ACSM - Annual Report 2020 - Part 2

LEADERSHIP
04
28 Board of Directors
35 Top Management
36 Senior Management
28 AEON Credit Service (M) Berhad
Annual Report 2020
BOARD OF DIRECTORS
NG ENG KIAT
Chairman and Non-Independent Non-Executive Director
(67, Malaysian, Male)
Ng Eng Kiat was appointed as the Chairman of AEON

Credit on 8 May 2018. Prior to this appointment, he was an
Independent Non-Executive Director of AEON Credit since
7 August 2007, and redesignated as a Non-Independent
Non-Executive Director on 23 January 2019. He is a member
of the Malaysian Institute of Accountants (MIA), Malaysian
Institute of Certified Public Accountants (MICPA) and fellow
member of the Chartered Tax Institute of Malaysia.
He has more than 40 years of experience in the field of

audit, accountancy, corporate services and taxation. He had
previously served as a member on a number of working groups
of the Malaysian Accounting Standards Board, a coopted
member on a number of committees of the MICPA and an
examiner for the final professional examination of the MICPA.
Presently, he is the Senior Partner/Adviser of the merged firm
of Azman, Wong, Salleh & Co and Folks DFK & Co.
He is currently a member of the audit license interview panel

representing MIA. He also sits on the Board of Directors of
several private limited companies.
He is a member of the Remuneration Committee of the

Company. He does not hold directorship in any other public
or public listed company.
Ng has attended all fourteen (14) Board meetings held during

the year ended 29 February 2020 and holds 21,321 ordinary
shares directly in the Company.
Note:
All Directors disclosed on pages 28 to 34 do not have any family relationship with any Director and/or major shareholder of
the Company, any conflict of interest with the Company, or any conviction for offences within the past 5 years, except for
traffic offences, if any.
AEON Credit Service (M) Berhad 29
Annual Report 2020
YURO KISAKA DATO’ MD KAMAL BIN ISMAUN

Managing Director Non-Independent Non-Executive Director
(46, Japanese, Male) (72, Malaysian, Male)
Yuro Kisaka was appointed as the Managing Director of AEON Dato’ Md. Kamal bin Ismaun was appointed as a Non-Executive
Credit on 20 June 2019. He obtained a Bachelor’s Degree in Director of AEON Credit on 7 August 2007, and redesignated
Law from Nihon University in Japan in 1997. as a Non-Independent Non-Executive Director on 23 January
2019. He obtained a Bachelor’s Degree in Arts with Honours
Kisaka began his career at AEON Credit Service Co., Ltd. majoring in History and International Relations from Universiti
in April 1997 and was subsequently transferred to AEON Malaya in 1975.
Credit Service (Asia) Co., Ltd. in 2003 as an Assistant
General Manager, heading the Sales and Marketing Division. He had served 32 years in the Foreign Service in various
Thereafter, he managed the Operations Division from 2006 to capacities both abroad and in Wisma Putra (Ministry of Foreign
2007. Affairs) which included stints as Counsellor at the Embassy
of Malaysia in Tokyo, Japan (1986-1990), Charge d’Affaires
Subsequently, Kisaka was transferred to AEON Credit Service in Zagreb, Croatia in Bosnia Herzegovina (1994-1996),
(M) Berhad in December 2007, where he managed the Ambassador to Cambodia (1996-1999), Under-Secretary at the
Marketing, Credit Card and New Business Development Ministry of Foreign Affairs (Southeast Asia and Pacific, 1999-
departments in the period until 2011. 2001), Director-General of ASEAN in the Ministry of Foreign
Affairs (2001-2003) and Ambassador to Germany (2003 - July
In June 2012, he was appointed as the Chief Representative 2007).
at the Myanmar Representative Office of AEON Credit Service
Co., Ltd. prior to establishment of business operations in He also serves as a member of the Nominating Committee in
Myanmar. In November 2012, he was appointed as the the Company. He does not hold any directorship in any other
Managing Director of AEON Microfinance (Myanmar) Co., public or public listed company.
Ltd., a position which he held until his transfer to the Company
in Malaysia in June 2019. Dato’ Kamal has attended all fourteen (14) Board meetings
held during the year ended 29 February 2020 and holds 9,000
He does not hold any directorship in any other public or public ordinary shares directly and 18,000 ICULS in the Company.
listed company.
Kisaka has attended ten (10) Board meetings held during

the year ended 29 February 2020. He holds 82,080 ordinary
shares directly in the Company.
Annual Report 2020
BOARD OF DIRECTORS
TOMOKATSU YOSHITOSHI S SUNTHARA MOORTHY A/L S SUBRAMANIAM

Independent Non-Executive Director Independent Non-Executive Director
(68, Japanese, Male) (58, Malaysian, Male)
Tomokatsu Yoshitoshi was appointed as an Independent S Sunthara Moorthy A/L S Subramaniam was appointed as
Non-Executive Director of AEON Credit on 30 June 2016. an Independent Non- Executive Director of AEON Credit on
1 March 2018. He is a Fellow Member of the Association of
He obtained a Bachelor’s Degree in Law (Political Science)
from Keio University, Japan in 1975. He received his post Chartered Certified Accountants (ACCA) and a Chartered
graduate education from the Graduate School of Business Accountant with the MIA.
Administration, Indiana University, Bloomington Indiana, USA
in 1981. He has over 30 years of experience, mainly in general
management, strategic business development, corporate
He has over 44 years of wide range international business
finance, accountancy, tax and audit. Sunthara served as an
experiences based on 24 years of international banking
career at the Long-Term Credit Bank of Japan, Ltd. including audit senior in several accounting firms in London, United
assignments at USA, Brazil and UK. Kingdom (UK) from 1986 to 1995, prior to joining Faber
Group Berhad (FGB) (now known as UEM Edgenta Berhad)
Then he served as General Manager of Finance at the Dai- in 1995, where he served for 16 years. He held a few key
ichi Hotel, Ltd., Japan in 1998, General Manager of LDA positions in FGB and prior to leaving FGB, he was the Chief
Commercial Division at ING Life Insurance Co., Ltd. in 1999,
General Manager at the Investment Trust Services Division in Executive Officer of Faber Facilities Sdn Bhd, a wholly-owned
2000. subsidiary of FGB, while concurrently holding the position
of the Director of Corporate Services of FGB. He was on the
He was appointed as President of ING Mutual Fund Board of Eversendai Corporation Berhad as Executive Director
Management Co., Ltd. from 2002 to 2003. of Corporate Affairs from October 2011 until March 2017.
Subsequently, he served as General Manager of Bank
Distribution Business Development at ING Life Insurance Co., Currently, he is the Chairman of the Audit Committee of the
Ltd. until 2009. Company. He does not hold any directorship in any other
public or public listed company.
He serves as an Audit & Supervisory Board Member at the
Financial Products Group Co., Ltd. from 2012 until now. Sunthara has attended all fourteen (14) Board meetings held
during the year ended 29 February 2020. He does not hold
In 2015, he was appointed as an Independent Non-Executive
Director at AEON Bank Ltd., and as an Audit & Supervisory any shares in the Company.
Board Member at FPG Trust Company Ltd. until now.
Currently, he holds the chair at both Remuneration Committee

and Nominating Committee in the Company.
Yoshitoshi has attended all fourteen (14) Board meetings held

during the year ended 29 February 2020. He does not hold
any shares in the Company.
Annual Report 2020
YBHG. DATUK ADINAN BIN MANING DATIN KHOO PEK LING

Senior Independent Non-Executive Director Independent Non-Executive Director
(63, Malaysian, Male) (68, Malaysian, Female)
YBhg. Datuk Adinan bin Maning was appointed as an Datin Khoo Pek Ling was appointed as an Independent Non-
Independent Non-Executive Director of AEON Credit on the Executive Director of AEON Credit on 28 June 2018. She
28 June 2018. He was appointed as a Senior Independent qualified as a Chartered Accountant of England & Wales in
Director on 23 January 2019. 1977; and is a Fellow of the Institute of Chartered Accountants
England & Wales, a member of the MICPA, a member of the
YBhg. Datuk Adinan has 38 years of working experience MIA and a member of the Chartered Tax Institute of Malaysia.
of which 30 years has been in banking. He started in
1980 with Bank Bumiputra Malaysia Berhad and had She started her career in Malaysia with Turquand Young (now
in the last 10 years of his career served as the Chief Ernst & Young) in 1977 before taking up role as the Group
Executive Officer of Bank Simpanan Nasional (BSN). Financial Controller of a major public listed group for five
Throughout his career he had exposure in various other years. In 1984, she started her own public practice and after
industries such as property development and construction, several audit firm mergers, she became a senior partner of
manufacturing, loan recovery, assets management, Folks DFK & Co and Azman Wong Salleh & Co.
investment and insurance.
She was on the Board of DFK International, an international
He is currently the Non-Executive Chairman of Prokhas Sdn association of independent accounting firms from 1992 to
Bhd since September 2019 and a board member of Urusharta 1994. In January 2018, she retired from Folks DFK & Co and
Jemaah Sdn Bhd. Previously he had served as Chairman Azman Wong Salleh & Co after 35 years of professional practice
of BSNC Corporation Berhad, a board member of BSN, in audit, taxation and insolvency services. She currently serves
Prudential BSN Takaful Berhad, Permodalan BSN Berhad and on the committee of a Non-Governmental Organisation and
Gibraltar BSN Life Berhad. Datuk Adinan was the President of she also sits on the Board of Directors of several private limited
World Savings Bank Institute (Asia Pacific) and had served companies.
as Treasurer of Persatuan Badan Berkanun Malayisa and a
council member of Association of Development Financial She is a member of the Audit Committee and Board Risk
Institution of Malaysia (ADFIM). Committee of the Company. She does not hold any directorship
in any other public or public listed company.
Currently, he is a member of the Audit Committee and
Chairman of Board Risk Committee of the Company. He does Datin Khoo has attended all fourteen (14) Board meetings
not hold any directorship in any other public or public listed held during the year ended 29 February 2020. She does not
company. hold any shares in the Company.
YBhg. Datuk Adinan has attended thirteen (13) Board

meetings held during the year ended 29 February 2020. He
does not hold any shares in the Company.
Annual Report 2020
BOARD OF DIRECTORS
DATIN YASMIN AHMAD MERICAN RASHIDAH BINTI ABU BAKAR

Independent Non-Executive Director Independent Non-Executive Director
(69, Malaysian, Female) (64, Malaysian, Female)
Datin Yasmin Ahmad Merican was appointed as the Rashidah binti Abu Bakar was appointed as an
Independent Non-Executive Director of AEON Credit on 23 Independent Non-Executive Director of AEON Credit on
January 2019. A business transformation practitioner, she 23 January 2019. She graduated from University Malaysia in
studied marketing and holds a MBA in Strategic Marketing 1979 with LLB (Hons). She commenced work in Bank Negara
(Distinction) from the University of Hull, UK. Malaysia (BNM) on 1 April 1979 at the Investment Department.
Rashidah was admitted as an Advocate and Solicitor of the
As a former partner of Ernst & Young in Malaysia and High Court in Malaya in September 1981 upon her completion
international partner with EY Global Client Consulting, she led of legal professional qualifications.
the development of knowledge and customer management
solutions for the global firm from the mid to the end of the She returned to BNM after being admitted to the Malaysian
1990s in the Asia Pacific Region. In 2000, she founded Trax Bar and continued her service at BNM. In 1993, she was
Associates, and since then has supported the enhancement of transferred to the Legal Department in BNM.
various organizational capabilities in marketing, product/service
development and reputation management at some of Malaysia’s Rashidah resigned from BNM in 1995 and joined private
largest institutions. In 2013, she authored and published “The legal practice. Her area of practice was in conveyancing. She
Right to Brand” a business book pioneering brand building attended to financing documentation based on conventional
methods for emerging market companies. as well as Shariah principles. She has gained experience in
syndicated loans, private debt securities, sukuk documentation
She is currently a director with AEON Fantasy Sdn. Bhd. and and highway financing.
HelloGold Sdn. Bhd., and Advisor to the AFS International/
Intercultural Programmes in Malaysia. She served on the board She has also been appointed as a President of the Consumer
of the Malaysian Productivity Corporation (MPC) and on the Tribunal constituted under the Ministry of Domestic Trade and
industry panel at the School of Information Technology, Monash Consumer Affairs with effect from 15 April 2018.
University (Malaysia) between 2008 and 2012. She is also the
President of the Malaysian AEON Foundation, the charity arm She is a member of the Board Risk Committee of the Company.
of the AEON group of companies in Malaysia. She does not hold any directorship in any other public or public
listed company.
She is a member of the Nominating and Remuneration
Committee of the Company. She does not hold any directorship Rashidah has attended all fourteen (14) Board meetings held
in any other public or public listed company. during the year ended 29 February 2020. She does not hold
any shares in the Company.
Datin Yasmin has attended all fourteen (14) Board meetings
held during the year ended 29 February 2020 and holds
20,000 of ordinary shares directly in the Company.
Annual Report 2020
MASAAKI MANGETSU
Non-Independent Non-Executive Director
(62, Japanese, Male)
Masaaki Mangetsu was appointed as a Non-Independent In June 2015, he was appointed as the Director and Head
Non-Executive Director of AEON Credit on 20 June 2019. He of Marketing Division of AEON Financial Service Co., Ltd.
obtained a Degree of Bachelor of Law from Keio University in In June 2016, Mangetsu was appointed as the Managing
Japan in 1981. Director in charge of Business Strategy and Head of Overseas
Business Division of AEON Financial Service Co., Ltd. and
He has over 30 years of working experience, mainly in later appointed as the Managing Director in charge of Global
marketing, business and sales. Mangetsu began his career in Business Strategy in April 2017.
AEON Co., Ltd. (then Jusco Co., Ltd.) in March 1981. He was
later appointed as the Head of Sales Planning Department of Masaaki Mangetsu was then appointed as the Director and
Tokai Business Division of AEON Co., Ltd. in September 1996. Chairman of AEON Credit Service (Asia) Co., Ltd. in June
In May 2007, Mangetsu became the Head of Sales Promotion 2017. He was later appointed as the Chairman of AEON Micro
Department of AEON Co., Ltd. and subsequently, the Head of Finance (Shenzhen) Co., Ltd. in May 2019, Director of AEON
Marketing Department in April 2008. He was then appointed Credit Service (Philippines) Inc. in June 2019 and Director,
as the Head of Nagano Business Department of AEON Retail Managing Executive Officer in charge of Overseas Business
Co., Ltd. in 2009 and the Head of Chiba Business Department Strategy and Innovation Planning of AEON Financial Service
AEON Retail Co., Ltd. in March 2010. In March 2012, he was Co., Ltd. in July 2019. He still holds the 4 positions above to
transferred to AEON (China) Co., Ltd. and held the position of date.
Head of Sales Support Division before being promoted as the
Chief Operating Officer of General Merchandise Store (GMS) He does not hold any directorship in any other public or public
Business in April 2013. listed company.
He began his career with AEON Credit Service Co., Ltd. in June Mangetsu has attended ten (10) Board meetings held during
2014 where he was appointed as the Director, Executive Officer the year ended 29 February 2020. He does not hold any
and Head of Marketing Division. In April 2015, Mangetsu was shares directly in the Company.
appointed as the Director of AEON Credit Service Co., Ltd.
Annual Report 2020
BOARD OF DIRECTORS
LEE TYAN JEN

Executive Director
(46, Malaysian, Female)
Lee Tyan Jen was appointed as an Executive Director of AEON

Credit on 1 July 2013. She obtained a Bachelor’s Degree in
Business Administration from University of South Alabama,
USA in 1996.
She joined AEON Credit in 1998 as an Officer in

the Credit Assessment Department. Subsequently,
she was promoted to various positions in the Credit Assessment
Department and was appointed as the Assistant General
Manager in 2006. In 2008, she was promoted as General
Manager and served as the Head of Credit Assessment Group
before assuming the position as Head of Business Operations
Division in April 2015. In April 2016, she has been designated
as the Chief Operating Officer of the Company and as Head of
Customer Service and Operations Division. Subsequently, her
portfolio was added with Head of IT Group in March 2017. She
was redesignated as Chief Information Officer and Head of IT
Division since April 2019.
She does not hold any directorship in any other public or

public listed company.
Lee has attended all fourteen (14) Board meetings held during
the year ended 29 February 2020. She holds 35,661 ordinary
shares directly and 72,500 ICULS in the Company.
Annual Report 2020
TOP MANAGEMENT
1 2 3 4 5
1 YURO KISAKA 3 LEE KIT SEONG Relevant Experience:

Managing Director Chief Financial Officer Has over 18 years of experience
(46, Japanese, Male) Finance Division & in Collection, Sales, Corporate
Corporate Governance Division
Strategy, Business Development
Date of Appointment: (51, Malaysian, Male)
20 June 2019 and digital strategy for AEON
Date of Appointment: Credit.
Academic/Professional Qualification: 18 April 2013
Bachelor’s Degree of Law Academic/Professional Qualification: 5 SHIRO ISHIDA
Directorship/Relevant Appointments: ACCA, MIA Chief Marketing Officer
Board Member Directorship/Relevant Appointments: Marketing & Customer
He does not hold any directorship Service Division
Relevant Experience: in any other public or public listed (48, Japanese, Male)
His profile is disclosed in the company.
Director’s Profiles on page 29 of Date of Appointment:
this Annual Report. Relevant Experience: 2 August 2018
Has more than 20 years of
experience in Finance and Academic/Professional Qualification:
2 LEE TYAN JEN Accounting and holds the position Associate of General Studies
Chief Information Officer of Chief Financial Officer of AEON Degree
(46, Malaysian, Female) Credit since 2013.
Directorship/Relevant Appointments:
Date of Appointment: 4 AJITH A/L JAYARAM
3 April 2019 He does not hold any directorship
Chief Business Officer
in any other public or public listed
Academic/Professional Qualification: Business Division
(40, Malaysian, Male) company.
Bachelor’s Degree in Business
Administration Date of Appointment: Relevant Experience:
1 July 2019 Has more than 20 years of
Directorship/Relevant Appointments: marketing experience throughout
Board Member Academic/Professional Qualification:
Master of Management Asia and South East Asia. Has
Relevant Experience: more than 2 years of experience
Directorship/Relevant Appointments: in leading the marketing, products
Her profile is disclosed in the He does not hold any directorship
Director’s Profiles on page 34 of in any other public or public listed and customers service as the Chief
this Annual Report. company. Marketing Officer at AEON Credit.
Note:
All Top Management personnel as disclosed above do not have any family relationship with any Director and/or major
shareholder of the Company, any conflict of interest with the Company, or any conviction for offences within the past 5 years,
except for traffic offences, if any.
Annual Report 2020
SENIOR MANAGEMENT
1 LEE TYAN JEN 2 LEE KIT SEONG 4 SHIRO ISHIDA
Head of IT Division Head of Finance and Corporate Head of Marketing and
(46, Malaysian, Female) Governance Division Customer Service Division
(51, Malaysian, Male) (48, Japanese, Male)
Date of Appointment:
1 March 2017 Date of Appointment: Date of Appointment:
17 July 2017 2 August 2018
Academic/Professional
Qualification: Academic/Professional Academic/Professional
Qualification:
Bachelor’s Degree in Business Qualification:
ACCA, MIA
Administration Associate of General
3 AJITH A/L JAYARAM Studies Degree
Head of Business Division
1 July 2019
Qualification:
Master of Management
1. LEE TYAN JEN 2. LEE KIT SEONG
3. AJITH A/L JAYARAM 4. SHIRO ISHIDA

Annual Report 2020
5 KIYOSHI WADA 6 TAN KEAN WOOI 8 KATSUSHI IWAMOTO

Head of Human Resource Head of Credit Operation Division Head of Management
Management Division (44, Malaysian, Male) Control Division
(60, Japanese, Male) Date of Appointment: (46, Japanese, Male)
Date of Appointment: 12 November 2018 Date of Appointment:
10 July 2017 Academic/Professional 3 September 2019
Academic/Professional Qualification:
Bachelor of Economics Academic/Professional
Qualification: Qualification:
Bachelor of Economics Bachelor of Business
7 CHEN HENG GUAN
Head of Corporate Strategy Division Administration
1 July 2019
Qualification:
Masters of Business Administration
5. KIYOSHI WADA 6. TAN KEAN WOOI
7. CHEN HENG GUAN 8. KATSUSHI IWAMOTO

CORPORATE BRANDING
05
40 Corporate Events
43 Corporate Social Responsibility Programmes
47 Awards, Accolades and Certifications
Annual Report 2020
CORPORATE EVENTS
Q4 FY2018 Results Announcement AEON-MDTCA Aidilfitri Shopping Session

26 April 2019 | Kuala Lumpur at AEON Mall Bukit Mertajam
16 May 2019 | Pulau Pinang
22nd Annual General Meeting at Intercontinental Hotel

20 June 2019 | Kuala Lumpur
AEON Credit Purple League Junior Signing Ceremony and The Grand Match – Thank You, Datuk Wira Lee Chong Wei
Press Conference at AEON BiG Mid Valley Megamall 28 December 2019 I Genting Highlands
03 September 2019 I Kuala Lumpur
Annual Report 2020
AEON WALLET ‘MALL WALKING – WALK FOR BETTER HEALTH’

AEON Credit launched the ‘Mall Walking – Walk for Better The AEON Wallet is the first mobile application system by
Health’ with the ‘AEON Wallet Scan and Earn’ campaign retailers in Malaysia and it was launched alongside the AEON
in AEON Mall Nilai, an event to reward its AEON Member Member Plus Visa Card in November 2018. It supplements
Plus Visa cardholders and AEON Wallet users. The event functionality of the AEON Member Plus Visa Card. The app is
was officiated by Yang Berhormat Tuan Veerapan A/L linked to an AEON Member Plus Visa Card and it allows for
Superamaniam, Negeri Sembilan State Executive Councillor payment via QR code at all AEON Retailers Outlets.
for Health, Environment, Cooperative and Consumerism.
The AEON Mall Walking ‘Scan and Earn’ game was opened
to AEON Member Plus Visa Card. To participate, cardholders
are required to spend a minimum purchase of RM50 in a
maximum of two combined receipts prior to the registration.
In addition to that, the AEON Wallet app is to be downloaded
and installed on their respective mobile phones.
To earn 4,000 AEON points, participants were required to

scan QR codes displayed on a total of 20 pit-stop poles located
on ground floor and second floor of AEON Mall Nilai, in the
correct sequence, within the stipulated time. Throughout the
campaign period from 23 March to 31 December 2019, a total
of 2,027 AEON Wallet users earned 719,600 AEON Points.
AEON CREDIT SUPPORTS SOCSO LABOUR DAY RUN AND RIDE 2019
As a financial institution that provides financing schemes Minister of Human Resources and Yang Berbahagia Dato’
for cyclists or bicycle enthusiasts and to promote a healthy Sri Dr. Mohammed Azman bin Dato’ Aziz Mohammed, Chief
lifestyle among Malaysians, we supported the Social Security Executive Officer of SOCSO. Activities included the setting
Organization (SOCSO) of Malaysia - Labour Day Run and up of promotional booth to promote attractive Objective
Ride 2019 as Platinum Sponsor. Financing Scheme for Bicycle and free snacks giveaway at
the end of the event. 40 AEON Credit volunteers were also
The event which was held at Dataran Putrajaya, Presint present to assist distributing breakfast packs and drinks to
3 witnessed a total of 9,000 participants taking part in participants. YBhg. Datuk Adinan bin Maning and Mr. Ajith
four (4) categories of activities, i.e. 20 km and 40 km for Jayaram, Chief Business Officer participated in the 20 km
cycling and 5 km and 10 km for fun run. Participants cycling category.
were flagged off by Yang Berhormat Tuan M. Kulasegaran,
Annual Report 2020
CORPORATE EVENTS
AEON CREDIT PURPLE LEAGUE JUNIOR SPONSORSHIP PROGRAMME
AEON Credit has been an active supporter of the junior participated in this tournament in five (5) categories namely
badminton scene in Malaysia since 2016 through the the boy’s single, boy’s double, girl’s single, girl’s double and
Ampang Jaya Badminton Club (AJBC). Under the ACS-AJBC mixed doubles.
Junior Development Programme, numerous young talented
badminton players were identified and are either currently The 2019 edition saw the registration of a total of 350 junior
playing for the national team or undergoing training with the players including 56 foreign entries from 22 teams for the
Malaysian Sports Schools. league.
To further lend its support in honing talents of future world

champions like Dato’ Lee Chong Wei, we entered into an
agreement as the title sponsor for Malaysia Purple League’s
Junior Purple League 2019-2021. Rising junior players
from community clubs nationwide and foreign countries
THE LAUNCH OF AEON CREDIT EMPLOYMENT PROGRAMME FOR AMPANG JAYA BADMINTON CLUB PLAYERS
In its bid to further contribute to the development of local and Employment Programme at the Connexion Conference
communities, AEON Credit has launched a programme to and Event Centre in Bangsar South, Kuala Lumpur on 22
help young badminton players gain exposure in the corporate November 2019.
world and explore the opportunity of having a dual career.
As a start, the Company will focus in providing soft skills
The Company in collaboration with AJBC, launched the training to the selected players in communication, personal
AEON Credit-AJBC Young Badminton Player Internship grooming and enhancing their professional etiquette.
Annual Report 2020
CORPORATE SOCIAL RESPONSIBILITY PROGRAMMES
AEON Credit supports local community growth as part of the Company’s Corporate Commitment in serving the needs
of the community through various corporate social responsibility initiatives. Volunteers of AEON Credit, under the
CSR Outreach Programmes, have been actively engaging with Governmental Agencies and the Local Community via
concerted efforts in creating programmes to benefit our stakeholders.
EDUCATION
AEON Credit collaborated with the Ministry Domestic of Trade and Consumer Affairs to organise the ‘Back to School Programme’
at AEON Mall Kuching Sentral, Sarawak. The programme saw a total of 150 school children from Sekolah Kebangsaan RPR
Batu Kawa, Kuching, Sarawak received RM150 shopping vouchers and a new school backpack. To date, 1,550 primary school
children have benefitted from the programme nationwide.
As part of the Company’s initiative to reduce fatalities and accidents during festive seasons, AEON Credit collaborated with
the Road Safety Department and motorcycle manufacturers to organise Road Safety Advocacy Programmes. The annual
programme held before Chinese New Year and Hari Raya Aidilfitri holidays saw a total of 900 kids helmets being distributed
to ensure the safety of young pillion riders. For FYE2020, AEON Credit organised the 1st Joint Ops Launching Ceremony at
AEON Mall Nilai alongside the Road Safety Department to heighten awareness among AEON shoppers on the importance of
creating safe journey back to their hometowns during the upcoming Hari Raya Aidilfitri.
COMMUNITY WELLBEING
To support local blood bank centers, AEON Credit organised
a total of 11 blood donation drives in collaboration with local
hospitals. The blood donation drives which were organised
by AEON Credit Regional Offices saw a total registration of
387 donors, contributing 279 pints of blood compared to
FYE2019 which registered only 206 donors with 183 pints of
blood collected from four (4) blood donation drives.
Annual Report 2020

Apart from that, a total of 44 activities were carried out
by 1,254 volunteers during the year, recording 6,270 of
volunteer hours under the AEON Credit Outreach Programme,
a volunteer programme initiated by employees of AEON
Credit and local stakeholders aimed at giving back to the
community. Comparatively, there was only 32 activities were
initiated in last year. Activities included contributions and
engagement sessions at old folks homes, orphanages and
children with learning disabilities. Gotong-royong sessions
with local communities to clean-up public areas were also
organised by the volunteers.
In addition to the volunteer activities that were carried out

regularly, AEON Credit is also sympathetic towards the
plight of those in need. FYE2020 saw two communities
affected by fires which razed their homes and belongings in
Kg. Baru Sibu, Sarawak (13 families) and Kg. Ayer Panas,
Kuala Lumpur (3 families) receiving monetary donations
and contributions consisting of basic essential items. These
efforts were aimed at helping to alleviate the burden faced by
the families affected.
ENVIRONMENTAL
A total of 11,050 trees were planted by AEON Credit volunteers alongside the AEON Group of Companies and its stakeholders
on 14 September 2019 through the second phase of the Bidor Reforestation Project as part of AEON CO. (M) BHD.’s initiative
to rehabilitate 35.3 ha of former tin tailing mine. The event saw 10,000 trees from 35 forest endangered species being planted
by 1,030 local and Japanese volunteers. AEON Credit mobilised a total of 110 volunteers for the event. In November 2019,
East Malaysia Regional Office volunteers planted 1,000 trees from local Sarawakian tree species at the Sabal Forest Reserve
in Simunjan, Sarawak. The event was initiated together with the Sarawak Forestry Department after 15 ha of the forest reserve
was destroyed by fire during the haze season in March 2019.
Annual Report 2020
Coastal clean-up programmes for FYE2020 saw a total of 5.16 tonnes of rubbish collected from five (5) coastal area in Pahang,
Johor, Pulau Pinang and Sabah compared to 3.48 tonnes of rubbish collected in FYE2019. Out of the 5.16 tonnes of rubbish
collected, 1.13 tonnes were recyclable wastes. It is hopeful that with the continuous effort by AEON Credit’s volunteers to
reduce plastic waste from the coastal area, a safer environment can be created for lives both on and under water.
SPORTS
AEON Credit continues to support AJBC Junior Development Programme for its third year. The Junior players finished as semi-
finalist during Astro Junior Badminton Championship and 4th placing for Division 1 during AEON Credit Purple League Junior
in October 2019. Two trainees under the Programme were also recruited into the Malaysian Junior Badminton team under
Malaysian Sports School in Bukit Jalil. During the year, the Company had also organized Coaching Clinics to primary schools in
Ampang which saw 2,310 primary students joined the clinics. ACS-AJBC Junior Badminton Championship which was held in
June and October 2019 received overwhelming response for its inaugural year where 199 girls and 839 boys participated in the
two-leg tournament.
Annual Report 2020

MALAYSIAN AEON FOUNDATION
Together with other AEON Group of Companies, AEON Credit further supported the Foundation’s efforts and initiatives in
helping the less-privileged communities through direct donations and festive shopping contributions. A total of 1,952 children
and single parents benefitted during the festive shopping sessions where they were treated to RM200 shopping vouchers each
in addition to receiving basic essential items and money packets. In March 2019, the Foundation donated disaster relief aid
to 250 Pasir Gudang residents who were affected by the Sg. Kim Kim ammonia pollution.
AEON Credit also supported the Foundation during its fund-raising activities such as the AEON Fun Run and Ride event in
June 2019, Malaysian AEON Foundation Charity Golf Tournament in October 2019 and Malam Mesra AEON by collaboratively
contributing a total of RM482,250 with our business partners.
Annual Report 2020
AWARDS, ACCOLADES & CERTIFICATIONS
“HIGHEST RETURN TO SHAREHOLDER

AFTER THREE YEARS”
The Edge Billion Ringgit Club Corporate Awards 2019
Under the Financial Services sector (Below RM10 billion
market capitalisation) category.
NAMED AS ONE OF 49 MALAYSIAN COMPANIES

Recognised as the “Best companies to work for in Asia”
by HR Asia Awards Malaysia 2019
HIGHEST CARD GROWTH

Consumer Credit for highest Year On Year growth for Credit
Cards acquisition (new issuance)
HIGHEST PAYMENT VOLUME GROWTH

Consumer Credit for highest Year On Year growth for Credit
Cards usage (CP sales volume) by the Visa Malaysia Bank
Awards 2018/2019
SUSTAINABILITY STATEMENT
06
50 Sustainability Statement
Annual Report 2020
AEON Credit is guided steadfastly in all aspects of its business operations by its Corporate Philosophy to support
customers’ lifestyle and enable each individual to maximise future opportunities through effective use of credit. This
serves as a beacon to further strengthen business sustainability by focusing primarily on economic, environmental
and social drivers.
Led by these key factors, the Company continues to uphold the principles of governance and transparency in its business
dealings, in line with stringent requirements of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements and the
Company’s Sustainability Reporting Framework.
This Statement is prepared in accordance with Global Reporting Initiative (“GRI”) Standards: Core Option, the global standards
for sustainability reporting. It highlights AEON Credit’s sustainability performance, reporting on activities organised over the
period from 1 March 2019 to 29 February 2020, charting its progressive development in the areas of governance, proactive
stakeholder engagement, awareness and management of material factors and outlines innovative approaches to enhance
customers’ experience. The GRI Content Index is available on the Company’s website at https://www.aeoncredit.com.my/
aeon-corporate/about-us under Corporate Governance.
Working on the premise of giving back to the community that the Company operates in, the Statement also shares the
Company’s environmental stewardship and community initiatives.
SUSTAINABILITY GOVERNANCE
Tone at the Top [GRI 102-20] now has an added role and accountability in reviewing
It is a well acknowledged fact that the work culture of sustainability related matters including reviewing the overall
employees within the organisation is formed by the behaviour sustainability plans, objectives and its performance.
of the leader. This ‘tone at the top’ largely epitomises how
AEON Credit governs and manages its business. The leaders Senior Management is responsible for driving the improvement
at AEON Credit, such as the Managing Director, Executive and execution of the Company’s overall sustainability
Director, Executive Officers and members of the Senior framework, strategy and roadmap. The leadership team
Management Team shoulder this important responsibility collectively plays an active role in ensuring that sustainability
and thus have an intrinsic responsibility to shape the is part of AEON Credit’s business approach and is embedded
environmental, social and governance (“ESG”) landscape at in the Company’s daily operations.
AEON Credit.
AEON Credit has enhanced the organisation structure to
ESG is essentially the three key factors needed in measuring embed sustainability firmly within the organisation with
the sustainability and societal impact in AEON Credit and the establishment of a Sustainability Working Committee
better determine its business sustainability. Hence, the role in FYE2020, comprising key management personnel from
these senior officials of the Company play are critical to various functions and product groups. The Committee was
AEON Credit’s overall business sustainability and wellbeing established to support sustainability strategy development
of its operations. and embed sustainability management practices, based
on understanding of potential sustainability impact from
Sustainability Governance and Working Committee operations as well as risk and opportunities across the
[GRI 102-32, 103-2, 103-3] Company.
The Board recognises the importance of pursuing a

