Compliance Statement | Board Committees | Shareholders | Accountability and Audit |

COMPLIANCE STATEMENT

The Board recognizes that corporate governance is about commitment to values and ethical conduct and managing stakeholder expectations.

The Board is therefore, pleased to set out below a statement outlining the main corporate governance practices of the Company under the Malaysian Code of Corporate Governance and the manner in which it has applied and complied with the best practices of the Code throughout the financial year.

Board responsibilities

The Board's principal focus is the overall strategic direction, development and control of the Company and ensuring accountability to its shareholders. In support of this, the Board:

1. Reviews the Company's long-term strategic plans on an annual basis, so as to align the Company's business directions and goals with the prevailing economic and market conditions;
2. Reviews the Company's internal control system and function of Board committees to assist the Board in discharging its responsibilities;
3. Approves the Company's annual budget and reviews the Company's business operations and financial performance
4. Reviews and approves corporate exercises, such as acquisitions, if any, and circular to shareholders, where relevant;
5. Notes the decisions and salient issues deliberated by the Board Committees through the minutes of the Board Committees and/or through their respective Chairman; and
6. Establish and implements an active investor relations programme.

Board Composition and Balance

The present size and composition of the Board is optimum and well balanced, in terms of the required mix of skills and experience, including core competencies. This results in the Board having the stability, continuity and commitment as well as capacity to discharge its responsibilities effectively.

The Board consists of 10 members, comprising of one (1) Non- Executive Chairman who is also non executive director, four (4) Executive Directors and five (5) Non-Executive Directors. The Chairman and three (3) of the Non-Executive Directors are Independent Directors. The Directors profiles are presented in pages 17 to 19 of this Annual Report.

Datuk Ramli Ibrahim is the Independent Non-Executive Director to whom concerns on matters relating to corporate governance of the Company could be conveyed to.

Appointments to the Board

The Company has in place formal procedures for the appointment of new Directors. These procedures ensure that all nominees to the Board are first considered by the Nomination Committee, taking into account the required mix of skills, experience and other qualities of Board members, prior to making a recommendation to the Board and major shareholders.

Board Meetings

Board meetings are conducted in accordance with a structured agenda. The agenda for each Board meeting and the relevant papers are forwarded to the Board prior to the Board meeting to facilitate the Directors to peruse the Board papers and review the issues well ahead of the meeting date.

Board meetings are held at least on a quarterly basis. Additional meetings are held as and when required. During the financial year, the Board met four (4) of times where it deliberated and considered a variety of matters, inclusive of financial results, operation performance and resolutions and recorded its deliberations in terms of issues discussed and the conclusion in discharging its duties and responsibilities.

Supply Information

The Board and the respective Board committees are furnished with Board papers and reports providing updates on financial, operational and corporate plans, developments and results prior to Board meetings to facilitate informed discussion and decisionmaking.

The Board welcomes the presence of senior management members, who are invited to attend Board meetings to brief Directors on the business operations and performance. All Directors have access to the advice and services of the Company Secretary. The Directors are regularly updated and advised by the Company Secretary on new statutory and regulatory requirements and their impact and the implication on the Company and Directors in carrying out their fiduciary duties and responsibilities.

Procedures are in place for the Board to seek independent professional advice in the course of fulfilling their responsibilities, at the Company's expense.

Training of Directors

All new Directors are given a briefing of the Company's history, operations and performance. All Directors of the Company have attended the Mandatory Accreditation Programme and certain directors have attended other corporate training during the year. The Directors have also been provided with updates on relevant new law and regulations affecting their role as Directors.

Re-election of Directors

In accordance with the Company's Articles of Association, all Directors retire by rotation once every 3 years and are eligible to offer themselves for re-election by shareholders at the Company's Annual General Meeting (“AGM”). Directors appointed by the Board in each financial year are subject to election by the shareholders at the next AGM following their appointments. Particulars of Directors subject to re-election by shareholders in the current year are set out in the Statement accompanying the Notice of AGM.

BOARD COMMITTEES

The Board delegates certain responsibilities to Board Committees based on defined terms of reference, which are reviewed from time to time. The Chairman of the various committees reports the outcomes of their committee meetings to the Board, and any further deliberation is made at Board level if required. These reports and deliberations are incorporated into the minutes of the Board meetings.

Audit Committee

The Audit Committee assists the Board in assessing the Company's processes relating to its risks and control environment based on its defined terms of reference. It is responsible to oversee the internal audit function of the Company and ensure the adequacy and integrity of internal control systems in place. Further details on members of the Audit Committee, terms of reference and activities for the financial year under review are set out on pages 25 to 28 of the Annual Report.

