ANNUAL REPORT 2003 - AEON CO. (M) BHD.aeonretail.com.my/corporate/investor/annual/pdf/2003.pdf ·...

ANNUAL REPORT 2003Financial Year Ended 28 February 2003

JAYA JUSCO STORES BHD (126926-H)(Incorporated in Malaysia)

Do y

ou h

ave

a J

Card

?

JAYA JUSCO STORES BHD (126926-H)Tingkat 4, Menara Kausar, Jalan 3/27A, Seksyen 1, Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.

JAYA JU

SCO STO

RES BH

D (126926-H

)

J CARD

full cover 20/05/03 2:45yip Page 1

“

“

Our customer service,being one of our pillarsof excellence, contributesto JUSCO’s success.We are dedicated to servingour customers with thevery best, giving themevery reason to enjoyshopping at JUSCO.

Jusco AR [email protected] 20/05/03 3:02yip Page II

1

2 WITH ALL OUR HEARTS (WAOH)6 JUSCO - OUM RETAIL CENTER AND

HUMAN RESOURCE DEVELOPMENT ACTIVITIES8 JUSCO GENERAL MERCHANDISE STORE

10 Introduction11 AEON’s Corporate Commitment13 Corporate Information14 JAYA JUSCO Stores Bhd Share Price15 Five Years Financial Highlights17 Board of Directors18 Directors’ Profiles21 Our Senior Management22 Chairman’s Statement25 Review of Operations31 Information Technology

CORPORATE GOVERNANCE32 Statement of Corporate Governance37 Terms of Reference of Audit Committee40 The Audit Committee42 Statement of Internal Control44 Other Information

45 FINANCIAL STATEMENTS46 Directors’ Report50 Balance Sheet51 Income Statement52 Statement of Changes in Equity53 Cash Flow Statement54 Notes to the Financial Statements71 Statement by Directors72 Statutory Declaration73 Report of the Auditors

OTHERS74 Analysis of Shareholdings75 List of 30 Largest Shareholders77 Particulars of Properties78 JAYA JUSCO Stores Bhd Directory79 Highlights of the Year80 Milestones81 Notice of Annual General Meeting84 Notice of Dividend Payment86 Statement Accompanying

Notice of Annual General Meeting87 Proxy Form

JAYA JUSCO STORES BHD (126926-H)

PAGE CONTENTS

Jusco AR [email protected] 20/05/03 2:46yip Page 1

2JAYA JUSCO STORES BHD (126926-H)



WITH ALL OUR HEARTS (WAOH)

‘With All Our Hearts’ (WAOH) Charity Fund was officiallylaunched in 2001, in conjuction with JUSCO’s 17thAnniversary Celebrations. The auspicious event paved theway for more WAOH events and activities in the yearunder review. As a part of JUSCO’s corporate citizenshipprogramme, a ‘With All Our Hearts’ Charity Fund Drivewas held from 24 May to 4 June 2002. The event aimedto create greater awareness and generate more publicityfor the charity fund. Its objective was to announce the mission of WAOH, whichencapsulated JUSCO’s vision to beinvolved in fund-raising activitiesand events for the benefit ofMalaysian children and youth.

The WAOH Charity Fund Drive in2002 was officially launched inAlpha Angle Shopping Center andwas graced by the fund’s honouredpatron, Yang Berbahagia DatukPaduka Dr. Saleha bt. Mohd Ali. She delivered a moving speech on JUSCO’s involvement andachievements in corporatecitizenship before launching thecharity drive. Popular local songstress and the WAOHAmbassador, Siti Nurhaliza, was then introduced to afrenzied crowd. Siti delivered a live rendition of theWAOH theme song before serenading her adoring fanswith a few of her hit songs. The children from Tadika Adik-Adik Wangsa Maju also joined her on stage. The eventwas covered by the official broadcaster, TV3 and wasaired in Buletin Utama, Malaysia Hari Ini and Nona.

In conjunction with the WAOH Charity Fund Drive, a seriesof supporting activities was lined up to add more cheerand hype to the charity drive. The activities included the‘Count the Number of Hearts’ Contest, the ‘I Want to be

Siti’ Contest, the WAOH Children’s Drawing Contest andthe Charity Fund Drive Jogathon. Participation in theseevents was very encouraging. Customers showed theirsupport by purchasing WAOH merchandise, whichincluded car stickers, lapel pins and wobblers. They haveresponded favourably to the organised activities. A total of RM41,944.37 was collected during the 12-day charitydrive. With donations from suppliers, a grand total of RM155,073 was collected for the WAOH Charity Fund.

On 29 August 2002, an equallyfestive and auspicious event washeld in conjunction with the grandopening of JUSCO’s ninth store inTaman Universiti, Johor Bahru. Theopening ceremony of the storeprovided a wonderful opportunity tointroduce the ‘With All Our Hearts’Charity Fund and its mission to thesouthern region. Once again, lovelySiti Nurhaliza was invited to gracethe event as the WAOH Ambassador.Amid the cheering crowd, sheperformed four songs on stage andsigned autographs for 100 lucky

draw winners in the ‘Meet and Greet The Fans’ session.Cheque donations and computers were presented tocharity homes and schools. During this charity drive,WAOH merchandise such as bookmarks, car stickers andlapel pins was also sold to customers.

Customers had the chance to enjoy more of JUSCO’sfestivities with another event- the JUSCO FEST, whichbegan on 24 October 2002. The JUSCO FEST marked thecelebration of JUSCO’s 18th Anniversary. Boundlessenergy and fun were prevalent throughout the 12-dayJUSCO FEST as activities and events were aplenty, muchto the pleasure of our customers. The Scratch n’ Win

JUSCO Corporate Citizenship:Doing our part for society with all our hearts





event, the WAOH Charity Bazaar and the Street SoccerChallenge were among the many activities organised.

The many charity events organised by JUSCO reflect onits commitment in serving the community and inupholding its responsibility as a good corporate citizen. Ofcourse, all of JUSCO’s efforts would have been in vainwithout the support of its kind and caring customers.Hence, JUSCO hopes to join hands with customers in

future to ensure the success of its charity events, whichwill be organised to improve the social welfare of theneedy and underprivileged.



JUSCO - OUM RETAIL CENTER AND HUMAN RESOURCE DEVELOPMENT ACTIVITIES

Cultivating managementskills to meet the challenges of the retail industry

In an industry with its share of challenges andopportunities, Jaya Jusco Stores Bhd has establisheditself as a strong retail company that thrives on meetingthe demands of the retail sector. As it charges aheadtowards growth and success, Jaya Jusco Stores Bhd isaware of the fact that competent management is requiredto support Jaya Jusco Stores Bhd’s rapid expansion.Hence, this led to the decision of setting up a traininginstitute to inculcate professionalism and other pivotalvalues in management among its staff.

Jaya Jusco Stores Bhd has allocated an appropriatebudget on staff’s training and development. As trends andtechnology evolve, sufficient training allows staff tocontinuously upgrade themselves with the latestprocedures, methods and systems in retail management.

In collaboration with the Open University Malaysia(OUM), Jaya Jusco Stores Bhd opened its first local retailcenter that offers the Apprentice Scheme in retailing. Thescheme is a full-time employment scheme based ontraining programmes that provide students theopportunity to work and pursue a tertiary education at thesame time. On 10 April 2002, a signing ceremony washeld to seal the agreement between Jaya Jusco StoresBhd and OUM. Jaya Jusco Stores Bhd was represented by its managing director, Mr. Soichi Okazaki and OUM byits President and Chief Executive, Y. Bhg. Tan Sri AbdullahSanusi Ahmad. Together they pledged their promise to provide service-focused training and learningopportunities through the Apprentice Scheme.

The first batch of apprentices enrolled for the scheme inMay 2002 and had completed the course in January 2003.They had high praises for the Apprentice Scheme as it

allowed them to pursue courses and training that willassist them in their career. Apprentices who applied for theScheme are required to undergo either Level I or Level II ofthe Scheme. Upon completion of Level I, apprentices willreceive a Career Certificate in Retail Operations and may



proceed to Level II. After completing level II, they willgraduate with a Diploma in Management (Retailing),conferred by OUM. As at 28 April 2003 the JUSCO - OUMRetail Center has 63 apprentices at the Certificate Leveland another 170 students at the Diploma level.

Another proactive effort to encourage productivity and toboost staff’s morale was the Praise Your Cashier contest,which was organised for all nine JUSCO stores. Thecontest was an effort to re-engineer the CashiersProgramme, which was designed to improve the standardof customer service at JUSCO stores as well as toencourage staff to take pride in their work. Out of 877cashiers nominated, the best 18 were selected toparticipate in the Grand Customer Service SkillsTournament. Datuk Sulaiman Mahboob, SecretaryGeneral of the Domestic Trade and Consumer AffairsMinistry was the guest of honour at the event. By the endof the tournament, 3 cashiers were chosen as the topwinners. The tournament will be an annual event.

With its very own retail center and other programmes tocultivate management skills and professionalism amongstaff, Jaya Jusco Stores Bhd aims to enhance the retailindustry’s image and its own standard in customer serviceand management by imparting the latest managementskills and trends to its staff.

Besides the Apprentice Scheme, Jaya Jusco Stores Bhdhas also embarked on other training programmes todevelop the skills and increase the productivity of its staff.The Management Trainee Programme that provides the‘on-the-job’ and ‘off-the-job’ training in retail managementhave benefited participants as they’ve enjoyed careerdevelopment in merchandising departments, storeoperations and supporting departments. Six trainees werealso sent to Tokyo, Japan for a full-fledged managementtraining programme. These selected trainees had gainedsix months of training at AEON’s Toride store in IbarakeiPrefecture in Japan.



JUSCO GMS: More than just a departmentalstore cum supermarket

JUSCO GENERAL MERCHANDISE STORE (GMS)

ARENA Shopping is never complete without a good meal with familyand friends. With an ideal mix of tempting cuisines coupled

with its pleasant ambience, ARENA is indeed a place to eat, drink and be merry.

Innovative ServicesThe loose change coin box is an extraservice, which no other retailerprovides. Customers who are short ofone sen coins can use the coins fromthe box to pay for their purchases.

JUSCO is more than a place to shop; it is also a place thatenhances customers' lifestyles by offering a wide range ofappealing products that cater to their ever changingdesires and preferences. In addition to providing dailynecessities, JUSCO's General Merchandise Store (GMS)also offers a wide range of products that are of betterquality and at affordable prices. Its innovative retailformat also emphasises on customers' convenience and

comfort. High volumes of products are on display with itsnew 5-metre-high GMS format. Wider aisles are alsoconstructed to ensure the smooth flow of shopper traffic.Thus, customers have the luxury of shopping in a placethat offers everything under one roof in a cosy,comfortable environment. Overall, these plans are madeto ensure that customers are always happy shopping at JUSCO.

SeafoodAll seafood sold at JUSCO is fresh fromthe sea, especially the succulent-lookingprawns. JUSCO has taken special care toensure that customers are satisfied withthe freshness and the quality of theseafood. They are inspected as soon asthey are caught and then quickly frozen topreserve its fresh quality. The seafood isthen packed securely before being sent toeach JUSCO Supermarket in refrigeratedtrucks. Hence, customers get to enjoy thegoodness of fresh seafood.

Daily and Dairy ProductsCustomers can find anything they want in their grocery list, as the JUSCOSupermarket also offers a variety ofdairy products, frozen foods, dry foodsand more.



HousewareTo complement customers' trendy,affluent lifestyles, JUSCO has ahouseware section that leaves customersspoilt for choice.

Electrical and electronic appliancesCustomers who are looking for imported or locally produced electrical and electronicgoods must go to JUSCO for the vast choices it offers in brands and prices.

CosmeticsJUSCO also houses a list of popular, luxuriouscosmetic brand names to satiate customers'need to pamper and beautify themselves withthe best products in the market.

Fashion apparelOther than the popular brands, JUSCO also has its own in-house brands such as ChicAvenue, Scarlet, T'z Factory and Suave. These brands are for men, women andchildren of all ages and lifestyles. They are also top favourites among customers,thanks to their simple, chic and casual designs that come with affordable prices.

VEHICLESVEHICLES, currently located in our Bukit Raja Shopping Center,comprises a well-stocked mini mart that sells car accessoriesas well as showrooms to showcase selected car and

motorcycle models to customers. At VEHICLES, customers can also have the luxury of being able to shop and have theirvehicles serviced at the same time.



INTRODUCTION

, regardless of howtimes may havechanged, is to serve

the ‘Customer First’. We are always mindful of the threekeywords which make up the essence and character of theretail industry and must be considered in any development:‘peace’, ‘people’ and ‘community’. Ours is a person-to-person

business and our existence is deeply intertwined with thepeople of the regions and societies in which we serve. Theseprecepts remain the same wherever we do business, where weact as a contributing member of the local community.

OUR PRINCIPLE

is to operate as an “international-scale retailing group”, recognisedfor excellence not only in Japan,

but also in other nations. The international recognition we are working to achieve is not one which can be measuredmerely in quantifiable terms of size, growth and profitability.

We hope to be competitive at the global level in intangibleaspects such as customer satisfaction and corporatecitizenship. We are dedicated to the idea of “qualitymanagement” to further enhance our capabilities.

OUR GOAL

is to establish asolid competitiveposition and

achieve continuous growth. Two key components underlyingthis strategy are:• Accelerating Shopping Center Development. We are

channeling our resources towards developing attractive,integrated commercial facilities which our customers canfully enjoy, such as regional shopping center andneighbourhood shopping center. This segment also involvesleasing shopping space and facilities to tenants.

• Aggressive Pursuit of GMS Stores. Our GeneralMerchandise Stores (GMS), which combine supermarketsand departmental stores under one roof, operate as full-lineretailers. Products offered range from food and other dailynecessities, apparel and household goods (includingbedding and bathroom products) to specialised productssuch as home appliances, sporting goods and cosmetics.

OUR STRATEGY

JAYA JUSCO STORES BHD is a leading retailer in Malaysiawith a total revenue of RM1.3 billion.

The Company was incorporated on 15 September 1984.JAYA JUSCO STORES BHD was set up in response to theMalaysian Government’s invitation to AEON Japan to helpmodernise the retailing industry in Malaysia. The ‘JUSCO’name today is well established among Malaysians as wellas foreigners, especially due to its association with theinternational AEON Group 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 demands ofconsumers, is clear evidence of this. The Company’sperformance has been further enhanced by themanagement’s acute understanding of target market needsand 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., 109 consolidatedsubsidiaries and 32 affiliated companies. In addition to itscore general merchandise stores (GMS) plus its supermarketand convenience store operations, AEON is also active inspecialty store operations, shopping center developmentoperations and services as well as other operations.

AEON Co. Ltd. is an integrated Japanese retailer andwith over 140 subsidiaries and affiliates, AEON is activenot only in Japan but also in Southeast Asia, China andNorth America.

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



AEON’S CORPORATE COMMITMENT

On 21 August 2001, JUSCO Co. Ltd.,(Japan United Stores Company) changed

its name to AEON Co. Ltd. and announced its aim to becomeone of the top 10 global retailers, in the next decade.