The Sustainability Working Committee has adopted a
business sustainability agenda and sets the tone to promote
measured, systematic and phased approach towards
sustainability practices by balancing ESG aspects of the
meeting sustainability objectives, with a monthly meeting of
business in its decision-making. To further strengthen
the Committee being held to discuss plans, actions taken and
sustainability governance, the Board Risk Committee (“BRC”)
issues arising.
Annual Report 2020
• Oversee the integration of sustainability

into the Company’s strategy and operations
Board
of Directors
Board Risk Committee • Review risk, compliance & sustainability related matter,
including sustainability framework, material matters,
sustainability performance & reporting
Managing Director
• Managing material sustainability matter
• Implement measures and actions
Senior Management • Monitor and report key
performance indicators
Sustainability Working Committee

Business Unit Heads
STAKEHOLDER MANAGEMENT [GRI 102-21, 102-40, 102-42, 102-43, 102-44]

AEON Credit aspires to give back to the community in an effective and meaningful manner, thus requiring emphasis on
engagement with various stakeholders for exchange of viewpoints on a regular basis.
The Company was able to reach out to the stakeholders through various communication channels to gain valuable insights on
the requirements and perspective of the stakeholders on issues of concern, as set out in the table below:
Stakeholders Engagement Activities Issues of Interest
Customers • Face to face interactions • Customer service

• Call centre and complaints channel • Feedback on products and services
• Customer advocate
• Social media
• External dispute resolutions
Employees • Meetings • Culture, diversity and inclusion

• Training programmes • Health, safety and wellbeing
• Team meeting and exercises • Employee grievances
• Employee Hotline • Training & development
• Annual employee engagement survey
Government & • Briefings • Compliance

Regulators • Submission/ proposals • Innovation in financial services
• Commission and inquiries
• Financial institutions and associations
Shareholders & • Investor Relations • Business strategy

Investors • Annual General Meeting • Financial performance
• Quarterly reports, annual reports and media releases • ESG performance
• Survey
Annual Report 2020
Stakeholders Engagement Activities Issues of Interest
Media • Press release/ interview • Business Strategy

• Annual General Meetings • Financial Performance
• Corporate events • ESG Performance
• Digital and social channels • Conduct & Culture
Business Partners • Merchant service • Business opportunities

• Support channels • Business strategy
• Innovation programmes • Performance and compliance
• Business alliance events
Local Communities/ • Community activities • Charitable donations

NGO • Sponsorship of events • Volunteering
• Social welfare
Industry Association • Conferences • Market development and customer

Groups • Events segment issues
• Regulatory issues
• Risk management issues
MATERIAL SUSTAINABILITY MATTERS

[GRI 102-31, 102-47] To achieve this objective, a three-stage process was adopted:
Material Sustainability Matters is a key concept

related to sustainability strategies and reporting
under the GRI Standards adopted by AEON IDENTIFICATION
Credit.
Relevant material matters were identified and reviewed
by the Sustainability Working Committee, based on the
AEON Credit conducts an annual review of its output of their engagement with the stakeholders
Material Sustainability Matters, involving the
Senior Management and the Sustainability
Working Committee. The output of the review
provides clarity concerning matters deemed to
be material to the stakeholders. PRIORITISATION
Process was conducted based on the
The review exercise is a platform to identify importance to the Company and stakeholders
potential opportunities that could provide an
edge for improved company performance as
well as challenges and risks currently faced
or which may arise in the future, related
to sustainability issues. At the same time,
VALIDATION
the review also facilitates benchmarking of
sustainability initiatives of AEON Credit against Output of the review has been presented to the management,
its peers in the industry within and outside reviewed by the BRC and recommended to the Board
the country, and identification of areas for
investment in sustainability efforts by the
Company.
Annual Report 2020
Material Sustainability Matters: Economic Social Environmental
Level Matters
High 1. Excellent Customer Experience, Support & Access

2. Data Security, IT Infrastructure & Digital Transformation
3. Good Business & Financial Performance
4. Excellent Ethics, Governance, Risk & Compliance
5. Business Innovation
Medium 6. Financial Inclusion
7. Employee Recognition
8. Employee Engagement
Low 9. Community Investment & Development
10. Environmental Management
Mapping The Material Sustainability Matters to

* Note: A collection of 17 SDGs [also known as the Global
Sustainable Development Goals [GRI 103-1]
Goals] were set by the United Nations General Assembly
The table set out below maps the Material Sustainability
in 2015 for achievement by the year 2030, representing a
Matters related to relevant stakeholder group(s), against the
universal call for action to end poverty, protect the planet
relevant GRI Standard and the corresponding Sustainable
and ensure that all people enjoy peace and prosperity.
Development Goals* (SDGs).
Material Matters SDGs GRI Standards

Excellent Customer Experience, GRI 102: General Disclosures
1
Support and Access GRI 418: Customer Privacy
Data Security, IT Infrastructure
2 GRI 418: Customer Privacy
& Digital Transformation
Good Business and Financial GRI 102: General Disclosures
3
Performance GRI 201: Economic Performance
Excellent Ethics, Governance, GRI 103: Management Approach
4
Risk & Compliance GRI 201: Economic Performance
5 Business Innovation GRI 102: General Disclosures
GRI 102: General Disclosures

6 Financial Inclusion
GRI 201: Economic Performance
7 Employee Recognition GRI 401: Employment
GRI 401: Employment

8 Employee Engagement GRI 404: Training and Education
GRI 405: Diversity and Equal Opportunity
Community Investment & GRI 201: Economic Performance
9
Development GRI 413: Local Communities
GRI 102: General Disclosures
GRI 302: Energy
10 Environmental Management
GRI 305: Emissions
GRI 413: Local Communities
Annual Report 2020
information is provided to customers to ensure important
SUSTAINABILITY PILLARS
information and risk disclosures are highlighted. The
The AEON Credit sustainability
employees are equipped with sound knowledge on product
framework comprises 6 pillars:
features and ethically promote the products based on
customer needs.
1. Conduct and Trust
AEON Credit recognises certain customers may face financial

challenges or difficulties in making repayment after obtaining
2. Customer Experience
credit facilities from the Company due to unavoidable
circumstances. In this regard, the Company engages with
Digital Products and the affected customers to understand their situation, and
3. Service Transformation if appropriate, recommend certain “debt restructuring” or
“rescheduling” facilities offered by the Company to assist
Employee Recognition them, with lower monthly repayment obligations. Customers
4. and Engagement may also seek debt restructuring under the Credit Counselling
and Debt Management Agency (AKPK) scheme facilitated by
5. Environmental Stewardship the government.
AEON Code of Conduct (“CoC”) [GRI 102-17]

6. Contributing to Communities The AEON CoC serves to interpret AEON’s basic principles,
to communicate to employees what the Company believes
in and the responsibility to earn stakeholders’ confidence.
1. Conduct and Trust [GRI 102-17] AEON Credit’s corporate philosophy and approach to
business epitomises the CoC, in conducting operations with
AEON Credit places great importance in carrying on business
high integrity and fair dealings with all stakeholders.
in responsible manner, complying with applicable laws and
regulations and ensuring that staff at all ranks conduct
The induction training and orientation programme for new
themselves ethically.
staff includes the CoC as an important component, which
is thereafter reinforced through annual CoC refresher
Financial Inclusion and Responsible Financing Practices
training session aimed towards inculcating a strong sense of
AEON Credit remains committed towards providing suitable, belonging at AEON Credit.
affordable and quality financial services to targeted customer
segments, in line with the requirements of relevant regulatory Anti-Bribery Management System (“ABMS”)
bodies. The Company promotes inclusive finance where all
In FYE2020, the Company implemented an Anti-Bribery
segments of society have convenient access to suitable and
Management System compliant with the ISO 37001:2016
affordable financial services in contributing towards equitable
standard, to reinforce basic principles of AEON Credit
and sustainable growth. Such services provide opportunities
on integrity and create anti-bribery culture within the
for Malaysians, including from the lower income segment
organisation. The implementation also served to meet
(B40), to borrow for productive activities and enhance their
requirement for the Company to have adequate procedures
lifestyle.
pursuant to introduction of Section 17A of the Malaysian
Anti-Corruption Commission (MACC) Act 2019, which
Products and services offered are aligned with the corporate
introduced a statutory corporate liability offence. The law now
values and are offered in the market after appropriate
provides that a commercial organisation commits an offence
development, evaluation and approval processes in
if any person associated with the commercial organisation
compliance with regulatory requirements. Credit policies
commits a corrupt act in order to obtain or retain business or
based on regulatory guidelines and the Company’s risk
an advantage in the conduct of business for the commercial
appetite are in place to manage risk of default by customers
organisation.
on repayment commitments. Clear and concise product
Annual Report 2020
AEON Credit’s implementation of the ABMS motivates Training and awareness programmes are regularly conducted
employees to carry out their duties conscientiously and to drive employees’ understanding of the policies and
mitigates risk of corrupt activities or actions. A Corruption processes in place to manage the handling and storage of
Risk Assessment was conducted to identify risks and assess customer and business information at every stage of the
adequacy of controls in place, with the aim of strengthening information lifecycle, as well as process for reporting security
existing Company policies and procedures. The Anti-Bribery breaches.
Policy of AEON Credit has been approved by the Board and
subsequently communicated internally to all employees Business Continuity Management and Cyber Security
as well as externally to business associates and other To ensure the continuity of critical business functions
stakeholders through various communication channels, and essential services, AEON Credit has in place policies,
including the corporate website. processes and systems under the Business Continuity Plan
(BCP) and Disaster Recovery Plan (DRP) to respond to a
The adoption of anti-bribery culture in business operations range of unexpected disruptions.
and familiarisation with ABMS procedures as well as
whistleblowing channels was facilitated by various training A dedicated back-up site with required infrastructure and
sessions held for the Board, Senior Management and staff at services for back-up operations under the BCP has been
all levels within AEON Credit. The multifaceted training and established by the Company outside Klang Valley. Critical
awareness initiatives include classroom training, e-learning, back-up and recovery servers for IT systems are located
posters, bulletins, commitment to anti-bribery pledge away from the Head Office at a third party site with adequate
across the organisation and anti-bribery campaign to raise infrastructure and services.
awareness amongst the staff as well as relevant stakeholders.
During the recent COVID-19 pandemic, AEON Credit is able
During FYE2020, there was no reported case of corrupt act to expand BCP scenarios to enable staff in less critical and
by any employee of AEON Credit. Meanwhile, pursuant to oversight functions to work from home, with remote access
disclosure requirements under GRI Standards, AEON Credit to the Company’s IT systems and servers using VPN (virtual
confirms that no political contributions were made directly or private network) technology for secure access.
indirectly by the Company in FYE2020.
Meanwhile, with increase in usage of online and digital
Customer Data Protection platforms for service delivery and communications, AEON
The fundamental importance of integrity of systems and Credit recognises the need for an effective cyber security
processes along with confidentiality of information in framework and effective practices that are both technologically
business operations have always recognised by AEON innovative and resilient to cyber threats.
Credit. The Company’s commitment towards assurance of
quality in providing services to customers and ensuring the To evaluate the effectiveness of security measures and cyber
confidentiality, integrity and availability of critical information threat mitigation plans, the Company conducted a Cyber Crisis
has been incorporated in the Company’s Integrated Simulation Exercise to test readiness to respond to cyber-
Management Systems (“IMS”) Policy. attack scenarios that are most likely to impact the Company.
The Company has implemented adequate measures to
The Personal Data Protection Act 2010 (PDPA) and secrecy address evolving cyber security threats, towards ensuring
provisions under the Financial Services Act 2013 govern integrity and availability of services as well as customer
customer data management policies of AEON Credit. The and business data protection. The Company continues to
Company has obtained certification under the ISO/IEC enhance its information technology and resiliency capabilities
27001:2013 Information Security Management System by putting in place further cyber security controls.
standard, thus providing assurance to both internal and
external stakeholders on information security management
and risk mitigation on unauthorised disclosure, misuse or
loss of information.
Annual Report 2020
Compliance The Company provides various channels for customers to
The Board Risk Committee, comprised Independent reach out for enquiry or feedback via live chat online (OMNI
Directors, plays a key role in oversight of compliance and channel, utilising chatbot software application with account
risk management functions in AEON Credit. The Board has enquiry and account maintenance self-service functions),
website online feedback form, email and telephone calls.
established a Compliance Framework which governs the
Customers may also walk to any AEON Credit branch
processes that drive compliance across operations, including
nationwide if face-to-face communication is preferred in
compliance monitoring mechanisms embedded within the
certain situations.
business processes. Training and awareness activities were
conducted company-wide annually to reinforce accountability
With a robust complaint management process in place, all
and ownership of compliance processes across business
complaints received through the Company’s touch points
units.
and via regulatory bodies were resolved within the committed
TAT (Turn-Around-Time) in FYE2020.
The Corporate Governance Group worked in tandem with
business units in monitoring and managing compliance risks,
Customer Service Focus
as well as conducting periodic review of related policies and
Mandatory training on customer management and customer
internal controls.
service is provided by AEON Credit to all new recruits in
frontline roles who need to interact with customers and
Whistleblowing Channels [GRI 102-17]
business partners. In addition, the Company conducts other
In line with accepted norms of corporate safeguards against soft skills training regularly for both existing staff and new
wrongdoing or risky behaviour, AEON Credit has long hires.
instituted a whistleblowing channel under the Company’s
Code of Conduct, branded as the AEON Hotline. Using this Staff are constantly reminded to engage with customers in a
hotline, employees can draw attention to genuine concerns on conscientious and courteous manner when handling issues,
any illegal or unethical practice, financial fraud, irregularity or and to seek appropriate resolution in the shortest possible
breach of regulations; anonymously or otherwise and without time. The customer service programmes and initiatives
fear of reprisals. carried out in FYE2020 towards promoting excellent customer
service included the following :
In case any business partner, customer, other stakeholder
or member of the public has knowledge of any irregularity
or improper conduct, reporting via email can be made to the Service Excellence Awards Programmes (WoW Compliment)
Senior Independent Director at [email protected]. FYE2019 FYE2020
Thereafter, investigation shall be carried out in confidential
manner and further action taken, where necessary.
62 81 265
2. Customer Experience
12 Silver 163 15 Silver
Bronze
Gold Bronze Gold
Customer experience is essentially a customer’s holistic Total of 237 achievers Total of 361 achievers
perception of personal experience using a product or service.
It encompasses every process, every interaction with AEON
Credit, from navigating the website and applying for a product
to engaging with customer service personnel and performing
transactions.
Service Convenience and Customer Feedback

[GRI 417-1]
AEON Credit places strong emphasis on a two-way
relationship with customers and values customer feedback
in relation to products offered and services rendered. Such
feedback is valuable towards further improvement in service
quality and enhancement of customer satisfaction.
Annual Report 2020
Product Innovation
Some other engaging programmes initiated were Mystery
Further to launching of the AEON Wallet digital platform
Calling and OMNI Channel, with the aim to motivate customer
by AEON Credit in November 2018, the major focus of the
service personnel as well as to promote excellent customer
Company in FYE2020 was on the growth of customer base
service spirit.
downloading the application and storing the AEON Member
Plus Visa Card as well as other credit card and prepaid cards
Mystery Calling and OMNI Channel
issued by AEON Credit on mobile devices.
AEON Credit recorded tremendous increase in retail

transactions made using QR code as mobile payment
method in FYE2020, arising from both increase in users of
Motivate customer Promote excellent
AEON Wallet as well as increase in AEON payment cards
service personnel customer service spirit
in circulation. Such increase in digital payments using
mobile devices has contributed to corresponding increase
in “cashless payments” at retailers, including within AEON
Staff are constantly reminded to engage with customers in a Group.
conscientious and courteous manner when handling issues
and to seek appropriate resolutions in the shortest possible Since the AEON Member Plus Visa Card also functions as a
time. Another programme is ‘The Voice of Customers’, an membership loyalty card, cardholders enjoy the convenience
innovative means to address customers’ issues with the of having reward point, card transaction and member
view of identifying the root cause of issues and engaging in privileges’ information being consolidated in a single user
a brainstorming session to then arrive at an effective solution. friendly application on their mobile devices. With this mobile
Through this route, all cases were successfully resolved. app, the Company and AEON Group retailers are also able
to reach out to customers via a push notification to inform of
upcoming promotions, thus cutting costs on SMS messages.
The Voice All cases were Further, the AEON Wallet has made it unnecessary for
of Customers successfully customers to carry physical payment cards, thus also
Programme resolved. mitigating associated security risks.
AEON Credit is committed to maintaining high standards

of customer service aligned with ISO 9001:2015 Quality
Management System standard certification obtained by
the Company, governing assurance on product and service
quality, as well as continual improvement under the IMS
Policy.
3. Digital Product & Service Transformation
Over the past decade, the combination of technological

innovations and shift in consumer preferences has had
a transformative impact on industries globally, with
financial services industry being radically impacted. Digital
transformation in numerous areas have helped AEON Credit
improve customer experience and service level to business Mall Walking with AEON Wallet was an activity conducted
partners such as merchants in many ways, including greater jointly with AEON CO. (M) BHD. from 23 March to 31
convenience and simplicity of processes as well as attracting December 2019 to encourage shoppers to be more health
new customers. conscious through this digital platform.
Annual Report 2020
branch to apply for products and services. The Company
shall introduce e-KYC (electronic Know-Your-Customer)
process to obtain customer’s personal data online and
perform identity verification digitally. This would improve
operational efficiency and enhance customer experience for
service delivery in seamless manner at customer’s location.
4. Employee Recognition and Engagement

AEON Basic Principles on Personnel respects the rights of
the employees and requires enabling them to achieve their
full potential. The human resource policies and practices
AEON Wallet app also proved to be a useful tool for electronic at AEON Credit have always been guided by the notion that
registration of participants in the AEON Charity Run & Ride recognising and rewarding the work that employees do is
on 16 June 2019. essential to motivating passion, focus and commitment of
employees towards achievement of corporate objectives.
Another innovative initiative with the AEON Wallet app was
the e-Stamps Programme from 1 July to 17 November 2019, Workforce Diversity [GRI 102-8, 405-1]
implemented for AEON CO. (M) BHD. to encourage usage AEON Credit’s approach towards diversity is anchored on
of digital stamps for customer reward programme based on due regard, fairness and inclusion. In line with the AEON
retail spending, replacing the paper stamps used previously. CoC, the Company respects the rights of every individual
and fosters diversity and inclusivity towards aim of building a
Back Office Transformation harmonious, dynamic and strong workforce.
Within the Company’s back office operations, implementation
of Robotic Process Automation (“RPA”) remained as a key The Company recognises that diversified talent is necessary
focus for innovation and productivity improvement. RPA to innovate and compete in a rapidly changing business
is essentially software that emulates human execution landscape. By promoting inclusivity and equality in the
of repetitive work, built on technologies designed to workplace, employees will be happier and more comfortable
orchestrate, execute and enhance business workflows, set in their work environment. Thus, creating a diverse work
in motion through Graphical User Interface (GUI). Such RPA force can contribute to increased retention, motivation and
implementation for automation of certain processes in the productivity as well as contribute to responsiveness of AEON
finance function, implemented in October 2019, has enabled Credit to an increasingly diverse world of customers and
the Company to reassign allocated staff to more challenging expand the creativity of the organisation overall.
and demanding roles.
The Company’s total staff strength as at February 2020
Meanwhile, in relation to process of acquiring new of 3,632 employees comprised 2,350 female employees
customers, AEON Credit has started the development of (65%) and 1,282 male employees (35%). With 53% female
digital onboarding process, i.e. online process to reduce or representation at management level, AEON Credit recognises
eliminate the need for customers to go to the Company’s importance of women in leadership positions, effectively
Gender Diversity
64% 36% Directors
47% 53% Management
35% 65% Employees

Annual Report 2020
supporting decision-making and business performance of Financial Service Co. Ltd., Japan (AFSJ) and in AEON Global
the Company. Meanwhile, breakdown of employees by age internship programme of AFSJ for upgrading of skills. The
band is set out below: average training and development hours clocked in FYE2020
by staff at various levels in the Company are set out as below:
Detailed demographics breakdown by age
Average training hours per employee by gender
7.24%
43.04% 49.72% 15.2 HOURS

13.3
HOURS
Average training hours by employee category

Age group:
Under 30 years old: 1,779
Below Top
30 - 50 years old: 1,819 Executive 10 10
HOURS HOURS
Management
Over 50 years old: 34
Total 3,632
8
HOURS
Talent Development and Retention 20
HOURS Middle
[GRI 401-2, 404-1, 404-2] Executive Management
The financial services sector is highly competitive and
continues to evolve at a fast pace, thus making talent Remuneration and Employee Benefits [GRI 401-2]
development and retention a key business priority of AEON AEON Credit is committed to offering competitive remuneration
Credit. and benefits scheme to its employees, benchmarked
periodically against market salary levels and employment
In line with the Company’s aspiration to build and maintain a benefits, for both financial services and non-financial service
dynamic workforce, staff training and development plans are industry sectors. The Company’s remuneration and benefits’
reviewed periodically and executed across business units, policies and practices have enabled recruitment of required
aligned to operational requirements, succession planning talent for operations and business expansion while maintaining
requirements and employee career growth plans. staff turnover rate at relatively low levels. Processes are in
place for annual review of salaries and allowances.
In FYE2020, the Company had invested RM1.9 million for
external training and development initiatives, in addition to Employment benefits provided by the Company to employees
utilisation of internal resources for numerous in-house training adhere to laws governing Human Resource. In addition to
programmes conducted. The training programmes covered medical, optical and dental benefits, the Company also
a broad spectrum of areas, including technical knowledge, provides Group Term Life and Group Hospitalisation &
job-specific training and soft skills training covering subjects Surgical insurance cover to employees as additional benefits,
such as customer service training, problem solving training covering permanent disability or death as well as numerous
and leadership training. types of illnesses. Based on employee’s length of service,
AEON Credit also provides contribution to Employees’
Selected employees were given the opportunity to participate Provident Fund (EPF) exceeding the statutory contribution
in management training programmes conducted by AEON rate, with aim of increasing retirement savings of employees.
Annual Report 2020
The Company also provides options on flexible working Employee Safety and Wellbeing [GRI 403]
hours to assist employees to balance their work, family and AEON Credit recognises the strategic importance of
personal obligations. maintaining safety at workplace and having a healthy
workforce, in terms of increased efficiency in operations,
Improving Employee Engagement reduced medical and insurance costs and improved
Recognising the importance of communications at the reputation as an employer of choice.
workplace, AEON Credit has established numerous two-way
communication channels for employees to create a positive To achieve the objective, the Company organised numerous
work environment and improve employee engagement. activities such as weekly badminton sessions and yoga
These include various periodic and ad-hoc meetings classes, and ad-hoc updates on health awareness issues
between management and staff, the Human Resource (HR) were communicated to all staff. The activities also served to
Help Desk, monthly morning assemblies and daily morning promote a heightened sense of camaraderie and team spirit
briefings. across the various departments.
AEON Credit has in place a structured performance evaluation The Company’s Occupational Safety and Health (OSH)
system incorporating target setting and performance Policy reaffirms commitment of AEON Credit to provide a
assessment on annual basis with involvement of both the safe and conducive working environment for all employees
employee and his/her superiors, with processes in place and safeguard customers and visitors from potential hazards
for face-to-face interaction, feedback, performance review caused by the Company’s business activities. The OSH
and career development review. Employees are also able to working committee and assigned employees regular conduct
provide feedback to the Company on areas of concern at the safety inspections at various offices and branches of AEON
workplace through participation in an annual climate survey Credit nationwide for the said purpose.
to identify needs of staff, grievances, if any, and areas where
improvement is required. In FYE2020, a number of health and workplace safety
awareness programmes were conducted:
Based on the interaction and feedback obtained, AEON
Credit obtains a clearer view on the needs and expectations 1. Office and Fire Safety Awareness
of employees, thus facilitating appropriate action, support or 2. Workplace Health and Safety Awareness
guidance when required. This would drive improvement in 3. Emergency Response Team (ERT) Emergency Response
employee engagement in terms or level of enthusiasm and and Preparedness
dedication to assigned role for mutual benefit of the employee 4. Essential First Aid Training
and the Company. 5. Fire Marshal Refresher Course
6. Emergency Response Guideline Briefing
Employee recognition for exemplary performance and 7. Safety Briefing for CSR Programmes
contributions is important in order for any organisation to
succeed. AEON Credit recognises service excellence and These training and awareness programmes serve to remind
employee loyalty annually through various awards such as employees of their shared responsibility to be constantly alert
Excellent Service Awards, Meritorious Service Awards and of workplace surroundings and to report any safety and health
Long Service Awards. issues under the OSH Policy to the Company. No work safety
related incidents were recorded by AEON Credit in FYE2020.
For the second time, AEON Credit was among 50 employers
named “The Best Companies to work for in Asia” for year 2019 Apart from the above, the Company has put in place the
by HR Asia, a reputable publication for HR professionals. The Pandemic Preparedness Plan to manage and mitigate the
award serves as a further recognition of conducive working impact of any pandemic outbreak. Measures for protecting
environment, staff welfare and human resource development employees from exposure to, and infection with, COVID-19
opportunities provided by the Company to employees. has been implemented by the Company from the early stages
of the outbreak in 2020.
Annual Report 2020
5. Environmental Stewardship In the coastal clean-up exercises, a total of 5.16 tonnes of waste consisting
of 1.13 tonnes of recyclable waste and 4.03 tonnes of other waste were
Global warming has been recognised as the collected with the participation of 500 employees who volunteered together
greatest threat to human health in history. with others from local authorities, local communities and AEON business
Thus, it is imperative that businesses of all sizes partners.
take effective action to reduce their “carbon
footprint”, representing the total amount of
greenhouse gases produced directly and TOTAL WASTE COLLECTED
indirectly from business operations, for both
humanitarian and business reasons. Non-Recyclable
Recyclable Waste Waste
Environmental Conservation Programmes Pantai Sepat,
532.0kg (0.53t) 1,286.0kg (1.29t)
Under the Company’s environmental Pahang
conservation efforts, AEON Credit reached out 408.9kg (0.41t) Pantai Batu Layar, 1,635.8kg (1.64t)
to the local communities via joint activities such Johor
as the AEON Group tree planting programmes 150.3kg (0.15t) Pantai Bagan Ajam, 807.6kg (0.81t)
and coastal clean-up activities. In September Penang
2019, a total of 10,000 trees from 35 forest 18kg (0.02t) Teluk Likas, 173kg (0.17t)
endangered species were planted by 1,030 local Sabah
and Japanese volunteers at Forest Research 25kg (0.03t) Pantai Pasir Putih, 125kg (0.13t)
Institute of Malaysia’s (FRIM) Bidor Research Sabah
Station, under Bidor Reforestation Project 1,134.2kg (1.13t) 4,027.4kg (4.03t)
to rehabilitate the former tin-tailing site. The
project was organised in collaboration with the
GRAND TOTAL
AEON Group of Companies, including the AEON
Environmental Foundation, with the support of 5161.6kg (5.16t) 22% is recyclable waste
FRIM. In November 2019, 250 volunteers from
AEON Group’s East Malaysia Regional Office
Such partnership activities with local communities reinforces the
planted 1,000 trees at Sabal Forest Reserve,
Company’s commitment as a good corporate citizen to nurture collaborative
Sarawak together with Sarawak Forestry
relationships, harnessing synergies toward common environmental
Department while a further 32 volunteers
conservation goals.
planted 50 mangrove saplings at Kota Kinabalu
Wetland Centre in collaboration with Sabah
Environmental Management System (“EMS”)
Wetlands Conservation Society.
[GRI 302]
AEON Credit has obtained certification under
FRIM Bidor Research Station, Perak 10,000 Trees the Environmental Management System
(ISO 14001) standard, covering the Company’s
Sabal Forest Reserve, Sarawak 1,000 Trees
processes and practices aimed at reducing
Kota Kinabalu Wetlands Park, Sabah 50 Trees environmental impact from operations. The
TOTAL
EMS certification also governs areas such as
Tree Planting 11,050 Trees the Company’s waste management practices for
collecting, recycling and disposal of waste.
Annual Report 2020
Under the Environmental Quality Act 1974, two categories influenced, given that the workplace is a microcosm of the
of scheduled wastes applicable to the Company have been communities in which the Company operates. This campaign
identified, namely waste containing mercury (e.g. fluorescent was also aligned with the nation’s ongoing efforts to eliminate
tube) (SW109) and e-waste containing specified components the use of SUP by 2030.
(SW110), and such waste are periodically disposed of
appropriately by licensed vendors with notification submitted AEON Credit’s Quality Management Department (QMD)
to the Department of Environment. conducted the “Say No to Plastic” Pledge activity in August
2019 with 2,108 staff, representing 59% of the Company’s
Responsible Consumption [GRI 301-1] total workforce, making a personal pledge in support of the
Despite progress in technological developments, the environment. The Company anticipates that their personal
Company’s transition toward a “paperless” office has been commitment would have an influence on their respective
constrained in some areas due to business environment as families and immediate circle of friends.
well as force of habit. Nonetheless, AEON Credit remains
committed on pledge to minimise paper consumption and The “Say No to Plastic” campaign was further reinforced by
work towards a paperless office. the absence of plastic straws and other SUP products during
one of the Company’s major teambuilding events in FYE2020.
The digital transformation of the Company, through utilisation The Company further reinforced the commitment of employees
of online channels for service delivery and automated by requesting participants to bring their own recyclable food
operations, as well as prudent usage of paper resulted in a containers, with food supplied by mobile food trucks.
significant reduction in paper usage in FYE2020 by 44%.
Meanwhile, electricity consumption in the same period was Environmental Survey
reduced by 17%. An online survey was conducted for AEON Credit staff on the
current environmental situation, and a large majority of the
PAPER CONSUMPTION staff (63%) displayed strong awareness on the Company’s
initiative on Sustainable Development Goal (SDG) related to
the environment. Overall, this survey on the state of the global
2019 2019
environment proved encouraging with valuable feedback
13% 7% obtained from participating staff. An intrinsic success was
2020 2020 that in response to the trigger survey questions, majority
44% 17% of the staff (58%) agreed to adopt a more environmentally
conscious lifestyle in contributing towards improving society’s
environmental footprint.
ELECTRICITY CONSUMPTION
Contributing to Communities [GRI 413-1]
Environmental Awareness Campaign – ‘Say No to Plastic’ In the 24 years of operations in the country, AEON Credit
AEON Credit organised an environmental awareness has been steadfastly working to establish and nurture a close
campaigns themed ‘Say No to Plastic’ in FYE2020 with the partnership with the community. The Company takes great
intent of educating its employees on the adverse impact of pride in giving back to the local community, by driving innovative
plastic pollution on the environment. To ensure a broader and engaging corporate social responsibility (CSR) initiatives.
reach, the campaign employed various innovative means CSR is defined as management concept to integrate social and
such as monthly bulletins, talks on “How to live plastic environmental concerns in business operations and interactions
free”, staff pledges, quizzes and an environmental poster with stakeholders.
competition to raise awareness of pollution and to encourage
the adoption of 5R practices (refuse, reduce, reuse, repurpose At AEON Credit, such concept is embodied in AEON’s
and recycle), targeting in particular the refusal of single-use Basic Principle to set an example as a good corporate
plastic (“SUP”). AEON Credit firmly believes that with a citizen, responding to the needs of the local community and
more environmentally conscious workforce, the mindset of working together with the community for its growth and the
the community on plastic consumption could be positively improvement of quality of life. To achieve this end, the Company
Annual Report 2020
has streamlined its CSR initiatives into four key focus areas of Specific initiatives of the Company under each focus area to
Education, Community Wellbeing, Environment and Sports. The meet the needs of the community are outlined in the table
Company believes that it is able to make meaningful contribution below:
to the lives of the community in these four areas, spanning wide
age groups as well as addressing environmental concerns.
• MAF Fundraising Events

