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BOARD CHARTER

1. Introduction

The Board of Directors (the “Board”) is responsible for the performance and affairs of 7-Eleven Malaysia Holdings Berhad (the “Company”) and its subsidiaries (collectively, the “Group”). All Board members are expected to show good stewardship, act in a professional manner and should have sound and sufficient knowledge and expertise to enable effective governance and oversight. The Board shall apply the principles of good corporate governance in all its dealings in safeguarding the Company’s assets, the interest of all stakeholders, and to uphold the core values of integrity and enterprise as part of its fiduciary duties and responsibilities.

2. Purpose

The purpose of the Board Charter is to set out the roles, duties and responsibilities as well as processes to enable all Board members to be aware of their duties and responsibilities at all times.

The Board Charter also serves as a comprehensive guide for prospective or new Board members and Senior Management to understand their roles and responsibilities and the commitment of time and contribution expected of them.

This Board Charter is subject to, and should be read in conjunction with, the provisions of the Companies Act, 1965 (“Companies Act”), the Company’s Memorandum and Articles of Association, the Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), the principles and recommendations of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) and any other applicable laws or regulatory requirements.

3. Board’s principal responsibilities

The principal responsibilities of the Board are as follows:

(1) review, evaluate, approve, implement and monitor strategic plans and policies for the Company, taking into consideration the sustainability of the Group’s business;
(2) oversee and monitor the conduct of the businesses, financial performance and major capital commitments of the Company, including monitoring compliance with applicable accounting standards and the integrity and adequacy of financial information disclosure;
(3) identify principal risks and ensure appropriate internal control systems and mitigation measures are implemented to manage these risks;
(4) establish and oversee a succession planning programme for the Company, including appointing, training and setting the remuneration and compensation policy for members of the Board and Senior Management;
(5) establish, review and implement corporate communication and disclosure policies and procedures, taking into consideration the shareholders and investors, other key stakeholders and the public;
(6) review the adequacy and integrity of the internal control systems and management information of the Group; and
(7) develop a corporate code of conduct to address, amongst others, any conflicts of interest relating to Directors, major shareholders and/or Management.

4. Schedule of Matters Reserved for the Board

Whilst the following are matters which are specifically reserved for the Board’s decision, the Board is aware that certain transactions falling within the ambit of the Listing Requirements of Bursa Malaysia shall need shareholders’ approval – in such cases, the Board shall only recommend, pending shareholders’ approval:

Board Structure
(1) Appointment of Directors to fill in casual vacancy and recommendation to shareholders on the appointment and removal of Directors;
(2) Appointment and removal of Company Secretary; and
(3) Establishment of Board Committees and appointment of Board Committee members, approval of Board Committees’ Terms of Reference, including any amendments thereof.

Board Remuneration
(4) Recommendation to shareholders on Directors’ fees for Non-Executive Directors; and
(5) Approval of remuneration packages for Executive Directors.

Company’s/ Group’s operations
(6) Approval of the Company’s strategic plans, budgets and financial results;
(7) Approval of capital expenditure above prescribed thresholds based on formalised limits of authority;
(8) Approval of any major corporate proposals, new business ventures or joint ventures of the Company;
(9) Approval of any material acquisitions and disposals of undertakings and assets by the Company;
(10) Approval of investment of capital projects, which represents significant diversification from the Company’s existing business activities;
(11) Approval of major changes in the activities of the Company;
(12) Approval of treasury polices and bank mandates of the Company;
(13) Approval of limits of authority for the Company.

Financial
(14) Approval of financial statements and their release (including financial reports for announcement to Bursa Malaysia Securities Berhad or the Securities Commission);
(15) Approval of Directors’ Report, Corporate Governance Statement and Internal Control Statement for including in the Company’s Annual Report;
(16) Approval of interim dividends for payment and the recommendation of final dividend or other distribution for shareholders’ approval;
(17) Adoption of accounting policies in line with the Malaysian Financial Reporting Standards; and
(18) Review the adequacy and effectiveness of the Group’s system of risk management and internal control via the Audit Committee.

Others
(19) Granting of power of attorney by the Company;
(20) Entering into any corporate guarantee and indemnity issued by the Company;
(21) Recommendation for changes to the Company’s Memorandum and Articles of Association;
(22) Change in financial year end;
(23) Recommendation for purchase of own shares by the Company;
(24) Recommendation for issue of debt instruments; and
(25) Any other matters requiring the Board’s approval under the limits of authority adopted by the Company.

5. Board Committees

The Board may from time to time establish appropriate Board Committees to assist it in the discharge of its responsibilities.

