Annual Report 2019 1
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REGIST AEON CO. (M) BHD. R ATION ATION N O. 198401014370 (126926-H) ANNU A L REPO R T 2019 AEON CO. (M) BHD. Registration No. 198401014370 (126926-H) 3rd Floor, AEON Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur, Malaysia. TEL : +603-9207 2005 FAX : +603-9207 2006/2007 AEON CARELINE : 1-300-80-AEON(2366) www.aeonretail.com.my I www.facebook.com/aeonretail.my I AEON CO. (M) BHD. Registration No. 198401014370 (126926-H) ANNUAL REPORT 2019 1 Corporate and Business Corporate Governance Others Table of Review 61 Corporate Governance 158 Analysis of Shareholdings Contents 2 Corporate Information Overview Statement and Directory 158 Substantial Shareholders 74 Audit and Risk 3 Five-Year Management 158 Directors’ Interest Financial Highlights Committee Report 159 List of Thirty (30) 4 Share Price and 78 Statement on Largest Shareholders Financial Charts Risk Management and Internal Control 160 Particulars of Properties 5 Chairman’s Statement 82 Additional Compliance 162 AEON Stores, AEON Malls 7 Board of Directors’ Profiles Information and MaxValu 13 Senior Management 83 Statement of Directors’ 165 Our Milestones Responsibility 14 Management Discussion 169 Notice of and Analysis Annual General Meeting 26 Malaysian AEON Financial Statements 171 Notice of Foundation Dividend Payment 85 Directors’ Report 173 Administrative Details 89 Statement of Sustainability Statement Financial Position Proxy Form 30 Sustainability Statement 90 Statement of Profit or Loss and Other Comprehensive Income 91 Statement Of Changes In Equity 92 Statement of Cash Flows 95 Notes to the Financial Statements 152 Statement by Directors and Statutory Declaration 153 Independent Auditors’ Report AEON CO. (M) BHD. 2 ANNUAL REPORT 2019 Corporate Information and Directory BOARD OF DIRECTORS REGISTERED OFFICE AND DATE OF INCORPORATION HEAD OFFICE Datuk Iskandar bin Sarudin 15 September 1984 (Chairman) 3rd Floor AEON Taman Maluri Shopping Centre Shafie bin Shamsuddin Jalan Jejaka, Taman Maluri (Managing Director) Cheras, 55100 Kuala Lumpur STOCK EXCHANGE LISTING (Appointed on 1 January 2020) Tel : 03-9207 2005 Hiroyuki Kotera Fax : 03-9207 2006/ 2007 The Company is a public listed company, incorporated and domiciled in Datuk Syed Ahmad Helmy Malaysia and listed on the Main Market bin Syed Ahmad of the Bursa Malaysia Securities Berhad AUDITORS Dato’ Tunku Putra Badlishah Stock Name : AEON Ibni Tunku Annuar Stock Code : 6599 KPMG Desa Megat PLT Abdul Rahim bin Abdul Hamid (LLP0010082-LCA & AF 0759) Chartered Accountants Chong Swee Ying Level 10, KPMG Tower HOMEPAGE 8, First Avenue, Bandar Utama Poh Ying Loo 47800 Petaling Jaya (Retiring on 24 June 2020) www.aeonretail.com.my Tel : 03-7721 3388 Yasuo Nishitohge Fax : 03-7721 3399 (Retiring on 24 June 2020) PRINCIPAL BANKERS Charles Tseng @ Charles Tseng Chia Chun SHARE REGISTRAR MUFG Bank (Malaysia) Berhad (Retiring on 24 June 2020) [Registration No. 199401016638(302316-U)] Shinobu Washizawa Tricor Investor & Malayan Banking Berhad (Resigned on 31 December 2019) Issuing House Services Sdn Bhd [Registration No. 196001000142(3813-K)] [Registration No. 197101000970(11324-H)] Unit 32-01, Level 32, Tower A CIMB Bank Berhad [Registration No. 197201001799(13491-P)] Vertical Business Suite Avenue 3, Bangsar South Mizuho Bank (Malaysia) Berhad SECRETARIES No.8, Jalan Kerinchi [Registration No. 201001039768(923693-H)] 59200 Kuala Lumpur RHB Bank Berhad Tai Yit Chan [Registration No. 196501000373(6171-M)] (SSM PC NO. 202008001023)(MAICSA 7009143) Tel : 03-2783 9299 Sumitomo Mitsui Banking Corporation Tan Ai Ning Fax : 03-2783 9222 (SSM PC NO. 202008000067)(MAICSA 7015852) Malaysia Berhad [Registration No. 201001042446(926374-U)] Corporate NOTICE OF PAYMENT OF DIVIDEND ANNUAL GENERAL MEETING Calendar Book Closure 14 June 2019 30 April 2019 Payment 11 July 2019 ANNUAL GENERAL MEETING QUARTERLY RESULTS ANNOUNCEMENTS 30 May 2019 1st Quarter 30 May 2019 2nd Quarter 26 August 2019 3rd Quarter 28 November 2019 4th Quarter 24 February 2020 3 Five-Year Financial Highlights 2019* 2018 2017** 2016*** 2015**** Year Ended 31 December RM’000 RM’000 RM’000 RM’000 RM’000 Financial Results Revenue 4,538,884 4,353,640 4,123,351 4,018,688 3,834,640 Retailing 3,832,247 3,666,306 3,458,981 3,417,676 3,288,832 Property management services 706,637 687,334 664,370 601,012 545,808 EBITDA 843,402 532,568 524,587 462,304 444,232 Profit before tax 196,887 187,038 193,806 163,029 210,841 