• Tertiary Education
• MAF Charity Shopping
Sponsorships
Events
• Young Financial Savvy
• MAF Orang Asli Projects
Programmes N • Donations during
IO
• MAF Basic Education
CO Disaster
AT
Support Project
MM • Blood Donation Drives
UC
UN • Road-Safety Advocacy
ED
ITY Programmes
W • Outreach Programme
EL to Charity Homes and
LB
EIN Charity Organisations
G • B40 Enrichment
Initiatives
SP CSR
OR
TS Main Focus
• Tree Planting Activities
Area
T
EN
• Coastal Clean-Up
NM
• Ampang Jaya Badminton Projects

Club Sponsorship • Community No-Plastic
RO
Programme Awareness Campaign

VI
EN
• Ampang Jaya Badminton • Responsible Operation

Club Junior Development Consumption
Programme
FYE2020 CSR Activity Summary [GRI 102-12, 413-1] Beneficiaries

In FYE2020, AEON Credit organised a wide range of CSR On the premise that children are the nation’s future leaders,
initiatives, investing approximately RM1.47 million, with AEON Credit had organised various CSR initiatives for
participation of 1,254 employees from all levels of the children from selected homes under its own AEON Credit
organisation. The employees recorded a total of 6,270 hours Outreach Programme as well as under Malaysian AEON
on the initiatives, i.e. spending an average of 5 hours per Foundation’s (MAF) ‘Mesra Festive’ Programmes, involving
person. staff from AEON Group of Companies.
Sports
50.9%
Community
9.2%
3,615
Education Environment Children Community
33.4% 6.5%
3,155 460
Total: RM1,466,000
Annual Report 2020
CSR outcomes
Total Donors
Whilst it is the aim of AEON Credit to maintain its position
as a leading non-bank financial service company through
387
Donors
increased revenue and profit year on year, the Company
Pints
remains committed to sustainable development goals through Hospitals
various CSR projects and activities. Hospital Tengku Ampuan Afzan, Pahang 120 106
Hospital Sultan Ismail, Johor 94 76
The total CSR activity as of 29 February 2020
Hospital Seberang Jaya, Penang 60 36
is as below:
Borneo Medical Center, Sarawak 54 34
Hospital Besar, Penang 47 27
2019
2020
CSR CSR Hospital Raja Permaisuri Bainun, Perak 6 5
39 68 Hospital Sultanah Bahiyah, Kedah 6 5

MAF MAF
Total Pints
7 10
289
46 78 University Students’ Sponsorship
With education being the cornerstone of a nation’s wellbeing,
AEON Credit offered education sponsorships for tertiary
Donation and Contribution
studies at local universities to eligible but financially
Staff at AEON Credit are encouraged to participate in challenged candidates. In FYE2020, the Company sponsored
community outreach programmes with the aim to nurture 37 students for total amount of RM354,200 at selected
considerate and compassionate individuals, in reaching out universities, including Universiti Sains Malaysia (USM),
to the underprivileged and needy. With this noble aim, the University Putra Malaysia (UPM) and Universiti Malaya
Company contributed more than RM133,000 in FYE2020, (UM). Students awarded these sponsorships were from a
including sum of RM102,250 chanelled to the MAF, the wide range of disciplines namely Accounting, Economics,
AEON Group of Companies’ charity arm, to carry out its Computer Science, Business Administration, Management
activities and initiatives throughout FYE2020. A further sum and Law. Since inception of the sponsorship programme,
of RM31,680 was donated during the year to victims affected a total of RM694,600 has been invested in educational
by disasters and calamities in Sibu, Sarawak and Setapak, sponsorships.
Kuala Lumpur.
Back to School Programme

Blood Donation Campaigns
In the same year, the Company sponsored a ‘Back to School’
With blood acknowledged as a most precious gift to human
programme, an initiative designed to provide underprivileged
life, AEON Credit teamed up with local hospitals and non-
young children financial support to prepare for the new
governmental organisations (NGOs) to organise blood
school term in 2020. In this effort, the Company partnered
donation campaigns hosted at the Company’s Regional
with the Ministry of Domestic Trade and Consumer Affairs
Offices, with a total of 387 staff coming forward to donate a
(MDTCA) to support 150 students from Sekolah Kebangsaan
total of 289 pints of blood nationwide in FYE2020.
RPR Batu Kawa, Sarawak and contributed school bags, attire
and stationeries worth a total of RM49,000.
Annual Report 2020
Road Safety Advocacy Programmes

With traffic accidents seen peaking during major festive seasons, AEON Credit tied up with motorcycle manufacturers/
distributors and government agencies to hold road safety campaigns to advocate safe travel. The Company spent RM86,680
for this event in FYE2020 through contribution of kids’ helmets and advocacy programmes at AEON Malls before the Hari
Raya Aidilfitri ‘Balik Kampung’ rush.
Education Sponsorship
72.3%
Road Safety Advocacy Programme Total Amount
17.7% RM490,000
Back to School Programme
10.0%
Ampang Jaya Badminton Club Junior Badminton AEON Credit Purple League Junior 2019-2022
Development Programme Sponsorship Programme
AEON Credit is a firm advocate of adoption an active and To further promote young, talented badminton players
healthy lifestyle by Malaysians, as manifested by the in Malaysia to compete, the Company invested RM1.56
Company’s sponsorship of the Ampang Jaya Badminton Club million as the title sponsor for AEON Credit Purple League
Junior Badminton Development Programme with investment Junior for 2019 to 2022. This league provides an avenue
amount of RM224,530 in FYE2020. To-date, a total of for young, talented players with keen interest to pursue the
RM850,000 has been invested to support young, talented sport professionally as well as to help identify potential local
badminton players in their journey to be professionals in the talents. For the 2019 edition, a total of 350 junior players
future. The Junior Team finished as semi-finalist during Astro participated in the league, including 56 foreign entries from
Junior Badminton Championship and achieved 4th placing 22 teams.
for Division 1 during AEON Credit Purple League Junior in
October 2019.
AEON Credit Purple League

Junior Sponsorship Programme
69.7%
Ampang Jaya Badminton
Club Junior Badminton
Development Programme
30.0%
AEON Credit Badminton Club
0.3%
Total Amount RM746,000
CORPORATE GOVERNANCE
07
68 Corporate Governance Overview Statement
80 Audit Commitee Report
84 Board Risk Committee Report
87 Statement On Risk Management And Internal Control
92 Directors’ Responsibility Statement
93 Additional Compliance Information Disclosures
Annual Report 2020
CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (“The Board”) of AEON Credit is committed towards ensuring the high standards of corporate
governance structure embodied in the Malaysian Code of Corporate Governance 2017 (“MCCG”) is being maintained by
the Company in managing its business affairs to meet the expectations of various stakeholders. The Board has a sound
and effective governance framework in place in compliance with the Main Market Listing Requirements (“MMLR”) of Bursa
Malaysia Securities Berhad (“Bursa Securities”) and is guided by the practices and recommendations set out in MCCG.
This Corporate Governance Overview Statement (“CG Overview Statement”) provides shareholders and other stakeholders
with an overview of how the Company has applied the three (3) key Principles of the MCCG during the financial year ended
29 February 2020 (“FYE2020”):
i. Board leadership and effectiveness;
ii. Effective audit and risk management; and
iii. Integrity in corporate reporting and meaningful relationship with stakeholders.
This overview statement is to be read together with the Corporate Governance Report 2020 (“CG Report”) of the Company
on the detailed explanations and information relating to the application of prescribed corporate governance best practices,
which is available on the Company’s website at https://www.aeoncredit.com.my/aeon-corporate/about-us under Corporate
Governance.
The Board recognises that high corporate governance standards are essential to retain the trust and confidence of all
stakeholders including the public in the Company. Such trust and market confidence in the AEON Credit brand are vital for
the continuous growth and success of the Company.
The Board’s key focus areas in relation to corporate governance for the FYE2020 comprised:
• establishing anti-bribery policy and procedures as well as creating organisation wide anti-bribery culture and awareness
among staff and relevant stakeholders such as merchants, vendors and business partners; and
• enhancing oversight on risk management of the Company through the Board Risk Committee, which was established
in January 2019.
The Company advocates zero tolerance towards corruption. The Company has in place an anti-bribery policy which sets
out the Company’s policies to mitigate risk of acts of bribery and/or corruption in line with the new Section 17A of the
Malaysia Anti-Corruption Commission Act 2009. The policy applies to all directors, employees and external stakeholders when
dealing with the Company, in order to ensure and uphold the Company’s zero tolerance policy on bribery and corruption.
The Company has obtained ISO 37001:2013 Anti-Bribery Management Systems certification from SIRIM QAS International
Sdn. Bhd in the FYE2020.
Annual Report 2020
PRINCIPLE A
BOARD LEADERSHIP AND EFFECTIVENESS
Board Responsibilities and Demarcation of Authority
The Board is responsible for the stewardship of the business and affairs of the Company on behalf of the shareholders
with a view of enhancing the long-term value of their investment. The Company is led by an effective and experienced Board
with members from diverse backgrounds and specialisation. The overall principal roles and responsibilities of the Board are
as follows:
i. Develop, review and revise the Company’s long-term strategic plans;
ii. Provide clear objectives and policies to Senior Management for operations;
iii. Oversee the conduct and proper management of the Company’s businesses;
iv. Review and approve the Company’s annual budget and business plan;
v. Ensure establishment of appropriate risk management framework and risk strategy as well as adequate management
information and internal control system of the Company;
vi. Ensure compliance by the Company with relevant laws and regulations; and
vii. Approve transactions and activities outside the discretionary powers of Senior Management, subject to shareholders’
approval where necessary.
The Board has established a Board Charter which sets out, amongst others, the principal role of the Board and the
demarcation of the roles, responsibilities and powers of the Board, various Board Committees and Senior Management of
the Company. In addition, the Board Charter also serves as a general statement of intent on how the Board discharges its
duties and responsibilities. The Board Charter is accessible on the Company’s website at https://www.aeoncredit.com.my/
aeon-corporate/about-us/board-charter for reference of shareholders and other stakeholders.
The Board reserves certain powers for itself and delegates other matters to the Executive Directors, Executive Officers and
Senior Management. The schedule of matters reserved for the Board’s decision includes key strategic, financial, operational,
compliance and governance issues as well as acquisition/disposal of assets and investments exceeding threshold under
management approval, subject to regulatory requirements. The Management provides the Board and the Board Committees
with sufficient information and materials in a timely manner to enable the Directors to discharge their duties and responsibilities
effectively.
The responsibilities between the Chairman and the Managing Director (“MD”) as the Chief Executive Officer are clearly
separated for accountability, with no one individual having unfettered powers over decision making. The Chairman is
responsible for the operation and leadership of the Board to ensure the adequacy and effectiveness of the Board’s governance
processes. The Chairman acts as a facilitator at Board meetings to ensure that contributions by Directors are forthcoming on
matters being deliberated and that no Board member dominates discussion. The MD implements the Company’s strategic
plans, policies and decisions adopted by the Board. The MD is responsible for leading and managing the overall operations
and business development of the Company, with the support of the Executive Management team within a set of authorities
delegated by the Board.
Annual Report 2020

The Executive Management team, led by the MD and assisted by the Senior Management team (Executive Director and
Executive Officers), is responsible for the day-to-day management of the Company and is accountable to the Board.
Various powers are further delegated to the Management team of the Company based on the Company’s Authority Matrix,
which is also subject to periodic review based on changes in the organisation structure and business requirements for
efficient and effective decision making.
The Board is assisted by its Committees, which have been established under defined Terms of Reference, in accordance
with the MMLR and best practices prescribed by the MCCG to assist the Board in discharging its responsibilities.
The Committees are the Audit Committee (“AC”), Nominating Committee (“NC”), Remuneration Committee (“RC”) and
Board Risk Committee (“BRC”).
The following diagram provides a brief overview of the four Board Committees of the Company:
Board of Directors
Nominating Remuneration Audit Board Risk

Committee Committee Committee Committee
Responsibilities Responsibilities Responsibilities Responsibilities

• Board size and • Remuneration policy • Internal Audit • Risk Management
composition • Directors’ • External Audit • Compliance
• Selection and remuneration • Internal Controls • Sustainability
appointment of • Directors’ fee • Financial reporting
Directors • Related Party
• Board performance Transaction
evaluation • Financial and
Governance
The functions and Terms of Reference of the Board Committees as well as authority delegated by the Board to these
Committees have been approved by the Board and are reviewed periodically to ensure they are relevant and up-to-date.
The Board Committees examine specific issues and report to the Board with their recommendations. The ultimate responsibility
for decision-making lies with the Board.
Sustainability
The Board recognises the importance of pursuing a business sustainability agenda and sets the tone to promote sustainability
practices by balancing Environmental, Social and Governance (ESG) aspects of the business in its decision-making. To further
strengthen sustainability governance, the BRC now has added a role and accountability in reviewing sustainability related
matters including reviewing the overall sustainability plan, objectives and its performances. Further details are set out in the
Sustainability Statement of the Company in the Annual Report.
Annual Report 2020
Supply of and Access to Information/Advice

The Board and the Board Committees are supplied with and granted access to timely information which allows them to
discharge their responsibilities effectively and efficiently. The Board or Board Committees may invite Senior Management staff
to attend the Board or Board Committees’ meetings to brief or present to the Board or Board Committees on the business
operations, activities and financial performance.
Procedures are in place for the Board or Board members to seek independent professional advice in the course of fulfilling
their responsibilities, at the Company’s expense, in accordance with established procedures set out in the Board Charter in
furtherance of their duties.
All Board members have unrestricted access to the advice and services of the appointed Company Secretaries, both of whom
are experienced and qualified persons as members of the Malaysian Institute of Chartered Secretaries and Administrators.
The Directors are regularly updated and advised by the Company Secretaries and the Senior Management team on the overall
compliance and adherence to regulatory guidelines and statutory requirements, their impact and implications to the Company
and its Directors. The Executive Management team and the Company Secretaries provide Directors with complete, adequate
and timely information prior to meetings and on an ongoing basis to enable them to make informed decisions.
CODE OF CONDUCT AND ETHICS (“CoC”)

AEON Group Code of Conduct
The Company’s objectives, visions and values are aligned with the CoC which was established by AEON Co., Ltd. and has
since been adopted as the “Code of Conduct and Ethics” of the Company pursuant to the MCCG. The basic principles take
into consideration the interests of the Company’s customers, shareholders, employees, business partners and the broader
community to ensure the Company operates its business with integrity, transparency and accountability.
All employees are briefed on the CoC upon commencement of employment and attend refresher training annually. Directors,
Management and employees are expected to observe high standards of integrity and fair dealing in relation to customers,
business partners, staff and regulators in the regions where the Company operates. The CoC is accessible at the Company’s
website at https://www.aeoncredit.com.my/aeon-corporate/about-us.
Whistle-blowing Channels
The Company has established a whistle-blowing channel, identified as AEON Hotline, for employees to raise genuine
concerns without fear, on anonymous basis or otherwise, on areas such as unethical practices, illegal activities, breach of
regulations, financial/accounting fraud, etc. The issues raised through the AEON Hotline are investigated and resolved with
strict confidentiality by the Company.
For external stakeholders, any concerns on illegal, unethical or questionable practices can be communicated in confidence
by the whistle-blower without the risk of reprisal to the Senior Independent Director at [email protected] for further
investigation and action.
Board Composition and Diversity Policy

The Board currently consists of eleven (11) members, comprising the Chairman who is a Non-Independent Non-Executive
Director, six (6) Independent Directors, three (3) Non-Independent Non-Executive Directors and two (2) Executive Directors
including the MD.
Annual Report 2020

The present size and composition of the Board is optimum and well balanced, in terms of the required mix of skills, experience
and core competencies as well as need to safeguard the interests of the minority shareholders. The Board is well represented
by individuals with diverse professional backgrounds and experience in the areas of financial services, law, finance and
accounting, audit and taxation, commerce, sales and marketing, corporate branding, information technology, public relations
and public service. There is no individual Director or group of Directors who dominate the Board’s decision-making.
A summary of the Board composition as at the date of this CG Overview Statement is set out below:
Gender Nationality Age Group Ethnicity

Non- 41-50 51-60 >60
Male Female Malaysian Malaysian years years year Malay Chinese Indian Japanese
7 4 8 3 2 1 8 4 3 1 3
Appointment of Directors and Senior Management shall be based on objective criteria, merit and with due regard for diversity
in skill sets, experience, age, cultural background and gender. The Board recognises that a diverse Board would offer greater
depth and breadth and contribute towards constructive debates, which lead to better decision making. Further, Board
diversity shall also equip the Company to face challenges in an ever changing environment in terms of technology, consumer
preferences, business strategies and models as well as business risk environment.
The Board has identified YBhg. Datuk Adinan bin Maning as the Senior Independent Director of the Company with effect from
23 January 2019. The profile of each Director is set out on pages 28 to 34 of this Annual Report.
Directors’ Training
For the newly appointed Directors, induction programs are conducted to provide them with the necessary information to
assist them in understanding the operations of the Company including the products offered, management structure and
corporate strategies. In addition, the Directors are encouraged to attend continuous education programs, briefings, seminars
and conferences to enhance their skills and knowledge to keep abreast with new developments in the business environment,
corporate governance and regulatory requirements.
To further enhance the knowledge of the Directors to enable them to discharge their duties and responsibilities more effectively,
the Company had engaged third party professionals to conduct in-house trainings during the year.
The list of training programs attended by members of the Board in FYE2020 is set out below:
Name Trainings attended
1. Ng Eng Kiat • Invest Malaysia 2019 Conference

• Integrated Reporting Seminar
• Companies Act 2016
• Anti-Bribery Briefing
• Finance for Non-Finance
• 2020 Budget Seminar
• The Malaysian Code on Corporate Governance
• Corporate Liability Provision (MACC Act section 17A)
• Risk Based Auditing
• ISQM Auditing Standard
• CNBC Hard Talk Series
• Business Product Briefing
• Corporate Liability (MACC Act)
Annual Report 2020
2. Yuro Kisaka • Companies Act 2016

• Legal Familiarization for New Joiners
• Mandatory Accreditation Programme
• AEON TOP Seminar
• FYE2020 Code of Conduct (COC) Briefing for Management
• Governance & Accountability Under New Section 17A Malaysian
Anti-Corruption Commission Act 2009
3. Dato’ Md Kamal bin Ismaun • Companies Act 2016

4. Tomokatsu Yoshitoshi • Companies Act 2016

• Measures toward Corporate Misconducts
• EY seminar on Independent Directors
• Comparison of Audit & Supervisory Board of Japan as to Audit
Committee of US
• 2019 World Major Risk Trend
• Power Harassment
• Japan’s world policy driven by Prime Minister of Japan, Shinz Abe
• Islamic Finance: a basics for Japanese
• US corporate 2019 Board Agenda, from Tone at the Top to Buzz
on the Floor
• Toward Sustainable Growth of Corporation
• EY seminar on Internal Control and Govenance Scheme
• PwC seminar on Independent Directorship under Controlling
shareholder
• Coaching as a mean of Corporate Governance
• SDGs and ESG
• Importance of communication to prevent from Fraud
• Corporate misconducts
• Issues on Food sufficiency rate
• PwC seminar on Board Effectiveness & Performance Evaluation
• Japan Defense Outlook, present and future
Annual Report 2020
5. S Sunthara Moorthy A/L S Subramaniam • Governance Symposium 2019

• Demystifying the Diversity Conundrum: Road to Business
Excellence
• Corporate Liability Provision (MACC Act section 17A)
• Audit Oversight Board-Conversation with Audit Committees
6. YBhg. Datuk Adinan bin Maning • IERP Global 2019

7. Datin Khoo Pek Ling • Fundamentals of Corporate Directorship- Module A: The Role of
the Board in Strategy & Risk Management Oversight
• How Strategic is Your Board? Board Strategy & Risk Programme
• An Overview of the Malaysian Private Entities Reporting Standard
• IERP Global 2019
• Risk Based Auditing
• 2020 Budget Seminar
8. Datin Yasmin Ahmad Merican • Mandatory Accreditation Programme

• Fundamentals of Corporate Directorship- Module A:The Role of
• IERP 2019
9. Rashidah binti Abu Bakar • Mandatory Accreditation Programme

• Fundamentals of Corporate Directorship - Module A: The Role of
• Leadership Greatness in Turbulent Times: Building Corporate
Longevity
• Anti Bribery Briefing
Annual Report 2020
10. Masaaki Mangetsu • Companies Act 2016

• Seminar on the current state of European cashless, business
environment in South Asia
• Officer compliance
• Trends in data utilization
• Mandatory Accreditation Programme
• Officer / manager training
• New business opportunities created by 5G
11. Lee Tyan Jen • Companies Act 2016

• International Director’s Summit 2019: The Trust Compass:
Resetting the Course
• EY Budget & Tax Conference
• FYE2020 Code of Conduct (COC) Briefing for Management
• AFS Directors Training
• Governance & Accountability Under New Section 17A Malaysian
Anti-Corruption Commission Act 2009
12. Kenji Fujita • NIL

(Retired on 20.06.2019)
13. Tetsuro Takano • A Work Style Reform Training in AEON

(Retired on 20.06.2019)
Board Meetings
Board Meetings are generally held on a monthly basis, to facilitate regular and current oversight and review on financial and
business performance of the Company, review of key areas for risk management and address other matters arising or requiring
Board decision.
During FYE2020, the Board met fourteen (14) times where it deliberated and considered a variety of matters, inclusive of
financial result, operations’ performance, potential investments, strategic decisions, risk management and other matters
requiring the decision of the Board. All proceedings of the Board meetings are minuted and circulated to the Board members
in advance of the next Board meeting including the follow up action items that has been duly updated. Where necessary,
decisions of the Board are also made by way of circular resolutions in between scheduled Board meetings. The details of
Directors’ attendance at the Board meetings are as follows:
Name of Director Designation/Directorate Attendance
Ng Eng Kiat Chairman/Non-Independent Non-Executive Director 14/14
Yuro Kisaka Managing Director 10/10

(Appointed on 20 June 2019)
Dato’ Md Kamal bin Ismaun Non-Independent Non-Executive Director 14/14

Annual Report 2020
Name of Director Designation/Directorate Attendance
Tomokatsu Yoshitoshi Independent Non-Executive Director 14/14
S Sunthara Moorthy A/L S Subramaniam Independent Non-Executive Director 14/14
YBhg. Datuk Adinan bin Maning Senior Independent Non-Executive Director 13/14(1)
Datin Khoo Pek Ling Independent Non-Executive Director 14/14
Datin Yasmin Ahmad Merican Independent Non-Executive Director 14/14
Rashidah binti Abu Bakar Independent Non-Executive Director 14/14
Masaaki Mangetsu Non-Independent Non-Executive Director 10/10

(Appointed on 20 June 2019)
Lee Tyan Jen Executive Director 14/14
Kenji Fujita Managing Director 4/4

(Retired on 20.06.2019)
Tetsuro Takano Non-Independent Non-Executive Director 4/4

(Retired on 20.06.2019)
(1)
Unable to attend 1 out of 14 meetings being overseas and without access to teleconference facilities.
Nominating Committee (“NC”)

The NC established by the Board comprises three (3) members, a majority of whom are Independent Directors. Six (6) NC
meetings were held during the year. Details of the NC members during FYE2020 are set out below:
Number of Meetings
Name/Status of Directorship Held During Tenure in Office Attended
Tomokatsu Yoshitoshi 6 6
Chairman/Independent Non-Executive Director
Dato’ Md Kamal bin Ismaun 6 6

Member/Non-Independent Non-Executive Director
Datin Yasmin Ahmad Merican 6 5

Member/Independent Non-Executive Director
During FYE2020, the key activities undertaken by the NC are summarised as follows:
i. Review of the size of the Board, required mix of skills, experience and other qualities of the Board including core
competencies that both Executive and Non-Executive Directors should bring to the Board;
ii. Assessment of the effectiveness of the Board as a whole, the Board Committees and contribution of each individual
Director;
iii. Assessment of the effectiveness and performance of the Executive Directors and independence of the Independent
Directors;
iv. Identification and review of the training needs of the Directors;

Annual Report 2020
v. Nomination and assessment of suitability of Yuro Kisaka and Masaaki Mangetsu for appointment to the Board, nomination
and assessment of suitability of appointment of Yuro Kisaka as the new MD and thereafter recommendation on the
proposed nominations for Board’s approval; and
vi. Review of the retirement of Directors and their eligibility for re-election.
Based on the reviews and assessment conducted, the NC is satisfied with the current composition and performance of the
Board. Further details of policy on board composition having regard to the mix of skills, independence and diversity, Board
nomination and election process of directors and criteria used by the NC in the selection process and the assessment
undertaken by the NC in respect of the board, board committees and individual directors together with the criteria used for
such assessment are set out in the CG Report and in the Board Charter.
The Terms of Reference of the NC is available on the website of the Company at https://www.aeoncredit.com.my/
Remuneration of Directors and Senior Management

The Board has in place Remuneration Policy and Procedures applicable to Directors and Senior Management, which is
designed to:
i. Provide comprehensive remuneration package for Executive Director, Executive Officers and Senior Management which
is tailored to attract, engage and retain the required talent and to motivate the Executive Director, Executive Officers and
Senior Management to drive the Company’s long-term objectives and to ensure business sustainability and growth; and
ii. Develop appropriate remuneration structure for Non-Executive Directors, taking into consideration the complexity of the
Company’s business, contribution and time commitment of each director and trends for similar positions in the market.
The Remuneration Policy and Procedures are reviewed periodically by the RC and the Board.
The RC, comprising a majority of Independent Directors, assists the Board in the implementation of the above-mentioned
policy and procedures based on the Terms of Reference of the RC, which is available at the Company’s website
https://www.aeoncredit.com.my/aeon-corporate/about-us under Corporate Governance.
Two (2) RC meetings were held during the financial year. Details of the RC members during FYE2020 are set out below:
Number of Meetings
Tomokatsu Yoshitoshi 2 2
Ng Eng Kiat 2 2
Member/Non-Independent Non-Executive Director
Datin Yasmin Ahmad Merican 2 2

The Board will recommend the Directors’ remuneration payable to the Non-Executive Directors to the shareholders for approval
at the Annual General Meeting (“AGM”) in accordance with Section 230(1) of the Companies Act 2016.
Annual Report 2020

PRINCIPLE B
EFFECTIVE AUDIT AND RISK MANAGEMENT
Audit Committee (“AC”)
The AC comprises three (3) Independent Directors, with S Sunthara Moorthy A/L S Subramaniam as the Chairman of the AC.
He is a Fellow Member of the Association of Chartered Certified Accountants (ACCA) and a Chartered Accountant registered
with the Malaysian Institute of Accountants (MIA).
All AC members are financially literate, with the AC’s composition and performance being subject to annual review by the
NC before recommendation to the Board for approval. The composition of the AC and activities of the AC for the financial year
under review are contained in the Audit Committee Report in this Annual Report.
Risk Management and Internal Control Framework

The Board has ultimate responsibility for reviewing the Company’s risks, approving the risk management and internal control
framework, overseeing the Company’s strategic risk management and ensuring adequacy of internal control system in the
Company.
The key features of the risk management and internal control framework and processes to identify, evaluate, control,
monitor and report the principal business risks faced by the Company on an ongoing basis are set out in the Statement on
Risk Management in this Annual Report.
The Board is of the view that the system of internal control and risk management in place during FYE2020 is sound and
sufficient to safeguard the Company’s assets, shareholders’ investment and the interests of customers, regulators, employees
as well as other stakeholders.
Board Risk Committee (“BRC”)

The BRC assisted the Board in discharging the oversight responsibility for risk management in FYE2020 by reviewing
the risk management framework, key risk indicators and risk mitigation measures for key focus areas, and compliance
risk management periodically.
Four (4) BRC meetings were held during the financial year. Details of the BRC members during FYE2020 are as follows:
Number of Meetings
YBhg. Datuk Adinan bin Maning 4 4

Chairman/Senior Independent Non-Executive Director
Datin Khoo Pek Ling 4 4

Rashidah binti Abu Bakar 4 4

Annual Report 2020
PRINCIPLE C
INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
Communication with stakeholders
The Board is aware that a key element of good corporate governance is the effective communication and timely dissemination
of clear, relevant and comprehensive information which is readily accessible to the Company’s stakeholders. It also recognises
the importance of maintaining transparency and accountability to stakeholders, in line with the principles and practices set
out in Bursa Securities’ Corporate Disclosure Guide and applicable laws.
The various channels of communication with stakeholders include:
i. The Company’s website (www.aeoncredit.com.my) where information on the Company’s announcements, financial
information, Board Charter and other policies, Code of Conduct, the Company’s Annual Reports and whistle-blowing
channel, etc. may be accessed;
ii. Announcements to Bursa Securities on the quarterly/annual financial performance and corporate developments in the
Company;
iii. Meetings, engagements and participation in events involving regulators, industry associations, business partners,
merchants, segments of local community etc.;
iv. Updates of the Company’s activities, product launching and operations disseminated through dialogues with analysts,
fund managers and investors as well as press releases from time to time;
v. Publication of Annual Report and CG Report, containing comprehensive information on the financial results, operations,
prospects, activities undertaken, sustainability statement and state of corporate governance in the Company;
vi. Engagement with shareholders during the Company’s AGM; and
vii. A dedicated investor relations’ e-mail contact which is available at [email protected] for shareholders to submit
queries or comments on any issues of concern.
The list of stakeholder groups and communication channels is set out in the FYE2020 Sustainability Statement in this Annual
Report.
Conduct of General Meetings

The Company’s AGM has been a main forum of dialogue for shareholders to raise their concerns and provide feedback to the
Board on the Company’s performance and direction. It serves as a platform for shareholders to obtain full understanding on
the Company and its operations. In line with best practice, the notice of AGM setting out the agenda together with the Annual
Report is sent to shareholders at least twenty-eight (28) days prior to the date of AGM.
In 2019, as in the previous years, the AGM of the Company was held in the city centre of Kuala Lumpur in order to facilitate easy
access for, and maximum participation of, shareholders. All Directors were present at the AGM to engage with shareholders
and address issues of concern raised by shareholders.
The Board and Senior Management recognise the importance of Integrated Reporting (“IR”) as an approach to bring
together material information about AEON Credit’s strategy, governance, performance and prospects in a way that reflects the
commercial, social and environmental context within which the company operates. The Company has embarked on journey
to fully comply and adopt the International <IR> Framework for IR by FYE2021, and is currently developing the IR roadmap
encompassing “integrated thinking”.
This Corporate Governance Overview Statement was approved by the Board of Directors on 5 May 2020.
Annual Report 2020
AUDIT COMMITEE REPORT

COMPOSITION AND MEETING ATTENDANCE
The Audit Committee (“AC”) members are appointed by the Board from amongst its non-executive members. The AC
comprises three (3) members, all of whom are Independent Non-Executive Directors.
The AC composition meets the requirements of Paragraphs 15.09 and 15.10 of the MMLR of Bursa Securities, which set
out that the AC must be composed of not fewer than three (3) members, all of whom must be non-executive directors, with
the Chairman and a majority of the members being independent directors and at least one (1) member of the AC must be
a member of the Malaysian Institute of Accountants, and no alternate director is appointed as a member of the AC. The
Chairman of the AC, S Sunthara Moorthy A/L S Subramaniam and Datin Khoo Pek Ling are members of the Malaysian Institute
of Accountants.
During the FYE2020, the AC convened seven (7) meetings with four (4) scheduled quarterly meetings held on 16 April 2019,
18 June 2019, 18 September 2019 and 12 December 2019 respectively, and three (3) Special Meetings held on 28 March
2019, 27 June 2019 and 25 July 2019 respectively. Details of the composition of the AC and attendance by each member at
the AC Meetings are as follows:
Number of Meetings
S Sunthara Moorthy A/L S Subramaniam 7 7


Member/Senior Independent Non-Executive Director

The Company Secretary, being the Secretary of the AC, the Chief Financial Officer and Head of Internal Audit Group, had
attended all the meetings held during the financial year. Upon invitation, the Managing Director, Executive Director, Executive
Officers, related management personnel and representatives of the External Auditors also attended specific meetings.
During the year under review, the Board, via the Nominating Committee, had performed the annual assessment on the term
of office and performance of the AC and each of its members pursuant to Paragraph 15.20 of the MMLR of Bursa Securities.
The Board is satisfied that the AC and each of its members have discharged their responsibilities and duties in accordance
with the AC’s Terms of Reference. The responsibilities and duties of the AC are set out in the AC’s Terms of Reference
and approved by the Board, and it is accessible for viewing on the Company’s website at https://www.aeoncredit.com.my/
The Chairman of the AC reported to the Board on matters deliberated during the AC Meetings and minutes of each AC
Meetings were recorded, circulated to all members of the Board and tabled at the Board Meetings for notation.
Annual Report 2020
SUMMARY OF ACTIVITIES OF THE AC DURING THE FINANCIAL YEAR

