Annual Report 2005 AEON CO. (M) BHD. (126926-H) (formerly known as Jaya Jusco Stores Bhd.) • ANNUAL REPORT 2005
AEON CO. (M) BHD.(126926-H) AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.) (formerly known as Jaya Jusco Stores Bhd.) 3rd Floor, JUSCO Taman Maluri Shopping Center, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur. Incorporated In Malaysia Cover Rationale Our unique Annual Report cover design reflects ÆON’s corporate image. The colourful printed plastic sleeve represents the image that all our customers see: JUSCO, a fresh, vibrant, colourful, retailer and shopping center operator that has taken a unique approach to shopping, bringing Malaysians a fresh and exciting shopping experience. It is a company that offers a wide assortment of products and services to cater for their needs and modern lifestyles and, more importantly, a company that delivers what it promises, with a smile. Inside, the actual Annual Report cover represents AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.): a sophisticated, highly respected retail organization that is big, strong and financially stable, with a young, dynamic and innovative outlook. Together, they represent a company that is both appealing to its customers and highly respected by investors and peers in the corporate world. AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Table of Contents ANNOUNCEMENT OF COMPANY’S NAME CHANGE & EGM 4 JUSCO’S 20TH ANNIVERSARY IN MALAYSIA 5 ”WAOH” MALAYSIAN JUSCO FOUNDATION 8 CORPORATE ACTIVITIES 10 HUMAN RESOURCE ACTIVITIES 13 2004 STORES REFURBISHMENT 14
An Introduction to ÆON 16 Corporate Information, Directory & Calendar 17 Share Price 18 Five Years Financial Highlights 19 Board of Directors 21 Directors’ Profiles 22 Senior Management 26 Chairman’s Statement 27 Review of Operations 30
CORPORATE GOVERNANCE Statement of Corporate Governance 36 Terms of Reference of Audit Committee 40 The Audit Committee 42 Statement of Internal Control 43 Other Information 44
FINANCIAL STATEMENTS Directors’ Report 46 Balance Sheet 50 Income Statement 51 Statement of Changes in Equity 52 Cash Flow Statement 53 Notes to the Financial Statements 54 Statement by Directors 69 Statutory Declaration Report of the Auditors 70
OTHERS Analysis of Shareholdings 71 List of 30 Largest Shareholders 72 Particulars of Properties 74 JUSCO Stores & Shopping Centers Directory 75 Milestones 76 Notice of Annual General Meeting 77 Notice of Dividend Payment 79 Statement Accompanying Notice of Twentieth Annual General Meeting 80 Proxy Form 81
Note: For your easy reference, in this annual report, “AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.)” is also referred to as “the Company” or “AEON CO. (M) BHD.”
3 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
A CHANGE FOR THE BETTER Announcement Of Company’s Name Change
The Company is pleased to announce that effective from 2 September 2004, the Company has changed its name from Jaya Jusco Stores Bhd. to AEON CO. (M) BHD. (126926-H).
This change of name heralds the creation of a global identity for our Company. The word 'aeon’ has its origins in a Latin word meaning 'eternity'. For us here at ÆON, the word is imbued with a deep sense of purpose. As the Company renews its corporate identity for the 21st century, the Company defines its mission as "creating a future of limitless promise".
Through this change of name, the Company wishes to create a new sense of awareness in its employees for a new beginning, propelling the Company into greater heights. The Company also pledges to fulfill customers' expectations at all times.
However, all AEON CO. (M) BHD. outlets will retain the brand name of JUSCO, which has become part of its stores' and shopping centers’ identity over the years.
AEON CO. (M) BHD. (126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The EGM in progress. Shareholders arriving and registering themselves. Extraordinary General Meeting on 26 August 2004 An Extraordinary General Meeting was held on 26 August 2004 at In addition, the shareholders overwhelmingly passed a special the Nikko Hotel, Kuala Lumpur, to pass a number of resolutions. resolution to change the Company name from Jaya Jusco Stores Bhd. to AEON CO. (M) BHD. This name change was carried out The first ordinary resolution to be passed by the shareholders to create a common identity among the numerous companies of Jaya Jusco Stores Bhd. was for a proposed increase in the under the international ÆON group of companies. authorised share capital of Jaya Jusco Stores Bhd. from RM100,000,000 comprising of 100,000,000 ordinary shares of A similar name change took place in Japan in 2001 when RM1.00 each to RM500,000,000 comprising of 500,000,000 JUSCO Co., Ltd., changed its name to ÆON Co., Ltd., to ordinary shares of RM1.00 each. enhance the image and stature of the Company. The second ordinary resolution to be passed was for a proposed In a press statement, Dato' Abdullah Mohd. Yusof, chairman of bonus issue of 87,750,000 new ordinary shares of RM1.00 each the Company, said that "Following the name change in in Jaya Jusco Stores Bhd. on the basis of one (1) new bonus Malaysia, it is important for the Company to perform better. share for every one (1) existing ordinary share of RM1.00 each More emphasis will be placed on the quality of products, held in Jaya Jusco Stores Bhd. pricing and customer service." An ordinary resolution for proposed shareholders mandate for a new recurrent related party transaction of a revenue or trading nature was also passed.
4 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
JUSCO’S 20TH ANNIVERSARY CELEBRATIONS Celebrating 20 Successful Years In Malaysia
Mr. Okada, Datin Paduka Seri Endon Mahmood and Dato’ Abdullah officiate the Company’s All the guests enjoyed the sumptuous dinner and entertainment . name-change ceremony. The 20th Anniversary Dinner On 15 September 2004, JUSCO celebrated 20 successful As the guests dined, a special video was shown, presenting the and memorable years in Malaysia, with an anniversary gala tree planting ceremony held earlier that day. It was followed by dinner at the Mandarin Oriental Hotel in Kuala Lumpur. The videos of the ÆON group of companies in Japan and Malaysia. Guest of Honour was Datin Paduka Seri Endon Mahmood, the The second highlight was the official ceremony transforming Prime Minister’s wife. the "With All Our Hearts" Charity Fund to the new "With All Members of the top management from our affiliated Company Our Hearts" Malaysian Jusco Foundation, and a lively in Japan, ÆON Co., Ltd. were present, including the Honorary performance by its Ambassador, Siti Nurhaliza. To get the Chairman Mr Takuya Okada, who was instrumental in setting up new Foundation off to a good start, the Company made a JUSCO stores in Malaysia during the early years. pledge to raise RM300,000 to build a "Rumah Tunas Harapan" orphanage home for the Jabatan Kebajikan Masyarakat The first highlight of the night was the announcement of Malaysia (Social Welfare Department of Malaysia). the Company's name change from Jaya Jusco Stores Bhd to AEON CO. (M) BHD. It was also announced that the JUSCO brand name would continue to be used in all the Company's stores and shopping centers in Malaysia.
Let’s Celebrate! A Sale To Remember With this being a significant year, AEON CO. (M) BHD. heavier, extra fleshy, juicier and tests have shown that they decided to tie in their annual sale event with the Company's are 11% sweeter than others. 20th Anniversary Celebrations. The aptly named "Let's In addition to these, the Company has also introduced a range Celebrate Sale!" was held from 15 September till 10 of affordable men's suits. October 2004. A special 20-page advertisement pullout was in The Star newspaper on 14 September to launch the event, announcing all the ensuing events, discounts, J Card privileges, a 2-page advertorial and congratulatory messages from the Company's many business partners. Customers enjoyed big discounts of up to 70% storewide, and for the most loyal customers, the J Card Members, were given additional privileges and exclusive 'members-only' discounts. The Company sourced out a number of items of household merchandise, including Panasonic living room fans, stainless steel pressure cookers, Sally armchairs and contour foam pillows. These "20th Anniversary Edition" merchandise were then offered to J Card Members at once-in-a-lifetime prices. Other 20th Anniversary merchandise included the "morning drop" durian, which is reputedly the best of the crop, and the local dragon fruit from farms in the Kluang district in Johor. These dragon fruit are grown organically, and are
5 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Mr. Takuya Okada signs the plaque. Tun Dr. Mahathir thanks ÆON in his speech. The Malaysia-Japan Friendship Forest plaque. ÆON Woodland Launched by Tun Dr. Mahathir Mohamad On 13 September 2004, the Company held a special dinner in Tun Dr. Mahathir thanked ÆON for making its mark in the honour of Tun Dr. Mahathir bin Mohamad, the former Prime country's economic and social scene. He also hoped that Minister of Malaysia. ÆON would continue to excel.
Mr Takuya Okada, the Honorary Chairman of ÆON Co., Ltd. Tun Dr. Mahathir bin Mohamad was invited to sign a plaque, hosted the dinner for Tun Dr. Mahathir and his wife at the together with Mr Takuya Okada, for the launching of the Waraku Japanese Dining House in Kuala Lumpur. Malaysia-Japan Friendship Forest. This plaque was placed at the forest site, which was named the ÆON Woodland, a special In his speech, Mr Okada expressed his heartfelt gratitude area of about eight hectares set aside in Paya Indah Wetlands. to Tun Dr. Mahathir for inviting ÆON to Malaysia to help modernise the local retail industry, 20 years ago. In turn,
September 2004. October 2004. December 2004.
February 2005. April 2005. Current. ÆON Plants 30,000 Trees in Paya Indah Wetlands In the early morning hours of 15 September 2004, three Okada and AEON CO. (M) BHD. Chairman, Dato' Abdullah thousand Malaysian and Japanese nature enthusiasts gathered bin Mohd. Yusof. in the Paya Indah Wetlands in Dengkil, Selangor, to take part in Besides the 1,000 volunteers, staff members and business the massive tree planting exercise. associates of ÆON Co., Ltd., who had flown in from Japan, the This tree planting ceremony was organised by AEON CO. (M) other 2,000 volunteers from Malaysia came from a mix of BHD. to mark its 20th Anniversary in Malaysia, and strongly customers, school children, suppliers, nature lovers and ÆON supported by the ÆON Environment Foundation. Lending a staff members. All in all, they planted approximately 30,000 hand were the Japanese Ambassador to Malaysia, Mr Tadashi saplings of different tree and shrub varieties, including a Imai, ÆON Environment Foundation Chairman, Mr Takuya number of fruit-bearing trees.
6 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Mr. Okada poses with members of AEON CO. (M) BHD.’s staff. A Special Meeting with Mr Takuya Okada On 16 September 2004, a special meeting was held with its business practices. When there is peace, business Mr Takuya Okada at the Nikko Hotel in Kuala Lumpur. It was will prosper. held in conjunction with the Company's name change from Mr Okada also touched on the early days of ÆON in Malaysia Jaya Jusco Stores Bhd to AEON CO. (M) BHD. and Japan. It is hoped that this will give the Company's staff In his speech, Mr Okada touched on the Company's guiding in Malaysia the impetus to work together and propel the principle of peace, which it follows in carrying out Company to greater heights.
Mr. Okazaki leads the pledge. AEON CO. (M) BHD. staff members recite their pledge. A Re-birth at the Re-entry Ceremony Following the Company's name change, all the Company's new lifestyles. They are more knowledgeable and their staff members in Malaysia underwent a re-entry ceremony on expectations of a leading retailer are greater. 20 September 2004 and looked forward to a new beginning in With the Company's name change, it is hoped that all staff AEON CO. (M) BHD. members would start anew and work hard to meet today's All employees were asked to start afresh in the new Company, challenges. To further promote this new awareness, uniformed in an effort to move forward and take the Company to new staff members were given new uniforms to signal the start of heights. the change. This re-entry ceremony was conducted to ensure staff realise that they now live in a new era. Consumers have less time to shop but want quality merchandise that complements their
7 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
WITH ALL OUR HEARTS From Charity Fund to Malaysian Jusco Foundation Continuing Our Mission With Fervour
The "With All Our Hearts" Malaysian Jusco Foundation was officially launched during JUSCO's 20th Anniversary celebration gala dinner on 15 September 2004. Born from AEON CO. (M) BHD.'s established "With All Our Hearts" Charity Fund, the new foundation continues with its mission: to be continuously involved in fund-raising activities and events for the benefit of deserving Malaysians, especially children.
By becoming a full-fledged Foundation which will be government regulated, the "With All Our Hearts" Malaysian Jusco Foundation Datin Paduka Seri Endon Mahmood launches the new Foundation. will be fulfilling even larger social responsibilities in Malaysia. Our Promise: A Brand New Home for Rumah Tunas Harapan To get the new Foundation off to a running start, AEON CO. (M) BHD. pledged, during the official launch of the Foundation, to raise RM300,000 to set up a "Rumah Tunas Harapan" for the Jabatan Kebajikan Masyarakat Malaysia. "Rumah Tunas Harapan" is an orphanage that will give more Malaysian children the opportunity to live in a positive environment, with the love and care of "parents" in the comfort of a complete home. In conjunction with this significant event, a scale model of the orphanage was presented to representatives of Jabatan Dato’ Abdullah presenting the scale model house. Kebajikan Masyarakat.
First Annual General Meeting
The new "With All Our Hearts" Malaysian Jusco Foundation committee members and the appointment of auditors for held its first Annual General Meeting on 7 March 2005 at the the year 2005. Crown Plaza Mutiara Hotel (formerly known as Mutiara Hotel) in Kuala Lumpur. Amongst the important matters discussed and presented at the AGM was the Committee's report on the activities of the Foundation from the date of its registration on 17 June 2004 till the end of the fiscal year, 31 December 2004. Other matters on the agenda were the reception of the Treasurer's report and audited accounts for the financial year ending 31 December 2004, the election of new The Malaysian Jusco Foundation‘s 1st AGM in progress.
Adopt A Plant In conjunction with the tree planting ceremony at Paya Indah Wetlands by AEON CO. (M) BHD., an "Adopt A Plant For Charity" campaign was held at JUSCO 1 Utama Shopping Center on 28 August 2004 and 4 & 5 September 2004. Potted plants were put up for sale at RM5.00 each. Proceeds from the sale were channeled to the "With All Our Hearts" Malaysian Jusco Foundation to be forwarded to "Rumah Keluarga Kami", an orphanage in Kajang, to assist them with their daily needs. The campaign was held to encourage the public to help our less fortunate children and to spread the message of conserving the environment.
8 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The "With All Our Hearts" Charity Gala Dinner 2004
AEON CO. (M) BHD. has identified a house in Bukit Beruntung, Malaysian Jusco Foundation, who performed some of her hit Rawang, to be the "Rumah Tunas Harapan". It will be renovated songs, as well as the "With All Our Hearts" theme song. and fully furnished before being handed over to the Jabatan Popular artiste Afdlin Shauki was also engaged to perform at Kebajikan Masyarakat Malaysia, who shall be responsible for the function. the daily operations and needs of the home. The "With All Our Hearts" Charity Gala Dinner received a To raise these funds, AEON CO. (M) BHD. organised a "With All tremendous response from customers and business Our Hearts" Charity Gala Dinner, which also coincided with associates of the Company, with every single seat being sold, JUSCO's 20th Anniversary celebrations. raising RM262,006 for the project. The highlight of the Gala Dinner was the appearance of Siti Nurhaliza, ambassador for the "With All Our Hearts"
The "With All Our Hearts" Charity Tour 2004
With the new "With All Our Hearts" Malaysian Jusco Foundation off to a successful start, AEON CO. (M) BHD. has kept the momentum going strongly. The year-end festive season was the perfect opportunity to spread some of the festive joy. In a series of weekend events held at four JUSCO Shopping Centers (JUSCO 1 Utama, Bukit Raja, Alpha Angle and Kinta City) beginning 30 October 2004, the Company invited children from various orphanages for a story- telling session and a sumptuous meal, hosted by Siti Nurhaliza. A "Gift of Hope School Bag" and a shopping allowance of RM100 to spend on festive attire were given to each orphan. The Company also presented festive hampers to the orphanages involved for the festive season.
"Program Sesama Sayang" - Visit To Hospital Melaka
On 25 April 2005, AEON CO. (M) BHD. and Hospital Melaka joined hands in bringing 100 children together to spend some time with Siti Nurhaliza, the "With All Our Hearts" Malaysian Jusco Foundation's ambassador, and to enjoy some genuine love and affection. Held under the "Program Sesama Sayang Khas Bersama Siti Nurhaliza", the children were entertained to a short story telling session by Siti and treated to a bag of healthy goodies each. AEON CO. (M) BHD. looks forward to many more years of serving the less fortunate and disabled Malaysians especially from the surrounding communities in which the Company has operations. Siti enthralls the children with her stories.
9 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
CORPORATE ACTIVITIES Doing Our Part For Society
Food provisions being presented to victims of the tsunami. The cheque being presented to the Star and a letter of acknowledgement.
Relief for Tsunami Victims
AEON CO. (M) BHD. was amongst the first corporations to send A generous total of RM151,436.63 was collected and donated to food provisions to the tsunami victims in Penang and Kedah via the Tabung Bantuan Bencana Negara via the Star newspaper. the local state authorities, including 9,600 bottles of mineral water, At the same time, in Japan, our affiliated company ÆON Co., 9,600 cans of sardines and 10,800 packs of cream crackers. Ltd. and the ÆON 1% Club donated 10 million yen (about In response to numerous requests from JUSCO's customers RM360,000) to the Malaysian Embassy in Japan. All JUSCO and staff members, AEON CO. (M) BHD. held a donation drive Stores and offices in Japan also had a donation campaign for from 31 December 2004 till 9 January 2005 for victims of the the same cause and the funds collected were given through tragic tsunami that hit South Asia on 26 December 2004. UNICEF in Japan.