The Committees that have been established by the Board are as follows:
(a) Audit Committee;
(b) Nominating Committee; and
(c) Remuneration Committee.

Each Committee has its own specific terms of reference as approved by the Board. The powers and authority delegated to these Committees are also set out in the terms of reference of each of the Committees. The terms of reference of the Committees shall be reviewed periodically and amended accordingly after approval by the Board.

The Board may also establish and delegate specific functions to ad hoc committees as and when required.

6. Board Composition
6.1. Membership

The Board shall comprise a balance of Executive and Non-Executive Directors with a mix of suitably qualified and experienced professionals who are experienced, knowledgeable, skilled and competent and have the character and time to effectively discharge their role as Directors of the Company.

The size, composition and diversity of the Board shall be reviewed and determined by the Board, with the assistance of the Nominating Committee, from time to time to reflect the Company’s requirements and to facilitate effective decision-making.

At least two (2) or one third (1/3) of the Board members, whichever is higher, shall be Independent Directors who provide independent judgment and objectivity.

6.2. Chairman of the Board

6.2.1 The Chairman is elected by the Board and will preside at all Board meetings and general meetings of the Company.

6.2.2 The Chairman is responsible for ensuring the integrity and effectiveness of the governance process of the Board.

6.2.3 The Chairman shall act as facilitator at meetings of the Board to ensure that no Directors, whether executive or non-executive, dominates discussion, that appropriate discussion takes place and that relevant opinions among Directors are forthcoming.

The Chairman is responsible for ensuring that all Directors receive timely and relevant information to gain an understanding of the subjects for deliberation prior to meetings, that procedural rules are followed in the conduct of meetings and that decisions made are formally recorded and adopted.

6.2.4 The Chairman is responsible for ensuring effective communication with, as well as representing the Board to, shareholders and relevant stakeholders.

6.2.5 The Chairman is responsible for maintaining regular dialogue with the Chief Executive Officer over all operational matters and will consult with the remainder of the Board members promptly over any matter that gives him or her cause for major concern.

6.2.6 The Chairman shall facilitate the effective contribution of the Non-Executive Directors and ensure constructive relationships are maintained between the Executive Directors and the Non-Executive Directors.

6.3. Chief Executive Officer (the "CEO")

6.3.1 The CEO is appointed by the Board and holds the primary executive responsibility for the Group’s business performance and manages the Group in accordance with the strategies and policies approved by the Board.

6.3.2 The CEO leads the Executive Directors in making and executing day-to-day decisions on the business operations, managing resources and risks in pursuing the corporate objectives of the Group.

6.3.3. The CEO brings material and other relevant matters to the Board, motivates employees, and drives change/innovation and growth within the Group.

6.4. Role of the Executive Directors

6.4.1 The Executive Directors are involved in leadership roles overseeing the day-to- day operations and management within their specific areas of expertise or assigned responsibilities.

6.4.2 The Executive Directors represent the Company at the highest level and are decision makers on matters within their scope and liaise frequently with the CEO and with each other in implementing the Company’s strategic plans approved by the Board.

6.5.Role of the Non-Executive Directors, including Independent Directors

6.5.1 Non-Executive Directors are classified as:

• those who have no direct or indirect pecuniary interest in the Group other than their Directors’ fee related emoluments and their permitted holdings of shares in the Company, i.e. Independent Directors who fulfill Paragraph 1.01 of the Listing Requirements; and
• those who are not employees of the Company or its subsidiaries or affiliated with it in any other way and are not involved in the day-to-day running of business but have pecuniary interest in the Company, either as shareholders, nominee Directors, or otherwise and whether direct or indirect, i.e. Non-Independent Non-Executive Directors.

6.5.2 Non-Executive Directors are not involved in the day-to-day management of the Group but they shall contribute their particular expertise and experience in developing the business strategy.

Non-Executive Directors act as a bridge between Management, shareholders and other stakeholders. They provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests. It is expected of Non-Executive Directors to allocate sufficient time to the Company to perform their duties effectively.

6.5.3 The Independent Non-Executive Directors fulfill a pivotal role in corporate accountability by providing independent view, advice and judgment to ensure a balanced and unbiased decision making process to ensure that the long term interests of all stakeholders are well protected.

6.5.4 The Board (through the Nominating Committee) shall conduct an annual assessment of the independence of the Independent Directors. Where the tenure of an Independent Director exceeds a cumulative term of nine (9) years, the Board shall make recommendation and provide strong justifications to shareholders at a general meeting should it seek to retain the director as an Independent Director. Alternatively, the Independent Director may continue to serve on the Board subject to the Director’s re-designation as a Non- Independent Non-Executive Director.

