jaya jusco stores bhd - aeon co. (m)...

J A Y A J U S C O S T O R E S B H D ( 1 2 6 9 2 6 - H )

THE BEAUTY OF NETWORKSA leaf exemplifies the genius of a tree. Magnified, you see a network of veins, that, though

intricate, make perfect sense and beauty. Here is the strength and sustenance of the plant, the

veins channelling commodities from the leaves to the heart, and also supplying vital nutrients

from roots and stem to the leaf cells.

Just like a healthy tree, the JUSCO network has grown over the years to include stores

all over Malaysia. Together, all the stores support each other, enhancing and strengthening

the image of JUSCO, making us a force to be reckoned with in the world of retail. In the

following years, we promise JUSCO will continue to grow with you, the nation, just as we

have in the past.

C o v e r R a t i o n a l e

Our customer service, being one of our pillarsof excellence, contributes to JUSCO’s success. We are dedicated to serving ourcustomers with the very best, giving themevery reason to enjoy shopping at JUSCO.


T a b l e o f C o n t e n t s

4 WITH ALL OUR HEARTS (WAOH)6 AEON’S CORPORATE COMMITMENT8 SPREADING OUR WINGS: OUR NEW STORES9 EXPANDING THE FRONTIERS OF OUR BUSINESS10 J CARD: EXCLUSIVE REWARDS FOR CUSTOMERS12 JUSCO - OUM RETAIL CENTER AND HUMAN RESOURCE

DEVELOPMENT ACTIVITIES

14 Introduction15 Corporate Information16 JAYA JUSCO Stores Bhd Share Price17 Five Years Financial Highlights19 Board of Directors20 Directors’ Profiles23 Senior Management24 Chairman’s Statement26 Review of Operations

CORPORATE GOVERNANCE32 Statement of Corporate Governance36 Terms of Reference of Audit Committee38 The Audit Committee39 Statement of Internal Control40 Other Information

FINANCIAL STATEMENTS42 Directors’ Report46 Balance Sheet47 Income Statement48 Statement of Changes in Equity49 Cash Flow Statement50 Notes to the Financial Statements69 Statement by Directors

Statutory Declaration70 Report of the Auditors

OTHERS71 Analysis of Shareholdings72 List of 30 Largest Shareholders74 Particulars of Properties75 JAYA JUSCO Stores Bhd Directory76 Milestones77 Notice of Annual General Meeting79 Notice of Dividend Payment80 Statement Accompanying

Notice of Annual General Meeting81 Proxy Form

4


Since the inception of the With All Our Hearts (WAOH) Charity Fund in 2001, the staff at Jaya Jusco Stores Bhd. haveworked wholeheartedly to make a difference in Malaysian society through the fund. With a mission to benefit deservingMalaysian children and youth, various fund-raising activities and events have been implemented through the years,notably with the support of our WAOH Ambassador, Siti Nurhaliza.

WAOH Charity Fund Drive at our new JUSCO Permas Jaya Store waslaunched by Y.A.M Sofiah Zarith Binti Almarhum Sultan Idris Shah. Theevent was also graced by the presence of WAOH Ambassador SitiNurhaliza who made a short speech and sang a couple of her latest songs,much to the delight of the invited guests and shoppers. From 29 May to20 July 2003, JUSCO hosted a wide variety of events, aimed at raising asmuch funds as possible.

One of these was a record-breaking event – Jaya Jusco Stores Bhd. madean entry in the Malaysian Book of Records with the Biggest Sushi. Thenew record for Biggest Sushi is now 1.5 metres wide, 17 centimetres talland 2.1 metres long.

Among the Charity Fund Drive activities was an Inter School FootballTournament held for children under 11 years old. This was in collaborationwith MSSKL. 24 schools competed in this tournament on 28 June 2003.The school champion was the team from Sekolah Kebangsaan AUKeramat. A Children’s Jogathon was also held, where joggers ran for thehealth of their hearts, and also the benefit of the WAOH Charity Fund.This event took place at our stores in Melaka, Ipoh and Johor Bahru.

JUSCO Corporate Citizenship: A year of heart-warming charity events

W I T H A L L O U R H E A R T S ( W A O H )

top, from left: Cheque presentation to the Johor SpasticChildren’s Association by Cik Siti Nurhaliza, Ambassadorof WAOH Charity Fund. Y.A.M Sofiah Zarith Binti Almarhum Sultan Idris Shahdropping in a donation officiating the launch of WAOHCharity Fund at Permas Jaya.

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J A Y A J U S C O S T O R E S B H D ( 1 2 6 9 2 6 - H )J A Y A J U S C O S T O R E S B H D ( 1 2 6 9 2 6 - H )

An English Motivation Camp that involved more direct communicationwith children was organised with the support of the Ministry ofEducation Malaysia in the year under review. The 3-day camp was heldat the Seri Dinar Training Retreat in Janda Baik, Genting Highlands andchildren were taught and encouraged to use the English Language. 70children from different schools in Selangor happily participated in thisevent.

In collaboration with Hospital Pantai Indah (HPI), nurses conductedbasic health screenings for JUSCO shoppers. Held at JUSCO TamanMaluri on 31 May and 1 June 2003, personnel from the hospital also provided free advice on healthy living and general health information.Donations were collected on the premises from our grateful and full-heartedly supportive customers. A cheque amounting to RM2,000collected from this event was presented to the WAOH Charity Fund representatives.

The success of these projects was possible not just because of the effort ofall JUSCO staff, but also the result of our customer’s civic consciousnessand support towards the WAOH Charity Fund.

The WAOH Charity Fund was put to use in one notable heart-warmingand rewarding project this year. The Thalassaemia Centre in HospitalUniversiti Kebangsaan Malaysia (HUKM) urgently required renovationsand improvements to the current facilities. In close co-operation withHUKM, the donated fund was used to provide air-conditioning, wallpaper, carpeting, a television, and to create a Cyber Corner and aParent’s Corner. Some toys were also donated. In total, RM100,000 wasdonated to this worthy cause. The launch of the newly renovated centeron 10 December 2003 was a memorable event, with WAOH AmbassadorSiti Nurhaliza making a celebrity appearance.

Jaya Jusco Stores Bhd. pledges to continue serving thecommunities in which the company has operations.The Company as a responsible corporate citizen looksforward to many more years of contributing anddonating to the needs of deserving Malaysian childrenand youth together wtih our caring customers and business partners.

left: JUSCO’s Managing Director, Mr. Soichi Okazaki andCik Siti Nurhaliza presenting a cheque of RM100,000.00 to Hospital Universiti Kebangsaan Malaysia (HUKM). below: Cik Siti Nurhaliza spends a few moments with theThalassaemic patients.

On 21 August 2001, JUSCO Co. Ltd., (Japan UnitedStores Company) changed its name to ÆON Co. Ltd.and announced its aim to become one of the top 10global retailers, in the next decade.

ÆON's vision for the future is summed up in the phrase'glocal retailer.' ÆON had coined the word 'glocal' from'global' and 'local'.

‘Glocal’ is ÆON's term for - "Global management standardssupporting the best local operations to meet consumerneeds in the local markets."

‘ÆON’: A Future Of Limitless Promise.The word ‘aeon’ has its origins in a Latin root meaning‘eternity’. For us here at ÆON, the word is imbued witha deep sense of purpose. As we renew our corporateidentity for the 21st century, we define our mission as“creating a future of limitless promise.”

At ÆON, we are concerned with lifeas a whole.The word ‘life’ stands both for the essential quality common to all living things and for an individual’s way ofliving. It suggests both environmental stewardship andeconomic growth, spiritual fulfillment and material affluence. And indeed, these facets of ‘life’ are not separate, but should be integral parts of a whole. A member of the retail industry, we at ÆON are concernedwith the daily life of each one of our customers, and bythis we mean ‘life’ in the fullest possible sense. To enhancepeople’s lives as only ÆON can: that is our raison d’étre.

At ÆON, our approach is open anddynamic.To achieve our mission, we must be in touch with peoples’aspirations. This means not only being constantlyattuned to our customers’ wishes, but also being guidedby our own innermost values. Approaching every occasion with open minds and hearts, we must do ourutmost to create a future of limitless promise from thematerials of everyday life.

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Æ O N ’ S C o r p o r a t e C o m m i t m e n t

On 7 December 2003, 3000seedlings and saplings were plantedin the vicinity of the Permas Jayastore in a Tree Planting exercise.

Whenever a new shopping center is opened in Japan orin Southeast Asia, the ÆON Group makes every effort toplant trees native to that locale as part of the facility. Byhaving the customers plant trees together with us, we conceived this as a means of raising people’s awareness of environmental problems.

MORE ABOUT AEON’S CORPORATECOMMITMENT

7


As we enter a new era, we at ÆON reaffirm our basicprinciples.

The starting point of our philosophy is the customer. AtÆON, our eternal mission as a corporate group is to benefit our customers, and our operations are thus customer-focused to the highest degree.

Our FIRST basic principle is dedication to peace: ÆONis a corporate group whose operations are dedicated to thepursuit of peace through prosperity. • We aim to contribute in every

possible way to health, safety and peace of mind in daily living.

• As a good corporate citizen, we undertake many philanthropic activities.

Our SECOND basic principle is dedication to people:ÆON is a corporate group that respects human dignityand values personal relationship.• We believe in the value of each individual’s free spirit

and vitality.• Our employees accept one another as equals committed

to shared ideals.

Our THIRD basic principle is dedication to community:ÆON is a corporate group rooted in local community lifeand dedicated to making a continuing contribution tothe community. • We encourage our relationships with local communities

to evolve into ongoing partnerships so that, together, wecan create a future of limitless promise.

• We aim to become the local community’s most trustedpartner in the effort to create amenities for better living.

On 21 August 2001, we at ÆON renewed our corporateidentity. We are sure that our customers, seeing the energy that we ourselves bring to our work, will under-stand and appreciate the philosophy of the new ÆON.ÆON’S Corporate Commitment leads the way.

Tuan Hj Salleh Yusup (Deputy Director General of Services ofDBKL) doing his part for the environment.

OurCustomers

Peace

People Community

The Tree PlantingCeremony for JUSCOMetro Prima tookplace on 10 January,2004.

8


JUSCO Permas Jaya in Johor Bahru officially opened its doors in January 2004.

JUSCO expands further this year with the opening oftwo magnificent new stores – JUSCO Permas Jaya, JohorBahru and JUSCO Metro Prima, Kepong. These newstores are exemplary of the JUSCO philosophy to shopping. With luxurious high ceilings, spacious walkways, ample parking bays and thoughtful additionslike baby rooms, getting what you need becomes apleasure to look forward to.

At these stores, you will find a wide and assorted mix of tenants, chosen to complement your shopping experience. We have selected only the most popular andwell-known brand names, including branded and luxurycosmetics, digital equipment and a complete supermarket.

Additionally, JUSCO Home Centre and its synergisticnew tenant ENEOS Car Centre started operations inOctober 2003. While our household sections are well

stocked with your everyday requirements, JUSCO HomeCentre in 1 Utama shopping center is a complete,one-stop center for everything do-it-yourself, including garden accessories & plants, flooring, house paint, fixtures & fittings and even a barbeque section. ENEOSCar Centre, located just below JUSCO Home Centre, isevery auto enthusiast’s dream store. The car centreincludes a vehicle showroom, complete workshop andaccessories section.

With this, JUSCO has become much more than just adepartmental store cum supermarket. Truly, everythinga customer would need is all under one roof, in a cosy, comfortable shopping environment. Looking at thesestores, it’s accurate to say that we have drawn the shopping haven blueprints and built-to-measure shopping destinations with our customers and theirfamilies in mind.

Providing the convenience of everythingunder one roof

S p r e a d i n g O u r W i n g s : O u r N e w S t o r e s

JUSCO Metro Prima, Kepong was officially opened in February 2004.

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Some of the areas in JUSCO HomeCentre include a flooring section,kitchen cabinets and accessories section and an area for custom-mixingcolours for house walls.

left: A ride on the Smart Train will take children around JJ Bear’s forest to meet his many friends.above: Children having a ball of a time in the ‘swimming pool’ and a view of the games machines.

o f O u r B u s i n e s sE x p a n d i n g T h e F r o n t i e r sE x p a n d i n g T h e F r o n t i e r s

Smart Wonder WorldSmart Wonder World at JUSCO Taman Maluri waslaunched on 6 August 2003. This one-of-a-kind amusementcenter for the family boasts three distinct sections: theGame Area, the Playground and the Show & Tell Stage.

Images of JJ Bear, the JUSCO mascot, and his animalfriends cavorting before a cheery forest backdrop introduces the forest theme here. In the Playground,children are endlessly entertained with slides, see-saws,push cars and a playhouse filled with toys and games tostimulate young minds. There is also an activity areawith tunnels, crawlspaces and a pool filled with multi-coloured balls to “swim” in.

The Games Area is a virtual wonderland to while theday away. Filled with colourful lights and fun characters,it is suitable for all ages. The highlight of this section isa fun train ride with JJ Bear and his friends. Childrencan also choose from dozens of different machines withgames that encourage the development of motor skillsand reflexes. The Show & Tell Stage is an area set asidefor creative and fun activities. JUSCO will plan excitingactivities and promotions for kids like egg painting, fungames, face-painting sessions and story-telling sessions.

JUSCO Home CentreOpened in October 2003, JUSCO Home Centre is a complete do-it-yourself store for home-improvementsand home maintenance.

Catering to individuals and also contractors, JUSCOHome Centre provides affordably-priced products in the comfort and convenience of a shopping center. Amongthe services and products available are made-to-order

and do-it-yourself items, and a panel of consultants who provide advice on home improvements, maintenanceand repairs.

JUSCO Home Centre proudly features a Gardening Corner,a calm refuge in the middle of a shopping center. Ofinterest to customers who don’t have the time or spacefor a full-sized garden bed are the hydroponically cultured plants. The Gardening Center offers a variety ofsmall plants in hydroponic gel. Shoppers can select theirown plant and container and a sachet of the gel, available in a variety of colours. Besides potted plantsand various gardening paraphernalia, the GardeningCorner also offers a variety of services, including gardening tips and advice, landscaping consultation andspecial flower arrangement classes. Shoppers can alsorelax in the café located here.

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J C A R D : E x c l u s i v e R e w a r d s

Special prices at the supermarket for J CARD members.

J CARD website page.

Exclusive invitations and mailers.

Points Redemption Programme guide book.

f o r C u s t o m e r s

JUSCO rewards its customers with a membership concept of exclusive benefits and privileges called the J CARD. In essence, J CARD members accumulateredemption points & rebates with purchases made fromJUSCO stores and supermarkets.

The J CARD concept has since taken off, becoming ahugely successful marketing tool. Currently, there areapproximately 375,000 principal members, and morethan 200,000 supplementary card holders. These customers constitute the core of JUSCO clientele, who enjoy the benefits of point accumulation, rebatesand the various discounts offered. The active membersnow constitute about 75% of our membership.

JUSCO periodically publishes a Points RedemptionProgramme Guidebook, distributed free of charge to allmembers detailing the many items members canredeem once sufficient points are accumulated.

There is also a J CARD Member’s Mini Guide for privileged shopping, which lists out the various retailoutlets, restaurants, hotels and services which offer discounts, special packages and/or gifts with purchasesto J CARD members. The Mini Guide is updated yearly,with new participating outlets being constantly addedwhich now include Esquire Kitchen, Don Buri, KennyRogers Roasters, Optical 88, My Diamond, T.H. Jewelry, Holiday Tours & Travel, Obermain, Renoma & K-Box Karaoke. Currently there are approximately 110 participating outlets offering privileges to J CARD members.

In addition to these incentives, J CARD members qualifyfor certain rebates on all purchases made in any JUSCOGeneral Merchandise Store (GMS) and JUSCO HomeCentre. The rebates are totalled every six (6) months(Jan - June, July - December) and converted to giftvouchers which can be used to purchase merchandise atany of JUSCO stores.

J CARD POINTSredemptionprogramme

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Members receive special invitations to shop exclusivelyon J CARD Day Sales with promotions and discountsoffered only to members. Over the years, the J CARD DaySales has become increasingly popular with shoppers.Each time a J CARD Day is held, shoppers look forward to a great shopping experience, complete with special privileges and benefits.

Most recently, a brand new shopping concept forJ CARD members called the J CARD VIP Day was introduced. It allows members to shop exclusively on aspecial shopping day. Members simply have to choosetheir own J CARD VIP DAY within a given time frame. They have to present the J CARD VIP DAYPassport (which will be mailed to them) at a J CARDCustomer Service Counter, have it verified and proceedto shop like a VIP!

An increasingly popular feature of the membership isthe free PEARL magazine, a full-colour bi-monthly publication by JUSCO. The magazine is targeted athousewives, with lifestyle and travel articles, tips onhome improvement and decoration, fashions, recipes,restaurant reviews, and highlights of JUSCO promotionsfor J CARD members. The magazine is also available tonon-members at a price of RM4.90.

Other benefits of being a J CARD member include freePersonal Accident Insurance worth RM5000 and freelocksmith charges for accidental car locked out situation in our shopping centers’ car parks, free insurance coverage on loss or damage on purchase,claimable within 14 days of the purchase, and now, a new insurance programme in collaboration with Mitsui Sumitomo Insurance (Malaysia) Bhd. – J CARDMember’s Insurance – which was launched in April 2004.

The J CARD is available to any JUSCO shopper at anannual fee of RM12. It comes in a variety of attractiveand colourful designs which are updated from time totime. To become a J CARD member, one has to simplyfill up a J CARD membership application form which isavailable at all J CARD Customer Service Centres inJUSCO stores. Every time a customer shops at JUSCO,she simply has to present her J CARD before paying inorder to enjoy all the above mentioned benefits andprivileges.

