JAYA JUSCO STORES BHD (Company No.: 126926-H)

Tingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.

A n n u a l R e p o r t2 0 0 1Financial Year Ended February 28, 2001

JAYA JUSCO STORES BHD (126926-H)

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A n n u a l R e p o r t2 0 0 1

Whenever a new shoppingcenter is opened in Japan or inSoutheast Asia, the Aeon Groupmakes every effort to planttrees native to that locale aspart of the facility. By having thecustomers plant trees together

with us, we conceived this as a means of raisingpeople’s awareness of environmental problems.

Since we began this activity in 1991, at the Jaya JuscoMelaka store, the Aeon Group has planted more than4.02 million trees at 288 store sites in Japan and othercountries, including Malaysia.

I n t r o d u c t i o n

JAYA JUSCO STORES BHD. is a leadingretailer in Malaysia with a total revenueof RM990.0 million.

The Company was incorporated on 15September 1984. JAYA JUSCO was set up inresponse to the Malaysian Government’sinvitation to Jusco Japan to help modernisethe retail ing industry in Malaysia. The“JUSCO” name is well established amongMalaysians as well as foreigners, partly dueto its association with the internationalAEON Group of Japan. JAYA JUSCO hasestablished itself as a leading chain ofsuperstores as evidenced by constant interiorredecoration of our outlets, to project animage that will satisfy the demands of apopulation with ever changing needs andwants. The Company’s performance is furtherenhanced by the management’s accurateunderstanding of targeted market needs andthe provision for a correct product mix.

JAYA JUSCO outlets are situated in suburbanresidential areas, tapping the vast middleincome group who are less likely to beaffected by an economic downturn.

The AEON Group, of which JUSCO Co., Ltd.is the core company, consists of generalmerchandise stores, supermarkets, discountstores, home centres, speciality stores andconvenience stores. The Group’s wide-ranging involvement also extends to financialservices, restaurant operations and shoppingcenter development. The Group’s activities,which are primarily related to the retailbusiness are not limited to Japan, but coversa broad geographical area throughout theworld. The name AEON comes from a Latinword which means “eternity” and symbolisesthe Group’s desire to sustain continuedgrowth as a sound business group into the21st century and beyond.

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Our Principle, regardless of how the timesmay change, is to serve the “Customer First”.We are always mindful of the three keywordswhich make up the essence and character ofthe retail industry and must have theirpresence in any development: “peace”,“people” and ”community”. It is a person-to-person business and our existence is deeplyintertwined with the people in the regionsand societies which we serve. Theseprecepts remain the same wherever we dobusiness. In every region of the world, weact as a contributing member of the localcommunity.

Our Goal is to operate as an “international-scale retailing group”, which is recognisedfor its excellence not only in Japan, but alsoby other nations. The international recognitionwe are working to achieve is not onemeasured in merely quantifiable terms ofsize, growth and profitability. We hope to becompetitive at the global level in intangibleelements such as customer satisfaction andcorporate citizenship. We are dedicated tothe idea of “quality management” to furtherenhance our capabilities.

Our Strategy is to establish a solidcompetitive position and to achievecontinuous growth. Two key componentsunderlying this strategy are:

Accelerating Shopping Center Development.We are channeling our resources to developattractive, integrated commercial facilitieswhich our customers can fully enjoy, such asregional shopping centers and neighborhoodshopping centers. This segment also involvesin leasing facilities to tenants.

Aggressive Pursuit of GMS Stores. OurGeneral Merchandise Stores (GMS), whichcombine supermarkets and generalmerchandise stores under one roof, operateas full-line retailers. Products offered rangefrom food and other daily necessities,apparel and household goods, includingbedding and bathroom products, tospecialized products such as homeappliances, sporting goods and cosmetics.

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C o r p o r a t e I n f o r m a t i o n

C o r p o r a t e C a l e n d a r

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Board of Directors

• Dato’ Abdullah bin Mohd Yusof (Chairman)

• Toshiji Tokiwa

• Akihito Tanaka

• Masaaki Toyoshima

• Kamarudin bin Abu Hassan

• Yoichi Kimura

• Motoya Okada

• Ramli bin Ibrahim

• Tan Sri Datuk (Dr.) Kazumasa Suzuki

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

Secretaries Saw Bee Lean (MAICSA 0793472)Lum Chee Yeng (MAICSA 0880217)

Registered OfficeTingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.Tel: 41433288 Fax: 41490222/333

Homepage http://www.jusco.com.my

Principal Bankers Bank of Tokyo-Mitsubishi (Malaysia) Berhad (302316-U)Malayan Banking Berhad (3813-K)

Auditors & Reporting Accountants KPMG Desa Megat & Co. (AF0759)Public Accountants, Wisma KPMG, Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur.

Registrars M & C Services Sdn Bhd (3775-X )11th Floor, Wisma Damansara, Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur.

Stock Exchange ListingMain Board of Kuala Lumpur Stock Exchange

Re-opening of Jusco Taman Maluri 30 November 2000

Opening of new Jusco Bandar Puchong 22 December 2000

21st Century Charity Countdown, “With All Our Hearts”, 31 December 2000 ~ 1 January 2001

Quarterly Results Announcement

1st Quarter 25 July 2000

2nd Quarter 25 October 2000

3rd Quarter 22 January 2001

4th Quarter 27 April 2001

Announcement of Proposed Rights Issue 26 May 2000

Extraordinary General Meeting 20 November 2000

Listing of Rights Shares 27 February 2001

Annual General Meeting 19 June 2001

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B o a r d o f D i r e c t o r s

Dato’ Abdullah bin Mohd YusofNon-Executive Chairman

Mr Masaaki ToyoshimaManaging Director

Encik Kamarudin bin Abu HassanExecutive Director

Dato’ Abdullah bin Mohd Yusof, aged 62, is the Non-Executive Chairman of Jaya Jusco.He was appointed to the Board of Directors of Jaya Jusco on 26 October 1984. He holdsa Bachelor of Laws (Honours) degree from University of Singapore, which he obtained in1968. He has more than thirty (30) years of experience as an Advocate & Solicitor. Hestarted his legal career with Skrine & Co., as an Advocate & Solicitor in 1968 beforestarting his own partnership under the name of Tunku Zuhri Manan & Abdullah, Advocates& Solicitors in 1969 and subsequently renamed the law firm to Abdullah & Zainuddin,Advocates & Solicitors in 1989. Currently, he is a Partner of Abdullah & Zainuddin,Advocates and Solicitors and is also the Chairman of Faber Group Berhad and SouthernSteel Berhad, a Director of Sistem Televisyen Malaysia Berhad and Renong Berhad, all ofwhich are companies listed on the KLSE and he also sits on the Board of Directors ofseveral private limited companies.

Mr Masaaki Toyoshima, aged 49, is the Managing Director of Jaya Jusco. He wasappointed to the Board of Directors of Jaya Jusco on 6 December 1994 and is a memberof the Audit Committee of Jaya Jusco. He holds a Bachelor of Economics degree fromNihon University, Japan which he obtained in 1974. He joined Jusco Co., Ltd. (JCL) in1974 and assumed the position of Manager of the Control Department, Kinki District ofJCL from 1976 to 1984. He was promoted to the position of General Manager of theControl Division of Fukuoka Jusco Co.Ltd. in 1984. He was seconded to Jusco Stores(Hong Kong) Co., Ltd. in 1986 where he assumed the position of Senior Manager ofAdministration and was subsequently promoted to the position of Executive Director in1990. In 1994, he was transferred to Jaya Jusco to assume the position of DeputyManaging Director. His efforts contributed to the successful listings of two companies,namely Jusco Stores (Hong Kong) Co., Ltd. in 1994 and Jaya Jusco in 1996, respectively.

Encik Kamarudin bin Abu Hassan, aged 58, is an Executive Director of Jaya Jusco. Hewas appointed to the Board of Directors of Jaya Jusco on 16 January 1997. He holds anAdvanced Diploma in Military Civil Engineering from the United States Army EngineeringSchool, Fort Belvoir, Virginia, USA and is a graduate from the Malaysian Armed ForcesStaff College, Kuala Lumpur where he completed his staff course in 1979 and 1981,respectively. In 1966, he joined the Malaysian Armed Forces and held various positionstherein for more than twenty-one (21) years. In 1987, he retired from the Malaysian ArmedForces and joined the Company as the Personnel Manager. He was promoted to theposition of Senior Personnel Manager in 1994 before assuming the position of GeneralManager of Personnel, Finance, Administration and Security in 1996. He was conferredthe "Outstanding Management Award" by the Chairman and Chief Executive Officer("CEO") of JCL in 1991.

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Mr Toshiji Tokiwa

Mr Motoya Okada

Mr Yoichi Kimura

Mr Toshiji Tokiwa, aged 61, is a Non-Executive Vice-Chairman of Jaya Jusco. He was appointed tothe Board of Directors of Jaya Jusco on 16 June 2000. He holds a Bachelor of Law degree from KeioUniversity, Japan which he obtained in 1963. He joined The Dai-Ichi Kangyo Bank Ltd. in 1963 as aManagement Trainee. In 1993, he was promoted to the position of Director and General Manager ofthe New York Branch of The Dai-Ichi Kangyo Bank Ltd., in New York, USA. Subsequently, he waspromoted as a Senior Managing Director of The Dai-Ichi Kangyo Bank Ltd., in Japan from 1995 to1996. He joined Chuo Real Estate Co. Ltd., a company principally involved in the leasing andmanagement of office building, as the President and CEO from 1996 to 2000 and was also a Non-Executive Corporate Auditor of Fujitsu General Co., Ltd. from 1997 to 2000. He joined Jusco Co.Ltd.,(JCL)as a Non-Executive Director in 1999 and was subsequently appointed as the Chairman of JCL in 2000.

Mr Motoya Okada, aged 50, is a Non-Executive Director of Jaya Jusco. He was appointed to theBoard of Directors of Jaya Jusco on 14 March 1992. He holds a Bachelor of Commerce degree fromWaseda University, Japan and a Master of Business Administration degree from Babson College,Graduate School of Business Administration, USA which he obtained in 1975 and 1978, respectively.He joined Jusco Co.Ltd.,(JCL) in 1979 as a Sales Consultant and served as a Director of JCL from 1990to 1992. Thereafter, he was appointed as the Managing Director of JCL from 1992 to 1995. In 1995he was promoted to the position of Senior Managing Director of the Merchandising Division of JCL.Subsequently, he was promoted to the position of President of JCL in 1997, which he still assumes todate. He is the son of Mr. Takuya Okada.

Mr Yoichi Kimura, aged 56, is a Non-Executive Director of Jaya Jusco. He was appointed to theBoard of Directors of Jaya Jusco on 18 June 1999. He holds a Bachelor of Economics degree fromHitotsubashi University, Japan which he obtained in 1968. He joined The Dai-Ichi Kangyo Bank Ltd.,in Japan in 1968 as a Management Trainee. Since then, he was promoted to the position of GeneralManager of International Credit Supervision Division of The Dai-Ichi Kangyo Bank Ltd., in Japan andserved from 1994 to 1998. He joined Jusco Co.Ltd.,(JCL) in 1998 as the Chief Financial Officer. He hasbeen a Director of JCL since 1998 and currently leads the International Division of JCL.