6.6. Appointment and Re-elections

Where required, the Nominating Committee (and the Remuneration Committee, where relevant) shall assist the Board in identifying and recommending suitable potential candidates with the relevant experience required (including gender, age and ethnicity considerations) for appointment as a Director and for approval by the Board thereafter. Any new Director so appointed shall be subject to re-election at the next Annual General Meeting (“AGM”) to be held immediately following the appointment.

At each AGM of the Company, one third (1/3) of the Board shall retire and be eligible for re-election and that all Directors shall submit themselves for re-election once every three (3) years. A Director over 70 years of age is required to submit himself/herself for re- appointment annually in accordance with Section 129 of the Companies Act.

The evaluation of the Board and each individual Director, including the Chairman, shall be performed annually.

In making the recommendations on selection of candidates for appointment or on Directors for re-election, the Nominating Committee shall consider the following pertaining to the candidates/ Directors concerned:
i) skills, knowledge, expertise and experience;
ii) performance contribution;
iii) character, professionalism and integrity;
iv) number of directorships and other external obligations which may affect the Director’s commitment, including time commitment and value contribution; and
v) in the case of candidates for the position of Independent Non-Executive Directors, the Director’s ability to discharge such responsibilities/ functions as are expected from Independent Non-Executive Directors.

6.7. Directors’ Commitment

Directors are expected to commit sufficient time to perform such duties and responsibilities as expected from them. No Directors shall sit on the boards of more than five (5) listed issuers and before accepting any new directorship (whether for listed issuers or otherwise), the Directors concerned shall notify the Chairman, the notification of which shall include an indication of time that will be spent on the new appointment. The Chairman of the Board shall also do likewise and notify the Board before taking up any additional appointment of directorships.

6.8. Directors’ induction and training

The Group acknowledges that the Directors’ induction process and continuous education is vital for Board members to gain clear insight into the Group as well as keeping them abreast with development of state of economy, technological advances, regulatory updates and management strategies to enhance the Board’s skills and knowledge in discharging its responsibilities effectively.

Directors’ induction may take various forms, including formal and informal sessions, such as the following:
i) time with other Directors to enable further insights and knowledge of the Company; in particular the Chairman and the Company Secretary;
ii) furnishing of a copy of previous Board minutes, at least of the past six (6) months;
iii) visits to key sites/ offices;
iv) additional Board or Board Committee meetings as circumstances warrant during a given year. As in-depth knowledge of the Company’s/ Group’s business is vital for each Director, Management is encouraged to structure Board or Board Committee meetings to allow direct involvement and review of operational activities (for example, by holding Board meetings in field operations and including market/ business activities at Board meetings); and
v) a formal one (1) to two (2) day induction programme, including the elements above, and also presentations by key management personnel.

All Directors appointed to the Board, apart from attending the Mandatory Accreditation Programme of Bursa Securities, shall continue to attend other relevant trainings and seminars to ensure that each Director receives regular briefings and updates on changes in risks, laws and regulations, economic scenario and the industry climate affecting the business, and to further enhance their business acumen and professionalism in discharging their duties to the Company.

The Board, via the Nominating Committee, shall identify the training needs of the Directors through the annual assessment on Board, Board Committees and individual Directors to determine the type of training that may be required by each Director. The cost of the induction, mandatory accreditation programme and/or continuing education programme shall be borne by the Company. The Board shall disclose in the Annual Report the trainings attended by the Directors for the financial year. Where a Director does not attend any training during the financial year, explanations thereof shall be provided by the Director concerned to the Board as well as furnished in the Annual Report of the Company.

7. Company Secretary

The Board shall appoint the Company Secretary, who plays an important advisory role, and ensure that the Company Secretary fulfils the functions of the appointment.

The Company Secretary appointed shall be suitably qualified and competent in order to support the Board in carrying out the roles and responsibilities.

All Directors shall have full access to the advice and services of the Company Secretary who ensures that Board procedures are adhered to at all times and advises the Board on corporate governance issues, and Directors’ responsibilities in complying with relevant legislations and regulations.

The primary responsibilities of the Company Secretary comprise the following:
i) ensuring that Board procedures and applicable rules are observed;
ii) maintaining records of the Board and its meetings as well as ensuring effective management of the Company’s records;
iii) preparing comprehensive minutes to document Board proceedings and ensure conclusions are accurately recorded in a timely manner; and
iv) carrying out other functions as deemed appropriate and instructed by the Board from time to time.

The Board may, on an annual basis, conduct an assessment of the Company Secretary to ensure the Company Secretary possesses the necessary qualifications and competence and keeps abreast with developments in the corporate regulatory landscape so as to effectively carry out his/her relevant duties and responsibilities.