Since its launch, the J CARD has proven to be a very successful shopping aid for JUSCO shoppers. Its manyprivileges, benefits and discounts have turned it intoone of the more well-known loyalty programmes in thecountry, which Malaysians constantly look forward to.

J U S C O

FREE COPY FOR J CARD MEMBERS

KDN NO: PP11579/6/2004 RM4.90

ISSU

E 01

7 M

AC

2004

COSMOPOLITAN TASTESRECIPES FROM AROUND THE WORLD

PRISTINEPAHANG

Visit this living cultural legacy

FENG SHUIFind out

more about Kua numbers

The Mini Guide informs members about the discounts and privilegesthey are entitled to

Pearl Magazine is published everytwo months and circulated to all J CARD members.

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J U S C O - O U M R e t a i l C e n t e ra n d H u m a n R e s o u r c e

D e v e l o p m e n t A c t i v i t i e s

The retail profession has long been regarded as onethat is less than prestigious. JUSCO strives to correctthese perceptions through many efforts – the educationand proper training of staff, incentives and awards,attractive benefits and inculcating a sense of pride inthe profession.

One such effort is the Apprentice Scheme. In collaborationwith the Open University Malaysia (OUM), Jaya JuscoStores Bhd. opened its first local retail center that offersthe Apprentice Scheme in retailing.

The Apprentice Scheme is a full-time employmentscheme based on training programmes that provide students the opportunity to work and pursue a tertiaryeducation at the same time, thereby increasing employees’ prospects for career advancement. Thescheme also inculcates professionalism and other pivotal values in management in the participants.

The first batch of apprentices enrolled for the scheme inMay 2002 and completed the course in January 2003.There are two levels, and apprentices are required toundergo either Level I or Level II of the Scheme. Uponcompletion of Level I, students will receive a CareerCertificate in Retail Operations. Those who choose toproceed to Level II will, upon completion, graduate with a Diploma in Management (Retailing), conferredby OUM.

The second batch of apprentices attained their CareerCertificate in Retail Operations on 12 December 2003.The 53 apprentices showed good improvement in termsof academic results, doing much better than the previous year’s apprentices. Currently, JUSCO-OUMRetail Center has 57 apprentices undergoing training atthe Certificate Level and another 225 students at theDiploma level.

Not just any retail job

from top: Group photo atthe certificatepresentation ceremony atPWTC on 12December 2003;the apprenticeswith the JUSCOmanagers; posingfor a memorablephoto.

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Another such proactive effort to improve productivityand to boost staff’s morale was the cashier “Show andTell” contest held in 2003. Jaya Jusco Stores Bhd under-stands the importance of efficient transactions at thecashier’s counter.

Cashier’s skills and productivity are a key factor in aretail business’ ability to stay ahead of the competition.This contest provides stimulus to cashiers at all JUSCOoutlets to further improve their performances. This year’scashier’s “Show and Tell” contest received overwhelmingsupport from JUSCO customers, with 63,500 nominationforms received.

The cashier “Show & Tell” contest ended with the“Grand Customer Service & Skills Tournament” whereby9 outstanding cashiers, one from each store, was selectedbased on customer nominations, to participate in thetournament.

At the end of the tournament, 3 cashiers were chosen asthe top winners, and one individual was awarded the“Cashier of the Year Award”. This year’s “Cashier of theYear” was Zulkharnain Hassan from our Bandar UtamaStore.

Besides this, there is the Re-engineering of CashiersProgramme, which trains, grooms and refines cashiers’skills and image unique to JUSCO. This is a continuouseducation and training programme targeted at enhancingcashiers’ image, professionalism and performance.

JUSCO employees are thus reassured of not just a job,but a career, in pace with the rapid expansion of theJUSCO business.

clockwise from top: Cheering away for the competing cashiers; co-workers proudly support their friends; showcasing some exemplary cashier skills; congratulations to the winners.

A cashierbravelyfaces thejudges.

“Cashier’s skills and productivity are akey factor in a retail business’ abilityto stay ahead of the competition. Thiscontest provides stimulus to cashiersat all JUSCO outlets to further improvetheir performances.”

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Jaya Jusco Stores Bhd is a leading retailer in Malaysiawith a total revenue of RM1.5 billion in the financialyear under review. The Company was incorporated on15 September 1984. Jaya Jusco Stores Bhd was set up inresponse to the Malaysian Government’s invitation toAEON Japan to help modernise the retailing industry inMalaysia. The ‘JUSCO’ name today is well establishedamong Malaysians as well as foreigners, especially dueto its association with the international AEON of Japan.

JUSCO has established itself as a leading chain ofgeneral merchandise stores. JUSCO’s constant interiorredecoration of stores, to project an image designed tosatisfy the ever changing needs and desires of consumers, is clear evidence of this. The Company’sperformance has been further enhanced by the management’s acute understanding of target marketneeds and the provision of a correct product-mix.

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

AEON consists of AEON Co. Ltd., 111 consolidated subsidiaries and 29 affiliated companies. In addition toits core General Merchandise Stores (GMS) plus itssupermarket and convenience store operations, AEONis also active in specialty store operations, shopping center development operations and services as well asother operations.

AEON Co. Ltd. is an integrated Japanese retailer and isactive not only in Japan but also in Southeast Asia,China and North America.

At all times, in every market, AEON's activities are guidedby the unchanging 'Customer First' philosophy. Its aimis to surpass expectations by combining excellentproducts with unique personal services that enhancethe shopping experience to make the customers smileevery time they shop.

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

OUR PRINCIPLE,regardless of how times may have changed, is to serve the ‘Customer First’. We are alwaysmindful of the three keywords which make up the essence and character of the retail industryand must be considered in any development: ‘peace’, ‘people’ and ‘community’. Ours is a person-to-person business and our existence is deeply intertwined with the people of theregions and societies in which we serve. These precepts remain the same wherever we do business, where we act as a contributing member of the local community.

OUR GOALis to operate as an “international-scale retailing group”, recognised for excellence not only inJapan, but also in other nations. The international recognition we are working to achieve isnot one which can be measured merely in quantifiable terms of size, growth and profitability.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.

OUR STRATEGYis to establish a solid competitive position and achieve continuous growth. Two key componentsunderlying this strategy are:• Accelerating Shopping Center Development. We are channeling our resources towards

developing attractive, integrated commercial facilities which our customers can fully enjoy,such as regional shopping center and neighbourhood shopping center. This segmentalso involves leasing shopping space and facilities to tenants.

• Aggressive Pursuit of GMS Stores. Our General Merchandise Stores (GMS), which combinesupermarkets and departmental stores under one roof, operate as full-line retailers. Productsoffered range from food and other daily necessities, apparel and household goods (includingbedding and bathroom products) to specialised products such as home appliances, sportinggoods and cosmetics.

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

Board of Directors• Dato’ Abdullah bin Mohd Yusof

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

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

Registered OfficeTingkat 4,Menara Kausar,Jalan 3/27A, Seksyen 1,Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.Tel: 03-41433288Fax: 03-41490222/333

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

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

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

Homepagehttp://www.jusco.com.my

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

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

F i n a n c i a l C a l e n d a r

Notice of AnnualGeneralMeeting26 May 2003

QuarterlyResults Announcement4th Quarter - 21 April 2004

Annual GeneralMeeting17 June 2003

QuarterlyResults Announcement2nd Quarter - 22 October 2003

Payment ofDividendBook Closure -3 July 2003 Payment - 22 July 2003

QuarterlyResults Announcement1st Quarter - 23 July 2003

May2003 June

2003

January2004

July2003

October2003

QuarterlyResults Announcement3rd Quarter - 14 January 2004

April2004

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S h a r e P r i c eS T O C K C O D E : 6 5 9 9

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

6.55 6.75 6.85 7.30 7.70 7.65 8.20 9.10 9.15 9.10 10.90 11.00

6.35 6.35 6.40 6.60 7.00 7.45 7.55 7.85 8.45 8.20 9.10 10.00

495 612 354 1620 2444 1822 1381 4259 1741 1136 4282 4281

High (RM)

Low (RM)

Volume (‘000)

2003 / 2004

Mar

High (RM) Low (RM) Volume

Apr May June July Aug Sept Oct Nov Dec Jan Feb

12.00

10.00

8.00

6.00

4.00

2.00

0

4500

4000

3500

3000

2500

2000

1500

1000

500

0

RM

Vol‘000

17


5 Ye a r s F i n a n c i a l H i g h l i g h t s

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

2004 2003 2002 2001 2000RM’000 RM’000 RM’000 RM’000 RM’000

Income StatementRevenue 1,523,780 1,368,268 1,200,636 990,006 804,214

Retailing 1,406,242 1,262,851 1,107,158 909,775 732,779

Property Management Services 117,538 105,417 93,478 80,231 71,435

Profit before tax 96,288 90,833 80,327 69,390 55,710

Profit after tax 63,588 60,545 53,989 46,037 38,210

Net dividend 12,636 12,636 12,636 12,636 8,424

Balance sheetProperty, plant and equipment 692,849 561,221 508,630 517,818 447,454

Investment 175 175 175 175 175

Current assets 259,344 225,489 188,541 218,075 104,668

Current liabilities (415,719) (304,986) (263,379) (332,810) (218,972)

Total assets 536,649 481,899 433,967 403,258 333,325

Financed By

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

Retained profits 281,408 229,939 175,767 134,414 96,801

Revaluation reserve 34,682 35,199 55,352 55,352 55,352

Share Premium 108,488 108,488 108,488 108,997 58,386

Shareholders' funds 512,328 461,376 427,357 386,513 269,039

Long term liabilities - - - 10,135 60,260

Deferred taxation 24,321 20,523 6,610 6,610 4,026

536,649 481,899 433,967 403,258 333,325

StatisticsNet earnings/(loss) per share (sen) 72.5 69.0 61.5 *68.1 *57.5

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

Net tangible assets per share (RM) 5.84 5.25 4.87 4.40 4.60

For Five Years - As at 28 & 29 February

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R e v e n u e

P r o f i t A t t r i b u t a b l e t oS h a r e h o l d e r s

1,500

1,250

1,000

750

500

250

099/00

804.2

990.0

1,200.6

1,368.3

1,523.8

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

RM million

Financial year

70

60

50

40

30

20

10

099/00

63.6

38.2

46.0

53.9

60.5

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

RM million

Financial year

(Seated from left to right)

Mr. Toshiji TokiwaNon-Independent Non-Executive Vice Chairman

Dato’ Abdullah bin Mohd YusofNon-Independent Non-ExecutiveChairman

(Standing from left to right)

Mr. Soichi OkazakiManaging Director

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

Dato’ Chew Kong SengIndependent Non-Executive Director

Encik Ramli bin IbrahimNon-Independent Non-Executive Director

Datuk Zawawi bin MahmuddinIndependent Non-Executive Director

Mr. Tatsuichi YamaguchiNon-Independent Non-Executive Director

Mr. Masato YokoyamaExecutive Director

19


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

20


D i r e c t o r s ’ P r o f i l e s

Note : Save as disclosed in this annual report, all the Directors mentioned on p ages 20 to 22have no conflicts of interest with Jaya Jusco Stores Bhd. or any family relationship with anyDirector and/or substantial shareholder nor have they any convictions for offences withinthe past 10 years, except for traffic summons, if any.

Dato’ Abdullah bin Mohd Yusof (65),(Malaysian) Non-Independent Non-Executive Chairman

Dato’ Abdullah bin Mohd Yusof wasappointed the Chairman of Jaya JuscoStores Bhd on 26 October 1984. He holdsa Bachelor of Law (Honours) fromUniversity of Singapore, which heobtained in 1968. He has more than thirty (30) years of experience as anAdvocate & Solicitor. He started his careerwith Skrine & Co., as a Legal Assistant in1968 before starting his own partnershipunder the name of Tunku Zuhri Manan & Abdullah, Advocates & Solicitors in1969 and subsequently renamed the lawfirm to Abdullah & Zainudin, Advocatesand Solicitors. He sits on the Board ofDirectors of Malaysia Mining CorporationBerhad, Tronoh Mines Malaysia Bhd andPernas International Holdings Berhad, allof which are companies listed on theBursa Malaysia Securities Berhad. and sitson the Board of Directors of several privatelimited companies. He is a member of theRemuneration & Nomination Committeeof the Board. Dato’ Abdullah bin MohdYusof has attended all the four (4) Boardmeetings held in the financial year. Heholds 154,000 ordinary shares directlyand 5,646,000 ordinary shares indirectlyin the Company.

Mr. Toshiji Tokiwa (64),(Japanese) Non-Independent Non-Executive Vice Chairman

Mr. Toshiji Tokiwa was appointed a Non-Executive Vice Chairman of JayaJusco Stores Bhd on 16 June 2000. He holdsa Bachelor of Law degree from KeioUniversity, Japan, which he obtained in1963. He joined The Dai-Ichi KangyoBank Ltd., in 1963 as a ManagementTrainee. In 1993, he was promoted to theposition of Director and General Managerof the New York Branch of The Dai-IchiKangyo Bank Ltd., in New York, USA.Subsequently, he was the Senior ManagingDirector of The Dai-Ichi Kangyo Bank Ltd.,in Japan from 1995 to 1996. He joinedChuo Real Estate Co. Ltd., a companyprincipally involved in the leasing andmanagement of office building, as thePresident and CEO from 1996 to 2000and was also a Non-Executive CorporateAuditor of Fujitsu General Co. Ltd., from1997 to 2000. He joined AEON Co. Ltd.as a Non-Executive Director in 1999 andwas subsequently appointed as theChairman of AEON Co. Ltd. in 2000. Mr. Toshiji Tokiwa has attended two (2)out of the four (4) Board meetings heldin the financial year. He does not holdany shares in the Company.

Mr. Soichi Okazaki (45),(Japanese) Managing Director

Mr. Soichi Okazaki was appointed theManaging Director of Jaya Jusco StoresBhd on 19 June 2001. He holds a Bachelorof Arts in Commerce from Toyo University,in Japan, which he obtained in 1981. He has more than twenty (20) years of experience in the retail industry. Hejoined AEON Co. Ltd. of Japan in 1981and has worked in several Asian countries.From 1990 to 1995, he was attached toJusco Stores (Hong Kong) Co. Ltd. In1995 to 1998 he was a Director ofGuangdong Jusco Teem Stores Co. Ltd. in China. He was seconded to Jaya JuscoStores Bhd in 1998 to be in charge ofMarketing, Business Development, StoreOperations and Shopping CenterManagement. Mr Okazaki initiated severalsuccessful business strategies, which hashelped contributing to the growth of Jaya Jusco Stores Bhd’s performance inparticular during the Asian financial crisis in 1997 - 1998. Mr Soichi Okazakihas attended all the four (4) Board meet-ings held in the financial year. He holds15,000 ordinary shares directly in theCompany.

21


Mr. Masato Yokoyama (51),(Japanese) Executive Director

Mr. Masato Yokoyama was appointed anExecutive Director of Jaya Jusco Stores Bhdon 26 October 2001. He holds a Bachelorof Arts in Commerce from WasedaUniversity in Japan, which he obtainedin 1976. He joined AEON Co. Ltd. in1976 and was the Store Manager ofIshioka Store prior to his secondment toJaya Jusco Stores Bhd in 1993. Mr. Yokoyama held the position of the Store Manager of Jaya Jusco TamanMaluri from 1993 to 1998. He was promoted to become the Senior SoftlineMerchandising Manager from 1998 to1999 and the Senior Operations Managerfrom 1999 to 2000. Currently, Mr. MasatoYokoyama is the Executive Director incharge of Store Operations, HumanResource, Finance and Administration. Mr. Masato Yokoyama has attended all the four (4) Board meetings held in the financial year. He holds 15,000 ordinaryshares directly in the Company.

Mr. Tatsuichi Yamaguchi (58),(Japanese) Non-Independent Non-Executive Director

Mr. Tatsuichi Yamaguchi was appointed aNon-Executive Director of Jaya JuscoStores Bhd on 23 July 2003. He graduatedfrom Meiji University, Japan majoring inManagement, which he obtained in 1969.He joined AEON Co., Ltd in 1969 andpromoted as the Store Manager ofToyohashi store, Japan in 1980. In 1986he was seconded to Kornhill store ofJusco Stores (Hong Kong) Co., Ltd., wherehe was appointed as the Deputy StoreManager, appointed a Director and theManaging Director of Jusco Stores (HongKong) Co., Ltd., in 1988 and 1990 respectively. He was appointed a Directorof AEON Co. Ltd., in 1996 and held theposition of Director and General Manager(Apparel) Merchandising Division in1997. In 2000 he assumed the position ofDirector & General Manager, ChubuRegional Company and currently holdsthe position of Vice President, AsiaOperation, AEON Co., Ltd and Presidentof Aic Inc. Mr. Tatsuichi Yamaguchi isalso the Chairman of the Nominationand Remuneration Committees of theBoard. Mr. Tatsuichi Yamaguchi hasattended three (3) Board Meetings duringhis term in office for the financial year.He does not hold any shares in theCompany.