Biodegradable Plastic Bags
In line with the aim of Japan’s ÆON Environmental Foundation to being environmentally responsible, JUSCO's new Biodegradable Shopping Bag was launched at the JUSCO Bukit Raja Shopping Center on 20 December 2004. Conventional plastic bags is toxic and take hundreds of years to break down. These new shopping bags are made of OxoBiodegradable™ Plastic, which incorporates TDPA® (Totally Degradable Plastic Additives). Such plastics have a controlled lifespan and leave non-toxic residues. They are designed to reduce plastic pollution, in turn reducing landfill volume and greenhouse gases. The ÆON Environmental Foundation was established in 1991 with the primary objective of doing environment conservation work, to "protect and nurture nature". Dato’ Seri Ong Ka Ting officiates the launch of JUSCO’s new biodegradable shopping bag.
Health Campaign with Sedaya College To promote better health awareness amongst members drugs and healthy life. Customers were able to check their of the community, a public health campaign was held at body mass index to determine their ideal weight, as well as JUSCO Taman Maluri in July 2004. It was organised their blood pressure, glucose and cholesterol levels, and together with the School of Pharmacy, University College 'smokerlyzer' tests to determine whether one was a heavy, Sedaya International (UCSI). regular or non-smoker. Different counters were set up to provide various health screening tests, together with an exhibition on medicine,
10 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Reaching Out To Our Customers
Customers selecting from a large variety of local produce ‘fresh from the farm’. Agriculture Mega Sale To commemorate the 100th Anniversary of the Agriculture State Agriculture Departments from all over the country Department, a Mega Sale and Promotion of Agricultural participated in this fair. Customers had the rare opportunity to Produce was held in JUSCO Alpha Angle shopping center from purchase a large variety of local produce direct from the farm. 3 to 6 March 2005. The response was overwhelming as customers clamoured for the most popular items on sale, especially the fresh fruit, cakes The official launch was held on 4 March 2005, and numerous and other traditional products. activities and demonstrations including traditional cake making were held over the four day affair.
Budding Malaysian artists pose with their prizes. The children worked hard at their drawings. National Landscape Day Drawing Contest
"Bunga Raya Semarak Negara" was the theme of this year’s The response to the drawing and colouring contest, which was children's drawing and colouring contest, which was held in held at all our JUSCO shopping centers, was extremely good, conjunction with the National Landscape Day on 13 March 2005. with numerous varieties of our national flower being portrayed National Landscape Day is usually observed every year in March, in many different colours. and it encourages us to appreciate our surrounding environment and the greenery we have been blessed with in this country.
11 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Dato’ Seri Rafidah Aziz sampling the authentic taste of organic prunes. ÆON’s booth at the Eco Fair. Eco Products International Fair
AEON CO. (M) BHD. and its Japanese counterpart ÆON Co., chemicals. This makes them a healthy and great tasting choice Ltd. participated in the Eco Products International Fair at the for customers. Mid Valley Megamall in Kuala Lumpur, from 2 to 4 September ÆON Co., Ltd. displayed a variety of items under its in-house 2004. The Eco Products International Fair has been an annual TopValu, brand from Japan. A new sub-brand of supermarket event in Japan since 1999, and this year in Malaysia, 60 local merchandise, Green Eye, was also introduced to visitors. and foreign companies took part in the exhibition. Samples of one particular Green Eye product, organic prunes, were ÆON presented its locally sourced organic vegetables, which offered to visitors, many of whom enjoyed their authentic taste. are grown in an environment-friendly manner and are free of
The official opening of AEON CO. (M) BHD.’s new headquarters was a simple, elegant affair. A New Name, A Brand New Office The Company's fresh new beginning with its official name Now located at the JUSCO Taman Maluri Shopping Center, our change to AEON CO. (M) BHD. was also the perfect time to new office offers many new, improved facilities for our staff move to a new office. members, including new meeting and conference rooms, comfortable new lounge and waiting areas for our visitors and On 18 April 2005, Mr Soichi Okazaki, our Managing Director, business partners. and Mr Masato Yokoyama, our Executive Director, marked the official opening of our brand new headquarters, in a simple ribbon-cutting ceremony.
12 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
HUMAN RESOURCE ACTIVITIES Continuing To Improve From Within
Our 3rd Batch of Employees Graduate with Distinction
The Institute of Professional Development (IPD), OUM, is one AEON CO. (M) BHD. employees graduated: of the leading schools for adult learning programmes. IPD No. of Graduation Batch students date conducts career development programmes for the employees of AEON CO. (M) BHD. Certificate in Retail Operations 1 88 8 April 2003 Certificate in Retail Operations 2 51 12 Dec 2003 On 10 June 2004, the third batch of graduates in Retail Certificate in Retail Operations 3 49 10 June 2004 Operations had their graduation and certificate presentation ceremony in OUM. It was attended by Mr Soichi Okazaki, AEON CO. (M) BHD. employees current students: Managing Director of AEON CO. (M) BHD., and YBhg Prof Tan Batch No. of students Sri Datuk Dr Anuwar Ali, President/Vice-Chancellor of OUM, Diploma in Management (Retailing) 1 53 who addressed the graduating students. Diploma in Management (Retailing) 2 61 Cik Musliha Abdul Ghani was awarded the President's Prize for Diploma in Management (Retailing) 3 60 outstanding achievement, while Cik Fauziah Mohd Amin won Diploma in Management (Retailing) 4 69 the Managing Director's Prize. Two OUM Scholarship Awards Certificate in Retail Operation 4 31 were also given, to Encik Md Sazali Jazman and Cik Haryati Azis. Certificate in Retail Operation 5 43
"Show & Tell" - Finding Our Best Cashier
The third annual "Show & Tell" Cashier Contest was held from Customers were asked to fill in a contest form after making a 1 October to 31 December 2004, followed by a Grand Cashier purchase, for the opportunity to win JUSCO Gift Vouchers Service & Skill Tournament 2005 on 26 February 2005, at the worth up to RM200. The response was very encouraging, with Cititel Mid Valley, Kuala Lumpur. over 144,000 customers votes collected. The tournament, first of its kind in Malaysia, was launched The best cashier from each of our 11 JUSCO Stores was in 2003. Thanks to the overwhelming response, it is now chosen for the Tournament, which was judged by a panel of being held annually as part of the Company's efforts to reputable government and NGO officials and personnel. The upgrade customer service and upholds the Company's eventual champion this year was 26-year-old Encik Ali Yunus Customer First policy. from JUSCO Taman Maluri.
13 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
DEVELOPMENTS 2004: BRAND NEW JUSCO SUPERMARKETS Leading The Way In Freshness And Variety
JUSCO Ipoh’s fresh leafy vegetables are very popular.
Fresh fruits on display. Products are displayed in easy-to-find rows.
JUSCO Ipoh boasts the largest selection of international wines and non-halal foodstuff. The new-concept Health and Beauty Care department. JUSCO Ipoh In our continuous efforts to modernise our stores with the latest canned food and fresh take-away dim sum, prepared by the retailing concepts, and enhance our customers' shopping most famous dim-sum shop in Ipoh. experience, the Company has embarked on a program to One of the highlights of the new Supermarket is the Wet upgrade our JUSCO Supermarkets. Market section, offering daily 'fresh-from-the-sea' food and JUSCO Ipoh's new Supermarket is now double its previous size perishable items at regular wet-market prices. and was given a soft opening on 6 January 2005. One of the In addition, the entire second floor of JUSCO Ipoh was new sections is Palette, the wine shop. With a sales area that renovated, and now offers a bigger Golf Equipment section, is 3 times its previous size, it offers Ipoh's largest assortment of Electrical department, a mini-Home Centre, a section international wines, displayed by country of origin. dedicated to Flowers & Handicraft, and a Contemporary Home Deli Town is a new-concept deli section that sells non-halal Fashion department. foodstuff, including ham, sausages, meat floss, barbecue pork,
14 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
JUSCO Wangsa Maju’s new fresh vegetable, meat and Health and Beauty Care sections. JUSCO Wangsa Maju The new Supermarket at JUSCO Wangsa Maju opened on 30 system to keep the leafy vegetables fresh, and a new-concept October 2004. The new JUSCO Wangsa Maju Supermarket Health & Beauty Care department, plus new fresh fish, sushi has an Open Kitchen concept for better hygiene, a misting and Delica sections, as well as additional cashier counters.
The new misting system keeps the vegetables fresh.
A new Delica corner, new displays and live fish aquariums. JUSCO Bandar Baru Klang The new supermarket at JUSCO Bandar Baru Klang re-opened aquariums, a sushi section and a Delica section. In addition, for on 5 August 2004. Some of the enhancements included the new fast comfortable service, there are now 18 cashier counters and Open Kitchen concept for better hygiene, a misting system, a business hours have been extended till 11pm daily. new-concept Health & Beauty Care department, live fish
15 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
An Introduction to ÆON
AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores ÆON’s stores are mostly situated in suburban residential Bhd.) is a leading retailer in Malaysia with a total revenue of areas, catering to the vast middle income group. RM1.78 billion in the financial year under review. The Company The ÆON group of companies consists of ÆON Co., Ltd., and was incorporated on 15 September 1984. AEON CO. (M) BHD. more than 100 consolidated subsidiaries and affiliated companies. was set up in response to the Malaysian Government’s In addition to its core general merchandise stores (GMS) plus its invitation to ÆON Japan to help modernise the retailing supermarket and convenience store operations, ÆON is also industry in Malaysia. The ‘JUSCO’ name today is well active in specialty store operations, shopping center development, established among Malaysians as well as foreigners, operations and services as well as other operations. especially due to its association with the international ÆON group of companies. ÆON group of companies is an integrated Japanese retailer and is active not only in Japan but also in Southeast Asia, China ÆON has established itself as a leading chain of general and North America. merchandise stores. ÆON’s constant interior redecoration of stores, to project an image designed to satisfy the ever At all times, in every market, ÆON's activities are guided by changing needs and desires of consumers, is clear evidence of the unchanging 'Customer First' philosophy. Its aim is to this. The Company’s performance has been further enhanced surpass expectations by combining excellent products with by the management’s acute understanding of target market unique personal services that enhance the shopping needs and the provision of a correct product-mix. experience to make the customers smile every time they shop.
OUR PRINCIPLE regardless of how times may have changed, is 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. OUR STRATEGY is to establish a solid competitive position and achieve continuous growth. Two key components underlying this strategy are: • Accelerating Shopping Center Development. We are channeling our resources towards developing attractive, integrated commercial facilities which our customers can fully enjoy, such as regional shopping center and Our guiding principle has always been to serve the ‘Customer First’. neighbourhood shopping center. This segment also involves leasing shopping space and facilities to tenants. • Aggressive Pursuit of GMS Stores. Our General Merchandise Stores (GMS), which combine supermarkets and departmental stores under one roof, operate as full-line retailers. Products offered range from food and other daily necessities, apparel and household goods (including bedding and bathroom products) to specialised products such as home appliances, sporting goods and cosmetics. OUR GOAL is to operate as an “international-scale retailing group”, recognised for excellence not only in Japan, but also in other nations. The international recognition we are working to achieve is not one which can be measured merely in quantifiable terms Mr. Okazaki and ÆON staff members help to paint Rumah Titian of size, growth and profitability. We hope to be competitive at the global level in Kasih, a home for single mothers and abandoned children. intangible aspects such as customer satisfaction and corporate citizenship. We are dedicated to the idea of “quality management” to further enhance our capabilities.
16 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Corporate Information and Directory Corporate Calendar
Board of Directors May 2004 • Dato’ Abdullah bin Mohd Yusof (Chairman) Notice of Annual General Meeting • Mr. Toshiji Tokiwa 24 May 2004 • Mr. Soichi Okazaki June 2004 • Mr. Masato Yokoyama • Mr. Tatsuichi Yamaguchi Annual General Meeting • Encik Ramli bin Ibrahim 15 June 2004 • Brig. Jen. (B) Dato’ Mohd Idris bin Saman July 2004 • Datuk Zawawi bin Mahmuddin • Dato’ Chew Kong Seng Payment of Dividend • Mr. Nagahisa Oyama (Alternate Director to Mr. Soichi Okazaki) Book Closure – 5 July 2004 Payment – 22 July 2004 Secretaries Quarterly Results Announcement • Tai Yit Chan (MAICSA 7009143) 1st Quarter – 23 July 2004 • Saw Bee Lean (MAICSA 0793472) August 2004 Registered Office Notice of Extraordinary General Meeting 3rd Floor, JUSCO Taman Maluri Shopping Center, 3 August 2004 Jalan Jejaka, Taman Maluri, Extraordinary General Meeting Cheras, 55100, 26 August 2004 Kuala Lumpur. Tel: 03-9207 2005 September 2004 Fax: 03-9207 2006 / 03-9207 2007 Corporate Name Change 2 September 2004 Auditors Corporate Name Change Announcement KPMG Desa Megat & Co. (AF0759) 6 September 2004 Chartered Accountants, Wisma KPMG, Stock Code Name Change Jalan Dungun, 13 September 2004 Damansara Heights, Bonus Issue Book Closure Announcement 50490 Kuala Lumpur. 13 September 2004 Bonus Issue Book Closure Date Registrars 30 September 2004 Tenaga Koperat Sdn. Bhd. (118401-V) 20th Floor, Plaza Permata, Jalan Kampar, October 2004 Off Jalan Tun Razak, Bonus Issue Allotment 50400 Kuala Lumpur. 13 October 2004 Tel: 03-40416522 Bonus Shares Listing Fax: 03-40426352 18 October 2004 Stock Exchange Listing Quarterly Results Announcement The Company is a public listed company, incorporated and 2nd Quarter – 20 October 2004 domiciled in Malaysia and listed on the Main Board of the Bursa January 2005 Malaysia Securities Berhad. Quarterly Results Announcement Homepage 3rd Quarter – 19 January 2005 http://www.jusco.com.my April 2005 Principal Bankers Change of Registered Office - Effective Date • Bank of Tokyo-Mitsubishi (Malaysia) Berhad 11 April 2005 (302316-U) Quarterly Results Announcement • Malayan Banking Berhad (3813-K) 4th Quarterly – 28 April 2005 • Bumiputra Commerce Bank Berhad (13491-P)
17 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Share Price Stock Code: 6599 Stock Name: AEON
2004 / 2005 Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb
High (RM) 5.90* 5.90* 5.80* 5.60* 5.55* 5.50* 5.50* 5.45 4.92 4.98 5.05 4.98 Low (RM) 5.50* 5.60* 5.40* 5.20* 5.45* 5.30* 5.30* 4.80 4.80 4.88 4.96 4.90 Volume (‘000) 5172 2423 4533 1117 1702 1208 758 5272 4066 3342 5569 443
RM Vol (‘000) 7. 0 0 6000
6.00 5000
5.00
4000
4.00
3000
3.00
2000
2.00
1000 1.00
0.00 0 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘05 ‘05
High (RM) Low (RM) Volume
*Note: Share price per share has been adjusted for the bonus issue undertaken by the Company during the year.
18 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Five Years Financial Highlights
For Five Years - As at 28 & 29 February 2005 2004 2003 2002 2001 RM’000 RM’000 RM’000 RM’000 RM’000 Income Statement Revenue 1,784,564 1,523,781 1,368,268 1,200,636 990,006 Retailing 1,648,475 1,406,242 1,262,851 1,107,158 909,775 Property Management Services 136,089 117,539 105,417 93,478 80,231 Profit before taxation 99,010 96,288 90,833 80,327 69,390 Profit after taxation 64,247 63,588 60,545 53,989 46,037 Net dividend 15,163 12,636 12,636 12,636 12,636
Balance sheet Property, plant and equipment 756,335 692,850 561,221 508,630 517,818 Investment 175 175 175 175 175 Current assets 258,336 259,344 225,489 188,541 218,075 Current liabilities (426,607) (415,719) (304,986) (263,379) (332,810)
588,239 536,650 481,899 433,967 403,258
Financed By
Share capital 175,500 87,750 87,750 87,750 87,750 Retained profits 333,536 281,408 229,939 175,767 134,414 Revaluation reserve 34,165 34,682 35,199 55,352 55,352 Share Premium 20,609 108,488 108,488 108,488 108,997 Shareholders' funds 563,810 512,328 461,376 427,357 386,513 Long term liabilities - ---10,135 Deferred taxation 24,429 24,322 20,523 6,610 6,610
588,239 536,650 481,899 433,967 403,258
Statistics Net earnings/(loss) per share (sen) 36.6 36.2* 34.5* 30.8* 34.1* Gross dividend per share (%) 12 20 20 20 20 Net tangible assets per share (RM) 3.21 5.84 5.25 4.87 4.40
* The earnings per share for current year is 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 during the year.
