Ranhill Utilities : Corporate Governance Report 2023

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	5272
COMPANY NAME	:	RANHILL UTILITIES BERHAD
FINANCIAL YEAR	:	December 31, 2023

OUTLINE:

SECTION A - DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing Requirements.

SECTION B - DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA MALAYSIA Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures) of the Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is only applicable for financial institutions or any other institutions that are listed on the Exchange that are required to comply with the above Guidelines.

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SECTION A - DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing Requirements.

Intended Outcome

Every company is headed by a board, which assumes responsibility for the company's leadership and is collectively responsible for meeting the objectives and goals of the company.

Practice 1.1

The board should set the company's strategic aims, ensure that the necessary resources are

in place for the company to meet its objectives and review management performance. The

board should set the company's values and standards, and ensure that its obligations to its

shareholders and other stakeholders are understood and met.

Application	:	Applied
Explanation on	:	1)	The Board of Ranhill Utilities Berhad ("Ranhill"/"the
application of the			Company") continues to execute its fiduciary duties to use
practice			reasonable care, skill and diligence in line with Section 211
			(1) and (2) and Section 213 (1), (2) and (3) of the Companies
			Act 2016.
			The Board is responsible for ensuring that the Group remains
			on track toward realizing its set business objectives and
			goals. In fulfilling this duty, the Board has developed an
			annual business plan, which charts the course forward for
			the Group. As the highest decision-making body, the Board
			sets the tone at the top by prioritizing business sustainability
			and corporate governance.
			The Board is guided by its Board Charter, which stipulates
			the roles and responsibilities, the power and authority vested
			in the Board and other required guidance in enabling the
			Board to discharge its duties. This includes matters reserved
			for the Board's approval, and those, which the Board may
			delegate to the Board Committees, Chief Executive ("CE")
			and key senior management. The delegation of duties and
			their limit of authority are set out in Ranhill Authority Manual
			("RAM") and Terms of Reference ("ToR") of the Board
			Committees respectively. The Board Charter is available on
			the website at www.ranhill.com.my.
		2)	The Board has established various Board Committees to
			facilitate the execution of its duties. Each Committee has its
			own respective ToR to facilitate the execution of its roles and
			responsibilities. The ToRs are also available on the
			Company's website at www.ranhill.com.my.
			Via the Audit Committee ("AC") the Board ensures:-

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• Ranhill's audit and accounting practices are in line with recognized accounting practices such as the Malaysian
  Financial Reporting Standards ("MFRS") and the International Financial Reporting Standards ("IFRS");
• monitoring the Group's operational and financial performance, reviewing the Group's business processes, accounting functions, financial reporting and internal controls;
• enhancing the independence of the external and internal function; ensuring effective ethics programme is implemented and monitoring the compliance of the
  Group's established policies and procedures;
• reviewing the investigation reports on fraud or irregularities from the person(s) carrying out the internal audit function; and
• overseeing the implementation of the Group's Sustainability strategies and priorities and targets as well as evaluating the Sustainability risks and opportunities.

Via Governance and Risk Management Committee

("GRMC"):-

• The Board looks to effectively address the Group's risk exposure. This encompasses reviewing and assessing risk exposure including the viability of the investment and divestment proposals, acquisitions, mergers, and funding options.
• Overseeing the implementation of the anti-corruption framework, policies, and procedures for corruption risk assessments, reviewing and assessing the performance, management, and adequacy of tools, systems, and processes for corruption risk management.

Via Nominating and Remuneration Committee ("NRC") and Long Term Incentive Plan ("LTIP") Committee, the Board ensures:-

1. • There is effective succession planning for the Board, and the Company's remuneration plan is comparative to the industry benchmark;
   • LTIP Committee assists the NRC/Board in overseeing the implementation of the LTIP scheme.
2. The Group's long-term profitability and sustainability are monitored, whereby the Board has on a yearly basis reviewed, deliberated and considered the Group Business Plan for the next financial year and the projections for the subsequent 2 years thereafter. Key strategic issues were outlined and the broad goals and objectives are set for the implementation and execution. This includes ensuring continued smooth operations of the water, energy and engineering as well as in-depth reviews on the Group's cost- effectiveness in ensuring the businesses would be properly executed within the budget and financing cost. This includes identifying mitigation plan to minimize loss and risk

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exposures and close monitoring of the Group's performance through appropriate measures.

1. Towards the corporate governance value within the Group, the Board ensures the corporate governance framework had been appropriately set in place for implementation and adoption by the Group; and ensures the corporate governance framework is updated to be in line with the latest changes. Key areas of corporate governance strengthened include anti-corruption, business ethics, corporate integrity and risk, and a high level of compliance with regulatory's key performance indicators.
2. The integrity of the Company towards effective communication and engagement with its shareholders and stakeholders lies on the Board and senior management. The
   Company's Investor Relation Policy provides guidance towards management and employees to effectively disseminate material information to shareholders, prospective investors and stakeholders. The policy would be accessible on Ranhill Intranet, the online platform for the internal publication and dissemination of information to employees of the Group.

