aeon co. (m) bhd.aeonretail.com.my/corporate/investor/annual/pdf/2005.pdfperformance by its...

AEON CO. (M) BHD. (126926-H) ( formerly known as Jaya Jusco Stores Bhd.)

Incorporated In MalaysiaAEON CO. (M) BHD. (126926-H) ( formerly known as Jaya Jusco Stores Bhd.)

3rd Floor, JUSCO Taman Maluri Shopping Center, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur.

Annual Report 2005

AEO

N C

O. (M

) BH

D.(126926-H

) (formerly know

n as Jaya Jusco Stores B

hd.)•

AN

NU

AL R

EPO

RT 2005

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 wideassortment of products and services to cater for their needs and modern lifestyles and, moreimportantly, 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 JuscoStores 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 byinvestors and peers in the corporate world.

A E O N C O . ( M ) B H D . ( 1 2 6 9 2 6 - H ) ( f o r m e r l y k n o w n a s J a y a J u s c o S t o r e s B h d . )

3

Ta b l e o f C o n t e n t sANNOUNCEMENT OF COMPANY’S NAME CHANGE & EGMJUSCO’S 20TH ANNIVERSARY IN MALAYSIA”WAOH” MALAYSIAN JUSCO FOUNDATIONCORPORATE ACTIVITIESHUMAN RESOURCE ACTIVITIES2004 STORES REFURBISHMENT

An Introduction to ÆON

Corporate Information, Directory & CalendarShare PriceFive Years Financial HighlightsBoard of DirectorsDirectors’ ProfilesSenior ManagementChairman’s StatementReview of Operations

CORPORATE GOVERNANCEStatement of Corporate GovernanceTerms of Reference of Audit CommitteeThe Audit CommitteeStatement of Internal ControlOther Information

FINANCIAL STATEMENTSDirectors’ ReportBalance SheetIncome StatementStatement of Changes in EquityCash Flow StatementNotes to the Financial StatementsStatement by DirectorsStatutory DeclarationReport of the Auditors

OTHERSAnalysis of ShareholdingsList of 30 Largest ShareholdersParticulars of PropertiesJUSCO Stores & Shopping Centers DirectoryMilestonesNotice of Annual General MeetingNotice of Dividend PaymentStatement AccompanyingNotice of Twentieth Annual General MeetingProxy Form

458

101314

161718192122262730

3640424344

46505152535469

70

71727475767779

8081

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 “theCompany” or “AEON CO. (M) BHD.”


4

A CHANGE FOR THE BETTER

AEON CO. (M) BHD. (126926 -H)

(formerly known as Jaya Jusco Stores Bhd.)

An Extraordinary General Meeting was held on 26 August 2004 atthe Nikko Hotel, Kuala Lumpur, to pass a number of resolutions.

The first ordinary resolution to be passed by the shareholdersof Jaya Jusco Stores Bhd. was for a proposed increase in theauthorised share capital of Jaya Jusco Stores Bhd. fromRM100,000,000 comprising of 100,000,000 ordinary shares ofRM1.00 each to RM500,000,000 comprising of 500,000,000ordinary shares of RM1.00 each.

The second ordinary resolution to be passed was for a proposedbonus issue of 87,750,000 new ordinary shares of RM1.00 eachin Jaya Jusco Stores Bhd. on the basis of one (1) new bonusshare for every one (1) existing ordinary share of RM1.00 eachheld in Jaya Jusco Stores Bhd.

An ordinary resolution for proposed shareholders mandate fora new recurrent related party transaction of a revenue ortrading nature was also passed.

In addition, the shareholders overwhelmingly passed a specialresolution to change the Company name from Jaya Jusco StoresBhd. to AEON CO. (M) BHD. This name change was carried outto create a common identity among the numerous companiesunder the international ÆON group of companies.

A similar name change took place in Japan in 2001 whenJUSCO Co., Ltd., changed its name to ÆON Co., Ltd., toenhance the image and stature of the Company.

In a press statement, Dato' Abdullah Mohd. Yusof, chairman ofthe Company, said that "Following the name change inMalaysia, it is important for the Company to perform better.More emphasis will be placed on the quality of products,pricing and customer service."

Extraordinary General Meeting on 26 August 2004The EGM in progress. Shareholders arriving and registering themselves.

Announcement Of Company’s Name Change

The Company is pleased to announce that effective from 2 September 2004, the Company has changed itsname 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 ina Latin word meaning 'eternity'. For us here at ÆON, the word is imbued with a deep sense of purpose. As theCompany renews its corporate identity for the 21st century, the Company defines its mission as "creating a futureof limitless promise".

Through this change of name, the Company wishes to create a new sense of awareness in its employees for anew beginning, propelling the Company into greater heights. The Company also pledges to fulfillcustomers' expectations at all times.

However, all AEON CO. (M) BHD. outlets will retain the brand name of JUSCO, which has become part of itsstores' and shopping centers’ identity over the years.


5

Celebrating 20 Successful Years In MalaysiaJUSCO’S 20TH ANNIVERSARY CELEBRATIONS

On 15 September 2004, JUSCO celebrated 20 successful and memorable years in Malaysia, with an anniversary galadinner at the Mandarin Oriental Hotel in Kuala Lumpur. TheGuest of Honour was Datin Paduka Seri Endon Mahmood, thePrime Minister’s wife.

Members of the top management from our affiliated Companyin Japan, ÆON Co., Ltd. were present, including the HonoraryChairman Mr Takuya Okada, who was instrumental in setting upJUSCO stores in Malaysia during the early years.

The first highlight of the night was the announcement of the Company's name change from Jaya Jusco Stores Bhd toAEON CO. (M) BHD. It was also announced that the JUSCObrand name would continue to be used in all the Company'sstores and shopping centers in Malaysia.

As the guests dined, a special video was shown, presenting thetree planting ceremony held earlier that day. It was followed byvideos of the ÆON group of companies in Japan and Malaysia.

The second highlight was the official ceremony transformingthe "With All Our Hearts" Charity Fund to the new "With AllOur Hearts" Malaysian Jusco Foundation, and a livelyperformance by its Ambassador, Siti Nurhaliza. To get thenew Foundation off to a good start, the Company made apledge to raise RM300,000 to build a "Rumah Tunas Harapan"orphanage home for the Jabatan Kebajikan MasyarakatMalaysia (Social Welfare Department of Malaysia).

Mr. Okada, Datin Paduka Seri Endon Mahmood and Dato’ Abdullah officiate the Company’sname-change ceremony.

All the guests enjoyed the sumptuous dinner and entertainment .

Let’s Celebrate! A Sale To Remember

The 20th Anniversary Dinner

With this being a significant year, AEON CO. (M) BHD.decided to tie in their annual sale event with the Company's 20th Anniversary Celebrations. The aptly named "Let'sCelebrate Sale!" was held from 15 September till 10October 2004.

A special 20-page advertisement pullout was in The Starnewspaper on 14 September to launch the event,announcing all the ensuing events, discounts, J Cardprivileges, a 2-page advertorial and congratulatorymessages from the Company's many business partners.

Customers enjoyed big discounts of up to 70% storewide, andfor the most loyal customers, the J Card Members, were givenadditional privileges and exclusive 'members-only' discounts.

The Company sourced out a number of items of householdmerchandise, including Panasonic living room fans, stainlesssteel pressure cookers, Sally armchairs and contour foampillows. These "20th Anniversary Edition" merchandise werethen offered to J Card Members at once-in-a-lifetime prices.

Other 20th Anniversary merchandise included the "morningdrop" durian, which is reputedly the best of the crop, and thelocal dragon fruit from farms in the Kluang district inJohor. These dragon fruit are grown organically, and are

heavier, extra fleshy, juicier and tests have shown that theyare 11% sweeter than others.

In addition to these, the Company has also introduced a range of affordable men's suits.


6

ÆON Woodland Launched by Tun Dr. Mahathir MohamadOn 13 September 2004, the Company held a special dinner inhonour of Tun Dr. Mahathir bin Mohamad, the former PrimeMinister of Malaysia.

Mr Takuya Okada, the Honorary Chairman of ÆON Co., Ltd.hosted the dinner for Tun Dr. Mahathir and his wife at theWaraku Japanese Dining House in Kuala Lumpur.

In his speech, Mr Okada expressed his heartfelt gratitude to Tun Dr. Mahathir for inviting ÆON to Malaysia to helpmodernise the local retail industry, 20 years ago. In turn,

Tun Dr. Mahathir thanked ÆON for making its mark in thecountry's economic and social scene. He also hoped thatÆON would continue to excel.

Tun Dr. Mahathir bin Mohamad was invited to sign a plaque,together with Mr Takuya Okada, for the launching of theMalaysia-Japan Friendship Forest. This plaque was placed at theforest site, which was named the ÆON Woodland, a specialarea of about eight hectares set aside in Paya Indah Wetlands.

Mr. Takuya Okada signs the plaque.

September 2004. October 2004. December 2004.

February 2005. April 2005. Current.

Tun Dr. Mahathir thanks ÆON in his speech. The Malaysia-Japan Friendship Forest plaque.

ÆON Plants 30,000 Trees in Paya Indah WetlandsIn the early morning hours of 15 September 2004, threethousand Malaysian and Japanese nature enthusiasts gatheredin the Paya Indah Wetlands in Dengkil, Selangor, to take part inthe massive tree planting exercise.

This tree planting ceremony was organised by AEON CO. (M)BHD. to mark its 20th Anniversary in Malaysia, and stronglysupported by the ÆON Environment Foundation. Lending ahand were the Japanese Ambassador to Malaysia, Mr TadashiImai, ÆON Environment Foundation Chairman, Mr Takuya

Okada and AEON CO. (M) BHD. Chairman, Dato' Abdullah bin Mohd. Yusof.

Besides the 1,000 volunteers, staff members and businessassociates of ÆON Co., Ltd., who had flown in from Japan, theother 2,000 volunteers from Malaysia came from a mix ofcustomers, school children, suppliers, nature lovers and ÆONstaff members. All in all, they planted approximately 30,000saplings of different tree and shrub varieties, including anumber of fruit-bearing trees.


7

On 16 September 2004, a special meeting was held with Mr Takuya Okada at the Nikko Hotel in Kuala Lumpur. It washeld in conjunction with the Company's name change fromJaya Jusco Stores Bhd to AEON CO. (M) BHD.

In his speech, Mr Okada touched on the Company's guidingprinciple of peace, which it follows in carrying out

its business practices. When there is peace, business will prosper.

Mr Okada also touched on the early days of ÆON in Malaysiaand Japan. It is hoped that this will give the Company's staff in Malaysia the impetus to work together and propel theCompany to greater heights.

Following the Company's name change, all the Company'sstaff members in Malaysia underwent a re-entry ceremony on20 September 2004 and looked forward to a new beginning inAEON CO. (M) BHD.

All employees were asked to start afresh in the new Company,in an effort to move forward and take the Company to newheights.

This re-entry ceremony was conducted to ensure staff realisethat they now live in a new era. Consumers have less time toshop but want quality merchandise that complements their

new lifestyles. They are more knowledgeable and theirexpectations of a leading retailer are greater.

With the Company's name change, it is hoped that all staffmembers would start anew and work hard to meet today'schallenges. To further promote this new awareness, uniformedstaff members were given new uniforms to signal the start ofthe change.

A Special Meeting with Mr Takuya Okada

A Re-birth at the Re-entry Ceremony

Mr. Okada poses with members of AEON CO. (M) BHD.’s staff.

Mr. Okazaki leads the pledge. AEON CO. (M) BHD. staff members recite their pledge.


8

From Charity Fund to Malaysian Jusco Foundation

In conjunction with the tree planting ceremony at Paya IndahWetlands by AEON CO. (M) BHD., an "Adopt A Plant ForCharity" campaign was held at JUSCO 1 Utama ShoppingCenter on 28 August 2004 and 4 & 5 September 2004.

Potted plants were put up for sale at RM5.00 each. Proceeds fromthe sale were channeled to the "With All Our Hearts" MalaysianJusco 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 ourless fortunate children and to spread the message ofconserving the environment.

Continuing Our Mission With FervourThe "With All Our Hearts" Malaysian Jusco Foundation wasofficially launched during JUSCO's 20th Anniversarycelebration gala dinner on 15 September 2004.

Born from AEON CO. (M) BHD.'s established "With All OurHearts" Charity Fund, the new foundation continues with itsmission: to be continuously involved in fund-raising activitiesand events for the benefit of deserving Malaysians,especially children.

By becoming a full-fledged Foundation which will be governmentregulated, the "With All Our Hearts" Malaysian Jusco Foundationwill be fulfilling even larger social responsibilities in Malaysia.

First Annual General MeetingThe new "With All Our Hearts" Malaysian Jusco Foundationheld its first Annual General Meeting on 7 March 2005 at theCrown Plaza Mutiara Hotel (formerly known as Mutiara Hotel)in Kuala Lumpur.

Amongst the important matters discussed and presented atthe AGM was the Committee's report on the activities of theFoundation from the date of its registration on 17 June 2004 tillthe end of the fiscal year, 31 December 2004.

Other matters on the agenda were the reception of theTreasurer's report and audited accounts for the financialyear ending 31 December 2004, the election of new

committee members and the appointment of auditors forthe year 2005.

To get the new Foundation off to a running start, AEON CO. (M)BHD. pledged, during the official launch of the Foundation, toraise RM300,000 to set up a "Rumah Tunas Harapan" for theJabatan Kebajikan Masyarakat Malaysia.

"Rumah Tunas Harapan" is an orphanage that will give moreMalaysian children the opportunity to live in a positiveenvironment, with the love and care of "parents" in the comfortof a complete home.

In conjunction with this significant event, a scale model of theorphanage was presented to representatives of JabatanKebajikan Masyarakat.

Our Promise: A Brand New Home for Rumah Tunas Harapan

Adopt A Plant

WITH ALL OUR HEARTS

Datin Paduka Seri Endon Mahmood launches the new Foundation.

The Malaysian Jusco Foundation‘s 1st AGM in progress.

Dato’ Abdullah presenting the scale model house.


9

AEON CO. (M) BHD. has identified a house in Bukit Beruntung,Rawang, to be the "Rumah Tunas Harapan". It will be renovatedand fully furnished before being handed over to the JabatanKebajikan Masyarakat Malaysia, who shall be responsible forthe daily operations and needs of the home.

To raise these funds, AEON CO. (M) BHD. organised a "With AllOur Hearts" Charity Gala Dinner, which also coincided withJUSCO's 20th Anniversary celebrations.

The highlight of the Gala Dinner was the appearance of SitiNurhaliza, ambassador for the "With All Our Hearts"

Malaysian Jusco Foundation, who performed some of her hitsongs, as well as the "With All Our Hearts" theme song.Popular artiste Afdlin Shauki was also engaged to perform atthe function.