19 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Revenue
RM million
2,000
1,784.6
1,750
1,523.8 1,500
1,368.3
1,250 1,200.6
1,000 990.0
750
500
250
0 00/01 01/02 02/03 03/04 04/05 Financial Year
Profit Attributable to Shareholders
RM million
70 64.2 63.6 60.5 60
53.9 50 46.0
40
30
20
10
0 00/01 01/02 02/03 03/04 04/05 Financial Year
20 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Board of Directors
(Seated from left to right) (Standing from left to right)
Mr.Toshiji Tokiwa Brig. Jen. (B) Dato’ Mohd Idris bin Saman Non-Independent Non-Executive Independent Non-Executive Director Vice Chairman Mr.Tatsuichi Yamaguchi Dato’ Abdullah bin Mohd Yusof Non-Independent Non-Executive Director Non-Independent Non-Executive Chairman Dato’ Chew Kong Seng Independent Non-Executive Director Mr. Soichi Okazaki Managing Director Datuk Zawawi bin Mahmuddin Independent Non-Executive Director
Encik Ramli bin Ibrahim Non-Independent Non-Executive Director
Mr. Masato Yokoyama Executive Director
21 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Directors’ Profiles
Dato’ Abdullah bin Mohd Yusof (66), Mr.Toshiji Tokiwa (65), (Malaysian) Non-Independent (Japanese) Non-Independent Non-Executive Chairman Non-Executive Vice Chairman
Dato’ Abdullah bin Mohd Yusof was Mr. Toshiji Tokiwa was appointed a Non- appointed the Chairman of AEON CO. Executive Vice Chairman of AEON CO. (M) BHD. (formerly known as Jaya Jusco (M) BHD. (formerly known as Jaya Stores Bhd.) on 26 October 1984. He Jusco Stores Bhd.) on 16 June 2000. holds a Bachelor of Law (Honours) from He holds a Bachelor of Law degree University of Singapore, which he from Keio University, Japan, which he obtained in 1968. He has more than thirty obtained in 1963. He joined The Dai-Ichi (30) years of experience as an Advocate Kangyo Bank Ltd., in 1963 as a & Solicitor. He started his career with Skrine Management Trainee. In 1993, he was & Co., as a Legal Assistant in 1968 before promoted to the position of Director starting his own partnership under the and General Manager of the New York name of Tunku Zuhri Manan & Abdullah, Branch of The Dai-Ichi Kangyo Bank Advocates & Solicitors in 1969 and Ltd., in New York, USA. Subsequently, subsequently renamed the law firm to he was the Senior Managing Director Abdullah & Zainudin, Advocates and of The Dai-Ichi Kangyo Bank Ltd., in Solicitors. He sits on the Board of Japan from 1995 to 1996. He joined Directors of MMC Corporation Berhad Chuo Real Estate Co. Ltd., a company (formerly known as Malaysia Mining principally involved in the leasing and Corporation Berhad), Tronoh Consolidated management of office building, as the Malaysia Berhad (formerly known as President and CEO from 1996 to 2000 Tronoh Mines Malaysia Berhad), and was also a Non-Executive Tradewinds Corporation Berhad (formerly Corporate Auditor of Fujitsu General known as Pernas International Holdings Co. Ltd., from 1997 to 2000. He joined Berhad) and IJM Berhad, all of which are ÆON Co., Ltd. as a Non-Executive companies listed on the Bursa Malaysia Director in 1999 and was subsequently Securities Berhad. and sits on the Board appointed as the Chairman of ÆON of Directors of several private limited Co., Ltd. in 2000. Mr. Toshiji Tokiwa has companies. He is a member of the attended four (4) out of the five (5) Remuneration & Nomination Committee of Board meetings held in the financial the Board. Dato’ Abdullah bin Mohd Yusof year. He does not hold any shares in has attended all the five (5) Board meetings the Company. held in the financial year. He holds 308,000 ordinary shares directly and 7,620,000 ordinary shares indirectly in the Company.
Note : Save as disclosed in this annual report, all the Directors mentioned on pages 22 to 25 have no conflicts of interest with AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores 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.
22 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Mr. Soichi Okazaki (46), Mr. Masato Yokoyama (52), (Japanese) Managing Director (Japanese) Executive Director
Mr. Soichi Okazaki was appointed the Mr. Masato Yokoyama was appointed Managing Director of AEON CO. (M) an Executive Director of AEON CO. (M) BHD. (formerly known as Jaya Jusco BHD. (formerly known as Jaya Jusco Stores Bhd.) on 19 June 2001. He holds Stores Bhd.) on 26 October 2001. He a Bachelor of Arts in Commerce from holds a Bachelor of Arts in Commerce Toyo University, in Japan, which he from Waseda University in Japan, obtained in 1981. He has more than which he obtained in 1976. He joined twenty (20) years of experience in the ÆON Co., Ltd. in 1976 and was the retail industry. He joined ÆON Co., Ltd. Store Manager of Ishioka Store prior to of Japan in 1981 and has worked in his secondment to AEON CO. (M) several Asian countries. From 1990 to BHD. (formerly known as Jaya Jusco 1995, he was attached to Jusco Stores Stores Bhd.) in 1993. Mr. Yokoyama (Hong Kong) Co. Ltd. In 1995 to 1998 he held the position of Store Manager of was a Director of Guangdong Jusco JUSCO Taman Maluri from 1993 to Teem Stores Co. Ltd. in China. He was 1998. He was promoted to become the seconded to AEON CO. (M) BHD. Senior Softline Merchandising Manager (formerly known as Jaya Jusco Stores from 1998 to 1999 and the Senior Bhd.) in 1998 to be in charge of Operations Manager from 1999 to Marketing, Business Development, Store 2000. Currently, Mr. Masato Yokoyama is Operations and Shopping Center the Executive Director in charge of Store Management. Mr. Okazaki initiated Operations, Human Resource, Finance, several successful business strategies, Shopping Center Management, Shopping which has contributed to the growth of Center Development, Administration and AEON CO. (M) BHD.’s (formerly known Security. Mr. Masato Yokoyama has as Jaya Jusco Stores Bhd.) performance attended all the five (5) Board meetings in particular during the Asian financial held in the financial year. He holds 30,000 crisis in 1997 - 1998. He is also a ordinary shares directly in the Company. Director of Laura Ashley (Malaysia) Sdn. Bhd. Mr. Soichi Okazaki has attended all the five (5) Board meetings held in the financial year. He holds 30,000 ordinary shares directly in the Company. The Alternate Director for Mr. Soichi Okazaki is Mr. Nagahisa Oyama.
23 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Mr.Tatsuichi Yamaguchi (59), Encik Ramli Bin Ibrahim (64), Brig. Jen. (B) Dato’ Mohd Idris (Japanese) Non-Independent (Malaysian) Non-Independent bin Saman (60), Non-Executive Director Non-Executive Director (Malaysian) Independent Non-Executive Director
Mr. Tatsuichi Yamaguchi was appointed Encik Ramli bin Ibrahim was appointed a Brig. Jen. (B) Dato’ Mohd Idris bin a Non-Executive Director of AEON CO. Non-Executive Director of AEON CO. Saman was appointed a Non-Executive (M) BHD. (formerly known as Jaya (M) BHD. (formerly known as Jaya Director of AEON CO. (M) BHD. Jusco Stores Bhd.) on 23 July 2003. He Jusco Stores Bhd.) on 20 August 1996. (formerly known as Jaya Jusco Stores graduated from Meiji University, Japan He is a member of the Malaysian Bhd.) on 16 June 2000. He holds a Post majoring in Management, which he Institute of Accountants and a Fellow of Graduate Diploma in Management obtained in 1969. He joined ÆON Co., the Australian Institute of Chartered Studies from the Slough College, Ltd. in 1969 and was promoted as the Accountants. He was attached to KPMG United Kingdom, which he obtained in Store Manager of Toyohashi store, Peat Marwick (“KPMG”) (now known as 1980. He was a graduate of the Air Japan in 1980. In 1986 he was KPMG) in Australia, United Kingdom and Command & Staff College, Maxwell, seconded to Kornhill store of Jusco Malaysia from 1959 to 1995. He was USA and the Armed Forces Defence Stores (Hong Kong) Co., Ltd., where he appointed a Partner of KPMG Malaysia in College, Kuala Lumpur. He joined the was appointed as the Deputy Store 1971. In 1989, he was made the first Royal Malaysian Air Force as a Pilot Manager, and subsequently appointed bumiputera Senior Partner of KPMG Officer in 1965 and he served the Royal a Director and the Managing Director of Malaysia. He also served on the Boards Malaysian Air Force for thirty-five (35) Jusco Stores (Hong Kong) Co., Ltd., in of KPMG International and KPMG Asia years, in various executive positions 1988 and 1990 respectively. He was Pacific from 1990 to 1995. He retired within its Logistic Branch. He retired appointed a Director of ÆON Co., Ltd. in from KPMG Malaysia in 1995. From from the Royal Malaysian Air Force in 1996 and held the position of Director December 1995 to December 2000, he 2000 as the Assistant Chief of the Air and General Manager (Apparel) served as Executive Chairman of Kuala Force (Material). He is currently the Merchandising Division in 1997. In 2000 Lumpur Options & Financial Futures Executive Chairman of Diversified Jet he assumed the position of Director & Exchange Berhad. Currently, he sits on Sdn. Bhd., a company principally General Manager, Chubu Regional the Board of Directors of Ranhill Berhad, involved in the supply of materials and Company and currently holds the Measat Global Berhad and several other services to the Malaysian Armed position of Senior Vice President, Asia unlisted public and private limited Forces. He is also a Director of Affin Operations, ÆON Co., Ltd. Mr. Tatsuichi companies including HSBC Bank Fund Management Sdn. Bhd. Dato’ Yamaguchi is also the Chairman of Malaysia Berhad & Malaysia National Mohd Idris bin Saman is a member of the Nomination and Remuneration Insurance Berhad. He is also a member the Audit and Nomination Committees Committees of the Board. Mr. Tatsuichi of the Audit and Remuneration of the Board. Dato’ Mohd Idris bin Yamaguchi has attended all five (5) Committees of the Board. Encik Ramli Saman has attended all the five (5) Board Meetings during his term in bin Ibrahim has attended four (4) out of Board meetings held in the financial office for the financial year. He does not the five (5) Board meetings held in the year. He does not hold any shares in hold any shares in the Company. financial year. He holds 280,000 ordinary the Company. shares indirectly in the Company.
24 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Datuk Zawawi bin Mahmuddin (59), Dato’ Chew Kong Seng (67), Mr. Nagahisa Oyama (50), (Malaysian) Independent Non- (Malaysian) Independent Non- (Japanese) Alternate Director to Executive Director Executive Director Mr. Soichi Okazaki
Datuk Zawawi bin Mahmuddin was Dato’ Chew Kong Seng was appointed a Mr. Nagahisa Oyama was appointed appointed a Non-Executive Director of Non-Executive Director of AEON CO. the Alternate Director to Mr. Soichi AEON CO. (M) BHD. (formerly known as (M) BHD. (formerly known as Jaya Jusco Okazaki on 28 April 2005. He holds Jaya Jusco Stores Bhd.) on 23 July 2001. Stores Bhd.) on 23 July 2001. He is a a Bachelor's Degree in Business Fellow of the Institute of Chartered Management from Kinki University, He holds a Bachelor of Arts (Honours) Accountants in England and Wales, a Japan, which he obtained in 1977. He Degree from the University of Malaya, Member of the Malaysian Institute of joined ÆON Co., Ltd. in 1977 as a which he obtained in 1968. Datuk Zawawi Accountants and the Malaysian Institute Management Trainee and was joined the Administrative and Diplomatic of Certified Public Accountants. He was a promoted to be Softline Merchandiser Service and began his career as an tax officer in the Inland Revenue in 1980. He was seconded to Siam Administrative Officer in the Ministry of Department in the United Kingdom and Jusco, Thailand to set up the GMS Transport in 1968. From 1970 to 1975 he then joined Stoy Hayward & Co., in the Merchandising Division. Following his served as private secretary to the Deputy United Kingdom from 1964 to 1970. He appointment at Siam Jusco, Thailand, Prime Minister and thereafter held various returned to Malaysia and joined Turquand from 1989 to 1991, he was promoted positions in the Cabinet Secretariat of the Young & Co. (now known as Ernst & to become the General Manager of Prime Minister‘s Department from 1975 Young) and was subsequently transferred Tonami Regional Shopping Center in 1991. Mr. Oyama was next appointed to 1990. His subsequent appointments to Sarawak office in 1973, first as Manager in-charge and later as Partner as the General Manager of Kaga were as follows:- Federal Secretary in in-charge. He was appointed as the Regional Shopping Center in 1996. He Sarawak (1990 - 1992), Deputy Secretary Managing Partner of Ernst & Young from served as General Manager of Kochi General 1, Ministry of Home Affairs (1992 1990 to 1996. Currently, Dato’ Chew is an Regional Shopping Center from 2000 - 1994), Secretary General, Ministry of Executive Director of Sarawak Enterprise to 2002. In 2002, he was promoted to Information (1994 - 2000). Datuk Zawawi Corp. Bhd. He is a Director of Great Wall become the Regional General was formerly on the Board of Syarikat Plastic Industries Berhad, GuocoLand Manager of Higashi Mikawa and Explosive Malaysia Sdn. Bhd. (SME), (Malaysia) Berhad (formerly known as Shizuoka Prefecture, Japan, where he National Film Development Corporation Hong Leong Properties Berhad), PBA was in charge of the overall planning, (FINAS), Governing Council, Bernama and Holdings Bhd and Encorp Berhad. He is opening and operations of three (3) Sukom Ninety Eight Bhd. He is currently also a Director and the Audit Committee new Regional Shopping Centers and the operations of seven (7) existing a director of a few private limited Chairman of Petronas Dagangan Berhad and Industrial Concrete Products Bhd. Regional Shopping Centers in the companies and the Chairman of Two and is a Director and a member of the Shizuoka Prefecture. Mr. Nagahisa Advertising Sdn. Bhd. and Northport Audit Committee of Petronas Gas Oyama does not hold any shares in Distripark Sdn. Bhd. He is also a member Berhad. Dato’ Chew is the Chairman of the Company. of the Nomination Committee of the the Audit Committee and a member of Board. Datuk Zawawi bin Mahmuddin has the Nomination Committee of the Board. attended all the five (5) Board meetings Dato’ Chew Kong Seng has attended all held in the financial year. He does not hold the five (5) Board meetings held in the any shares in the Company. financial year. He does not hold any shares in the Company.