The Board acknowledged that employees' contribution is also part and partial of salient factors to the success of the Company and for the Board to achieve and meet the Company's goal. The Group Human Strategic Plan 2021-2026 which was endorsed in 2021 provides guidelines for the Group's human capital development and succession planning. The plan is monitored to ensure the implementation will be as per the programmes and timeline set. Ensuring also there will be a well-structured and clear division of tasks and job scopes. High potential key leaders are placed at critical positions to facilitate the execution of the Group task appropriately, effectively and strategically.

Explanation for	:
departure

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure:

Timeframe:

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Intended Outcome

Every company is headed by a board, which assumes responsibility for the company's

leadership and is collectively responsible for meeting the objectives and goals of the company.

Practice 1.2

A Chairman of the board who is responsible for instilling good corporate governance practices, leadership and effectiveness of the board is appointed.

Application	:	Applied
Explanation on	:	The Board is chaired by Tan Sri Hamdan Mohamad, Chairman
application of the		and Chief Executive ("Chairman & CE") of the Company. Tan Sri
practice		Hamdan is also a major shareholder of the Company through his
		direct and indirect shareholdings in the Company. His profile is set
		out on page 94 of the Annual Report 2023.
		Tan Sri Hamdan has effectively fulfilled the responsibilities of the
		Group Chairman as provided for in the Group's Board Charter. In
		essence, as Chairman, Tan Sri Hamdan had during the financial
		year demonstrated the following:-
		a)	Demonstrated strategic oversight and leadership in his role
			as Chairman towards enabling the Board to effectively
			discharge its roles and responsibilities;
		b)	In consultation with management and the Company
			Secretary, set out the Board agenda for Board and Board
			committees meetings;
		c)	With the assistance of the Company Secretary, ensured
			Board members received complete and accurate
			information promptly to prepare accordingly for Board
			meetings;
		d)	Helming board meetings and facilitating healthy
			discussions to ensure the effective contribution of all
			directors;
		e)	Encouraged active participation and allowing dissenting
			views to be freely expressed in all Board meetings;
		f)	Managing the interface between Board and management;
		g)	Ensured appropriate steps were taken to provide effective
			communication with stakeholders and that their views were
			communicated to the Board as a whole;
		h)	Chaired the Annual General Meeting and ensured
			questions raised were answered;
		i)	Led the Board in establishing and implementing the
			practice of good corporate governance in the Company;
		j)	Facilitated effective contribution of Non-Executive Directors
			and ensured constructive discussions at Board meetings;
			and
		k)	Ensured that all directors are properly briefed on issues
			arising at Board meetings and there is sufficient time
			provided for discussion on complex or contentious issues
			and where appropriate, arranging for informal meetings
			beforehand to enable thorough preparations.
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Explanation for	:
departure

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure:

Timeframe:

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Intended Outcome

Every company is headed by a board, which assumes responsibility for the company's

leadership and is collectively responsible for meeting the objectives and goals of the company.

Practice 1.3

The positions of Chairman and CEO are held by different individuals.

Application	:	Departure
Explanation on	:
application of the
practice
Explanation for	:	Tan Sri Hamdan Mohamad, the Chairman & CE of the Company.
departure		Given the justification provided below, the Board is of the view that
		the combined position of Chairman & CE is strategic to the
		Company as well as the Group.
		1. The Chairman & CE has considerable experience and proven
		expertise, including longstanding track record in managing the
		Company. He is also well-versed in the water, energy and
		infrastructure sectors and has in-depth knowledge of the
		Group's operations. The Chairman & CE is also well abreast
		with the latest trends and developments arising from the
		PESTLE environment that may impact the business model
		and related operations.
		2. Given the points mentioned in No.1, the Chairman & CE is
		capable of leading and guiding discussions, as well as briefing
		the Board promptly on issues and developments. This
		enhance the Board's collective ability to make more informed
		decisions in the best interest of the Group.
		Being the CE, he is accountable to the Board and shall continue
		to report to the Board on all Group matters including strategic
		decision-making on business and operational matters. In
		performing his duties as CE, he is ably supported by an
		effective senior leadership team comprising Chief Financial
		Officer, Chief Operating Officer, Chief Corporate Services
		Officer, Chief Commercial Officer, Chief Merger and
		Acquisition Officer and Chief Compliance Officer.
		3. The unified leadership has enabled clear lines of command
		communicated throughout the Group, enabling a clearer focus
		and shared purpose across the Management, extending to the
		management of subsidiary companies. It also has expedited
		critical business decisions as well as expedited the business
		processes, activities, and adaption to the changes to meet the
		current standards and projections in a more timely manner.
		4. The Board ensures there will be continued independence,
		especially independent directors who have been tasked with
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playing an increased role in ensuring sufficient checks and balances and that a strong degree of independent thinking and judgment is practiced for deliberation and decision- making.