The "With All Our Hearts" Charity Gala Dinner received atremendous response from customers and businessassociates of the Company, with every single seat being sold,raising RM262,006 for the project.

The "With All Our Hearts" Charity Tour 2004

The "With All Our Hearts" Charity Gala Dinner 2004

Siti enthralls the children with her stories.

"Program Sesama Sayang" - Visit To Hospital MelakaOn 25 April 2005, AEON CO. (M) BHD. and Hospital Melakajoined hands in bringing 100 children together to spend sometime with Siti Nurhaliza, the "With All Our Hearts" MalaysianJusco Foundation's ambassador, and to enjoy some genuinelove and affection.

Held under the "Program Sesama Sayang Khas Bersama SitiNurhaliza", the children were entertained to a short story tellingsession by Siti and treated to a bag of healthy goodies each.

AEON CO. (M) BHD. looks forward to many more years of servingthe less fortunate and disabled Malaysians especially from thesurrounding communities in which the Company has operations.

With the new "With All Our Hearts" Malaysian JuscoFoundation off to a successful start, AEON CO. (M) BHD. haskept the momentum going strongly.

The year-end festive season was the perfect opportunity tospread some of the festive joy. In a series of weekend eventsheld at four JUSCO Shopping Centers (JUSCO 1 Utama, BukitRaja, Alpha Angle and Kinta City) beginning 30 October 2004, theCompany 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 ofRM100 to spend on festive attire were given to each orphan.

The Company also presented festive hampers to theorphanages involved for the festive season.


10

Health Campaign with Sedaya College

Food provisions being presented to victims of the tsunami. The cheque being presented to the Star and a letterof acknowledgement.

Relief for Tsunami VictimsAEON CO. (M) BHD. was amongst the first corporations to sendfood provisions to the tsunami victims in Penang and Kedah viathe local state authorities, including 9,600 bottles of mineral water,9,600 cans of sardines and 10,800 packs of cream crackers.

In response to numerous requests from JUSCO's customersand staff members, AEON CO. (M) BHD. held a donation drivefrom 31 December 2004 till 9 January 2005 for victims of thetragic tsunami that hit South Asia on 26 December 2004.

A generous total of RM151,436.63 was collected and donated tothe Tabung Bantuan Bencana Negara via the Star newspaper.

At the same time, in Japan, our affiliated company ÆON Co.,Ltd. and the ÆON 1% Club donated 10 million yen (aboutRM360,000) to the Malaysian Embassy in Japan. All JUSCOStores and offices in Japan also had a donation campaign forthe same cause and the funds collected were given throughUNICEF in Japan.

To promote better health awareness amongst members of the community, a public health campaign was held atJUSCO Taman Maluri in July 2004. It was organisedtogether with the School of Pharmacy, University CollegeSedaya International (UCSI).

Different counters were set up to provide various healthscreening tests, together with an exhibition on medicine,

drugs and healthy life. Customers were able to check theirbody mass index to determine their ideal weight, as well astheir blood pressure, glucose and cholesterol levels, and'smokerlyzer' tests to determine whether one was a heavy,regular or non-smoker.

In line with the aim of Japan’s ÆON Environmental Foundation tobeing environmentally responsible, JUSCO's new BiodegradableShopping Bag was launched at the JUSCO Bukit Raja ShoppingCenter on 20 December 2004.

Conventional plastic bags is toxic and take hundreds of years to break down. These new shopping bags are made ofOxoBiodegradable™ Plastic, which incorporates TDPA®

(Totally Degradable Plastic Additives). Such plastics have acontrolled lifespan and leave non-toxic residues. They aredesigned to reduce plastic pollution, in turn reducing landfillvolume and greenhouse gases.

The ÆON Environmental Foundation was established in 1991with the primary objective of doing environment conservationwork, to "protect and nurture nature".

Biodegradable Plastic Bags

Doing Our Part For SocietyCORPORATE ACTIVITIES

Dato’ Seri Ong Ka Ting officiates the launch of JUSCO’s new biodegradable shopping bag.


11

Agriculture Mega SaleTo commemorate the 100th Anniversary of the AgricultureDepartment, a Mega Sale and Promotion of AgriculturalProduce was held in JUSCO Alpha Angle shopping center from3 to 6 March 2005.

The official launch was held on 4 March 2005, and numerousactivities and demonstrations including traditional cake makingwere held over the four day affair.

State Agriculture Departments from all over the countryparticipated in this fair. Customers had the rare opportunity topurchase a large variety of local produce direct from the farm.The response was overwhelming as customers clamoured forthe most popular items on sale, especially the fresh fruit, cakesand other traditional products.

Customers selecting from a large variety of local produce ‘fresh from the farm’.

National Landscape Day Drawing Contest"Bunga Raya Semarak Negara" was the theme of this year’schildren's drawing and colouring contest, which was held inconjunction with the National Landscape Day on 13 March 2005.National Landscape Day is usually observed every year in March,and it encourages us to appreciate our surrounding environmentand the greenery we have been blessed with in this country.

The response to the drawing and colouring contest, which washeld at all our JUSCO shopping centers, was extremely good,with numerous varieties of our national flower being portrayedin many different colours.

Budding Malaysian artists pose with their prizes. The children worked hard at their drawings.

Reaching Out To Our Customers


12

A New Name, A Brand New OfficeThe Company's fresh new beginning with its official namechange to AEON CO. (M) BHD. was also the perfect time tomove to a new office.

On 18 April 2005, Mr Soichi Okazaki, our Managing Director,and Mr Masato Yokoyama, our Executive Director, marked theofficial opening of our brand new headquarters, in a simpleribbon-cutting ceremony.

Now located at the JUSCO Taman Maluri Shopping Center, ournew office offers many new, improved facilities for our staffmembers, including new meeting and conference rooms,comfortable new lounge and waiting areas for our visitors andbusiness partners.

The official opening of AEON CO. (M) BHD.’s new headquarters was a simple, elegant affair.

Eco Products International FairAEON CO. (M) BHD. and its Japanese counterpart ÆON Co.,Ltd. participated in the Eco Products International Fair at theMid Valley Megamall in Kuala Lumpur, from 2 to 4 September2004. The Eco Products International Fair has been an annualevent in Japan since 1999, and this year in Malaysia, 60 localand foreign companies took part in the exhibition.

ÆON presented its locally sourced organic vegetables, whichare grown in an environment-friendly manner and are free of

chemicals. This makes them a healthy and great tasting choicefor customers.

ÆON Co., Ltd. displayed a variety of items under its in-houseTopValu, brand from Japan. A new sub-brand of supermarketmerchandise, Green Eye, was also introduced to visitors.Samples of one particular Green Eye product, organic prunes, wereoffered to visitors, many of whom enjoyed their authentic taste.

Dato’ Seri Rafidah Aziz sampling the authentic taste of organic prunes. ÆON’s booth at the Eco Fair.


Continuing To Improve From WithinHUMAN RESOURCE ACTIVITIES

13

The Institute of Professional Development (IPD), OUM, is oneof the leading schools for adult learning programmes. IPDconducts career development programmes for the employeesof AEON CO. (M) BHD.

On 10 June 2004, the third batch of graduates in RetailOperations had their graduation and certificate presentationceremony in OUM. It was attended by Mr Soichi Okazaki,Managing Director of AEON CO. (M) BHD., and YBhg Prof TanSri Datuk Dr Anuwar Ali, President/Vice-Chancellor of OUM,who addressed the graduating students.

Cik Musliha Abdul Ghani was awarded the President's Prize foroutstanding achievement, while Cik Fauziah Mohd Amin wonthe Managing Director's Prize. Two OUM Scholarship Awardswere also given, to Encik Md Sazali Jazman and Cik Haryati Azis.

The third annual "Show & Tell" Cashier Contest was held from1 October to 31 December 2004, followed by a Grand CashierService & Skill Tournament 2005 on 26 February 2005, at theCititel Mid Valley, Kuala Lumpur.

The tournament, first of its kind in Malaysia, was launchedin 2003. Thanks to the overwhelming response, it is nowbeing held annually as part of the Company's efforts toupgrade customer service and upholds the Company'sCustomer First policy.

Customers were asked to fill in a contest form after making apurchase, for the opportunity to win JUSCO Gift Vouchersworth up to RM200. The response was very encouraging, withover 144,000 customers votes collected.

The best cashier from each of our 11 JUSCO Stores waschosen for the Tournament, which was judged by a panel ofreputable government and NGO officials and personnel. Theeventual champion this year was 26-year-old Encik Ali Yunusfrom JUSCO Taman Maluri.

"Show & Tell" - Finding Our Best Cashier

No. ofstudents

Graduationdate

88

51

49

8 April 2003

12 Dec 2003

10 June 2004

Certificate in Retail Operations 1



Batch

No. of students

53

61

60

69

31

43

Diploma in Management (Retailing) 1




Certificate in Retail Operation 4

Certificate in Retail Operation 5

Batch

AEON CO. (M) BHD. employees current students:

Our 3rd Batch of Employees Graduate with DistinctionAEON CO. (M) BHD. employees graduated:


14

Leading The Way In Freshness And VarietyDEVELOPMENTS 2004: BRAND NEW JUSCO SUPERMARKETS

In our continuous efforts to modernise our stores with the latestretailing concepts, and enhance our customers' shoppingexperience, the Company has embarked on a program toupgrade our JUSCO Supermarkets.

JUSCO Ipoh's new Supermarket is now double its previous sizeand was given a soft opening on 6 January 2005. One of thenew sections is Palette, the wine shop. With a sales area thatis 3 times its previous size, it offers Ipoh's largest assortment ofinternational wines, displayed by country of origin.

Deli Town is a new-concept deli section that sells non-halalfoodstuff, including ham, sausages, meat floss, barbecue pork,

canned food and fresh take-away dim sum, prepared by themost famous dim-sum shop in Ipoh.

One of the highlights of the new Supermarket is the WetMarket section, offering daily 'fresh-from-the-sea' food andperishable items at regular wet-market prices.

In addition, the entire second floor of JUSCO Ipoh wasrenovated, and now offers a bigger Golf Equipment section,Electrical department, a mini-Home Centre, a sectiondedicated to Flowers & Handicraft, and a Contemporary HomeFashion department.

Fresh fruits on display. Products are displayed in easy-to-find rows.

JUSCO IpohJUSCO Ipoh boasts the largest selection of international wines and non-halal foodstuff. The new-concept Health and Beauty Care department.

JUSCO Ipoh’s fresh leafy vegetables are very popular.


15

The new supermarket at JUSCO Bandar Baru Klang re-openedon 5 August 2004. Some of the enhancements included the newOpen Kitchen concept for better hygiene, a misting system, anew-concept Health & Beauty Care department, live fish

aquariums, a sushi section and a Delica section. In addition, forfast comfortable service, there are now 18 cashier counters andbusiness hours have been extended till 11pm daily.

JUSCO Bandar Baru Klang

The new Supermarket at JUSCO Wangsa Maju opened on 30October 2004. The new JUSCO Wangsa Maju Supermarkethas an Open Kitchen concept for better hygiene, a misting

system to keep the leafy vegetables fresh, and a new-conceptHealth & Beauty Care department, plus new fresh fish, sushiand Delica sections, as well as additional cashier counters.

JUSCO Wangsa MajuJUSCO Wangsa Maju’s new fresh vegetable, meat and Health and Beauty Care sections.

A new Delica corner, new displays and live fish aquariums.

The new misting system keeps the vegetables fresh.


16

An Introduction to ÆON

AEON CO. (M) BHD. (formerly known as Jaya Jusco StoresBhd.) is a leading retailer in Malaysia with a total revenue ofRM1.78 billion in the financial year under review. The Companywas incorporated on 15 September 1984. AEON CO. (M) BHD.was set up in response to the Malaysian Government’sinvitation to ÆON Japan to help modernise the retailingindustry in Malaysia. The ‘JUSCO’ name today is wellestablished among Malaysians as well as foreigners, especially due to its association with the international ÆONgroup of companies.

ÆON has established itself as a leading chain of generalmerchandise stores. ÆON’s constant interior redecoration ofstores, to project an image designed to satisfy the everchanging needs and desires of consumers, is clear evidence ofthis. The Company’s performance has been further enhancedby the management’s acute understanding of target marketneeds and the provision of a correct product-mix.

ÆON’s stores are mostly situated in suburban residentialareas, catering to the vast middle income group.

The ÆON group of companies consists of ÆON Co., Ltd., andmore than 100 consolidated subsidiaries and affiliated companies.In addition to its core general merchandise stores (GMS) plus itssupermarket and convenience store operations, ÆON is alsoactive in specialty store operations, shopping center development,operations and services as well as other operations.

ÆON group of companies is an integrated Japanese retailerand is active not only in Japan but also in Southeast Asia, Chinaand North America.

At all times, in every market, ÆON's activities are guided bythe unchanging 'Customer First' philosophy. Its aim is tosurpass expectations by combining excellent products withunique personal services that enhance the shoppingexperience to make the customers smile every time they shop.

OUR PRINCIPLEregardless of how times may have changed, is to serve the ‘Customer First’. Weare always mindful of the three keywords which make up the essence andcharacter of the retail industry and must be considered in any development:‘peace’, ‘people’ and ‘community’. Ours is a person-to-person business and ourexistence is deeply intertwined with the people of the regions and societies inwhich we serve. These precepts remain the same wherever we do business,where we act as a contributing member of the local community.

OUR STRATEGYis to establish a solid competitive position and achieve continuous growth.Two keycomponents underlying this strategy are:

• Accelerating Shopping Center Development. We are channeling our resourcestowards developing attractive, integrated commercial facilities which ourcustomers can fully enjoy, such as regional shopping center andneighbourhood shopping center. This segment also involves leasing shoppingspace 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 dailynecessities, apparel and household goods (including bedding and bathroomproducts) to specialised products such as home appliances, sporting goodsand cosmetics.

OUR GOALis to operate as an “international-scale retailing group”, recognised for excellencenot only in Japan, but also in other nations. The international recognition we areworking to achieve is not one which can be measured merely in quantifiable termsof size, growth and profitability. We hope to be competitive at the global level inintangible aspects such as customer satisfaction and corporate citizenship. We arededicated to the idea of “quality management” to further enhance our capabilities.

Our guiding principle has always been to serve the‘Customer First’.

Mr. Okazaki and ÆON staff members help to paint Rumah TitianKasih, a home for single mothers and abandoned children.


