Ranhill Utilities : Sustainability Report 2023

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10THANNUAL GENERAL MEETING

	Ballroom 1 & 2,
25 June 2024, Tuesday,	Intercontinental Kuala Lumpur,
2.30 p.m.	165, Jalan Ampang,
	50450 Kuala Lumpur.

For more information:

Scan the QR code to view our SR2023 https://ranhill.com.my/ sustainability/sustainability- reports/

Our BUSINESSES	WE ARE A RESPONSIBLE GLOBAL BUSINESS, ENSURING A SUSTAINABLE
AND PROFITABILITY IN ALL ASPECTS OF WHERE WE DO BUSINESS.
	BALANCE BETWEEN ENVIRONMENTAL PROTECTION, SOCIAL RESPONSIBILITY
Environment Sector			Engineering Services Sector
Treated Water Supply Services			Engineering, Procurement and Construction
			Management ("EPCM"), Engineering,
			Procurement, Construction and Commissioning

Water, Wastewater Treatment &	("EPCC"), Project Management Consultancy
("PMC"), Operations and Maintenance ("O&M")
Reclaimed Water Treatment
Energy Sector	Non-Revenue Water Management
Energy and Renewable Energy ("RE")

Our REPORTS REPORTING SUITE

Cover

RATIONALE

ANNUAL REPORT 2023 ("AR2023")

AR2023 provides a comprehensive account of Ranhill's financial performance as well as the audited financial accounts of the Group.

It also provides strategic information pertaining to the Group's business and operational strategies, risks and opportunities, outlook and prospects as well as information pertaining to the business model and industry value chain.

SUSTAINABILITY REPORT 2023 ("SR2023")

SR2023 provides a detailed account of the Group's sustainability performance as per its identified material Economic, Environment and Social ("EES") topics.

SR2023 is developed in reference to the Global Reporting Initiative 2021 disclosure requirements, FTSE4Good Bursa Malaysia Index, Sustainability Accounting Standards Board ("SASB") sustainability disclosures and (where relevant), the Taskforce on Climate Related Financial Disclosures ("TCFD").

CORPORATE GOVERNANCE REPORT ("CG2023")

CG2023 demonstrates how Ranhill has applied corporate governance practices of the Malaysian Code of Corporate Governance 2021 ("MCCG 2021") including updates prescribed by the code in FY2023.

As a forward-thinking company, Ranhill Utilities Berhad ("Ranhill") continues to provide the world with the distinctive technologies and innovative thinking that enables a successful transition for industries and businesses towards a more sustainable future. The Group's ecosystem depicted by its Environment, Energy and Engineering Services sectors, deliver stellar solutions that enable businesses and industries to navigate a post pandemic, globalised business environment and to progressively transform and evolve and to remain relevant amidst a changing world. Ranhill's proven track record and distinctive business model is harnessed to chart a course of stellar prospects while navigating the challenges towards unlocking the full potential of companies and industries by providing a pathway towards embracing the future.

SUSTAINABILITY AND ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")

As part of our commitment to protect the environment, this sustainability report is printed on FSC® certified mix paper.

What 's Inside

1	ABOUT RANHILL UTILITIES
	BERHAD

1. Corporate Philosophy
2. Ranhill Fact Sheet
3. Our Presence

1. Group Financial Highlights

1. Non-FinancialHighlights

2	MESSAGE FROM CHAIRMAN AND
	CHIEF EXECUTIVE
3	ABOUT THIS REPORT

13 Introduction

1. Scope and Boundary

1. References

1. Report Quality & Data Assurance

1. Internal Assurance
2. External Assurance

14 Statement of Use

14 Forward Looking Statements

1. Report Availability and Feedback

1. Membership in Associations

4	MANAGEMENT'S APPROACH TO
	SUSTAINABILITY

15 Introduction

5	SUSTAINABILITY GOVERNANCE
	STRUCTURE

16 Introduction

18 Board Remuneration and Sustainability Targets

1. Promoting Good Governance through Internal Policies
2. Code of Conduct and Business Ethics

19 Formation of Integrity Working

Committee

1. Strong Anti-Corruption Stance

1. Extending Anti-Corruption Stance to the Value Chain
2. Anti-CorruptionTraining

1. Assessment of Operations at Higher Risk to Corruption
2. Whistleblowing Channel
3. Political Views and Contributions

1. Data Privacy and Security

1. Operational Site Certification
2. Board Diversity and Composition

6 STAKEHOLDER ENGAGEMENT

24 Introduction

24 Stakeholder Engagement Table

7	ASSESSING AND PRIORITISING
	MATERIAL TOPICS

29 Materiality Matrix

8 ECONOMIC PERFORMANCE

31 Economic Values Created

1. Supporting Local Procurement

1. Supplier Assessment

9	ENVIRONMENTAL AWARENESS
	AND PRESERVATION

1. Introduction
2. Circular Economy Application - Greywater Production
3. Circular Economy - CCGT Driven Energy Generation
4. Responding Proactively to Climate Change Impacts

