Creating Smiles,
Connecting Hearts
integrated ANNUAL REPORT 2023

CREATING SmileS,
CONNECTING HEARTSOur Integrated Annual Report cover encapsulates the essenceof the nation's rich diversity and AEON’s commitment tofostering connections within its community. It showcases adiverse group of Malaysians, each radiating genuine joy withwide smiles across their faces, symbolising the vibrant societythat makes up Malaysia. At the heart of this cover, heart shapes
are formed by each individual to serve as a powerful visual
representation of unity, signifying the Company's dedication
to not only bringing smiles to its customers but also to forging
meaningful connections that transcend cultural boundaries.

FY2023 KEY HIGHLIGHTS

RM4.1b

RM114.8m

4.0 sen

RM1.9bRevenue

Net Profit

Proposed DPS

Net Assets

28

35

64

7

aeon Mall*

Aeon Store*

Aeon Wellness*

Aeon MaxValu*

44

178

13.4m sq ft

2.5m

daiso*

Total Outlets*

Net Lettable Area

AEON MEMBER Plus

9,868

29

1,078

2,740

aeon People

Training Hours
Per Employee

Tenant Partners

Suppliers &Business Partners(Includes full time, part time,casual workers, outsourced
workers and interns)

aeon Taman Maluri Shopping Centre, Kuala Lumpur
Headquarters*Information as at 25 March 2024

INSIDE
THIS REPORT
0105

ABOUT AEON

Corporate Governance6	Our Vision and Mission

92

Board of Directors

7

Our Presence

94

Board of Directors' Profile

8

Our Offerings

100 AEON Leadership Council

14	Our Achievements

102 AEON Leadership Council's Profile

02

106 Corporate Governance Overview Statement

Key Messages
18

Letter from The Chairman

22

Letter from The Managing Director

29

5-Year Financial Highlights

03
Creating Value

122 Audit Committee Report
126 Statement on Risk Management and Internal
Control
133 Additional Compliance Information
134 Statement of Directors’ Responsibility

06
FINANCIAL STATEMENTS
136 Financial Statements
195 Independent Auditors' Report

32

Value Creation Model

34

Key Market Trends

37

Business Opportunities

07

40

Key Business Risks

ADDITIONAL INFORMATION

04
CHAMPIONING Sustainability
44

199 Analysis of Shareholdings
202 Particulars of Properties
204 Corporate Information and Directory
205 Independent Limited Assurance Report

AEON Sustainability Charter46	Stakeholder Engagement
49	Material Matters
51	Risks and Opportunities
55

AEON Sustainability Performance

58	Fortifying Economic Performance68	Strengthening Environmental Accountability
76	Effecting Positive Social Change
86	Maintaining a Sound Governance Structure89	Sustainability Performance Data Table

Scan the QR code to view
AEON's Integrated Annual Report 2023

2

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

About this report
AEON CO. (M) BHD.’s (AEON or the Company) Integrated Annual Report 2023 (IAR2023) provides a holistic and balanced overview of the financial and nonfinancial aspects of the Company’s operations.
This report has been developed inaccordance with the principles-based
framework of Integrated Reporting andgoes beyond conventional, past-based
financial performance reporting toinclude information on AEON’s value
creation process alongside its strategic
priorities to address the material mattersidentified, existing and emerging risks
and opportunities as well as capitaldependencies.
Embedding sustainability as part of
AEON’s business strategy, sustainability
performance is mapped against
Economic, Environmental, Social andGovernance indicators and integrated
within this report.
Reporting Principles andFrameworks
AEON is publicly listed on the Main
Market of Bursa Malaysia Securities
Berhad (Bursa Malaysia). This IAR
2023 complies with the Bursa Malaysia
Securities Berhad Main Market Listing
Requirements (MMLR) and is guided by
the International Integrated Reporting
Framework issued by the International
Integrated Reporting Council (IIRC).The
provisions of the Malaysian Code on
Corporate Governance 2021 (MCCG) andBursa Malaysia Corporate Governance

Guide 4th edition are also applied, unlessotherwise stated.
AEON’s audited financial statements
for Financial Year 2023 (FY2023) havebeen prepared in accordance with the
Malaysian Financial Reporting Standards(MFRS), IFRS Accounting Standards as
issued by the International AccountingStandards Board (IFRS AccountingStandards) and the Companies Act
2016 (Act).
Scope and Boundaries
This report includes financial andnon-financial information that isrelevant and accurate as at the timeof publication pertaining to our
FY2023 covering the period between
1 January to 31 December 2023, unlessotherwise stated, and is consistent
with the audited financial year of
the Company. This report covers ourprincipal business activities in Malaysia
in FY2023.
Forward-Looking Statement
Forward-looking statements should beread with a degree of caution as they
are reliant on various events, risks,
uncertainties and other factors beyond
our control. These statements can be

identified through the use of key words
such as ‘believes’, ‘intend’, ‘will’, ‘plans’,‘outlook’ and other similar words inconjunction with discussions on future
operating or financial performance.
Such statements are not to be taken
as implicit or explicit guarantee of our
future performance. AEON provides
no representation in respect of thesestatements and disclaims all liability
whatsoever (whether in negligenceor otherwise) for any loss, damage,
costs or expenses however arisingout of or in connection with thesestatements and this report. AEON does
not assume any obligation to update theforward-looking statements containedin this report.
Feedback
We welcome feedback on our IAR 2023.
Please contact:
Corporate Communications Department
AEON CO. (M) BHD.
AEON Home Ground
3rd Floor, AEON Taman Maluri
Shopping Centre
Jalan Jejaka, Taman Maluri
Cheras, 55100 Kuala Lumpur
Email: CorpComms@aeonretail.com.my

Navigating This Report
We utilise the icons below throughout this report to link our capitals to material matters and key business risks to ourstrategies and operations:invested capitals
Financial
Human
Manufactured
Intellectual
NaturalSocial &Relationship

Material Matters
MM1

Product Quality,
Assurance & Safety

MM7

Climate Change

MM13

Labour Practices

MM2

Supporting SMEs

MM8

Energy Efficiency

MM14

Health, Safety &Well-being

MM3

Supply Chain
Management

MM9

Water Efficiency

MM15

Training & Development

MM4

Customer RelationshipManagement

MM10

Waste
Management

MM16

Community, Contribution,
Support & Engagement

MM5

Digitalisation

MM11

Preserving
Biodiversity

MM17

Governance, Ethics &Integrity

MM6

BusinessInnovation

MM12

Diversity & Equity

MM18

Data Governance &Security

3

Our Sustainability Approach
Serving as the cornerstone of our sustainability approach, the AEON Basic
Principles of pursuing peace, respecting humanity and contributing to THE
local community, all with a customer-centric focus, have influenced andshaped the AEON Sustainability Charter (ASC). The ASC outlines our key focus
areas and aligns our initiatives towards building a sustainable business while
guiding us on our sustainability journey.
Led by the ASC and our Vision of 'Creating Smiles and Connecting Hearts', we strive to operate and grow our businessin a sustainable and responsible manner. Harnessing our six capitals and value creation model, our approach involves
harmonising our strategic priorities with our sustainability commitments, to strengthen our ecosystem and create
long-term sustainable outcomes for stakeholders. These include fortifying the Company’s economic performance,
strengthening our environmental accountability, as well as effecting positive social change in our community, while
maintaining a sound governance structure throughout the process.
AEON Basic Principles

AEON Sustainability Charter

Sustainability Commitments

Peace

Sustainable Economics

Fortifying
Economic performance

Customer

PeopleCommunity

Peace
AEON is a corporate group whose
operations are dedicated to the
pursuit of peace through prosperity.
PeopleAEON is a corporate group that
respects human dignity and values
personal relationships.
Community
AEON is a corporate group rooted
in local community life anddedicated to making a continuing
contribution to the community.

Dynamic Customer Experience
Strengthening
ENVIRONMENTAL
accountability
Environmentally Focused

Responsible Employment

Efficiency & Integrity

Effecting positivesocial change

Maintaining a soundgovernance structure

For more information on our six capitals and value creation model, please refer to pages 32 to 33 of this IAR 2023.

4

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Our Sustainability Approach

Reporting Framework and Indices
Our sustainability-related disclosures are in accordancewith Bursa Malaysia Securities Berhad’s Main Market
Listing Requirements and have been prepared withreference to the Global Reporting Initiative (GRI) Standards
2021, Bursa Malaysia’s Enhanced Sustainability-related
Disclosures, and the United Nations Sustainable
Development Goals (UNSDGs). The GRI Content Index
can be found on our corporate website at https://aeongroupmalaysia.com/our-sustainability-performance
AEON remains a constituent of the FTSE4Good Bursa
Malaysia Index and the FTSE4Good Bursa Malaysia
Shariah Index for the second consecutive year.
We are actively working to bridge the gaps in oursustainability efforts by comparing our processes andoutcomes with those of industry leaders. This approachensures continuous improvement and alignment withbest practices in sustainability.
Scope and Boundaries
The scope of our sustainability disclosures covers
AEON's operations in Malaysia, detailing our economic,
environmental, social and governance performance. The
reporting period spans 1 January 2023 to 31 December
2023 and focuses on the most pertinent sustainabilityfocused projects, initiatives, and activities undertaken by
AEON during FY2023.
Governance
AEON’s sustainability governance is integrated into theCompany’s broader corporate governance framework,
thus ensuring that sustainability is an integral aspect of
our overall strategic vision. The Company’s sustainability
agenda is helmed by the Board of Directors (BOD) and
Board committees whose roles have been expanded toinclude our sustainability commitments.
This responsibility is supported by the Sustainability
and Risk Management Committee (SRMC), which wasestablished in May 2023. The establishment of the SRMC,
which segregated from the previous Audit and Risk
Management Committee (ARMC), represents a strategic

move to place a stronger and more focused emphasis on
sustainability and risk management within the Company's
governance structure. The SRMC's role is pivotal inoverseeing sustainability strategies, ensuring AEON's
operations reflect its commitment to environmental
stewardship, social responsibility, and ethical conduct,aiming to meet sustainability targets and make a positive
global impact.
For more information on our sustainability governance,
please refer to pages 109 to 110 of the Governance section.
Material Matters
In FY2023, we conducted a materiality assessment torefresh the essential matters which are important toboth our business and stakeholders. This evaluation was
carried out through a comprehensive review involving
industry benchmarks, the operational environment,
and our internal procedures. We identified 18 material
matters, of which five were ranked as top priority for theirsignificance in managing our Economic, Environmental,
Social and Governance (EESG) risks and opportunities
effectively. We have also updated our materiality matrix,
where necessary, to reflect changes in the sustainability
landscape.
These identified material issues have been integrated
into our EESG Pillars and strategic objectives to ensure
our sustainability efforts are aligned with our broader
business goals. This alignment also allows us to weave
sustainability into the fabric of our everyday operations,
thereby fostering long-term value for our stakeholders.
For more information, please refer to the content onMaterial Matters on pages 49 to 50.
Independent Assurance
Independent assurance allows us to ensure the accuracy,
objectivity and transparency of the sustainability-related
disclosures in this IAR 2023. As such, an independent
limited assurance on seven of our indicators was
conducted by KPMG PLT. For more details on the scope of
this initiative and the resulting observations, please referto the full independent limited assurance report on pages
205 to 208.

Choice ofGenerations

Serving Every Age and Meeting Every Need

01
ABOUT AEON
6	Our Vision and Mission
7

Our Presence8

Our Offerings

14	Our Achievements

6

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Our Vision and Mission
AEON CO. (M) BHD. (AEON) is part of the AEON group of companies in Malaysia
which is 51.7% owned by an integrated holding company based in Japan, AEON
Co., Ltd., which employs approximately 570,000 AEON people and operates in
14 countries worldwide.

AEON CO. (M) BHD.
Ownership
51.7%
AEON Co., Ltd., Japan

VisionAEON was incorporated in Malaysia on 15 September 1984 in responseto the Malaysian Government’s invitation to help modernise the country’s
retail industry. Currently, we manage and operate a retail chain of
departmental stores, supermarkets and pharmacies with an extensive
range of products such as daily essentials, household items, apparel,
pharmaceuticals, flat-price shops and other merchandise. AEON also offersa personal shopper service, drive-thru service and delivery service via our
myAEON2go e-commerce platform for fast, efficient, safe and low-contact
shopping in our effort to seamlessly adopt Online-Merge-Offline (OMO).
AEON’s chain of stores strives to satisfy the ever-changing needs anddesires of our customers. Guided by our ‘Customer First’ philosophy andthe Company’s understanding of our customers’ needs, we endeavour toprovide an optimal product mix that surpasses customers' expectations
and enhances their experience every time they shop at AEON.

To create smiles andconnect hearts

MissionTo excite customers’
experience that brings
joy and happiness

ValuesWith EMPATHY,
we LISTEN

With COMPASSION,
we RESPECT

With INTEGRITY,
we TRUST

With KINDNESS,
we ACTABOUT AEON

7

OUR PRESENCE

178

TOTAL OUTLETS
IN MALAYSIA(as at 25 March 2024)

AEON Mall
AEON StoreAEON MaxValu
AEON Wellness
Daiso
Kedah
• 2 AEON Wellness• 1 Daiso
Penang• 1 AEON Mall
• 2 AEON Store• 3 AEON Wellness• 3 Daiso
PERAK• 5 AEON Mall
• 6 AEON Store• 7 AEON Wellness• 5 Daiso

28

Selangor• 6 AEON Mall
• 9 AEON Store• 2 AEON MaxValu• 15 AEON Wellness• 12 Daiso
Kuala Lumpur• 4 AEON Mall
• 5 AEON Store• 4 AEON MaxValu• 16 AEON Wellness• 9 Daiso
Putrajaya• 1 AEON Store

35

7NEGERI SEMBILAN• 2 AEON Mall
• 2 AEON Store• 2 AEON Wellness• 3 Daiso

Kelantan• 1 AEON Mall
• 1 AEON Store• 1 AEON Wellness• 1 Daiso

MELAKA• 2 AEON Mall
• 2 AEON Store• 2 AEON Wellness• 2 Daiso

Terengganu• 1 DaisoJohor• 6 AEON Mall
• 6 AEON Store• 1 AEON MaxValu• 10 AEON Wellness• 5 Daiso

SARAWAK• 1 AEON Mall
• 1 AEON Store• 4 AEON Wellness• 2 Daiso

64

PAHANG• 2 AEON Wellness

44

8

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

OUR OFFERINGSAEON Mall offers different attractions featuring local andinternational brands with a unique product mix to cater to ourcustomers’ needs under one roof. Being the pulse point forthe surrounding community, AEON Mall is primarily visited
for shopping, as well as for relaxation, social gatherings,
green spaces, F&B, fun and entertainment. Oftentimes,
the renowned festive sales at AEON Mall create enormous
attraction and increased footfall for greater bargains.
Being one of Malaysia’s largest mall operators, there are
28 AEON Malls nationwide with supermarkets, fashionboutiques, pharmacies, household items, bistros and cafes,
cinemas, accessories, deco and gift shops and many more
for AEON customers to explore.
AEON Mall offers affordable retail spaces across 13.4 million
sq ft, inviting aspiring tenants to join our vibrant community.
Multi-scheme rental rates are available in our continuous
effort to support tenant partners to grow their businesses
together with us. In line with the Government’s aspiration
to develop SMEs, we have embarked on various initiatives
in collaboration with ministries, local authorities and stateagencies such as the Ministry of Domestic Trade and Costof Living (KPDN), Lembaga Pemasaran Pertanian Persekutuan(FAMA), Majlis Amanah Rakyat (MARA), etc.
AEON Mall offers accessibility by being conveniently locatednear public transportation and providing facilities friendly
to persons with disabilities (OKU).
For improved business operations, the e-Tenant Portal
is made available to all tenant partners as the businessautomation solution catering to the management of billings,
data analysis, feedback, and inventories.
Strategic advertisement spaces are also available at AEON
Malls for tenant partners to leverage in enhancing theirbrand presence.
In FY2023, AEON Mall attracted a total of 403 new tenants,
including 85 tenants who are making their debut in AEON.
This achievement is attributed to the mall's strategy of
expanding its offerings, particularly in categories catering to
the preferences of young generations, as well as enhancing
its selection of food and beverages and entertainment
options.

ABOUT AEON9

OUR OFFERINGSAEON Store comprises the General Merchandise Store(GMS) and Supermarket sections that have something forevery customer at every time. In essence, it serves as a
one-stop destination for urban and suburban households
to meet their daily needs. From fresh vegetables broughtstraight from local vegetable farmers to freshly preparedready-to-eat meals and a wide range of goods and services
including Softline and Hardline merchandise, they are all
being offered at reasonable prices inspired by sustainableliving.
All 35 AEON Stores nationwide aim at delivering a complete
lifestyle value proposition for our customers amid a
convenient and conducive shopping environment. AEONStore presents various reputable in-house brands to meetcustomers’ needs including TOPVALU, Inner Casual andHÓME CÓORDY.
The Delicatessen at AEON Store caters to the growing
demand for ready-to-eat meals, offering a wide range of
speciality food choices from sushi, bento, roast chicken,
desserts, hot snacks, healthy drinks and many more. The
dishes served at the Delicatessen are certified halal and are
freshly prepared on an hourly and daily basis. Delicatessen
aims to be the destination of choice for those looking for
quality and affordable family outings.

The Coco Café is a kopitiam-like eating place with a warm
ambience at AEON Store that caters to customers who
would like to savour light meals such as toasted bread,
half-boiled or poached eggs, nasi lemak and hot drinks.
The halal-certified La Boheme at AEON Store offers an arrayof oven-fresh breads and bakery-related products including
pastries and puddings. Customers can be assured of tasty
and good-quality products served daily in a cosy setting.
In 2023, La Boheme proudly introduced two new category
ventures - La Boheme Coffee and La Boheme Desserts:
Sucrée Amor. La Boheme Coffee is now available at selected
AEON Stores, including AEON Putrajaya, AEON Melaka,
AEON Bandaraya Melaka, AEON Rawang, AEON Cheras
Selatan and AEON Mid Valley. La Boheme Coffee stands
out for its unique coffee blend of mixed beans, namely
Brazil Cerrudo, Columbia Huila, and Indonesia Sumatra,
roasted to perfection.
Sucrée Amor is derived from the French language whichtranslates to 'the endearment of sweetness'. Sucrée Amor
takes pride in curating a top notch range of desserts. The
desserts are available at selected AEON Stores namely
AEON Putrajaya, AEON Melaka, AEON Cheras Selatan and
AEON Mid Valley.

10

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

OUR OFFERINGSAEON MaxValu outlets are located in densely populated
neighbourhoods for customers’ daily shopping convenience,
making it a breezy and pleasant experience for everyone.
Downscaled in built-up area, it reflects on the concept ofproviding maximum value in terms of an extensive rangeof premium fresh produce and quality goods with value
for money, anchored on providing special attention to all
customers.
AEON MaxValu outlets offer a wide array of groceries andfood products that cater to diverse customers' needs. It
also offers a variety of general merchandise items suchas apparel, household goods, and electrical appliances atreasonable prices. Since the first outlet was established in
2005, we now have seven AEON MaxValu outlets offering
customers a pleasant and personalised shopping experience.

AEON Wellness is the go-to hub for all things related tohealthy living, beauty care and personal hygiene. Guided
by the vision to inspire health and beauty transformation,
AEON Wellness offers quality selections and personalised
services that lead to a smile for every person. As AEON
Wellness evolves into an all-inclusive pharmacy chain,it also ensures an elevated shopping experience anduncompromising service excellence. With the tagline of'Be Healthy, Be Beautiful', its dedicated team of in-store
Pharmacists and Beauty Advisors provide professional
consultation services, addressing the increasing awarenessof the significance of health and beauty.
Selected AEON Wellness provides skin analysis and healthchecks, along with services such as smoking cessation, uricacid, lipid profile, and glucose tests. Additionally, customers
can also receive diet and supplement advice for managing
the three highs – high blood pressure, high cholesterol,and high glucose levels.
In addition to in-store purchases, customers can conveniently
make online transactions through the myAEON2go
platform and foodpanda app for instant delivery services.
Established in 2006, AEON Wellness has expanded to 64
outlets nationwide, upholding an unwavering commitment
to top-notch services and product offerings to ensure
customer satisfaction throughout its growth.

ABOUT AEON

11

OUR OFFERINGSDAISO by AEON opened its first outlet in Malaysia in 2010 at
AEON Mall Bandaraya Melaka. With 44 outlets nationwide,
these flat-price stores offer customers a one-stop shopping
service with more than 8,000 products across multiple
categories.
Known for their affordability, quality and uniqueness,
DAISO's products range from household and living to
kitchen, gardening, cosmetics, stationery, decorative items
and many more.
Customers also have the option to order online fromselected DAISO stores via the foodpanda app.

In meeting today's ever-evolving consumer habits, theplatform is equipped with a recommendation feature,
powered by Machine Learning algorithms that surface
relevant products that might interest individual consumers
based on their purchasing trends to drive purchases andenhance customer service levels. With myAEON2go,customers can browse through a wide range of products
and complete their purchases in just a few clicks.
Many exciting and exclusive promotions are offered toencourage purchases via myAEON2go.These also promote
new sign-ups to the app. Customers can choose to receive
their orders via delivery on the same day or at a desired
timeslot. Moreover, myAEON2go also offers a seamless
shopping experience with the options for self-pickup at
designated collection points.

Our e-commerce platform, myAEON2go provides customers
with access to AEON's wide assortment of products while
acting as a one-stop shop for customers to purchase all their
daily needs at their fingertips. This platform complements
physical shopping by providing customers with a hasslefree shopping experience from the comfort of their homes.
Orders are handpicked by a dedicated team once a customer
places an order online.

Soon, myAEON2go will be expanding its express delivery
services to cover the entire Peninsular Malaysia. Thissignificant move aims to bridge the gap for customers
who face challenges visiting our physical stores. We are
actively innovating myAEON2go to welcome partners,
thereby enriching our platform with more offerings andfostering a vibrant and inclusive online marketplace. This
strategic development not only diversifies our catalogue
but also elevates the overall shopping experience for ourvalued customers.

12

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

OUR OFFERINGS

Established in Malaysia in 2013 and subsequently gaining prominence as the foremost private brand in Japan, TOPVALU
has distinguished itself through its unwavering commitment to delivering not only trusted quality but also introducing
innovative ideas and a sense of excitement to its customers, which adheres rigorously to the stringent AEON quality
standards.
TOPVALU Malaysia takes pride in its commitment to Halal compliance and ensures that our locally developed products
meet Halal standards. In a marketplace saturated with choices, TOPVALU stands out by offering not just products but anexperience rooted in trust and quality. Our dedication to providing great value ensures customers enjoy the best value
and price. With TOPVALU, trust becomes synonymous with quality, and quality becomes a foundation of trust. It’s arelationship that goes beyond a mere transaction – it’s a commitment beyond measure.

ABOUT AEON13

OUR OFFERINGS

Inner Casual (iC) is an athleisure brand of AEON fromJapan. From its smart fabric technology that champions
how clothing can enhance an active lifestyle plus ensuringthat these added values are easy on the budget, iC alsoprioritises maintaining high comfort to fit into customers’
daily lifestyles. Made from eco-friendly, 100% organic
cotton, iC is designed to be anti-odour, and anti-bacterial,with UV protection plus its garments are guaranteed forhigh sweat absorption and quick drying ability.
There are three distinctive styles in iC: Active Wear, PeaceFit,
as well as the Sustainable fashion range in collaboration
with the British designer and activist, Katherine Hamnett,a pioneer in ethical fashion. ‘SAVING THE PLANET’ is themessage on many iC tees print that embodies Katherine
Hamnett’s will and passion to protect the earth and theenvironment that nurtures it.

HÓME CÓORDY is AEON's home fashion brand which
offers a wide range of products for dining, living, bedroom,
bathroom, and kitchen spaces. HÓME CÓORDY designs are
simple and timeless, using white, blue, and grey colours
to harmonise with nature and life. HÓME CÓORDY's
offerings are known for four key qualities: simple design,
Japanese craftsmanship, multi-functionality, and seamlesscoordination. HÓME CÓORDY would be the top choice forcustomers who value minimalist design, quality, versatility,and blending with other decor.
Beyond aesthetics, HÓME CÓORDY aims to elevate any
space into a warm and inviting sanctuary. HÓME CÓORDY
firmly believes that a well-designed and comfortable home
is essential for fostering a happy and healthy lifestyle.

14

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Our achievements
6 MarchAEON Launches Rahmah Raya

JAN

FEB

1 January
Zero Plastic Bag Campaign

1 February
Launch of ‘Everyday Fresh
Everyday Low Price’

The campaign aims to provide
customers with consistent andaffordable prices for fresh goods
all year round at all AEON Storesand AEON MaxValu, as well as
myAEON2go.
AEON has embraced a sustainable
initiative by eliminating the use ofplastic bags across all its stores,
encouraging customers to either
bring their reusable bags or choose
from a selection of reusable bags
available for purchase at AEON
outlets.

25 February
Outstanding Business and Service
Award
Alumni Look East Policy
Society(ALEPS)has
bestowed this award upon
AEON in recognition of its
exemplary performance,
dedication to quality
service, and positive
impact on the businesslandscape.

13 January
Bronze Award - RetailMAR
2 MarchAEON Putrajaya Store Opening

AEON Rahmah Raya is part of the
Payung Rahmah programme to help
people cope with the rising cost ofliving while stimulating the country’s
economy.

APR
13 April
AEON collaborates with Tenaga
Nasional Berhad and GSPARX for agreener future

AEON inked a Supply Agreementfor Renewable Energy (SARE) with
Tenaga Nasional Berhad (TNB)
and GSPARX Sdn. Bhd. (GSPARX)
to implement solar photovoltaic
systems across its nationwide
network of AEON shopping malls.
20 April
New DAISO outlet

AEON received the Bronze Award in
the Retail category at the Prestigious
Putra Brand Awards.

AEON expanded its footprint withthe grand opening of its generalmerchandise store at IOI Putrajaya.
The store boasts four levels of retailspace, offering a comprehensive
range of products and services.

DAISO opened its new outlet at Setia
City Mall.

ABOUT AEON

15

Our achievements

MAY

JULY

20 MayMalaysia-Japan Friendship Forest
Programme in Bidor, Perak

25 July
New DAISO outlet

AEON completed the final phaseof the Malaysia-Japan Friendship
Forest Programme in Bidor, Perak byplanting 12,000 trees. In total, 30,000
trees were planted in 10 years.

DAISO opened its new outlet at
AEON Mall Seremban 2.

AUG
18 AugustMaxValu Sunway Velocity Reopening

17 September
Mid-Autumn Festival 2023

AEON celebrated the Mid-Autumn
Festival with an extraordinary arrayof over 200 mooncake varieties. This
remarkable event was witnessed by
the Malaysia Book of Records.

JUN

OCT

23 JuneAEON FWD: Business Partners andSuppliers Conference

5 October
AEON joins forces with foodpanda
to elevate Q-commerce

The new MaxValu Sunway Velocity
is the first MaxValu outlet to offerHÓME CÓORDY, La Boheme, Coco
Café and a live hydroponic farmingarea.
A platform to connect, collaborate,
and move forward collectively,
AEON’s Business Partners andSuppliers were given insights into
AEON’s 2024 planning and beyond.
24 JuneAEON Fashion Preview June23
Edition: Largest Fashion Show

534 individuals took the runway at
AEON Fashion Preview 2023 held
in IOI City Mall, Putrajaya setting a
Malaysia Book of Records for themost models in a fashion show.

SEP
6 September
Silver Award for Best Experiential
Marketing 2022 - 2023

AEON expanded its presence online
by making AEON Wellness and
DAISO products available throughthe foodpanda app.
10 October
New DAISO outlet

AEON Mall was honoured with theSilver Award for Best Experiential
Marketing 2022-2023 (Category B)
by the Malaysia Shopping Malls
Association (PPK Malaysia).

DAISO opened its new outlet at theMain Place Mall.

16

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Our achievements

NOV
1 November
Reopening of AEON Melaka
Shopping Centre

AEON Melaka Shopping Centre
underwent a major rejuvenation andadopted a fresh new look to cater tothe customers’ needs.
9 November
AEON x Ministry of Health: Coloursof Life

24 November
Forward Faster SustainabilityAwards: Partnership for the Goals
Recognition

AEON has been recognised for its
commitment to sustainability at
the Forward Faster SustainabilityAwards organised by UN Global
Compact Network Malaysia & Brunei,
specifically earning recognition for
its impactful contributions towards
the Partnership for the Goals
initiative.

6 December
Coca-Cola Malaysia x AEON
Malaysia x Hiroyuki Industries x
Trash4Cash Recycle Me! Campaign
2023

A media launch event of the ‘Recycle
Me!’ Campaign was held at theEquatorial Plaza, KL. The campaign
encourages the public to collect PET
bottles in exchange for cash rewards
based on their contributions.
10 December
AEON in United Nations Climate
Change Conference, COP28 UAE

DEC
The Ministry of Health has appointed
AEON as one of the ‘Nutrihub’supermarkets that play a role inassisting in nutrition advocacy
activities
atthesupermarket
premises level.

1 December
Reopening of AEON Mall Cheras
Selatan

16 November
New AEON Wellness Outlet

AEON was elected as the Panel ofAdvisory for COP28 under the Trade& Industry Cluster by the Ministry of
Natural Resources, Environment, andClimate Change (NRECC). We also
shared our insights on sustainability
by participating as panelists in both
'Circularity in the City' and 'Greening
Supply Chain' sessions.
22 December
New AEON Wellness Outlets

AEON Wellness opened its newoutlet at AEON Melaka Shopping
Centre.

AEON Mall Cheras Selatan continued
to provide a seamless shopping
experience to our customers byenhancing our malls with cuttingedge facilities, infused with a modern
touch including new tenants.

AEON Wellness opened three newoutlets in a week in Kiara Bay,
Kepong, Rain Tree Rain at The Era,
Duta North and AEON Mall Seri
Manjung.

Storiesof Life

Cultivating Experiences, Connecting Communities

02
Key Messages
18

Letter from The Chairman

22

Letter from The Managing Director

29

5-Year Financial Highlights

18

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Letter from the chairman

AEON is poised
to intensify its
efforts in delivering
an exceptional
shopping experience
to customers while
creating long-termsustainable value forour stakeholders.

DATUK ISKANDAR SARUDIN
Independent Non-Executive Chairman

KEY MESSAGES

19

LETTER FROM the chairman

Dear Valued Shareholders,
I am delighted to report that AEON attained key milestones and made solid progress
in FY2023. Supported by a dedicated team of AEON People, we deepened customer
relationships by serving Malaysians across all segments within our community– creating more smiles while connecting more hearts along the way. Navigating
through this soft economic environment, we take comfort that our AEON Living
Zone ecosystem continues to strengthen our resilience while enabling us to capture
new opportunities.
NAVIGATING THROUGH A DYNAMIC RETAIL LANDSCAPEREWARDING SHAREHOLDERS

The ongoing geopolitical tension continues to disrupt
global supply chain while the tightening of monetary
policies across global markets to suppress inflation haveresulted in the slowing of global economic growth. Backhome, our local economy is weighed down by elevatedcost pressures and a weakened currency, directly
impacting consumer spending behaviour as well as the
dynamics of the retail landscape in Malaysia.

Catering to Malaysians across all age groups, our 35
AEON Stores and 28 AEON Malls with a net lettablearea of 13.4 million square feet, continue to attract
healthy customer footfall, underpinned by a strong set of
products, services and tenant mix that offers somethingfor everyone. Our operational strategies continue to drive
innovation and promote synergies across our businesses,
enabling us to introduce new offerings and opportunities
that appeal not only to our customers but also to tenants,business partners, suppliers as well as employees. Our
digital transformation initiatives also ensure we provide
a seamless shopping experience for customers while
increasing our appeal to the younger customer segment.
These measures are enabling us to cultivate long-termloyalty and trust with our customers, future-proofing
AEON while further strengthening the AEON brand.

Reflective of the market landscape and sentiment, theMalaysian economy grew 3.7% in 2023, a sharp decline
from the 8.7% recorded in 2022 primarily due to the highbase effect from the pent-up demand arising from thereopening of the Malaysian economy post-pandemic.
Although footfall to shopping malls has been increasing
since the reopening, consumers’ purchasing power has
softened due to the ongoing macro headwinds including
inflation and interest rate hikes.
Cognisant of the interplay between the macroeconomy
and industry forces, we leverage the AEON Living Zone
ecosystem to serve customers while differentiating
ourselves from the rest. By putting customers at the heartof our business, we are able to establish a deep connection
with our diverse customer base through understanding
their evolving needs and providing them with products
and services that cater to their unique preferences andneeds. Increasingly, we are also allocating greater
resources towards ESG priorities including climatechange and worker well-being, ensuring businesssustainability to allow us to create and deliver long-termsustainable value to our stakeholders.

Revenue
FY2023

RM4,129.0m
FY2022: RM4,141.1m
Net Profit
FY2023

RM114.8m
FY2022: RM111.2m
Proposed Dividend
Per Share

Proposed Dividend
Payout Ratio

FY2023

FY20234.0 sen49%

FY2022: 4.0 sen

FY2022: 50%

20

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

LETTER FROM the chairman

These strategies anchored AEON’s competitiveness inthe market and enabled us to deliver resilient results
amid the changing business landscape. In FY2023, werecorded a net profit of RM114.8 million and the Board
has recommended a final dividend of 4.0 sen per share,
equivalent to RM56.2 million or a payout ratio of 49%,
subject to shareholders’ approval in the upcoming AGM.
As we progress ahead, we are focused on executing ourstrategies, while prudently managing our cost base, toenable us to continue to reward our loyal shareholders
through dividends and reinvest in our business to capture
new opportunities.

The AEON Sustainability Charter (ASC), established in
2022, continues to act as a blueprint that guides us on
our sustainability journey ahead. The ASC outlines our
ESG goals while ensuring ESG priorities and material
matters are embedded as an integral part of ourstrategies and business decisions, maintaining a balance
between financial returns as well as long-term businesssustainability.
Our ESG priorities and goals are grouped under five corepillars, namely Environmentally Focused, Responsible
Employment, Sustainable Economics, Dynamic Customer
Experience and Efficiency & Integrity to enable us tofocus our efforts and engage better with key stakeholders
to realise meaningful, sustainable change.
To enhance transparency and accountability, we areintegrating Bursa Malaysia’s Enhanced Sustainabilityrelated Disclosures as part of our sustainability
reporting activities. In FY2023, we conducted a thoroughmateriality assessment to identify and refresh the key
matters critical to our business and stakeholders. This
assessment involved a comprehensive review of industry
standards, our operational landscape, and internal
processes. Following the review, we expanded ourmateriality matters from 12 to 18 with a keener focus on
Environmental Stewardship.

CREATING SUSTAINABLE VALUEAt AEON, our commitment to sustainable growth isdeeply anchored upon our foundational principles of
pursuing peace, respecting humanity, and uplifting
communities.
Starting at the top, to ensure that our Board is fit
for purpose, it is imperative that Board diversity is
maintained – not just in terms of gender, but also
background, experience, skills, competencies andage. We have exceeded the 30% threshold for women
representatives on our Board. Diversity has been shown
to be a key contributor to board effectiveness, positively
contributing towards better decision-making, risk
management and engagement with the Management.
For a more robust governance structure as well as
greater oversight of the Company’s sustainability journeyand strategy, we have also separated the Audit and Risk
Management Committee (ARMC) into two committees,
namely the Audit Committee (AC) and Sustainability and
Risk Management Committee (SRMC) to enable a greater
focus on sustainability topics.

These material matters are aligned with the ASC as wellas our overall strategic priorities. This ensures that ourapproach to sustainability is seamlessly integrated into
our daily business operations, contributing to the creationof long-term sustainable value for our stakeholders.
Additionally, we have set sustainability performancetargets that will enable us to continuously monitor oursustainability progress, allowing us to focus on the most
relevant, material, and impactful ESG areas.
We are delighted to share that for the second year running,
AEON was once again recognised as a constituent of
FTSE4Good Bursa Malaysia (F4GBM) Index and theFTSE4Good Bursa Malaysia Shariah (F4GBMS) Index in
2023, reaffirming our ESG practices and initiatives.
MOVING FORWARD INTO 2024 AND BEYOND
Looking ahead, AEON is poised to intensify its efforts
in delivering an exceptional shopping experience tocustomers while creating long-term sustainable value
for our stakeholders. Leveraging the AEON Living Zone
ecosystem, our aim is to grow organically as well as
through partnerships and collaborations with tenant

KEY MESSAGES

21

LETTER FROM the chairman

partners, suppliers and the AEON group of companies
to optimise our value proposition. As we continue
to strengthen our value proposition and competitive
advantage in the industry, our priority is also focused onenhancing ESG practices to generate greater sustainable
impact that benefits our community and environment.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I would like to takethis opportunity to extend our heartfelt appreciation to
Dato’ Tunku Putra Badlishah Ibni Tunku Annuar, Datuk
Syed Ahmad Helmy Syed Ahmad, and En. Abdul Rahim
Abdul Hamid who stepped down from our Board in May
2023. Our gratitude goes to them for their invaluable
counsel and contributions to AEON during their tenure.
We also warmly welcome Dato’ Merina Abu Tahir,
Ms. Jenifer Thien Bit Leong and En. Mohamad Abdul
Naser Md Jaafar @ Yunus to our Board.
I would also like to express my gratitude to Mr. Keiji Ono,
who resigned as the Managing Director on 29 February
2024. Thank you for your valuable contributions and wewish you all the very best in your new role with AEON
Co., Ltd., Japan. Congratulations to Mr. Naoya Okada on
his appointment as our new Managing Director. We areconfident that he is the right person to lead AEON as we
progress forward.

To all my fellow Directors, I am grateful for yourunwavering support and counsel, especially for yourwise counsel and contributions to the various Board
Committees. I look forward to working together with allof you to drive AEON to greater heights.
To our esteemed customers, business partners, tenants,
suppliers, regulators, financiers and shareholders, thankyou for your unwavering support and patronage. Last
but not least, to our team of AEON People – thank you
for your dedication, tenacity and loyalty in ensuring that
we continue to elevate customer experience by bringing
joy and happiness to customers each time they visit ourstores. As we celebrate AEON’s 40th Anniversary this year,
let us come together to connect more hearts and bringmore smiles to every AEON customer.
Thank you.
Datuk Iskandar Sarudin
Independent Non-Executive Chairman

22

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

LETTER FROM THE MANAGING DIRECTOR

AEON delivereda strong financial
performance in FY2023
amid a soft consumer
market landscape.
Revenue was stable at
RM4,129.0 million ascompared to RM4,141.1
million registered in
FY2022 underpinned
by growth in property
management services
segment.

Mr. Naoya Okada
Managing Director

KEY MESSAGES

23

LETTER FROM THE MANAGING DIRECTOR

Dear Shareholders,
It is my pleasure and privilege to address
you in my new role as Managing
Director since my appointment on
1 March 2024. Having served as
AEON’s Deputy Managing Director
and Chief Operating Officer since2022, I hope to leverage my insights
into the Company’s strategies andoperational dynamics to steer AEON
to greater heights. Building upon oursolid foundations and leveraging thesteadfast support of AEON People,
I am confident we will make strong
strides forward in our journey towards
sustained success.
In FY2023, AEON navigated the year with agility,
executing a series of strategic initiatives across the retailbusiness and property management services business,creating long-term value for shareholders whilestrengthening business sustainability. The executionof these priorities has not only reinforced our solid
foundation as one of the leading retailers in Malaysia
but is also helping drive growth across our businesses
and future-proofing AEON.
NAVIGATING A DYNAMIC OPERATING ENVIRONMENT
2023 saw the gradual recovery of economic activities asbusinesses ramped up their operations momentum tosustain the demand surge experienced post-reopeningof economies and travel borders worldwide in 2022.
However, since the reopening of economies postpandemic, Malaysia, along with the rest of the world,
have been impacted by macroeconomic headwinds thatthreaten to impede the trajectory of recovery.
Throughout 2023, consumers grappled with costof living issues while businesses contended with
supply chain disruptions, inflation, interest rate hikes
and forex volatility to maintain margins. Faced withthese headwinds, Malaysia also recorded a weakerperformance with GDP growth of 3.7% in 2023 compared
to 8.7% in 2022. The sharp decline was also partly due tothe high base effect from the pent-up demand arisingfrom the reopening of the Malaysian economy postpandemic in 2022.

AEON operates within the vibrant and competitive
retail landscape in Malaysia and was not spared fromthe impact of the ongoing macroeconomic headwinds
facing the industry. As a consumer-centric business,
our operations are much dependent upon the generalmarket sentiment and consumer confidence level. Amid
the soft consumer landscape, we leveraged our strong
set of core operational strategies to remain competitiveand deliver resilient results.
FINANCIAL PERFORMANCE
Revenue and Profit
AEON delivered a strong financial performance in
FY2023 amid a soft consumer market landscape.
Revenue is stable at RM4,129.0 million as compared to
RM4,141.1 million registered in FY2022 underpinned by
growth in property management services segment.
FY2023 retail segment revenue moderated by 2% toRM3,454.3 million as compared to RM3,525.6 million
in FY2022. This was primarily attributable to thenormalisation of market trends after the surge in demandin the previous year due to special factors including thepent-up demand from the reopening of economic activities
which led to accelerated purchasing decisions in FY2022.
As the effects of these gradually tapered off in FY2023,
we saw revenue aligning to a more normalised market
behaviours. Consequently, our average basket size also
moderated slightly to RM61.90 as shopping trend returned
to normalcy as customers shop more frequently after
pandemic restrictions were lifted.
As consumers continued to contend with rising financialpressure from macroeconomic headwinds in FY2023,
we saw consumers reprioritised their spends fromdiscretionary spends to focus more on basic necessities
and essential items. This was evident from the softer
sales in Softline and Hardline while Foodline sales
increased in FY2023.

RetailRevenue:
FY2023

RM3,454.3m
FY2022: RM3,525.6m
Property Management Services
Revenue:
FY2023

RM674.7m
FY2022: RM615.5m

24

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

LETTER FROM THE MANAGING DIRECTOR

Meanwhile, revenue from the property management
services segment increased by 10% to RM674.7 million
in FY2023 from RM615.5 million in FY2022, underpinned
by improved occupancy rate at 93.2% and effective
tenancy renewal rate of 95%, supported by our effective
management and ongoing strategy of revitalising older
assets.
We maintained stringent cost discipline and implemented
stricter cost control efforts to counter the impact ofincreased electricity tariffs in FY2023. As a result, werecorded a stronger Profit After Tax (PAT) of RM114.8
million, an increase of 3.2% versus RM111.2 million in
the previous year.
Balance Sheet
Our business remains cash-generative with a cash balanceof RM100 million. We also pared down borrowings to
RM420 million as of the end of FY2023 compared to
RM498 million in FY2022.

We resumed our investment plans with a two–foldincrease in our capital expenditure to RM380.6 million
in FY2023. During the year, we opened our new GMS
in Putrajaya and rejuvenated two AEON Malls, namely
AEON Melaka Shopping Centre and AEON Mall Cheras
Selatan. We also acquired the land in Kota Bharu,
Kelantan where AEON Kota Bharu is located. Apartfrom this, we also invested in enhancing customer
shopping experience through various major projects
including mall facelifts and facilities upgrades alongsidetechnology and system upgrades.
STRATEGIC PRIORITIES FOR SUSTAINABLE GROWTH
As our operating landscape changes, our strategic
priorities are focused on ensuring AEON keeps pace withthe latest retail trends in the market. Leveraging the AEON
Living Zone ecosystem, we increased our adaptability,
agility and ability to pivot our business to better serveand cater to changing customer demands as well as our
tenant partners. These priorities also include productinnovation and technology development centred aroundcustomers to improve the overall shopping experience.

AEON Living Zone Ecosystem AND Strategic Priorities

RetailGrowing Customer Base
• New Store Opening andStore Facelifts• Segment and Differentiate
Sales Areas• Strengthen Customer Loyalty• Broaden Private Brands

Property
Management
Services
Increasing Footfall and Traffic• Mall Rejuvenation andFacelifts• Diversify  Tenant Mix• Effective  Tenant Management• Thematic Marketing

Sustainability
Championing Sustainable Practices• Fortifying Economic Performance• Strengthening Environmental
Accountability• Effective Positive Social Change• Maintaining a Sound Governance
Structure

KEY MESSAGES

25

LETTER FROM THE MANAGING DIRECTOR

RetailGuided by our 'Customer-First' philosophy, we aim togrow our customer base through enhancing productportfolio mix while leveraging technology to enrich the
shopping experience for customers.
Growing Customer Base, Strengthening Brand Loyalty
In line with our plans to grow our customer base, we
opened AEON Putrajaya in the first quarter of 2023 toserve the surrounding community and welcomed our35th AEON store at Setia Alam on 18 March 2024.

'Thursday is Better than Friday' promotions to offer morevalue to customers.
We also broadened our suite of products, including an
extensive range of private brands such as TOPVALU,
Inner Casual and HÓME CÓORDY to cater to the growing
demand for quality and affordability. We also refreshed
La Boheme's brand image and expanded the productrange to include new categories like premium desserts
and coffee. The Delicatessen was reimagined as a familyfriendly destination, and we boosted in-store visibility
through engaging customer events.
Property Management Services

We continued to invest in store facelifts and renovations
to cater to a wider customer base. We also introduced
innovative store formats such as Kids Republic, adedicated section housing kids apparel, toys and kidsrelated products across our general merchandise store
to make shopping more intuitive for customers. Products
and services offered across different AEON Stores also
varied slightly from one to another, segmented anddifferentiated by store based on the demands of thesurrounding community. This allowed us to offer a uniqueand varied shopping experience, catering to a broader
spectrum of customers by addressing customers’ distinct
shopping needs and preferences.
Additionally, to strengthen customer loyalty, we
continued to enhance our AEON MEMBER Plus loyalty
programme by collaborating with renowned brands
such as Tupperware and Chef Wan Neoflam for speciallycurated products made available to AEON members at
privileged offers. We also continued to roll out a variety
of deals such as 'Everyday Fresh Everyday Low Price' andThroughout FY2023, our Property Management Services
team continued to revitalise our existing assets andactively collaborated with our tenant partners on various
programmes and initiatives.
Bolstering Tenant Growth, Increasing Customer Footfall
We rejuvenated AEON Melaka Shopping Centre and
AEON Mall Cheras Selatan in FY2023, upgrading theirfacilities to elevate customer comfort and convenience.
These rejuvenation projects resonated well withcustomers with sales in the respective reopening months
for AEON Melaka Shopping Centre and AEON Mall
Cheras Selatan increasing by more than 60% and 25%,
respectively. These rejuvenation projects also involved there-zoning of lettable areas, resulting in a more streamlined
tenant layout across these malls. Common facilities suchas toilets, baby rooms as well as prayers facilities werealso upgraded to offer greater comfort to our customers.

26

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

LETTER FROM THE MANAGING DIRECTOR

We also diversified our tenant mix to offer a more holistic
shopping experience. By focusing more on lifestyle, food,sports, health, and beauty offerings, we aimed to attract the
younger customer demographic, enriching their shopping
experience with variety and quality. The addition of morethan 400 new tenants in FY2023, with a notable increase in
F&B options strengthened our tenant mix, making AEON
a one-stop shop for all our customers’ needs.
Furthermore, we intensified our efforts to increase tenant
renewals and occupancy rates which are crucial for thesustained success of our malls. We continued to maintain ahybrid rental structure with our tenants, providing tenants
both operational and financial flexibility. This resonatedwell with our tenant partners and as a result of this, weachieved a tenant renewal rate of 95% with an occupancy
rate of 93.2%, exceeding pre-pandemic levels. Operational
efficiency and productivity in mall management were alsoenhanced, with a focus on improving waste, electricity,
and water management, ensuring our malls remained
attractive, efficient, and sustainable destinations for our
diverse range of customers.
Throughout the year, we teamed up with our tenantpartners on thematic marketing and promotional initiatives
to drive footfall to our malls. In FY2023, we hosted unique
events that not only made it to the Malaysian Book ofRecords including 'The Largest Spiderman CostumeGathering', 'Largest Banana Leaf Rice Eating Session'and 'The Largest Baba and Nyonya Attire Gathering' but
more importantly, these events drove tremendous footfall
and led to higher sales for our retail business as well as
tenants. These activities helped foster synergies within
the AEON ecosystem and with our business partners,
strengthening our overall offering.

STRENGTHENING DIGITAL TRANSFORMATIONIn FY2023, AEON further strengthened its digitaltransformation initiatives, building on the previous
year's foundations to enhance customer experience andoperational efficiency.
We continued to enhance the myAEON2go platform
to complement our customers’ physical shopping
experiences while driving digital sales, offering them theconvenience of shopping online with the assurance of thequality and service they expect from AEON. In FY2023,
we increased the product assortment on the myAEON2go
app and continued to carry out same-day delivery to offer
greater convenience for customers.
The AEON Wallet app enables customers to makepayment, collect points, discover the latest promotions
and locate the nearest AEON Stores around them. This
creates a more enriching customer experience and helps
foster long-term brand loyalty and trust.
Further expanding our online presence, we teamed up
with the foodpanda app to expand customer reach andconvenience. This collaboration enabled customers toshop across 49 of our speciality stores including AEON
MaxValu, AEON Wellness and DAISO products from theapp, providing them access to nearly 13,000 items at instore prices online with doorstep delivery.
The expansion of self-checkout counters (SCO) terminals
across our stores also streamlined the checkout process,significantly reducing wait times and improving overall
store efficiency. Over 300 SCOs were installed acrossAEON Stores, AEON MaxValu, AEON Wellness and DAISOKEY MESSAGES

27

LETTER FROM THE MANAGING DIRECTOR

outlets, achieving a utilisation rate of 28%, as compared to
182 SCOs with a utilisation rate of 10% in 2022.
CHAMPIONING SUSTAINABLE PRACTICESAEON remains committed to championing ESG practices
to drive sustainable and responsible growth. To this end,
we are guided by the AEON Sustainability Charter (ASC)to enhance our economic performance, strengthen
environmental responsibility and drive positive social
impact, while maintaining a sound governance structure.
Operationally, FY2023 saw us focusing our efforts on
reducing the Company’s carbon footprint by managing ourenergy consumption and further embracing renewableenergy sources. The installation of solar photovoltaic
systems at our malls boosted our renewable energy
generation efforts throughout the year.
We continue to advocate for better waste management
solutions with our organic waste disposal system at AEON
Alpha Angle, which enables us to convert organic waste
into fertiliser. In January 2023, AEON launched the 'Say
No to Plastic Bag' campaign to eliminate single-use plasticbags at AEON cashiers and checkout counters across all
AEON Stores, AEON MaxValu, AEON Wellness and DAISO
outlets nationwide.
Throughout the years, AEON has endeavoured to uplift
the social well-being of our local community by creating

sustainable economies for the communities where we
operate, and we continue to do so. Additionally, AEON
continues to uphold a robust governance system acrossall stakeholder dealings and business activities.
For a clear and comprehensive overview of oursustainability efforts, kindly turn to the Sustainability
section on pages 44 to 90 in this Integrated Annual Report.
OUTLOOK AND PROSPECTS
The retail industry is expected to experience a slower
growth rate in 2024 weighed down by ongoing macro
headwinds including the tightening of household income
due to elevated cost pressures coupled with a weakened
currency as well as ongoing global geopolitical tensions
impacting global supply chains.
Consumer sentiment and discretionary spending arealso likely to be affected by the revision of the service tax
rate in 2024 along with the expected rollout of subsidy
rationalisation in the second half of the year.
Amid the changing operating landscape, we stayguided by the AEON Basic Principles of pursuing peace,respecting people and contributing to the community byplacing customers at the heart of our business, not just for
long-term value creation, but more importantly, businesssustainability.