17

Board of Directors• Dato’ Abdullah bin Mohd Yusof

(Chairman) • Mr. Toshiji Tokiwa• Mr. Soichi Okazaki• Mr. Masato Yokoyama• Mr. Tatsuichi Yamaguchi• Encik Ramli bin Ibrahim• Brig. Jen. (B) Dato’ Mohd Idris bin Saman• Datuk Zawawi bin Mahmuddin• Dato’ Chew Kong Seng• Mr. Nagahisa Oyama (Alternate Director to Mr. Soichi Okazaki)

Secretaries• Tai Yit Chan (MAICSA 7009143)• Saw Bee Lean (MAICSA 0793472)

Registered Office3rd Floor, JUSCO Taman Maluri Shopping Center,Jalan Jejaka, Taman Maluri,Cheras, 55100,Kuala Lumpur.Tel: 03-9207 2005Fax: 03-9207 2006 / 03-9207 2007

AuditorsKPMG Desa Megat & Co. (AF0759)Chartered Accountants,Wisma KPMG,Jalan Dungun,Damansara Heights, 50490 Kuala Lumpur.

RegistrarsTenaga Koperat Sdn. Bhd. (118401-V)20th Floor, Plaza Permata,Jalan Kampar,Off Jalan Tun Razak,50400 Kuala Lumpur.Tel: 03-40416522Fax: 03-40426352

Stock Exchange ListingThe Company is a public listed company, incorporated anddomiciled in Malaysia and listed on the Main Board of the BursaMalaysia Securities Berhad.

Homepagehttp://www.jusco.com.my

Principal Bankers• Bank of Tokyo-Mitsubishi (Malaysia) Berhad

(302316-U)• Malayan Banking Berhad (3813-K)• Bumiputra Commerce Bank Berhad (13491-P)

Corporate Informationand Directory Corporate Calendar

May 2004

Notice of Annual General Meeting

24 May 2004

June 2004

Annual General Meeting

15 June 2004

January 2005

Quarterly Results Announcement

3rd Quarter – 19 January 2005

April 2005

Change of Registered Office - Effective Date

11 April 2005


4th Quarterly – 28 April 2005

August 2004

Notice of Extraordinary General Meeting

3 August 2004

Extraordinary General Meeting

26 August 2004

October 2004

Bonus Issue Allotment

13 October 2004

Bonus Shares Listing

18 October 2004


2nd Quarter – 20 October 2004

July 2004

Payment of Dividend

Book Closure – 5 July 2004Payment – 22 July 2004


1st Quarter – 23 July 2004

September 2004

Corporate Name Change

2 September 2004

Corporate Name Change Announcement

6 September 2004

Stock Code Name Change

13 September 2004

Bonus Issue Book Closure Announcement

13 September 2004

Bonus Issue Book Closure Date

30 September 2004


18

Share PriceStock Code: 6599Stock Name: AEON

Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb

5.90* 5.90* 5.80* 5.60* 5.55* 5.50* 5.50* 5.45 4.92 4.98 5.05 4.98

5.50* 5.60* 5.40* 5.20* 5.45* 5.30* 5.30* 4.80 4.80 4.88 4.96 4.90

5172 2423 4533 1117 1702 1208 758 5272 4066 3342 5569 443

High (RM)

Low (RM)

Volume (‘000)

2004 / 2005

Mar

‘04

Apr

‘04

May

‘04

Jun

‘04

Jul

‘04

Aug

‘04

Sep

‘04

Oct

‘04

Nov

‘04

Dec

‘04

Jan

‘05

Feb

‘05

High (RM)

*Note: Share pr ice per share has been ad justed for the bonus issue undertaken by the Company dur ing the year.

Low (RM) Volume

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

1000

0

2000

3000

4000

5000

6000

RM Vol (‘000)


19

Five Years Financial Highlights

* The earn ings per share for current year is ca lcu lated based on the number of ord inar y shares of 175,500,000.Comparat ive earn ings per share informat ion has been restated after ad just ing for the bonus issue undertaken by theCompany dur ing the year.

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

For Five Years - As at 28 & 29 February


20

Revenue

Profit Attributable to Shareholders

63.6

46.0

53.9

60.5

64.2

990.0

1,200.6

1,368.3

1,523.8

1,784.6

2,000

1,750

1,500

1,250

1,000

750

500

250

0

00/01 01/02 02/03 03/04 04/05

RM million

Financial Year

70

60

50

40

30

20

10

0

00/01 01/02 02/03 03/04 04/05

RM million

Financial Year


21

(Seated from left to right)

Mr. Toshiji Tokiwa

Non-Independent Non-Executive Vice Chairman

Dato’ Abdullah bin Mohd Yusof

Non-Independent Non-ExecutiveChairman

Mr. Soichi Okazaki

Managing Director

(Standing from left to right)

Brig. Jen. (B) Dato’ Mohd Idris bin Saman

Independent Non-Executive Director

Mr. Tatsuichi Yamaguchi

Non-Independent Non-Executive Director

Dato’ Chew Kong Seng


Datuk Zawawi bin Mahmuddin


Encik Ramli bin Ibrahim

Non-Independent Non-Executive Director

Mr. Masato Yokoyama

Executive Director

Board of Directors


22

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 JayaJusco 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, exceptfor traffic summons, if any.

Directors’ Profiles

Dato’ Abdullah bin Mohd Yusof (66),

(Malaysian) Non-Independent Non-Executive Chairman

Dato’ Abdullah bin Mohd Yusof wasappointed the Chairman of AEON CO.(M) BHD. (formerly known as Jaya JuscoStores Bhd.) on 26 October 1984. Heholds a Bachelor of Law (Honours) fromUniversity of Singapore, which heobtained in 1968. He has more than thirty(30) years of experience as an Advocate& Solicitor. He started his career with Skrine& Co., as a Legal Assistant in 1968 beforestarting his own partnership under thename of Tunku Zuhri Manan & Abdullah,Advocates & Solicitors in 1969 andsubsequently renamed the law firm toAbdullah & Zainudin, Advocates andSolicitors. He sits on the Board ofDirectors of MMC Corporation Berhad(formerly known as Malaysia MiningCorporation Berhad), Tronoh ConsolidatedMalaysia Berhad (formerly known asTronoh Mines Malaysia Berhad),Tradewinds Corporation Berhad (formerlyknown as Pernas International HoldingsBerhad) and IJM Berhad, all of which arecompanies listed on the Bursa MalaysiaSecurities Berhad. and sits on the Boardof Directors of several private limitedcompanies. He is a member of theRemuneration & Nomination Committee ofthe Board. Dato’ Abdullah bin Mohd Yusofhas attended all the five (5) Board meetingsheld in the financial year. He holds 308,000ordinary shares directly and 7,620,000ordinary shares indirectly in the Company.

Mr. Toshiji Tokiwa (65),

(Japanese) Non-Independent Non-Executive Vice Chairman

Mr. Toshiji Tokiwa was appointed a Non-Executive Vice Chairman of AEON CO.(M) BHD. (formerly known as JayaJusco Stores Bhd.) on 16 June 2000.He holds a Bachelor of Law degreefrom Keio University, Japan, which heobtained in 1963. He joined The Dai-IchiKangyo Bank Ltd., in 1963 as aManagement Trainee. In 1993, he waspromoted to the position of Directorand General Manager of the New YorkBranch of The Dai-Ichi Kangyo BankLtd., in New York, USA. Subsequently,he was the Senior Managing Directorof The Dai-Ichi Kangyo Bank Ltd., inJapan from 1995 to 1996. He joinedChuo Real Estate Co. Ltd., a companyprincipally involved in the leasing andmanagement of office building, as thePresident and CEO from 1996 to 2000and was also a Non-ExecutiveCorporate Auditor of Fujitsu GeneralCo. Ltd., from 1997 to 2000. He joinedÆON Co., Ltd. as a Non-ExecutiveDirector in 1999 and was subsequentlyappointed as the Chairman of ÆONCo., Ltd. in 2000. Mr. Toshiji Tokiwa hasattended four (4) out of the five (5)Board meetings held in the financialyear. He does not hold any shares inthe Company.

23


Mr. Soichi Okazaki (46),

(Japanese) Managing Director

Mr. Soichi Okazaki was appointed theManaging Director of AEON CO. (M)BHD. (formerly known as Jaya JuscoStores Bhd.) on 19 June 2001. He holdsa Bachelor of Arts in Commerce fromToyo University, in Japan, which heobtained in 1981. He has more thantwenty (20) years of experience in theretail industry. He joined ÆON Co., Ltd.of Japan in 1981 and has worked inseveral Asian countries. From 1990 to1995, he was attached to Jusco Stores(Hong Kong) Co. Ltd. In 1995 to 1998 hewas a Director of Guangdong JuscoTeem Stores Co. Ltd. in China. He wasseconded to AEON CO. (M) BHD.(formerly known as Jaya Jusco StoresBhd.) in 1998 to be in charge ofMarketing, Business Development, StoreOperations and Shopping CenterManagement. Mr. Okazaki initiatedseveral successful business strategies,which has contributed to the growth ofAEON CO. (M) BHD.’s (formerly knownas Jaya Jusco Stores Bhd.) performancein particular during the Asian financialcrisis in 1997 - 1998. He is also aDirector of Laura Ashley (Malaysia) Sdn.Bhd. Mr. Soichi Okazaki has attended allthe five (5) Board meetings held in thefinancial year. He holds 30,000 ordinaryshares directly in the Company. TheAlternate Director for Mr. Soichi Okazakiis Mr. Nagahisa Oyama.

Mr. Masato Yokoyama (52),

(Japanese) Executive Director

Mr. Masato Yokoyama was appointedan Executive Director of AEON CO. (M)BHD. (formerly known as Jaya JuscoStores Bhd.) on 26 October 2001. Heholds a Bachelor of Arts in Commercefrom Waseda University in Japan,which he obtained in 1976. He joinedÆON Co., Ltd. in 1976 and was theStore Manager of Ishioka Store prior tohis secondment to AEON CO. (M)BHD. (formerly known as Jaya JuscoStores Bhd.) in 1993. Mr. Yokoyamaheld the position of Store Manager ofJUSCO Taman Maluri from 1993 to1998. He was promoted to become theSenior Softline Merchandising Managerfrom 1998 to 1999 and the SeniorOperations Manager from 1999 to2000. Currently, Mr. Masato Yokoyama isthe Executive Director in charge of StoreOperations, Human Resource, Finance,Shopping Center Management, ShoppingCenter Development, Administration andSecurity. Mr. Masato Yokoyama hasattended all the five (5) Board meetingsheld in the financial year. He holds 30,000ordinary shares directly in the Company.


24

Mr. Tatsuichi Yamaguchi (59),

(Japanese) Non-Independent Non-Executive Director

Mr. Tatsuichi Yamaguchi was appointeda Non-Executive Director of AEON CO.(M) BHD. (formerly known as JayaJusco Stores Bhd.) on 23 July 2003. Hegraduated from Meiji University, Japanmajoring in Management, which heobtained in 1969. He joined ÆON Co.,Ltd. in 1969 and was promoted as theStore Manager of Toyohashi store,Japan in 1980. In 1986 he wasseconded to Kornhill store of JuscoStores (Hong Kong) Co., Ltd., where hewas appointed as the Deputy StoreManager, and subsequently appointeda Director and the Managing Director ofJusco Stores (Hong Kong) Co., Ltd., in1988 and 1990 respectively. He wasappointed a Director of ÆON Co., Ltd. in1996 and held the position of Directorand General Manager (Apparel)Merchandising Division in 1997. In 2000he assumed the position of Director &General Manager, Chubu RegionalCompany and currently holds theposition of Senior Vice President, AsiaOperations, ÆON Co., Ltd. Mr. TatsuichiYamaguchi is also the Chairman of the Nomination and RemunerationCommittees of the Board. Mr. TatsuichiYamaguchi has attended all five (5)Board Meetings during his term inoffice for the financial year. He does nothold any shares in the Company.

Encik Ramli Bin Ibrahim (64),

(Malaysian) Non-IndependentNon-Executive Director

Encik Ramli bin Ibrahim was appointed aNon-Executive Director of AEON CO.(M) BHD. (formerly known as JayaJusco Stores Bhd.) on 20 August 1996.He is a member of the MalaysianInstitute of Accountants and a Fellow ofthe Australian Institute of CharteredAccountants. He was attached to KPMGPeat Marwick (“KPMG”) (now known asKPMG) in Australia, United Kingdom andMalaysia from 1959 to 1995. He wasappointed a Partner of KPMG Malaysia in1971. In 1989, he was made the firstbumiputera Senior Partner of KPMGMalaysia. He also served on the Boardsof KPMG International and KPMG AsiaPacific from 1990 to 1995. He retiredfrom KPMG Malaysia in 1995. FromDecember 1995 to December 2000, heserved as Executive Chairman of KualaLumpur Options & Financial FuturesExchange Berhad. Currently, he sits onthe Board of Directors of Ranhill Berhad,Measat Global Berhad and several otherunlisted public and private limitedcompanies including HSBC BankMalaysia Berhad & Malaysia NationalInsurance Berhad. He is also a memberof the Audit and RemunerationCommittees of the Board. Encik Ramlibin Ibrahim has attended four (4) out ofthe five (5) Board meetings held in thefinancial year. He holds 280,000 ordinaryshares indirectly in the Company.

Brig. Jen. (B) Dato’ Mohd Idris bin Saman (60),

(Malaysian) IndependentNon-Executive Director

Brig. Jen. (B) Dato’ Mohd Idris binSaman was appointed a Non-ExecutiveDirector of AEON CO. (M) BHD.(formerly known as Jaya Jusco StoresBhd.) on 16 June 2000. He holds a PostGraduate Diploma in ManagementStudies from the Slough College,United Kingdom, which he obtained in1980. He was a graduate of the AirCommand & Staff College, Maxwell,USA and the Armed Forces DefenceCollege, Kuala Lumpur. He joined theRoyal Malaysian Air Force as a PilotOfficer in 1965 and he served the RoyalMalaysian Air Force for thirty-five (35)years, in various executive positionswithin its Logistic Branch. He retiredfrom the Royal Malaysian Air Force in2000 as the Assistant Chief of the AirForce (Material). He is currently theExecutive Chairman of Diversified JetSdn. Bhd., a company principallyinvolved in the supply of materials andservices to the Malaysian ArmedForces. He is also a Director of AffinFund Management Sdn. Bhd. Dato’Mohd Idris bin Saman is a member ofthe Audit and Nomination Committeesof the Board. Dato’ Mohd Idris binSaman has attended all the five (5)Board meetings held in the financialyear. He does not hold any shares inthe Company.