The present Board members of five Independent Non- Executive Directors ("INED"), four Non-Independent Executive Directors ("NIED") and one Non-IndependentNon-Executive Director ("NINED") are highly experienced corporate leaders, with extensive skills, professional qualifications and capabilities.

The directors, especially the independent directors ("Independent Directors") will continue to diligently play their role in ensuring effective oversight of management as well as to support objective and strong independent deliberation, review, and decision-making. They remain independent and impartial in discharging their duties and safeguarding shareholders' interests including minority shareholders.

5. The NRC and the Board have assessed and considered the independence of the Independent Directors, and are satisfied that they are capable of demonstrating objective and independent views, advice and judgment to contribute to the Board decision-making by bringing in the quality of detached impartiality.

The Board is of the view that it is in the best interest of the

Company and the Group to maintain the current arrangement.

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure	:	Please explain the measure(s) the company has taken or intend to take
		to adopt the practice.
Timeframe	:	Choose an item.

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Intended Outcome

Every company is headed by a board, which assumes responsibility for the company's leadership and is collectively responsible for meeting the objectives and goals of the company.

Practice 1.4

The Chairman of the board should not be a member of the Audit Committee, Nomination Committee or Remuneration Committee

Note: If the board Chairman is not a member of any of these specified committees, but the board allows the Chairman to participate in any or all of these committees' meetings, by way of invitation, then the status of this practice should be a 'Departure'.

Application	:	Departure
Explanation on	:
application of the
practice
Explanation for	:	The Chairman & CE is not a member of the AC or NRC of Ranhill.
departure		The Chairman & CE is only an invitee to meetings of both
		committees. Such invitations are made only as required and are
		based on the following considerations:
		1) The Chairman & CE is responsible for providing leadership to
		the management of the Group. Hence, his presence at both
		committee meetings is beneficial in providing necessary
		updates and presenting business-related information that will
		support more informed decision-making by both committees,
		especially pertaining to vital matters or issues.
		2) The sufficient and competent independent directors on both
		committees ensure sufficient checks and balances and
		objective and independent deliberation and decision-making.
		3) The Board and Board committees have ensured the Chairman
		& CE will not participate in any discussion and decision-
		making of any transactions related to the Chairman		& CE that
		might lead to any actual or potential conflict of interests
		situation.
		The Board is of the view that it is in the best interest of the
		Company and the Group to maintain the current arrangement.

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure	:	Please explain the measure(s) the company has taken or intend to take
		to adopt the practice.
Timeframe	:	Choose an item.

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Intended Outcome

Every company is headed by a board, which assumes responsibility for the company's leadership and is collectively responsible for meeting the objectives and goals of the company.

Practice 1.5

The board is supported by a suitably qualified and competent Company Secretary to provide sound governance advice, ensure adherence to rules and procedures, and advocate adoption of corporate governance best practices.

Application	:	Applied
Explanation on	:	The Group employs the service of a qualified Chartered Company
application of the		Secretary - Lau Bey Ling (MAICSA No: 7001523/PC No.
practice		201908004064) who has over 20 years of experience providing
		secretarial services, including public listed companies.
		In addition, the Company engages an External Secretary - Leong
		Shiak Wan (MAICSA No: 7012855/PC No. 202008002757) to
		provide additional corporate secretarial support.
		Directors have unrestricted access to the advice and services of
		both the Company Secretaries.
		Together, the expertise and experience of both individuals allow
		for the effective facilitation of Board and Board Committee
		meetings as well as the performance of other necessary duties to
		support the Board pertaining to the Group's constitution and
		ensuring Board policies and procedures are by set rules and
		regulations.
		The Company Secretaries' functions include (but are not limited
		to):
		∙ Advising the Directors of their duties and responsibilities;
		∙ Advising the Directors of obligations to disclose their interest
			in securities, disclosure of any conflict of interest and related
			party transaction;
		∙	Advising the Directors of the prohibition on dealing in
			securities during the closed period and restriction on
			disclosure of price-sensitive information;
		∙	Prepare agendas of meetings for Board and Board
			Committees;
		∙ Attend all Board and Board Committees meetings and ensure
			that meetings are properly convened, and that accurate and
			proper records of the proceedings and resolutions passed are
			taken and maintained accordingly;
		∙	Ensuring the appointment of new Directors, re-appointment
			and resignation of Directors are in accordance with the
			relevant legislation;
		∙	Ensuring execution of assessment for Directors, Board and
			Board Committees;
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