Profit after tax 109,292 105,123 105,007 90,892 131,671 Profit attributable to owners of the Company 109,292 105,123 105,007 90,892 133,407 Net dividend 56,160 56,160 56,160 42,120 56,160 Financial Positions Assets Property, plant and equipment and Intangible assets 3,659,183 3,713,634 3,521,273 3,455,704 3,050,485 Right of use assets 1,772,427 – – – – Investments 76,600 82,106 92,690 101,427 43,950 Deferred tax assets 120,059 2,242 – – – Other non-current assets 19,024 17,954 17,427 16,771 16,208 Current assets 890,481 830,770 778,174 839,814 931,660 Total assets 6,537,774 4,646,706 4,409,564 4,413,716 4,042,303 Equity Share capital 702,000 702,000 702,000 702,000 702,000 Non-distributable reserves 64,636 70,023 61,478 43,429 35,812 Retained earnings 929,034 1,248,352 1,199,389 1,136,502 1,095,787 Total equity attributable to 1,695,670 2,020,375 1,962,867 1,881,931 1,833,599 owners of the Company Non-controlling interests – – – – 10,935 Liabilities Borrowings 928,660 995,423 937,670 965,392 769,872 Lease liabilities 2,293,098 – – – – Deferred tax liabilities – – 11,316 27,990 21,151 Other liabilities 1,620,346 1,630,908 1,497,711 1,538,403 1,406,746 Total equity and liabilities 6,537,774 4,646,706 4,409,564 4,413,716 4,042,303 Financial Indicators Earnings per share (sen)**** 7.78 7.49 7.48 6.47 9.50 Net dividend per share (sen) 4.00 4.00 4.00 3.00 4.00 Net assets per share (RM)**** 1.21 1.44 1.40 1.34 1.31 Net debt to equity (%)***** 50.82 45.20 43.77 46.97 30.14 Return on equity (%) 6.45 5.20 5.35 4.83 7.28 Price earnings ratio 18.25 19.63 23.53 39.72 28.73 Share price as at December (RM) 1.42 1.47 1.76 2.57 2.73 Notes: * The Company adopted MFRS 16, Leases replacing MFRS 117, Leases from 1 January 2019. ** The amounts presented for 2017 have been adjusted upon adoption of MFRS 15, Revenue from Contracts with Customers on 1 January 2018. *** The amounts presented from 2016 are for company level as the Company pared down its shareholdings in its subsidiary during year 2017. The amounts presented for 2016 have been restated upon adoption of Amendments to MFRS 127, Equity Method in Separate Financial Statements. **** The amounts presented for 2015 is for group level. ***** Net debt to equity with lease liabilities included within is recorded at 186.05% as at 31 December 2019. AEON CO. (M) BHD. 4 ANNUAL REPORT 2019 Share Price and Financial Charts SHARE PRICE 2019 STOCK CODE: 6599 STOCK NAME: AEON JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC High (RM) 1.57 1.69 1.66 1.53 1.55 1.78 1.83 1.79 1.56 1.66 1.66 1.54 Low (RM) 1.39 1.51 1.43 1.41 1.38 1.48 1.66 1.45 1.45 1.45 1.50 1.41 Volume (’000) 37,415 55,671 18,589 12,108 12,689 33,116 22,393 33,708 10,350 18,685 9,272 16,307 REVENUE RM million 4,539 4,354 4,123 4,019 3,835 2019 2018 2017 2016 2015 PROFIT ATTRIBUTABLE TO OWNERS RM million 109 105 105 91 133 2019 2018 2017 2016 2015 5 Chairman’s Statement Dear Valued 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. for the year ended 31 December 2019. Datuk Iskandar bin Sarudin Chairman FINANCIAL PERFORMANCE REVIEW Malaysia’s economy grew 4.3 per cent in 2019 with the slowest The retail business segment at a revenue of RM3.832 billion pace in the fourth quarter of the year at 3.6 per cent from the in FY2019, registered a good growth of 4.5% over preceding softening global demand and the United States-China trade year with a corresponding much improved retailing profit of war. Consumer sentiments remained subdued amid rising cost RM114.6 million compared to previous year of RM51.7 million. of living concerns, and continuous uncertainties in business The higher revenue were mainly due to the contributions from outlook and employment. newly renovated stores and newly opened stores in April 2018 and January 2019 as well as newly opened specialty stores For 2019, the Company continued to record growth in its in 2019. As for the better profit achievement, besides higher performance with a revenue registered at RM4.539 billion or an revenue, it was also due to margin improvement and a result of increase of 4.3% for the financial year (FY) ended 31 December change in marketing strategies, assortment and pricing under 2019 over FY2018. The higher revenue was mainly due to the competitive market. revenue contributions from newly renovated stores and newly opened specialty stores during the year under review, as well as In FY2019, the Company continued to strategically refurbish new stores which were opened in April 2018 and January 2019.