25

Datuk Zawawi bin Mahmuddin (59),

(Malaysian) Independent Non-Executive Director

Datuk Zawawi bin Mahmuddin wasappointed a Non-Executive Director ofAEON CO. (M) BHD. (formerly known asJaya Jusco Stores Bhd.) on 23 July 2001.He holds a Bachelor of Arts (Honours)Degree from the University of Malaya,which he obtained in 1968. Datuk Zawawijoined the Administrative and DiplomaticService and began his career as anAdministrative Officer in the Ministry ofTransport in 1968. From 1970 to 1975 heserved as private secretary to the DeputyPrime Minister and thereafter held variouspositions in the Cabinet Secretariat of thePrime Minister‘s Department from 1975to 1990. His subsequent appointmentswere as follows:- Federal Secretary inSarawak (1990 - 1992), Deputy SecretaryGeneral 1, Ministry of Home Affairs (1992- 1994), Secretary General, Ministry ofInformation (1994 - 2000). Datuk Zawawiwas formerly on the Board of SyarikatExplosive Malaysia Sdn. Bhd. (SME),National Film Development Corporation(FINAS), Governing Council, Bernama andSukom Ninety Eight Bhd. He is currentlya director of a few private limitedcompanies and the Chairman of TwoAdvertising Sdn. Bhd. and NorthportDistripark Sdn. Bhd. He is also a memberof the Nomination Committee of theBoard. Datuk Zawawi bin Mahmuddin hasattended all the five (5) Board meetingsheld in the financial year. He does not holdany shares in the Company.

Dato’ Chew Kong Seng (67),

(Malaysian) Independent Non-Executive Director

Dato’ Chew Kong Seng was appointed aNon-Executive Director of AEON CO.(M) BHD. (formerly known as Jaya JuscoStores Bhd.) on 23 July 2001. He is aFellow of the Institute of CharteredAccountants in England and Wales, aMember of the Malaysian Institute ofAccountants and the Malaysian Instituteof Certified Public Accountants. He was atax officer in the Inland RevenueDepartment in the United Kingdom andthen joined Stoy Hayward & Co., in theUnited Kingdom from 1964 to 1970. Hereturned to Malaysia and joined TurquandYoung & Co. (now known as Ernst &Young) and was subsequently transferredto Sarawak office in 1973, first asManager in-charge and later as Partnerin-charge. He was appointed as theManaging Partner of Ernst & Young from1990 to 1996. Currently, Dato’ Chew is anExecutive Director of Sarawak EnterpriseCorp. Bhd. He is a Director of Great WallPlastic Industries Berhad, GuocoLand(Malaysia) Berhad (formerly known asHong Leong Properties Berhad), PBAHoldings Bhd and Encorp Berhad. He isalso a Director and the Audit CommitteeChairman of Petronas Dagangan Berhadand Industrial Concrete Products Bhd.and is a Director and a member of theAudit Committee of Petronas GasBerhad. Dato’ Chew is the Chairman ofthe Audit Committee and a member ofthe Nomination Committee of the Board.Dato’ Chew Kong Seng has attended allthe five (5) Board meetings held in thefinancial year. He does not hold anyshares in the Company.

Mr. Nagahisa Oyama (50),

(Japanese) Alternate Director toMr. Soichi Okazaki

Mr. Nagahisa Oyama was appointedthe Alternate Director to Mr. SoichiOkazaki on 28 April 2005. He holdsa Bachelor's Degree in BusinessManagement from Kinki University,Japan, which he obtained in 1977. Hejoined ÆON Co., Ltd. in 1977 as aManagement Trainee and waspromoted to be Softline Merchandiserin 1980. He was seconded to SiamJusco, Thailand to set up the GMSMerchandising Division. Following hisappointment at Siam Jusco, Thailand,from 1989 to 1991, he was promotedto become the General Manager ofTonami Regional Shopping Center in1991. Mr. Oyama was next appointedas the General Manager of KagaRegional Shopping Center in 1996. Heserved as General Manager of KochiRegional Shopping Center from 2000to 2002. In 2002, he was promoted tobecome the Regional GeneralManager of Higashi Mikawa andShizuoka Prefecture, Japan, where hewas in charge of the overall planning,opening and operations of three (3)new Regional Shopping Centers andthe operations of seven (7) existingRegional Shopping Centers in theShizuoka Prefecture. Mr. NagahisaOyama does not hold any shares inthe Company.


26

(Seated from left to right)

Mr. Soichi Okazaki

Managing Director

Ms. Chong Swee Ying

General Manager Shopping Centre Management & New Business Development

Puan Nur Qamarina Chew

General Manager Store Operations& Customer Care

Puan Noryahwati Mohd. Noh

General Manager Human Resource, Administration & DOSH

Mr. Masato Yokoyama

Executive Director

(Standing from left to right)

Mr. Poh Ying Loo

General Manager Finance

Encik A. Rashid bin Adam

General Manager Corporate Affairs

Lt. Col (R) Yaacob bin Mahmud

General Manager Logistics & Loss Control

Mr. Takeshi Kodama

General Manager Merchandising

Mr. Kenji Fujita

General Manager SC Development

Senior Management


27

Chairman’s Statement

On behalf of the Board Of Directors, I am pleased to presentAEON CO. (M) BHD. (formerly known as Jaya Jusco StoresBhd) Annual Report and Audited Financial Statements for thefinancial year ended 28 February 2005.

Change Of Name

First of all, it is my pleasure to share with you the sentimentsfollowing the change of name for the Company from JayaJusco Stores Bhd. to AEON CO. (M) BHD. on 2 September2004. The change of name is in line with the creation of acommon identity among the numerous companies under theÆON group of Japan.

The word 'aeon' has its origins in Latin meaning 'eternity' andimbued the Group with a deep sense of purpose to create afuture of limitless promise. Through this change of name, theCompany wishes to create a new sense of awarenessamongst its employees for a new beginning, propelling theCompany towards greater heights while fulfilling customers'expectations at all times.

On the international front, the ÆON name gives the ÆONgroup of companies a global identity that is recognisableworldwide so it can rise up to the challenges of globalisation inthe retail industry.

All our outlets, however, will continue to be known by thefamiliar brand name of JUSCO, which all our valued customershave grown accustomed to, and all our stores and shoppingcenters have been identified with over the years.

20th Anniversary In Malaysia

The official Company's name change also coincided withthe Company's 20th Anniversary, which was launched on8 April 2004. To celebrate these 20 successful andmemorable years of operations in Malaysia, many excitingactivities, promotions, sale and community activities wereorganised throughout the year. The Company also took thisopportunity to thank its loyal customers for their continued

patronage through specially sourced merchandise offered atspecial prices.

In conjunction with the 20th Anniversary celebrations, a special

tree planting ceremony was held on 15 September 2004. Over

30,000 saplings were planted in Paya Indah Wetlands by the

Company's employees, schoolchildren, non-governmental

bodies and volunteers from Japan, consistent with the

Company's philosophy and corporate citizenship efforts.

In connection with this, we wish to record our thanks to Y.A.B.Tun Dr. Mahathir Mohamad for his guidance on this project andfor graciously attending a dinner of appreciation hosted by Mr.Takuya Okada.

The 20th Anniversary celebrations culminated in a spectacularanniversary gala dinner on the night of 15 September 2004 inKuala Lumpur, graced by Guest of Honour, Datin Paduka SeriEndon Mahmood, the Prime Minister's wife.

Financial Review

The year under review, despite tougher competition, was a

successful year for the Company. Together with its two new

stores in Permas Jaya, Johor Bahru and Metro Prima, Kuala

Lumpur, which operated for a full year in the year under review,

and the overall better performance of the Company’s existing

stores, the Company registered a revenue of RM1.784 billion

for the year ended 28 February 2005, representing a 17.1%

increase over the previous financial year's performance.

At the earnings level, despite the heavy initial operating

expenses for the new stores the Company, for the year ended

28 February 2005, was able to register a profit before tax of

RM99.01 million, which is 2.8% higher compared to the

previous financial year. The Company registered a profit after

tax of RM64.25 million, which is 1.0% higher than that of the

previous year.

During the year under review, the Company undertook a BonusIssue exercise to increase its share capital from 87,750,000

At The ThresholdOf A New Era In Retailing


shares to 175,500,000 shares so as to better reflect theCompany's level of operations and also to reward its valuedshareholders for their continuous support. The Bonus Issueinvolved capitalizing RM87,750,000 out of the share premiumaccount of the Company which stood at RM108,488,040 basedon the audited accounts as at 29 February 2004.

Correspondingly, to accommodate the increase in the issuedand paid up share capital of the Company, the authorized sharecapital of the Company, at RM1 per ordinary share, was alsoincreased from RM100,000,000 to RM500,000,000. The wholeexercise was completed with the listing of the Bonus Issueshares on the Bursa Malaysia on 14 October 2004.

The earnings per share of the Company for the year ended 28February 2005 is at 36.6 sen per share based on the enlargedshare capital. The comparative earnings per share for theprevious financial year adjusted based on the enlarged sharecapital is 36.2 sen per share.

Review Of Operations

The retail industry continued to be very competitive in the yearunder review as new specialty stores, hypermarkets andshopping centers opened. Aggressive promotions and pricingstrategies were employed as each and every retailer sought toincrease their revenue and market share.

The year under review is also the twentieth year that theCompany has been in operation in Malaysia. Its longestablished presence here has allowed the Company toexploit its competitive strengths, gained over the years, tomaintain a leading position in Malaysia's retail industry. TheCompany's understanding of customers' preferences andtastes, timely refurbishment of its stores, superior customerservice and maintenance of a strong loyalty programmecontinue to ensure that the Company enjoys good revenuegrowth as reflected in the Company's 17.2% increase in retailsales for the year under review.

The growth for the year under review has come from both thenew stores and existing stores. The existing stores, excludingJUSCO Home Centre and the two new stores of JUSCO PermasJaya and JUSCO Metro Prima, which operated for a full year inthe year under review, registered a commendable growth of5.3% on a same store basis.

With the exception of its stores in Bandar Utama and WangsaMaju, all the Company's other existing stores registered agrowth of between 3.7% to 16.7% for the year under review.The combined performance of the JUSCO Bandar Utama storeand the new JUSCO Home Centre also recorded a growth of3% over the previous year's performance.

JUSCO Permas Jaya's performance was within expectation,and even though JUSCO Metro Prima performed slightlybelow expectation in its first year of operation, themanagement remains confident of the store's potential andbelieves that it will grow further in the years to come.

The existing stores' good performance was also due to theCompany's continuous efforts to ensure that its storescontinue to appeal to its customers and stay ahead of thecompetition. Major renovations and refurbishment werecarried out in supermarkets and general merchandise areas ofJUSCO Bandar Baru Klang, JUSCO Wangsa Maju and JUSCOIpoh in the year under review. In particular, JUSCO Ipoh’ssupermarket included a new wet market that offers customersthe opportunity to shop in a traditional wet marketenvironment. It also offers greater variety and more affordablemerchandise in a more conducive and clean shoppingenvironment. All the newly renovated supermarkets alsofeature a new open kitchen concept, new-concept health andbeauty care section, bigger and better green leafy vegetablesection and much more extensive variety and assortment ofother merchandise.

The Company's continuing efforts to develop new businessconcepts, to provide variety and counter competition especiallyfrom specialty stores have been successful. The Companyintroduced its new Home Centre category, which providesequipment, materials, ideas and services for home and do-it-yourself enthusiasts; its family-oriented amusement centrebusiness named Smart Wonder World; a stand alone denimshop; and also a specialty restaurant. The new businesses haveenabled the Company to not only increase its revenue but alsoto further gain experience and market knowledge for long-termbenefits. The Company believes that these businesses havegreat potential and has plans to expand them to its otherexisting and new stores and shopping centers.

The Company's property management division, for the yearunder review, continued to register steady income growth witha performance of RM136.1 million, which represents a 15.8%increase compared to RM117.5 million in the previouscorresponding year. Besides the continuous high occupancyrate of 99% which the Company's shopping centers enjoyedthroughout the year under review, the higher income was alsodue to the additional full year's contribution from new tenantspaces in the Company's two new shopping centers at MetroPrima, Kepong and Permas Jaya, Johor Bahru. During the year,the shopping centre management also took steps towardsimproving the tenant mix and ensuring that its shoppingcenters were properly managed, maintained and remainsappealing to customers.

Corporate Citizenship

I am pleased to report that in the year under review, theCompany's "With All Our Hearts" Charity Fund program wastransformed into a foundation named Yayasan Jusco Malaysia(Malaysian Jusco Foundation), to further enable the Companyto play its role of being a good corporate citizen. Through thefull-fledged foundation, the Company will be able to activelyinvolve itself in fulfilling its social responsibilities toward thevarious communities in Malaysia, especially the young and

28


29

needy. The foundation successfully raised RM262,000 througha charity gala dinner, which will be used for setting up anorphanage named “Rumah Tunas Harapan” that will giveselected orphaned Malaysian children the opportunity to liveand enjoy an upbringing in a homely and positive environment.

AEON CO. (M) BHD. was also amongst the first to respond to

the tragic tsunami incident on 26 December 2004 by sending

food provisions and fresh water to the victims in Penang and

Kedah. The Company organised a donation drive and a total of

RM151,436 was collected from JUSCO's customers and staff

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

On the whole, the Company continues to face a very

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.

The Board wishes to also express their sincere thanks to allour valued shareholders, business associates, bankers,government authorities and most of all, our customers for theircontinuing support to the Company.

The Board would also like to record a special thanks toDatin Paduka Seri Endon Mahmood for her gracious presenceat our spectacular anniversary gala dinner on the night of 15 September 2004 and for officially launching the Company's20th Anniversary Celebrations together with the HonoraryChairman and Adviser of ÆON Co., Ltd., Mr Takuya Okada.

DATO' ABDULLAH BIN MOHD YUSOFCHAIRMAN


30

Robust growth of the Malaysian economy was sustained in2004. Stronger domestic demand driven by private sectoreconomic activity continued to drive the economy. Consumerand business confidence strengthened during the year,reflecting a resilient economy with a high savings rate, lowinflation and low interest rate environment. The retail industryreinforced this trend with a healthy growth of 8.0% reportedfor the year of 2004.

Retailing Operations

During the year under review, the Company's retail businesscontinued to be challenged by the opening of newhypermarkets and the proliferation of specialty and generalmerchandise stores, especially in new shopping centers. Theopening of competitors' hypermarkets near some of theCompany's outlets created more intense competition as theCompany's stores sought to maintain their competitive edge.

Despite these and other economic challenges, the year underreview has been considered a successful year for thecompany's retailing operations. The Company was able toutilise its long established knowledge and experience of thelocal consumer market to its advantage, enabling it to earn areputation for superior customer services, a pleasant andconducive shopping environment, and being the provider of agood assortment of quality merchandise.

For the year under review, the Company registered retail salesof RM1.648 billion, which is 17.2% higher than the previousyear's retail sales performance. On a same-store basis,excluding the new JUSCO Home Centre business and JUSCOPermas Jaya and JUSCO Metro Prima stores, which have

operated for a full year in the year under review, the Companyregistered a commendable growth of 5.3%.