Encik Ramli Bin Ibrahim (63),(Malaysian) Non-IndependentNon-Executive Director

Encik Ramli bin Ibrahim was appointed aNon-Executive Director of Jaya JuscoStores Bhd on 20 August 1996. He is amember of the Malaysian Institute ofAccountants and a Fellow of theAustralian Institute of CharteredAccountants. He was attached to KPMGPeat Marwick (“KPMG”) (now known asKPMG) in Australia, United Kingdom andMalaysia from 1959 to 1995. He wasappointed a Partner of KPMG Malaysia in1971. In 1989, he was made the firstbumiputera Senior Partner of KPMGMalaysia. He also served on the Boards of KPMG International and KPMG AsiaPacific from 1990 to 1995. He retiredfrom KPMG Malaysia in 1995. He was amember of the Committee of Enquiry setup to investigate the affairs of BumiputraMalaysia Finance Ltd., the Hong Kongsubsidiary of Bank Bumiputra MalaysiaBerhad (which had merged with Bank ofCommerce (M) Bhd to form Bumiputra-Commerce Bank Berhad) from 1983 to1985. Currently, he sits on the Board ofDirectors of Hua Joo Seng Enterprise Bhd,Ranhill Berhad, Measat Global Berhadand several other unlisted public and private limited companies. He is also amember of the Audit and RemunerationCommittees of the Board. Encik Ramlibin Ibrahim has attended all the four (4)Board meetings held in the financial year.He holds 140,000 ordinary shares indi-rectly in the Company.

22


Brig. Jen. (B) Dato’ Mohd Idris bin Saman (59),(Malaysian) Independent Non-ExecutiveDirector

Brig. Jen. (B) Dato’ Mohd Idris bin Samanwas appointed a Non-Executive Directorof Jaya Jusco Stores Bhd on 16 June 2000.He holds a Post Graduate Diploma inManagement Studies from the SloughCollege, United Kingdom, which heobtained in 1980. He was a graduate of theAir Command & Staff College, Maxwell,USA and the Armed Forces DefenceCollege, Kuala Lumpur. He joined theRoyal Malaysian Air Force as a PilotOfficer in 1965 and he served the RoyalMalaysian Air Force for thirty-five (35)years, in various executive positions withinits Logistic Branch. He retired from theRoyal Malaysian Air Force in 2000 as theAssistant Chief of the Air Force (Material).He is currently the Executive Chairmanof Diversified Jet Sdn. Bhd., a companyprincipally involved in the supply ofmaterials and services to the MalaysianArmed Forces. He is also a Director ofAffin Fund Management Sdn. Bhd. Dato’Mohd Idris bin Saman is a member of theAudit and Nomination Committees ofthe Board. Dato’ Mohd Idris bin Samanhas attended all the four (4) Board meet-ings held in the financial year. He doesnot hold any shares in the Company.

Datuk Zawawi bin Mahmuddin (58),(Malaysian) Independent Non-ExecutiveDirector

Datuk Zawawi bin Mahmuddin wasappointed a Non-Executive Director ofJaya Jusco Stores Bhd on 23 July 2001.He holds a Bachelor of Arts (Honours)Degree from the University of Malaya,which he obtained in 1968. DatukZawawi joined the Administrative andDiplomatic Service and began his careeras an Administrative Officer in theMinistry of Transport in 1968. From1970 to 1975 he served as private secretary to the Deputy Prime Ministerand thereafter held various positions inthe Cabinet Secretariat of the PrimeMinister Department from 1975 to1990. His subsequent appointmentswere as follows:- Federal Secretary inSarawak (1990 - 1992), DeputySecretary General 1, Ministry of HomeAffairs (1992 - 1994), Secretary General,at the Ministry of Information (1994 -2000). Datuk Zawawi was formerly onthe Board of Syarikat ExplosiveMalaysia Sdn. Bhd. (SME), NationalFilm Development Corporation(FINAS), Governing Council, Bernamaand Sukom Ninety Eight Bhd. He iscurrently a director of a few privatelimited companies and the Chairmanof Two Advertising Sdn. Bhd. andNorthport Distripark Sdn. Bhd.. He isalso a member of the NominationCommittee of the Board. Datuk Zawawibin Mahmuddin has attended all thefour (4) Board meetings held in thefinancial year. He does not hold anyshares in the Company.

Dato’ Chew Kong Seng (66),(Malaysian) Independent Non-ExecutiveDirector

Dato’ Chew Kong Seng was appointed aNon-Executive Director of Jaya Jusco StoresBhd on 23 July 2001. He is a Fellow of theInstitute of Chartered Accountants inEngland and Wales, a Member of theMalaysian Institute of Accountants and theMalaysian Institute of Certified PublicAccountants. He was a tax officer in theInland Revenue Department in the UnitedKingdom and then joined Stoy Hayward &Co., in the United Kingdom from 1964 to1970. He returned to Malaysia and joinedTurquand Young & Co. (now known asErnst & Young) and was subsequentlytransferred to Sarawak office in 1973, first asManager in-charged and later as Partner in-charged. He was appointed as theManaging Partner of Ernst & Young from1990 to 1996. Currently, Dato’ Chew is anExecutive Director of Sarawak EnterpriseCorp. Bhd. and the Deputy Chairman ofSarawak Electricity Supply Corporation. He is a Director of Great Wall PlasticIndustries Berhad, Hong Leong PropertiesBerhad, PBA Holdings Bhd and EncorpBerhad. He is also a Director and the AuditCommittee Chairman of Petronas DaganganBerhad and Industrial Concrete ProductsBhd. and is a Director and a member of theAudit Committee of Petronas Gas Berhad.Dato’ Chew is the Chairman of the AuditCommittee and a member of the NominationCommittee of the Board. Dato’ Chew KongSeng has attended all the four (4) Boardmeetings held in the financial year. He doesnot hold any shares in the Company.

23


(Seated from left to right)

Mr. Soichi OkazakiManaging Director

Ms. Chong Swee YingGeneral Manager Shopping Center & New Business Development

Puan Nur Qamarina ChewGeneral Manager Store Operations& Customer Care

Puan Noryahwati Mohd. NohGeneral Manager Human Resource& Administration

Mr. Masato YokoyamaExecutive Director

(Standing from left to right)

Mr. Poh Ying LooGeneral Manager Finance

Encik A. Rashid bin AdamGeneral Manager Corporate Affairs

Lt. Col (R) Yaacob bin MahmudGeneral Manager JUSCO-OUM Retail Center & Special Task

Mr. Takeshi KodamaGeneral Manager Merchandising

Mr. Hirohisa SannomiyaAssistant General Manager Construction & Business Development

S e n i o r M a n a g e m e n t

24


Financial ReviewAgainst a backdrop of increasing competition andeventful social, economic, and political happeningsboth domestically and globally, the Company registeredcommendable revenue of RM1.524 billion for the year ended 29 February 2004, which represents an 11.4%growth over the previous financial year’s revenue.

At its earnings levels, the Company registered a profitbefore tax of RM96.3 million and a profit after tax ofRM63.6 million which represents 6.0% and 5.0%growth respectively over the previous financial year’sresults.

Earnings per share for the year under review is 72.5 senas against 69.0 sen in the previous financial year. TheCompany’s balance sheet remains healthy with no gearing and a net tangible asset of RM5.84 per share.

Review of OperationsThe year under review started under difficult environment with uncertainties arising from the Iraqwar and the SARS outbreak. In particular, at its height,the SARS outbreak dampened consumer spending aspeople shied away from crowded destinations like retailing shops and shopping centers. After the initialscare, public fear subsided and consumer sentimentreturned to normal. Despite these difficulties, our economy remained resilient and registered an economic growth of 5.2% in 2003, reflecting consumer confidence, bolstered by the smooth transition of political power in the country and the government’seffective economic stimulus package which helped toreduce the impact of the outbreak of the diseases andrestored business confidence.

The year under review also witnessed the opening ofmore hypermarkets and proliferation of other retailingformats especially the specialty stores. The Companycontinued to focus on its competitive strengths, reactingpromptly to changes in consumer trends and demands

and creating new business directions for its core retailbusiness. For the year under review, the Company retailsales registered RM1.406 billion which is 11.4% higherthan the previous year’s performance. On same storebasis, excluding JUSCO Taman Universiti in JohorBahru, which operates for a full year in the year underreview and also contributions from the new storesopened in the year, the Company registered a growth of5.5%. All its retail stores registered growth of between1% to 12% over their previous year’s performanceexcept for its store in Bandar Utama. JUSCO BandarUtama, together with the contribution from its spin-offJusco Home Centre, managed to improve 0.9% in itssales performance as compared to previous year.

During the year, the Company also opened two new outlets as part of its continuous expansion into strategic locations in both Klang Valley and JohorBahru. JUSCO Permas Jaya was opened on 19 December2003 in Bandar Baru Permas Jaya, Johor Bahru, representing the Company’s second outlet in Johor. It is a leased one floor shopping center of about 251,000square feet in net lettable area, managed by theCompany, with Jusco taking up about 160,000 squarefeet and a mix variety of tenants occupying the rest. On 15 January 2004, the Company also opened itseleventh store, a two-floor shopping center namedJUSCO Metro Prima in Kepong, Kuala Lumpur, built on an approximately 9.4 acre land, purchased by theCompany.

In the year under review, the Company had also as partof its continuous strategy to develop new business andto counter competition especially from the specialtystores, opened a family orientated amusement center in its Taman Maluri outlet and also JUSCO HomeCentre, a specialty store in its One Utama shopping center that provides ideas and improvements for homesand do-it-yourself enthusiasts. Both businesses representnew concepts introduced by the Company.

C h a i r m a n ’ s S t a t e m e n t

”On behalf of the Board of Directors, I am pleased to present JAYA JUSCOSTORES BHD Annual Report and AuditedFinancial Statements for the financial yearended 29 February 2004.“

25


On the Company property management services business, it registered a steady income of RM117.5 million for the year under review, a growth of 11.5%, ascompared with RM105.4 million in previous year. Theincrease in income came from the continuous highoccupancy in all our shopping centers, full year operation of our first shopping center in Johor Bahruand also the addition of new tenant space in the yearunder review from the two new shopping centers. Our shopping centers continue to enjoy average occupancy rate of 99%.

Corporate CitizenshipJaya Jusco Stores Bhd continued to play a prominentcorporate citizenship role. During the year underreview, the Company carried out its second “With AllOur Hearts” Charity Fund Drive through which varioussocial activities were carried out at all our outlets, andthrough which the Company hope to promote awarenessof the need to do charity and help the needy, especiallyMalaysian children and youth.

Future Prospects and ChallengesThe Company continues to face a very challengingenvironment with increased competition not only dueto the growing trend of hypermarkets but also from theentry of new retail players and the emerging specialtyretail stores. Most retailers especially the hypermarketsalso adopt aggressive pricing strategies for their merchandise. Though the Company has the strengthand is equally adaptable to the pricing field, it remainedfocused on ensuring that not only its customers arealways provided with value for money in their merchandise purchases but its policy of “CustomerComes First” especially in areas of customer service,facilities and conveniences, practised by all its outlets.

The Company remains committed to its long term planof building a strong foundation for its future but willensure that it will not only enjoy its current competitivestrengths but also responds early to changes in the retail landscape and also the consumer tastes and preferences. The Company will continue to enhance itscompetitiveness by concentrating on better merchandisingassortments, improved customer services and timelyrefurbishment of its existing stores to maintain freshness and attractiveness.

In the long term, the Company remains focused on itshuman resources development, streamlining andrevamping its store and logistics operations, merchandisingprocurement strategies, shopping center developmentand information technology enhancement to cater to itsexpanding business.

With the stable political climate, improved consumersentiments, a well diversified economy and forecast ofhigher economic growth, the Company expects to havea better year ahead not only from its existing stores butalso from the additional contribution due to full yearoperation of its new stores.

DividendThe Board Of Directors has recommended for yourapproval a first and final dividend of 20% less incometax of 28% for the year ended 29 February 2004.

20th AnniversaryJaya Jusco Stores Bhd will be celebrating its 20thAnniversary in the new financial year, a very specialoccasion and the Company would like to take thisopportunity to show its appreciation to all its customers, business associates, regulatory authorities,shareholders and employees who had been supportingthe Company all these years. We hope to foster closerrelationship with all parties whose support had enabledthe Company to build up a strong presence in the localretail industry. The 20th Anniversary was launched on 8 April 2004 and a lot of activities had been planned forour customers in events, prizes to be given away andspecial merchandise at special pricing. There will also bea tree planting ceremony, scheduled in September 2004in which more than 20,000 plants will be planted at achosen location, consistent with the Company’s philosophy and corporate citizenship efforts.

On the eve of this Anniversary, I wish to place a specialnote of appreciation to AEON Co, Ltd. of Japan for theircontinuous support and measure of confidence. I wouldlike to especially mention the singular contribution ofMr Takuya Okada for his vision and encouragementwithout which we would not be able to achieve suchsuccess.

AcknowledgementOn behalf of the Board Of Directors, I wish to take this opportunity to thank my fellow directors, the management and staff for their efforts in taking theCompany through a very challenging year.

The Board wishes to also express their sincere thanks toall our valued shareholders, business associates, bankers,government authorities and most of all, our customersfor their continuous support to the Company.

DATO' ABDULLAH BIN MOHD YUSOFCHAIRMAN

26


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

Malaysia’s economy continued to register growth in2003, with a 5.2% growth. Growth was again broadbased across all sectors with the private sector being themain driver. The economy was however temporarilyaffected by the SARS outbreak and at the same time further weakened by the uncertain global economic and political activities which dampened consumer sentiment. Pro-active responses by our governmentthrough the implementation of the economic stimuluspackage that provides relief to affected sectors stimulatedomestic consumption and business, helps to cushionthe impact of these adverse economic factors and allows the economic recovery experienced in 2002 to be continuously sustained.

The economic stimulus package helps the retail industryto tide over the difficult SARS period, enabling it torecover rapidly and remain resilient for the year. SARSoutbreak proved to be transitory and as it unwinds, pentup demands and improved consumer confidenceallowed most retail business to recover to their pre SARSbusiness levels.

In addition to the adverse economic conditions experienced in the year, the retail industry in itself alsowitnessed key retailers continue adopting aggressivebusiness strategies and development plans in order tocapture a bigger market share. In the year under reviewnew malls and retail formats appeared, to provide newdimensions to the already competitive industry.

The Company through its own strategies and retail format, handles the challenges proactively and for theyear under review, continues to produce impressiveresults from its core retail business.

Retailing OperationsThe Company continues to thrive in a challenging retailenvironment for the year under review with good retailperformance from its stores. Though the proliferationsof hypermarkets, which generally have different customer segmentations, placed some margin pressureson the supermarket divisions, the overall increase in therevenue of all merchandising divisions of the Companyespecially the non-supermarket divisions buffered themargin pressure. For the year under review, the merchandising divisions recorded growth ranging from2.0% to 6.9%.

For the year under review, the Company’s retail salesrecorded RM1.406 billion which is 11.4% over its previous year’s performance. On same store basis, theCompany recorded a 5.5% growth excluding its Taman

Universiti store which operates for a full year in the yearunder review and also the contribution from its newstores in Permas Jaya, Johor Bahru and Metro Prima,Kepong, Kuala Lumpur.

On the performance of its stores, all stores recordedgrowth, ranging from 1% to 12% except for its store in Bandar Utama. JUSCO Bandar Utama undergoes business strategies change for the year under review withthe establishment of a new business category, calledJUSCO Home Centre. JUSCO Bandar Utama togetherwith contribution from its spin off JUSCO Home Centre registered 0.9% higher performance compared to previousyear. JUSCO Home Centre is established as a completecenter for home improvement ideas and handyman’ssupermarket replacing some categories of JUSCO BandarUtama outlet’s general merchandise department. OurTaman Maluri store continued to enjoy good growth inits retail business with 10.0% growth in the year underreview despite having a competitor setting up a newretail outlet near its location. As for our store in Melakawhich faces competition from the opening of a new hypermarket nearby, it managed to register growth of1.4% over its previous year’s performance. Our store inWangsa Maju continued to enjoy good support from thesurrounding residential neighborhoods and for the year under review, registered growth of 7.8% over its previous year’s performance. Our outlet in Bandar BaruKlang also performed above expectation with 2.8%growth over its previous year’s performance despite theopening of competitors outlets nearby.

For our store in Ipoh, it continues to enjoy premier position in the town as reflected in its growth of 11.9%above its previous year’s performance. As in the previous year, JUSCO Mid Valley continued to exhibitimpressive growth with a 7.8% growth in the year underreview. JUSCO Bandar Puchong registered about 6.6%growth. JUSCO Taman Universiti operated its first fullyear in the year under review and its results at RM79million was within the Company’s expectation.

For the year under review, the Company successfullyadded two new outlets to its existing retail operations.On 19 December 2003, the Company opened its tenthstore, in Permas Jaya, Johor Bahru. JUSCO Permas Jayarepresents the Company’s second store in the southernregion, after JUSCO Taman Universiti in Skudai, JohorBahru. JUSCO’s own general merchandise store, supermarket and its ARENA restaurant occupy a netlettable area of approximately 160,000 square feet inJUSCO Permas Jaya. On 15 Jan 2004, the Companyopened for business its eleventh store in Malaysia at

27


JUSCO Metro Prima, Kepong in Kuala Lumpur. JUSCO’sgeneral merchandise store and supermarket includingARENA restaurant occupy approximately 216,000square feet in JUSCO Metro Prima. Besides a wide assortment of merchandise at affordable prices in bothstores, new business concepts and formats are also introduced. For the year under review, both stores have performed to expectations.

The Company continues to strive to provide more variety of retail services and merchandise categories tothe Malaysian consumers and has regularly introducednew concepts and innovative merchandise categoriesinto its businesses to serve the needs and demand of the ever changing consumers tastes, preferences andlifestyles. Thus, on 6 August 2003, the Companylaunched a family orientated amusement center calledSmart Wonder World at JUSCO Taman Maluri. Basicallydesigned for younger children, the bright and cheerfulenvironment at the center provides fun and educationfor the young. Smart Wonder World, which is locatedinside the store, complements the store’s general merchandise department’s environment and is designedto meet the demands of increasing modern affluentfamilies.