25 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Senior Management
(Seated from left to right) (Standing from left to right)
Mr. Soichi Okazaki Mr. Poh Ying Loo Managing Director General Manager Finance
Ms. Chong Swee Ying Encik A. Rashid bin Adam General Manager Shopping Centre Management General Manager Corporate Affairs & New Business Development Lt. Col (R) Yaacob bin Mahmud Puan Nur Qamarina Chew General Manager Logistics & Loss Control General Manager Store Operations & Customer Care Mr.Takeshi Kodama General Manager Merchandising Puan Noryahwati Mohd. Noh General Manager Human Resource, Mr. Kenji Fujita Administration & DOSH General Manager SC Development
Mr. Masato Yokoyama Executive Director
26 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Chairman’s Statement
At The Threshold Of A New Era In Retailing
On behalf of the Board Of Directors, I am pleased to present patronage through specially sourced merchandise offered at AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores special prices. Bhd) Annual Report and Audited Financial Statements for the In conjunction with the 20th Anniversary celebrations, a special financial year ended 28 February 2005. tree planting ceremony was held on 15 September 2004. Over 30,000 saplings were planted in Paya Indah Wetlands by the Change Of Name Company's employees, schoolchildren, non-governmental First of all, it is my pleasure to share with you the sentiments bodies and volunteers from Japan, consistent with the following the change of name for the Company from Jaya Company's philosophy and corporate citizenship efforts. Jusco Stores Bhd. to AEON CO. (M) BHD. on 2 September 2004. The change of name is in line with the creation of a In connection with this, we wish to record our thanks to Y.A.B. common identity among the numerous companies under the Tun Dr. Mahathir Mohamad for his guidance on this project and ÆON group of Japan. for graciously attending a dinner of appreciation hosted by Mr. Takuya Okada. The word 'aeon' has its origins in Latin meaning 'eternity' and imbued the Group with a deep sense of purpose to create a The 20th Anniversary celebrations culminated in a spectacular future of limitless promise. Through this change of name, the anniversary gala dinner on the night of 15 September 2004 in Company wishes to create a new sense of awareness Kuala Lumpur, graced by Guest of Honour, Datin Paduka Seri amongst its employees for a new beginning, propelling the Endon Mahmood, the Prime Minister's wife. Company towards greater heights while fulfilling customers' expectations at all times. Financial Review The year under review, despite tougher competition, was a On the international front, the ÆON name gives the ÆON successful year for the Company. Together with its two new group of companies a global identity that is recognisable stores in Permas Jaya, Johor Bahru and Metro Prima, Kuala worldwide so it can rise up to the challenges of globalisation in Lumpur, which operated for a full year in the year under review, the retail industry. and the overall better performance of the Company’s existing All our outlets, however, will continue to be known by the stores, the Company registered a revenue of RM1.784 billion familiar brand name of JUSCO, which all our valued customers for the year ended 28 February 2005, representing a 17.1% have grown accustomed to, and all our stores and shopping increase over the previous financial year's performance. centers have been identified with over the years. At the earnings level, despite the heavy initial operating 20th Anniversary In Malaysia expenses for the new stores the Company, for the year ended 28 February 2005, was able to register a profit before tax of The official Company's name change also coincided with RM99.01 million, which is 2.8% higher compared to the the Company's 20th Anniversary, which was launched on previous financial year. The Company registered a profit after 8 April 2004. To celebrate these 20 successful and tax of RM64.25 million, which is 1.0% higher than that of the memorable years of operations in Malaysia, many exciting previous year. activities, promotions, sale and community activities were organised throughout the year. The Company also took this During the year under review, the Company undertook a Bonus opportunity to thank its loyal customers for their continued Issue exercise to increase its share capital from 87,750,000
27 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
shares to 175,500,000 shares so as to better reflect the The existing stores' good performance was also due to the Company's level of operations and also to reward its valued Company's continuous efforts to ensure that its stores shareholders for their continuous support. The Bonus Issue continue to appeal to its customers and stay ahead of the involved capitalizing RM87,750,000 out of the share premium competition. Major renovations and refurbishment were account of the Company which stood at RM108,488,040 based carried out in supermarkets and general merchandise areas of on the audited accounts as at 29 February 2004. JUSCO Bandar Baru Klang, JUSCO Wangsa Maju and JUSCO Correspondingly, to accommodate the increase in the issued Ipoh in the year under review. In particular, JUSCO Ipoh’s and paid up share capital of the Company, the authorized share supermarket included a new wet market that offers customers capital of the Company, at RM1 per ordinary share, was also the opportunity to shop in a traditional wet market increased from RM100,000,000 to RM500,000,000. The whole environment. It also offers greater variety and more affordable exercise was completed with the listing of the Bonus Issue merchandise in a more conducive and clean shopping shares on the Bursa Malaysia on 14 October 2004. environment. All the newly renovated supermarkets also feature a new open kitchen concept, new-concept health and The earnings per share of the Company for the year ended 28 beauty care section, bigger and better green leafy vegetable February 2005 is at 36.6 sen per share based on the enlarged section and much more extensive variety and assortment of share capital. The comparative earnings per share for the other merchandise. previous financial year adjusted based on the enlarged share capital is 36.2 sen per share. The Company's continuing efforts to develop new business concepts, to provide variety and counter competition especially Review Of Operations from specialty stores have been successful. The Company The retail industry continued to be very competitive in the year introduced its new Home Centre category, which provides under review as new specialty stores, hypermarkets and equipment, materials, ideas and services for home and do-it- shopping centers opened. Aggressive promotions and pricing yourself enthusiasts; its family-oriented amusement centre strategies were employed as each and every retailer sought to business named Smart Wonder World; a stand alone denim increase their revenue and market share. shop; and also a specialty restaurant. The new businesses have enabled the Company to not only increase its revenue but also The year under review is also the twentieth year that the to further gain experience and market knowledge for long-term Company has been in operation in Malaysia. Its long benefits. The Company believes that these businesses have established presence here has allowed the Company to great potential and has plans to expand them to its other exploit its competitive strengths, gained over the years, to existing and new stores and shopping centers. maintain a leading position in Malaysia's retail industry. The Company's understanding of customers' preferences and The Company's property management division, for the year tastes, timely refurbishment of its stores, superior customer under review, continued to register steady income growth with service and maintenance of a strong loyalty programme a performance of RM136.1 million, which represents a 15.8% continue to ensure that the Company enjoys good revenue increase compared to RM117.5 million in the previous growth as reflected in the Company's 17.2% increase in retail corresponding year. Besides the continuous high occupancy sales for the year under review. rate of 99% which the Company's shopping centers enjoyed throughout the year under review, the higher income was also The growth for the year under review has come from both the due to the additional full year's contribution from new tenant new stores and existing stores. The existing stores, excluding spaces in the Company's two new shopping centers at Metro JUSCO Home Centre and the two new stores of JUSCO Permas Prima, Kepong and Permas Jaya, Johor Bahru. During the year, Jaya and JUSCO Metro Prima, which operated for a full year in the shopping centre management also took steps towards the year under review, registered a commendable growth of improving the tenant mix and ensuring that its shopping 5.3% on a same store basis. centers were properly managed, maintained and remains With the exception of its stores in Bandar Utama and Wangsa appealing to customers. Maju, all the Company's other existing stores registered a growth of between 3.7% to 16.7% for the year under review. Corporate Citizenship The combined performance of the JUSCO Bandar Utama store I am pleased to report that in the year under review, the and the new JUSCO Home Centre also recorded a growth of Company's "With All Our Hearts" Charity Fund program was 3% over the previous year's performance. transformed into a foundation named Yayasan Jusco Malaysia JUSCO Permas Jaya's performance was within expectation, (Malaysian Jusco Foundation), to further enable the Company and even though JUSCO Metro Prima performed slightly to play its role of being a good corporate citizen. Through the below expectation in its first year of operation, the full-fledged foundation, the Company will be able to actively management remains confident of the store's potential and involve itself in fulfilling its social responsibilities toward the believes that it will grow further in the years to come. various communities in Malaysia, especially the young and
28 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
needy. The foundation successfully raised RM262,000 through The Board wishes to also express their sincere thanks to all a charity gala dinner, which will be used for setting up an our valued shareholders, business associates, bankers, orphanage named “Rumah Tunas Harapan” that will give government authorities and most of all, our customers for their selected orphaned Malaysian children the opportunity to live continuing support to the Company. and enjoy an upbringing in a homely and positive environment. The Board would also like to record a special thanks to AEON CO. (M) BHD. was also amongst the first to respond to Datin Paduka Seri Endon Mahmood for her gracious presence the tragic tsunami incident on 26 December 2004 by sending at our spectacular anniversary gala dinner on the night of food provisions and fresh water to the victims in Penang and 15 September 2004 and for officially launching the Company's Kedah. The Company organised a donation drive and a total of 20th Anniversary Celebrations together with the Honorary RM151,436 was collected from JUSCO's customers and staff Chairman and Adviser of ÆON Co., Ltd., Mr Takuya Okada. members for the Tabung Bantuan Bencana Negara.
Over in Japan, our affiliated company ÆON Co., Ltd. and the ÆON 1% Club donated the equivalent of about RM360,000 in yen for the victims, and JUSCO stores and offices in Japan also held donation drives to further assist the Tsunami victims.
Future Prospects and Challenges DATO' ABDULLAH BIN MOHD YUSOF On the whole, the Company continues to face a very CHAIRMAN challenging environment with ever-increasing competition from new hypermarkets as well as new retail players and specialty retail stores. Most retailers, especially the hypermarkets, have made aggressive pricing strategies their main thrust. Though the Company is able to, and often does, offer comparable or better pricing for its merchandise, it remains focused on its policy of "Customer Comes First". Thus the Company will continue to enhance its competitive edge by ensuring that its customers are given value for their money, and are provided with superior customer service, facilities and conveniences, at all its outlets. Continuous refurbishment of its existing stores, revamping and enhancing its customer loyalty program, expanding its successful new businesses, strengthening store operations and developing its human resources will be key strategies that the Company will focus on.
On its expansion, the Company will continue to source for potential locations in fast-growing suburban areas throughout Malaysia. The Company will be establishing a new store in Seremban in the coming year. Other developments are also in progress and will be announced at the appropriate times.
With continuing strong domestic growth, stable political climate and favourable economic prospects, the Company expects its performance for the coming year to be better.
Dividend The Board Of Directors has recommended for your approval a first and final dividend of 12% less income tax of 28% for the year ended 28 February 2005.
Acknowledgement On behalf of the Board Of directors, I wish to take this opportunity to thank my fellow directors, the management and staff members for their efforts in taking the Company through a very challenging year.
29 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
REVIEW OF OPERATIONS A Challenging But Fulfilling Year
JUSCO Permas Jaya operated for a full year in the year under review.
Robust growth of the Malaysian economy was sustained in operated for a full year in the year under review, the Company 2004. Stronger domestic demand driven by private sector registered a commendable growth of 5.3%. economic activity continued to drive the economy. Consumer The Company's existing stores, with the exception of JUSCO and business confidence strengthened during the year, Wangsa Maju and Bandar Utama, performed impressively in reflecting a resilient economy with a high savings rate, low the year under review with growth ranging from 3.7% to inflation and low interest rate environment. The retail industry 16.7%. Considering the keen competition that they faced, both reinforced this trend with a healthy growth of 8.0% reported JUSCO Wangsa Maju's and JUSCO Bandar Utama's marginally for the year of 2004. lower performances of 1.8% and 1.0% respectively, compared to their previous financial year's performances, are still Retailing Operations considered commendable. JUSCO Taman Maluri continued to During the year under review, the Company's retail business exhibit good growth with a 6.0% higher performance over the continued to be challenged by the opening of new previous year. JUSCO Melaka also performed well with a 9.2% hypermarkets and the proliferation of specialty and general growth over the previous year's performance. JUSCO Bandar merchandise stores, especially in new shopping centers. The Baru Klang, which had its supermarket renovated in the year opening of competitors' hypermarkets near some of the under review, saw an increase in customer traffic, which is Company's outlets created more intense competition as the reflected in its 16.7% growth over the previous year's Company's stores sought to maintain their competitive edge. performance. In Ipoh, despite facing competition from the Despite these and other economic challenges, the year under establishment of a new hypermarket near its store towards the review has been considered a successful year for the end of the year under review, JUSCO Ipoh's performance company's retailing operations. The Company was able to continued to be strong with a 12.1% growth over its previous utilise its long established knowledge and experience of the year's performance. During the year under review, the store local consumer market to its advantage, enabling it to earn a also benefited from higher customer traffic thanks to reputation for superior customer services, a pleasant and renovations to its supermarket and general merchandise store. conducive shopping environment, and being the provider of a JUSCO Mid Valley continued with its steady performance and good assortment of quality merchandise. registered a 5.5% growth for the year under review. JUSCO Bandar Puchong and JUSCO Taman Universiti also registered For the year under review, the Company registered retail sales steady performances with growth of 3.9% and 3.7% of RM1.648 billion, which is 17.2% higher than the previous respectively over their previous year's performances. year's retail sales performance. On a same-store basis, excluding the new JUSCO Home Centre business and JUSCO In the year under review, the full year operation of the Permas Jaya and JUSCO Metro Prima stores, which have Company's stores in Permas Jaya and Metro Prima also
30 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The new wet market section in the newly refurbished JUSCO Ipoh supermarket. contributed to the Company's revenue growth. Performance environment of the store. Today, Smart Wonder World is also reviews of both stores showed JUSCO Permas Jaya present in JUSCO Mid Valley and JUSCO Metro Prima, and performing up to the Company's expectations while JUSCO symbolises the Company's success in developing new Metro Prima fell slightly below expectations. Nevertheless, business ventures. Similarly, JUSCO Home Centre has now going forward, as both shopping centers establish themselves been duplicated in all other JUSCO stores and represents the and build up their loyal customer bases, the Company believes Company's efforts to specialise in and expand this category. that their performances will improve further. The Company believes that both the Smart Wonder World and
The Company is ever vigilant in its efforts to counter JUSCO Home Centre businesses have great potential and competition, especially from specialty stores, and to provide a plans are underway to expand them to all existing stores and greater variety of retail services and categories of merchandise new stores. to serve the needs of consumers' ever changing tastes, During the year under review, to keep abreast of the changing preferences and lifestyles. This has resulted in the demands of consumers and, at the same time, to counter development of new retail businesses such as the family competition and differentiate itself from its competitors by orientated amusement business, Smart Wonder World, and offering customers the best value in terms of variety of the do-it-yourself category called JUSCO Home Centre. merchandise, freshness and pricing, the Company embarked The Company first launched Smart Wonder World in August on a refurbishment program to upgrade its supermarkets in 2003 in JUSCO Taman Maluri, as a family-oriented amusement JUSCO Bandar Baru Klang, Ipoh and Wangsa Maju. The new center designed for the younger children. It is located within supermarkets feature a new open kitchen concept, new the general merchandise department and complements the concept health and beauty care sections and a greater variety
Smart Wonder World, JUSCO Metro Prima. JUSCO Home Centre, JUSCO 1 Utama. Jeans Studio at JUSCO 1 Utama.
31 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
and assortment of merchandise including new sections for benefits for members. A new redemption magazine for J fresh leafy vegetables. At the newly renovated JUSCO Ipoh CARD members was also introduced during the year, supermarket, a new wet market section was introduced, in highlighting the many attractive new and exciting items for which shoppers can purchase vegetables, fish, poultry and members to redeem with their points. other fresh produce at the same low prices available at the regular wet market, but under a conducive and clean Property Management Services environment. The wet market allows growers and producers to For our property management services business, the year bring their produce directly to our customers, fresh from the under review was very challenging as new shopping centers farm and the fisherman's wharf, at much cheaper prices. opened and their owners competed for tenants who were spoilt with the increasing number of choices. This has put J CARD, the Company's well-established loyalty card, growing pressure on rental and occupancy rates amongst continues to be extremely popular, and enjoys a high number competing shopping centers. of annual renewal. Currently, there are over 400,000 principal members on record, which provides the Company a valuable Despite these challenges, the overall performance of JUSCO customer database for its business needs. On the average, J Shopping Centers remains strong and steady, with the CARD members contributed approximately 58% of JUSCO's occupancy rate maintained at 99%. The Company's vast monthly sales. Besides being able to collect points and earn experience in the management of shopping centers was rebates for their purchases, J CARD members are now given largely responsible for this continuing strong performance. additional privileges. Among the privileges introduced in the Some of the affirmative actions that the Company took during year under review was a unique shopping concept, J CARD VIP the year were to continually review the tenant mix, so as to Day, in which members were given an exclusive invitation to successfully maintain the attractiveness of the malls to select a date within a certain period to enjoy discounts at the JUSCO stores. Another privilege introduced was the J CARD Members Insurance program, which offers special insurance packages catering to the specific needs and lifestyles of members and their family members. The Company also continued to tie up with more partners and merchants under the J CARD Privilege Shopping Program, providing more
32 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
resource management includes strategic plans for providing focused and tailored training for the various levels and categories of staff in the Company. Thus, during the year, amongst other things, customers were once again asked to evaluate the Company's cashiers, the best of whom had to compete for the best cashiers' awards. The cashiers were also given continuous training, including grooming, to improve their image and customer service skills. The Company's in house security personnel, "Blue Waves", were given military style training to enforce and inculcate discipline and boost their levels of motivation. The Company's middle management, including selected management trainees, were provided with leadership training to further upgrade their levels of leadership and management skills, in preparation for eventual higher management positions. Job skills training and on-the-job training in different operational areas are an integral part of the Company's human resource strategy, which includes team building courses to further promote cooperation and a sense of kinsmanship among the employees.
The Company has, under its retail and management trainee program, also recruited more than two hundred graduates annually and, in the process, assisted the country's undergraduate unemployment situation. Having been provided with in-depth training and orientation to ensure that they understand the work culture and philosophy of a retailer, many of the graduates today are playing significant roles in the day- to-day operations of the Company. Potential and outstanding management trainees have also been identified for further grooming as future leaders of the Company.
On 20 September 2004, following the Company's official name change to AEON CO. (M) BHD., a unique "re-entry ceremony" was conducted for all its employees who pledged to start afresh, move forward and take the Company to greater shoppers and tenants alike. The Company also made concerted heights. Senior management staff also held dialogue sessions efforts to improve operational efficiency in areas such as car park management and numerous measures to improve security and safety for shoppers. The Company's property management services business registered an income of RM136.1 million, which is 15.8% over the previous year's performance. Besides the continuous high occupancy rate, the higher income was also due to additional full years' contributions from new tenant spaces in the Company's two new shopping centers at Metro Prima, Kepong and Permas Jaya, Johor Bahru.
Human Resources Human Resource management and strategy remains crucial in the Company's plans as it moves forward, mapping its future directions and expansions. During the year under review, the Company employed measures to ensure that its human resource strategy remained on track in providing optimal human resources for the Company, both, in the short and long term, further enhancing the Company's competitiveness.
With this foremost in mind, the Company has continued to invest significantly in its human resource development, ensuring that its employees are constantly equipped with the proper level of skills. As a leading retailer, the expectations of the Company's customer services are high. As such, its human Staff team-building treasure hunt.