Mr Akihito Tanaka, aged 53, is a Non-Executive Director of Jaya Jusco. He was appointed to theBoard of Directors of Jaya Jusco on 1 March 1989. He holds a Bachelor of Arts degree in Journalismfrom Kansai University, Japan which he obtained in 1970. He joined Jusco Co.Ltd.,(JCL) in 1970 as aSales Consultant. In 1986, he was seconded to Jusco Stores (Hong Kong) Co., Ltd., where he wasappointed as the Personnel Manager. Thereafter he was appointed as the Managing Director of JayaJusco from 1989 to 1997. In 1993, he was conferred the "Outstanding Award for Executive Excellence"by the Chairman and CEO of JCL. In 1996, he was appointed a Director of JCL and now holds theposition of Managing Director of International Business in JCL. He was the Vice-President of theJapanese Chamber of Trade & Industry, Malaysia ("JACTIM") and the Governor of JACTIM Foundationfrom 1996 to 1997. He is Chairman of Taiwan Jusco Co., Ltd and a Director of Siam Jusco Co. Ltd.,Jusco Stores (Hong Kong) Co., Ltd and Qingdao Dontai Jusco Co., Ltd.

Mr Akihito Tanaka

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Encik Ramli bin Ibrahim

Tan Sri Datuk (Dr.) Kazumasa Suzuki

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

Encik Ramli bin Ibrahim, aged 60, is an Independent Non-Executive Director of Jaya Jusco. He wasappointed to the Board of Directors of Jaya Jusco on 20 August 1996 and is currently the Chairmanof the Audit Committee of Jaya Jusco. He is a member of the Malaysian Institute of Accountants andthe Malaysian Association of Certified Public Accountants. He is also a Fellow of the AustralianInstitute of Chartered Accountants. He was attached to KPMG Peat Marwick ("KPMG") (now knownas KPMG) in Australia and Malaysia from 1959 to 1995. He was appointed a Partner of KPMGMalaysia in 1971. In 1989, he was made the first bumiputera Senior Partner of KPMG Malaysia. Hehas also served on the Boards of KPMG International and KPMG Asia Pacific from 1990 to 1995. Heretired from KPMG Malaysia in 1995. He was a member of the Enquiry Committee set up toinvestigate the affairs of Bumiputra Malaysia Finance Ltd., the Hong Kong subsidiary of BankBumiputra Malaysia Berhad (which had merged with Bank of Commerce (M) Berhad to formBumiputra-Commerce Bank Berhad) from 1983 to 1985. Currently, he sits on the Board of Directors ofKumpulan Guthrie Berhad, HSBC Bank Malaysia Berhad, Hua Joo Seng Enterprise Berhad, RanhillBerhad and several other public and private limited companies. He is a Trustee of Yayasan KebajikanNegara (National Welfare Foundation).

Tan Sri Datuk (Dr.) Kazumasa Suzuki, aged 68, is an Independent Non-Executive Director of JayaJusco. He was appointed to the Board of Directors of Jaya Jusco on 20 August 1996 and is a memberof the Audit Committee of Jaya Jusco. He holds a Bachelor of Economics degree from the GakushuinUniversity, Japan that he obtained in 1957. He joined Mitsui & Co. Ltd.("Mitsui"), a trading companyin 1957. From 1989 to 1996, he was elected to the Board of Directors of Mitsui and was appointed theManaging Director for Mitsui & Co. Ltd., stationed in Malaysia in 1993. He has been the President ofthe JACTIM since its inception in 1984, the Chairman of JACTIM Foundation since 1995, a member ofthe Board of Governors of Bankers Club since 1986, a founding member of the Center for JapaneseStudies at the Institute of Strategic and International Studies, Malaysia (ISIS) since 1991 and amember of the Malaysian-Japan Cultural Association since 1992. He has also received severalprestigious awards since 1987 from the Minister of International Trade and Industry, Japan inrecognition of his long service in the economic development of developing countries and contributiontowards advancing Japanese economic cooperation. In 1997, he was conferred an Honorary Doctorateof Letters from Universiti Kebangsaan Malaysia. Currently, he is the President and CEO of MotokoResources Sdn Bhd., an investment holding company and Adviser to Tejana Trading Corporation Sdn.Bhd., a company principally involved in general trading. He also sits on the Board of Directors ofPerusahaan Otomobil Kedua Sdn. Bhd.

Brig. Jen (B) Dato’ Mohd. Idris bin Saman, aged 56, is an Independent Non-Executive Director ofJaya Jusco. He was appointed to the Board of Directors of Jaya Jusco on 16 June 2000. He holds aPost Graduate Diploma in Management Studies from the Slough College, United Kingdom which heobtained in 1980. He was a graduate of the Air Command & Staff College, Maxwell, USA and theArmed Forces Defence College, Kuala Lumpur. He joined the Royal Malaysian Air Force as a Pilot Officerin 1965 and he served the Royal Malaysian Air Force for thirty-five (35) years. He retired from the RoyalMalaysian Air Force in 2000. He is currently the Executive Chairman of Diversified Jet Sdn. Bhd., acompany principally involved in the supply of materials and services to the Malaysian Armed Forces.

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F i n a n c i a l H i g h l i g h t s

Financial Results 2001 2000 1999 1998 1997RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 990,006 804,214 679,710 692,493 603,273

Sales 909,775 732,779 606,956 618,737 541,025

Rental and other income 80,231 71,435 72,754 73,756 62,248

Profit before tax 69,390 55,710 40,113 6,064 44,340

Profit after tax 46,037 38,210 39,880 (14,443) 27,755

Net dividend 12,636 8,424 11,700 6,318 6,142

Balance sheet

Fixed assets 517,818 447,454 445,191 415,962 336,289

Interest in subsidiary company - - 8 8 -

Investments 175 175 175 175 -

Deferred expenditure - - 2,370 4,110 2,771

Current assets 218,075 104,668 102,398 93,785 146,126

Current liabilities (345,446) (227,396) (203,824) (159,057) (171,992)

Total assets 390,622 324,901 346,318 354,983 313,194

Financed By

Share capital 87,750 58,500 58,500 58,500 58,500

Unappropriated profit 121,778 88,377 59,201 31,021 51,782

Currency fluctuation account - - - - 1,477

Revaluation reserve 55,352 55,352 57,111 57,111 57,111

Share Premium 108,997 58,386 58,386 58,386 58,386

Shareholders’funds 373,877 260,615 233,198 205,018 227,256

Long term liabilities 10,135 60,260 107,720 144,565 83,345

Deferred taxation 6,610 4,026 5,400 5,400 2,593

390,622 324,901 346,318 354,983 313,194

Statistics

Net earnings/(loss) per share (sen) *68.1 *57.5 68.2 (24.7) 53.7

Gross dividend per share (%) 20 20 27.7 15 15

* Earnings per share has been calculated using weighted average number of ordinary shares after adjustment for the Rights Issue.

For Five Years - As at 28th & 29th February

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R e v e n u e

P r o f i t / ( L o s s ) A t t r i b u t a b l e t o S h a r e h o l d e r s

RM million

1000

603.3

692.5679.7

804.2

990.0

500

9697

9798

9899

9900

0001

40

30

20

10

-10

-20

27.8

-14.4

39.9 38.2

9697

9798

9899

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RM million50

40

30

20

10

-10

-20

27.8

-14.4

9697

9798

46.0

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T e r m s o f R e f e r e n c eo f A u d i t C o m m i t t e e

Composition of Audit Committee

The Committee shall be appointed by theBoard from among its members and shallconsist of not less than 3 members of whoma majority shall not be:

a) executive directors of the company or anyrelated corporation.

b) a spouse, parent, brother, sister, son oradopted son, daughter or adopteddaughter of an executive director of thecompany or any related corporation, or

c) any person, having a relationship which,in the opinion of the Board of Directors,would interfere with the exercise ofindependent judgement in carrying out thefunctions of the audit committee.

The Committee shall elect a chairperson fromamongst its members who is not anexecutive director or employee of thecompany or any related corporation.

In the event that a member of the auditcommittee resigns, dies or for any otherreason ceases to be a member, with theresult that the number of members isreduced to below three, the Board ofDirectors shall, within three months of thatevent, appoint such number of new membersas may be required to make up the minimumnumber of three members.

Meetings

The Committee shall meet at least threetimes a year. In addition, the chairpersonshall convene a meeting of the Committee ifrequested to do so by any member, themanagement or the internal or externalauditors to consider any matter within thescope and responsibilities of the Committee.

Attendance At Meetings

The finance manager, the head of internalaudit and a representative of the externalauditors shall normally attend meetings.However, the committee may invite anyperson to be in attendance to assist it in itsdeliberations.

Secretary To Audit Committee

The company secretary shall be the secretaryof the committee and shall be responsible fordrawing up the agenda in consultation withthe chairperson. The agenda together withthe relevant explanatory papers anddocuments shall be circulated to thecommittee members prior to each meeting.

The secretary shall be responsible forkeeping the minutes of the meeting of theCommittee, circulating them to committeemembers and to the other members of theBoard of Directors and for ensuringcompliance with KLSE requirements.

Audit Committee Designation

• Ramli bin Ibrahim Chairman (Independent Non-Executive Director)• Tan Sri Datuk (Dr.) Kazumasa Suzuki Member (Independent Non-Executive Director)• Masaaki Toyoshima Member (Executive Director)

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Quorum

A quorum shall consist of a majority ofcommittee members.

Authority

The Committee is authorised by the Board toinvestigate any activity within its terms ofreference. It has free access to all informationand documents it requires for the purpose ofdischarging its functions and responsibilities.

The audit committee is also authorised toobtain outside legal or other independentprofessional advice as it considers necessary.

Duties And Responsibilities

The duties and responsibilities of theCommittee shall be:

• to review the company’s half yearly andannual financial statements beforesubmission to the Board.

The review shall focus on :

- any changes in accounting policies andpractices.

- major judgemental areas.

- significant audit adjustments from theexternal auditors.

- the going concern assumption.

- compliance with accounting standards.

- compliance with stock exchange andlegal requirements.

• to review with the external auditors theiraudit plan, scope and nature of audit forthe company.

• to assess the adequacy and effectivenessof the systems of internal control andaccounting control procedures of thecompany by reviewing the externalauditors’ management letters andmanagement responses.

• to discuss problems and reservationsarising from the interim and final auditsand any matters the auditors may wish todiscuss.

• to review the internal audit plan, considerthe major findings of internal audit, fraudinvestigations and actions and stepstaken by management in response toaudit findings.

• to review any related party transactionsthat may arise within the Company.

• to consider the appointment of theexternal auditors, the terms of referenceof their appointment, and any question ofresignation and dismissal.

• to undertake such other responsibilitiesas may be agreed to by the Committeeand the Board.

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

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On behalf of the Board of Directors, I havethe pleasure of presenting to you the AnnualReport and Audited Accounts of JAYA JUSCOSTORES BHD for the financial year ended 28Feb 2001.

FINANCIAL REVIEW

The year under review has been a verysuccessful and busy year for Jaya JuscoStores Bhd. The Company continues to posthealthy growth with a turnover of RM990.0million for the year ended 28 Feb 2001. Thisrepresent a 23% increase in turnover overthe previous financial year.

The good turnover, in turn, translates intohigher profits for the company and for theyear ended 28 Feb 2001, the companyachieved a profit before tax of RM69.4million (29 Feb 2000 : RM55.7 million) and aprofit after tax of RM46.0 million (29 Feb2000 : RM38.2 million). At the pre tax level,this represents a 25% increase and at thepost tax level, this represents a 20%increase over the previous year.

The earnings per share which have beencalculated using weighted average numberof ordinary shares after adjustment for theRights Issue is 68.1 sen for the year. This isan improvement from the previous year’searnings per share of 57.5 sen, calculated oncomparable basis.