28

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

LETTER FROM THE MANAGING DIRECTOR

In the Retail segment, AEON will continue to leverage an
ambitious yet focused strategy – expanding our customer
base, enriching our product portfolio mix, and continuing
to enhance the myAEON2go platform to better serve
customers. This strategy will create a harmonious blendof physical and digital retail experiences, tailored to meetthe evolving needs of our consumers and enhance their
shopping convenience.
On the Property Management Services front, we willcontinue to increase the value of our existing assets by
upgrading our malls to modernise and provide better
facilities to enhance customer shopping experience,
while strengthening our tenant mix with greater tenant
diversity. Our goal is to cultivate vibrant, appealing retail
environments through exemplary mall management andset a new benchmark in the industry.
Last but not least, sustainability will remain an integral
component of our overall business strategy. We arecommitted to elevating our ESG practices, with theambition of achieving our ESG goals under the five corepillars of the ASC. We intend to make this commitment
evident in every aspect of our operations, from adoptingenergy-efficient measures to enhancing waste and water
management, implementing initiatives that positively
impact communities while upholding strong governancepractices, among other measures.

ACKNOWLEDGEMENTS
On behalf of the Company, I extend my deepest
appreciation to our Chairman as well as other membersof the Board and AEON Leadership Council for theirunwavering guidance and strategic insights. A note ofappreciation also goes to my predecessor, Mr. Keiji Ono,
who resigned as Managing Director on 29 February 2024
and will be returning to AEON Japan to take on a new
assignment. On behalf of the Company and management,
thank you for your invaluable contributions, particularly
in strategically strengthening the foundation of AEON’s
management structure, and we wish you every success inyour future endeavours.
Our heartfelt thanks also goes out to our esteemed
customers, business partners, tenants, suppliers,
regulators, financiers and shareholders. Thank you foryour unwavering support, patronage and confidence in
AEON.
Last but not least, to our team of AEON People - thank you
for your dedication, tenacity, trust, loyalty and ensuringthat we continue to elevate customer experience bybringing joy and happiness to customers each time they
visit our stores. Together, let us connect more hearts andbring more smiles to all AEON customers.
Thank you.

As AEON embraces FY2024, we envisage our journey will
be one of aspiration and determination. We are poised tonavigate the complexities of the marketplace, leveraging
our strengths in retail and property management whileadvancing our sustainability and digitalisation agendas.
We remain resolute in driving innovation, championing
unparalleled customer experiences, as well as deliveringresilient and sustainable growth. We are confident that our
strategies will not only propel us forward in our journeyahead but also strengthen our core to future-proof AEON.

Mr. Naoya Okada
Managing Director

KEY MESSAGES

29

5-year financial highlights

Year Ended 31 December

2023
RM'0002022
RM'0002021
RM'0002020
RM'0002019
RM'000FINANCIAL performance
Revenue

4,129,038

4,141,094

3,630,364

4,051,302

4,538,884

Retail

3,454,311

3,525,563

3,099,107

3,444,661

3,832,247

674,727

615,531531,257

606,641706,637

EBITDA

711,077

759,931724,652

746,127

843,402

Profit before tax

193,938

211,468

131,014

101,756

196,887

Profit after tax and attributable toowners of the Company

114,832

111,232

85,28741,423

109,292

Net dividend

56,16056,16042,12021,06056,160Property, plant and equipment andIntangible assets

3,129,532

3,003,477

3,171,171

3,376,593

3,659,183

Right-of-use assets

Property management services

FINANCIAL POSITIONASSETS

1,071,108

1,211,173

1,501,217

1,689,636

1,772,427

Investment

52,64759,09863,927

57,84876,600

Deferred tax assets

183,148

180,639

168,264

147,071

120,059

Other non-current assets

17,915

18,238

18,101

18,42419,024Current assets

769,193953,698

940,115803,819

890,481TOTAL ASSETS

5,223,543

5,426,323

5,862,795

6,093,391

6,537,774

Share capital

702,000

702,000

702,000

702,000

702,000

Non-distributable reserves

50,70457,39262,221

54,69864,636

Retained earnings

1,106,308

1,047,636

978,524914,297

929,034

TOTAL EQUITY ATTRIBUTABLE TOOWNERS OF THE COMPANY

1,859,012

1,807,028

1,742,745

1,670,995

1,695,670

419,995

497,776

728,333

933,580928,660

Lease liabilities

1,623,904

1,779,411

2,064,988

2,230,339

2,293,098

Other liabilities

1,320,632

1,342,108

1,326,729

1,258,477

1,620,346

TOTAL EQUITY AND LIABILITIES

5,223,543

5,426,323

5,862,795

6,093,391

6,537,774

Earnings per share (sen)

8.18

7.92

6.07

2.95

7.78

Net dividend per share (sen)

4.00

4.00

3.00

1.50

4.00

Net assets per share (RM)

1.32

1.29

1.24

1.19

1.21

Net debt to equity (%)*

17.22

14.41

30.69

51.60

50.82

EQUITY

LIABILITIES
Borrowings

FINANCIAL INDICATORS

Return to equity (%)

6.18

6.16

4.89

2.48

6.45

Price earning ratio

13.33

17.30

23.23

36.27

18.25

Share price as at 31 December (RM)

1.09

1.37

1.41

1.07

1.42

Note:
* Net debt to equity excludes lease liabilities.

30

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

5-year financial highlights

REVENUE (RM'000)

NET ASSETS (RM'000)

2023

4,129,038

2023

1,859,012

2022

4,141,094

2022

1,807,028

2021

3,630,364

2021

1,742,745

2020

4,051,302

2020

1,670,995

2019

4,538,884

2019

1,695,670

Profit before tax (RM'000)

Borrowings (RM'000)

2023

193,938

2023

419,995

2022

211,4682022

497,7762021

131,0142021

728,333

2020

101,7562020

933,5802019

196,8872019928,660

Profit after tax (RM'000)

Earnings per share (sen)2023

114,832

2023

8.18

2022

111,232

2022

7.92

2021

85,287

2021

6.07

2020

41,423

2020

2.95

2019

109,292

2019

7.78

Touchpoints that
Touch Hearts
Where Smiles Greet and Hearts Meet

03
Creating Value
32

Value Creation Model

34

Key Market Trends

37

Business Opportunities

40

Key Business Risks

32

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

VALUE CREATION MODEL
Input

Value Creation
Financial Capital

AEON Living Zone Ecosystem

Our strong financial performanceand balance sheet enable us toreward shareholders with dividends
and reinvest for future growth.
We have ample access to financial
markets and institutional lenders.
Manufactured Capital
Our extensive asset portfolio across
Malaysia encompassing owned andleased malls, general merchandise
stores, specialty stores and foodprocessing centre enable us toreach, market and distribute our
products to customers nationwide.
Intellectual Capital
Our established and strong brandreputation of over 40 years including
home-grownprivatebrands,membership programmes as well
as longstanding partnerships withtenants and businesses.
Natural Capital
Running our business in a sustainable
manner, we utilise natural resources
responsibly and are mindful of ourenvironmental footprint.
Human Capital
The collective knowledge, experience,competence and expertise alongsideactive recruitment, development
and retention of AEON People tofulfil their personal potentials whilechampioning diversity and inclusion.
Social & Relationship
CapitalThe strong relationships and rapport
developed and maintained with our
stakeholders over time enable us
to understand and address theirconcerns, ensuring we maintainour social licence to operate. Our
extensive ESG efforts, generates
long-term positive impacts for ourcommunity.

Internal AEON
Living Zone

External potential partners
for AEON Living Zone

Strategic Priorities

RetailGrowing Customer Base
• New Store Opening andStore Facelifts• Segment and Differentiate
Sales Areas• Strengthen Customer Loyalty• Broaden Private Brands

Property Management
Services
Increasing Footfall and Traffic• Mall Rejuvenation andFacelifts• Diversify  Tenant Mix• Effective Tenant Management• Thematic Marketing

Creating Value

33

The diagram below provides an integrated view of how value is created from the operations of AEON to facilitate
informed decision-making by stakeholders. Harnessing our six capitals, we leverage the AEON Living Zone ecosystem
to strengthen our competitive advantage while generating sustainable value which is distributed to stakeholders andshared with society.
OUTPUTFORTIFYING economic performance
Growing our customer reach and economic performance forbusiness sustainability

RM4.1b

RM114.8m

4.0 sen

Revenue

Net Profit

Proposed DPS

49%

28

Proposed
Dividend Payout
Ratio

AEON Malls

35
AEON Stores

7

64

44

AEON MaxValu

AEON Wellness

DAISO

13.4m sq ft

1,078

2.5m

Net Lettable Area

Tenant Partners

AEON
MEMBER Plusstrengthening environmental accountability
Operating responsibly and contributing towards a greener
planet> 550,000

3,922 MWh

Trees Planted To Date

Solar Energy Generated

51%

11%

Emission Intensity

Recycling Rateagainst base year - 2019

effecting positive social change
Key enablers (e.g. business processes,
data and technology, resource skillsets)

Supporting the local community and economy

9,868

29

AEON People

Average Training Hours
Per Employee

2.1%

RM1.1mPersons With
Disability Hired

Community Investment

Sustainability
Championing Sustainable Practices• Fortifying Economic Performance• Strengthening Environmental Accountability• Effective Positive Social Change• Maintaining a Sound Governance Structure

maintaining a sound governance structure
Abiding by the principles of stewardship and managing thebusiness and affairs of AEON to deliver long-term growth

40%

ZERO

Women Representationin Board

Corruption Cases Reported

34

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Key Market TRENDSIn May 2023, the World Health Organization (WHO) declared an end to the global COVID-19
public health emergency. Despite this, the global macroenvironment remains far from ideal
with persistent challenges from the ongoing Russia-Ukraine conflict, to the instability in Gaza,
escalating climate changes, as well as the economic impact of inflation leading to interest rate
hikes.
According to the International Monetary Fund's (IMF) World
Economic Outlook released in October 2023, global economic
growth is expected to moderate to about 3% in 2023 and2024, falling below the average 3.8% growth observed from2000 to 2019. Within Malaysia, the local economy grew by
3.7% in 2023 with Bank Negara Malaysia (BNM) predicting
growth to be at 4.0% to 5.0% in 2024, underpinned by robust
domestic demand, major infrastructure projects, and a
gradual recovery in tourism. Nonetheless, this represents
a notable slowdown compared to the impressive 8.7%
growth witnessed in 2022, reflecting the influence of external
challenges.
AEON operates within the vibrant retail landscape in
Malaysia with rapidly evolving consumer preferences.
To strengthen our resilience in the dynamic retail space,
it is essential for us to consider and respond effectively
to key macroeconomic factors and industry trends that
could potentially impact our business. To understandmore on how we monitored and responded to thesetrends, please refer to pages 40 to 42 of Key Business
Risks.

Key Business Risks
Transformation
Risk

CustomerExperience Risk

People Risk

Health, Safety andSecurity Risk

Digitalisation
Risk

Sustainability Risk

Liquidity
Risk

Product Proposition
Risk

Cybersecurity
Risk
Our invested capitals
FinancialIntellectual

Human

NaturalManufactured

Social & RelationshipKey market trend observed in 2023 include:

01
Inflation remains elevatedInflation in Malaysia showed an upward trend over the
past few years, transitioning from 1.1% in 2020 to 2.5%
in 2021 and further increasing to 3.4% in 2022 before
easing to 2.5% in 2023. Despite this moderation, inflationlevels persist above the long-term pre-pandemic averageof 2.0% observed from 2011 to 2019. Moving forward,
Malaysia’s inflation outlook remains highly susceptible todevelopments in subsidy rationalisation measures, global
commodity prices and financial market developments.
The Ministry of Finance (MOF) expects headline inflation
to average between 2.0% to 3.5% in 2024.

The impact of inflation, coupled with an elevated costof living, has led consumers to adopt a more cautious
approach to their spending habits. Beyond essential
purchases, consumers are actively seeking value in theirtransactions.
Our invested capitals

Key Business Risks

Creating Value

35

Key Market TRENDS

02
Recovery of economic activity
The resurgence of economic activity is closely tied to thecondition of the labour market, serving as a key driverfor household spending and a significant indicator of
overall economic health. According to the Department of
Statistics Malaysia, the labour market in 2023 improvedon the back of continued demand for labour with
unemployment rate returning to pre-pandemic levels.
This is expected to improve further in 2024 underpinned
by encouraging momentum in the domestic economy
and recovery in external trade.
Citing a report by BNM, labour participation rate is at ahistorical high in 2023, supporting income growth andconsumer spending. The sustained domestic demand is
expected to cultivate stability in household expenditures,
encompassing both essential and discretionary items.
However, according to the Malaysian Institute of

Economic Research (MIER), consumer confidence levels
in 2023 has remained below the optimal level, reflecting
a weakening consumer mindset due to inflationarypressures, particularly affecting low and mid-income
households. As the recovery unfolds, navigating thesecomplex dynamics is crucial to create a robust businessenvironment.

Our invested capitals

Key Business Risks

03
POLARISED CONSUMER CONSUMPTION PATTERNS
Recent shifts in consumer behaviour highlight clear
distinction among different income and age groups, asvarying customer segments embrace diverse values. The
increasing economic influence of younger consumers
introduced a new era in retail dynamics, reshaping thecurrent retail landscape.

demand for health and wellness related products. To
stay relevant, retailers must innovate and offer targeted
products and services, both digitally and via traditional
brick-and-mortar model to effectively cater and serve tothe needs of Malaysians across all age groups.

This emerging consumer group is generally more
conscious with their spending but less price-sensitive.
Growing up in a digital era, these tech-savvy individuals
have higher willingness to conduct research online
for a product and prioritises quality over price-points,
which makes the conventional one-size-fits-all retailmodel obsolete. Besides, this group of consumer is also
increasingly prioritising health and wellness with growing

Our invested capitals

Key Business Risks

36

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Key Market TRENDS

04
Increased pressure for digital and technological innovation
Digitalisation and technological advancement are
influencing the ways retailers engage and build
relationships with customers. Social media platforms andonline communication channels are increasingly used toconnect with customers.
Generative artificial intelligence (AI) and big data analysis
are enabling retailers to capture valuable customer dataand gain insights into their buying patterns. This has led
to increased emphasis on leveraging customer data to
gain competitive edge through product targeting as wellas personalisation. However, this shift towards datadriven strategies has prompted an emphasis on dataprotection, recognising the importance of safeguarding
customer information.

Additionally, there is a growing trend among retailers toprovide customers with a seamless shopping experienceby offering multiple touchpoints and purchase options
through an omnichannel strategy, further blurring thelines between brick-and-mortar and e-commerce.

Our invested capitals

Key Business Risks

05
Intensified focus on sustainability
The escalating impact of climate change has led to
growing scrutiny on sustainable business practices bystakeholders across the board, from policymakers toregulators, financiers, consumers and non-governmentalorganisations. Sustainability is also a topic of growinginterest among investors as they integrate ESG factors
within their investment assessment and decisions.
As key economies begin translating their ESG
commitments into concrete policies and legislation,emphasising and promoting sustainability for long-termvalue creation, companies are allocating greater resources
towards ensuring sustainability agendas, policies andprogrammes align with the interests of stakeholders. This

strategic approach aims to ensure business sustainability
while meeting the expectations of a broad spectrum of
stakeholders in an era where responsible and ethicalbusiness practices are increasingly prioritised.

Our invested capitals

Key Business Risks

Creating Value

37

Business Opportunities
Changes to consumer preferences, new entrants to market, introduction of new technologies
and solutions influenced the highly dynamic retail landscape in Malaysia while opening up
new opportunities for retail players in Malaysia. At AEON, we monitor, assess and evaluate
these opportunities thoroughly before investing resources to develop commercially viable
propositions to seize them. We also ensured that these propositions are aligned to ourstrategic priorities, risk appetite, internal returns threshold and potential value creation for our
stakeholders.

01
Experiential retailModern consumers are increasingly valuing experiences
over material possessions. By aligning with this shift in
preferences, retailers can cater to a broader customer
base. At AEON, we are increasingly focusing on creating
engaging and memorable experiences for our customers
in addition to selling products.
Having an immersive and enjoyable shopping experienceenabled us to engage customers on a deeper level, createa stronger emotional connection as well as increasecustomer and brand loyalty. The immersive shopping
experience also helps shape the perception of the AEON
brand, making it stand out in the minds of consumers.

Furthermore, an immersive shopping experience helps
in attracting higher footfall when customers perceive ourstores as a destination for an experience rather than justa place to make purchases, making them more likely tovisit, spend time and explore our offerings. As the threatof online shopping continues to grow, we leverage thisvery unique value proposition that online platforms often
cannot replicate - the in-store shopping experience tostrengthen our competitive advantage.
Key Business Risks

02
Digitalisation: Online-Merge-Offline Shopping
While online shopping is becoming increasingly favoured
by digital natives and the younger consumer segments,
we see an opportunity to leveraging technology andexperiential retail to enhance our omnichannel strategy.
Our aim is to create seamless shopping experiences
across both online and physical touchpoints to support
customers’ buying journey while keeping up with shifting
consumer behaviour.
We are accelerating our Online-Merge-Offline approachthrough enhancements of myAEON2go platform,
increasing product portfolio mix online to complement
physical shopping while driving digital sales. In-stores,
we are also digitalising our operations by expanding
the use of Self-Checkout Counters (SCO) to serve morecustomers. As we continue to grow our online presence
and platform, we aim to offer a seamless online andoffline shopping experience to capture a larger market.
Communication is also key in engaging customers bothonline and offline. Social media has become an integral
part of e-commerce, providing a direct channel to reachand engage customers. We utilise our social media
platforms both as a marketing and advertising tool
for our products and will continue to invest resources
to grow our social media presence and utilise market
insights to tailor marketing strategies to the preferences
and behaviours of Malaysian consumers.
On the physical front, we also strive to create shareable
moments within our stores to drive footfalls while
amplifying our brand presence online as memorable
experiences are often shared on social media platforms
in this digital era. Special events from the record-breaking
largest Baba & Nyonya attire gathering at AEON Melaka
Shopping Centre to the biggest mooncake selections
during the mid-autumn festivals at AEON Putrajaya
and AEON Fashion Preview - showcasing the latest
and upcoming from AEON's fashion brands - all boast
increased footfall to our malls and brand presence online.
Key Business Risks

38

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Business Opportunities

03
Data-driven understanding of customers’ needs
Data plays a crucial role in modern retail, connecting
various aspects of the industry to enhance efficiency,
customer experience, and decision-making.
Combining both online and offline data, we see anopportunity to enhance the quality and quantity of our
first-party data, enabling us to design better marketing
campaigns and forecast demand. Our deep understandingof the diverse Malaysian consumer base for four decades
also presents an opportunity for us to leverage these data
to provide targeted offers and recommendations basedon individual preferences.

Leveraging data-driven insights, we continue to expand
and enhance our products to boost user experienceand simplify the customer journey. Backed by data, theintegration of Artificial Intelligence (AI) into modern retailis also an ongoing trend, with continued advancements
leading to more innovative solutions and improvementsin efficiency and customer satisfaction.
Key Business Risks

04
Increasing focus on health and wellness
There has been an increasing emphasis on wellness
with more people looking beyond physical fitness toincorporate holistic health practices into their routines,
including mental, emotional, and spiritual wellness.
According to a research by McKinsey titled Future ofWellness Survey in August 2023, the younger consumer
group is spending more on health and wellness comparedto other groups. These consumers are prioritising
spending on appearance, health, nutrition, fitness andsleep, among others. We observed a similar trend in
Malaysia where there is a growing trend for wellness
products.
Leveraging this growing trend, we continue to expand
AEON Wellness footprint across Malaysia while offering
a greater product portfolio mix from cosmetics to hairand skin care products, assortment of over-the-counter
medications, supplements and other personal and homecare items.
As more consumers are engaging in leisure activities tocare for their mental wellness and overall well-being, we

also continue to grow our flat-price store, DAISO which
offers an extensive inventory of products across multiple
categories ranging from household and living, organisingtools, kitchen, gardening, cosmetics, decorative items
and many more.
We also prioritise the development of our private brands
including HÓME CÓORDY, TOPVALU, and Inner Casual
to offer customers quality products that fit their wellness
journey. These private brands bring a wide range of safeand high-quality products that cater to varying needsof customers, from home furnishing to daily essentials
as well as products that cater to the active lifestyle ofcustomers.
For more details on our offerings under each private
brands, please refer to pages 12 to 13 of Our Offerings.
Key Business Risks

Creating Value

39

Business Opportunities

05
Strengthening AEON living zone through collaborations and partnerships
We see opportunities to leverage the AEON Living Zone
ecosystem and our core offerings to grow our productportfolio mix and customer base through membership as
well as unlock new revenue streams.Through collaborations
and partnerships, we are able to streamline, enhance andbroaden our suite of products including private brands
and curated product selections that appeal to our diverse
customer base.

as collaborations with business partners to deliver the
products and services that serve the need of the surrounding
community where our business operates.

The AEON Living Zone aims to build and combine multiformat store networks and businesses with infrastructure
to continually contribute to the local communities throughbusiness activities.This will include organic growth as well

Key Business Risks

Working alongside our tenants and business partners, we
also strengthen our tenant diversity and mix to offer aholistic shopping experience, which in turn also provide
a boost to our experiential retail approach.

06
SUSTAINABLE BUSINESS
Through the strategic integration of sustainability acrossour business operations, AEON is poised to make an
impact on both environmental conservation and market
positioning, while serving as a prudent investment in
operational efficiency. By appealing to the growing
market of environmentally conscious consumers, we
anticipate to not only contributing to a sustainable
future but also attracting a customer base that values
our commitment to eco-friendly practices and ethicalsourcing. The implementation of streamlined energy
and waste management systems is anticipated to yield
tangible reductions in operational costs. Beyond theimmediate financial benefits, this approach reinforces ourresilience to environmental risks, ensuring the sustainable
management of our operations. The integration ofsustainability emerges as a fundamental for long-term
viability and as a key differentiator, positioning AEON as
an industry leader and the preferred choice in the modern
retail landscape.
Key Business Risks

40

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

KEY BUSINESS RISKs
Aeon has in place a robust enterprise risk management framework that enables us to manage
and report the risks that we face as a business. A risk that can seriously affect our ability to deliver
our customer value proposition or business sustainability is termed as a ‘principal risk’.
To manage these principal risks effectively, we have identified the risk appetites for key areas affecting the managementof our principal risks. The table below sets out our principal risks, their underlying causes and the key control factors inaddressing each risk.
Risk

TRANSFORMATION RISK
Inability to innovate
and transform theexisting business modeland increase AEON’s
competitiveness in termsof attracting retailers,customers, and the local
community, especiallyin a highly disruptive
marketplace for long-termbusiness sustainability.

PEOPLE RISK
The risk of not being
able to attract, retain anddevelop the required talentand capabilities in order
to contribute towards
achieving AEON’s strategic
priorities and long-term
growth.

DIGITALISATION RISKDelays in digitalisation
efforts may affect theCompany’s competitive
position.

Rationale/Cause

Key Control and Mitigation Factors• Shift in customer preferences.
• Heightened competition fromphysical and virtual malls.
• Shift in customers’
expectation of the future ofmalls.
• External factors such as
dampened retail spending
environment, climate change
and global competition for
digital and technology talent.
• Project-related risks such as
risks incurred during projectplanning and execution,and in the management ofcontracts.
• Poor governance structure tomonitor, report and follow up
on any action plan.

• A clear strategic roadmap that repositions
and re-energises sustainability in every
facet of business.
• Enhancing AEON’s retail stores througha myriad of digitalisation endeavours tofurther strengthen our value proposition.
• Ongoing tenant renewal process tostrengthen tenant mix and increase footfall
to our malls.
• Balance allocation of capital expenditure
for physical mall rejuvenation and facelift
while enhancing digital platforms towards
delivering an omnichannel experience.
• Project management governance practices
established to track and monitor cost andprogress of key projects.

• Heightened competition for
talent locally and globally.
• Remuneration and benefits
that lack competitiveness to
attract and retain the righttalents for the right jobs.

• Succession programme in place for key
personnel.
• In-house development and training
programmes.

• High reliance on third-party
vendors to deliver front-end
retail applications.
• Inadequate integration
between front-end
applications and AEON’s backend physical and IT systems.

• Ongoing assessment and updates on both
front-end and back-end applications todeliver effective IT solutions.

Creating Value41

KEY BUSINESS RISKs

Risk

LIQUIDITY RISK
Ineffective cash
management andinadequate tenant
collection management
leading to potential delays
in fulfilling payment
obligations.

CYBERSECURITY RISK
Compromised IT
infrastructure due tointernal or external threats,
which may lead to data
breaches, theft, loss andmisappropriation of
information that could
result in loss of customer
confidence, leading to
reputational damage andbusiness disruption.

PRODUCTPROPOSITION RISK
Inability to understandand gauge customer
demand and preferencesin terms of product needs
and requirements suchas choice/assortment,
quality, safety, pricecompetitiveness andevolving ethical andresponsible sourcing
standards, leading toinability to build andsustain customer loyalty.

Rationale/Cause

Key Control and Mitigation Factors• Poor resource management
leading to ineffective costmanagement.
• Adverse changes incommodity prices, affecting
supply cost of key inventory,
leading to lower sales andincreased logistic costs andenergy costs.
• Changes in government/
regulatory stance on
licensing, permits, taxationand interest rates.

• Various cost optimisation initiatives tobalance between business operations
requirement and customer experience.
• Closely monitor supply changes andimplement necessary remediation plans.
• Continuous review of fit-for-purpose
financing facilities against operating needs.

• Heightened exposure,given the acceleration ofdigitalisation in AEON’s
business functions.
• Lack of an adequatecybersecurity policy andprogramme.
• Lack of specialists incybersecurity and data
integrity.
• Increase in external cyberthreats through Distributed
Denial-of-Service (DDoS)
attacks and ransomware.

• Adoption of cloud-based storage service
provider that provides enhanced data
security protection.
• Enhancement to cybersecurity features tosecure our network, web applications, webserver, application codes and databaselayers of various front-end and back-end
applications.
• Periodic IT security audits and reviews.
• Annual review of insurance plans to ensure
their adequacy and exploring new risks to
be insured.

• Poor assortment due toinadequate data-driven
information about customer
preferences.
• Heightened competition fromphysical and digital retailers,
locally and globally.
• Changing demographics, e.g.
younger customer segments
are not only emerging as
potent retail spenders, butalso influencing the course of
the regulatory environment inwhich we operate.
• Global/local supply chain
disruptions due to climatechange-induced events,
global political volatility,
geopolitical tensions,
government restrictions,potential recession impacting
key suppliers.
• Inadequate ethical andresponsible supply chain
management.

• Strategies implemented to develop AEON’s
private brands by adhering to ethicaland responsible sourcing practices while
combining a balanced approach to local
and global sourcing to future-proof AEON
against supply chain disruptions.
• Data-driven customer insights to offer
customers a personalised and holistic
shopping experience.
• Strong supplier relationship and incentives
structure to ensure healthy supply chain.

42

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

KEY BUSINESS RISKs

Risk

CUSTOMER
EXPERIENCE RISK
Failure to continuously
attract and satisfy
customers’ demand andpreferences due to lack ofpersonalisation.

HEALTH, SAFETY AND
SECURITY RISK
Failure to provide asafe and conducive
working environment for
employees and a safe
shopping environment forour customers. The health,safety and security of ouremployees, customers andstakeholders remain a toppriority to our business.

SUSTAINABILITY RISK
There is an increasing
focus locally and globallyon how businesses
operate, with greater
scrutiny on ESG-relatedrisks and opportunities andtheir ramifications. This
necessitates a truly holistic
approach to understanding
climate-related risks andembedding ESG into ourbusiness strategy andoperations.

Rationale/Cause

Key Control and Mitigation Factors• A combination of poor
understanding of consumer
preferences and lack of datadriven analysis such as past
purchasing trends to deliver
a personalised shopping
experience.
• Inadequate personalisationin our e-commerce/customer
relationship management offront-end retail applications,e.g. myAEON2go.

• Leverage e-commerce solutions such as
myAEON2go to deliver an omnichannel
retail experience as well as e-wallet
payment options to elevate customers'
shopping experience.
• In-house market/customer insights andcustomer experience/happiness team tomonitor customer experience.
• Enhance AEON MEMBER Plus rewards
through corporate partnerships andmember incentives.
• Ongoing data enhancement of customer
though purchasing trend analysis.

• Internal threats, such as
employee misconduct/
negligence and poor facility
management, and external
threats, such as robbery, childkidnapping, fire, flood, etc.
• Business disruptions due toextreme weather conditions
as a result of climate change,
exacerbated by poor urban
development and planning.

• In-house and dedicated health and safety
team to audit stores and malls’ compliancewith AEON’s health, safety and security
requirements.
• Deployment of enhanced technologicalfeatures such as smart CCTVs to securemalls and their people.
• Assessment of threats, such as floods, tocultivate a localised approach in securing
our malls and their people; reviewing
emergency facilities to ensure ability tooperate during disruptions.
• Enhancing the business continuity
programme, which includes the emergency
response procedures and disaster recovery
plan, to minimise business disruptions forcustomers.

• Increasing focus on ESG
as companies emphasise
equitable and inclusive longterm value creation.
• Increasing demand fromsociety and investmentcommunity to understandhow companies are managing
its risks and opportunities
related to environmental,social, and governancecriteria.
• Increasing interest among
employees to understand andbe associated with a positive
work culture that values
sustainability and social
responsibility.

• Strengthen ESG governance with theestablishment of Sustainability and Risk
Management Committee (SRMC) tooversee and monitor the execution of
AEON's ESG strategies.
• Clear ESG policy and structure forassignment of responsibilities, priorities,
and commitments.
• Incorporated ESG KPI as part of AEON’s
corporate scorecard, strengthening thelink between ESG performance andmanagement remuneration.
• Develop a progressive plan that integrates
and embeds sustainability practices within
our business and corporate strategy.

43

Seeds ofTomorrow

Growing Responsibly Today for a Better Future04
CHAMPIONING Sustainability
44

AEON Sustainability Charter46	Stakeholder Engagement
49	Materials Matters
51	Risks and Opportunities
55

AEON Sustainability Performance

58	Fortifying Economic Performance68	Strengthening Environmental Accountability
76	Effecting Positive Social Change
86	Maintaining a Sound Governance Structure89	Sustainability Performance Data Table

44

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

AEON Sustainability Charter
AEON SUSTAINABILITY CHARTERAs the fundamental framework for AEON's commitment to sustainable practices, the AEON Sustainability Charter(ASC) provides a clear direction for AEON's sustainability efforts, identifying key areas of focus to guide the Company's
actions now and into the future.
aeon sustainability charter (ASC)

Partners

Suppliers
Sustainable Economics

Dynamic Customer ExperienceASC

Environmentally Focused

Responsible Employment

Efficiency & Integrity
Employees

Customers

The ASC comprises the following five core pillars, each aimed at addressing different facets of sustainability:
Sustainable Economics

Dynamic Customer Experience

AEON aims to build sustainable economies within
the communities we serve through our support for
intrapreneurship, entrepreneurship, and the growthof small and local businesses. Our initiatives aredesigned to foster self-sustaining economies,
guided by UN SDGs 4, 8, and 12.

Recognising the rapid pace of change in our customers’
needs, AEON focuses on delivering dynamic andexcellent customer experiences to stay agile andresponsive. This commitment is aligned with UN SDGs
8 and 12, aiming to cater to a broad range of customer
personas and drive organic growth.

Environmentally Focused

Responsible Employment

AEON is dedicated to fostering a sustainable worldalongside our customers and partners by aligning
our actions with UN SDGs 12, 13, and 15. Our
environmental initiatives focus on reducing ourfootprint and enhancing sustainability.

Valuing our workforce, AEON is committed to fostering
a diverse and inclusive workplace. We focus on
employee training and development, ensuring a safe
and thriving environment for all in alignment withUN SDGs 3, 8, and 10.

Efficiency & Integrity
AEON strives for operational efficiency and market leadership that is underpinned by a strong governance framework
to ensure organisational integrity. Our approach includes equipping our business partners and stakeholders with theknowledge to uphold these standards thus reflecting our commitment to UN SDGs 16 and 17.

CHAMPIONING Sustainability

45

AEON Sustainability Charter

Through these pillars, AEON integrates sustainability into our daily operations, striving to create long-term value forour stakeholders while contributing positively to global sustainability efforts.
To ensure the effective fulfilment of the objectives outlined in the ASC, we have developed and implemented the#AEONResponsible anchors. These anchors represent the six key focus areas through which AEON directs its
sustainability efforts to ensure comprehensive coverage of its ESG commitments.
Community
We will work towards
enhancing community andsocial practices with objectives
to foster, cultivate and empower
responsible lifestyle and living.

Ecosystem
We will build crossindustry and public-private
partnerships integrating
SMEs and Social
Enterprises that create winwin strategies to shape a
Green and Responsible
AEON Ecosystem.

Shopping
We want to catalyse customer
experiences, products, services
and innovative offerings alignedwith promoting 3R (Reduce, Reuse,
Recycle) and the Circular Economy.

#AEONResponsible

Development
We will promote and develop
sustained and efficient organicand inorganic development
as part of AEON‘s continued
expansion plan.
In summary, the 18 identified material matters are
strategically aligned with our Focus Areas, which are
intricately linked to the five foundational pillars of theASC. This structure ensures our comprehensive andcohesive approach to sustainability by emphasising
the interconnectedness of the Company’s various
sustainability initiatives and their collective contribution
to the overarching goals of the ASC.
Partnerships & Memberships
AEON emphasises collaboration and shared goals in its
sustainability efforts by aligning with global standards
like the GRI and UN SDGs and engaging with global
sustainability leaders on various platforms.
In FY2023, AEON played a pivotal role as one of the
Ministry of Natural Resources, Environment and Climate
Change’s (NRECC) elected panel advisors for Climate

Sourcing
We will activate end-toend integration of theGreen Supply, Value andEnergy chain into ourcore business towards
a green economy andsupply chain.

INVESTMENT
We want to utilise green technology andfinancing. We will explore investment intechnology such as AI and cloud-based solutions
to enable transparency and operational
efficiencies via new sources of green financing.
Change within the 'Trade and Industry' cluster. This
position enabled AEON to contribute at COP28 in Dubai,
where it shared valuable insights on the Circular Economy
and Greening the Value Chain. This in turn, strengthened
our positioning as an advocate for climate actions within
the Retail industry.
On the local front, AEON continues to engage with thegovernment and non-governmental entities, including
industry associations, particularly on topics relating tosolid waste management and the Circular Economy. To
this end, we also represented the Malaysian Retailers
Association (MRA) in national efforts to manage solid
waste. AEON also amplifies its sustainability impact
through peer sharing and collaborative efforts via its
memberships in the CEO Action Network (CAN) and theUnited Nations Global Compact Network Malaysia &Brunei (UNGCMYB).

46

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Stakeholder engagement
As one of Malaysia’s leading retailer and mall operator, our operations interest and impact a diverse group of
stakeholders. AEON views stakeholder engagement as an important part of our operations, enabling us to understandand obtain critical input needed to ensure our strategies, sustainability policies as well as programmes accuratelyreflect the interests of all stakeholders.
Regular and consistent dialogue, both formally and informally with our stakeholders, helps us better understandtheir expectations and perceptions. The feedback we receive from stakeholders informs our materiality analysis while
enabling us to explore areas for improvement to build relationships and strengthen trust to support long-term value
creation.
An overview of our key stakeholder groups, modes of engagement, matters discussed by the respective stakeholder
groups, and our response to these matters are detailed in the table below:

Stakeholder

Employees

Customers

Modes ofEngagement

Frequency ofEngagement

Matters Discussed by
Stakeholder• Onboarding
programmes• Morning assemblywith AEON People• AEON LeadershipCouncil meeting• Head of Division
and Department
meeting• Learning anddevelopment
programmes• Internal surveys• Messages throughemail and iAEON
app

Ongoing,Monthly,
Annually• Remuneration
structure• Employee benefits
and welfare• Learning and careerdevelopment
opportunities• Strategic direction
and business growth• Conducive working
environment• Health and safety
procedures at work
• Employment
equality• Opportunity tocontribute towards
sustainability
initiatives• Career development
opportunities• Employee benefits• OSH training andactivities• Learning anddevelopment
programmes• Job rotations• Employee
engagement
platforms• Employee
volunteering
opportunities• Store visits• myAEON2go app• AEON Members’Day• Website and social
media platforms• Customer service
counter• AEON Careline QR
Code• Newsletters via
email

Ongoing• Product pricing,quality and safety• Customer service,
engagement,
convenience,
comfort andsatisfaction• Privileges, benefits
and added value• Online shopping• Data privacy• Customer
engagement
activities• Timely response tocustomer feedback• Regular surveys of
Net Promoter Score(NPS) and customer
satisfaction• Innovative service
offering on
myAEON2go app• Reliable customer
service• Compliance with
Personal Data
Protection Act 2010(PDPA)

Our Responses

CHAMPIONING Sustainability

47

Stakeholder engagement

Stakeholder

Shareholders
and theInvestment
Community

Regulators andGovernmental
Authorities

Suppliers

Modes ofEngagement

Frequency ofEngagement

Matters Discussed by
Stakeholder• Annual General
Meeting• Integrated Annual
Reports• Results
announcements
and analyst
briefings• Company
announcements on
Bursa Malaysia• Conferences
and non-dealroadshows• Regular meetings
and teleconference
calls• Corporate website• Store visits

Ongoing,
Quarterly,
Annually• Business outlook
and strategic
direction• Operational
efficiencies• Cash utilisation anddividends• Governance andbusiness ethics• Returns toshareholders• Sustainablebusiness practices• Regular investor
engagements• Timely updates onmaterial businessdevelopments,
strategy andperformance• Engagement with
ESG rating agencies• Regular stakeholder
dialogue• Review of policies
and procedures• Regular
engagement withgovernment bodies• Store visits,
forums, meetings,
roundtables andbriefings• Corporate website

Ongoing• Direct and indirectcontributions to the
local economy• Growth andchallenges of thelocal retail industry• Compliance withlaws and legal
framework• Sustainablebusiness practices• Human Rights• Governance andBusiness Ethics• Uphold good
corporate
governance throughrobust policies suchas the AEON Codeof Conduct andAnti-Bribery andCorruption Policy toensure regulatorycompliance• Adhere to
responsible
and sustainable
practices to protect
stakeholders’interests• Clear procurement
and payment
policies and SOPs
• Whistleblowing
channel• Audits and site
visits• Joint-marketingcollaborations• Formal and social
events• Regular stakeholder
dialogue

Ongoing• Ethical businesspractices• Clear and concise
trading terms• Prompt and timely
payments• Strategic
partnerships• Product andpromotion support• Human Rights• Technology
and Digital
Transformation• Cybersecurity• Fair and transparent
dealing• Partner with
suppliers on shared
opportunities

Our Responses

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Stakeholder engagement

Stakeholder

Community

Media

Industry

Modes ofEngagement

Frequency ofEngagement

Matters Discussed by
Stakeholder• Malaysian AEONFoundation (MAF)
activities• Festive celebrations• Corporate Social
Responsibility(CSR) events andprogrammes• Job opportunity• Kiosk and/or
temporary space
set-ups at shoppingmalls

Ongoing• CSR programmes
and initiatives• Community support
and aid• Environmental
awareness andeducation• Business and job
opportunities• CSR engagements
and donations• Impactfulprogrammes andinitiatives• Media releases andconferences• Media interviews• Media collaborative
programmes• Online and offline
media campaigns• Editorial, advertorial
and branded
content

Ongoing• Product offerings
and launches• Businessperformance• Business milestones
and industry
updates• Sustainablebusiness practices• Perception
management
and crisis
communication• Regular media
engagements• Announcements onmaterial businessdevelopments,
strategy andperformance• Meetings/forums/
roundtables with
Malaysia Retailers
Association (MRA)
and industry
players• Regular stakeholder
dialogue• Formal and social
eventsOngoing• Industry outlook andissues• Retail sales trends• Government policies• Mutual interest
issues• Regular stakeholder
engagements• Partner with
suppliers on shared
opportunities• Adhere to
responsible
and sustainable
practices to protect
stakeholders’interest

Our Responses

CHAMPIONING Sustainability

49

Material Matters
In the year under review, the Company conducted a materiality revalidation exercise to assess and prioritise issues
which are significant to AEON and its related stakeholders. The issues we identified were selected based on our current
priorities and strategies, as well as our stakeholders’ concerns and material risks, which are all essential factors in thecontext of value creation. This materiality validation was conducted as per the following four-step approach:
MATERIALITY ASSESSMENT PROCESS

Step
1
Review &Identification

Stakeholder
Engagement
Step2

1.	Review & Identification
For FY2023, the Company refined its sustainability
focus, updating its material matters to reflect thelatest business environment and relevant changes.
This led to our identification of 18 key sustainability
areas, expanding from 12 in FY2022. The expansion
mainlyinvolved
segmenting
Environmental
Stewardship into specific categories like 'Climate
Change', 'Energy Efficiency', 'Water Efficiency','Waste Management', and 'Preserving Biodiversity'emphasising the significance of addressing these
individual
environmental
issues. Additionally,'Training & Development' and 'Business Innovation'
were added under the Social and Economic pillars,
respectively.
2. Stakeholder Engagement
AEON is committed to ensuring that our value
creation strategies take into account the perspectivesof our stakeholders. To this end, we conducted bothformal and informal dialogues with our stakeholders
to help us better understand their expectations
and perceptions. This engagement process plays acritical role in shaping our materiality analysis, as the
feedback received from stakeholders not only informs
our priorities but also highlights opportunities for
improvement. By actively listening and responding
to our stakeholders’ feedback, we aim to enhance ourrelationships and foster trust, thereby supporting thecreation of long-term value for all parties involved.
3. Prioritisation of Material Matters
We have identified five key material matters byassessing their impact on the Company and theirimportance to stakeholders. This prioritisation
ensures AEON focuses on areas most critical to bothits operational success and stakeholder interests.

Step
3

Prioritisation ofMaterial Matters

Positioning &Validation
Step
4

4. Positioning & Validation
Throughout 2023, we refined our materiality matrix tobetter reflect the current concerns of both our internaland external stakeholders. Our review process
involved comparing our material issues against
recognised standards and frameworks, such as Global
Reporting Initiative (GRI) Standards and FTSE4Good
Bursa Malaysia Index, to identify any discrepancies
and emergent sustainability challenges.
The results of the assessment revealed that the topics
of 'Supply Chain Management' and 'Product Quality,
Assurance and Safety' continue to be high-priority
areas, particularly valued by our business partners,
customers, and consumers. These areas also offer
significant opportunities for AEON to generate apositive impact.
Furthermore, 'Labour Practices' has increased inimportance among our stakeholders, thereby raising
its impact potential on our business operations.
Additionally, we have recognised 'Energy Efficiency'
and 'Waste Management' as critical issues due to theirassociated risks and opportunities for AEON.
During the year, the Sustainability Steering
Committee (SSC) also deliberated on our material
sustainability matters based on their impact on the
Company. This comprehensive assessment was thensubmitted to the Sustainability and Risk Management
Committee (SRMC) and the Board for approval of thesustainability disclosures in this IAR 2023.
Moving forward, AEON is committed to staying
abreast of sustainability trends and will conduct
an annual review of our material matters to ensure
our sustainability efforts remain aligned with bothbusiness objectives and stakeholder expectations.

50

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Material Matters

High

MM4

MM17

MM1

MM14

MM8

MM3

MM10

MM13

MM7

MM9

MM11

MM5

MM6

Mid

MM2

MM16

MM12

Low

IMPORTANCE TO STAKEHOLDERS

MM18
MM15

Low

Mid

High

SIGNIFICANCE OF IMPACT TO AEON
Material Matters
MM1

Product Quality,
Assurance & Safety

MM7

Climate Change 

MM13Labour Practices

MM2

Supporting SMEs

MM8

Energy Efficiency 

MM14

Health, Safety & Well-being

MM3

Supply Chain
Management

MM9

Water Efficiency 

MM15Training & Development 

MM4

Customer RelationshipManagement

MM10

Waste Management 

MM16Community, Contribution,
Support & Engagement

MM5

Digitalisation

MM11

Preserving Biodiversity 

MM17

Governance, Ethics &Integrity

MM6

Business Innovation 

MM12Diversity & Equity

MM18

Data Governance & Security

Economic

Environmental
Prioritised Matters

Social

New Material Matters Identified in FY2023

GovernanceCHAMPIONING Sustainability

51

risks and opportunities
The AEON Enterprise Risk Management (ERM) framework takes a comprehensive approach to addressing risks byincluding sustainability and climate-related risks in addition to our corporate, financial and operational risks. Throughongoing revisions and monitoring by specific risk owners and the Governance and Integrity department, AEON ensuresrisks are managed within acceptable limits. This process is governed by the Sustainability and Risk Management
Committee (SRMC).
Our Material Matters &Why They Matter?

Risks

Opportunities

Product Quality, Assurance &Safety• To uphold the trust of
consumers and provide
peace of mind duringconsumption• Potential backlash fromconsumers following incidents
related to food safety and quality• Enhances AEON’s reputation asa brand that delivers safe andhigh-quality products

Supporting SMEs
• To contribute to broader
economic development, job
creation and social wellbeing in order to create
economic resilience• Overdependence on large
suppliers may lead to supply
chain vulnerability especiallyduring events such as natural
disasters and/or geopoliticaltension• Promotes local products andservices while positioning
AEON for growth andsustainability in a dynamic
business environment• Enhances supply resilience

Supply Chain Management• To develop sustainablesupply chain practices inorder to uphold the trustof consumers who arebecoming increasingly
conscious of thesustainability of the products• Suppliers’ non-compliancewith AEON’s Suppliers Code of
Conduct and ethical practices
may inhibit the Company’s ability
to build a sustainable supply
chain and increase costs• Regular supplier assessment
including environmental andsocial assessment improves
public perception of AEON as asustainable company

Customer RelationshipManagement• To be able to connect
and meet the needs ofour customers to build
long-lasting relationships
and stay competitive in a
dynamic marketplace• Inability to meet customers’
expectations impacts customers’confidence and loyalty• Regular customer
engagements facilitatecontinuous improvement
to meet our customers’
expectations

Digitalisation• To enhance operational
efficiency, customer
engagement andadaptability in an
increasingly technologydriven marketplace• Potential loss of competitivenessand market relevance• Improves operational efficiency
while enhancing customer
experience

Business Innovation• To foster growth throughinnovation to cater to theevolving needs of our wide
range of customers• Costly investments in
new ventures and productdevelopment• Maintains AEON’s brandrelevance among customers

ECONOMIC
MM1

MM2

MM3

MM4

MM5

MM6

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

RISKS and opportunities

Our Material Matters &Why They Matter?

Risks

Opportunities• Inability to manage the transition
to low-carbon processes may
cause physical assets damage,financial loss and businessdisruption• Effective mitigation andadaptation strategy ensuresbusiness continuity andcultivates the trust of our
stakeholders in AEON as acompany taking action against
climate change
Mid-term (5-10 years) 2030
• Adoption of renewable energy
sources• Shift towards sustainable value
chain

ENVIRONMENTAL
MM7

Climate Change• AEON recognises that  climate change poses bothrisks and opportunities• To ensure measures aretaken to adapt the businessto a changing climate andtransition to a low-carbon
economy due to the longterm threats of climatechange such as global supply
chain disruptions
and natural disasters

Mid-term (5-10 years) 2030
Physical Risks• Flash flood and rising sea levels
can pose a threat to retail locations• Shift in temperature patterns canaffect customer behaviour andchange seasonal demand
Transition Risks• Climate-related policies,
regulations, Green Electricity
Tariff (GET) and carbon pricing
mechanisms may affect retail
operations, product sourcing, andtransportation• Customer preferences andincreasing demand for sustainableproducts can change the way
markets work
Long-term (over 10 years) 2050
Physical Risks• Extreme weather events candamage retail infrastructure,
assets and disrupt supply chains• Ecosystem disruptions andbiodiversity loss can have a longterm impact on supply chains

Long-term (over 10 years) 2050
• Leverage latest green
technology to lower our carbon
footprint

Transition Risks• Increased expectations from
customers and stakeholders• As manufacturers and suppliers
adapt to climate change, supply
chain disruptions and increased
costs may occur, impacting
Aeon’s operations and productavailability
MM8

Energy Efficiency• To ensure measures aretaken to reduce energy
consumption as it is asignificant source of GHG
emissions and contributes toclimate change• Increased operational costs andlack of compliance among ourbusiness partners may inhibit
our ability to reduce energy
consumption throughout the value
chain• Leverage latest green
technology to lower our carbon
footprint

CHAMPIONING Sustainability

53

RISKS and opportunities

Our Material Matters &Why They Matter?