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

‘Glocal’ is AEON's term for - "Global management standardssupporting the best local operations to meet consumer needsin the local markets."

MORE ABOUT AEON’S CORPORATE COMMITMENT

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

At AEON, we are concerned with life as a whole.

The word ‘life’ stands both for the essential quality commonto all living things and for an individual’s way of living. Itsuggests both environmental stewardship and economicgrowth, spiritual fulfillment and material affluence. Andindeed, these facets of ‘life’ are not separate, but should beintegral parts of a whole. As member of the retail industry,we at AEON are concerned with the daily life of each one ofour customers, and by this we mean ‘life’ in the fullestpossible sense. To enhance people’s lives as only AEON can : that is our raison d’étre.

At AEON, our approach is open and dynamic.

To achieve our mission, we must be in touch with peoples’aspirations. This means not only be constantly attuned toour customers’ wishes, but also being guided by our owninnermost values. Approaching every occasion with openminds and hearts, we must do our utmost to create a futureof limitless promise from the materials of everyday life.

Tree Planting at JUSCO Taman Universiti, Johor Bahru on 6 July 2002

Whenever a new shopping center is opened in Japan or inSoutheast Asia, the AEON Group makes every effort to planttrees native to that locale as part of the facility. By having thecustomers plant trees together with us, we conceived this as ameans of raising people’s awareness of environmental problems.



As we enter a new era, we at AEON reaffirm our basic principles.

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

Our first basic principles is dedication to peace : AEONis a corporate group whose operations are dedicated to the pursuit 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 principles is dedication to people:AEON 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 principles is dedication to community:AEON is a corporate group rooted in local communitylife and dedicated to making a continuing contributionto the community. • We encourage our relationships with local

communities to evolve into ongoing partnerships sothat, together, we can create a future of limitlesspromise.

• We aim to become the local community’s mosttrusted partner in the effort to create amenities forbetter living.

On 21 August 2001, we at AEON renewed our corporateidentity. We are sure that our customers, seeing theenergy that we ourselves bring to our work, willunderstand and appreciate the philosophy of the newAEON. AEON’S Corporate Commitment leads the way.

Our Customers

Peace

People Community

Cheque Presentation Ceremony to World Wide Fund for Nature (WWF) by Mr. Soichi Okazaki, Managing Director of Jaya Jusco Stores Bhd to Y.Bhg. Dato’ Dr. Mikaail Kavanagh, Executive Director of WWF Malaysia on 17 January 2003.



CORPORATE INFORMATION

FINANCIAL CALENDAR

Board of Directors• Dato’ Abdullah bin Mohd Yusof (Chairman) • Toshiji Tokiwa• Soichi Okazaki• Masato Yokoyama• Akihito Tanaka• Ramli bin Ibrahim• Brig.Jen. (B) Dato’ Mohd Idris bin Saman• Datuk Zawawi bin Mahmuddin• Chew Kong Seng

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

Registered OfficeTingkat 4,Menara Kausar,Jalan 3/27A, Seksyen 1,Bandar Baru Wangsa Maju, 53300 Kuala Lumpur.Tel: 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, incorporated anddomiciled in Malaysia and listed on the Main Boardof the Kuala Lumpur Stock Exchange.

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)

Quarterly Results Announcement1st Quarter2nd Quarter3rd Quarter4th QuarterNotice of Annual General MeetingAnnual General MeetingPayment of DividendBook Closure Payment

30 July 200223 October 200215 January 200324 April 200326 May 200317 June 2003

3 July 200322 July 2003



JAYA JUSCO STORES BHD SHARE PRICESTOCK CODE : 6599

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

5.90 6.70 7.15 7.05 7.25 6.95 6.70 6.35 6.50 6.50 6.80 6.80

5.00 5.70 6.70 6.90 6.70 6.60 5.80 5.95 6.25 6.15 6.35 6.55

1400 2277 1343 1397 709 1029 912 1159 677 230 1053 407

2002 / 2003

High (RM)

Low (RM)

Volume (‘000)

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

RM

2500

2000

1500

1000

500

0

Vol'000

High (RM) Low (RM) Volume



FIVE YEARS FINANCIAL HIGHLIGHTS

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

For Five Years - As at 28 & 29 February

Income Statement 2003 2002 2001 2000 1999RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 1,368,268 1,200,636 990,006 804,214 679,710 Retailing 1,262,851 1,107,158 909,775 732,779 606,956 Property Management Services 105,417 93,478 80,231 71,435 72,754

Profit before tax 90,833 80,327 69,390 55,710 40,113 Profit after tax 60,344 53,989 46,037 38,210 39,880 Net dividend 12,636 12,636 12,636 8,424 11,700

Balance sheet

Property, plant and equipment 561,221 508,630 517,818 447,454 445,191 Interest in subsidiary company - - - - 8 Investment 175 175 175 175 175 Current assets 225,489 188,541 218,075 104,668 102,398 Current liabilities (304,986) (263,379) (332,810) (218,972) (192,124)

Total assets 481,899 433,967 403,258 333,325 355,648

Financed By

Share capital 87,750 87,750 87,750 58,500 58,500 Unappropriated profit 223,475 175,767 134,414 96,801 68,531 Revaluation reserve 55,352 55,352 55,352 55,352 57,111 Share Premium 108,488 108,488 108,997 58,386 58,386

Shareholders' funds 475,065 427,357 386,513 269,039 242,528 Long term liabilities - - 10,135 60,260 107,720 Deferred taxation 6,834 6,610 6,610 4,026 5,400

481,899 433,967 403,258 333,325 355,648

Statistics

Net earnings per share (sen) 68.8 61.5 *68.1 *57.5 68.2 Gross dividend per share (%) 20 20 20 20 27.7Net tangible assets per share (RM) 5.41 4.87 4.40 4.60 4.15



REVENUE

PROFIT ATTRIBUTABLETO SHAREHOLDERS

500

98/99

679.7

804.2

990.0

1,200.6

1,368.3

99/00 00/01

Financial Year

01/02 02/03

1,000

1,500

1,250

750

250

RM million

10

20

30

40

50

60

70

98/99

39.9 38.2

46.0

53.9

RM million

60.3

99/00 00/01

Financial Year

01/02 02/03



BOARD OF DIRECTORS

(Seated from left to right)

Mr. Soichi OkazakiManaging Director

Dato’ Abdullah bin Mohd YusofNon-Independent Non-ExecutiveChairman

Mr. Toshiji TokiwaNon-Independent Non-Executive Vice Chairman

(Standing from left to right)

Mr. Akihito TanakaNon-Independent Non-Executive Director

Datuk Zawawi bin MahmuddinIndependent Non-Executive Director

Encik Ramli bin IbrahimNon-Independent Non-Executive Director

Mr. Chew Kong SengIndependent Non-Executive Director

Mr. Masato YokoyamaNon-Independent Executive Director

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



Note : All the Directors mentioned on pages 18 to 20 have no conflicts of interest with Jaya Jusco Stores Bhd or any relationshipwith any Director and/or substantial shareholder nor have they any convictions for offences within the past 10 years, except fortraffic summons, if any.

DATO’ ABDULLAH BIN MOHD YUSOF (64), (MALAYSIAN) NON-INDEPENDENT NON-EXECUTIVE CHAIRMAN

Dato’ Abdullah bin Mohd Yusof was appointed the Chairman of Jaya Jusco Stores Bhd on 26October 1984. He holds a Bachelor of Law (Honours) from University of Singapore, which heobtained in 1968. He has more than thirty (30) years of experience as an Advocate & Solicitor.He started his career with Skrine & Co., as a Legal Assistant in 1968 before starting his ownpartnership under the name of Tunku Zuhri Manan & Abdullah, Advocates & Solicitors in 1969and subsequently renamed the law firm to Abdullah & Zainudin, Advocates and Solicitors.Currently, Dato’ Abdullah is also the chairman of United Malayan Land Bhd. He sits on the Boardof Directors of Southern Steel Berhad, Sistem Televisyen Malaysia Berhad, Malaysia MiningCorporation Berhad, MMC Engineering Group Bhd, Tronoh Mines Malaysia Bhd and PernasInternational Holdings Berhad, all of which are companies listed on the KLSE and sits on theBoard of Directors of several private limited companies. He is a member of the Remuneration &Nomination Committee of the Company. Dato’ Abdullah bin Mohd Yusof has attended all thefive (5) Board meetings held in the financial year. He holds 154,000 ordinary shares directly and10,421,500 ordinary shares indirectly in the Company.

DIRECTORS’ PROFILES

MR. TOSHIJI TOKIWA (63), (JAPANESE) NON-INDEPENDENT NON-EXECUTIVE VICE CHAIRMAN

Mr. Toshiji Tokiwa was appointed a Non-Executive Director of the Company on 16 June2000. He holds a Bachelor of Law degree from Keio University, Japan, which he obtainedin 1963. He joined The Dai-Ichi Kangyo Bank Ltd., in 1963 as a Management Trainee. In1993, he was promoted to the position of Director and General Manager of the New YorkBranch of The Dai-Ichi Kangyo Bank Ltd., in New York, USA. Subsequently, he waspromoted as a Senior Managing Director of The Dai-Ichi Kangyo Bank Ltd., in Japan from1995 to 1996. He joined Chuo Real Estate Co. Ltd., a company principally involved in theleasing and management of office building, as the President and CEO from 1996 to 2000and was also a Non-Executive Corporate Auditor of Fujitsu General Co. Ltd., from 1997 to2000. He joined AEON Co. Ltd. as a Non-Executive Director in 1999 and was subsequentlyappointed as the Chairman of AEON Co. Ltd. in 2000. Mr. Toshiji Tokiwa has attended three(3) out of the five (5) Board meetings held in the financial year. He does not hold any sharesin the Company.

MR. SOICHI OKAZAKI (44),(JAPANESE) MANAGING DIRECTOR

Mr. Soichi Okazaki was appointed the Managing Director of Jaya Jusco Stores Bhd on19 June 2001. He holds a Bachelor of Arts in Commerce from Toyo University, in Japan,which he obtained in 1981. He has more than twenty (20) years of experience in theretail industry. He joined AEON Co. Ltd. of Japan in 1981 and has worked in severalAsian countries. From 1990 to 1995, he was attached to Jusco Stores (Hong Kong) Co.Ltd. In 1995 to 1998 he was a Director of Guangdong Jusco Teem Stores Co. Ltd. inChina. He was seconded to Jaya Jusco Stores Bhd in 1998 to be in charge ofMarketing, Business Development, Store Operations and Shopping CenterManagement. Mr Okazaki initiated several successful business strategies, which hashelped contributing to the growth of Jaya Jusco Stores Bhd’s performance in particularduring the Asian financial crisis in 1997 - 1998. He succeeded Mr. Masaaki Toyoshimain becoming the Managing Director of the Company. Mr Soichi Okazaki has attended allthe five (5) Board meetings held in the financial year. He holds 15,000 ordinary sharesin the Company.



MR. MASATO YOKOYAMA (50), (JAPANESE) NON-INDEPENDENT EXECUTIVE DIRECTOR

Mr. Masato Yokoyama was appointed an Executive Director of the Company on 26 October2001. He holds a Bachelor of Arts in Commerce from Waseda University in Japan, whichhe obtained in 1976. He joined AEON Co. Ltd. in 1976 and was the Store Manager ofIshioka Store prior to his secondment to Jaya Jusco Stores Bhd in 1993. Mr. Yokoyamaheld the position of the Store Manager of Jaya Jusco Taman Maluri from 1993 to 1998.He was promoted to become the Senior Softline Merchandising Manager from 1998 to1999 and the Senior Operations Manager from 1999 to 2000. Currently, Mr. MasatoYokoyama is the Executive Director in charge of Store Operations, Human Resource,Finance and Administration. Mr. Masato Yokoyama has attended all the five (5) Boardmeetings held in the financial year. He holds 15,000 ordinary shares in the Company.

MR. AKIHITO TANAKA (55), (JAPANESE) NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. Akihito Tanaka was appointed a Director of the Company on 1 March 1989. He holdsa Bachelor of Arts degree in Journalism from Kansai University, Japan which he obtainedin 1970. He joined AEON Co. Ltd. in 1970. In 1986, he was seconded to Jusco Stores (HongKong) Co. Ltd., where he was appointed as the Personnel Manager. Thereafter he wasappointed as the Managing Director of Jaya Jusco Stores Bhd from 1989 to 1997. In 1993,he was conferred the “Outstanding Award for Executive Excellence” by the Chairman andCEO of AEON Co. Ltd. In 1996, he was appointed a Director of AEON Co. Ltd., and nowholds the position of Managing Director of International Business in AEON Co. Ltd. He wasthe Vice President of the Japanese Chamber of Trade & Industry, Malaysia (JACTIM) andthe Governor of JACTIM Foundation from 1996 to 1997. He is the Chairman of TaiwanJusco Co.Ltd. and a Director of Siam Jusco Co. Ltd., Jusco Stores (Hong Kong) Co. Ltd. andQingdao Dontai Jusco Co. Ltd. Mr. Akihito Tanaka is also the Chairman of theRemuneration and Nomination Committees of the Company. Mr. Akihito Tanaka hasattended three (3) out of the five (5) Board meetings held in the financial year. He holds150,000 ordinary shares in the Company.

ENCIK RAMLI BIN IBRAHIM (62),(MALAYSIAN) NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

Encik Ramli bin Ibrahim was appointed a Non-Executive Director on 20 August 1996. He isa member of the Malaysian Institute of Accountants. He is also a Fellow of the AustralianInstitute of Chartered Accountants. He was attached to KPMG Peat Marwick (“KPMG”)(now known as KPMG) in Australia, United Kingdom and Malaysia from 1959 to 1995. Hewas appointed a Partner of KPMG Malaysia in 1971. In 1989, he was made the firstbumiputera Senior Partner of KPMG Malaysia. He also served on the Boards of KPMGInternational and KPMG Asia Pacific from 1990 to 1995. He retired from KPMG Malaysia in1995. He was a member of the Committee of Enquiry set up to investigate the affairs ofBumiputra Malaysia Finance Ltd., the Hong Kong subsidiary of Bank Bumiputra MalaysiaBerhad (which had merged with Bank of Commerce (M) Bhd to form Bumiputra-CommerceBank Berhad) from 1983 to 1985. Currently, he sits on the Board of Directors of Hua JooSeng Enterprise Bhd, Ranhill Berhad, Malaysia Tobacco Company Berhad and several otherunlisted public and private limited companies. He is also a member of the Audit andRemuneration Committees of the Company. Encik Ramli bin Ibrahim has attended all thefive (5) Board meetings held in the financial year. He holds 150,000 ordinary sharesindirectly in the Company.