OPERATIONS REVIEWThe company continues to move forward inthe new millennium, recording furthergrowth for the year under review , and in theprocess, establishing its premier position inthe retail market.

Growth in turnover is attributable not only tothe full year operation of its store in MidValley and contribution of its new store in IOI Mall, but also to the growth in existingstores’ performance. While concentrating tostay ahead of the competition through newoutlets and renovation of existing outlets, thecompany also ensured that its existingoutlets maintain their competitive edge,showing growth at various rates of between1% to 15% over the previous year, despitethe challenging business environment. Ourexisting stores, in Ipoh, Klang and Melakahave gradually established themselves to bethe preferred stores in their respectivemarkets. Our store in Bandar Utamacontinues to show growth.

During the year, the company embarked on amajor renovation of its existing old outlet inTaman Maluri Kuala Lumpur and converted itinto a new shopping center with anapproximate built up area of 965,000 squarefeet. Despite temporary closure forrenovation, the new look Taman Maluri storewas able to recapture its position when itwas reopened in November, thus confirmingits appeal as a shopping mall. Itsperformance for the year under reviewremains impressive with 97% achievementof its previous year’s performance. Thecompany also opened its eighth outlet in thecountry, in the existing IOI Mall, in BandarPuchong. Investment for the Taman Malurioutlet cost approximately RM85 million and

C h a i r m a n ’ s S t a t e m e n t

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for the Bandar Puchong store, the costs wasapproximately RM24 million. The new lookstores add yet another choice for theresidential suburbs that they serve and giventime, we are sure that they, like the otherJaya Jusco stores, will be the store of choicefor many consumers.

At Mid Valley, our store’s performance wasimpressive during its first full year ofoperation in the mall, holding its very own inevery business division against competitionfrom other retailers and specialty stores. Forthe year under review, among all the outlets,it ranked second in contribution to totalcompany’s retail turnover. We believe that itsperformance can be better in the comingyears as the mall and its surroundingsdevelopment fulfill its promise and potential.

Our shopping center management incomecontinued to remain steady throughout theyear under review. Shopping centermanagement income recorded a 12% growthover the previous year as a result ofcontinuous high occupancy, additional tenantspace from our Taman Maluri outlet andtenancy renewals. Tenant mix and qualitycontinued to be enhanced and our shoppingmalls on the average, now, have a 97%occupancy rate.

RIGHTS ISSUE

During the year, the company successfullycarried out a Rights Issue exercise to raisefunds to partially reduce the company’s bankborrowings and also to provide additionalworking capital. The exercise was oversubscribed by 4.4%, reflecting theshareholders continued confidence in thecompany and its management, despite the

prevailing weak market sentiment. A total ofRM80.4 million was raised from the exercisewhich was completed during the year.Besides additional cashflow for the business,the proceeds will also contribute positively tothe Company’s profit in the coming yearsthrough lower interest charges.

CORPORATE CITIZENSHIP

I am proud that the company had during theyear under review also significantly playedits role as a corporate citizen. In the spirit ofcaring and giving, the company undertook amega charity event called “WITH ALL OURHEARTS” at its flagship store in BandarUtama where the company organized thirty-six-hour of fun filled activities and eventsprogramme to attract customers to the mall.21% of the proceeds from the sale ofmerchandise at this store during that periodwas donated to various charitable bodiesthat the company had identified.

I would like to take this opportunity tounreservedly say thank you to all parties thathad come together to make “WITH ALL OURHEARTS” charity event a success, includingbut not limited to parties such as ouresteemed suppliers, the media and ouremployees who had put in tireless efforts inensuring that this event was a success. Mostof all, I would like to thank our customers fortheir open heart, which I am proud to sayresulted in an outstanding charity collectionof RM0.5 million from our sales. Togetherwith public donations and contributions fromJ-card members, a total of RM0.7 million hasbeen donated to the selected charitablebodies .

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PROSPECTS

In the immediate short term, the domesticeconomy is expected to suffer from theglobal economic slowdown and this certainlymeans that retailers will be facing hard timesas consumers buying power weakens.However, we are deeply encouraged by theeconomic measures that the government isimplementing and we are confident thatthese measures will help to cushion theglobal slowdown.

We are also pleased with the government’seffort to make Malaysia a preferred shoppingdestination through the Mega ShoppingCarnival and given time, we are sure that thisevent will be a major success.

Competition will be more intense for JayaJusco in the coming years, either throughnew entry, acquisitions or expansions byexisting retailers. To maintain an edge overits competition and to strive for continuedcustomer service excellence, the companywill be increasing its efforts to ensure thatthe efficiency utilisation of its resources arefurther enhanced, and that any operationalweaknesses will be corrected.

DIVIDEND

The Board of Directors have the pleasure ofrecommending for your approval, a first andfinal gross dividend of 20 per cent less tax,amounting to RM12.636 million for thefinancial year under review.

APPRECIATION

Lastly, on behalf of the Board of Directors, Itake this opportunity to thank themanagement and the staff for theirhardwork, dedication and commitmentthroughout the year. I also take thisopportunity to express and record our sincereappreciation to our business associates,bankers, suppliers and most of all, ourcustomers and also our shareholders for theircontinued support and confidence in thecompany.

DATO’ ABDULLAH BIN MOHD YUSOFCHAIRMAN

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R e v i e w O f O p e r a t i o n s

New supermarket interior

The year under review has been a very busyand challenging year for the company.Besides continuous efforts to maintain itscompetitive edge in the retail businessthrough its existing outlets, the company hadalso embarked on a major renovation for oneof its older outlets, opened its eighth outlet inthe country and organized a mega charityevent at the turn of the new millennium year.

RETAIL STORE OPERATIONS Against a backdrop of a retail businessenvironment whose momentum seems to beslowing down towards the end of the yearunder review, the company’s performance inits retail business for the year ended 28 Feb2001 had been impressive.

Maximizing its strengths as a leading retailerin the market, the company fully exploited itsmix of good shopping environment andfacilities, wide assortment and variety ofmerchandise, value added promotions andgenerous rewards for loyalty to continueattract crowds to its stores.

The various merchandising divisionscontinued to show growth over the previousyear. They registered a growth of between7% to 30% at the total company level and agrowth of between 0.5% to 10% if thecontributions from renovated Taman Maluristore, the Mid Valley store and the newBandar Puchong store are to be excluded.

Other than Taman Maluri store, which wasrenovated during the year, all our outlets hadreported better growth against the previousfinancial year. Ipoh, Melaka and Klang storeshave gradually established themselves intopreferred shopping store within theirneighborhoods. For Ipoh store, their

performance this financial year had beenimpressive with a 15% growth. WangsaMaju and Klang store were equallyimpressive with a 10% growth over theprevious financial year. Despite themushrooming of new shopping centers andretailers , our store in Melaka continues tomaintain its position as one of the leadingretailers in Melaka with a growth of 6%higher over its previous year’s performance.

Our store in Bandar Utama had showngrowth consistently since its opening in1995, even during the economic crisis periodin 1997. For the year under review, it stillmanaged to sustain its growth trend. Thisstore is expected to continue delivering itsperformance especially with the completionof the infrastructural improvements in itsvicinity, which allows better access forcustomers and widen its market base toinclude those outside its residentialsurroundings.

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During the year, the company embarked on arenovation of its outlet in Taman MaluriKuala Lumpur at an approximate cost ofRM85 million and convert it into a newshopping center with a built up area ofapproximately 965,000 square feet.Business was closed for a period of fivemonths. The new look and bigger sizeshopping center had certainly been anattraction since it was reopened to thepublic on 30th November 2000. It boasts ofapproximate retail space of 286,000 square

feet for Jaya Jusco’s owngeneral merchandise andsupermarket and an additional

about 52,000 square feet for tenants. Despiteits temporary closure, Taman Maluri storewas able to capture its lost sales when itwas reopened and its overall performance at97% of its previous year’s performance iscommendable.

JUSCO Taman Maluri

JUSCO Bandar Utama

JUSCO Mid Valley

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Our J-card Day sales had proven to be verypopular with the members. It is common tosee large and enthusiastic crowd at suchdays. Members enjoyed rebates anddiscounts apart from the wide variety ofmerchandise on offer in such days. Thecompany continues to work on enhancingbenefits for the J-card members. During theyear under review, a new lifestyle magazine,appropriately called the PEARL magazine,was produced, exclusively free, for our J-cardmembers. The quarterly published magazineprovides readers with informative articles ongeneral areas of interests, ideas,suggestions, features, latest retailinginformation and happenings, making it asuitable magazine for everyone in the family.

Our home website (http://www.jusco.com.my)through interactive communication, alsoallows us to foster a sense of closeness withour J-card members specifically and ourcustomers generally.

100010000031/12/2001

MOEY HUEY LING

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MOEY HUEY LING

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MOEY HUEY LING

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MOEY HUEY LING

J CARD

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MOEY HUEY LING

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MOEY HUEY LING

A variety of J CARD designs forcustomers to choose from

Pearl, a complimentarymagazine for J CARD memberswas launched in August 2000

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SHOPPING CENTER MANAGEMENT

Shopping center management businessformed the other part of the businessequation that has made Jaya Juscosuccessful. It complements the retailbusiness and has proven to be a winningformula. Management of shopping centerremains a rewarding experience when theshopping mall continuously enjoyed highoccupancy rate and the tenant mix andquality fulfils the company’s requirement.

In this respect, Jaya Jusco Stores Bhd, withits well designed shopping mall layout,suitable tenant mix and quality, goodmaintenance program, strong anchor tenantwith its own supermarket and generalmerchandise store, as well as, excitingpromotional programs has enabled the mallsto being continuously patronized bycustomers. The result of all these is that theoccupancy rate in our shopping malls hadremained high. On the average, occupancy inour shopping malls is about 97%.

Strong demand for tenant space in our mallshad also allowed the company’s shoppingmanagement team to continue monitorexisting tenants performance, conduct andproductivity. Measures and criteria forrenewal and selection of tenants had alsobeen more stringent to ensure that the imageof the shopping center remains fresh andappealing to patrons.

Our newly renovated Taman Maluri shopping

center, while remain largely for our ownsupermarket and general merchandise store,is also now surrounded by quality tenantsthat provide more choices to complementJaya Jusco retail operations. It now hasforty-eight tenants as compared withfourteen tenants previously. Its tenant mixranges from services, restaurants tospecialty shops.

In our malls, we hope not only to create ashopping environment that provide a level ofshopping excitement for all in the family butalso to act as a one stop center for basicservices and amenities. To this end, themanagement is constantly on the lookout fornew ways to equip our malls with theessential services for customer convenienceand comfort. Participation of tenants in ourmalls’ activities are also encouraged for thebenefit of all.

Re-opening of JUSCO Taman Maluri

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HUMAN RESOURCEWith an average manpower of more than4,000 now, the company is aware of theimportance of human resource for its business.

Thus, in the coming years , in order to continueto stay ahead of competition and also theconsumer trends, the company will be focusingmore on human resource development.Suitable training courses and seminars in localand foreign higher educational institiutions arebeing identified and targeted for staffdevelopment. The objective is to develop andequip our managers and staff with thenecessary skills and capabilities to take onnew challenges in the new retail world, tochurn out staff that with their innovations,ideas, leadership and creativity will addimmense value to the organisation. Thechallenge is also to identify potential staff forgrooming, to discover and unlock the potentialin them. The ultimate objective “Right peoplefor the Right Job”. Recruitment policies arecurrently being revamped to systematicallyrecruit and identify staff that are tailored to orare suitable for the retail world. Welfarepolicies are also being look into again forrevision and enhnancement. The companybelieves that these strategies in the long runcan only result in producing a manpower forcenot only capable of delivering operationalexcellence and efficiency but will also bring inintangible benefits of a happy working forcewith good culture. And that can only translateto better customer services and tangiblebenefits including financial returns to thecompany in the long run.