On 23 October 2003, the Company launched its newretailing concept for homemakers and builders throughthe establishment of JUSCO Home Centre in its 1 Utamashopping center. Occupying more than 34,000 squarefeet, it offers shoppers everything that they need to

improve their homes, both building products and homeaccessories, all in a convenient and personalised serviceenvironment. Shoppers are able to choose do-it-yourselfitems, made-to-order items while at the same time seekadvice from a panel of readily available experiencedconsultants. Together with JUSCO Home Centre, at thesame location, ENEOS Car Center, from Japan, a newcategory specialist invited by Jusco to be a tenant, wasalso launched at the same time. Essentially, ENEOS carcenter, which engaged Japanese technical supervision, isa one-stop car center which offers highly specialised carsupplies and services at competitive pricing, for theconvenience of car owners from the surrounding residential neighborhood.

In Jusco Metro Prima, Kepong, a new category centerwas created for kids through The Superkids World,which provides not only deep range of merchandiseassortment for children of all ages, but also includes

28


wholesome family entertainment through its amusementcenter. In the apparel section, the Company also moved to promote its own brand, T’Z factory with the setting up of a T’Z specialty shop as a tenant in theshopping center.

In addition to direct feedbacks from our customers, ourloyalty card, the J CARD continues to provide theCompany with the additional base from which customerfeedbacks and voices are heard and obtained. Throughthe feedbacks, the Company in return continues to provide products and services that meet the needs of its customers. Currently, the Company had approximately575,000 J CARD members who on the average contributeabout 55% of the Company’s monthly retail sales. TheCompany had also successfully recruited to date morethan one hundred business partners to participate in itsJ CARD privileged shopping programme, thus providingfurther benefits to its members.

Shopping Center OperationsRetail space continued to increase in the year underreview as more shopping centers opened, each launchedwith its own concept and identity of being a destinationfor shoppers and even retailers looking for presence inshopping centers or setting up of their own conceptstore. Retailers are spoilt for choice, and in the processcreate pressure on levels of rentals and occupancyachievement amongst some competing shopping centers. In efforts to provide more integrated shoppingcenters, owners of shopping centers brought in excitingnew tenants to entice shoppers, as evidenced in theinflux of new retailers, both international and local in

the year under review. Some existing shopping centers,due to the tough competition and higher supply ofretail space, are also force to reposition or upgrade theirshopping centers through upgrading of facilities, refurbishments, and adopting new marketing conceptsor image for their shopping centers including being specialty shopping centers. There is also a growing trendof hypermarket operators building their outlet towardsthe mall style direction with their own niche of tenantmix.

Despite these challenges, the Company’s shoppingcenter management business in the year under reviewremained resilient with almost all its shopping centersreporting higher growth in income. The occupancyrates in our shopping centers also remain high at anaverage of 99% occupancy. The continuous good performance is mainly due to the Company’s vast experience in the management of shopping centers andits ability to continuously provide good tenant mix and also in maintaining the attractiveness of the malls toshoppers and tenants alike.

During the year under review, the Company added twonew shopping centers to its property management business with the opening of JUSCO Permas Jaya shopping center in Johor Bahru and also JUSCO MetroPrima shopping center in Kepong, Kuala Lumpur.

JUSCO Permas Jaya shopping center, for which theCompany leases property from a third party, sits onapproxmately 16 acres of land, and is a one level shoppingcenter, strategically located within an affluent residential

29


neighborhood and a new township area. It has beendesigned with a new contemporary outlook of high ceilings which provides customers with a good, conducive, new shopping environment. Besides havingJUSCO as its anchor tenant, the shopping center also hada variety of fifty specialty tenants with food and beveragesbeing the highlights including the Company’s very ownupscale foodcourt ARENA Restaurant which offers localand international cuisine.

Jusco Metro Prima was opened to the public on 15January 2004 and is strategically located within Kepong’sindustrial and residential area, in Kuala Lumpur, andalso cater to the needs of residents staying in Bandar SriDamansara, Selayang and Gombak. The shopping center stands on an approximately 9.4 acres of land andhas a gross built up area of approximately 906,497square feet and a net lettable area of approximately356,000 square feet. Besides JUSCO as an anchor tenantthrough its general merchandise store and supermarket,there are seventy specialty tenants. JUSCO Metro Prima,Kepong, which is the Company’s seventh store cumshopping center in the Klang Valley region, is positioned as a shopping center with the most updatedshopping design, featuring lifestyle concepts for thewhole family and elegantly equipped to provide a comfortable and conducive environment for the shoppers.

On its shopping center operations, the Companybelieves that with its strong management team and itsfocus on ensuring that its malls are well maintained,properly marketed through creative promotional activities in the malls and having appropriate tenantmix, its shopping centers will continue to be the shopping centers of choice, for tenants and shoppers

alike. On its tenant mix which the Company constantlyreviews, efforts are being made to bring in internationalretailers into the local retail scene, to further enhance itsshopping centers’ image.

Human ResourceHuman resource will be the key factor in driving theCompany forward. As the retailing business is highlylabor intensive, human resource management played apivotal role in ensuring that a retailer and its trained staffcontinue to provide the highest quality of customerservices.

In this respect, the Company has continue to investtime and resources in its human resources developmentwhereby various initiatives had been implemented during the year to ensure that its employees are notonly equipped with the required skill levels for theirjobs but are also appropriately remunerated in theirsalaries and welfare. The recruitment process had alsobeen strengthened to ensure that candidates recruitedmet with the Company’s requirements. The Companythrough its management trainee scheme had also continued to tap on the reservoir of new graduates whoare ready to pursue a career in retailing.

In preparation for its expansions, the Company hadtaken steps to improve mobility of its employees withinthe organisation through job and organisationalchange, providing opportunities for staff from differentsections and levels in the organisation to be entrustedwith new roles and responsibilities to further broadentheir retail working experience. Apart from retail skills,employees, in particular those of middle manageriallevel are provided with management skills training aspart of their career development plan.

30


In addition, JUSCO-OUM Retail Center which theCompany had established in a collaboration with OpenUniversity of Malaysia, continued to provide educationand training for those who are interested in retailing asa career. On 8 April 2003, the first batch of eighty ninegraduates received their Career Certificate in RetailingOperations from the center. Another two hundred andtwenty five students are currently pursuing certificatesand diplomas in retailing. The retailing programmeaims to equip the students with the necessary practicalskills and knowledge to face the stiff challenges in theretail industry.

The Company continued its Japan Management Traineesscheme last year whereby selected employees are sent toJapan for a six month duration of training attachmentswith retail stores in Japan. The second batch of trainees isnow currently attached at store operations in variouscapacities and the retail knowledge that they had gainedin Japan had certainly enabled them to apply and upgradetheir daily job performance. The programme is ongoingand currently, a third batch of trainees has been selectedto undergo similiar training stint in Japan.

As part of its continuous efforts to upgrade its customerservices, the Company organised its second “Show andTell Contest” for a three-month period in the year underreview during which cashiers are selected by customersbased on the level of services provided by the cashiers.The event provides opportunities to further enhance thecustomer and retailer relationship besides supporting thegovernment’s call to promote Malaysia as a shoppinghaven.

The Company also placed strong emphasis on communication flow within the organisation andemployees are constantly updated and informed of messages from management, policies and proceduresupdate and happenings in the Company through regular newsletters, briefings and meetings conducted atvarious levels of the organisation.

Corporate CitizenshipThe Company continues to organise charity fund drivesthrough its With All Our Hearts Charity Fund, not only to raise donations from the public but also to continuously create awareness of the need to help poor and needy Malaysian youth and children for theireducation, medical and other basic needs. As is the tradition in line with its mission to green the earth forfuture generations and to show love and care for the environment, whenever a new store opens theCompany organises tree planting ceremonies in its

surroundings. Every JUSCO outlet has numerous treesand flowers in its surrounding to provide shade, fresh air and beautiful landscaped environment for customers to enjoy. Thus, during the opening of itsstores in Permas Jaya, Johor Bahru and Metro Prima,Kepong, the Company continued with this tradition asa way of preserving the environment and also as a wayof interacting with the local communities especiallyyoung children and students. The Company hoped that through its tree planting activities, it will be able to develop long lasting relationships with the local communities and uphold its simple philosophy of“Customers come first”.

As part of its mission to be continuously involved infund-raising activities and events for the benefit of theMalaysian children and youth, the Company had alsoin the year under review, through its With All OurHearts Charity Fund, and in collaboration with HospitalUniversiti Kebangsaan Malaysia (HUKM), donatedRM100,000 for the upgrading of the ThalassaemiaCenter, a day care center for Thalassaemia patients,who are mainly children.

While With All Our Hearts represents the Company’scorporate citizenship at a corporate level, each andevery JUSCO outlet, on its own, is also involved in community services such as recycling campaigns, blooddonation drives, charity functions for children and othercommunity projects involving the local communities.There are also educational tours for school children toour stores which allows them the opportunity to have abetter understanding of retailing operations. An Englishlanguage motivational camp for school children was alsosponsored by the Company in the year under review.

In the new financial year, the Company will celebrateits 20th Anniversary in Malaysia and a massive treeplanting ceremony will be carried out in Malaysia,together with participation from AEON Japan.

ProspectsFor the new financial year, the Company is confidentthat with its retail format, strategies, full year operationof its new stores and the government’s continuousefforts to stimulate and sustain the economic growth,its performance will be better in the coming year.

The Company remained committed to its long termplan and will concentrate its resources on areas of humanresource development, streamlining of its logistics operations, merchandising procurement strategies, newbusinesses development, shopping center development

31


and information technology enhancement to cater toits expanding business.

Customer service remained a primary focus area for theCompany as it believes that the strategy to stay competitive does not only lie in the competitive pricingbut also in factors such as customer service, merchandiseassortment and quality, and in providing a conduciveenvironment for the customers to shop in. Shoppers’behaviour are influenced not only by the value of themerchandise purchased but also by the level of customer service that they received including the conveniences and facilities provided.

While ensuring that its existing operations will continueto operate efficiently, the Company also continues tocreate new innovative merchandise, new business formatsfor its business. Useful consumer insights and feedbackwill be acted on by the Company to plan for the right merchandise assortment and quality in its stores.Customer profiles especially from its J CARD membershipbase will be use to plan and design the right layout and format for its stores. As with previous years, theCompany will embark on refurbishment programs forsome of its stores in the coming year.

The Company will continue to source for expansion opportunities in untapped retail markets including newpopulation growth corridors in various parts of thecountry, adopting appropriate business and store formats according to size of catchment area and its resident profiles.

20th Anniversary CelebrationThe Company will be celebrating its 20th Anniversaryin the new financial year and would like to take this opportunity to show its appreciation to its customers,employees, business associates, shareholders, friendsand the local communities whose support had enabledthe Company to achieve the success that it had to date.

The 20th Anniversary celebration was launched on 8April 2004 and many activities had been planned forthe year such as monthly prizes, special merchandise atspecial prices, tree planting activities, charities and culminating with a celebration in September 2004 tomark this special occasion.

The Company hopes that the 20th Anniversary celebration will allow it to foster closer relationshipswith the various parties who had contributed to its success.

Information TechnologyJaya Jusco IT strategy had been planned with JUSCOexpansion needs and competitive advantage in mind. Inthe year under review, our information technology hadbeen focusing on improving and innovating systems tofurther cater to the Company’s needs:1- Back-End systems

a) Human Resources (HR) System had been strengthened up in the year under review.Implementation of casual worker system,overtime control system and data collection automation from store have reduced administrativeworks and costs.

b) Non-Trade SystemA new non trade system has been developed tostreamline ordering of non-trade merchandiseand services.

c) Daily Merchandising SystemA system developed to provide management withquick, updated and easy to access information onthe Company’s daily performance.

2- Operations support systemAuto Price verification which allows verification ofmerchandise pricing at selling floors.

3- Barcoded Jusco Gift VouchersBarcoded Jusco Gift Vouchers are now commonlyused in JUSCO stores as added security features forthe vouchers.

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S t a t e m e n t o f C o r p o r a t e G o v e r n a n c e

Board ResponsibilitiesThe Board of Directors, in recognising the importanceof corporate governance, is committed to ensuring thatthe Company’s business and operations are in line withthe principles and best practices advocated in theMalaysian Code on Corporate Governance.

The Board of Directors assumes responsibilities in corporate governance and has established variousprocesses and committees to assist them in dischargingof these responsibilities. Among others, the Company’sstrategies and directions, shareholders and investors’relationship, annual budget, major capital expenditure,significant financial matters, and the adequacy andintegrity of internal controls including risk assessmentare within the responsibilities of the Board of Directors.

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

A. Directors

BOARD BALANCEThe Board of Directors consists of nine (9) members;comprising one (1) Non-Executive Chairman, one(1) Non-Executive Vice Chairman, two (2) ExecutiveDirectors and six (6) Non-Executive Directors ofwhom one (1) resigned on 23 July 2003. Of the six (6) Non-Executive Directors, three (3) areIndependent Directors.

Dato’ Chew Kong Seng is the Senior IndependentNon-Executive Director to whom concerns on mattersrelating to corporate governance of the Companycould be conveyed to.

The Directors bring a wide range of expertise andexperience in various fields such as economics, publicservices, accounting and finance, legal, humanresource, banking, marketing, taxation, generalmanagement, retail management and propertymanagement services. All Board members participateand deliberate on the issues and matters affectingthe Company.

The profile of each Director is presented on page 20to page 22 of the Annual Report.

Board MeetingsThe Board met four (4) times at regular intervalsduring the financial year ended 29 February 2004.The details of attendance of each Director at theBoard meetings held during the financial year are asfollows:

SUPPLY OF INFORMATIONThe Company Secretary ensures that all Board meetings are furnished with proper agendas. Boardpapers and reports providing updates on financial,operational and corporate developments includingmatters such as the Company’s corporate citizenshipprogram and staff welfare matters are circulated priorto the meetings to all Directors for them to dischargetheir duties effectively. The Directors have full accessto the advice and services of the Company Secretary.In addition, the Directors, if necessary, may also seekprofessional advice, at the Company’s expense. TheDirectors may also consult the Chairman and otherBoard members prior to seeking any independentprofessional advice.

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

Directors also from time to time visited existingstores and/or new sites to have a thorough under-standing of the Company’s operational matters.

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

Dato’ Abdullah bin Mohd Yusof 4 / 4

Mr. Toshiji Tokiwa 2 / 4

Mr. Akihito Tanaka

(resigned on 23 July 2003) 1 / 1

Mr. Tatsuichi Yamaguchi

(appointed on 23 July 2003) 3 / 3

Mr. Soichi Okazaki 4 / 4

Mr. Masato Yokoyama 4 / 4

Encik Ramli bin Ibrahim 4 / 4

Brig. Jen. (B) Dato' Mohd Idris bin Saman 4 / 4

Datuk Zawawi bin Mahmuddin 4 / 4

Dato’ Chew Kong Seng 4 / 4

Number of meetings attended/held

during the Director’sterm in officeName of Director


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THE NOMINATION COMMITTEEThe Nomination Committee has been set up with itsterms of reference approved on 11 January 2002. Mr. Tatsuichi Yamaguchi who was appointed a NonExecutive Director on 23 July 2003 was also appointedthe Chairman of the Nomination Committee afterthe resignation of Mr. Akihito Tanaka on 23 July2003.The committee’s other members are Dato’Abdullah bin Mohd Yusof, Dato’ Chew Kong Seng,Brig. Jen. (B) Dato’ Mohd Idris bin Saman and DatukZawawi bin Mahmuddin. The committee conductedtwo (2) meetings in the financial year under review.

The duties and responsibilities of the Committee,among others, are to recommend to the Board, candidates for directorship, directors to fill seats onBoard Committees and to review annually therequired mix of skills and experience of the Boardincluding the effectiveness of the Board as a wholeand the contribution from each Director.

The Board, through the Nomination Committee, on21 April 2004 has reviewed the annual assessment ofthe Directors’ performance and contribution, andthe required mix of skills and experience of theBoard to function competently and efficiently as awhole. The Board is pleased to state that its currentcomposition of members meets the requirement ofa competent and effective Board.

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

THE AUDIT COMMITTEEThe Board is also assisted by the Audit Committeewhose members, terms of reference and activities inthe financial year under review are stated on page 36to 37 of this Annual Report.

B. Directors Remuneration

THE REMUNERATION COMMITTEEMr. Tatsuichi Yamaguchi who was appointed a Non-Executive Director on 23 July 2003 was alsoappointed the Chairman of the RemunerationCommittee after the resignation of Mr. AkihitoTanaka on 23 July 2003. The Committee is made upof Non-Executive Directors whose other membersare Dato’ Abdullah bin Mohd Yusof and Encik Ramli

bin Ibrahim. The duties of the Committee shall beto recommend to the Board the remuneration of allDirectors in all its form. Executive Directors play no part in decision-making or determining their own renumeration.

The committee met one (1) time in the financialyear under review to determine the remunerationpackages of Non-Executive Directors, including theNon-Executive Chairman and is a matter for theboard as a whole. Individual Directors concerned do not participate in the discussion on their own remuneration.