Risks

Opportunities

Water Efficiency• To track and monitor ourwater consumption forsustainable water practices
as water is essential tothe health and well-beingof communities and ourbusiness operations• Poor water management leads tohigher costs and slow adaptionof business operations to moresustainable water practices• Efficient water management
may reduce operational costs
and promote water conservation
behaviour

Waste Management• To ensure proper waste
management practices toprotect our environment for
the future• Non-compliance withenvironmental regulations may
result in consequences from
authorities and activists• Increased capex to adopt
infrastructure necessary toenhance waste management• Waste reduction and increased
resource efficiency may reduce
operational cost

Preserving Biodiversity• To protect our ecosystem inwhich our business operates
to help preserve our natural
resources• Challenges in meetingsustainability regulations• Improves public perception of
AEON as a sustainable company• Opportunities to develop new
partnerships with NGOs andrelevant government agencies

Diversity & Equity• To promote a diverse andinclusive workplace as
AEON People are our driving
force and an inclusive
working environment willallow them to contribute
more effectively to thesuccess of the business• Discriminatory employment
practices may damage AEON’s
reputation• Lack of diversity and inclusion
may impact business decisionand strategy• Helps to improve morale andproductivity among employees
and contribute towards
improved employee retention

Labour Practices• To respect and protect therights of our employees toensure no human rights
violations occur within ourorganisation or within ourvalue chain• Unattractive benefits andremuneration may affect
employees’ motivation• Attractive benefits packages
enable us to retain and attract
top-quality industry talent aswell as contribute to a highperformance culture• Enhances the reputation of
AEON as a brand that protects
people and communities

Health, Safety & Well-being• To provide a healthy
working environment for
AEON People and empower
them to choose a healthierlifestyle as our employees’
health and safety are key
priorities for us• Accidents and injuries in
the workplace may lead to
productivity loss and legal
repercussions such as penalties
and reputational damage• A strong safety culture
with a conducive working
environment improves
employee’s well-being andproductivity• Contributes towards improved
employee retention

ENVIRONMENTAL
MM9

MM10

MM11

SOCIAL
MM12

MM13

MM14

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

RISKS and opportunities

Our Material Matters &Why They Matter?

Risks

Opportunities

Training & Development• To support our employees
to drive their own careers
by providing opportunities
for growth and equip themwith the skills to performtheir responsibilities andcontribute to the success ofthe business• Disengaged and underdeveloped
employees contribute to lower
productivity and performance• Effective talent development
and upskilling programmes
enable us to retain and attract
top-quality industry talent aswell as contribute to a highperformance culture

Community Contributions,Support & Engagement• To create positive social
impacts for the communities
in which we operate toenhance their quality of lifeand livelihoods• Increased cost and challenges
in scaling up programmes toachieve more impactful results• Regular engagements
through community impact
programmes strengthen
our relationship with local
communities

Governance, Ethics & Integrity• To establish a cultureof integrity and robust
governance for successful
business operations
and uphold trust of our
stakeholders and investors• Lack of integrity and poor
governance practices may lead tocorruption and mismanagement
which will ultimately tarnish
AEON’s reputation and image• Effective governance practices
enhance AEON’s reputation asa trustworthy company among
stakeholders and investors

Data Governance & Security• To prevent breaches ofcustomer privacy and lossesof customer data as this willprotect our customers andenable them to continue
trusting us with their data

• Cyber threats including breachof customers’ data may leadto loss of customer trust andreputational harm

• Robust cybersecurity andimproved data management
protect critical customer
data and maintain AEON’s
reputation as a trustworthy
organisation

SOCIAL
MM15

MM16

GOVERNANCE
MM17

MM18

CHAMPIONING Sustainability

55

AEON SUSTAINABILITY PERFORMANCETARGETS AND PERFORMANCE
During the year, we established specific EESG performance targets aimed at driving our sustainability efforts forwardin the upcoming years. These targets are aligned with our prioritised material matters, ensuring that our sustainability
initiatives are focused on areas of utmost importance. By setting these aspirations and targets, we aim to enhance
AEON's sustainability performance across our operations and to strengthen our capability to create long-term value
for our stakeholders.
The following table defines the Company’s aspirations and targets as well as our performance in FY2023:
Aeon Sustainability
Charter

Focus
Area

SUSTAINABLE
ECONOMICS

Fostering
Sustainable
Business
Partnership

DYNAMICCUSTOMER
EXPERIENCE

Enhancing
Product Quality

Enhancing
Customer
Loyalty &Experience
Improving
AEON'sAgility to Meet
Customer
Needs
ENVIRONMENTALLY
FOCUSED

Reducing
CarbonFootprint

Material
Matters
MM2

MM3

MM1

MM4

Aspiration & Targets

Fy2023 Performance• Empower micro andsmall businesses forsustainable economic
development.
• Integrate ethicalsourcing practices
throughout our supply
chain.

• 99% proportion of spendingon local suppliers.
• Achieved total sales from
SMEs and MSMEs of
RM6.4 million.
(2022 : RM4.5 million)• Prioritise the safety
and well-being of
our customers bydelivering high-quality
products.

• Achieved HACCP, Halal and
BeSS certification.

• Achieve Net Promoter
Score (NPS) of
average +70.

• Achieved NPS of +75 in
2023 (2022 : +75).

Refer to pages 60 to 61 formore information.

Refer to page 62 for more
information.

Refer to page 66 for more
information.
MM4

MM5

MM6

• Increase utilisation
rate of Self-Checkout
Counters (SCOs) to
40% by 2025.

• Achieved SCO utilisation at
28% in 2023.
(2022 : 10%)
Refer to page 67 for more
information.

MM7

MM8

• Carbon neutral by2040.

• Achieved emission intensity
reduction by 51% in 2023
compared to base year 2019.
Refer to pages 68 to 69 formore information.

Improving
EnergyEfficiency

MM7

MM8

• Reduce 30%
of electricity
consumption
compared to baseyear 2019 by 2030.

• Reduced 6% electricity
consumption in 2023
compared to base year 2019.
Refer to page 70 for more
information.

56

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

AEON SUSTAINABILITY PERFORMANCE

Aeon Sustainability
Charter

Focus
Area

ENVIRONMENTALLY
FOCUSED (CONT'D)

Minimising
Water
Consumption

Material
Matters
MM9

Aspiration & Targets

Fy2023 Performance• Reduce 15% ofwater consumption
compared to baseyear 2019 by 2030.

• Reduced 6% water
consumption in 2023
compared to base year 2019.
Refer to page 71 for more
information.

Reducing Waste

MM10• Increase recycling rate
to 15% by 2030.

• Recycling rate in 2023 is at
11%.
(2022 : 10%)
Refer to pages 72 to 74 formore information.

Enhancing
Biodiversity
Conservation

MM11• Protect biodiversity
to minimise ourenvironmental
footprint.

• Completed planting 12,000
trees through MalaysiaJapan Friendship Forest in
Bidor, Perak.
Refer to page 75 for more
information.

RESPONSIBLE
EMPLOYMENT

PromotingDiversity &Inclusivity

Respecting
Human &
Labour Rights

MM12

MM13

• Maintain at least 30%
women representationon the Board of
Directors.
• Maintain total ratioof women withleadership position at
50%.
• Increase Person With
Disabilities (PWD)
hiring of 2% by 2025.

• Achieved 40% women
representation on the Boardof Directors.
• 58% of leadership roles
are held by women atmanagement level in 2023.
• Achieved PWD hiring of
2.1% or 184 staff in 2023.
(2022 : 1.3% or 123 staff)• Nurture a workplacethat values fairness
and employee wellbeing.

• Zero complaints on humanrights violation in 2023.
(2022 : 2 cases)

Refer to pages 76 to 78 formore information.

Refer to page 79 for more
information.
Enhancing
Health, Safety& Well-being

MM14• Zero fatalities at ouroperations.

• Zero fatality recorded in
2023.
(2022 : 1 case)• Lost  Time Injury Rate (LTIR)of 1.23 recorded in 2023.
(2022 : LTIR 1.18)
Refer to page 80 for more
information.

CHAMPIONING Sustainability

57

AEON SUSTAINABILITY PERFORMANCE

Aeon Sustainability
Charter

Focus
Area

RESPONSIBLE
EMPLOYMENT(CONT'D)

Empowering
Employee
Learning &Development

Material
Matters
MM15

Aspiration & Targets

Fy2023 Performance• Foster continuous
learning andprofessional growth.

• Achieved average training
hours per employee of 29
hours.
(2022 : 16 hours)
Refer to pages 82 to 83 formore information.

SUSTAINABLE
ECONOMICS

EFFICIENCY &INTEGRITY

Community
Engagement &Development

PromotingIntegrity &Anti-Corruption

MM16

MM17

• Strive to makemeaningful
contributions that
positively impact thecommunity.

• Community investment of
RM1.1 million.
(2022 : RM1 million)• Maintain zero cases
related to bribery andcorruption.

• Achieved zero bribery andcorruption cases for the last
three years.

Refer to pages 83 to 85 formore information.

Refer to pages 86 to 87 formore information.
Improving Data
Disclosure &Transparency

MM18• Improve disclosure
practices for ongoingtransparency andaccountability.

• Achieved zero complaints
concerning breaches incustomer privacy for the last
three years.
Refer to page 87 for more
information.

Embedding
RiskManagement in
Our Operations

MM17• To achieve ISO 37001
Certification in 2024.

• 100% of AEON operations
underwent Enterprise Risk
Management (ERM).
Refer to page 88 for more
information.

In 2024, we will continue to review our approach to sustainability, including establishing a roadmap to achieve AEON's
overall sustainability vision.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

FORTIFYING ECONOMICPERFORMANCE
AEON's robust financial performance is pivotal for thecreation of long-term value and business sustainability,
providing a resilient foundation to navigate dynamic
market conditions. Beyond economic contributions,
AEON acknowledges its role as one of the largest
retailers in Malaysia by actively engaging in the creationof employment opportunities and community building
initiatives. Furthermore, as part of its vision to creating
smiles and connecting hearts for customers, AEON
integrates sustainable practices to enhance operational
resilience over the long-term. This multifaceted
approach underscores AEON's dedication to fostering
positive societal impact, ensuring economic growth,and strengthening its position as a responsible andsustainable business.

Sustainable Economics
Dynamic Customer Experience
To ensure and uphold strong economic performance,
AEON adheres to a strategic business approach, guided
by staying abreast of market trends, maintaining arobust balance sheet, and cultivating strong financial
foundations. The commitment to digitalisation is integral
to our strategy, allowing us to adapt to evolving market
landscapes and meet the changing preferences ofour customers. Concurrently, AEON remains vigilant
in identifying and mitigating risks pertinent to ourbusiness operations, thereby fortifying our resilience andsustaining a trajectory of success.
Our Value Creation Model is explained in detail on pages
32 to 33 of this IAR. AEON’s economic performance depends
upon six capitals – Financial, Manufactured, Intellectual,
Human, Social and Natural. Our sustainability initiatives
support AEON’s abilities to create financial values.

Economic PerformanceGRI 201-1

MM6

In 2023, AEON recorded a total revenue of RM 4.1 billion, with majority of 84% derived from our Retail segment. AEON
continuously generates wealth for our stakeholders, as shown in the table below:
Economic Value Generated

Economic Value Distributed

RM4,178m

RM4,174m

RM4,178m

RM4,174m

RM37m

RM45m

RM51m

RM48m

RM1m
RM56m
RM100m

RM390m

RM395m

RM115m

RM106m

RM4,141m

RM4,129m

RM3,465m

RM3,489m

2022

2023

2022

2023

Operating Revenue

Other Income

RM1m
RM56m
RM79m

Business Operations

Staff Costs

Finance Costs

Taxes

Dividends

Community Investment

Economic Value Retained
The financial results presented in the table are derived from the audited financial statements, which are available in our
IAR 2023 on pages 140 to 193.

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59

FORTIFYING ECONOMIC PERFORMANCEFOSTERING SUSTAINABLE BUSINESSPARTNERSHIPS

MM2

MM3

GRI 2-6, 204-1, 414-1
Commitment:• Empower micro and small businesses for sustainable economic development.
• Integrate ethical sourcing practices throughout our supply chain.
Supply Chain Management
With over 1.3 million SKUs distributed across all stores, AEON recognises the importance of implementing a sustainablesupply chain management system. This not only supports our commitment to responsible sourcing but also helps in
reducing our carbon footprint while ensuring the sustainability of our operations.
AEON's commitment to effective and ethical operations is underscored by a set of policies governing our supply chain
management. At the core of these principles is the AEON Supplier Code of Conduct (CoC), a guiding framework thatmandates various critical aspects. The AEON Supplier CoC stipulates that the employment of workers within our supply
chain must be appropriate, emphasising fair labour practices and conditions. This includes ensuring that workers aretreated with respect, provided fair wages, and are subject to reasonable working hours. The AEON Supplier CoC alsoprioritises the creation of safe working environments for all individuals involved in our supply chain. This encompasses
measures to safeguard their physical well-being, mental health, and overall workplace safety.
Lastly, compliance with laws and regulations at production bases is a fundamental requirement outlined in the
AEON Supplier CoC. This involves adherence to local and international legal standards, including but not limited toenvironmental laws, responsible material use, and measures for pollution prevention. We currently require suppliers of
TOPVALU to comply with the AEON Supplier CoC, and we improve issues through supplier audits. Please refer to page
63 on AEON’s Contract Manufacturer Auditing under the 'Enhance Product Quality' section.
The AEON Supplier CoC can be viewed at https://www.aeon.info/en/sustainability/social/coc/ and the document ismade available in 18 languages

In addition to the AEON Supplier CoC, our Company relies on the following policies to guide our efforts to source
materials and produce products in a responsible and ethical manner:••

AEON Responsible Sourcing Policies
AEON Animal Health and Welfare Policy
These policies can be viewed at https://aeongroupmalaysia.com/sustainability-policies/

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

FORTIFYING ECONOMIC PERFORMANCE

Our Initiatives in 2023

SUPPORTING SME

1.

Supporting SMEs in retail is crucial for sustainability as
it stimulates local economies, cultivates job creation,
promotes diversity and innovation and enhances
supply chain resilience. By empowering SMEs, retailers
contribute to building more resilient and sustainablecommunities while driving positive economic, social,and environmental impacts, especially during economic
downturns or crises.

Products Using Responsible Materials under the
TOPVALU brand
The Forest Stewardship Council (FSC) certifies wood
products and paper manufactured with timber fromproperly managed sustainable forests. In 2023,
our private brand, TOPVALU converted all its paper
products to FSC Certified material.

Our approach includes supporting local businesses andfostering economic growth in the communities where
we operate. We do this by mainly sourcing from local
suppliers, as this not only supports the local economy
but also helps in reducing our carbon footprint. Throughinitiatives like the Ramadan Bazaar and Festival Tamu
Sabah, we have been aiding SMEs and Micro SMEs
(MSMEs) in overcoming financial challenges andpromoting their development.

2.

Cultivating a Sustainable Supply Chain for Smalland Medium Enterprises (SMEs)
Continuing with this focus, we have been actively
supporting SMEs to build sustainable ecosystems
and promote inclusivity. In 2023, we introduced
a training programme, organised by the United
Nations Global Compact Network Malaysia & Brunei(UNGCMYB), aimed at enhancing sustainable supply
chain practices. This programme was particularly
geared towards SMEs, equipping them with thenecessary knowledge to align with our sustainability
goals. Launched during AEON Forward event, thisinitiative was a highlight of our interactions with our
suppliers during the year.
Moving forward, our vision is to expand the scopeof our sustainable supply chain management. This
includes our plan to enhance our training modules
to encompass critical elements of environmental
management, such as strategies for measuring andminimising carbon emissions. To align with thisvision, we will initiate sustainability assessmentsfor our suppliers. Our aim is to ensure that every
one of our suppliers, both existing and new, meets
our sustainability standards. This step marks asignificant stride towards integrating comprehensive
environmental considerations into our supply chain,
underscoring our commitment to a sustainable andenvironmentally conscious business model.

Furthermore, our commitment to local SMEs, particularly
MSMEs, extends to our collaboration with various
ministries and government agencies. These partnerships
provide a platform for MSMEs to showcase theirproducts across AEON's nationwide outlets and ouronline platforms, fostering greater visibility and growth
opportunities for these local businesses.
Our Initiatives in 2023
1.	Empowering SMEs and MSMEs
AEON takes pride in its commitment to empowering
MSMEs by offering them prime shelf space in our
supermarkets to showcase and sell their products.
This strategic partnership not only provides SMEs
and MSMEs with the opportunity to collaborate witha renowned brand like AEON but also encourages
buyers to actively support local products.
Number

2021

SMEs

23

33

41

MSMEs

9

27

32

4.0

4.5

6.4

Total sales (RM mil)

2022

2023

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FORTIFYING ECONOMIC PERFORMANCE

2.

Multi-stakeholder Collaborations
In support of local SMEs and MSMEs, we alsocollaborated with various ministries and government
agencies to provide a platform for local SMEs and
MSMEs to promote their products.
Karnival Jualan Agro Madani/Jualan Terus Dari
Ladang (JDTL)
Karnival Jualan Agro Madani represents a rebranding
effort of the Jualan Terus Dari Ladang (JTDL)
programme initiated by the Ministry of Agriculture
and Food Security. This collaborative effort saw
several AEON Malls hosting the event, facilitating
direct sales of agricultural produce from farmers
to consumers. By eliminating intermediaries, theinitiative aimed to lower costs for both farmers andconsumers while ensuring access to fresh, highquality produce.

AEON Malls
involved:

Entrepreneurs
supported:Total
sales:

2

66

RM575,268

Ramadan Bazaar
In celebration of the fasting season, selected AEONStores held the AEON indoor Ramadan Bazaar
which offered shoppers a variety of food, beverages,
clothing, accessories, and essential Raya preparation
items. By hosting the bazaar indoors, both sellers
and customers benefitted from a comfortable andcontrolled environment, allowing for an enjoyable
shopping experience without worrying about weather
conditions.

AEON Malls
involved:

Entrepreneurs
supported:Total
sales:

5

99

RM820,000

Festival Tamu Sabah
In collaboration with the Sabah State Government
and the Department of Industrial Development andResearch (DIDR) Sabah, we hosted the Festival Tamu
Sabah at AEON Mall Shah Alam. This event provided
a valuable platform for entrepreneurs from Sabah to
showcase their products to a wider audience.

Sabah entrepreneurs supported:

Total sales:

30

RM340,000

Karnival Usahawan myAgropreneur Perikanan(myAP) dan myKomuniti Perikanan (myKP)
AEON partnered with the Department of Fisheries
Malaysia to organise the Karnival Usahawan MyAP
dan MyKP. Held in AEON Mall Shah Alam for threedays, the event aimed to help local entrepreneurs in
the fisheries sector by providing them with a platform
to showcase their products to visitors. The event also
served to connect the entrepreneurs with potential
agents, distributors, and stockists through Business
Matching. The carnival is part of a nationwide
roadshow by the Department of Fisheries Malaysia to
showcase aquaculture and fish-based products.

Entrepreneurs supported:

Total sales:

13

RM54,280

Performance
In 2023, a total of RM3.4 billion was spent on procurement, out of which 99% was spent on local suppliers.
No. of Suppliers

2021

2022

2023

Local Suppliers

1,886

2,404

2,597

Foreign Suppliers

n/a

65

96

62

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

FORTIFYING ECONOMIC PERFORMANCEENHANCING product quality
GRI 416-1, 417-1

MM1Commitment:• Prioritise the safety and well-being of our customers by delivering high-quality products.
Enhancing product quality, assurance and safety is crucialfor AEON as it directly affects customer satisfaction, brandreputation and product longevity. By emphasising quality
across the supply chain, the Company can cultivate
customer loyalty, enhance AEON brand equity, prolong
product lifespans, and uphold environmental and ethicalstandards.

1.

In upholding our HACCP Certification, we continue
to conduct regular internal and external audits inour stores to ensure our ongoing adherence to thestandard requirements of food safety and consumer
needs. Our undertakings in this area are guided bystandards such as the Good Manufacturing Practice(GMP) and Food Safety Critical Control Points. In
2023, all AEON Stores are HACCP-certified.

Our commitment involves enhancing the reputationof AEON brands by ensuring compliance with legal
standards, increasing customer satisfaction, andestablishing ourselves as market leaders. We achieve
this by strictly adhering to safety and quality standards,
making well-informed decisions and advocating for
responsible marketing and advertising practices.
Adhering to Safety and Quality Standards
Our Initiatives in 2023
We have taken proactive steps to align our products andservices with global regulatory standards and industry
best practices. Notably, we have achieved the Hazard
Analysis and Critical Control Point (HACCP) Certification,
distinguishing us as the sole supermarket in Malaysia tohold this certification since 2008. Our voluntary pursuitof the HACCP certification underscores our strong
commitment to food safety.
In the domestic context, our operations adhere to the Food
Act 1983 and the Halal Assurance Management System,as mandated by the Department of Islamic Development
Malaysia (JAKIM). Within AEON, we are guided by a setof specific policies:•••

AEON Food Safety and Quality Policy
AEON Food Safety and Hygiene Policy
AEON Halal Policy
The policies above can be viewed on our website athttps://aeongroupmalaysia.com/sustainability policies/

The following section summarises the various
certifications that AEON currently holds and the various
initiatives we implemented to ensure that we continue tomaintain these accreditations:

HACCP Certification

33*

AEON Stores certified in 2023*

2.

AEON Putrajaya Store is in process of getting certified in 2024

Halal Certification
Since its implementation in 2010, AEON’s Halal
Policy has been deeply ingrained in the Company’s
daily operations. Our efforts extended to reinforcing
AEON’s Halal Assurance Scheme by strictly following
the Halal Policy aligned with JAKIM’s guidelines.
We also ensured that our suppliers met these Halal
standards, thereby strengthening our supply chain
and upholding our commitment to ethical businesspractices. Halal audits are conducted internally by the
Quality Management Department twice a year for all
AEON Stores. We conduct Halal awareness training
programmes for internal and external employees
where all our outlets will have at least one Halal
executive.
In 2023, the Company conducted Halal internal audits
in all AEON Stores to confirm adherence to Halal
standards. Additionally, we held training sessions andmeetings to ensure our team was well-versed in Halalcertification requirements. In 2023, we obtained Halalcertification for six more outlets due to the increasein the number of outlets at our new AEON Putrajaya
store.

130 certified Halal(2021: 103 | 2022: 124)

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FORTIFYING ECONOMIC PERFORMANCE

3.	Ensuring Excellence in the AEON TOPVALU Range
To ensure product safety and quality, AEON mandates that suppliers producing and manufacturing under the
TOPVALU brand undergo the AEON Factory Audit for Food and Non-Food Products. Additionally, these suppliers are
required to strictly adhere to and be audited against the AEON Supplier CoC Standard which aligns with businessvalues.
These evaluations are crucial to ensure our suppliers continue to meet our stringent quality standards, ethicalguidelines, and policies. Factory audits on Food Safety Management System (FSMS) and Quality Management
System (QMS) are conducted on a yearly basis. Whereas, an audit on the AEON Supplier CoC is conducted every two
years in compliance with the local regulations and requirements on Labour Practices, Environmental Management
System (EMS) and Occupational Safety and Health Management System (OSHMS).
In 2023, we conducted the following audits:
Audit Type

Number of Audits Conducted

Factory Audit

67

AEON Supplier CoC Audit

52

For more information on the AEON Supplier CoC, please refer to the Aeon Supplier CoC at
https://www.aeon.info/en/sustainability/social/coc/

Orientation and Declaration of Compliance

Second-Party Audit• Targets: All domestics and overseas factories• Audit and assessment: AEON-certified auditors
Confirmation of Corrective Action
Step 1
Submit corrective
action reports via
suppliers

Step 2
Assess and confirm at
the AEON Supplier CoC
secretariat

Emphasis on communication

First-Party Audit• Targets: Factories receiving superior
assessments in second-party audits• Confirmation and assessments: Suppliers andfactories• Method: Suppliers check factories based on achecklist provided by AEON. Correct findings if
there is non-conformity and submit their reports
to the AEON Supplier CoC secretariat
Independent management

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

FORTIFYING ECONOMIC PERFORMANCE

Encouraging INFORMED DECISION-MAKINGAt AEON, we hold a strong conviction that consumers
should have access to precise and impartial information
about the products and services they purchase. Thistransparency empowers them to make choices that alignwith their needs and preferences, and safeguards themagainst unfair or deceptive practices by businesses.
To reinforce this belief, we established the AEON
Customer Responsibility Policy, outlining the principles,
commitment and guidance on AEON’s position withregard to consumer rights.
The AEON Customer Responsibility Policy can beviewed at https://aeongroupmalaysia.com/sustainability
policies/

Our Initiatives in 2023
1.	Nutrition Information
AEON acknowledges the rich diversity of ourcustomers and is committed to being transparent.
In the nutrition space, we focus on clear labelling of
our food products, providing detailed information oncontent, nutritional fact, calories and allergens. This
helps to empower our customers to make informed
decisions about their food choices and to safeguard
against potential health risks.

2.	Responsible Marketing and Advertising
We engage in marketing and advertising activities
with a strong emphasis on ethical and responsible
practices. Our commitment involves delivering
accurate and balanced information about our brands
and products, aiming to build trust with consumers.
In keeping with our commitment to empowering
customers to make informed decisions, AEON
adheres strictly to Regulation 361 of the Food
Regulation 1985. In accordance with this, we ensurethat all alcoholic beverages are labelled accurately,
including specific details about the alcohol content
of the beverage and health warning statements.
This practice is part of our dedication to providing
essential information that supports our customers'
informed choices.
In FY2023, we maintained a steadfast commitment tocompliance across our product information, labelling,
and marketing communications endeavours. We arepleased to report that, to the best of our knowledge,
there were no instances of non-compliance withregulations or voluntary codes, resulting in fines,
penalties, or warnings. Furthermore, in 2023, werecorded zero reports of non-compliance concerningmarketing communications, as well as product andservice information and labelling guidelines.

In ensuring full compliance with product labelling
regulations, AEON meticulously adheres to
a comprehensive set of guidelines across all
product categories. These guidelines encompass
various aspects, including the sourcing of productcomponents, ensuring the safe use of the product orservice, disclosing content (particularly substanceswith potential environmental or social impacts)
and addressing disposal considerations alongwith associated environmental or social impacts.
Additionally, other critical elements such as theinclusion of HACCP, and providing nutritional
information are also diligently observed. In 2023, we
displayed nutrition information on most of our readyto-eat food line products.

AMARANMENJUAL MINUMAN
BERALKOHOL/ARAK KEPADA
ORANG DI BAWAH UMUR DUA
PULUH SATU TAHUN ADALAH
DILARANGCHAMPIONING Sustainability

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FORTIFYING ECONOMIC PERFORMANCE

Active Engagement with Stakeholders

YOU ARE WHAT YOU EAT: COLOURS OF LIFE 2023 CAMPAIGN

To ensure the safety and quality of our products
throughout their lifecycle, we actively engage withstakeholders, including government bodies andregulators, particularly the Ministry of Health (MOH).
In 2022, AEON was appointed by the MOH as one of
the Nutri Hub Supermarkets, tasked with advocating
for nutrition at the supermarket level. To uphold
this commitment in 2023, AEON launched the 'You
Are What You Eat: Colours of Life 2023' campaign
in November at AEON Shah Alam. This initiative
responds to concerning statistics from the National
Health and Morbidity Survey 2019, revealing that 95%
of Malaysians do not consume enough vegetables,
contributing to health risks such as fatty liver disease,heart disease, and kidney disease. The campaign
promotes nutrition awareness through colourful andbalanced diet displays in the Produce section thatare endorsed by the MOH. Supported by agencies
like FAMA, FFM, UPM, MASO, ULAM SCHOOL, andYUMEAT (Ayam Brand), the campaign aligns withUN SDG 3, emphasising Good Health & Well-Being.
Activities included a menu innovation challenge by
UPM Food Science undergraduates, pocket talks by
Ulam School and Selangor Health Department officers,
as well as cooking demonstrations.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

FORTIFYING ECONOMIC PERFORMANCEENHANCING CUSTOMER LOYALTYAND EXPERIENCE

MM4

GRI 2-6, 414
Commitment:
Achieve Net Promoter Score (NPS) of average +70.

At AEON, we place our customers at the heart of ouroperations, ensuring that every decision is made with
their needs and preferences in mind. Embracing a'Customer First' philosophy, we are deeply committed to
identifying and implementing strategies that deliver an
exceptional customer experience, creating smiles andconnecting hearts.
We constantly endeavour to enhance customer loyalty
and the overall experience by actively considering their
feedback. This approach allows us to uphold high-quality
standards across all our products and services, ensuringthat we not only meet but exceed our customers'
expectations.
Our Initiatives and Performance in 2023
During the year under review, we fullfilledthiscommitment
throughthefollowing
dedicated
programmes:
1.	Net Promoter Score (NPS) Programme
In 2022, we introduced our NPS programme, atargeted survey designed to gauge the likelihoodof customers returning to shop with AEON. With an
initial target score of 75, which is aligned to industry
benchmark for exceptional customer experience andloyalty, we conducted the survey across our malls
and stores. In 2023, the same survey was carried out
and we achieved a score of 75.

2.	AEON Careline
We have developed a comprehensive and integrated
platform that captures the Voice of Our Customers(VoC) through the consolidation of feedback acrossfour key categories, namely Enquiries, Complaints,
Compliments, and Suggestions. This feedback isgathered through a variety of channels, including
our AEON Careline hotline at 1300-80-2366, email,social media platforms, live chat functionalities, andQR-code enabled forms accessible at our physicalstores. This multifaceted approach ensures
accessibility and convenience for our customers,
facilitating engagement through an omnichannel
touchpoint interaction management system. Our
objective is to maintain a strong connection withour customer base, demonstrating responsivenessto their evolving needs and experiences across all
touchpoints.
In 2023, we recorded higher feedback, with the
majority under the 'Enquiries' category. This surgealigns with the implementation of newly integrated
solutions aimed at expanding the VoC capturechannels.
Category

2021

2022

2023

Enquiries

15,38040,83457,963Complaint

30,679

9,723

6,520

Compliments

5,005

6,428

4,302

Suggestions

625

664

546

51,68957,64969,331Total

Net Promoter Score
2022

2023

+75

+75

We are dedicated to improving our NPS score by
expanding and enhancing our customer loyalty
programme, ensuring greater satisfaction and loyalty
among our valued customers.

Our primary focus is on addressing complaints
promptly and thoroughly, ensuring that each issue isattended to and resolved satisfactorily. Additionally,
we are committed to following up with individuals
who have lodged complaints to ensure their concerns
are fully addressed and resolved to their satisfaction.

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FORTIFYING ECONOMIC PERFORMANCEIMPROVING AEON’s AGILITY TO MEETCUSTOMER NEEDS

MM4

MM5

MM6

GRI 418-1
Commitment:
Increase utilisation rate of Self-Checkout Counters (SCOs) to 40% by 2025.
By embracing digital tools and technologies, AEON drives
innovation, offering personalised and engaging services
that meet evolving customer needs. This strategic movealso enhances our operational efficiency by not only
boosting profitability through cost reduction and market
responsiveness, but also plays a key role in advancing
AEON's sustainability goals. In addition, digitalisation
helps us to facilitate efficient resource use and informed
decision-making. This aligns with our commitment toenvironmental stewardship, underlining digitalisation's
integral role in both improving our customer care andsecuring long-term business success.
Our Initiatives and Performance in 2023
1.

2.	Digitalisation of AEON Supplier Portal

Self-Checkout Counters (SCO)
As part of our goal to elevate customer convenience,
AEON continues to install Self-Checkout Counters(SCOs) at our various stores and outlets. In 2023,
AEON installed 316 number of SCOs across AEONStores, MaxValu, Daiso and AEON Wellness outlets.

316 SCOs(2022: 182)

28% utilisation(2022: 10%)

With a goal to further elevate customer convenience,
AEON aims to raise the SCO utilisation rate to 40% by2025. This reflects our commitment to modernising
the shopping experience and enhancing service
efficiency for our customers.

As part of AEON's digital transformation journey, we
continue to utilise our e-contract functionality which
we embarked on in order to digitalise our electronic
trading term contracts with our suppliers. Thisfunctionality allows suppliers to create e-contracts
with their trading terms as well as for online
approval and authorisation of the contract in the newpaperless process in our supplier portal platform.
We believe that this is a step forward in our digitaltransformation journey as we try to increase
e-documentation usage in line with the changing
environment towards sustainable paperless future.
Looking to 2024, AEON remains steadfastly committed
to driving economic sustainability. We will continue
to adapt and innovate, ensuring that our businessstrategies not only foster growth but also align withsustainable practices. By balancing our economic goals
with environmental and social responsibilities, we aim tocontribute positively to both the communities we serveand the broader global economy.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

STRENGTHENING
ENVIRONMENTAL ACCOUNTABILITY

Environmentally Focused

Malaysia’s National Energy Transition Roadmap (NETR)
and Malaysia's net zero aspiration by 2050. AEON’s waste
management initiatives include a waste disposal system
at AEON Alpha Angle which converts organic waste into
compost, and the 'Say No To Plastic Bags' campaign,aligning with Malaysia’s Single-Use Plastic Roadmap
2018 to 2030. Additionally, we provide recycling centres
and continue to partner with organisations such as CocaCola, Trash4Cash and Hiroyuki Industries to promote
recycling in Malaysia.

AEON is steadfast in its commitment to environmental
stewardship, actively engaging with customers andpartners to foster a more sustainable world.

The Malaysia-Japan Friendship Forest in Bidor, Perak, is amilestone in AEON's biodiversity conservation initiative.
Initiated in 2014 with the Forest Research Institute Malaysia
and completed in May 2023, this project has revitalised aformer tin mine by planting 30,000 trees, demonstrating
AEON's commitment to environmental restoration andlong-term ecological sustainability. The project will behanded over to the government in September 2024.

To reinforce our environmental efforts, we haveembraced renewable energy and installed solar
photovoltaic systems at our malls thus contributing to

These initiatives represent the Company’s dedication to
reducing our environmental impact, while also playing a
crucial role in ensuring a sustainable future for all.

REDUCING CARBON FOOTPRINTGRI 302-1, 302-4, 305-1, 305-2, 305-3, 305-4

MM7

MM8

Commitment:
Carbon neutral by 2040.
AEON recognises that the impact of our energy use
and greenhouse gas emissions contribute to climatechange. This awareness extends not only to AEON's
direct business activities but also to the Company’s
network of suppliers. As such, we are actively committed
to minimising our carbon footprint and leveraging
opportunities as we transition our businesses to thrive ina low-carbon economy.
A key aspect of AEON's climate strategy is to support
the growth of the renewable energy (RE) industry. This
support is crucial not only within the country but also
globally, as it contributes to the broader energy transition
needed to combat climate change and global warming.

In 2023, AEON made significant strides in this direction.
The Company conducted an internal assessment of
Scope 1 and 2 emissions and assessed 2 out of 15
categories of Scope 3 emissions. A significant stepin AEON's renewable energy strategy has been the
successful installation of solar photovoltaic (PV) at AEON
Taman Maluri Shopping Centre and AEON Alpha Angle
in 2022, as well as seven additional malls in 2023. With
AEON Taman Maluri Shopping Centre and AEON Alpha
Angle already generating solar energy, the Company
aims to have 13 AEON malls equipped with solar PVs by2024. Furthering our commitment to renewable energy,
the Company also subscribed to the Green Energy Tariff(GET) to reinforce our support for sustainable energy
sources.

Our Initiatives and Performance in 2023
In alignment with the Company’s Sustainability & Climate
Change Policy, AEON has laid out plans to reduce its
carbon footprint. The Company has set ambitious targets,
aiming for carbon neutrality by 2040.

We achieved emission intensity reduction by 51% in
2023 compared to base year 2019 due to AEON's green
electricity purchase via GET and solar PV generation. Total
emissions in 2023 was 130,602 tCO2e, an increase of 43%
compared to 2022. This was primarily due to increase in
Scope 2 emissions by 67% as we gradually reduce reliance

The Sustainability & Climate Change Policy can be viewed at https://aeongroupmalaysia.com/sustainability-policies/

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STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

on GET subscription and shift towards renewable energy
generation through solar PV. Consequently, emission
intensity increased by 0.1 tCO2e/MWh.
AEON has also installed Electric Vehicle (EV) charging
stations at selected AEON malls, with plans for more
EV chargers to be installed and operational in 2024.
This initiative makes charging EVs more convenient andsupports wider EV adoption. This step not only serves
AEON's goals but also encourages sustainable practices
among our customers.

AEON’s commitment extends beyond our immediate
operations. The Company supports the growth of therenewable energy industry both nationally and globally.
As a panel advisory member mandated by the Ministryof Natural Resources, Environment and Climate Change(NRECC) for the Trade and Industry cluster for COP28,

Dubai, AEON collaborated with entities like the Ministryof International Trade and Industry (MITI) and otherretailers where it shared insights on greening the supply
chain and the Circular Economy. AEON’s participation in
the COP28 underscores its role in broader environmental
discussions and initiatives.

As we move into 2024, AEON plans to develop
decarbonisation strategies and a roadmap that will help
accelerate our greenhouse gas emission reduction. We
will also be assessing on our Scope 3 emissions to identify
opportunities to reduce our carbon emissions acrossour value chain. This step will further reinforce AEON's
commitment to achieving its sustainability targets andcontributing to the global effort against climate change.

Total Emission (tCO2e) & Emission Intensity (tCO2e/MWh)
Emission Intensity(tCO2e/MWh)

0.65
23,9090.32

0.22

26,094
198,056
27,959103,026
61,548
1,506

1,663
2021
Scope 1 (tCO2e)

1,482
2022
Scope 2 (tCO2e)

2023
Scope 3 (tCO2e)

Notes:• Scope 1 refers to all direct sources of emissions owned or controlled by AEON including fuel consumed.
• Scope 2 refers to indirect emission sources from purchased electricity consumed by AEON.
• Scope 3 refers to emissions from business travels and employee commuting.

70

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

IMPROVING OUR ENERGY EFFICIENCYGRI 302-1, 302-2, 302-4, 305-1, 305-2

MM7

MM8

Commitment:
Reduce 30% of electricity consumption compared to base year 2019 by 2030.
AEON acknowledges its role as a conscientious industry
player. We are aware of the environmental impact of
our energy-intensive operations, particularly in ourmalls and stores where air-conditioning and lighting are
crucial for customer comfort. Furthermore, the activities
at the AEON Food Processing Centre (AFPC), which
include the preparation of ready-to-eat meals and theconsumption of Liquified Petroleum Gas (LPG), reinforce
the necessity of adopting a forward-thinking approachto environmental management. This awareness drives
AEON's commitment to sustainable practices and its
dedication to reducing its ecological footprint.
The Company’s efforts in environmental stewardship are
guided by the Sustainability and Climate Change Policy
which serves as both a declaration of commitment anda guide to AEON's stance on sustainability and climatechange.
The Sustainability & Climate Change Policy canbe viewed at https://aeongroupmalaysia.com/
sustainability-policies/

Our Initiatives and Performance in 2023

the Company’s energy consumption. We aim to cut theCompany's electricity usage by 30% by 2030, using the
fiscal year 2019 as our baseline. This ambitious goal has
led us to implement energy-efficient strategies acrossour extensive network which includes AEON Malls,
AEON Stores, MaxValu, Daiso, AEON Wellness and
AEON Food Processing Centre (AFPC).
In 2023, AEON implemented several key initiatives to meet
our target. These include optimising our air conditioning
usage to operate efficiently and only during businesshours, and transitioning to LED lighting to reduce power
consumption. AEON also introduced the Virtual Energy
Monitoring System (VEMS) at AEON Melaka Shopping
Centre and AEON Mall Bandaraya Melaka which enables
the Company to thoroughly audit the building's energy
consumption patterns. We also installed energy saving
systems across 14 malls to enhance energy efficiency
and conducted company-wide energy saving countermeasures to optimise electricity consumption.
Looking ahead to 2024, AEON has established plans to
implement energy management system over the next 12months, ensuring a comprehensive approach to energy
conservation and sustainability.

To advance our energy conservation objectives, AEON
has adopted a strategic approach to significantly reduce
The following table summarises the Company’s energy consumption for the year under review:
Energy

Units

2021

2022

2023

Electricity
Total Electricity Consumption

Megawatt

425,221521,107528,661

AEON Consumption

Megawatt

345,592

412,060

406,142*

Tenants Consumption

Megawatt

79,629109,047

122,519

Solar PV generation

Megawatt

0

1,982

3,922

Green Electricity Purchased via Green Electricity Tariff (GET)

Megawatt

0387,495

290,230

Fuel
LPG Consumption by AEON

m3

125,498

159,028

134,333

LPG Consumption by AEON's Tenantsm

515,072

621,504

634,692

Diesel Consumption

Litre

31

35

11

Petrol/Gasoline Consumption

Litre

207,837

210,411

227,720

3Note:* This data has been independently assured. Please refer to the Independent Limited Assurance Report on pages 205 to 208.

CHAMPIONING Sustainability

71

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITYMINIMISING WATER CONSUMPTIONGRI 302-4, 303-5, 305-1

MM9Commitment:
Reduce 15% of water consumption compared to base year 2019 by 2030.
AEON is aware of the growing issue of water scarcity,
exacerbated by climate change, inadequate water
management, and contamination. Recognising that
fresh and clean water is a crucial resource, AEON iscommitted to responsibly monitoring our water footprint
which extends across various facets of its operations,from raw materials and suppliers to its malls, store
operations, and food preparation processes. In reducing
water consumption in our operations, we also aim togenerate savings in our energy use and reduce ouroperational costs. In response to this, we are committed
to implementing water management initiatives, focusing
on sustainable usage and efficiency to address theconservation of this critical resource.
Our Initiatives and Performance in 2023
As per our other Environmental initiatives, AEON’s water
management strategies are guided by the Company’s
Sustainability & Climate Change Policy.
In line with our objective to minimise the environmental
impact of our operations, we have committed to a water
reduction strategy with a goal to decrease our water
usage by 15% by 2030 from our base year. To this end,
we began an initiative to improve the maintenance of
our water facilities throughout our operations to prevent
leaks. This included retrofitting our facilities with waterefficient faucets and toilets. We also installed De-Scalesystems and air-conditioning cooling towers to enhancewater efficiency.

Alongside these technical upgrades, AEON also
introduced company-wide energy-saving measures,
which included water conservation strategies in 2023.
Our water use for the year under review is as follows:
Water

Units

2021

2022

2023

Water Consumption
AEON

Megalitres

3,413.7

3,838.3

3,854.5*

AEON’stenantMegalitres

622.1

918.3

957.2

Total

Megalitres

4,035.8

4,756.6

4,811.7

Note:* This data has been independently assured. Please refer to the
Independent Limited Assurance Report on pages 205 to 208.

Moving forward, AEON plans to review and update
its water management plans across all operations toensure it meets the Company's water reduction targets.
Continuous monitoring and maintenance of facilities,
particularly mall and store toilets, will be a key focus tominimise water waste.
We will also continue to explore new initiatives such as
implementing rainwater harvesting systems to reduce ourreliance on municipal water sources as well as installing
modified water taps with lower flow rates where needed.
The Company will also engage in awareness campaigns
to promote water-saving practices among customers andemployees.

72

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

ReducinG WASTE
GRI 306-1, 306-2, 306-3, 306-4, 306-5

MM10Commitment:
Increase recycling rate to 15% by 2030.
Waste management is an integral aspect of AEON’s efforts to curb our contributions to environmental challenges suchas pollution, resource depletion and GHG emissions. Through our efficient waste reduction strategies, we aim to drive
environmental conservation while demonstrating our commitment to corporate responsibility and meeting the expectationsof environmentally conscious consumers.
Effective waste management is not only beneficial for the environment but also offers tangible business advantages.
It can lead to cost savings by minimising disposal expenses and enhancing overall operational efficiency. Moreover,reducing waste is integral to strengthening the resilience of AEON's supply chain. Maintaining an efficient inventory
management system and reducing excess inventories enable the Company to adapt more effectively to fluctuating
market demands and conditions.
AEON is also embracing the principles of the Circular Economy, focusing on streamlining processes to minimise
waste and maximise the reuse, recycling, and repurposing of materials. The following illustrates the Company’s waste
management process:Prevention
Using less material in design; keeping products
for longer; using less hazardous materials.

Stage

Reduce/Re-Use
Preparing for re-use; cleaning; repairing, andrefurbishing.

Stage

Recycling
Turning waste into a new substance or product,
including compositing.

Stage

RecoveryAnaerobic digestion – conversion to biogas for electricity
generation; incineration with energy recovery.

Stage

Disposal
Landfill and incineration without energy recovery.

1
2
3
4

Stage

5

The Company’s commitment to waste reduction is a strategic move that transcends mere economic advantage. It
represents our conscientious alignment with the broader objectives of environmental stewardship, societal expectations,and the pursuit of sustainable business practices. By enhancing operational efficiency, achieving cost savings, andbolstering its reputation, AEON is positioning itself as a responsible leader in the retail sector.

CHAMPIONING Sustainability

73

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

Our Initiatives and Performance in 2023
To ensure that we are managing our waste in compliance with best practices and legal requirements, AEON stringently
abides by local and national regulations such as the Solid Waste and Public Cleansing Management Act 2007 (Act 672).
Internally, the Company’s Waste Management Policy serves as a key framework to guide the Company to fulfil bothits ethical and legal obligations for responsible waste management. The purpose of this Policy is to articulate AEON's
commitment and provide guidance regarding its approach to waste management. The implementation of this Policy
ensures that AEON’s waste management practices are not only compliant and safe but also environmentally sound andfinancially viable.
The Waste Management Policy can be viewed at https://aeongroupmalaysia.com/sustainability policies/

One of our flagship projects was the installation of a compost machine at AEON Alpha Angle which successfully collected
and converted organic waste into valuable compost. In FY2023, AEON undertook a series of targeted initiatives aimed
at enhancing waste management to achieve a 15% recycling rate by 2030.
We also established recycling programmes across our operations to recycle carton boxes and used cooking oil. Thisinitiative was complemented by the establishment of a buy-back centre at AEON Alpha Angle, facilitating the recycling
and repurposing of various materials with our customers.
As part of this programme, AEON also launched an awareness programme for our customers with partners such as
Coca-Cola, Hiroyuki Industries, Trash4Cash and Kloth Cares. This initiative involved the installation of Polyethylene
Terephthalate (PET) bottles recycling bins in 15 malls. Meanwhile, 27 Kloth Cares bins for used fabric collections
were placed in 17 malls, contributing to carbon dioxide (CO2) emission avoidance and highlighting the importance ofrecycling of fabric.
PET Bottles Recycling Initiative

44.5kgof PET bottles
collected from six
AEON malls in Johorover a two-month
period

78.3kgof PET bottles
collected from15 AEON malls
nationwide from
October to December
2023

Fabric Recycling Initiative

74

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

In addition to these programmes, the Company also observes waste management practices throughout its operations.
The results of our endeavours for the year in review are as follows:
Waste

Units

2021

2022

2023

Total waste

Metric tonnes

45,10858,23862,260Non-recycled

Metric tonnes

41,61052,28755,507

Recycled

Metric tonnes

3,498

5,951

6,753*

8

10

11

Waste Generation

Recycling Rate

%

Note:
* This data has been independently assured. Please refer to the Independent Limited Assurance Report on pages 205 to 208.

In 2024, AEON is set to accelerate its waste management initiatives. As one of the leading retail companies in Malaysia,
we aim to refine our waste management process throughout all our AEON Malls and Stores, with a special emphasis
on effective waste segregation right from the source. This will be complemented by our exploration of new avenues
in composting and biogas technology which will reaffirm AEON's dedication to the principles of the Circular Economy.
Additionally, we intend to foster collaborations among our stakeholders to enhance resource efficiency in daily
operations and engage all relevant parties to address existing gaps and implement innovative solutions for sustainablewaste management practices.

Embracing Circularity
Compost Machine at AEON Alpha Angle
AEON Alpha Angle managed organic waste from its operations
by having a compost machine with a 2-tonne capacity and an 80%
reduction rate in waste volume. This move not only dealt with organic
waste effectively but also produced compost that supports soil healthand local farming.
This initiative reflects AEON's commitment to environmental
conservation by innovating in waste management to lessen its
environmental impact, decrease landfill reliance, cut greenhousegas emissions from waste decomposition, and aid in sustainableagriculture.

A total of 3,112kg
of compost generated
from 181,84kg oforganic waste collected

CHAMPIONING Sustainability

75

STRENGTHENING ENVIRONMENTAL ACCOUNTABILITY

ENHANCING BIODIVERSITYCONSERVATION

MM11

GRI 304-2, 304-3, 306-2, 306-4
Commitment:
Protect biodiversity to minimise our environmental footprint.
As consumer awareness grows, the demand for ethicaland sustainable sourcing is shaping how retailers operate.
Engaging in biodiversity conservation allows retailers
like AEON to showcase our commitment to ethicalsourcing and environmental stewardship, enhancing
our brand reputation and appeal to eco-conscious
consumers. Cognisant of the risks of biodiversity loss to
key sectors such as agriculture, forestry, and fisheries,
AEON is committed to investing in conservation efforts
to ensure the sustainability and resilience of our supply
chain. This not only safeguards the long-term availabilityof resources but also nurtures positive relationships
with the local communities. By prioritising biodiversity
conservation, we align our value creation initiatives
with the ethical, environmental, and strategic business
imperatives of retailers, thus meeting shifting consumer
expectations and contributing to more responsible andresilient business practices.
Our Initiatives and Performance in 2023
In line with our commitment to enhance our environmental
stewardship, AEON has set forth a series of initiatives toadvance its biodiversity conservation efforts. One of the
key initiatives in 2023 was the completion of the final phaseof the decade-long Malaysia-Japan Friendship Forest
Programme in Bidor, Perak. Initiated in 2014 with the Forest
Research Institute Malaysia (FRIM), this reforestation
project aimed to plant 30,000 trees by 2024 to restore aformer tin mine area. The project consists of three phases,
with the final 12,000 trees planted in 2023. Cumulatively todate, we have successfully planted more than 550,000 trees
through various tree planting initiatives.

The Company estimates that a total of

70 million plastic bags were
avoided under the 'Say No To Plastic
Bags' campaign which is equivalentof 123,000 tonnes of carbon
emission avoided.

Reducing Single-used Plastic
TOPVALU Refill machines
AEON also introduced TOPVALU bio-based
cleaning detergent refill vending machines toencourage the use of reusable containers, further
reducing plastic waste. The bio-based detergent
refill vending machines are currently available at
AEON Taman Maluri Shopping Centre and AEON
Queensbay Store, and will soon be introduced toother locations nationwide. Some of the TOPVALU
products available for refill include the Liquid
Laundry Detergent, Floor Cleaner and Dishwashing
Liquid. We plan to expand to offer more products
via our refill vending machines in 2024.

Japan-Malaysia Friendship Forest, Bidor, Perak
Phase 1

Phase 2Phase 3(2014)(2019)(2023)

8,000

trees planted

10,000trees planted

12,000trees planted

Another major step was the 'Say No To Plastic Bags'
campaign which was launched on 1 January 2023,
whereby AEON eliminated single-use plastic bags at allits counters nationwide. This initiative was in line with
Malaysia’s Single-Use Plastic Roadmap 2018-2030 and
led to a dual benefit: CO2 emissions avoided relative tothe previous year and cost savings from reduced plastic
bag purchases.

Moving forward, AEON is focusing on developing an
engagement plan centred around responsible sourcing.
This plan involves collaborating with our stakeholders toenhance the greening of our supply chain and improving
our suppliers' audit programme to include AEON’s
Responsible Sourcing Policy. Additionally, the Company
is exploring sustainable packaging solutions for its readyto-eat food items, reinforcing our ongoing commitment
to environmental sustainability and ethical sourcing inour business operations.

76

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

EFFECTING POSITIVESOCIAL CHANGE

For nearly four decades, AEON has experienced sustained
growth and success, a testament to the unwavering
dedication of our workforce of 9,868 AEON People
and the invaluable support from the communities inwhich we operate. Our work aligns with UN SDGs 3, 5,
8 and 10, focusing on health, decent work and reduced
inequalities. Throughout these years, our employees havedemonstrated commitment, innovation, and a deep senseof loyalty to our mission. AEON is committed to fostering avibrant and supportive work environment and we achieve
this by implementing a range of initiatives designed
to make every employee feel valued and empowered
to deliver their utmost. Central to our approach is the
rigorous enforcement of health and safety standards,
ensuring the well-being of our workforce. Additionally,
our talent management programme is tailored to equip
our employees with the skills and opportunities needed tofulfil both the Company’s objectives and their own career
aspirations.
In line with our commitment to diversity, we have set
targets for increasing representation, aiming for 50%
women in leadership roles by 2025 and a 2% employment
rate for Persons with Disabilities (PWD). Upholding
our Diversity Policy, we ensure fair and merit-based

Responsible Employment
Sustainable Economics

employment practices and zero tolerance towards
discrimination. This approach not only enriches ourworkplace but also enhances stakeholder engagement byincorporating diverse perspectives. By way of upholding
Human Rights, we have adopted the United Nations
Global Compact Malaysia & Brunei’s (UNGCMYB) Ten
Principles, the Universal Declaration of Human Rights, aswell as the International Labour Organisation’s Declaration
on Fundamental Principles and Rights at Work.
To give back to the communities we serve, we continue toroll out various activities under AEON’s Corporate Social
Responsibility (CSR) programme and via the Malaysia
AEON Foundation (MAF), a joint philanthropic arm of the
AEON group of companies in Malaysia. These initiatives
reflect our commitment to social welfare and community
development. By aligning our business practices withsocietal needs, we not only enhance the quality oflife in our communities but also strengthen our bondwith customers and stakeholders, thus embodying ourphilosophy of giving back and fostering a better world forall. Through these concerted efforts, our aim is to playa significant role in shaping the social landscape of ournation, fostering positive and enduring impacts for the
future.

Workforce Profile
Total Employees and Composition
2021

8,177

2022

9,374

2023

8,631

1,869

10,046
1,930

1,237
DirectIndirect(Consist of full time andpart time workers)(Consist of casual workers,
outsourced workers and interns)

11,304
9,868

CHAMPIONING Sustainability

77

EFFECTING POSITIVE SOCIAL CHANGE

PROMOTING DIVERSITY &INCLUSIVITY

MM12

GRI 2-7, 405-1, 406-1
Commitment:• Maintain at least 30% women representation on the Board of Directors.
• Maintain total ratio of women with leadership positions at 50%.
• Increase Persons With Disabilities (PWD) hiring to 2% by 2025.
AEON believes that embracing diversity across its
operations is a key strength which enhances theCompany's ability to understand and meet the needsof its diverse stakeholders. We are committed tocultivating a diverse workforce that embodies a variety
of skills, perspectives, as well as ideas and mirrors themulticultural society in which we operate. AEON views its
employees as invaluable assets, essential to fostering a
dynamic and inclusive workplace where every individualis empowered to reach their full potential. This approach
not only creates a positive work environment, it also
harnesses diversity to drive innovation, effectiveness,and creativity within our organisation.
The Company’s dedication to diversity and equity is
encapsulated in the AEON Diversity Policy, which guides
the Company in enriching the capabilities of its Boardof Directors and employees. This policy ensures thatdecisions and progress are informed by a broad spectrumof viewpoints, without bias towards age, gender, ethnicity,
cultural background, or any other personal characteristics.
Through this commitment, AEON aims to build a moresustainable and inclusive future for all stakeholders.

In upholding this policy, AEON has adopted a zerotolerance stance towards any form of discrimination or
disrespectful behaviour related to gender, religion, race,
nationality, and age. We are dedicated to implementing
fair employment practices from the outset of ourrecruitment process. This commitment is aligned with our
Recruitment Policy, ensuring equality is established fromthe beginning.
Further emphasising inclusivity, AEON actively recruits
and retains employees with disabilities, ensuring theirneeds are met with appropriate support. The Company
makes all decisions regarding career advancement,
recognition, and rewards fairly and unbiasedly, based
solely on performance and merit.
The Company has also set clear targets to champion
diversity within its leadership. These include maintaining
at least 30% women representation on the Board of
Directors - a goal already surpassed with a current rateof 40%. We also aim to maintain the total ratio of womenin leadership positions of at least 50%, of which wehave already achieved in 2023 with 58% women holding
leadership positions as at December 2023.

Diversity
Gender

42%

58%

Male

Female

43%

57%

Male

46%

Female

2021

54%

Male

2022

Female
2023

Age

2021

42%
53%
5%

2021

Age 30-50

Age under 30

Ethnic

46%
49%
5%

2022

88%
5%
4%
3%

2022

Bumiputera

Chinese

2023

41%
53%
6%

Age above 50

85%
4%
5%
6%

2023

IndianOthers

82%
4%
4%
10%

78

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

EFFECTING POSITIVE SOCIAL CHANGE

Employee Composition by Category
700

711

731

2,736

2,979

168

2,884

170

148

4,573

5,514

2021
Gender Diversity

4,868

2022

2023

100%
80%

58%

62%

42%

38%

58%

57%

61%

42%

43%

39%

56%

58%

63%

44%

42%

37%

50%

60%
40%
20%

100%

100%

100%

50%

0%
2021

2022
Male

2023*
FemaleAge Diversity
100%

11%

5%

8%

5%

11%

5%

10%

5%

13%

5%

11%

5%

80%

88%

66%

75%

38%

88%

65%

75%

34%

86%

68%

77%

39%

29%

17%

57%

30%

15%

61%

27%

12%

56%

60%
40%
20%
0%

1%

1%

2021
Age under 30
Management

Executive

2022
Age 30-50

1%

2023*
Age above 50

Non-executive/ Technical staff

General Workers* This data has been independently assured. Please refer to the Independent Limited Assurance Report on pages 205 to 208.

The Company also focused on increasing the recruitment of Persons with Disabilities (PWDs) as part of our commitment
to achieve a PWD employment rate of 2% by 2025. To date, the Company currently holds a 2.1% employment rate for
PWDs and the number of PWDs being hired has seen an uptrend in the last two years. In 2023, we conducted two
trainings for PWD to provide them with essential job skills and support their professional development.
Persons with Disability (PWD)
2021

2022

2023

Number of PWD Employed

115

123

184

% Against Total Workforce

1.4%

1.3%

2.1%

For 2024, AEON is set to closely oversee the effective incorporation of its diversity and inclusivity strategies across all facetsof employment, including hiring, promotions, and professional development. Additionally, the Company is considering
the establishment of a permanent incentive programme aimed at fostering the hiring of PWDs within the workplace. This
move highlights AEON's unwavering commitment to nurturing a workplace environment that is both diverse and inclusive.

CHAMPIONING Sustainability

79

EFFECTING POSITIVE SOCIAL CHANGE

RESPECTING HUMAN & LABOUR RIGHTSGRI 2-7, 405-1, 406-1

MM13Commitment:
Nurture a workplace that values fairness and employee well-being.

AEON puts a high priority on human rights within ouroperational framework in our aim to drive ethical practices
which are key to enhancing efficiency and fostering a
supportive work environment. We uphold a policy oftreating all employees with dignity, ensuring they receive
fair wages and are offered equal opportunities without
discrimination based on gender, age, race, religion,
ethnicity, or nationality. Furthermore, we are committed
to the health and well-being of our staff, understandingthat a healthy workforce is crucial for maintaining longterm productivity and performance standards.

With the goal of achieving zero incidents related to humanrights, AEON supports freedom of association and actively
collaborates with employee unions to establish equitablecollective bargaining agreement. For employees notincluded in these agreements, the Company ensurescompliance with local workforce regulations and labour
standards. We continue to conduct employee experiencesurveys to gauge workplace satisfaction and engagement.
In 2023, following the closure of AEON Bandar Sunway,
we ensured that all staff were appropriately relocated toother AEON outlets.

Recognising the labour-intensive nature of the retailindustry, we are committed to prioritising labour rights
issues and adhering to all relevant laws, regulations, andemployment standards, including the National Minimum
Wage Policy, Minimum Retirement Age employer
guidelines, and the Employment Act of 1955. AEON
also supports the United Nations Global Compact's
Ten Principles and the Universal Declaration of Human
Rights, alongside the International Labour Organisation's
Declaration on Fundamental Principles and Rights at
Work.

Our Initiatives and Performance in 2023

The Company upholds human and labour rights throughvarious policies, including our Human and Labour Rights
Policy, guidelines on the Minimum Retirement Age, andobservance of the Trade Union Act 1959. Through thesecommitments, we ensure that all our workers, including
foreign employees, receive fair wages, compensation,
suitable living conditions, and comprehensive training
for safe and effective job performance.
Furthermore, AEON's Code of Conduct (ACOC) reinforcesthese commitments within the Company. The ACOC sets
the expected standards for corporate behaviour for both
employees and external stakeholders and offers a safe
platform and whistleblowing channel for employees.

In 2023, AEON received a total of 42 cases reported via
ACOC related to complaints, attitude and misconduct. Allof the cases were investigated and closed, with corrective
actions and measures taken and escalated, where
necessary included one dismissal case during the year.
However, there were no human rights violation cases
noted in 2023.
ACOC Cases by Category
Total complaints
Number of
SubstantiatedComplaints Concerning
Human Rights Violation

2021

2022

2023

34

31

42

2021

2022

2023

0

2*

0

Note:
* relates to sexual harassment cases.

In 2024, AEON is dedicated to enhancing its managementof human rights, with the goal of eliminating all
substantiated complaints related to human rights
violations. This commitment underscores AEON's
proactive approach to ensuring ethical practices andsafeguarding human rights within all aspects of its
operations.

80

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

EFFECTING POSITIVE SOCIAL CHANGE

ENHANCING HEALTH, SAFETY &WELL-BEING

MM14

GRI 403-2, 403-4, 403-5, 403-6, 403-7, 403-9, 403-10, 405-1
Commitment:
Zero fatalities at our operations.

At AEON, fostering a culture of health, safety, and wellbeing in the workplace is fundamental to our business.
We hold a firm belief in our duty to protect the health andoverall well-being of our employees, contractors, andstakeholders across our value chain. This commitment
not only affirms our role as a caring employer but isalso essential in attracting and retaining top talent. Our
objectives include preventing injuries and illnesses
among those within our premises, which in turn enhances
efficiency and productivity. By prioritising the healthand well-being of our workforce and partners, we are
ensuring the sustainability of all members of our value
chain for the long term.
Fostering a Culture of Safety
The Company’s health and safety initiatives are anchoredby the AEON Health, Safety and Environmental (HSE)
Policy. We aim to set the benchmark for health and safety
in the workplace by targeting zero fatalities. To achievethese targets, AEON implements comprehensive healthand safety trainings for its employees. The Company
empowers employees to contribute to a safe work
environment through Occupational Safety and HealthCommittees (OHSCs) established at AEON operationsites. These committees, co-led by the management
and employee representatives, meet every quarterly

to actively identify hazards, recommend safety
improvements, promote awareness through training, andensure employee voices are valued in creating a safer
workplace.
This is further supported by the incorporation of the'store ownership' principle, empowering each business
unit with a thorough understanding of risk management
processes. This approach includes providing targetedtraining to leadership and management at everyorganisational level, ensuring that risk management iseffectively implemented and evaluated. Complementing
this, we encourage our employees to report relevant
issues directly to HQ. All reports by employees aremonitored according to a set schedule and discussed
regularly during shift handovers as well as regular
operational reviews.
The Company is committed to transparency regarding
work-related incidents. We investigate all reported
accidents and incidents, regardless of severity, todetermine root causes and identify preventative
measures. Investigation findings and any learnings
are shared while maintaining confidentiality. We thenimplement corrective actions to address the root causes
and prevent future occurrences.

The AEON Health, Safety and Environmental (HSE) Policy can be viewed athttps://aeongroupmalaysia.com/sustainability policies/

Our Initiatives and Performance in 2023
Parameters

2021

2022

2023

135

1,185

888

Health & Safety Training
Number of staff trained of safety
Number of staff trained on safety as part of general training or
induction

80

680

344

1.08

1.18

1.23*

Number of work-related fatalities for staff

0

0

0

Number of work-related fatalities for contractor

0

1

0

Lost Time Incident Rate (LTIR), including contractors**

Notes:*
This data has been independently assured. Please refer to the Independent Limited Assurance Report on pages 205 to 208.
**
Refers to LTI Rate (times 200,000 hours) against total case and total AEON Employees.

CHAMPIONING Sustainability

81

EFFECTING POSITIVE SOCIAL CHANGE

29

Fire safety
training sessions

16

Safety trainings
sessions

10

First Aider
training sessions

460

First Aiders
established0

Crisis Management
Training sessions(Store Managers, Mall Managers
and Heads of Security)

Conducive Working Environment
We prioritise the mental well-being of our employees as we understand the vital role mental health plays in their overall
health. To support this, we organised a variety of talks and seminars aimed at addressing mental health issues. By
adopting a holistic approach to the health and safety of its workforce, AEON demonstrates its unwavering commitment
to creating a secure and healthy environment for all employees, contractors, and stakeholders.
In our commitment to prioritising employee well-being, we have introduced a range of initiatives aimed at improving
their work-life balance and overall health, encompassing mental well-being. These include:••••

Flexible Work Hours and Remote Work Options, enabling employees to tailor their work schedules to accommodate
their individual preferences and personal commitments.
Workplace Stress Mitigation, providing employees with support in handling work-related stress through informative
talks and seminars.
Wellness Programmes, encompassing events like health and wellness day.
Improved health coverage for all AEON employees.

Employee engagement is another cornerstone of AEON's initiatives. Through various platforms such as Townhall
meetings, policy discussions, and Long Service Awards, AEON strives to maintain open dialogue with its employees,
ensuring their voices are heard and valued.
AEON's commitment to the welfare of its employees encompasses not only those currently employed but also extends
to our retirees. The Rasa Sayang AEON Club plays a pivotal role in this endeavour. Registered with the Registrar ofSocieties, the club is distinctive for its membership of both current and former AEON employees aged 50 and above. In
addition to providing a platform for engagement, the club is designed to promote healthy and active lifestyles amongits members through a variety of health and wellness related activities.
Further reinforcing its culture of appreciation, AEON celebrates the AEON Long Service Awards which recognises andhonours the dedication of employees who have contributed many years of service. This practice not only celebrates
their loyalty but also ties into AEON’s broader commitment to support its workforce at all stages of their careers andbeyond as part of our bigger goal to create an inclusive and supportive community.

1,225

38

employees awarded Long Service Awards

Rasa Sayang AEON Club (RSAC) members

82

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

EFFECTING POSITIVE SOCIAL CHANGEEMPOWERING EMPLOYEE LEARNING& DEVELOPMENT

MM15

GRI 401-1, 404-1, 404-2, 404-3, 405-1, 405-3, 405-6
Commitment:
Foster continuous learning and professional growth.
Empowering employee learning and development is critical for the Company to ensure it recruits, develops, andretains top talent within a supportive work environment. This focus is key to preparing employees to be competitive,
innovative, and ready for future challenges. Furthermore, by prioritising employees' growth, the Company not only
enhances individual capabilities but also secures its competitive edge and long-term success, emphasising the valueof its people as its greatest asset.
Employee Training Programmes
AEON is deeply committed to developing a quality workforce, guided by its Agile, Genba, and Entrepreneurial (A.G.E)
values. The company's 3H (Head, Hand & Heart) approach further emphasises this dedication by fostering a holistic
work environment that values intellectual, practical, and emotional contributions from all employees.
Our Initiatives and Performance in 2023
In 2023, we conducted a range of training programmes to support our employees, investing over RM2.7 million invarious internal and external learning and development programmes to upskill and reskill our employees.
The relevant details of the training programmes held in 2023 are presented in the following table:
Training

Description

New Staff
Orientation(Onboarding)
Programme

This programme is held for every new employee with the following objectives:• To better understand the retail industry.
• To transition into their role, responsibilities, and working environment.
• To integrate with the organisational culture via The Aeon Way.

ASEAN Management
Programme

62 employees from across ASEAN, including 13 from Malaysia, engaged in a comprehensive
learning experience. Developed by our corporate Learning & Development unit and supported
by internal and external consultants, the programme utilised a blended learning approach,encompassing self-learning, face-to-face classroom sessions, industry immersions withthought leaders, personalised coaching, and real-world projects. The programme focused on
fostering leadership, innovation, financial acumen, change management, problem-solving,and other vital skills, aligning with our transformation journey and ensuring a sustainableapproach to talent development.

Retail Skill
Programmes

We revamped our training programmes to equip our workforce with the skills needed tosucceed in retail's changing landscape, ensuring long-term sustainability. A total of 15,075
sign-ups recorded in 2023, with some of the employees attending multiple programmes.

Total Hours of Training by Employee Category (in hours)

2022

2023

Management

9,920

12,012

Executive

35,33642,2690

3,696

General Workers

106,433

195,790

Total

151,689

253,767

Non-Executive/Technical Staff

CHAMPIONING Sustainability

83

EFFECTING POSITIVE SOCIAL CHANGE

Average Training Hours Per Employee by Employee Category (in hours)

2022

2023

Management

14

16

Executive

12

15

Non-Executive/Technical Staff

025

General Workers

1940

Total Average

16

29

Retention and Attrition
AEON’s Talent Management Framework is an integral part of the Company's strategy to ensure that every employee has
the opportunity to grow and succeed within the Company. Alongside the learning and development training provided toshape a high-performing culture, performance reviews and evaluation are conducted to ascertain appropriate merits andawards are accorded. The reviews and evaluations are conducted semi-annually, where Key Performance Indicators (KPIs)
are an integral part of assessment tools used, based on the Company’s business strategy, focus area and priorities.
Our Initiatives and Performance in 2023
In 2023, we redesigned the succession planning process where we enhanced our Talent Management with Assessment
Centres and engaged with a leading global firm to implement readiness scores for AEON talent. Our talent review
process was conducted and a total of 362 employees were promoted in 2023.
Performance Review

2021

2022

2023

Employees who are formally appraised (annually)

100%

100%

100%

One-on-one performance review for year-end evaluation

100%

100%

100%

COMMUNITY ENGAGEMENT &DEVELOPMENT

MM16

GRI 2-29, 203-2, 413-1
Commitment:
Strive to make meaningful contributions that positively impact the community.
AEON’s approach to a sustained business model involves
forging strong connections and fostering the well-beingof the communities where we operate via our Corporate
Social Responsibility (CSR) initiatives. Our dedication tothis cause also stems from our understanding that our
expansion is closely tied to the prosperity and well-beingof the communities where we are active. By fostering
the growth of these communities, we engage in areciprocal relationship that benefits both parties, marking
a collective stride towards success.
In carrying out our commitment, the Company leverages
both internal initiatives and programmes under the
AEON CSR programme, as well as efforts from the
Malaysian AEON Foundation (MAF). AEON's community
engagement efforts span a wide array of social andsustainable development programmes, with a particularfocus on education and community service.

Our Initiatives and Performance in 2023
In 2023, our CSR initiatives centred on supporting
the government’s Payung Rahmah initiative aimed
at aiding the underprivileged. Alongside providing
discounted products to ease the burden of customers,
AEON contributed Bakul Rahmah packages, comprisingessential items, to over 1,000 B40 families for threemonths. Additionally, we organised our annual bubur
lambuk programme, distributing 31,000 packs to local
communities at all AEON malls. We also extended our
support to schools and youth by sponsoring their various
projects.

84

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

EFFECTING POSITIVE SOCIAL CHANGE

MAF is the philanthropic arm of the AEON group of companies in Malaysia. Consecutively for the past three years,
AEON had invested RM1 million annually to MAF for the implementation of community sustainability programmes.
In 2023, AEON, through MAF, carried out several initiatives including AEON Mesra, AEON Bantu Flood Relief, SmartClassroom projects, and extended support to various charity homes and families.
Community Investment Performance Data
Total amount invested where the target beneficiaries are external
to AEON (in RM)

2021

2022

2023

1,000,000

1,000,000

1,073,979*

n/a

37,471

21,489Total number of beneficiaries of the investment in communities

Note:*
This data has been independently assured. Please refer to the Independent Limited Assurance Report on pages 205 to 208.

Looking ahead, AEON remains committed to contributing to, supporting, and engaging with the community through arange of sustainability programmes.
Malaysian AEON Foundation

Malaysian AEON Foundation (MAF) was established in 2004 as the corporate responsibility
arm of AEON group of companies in Malaysia. To date, MAF has contributed more than RM20
million through various charitable programmes.
MAF Pillars of Activities

Fundraising

Education

Community support

RM2m Grant Fund
Fundraising Events
Coin Box Collections
Business Partner
Collaborations

AEON Sayap Bagimu
Tablets
Smart Classroom
Buddy Programme
Scholarships

AEON Bersamamu
Outreach Programme
Homecare Boxes
Urban Poverty - KAMI Support

Best Project
School Upgrades

AEON Mesra
Social Reach
Chinese New Year
RamadanDeepavali
Christmas
Aidiladha

General Contribution
Donation
Living Environment
Medical Aid
Education Aid
AEON Bantu
Relief Aid
Disaster Relief
Frontliners
Support Aid

Launch of Smart Classroom Project

MAF launched a SmartClassroom Project which
benefited 8,622 students

in 12 schools.

CHAMPIONING Sustainability

85

EFFECTING POSITIVE SOCIAL CHANGE

Malaysian AEON Foundation (cont'd.)Donations

MAF’s donations during the year in review positively impacted the following marginalised groups:

118 Disabledindividuals from homes

136 Children

from charity homes

306

Families

52

Old folks

13

Individuals

2

Nations

AEON Bantu – Flood Relief Operations

AEON Mesra

Through MAF, AEON was able to bring relief to

MAF organised four festive celebrations that

1,265 flood-affected families in four states.

brought joy to 879 children.

86

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

MAINTAINING A SOUND
GOVERNANCE STRUCTURE

Efficiency & Integrity

AEON strives to be a model of efficiency and integrity. We carefully plan our growth to maximise value and upholdintegrity in all our operations. This pillar aligns with UN SDGs 9 and 16, focusing on industry, innovation andinfrastructure as well as peace, justice, strong institutions, and partnerships.
Against the year’s dynamically evolving business and regulatory landscape, AEON continued to uphold a robust
governance system, supported by sound internal controls and risk management practices. Guided by the Malaysian
Code on Corporate Governance 2021 (MCCG), we made the requisite policy amendments to comply with the stipulated
guidelines and regulations. The responsibilities of the Board of Directors and its committees were expanded toencompass sustainability elements, as reflected in their terms of reference.
The information in the following sections pertains to the Company’s Governance initiatives that are directly related tothe sustainability of our operations. For the comprehensive details of our Governance Framework and practices, pleaserefer to AEON’s Corporate Governance Overview Statement.

PROMOTING INTEGRITY &ANTI-CORRUPTION

MM17

GRI 2-23, 2-24, 2-25, 2-26, 205-2, 205-3
Commitment:
Maintain zero cases related to bribery and corruption.
AEON prioritises ethical and anti-corruption practices
through its strong governance framework which isessential to the Company’s maintenance of transparency,
integrity, and responsible business conduct. Thisapproach ensures AEON operates in a manner that is not
only compliant with laws but also aligns with high moral
standards, which in turn, strengthens the Company’s
trustworthiness. By advocating for fairness and actively
combating corruption, AEON supports the creation of
a competitive and sustainable market. To ensure thesevalues are implemented throughout our organisation,
we continue to invest in educating our workforce on theimportance of ethical behaviour and have implemented
rigorous compliance and reporting systems to maintainthese principles.
AEON has put in place several key policies and practices
aimed at maintaining integrity and preventing corruption
throughout its operations. The AEON Code of Ethics
and the AEON Code of Conduct (ACOC) provide a solid
foundation for ethical behaviour and integrity within the
Company. These important guidelines are consistently
shared with employees, notably through monthly virtual
assemblies where employees affirm their adherence
to the ACOC. This commitment is further reinforced bydisplaying the ACOC on the back of employee ID cards inboth Bahasa Malaysia and English.
Additionally, AEON has developed a Whistleblowing
Policy and an Anti-Bribery and Corruption (ABC) Policy,
both of which undergo regular reviews to ensure theyalign with the MACC Act 2009. These policies are integral
to AEON's objective of achieving a zero-case scenario

regarding anti-bribery and corruption, illustrating theCompany's proactive approach to ethical governance.
Our Initiatives and Performance in 2023
As per AEON’s ABC Policy, the Company is committed
to conducting regular training sessions to educate
employees involved in transactions with a high risk ofbribery and corruption. In 2022, AEON implemented agroup-wide anti-bribery e-learning programme tailoredfor management and operational leaders, encompassing
managers and above, whereby 81% of the total
participants attended this training last year.
In 2023, AEON upheld its ABC Policy, ensuring that
employees involved in high-risk transactions received
adequate training particularly for its employees inCustomer Care and Security departments, aiming toaddress high-risk areas effectively.
Percentage of participants (as per their respective
departments) completed the anti-bribery training in 2023
are as follows:
Employee Category

2023

Customer Care Manager

90%*

Security Assistant10%*

Security Head & Security Officer

43%*

Note:
*
This data has been independently assured. Please refer to the
Independent Limited Assurance Report on pages 205 to 208.

The AEON Whistleblowing Policy and ABC Policy can be viewed at https://aeongroupmalaysia.com/sustainability policies/

CHAMPIONING Sustainability

87

MAINTAINING A SOUND GOVERNANCE STRUCTURE

As at 31 December 2023, we maintained our zero-incident score in corruption-related incidents across AEON’s business
operations.
Corruption Incidents

2021

2022

2023

0

0

0

Number of confirmed corruption incidents

For further information on AEON’s anti-bribery and anti-corruption measures, please refer to our Statement on
Risk Management and Internal Control (SORMIC) within this IAR 2023. Moving forward, AEON is set to pursue theISO 37001:2016 Anti-Bribery Management System (ABMS) certification, aiming to enhance its commitment to ethicalpractices and good governance. This certification will mark a significant milestone for AEON, reinforcing its dedication
to preventing bribery and corruption while aligning its operations with international standards for integrity andtransparency.

IMPROVING DATA DISCLOSURE &TRANSPARENCY

MM18

GRI 418-1
Commitment:
Improve disclosure practices for transparency and accountability.
The Company prioritises enhancing data security
and transparency to protect sensitive information,
maintain customer trust, and preserve its reputation.
As digital business operations expand and handle morecustomer data, implementing strong data security isimperative to prevent unauthorised access and potential
breaches. Transparency in data practices fosters trust
and accountability, both crucial elements for positive
stakeholder relationships. These principles support
AEON's sustainability and credibility, forming thefoundation of its strategy in the digital era and maintaining
its status as a trustworthy entity.
AEON is firmly dedicated to protecting human and labour
rights, steering its efforts through its Personal Data
Protection Policy and the data security benchmarks set
by AEON Co., Ltd., Japan. The Company's commitment
to cybersecurity aligns with industry-leading practices
and standards, ensuring robust protection of sensitive
information.
Our Initiatives and Performance in 2023
Throughout 2023, AEON embarked on various initiatives
to bolster this commitment. We conducted thoroughreviews to verify the effectiveness of our data privacy andsecurity measures and ensured that data collection wasboth lawful and transparent. This included securing thenecessary consent for handling customer data stored by
AEON Credit Services Berhad and rigorously monitoringuser access to prevent any unauthorised use. We also took

significant steps in cybersecurity and continued to raiseawareness among our employees about the importanceof data protection and privacy.
There were zero substantiated complaints concerning
breaches in customer privacy or data loss in 2023.

Number of substantiatedcomplaints concerning
breaches in customer
privacy or data loss

2021

2022

2023

0

0

0

Moving forward, AEON is looking to strengthen our
cybersecurity framework and initiate comprehensive
programmes designed to educate our employees about
the importance of data protection and privacy. This
strategic investment aims to fortify our defences against
cyber threats and ensure that our team is well-versed inbest practices for safeguarding sensitive information,reflecting our unwavering commitment to maintaining
the highest standards of data security.
Additionally, we recognise the importance of sustainability
assurance and are considering the adoption of an ESG
data management platform to weave sustainability
more tightly into our Internal Audit plan. This move aims
to streamline ESG data reporting, reduce errors, andenhance the audit process, aligning with our overarchinggoals of sustainability and accountability.

88

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

MAINTAINING A SOUND GOVERNANCE STRUCTURE

EMBEDDING RISK MANAGEMENTIN OUR OPERATIONS

MM17

GRI 2-25, 205-2
Commitment:
To achieve ISO 37001 Certification in 2024.
A robust governance framework is pivotal for theCompany, ensuring the maintenance of effective
governance practices, integrity, and responsible
business conduct. By embedding risk management into
our operations, the Company aims to pre-emptively
identify, assess, and mitigate risks that could impact our
strategic goals, operational efficiency, and reputation.
This proactive approach enables us to navigate thecomplexities of the business landscape confidently,
ensuring the long-term sustainability and resilience of
our operations. Through diligent risk management, we
safeguard our assets, stakeholders' interests, and theCompany's future, reinforcing a culture of accountability
and transparency across all levels of the organisation. This
strategic integration of risk management is fundamental
to sustaining our operational excellence and upholding
our dedication to integrity and responsible businesspractices.
Over the past few years, the Company has focused on
fortifying AEON's Enterprise Risk Management (ERM)
framework via PROJECT TRUST. This comprehensivemodel includes elements of risk management, BusinessContinuity Management (BCM), and anti-bribery andanti-corruption practices. To facilitate deeper discussions
on risk identification, mitigation, and control, AEON
established the Risk Champion Committee (RCC), which
consists of representatives from each business unit.
AEON's overarching goal is the strategic and holistic
integration of the Risk Management process within all
facets of its business operations. This initiative is part of
AEON's continuous effort to ensure that risk management
is seamlessly woven into the fabric of its operational
strategies, thereby enhancing resilience, operational
efficiency, and ethical business practices.

Our Initiatives and Performance in 2023
For the year 2023, AEON conducted a comprehensive
Enterprise Risk Management (ERM) that encompassed all
aspects of our operations.
ERM

2021

2022

2023

Percentage of operations
that underwent ERM

100%

100%

100%

As testament to our efforts, AEON was honoured with
the Bronze Medal at the Anugerah Integriti Governans
dan Anti Rasuah (AIGA) event, hosted by the Institut
Integrity Malaysia (IIM) in Putrajaya. This accolade ispart of a government initiative aimed at enhancing
integrity and strengthening anti-corruption measures
within organisations. Managed by IIM, AIGA servesto acknowledge and celebrate both public and private
sector entities that demonstrate a strong commitment
to fostering integrity, exemplary governance, and robust
anti-corruption practices.

For more detailed information on AEON's Risk
Management measures and initiatives, please refer tothe Statement on Risk Management and Internal Control(SORMIC) included in this IAR 2023.

CHAMPIONING Sustainability

89

Sustainability Performance Data Table
AEON CO. (M) BHD. as a listed Issuer is required to provide mandatory ESG disclosures as part of the Main Market
Listing Requirements, in line with the enhanced Sustainability Reporting Guide, 3rd Edition. The following performancedata table is downloaded from the Bursa ESG Reporting Platform.
Indicator

Measurement Unit

2021

2022

2023

Percentage

100.00

99.00

99.00

Megawatt

345,592.00

412,060.00

406,142.00

Bursa (Supply chain management)
Bursa C7(a) Proportion of spending on local suppliers
Bursa (Energy management)
Bursa C4(a) Total energy consumption
Bursa (Water)
Bursa C9(a) Total volume of water used

Megalitres

3,413.700000 3,838.300000 3,854.500000

Bursa (Waste management)
Bursa C10(a) Total waste generated

Metric tonnes

45,108.00

58,238.00

62,260.00

Bursa C10(a)(i) Total waste diverted from disposal

Metric tonnes

3,498.00

5,951.00

6,753.00

Bursa C10(a)(ii) Total waste directed to disposal

Metric tonnes

41,610.00

52,287.00

55,507.00

Bursa (Emissions management)
Bursa C11(a) Scope 1 emissions in tonnes of CO2e

Metric tonnes

1,506.00

1,663.00

1,482.00

Bursa C11(b) Scope 2 emissions in tonnes of CO2e

Metric tonnes

198,056.00

61,548.00

103,026.00

Bursa C11(c) Scope 3 emissions in tonnes of CO2e
(at least for the categories of business travel andemployee commuting)

Metric tonnes

23,909.00

27,959.00

26,094.00

Percentage

1.00

1.00

1.00

Management Between 30-50

Percentage

88.00

88.00

86.00

Management Above 50

Percentage

11.00

11.00

13.00

Bursa (Diversity)
Bursa C3(a) Percentage of employees by gender andage group, for each employee category
Age Group by Employee Category
Management Under 30

Executive Under 30

Percentage

29.00

30.00

27.00

Executive Between 30-50

Percentage

66.00

65.00

68.00

Executive Above 50

Percentage

5.00

5.00

5.00

Non-executive/Technical Staff Under 30

Percentage

17.00

15.00

12.00

Non-executive/Technical Staff Between 30-50

Percentage

75.00

75.00

77.00

Non-executive/Technical Staff Above 50

Percentage

8.00

10.00

11.00

General Workers Under 30

Percentage

57.00

61.00

56.00

General Workers Between 30-50

Percentage

38.00

34.00

39.00

General Workers Above 50

Percentage

5.00

5.00

5.00

Percentage

42.00

43.00

42.00

Gender Group by Employee Category
Management MaleManagement Female

Percentage

58.00

57.00

58.00

Executive Male

Percentage

38.00

39.00

37.00

Executive Female

Percentage

62.00

61.00

63.00

Non-executive/Technical Staff Male

Percentage

100.00100.00100.00Non-executive/Technical Staff Female

Percentage

0

0

0

General Workers Male

Percentage

42.00

44.00

50.00

General Workers Female

Percentage

58.00

56.00

50.00

Internal assurance

External assurance

No assurance(*)Restated

90

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Sustainability Performance Data Table

Indicator

Measurement Unit

2021

2022

2023

Male

Percentage

88.00

82.00

60.00

FemalePercentage

12.00

18.00

40.00

Bursa C3(b) Percentage of directors by gender andage group

Under 30

Percentage

0.00

0.00

0.00

Between 30-50

Percentage

0.00

18.00

10

Above 50

Percentage

100.00

82.00

90.00

Bursa (Labour practices and standards)
Bursa C6(a) Total hours of training by employee
category
Management

Hours

-

9,920

12,012

Executive

Hours

-

35,33642,269Non-executive/Technical Staff

Hours

-

0

3,696

General Workers

Hours

-

106,433

195,790

19.00

17.00

13.00

Bursa C6(b) Percentage of employees that arecontractors or temporary staff

Percentage

Bursa C6(c) Total number of employee turnover by
employee category
Management

Number--62

Executive

Number--432

Non-executive/Technical Staff

Number--

44

General Workers

Number

-

-

3,269

Number0

20

Bursa C5(a) Number of work-related fatalities

Number0

1

0

Bursa C5(b) Lost time incident rate ("LTIR")

Rate

1.08

1.18

1.23

Bursa C5(c) Number of employees trained on healthand safety standards

Number

135

1,185

888

Bursa C6(d) Number of substantiated complaints
concerning human rights violations
Bursa (Health and safety)

Bursa (Community/Society)Bursa C2(a) Total amount invested in the community
where the target beneficiaries are external to the listed
issuerMYR

Bursa C2(b) Total number of beneficiaries of theinvestment in communities

Number1,000,000.00 1,000,000.00 1,073,979.00-

37,471

21,48990.00

Bursa (Anti-corruption)
Bursa C1(a) Percentage of employees who havereceived training on anti-corruption by employee
category
Customer Care Manager

Percentage--

Security Assistant

Percentage

-

-

10.00

Security Head & Security Officer

Percentage

-

-

43.00

Bursa C1(b) Percentage of operations assessed forcorruption-related risks

Percentage

0.00

0.00

0.00

Bursa C1(c) Confirmed incidents of corruption andaction taken

Number000

Number0

00

Bursa (Data privacy and security)
Bursa C8(a) Number of substantiated complaints
concerning breaches of customer privacy and lossesof customer data
Internal assurance

External assurance

No assurance(*)RestatedLinks ofHarmony

Seamless Journeys, Shared Joy

05
Corporate Governance92

Board of Directors

94

Board of Directors' Profile

100 AEON Leadership Council
102 AEON Leadership Council's Profile
106 Corporate Governance Overview Statement
122 Audit Committee Report
126 Statement on Risk Management and Internal
Control
133 Additional Compliance Information
134 Statement of Directors’ Responsibility

92

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

BOARD OF DIRECTORS
from left to right:

Pn. Zaida Khalida
ShaariIndependent Non-Executive
Director

Mr. Naoya Okada
Managing Director

Ms. Chong Swee Ying
Non-Independent
Non-Executive Director

Datuk Iskandar
Sarudin
Independent Non-Executive
ChairmanEN. Hisham Zainal
MokhtarSenior Independent
Non-Executive Director

Corporate Governance

93

BOARD OF DIRECTORS

Mr. Hiroaki
Egawa

Ms. Jenifer Thien
BIT LEONG

Non-Independent
Non-Executive Director

Independent
Non-Executive Director

Dato’ Merina
Abu Tahir

Mr. Tsugutoshi
Seko

Independent
Non-Executive Director

Executive Director

En. Mohamad Abdul
Naser Md Jaafar @Yunus
Independent
Non-Executive Director

94

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

BOARD OF DIRECTORS’ PROFILE

Independence

Gender

40%

60%

40%

Independent Directors

FemaleNon-Independent Directors

Male

Nationality

60%

Age

10%
20%

30%

70%

70%

Malaysian< 50 Years Old

Japanese

50 - 59 Years Old

60 - 69 Years Old

Tenure

10%
10%

80%
0 - 3 Years
3 - 6 Years> 6 Years

Note: Save as disclosed in this annual report, all the
Directors mentioned in pages 92 to 99 have no conflict ofinterest or potential conflict of interest, including interest
in any competing business with AEON CO. (M) BHD. or
any family relationship with any Director and/or major
shareholder or any convictions for offenses within the past
5 years and any public sanctions or penalty imposed by therelevant regulatory bodies during the financial year, except
for traffics summons, if any.

Corporate Governance

95

BOARD OF DIRECTORS’ PROFILE

Datuk Iskandar Sarudin

Mr. Naoya Okada

Independent Non-Executive Chairman

Managing Director

68

40

M

M

Date of Appointment: 27 February 2017

Date of Appointment: 1 July 2022

Board Committee:• Nil

Board Committee:• Nil

Directorship(s) in other Public Companies/Listed
Companies:• Hextar Retail Berhad (formerly known as Classic Scenic
Berhad)Directorship(s)Companies:• Nil

Academic/Professional Qualification:• B.A. (Hons) of Malay Studies in University of Malaya• Diploma of Public Administration (INTAN)

Datuk Iskandar Sarudin joined the Administrative andDiplomatic Service of Malaysia in 1979, initially serving
as Assistant Secretary (ASEAN) at the Ministry of Foreign
Affairs. Over the years, he held various diplomatic roles,
including Second Secretary in Jakarta, First Secretaryin Lagos, Principal Assistant Secretary (East Asia andCHOGM), and Counsellor in Chile and Sarajevo. Notably,
he served as Deputy Director General (ASEAN) andlater became the High Commissioner of Malaysia to Sri
Lanka and the Republic of Maldives from 2000 to 2004.
Subsequently, he served as the Ambassador of Malaysia
to the Republic of the Philippines from 2004 to 2006. In
2006, he took on the role of Deputy Secretary General(Management Affairs) at the Ministry of Foreign Affairs,
overseeing service, finance, administration, security,
ICT, and consular development. In 2010, he served as
the Ambassador of Malaysia to the People’s Republic ofChina and has been the President of Persatuan Muafakat
One Belt One Road Malaysia since 2016.

in

other

PublicCompanies/Listed

Academic/Professional Qualification:• Master of International Public Policy and Management,
University of Southern California• Bachelor of Laws, Keio University

Mr. Naoya Okada started his career at JP Morgan Securities
Japan Co., Ltd after obtaining his Master of International Public
Policy and Management from the University of Southern
California, USA. After seven years in the Investment Banking
Division as an Analyst and later as an Associate, he joined
AEON Co., Ltd., in 2015. He has had an illustrious sevenyear career ranging from Management Trainee to StoreManager in AEON, managing sales and operation planning.
Before coming to Malaysia, Mr. Okada headed the Project
Team for AEON Co., Ltd., Japan. which conducted researchand business planning and eventually led to the establishmentof Bio C’Bon Japon, a joint-venture (JV) company with aFrench company. Bio C’Bon Japon operates an organic
speciality supermarket business in Japan as Managing
Director between 2019 to mid-2022. Mr. Okada joined AEON
CO. (M) BHD. as Deputy Managing Director/Chief Operating
Officer in July 2022 before his appointment to Managing
Director on 1 March 2024.

96

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

BOARD OF DIRECTORS’ PROFILE

En. Hisham Zainal Mokhtar

Pn. Zaida Khalida Shaari

Senior Independent Non-Executive Director

Independent Non-Executive Director

61

56

M

F

Date of Appointment: 1 July 2022

Date of Appointment: 1 July 2022

Board Committee:• Chairman of Audit Committee• Member of Sustainability and Risk Management Committee

Board Committee:• Chairman of Nomination and Remuneration Committee• Member of Audit Committee

Directorship(s) in other PublicCompanies:• KPJ Healthcare Berhad• Telekom Malaysia Berhad

Directorship(s) in other Public Companies/Listed
Companies:• UEM Sunrise Berhad• Cement Industries of Malaysia Berhad• MNRB Holdings Berhad• Pelaburan Hartanah Nasional BerhadCompanies/Listed

Academic/Professional Qualification:• Chartered Financial Analyst, CFA Institute, USA• Master of Business Administration, Massachusetts Instituteof Technology - Sloan School of Management• Master of Science, Mathematics, Illinois State University• Bachelor of Science, Mathematics, Illinois State University

En. Hisham Zainal Mokhtar began his career in 1987 at
Universal Life and General Insurance, followed by William
M. Mercer Sdn. Bhd. in 1988. He transitioned to investment
analysis in 1991 with Crosby Research (M) Sdn Bhd, later
moving to Barings Research (Malaysia) Sdn Bhd in 1994
and UBS Research (Malaysia) Sdn Bhd in 1996. In 1998,
he became a financial consultant at Sithe Pacific LLC
before co-founding the boutique investment advisory
firm KE Malaysia Capital Partners Sdn Bhd. He joined
Tricubes Berhad in 2001 and subsequently progressed toassumed the role of Chief Financial Officer. From 2005 to
2014, he served at Khazanah Nasional Bhd, concluding as
Director in the Investments Division. Following his role as
Chief Operating Officer at Astro Overseas Ltd until 2018,he held his final management position as a Director in
MIDF Bhd’s Group Managing Director’s Office until 2019.
Since August 2018, he has served as a Business Coach at
Asia School of Business.

Academic/Professional Qualification:• MBA, University of Strathclyde• Barrister-at-Law, Gray’s Inn• Bachelor of Laws - LLB, University of Warwick

Pn. Zaida Khalida Shaari commenced her career as an
Advocate & Solicitor in Zain & Co in 1991. In 1997, shejoined PNB as a Senior Compliance Officer, moving
up the ranks over a nine-year stint to positions such as
Head of Legal and Company Secretary. She later joined
Khazanah Nasional Bhd in 2007 as an Executive Director.
In 2020, she was appointed as the Chief Executive Officer
of Yayasan AMIR which is an education-focused not-forprofit organisation incorporated by Khazanah before
being appointed as their Advisor in 2022. Zaida is also
currently an advisor to MeReka, an alternative education
entity that aims to upskill the youth on the necessary
digital and other skills for the future. She was recently
appointed as a member of the Investment Panel of KWAP.

Corporate Governance

97

BOARD OF DIRECTORS’ PROFILE

Dato’ Merina Abu Tahir

En. Mohamad Abdul Naser Md Jaafar @ Yunus

Independent Non-Executive Director

Independent Non-Executive Director

57

59

F

M

Date of Appointment: 18 May 2023

Date of Appointment: 18 May 2023

Board Committee:• Member of Audit Committee• Member of Sustainability and Risk Management Committee

Board Committee:• Member of Nomination and Remuneration Committee• Member of Audit Committee

Directorship(s) in other
Companies:• Tenaga Nasional Berhad• S P Setia BerhadCompanies/Listed

Directorship(s) in other Public Companies/Listed
Companies:• Trustee of Steinbeis Malaysia Foundation (Non-Profit
Foundation under MoF)

Academic/Professional Qualification:• Fellow, Association of Chartered Certified Accountants(FCCA)• Member, Malaysian Institute of Accountants (MIA)• Member, Malaysian Institute of Certified Public
Accountants (MICPA)• Member, ASEAN Chartered Professional Accountant• Member, Institute of Internal Auditors Malaysia (IIAM)

Academic/Professional Qualification:• Master of Business Administration (Finance), University ofNorth Texas• Bachelor of Business Administration (Finance), University ofNorth Texas

Dato' Merina has over 30 years of experience in financeand accounting locally and internationally. Her extensive
experience includes past roles as Chief Financial Officer
of Tabung Haji (TH) and senior management roles at
Malaysia Airlines Berhad/Malaysian Airline System
Berhad, Amanah Capital Partners Berhad, and Sime
Darby Berhad, covering finance, business development,
audit, governance, and ethics. Actively contributing to theaccounting profession, Dato' Merina is currently a Council
Member of ACCA, member of ACCA Global Forum on
Governance Risk & Performance and MIA Education
Board. She is the past Chairperson of the ACCA Malaysia
Advisory Committee and former Council member of MIA.
Dato' Merina does not have any other conflict of interest
except which may arise by virtue of her being a Director
of S P Setia Berhad.

En. Naser Jaafar is an accomplished executive with adistinguished career in banking, investment, finance,
venture capital, and sustainability. As the former CEO
and COO of Agensi Inovasi Malaysia, he played a key rolein driving national innovation strategies. With a decadelong tenure as the CEO of Bank of America, Malaysia,
En. Naser demonstrated strategic leadership in navigating
dynamic market conditions. His extensive banking
experience includes roles at Deutsche Bank Malaysia andregional positions at Bank of America in Singapore.

Public98

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

BOARD OF DIRECTORS’ PROFILE

MS. Jenifer Thien BIT LEONG

MR. Hiroaki Egawa

Independent Non-Executive Director

Non-Independent Non-Executive Director

56

57

F

M

Date of Appointment: 18 May 2023

Date of Appointment: 1 July 2022

Board Committee:• Member of Sustainability and Risk Management Committee• Member of Nomination and Remuneration Committee

Board Committee:
Nil

Directorship(s) in other Public Companies/Listed
Companies:• UEM Edgenta Berhad• Malaysian Pacific Industries Berhad• Sime Darby Plantation Berhad

Directorship(s)Companies:
Nil

in

other

PublicCompanies/Listed

Academic/Professional Qualification:• Bachelor of Economics, University of Tokyo

Academic/Professional Qualification:• Bachelor of Science - BS, Food Science andTechnology,
Universiti Putra Malaysia

Ms. Jenifer Thien is the Founder and Principal of Gritand Pace, through which she advises corporations on
Environmental, Social and Governance (ESG) strategy andwhat it takes to drive change in supply chain, procurement,
operational excellence and organisation development.
She has over 30 years of international senior executive
experience in the consumer-packaged goods industry andhad the opportunity to live and work in several countries
across Asia and the US throughout her career. This
includes 25 years with Mars, Incorporated, where she lastserved as the Global Chief Procurement Officer. Ms. Jenifer
has successfully led complex business transformation,
M&A and sustainability programmes through her deep
understanding of the business enterprise, the ability
to mobilise required capabilities, as well as intensive
stakeholder engagement. She is also an alumnus ofexecutive programmes at the Global Competent Boards,
London Business School, Harvard Business School andCentre for Creative Leadership.

Mr. Hiroaki Egawa hails from a strong corporate financial
banking background, kickstarting his career in The Dai-Ichi
Kangyo Bank in 1989. He then joined the Mizuho Corporate
Bank Ltd., Japan and served under many positions aswell as portfolios including Counselor and later, Deputy
General Manager of the Americas Audit Office Business
Audit Department; General Manager of Yokohama
Branch and General Manager of the Corporate Finance
Division in Mizuho Americas. Moving into new horizons,
Mr. Egawa joined AEON Co., Ltd., Japan in 2021 serving
as the Chief Affiliate Companies Officer of AEON Co., Ltd.,
Japan before serving as the Executive Officer, Financeand Business Management of AEON Co., Ltd., Japan since
March 2022.