BRIG. JEN. (B) DATO’ MOHD IDRIS BIN SAMAN (58), (MALAYSIAN) INDEPENDENT NON-EXECUTIVE DIRECTOR

Brig. Jen. (B) Dato’ Mohd Idris bin Saman was appointed a Non-Executive Director on 16June 2000. He holds a Post Graduate Diploma in Management Studies from the SloughCollege, United Kingdom, which he obtained in 1980. He was a graduate of the AirCommand & Staff College, Maxwell, USA and the Armed Forces Defence College, KualaLumpur. He joined the Royal Malaysian Air Force as a Pilot Officer in 1965 and he servedthe Royal Malaysian Air Force for thirty-five (35) years, in various executive positionswithin its Logistic Branch. He retired from the Royal Malaysian Air Force in 2000 as theAssistant Chief of the Air Force (Material). He is currently the Executive Chairman ofDiversified Jet Sdn. Bhd., a company principally involved in the supply of materials andservices to the Malaysian Armed Forces. He is also a Director of Affin Fund ManagementSdn. Bhd. Dato’ Mohd Idris bin Saman is a member of the Audit and NominationCommittees of the Company. Dato’ Mohd Idris bin Saman has attended all the five (5)Board meetings held in the financial year. He does not hold any shares in the Company.

DATUK ZAWAWI BIN MAHMUDDIN (57), (MALAYSIAN) INDEPENDENT NON-EXECUTIVE DIRECTOR

Datuk Zawawi bin Mahmuddin was appointed a Non-Executive Director of the Company on 23July 2001. He holds a Bachelor of Arts (Honours) Degree from the University of Malaya, whichhe obtained in 1968. Datuk Zawawi joined the Administrative and Diplomatic Service and beganhis career as an Administrative Officer in the Ministry of Transport in 1968. From 1970 to 1975he served as private secretary to the Deputy Prime Minister and thereafter held variouspositions in the Cabinet Secretariat of the Prime Minister’s Department from 1975 to 1990. Hissubsequent appointments were as follows:- Federal Secretary in Sarawak (1990 - 1992), DeputySecretary General 1, Ministry of Home Affairs (1992 - 1994), Secretary General, at the Ministryof Information (1994 - 2000). Datuk Zawawi was formerly on the Board of Syarikat ExplosiveMalaysia Sdn. Bhd. (SME), National Film Development Corporation (FINAS), Governing Council,Bernama and Sukom Ninety Eight Bhd. He is currently a director of Home Video Distributors Sdn.Bhd. (HVD), and Knowledge Green Park Technology Sdn. Bhd., and the Chairman of TwoAdvertising Sdn. Bhd. and Northport Distripark Sdn. Bhd., all of which are private limitedcompanies. He is also a member of the Nomination Committee of the Company. Datuk Zawawibin Mahmuddin has attended all the five (5) Board meetings held in the financial year. He doesnot hold any shares in the Company.

MR. CHEW KONG SENG (65), (MALAYSIAN) INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. Chew Kong Seng was appointed a Non-Executive Director on 23 July 2001. He is a Fellowof the Institute of Chartered Accountants in England and Wales, a Member of the MalaysianInstitute of Accountants and the Malaysian Institute of Certified Public Accountants. He was atax officer in the Inland Revenue Department in the United Kingdom and then joined StoyHayward & Co., in the United Kingdom from 1964 to 1970. He returned to Malaysia and joinedTurquand Young & Co. (now known as Ernst & Young) and was subsequently transferred toSarawak office in 1973, first as Manager in-charged and later as Partner in-charged. He wasappointed as the Managing Partner of Ernst & Young from 1990 to 1996. Currently, Mr. Chewis an Executive Director of Sarawak Enterprise Corporation Berhad and the Deputy Chairmanof Sarawak Electricity Supply Corporation. He is a Director of Great Wall Plastic IndustriesBhd, Hong Leong Properties Bhd, PBA Holdings Bhd and Encorp Bhd. He is also a Director andthe Audit Committee Chairman of Petronas Dagangan Berhad and Industrial Concrete ProductsBerhad and is a Director and a member of the Audit Committee of Petronas Gas Berhad. Mr.Chew is the Chairman of the Audit Committee and a member of the Nomination Committee ofthe Company. Mr. Chew Kong Seng has attended all the five (5) Board meetings held in thefinancial year. He does not hold any shares in the Company.



OUR SENIOR MANAGEMENT

(Seated from right to left)

Mr. Soichi OkazakiManaging Director

Ms. Chong Swee YingGeneral Manager Shopping Center and New BusinessDevelopment

Puan Noryahwati Mohd. NohGeneral Manager Human Resource & Administration

Puan Nur Qamarina ChewGeneral Manager Store Operations & Customer Care

(Standing from right to left)

Mr. Poh Ying LooGeneral Manager Finance

Mr. Hirohisa SannomiyaAssistant General Manager Construction & BusinessDevelopment

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

Mr. Toyofumi KashiGeneral Manager Merchandising

Mr. Masato YokoyamaExecutive Director

Encik A.Rashid bin AdamGeneral Manager Corporate Affairs



On behalf of the Board of Directors, I am pleased topresent to you the Annual Report and Audited FinancialStatements of JAYA JUSCO STORES BHD for the financialyear ended 28 February 2003.

FINANCIAL REVIEWIt has indeed been a tough and challenging year for theCompany in the year under review as the Company facesgrowing competitions, challenging economy environmentand changing consumer demands. I am pleased to note thatdespite these challenges, the Company continued to growand, for the year under review, registered a revenueturnover of RM1.368 billion which represents an impressive13.9% growth over the previous financial year's revenueturnover. Similarly at the earnings level, the Companyregistered a profit before tax of RM90.8 million and a profitafter tax of RM60.3 million which represent 13.0% and11.8% higher growth respectively over the previousfinancial year's profit level. The strong performanceenabled the Company to register earnings per share of 68.8sen for the year under review as compared with the 61.5sen in the previous financial year. The Company is also ableto present a healthy balance sheet by the end of February2003, having a positive cash position and with noborrowings. At balance sheet date, net tangible assets pershare of the Company stood at RM5.41 per share.

REVIEW OF OPERATIONSMalaysia's economy recovered well in 2002, driven bystrong domestic demand and supported well through thegovernment's various economic stimulus measures. Theretail industry benefited from this economy growth asreflected by the entry of new players into the market, theconsolidation and expansion of existing ones, theintroduction of new retail format and the activecompetition for the consumers' Ringgit. Total retailspace has also increased as new malls are built andexisting malls are expanded, providing more retail spacefor tenants and more choices for consumers.

We recognised these challenges early and had, in theyear under review, implemented various strategicmeasures in response to these changes in the industryand also the economy. During the year under review, theCompany has focused strongly on the areas of customerservice, customer loyalty, pricing strategy as well asmerchandise assortment and quality while at the sametime ensuring that these are further supported by a strongtenant mix and well maintained premises, so as to createthe perfect shopping ambience for customers. Wecontinued to place emphasis on customers' wants, needsand their suggestions on our services and facilities. Ourloyalty programme continued to be successful and ourown JUSCO FEST has been very well received by

CHAIRMAN’S STATEMENT



customers. On customer service, during the year underreview, we have specially focused and emphasised on ourfrontline customer service by implementing a year longcashier-training programme, which culminated in a grandfinale contest where cashiers who were nominated bycustomers, competed in the customer service skillstournament for the coveted ' Cashier of the Year ' Award.

As part of our long-term strategic investment in humanresource, the Company has also established a retailcenter in collaboration with the Open UniversityMalaysia (OUM) to provide full time employment-basedtraining in retail for staff and new apprentices. Thetraining allows them the opportunity to develop theircareer in retailing. The Company has also resumed itsJapan Management training scheme whereby selectedstaffs were sent for training attachment with AEON'sassociate companies in Japan that are involved in theretail business.

The Company is pleased to report that, in the year underreview, all its stores continued to perform well. At theCompany's level, retail sales recorded a growth of 14.0%over the previous financial year’s. On same store basis,excluding its new store in Taman Universiti, Johor Bahru,the Company registered a retail sales growth of 9.7% overthe previous financial year's. Its stores in Wangsa Maju,Bandar Puchong, Mid Valley Megamall, Taman Maluri,Ipoh and Melaka posted growth ranging from 7% to 18%over their previous year's performance. The Company'sstores in Bandar Utama and Bandar Baru Klang alsocontinued to hold their own against competition,registering a marginal growth over their previous year'sperformance. The year under review also marked theCompany's entry into the retail market in Johor Bahru andthe southern region. The Menteri Besar of Johor, YangAmat Berhormat Dato’ Hj Abdul Ghani Othman officiatedthe opening of JUSCO Taman Universiti, our ninth store,on 8 August 2002. Performance from this store has beenencouraging and the Company is confident that, giventime, it will grow in strength as awareness of theCompany's presence and the new shopping experience itbrings increases.

Our shopping centers, with their good and comfortableshopping environment, remain popular, which is partlydue to our continuous maintenance, refurbishmentprogrammes, strong tenant mix, close tenant relationshipand good interior layout. In the year under review,shopping center income continued to remain steady asthe shopping center enjoyed an average occupancy rate of98% at the Company level. For year under review, theCompany registered RM105.4 million under its propertymanagement services, which represent a 12.8% growthover its previous year's performance.

CORPORATE CITIZENSHIPIn line with the Company's corporate objectives ofcontributing to the welfare of the local community aroundits stores and shopping centers, the Company, in the yearunder review, continued to be involved in variouscharitable projects for the benefits of the community,selected charitable organisations and alsounderprivileged children and youths. As with the JUSCOtradition, during the opening of its ninth store in JohorBahru, a tree planting ceremony was carried out togetherwith the participation of local school children. In line withthe WAOH Charity Fund’s mission of providing financialaid to those with deserving needs, especially in the areasof medical care, education or better living conditions, atotal of RM260,000 was donated to selected charitableorganisations and underprivileged children. From charitysales, a donation of RM10,454 was also given to theWorld Wide Fund for Nature Malaysia, as part of theCompany's support towards the conservation of forest asa natural habitat for the Orang Utans. During thelaunching of the WAOH Charity Fund Drive at the TamanUniversiti store, a total of RM50,000 was also donated tofive selected charitable organisations from Johor Bahru.

FUTURE PROSPECTS AND CHALLENGESDomestic consumer spending is identified as one of thekey drivers that will sustain our economic growth in thecoming years. Though prolonged geopolitical andeconomic uncertainties may dampen consumer spendingand hurt the retail industry, we remain confident that withthe support of continuous government economic stimulusmeasures, consumer spending in the forthcoming year



will continue to remain resilient. The retail industry inMalaysia is expected to continue growing and evolve,offering more choices to consumers and their everchanging lifestyles, tastes, wants and desires in terms ofproduct offerings, shopping environment, concept orfacilities. Retailers, on their part, face challenges ofcompeting to fulfill these consumers' wants and needs.This competitive environment is expected to be moreintense in the coming years as the retail industry expandswith the establishment of new malls, hypermarkets, standalone specialty stores and the introduction of newretailing concepts.

While most retailers place competitive pricing as theirmain strategy, the Company believes that good customerservice, facilities, good shopping environment, availabilityof merchandise remain important complements.Therefore, the Company, while ensuring that its pricingstrategy is always competitive, will continue to focus onareas of strengths in customer service, merchandiseassortment and quality, customer loyalty and goodshopping environment.

The Company, with its strong financial position, will alsocontinue to source for potential strategic locations both inthe Klang Valley and the southern region to furtherstrengthen its position in the market. In January 2003, theCompany had entered into an agreement to acquire anapproximate nine-acre strategic piece of land in Kepong,Kuala Lumpur, for RM36.07 million. A new shoppingcenter will be built on this land and this is expected tofurther consolidate the Company's position in the retailmarket in the Klang Valley.

DIVIDENDThe Board Of Directors has the pleasure of recommendingfor your approval, a first and final dividend of 20 per centless tax, amounting to RM12.636 million for the financialyear under review.

APPRECIATIONLastly, on behalf of the Board Of Directors, I wish to takethis opportunity to congratulate and thank themanagement and staff of the Company for their hardwork, commitment and dedication in the year underreview, which has contributed to the Company’s excellentperformance. I also wish to thank all our customers,business associates, regulatory bodies and most of all,our shareholders for their continued support andconfidence in the Company.

DATO' ABDULLAH BIN MOHD YUSOFCHAIRMAN



REVIEW OF OPERATIONS

Our country's economy recovered further in 2002 toregister a growth of 4.2% for the year as comparedwith 0.4% growth in 2001. Growth was broad basedacross the various sectors of the economy, driven bystrong domestic demand and further sustained throughstable consumer spending.

The economy growth benefited the retail industrywhich had seen the entry of new players, aggressiveexpansion by existing retailers, introduction of newretail formats and competitive price war. Retailerscompeted for dominant presence in targeted areas andmarkets with anticipation of further growth inpopulation or catchment areas.

Our Company as a leading retailer in the countryrecognises these challenges early and through its ownstrategies and measures, in the year under review,continued to produce an impressive performance in bothits retailing operations and shopping center management.

RETAILING OPERATIONSRetail business had grown intensely competitive in theyear under review especially with the emergence ofhypermarkets that have been aggressive on both theirexpansion and marketing activities as they seek toincrease their market share and achieve economy ofscales in their operations.

Competition from hypermarkets are not new to theCompany as its existing stores had from time to timein the last few years faced new openings ofhypermarkets near their premises. Though generallydifferent in concept, target market, merchandise rangeand quality, Jaya Jusco Stores Bhd, with itsdepartmental store cum supermarket conceptrecognises the need, to a certain extent, to competewith these hypermarkets for the same consumerRinggit especially in the supermarket section.Competition is keenly felt by stores that are locatednear the hypermarkets.

While the Company through its own pricing strategy hadbeen able to match the hypermarkets’ strategy of usingpricing as their main attraction, the Company furthercomplemented this pricing strategy through its wide rangeof quality general merchandise categories, freshperishables, good eateries and ensuring that its customersare able to shop and dine in comfort with good customerservices, facilities and a cosy shopping environment.

For the financial year ended 28 February 2003, theCompany's retail sales at RM 1.263 billion is 14.0%higher against the previous financial year's retail salesturnover. Excluding JUSCO Taman Universiti, thegrowth is 9.7% on same store basis.

All stores performed better for the year under reviewdespite the competition and the disruption inoperation due to renovation and refurbishment. Ourstore in Taman Maluri enjoyed increased patronage asit showed growth of 18.6% over its previous year'sperformance. JUSCO Bandar Puchong despite comingunder intense competition from new hypermarketnearby, registered an impressive growth of 15.3% overits previous year's performance. JUSCO Mid Valleyalso continued to benefit from its strong drawingpower and Megamall's success as it posted a 14.4%growth. JUSCO Wangsa Maju and Melaka maintainedtheir consistent growth of 10.1% and 6.8%respectively. As for JUSCO Ipoh , it continued to enjoyits status as a shopping destination in Ipoh with a



growth of 13.4%. Our Bandar Baru Klang store, despitefacing competition from the opening of newhypermarkets nearby towards the end of 2002, alsoposted growth of 2.8%.

On 31 July 2002, the Company opened its ninth store atTaman Universiti, Skudai, Johor Bahru. The MenteriBesar of Johor officially opened the store on the 8August 2002. JUSCO Taman Universiti which representsthe Company's first store in the southern region state ofJohor, brings a new level of shopping experience withits new general merchandise store format. The storewith its wide layout and attractive displays of qualitymerchandise in a superb shopping environment, had anapproximate net lettable area of 202,000 square feetincluding about 53,000 square feet of tenant space. Itoffers not only shopping but also a place for fun andfine dining for the family. As our presence in TamanUniversiti draws shoppers from other parts of JohorBahru, it further complements the existing business ofthe surrounding shops and also the small traders whoserve different niche markets. Performance from thisstore had been commendable in the year under review.