The breakdown of the remuneration of the Directorsduring the financial year under review is as follows:

1. Aggregate remuneration of the Directors categorisedinto appropriate components:

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


Fees 240,000 690,000 930,000

Salaries 699,791 - 699,791

Benefits-in-kind 21,000 14,700 35,700

Other emoluments 175,863 - 175,863

1,136,654 704,700 1,841,354

ExecutiveDirectors

RM

Non-ExecutiveDirectors

RMTotalRM

Less than RM50,000 - 2 2

RM50,001 to RM100,000 - 4 4

RM100,001 to RM150,000 - - -

RM150,001 to RM200,000 - 2 2

RM200,001 to RM250,000 - - -

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 2 - 2

2 8 10

ExecutiveRange of Remuneration Non-Executive

Number of Directors

Total

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C. Shareholders

INVESTORS AND SHAREHOLDERS COMMUNICATIONIt has always been the Company’s practice to maintaingood relationship with its shareholders. Major corporate developments and happenings in theCompany have always been duly and promptlyannounced to all shareholders, in line with BursaMalaysia Securities Berhad’s objectives of ensuringtransparency and good corporate governance practice.

The Company’s financial performance, major corporate developments and other relevant information are promptly disseminated to share-holders and investors via announcements of itsquarterly performance, annual report, corporateannouncements to Bursa Malaysia Securities Berhadand press conferences. Further update of theCompany’s activities and operations are also disseminated to shareholders and investors throughdialogue with analysts, fund managers, investorsand the media.

Besides highlighting retail business promotionalactivities, the Company’s website (www.jusco.com.my)provides an update of the Company’s latest performance released to Bursa Malaysia SecuritiesBerhad as well as other corporate information to thepublic.

During the Annual General Meeting, shareholdersare usually given a presentation on the Company’sperformance and major activities that were carriedout by the Company for the year under review.During the meeting, shareholders have the opportunities to enquire and comment on theCompany’s performance and operations.

D. Accountability and Audit

FINANCIAL REPORTINGIn its financial reporting via quarterly announcementsof results, annual financial statements and annualreport presentation including the Chairman’s

Statement and Review of Operations, the Board ofDirectors always provides a comprehensive assessmentof the Company’s performance and prospects for thebenefits of shareholders, investors and interestedparties. The Audit Committee also assists the Boardin overseeing the Company’s financial reportingprocesses.

Directors’ responsibility statement in respect of thepreparation of the audited financial statementsThe Board of Directors is responsible for the preparationof the financial statements for each financial year ofthe Company, which gives a true and fair view of thestate of affairs of the Company and its results andcash flow for the financial year ended.

The Board of Directors has ensured that the financialstatements have been prepared in accordance withapplicable approved accounting standards inMalaysia, the requirements of the Companies Act1965, Bursa Malaysia Securities Berhad and other regulatory bodies. In preparing the financial statements, the Board of Directors has ascertainedthat accounting policies and reasonable prudentjudgment and estimates have been consistently applied.

The Directors are responsible for keeping properaccounting records, which disclose with reasonableaccuracy at any time the financial position of theCompany and to enable them to ensure that the

35


financial statements comply with the CompaniesAct, 1965. The Directors have a general responsibilityfor taking such steps as is reasonably open to themto safeguard the assets of the Company, to preventand detect fraud and other irregularities.

GOING CONCERNThe Board of Directors confirmed that the Companyhas adequate resources to continue its business inthe foreseeable future. For this reason, they continueto adopt the going concern basis for preparing thefinancial statements.

STATE OF INTERNAL CONTROLThe Statement of Internal Control set out on page39 of the Annual Report provides an overview of thestate of internal controls within the Company

RELATIONSHIP WITH THE EXTERNALAUDITORSThe Board of Directors with the assistance of theAudit Committee maintains a formal and transparentrelationship with the Company’s External Auditorsthrough the Audit Committee, Board and formalmeetings whereby issues are discussed.

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

COMPLIANCE WITH MALAYSIAN CODE ON CORPORATE GOVERNANCEThe Board of Directors is pleased to state that theCompany was in compliance with all the principlesand best practices as advocated in the MalaysianCode on Corporate Governance except on disclosureof each individual Director’s remuneration.

36


Te r m s o f R e f e r e n c e o f t h eA u d i t C o m m i t t e e

ConstitutionThe Board hereby resolves to establish a Committee ofthe Board to be known as the Audit Committee with thefollowing terms of reference.

Composition of Audit CommitteeThe Committee shall be appointed by the Board fromamong its members and shall consist of not less than 3members of whom a majority shall not be:

a) executive directors of the company or relatedcorporation.

b)a spouse, parent, brother, sister, son or adopted son,daughter or adopted daughter of an executivedirector of the company or any related corporation, or

c) any person, having a relationship which, in theopinion of the Board of Directors, would interferewith the exercise of independent judgement in carrying out the functions of the audit committee.

The Committee shall include at least one person who isa member of the Malaysian Institute of Accountants(MIA) or alternatively a person who must have at least 3years’ working experience and have passed the examinations specified in Part I of the 1st. Schedule ofthe Accountants Act 1967 or is a member of one of theassociations specified in Part II of the said Schedule. No alternate director shall be appointed as a member ofthe Committee.

The Committee shall elect a chairperson from amongstits members who is not an executive director or employeeof the company or any related corporation. In the eventthat a member of the audit committee resigns, dies orfor any other reason ceases to be a member, with theresult that the number of members is reduced to belowthree, the Board of Directors shall, within three monthsof that event, appoint such number of new members asmay be required to make up the minimum number ofthree members.

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

MeetingsThe Committee shall meet at least four times a year. Inaddition, the chairperson shall convene a meeting ofthe Committee if requested to do so by any member, themanagement or the internal or external auditors to consider any matter within the scope and responsibilitiesof the Committee.

Attendance at MeetingsThe General Manager of Finance, the Head of InternalAudit, the Company Secretary, the Finance Manager,the Compliance Officer and a representative of theExternal Auditors shall normally attend meetings.However, the Committee may invite any person to be inattendance to assist it in its deliberations.

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

Secretary to Audit CommitteeThe Company Secretary shall be the secretary of thecommittee and shall be responsible for drawing up theagenda in consultation with the chairperson. The agendatogether with the relevant explanatory papers and documents shall be circulated to the committee membersprior to each meeting.

The secretary shall be responsible for recording attendance of all members and invitees, keeping theminutes of the meeting of the Committee, circulatingthem to committee members and to the other membersof the Board of Directors and for ensuring compliancewith Bursa Malaysia Securities Berhad requirements.

Reporting ProceduresThe Committee shall prepare an annual report to theBoard that provides a summary of the activities of theCommittee for inclusion in the Company’s annual report.The Committee shall assist the Board in preparing thefollowing for publication in the Company’s annualreport:

- Statement of the Company’s application of theprinciples set out in Part I of the Malaysian Codeon Corporate Governance.

- Statement on the extent of compliance with theBest Practices in Corporate Governance set out inPart II of the Malaysian Code on CorporateGovernance, specifying reasons for any areas of

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

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

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

Non-Executive Director)

DesignationAudit Committee

37


non-compliance (if any) and the alternatives adoptedin such areas.

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

- Statement about the state of Internal Control of theCompany.

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

QuorumA quorum shall consist of a majority of committeemembers present at the meeting who are IndependentDirectors.

AuthorityThe Committee is authorised by the Board to:

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

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

it requires for the purpose of discharging its functionsand responsibilities.

- Have direct communication channels with theExternal Auditors and person(s) carrying out theinternal audit function or activity.

- Obtain outside legal or other independent professional advice and secure the attendance ofoutsiders with relevant experience and expertise ifit considers this necessary.

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

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

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

- To review any financial information for publication,including quarterly and annual financial statementsbefore submission to the Board.The review shall focus on:• Any changes in accounting policies and practices.• Major judgmental areas • Significant audit adjustments from the External

Auditors

• The going concern assumption.• Compliance with accounting standards auditors.• Compliance with stock exchange and legal

requirements. - To review with the External Auditors their audit

plan, scope and nature of audit for the Company.- The External Auditors’ audit report, areas of concern

arising from the audit and any other matters theExternal Auditors may wish to discuss (in theabsence of management if necessary).

- To assess the adequacy and effectiveness of the systems of internal control and accounting controlprocedures of the Company by reviewing theExternal and/or Internal Auditors’ management letters and management responses.

- To discuss problems and reservations arising fromthe interim and final audits and any matters theauditors may wish to discuss.

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

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

- To determine extent of cooperation and assistancegiven by employees.

- To review any related party transactions and conflictof interest situations that may arise within theCompany.

- To consider the appointment of the ExternalAuditors, the terms of reference of their appoint-ment and any question of resignation and dismissalbefore recommending to the Board

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

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

Overseeing the Internal Audit FunctionThe Committee shall oversees all internal audit functionsand is authorised to commission investigations to beconducted by Internal Audit as it deems fit. The InternalAuditor shall report directly to the Committee and shallhave direct access to the Chairman of the Committee.

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

Number of meetings attended/held during themember’s term in office

38


T h e A u d i t C o m m i t t e e

The Audit Committee comprises the following members:

Terms of Reference of The AuditCommitteeDuring the financial year under review, there were nochanges to the terms of reference of the Audit Committee.

MeetingsDuring the financial year under review, the AuditCommittee convened four (4) meetings. The attendancerecords of the member of the Audit Committee are asfollows:

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

The Company Secretary was present in all the meetings.Representative of the External Auditors, Messrs KPMGDesa Megat & Co., the General Manager of Finance, theHead of Internal Audit, the Finance Manager, theCompliance Officer, normally attended the meetingsand related management personnel attended the meetingsupon invitation.

Summary of The Audit CommitteeActivities during the Year UnderReviewDuring the year under review, the Audit Committee carriedout its duties in accordance with its terms of referenceas follows:

a. Reviewed the quarterly unaudited financial resultand annual audited financial statements beforesubmission to the Board for consideration andapproval.

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

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

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

e. Reviewed the internal audit plan, considered themajor findings of internal audit, fraud investigationsand actions taken by management in response tothe audit findings.

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

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

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

findings and results of audit recommendations.

On 13 January 2004, the Audit Committee also held onemeeting with the External Auditors without the presenceof the management, to allow the auditors to discuss anyissues arising from the audit exercise or any other matters, which the external auditors wished to raise.

Summary of The Internal AuditDepartment’s ActivitiesDuring the year under review, the Internal Audit department carried out the following activities:

a. Presented and obtained approval from AuditCommittee, the 2003/2004 internal audit plan,which supplemented the approved the 3-year internalaudit plan, audit strategy and audit scope of work.

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

c. Monitored and ensured management implementedcorrective action plans.

d. Monitored compliance with policies and procedurese. 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 MalaysianCode on Corporate Governance.

g. Assisted the Board of Directors and Management byreviewing the risk policy, control strategies in theorganization and implementation of an enterpriserisk management framework.

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

practices throughout the Company.

Dato’ Chew Kong Seng (Chairman) 4 / 4

Encik Ramli bin Ibrahim 4 / 4

Brig. Jen. (B) Dato' Mohd Idris bin Saman 4 / 4

Name of Directors

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

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

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

39


S t a t e m e n t o f I n t e r n a l C o n t r o l

Board ResponsibilitiesThe Board of Directors recognises its responsibilitiesover the Company’s system of internal controls, coveringall its financial and operating activities to safeguardshareholder’s investment and the Company’s assets.

The Board has an established on-going process for identifying, evaluating and managing the significantrisks encountered by the Company. The Board throughits Audit Committee regularly reviewed this process.

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

The Audit Committee assists the Board to review theadequacy and integrity of the system of internal controlsin the Company and to ensure that an appropriate mixof techniques is used to obtain the level of assurancerequired by the Board. The Audit Committee presentsits findings to the Board.

Internal Audit FunctionThe Audit Committee, assisted by the Internal AuditDepartment, provides the Board with the assurance itrequires on the adequacy and integrity of the system oninternal controls. The Internal Audit Department independently reviews the risk identification procedures and control processes implemented by themanagement and reports to the Audit Committee onquarterly basis.

The Internal Audit Department also carried out internalcontrol review on key activities of the Company’s business on the basis of a three-year internal audit planthat was presented and approved by the AuditCommittee. The internal audit function adopts a risk-based approach and prepares its audit strategy andplan based on the risk profiles of the major businessunits of the Company

System of Internal ControlsThe Board of Directors is responsible for managing thekey business risks of the Company and implementing appropriate internal control system to manage thoserisks. The Board reviewed the adequacy and integrity ofthe system of internal control as it operated during theyear and the following are the key elements of theCompany’s system of internal controls:

- The management structure of the Company formallydefines lines of responsibility and delegation of authority, for all aspect of the Company’s affairs.Senior management and business unit’s managerssubmit and present their operational performancereview as well as business plans and strategic measures in regularly held Executive Committeeand Management Meeting;

- The Board approves annual budget and reviews keybusiness variables and monitor the achievements ofthe Company’s performance on quarterly basis.

- The authorisation limits and approvals authoritythreshold of the Company encompasses internalcontrol procedures. These procedures are subject toregular reviews by the management to incorporatechanging business risks and operational efficiency.

- The Audit Committee is responsible for reviewingquarterly announcement to Bursa MalaysiaSecurities Berhad and statutory annual financialstatements prior to submission for Board’s approval.

- The Internal Audit Department periodically monitorsthe effectiveness and evaluates the proper functioningof the internal control system to ascertain compliancewith the control procedures and policies of theCompany. The Head of Internal Audit reports toAudit Committee on the status of the internal controlsystem on a quarterly basis.

- Project teams are set up from time to time to addressbusiness and operational issues to meet the businessobjectives and operational requirements of theCompany.

All the above-mentioned process has been in place andprovided reasonable assurance to the effectiveness of theinternal control system.

ConclusionThe Board of Directors reviewed the adequacy andintegrity of the system of internal control that provide reasonable assurance to the Company inachieving the business objectives. As the developmentof sound system of internal control is an on-goingprocess, the Board and the management maintain anon-going commitment and continue to take appropriatemeasures to strengthen the internal control environmentof the Company.

40


Other InformationMaterial Contracts involving directors and substantial shareholders.

Material contracts entered into by the Company whichinvolve Director’s and major shareholder’s interests andstill subsisting at the end of the financial year ended 29 February 2004 or entered into since the end of the previous financial year comprise the following:

a) On 12 October 2000, the Company entered into aTechnical Service Agreement with AEON Co. Ltd.(formerly known as JUSCO Co. Ltd.) whereby theCompany is granted the exclusive right by AEONCo. Ltd. to use their trademark in relation to goodsand services. The Company is also granted the non-exclusive right to use the information andknow-how, employed or developed by AEON Co.Ltd. for the management and operation of retailstores, wholesale business and related supportingactivities. The total cash consideration payable bythe Company to AEON Co. Ltd. for the year underreview amounted to RM8.061 million. AEON Co.Ltd. is a major shareholder of the Company.

b) On 1 July 1997, the Company entered into aFactoring Agreement with a related company,AEON Credit Service (M) Sdn Bhd (formerly knownas ACS Credit Service (M) Sdn Bhd) whereby theCompany’s goods sold on credit under its easy payment scheme are factored to AEON CreditService (M) Sdn Bhd. The debts sold to AEONCredit Service (M) Sdn Bhd are at full value of thegoods and upon the terms and conditions as statedin the factoring agreement. The total value of thedebts sold to AEON Credit Service (M) Sdn Bhd inthe year under review amounted to RM4.358 million.Dato’ Abdullah bin Mohd Yusof and Encik Ramlibin Ibrahim, both Directors of Jaya Jusco StoresBhd, are also Directors and major shareholders inAEON Credit Service (M) Sdn Bhd. AEON Co Ltd.has an indirect interest in AEON Credit Service (M)Sdn Bhd through AEON Credit Service Co. Ltd.

Non Audit FeesThe amount of non-statutory audit fees paid to externalauditor and its affiliates during the year under review isRM125,753, comprising of mainly tax services and halfyear audit services.

Revaluation Policy on LandedPropertiesThere is no revaluation policy on the Company’s landedproperties. The Company adopted the transitional provisions issued by Malaysian Accounting StandardsBoard (MASB) to retain the carrying amount on thebasis of their previous revaluation as stated in page 53of this Annual Report.

JAYA JUSCO STORES BHD (126926-H)(INCORPORATED IN MALAYSIA)

Registered Office: 4th Floor, Menara Kausar, Jalan 3/27 A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur

00000000000000010000000000000000000001000000000000000000000080000000900000000010000000000000000000000010000000000000000020000000000000005000000000000000000600000000000000010000000000000000000001000000000000000000000080000000900000000010000005000000000000000010000000000000000020000000000000005000000000000000000700000000000000010000000000000000000001000000000000000000000080000000900000000010000000000000000000000010000000000000000020000000000040005000000000000000000300000000000000010000000000000000000001000000000000000000000080000000900000000010000000000000000000000010000000000000000020000000000000005000000000000000000000010000000000000000020000000000000005000000000000000000030000000000000000006000000000000000010000000000000000000001000000000000000000000080000000900000000010000000000000000000000010000000000000000020000000000000005000000000000000000000000000000001000000000000000000000100000000000000000000000000000001000000000000000000000100000000000000000002008000000090000000001000000000000000000000001000000000000000002000000000000000500000000000000000000000000000000001000000000000000000000100000000000000000000008000000090000000000000000000000001000000000000000000000100000000000000000000008000000090000000001000000000000000000000001000000000000000002000000000000000500000000000000000000001000000000800000002000000000000000500000000000000000002000000000000000001000000000000000001000000000000000000000100000000000000000000008000000090000000000000000800000002000000000000000500000000000000000002000000000000000000000800000002000000000000000500000000000000000000000000000001000000000000000001000000F i n a n c i a l S t a t e m e n t s

For The Year Ended 29 February 2004

42


The Directors have pleasure in submitting their report and the audited financial statements of the Companyfor the year ended 29 February 2004.