The Company's existing stores, with the exception of JUSCOWangsa Maju and Bandar Utama, performed impressively inthe year under review with growth ranging from 3.7% to16.7%. Considering the keen competition that they faced, bothJUSCO Wangsa Maju's and JUSCO Bandar Utama's marginallylower performances of 1.8% and 1.0% respectively, comparedto their previous financial year's performances, are stillconsidered commendable. JUSCO Taman Maluri continued toexhibit good growth with a 6.0% higher performance over theprevious year. JUSCO Melaka also performed well with a 9.2%growth over the previous year's performance. JUSCO BandarBaru Klang, which had its supermarket renovated in the yearunder review, saw an increase in customer traffic, which isreflected in its 16.7% growth over the previous year'sperformance. In Ipoh, despite facing competition from theestablishment of a new hypermarket near its store towards theend of the year under review, JUSCO Ipoh's performancecontinued to be strong with a 12.1% growth over its previousyear's performance. During the year under review, the storealso benefited from higher customer traffic thanks torenovations to its supermarket and general merchandise store.JUSCO Mid Valley continued with its steady performance andregistered a 5.5% growth for the year under review. JUSCOBandar Puchong and JUSCO Taman Universiti also registeredsteady performances with growth of 3.9% and 3.7%respectively over their previous year's performances.

In the year under review, the full year operation of theCompany's stores in Permas Jaya and Metro Prima also

A Challenging But Fulfilling YearREVIEW OF OPERATIONS

JUSCO Permas Jaya operated for a full year in the year under review.


31

contributed to the Company's revenue growth. Performancereviews of both stores showed JUSCO Permas Jayaperforming up to the Company's expectations while JUSCOMetro Prima fell slightly below expectations. Nevertheless,going forward, as both shopping centers establish themselvesand build up their loyal customer bases, the Company believesthat their performances will improve further.

The Company is ever vigilant in its efforts to countercompetition, especially from specialty stores, and to provide agreater variety of retail services and categories of merchandiseto serve the needs of consumers' ever changing tastes,preferences and lifestyles. This has resulted in thedevelopment of new retail businesses such as the familyorientated amusement business, Smart Wonder World, andthe do-it-yourself category called JUSCO Home Centre.

The Company first launched Smart Wonder World in August

2003 in JUSCO Taman Maluri, as a family-oriented amusement

center designed for the younger children. It is located within

the general merchandise department and complements the

environment of the store. Today, Smart Wonder World is also

present in JUSCO Mid Valley and JUSCO Metro Prima, and

symbolises the Company's success in developing new

business ventures. Similarly, JUSCO Home Centre has now

been duplicated in all other JUSCO stores and represents the

Company's efforts to specialise in and expand this category.

The Company believes that both the Smart Wonder World and

JUSCO Home Centre businesses have great potential and

plans are underway to expand them to all existing stores and

new stores.

During the year under review, to keep abreast of the changing

demands of consumers and, at the same time, to counter

competition and differentiate itself from its competitors by

offering customers the best value in terms of variety of

merchandise, freshness and pricing, the Company embarked

on a refurbishment program to upgrade its supermarkets in

JUSCO Bandar Baru Klang, Ipoh and Wangsa Maju. The new

supermarkets feature a new open kitchen concept, new

concept health and beauty care sections and a greater variety

The new wet market section in the newly refurbished JUSCO Ipoh supermarket.

Smart Wonder World, JUSCO Metro Prima. JUSCO Home Centre, JUSCO 1 Utama. Jeans Studio at JUSCO 1 Utama.


32

and assortment of merchandise including new sections for

fresh leafy vegetables. At the newly renovated JUSCO Ipoh

supermarket, a new wet market section was introduced, in

which shoppers can purchase vegetables, fish, poultry and

other fresh produce at the same low prices available at the

regular wet market, but under a conducive and clean

environment. The wet market allows growers and producers to

bring their produce directly to our customers, fresh from the

farm and the fisherman's wharf, at much cheaper prices.

J CARD, the Company's well-established loyalty card,continues to be extremely popular, and enjoys a high numberof annual renewal. Currently, there are over 400,000 principalmembers on record, which provides the Company a valuablecustomer database for its business needs. On the average, JCARD members contributed approximately 58% of JUSCO'smonthly sales. Besides being able to collect points and earnrebates for their purchases, J CARD members are now givenadditional privileges. Among the privileges introduced in theyear under review was a unique shopping concept, J CARD VIPDay, in which members were given an exclusive invitation toselect a date within a certain period to enjoy discounts at theJUSCO stores. Another privilege introduced was the J CARDMembers Insurance program, which offers special insurancepackages catering to the specific needs and lifestyles ofmembers and their family members. The Company alsocontinued to tie up with more partners and merchants underthe J CARD Privilege Shopping Program, providing more

benefits for members. A new redemption magazine for JCARD members was also introduced during the year,highlighting the many attractive new and exciting items formembers to redeem with their points.

Property Management Services

For our property management services business, the yearunder review was very challenging as new shopping centersopened and their owners competed for tenants who werespoilt with the increasing number of choices. This has putgrowing pressure on rental and occupancy rates amongstcompeting shopping centers.

Despite these challenges, the overall performance of JUSCOShopping Centers remains strong and steady, with theoccupancy rate maintained at 99%. The Company's vastexperience in the management of shopping centers waslargely responsible for this continuing strong performance.Some of the affirmative actions that the Company took duringthe year were to continually review the tenant mix, so as tosuccessfully maintain the attractiveness of the malls to


33

shoppers and tenants alike. The Company also made concertedefforts to improve operational efficiency in areas such as carpark management and numerous measures to improvesecurity and safety for shoppers. The Company's propertymanagement services business registered an income ofRM136.1 million, which is 15.8% over the previous year'sperformance. Besides the continuous high occupancy rate, thehigher income was also due to additional full years'contributions from new tenant spaces in the Company's twonew shopping centers at Metro Prima, Kepong and PermasJaya, Johor Bahru.

Human Resources

Human Resource management and strategy remains crucial inthe Company's plans as it moves forward, mapping its futuredirections and expansions. During the year under review, theCompany employed measures to ensure that its humanresource strategy remained on track in providing optimalhuman resources for the Company, both, in the short and longterm, further enhancing the Company's competitiveness.

With this foremost in mind, the Company has continued toinvest significantly in its human resource development,ensuring that its employees are constantly equipped with theproper level of skills. As a leading retailer, the expectations ofthe Company's customer services are high. As such, its human

resource management includes strategic plans for providingfocused and tailored training for the various levels andcategories of staff in the Company. Thus, during the year,amongst other things, customers were once again asked toevaluate the Company's cashiers, the best of whom had tocompete for the best cashiers' awards. The cashiers were alsogiven continuous training, including grooming, to improve theirimage and customer service skills. The Company's in housesecurity personnel, "Blue Waves", were given military styletraining to enforce and inculcate discipline and boost theirlevels of motivation. The Company's middle management,including selected management trainees, were provided withleadership training to further upgrade their levels of leadershipand management skills, in preparation for eventual highermanagement positions. Job skills training and on-the-jobtraining in different operational areas are an integral part of theCompany's human resource strategy, which includes teambuilding courses to further promote cooperation and a sense ofkinsmanship among the employees.

The Company has, under its retail and management traineeprogram, also recruited more than two hundred graduatesannually and, in the process, assisted the country'sundergraduate unemployment situation. Having been providedwith in-depth training and orientation to ensure that theyunderstand the work culture and philosophy of a retailer, manyof the graduates today are playing significant roles in the day-to-day operations of the Company. Potential and outstandingmanagement trainees have also been identified for furthergrooming as future leaders of the Company.

On 20 September 2004, following the Company's official namechange to AEON CO. (M) BHD., a unique "re-entry ceremony"was conducted for all its employees who pledged to startafresh, move forward and take the Company to greaterheights. Senior management staff also held dialogue sessions

Staff team-building treasure hunt.


34

with operation staff in two-way communication sessions onmanagement policies and operational issues.

Under the Company's highly successful Japan ManagementTrainee program, the number of trainees sent for attachmentwith retail stores of the AEON group in Japan was doubled.Today, the graduates who have been equipped with on-the-jobtraining experience and knowledge from Japan have beenplaced in strategic operational positions within the Company.

The Company's JUSCO OUM retailing course, in collaborationwith the Open University of Malaysia (OUM), has producedmore than 150 graduates to date for both the certificate anddiploma courses. On 10 June 2004, the third batch ofgraduates received their Certificate in Retail Operations. Thereare currently 243 students attending the Diploma inManagement (Retailing) course. This retailing program equipsthe students with the necessary practical skills and retailknowledge needed to face the challenges of the retail industry.

Prospects and Future Challenges

Though there are some underlying concerns, prospects for theMalaysian economy in 2005 are generally favourable. Theunderlying conditions of the domestic economy are expectedto remain strong and domestic growth is projected to besustainable as in the previous year. The domestic demand,expected to be spurred on by private consumption, willcontinue to benefit the retail industry which, in itself, is verycompetitive as retail players compete to expand their market

share through new shopping centers, specialty retailbusinesses, more facilities for shoppers' convenience andinnovative loyalty programs.

The Company is confident that its established presence,

expansion plans, competitive strengths and business

strategies will ensure that the Company continues to enjoy

growth in performance in the new financial year.

The Company's main goal is to continuously live up to its

customers' expectations. Though competitive pricing is vital,

superior customer services, quality and assortment of

merchandise are equally important in ensuring customer

loyalty. To this end, through the new AEON and its objectives

for successful long-term business, the Company believes that

it will be able to fulfill the ever-changing demands and

expectations of its customers.

In line with this, in the new financial year, the Company will

extend its supermarket refurbishment plan to other stores.

Successful new business categories like Home Centre and the

Smart Wonder World amusement business will also be

expanded to all other stores to further complement the

Company's retail business and to enhance the Company's

position as a family-friendly store.

Besides continuous creative joint promotions with tenants, the

Company will continue to invest in refurbishment and

maintenance of its shopping centers, to ensure that they

continue to look fresh and vibrant and be the shopping centers

AEON CO. (M) BHD.’s staff members are continually sent for training.


35

of choice for family shopping, activities and leisure. In addition,

the Company will also focus on developing strong and good

tenant mix for its shopping centers through sourcing of new

and popular quality tenants. The Company will be establishing

a new store in Seremban in the coming year.

Moving forward, the Company remains committed to its plans

to maintain its leading position and increase market dominance

in the retail industry. The Company will focus its resources on

expanding its businesses through innovative new retail

business formats; growing its supermarket business; and

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

to share information about the company's operations,

ongoing promotions, corporate information and

announcements with customers, investors, public and

interested parties. It also allows the Company's J CARD

Members to interact online, make enquiries and read an

online version of the J CARD Pearl magazine.

3. In its supply chain management, the Company's WEB-EDI

allows the Company to transmit ordering data to suppliers

via the Internet, allowing them to achieve greater efficiency

in the ordering and delivery process for their merchandise.

AEON CO. (M) BHD. works closely with OUM to train staff members.

Statement of Corporate Governance


36

Board ResponsibilitiesThe Board of Directors, in recognising the importance ofcorporate governance, is committed to ensuring that theCompany’s business and operations are in line with theprinciples and best practices advocated in the Malaysian Codeon Corporate Governance.

The Board of Directors assumes responsibilities in corporategovernance and has established various processes andcommittees to assist them in discharging of these responsibilities.Among others, the Company’s strategies and directions,shareholders and investors’ relationships, annual budget, majorcapital expenditure, significant financial matters, and the adequacyand integrity of internal controls including risk assessment are within the responsibilities of the Board of Directors.

The following paragraphs set out the Company’s application ofthe principles and best practices of the Malaysian Code onCorporate Governance.

A. DirectorsBoard BalanceThe Board of Directors consists of nine (9) members;comprising one (1) Non-Executive Chairman, one (1)Non-Executive Vice Chairman, two (2) ExecutiveDirectors and five (5) Non-Executive Directors. Of thefive (5) Non-Executive Directors, three (3) areIndependent Directors.

Dato’ Chew Kong Seng is the Senior Independent Non-Executive Director to whom concerns on mattersrelating to corporate governance of the Company couldbe conveyed to.

The Directors bring a wide range of expertise andexperience in various fields such as economics, publicservices, accounting and finance, legal, human resource,banking, marketing, taxation, general management, retailmanagement and property management services. AllBoard members participated and deliberated on theissues and matters affecting the Company.

The profile of each Director is presented on page 22 topage 25 of the Annual Report.

Board MeetingsThe Board met five (5) times at regular intervals duringthe financial year ended 28 February 2005. The detailsof attendance of each Director at the Board meetingsheld during the financial year are as follows:

Number of meetings

attended/held

during the Director’s

Name of Director term in office

Dato’ Abdullah bin Mohd Yusof 5 / 5

Mr. Toshiji Tokiwa 4 / 5

Mr. Tatsuichi Yamaguchi 5 / 5

Mr. Soichi Okazaki 5 / 5

Mr. Masato Yokoyama 5 / 5

Encik Ramli bin Ibrahim 4 / 5

Brig. Jen. (B) Dato' Mohd Idris bin Saman 5 / 5

Datuk Zawawi bin Mahmuddin 5 / 5

Dato’ Chew Kong Seng 5 / 5

Supply of Information The Company Secretary ensures that all Boardmeetings are furnished with proper agendas. Boardpapers and reports providing updates on financial,operational and corporate developments includingmatters, such as the Company’s corporate citizenshipprogramme and staff welfare matters are circulatedprior to the meetings to all Directors for them todischarge their duties effectively. The Directors have fullaccess to the advice and services of the CompanySecretary. In addition, the Directors, if necessary, mayalso seek professional advice, at the Company’sexpense. The Directors may also consult the Chairmanand other Board members prior to seeking anyindependent professional advice.

Directors’ TrainingAll the Directors have attended the Directors’Mandatory Accreditation Programme organised byBursa Malaysia Securities Berhad and are also providedwith updates from time to time on relevant new lawsand regulations affecting their directorship.

Directors also from time to time visited existing storesand/or new sites to have a thorough understanding ofthe Company’s operational matters.

Board CommitteesThe Board of Directors is assisted by its Committees,which have been established under defined terms ofreference. The Committees are the NominationCommittee, the Remuneration Committee and theAudit Committee.


The Nomination CommitteeThe Nomination Committee members are Mr. TatsuichiYamaguchi (Chairman), Dato’ Abdullah bin Yusuf, Dato’Chew Kong Seng, Brig. Jen. (B) Dato’ Mohd Idris binSaman and Datuk Zawawi bin Mahmuddin. The committeemet one (1) time in the financial year under review.