Corporate Governance

99

BOARD OF DIRECTORS’ PROFILE

Ms. Chong Swee Ying

Mr. Tsugutoshi Seko

Non-Independent Non-Executive Director

Executive Director

59

54

F

M

Date of Appointment: 23 August 2018

Date of Appointment: 1 July 2022

Board Committee:• Chairman of Sustainability and Risk Management
Committee• Member of Nomination and Remuneration Committee

Board Committee:• Nil

Directorship(s) in other PublicCompanies:• Kerjaya Prospek Group BerhadCompanies/Listed

Directorship(s)Companies:
• Nil

in

other

PublicCompanies/Listed

Academic/Professional Qualification:• Bachelor of Arts, Kansai University

Academic/Professional Qualification:• Tunku Abdul Rahman College, Kuala Lumpur

Ms. Chong Swee Ying started her journey with AEON
CO. (M) BHD. in 1985 as an Administration staff. In 1990,
she was the pioneer staff selected to undergo a yearlong on-job training in Japan. From 1985 to 2002, she ledvarious departments including Hardline Merchandiser,
Softline Group Leader and Leasing Manager. In 2003,
she was appointed General Manager of Shopping
Centre Management, New Business Development, StoreOperations and Marketing. In 2011, she was appointed
Executive Director for AEON Fantasy (Malaysia) Sdn Bhd
and promoted to Managing Director in 2012. She retired
from the same position in July 2018. Subsequently,
she served as Advisor to AEON Fantasy (Malaysia) Sdn
Bhd for over three years. She has over three decadesof diverse experience in the retail business, property
management and new business development, picking up
numerous Executive of the Year awards along her way.

Mr. Tsugutoshi Seko started his career with AEON
Co., Ltd., Japan in 1993. In 2004, Mr. Seko became the
Human Resource Manager in the Kanto Division of
AEON Co., Ltd., Japan and subsequently was posted
to AEON Co., Ltd., Japan's Human Resource Planning
Department. Mandated to spearhead the department, he
was appointed as Group Human Resource Department
Manager and progressed to General Manager of Group
Human Resource Department in 2015. Before his
appointment in AEON CO. (M) BHD., Mr. Seko served in
AEON (Cambodia) Co., Ltd. as Senior General Manager
from 2018-2021 and later, as Chairman and Managing
Director of AEON (Cambodia) Co., Ltd.

100

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

AEON LEADERSHIP COUNCIL
from left to right:

MR. LEE BENG BENG
Chief Property Officer

DR. KASUMA SATRIA
MAT JADI
Chief Human Resources Officer

MS. LOW NGAI YUEN

MS. AUDREY LIM SUAN IMM

Chief Merchandising andMarketing Officer

Acting Co-Chief Operating
Officer Retail

Mr. TSUGUTOSHI SEKO
Deputy Managing Director/
Chief Governance Officer

Corporate Governance101

AEON LEADERSHIP COUNCIL

MR. NAOYAOKADAManaging Director

PN. MUNIRAH AZMI

MS. TAN AI LEEActing Co-Chief Operating
Officer Mall

Chief Financial Officer

MR. DJONIHERLAMBANG
Chief Technology Officer

102

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

AEON LEADERSHIP COUNCIL'S PROFILE

MR. NAOYA OKADA

MS. Audrey Lim Suan Imm

Managing Director

Acting Co-Chief Operating Officer Retail

40

Date of Appointment:
1 March 2024

M

For more information, please refer to page 95.

53

Date of Appointment:
1 March 2024

F

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Overall management of AEON Retail Business Units(Departmental Stores and Supermarket, AEON
MaxValu, AEON Wellness and DAISO)• Overall management of AEON Operation• Oversee operational capability and commercial
strategy across Retail business

MR. TSUGUTOSHI SEKO
Deputy Managing Director/Chief Governance Officer

54

Date of Appointment:
1 July 2022

M

For more information, please refer to page 99.

Gender44%

Academic/Professional Qualification:• Executive Master of Business Administration (RetailManagement), Open University Malaysia
Experience:• Division Head, GMS Operations, AEON CO. (M) BHD.
• Head, New Business, AEON CO. (M) BHD.
• Head, GMS Operations, Merchandising, Human
Resources and Marketing, AEON CO. (M) BHD.

Tenure56%

MaleFemale33%

67%

0 - 3 Years> 3 Years

Corporate Governance103

AEON LEADERSHIP COUNCIL'S PROFILE

PN. Munirah Azmi

MS. Tan Ai Lee

Acting Co-Chief Operating Officer Mall

Chief Financial Officer

45

Date of Appointment:
1 March 2024

F

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Overall management of AEON Mall Leasing• Oversee operational capability and commercial
strategy across Mall businessAcademic/Professional Qualification:• Degree of International Business, Universiti Utara
Malaysia
Experience:• Head, Mall Operations, Leasing & Marketing,
AEON CO. (M) BHD.
• General Manager, Mall Operations, AEON CO. (M) BHD.
• Assistant General Manager, Human Resources
Division, AEON CO. (M) BHD.
• Senior Manager, Mall Operations & Credit Control,
AEON CO. (M) BHD.

Nationality

40

Date of Appointment:
21 January 2024

F

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Oversee the strategic execution of business plans todeliver on our operating and financial goals to create
long-term value for our shareholders• Oversee finance function that encompasses planning,
forecasting, management reporting, financial reportingand finance business partners• Lead key functions in finance, investment and investor
relations to support overall strategic goals
Academic/Professional Qualification:• Fellow Member of the Association of Chartered
Certified Accountants (FCCA)
Experience:• Head of Business Finance, AEON CO. (M) BHD.
• Vice President Finance, Silverlake Symmetri Malaysia• Head of Management Reporting and Corporate
Planning, Astro Malaysia Holdings Berhad• Assistant Vice President, Finance Business Partner,
Astro Malaysia Holdings Berhad• Transaction Services Manager, PricewaterhouseCoopers
Malaysia

AGE

11%
Malaysian
22%

67%

Japanese
Indonesian

56%

44%

< 50 Years Old
50 - 59 Years Old

104

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

AEON LEADERSHIP COUNCIL'S PROFILE

Dr. Kasuma Satria Mat Jadi

MR. Lee Beng Beng

Chief Human Resources Officer

Chief Property Officer

51

Date of Appointment:
1 April 2020

M

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Overall management and operations of Human
Resources, Corporate Communications, Corporate
Services and Sustainability divisions• Setting, executing and operationalising AEON’s
people, business and branding strategies• Oversee AEON's effort on sustainability with focuses
on Environmental, Social and GovernanceAcademic/Professional Qualification:• Doctorate in Business Administration, Multimedia
University• MBA, University of Huddersfield• Degree in Business Administration (Hons.), Universiti
Utara Malaysia
Experience:• General Manager, Education Operations, LeapEd
Services Sdn Bhd• Director and Vice President, Sales and Business
Development, Onshore and Offshore, Malaysia andBrunei, TechnipFMC• Vice President, East Malaysia and Brunei, Technip• Regional Vice President, Human Resources andCorporate Development, Asia Pacific, Technip• Group Vice President, Global Sourcing and
Recruitment, France, Technip

54

Date of Appointment:
12 March 2020

M

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Overall strategy, planning and management of theProperty division• Develop strategy, planning and setting directions
for property and related scopes including businessdevelopment, retail planning, concept and design andproject management• Oversee property management, planning, maintenanceand operations of facilities of the properties
Academic/Professional Qualification:• Diploma in Business and Management, UK• Registered Property Manager (PM0352) with the
Malaysian Board of Valuers, Appraisers, Estate Agentsand Property Managers (BOVAEP/LPPEH)• Certified Centre Manager (CCM) with Persatuan
Pengurusan Kompleks Malaysia (PPKM)
Experience:• Director of Retail at Malaysia Land Properties Group,
Malaysia• Director of Retail at OSK Property Bhd. Malaysia• Head of Retail and Commercial at Belleview Group
Malaysia• Various senior management positions with property
development companies and shopping centres
throughout Malaysia

Corporate Governance

105

AEON LEADERSHIP COUNCIL'S PROFILE

MS. Low Ngai Yuen

MR. DJONI HERLAMBANG

Chief Merchandising and Marketing Officer

Chief Technology Officer

47

F

Directorship(s) in othercompanies:• GDEX Berhad• OSK Group Berhad

Date of Appointment:
1 July 2021
publiccompanies/listed

Responsibilities:• Develop strategic initiatives to expand market
presence across physical stores and online platforms
for a consistent and seamless customer experience• Create and implement scalable partnerships andcommunity-centric loyalty system, leveraging data andanalytics to enhance customer journeys and lifestyles• Identify new opportunities and implement innovations
for sustainable growth of private brands and labels,aligning with evolving customer demands
Academic/Professional Qualification:• Bachelor of Science in Biology and Chemistry,Campbell University, North Carolina• Filmmaking, University of Melbourne
Experience:• Elected to the Pahang Economic Advisory Council
2024/5• President, Persatuan Kakiseni• Founder and President, WOMENgirls - Pertubuhan
Pembangunan Kendiri Wanita dan Gadis• Executive Director/CEO, Global Entrepreneurship
Movement Association• Co-founder of Makespace, Fearless Ideas and Garang
Pictures• Executive Officer for Special Development,The MeliumGroup Sdn Bhd• Marketing and Communications Director, Carrefour
Malaysia-Singapore• Executive Producer and Content Creator, New Vision
Media• Film/TV/Radio Producer and Director

57

Date of Appointment:
15 April 2020

M

Directorship(s)companies:
• Nil

in

other

publiccompanies/listed

Responsibilities:• Oversee digital transformation initiative• Oversee the set-up of AEON IT Department as a profitcentric business unit
• Advise the best suitable technology for the Company• Overall management of the design and deployment ofseveral customised technology system and platforms
to improve customer experience• Analyse the costs, value and risks of technology toadvise management and suggest actions
Academic/Professional Qualification:• Master’s Degree in Information System
Experience:• More than 30 years of experience in the retail industry,
specialising in digital transformation• Held various senior management positions leading the
IT Divisions in several retail organisations throughout
Asia

Note: Save as disclosed in this annual report, all the Senior
Management mentioned in pages 100 to 105 have noconflict of interest or potential conflict of interest, includinginterest in any competing business with AEON CO. (M) BHD.
or any family relationship with any Director and/or major
shareholder or any convictions for offences within the past
5 years and any public sanction or penalty imposed by therelevant regulatory bodies during the financial year, except
for traffic summons, if any.

106

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

CORPORATE GOVERNANCE OVERVIEWSTATEMENTThe Board of Directors (Board) of aeon co. (M) Bhd. (Aeon or the Company) believes
that sound Corporate Governance (cg) practices are vital for enhancing business integrity,
accountability and transparency while maintaining effective oversight of management,
investors’ confidence as well as delivering shareholder value.
Our CG Framework is based on the following key statutory provisions, best practices, policies and guidelines:•••

Companies Act 2016;
Malaysian Code on Corporate Governance 2021 (MCCG); andMain Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad (Bursa Securities)

This Corporate Governance Overview Statement presents key governance highlights for the financial year 2023 and up
to the date of publication of this Integrated Annual Report, outlining AEON’s application of the 3 principles, 43 practices
and 5 Step-up practices of the MCCG, during the year under review.
This statement is complemented with a Corporate Governance Report (CG Report) that is prepared based on a prescribed
format pursuant to paragraph 15.25 of the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities
Berhad (Bursa Securities), which is made available on the Company’s website http://aeongroupmalaysia.com as well
as via an announcement on the website of Bursa Securities. This statement should also be read in conjunction with theStatement on Risk Management and Internal Control (SORMIC) and the Audit Committee (AC) Report as well as otheraccompanying information in this Integrated Annual Report.
The Board is committed to maintaining the highest standards of good governance to promote quality decision-making
and the execution of those decisions within a disciplined framework of policies and procedures, in respect of thefollowing principles:
Principle A – Board Leadership and Effectiveness;
Principle B – Effective Audit and Risk Management; andPrinciple C – Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders.
CG Framework
AEON has in place a robust CG framework that is reviewed annually to ensure relevance and fitness for purpose. The
Board is assisted by three Board committees in exercising active oversight over the day-to-day management of theCompany, led by the Managing Director.
CG Framework
Stakeholders
Board of Directors

Audit
Committee

Sustainability and
Risk Management
Committee

Nomination andRemuneration
Committee

Managing
Director

AEON LeadershipCouncilInternal Audit

Company SecretaryCorporate Governance107

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A

Board Leadership and Effectiveness
The Board is accountable and responsible for the performance and affairs of the Company byoverseeing and appraising the Company’s strategies, policies, and performance. The Board
abides by the principles of stewardship and manages the business and affairs of the Company
in accordance with the Board Charter with the objective of delivering long-term growth and asustainable business.
The Board Charter sets out the roles, functions,composition, operations, and processes of the Board,
having regard to the principles of good corporate
governance and requirements of MMLR of Bursa
Securities. It further defines the matters that are reserved
for the Board and its Committees as well as the roles
and responsibilities of the Chairman and the Managing
Director.

Company Secretaries
The Company Secretaries play an advisory role to
the Board, particularly with regards to the Company’s
Memorandum and Articles of Association, theBoard policies and procedures, and its compliancewith regulatory requirements and legislations. The
Company Secretaries also advise the Board on the
adoption of corporate governance best practices asrecommended under the MCCG.

Under the Chairman’s leadership, Board members
share collective responsibility for corporate governancearrangements. The Board’s roles and responsibilities aredetailed in the Board Charter which is published on the
Company’s website at https://aeongroupmalaysia.com/.
The latest revision of the Board Charter was on
24 November 2023.
I.

The Company Secretaries ensure that deliberations
at the Board and Board Committees meetings are
well-minuted, and matters arising from the Board
and Board Committees meetings are subsequently
communicated to the Management for appropriate
actions.
The Company Secretaries, Ms. Tai Yit Chan and
Ms. Tan Ai Ning, both from Boardroom Corporate
Services Sdn. Bhd. are fellow members of the
Malaysian Institute of Chartered Secretaries
and Administrators and have more than
20 years of experience as Company Secretaries.

BOARD ROLES AND THEIR RESPONSIBILITIESChairman
The Chairman is responsible for the operation andleadership of the Board, ensuring its effectivenessand setting its agenda. The profile of the Chairman isset out in page 95 of this Integrated Annual Report.
II.
Managing Director
The Managing Director is responsible for leading
and managing the Company’s business within a setof authorities delegated by the Board and for the
implementation of the Company’s strategies andpolicies. The profile of the Managing Director, is set
out in page 95 of this Integrated Annual Report.
Independent Non-Executive Directors
The primary responsibility of an Independent NonExecutive Director is to protect the interests of minority
shareholders and other stakeholders. In addition, theIndependent Non-Executive Directors play a key rolein monitoring the implementation of the Company’s
strategy and business performance. The profiles of
the Independent Non-Executive Directors are set out
in pages 95 to 99 of this Integrated Annual Report.

BOARD COMPOSITION
1.

Board Composition and Balance
Currently, our Board comprised 10 Directors,
comprising the Chairman (Independent NonExecutive), 5 Independent Non-Executive
Directors, 2 Non-Independent Non-Executive
Directors, and 2 Executive Directors. The
Company fulfils Paragraphs 15.02(1) of the
MMLR of Bursa Securities which stipulates thatat least 2 Directors or one-third of the Board,whichever is the higher, are Independent
Directors. The Company has at least half ofthe board comprised of Independent Directors
which is sufficient to provide effective oversightof Management.
The profile of each Director is set out on pages
95 to 99 of this Integrated Annual Report.

108

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
2.

the Independent Director is re-designated as a
Non-Independent Non-Executive Director uponcompletion of 9 years tenure. If the Board intends
to retain the Director as an Independent Director
after the Director has served a cumulative term of
9 years but less than 12 years, the Board mustjustify the decision and seek shareholders’approval at general meeting as prescribedunder MCCG. Once an Independent Director
has served a cumulative term of his/her 12th
year, he/she will either be re-designated as a
Non-Independent Non-Executive Director or retire
as Director of the Company.

Board Independence
The Board is mindful of the importance ofindependence and objectivity in its decisionmaking process in line with MCCG, which is oneof its focus areas on corporate governance.
The Board delegates to the Managing Director
who is supported by the AEON LeadershipCouncil (ALC), which implements the Company’s
strategic plan, policies, and decisions adopted
by the Board to achieve the Company’s objectiveof creating long-term value for its stakeholders
through excelling in customer service andprovidingsustainable
best-in-industry
performance in the retail sector.
The Company’s Independent Directors are
independent of the Management and free ofany business or other relationship that could
materially interfere with the exercise of unfetteredand independent judgement considering theinterest, not only of the Company but also ofshareholders, employees, customers, partners
and communities in which the Company conducts
businesses. The Board, via the Nomination andRemuneration Committee, assesses each Director’s
independence to ensure ongoing compliance withthis requirement annually. On 24 November 2023,
En. Hisham Zainal Mokhtar is appointed as the
Senior Independent Director to whom concerns
on matters relating to the corporate governanceof the Company can be conveyed.
Any Director who considers that he/she hasor may have a conflict of interest or potential
conflict of interest or a material personal interest
or a direct or indirect interest or relationship that
could reasonably be considered to influencein a material way the Director’s decision in any
matter concerning the Company is required to
immediately disclose to the Board and to abstain
from participating in any discussion or voting on
the respective matter.
The Board is aware that the tenure of an Independent
Director should not exceed a cumulative term of
9 years as recommended by MCCG and 12 years
as mandated under the MMLR. An Independent
Director may continue to serve the Board if

During the 38th AGM, Datuk Syed Ahmad Helmy
Syed Ahmad, Dato’ Tunku Putra Badlishah Ibni
Tunku Annuar and En. Abdul Rahim Abdul Hamid
who had served the Company as Independent
Directors for more than 9 years, had expressed
their intention for not seeking for re-election.
Hence, they had retired at the conclusion of the
38th AGM.
Subsequently, the Board had on 18 May 2023,
appointed Dato' Merina Abu Tahir, En. Mohamad
Abdul Naser Md Jaafar @ Yunus and Ms. Jenifer
Thien Bit Leong as Independent Non-Executive
Directors of the Company.
3.

Board Committees and Delegation
The Board delegates the implementation of its
strategy to the Company’s Management. However,the Board remains ultimately responsible forcorporate governance and the affairs of theCompany. While at all times the Board retains
full responsibility for guiding and monitoring
the Company in discharging its responsibilities,
the Board has established the following Board
Committees to perform certain of its functions
and to provide it with recommendations andadvices:•••

Audit Committee (AC);Nomination and Remuneration Committee(NRC); andSustainability
and
Risk
Management
Committee (SRMC).

Corporate Governance109

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
The following diagram shows a brief overview of the main Board Committees of the Company, each of whichis explained in further detail as below:
Board of Directors
NRC
Responsibilities:• Board size and composition• Selection and recruitment of
Directors• Board performance evaluation• Committee performance
evaluation• Directors’ training• Remuneration policy• Directors’ fees and benefits• Performance-related pay
schemes• Fit and proper criteria

AC
Responsibilities:• Internal audit• External audit• Financial reporting• Audit reports• Related party transaction• Internal controls• Conflict of interest• Legal matters

SRMC
Responsibilities:• Risk management• Whistleblowing and integrity
matters• Sustainability Managementand ESG• Risk Management
Committee (RMC)
performance evaluation• Sustainability Steering
Committee (SSC)
performance evaluation

Each Committee operates in accordance with the written Terms of Reference approved by the Board. The Board
reviews the Terms of Reference of each Committee from time to time. The terms of office and performance of
the AC is reviewed on regular basis by the NRC. The Board approves the appointment of the members and the
Chairman of each Committee.
The Terms of Reference of each of the Board Committee are published on the Company’s website at
http://ir2.chartnexus.com/aeon/corporate-governance.php

4.

Sustainability Governance
At AEON, we embed sustainability in the way we do business, encompassing our entire organisation, strategicplanning and governance framework. We believe that a sound governance structure is important as it clearly
defines the roles and responsibilities across the Company. We uphold the highest level of accountability andintegrity to deliver on our sustainability commitments and realise our aspirations.
In realising our sustainability initiatives, we have in place a robust governance structure that is outlined in
our Board Charter, with the Board providing oversight on AEON’s overall sustainability strategy. The Board is
responsible for ensuring adequate measures for systems and processes are in place. This is supported by the
SRMC.
The SRMC was established in 18 May 2023 to provide sustainability and climate risk strategy, aligned to AEON’s
strategic business objectives. The SRMC is chaired by Ms. Chong Swee Ying and supported by the Sustainability
Steering Committee (SSC), whose role is to oversee the implementation of sustainability strategy and performance.
Sustainability Task Force (STF) drives the overall ESG initiatives and keeps track of our ESG performance against
targets set.

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
AEON’s Sustainability Governance structure and Key Responsibilities

BOD• Headed by
Board Chairman• Provides oversights on sustainability and climate changerelated risks management and opportunities.
• Reviews and approves Company’s disclosure and strategic
direction in relation to sustainability matters.
• Identifies key ESG and climate risks faced by AEON andensures the implementation of appropriate internal controls
and mitigating measures to manage such risk.
• Accountable for AEON’s overall sustainability strategy andperformance.

SRMC• Headed by
SRMC Chairman
and members• Consists ofcurrent SRMC
composition• Creates high level sustainability and climate risk strategy,aligned to AEON’s strategic business objectives.
• Determines robust process to identify, manage and monitor
critical sustainability and climate risks, oversees executionof processes, and ensures continuous improvement as thebusiness environment changes.
• Oversees overall company conduct and reviews the results ofcompany-wide risk assessments, including the identification
and reporting of critical sustainability and climate risks.
• Advises the Board on risk strategies and coordinates activitiesof the various standing Board committees for sustainability andclimate risk oversight.

SSC• Headedby Deputy
Managing
Director• Consist of ALC
members• Oversees the implementation of sustainability strategy andperformance.
• Reviews and recommends to the SRMC for approval on the
Company’s strategic direction in relation to sustainability
matters.
• Provides updates to the SRMC regarding the status andperformance of sustainability-related initiatives on quarterly
basis.

• Co-headed by
Chief Human
Resource Officer
and Head of
Sustainability• Consists offunctional heads• Manages overall sustainability performance, drive initiatives
and monitors targets.
• Acts as the central point of contact for all sustainability-related
matters, provides updates during SSC/ALC meetings.
• Establishes, executes and keeps track on all sustainability
initiatives, including data collection.

STF

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
5.	Directors’ Commitment
The Board endeavours to meet at least four times a year, at quarterly intervals which are scheduled well inadvance before the end of the preceding financial year to facilitate the Directors in planning their meetingschedules for the year. The Board is satisfied with the level of commitment given by the Directors towards
fulfilling their roles and responsibilities. All pertinent issues discussed at the Board meetings in arriving at thedecisions and conclusions are properly recorded by the Company Secretaries. The Board met six times during
the financial year under review. The details of Directors’ attendance are set out as follows:
No. DIRECTOR

NO. OF MEETINGS ATTENDED

1.

Datuk Iskandar Sarudin(Independent Non-Executive Chairman)

6/6

2.

Mr. Naoya Okada(Appointed as Managing Director on 1 March 2024)

6/6

3.

Mr. Tsugutoshi Seko
(Deputy Managing Director/Chief Governance Officer)

6/6

4.

En. Hisham Zainal Mokhtar(Senior Independent Non-Executive Director)

6/6

5.

Pn. Zaida Khalida Shaari(Independent Non-Executive Director)

5/6

6.

Dato' Merina Abu Tahir(Appointed as Independent Non-Executive Director on 18 May 2023)

3/3

7.

Ms. Jenifer Thien Bit Leong(Appointed as Independent Non-Executive Director on 18 May 2023)

2/3

8.

En. Mohamad Abdul Naser Md Jaafar @ Yunus(Appointed as Independent Non-Executive Director on 18 May 2023)

3/3

9.

Ms. Chong Swee Ying
(Non-Independent Non-Executive Director)

6/6

10.

Mr. Hiroaki Egawa(Non-Independent Non-Executive Director)

5/6

11.

Datuk Syed Ahmad Helmy Syed Ahmad(Retired as Independent Non-Executive Director on 17 May 2023)

3/3

12.

Dato’ Tunku Putra Badlishah Ibni Tunku Annuar(Retired as Independent Non-Executive Director on 17 May 2023)

2/3

13.

En. Abdul Rahim Abdul Hamid(Retired as Independent Non-Executive Director on 17 May 2023)

2/3

14.

Mr. Keiji Ono(Resigned as Managing Director on 29 February 2024)

6/6

It is the Board’s policy for Directors to notify the Chairman before accepting any new directorship notwithstandingthat the MMLR allows a Director to sit on the Board of five Listed Issuers.
In order to enable Directors to sustain active participation in the Board deliberations, Directors have access tocontinuing education programmes or trainings. During the financial year under review, Directors have devoted
sufficient time to update their knowledge and enhance their skills by attending various trainings. Details of
trainings attended by the Directors are set out on pages 114 to 117 of this Statement. Furthermore, the Directors
visit existing stores and/or new sites/business outlets from time to time to familiarise themselves and havethorough understanding and insights of the Company’s operations and strategies.

112

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
6.	NRC – Board Nomination and Appointment of Directors
The Company’s NRC comprises exclusively of Non-Executive Directors, a majority of whom are independentand comprises four members in total. The composition of the NRC is as follows:
DIRECTORSTATUS OF DIRECTORSHIP

Pn. Zaida Khalida Shaari

Chairman(Independent Non-Executive Director)

Ms. Chong Swee Ying

Member(Non-Independent Non-Executive Director)

Ms. Jenifer Thien Bit Leong(Appointed on 18 May 2023)

Member(Independent Non-Executive Director)

En. Mohamad Abdul Naser Md Jaafar @ Yunus(Appointed on 18 May 2023)

Member(Independent Non-Executive Director)

Dato’ Tunku Putra Badlishah Ibni Tunku Annuar(Retired on 17 May 2023)

Member(Independent Non-Executive Director)

Datuk Syed Ahmad Helmy Syed Ahmad(Retired on 17 May 2023)

Member(Independent Non-Executive Director)

En. Abdul Rahim Abdul Hamid(Retired on 17 May 2023)

Member(Independent Non-Executive Director)

The NRC is responsible for making recommendations to the Board on the most appropriate Board sizeand composition. This responsibility includes making recommendations on the desirable competencies,
experience, and attributes of the Board members and strategies to address Board diversity. In discharging its
responsibilities, the NRC develops certain criteria used in the recruitment process and annual assessment of
Directors. In evaluating the suitability of candidates, the NRC considers the following factors:
•
•
•
•
•
•
•

skills, knowledge, expertise and experience;
professionalism and integrity;commitment (including time commitment) and contribution;
background, character and competence;
fit and proper criteria;boardroom diversity; andin the case of candidates for the position of Independent Non-Executive Directors, the NRC also evaluate
the candidates’ ability to discharge such responsibilities/functions as are expected from Independent NonExecutive Directors.
The details are stated in the Terms of Reference of the NRC that is available on the Company’s website at
http://ir2.chartnexus.com/aeon/corporate-governance.php

The Board may appoint an individual to be a Director by having a selection process for the new appointee asrecommended by the NRC to the Board. The appointed individual will stand for election at the next Annual
General Meeting (AGM) in accordance with the Articles of Association of the Company. The Board had utilised
independent sources and recommendations from the Directors, Management and shareholders of the Company
to identify suitable qualified candidate to be appointed as Director of the Company during the year. The NRC
will assess and consider the suitability of the candidate based on the criteria set before recommending it to theBoard for appointment.
The NRC arranges induction for newly appointed Directors such as visits to the Company’s significant businesses
and meetings with the ALCs, as appropriate, to enable the new appointee to have a full understanding of thenature of the business, current issues within the Company and corporate strategies as well as the structure andmanagement of the Company.

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)
7.

Board Assessment and Annual Evaluation
On an annual basis, the NRC reviews the required mix of skills and experience of Directors, the effectiveness of
the Board as a whole, succession plans, Board diversity, including gender, age, ethnicity, backgrounds training
courses for Directors and other qualities of the Board such as core competencies, which Directors should
bring to the Board. A questionnaire was circulated to the Directors for the Directors to carry out self and peer
evaluation on the effectiveness of the Board.
The results of the assessment and comments by Directors regarding the effectiveness of the Board and its
Board Committees were tabled and discussed at the NRC meeting, thereafter reported at the Board meeting by
the NRC Chairman. All assessments and evaluations carried out by the NRC are properly documented.
The NRC meets at least once a year with additional meetings to be convened, if necessary. During the financial
year under review, the NRC held five meetings to:(i)

Evaluate the suitability of candidates and recommend to the Board for appointment of new Directors andchanges to the Board’s and Board Committee’s composition;(ii) Review and assess the mix of skills, expertise, composition, size and experience of the Board, including
the core competencies of both Executive and Non-Executive Directors;(iii) Review the contributions of each Director (including the Managing Director and Executive Directors);(iv) Review the effectiveness of the Board and Board Committees;(v) Fit and proper of Directors who are retiring pursuant to the Articles of Association of the Company at theforthcoming 38th Annual General Meeting of the Company;(vi) Review the appointment of the new Directors and their remuneration packages;(vii) Review and recommend the changes in the composition of Board Committees to the Board;(viii) Review and recommend the segregation of Audit and Risk Management Committee into the Audit
Committee and the Sustainability & Risk Management Committee to the Board;(ix) Review and recommend the Directors’ Fees and benefits payable to the Directors including meetingallowance to the Board for shareholders' approval;(x) Review and approve Managing Director’s Scorecard and Company Scorecard for 2023;(xi) Review and approve succession planning framework for Key Senior Management; and(xii) Review and recommend the appointment of Senior Independent Director to the Board.
8.	Re-election to the Board
The NRC reviewed the Directors’ re-election to the Board and in accordance with the Company’s Articles of
Association, all the Directors are subject to retirement at the AGM every year.
9.	Directors’ Training
The Board, via the NRC, continues to identify appropriate briefings, seminars and courses for the Directors
to attend in order to keep abreast with changes in legislations and regulations affecting the Company. All
Directors have completed the Mandatory Accreditation Programme (MAP) Part I and will endeavours to attend
MAP Part II within the stipulated timeline given by Bursa Securities. The Directors are mindful of the need tocontinue enhancing their skills and knowledge to maximise their effectiveness as Directors during their tenure.
Throughout their period in office, the Directors are continually being updated on the Company’s business andregulatory requirements.
The Fit and Proper Policy can be viewed on our website at http://ir2.chartnexus.com/aeon/corporate-governance.php

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)During the financial year under review, the Board members attended briefings, conferences, forums, seminars
and training programmes as follows:
Directors

Briefing/Conference/Forum/Seminar/Training attended

Date

Datuk Iskandar
Sarudin

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Strategies of Sustainable Business for Future

11 December

AEON Compliance Training for Executives

26 January

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Strategies of Sustainable Business for Future

11 December

AEON Compliance Training for Executives

26 January

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Strategies of Sustainable Business for Future

11 December

Mobile World Capital Barcelona: Velocity Unleashing
Tomorrow’s Technology – Today

27 February –2 MarchSustainability Leadership Programme (Session 3: The End of
Business–as–Usual and Evolving Board Duties)

14 April

Malaysia Retailers Association Conference 2023 – Retail Insights

15 JuneAwareness Session on Corporate Liability Provision by MACC
Officer

25 July

Khazanah Megatrends Forum 2023

2 – 3 October

BPMB – 50 Anniversary Forum – Development Financing:
The Next 50 Years

22 November

Strategies of Sustainable Business for Future

11 December

Decarbonisation in the Cement Industry by Roland Berger

3 February

Presentation of Gap Assessment Report on MNRB Group
Sustainability Roadmap

8 May

Cybersecurity Trends & Development

22 MayMFRS17 Insurance Contracts: Understanding its Impact andConsequences

30 MayBase Erosion and Profit Shifting Pillar 2 and Tax Corporate
Governance Framework Briefing

31 MayRevving up the Race for Sustainability

21 – 22 June

Key Provisions and Compliance Requirements under theCompanies Act 2016 by Suruhanjaya Syarikat Malaysia

27 JuneSustainability Awareness: Sustainability at Work

7 July2023 UEM Sunrise’s Anti–Corruption Talk

24 JulyPNB Knowledge Forum I: “Harnessing Innovation andTechnology for Sustainable Business”

27 July

Values as a Source of Competitive Advantage

28 July

Green Tour Series 1

31 July

Mr. Naoya
Okada

Mr. Tsugutoshi
Seko

En. Hisham
Zainal Mokhtar

thPn. Zaida
Khalida ShaariCorporate Governance115

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)Directors

Briefing/Conference/Forum/Seminar/Training attended

Date

Pn. Zaida
Khalida Shaari(cont'd)MFRS 17: Impact & Changes

16 AugustBeyond Box–Ticking: Enhancing Effectiveness of Nominating
Committees

5 September

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Board and Senior Management's Leadership Role in
Enhancing AML/CFT Compliance Culture

7 November

Anti–Money Laundering & Anti–Bribery & Corruption

10 November

PNB Knowledge Forum II: Education Reimagined

15 November

Sustainability Developments & Outlook

30 November

2023 Group Shariah Committee Engagement Session with the
BOD FORUM: An Insight from the Maqasidi Perspective

7 December

Sustainability Transition – Innovation As Change Drivers

19 MayICDM PowerTalk Advancing Cyber Resilience: Board's Top 3
Must–Knows

25 May16th Asia Pacific Thought Leadership Forum (APTL)

25 MayA leadership agenda: Driving trust from the top

31 May

MIA Conference 2023

13 – 14 June

Eliciting Participation in Workshop/Discussion

22 JuneJust Transition: Asia Pacific roundtable

28 June

CGM Chairperson Masterclass Series: Scaling Up the Circular
Economy30 JuneWebinar on Assessment of the Board, Board Committees &Individual Directors

6 JulyStepping up to The Role: Objective Assurance & Advisory On ESG

13 July

Beyond box ticking – Essentials for effective Remuneration
Committees

7 August

Remaking Corporate Governance for an ESG World

14 August

The Energy Transition Conference 2023: Accelerating a
responsible energy transition28 – 29 August

The law behind corporate governance

4 September

The Arrival of ISSB Standards and the Continued Relevance ofIntegrated Reporting

4 September

Sustainability briefing to the Board

8 September

Mandatory Accreditation Programme Part II: Leading for
Impact (LIP)

19 – 20 September

ACCA Technical Symposium 2023

21 September

Dato' Merina
Abu Tahir

116

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)Directors

Briefing/Conference/Forum/Seminar/Training attended

Date

Dato' Merina
Abu Tahir(cont'd)Khazanah Megatrends Forum 2023

2 – 3 October

In–house Directors’ Training: Decarbonisation Workshop

11 October

What Amounts to a Conflict of Interest by Directors

13 October

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

PNB Knowledge Forum 2023: Education Reimagined

15 November

Enlit Europe 2023

28 – 30 November

Strategies of Sustainable Business for Future

11 December

In–house Directors’ Training: Conflicts of Interest

15 December

Ms. Jenifer
Thien Bit Leong

Advancing Cyber Resillience – Board's Top 3 Must–Knows

25 MayTop in Tech – Setting ESG at the Forefront

25 MayAre you providing what your employees value

27 JuneESG and Climate Governance International Conference – What
Directors Need to Know

28 JuneAdvance Strategy for Directors

7 JulyClimate Reporting & Disclosure: How Boards can Prepare for
Success

13 July

Generative AI – An Opportunity or Risk?

20 July

Nominating Committee Essentials

25 July

Board NRC Committee Dialogue

26 July

Bridging the Gap: Metaverse, Board of Directors, Net Zero & NFT

2 August

Chairperson Masterclass: The Concept of Double Materiality

3 August

National Climate Governance Summit

5 September

Climate Governance Workshops for SME

6 September

Navigating the Rising Tide of Financial Crime & Technology

8 September

CIMB Cooler Earth Summit

11 September

Mandatory Accreditation Programme Part II – Leading for
Impact19 – 20 September

Khazanah Megatrends Forum 2023

2 – 3 October

Board Oversight of Climate Risks and Opportunities

10 October

The Board & Talent, Culture and Sustainability

10 October

RRA Board Leadership Forum

17 – 18 October

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 OctoberManaging Turnaround for PLCs

2 November

The New Era of Board Duties

16 November

The Wirecard Scandal – A Whistleblower's Perspective

4 December

Strategies for Sustainable Business for Future

11 December

Corporate Governance117

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A (CONT'd)Directors

Briefing/Conference/Forum/Seminar/Training attended

Date

En. Mohamad
Abdul Naser
Md Jaafar @Yunus

Malaysia Retailers Association Conference 2023 - Retail Insights

15 JuneAEON Malaysia Supplier Conference

23 June

MAP by ICDM

28 – 30 August

Bursa Malaysia's Enhanced Conflict of Interest Disclosure
Requirement – Understanding and Navigating its Changes

17 October

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Strategies of Sustainable Business for Future

11 December

FTSE4Good Sustainability Reporting and Management

14 April

Advancing Cyber Resilience: Board’s Top 3 Must-Knows

25 MayMalaysia Retailers Association Conference 2023 - Retail Insights

15 JuneScaling up the Circular Economy

30 June

The Concept of Double Materiality

3 August

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

New Era of Board Duties

16 November

COI Seminar

6 December

Strategies of Sustainable Business for Future

11 December

AEON Compliance Training for Executives

26 January

AEON Policy Meeting in Japan

26 October

AEON Top Seminar in Japan

26 – 27 October

Strategies of Sustainable Business for Future

11 December

Ms. Chong
Swee Ying

Mr. Hiroaki
Egawa

The Company Secretaries brief and highlight the relevant guidelines on statutory and regulatory requirementsfrom time to time to the Board, among others, the amendments to the MMLR of Bursa Securities, the requirementsof MCCG and the Companies Act 2016. The External Auditors also brief the Board members on any current andfuture changes to the Malaysian Financial Reporting Standards that affect the Company’s financial statements.
III.	DIRECTORS’ REMUNERATIONThe NRC also establishes sets of policies and frameworks as well as reviews the remuneration of Directors that is
linked to the strategy and/or performance or long-term objectives of the Company to ensure that the Company is able
to attract and retain capable Directors. The NRC adopts the ultimate holding company’s employee compensation
plan to set the remuneration of its Executive Directors. The Executive Directors’ remunerations are structured to link
rewards to corporate and individual performance. In the case of Non-Executive Directors, the level of remunerationreflects the experience and level of responsibilities undertaken.
The determination of the remuneration packages is a matter for the Board as a whole. The concerned Executive
Directors are abstained from deliberating their own remuneration but may attend the NRC meetings at the invitationof the Chairman of the NRC if their presence is required.
During the financial year under review, the NRC reviewed and recommended the remuneration of the Managing
Director and Executive Directors of the Company for Board’s approval pursuant to theTerms of Reference of the NRC.
Directors’ fees and benefits payable to the Non-Executive Directors had also been reviewed and recommended by
the NRC to the Board to seek shareholders’ approval at the Company’s forthcoming AGM pursuant to the Articles
of Association of the Company. No Director is involved in deciding his/her own remuneration.

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE B

Effective Audit and Risk Management
I.	AUDIT COMMITTEE (AC)The Board had on 18 May 2023, segregated the Audit and Risk Management Committee into Audit Committee andSustainability and Risk Management Committee. The segregation is to allow the Board Committees to focus on its
dedicated roles respectively.
The Board upholds the integrity of financial reporting. The AC is entrusted to provide advice and assistance to theBoard in fulfilling its statutory and fiduciary responsibilities relating to the Company’s internal and external audit
functions, compliance systems and practices, financial statements, accounting and control systems and mattersthat may significantly impact the financial condition or affairs of the business.
The AC is also responsible for ensuring that the financial statements of the Company comply with the applicablefinancial reporting standards in Malaysia.
The AC in its Terms of Reference provides that a former key audit partner has to observe a cooling-off period ofat least three years before being appointed as a member of AC. The AC comprises four members all of whom are
Independent Non-Executive Directors, with En. Hisham Zainal Mokhtar as the AC Chairman. The composition of
the AC, including its roles and responsibilities, the number of meetings and attendance of AC, a summary of AC
activities and Internal Auditors’ activities during the financial year under review are set out on pages 122 to 125
under the Audit Committee Report of this Integrated Annual Report.
II.

SUSTAINABILITY AND RISK MANAGEMENT COMMITTEE (SRMC)
The Sustainability & Risk Management Committee (SRMC) was established by the Board on 18 May 2023 to assist
the Board in fulfilling its governance and oversight responsibilities on risk management and internal control
systems as well as AEON’s overall sustainability journey and strategy.
The SRMC has clear mandates and oversight responsibilities which are formally documented in its Termsof Reference which was reviewed and approved by the Board on 18 May 2023 and published on our website
https://aeongroupmalaysia.com.
The establishment of the SRMC complies with Practice 10.1 and 10.2 of MCCG requirements of having an effective
risk management and internal controls framework as well as its disclosure of adequacy and effectiveness of theframework.
AEON’s risk management framework is aligned to the principles and guidelines under ISO 31000:2018 - Risk
Management, a standard relating to risk management codified by the International Organisation for Standardisation
for the setting of objectives, risk identification, assessment, prioritisation, mitigation and monitoring. The SRMC
assists the Board to discharge these responsibilities by overseeing and reviewing the risk management frameworkand its adequacy and effectiveness with the support of the Risk Management Committee (RMC), which is led by the
Chief Governance Officer. The SRMC processes are designed to establish a proactive framework and dialogue inwhich the SRMC and the Management are able to review and assess the risk management framework.

Corporate Governance

119

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE B (cont'd)
The SRMC receives updates on key business risk, mitigation actions and initiatives across the Company at eachCommittee meeting. The SRMC also reviews and reports to the Board on significant matters encompassing risk
management, sustainability and anti-corruption initiatives, and how these matters are addressed. These include(i) Effectiveness of Enterprise Risk Management (ERM) structure and process; (ii) Maintaining a fit-for-purpose
Business Continuity Management Framework; (iii) Strengthening of Anti-Bribery and Corruption Policy (ABC); and(iv) Assessment of current business processes and procedures. During the financial year under review, the SRMC
had convened two meetings. The attendance records of the SRMC are as follows:
NO. OF MEETINGSATTENDEDPERCENTAGE OFATTENDANCE (%)

Ms. Chong Swee Ying (Chairman)

2/2

100%

Ms. Jenifer Thien Bit Leong (Member)

2/2

100%

Dato’ Merina Abu Tahir (Member)

2/2

100%

En. Hisham Zainal Mokhtar (Member)

2/2

100%

DIRECTOR

The Chief Governance Officer were invited to attend all SRMC meetings to facilitate deliberations as well as provide
clarification on risk and sustainability-related matters in respect of the Company’s operations. Where required,
the relevant Management representatives were invited to present and/or provide an explanation to the SRMC
on specific control lapses. The Company Secretary acts as the Secretary of the SRMC and was present in all the
meetings.
The summary of activities that the SRMC carried out during the financial year under review are described below:
Risk Management
a. Reviewed the adequacy of Company’s risk management frameworkb. Reviewed and monitored principal risks and recommended corrective measures undertaken to mitigate suchrisks.
c. Reviewed whistleblowing report and ensured effective implementation of whistleblowing practices andappropriate structures, resources and systems are in place.
The details of the risk management are reported separately under the Statement on Risk Management and Internal
Control on pages 126 to 132 of this Integrated Annual Report.
Sustainability
a. Reviewed the implementation of procedures for identifying, assessing, monitoring, and managing ESG and/or
sustainability risks related to the Company’s business.
b. Reviewed the integration of ESG and/or sustainability policies, practices, and goals into its business strategy
and decision-making.
c. Continuous monitor and ensure ESG and/or sustainability risks are adequately addressed with actions andmeasures, aligning with the strategies and corporate objectives of the Company.
More information on our sustainability progress are reported separately under the Sustainability Section on pages
44 to 90 of this Integrated Annual Report.

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE C

Integrity In Corporate Reporting and Meaningful
Relationship with Stakeholders
The Board recognises that stakeholder engagement is an important component of good corporate governance. The
Board maintains an open and constructive relationship with all its stakeholders – large and small, institutional andprivate. The Board does not distinguish between institutional and private investors and treats all shareholders equally.
In line with this, steps are taken to ensure that all investors have access to the same information and disclosures.
The Chairman, supported by the Management, has the overall responsibility of ensuring that the Company listens
to, and effectively communicates with its stakeholders. The Company’s Investor Relations (IR) team, headed by the
Chief Financial Officer, facilitates communication between the Company and the investment community. The IR teamconducts regular meetings, conference calls and site visits with investors to keep the investment community abreastof the Company’s operations, strategic developments and financial performance. A comprehensive investor relations
programme, designed for institutional investors and private shareholders, addresses these matters on a regular basis.
The Company also maintains a dedicated section for corporate information disclosure on the Company’s website where
information on the Company’s announcements, quarterly financial results, share prices and the Company’s annual
reports can be accessed. Contact details of designated persons to address queries are also published on this website.
Communication lines with local and foreign investors were kept open throughout the financial year under review.
IR engagements are fronted by authorised spokesperson to ensure credibility and effective communication with theCompany’s shareholders and the investment community.
I.

Proactive and Engagement with the Investment Community
AEON is committed to high levels of corporate disclosure and transparency in line with the MMLR. We disseminate
financial and strategic business updates in a timely manner, ensuring equal access to information and unbiased
treatment of shareholders while maintaining open communications lines and engaging regularly with theinvestment community.
We maintain an active dialogue with the investment community, with our Chief Financial Officer and IR teamengaging throughout the year via both in-person and virtual meetings. These meetings provide institutional
investors and analysts with a clear understanding of our business developments, financial performance, strategies
and prospects. Sustainability is also a topic of growing interest, as investors integrate ESG factors within theirinvestment assessment.
Analyst briefings were conducted to facilitate interactions between the analysts, institutional investors and theManagement. These sessions were chaired by Chief Financial Officer and supported by the IR team and otherrelevant management representatives. The quarterly announcements to Bursa Securities as well as the resultspresentations and press releases were published on the Company's website.
The public and media are also kept abreast of our Company’s latest developments by our Corporate
Communications team via regular updates on our Company's website, social media platforms, press releases andpress conferences.

Corporate Governance121

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE C (cont'd)
Share Price
Price (RM)

Volume (million)

1.6

8

1.4

7

1.2

6

1.0

5

0.8

4

0.6

3

0.4

2

0.2

1

0

0
Jan 2023

Mar 2023

Jun 2023

Price

Dec 2023

VolumeCoverage
AEON's stock is covered by nine research houses as follows:
1.
2.
3.
4.
5.

Affin Hwang Investment Bank Berhad
BIMB Securities Sdn Bhd
Hong Leong Investment Bank Berhad
KAF Equities Sdn Bhd
Kenanga Investment Bank Berhad

6.
7.
8.
9.

Maybank Investment Bank Berhad
MIDF Amanah Investment Bank Berhad
RHB Investment Bank Berhad
TA Securities Holdings Berhad

For more information on Quarterly Financial Results Announcements, please refer to AEON’s corporate website athttps://ir2.chartnexus.com/aeon/quarterly_report.php

II.	Annual General Meeting
AGM provides a platform for the shareholders to interact or engage directly with the Board. At the AGM, an overview
on the Company’s performance and major activities carried out during the financial year under review is presented.
Shareholders are encouraged to enquire or comment about the Company’s financial performance and business
operations in general. Additionally, shareholders who participate in the deliberations of the proposed resolutions
are given opportunities to seek clarification before proceeding to poll voting.
The Company’s Thirty-Eighth (38th) AGM was conducted on 17 May 2023 through live streaming and online
remote participation by using Remote Participation and Voting Facilities (RPV), which followed Section 327 of theCompanies Act 2016. During the 38th AGM, the Managing Director provided shareholders with a brief review on theoperating environment, financial highlights, business performance, ecosystem, key strategies and key prioritiesof the Company. The Chief Financial Officer also addressed all questions received from the Minority Shareholder
Watchdog Group (MSWG). The Chairman of the Board, and the Board Committees were present at the 38th AGM.
Notice of the 38th AGM was circulated at least 28 days before the date of the meeting to enable shareholders to go
through the Annual Report and papers supporting the resolutions proposed, which is in line with Section 316(2)of Companies Act 2016 and paragraph 7.15 of MMLR of Bursa Securities. Notice of AGM was also circulated in anational newspaper alongside an announcement on the website of Bursa Securities. This allowed shareholders tohave immediate access of the notice of AGM and make necessary preparations for the AGM.
This CG Overview Statement was approved by the Board on 23 February 2024.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Audit Committee Report
On 18 May 2023, the Audit and Risk Management Committee has been segregated into Audit Committee (AC) andSustainability and Risk Management Committee. The segregation is to allow the Board Committees to focus on its
dedicated roles respectively. The role of AC is to assist the Board in fulfilling its oversight responsibilities encompassing
a review of the financial reporting process as well as overall compliance with relevant applicable legal and regulatory
requirements.
In discharging its responsibilities, the AC is guided by the Terms of Reference of AC, which was reviewed and approvedby the Board on 18 May 2023 and subsequently revised on 23 February 2024, which is available on the Company's
website at https://aeongroupmalaysia.com. The Board is pleased to present the AC Report for the financial year ended
31 December 2023.
COMPOSITION
The AC comprises the following members:NameAppointment Date

Directorship

En. Hisham Zainal Mokhtar(Chairman)

1 July 2022

Senior Independent Non-Executive Director

Dato' Merina Abu Tahir(Member)

18 May 2023

Independent Non-Executive Director

En. Mohamad Abdul Naser Md Jaafar @ Yunus(Member)

18 May 2023

Independent Non-Executive Director

Pn. Zaida Khalida Shaari(Member)

18 May 2023

Independent Non-Executive Director

En. Abdul Rahim Abdul Hamid(Member)(Retired on 17 May 2023)-

Independent Non-Executive Director

Dato’ Tunku Putra Badlishah Ibni Tunku Annuar(Member)(Retired on 17 May 2023)-

Independent Non-Executive Director

Datuk Syed Ahmad Helmy Syed Ahmad(Member)(Retired on 17 May 2023)-

Independent Non-Executive Director

The composition of the AC complies with Paragraphs 15.09 and 15.10 of the Main Market Listing Requirements in thefollowing respects:••

at least three members and Non-Executive Directors with majority being Independent Director. The AC currently
has four members, all of whom, including the Chairman are Independent Non-Executive Directors.
at least one member of the AC fulfils the qualification criteria. Dato’ Merina Abu Tahir is a member of the MalaysianInstitute of Accountants, Fellow of the Association of Chartered Certified Accountants and a member of the
Malaysian Institute of Certified Public Accountants and therefore fulfils the qualification criteria.