In anticipation of new competition and the need toupgrade the store, our store in Bandar Utama hasundergone a refurbishment programme during the yearunder review, to change its interior layout and image. Thesupermarket area was expanded and a new delicatessenarea was added, giving the store a new and refreshinglook and allowing customers to shop in greater comfort.Despite the disruption in operations due to therefurbishment and the need for partial closure, JUSCOBandar Utama, in the year under review, managed acommendable performance of 1.0% growth over itsprevious year's performance.

And in response to changing consumers' taste budsand our effort to be the market leader in new categoryof merchandise, the Company in the year under reviewintroduced a new food court concept called ARENA inits stores in Taman Universiti and Bandar Utama.Essentially a more elegant and upgraded version of our normal food court concept in other stores, ARENA

provides new variety of delicious menu for ourcustomers' dining under a cosy ambience.

During the year under review, the Company had also, insynergy with its core businesses, introduced anothernew merchandise category concept called VEHICLESwhich was launched in November 2002 in our Bukit RajaShopping Center. Essentially, VEHICLES is the answerfor a one-stop center for motorists to have their vehiclesserviced, accessorised or washed in a clean, bright,comfortable environment and at convenient hours.There is an accessories mini mart and also showroomsfor selected models of cars and motorcycles from whichcustomers can place their orders. Customers also havethe luxury of being able to do their shopping in ourshopping centers while their vehicles are beingattended to. This new category of merchandise is nowcurrently being piloted at our store in Bandar Baru Klangand will be expanded to other stores in times to come.

Our J Card loyalty programme continues to remain strongand popular. On the average, about 54% of our monthlysales is derived from purchases by J Card members. The JCard Days at our stores received tremendous responsefrom the members and they usually represent the highestsingle day's sales for each store. Members enjoyed greatdiscounts and bargains during the J Card Days besides therebates and redemption points on their purchases. TheCompany while continuing to ensure that its existingmembers will remain loyal through increased benefits andprivileges, had also worked out strategies to increase themembership in new stores and new catchment areas.

Through our PEARL magazines which are publishedfree of charge for our J Card members every twomonths, the Company took the opportunity to providecreative lifestyle and home ideas for the members,using the diverse attractions that are available in ourstores, the tenants in our shopping centers and alsofrom participating establishments outside ourshopping centers. New benefits and privilegesavailable to J Card members are also highlighted toensure that members will always be aware of thebenefits and continue to enjoy them.


Our JUSCO FEST, an annual fun filled Company widecarnival celebration is fast becoming popular with ourcustomers. Besides offering great bargains anddiscounts, a host of activities were lined up during theperiod at all our stores and shopping centers, fromfamily oriented activities and performances tocharitable events. In the year under review, theCompany also took the opportunity to celebrate its18th Anniversary during the JUSCO FEST celebrationheld for 12 days in October 2002.

SHOPPING CENTER OPERATIONSOur shopping center business had remained steady forthe year under review. We managed a consistentaverage occupancy rate of 98%compared with the industryaverage of 81.6%. For the yearunder review, the income from our shopping centermanagement is RM105.4 millionat the Company level and thisrepresents an increase of 12.8%over the previous year's income.Excluding income from theincreased tenant space in ourJUSCO Taman UniversitiShopping Center, our shopping center income alsoregistered a 9.1% growth over its previous year'sperformance.

In JUSCO Taman Universiti, we had managed to enjoy fulloccupancy rate for the approximate 53,000 square feet ofnet lettable area. There are approximately 60 tenantscurrently in the shopping center that offer a mix of foodand beverages, fashions, accessories, entertainment andservices for the comfort of customers.

Our shopping center management continuously reviewedthe tenant mix to ensure that the tenant mix for each ofour shopping center continuously meets the requirementsof the ever changing market that they serve. A closeworking relationship with tenants is maintained andthrough dialogue, all parties explore ways to furtherimprove their businesses in our premises for the mutual

benefit of all. Tenants are continually encouraged to dotheir own promotional events, provide excellent customerservice, enhance their shopfront presentation and layout,to encourage shoppers to spend longer hours in ourshopping centers. Tenants are also encouraged toparticipate in events organised by the Company as itcontinues to promote and organise successful thematicevents and activities for its shopping centers. Informativelifestyle magazines for shoppers promoting the tenants,their merchandise and promotion events, and otherongoing activities in the shopping center were also usedto promote tenants’ presence in our shopping centers. To allow tenants to tap on our large J Card membersbase, tenants were invited to participate in our

J Card programme by offeringbenefits and privileges to our J Card members. They are alsoencouraged to hold their promotionand discount sales during our J Card Days at each store.

The current retail trend showsemergence of new shoppingcenters as well as refurbishment,upgrading of facilities and tenantmix by existing shopping centers.

While most malls generally target the family shoppinggroups, others are built and conceptualised to meet theneeds of certain segment groups like office workers ortourists. Besides creating new tenant space in theirexisting malls to retain their shoppers’ patronage andensuring that the current tenants continue to stay,shopping center operators strive to bring in new and moreexciting tenants to continue attracting their customers.There will be stiff competition from the new malls ontenant recruitment, as prospective tenants will be offerednew concepts, bettter facilities, competitive rents andother benefits.

Therefore, in the coming year, the management willcontinue to ensure that our shopping centers remain thepreferred choice for families to shop, dine and spendtheir leisure time. Besides more promotions and eventsfor the forthcoming year to bring in more shoppers to




our shopping centers, close rapport and cooperationwith tenants through joint participation to promote theirpresence in our shopping centers will also be carriedout. To further attract shoppers, new sub anchortenants through our own merchandise category will becreated. The Company is also sourcing for reputableretailers to join our shopping centers as tenants, hence,creating more quality integrated concepts and bettertenant mix for the customers.

The Company will continue with its refurbishment andrenovation programme for its existing shoppingcenters, especially the older ones, to ensure that theyremain refreshing and new to our customers.

HUMAN RESOURCE In the year under review, the Company has placed strong emphasis on its human resource developmentprogramme. Besides intensifying and implementingcomprehensive training programmes for its staff, theCompany had also collaborated with the Open Universityof Malaysia (OUM) to provide full time employment-basedretailing courses to its staff. To date, 89 candidates hadgraduated from this scheme which offers courses at bothcertificate and diploma levels.

As the retail industry expands, shortage of skilledmanpower in this sector will prevent retailers fromoffering the highest standard of customer service tocustomers. Therefore, in line with the Company'sinitial mission in Malaysia to help modernise the retailindustry, the retail center will be expected to playbigger roles in the years to come, in providing skilledmanpower for the retail industry.

During the year under review, the Companyreactivated its Japan Management Training schemewhereby selected staff were sent for attachment withits associate retail companies in Japan as part of theCompany's efforts to ensure that its manpower willbenefit from the more advanced retailing technology inJapan. A total of six staff were selected in the yearunder review and sent for six-month training stints inJapan. The management will continue to develop this



training scheme so that more staff will be able to learn and gain invaluable retailing skills from theircounterparts in Japan.

As part of its long term programme to continuouslyimprove and upgrade its customer service levels, theCompany's cashier training programme with its motto of"Commitment Always to Service and Hospitability" orsimply ‘CASH’ will be continued in the forthcoming year.

To provide sufficient skilled manpower resources for itsfuture expansions, the Company will, in the forthcomingyear, also revamp its existing management traineescheme to meet the changing demands of the retailenvironment. Besides revising the staff welfare scheme,a new comprehensive training programme andrestructuring of the management trainee organisationstructure are under way to ensure the Company willcontinue to produce competent staff for its requirements.

In the face of competition from other retailers for skilledretail personnel, the Company has also restructured thesalary and welfare scheme for its staff to be in line withthe current trend in the retail industry and tocommensurate with the skill levels of the employees.

CORPORATE CITIZENSHIPTogether with its corporate objectives, the Companycontinued to carry out its social obligation as a goodcorporate citizen. In the year under review, theCompany promoted social activities and encouragedcharitable participations from its customers throughthe Company's activities such as the With All OurHearts Charity Fund Raising Campaign, Tree Plantingactivities and loose coins programme.

The Company under its WAOH programme, donatedRM260,000 to selected charitable organisations andunderprivileged individuals to provide them with theopportunities for better life. The presence of our localsinging talent, Cik Siti Nurhaliza as the Company'sWAOH ambassador further enhanced its cause. Duringthe official WAOH Charity Fund launching in Johor, afurther RM50,000 was also donated to five charity

organisations from Johor Bahru. The Company alsocarried out a charity sales of its Orang Utan soft toys,from which the proceeds of RM10,454 was donated toWorld Wide Fund for Nature Malaysia, as part of itssupport towards the conservation of forest for OrangUtans to live in. During the opening of its ninth storein Johor Bahru, as with the JUSCO tradition, theCompany together with the local community andstudents participated in planting tree saplingssurrounding the shopping center's premise. Besidesprotecting the environment, it is the Company'stradition that the local customers will be able to enjoya comfortable shopping environment, surrounded bytrees just like in other JUSCO stores.

FUTURE PROSPECTSDomestic consumer spending, a key driver that will sustainour economic growth in the coming years is expected toremain resilient. Retailers, on their part, faced challengesof competing not only to fulfill consumers' wants but alsoto fulfill what they desire. This competitive environment isexpected to be more intense in the coming years as theretail industry expands and continues to witness theproliferation of various retailing formats of supermarkets,departmental stores, supermarket-cum-departmentalstores, specialty shops, retail chains and hypermarkets.Though each retailing format will generally be differentfrom another through their merchandise, target markets,investments and layouts, they will compete for the sameconsumer Ringgit.

We will continue to differentiate ourselves from the other retailers especially the hypermarkets. The Company will continue to promote among itscustomers on its equally competitive pricing and at thesame time ensures the customers will get value buys,good customer services, facilities, good shoppingenvironment, merchandise range and availability.

On its expansions, the Company plans to speed up itsshopping center development and stay ahead of itscompetitors in sourcing for strategic locations. InJanuary 2003, the Company entered into an agreementto purchase a piece of strategic land in Kepong, Kuala



Lumpur, measuring approximately nine acres to build atwo-level shopping center with a two-level car park.Construction is currently in progress and the shoppingcenter is expected to be ready by the end of thefinancial year. This shopping center has a net lettablearea of about 350,000 square feet. Besides JUSCO asthe anchor tenant, the shopping center is expected tohave an approximate additional 60 tenants to cover amix of entertainment, beverages, food, accessories,fashion and services.

In line with its mid to long term expansion programme,the Company will continue to push forward, focusing

mainly on speeding up shopping center development,upgrading customer services, human resourcedevelopment, merchandise development and costefficient operations. Efforts will be made to develop astrong and skilled management team for its future needsand the Company aims to be at the forefront of new merchandise categories and related businessopportunities.



INFORMATION TECHNOLOGY

Information technology remains a very important part ofthe Company’s business management. The Company has,in the year under review, continued to improveinformation technology for its business processes.

During the year under review, the Company hassuccessfully implemented the following IT initiatives:

1. ARENA Prepaid Card SystemThe ARENA Prepaid Card system entails customers topurchase a prepaid card at the cashier counter and useit to make payments at any food counters. This systemwas implemented at our new ARENA Restaurant inJUSCO Taman Universiti and Bandar Utama.

2. Web-EDI and DC functionality expansion – ASNThe Advanced Shipment Notice (ASN) or SupplierDelivery information was implemented in DistributionCentre (DC) in May 2002. With this system, the receivingprocess at our DC is much faster and suppliers whoparticipate in our Web-EDI System can share deliveryinformation. The new enhanced Web-EDI features alsospeeds up the payment process, by enabling thesuppliers to request for payments via the web.

3. Web-Point Of Purchase (POP)Web-POP were introduced last year to ensure standardformat across all stores and to provides flexibility forstore operations to generate the POP.

4. Semi Auto Ordering SystemThe Semi Auto Ordering System was introduced to theFoodline Department in September 2002 to increasethe frequency and accuracy of ordering and betterinventory management.

5. Bar Coded Jusco Gift VouchersNew vouchers enhanced with bar coding features wereimplemented to provide risk management for ourvouchers. The POS system was also enhanced to verifyand to speed up voucher sales transactions.

In the coming year, the Company will be focusing onenhancing current backend systems, including acomprehensive inventory system by adopting moreadvanced tools and technologies available.



STATEMENT OF CORPORATE GOVERNANCE

BOARD RESPONSIBILITIES

The Malaysian Code on Corporate Governance is aimed atproviding guidelines for companies especially publiclisted companies to observe good corporate governance intheir business practices.

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

The Board of Directors assumes responsibilities in corporategovernance and has established various processes andcommittees to assist them in discharging theseresponsibilities. Among others, the Company’s strategiesand directions, shareholders and investors’ relationship,annual budget, major capital expenditure, significantfinancial matters, and the adequacy and integrity of internalcontrols including risk assessment are within theresponsibilities of the Board of Directors.

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

A. DIRECTORS

Board BalanceThe Board of Directors consists of ten (10) members;comprising one (1) Non-Executive Chairman, one (1) Non-Executive Vice Chairman, five (5) Non-Executive Directorsand three (3) Executive Directors, one (1) of whom hasretired on 16 December 2002 pursuant to Article 74 of theCompany’s Article of Association upon reaching themandatory retirement age. Of the five (5) Non-ExecutiveDirectors, three (3) are Independent Directors.

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

The Directors possess a wide range of expertise andexperience in various fields such as economics, publicservices, accounting, legal, human resource, banking,marketing, taxation, general management, retailingand property management services. All Board membersparticipate and deliberate on the issues and mattersaffecting the Company.

The profile of each Director is presented on page 18 topage 20 of this Annual Report.

Board Meetings

The Board met five (5) times at regular intervals during the financial year ended 28 February 2003. The details ofattendance of each Director at the Board meetings held during the financial year are set out below:-

Name of Director Number of meetings attended /heldduring the Director's term in office

Dato' Abdullah bin Mohd Yusof 5 / 5

Mr. Toshiji Tokiwa 3 / 5

Mr. Soichi Okazaki 5 / 5

Mr. Masato Yokoyama 5 / 5

Mr. Akihito Tanaka 3 / 5

Encik Ramli bin Ibrahim 5 / 5

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

Datuk Zawawi bin Mahmuddin 5 / 5

Mr. Chew Kong Seng 5 / 5

Encik Kamarudin bin Abu Hassan (retired on 16.12.2002) 3 / 4



Supply of Information

The Company Secretary ensures that all Board meetingsare furnished with proper agendas. Board papers andreports providing updates on financial, operational andcorporate developments including matters such as theCompany’s corporate citizenship programme and staffwelfare matters are circulated prior to the meetings to allDirectors for them to discharge their duties effectively.The Directors have full access to the advice and servicesof the Company Secretary. In addition, the Directors, ifnecessary, may also seek professional advice, at theCompany’s expense. The Directors may also consult theChairman and other Board members prior to seeking anyindependent professional advice.