With consistent policies and systems, thesestrategies will also ensure that the companywill continue to have the resources andcapabilities to match the competition, marketdemands and the strategic visions of thecompany in the foreseeable future.

With All Our HeartsCharity Countdown party

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CORPORATE CITIZENSHIPThe year under review saw the companysuccessfully organized its most ambitiousmega charity project as a corporate citizen.

The mega charity event, appropriately named“WITH ALL OUR HEARTS” was carried out atour flagship store in Bandar Utama. Theobjective of providing an avenue and anopportunity for all caring Malaysians from allwalks of life, responsible corporate bodies andnon governmental institutions to spare a fewmoments of their time, in the doorstep of thenew century, to do their bit for the poor and“with all our hearts” genuine and heartiestintentions was successfully achieved.

There were non stop activities and events forthe thirty six hours period and the event wasalso carried live by a local television station atregular intervals during that period. The eventsaw enthusiastic participation by our tenants,suppliers and bankers, to which we are allgrateful. Response from the public was alsoenthusiastic with patrons continue to steadilystreamed into the mall throughout the period,even during the odd hours. A total of RM0.7million comprising a percentage of ourmerchandise sales during that period, publicdonations and J-card members’ contributionwas raised and donated to the selectedcharities.

FUTURE DEVELOPMENTSFor the new financial year, continuousimprovement of our existing stores and mallsthrough refurbishment and maintenance willbe ongoing.

This is necessary as the company needs tocontinuously work hard to maintain freshnessof its malls and stores, so as to motivatecustomers to return frequently and shop withus. Upgrading and maintenance are alsonecessary to ensure that we will continue tostay one step ahead, in the face of theexpected slowdown of the economy, entry ofnew foreign competition and changingconsumer demands.

Continuous efforts are also being made toidentify suitable locations for future opening ofnew outlets through the strategy, wherepossible, of “we design, you build and welease” concept. Ongoing in-depth study ofconsumer behaviours are also not neglectedto ensure that our retail format and criteriacontinue to suit the local retail landscape.

PROSPECTSRetail world in Malaysia continue to attractnew entrants especially foreign retailers whoentered either through acquisitions or jointventure with local partners. We recognizethese new challenges and believe that themarket will still have room for all because as

With All Our Hearts 36-hour non-stop shopping

for charity

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consumers become more affluent in wealthand education, their lifestyle and preferencesalso evolve. Shopping in large retailers andshopping malls is, nowadays, a growing andcommon social behaviour. With new entrants,consumers are faced with wider choices andexposure. Their purchasing decisions will setthe parameters for customer service level,merchandise range, quality, pricing andshopping comfort.

In the short run, the domestic economy isexpected to suffer from the global economyuncertainties. However, it is encouraging tonote that the government are taking variouscounter measures and we hope, with thesemeasures, the impact of any slowdown will beminimal .

For any retailer wishing to succeed in this newage of competitive environment and the fastpace changing consumer demands, it isimportant to understand customer needs andwhat motivates them to continue visiting amall or a retailer. Retailers have to respondquickly to change in trends and social events.Traditional assumptions about customerbehaviours must also be challenged with newsurvey and new retail findings. And ascustomers voice need to be heard, customerservice sections remain always a priority.These areas will be undercontinued focus by JayaJusco .

Annual events and promotions

Japanese delicacies

Jusco CyberworldJaya Jusco entered the cyberworld two yearsago with our own website, “jusco.com.my”.In the first year, the primary focus of thewebsite was to communicate information toour customers. This included corporateinformation as well as sales promotions andJ Card points. Last year, Jaya Jusco’s focuschanged to utilising the website to build astronger partnership with our suppliers. Thefirst phase involved developing an e-procurement site. Using a standardInternet browser, Jaya Jusco suppliers caneasily retrieve an electronic copy of theirPurchase Orders (PO). In the past, supplierscould retrieve their POs using Electronic DataInterchange (EDI). This was an efficient andcontrolled method, however, it also requiredcustomized software. The new e-procurementprocess utilises standard tools allowingflexibility for the suppliers. This new processalso allows Jaya Jusco an easier way toimplement enhancement to bring more valueto the partnership.

Also last year, Jaya Jusco developed anIntranet website.This Intranetwebsite allows asecured and easyway for employeest o a c c e s s

information. It is no longer necessary for newreports to be printed. Information can nowbe accessed via Jaya Jusco’s wide areanetwork from the Intranet website. Forexample, sales information is available to allstores as well as headquarters on an hourlybasis.

Kiosk at 1-UtamaDuring the 36 hours “With All Our Hearts”charity event, Jaya Jusco piloted a newelectronic kiosk at 1-Utama Shopping Center.This Kiosk, which was built on a plasmatouch screen allows customers to search fordifferent shops in the 1-Utama ShoppingCenter. After thissuccessful pilot, morefunctionality will beadded to the kiosk,and more kiosks willbe placed in theshopping center.

Y2KThe potential Y2K problem did not end at thestroke of midnight 2000. To ensure seamlessoperations and due to the 36 hours charityevent at the Bandar Utama store, IT staffwere on standby to ensure a safe cutover tothe New Year. No problems occurred butJaya Jusco was ready if any occurred.

New Technology at the Jaya JuscoStores for Customer Value

Handheld TerminalsHandheld scanners were first introduced inthe Mid Valley store. Later, these scannerswere enhanced and rolled-out to all JayaJusco stores. Jaya Jusco employees nowhave an easy method to ensure productbarcodes can be scanned as well as pricesare correct.

Vertical ScannersTo add speed to the customer checkoutprocess, Jaya Jusco introduced the verticalscanner. These new scanners have a higherpercentage of first time scanning, thusreducing the checkout time.

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I N F O R M A T I O N T E C H N O L O G Y

E-shopping with JUSCO

Hand held price checker

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F i n a n c i a l S t a t e m e n t s2 0 0 1

The Directors have pleasure in submitting their report and the audited financial statements of theCompany for the year ended 28 February 2001.

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

Results RM

Net profit for the year 46,036,706

ReservesThere were no material transfers to or from reserves and provisions during the year under review exceptas disclosed in the financial statements.

DividendSince the end of the previous financial year, the Company paid a first and final dividend of 20% less taxtotalling to RM8,424,000 in respect of the year ended 29 February 2000 on 5 July 2000.

The first and final dividend recommended by the Directors in respect of the year ended 28 February 2001is 20% less tax totalling RM12,636,000.

Directors of the CompanyDirectors who served since the date of the last report are:-Dato’ Abdullah bin Mohd. YusofAkihito TanakaMotoya OkadaMasaaki ToyoshimaTan Sri Datuk (Dr.) Kazumasa SuzukiKamarudin bin Abu HassanRamli bin IbrahimYoichi KimuraToshiji Tokiwa (appointed on 16.6.2000)Brig. Jen (B) Dato’ Mohd Idris bin Saman (appointed on 16.6.2000)Raja Aznin bin Raja Haji Ahmad (appointed on 16.6.2000; resigned on 25.7.2000)Tan Sri Dato’ Seri Halim Saad (retired on 16.6.2000)Takuya Okada (retired on 16.6.2000)Kozo Murata (alternate director to Takuya Okada; ceased on 16.6.2000)

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D i r e c t o r s ’ R e p o r t f o r t h e y e a r e n d e d 2 8 F e b r u a r y 2 0 0 1

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The holdings and deemed holdings in the ordinary shares of the Company and of its related corporationsof those who were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of Ordinary Shares of RM1 eachBalance at Rights Balance at

1.3.2000 Acquired Issue Sold 28.2.2001Shareholdings in which Directorshave direct interest

Dato’ Abdullah bin Mohd. Yusof 1,080,000 - - (91,000) 989,000Akihito Tanaka 100,000 - 50,000 - 150,000Motoya Okada 50,000 - 25,000 - 75,000Masaaki Toyoshima 69,000 1,000 35,000 - 105,000Kamarudin bin Abu Hassan 10,000 - 15,000 - 25,000

Shareholdings in which Directorshave indirect interest

Dato’ Abdullah bin Mohd. Yusof 8,075,000 - 4,519,000 (26,000) 12,568,000Ramli bin Ibrahim 100,000 - 50,000 - 150,000

None of the other Directors holding office at 28 February 2001 had any interest in the ordinary shares ofthe Company during the financial year.

In accordance with Articles 80 of the Company’s Articles of Association, all Directors, except for MasaakiToyoshima being the Managing Director of the Company shall retire from the Board at the AnnualGeneral Meeting and are eligible for re-election. However, Tan Sri Datuk (Dr.) Kazumasa Suzuki hasindicated that he does not wish to seek re-election.

Directors’ benefitsSince the end of the previous financial year, no director of the Company has received or become entitledto receive any benefit (other than a benefit included in the aggregate amount of emoluments received ordue and receivable by Directors as shown in the financial statements) by reason of a contract made bythe Company or a related corporation with the Director or with a firm of which the Director is a member,or with a company in which the Director has a substantial financial interest except for certain Directorswho may be deemed to derive a benefit by virtue of those transactions, advisory services and tenancybetween the Company and its related companies with corporations in which the Directors are deemedto have interest.

There were no arrangements during and at the end of the financial year which had the object of enablingDirectors of the Company to acquire benefits by means of the acquisition of shares in or debentures ofthe Company or any other body corporate apart from the Rights Issue exercise completed during the year.

Issue of sharesDuring the financial year, the Company completed a Rights Issue of 29,250,000 new ordinary shares ofRM1.00 each at an issue price of RM2.75 each per ordinary share, on the basis of one new ordinary shareof RM1.00 each for every two existing ordinary shares of RM1.00 each held for cash for repayment ofbank borrowings and working capital purposes.

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Options granted over unissued shares and debenturesNo options were granted to any person to take up unissued shares or debentures of the Company duringthe year.

Significant events during the financial yearDuring the financial year, the Company:-

i) completed a Rights Issue of 29,250,000 new ordinary shares of RM1.00 each at an issue price ofRM2.75 each per ordinary share, on the basis of one new ordinary share of RM1.00 each for everytwo existing ordinary shares of RM1.00 each. The gross proceeds of RM80,437,500 has beenreceived in February 2001.

ii) opened a new store as one of the anchor tenants in IOI Mall, Bandar Puchong.iii) renovated and converted its Taman Maluri’s store into a shopping center.

Other statutory informationBefore the financial statements of the Company were made out, the Directors took reasonable steps toascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts; andii) 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, of the amount of the provision for doubtful

debts in the financial statements of the Company inadequate to any substantial extent; orii) that would render the value attributed to the current assets in the financial statements of the

Company misleading, oriii) which have arisen which render adherence to the existing method of valuation of assets or liabilities

of the Company misleading or inappropriate, oriv) not otherwise dealt with in this report or the financial statements, that would render any amount

stated in the financial statements of the Company misleading.At the date of this report, there does not exist:

i) any charge on the assets of the Company that has arisen since the end of the financial year andwhich 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.

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No contingent liability or other liability of the Company has become enforceable, or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinionof the Directors, will or may substantially affect the ability of the Company to meet its obligations as andwhen they fall due.

In the opinion of the Directors, the results of the operations of the Company for the financial year ended28 February 2001 have not been substantially affected by any item, transaction or event of a material andunusual nature nor has any such item, transaction or event occurred in the interval between the end ofthat financial year and the date of this report.

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

Masaaki ToyoshimaKuala Lumpur,Date: 27 April 2001

Note 2001 2000RM RM

Property, plant and equipment 2 517,817,995 447,453,752

Investments 3 175,209 175,209

Current assetsInventories 4 82,644,258 69,885,708Trade and other receivables 5 34,022,036 26,303,629Cash and cash equivalents 6 101,408,524 8,478,275

218,074,818 104,667,612

Current liabilities

Trade and other payables 7 236,833,799 159,834,704Borrowings (unsecured) 8 85,953,921 40,208,047Taxation 10,022,612 18,929,053Proposed dividend 12,636,000 8,424,000

345,446,332 227,395,804

Net current liabilities (127,371,514) (122,728,192)

390,621,690 324,900,769

Financed by:-

Capital and reservesShare capital 9 87,750,000 58,500,000Reserves 286,126,600 202,114,940

Shareholders’ funds 373,876,600 260,614,940

Long term and deferred liabilitiesDeferred taxation 10 6,610,000 4,026,000Borrowings (unsecured) 8 10,135,090 60,259,829

390,621,690 324,900,769

The notes set out on pages 33 to 47 form an integral part of, and should be read in conjunction with, these financial statements.

B a l a n c e S h e e ta t 2 8 F e b r u a r y 2 0 0 1

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Note 2001 2000RM RM

Revenue 990,005,989 804,214,215

Operating profit 11 76,244,315 59,060,651Financing costs 12 (7,297,094) (8,495,940)Interest income 443,056 822,958

Profit before tax and exceptional items 69,390,277 51,387,669Exceptional items 13 - 4,322,744

Profit before tax but after exceptional items 69,390,277 55,710,413Tax expense 14 (23,353,571) (17,500,000)

Net profit for the year 46,036,706 38,210,413

Basic earnings per ordinary share (sen) 15 68.1 57.5

Dividends per ordinary share - gross (RM) 0.20 0.20

The notes set out on pages 33 to 47 form an integral part of, and should be read in conjunction with, these financial statements.

I n c o m e S t a t e m e n tf o r t h e y e a r e n d e d 2 8 F e b r u a r y 2 0 0 1

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S t a t e m e n t o f C h a n g e s I n E q u i t yf o r t h e y e a r e n d e d 2 8 F e b r u a r y 2 0 0 1

Non-distributable Distributable

Share Share Revaluation Retainedcapital premium reserve profits Total

RM RM RM RM RM

At 1 March 1999 58,500,000 58,385,520 57,111,483 59,201,252 233,198,255

Prior year adjustment (Note 21) - - - (2,369,728) (2,369,728)

Restated balance 58,500,000 58,385,520 57,111,483 56,831,524 230,828,527

Net gain not recognisedin the income statement:Revaluation reserve realisedon sale of property - - (1,759,591) 1,759,591 -

Net profit for the year - - - 38,210,413 38,210,413

Dividends (Note 16) - - - (8,424,000) (8,424,000)

Restated at 29 February 2000/1 March 2000 58,500,000 58,385,520 55,351,892 88,377,528 260,614,940

Issue of share capital 29,250,000 51,187,500 - - 80,437,500

Rights Issue exerciseexpenses - (576,546) - - (576,546)

Net profit for the year - - - 46,036,706 46,036,706

Dividends (Note 16) - - - (12,636,000) (12,636,000)

At 28 February 2001 87,750,000 108,996,474 55,351,892 121,778,234 373,876,600

Note 9

The notes set out on pages 33 to 47 form an integral part of, and should be read in conjunction with, these financial statements.

2001 2000RM RM

Cash flows from operating activities

Profit before taxation 69,390,277 55,710,413

Adjustments for:Amount due from a subsidiary company written off - 8,010Construction project written off - 5,346,112Depreciation 26,635,354 22,761,265Gain on disposal of property, plant and equipment (104,029) (9,598,627)Interest expense 7,297,094 8,495,940Interest income (443,056) (822,958)Interest in a subsidiary company written off - 2Loss on foreign exchange - 47,408Property, plant and equipment written off 926,041 968,332

Operating profit before working capital changes 103,701,681 82,915,897

Changes in working capital:Inventories (12,758,550) (13,319,636)Trade and other receivables (1,085,445) (55,806)Trade and other payables 76,510,761 29,399,414

Cash generated from operations 168,539,337 98,939,869Income taxes paid (29,676,012) (21,690,415)

Net cash generated from operating activities 138,863,325 77,249,454

Cash flows from investing activities

Purchase of property, plant and equipment (106,840,992) (50,738,957)Proceeds from disposal of property, plant and equipment 215,531 28,999,387Interest received 443,056 822,958

Net cash used in investing activities (106,182,405) (20,916,612)

Cash flows from financing activities

Dividends paid (8,424,000) (11,700,000)Interest paid (6,808,760) (8,407,764)Repayment of term loans (39,859,947) (47,581,199)Proceeds from term loan 30,000,000 - Proceeds from Rights Issue net of Rights Issue expenses 79,860,954 -

Net cash used in financing activities 54,768,247 (67,688,963)

C a s h F l o w S t a t e m e n tf o r t h e y e a r e n d e d 2 8 F e b r u a r y 2 0 0 1

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The notes set out on pages 33 to 47 form an integral part of, and should be read in conjunction with, these financial statements.

2001 2000RM RM

Net increase/(decrease) in cash and cash equivalents 87,449,167 (11,356,121)

Cash and cash equivalents at beginning of year 8,130,176 19,486,297

Cash and cash equivalents at end of year 95,579,343 8,130,176

Cash and cash equivalents comprise:Cash and bank balances 5,527,370 5,478,275Deposits with licensed financial institutions 95,881,154 3,000,000Bank overdrafts (5,829,181) (348,099)

95,579,343 8,130,176

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1. Summary of significant accounting policies The following accounting policies are adopted by the Company and are consistent with those adoptedin previous years except as disclosed in Note 1 (f).

(a) Basis of accounting The financial statements are prepared under the historical cost convention as modified by therevaluation of certain land and buildings and in compliance with applicable approved accountingstandards in Malaysia.

(b) Property, plant and equipmentProperty, plant and equipment except for freehold land and capital work-in-progress are stated atcost/valuation less accumulated depreciation.

Certain leasehold land and buildings are stated at Directors’ valuation based on independentprofessional valuers’ reports.

Surpluses arising from revaluation are dealt with in the property revaluation reserve account. Anydeficit arising is offset against the revaluation reserve to the extent of a previous increase for thesame property. In all other cases, a decrease in carrying amount is charged to the incomestatement.

Property, plant and equipment retired from active use and held for disposal are stated at the lowerof net book value and net realisable value.

The carrying amounts of property, plant and equipment are reviewed at each balance sheet dateto determine whether there is any indication of impairment. If such an indication exists, the asset’srecoverable amount is estimated. An impairment loss is recognised whenever the carrying amountof an item of property, plant and equipment exceeds its recoverable amount. In determining therecoverable amount of property, plant and equipment, expected future cash flows have not beendiscounted to their present values. The impairment loss, if any, is charged to the income statementunless it reverses a previous revaluation in which case it will be charged to equity. Any subsequentincrease in recoverable amount is reduced by the amount that would have been recognised asdepreciation had the write-down or write-off not occurred. Such subsequent increase inrecoverable amount is recognized in the income statement unless it reverses an impairment losson a revalued asset, in which case it is taken to equity.

N o t e s t o t h e

F i n a n c i a l S t a t e m e n t s

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(c) DepreciationFreehold land and capital work-in-progress are not amortised.Long term leasehold land is amortised over a period of 93-99 years while buildings are depreciatedon a straight line basis over the shorter of 50 years or the lease period. The straight-line methodis used to write off the cost of the other assets over the term of their estimated useful lives at thefollowing principal annual rate:-

Buildings 2% - 5%Structures 5%Office equipment 10%Machinery and equipment 10% - 20%Furnitures, fixtures and fittings 20%Motor vehicles 20%IT equipment 20%

(d) InvestmentsLong term investments are stated at cost. A provision is made when the Directors are of the viewthat there is a permanent diminution in their value.

(e) InventoriesInventories are stated at the lower of cost and net realisable value with weighted average costbeing the main basis for cost. Cost comprises the weighted average cost of merchandise derivedat by using the Retail Inventory Method. Weighted average cost includes related charges incurredin purchasing such merchandise.

(f) Deferred expenditureDeferred expenditure primarily consists of administration and other general overhead expensesdirectly attributable to the start-up of stores or outlets and other expenses incurred prior to theopening of the stores. This is amortised in equal instalments over four years from the opening ofthe stores.

Following the adoption of MASB 1 “Presentation of Financial Statements” deferred expenditure ischarged to income statement as and when incurred. Hence, the deferred expenditure carriedforward from previous years is written off to income statement and treated as a change inaccounting policy as disclosed in Note 21.

(g) Affiliated companyAn affiliated company is a company that holds a long term equity interest of 20% to 50% in the Company.

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(h) Foreign currency transactionsTransactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling atthe date of the transactions. Monetary assets and liabilities denominated in foreign currencies atthe balance sheet date are translated to Ringgit Malaysia at the foreign exchange rates ruling at thatdate. Foreign exchange differences arising on translation are recognised in the income statement.Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historicalcost, are translated to Ringgit Malaysia at the foreign exchange rates ruling at the date of thetransactions.

The closing rates used in the translation of foreign currency monetary assets and liabilities are asfollows:

2001 2000RM RM

USD 1 3.80 3.80Japanese Yen 100 3.50 3.60

(i) TaxationThe tax expense in the income statement represents taxation at current tax rates based on profitearned during the year.Deferred taxation is provided on the liability method for all material timing differences except whereno liability is expected to arise in the foreseeable future and there are no indications the timingdifferences will reverse thereafter. Deferred tax benefits are only recognised where there is areasonable expectation of realisation in the near future.

(j) Cash and cash equivalentsCash and cash equivalents consist of cash on hand, balances with banks and highly liquidinvestments which have an insignificant risk of changes in value. For the purpose of the cash flowstatement, cash and cash equivalents are presented net of bank overdrafts.

(k) RevenueGoods sold and services renderedRevenue from the sale of goods represents gross trading sales, including concessionaires lessreturns and discounts and is recognized in the income statement when the significant risks andrewards of ownership have been transferred to the buyer.Property management services from shopping centre operation which include rental income, servicecharge and sales commission earned is recognised on an accrual basis.

(l) Interest incomeInterest income is recognised in the income statement as it accrues, taking into account the effectiveyield on the asset.

(m) Expenses(i) Operating lease payments

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

(ii) Financing costsAll interest and other costs incurred in connection with borrowings are expensed as incurred.