41 Energy Consumption

1. GHG and Carbon Emissions

1. Preserving Water Resources

1. Waste Management

1. Ensuring Environmental Regulatory Compliance

1. Biodiversity

10	CONTRIBUTIONS TOWARDS
	SOCIAL WELLBEING & CAPACITY

BUILDING

56 Introduction

1. Inspirational Workplace & Culture

1. Equal Opportunity Workplace (Diversity & Inclusivity)

1. Recruitment & Selection
2. Employee Engagement
3. Promotions and Rewards Management

1. Collective Bargaining and Freedom of Association
2. Minimum Notice Period for Operational Changes

1. Grievance Mechanism & Procedures
2. Employees' Competency and Career Development (Training)

11ENHANCING GOVERNANCE

ACROSS THE GROUP

1. Occupational Safety and Health

1. Public Health and Safety
2. Customer Satisfaction & Trust

12TASKFORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES

1. Governance
2. Strategy
3. Risk
4. Metrics and Targets

13BURSA ESG PERFORMANCE DATA TABLE

14GRI STANDARDS CONTENT INDEX

15SASB DISCLOSURES (UTILITIES)

16APPENDICES

92 Appendix One: External Assurance Statement

96 Appendix Two: Ranhill SAJ Compliance to Span KPIs

99 Appendix Three: Thailand Operation Compliance to

Regulators' KPIs

101 Appendix Four: Ranhill GHG Inventory and Carbon Accounting Analysis

103 Appendix Five: List of Training Courses

109 Appendix Six: List of Employee Engagement Activities

RANHILL UTILITIES BERHAD • SUSTAINABILITY REPORT 2023

02

CORPORATE PHILOSOPHY

OUR MISSION

TO BE A REGIONAL LEADER IN WATER, WASTEWATER AND ENERGY WITH EMPHASIS ON CIRCULAR ECONOMY AND A LEADER IN TRANSITION ENERGY ENGINEERING SOLUTIONS

OUR VISION

ENRICHING LIVES THROUGH SUSTAINABLE SOLUTIONS

OUR VALUES

1 RESPECT

Respect for the environment, communities we serve and for our employees.

2 RESOURCEFUL

Determination in sourcing and adopting innovative solutions.

3 RESULT

ENRICHING LIVES

Ranhill aspires to lift the quality of life by being at the forefront of nation- building through sustainable environment and energy solutions using innovative and clean technology.

SUSTAINABLE SOLUTIONS

Ranhill aspires to meet the needs for an enhanced quality of life and a cleaner planet through innovation.

We subscribe to the triple-bottom-line approach, to the Environment (Planet) and Communities (People) whilst achieving our Financial Objective (Profit).

We inspire our employees to be innovative in providing solutions beyond customers' expectations.

Focussed on delivering growth and value to our stakeholders.

															ABOUT RANHILL UTILITIES BERHAD
03		2	3	4	5	6	7	8	9	10	11	12	13	14	15	16

RANHILL FACT SHEET

Provides Clean Water to	99.8%	46		724
4 Million	Water Supply Coverage	Water Treatment		Active Treated Water
Consumers in Johor,	Rural / Urban	Plants		Reservoirs
Malaysia	100%
	Clean Water Supply
	Coverage (Urban)
24,150 KM	3,623 KM	20,527 KM	Total Capacity
Total Pipelines	Mains Distribution	Reticulation		2,171 MLD
				Treated Water
Ranhill had engineered:		Total Capacity of Water, Wastewater & Reclaimed Water
• Over 800 MLD Water Treatment Plants	Treatment Plant in International Footprint
• Over 601 KM of Highways		Thailand:		China :
• Over 200 KM of Railway		117 MLD		227 MLD
• Over 20,000 Acres of Landbank
• Over 4 Million sq.m of Building Space
Provide Electricity	Own and Operates Combined Cycle Gas	Owns and Operates solar power plant
1.2 Million	Turbine (CCGT)

People in Sabah,	Rugading:	Teluk Salut:	Bidor:
Malaysia	190 MW	190 MW	50 MW
NRW Level	Employees		Total Percentage Capacity of Water, Wastewater and Reclaimed
25.0%	4,203		Water Treatment Plant
			Local:	International:
			86.0%	14.0%

You can find more details on our website on www.ranhill.com.my

Ranhill is

a constituent of the

FTSE4Good Bursa Malaysia Index since 2019

Participant of

United Nation Global Compact (UNGC) since 2008

The Edge ESG

Award 2022 (Gold)