The composition of the AC also complies with Practice 9.2 of the MCCG which states that a former key audit partner
shall not be appointed as a member of the AC until the expiry of a three-year cooling-off period. This practice is adopted
by the Company and none of our AC members are former audit partners. The Step-up Practice 9.4 of the MCCG where
the AC is to be comprised solely of Independent Directors had also been adopted.

Corporate Governance

123

Audit Committee Report

Additionally, the Nomination and Remuneration Committee (NRC) reviews the terms of the office and performance of
the AC and each of its members annually to distinguish whether the AC and its members have carried out their duties
in accordance with the Terms of Reference. The AC composition has further complied with additional stipulations in theTerms of Reference of AC that:a.
b.

each member shall be financially literate and must be able to understand matters under the purview of the AC
including the financial reporting process; andthe Chairman of the Board shall not be the Chairman of the AC.

MEETINGS AND ATTENDANCE
During the financial year under review, the AC had convened four meetings. The attendance records of the AC are as
follows:
ATTENDANCE
En. Hisham Zainal Mokhtar (Chairman)

4/4

100%

Dato' Merina Abu Tahir (Member)

2/2

100%

En. Mohamad Abdul Naser Md Jaafar @ Yunus (Member)

2/2

100%

Pn. Zaida Khalida Shaari (Member)

2/2

100%

The Chief Financial Officer or Acting-Chief Financial Officer and Chief Governance Officer were invited to attend all AC
meetings to facilitate deliberations as well as provide clarification on audit and risk-related matters and the Company’s
operations. The Head of Internal Audit also attended all AC meetings to table internal audit reports. Where required,
the relevant Management representatives were invited to present and/or provide an explanation to the AC on specificcontrol lapses and issues noted from audit reports as well as clarification on their respective areas of responsibilities.
The representatives of the external auditor, Messrs KPMG PLT have attended two meetings for the financial year ended
31 December 2023 to present their reports on external audit and review matters. The Company Secretary acts as the
Secretary of the AC and was present in all the meetings.
SUMMARY OF KEY ACTIVITIES DURING THE YEAR UNDER REVIEW
During the year under review, the AC performed its duties in accordance with its Terms of Reference. The summary ofactivities that the AC carried out are described below:
Financial Reporting Results
a. Reviewed compliance by the Company with the accounting standards issued by International Financial ReportingStandards (IFRS) and incorporated in Malaysian Financial Reporting Standards (MFRS). The AC also focused onchanges to accounting policies and adoption of new accounting standards; andb. All quarterly financial results and the annual audited financial statements for FY2023 were reviewed andrecommended to the Board for approval.
External Audit
a. Reviewed and approved the appointment of external auditors, taking into consideration their competencies,
commitments, objectivity, and independence;b. Reviewed and approved the scope of work and audit plan for FY2023;
c. Reviewed External Auditors’ term of reference of their appointment and their audit and non-audit related fees for
FY2023 for recommendation to the Board for approval;
d. Reviewed and discussed the External Auditors’ audit report of the Financial Statement and key audit matters;
e. Reviewed External Auditors’ management letters and management responses;
f. Completed the annual external auditor assessment prior to the recommendation for re-appointment to the Board
for approval; andg. In FY2023, the AC held two meetings with the External Auditors on 21 February 2023 and 21 November 2023
without management’s presence, to allow the External Auditors to discuss issues arising from the audit exercise
and/or any other matters.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Audit Committee Report

Internal Audit
a. Reviewed and approved the annual internal audit planfor FY2023 based on the risk assessment conducted toensure adequate scope and comprehensive coverageof the Company’s activities;
b. Reviewed and deliberated on internal audit reports
tabled during the year, the audit recommendations
made, and Management’s response to theserecommendations. Significant issues were discussed
at length with the presence of relevant Management
representatives to ensure satisfactory response toaddress identified risks;c. Monitored the implementation of mitigating
actions by Management on outstanding issues on aquarterly basis to ensure that all key risks and control
weaknesses were properly and timely addressed;
d. In FY2023, the AC held two meetings with the Headof Internal Audit on the 21 February 2023 and 21
November 2023 without management’s presence fordiscussion on the audit related matters and activitiesof the Internal Audit Department; ande. Reviewed
andapproved
theperformance,competency and resources of the Internal Audit
functions for FY2023 to ensure that it has the required
expertise and professionalism to discharge its duties.
Related Party Transaction (RPT) and Recurrent Related
Party Transactions (RRPT)
a. Reviewed RPTs and RRPTs of the Company on aquarterly basis and also the Internal Audit reports
detailing the results of review on proposed RPTs toensure compliance with the Companies Act 2016,
Main Market Listing Requirement (MMLR) of Bursa
Malaysia Securities Berhad (Bursa Securities) andthe Malaysian Financial Reporting Standards (MFRS).
From the approved RRPT mandate, the AC is satisfied
that there were reasonable controls in monitoring theamounts transacted during the year.
b. Reviewed the RPTs entered into by the Company
with related parties to ensure that:(i) RPTs were conducted based on the Company’s
normal commercial terms and are not detriment
to the Company’s minority shareholders;(ii) Proposed disclosures were made in compliancewith the MMLR; and(iii) Actual transaction values for the RRPTs are within
the mandate approved by the shareholders.
c. Reviewed the estimated RRPT mandate for theensuing year and the Circular to Shareholders in
respect of the proposed shareholders’ mandate for
RRPTs prior to seeking Board approval.

Governance and Regulatory Compliancea. Monitored the compliance requirements in linewith the new updates of Bursa Securities, Securities
Commission, Malaysian Accounting Standards Boardand other legal and regulatory bodies.
b. Reviewed and discussed the Japanese Sarbanes
Oxley (J-SOX) Compliance Assessment Progress
Report for the Company.
c. Reviewed all legal matters of the Company and reportto the Board.
d. Reviewed and discussed the final dividend in respectof the financial year ended 31 December 2023 for the
Board to recommend to the shareholder for approval.
Annual Report
Reviewed and endorsed the following:•
Audited Financial Statements for FY2023;•
Statement on Risk Management and Internal
Control, Corporate Governance Overview Statement,
Corporate Governance Report and Audit Committee
Report prior to Board’s approval for inclusion in thisIntegrated Annual Report 2023.
Other Activities•
Reported to the Board on its activities and significant
findings and results of the External and Internal Audit
recommendations.
KEY MATTERS CONSIDERED
The AC receives updates on key governance matters,
audit initiatives and issues across the Company ateach Committee meeting. The AC also reviews andreports to the Board on significant matters including
financial reporting, significant judgements made by
the Management, significant and unusual events ortransactions, and how these matters are addressed.
INTERNAL AUDIT FUNCTION
Audit activities are carried out by the Internal
Audit Department led by the Head of Internal Audit,
Cik Nur Suriya Selasiya Mohamad Omar. She has a
Bachelor of Mathematics and Management with Honors,
is an Associate Member of the Institute of Internal
Auditors Malaysia (IIAM) and is currently pursuing
Certified Internal Auditors Certification (Part 3).
The Internal Audit Department provides independentand reasonable assurance to add value and improve theoperations of AEON. The Head of Internal Audit is guided
by its Charter which specifies functional reporting to the
AC and administrative reporting to the Managing Director,

Corporate Governance

125

Audit Committee Reportto allow an appropriate degree of independence from theoperations of the Company. The AC reviews and approves
the annual Internal Audit plan with periodic reviews toensure business alignment, appropriate risk assessment
and audit methodology, and to ensure robustness in theaudit planning process.
The Internal Audit function in AEON is guided by its
Charter. The Internal Audit Charter sets out the purpose,
authority, responsibilities and reporting of the Internal
Audit function which encompasses:
a.

b.

c.
d.

e.

Examination and evaluation of the adequacy, integrityand effectiveness of the Company’s overall system ofinternal control, risk management and governance;
Review RRPT and reports to ascertain that the review
procedures established to monitor the Recurrent
Related Party Transactions have been complied with
the Main Market Listing Requirements of Bursa
Securities;
Review J-SOX Compliance as part of the Company’s
requirement;
Monitor and evaluate governance processes inaccordance to the requirement of the current MCCG
2021; andInvestigate and report on suspicious and fraud cases,
if any.

Reviews are carried out based on the approved Internal
Audit Plan for FY2023, which was developed using a riskbased approach and in line with the Company’s direction.
The Internal Audit Plan was assessed on a quarterly basis
in alignment with the business and risk environment.
The Internal Audit function is based along the principles
and guidelines promulgated by the Institutes of theInternal Auditors (IIA) in International Professional
Practices Framework (IPPF) for an Internal Audit function.
AEON is a corporate member of IIA Malaysia.
The Internal Audit functions in a manner that is consistent
with the International Standards for the Professional
Practice of Internal Auditing (ISPPIA) together with
its Code of Ethics that encompass all the mandatory

elements of the International Professional Practices
Framework (IPPF), which demonstrate its practices are inline with a recognised framework. The principles to havean effective Internal Audit function has been outlined in
the Internal Audit Charter and the Internal Audit Manual.
The Internal Audit Manual outlines risk-based auditing
approach in accordance with the ISSPIA.
For each audit, a systematic methodology is adopted,
which primarily includes performing risk assessment,
developing audit planning memorandum, conducting
audit, convening exit meeting and finalising audit report.
The audit reports detail out the objectives, scope of audit
work, findings, management responses and conclusion
in an objective manner and are distributed to the
responsible parties.
For the financial year under review, 103 audits werecompleted on various operations units at stores, malls
and head office. All audit findings were highlighted to
relevant Management team members responsible for
ensuring that corrective actions on reported weaknesses
are taken within the required timeframe. Summaryof the audit reports were issued to the AC every
quarterly, incorporating the findings and Management’s
remediation actions.
The Internal Audit Department comprises eight auditorswith mix level of expertise. During the year, the Internal
Auditors attended various external training programmes,
aimed at maintaining and enhancing the desiredcompetency levels. The Internal Auditors also attended
training programmes on Code of Conducts and the Headof Internal Audit has signed on Annual Declaration for
Assessment of Conflict of Interest in adherence to AEON
Code of Conducts. In order to maintain its independence
and objectivity, the Internal Audit Department has nooperational responsibility and authority over the audited
activities. The total costs incurred for the Internal Audit
function for FY2023 was RM 865,000 (FY2022: RM
797,000).
The AC Report is approved by the Board on 23 February
2024.

126

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement on Risk Management andInternal Control
INTRODUCTION
The Board is pleased to present the Statement on Risk
Management and Internal Control (SORMIC or This
Statement) which outlines the nature of risk management
and internal controls within the Company for the financial
year ended 31 December 2023.
This Statement is prepared pursuant to paragraph15.26(b) of the Main Market Listing Requirements andguided by the 'Statement on Risk Management andInternal Control – Guidelines for Directors of Listed
Issuers' issued by Bursa Securities. Risk management
and internal controls are embedded in all businessactivities within the Company.

systems. The AC reviews the Company’s financial
statements to enable a true and fair view of our financial
position and compliance with applicable financial
reporting standards.
The responsibilities of the AC are detailed on page 118 of
this Integrated Annual Report.
Sustainability and Risk Management Committee
The key responsibility of the SRMC is to assist the Board in
fulfilling the Board’s fiduciary responsibilities in fulfilling
its governance, risk management and its related internal
control systems as well as AEON's overall sustainability
journey and strategy. This involves the implementationof an effective ethics programme and monitoring
compliance with established policies and procedures.

RESPONSIBILITIES AND ACCOUNTABILITIESBOARD’S RESPONSIBILITIESThe Company is led by the Board. The Board hasdelegated the governance and risk management
responsibilities to the Audit Committee (AC) andSustainability and Risk Management Committee (SRMC)
which ensures independent oversight of internal controls
and risk management. Notwithstanding the delegatedresponsibilities, the Board affirms its responsibility
for overseeing and ensuring a sound system of risk
management and internal control for the Company. Sucha system covers not only controls on the financial aspects,
but also matters relating to operational, investment, risk
management, and compliance with applicable laws,
regulations and guidelines. Effective risk management
helps the Company achieve its optimal performance andprofitability targets by incorporating risk information
for decision-making. The Board has an establishedongoing process for identifying, evaluating, prioritisingand managing the significant risks encountered by theCompany. The Board through the AC and SRMC reviews
this process every quarter. The Board is cognisant of theimportance of having in place an integrated approach to
manage key risks in achieving the Company’s businessobjectives. The Board also recognises the fact thatinternal control systems are designed to manage andminimise rather than eliminate and avoid the occurrenceof material misstatements, unforeseeable circumstances,fraud or losses.
Audit Committee
The key responsibility of the AC is to assist the Board in
fulfilling the Board’s statutory and fiduciary responsibilities
of monitoring the Company’s management of financial
risk processes and quality of the Company’s accounting
function, financial reporting and the internal control

The SRMC also assists the Board in providing oversight,
direction and counsel on the overall risk management
process; establishing and reviewing the risk management
framework, processes and responsibilities, as well as
assessing whether they provide reasonable assurance
that risks are managed within tolerable ranges. The
SRMC is also entrusted to set the tone and culture
towards effective risk management and control within
the Company.
The Board has received assurance from the Managing
Director and Chief Governance Officer that theCompany’s risk management and internal control system
are operating adequately and effectively, in all material
aspects, based on the risk management and internal
control system of the Company during the financial
year under review and up to the date of This Statement.
In discharging its duties, the SRMC is supported andassisted by the Sustainability Steering Committee (SSC)
and the Risk Management Committee (RMC).
The responsibilities of the SRMC are detailed on pages
118 to 119 of this Integrated Annual Report.
MANAGEMENT’S RESPONSIBILITIESThe Management via the Risk Management Committee(RMC) acknowledges their responsibilities to identify,
evaluate, prioritise, mitigate and continuously monitors
the risks faced by the Company’s system of internal
controls.The RMC is responsible for implementing Boardapproved frameworks, policies and procedures related torisk management and internal controls. The RMC is also
accountable for identifying, assessing and monitoring
the risks that may impede the Company’s goals andobjectives.

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127

Statement on Risk Management and Internal Control

THE RMC’S RESPONSIBILITIES INCLUDE BUT ARE NOT LIMITED TO:
a.

b.
c.
d.
e.
f.
g.
h.

To ensure that at least four meetings are held during the financial year to deliberate on existing risk profiles andcontinuously embedding the risk management process to identify emerging risks and propose actions to mitigate
and thereafter monitor;
Annual review of Enterprise Risk Management (ERM) Manual, including framework, process, risk appetite statement
and policies;
Identify and determine ERM risks to maximise opportunity based on AEON’s risk appetite statement;
To ensure adequate controls and management action plans are in place and aligned to achieve the Company’s
Objective Key Results (OKR);
Overall assessment of the effectiveness of internal controls;
Periodical review on major and serious workplace incidents and/or accidents to deliberate on additional preventive
measures;
Review and discussion of internal audit findings and reporting; andPeriodical updates on disciplinary, code of conduct and integrity related cases (if any).

Risk Governance Structure
The Risk Governance set out the roles and responsibilities of the Board, the SRMC and the risk owners involved in thethree lines model for risk management which consist of operation and business unit heads as the first line of defence,
the Governance and Integrity Department (GID) as second line of defence and Internal Audit Department as the thirdline of defence.
Risk Appetite
The Company’s risk appetite defines the level of risk that the Company is prepared to accept to achieve its objectives.
The risk appetite statement serves as a guide for the Company in formulating and planning the risk-taking activities inline with the Company’s mission and strategy.
AEON’s Risk Appetite Statement includes measurable guidelines demonstrating AEON’s risk tolerance levels. Risk
tolerance is the boundary of risk taking; outside of which, AEON is not prepared to accept. Any critical breach of risk
tolerance limits will be reported immediately to the Board directly by the Chairman of the SRMC. Any breach will
warrant one of the following:••

Review effectiveness of internal control/mitigation action; orRecalibrate appetite or limits if they no longer reflect AEON’s actual risk appetite
Key Risk

Risk Appetite Statement

Impact on Policy and Procedures

Product Quality

AEON does not tolerate any sub-standard/
defective products which are sold by its
business or its tenants which may cause
any harm to its users or those who come incontact with it.

Policy on sourcing criteria, evaluation of
product and suppliers.

AEON regards health and safety as a core
indicator of its business success.

Defines AEON’s tolerance with regard to
health and safety risk.

AEON does not tolerate any activities where
adequate measures in preventing foreseeable
death/debilitating injuries were not deployedeffectively.

Reinforces the significances of AEON’s Safety
and Security, especially in terms of clarifying
overall direction with regard to Health and
Safety standards.

Health and
SafetyDedicated in-house subject matter expert
resources in monitoring requirements on
critical areas such as food safety and hygieneand product compliance for Private Brand.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement on Risk Management and Internal Control

Key Risk

Risk Appetite Statement

Impact on Policy and Procedures

PeopleAEON does not tolerate any labour
exploitations within its business and amongits suppliers and tenants.

Reinforces communication and monitoring ofcompliance to AEON’s standards on ethicallabour practices within the Company.

AEON commits itself in adhering tointernational standards on ethical labour
standards, which is at minimum guided by
local laws and regulations.
Integrity

AEON will not tolerate any bribery, fraud orother acts of corruption by its employees,
agents, vendors and tenants when acting foror on behalf of AEON.

Reinforces significance of AEON’s MACC
Integrity Pledge which was undertaken by top
management in the Company.
Defines the stance undertaken andcommunicated to its stakeholder via AEON
Employee Handbook and Supplier Code of
Conduct.
AEON Industrial Relations Manual Guideline
stipulates the categories of misconduct, theinternal process and procedures in managing
employee misconduct.

Regulatory

AEON endeavours to comply with all
relevant legislation and does not tolerate any
significant non-compliance that led to the lossof trust/reputation and/or imprisonment ofofficials in relation to their duty in/for AEON.

Various policies and procedures provide
clarification and guidance in preventing
any significant non-compliance, and whereapplicable, reference to provisions of laws
deemed significant.

NaturalEnvironment

AEON does not tolerate significant noncompliance practices that pollute theenvironment or endanger any wildlife contrary
to environmental and conservation standards
prescribed by local laws and/or which may
cause public outrage.

Defines AEON’s tolerance with regard to theimpact of its operations and practices which
may harm the environment.

Technology
Disruption

AEON will seek to minimise the risk oftechnological disruption by continuously
exploring synergetic opportunities withtechnological partners or other means in order
to innovate its product offering as part of its
digital-proofing strategies.

Defines AEON’s tolerance towards technology
disruption arising from failure in embracing
digitalisation.

Data Security

AEON does not tolerate any leakages ofconfidential information and/or illegal
manipulation of legal information (e.g.
customer and employees personal data).

Defines AEON’s tolerance to data leakages
and/or illegal manipulation of informationsuch as accounting records, personal data etc.
Clarifies AEON’s mandate and direction in
adopting best practices in strengthening
cybersecurity.

Sustainability

AEON has established the AEON Sustainability
Charter (ASC) which serves as a blueprint andguides AEON to embed sustainability in its
operation and does not tolerate any practices
that runs counter to this.

Clarifies AEON’s emphasis on sustainability
by incorporating it into corporate vision andmission statement.

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129

Statement on Risk Management and Internal Control

Governance & Integrity Department (GID)
The Head of GID reports directly to the Chief Governance
Officer and he has been assigned as the secretary of the
RMC. GID has four staff including the Head of GID.

Risk Management Process
The risk management process adopted by the Company
are as follows:
Risk Management Process

Risk Management Policy
AEON Risk Management Policy covers four key areas
which govern the implementation of Enterprise Risk
Management (ERM) defined in the ERM Manual. The four
key areas are as follows:
a.

b.

c.

d.

General Risk Policies – relevance of ERM framework,
compliance of ERM framework, awarenessand capabilities, risk culture, application of risk
management, ERM process, consultation andcommunication, and confidentiality and use of risk
information.
Risk Identification – triggers for risk identification andreview, frequency of risk identification and review,
approval of new risk and changes, and appointmentof risk owners.
Risk Analysis and Assessment – risk analysis, review
of risk analysis, risk assessment, aggregation ofcompany-level risks, objectivity and robustness ofrisk analysis and assessment, approval of risk register,risk treatment action plan and key risk indicators.
Risk Monitoring and Reporting – risk monitoring andrisk reporting.

Key Activities of FY2023
Some of the key activities of GID for FY2023 includes but
are not limited to:a.

Project management••

Leading, planning, coordinating and continuously
communicating with management, business
units and operational leaders to facilitate andensure anti-bribery and integrity matters are
well-informed.
E-Buletin communication to share and update
matters relating to anti-bribery and integrity
with all AEON employees. The information
was emailed to all AEON employees and also
uploaded onto the iAEON platform (intranet
application) for easy access by all employees.

b. Operation Support•

Store visits, risk assessment, provide advice andguideline to operation leaders for matters related
to risk management and business continuity
plan.

Define Risk
Parameters

Assess andPrioritise
Risks

MonitorRisks

01

Establish
Context andObjective

03

Identify
Risks

05

Treat
Risks

02

04

06

The above section outlined the establishment of
the understanding of the business and operating
environment, establishing risk ownership, identifying
risks that will have an adverse impact on the Company’s
objectives, analysing root causes, developing theappropriate risk treatment, and continuously monitoring
and report risks on a quarterly basis.
The Company adopts the Risk and Control SelfAssessment (RCSA) method to regulate the risk
management process at corporate and operational levels.
Through the implementation of a risk profile, it allows
the respective business units, including the individualstores and shopping malls to perform risk activities, suchas identify, prioritise, undertake adequate mitigation
strategies, and plan, evaluating and keep monitoring thecontrols.

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AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement on Risk Management and Internal Control

CONTROL STRUCTURE AND ENVIRONMENTTHE INTERNAL CONTROL PROCESSESS
The main key aspects of internal control processes are:
•

•

•

•

•

•

•

•

The management structure of the Company formallydefines lines of responsibility and delegation of
authority for all aspects of the Company’s affairs.
Senior management and business unit managers
submit and present their operational performance
reviews, business plans and strategic measures to
AEON Leadership Council (ALC);
The Board approves the annual budget andreviews key business indicators and monitors theachievements of the Company’s performance on aquarterly basis;
The authorisation limits and approvals authority
threshold of the Company encompasses internal
control procedures. These procedures are subject toreview by the Management to incorporate changing
business risks and operational efficiency;
The AC is responsible to support the Board in
evaluating the effectiveness of the Company's
internal control systems and overseeing financial
reporting processes. The AC reviews the adequacy
and integrity of our internal control and management
information systems including compliance with
relevant Malaysian laws, regulations, directives,and guidelines, primarily through the Internal Audit
Department;
The Internal Audit Department (IAD) conducts regularreviews to assess the effectiveness and operational
integrity of the organisation's internal control
system, ensuring alignment with established control
procedures and company policies. The Head of IAD
provides the AC with quarterly reports detailing thestatus and effectiveness of internal control systems;
The AC is responsible for reviewing the statutory
annual financial statements. The AC also reviews thequarterly report and recommends the quarterly reportto the Board for approval prior to the announcement
to Bursa Securities;
The IAD periodically audits the effectiveness andevaluates the functionality of the internal control
system to ascertain compliance with the control
procedures and policies of the Company. The Head of
IAD reports to AC on the conditions of internal control
systems on a quarterly basis; andProject teams are set up from time to time to address
business and operational issues to meet the businessobjectives and operational requirements of theCompany.

The Company has established an internal control structure
and is committed to continuously evaluating, enhancing
and maintaining the structure to ensure effective control
over the Company’s business operations as well as tosafeguard the value and security of the Company’s assets.
There is a clearly defined operating structure with lines of
responsibility and delegated authority to assist the Board
to maintain proper control. The key elements that support
the control structure and environment are described asfollows:
1.	INTERNAL AUDITThe IAD which is an integral part of the Company’s
internal control systems, reports directly to the AC.
The IAD’s primary role is to provide independentand objective assurance designed to add value andimprove efficiency of operations within the Company.
It assists the Company in achieving its objectives
by bringing a systematic and disciplined approachto evaluate and improve the effectiveness of risk
management, control and governance processes.
The mission for internal auditing is to enhance andprotect organisational value by providing risk-based
and objective assurance, advice and insight.
The annual internal audit plan, established on arisk-based approach, is reviewed and approvedby the AC annually. The IAD’s performance andconduct is guided by The International Standards
for the Professional Practice of Internal Auditing(the Standards) and the International Professional
Practices Framework (IPPF). IPPF is the conceptual
framework that organises authoritative guidance
promulgated by the Institute of Internal Auditors(IIA). The IAD is also guided by the Malaysian Codeon Corporate Governance (MCCG) 2021.
2.	DOCUMENTED
PROCEDURESINTERNAL

POLICIESANDThe Company periodically reviews, updates andestablishes the internal policies and standard
operating procedures for improvement and to reflect
the changes in the business structure and processes
as and when necessary. The main policies andprocedures are as follows:
2.1

Whistleblowing Policy and Guidelines
As part of the Company’s continuous effort toensure good corporate governance practice,
the Company has established a Whistleblowing
Policy and Procedures with avenue for AEON
People and members of the public to disclose
any improper conduct or irregularity within
the Company with assurance that they willCorporate Governance131

Statement on Risk Management and Internal Control

ACOC by all personnel of the Company and has
put in place the citation process to ensure its
compliance. The Company further encourages
its employees to provide feedback on any
concerns regarding illegal or unethical conduct
via its existing Code of Conduct Hotline.

be protected from possible reprisals or
victimisation. The Company is committed tothe highest standard of integrity, openness andaccountability in the conduct of its business andoperations. It aspires to conduct its affairs in an
ethical, responsible and transparent manner.

Details of ACOC can be found on the
Company’s website athttps://aeongroupmalaysia.com/corporateprofile-governance/

The Whistleblowing Policy and Procedures
can be found on the Company’s website athttps://aeongroupmalaysia.com/
sustainability-policies/

2.2	Anti-Bribery and Corruption Policy
Pursuant to the amendments to the Main
Market Listing Requirements (MMLR) of
Bursa Securities in relation to anti-corruption
measures, the Company has established an
Anti-Bribery and Corruption (ABC) Policyin accordance with the new Section 17A of
the Malaysian Anti-Corruption Commission(MACC) (Amendment) Act 2018 on corporate
liability for corruption with effect from 1 June
2020. The development of the ABC policy
and procedures, at a minimum is guided by
the Adequate Procedures issued pursuant to
Section 17A(5) of the MACC (Amendment)
Act 2018. The Company is committed towards
implementing the necessary actions to meetthe requirements of the Adequate Procedures
and will continuously enhance and promotemeasures for better governance and ethicalculture at the workplace.

Procurement Policy (Non-Trade)
The procurement policies and guidelines
have been duly reviewed in FY2023. As partof our ongoing journey to digitalise of our
procurement process, we are going to roll out
the digital procurement platform to all vendors
by FY2024.

2.5

Sustainability Policy
As part of the Company’s continuous effort toensure good corporate governance practice, theCompany established the Sustainability Policy
in FY2022. The aim of the Policy is to embedsustainability practices across the organisation,
support the Company’s ability to meet its
sustainability expectations and needs of its
stakeholders as well as provide guidelines on
the Company’s sustainability agenda.

2.6	Disaster Recovery Plan
The Company has an established Disaster
Recovery Plan (DRP) to strengthen IT security
and safety as well as business continuity
management. As part of our internal controls
monitoring, we will work with our service
providers to ensure that their DRP annual
exercise and controls are in place.

The ABC Policy can be found on the
Company’s website athttps://aeongroupmalaysia.com/
sustainability-policies/

2.3	AEON Code of Conduct (ACOC)
ACOC which was established by AEON Co., Ltd.,
Japan has been adopted by the Board to support
the Company’s objectives, vision and values.
The basic principles have been carried out by
having appropriate regards to the interests of
the Company’s customers, shareholders, AEON
people, business partners and the broader
community in which the Company operates.
All employees are briefed and provided witha copy of the ACOC on the commencement of
their employments. The principles of ACOC are
constantly made aware to employees throughcitation in employees assemblies. The Board
recognises the importance on adherence to the

2.4

3.

MONITORING AND REVIEWThe processes adopted to monitor and review theeffectiveness of the internal control system are as
follows:a.

b.

All business units submit monthly Management
Reports to their respective members of the ALC.
The reports include a review of actual results
against the preceding year as well as against thebudget, with significant variance being explained
and necessary actions taken.
Quarterly risk report are tabled and deliberated
at the SRMC meetings for onward submission to
the Board for deliberation.

132

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement on Risk Management and Internal Controlc.

d.

2023, and reported to the Board that nothing hascome to their attention that cause them to believe thatthe statement intended to be included in the annual
report of the Company, in all material respects:

Quarterly financial performance reports from theManagement are tabled to the AC for deliberationand thereafter recommended to the Board forapproval.
The AC meets at least once every quarter toreview internal audit findings and ensure thathighlighted weaknesses in internal controls areappropriately addressed by Management. The
AC Meeting is supported by the Internal Audit
Department in terms of the following:•
Audit issues are discussed with auditees
and respective ALCs with recommendations
provided to address the issues;•
Submission of reports to the AC atquarterly intervals containing improvement
opportunities, audit findings, management
response, and corrective actions in areas
with significant risks and internal control
deficiencies; and•Continuous review of the AC and SRMC
Terms of Reference to reflect updates to thecurrent business environment, including
Malaysian Institute of Accountants by-laws
requirements and the formation of the GID in
relation to investigation functions.

a.

b.

AAPG 3 does not require the external auditors toconsider whether the Directors’ Statement on Risk
Management and Internal Control covers all risks andcontrols, or to form an opinion on the adequacy andeffectiveness of the Company’s risk management andinternal control system including the assessment andopinion by the Board of Directors and management
thereon. The auditors are also not required to consider
whether the processes described to deal with materialinternal control aspects of any significant problems
disclosed in the annual report will, in fact, remedy the
problems.
6.

Continuous efforts are undertaken to ensure
standardisation, timeliness and comprehensivenessof key internal control procedures. The system ofinternal controls has clear management support,
including the involvement of the Board, and isdesigned to address the risks to which the Company
is exposed.
4.	ASSOCIATES
The disclosures in this Statement do not include therisk management and internal controls practices of
the Company’s associates.
5.	REVIEW OF THE STATEMENT BY EXTERNAL
AUDITORS
The external auditors have reviewed this Statementon Risk Management and Internal Control pursuant
to the scope set out in Audit and Assurance
Practice Guide (AAPG) 3, Guidance for Auditors on
Engagements to Report on the Statement on Risk
Management and Internal Control included in the
Annual Report issued by the Malaysian Institute of
Accountants (MIA) for inclusion in the annual reportof the Company for the year ended 31 December

has not been prepared in accordance with thedisclosures required by paragraphs 41 and 42 of
the Statement on Risk Management and Internal
Control: Guidelines for Directors of Listed Issuers,oris factually inaccurate.

CONCLUSIONFor FY2023, the Board has monitored and reviewed
the risk management practices and effectiveness of
the internal control structure, based on the adopted
ERM framework which includes processes for
identifying, evaluating and managing significant
risks faced by the Company. This is an ongoingprocess which includes enhancement of the relevant
key internal controls when there are changes in thebusiness environment. The Board is also assistedby the Management in the implementation of theBoard’s policies and procedures on risk and control.
This includes the identification of risk control
measures to address pertinent and relevant risks
affecting the Company. Where weaknesses are
identified, rectification steps have been put in place.
Based on the assurances provided by the Managing
Director and Chief Governance Officer and with theimplementation of a risk management framework as
well as the adoption of an internal control system, theBoard is of the opinion that the risk management andinternal control system for the year under review,up to the date of the issuance of the Company’s
financial statements, are adequate and effective
in safeguarding shareholders’ investments and all
stakeholders’ interests.

Corporate Governance133

Additional Compliance Information(Pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

Material contracts
There were no material contracts entered into by the Company involving Directors’ and major shareholders’ interest
which were still subsisting as at the end of the financial year under review or which were entered into since the endof the previous financial year (not being contracts entered into in the ordinary course of business) except as disclosed
below and in Note 29 to the financial statements on pages 180 to 181 of this Integrated Annual Report.
Audit and non-audit fees
During the financial year ended 31 December 2023, the amount of audit and non-audit fees paid by the Company to theExternal Auditors and its affiliates are as follows:
RM'000
Audit service rendered

310

Non-audit services rendered

197

Total

507

During the financial year, the amount incurred in respect of non-audit related fees amounted to RM197,000 which
comprised assignments for tax consultation advisory fee, Statement on Risk Management and Internal Control review
and also ESG independent limited assurance fee.
Utilisation of proceeds
There were no proceeds raised from any proposal during the financial year.
Recurrent related party transactions of a revenue or trading nature
At the 38th Annual General Meeting (“AGM”) held on 17 May 2023, the Company obtained shareholders’ mandate toallow the Company to enter into recurrent related party transactions of a revenue or trading nature. The disclosureof the recurrent related party transactions conducted during the financial year ended 31 December 2023 is set out on
pages 180 to 181 of this Integrated Annual Report.

134

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

STATEMENT OF DIRECTORS’ RESPONSIBILITY
Pursuant to paragraph 15.26(a) of the Main Market of Bursa Malaysia Securities Berhad

The Board of Directors is responsible for ensuring that the annual audited financial statements of the Company areprepared with reasonable accuracy from the accounting records so as to give a true and fair view of the financial
position of the Company as at 31 December 2023, and of their performance and cash flows for the year then ended.
The Board is also responsible for ensuring that the annual audited financial statements of the Company are drawn up
in accordance with the requirements of the approved Malaysian Financial Reporting Standards issued by the Malaysian
Accounting Standards Board, IFRS Accounting Standards, the requirements of the Companies Act 2016, the Listing
Requirements of Bursa Malaysia Securities Berhad and other regulatory bodies.
In preparing the annual audited financial statements, the Directors have ascertained that the relevant accounting
policies and reasonable prudent judgement and estimates have been consistently applied. The Directors also have ageneral responsibility for taking reasonable steps to safeguard the assets of the Company to prevent and detect fraud
and other irregularities.

135

Transactionsof Trust
Simplifying Payments, Amplifying Smiles

06
FINANCIAL STATEMENTS
136 Financial Statements
195 Independent Auditors' Report

136

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Directors’ reportfor the year ended 31 December 2023

The Directors have pleasure in submitting their report and the audited financial statements of the Company for thefinancial year ended 31 December 2023.
Principal activities
The Company is principally engaged in the operations of a chain of departmental stores and supermarkets selling abroad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation.
There has been no significant change in the nature of these activities during the financial year.
Ultimate holding company
The Company is a subsidiary of AEON Co., Ltd., of which is incorporated in Japan and regarded by the Directors as theCompany’s ultimate holding company, during the financial year and until the date of this report.
Results
RM’000
Profit for the year

114,832

Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review except as
disclosed in the financial statements.
Dividend
Since the end of the previous financial year, a final dividend of 4.00 sen per ordinary share totalling RM56,160,000
has been paid/payable by the Company in respect of the financial year ended 31 December 2022 as reported in the
Directors’ Report of that year on 15 June 2023.
A final dividend recommended by the Directors in respect of the financial year ended 31 December 2023 is 4.00 sen
per ordinary share totalling RM56,160,000 subject to the approval of the members at the forthcoming Annual General
Meeting of the Company.
Directors of the Company
Directors who served during the financial year until the date of this report are:
Datuk Iskandar bin Sarudin
Chong Swee Ying
Hiroaki Egawa
Hisham bin Zainal Mokhtar
Naoya Okada
Tsugutoshi Seko
Zaida Khalida binti Shaari
Dato’ Merina binti Abu Tahir			
Jenifer Thien Bit Leong				Mohamad Abdul Naser bin Md Jaafar @ Yunus
Datuk Syed Ahmad Helmy bin Syed Ahmad
Dato’ Tunku Putra Badlishah Ibni Tunku Annuar
Abdul Rahim bin Abdul Hamid			
Keiji Ono					(appointed on 18 May 2023)(appointed on 18 May 2023)(appointed on 18 May 2023)(retired on 17 May 2023)(retired on 17 May 2023)(retired on 17 May 2023)(resigned on 29 February 2024)

FINANCIAL STATEMENTS

137

Directors’ reportfor the year ended 31 December 2023

Directors’ interests in shares
The interests and deemed interests in the ordinary shares and options over shares of the Company and of its related
corporations of those who were Directors at financial year end (including the interests of the spouse or children of the
Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings
are as follows:
Number of ordinary shares
At 1.1.2023/
date ofappointment

Bought/Bonus Issue

Sold

At
31.12.2023

AEON CO. (M) BHD.

42,600--42,600AEON Credit Service (M) Berhad

13,44013,440-26,88019,900--19,900

3,238

-

-

3,238

AEON CO. (M) BHD.

11,000--11,000AEON Credit Service (M) Berhad

3,220

3,220

-

6,440

Shareholdings in which Directors have direct interests
Interest of Chong Swee Ying in:Interest of Naoya Okada in:
AEON Co., LTD.
Interest of Keiji Ono in:
AEON Co., LTD.
Shareholdings in which Directors have deemed/indirect interests
Interest of Chong Swee Ying in*:*Deemed interest through her spouse’s shareholdings pursuant to Section 59(11)(c) of the Companies Act 2016 in
Malaysia.

None of the other Directors holding office at 31 December 2023 had any interest in the ordinary shares of the Company
and of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than those shown below or the fixed salary of a full time employee of the Company or of related
corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm ofwhich the Director is a member, or with a company in which the Director has a substantial financial interest.
The Directors’ benefits received or receivable by Directors in respect of the financial year ended 31 December 2023 are
as follows:
RM’000
Directors of the Company:
Fees

1,049

Remuneration

1,704

Other short-term employee benefits (including estimated monetary value of benefits-in-kind)

234
2,987

138

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Directors’ reportfor the year ended 31 December 2023

Directors’ benefits (continued)
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of
the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any otherbody corporate.
Issue of shares and debentures
There were no changes in the issued and paid-up capital of the Company during the financial year. There were no
debentures issued during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year.
Indemnity and insurance costs
The Directors and officers of the Company are covered by Directors and Officers Liability Insurance (“D&O Insurance”)
for any liability incurred in the discharge of their duties, provided that they have not acted fraudulently or dishonestlyor derived any personal profit or advantage. The total amount of D&O insurance effected for the Directors and Officersof the Company was RM11,000,000. The total amount of premium paid for D&O insurance effected for the Directors
and Officers of the Company was RM27,040. There were no indemnity given to/insurance effected for the auditors of theCompany during the year.
Other statutory information
Before the financial statements of the Company were made out, the Directors took reasonable steps to ascertain that:i)all known bad debts have been written off and adequate provision made for doubtful debts; andii)

any current assets which were unlikely to be realised in the ordinary course of business have been written down
to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:i)that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the
Company inadequate to any substantial extent, orii)

that would render the value attributed to the current assets in the financial statements of the Company misleading,
or

iii)

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

not otherwise dealt with in this report or the financial statements that would render any amount stated in thefinancial 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 which secures theliabilities of any other person, orii)

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

No contingent liability or other liability of the Company has become enforceable, or is likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may
substantially affect the ability of the Company to meet its obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Company for the financial year ended 31 December 2023
have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such
item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

FINANCIAL STATEMENTS

139

Directors’ reportfor the year ended 31 December 2023

Auditors
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
During the year, total fees for statutory audit services provided by the auditors amounted to RM310,000, while total fees
for non-audit services amounted to RM197,000.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:……………………………………………
Datuk Iskandar bin Sarudin
Director……………………………………………
Naoya Okada
Director

Kuala Lumpur
Date: 15 March 2024

140

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement of financial position
as at 31 December 2023

Note

2023
RM’0002022
RM’000AssetsProperty, plant and equipment

33,090,244

2,951,699

Right-of-use assets

4

1,071,108

1,211,173

Intangible assets

539,28851,778Investment in associates

6

913

676

Other investments

7

51,73458,422Other assets

8

17,915

18,238Deferred tax assets

9

Total non-current assets

183,148

180,6394,454,350

4,472,625

Inventories

10553,375

605,479

Contract assets

11

16,39017,169Receivables, deposits and prepayments

12

98,07093,577

1,529-

99,829237,473

Tax recoverable
Cash and cash equivalents

13

Total current assets
Total assets

769,193953,698

5,223,543

5,426,323

702,000

702,000

EquityShare capital

14

Fair value reserve

14

Retained earnings
Equity attributable to owners of the Company

50,70457,392

1,106,308

1,047,636

1,859,012

1,807,028

370,000

49,995

1,441,672

1,612,564

4,881

13,060Liabilities
Borrowings

15

Lease liabilities
Payables and accruals

16

Other liabilities

17

Total non-current liabilities
Borrowings

15

Lease liabilities

48,447

23,615

1,865,000

1,699,234

49,995447,781

182,232

166,847

Payables and accruals

16

1,185,653

1,213,984

Contract liabilities

11

81,651

84,619Current tax liability

-

6,830

Total current liabilities

1,499,531

1,920,061

Total liabilities

3,364,531

3,619,295

Total equity and liabilities

5,223,543

5,426,323

The notes on pages 146 to 193 are an integral part of these financial statements.

FINANCIAL STATEMENTS

141

Statement of profit or loss andother comprehensive income
for the year ended 31 December 2023

Note

2023
RM’0002022
RM’00018

4,129,038

4,141,094

Other operating income

44,93436,848Changes in inventories(52,104)

4,303(2,330,270)(2,424,856)

Revenue

Net purchases
Staff costs(394,841)(389,551)

Depreciation of property, plant and equipment

3(259,756)(263,504)

Depreciation of right-of-use assets

4(146,644)(157,549)

Amortisation of intangible assets

5(14,143)(15,750)

Net impairment of trade receivables

30.4(3,028)(2,460)(683,565)(605,447)

Operating expenses
Profit from operations

19289,621323,128

Finance income

20

9,017

3,121

Finance costs

20(105,613)(114,781)

913-

193,938

211,468

Share of profit of an equity-accounted associate, net of tax
Profit before tax
Tax expense

22

Profit for the year

(79,106)(100,236)

114,832

111,232(6,688)(4,829)108,144

106,403

8.18

7.92

Other comprehensive income, net of tax
Item that will not be reclassified subsequently to profit or loss
Net change in fair value of equity investments designated at fair value
through other comprehensive income (“FVOCI”)

23

Total comprehensive income for the year
Basic earnings per ordinary share (sen)The notes on pages 146 to 193 are an integral part of these financial statements.

24

142

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement of changes in equity
for the year ended 31 December 2023

Attributable to owners of the Company
Non-distributable

Note
At 1 January 2022
Net change in fair value of equity investments
designated at FVOCI

SharecapitalFair value
reserve

Retainedearnings

Total
equityRM’000

RM’000

RM’000

RM’000702,000

62,221

978,524

1,742,745-(4,829)-(4,829)Profit for the year--

111,232

111,232

Total comprehensive (expense)/income forthe year-(4,829)111,232

106,403

Final dividend in respect of year ended
31 December 2021

23

Distributable

25

-

-

(42,120)(42,120)702,000

57,392

1,047,636

1,807,028-(6,688)-(6,688)

Profit for the year--

114,832

114,832

Total comprehensive (expense)/income forthe year-(6,688)114,832

108,144

At 31 December 2022/At 1 January 2023
Net change in fair value of equity investments
designated at FVOCI

Final dividend in respect of year ended
31 December 2022
At 31 December 2023

23

25

-

-

(56,160)(56,160)

702,000

50,704

1,106,308

1,859,012

Note 14

Note 14

The notes on pages 146 to 193 are an integral part of these financial statements.

FINANCIAL STATEMENTS

143

Statement of cash flows
for the year ended 31 December 2023

Note

2023
RM’0002022
RM’000193,938

211,468
15,750Cash flows from operating activities
Profit before tax
Adjustments for:
Amortisation of intangible assets

5

14,143

Depreciation of property, plant and equipment

3259,756

263,504

Depreciation of right-of-use assets

4

146,644

157,549

Dividend income

7(2,299)(2,252)

Impairment loss on property, plant and equipment

3

1,734

1,410

Impairment loss on right-of-use assets

4

19,24819,760

Impairment loss on intangible assets

5

18

-

3,028

2,460

2

2,088

Net impairment loss on trade receivables
Bad debts written off(15,354)(10,025)

Net gain on disposal of property, plant and equipment

Net gain on lease derecognition

(14)

(106)

Loss on liquidation of an associate

42-

Finance costs

20

105,613

114,781

Finance income

20(9,017)(3,121)

11

-

5,008

4,387

-

55

Net unrealised foreign exchange loss
Property, plant and equipment written off
Intangible assets written off
Share of profit of equity-accounted associate
Operating profit before changes in working capital

(913)

-

721,588

777,708

Changes in working capital:
Inventories

52,104(4,303)

Receivables, deposits and prepayments and other assets(7,211)

32,630(44,398)

41,735Contract assets

779(2,684)Contract liabilities(2,968)(7,837)

Payables and accruals and other liabilities

Cash generated from operations

719,894

837,249

Tax paid(89,974)(132,521)

Net cash from operating activities

629,920704,728

Cash flows from investing activities
Acquisition of:- Property, plant and equipment

3(376,568)(113,754)- Intangible assets

5(4,018)(4,620)

1,325

1,068

634

-

Dividend received

2,299

2,252

Gain on disposal of unit trusts

2,880

-

Interest received

6,137

3,121

(367,311)(111,933)

Proceeds from disposal of:- Property, plant and equipment
Proceeds from liquidation of an associate

Net cash used in investing activities

144

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement of cash flows
for the year ended 31 December 2023

Note

2023
RM’0002022
RM’000Cash flows from financing activities
Proceeds from borrowings

400,000

264,600

Repayment of borrowings(477,781)(495,157)

Dividend paid to owners of the Company(55,968)(42,120)

Payment of lease liabilities(165,980)(162,817)Interest paid

(100,524)(113,390)

Net cash used in financing activities(400,253)(548,884)

Net (decrease)/increase in cash and cash equivalents(137,644)

43,911

237,473

193,562

99,829237,4732023
RM’0002022
RM’000

Payment relating to short-term leases

746

221

Payment relating to low-value leases

1,682

1,017

Payment of lease liabilities

165,980

162,817

Interest paid in relation to lease liabilities

85,307

95,894

253,715

259,949

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

13

Cash outflows for leases as a lessee

Included in net cash from operating activities:

Included in net cash from financing activities:

Total cash outflows for leases

2,064,988

2,793,321

Lease liabilities

Total liabilities
from financing
activities(393,374)(162,817)(175,000)(55,557)

RM’000

561

561

-

-

RM’000(71,606)(71,606)--

RM’000Acquisitionof new Remeasurement
leaseof lease(51,715)(51,715)--

RM’000Derecognitionof lease

The notes on pages 146 to 193 are an integral part of these financial statements.

545,000

183,333- unsecured

Islamic Medium
Term Notes
and Islamic
Commercial
Papers- unsecured

Bank loans

RM’000NetchangesAt 1
fromJanuaryfinancing2022 cash flows

2,277,187

1,779,411

370,000

127,776

RM’000(243,761)(165,980)-(77,781)

RM’00035,57535,575--

RM’00073,82673,826--

RM’000

At 31
Net
Decemberchanges
2022/1from Acquisition
Januaryfinancingof new Remeasurement
2023 cash flows
leaseof lease

Reconciliation of movements of liabilities to cash flows arising from financing activities(98,928)(98,928)--

RM’000Derecognitionof lease

2,043,899

1,623,904

370,000

49,995

RM’000At 31
December
2023

FINANCIAL STATEMENTS

145

Statement of cash flows
for the year ended 31 December 2023

146

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Notes to the financial statements
AEON CO. (M) BHD. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on theMain Market of the Bursa Malaysia Securities Berhad. The address of its registered office which is also the principal
place of business is as follows:
3rd Floor, AEON Taman Maluri Shopping Centre
Jalan Jejaka, Taman Maluri
Cheras55100 Kuala Lumpur
The financial statements of the Company for the financial year ended 31 December 2023 comprise of the Company andthe Company’s interest in an associate.
The Company is principally engaged in the operations of a chain of departmental stores and supermarkets selling abroad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation.
The ultimate holding company during the financial year is AEON Co., Ltd., a company incorporated in Japan.
These financial statements were authorised for issue by the Board of Directors on 15 March 2024.
1.	Basis of preparation(a)Statement of compliance
The financial statements of the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (“MFRSs”), IFRS Accounting Standards as issued by the International AccountingStandards Board (“IFRS Accounting Standards”) and the requirements of the Companies Act 2016 in
Malaysia.
The following are accounting standards, interpretations and amendments of the MFRSs that have been
issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Company:
MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2024•
Amendments to MFRS 16, Leases – Lease Liability in a Sale and Leaseback•
Amendments to MFRS 101, Presentation of Financial Statements – Non-current Liabilities with
Covenants and Classification of Liabilities as Current or Non-current•
Amendments to MFRS 107, Statement of Cash Flows and MFRS 7, Financial Instruments: Disclosures –Supplier Finance Arrangements
MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2025•
Amendments to MFRS 121, The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability
MFRSs, interpretations and amendments effective for annual periods beginning on or after a date yet tobe confirmed•
Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates
and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint
VentureThe Company plans to apply the abovementioned accounting standards, interpretations and amendments:••from the annual period beginning on 1 January 2024 for those amendments that are effective forannual periods beginning on or after 1 January 2024.
from the annual period beginning on 1 January 2025 for those amendments that are effective forannual periods beginning on or after 1 January 2025.

The initial application of the abovementioned accounting standards and amendments is not expected to haveany material financial impact to the current period and prior period financial statements of the Company.

FINANCIAL STATEMENTS

147

NOTES TO THE FINANCIAL STATEMENTS

1.	Basis of preparation (continued)(b)	Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
As at 31 December 2023, the Company’s current liabilities exceeded its current assets by RM730,338,000(2022: RM966,363,000).
In 2016, the Company has established an Islamic Commercial Papers Programme with a limit of up to RM300.0
million and an Islamic Medium Term Notes Programme with a limit of up to RM1.0 billion, under a combined
master limit of up to RM1.0 billion in nominal value based on the Shariah principle of Murabahah via
Tawarruq arrangement (“Sukuk Programme”). In 2023, Islamic Commercial Papers Programme has expired.
The Directors are of the opinion that the Company will be able to meet its liabilities as and when they fall dueas there are sufficient unutilised facilities arising from the Sukuk Programme and other financing facilities asat the year end, coupled with the ability of the Company to generate sufficient operating cash flows basedon the historical trend of positive operating cash flows.
(c)

Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional
currency. All financial information is presented in RM and has been rounded to the nearest thousand (’000),unless otherwise stated.

(d)

Use of estimates and judgements
The preparation of the financial statements in conformity with MFRSs requires the use of certain criticalaccounting estimates and assumptions that affect the reported amounts of assets and liabilities at the dateof the financial statements, and the reported amounts of income and expenses during the reporting period.
It also requires Directors to exercise their judgement in the process of applying the Company’s accounting
policies. Although these estimates and judgement are based on the Directors’ best knowledge of current
events and actions, actual results may differ.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have significant effect on the amounts recognised in the financial statements other than those
disclosed in the following notes:
•
•
•
•

1.1

Note 3 & 4
Note 4Note 2.7 & 10
Note 17- Measurement of the recoverable amounts of cash-generating units- Extension options and incremental borrowing rates in relation to leases- Inventories- Other liabilities

Changes in material accounting policies
Material accounting policy information
The Company has adopted Amendments to MFRS 101, Presentation of Financial Statements and MFRS
Practice Statement 2 – Disclosure of Accounting Policies from 1 January 2023. The amendments require
the disclosure of “material”, rather than “significant” accounting policies. The amendments also provide
guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide
useful, entity-specific accounting policy information that users need to understand in the financial statements.
The amendments did not result in significant changes to the Company’s accounting policies. The material
accounting policies are disclosed in Note 2 to the financial statements.

148

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements, unless otherwise stated.
2.1

Accounting for investment in associate
Investments in associates are accounted for in the Company’s financial statements using the equity method
less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment
includes transaction costs. The financial statements include the Company’s share of the profit or loss andother comprehensive income of the associates, after adjustments if any, to align the accounting policies withthose of the Company, from the date that significant influence commences until the date that significant
influence ceases.
When the Company’s share of losses exceeds its interest in an associate, the carrying amount of that interest
including any long-term investments is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Company has obligation or has made payments on behalf of the associate.
When the Company ceases to have significant influence over an associate, any retained interest in the former
associate at the date when significant influence is lost is measured at fair value and this amount is regarded
as the initial carrying amount of a financial asset. The difference between the fair value of any retainedinterest plus proceeds from the interest disposed of and the carrying amount of the investment at the datewhen equity method is discontinued is recognised in profit or loss.
When the Company’s interest in an associate decreases but does not result in a loss of significant influence,
any retained interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in
profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified
proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on thedisposal of the related assets or liabilities.

2.2

Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Company at exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of
the reporting date, except for those that are measured at fair value which are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of equity instruments where they are measured at fair value through othercomprehensive income which are recognised in other comprehensive income.

2.3

Financial instruments
2.3.1	Recognition and initial measurement
A financial asset or a financial liability is recognised in the statement of financial position when, andonly when, the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without significant financing component) or a financial
liability is initially measured at fair value plus or minus, for an item not at fair value through profit orloss, transaction costs that are directly attributable to its acquisition or issuance. A trade receivable
without a significant financing component is initially measured at the transaction price.

FINANCIAL STATEMENTS

149

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.3

Financial instruments (continued)
2.3.2 Financial instrument categories and subsequent measurement
The Company categorises financial instruments as follows:
Financial assets
Categories of financial assets are determined on initial recognition and are not reclassified subsequent
to their initial recognition unless the Company changes its business model for managing financial
assets in which case all affected financial assets are reclassified on the first day of the first reporting
period following the change of the business model.
2.3.2.1 Amortised cost
Amortised cost category comprises financial assets that are held within a business model
whose objective is to hold assets to collect contractual cash flows and its contractual terms
give rise on specified dates to cash flows that are solely payments of principal and intereston the principal amount outstanding. The financial assets are not designated as fair value
through profit or loss. Subsequent to initial recognition, these financial assets are measured
at amortised cost using the effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses and impairment arerecognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Interest income is recognised by applying effective interest rate to the gross carrying amountexcept for credit impaired financial assets (see Note 2.10.1) where the effective interest rate isapplied to the amortised cost.
2.3.2.2 Fair value through other comprehensive income - Equity investments
This category comprises investment in equity that is not held for trading, and the Company
irrevocably elect to present subsequent changes in the investment’s fair value in othercomprehensive income. This election is made on an investment-by-investment basis.
Dividends are recognised as income in profit or loss unless the dividend clearly represents
a recovery of part of the cost of investment. Other net gains and losses are recognised inother comprehensive income. On derecognition, gains and losses accumulated in othercomprehensive income are not reclassified to profit or loss.
2.3.2.3 Fair value through profit or loss
All financial assets not measured at amortised cost or fair value through other comprehensive
income as described above are measured at fair value through profit or loss. This includes
derivative financial assets (except for a derivative that is designated and effective hedging
instrument). On initial recognition, the Company may irrevocably designates a financial
asset that otherwise meets the requirements to be measured at amortised cost or at fairvalue through other comprehensive income as at fair value through profit or loss if doing so
eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets categorised as fair value through profit or loss are subsequently measured attheir fair value. Net gains or losses, including any interest or dividend income, are recognised
in profit or loss.
All financial assets, except for equity investments measured at fair value through other comprehensive
income and investments measured at fair value through profit or loss, are subject to impairment
assessment (see Note 2.10.1).

150

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.3

Financial instruments (continued)
2.3.2 Financial instrument categories and subsequent measurement (continued)
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest
method.
Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gains orlosses on derecognition are also recognised in profit or loss.
2.3.3 Derecognition
A financial asset or a part of it is derecognised when, and only when, the contractual rights to the
cash flows from the financial asset expire or transferred, or control of the asset is not retained or
substantially all of the risks and rewards of ownership of the financial asset are transferred to anotherparty. On derecognition of a financial asset, the difference between the carrying amount of thefinancial asset and the sum of the consideration received (including any new asset obtained less any
new liability assumed) is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in thecontract is discharged, cancelled or expires. A financial liability is also derecognised when its terms
are modified and the cash flows of the modified liability are substantially different, in which case,a new financial liability based on modified terms is recognised at fair value. On derecognition of afinancial liability, the difference between the carrying amount of the financial liability extinguished ortransferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
2.3.4	Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement offinancial position when, and only when, the Company currently has a legally enforceable right to set
off the amounts and it intends either to settle them on a net basis or to realise the asset and liability
simultaneously.

2.4

Property, plant and equipment
2.4.1	Recognition and measurement
Freehold land and construction work-in-progress are stated at cost. Other items of property, plant andequipment are measured at cost less any accumulated depreciation and any accumulated impairment
losses.
Purchased software that is integral to the functionality of the related equipment is capitalised as partof that equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment and isrecognised net within “other operating income” and “operating expenses” respectively in profit orloss.

FINANCIAL STATEMENTS151

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.4

Property, plant and equipment (continued)
2.4.2 Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within thecomponent will flow to the Company, and its cost can be measured reliably. The carrying amount of
the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing ofproperty, plant and equipment are recognised in profit or loss as incurred.
2.4.3 Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives ofeach component of an item of property, plant and equipment from the date that they are available
for use. Freehold land is not depreciated. Property, plant and equipment under construction are notdepreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:• Leasehold land

74 - 97 years• Buildings

25 - 50 years• Structures

10 years• Office equipment

10 years• Machinery and equipment

5 years• Motor vehicles

5 years• IT equipment
2.5

3 - 10 years• Furniture, fixtures and fittings

3 - 5 years

Leases
2.5.1	Recognition and initial measurement
2.5.1.1 As a lessee
The Company recognises a right-of-use (“ROU”) asset and a lease liability at the leasecommencement date. The ROU asset is initially measured at cost, which comprises theinitial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and an estimate of costs todismantle and remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments that are notpaid at the commencement date, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally,
the Company uses its incremental borrowing rate as the discount rate.

152

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.5

Leases (continued)
2.5.1	Recognition and initial measurement (continued)
2.5.1.1 As a lessee (continued)
Lease payments included in the measurement of the lease liability comprise the following:
•
•
•
•
•

fixed payments, including in-substance fixed payments less any incentives receivable;variable lease payments that depend on an index or a rate, initially measured using theindex or rate as at the commencement date;amounts expected to be payable under a residual value guarantee;
the exercise price under a purchase option that the Company is reasonably certain to
exercise; andpenalties for early termination of a lease unless the Company is reasonably certain not
to terminate early.

The Company excludes variable lease payments that linked to future performance or usage ofthe underlying asset from the lease liability. Instead, these payments are recognised in profit
or loss in the period in which the performance or use occurs.
The Company has elected not to recognise ROU assets and lease liabilities for short-termleases that have a lease term of 12 months or less and leases of low-value assets. The
Company recognises the lease payments associated with these leases as an expense on astraight-line basis over the lease term.
2.5.1.2 As a lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is afinance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the leasetransfers substantially all of the risks and rewards incidental to ownership of the underlying
asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease.
If an arrangement contains lease and non-lease components, the Company applies MFRS 15
to allocate the consideration in the contract based on the stand-alone selling prices.
When the Company is an intermediate lessor, it accounts for its interests in the head leaseand the sublease separately. It assesses the lease classification of a sublease with reference
to the ROU asset arising from the head lease, not with reference to the underlying asset. If
a head lease is a short-term lease to which the Company applies the exemption describedabove, then it classifies the sublease as an operating lease.
2.5.2 Subsequent measurement
2.5.2.1 As a lessee
The ROU asset is subsequently depreciated using the straight-line method from thecommencement date to the earlier of the end of the useful life of the ROU asset or the end of
the lease term. The estimated useful lives of ROU assets are determined on the same basis as
those of property, plant and equipment. In addition, the ROU asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

FINANCIAL STATEMENTS

153

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.5

Leases (continued)
2.5.2 Subsequent measurement (continued)
2.5.2.1 As a lessee (continued)
The lease liability is measured at amortised cost using the effective interest method. It isremeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a revision of in-substance fixed lease payments, or if there is a change
in the Company’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying
amount of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU
asset has been reduced to zero.
2.5.2.2 As a lessor
The Company recognises lease payments received under operating leases as income on astraight-line basis over the lease term as part of “revenue”.

2.6

Intangible assets
2.6.1	Recognition and measurement
Intangible assets represent software acquired by the Company and are measured at cost less any
accumulated amortisation and any accumulated impairment losses.
2.6.2 Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied
in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.
2.6.3 Amortisation
Intangible assets are amortised from the date they are available for use. Amortisation is recognised in
profit or loss on a straight-line basis over the estimated useful lives of the intangible assets.
The estimated useful lives for the current and comparative periods are as follows:•

Information technology software

5 years

154

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.7

Inventories
Inventories are measured at the lower of cost and net realisable value with weighted average cost being
the main basis for cost. Cost comprises the weighted average cost of merchandise derived at by using
the Retail Inventory Method. Weighted average cost includes related charges incurred in purchasing suchmerchandise.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
necessary to make the sale.

2.8

Contract asset/Contract liability
A contract asset is recognised when the Company’s right to consideration is conditional on something otherthan the passage of time. A contract asset is subject to impairment in accordance to MFRS 9, Financial
Instruments (see Note 2.10.1).
A contract liability is stated at cost and represents the obligation of the Company to transfer goods or services
to a customer for which consideration has been received (or the amount is due) from the customers.

2.9

Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits placed with licensed banks andhighly liquid investments which have an insignificant risk of changes in fair value with original maturities ofthree months or less, and are used by the Company in the management of its short term commitments.

2.10 Impairment
2.10.1

Financial assets
The Company recognises loss allowances for expected credit losses on financial assets measured
at amortised cost and contract assets. Expected credit losses are a probability-weighted estimate ofcredit losses.
The Company measures loss allowances at an amount equal to lifetime expected credit loss, except
for debt securities that are determined to have low credit risk at the reporting date, cash and bankbalance and other debt securities for which credit risk has not increased significantly since initialrecognition, which are measured at 12-month expected credit loss. Loss allowances for tradereceivables and contract assets are always measured at an amount equal to lifetime expected credit
loss.
When determining whether the credit risk of a financial asset has increased significantly since initialrecognition and when estimating expected credit loss, the Company considers reasonable andsupportable information that is relevant and available without undue cost or effort. This includes bothquantitative and qualitative information and analysis, based on the Company’s historical experienceand informed credit assessment and including forward-looking information, where available.
Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of the asset, while 12-month expected credit losses are the portion of
expected credit losses that result from default events that are possible within the 12 months after
the reporting date. The maximum period considered when estimating expected credit losses is the
maximum contractual period over which the Company is exposed to credit risk.
The Company estimates the expected credit losses on trade receivables using a provision matrix
with reference to historical credit loss experience.

FINANCIAL STATEMENTS

155

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.10 Impairment (continued)
2.10.1

Financial assets (continued)
An impairment loss in respect of financial assets measured at amortised cost is recognised in profit
or loss and the carrying amount of the asset is reduced through the use of an allowance account.
At each reporting date, the Company assesses whether financial assets carried at amortised cost are
credit impaired. A financial asset is credit impaired when one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have occurred.
The gross carrying amount of a financial asset is written off (either partially or full) to the extent that
there is no realistic prospect of recovery. This is generally the case when the Company determinesthat the debtor does not have assets or sources of income that could generate sufficient cash flows
to repay the amounts subject to the write-off. However, financial assets that are written off could still
be subject to enforcement activities in order to comply with the Company’s procedures for recovery
amounts due.

2.10.2	Other assets
The carrying amounts of other assets (except for inventories, contract assets and deferred tax assets)are reviewed at the end of each reporting period to determine whether there is any indication of
impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For the purpose of impairment testing, assets are grouped together into the smallest group of assetsthat generates cash inflows from continuing use that are largely independent of the cash inflows ofother assets or cash-generating units.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use andits fair value less costs of disposal. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating
unit exceeds its estimated recoverable amount.
Impairment losses are recognised in the profit or loss. Impairment losses recognised in respectof cash-generating units are allocated to reduce the carrying amount of the assets in the cashgenerating unit (groups of cash-generating units) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at the end of each reporting period forany indications that the loss has decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount since the last
impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment
losses are credited to profit or loss in the financial year in which the reversals are recognised.

156

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.11

Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.

2.12

Employee benefits
2.12.1 Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leaveand sick leave are measured on an undiscounted basis and are expensed as the related service isprovided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profitsharing plans if the Company has a present legal or constructive obligation to pay this amount asa result of past service provided by the employee and the obligation can be estimated reliably.
2.12.2 State plans
The Company’s contributions to statutory pension funds are charged to profit or loss in the financial
year to which they relate. Once the contributions have been paid, the Company has no further
payment obligations.

2.13	Revenue and other income
2.13.1	Retail sales - goods sold and commission earned
Revenue is measured based on the consideration specified in a contract with a customer inexchange for transferring goods or services to a customer, excluding amounts collected on behalfof third parties. The Company recognises revenue when it transfers control over a product orservice to customer. An asset is transferred when the customer obtains control of the asset.
The Company transfers control of a good or service at a point in time unless one of the following
overtime criteria is met:(a)the customer simultaneously receives and consumes the benefits provided as the Company
performs;(b)

the Company’s performance creates or enhances an asset that the customer controls as
the asset is created or enhanced; or(c)the Company’s performance does not create an asset with an alternative use and theCompany has an enforceable right to payment for performance completed to date.

When the Company acts in a capacity of an agent rather than as the principal in a transaction, therevenue is recognised upon the sale of goods and is the net amount of commission made by theCompany.
For items that are not sold separately – e.g. customer loyalty programme – the Company estimates
stand-alone selling prices as follow:

FINANCIAL STATEMENTS

157

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.13	Revenue and other income (continued)
2.13.1	Retail sales - goods sold and commission earned (continued)
Customer loyalty awards
The Company operates the customer loyalty programme and has transitioned this program to be
managed by its related company. This program allows customers to accumulate points when theypurchase products at the Company’s stores and these points are redeemable for gift vouchers.
Revenue is recognised net of costs attributable to loyalty points earned by members who purchase
the goods.
2.13.2 Property management services
Revenue from shopping mall operation which include fixed and variable rental income (including
sales commission), service charge and car park charges. Rental income is recognised in profit orloss on a straight-line basis over the term of the lease. Lease incentives granted are recognised
as an integral part of the total rental income, over the term of the lease. Rental income from subleased property is recognised as “revenue”.
2.13.3 Dividend income
Dividend income is recognised in profit or loss on the date that the Company’s right to receive
payment is established, which in the case of quoted securities is the ex-dividend date.
2.13.4 Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss
except for interest income arising from temporary investment of borrowings taken specificallyfor the purpose of obtaining a qualifying asset which is accounted for in accordance with theaccounting policy on borrowing costs.
2.14	Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of aqualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure
for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to
prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended
or ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use
or sale are interrupted or completed.

158

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.15

Income tax
Current tax and deferred tax expense are recognised in profit or loss except to the extent that it relates toitems recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax
payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the
carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred
tax is not recognised for the initial recognition of assets or liabilities in a transaction that affects neither
accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
The amount of deferred tax recognised is measured based on the expected manner of realisation orsettlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively
enacted at the reporting date. Deferred tax assets and liabilities are not discounted.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which temporary difference can be utilised. Deferred tax assets are reviewed at the end of eachreporting period and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.

2.16

Earnings per ordinary share ("EPS")
No diluted EPS is disclosed in these financial statements as there are no dilutive potential ordinary shares.

2.17	Operating segments
An operating segment is a component of the Company that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions withany of the Company’s other components. Operating segment results are reviewed regularly by the chief
operating decision maker, which in this case are the Managing Director and Board of Directors of theCompany, to make decisions about resources to be allocated to the segment and assess its performance,
and for which discrete financial information is available.
2.18	Other liabilities
Provision for restoration costs
Provision for site restoration is recognised when there is a projected cost of dismantlement, removalor restoration as a consequence of using a leased property during a particular period. The provision ismeasured at the present value of the restoration cost expected to be paid upon termination of the leaseagreement. The unwinding of the discount is recognised as finance cost.

FINANCIAL STATEMENTS

159

NOTES TO THE FINANCIAL STATEMENTS

2.

Material accounting policies (continued)
2.19

Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is not recognised in the statement of financial position and is disclosed asa contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations,whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events,
are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

2.20

Fair value measurements
Fair value of an asset or a liability, except for lease transactions, is determined as the price that would bereceived to sell an asset or paid to transfer a liability in an orderly transaction between market participantsat the measurement date. The measurement assumes that the transaction to sell the asset or transfer theliability takes place either in the principal market or in the absence of a principal market, in the mostadvantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability togenerate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
When measuring the fair value of an asset or a liability, the Company uses observable market data as far
as possible. Fair value is categorised into different levels in a fair value hierarchy based on the input usedin the valuation technique as follows:
Level 1:quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company
can access at the measurement date.

Level 2:

inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.

Level 3:

unobservable inputs for the asset or liability.

The Company recognises transfers between levels of the fair value hierarchy as of the date of the event orchange in circumstances that caused the transfers.

3.

-Transfer to intangible assets(Note 5)

818,808-

Transfer between classes

At 31 December 2023--

Adjustment #-Written off

175,806

Disposals-

Transfer between classes

Additions-

Written off

643,002-

At 31 December 2022/
1 January 2023-

Disposals

2,161,136--(7,653)(579)-

34,966*

2,134,402

-

(231)

-

24

2,134,609

RM’000643,002

Buildings

Land^

RM’000Additions

At 1 January 2022

Cost

Property, plant and equipment

811,473-

18,411-(26,545)(390)

50,442

769,5558,549(2,429)-17,317746,118

RM’000

Structures

17,614

-

178

-

(622)

-

270

17,788

25

(144)

(24)

183

17,748RM’000

Officeequipment

1,866,948-

19,940-(36,069)(1,673)72,1501,812,600

7,833(8,449)(2,966)

24,731

1,791,451

RM’000Machineryandequipment

651,515

-

3,220

-

(34,784)(364)

36,211

647,232

3,819(5,407)(1,051)

18,260631,611

RM’000Furniture,
fixtures andfittings

7,555

-

137

-

-

(960)

1,006

7,372

-

-

(371)

522

7,221

RM’000Motorvehicles

102,930-364-(1,765)

(560)

6,636

98,25550(387)(1,198)10,05489,736

RM’000ITequipment

77,471(530)(42,250)---

34,047

86,204(20,276)--

42,66363,817

RM’000Construction
work-inprogress
Total

6,515,450

(530)

-

(7,653)(100,364)(3,947)

411,534

6,216,410-(17,047)(5,610)113,754

6,125,313

RM’000160
AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

3.

-

Impairment--

Adjustment #Impairment- Accumulated impairment loss

- Accumulated depreciation-

853
568,753

63,187567,900

251(3,003)(579)-

63,187-

At 31 December 2023-

Written off

48,994

523,090

58,723

4,464

602

522,488

-

(71)

-

-

Disposals

Depreciation for the year

- Accumulated impairment loss

- Accumulated depreciation

58,723-

Written off

At 31 December 2022/
1 January 2023-

50,244472,91755,2253,498

602

472,315-

55,225

RM’000

RM’000

Disposals

Depreciation for the year

- Accumulated impairment loss

- Accumulated depreciation

At 1 January 2022

Depreciation and impairment
loss

Buildings

Land^

Property, plant and equipment (continued)

590,894

22,827568,067415-(25,599)(6)

57,770558,314

22,412535,902602(1,007)-51,508507,211

21,810485,401

RM’000

Structures

15,440694

14,746

13

-

(619)

-

608

15,438681

14,757

-

(135)

(22)

707

14,888681

14,207

RM’000

Officeequipment

1,505,911

19,321

1,486,590

797-(32,525)(1,275)112,396

1,426,518

18,524

1,407,994

808(6,172)(2,248)117,438

1,316,692

17,716

1,298,976

RM’000Machineryandequipment

590,172

13,313576,859

179-(34,449)(236)

29,183595,495

13,134582,361-(4,952)(809)

33,935567,321

13,134554,187

RM’000Furniture,
fixtures andfittings

6,092

15

6,077

-

-

-

(960)

387

6,665

15

6,650

-

-

(371)

322

6,714

15

6,699

RM’000Motorvehicles

84,757888

83,86979-(1,585)

(159)

5,954

80,468809

79,659-(323)(1,198)

5,852

76,137809

75,328RM’000ITequipment

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

RM’000Construction
work-inprogress

3,425,206

57,911

3,367,295

1,734(3,003)(95,356)(2,636)

259,756

3,264,711

56,1773,208,534

1,410(12,660)(4,648)263,504

3,017,105

54,7672,962,338

RM’000Total

FINANCIAL STATEMENTS161

NOTES TO THE FINANCIAL STATEMENTS

3.

361,037

61,34351,737
1,463

707

507

18,173

17,787

13,599RM’00077,471

86,20463,817

RM’000Construction
work-inprogress
Total

3,090,244

2,951,699

3,108,208

RM’000Relates to the reversal of provision for restoration costs during the year.

2,174

386,082

64,290

RM’000ITequipment#

220,579

2,350

474,759

RM’000MotorvehiclesAddition under buildings consist of capitalisation of provision for restoration costs of RM34,966,000.

1,592,383

211,2412,860

RM’000Furniture,
fixtures andfittings*

755,621

At 31 December 2023

1,611,312

238,907

RM’000Machineryandequipment

Included leasehold land defined under National Land Code 1965, with carrying amounts as at 31 December 2023 amounting to RM434,388,000 (2022:
RM263,044,000) with remaining lease terms ranging from 60 to 91 years (2022: 61 to 87 years).

584,279

At 31 December 2022/
1 January 2023

1,661,692

RM’000

Structures

Officeequipment^

587,777

RM’000

At 1 January 2022

Carrying amounts

Buildings

Land^

RM’000Property, plant and equipment (continued)

162
AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

FINANCIAL STATEMENTS163

NOTES TO THE FINANCIAL STATEMENTS

3.

Property, plant and equipment (continued)
3.1

Impairment loss
At the end of the reporting period, the Company determined whether its retail stores and shopping malls
have indication of impairment. For retail stores and shopping malls that are loss-making during the reporting
period, their assets’ recoverable amounts were being estimated for impairment testing.
For each identified retail store and shopping mall, their property, plant and equipment and ROU assets
were assessed as a group of assets that generates cash inflows for the retail store and shopping mall,respectively. The identified retail stores and shopping malls’ recoverable amounts were determined basedon their value in use. Impairment loss was recognised when the carrying amounts of the identified retailstores and shopping malls exceed their recoverable amounts.
During the year, impairment loss with respect to the plant and equipment for retail stores amounting to
RM1,734,000 (2022: RM1,410,000) was recognised in operating expenses in profit or loss.
The recoverable amounts, determined by way of value in use, were calculated by discounting the future cash
flows expected to be generated from the continuing use of the retail stores and shopping malls and werebased on the following key assumptions:•

Cash flows were projected based on past experience, actual operating results and business plan of
the Company for a period up to the maximum lease term of the retail stores and shopping malls. Thismaximum lease term is consistent with the tenure used in the calculation of right-of-use assets as
disclosed in Note 4. Management believes that this forecast period was justified due to management’s
intention to renew and operate the retail stores and shopping malls up to the maximum lease term.

•

The anticipated annual revenue growth rates included in the cash flow projections were between
1.8% to 14.2% (2022: 2.1% to 14.2%) based on average growth levels experienced over the years andmanagement’s assessment of future trends in the retail industry.

•

A pre-tax discount rate of 9.77% (2022: 8.48%) was applied in determining the recoverable amount of
the stores and shopping malls.

The values assigned to the key assumptions represent management’s assessment of future trends in theretail industry and are based on both external sources and internal sources (historical data) of information.
The above estimates are particularly sensitive to annual revenue growth rate and discount rate. A decreaseof 1% of the annual revenue growth rate or increase of 1% of discount rate would result in additional
impairment loss.

164

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

4.	Right-of-use assets

Note
At 1 January 2022
Addition

Land andbuildings

Equipment

Total

RM’000

RM’000

RM’0001,499,418

1,799

1,501,217

561

-

561

Depreciation(156,377)(1,172)(157,549)

Remeasurement(71,606)-(71,606)

Derecognition(41,690)-(41,690)

Impairment

4.4

At 31 December 2022/1 January 2023
Addition
Depreciation
Remeasurement
Derecognition
Impairment

4.4

At 31 December 2023

(19,760)-(19,760)

1,210,546

627

1,211,173

35,575-35,575(146,017)(627)(146,644)

73,826-73,826(83,574)-(83,574)(19,248)-(19,248)

1,071,108-

1,071,108

The Company leases a number of retail stores and shopping malls that run between one year and twelve years,
with an option to renew the lease after that date. Lease payments are increased every three to five years to reflectcurrent market rentals.
4.1	Variable lease payments based on sales
Some leases of retail stores contain variable lease payments that are based on sales that the Company
makes at the store. Those payments are common in retail stores operated by the Company. Fixed andvariable rental payments were as follows.

Fixed
payments

Variable
payments

Total
payments

Estimatedannualimpact on
rent of a 1%
increase insales

RM’000

RM’000

RM’000

RM’0002023

47,9696,062

54,031

61

2022

44,037

6,243

50,28062

Leases with lease payments based on sales

FINANCIAL STATEMENTS165

NOTES TO THE FINANCIAL STATEMENTS

4.	Right-of-use assets (continued)
4.2

Extension options
Some leases of retail stores and shopping malls contain extension options exercisable by the Company
of up to thirteen years (2022: thirteen years) before the end of the non-cancellable contract period. Where
applicable, the Company seeks to include extension options in new leases to provide operational flexibility.
The extension options held are exercisable only by the Company and not by the lessors. The Company
assesses at lease commencement whether it is reasonably certain to exercise the extension options. The
Company reassesses whether it is reasonably certain to exercise the options if there is a significant eventor significant change in circumstances within its control. Remeasurement during the year arose fromreassessment of extension options affecting lease term.
Potential
future lease
payments
Lease not includedin leaseliabilities
liabilities
recognised(discounted) (discounted)
RM’000

RM’000622,777

928,421682,486

921,4852023
Land and buildings
2022
Land and buildings
4.3

Significant judgements and assumptions in relation to leases
The Company assesses at lease commencement by applying judgement whether it is reasonably certain to
exercise the extension options. The Company considers all facts and circumstances including past practiceand any cost that will be incurred to change the asset if an option to extend is not taken, to help determine
the lease term.
The Company also applied judgement and assumptions in determining the incremental borrowing ratesof the respective leases. The Company first determines the closest available borrowing rates before
using judgement to determine the adjustments required to reflect the term, security, value or economic
environment of the respective leases.

4.4

Impairment loss
During the year, impairment loss on ROU assets for retail stores and shopping malls amounting to
RM19,248,000 (2022: RM19,760,000) was recognised in operating expenses in profit or loss.
Details on the impairment testing approach and key assumptions of the recoverable amounts are disclosed
in Note 3.1.
The key assumptions as disclosed in Note 3.1 are sensitive to annual revenue growth rate and discountrate. A decrease of 1% of the annual revenue growth rate or increase in 1% of discount rate would result in
additional impairment loss.

166

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

5.

Intangible assets
Information
technology
software
RM’000Cost
At 1 January 2022
Additions
Written off
At 31 December 2022/1 January 2023
Additions
Transfer from property, plant and equipment (Note 3)
Rebate from service provider
Written off
At 31 December 2023

118,913
4,620(237)
123,296
4,018
530(2,877)(270)
124,697

Amortisation and impairment loss
At 1 January 2022
- Accumulated amortisation- Accumulated impairment loss

55,810140
55,950

Amortisation for the year
Written off

15,750(182)

At 31 December 2022/1 January 2023
- Accumulated amortisation- Accumulated impairment loss

71,378140
71,518

Amortisation for the year

14,143

Written off(270)

Impairment18

At 31 December 2023
- Accumulated amortisation- Accumulated impairment loss

85,251
158
85,409Carrying amounts
At 1 January 2022

62,963

At 31 December 2022/1 January 2023

51,778At 31 December 2023

39,288

FINANCIAL STATEMENTS167

NOTES TO THE FINANCIAL STATEMENTS

6.

Investments in associates
2023
RM’0002022
RM’000Unquoted shares

8,800

9,200

Share of post-acquisition reserves(7,887)(8,524)913

676

Details of the associates are as follows:
Effective ownershipinterest and voting interest
Name of associates

Country ofincorporation

AEON Fantasy (Malaysia)
Sdn. Bhd. (“AFM”)

Malaysia

AEON TopValu Malaysia
Sdn. Bhd. (“ATVM”)*

Malaysia

2023

2022

Principal activities%%

Operating indoor amusementpark business

20

20

-

20

Product development of
AEON private brandAll associates are audited by another firm of accountants and equity accounted based on management accounts.
*

On 1 January 2022, ATVM lodged the Notice of Resolution for Members’ Voluntary Winding Up to Companies
Commission of Malaysia. In 2023, the winding up procedures are completed and the Company received
final distribution of RM634,000 in cash. Correspondingly, investment in ATVM amounting RM676,000 is derecognised and loss on liquidation of an associate amounting RM42,000 is recognised in profit or loss.

The summarised financial information of the Company’s investments in associates are as follows:

2023

AFM
RM’000

Summarised financial information
As at 31 December
Non-current assets

101,549

Current assets

50,283

Non-current liabilities(45,352)

Current liabilities(85,989)

Net assets

20,491

Year ended 31 December
Revenue

140,366

Profit from continuing operations

12,268Reconciliation of net assets to carrying amount as at 31 December
Company’s share of net assets

4,098

Share of gain of disposal of business(3,185)Carrying amount in the statement of financial position

913

Company’s share of results for the year ended 31 December

913

168

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

6.

Investments in associates (continued)
The summarised financial information of the Company’s investments in associates are as follows (continued):

2022

AFM

ATVM

Total

RM’000

RM’000

RM’000

Summarised financial information
As at 31 December
Non-current assets

95,892

283

Current assets

53,2893,427

Non-current liabilities(75,322)(200)

Current liabilities(65,635)

(130)

8,224

3,380

106,360

-

9,952

-

Net assets
Year ended 31 December
Revenue
Profit from continuing operations
Reconciliation of net assets to carrying amount as at
31 December
Company’s share of net assets

1,645

676

2,321

Share of gain of disposal of business(3,185)-(3,185)

Unrecognised share of losses

1,540

-

1,540

Carrying amount in the statement of financial position

-

676

676

Company’s share of results for the year ended 31 December

-

-

-

7.	Other investments
Note

2023

2022

RM’000

RM’00051,73458,422

Non-current
Quoted equity in Malaysia - Fair value through other comprehensive
income7.1

7.1

Equity investments designated at fair value through other comprehensive income
The Company designated the investments in equity security shown below as fair value through othercomprehensive income because this equity security represents investment that the Company intends tohold for long-term strategic purposes.

AEON Credit Service (M) Berhad

Fair value
at 31
December
2023

Dividend
incomerecognised
during 2023

Fair value
at 31
December
2022

Dividend
incomerecognised
during 2022

RM’000

RM’000

RM’000

RM’00051,734

2,299

58,422

2,252

FINANCIAL STATEMENTS169

NOTES TO THE FINANCIAL STATEMENTS

8.	Other assets
Other assets are rental and utility deposits relating to leased properties. These rental and utility deposits are in
substance prepayments as they are offset against the rental payable towards the end of the lease term under theusual circumstances.
9.

Deferred tax assets
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilities

Net

2023

2022

2023

2022

2023

2022

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000- capital
allowance

21,53014,061--

21,53014,061- revaluation--(5,862)(5,986)(5,862)(5,986)

Right-of-use
assets--(257,082)(290,682)(257,082)(290,682)

Property, plantand equipment

Lease liabilities

388,461

426,183--

388,461

426,183

Provisions

16,52916,912--

16,52916,912Contract liabilities

19,572

20,151--

19,572

20,151

Net deferred
tax assets/(liabilities)

446,092

477,307(262,944)(296,668)

183,148

180,639At
1.1.2022

Recognised
in profit
or loss(Note 22)At
31.12.2022/
1.1.2023

Recognised
in profit
or loss(Note 22)At
31.12.2023

RM’000

RM’000

RM’000

RM’000

RM’000- capital allowance

3,217

10,844

14,061

7,469

21,530- revaluation(6,110)124(5,986)124(5,862)

Movement in temporary differences during the year

Property, plant and equipment

Right-of-use assets(363,532)

72,850(290,682)

33,600(257,082)

Lease liabilities

495,597(69,414)426,183(37,722)

388,461

Provisions

15,8001,112

16,912(383)

16,529Contract liabilities

23,292(3,141)

20,151(579)

19,572

168,264

12,375

180,6392,509

183,148

170

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

9.

Deferred tax assets (continued)
Global minimum top-up tax
The Company has adopted Amendments to MFRS 112, Income Taxes - International Tax Reform – Pillar Two Model
Rules upon their release on 2 June 2023.
The amendments provide a temporary mandatory relief from deferred tax accounting for the top-up tax, which iseffective immediately, and require new disclosures about the Pillar Two exposure. The temporary mandatory relief
applies retrospectively.
The Company has applied a temporary mandatory relief from deferred tax accounting for the impacts of the topup tax and accounts for it as a current tax when it is incurred.
The initial application of this amendment is not expected to have any material financial impact to the current
period and prior period financial statements of the Company.

10.

Inventories
2023

2022

RM’000

RM’000Retail merchandise

281,355

294,636

Food and others

272,020

310,843553,375

605,479

2,380,778

2,421,285

1,596

(732)

Recognised in profit or loss:
Inventories recognised as an expense
Write-down/(reversal of write-down) of inventory

The write-down and reversal of write-down of inventory are included in changes in inventories.
11.

Contract assets/(liabilities)
2023

2022

RM’000

RM’000Contract assets

16,39017,169Contract liabilities(81,651)(84,619)

The contract assets primarily relate to the Company’s rights to consideration for the rental earned but not yet billed
at the reporting date. Typically, the amount will be billed within 30 days and payment is expected within 90 days.
The contract liabilities primarily relate to unutilised cash vouchers. The amount will be recognised as revenue
when cash vouchers are utilised by customers, which is expected to occur over the next two years.

Unutilised cash vouchers

2023

2022

RM’000

RM’00081,651

84,619

FINANCIAL STATEMENTS171

NOTES TO THE FINANCIAL STATEMENTS

11.

Contract assets/(liabilities) (continued)
Movement in contract liabilities
The following table shows reconciliation from the opening balance to the closing balance for contract liabilities
and its components.

At 1 January 2022
AdditionsUtilisation/Expired

Customer
rebates

Unutilised
cash
vouchers

Total

RM’000

RM’000

RM’0001,822

90,63492,456-

143,494

143,494(1,822)(149,509)(151,331)

At 31 December 2022/1 January 2023-

84,61984,619Additions-

151,114151,114

Utilisation/Expired-(154,082)(154,082)

At 31 December 2023-

81,651

81,651

Note

2023

2022

RM’000

RM’00054,987

51,122

12.	Receivables, deposits and prepayments

Trade
Trade receivables
Amount due from a related company

12.1

21,493

12,411

76,48063,533

3,662

2,251

Non-trade
Other receivables
Prepayments
Amounts due from related companies

12.1

7,762

15,317

10,166

12,476

21,59030,044

98,07093,57712.1 Amounts due from related companies
The trade amount due from a related company is unsecured, interest free and subject to normal trade terms.
The non-trade amounts due from related companies are unsecured, interest free and repayable on demand.

172

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

13.

14.

Cash and cash equivalents
2023

2022

RM’000

RM’000Cash and bank balances

49,82947,173

Deposits placed with licensed bank

50,000190,300

99,829237,473

Capital and reserves
Share capital
2023
Numberof shares

2022
AmountNumberof shares

Amount’000

RM’000’000

RM’0001,404,000

702,000

1,404,000

702,000

Issued and fully paid shares with no par value
classified as equity instruments:
Ordinary shares
At 1 January/31 December
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to
one vote per share at meetings of the Company.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of equity investment designated atfair value through other comprehensive income until the investments are derecognised or impaired.
15.	Borrowings

Note

2023

2022

RM’000

RM’000Non-current
Bank loans - unsecured

15.1

-

49,995Islamic Medium Term Notes - unsecured

15.2

370,000-

370,000

49,995Current
Bank loans - unsecured

15.1

49,99577,781Islamic Medium Term Notes - unsecured

15.2

-

370,000

49,995447,781

419,995

497,776

FINANCIAL STATEMENTS173

NOTES TO THE FINANCIAL STATEMENTS

15.	Borrowings (continued)

16.

15.1

The bank loans are unsecured, bear interest ranging from 2.99% to 3.03% (2022: 2.99% to 3.03%) per
annum and are repayable on quarterly basis up to 29 July 2024.

15.2

The unsecured Islamic Medium Term Notes bear interest ranging from 4.28% to 4.41% (2022: 3.15% to3.65%) per annum and are repayable 3 to 5 years (2022: 1 to 2 years) from issuance date.

15.3

Significant financial covenant in connection with the unsecured Islamic Medium Term Notes includes
the Company maintaining a debt to equity ratio not exceeding 1.0 time (2022: 1.0 time) throughout the
programme tenure. As at the end of the reporting period, the Company has complied with theserequirements.

Payables and accruals
2023

2022

Note

RM’000

RM’000

16.1

4,881

13,060632,428

698,114

Non-current
Non-tradeAmount due to a related company
Current
Trade
Trade payables
Amount due to an associate

16.1

-

1

Amount due to a related company

16.1

236

226

632,664

698,341

231,225

203,959

Non-trade
Other payables and accrued expenses

16.2

257,471

246,987

Amount due to holding company

Rental and utility deposits
16.1

17,374

18,399Amount due to an associate

16.1

1,796

2,100

Amount due to related companies

16.1

16.1

45,12344,198552,989

515,643

1,185,653

1,213,984

1,190,534

1,227,044

Amounts due to holding company, an associate and related companies
The trade amounts due to an associate and a related company are unsecured, interest free and subject tonormal trade terms.
The non-trade amounts due to holding company, an associate and related companies are unsecured,interest free and repayable on demand.
Included in non-trade amounts due to related companies is the deferred payment plan of RM11,035,000(2022: RM19,590,000) for acquisition of intangible assets in Note 5 and are unsecured, interest free andrepayable on annual basis up to year 2025.

16.2	Other payables and accrued expenses
Included in other payables and accrued expenses is accrued interest of RM8,466,000 (2022: RM4,419,000)
and dividend payable of RM192,000 (2022: Nil).

174

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

17.	Other liabilities
Provision for restoration costs
2023

2022

RM’000

RM’000

At 1 January

23,61522,299Provision made during the year

34,966

24

Provision utilised during the year

(6,286)(33)

Provision reversed during the year

(4,890)-

Unwinding of discount

1,042

1,325

At 31 December

48,447

23,615

Under the provision of lease agreements, the Company has an obligation to dismantle and remove structureson the site and restore those sites at the end of the lease term to an acceptable condition. The liabilities forrestoration are recognised at present value of the compounded future expenditure estimated using current priceand discounted using a discount rate of 4.41% (2022: 5.11%).
18.	Revenue

Sale of goods

2023

2022

RM’000

RM’0002,982,350

3,033,127

Net commission from concessionaire sales

413,810437,600

Property management services

682,920

623,532

Others49,95846,835

4,129,038

4,141,094

Nature of goods and services
The following information reflects the typical transactions of the Company:
Nature ofgoods orservices

Obligation
for returns or
refunds

Timing of recognition or method
used to recognise revenue

Significant
payment terms

Variable element
in consideration

Sale of goods
and netcommission
fromconcessionaire
sales

Revenue is recognised at the
point in time when the goods are
accepted by the customers at thestores of the Company.

Cash term.

Customers may
earn loyalty
points where thecosts attributed to
the loyalty points
will be recognised
net of revenue.

The Company
allows returns
for exchangewith new goods
under normal
circumstances
within 14 days
from the date ofpurchase.

Property
management
services

Revenue is recognised on astraight-line basis over the term of
the lease.

Credit period of
30 days frominvoice date.

Gross turnoverrent is recognised
as revenue in the
period in which
they are earned.

Not applicable.

When the Company acts in thecapacity of an agent rather than as
principal, the revenue recognised
at the point in time when the
goods are accepted by thecustomers and is the net amountof commission made.

FINANCIAL STATEMENTS175

NOTES TO THE FINANCIAL STATEMENTS

19.

Profit from operations
2023

2022

RM’000

RM’000310

310- KPMG PLT Malaysia

56

38- Local affiliates of KPMG PLT in Malaysia

141

93

14,14315,750

Profit from operations is arrived at after charging/(crediting):
Auditors’ remuneration- Audit fees
- KPMG PLT Malaysia- Non-audit fees

Material expenses/(income)Amortisation of intangible assets
Bad debts written off

2

2,088

Depreciation of property, plant and equipment

259,756

263,504

Depreciation of right-of-use assets

146,644

157,549(2,299)(2,252)-55- Realised

(708)

(491)

- Unrealised

11-(15,354)(10,025)

(14)

(106)

Dividend income
Intangible assets written off
Net (gain)/loss on foreign exchange

Net gain on lease derecognition
Net gain on disposal of property, plant and equipment
Personnel expenses (including key management personnel):- Contributions to Employees Provident Fund

45,33547,594- Wages, salaries and others

349,506

341,957

5,008

4,387

18

-

Property, plant and equipment written off
Net impairment loss on:- Intangible assets- Property, plant and equipment

1,734

1,410

- Right-of-use assets

19,24819,760- Trade receivables

3,028

2,460

18,543

19,840Royalty expense
Expenses arising from leases
Expenses relating to short-term leases

746

221

Expenses relating to low-value leases

1,682

1,017

176

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

20.

Finance income and finance costs
2023

2022

RM’000

RM’000Interest income of financial assets that are carried at amortised cost

6,137

3,121

Gain on disposal of unit trusts

2,880

-

9,017

3,121

- Financial liabilities that are carried at amortised cost

19,264

17,562- Lease liabilities

85,307

95,894- Other finance costs

1,042

1,325

105,613

114,781

Finance income

Finance costs
Interest expense:

21.

Key management personnel compensation
The key management personnel compensations are as follows:
2023

2022

RM’000

RM’000

Directors:
Fees

1,049

884

Remuneration

1,704

3,633

Other short-term employee benefits (including estimated monetary value of
benefits-in-kind)

22.

234

160

2,987

4,677

2023

2022

RM’000

RM’000- Current year

78,754

114,044- Under/(over) provision in prior year

2,861

(1,433)

81,615

112,611- Reversal of temporary differences(3,439)(10,595)- Under/(over) provision in prior year930

(1,780)(2,509)(12,375)

79,106100,236

193,938

211,468

Tax expense

Current tax expense

Deferred tax expense

Tax expense
Reconciliation of tax expense
Profit before tax

FINANCIAL STATEMENTS177

NOTES TO THE FINANCIAL STATEMENTS

22.

Tax expense (continued)
2023

2022

RM’000

RM’00046,54550,752-

26,771

Non-deductible expenses

30,232

26,468

Non-taxable income(1,462)(542)

75,315

103,449- Current tax expense

2,861(1,433)- Deferred tax expense930(1,780)79,106100,236

Tax calculated using Malaysian tax rate of 24% (2022: 24%)
Effect of changes in Malaysia tax rates*

Under/(over) provided in prior year

Tax expense*

The current year tax and the deferred tax assets and liabilities in respect of temporary differences that wererealised in 2022 were originated at blended rates. The blended rates were measured at 24% on the first
RM100 million of estimated chargeable income and 33% on the remaining estimated chargeable income forthe year of assessment 2022 in accordance with the Malaysian Finance Act 2021.

23.	Other comprehensive income
2023

2022

Before tax

Net of tax

Before tax

Net of tax

RM’000

RM’000

RM’000

RM’000(6,688)(6,688)(4,829)(4,829)Item that will not be reclassified subsequently
to profit or loss
Net change in fair value of equity investments
at fair value through other comprehensive
income24.

Earnings per ordinary share
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share was based on the profit attributable to ordinary shareholdersof the Company and the weighted average number of ordinary shares outstanding during the period.

Profit for the year attributable to owners of the Company

Weighted average number of ordinary shares at 31 December

Basic earnings per ordinary share

2023

2022

RM’000

RM’000114,832

111,232

2023

2022

’000

’000

1,404,000

1,404,000

2023

2022

Sen

Sen

8.18

7.92

178

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

24.

Earnings per ordinary share (continued)
Diluted earnings per ordinary share
There is no dilution in earnings per share as there is no potential dilutive ordinary shares.

25.

Dividend
Dividend recognised by the Company is as follows:Sen
per shareTotalamount
RM’000Date ofpayment

2023
Final 31.12.2022 dividend

4.00

56,160 15 June 2023

3.00

42,1202022
Final 31.12.2021 dividend

20 June 2022

After the end of the reporting period, the following dividend was recommended by the Directors. The dividend will
be recognised in subsequent financial period upon approval by the owners of the Company.

Final 31.12.2023 dividend

Sen
per shareTotalamount
RM’0004.00

56,16026.	Operating segments
The Company has two main reportable segments, as described below, which are based on the Company’s
management and internal reporting structure. Results from each of the segments are reviewed regularly by theManaging Director and the Board of Directors of the Company.
Reportable segments
The two main reportable segments are:Retailing

The operations of a chain of departmental stores and supermarkets sellinga broad range of goods ranging from clothing, food, household goods andother merchandise.

Property management services

Shopping mall operation.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that canbe allocated on a reasonable basis. Unallocated items comprise mainly interest-earning assets and interest
income, loans and borrowings and unallocated common expenses and tax assets and liabilities. Segment capital
expenditure is the total cost incurred during the year to acquire property, plant and equipment, right-of-use assets
and intangible assets.
As part of the Company’s re-alignment of segmental operating result, certain comparatives are restated by reallocating expenses across the segments.

FINANCIAL STATEMENTS179

NOTES TO THE FINANCIAL STATEMENTS

26.	Operating segments (continued)
Property
management services

Retailing

Total

2023

2022

2023

2022

2023

2022

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000Business segments
Revenue from externalcustomers

3,454,311

3,525,563

674,727

615,531

4,129,038

4,141,094

Total revenue

3,454,311

3,525,563

674,727

615,531

4,129,038

4,141,094

Segment profit

68,943

144,707

255,796214,246

324,739

358,953

Less: Unallocatedexpenses(35,118)(35,825)

Profit from operations

289,621323,128

Finance income

9,017

3,121

Finance costs(105,613)(114,781)

913-

Share of results of equityaccounted associates,
net of tax
Profit before tax

193,938

211,468

Tax expense(79,106)(100,236)

Profit for the year

114,832

111,232

4,988,866

5,055,384

234,677

370,939

Segment assets

1,334,988

1,338,108

3,653,878

3,717,276

Unallocated assets
Total assets
Segment liabilities(1,183,282)(1,252,418)(1,712,807)(1,838,656)

Unallocated liabilities
Total liabilities

5,223,543

5,426,323(2,896,089)(3,091,074)(468,442)(528,221)(3,364,531)(3,619,295)

Additions to non-current
assets other thanfinancial instruments
and deferred tax assets

184,478

70,040266,649

48,895451,127

118,935

Depreciation andamortisation

134,342

139,244286,201

297,559

420,543436,803

Impairment of intangible
assets

18

-

-

-

18

-

Impairment of property,
plant and equipment

1,734

1,410

-

-

1,734

1,410

Impairment of right-of-use
assets

1,374

4,349

17,874

15,411

19,24819,760

Write-down/(reversal ofwrite-down) of inventory

1,596

(732)

-

-

1,596

(732)

Geographical segment
There is no geographical information as the Company is predominantly operating in Malaysia.

180

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

27.