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2. Property, plant and equipment

Balance at (Disposal/ Transfer Balance atCost/Valuation 1.3.2000 Addition write off) in/(out) 28.2.2001

RM RM RM RM RM

Freehold land at cost 20,419,262 - - - 20,419,262Leasehold land at valuation 60,761,004 - - - 60,761,004Buildings at valuation 126,435,875 - (432,462) - 126,003,413Leasehold land at cost 18,891,139 - - - 18,891,139Buildings at cost 154,639,812 22,311,542 (1,611,472) - 175,339,882Structures 22,441,824 24,690,475 (894,888) 27,358 46,264,769Office equipment 6,024,735 693,816 (2,011,745) - 4,706,806Machinery and equipment 53,164,304 5,711,647 (6,798,780) 30,248,917 82,326,088Furnitures, fixtures and

fittings 56,485,240 38,960,306 (2,967,770) 202,053 92,679,829Motor vehicles 3,076,117 460,461 (192,964) - 3,343,614IT equipment 7,914,619 174,486 (7,626,334) - 462,771Construction work-in-

progress 15,683,492 15,800,041 (432,462) (30,478,328) 572,743

545,937,423 108,802,774 (22,968,877) - 631,771,320

Balance at Charge for (Disposal/ Transfer Balance atAccumulated Depreciation 1.3.2000 the year write off) in/(out) 28.2.2001

RM RM RM RM RM

Leasehold land at valuation 3,658,452 613,686 - - 4,272,138Buildings at valuation 15,398,832 2,521,511 (12,253) - 17,908,090Leasehold land at cost 842,739 190,800 - - 1,033,539Buildings at cost 17,228,766 3,588,068 (906,446) - 19,910,388Structures 2,216,972 1,289,368 (20,971) - 3,485,369Office equipment 2,709,379 501,678 (994,010) - 2,217,047Machinery and equipment 15,455,408 5,665,856 (3,214,995) - 17,906,269Furnitures, fixtures and

fittings 36,556,988 10,738,287 (2,710,909) - 44,584,366Motor vehicles 1,950,835 551,566 (149,250) - 2,353,151IT equipment 2,465,300 974,534 (3,156,866) - 282,968

98,483,671 26,635,354 (11,165,700) - 113,953,325

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Net book value Depreciation2001 2000 2000RM RM RM

Freehold land at cost 20,419,262 20,419,262 - Leasehold land at valuation 56,488,866 57,102,552 620,269Buildings at valuation 108,095,323 111,037,043 2,528,716Leasehold land at cost 17,857,600 18,048,400 190,801Buildings at cost 155,429,494 137,411,046 3,516,785Structures 42,779,400 20,224,852 768,643Office equipment 2,489,759 3,315,356 537,198Machinery and equipment 64,419,819 37,708,896 3,985,571Furnitures, fixtures and fittings 48,095,463 19,928,252 8,843,158Motor vehicles 990,463 1,125,282 532,196IT equipment 179,803 5,449,319 1,237,928Construction work-in-progress 572,743 15,683,492 -

517,817,995 447,453,752 22,761,265

One of the buildings of the Company is situated on land belonging to a third party. The title deed of afreehold land on which one of the Company’s buildings is situated is still in the process of beingtransferred to the Company.

The leasehold land and buildings are stated at Directors’ valuation based on professional valuationcarried out by an independent firm of valuers in February 1995 using the open market value and on anexisting use basis. In accordance with the transitional provisions issued by Malaysian AccountingStandards Board (“MASB”) upon adoption of International Accounting Standard No. 16 (Revised),Property, Plant and Equipment, the valuation of these assets have not been updated, and they continueto be stated at their existing carrying amounts less accumulated depreciation. The deferred taxation inrespect of the revaluation of the leasehold land and building of approximately RM2.8million (2000-RM2.8million) has not been provided for as the leasehold land and building is held for long term use.

Had the leasehold land and buildings been carried at historical cost less accumulated depreciation, thecarrying amount of the revalued assets that would have been included in the financial statements at theend of the year is as follows:-

2001 2000RM RM

Long term leasehold land 10,121,155 10,202,029Buildings 99,373,248 102,102,962

109,494,403 112,304,991

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3. Investments2001 2000RM RM

Long term Unquoted shares:Golf membership 45,209 45,209Equity investment 130,000 130,000

175,209 175,209

4. Inventories2001 2000RM RM

Retail merchandise 61,042,398 53,601,298Foods and others 21,601,860 16,284,410

82,644,258 69,885,708

5. Trade and other receivables2001 2000RM RM

Trade receivables 7,421,277 9,485,206Less: Provision for doubtful debts (447,700) (464,134)

6,973,577 9,021,072

Other receivables and prepayments 15,833,127 6,620,976

Rental and utility deposits 11,215,332 10,661,581

34,022,036 26,303,629

....Included in trade receivables is an amount of RM533,398 (2000 - RM1,481,328) due from companies

....with common directors.

....Trade receivables amounting to RM76,677 (2000 - RM882,010) have been written off against the

....provision for doubtful debts during the year.

....Included in other receivables and prepayments is an amount of RM57,161 (2000 - RM181,241) due from

....companies with common directors.

6. Cash and cash equivalents2001 2000RM RM

Cash and bank balances 5,527,370 5,478,275Deposits with licensed financial institutions 95,881,154 3,000,000

101,408,524 8,478,275

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7. Trade and other payables2001 2000RM RM

Trade payables 164,673,660 105,494,464Other payables and accrued expenses 45,168,149 31,001,972Rental and utility deposits 26,715,927 23,076,041Affiliated company 276,063 262,227

236,833,799 159,834,704

The affiliated company is Jusco Co. Ltd., a company incorporated in Japan. The amount due to anaffiliated company is non-trade in nature, unsecured, interest free and has no fixed terms of repayment.

8. Borrowings (unsecured)2001 2000RM RM

Current:Term loans 80,124,740 39,859,948Bank overdrafts 5,829,181 348,099

85,953,921 40,208,047

Non-current:Term loans 10,135,090 60,259,829

Terms and debt repayment schedule

The bank overdrafts and term loans of the Company are subject to interest at 0.34% to 0.75% (2000- 0.34% to 0.75%) above the lender’s base lending rates.

The term loans are repayable over periods ranging from 1 to 2 years.Under 1 - 2

Total 1 year yearsRM RM RM

Unsecured term loans 90,259,830 80,124,740 10,135,090

Unsecured bank overdrafts 5,829,181 5,829,181 -

96,089,011 85,953,921 10,135,090

Term loans of RM60,259,830 (2000 - RM100,119,777) are denominated in United States Dollar,unsecured and are subject to interest ranging from 0.34% to 0.75% (2000 - 0.34% to 0.75%) abovethe prevailing Singapore interbank rates or cost of funds of the lender banks where applicable.

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9. Share capital2001 2000RM RM

Ordinary shares of RM1.00 each:Authorised 100,000,000 100,000,000

Issued and fully paidOpening balance 58,500,000 58,500,000Rights Issue during the year 29,250,000 -

Closing balance 87,750,000 58,500,000

During the financial year, the Company completed a Rights Issue of 29,250,000 new ordinary shares ofRM1.00 each at an issued price of RM2.75 each per ordinary share on the basis of one new ordinaryshare of RM1.00 each for every two existing ordinary shares of RM1.00 each.

Utilisation of proceeds from Rights Issue

At an issue price of RM2.75 for each share, the Company has raised gross proceeds amounting toRM80,437,500. The utilisation of proceeds as at 27 April 2001 is as follows:

Approved Utilised UnutilisedRM’000 RM’000 RM’000

Repayment of bank borrowings 51,500 18,659 32,841Working capital purposes 27,138 27,138 -Rights Issue exercise expenses 1,800 1,089 711

80,438 46,886 33,552

The unutilised balance of Rights Issue proceeds is currently being placed as deposits with licensedfinancial institution and it shall be utilised in the manner as approved by the Securities Commission.

10. Deferred taxation2001 2000RM RM

Opening balance 4,026,000 5,400,000Transfer to/(from) income statement 2,584,000 (1,374,000)

Closing balance 6,610,000 4,026,000

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11. Operating profit2001 2000RM RM

Revenue 990,005,989 804,214,215Other operating income 947,246 2,219,508Changes in inventories 12,758,550 13,319,636Net purchases (727,742,511) (590,340,240)Staff costs (68,636,992) (57,036,950)Depreciation (26,635,354) (22,761,265)Operating expenses (104,452,613) (90,554,253)Operating profit 76,244,315 59,060,651

Operating profit is arrived at after crediting:-

Bad debts recovered 39,757 8,860Gain on foreign exchange - realised 27,228 - Gain on disposal of property, plant and equipment 104,029 - Rental income on shopping center operation 69,425,662 50,102,295

and after chargingAmount due from a subsidiary company written off - 8,010Auditors’ remuneration 95,000 95,000Bad debts write off 184,375 13,948Depreciation 26,635,354 22,761,265Directors’ emoluments

- salaries 554,979 728,350- fees 660,000 780,000

Interest in a subsidiary company written off - 2Loss on disposal of property, plant and equipment - 70,229 Loss on foreign exchange - realised - 47,408Property, plant and equipment written off 926,041 968,332Provision for doubtful debts 100,000 240,000Rental- land 571,819 486,216- buildings 23,202,823 18,348,055- motor vehicles 2,570,588 2,481,266- equipment 410,000 543,616- fixtures and fittings 301,467 220,436- hostel 891,778 700,996Royalties payable to affiliated company 7,854,484 6,439,212

i) The estimated monetary value of other benefits not included in salaries and other emolumentsreceived by the directors of the Company is RM21,000 (2000 - RM21,000).

ii) The number of employees of the Company (including Directors) at the end of the financial year was4,365 (2000 - 3,608).

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12. Financing costs2001 2000RM RM

Interest payableTerm loans 7,292,907 8,473,098Bank overdrafts 4,187 22,842

7,297,094 8,495,940

13. Exceptional items2001 2000RM RM

Gain on disposal of a leasehold land andbuilding (net of Real Property Gains Tax) - 9,668,856

Project written off - (5,346,112)

- 4,322,744

14. Tax expense

2001 2000RM RM

Current tax expense 20,769,571 18,106,000Underprovision in prior year - 768,000Deferred taxation (Note 10) 2,584,000 (1,374,000)

23,353,571 17,500,000

The Company’s effective tax rate is higher than the statutory tax rate as certain expenses are notdeductible for tax purposes.

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15. Earnings per ordinary shareBasic earnings per share is calculated by dividing the net profit attributable to shareholders by theweighted average number of ordinary shares outstanding during the year.

2001 2000RM RM

Net profit attributable to ordinary shareholders 46,036,706 38,210,413

Weighted average number of ordinary shares outstanding 67,595,724 66,488,987

The weighted average number of ordinary share outstanding adjusted for the Rights Issue as if theevent had occurred in the beginning of the prior year is as follows:-

2001 2000RM RM

Issued ordinary shares at beginning of year 58,500,000 58,500,000Adjustment for:- effect of Rights Issue 9,095,724 7,988,987

Weighted average number of ordinary shares 67,595,724 66,488,987

Comparative earnings per share information has also been restated to take into account the effecton net profit attributable to ordinary shareholders arising from the change in accounting policy indeferred expenditure (Note 21).

16. Dividends2001 2000RM RM

Proposed first and final dividend of 20% less 28% tax (2000 - 20% less 28% tax) 12,636,000 8,424,000

17. Distributable reservesSubject to the agreement of the Inland Revenue Board, the Company has sufficient Section 108 taxcredit and tax exempt income to frank all its retained profits at 28 February 2001 if paid out asdividends.

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18. Segmental reporting

There is no segmental analysis by geographical location as the Company’s operations areprincipally located in Malaysia. The business segment analysis is as follows:-

Profitbefore Gross assets

Analysis by activity: Revenue taxation employedRM RM RM

2001

Retailing 909,775,049 47,763,976 454,374,669Property management services 80,230,940 21,626,301 281,693,353

990,005,989 69,390,277 736,068,022

2000

Retailing 732,778,906 36,001,926 261,471,400Property management services 71,435,309 15,385,743 290,825,177Others - 4,322,744 -

804,214,215 55,710,413 552,296,577

Others relate to the exceptional items as disclosed in Note 13 to the financial statements.