33 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
AEON CO. (M) BHD.’s staff members are continually sent for training. with operation staff in two-way communication sessions on share through new shopping centers, specialty retail management policies and operational issues. businesses, more facilities for shoppers' convenience and innovative loyalty programs. Under the Company's highly successful Japan Management Trainee program, the number of trainees sent for attachment The Company is confident that its established presence, with retail stores of the AEON group in Japan was doubled. expansion plans, competitive strengths and business Today, the graduates who have been equipped with on-the-job strategies will ensure that the Company continues to enjoy training experience and knowledge from Japan have been growth in performance in the new financial year. placed in strategic operational positions within the Company. The Company's main goal is to continuously live up to its The Company's JUSCO OUM retailing course, in collaboration customers' expectations. Though competitive pricing is vital, with the Open University of Malaysia (OUM), has produced superior customer services, quality and assortment of more than 150 graduates to date for both the certificate and merchandise are equally important in ensuring customer diploma courses. On 10 June 2004, the third batch of loyalty. To this end, through the new AEON and its objectives graduates received their Certificate in Retail Operations. There for successful long-term business, the Company believes that are currently 243 students attending the Diploma in it will be able to fulfill the ever-changing demands and Management (Retailing) course. This retailing program equips expectations of its customers. the students with the necessary practical skills and retail In line with this, in the new financial year, the Company will knowledge needed to face the challenges of the retail industry. extend its supermarket refurbishment plan to other stores. Prospects and Future Challenges Successful new business categories like Home Centre and the Smart Wonder World amusement business will also be Though there are some underlying concerns, prospects for the expanded to all other stores to further complement the Malaysian economy in 2005 are generally favourable. The Company's retail business and to enhance the Company's underlying conditions of the domestic economy are expected position as a family-friendly store. to remain strong and domestic growth is projected to be sustainable as in the previous year. The domestic demand, Besides continuous creative joint promotions with tenants, the expected to be spurred on by private consumption, will Company will continue to invest in refurbishment and continue to benefit the retail industry which, in itself, is very maintenance of its shopping centers, to ensure that they competitive as retail players compete to expand their market continue to look fresh and vibrant and be the shopping centers
34 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
AEON CO. (M) BHD. works closely with OUM to train staff members. of choice for family shopping, activities and leisure. In addition, to share information about the company's operations, the Company will also focus on developing strong and good ongoing promotions, corporate information and tenant mix for its shopping centers through sourcing of new announcements with customers, investors, public and and popular quality tenants. The Company will be establishing interested parties. It also allows the Company's J CARD a new store in Seremban in the coming year. Members to interact online, make enquiries and read an online version of the J CARD Pearl magazine. Moving forward, the Company remains committed to its plans to maintain its leading position and increase market dominance 3. In its supply chain management, the Company's WEB-EDI in the retail industry. The Company will focus its resources on allows the Company to transmit ordering data to suppliers expanding its businesses through innovative new retail via the Internet, allowing them to achieve greater efficiency business formats; growing its supermarket business; and in the ordering and delivery process for their merchandise. streamlining and categorising its general merchandise business sections, including spinning successful business categories into new individual business units. For its property management business, focus will continue to be on sourcing and development of new shopping centers in strategic locations with suitable formats; refurbishment of existing shopping centers; and developing good, effective tenant mix that match the changing times and lifestyles of shoppers. These strategies will be complemented through equal emphasis on the areas of human resource development, merchandising, information technology, logistics and store operations.
Information Technology 1. The Company's operations are connected through an intranet website which, amongst other things, allows the management and staff to access information and analysis for reference, such as: a. On line status reports on sales, purchases, delivery and scanning ratios. b. Sharing of Best Practices by stores and shopping centers on displays and promotions, as well as competitors’ actions and market trends. c. Customer Voice - feedback from customers received by individual stores are shared and discussed for overall improvement. d. Data Mart and Data Analysis which allows the management to conduct business statistics analysis, in particular with regards to sales, purchases, delivery and customers statistics. e. Human Resource system for staff statistics and related matters. f. Management information reports.
2. The Company's homepage (www.jusco.com.my) which had been revamped for speedier access, allows the Company
35 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Statement of Corporate Governance
Board Responsibilities Board Meetings The Board met five (5) times at regular intervals during The Board of Directors, in recognising the importance of the financial year ended 28 February 2005. The details corporate governance, is committed to ensuring that the of attendance of each Director at the Board meetings Company’s business and operations are in line with the held during the financial year are as follows: principles and best practices advocated in the Malaysian Code on Corporate Governance. Number of meetings The Board of Directors assumes responsibilities in corporate attended/held governance and has established various processes and during the Director’s committees to assist them in discharging of these responsibilities. Name of Director term in office Among others, the Company’s strategies and directions, shareholders and investors’ relationships, annual budget, major Dato’ Abdullah bin Mohd Yusof 5 / 5 capital expenditure, significant financial matters, and the adequacy Mr. Toshiji Tokiwa 4 / 5 and integrity of internal controls including risk assessment Mr. Tatsuichi Yamaguchi 5 / 5 are within the responsibilities of the Board of Directors. Mr. Soichi Okazaki 5 / 5 The following paragraphs set out the Company’s application of Mr. Masato Yokoyama 5 / 5 the principles and best practices of the Malaysian Code on Encik Ramli bin Ibrahim 4 / 5 Corporate Governance. Brig. Jen. (B) Dato' Mohd Idris bin Saman 5 / 5 Datuk Zawawi bin Mahmuddin 5 / 5 A. Directors Dato’ Chew Kong Seng 5 / 5 Board Balance Supply of Information The Board of Directors consists of nine (9) members; The Company Secretary ensures that all Board comprising one (1) Non-Executive Chairman, one (1) meetings are furnished with proper agendas. Board Non-Executive Vice Chairman, two (2) Executive papers and reports providing updates on financial, Directors and five (5) Non-Executive Directors. Of the operational and corporate developments including five (5) Non-Executive Directors, three (3) are matters, such as the Company’s corporate citizenship Independent Directors. programme and staff welfare matters are circulated Dato’ Chew Kong Seng is the Senior Independent Non- prior to the meetings to all Directors for them to Executive Director to whom concerns on matters discharge their duties effectively. The Directors have full relating to corporate governance of the Company could access to the advice and services of the Company be conveyed to. Secretary. In addition, the Directors, if necessary, may also seek professional advice, at the Company’s The Directors bring a wide range of expertise and expense. The Directors may also consult the Chairman experience in various fields such as economics, public and other Board members prior to seeking any services, accounting and finance, legal, human resource, independent professional advice. banking, marketing, taxation, general management, retail management and property management services. All Directors’ Training Board members participated and deliberated on the All the Directors have attended the Directors’ issues and matters affecting the Company. Mandatory Accreditation Programme organised by The profile of each Director is presented on page 22 to Bursa Malaysia Securities Berhad and are also provided page 25 of the Annual Report. with updates from time to time on relevant new laws and regulations affecting their directorship. Directors also from time to time visited existing stores and/or new sites to have a thorough understanding of the Company’s operational matters.
Board Committees The Board of Directors is assisted by its Committees, which have been established under defined terms of reference. The Committees are the Nomination Committee, the Remuneration Committee and the Audit Committee.
36 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The Nomination Committee The Nomination Committee members are Mr. Tatsuichi B. Directors Remuneration Yamaguchi (Chairman), Dato’ Abdullah bin Yusuf, Dato’ The breakdown of the remuneration of the Directors Chew Kong Seng, Brig. Jen. (B) Dato’ Mohd Idris bin during the financial year under review is as follows: Saman and Datuk Zawawi bin Mahmuddin. The committee met one (1) time in the financial year under review. 1. Aggregate remuneration of the Directors categorised into appropriate components: The duties and responsibilities of the Committee, among others, are to recommend to the Board, candidates for Non- directorship, directors to fill seats on Board Committees Executive Executive and to review annually the required mix of skills and Directors Directors Total experience of the Board including the effectiveness of the RM RM RM Board as a whole and the contribution from each Director. Fees 252,000 796,000 1,048,000 The Board, through the Nomination Committee, on 28 Salaries 694,753 - 694,753 April 2005 conducted the annual assessment of the Benefits-in-kind 24,600 14,700 39,300 Directors’ performance and contribution, and reviewed Other emoluments 157,605 - 157,605 the required mix of skills and experience of the Board to function competently and efficiently as a whole. The 1,128,958 810,700 1,939,658 Board is pleased to state that its current composition of members meets the requirement of a competent and effective Board. 2. The number of Directors whose total remuneration fall within the following bands: The Remuneration Committee The Remuneration Committee is made up of Non- Number of Directors Executive Directors whose members are Mr. Tatsuichi Range of Non- Remuneration Executive Executive Total Yamaguchi (Chairman), Dato’ Abdullah bin Yusof and Encik Ramli bin Ibrahim. The duties of the Committee RM50,001 to RM100,000 - 5 5 shall be to recommend to the Board the remuneration RM100,001 to RM150,000 - - - of all Directors in all its forms. Executive Directors RM150,001 to RM200,000 - 1 1 play no part in decision-making or determining their own remuneration. RM200,001 to RM250,000 - 1 1 RM250,001 to RM300,000 - - - The committee met two (2) times in the financial year under review to determine the remuneration packages RM300,001 to RM350,000 - - - of all Directors, including the Non-Executive Chairman RM350,001 to RM400,000 - - - and Non-Executive Vice Chairman and is a matter for RM400,001 to RM450,000 - - - the Board as a whole. Individual Directors RM450,001 to RM500,000 - - - concerned do not participate in the discussion on their RM500,001 to RM550,000 1 - 1 own remuneration. RM550,001 to RM600,000 - - - The Audit Committee RM600,001 to RM650,000 1 - 1 The Board is also assisted by the Audit Committee 279 whose members, terms of reference and activities for the financial year under review are stated on page 40 to 42 of this Annual Report.
Re-election In accordance with the Company’s Articles of Association, all Directors retire every year.
37 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
C. Shareholders
Investors and Shareholders Communication It has always been the Company’s practice to maintain a good relationship with its shareholders. Major corporate developments and happenings in the Company have always been duly and promptly announced to all shareholders, in line with Bursa Malaysia Securities Berhad’s objectives of ensuring transparency and good corporate governance practices.
The Company’s financial performance, major corporate developments and other relevant information are promptly disseminated to shareholders and investors via announcements of its quarterly performance, annual report, corporate announcements to Bursa Malaysia Securities Berhad and press conferences. Further update of the Company’s activities and operations are also disseminated to shareholders and investors through dialogue with analysts, fund managers, investors and the media. Besides highlighting retail business promotional activities, the Company’s website (www.jusco.com.my) provides an update of the Company’s latest performance released to Bursa Malaysia Securities Berhad as well as other corporate information to the public. During the Annual General Meeting, shareholders are usually given a presentation on the Company’s performance and major activities that were carried out by the Company for the year under review. During the meeting, shareholders have the opportunities to enquire and comment on the Company’s performance and operations.
D. Accountability and Audit
Financial Reporting In its financial reporting via quarterly announcements of Malaysia Securities Berhad and other regulatory bodies. results, annual financial statements and annual report In preparing the financial statements, the Board of presentation including the Chairman’s Statement and Directors has ascertained that accounting policies and Review of Operations, the Board of Directors always reasonable prudent judgment and estimates have been provides a comprehensive assessment of the consistently applied. Company’s performance and prospects for the benefits The Directors are responsible for keeping proper of shareholders, investors and interested parties. The accounting records, which disclose with reasonable Audit Committee also assists the Board in overseeing accuracy at any time the financial position of the the Company’s financial reporting processes. Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965. The Directors’ responsibility statement in Directors have a general responsibility for taking such respect of the preparation of the steps as is reasonably open to them to safeguard the audited financial statements assets of the Company, to prevent and detect fraud and The Board of Directors is responsible for the preparation other irregularities. of the financial statements for the financial year of the Company, which gives a true and fair view of the state Going Concern of affairs of the Company and its results and cash flow The Board of Directors confirmed that the Company for the financial year ended. has adequate resources to continue its business in the The Board of Directors has ensured that the financial foreseeable future. For this reason, they continue to statements have been prepared in accordance with adopt the going concern basis for preparing the applicable approved accounting standards in Malaysia, financial statements. the requirements of the Companies Act, 1965, Bursa
38 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Compliance with Malaysian Code on Corporate Governance The Board of Directors is pleased to state that the Company was in compliance with all the principles and best practices as advocated in the Malaysian Code on Corporate Governance during the financial year under review, except on disclosure of each individual Director’s remuneration.
State of Internal Control The Statement of Internal Control set out on page 43 of the Annual Report provides an overview of the state of internal controls within the Company
Relationship With The External Auditors The Board of Directors with the assistance of the Audit Committee maintains a formal and transparent relationship with the Company’s External Auditors through the Audit Committee, Board and formal meetings whereby issues are discussed. The relationship between the Board and the External Auditors is also formalised through the Audit Committee’s terms of reference.
39 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Terms of Reference of the Audit Committee
Audit Committee Designation Attendance at Meetings - Dato’ Chew Kong Seng Chairman (Independent The General Manager of Finance, the Head of Internal Audit, Non-Executive Director) the Company Secretary, the Senior Finance Manager, the - Encik Ramli bin Ibrahim Member Compliance Officer and a representative of the External (Non-Independent Auditors shall normally attend meetings. However, the Non-Executive Director) Committee may invite any person to be in attendance to assist it in its deliberations. - Brig. Jen. (B) Dato’ Mohd. Member Idris bin Saman (Independent Non-member directors shall not attend unless specifically Non-Executive Director) invited to by the Committee. Constitution Secretary to Audit The Board hereby resolves to establish a Committee of the Committee Board to be known as the Audit Committee with the following The Company Secretary shall be the secretary of the terms of reference. committee and shall be responsible for drawing up the agenda in consultation with the chairperson. The agenda together with Composition of Audit the relevant explanatory papers and documents shall be circulated to the committee members prior to each meeting. Committee The secretary shall be responsible for recording attendance The Committee shall be appointed by the Board from among of all members and invitees, keeping the minutes of the its members and shall consist of not less than 3 members of meeting of the Committee, circulating them to committee whom a majority shall be Independent Directors. members and to the other members of the Board of Directors and for ensuring compliance with Bursa Malaysia The Committee shall include at least one person who is a Securities Berhad’s requirements. member of the Malaysian Institute of Accountants (MIA) or alternatively a person who must have at least 3 years’ working experience and have passed the examinations specified in Part Reporting Procedures I of the 1st. Schedule of the Accountants Act 1967 or is a member of one of the associations specified in Part II of the The Committee shall prepare an annual report to the Board that said Schedule or fulfils such other requirements as prescribed provides a summary of the activities of the Committee for by Bursa Malaysia Securities Berhad. No alternate director inclusion in the Company’s annual report. shall be appointed as a member of the Committee. The Committee shall assist the Board in preparing the The Committee shall elect a chairperson from amongst its following for publication in the Company’s annual report: members who is not an executive director or employee of the - Statement of the Company’s application of the principles company or any related corporation. In the event that a set out in Part I of the Malaysian Code on Corporate member of the audit committee resigns, dies or for any other Governance. reason ceases to be a member, with the result that the - Statement on the extent of compliance with the Best number of members is reduced to below three, the Board of Practices in Corporate Governance set out in Part II of Directors shall, within three months of that event, appoint such the Malaysian Code on Corporate Governance, number of new members as may be required to make up the specifying reasons for any areas of non-compliance (if minimum number of three members. any) and the alternatives adopted in such areas. The Board shall review the terms of office of Committee - Statement on the Board’s responsibilities for preparing members no less than every three years. the annual audited financial statements, and - Statement about the state of Internal Control of the Company. Meetings Where the Committee is of the view that a matter reported by The Committee shall meet at least four times a year. In addition, it to the Board of Directors has not been satisfactory resolved the chairperson shall convene a meeting of the Committee if resulting in a breach of the Bursa Malaysia Securities Berhad requested to do so by any member, the management or the Listing Requirements, the Committee shall promptly report internal or external auditors to consider any matter within the such matter to the Bursa Malaysia Securities Berhad. scope and responsibilities of the Committee.
40 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
- To review the internal audit plan, consider the major Quorum findings of internal audit, fraud investigations and A quorum shall consist of a majority of committee members actions and steps taken by management in response to present at the meeting who are Independent Directors. audit findings. - To review the adequacy and relevance of the scope, functions and resources of Internal Audit and the Authority necessary authority to carry out its work. - To review any related party transactions and conflict of The Committee is authorised by the Board to: interest situations that may arise within the Company. - Investigate any activity within its terms of reference. - To consider the appointment of the External Auditors, - Have resources which are reasonably required to enable the terms of reference of their appointment and any it to perform its duties question of resignation and dismissal before making a - Have free access to all information and documents it recommendation to the Board. requires for the purpose of discharging its functions and - To undertake such other responsibilities as may be responsibilities. agreed to by the Committee and the Board. - Have direct communication channels with the External - To report to the Board its activities, significant results Auditors and person(s) carrying out the internal audit and findings. function or activity. - Obtain outside legal or other independent professional advice and secure the attendance of outsiders with Overseeing the Internal relevant experience and expertise if it considers this necessary. Audit Function - Convene meetings with the External Auditors, excluding The Committee shall oversee all internal audit functions and is the attendance of the executive members of the authorised to commission investigations to be conducted by committee, whenever deemed necessary. internal audit as it deems fit. The Internal Auditor shall report directly to the Committee and shall have direct access to the Duties and Responsibilities Chairman of the Committee. All proposals by management regarding the appointment, The duties and responsibilities of the Committee shall be: transfer or dismissal of the Internal Auditor shall require the - To review the Terms of Reference at least annually, as prior approval of the Committee. conditions dictate. - To review any financial information for publication, including quarterly and annual financial statements before submission to the Board. The review shall focus on: • Any changes in accounting policies and practices. • Major judgmental areas • Significant audit adjustments from the External Auditors • The going concern assumption. • Compliance with accounting standards. • Compliance with stock exchange and legal requirements. - To review with the External Auditors their audit plan, scope and nature of audit for the Company. - The External Auditors’ audit report, areas of concern arising from the audit and any other matters the External Auditors may wish to discuss (in the absence of management if necessary). - To assess the adequacy and effectiveness of the systems of internal control and accounting control procedures of the Company by reviewing the External and/or Internal Auditors’ management letters and management responses. - To discuss problems and reservations arising from the interim and final audits and any matters the auditors may wish to discuss.