For the FYE2020, the AC in the discharge of its functions and duties as set out in its Terms of Reference, has carried out the
following main activities:
1. Financial Statements and Reporting
a) Reviewed and discussed the unaudited quarterly financial results of the Company with the Management at the
scheduled quarterly AC meetings, and recommended the same to the Board for consideration and approval before
releasing to Bursa Securities.
b) Reviewed and discussed with the External Auditors and Management on the Audited Financial Statements of the
Company for the financial year ended 28 February 2019, and recommended the same for the Board’s consideration
and approval.
2. External Audit
a) Reviewed and deliberated reports issued by the External Auditors, Messrs. Deloitte PLT, on significant findings
and remedial actions to be taken by Management to address the issues raised arising from the statutory audit and the key
audit matters raised by the External Auditors at the AC Meeting held on 16 April 2019. At the same meeting,
Messrs. Deloitte PLT had also tabled the Independent Auditors’ Limited Assurance Report on the adequacy of controls
for the Company’s Trust Account in accordance with Principle 4 of the Bank Negara Malaysia Guideline on E-Money, for
the AC’s deliberation.
b) Reviewed and recommended to the Board for consideration the proposed audit fees and non-audit fees for the Company’s
External Auditors in respect of the statutory audit and other non-audit work.
c) At the AC Meeting held on 16 April 2019, reviewed and recommended to the Board on the re-appointment of
Messrs. Deloitte PLT as the External Auditors of the Company for the financial year ended 29 February 2020.
d) Reviewed with the External Auditors, Messrs. Deloitte PLT their terms of engagement, proposed audit remuneration
and the audit plan for the year under review to ensure that their scope of work adequately covers the activities of the
Company.
e) During the financial year, the AC met with the Engagement Partner of Messrs. Deloitte PLT on 16 April 2019 and
12 December 2019 respectively to discuss any issues or significant matters in relation to their work without the presence
of the Executive Board members, Management staff of the Company and Internal Audit Group.
3. Internal Audit
a) At the AC Meeting held on 18 June 2019, reviewed and approved the revised Internal Audit Group’s Internal Audit Charter
for adoption.
b) Reviewed and deliberated internal audit reports, which highlighted the audit issues and recommendations as well as the
Management’s action plan thereto, to ensure that appropriate actions had been taken to address the issues raised.
c) Reviewed and discussed with the Management the progress of agreed remedial actions plans on audit issues at the
scheduled quarterly AC meetings, to ensure that the remedial measures are implemented promptly and appropriately.
Annual Report 2020
AUDIT COMMITEE REPORT

d) The AC has also evaluated the performance and effectiveness of the Internal Audit function pursuant to Paragraph 15.12
of the MMLR of Bursa Securities, which include the scope, functions, competency and resources of the Internal Audit Group.
e) During the financial year, the AC held one (1) meeting with the Head of Internal Audit Group on 16 April 2019 without
the presence of the Executive Board members and Management staff of the Company to discuss any issues or significant
matters, which the Head of Internal Audit Group wished to raise.
f) At the AC Meeting held on 12 December 2019, reviewed and approved the annual internal audit plan of the Internal Audit
Group for the financial year ending 28 February 2021, to ensure the adequacy of the scope, coverage of work and the
resource requirements of the Internal Audit function to perform its work.
4. Related Party Transactions
a) Reviewed the recurrent related party transactions and new related party transactions of a revenue or trading nature entered
into by the Company at the scheduled quarterly AC meetings and special AC Meetings to ensure the transactions were fair,
reasonable, on normal commercial terms, not detrimental to the interests of the minority shareholders and in the best
interest of the Company and recommended the same to the Board for consideration and approval.
b) Reviewed the annual circular to shareholders in respect of the proposed renewal of existing Shareholders’ mandate for
recurrent related party transactions and proposed new shareholders’ mandate for additional recurrent related party
transactions of a revenue or trading nature and recommended the same to the Board for consideration and approval.
5. Internal Control Over Financial Reporting (“Japanese Sarbanes-Oxley” or “J-SOX”)
a) Reviewed and deliberated J-SOX Internal Control Audit Report for the financial year ended 28 February 2019 issued
by Messrs. Deloitte PLT on the findings and Management’s action plans put in place to address the issues
raised arising from the independent testing on the effectiveness of the Company’s internal control over financial reporting
which covered the areas of Entity Level Control, Financial Closing Reporting Process, Process Level Control, and
General IT Control.
6. Annual Reporting
a) Discussed and recommended to the Board for approval, the Corporate Governance Overview Statement,
Corporate Governance Report, Statement on Risk Management and Internal Control, AC Report and
Directors’ Responsibility Statement in relation to the Audited Financial Statements for inclusion in the Annual Report
2019.
7. Others
a) Reviewed the proposals presented by Management to declare annual distributions to shareholders, and recommended
such proposals to the Board for consideration.
b) Reviewed and recommended to the Board for approval the adoption of new accounting standard (Malaysian Financial
Reporting Standard 16 – Leases).
c) Reviewed proposals for the disposal of written-off accounts as presented by Management before recommending for the
Board’s approval.
Annual Report 2020
d) Discussed and recommended to the Board for approval, the appointment of KPMG Tax Services Sdn Bhd to provide
transfer pricing advisory services to the Company.
e) Reviewed and deliberated the Tax Health Check Report issued by Deloitte Tax Services Sdn Bhd on the review results
and findings in connection with their reviews in the areas of individual tax, corporate income tax, withholding tax and
stamp duty.
INTERNAL AUDIT FUNCTION

The Board has established an in-house internal audit function. The primary responsibility of the Internal Audit Group is to provide
independent and objective assessment on the adequacy and effectiveness of the governance, risk and system of internal control
processes implemented by the Management.
The Internal Audit Group’s mission, scope of work, responsibilities and authority are governed by its Internal Audit Charter, which
is approved by the AC. As guided by the Internal Audit Charter, Policy and Procedure, the Internal Audit Group maintained their
independence and impartiality on the activities and functions it audits. To reflect the independence of the internal audit function,
the Internal Audit Group reports functionally to the AC and administratively to the Managing Director, and has unfettered access
to the AC. Through this reporting relationship, the AC also ensured that the Internal Audit Group has the authority to carry out
their work objectively and independently.
The Internal Audit Group adopts a risk-based audit methodology to plan and prioritise audit work focusing on high risk areas,
which encompass auditing the Company’s business activities and operations, information systems including the Outsourced
Service Providers to ensure they are reviewed on a rotational basis. These are guided by an annual internal audit plan, which is
approved by the AC.
During the year under review, the Internal Audit Group conducted the internal audit engagements in accordance with the
approved annual internal audit plan to review the adequacy and effectiveness of the internal control system as well as compliance
with relevant policies, procedures and regulations. The Internal Audit Group also carried-out audit reviews based on requests
from the regulator, Bank Negara Malaysia, reviewed the recurrent related party transactions entered into by the Company on a
quarterly basis, and observed and reviewed the Business Continuity Plan and Disaster Recovery Plan tests to provide independent
evaluation of the testing performed.
Internal control deficiencies noted from these audits were highlighted to the appropriate level of Management for resolution. In
relation to this, Internal Audit Group also presented the audit issues and remedial action plans thereto, as well as the progress of
remedial actions taken on open audit issues, at the monthly Internal Audit Meetings attended by the Managing Director, Executive
Director and Executive Officers of the Company.
Internal Audit Reports arising from the audits and reviews conducted by Internal Audit Group were tabled to the AC for review
and deliberation at each of the scheduled AC Meetings held on 16 April 2019, 18 June 2019, 18 September 2019 and
12 December 2019 respectively. The relevant Management of the operating units are responsible to ensure that remedial
measures are taken on reported internal control deficiencies within the required timeframe. Follow-up reviews were conducted
by Internal Audit Group, and status updates were provided to the AC on the progress of remedial measures taken.
The total cost incurred in respect of the internal audit function for the financial year under review was in the region of RM2,590,000
(FYE2019: RM2,450,000).
Annual Report 2020
BOARD RISK COMMITTEE REPORT

INTRODUCTION
The Board Risk Committee (“BRC”) is a governing or supervision body appointed by the Board of Directors (the “Board”),
which is charged with oversight of the organisation’s risk, and internal control functions as embodied in the Company’s
Risk Management framework.
COMPOSITION AND MEETING ATTENDANCE

The Committee is appointed by the Board, all of whom are independent and currently comprises non-executive directors.
The appointment or termination of appointment of any Committee member is at the discretion of the Board, upon
recommendation by Nominating Committee.
The Secretary to the BRC is the Company Secretary. According to the Terms of Reference, the Secretary holds the responsibility
to draw up an agenda, which shall be circulated together with relevant support papers, at least one (1) week prior to each
meeting, to the Committee members.
The Committee meets at least four (4) times a year and additional meetings may be called by the Chairman if necessary
in order to fulfil its duties. For the FYE2020, four (4) BRC meetings were held and the attendance of the BRC members is
recorded as follows:
Number of Meetings

Chairman/Senior Independent Non-Executive Director

Rashidah binti Abu Bakar 4 4

The Managing Director, Executive Director, Executive Officers, other Board members, management, consultants or other
advisors may be invited to attend the BRC meetings, as and when required.
The quorum for the meeting consists of two (2) and the majority of members present must be independent directors.
In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members
present.
The Committee shall meet at least once a year with the Chief Risk Officer and Chief Compliance Officer to discuss any matters
without the presence of the management and any executive members of the Board. The Committee may conduct its meetings
to include participation by any member or invitee.
Annual Report 2020
SUMMARY OF ACTIVITIES OF BRC DURING THE FINANCIAL YEAR

For the FYE2020, the BRC in the discharge of its functions and duties as set out in its Terms of Reference, have carried out
the following principal activities:
a. Review the quarterly risk management report of the Company,
b. Review and deliberate market/environment and emerging risks,
c. Review and recommend risk/compliance related Framework/Policies to Board for approval,
d. Review and discuss legal and compliance matters,
e. Discuss matters arising from risk management and compliance reports and resolutions of matters addressed.
RESPONSIBILITIES
Risk Management
• Assess the Company’s processes relating to its risks and control environment.
• Review and recommend risk management strategies, policies, and risk tolerance for the Board’s approval.
• Review the adequacy of Company’s risk management framework, monitor principal risks that affects the Company and
ensure that the evaluation of risk management and mitigation measures are in place in order to safeguard shareholders’
investments and the Company’s assets.
• Conduct annual review on the adequacy and effectiveness of risk management process.
• Review the Company’s stress test procedures including simulation scenarios, parameters, key assumptions and results.
• Review management’s periodic report on risk appetite, risk exposure, risk portfolio composition, and risk management
activities to ensure that the risk reports are provided with appropriate risk responses.
• Review the Company’s Business Continuity Management Framework and policy for dealing with extreme internal/
external events and disasters.
• Review and recommend corrective and preventive measures undertaken to remedy failings and/or weaknesses in the
risk management process.
• Review the risk management report and whether appropriate actions are taken by management on the recommendations
made.
• Review the appointment, and dismissal of the Chief Risk Officer as well as to evaluate the performance of the risk
management function.
• Review the statement on risk management and internal controls of the Company for inclusion in the Annual Report.
Annual Report 2020
BOARD RISK COMMITTEE REPORT

Compliance
• To review and approve legal and compliance framework and policies.
• Discuss and deliberate legal and compliance risk issues regularly to ensure the issues are resolved effectively and in
timely manner.
• Review the appointment, and dismissal of the Chief Compliance Officer as well as to evaluate the performance of the
legal and compliance function.
• To evaluate the effectiveness of the Company’s compliance function and overall management of compliance risk.
Other responsibilities
• Review governance related matters that may be considered/requested by the Board from time to time.
• Review sustainability related matters, including the Sustainability Framework, material matters, sustainability performance
and reporting.
• To carry out such other assignments as may be agreed upon or delegated by the Board.
• Strengthen the role of the independent directors by giving them a greater depth of knowledge as to the operations of the
Company.
AUTHORITY
The BRC has the following authority as empowered by the Board:
a. Investigate any matter within its terms of reference.
b. Seek any information it requires from employees who are required to cooperate with any request made by Committee.
c. Full and unrestricted access to any information pertaining to the Company.
d. Direct communication channels with internal and external auditors and with senior management of the Company.
e. Adequate resources required to perform its duties including legal or other independent professional advice as it considers
necessary, at the expense of the Company.
f. Report to Bursa Securities any matter that has not been satisfactorily resolved resulting in a breach of the MMLR of
Bursa Securities, after the matter has been reported to the Board.
The Chairman of the Committee shall engage on a continuous basis with the Chairman of the Board and Senior Management
including the Managing Director, Chief Risk Officer and Chief Compliance Officer in order to be kept informed of matters
affecting the Company.
PERFORMANCE
On an annual basis, the Board via the Nominating Committee will review and evaluate the performances of the BRC to
determine whether the BRC and its members have carried out their duties in accordance with their terms of reference.
Annual Report 2020
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION
In line with Paragraph 15.26(b) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements
(“MMLR”), the Board of Directors (the “Board”) of a listed issuer is required to include in its Company’s Annual Report
a statement on the state of internal control of the listed issuer. This statement which comprises the main features of risk
management and internal control within AEON Credit Service (M) Berhad (“Company”) has been prepared in accordance to:
a) Statement on Risk Management & Internal Control – Guidelines for Directors of Public Listed Issuers which was approved
by Bursa Securities; and
b) Malaysian Code on Corporate Governance 2017 (“MCCG”).
The Statement outlines the key features of the risk management and internal control system of the Company during the year
under review.
Board Responsibilities
The Board is responsible to review and approve the Company’s overall risk strategy, including risk appetite, risk tolerance
and overseeing its implementation to support the sustainability initiatives of the Company. The Board also acknowledges the
presence of a sound internal control system in safeguarding shareholders’ interest, as well as to ensure compliance with
applicable laws and regulations. In light of the above, the Board affirms that there is a proper risk management process
in place to identify, evaluate and manage significant or emerging risks that could derail the Company’s aim in meeting its
objectives.
The risk management and internal control framework is designed to manage rather than to eliminate the risk of failure in the
achievement of goals and objectives of the Company. The system can therefore only provide reasonable and not absolute
assurance against the occurrence of material misstatement or loss, and that the risk management process is designed to
minimise or mitigate it.
In acknowledging that having a sound risk management and internal control system is crucial, the Board has established
a governance structure that ensures effective oversight of risks and internal controls in the Company. For this, the Board is
assisted by the Audit Committee (AC) and the newly formed Board Risk Committee (“BRC”) to provide primary oversight
responsibilities on the Company’s risk management and internal control system. The Board remains responsible for the
governance of the risk and internal controls with regard to the execution of the delegated oversight responsibilities.
On 16 April 2019, the first BRC meeting was conducted with the purpose of overseeing the Company’s risk and compliance
particularly on the adequacy and effectiveness of risk management and compliance processes. The BRC is also responsible
to review the Company’s sustainability related matters, including Sustainability Framework, material matters covering
Environment, Social and Governance (ESG) risks, and sustainability reporting. For more details on the function of the BRC,
please refer to pages 84 to 86, Board Risk Committee Report.
Management Responsibilities
The Management’s overall responsibility is to assist the Board in implementing the Company’s policies and procedures on risk
and control by:
• Identifying, assessing, monitoring and reporting risks and internal control, as well as taking proper actions. In identifying
and mitigating or minimising the risks, it is relevant to the business of the Company to ensure the achievement of its
objectives and goals.
Annual Report 2020

• Continuously review the changes in the market environment, be it economic, environmental, political or social, on any
emerging risks that could affect the Company and its businesses.
• Implementing remedial action to address deficiencies that were being identified and tracked for closure. Thereafter, to
report to the Board for deliberation.
• Formulating and reviewing relevant policies and procedures to manage risks in accordance to the Company’s strategic
goals.
• Reporting in timely manner to the Board on any changes in risks or emerging risks, and the corresponding corrective
actions taken.
The Management has further assured the Board that the Company’s risk management and internal control system is operating
adequately and effectively in all material aspects with the necessary processes being implemented.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The key functions and processes that the Board has established in reviewing the adequacy and effectiveness of risk
management and internal control system include the following:
Risk Management
Risk Management has become an important driver to support business strategies while balancing the appropriate level of
risk taken without exposing itself to unacceptable potential losses or reputational damage. The Company has adopted the
Enterprise Risk Management (ERM) Framework that sets out the mechanism and processes in managing risk management.
The BRC is assisted by the Risk Management Committee (RMC) to review the effectiveness of risk management. The RMC
comprises the key management team of the Company, which includes the Managing Director, Divisional Heads and Group
Heads. The RMC meetings, coordinated by the Risk Management Department are held on monthly basis, to address risk
and compliance issues together with mitigating measures, reviewing policies and procedures and deliberating key emerging
issues that possibly impact the Company. Any new or changes in policies related to risk and compliance, are reviewed and
recommended by the RMC to the BRC, and subsequently to the Board for approval.
The key features of the ERMF include:
Risk Appetite
It is defined as the amount and types of risk that the Company is willing to accept, in pursuit of its business objectives.
The Company’s risk appetite is an integral component of the Company’s robust risk management framework. The risk appetite
also provides a structure in understanding risk and is embedded in the day to day business activities.
Risk Governance & Oversight

Risk governance provides a formalized and transparent structure that promotes involvement from the Board and management
in the risk management process to ensure a uniformed view of risk across the Company.
Annual Report 2020
The Company had put in place a model of Three Line of Defense in managing risk and compliance collectively based on their
roles below:
1st Line of Defense – Risk Taking

Business units are the owners of the risk, responsible to identify, manage and mitigate their risks.
2nd Line of Defense – Risk Controlling

Risk control functions are represented by the Risk Management, Legal & Compliance and Quality Management
Department.
Risk Management is responsible to formulate and deploy overall risk management framework as well as developing and
assessing related risk tools and methodologies across the Company.
Legal and Compliance is responsible to provide advice to Business units to ensure the Company’s compliance to
applicable law and regulations, whilst minimising the risk of non-compliance.
Quality Management ensures that the internal policies, procedures and ISO Management System Standards are
adhered to.
3rd Line of Defense – Assurance Party

Internal audit is responsible to provide independent assessment and assurance on the adequacy and effectiveness of
internal control related to process, risks and compliance, and governance functions.
Risk and Compliance Culture

Risk Management Department continuously seeks to build a strong risk management and compliance culture by promoting
awareness, ownership, and accountability. Training, e-learning and awareness are being emphasized in order to promote the
risk and compliance culture.
Risk and Compliance related policies and procedures are reviewed on a periodic basis to meet changes in the business
environment, as well as the requirements of applicable law and regulations.
As part of the risk and compliance culture, the Company has instilled a culture where the Board, management and all
employees of the Company are committed to adhere to the requirement of relevant laws and regulations. This commitment
is clearly demonstrated through the establishment and strengthening of policies, processes and controls in managing and
preventing non-compliance.
Risk Management Process

a) Risk Identification
It is a process of identification, understanding and assessment of inherent risk for relevant products, new products or
processes and business initiatives. It enables early detection of risk and ensures sound risk management practices are
in place.
b) Risk Evaluation and Treatment

A combination of qualitative and quantitative methods are used by the Management to assess and evaluate the risk
identified from two perspectives – risk likelihood and impact parameters. Management will then decide, in consultation
with Risk Management Department on the risk treatment options for subsequent implementation. Treatment options are
being monitored and tracked till closure in order to mitigate the identified risk effectively from future occurrence.
Annual Report 2020

c) Risk Monitoring and Reporting
Monitoring of early warning and key indicators are crucial in alerting the management on any potential risk events, and
to put in place timely action to mitigate the potential risk. The results are then being reported and communicated at the
respective platform.
d) Communication
The Company, through the Risk Management Department, continuously communicates and engages with stakeholders
to identify possible risks in addition to the events and circumstances that could affect the achievement of the objectives
which includes the realization of the opportunities.
Internal Control System

The Board is responsible for managing the key business risks of the Company and implementing an appropriate internal
control system to manage those risks. The Audit Committee, assisted by the Internal Audit Group, provides the Board with the
assurance it requires on the adequacy and integrity of the system of internal controls. The Audit Committee has an oversight
function of all activities carried out by the Internal Audit Group.
To ensure that a sound system of controls is in place, the Board has established primary processes in reviewing the adequacy
and integrity of the system of internal controls. The primary processes include:
• An annual business plan and budget which are submitted to the Board for approval. Actual performances are reviewed
against the targeted results on a monthly basis for Management responses and actions, where applicable. Board reviews
monthly reports from the management on the key operating statistics and risk management, and feedback on actions
required are furnished to the senior management team.
• The Company core values and Code of Conduct are the essential guiding principles which are observed in all business
dealings and sets out standards of good practice to be observed by all staff.
• The corporate decision authority matrix, corporate purchasing authority matrix and respective business units’ authority
matrix with defined empowerment and authority serves as a framework in regulating all business activities and decisions
within the Company.
• The Company has in place written operating procedures in various areas of operations, which also incorporate risk
management issues and updated as and when necessary to improve on the control environment and operational
efficiency.
• During the financial year, the Company has established additional policies in order to strengthen the overall governance.
These policies were reviewed by the RMC, the BRC and subsequently approved by the Board. The policies mentioned
are:
a) Anti-Bribery Management Policy

The Company has recently implemented the Anti-bribery management policy to prevent, detect and respond to
bribery and to comply with applicable laws and regulations. The Company has also established and performed
the corruption risk assessment in order to assess the key risk areas and to identify the required relevant controls.
In supporting the anti-bribery initiatives, the Company has implemented the Entertainment and No-Gift Policy in
order to set the appropriate guidelines for the Company.
b) Cyber Security Policy

Cyber threats are becoming more prevalent worldwide. In addressing this, the Company had established
comprehensive guidelines on the Cyber Security Program, to provide guidance for the Company in managing
cyber security risk to ensure adequate cyber-security preparedness on a continuous basis.
Annual Report 2020
c) Whistleblowing Policy
The Company has implemented a whistle blowing policy and whistle blowing channel to provide an avenue for
employees and the public to report actual or suspected malpractices, misconducts or violations of the Company’s
policies and regulations in a secure and confidential manner.
• Various Management Committees have been established to assist and support the Board such as the Company’s
Executive Committee, Risk Management Committee, Investment Committee, Disciplinary Action Committee, Human
Resource Development Committee, IT Steering Committee and Credit Committee.
• The Company has been identified as a significant subsidiary of the holding corporation, AEON Financial Service Co.,
Ltd. (“AFSJ”), for purposes of AFSJ’s compliance with the Framework of Internal Controls over Financial Reporting
(“Japanese Sarbanes-Oxley or J-Sox”) pursuant to the Financial Instruments and Exchange Law of Japan. Based on
the said requirements, the Management regularly conducts evaluation of internal controls in the Company that have a
significant and pervasive impact over financial reporting and internal controls. In addition, the Company has engaged
Messrs Deloitte PLT to conduct an annual assessment on the effectiveness of internal controls on financial reporting and
furnishes a report including related findings, if any.
All the above mentioned processes are in place with the aim to provide reasonable assurance on the effectiveness of the
Company’s internal control system. The Board will conduct reviews on a continuous basis to ensure the effectiveness,
adequacy and integrity of the system of internal controls in safeguarding the Company’s assets and stakeholders’ interests.
INTERNAL AUDIT FUNCTION

The Internal Audit Group adopts a risk-based approach in preparing its audit strategy and plan. The Internal Audit Group
independently reviews the risk exposures and control processes implemented by the Management and conducts assignments
which encompass auditing and review of critical areas within the Company, including operations, finance, information systems
as well as outsourced activities. The internal audit activities are guided by an annual internal audit plan, which is approved
by the Audit Committee and the internal audit reports are tabled at the Audit Committee Meetings for review. Further, the
Internal Audit Group engages in regular communication with the senior management team and various departments within the
Company related to Internal Audit activities and efforts for continuous improvement in operations and systems.
For more details on the function of the Internal Audit Department, please refer to page 83, Audit Committee Report.
REVIEW OF STATEMENT BY EXTERNAL AUDITORS

According to Paragraph 15.23 of the MMLR, this Statement been reviewed by external auditors for the financial year ended
29 February 2020. The limited assurance was conducted in accordance with the Audit Assurance Practice Guide 3 (AAPG3),
which was issued by the Malaysian Institute of Accountants (MIA), and it does not require the external auditors to form an
opinion on the effectiveness and adequacy of the Company’s risk management and internal control system.
CONCLUSION
The Board is satisfied with the adequacy and effectiveness of the Company’s risk management and internal control system.
The Board has received assurance from the Managing Director and the Executive Officer designated as Chief Financial
Officer that the Company’s risk management and internal control system, in all material aspects, is operating adequately and
effectively. For the financial year under review, there were no material control failures or adverse compliance events that have
directly resulted in any material loss to the Company.
Annual Report 2020
DIRECTORS’ RESPONSIBILITY STATEMENT

FOR THE AUDITED FINANCIAL STATEMENTS
The Directors are required by the Companies Act 2016 (CA) to prepare the financial statements for each financial year which
have been made out in accordance with the applicable Malaysian Financial Reporting Standards (MFRSs), the International
Financial Reporting Standards (IFRSs), the requirements of the CA and the MMLR of Bursa Securities.
The Directors are responsible to ensure that the financial statements of the Company are prepared with reasonable accuracy from
the accounting records so as to give a true and fair view of the state of affairs of the Company at the end of the financial year, and
of the results and cash flows of the Company for the financial year then ended.
In preparing the financial statements, the Directors have:
• adopted appropriate and relevant accounting policies and applied them consistently;
• made judgements and estimates that are reasonable and prudent; and
• prepared the annual audited financial statements on a going concern basis.
The Directors have overall responsibility for taking such steps necessary to safeguard the assets of the Company to prevent and
detect fraud and other irregularities.
Annual Report 2020
ADDITIONAL COMPLIANCE INFORMATION DISCLOSURES

1. MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
There were no material contracts entered into by the Company (not being contracts entered into the ordinary course of business)
involving Directors’ and major Shareholders’ interests which were still subsisting as at the end of the financial year under review
or which were entered into since the end of the previous financial year.
2. AUDIT AND NON-AUDIT FEES

The details of the audit and non-audit fees paid or payable for the financial year ended 29 February 2020 to the External Auditors
and a firm or corporation affiliated to the External Auditors are set out below:
RM’000
Audit Fees
- Statutory audit 190
- Assurance and compliance related services 345
Total 535
Non-Audit Fees
- Statement of Risk Management and Internal Control review 10
- Regulatory reporting review 30
Total 40
3. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

There were no proceeds raised from corporate proposals during the financial year.
4. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

At the Twenty-Second Annual General Meeting (“AGM”) held on Thursday, 20 June 2019, the Company obtained a
shareholders’ mandate to allow the Company to enter into recurrent related party transactions of a revenue or trading nature.
The disclosure of the recurrent related party transactions conducted during the financial year ended 29 February 2020 is
set out on pages 144 to 147 of the Annual Report.
FINANCIAL STATEMENTS
08
96 Directors’ Report
100 Independent Auditors’ Report
104 Statement of Financial Position
105 Statement of Profit or Loss and
Other Comprehensive Income
106 Statement of Changes in Equity
107 Statement of Cash Flows
109 Notes to the Financial Statements
171 Statement by Directors and Statutory Declaration
Annual Report 2020
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors have pleasure in submitting their report and the audited financial statements of the Company for the financial year
ended 29 February 2020.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the provision of easy payment schemes, personal financing schemes and issuance of
payment cards under the international brand names of Visa and MasterCard. The personal financing schemes and certain easy
payment schemes are based on Islamic principles.
RESULTS
RM’000
Profit for the financial year 292,046
In the opinion of the Directors, the results of operations of the Company during the financial year have not been substantially
affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
The dividends paid by the Company since the end of the previous financial year were as follows:
RM’000
In respect of the financial year ended 28 February 2019:
- Final single-tier dividend of 22.35 sen per ordinary share, paid on 18 July 2019 56,075
In respect of the financial year ended 29 February 2020:

- Interim single-tier dividend of 22.25 sen per ordinary share, paid on 7 November 2019 56,426
Total 112,501
The Directors propose a final single-tier dividend of 14.00 sen per share, amounting to approximately RM35,507,000 computed
based on the outstanding issued and paid-up capital held by the Company of 253,619,123 ordinary shares in respect of the
current financial year.
The proposed final dividend is subject to the approval by the shareholders at the forthcoming Annual General Meeting of
the Company and has not been included as liability in the financial statements. Upon approval by the shareholders, the
final dividend payment will be accounted for in equity as an appropriation of retained earnings in the financial year ending
28 February 2021.
ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and fully paid-up share capital of the Company was increased from 250,840,151 ordinary
shares to 253,619,123 ordinary shares by way of the issuance of 2,778,972 new ordinary shares pursuant to the conversion of
30,541,202 units of Irredeemable Convertible Unsecured Loan Stocks.
The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company.
There was no issuance of debentures during the financial year.

