Ranhill Utilities : Annual 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 AR2023 https://ranhill.com.my/ investor-relations/reports-presentations/

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 ("NRW")
Energy and Renewable Energy ("RE")

Cover RATIONALE

ANNUAL REPORT 2023 ("AR2023")

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")

Our ESG and sustainability agenda reflects our commitment to reducing the environmental impact of our business as a principal focus area. This is underpinned by excellence across our other ESG priorities.

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

Read more on Ranhill's global efforts on Sustainability

by downloading our latest Sustainability Report here

What 's Inside

1	BUSINESS OVERVIEW	2	PERFORMANCE REVIEW	3	SUSTAINABILITY
02	Corporate Philosophy	28	Message From Chairman and Chief	64	Sustainability Statement
03	Ranhill Fact Sheet		Executive
04	Group Corporate Profile	32	Group Financial Highlights
08	Our Presence	34	Management Discussion & Analysis
10	Corporate Information
12	Our Approach to Value Creation
14	Our Value Creation Model
16	Our Business Model
23	Our Strategic Snapshot
27	Awards and Recognition
4	GOVERNANCE	5	FINANCIAL STATEMENTS	6	OTHER INFORMATION
94	Board of Directors	139	Directors' Report	266	Property Owned by Our Group
96	Board of Directors' Profile	146	Independent Auditors' Report	267	Disclosure of Recurrent Related
107	Key Senior Managements' Profile	152	Statements of Profit or Loss and		Party Transactions
112	Corporate Governance Overview		other Comprehensive Income	270	Analysis of Shareholdings
	Statement	153	Statements of Financial Position	274	Notice of Annual General Meeting
130	Additional Compliance Information	155	Statements of Changes in Equity	283	Statement Accompanying the
131	Audit Committee Report	158	Statements of Cash Flows		Notice of Annual General Meeting
134	Statement on Risk Management	161	Notes to the Financial Statements	•	Proxy Form
	and Internal Control	265	Statement by Directors
137	Directors' Responsibility Statement	265	Statutory Declaration

RANHILL UTILITIES BERHAD • ANNUAL 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.

03	BUSINESS OVERVIEW	1		2		3		4		5		6

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	Participant of
a constituent of the	United Nation
FTSE4Good Bursa	Global Compact
Malaysia Index since 2019	(UNGC) since 2008

The Edge ESG

Award 2022 (Gold)

Utilities Category

The Edge ESG

Award 2023 (Gold)

Utilities Category

RANHILL UTILITIES BERHAD • ANNUAL REPORT 2023

04

GROUP CORPORATE PROFILE

RANHILL UTILITIES BERHAD ("RANHILL" OR "THE GROUP")

COMPRISES THREE MAIN BUSINESS SECTORS: ENVIRONMENT, ENERGY AND ENGINEERING SERVICES. THE ENVIRONMENT SECTOR ACCOUNTS FOR 56.7% OF RANHILL'S REVENUE, WITH 18.2% COMING FROM THE GROUP'S ENERGY SECTOR AND 25.1% FROM THE ENGINEERING SERVICES SECTOR.

SECTOR REVENUE:

56.7%

68.0%

		18.2%
15.3%
					Environment
16.7%		25.1%			Energy
			Engineering
					Services
FY2022	FY2023

05	BUSINESS OVERVIEW	1		2		3		4		5		6

GROUP CORPORATE PROFILE

PEOPLE

Driven by the Sustainable Development Goals ("SDGs"), Ranhill continues to focus on creating value for local communities. These include talent development and socio-economic improvements through the provision of job opportunities, nurturing local supply chains, and infrastructure development.

OUR BUSINESSES

CUSTOMER EXPERIENCE

Upholding operational excellence and prioritising quality and service responsibility, Ranhill continues to set new performance benchmarks for customer satisfaction and elevate standards to world- class levels.

GLOBALISATION

Harbouring ambitions of greater growth, Ranhill aims to further expand its presence on the international stage, bringing its proven track record of expertise, world-class capabilities, and long-standing experience to new markets across the world.

Treated Water

Supply Services

Water, Wastewater

Treatment & Reclaimed

Water Treatment

Energy and

Renewable Energy

Multi Disciplinary EPCM,

PMC, O&M Services and

Consultancy Services

NRW Management

ENVIRONMENT SECTOR

Ranhill's Environment sector provides a complete source to tap solutions for the abstraction, treatment and supply of potable water, the treatment of wastewater and the production of reclaimed water. This includes the provision of technical services in the management and optimisation of water utility assets.