Capital management
The Company’s objectives when managing capital is to maintain a strong capital base and safeguard the Company’s
ability to continue as a going concern, so as to maintain investors, creditors and market confidence and to sustain
future development of the business. The Directors monitor and are determined to maintain an optimal debt-toequity ratio and meet regulatory requirement.
There were no changes in the Company’s approach to capital management during the year. Under the requirementof Bursa Malaysia Practice Note 17, the Company is required to maintain shareholders’ equity equal to or not lessthan 25% of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not lessthan RM40 million. The Company has complied with this requirement.

28.

Capital commitments
2023

2022

RM’000

RM’00013,78013,906

Property, plant and equipment
Contracted but not provided for and not payable:
29.	Related parties
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Company if the Company
has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over theparty in making financial and operating decisions, or vice versa, or where the Company and the parties are subject
to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority andresponsibility for planning, directing and controlling the activities of the Company either directly or indirectly. The
key management personnel include all the Directors of the Company.
The Company has related party relationship with its holding company, related companies and associates.

FINANCIAL STATEMENTS

181

NOTES TO THE FINANCIAL STATEMENTS

29.	Related parties (continued)
Significant related party transactions
The significant related party transactions of the Company (other than key management personnel compensation
as disclosed in Note 21) are shown below. The balances related to the below transactions are shown in Notes 12
and 16.
Transactions amount for theyear ended 31 December

Balance outstanding at
31 December

2023

2022

2023

2022

RM’000

RM’000

RM’000

RM’000(18,236)(19,491)(16,561)(17,539)

Holding company:
Royalty expenses
Related companies:
Sales collected through AEON Credit Service
payment services

1,389,962

1,285,046

21,452

12,557

Rental income

9,234

8,958

3,208

349

Sale of goods

3,710

2,288

701

515

Support services

281

2,723

168

356

Management fee

18,244

17,716

7,955

4,658

31

30

-

-

Credit card sales commission expenses

Trustee fee(8,492)(7,576)--

Supply chain and distribution centre
management fee(61,639)(60,361)(10,375)(15,968)

Purchase of inventories(9,332)(5,765)(1,682)(749)

Facility management services(57,224)(49,375)(7,300)(8,850)Rental expenses(17,647)(17,377)

(13)

(36)

Royalty expenses
Loyalty point cost and service cost

(307)

(349)

(236)

(349)

(13,862)(13,676)(1,998)

(909)

(39)

-

-

-

11,760

9,646

304

-

Associates:
Purchase of inventories
Rental income

The related party transactions described above were carried out on agreed terms with related parties. All theamounts outstanding are unsecured and expected to be settled in cash.

182

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments
30.1

Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:(a) Amortised cost (“AC”); and(b) Fair value through other comprehensive income (“FVOCI”)
Equity investment designated upon initial recognition (“EIDUIR”)
Carrying
amountAC

FVOCI EIDUIR

RM’000

RM’000

RM’0002023
Financial assets
Other investments

51,734-51,734

Receivables and deposits (excluding prepayments)

90,30890,308-Cash and cash equivalents

99,82999,829-241,871

190,137

51,734

Financial liabilities
Borrowings(419,995)(419,995)-(1,190,534)(1,190,534)-(1,610,529)(1,610,529)-

Other investments

58,422-58,422

Receivables and deposits (excluding prepayments)

78,26078,260-Cash and cash equivalents

237,473

237,473-

374,155

315,733

58,422(497,776)(497,776)-(1,227,044)(1,227,044)-(1,724,820)(1,724,820)-

Payables and accruals2022
Financial assets

Financial liabilities
Borrowings
Payables and accruals

FINANCIAL STATEMENTS183

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.2

Net gains and losses arising from financial instruments
2023

2022

RM’000

RM’000- recognised in other comprehensive income(6,688)(4,829)- recognised in profit or loss

2,299

2,252

Financial assets measured at fair value through profit or loss
mandatorily

2,880

-

Net gains/(losses) on:
Equity investment designated at fair value through othercomprehensive income

30.3

Financial assets at amortised cost

1,479

(1,427)

Financial liabilities at amortised cost

(18,567)(17,071)(18,597)(21,075)

Financial risk management
The Company has exposure to the following risks from its use of financial instruments:
•
•
•

30.4

Credit risk
Liquidity risk
Market risk

Credit risk
Credit risk is the risk of a financial loss to the Company if a customer, tenant or counterparty to a financial
instrument fails to meet its contractual obligations. The Company’s exposure to credit risk arise from its
shopping mall tenants and credit card receivables. There are no significant changes as compared to priorperiods.
Trade receivables and contract assets
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoingbasis. Credit evaluations are performed on shopping mall tenants. The Company requires all tenants toplace adequate security deposits as stipulated under the tenancy agreement. In terms of its credit card
receivables, which are from financial institutions, the Company has in place an ongoing process to monitor
closely and ensure risk exposure is always minimal.
At each reporting date, the Company assesses whether any of the trade receivables and contract assets are
credit impaired.
The gross carrying amounts of credit impaired trade receivables and contract assets are written off (either
partially or in full) when there is no realistic prospect of recovery. This is generally the case when the
Company determines that the debtor does not have assets or sources of income that could generatesufficient cash flows to repay the amounts subject to the write-off. Nevertheless, trade receivables andcontract assets that are written off could still be subject to enforcement activities.

184

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.4

Credit risk (continued)
Trade receivables and contract assets (continued)
Exposure to credit risk and credit quality and collateral
As at the end of the reporting period, the Company does not have any major concentration of credit risk
and the maximum exposure to credit risk arising from trade receivables and contract assets is represented
by the carrying amounts in the statement of financial position.
These receivables are credit card receivables from financial institutions and receivables from shopping
mall tenants. The tenants are required to place adequate security deposits as stipulated under the tenancy
agreement which act as collateral if receivables due from the tenants are not settled or in case of breachesof contract. Hence, credit risk with respect to receivables from shopping mall tenants is limited to amounts
beyond the collaterals.
Recognition and measurement of impairment losses
In managing credit risk of trade receivables, the Company manages its debtors and takes appropriate
actions (including but not limited to legal actions) to recover long overdue balances. Generally, tradereceivables will pay within 120 days. The Company’s debt recovery process is as follows:a)b)

Above 90 days past due after credit term, the Company will start to initiate a structured debt recovery
process which is monitored by the tenant management team; andAbove 180 days past due, the Company will commence a legal proceeding against the customer.

The Company uses an allowance matrix to measure expected credit losses (“ECLs”) of trade receivables.
Consistent with the debt recovery process, invoices which are past due 90 days will be considered as credit
impaired.
Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing
through successive stages of delinquency to 90 days past due.
Loss rates are based on actual credit loss experience over the past two years. The Company also considers
differences between (a) economic conditions during the period over which the historic data has beencollected, (b) current conditions and (c) the Company’s view of economic conditions over the expected livesof the receivables. Nevertheless, the Company believes that these factors are immaterial for the purpose of
impairment calculation for the year.

FINANCIAL STATEMENTS

185

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.4

Credit risk (continued)
Trade receivables and contract assets (continued)
Recognition and measurement of impairment losses (continued)
The following table provides information about the exposure to credit risk and ECLs for trade receivables
and contract assets which are grouped together as they are expected to have similar risk nature.
Grosscarrying
amountLossallowance*Netbalance

RM’000

RM’000

RM’00046,334-

46,3342023
Current (not past due)1 – 30 days past due

2,737

(741)

1,996

31 – 60 days past due

1,944

(527)

1,417

61 – 90 days past due

1,492

(404)

1,088

52,507(1,672)50,835Credit impaired
More than 90 days past due

25,106(6,800)18,306

Individually impaired

14,538(12,302)

2,236

92,151(20,774)

71,377

Trade receivables

75,761(20,774)

54,987

Contract assets

16,390-16,39092,151(20,774)

71,377- Where no loss allowance recognised

21,176-

21,176- Where loss allowance recognised

21,136(10,135)

11,001

42,312(10,135)

32,177

Collateralised trade receivables

186

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.4

Credit risk (continued)
Trade receivables and contract assets (continued)
Recognition and measurement of impairment losses (continued)
Grosscarrying
amountLossallowance*Netbalance

RM’000

RM’000

RM’00036,418-36,4182022
Current (not past due)1 – 30 days past due

2,894

(740)

2,154

31 – 60 days past due

1,959

(501)

1,458

61 – 90 days past due

1,109

(284)

825

42,380(1,525)40,855Credit impaired
More than 90 days past due

32,292(8,258)24,034

Individually impaired

15,413(12,011)

3,402

90,085(21,794)

68,291

72,916(21,794)

51,122

Trade receivables
Contract assets

17,169-17,16990,085(21,794)

68,291- Where no loss allowance recognised

17,229-17,229- Where loss allowance recognised

32,577(14,009)18,56849,806(14,009)35,797

Collateralised trade receivables*

The Company takes into account security deposits in determining the loss allowance to be provided
as at financial year end.

Trade receivables which are credit impaired amounting to RM21,136,000 (2022: RM32,577,000) are partiallycollateralised in the form of security deposit as stipulated in the lease agreement. Impairment loss has
been provided after taking into consideration of the collateral value of the security deposit of RM11,001,000(2022: RM18,568,000).
There are trade receivables where the Company has not recognised any loss allowance as the tradereceivables are supported by security deposits in managing exposure to credit risk.

FINANCIAL STATEMENTS187

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.4

Credit risk (continued)
Trade receivables and contract assets (continued)
Recognition and measurement of impairment losses (continued)
The movements in loss allowance in respect of trade receivables and contract assets during the year are
shown below:
Trade receivables
Lifetime
ECL

CreditimpairedContract
assetsTotal

RM’000

RM’000

RM’000

RM’000

Balance at 1 January 2022

14,705

5,232-

19,937

Net (reversal)/impairment(4,319)

6,779

-

2,460

Written off

(603)

-

-

(603)

Balance at 31 December 2022/
1 January 2023

9,783

12,011-

21,794

Net impairment

2,650

378

-

3,028

Written off(3,961)(87)-(4,048)

Balance at 31 December 2023

8,472

12,302-

20,774

Cash and cash equivalents
The cash and cash equivalents are held with licensed banks. As at the end of the reporting period, themaximum exposure to credit risk is represented by their carrying amounts in the statement of financial
position.
These licensed banks have low credit risks. In addition, some of the bank balances are insured bygovernment agencies. Consequently, the Company is of the view that the loss allowance is not material
and hence, it is not provided for.
Amount due from related companies
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying
amounts in the statement of financial position. Generally, the Company considers balances with relatedcompanies have low credit risk. The Company assumes that there is a significant increase in credit risk
when a related company’s financial position deteriorates significantly. As the Company is able to determine
the timing of payments of the related company balance when they are payable, the Company considers thebalances to be in default when the related companies are not able to pay when demanded.
At the end of the reporting period, the Company does not recognise any allowance for impairment loss.
	Other receivables
Credit risks on other receivables are mainly arising from sundry receivable. As at the end of the reporting
period, the maximum exposure to credit risk is represented by their carrying amounts in the statement offinancial position. The Company does not consider it necessary to recognise any allowance for impairment
losses.

188

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.5

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company’s exposure to liquidity risk arise principally from its various payables, loans and borrowings.
Risk management objectives, policies and processes for managing the risk
The Company monitors and maintains a level of cash and cash equivalents, and banking facilities that are
deemed adequate by management for the Company’s operational needs and mitigate effects of fluctuations
in cash flows and liquidity. The Company’s deposits are also placed with a licensed bank which is highly
liquid.
In 2016, the Company has established an Islamic Commercial Papers Programme with a limit of up to
RM300.0 million and an Islamic Medium Term Notes Programme with a limit of up to RM1.0 billion, under acombined master limit of up to RM1.0 billion in nominal value based on the Shariah principle of Murabahah
via Tawarruq arrangement (“Sukuk Programme”). In 2023, Islamic Commercial Papers Programme has
expired. The Directors are of the opinion that the Company will be able to meet its liabilities as and when
they fall due as there are sufficient unutilised facilities arising from the Sukuk Programme and otherfinancing facilities as at the year end; coupled with the ability of the Company in generating sufficient
operating cash flows based on the historical trend of positive operating cash flows.
It is not expected that the cash flows included in maturity analysis could occur significantly earlier, or atsignificantly different amounts.
Maturity analysis
The table below summarises the maturity profile of the Company’s financial liabilities as at the end of thereporting period based on undiscounted contractual payments:
Carrying Contractual Contractual
amount interest ratecash flows

Under
1 year2 to 5years

After
5 years

RM’000%

RM’000

RM’000

RM’000

RM’00049,9952.99 – 3.03

50,686

50,686--2023
Bank loans
Islamic Medium Term
Notes

370,000

4.28 – 4.41

440,409

16,062424,347-

Lease liabilities

1,623,904

3.20 – 5.35

2,185,396

257,864

833,032

1,094,500

Payables and accruals

1,190,534-

1,190,534

1,185,653

4,881

-

3,867,025

1,510,265

1,262,260

1,094,500

3,234,433
2022
Bank loans

127,776

2.99 - 3.03

131,430

80,74450,686-Islamic Medium Term
Notes

370,000

3.15 - 3.65

382,522382,522--

Lease liabilities

1,779,411

2.95 - 10.59

2,473,925

253,419

890,745

1,329,761

Payables and accruals

1,227,044-

1,227,044

1,213,984

13,060-4,214,921

1,930,669

954,491

1,329,761

3,504,231

FINANCIAL STATEMENTS189

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.6

Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and otherprices that will affect the Company’s financial position or cash flows.
30.6.1 Interest rate risk
The Company’s fixed rate borrowings are exposed to a risk of change in their fair values due tochanges in interest rates. Interest-earning financial assets are mainly deposits placed with licensed
bank that generates interest income.
Risk management objectives, policies and processes for managing the risk
The management monitors closely the prevailing interest rates at regular intervals and ensure that
the Company obtains competitive rates for its banking facilities, interest earning deposits, longterm and short term borrowings.
In view of the competitive rates that are available from the prevailing banking facilities granted
to the Company to finance its working capital requirements and the prevailing low interest ratescenario, the interest rate risk is not expected to have a material impact on the Company.
Exposure to interest rate risk
The interest rate profile of the Company’s significant interest-bearing financial instruments, basedon carrying amounts as at the end of the reporting period were:
2023

2022

RM’000

RM’00050,000190,300

Fixed rate instruments
Financial asset
Deposits placed with licensed bankFinancial liabilities
Bank loans(49,995)(127,776)

Islamic Medium Term Notes(370,000)(370,000)(1,623,904)(1,779,411)

Lease liabilities(2,043,899)(2,277,187)(1,993,899)(2,086,887)

Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value throughprofit or loss, and the Company does not designate derivatives as hedging instruments under afair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting
period would not affect profit or loss.

190

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.6

Market risk (continued)
30.6.2 Foreign currency risk
The Company does not have any significant exposure to foreign currency risk as its transactions
and balances are substantially denominated in Ringgit Malaysia.
30.6.3	Other price risk
Equity price risk arises from the Company’s investments in equity securities.
Risk management objectives, policies and processes for managing the risk
The Company’s equity investments are monitored regularly and subject to periodical review.
Transaction decisions are approved by the Board of Directors.
Equity price risk sensitivity analysis
A 1% (2022: 1%) increase in the market price of the investment as at the end of the reporting period
would have increased equity by RM517,000 (2022: RM584,000). A 1% (2022: 1%) decrease in market
price would have had equal but opposite effect on equity.

30.

30.7

30.7.1

Borrowings

Financial liability

Investment inquoted equities

Financial asset

2022

Borrowings

Financial liability

Investment inquoted equities

Financial asset

2023

-

58,422

-

-

-

-

-

RM’000

RM’00051,734

Level 2

Level 1

-

-

-

-

RM’000Level 3

Total-

58,422-

51,734

RM’000Fair value of financial instruments
carried at fair value

-

-

-

-

RM’000Level 1

-

-

-

-

RM’000Level 2(496,040)-(429,664)-

RM’000Level 3

Total

(496,040)-(429,664)-

RM’000Fair value of financial instruments
not carried at fair value(496,040)

58,422(429,664)

51,734

RM’000

Total
fair
value

(497,776)

58,422(419,995)

51,734

RM’000Carrying
amount

The carrying amounts of cash and cash equivalents, short term receivables, short term borrowings and payables reasonably approximate theirfair values due to the relatively short term nature of these financial instruments. The table below analyses financial instruments carried at fairvalue and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in thestatement of financial position.

Fair value information

Fair value of financial instruments

Financial instruments (continued)

FINANCIAL STATEMENTS191

NOTES TO THE FINANCIAL STATEMENTS

192

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS

30.

Financial instruments (continued)
30.7

Fair value of financial instruments (continued)
30.7.1

Fair value information (continued)
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the eventor change in circumstances that caused the transfer.
Level 1 fair value
Investment in quoted equities
The fair value of investment in quoted equities is derived from quoted price (unadjusted) in active
markets for identical financial assets or liabilities that the entity can access at the measurement
date.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and Level 2 fair values during the financial year (2022:
no transfer in either directions).
Level 3 fair value
The following table shows the valuation techniques used in the determination of fair values within
Level 3, as well as the key unobservable inputs used in the valuation models.
Financial instruments not carried at fair value

31.

Type

Description of valuation technique and inputs used

Borrowings

Discounted cash flows using a rate based on the current market rate of similarborrowings of the Company at the reporting date.

Material litigation
On 2 March 2021, the Company received a legal suit from Betanaz Properties Sdn. Bhd. (“Plaintiff”). The Plaintiff
alleged that the Company did not comply with its obligations under the Tenancy Agreement dated 24 August
2017 (“Tenancy Agreement”) to fulfill the conditions precedent under the Tenancy Agreement and had wrongfully
terminated the Tenancy Agreement. The Plaintiff is seeking for, among others, the following reliefs:(i)Rental payment payable to the Plaintiff for the tenancy period between 1 April 2020 to 17 December 2021
and for the initial term of ten (10) years of the lease amounting to a total sum of RM59,302,302.97; or(ii)

Expenditure allegedly incurred by the Plaintiff for the project, including but not limited to site clearance andearthworks, consultancy fees, financing costs and other incidental costs arising from the banking facilities
and others costs amounting to RM18,936,207.76.

On 29 March 2021, the Company filed the defence against the Plaintiff. Further, the Company, as the plaintiff,
filed a counterclaim against Betanaz Properties Sdn. Bhd. as the first defendant, and Ahmad Zaki Resources
Berhad (“AZRB”) as the second defendant due to the non-fulfillment of the conditions precedent on the part ofthe defendants prior to the expiry of the respective conditional periods and the Tenancy Agreement dated 24
August 2017 and Commercial Agreement dated 24 August 2017 had been rendered void due to the expiry of theconditional period on 23 October 2020 and 23 January 2020 respectively.

FINANCIAL STATEMENTS

193

NOTES TO THE FINANCIAL STATEMENTS

31.

Material litigation (continued)
The Company is claiming, among others, the return or payment of approximately RM2,303,087.00 being theconsultation fees for the project from the Plaintiff as first defendant and approximately RM28,415,094.44 being thecontribution towards the construction of the bridge connecting Bandar Kuantan to Bandar Putra, Tanjung Lumpur,
Pahang (“Bridge”), from AZRB as the second defendant.
AZRB further filed the application to strike out the Company’s counterclaim against AZRB on 7 May 2021 and on
22 October 2021, the High Court allowed AZRB’s application to strike out the Company’s counterclaim against
AZRB on the basis that the bridge across the Kuantan River, connecting Bandar Kuantan to Bandar Putra, Tanjung
Lumpur (“Bridge”) was completed and the Company’s counterclaim is not sustainable.
On 26 October 2021, the Company filed and served the Notice of Appeal against the decision of the High Court
judge and the hearing date is fixed on 9 May 2022.
Pursuant to the Company’s appeal against the High Court’s decision to allow AZRB’s application to strike out theCompany’s counterclaim against AZRB on 9 May 2022, the Court of Appeal has decided in favor of the Company,
and as a result, AZRB will be reinstated as a party to the Company’s counterclaim as the second defendant in thetrial for the Main Suit. Subsequently on 13 June 2022, the Court agreed to bring forward the trial dates for the Main
Suit to 6 to 7 July 2023 and 3 to 4 August 2023, respectively.
The trial for the Main Suit has commenced on 6 and 7 July 2023 and the Court has vacated the trial dates fixedon 3 and 4 August 2023. The Court has subsequently fixed further trial dates for the continuation of the trial from
September 2023 to July 2024.
Based on the advice by the Company’s legal counsel, the Directors are of the view that the Plaintiff is not entitled to
the reliefs because the Tenancy Agreement and Commercial Agreement dated 24 August 2017 had been renderedvoid due to the expiry of the conditional periods on 23 October 2020 and 23 January 2020 respectively. In addition,
the damages sought by the Plaintiff in relation to the rental are contradictory to the Rules of Court as the said
category of claim is general damages which should not have been quantified as if it were special damages. Hence,
provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic
benefits will be required or the amount is not capable of reliable measurement.

194

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Statement by Directors
pursuant to Section 251(2) of the Companies Act 2016

In the opinion of the Directors, the financial statements set out on pages 140 to 193 are drawn up in accordance with
Malaysian Financial Reporting Standards, IFRS Accounting Standards and the requirements of the Companies Act 2016
in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2023 and ofits financial performance and cash flows for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:………………………………………………
Datuk Iskandar bin Sarudin
Director………………………………………………
Naoya Okada
Director

Kuala Lumpur
Date: 15 March 2024

Statutory declaration
pursuant to Section 251(1)(b) of the Companies Act 2016

I, Tan Ai Lee, the officer primarily responsible for the financial management of AEON CO. (M) BHD., do solemnly andsincerely declare that the financial statements set out on pages 140 to 193 are, to the best of my knowledge and belief,correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the
Statutory Declarations Act 1960.
Subscribed and solemnly declared by the abovenamed Tan Ai Lee, at Kuala Lumpur in the Federal Territory on 15 March2024.

…………………………………………
Tan Ai Lee

Before me:

FINANCIAL STATEMENTS

195

independent auditors' report
TO THE MEMBERS OF AEON CO. (M) BHD.

Report on the Audit of the Financial Statements
OpinionWe have audited the financial statements of AEON CO. (M) BHD., which comprise the statement of financial position
as at 31 December 2023, and the statement of profit or loss and other comprehensive income, statement of changes inequity and statement of cash flows for the year then ended, and notes to the financial statements, including material
accounting policy information, as set out on pages 140 to 193.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company
as at 31 December 2023, and of its financial performance and its cash flows for the year then ended in accordancewith Malaysian Financial Reporting Standards, IFRS Accounting Standards as issued by the International AccountingStandards Board (“IFRS Accounting Standards”) and the requirements of the Companies Act 2016 in Malaysia.
Basis for Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards
on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the
Audit of the Financial Statements section of our auditors’ report. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice)of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA
Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of thefinancial statements of the Company for the current year. These matters were addressed in the context of our auditof the financial statements of the Company as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters.
i)

Impairment of property, plant and equipment and right-of-use assets
Refer to Note 2.4 – Material accounting policy: Property, plant and equipment, Note 2.5 – Material accounting
policy: Leases, Note 3 – Property, plant and equipment and Note 4 – Right-of-use assets.
The key audit matter
In light of the industry and business environment which the Company operates in, there were significant balancesof property, plant and equipment and right-of-use assets amounting to RM3,090,244,000 and RM1,071,108,000
which represented approximately 59% and 21% of the Company’s total assets, respectively as at 31 December
2023. There is a risk that the carrying amounts of certain assets may be higher than the recoverable amount asa result of certain loss making stores and malls. The determination of whether or not an impairment charge forproperty, plant and equipment and right-of-use assets is necessary involved significant judgement about the
future results of the business and assessment of future plans for the Company’s property, plant and equipment
and right-of-use assets.
How the matter was addressed in our audit
We performed the following audit procedures, among others:•

Evaluated the assessment performed by the Company on the indicators of impairment of property, plant andequipment and right-of-use assets to determine whether the relevant internal and external factors have been
considered.

196

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

independent auditors' report
TO THE MEMBERS OF AEON CO. (M) BHD.

Key Audit Matters (continued)i)

Impairment of property, plant and equipment and right-of-use assets (continued)
How the matter was addressed in our audit (continued)
•

•

ii)

Assessed the discounted cash flow projections for stores and malls with indicators of impairment prepared by
the Company by performing the following procedures:-

evaluated the impairment test model by comparing it with the requirements of the relevant accounting
standards;-

evaluated the appropriateness of the key assumptions used in particular those relating to revenue growthrate and discount rate with reference to internal and external sources of information;-

tested historical forecasting accuracy by comparing the forecasted results used in the discounted cash
flow prepared in the prior year against current year performance; and-performed sensitivity analysis on the key assumptions such as revenue growth rate and discount rate
to consider the extent of change in those key assumptions that either individually or collectively would
require the property, plant and equipment or right-of-use assets to be impaired or further impaired, if any.

Assessed the adequacy of the Company’s disclosures in respect of impairment of property, plant and equipment
and right-of-use assets including those key assumptions to which the outcome of the impairment test is mostsensitive.

Costing and valuation of inventory
Refer to Note 2.7 – Material accounting policy: Inventories and Note 10 – Inventories.
The key audit matter
The Company held significant inventory balances as at 31 December 2023 of RM553,375,000 which represented
approximately 11% of the Company’s total assets. Inventory is valued using weighted average cost of merchandise
derived using the Retail Inventory Method (“RIM”). Allowance is made against inventory on the estimated losses
related to shrinkage and slow moving or obsolete inventory. The valuation of inventory is a key audit matter becauseof the judgement involved in assessing the level of allowance required. The use of RIM in inventory costing requires
certain assumptions on the consistent mark up across all products in current and prior periods.
How the matter was addressed in our audit
We performed the following audit procedures, among others:•

Tested the design and implementation and assessed the operating effectiveness of system calculation controls
over the weighted average cost of inventory derived using RIM.

•

Assessed the relevant inputs used in the computation of weighted average cost of inventory derived using
RIM by vouching to supporting documents or by comparing to historical data and other collaborative evidence
available.

•

Evaluated the design and implementation and operating effectiveness of the controls over the approval process
for retail price alteration of merchandise as well as approval process for stock loss adjustments.

•

Obtained an understanding of the Company's process in identifying inventories which value required to be
written down and assessed on a sampling basis, the adequacy of the amount written down by reference tohistorical data and current retail prices.

•

On a sampling basis, compared the carrying value of the inventory items at reporting date to retail pricesubsequent to year end to ascertain that the value is at the lower of carrying amount and net realisable value.

FINANCIAL STATEMENTS

197

independent auditors' report
TO THE MEMBERS OF AEON CO. (M) BHD.

Information Other than the Financial Statements and Auditors’ Report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the information
included in Directors’ report (but does not include the financial statements of the Company and our auditors’ report
thereon), which we obtained prior to the date of this auditors’ report, and the remaining parts of the annual report, which
are expected to be made available to us after that date.
Our opinion on the financial statements of the Company does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Company, our responsibility is to read the otherinformation identified above and, in doing so, consider whether the other information is materially inconsistent withthe financial statements of the Company or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to the date of thisauditors’ report, we conclude that there is a material misstatement of this other information, we are required to reportthat fact. We have nothing to report in this regard.
When we read the remaining parts of the annual report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the Directors of the Company and take appropriate actions in accordancewith approved standards on auditing in Malaysia and International Standards on Auditing.
Responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the Company that give atrue and fair view in accordance with Malaysian Financial Reporting Standards, IFRS Accounting Standards and therequirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the
Directors determine is necessary to enable the preparation of financial statements of the Company that are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements of the Company, the Directors are responsible for assessing the ability of theCompany to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations,or have no realistic alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually orin the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the financial statements of the Company, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence thatis sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theinternal control of the Company.

198

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

independent auditors' report
TO THE MEMBERS OF AEON CO. (M) BHD.

Auditors’ Responsibilities for the Audit of the Financial Statements (continued)•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the Directors.

•

Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the ability of the Company to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial
statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Company to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial statements of the Company, including
the disclosures, and whether the financial statements of the Company represent the underlying transactions andevents in a manner that gives a true and fair view.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought tobear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance inthe audit of the financial statements of the Company for the current year and are therefore the key audit matters. We
describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefitsof such communication.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies
Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.

KPMG PLT						Chan Chee Keong(LLP0010081-LCA & AF 0758)				
Approval Number: 03175/04/2025 J
Chartered Accountants					Chartered Accountant
Petaling Jaya, Malaysia
Date: 15 March 2024

ADDITIONAL INFORMATION

199

ANALYSIS OF SHAREHOLDINGSAs at 25 March 2024

Issued Share Capital
Voting Rights		

: RM702,000,000 comprising 1,404,000,000 Ordinary Shares: 1 vote per Ordinary Share

Analysis by Size of Shareholdings(Based on the Record of Depositors of the Company)

Size of Shareholdings
1 – 99No. ofShareholders/
Depositors% ofShareholders/
Depositors

No. ofShares held

% of
Shares held

886

7.97

6,398

0.00

100 – 1,000

2,947

26.50

1,728,786

0.12

1,001 – 10,000

5,080

45.68

23,502,738

1.67

10,001 – 100,000

1,831

16.47

58,002,735

4.13

100,001 – 70,199,999*

375

3.37

604,719,343

43.07

70,200,000 and above**

1

0.01

716,040,000

51.00

11,120100.001,404,000,000

100.00Total***

Less than 5% of issued shares
5% and above of issued shares

Substantial Shareholders(Based on Register of Substantial Shareholders of the Company)
No. of Shares
No. Name

Direct Interest%

Indirect Interest%

1

AEON Co., Ltd.

725,640,000

51.68

-

-

2

Employees Provident Fund Board

127,584,000

9.09

-

-

Directors’ Interest(Based on Register of Directors’ Shareholdings of the Company)
No. of Shares
No. Name*

Direct Interest%

Indirect Interest%

1

Datuk Iskandar Sarudin

-

-

-

-

2

Mr. Naoya Okada

-

-

-

-

3

Mr. Tsugutoshi Seko

-

-

-

-

4

En. Hisham Zainal Mokhtar

-

-

-

-

5

Pn. Zaida Khalida Shaari

-

-

-

-

6

Dato’ Merina Abu Tahir

-

-

-

-

7

Ms. Jenifer Thien Bit Leong

-

-

-

-

8

En. Mohamad Abdul Naser Md
Jaafar @ Yunus

-

-

-

-

9

Ms. Chong Swee Ying

42,6000.003

11,000*0.001

10Mr. Hiroaki Egawa

-

-

-

-

Indirect interest pursuant to Section 59(11)(c) of the Companies Act, 2016

200

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

ANALYSIS OF SHAREHOLDINGSAs at 25 March 2024

List of Thirty (30) Largest Shareholders(Without aggregating securities from different securities accounts belonging to the same registered holder)

No. NameNo. ofShares Held

% of
Shares Held1

AEON CO., LTD

716,040,000

51.00

2

AMANAHRAYA TRUSTEES BERHAD

68,762,500

4.90

AMANAH SAHAM BUMIPUTERA
3

LEMBAGA TABUNG HAJI

56,738,200

4.04

4

CITIGROUP NOMINEES (TEMPATAN) SDN BHD

51,881,700

3.70

32,728,983

2.33

21,061,100

1.50

19,088,800

1.36

15,150,000

1.08

14,639,300

1.04

11,931,617

0.85

11,834,500

0.84

10,730,800

0.76

10,408,100

0.74

10,116,900

0.72

10,097,300

0.72

9,600,000

0.68

9,598,000

0.68

9,528,648

0.68

EMPLOYEES PROVIDENT FUND BOARD (AHAM AM)
5

CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD

6

CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (NOMURA)

7

AMANAHRAYA TRUSTEES BERHAD
PUBLIC SMALLCAP FUND

8AMSEC NOMINEES (TEMPATAN) SDN BHDAMBANK (M) BERHAD FOR TAN BOON SENG (7928-1102)

9

CARTABAN NOMINEES (TEMPATAN) SDN BHD
PAMB FOR PRULINK EQUITY FUND

10

CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (ISLAMIC)

11

CITIGROUP NOMINEES (TEMPATAN) SDN BHDKUMPULAN WANG PERSARAAN (DIPERBADANKAN) (AHAM AM EQ)

12AMANAHRAYA TRUSTEES BERHAD
PUBLIC ISLAMIC OPPORTUNITIES FUND

13

CARTABAN NOMINEES (TEMPATAN) SDN BHD
PRUDENTIAL ASSURANCE MALAYSIA BERHAD FOR PRULINKSTRATEGIC FUND

14

AMANAHRAYA TRUSTEES BERHAD
PUBLIC STRATEGIC SMALLCAP FUND

15

CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
CIMB COMMERCE TRUSTEE BERHAD FOR KENANGA SHARIAH
GROWTH OPPORTUNITIES FUND (50156 TR01)

16

CITIGROUP NOMINEES (ASING) SDN BHD
EXEMPT AN FOR NOMURA SECURITIES CO LTD (CLIENT AC)

17

CITIGROUP NOMINEES (TEMPATAN) SDN BHDKUMPULAN WANG PERSARAAN (DIPERBADANKAN) (AHAM ABSR EQ)

18

CARTABAN NOMINEES (ASING) SDN BHDSSBT FUND J724 FOR SPDR PORTFOLIO EMERGING MARKETS ETF

19

ROSHAYATI BINTI BASIR

9,240,000

0.66

20

CITIGROUP NOMINEES (ASING) SDN BHD

8,980,000

0.64

7,796,100

0.56

EXEMPT AN FOR CITIBANK NEW YORK (NORGES BANK 22)
21

CIMB ISLAMIC NOMINEES (TEMPATAN) SDN BHD
CIMB ISLAMIC TRUSTEE BERHAD - KENANGA SYARIAH GROWTH FUNDADDITIONAL INFORMATION

201

ANALYSIS OF SHAREHOLDINGSAs at 25 March 2024

No. Name
22

HSBC NOMINEES (TEMPATAN) SDN BHD

No. ofShares Held

% of
Shares Held

7,655,600

0.55

7,611,700

0.54

6,300,000

0.45

5,596,400

0.40

HSBC (M) TRUSTEE BHD FOR MANULIFE INVESTMENT SHARIAH
PROGRESS FUND
23

CITIGROUP NOMINEES (TEMPATAN) SDN BHDKUMPULAN WANG PERSARAAN (DIPERBADANKAN) (KENANGA)

24

AMANAH RAYA BERHADKUMPULAN WANG BERSAMA25

CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
CIMB BANK BERHAD (EDP 2)

26

HIDENORI FUTAGI

4,800,000

0.34

27

PHILLIP NOMINEES (TEMPATAN) SDN BHD

4,700,000

0.33

4,649,900

0.33

4,429,400

0.32

4,274,700

0.30

1,165,970,248

83.05

PLEDGED SECURITIES ACCOUNT FOR GOH LENG PHEOW
28

DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHADLEMBAGA TABUNG HAJI (AL -WARA')

29

CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (RHBISLAMIC)

30CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
EXEMPT AN FOR PETROLIAM NASIONAL BERHAD (ACF-AFFIN-EQ)
TOTAL

202

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Particulars of Properties
As at 31 December 2023

Description/
Existing Use

Land/
Built-up
Area(sq ft)Date of
Acquisition (A)/Completion (C)/
Revaluation (R)Approx.
Age ofBuilding(Years)Leasehold land/

436,036/

30

Existing two-storey
shopping centre

200,316

February 1995
(R)

Extension/Renovation
with rooftop car park

179,989

Leasehold land/Lot 23551,
Mukim of Setapak,Two-storey shopping
District and State ofcentre and threeWilayah Persekutuan.
storey car park

368,516/

Leasehold land/
Lot PT 21441
Mukim of Kapar,
Two-storey shopping
District of Klang,centre and two-storey
Selangor Darul Ehsan.
car park

LocationLot 7041,
Mukim of Bukit Baru,
District of Melaka
Tengah, Melaka.

23.5

TenureNet Book
Value as at
31 December
2023(RM ’000)

99 years
expiring on
19
December
2089

35,651

29.5

95 years
expiring on
28 March
2085

56,560666,694

February 1995
(R)

643,753/

June 1994 (A)/26

37,547

691,414

October 1995 (C)99 years
expiring on
9 May 2093

19.5

Freehold

18,934

Freehold land/

377,490/

April 2002 (A)/Two-storey shopping
centre including
covered car park483,299

August 2002 (C)Leasehold land/Lot 62232,
Mukim Batu,
Two-storey shopping
Daerah Kuala Lumpur,
centre and threeWilayah Persekutuan.
storey car park

409,577/

January 2004 (C)18

99 years
expiring on
25 August2103

65,94216

Freehold

307,473

Lot 49045,
Mukim of Pulai,
District of Johor
Bahru,
Johor Darul Takzim.

906,497

Freehold land/

1,308,035/

March 2004 (A)/Three-storey
shopping centre withbasement car park

1,468,693

January 2006 (C)Extension/Renovation

2,854,623

October 2016 (C)5.5

Lot PT 41977
Leasehold land/Lot 3144,
Freehold land/
Mukim of Cheras,Two-storey shopping
District of Ulu Langat,
centre and two-storey
Selangor Darul Ehsan.
car park

550,910/

April 2004 (A)/15

63,382

113,451/

April 2004 (A)/893,819

December 2006
(C)

99 years
expiring on
12 April 2103
Freehold

Leasehold land/

631,620/

March 2007 (A)/13

106,311

Two-storey shopping
centre with basement
car park

895,449

December 2008(C)

87 years
expiring on
5 April 2083

Freehold land/

1,645,671/

October 2007 (A)/13

Freehold

206,742

Three-storey shopping
centre with open carpark

845,634

December 2008(C)

Lot 102076,
Mukim of Tebrau,
District of Johor
Bahru,
Johor Darul Takzim.

Lot 5106,
Mukim Ulu Kelang,
Kuala Lumpur.
Lot 136962,
Mukim Pulai, Districtof Johor Bahru,
Johor Darul Takzim.

ADDITIONAL INFORMATION

203

Particulars of Properties
As at 31 December 2023

Net Book
Value as at
31 December
2023(RM ’000)

Description/
Existing Use

Land/
Built-up
Area(sq ft)Date of
Acquisition (A)/Completion (C)/
Revaluation (R)Approx.
Age ofBuilding(Years)Leasehold land/

755,855/

June 2010 (A)/10

103,384

Three-storey shopping
centre with two-storey
car park

1,287,504

March 2012 (C)99 years
expiring on
3 November
2109

Freehold land/793,623/

December 2011
(A)/

8

Freehold

88,640Two-storey shopping
centre with two-storey
car park

911,842

November 2013(C)

Lot 31009,
Freehold land/
Mukim 15, Daerah
Three-storey shopping
Seberang Peraicentre with rooftop andTengah, Pulau Pinang.
open car park

784,834/

August 2011 (A)/

7.5

Freehold

131,968

750,235

June 2014 (C)Lot 2437 Seksyen 13,
Leasehold land/
Bandar Shah Alam,
Daerah Petaling,Three-storey shopping
Selangor Darul Ehsan. centre, entertainment

818,273/

December 2012
(A)/

5.25

236,296

1,573,114

March 2016 (C)99 years
expiring on
26 October
2103

Freehold land/

910,235/

December 2015
(A)/

3.25

Freehold

264,585

Three-storey shopping
centre, entertainment
hub with rooftop &two-storey car park

1,294,639

September 2017(C)

PN 12273, Lot 10048,
Leasehold land/
Seksyen 17, Bandar
Three-storey shopping
Kota Bharu, Daerah
centre with rooftop,
Jajahan Kota Bharu,
basement and open
Kelantan Darul Naim.
car park

935,491

27 July 2023 (A)/7

298,373

1,337,469

28 April 2016 (C)99 years
Leaseholdexpiring on
20 June 2114

Location
PT 239099,
Mukim Hulu Kinta,
Daerah Kinta,
Perak Darul Ridzuan.
Lot 106273,
Mukim Kulai, Daerah
Kulaijaya,
Johor Darul Takzim.

Tenurehub with rooftop &basement car park
PTD 181046,
Mukim Tebrau,
DaerahJohor Bahru,
Johor Darul Takzim.

204

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

CORPORATE INFORMATION AND DIRECTORY
BOARD OF DIRECTORS• Datuk Iskandar Sarudin (Chairman)• Dato’ Merina Abu Tahir• Mr. Naoya Okada• Ms. Jenifer Thien Bit Leong• Mr. Tsugutoshi Seko

• En. Mohamad Abdul Naser Md Jaafar @ Yunus• En. Hisham Zainal Mokhtar• Ms. Chong Swee Ying

• Pn. Zaida Khalida Shaari• Mr. Hiroaki Egawa

SECRETARIES

AUDITORS• Tai Yit Chan
(SSM PC No. 202008001023) (MAICSA 7009143)• Tan Ai Ning
(SSM PC No. 202008000067) (MAICSA 7015852)

KPMG PLT(LLP0010081-LCA & AF 0758)
Chartered Accountants
Level 10, KPMG Tower
8, First Avenue, Bandar Utama
47800 Petaling Jaya

REGISTERED OFFICE AND HEAD OFFICE
3rd Floor, AEON Taman Maluri Shopping Centre
Jalan Jejaka, Taman Maluri
Cheras, 55100 Kuala Lumpur
TelFax: 03 – 9207 2005
: 03 – 9207 2006/2007

DATE OF INCORPORATION
15 September 1984
STOCK EXCHANGE LISTINGThe Company is a public listed company, incorporated
and domiciled in Malaysia and listed on the Main Marketof the Bursa Malaysia Securities Berhad
Stock Name: AEON
Stock Code: 6599
PRINCIPAL BANKERS• Malayan Banking Berhad[Registration No. 196001000142(3813-K)]• MUFG Bank (Malaysia) Berhad[Registration No. 199401016638(302316-U)]• Mizuho Bank (Malaysia) Berhad[Registration No. 201001039768(923693-H)]• CIMB Bank Berhad[Registration No. 197201001799(13491-P)]• RHB Bank Berhad[Registration No. 201001039768(923693-H)]

Tel
Fax

: 03 – 7721 3388
: 03 – 7721 3399

SHARE REGISTRAR
Tricor Investor & Issuing House Services Sdn Bhd[Registration No. 197101000970(11324-H)]
Unit 32-01, Level 32, Tower A
Vertical Business Suite
Avenue 3, Bangsar SouthNo. 8, Jalan Kerinchi
59200 Kuala Lumpur
Tel: 03-2783 9299
Fax
: 03-2783 9222
Email : is.enquiry@my.tricorglobal.com
CORPORATE CALENDARNOTICE OF 38TH ANNUAL GENERAL MEETING• 18 April 2023
38TH ANNUAL GENERAL MEETING• 17 May 2023
PAYMENT OF DIVIDEND• Book Closure – 31 May 2023
• Payment – 15 June 2023
FY2023 QUARTERLY RESULTS ANNOUNCEMENTS• 1st Quarter 19 May 2023
• 2nd Quarter 22 August 2023
• 3rd Quarter 24 November 2023
• 4th Quarter 23 February 2024

Scan the QR Code for:1. Notice of 39 th Annual General Meeting
2. Proxy Form
3. Administrative Details for the 39 th Annual General Meeting

ADDITIONAL INFORMATION

205

Independent Limited Assurance Report

The Board of Directors
AEON CO. (M) BHDrd
3 Floor, AEON Taman Maluri Shopping Centre
Jalan Jejaka, Taman Maluri
Cheras, 55100 Kuala Lumpur
Dear Sirs,
Independent Limited Assurance Report on Selected Sustainability Information of AEON CO. (M)BHD (“the Company”) for the financial year ended 31 December 2023
We, KPMG PLT (“KPMG”), were engaged to provide limited assurance on the Company’s SelectedSustainability Information (the “Subject Matter”), published in AEON CO. (M) BHD’s Integrated Annual
Report for the financial year ended 31 December 2023 (the “Integrated Annual Report”), in the form of an
independent limited assurance conclusion as to whether anything has come to our attention that would
cause us to believe that the Subject Matter, in all material respects, has not been prepared in accordancewith AEON CO. (M) BHD’s definition and calculation methodologies, including any significant inherent
limitations (the “Applicable Criteria”).
Subject Matter
The Selected Sustainability Information covered by our limited assurance engagement for the financial
year ended 31 December 2023 are as follows:(i)

Total energy consumption - electricity (Megawatt (MW));(ii)

Total water withdrawal (Megalitres (ML));(iii)

Total waste diverted from disposal (Metric tonnes (Mt));(iv)

Total amount invested in community (RM);(v)

Loss time incident rate (Rate);(vi)

Percentage of employees by gender and age group (for each employee group) (%); and(vii)

Percentage of employees who have received training on anti-corruption by employee category(%)

The boundary of the limited assurance engagement by KPMG on the Selected Sustainability Information
covers the Company’s operations in Malaysia.

1

206

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Independent Limited Assurance Report

AEON CO. (M) BHD (the “Company”)
Independent Limited Assurance Report on Selected Sustainability Information of
AEON Co. (M). BHD for the financial year ended 31 December 2023
25 March 2024

Board of Directors and Management’s Responsibilities
The Board of Directors of AEON CO. (M) BHD (the “Directors”) and the management of AEON CO. (M)BHD (the “Management”) are responsible for the preparation and presentation of the Subject Matter inaccordance with the Applicable Criteria, and the information and assertions contained within it; fordetermining that the criteria is appropriate to meet their needs; and for establishing and maintaining
appropriate performance management and internal control systems from which the Subject Matter isderived.
The Directors and the Management are responsible for the prevention and detection of fraud and error
mainly through the implementation and continued operation of an adequate system of internal control.
The Directors and the Management are also responsible for ensuring that staff involved with the
preparation and presentation of the description of the Subject Matter in the Integrated Annual Report areproperly trained, ensuring that information systems are properly updated and that any changes inreporting encompass all significant business units.
The Directors and the Management are responsible for disclosing to us their knowledge of: (i) known,
actual or possible non-compliance with laws or regulations that have or may have a material effect on the
Subject Matter; and (ii) allegations of or suspected fraud or dishonesty committed against the Company.
The Directors and the Management are responsible to make available to us the Subject Matter and anyother information timely to facilitate the completion of the engagement within the required time frame.
The Directors and the Management are responsible for disclosing to us facts that may affect the Subject
Matter, of which they may become aware up to the date of the independent limited assurance report.
Our Responsibilities
Our responsibility is to carry out a limited assurance engagement and to express a limited assurance
opinion based on the work performed and evidence obtained.
We conducted our engagement in accordance with Malaysian Approved Standard on Assurance
Engagements (ISAE) 3000 (Revised), Assurance Engagements Other Than Audits or Reviews ofHistorical Financial Information. This standard requires that we plan and perform procedures to obtain
limited assurance that nothing has come to our attention that causes us to believe that the Subject
Matter, in all material respects, is not prepared in accordance with the Applicable Criteria.
Procedures Performed
Our limited assurance engagement on the Subject Matter consists of making enquiries, primarily of
persons responsible for the preparation of the Subject Matter, and applying analytical and other evidence
gathering procedures, as appropriate. These procedures included:•

Enquired Management to gain an understanding of the processes established from which the Subject
Matter is derived;•

Interviewed relevant staff responsible for preparing and presenting the Subject Matter in the
Integrated Annual Report;•

Compared the Subject Matter presented in the Integrated Annual Report to underlying sources on asample basis to determine whether all the relevant information has been appropriately disclosed; and•Read the Subject Matter presented in the Integrated Annual Report to determine whether they are inline with our overall knowledge of, and experience with, the sustainability performance of theCompany.

2

ADDITIONAL INFORMATION

207

Independent Limited Assurance Report

AEON CO. (M) BHD (the “Company”)
Independent Limited Assurance Report on Selected Sustainability Information of
AEON Co. (M). BHD for the financial year ended 31 December 2023
25 March 2024

Procedures Performed (continued)
The procedures performed in a limited assurance engagement vary in nature and timing from, and areless in extent than for, a reasonable assurance engagement and consequently the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would havebeen obtained had a reasonable assurance engagement been performed.
Our Quality Management and Independence
Our firm applies Malaysian Approved Standard on Quality Management, ISQM 1, Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements, which requires the firm to design, implement and operate a system of quality management
including policies or procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
We have complied with the independence and other ethical requirements of the By-Laws (onProfessional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants, which is foundedon fundamental principles of integrity, objectivity, professional competence and due care, confidentiality
and professional behaviour.
Inherent Limitations
Due to the inherent limitations of any internal control structure, it is possible that errors or irregularities in
the information presented in the Integrated Annual Report may occur and not be detected. Our
engagement is not designed to detect all weaknesses in the internal controls over the preparation andpresentation of the Integrated Annual Report, as the engagement has not been performed continuously
throughout the period and the procedures performed were undertaken on a test basis.
Conclusion
Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for ourconclusion.
Based on the limited assurance procedures performed and evidence obtained, as described above,nothing has come to our attention that would lead us to believe that the Subject Matter for the financial
year ended 31 December 2023, in all material respects, is not prepared in accordance with theApplicable Criteria.

3

208

AEON CO. (M) BHD. | INTEGRATED Annual Report 2023

Independent Limited Assurance Report

AEON CO. (M) BHD (the “Company”)
Independent Limited Assurance Report on Selected Sustainability Information of
AEON Co. (M). BHD for the financial year ended 31 December 2023
25 March 2024

Restriction on distribution and use of our report
In accordance with the terms of our engagement, this report on the Subject Matter has been prepared forthe Directors for the purpose as described in the first paragraph of this report and for no other purpose. Our
report should also not be regarded as suitable to be used or relied on by any party.
We consent to the inclusion of this report in AEON CO. (M) BHD’s Integrated Annual Report in respect of
the financial year ended 31 December 2023, to assist the Directors in responding to their governanceresponsibilities by obtaining an independent limited assurance report on the Subject Matter. We will not
accept any liability or responsibility to any other party to whom our report is shown or into whose hands it
may come.

KPMG PLT(LLP0010081-LCA & AF 0758)
Chartered Accountants
Petaling Jaya
Date: 25 March 2024

4

AEON CO. (M) BHD.
Registration No. 198401014370 (126926-H)

For more information, please visit:www.aeongroupmalaysia.com

3rd Floor, AEON Taman Maluri Shopping Centre
Jalan Jejaka, Taman Maluri, Cheras
55100 Kuala Lumpur, Malaysia
Tel		
Fax		
AEON Careline: +603-9207 2005
: +603-9207 2006/2007: 1-300-80-AEON(2366)

AEON’s Annual Integrated Report 2023 is printed on environmentally friendly paper

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