE : 1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply. 2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting, provided that the provisions of Section 149(1)(c) of the Act are complied with. 3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. 4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 3rd Floor, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur not less than 48 hours before the time set for holding the meeting. 5. If the appointor is a corporation, the instrument appointing a proxy must be executed under its Common Seal or under the hand of its attorney. Place Stamp Here
The Company Secretary: AEON CO. (M) BHD. (Company No. 126926-H) 3rd Floor, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur.