GROWING IN STRENGTH AND NUMBERS

This Annual Report cover refl ects AEON CO. (M) BHD.’s (AEON or the

Company) plans of expanding the corporation’s reach across Malaysia. The

main visual is a view of our MaxValu Supermarket at Desa ParkCity which

represents AEON’s plans to reinvent and constantly reach out to its customers.

This is complemented by various images which refl ect on the Company’s

continuing success; its trademark of quality products (Jusco Selection), obliging

customer services, and the tree planting ceremonies as part of its Corporate

Social Responsibility. These visuals summarise all the highlights associated

with the Company in moving towards its goal of becoming the No.1 Retailer

in Malaysia.

TABLE OF CONTENTS

• Grand Opening of AEON Bukit Tinggi Shopping Centre ................................................................ 4 • Grand Opening of JUSCO Bandar Sunway ............................................................................. 5 • Introducing Pasar Raya MaxValu ......................................................................................... 6 Pasar Raya MaxValu Kota Kemuning • Pasar Raya MaxValu Desa ParkCity . ..................................................................................... 7 Pasar Raya MaxValu Ampang • Renovations ............................................................................................................. 8 • Jusco Selection .......................................................................................................... 9 • AEON Bukit Tinggi Shopping Centre Tree Planting Ceremony . .......................................................... 10 • 20th Anniversary Tree Planting Progress . ................................................................................ 11 Replanting at AEON Woodland • Corporate Social Responsibility ........................................................................................ 12 • “With All Our Hearts” Malaysian JUSCO Foundation ...................................................................... 14 • Human Resource Management . ......................................................................................... 15 • An Introduction to ÆON .. ............................................................................................. 16 • Corporate Information and Directory . .................................................................................... 17 • Share Price . ............................................................................................................. 18

Revenue Profi t Attributable to Shareholders • Five Years Financial Highlights . ........................................................................................ 19 • Board of Directors . ...................................................................................................... 20 • Directors’ Profi les . ...................................................................................................... 21 • Senior Management . ................................................................................................... 23 • Chairman’s Statement . .................................................................................................. 24 • Review of Operations . .................................................................................................. 27

CORPORATE GOVERNANCE • Statement on Corporate Governance . .................................................................................. 34 • Terms of Reference of the Audit Committee . ............................................................................. 38 • The Audit Committee .................................................................................................... 40 • Statement on Internal Control ............................................................................................ 41 • Other Information . ....................................................................................................... 42

FINANCIAL STATEMENTS • Directors’ Report . ....................................................................................................... 44 • Balance Sheet . ......................................................................................................... 48 • Income Statement . ...................................................................................................... 49 • Statement of Changes in Equity . ........................................................................................ 50 • Cash Flow Statement . .................................................................................................. 51 • Notes to the Financial Statements ....................................................................................... 52 • Statement by Directors . .................................................................................................. 72 Statutory Declaration

• Reports of the Auditors . ................................................................................................. 73

OTHERS • Analysis of Shareholdings . ............................................................................................. 74 Substantial Shareholdings Directors’ Interests • List of 30 Largest Shareholders . ......................................................................................... 75 • Particulars of Properties . ................................................................................................ 77 • JUSCO Stores, Shopping Centres & MaxValu . .......................................................................... 78 • Milestones . ............................................................................................................. 80 • Notice of Annual General Meeting ..................................................................................... 82 • Notice of Dividend Payment . ............................................................................................ 84 Statement Accompanying Notice of Twenty-Third Annual General Meeting • Proxy Form . ............................................................................................................ 85

4 A n n u a l R e p o r t 2 0 0 7

GRAND OPENING OF AEON BUKIT TINGGI SHOPPING CENTRE

AEON Bukit Tinggi Shopping Centre opened for business on 24 November 2007. The grand opening of AEON’s 14th shopping centre and 18th JUSCO store was held on 31 January 2008 and was offi ciated by His Royal Highness Sultan Sharafuddin Idris Shah Alhaj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Alhaj, Sultan of Selangor. Exciting activities that took place during the event, much to the delight of enthusiastic shoppers, included product samplings, special offers, mascot appearances and cultural shows.

In conjunction with the celebration, the “With All Our Hearts” Malaysian JUSCO Foundation donated Ringgit Malaysia Five Thousand worth of books to each of the fi ve (5) selected schools – Sekolah Kebangsaan Kampung Pendama, Sekolah Kebangsaan Kampung Idaman, Sekolah Jenis Kebangsaan (Cina) Chuen Min, Sekolah Jenis Kebangsaan (Tamil) Ladang and Sekolah Menengah Kebangsaan Rantau Panjang.

With approximately 745,000 square feet of net lettable area, AEON Bukit Tinggi Shopping Centre is AEON’s largest shopping centre in Malaysia. The shopping centre houses 3 levels of exciting shopping space with over 5,000 car parking bays. At AEON Bukit Tinggi Shopping Centre, shoppers are able to experience all-in-one shopping which includes entertainment convenience. The shopping centre currently accommodates about 200 tenants, each offering a multitude of products, services, cuisines and conveniences for eager shoppers.

Attractions for both entertainment and dining include the Green Box Karaoke, a TGV 10-screen Cineplex and the two fl oors Restaurant Street that are fi lled with local and international cuisines. JUSCO Bukit Tinggi offers the best in shopping conveniences with fresh produce, high-quality merchandise, household goods, local and imported brands, including our high quality in-house brand, Jusco Selection and so much more!

The AEON Bukit Tinggi Shopping Centre truly embodies the ideal shopping experience with its unique blend of shopping, food and entertainment, all readily accessible under one roof. It also strives to understand and adapt to the ever-changing needs, wants and preferences of our valued customers.

A n n u a l R e p o r t 2 0 0 7 5

GRAND OPENING OF JUSCO BANDAR SUNWAY

JUSCO Bandar Sunway opened for business on 29 September 2007. The grand opening was offi ciated by Y.B. Dato’ Seri Rafi dah Aziz, the then Minister of International Trade and Industry of Malaysia on 8 January 2008. The momentous occasion also marked the offi cial opening for AEON’s 17th JUSCO store in Malaysia.

In conjunction with the celebrations, the “With All Our Hearts” Malaysian JUSCO Foundation donated Ringgit Malaysia Five Thousand worth of books to each of the fi ve (5) selected schools – Sekolah Kebangsaan Puchong Perdana, Sekolah Kebangsaan Bandar Sunway, Sekolah Jenis Kebangsaan (Tamil) Puchong, Sekolah Jenis Kebangsaan (Cina) Yuk Chai and Sekolah Kebangsaan Puchong Jaya.

Covering approximately 225,000 square feet, JUSCO Bandar Sunway is designed with the brands signature style in mind. It boasts an impressive contemporary interior design, bright lighting, wide walkways and exciting merchandise presentation. These essential elements create a unique shopping experience that is both convenient and enjoyable for Bandar Sunway shoppers.

With 4 fl oors packed with shopping and children entertainment, shoppers will have no qualms over product variety. The outlet provides a wide array of products, such as menswear, ladies apparel, childrenswear, household items, groceries and so much more. There is also a charming Candy Kid’s Playground section where kids can have fun and be creative.

JUSCO Bandar Sunway also offers a host of items and services which cater towards shoppers’ health and beauty concerns. There is the new organic food range, which offers shoppers healthy alternatives when they shop for groceries. The new concept AEON Wellness department carries a comprehensive range of health and beauty products. Items such as food supplements, health equipment and fragrances are readily available here.

The new JUSCO Bandar Sunway outlet truly embodies customers’ preference and need for quality, variety and depth in their shopping experience. Coupled with outstanding service and a strategic location, JUSCO Bandar Sunway is set to be the ideal shopping destination.

6 A n n u a l R e p o r t 2 0 0 7

PASAR RAYA MAXVALU KOTA KEMUNING

Rebranding with Pasar Raya MaxValuAEON recently announced the new MaxValu name, which is to be adapted for all D’HATI supermarkets. Originating from AEON Group Japan, the new name refl ects on AEON’s concept of providing ‘maximum value’ in terms of quality of goods, value-for-money prices, product freshness, assortment, and customer service to our customers.

A variety of high-quality yet affordable products and fresh daily necessities are not the only criterias that attracts customers. Our signature warm and friendly customer services will also ensure a good shopping experience, and keep them coming back for their daily needs.

And in order to provide convenience, all Pasar Raya MaxValu are strategically situated in densely populated neighbourhoods, hence the tagline “Your Neighbourhood Convenience Store”.

We strive to continually make our customers’ needs our top priority, and with each improvement we make upon our stores and services, we strive towards enhancing our customers’ shopping experience.

AEON CO. (M) BHD. opened its third supermarket outlet in Kota Kemuning, Shah Alam on 28 September 2007.

Strategically located within both a residential and commercial area, Pasar Raya MaxValu (formerly known as D’HATI) provides a convenient and rewarding shopping experience for the residents of the surrounding communities.

Customers have access to a wide range of merchandise that includes fresh produce, grocery items, household needs, our AEON Wellness food supplement’s health products & equipment and lots more.

Its constant commitment to deliver affordable and quality goods to shoppers makes Pasar Raya MaxValu (formerly known as D’HATI) Kota Kemuning a much needed asset to the neighbourhood.

INTRODUCING PASAR RAYA MAXVALU

Old New

A n n u a l R e p o r t 2 0 0 7 7

PASAR RAYA MAXVALU DESA PARKCITY

PASAR RAYA MAXVALU AMPANG

On 15 December 2007, the 5th Pasar Raya MaxValu offi cially opened in Ampang, Selangor. The outlet is strategically located in Taman Dato’ Ahmad Razali, providing both convenience and affordable prices merchandise to the surrounding communities and live up to our convenient neighborhood supermarket’ label.

The 4th Pasar Raya MaxValu offi cially opened on 8 December 2007 at Desa ParkCity. Located within the bustling residential area, Pasar Raya MaxValu Desa ParkCity intends to continue to live up to the expectations of providing convenient shopping to the surrounding neighbourhood communities. We intend to provide both superior service and merchandise and affi rms our status as “Your Neighbourhood Convenience Store”. We hope that our presence will benefi t both the neighbourhood and the residents of Seri Damansara and Kepong.

8 A n n u a l R e p o r t 2 0 0 7

RENOVATIONS

Renovation works at JUSCO Permas Jaya was completed in September 2007. The outlet now boasts a fresh and more contemporary image. Shoppers can benefi t from the wide aisles and bright lights specifi cally designed for shoppers’ convenience. With the extra shelf space, customers can also look forward to a more extensive variety of products.

The Pasar Raya MaxValu (formerly known as D’HATI) Pearl Point outlet underwent renovations in July 2007 to expand its selling area. By expanding the outlet, MaxValu (formerly known as D’HATI) Pearl Point is able to increase its product range. All MaxValu outlets are well stocked with various products including fresh produce, groceries and household items; all at reasonable prices.

JUSCO Permas Jaya

Pasar Raya MaxValu Pearl Point

A n n u a l R e p o r t 2 0 0 7 9

SWEETENED CREAMER

FRUIT CONCENTRATE

This is a basic ingredient of “Teh Tarik”, a popular Malaysian beverage. Jusco Selection Sweetened Creamer is the biggest contributor in the section.

WHEAT FLOUREnriched with vitamins and protein. An essential ingredient used for cooking and baking treats such as cookies, pound cake, crackers, pies and murtabak.

CHICKEN FRANKFURTER 340GMade of 100% skinless chicken meat and devoid of MSG. Comes in an attractive package and sells at a very affordable price.

TOMATO & CHILLI SAUCE

Our sauce is specially formulated for dipping and cooking purposes. We believe in using only the freshest chillies and tomatoes to enhance the taste. Contain no additives or preservatives. Tasty, versatile, and is now available in two types of packaging: conventional bottle and easy-squeeze bottle.

BUTTER COOKIES

A sweet tooth’s favourite – delectable cookies with a savoury, buttery fl avour that tastes as authentic as a traditional homemade recipe. Sealed within a reusable tin, these cookies contain neither eggs nor preservatives.

SUNFLOWER COOKING OIL 3KG

A healthier alternative as it contains high-levels of both vitamin E and essential fatty acids called polyunsaturated fats. Ideal for health conscious consumers.

READY MEAL RANGE

Features several items: Jusco Selection Premium Pizza was developed to appeal to local tastes. It’s available in 7 varieties of which 3 are vegetarian. Product is devoid of MSG and preservatives. Jusco Selection Premium Burger includes lamb, chicken and beef patties. Although domestically produced, its quality equals those from premium and international brands, and doesn’t contain MSG or preservatives. Jusco Selection Mexican Range has 4 enticing fl avours – Albondiquitas (Chicken Bites and Tomato Sauce), Hungarian (Chicken Goulasch Soup), Enchiladas (Minced Chicken and Tomato in Tortilla Wrap), and Chicken Patties in Mushroom Sauce. Perfect for those on the go. Jusco Selection Footlong Sausages are meaty and savoury, with no added MSG, colouring or preservatives.

For those who love their drinks, indulge in Jusco Selection Fruit Concentrates - the perfect drink for any occasion. Enjoy its natural, rich fl avors on a hot day or after a long day at work.

Our in-house brand, renowned for its superior quality and value, showcases a wide range of products from the Home, Food and Personal Care categories as well as new items that have been developed. With best-of-its kind availability and unique packaging, is our commitment to bringing our customers the very best in lifestyle products at competitive prices. We pride ourselves in using the best quality sourced from around the world to create the best products for our valued customers.

The following features top selling items.

SUPERIOR QUALITY AND VALUE

1 0 A n n u a l R e p o r t 2 0 0 7

On 27 October 2007, around 1000 volunteers consisting of AEON CO. (M) BHD.’s employees, students, guests and community members gathered at AEON Bukit Tinggi Shopping Centre in Klang to plant 5,085 seedlings. The State Secretary YB Dato’ Ramli Mahmud on behalf of the then Menteri Besar of Selangor YAB Datuk Seri Dr. Haji Mohammad Khir Bin Toyo were there to offi cially launched the event. Also present at the launch were the Chairman of AEON CO. (M) BHD., Dato’ Abdullah bin Mohd Yusof and the Managing Director, Mr. Nagahisa Oyama. Before the tree-planting session began, a short explanation on tree planting procedure was given by Vice-Chancellor of Universiti Putra Malaysia, Prof. Dr. Mustafa Kamal Mohd Shariff.

To date, AEON CO. (M) BHD. has successfully planted more than 331,030 trees at 14 of our shopping centres as well as at Paya Indah Wetlands in Dengkil, Selangor. AEON continues its efforts on environment conservation by always involving local members of the community.

AEON BUKIT TINGGI SHOPPING CENTRETREE PLANTING CEREMONY

A n n u a l R e p o r t 2 0 0 7 1 1

On 30 June 2007, the Company successfully organised a tree replanting event at AEON Woodland from 8am to 12pm.The objective of the event was to encourage the participants to do environmental conservation and conserve the earth for future generations.

775 trees were successfully planted in three different zones by staffs from AEON CO. (M) BHD., AEON Credit Service (M) Berhad and Jabatan Perlindungan Hidupan Liar Dan Taman Negara (Perhilitan). The Managing Director and senior management of AEON CO. (M) BHD., representatives from AEON Credit Service (M) Berhad and Principal Assistant Director of Paya Indah Wetlands, were present at the meaningful event.

20TH ANNIVERSARY TREE PLANTING PROGRESS: AEON WOODLAND AT PAYA INDAH WETLANDS

CONTINUES TO THRIVE

2004 2007On 15 September 2004, AEON CO. (M) BHD. held a special tree planting ceremony at the Paya Indah Wetlands in Dengkil, Selangor to commemorate AEON’s 20 years in Malaysia. The volunteers included AEON staff members, invited customers, business associates and 1000 volunteers from Japan.

This event was sponsored by the AEON Environment Foundation of Japan, which has sponsored the planting of over 5 million trees around the world.

Representatives of the Foundation have paid regular visits to the site, deemed as the Malaysia-Japan Friendship Forest, at AEON Woodland. It is now a beautiful tract of thriving greenery.

REPLANTING AT AEON WOODLAND

1 2 A n n u a l R e p o r t 2 0 0 7

CORPORATE SOCIAL RESPONSIBILITYAEON’s commitment to our communities is a vital part of the Company’s Social Responsibility Mission. It is the Company’s goal to promote healthy, peaceful, interactive activities with the communities in locations where its stores operate. The Company strives to be more socially aware of its responsibility to act as a responsible corporate citizen in all its ventures.

As a corporate citizen, AEON continually conducts activities which seek to provide opportunities that encourage environmental conservation, promotes educational opportunity as well as social responsibility and healthy living among the communities. These may take on various forms including philanthropic initiatives, in-kind donations and volunteerism. Activities organised during the year include the following:–

– AEON organised a “Mega Gotong-Royong” on 24 and 25 January 2007 to assist victims affected by the fl ash fl oods at Kg. Kangkar Tebrau, Johor Bahru. A total of 210 staffmembers from headquarters and outlets at Malacca, Taman Universiti, Permas Jaya and Tebrau City participated in this project. During the event, essential supplies such as clothes, blankets, towels, curtains, pots, pans and cooking utensils were donated by AEON employees from the country which was then presented by the General Manager of Corporate Affairs, Tuan Hj A Rashid Hj Adam to Raja Zarith Sofi a Sultan Idris, the Patron of the Johor State’s Malaysian Red Crescent.

– AEON contributed books and magazines towards the National Reading Campaign held on 9 February 2007. The Minister of Education, YB Dato’ Sri Hishammuddin Tun Hussein was present as the guest of honor.

– The Blood Donation Campaign held on 6 to 8 July 2007 managed to collect 2,799 blood bags. The event was launched by the then Serdang’s Member of Parliament, YB Dato’ Yap Pian Hon.

– To develop and maintain good relationship with the local community, AEON staff participated in cleaning, painting, repairing, planting trees and others at more then 63 locations (16 schools, 25 special homes, 9 recreational areas and 13 housing areas). AEON contributed more than RM 75,000 during this event both in-kind and cash.

A n n u a l R e p o r t 2 0 0 7 1 3

– AEON treated 1,600 children from several local orphanages to a special Ramadhan feast. To commemorate the event, each child received an exclusive gift. Esteemed guests included the Prime Minister of Malaysia Y.A.B. Dato’ Seri Abdullah Hj. Ahmad Badawi.

– AEON’s continues its support towards promoting local “Buatan Malaysia” products by organising a roadshow with government agencies in 2007 to market local SIME products. The roadshow involved 12 AEON Shopping Centres.

AEON CO. (M) BHD. also continues to provide assistance and contribute to the society in the form of donations, sponsorships and gifts through the “With All Our Hearts” Malaysian JUSCO Foundation.

– AEON also received several prestigious accoladesin 2007. The awards are:

• MHR Occupational Safety & Health Gold Award 2006• MDTCA “Kedai Pilihan Pengguna” 2007 Award for JUSCO outlets in Taman Maluri, Wangsa Maju, Mid Valley, Bukit Raja in Klang, Queensbay in Penang, Air Keroh in Melaka, Taman Universiti and Permas Jaya in Johor.

– Since 2005 the Company has started contributing to the Reduction of CO2 Emission to the Environment issue. Energy saving systems have been installed at some of our outlets to reduce electricity consumption and also the use of bio-degradedable plastic bags at all our outlets since 2004 are among others, AEON’s drive and commitment to make the environment a much more friendlier place for the future generations.

Energy Saving System

1 4 A n n u a l R e p o r t 2 0 0 7

“WITH ALL OUR HEARTS”MALAYSIAN JUSCO FOUNDATION

Glamour for a worthy cause at WAOH Charity Gala Dinner 2007 Dato’ Siti Nurhaliza was the star of the night during the WAOH Charity Gala Dinner 2007, held on 15 August at the Grand Ballroom of Sunway Lagoon Resort Hotel. The Charity Gala Dinner is held yearly to raise funds for the WAOH Malaysian JUSCO Foundation. The foundation strives to help needy Malaysian children and youth. This year’s funds will go towards building a second Rumah Tunas Harapan welfare home for underprivileged children. Dato’ Siti Nurhaliza, who is the foundation’s ambassador, enthralled worthy guests with renditions of her latest hit songs, while Phua Chu Kang and Moe Alkaff drew guffaws of laughter with their hilarious performances. More than 1,300 business associates and management staffs attended the function.

Ambulance Fundraising CampaignThe Malaysian JUSCO Foundation organised an ambulance fundraising campaign for the Malaysian Red Crescent (MRC) between 15 December 2007 and 15 March 2008.

Customers were encouraged to make their donations into specially designed coin boxes placed at all JUSCO Stores and AEON Shopping Centres.

In addition, Charity Bazaars were also held during the “fundraising carnival” to generate more funds for the campaign.

Launch of WAOH Mini Coin Box On 25 August 2007, Dato’ Siti Nurhaliza, Ambassador of the “With All Our Hearts” Malaysian JUSCO Foundation, attended the launch of the “WAOH Mini Coin Box” at AEON Taman Equine Shopping Centre. The coin box, which shoppers can purchase for RM1 each, was designed in support of the WAOH Charity Drive.

The songstress performed for shoppers and 40 children from Rumah Kebajikan Anbu Illam, Pertubuhan Rumah Amal Cahaya Tengku Ampuan Rahimah (RACTAR) and Rumah Charis. The children has the opportunity to get close and personal with Dato’ Siti Nurhaliza.

A n n u a l R e p o r t 2 0 0 7 1 5

Education – AEON People Is ‘Core Assets’AEON CO. (M) BHD. continues to invest in its employees. AEON believes that education is essential in cultivating the skills of its team members, thus providing opportunities in building and developing a career in the Company.

AEON And OUMOn 2 September 2007, AEON was given the “OUM – Industry 2007 Human Capital Development Award” by the Institute of Professional Development (IPD) at Open University Malaysia (OUM) for its dedication in developing human potentials.

AEON in collaboration with OUM provides academic qualifi cations to its staff and interested students in selected courses – Certifi cate in Retail Operations, Diploma in Management (Retailing) and Executive Diplomas in Business Management, Human Resources Management, Security Management and Retail Management.

The Company has since witnessed 366 AEON staff members graduating with excellent results, and another 132 is expected to graduate in 2008.

Japan Trainee ProgrammeThe Japan Trainee Programme is a yearly basis training programme that was designed to expose potential leaders to advanced retail environments in Japan. The programme has since generated a number of potential leaders from the Management Trainee/Retail Trainee programme to cope with the growth of the company.

The chosen candidates would undergo a 6-month long training stint in AEON Japan for the On Job Training that includes retail operations and management – people, sales area, backroom and inventory.

HUMAN RESOURCE MANAGEMENT

New Leaders Development ProgrammeThe New Leaders Development Programme was created in 2006 with an objective to cultivate potential leaders for the Company. Candidates will undergo a 10-month long training programme that focuses on the enhancement of leadership qualities as well as retail operation knowledge. Since commencement, many participants have been promoted to higher positions in the Company.

AEON Business SchoolThe AEON Business School was created in 2006 as part of AEON’s expansion plan. There are 5 specially designed courses for each target group:1) Store Manager Course2) Shopping Centre Manager Course3) Line Manager Course4) Merchandiser Course 5) Security CourseThe courses were designed to help raise the standards, skills and business insight of the AEON team in order to retain its competitive edge. This attributes towards the Company’s policy and commitment on placing customers fi rst and serving them better.

Human Resource Development Centre (HRDC) ProgrammeThe HRDC Programme is based at the JUSCO Taman Maluri store and was developed in 2006 for graduates. The 6-month long graduate trainee programme includes: 1) Theoretical & practical knowledge of retail operations and

management2) On and Off job training

The programme has successfully developed 60 Section Leaders, 2 Assistant Merchandisers and 6 Japan Trainees since its commencement. This number is expected to increase in 2008, with 3 batches of Management Trainees intakes.

With great support from the respective leaders, trainees were motivated to overcome challenges such as juggling between work and studies.

1 6 A n n u a l R e p o r t 2 0 0 7

AEON CO. (M) BHD. is a leading retailer in Malaysia with a total revenue of RM2.89 billion in the fi nancial year under review. The Company was incorporated on 15 September 1984. AEON CO. (M) BHD. was set up in response to the Malaysian Government’s invitation to ÆON Japan to help modernise the retailing industry in Malaysia. The ‘JUSCO’ name today is well established among Malaysians as well as foreigners, especially due to its association with the international ÆON group of companies. AEON has established itself as a leading chain of General Merchandise Stores. AEON’s constant interior refurbishment of stores to project an image designed to satisfy the ever changing needs and desires of consumers is clear evidence of this. The Company’s performance has been further enhanced by the management’s acute understanding of target market needs and the provision of an optimal product-mix. AEON’s stores are mostly situated in suburban residential areas, catering to Malaysia’s vast middle income group.

The ÆON group of companies consists of ÆON Co., Ltd., and more than 150 consolidated subsidiaries and affi liated companies. In addition to its core General Merchandise Stores (GMS) plus its supermarket and convenience store operations, ÆON is also active in specialty store operations and shopping centre development, operations, credit card business and services. The ÆON group of companies is an integrated Japanese retailer and is active not only in Japan but also throughout Southeast Asia, China and North America. At all times, in every market, ÆON’s activities are guided by its unchanging ‘Customer First’ philosophy. Its aim is to surpass expectations by combining excellent products with unique personal services that enhance the shopping experience to make customers smile every time they shop.

Our PrinciplesThe fundamental principle of ÆON is its “Customer Centred Approach”. AEON’s mission is and always will be to contribute to the customers.

ÆON’s most basic and abiding principles are the pursuit of peace, respect for humanity and contribution to local communitiesthrough customer-centred initiatives. Under these principles, we are determined to achieve global management standards while being the best serving retailer in the local community.

Peace: ÆON is a corporate group whose operations are dedicated to the pursuit of peace through prosperity.

People: ÆON is a corporate group that respects human dignity and values personal relationships.

Community: ÆON is a corporate group rooted in local community life and dedicated to make a continuing contribution to the community.

Our StrategyÆON follows two strategies for continuos growth: Organic Growth and Company Tie-ups. Its core business of shopping centre operations includes General Merchandise Stores and Supermarkets. ÆON builds complementary operations such as specialty stores and shopping centre development and services, and works to create synergies among these diverse businesses. ÆON also aspires to be one of the top retailers in the world in terms of both revenues and operating income by the end of fi scal 2011.

Our GoalÆON’s goal is to operate as an “international-scale retailing group”, recognised for excellence not only in Japan, but also in other nations. The international recognition we are working to achieve is not one which can be measured merely in quantifi able terms of size, growth and profi tability. We hope to be competitive at the global level in intangible aspects such as customer satisfaction and corporate citizenship. We are dedicated to the idea of “quality management” to further enhance our capabilities.

AN INTRODUCTION TO ÆONÆONPeace

CommunityPeople

ÆONÆON Basic Principles:

The Customer

A n n u a l R e p o r t 2 0 0 7 1 7

Board of Directors• Dato’ Abdullah bin Mohd Yusof (Chairman)• Mr. Tsutomu Kajita• Mr. Nagahisa Oyama• Datuk Ramli bin Ibrahim• Brig. Jen (B) Dato’ Mohamed Idris bin Saman• Datuk Zawawi bin Mahmuddin• Dato’ Chew Kong Seng• Mr. Naruhito Kuroda

Secretaries• Tai Yit Chan (MAICSA 7009143)• Wong Lai Kuan (MAICSA 7032123)

Registered Offi ce and Head Offi ce3rd Floor, JUSCO Taman Maluri Shopping Centre,Jalan Jejaka, Taman Maluri,Cheras, 55100 Kuala Lumpur.Tel: 03-9207 2005Fax: 03-9207 2006/2007

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

RegistrarsTenaga Koperat Sdn. Bhd. (118401-V)20th Floor, Plaza Permata,Jalan Kampar, Off Jalan Tun Razak,50400 Kuala Lumpur.Tel: 03-4047 3883Fax: 03-4042 6352

Date of Incorporation15 September 1984

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

Homepagehttp://www.jusco.com.my

Principal Bankers• Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad (302316-U)• Malayan Banking Berhad (3813-K)• CIMB Bank Berhad (13491-P) (formerly known as Bumiputra Commerce Bank Berhad)

Notice of AnnualGeneral Meeting

Annual General Meeting

Payment of Dividend

Quarterly ResultsAnnouncement

2 April 2007

24 April 2007

Book Closure - 4 May 2007

Payment - 24 May 2007

1st Quarter - 17 May 2007

2nd Quarter - 14 August 2007

3rd Quarter - 22 November 2007

4th Quarter- 21 February 2008

CORPORATE CALENDAR

CORPORATE INFORMATION AND DIRECTORY

1 8 A n n u a l R e p o r t 2 0 0 7

SHARE PRICEStock Code: 6599 Stock Name: AEON

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

7.40 8.70 8.60 9.50 10.30 10.30 9.60 10.30 10.50 10.60 10.30 10.90

7.00 7.30 7.90 8.30 9.25 9.40 9.10 9.10 9.80 9.50 9.60 10.00

3,859.6 1,671.7 1,116.0 383.5 1,528.5 627.5 1,781.2 1,857.1 778.1 1,212.1 844.7 441.0

2007

High (RM)

Low (RM)

Volume (‘000)

RM million

Financial Year

3,000

2,750

2,500

2,250

2,000

1,750

1,500

1,250

Feb’ 04 Feb’ 05 Feb’ 06 Dec’ 06 Dec’ 2007(10 months)

1,523.8

1,784.6

1,962.4 1,941.4

2,886.2

120

110

100

90

80

70

60

50

40

30

20

10

63.6 64.2

73.2

103.2 105.1

REVENUE

PROFIT ATTRIBUTABLE TO SHAREHOLDERS

Financial Year

RM million

Feb’ 04 Feb’ 05 Feb’ 06 Dec’ 06 Dec’ 2007(10 months)

A n n u a l R e p o r t 2 0 0 7 1 9

31/12/07 31/12/06 28/2/06 28/2/05 29/2/04 (10 months) RM’000 RM’000 RM’000 RM’000 RM’000INCOME STATEMENT

Revenue 2,886,220 1,941,431 1,962,445 1,784,564 1,523,781

Retailing 2,640,341 1,763,283 1,807,753 1,648,475 1,406,242

Property Management Services 245,879 178,148 154,692 136,089 117,539

Profi t before tax 159,006 140,741 112,198 99,010 96,288

Profi t after tax 105,176 103,246 73,204 64,247 63,588

Net dividend 29,098 20,498 18,954 15,163 12,636

BALANCE SHEET

Assets

Property, plant and equipment 1,069,027 942,252 845,248 628,950 575,673

Prepaid lease payment 126,365 127,269 126,008 127,385 117,177

Investments 1,075 1,075 1,075 175 175

Current assets 526,007 367,777 239,161 258,336 259,344

Total assets 1,722,474 1,438,373 1,211,492 1,014,846 952,369

Equity

Share capital 175,500 175,500 175,500 175,500 87,750

Revaluation reserve 32,700 33,217 33,648 34,165 34,682

Share Premium 20,609 20,609 20,609 20,609 108,488

Retained earnings 562,012 476,817 392,094 333,536 281,408

Total equity attributable to 790,821 706,143 621,851 563,810 512,328 shareholders of the company

Liabilities

Deferred tax liabilities 23,829 29,113 29,281 24,429 24,322

Current liabilities 907,824 703,117 560,360 426,607 415,719

Total equity and liabilities 1,722,474 1,438,373 1,211,492 1,014,846 952,369

STATISTICS

Net earnings per share (sen) 59.9 58.8 41.7 36.6 *36.2

Gross dividend per share (%) **21 16 15 12 20

Net assets per share (RM) 4.51 4.02 3.54 3.21 5.84

* Earnings per share has been calculated based on the number of ordinary shares of 175,500,000. Comparative earnings per share information has been restated after adjusting for the bonus issue undertaken by the Company.

** Gross dividend per share is inclusive of the 4% special tax exempt dividend.

FIVE YEARS FINANCIAL HIGHLIGHTS

2 0 A n n u a l R e p o r t 2 0 0 7

(Seated from left to right)

Mr. Tsutomu Kajita Non-Independent Non-ExecutiveVice Chairman

Dato’ Abdullah bin Mohd YusofNon-Independent Non-ExecutiveChairman

Mr. Nagahisa OyamaManaging Director

(Standing from left to right) Dato’ Chew Kong SengIndependent Non-Executive Director

Datuk Ramli bin IbrahimNon-Independent Non-Executive Director

Mr. Naruhito KurodaNon-Independent Non-Executive Director

Datuk Zawawi bin MahmuddinIndependent Non-Executive Director

Brig. Jen (B) Dato’ Mohamed Idris bin SamanIndependent Non-Executive Director

BOARD OF DIRECTORS

A n n u a l R e p o r t 2 0 0 7 2 1

Dato’ Abdullah bin Mohd Yusof was appointed the Chairman of AEON CO. (M) BHD. on 26 October 1984. He holds a Bachelor of Law (Honours) from University of Singapore, which he obtained in 1968. He has more than thirty fi ve (35) years of experience as an Advocate & Solicitor. He started his career with Skrine & Co., as a Legal Assistant in 1968 before starting his own partnership under the name of Tunku Zuhri Manan & Abdullah, Advocates & Solicitors in 1969 and subsequently renamed the law fi rm to Abdullah & Zainuddin, Advocates and Solicitors. He sits on the Board of Directors of MMC Corporation Berhad, Zelan Berhad, Tradewinds Corporation Berhad and AEON Credit Service (M) Berhad, all of which are companies listed on Bursa Malaysia Securities Berhad. He also sits on the Board of Directors of THR Hotel (Selangor) Bhd and several private limited companies. He is a member of the Remuneration & Nomination Committee of the Board. Dato’ Abdullah bin Mohd Yusof has attended all the seven (7) Board meetings held in the fi nancial year. He holds 268,000 ordinary shares directly in the Company and 786,900 ordinary shares indirectly in the Company.

DIRECTORS’ PROFILES

Dato’ Abdullah bin Mohd Yusof (69)(Malaysian) Non-Independent Non-Executive Chairman

Mr. Tsutomu Kajita was appointed Non-Executive Director of AEON CO. (M) BHD., on 16 May 2007 and appointed as Non-Executive Vice Chairman on 14 August 2007. He holds a MBA from Babson College, Massachusetts, USA. He joined Mitsubishi Corp, Japan as an Assistant Manager in the Exporting Power System Group in 1979 and in 1985 as Manager, Power System Development. In 1989 he joined Diamond Energy Inc. Los Angeles, USA, a subsidiary of Mitsubishi Corp., as Vice President and in 1993 he was transferred to be Assistant General Manager of Power & Traffi c Project Development. In 2000, he became Executive Vice President & Treasurer of Diamond Generation Corporation and joined Ripplewood Holdings, L.L.C., New York in 2002 as Senior Advisor. Mr. Tsutomu Kajita joined ÆON Co., Ltd., Japan as General Manager, Mergers & Acquisitions of International Operation Division in 2005 and is now the Senior Vice President, International Operations of ÆON Co., Ltd., Japan. He is the Chairman & Representative Director of Warner Mycal Corporation, President of AEON (USA), Inc. and sits on the Board of 9 ÆON Companies worldwide. Mr. Tsutomu Kajita is also the Chairman of the Nomination and Remuneration Committees of the Board. Mr. Tsutomu Kajita has attended two (2) out of four (4) Board meetings held during his term of offi ce in the fi nancial year. He does not hold any shares in the Company.

Mr. Nagahisa Oyama was appointed the Managing Director of AEON CO. (M) BHD. on 22 June 2005. He holds a Bachelor's Degree in Business Management from Kinki University, Japan, which he obtained in 1977. He joined ÆON Co., Ltd. in 1977 as a Management Trainee and was promoted to be Softline Merchandiser in 1980. He was seconded to Siam JUSCO, Thailand to set up the GMS Merchandising Division. Following his appointment at Siam JUSCO, Thailand, from 1989 to 1991, he was promoted to General Manager of Tonami Regional Shopping Centre in 1991. Mr. Oyama was next appointed as the General Manager of Kaga Regional Shopping Centre in 1996. He served as General Manager of Kochi Regional Shopping Centre from 2000 to 2002. In 2002, he was promoted to Regional General Manager of Higashi Mikawa and Shizuoka Prefecture, Japan, where he was in charge of the overall planning, opening and operations of three (3) new Regional Shopping Centres and the operations of seven (7) existing Regional Shopping Centres in the Shizuoka Prefecture. Mr. Nagahisa Oyama has attended all the seven (7) Board meetings held in the fi nancial year. He does not hold any shares in the Company.

Mr. Tsutomu Kajita (54)(Japanese) Non-Independent Non-Executive Vice Chairman

Mr. Nagahisa Oyama (53)(Japanese) Managing Director

Datuk Ramli bin Ibrahim was appointed Non-Executive Director of AEON CO. (M) BHD. on 20 August 1996. He is a member of the Malaysian Institute of Accountants and a Fellow of the Australian Institute of Chartered Accountants. He was attached to KPMG Peat Marwick (now known as KPMG) in Australia, United Kingdom and Malaysia from 1959 to 1995. He was appointed a Partner of KPMG Malaysia in 1971. In 1989, he was made the fi rst bumiputera Senior Partner of KPMG Malaysia. He also served on the Boards of KPMG International and KPMG Asia Pacifi c from 1990 to 1995. He retired from KPMG Malaysia in 1995. From December 1995 to December 2000, he served as the Executive Chairman of Kuala Lumpur Options & Financial Futures Exchange Berhad. Currently, he sits on the Board of Directors of Ranhill Berhad, Measat Global Berhad, BCT Technology Berhad, AEON Credit Service (M) Berhad and several other unlisted public and private limited companies including HSBC Bank Malaysia Berhad and Yayasan Tuanku Syed Sirajuddin. He is also a member of the Audit and Remuneration Committees of the Board. Datuk Ramli bin Ibrahim has attended six (6) out of seven (7) Board meetings held in the fi nancial year. He holds 280,000 ordinary shares indirectly in the Company.

Datuk Ramli bin Ibrahim (67)(Malaysian) Non-Independent Non-Executive Director

Note: Save as disclosed in this annual report, all the Directors mentioned on page 21 to 22 have no confl icts of interest with AEON CO. (M) BHD. or any family relationship with any Director and/or substantial shareholder nor have they any convictions for offences within the past 10 years, except for traffi c summons, if any.

2 2 A n n u a l R e p o r t 2 0 0 7

DIRECTORS’ PROFILES

Datuk Zawawi bin Mahmuddin was appointed Non-Executive Director of AEON CO. (M) BHD. on 23 July 2001. He holds a Bachelor of Arts (Honours) Degree from the University of Malaya, which he obtained in 1968. Datuk Zawawi joined the Administrative and Diplomatic Service and began his career as an Administrative Offi cer in the Ministry of Transport in 1968. From 1970 to 1975 he served as private secretary to the Deputy Prime Minister and thereafter held various positions in the Cabinet Secretariat of the Prime Minister’s Department from 1975 to 1990. His subsequent appointments were as follow:- Federal Secretary in Sarawak (1990 – 1992), Deputy Secretary General 1, Ministry of Home Affairs (1992 – 1994), Secretary General, Ministry of Information (1994 – 2000). Datuk Zawawi was formerly on the Board of Syarikat Explosive Malaysia Sdn. Bhd. (SME), National Film Development Corporation (FINAS), Governing Council, Bernama and Sukom Ninety Eight Bhd. Besides being Chairman of Northport Distripark Sdn. Bhd., he also sits on the Board of a few private limited companies. He is also a member of the Nomination Committee of the Board. Datuk Zawawi bin Mahmuddin has attended all the seven (7) Board meetings held in the fi nancial year. He does not hold any shares in the Company.

Datuk Zawawi bin Mahmuddin (62)(Malaysian) Independent Non-Executive Director

Dato’ Chew Kong Seng was appointed Non-Executive Director of AEON CO. (M) BHD. on 23 July 2001. He is a Fellow of Institute of Chartered Accountants in England and Wales, a Member of the Malaysian Institute of Accountants and the Malaysian Institute of Certifi ed Public Accountants. He was a tax offi cer in the Inland Revenue Department in the United Kingdom and then joined Stoy Hayward & Co. in the United Kingdom from 1964 to 1970. He returned to Malaysia and joined Turquand Young & Co. (now known as Ernst & Young) and was subsequently transferred to Sarawak offi ce as Manager in-charge and later as Partner in-charge. He was appointed as the Managing Partner of Ernst & Young from 1990 to 1996. Currently, Dato’ Chew Kong Seng is a Director and Audit Committee Chairman of Petronas Dagang Berhad, Industrial Concrete Products Bhd, PBA Holdings Berhad and Bank of America Malaysia Berhad, as well as a Director and a member of the Audit Committee of Petronas Gas Berhad and GuocoLand (Malaysia) Berhad. He is also a Director of Encorp Berhad and Great Wall Plastic Industries Berhad. Dato’ Chew Kong Seng is the Chairman of the Audit Committee and a member of the Nomination Committee of the Board. Dato’ Chew Kong Seng has attended all the seven (7) Board meetings held in the fi nancial year. He does not hold any shares in the Company.

Brig. Jen (B) Dato’ Mohamed Idris bin Saman was appointed Non-Executive Director of AEON CO. (M) BHD. on 16 June 2000. He holds a Post Graduate Diploma in Management Studies from the Slough College, United Kingdom which he obtained in 1980. He was a graduate of the Air Command & Staff College, Maxwell, USA and the Armed Forces Defence College, Kuala Lumpur. He joined the Royal Malaysian Air Force as a Pilot Offi cer and served for thirty-fi ve (35) years, in various executive positions within its Logistic Branch. He retired from the Royal Malaysian Air Force in 2000 as Assistant Chief of the Air Force (Material). He is a Director of Affi n Fund Management Bhd. He is also a Fellow of the Malaysian Institute of Logistics. Brig. Jen (B) Dato’ Mohamed Idris bin Saman is a member of the Audit and Nomination Committees of the Board. Brig. Jen (B) Dato’ Mohamed Idris bin Saman has attended all the seven (7) Board meetings held in the fi nancial year. He does not hold any shares in the Company.

Dato’ Chew Kong Seng (70)(Malaysian) Independent Non-Executive Director

Brig. Jen (B) Dato’ Mohamed Idris bin Saman (63)(Malaysian) Independent Non-Executive Director

Mr. Naruhito Kuroda was appointed Non-Executive Director of AEON CO. (M) BHD., on 16 May 2007. He holds a Bachelor’s Degree in English Literature from Kansai University of Foreign Studies, Japan, which he obtained in 1984. He joined ÆON Co., Ltd. in 1984 and was transferred to AEON Credit Japan of Marketing and subsequently seconded to AEON Credit Service (Asia) Co., Ltd. Hong Kong, as a Senior Manager. In 1995 he was appointed a director of AEON Thana Sinsap (Thailand) PLC and also the Deputy Managing Director of ACS Capital Corporation, which he held from 1998 to 1999. Mr. Naruhito Kuroda was appointed a Director of AEON Credit Service (ASIA) in Hong Kong in 1999 and appointed the Managing Director of AEON Credit Service (M) Berhad in 2001. He currently sits on the Board of Directors of PT AEON Credit Service Indonesia. Mr. Naruhito Kuroda has attended all the four (4) Board meetings held during his term of offi ce in the fi nancial year. He holds 16,000 ordinary shares directly in the Company.

Mr. Naruhito Kuroda (45)(Japanese) Non-Independent Non-Executive Director

A n n u a l R e p o r t 2 0 0 7 2 3

(Seated from left to right)

Ms. Audrey Lim Suan ImmAssistant General Manager Marketing

Puan Nur Qamarina ChewGeneral Manager New Business Development

Mr. Nagahisa OyamaManaging Director

Puan Noryahwati Mohd. NohGeneral Manager Human Resource,Administration and Security, Safety & Health

Ms. Chong Swee YingGeneral Manager Store Operations

(Standing from left to right)

Mr. Poh Ying LooGeneral Manager Finance

Mr. Tomio YokoyamaAssistant General Manager SC Development

Tuan Hj. A. Rashid Hj. AdamGeneral Manager Corporate Affairs

Lt. Col (R) Yaacob bin MahmudGeneral Manager Supply Chain Management

Mr. Takanori YonezawaAssistant General Manager Human Resource -Special Task

Mr. Mitsuru NakataAssistant General Manager Merchandising

SENIOR MANAGEMENT

2 4 A n n u a l R e p o r t 2 0 0 7

CHAIRMAN’S STATEMENT

On behalf of the Board of Directors, I am pleased to present AEON CO. (M) BHD.’s (AEON) Annual Report and Audited Financial Statements for the fi nancial year ended 31 December 2007.

FINANCIAL REVIEWFor the fi nancial year under review (the year), AEON achieved yet another good set of results owing to the continuing good performance from its core business of retailing and property management services. For the twelve months ended 31 December 2007, AEON achieved revenue of RM2.886 billion which is 48.7% higher than that of the previous corresponding fi nancial period from March to December 2006 which was a shorter period due to the change in accounting year end from February to December. Comparing on the same period basis, the revenue of RM2.886 billion is 24.7% higher when compared to the previous corresponding period from January to December 2006.

The strong revenue growth had enabled AEON to also register a strong profi t before tax of RM159.0 million and a profi t after tax of RM105.2 million for the year. These profi ts represent increases of 12.9% and 1.8 % respectively from the profi ts before tax of RM140.7 million and profi t after tax of RM103.2 million recorded in the previous fi nancial period of March to December 2006. However the previous fi nancial period’s profi ts had also included a gain of RM33.9 million from the disposal of its Kinta City Shopping Centre in

a sales and leaseback transaction which if excluded would have resulted in a profi t after tax growth of 16.7% over the previous fi nancial period. These splendid results contributed to higher earnings per share of 59.9 sen for the year. In addition, AEON’s balance sheet as at 31 December 2007 remained healthy with no gearing and a net asset value of RM4.51 per share.

REVIEW OF OPERATIONS2007 was indeed a good year for the economy of Malaysia and consequently the retail industry. Consumption related measures and events such as Visit Malaysia Year 2007 and salary hike for civil servants boosted further growth of the retail industry.

For this year, the retail sales of AEON contributed RM2.640 billion to the total revenue. The growth of 24.8% in retail sales over the previous corresponding period of January to December 2006 was contributed by both the existing same stores growth of 10.1% as well as contribution of 12.3% from the new JUSCO stores at Taman Equine, Cheras Selatan and Queensbay, all of which operated for a full year in 2007. The year also saw the opening of two new stores at Bandar Sunway and Bukit Tinggi, Klang on 29 September 2007 and 24 November 2007 respectively and they contributed about 2.5% to the total retail sales.

The performance of the existing stores was also good. JUSCO stores in Taman Maluri, Wangsa Maju, Melaka, Ipoh, Permas Jaya, Bandar Utama, Bandar Baru Klang and Bandar Puchong, recorded higher growth of between 5.0% to 10.0% over the previous corresponding period whereas newer JUSCO stores at Metro Prima, Seremban 2 and Tebrau City recorded even stronger growth from 13.1% to 16.9%. JUSCO Mid Valley and JUSCO Taman Universiti, which underwent renovation in 2006 and did not operate in full in the previous corresponding period, registered 17.0% and 21.0% growth respectively for the year.

To further tap into and create a niche in providing convenience shopping to identifi ed neighbourhood areas, AEON had also during the year further opened three new supermarkets at Kota Kemuning, Desa ParkCity and Ampang, all of which are located within highly populated residential areas. These new supermarkets together with the existing supermarkets at Damansara Damai and Pearl Point shopping centre offer varieties of groceries, perishables, fresh produce, bakery and delicatessen. Although the contribution of these supermarkets are still marginal, AEON considers their role as important

A n n u a l R e p o r t 2 0 0 7 2 5

in complementing its existing stores and to enable AEON to further establish itself in food and related sector of the retail industry. The supermarkets have been rebranded from D’Hati to MaxValu, to project maximum value for the goods and services offered. MaxValu is also the name of AEON Group of Japan’s supermarket chain.

AEON’s property and management services also continued to do well for the year. AEON with its well managed shopping centres that provides good tenant mix, undoubtedly attract and retain tenants as was evidenced by the high level of average occupancy rate of 99 % for its shopping centres. The property management services have achieved revenue of RM245.9 million, an impressive growth of 16.5% against the previous corresponding period of January to December 2006. Same shopping centres basis showed growth of 5.2% for the year whereas the new shopping centres at AEON Taman Equine Shopping Centre and AEON Cheras Selatan Shopping Centre, which operated throughout the year, contributed 9.3% to the growth. In November 2007, AEON opened its 14th shopping centre at Bukit Tinggi, Klang which is the largest AEON shopping centre in Malaysia offering approximately 745,000 square feet of net lettable area and is expected to contribute signifi cantly to the growth of AEON in the years to come.

During the year, AEON purchased two parcels of land at Ampang, Kuala Lumpur and Bukit Indah, Johor Bahru for the purpose of constructing thereon a shopping centre each. Construction of the shopping centres is currently in progress and is expected to be completed by end of 2008 or beginning of 2009. AEON is also currently waiting for the completion of another shopping centre in Seberang Prai, Penang, which AEON will lease from the owner. The shopping centre in Seberang Prai is expected to be opened for business before the end of 2008.

CORPORATE SOCIAL RESPONSIBILITYRapid economic development and urbanisation have inevitably sacrifi ced our natural environment causing serious consequences of global warming and climate change phenomenon. These issues have prompted AEON to play its part in preserving the natural environment and contribute to making our world a better place to live in.

To this end, “Planting the Seeds of Growth to Serve Our Community” is a continuous mission for AEON Group

to preserve the environment in which we live in through planting of trees. During the year, AEON together with Jabatan Perlindungan Hidupan Liar dan Taman Negara (Perhilitan) carried out tree planting activities at Paya Indah Wetlands whereby approximately 755 trees were planted. 5,000 trees were planted at a tree planting ceremony at AEON Bukit Tinggi Shopping Centre at which the staff of AEON, invited guests, school children and local community participated. Tree planting ceremony is a traditional ceremony which has been practised by AEON before each new shopping centre opening. AEON has since planted more than 310,000 seedlings around its shopping centres throughout the country.

Apart from tree planting activities, AEON has also organised a series of community services such as educational visits by school children to JUSCO, visiting orphanages, recycling projects, blood donations drives and other community projects in which staff of AEON and local residents participated. These activities will continue to be carried out by AEON with the objective of fostering a spirit of cooperation and helping one another among the local community.

AEON has also contributed to the Reduction of CO2 Emmission to the Environment through the implementation of energy saving systems at some of its outlets to reduce electricity consumption and also the use of bio degradable plastic bags at its outlets since 2004 which further refl ect AEON’s drive and commitment to make the environment a much more friendlier place for the future generations.

During the year, “WITH ALL OUR HEARTS” Malaysian JUSCO Foundation, a charitable foundation which AEON supports which involves in fund-raising activities and events for the benefi t of all underprivileged children, has successfully raised more than RM750,000 through its annual Charity Gala Dinner. The objectives of the fund raising event were, among others, to set up a second welfare home “Rumah Tunas Harapan” to provide shelter for underprivileged children. Donations were also made to various other deserving causes.

AEON always takes the lead and looks for sustainable initiatives to encourage greater participation from the communities in supporting activities such as preserving the natural environment, charitable events and community services, thereby propagating positive effects on AEON’s corporate social responsibility.

2 6 A n n u a l R e p o r t 2 0 0 7

PROSPECTS AND CHALLENGESDespite concerns of impact on our economy from external factors such as impending US economy slowdown, fuel prices and other geopolitical factors, the outlook of our economy remains positive with the expected growth to be driven mainly by the domestic demand and private consumption. The series of economic initiatives by the government such as the Ninth Malaysia Plan and the economic corridors are also expected to further spur our economy.

While the economy is expected to remain stable, the coming year will still be very challenging for AEON as it grows in size and the competition increases. The opening of new hypermarkets and the expansion of existing and opening of new malls with new formats and themes further increases competition in the retail industry.

To this end, AEON with its established presence and brand name continues to formulate plans and measures to respond to competition and changing consumer tastes and demands through enhancing its competitive edges in customer services, merchandise assortments and pricing, shopping centre ambience and good tenant mix. Renovation plans are also in hand to refurbish the existing stores and shopping centres in order to provide customers with new and fresh environment and ensure that every shopping experience is full of excitement and joy.

On its expansion plan, AEON will be opening two stores in the coming year at Seberang Prai, Penang and Ampang, Selangor. Besides, more strategic locations within the neighbourhood will be identifi ed for expansion of its MaxValu supermarkets to further establish itself in the food and related sector category.

DIVIDENDThe Board of Directors is recommending for your approval, a fi rst and fi nal dividend of 17% less 26% income tax and

a special tax exempt dividend of 4%, for the year ended 31 December 2007 at the forthcoming Annual General Meeting.

ACKNOWLEDGEMENTDuring the fi nancial year ended 31 December 2007, AEON bade farewell to three of its directors, namely Mr. Toshiji Tokiwa, the Non-Executive Vice Chairman, Mr. Tatsuichi Yamaguchi, the Non-Executive Director and Mr. Masato Yokoyama, the Executive Director. On behalf of the Board, I would like to take this opportunity to thank Mr. Toshiji Tokiwa, Mr. Tatsuichi Yamaguchi and Mr. Masato Yokoyama for their contribution in strengthening the position of AEON as the leading retailer in Malaysia.

On behalf of the Board, I would also like to welcome our new directors, Mr. Tsutomu Kajita as Non-Executive Vice Chairman and Mr. Naruhito Kuroda as Non-Executive Director. I strongly believe that with their vast experiences, AEON will achieve even greater heights in the years to come.

I would also like to express my gratitude to the management and staff for their untiring and relentless efforts in steering AEON throughout the challenging years. Finally, I would also like to thank our valued customers, business associates, bankers, government authorities and our valued shareholders for their continuous support.

Dato’ Abdullah bin Mohd YusofChairman

A n n u a l R e p o r t 2 0 0 7 2 7

REVIEW OF OPERATIONS

The Malaysian economy has further strengthened in the year 2007, by registering a growth of 6.3%, as compared with the 5.9% growth in the previous year. The strong growth was due to the robust domestic demand, driven by strong private consumption spending and investment activities. This is evidenced through the growth in the services sector which registered double digit growth in the wholesale, retail trade, accommodation and restaurant as well as the finance, insurance, real estate and business services sub sectors. A slew of domestic initiatives like the Ninth Malaysia Plan, economic corridors, private finance initiatives and incentives for the property market had further allowed the domestic economy to withstand external uncertainties such as the US sub prime issue, high oil price and domestic inflation worries.

In line with the economic growth and buoyant consumer spending, AEON has also achieved an impressive set of results for both its core business activities of retail sales and property management services. Total revenue for the financial year ended 31 December 2007 was RM2.886 billion, representing a growth of 24.7% above the previous corresponding period from January to December 2006. The retail sales segment posted RM2.640 billion whereas the property management services registered RM245.9 million in revenue for the year under review (the year).

2 8 A n n u a l R e p o r t 2 0 0 7

RETAIL SALESAmidst the competitive challenges in the retail sector which saw several new shopping malls open during the year, the retail sales of AEON, assisted by good marketing strategies, continues to record envious results. The retail sales of RM2.640 billion represented an increase of 24.8% over the previous corresponding period from January to December 2006.

The growth in retail sales came from the continuing good performance of the existing stores, the contributions of stores that opened in 2006 and operated for a full year in 2007, as well as contributions of new stores that opened in 2007. Same store growth when comparing against previous corresponding period of January to December 2006 was 10.1%, with the existing individual store’s performance growth ranging from 5% to 21%. JUSCO stores in Taman Maluri, Melaka, Wangsa Maju, Bandar Utama, Bandar Baru Klang, Ipoh and Bandar Puchong recorded growth of between 5% to 10%. JUSCO stores at Metro Prima, Seremban 2 and Tebrau City, whose growth was further assisted by the completion of the infrastructure and housing developments around the respective stores recorded growth of between 13% to 17%. JUSCO stores at Mid Valley and Taman Universiti, both of which underwent refurbishment in the previous year for a fresher and more attractive look, registered growth of 17% and 21% respectively in the year. JUSCO Permas Jaya which was successfully refurbished in 2007 into a family oriented store with an amusement centre for kids registered growth of 5% despite the disruptions in business during the renovation.

JUSCO stores in Taman Equine, Queensbay and Cheras Selatan, all of which were opened in the previous financial period and operated for a full year in 2007, performed with commendable results, contributing about 3% to 5% each to the total retail sales.

Though the contribution is still marginal, the growth in retail sales was also contributed by the MaxValu supermarkets whose combined total sales was approximately RM30.0 million in the year. MaxValu supermarkets, the brand name which originates from AEON Group’s supermarket chain in Japan, offer customers a wide range of quality and affordable daily necessities such as vegetables, local and imported fruits, frozen food, daily products, dry grocery items, household goods and stationery, under the concept of “convenience neighbourhood store”. The supermarket was rebranded from “D’HATI” to “MaxValu” in January 2008. There are fi ve MaxValu supermarkets in operation by the end of 2007 with three new MaxValu stores located at Kota Kemuning, Desa ParkCity and Ampang. These new supermarkets provide opportunities for the Company to further establish itself in the food and household necessities sector.

During the year, the Company also opened two new stores in Bandar Sunway and Bukit Tinggi, Klang on 29 September 2007 and 24 November 2007 respectively. JUSCO Bandar Sunway, covering approximately 225,000 square feet, is the anchor tenant in the newly opened, expanded second phase of Sunway Pyramid Shopping Centre. JUSCO Bukit Tinggi, which occupies a net lettable space of approximately 300,000 square feet is the anchor

A n n u a l R e p o r t 2 0 0 7 2 9

tenant in AEON Bukit Tinggi Shopping Centre, the largest shopping centre that the Company manages in Malaysia. The opening of these two new stores has enabled the Company to strengthen its penetration in residential areas with high disposable income and strong spending power.

The Company continuously looks for innovative sales strategies to attract customers to shop in its stores and supermarkets. Towards this objective, the Company always ensures that it is quick to respond to the ever-changing customers’ needs and wants through its services, selling floor and merchandise management. In addition, the Company took measures to further promote its private brands during the year among others, are Jusco Selection, Orange Sorbet and Crème. More Jusco Selection assortments of household staples and groceries which offer quality and value-for- money, and more fashion collections of Orange Sorbet and Crème were introduced. In response to customers’ changing lifestyles aimed towards health and beauty consciousness, the Company had also in the year, expanded and innovated its health and beauty care category into a new separate division called AEON Wellness in order to provide the best quality and widest selections of health and beauty products such as nutritional supplements, medical equipment, dental care products, traditional and modern medicines; all essential items necessary for optimal health and beauty fulfillment available at affordable prices to the customers. It offers customers the convenience of a unique health and beauty service program available under one roof.

3 0 A n n u a l R e p o r t 2 0 0 7

In its continuous efforts to provide a clean and hygienic shopping environment for its customers especially with regards to its foodcourt, bakery, delicatessen, respective kitchens, backrooms and processing centres, the year also witnessed the Company’s selected stores embarking on a mission to achieve the Hazard Analysis & Critical Control Point (HACCP) certification, to put the Company’s selected supermarkets’ food quality system on par with the international standard in food safety compliance. In 2008, JUSCO supermarkets at Taman Maluri and Taman Equine, and also the AEON Central Kitchen, were granted the HACCP certification by SGS, the international certification body, through its Malaysian office, SGS (Malaysia) Sdn Bhd. This is an excellent and proud achievement for the Company for it marks the first for a retailer in Malaysia to be granted such a certification.

Besides hygiene, the Company continued to emphasise on its customer service and merchandise assortment to differentiate itself from the competition. Through its “Show & Tell Cashier Contest”, an annual contest which provides customers the opportunity to nominate the best cashier, the attitude of good customer service is inculcated into the cashiers to always ensure that they provide prompt, courteous, personalised and reliable services to all customers at all times. The “5 Star Campaign”, another innovative customer service campaign, was also carried out in the year to remind all staff on the importance of having a high-level of awareness and positive attitude towards customer service. The efforts to enhance and maintain consistent level of customer service had enabled the Company to win numerous awards. In the year under review, the Company received the Silver Award in the prestigious “2007 Retail Asia Pacific Top 500 Award”. In the same year, JUSCO stores of Taman Maluri, Permas Jaya and Queensbay also received the “Customer Choice Shop 2007/2008 Award” organised by the Ministry of Domestic Trade and Consumer Affairs.

The Company’s loyalty program continued to be a major marketing tool with the membership reaching approximately 700,000 members for the year. On average, J CARD members contributed about 60% of the monthly retail sales. J CARD Members’ Days and J CARD Privilege Shopping Days continue to be favoured shopping days as members look forward to enjoying the privilege of shopping with special discounts at all JUSCO stores. The number of J CARD members is expected to grow in tandem with the expansion and growth of JUSCO stores and MaxValu supermarkets.

PROPERTY MANAGEMENT SERVICESThe year under review was a very challenging year for the property management services division of the Company with increased in shopping space from the opening of new shopping centres and expansion of existing ones. The new and expanded shopping centres also bring new thematic

A n n u a l R e p o r t 2 0 0 7 3 1

concepts to entice customers and tenants alike. Despite such challenges, the Company continued to record strong and steady growth in its property management services.

For the financial year ended 31 December 2007, the Company’s property management services division has registered an income of RM245.9 million, which is 16.5% above the previous year’s performance of January to December 2006. Besides the impressive same shopping centres growth of 5.2%, the high growth was also due to the full year operation of its shopping centres in Taman Equine and Cheras Selatan.

During the year, AEON added another shopping centre to its property management services division with the opening of AEON Bukit Tinggi Shopping Centre on 24 November 2007. AEON Bukit Tinggi Shopping Centre which has a net lettable space of approximately 745,000 square feet, houses about 200 tenants and more than 5,000 car parking bays, is the largest shopping centre operated by the Company in Malaysia. Besides having the JUSCO general merchandise store and supermarket as its anchor tenant,

AEON Bukit Tinggi Shopping Centre has also attracted exclusive tenants, amongst which are Harvey Norman, MNG, Guess, Esprit, Padini Concept Store, Bonia and TGV Cinemas. With the varied retail-mix planning, AEON Bukit Tinggi Shopping Centre has been enjoying good stream of customers since the shopping centre opened.

In order to continually attract customers to patronise its shopping centres and to cater to higher expectations and demands, the Company constantly reviews its tenant mix, carries out refurbishment and maintenance works on its shopping centres as well as continuously strategises to create memorable shopping experiences for its customers through excellent customer service, comfort and ambience coupled with exciting events throughout the year.

PROSPECTS AND CHALLENGESWhile there are concerns over the impact on the economy from external factors such as the US economy, fuel prices and other geopolitical factors, Malaysia’s economy is expected to remain stable and resilient in the coming year

3 2 A n n u a l R e p o r t 2 0 0 7

against these external factors, mainly due to sustainable domestic demands and private consumption amidst the various economic measures put in place by the Government such as the Ninth Malaysia Plan and the economic corridors which will ensure the economic outlook remains positive for the country.

For the Company, the new financial year will be a challenging year as it seeks to continue its growth in strength and size in an increasingly competitive environment which has witnessed development and opening of new hypermarkets and malls with different varieties, formats and themes.

Despite these, the Company is confident that with its established brand name and presence, competitive edges and expansion plans, it will be able to continue to enjoy growth in the coming year. The Company continuously strives to ensure that it maintains its operational efficiency and its ability to respond quickly to customers’ needs and desires as well as the increasing competition. To this end, customer services and conveniences, good ambience environment, merchandise assortments and pricing remain utmost priorities for the Company’s business besides core areas such as human resource and information technology development. On its private brands, the Company seeks to continue developing and promoting its in-house brands of

A n n u a l R e p o r t 2 0 0 7 3 3

Jusco Selection, and specialty shops such as ti:zed, Orange Sorbet and Jeans Studio in order to increase the awareness of customers on these brands which are high in quality yet available at affordable prices. The Company is looking into innovative ideas to enhance the benefits of J CARD memberships including tie-ups with more business associates so as to continuously enhance customer loyalty and distinguish the Company from its competitors.

On its property management division, besides ensuring safety, security and comfortable shopping centres for the tenants and customers alike, the Company will also be increasing its efforts to develop suitable promotions and events for each of its shopping centre in entirety. Reorganisation of the tenants and tenant mix including new categories of business will also be carried out so as to ensure that its tenant mix is always attractive for the shoppers.

On its expansion plan, the Company aims to further establish its presence in new locations and townships besides Klang Valley with new and more ecologically friendly shopping centre formats. In the coming year, the Company had targeted to open at least two new shopping centres. AEON Seberang Prai City Shopping Centre which the Company will lease from the owner and manage entirely is expected to be completed before the end of 2008. AEON AU2 Shopping Centre, which is currently under construction on a land which the Company purchased during the year, is expected to open by the end of 2008. The shopping centre in Bukit Indah, Johor Bahru is expected to be completed by the first quarter of 2009. The Company is also currently seeking more potential locations to expand its MaxValu supermarket operations.

With the expansion and increasing number of outlets, the Company is confident it will be able to achieve its aim of being the retailer of choice for the consumers in terms of merchandising depth and breadth as well as quality of the overall shopping experience.

3 4 A n n u a l R e p o r t 2 0 0 7

Board ResponsibilitiesThe Board of Directors, in recognising the importance of corporate governance, is committed to ensuring that the Company’s business and operations are in line with the principles and best practices advocated in the Malaysian Code on Corporate Governance.

The Board of Directors assumes responsibilities in corporate governance and has established various processes and committees to assist the Board in discharging of these responsibilities. Among others, the Company’s strategies and directions, shareholders and investors’ relationship, annual budget, major capital expenditure, signifi cant fi nancial matters, and the adequacy and integrity of internal controls including risk assessment are within the responsibilities of the Board of Directors.

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

A) DirectorsBoard BalanceThe Board of Directors consists of eight (8) members; comprising one (1) Non-Executive Chairman, one (1) Non-Executive Vice Chairman, one (1) Executive Director, and fi ve (5) Non-Executive Directors. Of the fi ve (5) Non-Executive Directors, three (3) are Independent Directors.

Dato’ Chew Kong Seng is the Senior Independent Non-Executive Director to whom concerns on matters relating to corporate governance of the Company could be conveyed to.

The Directors bring a wide range of expertise and experience in various fi elds such as economics, public services, accounting and fi nance, legal, human resource, banking, marketing, taxation, general management, retail management and property management services. All Board members participated and deliberated on the issues and matters affecting the Company.

The profi le of each Director is presented on page 21 to page 22 of the Annual Report.

Supply Of Information

The Company Secretary ensures that all Board meetings are furnished with proper agendas. Board papers and reports providing updates on fi nancial, operational and corporate developments including matters such as the Company’s corporate social responsibility program and staff welfare matters are circulated prior to the meetings to all Directors for them to discharge their duties effectively. The Directors have full access to the advice and services of the Company Secretary. In addition, the Directors, if necessary, may also seek professional advice, at the Company’s expense. The Directors may also consult the Chairman and other Board members prior to seeking any independent professional advice. The proceeding of meetings were properly recorded by the Company Secretary.

Board MeetingsThe Board met seven (7) times during the fi nancial year ended 31 December 2007. The details of attendance of each Director at the Board meetings held during the fi nancial year are as the table below: -

STATEMENT ON CORPORATE GOVERNANCE

Number of meetings attended/held during the Director’s term in offi ceNo Name of Directors

1 Dato’ Abdullah bin Mohd Yusof 7/7

2 Mr. Tsutomu Kajita (appointed on 16 May 2007) 2/4

3 Mr. Nagahisa Oyama 7/7

4 Datuk Ramli bin Ibrahim 6/7

5 Brig. Jen (B) Dato’ Mohamed Idris bin Saman 7/7

6 Datuk Zawawi bin Mahmuddin 7/7

7 Dato’ Chew Kong Seng 7/7

8 Mr. Naruhito Kuroda (appointed on 16 May 2007) 4/4

9 Mr. Toshiji Tokiwa (resigned on 14 August 2007) 4/4

10 Mr. Tatsuichi Yamaguchi (resigned on 16 May 2007) 3/3

11 Mr. Masato Yokoyama (resigned on 16 May 2007) 3/3

A n n u a l R e p o r t 2 0 0 7 3 5

Directors’ TrainingAll the Directors have attended the Directors’ Mandatory Accreditation Programme and the continuing Education Programme organised by Bursa Malaysia Securities Berhad and are also provided with updates from time to time on relevant new laws and regulations affecting their directorship.

Directors also from time to time visited existing stores and/or new sites to have a thorough understanding of the Company’s operational matters.

Board CommitteesThe Board of Directors is assisted by its Committees, which have been established under defi ned terms of reference. The Committees are the Nomination Committee, the Remuneration Committee and the Audit Committee.

The Nomination CommitteeMr. Tsutomu Kajita, who was appointed a Non-Executive Director on 16 May 2007 was also appointed the Chairman of the Nomination Committee after the resignation of Mr. Tatsuichi Yamaguchi on 16 May 2007. The Committee is made up of Non-Executive Directors whose other members are Dato’ Abdullah bin Mohd Yusof, Dato’ Chew Kong Seng, Brig. Jen (B) Dato’ Mohamed Idris bin Saman and Datuk Zawawi bin Mahmuddin. The Committee met one (1) time in the fi nancial year under review.

The duties and responsibilities of the Committee, among others, are to recommend to the Board, candidates for directorship, directors to fi ll seats on Board Committees and to review annually the required mix of skills and experience of the Board including the effectiveness of the Board as a whole and the contribution from each Director.

The Board, through the Nomination Committee, on 15 February 2007 conducted the annual assessment of the Directors’ performance and contribution, and reviewed the required mix of skills and experience of the Board to function competently and effi ciently as a whole.

The Remuneration CommitteeMr. Tsutomu Kajita who was appointed a Non-Executive Director on 16 May 2007 was also appointed the Chairman of the Remuneration Committee after the resignation of Mr.

Tatsuichi Yamaguchi on 16 May 2007. The Committee is made up of Non-Executive Directors whose other members are Dato’ Abdullah bin Mohd Yusof and Datuk Ramli bin Ibrahim. The duties of the Committee shall be to recommend to the Board the remuneration of all Directors in all its forms. Executive Directors play no part in decision-making or determining their own remuneration.

In the fi nancial year under review the Committee met one (1) time to determine the remuneration packages of all Directors’ including the Non-Executive Chairman and Non-Executive Vice Chairman. The determination of the remuneration packages is a matter for the Board as a whole to approve. Individual Directors concerned do not participate in the discussion on their own remuneration.

The Audit CommitteeThe Board is also assisted by the Audit Committee whose members, terms of reference and activities for the fi nancial year under review are stated on page 38 to 40 of the Annual Report.

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

3 6 A n n u a l R e p o r t 2 0 0 7

B) Directors Remuneration The breakdown of the remuneration of the Directors during the fi nancial year under review is as follow: -

1) Aggregate remuneration of the Directors categorised into appropriate components:

TotalRM

Executive DirectorsRM

Non-Executive DirectorsRM

2) The number of Directors whose total remuneration fall within the following bands:

Fees 245,500 875,000 1,120,500

Salaries 465,324 - 465,324

Benefi ts-in-kind 30,850 17,400 48,250

Other emoluments 113,820 - 113,820

855,494 892,400 1,747,894

Number of Directors

Range of Remuneration Executive Non-Executive Total

less than RM50,000 - 2 2

RM50,001 to RM100,000 - 5 5

RM100,001 to RM150,000 - - -

RM150,001 to RM200,000 - 1 1

RM200,001 to RM250,000 1 1 2

RM250,001 to RM300,000 - - -

RM300,001 to RM350,000 - - -

RM350,001 to RM400,000 - - -

RM400,001 to RM450,000 - - -

RM450,001 to RM500,000 - - -

RM500,001 to RM550,000 - - -

RM550,001 to RM600,000 - - -

RM600,001 to RM650,000 1 - 1

2 9 11

A n n u a l R e p o r t 2 0 0 7 3 7

C) ShareholdersInvestors and Shareholders CommunicationIt has always been the Company’s practice to maintain good relationship with its shareholders. Major corporate developments and happenings in the Company have always been duly and promptly announced to all shareholders, in line with Bursa Malaysia Securities Berhad’s objectives of ensuring transparency and good corporate governance practices.

The Company’s fi nancial performance, major corporate developments and other relevant information are promptly disseminated to shareholders and investors via announcements of its quarterly performance, annual report, corporate announcements to Bursa Malaysia Securities Berhad and press conferences. Further update of the Company’s activities and operations are also disseminated to shareholders and investors through dialogue with analysts, fund managers, investors and the media.

Besides highlighting retail business promotional activities, the Company’s website www.jusco.com.my provides an update of the Company’s latest performance released to Bursa Malaysia Securities Berhad as well as other corporate information to the public.

During the Annual General Meeting, shareholders are usually given a presentation on the Company’s performance and major activities that were carried out by the Company for the period under review. During the meeting, shareholders have the opportunity to enquire and comment on the Company’s performance and operations.

D) Accountability And AuditFinancial reportingIn its fi nancial reporting via quarterly announcements of results, annual fi nancial statements and annual report presentation including the Chairman’s Statement and Review of Operations, the Board of Directors always provides a comprehensive assessment of the Company’s performance and prospects for the benefi ts of shareholders, investors and interested parties. The Audit Committee also assists the Board in overseeing the Company’s fi nancial reporting processes.

Directors’ responsibility statement in respect of the preparation of the audited fi nancial statementsThe Board of Directors is responsible for the preparation of the fi nancial statements for the fi nancial year of the Company, which gives a true and fair view of the state of affairs of the Company and its results and cash fl ow for the fi nancial year ended.

The Board of Directors has ensured that the fi nancial statements have been prepared in accordance with applicable approved accounting standards in Malaysia, the requirements of the Companies Act, 1965, Bursa Malaysia Securities Berhad and other regulatory bodies. In preparing the fi nancial statements, the Board of Directors has ascertained that accounting policies and reasonable prudent judgement and estimates have been consistently applied.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the fi nancial position of the Company and to enable them to

ensure that the fi nancial statements comply with the Companies Act, 1965. The Directors have a general responsibility for taking such steps as is reasonably open to them to safeguard the assets of the Company, to prevent and detect fraud and other irregularities.

Going ConcernThe Board of Directors confi rms that the Company has adequate resources to continue its business in the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing the fi nancial statements.

State Of Internal ControlThe Statement on Internal Control set out on page 41 of the Annual Report provides an overview of the state of internal control within the Company.

Relationship With The External AuditorsThe Board of Directors with the assistance of the Audit Committee maintains a formal and transparent relationship with the Company’s External Auditors through the Audit Committee, Board and formal meetings whereby issues are discussed.

The relationship between the Board and the External Auditors is also formalised through the Audit Committee’s terms of reference.

Compliance With Malaysian Code On Corporate GovernanceThe Board of Directors is pleased to state that the Company was in compliance with all the principles and best practices as advocated in the Malaysian Code on Corporate Governance during the fi nancial year under review, except on disclosure of each individual Director’s remuneration.

3 8 A n n u a l R e p o r t 2 0 0 7

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

Constitution

The Board hereby resolves to establish a Committee of the Board to be known as the Audit Committee with the following terms of reference.

Composition Of Audit Committee

The Committee shall be appointed by the Board from among its members and shall consist of not less than 3 members of whom a majority shall be Independent Directors and all shall be Non- Executive Directors.

The Committee shall include at least one person who is a member of the Malaysian Institute of Accountants (MIA) or alternatively a person who must have at least 3 years’ working experience and have passed the examinations specifi ed in Part I of the First Schedule of the Accountants Act 1967 or is a member of one of the associations specifi ed in Part II of the said Schedule or fulfi ls such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.

No Alternate Director shall be appointed as a member of the Committee.

The Committee shall elect a chairperson from amongst its members. In the event that a member of the audit committee resigns, dies or for any other reason ceases to be a member, with the result that the number of members is reduced to below three, the Board of Directors shall, within three months of that event, appoint such number of new members as may be required to make up the minimum number of three members.

The Board shall review the terms of offi ce and performance of Committee members at least once in every three years.

Meetings

The Committee shall meet at least four times a year. In addition, the chairperson shall convene a meeting of the Committee if requested to do so by any member, the management or the internal or external auditors to consider any matter within the scope and responsibilities of the Committee.

The Committee shall meet at least two times a year with the External Auditor and/or the Internal Auditor without the presence of any Executive Board members, management or employees.

Quorum

A quorum shall consist of a majority of committee members present at the meeting who are Independent Directors. In the absence of Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

Attendance At Meetings

The Head of Finance, the Head of Internal Audit, the Company Secretary, the Senior Finance Manager and a representative of the External Auditors shall normally attend meetings. However, the Committee may invite any person to be in attendance to assist it in its deliberations.

Non-member directors shall not attend unless specifi cally invited to by the Committee.

Secretary To Audit Committee

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

The secretary shall be responsible for recording attendance of all members and invitees, keeping the minutes of the meeting of the Committee, circulating them to committee members and to the other members of the Board of Directors and for ensuring compliance with Bursa Malaysia Securities Berhad’s requirements.

Reporting Procedures

The Committee shall prepare an annual report to the Board that provides a summary of the activities of the Committee for inclusion in the Company’s annual report.

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

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

- Statement on the extent of compliance with the Best Practices

Audit Committee Designation

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

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

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

A n n u a l R e p o r t 2 0 0 7 3 9

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

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

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

Where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.

Authority

The Committee is authorised by the Board to:

- Investigate any activity within its terms of reference.

- Have resources, which are reasonably required to enable it to perform its duties.

- Have free access to all information and documents it requires for the purpose of discharging its functions and responsibilities.

- Have direct communication channels with the External Auditors, the Internal Auditor and Senior Management of the company.

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

- Convene meetings with the External Auditors, excluding the attendance of the Executive Board Members, whenever deemed necessary.

Duties and Responsibilities

The duties and responsibilities of the Committee shall be:

- To review the Terms of Reference at least annually, or as conditions dictate.

- To review any fi nancial information for publication, including quarterly and annual fi nancial statements before submission to the Board.

- The review shall focus on: . Any changes in accounting policies and practices. . Major judgmental areas. . Signifi cant audit adjustments from the External Auditors. . The going concern assumption. . Compliance with accounting standards. . Compliance with stock exchange and legal requirements.

- To review with the External Auditors their audit plan, scope and nature of audit for the Company.

- To review and discuss the External and Internal Auditors’ audit reports, areas of concern arising from the audit and any other matters the External and Internal Auditors may wish to discuss in the absence of management, if necessary.

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

- To discuss problems and reservations arising from the audits and any matters the auditors may wish to discuss in the absence of management, if necessary.

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

- To review the adequacy and relevance of the scope, functions and resources of Internal Audit and the necessary authority to carry out its work, including any appraisal or assessment of the competency of the internal audit function.

- To take cognisance of resignations of Internal Audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.

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

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

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

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

Overseeing The Internal Audit Function

The Committee shall oversee all internal audit functions and is authorised to commission investigations to be conducted by Internal Audit as it deems fi t. The Head of Internal Audit shall report directly to the Committee and shall have direct access to the Chairman of the Committee.

All proposals by management regarding the appointment, transfer or dismissal of the Head of Internal Audit shall require the prior approval of the Committee.

4 0 A n n u a l R e p o r t 2 0 0 7

The meetings were structured through the use of agendas, which were distributed to members with suffi cient notifi cation.

The Company Secretary was present in all the meetings. A representative of the External Auditors, Messrs KPMG Desa Megat & Co., the Head of Finance, the Head of Internal Audit and the Senior Finance Manager attended the meetings, and related management personnel attended the meetings upon invitation.

Summary Of The Audit Committee’s Activities During The Year Under Review

During the year under review, the Audit Committee carried out its duties in accordance with its terms of reference as follows:

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

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

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

d. Considered the appointment of the External Auditors and the terms of reference of their appointment.

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

f. Assessed the adequacy and effectiveness of the system of internal controls and accounting control procedures of the Company by reviewing the External and Internal Auditors’ management letters and management responses.

g. Reviewed the adequacy and relevance of scope, functions and resources of Internal Audit and that it has the necessary authority to carry out its work.

h. Reviewed related party transactions.

i. Reported to the Board on its activities and signifi cant fi ndings and results of the External and Internal Audit recommendations.

In the fi nancial year under review, the Audit Committee held two (2) meetings with the External Auditors without the presence of the management, to allow the auditors to discuss any issues arising from the audit exercise or any other matters, which the External Auditors wished to raise.

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

a. Presented and obtained approval from Audit Committee, the annual internal audit plan, its audit strategy and audit scope of work.

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

c. Monitored and ensured management implemented corrective action plans.

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

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

matters required by the Malaysian Code on Corporate Governance.

g. Assisted the Board of Directors and Management by reviewing the risk policy and control strategies in the organisation.

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

throughout the Company.

THE AUDIT COMMITTEE

The Audit Committee comprises the following members:Dato’ Chew Kong Seng (Chairman) Independent Non-Executive DirectorDatuk Ramli bin Ibrahim Non-Independent Non-Executive DirectorBrig Jen (B) Dato’ Mohamed Idris bin Saman Independent Non-Executive Director

Terms Of Reference Of The Audit CommitteeDuring the fi nancial year under review, there were changes to the terms of reference of the Audit Committee to include new best practices described in the Revised Code on Corporate Governance.

MeetingsDuring the fi nancial year under review, the Audit Committee convened four (4) meetings. The attendance records of the member of the Audit Committee are as follow:

Name of Directors Number of meetings attended/held during the member’s term in offi ce

Dato’ Chew Kong Seng (Chairman) 4/4

Datuk Ramli bin Ibrahim 4/4

Brig Jen (B) Dato’ Mohamed Idris bin Saman 4/4

A n n u a l R e p o r t 2 0 0 7 4 1

Board’s Responsibilities

The Board of Directors recognises its responsibilities over the Company’s system of internal controls, covering all its fi nancial and operating activities to safeguard shareholders’ investment and the Company’s assets.

The Board has an established on-going process for identifying, evaluating and managing the signifi cant risks encountered by the Company. The Board through its Audit Committee regularly reviews this process.

In view of the limitations inherent in any system of internal controls, the system is designed to manage, rather than to eliminate the risk of failure to achieve the Company’s corporate objectives.

The Audit Committee assists the Board to review the adequacy and integrity of the system of internal controls in the Company and to ensure that an appropriate mix of techniques is used to obtain the level of assurance required by the Board. The Audit Committee presents its fi ndings to the Board.

Internal Audit Function

The Audit Committee, assisted by the Internal Audit Department, provides the Board with the assurance it requires on the adequacy and integrity of the system of internal controls. The Internal Audit Department independently reviews the risk identifi cation procedures and control processes implemented by the management, conducts audits that encompass reviewing critical areas that the Company faces, and reports to the Audit Committee on a quarterly basis.

The Internal Audit Department also carried out internal control reviews on key activities of the Company’s business on the basis of a three-year audit plan that was presented and approved by the Audit Committee. The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based on the risk profi les of the major business units of the Company.

System Of Internal Controls

The Board of Directors is responsible for managing the key business risks of the Company and implementing appropriate internal control system to manage those risks. The Board reviewed the adequacy and integrity of the system of internal controls as it operated during the period. The following are the key elements of the Company’s system of internal controls:

- The management structure of the Company formally defi nes lines of responsibility and delegation of authority for all aspect of the Company’s affairs. Senior management and business unit’s managers submit and present their operational performance reviews as well as business plans and strategic measures in regularly held Executive Committee and Management Meetings.

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

- The authorisation limits and approvals authority threshold of the Company encompasses internal control procedures. These procedures are subject to review by the management to incorporate changing business risks and operational effi ciency.

- The Audit Committee is responsible for reviewing the statutory annual fi nancial statements and the quarterly announcements to Bursa Malaysia Securities Berhad and recommends to the Board for approval prior to submission to Bursa Malaysia Securities Berhad.

- The Internal Audit Department periodically monitors the effectiveness and evaluates the proper functioning of the internal control system on an on-going basis to ascertain compliance with the control procedures and policies of the Company. The Head of Internal Audit reports to Audit Committee on the status of internal control system on a quarterly basis.

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

All the above mentioned processes have been in place and provide reasonable assurance on the effectiveness of the internal control system.

Conclusion

The Board of Directors reviewed the adequacy and integrity of the system of internal controls that provides reasonable assurance to the Company in achieving its business objectives. As the development of sound system of internal controls is an on-going process, the Board and the management maintain an on-going commitment and continue to take appropriate measures to strengthen the internal control environment of the Company.

STATEMENT ON INTERNAL CONTROL

4 2 A n n u a l R e p o r t 2 0 0 7

Material Contracts Involving Directors And Substantial ShareholdersMaterial contracts entered into by the Company which involve Directors’ and major shareholders’ interests and still subsisting at the end of the fi nancial year ended 31 December 2007, or entered into since the end of the previous fi nancial year, comprise the following:

On 12 October 2000 and through a supplementary agreement on 1 January 2006, the Company entered into a Technical Service Agreement with ÆON Co., Ltd. whereby the Company is granted the exclusive right by ÆON Co., Ltd. to use their trademark in relation to goods and services. The Company is also granted the non-exclusive right to use the information and know-how, employed or developed by ÆON Co., Ltd. for the management and operation of retail stores, wholesale business and related supporting activities. The total cash consideration payable by the Company to ÆON Co., Ltd. for the year under review amounted to RM16.96 million. ÆON Co., Ltd. is the holding company of the Company.

On 1 July 1997, the Company entered into a Factoring Agreement with a related company, AEON Credit Service (M) Berhad whereby the Company’s goods sold on credit under its easy payment scheme are factored to AEON Credit Service (M) Berhad. The debts sold to AEON Credit Service (M) Berhad are at full value of the goods and upon the terms and conditions as stated in the factoring agreement. The total value of the debts sold to AEON Credit Service (M) Berhad in the year under review amounted to RM7.10 million. Dato’ Abdullah bin Mohd Yusof, Datuk Ramli bin Ibrahim and Mr. Naruhito Kuroda, all Directors of AEON CO. (M) BHD. are also Directors and shareholders in AEON Credit Service (M) Berhad. ÆON Co., Ltd. has an indirect interest in AEON Credit Service (M) Berhad through AEON Credit Service Co. Ltd.

On 23 June 2005, the Company entered into a JUSCO Credit Card Agreement with AEON Credit Service (M) Berhad to set out the terms and conditions for the issuance of a credit card called JUSCO Credit Card by AEON Credit Service (M) Berhad, in affi liation or association with the Company, to further promote and enhance AEON Credit Service (M) Berhad’s credit card business and the Company’s retailing business. The Company permits AEON Credit Service (M) Berhad to promote JUSCO Credit Card to consumers in return for allowing the consumers to use JUSCO Credit Card for the purchase of goods and services offered by the Company. JUSCO Credit Card holders who are also J CARD members will enjoy additional J CARD loyalty points provided by AEON Credit Service (M) Berhad through

purchase of the additional J CARD points from the Company. During the year under review, the total additional J CARD points purchased by AEON Credit Service (M) Berhad was RM310 thousand. The Company further agreed to appoint AEON Credit Service (M) Berhad as the sole acquirer of the card transaction transacted using AEON Credit Service (M) Berhad’s issued cards.

On 29 December 2005, the Company entered into a credit card merchant agreement with AEON Credit Service (M) Berhad whereby the Company’s goods sold on credit through credit cards issued by AEON Credit Service (M) Berhad, AEON Credit Service (M) Berhad will purchase from the Company all such transaction receipts. The purchase of the transaction receipts will be net of the credit card commission payable and upon terms and conditions as stated in the merchant agreement. The total value of the transaction receipts purchased by AEON Credit Service (M) Berhad in the year under review was RM40.33 million and the total commission payable is RM588 thousand. Dato’ Abdullah bin Mohd Yusof, Datuk Ramli bin Ibrahim and Mr. Naruhito Kuroda, all Directors of AEON CO. (M) BHD. are also Directors and shareholders in AEON Credit Service (M) Berhad. ÆON Co., Ltd. has an indirect interest in AEON Credit Service (M) Berhad through AEON Credit Service Co. Ltd.

On 1 February 2004, the Company entered into an agreement with AEON Fantasy Co., Ltd. to provide consultancy services to the Company’s indoor amusement centre business. AEON Fantasy agreed to provide consultation and advice on the shop design, the assortment and strategy of game machines, on skill training in respect of advertisement, promotion and training to the operation staff. The total cash consideration payable by the Company to AEON Fantasy Co., Ltd. for the year under review amounted to RM472 thousand. ÆON Co., Ltd.is the holding company of AEON Fantasy Co., Ltd. and the Company.

Non-Audit FeesThe amount of non-statutory audit fees paid to External Auditor and its affi liates during the period under review is RM 139,950 comprising of mainly advisory, review and tax services.

Revaluation Policy On Landed PropertiesThere is no revaluation policy on the Company’s landed properties. The Company adopted the transitional provisions issued by Malaysian Accounting Standards Board (MASB) to retain the carrying amount on the basis of their previous revaluation as stated in page 54 of this Annual Report.

OTHER INFORMATION

A n n u a l R e p o r t 2 0 0 7 4 3

FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER 2007

4 4 A n n u a l R e p o r t 2 0 0 7

The Directors have pleasure in submitting their report and the audited fi nancial statements of the Company for the year ended 31 December 2007.

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

Results RM’000

Profi t for the year 105,176

Reserves and provisions There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the fi nancial statements.

Dividend Since the end of the previous fi nancial period, the Company paid a fi rst and fi nal dividend of 16% less income tax of 27%, totalling RM20,498,400 in respect of the period ended 31 December 2006 on 24 May 2007.

The fi rst and fi nal dividend in respect of the year ended 31 December 2007 of 17% less income tax of 26% amounting to RM22,077,900 and 4% special tax exempt dividend amounting to RM7,020,000 recommended by the Directors is subject to the approval of members at the forthcoming Annual General Meeting of the Company.

Directors of the Company Directors who served since the date of the last report are:

Dato’ Abdullah bin Mohd Yusof

Nagahisa Oyama

Datuk Ramli bin Ibrahim

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

Datuk Zawawi bin Mahmuddin

Dato’ Chew Kong Seng @ Chew Kong Huat

Tsutomu Kajita (appointed on 16.05.2007)

Naruhito Kuroda (appointed on 16.05.2007)

Tatsuichi Yamaguchi (resigned on 16.05.2007)

Masato Yokoyama (resigned on 16.05.2007)

Toshiji Tokiwa (resigned on 14.08.2007)

DIRECTORS’ REPORT for the year ended 31 December 2007

A n n u a l R e p o r t 2 0 0 7 4 5

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

Number of ordinary shares At At Nominal 1.1.2007/ Acquired Sold 31.12.2007 value Date of per share appointment as DirectorShareholdings in which Directors

have direct interests

Interest of Dato’ Abdullah bin Mohd Yusof in:

AEON CO. (M) BHD. RM1.00 268,000 - - 268,000

AEON Credit Service (M) Berhad RM0.50 480,000 - - 480,000

Interest of Datuk Ramli bin Ibrahim in:

AEON Credit Service (M) Berhad RM0.50 180,000 - (20,000) 160,000

Interest of Naruhito Kuroda in:

AEON CO. (M) BHD. RM1.00 16,000 - - 16,000

AEON Credit Service (M) Berhad RM0.50 480,000 - - 480,000

AEON Credit Service (Asia) Co., Ltd. HK$0.10 74,800 - - 74,800

AEON Credit Service Co., Ltd. Yen98.50 1,980 - - 1,980

AEON Thana Sinsap (Thailand) Plc. Bath5.00 100,000 - - 100,000

Interests of Tsutomu Kajita in:

ÆON Co., Ltd. Yen248.00 2,800 - - 2,800

The Talbots, Inc. US$0.01 8,000 - - 8,000

Shareholdings in which Directors

have deemed interests

Interest of Dato’ Abdullah bin Mohd Yusof in:

AEON CO. (M) BHD. RM1.00 1,501,000 - (694,100) 806,900

Interest of Datuk Ramli bin Ibrahim in:

AEON CO. (M) BHD. RM1.00 280,000 - - 280,000

None of the other Directors holding offi ce at 31 December 2007 had any interest in the ordinary shares of the Company or of its related corporations during the fi nancial year.

4 6 A n n u a l R e p o r t 2 0 0 7

Directors’ benefi tsSince the end of the previous fi nancial period, no Director of the Company has received nor become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the fi nancial statements) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest, except for certain Directors who may be deemed to derive a benefi t by virtue of those transactions, advisory services and tenancy between the Company and corporations in which the Directors are deemed to have interest.

There were no arrangements during and at the end of the fi nancial year which had the object of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Issue of shares and debenturesThere were no changes in the authorised, issued and paid-up capital of the Company during the fi nancial year.

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

Other statutory information Before the balance sheet and income statement of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the fi nancial statements of the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the fi nancial statements of the Company misleading, or

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

iv) not otherwise dealt with in this report or the fi nancial statements, that would render any amount stated in the fi nancial 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 fi nancial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Company that has arisen since the end of the fi nancial year.

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

In the opinion of the Directors, the results of the operations of the Company for the fi nancial year ended 31 December 2007 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that fi nancial year and the date of this report.

A n n u a l R e p o r t 2 0 0 7 4 7

Signifi cant events during the fi nancial yeari) On 13 March 2007, the Company entered into a Sale and Purchase Agreement with a third party for the acquisition of

a piece of leasehold land located in the Mukim of Ulu Kelang, District of Kuala Lumpur at a purchase price of RM53.69 million for the purpose of constructing a shopping centre, of which 70% has been paid during the fi nancial year.

ii) On 29 October 2007, the Company entered into a Sale and Purchase Agreement with a third party for the acquisition of a piece of freehold land located in the Mukim of Pulai, District of Johor Bahru, State of Johor at a purchase price of RM106.97 million for the purpose of constructing a shopping centre. The acquisition of freehold land has been completed and fully paid during the fi nancial year.

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

Nagahisa Oyama

Kuala Lumpur,

Date: 21 February 2008

4 8 A n n u a l R e p o r t 2 0 0 7

Note 2007 2006

RM’000 RM’000

Assets

Property, plant and equipment 3 1,069,027 942,252

Prepaid lease payments 4 126,365 127,269

Investments 5 1,075 1,075

Total non-current assets 1,196,467 1,070,596

Inventories 6 260,928 214,183

Receivables, deposits and prepayments 7 79,818 45,669

Cash and cash equivalents 8 185,261 107,925

Total current assets 526,007 367,777

Total assets 1,722,474 1,438,373

Equity

Share capital 175,500 175,500

Reserves 53,309 53,826

Retained earnings 562,012 476,817

Total equity attributable to shareholders

of the Company 9 790,821 706,143

Liabilities

Deferred tax liabilities 10 23,829 29,113

Total non-current liabilities 23,829 29,113

Payables and accruals 11 858,023 677,930

Taxation 49,801 25,187

Total current liabilities 907,824 703,117

Total liabilities 931,653 732,230

Total equity and liabilities 1,722,474 1,438,373

The notes on pages 52 to 71 are an integral part of these fi nancial statements.

BALANCE SHEET at 31 December 2007

A n n u a l R e p o r t 2 0 0 7 4 9

1.1.2007 to 1.3.2006 to Note 31.12.2007 31.12.2006

RM’000 RM’000

Continuing operations

Revenue 2,886,220 1,941,431

Other operating income 2,571 35,594

Changes in inventories 46,745 55,122

Net purchases (2,108,923) (1,425,525)

Staff costs (158,985) (108,808)

Depreciation 3 (106,604) (69,086)

Operating expenses (403,514) (286,567)

Operating profi t 12 157,510 142,161

Interest expense 14 (274) (1,962)

Interest income 1,770 542

Profi t before tax 159,006 140,741

Tax expense 15 (53,830) (37,495)

Profi t for the year/period attributable

to shareholders of the Company 105,176 103,246

Basic earnings per ordinary share (sen) 16 59.9 58.8

The notes on pages 52 to 71 are an integral part of these fi nancial statements.

INCOME STATEMENT for the year ended 31 December 2007

5 0 A n n u a l R e p o r t 2 0 0 7

Non-distributable Distributable

Share Share Revaluation Retained capital premium reserve profi ts Total

Note RM’000 RM’000 RM’000 RM’000 RM’000

At 1 March 2006 175,500 20,609 33,648 392,094 621,851

Profi t for the period - - - 103,246 103,246

Transfer from revaluation

reserve to retained profi ts - - (431) 431 -

Total recognised income

and expense for the period - - (431) 103,677 103,246

Dividend - 2006 fi nal in

respect of year ended

28 February 2006 17 - - - (18,954) (18,954)

At 31 December 2006/

1 January 2007 175,500 20,609 33,217 476,817 706,143

Profi t for the year - - - 105,176 105,176

Transfer from revaluation

reserve to retained profi ts - - (517) 517 -

Total recognised income

and expense for the year - - (517) 105,693 105,176

Dividend - 2006 fi nal in

respect of period ended

31 December 2006 17 - - - (20,498) (20,498)

At 31 December 2007 175,500 20,609 32,700 562,012 790,821

Note 9

The notes on pages 52 to 71 are an integral part of these fi nancial statements.

STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2007

A n n u a l R e p o r t 2 0 0 7 5 1

1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006 Note RM’000 RM’000 Cash fl ows from operating activitiesProfi t before tax 159,006 140,741Adjustments for: Depreciation of property, plant and equipment 3 106,604 69,086 Amortisation of prepaid lease payments 4 1,466 1,202 Interest expense 14 274 1,962 Interest income (1,770) (542) Gain on disposal of property, plant and equipment (134) (34,073) Property, plant and equipment written off 2,562 1,387 Operating profi t before changes in working capital 268,008 179,763

Changes in working capital: Inventories (46,745) (55,122) Trade and other receivables (34,149) (12,924) Trade and other payables 180,093 130,778 Cash generated from operations 367,207 242,495Tax paid (34,500) (25,059) Net cash from operating activities 332,707 217,436

Cash fl ows from investing activitiesAcquisition of property, plant and equipment 3 (236,721) (252,862)Proceeds from disposal of property, plant and equipment 352 113,408Interest received 1,770 542 Addition to prepaid lease payments 4 - (2,463) Net cash used in investing activities (234,599) (141,375)

Cash fl ows from fi nancing activitiesDividend paid to shareholders of the Company (20,498) (18,954)Interest paid (274) (1,962) Net cash used in fi nancing activities (20,772) (20,916)

Net increase in cash and cash equivalents 77,336 55,145Cash and cash equivalents at beginning of year/period 107,925 52,780 Cash and cash equivalents at end of year/period 185,261 107,925 Cash and cash equivalents

Cash and cash equivalents included in the cash fl ow statements comprise the following balance sheet amounts:

2007 2006 Note RM’000 RM’000

Cash and bank balances 8 164,061 107,925Deposits with licensed fi nancial institutions 8 21,200 -

185,261 107,925

The notes on pages 52 to 71 are an integral part of these fi nancial statements.

CASH FLOW STATEMENTfor the year ended 31 December 2007

5 2 A n n u a l R e p o r t 2 0 0 7

AEON CO. (M) BHD. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of the Bursa Malaysia Securities Berhad. The address of its registered offi ce and principal place of business is as follow:

Registered offi ce and Principal place of business3rd Floor Jusco Taman Maluri Shopping CentreJalan Jejaka, Taman MaluriCheras55100 Kuala Lumpur

The Company is principally engaged in the operations of a chain of superstores selling a broad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation.

The holding company during the fi nancial year is ÆON Co.,Ltd., a company incorporated in Japan.

1. Basis of preparation(a) Statement of compliance

The fi nancial statements of the Company has been prepared in accordance with applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, 1965. These fi nancial statements also comply with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia Securities Berhad.

The MASB has also issued the following FRSs and Interpretations that have not been applied in preparing these fi nancial statements:

FRSs / Interpretations Effective date

FRS 107, Cash Flow Statements 1 July 2007

FRS 111, Construction Contracts 1 July 2007

FRS 112, Income Taxes 1 July 2007

FRS 118, Revenue 1 July 2007

FRS 120, Accounting for Government Grants and Disclosure of Government Assistance 1 July 2007

Amendment to FRS 121, The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation 1 July 2007

FRS 134, Interim Financial Reporting 1 July 2007

FRS 137, Provisions, Contingent Liabilities and Contingent Assets 1 July 2007

FRS 139, Financial Instruments: Recognition and Measurement To be announced

IC Interpretation 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities 1 July 2007

IC Interpretation 2, Members’ Shares in Co-operative Entities and Similar Instruments 1 July 2007

IC Interpretation 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds 1 July 2007

NOTES TO THE FINANCIAL STATEMENTS

A n n u a l R e p o r t 2 0 0 7 5 3

1. Basis of preparation (continued)(a) Statement of compliance (continued)

FRSs / Interpretations Effective date

IC Interpretation 6, Liabilities arising from Participating in a Specifi c Market – Waste Electrical and Electronic Equipment 1 July 2007

IC Interpretation 7, Applying the Restatement Approach under FRS 129, Financial Reporting in Hyperinfl ationary Economies 1 July 2007

IC Interpretation 8, Scope of FRS 2 1 July 2007

The Company plans to adopt the abovementioned FRSs and Interpretations for the annual period beginning 1 January 2008.

The Company has not adopted FRS 139 and by virtue of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on its fi nancial statements upon fi rst adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies, Changing in Accounting Estimates and Errors is not disclosed.

The initial application of the other FRSs and Interpretations are not expected to have any material impact on the fi nancial statements of the Company.

The fi nancial statements were approved by the Board of Directors on 21 February 2008.

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis except as disclosed in the notes to the fi nancial statements.

(c) Functional and presentation currency

These fi nancial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All fi nancial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of fi nancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.

2. Signifi cant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these fi nancial statements, unless otherwise stated.

(a) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies at exchange rates at the dates of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement.

5 4 A n n u a l R e p o r t 2 0 0 7

2. Signifi cant accounting policies (continued) (b) Property, plant and equipment

(i) Recognition and measurement

Property, plant and equipment except for freehold land and construction work-in-progress are stated at cost/valuation less accumulated depreciation and accumulated impairment losses, if any.

The Company has availed itself to the transitional provision when the MASB fi rst adopted International Accounting Standard No.16 (Revised), Property, Plant and Equipment in 1998. Certain leasehold land and buildings were revalued in February 1995 and no later valuation has been recorded for these property, plant and equipment.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

When signifi cant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi ts embodied within the part will fl ow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

(iii) Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The principal annual rates of depreciation used for the current and comparative years are as follows:

• Buildings 2% - 4%

• Structures 10%

• Offi ce equipment 10%

• Machinery and equipment 10% - 33.3%

• Furniture, fi xtures and fi ttings 20%

• Motor vehicles 20%

• IT equipment 20%

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at the reporting date.

(c) Leased assets

(i) Finance lease

Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

A n n u a l R e p o r t 2 0 0 7 5 5

2. Signifi cant accounting policies (continued) (c) Leased assets (continued)

(i) Finance lease (continued)

Minimum lease payments made under fi nance leases are apportioned between the fi nance expense and the reduction of the outstanding liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.

(ii) Operating lease Other leases are operating leases and are not recognised on the Company’s balance sheet.

Leasehold land that normally has an indefi nite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid lease payments.

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

(d) Investments in equity securities Investments in equity securities are recognised initially at fair value plus attributable transaction costs.

Subsequent to initial recognition: • Investments in non-current equity securities, are stated at cost less allowance for diminution in value, • All current investments are carried at the lower of cost and market value, determined on an individual investment

basis by category of investments.

Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities, the allowance for diminution in value is recognised as an expense in the fi nancial year in which the decline is identifi ed.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement.

All investments in equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) the recognition of an asset on the day it is received by the entity, and b) the derecognition of an asset and recognition of any gain or loss on disposal on the date it is delivered.

(e) Inventories Inventories are measured at the lower of cost and net realisable value with weighted average cost being the main basis

for cost. Cost comprises the weighted average cost of merchandise derived at by using the Retail Inventory Method. Weighted average cost includes related charges incurred in purchasing such merchandise.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sales.

(f) Receivables Trade and other receivables are initially recognised at their cost when the contractual right to receive cash or another

fi nancial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments

which have an insignifi cant risk of changes in value. For the purpose of the cash fl ow statements, cash and cash equivalents are presented net of bank overdrafts.

5 6 A n n u a l R e p o r t 2 0 0 7

2. Signifi cant accounting policies (continued) (h) Impairment of assets

The carrying amounts of assets except for inventories and fi nancial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash infl ows from continuing use that are largely independent of the cash in fl ows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statements in the year in which the reversals are recognised, unless it reverses an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where an impairment loss on the same revalued asset was previously recognised in the income statements, a reversal of that impairment loss is also recognised in the income statements.

(i) Employee benefi ts

Short term employee benefi ts

Short-term employee benefi t obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

The Company’s contribution to the statutory pension funds are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Company has no further payment obligations.

(j) Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another fi nancial asset to another entity.

(k) Revenue recognition

Goods sold and services rendered

Revenue from the sale of goods represents gross trading sales, including concessionaire sales which the Company is able to exercise control, less returns and discounts. Revenue is recognised in the income statement when the signifi cant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

Property management services from shopping centre operation which include rental income, service charge, sales commission and distribution centre charges earned are recognised on an accrual basis.

A n n u a l R e p o r t 2 0 0 7 5 7

2. Signifi cant accounting policies (continued) (l) Interest income and borrowing costs

Interest income is recognised as it accrues, using the effective interest method.

All borrowing costs are recognised in the income statement using the effective interest method, in the year in which they are incurred.

(m) Tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax liability is recognised for all taxable temporary differences.

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

Additional taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

(n) Earnings per share

The Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

(o) Segment reporting

A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

5 8 A n n u a l R e p o r t 2 0 0 7

3. P

rope

rty,

plan

t and

equ

ipm

ent

Furn

iture

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hold

Build

ings

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ach

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fi x

ture

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ruct

ion

land

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ings

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ffi c

e and

and

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ork

in

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cost

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luation)

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cost

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s eq

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men

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icle

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quip

men

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pro

gre

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l

RM

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RM

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RM

’000

RM

’000

RM

’000

RM

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RM

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RM

’000

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’000

RM

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RM

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Cost

/Valu

ation

At 1

Mar

ch 2

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87

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126

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36

9,59

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4 7,

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849

4,93

1 30

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157,

869

Add

ition

s -

-

69,2

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25,8

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____

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At 3

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821

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A n n u a l R e p o r t 2 0 0 7 5 9

3. P

rope

rty,

plan

t and

equ

ipm

ent (

cont

inue

d)

Fu

rniture

,

Fr

eehold

Build

ings

M

ach

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ture

s

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ion

land

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ings

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and

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ork

in

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cost

) va

luation)

(at

cost

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ruct

ure

s eq

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icle

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quip

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ss

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l

RM

’000

RM

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RM

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RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

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Dep

reci

ation

At 1

Mar

ch 2

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-

29,4

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45,7

57

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2,23

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027

6 0 A n n u a l R e p o r t 2 0 0 7

3. Property, plant and equipment (continued)Two of the buildings of the Company are situated on land belonging to third parties.

One of the freehold land of the Company is in the process of transfer of title.

The buildings stated at Directors’ valuation are based on professional valuation carried out by an independent fi rm of valuers in February 1995 using the open market value and on an existing use basis. In accordance with the transitional provisions issued by Malaysian Accounting Standards Board (“MASB”) upon adoption of International Accounting Standard No. 16 (Revised), “Property, Plant and Equipment”, the valuation of these assets has not been updated, and they continue to be stated at their existing carrying amounts less accumulated depreciation.

Had the buildings been carried at historical cost less accumulated depreciation, the carrying amount of the revalued assets that would have been included in the fi nancial statements at the end of the year would be as follows:

2007 2006

RM’000 RM’000

Buildings 57,426 59,125

4. Prepaid lease payments Unexpired

period more

than 50 years

Note RM’000

Cost

At 1 March 2006 136,368

Additions 2,463

At 31 December 2006/1 January 2007 138,831

Reclassifi cation from property, plant and equipment 3 562

At 31 December 2007 139,393

Amortisation

At 1 March 2006 10,360

Amortisation for the period 12 1,202

At 31 December 2006/1 January 2007 11,562

Amortisation for the year 12 1,466

At 31 December 2007 13,028

A n n u a l R e p o r t 2 0 0 7 6 1

4. Prepaid lease payments (continued) Unexpired

period more

than 50 years

RM’000

Carrying amounts

At 1 March 2006 126,008

At 31 December 2006/1 January 2007 127,269

At 31 December 2007 126,365

5. Investments 2007 2006

Non-current RM’000 RM’000

At cost: Golf membership 45 45

Unquoted shares

Equity investment - 1,030

45 1,075

Quoted shares in Malaysia 1,030 -

1,075 1,075

Market value: Quoted shares in Malaysia 10,010 -

The Company’s investment in unquoted shares amounting to RM1,030,000 in previous year has been classifi ed as quoted shares following the listing of the unquoted shares on the Bursa Malaysia Securities Berhad on 12 December 2007.

6. Inventories 2007 2006

RM’000 RM’000

Retail merchandise 145,867 132,555

Food and others 115,061 81,628

260,928 214,183

6 2 A n n u a l R e p o r t 2 0 0 7

7. Receivables, deposits and prepayments Note 2007 2006

RM’000 RM’000

Current

Trade

Trade receivables 20,328 21,381

Less: Allowance for doubtful debts (889) (722)

19,439 20,659

Amount due from a related company a 1,420 1,469

20,859 22,128

Non-trade

Other receivables and prepayments b 43,802 9,261

Rental and utility deposits 15,157 14,280

58,959 23,541

79,818 45,669

Note a

The amount due from a related company is unsecured, interest free and subject to normal trade term.

Note b

Included in other receivables and prepayments is a deposit of RM37,713,640 (31.12.2006 - Nil) paid as part of purchase consideration for the acquisition of a piece of leasehold land for the purpose of constructing a shopping centre.

8. Cash and cash equivalents 2007 2006

RM’000 RM’000

Cash and bank balances 164,061 107,925

Deposits with licensed fi nancial institutions 21,200 -

185,261 107,925

A n n u a l R e p o r t 2 0 0 7 6 3

9. Capital and reserves

Share Capital Number Number Amount of shares Amount of shares 2007 2007 2006 2006 RM’000 ’000 RM’000 ’000

Authorised:

Ordinary shares

of RM1 each 500,000 500,000 500,000 500,000

Issued and fully paid:

Ordinary shares

of RM1 each 175,500 175,500 175,500 175,500

Share premium

Share premium relates to the amount that shareholders have paid for the shares in excess of the nominal value.

Revaluation reserve

The revaluation reserve relates to the revaluation of property, plant and equipment in prior years.

Section 108 tax credit

Subject to agreement of the Inland Revenue Board, the Company has suffi cient Section 108 tax credit and tax-exempt income to frank all of its retained profi ts at 31 December 2007 if paid out as dividends.

The Malaysian Budget 2008 introduced a single tier company income tax system with effect from year of assessment 2008. As such, the Section 108 tax credit as at 31 December 2007 will be available to the Company until such time the credit is fully utilised or upon expiry of the six- year transitional period on 31 December 2013, whichever is earlier.

10. Deferred tax liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net 2007 2006 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property, plant and equipment

- capital allowance - - (16,964) (17,863) (16,964) (17,863)

- revaluation - - (12,715) (12,916) (12,715) (12,916)

Provisions 5,850 1,666 - - 5,850 1,666

Net tax assets/(liabilities) 5,850 1,666 (29,679) (30,779) (23,829) (29,113)

6 4 A n n u a l R e p o r t 2 0 0 7

11.Payables and accruals Note 2007 2006

RM’000 RM’000

Trade Trade payables 501,088 389,394

Non-trade Other payables and accrued expenses 224,491 167,188 Progress claims by contractors 29,455 42,220 Rental and utility deposits 102,514 78,705 Holding company a 475 423

356,935 288,536 858,023 677,930

Note aThe amount due to holding company, ÆON Co., Ltd., a company incorporated in Japan is unsecured, interest free and repayable on demand.

12.Operating profi t 1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006 RM’000 RM’000

Operating profi t is arrived at after crediting: Gain on disposal of property, plant and equipment 134 34,073 Property management services - Rental income on shopping centre operation 206,006 150,285 - Other property management services income 39,873 27,863

and after charging:

Auditors’ remuneration - statutory audit - KPMG 140 130 - Other services - KPMG 10 35 Amortisation of prepaid lease payment 1,466 1,202 Depreciation 106,604 69,086 Personnel expenses (including key management personnel) - Contributions to Employees Provident Fund 15,825 11,143 - Wages, salaries and others 143,160 97,665 Property, plant and equipment written off 2,562 1,387 Rental expense - land 1,151 941 - buildings 72,004 45,236 - equipment 1,274 475 - fi xtures and fi ttings 198 222 - hostel 36 7

Royalty 16,964 11,181

A n n u a l R e p o r t 2 0 0 7 6 5

13. Key management personnel compensationThe key management personnel compensations are as follows:

1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006 RM’000 RM’000

Directors - Fees 1,121 959 - Remuneration 579 747 - Other short term employee benefi ts (including estimated monetary value of benefi ts-in-kind) 48 57 Total short-term employee benefi ts 1,748 1,763

14. Interest expense 1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006

RM’000 RM’000 Bank overdrafts 9 41 Other borrowings 265 1,921 274 1,962

15. Tax expense 1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006

RM’000 RM’000 Current tax expense - current 57,052 37,663 - under provision in prior year 2,062 -

59,114 37,663

Deferred tax expense - origination and reversal of temporary differences (5,284) (168)

Total tax expense 53,830 37,495

Reconciliation of effective tax expense

Profi t before taxation 159,006 140,741

Tax calculated using Malaysian tax rate of 27%

(31.12.2006 - 27%) 42,932 38,000

Income not subject to tax - (9,170)

Non-deductible expenses 9,037 8,833

Reversal of deferred tax liabilities on crystallisation ofrevaluation reserves of property, plant and equipment (201) (168) 51,768 37,495

Under provision of tax expense in prior year 2,062 -

Tax expense 53,830 37,495

6 6 A n n u a l R e p o r t 2 0 0 7

15. Tax expense (continued) With effect from year of assessment 2007, the corporate tax rate is at 27%. The Malaysian Budget 2008 also announced

the reduction of corporate tax rate to 26% with effect from year of assessment 2008 and to 25% with effect from year of assessment 2009 respectively. Consequently, deferred tax assets and liabilities are measured using these tax rates.

Due to the change of its fi nancial year end from 28 February to 31 December, the Company’s basis year for the year of assessment 2007 is from 1 March 2006 to 31 December 2007. As a result, the statutory tax rate in this fi nancial year is 27%.

16. Basic earnings per ordinary share Basic earnings per share is calculated by dividing the profi t attributable to ordinary shareholders of RM105,176,225

(31.12.2006 - RM103,246,050) by the number of ordinary shares outstanding of 175,500,000 (31.12.2006 - number of shares outstanding of 175,500,000) during the year/period.

17. Dividend Dividend recognised in the current year by the Company is: Sen Total per share amount Date of (net) RM’000 payment 1.1.2007 to 31.12.2007 Final 31.12.2006 ordinary dividend of 16% less 27% income tax 11.7 20,498 24 May 2007 1.3.2006 to 31.12.2006 Final 28.2.2006 ordinary dividend

of 15% less 28% income tax 10.8 18,954 20 July 2006 After the balance sheet date, the following dividend was proposed by the Directors. This dividend will be recognised in

subsequent fi nancial reports upon approval by the shareholders.

Sen Total per share amount (net) RM’000 Final 31.12.2007 ordinary dividend of 17% less 26% income tax 12.6 22,078

Final 31.12.2007 ordinary special tax exempt dividend of 4% 4.0 7,020

18. Segmental reporting Segment information is presented in respect of the Company’s business segment. The primary format, business segments,

is based on the Company’s management and internal reporting structure. There is no segmental analysis by geographical location as the Company’s operations are principally located in Malaysia.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue and income taxes.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment.

Business segments

The Company comprises the following main business segments:

Retailing

Property management services

The operations of a chain of superstores selling clothing, food, household goods and other merchandise.

Shopping centre operation and distribution centre charges earned.

A n n u a l R e p o r t 2 0 0 7 6 7

18. Segmental reporting (continued)

Property Retailing management services Total

1.1.2007 to 1.3.2006 to 1.1.2007 to 1.3.2006 to 1.1.2007 to 1.3.2006 to 31.12.2007 31.12.2006 31.12.2007 31.12.2006 31.12.2007 31.12.2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Business segments

Revenue from external customers 2,640,341 1,763,283 245,879 178,148 2,886,220 1,941,431

Total revenue 2,640,341 1,763,283 245,879 178,148 2,886,220 1,941,431

Operating profi t before

disposal of Kinta City

Shopping Centre 93,571 61,832 63,939 46,366 157,510 108,198

Gain on disposal of Kinta City

Shopping Centre - - - 33,963 - 33,963

Operating profi t after disposal of

Kinta City Shopping Centre 157,510 142,161

Interest expense (274) (1,962)

Interest income 1,770 542

Profi t before taxation 159,006 140,741

Tax expense (53,830) (37,495)

Profi t for the year/period 105,176 103,246

6 8 A n n u a l R e p o r t 2 0 0 7

18. Segmental reporting (continued)

Property Retailing management services Total 2007 2006 2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Segment assets 741,700 601,218 980,774 837,155 1,722,474 1,438,373

Total assets 1,722,474 1,438,373

Segment liabilities (698,971) (525,739) (159,052) (152,191) (858,023) (677,930)

Unallocated liabilities (73,630) (54,300)

Total liabilities (931,653) (732,230)

Capital expenditure 92,667 108,603 144,054 144,259 236,721 252,862

Depreciation 65,016 41,279 41,588 27,807 106,604 69,086

Amortisation of prepaid lease payment - - 1,466 1,202 1,466 1,202

Non- cash expenses other than depreciation 1,574 1,371 988 16 2,562 1,387

19. Operating leases Leases as lessee

Total future minimum lease payments under non-cancellable operating leases are as follows:

2007 2006 RM’000 RM’000 Less than one year 111,523 64,276

Between one and fi ve years 389,818 409,324

More than fi ve years 393,826 471,111

895,167 944,711

The Company leases a number of land and buildings under operating leases.

The leases have initial years ranging from 3 to 25 years, with an option to renew the respective leases for another 3 to 15 years.

20. Capital commitments 2007 2006

RM’000 RM’000 Property, plant and equipment

Contracted but not provided for:

Within one year 341,357 30,622

A n n u a l R e p o r t 2 0 0 7 6 9

21. Related parties Identity of related parties

For the purposes of these fi nancial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common signifi cant infl uence. Related parties may be individuals or other entities. The Company has a related party relationship with its Directors, its holding company and the holding company’s subsidiaries.

Key management personnel are defi ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Company either directly or indirectly. The key management personnel includes all the Directors of the Company, and certain members of senior management of the Company.

Transactions with key management personnel

(i) Key management personnel compensation

Key management personnel compensation is disclosed in note 13.

(ii) Transactions with key management personnel other than compensation

A number of key management personnel, of their related parties, hold positions in other entities that result in them having control or signifi cant infl uence over the fi nancial or operating policies of these entities.

Transaction value Balance outstanding 1.1.2007 to 1.3.2006 to 2007 2006 31.12.2007 31.12.2006

Director RM’000 RM’000 RM’000 RM’000

With companies in which Dato’ Abdullah bin Mohd Yusof and Datuk Ramli bin Ibrahim have interests: Management fee receivable 26 43 - 5 Rental income receivable 297 332 - - With companies in which Dato’ Abdullah bin Mohd Yusof has interest: Legal fees payable (11) (24) - - Other related party transactions Holding company Royalty expenses (16,964) (11,181) (16,964) (11,181) Holding company’s subsidiaries Purchase of merchandise (1,985) (1,118) (650) (125) Consultation fees (472) (300) (123) (52) Related company Sales through easy payment scheme fi nancing 7,097 4,211 832 816 Rental income 1,335 765 - - Sales through AEON credit card 40,327 35,466 588 653 Convertible J-card point income 310 378 - - Credit card sales commission expenses (588) (515) - -

The terms and conditions for the above transactions are based on normal trade terms and are to be settled in cash. None of the balances is secured.

7 0 A n n u a l R e p o r t 2 0 0 7

22. Financial instruments Exposure to credit risk, foreign currency risk, liquidity risk and interest rate risk arises in the normal course of the Company’s

business. The Company’s policies for managing each of these risks are summarised below.

Credit risk The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on shopping centre tenants and the Company requires all tenants to place adequate security deposits as stipulated under the tenancy agreement. At balance sheet date, the Company does not have any major concentration of credit risk on its shopping centre tenants. The maximum exposure to credit risk for the Company was represented by the carrying amount of each fi nancial asset.

Foreign currency risk The Company does not have any signifi cant exposure to foreign currency risk as its transactions and balances are

substantially denominated in Ringgit Malaysia.

Liquidity risk The Company monitors and maintains a level of cash and cash equivalents deemed adequate by management to fi nance

the Company’s operations and to mitigate the effects of fl uctuations in cash fl ows.

Interest rate risk The Company’s exposure to interest rate risk relates only to its short term borrowings such as overdraft and trade fi nancing facilities. Interest-earning fi nancial assets are mainly deposits placed with fi nancial institutions that generate interest income for the Company.

The management monitors the prevailing interest rates at regular intervals, and maintains an appropriate level of cash and cash equivalents to fi nance the working capital requirements and mitigate the effects of fl uctuation in cash fl ow and liquidity positions of the Company.

In view of the competitive rates that are available from the prevailing banking facilities granted to the Company to fi nance its working capital requirements and the prevailing low interest rate scenario, the interest rate risk is not expected to have a material impact on the Company.

Effective interest rates and repricing analysis

In respect of interest-earning fi nancial assets, the following table indicates their effective interest rate at the balance sheet date and the years in which they reprice or mature, whichever is earlier:

2007 2006 Effective Effective interest interest rate per Within rate per Within annum Total 1 year annum Total 1 year % RM’000 RM’000 % RM’000 RM’000

Floating rate fi nancial assets

Deposits placed with

licensed fi nancial

institutions 3.2 21,200 21,200 - - -

A n n u a l R e p o r t 2 0 0 7 7 1

22. Financial instruments (continued) Fair values

In respect of cash and cash equivalents, trade and other receivables, trade and other payables, the carrying amounts approximate fair value due to the relatively short term nature of these fi nancial instruments.

The aggregate fair values of other fi nancial assets carried on the balance sheet are shown below:

2007 2006 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000

Financial assets

Long-term investments:

Investment in quoted shares 1,030 10,010 - -

Investment in unquoted shares - - 1,030 -

Other investment 45 45 45 42

Estimation of fair values

Fair value of quoted shares is based on quoted market prices at the balance sheet date without any deduction for transaction costs.

In previous fi nancial period, it was not practicable to estimate the fair value of an investment in an unquoted company due to the lack of compensation quoted market prices and the inability to estimate fair value without incurring excessive costs. That investment was carried at its original cost of RM1,030,000 in the balance sheet. At 31.12.2006, the share of the net tangible assets in this unquoted company was RM2,647,302.

23. Signifi cant events during the fi nancial yeari. On 13 March 2007, the Company entered into a Sale and Purchase Agreement with a third party for the

acquisition of a piece of leasehold land located in the Mukim of Ulu Kelang, District of Kuala Lumpur at a purchase price of RM53.69 million for the purpose of constructing a shopping centre, of which 70% has been paid during the fi nancial year.

ii. On 29 October 2007, the Company entered into a Sale and Purchase Agreement with a third party for the acquisition of a piece of freehold land located in the Mukim of Pulai, District of Johor Bahru, State of Johor at a purchase price of RM106.97 million for the purpose of constructing a shopping centre. The acquisition of freehold land has been completed and fully paid during the fi nancial year.

7 2 A n n u a l R e p o r t 2 0 0 7

pursuant to Section 169(15) of the Companies Act, 1965In the opinion of the Directors, the fi nancial statements set out on pages 48 to 71 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Company at 31 December 2007 and of the results of its operations and cash fl ows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

Dato’ Abdullah bin Mohd Yusof

Nagahisa Oyama

Kuala Lumpur,

Date: 21 February 2008

pursuant to Section 169(16) of the Companies Act, 1965I, Poh Ying Loo, the offi cer primarily responsible for the fi nancial management of AEON CO. (M) BHD., do solemnly and sincerely declare that the fi nancial statements set out on pages 48 to 71 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 21 February 2008.

Poh Ying Loo

Before me:

Commissioner for OathsKuala Lumpur

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

A n n u a l R e p o r t 2 0 0 7 7 3

to the members of AEON CO. (M) BHD.We have audited the fi nancial statements set out on pages 48 to 71. The preparation of the fi nancial statements is the responsibility of the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on the fi nancial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the contents of this report.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the Directors, as well as evaluating the overall fi nancial statements presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the fi nancial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:

i) the state of affairs of the Company at 31 December 2007 and of the results of its operations and cash fl ows for the year ended on that date; and

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

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

KPMG Desa Megat & Co.

Firm Number: AF 0759

Chartered Accountants

Peter Ho Kok Wai

Partner

Approval Number: 1745/12/09(J)

Kuala Lumpur,

Date: 21 February 2008

REPORT OF THE AUDITORS

7 4 A n n u a l R e p o r t 2 0 0 7

ANALYSIS OF SHAREHOLDINGS as at 31 March 2008

Authorised Share Capital : RM500,000,000

Paid-up Share Capital : RM175,500,000

Class of Shares : Ordinary Share of RM1 each

Voting Rights : 1 vote per Ordinary Share

Size of No. of % of No. of % ofShareholding Shareholders/ Shareholders/ Shares Held Issued Capital Depositors Depositors

1 - 99 97 8.75 1,426 0.00

100 - 1,000 281 25.34 198,014 0.11

1,001 - 10,000 583 52.57 2,096,660 1.19

10,001 - 100,000 90 8.11 2,817,600 1.61

100,001 - 8,774,999 56 5.05 70,634,877 40.25

8,775,000 and above 2 0.18 99,751,423 56.84

Total 1,109 100.00 175,500,000 100.00

No. Name No. of Shares

Direct Interest % Indirect Interest %

1. ÆON Co., Ltd. 89,505,000 51.00 - -

2. Aberdeen Asset Management PLC 15,350,900 8.75 - -

3. Aberdeen Asset Management Asia Limited 11,555,400 6.58 - -

No. Name No. of Shares

Direct Interest % Indirect Interest %

1. Dato’ Abdullah bin Mohd Yusof 268,000 0.15 786,900 0.45

2. Datuk Ramli bin Ibrahim - - 280,000 0.16

3. Naruhito Kuroda 16,000 0.01 - -

DIRECTORS’ INTERESTS

SUBSTANTIAL SHAREHOLDINGS as per Register of Substantial Shareholders

A n n u a l R e p o r t 2 0 0 7 7 5

No. Name of Shareholders No. of Shares % of Share Held

1 ÆON Co., Ltd 89,505,000 51.00

2 HSBC Nominees (Asing) Sdn Bhd 10,246,423 5.84 BBH (LUX) SCA for Genesis Smaller Companies

3 Amanah Raya Nominees (Tempatan) Sdn Bhd 7,000,000 3.99 Skim Amanah Saham Bumiputera

4 HSBC Nominees (Asing) Sdn Bhd 6,000,000 3.42 Exempt An for BNP Paribas Securities Services (Convert in USD)

5 Amanah Raya Nominees (Tempatan) Sdn Bhd 5,478,800 3.12 Amanah Saham Wawasan 2020

6 Cartaban Nominees (Asing) Sdn Bhd 4,595,900 2.62 SSBT Fund D26J for Emerging Markets Global Small Capitalization Fund (TEMMUF)

7 Cartaban Nominees (Asing) Sdn Bhd 2,779,100 1.58 State Street London Fund XCB9 for Aberdeen Asian Smaller Companies Investment Trust PLC

8 HSBC Nominees (Tempatan) Sdn Bhd 2,645,300 1.51 Nomura Asset MGMT Malaysia for Employees Provident Fund

9 HSBC Nominees (Asing) Sdn Bhd 2,540,199 1.45 BBH and Co Boston for Smaller Companies Portfolio (GEMOFL)

10 Employees Provident Fund Board 2,438,300 1.39

11 HSBC Nominees (Asing) Sdn Bhd 2,291,300 1.30 HSBC-FS for Aberdeen Malaysia Equity Fund

12 HSBC Nominees (Asing) Sdn Bhd 2,130,000 1.21 HSBC-FS I for Apollo Asia Fund Ltd

13 HSBC Nominees (Asing) Sdn Bhd 2,067,878 1.18 Exempt An for JPMorgan Chase Bank, National Association (JERSEY)

14 HSBC Nominees (Asing) Sdn Bhd 2,012,300 1.15 Exempt An for JPMorgan Chase Bank, National Association (Nordea Bank S.A)

15 Syarikat Maluri Sdn Bhd 1,865,000 1.06

LIST OF 30 LARGEST SHAREHOLDERS as at 31 March 2008

7 6 A n n u a l R e p o r t 2 0 0 7

No. Name of Shareholders No. of Shares % of Share Held

16 Mayban Nominees (Tempatan) Sdn Bhd 1,649,500 0.94 Aberdeen Asset Management Sdn Bhd for The Employees’ Provident Fund Board (250416)

17 Permodalan Nasional Berhad 1,616,200 0.92

18 Malaysia Nominees (Tempatan) Sendirian Berhad 1,532,900 0.87 Great Eastern Life Assurance (Malaysia) Berhad (Par 1)

19 Cartaban Nominees (Asing) Sdn Bhd 1,309,100 0.75 Government of Singapore Investment Corporation Pte Ltd for Government of Singapore (C)

20 AMSEC Nominees (Tempatan) Sdn Bhd 1,217,000 0.69 Aberdeen Asset Management Sdn Bhd for Tenaga Nasional Berhad Retirement Benefi t Trust Fund (FM-Aberdeen)

21 Takuya Okada 1,200,000 0.68

22 Roshayati binti Basir 1,155,000 0.66

23 Rozilawati binti Haji Basir 1,155,000 0.66

24 HSBC Nominees (Asing) Sdn Bhd 1,100,000 0.63 Exempt An For JPMorgan Chase Bank, National Association (Norges Bank)

25 HSBC Nominees (Asing) Sdn Bhd 1,000,500 0.57 Exempt An For JPMorgan Chase Bank, National Association (U.K.)

26 AMSEC Nominees (Tempatan) Sdn Bhd 976,400 0.56 Amtrustee Berhad for CIMB Islamic Dali Equity Growth Fund (UT-CIMB-DALI)

27 HSBC Nominees (Asing) Sdn Bhd 940,000 0.53 Exempt An for Danske Bank A/S (Client Holdings)

28 HSBC Nominees (Asing) Sdn Bhd 841,900 0.48 Exempt An for Morgan Stanley & Co. International PLC (IPB Client Acct)

29 Status Resources Sdn Bhd 796,900 0.45

30 MCIS Zurich Insurance Berhad 730,200 0.42

Total 160,816,100 91.63

LIST OF 30 LARGEST SHAREHOLDERS (continued) as at 31 March 2008

A n n u a l R e p o r t 2 0 0 7 7 7

Land/ Date of Approx. Tenure Net book Built-up Acquisition (A)/ age of (Year of value as at Description/ area Completion (C)/ building expiry for 31/12/2007Location Existing use (sq ft) Revaluation (R) (year) leasehold) (RM’000) Details of AEON’s properties as at 31 December 2007 are set out below:Lot 7041, Existing two-storey 200,316 February 1995 (R) 16 - 43,445Mukim of Bukit Baru, shopping centre District of Extention/Renovation 179,989 9 ½ Melaka Tengah, Melaka.

Lot 23551, Two-storey shopping 666,694 February 1995 (R) 15 ½ - 47,430Mukim of Setapak, centre and three-storey District and State car park of Wilayah Persekutuan.

Lot PT 21441, Two-storey shopping 691,414 October 1995 (C) 12 - 48,876Mukim of Kapar, centre and District of Klang, two-storey car park Selangor.

Lot 49045, Freehold land/ 377,490/ April 2002 (A)/ 5 ½ Freehold 28,354Mukim of Pulai, Two-storey shopping 483,299 August 2002 (C) District of Johor centre including Bahru, Johor. covered car park

Lot 4086, Kawasan A, Two-storey shopping 906,497 January 2004 (C) 4 - 48,958Mukim Batu, centre and two-storey Daerah Kuala Lumpur, car park Wilayah Persekutuan.

Lot PTD 114179, Freehold land/ 1,308,035/ March 2004 (A) 2 Freehold 161,374Mukim of Tebrau, Three-storey shopping 1,468,693 January 2006 (C) District of Johor centre and one-storey Bahru, Johor. car park

Lot 3144, Freehold land/ 113,451/ April 2004 (A) 1 Freehold 67,927Mukim of Cheras, Two-storey shopping 893,819 December 2006 (C) District of Ulu Langat, centre and two-storey Selangor. car park

Lot PTD 90606, Freehold land 1,645,697 October 2007 (A) - Freehold 108,306Mukim of Pulai, District of Johor Bahru, Johor. Details of AEON’s prepaid lease payments as at 31 December 2007 are set out below:Lot 7041, Leasehold land 436,036 February 1995 (R) - 99 years 13,241Mukim of Bukit Baru, expiring on District of 19/12/2089 Melaka Tengah, Melaka. Lot 23551, Leasehold land 368,516 February 1995 (R) - 95 years 38,969Mukim of Setapak, expiring on District and State 28/3/2085 of Wilayah Persekutuan. Lot PT 21441, Leasehold land 643,753 June 1994 (A) - 99 years 16,548Mukim of Kapar, expiring on District of Klang, 9/5/2093 Selangor. Lot 4086, Kawasan A, Leasehold land 410,815 January 2004 (C) - 99 years 40,782Mukim Batu, expiring on Daerah Kuala Lumpur, April 2101 Wilayah Persekutuan. Lot PT 41977, Leasehold land 550,910 April 2004 (A) - 99 years 16,825Mukim of Cheras, expiring on District of Ulu Langat, 12/4/2103 Selangor.

PARTICULARS OF PROPERTIES

7 8 A n n u a l R e p o r t 2 0 0 7

.

NORTHERN

CENTRAL

SOUTHERN

JUSCO IPOHNo.2, Jalan Teh Lean Swee, Off Jalan Sultan Azlan Shah Utara, 31400 Ipoh, Perak Darul Ridzuan. Tel: 05-549 9633

KINTA CITY SHOPPING CENTRE Tel: 05-548 4668

JUSCO TAMAN MALURIJalan Jejaka, Taman Maluri,Cheras, 55100 Kuala Lumpur. Tel: 03-9285 5222

JUSCO TAMAN MALURI SHOPPING CENTRE Tel: 03-9200 1004

JUSCO MID VALLEYAT3 Mid Valley Megamall, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. Tel:03-2284 4800

JUSCO BANDAR BARU KLANGPersiaran Bukit Raja 2,Bandar Baru Klang,41150 Klang,Selangor Darul Ehsan.Tel: 03-3343 9366

BUKIT RAJASHOPPING CENTRE Tel: 03-3343 2166

JUSCO MELAKALeboh Ayer Keroh, 75450 Melaka. Tel: 06-232 4899

JUSCO MELAKA SHOPPING CENTRE Tel: 06-233 2988

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

ALPHA ANGLESHOPPING CENTRE Tel: 03-4149 5288

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

JUSCO BANDAR UTAMANo. 1, Leboh Bandar Utama, Bandar Utama, Damansara, 47800 Petaling Jaya, Selangor Darul Ehsan.Tel: 03-7726 6266

1 UTAMASHOPPING CENTRE Tel: 03-7726 6033

JUSCO METRO PRIMANo. 1, Jalan Metro Prima, 52100 Kepong, Kuala Lumpur.Tel: 03-6257 2121

JUSCO METRO PRIMASHOPPING CENTRE Tel: 03-6259 1122

JUSCO TAMANUNIVERSITINo. 4, Jalan Pendidikan, Taman Universiti, 81300 Skudai, Johor Darul Takzim.Tel: 07-521 8000

JUSCO TAMAN UNIVERSITI SHOPPING CENTRE Tel: 07-520 8700

JUSCO STORES, SHOPPING CENTRES & MAXVALU

MELAKA

KUALA LUMPUR

IPOH

PULAU PINANG

KUANTAN

JOHOR BAHRU

MELAKA

KUALA LUMPUR

IPOH

PULAU PINANG

KUANTAN

JOHOR BAHRU

MELAKA

KUALA LUMPUR

IPOH

PULAU PINANG

KUANTAN

JOHOR BAHRU

A n n u a l R e p o r t 2 0 0 7 7 9

JUSCO QUEENSBAY1F-61, Queensbay Mall100, Persiaran Bayan Indah,11900 Bayan Lepas,Pulau Pinang.Tel: 04-641 3822

PASAR RAYA MAXVALUDAMANSARA DAMAI,(formerly known as PASAR RAYA D’HATI Damansara Damai)

C-1-05, Park Avenue, Jalan PJU 10/1, PJU 10, Damansara Damai, 47830Petaling Jaya, Selangor Darul Ehsan.Tel: 03-6157 1432

JUSCO BANDAR SUNWAYLg1.111, Sunway Pyramid,No.3, Jalan PJS 11/15,Bandar Sunway, 46150 Petaling Jaya,Selangor Darul Ehsan.Tel: 03-5637 3720

PASAR RAYA MAXVALUPEARL POINT,(formerly known as PASAR RAYA D’HATI Pearl Point)

Lot 1.0.49, Ground Floor,Pearl Point Shopping Mall,Jalan Klang Lama, 58000 Kuala Lumpur.Tel: 03-7982 0422

JUSCO BUKIT TINGGIMezzanine Floor, No.1, Persiaran Batu Nilam 1/KS 6, Bandar Bukit Tinggi 2, 41200 Klang, Selangor Darul Ehsan.Tel: 03-3326 2330

AEON BUKIT TINGGI SHOPPING CENTRETel: 03-3326 2370

PASAR RAYA MAXVALUAMPANGPetronas Service Station, Jalan Kolam Ayer Lama, Taman Dato’ Ahmad Razali, 68000 Ampang Selangor.Tel: 03-4252 1601

PASAR RAYA MAXVALUDESA PARKCITYLot No. GF22, Ground Floor,The Waterfront @ Desa ParkCity,5, Persiaran Residen, Desa ParkCity, 52200 Kuala Lumpur.Tel: 03-6280 7790

PASAR RAYA MAXVALUKOTA KEMUNING,(formerly known as PASAR RAYA D’HATI Kota Kemuning)

No. 1-2G, Jalan Anggerik Vanilla T31/T, Kota Kemuning, Seksyen 31, 40460 Shah Alam, Selangor.Tel: 03-5122 1669

JUSCO CHERASSELATAN Aras Mezzanine, Lebuh Tun Hussien Onn,43200 Balakong,Selangor Darul Ehsan.Tel: 03-9080 3018

AEON CHERAS SELATAN SHOPPING CENTRETel: 03-9080 3498

JUSCO TAMAN EQUINE No. 2, Jalan Equine,Taman Equine, Bandar Putra Permai,43300 Seri Kembangan, Selangor Darul Ehsan.Tel: 03-8941 3700

AEON TAMAN EQUINE SHOPPING CENTRETel: 03-7545 2700

JUSCO SEREMBAN 2112, Persiaran S2 B1,Seremban 2, 70300 Seremban,Negeri Sembilan Darul Khusus.Tel: 06-601 5633

JUSCO SEREMBAN 2SHOPPING CENTRE Tel: 06-601 5618

JUSCO TEBRAU CITYNo 1, Jalan Desa Tebrau,Taman Desa Tebrau,81100 Johor Bahru, Johor Darul Takzim.Tel: 07-3511 110

AEON TEBRAU CITY SHOPPING CENTRE Tel: 07-3522 220

JUSCO PERMAS JAYANo. 1, Jalan Permas Utara, Bandar Baru Permas Jaya, 81750 Johor Bahru, Johor Darul Takzim.Tel: 07-386 8900

JUSCO PERMAS JAYASHOPPING CENTRE Tel: 07-386 0600

8 0 A n n u a l R e p o r t 2 0 0 7

1984 SEPTEMBER – JAYA JUSCO STORES SDN BHD established, in response to a request from former Prime Minister Tun Dr Mahathir bin Mohamad, to help modernise the retailing industry in Malaysia.

1985 JUNE – The fi rst pilot store, JAYA JUSCO Dayabumi, opened. DECEMBER – The second pilot store, JAYA JUSCO Taman Tun, opened.

1989 JUNE – JAYA JUSCO Dayabumi closed. OCTOBER – The fi rst Superstore, JAYA JUSCO Taman Maluri, opened.

1990 JUNE – “Japan Management Training Programme” begun. NOVEMBER – 28 Malaysian students invited to Japan as “Ambassadors” through the ÆONÆON “1% Club” Programme.

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

1992 APRIL – JUSCO Wangsa Maju (Alpha Angle Shopping Centre), the fi rst Shopping Centre, opened.

1994 AUGUST – The Distribution Centre begun operations. OCTOBER – Japanese Trainee Programme begun.

1995 JUNE – JAYA JUSCO Taman Tun Dr. Ismail closed. AUGUST – JUSCO Bandar Utama (1 Utama Shopping Centre) opened. OCTOBER – JUSCO Bandar Baru Klang (Bukit Raja Shopping Centre) opened.

1996 DECEMBER – JAYA JUSCO STORES BHD was listed on the Main Board of the KLSE.

1997 AUGUST – JUSCO Ipoh (Kinta City Shopping Centre) opened.

1998 DECEMBER – JUSCO Melaka Superstore was upgraded to a Shopping Centre.

1999 DECEMBER – JUSCO Mid Valley opened.

2000 DECEMBER – JUSCO Taman Maluri Superstore was upgraded to a Shopping Centre. – JUSCO Bandar Puchong opened.

2001 OCTOBER – Launch of WAOH Charity Fund / JUSCO Fest / JUSCO’s 17th Anniversary. NOVEMBER – 22 Malaysian students and 2 former participants from the 1990 batch were invited to Japan as ‘Ambassadors’ through the ÆONÆON “1% Club” Programme.

2002 APRIL – Establishment of JUSCO-OUM Retail Centre in Alpha Angle Shopping Centre, at Wangsa Maju. JULY – JUSCO Taman Universiti (JUSCO Taman University Shopping Centre) opened, Japan Management Training Programme reactivated.

2003 JULY – WAOH Charity Bazaar. AUGUST – Smart Wonder World opened in JUSCO Taman Maluri. OCTOBER – JUSCO Home Centre opened in 1 Utama Shopping Centre. DECEMBER – 3,000 seedlings were planted in the vicinity of the JUSCO Permas Jaya store as part of ÆONÆON’s environmental campaign, ‘Planting Seeds of Growth’. – JUSCO Permas Jaya (JUSCO Permas Jaya Shopping Centre) opened.

2004 JANUARY – JUSCO Metro Prima Tree Planting Ceremony was held. 2,000 seedlings were planted. – JUSCO Metro Prima (JUSCO Metro Prima Shopping Centre) opened. JUNE – “With All Our Hearts” Charity Fund offi cially registered as the “With All Our Hearts” Malaysian JUSCO Foundation.

MILESTONES

A n n u a l R e p o r t 2 0 0 7 8 1

2004 SEPTEMBER – JAYA JUSCO STORES BHD. offi cially changed name to AEON CO. (M) BHD. – JUSCO celebrated 20th Anniversary in Malaysia with Gala Dinner. – Offi cial launch of “With All Our Hearts” Malaysian JUSCO Foundation. – 30,000 seedlings planted in the Malaysia-Japan Friendship Forest, AEON Woodland, Paya Indah Wetlands. AUGUST – Company authorised share capital increased from RM100,000,000 to RM500,000,000. OCTOBER – Completed Bonus Issue (1:1) for 87,750,000 new Ordinary Shares.

2005 MARCH – AEON CO. (M) BHD. received a certifi cate of appreciation from the Prime Minister for its tree planting activities. JULY – WAOH Charity Gala Dinner was held. SEPTEMBER – JUSCO Seremban 2 Tree Planting ceremony was held. 3,300 seedlings were planted. – JUSCO Seremban 2 (JUSCO Seremban 2 Shopping Centre) opened. OCTOBER – The fi rst PASAR RAYA J-One Supermarket in Damansara Damai. DECEMBER – AEON Tebrau City Tree Planting ceremony was held. 6,000 seedlings were planted.

2006 JANUARY – JUSCO Tebrau City (AEON Tebrau City Shopping Centre) opened. APRIL – Change of fi nancial year end from February to December. JUNE – AEON Taman Equine Tree Planting Ceremony held. 4,000 seedlings were planted. JULY – JUSCO Taman Equine (AEON Taman Equine Shopping Centre) opened. – PASAR RAYA J-One supermarket in Pearl Point opened. SEPTEMBER – Completion of Kinta City Shopping Centre sales and lease back. NOVEMBER – AEON Cheras Selatan Tree Planting Ceremony held. 4,000 seedlings were planted. – WAOH Charity Gala Dinner held. DECEMBER – JUSCO Queensbay opened. – JUSCO Cheras Selatan (AEON Cheras Selatan Shopping Centre) opened.

2007 JANUARY – Pasar Raya D’HATI name change ceremony (from J-One to D’HATI) held at Pearl Point Shopping Mall. JUNE – Replanting of trees at AEON Woodland. AUGUST – WAOH Charity Gala Dinner 2007 held. SEPTEMBER – Pasar Raya D’HATI Kota Kemuning offi cially opened. – JUSCO Bandar Sunway Store opened. OCTOBER – AEON Bukit Tinggi Shopping Centre Tree Planting Ceremony held. 5,085 seedlings were planted. DECEMBER – Pasar Raya MaxValu Desa ParkCity and Pasar Raya MaxValu Ampang offi cially opened. – JUSCO Bukit Tinggi (AEON Bukit Tinggi Shopping Centre) opened.

MILESTONES

8 2 A n n u a l R e p o r t 2 0 0 7

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twenty-Third Annual General Meeting of AEON CO. (M) BHD. will be held at Prince 1, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4, Jalan Conlay, 50450 Kuala Lumpur on Monday, 26 May 2008 at 10.30a.m for the following purposes:-

AGENDAAs Ordinary Business1. To receive and adopt the Audited Financial Statements for the fi nancial year ended 31

December 2007 together with the Reports of the Directors and Auditors thereon.

2. To declare a First and Final Dividend of 17% less 26% income tax and a special tax-exempt dividend of 4% in respect of the fi nancial year ended 31 December 2007.

3. To approve the payment of Directors’ Fees for the fi nancial year ended 31 December 2007.

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

i) Dato’ Abdullah bin Mohd Yusof

ii) Mr. Tsutomu Kajita

iii) Mr. Nagahisa Oyama

iv) Datuk Ramli bin Ibrahim

v) Brig. Jen (B) Dato’ Mohamed Idris bin Saman

vi) Datuk Zawawi bin Mahmuddin

vii) Mr. Naruhito Kuroda

5. To re-appoint Dato’ Chew Kong Seng as Director pursuant to Section 129 (6) of the Companies Act, 1965.

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

As Special BusinessTo consider and, if thought fi t, to pass the following ordinary resolution :-

7. PROPOSED RENEWAL OF EXISTING SHAREHOLDERS’ MANDATE FOR THE RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE”)

“THAT approval be and is hereby given to the Company, to enter and give effect to the recurrent related party transactions of a revenue or trading nature (hereinafter to be referred to as “Recurrent Transactions”) with the related parties as stated in Section 2.2 of the Circular to Shareholders dated 5 May 2008 which are necessary for the Company’s day-to-day operations subject further to the following:-

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

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

Ordinary Resolution 13

A n n u a l R e p o r t 2 0 0 7 8 3

As Special Business (continued)(ii) the approval is subject to annual renewal and shall only continue to be in force until:-

(a) the conclusion of the next Annual General Meeting of the Company following the forthcoming Annual General Meeting of the Company at which the Proposed Renewal of Shareholders’ Mandate is approved, at which time it will lapse unless by a resolution passed at the Annual General Meeting the mandate is again renewed;

(b) the expiration of the period within which the next Annual General Meeting of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

(c) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier; and

iii) the disclosure of the breakdown of the aggregate value of the Recurrent Transactions conducted pursuant to the Proposed Renewal of Shareholders’ Mandate in the Annual Report of the Company based on the following information:-

(a) the type of Recurrent Transactions entered into; and

(b) the names of the related parties involved in each type of the Recurrent Transactions entered into and their relationship with the Company.

AND THAT the Directors of the Company be and are hereby authorised to do all acts and things to give full effect to the Recurrent Transactions contemplated and/or authorised by this resolution, as the Directors of the Company, in their absolute discretion, deem fi t.”

8 4 A n n u a l R e p o r t 2 0 0 7

NOTICE IS HEREBY GIVEN THAT, subject to the approval of shareholders at the Twenty-Third Annual General Meeting, a fi rst and fi nal dividend of 17% less 26% income tax and a special tax-exempt dividend of 4% in respect of the fi nancial year ended 31 December 2007 will be paid to shareholders on 26 June 2008. The entitlement date for the said dividend shall be 6 June 2008.

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

(a) Shares transferred to the Depositor’s securities account before 4:00 p.m. on 6 June 2008 in respect of transfers.

(b) Shares bought on Bursa Malaysia Securities Berhad on cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

TAI YIT CHAN (MAICSA 7009143)Secretary

Kuala LumpurDate: 5 May 2008

NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 (“the Act”) 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 specifi es the proportions of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 3rd Floor, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur not less than 48 hours before the time set for holding the meeting.

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

6. Explanatory Note on the Special Business

Ordinary Resolution 13 on the Proposed Renewal of Shareholders’ Mandate

The Ordinary Resolution 13 proposed, if passed, will empower the Directors from the date of the Twenty-Third Annual General Meeting, to deal with the related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for the Company’s day-to-day operations. These recurrent related party transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and not to the detriment of the minority shareholders. This authority unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company and subject always to provision (ii) of the resolution. The details of the recurrent related party transactions are set out in the Circular to the Shareholders dated 5 May 2008, which is despatched together with this Annual Report.

NOTICE OF DIVIDEND PAYMENT

STATEMENT ACCOMPANYING NOTICE OFTWENTY-THIRD ANNUAL GENERAL MEETING

Pursuant to the Paragraph 8.28(2) of the Bursa Securities Listing Requirements appended hereunder is:a) Further details of Directors standing for re-election

Details of Directors seeking for re-election or re-appointment are set out in Directors’ Profi les appearing on pages 21 and 22 of the Annual Report for fi nancial year ended 31 December 2007.

PROXY FORM

I/We, .........................................................................................................(name of shareholder as per NRIC, in capital letters) IC No./ID No./Company No…..…………………………………………………..(new) ……………………………………………..(old) of………………………………………………………..….........................................................................................(full address) being a member(s) of the abovenamed Company, hereby appoint……………………………………....................................(name of proxy as per NRIC, in capital letters) IC No. …………………………………………….. (new)……………………………… (old) of ………………………………………………………………………….................................................................… (full address) or failing him/her ……………………………………………………………………………… (name of proxy as per NRIC, in capital letters) IC No.………………………………………………… (new) ………………………………………………… (old) of …………………………………………………………………………………………………………………………………………………………………………… (full address) as my/our proxy to vote for me/us and on my/our behalf at the Twenty-Third Annual General Meeting of the Company, to be held at Prince 1, Level 3, Prince Hotel & Residence Kuala Lumpur, No. 4, Jalan Conlay, 50450 Kuala Lumpur on Monday, 26 May 2008 at 10.30 a.m, and at any adjournment thereat.

My/our proxy is to vote as indicated below:

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

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

Signature of Shareholder or Common Seal

Dated this ............. day of ................................ 2008

NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 (“the Act”) 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 specifi es the proportions of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 3rd Floor, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur not less than 48 hours before the time set for holding the meeting.

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

AEON CO. (M) BHD. (126926-H)(Incorporated in Malaysia)

For appointment of two proxies, percentage of shareholdings to be represented by the proxies:

No. of shares PercentageProxy 1 %

Proxy 2 %

Total 100%

No. Resolution For Against

ORDINARY BUSINESS

Ordinary Resolution 1 Adoption of Audited Financial Statements and Reports for the fi nancial year ended 31 December 2007 Ordinary Resolution 2 Declaration of a fi rst and fi nal dividend of 17% less 26% income tax and a special tax-exempt dividend of 4% in respect of the fi nancial year ended 31 December 2007. Ordinary Resolution 3 Approval of Directors’ Fees for the fi nancial year ended 31 December 2007 Ordianry Resolution 4 Re-election of Dato’ Abdullah bin Mohd Yusof Ordinary Resolution 5 Re-election of Mr. Tsutomu Kajita Ordinary Resolution 6 Re-election of Mr. Nagahisa Oyama Ordinary Resolution 7 Re-election of Datuk Ramli bin Ibrahim Ordinary Resolution 8 Re-election of Brig. Jen (B) Dato’ Mohamed Idris bin Saman Ordinary Resolution 9 Re-election of Datuk Zawawi bin Mahmuddin Ordinary Resolution 10 Re-election of Mr. Naruhito Kuroda Ordinary Resolution 11 Re-appointmeent of Dato’ Chew Kong Seng as Director pursuant to Section 129 (6) of the Companies Act, 1965 Ordinary Resolution 12 Re-appointment of Messrs KPMG Desa Megat & Co.

SPECIAL BUSINESS

Ordinary Resolution 13 Proposed Renewal of the Existing Shareholders’ Mandate for the Recurrent Related Party Transactions of a Revenue or Trading Nature

No. of Shares

CDS account No.

Place StampHere

The Company Secretary:AEON CO. (M) BHD. (Company No. 126926-H)

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

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