Principal activities

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

Results

RM

Net profit for the year 63,587,683

Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review except asdisclosed in the financial statements.

Dividend

Since the end of the previous financial year, the Company paid a first and final dividend of 20% less taxtotalling RM12,636,000 in respect of the year ended 28 February 2003 on 22 July 2003.

The first and final dividend recommended by the Directors in respect of the year ended 29 February 2004 is20% less tax totalling RM12,636,000.

Directors of the Company

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

Dato’ Abdullah bin Mohd YusofToshiji TokiwaSoichi Okazaki Masato Yokoyama Tatsuichi Yamaguchi (appointed on 23.7.2003)Ramli bin IbrahimBrig. Jen. (B) Dato’ Mohd Idris bin Saman Datuk Zawawi bin Mahmuddin Dato’ Chew Kong Seng @ Chew Kong Huat Akihito Tanaka (resigned on 23.7.2003)

D i r e c t o r s ’ R e p o r tf o r t h e y e a r e n d e d 2 9 F e b r u a r y 2 0 0 4

43


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

Number of ordinary shares of RM1 eachAt At

1.3.2003 Acquired Sold 29.2.2004

Shareholdings in which Directorshave direct interest

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

Shareholdings in which Directorshave indirect interest

Dato’ Abdullah bin Mohd Yusof 10,421,500 - (4,745,500) 5,676,000Ramli bin Ibrahim 150,000 - (10,000) 140,000

None of the other Directors holding office at 29 February 2004 had any interest in the ordinary shares of theCompany during the financial year.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled toreceive any benefit (other than a benefit included in the aggregate amount of emoluments received or due andreceivable by Directors as shown in the financial statements) by reason of a contract made by the Companyor a related corporation with the Director or with a firm of which the Director is a member, or with a companyin which the Director has a substantial financial interest, except for certain Directors who may be deemed toderive a benefit by virtue of those transactions, advisory services and tenancy between the Company andcorporations in which the Directors are deemed to have interest.

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

Issue of shares

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

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the year.

44


Significant event during the financial year

During the financial year, the Company entered into a Sale and Purchase Agreement with Santun Abadi Sdn.Bhd. in respect of the acquisition of a piece of vacant land which is located in Mukim of Cheras, District ofHulu Langat, measuring an area of approximately 12.65 acres / 550,910 square feet for a total cashconsideration of RM13,772,750 for the purpose of constructing a new shopping center.

Other statutory information

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

i) all known bad debts have been written off and adequate provision made for doubtful debts, andii) all current assets have been stated at the lower of cost and net realisable value.

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

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

ii) that would render the value attributed to the current assets in the Company financial statementsmisleading, or

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

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

At the date of this report, there does not exist:

i) any charge on the assets of the Company that has arisen since the end of the financial year and whichsecures the liabilities of any other person, or

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

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

In the opinion of the Directors, except for the change in accounting policy on adoption of MASB 25, IncomeTaxes as disclosed in Note 23 to the financial statements, the results of the operations of the Company for thefinancial year ended 29 February 2004 have not been substantially affected by any item, transaction or eventof a material and unusual nature nor has any such item, transaction or event occurred in the interval betweenthe end of that financial year and the date of this report.

45


Auditors

The auditors, Messrs KPMG Desa Megat & Co., have indicated their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors:

…………………………………………………………Dato’ Abdullah bin Mohd Yusof

…………………………………………………………Soichi Okazaki

Kuala Lumpur,Date: 21 April 2004

46


B a l a n c e S h e e ta t 2 9 F e b r u a r y 2 0 0 4

Note 2004 2003RM RM

Property, plant and equipment 2 692,849,547 561,220,942

Investments 3 175,209 175,209

Current assets

Inventories 4 146,278,501 114,733,092

Trade and other receivables 5 30,456,668 23,678,951

Cash and cash equivalents 6 82,608,731 87,076,639

259,343,900 225,488,682

Current liabilities

Trade and other payables 7 408,956,270 299,328,875

Taxation 6,763,056 5,657,209

415,719,326 304,986,084

Net current liabilities (156,375,426) (79,497,402)

536,649,330 481,898,749

Financed by:

Capital and reserves

Share capital 8 87,750,000 87,750,000

Reserves 9 424,577,824 373,626,141

Shareholders’ funds 512,327,824 461,376,141

Long term and deferred liabilities

Deferred tax liabilities 10 24,321,506 20,522,608

536,649,330 481,898,749

- The financial statements were approved and authorised for issue by the Board of Directors on 21 April 2004.

- The notes set out on pages 50 to 68 form an integral part of, and should be read in conjunction with, these financial statements.

47


I n c o m e S t a t e m e n tf o r t h e y e a r e n d e d 2 9 F e b r u a r y 2 0 0 4

Note 2004 2003RM RM

Revenue 1,523,780,510 1,368,268,495

Other operating income 723,655 1,232,377

Changes in inventories 31,545,409 21,709,129

Net purchases (1,149,142,796) (1,022,713,496)

Staff costs (80,820,930) (70,461,328)

Depreciation (43,720,359) (37,988,453)

Operating expenses (187,094,866) (169,799,463)

Operating profit 11 95,270,623 90,247,261

Interest expenses 13 (43,996) (142,924)

Interest income 1,061,476 728,699

Profit before taxation 96,288,103 90,833,036

Tax expense 14 (32,700,420) (30,288,018)

Net profit for the year 63,587,683 60,545,018

Basic earnings per ordinary share (sen) 15 72.5 69.0

Dividend per ordinary share – net (sen) 16 14.4 14.4

The notes set out on pages 50 to 68 form an integral part of, and should be read in conjunction with, these financial statements.

48


S t a t e m e n t o f C h a n g e s i n E q u i t yf o r t h e y e a r e n d e d 2 9 F e b r u a r y 2 0 0 4

Non-distributable DistributableShare Share Revaluation Retained

Note capital premium reserve profits TotalRM RM RM RM RM

At 1 March 2002 87,750,000 108,488,040 55,351,892 175,766,901 427,356,833

Effect of adopting

MASB 25 23 - - (19,635,495) 5,745,785 (13,889,710)

Restated balance 87,750,000 108,488,040 35,716,397 181,512,686 413,467,123

Net profit for the year - - - 60,545,018 60,545,018

Dividend - 2002 final - - - (12,636,000) (12,636,000)

Net gains and losses not

recognised in the

income statement:

Transfer from

revaluation reserve

to retained profits - - (517,121) 517,121 -

At 28 February 2003 87,750,000 108,488,040 35,199,276 229,938,825 461,376,141

At 1 March 2003 87,750,000 108,488,040 55,351,892 223,474,817 475,064,749

Effect of adopting

MASB 25 23 - - (20,152,616) 6,464,008 (13,688,608)

Restated balance 87,750,000 108,488,040 35,199,276 229,938,825 461,376,141

Net profit for the year - - - 63,587,683 63,587,683

Dividend - 2003 final - - - (12,636,000) (12,636,000)

Net gains and losses not

recognised in the

income statement:

Transfer from

revaluation reserve

to retained profits - - (517,121) 517,121 -

At 29 February 2004 87,750,000 108,488,040 34,682,155 281,407,629 512,327,824

Note 8 Note 9 Note 9 Note 9


49


C a s h F l o w S t a t e m e n tf o r t h e y e a r e n d e d 2 9 F e b r u a r y 2 0 0 4

2004 2003RM RM

Cash flows from operating activities


Adjustments for:

Depreciation 43,720,359 37,988,453

Interest expense 43,996 142,924

Interest income (1,061,476) (728,699)

Loss/(Gain) on disposal of property, plant and equipment 105,836 (313,093)

Property, plant and equipment written off 144,248 422,501

Operating profit before working capital changes 139,241,066 128,345,122

Changes in working capital:

Inventories (31,545,409) (21,709,129)

Trade and other receivables (6,777,717) 1,411,839

Trade and other payables 109,627,395 37,439,759

Cash generated from operations 210,545,335 145,487,591

Income taxes paid (27,795,675) (24,802,931)

Net cash generated from operating activities 182,749,660 120,684,660

Cash flows from investing activities

Purchase of property, plant and equipment (175,695,673) (91,306,135)

Proceeds from disposal of property, plant and equipment 96,625 617,046

Interest received 1,061,476 728,699

Net cash used in investing activities (174,537,572) (89,960,390)

Cash flows from financing activities

Dividend paid to shareholders of the Company (12,636,000) (12,636,000)

Interest paid (43,996) (467,725)

Net cash used in financing activities (12,679,996) (13,103,725)

Net (decrease)/increase in cash and cash equivalents (4,467,908) 17,620,545

Cash and cash equivalents at beginning of year 87,076,639 69,456,094

Cash and cash equivalents at end of year 82,608,731 87,076,639

Cash and cash equivalents comprise:

Cash and bank balances 23,708,731 68,936,639

Deposits with licensed financial institutions 58,900,000 18,140,000

82,608,731 87,076,639


50


N o t e s t o t h eF i n a n c i a l S t a t e m e n t s

1. Summary of significant accounting policies

The following accounting policies are adopted by the Company and are consistent with those adopted inthe previous years except for the adoption of the following:

(i) MASB 25, Income Taxes; (ii) MASB 27, Borrowing Cost; and(iii) MASB 29, Employee Benefits

In addition to the new policies and extended disclosures where required by these new standards, theeffects of the changes in the above accounting policies are disclosed in Note 23 to these financialstatements.

(a) Basis of accounting The financial statements of the Company are prepared on the historical cost basis except as disclosedin the notes to the financial statements and in compliance with the provisions of the Companies Act,1965 and applicable approved accounting standards in Malaysia.

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

(c) Property, plant and equipmentProperty, plant and equipment except for freehold land and construction work-in-progress are statedat cost/valuation less accumulated depreciation and accumulated impairment losses, if any.

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

Property, plant and equipment retired from active use and held for disposal are stated at the carryingamount at the date when the asset is retired from active use, less impairment losses, if any.

DepreciationFreehold land and construction work-in-progress are not amortised. Long term leasehold land isamortised over a period of 95-99 years. Buildings are depreciated on a straight-line basis over theshorter of 50 years or the lease period. The straight-line method is used to write off the cost of theother assets over the term of their estimated useful lives at the following principal annual rates:

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

(d) InvestmentsLong term investments are stated at cost. An allowance is made when the Directors are of the viewthat there is a diminution in their value which is other than temporary.

(e) Trade and other receivablesTrade and other receivables are stated at cost less allowance for doubtful debts, where applicable.

51


(f) Employee benefitsDefined contribution plansObligations for contributions to defined contribution plans are recognised as an expense in theincome statement as incurred.

(g) LiabilitiesTrade and other payables are stated at cost.

(h) InventoriesInventories are stated at the lower of cost and net realisable value with weighted average cost beingthe main basis for cost. Cost comprises the weighted average cost of merchandise derived at by usingthe Retail Inventory Method. Weighted average cost includes related charges incurred in purchasingsuch merchandise.

(i) Cash and cash equivalentsCash and cash equivalents consist of cash on hand, balances with banks and highly liquidinvestments which have an insignificant risk of changes in value.

(j) ImpairmentThe carrying amount of assets, other than inventories and financial assets, are reviewed at eachbalance sheet date to determine whether there is any indication of impairment. If any suchindication exists, the asset’s recoverable amount is estimated. An impairment loss is recognisedwhenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds itsrecoverable amount. Impairment losses are recognised in the income statement.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessingvalue in use, estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risksspecific to the asset. For an asset that does not generate largely independent cash inflows, therecoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount and it is reversed only to the extent that the asset’s carrying amount does notexceed the carrying amount that would have been determined, net of depreciation or amortisation,if no impairment loss had been recognised. The reversal is recognised in the income statement, unlessit reverses an impairment loss on a revalued asset, in which case it is taken to equity.

(k) Income taxTax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised inthe income statement except to the extent that it relates to items recognised directly in equity, inwhich case it is recognised in equity.

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

Deferred tax is provided, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying amounts in the financial statements. Temporarydifferences are not recognised for the initial recognition of assets or liabilities that at the time of thetransaction affects neither accounting nor taxable profit. The amount of deferred tax provided isbased on the expected manner of realisation or settlement of the carrying amount of assets andliabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits willbe available against which the asset can be utilised.

52


(l) Foreign currency transactionsTransactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at thedate of the transactions. Assets and liabilities denominated in foreign currencies at the balance sheetdate are translated to Ringgit Malaysia at the foreign exchange rates ruling at that date. Foreignexchange differences arising on translation are recognised in the income statement.

The closing rates used in the translation of foreign currency assets and liabilities are as follows:

2004 2003RM RM

Japanese Yen 100 3.44 3.20

(m) Revenue

i) Goods sold and services renderedRevenue from the sale of goods represents gross trading sales, including concessionaires lessreturns and discounts and is recognised in the income statement when the significant risks andrewards of ownership have been transferred to the buyer.

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

ii) Interest incomeInterest income is recognised in the income statement as it accrues, taking into account theeffective yield on the asset.

(n) Expenses

i) Operating lease paymentsPayments made under operating leases are recognised in the income statement on a straight-linebasis over the term of the lease.

ii) Interest expenseAll interest and other costs incurred in connection with borrowings are expensed as incurred.

53


2. Property, plant and equipment

Balance at (Disposal/ Transfer Balance at1.3.2003 Addition Write off) in/(out) 29.2.2004

RM RM RM RM RM

Cost/Valuation

Freehold land at cost 34,696,138 - - - 34,696,138

Leasehold land at

valuation 60,761,004 - - - 60,761,004

Buildings at valuation 126,003,413 - - - 126,003,413

Leasehold land at cost 18,891,139 36,161,734 - 3,606,970 58,659,843

Buildings at cost 192,093,185 51,150,420 - 1,235,656 244,479,261

Structures 62,431,142 9,132,905 (59,718) 894,935 72,399,264

Office equipment 5,336,529 670,958 (361,101) - 5,646,386

Machinery and equipment 117,879,319 43,299,936 (471,428) - 160,707,827

Furniture, fixtures and

fittings 106,568,629 23,055,492 (1,002,860) - 128,621,261

Motor vehicles 3,572,151 604,980 (159,153) - 4,017,978

IT equipment 517,883 4,472 (262,576) - 259,779

Construction work-in-

progress 6,440,734 11,614,776 - (5,737,561) 12,317,949

735,191,266 175,695,673 (2,316,836) - 908,570,103

Balance at Charge for (Disposal/ Transfer Balance at1.3.2003 the year Write off) in/(out) 29.2.2004

RM RM RM RM RM

Accumulated depreciation

Leasehold land at valuation 5,356,809 569,322 - - 5,926,131

Buildings at valuation 21,891,166 2,520,068 - - 24,411,234

Leasehold land at cost 1,557,839 268,636 - - 1,826,475

Buildings at cost 29,639,245 4,657,456 - - 34,296,701

Structures 11,418,541 6,465,891 (17,681) - 17,866,751

Office equipment 3,009,760 450,276 (327,711) - 3,132,325

Machinery and equipment 33,784,531 12,566,266 (432,929) - 45,917,868

Furniture, fixtures and

fittings 64,915,990 15,713,650 (837,677) - 79,791,963

Motor vehicles 1,951,563 485,869 (91,559) - 2,345,873

IT equipment 444,880 22,925 (262,570) - 205,235

173,970,324 43,720,359 (1,970,127) - 215,720,556

54


Net book value Depreciation2004 2003 2003RM RM RM

Freehold land at cost 34,696,138 34,696,138 -

Leasehold land at valuation 54,834,873 55,404,195 470,986

Buildings at valuation 101,592,179 104,112,247 1,463,008

Leasehold land at cost 56,833,368 17,333,300 333,500

Buildings at cost 210,182,560 162,453,940 5,487,911

Structures 54,532,513 51,012,601 5,530,841

Office equipment 2,514,061 2,326,769 427,909

Machinery and equipment 114,789,959 84,094,788 9,887,769

Furniture, fixtures and fittings 48,829,298 41,652,639 13,905,352

Motor vehicles 1,672,105 1,620,588 417,266

IT equipment 54,544 73,003 63,911

Construction work-in-progress 12,317,949 6,440,734 -

692,849,547 561,220,942 37,988,453

One of the buildings of the Company is situated on land belonging to a third party.

The leasehold land and buildings stated at Directors’ valuation are based on professional valuation carried

out by an independent firm of valuers in February 1995 using the open market value and on an existing

use basis. In accordance with the transitional provisions issued by Malaysian Accounting Standards Board

("MASB") upon adoption of International Accounting Standard No. 16 (Revised), "Property, Plant and

Equipment", the valuation of these assets have not been updated, and they continue to be stated at their

existing carrying amounts less accumulated depreciation.

Had the leasehold land and buildings been carried at historical cost less accumulated depreciation, the

carrying amount of the revalued assets that would have been included in the financial statements at the

end of the year would be as follows:

2004 2003RM RM

Long term leasehold land 9,702,240 9,818,959

Buildings 63,929,969 65,625,892

73,632,209 75,444,851

3. Investments

2004 2003RM RM

Long term

Unquoted shares, at cost

Golf membership 45,209 45,209

Equity investment 130,000 130,000

175,209 175,209

55


4. Inventories

2004 2003RM RM

At cost:

Retail merchandise 103,163,667 80,431,999

Food and others 43,114,834 34,301,093

146,278,501 114,733,092

5. Trade and other receivables

2004 2003RM RM

Trade receivables 12,591,191 8,521,314

Less: Allowance for doubtful debts (1,075,903) (1,117,038)

11,515,288 7,404,276

Other receivables and prepayments 3,945,263 4,146,162

Rental and utility deposits 14,996,117 12,128,513

30,456,668 23,678,951

Included in trade receivables is an amount of RM719,424 (2003 - RM764,050) due from companies with

common Directors.