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19. Commitments2001 2000RM RM

Capital commitments: Property, plant and equipmentAuthorised and contracted for 7,931,084 47,677,330Authorised but not contracted for 6,136,170 19,353,255

14,067,254 67,030,585

Lease commitments:Expiring within one year 22,977,738 21,522,402Expiring between one and five years 98,186,194 97,325,586Expiring after five years 263,014,896 288,521,697

384,178,828 407,369,685

Other than the above, the Company also leases 2 level of stores space in IOI Mall, Bandar Puchongunder operating lease. The lease is for an initial period of twelve years, with an option to renew thelease for another twelve years. The company also has the option to terminate the lease after thethird year in the event certain conditions stipulated in the lease agreement is not fulfilled. Thecontingent rental is determined based on 3% of the gross monthly sales of preceding month.

20. Related parties

Identity of related parties

The Company has a related party relationship with its directors and affiliated company.

Transaction with directors

Significant transactions and balances with companies in which certain directors have interest are asfollows:

2001 2000RM RM

Balances

With companies in which a director has interest :-Amount due from / (to) in respect of :-- Rental income receivable 68,000 90,253

Director related companiesAmount due from / (to) in respect of :-- Management fees receivable 7,176 25,728

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2001 2000RM RM

TransactionsWith companies in which a director has interest:-

-Rental income receivable (840,400) (934,200)

Director related companies - Management fee receivable (144,444) (159,408)- Rental income receivable (317,700) (317,700)- Sales through easy payment scheme (5,297,627) (6,693,686)

With a firm which a director is a partner- Professional fees paid - 51,177

The above transactions have been entered into in the normal course of business and have beenestablished under negotiated terms.

Other related party transactions

Significant related party transactions other than those disclosed elsewhere in the financialstatements are as follows:

Transactions

2001 2000RM RM

Affiliated company-Royalties expenses 7,854,484 6,439,212

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

21. Prior year adjustment

The prior year adjustment is in respect of a change in accounting policy on deferred expenditure.Following the adoption of MASB 1 “Presentation of Financial Statements” deferred expenditure ischarged to income statement as and when incurred. Hence, the deferred expenditure carried forwardfrom previous years is written off to income statement.

The amounts for the previous financial year have been restated accordingly. This change inaccounting policy has resulted in a cumulative adjustment to reserves of RM2,369,728 and adecrease in profit after taxation and exceptional items of RM337,820 for the financial year ended 29February 2000.

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22. Significant events during the financial year

During the financial year, the Company:-

i) completed a Rights Issue of 29,250,000 new ordinary shares of RM1.00 each at an issue price ofRM2.75 each per ordinary share, on the basis of one new ordinary share of RM1.00 each of forevery two existing ordinary shares of RM1.00 each. The gross proceed of RM80,437,500 hasbeen received on February 2001.

ii) opened a new store as one of the anchor tenants in IOI Mall, Bandar Puchong.

iii) renovated and converted its Taman Maluri’s store into a shopping center.

23. Comparative figures

i) The following comparatives have been restated to reflect the prior year adjustment as explainedin Note 21.

As As previouslyrestated stated

RM RM

Income statementProfit before taxation but after exceptional items 55,710,413 56,048,233Taxation (17,500,000) (17,500,000)

Profit after taxation and exceptional items 38,210,413 38,548,233Retained profit brought forward 56,831,524 59,201,252

Profit available for appropriation 95,041,937 97,749,485

Balance sheetDeferred expenditure - 2,707,548

Cash flow statementProfit before taxation 55,710,413 56,048,233Deferred expenditure written off - 127,332Deferred expenditure amortised - 1,318,096Deferred expenditure incurred - (1,783,248)

Segmental reportingProfit before taxation - retailing 36,001,926 36,339,746Gross assets employed - retailing 261,471,400 263,463,966Gross assets employed - property management services 290,825,177 291,540,155

ii) Following the adoption of MASB Standards in the preparation of this set of financial statements,the presentation and classification of certain items in the financial statements have beenamended. Accordingly, comparative amounts for those items have been reclassified and / orexpanded to ensure comparability with the current financial year.

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In the opinion of the Directors, the financial statements set out on pages 28 to 47, are drawn up inaccordance with applicable approved accounting standards in Malaysia so as to give a true and fair viewof the state of affairs of the Company at 28 February 2001 and of the results and cash flows of theCompany for the year ended on that date.

Signed in accordance with a resolution of the Directors:

Dato’ Abdullah bin Mohd. Yusof

Masaaki ToyoshimaKuala Lumpur,Date: 27 April 2001

S t a t e m e n t b y D i r e c t o r sp u r s u a n t t o S e c t i o n 1 6 9 ( 1 5 ) o f t h e C o m p a n i e s A c t , 1 9 6 5

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D e c l a r a t i o np u r s u a n t t o S e c t i o n 1 6 9 ( 1 6 ) o f t h e C o m p a n i e s A c t , 1 9 6 5

I, Masaaki Toyoshima, the Director primarily responsible for the financial management of Jaya JuscoStores Bhd., do solemnly and sincerely declare that the financial statements set out on pages 28 to 47are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiouslybelieving the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur on 27 April 2001.

Masaaki Toyoshima

Before me:

We have audited the financial statements set out on pages 28 to 47. The preparation of the financial

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statements is the responsibility of the Company’s Directors. Our responsibility is to express an opinionon the financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Thesestandards require that we plan and perform the audit to obtain all the information and explanationswhich we consider necessary to provide us with evidence to give reasonable assurance that the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencerelevant to the amounts and disclosures in the financial statements. An audit also includes anassessment of the accounting principles used and significant estimates made by the Directors as well asevaluating the overall adequacy of the presentation of information in the financial statements. Webelieve 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 CompaniesAct, 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 2001 and its results and cash flows for the yearended on that date; and

ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financialstatements of the Company;

and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept bythe Company have been properly kept in accordance with the provisions of the said Act.

KPMG Desa Megat & Co.Firm Number: AF 0759Public Accountants

Dato’ Mohammad Aidid bin Mohd. ShariffPartnerApproval Number: 930/6/02(J/PH)

Kuala Lumpur,Date: 27 April 2001

R e p o r t o f t h e A u d i t o r s t o t h e m e m b e r s o f J A Y A J U S C O S t o r e s B h d .

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Land/ Approx. Tenure Net bookBuilt-up age of (Year of value as

Description/ area building expiry for at 28/2/2001Location Existing use (sq ft) (years) leasehold) (RM)

Lot 7041, Leasehold 436,036/ 99 years 65,640,194Mukim of Bukit Baru, commercial land/ expiring onDistrict of Existing two-storey 200,316 9 19.12.2089Melaka Tengah, shopping complexMelaka. Extension/Renovation 179,986 21/2

Lot 23551, Leasehold 368,516/ 8 95 years 98,943,995Mukim of Setapak, commercial land/ 666,694 expiring on District and State of Two-storey 28.03.2085Wilayah Persekutuan. shopping complex

and two-storeycar park

Lot PT 21441, Leasehold 643,753/ 5 99 years 75,570,409Mukim of Kapar, commercial land/ 643,021 expiring onDistrict of Klang, Two-storey shopping 09.05.2093Selangor. complex and

one-storey car park

Lot 51105, Freehold land/ 609,840/ 4 Freehold 89,821,851Mukim of Ulu Kinta, Two-storey shopping 794,806District of Kinta, complex and twoPerak storey car park

P a r t i c u l a r s o f P r o p e r t i e sD e t a i l s o f t h e J A Y A J U S C O S T O R E ’ s p r o p e r t i e s a s a t 2 8 F e b r u a r y 2 0 0 1a r e s e t o u t b e l o w :

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J A Y A J U S C O D i r e c t o r y

STORES

JAYA JUSCO Taman MaluriJalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur.

JAYA JUSCO Bandar UtamaNo. 1, Lebuh Bandar Utama, Bandar Utama, 47800 Petaling Jaya,

Selangor Darul Ehsan.

JAYA JUSCO MelakaMukim Bukit Baru, Daerah Melaka Tengah, 75450 Melaka.

JAYA JUSCO Bandar Baru KlangPersiaran Bukit Raja 2, Bandar Baru Klang, 41150 Klang,

Selangor Darul Ehsan.

JAYA JUSCO Wangsa MajuJalan R1, Seksyen 1, Bandar Baru Wangsa Maju,

53300 Kuala Lumpur.

JAYA JUSCO IpohNo.2, Jalan Teh Lean Swee, Off Jalan Sultan Azlan Shah Utara,

31400 Ipoh, Perak Darul Ridzuan.

JAYA JUSCO Mid Valley1st Floor, Jaya Jusco Mid Valley, AT3 Mid Valley Megamall, Mid

Valley City, 58000 Kuala Lumpur

JAYA JUSCO Bandar PuchongBatu 9, Jalan Puchong, Bandar Puchong Jaya, 47100 Puchong,

Selangor Darul Ehsan.

SHOPPING CENTERS (ADDRESSES AS ABOVE)

JAYA JUSCO TAMAN MALURI SHOPPING CENTERTaman Maluri

1-UTAMA SHOPPING CENTERBandar Utama

JAYA JUSCO MELAKA SHOPPING CENTERMelaka

BUKIT RAJA SHOPPING CENTERBandar Baru Klang

ALPHA ANGLE SHOPPING CENTERWangsa Maju

KINTA CITY SHOPPING CENTERIpoh

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At the official re-opening of JAYA JUSCO Taman Maluri on 1 December 2000.From left to right: Dato’ Abdullah bin Mohd Yusof, Chairman of JAYA JUSCO, YB Tan Sri Dato’ HajiMuhyiddin bin Hj. Mohd. Yassin, Minister of Domestic Trade and Consumer Affairs, Mr MasaakiToyoshima, Managing Director of JAYA JUSCO.

Officiating at the JAYA JUSCO Bandar Puchong Official Opening on 22 December 2000.From left to right: Mr Masaaki Toyoshima, Managing Director of JAYA JUSCO, Mr Masafumi Kuroki,Minister and Deputy Chief of Mission, Embassy of Japan, Dato’ Abdullah bin Mohd Yusof, Chairmanof JAYA JUSCO, Hello Kitty and YBhg Dato’ Dr. Lee Lam Thye, YBhg Tan Sri Dato’ Lee Shin Cheng,Executive Chairman of IOI Corporation Berhad, Mr Lee Yeow Chor, Executive Director of IOICorporation Berhad.

At the launch gambit for the With All Our Hearts 36-hour non-stop shopping for charity event on 31 December 2000. From left to right, Mr. Masaaki Toyoshima, Managing Director of JAYA JUSCO,YBhg Datuk Paduka (Dr.) Saleha bt. Mohd. Ali and Dato’ Abdullah bin Mohd Yusof, Chairman ofJAYA JUSCO.

H i g h l i g h t s o f t h e Y e a r

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1984 JAYA JUSCO STORES SDN. BHD. established, in response to a request from Prime Minister Y.A.B. Dato’ Seri Dr Mahathir bin Mohamad, to help modernise the retailing industry in Malaysia.

1985 JUNEThe first pilot store, JAYA JUSCO Dayabumi, opened.

DECEMBER The second pilot store, JAYA JUSCO Taman Tun, opened.

1989 JUNEJAYA JUSCO Dayabumi closed.

OCTOBER The first Superstore, JAYA JUSCO Taman Maluri, opened.