Directors’ Training

All the Directors have attended the Directors’ MandatoryAccreditation Programme organised by the KLSE and arealso provided with updates from time to time on relevantnew laws and regulations affecting their directorship.

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

Board Committees

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

The Nomination Committee

The Nomination Committee has been set up with itsterms of reference approved on 11 January 2002. Mr.Akihito Tanaka has been appointed as the Chairman andits other members are Dato’ Abdullah bin Mohd Yusofand Encik Ramli bin Ibrahim, all of whom are Non-Executive Directors.

In line with the best corporate governance practicesrecommendation for a majority of the NominationCommittee members to be Independent, Encik Ramli binIbrahim, being a Non-Independent Non-ExecutiveDirector, resigned on 18 June 2002 and three (3) otherIndependent Non-Executive Directors were appointed tothe Nomination Committee on the same date. The newmembers are Brig. Jen. (B) Dato’ Mohd Idris bin Saman,Datuk Zawawi bin Mahmuddin and Mr. Chew Kong Seng.

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

On 18 June 2002, a Nomination Committee meetingwas held to set up a process to evaluate theperformance of the Directors. The Board, through theNomination Committee, on 23 April 2003 has reviewedthe annual assessment of the Directors’ performanceand contribution, and the required mix of skills andexperience of the Board to function competently andefficiently as a whole. The Board is pleased to statethat its current composition of members meets therequirement of a competent and effective Board.

Re-Election

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

The Audit Committee

The Board is also assisted by the Audit Committeewhose members, terms of reference and activities forthe year under review are stated on page 37 to 41 ofthe Annual Report.



B) DIRECTORS REMUNERATION

The Remuneration CommitteeThe Remuneration Committee is made up of Non-Executive Directors whose members are Mr. Akihito Tanaka(Chairman), Dato’ Abdullah bin Mohd Yusof and Encik Ramli bin Ibrahim. The duties of the Committee is to recommendto the Board the remuneration of all Directors in all its forms. Executive Directors play no part in decisions on their ownremuneration. The determination of remuneration packages of Non-Executive Directors, including the Non-ExecutiveChairman is a matter for the Board as a whole. Individual Director concerned does not participate in the discussion ontheir own remuneration.

The breakdown of the remuneration of the Directors during the financial year under review are as follows: -

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

Executive Non-ExecutiveDirectors Directors Total

RM RM RM

Fees 290,000 690,000 980,000Salaries 772,682 - 772,682Benefits-in-kind 24,172 14,700 38,872Retirement emoluments 237,000 - 237,000Other emoluments 153,506 - 153,506

1,477,360 704,700 2,182,060

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

Number of DirectorsRange of Remuneration Executive Non-Executive Total

Less than RM50,000 1 - 1RM50,001 to RM100,000 - 5 5RM100,001 to RM150,000 - - -RM150,001 to RM200,000 - 2 2RM200,001 to RM250,000 - - -RM250,001 to RM300,000 - - -RM300,001 to RM350,000 - - -RM350,001 to RM400,000 - - -RM400,001 to RM450,000 1 - 1RM450,001 to RM500,000 1 - 1RM500,001 to RM550,000 1 - 1

4 7 11



C) SHAREHOLDERS

Investors and Shareholders Communication

It has always been the Company’s practice to maintaingood relationship with its shareholders. Major corporatedevelopments and happenings in the Company havealways been duly and promptly announced to allshareholders, in line with KLSE’s objectives of ensuringtransparency and good corporate governance practice.

The Company’s financial performance, major corporatedevelopments and other relevant information arepromptly disseminated to shareholders and investorsvia announcements of its quarterly performance,annual report, corporate announcements to KLSE andpress conferences. Further update of the Company’sactivities and operations are also disseminated toshareholders and investors through dialogue withanalysts, fund managers, investors and the media.

Besides highlighting retail business promotionalactivities, the Company’s website (www.jusco.com.my)provides an update of the Company’s latestperformance released to KLSE as well as othercorporate information to the public.

During the Annual General Meeting, shareholders areusually given a presentation on the Company’sperformance and major activities that were carried out bythe Company for the year under review. During themeeting, shareholders have the opportunities to enquireand comment on the Company’s performance andoperations.

D) ACCOUNTABILITY AND AUDIT

Financial reporting

In its financial reporting via quarterly announcementsof results, annual financial statements and annualreport presentation including the Chairman’sStatement and Review of Operations, the Board of Directors always provides a comprehensiveassessment of the Company’s performance andprospects for the benefits of shareholders, investorsand interested parties. The Audit Committee alsoassists the Board in overseeing the Company’sfinancial reporting processes.



Directors’ responsibility statement in respect ofthe preparation of the audited financial statements

The Board of Directors is responsible for thepreparation of the financial statements for eachfinancial year of the Company which give a true andfair view of the state of affairs of the Company and its results and cash flow for the financial year ended.

The Board of Directors has ensured that the financialstatements have been prepared in accordance withapplicable approved accounting standards in Malaysia,the requirements of the Companies Act, 1965, KLSE andother regulatory bodies. In preparing the financialstatements, the Board of Directors has ascertained thataccounting policies and reasonable prudent judgmentand 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 thefinancial statements comply with the Companies Act,1965. The Directors have a general responsibility fortaking such steps as are reasonably open to them tosafeguard the assets of the Company, to prevent anddetect fraud and other irregularities.

Going Concern

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

State of Internal Control

The Statement of Internal Control set out on page 42of the Annual Report provides an overview of the stateof internal controls within the Company.

Relationship With The External Auditors

The Board of Directors with the assistance of the AuditCommittee maintains a formal and transparentrelationship with the Company’s External Auditors

through the Audit Committee, Board and formalmeetings whereby issues are discussed.

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

COMPLIANCE WITH MALAYSIAN CODE ONCORPORATE GOVERNANCE

The Board of Directors is pleased to state that theCompany was in compliance with all the principles andbest practices advocated in the Malaysian Code onCorporate Governance except on the disclosure ofeach individual Director’s remuneration.



TERMS OF REFERENCE OF AUDIT COMMITTEE

CONSTITUTION

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

COMPOSITION OF AUDIT COMMITTEE

The Committee shall be appointed by the Board fromamong its members and shall consist of not less than 3 members of whom a majority shall beIndependent Directors.

The Committee shall include at least one person who is amember of the Malaysian Institute of Accountants (MIA) or alternatively a person who must have at least 3 years’ working experience and have passed theexaminations specified in Part I of the First 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 amongst itsmembers who shall be an Independent Non-ExecutiveDirector. In the event that a member of the AuditCommittee resigns, dies or for any other reason ceases tobe a member, with the result that the number of membersis reduced to below three, the Board of Directors shall,within three months of that event, appoint such number ofnew members as may be required to make up theminimum number of three members.

The Board shall review the term of office of theCommittee no less than every three years.

MEETINGS

The Committee shall meet at least four times a year. Inaddition, the Chairperson shall convene a meeting of theCommittee if requested to do so by any member, themanagement or the internal or external auditors toconsider any matter within the scope and responsibilitiesof the Committee.

ATTENDANCE AT MEETINGS

The Financial Controller, the Head of Internal Audit,Company Secretary and a representative of the externalauditors shall normally attend meetings. However, theCommittee may invite any person to be in attendance toassist it in its deliberations.

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

AUDIT COMMITTEE DESIGNATION• Mr. Chew Kong Seng Chairman

(IndependentNon-Executive Director)

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

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



SECRETARY TO AUDIT COMMITTEE

The 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 anddocuments shall be circulated to the Committee membersone week prior to each meeting.

The secretary shall be responsible for recordingattendance of all members and invitees, keeping theminutes of the meeting of the Committee, circulatingthem to Committee members and to the other members ofthe Board of Directors and for ensuring compliance withKLSE requirements.

REPORTING PROCEDURES

The 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 annual report:

• Statement of the Company’s application of thePrinciples set out in Part I of the Malaysian Code onCorporate Governance.

• Statement on the extent of compliance with the BestPractices on Corporate Governance set out in Part II ofthe Malaysian Code on Corporate Governance,specifying reasons for any areas of non-compliance (ifany) and the alternatives adopted in 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 beensatisfactorily resolved resulting in a breach of the KLSEListing Requirements, the Committee shall promptlyreport such matter to the KLSE.

QUORUM

A quorum shall consist of a majority of Committee memberspresent at the meeting who are Independent Directors.

AUTHORITY

The Committee is authorised by the Board to:

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

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

requires for the purpose of discharging its functionsand responsibilities.

• Have direct communication channels with the externalauditors and person(s) carrying out the internal auditfunction or activity.

• Obtain outside legal or other independent professionaladvice and secure the attendance of outsiders withrelevant experience and expertise if it considers thisnecessary.

• Convene meetings with the external auditors,excluding the attendance of the management,whenever deemed necessary.

DUTIES AND RESPONSIBILITIES

The duties and responsibilities of the Committee shall be:

• To review the Terms of Reference at least annually, asconditions dictate.

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

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

requirements.



• To review with the external auditors their audit plan,scope and nature of audit for the Company.

• The external auditors’ audit report, areas of concernarising from the audit and any other matters theexternal auditors may wish to discuss (in the absenceof management if necessary).

• To assess the adequacy and effectiveness of thesystems of internal control and accounting controlprocedures of the Company by reviewing the externaland/or internal auditors’ management letters andmanagement responses.

• To discuss problems and reservations arising from theinterim and final audits and any matters the auditorsmay wish to discuss.

• To review the internal audit plan and processes,consider the major findings of internal audit, fraudinvestigations and actions and steps taken bymanagement 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 conflict ofinterest situations that may arise within the Company.

• To consider the appointment of the external auditors,the terms of reference of their appointment and anyquestion of resignation and dismissal before makingrecommendations to the Board.

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

• To report to the Board its activities, significant resultsand findings.

OVERSEEING THE INTERNAL AUDIT FUNCTION

The Committee shall oversee 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. Allproposals by management regarding the appointment,transfer or dismissal of the Internal Auditor shall requirethe prior approval of the Committee.



The Audit Committee comprises the followingmembers:

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

During the financial year under review, there were nochanges to the terms of reference of the AuditCommittee.

MEETINGS

During the financial year under review, the AuditCommittee convened four (4) meetings. Theattendance records of each member of the AuditCommittee are as follows:

The meetings were structured through the use ofagendas, which were distributed to members withsufficient notification.

The Company Secretary was present in all the meetings.Representative of the External Auditors, the General

Manager of Finance, the Head of Internal Audit, theFinance Manager and the Compliance Officer normallyattended the meetings and related managementpersonnel attended the meetings upon invitation.

4/4

4/4

4/4

1/1

THE AUDIT COMMITTEE

• Mr. Chew Kong Seng Independent(Chairman) Non-Executive Director

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

• Brig. Jen. (B) IndependentDato’ Mohd Idris Non-Executive Directorbin Saman

Name of Directors Number of meetings attended/heldduring the member’s term in office

Mr. Chew Kong Seng (Chairman)

Encik Ramli bin Ibrahim

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

Mr. Soichi Okazaki (resigned on 24.4.2002)



SUMMARY OF THE AUDIT COMMITTEE ACTIVITIESDURING THE YEAR UNDER REVIEW

During the year under review, the Audit Committeecarried out its duties in accordance with its terms ofreference as follows:

1. Reviewed the quarterly unaudited financial results andannual audited financial statements before submissionto the Board for consideration and approval.

2. Reviewed the external auditors’ scope of work andaudit plan for the year.

3. Reviewed and discussed the external auditors’ auditreport and areas of concern.

4. Considered the appointment of the external auditorsand the terms of reference of their appointment.

5. Reviewed the internal audit plan, considered the majorfindings of internal audit, fraud investigations andactions taken by management in response to the auditfindings.

6. Assessed the adequacy and effectiveness of thesystems of internal control and accounting controlprocedures of the Company by reviewing the externaland internal auditors’ management letters andmanagement responses.

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

8. Reviewed related party transactions.

9. Reported to the Board on its activities significantfindings and results of audit recommendations.

On 23 April 2003, 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 othermatters, which the external auditors wished to raise.

SUMMARY OF THE INTERNAL AUDIT DEPARTMENT’SACTIVITIES

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

1. Presented and obtained approval from the AuditCommittee, the 2002/2003 audit plan whichsupplemented the approved 3-year internal audit plan,audit strategy and audit scope of work.

2. Reviewed and analysed certain key businessprocesses identified in the annual audit plan, reportedineffective and inadequate controls, and maderecommendations to improve their effectiveness.

3. Monitored and ensured management implementedcorrective action plans.

4. Monitored compliance with policies and procedures.

5. Reviewed the adequacy and effectiveness of theinternal control structures of the Company.

6. Assisted the Board of Directors and Management oncompliance matters stated in the Malaysian Code onCorporate Governance.

7. Assisted the Board of Directors and Management byreviewing the risk policy, control strategies in theorganisation and implementation of an enterprise riskmanagement framework.

8. Carried out investigative assignments.

9. Continued inculcating good risk management practicesthroughout the Company.



BOARD’S RESPONSIBILITIES

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

The Board has an established on-going process foridentifying, evaluating and managing the significant risksencountered by the Company. The Board through its AuditCommittee 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 achieve theCompany’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 mix oftechniques is used to obtain the level of assurancerequired by the Board. The Audit Committee presents itsfindings to the Board.

INTERNAL AUDIT FUNCTION

The 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 Departmentindependently reviews the risk identification proceduresand control processes implemented by the managementand reports to the Audit Committee on quarterly basis.

The Internal Audit Department also carried out internalcontrol review on key activities of the Company’sbusiness 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 and planbased on the risk profiles of the major business units ofthe Company.

The Audit Committee, through the assistance of theInternal Audit Department is finalising the enterpriserisk management framework to monitor and addressbusiness risks and controls identified from the riskassessment workshops that were conducted during theyear under review. The risk assessment workshops haveprovided a higher level of awareness among all

STATEMENT OF INTERNAL CONTROL



employees on risk identification, evaluation, control andon-going monitoring of their business processes.

SYSTEM OF INTERNAL CONTROLS

The Board of Directors is responsible for managing thekey business risks of the Company and implementingappropriate internal control system to manage thoserisks. The Board reviewed the adequacy and integrity ofthe system of internal controls 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 ofauthority, for all aspect of the Company’s affairs. Seniormanagement and business units’ managers submit andpresent their operational performance review as wellas business plans and strategic measures in ExecutiveCommittee and Business meetings;

• The Board approves the annual budget. The Board andthe Audit Committee also review key businessvariables and monitor the achievements of theCompany’s performance on quarterly basis;

• The financial authorisation limits and approvalsthreshold of the Company encompasses internalcontrol procedures. These procedures are subject toregular reviews by the management to incorporatechanging business risks, organisational structureand for operational efficiency;

• The Audit Committee is responsible for reviewingquarterly announcement to KLSE and statutoryannual financial statements prior to submission forBoard’s approval.

• The Internal Audit Department periodically monitors andevaluates the effectiveness and proper functioning ofthe internal control system to ascertain compliance withthe control procedures and policies of the Company. TheInternal Auditor reports to Audit Committee on thestatus of internal control on quarterly basis;

• Project teams are set up from time to time to addressbusiness and operational issues to meet the businessobjectives and operational requirements of the Company;

All the above mentioned processes has been in placeand provide reasonable assurance to the effectivenessof the internal control system.