The duties and responsibilities of the Committee, amongothers, are to recommend to the Board, candidates fordirectorship, directors to fill seats on Board Committeesand to review annually the required mix of skills andexperience of the Board including the effectiveness of theBoard as a whole and the contribution from each Director.

The Board, through the Nomination Committee, on 28April 2005 conducted the annual assessment of theDirectors’ performance and contribution, and reviewedthe required mix of skills and experience of the Board tofunction competently and efficiently as a whole. TheBoard is pleased to state that its current composition ofmembers meets the requirement of a competent andeffective Board.

The Remuneration CommitteeThe Remuneration Committee is made up of Non-Executive Directors whose members are Mr. TatsuichiYamaguchi (Chairman), Dato’ Abdullah bin Yusof andEncik Ramli bin Ibrahim. The duties of the Committeeshall be to recommend to the Board the remunerationof all Directors in all its forms. Executive Directors play no part in decision-making or determining theirown remuneration.

The committee met two (2) times in the financial yearunder review to determine the remuneration packagesof all Directors, including the Non-Executive Chairmanand Non-Executive Vice Chairman and is a matter forthe Board as a whole. Individual Directorsconcerned do not participate in the discussion on theirown remuneration.

The Audit CommitteeThe Board is also assisted by the Audit Committeewhose members, terms of reference and activities forthe financial year under review are stated on page 40 to42 of this Annual Report.

Re-electionIn accordance with the Company’s Articles ofAssociation, all Directors retire every year.

B. Directors RemunerationThe breakdown of the remuneration of the Directorsduring the financial year under review is as follows:

1. Aggregate remuneration of the Directorscategorised into appropriate components:

Non-Executive ExecutiveDirectors Directors Total

RM RM RM

Fees 252,000 796,000 1,048,000

Salaries 694,753 - 694,753

Benefits-in-kind 24,600 14,700 39,300

Other emoluments 157,605 - 157,605

1,128,958 810,700 1,939,658

2. The number of Directors whose total remunerationfall within the following bands:

Number of Directors

Range of Non-Remuneration Executive Executive Total

RM50,001 to RM100,000 - 5 5

RM100,001 to RM150,000 - - -

RM150,001 to RM200,000 - 1 1

RM200,001 to RM250,000 - 1 1

RM250,001 to RM300,000 - - -

RM300,001 to RM350,000 - - -

RM350,001 to RM400,000 - - -

RM400,001 to RM450,000 - - -

RM450,001 to RM500,000 - - -

RM500,001 to RM550,000 1 - 1

RM550,001 to RM600,000 - - -

RM600,001 to RM650,000 1 - 1

2 7 9

37


C. ShareholdersInvestors and ShareholdersCommunicationIt has always been the Company’s practice to maintaina good relationship with its shareholders. Majorcorporate developments and happenings in theCompany have always been duly and promptlyannounced to all shareholders, in line with BursaMalaysia Securities Berhad’s objectives of ensuringtransparency and good corporate governance practices.

The Company’s financial performance, major corporatedevelopments and other relevant information arepromptly disseminated to shareholders and investorsvia announcements of its quarterly performance, annualreport, corporate announcements to Bursa MalaysiaSecurities Berhad and press conferences. Furtherupdate of the Company’s activities and operations arealso disseminated to shareholders and investorsthrough dialogue with analysts, fund managers,investors and the media.

Besides highlighting retail business promotionalactivities, the Company’s website (www.jusco.com.my)provides an update of the Company’s latest performancereleased to Bursa Malaysia Securities Berhad as well asother corporate information to the public.

During the Annual General Meeting, shareholders areusually given a presentation on the Company’sperformance and major activities that were carried outby the Company for the year under review. During themeeting, shareholders have the opportunities toenquire and comment on the Company’s performanceand operations.

D. Accountability and AuditFinancial ReportingIn its financial reporting via quarterly announcements ofresults, annual financial statements and annual reportpresentation including the Chairman’s Statement andReview of Operations, the Board of Directors alwaysprovides a comprehensive assessment of theCompany’s performance and prospects for the benefitsof shareholders, investors and interested parties. TheAudit Committee also assists the Board in overseeingthe Company’s financial reporting processes.

Directors’ responsibility statement inrespect of the preparation of theaudited financial statementsThe Board of Directors is responsible for the preparationof the financial statements for the financial year of theCompany, which gives a true and fair view of the stateof affairs of the Company and its results and cash flowfor the financial year ended.

The Board of Directors has ensured that the financialstatements have been prepared in accordance withapplicable approved accounting standards in Malaysia,the requirements of the Companies Act, 1965, Bursa

Malaysia Securities Berhad and other regulatory bodies.In preparing the financial statements, the Board ofDirectors has ascertained that accounting policies andreasonable prudent judgment and estimates have beenconsistently applied.

The Directors are responsible for keeping properaccounting records, which disclose with reasonableaccuracy at any time the financial position of theCompany and to enable them to ensure that the financialstatements comply with the Companies Act, 1965. TheDirectors have a general responsibility for taking suchsteps as is reasonably open to them to safeguard theassets of the Company, to prevent and detect fraud andother irregularities.

Going ConcernThe Board of Directors confirmed that the Companyhas adequate resources to continue its business in theforeseeable future. For this reason, they continue toadopt the going concern basis for preparing thefinancial statements.

38


State of Internal ControlThe Statement of Internal Control set out on page 43 ofthe Annual Report provides an overview of the state ofinternal controls within the Company

Relationship With The External AuditorsThe Board of Directors with the assistance of the AuditCommittee maintains a formal and transparentrelationship with the Company’s External Auditorsthrough the Audit Committee, Board and formalmeetings whereby issues are discussed.

The relationship between the Board and the ExternalAuditors is also formalised through the AuditCommittee’s terms of reference.

Compliance with Malaysian Code on Corporate GovernanceThe Board of Directors is pleased to state that theCompany was in compliance with all the principles andbest practices as advocated in the Malaysian Code onCorporate Governance during the financial year underreview, except on disclosure of each individualDirector’s remuneration.

39


Audit Committee Designation

- Dato’ Chew Kong Seng Chairman(IndependentNon-Executive Director)

- Encik Ramli bin Ibrahim Member (Non-Independent Non-Executive Director)

- Brig. Jen. (B) Dato’ Mohd. MemberIdris bin Saman (Independent

Non-Executive Director)

ConstitutionThe Board hereby resolves to establish a Committee of theBoard to be known as the Audit Committee with the followingterms of reference.

Composition of AuditCommitteeThe Committee shall be appointed by the Board from amongits members and shall consist of not less than 3 members ofwhom a majority shall be Independent Directors.

The Committee shall include at least one person who is amember of the Malaysian Institute of Accountants (MIA) oralternatively a person who must have at least 3 years’ workingexperience and have passed the examinations specified in PartI of the 1st. Schedule of the Accountants Act 1967 or is amember of one of the associations specified in Part II of thesaid Schedule or fulfils such other requirements as prescribedby Bursa Malaysia Securities Berhad. No alternate directorshall be appointed as a member of the Committee.

The Committee shall elect a chairperson from amongst itsmembers who is not an executive director or employee of thecompany or any related corporation. In the event that amember of the audit committee resigns, dies or for any otherreason ceases to be a member, with the result that thenumber of members is reduced to below three, the Board ofDirectors shall, within three months of that event, appoint suchnumber of new members as may be required to make up theminimum number of three members.

The Board shall review the terms of office of Committeemembers no less than every three years.

MeetingsThe Committee shall meet at least four times a year. In addition,the chairperson shall convene a meeting of the Committee ifrequested to do so by any member, the management or theinternal or external auditors to consider any matter within thescope and responsibilities of the Committee.

Attendance at MeetingsThe General Manager of Finance, the Head of Internal Audit,the Company Secretary, the Senior Finance Manager, theCompliance Officer and a representative of the ExternalAuditors shall normally attend meetings. However, theCommittee may invite any person to be in attendance to assistit in its deliberations.

Non-member directors shall not attend unless specificallyinvited to by the Committee.

Secretary to AuditCommitteeThe Company Secretary shall be the secretary of thecommittee and shall be responsible for drawing up the agendain consultation with the chairperson. The agenda together withthe relevant explanatory papers and documents shall becirculated to the committee members prior to each meeting.

The secretary shall be responsible for recording attendanceof all members and invitees, keeping the minutes of themeeting of the Committee, circulating them to committeemembers and to the other members of the Board ofDirectors and for ensuring compliance with Bursa MalaysiaSecurities Berhad’s requirements.

Reporting ProceduresThe Committee shall prepare an annual report to the Board thatprovides a summary of the activities of the Committee forinclusion in the Company’s annual report.

The Committee shall assist the Board in preparing thefollowing for publication in the Company’s annual report:

- Statement of the Company’s application of the principlesset out in Part I of the Malaysian Code on Corporate Governance.

- Statement on the extent of compliance with the BestPractices in Corporate Governance set out in Part II of the Malaysian Code on Corporate Governance, specifying reasons for any areas of non-compliance (if any) and the alternatives adopted in such areas.

- Statement on the Board’s responsibilities for preparing the annual audited financial statements, and

- Statement about the state of Internal Control of the Company.

Where the Committee is of the view that a matter reported byit to the Board of Directors has not been satisfactory resolvedresulting in a breach of the Bursa Malaysia Securities BerhadListing Requirements, the Committee shall promptly reportsuch matter to the Bursa Malaysia Securities Berhad.

40

Terms of Reference of the Audit Committee


QuorumA quorum shall consist of a majority of committee memberspresent at the meeting who are Independent Directors.

AuthorityThe Committee is authorised by the Board to:

- Investigate any activity within its terms of reference.- Have resources which are reasonably required to enable

it to perform its duties- Have free access to all information and documents it

requires for the purpose of discharging its functions andresponsibilities.

- Have direct communication channels with the ExternalAuditors and person(s) carrying out the internal audit function or activity.

- Obtain outside legal or other independent professional advice and secure the attendance of outsiders with relevant experience and expertise if it considers thisnecessary.

- Convene meetings with the External Auditors, excluding the attendance of the executive members of the committee, whenever deemed necessary.

Duties and ResponsibilitiesThe duties and responsibilities of the Committee shall be:

- To review the Terms of Reference at least annually, as 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 concernarising from the audit and any other matters the External Auditors may wish to discuss (in the absence ofmanagement if necessary).

- To assess the adequacy and effectiveness of thesystems of internal control and accounting control procedures of the Company by reviewing the External and/or Internal Auditors’ management letters andmanagement responses.

- To discuss problems and reservations arising from theinterim and final audits and any matters the auditors maywish to discuss.

- To review the internal audit plan, consider the major findings of internal audit, fraud investigations and actions and steps taken by management in response to audit findings.

- To review the adequacy and relevance of the scope,functions and resources of Internal Audit and thenecessary authority to carry out its work.

- To review any related party transactions and conflict of interest situations that may arise within the Company.

- To consider the appointment of the External Auditors, the terms of reference of their appointment and anyquestion of resignation and dismissal before making a recommendation to the Board.

- To undertake such other responsibilities as may beagreed to by the Committee and the Board.

- To report to the Board its activities, significant results and findings.

Overseeing the InternalAudit FunctionThe Committee shall oversee all internal audit functions and isauthorised to commission investigations to be conducted byinternal audit as it deems fit. The Internal Auditor shall reportdirectly to the Committee and shall have direct access to theChairman of the Committee.

All proposals by management regarding the appointment,transfer or dismissal of the Internal Auditor shall require theprior approval of the Committee.

41


The Audit Committee comprises the following members:

- Dato’ Chew Kong Seng Independent(Chairman) Non-Executive Director

- Encik Ramli bin Ibrahim Non-Independent Non-Executive Director

- Brig. Jen. (B) Dato’ Mohd. Independent Idris bin Saman Non-Executive Director

Terms of Reference of The Audit CommitteeDuring the financial year under review, there were no changesto the terms of reference of the Audit Committee.

The Term of Reference of the Audit Committee, which was due forreview, was reviewed on 18 January 2005, the Audit Committeeconcluded that the Terms of Reference of the Audit Committeecovered all aspects for the Audit Committee to function efficientlyand needs no changes. The Board approved the renewal of theTerms of Reference tabled on 19 January 2005.

MeetingsDuring the financial year under review, the Audit Committeeconvened four (4) meetings. The attendance records of themember of the Audit Committee are as follows:

Number of meetings

attended/held during the

Name of Directors member’s term in office

Dato’ Chew Kong Seng (Chairman) 4 / 4Encik Ramli bin Ibrahim 4 / 4Brig. Jen. (B) Dato' Mohd Idris bin Saman 4 / 4

The meetings were structured through the use of agendas,which were distributed to members with sufficient notification.

The Company Secretary was present in all the meetings. Arepresentative of the External Auditors, Messrs KPMG DesaMegat & Co., the General Manager of Finance, the Head ofInternal Audit, the Senior Finance Manager and the ComplianceOfficer attended the meetings, and related managementpersonnel attended the meetings upon invitation.

Summary of The Audit Committee’sActivities during the Year Under ReviewDuring the year under review, the Audit Committee carried outits duties in accordance with its terms of reference as follows:

a. Reviewed the quarterly unaudited financial result and annual audited financial statements before submission to the Board for consideration and approval.

b. Reviewed the External Auditors’ scope of work and auditplan for the year.

c. Reviewed and discussed the External Auditors’ audit report and areas of concern.

d. Considered the appointment of the External Auditorsand the terms of reference of their appointment.

e. Reviewed the internal audit plan, considered the major findings of internal audit, fraud investigations and actions taken by management in response to the audit findings.

f. Assessed the adequacy and effectiveness of thesystems of internal control and accounting control procedures of the Company by reviewing the Externaland Internal Auditors’ management letters andmanagement responses.

g. Reviewed the adequacy and relevance of scope,functions and resources of internal audit and that it hasthe necessary authority to carry out its work.

h. Reviewed related party transactions.i. Reported to the Board on its activities and significant

findings and results of audit recommendations.

On 18 January 2005, the Audit Committee carried out a self-assessment to evaluate the effectiveness of the auditcommittee. The evaluation process covered a review on theTerms of Reference, agenda setting of meetings, oversight ofthe audit process and continuous improvement of the AuditCommittee. The result of the self-assessment was subsequentlytabled and accepted by the Board on 19 January 2005.

On 18 January 2005, the Audit Committee also held onemeeting with the External Auditors without the presence ofthe management, to allow the auditors to discuss any issuesarising from the audit exercise or any other matters, which theexternal auditors wished to raise.