Utilities Category

The Edge ESG

Award 2023 (Gold)

Utilities Category

RANHILL UTILITIES BERHAD • SUSTAINABILITY REPORT 2023

04

OUR PRESENCE

CHINA

THAILAND

MALAYSIA

WE ASPIRE TO LIFT THE QUALITY OF LIFE BY BEING AT THE FOREFRONT OF NATION

• BUILDING THROUGH SUSTAINABLE ENVIRONMENT AND
  ENERGY SOLUTIONS USING INNOVATIVE AND
  CLEAN TECHNOLOGY

															ABOUT RANHILL UTILITIES BERHAD
05		2	3	4	5	6	7	8	9	10	11	12	13	14	15	16

OUR PRESENCE

MALAYSIA		THAILAND

Water Supply Services in Johor, Malaysia

• Exclusive licence to provide source to tap water supply services throughout the State of Johor
• 46 Water treatment plants
• The second largest water operations in the country with total design capacity of 2,171 MLD

Engineering and Infrastructure Solutions Specialist

• ExxonMobil Exploration and Production Malaysia Inc ("EMEPMI") - Provision of Engineering, Procurement and Construction Management ("EPCM") Services
• Develop the Kasawari Gas Development Project as part of the overall block SK316 development strategy off the coast of Sarawak
• Shell Rosmari & Marjoram Project Offshore Gas Plant
• Senai-PasirGudang-Desaru Expressway (with 500m main span cable-stayed bridge)
• Kuala Lumpur International Airport and KLCC
• The world's largest Carbon Capture Storage ("CCS") project - the Malaysia Kasawari CCS in Sarawak

Power Business in Sabah, Malaysia

• The largest IPP in Sabah, Malaysia
• Owns and operates two 190 MW CCGT power plants in Kota Kinabalu Industrial Park
• 21-yearPPA with SESB for the sale of up to 380 MW of electricity generating capacity
• Awarded the EPCC and operations for the 100 MW Kimanis CCGT power plant

NRW Specialist

• Ranhill has saved more than 774 MLD
• Developed 251 strategic and all mains' models with over 1 million total number of connections
• Designed and established over 1,196 District Metered Areas ("DMAs")
• Over 258 KM of pipe works replaced

• Total of 9 water, wastewater and reclaimed water treatment plants
• 100 MLD of total water and wastewater treatment capacity
• 17 MLD of reclaimed water treatment plant capacity

OTHER COUNTRIES

(Multi Disciplinary of Engineering Services)

• Engineering works for Santos WHP EPCI with Sapura Engineering, Western Australia
• Pre-FEEDfor HI Development Project, Nigeria
• Engineering Support to Sembcorp Marine under an EPCI contract awarded by North Oil Company ("NOC") for Gallaf Batch 2 project, located field, off Qatar
• Block 15-1/05 Lac Da Vang Oil Development, Vietnam
• Neptune Deep Project, a FEED for gas de-hydration fixed platform (NNM CPP) in 120m of water in the Black Sea off the coast of Romania
• Zawtika M-9 Development Project, Offshore, Myanmar
• Marina Doha Residential Doha Office Tower, Qatar
• Built a 113.5 MLD potable water treatment plant for Haldia Development in West Bengal
• Bangladesh-Engineeringfor Public Sanitation Facility for 23 districts funded by the Islamic Development Bank
• First designed for float over project and detailed design, procurement support in Offshore Bombay, India for the B193 Development Project
• Detailed engineering and project management services of 10,800 residential in Tajura, Libya
• Provide project management services to Saudi Aramco, King Abdullah University of Science and Technology ("KAUST")
• Provide management and construction services for King Saud University for Girls ("KSUG") in Riyadh
• P-82Floating Production Storage and Offloading ("FPSO") contract, which will incorporate carbon capture and closed flare technology features in Brazil

CHINA

• Concession agreement with local authorities or industrial park management councils
• 12 wastewater treatment plants with consessions ranging from
  25-30 years
• Total treatment capacity of 227 MLD

RANHILL UTILITIES BERHAD • SUSTAINABILITY REPORT 2023

06

GROUP FINANCIAL HIGHLIGHTS

Revenue

(RM' Million)

YOY

32.1%

1,530.91,726.32,279.8FY2021 FY2022 FY2023

Revenue

	Gross Profit
(RM' Million)
	YOY
	16.3%
22.1%	19.3%
		17.0%
339.0	333.2	387.4
FY2021	FY2022	FY2023
GP
Margin (%)

Profit Before Tax
(RM' Million)
	YOY
	27.3%
	11.8%
6.1%		6.5%
93.3	203.4	147.8
FY2021	FY2022	FY2023
PBT
Margin (%)