Included in other receivables and prepayments is an amount of RM165,228 (2003 - RM57,235) due from

companies with common Directors.

Trade receivables amounted to RM41,135 (2003 - Nil) had been written off against the allowance for

doubtful debts during the year.

6. Cash and cash equivalents

2004 2003RM RM

Cash and bank balances 23,708,731 68,936,639

Deposits with licensed financial institutions 58,900,000 18,140,000

82,608,731 87,076,639

56


7. Trade and other payables

2004 2003RM RM

Trade payables 264,168,417 203,539,047Other payables and accrued expenses 82,987,406 54,907,443Progress claim from contractors 20,430,337 7,649,635Rental and utility deposits 40,468,812 32,674,355Affiliated company 901,298 558,395

408,956,270 299,328,875

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

Included in other payables and accrued expenses of previous year is an amount of RM8,934 due to acompany with common Director.

8. Share capital

2004 2003RM RM

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

Issued and fully paid 87,750,000 87,750,000

9. Reserves

2004 2003RM RM

Non-distributable Share premium 108,488,040 108,488,040

Revaluation reserve 55,351,892 55,351,892Effect of adopting MASB 25 (Note 23) (20,669,737) (20,152,616)

34,682,155 35,199,276

143,170,195 143,687,316Distributable

Retained profits 274,225,398 223,474,817Effect of adopting MASB 25 (Note 23) 7,182,231 6,464,008

281,407,629 229,938,825

424,577,824 373,626,141

Subject to agreement of the Inland Revenue Board, the Company has sufficient Section 108 tax credit andtax exempt income to frank all of its retained profits at 29 February 2004 if paid out as dividends.

57


10.Deferred tax liabilities

Movement in deferred tax liabilities (prior to offsetting of balances) during the year are as follows:

Credited toAt income statement At

1.3.2003 (Note 14) 29.2.2004RM RM RM

Deferred tax liabilitiesProperty, plant and equipment- capital allowance 7,008,000 4,000,000 11,008,000- revaluation 13,688,608 (201,102) 13,487,506

20,696,608 3,798,898 24,495,506

Deferred tax assetsGeneral allowance for doubtful debts (174,000) - (174,000)

20,522,608 3,798,898 24,321,506

Deferred tax liabilities and assets are offset above where there is a legally enforceable right to set offcurrent tax assets against current tax liabilities and where the deferred taxes relate to the same taxationauthority.

11.Operating profit

2004 2003RM RM

Operating profit is arrived at after crediting:

Gain on disposal of property, plant and equipment - 313,093Rental income on shopping center operation 100,891,109 91,829,166

and after chargingAllowance for doubtful debts - 371,838Auditors’ remuneration 120,000 110,000Bad debts written off 68,040 60,380Depreciation 43,720,359 37,988,453Directors’ emoluments

- remuneration 875,654 926,188- fees 930,000 980,000- retirement emoluments - 237,000

Loss on disposal of property, plant and equipment 105,836 - Property, plant and equipment written off 144,248 422,501Rental expense

- land 1,022,082 1,022,082- buildings 31,725,450 29,582,299- motor vehicles - 591,226- equipment 6,096 101,680- fixtures and fittings 357,831 382,020- hostel 830,135 921,960

Royalty payable to affiliated company 8,061,255 7,325,945

i) The estimated monetary value of other benefits not included in salaries and other emolumentsreceived by the Directors of the Company is RM35,700 (2003 - RM38,872).

58


12.Employee information

2004 2003RM RM

Salaries and wages 72,091,454 63,041,026EPF contributions 8,729,476 7,420,302

Staff costs 80,820,930 70,461,328

The average number of full time employees in the Company during the financial year was 3,962 (2003 - 3,613).

13.Interest expenses

2004 2003RM RM

Bank overdrafts 12,340 12,140Other borrowings 31,656 130,784

43,996 142,924

14.Tax expense

2004 2003RM RM

Current tax expense 28,901,522 30,265,120

Deferred tax expense (Note 10)

- Origination and reversal of

temporary differences 4,000,000 224,000

- Change in accounting policy (Note 23) (201,102) (201,102)

3,798,898 22,898

Total tax expense 32,700,420 30,288,018

Reconciliation of effective tax rate

2004 2003% RM % RM


Income tax using Malaysian tax rates 28 26,960,668 28 25,433,250

Non-deductible expenses 6 5,739,752 5 4,854,768

Tax expense 34 32,700,420 33 30,288,018

15.Earnings per ordinary share

Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the numberof ordinary shares during the year.

2004 2003

Net profit attributable to ordinary shareholders (RM) 63,587,683 60,545,018

Number of ordinary shares 87,750,000 87,750,000

16.Dividends

2004 2003RM RM

Ordinary

Proposed first and final

dividend of 20% per share less 28% tax

(2003 - 20% per share less 28% tax) 12,636,000 12,636,000

The proposed first and final dividend has not been accounted for in the financial statements.

17.Segmental reporting

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

business segments, is based on the Company’s management and internal reporting structure. There is no

segmental analysis by geographical location as the Company’s operations are principally located in

Malaysia.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that

can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and

revenue and income taxes.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are

expected to be used for more than one period.

Business segments

The Company comprises the following main business segments:

Retailing The operations of a chain of superstores selling clothing,

food, household goods and other merchandise.

Property management services Shopping center operation and distribution center charges earned.

59


60


The business segment analysis is as follows:

PropertyRetailing management services Total

2004 2003 2004 2003 2004 2003RM RM RM RM RM RM

Business segments

Revenue from

external

customers 1,406,242,329 1,262,850,808 117,538,181 105,417,687 1,523,780,510 1,368,268,495

Total revenue 1,406,242,329 1,262,850,808 117,538,181 105,417,687 1,523,780,510 1,368,268,495

Operating profit 63,679,652 60,574,453 31,590,971 29,672,808 95,270,623 90,247,261

Interest expense (43,996) (142,924)

Interest income 1,061,476 728,699

Profit before tax 96,288,103 90,833,036

Tax expense (32,700,420) (30,288,018)


Segment assets 351,011,159 329,302,741 542,457,497 439,442,092 893,468,656 768,744,833Unallocated assets 58,900,000 18,140,000

Total assets 952,368,656 786,884,833

Segment liabilities (328,987,173) (251,164,955) (79,969,097) (48,163,920) (408,956,270) (299,328,875)Unallocated liabilities (31,084,562) (26,179,817)

Total liabilities (440,040,832) (325,508,692)

Capital expenditure 55,086,411 45,690,104 120,609,262 45,616,031 175,695,673 91,306,135

Depreciation 29,275,155 24,592,503 14,445,204 13,395,950 43,720,359 37,988,453

Non-cash expenses

other than

depreciation 105,725 418,488 38,523 4,013 144,248 422,501

61


18.Operating leases

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

2004 2003RM RM

Less than one year 29,926,729 24,132,560

Between one and five years 133,860,292 111,296,046

More than five years 186,521,797 201,653,914

350,308,818 337,082,520

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

periods ranging from 8 to 25 years, with an option to renew the respective leases for another 8 to 15 years.

Other than the above, the Company also leases two levels of store space in a shopping mall under

operating lease. The lease is for an initial period of twelve years, with an option to renew the lease for

another twelve years. The Company also has the option to terminate the lease after the third year in the

event certain conditions stipulated in the lease agreement is not fulfilled. The rental is based on the gross

monthly sales.

19.Commitments

2004 2003RM RM

Capital commitments:

Property, plant and equipment

Authorised and contracted for 32,402,636 38,071,927

Authorised but not contracted for 4,318,522 87,940,085

36,721,158 126,012,012

62


20.Related parties

Identity of related parties

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

Transactions with Directors

Significant transactions and balances with companies in which certain Directors have interest other than

those disclosed elsewhere in the financial statements are as follows:

2004 2003Balances RM RM

With companies in which Dato’ Abdullah bin

Mohd Yusof, a Director, has interest:

Abdullah & Zainudin

Amount due to in respect of legal fees payable - 8,934

Laura Ashley (Malaysia) Sdn. Bhd.

Amount due from in respect of management

fee receivable 19,353 4,656

Amount due from in respect of reimbursement

of operational payments 145,875 42,166

AEON Credit Service (M) Sdn. Bhd.

Amount due from in respect of sales through

easy payment scheme financing 719,424 764,050


of operational payments - 10,413

With companies in which Ramli bin Ibrahim,

a Director, has interest:


Amount due from in respect of management

fee receivable 19,353 4,656


of operational payments 145,875 42,166


Amount due from in respect of sales through

easy payment scheme financing 719,424 764,050


of operational payments - 10,413

63


2004 2003Transactions RM RM

With companies in which Dato’ Abdullah bin

Mohd Yusof, a Director, has interest:

Abdullah & Zainudin

Legal fees payable 13,200 2,500


Management fee receivable 70,185 99,201

Rental income receivable 380,144 370,650


Sales through easy payment scheme financing 4,357,712 3,886,378

With companies in which Ramli bin Ibrahim,

a Director, has interest:


Management fee receivable 70,185 99,201

Rental income receivable 380,144 370,650


Sales through easy payment scheme financing 4,357,712 3,886,378

The above transactions have been entered into in the normal course of business and have been

established under negotiated terms.

Other related party transactions

Significant related party transactions other than those disclosed elsewhere in the financial statements are

as follows:

2004 2003Transactions RM RM

Affiliated company

Royalty expenses 8,061,255 7,325,945

These transactions have been entered into in the normal course of business and have been established

under negotiated terms.

64


21.Financial instruments

Financial risk management objectives and policies

Exposure to credit risk, interest rate risk, foreign currency risk and liquidity risk arises in the normal course

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

below.

Credit risk

The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing

basis. Credit evaluations are performed on shopping center tenants and the Company requires all tenants

to place adequate security deposits as stipulated under the tenancy agreement. At balance sheet date, the

Company does not have any major concentration of credit risk on its shopping center tenants. The

maximum exposure to credit risk for the Company was represented by the carrying amount of each

financial asset.

Interest rate risk

The interest rate exposure of the Company is minimal as the Company has no interest bearing financial

liabilities at balance sheet date. Interest earnings financial assets are mainly deposits placed with financial

institutions that generate interest income for the Company.

The management monitors the prevailing interest rates at regular intervals, and maintains an appropriate

level of cash and cash equivalents to finance the working capital requirements and mitigate the effects of

fluctuation in cash flow and liquidity positions of the Company.

In view of the competitive rates that are available from the prevailing banking facilities granted to the

Company to finance its working capital requirements and the prevailing low interest rate scenario, the

interest rate risk is not expected to have a material impact on the Company.

Foreign currency risk

The Company does not have any significant exposure to foreign currency risk as its transactions and

balances are substantially denominated in Ringgit Malaysia.

Liquidity risk

The Company monitors and maintains a level of cash and cash equivalents deemed adequate by

management to finance the Company’s operations and to mitigate the effects of fluctuations in cash

flows.

65


The following table shows information about the Company’s exposure to interest rate.

Effective interest rates and repricing analysis

In respect of interest-earning financial assets, the following table indicates their effective interest rate at

the balance sheet date and the periods in which they reprice or mature, whichever is earlier:

2004 2003Effective Effectiveinterest interest

rate Within rate Withinper annum Total 1 year per annum Total 1 year

% RM RM % RM RM

Financial assets

Deposits placed with

licensed financial

institutions 2.69 58,900,000 58,900,000 2.73 18,140,000 18,140,000

Fair Values

Recognised financial instruments

In respect of cash and cash equivalents, trade and other receivables and trade and other payables, the

carrying amounts approximate fair value due to the relatively short term nature of these financial

instruments.

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

2004 2003

Carrying Fair Carrying Fair

amount value amount valueRM RM RM RM

Financial assets

Long-term investments for which it is:

Practical to estimate fair value 45,209 35,000 45,209 35,000

Not practical to estimate fair value 130,000 - 130,000 -

It was not practicable to estimate the fair value of an investment representing 13% of the issued ordinary

shares of an unquoted company. That investment is carried at its original cost of RM130,000 (2003 -

RM130,000) in the balance sheet. At year end, the net tangible assets reported by the unquoted company

were RM17,278,000 (2003 - RM13,368,000).

22.Event subsequent to the balance sheet date

On 3 March 2004, the Company entered into a Sale and Purchase Agreement with Plenitude Holdings

Sdn. Bhd. in respect of the acquisition of a piece of vacant land which is located in Mukim of Tebrau,

District of Johor Bahru, measuring an area of approximately 30 acres / 1,308,035 square feet for a total

cash consideration of RM39,241,050 for the purpose of constructing a new shopping center.

66


23.Change in accounting policy and prior year adjustment

Change in accounting policy

In the current financial year, the Company adopted three new MASB Standards. The adoption of these

new standards resulted in changes in accounting policies as follows:-

(i) MASB 25, Income Taxes, which has been adopted retrospectively. Comparative figures have been

adjusted to reflect the change in this accounting policy;

(ii) MASB 27, Borrowing Costs, which is applied retrospectively. The adoption of this Standard has no

material impact on the financial statements; and

(iii) MASB 29, Employee Benefits, which is applied retrospectively. The adoption of this Standard has no

material impact on the financial statements.

The adoption of MASB 25 has resulted in the recognition in full of all taxable temporary differences.

In the case of revaluation of landed properties, under the approach advocated in MASB 25, an upward

revaluation creates a taxable temporary difference. The Standard therefore requires an enterprise to

recognise a deferred tax liability in respect of assets revaluations, regardless of management’s intention.

Previously, deferred tax liabilities were not recognised as management had no intention to dispose the

revalued properties.

This change in accounting policy, applied retrospectively, has the following impact on results as follow: -

2004 2003RM RM

Net profit before change in accounting policy 63,386,581 60,343,916

Effect of adopting MASB 25 201,102 201,102


Prior year adjustment

The change in accounting policy due to the adoption of MASB 25 has been accounted for by restating

comparatives and adjusting the opening balance of retained profits at 1 March 2002 and 28 February 2003

as disclosed in Note 24 and the statement of changes in equity respectively.

67


24.Comparative figures

24.1 The following comparatives have been restated to reflect the change in accounting policy as

explained in Note 23 to the financial statements and to conform with the current year’s

presentation.

As previouslyAs restated stated

RM RM

Balance sheet

Reserves 373,626,141 387,314,749

Deferred tax liabilities 20,522,608 6,834,000

Income statement


Tax expense (30,288,018) (30,489,120)


Basic earnings per ordinary share (sen) 69.0 68.8

Statement of changes in equity

Revaluation reserve at 1 March 2002 35,716,397 55,351,892

Revaluation reserve at 28 February 2003 35,199,276 55,351,892

Retained profits at 1 March 2002 181,512,686 175,766,901

Retained profits at 28 February 2003 229,938,825 223,474,817

Segment liabilities

Retailing (251,164,955) (263,775,745)

Property management services (48,163,920) (48,044,339)

(299,328,875) (311,820,084)

Unallocated liabilities (26,179,817) -

Total liabilities (325,508,692) (311,820,084)

Segment assets

Retailing 329,302,741 347,442,741

Property management services 439,442,092 439,442,092

768,744,833 786,884,833

Unallocated assets 18,140,000 -

Total assets 786,884,833 786,884,833

68


24.2 The following comparatives have been restated to conform with the current year’s presentation.

As previouslyAs restated stated

RM RM

Income statement

Staff costs 70,461,328 93,835,652

Operating expenses 169,799,463 146,425,139

Note 12. Employee information

Salaries and wages 63,041,026 93,835,652

EPF contributions 7,420,302 -

Staff costs 70,461,328 93,835,652

Number of employee

The basis in the number of employees of Company (including Directors) has been changed from

5,214, being the number of employees as at the end of financial year to 3,613 derived based on the

average number of full time employees during the financial year.

69


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

In the opinion of the Directors, the financial statements set out on pages 46 to 68 are drawn up in accordance

with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so

as to give a true and fair view of the state of affairs of the Company at 29 February 2004 and of the results of

their operations and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

…………………………………………………………

Dato’ Abdullah bin Mohd Yusof

…………………………………………………………

Soichi Okazaki

Kuala Lumpur,

Date: 21 April 2004

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

I, Poh Ying Loo , the officer primarily responsible for the financial management of Jaya Jusco Stores Bhd., do

solemnly and sincerely declare that the financial statements set out on pages 46 to 68 are, to the best of my

knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be

true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 21 April 2004.

………………………………..

Poh Ying Loo

Before me:

70


R e p o r t o f t h e A u d i t o r st o t h e m e m b e r s o f J a y a J u s c o S t o r e s B h d .

We have audited the financial statements set out on pages 46 to 68. The preparation of the financial statements

is the responsibility of the Company’s Directors. Our responsibility is to express an opinion on the financial

statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards

require that we plan and perform the audit to obtain all the information and explanations which we consider

necessary to provide us with evidence to give reasonable assurance that the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and

disclosures in the financial statements. An audit also includes an assessment of the accounting principles used

and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation

of information in the financial statements. We believe our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act,

1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of:

i) the state of affairs of the Company at 29 February 2004 and its results and cash flows for the year

ended on that date; and

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

statements of the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the

Company have been properly kept in accordance with the provisions of the said Act.