During the year under review, the Internal Audit departmentcarried out the following activities:

a. Presented and obtained approval from Audit Committee,the 3 years internal audit plan, which supplementedth audit strategy and audit scope of work.

b. Reviewed and analysed certain key business processes identified in the annual audit plan, reported ineffectiveand inadequate controls, and made recommendations to improve their effectiveness.

c. Monitored and ensured management implementedcorrective action plans.

d. Monitored compliance with policies and procedures e. Reviewed the adequacy and effectiveness of the internal

control structures of the Company.f. Assisted the Board of Directors and Management on

compliance matters required by the Malaysian Code onCorporate Governance.

g. Assisted the Board of Directors and Management byreviewing the risk policy and control strategies in theorganisation.

h. Carried out investigative assignments.i. Continued inculcating good risk management practices

throughout the Company.

42

The Audit Committee


Board ResponsibilitiesThe Board of Directors recognises its responsibilities over theCompany’s system of internal controls, covering all its financialand operating activities to safeguard shareholder’sinvestments and the Company’s assets.

The Board has an established on-going process for identifying,evaluating and managing the significant risks encountered bythe Company. The Board through its Audit Committee regularlyreviewed this process.

In view of the limitations inherent in any system of internalcontrols, the system is designed to manage, rather than toeliminate, the risk of failure to achieve the Company’scorporate objectives.

The Audit Committee assists the Board to review the adequacyand integrity of the system of internal controls in the Companyand to ensure that an appropriate mix of techniques is used toobtain the level of assurance required by the Board. The AuditCommittee presents its findings to the Board.

Internal Audit FunctionThe Audit Committee, assisted by the Internal AuditDepartment, provides the Board with the assurance it requireson the adequacy and integrity of the system on internalcontrols. The Internal Audit Department independently reviewsthe risk identification procedures and control processesimplemented by the management, conducts risk assessmentworkshops that encompass reviewing critical areas that thecompany faces, and reports to the Audit Committee on aquarterly basis.

The Internal Audit Department also carried out internal controlreviews on key activities of the Company’s business on thebasis of a three-year internal audit plan that was presented andapproved by the Audit Committee. The internal audit functionadopts a risk-based approach and prepares its audit strategyand plan based on the risk profiles of the major business unitsof the Company.

System of Internal ControlsThe Board of Directors is responsible for managing the keybusiness risks of the Company and implementing theappropriate internal control system to manage those risks. TheBoard reviewed the adequacy and integrity of the system ofinternal controls as it operated during the year. The followingare the key elements of the Company’s system of internalcontrols:

- The management structure of the Company formallydefines lines of responsibility and delegation of authority, for all aspects of the Company’s affairs. Seniormanagement and business unit’s managers submit andpresent their operational performance reviews as well asbusiness plans and strategic measures in regularly heldExecutive Committee and Management Meetings;

- The Board approves the annual budget and reviews key business variables and monitors the achievements ofthe Company’s performance on a quarterly basis.

- The authorisation limits and approvals authoritythreshold of the Company encompasses internal controlprocedures. These procedures are subject to reviews by the management to incorporate changing business risks and operational efficiency.

- The Audit Committee is responsible for reviewingquarterly announcements to Bursa Malaysia SecuritiesBerhad and statutory annual financial statements prior to submission for the Board’s approval.

- The Internal Audit Department periodically monitors theeffectiveness and evaluates the proper functioning ofthe internal control system to ascertain compliance withthe control procedures and policies of the Company. TheHead of Internal Audit reports to Audit Committee on thestatus of the internal control system on a quarterly basis.

- Project teams are set up from time to time to addressbusiness and operational issues to meet the business objectives and operational requirements of the Company.

All the above-mentioned processes have been in place andprovide reasonable assurance on the effectiveness of theinternal control system.

ConclusionThe Board of Directors reviewed the adequacy and integrity ofthe system of internal controls that provides reasonableassurance to the Company in achieving the businessobjectives. As the development of a sound system of internalcontrols is an on-going process, the Board and themanagement maintain an on-going commitment and continueto take appropriate measures to strengthen the internal controlenvironment of the Company.

43

Statement of Internal Control


Material Contracts involvingdirectors and substantial shareholdersMaterial contracts entered into by the Company which involveDirectors’ and major shareholders’ interests and still subsistingat the end of the financial year ended 28 February 2005, orentered into since the end of the previous financial year,comprise the following:

a) On 12 October 2000, the Company entered into a TechnicalService Agreement with ÆON Co., Ltd. (formerly known asJUSCO Co., Ltd.) whereby the Company is granted theexclusive right by ÆON Co., Ltd. to use their trademark in relation to goods and services. The Company is also grantedthe non-exclusive right to use the information and know-how, employed or developed by ÆON Co., Ltd. for themanagement and operation of retail stores, wholesalebusiness and related supporting activities. The total cashconsideration payable by the Company to ÆON Co., Ltd. forthe year under review amounted to RM9.295 million. ÆONCo., Ltd. is a major shareholder of the Company.

b) On 1 July 1997, the Company entered into a FactoringAgreement 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 creditunder its easy payment scheme are factored to AEONCredit Service (M) Sdn Bhd. The debts sold to AEON CreditService (M) Sdn Bhd are at full value of the goods and uponthe terms and conditions as stated in the factoringagreement. The total value of the debts sold to AEON CreditService (M) Sdn Bhd in the year under review amounted toRM4.403 million. Dato’ Abdullah bin Mohd Yusof and EncikRamli bin Ibrahim, both Directors of AEON CO. (M) BHD.(formerly known as Jaya Jusco Stores Bhd.), are alsoDirectors and major shareholders in AEON Credit Service(M) Sdn. Bhd. ÆON Co., Ltd. has an indirect interest inAEON Credit Service (M) Sdn. Bhd. through AEON CreditService Co. Ltd.

Non Audit FeesThe amount of non-statutory audit fees paid to the externalauditor and its affiliates during the year under review isRM130,625, comprising of mainly advisory, review and tax services.

Revaluation Policy onLanded PropertiesThere is no revaluation policy on the Company’s landedproperties. The Company adopted the transitional provisionsissued by Malaysian Accounting Standards Board (MASB) toretain the carrying amount on the basis of their previousrevaluation as stated in page 58 of this Annual Report.

44

Other Information

Financial Statementsfor the year ended 28 February 2005

Directors’ Reportfor the year ended 28 February 2005


46

The Directors have pleasure in submitting their report and the audited financial statements of the Company for the year ended28 February 2005.

Principal activitiesThe Company is principally engaged in the operations of a chain of superstores selling a broad range of goods ranging fromclothing, food, household goods, other merchandise and shopping center operation. There has been no significant change in thenature of these activities during the financial year.

Change of nameOn 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 provisionsThere were no material transfers to or from reserves and provisions during the year under review except as disclosed in thefinancial statements.

DividendSince the end of the previous financial year, the Company paid a first and final dividend of 20% less tax of 28%, amounting toRM12,636,000 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 CompanyDirectors who served since the date of the last report are:

Dato’ Abdullah bin Mohd YusofToshiji TokiwaSoichi Okazaki Masato Yokoyama Tatsuichi YamaguchiRamli bin IbrahimBrig. 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)


47

The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations of those who wereDirectors 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 Directorshave direct interest in the Company

Dato’ Abdullah bin Mohd Yusof 154,000 154,000 - 308,000Soichi Okazaki 15,000 15,000 - 30,000Masato Yokoyama 15,000 15,000 - 30,000

Shareholdings in which Directorshave indirect interest in the Company

Dato’ Abdullah bin Mohd Yusof 5,676,000 5,600,000 (3,626,000) 7,650,000Ramli 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 itsrelated corporations during the financial year.

Directors’ benefitsSince 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 inthe financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firmof which the Director is a member, or with a company in which the Director has a substantial financial interest, except for certainDirectors who may be deemed to derive a benefit by virtue of those transactions, advisory services and tenancy between theCompany 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 theCompany 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 100,000,000ordinary 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 wayof 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) existingordinary share.

There were no other changes in the issued and paid-up capital of the Company during the financial year.

Options granted over unissued sharesNo options were granted to any person to take up unissued shares of the Company during the financial year.


Significant event during the financial yearDuring 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 bepart of the development of a shopping center.

Other statutory informationBefore 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 financialstatements 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 financialstatements 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 theperiod of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affectthe 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 havenot 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


49

AuditorsThe 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

Balance Sheetat 28 February 2005


50

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.


51

Income Statementfor 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

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.

1,523,781

31,545

95,271

1,061

724


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


52

Statement of Changes in Equityfor the year ended 28 February 2005


2005 2004

RM’000 RM’000

Cash flows from operating activitiesProfit before taxation 99,010 96,288Adjustments for:

Depreciation 55,273 43,720Interest expense 987 44Interest income (421) (1,061)(Gain) / Loss on disposal of property, plant and equipment (15) 106Property, 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 activitiesPurchase of property, plant and equipment (119,237) (175,696)Proceeds from disposal of property, plant and equipment 87 97Interest received 421 1,061

Net cash used in investing activities (118,729) (174,538)

Cash flows from financing activitiesDividend 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 23,709Deposits with licensed financial institutions 62,700 58,900Bank Overdraft (307) -

92,056 82,609


53

Cash Flow Statementfor the year ended 28 February 2005


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 decreasein 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 datewhen 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 periodof 95-99 years. Buildings are depreciated on a straight-line basis over the shorter of 50 years or the lease period. Thestraight-line method is used to write off the cost of the other assets over the term of their estimated useful lives at thefollowing 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 adiminution 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 asincurred.

(g) Liabilities

Trade and other payables are stated at cost.

54

Notes to the Financial Statements


(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 investmentswhich have an insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cashequivalents 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 unitto 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 generatelargely 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 recognisedin equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted orsubstantially 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 assetsand liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for theinitial 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


(l) Foreign currency transactions

Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at the date of thetransactions. 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 anddiscounts 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, salescommissions 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 theasset.

(n) Expenses

i) Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over theterm of the lease.

ii) Interest expenses

All interest and other costs incurred in connection with borrowings are expensed as incurred.

56


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 87,666Leasehold land at

valuation 60,761 - - - 60,761Buildings at valuation 126,003 - - - 126,003Leasehold land at cost 58,660 11,362 - 5,585 75,607Buildings at cost 244,479 512 - 207 245,198Structures 72,400 10,303 (4) 179 82,878Office equipment 5,646 954 (67) 18 6,551Machinery and equipment 160,708 15,626 (2,988) - 173,346Furniture, fixtures and

fittings 128,621 14,434 (1,747) - 141,308Motor vehicles 4,018 412 (44) - 4,386IT equipment 260 - - - 260Construction 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 - - 6,540Buildings at valuation 24,411 2,520 - - 26,931Leasehold land at cost 1,827 616 - - 2,443Buildings at cost 34,297 5,620 - - 39,917Structures 17,866 7,503 (1) - 25,368Office equipment 3,132 540 (58) - 3,614Machinery and equipment 45,918 18,520 (2,584) - 61,854Furniture, fixtures and

fittings 79,792 18,737 (1,697) - 96,832Motor vehicles 2,346 586 (31) - 2,901IT equipment 205 17 - - 222

215,720 55,273 (4,371) - 266,622

57


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 569Buildings at valuation 99,072 101,592 2,520Leasehold land at cost 73,164 56,833 269Buildings at cost 205,281 210,182 4,657Structures 57,510 54,534 6,466Office equipment 2,937 2,514 450Machinery and equipment 111,492 114,790 12,566Furniture, fixtures and fittings 44,476 48,829 15,714Motor vehicles 1,485 1,672 486IT equipment 38 55 23Construction 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 anindependent firm of valuers in February 1995 using the open market value and on an existing use basis. In accordance withthe transitional provisions issued by Malaysian Accounting Standards Board ("MASB") upon adoption of InternationalAccounting Standard No. 16 (Revised), "Property, Plant and Equipment", the valuation of these assets have not beenupdated, 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 ofthe 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 9,702Buildings 62,234 63,930

71,820 73,632

3. Investments

2005 2004

RM’000 RM’000

Long term

Unquoted shares, at costGolf membership 45 45Equity investment 130 130

175 175

58


4. Inventories

2005 2004

RM’000 RM’000

At cost:Retail merchandise 96,553 103,163Food 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 11,515Other receivables and prepayments 3,796 3,946Rental 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 withcommon 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 23,709Deposits with licensed financial institutions 62,700 58,900

92,363 82,609

59


60

7. Trade and other payables

2005 2004

RM’000 RM’000

Trade payables 276,152 264,169Other payables and accrued expenses 87,711 82,987Progress claim from contractors 3,986 20,430Rental and utility deposits 44,913 40,469Affiliated 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’sbase lending rates.

9. Share capital

2005 2004

RM’000 RM’000

Ordinary shares of RM1.00 each:Authorised

Opening balance 100,000 100,000Created during the year 400,000 -

Closing balance 500,000 100,000

Issued and fully paidOpening balance 87,750 87,750Bonus issue 87,750 -

Closing balance 175,500 87,750


10. Reserves

2005 2004

RM’000 RM’000

Non-distributableShare premium 20,609 108,488Revaluation reserve 34,165 34,682

54,774 143,170Distributable

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 assetsagainst current tax liabilities and where the deferred taxes relate to the same taxation authority.

61


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 120Bad debts written off - 68Depreciation 55,273 43,720Directors’ emoluments

- remuneration 852 876- fees 1,048 930

Loss on disposal of property, plant and equipment - 106Property, plant and equipment written off 407 144Rental 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 Directorsof the Company is RM39,300 (2004 - RM35,700).

13. Employee information

2005 2004

RM’000 RM’000

Salaries and wages 83,943 72,091EPF 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 12Other borrowings 947 32

987 44

62


15. Tax expense

2005 2004

RM’000 RM’000

Current tax expense 34,656 28,901Deferred 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 26,960Non-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 averagenumber 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 87,750Effects 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 bonusissue have been adjusted in deriving the comparative figure.

17. Dividend

2005 2004

RM’000 RM’000

OrdinaryFinal 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 accountedfor in the financial statements.

63


18. Segmental reporting

Segment information is presented in respect of the Company’s business segment. The primary format, businesssegments, is based on the Company’s management and internal reporting structure. There is no segmental analysis bygeographical 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 beallocated 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 tobe 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 segmentsRevenue 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 95,271Interest expense (987) (44)Interest income 421 1,061

Profit before taxation 99,010 96,288Tax 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 81,571 120,609 119,237 175,696Depreciation 36,967 29,275 18,306 14,445 55,273 43,720Non-cash expenses

other than depreciation 403 106 204 38 607 144

64


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 29,927Between one and five years 136,267 133,860More 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 9to 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. Thelease is for an initial period of twelve years, with an option to renew the lease for another twelve years. The Company alsohas the option to terminate the lease after the third year in the event certain conditions stipulated in the lease agreement isnot 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 32,403Authorised but not contracted for 306,679 4,318

321,760 36,721

65


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 disclosedelsewhere in the financial statements are as follows:

2005 2004

RM’000 RM’000

Balances

With companies in which Dato’ Abdullah bin Mohd Yusofand Ramli bin Ibrahim have interest:

Laura Ashley (Malaysia) Sdn. Bhd.Amount due from in respect of management

fee receivable 12 19Amount 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 & ZainudinLegal fees payable 6 13


Laura Ashley (Malaysia) Sdn. Bhd.Management fee receivable 67 70Rental income receivable 437 380


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 undernegotiated terms.