The sector's operations comprise the following operating companies: Ranhill SAJ Sdn Bhd ("Ranhill SAJ"), Ranhill Water (Hong Kong) Ltd. ("RWHK"), Ranhill Water Technologies (Thai) Ltd. ("RWTT") and AnuRAK Water Treatment Facilities Co. Ltd. ("AnuRAK"). Customers include the public, governments, municipal authorities, industrial and commercial customers.

RANHILL SAJ SDN BHD

As Johor state's sole water operator, Ranhill SAJ undertakes raw water abstraction, treatment, distribution and sales, operating the entire water supply network in Johor. It operates 46 water treatment plants ("WTPs") state-wide with a total treatment capacity of 2,171 million litres daily ("MLD").

As at 31 December 2023, Ranhill SAJ's network comprises 724 reservoirs and 24,150 KM of pipelines that supply treated water to 4 million people in Johor as well as industries across the state. With a low NRW rating of 20.2 m³ / KM of Pipe / Day, the NRW percentage for Johor state was 25.0% in FY2023.

Working together with Ranhill Technologies Sdn Bhd ("Ranhill Technologies"), which specialises in NRW reduction and management, Ranhill SAJ has set a target of further reduction of Johor's NRW levels to 20.9% by 2025.

RANHILL WATER (HONG KONG) LTD.

On the international front, the Group owns a 40% share in RWHK, which owns 12 industrial wastewater treatment plants with a total design capacity of 227 MLD. Assets are operated based on Build-Operate- Transfer ("BOT") and Transfer-Operate-Transfer ("TOT") contracts.

Ranhill's 60% joint venture partner SIIC Environment Holdings Ltd., a China state-owned entity, has vast experience and a good rapport with local authorities, which provides a positive platform for negotiation and potential expansion.

RANHILL WATER TECHNOLOGIES (THAI) LTD. AND ANURAK WATER TREATMENT FACILITIES CO. LTD.

RWTT and AnuRAK undertake water, wastewater and reclaimed water treatment assets, as well as operations and project maintenance of related assets. Most of these assets are operated based on BOT and Rehabilitate-Own-Transfer ("ROT") contracts.

To date, the Group has achieved 344 MLD or 86.0% of its targeted 400 MLD for international water and wastewater operations.

RANHILL UTILITIES BERHAD • ANNUAL REPORT 2023

06

GROUP CORPORATE PROFILE

ENERGY SECTOR

Effective August 2023, Energy sector consists of both power plants reflect Ranhill and Sabah Energy Corporation ("SEC") in their name; Ranhill Sabah Energy I Sdn Bhd ("RSE I"), Ranhill Sabah Energy II Sdn Bhd ("RSE II"), Ranhill Sabah Energy O&M I Sdn Bhd ("RSE O&M I") and Sabah Energy O&M II Sdn Bhd ("RSE O&M II").

Through its Energy Sector, Ranhill owns and operates two 190 MW combined cycle gas turbine ("CCGT") fired power plants in Kota Kinabalu, Sabah. The 190 MW Teluk Salut Power Station comes under the purview of RSE I while the 190 MW RSE II.

The Teluk Salut power station comprises four 30 MW gas turbines, four vertical heat recovery steam generators and two 35 MW steam turbines. The Rugading power station comprises two 65 MW gas turbines, two horizontal heat recovery steam generators and a 60 MW steam turbine.

Cumulatively, both power plants deliver up to 380 MW of energy, which is equivalent to approximately 40% of the total installed

capacity among independent power producers ("IPP") in Sabah. This makes Ranhill the largest IPP player in the state.

On 29 August 2023, Ranhill incorporated Ranhill Sabah Energy

1. Sdn. Bhd. ("RSE III") as a joint venture special purpose vehicle ("SPV") between Ranhill Capital Sdn Bhd and Sabah Energy Corporation Sdn Bhd ("SEC"). RSE III has been established for the purpose of undertaking the 100 MW Gas Fired Combined Cycle Power Plant station at Kimanis, Sabah.

RSE O&M I and RSE O&M II are responsible for the operations and maintenance of Ranhill's Teluk Salut and Rugading power plants respectively in Sabah.