CONCLUSION

The Board of Directors reviewed the adequacy and integrityof the system of internal controls that provide reasonableassurance to the Company in achieving the businessobjectives. As the development of an efficient system ofinternal controls is an ongoing process, the Board and themanagement maintains an ongoing commitment andcontinue to take appropriate measures to strengthen theinternal control environment of the Company.



OTHER INFORMATION

MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

Material contracts entered into by the Company whichinvolve and major shareholders' interests and stillsubsisting at the end of the financial year ended 28February 2003 or entered into since the end of theprevious 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 AEON Co.Ltd. to use their trademark in relation to goods andservices. The Company is also granted the non-exclusive right to use the information and know-how,employed or developed by AEON Co. Ltd. for the management and operation of retail stores,wholesale business and related supporting activities.The total cash consideration payable by the Companyto AEON Co. Ltd. for the year under review amountedto RM7.326 million. AEON Co. Ltd. is a majorshareholder of the Company.

b. On 1 July 1997, the Company entered into a FactoringAgreement with a related company, AEON CreditService (M) Sdn. Bhd. (formerly known as ACS CreditService (M) Sdn. Bhd.) whereby the Company's goodssold on credit under its easy payment scheme arefactored to AEON Credit Service (M) Sdn. Bhd. Thedebts sold to AEON Credit Service (M) Sdn. Bhd. areat full value of the goods and upon the terms andconditions as stated in the factoring agreement. Thetotal value of the debts sold to AEON Credit Service(M) Sdn. Bhd. in the year under review amounted toRM3.886 million. Dato' Abdullah bin Mohd Yusof andEncik Ramli bin Ibrahim, both Directors of Jaya JuscoStores Bhd, are also Directors and major shareholdersin AEON 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 FEES

The amount of non-statutory audit fees paid to externalauditor and its affiliates during the year under review isRM359,093, comprising of mainly remuneration surveyscheme services, tax services and half year audit services.

REVALUATION POLICY ON LANDED PROPERTIES

There is no revaluation policy on the Company's landedproperties. The Company adopted the transitionalprovisions issued by Malaysian Accounting StandardsBoard (MASB) to retain the carrying amount on the basisof their previous revaluation as stated in page 59 of thisAnnual Report.


FINANCIAL STATEMENTSFor The Year Ended 28 February 2003

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

JAYA JUSCO STORES BHD (126926-H)(Incorporated in Malaysia)

Jusco AR 2003-FINANCIAL4.qxd 20/05/03 3:04yip Page 45

46

DIRECTORS’ REPORT


FOR THE YEAR ENDED 28 FEBRUARY 2003

The Directors have pleasure in submitting their report and the audited financial statements of the Company for theyear ended 28 February 2003.

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 has beenno significant change in the nature of these activities during the financial year.

RESULTS

RMNet profit for the year 60,343,916

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 tax totallingRM12,636,000 in respect of the year ended 28 February 2002 on 23 July 2002.

The first and final dividend recommended by the Directors in respect of the year ended 28 February 2003 is 20%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 Akihito TanakaRamli bin IbrahimBrig. Jen. (B) Dato’ Mohd Idris bin Saman Datuk Zawawi bin Mahmuddin Chew Kong Seng @ Chew Kong Huat Kamarudin bin Abu Hassan (retired on 16.12.2002)



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

Number of ordinary shares of RM1 eachAt At

1.3.2002 Acquired Sold 28.2.2003

Shareholdings in which Directorshave direct interest

Dato’ Abdullah bin Mohd Yusof 489,000 - (335,000) 154,000Soichi Okazaki 10,000 5,000 - 15,000Masato Yokoyama 15,000 - - 15,000Akihito Tanaka 150,000 - - 150,000

Shareholdings in which Directorshave indirect interest

Dato’ Abdullah bin Mohd Yusof 11,186,500 - (765,000) 10,421,500Ramli bin Ibrahim 150,000 - - 150,000

None of the other Directors holding office at 28 February 2003 had any interest in the ordinary shares of theCompany during the financial year.

In accordance with Article 74 of the Company’s Articles of Association, all Directors shall retire from the Board atthe forthcoming Annual General Meeting and are eligible for re-election.

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 Company or arelated corporation with the Director or with a firm of which the Director is a member, or with a company in whichthe Director has a substantial financial interest, except for certain Directors who may be deemed to derive abenefit by virtue of those transactions, advisory services and tenancy between the Company and corporations inwhich the Directors are deemed to have interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directorsof the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or anyother 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.

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

During the financial year, the Company entered into a Sale and Purchase Agreement with Magna Park Sdn. Bhd.and Datuk Bandar Kuala Lumpur in respect of the acquisition of a piece of vacant land which is located in Kepong,Kuala Lumpur, measuring an area of approximately nine (9) acres for a total cash consideration of RM36,069,704for 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 to ascertainthat:

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, or the amount of the provision for doubtful debtsin 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 become enforceablewithin the period of twelve months after the end of the financial year which, in the opinion of the Directors, willor may substantially affect the ability of the Company to meet its obligations as and when they fall due.

In the opinion of the Directors, the results of the operations of the Company for the financial year ended28 February 2003 have not been substantially affected by any item, transaction or event of a material and unusualnature nor has any such item, transaction or event occurred in the interval between the end of that financial yearand the date of this report.

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: 23 April 2003



BALANCE SHEET

The financial statements were approved and authorised for issue by the Board of Directors on 23 April 2003.

AT 28 FEBRUARY 2003

The notes set out on pages 54 to 70 form an integral part of, and should be read in conjunction with, these financialstatements.

Note 2003 2002RM RM

Property, plant and equipment 2 561,220,942 508,629,714Investments 3 175,209 175,209Current assets

Inventories 4 114,733,092 93,023,963Trade and other receivables 5 23,678,951 25,090,790Cash and cash equivalents 6 87,076,639 70,426,584

225,488,682 188,541,337

Current liabilitiesTrade and other payables 7 299,328,875 262,213,917Borrowings (unsecured) 8 - 970,490Taxation 5,657,209 195,020

304,986,084 263,379,427

Net current liabilities (79,497,402) (74,838,090)

481,898,749 433,966,833

Financed by:Capital and reserves

Share capital 9 87,750,000 87,750,000Reserves 10 387,314,749 339,606,833

Shareholders’ funds 475,064,749 427,356,833

Long term and deferred liabilitiesDeferred taxation 11 6,834,000 6,610,000

481,898,749 433,966,833




INCOME STATEMENT


Note 2003 2002RM RM

Revenue 1,368,268,495 1,200,636,091Other operating income 1,232,377 696,636Changes in inventories 21,709,129 10,379,705Net purchases (1,022,713,496) (887,201,217)Staff costs (93,835,652) (80,177,546)Depreciation (37,988,453) (33,135,993)Operating expenses (146,425,139) (129,295,773)

Operating profit 12 90,247,261 81,901,903Interest expense 13 (142,924) (2,391,976)Interest income 728,699 816,659

Profit before tax 90,833,036 80,326,586Tax expense 14 (30,489,120) (26,337,919)

Net profit for the year 60,343,916 53,988,667

Basic earnings per ordinary share (sen) 15 68.8 61.5

Dividends per ordinary share – gross (sen) 16 20.0 20.0




STATEMENT OF CHANGES IN EQUITY


Non-distributable Distributable

Share Share Revaluation Retainedcapital premium reserve profits Total

RM RM RM RM RM

At 1 March 2001 87,750,000 108,996,474 55,351,892 134,414,234 386,512,600Rights issue exercise expenses - (508,434) - - (508,434)Net profit for the year - - - 53,988,667 53,988,667 Dividends-2001 final - - - (12,636,000) (12,636,000)

At 28 February 2002/ 1 March 2002 87,750,000 108,488,040 55,351,892 175,766,901 427,356,833Net profit for the year - - - 60,343,916 60,343,916Dividends-2002 final - - - (12,636,000) (12,636,000)

At 28 February 2003 87,750,000 108,488,040 55,351,892 223,474,817 475,064,749

Note 9 Note 10 Note 10 Note 10




CASH FLOW STATEMENT

2003 2002RM RM

Cash flows from operating activitiesProfit before taxation 90,833,036 80,326,586Adjustments for:

Depreciation 37,988,453 33,135,993Gain on disposal of property, plant and equipment (313,093) (18,229)Interest expense 142,924 2,391,976Interest income (728,699) (816,659)Property, plant and equipment written off 422,501 552,157

Operating profit before working capital changes 128,345,122 115,571,824Changes in working capital:

Inventories (21,709,129) (10,379,705)Trade and other receivables 1,411,839 8,931,246Trade and other payables 37,439,759 26,768,790

Cash generated from operations 145,487,591 140,892,155Income taxes paid (24,802,931) (36,165,511)

Net cash generated from operating activities 120,684,660 104,726,644

Cash flows from investing activitiesPurchase of property, plant and equipment (91,306,135) (24,601,410)Proceeds from disposal of property, plant and equipment 617,046 119,770Interest received 728,699 816,659

Net cash used in investing activities (89,960,390) (23,664,981)

Cash flows from financing activitiesDividend paid to shareholders of the Company (12,636,000) (12,636,000)Interest paid (467,725) (3,780,648)Repayment of term loans - (90,259,830)Proceeds from rights issue net of rights issue expenses - (508,434)

Net cash used in financing activities (13,103,725) (107,184,912)

Net increase/(decrease) in cash and cash equivalents 17,620,545 (26,123,249)Cash and cash equivalents at beginning of year 69,456,094 95,579,343

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

Cash and cash equivalents comprise:Cash and bank balances 68,936,639 18,626,584Deposits with licensed financial institutions 18,140,000 51,800,000Bank overdrafts - (970,490)

87,076,639 69,456,094




NOTES TO THE FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(i) MASB 20, Provisions, Contingent Liabilities and Contingent Assets, which is adopted retrospectively. The adoption does not have any impact on the financial statements;

(ii) MASB 23, Impairment of Assets, which is adopted prospectively. The adoption does not have any impacton the financial statements; and

(iii) MASB 22, Segment Reporting and MASB 24, Financial Instruments: Disclosure and Presentation, whichare adopted prospectively. The adoption resulted in a new disclosure format and changes incomparatives (where applicable) as set out in Notes 17 and 21 to the financial statements respectively.

(a) Basis of accounting

The financial statements of the Company are prepared in compliance with applicable approvedaccounting standards in Malaysia.

(b) Affiliated company

An affiliated company is a company that holds a long term equity interest of 20% to 50% in the Company.

(c) Property, plant and equipment

Property, plant and equipment except for freehold land and construction work-in-progress are stated atcost/valuation less accumulated depreciation.

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

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

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 the shorterof 50 years or the lease period. The straight-line method is used to write off the cost of the other assetsover the term of their estimated useful lives at the following principal annual rates:Buildings 2% - 5%Structures 10%Office equipment 10%Machinery and equipment 10% - 20%Furniture, fixtures and fittings 20%Motor vehicles 20%IT equipment 20%



During the financial year, the depreciation rate of structures has been revised from 5% to 10% per annumto reflect the change in expected pattern of economic benefits from the asset. The change in depreciationrate is accounted for as a change in accounting estimate and resulted in an additional depreciationcharge of approximately RM1.2 million in the income statement for the financial year ended28 February 2003.

(d) Investments

Long term investments are stated at cost. An allowance is made when the Directors are of the view thatthere is a diminution in their value which is other than temporary.

(e) Trade and other receivables

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

(f) Liabilities

Borrowings and trade and other payables are stated at cost.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value with weighted average cost being themain basis for cost. Cost comprises the weighted average cost of merchandise derived at by using theRetail Inventory Method. Weighted average cost includes related charges incurred in purchasing suchmerchandise.

(h) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances with banks and highly liquid investmentswhich have an insignificant risk of changes in value. For the purpose of the cash flow statement, cashand cash equivalents are presented net of bank overdrafts.

(i) Impairment

The carrying amount of the Company’s assets, other than inventories (refer Note 1(g)), are reviewed ateach balance 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. Any subsequentincrease in recoverable amount is 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-tax discountrate that reflects current market assessments of the time value of money and the risks specific to theasset. For an asset that does not generate largely independent cash inflows, the recoverable amount isdetermined 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 not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss has been recognised. The reversal is recognised in the income statement.

(j) Taxation

The tax expense in the income statement represents taxation at current tax rates based on profit earnedduring the year.

Deferred taxation is provided on the liability method for all timing differences except where no liabilityis expected to arise in the foreseeable future and there are no indications the timing differences willreverse thereafter. Deferred tax benefits are only recognised where there is a reasonable expectation ofrealisation in the near future.

(k) Foreign currency transactions

Transactions 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:

2003 2002RM RM

USD 1 3.80 3.80Japanese Yen 100 3.20 2.90

(l) Revenue

i) Goods sold and services rendered

Revenue 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, servicecharge, sales commission and distribution center charges earned are recognised on an accrual basis.

ii) Interest income

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



(m) Expenses

i) Operating lease payments

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

ii) Financing costs

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



2. PROPERTY, PLANT AND EQUIPMENT

Balance at (Disposal/ Transfer Balance at1.3.2002 Addition write off) in/(out) 28.2.2003

RM RM RM RM RM

Cost/ValuationFreehold land at cost 20,870,642 12,504,281 - 1,321,215 34,696,138Leasehold land at valuation 60,761,004 - - - 60,761,004Buildings at valuation 126,003,413 - - - 126,003,413Leasehold land at cost 18,891,139 - - - 18,891,139Buildings at cost 175,803,927 14,781,256 - 1,508,002 192,093,185Structures 50,766,028 11,253,386 (42,587) 454,315 62,431,142Office equipment 4,886,791 505,715 (57,421) 1,444 5,336,529Machinery and equipment 88,242,250 29,671,141 (1,849,556) 1,815,484 117,879,319Furniture, fixtures and fittings 96,766,748 15,363,720 (5,888,111) 326,272 106,568,629Motor vehicles 4,051,258 820,402 (1,299,509) - 3,572,151IT equipment 517,288 595 - - 517,883Construction work-in-progress 5,461,827 6,405,639 - (5,426,732) 6,440,734

653,022,315 91,306,135 (9,137,184) - 735,191,266

Balance at Charge for (Disposal/ Transfer Balance at1.3.2002 the year write off) in/(out) 28.2.2003

RM RM RM RM RM

Accumulated depreciationLeasehold land at valuation 4,885,823 470,986 - - 5,356,809Buildings at valuation 20,428,158 1,463,008 - - 21,891,166Leasehold land at cost 1,224,339 333,500 - - 1,557,839Buildings at cost 24,151,334 5,487,911 - - 29,639,245Structures 5,895,021 5,530,841 (7,321) - 11,418,541Office equipment 2,605,191 427,909 (23,340) - 3,009,760Machinery and equipment 25,330,795 9,887,769 (1,434,033) - 33,784,531Furniture, fixtures and fittings 56,658,202 13,905,352 (5,647,564) - 64,915,990Motor vehicles 2,832,769 417,266 (1,298,472) - 1,951,563IT equipment 380,969 63,911 - - 444,880

144,392,601 37,988,453 (8,410,730) - 173,970,324



Net book value Depreciation2003 2002 2002RM RM RM

Freehold land at cost 34,696,138 20,870,642 - Leasehold land at valuation 55,404,195 55,875,181 613,685Buildings at valuation 104,112,247 105,575,255 2,520,068Leasehold land at cost 17,333,300 17,666,800 190,800Buildings at cost 162,453,940 151,652,593 4,240,946Structures 51,012,601 44,871,007 2,426,654Office equipment 2,326,769 2,281,600 430,549Machinery and equipment 84,094,788 62,911,455 8,525,989Furniture, fixtures and fittings 41,652,639 40,108,546 13,466,794Motor vehicles 1,620,588 1,218,489 622,961IT equipment 73,003 136,319 97,547Construction work-in-progress 6,440,734 5,461,827 -

561,220,942 508,629,714 33,135,993

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

The leasehold land and buildings are stated at Directors’ valuation based on professional valuation carried outby 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", thevaluation of these assets have not been updated, and they continue to be stated at their existing carryingamounts less accumulated depreciation.