Nomination Committee

The Nomination Committee comprises the following members:

• Mr Yoshiki Mori (Chairman)
• Dato' Abdullah Mohd Yusof
• Mr Takatoshi Ikenishi (appointed on 18 June 2008)
• Datuk Ramli Ibrahim
• Dato' Kamal Ismaun

A selection process for new appointees to the Board as recommended by the Nomination Committee has been adopted by the Board.

The Committee is responsible for making recommendation to the Board on the optimum size of the Board, formalising a transparent procedure for proposing new nominees to the Board and Board Committees and ensuring that the investment of the minority shareholders are fairly reflected on the Board. The Committee will review annually the required mix of skills, experience and other qualities of the Board including core-competencies which Non- Executive Directors should bring to the Board. The Committee also assesses annually the effectiveness of the Board as a whole, the Committees of the Board and contribution of each individual Director and the effectiveness and performance of the Executive Directors.

During the financial year ended 20 February 2009, two (2) Nomination Committee meetings were held and attended by all its members. During the year, the Nomination Committee had reviewed and assessed the mix of skills and experience and size of the Board, contribution of each director and effectiveness of the Board and Board Committees and also reviewed the retirement of directors by rotation eligible for re-election.

Remuneration Committee

The Remuneration Committee comprises the following members:

• Mr Yoshiki Mori (Chairman)
• Dato' Abdullah Mohd Yusof
• Mr Takatoshi Ikenishi (appointed on 18 June 2008)

The Remuneration Committee is responsible for recommending to the Board, the remuneration of Executive Directors and Non- Executive Directors of the Group in all its forms. The Executive Directors concerned play no part in the decision of their own remuneration but may attend the Committee meetings at the invitation of the Chairperson of the Committee if their presence is required. The determination of remuneration of the Independent Non-Executive Directors is a matter for the Board, as a whole, with individual Director abstaining from discussion of their own remuneration. The Company's Articles of Association provide that any increase in Directors' fees should be approved at a general meeting.

During the financial year ended 20 February 2009, one (1) Remuneration Committee meeting was held and was attended by all its members. During the year, the Remuneration Committee reviewed and recommended to the Board, the remuneration for the Managing Director and Executive Directors of the Group and further recommended the Non-Executive Directors' fees to the Board to seek shareholders' approval at the Company's Annual General Meeting.

Directors Remuneration

The breakdown of the remuneration of the Directors, categorised into appropriate components for the financial year ended 20 February 2009 is as follows:

The Directors' remuneration are broadly categorised into the following bands:

SHAREHOLDERS

Investor Relations

The Company's financial performance and corporate developments in the Company have been promptly announced to all shareholders in line with Bursa Malaysia Securities Berhad (Bursa Malaysia)'s objectives of ensuring transparency and good corporate governance. Further updates of the Company's activities and operations are also disseminated through dialogues with analysts, fund managers and investors as well as press releases from time to time.

Additional information is available from the Company's website (www.aeonmalaysia.com.my) including updates on promotions for the Company's products and services, services offered by the Company and the Company's corporate information. A dedicated e-mail address is available at [IR@aeonmalaysia.com.my] providing contact point for shareholders on any issue of concern.

During the Annual General Meeting, shareholders are given a presentation on the Company's performance and major activities during the year under review. Shareholders will have the opportunity to enquire and comment on the Company's performance and operations.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to provide and present a balanced and meaningful assessment of the Group's financial performance and prospects, primarily through its annual financial statements, half-yearly and quarterly statements to shareholders and the review of operations through its annual report. The Audit Committee and the Board oversee the Company's annual and quarterly reporting and the quality of its financial reporting.

Directors' Responsibility Statement in Respect of the Preparation of the Audited Financial Statements

The Directors are responsible for ensuring that financial statements are drawn up in accordance with applicable accounting standards in Malaysia, the provisions of the Companies Act, 1965, and the requirements of Bursa Malaysia and other regulatory bodies. In presenting the financial statements which have been prepared on a going concern basis, the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgement and estimates, to show a true and fair view of the state of affairs of the Company and its results and cash flow for the financial year under review.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965. The Directors have a general responsibility for taking such steps as reasonably open to them to safeguard the assets of the Company, to prevent and detect fraud and other irregularities.

Statement of Internal Control

The Statement on Internal Control as set out in page 29 of the Annual Report provides an overview of the state of internal controls within the Company.

Recurrent Related Party Transactions

At the Eleventh Annual General meeting held on 17 June 2008, the Company obtained a shareholders' mandate to allow the Company to enter into recurrent related party transactions of a revenue or trading nature.

All recurrent related party transactions entered into by the Company during the financial year ended 20 February 2009 are disclosed in Note 18 of the financial statements in page 54 of the Annual Report 2009.

Relationship with Auditors

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

Compliance with the Malaysian Code on Corporate Governance

The Board is pleased to state that the Company was in compliance with all the principles and best practices as advocated in the Malaysian Code on Corporate Governance during the financial year under review, except for disclosure of each individual Director's remuneration.