Annual Report 2020
ISSUE OF IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)

On 21 September 2017, the Company issued 432,000,000 units of 3-year, 3.5% ICULS amounting to RM432,000,000 for the
purpose of working capital.
The salient features of the ICULS are set out in Note 21 to the financial statements.
As at the end of the financial year, 18,563,472 units of ICULS remained outstanding.
SHARE OPTIONS
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the
Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the
Company. As at the end of the financial year, there were no unissued shares of the Company under options.
DIRECTORS
The Directors of the Company in office during the financial year and during the period from the end of the financial year to the
date of this report are:
Ng Eng Kiat
Yuro Kisaka (appointed on 20 June 2019)
Dato’ Md Kamal bin Ismaun
Tomokatsu Yoshitoshi
S Sunthara Moorthy A/L S Subramaniam
YBhg. Datuk Adinan bin Maning
Datin Khoo Pek Ling
Datin Yasmin Ahmad Merican
Rashidah binti Abu Bakar
Masaaki Mangetsu (appointed on 20 June 2019)
Lee Tyan Jen
Kenji Fujita (retired on 20 June 2019)
Tetsuro Takano (retired on 20 June 2019)
DIRECTORS’ INTERESTS
According to the Register of Directors Shareholdings, the interests of Directors in office at the end of the financial year in the
ordinary shares and ICULS of the Company were as follows:
Number of ordinary shares

At
1.3.2019/
Date of At
appointment Bought Sold 29.2.2020
Direct interest:
Ng Eng Kiat 21,321 – – 21,321
Yuro Kisaka 82,080 – – 82,080
Dato’ Md Kamal bin Ismaun 9,000 – – 9,000
Datin Yasmin Ahmad Merican 20,000 – – 20,000
Lee Tyan Jen 35,661 – – 35,661
Annual Report 2020
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS (Continued)
Number of ICULS
At At
1.3.2019 Bought Converted 29.2.2020
Direct interest:
Dato’ Md Kamal bin Ismaun 18,000 – – 18,000
Lee Tyan Jen 72,500 – – 72,500
None of the other directors in office at end of the financial year hold shares or had beneficial interest in the shares of the
Company or its related companies during or at the beginning and end of the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive
a benefit (other than a benefit included in the aggregate of remuneration received or due and receivable by directors or the
fixed salary of a full-time employee of the Company as disclosed in Note 25 to the financial statements) by reason of a contract
made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in
which the Director has a substantial financial interest.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby Directors of
the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body
corporate.
RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions under review except as disclosed in the financial statements
during the financial year.
OTHER STATUTORY INFORMATION

Before the financial statements of the Company were made out, the Directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for
doubtful debts, and had satisfied that all known bad debts had been written off and that adequate allowance had been
made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including the value
of current assets as shown in the accounting records of the Company had 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) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial
statements of the Company inadequate to any substantial extent; or
(ii) which would render the values attributed to current assets in the financial statements of the Company misleading; or
(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Company
misleading or inappropriate; or
(iv) not otherwise dealt with in this report or the financial statements of the Company which would render any amount stated
in the financial statements misleading.
Annual Report 2020
At the date of this report, there does not exist:
(i) any charge on the assets of the Company which has arisen since the end of the financial year which secures the liability
of any other person; or
(ii) any contingent liability of the Company which has arisen since the end of the financial year.
No contingent or other liability 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 affect the ability of the Company to meet its
obligations when they fall due.
In the opinion of the Directors:
(i) the results of the Company’s operations during the financial year were not substantially affected by any item, transaction
or event of a material and unusual nature; and
(ii) there has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction
or event of a material and unusual nature which is likely to affect substantially the results of the Company’s operations for
the financial year in which this report is made.
INDEMNITY AND INSURANCE COSTS

The Company maintains Directors’ and Officers’ liability insurance for purposes of Section 289 of the Companies Act 2016,
throughout the year, which provides appropriate insurance cover for the Directors of the Company. The amount of insurance
coverage and premium paid for Directors and Officers of the Company during the year amounted to RM10,000,000 and
RM28,700 respectively.
There were no indemnity given to, or insurance effected for auditors of the Company during the financial year.
HOLDING COMPANIES
The immediate and ultimate holding companies are AEON Financial Service Co., Ltd. and AEON Co., Ltd. respectively.
Both companies were incorporated in Japan and are listed on the Tokyo Stock Exchange.
AUDITORS’ REMUNERATION
The amount paid/payable as remuneration of the auditors for the financial year ended 29 February 2020 is as disclosed in
Note 25 to the financial statements.
SIGNIFICANT EVENT AFTER FINANCIAL REPORTING DATE

Significant event after financial reporting date is as disclosed in Note 38 to the financial statements.
AUDITORS
The auditors, Deloitte PLT, have indicated their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors,
NG ENG KIAT YURO KISAKA
Kuala Lumpur
5 May 2020
Annual Report 2020
INDEPENDENT AUDITORS’ REPORT

To the Members of AEON Credit Service (M) Berhad
(Incorporated in Malaysia)
REPORT ON THE AUDIT OF FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of AEON CREDIT SERVICE (M) BERHAD, which comprise the statement of financial
position of the Company as at 29 February 2020, and the statement of profit and loss and other comprehensive income,
statement of changes in equity and statement of cash flows of the Company for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, as set out on pages 104 to 170.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at
29 February 2020, and of its financial performance and its cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting 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 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’ Code of Ethics for
Professional Accountants (“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 the financial
statements of the Company for the current year. These matters were addressed in the context of our audit of the financial
statements of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Annual Report 2020
KEY AUDIT MATTERS (Continued)
Key Audit Matter Our audit performed and responses thereon

Impairment of financing receivables Our audit procedures included, among others:
As at February 2020, financing receivables stand at Evaluation of the design and implementation of key
RM9,704,121,000 (2019: RM8,105,779,000) representing controls over impairment of financing receivables, including
93.0% (2019: 93.6%) of total assets of the Company. the governance over the ECL methodology and model
MFRS 9 requires such financing receivables to be measured development.
using expected credit losses (ECL) model.
Involved financial risk specialists to;
The measurement of ECL is complex and requires the
application of significant judgement which includes the • assess whether the Company’s enhanced ECL model
identification of credit exposures with significant deterioration on financing receivables is in accordance with
in credit quality, assumptions used in the ECL models such MFRS 9. The assessment includes assessment of
as the expected future cash flows, time value of money, significant assumptions and considerations applied by the
forward-looking macroeconomic factors and probability- Company in the ECL model to address the requirements
weighted multiple scenarios. of MFRS 9 such as criteria for significant deterioration
in credit quality, expected future cash flows, time value
Refer to the significant accounting policy in Note 3 to the of money, forward-looking macroeconomic factors and
financial statements, the disclosure of financing receivables in probability-weighted multiple scenarios; independently
Note 9 to the financial statements and the disclosure of credit recompute the Company’s provision for impairment
risk in Note 33 to the financial statements. based on the Company’s enhanced ECL model against
the impairment of financing receivables recorded by the
Company; and
• perform an independent ECL assessment based on data

derived from the Company’s financing receivables and
compared the independent estimate developed against
the impairment of financing receivables recorded by the
Company.
Involved information technology specialists to test the inputs

into the enhanced ECL model developed to ensure accuracy
and completeness of inputs using computer assisted audit
techniques.
Annual Report 2020
INDEPENDENT AUDITORS’ REPORT

To the Members of AEON Credit Service (M) Berhad
(Incorporated in Malaysia)
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 the annual report but does not include the financial statements of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Company does not cover the other information and we do 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 other information and,
in doing so, consider whether the other information is materially inconsistent with the 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, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
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 a true
and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements 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 from material
misstatement, whether due to fraud or error.
In preparing the financial statements of the Company, the Directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going 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 our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these 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 that is 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, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Annual Report 2020
AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (Continued)

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
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 cast significant doubt on
the Company’s ability 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 represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant
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 to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the
financial statements of the Company for the current year and are therefore the key audit matter. We describe the matter in our
auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of 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.
DELOITTE PLT (LLP0010145-LCA)

AF 0080
Chartered Accountants
WONG KAR CHOON

Partner - 03153/08/2020 J
Chartered Accountant
5 May 2020
Annual Report 2020
STATEMENT OF FINANCIAL POSITION

As at 29 February 2020
2020 2019
Note RM’000 RM’000
ASSETS
Non-current Assets
Plant and equipment 5 141,161 118,676
Right-of-use assets 6 70,997 –
Investments 7 48,699 70,604
Deferred tax assets 8 213,801 153,916
Financing receivables 9 6,265,390 6,003,628
Total Non-current Assets 6,740,048 6,346,824
Current Assets
Financing receivables 9 3,438,731 2,102,151
Other receivables, deposits and prepayments 10 83,564 89,103
Amount owing by related companies 28 10,706 6,069
Derivative financial assets 11 28,810 19,178
Cash, bank balances and deposits 12 132,798 92,429
Total Current Assets 3,694,609 2,308,930
TOTAL ASSETS 10,434,657 8,655,754
EQUITY AND LIABILITIES

Capital and Reserves
Share capital 13 565,448 534,907
Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) equity 21 14,107 43,800
Hedging reserve 14 (115,870) (21,491)
Fair value reserve 15 27,571 37,528
Retained earnings 16 1,066,103 904,237
Equity attributable to ordinary equity holders of the Company 1,557,359 1,498,981

Perpetual notes and sukuk 17 200,000 376,000
Total Equity 1,757,359 1,874,981
Non-current Liabilities
Borrowings 18 5,597,516 5,616,006
ICULS liabilities 21 – 1,595
Lease liabilities 6 52,037 –
Total Non-current Liabilities 5,649,553 5,617,601
Current Liabilities
Borrowings 18 2,600,152 814,006
Trade payables 19 32,913 27,032
Other payables and accruals 20 204,348 168,962
Amount owing to immediate holding company 28 6,978 6,917
Amount owing to related companies 28 5,702 5,762
Derivative financial liabilities 11 132,577 105,495
ICULS liabilities 21 630 1,635
Lease liabilities 6 19,140 –
Tax liabilities 25,305 33,363
Total Current Liabilities 3,027,745 1,163,172
Total Liabilities 8,677,298 6,780,773
TOTAL EQUITY AND LIABILITIES 10,434,657 8,655,754
The accompanying notes form an integral part of the financial statements.

Annual Report 2020
STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME
For the Financial Year Ended 29 February 2020
2020 2019
Interest income, profit revenue and finance charges 1,404,372 1,190,369

Fee income 22 194,403 175,474
Revenue 1,598,775 1,365,843

Staff costs 23 (250,085) (224,013)
Depreciation of plant and equipment (45,353) (36,160)
Operating expenses (629,643) (563,879)
(Allowance)/Reversal of allowance for impairment
loss on financing receivables (103,952) 29,573
Other income 145,921 153,707
Profit from operations 715,663 725,071

Finance cost 24 (325,222) (252,880)
Profit before tax 25 390,441 472,191

Taxation 26 (98,395) (117,567)
Profit for the financial year 292,046 354,624
Other comprehensive income, net of tax

Item that may be reclassified subsequently to profit or loss:
Net changes in cash flow hedge (94,379) (11,509)
Item that will not be reclassified subsequently to profit or loss:

Net fair value changes on investments at fair value
through other comprehensive income (9,991) 37,528
Total other comprehensive income for the financial year (104,370) 26,019
Total comprehensive income for the year 187,676 380,643
Profit attributable to equity holders of the Company 292,046 354,624
Total comprehensive income attributable to equity

holders of the Company 187,676 380,643
Earnings per ordinary share attributable to owners

of the Company (sen)
Basic 27 107.48 133.55

Annual Report 2020
STATEMENT OF CHANGES IN EQUITY

Non-distributable Distributable
Perpetual
Share ICULS notes and Hedging Fair value Retained
capital equity sukuk reserve reserve earnings Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 March 2018 508,629 68,306 276,000 (9,982) – 1,014,550 1,857,503

Effect of change in accounting
policy due to adoption
of MFRS 9, net of tax – – – – 32,351 (344,527) (312,176)
At 1 March 2018, as restated 508,629 68,306 276,000 (9,982) 32,351 670,023 1,545,327
Cash flow hedge, net of tax – – – (11,509) – – (11,509)

Fair value through other
comprehensive income – – – – 5,177 – 5,177
Profit for the year – – – – – 354,624 354,624
Total comprehensive income

for the year – – – (11,509) 5,177 354,624 348,292
Conversion of ICULS 21 26,278 (24,397) – – – – 1,881
Deferred tax effects on ICULS 21 – (109) – – – – (109)
Issuance of perpetual notes
and sukuk 17 – – 200,000 – – – 200,000
Placement fee of issuance of
perpetual notes and sukuk – – – – – (1,030) (1,030)
Redemption of perpetual notes 17 – – (100,000) – – – (100,000)
Distribution on perpetual notes
and sukuk, net of tax – – – – – (13,659) (13,659)
Dividends 29 – – – – – (105,721) (105,721)
At 28 February 2019/
1 March 2019 534,907 43,800 376,000 (21,491) 37,528 904,237 1,874,981
Cash flow hedge, net of tax – – – (94,379) – – (94,379)

Fair value through other
comprehensive income – – – – (9,991) – (9,991)
Profit for the year – – – – – 292,046 292,046
Total comprehensive
income for the year – – – (94,379) (9,991) 292,046 187,676
Conversion of ICULS 21 30,541 (29,646) – – – – 895
Deferred tax effects on ICULS 21 – (47) – – – – (47)
Redemption of perpetual notes 17 – – (176,000) – – – (176,000)
Distribution on perpetual notes
and sukuk, net of tax – – – – – (17,645) (17,645)
Dividends 29 – – – – – (112,501) (112,501)
Transfer upon the disposal of
equity investment designated
at fair value through other
comprehensive income – – – – 34 (34) –
At 29 February 2020 565,448 14,107 200,000 (115,870) 27,571 1,066,103 1,757,359

Annual Report 2020
STATEMENT OF CASH FLOWS

2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 390,441 472,191
Adjustments for:
Interest income/profit revenue (2,043) (1,207)
Gain on disposal of plant and equipment (321) (142)
Finance costs 322,358 252,880
Interest expense on lease liabilities 2,864 –
Depreciation of plant and equipment 45,353 36,160
Depreciation of right-of-use assets 19,581 –
Impairment loss on financing receivables 450,313 308,372
Write-off of plant and equipment 411 372
Operating Profit Before Changes in Working Capital 1,228,957 1,068,626

Changes in working capital:
Financing receivables (2,048,655) (1,711,178)
Other receivables, deposits and prepayments 5,539 (36,488)
Amount owing by related companies (4,637) (4,993)
Trade payables 5,881 5,277
Other payables and accruals 28,424 40,937
Amount owing to immediate holding company 61 360
Amount owing to related companies (60) 3,537
Cash held in trust for customers (10,349) (9,632)
Cash held in trust for a related company 3,110 3,873
Cash Used In Operations (791,729) (639,681)

Tax paid (119,157) (108,364)
Net Cash Used In Operating Activities (910,886) (748,045)
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of plant and equipment (68,257) (62,935)
Proceeds from disposal of plant and equipment 329 143
Additions to investments – (2,855)
Proceeds from disposal of an investment 63 –
Interest received 2,043 1,207
Net Cash Used In Investing Activities (65,822) (64,440)
CASH FLOWS FROM FINANCING ACTIVITIES

Dividend paid to equity holders of the Company (112,501) (105,721)
Proceeds from bank borrowings 9,898,129 4,615,640
Repayment of bank borrowings (8,262,215) (3,489,930)
Coupon payment of ICULS (1,698) (2,144)
Distribution paid to perpetual notes and sukuk holders (23,217) (17,973)
Repayment of lease liabilities (22,265) –
Redemption of perpetual notes (176,000) (100,000)
Issuance of perpetual notes and sukuk – 200,000
Issuance expenses relating to perpetual notes and sukuk – (1,030)
Increase in deposit held in trust account (63) (127)
Finance costs paid (315,403) (246,556)
Net Cash Generated From Financing Activities 984,767 852,159

Annual Report 2020
STATEMENT OF CASH FLOWS

For the Financial Year Ended 29 February 2020 (Continued)
2020 2019
NET INCREASE IN CASH AND CASH EQUIVALENTS 8,059 39,674
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 58,429 18,755
CASH AND CASH EQUIVALENTS AT END OF THE YEAR (i) 66,488 58,429
(i) Cash and cash equivalents
Cash and cash equivalents included in the statement of cash flows comprise the following statement of financial position
amounts:
2020 2019
Cash and bank balances 12 114,865 83,112

Deposits placed with licensed banks 12 17,933 9,317
132,798 92,429
Bank overdrafts 18 (44,298) (19,290)
Cash held in trust for a related company 12 (1,841) (4,951)
Cash held in trust for customers 12 (19,981) (9,632)
Deposit held in trust account 12 (190) (127)
66,488 58,429
(ii) Reconciliation of liabilities arising from financing activities
The table below details changes in the Company’s liabilities arising from financing activities. Liabilities arising from
financing activities are those for which cash flows were or future cash flows will be, classified in the Company’s statement
of cash flows as cash flows from financing activities:
Borrowings (Note 18)

2020 2019
RM’000 RM’000
At beginning of year 6,430,012 5,554,119

Drawdowns/(Repayments) of bank overdraft 25,008 (36,812)
Proceeds from bank borrowings 9,898,129 4,615,640
Repayments of bank borrowings (8,262,215) (3,489,930)
Foreign exchange movement 106,734 (213,005)
At end of year 8,197,668 6,430,012
Included in the proceeds from bank borrowings and repayment of bank borrowings are the issuance of Islamic
commercial paper of RM5,540,000,000 (2019: RM200,000,000) and redemption of Islamic commercial paper of
RM5,030,000,000 (2019: RM50,000,000) respectively, which are on short term and clean basis.

Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market
of Bursa Malaysia Securities Berhad.
The Company is principally engaged in the provision of easy payment schemes, personal financing schemes and issuance
of payment cards under the international brand names of Visa and MasterCard. The personal financing schemes and
certain easy payment schemes are based on Islamic principles.
The registered office of the Company is located at 12th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim,
Seksyen 13, 46200 Petaling Jaya, Selangor, Malaysia.
The principal place of business of the Company is located at Level 18, UOA Corporate Tower, Avenue 10, The Vertical,
Bangsar South City, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Wilayah Persekutuan, Malaysia.
The immediate and ultimate holding companies are AEON Financial Service Co., Ltd. and AEON Co., Ltd. respectively.
Both companies were incorporated in Japan and are listed on the Tokyo Stock Exchange.
The financial statements were approved and authorised for issue in accordance with a Board of Directors’ resolution dated
5 May 2020.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Statement of compliance
The financial statements of the Company have been prepared in accordance with Malaysian Financial Reporting Standards
(“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All
financial information presented in RM has been rounded to the nearest thousand (RM’000 or ’000), unless otherwise
stated.
Adoption of New MFRS, Issues Committee (“IC”) Interpretation and Amendments to MFRSs
In the current financial year, the Company adopted all the new MFRS, Amendment to MFRS and IC Interpretations issued
by Malaysian Accounting Standards Board (“MASB”) that are relevant to its operations and effective for financial periods
commencing on or after 1 March 2019.
MFRS 16 Leases
IC Interpretation 23 Uncertainty over Income Tax Treatments
Amendments to MFRS 9 Prepayment Features with Negative Compensation
Amendments to MFRSs Annual Improvements to MFRSs 2015 - 2017
The Company has adopted MFRS 16 for the first time in the 2020 financial statements, which resulted in changes
in accounting policies, as described in Note 3. The Company has applied MFRS 16 with date of initial application of
1 March 2019 by applying the modified retrospective method. The impact of adoption of MFRS 16 is set out in Note 37.
The adoption of other Amendments to MFRS and IC interpretation have not had material impact on the amounts reported
in the financial statements of the Company in the current financial year and previous financial years.
Annual Report 2020

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (Continued)
New and Revised Standards and Amendments in issue but not yet effective
At the date of authorisation for issue of these financial statements, the relevant Amendments to MFRSs, which were in
issue but not yet effective and not early adopted by the Company are as listed below:
Effective for annual periods beginning on or after 1 January 2020
• Amendments to MFRS 3 Business Combination – Definition of a Business

• Amendments to MFRS 101 Presentation of Financial Statements and MFRS 108 Accounting Policies, Changes in
Accounting Estimates and Errors – Definition of Material
• Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement
and MFRS 7 Financial Instruments: Disclosures – Interest Rate Benchmark Reform
• Amendments to References to the Conceptual Framework in MFRS Standards
Effective for annual periods beginning on or after 1 January 2022
• Amendments to MFRS 101 Classification of Liabilities as Current or Non-current
The Company will adopt the above Amendments when they become effective and that the adoption of these Amendments
will have no material impact on the financial statements of the Company in the period of initial application.
3. SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared under the historical cost convention unless otherwise stated
in the significant accounting policies below. Historical cost is generally based on the fair value of the consideration given
in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing
the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial
statements is determined on such a basis, except for any share-based payment transactions that are within the scope of
MFRS 2 Share-based Payment, leasing transactions that are within the scope of MFRS 16 Leases and measurements
that have some similarities to fair value but are not fair value, such as net realisable value in MFRS 102 Inventories or
value-in-use in MFRS 136 Impairment of Assets.
Annual Report 2020
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement in its entirely, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
assess at the measurement date;
• Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly; and
• Level 3 are unobservable inputs for the asset or liability.
The principal accounting policies are set out below:
Revenue recognition
Revenue is recognised when or as a performance obligation in the contract with a customer is satisfied, i.e. when the
“control” of the goods or services underlying the particular performance obligation is transferred to the customer. A
performance obligation is a promise to transfer a distinct goods or services (or a series of distinct goods or services that are
substantially the same and that have the same pattern of transfer) to the customer that is explicitly stated in the contract
and implied in the Company’s customary business practices.
(i) Interest income/profit revenue and finance charges from easy payment schemes, personal financing schemes and
credit card business
Interest income/profit revenue and finance charges from easy payment schemes, personal financing schemes
and credit card business are recognised in profit or loss using the Effective Interest/Profit Rate (“EIR”) method.
EIR is a method of calculating the amortised cost of financing receivables and of allocating the corresponding
interest income/profit revenue and finance charges over the relevant year. EIR is the rate that exactly discounts the
estimated future cash receipts through the expected life of the financing receivable or, when appropriate, a shorter
year to the net carrying amount of the financing receivables.
(ii) Fee income from easy payment schemes, personal financing schemes, credit card business and extended
warranty program
Fee income from easy payment schemes and personal financing schemes comprise late payment/penalty charges,
processing fees and credit recovery charges. Fee income from credit card business comprises credit recovery
charges, cash advance fees, transaction charges, annual fees, merchant commission and Visa/MasterCard
interchange fees. Fee income from extended warranty program comprise commission earned for referral of extended
warranty program.
Fee income is generally recognised when the relevant performance obligation has been fulfilled.
Annual Report 2020

Employee benefits
(a) Short-term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the
associated services are rendered by employees of the Company. Short-term accumulating compensated absences
for paid annual leave are recognised when services are rendered by employees that increase their entitlement
to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.
(b) Defined contribution plan
The Company is required by law to make monthly contributions to the Employees Provident Fund (“EPF”), a statutory
defined contribution plan, for all its eligible employees based on certain prescribed rates of the employees’ salaries.
The Company’s contributions to EPF are disclosed separately. The employees’ contributions to EPF are included in
staff costs.
Foreign currency transactions
The financial statements of the Company are presented in Ringgit Malaysia, the currency of the primary economic
environment in which the Company operates (its functional currency).
In preparing the financial statements of the Company, transactions in currencies other than the Company’s functional
currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end
of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the
end of the reporting period.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included
in profit or loss for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are
included in profit or loss for the year except for differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that
gain or loss is also recognised directly in equity.
Annual Report 2020

Income tax
Income tax expense comprises current and deferred tax.
Current tax
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured
using the tax rates that have been enacted or substantively enacted at the end of the reporting period. Current tax for
current and prior years is recognised as a liability (or asset) to the extent that it is unpaid (or recoverable).
Deferred tax
Deferred tax is recognised using the liability method on temporary differences at the end of the reporting period between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax
liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible
temporary differences, unused tax losses and unused tax credits to the extent that it is probable that sufficient future
taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax
credits can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability
settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities. Deferred tax is charged or credited to profit or loss, except when it arises from a transaction which is recognised
in other comprehensive income or directly in equity, in which case the deferred tax is also charged or credited directly in
other comprehensive income or to equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends
to settle its current tax assets and liabilities on a net basis.
Annual Report 2020

Earnings per ordinary share
The Company presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to equity holders of the Company, less distribution on
perpetual notes and perpetual sukuk, by the weighted average number of ordinary shares outstanding. Ordinary shares
that would be issued upon conversion of a mandatorily convertible instrument are included in the weighted average
number of ordinary shares from the date of issuance of the instrument.
Leases
Policies applicable from 1 March 2019
(i) Definition of a lease
A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Company assesses whether:
• the contract involves the use of an identified asset that may be specified explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has
a substantive substitution right, then the asset is not identified;
• the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout
the period of use; and
• the customer has the right to direct the use of the asset. The customer has this right when it has the
decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare
cases where the decision about how and for what purpose the asset is used is predetermined, the customer
has the right to direct the use of the asset if either the customer has the right to operate the asset; or the
customer designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone
prices.
Annual Report 2020

Leases (Continued)
(ii) Recognition and initial measurement
Company as a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises the initial 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
to dismantle 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 not paid at the commencement
date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company
uses its incremental borrowing rate.
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 the index 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 the option; and
• Payments of penalties for early termination of a lease, if the lease term reflects the exercise of an option to
terminate the lease unless the Company is reasonably certain not to terminate early.
The Company excludes variable lease payments that are linked to future performance or usage of the 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 right-of-use assets and lease liabilities for short-term leases 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 operating expense on a straight-line basis over the lease term.
Annual Report 2020

(iii) Subsequent measurement
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives
of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured 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.
Policies applicable prior to 1 March 2019
Operating leases – The Company as a lessee
Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease.
The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease
term on the straight-line basis.
Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly
attributable to bringing the asset to working condition for its intended use, and the cost of dismantling and removing
the items and restoring the site on which they are located. Purchased software that is integral to the functionality of
the related equipment is capitalised as part of that equipment.
When significant parts of an item of plant and equipment have different useful lives, they are accounted for as
separate items (major components) of plant and equipment.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is
recognised in profit or loss.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of
the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repair and
maintenance costs are charged to profit or loss during the financial period in which they are incurred.
Annual Report 2020

Plant and equipment (Continued)
(ii) Depreciation
Depreciation is calculated based on the cost of an asset less its residual value. Significant components of individual
assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that
component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component
of an item of plant and equipment. Plant and equipment under construction are not depreciated until the assets are
ready for their intended use.
The principal annual rates are as follows:
Office equipment 4 years

Computer equipment and software 2 - 5 years
Motor vehicles 5 years
Furniture and fittings 2 - 4 years
Renovation 4 - 5 years
The depreciable amount is determined after deducting the residual value.
Depreciation methods, useful lives and residual values are reassessed at end of each reporting period.
Impairment of non-financial assets
The carrying amounts of assets are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. An impairment loss is
recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Annual Report 2020

Financial assets
(i) Initial recognition and measurement
Financial assets are recognised in the statement of financial position when, and only when, the Company becomes
a party to the contractual provisions of the financial instruments.
A financial asset is initially measured at fair value plus or minus, for an item not measured at fair value through profit
or loss, transaction costs that are directly attributable to its acquisition or issuance.
(ii) Classification and subsequent measurement
The Company has applied MFRS 9 and classifies its financial assets in the following measurement categories
– amortised cost, fair value through other comprehensive income (“FVTOCI”) or fair value through profit or loss
(“FVTPL”).
The Company determines the classification of financial assets at initial recognition. The financial assets are not
subsequently reclassified 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.
(a) Amortised cost
Financial assets are measured at amortised cost if the financial assets are held within a business model whose
objective is to collect contractual cash flows and its contractual terms give rise to specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial
recognition, these financial assets are measured at amortised cost using the EIR method. Interest income/
profit revenue and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
(b) FVTOCI
The Company designated all investments in equity instruments that are not held for trading as financial assets
measured at FVTOCI on initial recognition. Investments in equity instruments are initially measured at fair
value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from
changes in fair value recognised in other comprehensive income and accumulated in the fair value reserve.
The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments; instead,
it is transferred to retained earnings.
Dividends on equity instruments are recognised in profit or loss when the Company’s right’s to receive payment
is established.
(c) FVTPL
All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at
FVTPL. This includes derivative financial assets. On initial recognition, the Company may irrevocably designate
a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVTOCI as
at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets categorised as FVTPL are subsequently measured at their fair value with gains or losses
recognised in the profit or loss.
Annual Report 2020

Financial assets (Continued)
(iii) Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset
to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership
and continues to control the transferred asset, the Company recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards
of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss. On derecognition
of an investment in an equity instrument which the Company has elected on initial recognition to measure
at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not
reclassified to profit or loss, but is transferred to retained earnings.
Impairment of financial assets
Under MFRS 9, impairment model requires the recognition of expected credit loss (“ECL”) for all financial assets, except
for financial assets classified or designated as FVTPL and equity instruments classified under FVTOCI, which are not
subject to impairment assessment.
The Company assesses ECL associated with its debt instrument assets carried at amortised cost. The Company
recognises a loss allowance for such losses at the end of each reporting period. The measurement of ECL reflects an
unbiased amount that is determined by reasonable as well as supportable information that is available without undue
cost or effort at the end of the reporting period about past events and current conditions.
Allowance for impairment will be made based on the following three-stage approach which reflects the change in credit
quality of the financial instrument since initial recognition:
(i) Stage 1: 12-month ECL - not credit-impaired
For exposures where there has not been a significant increase in credit risk since initial recognition and that are
not credit-impaired upon origination, the ECL associated with the probability of default events occurring within next
12 months will be recognised.
(ii) Stage 2: Lifetime ECL - not credit-impaired
For exposures where there has been a significant increase in credit risk since initial recognition but that are not
credit-impaired, a lifetime ECL will be recognised.
(iii) Stage 3: Lifetime ECL - credit-impaired
Financial assets are assessed as credit-impaired when one or more events that have detrimental impact on the
estimated future cash flows of that asset have occurred. For financial assets that are credit-impaired, a lifetime ECL
will be recognised.
Annual Report 2020

Impairment of financial assets (Continued)
The measurement of ECL is a function of the probability of default (“PD”), loss given default (“LGD”) (i.e. the magnitude
of the loss if there is a default) and the exposure at default (“EAD”). The assessment of the PD and LGD are based on
the Company’s historical experience and informed credit assessment with consideration of forward looking information
described below.
As for the EAD, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date; for
financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any
additional amounts expected to be drawn down in the future by default date determined based on historical trend, the
Company’s understanding of the specific future financing needs of the customers, and other relevant forward-looking
information.
In the measurement of ECL, forward-looking adjustment is in accordance with the expected future macroeconomic
conditions, including combination of statistical analysis and expert judgements based on the availability of detailed
information. In addition, key macroeconomic variables encompassed in ECL measurement include probability-weighted
scenarios based on available forecasts.
Significant increase in credit risk
At the end of each reporting period, the Company assesses whether there has been a significant increase in credit risk
for exposures since initial recognition to determine whether the exposure is subject to 12-month ECL or lifetime ECL.
This is performed by comparing the risk of default occurring over the remaining expected life from the reporting date and
the date of initial recognition. When determining whether the risk of default has increased significantly since initial
recognition, the Company considers both quantitative information and analysis based on the Company’s historical
experience.
The Company assesses whether the credit risk on a financial asset has increased significantly on an individual or collective
basis. For the purposes of a collective evaluation of impairment, financial assets are grouped on a basis of shared credit
risk characteristics, taking into account the collection mode, disbursement period and other relevant factors.
If, in a subsequent period, the asset quality improves and also reverses any previously assessed significant increase in
credit risk since origination, then the loss allowance for that financial asset reverts from lifetime ECL to 12-month ECL.
The Company determines whether a significant increase in credit risk has occurred based on number of days past due
since the earliest elapsed due date in respect of which full payment has not been received. Due dates are determined
without considering any grace period that might be available to the borrower. The Company presumes that the credit risk
of a borrower has increased significantly since initial recognition when contractual payment are more than 30 days past
due.
Annual Report 2020

Credit impaired (default)
At each reporting date, the Company assesses whether financial assets 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 on the financial assets have occurred.
The Company considers a financial asset to be in default when the principal or interest/profit or both the financing is past
due for more than 90 days.
Forward-looking information
Forward-looking information considered includes the future prospects of the industries in which the Company’s customers
operate, obtained from reports of economic expert, financial analysts, governmental bodies, relevant think-tanks and other
similar organisations, as well as consideration of various external sources of actual and forecast economic information that
relate to the Company’s core operations.
Write-offs
The Company write-offs a financial asset when there is information indicating that the customer is in severe financial
difficulty and there is no realistic prospect of recovery. Financial assets written off may still be subject to enforcement
activities under the Company’s recovery procedures, taking into account legal advice where appropriate. Any recoveries
made are recognised in profit or loss.
Financial liabilities
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another
enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.
Financial liabilities are classified as either financial liabilities at “FVTPL” or “other financial liabilities”.
Other financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost using the EIR method.
The EIR method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over
the relevant period. The EIR is the rate that exactly discounts estimated future cash payments through the expected life of
the financial liability, or, where appropriate, a shorter period.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the
recognition of a new liability, and the differences in the respective carrying amount is recognised in profit or loss.
Annual Report 2020

Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
The Company subsequently measure all equity investments at fair value. Where the Company’s management has made an
irrevocable election to present fair value gains and losses on equity investments in other comprehensive income, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss as other income when the Company’s right to
receive payments is established.
(a) Perpetual notes
Perpetual notes are classified as equity when there is no contractual obligation to redeem the instrument.
Distributions on perpetual notes are recognised in equity in the year in which they are paid. The transaction costs
of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise
only those incremental external costs directly attributable to the equity transaction which would otherwise have
been avoided.
(b) Perpetual sukuk
Perpetual sukuk is classified as equity when there is no contractual obligation to redeem the instrument.
Distributions on perpetual sukuk are recognised in equity in the year in which they are paid. The transaction costs
of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise
only those incremental external costs directly attributable to the equity transaction which would otherwise have
been avoided.
(c) Share capital
Ordinary shares are classified as equity instruments. Costs directly attributable to equity transactions are accounted
for as a deduction, net of tax, from equity.
Distributions to holders of ordinary shares are debited directly to equity and interim dividends declared on or before
the end of the reporting date are recognised as liabilities. Final dividends are recognised upon the approval of
shareholders in a general meeting.
Annual Report 2020

Irredeemable Convertible Unsecured Loan Stocks (“ICULS”)
The ICULS are regarded as compound instruments, consisting of a liability component and an equity component. The
component of ICULS that exhibits characteristics of a liability is recognised as a financial liability in the statement of
financial position.
The fair value of the liability component is determined by discounting the future contractual cash flows of principal and
interest payments at the prevailing market rate for equivalent non-convertible loan stocks. This amount is carried as liability
on the amortised cost basis until extinguished on conversion or maturity of the instruments.
The interests on ICULS are recognised as finance cost in the profit or loss using the EIR method.
The fair value of the equity component represented by the conversion option is determined by deducting fair value of the
liability component from the notional amount of the loan stocks and is included in equity.
Derivative instruments
The Company enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate
risks, including foreign exchange forward contracts, interest rate swaps and cross currency swaps.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or
loss immediately unless the derivative is designated as an effective hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
Hedge accounting
At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and
the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging
instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk,
which is when the hedging relationships meet all of the following hedge effectiveness requirements:
• there is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the
Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedge that
quantity of hedged item.
Annual Report 2020

Cash flow hedge
A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable in a particular risk associated
with a recognised asset or liability or a highly probable forecast transaction and could affect the profit or loss. The effective
portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify
as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of hedging
reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss.
Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit
or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the hedge item
is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income is removed from
equity and included in the initial amount of the asset or liability. However, loss recognised in other comprehensive income
that will not be recovered in one or more future periods is reclassified from equity into profit or loss.
Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated or
exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the hedge
designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging instrument
remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, any
related cumulative gain or loss recognised in other comprehensive income on the hedging instrument is reclassified from
equity into profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged
or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial
liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss.
Cash and cash equivalents
The Company adopts the indirect method in the preparation of the statement of cash flows.
Cash and cash equivalents comprise cash and bank balances, deposits placed with licensed banks and short-term highly
liquid investments which are subject to an insignificant risk of changes in value. For the purposes of the statement of cash
flows, cash and cash equivalents are presented net of bank overdrafts, cash held in trust of a related party and customers.
Provisions
Provisions are made when the Company has a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount
of the obligation can be made. Provisions are measured at the Company’s best estimate of the amount required to settle
the obligation at the end of the reporting period, and are discounted to present value where the effect is material.
At the end of the reporting period, provisions are reviewed and adjusted to reflect the current best estimate. Provisions are
reversed if it is no longer probable that the Company will be required to settle the obligation.
Annual Report 2020
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgement in applying the Company’s accounting policies
In the process of applying the Company’s accounting policies, which are described in Note 3, management is of the
opinion that there are no instances of application of judgement which are expected to have a significant effect on the
amounts recognised in the financial statements other than as disclosed in Note 26(ii).
Key sources of estimation uncertainty
Management believes that there are no key assumptions made concerning the future, and other key sources of
estimation uncertainty at the end of each reporting period, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year other than as follows:
(i) Impairment loss on financing receivables (Note 9) - measurement of impairment losses under MFRS 9 requires
judgement. The impairment losses computed based on ECL models are outputs of complex models with a number of
underlying assumptions regarding the choice of variable inputs and their interdependencies. A number of significant
judgements are also required in applying the accounting requirements for measuring impairment losses, such
as determining criteria for significant increase in credit risk, choosing the appropriate models, determining the
suitability of forward-looking information and the number of probability weighting outcome scenario.
(ii) Deferred tax assets (Note 8) - the Company assesses at the end of the reporting period whether if there is probable
and sufficient future taxable profits will be available against which the deductible temporary differences can be
utilised. Significant management judgement is required to determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and level of future taxable profits together with future tax planning
strategies.
(iii) Fair value estimation of financial instruments (Note 7 and Note 11) - The fair value of financial instruments
measured at fair value are determined using a variety of valuation techniques. The Company generally uses widely
recognised valuation models with market observable inputs, judgement is required where market observable data
are not available. Such judgement normally incorporate assumptions that other market participants would use in
their valuations, including assumptions about interest rate yield curves, exchange rates, volatilities, discount rates,
growth rates and cash flow projections.
Annual Report 2020