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

2003 2002RM RM

Long term leasehold land 9,818,959 9,935,677Buildings 65,625,892 67,321,816

75,444,851 77,257,493



3. INVESTMENTS

2003 2002RM RM

Long termUnquoted shares, at cost

Golf membership 45,209 45,209Equity investment 130,000 130,000

175,209 175,209

4. INVENTORIES

2003 2002RM RM

At cost:Retail merchandise 80,431,999 65,244,834Food and others 34,301,093 27,779,129

114,733,092 93,023,963

5. TRADE AND OTHER RECEIVABLES

2003 2002RM RM

Trade receivables 8,521,314 9,464,233Less: Allowance for doubtful debts (1,117,038) (745,200)

7,404,276 8,719,033

Other receivables and prepayments 4,146,162 4,534,023Rental and utility deposits 12,128,513 11,837,734

23,678,951 25,090,790

Included in trade receivables is an amount of RM764,050 (2002 - RM703,909) due from companies withcommon Directors.

Included in other receivables and prepayments is an amount of RM57,235 (2002 - RM61,890) due fromcompanies with common Directors.

Trade receivables amounted to RM2,500 had been written off against the allowance for doubtful debts in theprevious year.



6. CASH AND CASH EQUIVALENTS

2003 2002RM RM

Cash and bank balances 68,936,639 18,626,584Deposits with licensed financial institutions 18,140,000 51,800,000

87,076,639 70,426,584

7. TRADE AND OTHER PAYABLES

2003 2002RM RM

Trade payables 203,539,047 190,383,829Other payables and accrued expenses 62,557,078 43,460,894Rental and utility deposits 32,674,355 28,181,002Affiliated company 558,395 188,192

299,328,875 262,213,917

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 is an amount of RM8,934 (2002 – RM8,934) due to a companywith common Director.

8. BORROWINGS (UNSECURED)

2003 2002RM RM

Bank overdrafts - 970,490

Terms and debt repayment schedule

The bank overdrafts of the Company are subject to interest at 0.5% to 0.625% (2002 - 0.5% to 0.625%) above the lender’s base lending rates.

9. SHARE CAPITAL

2003 2002RM RM

Authorised Ordinary Shares of RM1.00 each 100,000,000 100,000,000

Issued and fully paid Ordinary Shares of RM1.00 each 87,750,000 87,750,000



10. RESERVES

2003 2002RM RM

Non-distributableShare premium 108,488,040 108,488,040Revaluation reserve 55,351,892 55,351,892

163,839,932 163,839,932

DistributableRetained profits 223,474,817 175,766,901

387,314,749 339,606,833

The deferred tax in respect of the revaluation of leasehold land and building of approximately RM2.8 million(2002 - RM2.8 million) has not been provided for as the leasehold land and building is held for long term use.

Subject to agreement of the Inland Revenue Board, the Company has sufficient Section 108 tax credit and taxexempt income to frank all of its retained profits at 28 February 2003 if paid out as dividends.

11. DEFERRED TAXATION

2003 2002RM RM

Opening balance 6,610,000 6,610,000Transfer from income statement 224,000 -

Closing balance 6,834,000 6,610,000



12. OPERATING PROFIT

2003 2002RM RM

Operating profit is arrived at after crediting:Gain on disposal of property, plant and equipment 313,093 18,229Rental income on shopping center operation 91,829,166 81,810,311

and after chargingAllowance for doubtful debts 371,838 300,000Auditors’ remuneration 110,000 100,000Bad debts written off 60,380 -Depreciation 37,988,453 33,135,993Directors’ emoluments

- remuneration 926,188 781,565- fees 980,000 1,135,000- retirement emoluments 237,000 -

Property, plant and equipment written off 422,501 552,157Realised loss on foreign exchange - 74,799Rental expense

- land 1,022,082 1,022,082- buildings 29,582,299 27,470,226- motor vehicles 591,226 3,182,592- equipment 101,680 527,700- fixtures and fittings 382,020 332,552- hostel 921,960 921,309

Royalty payable to affiliated company 7,325,945 9,295,260

i) The estimated monetary value of other benefits not included in salaries and other emoluments receivedby the Directors of the Company is RM38,872 (2002 - RM31,091).

ii) The number of employees of the Company (including Directors) at the end of the financial year was5,420 (2002 - 4,576).

13. INTEREST EXPENSE

2003 2002RM RM

Bank overdrafts 12,140 9,907Other borrowings 130,784 2,382,069

142,924 2,391,976



14. TAX EXPENSE

2003 2002RM RM

Current tax expense 30,265,120 26,337,919Deferred taxation (Note 11) 224,000 26,337,91-

30,489,120 26,337,919

The Company’s effective tax rate for the current and prior year is higher than the prima facie tax rate as certainexpenses are not deductible for tax purposes.

15. EARNINGS PER ORDINARY SHARE

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

2003 2002

Net profit attributable to ordinary shareholders 60,343,916 53,988,667

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

16. DIVIDENDS

2003 2002RM RM

Proposed first and final dividend of 20% less 28% tax (2002 - 20% less 28% tax) 12,636,000 12,636,000

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

(RM) (RM)



17. SEGMENTAL REPORTING

Segment information is presented in respect of the Company’s business segment. The primary format, businesssegments, is based on the Company’s management and internal reporting structure. There is no segmentalanalysis 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 thatcan be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets andrevenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that areexpected to be used for more than one period.

Business segmentsThe Company comprises the following main business segments:

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

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

The business segment analysis is as follows:

PropertyRetailing management services Total

2003 2002 2003 2002 2003 2002RM RM RM RM RM RM

Business segmentsRevenue from external

customers 1,262,850,808 1,107,158,157 105,417,687 93,477,934 1,368,268,495 1,200,636,091

Total revenue 1,262,850,808 1,107,158,157 105,417,687 93,477,934 1,368,268,495 1,200,636,091

Operating profit 60,574,453 51,624,703 29,672,808 30,277,200 90,247,261 81,901,903Interest expense (142,924) (2,391,976)Interest income 728,699 816,659

Profit before tax 90,833,036 80,326,586Tax expense (30,489,120) (26,337,919)

Net profit for the year 60,343,916 53,988,667

Segment assets 347,442,741 296,418,699 439,442,092 400,927,561 786,884,833 697,346,260

Segment liabilities (263,775,745) (230,769,132) (48,044,339) (39,220,295) (311,820,084) (269,989,427)

Capital expenditure 45,690,104 14,634,649 45,616,031 9,966,761 91,306,135 24,601,410Depreciation 24,592,503 21,309,027 13,395,950 11,826,966 37,988,453 33,135,993Non-cash expenses other

than depreciation 418,488 543,637 4,013 8,520 422,501 552,157



18. OPERATING LEASES

Leases as Lessee

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

2003 2002RM RM

Less than one year 24,132,560 24,132,560Between one and five years 111,296,046 105,458,256More than five years 201,653,914 231,624,266

337,082,520 361,215,082

The Company leases a number of land and buildings under operating leases. The leases typically run for aninitial period of 15 to 25 years, with an option to renew the leases for another 15 years.

Other than the above, the Company also leases two levels of store space in a shopping mall under operatinglease. The lease is for an initial period of twelve years, with an option to renew the lease for another twelveyears. The Company also has the option to terminate the lease after the third year in the event certainconditions stipulated in the lease agreement are not fulfilled. The rental is based on the gross monthly sales.

19. COMMITMENTS

2003 2002RM RM

Capital commitments: Property, plant and equipment

Authorised and contracted for 38,071,927 44,581,030Authorised but not contracted for 87,940,085 31,437,010

126,012,012 76,018,040



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 thosedisclosed elsewhere in the financial statements are as follows:

2003 2002Balances RM RM

With companies in which Dato’ Abdullah binMohd Yusof, a Director, has interest:

Abdullah & ZainudinAmount due to in respect of legal fees payable 8,934 8,934

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

fee receivable 4,656 8,638Amount due from in respect of

reimbursement of operational payments 42,166 42,048

AEON Credit Service (M) Sdn. Bhd.Amount due from in respect of sales through

easy payment scheme financing 764,050 703,909Amount due from in respect of


With companies in which Ramli bin Ibrahim,a Director, has interest:




AEON Credit Service (M) Sdn. Bhd.Amount due from in respect of sales through

easy payment scheme financing 764,050 703,909Amount due from in respect of


With companies in which Kamarudin bin Abu Hassanwho was a Director, had interest:






2003 2002Transactions RM RM

With companies in which Dato’ Abdullah bin Mohd Yusof, a Director, has interest:

Abdullah & ZainudinLegal fees payable 2,500 12,813

Laura Ashley (Malaysia) Sdn. Bhd.Management fee receivable 99,201 127,500Rental income receivable 370,650 353,000

AEON Credit Service (M) Sdn. Bhd.Sales through easy payment scheme financing 3,886,378 5,108,359

With companies in which Ramli bin Ibrahim,a Director, has interest:


AEON Credit Service (M) Sdn. Bhd.Sales through easy payment scheme financing 3,886,378 5,108,359

With companies in which Kamarudin bin Abu Hassanwho was a Director, had interest:


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

Other related party transactions

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

2003 2002Transactions RM RM

Affiliated companyRoyalty expenses 7,325,945 9,295,260

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



21. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

Exposure to credit risk, interest rate risk and foreign currency risk arises in the normal course of the Company’sbusiness. The Company’s policies for managing each of these risks are summarised below.

Credit risk

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

Interest rate risk

The Company has no interest bearing financial liabilities at balance sheet date. Interest earnings financialassets 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 levelof cash and cash equivalents to finance the working capital requirements and mitigate the effects offluctuation 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 theCompany to finance its working capital requirements and the prevailing low interest rate scenario, the interestrate risk exposure is minimal and 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 balancesare substantially denominated in Ringgit Malaysia.

Effective interest rates and repricing analysis

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

Effectiveinterest Total Within

rate 1 year% RM RM

2003Financial assetsDeposits with licensed financial institutions 2.73 18,140,000 18,140,000

2002Financial assetsDeposits with licensed financial institutions 2.69 51,800,000 51,800,000



Fair values

Recognised financial instrumentsIn respect of cash and cash equivalents, trade and other receivables and trade and other payables, the carryingamounts 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:

2003 2002

Carrying Fair Carrying Fairamount value amount value

RM RM RM RM

Financial assetsLong-term investments for which it is:

Practical to estimate fair value 45,209 35,000 45,209 38,000Not 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 ordinaryshares of an unquoted company. That investment is carried at its original cost of RM130,000(2002 – RM130,000) in the balance sheet. At year end, the net tangible assets reported by the unquotedcompany were RM13,368,000 (2002 – RM10,646,000).

22. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

During the financial year, the Company entered into a Sale and Purchase Agreement with Magna Park Sdn.Bhd. and Datuk Bandar Kuala Lumpur in respect of the acquisition of a piece of vacant land which is locatedin Kepong, Kuala Lumpur, measuring an area of approximately nine (9) acres for a total cash consideration ofRM36,069,704 for the purpose of constructing a new shopping center.


71

STATEMENT BY DIRECTORS


PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

In the opinion of the Directors, the financial statements set out on pages 50 to 70, are drawn up in accordance withapplicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs ofthe Company at 28 February 2003 and of the results and cash flows of the Company for the year ended on that date.

Signed in accordance with a resolution of the Directors:

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





STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Soichi Okazaki, the Director primarily responsible for the financial management of Jaya Jusco Stores Bhd, dosolemnly and sincerely declare that the financial statements set out on pages 50 to 70, are, to the best of myknowledge 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 23 April 2003.


Before me:



REPORT OF THE AUDITORS

We have audited the financial statements set out on pages 50 to 70. The preparation of the financial statementsis the responsibility of the Company’s Directors. Our responsibility is to express an opinion on the financialstatements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards requirethat we plan and perform the audit to obtain all the information and explanations which we consider necessary toprovide us with evidence to give reasonable assurance that the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures inthe financial statements. An audit also includes an assessment of the accounting principles used and significantestimates made by the Directors as well as evaluating the overall adequacy of the presentation of information inthe 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, 1965and applicable approved accounting standards in Malaysia so as to give a true and fair view of:

i) the state of affairs of the Company at 28 February 2003 and its results and cash flows for the year endedon that date; and

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

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

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

Dato’ Mohammad Aidid bin Mohd ShariffPartnerApproval Number: 930/06/04(J/PH)