66


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 companyRoyalty expenses 9,295 8,061

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’sbusiness. 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 evaluationsare performed on shopping center tenants and the Company requires all tenants to place adequate security deposits asstipulated under the tenancy agreement. At balance sheet date, the Company does not have any major concentration of creditrisk on its shopping center tenants. The maximum exposure to credit risk for the Company was represented by the carryingamount 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 financingfacilities. Interest-earning financial assets are mainly deposits placed with financial institutions that generate interest income forthe Company.

The management monitors the prevailing interest rates at regular intervals, and maintains an appropriate level of cash and cashequivalents to finance the working capital requirements and mitigate the effects of fluctuation in cash flow and liquiditypositions of the Company.

In view of the competitive rates that are available from the prevailing banking facilities granted to the Company to finance itsworking capital requirements and the prevailing low interest rate scenario, the interest rate risk is not expected to have amaterial 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 substantiallydenominated in Ringgit Malaysia.

Liquidity risk

The Company monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance theCompany’s operations and to mitigate the effects of fluctuations in cash flows.

67

Affliated company’s subsidiariesPurchase of merchandise 381 -Consultation fees 126 -

These transactions have been entered into in the normal course of business and have been established under negotiated terms.

381 -126 -


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 dateand 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 amountsapproximate 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 35Not 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 unquotedcompany. 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


69

In the opinion of the Directors, the financial statements set out on pages 50 to 68 are drawn up in accordance with the provisionsof the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of thestate 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


I, Poh Ying Loo, the officer primarily responsible for the financial management of AEON CO. (M) BHD. (formerly known as JayaJusco Stores Bhd.), do solemnly and sincerely declare that the financial statements set out on pages 50 to 68 are, to the bestof my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and byvirtue 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:

Statement by Directorspursuant to Section 169(15) of the Companies Act, 1965

Statutory Declarationpursuant to Section 169(16) of the Companies Act, 1965

Report of the Auditorsto 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 responsibilityof 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 assumeresponsibility 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 planand perform the audit to obtain all the information and explanations which we consider necessary to provide us with evidence togive reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on atest basis, evidence relevant to the amounts and disclosures in the financial statements. An audit also includes an assessmentof the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy ofthe 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; andii) 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 0759Chartered Accountants

Abdullah Abu SamahPartnerApproval Number: 2013/06/06(J)



70


71

Authorised Share Capital : RM500,000,000 Paid-up Share Capital : RM175,500,000Class of Shares : Ordinary Share of RM1 eachVoting 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 0.00100 - 1,000 357 24.25 287,664 0.161,001 - 10,000 845 57.40 3,029,200 1.7310,001 - 100,000 131 8.90 4,856,100 2.77 100,001 - 8,774,999 59 4.01 69,989,900 39.888,775,000 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

Analysis of Shareholdingsanalysis of shareholdings as at 29 April 2005

List of 30 Largest Shareholdersas 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 )


Amanah Saham Wawasan 2020

Permodalan Nasional Berhad


Nordea Bank Danmark A/S for Unibank S.A.Luxembourg


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)


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


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


HSBC-FS for Aberdeen Malaysia Equity Fund


Sekim Amanah Saham Nasional

Permodalan Nasional Berhad


72


73

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


74

Particulars of PropertiesDetails of the Company’s properties as at 28 February 2005 are set out below:

Location

Lot 7041,Mukim of Bukit Baru,District ofMelaka Tengah,Melaka.

Lot 23551, Mukim of Setapak,District and State of WilayahPersekutuan.

Lot PT 21441,Mukim of Kapar,District of Klang,Selangor.

Lot PT 162010,Mukim of Ulu Kinta,District of Kinta,Perak.

Lot 49045,Mukim of Pulai,District of JohorBahru, Johor.

Lot 4086, Kawasan A,Mukim Batu, Daerah Kuala Lumpur,Wilayah Persekutuan

Lot PTD 114179,Mukim of Tebrau,District of JohorBahru, Johor.

Lot PT 41977,Mukim of Cheras,District of Ulu Langat,Selangor.

Lot 3144,Mukim of Cheras,District of Ulu Langat,Selangor.

Leaseholdcommercial land/Existing two-storeyshopping centerExtension/Renovation

Leaseholdcommercial land/Two-storey shoppingcenter and three-storeycar park

Leaseholdcommercial land/Two-storey shoppingcenter andtwo-storey car park

Freehold land/Two-storey shoppingcenter and two-storeycar park

Freehold land/Two-storey shoppingcenter including covered car park

Leasehold land/ Two-storey shoppingcenter and three-storeycar park

Freehold land

Leasehold land

Freehold land

436,036/

200,316

179,989

368,516/666,694

643,753/691,414

609,840/794,806

377,490/483,299

410,815/906,497

1,308,035

550,910

113,451

February 1995 (R)

February 1995 (R)

June 1994 (A)/October 1995 (C)

April 1996 (A)/August 1997 (C)

April 2002 (A)/August 2002 (C)

January 2004 (C)

March 2004 (A)

April 2004 (A)

April 2004 (A)

99 yearsexpiring on19/12/2089



Freehold

Freehold

99 yearsexpiring onApril 2101

Freehold


Freehold

60,405

91,644

69,634

84,295

29,277

93,981

41,745

14,244

11,224

Description/

Existing use

Land/

Built-up

area

(sq ft)

Date of

Acquisition(A)/

Completion (C)/

Revaluation (R)

Approx.

age of

building

(year)

Tenure

(Year of

expiry for

leasehold)

Net book

value as at

28/02/2005

(RM’000)

13

61/2

12

9

8

21/2

1

-

-

-


75

JUSCO STORES & SHOPPING CENTERS

JUSCO TAMAN MALURI

Jalan Jejaka, Taman Maluri,Cheras, 55100 Kuala Lumpur. Tel: 03-9285 5222

JUSCO TAMAN MALURI

SHOPPING CENTER

Taman MaluriTel: 03-9285 5222

JUSCO MELAKA

Leboh Ayer Keroh, 75450 Melaka Tel: 06-232 4899

JUSCO MELAKA

SHOPPING CENTER

MelakaTel: 06-232 4899

JUSCO BANDAR UTAMA

No. 1, Leboh Bandar Utama,Bandar Utama, Damansara, 47800 Petaling Jaya, Selangor Darul Ehsan.Tel: 03-7726 6266

JUSCO 1 UTAMA

SHOPPING CENTER

Bandar UtamaTel: 03-7726 6033

JUSCO BANDAR BARU

KLANG

Persiaran Bukit Raja 2, Bandar Baru Klang, 41150 Klang, Selangor Darul Ehsan.Tel: 03-3343 9366

JUSCO BUKIT RAJA

SHOPPING CENTER

Bandar Baru KlangTel: 03-3343 2166

JUSCO IPOH

No.2, Jalan Teh Lean Swee, Off Jalan Sultan Azlan Shah Utara,31400 Ipoh, Perak Darul Ridzuan. Tel: 05-549 9633

JUSCO KINTA CITY

SHOPPING CENTER

IpohTel: 05-548 4668

JUSCO WANGSA MAJU

Jalan R1, Seksyen 1, Bandar Baru Wangsa Maju,53300 Kuala Lumpur. Tel: 03-4149 7666

JUSCO ALPHA ANGLE

SHOPPING CENTER

Wangsa MajuTel: 03-4149 5288

JUSCO BANDAR PUCHONG

Lot G40, IOI Mall, Batu 9, Jalan Puchong, Bandar Puchong Jaya, 47100 Puchong, Selangor Darul Ehsan.Tel: 03-8070 1200

JUSCO PERMAS JAYA

No. 1, Jalan Permas Utara, Bandar Baru Permas Jaya, 81750 Johor Bahru, Johor.Tel: 07-386 8900

JUSCO PERMAS JAYA

SHOPPING CENTER

Tel: 07-386 0600

JUSCO TAMAN UNIVERSITI

No. 4, Jalan Pendidikan, Taman Universiti, 81300 Skudai, Johor Darul Takzim.Tel: 07-521 8000

JUSCO TAMAN UNIVERSITI

SHOPPING CENTER

Tel: 07-520 8000

JUSCO MID VALLEY

AT3 Mid Valley Megamall, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.Tel:03-2284 4800

JUSCO METRO PRIMA

No. 1, Jalan Metro Prima, 52100 Kepong, Kuala LumpurTel: 03-6257 2121

JUSCO METRO PRIMA

SHOPPING CENTER

Tel: 03-6259 1122

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Directory


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

Milestones


77

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of AEON CO. (M) BHD. (formerly known as Jaya JuscoStores Bhd.) will be held at Ballroom 1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 22 June2005 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 ended 28 February 2005 together with the Reports of the Directorsand Auditors thereon.

2. To declare a First and Final Dividend of 12 sen per share less 28% income tax for the year ended 28 February 2005.

3. To approve the payment of Directors’ Fees for the year ended 28February 2005.

4. To re-elect the following Directors retiring under Article 74 of theCompany’s Articles of Association :-

i) Dato’ Abdullah bin Mohd Yusofii) Mr. Toshiji Tokiwaiii) Mr. Tatsuichi Yamaguchiiv) Mr. Masato Yokoyamav) Encik Ramli bin Ibrahimvi) Brig. Jen. (B) Dato’ Mohd Idris bin Samanvii) Datuk Zawawi bin Mahmuddinviii) Dato’ Chew Kong Seng

5. To re-appoint Messrs KPMG Desa Megat & Co. as Auditors of theCompany 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 THERECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE ORTRADING NATURE (“PROPOSED RENEWAL OF SHAREHOLDERS’MANDATE”)

“THAT approval be and is hereby given to the Company, to enter andgive effect to the recurrent related party transactions of a revenue ortrading nature (hereinafter to be referred to as “Recurrent Transactions”) with the related parties as stated in Section 2.2 of theCircular to Shareholders dated 31 May 2005 which are necessary forthe Company’s day-to-day operations subject further to the following:

Ordinary Resolution 1













78

(i) the Recurrent Transactions contemplated are in the ordinary courseof business and on terms which are not more favourable to relatedparties than those generally available to the public, and are not tothe detriment of the minority shareholders;

(ii) the approval is subject to annual renewal and shall only continue tobe in force until:

(a) the conclusion of the next Annual General Meeting of theCompany 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 aresolution passed at the Annual General Meeting the mandateis again renewed;

(b) the expiration of the period within which the next Annual General Meeting of the Company after the date it is required tobe 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 theRecurrent Transactions conducted pursuant to the ProposedRenewal of Shareholders’ Mandate in the Annual Report of theCompany 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 theRecurrent Transactions entered into and their relationship withthe Company.

AND THAT the Directors of the Company be and are hereby authorised todo all acts and things to give full effect to the Recurrent Transactionscontemplated and/or authorised by this resolution, as the Directors of theCompany, in their absolute discretion, deem fit.”



79

Notice of Dividend Payment

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Twentieth Annual General Meeting, a firstand final dividend of 12 sen per share less 28% income tax in respect of the financial year ended 28 February 2005 will be paidto 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 LumpurDate: 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 hisstead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the CompaniesAct, 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 theprovisions 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 ofhis 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 TamanMaluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur not less than 48 hours before the time setfor holding the meeting.

5. If the appointor is a corporation, the instrument appointing a proxy must be executed under its Common Seal or under thehand of its attorney.

6. Explanatory Note on the Special Business:Ordinary Resolution 13 on the Proposed Renewal of Shareholders’ MandateThe proposed Ordinary Resolution 13, if passed, will empower the Directors from the date of the Twentieth Annual GeneralMeeting, to deal with the related party transactions involving recurrent transactions of a revenue or trading nature which arenecessary for the Company’s day-to-day operations. These recurrent related party transactions are in the ordinary course ofbusiness and are on terms not more favourable to the related parties than those generally available to the public and not to thedetriment of the minority shareholders. This authority unless revoked or varied at a general meeting, will expire at the nextAnnual General Meeting of the Company and subject always to provision (ii) of the resolution. The details of the recurrent relatedparty transactions are set out in the Circular to the Shareholders dated 31 May 2005, which is despatched together with thisAnnual Report.

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 Directorsare 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

Statement Accompanying Notice ofTwentieth Annual General Meeting



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 Ballroom1, Level 2, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 22 June 2005 at 10.30 a.m. and at any adjournmentthereof.

(Company No. 126926-H)(Incorporated in Malaysia)

AEON CO. (M) BHD. (formerly known as Jaya Jusco Stores Bhd.)

My/our proxy is to vote as indicated below :

For AgainstNo.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

Resolution 11

Resolution 12

Resolution 13

No. of shares heldPROXY FORM

[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.]

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 neednot 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 Section149(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 berepresented 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.

Dated this day of 2005

Ordinary Resolution

To receive the Audited Financial Statements for the year ended 28 February 2005 together

with the Reports of the Directors and Auditors thereon.

Declaration of a First and Final Dividend of 12 sen per share less 28% income tax

Approval of Directors’ Fees

Re-election of Dato’ Abdullah bin Mohd Yusof

Re-election of Mr. Toshiji Tokiwa

Re-election of Mr. Tatsuichi Yamaguchi

Re-election of Mr. Masato Yokoyama

Re-election of Encik Ramli bin Ibrahim

Re-election of Brig. Jen. (B) Dato’ Mohd Idris bin Saman

Re-election of Datuk Zawawi bin Mahmuddin

Re-election of Dato’ Chew Kong Seng

Re-appointment of KPMG Desa Megat & Co.

Proposed Renewal of Shareholders’ Mandate for the Recurrent Related Party Transactions of aRevenue or Trading Nature

Place StampHere

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.

We Have Moved

We are pleased to announce that, effective11 April 2004, we have relocated our head /management office to the JUSCO TamanMaluri Shopping Center. As of this date, our business address, telephone and faxnumbers are as follows:

AEON CO. (M) BHD. (126926-H)

(Formerly known as JAYA JUSCO STORES BHD.)Head Office3rd Floor, JUSCO Taman Maluri Shopping Center,Jalan Jejaka, Taman Maluri, Cheras,55100 Kuala Lumpur.Tel: 03-9207 2005Fax: 03-9207 2006/2007

All JUSCO outlets, including Stores andShopping Centers will retain their existingbusiness addresses.

aeon co. (m) bhd.aeonretail.com.my/corporate/investor/annual/pdf/2005.pdfperformance by its...

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