41 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The Audit Committee
The Audit Committee comprises the following members: b. Reviewed the External Auditors’ scope of work and audit plan for the year. - Dato’ Chew Kong Seng Independent c. Reviewed and discussed the External Auditors’ audit (Chairman) Non-Executive Director report and areas of concern. - Encik Ramli bin Ibrahim Non-Independent d. Considered the appointment of the External Auditors Non-Executive Director and the terms of reference of their appointment. - Brig. Jen. (B) Dato’ Mohd. Independent e. Reviewed the internal audit plan, considered the major Idris bin Saman Non-Executive Director findings of internal audit, fraud investigations and actions taken by management in response to the audit findings. Terms of Reference of f. Assessed the adequacy and effectiveness of the systems of internal control and accounting control The Audit Committee procedures of the Company by reviewing the External and Internal Auditors’ management letters and During the financial year under review, there were no changes management responses. to the terms of reference of the Audit Committee. g. Reviewed the adequacy and relevance of scope, The Term of Reference of the Audit Committee, which was due for functions and resources of internal audit and that it has review, was reviewed on 18 January 2005, the Audit Committee the necessary authority to carry out its work. concluded that the Terms of Reference of the Audit Committee h. Reviewed related party transactions. covered all aspects for the Audit Committee to function efficiently i. Reported to the Board on its activities and significant and needs no changes. The Board approved the renewal of the findings and results of audit recommendations. Terms of Reference tabled on 19 January 2005. On 18 January 2005, the Audit Committee carried out a self- assessment to evaluate the effectiveness of the audit committee. The evaluation process covered a review on the Meetings Terms of Reference, agenda setting of meetings, oversight of During the financial year under review, the Audit Committee the audit process and continuous improvement of the Audit convened four (4) meetings. The attendance records of the Committee. The result of the self-assessment was subsequently member of the Audit Committee are as follows: tabled and accepted by the Board on 19 January 2005. On 18 January 2005, the Audit Committee also held one Number of meetings meeting with the External Auditors without the presence of attended/held during the the management, to allow the auditors to discuss any issues Name of Directors member’s term in office arising from the audit exercise or any other matters, which the Dato’ Chew Kong Seng (Chairman) 4 / 4 external auditors wished to raise. Encik Ramli bin Ibrahim 4 / 4 During the year under review, the Internal Audit department Brig. Jen. (B) Dato' Mohd Idris bin Saman 4 / 4 carried out the following activities: a. Presented and obtained approval from Audit Committee, The meetings were structured through the use of agendas, the 3 years internal audit plan, which supplemented which were distributed to members with sufficient notification. th audit strategy and audit scope of work. The Company Secretary was present in all the meetings. A b. Reviewed and analysed certain key business processes representative of the External Auditors, Messrs KPMG Desa identified in the annual audit plan, reported ineffective Megat & Co., the General Manager of Finance, the Head of and inadequate controls, and made recommendations to Internal Audit, the Senior Finance Manager and the Compliance improve their effectiveness. Officer attended the meetings, and related management c. Monitored and ensured management implemented personnel attended the meetings upon invitation. corrective action plans. d. Monitored compliance with policies and procedures e. Reviewed the adequacy and effectiveness of the internal Summary of control structures of the Company. f. Assisted the Board of Directors and Management on The Audit Committee’s compliance matters required by the Malaysian Code on Corporate Governance. Activities during the g. Assisted the Board of Directors and Management by reviewing the risk policy and control strategies in the Year Under Review organisation. During the year under review, the Audit Committee carried out h. Carried out investigative assignments. its duties in accordance with its terms of reference as follows: i. Continued inculcating good risk management practices a. Reviewed the quarterly unaudited financial result and throughout the Company. annual audited financial statements before submission to the Board for consideration and approval.
42 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Statement of Internal Control
- The management structure of the Company formally Board Responsibilities defines lines of responsibility and delegation of The Board of Directors recognises its responsibilities over the authority, for all aspects of the Company’s affairs. Senior Company’s system of internal controls, covering all its financial management and business unit’s managers submit and and operating activities to safeguard shareholder’s present their operational performance reviews as well as investments and the Company’s assets. business plans and strategic measures in regularly held Executive Committee and Management Meetings; The Board has an established on-going process for identifying, - The Board approves the annual budget and reviews key evaluating and managing the significant risks encountered by business variables and monitors the achievements of the Company. The Board through its Audit Committee regularly the Company’s performance on a quarterly basis. reviewed this process. - The authorisation limits and approvals authority In view of the limitations inherent in any system of internal threshold of the Company encompasses internal control controls, the system is designed to manage, rather than to procedures. These procedures are subject to reviews by eliminate, the risk of failure to achieve the Company’s the management to incorporate changing business risks corporate objectives. and operational efficiency. - The Audit Committee is responsible for reviewing The Audit Committee assists the Board to review the adequacy quarterly announcements to Bursa Malaysia Securities and integrity of the system of internal controls in the Company Berhad and statutory annual financial statements prior to and to ensure that an appropriate mix of techniques is used to submission for the Board’s approval. obtain the level of assurance required by the Board. The Audit - The Internal Audit Department periodically monitors the Committee presents its findings to the Board. effectiveness and evaluates the proper functioning of the internal control system to ascertain compliance with Internal Audit Function the control procedures and policies of the Company. The Head of Internal Audit reports to Audit Committee on the The Audit Committee, assisted by the Internal Audit status of the internal control system on a quarterly basis. Department, provides the Board with the assurance it requires - Project teams are set up from time to time to address on the adequacy and integrity of the system on internal business and operational issues to meet the business controls. The Internal Audit Department independently reviews objectives and operational requirements of the Company. the risk identification procedures and control processes implemented by the management, conducts risk assessment All the above-mentioned processes have been in place and workshops that encompass reviewing critical areas that the provide reasonable assurance on the effectiveness of the company faces, and reports to the Audit Committee on a internal control system. quarterly basis. The Internal Audit Department also carried out internal control reviews on key activities of the Company’s business on the Conclusion basis of a three-year internal audit plan that was presented and The Board of Directors reviewed the adequacy and integrity of approved by the Audit Committee. The internal audit function the system of internal controls that provides reasonable adopts a risk-based approach and prepares its audit strategy assurance to the Company in achieving the business and plan based on the risk profiles of the major business units objectives. As the development of a sound system of internal of the Company. controls is an on-going process, the Board and the management maintain an on-going commitment and continue to take appropriate measures to strengthen the internal control System of Internal Controls environment of the Company. The Board of Directors is responsible for managing the key business risks of the Company and implementing the appropriate internal control system to manage those risks. The Board reviewed the adequacy and integrity of the system of internal controls as it operated during the year. The following are the key elements of the Company’s system of internal controls:
43 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Other Information
Material Contracts involving Non Audit Fees directors and substantial The amount of non-statutory audit fees paid to the external auditor and its affiliates during the year under review is shareholders RM130,625, comprising of mainly advisory, review and tax services. Material contracts entered into by the Company which involve Directors’ and major shareholders’ interests and still subsisting at the end of the financial year ended 28 February 2005, or Revaluation Policy on entered into since the end of the previous financial year, comprise the following: Landed Properties There is no revaluation policy on the Company’s landed a) On 12 October 2000, the Company entered into a Technical properties. The Company adopted the transitional provisions Æ Service Agreement with ON Co., Ltd. (formerly known as issued by Malaysian Accounting Standards Board (MASB) to JUSCO Co., Ltd.) whereby the Company is granted the retain the carrying amount on the basis of their previous Æ exclusive right by ON Co., Ltd. to use their trademark in revaluation as stated in page 58 of this Annual Report. relation to goods and services. The Company is also granted the non-exclusive right to use the information and know- how, employed or developed by ÆON Co., Ltd. for the management and operation of retail stores, wholesale business and related supporting activities. The total cash consideration payable by the Company to ÆON Co., Ltd. for the year under review amounted to RM9.295 million. ÆON Co., Ltd. is a major shareholder of the Company. b) On 1 July 1997, the Company entered into a Factoring Agreement with a related company, AEON Credit Service (M) Sdn Bhd (formerly known as ACS Credit Service (M) Sdn Bhd) whereby the Company’s goods sold on credit under its easy payment scheme are factored to AEON Credit Service (M) Sdn Bhd. The debts sold to AEON Credit Service (M) Sdn Bhd are at full value of the goods and upon the terms and conditions as stated in the factoring agreement. The total value of the debts sold to AEON Credit Service (M) Sdn Bhd in the year under review amounted to RM4.403 million. Dato’ Abdullah bin Mohd Yusof and Encik Ramli bin Ibrahim, both Directors of AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.), are also Directors and major shareholders in AEON Credit Service (M) Sdn. Bhd. ÆON Co., Ltd. has an indirect interest in AEON Credit Service (M) Sdn. Bhd. through AEON Credit Service Co. Ltd.
44 Financial Statements for the year ended 28 February 2005 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Directors’ Report for the year ended 28 February 2005
The Directors have pleasure in submitting their report and the audited financial statements of the Company for the year ended 28 February 2005. 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 center operation. There has been no significant change in the nature of these activities during the financial year.
Change of name
On 2 September 2004, the Company changed its name from Jaya Jusco Stores Bhd. to AEON CO. (M) BHD.. Results RM’000 Net profit for the year 64,247 Reserves and provisions
There were no material transfers to or from reserves and provisions during the year 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 20% less tax of 28%, amounting to RM12,636,000 in respect of the year ended 29 February 2004 on 22 July 2004.
The first and final dividend recommended by the Directors in respect of the year ended 28 February 2005 is 12% less tax of 28%, amounting to RM15,163,200, 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 Soichi Okazaki Masato Yokoyama Tatsuichi Yamaguchi Ramli bin Ibrahim Brig. Jen. (B) Dato’ Mohd Idris bin Saman Datuk Zawawi bin Mahmuddin Dato’ Chew Kong Seng @ Chew Kong Huat Nagahisa Oyama (appointed as Alternate Director to Soichi Okazaki with effect from 28.4.2005)
46 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations of those who were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM1 each At At 1.3.2004 Bonus issue Sold 28.2.2005
Shareholdings in which Directors have direct interest in the Company
Dato’ Abdullah bin Mohd Yusof 154,000 154,000 - 308,000 Soichi Okazaki 15,000 15,000 - 30,000 Masato Yokoyama 15,000 15,000 - 30,000
Shareholdings in which Directors have indirect interest in the Company
Dato’ Abdullah bin Mohd Yusof 5,676,000 5,600,000 (3,626,000) 7,650,000 Ramli bin Ibrahim 140,000 140,000 - 280,000
None of the other Directors holding office at 28 February 2005 had any interest in the ordinary shares of the Company or of its related corporations during the financial year. 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 year 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 During the financial year, the Company increased its authorised share capital from RM100,000,000 divided into 100,000,000 ordinary shares of RM1.00 each to RM500,000,000 divided into 500,000,000 ordinary shares of RM1.00 each.
During the financial year, the Company increased its issued and paid up capital from RM87,750,000 to RM175,500,000 by way of bonus issue of 87,750,000 ordinary shares of RM1.00 each on the basis of one (1) new ordinary share for every one (1) existing ordinary share.
There were no other changes in the issued and paid-up capital of the Company during the financial year. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the financial year.
47 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Significant event during the financial year
During the financial year, the Company entered into the following Sale and Purchase Agreements:- i) The acquisition of a piece of vacant land located in Mukim of Tebrau, District of Johor Bahru, for RM39,241,050 for the purpose of constructing a new shopping center. ii) The acquisition of a piece of freehold land located in Mukim of Cheras, District of Ulu Langat, for RM10,500,000 to be part of the development of a shopping center. 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 year 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 year.
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 year 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, the results of the operations of the Company for the financial year ended 28 February 2005 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 year and the date of this report.
48 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
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:
………………………………………………………… Dato’ Abdullah bin Mohd Yusof
………………………………………………………… Soichi Okazaki
Kuala Lumpur, Date: 28 April 2005
49 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Balance Sheet at 28 February 2005
Note 2005 2004 RM’000 RM’000
Property, plant and equipment 2 756,335 692,850 Investments 3 175 175 Current assets Inventories 4 139,296 146,278 Trade and other receivables 5 26,677 30,457 Cash and cash equivalents 6 92,363 82,609
258,336 259,344
Current liabilities Trade and other payables 7 413,549 408,956 Borrowings (unsecured) 8 307 - Taxation 12,751 6,763
426,607 415,719
Net current liabilities (168,271) (156,375)
588,239 536,650
Financed by: Capital and reserves Share capital 9 175,500 87,750 Reserves 10 388,310 424,578
Shareholders’ funds 563,810 512,328
Long term and deferred liabilities Deferred tax liabilities 11 24,429 24,322
588,239 536,650
- The financial statements were approved and authorised for issue by the Board of Directors on 28 April 2005.
- The notes set out on pages 54 to 68 form an integral part of, and should be read in conjunction with, these financial statements.
50 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Income Statement for the year ended 28 February 2005
Note 2005 2004 RM’000 RM’000
Revenue 1,784,564 1,523,781 Other operating income 900 724 Changes in inventories (6,982)31,545 31,545 Net purchases (1,306,326) (1,149,143) Staff costs 13 (93,862) (80,821) Depreciation (55,273) (43,720) Operating expenses (223,445) (187,095)
Operating profit 12 99,576 95,271 Interest expense 14 (987) (44) Interest income 421 1,061
Profit before taxation 99,010 96,288 Tax expense 15 (34,763) (32,700)
Net profit for the year 64,247 63,588
Basic earnings per ordinary share (sen) 16 36.6 36.2
Dividend per ordinary share – net (sen) 17 8.6 14.4
The notes set out on pages 54 to 68 form an integral part of, and should be read in conjunction with, these financial statements.
51 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Statement of Changes in Equity for the year ended 28 February 2005
Non-distributable Distributable Share Share Revaluation Retained Note capital premium reserve profits Total RM’000 RM’000 RM’000 RM’000 RM’000
At 1 March 2003 87,750 108,488 35,199 229,939 461,376
Net profit for the year - - - 63,588 63,588 Dividend - 2003 final 17 - - - (12,636) (12,636) Net gains and losses not recognised in the income statement: Transfer from revaluation reserve to retained profits - - (517) 517 -
At 29 February 2004 / 1 March 2004 87,750 108,488 34,682 281,408 512,328
Net profit for the year - - - 64,247 64,247 Dividend - 2004 final 17 - - - (12,636) (12,636) Issuance of shares for bonus issue 87,750 (87,750) - - - Net gains and losses not recognised in the income statement: Transfer from revaluation reserve to retained profits - - (517) 517 - Bonus issue expenses - (129) - - (129)
At 28 February 2005 175,500 20,609 34,165 333,536 563,810
Note 9 Note 10 Note 10 Note 10
The notes set out on pages 54 to 68 form an integral part of, and should be read in conjunction with, these financial statements.
52 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Cash Flow Statement for the year ended 28 February 2005
2005 2004 RM’000 RM’000
Cash flows from operating activities Profit before taxation 99,010 96,288 Adjustments for: Depreciation 55,273 43,720 Interest expense 987 44 Interest income (421) (1,061) (Gain) / Loss on disposal of property, plant and equipment (15) 106 Property, plant and equipment written off 407 144
Operating profit before working capital changes 155,241 139,241 Changes in working capital: Inventories 6,982 (31,545) Trade and other receivables 3,780 (6,778) Trade and other payables 4,593 109,627
Cash generated from operations 170,596 210,545 Income taxes paid (28,668) (27,795)
Net cash generated from operating activities 141,928 182,750
Cash flows from investing activities Purchase of property, plant and equipment (119,237) (175,696) Proceeds from disposal of property, plant and equipment 87 97 Interest received 421 1,061
Net cash used in investing activities (118,729) (174,538)
Cash flows from financing activities Dividend paid to shareholders of the Company (12,636) (12,636) Interest paid (987) (44) Bonus issue expenses (129) -
Net cash used in financing activities (13,752) (12,680)
Net increase / (decrease) in cash and cash equivalents 9,447 (4,468)
Cash and cash equivalents at beginning of year 82,609 87,077
Cash and cash equivalents at end of year 92,056 82,609
Cash and cash equivalents comprise: Cash and bank balances 29,663 23,709 Deposits with licensed financial institutions 62,700 58,900 Bank Overdraft (307) -
92,056 82,609
The notes set out on pages 54 to 68 form an integral part of, and should be read in conjunction with, these financial statements.