TO THE MEMBERS OF JAYA JUSCO STORES BHD



ANALYSIS OF SHAREHOLDINGSANALYSIS OF SHAREHOLDINGS AS AT 28 APRIL 2003

629

398,163

1,856,708

4,484,500

27,173,500

53,836,500

87,750,000

0.0007

0.4537

2.1159

5.1105

30.9670

61.3521

100.0000

4.9842

32.1994

47.9430

10.4430

4.1930

0.2373

100.0000

Authorised Share Capital : RM100,000,000

Paid-up Share Capital : RM87,750,000

Class of Shares : Ordinary Share of RM1 each

Voting Rights : 1 vote per Ordinary Share

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

Depositors Depositors

Substantial Shareholders as per Register of Substantial Shareholders

No. Name No. of shares Percentage

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

2. Dato’ Abdullah bin Mohd Yusof *10,575,500 12.0519

3. Pelita Dekad Sdn Bhd 9,412,500 10.7265

* 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 10,421,500

2. Soichi Okazaki 15,000 -

3. Masato Yokoyama 15,000 -

4. Akihito Tanaka 150,000 -

5. Ramli bin Ibrahim - 150,000

1 - 99

100 - 1,000

1,001 - 10,000

10,001 - 100,000

100,001 - 4,387,499

4,387,500 and above

Total

63

407

606

132

53

3

1,264



LIST OF 30 LARGEST SHAREHOLDERSAS AT 28 APRIL 2003

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

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

2 Pelita Dekad Sdn. Bhd. 9,412,500 10.7265

3 Amanah Raya Nominees (Tempatan) Sdn. Bhd. 5,998,500 6.8359Skim Amanah Saham Bumiputera

4 Malaysia Nominees (Tempatan) Sendirian Berhad 2,907,000 3.3128Great Eastern Life Assurance (Malaysia) Berhad (PAR 1)

5 Employees Provident Fund Board 2,766,000 3.1521

6 Picarda Holdings Sdn. Bhd. 2,105,500 2.3994

7 MCIS Insurance Berhad 1,612,500 1.8376

8 HSBC Nominees (Asing) Sdn. Bhd. 1,275,000 1.4530BOB HK For Arisaig Asean Fund Limited

9 Syarikat Maluri Sdn. Bhd. 1,165,500 1.3282

10 Status Resources Sdn. Bhd. 959,000 1.0929

11 HSBC Nominees (Tempatan) Sdn. Bhd. 926,000 1.0553HSBC (M) Trustee Bhd For OSK-UOB Small CapOpportunity Unit Trust

12 Malaysia Nominees (Tempatan) Sendirian Berhad 895,000 1.0199Great Eastern Life Assurance (Malaysia) Berhad (PAR 2)

13 Rozilawati binti Haji Basir 675,000 0.7692

14 Rozana Zeti binti Basir 675,000 0.7692

15 Roshayati binti Basir 675,000 0.7692

16 Universal Trustee (Malaysia) Berhad 630,000 0.7179SBB Retirement Balanced Fund

17 HSBC Nominees (Asing) Sdn. Bhd. 630,000 0.7179Genesis Malaysia Maju Fund Limited

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

19 Takuya Okada 600,000 0.6838

20 Malaysian Assurance Alliance Berhad 490,000 0.5584As Beneficial Owner (Growth Fund)

21 HSBC Nominees (Asing) Sdn. Bhd. 482,000 0.5493HSBCIT HK For JF Eastern Smaller Companies Fund (SEA)



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

22 BHLB Trustee Berhad 459,000 0.5231TA Growth Fund

23 HLG Nominee (Tempatan) Sdn. Bhd. 420,500 0.4792HLG Asset Management Sdn. Bhd. For PertubuhanKeselamatan Sosial

24 SBBAM Nominees (Tempatan) Sdn. Bhd. 378,000 0.4308Kumpulan Wang Amanah Pencen

25 Amanah Raya Berhad 369,000 0.4205Amtotal Return

26 HSBC Nominees (Asing) Sdn. Bhd. 345,000 0.3932BOB HK For Aberdeen Malaysia Equity Fund

27 Selidik Jaya Sdn. Bhd. 300,000 0.3419

28 Hidenori Futagi 300,000 0.3419

29 RHB Capital Nominees (Tempatan) Sdn. Bhd. 300,000 0.3419Pledged Securities Account ForRaja Aznin bin Raja Ahmad (CEB)

30 HSBC Nominees (Asing) Sdn. Bhd. 270,000 0.3077BBH (LUX) SCA Fidelity Funds Malaysia

TOTAL 77,070,500 87.8296



PARTICULARS OF PROPERTIESDETAILS OF JAYA JUSCO STORES BHD’S PROPERTIES AS AT 28 FEBRUARY 2003 ARE SET OUT BELOW :

Location

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

Lot 23551, Mukim of Setapak,District and State ofWilayah Persekutuan.

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

Lot PT162010,Mukim of Ulu Kinta,District of Kinta,Perak.

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

Leaseholdcommercial land/Existing two-storeyshopping centerExtension/Renovation

Leaseholdcommercial land/Two-storeyshopping centerand two-storeycar park

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

Freehold land/Two-storey shoppingcenter and twostorey car park

Freehold land/Two-storey shoppingcenter includingcovered car park

436,036/

200,316

179,989

368,516/666,694

643,753/691,414

609,840/794,806

377,490/483,299

February 1995(R)

February 1995(R)

June 1994(A)/October 1995(C)

April 1996(A)/August 1997(C)

April 2002(A)/August 2002(C)

99 yearsexpiring on19.12.2089



Freehold

Freehold

63,022,535

95,294,147

72,602,362

87,284,092

29,928,264

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 asat 28.2.2003(RM)

11

41/2

10

7

6

1/2



JAYA JUSCO STORES BHD DIRECTORY

SHOPPING CENTERS(ADDRESSES STATED AT THE SIDE)

STORES

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

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

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

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

JUSCO Mid ValleyAT3 Mid Valley Megamall, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur.Tel:03-2284 4800

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

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

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

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

JUSCO TAMAN MALURI SHOPPING CENTER Taman Maluri

Tel: 03-9285 5222

1 UTAMA SHOPPING CENTERBandar Utama

Tel: 03-7726 6033

BUKIT RAJA SHOPPING CENTERBandar Baru Klang

Tel: 03-3343 2166

ALPHA ANGLE SHOPPING CENTER Wangsa Maju

Tel: 03-4149 5288

KINTA CITY SHOPPING CENTERIpoh

Tel: 05-548 4668

JUSCO TAMAN UNIVERSITISHOPPING CENTER

Tel: 07-520 8000

JUSCO MELAKA SHOPPING CENTER Melaka

Tel: 06-232 4899


HIGHLIGHTS OF THE YEAR

A courtesy visit to our Honorable Prime Minister, Y.A.B. Datuk Seri Dr. Mahathir Mohamed by Mr. Toshiji Tokiwa, Dato’ Abdullah Mohd Yusof and Mr. Soichi Okazaki on16 January 2003.

Official Grand Opening of JUSCO Taman Universiti, Johor Bahru by Y.A.B. Dato’Haji Abdul Ghani bin Othman, Chief Minister of Johor on 8 August 2002.

Cheque Presentation Ceremony to the World Wide Fund For Nature (WWF) by Mr.Soichi Okazaki, Managing Director of Jaya Jusco Stores Bhd to Y.Bhg. Dato’ Dr.Mikaail Kavanagh, Executive Director of WWF Malaysia on 17 January 2003.

The Chief Minister of Negeri Sembilan, Y.A.B. Tan Sri Dato’ Hj. Mohd Isa bin Dato’Hj. Abdul Samat witnessed the Memorandum of Agreements (MOA) on JUSCO’sApprentice Scheme between Jaya Jusco Stores Bhd and the State on 22 July 2002.

The Apprentice Scheme will provide employment and education to children whosefamilies are from the lower income category.

Y.Bhg. Tan Sri Dato’ Dr. Hj. Abdullah Sanusi Ahmad, the President of OpenUniversity Malaysia (OUM) and Mr. Soichi Okazaki, Managing Director of JayaJusco Stores Bhd, exchanging the Memorandum of Agreements (MOA) betweenJaya Jusco Stores Bhd and OUM on 10 April 2002.

OUM has agreed to develop and provide courses in Diploma in Management(Retailing) and Career Certificate in Retail Operations for the employees of JayaJusco Stores Bhd.



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

1985 JUNEThe first pilot store, JAYA JUSCO Dayabumi,opened.DECEMBERThe second pilot store, JAYA JUSCO Taman Tun,opened.

1989 JUNEJAYA JUSCO Dayabumi closed.OCTOBERThe first Superstore, JAYA JUSCO TamanMaluri, opened.

1990 JUNE“Japan Management Training Programme” begun.NOVEMBER28 Malaysian students invited to Japan as“Ambassadors” through the AEON “1% Club”Programme.

1991 OCTOBERJUSCO Melaka was opened and fully operated by Malaysian staff. The AEONGroup’s “Hometown Forest” programme waslaunched simultaneously at the inaugurationof JUSCO Melaka.

1992 APRILJUSCO Wangsa Maju (Alpha Angle ShoppingCenter) our first Shopping Center, opened.

1994 AUGUSTOur Distribution Center begun operations.OCTOBERJapanese Trainer Programme begun.

1995 JUNEJAYA JUSCO Taman Tun closed.AUGUSTJUSCO Bandar Utama(1 Utama Shopping Center) opened.

OCTOBERJUSCO Bandar Baru Klang(Bukit Raja Shopping Center) opened.

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

1997 AUGUSTJUSCO Ipoh (Kinta City ShoppingCenter) opened.

1998 DECEMBERJUSCO Melaka Shopping Center opened.

1999 DECEMBERJUSCO Mid Valley opened.

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

2001 OCTOBERLaunch of WAOH Charity Fund / JUSCO FEST /JUSCO’s 17th Anniversary.JAYA JUSCO STORES BHD signed agreementwith Country View Berhad on JUSCO TamanUniversiti land purchase.NOVEMBER22 Malaysian students and 2 formerparticipants from the 1990 batch were invitedto Japan as ‘Ambassadors’ through the AEON“1% Club” Programme.

2002 APRILEstablishment of JUSCO-OUM Retail Center inAlpha Angle Shopping Center, at Wangsa Maju.JULYJUSCO Taman Universiti opened.Six (6) trainees were sent to Japan for six (6)months of training under the JapanManagement Training Programme.

2003 JANUARYJAYA JUSCO STORES BHD, signed agreementwith Magna Park Sdn. Bhd. to purchase apiece of land in Kepong, Kuala Lumpur.


MILESTONES



NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of JAYA JUSCO STORES BHD will be heldat Level 2, Junior Ballroom 1, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 17 June 2003 at10.30 a.m. for the following purposes:-

AGENDA

As Ordinary Business1. To receive and adopt the Audited Financial Statements for the year ended

28 February 2003 together with the Reports of the Directors and Auditorsthereon.

2. To declare a First and Final Dividend of 20% per share less 28% incometax for the year ended 28 February 2003.

3. To approve the payment of Directors ' Fees for the year ended28 February 2003.

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) Mr. Akihito Tanaka

vi) Encik Ramli bin Ibrahim

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

viii) Datuk Zawawi bin Mahmuddin

ix) Mr. Chew Kong Seng

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

Ordinary Resolution 1














82

As Special Business

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

6. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR THERECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE ORTRADING NATURE

"THAT subject always to the Companies Act, 1965, the Memorandum andArticles of Association of the Company and the Listing Requirements ofthe Kuala Lumpur Stock Exchange, approval be and is hereby given to theCompany, to enter and give effect to the recurrent related partytransactions of a revenue or trading nature (hereinafter to be referred toas "Recurrent Transactions") with the related parties as stated in Section2.2 of the Circular to Shareholders dated 26 May 2003 which arenecessary for the Company’s day-to-day operations subject further to thefollowing:-

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

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

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

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




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

whichever is the earlier; and

iii) the disclosure of the breakdown of the aggregate value of theRecurrent Transactions conducted pursuant to the ProposedRenewal of Shareholders’ Mandate in the Annual Report of theCompany based on the following information:-

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

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

AND THAT the Directors of the Company be and are hereby authorised to doall acts and things to give full effect to the Recurrent Transactionscontemplated and/or authorised by this resolution, as the Directors of theCompany, in their absolute discretion, deem fit." Ordinary Resolution 14



NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Eighteenth Annual GeneralMeeting, a first and final dividend of 20% per share less 28% income tax in respect of the financial year ended 28February 2003 will be paid to shareholders on 22 July 2003. The entitlement date for the said dividend shall be 3July 2003. .

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 3 July 2003 in respect of transfers.

(b) Shares bought on the Kuala Lumpur Stock Exchange on cum entitlement basisaccording to the Rules of the Kuala Lumpur Stock Exchange.

BY ORDER OF THE BOARD

SAW BEE LEAN(MAICSA 0793472)Secretary

Kuala LumpurDate: 26 May 2003

NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend andvote in his stead. A proxy may but need not be a member of the Company and the provisions of Section149(1)(b) of the Companies Act, 1965 shall not apply.

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

3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies theproportions 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 48hours 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 Sealor under the hand of its attorney.



6. Explanatory Note on the Special Business

Ordinary Resolution 14 on the Proposed Renewal of Shareholders’ Mandate for the RecurrentRelated Party Transactions of a Revenue or Trading Nature

The proposed Ordinary Resolution 14, if passed, will empower the Directors from the date of the EighteenthAnnual General Meeting, to deal with the related party transactions involving recurrent transactions of arevenue or trading nature which are necessary for the Company’s day-to-day operations. These recurrentrelated party transactions are in the ordinary course of business and are on terms not more favourable to therelated party than those generally available to the public and not to the detriment of the minority shareholders.This authority unless revoked or varied at a general meeting, will expire at the next Annual General Meetingof the Company and subject always to provision (ii) of the resolution. The details of the recurrent related partytransactions are set out in the Circular to the Shareholders dated 26 May 2003, which is despatched togetherwith this Annual Report.



PURSUANT TO PARAGRAPH 8.28(2) OF THE KUALA LUMPUR STOCK EXCHANGE LISTING REQUIREMENTS

STATEMENT ACCOMPANYING NOTICEOF ANNUAL GENERAL MEETING

1. Directors standing for re-election at the Eighteenth 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) Mr. Akihito Tanaka

(f) Encik Ramli bin Ibrahim

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

(h) Datuk Zawawi bin Mahmuddin

(i) Mr. Chew Kong Seng

2. Details of attendance of Directors at Board Meetings

There were five Board Meetings held during the financial year ended 28 February 2003. Details of attendance

of the Directors are set out in Statement of Corporate Governance appearing on page 32 of the Annual Report.

3. Place, Date and Time of Meeting

The Eighteenth Annual General Meeting of the Company will be held at Level 2, Junior Ballroom 1, Hotel

Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 17 June 2003 at 10.30 a.m.

4. Further details of Directors standing for re-election

Details of Directors standing for re-election are set out in Directors’ Profiles appearing on pages 18-20 of the

Annual Report.


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

JAYA JUSCO STORES BHD

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 Eighteenth Annual General Meeting of the Company to be held at Level 2, JuniorBallroom 1, Hotel Nikko, 165 Jalan Ampang, 50450 Kuala Lumpur on Tuesday, 17 June 2003 at 10.30 a.m. and at any adjournment thereof.

My/our proxy is to vote as indicated below :

Ordinary Resolution

Adoption of Audited Financial Statements and Reports for the year ended 28 February 2003

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

Approval of Directors’ Fees

Re-election of Dato’ Abdullah bin Mohd Yusof

Re-election of Mr. Toshiji Tokiwa

Re-election of Mr. Soichi Okazaki

Re-election of Mr. Masato Yokoyama

Re-election of Mr. Akihito Tanaka

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 Mr. Chew Kong Seng

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

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

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 heldP R O X Y F O R M

[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 ofspecific directions, your proxy will vote or abstain as he/she thinks fit.]

Signature:

Shareholder or Common Seal

NOTE :

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

2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting, provided that the provisions of Section 149(1)(c) of theAct 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 representedby 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, BandarBaru 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 2003


Place StampHere

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

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


At JAYA JUSCO STORES BHD we feel this identitysymbolises our ideals to our rising profile as we fulfill ourcorporate mission throughout the world.

“S” representsStoresService

“C” representsCorporateCommunityCustomers

JUSCO’s corporate identity has a high-quality look and feel,corresponding to the excellence we strive for in everything wedo for our customers and community.

The intertwined “S” and “C” stands for the core ideals of ourcompany:

The JUSCO Philosophy - “Customer First”


Date post:	21-Jan-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

ANNUAL REPORT 2003 - AEON CO. (M) BHD.aeonretail.com.my/corporate/investor/annual/pdf/2003.pdf ·...

Documents