5. PLANT AND EQUIPMENT
Computer
equipment Furniture Capital
Office and Motor and work-in-
equipment software vehicles fittings Renovation progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 March 2018 6,004 162,628 3,181 6,258 45,965 9,162 233,198
Additions 1,143 20,688 579 6,127 2,726 31,672 62,935
Disposals (26) (6) (355) – – – (387)
Write-off (1,172) (25,339) – (220) (4,061) – (30,792)
Reclassification 557 30,860 – 3,412 3,379 (38,208) –
1 March 2019 6,506 188,831 3,405 15,577 48,009 2,626 264,954
Additions 1,105 28,736 – 365 273 37,778 68,257
Disposals (2) – (911) – – – (913)
Write-off (295) (979) – (406) (1,165) – (2,845)
Reclassification 246 15,170 – 775 7,136 (23,327) –
At 29 February 2020 7,560 231,758 2,494 16,311 54,253 17,077 329,453
Accumulated Depreciation
At 1 March 2018 4,175 115,230 2,339 2,453 16,727 – 140,924
Charge for the year 968 20,959 513 4,179 9,541 – 36,160
Disposals (25) (6) (355) – – – (386)
Write-off (1,128) (25,256) – (208) (3,828) – (30,420)
Reclassification (86) – – (454) 540 – –
1 March 2019 3,904 110,927 2,497 5,970 22,980 – 146,278
Charge for the year 1,126 28,381 380 5,834 9,632 – 45,353
Disposals (1) – (904) – – – (905)
Write-off (253) (793) – (332) (1,056) – (2,434)
Reclassification (25) – – (131) 156 – –
At 29 February 2020 4,751 138,515 1,973 11,341 31,712 – 188,292
Carrying amounts
At 28 February 2019 2,602 77,904 908 9,607 25,029 2,626 118,676
At 29 February 2020 2,809 93,243 521 4,970 22,541 17,077 141,161

Annual Report 2020
6. RIGHT-OF-USE ASSETS/LEASE LIABILITIES

Computer
Buildings equipment Total
RM’000 RM’000 RM’000
Carrying amounts
At 1 March 2019 – – –
Effect of adoption of MFRS 16 67,550 – 67,550
At 1 March 2019, as restated 67,550 – 67,550

Additions 9,231 13,797 23,028
Depreciation charge for the year (19,347) (234) (19,581)
At 29 February 2020 57,434 13,563 70,997
The Company leases several assets including buildings and computer equipment. The lease terms range from one to six
years.
The lease liabilities component is analysed as follows:
2020
RM’000
Non-current 52,037
Current 19,140
71,177
The Company does not face a significant liquidity risk with regard to its lease liabilities.
2020
RM’000
Amount recognised in profit or loss

Depreciation of right-of-use assets 19,581
Interest expense on lease liabilities 2,864
Expenses relating to short-term leases 5,014
Expenses relating to leases of low value assets 6,078
Annual Report 2020

7. INVESTMENTS
2020 2019
RM’000 RM’000
Fair value through other comprehensive income

Equity ownership in foreign corporations:
Unquoted shares (Note 34) 48,699 70,604
Details of the investments are as follows:
Effective
equity interest
Country of 2020 2019
Name of Company incorporation Principal activities % %
AEON Credit Service Philippines Provision of financial services 5 10

(Philippines) Inc. (“ACSP”)
AEON Credit Service India Provision of non-banking 7 7

India Private Limited (“ACSI”) financial services
PT. AEON Credit Service Indonesia Provision of financial services 5 5

Indonesia (“ACSID”)
AEON Credit Service Systems Philippines Provision of information – 3

(Philippines) Inc. (“ACSS”) technology services
The Company designated these investments as FVTOCI because it does not have influence over their activities and
distribution policies. The Company intends to hold its interest for long-term strategic purposes.
During the year, the Company converted all of its 209,000 ACSP’s preference shares of PHP1,000 each held into
209,000 ordinary shares with par value of PHP1,000 each. Subsequently, ACSP has also increased its authorised
and paid up share capital from PHP500,000,000 to PHP3,500,000,000 following a shareholding restructuring.
Consequently, the effective equity interest of the Company decreased from 10% to 5%.
On 1 August 2019, the Company sold its shares in ACSS for a cash consideration of PHP753,850, equivalent to
RM63,000. Prior to the disposal, the fair value of investment was RM854,000 and a fair value loss of RM791,000 was
recognised in fair value reserve. The net loss of RM34,000 on disposal was recognised in equity for the financial year.
Annual Report 2020
8. DEFERRED TAX ASSETS

Deferred tax assets and liabilities are in respect of the tax effect of the following:
2020 2019
RM’000 RM’000
Plant and equipment (7,059) (3,899)

Hedging reserve 36,585 6,780
Impairment loss on financing receivables 131,192 118,020
Recognition of interest income/profit revenue 42,086 36,512
Provision for bonus and others 11,160 8,301
ICULS 6 53
Investments – (11,851)
Leases (169) –
Net deferred tax assets 213,801 153,916
Movement in temporary differences during the year
Adjustments At Recognised Recognised

At on initial 1 March in profit in other Recognised At
1 March application 2018, or loss comprehensive in ICULS 28 February
2018 of MFRS 9 restated (Note 26) income equity 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Plant and equipment (2,421) – (2,421) (1,478) – – (3,899)

Hedging reserve 3,145 – 3,145 – 3,635 – 6,780
Impairment loss on
financing receivables 11,863 108,080 119,943 (1,923) – – 118,020
Recognition of interest
income/profit revenue 32,121 – 32,121 4,391 – – 36,512
Provision for bonus
and others 6,943 – 6,943 1,358 – – 8,301
ICULS 162 – 162 – – (109) 53
Investments – (10,216) (10,216) – (1,635) – (11,851)
51,813 97,864 149,677 2,348 2,000 (109) 153,916

Annual Report 2020

8. DEFERRED TAX ASSETS (Continued)
Movement in temporary differences during the year (Continued)
Recognised Recognised
At in profit in other Recognised At
1 March or loss comprehensive in ICULS 29 February
2019 (Note 26) income equity 2020
RM’000 RM’000 RM’000 RM’000 RM’000
Plant and equipment (3,899) (3,160) – – (7,059)

Hedging reserve 6,780 – 29,805 – 36,585
Impairment loss on
financing receivables 118,020 13,172 – – 131,192
Recognition of interest
income/profit revenue 36,512 5,574 – – 42,086
Provision for bonus and others 8,301 2,859 – – 11,160
ICULS 53 – – (47) 6
Investments (11,851) – 11,851 – –
Leases – (169) – – (169)
153,916 18,276 41,656 (47) 213,801
9. FINANCING RECEIVABLES
2020 2019
RM’000 RM’000
Total gross financing receivables 13,968,436 11,706,836

Less: Unearned carrying charges (3,573,780) (3,014,474)
10,394,656 8,692,362
Less: Allowance for impairment loss (690,535) (586,583)
9,704,121 8,105,779
Less: Non-current financing receivables (6,265,390) (6,003,628)
Current financing receivables 3,438,731 2,102,151

Annual Report 2020
9. FINANCING RECEIVABLES (Continued)

Movements in allowance for impairment which reflects the ECL model on impairment are as follows:
Stage 1 Stage 2 Stage 3 Total

RM’000 RM’000 RM’000 RM’000
At 1 March 2018 195,438 157,713 263,005 616,156

- Transfers to Stage 1 43,267 (37,788) (5,479) –
- Transfers to Stage 2 (10,818) 17,065 (6,247) –
- Transfers to Stage 3 (2,638) (17,122) 19,760 –
29,811 (37,845) 8,034 –
Net measurement of allowances (89,680) 38,431 385,419 334,170

Written off – – (337,945) (337,945)
New financial assets originated 92,521 24,913 46,027 163,461
Financial assets derecognised (25,204) (42,581) (121,474) (189,259)
At 28 February 2019/1 March 2019 202,886 140,631 243,066 586,583

- Transfers to Stage 1 15,610 (10,566) (5,044) –
- Transfers to Stage 2 (30,560) 46,595 (16,035) –
- Transfers to Stage 3 (5,975) (5,659) 11,634 –
(20,925) 30,370 (9,445) –
Net measurement of allowances (3,160) 15 457,156 454,011

Changes to models/risk parameters (5,466) 17,303 (49,509) (37,672)
Written off – – (346,361) (346,361)
New financial assets originated 123,375 38,654 53,465 215,494
Financial assets derecognised (31,630) (42,980) (106,910) (181,520)
At 29 February 2020 265,080 183,993 241,462 690,535
Included in gross financing receivables are:
(i) An amount of RM9,073,145,000 (2019: RM7,038,204,000) relating to the Company’s easy payment and personal
financing schemes based on Islamic principles; and
(ii) An amount of RM9,278,000 (2019: RM6,343,000) owing by related companies which is subject to normal trade
terms.
Annual Report 2020

10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
2020 2019
RM’000 RM’000
Other receivables 25,899 38,233

Deposits 8,335 7,434
Prepayments 49,330 43,436
83,564 89,103
11. DERIVATIVE FINANCIAL ASSETS/LIABILITIES

2020 2019
Notional Assets/ Notional Assets/
value (Liabilities) value (Liabilities)
RM’000 RM’000 RM’000 RM’000
Derivatives used for hedging

- Cross currency swaps 280,078 28,810 270,222 19,178
- Cross currency swaps 3,225,789 (132,577) 2,155,784 (105,495)
Cross currency swaps are used to manage the foreign currency and interest rate exposures arising from borrowings
denominated in foreign currency.
12. CASH, BANK BALANCES AND DEPOSITS

2020 2019
RM’000 RM’000
Cash and bank balances 114,865 83,112

Deposits placed with licensed banks 17,933 9,317
132,798 92,429
Included in cash, bank balances and deposits are the following:
2020 2019
RM’000 RM’000
Cash held in trust for a related company in relation to a trust fund management
for a loyalty points programme by the Company 1,841 4,951
Cash held in trust for customers in relation to a trust fund for Electronic money
(“E-money”) 19,981 9,632
Deposit held in trust account with licensed banks 190 127
22,012 14,710
Annual Report 2020
13. SHARE CAPITAL

Number of shares Amount
2020 2019 2020 2019

’000 ’000 RM’000 RM’000
Issued and fully paid:
At 1 March 250,840 248,449 534,907 508,629
Conversion of ICULS (Note 21) 2,779 2,391 30,541 26,278
At 29/28 February 253,619 250,840 565,448 534,907
14. HEDGING RESERVE

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges
related to borrowings denominated in foreign currency.
15. FAIR VALUE RESERVE

The fair value reserve comprises the cumulative net change in the fair value of equity investment designated at FVTOCI
until the investments are derecognised or impaired.
16. RETAINED EARNINGS

The Company is currently under the single-tier income tax system in accordance with Finance Act, 2007 and accordingly,
the entire retained earnings of the Company is available for distribution under the single-tier income tax system.
17. PERPETUAL NOTES AND SUKUK

2020 2019
RM’000 RM’000
Perpetual notes 100,000 146,000

Perpetual sukuk 100,000 230,000
200,000 376,000
(a) Perpetual notes
On 20 November 2013 and 27 November 2013, the Company issued unrated subordinated perpetual notes
(“perpetual notes”) with nominal value of RM14,750,000 and RM85,250,000 respectively under a perpetual
private debt securities programme of up to RM400,000,000 in nominal value. On 21 November 2018 and
27 November 2018, upon obtaining approval from Bank Negara Malaysia (“BNM”), the Company has redeemed
the RM14,740,000 and RM85,250,000 perpetual notes respectively.
On 11 April 2014 and 21 April 2014, the Company issued perpetual notes with nominal value of RM30,000,000 and
RM16,000,000 respectively under a perpetual private debt securities programme. The Company has redeemed the
RM30,000,000 and RM16,000,000 perpetual notes respectively on 11 April 2019 and 21 April 2019.
On 10 December 2018, the Company further issued perpetual notes in nominal value amounting to RM100,000,000
with a tenure of 5 years.
Annual Report 2020

17. PERPETUAL NOTES AND SUKUK (Continued)
(a) Perpetual notes (Continued)
The salient features of the perpetual notes issued are as follows:
(i) The distribution rate for the year for five (5) years from issuance date is 6.65% (2019: 6.50% to 6.65%)
per annum, with distributions to be made on semi-annual basis in arrears;
(ii) If the Company does not exercise its option to redeem at the end of the 5th year, the periodic distribution
rate increases by 1% per annum above the prevailing distribution rate subject to a maximum of 20%
per annum;
(iii) The Company may defer part or all distribution, which shall then become due and payable on the next
distribution date unless it is further deferred by the Company;
(iv) The perpetual notes are perpetual in nature with no contractual maturity date. The Company has the option to
redeem the perpetual notes on the date of the fifth anniversary from the date of issue and thereafter on each
subsequent semi-annual distribution payment date;
(v) The Company has the option to redeem the perpetual notes earlier upon the occurrence of deferred
accounting event, tax event, privatisation defined event and shareholder event;
(vi) The redemption of the perpetual notes by the Company is subject to the prior approval of Bank Negara
Malaysia;
(vii) The holders of the perpetual notes do not have any voting rights in the Company; and
(viii) The perpetual notes rank ahead of the Company’s ordinary share capital and rank junior to the claims of all
other present and future creditors of the Company.
Annual Report 2020
17. PERPETUAL NOTES AND SUKUK (Continued)
(b) Perpetual sukuk
On 30 December 2014, the Company issued unrated subordinated Islamic Perpetual Sukuk (“perpetual sukuk”)
at par amounting to RM105,000,000 based on the Shariah Principles of Musharakah and Musawamah of up to
RM400,000,000 in nominal value. On 30 December 2019, upon obtaining approval from BNM, the Company has
redeemed the RM105,000,000 perpetual sukuk.
On 16 February 2015, the Company further issued perpetual sukuk amounting to RM25,000,000. The Company
has redeemed the RM25,000,000 perpetual sukuk on 17 February 2020.
On 10 December 2018, the Company further issued perpetual sukuk in nominal value amounting to RM100,000,000
with a tenure of 5 years.
The salient features of the perpetual sukuk issued are as follows:
(i) The distribution rate for the year for five (5) years from issuance date is 6.65% (2019: 6.50% to 6.65%) per
annum, with the distribution to be made on semi-annual basis in arrears;
(ii) If the Company does not exercise its option to redeem at the end of the 5th year, the periodic distribution rate
increases by 1% per annum above the prevailing distribution rate subject to a maximum of 20% per annum;
(iii) The Company may defer part or all distribution, which shall then become due and payable on the next
distribution date unless it is further deferred by the Company;
(iv) The perpetual sukuk are perpetual in nature with no contractual maturity date. The Company has the option to
redeem the perpetual sukuk on the date of the fifth anniversary from the date of issue and thereafter on each
subsequent semi-annual distribution payment date;
(v) The Company has the option to redeem the perpetual sukuk earlier upon the occurrence of defined accounting
event, tax event, privatisation defined event and shareholder event;
(vi) The redemption of the perpetual sukuk by the Company is subject to the prior approval of Bank Negara
Malaysia;
(vii) The holders of the perpetual sukuk do not have any voting rights in the Company; and
(viii) The perpetual sukuk rank ahead of the Company’s ordinary share capital and rank junior to the claims of all
present and future creditors of the Company.
Annual Report 2020

18. BORROWINGS
2020 2019
Non-current (Unsecured)
Term loans/financing (a) 5,098,913 5,616,006
Senior sukuk (b) 498,603 –
5,597,516 5,616,006
Current (Unsecured)
Bank overdraft (a) 44,298 19,290
Revolving credits (a) – 245,000
Islamic commercial paper (a) 658,900 149,716
Term loans/financing (a) 1,896,954 400,000
2,600,152 814,006
8,197,668 6,430,012
The currency profile of borrowings is as follows:
2020 2019
RM’000 RM’000
Ringgit Malaysia
- Term loans/financing 3,490,000 3,590,000
- Bank overdraft 44,298 19,290
- Islamic commercial paper 658,900 149,716
- Revolving credit – 245,000
- Senior sukuk 498,603 –
4,691,801 4,004,006
United States Dollar (“USD”)
- Term loans/financing 3,505,867 2,426,006
8,197,668 6,430,012
Annual Report 2020
18. BORROWINGS (Continued)

(a) Bank overdraft, revolving credits, Islamic commercial paper and term loans/financing
The bank overdraft, revolving credits, Islamic commercial paper and term loans/financing are provided on clean
basis.
The long term loans/financing are granted for tenure ranging from two to six years and are repayable by way of bullet
payment upon expiry of the term loans/financing.
As at 29 February 2020, the Company has banking facilities totaling RM12,045,000,000 (2019: RM9,226,000,000)
obtained from licensed banks and financial institutions.
(b) Senior sukuk
On 17 December 2019, the Company lodged the Sukuk Wakalah Programme (“sukuk programme”) with the
Securities Commission Malaysia. The sukuk programme, under the Shariah principle of Wakalah Bi-Al Istithmar and
Murabahah (via a Tawarruq arrangement), provides the Company with the flexibility to issue both senior sukuk and/
or subordinated sukuk from time to time, subject to the aggregate outstanding nominal amount of the senior sukuk
and/or subordinated sukuk not exceeding RM2,000,000,000 at any point in time.
On 10 February 2020, the Company completed the issuance of two (2) tranches of senior sukuk under the sukuk
programme with a nominal value of RM300,000,000 and RM200,000,000 with tenures of seven (7) years and
eight (8) years, respectively, as follows:
Principal
Tranche RM’000 Maturity date Profit Rate Profit payment
1 300,000 10 February 2027 3.80% per annum Payable semi-annually in arrears

2 200,000 10 February 2028 3.85% per annum Payable semi-annually in arrears
19. TRADE PAYABLES

Trade payables are non-interest bearing and the normal trade credit terms granted to the Company range from 2 to 3
(2019: 2 to 3) days.
20. OTHER PAYABLES AND ACCRUALS

2020 2019
RM’000 RM’000
Other payables 45,785 43,936

Accruals 158,563 125,026
204,348 168,962
Annual Report 2020

21. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)
Equity Liability
component component Total
RM’000 RM’000 RM’000
At 1 March 2018 68,306 7,367 75,673

Converted into ordinary shares during the year (Note 13) (24,397) (1,881) (26,278)
Deferred tax effect (Note 8):
- on conversion (109) – (109)
Over accrual of interest – (112) (112)
Coupon payment of ICULS – (2,144) (2,144)
As at 28 February 2019/1 March 2019 43,800 3,230 47,030

Converted into ordinary shares during the year (Note 13) (29,646) (895) (30,541)
Deferred tax effect (Note 8):
- on conversion (47) – (47)
Over accrual of interest – (7) (7)
Coupon payment of ICULS – (1,698) (1,698)
At 29 February 2020 14,107 630 14,737
The liability component is as follows:
2020 2019
RM’000 RM’000
Current 630 1,635

Non-current – 1,595
630 3,230
On 21 September 2017, the Company completed a renounceable rights issue of a 3-year, 3.5% ICULS amounting to
RM432,000,000 on the basis of two rights ICULS for every one existing share held. The ICULS were listed on Bursa
Malaysia on 21 September 2017. The salient features of the ICULS issued are as follows:
(i) The coupon rate for the ICULS is 3.5% per annum, payable on an annual basis in arrears;
(ii) The conversion price for the ICULS has been fixed at RM10.99 for each new share of the Company and the new
shares to be issued rank pari passu with the then existing shares;
(iii) The ICULS holder is entitled to exercise the right of conversion from date of issuance up to the maturity date; and
(iv) Any ICULS not converted by the maturity date will be mandatorily converted into new shares of the Company on the
maturity date.
During the financial year, 2,778,972 (2019: 2,391,034) new ordinary shares were issued resulting from the conversion of
30,541,202 (2019: 26,278,536) units of ICULS (Note 13).
Annual Report 2020
22. FEE INCOME

The timing of revenue recognition is as follows:
2020 2019
RM’000 RM’000
Recognised at point in time 149,264 142,264

Recognised over time 45,139 33,210
194,403 175,474
Except for fee income from extended warranty program and credit card annual fees, the Company’s revenue from contracts
with customers are recognised at the point in time as and when the services are rendered.
23. STAFF COSTS
2020 2019
RM’000 RM’000
Salaries, wages, bonuses and allowances 209,906 189,028

Defined contribution plan 29,234 25,808
Other staff benefits 10,945 9,177
250,085 224,013
24. FINANCE COSTS
2020 2019
RM’000 RM’000
Interest/Profit expense on financial liabilities that are not stated

at fair value through profit or loss:
Bank overdraft 169 783
Islamic commercial paper 19,085 820
Revolving credits 10,303 5,823
Term loans/financing 291,812 245,566
Senior sukuk 996 –
ICULS interest (7) (112)
322,358 252,880
Interest on lease liabilities 2,864 –
325,222 252,880
Annual Report 2020

25. PROFIT BEFORE TAX
2020 2019
RM’000 RM’000
Profit before tax is arrived at after charging:

Auditors’ remuneration:
- Audit fees
- statutory audit 190 173
- assurance and compliance related service 345 250
- Non-audit fees 40 211
Depreciation of plant and equipment (Note 5) 45,353 36,160
Depreciation of right-of-use assets (Note 6) 19,581 –
Write-off of plant and equipment (Note 5) 411 372
Impairment loss on (Note 9):
- Financing receivables 450,313 308,372
Rental of expenses in respect of:
- Office premises 5,014 23,016
- Motor vehicles 7 6
- Office equipment 6,078 2,974
And after crediting:

Bad debts recovered 125,326 135,647
Gain on disposal of plant and equipment 321 142
Interest income/profit revenue 2,043 1,207
Compensation of Key Management Personnel
The remuneration of the Directors during the year are as follows:
2020 2019
RM’000 RM’000
Directors’ remuneration:
Fees 1,528 1,177
Remuneration 1,699 2,272
Other short term employee benefits
(including estimated monetary value of benefits-in-kind) 64 330
3,291 3,779
Annual Report 2020
26. TAXATION
(i) Tax expenses
2020 2019
RM’000 RM’000
Income tax payable:

Current financial year 120,582 121,749
Over provision in prior years (3,911) (1,834)
116,671 119,915
Deferred tax (Note 8):

Current year (21,225) (5,000)
Under provision in prior years 2,949 2,652
(18,276) (2,348)
Total tax expenses 98,395 117,567
A reconciliation of tax expense applicable to profit before tax at the applicable statutory income tax rate to tax
expense at the effective income tax rate of the Company is as follows:
2020 2019
RM’000 RM’000
Profit before tax 390,441 472,191
Tax calculated using Malaysian income tax rate of 24% (2019: 24%) 93,706 113,326
Tax effect of non-deductible expenses 5,651 3,423
99,357 116,749
Over provision in prior years

- current tax (3,911) (1,834)
Under provision in prior years - deferred tax 2,949 2,652
98,395 117,567
Deferred tax recognised directly in other comprehensive income

Cash flow hedge reserve 29,805 3,635
Fair value through other comprehensive income 11,851 (1,635)
Annual Report 2020

26. TAXATION (Continued)
(ii) Material litigation
On 12 December 2017, the Company was served with notices of additional assessment with penalties by the Director
General of Inland Revenue (“DGIR”) for year of assessment of 2010 till year of assessment of 2016. The additional
assessments and penalties imposed amounted to RM96,820,000.
The said notices of additional assessment were raised by the DGIR among others, pursuant to:
(a) The DGIR varying the loan transaction collaterised by receivables undertaken by the Company with a local
financial institution to that of a sale of receivables. The DGIR did not specify which provision of the Income Tax
Act 1967 it is relying on in making this variation.
(b) The DGIR also raised time barred assessments for the years of assessment 2010 and 2011. The DGIR also did
not provide any reason for raising the time barred assessments.
(c) The DGIR imposed penalties for alleged submission of incorrect returns.
In consultation with its tax solicitor and corporate tax agents, the Company is of the view that there are reasonable
grounds to disagree with the said notices of additional assessment raised by the DGIR.
Accordingly, the Company has also initiated the necessary legal proceedings to defend and safeguard its position as
follows:
(a) Stay of Proceedings
The application for a Stay of Proceedings was filed with the Kuala Lumpur High Court on 14 December 2017.
The Kuala Lumpur High Court did not grant the Company’s application on 8 May 2018. The Company filed its
appeal to the Court of Appeal against this decision on the same day. However, on 5 April 2019, the Court of
Appeal dismissed the Company’s appeal. The Company will continue to pursue this matter through its Judicial
Review application as indicated in item (b) below.
(b) Judicial Review
On 14 December 2017, the Company also commenced proceedings to seek a Judicial Review on this matter.
However, the Kuala Lumpur High Court did not grant the required leave on 5 March 2018. On the same day,
the Company filed an appeal to the Court of Appeal against the decision of the Kuala Lumpur High Court.
The hearing on 1 July 2019 had been vacated. A replacement hearing date has yet to be fixed.
(c) Appeal to Special Commissioners of Income Tax (“SCIT”)
On 5 January 2018, the Company filed an appeal to SCIT pursuant to Section 99(1) of the Income Tax Act
1967. The hearing date has yet to be fixed.
Annual Report 2020
26. TAXATION (Continued)

(ii) Material litigation (Continued)
(d) Civil recovery proceedings by DGIR
On 9 July 2019, the Company received a Writ of Summons together with a Statement of Claim filed by the
Government of Malaysia in respect of the taxes which are purportedly due for the years of assessment 2010
to 2016.
On 2 December 2019, the Shah Alam High Court had granted a stay of proceedings against the civil recovery
suit commenced by the Government of Malaysia against the Company. The stay is valid until 1 June 2020
pending the discussions between the parties to explore the possibility of an amicable resolution. The matter
has now been fixed for case management at the High Court on 1 June 2020 for further instruction and the
High Court had advised both parties to proceed with the discussions expeditiously.
In the light of the above on-going developments, no tax provision has been made on the aforesaid matter.
27. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share
The basic earnings per share is calculated by dividing the net profit after distribution on perpetual notes and sukuk, by the
weighted average number of ordinary shares outstanding during the year.
2020 2019
RM’000 RM’000
Profit attributable to equity holders 292,046 354,624

Distribution to the holders of perpetual notes and sukuk, net of tax (17,645) (13,659)
Profit attributable to ordinary equity holders 274,401 340,965
Weighted average number of ordinary shares (’000 unit) 255,308 255,308
Basic earnings per share (sen) 107.48 133.55
Diluted earnings per ordinary share
Diluted earnings per share is equivalent to the basic earnings per share as there are no potential dilutive ordinary shares.
Annual Report 2020

28. RELATED PARTY DISCLOSURES
Amount owing to immediate holding company, which arose mainly from corporate support fees and payments made on
behalf of the Company, is unsecured, interest-free and repayable on demand.
Amount owing by/to related companies, which arose mainly from sales, management fees and payments on behalf, are
unsecured, interest-free and repayable on demand.
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 the party or exercise significant influence over the party in making financial
and operating decision, or vice versa, or where the Company and the party are subject to common control or common
significant influence. Related parties may be individuals or other entities.
Related parties also include key management personnel who are defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Company either directly or indirectly.
The currency profile of amount owing to immediate holding company and amount owing by/to related companies is as
follows:
2020 2019
RM’000 RM’000
Ringgit Malaysia
- Amount owing by related companies 10,706 6,069
- Amount owing to immediate holding company (6,978) (6,917)
- Amount owing to related companies (5,702) (5,762)
(1,974) (6,610)
Annual Report 2020
28. RELATED PARTY DISCLOSURES (Continued)

Related party transactions have been entered into the normal course of business under normal trade terms. The significant
related party transactions of the Company are shown below:
2020 2019
RM’000 RM’000
Related companies
AEON CO. (M) BHD.
Trade
Customers’ transactions via related company
Sales through easy payment schemes 5,124 5,490
Sales through AEON credit cards 24,730 8,651
Sales through E-Money 47,036 5,169
Revenue
Credit cards commission income 322 170
Non-Trade
Expenses
Convertible AEON-card points purchased (1,138) (2,712)
Office and promotion space rental (23,138) (8,139)
AEON Big (M) Sdn. Bhd.

Trade
Customers’ transactions via related company
Sales through easy payment schemes 3,655 3,321
Sales through AEON credit cards 31,406 3,414
Sales through E-Money 26,706 8,505
Revenue
Loyalty programme processing fee 31 1,930
Credit cards commission income 269 97
Non-Trade
Expenses
Convertible AEON-Big card points (38) (692)
Office and promotion space rental (17,424) (7,487)
AEON Credit Service Systems (Philippines) Inc.

Non-Trade
Assets
IT systems development cost (4,186) (3,478)
Annual Report 2020

2020 2019
RM’000 RM’000
AEON Delight (Malaysia) Sdn. Bhd.

Trade
Provision of financing
Instalment scheme for purchase of equipment – 3,751
Revenue
Interest income/profit revenue from easy payment scheme 237 72
Non-Trade
Expense
Cleaning services (646) (601)
Advertisement space rental (1,470) –
AEON Fantasy (Malaysia) Sdn. Bhd.

Trade
Provision of financing
Instalment scheme for purchase of equipment 5,514 2,148
Revenue
Interest income/profit revenue from easy payment scheme 256 18
J-Horizons Travel (M) Sdn. Bhd.