8. Board Meetings

8.1. Meetings of the Board shall be held as frequent as the Board considers appropriate in order to discharge its duties as set out in this Charter but it shall normally meet not less than four (4) times a year. Any Board member, after notifying the Chairman with the reasons thereof, may call for further meetings, if required.

8.2. The proceedings of the Board shall be governed by the Company’s Articles of Association. The Chairman shall chair all Board meetings and if the Chairman of the Board is unavailable for a meeting, the Directors present shall elect from among themselves a Director to act as Chairman of the meeting.

8.3. The Company Secretary, in consultation with the Chairman and the CEO, shall in advance of the financial year schedule the Board and Board Committee meetings and distribute the timetable thereof to all Directors to enable them to plan their activities.

8.4. Board members shall attend all scheduled meetings of the Board, including meetings called on an ad-hoc basis for special matters unless prior notice with reasons has been submitted to the Chairman or Company Secretary. Senior Management or other executives or external advisors may be invited to attend Board meetings, where necessary, to furnish the Board with explanations and comments on the relevant agenda. The Board may also invite external parties such as auditors, solicitors and consultants as and when the need arises.

8.5. Reasonable notice and the detailed agenda, together with the supporting documentation, should be targeted to be circulated seven (7) days in advance of each meeting to the members of the Board and other invitees. Board members shall be fully prepared for Board meetings to be able to provide appropriate and constructive input on matters for discussion and decisions.

8.6. The Directors may participate at a Board meeting by means of telephone and video conference or by other means of communication where Directors need not be present physically. The Directors participating at any such meeting shall be counted in the quorum for such meeting. All resolutions agreed upon by the Directors in such a meeting shall be deemed to be as effective as a resolution passed at a meeting in person of the Directors duly convened and held. All information and documents must be made equally available to all participants prior to, at, or during the meeting.

8.7. In respect of interest in contracts, a Director who has interest, whether directly or indirectly, shall declare his/her interest and thereafter abstain from voting on such contracts or arrangements.

8.8. Meeting notice, agenda and papers

The notice of a Directors’ meeting shall be given in writing at least seven (7) days, or shorter notice where it is unavoidable, prior to the meeting. The Chairman, in conjunction with the Chief Executive Officer and the Company Secretary, shall undertake the primary responsibility for preparing the Board’s agenda. The agenda shall include, amongst other things, matters specifically reserved for the Board’s decision. The Board shall record its deliberation, in terms of the issues discussed, and the conclusions thereof, in discharging its duties and responsibilities.

The agenda shall address high-priority strategic and operational issues, where necessary, and ensure that there is enough time for discussion. Agenda issues shall be aligned with the overall Company’s strategy, including its existing situation, aspiration and priorities.

Prior to Board meetings, all Directors shall also receive the agenda together with a set of Board papers containing information relevant to the business of the meeting. This allows the Directors to obtain further explanations/clarifications from Management, where necessary, to facilitate informed decision making. To allow sufficient time for Directors to consider the relevant information, Board papers and agenda items are endeavor to be circulated at least seven (7) days, or a shorter period where unavoidable, prior to the meeting.

Proceedings of the relevant meetings and the resolutions reached shall be properly recorded by way of minutes of meeting. Minutes are prepared following a Board meeting and are circulated in draft form. The draft minutes shall be re-circulated with the Board papers in readiness for signing at the following meeting. If one or more Directors request their opinion to be noted, the Company Secretary shall comply with the request.

9. Access to Information and Independent Advice

The Board shall have unrestricted access to all Company information, documents, records and property, whether as a full Board or in their individual capacity, to enable them to discharge their duties.

The Board shall ensure that every Board member has access to independent professional advice, both inside and outside the Company, as and when they consider necessary and at the expense of the Company, in order for them to properly perform their duties. If a Director considers such advice necessary for the discharge of his/her duties and responsibilities as Director and, for the benefit of the Company, such Director shall first discuss it with the Chairman and, having done so, shall be free to proceed, where appropriate. Subject to prior approval of the Chairman, the cost of the advice shall be borne by the Company but the Director shall ensure, so far as is practicable, that the cost is reasonable.