1990 JUNE“Management Trainee Programme” in Japan begun.

NOVEMBER28 Malaysian students invited to Japan as “Ambassadors” through the AEON “1% Club” Programme.

1991 OCTOBER JAYA JUSCO Melaka was opened and fully operated by Malaysian staff only. The AEON Group’s “Hometown Forest” programme was launched simultaneously at the inauguration of JAYA JUSCO Melaka.

1992 APRILJAYA JUSCO Wangsa Maju (Alpha Angle Shopping Center) our first Shopping Center, opened.

1994 AUGUSTOur Distribution Center begun operations.

OCTOBER Japanese Trainer Programme begun.

1995 JUNEJAYA JUSCO Taman Tun closed.

AUGUSTJAYA JUSCO Bandar Utama (1-Utama Shopping Center) opened.

OCTOBER JAYA JUSCO Bandar Baru Klang (Bukit Raja Shopping Center) opened.

1996 DECEMBERJAYA JUSCO STORES BHD was listed on the main board of the KLSE.

1997 AUGUSTJAYA JUSCO Ipoh (Kinta City Shopping Center) opened.

1998 DECEMBERJAYA JUSCO Melaka Shopping Center opened.

1999 DECEMBERJAYA JUSCO Mid Valley opened.

2000 DECEMBERJAYA JUSCO Taman Maluri Shopping Center re-opened.JAYA JUSCO Bandar Puchong opened.

M i l e s t o n e s

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Authorised Share Capital : RM100,000,000

Paid-up Share Capital : RM87,750,000

Class of Shares : Ordinary Share of RM1 each

Voting Rights : 1 vote per Ordinary Share

Size of No. of % of No. of % of Shareholdings Shareholders/ Shareholders/ Shares Held Issued Capital

Depositors Depositors

1 - 499 29 2.2308 792 0.0009

500 - 5,000 1008 77.5385 1,916,708 2.1843

5,001 - 10,000 83 6.3846 610,000 0.6952

10,001 - 100,000 124 9.5385 4,032,000 4.5949

100,001 - 1,000,000 47 3.6154 15,237,000 17.3641

Above 1,000,000 9 0.6923 65,953,500 75.1607

Total 1,300 100.0000 87,750,000 100.0000

Substantial shareholders as at 23rd April, 2001No. Name No. of shares % of shares

held

1. Jusco Co., Ltd 38,425,500 43.7897

2. Dato’ Abdullah bin Mohd Yusof *13,557,000 15.4496

3. Pelita Dekad Sdn Bhd 10,794,000 12.3008

4. Yayasan Pelaburan Bumiputra **5,998,500 6.8359

5. Permodalan Nasional Berhad 5,998,500 6.8359

6. Sulington Limited 2,320,000 2.6439

7. Status Resources Sdn Bhd 1,774,000 2.0216

* Includes deemed interest in the shares held by virtue of Section 6A(4)(c) of the Companies Act, 1965.

** Deemed interest in the shares held by virtue of Section 6A(4)(b) of the Companies Act, 1965.

A n a l y s i s o f S h a r e h o l d i n g sA n a l y s i s o f s h a r e h o l d i n g s a s a t 2 3 r d A p r i l , 2 0 0 1

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No. Name No. of shares % of sharesheld

1. Jusco Co., Ltd 38,425,500 43.7897

2. Pelita Dekad Sdn Bhd 10,794,000 12.3008

3. Permodalan Nasional Berhad 5,998,500 6.8359

4. Picarda Holdings Sdn Bhd 2,491,500 2.8393

5. Sulington Limited 2,320,000 2.6439

6. BOC Nominees (Tempatan) Sdn Bhd 1,774,000 2.0216Pledged Securities Account For Status Resources Sdn Bhd

7. Syarikat Maluri Sdn Bhd 1,772,500 2.0199

8. Cartaban Nominees (Asing) Sdn Bhd 1,275,000 1.4530Bermuda Trust (Singapore) Limited forArisaig Asian Small Companies Fund Ltd.

9. MCIS Insurance Berhad 1,102,500 1.2564

10. Chase Malaysia Nominees (Asing) Sdn Bhd 930,000 1.0598Genesis Malaysia Maju Fund Limited

11. BOC Nominees (Tempatan) Sdn Bhd 824,000 0.9390Pledged Securities Account for Abdullah bin Mohd Yusof

12. Amanah Raya Berhad 788,000 0.8980Arab-Malaysian First Fund

13. Rozilawati Binti Haji Basir 675,000 0.7692

14. Rozana Zeti Binti Basir 675,000 0.7692

15. Roshayati Binti Basir 675,000 0.7692

16. Southern Nominees (Tempatan) Sdn Bhd 653,000 0.7442Pledged Securities Account For Mountbright Holdings Sdn Bhd

17. Mayban Nominees (Tempatan) Sdn Bhd 638,500 0.7276Mayban Trustees Berhad For Phileo Equityextra Fund (990405)

18. John Hancock Life Insurance (Malaysia) Berhad 624,000 0.7111

19. Takuya Okada 600,000 0.6838

20. BHLB Trustee Berhad 536,000 0.6108TA Balanced Fund

Total 73,572,000 83.8427

L i s t o f 2 0 L a r g e s t S h a r e h o l d e r sT o p T w e n t y S h a r e h o l d e r s a s a t 2 3 r d A p r i l , 2 0 0 1

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NOTICE IS HEREBY GIVEN that the Sixteenth Annual General Meeting of JAYA JUSCO Stores Bhd willbe held at Level 2, Junior Ballroom 1, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday,19 June 2001 at 10.30 a.m. for the following purposes:-

A G E N D A

As Ordinary Business

Ordinary Resolution 1

Ordinary Resolution 2

Ordinary Resolution 3

Ordinary Resolution 4

Ordinary Resolution 5

Ordinary Resolution 6

Ordinary Resolution 7

Ordinary Resolution 8

Ordinary Resolution 9

Ordinary Resolution 10

Ordinary Resolution 11

Ordinary Resolution 12

Special Resolution

1. To receive and adopt the Audited Financial Statements for the year ended 28 February 2001 together with the Reports of the Directors and Auditors thereon.

2. To declare a first and final dividend of 20% per share less 28%income tax for the year ended 28 February 2001.

3. To approve the payment of Directors’ Fees.

4. To re-elect the following Directors retiring under Article 80 ofthe Company’s Articles of Association :-

i) Dato’ Abdullah bin Mohd Yusof

ii) Mr Motoya Okada

iii) Mr Akihito Tanaka

iv) Encik Ramli bin Ibrahim

v) Mr Yoichi Kimura

vi) Mr Toshiji Tokiwa

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

viii) Encik Kamarudin bin Abu Hassan

5. To re-appoint Messrs KPMG Desa Megat & Co. as Auditors of the Company and to authorise the Directors to fix their remuneration.

As Special Business

To consider and, if thought fit, to pass the following resolution:-

6. SPECIAL RESOLUTION

- PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

“THAT the existing Articles of Association of the Company be deleted inits entirety and that the new set of Articles of Association as set out inAppendix I attached with the Annual Report for year 2001 be and ishereby adopted in substitution for and to the exclusion of the existingArticles of Association of the Company.”

N o t i c e o f

A n n u a l G e n e r a l M e e t i n g

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NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Sixteenth AnnualGeneral Meeting, a first and final dividend of 20% per share less 28% income tax in respect of thefinancial year ended 28 February 2001 will be paid to shareholders on 23 July 2001. The entitlement datefor the said dividend shall be 5 July 2001.

A Depositor shall qualify for entitlement to the Dividend only in respect of:-

a) Shares transferred to the Depositor’s securities account before 12.30 p.m. on 5 July 2001 in respectof ordinary transfers;

b) Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to theRules of the Kuala Lumpur Stock Exchange.

BY ORDER OF THE BOARD

SAW BEE LEAN (MAICSA 0793472)

Secretary

Kuala LumpurDate: 28 May 2001

NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies toattend and vote in his stead. A proxy may but need not be a member of the Company and theprovisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting,provided that the provisions of Section 149(1)(c) of the Act are complied with.

3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless hespecifies the proportions of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company atTingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpurnot 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 itsCommon Seal or under the hand of its attorney.

6. Explanatory Note to Special Resolution under item 6 of the Agenda- Proposed Amendments to the Articles of AssociationThe Special Resolution proposed under item 6 of the Agenda, if passed, will render the Company’sArticles of Association to be consistent and compliant with the revamped KLSE ListingRequirements and any other regulatory requirements of the Companies Act, 1965 and Rules of theMalaysian Central Depository Sdn Bhd.

N o t i c e o f

D i v i d e n d P a y m e n t

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[Please indicate with an “X” in the spaces provided whether you wish your votes to be cast for or against the resolutions. Inthe absence of specific directions, your proxy will vote or abstain as he/she thinks fit.]

as my/our proxy to vote for me/us on my/our behalf at the Sixteenth Annual General Meeting of the Companyto be held at Level 2, Junior Ballroom 1, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 19 June 2001 at10.30 a.m and at any adjournment thereof.

My/our proxy is to vote as indicated below:

JAYA JUSCO STORES BHD ( Company No.: 126926-H ) Incorporated in Malaysia

PROXY FORM

.............................................................Signature:Shareholder or Common SealDated this ........................................... day of ........................................... 2001.

No. of Shares Held

I/We, ..................................................................................................................................................................................................

of ........................................................................................................................................................................................................

being a member/members of the abovenamed Company, hereby appoint......................................................................................

............................................................................................................................................................................................................

of ........................................................................................................................................................................................................

or failing him/her, ............................................................................................................................................................................

of ........................................................................................................................................................................................................

No. Ordinary Resolution For AgainstResolution 1. Adoption of Audited Financial Statements and Reports for the year ended 28 February 2001

Resolution 2. Declaration of a First and Final Dividend of 20% per share less 28% income tax

Resolution 3. Approval of Directors’ Fees

Resolution 4. Re-election of Dato’ Abdullah bin Mohd Yusof

Resolution 5. Re-election of Mr Motoya Okada

Resolution 6. Re-election of Mr Akihito Tanaka

Resolution 7. Re-election of Encik Ramli bin Ibrahim

Resolution 8. Re-election of Mr Yoichi Kimura

Resolution 9. Re-election of Mr Toshiji Tokiwa

Resolution 10. Re-election of Brig. Jen.(B) Dato’ Mohd Idris bin Saman

Resolution 11. Re-election of Encik Kamarudin bin Abu Hassan

Resolution 12. Re-appointment of KPMG Desa Megat & Co. as Auditors

Special ResolutionSpecial Resolution Proposed amendments to the Articles of Association

NOTE:1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the

Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting, provided that the provisions of Section 149(1)(c) of the Act are complied with.

3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Tingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju,53300 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.

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Place StampHere

The Company Secretary:JAYA JUSCO STORES BHD (Company No.: 126926-H)

Tingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar BaruWangsa Maju, 53300 Kuala Lumpur.

The JUSCO Philosophy - “Customer First”

Jusco’s corporate identity has a high-quality look and feel, corresponding

to the excellence we strive for in everything we do for our customers and

community.

The interwined “S” and “C” stands for the core ideals of our company:

At JAYA JUSCO STORES BHD we feel this identity symbolises

our ideals to our rising profile as we fulfill our corporate mission

throughout the world.

“S” representsStoresService

“C” representsCorporateCommunityCustomers

JAYA JUSCO STORES BHD (Company No.: 126926-H)

Tingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.