KPMG Desa Megat & Co.

Firm Number: AF 0759

Chartered Accountants

Abdullah Abu Samah

Partner

Approval Number: 2013/06/04(J)

Kuala Lumpur,

Date: 21 April 2004

71


A n a l y s i s o f S h a r e h o l d i n g sa n a l y s i s o f s h a r e h o l d i n g s a s a t 2 6 A p r i l 2 0 0 4

Authorised Share Capital : RM100,000,000

Paid-up Share Capital : RM87,750,000

Class of Shares : Ordinary Share of RM1 each

Voting Rights : 1 vote per Ordinary Share

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

Depositors Depositors

1 - 99 73 5.8871 821 0.0009

100 - 1,000 435 35.0806 376,600 0.4292

1,001 - 10,000 529 42.6613 1,746,008 1.9898

10,001 - 100,000 128 10.3226 4,150,771 4.7302

100,001 - 4,387,499 73 5.8871 36,523,300 41.6220

4,387,500 and above 2 0.1613 44,952,500 51.2279

TOTAL 1240 100.0000 87,750,000 100.0000

Substantial Shareholders as per Register of Substantial Shareholders

No. Name No. of shares Percentage

1 AEON Co. Ltd 40,155,500 45.7612

2 Dato’ Abdullah bin Mohd Yusof *5,800,000 6.6097

3 Pelita Dekad Sdn Bhd 4,797,000 5.4667

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

Directors’ Interests

No. Name Direct Interest Indirect Interest

1 Dato’ Abdullah Bin Mohd Yusof 154,000 5,646,000

2 Soichi Okazaki 15,000

3 Masato Yokoyama 15,000

4 Ramli Bin Ibrahim 140,000-

-

-

a s a t 2 6 A p r i l 2 0 0 4

72


L i s t o f 3 0 L a r g e s t S h a r e h o l d e r s

No. Name of Shareholders No. of Shares % of shares held

1 AEON Co., Ltd 40,155,500 45.7612

2 Pelita Dekad Sdn. Bhd. 4,797,000 5.4667

3 Malaysia Nominees (Tempatan) Sendirian Berhad 2,907,000 3.3128

Great Eastern Life Assurance (Malaysia) Berhad (PAR 1)

4 Cartaban Nominees (Asing) Sdn Bhd 1,894,800 2.1593

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

5 HSBC Nominees (Asing) Sdn Bhd 1,859,300 2.1189

BBH (Lux) SCA for Fidelity Funds ASEAN

6 HSBC Nominees (Asing) Sdn Bhd 1,756,000 2.0011

Abu Dhabi Investment Authority

7 UOBM Nominees (Asing) Sdn Bhd 1,745,000 1.9886

Banque De Luxembourg for Pam (L) Equities Asian Growth

8 Permodalan Nasional Berhad 1,507,500 1.7179

9 Universal Trustee (Malaysia) Berhad 1,309,500 1.4923

SBB Emerging Companies Growth Fund

10 Amanah Raya Nominees (Tempatan) Sdn Bhd 1,060,000 1.2080

Skim Amanah Saham Bumiputera

11 Syarikat Maluri Sdn Bhd 932,500 1.0627

12 Employees Provident Fund Board 899,900 1.0255

13 Malaysia Nominees (Tempatan) Sendirian Berhad 895,000 1.0199

Great Eastern Life Assurance (Malaysia) Berhad (PAR 2)

14 Status Resources Sdn Bhd 799,000 0.9105

15 Cartaban Nominees (Asing) Sdn Bhd 793,700 0.9045

SSBT Fund D26J for Emerging Markets Global Small

Capitalization Fund (TEMMUF)

16 Citicorp Nominees (Asing) Sdn Bhd 757,000 0.8627

Cititrust Limited for Invesco Asia Balanced Fund (CBHK)

17 Bumiputra-Commerce Nominees (Tempatan) Sdn. Bhd. 651,700 0.7427

Bumiputra-Commerce Trustee Berhad for Pacific Dana Aman

(3717 TRO1)

18 HSBC Nominees (Asing) Sdn Bhd 644,900 0.7349

BBH (Lux) SCA for Fidelity Funds Malaysia


HSBCIT HK for Apollo Asia Fund Ltd

20 Rozilawati Binti Haji Basir 605,000 0.6894

No. Name of Shareholders No. of Shares % of shares held

21 Rozana Zeti Binti Basir 605,000 0.6894

22 Roshayati Binti Basir 605,000 0.6894

23 Takuya Okada 600,000 0.6838

24 MCIS Zurich Insurance Berhad 590,700 0.6732

25 Amanah Raya Berhad 590,000 0.6724

SBB Double Growth Fund


Government of Singapore Investment Corporation Pte Ltd for

Government of Singapore (C)

27 SBBAM Nominees (Tempatan) Sdn. Bhd. 507,700 0.5786

Employees Provident Fund Board


BOB HK for Aberdeen Malaysia Equity Fund

29 John Hancock Life Insurance (Malaysia) Berhad 448,000 0.5105


The Bank Of Bermuda Ltd Hong Kong Branch for Fidelity Global

Investment Fund (ASIA PAC EQ FD)

TOTAL 72,015,900 82.0694

73


74


Location

Lot 7041,

Mukim of Bukit Baru,

District of

Melaka Tengah,

Melaka.

Lot 23551,

Mukim of Setapak,

District and State

of Wilayah

Persekutuan.

Lot PT 21441,

Mukim of Kapar,

District of Klang,

Selangor.

Lot PT 162010,

Mukim of Ulu Kinta,

District of Kinta,

Perak.

Lot 49045,

Mukim of Pulai,

District of Johor

Bahru, Johor.

Lot 4086, Kawasan A,

Mukim Batu,

Daerah Kuala Lumpur,

Wilayah Persekutuan

Leasehold

commercial land/

Existing two-storey

shopping center

Extension/Renovation

Leasehold

commercial land/

Two-storey shopping

center and two-storey

car park

Leasehold

commercial land/

Two-storey shopping

center and

one-storey car park

Freehold land/

Two-storey shopping

center and two

storey car park

Freehold land/

Two-storey shopping

center including

covered car park

Leasehold land/

Two-storey shopping

center and two-storey

car park

436,036/

200,316

179,989

368,516/

666,694

643,753/

691,414

609,840/

794,806

377,490/

483,299

410,815/

906,497

February 1995 (R)

February 1995 (R)

June 1994 (A)/

October 1995 (C)

April 1996 (A)/

August 1997 (C)

April 2002 (A)/

August 2002 (C)

January 2004 (C)

99 years

expiring on

19/12/2089

95 years

expiring on

28/03/2085

99 years

expiring on

09/05/2093

Freehold

Freehold

99 years

expiring on

April 2101

61,713,706

93,469,222

71,118,338

85,789,523

29,602,479

92,033,997

Description/Existing use

Land/Built-uparea(sq ft)

Date ofAcquisition(A)/Completion (C)/Revaluation (R)

Approx.age ofbuilding(year)

Tenure(Year ofexpiry forleasehold)

Net bookvalue as at29/2/2004(RM)

12

51/2

11

8

7

11/2

1 month

P a r t i c u l a r s o f P r o p e r t i e sD e t a i l s o f J a y a J u s c o S t o r e s B h d ’ s p r o p e r t i e s a s a t 2 9 F e b r u a r y 2 0 0 4 a r e s e t o u t b e l o w :

75


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

JUSCO TAMAN MALURI SHOPPING CENTERTaman MaluriTel: 03-9285 5222

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

JUSCO MELAKA SHOPPING CENTERMelakaTel: 06-232 4899

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

1 UTAMA SHOPPING CENTERBandar UtamaTel: 03-7726 6033

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

BUKIT RAJA SHOPPING CENTERBandar Baru KlangTel: 03-3343 2166

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

KINTA CITY SHOPPING CENTERIpohTel: 05-548 4668

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

ALPHA ANGLE SHOPPING CENTERWangsa MajuTel: 03-4149 5288

J A YA J U S C O S T O R E S B H DD i r e c t o r y

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

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

JUSCO PERMAS JAYASHOPPING CENTERTel: 07-386 0600

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

JUSCO TAMAN UNIVERSITISHOPPING CENTERTel: 07-520 8000

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

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

JUSCO METRO PRIMASHOPPING CENTERTel: 03-6259 1122

▼

▼

▼

▼ ▼

▼

▼

▼

▼

▼ ▼

76


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

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

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

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

AEON “1% Club” Programme.

1991 OCTOBER – JUSCO Melaka was opened and fully operated by Malaysian staff.– The AEON Group’s “Hometown Forest” programme was launched

simultaneously at the inauguration of JUSCO Melaka.

1992 APRIL – JUSCO Wangsa Maju (Alpha Angle Shopping Center) our first ShoppingCenter, opened.

1994 AUGUST – Our Distribution Center begun operations.OCTOBER – Japanese Trainer Programme begun.

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

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

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

1998 DECEMBER – JUSCO Melaka Shopping Center reopened.

1999 DECEMBER – JUSCO Mid Valley opened.

2000 DECEMBER – JUSCO Taman Maluri Shopping Center re-opened.– JUSCO Bandar Puchong opened.

2001 OCTOBER – Launch of WAOH Charity Fund / JUSCO Fest / JUSCO’s 17th Anniversary.NOVEMBER – 22 Malaysian students and 2 former participants from the 1990 batch were

invited to Japan as ‘Ambassadors’ through the AEON “1% Club” Programme.

2002 APRIL – Establishment of Jusco-OUM Retail Center in Alpha Angle ShoppingCenter, at Wangsa Maju.

JULY – JUSCO Taman Universiti opened, Japan Management Training Programmereactivated.

2003 JULY – WAOH Charity Bazaar.DECEMBER – 3000 seedlings were planted in the vicinity of the JUSCO Permas Jaya store

as part of AEON’s environmental campaign, ‘Planting Seeds of Growth’.

2004 JANUARY – JUSCO Metro Prima Tree Planting Ceremony was held. 2000 seedlingswere planted.

– JUSCO Permas Jaya Shopping Center opened.FEBRUARY – JUSCO Metro Prima Shopping Center opened.

M i l e s t o n e s

77


N o t i c e o fA n n u a l G e n e r a l M e e t i n g

NOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of JAYA JUSCO STORES BHD will be held at Nirwana Ballroom 1, Lower Lobby, Mutiara Hotel, Jalan Sultan Ismail, 50250 Kuala Lumpur onTuesday, 15 June 2004 at 10.30 a.m. for the following purposes:

AGENDA

As Ordinary Business1. To receive and adopt the Audited Financial Statements for the year

ended 29 February 2004 together with the Reports of the Directorsand Auditors thereon.

2. To declare a First and Final Dividend of 20% per share less 28%income tax for the year ended 29 February 2004.

3. To approve the payment of Directors’ Fees for the year ended29 February 2004.

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

i) Dato’ Abdullah bin Mohd Yusof

ii) Mr. Toshiji Tokiwa

iii) Mr. Soichi Okazaki

iv) Mr. Masato Yokoyama

v) Encik Ramli bin Ibrahim

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

vii) Datuk Zawawi bin Mahmuddin

viii) Dato’ Chew Kong Seng

5. To re-elect Mr Tatsuichi Yamaguchi who is retiring under Article 80of the Company’s Articles of Association.

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

As Special BusinessTo consider and, if thought fit, to pass the following ordinary resolution:

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

Ordinary Resolution 1













78


“THAT approval be and is hereby given to the Company, to enterand give effect to the recurrent related party transactions of arevenue or trading nature (hereinafter to be referred to as “RecurrentTransactions”) with the related parties as stated in Section 2.2 of theCircular to Shareholders dated 24 May 2004 which are necessary forthe Company’s day-to-day operations subject further to the following:

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

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

(a) the conclusion of the next Annual General Meeting of theCompany following the forthcoming Annual GeneralMeeting of the Company at which the ProposedShareholders’ Mandate is approved, at which time it willlapse unless by a resolution passed at the Annual GeneralMeeting the mandate is again renewed;

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

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

whichever is the earlier; and

(iii) the disclosure of the breakdown of the aggregate value of theRecurrent Transactions conducted pursuant to the ProposedShareholders’ Mandate in the Annual Report of the Companybased on the following information:

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

(b) the names of the related parties involved in each type of theRecurrent Transactions entered into and their relationshipwith the Company.

AND THAT the Directors of the Company be and are hereby authorisedto do all acts and things to give full effect to the Recurrent Transactionscontemplated and/or authorized by this resolution, as the Directors ofthe Company, in their absolute discretion, deem fit.” Ordinary Resolution 14

79


NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Nineteenth Annual GeneralMeeting, a first and final dividend of 20% per share less 28% income tax in respect of the financial year ended 29 February 2004 will be paid to shareholders on 22 July 2004. The entitlement date for the said dividend shall be 5 July 2004.

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 5 July 2004 in respect of transfers.(b) Shares bought on the Bursa Malaysia Securities Berhad on cum entitlement basis according to the Rules of the

Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

SAW BEE LEAN (MAICSA 0793472)Secretary

Kuala LumpurDate: 24 May 2004

Notes:1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and

vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b)of the Companies Act, 1965 shall not apply.

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

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

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Tingkat 4,Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur not less than 48 hoursbefore 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 Sealor under the hand of its attorney.

6. Explanatory Note on the Special Business

Ordinary Resolution 14 on the Proposed Shareholders’ MandateThe proposed Ordinary Resolution 14, if passed, will empower the Directors from the date of the NineteenthAnnual General Meeting, to deal with the related party transactions involving recurrent transactions of a revenueor trading nature which are necessary for the Company’s day-to-day operations. These recurrent related partytransactions are in the ordinary course of business and are on terms not more favourable to the related partiesthan those generally available to the public and not to the detriment of the minority shareholders. This authorityunless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Companyand subject always to provision (ii) of the resolution. The details of the recurrent related party transactions areset out in the Circular to the Shareholders dated 24 May 2004, which is despatched together with this AnnualReport.

N o t i c e o f D i v i d e n d P a y m e n t

80


1. Directors standing for re-election at the Nineteenth Annual General Meeting :-

Pursuant to Article 74 of the Company’s Articles of Association

(a) Dato’ Abdullah bin Mohd Yusof

(b) Mr. Toshiji Tokiwa

(c) Mr. Soichi Okazaki

(d) Mr. Masato Yokoyama

(e) Encik Ramli bin Ibrahim

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

(g) Datuk Zawawi bin Mahmuddin

(h) Dato’ Chew Kong Seng

Pursuant to Article 80 of the Company’s Articles of Association

(a) Mr. Tatsuichi Yamaguchi

2. Details of attendance of Directors at Board MeetingsThere were four Board Meetings held during the financial year ended 29 February 2004. Details of attendance of the Directors are set out in Statement of Corporate Governance appearing on page 32of the Annual Report.

3. Place, Date and Time of MeetingThe Nineteenth Annual General Meeting of the Company will be held at Nirwana Ballroom 1,Lower Lobby, Mutiara Hotel, Jalan Sultan Ismail, 50250, Kuala Lumpur on Tuesday, 15 June 2004 at10.30 a.m.

4. Further details of Directors standing for re-electionDetails of Directors standing for re-election are set out in Directors’ Profiles appearing on pages 20-22 of the Annual Report.

S t a t e m e n t A c c o m p a n y i n g N o t i c e o fA n n u a l G e n e r a l M e e t i n g

P u r s u a n t t o p a r a g r a h 8 . 2 8 ( 2 ) o f t h e B u r s a M a l a y s i aS e c u r i t i e s B e r h a d l i s t i n g r e q u i r e m e n t s

I/We,

of

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

of

or failing him/her,

of

as my/our proxy to vote for me/us on my/our behalf at the Nineteenth Annual General Meeting of the Company to be heldat Nirwana Ballroom 1, Lower Lobby, Mutiara Hotel, Jalan Sultan Ismail, 50250, Kuala Lumpur on Tuesday, 15 June 2004 at10.30 am and at any adjournment thereof.

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

JAYA JUSCO STORES BHD

My/our proxy is to vote as indicated below :

For AgainstNo.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

Resolution 11

Resolution 12

Resolution 13

Resolution 14

No. of shares heldPROXY FORM

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

Signature:

Shareholder or Common Seal

NOTE :

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

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

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

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Tingkat 4, Menara Kausar, Jalan 3/27A,Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur not less than 48 hours before the time set for holding the meeting.

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

Dated this day of 2004

Ordinary Resolution

To receive the Audited Financial Statements for the year ended 29 February 2004 together

with the Reports of the Directors and Auditors thereon.

To declare a First and Final Dividend of 20% per share less 28% income tax

To approve the payment of Directors’ Fees

Re-election of Dato’ Abdullah bin Mohd Yusof

Re-election of Mr. Toshiji Tokiwa

Re-election of Mr. Soichi Okazaki

Re-election of Mr. Masato Yokoyama

Re-election of Encik Ramli bin Ibrahim

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

Re-election of Datuk Zawawi bin Mahmuddin

Re-election of Dato’ Chew Kong Seng

Re-election of Mr. Tatsuichi Yamaguchi

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

Proposed Shareholders’ Mandate

Place StampHere

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

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

The 20th Anniversary logo signifiesJUSCO’s celebration of 20 years of business in Malaysia. The bold styling isremindful of JUSCO’s trusted and long-established status while the ‘bright’ zeroreflects the customer’s correct choice.The colours of the logo – red, pink, orangeand yellow – are pleasant, representingthe pleasant shopping environmentJUSCO provides for our clientele.

jaya jusco stores bhd - aeon co. (m)...

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