Non-Trade
Expense
Travel agency services (756) (803)
Advertisement space rental (497) –
Immediate holding company

AEON Financial Service Co., Ltd.
Non-Trade
Expense
Corporate support fees (12,102) (11,463)
Annual Report 2020

Key management personnel
The remuneration of the key management personnel, including Directors, during the financial year are as follows:
2020 2019
RM’000 RM’000
Directors’ fees 1,528 1,177

Salaries, allowances and bonuses 4,361 3,925
Defined contribution plan 343 303
Other short-term employee benefits 252 448
6,484 5,853
The above includes Directors’ remuneration as disclosed in Note 25.
29. DIVIDENDS
Dividends recognised in the current year by the Company are:
Net dividend Total

per share amount Date of
sen RM’000 payment
2020
Interim 2020 ordinary 22.25 56,426 7 November 2019
Final 2019 ordinary 22.35 56,075 18 July 2019
112,501
2019
Interim 2019 ordinary 22.25 55,784 8 November 2018
Final 2018 ordinary 20.00 49,937 19 July 2018
105,721
After the end of the reporting period, the following dividend was proposed by the Directors:
Sen per share Total amount

(single tier) RM’000
Final 2020 ordinary 14.00 35,507
This dividend will be recognised in the subsequent financial year upon approval by the shareholders of the Company at
the forthcoming Annual General Meeting.
Annual Report 2020

30. OPERATING SEGMENTS
The principal activity of the Company is the provision of easy payment schemes, personal financing schemes based on
Islamic principles and payment cards business, all of which are categorised under consumer financing business.
On this basis, the Managing Director (“MD”) reviews the business performance of the Company as a whole.
Accordingly, the segmental reporting used is equivalent to the presentation reflected in the Statement of Financial Position
and Statement of Profit or Loss and Other Comprehensive Income.
31. OPERATING LEASE

The Company leases a number of service centres and office premises under operating leases. A summary of the
non-cancellable operating lease rentals are payable as follows:
2020 2019
RM’000 RM’000
Less than one year – 17,676

Between one and five years – 10,145
– 27,821
From 1 March 2019, in compliance with MFRS 16, the Company has recognised right-of-use assets for these leases,
except for short-term and low value leases, as disclosed in Note 6 and Note 37.
32. CAPITAL COMMITMENT
2020 2019
RM’000 RM’000
Capital expenditure commitments
Plant and equipment

Contracted but not provided for 42,883 15,621
33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Company’s business whilst managing its risks. The Company operates within clearly defined guidelines
that are approved by the Board of Directors and the Company’s policy is not to engage in speculative transactions.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of
measurement, and the basis for recognition of income and expenses) for each class of financial asset, financial liability
and equity instrument are disclosed in Note 3.
Annual Report 2020
33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

Categories of Financial Instruments
FVTPL
derivatives
Carrying Amortised used for
amount cost FVTOCI hedging
RM’000 RM’000 RM’000 RM’000
2020
Financial assets
Investments 48,699 – 48,699 –
Financing receivables 9,704,121 9,704,121 – –
Other receivables and deposits 34,234 34,234 – –
Amount owing by related companies 10,706 10,706 – –
Cash, bank balances and deposits 132,798 132,798 – –
Derivative financial assets 28,810 – – 28,810
9,959,368 9,881,859 48,699 28,810
FVTPL
derivatives
amount cost hedging
RM’000 RM’000 RM’000
Borrowings (8,197,668) (8,197,668) –
Trade payables (32,913) (32,913) –
Other payables and accruals (204,348) (204,348) –
Amount owing to immediate holding company (6,978) (6,978) –
Amount owing to related companies (5,702) (5,702) –
ICULS liabilities (630) (630) –
Derivative financial liabilities (132,577) – (132,577)
Lease liabilities (71,177) (71,177) –
(8,651,993) (8,519,416) (132,577)

Annual Report 2020

Categories of Financial Instruments (Continued)
FVTPL
derivatives
amount cost FVTOCI hedging
RM’000 RM’000 RM’000 RM’000
2019
Financial assets
Investments 70,604 – 70,604 –
Financing receivables 8,105,779 8,105,779 – –
Other receivables and deposits 45,667 45,667 – –
Amount owing by related companies 6,069 6,069 – –
Cash, bank balances and deposits 92,429 92,429 – –
Derivative financial assets 19,178 – – 19,178
8,339,726 8,249,944 70,604 19,178
FVTPL
derivatives
amount cost hedging
RM’000 RM’000 RM’000
Borrowings (6,430,012) (6,430,012) –
Trade payables (27,032) (27,032) –
Other payables and accruals (168,962) (168,962) –
Amount owing to immediate holding company (6,917) (6,917) –
Amount owing to related companies (5,762) (5,762) –
ICULS liabilities (3,230) (3,230) –
Derivative financial liabilities (105,495) – (105,495)
(6,747,410) (6,614,915) (105,495)

Annual Report 2020

The main risks and corresponding management policies arising from the Company’s normal course of business are as
follows:
(i) Financial risk management objectives and policies
Risk management forms an integral part of the Company’s activities and remains an important feature in all its
business, operations, delivery channels and decision making processes. The extent to which the Company is able
to identify, assess, monitor, manage and report each of the various types of risk is critical to its strength, soundness
and profitability. The Company’s risk management function is independent of its operating units. All new businesses,
introduction of new products, engagement in new activities or entry into new strategic alliances are subject to
review by the Risk Management Committee (“RMC”) and Board Risk Committee (“BRC”) prior to Board of Directors
(“the Board”) approval.
The objectives of the Company’s risk management activities are to:
• Identify and monitor the various risk exposure and risk requirements;
• Ensure high risk activities are in accordance with the approved policies and the aggregate risk position is within
the risk level approved by the Board; and
• Help to create shareholders value through proper allocation and management of risk, and facilitate the risk
assessment of new business and products independently.
(ii) Risk management framework
The Company employs an Enterprise-wide Risk Management Framework (“ERMF”) to manage its risks effectively.
The framework involves on-going process of identifying, evaluating, monitoring, managing and reporting significant
risks affecting the Company through the RMC and subsequently to BRC and Board. This framework provides
the Board and management with a tool to anticipate and manage both existing and potential risks, taking into
consideration the dynamic risk profiles, as dictated by changes in business strategies, regulatory environment and
functional activities throughout the year.
Annual Report 2020

(iii) Risk organisation and reporting
The responsibility of risk management lies with the Board. In line with best practices, the Board determines the risk
policy objectives for the Company, and assumes responsibility for the supervision of risk management. To this end,
the Board is assisted by BRC to provide primary oversight responsibilities on the Company’s risk management.
The day-to-day responsibility for risk management and control is delegated to the RMC which undertakes the
oversight function for overall risk limit and ensures that the Company is within the risk appetite as established by the
Board. The RMC also deliberates the implementation of the ERMF which addresses credit, market, operational and
strategic risks within the policies established by the respective business units and recommending policy changes to
BRC for review, and subsequently to the Board for approval.
Risk exposures, impact and mitigation measures which cover all areas of risk faced by the Company are reviewed
and updated regularly to BRC and the Board to ensure relevance and compliance with current and applicable laws
and regulations.
The Company has exposure to the following significant risks in the course of undertaking its ordinary business
activities:
(a) Credit risk

(b) Liquidity risk
(c) Market risk
(a) Credit risk
Credit risk is the risk of a financial loss to the Company due to the deterioration in credit worthiness of its
borrowers and consequently, their ability to discharge their contractual obligations to the Company. Credit risk
remains the most significant risk to which the Company is exposed. The purpose of credit risk management is
to manage or maintain credit risk exposure to an acceptable level, in line with the Company’s risk appetite and
to ensure that the returns commensurate to the risk.
The Company’s exposure to credit risk arises principally from its financing receivables from customers.
Receivables
(i) Risk management objectives, policies and processes for managing the risk
The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing
basis. Credit evaluations are performed on all customers requiring credit and the credit acceptance
procedures are monitored by the management. Collateral is required for the business of financing
vehicles, equipment and machineries. Other than this, the Company does not require collateral in
respect of the easy payment schemes, personal financing schemes and credit cards issuance business.
The Company conducts regular monitoring on credit exposure trend and portfolio concentration analysis.
Asset quality is closely monitored so that deteriorating exposure are identified, analyse and reviewed with
relevant business units.
Annual Report 2020

(a) Credit risk (Continued)
Receivables (Continued)
(ii) Exposure to credit risk, credit quality and collateral
At end of the reporting period, the Company does not have any significant exposure to any individual
customers or industry sector. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset.
The Company does not hold any collateral or other credit enhancements to cover its credit risks
associated with its financial assets, except that the credit risk associated with hire purchase financing
receivables is mitigated because they are secured over the vehicles, equipment and machineries of
customers. The carrying amount of hire purchase financing receivables amounts to RM5,926,965,000
(2019: RM4,891,537,000). There has not been any significant change in the quality of the collateral
held for hire purchase financing. The Company recognises a loss allowance for these hire purchase
financing receivables based on the ECL model of the Company.
Credit risk sensitivity analysis
The Company applies three economic scenarios to reflect an unbiased probability-weighted range of
possible future outcome in estimating ECL:
• Base case: represents ‘most likely outcome’ of future economic conditions which is aligned with
information used by the Company for other purposes such as budgeting and stress testing.
• Best case and worst case: represent the ‘upside’ and ‘downside’ outcome of future economic
conditions which determined by a combination of statistical analysis and expert credit judgement.
The Company has performed ECL estimation by incorporating forward-looking information based on
historical experience and forecasted key economic variables impacting credit risk and expected credit
losses for each portfolio. Sensitivity assessment on financing receivables based on its best estimate of
the possible outcomes and range of possible weighted scenarios which are reassessed periodically.
The sensitivity factors used are derived based on the changes in worst case, with higher probabilities
assigned to worst case, while base case remains constant, is outlined in the table below:
2020
Probabilities weightage assigned Increase in ECL
to worst case RM’000
+ 15% 19,790
+ 10% 18,028
+ 5% 17,633
Annual Report 2020

(iii) Credit risk reporting and monitoring
The Company’s credit portfolios are monitored through monthly and/or adhoc reporting to ensure credit
deterioration is promptly detected and mitigated through implementation of risk remediation strategies.
Credit Policy and Review Department undertakes regular and comprehensive analysis of credit portfolios
and reports to the RMC on emerging credit issues.
(iv) Credit risk mitigation
All credit facilities are granted on the credit standing of the borrower, source of repayment, debt
servicing ability and the collateral pledged. Personal guarantees are obtained when the borrower’s credit
worthiness is insufficient to justify granting facilities.
(v) Concentration risk
Concentration of credit risk arises when a number of customers are engaged in similar business activities
or activities within the same geographic region, or when they have similar risk characteristics that would
cause their ability to meet contractual obligations to be similarly affected by changes in economic or
other conditions. The Company monitors various portfolios, to identify and assess risk concentrations.
The credit portfolios are monitored and reviewed to identify, assess and guard against unacceptable risk
concentrations.
Credit quality and allowance for impairment losses
The ageing of financing receivables as at the end of the reporting period is shown below:
Allowance
Credit for
quality Gross impairment Net
by days Basic for recognition receivables losses receivables
Staging past due of ECL provision RM’000 RM’000 RM’000
2020
Stage 1 0 to 30 12-months expected losses. Where
expected lifetime of an asset is less
than 12-months, expected losses are
measured at this expected lifetime. 9,311,314 (265,080) 9,046,234
Stage 2 31 to 60 Lifetime expected losses 437,552 (104,792) 332,760

61 to 90 197,246 (79,201) 118,045
9,946,112 (449,073) 9,497,039
Stage 3 More than Lifetime expected losses

90 and
restructured 448,544 (241,462) 207,082
10,394,656 (690,535) 9,704,121

Annual Report 2020

Credit quality and allowance for impairment losses (Continued)
Allowance
Credit for
quality Gross impairment Net
by days Basic for recognition receivables losses receivables
Staging past due of ECL provision RM’000 RM’000 RM’000
2019
Stage 1 0 to 30 12-months expected losses. Where
expected lifetime of an asset is less
than 12-months, expected losses are
measured at this expected lifetime. 7,766,447 (202,886) 7,563,561
Stage 2 31 to 60 Lifetime expected losses 395,258 (79,999) 315,259

61 to 90 163,941 (60,632) 103,309
8,325,646 (343,517) 7,982,129
Stage 3 More than Lifetime expected losses

90 and
restructured 366,716 (243,066) 123,650
8,692,362 (586,583) 8,105,779
Renegotiated/restructured activities include extended payment arrangements, and the modification and
deferral of payments. The Company has recognised allowance for impairment loss of RM105,684,000
(2019: RM161,175,000) for these renegotiated/restructured financing receivables. The status of net
renegotiated/restructured receivables are as follows:
2020 2019
RM’000 RM’000
Not past due 124,227 55,544

Past due 1 to 30 days 9,816 9,751
Past due 31 to 90 days 6,898 6,003
Past due more than 90 days 7,809 4,754
148,750 76,052
Annual Report 2020

(b) 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 arises principally from its various payables and borrowings.
The Company’s liquidity risk management practice is to maintain high quality and well diversified portfolios of
liquid assets and source of funds under both normal business and stressed conditions. The Company maintains
optimum ratio of long term funding, i.e. debts maturing after 12 months from the end of the reporting period
against total debts. This ratio significantly match the ratio of long terms financing receivables determined
based on customers’ contracted terms of repayment and payment pattern for revolving credit limits granted.
The Treasury unit reviews the asset and liability maturity profile and identifies any maturity mismatch for
escalation to the RMC which is responsible for the independent monitoring of the Company’s liquidity risk
profile. The RMC meets every month to discuss the liquidity risk and funding profile of the Company and works
closely with the Treasury unit on the surveillance of market conditions and stress testing analysis on liquidity
positions. The Company maintains sufficient credit lines to ensure that all current obligations are able to be
met. As at 29 February 2020, the Company has unutilised lines of credit amounting to RM3,847,000,000
(2019: RM2,796,000,000) obtained from licensed banks and financial institutions.
The table below summarises the maturity profile of the Company’s non-derivative financial assets and
non-derivative financial liabilities as at the end of the reporting period based on remaining contractual maturity.
Average
contractual
profit/interest/ Under 1-2 2-5 More than No specific
coupon rate 1 year years years 5 years maturity Total
% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2020
Financial assets
Investments – – – – – 48,699 48,699
Financing receivables 17.09 3,438,731 2,015,439 3,432,373 817,578 – 9,704,121
Other receivables
and deposits – 34,234 – – – – 34,234
Amount owing by
related companies – 10,706 – – – – 10,706
Cash and bank balances – 114,865 – – – – 114,865
Deposits placed with
licensed banks 2.87 17,933 – – – – 17,933
Total assets 3,616,469 2,015,439 3,432,373 817,578 48,699 9,930,558

Annual Report 2020

(b) Liquidity risk (Continued)
Average
contractual
% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2020
Bank overdraft 3.16 44,298 – – – – 44,298
Unsecured term
loans/financing 4.49 1,896,954 1,153,850 3,380,808 564,255 – 6,995,867
Islamic commercial paper 3.17 658,900 – – – – 658,900
Senior sukuk 3.83 – – – 498,603 – 498,603
Trade payables – 32,913 – – – – 32,913
Other payables
and accruals – 204,348 – – – – 204,348
Amount owing to immediate
holding company – 6,978 – – – – 6,978
Amount owing to
ICULS liabilities 3.50 630 – – – – 630
Lease liabilities 4.36 19,140 16,183 29,406 6,448 – 71,177
Total liabilities 2,869,863 1,170,033 3,410,214 1,069,306 – 8,519,416
Net liquidity gap 746,606 845,406 22,159 (251,728) 48,699 1,411,142

Annual Report 2020

Average
contractual
% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2019
Financial assets
Investments – – – – – 70,604 70,604
Financing receivables 19.45 2,102,151 1,837,284 3,259,970 906,374 – 8,105,779
Other receivables
and deposits – 45,667 – – – – 45,667
Amount owing by
Cash and bank balances – 83,112 – – – – 83,112
Deposits placed with
licensed banks 3.16 9,317 – – – – 9,317
Total assets 2,246,316 1,837,284 3,259,970 906,374 70,604 8,320,548
Bank overdraft 3.68 19,290 – – – – 19,290
Revolving credits 3.91 245,000 – – – – 245,000
Unsecured term
loans/financing 4.45 400,000 1,861,869 2,824,137 930,000 – 6,016,006
Islamic commercial paper 3.82 149,716 – – – – 149,716
Trade payables – 27,032 – – – – 27,032
Other payables
and accruals – 168,962 – – – – 168,962
holding company – 6,917 – – – – 6,917
Amount owing to
ICULS liabilities 3.50 1,635 1,595 – – – 3,230
Total liabilities 1,024,314 1,863,464 2,824,137 930,000 – 6,641,915
Net liquidity gap 1,222,002 (26,180) 435,833 (23,626) 70,604 1,678,633

Annual Report 2020

The table below summarises the maturity profile of the Company’s non-derivative financial liabilities as at the
end of the reporting period based on undiscounted contractual payments:
Carrying Contractual Under 1-2 2-5 More than No specific

amount cash flows 1 year years years 5 years maturity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2020
Bank overdraft 44,298 44,298 44,298 – – – –
Unsecured term
loans/financing 6,995,867 7,835,158 2,139,548 1,369,276 3,742,675 583,659 –
Islamic commercial paper 658,900 660,000 660,000 – – – –
Senior sukuk 498,603 640,510 19,100 19,100 57,352 544,958 –
Trade payables 32,913 32,913 32,913 – – – –
Other payables and accruals 204,348 204,348 204,348 – – – –
holding company 6,978 6,978 6,978 – – – –
Amount owing to
related companies 5,702 5,702 5,702 – – – –
ICULS liabilities 630 630 630 – – – –
Lease liabilities 71,177 79,569 21,916 18,100 33,236 6,317 –
8,519,416 9,510,106 3,135,433 1,406,476 3,833,263 1,134,934 –
2019
Bank overdraft 19,290 19,290 19,290 – – – –
Revolving credits 245,000 245,589 245,589 – – – –
Unsecured term
loans/financing 6,016,006 6,848,266 409,423 1,984,320 3,281,150 1,173,373 –
Islamic commercial paper 149,716 150,000 150,000 – – – –
Trade payables 27,032 27,032 27,032 – – – –
Other payables and accruals 168,962 168,962 168,962 – – – –
holding company 6,917 6,917 6,917 – – – –
Amount owing to
related companies 5,762 5,762 5,762 – – – –
ICULS liabilities 3,230 3,437 1,719 1,718 – – –
6,641,915 7,475,255 1,034,694 1,986,038 3,281,150 1,173,373 –

Annual Report 2020

(c) Market risk
Market risk is the risk of potential loss as a result of changes in the intrinsic value of financial instruments
caused by movement in market variables such as interest rate/profit rate, currency exchange rates, equity
pricing and other related macro-economic factors that will eventually affect the Company’s profitability, cash
flows and capital preservation.
The Company’s market risk management includes the monitoring of the fluctuations in net interest income/
profit revenue or investment value due to changes in relevant risk factors. RMC monitors the exposure on
monthly basis through reports and analysis with the support of the Treasury unit.
In managing interest income/profit revenue rate, the Company intends to maximise net interest income/profit
revenue; and to minimise the significant volatility in relation to the Company’s assets and liabilities.
Interest rate risk
The Company’s fixed rate borrowings and derivatives are exposed to a risk of change in their fair value due to
changes in the interest income/profit revenue rates. The Company’s variable rate borrowings are exposed to a
risk of change in cash flows due to changes in interest rates. The other financial assets and liabilities are not
significantly exposed to interest rate risk.
Risk management objectives, policies and processes for managing the risk
The Company borrows for its operations at fixed and variable rates and monitors the interest rate exposure
by assessing the interest rate gap of interest bearing financial assets and financial liabilities. The Company
also uses cross currency interest rate swaps to hedge its interest rate risk on bank borrowings as stated in
hedging activities below. The management continuously seeks for alternative banking facilities, which provide
competitive interest rates to finance its capital expenditure, financing and working capital requirements.
Annual Report 2020

(c) Market risk (Continued)
Interest rate risk (Continued)
Exposure to interest risk
The interest rate profile of the Company’s significant interest-banking financial instruments, based on carrying
amounts as at the end of the reporting period is shown below:
2020 2019
RM’000 RM’000
Fixed rate instruments

Financial liabilities 4,647,503 3,984,717
Floating rate instruments

Financial liabilities 3,550,165 2,445,295
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through
profit or loss and the Company designates derivatives as hedging instruments under the cash flow hedge
accounting model. Therefore, a change in interest rates at the end of the reporting period would not
affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (bps) in interest rates at the end of the reporting period would have
increased/(decreased) equity and pre-tax profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular foreign currency rates, remained constant.
Profit or loss
2020 2019
100 bps 100 bps 100 bps 100 bps
increase decrease increase decrease
RM’000 RM’000 RM’000 RM’000
Floating rate instruments (35,502) 35,502 (24,453) 24,453

Annual Report 2020

Hedging activities
Cash flow hedge
The Company has entered into cross currency interest rate swaps to hedge the variability of cash flow risk in
relation to the foreign currency denominated borrowings of RM3,505,867,000 (2019: RM2,426,006,000).
The cross currency interest rate swaps have the same notional value of RM3,505,867,000
(2019: RM2,426,006,000) and are to be settled in full upon maturity, terms matching the hedged items.
The following table indicates the years in which the cash flows associated with the derivative financial assets with
carrying amount of RM28,810,000 (2019: RM19,178,000) and derivative financial liabilities of RM132,577,000
(2019: RM105,495,000) that are expected to occur and affect profit or loss.
Expected Under 1-2 2-7

cash flows 1 year years years
RM’000 RM’000 RM’000 RM’000
2020
Cross currency swaps (gross settled):
Outflow (3,904,086) (1,106,570) (961,197) (1,836,319)
Inflow 3,745,783 1,071,606 909,618 1,764,559
(158,303) (34,964) (51,579) (71,760)
2019
Cross currency swaps (gross settled):
Outflow (2,794,077) (109,757) (1,061,926) (1,622,394)
Inflow 2,727,048 86,154 1,041,167 1,599,727
(67,029) (23,603) (20,759) (22,667)
Currency risk
The Company is exposed to foreign currency risk mainly on borrowings that are denominated in a currency other
than the functional currency of the Company. The currency giving rise to this risk is primarily USD.
Risk management objectives, policies and processes for managing the risk
The repayment of all borrowings in foreign currency is fully hedged by cross currency interest rate swaps entered
into by the Company upon initial drawdown of the borrowings.
Annual Report 2020

Currency risk (Continued)
Foreign currency risk management
The Company’s exposure to foreign currency risk, based on carrying amounts at the end of the reporting period is
shown below:
Denominated in USD
2020 2019
RM’000 RM’000
Borrowings (3,505,867) (2,426,006)
Net exposure (3,505,867) (2,426,006)
Currency risk sensitivity analysis
No sensitivity analysis is presented for USD currency on borrowings which have been fully hedged.
34. FAIR VALUE OF FINANCIAL INSTRUMENTS

Except as detailed in the following table, the Directors consider that the carrying amounts of financial assets and
financial liabilities recognised in the financial statements approximate their fair values.
Fair value of financial instruments Fair value of financial instruments

carried at fair value not carried at fair value Total Carrying
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2020
Financial assets
Financing receivables
- Non-current – – – – – – 6,178,215 6,178,215 6,178,215 6,265,390
Derivatives financial assets – 28,810 – 28,810 – – – – 28,810 28,810
Investments – – 48,699 48,699 – – – – 48,699 48,699
– 28,810 48,699 77,509 – – 6,178,215 6,178,215 6,255,724 6,342,899
Term loans/financing
- Non-current (unsecured) – – – – – – 5,665,054 5,665,054 5,665,054 5,597,516
Derivatives financial liabilities – 132,577 – 132,577 – – – – 132,577 132,577
– 132,577 – 132,577 – – 5,665,054 5,665,054 5,797,631 5,730,093

Annual Report 2020

34. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
Fair value of financial instruments Fair value of financial instruments
carried at fair value not carried at fair value Total Carrying
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2019
Financial assets
Financing receivables
- Non-current – – – – – – 5,947,399 5,947,399 5,947,399 6,003,628
Derivatives financial assets – 19,178 – 19,178 – – – – 19,178 19,178
Investments – – 70,604 70,604 – – – – 70,604 70,604
– 19,178 70,604 89,782 – – 5,947,399 5,947,399 6,037,181 6,093,410
Term loans/financing
- Non-current (unsecured) – – – – – – 5,542,222 5,542,222 5,542,222 5,616,006
Derivatives financial liabilities – 105,495 – 105,495 – – – – 105,495 105,495
– 105,495 – 105,495 – – 5,542,222 5,542,222 5,647,717 5,721,501
The methods and assumptions used by management to determine the fair values of the financial instruments are as
follows:
(i) Financing receivables
The fair value of financing receivables with remaining maturity of less than one year are estimated to approximate
their carrying amounts. For financing receivables with remaining maturity of more than one year, the fair values are
estimated based on discounted cash flows using prevailing rates of loans and receivables of similar credit profile.
(ii) Term loans/financing
The fair value of term loans/financing with remaining maturity of less than one year are estimated to approximate
their carrying amounts. For term loans/financing with remaining maturity of more than one year, the fair values are
estimated using discounting technique. The discount rates are based on market rates available to the Company for
similar instruments.
(iii) Derivative financial instruments
The fair value of cross currency swap derivatives is the estimated amount that the Company would receive or pay to
terminate the contracts at the reporting date and is determined based on discounted future cash flows. Future cash
flows are estimated based on forward interest rates (from observable yield curves at the end of the reporting period),
forward exchange rates (from observable forward exchange rates at the end of reporting period), contract interest
rates and contract forward rates, discounted at a rate that reflects the credit risk of counterparties.
Annual Report 2020

(iv) Investments
The fair value of investments are based on the expected cash flows discounted as at reporting date. The discounted
cash flow method was used to capture the present value of the expected future economic benefits to be derived
from the ownership of these investees. The key inputs are discount rate, terminal growth rate and discount for lack
of control, as described in this Note.
(v) Other financial instruments
The fair value of other instruments are determined to approximate to its carrying value due to the short term nature
of these financial instruments.
The fair value hierarchies used to classify financial instruments not measured at fair value in the statements of financial
position, but for which fair value is disclosed, are as follows:
(i) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. prices) or indirectly (i.e. derived from prices).
(iii) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements
in Level 3 of the fair value hierarchy:
2020 2019
RM’000 RM’000
At 1 March 70,604 60,937

Addition – 2,855
Disposal (854) –
Changes in fair value recognised in other comprehensive income (21,051) 6,812
At 29/28 February 48,699 70,604

Annual Report 2020

Fair value of the Company’s financial assets that are measured at fair value on a recurring basis
The Company’s investments are measured at fair value at the end of each reporting period. The following table gives
information about how the fair value of the financial liability is determined (in particular, the valuation technique and
inputs used).
Fair value Fair value Valuation Significant Relationship of

Financial 2020 2019 Fair value technique and unobservable unobservable
assets RM’000 RM’000 hierarchy key inputs inputs inputs to fair value
Investments 48,699 70,604 Level 3 Technique: Discount rate: A slight increase in

Discounted 7.15% - 9.11% the discount rate used
cash flows (2019: 12.00% would result in a
- 22.88%) significant decrease in
fair value, and vice
versa.
Key inputs: Terminal growth A slight increase in

Discount rate rate: 5.20% the terminal year
Terminal growth - 6.30% (2019: growth rate used
rate 0.50% - 2.00%) would result in a
Discount for significant increase
lack of control in fair value, and
vice versa.
Discount for A slight increase in

lack of control: the discount for lack
62.00% - of control used would
97.50% result in a significant
(2019: 30.00% decrease in fair value,
- 75.00%) and vice versa.
Annual Report 2020
35. CAPITAL MANAGEMENT

The Company’s objectives when managing capital is to maintain a strong capital base so as to maintain investor, creditor
and market confidence and to sustain future development of the business. The Directors monitor and determine to
maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
During the financial year, the Company has complied with debt-to-equity ratio requirement of less than 5.25:1.
The debt-to-equity ratio in year 2020 and 2019 are as follows:
2020 2019
RM’000 RM’000
Total borrowings 8,197,668 6,430,012

Less: Cash and bank balances (132,798) (92,429)
Net debt 8,064,870 6,337,583
Total equity 1,757,359 1,874,981
Debt-to-equity ratio 4.59 3.38
36. MATERIAL LITIGATION

The Company is not engaged in any material litigation except as disclosed in Note 26(ii).
37. SIGNIFICANT CHANGE IN ACCOUNTING POLICY

During the year, the Company adopted MFRS 16 that is effective for annual periods that begin on or after 1 January 2019.
MFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes
to lessee accounting by removing the distinction between operating and finance lease and requiring the recognition
of a right-of-use asset and a lease liability at commencement for all leases, except for short-term leases and leases of
low value assets when such recognition exemptions are adopted. In contrast to lessee accounting, the requirements for
lessor accounting have remained largely unchanged. The impact of the adoption of MFRS 16 on the Company’s financial
statements is described below.
The date of initial application of MFRS 16 for the Company is 1 March 2019.
The Company has adopted MFRS 16 using the modified retrospective approach which:
• Requires the Company to recognise the cumulative effect of initially applying MFRS 16 at the date of initial application,
i.e. 1 March 2019.
• Does not permit restatement of comparatives, which continue to be presented under MFRS 117 and
IC Interpretation 4.
Annual Report 2020

37. SIGNIFICANT CHANGE IN ACCOUNTING POLICY (Continued)
Impact of the new definition of a lease
The Company has made use of the practical expedient available on transition to MFRS 16 not to reassess whether a
contract is or contains a lease. Accordingly, the definition of a lease in accordance with MFRS 117 and IC Interpretation 4
will continue to be applied to those leases entered or changed before 1 March 2019.
The change in definition of a lease mainly relates to the concept of control. MFRS 16 determines whether a contract
contains a lease on the basis of whether the customer has the right to control the use of an identified asset for a period
of time in exchange for consideration. This is in contrast to the focus on ‘risks and rewards’ in MFRS 117 and IC
Interpretation 4.
The Company applies the definition of a lease and related guidance set out in MFRS 16 to all lease contracts entered into
or changed on or after 1 March 2019 (whether it is a lessor or a lessee in the lease contract).
Impact on lessee accounting
Former operating leases
MFRS 16 changes how the Company accounts for leases previously classified as operating leases under MFRS 117, which
were off balance sheet.
Applying MFRS 16, for all leases (except as noted below), the Company:
• Recognises right-of-use assets and lease liabilities in the statement of financial position, initially measured at the
present value of the future lease payments, with the right-of-use asset adjusted by the amount of any prepaid or
accrued lease payments.
• Recognises depreciation of right-of-use assets and interest on lease liabilities in the statement of profit or loss.
• Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest
(presented within financing activities) in the statement of cash flows.
Lease incentives (e.g. rent free period) are recognised as part of the measurement of the right-of-use assets and lease
liabilities whereas under MFRS 117 they resulted in the recognition of a lease incentive, amortised as a reduction of rental
expenses on a straight line basis.
Under MFRS 16, right-of-use assets are tested for impairment in accordance with MFRS 136.
Annual Report 2020
37. SIGNIFICANT CHANGE IN ACCOUNTING POLICY (Continued)

Impact on lessee accounting (Continued)
For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Company has opted to recognise
a lease expense on a straight-line basis as permitted by MFRS 16. This expense is presented within ‘operating expenses’
in statement of profit or loss.
The Company has recognised RM67,550,000 right-of-use assets and lease liabilities upon transition to MFRS 16.
The Company has used the following practical expedients when applying the cumulative catch-up approach to leases
previously classified as operating leases applying MFRS 117.
• applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
• elected not to recognised right-of-use assets and lease liabilities to leases for which the lease term ends within 12
months of the date of initial application.
• excluded initial direct cost from the measurement of right-of-use asset at the date of initial application.
• use hindsight when determining the lease term when the contract contains options to extend or terminate the lease.
Financial impact of initial application of MFRS 16
The weighted average lessees incremental borrowing rate applied to lease liabilities recognised in the statement of financial
position on 1 March 2019 range from 4.36% to 4.48%.
The following table shows the operating lease commitments disclosed applying MFRS 117 at 28 February 2019, discounted
using the incremental borrowing rate at the date of initial application and the lease liabilities recognised in the statement
of financial position at the date of initial application.
Reconciliation for the differences between the operating lease commitments disclosed under MFRS 117 at
28 February 2019 to the lease liabilities recognised at 1 March 2019 is as follows:
Note RM’000
Operating lease commitments disclosed at 28 February 2019 31 27,821
Discounted using the borrowing rate 27,045

Recognition of extension option 42,255
Recognition of exemption for short-term lease (1,750)
Lease liabilities recognised at 1 March 2019 67,550
The Company has recognised RM67,550,000 right-of-use assets and lease liabilities upon adoption of MFRS 16.
Annual Report 2020
38. SIGNIFICANT EVENT AFTER FINANCIAL REPORTING DATE

Save for the undermentioned, there was no other significant event subsequent to the end of the financial year up to the
date these financial statements were authorised and approved for issuance, that have a material bearing on the Company.
The recent COVID-19 outbreak has evolved into a global pandemic that is adversely affecting global and national economies
due to the imposition of extensive and unprecedented related public health measures, travel restrictions, social distancing
regulations, constraints on the movement and gathering of people, and the suspension of many business operations and
other activities, by many countries in order to curb the spread of the virus.
Domestically, the Movement Control Order (“MCO”) was imposed by the Malaysian Government on 18 March 2020 and
todate, the MCO, with some modifications, is still in place. The MCO has caused major disruptions to the Company’s
operations nationwide. During the MCO, the Company’s front line customer facing business activities had to be discontinued
and only essential services such as self-service terminals, online applications and online payments are in operation.
Most of the Company’s employees were compelled to work from home, resulting in substantial drop in sales, collections
and productivity. The Company’s overall collection performance has markedly dropped as customer’s payment behaviour
and pattern noticeably change amidst heightened uncertainties.
It is expected that the ongoing pandemic will have a negative bearing on the Company’s financial performance and
condition, and also its liquidity position for the forthcoming financial year. The extent of the financial impact on the
Company is difficult to assess at this time in light of prevailing uncertainties over when the pandemic will end. To mitigate
its potential risks exposure, the Company has taken and will continue to take the necessary steps to safeguard and
preserve its financial condition which include, amongst others, enhancing asset quality, embracing prudent cost and cash
management, and improving on financial and operational efficiency by leveraging on its positive business fundamentals
and extensive customer reach.
Moving forward, the Company will continue to place emphasis on liquidity management to meet its continuing financial
commitments and obligations by optimising the cash generated from operating and financing activities. Based on its
cashflow projection simulations after incorporating anticipated reductions in collection performance, together with the
Company’s unutilised credit lines of RM3.85 billion as at 29 February 2020, the Company is confident that it will be able
to meet its continuing financial commitments and obligations as and when they arise. Please refer to Note 33(b).
The Company will also continue to closely monitor and assess its inherent credit risks in its financing portfolio by considering
all relevant information including forward looking ones, taking into account the expected economic and financial impact
of the COVID-19 pandemic and the government’s measures to address the pervasive and underlying effects of the
pandemic on everyone.
Annual Report 2020
STATEMENT BY DIRECTORS
Pursuant to Section 251(2) of the Companies Act 2016
The Directors of AEON CREDIT SERVICE (M) BERHAD state that, in their opinion, the accompanying financial statements are
drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting 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 29 February 2020 and of the financial performance and the cash flows of the Company for the year ended on that date.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 5 May 2020.
NG ENG KIAT YURO KISAKA
Kuala Lumpur
5 May 2020
STATUTORY DECLARATION
Pursuant to Section 251(1)(b) of the Companies Act 2016
I, LEE KIT SEONG, the officer primarily responsible for the financial management of AEON CREDIT SERVICE (M) BERHAD,
do solemnly and sincerely declare that the accompanying financial statements are in my opinion, correct and I make this
solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
Declarations Act, 1960.
LEE KIT SEONG