53 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Notes to the Financial Statements
1. Summary of significant accounting policies
The following accounting policies are adopted by the Company and are consistent with those adopted in the previous years.
(a) Basis of accounting The financial statements of the Company are prepared on the historical cost basis except as disclosed in the notes to the financial statements and in compliance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
(b) Affiliated company An affiliated company is a company that holds a long term equity interest of 20% to 50% in the Company.
(c) Property, plant and equipment 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.
Surpluses arising from revaluation are dealt with in the property revaluation reserve account. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in carrying amount is charged to the income statement.
Property, plant and equipment retired from active use and held for disposal are stated at the carrying amount at the date when the asset is retired from active use, less impairment losses, if any.
Depreciation Freehold land and construction work-in-progress are not amortised. Long term leasehold land is amortised over a period of 95-99 years. Buildings are depreciated on a straight-line basis over the shorter of 50 years or the lease period. The straight-line method is used to write off the cost of the other assets over the term of their estimated useful lives at the following principal annual rates:
Buildings 2% -5% Structures 10% Office equipment 10% Machinery and equipment 10% - 20% Furniture, fixtures and fittings 20% Motor vehicles 20% IT equipment 20%
(d) Investments Long term investments are stated at cost. An allowance is made when the Directors are of the view that there is a diminution in their value which is other than temporary.
(e) Trade and other receivables Trade and other receivables are stated at cost less allowance for doubtful debts, where applicable.
(f) Employee benefits Defined contribution plans Obligations for contributions to defined contribution plans are recognised as an expense in the income statement as incurred.
(g) Liabilities Trade and other payables are stated at cost.
54 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
(h) Inventories Inventories are stated 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.
(i) 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.
(j) Impairment The carrying amount of assets, other than inventories and financial assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in the income statement.
The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, 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. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and it 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. The reversal is recognised in the income statement, unless it reverses an impairment loss on a revalued asset, in which case it is taken to equity.
(k) Income tax Tax on the profit or loss for the year comprises current and deferred tax. Income tax 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 year, 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 provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for the initial recognition of assets or liabilities that at the time of the transaction affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
55 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
(l) Foreign currency transactions Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at the date of the transactions. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Ringgit Malaysia at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
The closing rates used in the translation of foreign currency assets and liabilities are as follows:
2005 2004 RM RM
Japanese Yen 100 3.50 3.44
(m) Revenue i) Goods sold and services rendered Revenue from the sale of goods represents gross trading sales, including concessionaires less returns and discounts and is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer.
Property management services from shopping center operation which include rental income, service charges, sales commissions and distribution center charges earned are recognised on an accrual basis.
ii) Interest income Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset.
(n) Expenses i) Operating lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.
ii) Interest expenses All interest and other costs incurred in connection with borrowings are expensed as incurred.
56 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
2. Property, plant and equipment
Balance at (Disposal/ Transfer Balance at 1.3.2004 Additions Write off) in/(out) 28.2.2005 RM’000 RM’000 RM’000 RM’000 RM’000
Cost/Valuation Freehold land at cost 34,696 47,996 - 4,974 87,666 Leasehold land at valuation 60,761 - - - 60,761 Buildings at valuation 126,003 - - - 126,003 Leasehold land at cost 58,660 11,362 - 5,585 75,607 Buildings at cost 244,479 512 - 207 245,198 Structures 72,400 10,303 (4) 179 82,878 Office equipment 5,646 954 (67) 18 6,551 Machinery and equipment 160,708 15,626 (2,988) - 173,346 Furniture, fixtures and fittings 128,621 14,434 (1,747) - 141,308 Motor vehicles 4,018 412 (44) - 4,386 IT equipment 260 - - - 260 Construction work-in- progress 12,318 17,638 - (10,963) 18,993
908,570 119,237 (4,850) - 1,022,957
Accumulated depreciation Leasehold land at valuation 5,926 614 - - 6,540 Buildings at valuation 24,411 2,520 - - 26,931 Leasehold land at cost 1,827 616 - - 2,443 Buildings at cost 34,297 5,620 - - 39,917 Structures 17,866 7,503 (1) - 25,368 Office equipment 3,132 540 (58) - 3,614 Machinery and equipment 45,918 18,520 (2,584) - 61,854 Furniture, fixtures and fittings 79,792 18,737 (1,697) - 96,832 Motor vehicles 2,346 586 (31) - 2,901 IT equipment 205 17 - - 222
215,720 55,273 (4,371) - 266,622
57 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
2. Property, plant and equipment (continued)
Net book value Depreciation 2005 2004 2004 RM’000 RM’000 RM’000
Freehold land at cost 87,666 34,696 - Leasehold land at valuation 54,221 54,835 569 Buildings at valuation 99,072 101,592 2,520 Leasehold land at cost 73,164 56,833 269 Buildings at cost 205,281 210,182 4,657 Structures 57,510 54,534 6,466 Office equipment 2,937 2,514 450 Machinery and equipment 111,492 114,790 12,566 Furniture, fixtures and fittings 44,476 48,829 15,714 Motor vehicles 1,485 1,672 486 IT equipment 38 55 23 Construction work-in-progress 18,993 12,318 -
756,335 692,850 43,720
One of the buildings of the Company is situated on land belonging to a third party.
The leasehold land and 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 have not been updated, and they continue to be stated at their existing carrying amounts less accumulated depreciation.
Had the leasehold land and 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 year would be as follows:
2005 2004 RM’000 RM’000
Long term leasehold land 9,586 9,702 Buildings 62,234 63,930
71,820 73,632
3. Investments
2005 2004 RM’000 RM’000
Long term Unquoted shares, at cost Golf membership 45 45 Equity investment 130 130
175 175
58 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
4. Inventories
2005 2004 RM’000 RM’000
At cost: Retail merchandise 96,553 103,163 Food and others 42,743 43,115
139,296 146,278
5. Trade and other receivables
2005 2004 RM’000 RM’000
Trade receivables 10,208 12,591 Less: Allowance for doubtful debts (1,276) (1,076)
8,932 11,515 Other receivables and prepayments 3,796 3,946 Rental and utility deposits 13,949 14,996
26,677 30,457
Included in trade receivables is an amount of RM622,032 (2004 - RM719,424) due from companies with common Directors.
Included in other receivables and prepayments is an amount of RM130,359 (2004 - RM165,228) due from companies with common Directors.
No trade receivables had been written off against the allowance for doubtful debts during the year (2004 - RM41,135).
6. Cash and cash equivalents
2005 2004 RM’000 RM’000
Cash and bank balances 29,663 23,709 Deposits with licensed financial institutions 62,700 58,900
92,363 82,609
59 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
7. Trade and other payables
2005 2004 RM’000 RM’000
Trade payables 276,152 264,169 Other payables and accrued expenses 87,711 82,987 Progress claim from contractors 3,986 20,430 Rental and utility deposits 44,913 40,469 Affiliated company 787 901
413,549 408,956
The affiliated company is ÆON Co., Ltd., a company incorporated in Japan. The amount due to the affiliated company is non-trade in nature, unsecured, interest free and has no fixed terms of repayment.
8. Borrowings (unsecured)
2005 2004 RM’000 RM’000
Bank overdrafts 307 -
The bank overdrafts of the Company are subject to interest varying from 0.5% to 0.625% (2004 - Nil) above the lender’s base lending rates.
9. Share capital
2005 2004 RM’000 RM’000
Ordinary shares of RM1.00 each: Authorised Opening balance 100,000 100,000 Created during the year 400,000 -
Closing balance 500,000 100,000
Issued and fully paid Opening balance 87,750 87,750 Bonus issue 87,750 -
Closing balance 175,500 87,750
60 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
10. Reserves
2005 2004 RM’000 RM’000
Non-distributable Share premium 20,609 108,488 Revaluation reserve 34,165 34,682
54,774 143,170 Distributable Retained profits 333,536 281,408
388,310 424,578
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 28 February 2005 if paid out as dividends.
11. Deferred tax liabilities
Movement in deferred tax liabilities (prior to offsetting of balances) during the year are as follows:
Credited to At income statement At 1.3.2004 (Note 15) 28.2.2005 RM’000 RM’000 RM’000
Deferred tax liabilities Property, plant and equipment - capital allowance 11,008 880 11,888 - revaluation 13,488 (202) 13,286
24,496 678 25,174
Deferred tax assets Provisions / allowance (174) (571) (745)
24,322 107 24,429
Deferred tax liabilities and assets are offset above where there is a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred taxes relate to the same taxation authority.
61 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
12. Operating profit
2005 2004 RM’000 RM’000
Operating profit is arrived at after crediting:
Gain on disposal of property, plant and equipment 15 - Rental income on shopping center operation 117,365 100,891
and after charging:
Allowance for doubtful debts 200 - Auditors’ remuneration 120 120 Bad debts written off -68 Depreciation 55,273 43,720 Directors’ emoluments - remuneration 852 876 - fees 1,048 930 Loss on disposal of property, plant and equipment - 106 Property, plant and equipment written off 407 144 Rental expense - land 1,048 1,022 - buildings 36,825 31,725 - equipment 61 6 - fixtures and fittings 325 358 - hostel 130 830 Royalty payable to affiliated company 9,295 8,061
The estimated monetary value of other benefits not included in salaries and other emoluments received by the Directors of the Company is RM39,300 (2004 - RM35,700).
13. Employee information
2005 2004 RM’000 RM’000 Salaries and wages 83,943 72,091 EPF contributions 9,919 8,730
Staff costs 93,862 80,821
The average number of full time employees in the Company during the financial year was 4,686 (2004 - 3,962).
14. Interest expense
2005 2004 RM’000 RM’000 Bank overdrafts 40 12 Other borrowings 947 32
987 44
62 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
15. Tax expense
2005 2004 RM’000 RM’000 Current tax expense 34,656 28,901 Deferred tax expense (Note 11) - Origination and reversal of temporary differences 107 3,799
Total tax expense 34,763 32,700
Reconciliation of effective tax expense
2005 2004 RM’000 RM’000
Profit before taxation 99,010 96,288
Income tax using Malaysian tax rate 27,723 26,960 Non-deductible expenses 7,040 5,740
Tax expense 34,763 32,700
16. Basic earnings per ordinary share Basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
2005 2004
Net profit attributable to ordinary shareholders (RM’000) 64,247 63,588
Weighted average number of ordinary shares
Issued ordinary shares at beginning of the year (‘000) 87,750 87,750 Effects of bonus issue (‘000) 87,750 87,750
Weighted average number of ordinary shares (‘000) 175,500 175,500
As the bonus issue during the current financial year is via capitalisation of share premium reserve, the effects of the bonus issue have been adjusted in deriving the comparative figure.
17. Dividend 2005 2004 RM’000 RM’000 Ordinary Final paid: 2004 - 20% per share less 28% tax (2003 - 20% per share less 28% tax) 12,636 12,636
The proposed first and final dividend of 12% per share less 28% tax, amounting to RM15,163,200 has not been accounted for in the financial statements.
63 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
18. 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 center operation and distribution center charges earned.
The business segment analysis is as follows:
Property Retailing Management Services Total 2005 2004 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Business segments Revenue from external customers 1,648,475 1,406,242 136,089 117,539 1,784,564 1,523,781
Total revenue 1,648,475 1,406,242 136,089 117,539 1,784,564 1,523,781
Operating profit 69,418 63,680 30,158 31,591 99,576 95,271 Interest expense (987) (44) Interest income 421 1,061
Profit before taxation 99,010 96,288 Tax expense (34,763) (32,700)
Net profit for the year 64,247 63,588
Segment assets 346,883 351,011 605,263 542,458 952,146 893,469 Unallocated assets 62,700 58,900
Total assets 1,014,846 952,369
Segment liabilities (348,811) (328,987) (65,045) (79,969) (413,856) (408,956) Unallocated liabilities (37,180) (31,085)
Total liabilities (451,036) (440,041)
Capital expenditure 37,666 55,087 81,571 120,609 119,237 175,696 Depreciation 36,967 29,275 18,306 14,445 55,273 43,720 Non-cash expenses other than depreciation 403 106 204 38 607 144
64 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
19. Operating leases
Leases as lessee Total future minimum lease payments under non-cancellable operating leases are as follows:
2005 2004 RM’000 RM’000
Less than one year 31,092 29,927 Between one and five years 136,267 133,860 More than five years 150,607 186,522
317,966 350,309
The Company leases a number of land and buildings under operating leases. The leases have initial periods ranging from 9 to 25 years, with an option to renew the respective leases for another 4 to 15 years.
Other than the above, the Company also leases two levels of store space in a shopping mall under an operating lease. The lease is for an initial period of twelve years, with an option to renew the lease for another twelve years. The Company also has the option to terminate the lease after the third year in the event certain conditions stipulated in the lease agreement is not fulfilled. The rental is based on the gross monthly sales.
20. Commitments
2005 2004 RM’000 RM’000
Capital commitments: Property, plant and equipment Authorised and contracted for 15,081 32,403 Authorised but not contracted for 306,679 4,318
321,760 36,721
65 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
21. Related parties
Identity of related parties The Company has a related party relationship with its Directors, its affiliated company and the affiliated company’s subsidiaries.
Transactions with Directors Significant transactions and balances with companies in which certain Directors have interest other than those disclosed elsewhere in the financial statements are as follows:
2005 2004 RM’000 RM’000
Balances
With companies in which Dato’ Abdullah bin Mohd Yusof and Ramli bin Ibrahim have interest:
Laura Ashley (Malaysia) Sdn. Bhd. Amount due from in respect of management fee receivable 12 19 Amount due from in respect of reimbursement of operational payments 118 146
AEON Credit Service (M) Sdn. Bhd. Amount due from in respect of sales through easy payment scheme financing 622 719
Transactions
With companies in which Dato’ Abdullah bin Mohd Yusof has interest:
Abdullah & Zainudin Legal fees payable 613
With companies in which Dato’ Abdullah bin Mohd Yusof and Ramli bin Ibrahim have interest:
Laura Ashley (Malaysia) Sdn. Bhd. Management fee receivable 67 70 Rental income receivable 437 380
With companies in which Dato’ Abdullah bin Mohd Yusof and Ramli bin Ibrahim have interest:
AEON Credit Service (M) Sdn. Bhd. Sales through easy payment scheme financing 4,403 4,358
The above transactions have been entered into in the normal course of business and have been established under negotiated terms.
66 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
21. Related parties (continued)
Other related party transactions Significant related party transactions other than those disclosed elsewhere in the financial statements are as follows:
2005 2004 RM’000 RM’000
Transactions Affiliated company Royalty expenses 9,295 8,061
TheseAffliated transactions company’s have subsidiariesbeen entered into in the normal course of business and have been established under negotiated terms. Purchase of merchandise 381381 - - Consultation fees 126126 - -
These transactions have been entered into in the normal course of business and have been established under negotiated terms.
22. Financial instruments
Financial risk management objectives and policies 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 center 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 center tenants. The maximum exposure to credit risk for the Company was represented by the carrying amount of each financial asset.
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.
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.
67 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
22. Financial instruments (continued)
The following table shows information about the Company’s exposure to interest rate.
Effective interest rates and repricing analysis In respect of interest-earning financial assets, 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:
2005 2004 Effective Effective interest interest rate Within rate Within per annum Total 1 year per annum Total 1 year % RM’000 RM’000 % RM’000 RM’000
Financial assets Deposits placed with licensed financial institutions 2.60 62,700 62,700 2.69 58,900 58,900
Financial liabilities Bank overdrafts 6.50 307 307 - - -
Fair Values Recognised financial instruments In respect of cash and cash equivalents, trade and other receivables and trade and other payables, 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:
2005 2004 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 40 45 35 Not practical to estimate fair value 130 - 130 -
It was not practicable to estimate the fair value of an investment representing 13% of the issued ordinary shares of an unquoted company. That investment is carried at its original cost of RM130,000 (2004 - RM130,000) in the balance sheet. At year end, the net tangible assets reported by the unquoted company were RM25,501,000 (2004 - RM17,278,000).
68 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
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 50 to 68 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Company at 28 February 2005 and its results and cash flows for the year ended on that date.
Signed in accordance with a resolution of the Directors:
………………………………………………………… Dato’ Abdullah bin Mohd Yusof
………………………………………………………… Soichi Okazaki
Kuala Lumpur, Date: 28 April 2005
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. (formerly known as Jaya Jusco Stores Bhd.), do solemnly and sincerely declare that the financial statements set out on pages 50 to 68 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 28 April 2005.
……………………………….. Poh Ying Loo
Before me:
69 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Report of the Auditors to the members of AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.)