10. Directors’ Code of Ethics

The Board is required to observe the Directors’ Code of Ethics as follows:
(a) A Director must act honestly, in good faith and in the best interest of the Company as a whole, and adhere to the principles of integrity, objectivity and accountability;
(b) A Director has to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office;
(c) A Director must recognise that the primary responsibility is to the Company’s shareholders as a whole but should, where appropriate, have regard for the interests of all stakeholders of the Company;
(d) A Director must not take improper advantage of the position of director. The Company’s guidelines on acceptance of gifts and hospitality from third parties shall be adhered to;
(e) A Director must not allow personal interests, or the interest of any associated person, to conflict with the interests of the Company;
(f) A Director has an obligation to be independent in judgment and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board;
(g) A Director shall exercise due care to safeguard any information of a confidential and sensitive nature relating to the Group. Confidential information received by a director in the course of the exercise of their duties as a Director remains the property of the Company and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the Company, or the person from whom the information is provided, or is required by law. Such information shall not be used for personal gain; and
(h) A Director shall declare any personal, professional or business interest that may conflict with their responsibilities as Director of the Company.

11. Assessment of the Board, Board Committee and individual Director

The Board recognises the importance of assessing the effectiveness of individual Directors, the Board as a whole and its Committees. The Board, with the assistance of the Nominating Committee, shall review and evaluate the performance of the Board, Board Committees and individual Directors, including independence assessment of the Independent Non-Executive Directors, on an annual basis.

12. Declaration of Interest

Directors must:
i) declare to the Board (through the Company Secretary and/or Chairman) any actual or potential conflicts of interest with the Company or any company in the Group, whether directly or indirectly, which may exist or be thought to exist as soon as they become aware of the issue. The declaration shall state the fact and the nature and the extent of the conflict which may duly, directly or indirectly be in conflict with his duties as a Director;
ii) take any necessary and reasonable measures to try to resolve the conflict; and
iii) comply with the Companies Act, 1965 or any other regulatory provisions on disclosing interests and restrictions on voting.

If a conflict or potential conflict situation exists, it is required that the conflicted Director shall be absent from the meeting whilst the Board discusses the matter and shall not vote on the matter, unless the other Directors who do not have a material personal interest in the matter have passed a resolution that states that those Directors are satisfied that the interest should not disqualify the Director from being present.

Should there be an actual, potential or perceived conflict of interest between the Company or a related corporation and a Director, or an associate of a Director such as a spouse or other family members, the Director involved shall make full disclosure and act honestly in the best interest of the Company.

An actual, potential or perceived conflict of interest shall not necessarily disqualify an individual Director from the Board provided that full disclosure of the interest has been made in good faith and with due honesty.

The Company Secretary shall facilitate Director’s conflict of interests declarations annually

13. General Meetings

The Annual General Meeting (“AGM”) of the Company serves as the principal forum that provides the opportunity for shareholders to raise questions pertaining to issues in the Annual Report, Audited Financial Statements, and corporate developments in the Group, the resolutions being proposed and on the businesses of the Group.

It is the role of the Board to ensure that the Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”) of the Company are conducted in an efficient manner and serve as crucial mechanisms for shareholder communications. Key ingredients behind this include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the AGM and EGM. The Board shall focus its efforts on the following practices to enhance the effectiveness of General Meeting:
i) ensure that each item of special business included in the notice is accompanied by a full explanation of the effects of the proposed resolution;
ii) for re-election and re-appointment of Directors, ensure that the notice of meeting states which Directors are standing for re-appointment or re-election, with a brief description including matters such as age, relevant experience, list of directorships, date of appointments to the Board, details of participation in Board Committees and whether a particular Director is independent;
iii) ensure that the Chairman provides reasonable time for discussion at the meeting. Where appropriate, the Chairman will also undertake to provide the enquirer with a written answer to any significant question which cannot be answered immediately; and
iv) ensure that there is a channel of communication through the Company Secretary on feedback and queries from shareholders;

The Chairman and the Chief Executive Officer and the external auditors, if so required, will respond to shareholders’ questions during the meeting.

14. Stakeholder Communication and Representation of the Company

The Board is committed to making disclosures and announcements, including annual reports, circular to shareholders, press releases and quarterly financial announcements, on a timely basis to provide shareholders and investors with an overview of the Group’s performance and operation in order for them to make informed decisions.

The Board authorises the Chief Executive Officer to be the official spokesperson for the Company.

The Board has established a Corporate Disclosure Policies and Procedures (“CDPP”) document to guide the Company’s disclosure activities in terms of comprehensiveness, accuracy and timeliness. The Company has established a dedicated section for Investor Relations on the Company’s website, providing information such as, amongst others, the Board Charter and the Annual Report.

15. Adoption and Review of Charter

The Board shall review the Charter from time to time and make any necessary amendments to ensure that it remains consistent with the Board’s objectives and responsibilities.

A copy of this Charter shall be uploaded on the Company’s website in line with the Recommendation of the Malaysian Code on Corporate Governance 2012.