	Profit After
Tax Minority Interest
(RM' Million)
	YOY
	44.6%
	5.5%
2.0%		2.3%
30.6	95.3	52.8
FY2021	FY2022	FY2023
PATAMI
Margin (%)

															ABOUT RANHILL UTILITIES BERHAD
07		2	3	4	5	6	7	8	9	10	11	12	13	14	15	16

GROUP FINANCIAL HIGHLIGHTS

Dividend Pay Out (RM' Million)

82%

53.3

FY2018

98%

53.3

FY2019

79%

29.8

FY2020

42%

12.7

FY2021

34%

32.2

FY2022

36.6%

19.3

FY2023

Dividend Pay-Out

Dividend Pay-Out Ratio (%)

Dividend per Share and Dividend Yield

5.0%

6.0

FY2018

4.7%

5.0

FY2019

3.1%

2.8

FY2020

1.8%

1.0

FY2021

5.5%

2.5

FY2022

1.7%

1.5

FY2023

Dividend

Dividend Yield* (%)

• Dividend yields are based on financial year end closing price.

Revenue By Business Sector (RM' Million)

Environment Sector

Energy Sector

Engineering Services Sector

1,159.0

FY2021

1,173.7

FY2022

1,292.3

FY2023

220.9

FY2021

263.9

FY2022

414.3

FY2023

151.0

FY2021

288.7

FY2022

573.2

FY2023

Segmental Profit and Margin By Business Sector (RM' Million)

Environment Sector

18.6%

Energy Sector

4.2%

Engineering Services Sector

28.6%

9.7%

112.9

FY2021

217.9

FY2022

9.2%

118.7

FY2023

9.3

(8.2)

(4.5)

(1.1%)

(3.10%)

FY2021 FY2022 FY2023

	9.2%	12.1%
43.2*		26.7		69.5
FY2021		FY2022	FY2023

(%) Margin

Note * : Includes recognition of Deffered Tax Assets of RM32.5 million.

RANHILL UTILITIES BERHAD • SUSTAINABILITY REPORT 2023

08

NON-FINANCIAL HIGHLIGHTS

Ranhill measures its EES progress against the four pillars of its sustainability framework and selected UN SDGs.

ENVIRONMENTAL AWARENESS & PERSEVERANCE

UN SDGS

ACHIEVEMENTS AND HIGHLIGHTS

Group

• Commenced collaboration with the Malaysia Green Technology and Climate Change Corporation ("MGTC") to implement a progressive adoption of the recommendations under the Taskforce on Climate Related Disclosures ("TCFD") framework.

Ranhill SAJ, RWS, RWT, RWTT and AnuRAK

• Compliance to all SPAN KPIs in 2023.
• Continued expansion and refurbishment of the water infrastructure network in Johor.
• 681,406,791 m3 of treated water produced for Johor.
• Production of 28 MLD of greywater; 17 MLD and 11 MLD from Thailand and Forest City, Malaysia respectively.
• 293,628 kWh of clean energy generated from mini solar and mini hydro installations at WTPs / 222,570.1 Kgs Co2e avoided.
• 12 additional District Metered Areas ("DMAs") established, bringing total to 1,196.
• Completed the PR1JB (Johor Pipe Rehab) contract.
• Awarded the 2.0 MLD Desalination Plant at Sungai Simpang Arang, Gelang Patah, Johor.

RSE

• Continued compliance with all KPIs set by Sabah Electric Sdn Bhd ("SESB") including air emissions, effluents and noise levels.
• Despatched total energy of 2,617 GWh to the Sabah electricity grid.

RBSB

• Expanded order book to RM416.8 million in 2023.
• Received 'Best Dam Safety Towards Community Award' for the Klang Gate Dam Break Analysis Study.
• Completed 50 MW LSS plant in Bidor, achieving COD in February 2024.

RW

• Secured were the Qatar North Field Production Sustainability ("NFPS") Offshore Compression Complexes Project and the ISDN China contract.
• Continued to achieve strong progress on existing projects in hand including the world's largest CCUS project: Malaysia Kasawari CCUS located in Sarawak.

FUTURE PLANS

• 24.5% NRW level target for Johor by 2025 which will contribute to the National NRW level target of 31% in 2025.
• Increase reclaimed plant capacity.
• Increased use of solar and mini hydro at more WTPs.
• Committed to 25% reduction in emissions per electricity generated in Energy Business and 30% emissions reduction in Water Business by 2030.
• Continuous enforcement against polluters and water thieves in concerted efforts with regulatory authorities.
• Reduce Scope 1 and Scope 2 emission level as compared to 2022 base year by 90% as early as 2050.