We have audited the financial statements set out on pages 50 to 68. 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. These standards require that we plan and perform the audit to obtain all the information and explanations which we consider necessary to provide us with evidence to give reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. An audit also includes an assessment of the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. 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 in Malaysia so as to give a true and fair view of:
i) the state of affairs of the Company at 28 February 2005 and its results and cash flows for the year 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: 2013/06/06(J)
Kuala Lumpur, Date: 28 April 2005
70 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Analysis of Shareholdings analysis of shareholdings as at 29 April 2005
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 78 5.30 1,436 0.00 100 - 1,000 357 24.25 287,664 0.16 1,001 - 10,000 845 57.40 3,029,200 1.73 10,001 - 100,000 131 8.90 4,856,100 2.77 100,001 - 8,774,999 59 4.01 69,989,900 39.88 8,775,000 and above 2 0.14 97,335,700 55.46
TOTAL 1,472 100.00 175,500,000 100.00
Substantial Shareholders as per Register of Substantial Shareholders
No. Name No. of shares Percentage
1 AEON Co., Ltd. 83,711,000 47.6986 2 Employees Provident Fund Board 13,624,700 7.7634
Directors’ Interests
No. Name Direct Interest Indirect Interest
1 Dato’ Abdullah Bin Mohd Yusof 308,000 7,620,000 2 Soichi Okazaki 30,000 - 3 Masato Yokoyama 30,000 - 4 Ramli Bin Ibrahim - 280,000
71 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
List of 30 Largest Shareholders as at 29 April 2005
No. Name of Shareholders No. of Shares % of shares held
1 AEON Co., Ltd 83,711,000 47.70 2 Employees Provident Fund Board 13,624,700 7.76 3 Amanah Raya Nominees (Tempatan) Sdn Bhd 7,591,800 4.33 Skim Amanah Saham Bumiputera Permodalan National Berhad 4 Pelita Dekad Sdn.Bhd. 6,194,000 3.53 5 Malaysia Nominees (Tempatan) Sendirian Berhad 5,814,000 3.31 Great Eastern Life Assurance (Malaysia) Berhad (Par 1) 6 Cartaban Nominees (Asing) Sdn Bhd 4,907,500 2.80 SSBT Fund D26J for Emerging Markets Global Small Capitalization Fund (TEMMUF ) 7 Amanah Raya Nominees (Tempatan) Sdn Bhd 4,579,300 2.61 Amanah Saham Wawasan 2020 Permodalan Nasional Berhad 8 Cartaban Nominees (Asing) Sdn Bhd 3,789,600 2.16 Nordea Bank Danmark A/S for Unibank S.A.Luxembourg 9 Amanah Raya Nominees (Tempatan) Sdn Bhd 3,224,700 1.84 Amanah Saham Didik 10 HSBC Nominees (Asing) Sdn Bhd 2,271,000 1.29 BNP Paribas Securities Services Paris for Asian Smaller Companies Fund (AIF PLC) 11 HSBC Nominees (Asing) Sdn Bhd 2,000,000 1.14 HSBC-FS for Apollo Asia Fund Ltd 12 Syarikat Maluri Sdn Bhd 1,865,000 1.06 13 Malaysia Nominees (Tempatan) Sendirian Berhad 1,619,800 0.92 Great Eastern Life Assurance (Malaysia) Berhad (Par 2) 14 CITICORP Nominees (Asing) Sdn Bhd 1,514,000 0.86 CITITRUST Limited for Invesco Asia Balanced Fund (CBHK) 15 Status Resources Sdn Bhd 1,326,000 0.76 16 Roshayati Binti Basir 1,210,000 0.69 17 Rozana Zeti Binti Basir 1,210,000 0.69 18 Rozilawati Binti Haji Basir 1,210,000 0.69 19 Takuya Okada 1,200,000 0.68 20 Cartaban Nominees (Asing) Sdn Bhd 1,180,800 0.67 Government of Singapore Investment Corporation Pte Ltd for Government of Singapore ( C ) 21 Amanah Raya Berhad 1,070,000 0.61 SBB Double Growth Fund 22 HSBC Nominees (Asing) Sdn Bhd 1,070,000 0.61 HSBC-FS for Aberdeen Malaysia Equity Fund 23 Amanah Raya Nominees (Tempatan) Sdn Bhd 1,000,000 0.57 Sekim Amanah Saham Nasional Permodalan Nasional Berhad
72 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
No. Name of Shareholders No. of Shares % of shares held
24 Mayban Nominees (Tempatan) Sdn Bhd 995,200 0.57 Mayban Trustees Bhd for Amanah Saham Wanita (N14001980040) 25 Manulife Insurance (Malaysia) Berhad 896,000 0.51 26 HSBC Nominees (Asing) Sdn Bhd 860,000 0.49 Genesis Malaysia Maju Fund Limited 27 Amanah Raya Nominees (Tempatan) Sdn Bhd 847,100 0.48 Amanah Saham Bank Simpanan Nasional Permodalan BSN Berhad 28 MCIS Zurich Insurance Berhad 815,200 0.46 29 Cartaban Nominees (Asing) Sdn Bhd 673,600 0.38 Nordea Bank Danmark A/S for Investeringsforeningen Nordea Invest Global Value 30 Cartaban Nominees (Asing) Sdn Bhd 663,400 0.38 Government of Singapore Investment Corporation Pte Ltd for Monetary Authority of Singapore (H)
TOTAL 158,933,700 90.56
73 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Particulars of Properties Details of the Company’s properties as at 28 February 2005 are set out below:
Land/ Date of Approx. Tenure Net book Built-up Acquisition(A)/ age of (Year of value as at Description/ area Completion (C)/ building expiry for 28/02/2005 Location Existing use (sq ft) Revaluation (R) (year) leasehold) (RM’000)
Lot 7041, Leasehold 436,036/ February 1995 (R) 99 years 60,405 Mukim of Bukit Baru, commercial land/ expiring on District of Existing two-storey 200,316 13 19/12/2089 Melaka Tengah, shopping center
1 Melaka. Extension/Renovation 179,989 6 /2
Lot 23551, Leasehold 368,516/ February 1995 (R) 12 95 years 91,644 Mukim of Setapak, commercial land/ 666,694 expiring on District and State Two-storey shopping 28/03/2085 of Wilayah center and three-storey Persekutuan. car park
Lot PT 21441, Leasehold 643,753/ June 1994 (A)/ 9 99 years 69,634 Mukim of Kapar, commercial land/ 691,414 October 1995 (C) expiring on District of Klang, Two-storey shopping 09/05/2093 Selangor. center and two-storey car park
Lot PT 162010, Freehold land/ 609,840/ April 1996 (A)/ 8 Freehold 84,295 Mukim of Ulu Kinta, Two-storey shopping 794,806 August 1997 (C) District of Kinta, center and two-storey Perak. car park
1 Lot 49045, Freehold land/ 377,490/ April 2002 (A)/ 2 /2 Freehold 29,277 Mukim of Pulai, Two-storey shopping 483,299 August 2002 (C) District of Johor center including Bahru, Johor. covered car park
Lot 4086, Kawasan A, Leasehold land/ 410,815/ January 2004 (C) 1 99 years 93,981 Mukim Batu, Two-storey shopping 906,497 expiring on Daerah Kuala Lumpur, center and three-storey April 2101 Wilayah Persekutuan car park
Lot PTD 114179, Freehold land 1,308,035 March 2004 (A) - Freehold 41,745 Mukim of Tebrau, District of Johor Bahru, Johor.
Lot PT 41977, Leasehold land 550,910 April 2004 (A) - 99 years 14,244 Mukim of Cheras, expiring on District of Ulu Langat, 12/04/2103 Selangor.
Lot 3144, Freehold land 113,451 April 2004 (A) - Freehold 11,224 Mukim of Cheras, District of Ulu Langat, Selangor.
74 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
JUSCO STORES & SHOPPING CENTERS Directory
JUSCO TAMAN MALURI Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur. Tel: 03-9285 5222
JUSCO TAMAN MALURI JUSCO BANDAR UTAMA SHOPPING CENTER No. 1, Leboh Bandar Utama,
Taman Maluri Bandar Utama, Damansara, Tel: 03-9285 5222 47800 Petaling Jaya, Selangor Darul Ehsan. JUSCO PERMAS JAYA Tel: 03-7726 6266 No. 1, Jalan Permas Utara, Bandar Baru Permas Jaya, JUSCO MID VALLEY 81750 Johor Bahru, Johor. JUSCO 1 UTAMA AT3 Mid Valley Megamall, Tel: 07-386 8900 SHOPPING CENTER Mid Valley City, Bandar Utama Lingkaran Syed Putra, JUSCO PERMAS JAYA Tel: 03-7726 6033
59200 Kuala Lumpur. SHOPPING CENTER Tel:03-2284 4800 Tel: 07-386 0600
JUSCO MELAKA Leboh Ayer Keroh, 75450 Melaka Tel: 06-232 4899
JUSCO MELAKA SHOPPING CENTER Melaka
JUSCO BANDAR BARU Tel: 06-232 4899 KLANG Persiaran Bukit Raja 2, Bandar Baru Klang, 41150 Klang, Selangor Darul Ehsan. Tel: 03-3343 9366
JUSCO BUKIT RAJA SHOPPING CENTER Bandar Baru Klang JUSCO BANDAR PUCHONG JUSCO METRO PRIMA Tel: 03-3343 2166 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 JUSCO IPOH Selangor Darul Ehsan. No.2, Jalan Teh Lean Swee, Tel: 03-8070 1200 JUSCO METRO PRIMA Off Jalan Sultan Azlan Shah Utara, SHOPPING CENTER 31400 Ipoh, Tel: 03-6259 1122 Perak Darul Ridzuan. Tel: 05-549 9633 JUSCO WANGSA MAJU Jalan R1, Seksyen 1, Bandar Baru Wangsa Maju, JUSCO KINTA CITY 53300 Kuala Lumpur. SHOPPING CENTER
Tel: 03-4149 7666 Ipoh Tel: 05-548 4668 JUSCO ALPHA ANGLE SHOPPING CENTER JUSCO TAMAN UNIVERSITI Wangsa Maju No. 4, Jalan Pendidikan, Tel: 03-4149 5288 Taman Universiti, 81300 Skudai, Johor Darul Takzim. Tel: 07-521 8000
JUSCO TAMAN UNIVERSITI SHOPPING CENTER Tel: 07-520 8000
75 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Milestones
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 AEON “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 Center) our first Shopping Center, opened.
1994 AUGUST – Our Distribution Center begun operations. OCTOBER – Japanese Trainer Programme begun.
1995 JUNE – JAYA JUSCO Taman Tun Dr. Ismail closed. AUGUST – JUSCO Bandar Utama (1 Utama Shopping Center) opened. OCTOBER – JUSCO Bandar Baru Klang (Bukit Raja Shopping Center) opened.
1996 DECEMBER – JAYA JUSCO STORES BHD was listed on the Main Board of the KLSE.
1997 AUGUST – JUSCO Ipoh (Kinta City Shopping Center) opened.
1998 DECEMBER – JUSCO Melaka Shopping Center reopened.
1999 DECEMBER – JUSCO Mid Valley opened.
2000 DECEMBER – JUSCO Taman Maluri Shopping Center re-opened. – 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 Center in Alpha Angle Shopping Center, at Wangsa Maju. JULY – JUSCO Taman Universiti opened, Japan Management Training Programme reactivated.
2003 JULY – WAOH Charity Bazaar. AUGUST – Smart Wonder World opens in JUSCO Taman Maluri. OCTOBER – JUSCO Home Centre opens in JUSCO 1 Utama Shopping Center. 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 Center opened.
2004 JANUARY – JUSCO Metro Prima Tree Planting Ceremony was held. 2,000 seedlings were planted. – JUSCO Metro Prima Shopping Center 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, ÆON 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.
76 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.) will be held at Ballroom 1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 22 June 2005 at 10.30 a.m. for the following purposes:
AGENDA As Ordinary Business 1. To receive and adopt the Audited Financial Statements for the year Ordinary Resolution 1 ended 28 February 2005 together with the Reports of the Directors and Auditors thereon.
2. To declare a First and Final Dividend of 12 sen per share less 28% Ordinary Resolution 2 income tax for the year ended 28 February 2005.
3. To approve the payment of Directors’ Fees for the year ended 28 Ordinary Resolution 3 February 2005.
4. To re-elect the following Directors retiring under Article 74 of the Company’s Articles of Association :-
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. Masato Yokoyama Ordinary Resolution 7 v) Encik Ramli bin Ibrahim Ordinary Resolution 8 vi) Brig. Jen. (B) Dato’ Mohd Idris bin Saman Ordinary Resolution 9 vii) Datuk Zawawi bin Mahmuddin Ordinary Resolution 10 viii) Dato’ Chew Kong Seng Ordinary Resolution 11
5. To re-appoint Messrs KPMG Desa Megat & Co. as Auditors of the Ordinary Resolution 12 Company and to authorise the Directors to fix their remuneration.
As Special Business To consider and, if thought fit, to pass the following ordinary resolution:
6. PROPOSED RENEWAL OF 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 31 May 2005 which are necessary for the Company’s day-to-day operations subject further to the following:
77 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
(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 Ordinary Resolution 13 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.”
78 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Notice of Dividend Payment
NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Twentieth Annual General Meeting, a first and final dividend of 12 sen per share less 28% income tax in respect of the financial year ended 28 February 2005 will be paid to shareholders on 20 July 2005. The entitlement date for the said dividend shall be 4 July 2005.
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 July 2005 in respect of transfers. (b) Shares bought on the Bursa Malaysia Securities Berhad on cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.
BY ORDER OF THE BOARD
SAW BEE LEAN (MAICSA 0793472) Secretary
Kuala Lumpur Date: 31 May 2005
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 13 on the Proposed Renewal of Shareholders’ Mandate The proposed Ordinary Resolution 13, if passed, will empower the Directors from the date of the Twentieth 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 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 31 May 2005, which is despatched together with this Annual Report.
79 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
Statement Accompanying Notice of Twentieth Annual General Meeting pursuant to paragrah 8.28(2) of the Listing Requirements of Bursa Malaysia Securities Berhad
1. Directors standing for re-election at the Twentieth Annual General Meeting (20th AGM):-
Pursuant to Article 74 of the Articles of Association (i) Dato’ Abdullah bin Mohd Yusof (ii) Mr. Toshiji Tokiwa (iii) Mr. Soichi Okazaki* (iv) Mr. Tatsuichi Yamaguchi (v) Mr. Masato Yokoyama (vi) Encik Ramli bin Ibrahim (vii) Brig. Jen. (B) Dato’ Mohd Idris bin Saman (viii) Datuk Zawawi bin Mahmuddin (ix) Dato’ Chew Kong Seng
*Mr. Soichi Okazaki has indicated that he does not wish to offer himself for re-election at the 20th AGM of the Company.
2. Details of attendance of Directors at Board Meetings There were five Board Meetings held during the financial year ended 28 February 2005. Details of attendance of the Directors are set out in Statement of Corporate Governance appearing on page 36 of the Annual Report.
3. Place, Date and Time of Meeting The Twentieth Annual General Meeting of the Company will be held at Ballroom 1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 22 June 2005 at 10.30 a.m.
4. Further details of Directors standing for re-election Details of Directors standing for re-election are set out in Directors’ Profiles appearing on pages 22-25 of the Annual Report.
80 AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.)
PROXY FORM No. of shares held AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.) (Company No. 126926-H) (Incorporated in Malaysia)
I/We, of being a member/members of the abovenamed Company, hereby appoint of or failing him/her, of as my/our proxy to vote for me/us on my/our behalf at the Twentieth Annual General Meeting of the Company to be held at Ballroom 1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 22 June 2005 at 10.30 a.m. and at any adjournment thereof. My/our proxy is to vote as indicated below :
No. Ordinary Resolution For Against
Resolution 1 To receive the Audited Financial Statements for the year ended 28 February 2005 together with the Reports of the Directors and Auditors thereon.
Resolution 2 Declaration of a First and Final Dividend of 12 sen per share less 28% income tax
Resolution 3 Approval of Directors’ Fees
Resolution 4 Re-election of Dato’ Abdullah bin Mohd Yusof
Resolution 5 Re-election of Mr. Toshiji Tokiwa
Resolution 6 Re-election of Mr. Tatsuichi Yamaguchi
Resolution 7 Re-election of Mr. Masato Yokoyama
Resolution 8 Re-election of Encik Ramli bin Ibrahim
Resolution 9 Re-election of Brig. Jen. (B) Dato’ Mohd Idris bin Saman
Resolution 10 Re-election of Datuk Zawawi bin Mahmuddin
Resolution 11 Re-election of Dato’ Chew Kong Seng
Resolution 12 Re-appointment of KPMG Desa Megat & Co.
Resolution 13 Proposed Renewal of Shareholders’ Mandate for the Recurrent Related Party Transactions of a Revenue or Trading Nature
[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.]
Dated this day of 2005 Signature: Shareholder or Common Seal
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) (formerly known as Jaya Jusco Stores Bhd.) 3rd Floor, Jusco Taman Maluri Shopping Center, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur. AEON CO. (M) BHD.(126926-H) (formerly known as Jaya Jusco Stores Bhd.) We Have Moved We are pleased to announce that, effective 11 April 2004, we have relocated our head / management office to the JUSCO Taman Maluri Shopping Center. As of this date, our business address, telephone and fax numbers are as follows:
AEON CO. (M) BHD. (126926-H) (Formerly known as JAYA JUSCO STORES BHD.) Head Office 3rd Floor, JUSCO Taman Maluri Shopping Center, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur. Tel: 03-9207 2005 Fax: 03-9207 2006/2007 All JUSCO outlets, including Stores and Shopping Centers will retain their existing business addresses.