MIA Membership No: 17292
Subscribed and solemnly declared by the abovenamed LEE KIT SEONG at KUALA LUMPUR on this 5th day of May, 2020.
Before me,
KAPT (B) JASNI BIN YUSOFF

NO. W 465
COMMISSIONER FOR OATHS

Kuala Lumpur
OTHER INFORMATION
09
174 Analysis of Shareholdings
176 Analysis of Irredeemable Convertible Unsecured
Loan Stocks (“ICULS”) Holdings
178 Notice of Annual General Meeting
Form of Proxy
Annual Report 2020
ANALYSIS OF SHAREHOLDINGS
Statistics on shareholdings as at 30 April 2020
Paid-up share capital : RM565,516,664

Class of shares : Ordinary shares
Voting rights : One vote per ordinary share
Number of shareholders : 5,437
No. of % of No. of % of Issued

Category Shareholders Shareholders Shares Held Share Capital
1 - 99 583 10.72 9,100 0.00
100 - 1,000 2,267 41.70 1,257,393 0.50
1,001 - 10,000 1,949 35.84 6,840,987 2.70
10,001 - 100,000 512 9.42 15,388,756 6.06
100,001 to less than 5% of issued shares 125 2.30 73,111,872 28.83
5% and above of issued shares 1 0.02 157,017,252 61.91
Total 5,437 100.00 253,625,360 100.00
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS
Direct Interest Indirect Interest

No. Name of Substantial Shareholders No. of Shares % of Shares No. of Shares % of Shares
1. AEON FINANCIAL SERVICE CO., LTD. 157,017,252 61.91 – –
2. AEON CO., LTD. – – 161,661,252* 63.74
Note
* Deemed interest in the shares held by AEON FINANCIAL SERVICE CO., LTD. and AEON CO. (M) BHD. by virtue Section 8
of the Companies Act 2016.
DIRECTORS’ INTEREST AS PER REGISTER OF DIRECTORS’ SHAREHOLDINGS
No. of Shares Held

No. Name of Directors Through Own Name % of Shares
1. Ng Eng Kiat 21,321 0.01
2. Yuro Kisaka 82,080 0.03
3. Dato’ Md Kamal bin Ismaun 9,000 0.00
4. Tomokatsu Yoshitoshi – –
5. S Sunthara Moorthy A/L S Subramaniam – –
6. YBhg. Datuk Adinan bin Maning – –
7. Datin Khoo Pek Ling – –
8. Datin Yasmin Ahmad Merican 20,000 0.01
9. Rashidah binti Abu Bakar – –
10. Masaaki Mangetsu – –
11. Lee Tyan Jen 35,661 0.01
Annual Report 2020
LIST OF TOP THIRTY (30) SHAREHOLDERS AS AT 30 APRIL 2020
No. Name No. of Shares % of Shares

1. AEON FINANCIAL SERVICE CO LTD. 157,017,252 61.91
2. AEON CO. (M) BHD. 4,644,000 1.83
3. HSBC NOMINEES (ASING) SDN BHD 3,705,146 1.46
BPSS LDN FOR ABERDEEN STANDARD ASIA FOCUS PLC
4. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 3,304,154 1.30
EMPLOYEES PROVIDENT FUND BOARD (NOMURA)
EMPLOYEES PROVIDENT FUND BOARD (ABERDEEN)
6. CARTABAN NOMINEES (TEMPATAN) SDN BHD 3,007,700 1.19
PAMB FOR PRULINK EQUITY FUND
7. DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD 2,580,000 1.02
DEUTSCHE TRUSTEES MALAYSIA BERHAD FOR HONG LEONG VALUE FUND
JPMBL SA FOR JPMORGAN FUNDS
EMPLOYEES PROVIDENT FUND BOARD (AMUNDI)
10. CARTABAN NOMINEES (ASING) SDN BHD 2,185,300 0.86
EXEMPT AN FOR STATE STREET BANK & TRUST COMPANY (WEST CLT OD67)
11. PERTUBUHAN KESELAMATAN SOSIAL 2,094,300 0.83
BNP PARIBAS SECS SVS JERSEY FOR ABERDEEN ASIAN INCOME FUND LIMITED
KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (ABERDEEN)
JPMCB NA FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND
15. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD 1,229,900 0.48
CIMB COMMERCE TRUSTEE BERHAD - KENANGA GROWTH FUND
16. MAYBANK NOMINEES (TEMPATAN) SDN BHD 1,021,350 0.40
NATIONAL TRUST FUND (IFM EASTSPRING) (410140)
17. DB (MALAYSIA) NOMINEE (ASING) SDN BHD 993,960 0.39
SSBT FUND TCTA FOR CALIFORNIA STATE TEACHERS RETIREMENT SYSTEM
18. MALACCA EQUITY NOMINEES (TEMPATAN) SDN BHD 985,943 0.39
EXEMPT AN FOR PHILLIP CAPITAL MANAGEMENT SDN BHD (EPF)
19. HSBC NOMINEES (TEMPATAN) SDN BHD 968,650 0.38
HSBC (M) TRUSTEE BHD FOR PERTUBUHAN KESELAMATAN SOSIAL (AFF
HWG6939-403)
20. HSBC NOMINEES (ASING) SDN BHD 934,500 0.37
EXEMPT AN FOR MITSUBISHI UFJ MORGAN STANLEY SECURITIES CO., LTD.
21. KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 913,100 0.36
22. PERMODALAN NASIONAL BERHAD 913,100 0.36
JPMCB NA FOR VANGUARD EMERGING MARKETS STOCK INDEX FUND
24. CARTABAN NOMINEES (TEMPATAN) SDN BHD 867,200 0.34
PAMB FOR PARTICIPATING FUND
25. MOTOYA OKADA 864,000 0.34
BBH AND CO BOSTON FOR GRANDEUR PEAK EMERGING MARKETS
OPPORTUNITIES FUND
27. CITIGROUP NOMINEES (ASING) SDN BHD 852,240 0.34
CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT
DIMENSIONS GROUP INC
EXEMPT AN FOR NOMURA SECURITIES CO LTD (CLIENT AC)
29. LEONG LI NAR 774,000 0.31
CBNY FOR NORGES BANK (FI 17)
TOTAL 205,981,664 81.21
Annual Report 2020
ANALYSIS OF IRREDEEMABLE CONVERTIBLE UNSECURED LOAN

STOCKS (“ICULS”) HOLDINGS
Statistics on ICULS holdings as at 30 April 2020
Type of Securities : 3-year, 3.5% ICULS at nominal value of RM1.00 each

Class of shares : RM432,000,000 comprising 432,000,000 ICULS at nominal value of RM1.00 each
Total Outstanding ICULS : RM18,494,906 comprising 18,494,906 at nominal value of RM1.00 each
Number of ICULS Holders : 1,020
% of
No. of % of No. of Outstanding
Category ICULS Holders ICULS Holders ICULS Held ICULS
1 - 99 19 1.86 351 0.00
100 - 1,000 183 17.94 81,148 0.44
1,001 - 10,000 549 53.82 2,218,633 11.99
10,001 - 100,000 247 24.23 6,336,082 34.26
100,001 to less than 5% of issued shares 19 1.86 4,972,792 26.89
5% and above of issued shares 3 0.29 4,885,900 26.42
Total 1,020 100.00 18,494,906 100.00
With reference to the announcement made by the Company on 13 October 2017, the substantial shareholders, namely
AEON FINANCIAL SERVICE CO., LTD. (with deeemed interest in the shares held by AEON FINANCIAL SERVICE CO., LTD.
and AEON CO. (M) BHD. by virtue of Section 8 of the Companies Act 2016), had converted all ICULS held to Ordinary Shares.
DIRECTORS’ INTEREST IN ICULS
Direct Interest Indirect Interest

No. Name of Substantial Shareholders No. of ICULS Held No. of ICULS Held %
1. Ng Eng Kiat – – –
2. Yuro Kisaka – – –
3. Dato’ Md Kamal bin Ismaun 18,000 – 0.10
4. Tomokatsu Yoshitoshi – – –
5. S Sunthara Moorthy A/L S Subramaniam – – –
6. YBhg. Datuk Adinan bin Maning – – –
7. Datin Khoo Pek Ling – – –
8. Datin Yasmin Ahmad Merican – – –
9. Rashidah binti Abu Bakar – – –
10. Masaaki Mangetsu – – –
11. Lee Tyan Jen 72,500 – 0.39
Annual Report 2020
LIST OF TOP THIRTY (30) ICULS HOLDERS AS AT 30 APRIL 2020
No. Name No. of ICULS % of ICULS

1. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD 2,625,600 14.20
CIMB COMMERCE TRUSTEE BERHAD - KENANGA GROWTH FUND
2. AFFIN HWANG NOMINEES (ASING) SDN BHD 1,278,000 6.91
DBS VICKERS SECS (S) PTE LTD FOR SERENDIP INVESTMENTS LIMITED
3. MAYBANK SECURITIES NOMINEES (ASING) SDN BHD 982,300 5.31
MAYBANK KIM ENG SECURITIES PTE LTD FOR KEGANI PACIFIC LTC FUND
L.P.
4. LIM AH CHOO 826,300 4.47
5. TAN KOK 711,000 3.84
6. MALACCA EQUITY NOMINEES (TEMPATAN) SDN BHD 581,472 3.14
EXEMPT AN FOR PHILLIP CAPITAL MANAGEMENT SDN BHD (EPF)
7. WONG WAI KUAN 390,400 2.11
8. YASUHIRO KASAI 324,000 1.75
9. LEONG LI NAR 290,000 1.57
10. CHIN PHOY HOY 282,800 1.53
11. LIM PUI NGAN 237,000 1.28
12. TAN KIM LAN 216,000 1.17
13. KHAW KHEAN HUAT 182,700 0.99
14. HAUW TIO HIONG 180,000 0.97
15. HOH YIN HEONG 144,100 0.78
16. LIM PUI YING 138,000 0.75
17. CHONG AH SUAN 135,400 0.73
18. CHOW SONG KUANG 123,300 0.67
19. LEE SIOK KIOK 109,600 0.59
20. KIYOAKI TAKANO 108,000 0.58
21. LAI KAM KEONG 104,800 0.57
22. LOO KUAN CHIN 100,000 0.54
23. KONG SIOK YIAN 99,000 0.54
24. GAN CHENG POH 90,000 0.49
25. LIZAWANA BT ABDULLAH @ HO AH KHIN 78,000 0.42
26. HLIB NOMINEES (TEMPATAN) SDN BHD 77,000 0.42
PLEDGED SECURITIES ACCOUNT FOR TAN TEONG KIAN (CCTS)
27. LYE CHIN SIN 74,200 0.40
28. LEE TYAN JEN 72,500 0.39
29. YEOW SIEW KENG 72,000 0.39
30. GOH ENG NGAI 72,000 0.39
TOTAL 10,705,472 57.88
Annual Report 2020
NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Twenty-Third Annual General Meeting (“23rd AGM”) of AEON Credit Service (M)
Berhad will be conducted virtually for the purpose of considering and, if thought fit, passing with or without modifications the
resolutions as set out in this Notice.
Meeting Date : Wednesday, 24 June 2020

Time : 10.30 a.m.
Meeting Platform : https://web.lumiagm.com/
Mode of Communication : i. Submit questions to the Board prior to the 23rd Annual General Meeting (“AGM”) by
emailing to [email protected] no later than 10.30 a.m. on Friday, 19 June 2020.
ii. Pose questions to the Board via real time submissions of typed texts at
https://web.lumiagm.com/ during live streaming of the 23rd AGM.
AGENDA
As Ordinary Business
1. To receive the Audited Financial Statements for the financial year ended (Please refer to the
29 February 2020 together with the Reports of the Directors and Auditors thereon. Explanatory Note (i))
2. To approve the payment of a final dividend of 14.00 sen per ordinary share in respect Ordinary Resolution 1
of the financial year ended 29 February 2020.
3. To approve the Directors’ Fees up to an aggregate amount of RM1.528 million in Ordinary Resolution 2
respect of the financial year ended 29 February 2020 and payments thereof. (Please refer to the
Explanatory Note (ii))
4. To approve the payment of Benefits Payable to the Chairman/Non-Independent Ordinary Resolution 3

Non-Executive Director up to an aggregate amount of RM31,150 from 25 June 2020
until the next AGM of the Company in year 2021.
5. To re-elect the following Directors who are retiring pursuant to Clause 148 of the
Constitution of the Company:
(i) Ng Eng Kiat Ordinary Resolution 4
(ii) Dato’ Md Kamal bin Ismaun Ordinary Resolution 5
(iii) Tomokatsu Yoshitoshi Ordinary Resolution 6
(iv) S Sunthara Moorthy A/L S Subramaniam Ordinary Resolution 7
(v) YBhg. Datuk Adinan bin Maning Ordinary Resolution 8
(vi) Datin Khoo Pek Ling Ordinary Resolution 9
(vii) Datin Yasmin Ahmad Merican Ordinary Resolution 10
(viii) Rashidah binti Abu Bakar Ordinary Resolution 11
(ix) Lee Tyan Jen Ordinary Resolution 12
6. To re-elect the following Directors who are retiring pursuant to Clause 153 of the
Constitution of the Company:
(i) Yuro Kisaka Ordinary Resolution 13
(ii) Masaaki Mangetsu Ordinary Resolution 14
7. To re-appoint Messrs. Deloitte PLT as Auditors of the Company and to authorise the Ordinary Resolution 15
Directors to fix their remuneration.
Annual Report 2020
As Special Business
To consider and, if thought fit, to pass the following resolutions:
8. Proposed Renewal of Authority under Sections 75 and 76 of the Companies Act Ordinary Resolution 16
2016 for the Directors to allot and issue shares (Please refer to the
Explanatory Note (iii))
“THAT pursuant to Sections 75 and 76 of the Companies Act 2016, the Directors
be and are hereby authorised to allot and issue shares in the share capital of the
Company at any time until the conclusion of the next AGM, upon such terms and
conditions and for such purposes as the Directors may in their absolute discretion
deem fit provided that the aggregate number of shares to be issued does not exceed
ten per centum (10%) of the total number of issued shares of the Company for the time
being, subject always to the approval of all relevant regulatory bodies being obtained
for such allotment and issue.”
9. Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Ordinary Resolution 17
Transactions of a Revenue or Trading Nature and Proposed New Shareholders’ (Please refer to the
Mandate for Additional Recurrent Related Party Transactions of a Revenue or Explanatory Note (iv))
Trading Nature (“Proposed Shareholders’ Mandate”)
“THAT, subject to the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia
Securities Berhad (“Bursa Securities”), approval be and is hereby given for the
Company to enter into the recurrent transactions of a revenue or trading nature as set
out in Section 2.2 of the Circular to Shareholders dated 22 May 2020 (“Circular”) with
the related parties mentioned therein which are necessary for the Company’s day-to-
day operations.
THAT the Company be and is hereby authorised to enter into the recurrent transactions
with the related parties mentioned therein provided that:
a) the transactions are in the ordinary course of business and on normal commercial
terms which are not more favourable to the related parties than those generally
available to the public and are not to the detriment of the minority shareholders
of the Company; and
b) the disclosure will be made in the Annual Report of the breakdown of the aggregate
value of the Recurrent Related Party Transactions entered into pursuant to the
Proposed Shareholders’ Mandate during the financial year with details on the
nature and type of Recurrent Related Party Transactions, the names of the
related parties involved in each type of Recurrent Related Party Transactions and
their relationships with the Company.
THAT the authority conferred shall continue to be in force until:
i) the conclusion of the next AGM of the Company following the forthcoming
AGM at which the Proposed Shareholders’ Mandate is approved, at which
time it will lapse, unless by a resolution passed at the AGM, the mandate is
again renewed;
Annual Report 2020

ii) the expiration of the period within which the next AGM of the Company is
required to be held pursuant to Section 340(2) of the Companies Act 2016
(but shall not extend to such extension as may be allowed pursuant to
Section 340(4) of the Companies Act 2016); or
iii) revoked or varied by resolution passed by the shareholders in general

meeting,
whichever is earlier.
AND THAT the Directors of the Company be and are hereby authorised to complete
and do all such acts and things (including executing all such documents as may be
required) as they may consider expedient or necessary to give effect to the Proposed
Shareholders’ Mandate.”
10. To transact any other business of which due notice shall have been given in accordance
with the Companies Act 2016 and the Constitution of the Company.
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the 23rd AGM, a final dividend of 14.00 sen
per ordinary share in respect of the financial year ended 29 February 2020 will be paid to shareholders on 16 July 2020.
The entitlement date for the said dividend shall be 2 July 2020.
A depositor shall qualify for entitlement to the Dividend only in respect of:
(a) shares transferred into the Depositor’s securities account before 4.30 p.m. on 2 July 2020 in respect of transfers; and
(b) shares bought on Bursa Securities on a cum entitlement basis according to the Rules of Bursa Securities.
BY ORDER OF THE BOARD
TAI YIT CHAN (SSM PC No. 202008001023) (MAICSA 7009143)

WONG WEI FONG (SSM PC No. 201908001352) (MAICSA 7006751)
Company Secretaries
Selangor Darul Ehsan

Date: 22 May 2020
Annual Report 2020
NOTES:
1. As part of the initiatives to curb the spread of Coronavirus Disease 2019 (COVID-19), the Company will conduct the
23rd AGM entirely via remote participation and electronic voting facilities. Kindly refer to the attached Administrative
Details for the 23rd AGM for more information.
2. The only venue involved is the broadcast venue for the compliance with Section 327(2) of the Companies Act 2016
that the Chairman of the Meeting shall be present at the main venue of the AGM. No Shareholders/Proxies/Corporate
Representatives from the public should be physically present nor admitted at the broadcast venue on the day of the
AGM.
3. As the 23rd AGM will be conducted as a fully virtual meeting, a member who is not able to participate in the AGM is
encouraged to appoint the Chairman of the Meeting as his/her proxy and indicate the voting instruction in the Form of
Proxy.
4. A member of the Company entitled to attend, participate, speak and vote at this Meeting is entitled to appoint up to two
(2) proxies to attend, participate, speak and vote in his/her stead at the same meeting. Where a member appoints up to
two (2) proxies, the appointments shall be invalid unless he/she specifies the proportions of his/her shareholdings to be
represented by each proxy. A proxy may but need not be a member of the Company.
5. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories)
Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of
each omnibus account it holds.
6. The instrument appointing a proxy by a member who is entitled to participate and vote at the Meeting, shall be in
writing, executed by the appointor or of his/her attorney duly authorised in writing, or if the appointor is a corporation,
either under its common seal or the hand of its officer or its duly authorised attorney. The instrument appointing a proxy
or the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power
or authority shall be deposited at the office of the Company’s Share Registrar office at 11th Floor, Menara Symphony,
No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than
forty-eight (48) hours before the time set for holding the meeting or adjourned meeting, otherwise the instrument of
proxy should not be treated as valid. Alternatively, the instrument appointing a proxy can be deposited electronically
(for individual shareholders only) through the Share Registrar’s website, Boardroom Smart Investor Online Portal at
https://www.boardroomlimited.my/ or via email to [email protected] before the Form of Proxy
lodgement cut-off time as mentioned above.
7. In respect of deposited securities, only members whose names appear on the Record of Depositors on 12 June 2020
(General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend, participate
and/or vote on his/her behalf.
8. Pursuant to Paragraph 8.29A(1) of the MMLR of Bursa Securities, all the resolutions set out in the Notice of the 23rd
AGM will be put to vote by way of poll.
Annual Report 2020

EXPLANATORY NOTES
(i) Item 1 of the Agenda - To receive the Audited Financial Statements
Agenda item 1 is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act 2016 does not
require a formal approval of shareholders for the Audited Financial Statements. Hence, this item on the Agenda is not
put forward for voting.
(ii) Ordinary Resolution 3 - To approve the payment of Benefits Payable to the Chairman/Non-Independent Non-Executive
Director up to an aggregate amount of RM31,150 from 25 June 2020 until the next AGM of the Company in
year 2021
The benefits payable (excluding Directors’ Fees) to Mr. Ng Eng Kiat, the Chairman/Non-Independent Non-Executive
Director of the Company, comprises benefits-in-kind (computed in accordance with Lembaga Hasil Dalam Negeri’s
guideline) for the use of a company car, driver and petrol.
(iii) Ordinary Resolution 16 - Proposed Renewal of Authority under Sections 75 and 76 of the Companies Act 2016 for
the Directors to allot and issue shares
The Company had, during its Twenty-Second AGM held on 20 June 2019, obtained its shareholders’ approval for the
general mandate for issuance of shares pursuant to Sections 75 and 76 of the Companies Act 2016. As at the date of
this notice, the Company has not issued any shares pursuant to that mandate obtained.
The ordinary resolution 16 proposed under item 8 of the Agenda is a renewal of the general mandate for issuance
of shares by the Company under Sections 75 and 76 of Companies Act 2016. The resolution, if passed, will provide
flexibility for the Company and empower the Directors to allot and issue new shares speedily in the Company up to an
amount not exceeding in total ten per centum (10%) of the issued shares of the Company for such purposes as the
Directors consider would be in the interest of the Company. This would eliminate any delay arising from and cost involved
in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless
revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company.
This authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to
further placing of shares for purpose of funding investment project(s), working capital and/or acquisition(s).
(iv) Ordinary Resolution 17 - Proposed Shareholders’ Mandate
Ordinary Resolution 17 proposed under item 9 of the Agenda, if passed, will allow the Company to enter into recurrent
related party transactions in accordance with paragraph 10.09 of the MMLR of Bursa Securities and the necessity to
convene separate general meetings from time to time to seek shareholders’ approval as and when such recurrent related
party transactions occur would not arise. This would reduce substantial administrative time and expenses associated
with the convening of such meetings without compromising the corporate objectives of the Company or affecting the
business opportunities available to the Company. The shareholders’ mandate is subject to renewal on an annual basis.
Further information on the Proposed Shareholders’ Mandate is set out in the Circular to Shareholders dated 22 May
2020 which was despatched together with this Annual Report.
PERSONAL DATA PRIVACY

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, participate, speak and vote at the AGM
and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s
personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its
agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and
compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof)
and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines
(collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies)
and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or
representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies)
and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any
penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.
AEON CREDIT SERVICE (M) BERHAD
Registration No. 199601040414 (412767-V)
(Incorporated in Malaysia) FORM OF PROXY
*I/We (name in full and in block letters) (NRIC No./Passport No./Registration No. )
of , (full address)
being *a member/members of AEON CREDIT SERVICE (M) BERHAD (“Company”), hereby appoint (name in full and in block letters),
(NRIC No. ) of (full address)
and/or failing *him/her, (name in full and in block letters) (NRIC No. )
of (full address) or failing *him/her, #THE CHAIRMAN OF THE MEETING
as *my/our proxy/proxies to vote for *me/us and on *my/our behalf at the Twenty-Third Annual General Meeting (“23rd AGM”) of the Company
to be held as a fully virtual meeting at broadcast venue at Level 3A, UOA Corporate Tower, Avenue 10, The Vertical, Bangsar South City, No. 8,
Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia on Wednesday, 24 June 2020 at 10.30 a.m. and at any adjournment thereof.
* Strike out whichever is inapplicable.
#
Please delete the words “THE CHAIRMAN OF THE MEETING” if you wish to appoint some other person to be your proxy.
I/We indicate with an “x” in the spaces below how I/we wish my/our vote to be cast.
No. Resolutions For Against
ORDINARY BUSINESS
Approval of the payment of a final dividend of 14.00 sen per ordinary share in respect of the financial
Ordinary Resolution 1
year ended 29 February 2020
Approval of the payment of Directors’ Fees of up to an aggregate amount of RM1.528 million in
respect of the financial year ended 29 February 2020
Approval of the payment of Benefits Payable to the Chairman/Non-Independent Non-Executive
Ordinary Resolution 3 Director up to an aggregate amount of RM31,150 from 25 June 2020 until the next AGM of the
Company in year 2021
Ordinary Resolution 4 Re-election of Ng Eng Kiat
Ordinary Resolution 5 Re-election of Dato’ Md Kamal bin Ismaun
Ordinary Resolution 6 Re-election of Tomokatsu Yoshitoshi
Ordinary Resolution 7 Re-election of S Sunthara Moorthy A/L S Subramaniam
Ordinary Resolution 8 Re-election of YBhg. Datuk Adinan bin Maning
Ordinary Resolution 9 Re-election of Datin Khoo Pek Ling
Ordinary Resolution 10 Re-election of Datin Yasmin Ahmad Merican
Ordinary Resolution 11 Re-election of Rashidah binti Abu Bakar
Ordinary Resolution 12 Re-election of Lee Tyan Jen
Ordinary Resolution 13 Re-election of Yuro Kisaka
Ordinary Resolution 14 Re-election of Masaaki Mangetsu
Re-appointment of Messrs. Deloitte PLT as Auditors of the Company and to authorise the Directors
to fix their remuneration
SPECIAL BUSINESS
Proposed Renewal of Authority under Sections 75 and 76 of the Companies Act 2016 for the
Directors to allot and issue shares
Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions of
Ordinary Resolution 17 a Revenue or Trading Nature and Proposed New Shareholders’ Mandate for Additional Recurrent
Related Party Transactions of a Revenue or Trading Nature
Subject to the abovestated voting instructions, my/our proxy/proxies may vote

For appointment of two proxies, percentage of shareholdings to be
or abstain from voting on any resolutions as *he/*she/*they may think fit.
represented by the proxies:-
Percentage
Proxy 1 %
Proxy 2 %
Signed this day of 2020. Total 100%
If appointment of proxy is under hand No. of shares held:

Securities Account No.:
Signed by “individual member/*officer or attorney of member/*authorised (CDS Account No.) (Compulsory)
nominee of Contact No.:
(beneficial owner) Email address:
Date:
If appointment of proxy is under seal Seal
The Common Seal of

was hereto affixed in accordance with its Constitution in the presence of: No. of shares held:
Securities Account No.:
(CDS Account No.) (Compulsory)
Director Director / Secretary Contact No.:
In its capacity as *member/*attorney of member/*authorised nominee of Email address:
(beneficial owner) Date:
* Strike out whichever is not desired. Unless otherwise instructed, the proxy may vote as he/she thinks fit.
Please fold here
POSTAGE
The Share Registrar STAMP
AEON CREDIT SERVICE (M) BERHAD
(Registration No. 199601040414 (412767-V))
Boardroom Share Registrars Sdn. Bhd.
11th Floor, Menara Symphony
No. 5, Jalan Prof. Khoo Kay Kim
Seksyen 13
46200 Petaling Jaya
Selangor Darul Ehsan
Malaysia
Please fold here
Notes:-
6. The instrument appointing a proxy by a member who is entitled to participate and vote at the
1. As part of the initiatives to curb the spread of Coronavirus Disease 2019 (Covid-19), the Company Meeting, shall be in writing, executed by the appointor or of his/her attorney duly authorised in
will conduct the 23rd AGM entirely via remote participation and electronic voting facilities. Kindly writing, or if the appointor is a corporation, either under its common seal or the hand of its officer
refer to the attached Administrative Details for the 23rd AGM for more information. or its duly authorised attorney. The instrument appointing a proxy or the power of attorney or other
2. The only venue involved is the broadcast venue for the compliance with Section 327(2) of the authority, if any, under which it is signed or a notarially certified copy of that power or authority shall
Companies Act 2016 that the Chairman of the Meeting shall be present at the main venue of the be deposited at the office of the Company’s Share Registrar office at 11th Floor, Menara Symphony,
AGM. No Shareholders/Proxies/Corporate Representatives from the public should be physically No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan,
present nor admitted at the broadcast venue on the day of the AGM. Malaysia not less than forty-eight (48) hours before the time set for holding the meeting
or adjourned meeting, otherwise the instrument of proxy should not be treated as valid.
3. As the 23rd AGM will be conducted as a fully virtual meeting, a member who is not able to
Alternatively, the instrument appointing a proxy can be deposited electronically (for individual
participate in the AGM is encouraged to appoint the Chairman of the Meeting as his/her proxy
shareholders only) through the Share Registrar’s website, Boardroom Smart Investor Online
and indicate the voting instruction in the Form of Proxy.
Portal at https://www.boardroomlimited.my/ or via email to [email protected]
4. A member of the Company entitled to attend, participate, speak and vote at this Meeting is before the Form of Proxy lodgement cut-off time as mentioned above.
entitled to appoint up to two (2) proxies to attend, participate, speak and vote in his/her stead
7. In respect of deposited securities, only members whose names appear on the Record of
at the same meeting. Where a member appoints up to two (2) proxies, the appointments shall
Depositors on 12 June 2020 (General Meeting Record of Depositors) shall be eligible to attend
be invalid unless he/she specifies the proportions of his/her shareholdings to be represented by
the meeting or appoint proxy(ies) to attend, participate and/or vote on his/her behalf.
each proxy. A proxy may but need not be a member of the Company.
8. Pursuant to Paragraph 8.29A(1) of the MMLR of Bursa Securities, all the resolutions set out in
5. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the
the Notice of the 23rd AGM will be put to vote by way of poll.
Company for multiple beneficial owners in one securities account (“omnibus account”) as
defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the
number of proxies which the Exempt Authorised Nominee may appoint in respect of each PERSONAL DATA PRIVACY
omnibus account it holds. By submitting an instrument appointing a proxy(ies) and /or representative(s), the member
accepts and agrees to the personal data privacy terms set out in the Notice of the 23rd AGM dated
22 May 2020.
Registration No. 199601040414 (412767-V)

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LEADERSHIP

Ng Eng Kiat was appointed as the Chairman of AEON

He has more than 40 years of experience in the field of

He is currently a member of the audit license interview panel

He is a member of the Remuneration Committee of the

Ng has attended all fourteen (14) Board meetings held during

YURO KISAKA DATO’ MD KAMAL BIN ISMAUN

Kisaka has attended ten (10) Board meetings held during

TOMOKATSU YOSHITOSHI S SUNTHARA MOORTHY A/L S SUBRAMANIAM

Currently, he holds the chair at both Remuneration Committee

Yoshitoshi has attended all fourteen (14) Board meetings held

YBHG. DATUK ADINAN BIN MANING DATIN KHOO PEK LING

YBhg. Datuk Adinan has attended thirteen (13) Board

DATIN YASMIN AHMAD MERICAN RASHIDAH BINTI ABU BAKAR

LEE TYAN JEN

Lee Tyan Jen was appointed as an Executive Director of AEON

She joined AEON Credit in 1998 as an Officer in

She does not hold any directorship in any other public or

1 YURO KISAKA 3 LEE KIT SEONG Relevant Experience:

1. LEE TYAN JEN 2. LEE KIT SEONG

3. AJITH A/L JAYARAM 4. SHIRO ISHIDA

5 KIYOSHI WADA 6 TAN KEAN WOOI 8 KATSUSHI IWAMOTO

5. KIYOSHI WADA 6. TAN KEAN WOOI

7. CHEN HENG GUAN 8. KATSUSHI IWAMOTO

Q4 FY2018 Results Announcement AEON-MDTCA Aidilfitri Shopping Session

22nd Annual General Meeting at Intercontinental Hotel

AEON WALLET ‘MALL WALKING – WALK FOR BETTER HEALTH’

To earn 4,000 AEON points, participants were required to

To further lend its support in honing talents of future world

CORPORATE SOCIAL RESPONSIBILITY PROGRAMMES

CORPORATE SOCIAL RESPONSIBILITY PROGRAMMES

In addition to the volunteer activities that were carried out

CORPORATE SOCIAL RESPONSIBILITY PROGRAMMES

AWARDS, ACCOLADES & CERTIFICATIONS

“HIGHEST RETURN TO SHAREHOLDER

NAMED AS ONE OF 49 MALAYSIAN COMPANIES

HIGHEST CARD GROWTH

HIGHEST PAYMENT VOLUME GROWTH

The Board recognises the importance of pursuing a

• Oversee the integration of sustainability

Sustainability Working Committee

STAKEHOLDER MANAGEMENT [GRI 102-21, 102-40, 102-42, 102-43, 102-44]

Stakeholders Engagement Activities Issues of Interest

Customers • Face to face interactions • Customer service

Employees • Meetings • Culture, diversity and inclusion

Government & • Briefings • Compliance

Shareholders & • Investor Relations • Business strategy

Stakeholders Engagement Activities Issues of Interest

Media • Press release/ interview • Business Strategy

Business Partners • Merchant service • Business opportunities

Local Communities/ • Community activities • Charitable donations

Industry Association • Conferences • Market development and customer

MATERIAL SUSTAINABILITY MATTERS

Material Sustainability Matters is a key concept

Material Sustainability Matters: Economic Social Environmental

High 1. Excellent Customer Experience, Support & Access

Mapping The Material Sustainability Matters to

Material Matters SDGs GRI Standards

5 Business Innovation GRI 102: General Disclosures