In addition, Ranhill owns and operates the 50 MW Solar Farm in Bidor, Perak. The farm was secured during the tender under the large-scale solar phase 4@MEnTARI (LSS4@MEnTARI) programme. The Group operates said plant under a 25-year concession agreement with Tenaga Nasional Berhad ("TNB").

ENGINEERING SERVICES SECTOR

RANHILL BERSEKUTU SDN BHD ("RBSB")

RBSB is a multi-disciplinary engineering company services provider that specialises in comprehensive engineering solutions. These include design services for geotechnical, civil infrastructure, structural, mechanical, electrical, water resources, linear transportation, project management and EPCC solutions.

Since its inception five decades ago, RBSB has established a stellar track record of more than 2,300 successful projects for clients in Malaysia and overseas.

Accomplishments include landmark projects in Asia, the Middle East and Africa comprising civil structure and township design, transportation- related projects such as highways, roads, bridges, airports, ports, rail and transit systems; water distribution, catchment and wastewater treatment infrastructure; flood mitigation; power and industrial plants, as well as residential, commercial and public facilities.

In 2023, project highlights include the completion of the National Sewerage Master Plan for the Integrated River Basin Management Catchment project and the Sarawak Metro KUTS design project.

Previous and ongoing projects include the design and construction of Ranhill's 50 MW LSS farm, Audit for Gleneagles Hospital Sabah, Audit of the Petronas Twin Towers covering Structure, MEP and Facade and various other healthcare, transportation and infrastructure projects in Malaysia and Bangladesh.

RBSB's distinctive edge is its Building Information Modelling ("BIM") capabilities, which enable a more seamless, real-time collaborative approach to design, planning and construction of buildings. RBSB's BIM capabilities facilitate faster and more precise development of designs, promote resource optimisation and waste reduction, and supports reduced carbon emissions and various other benefits including cost and resource efficiencies.

RANHILL WORLEY SDN BHD ("RW")

RW is a well-regarded global brand name for professional project and asset services. It is excellently positioned as a carbon storage, decarbonisation and technology leader with the recent award of Malaysia Kasawari Carbon Capture Storage ("CCS"), the world's largest offshore CCS, together with Environment, Social and Governance ("ESG") solutions for the oil and gas industry.

07	BUSINESS OVERVIEW			2		3		4		5		6

GROUP CORPORATE PROFILE

For 29 years, RW via a solid partnership with Worley Ltd. global leader in Energy, Chemical and Resources ("ECR"), has provided engineering, design, management and consultancy services to the energy, chemicals and resource sectors. Over the course of that time, RW has demonstrated a credible track record for brilliance by delivering high-quality,value-driven solutions for complex requirements.

RW has lent its expertise over the years to the development of various successful projects in Malaysia and globally including in the Middle East, North Sea UK, Myanmar, Vietnam, Africa, China, India, and Brazil. It continues to set the benchmark for project management, asset services and solutions within the region.

In addition, RW has ventured into the niche but highly in-demand sector of CCS solutions, particularly for the oil and gas sector. Among the projects secured include the world's largest CCS project: the Malaysia Kasawari CCS project and Brazil P-82 Floating Production Storage and Offloading ("FPSO").

RANHILL TECHNOLOGIES SDN BHD ("RANHILL TECHNOLOGIES")

During the financial year, the operations or RWS and RWT have been integrated to form Ranhill Technologies Sdn Bhd ("Ranhill Technologies").

The operations of both RWS and RWT now come under Ranhill Technologies. This includes NRW management of which the Group's track record now stands at 774 MLD of treated water saved from projects undertaken in Malaysia and Saudi Arabia.

RWT's operations that comprise varied water, wastewater and reclaimed water utility projects in Malaysia, Thailand and China (through associate companies) is also assumed by Ranhill Technologies.

Ranhill Technologies shall continue to undertake NRW projects nationwide by undertaking projects under Approach One and Approach Two of the National NRW Reduction programme under the 12th Malaysia Plan going forward.

Total MLD Saved Through NRW Activities:
State/Region	MLD
Johor	498
Melaka	59
Kedah	54
Saudi Arabia	54
Terengganu	50
Kelantan	43
Pahang	16

RANHILL UTILITIES BERHAD • ANNUAL REPORT 2023

08

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