Ranhill Utilities Bhd

### Ranhill Utilities Berhad - SR2022

# Ranhill Utilities Berhad - SR2022

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In essence, sustainability resides within the Board as a key strategic agenda. This is reflected via the Board's focus on a wide range of EES material topics. Specifically, it is the Board's Governance Risk Management Committee ("GRMC") that provides detailed and regular oversight on EES topics. The GRMC is supported by the Management Assurance Risk & Compliance Committee ("MARCC"). The MARCC is in turn, supported by Senior Management and Department Heads across the Group's organisational structure. The Group's working committee, the Sustainability Working Group ("SWG") is tasked to develop sustainability programmes targeted at employees, society, the environment and other stakeholders. [...] Supporting the structure are the following guidelines, policies and procedures: - Board Charter (inclusive of Terms Of Reference ("TOR") for all respective Board Committees - Ranhill Authority Manual ("RAM") - Code of Conduct & Business Ethics ("CCBE") - Whistleblowing Policy and Procedures - Ranhill's Rules of Life for Health and Safety.

### Ranhill Utilities Berhad - SR2022

# Ranhill Utilities Berhad - SR2022

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The governance structure facilitates company level involvement for sustainability governance. It operationalises sustainability enabling comprehensive on material ESG matters and the implementation of action plans towards realising respective KPIs and targets. There is clear accountability, data collection and reporting processes at all organisational levels. Responsibility and oversight is shared, with each level within the structure have specific roles. Matters of sustainability are owned by the respective parties. Action plans are implemented and the results monitored together with monitoring of resources allocated i.e. budgets, human capital, etc. [...] The Board of Ranhill and Senior Management have stipulated that the management of all subsidiary companies are to align to the Group's sustainability framework and through the existing sustainability governance structure, to constantly focus on improving ESG performance. This includes strengthening data collection, undertaking relevant strategies and embedding ESG into business and operational planning and tactical execution. Specifically, subsidiary companies are to focus on energy and resource consumption, waste management, emissions and also social matters such as OSH, human and labour rights and talent management and development. [...] The Board continues to execute its role as the highest governance and decision making body pertaining to all matters including sustainability. The Board aligns its approach with the MCCG practices, including Practices 4.1-4.5, which pertain to governance and management of sustainability. The Board sets broad direction and goals such as the Ranhill Net Zero Carbon Roadmap and approves the same. It monitors progress achieved by the Group in relation to these goals. The Board also maintains oversight on all material sustainability topics and advices Management as required to ensure sustainability continues to be an integral aspect of the Group's overall business strategy. The Board is guided by its Board Charter. [...] The role of the GRMC is to enable a more comprehensive coverage of risks arising from material ESG topics. The involvement of the GRMC reflects Ranhill's high commitment to prioritise EES matters and to integrate these into Group business and operational strategies and decision making. [...] The GRMC, in strengthening its capability to ensure effective checks and balances and internal controls is supported by the management level Integrity Working Committee ("IWC"). [...] The role of sustainability governance is driven by the GRMC but also supported by the Board level Audit Committee, whom the management level Sustainability Working Committee ("SWC") reports to. The SWC is tasked to develop sustainability programmes and action plans. The SWC is a cross functional working team whose members come from all business divisions and operating companies. [...] The Management Assurance Risk Compliance Committee ("MARCC") comprises Senior Management and Department Heads across the Group's organisational structure. [...] The GRMC is a sub Board Committee and reports to the full Board on a regular basis. Its roles and responsibilities are spelt out in its Terms of Reference ("TOR"). Essentially, the GRMC is tasked with ensuring Board level oversight of all risks including sustainability risks identified by the Group's Risk Management framework. [...] The GRMC receives regular risk reports that outline risk factors, severity levels, probabilities of occurrence and ensures that the existing risk management framework is robust and well implemented. Increasingly, ESG risks are being considered within the overall approach to risk management, including climate risks. [...] The IWC's role is to ensure a high level of integrity across the Group which includes ensuring regulatory and procedural compliance. However, beyond compliance, the IWC is tasked as promoting awareness, undertaking educational activities and also serving as the first line of investigating any whistleblowing or corruption cases as well as any reports or incidents of breach of ethics and noncompliance. [...] The IWC reports to the MARCC and GRMC in matters pertaining to ethics and integrity within Ranhill. It is supported by the Group Legal Compliance department as well as the various operating functions within the Group including Group Human Resources, Group Procurement, the SWG. [...] All operating companies under Ranhill comply with Section 17A and have developed procedures and controls to ensure compliance. In 2023, there were zero cases of non-compliance within the CCBE and zero confirmed cases of corruption. [...] All tender documents, and Request For Proposals ("RFPs") come attached with the Group's anti-corruption requirements. Suppliers must acknowledge their understanding of the anti-corruption documents and provide written affirmation to be free from corrupt practices and will remain as such throughout their business dealings. [...] Where relevant, audits or background checks may be conducted on suppliers, prior to the awarding of contracts. Any supplier who is found to have engaged in corrupt practices will be reprimanded accordingly. Action taken can range from immediate contract termination to reporting the offender to the authorities for legal action. Reminder memos are sent to all suppliers on a periodic basis reminding suppliers to continue adopting a zero-tolerance stance on corruption, including bribery. [...] All Ranhill operating companies have held briefings on Corruption and Bribery, and Section 17A MACC Act for staff. Other forms of training and briefings were the CCBE briefing for all staff. The Board, Management and staff have received at least two hours of anti-corruption training. [...] In 2023, all managerial and operational staff have received information on anti-corruption and bribery. This includes a mandatory 2-hour briefing on the Ranhill anti-corruption Policy & Procedures. The same materials are made available to staff at all times via the Intranet. [...] As in previous years. Ranhill has continued to assess its operations for potential corruption risks or vulnerabilities. This includes identifying any aspects of the Group's operations which may be higher prone to corruption. Findings indicated that no parts of the operation, subsidiary companies or aspects of operations were deemed to be of high risk. The assessment was undertaken by GCAD sending out a detailed Corruption Risk questionnaire to CEOs of all operating companies under the Group. Findings were then further assessed through interviews conducted with the heads of key departments whose activities may have higher exposure to corruption. The quantitative and qualitative information was analysed and risk weightages and scores developed to enable a development of a comprehensive risk assessment on overall and individual department risks exposure levels to corruption. [...] Findings were derived after assessing the present level of anti-corruption controls and internal processes put in place. [...] In accordance with the Whistleblower Protection Act 2010 ("Act 711"), Companies Act 2016 and Capital and Market Services Act 2007, Ranhill has established its dedicated Whistleblowing Channel. [...] The whistleblowing channel serves as a confidential channel for employees or external stakeholders to raise a complaint or to notify management of any "red flags" i.e. incidents of wrongdoing. These could be incidents, actions or even non-action that conflict with the CCBE and the Group's zero-tolerance stance on corruption. Other matters such as infringement of labour and human rights, discrimination, harassment and more can also be reported via the whistleblowing channels. [...] The Group Whistleblowing channel comes under the purview of GCAD. All whistleblowing reports will be investigated by GCAD and supported by the IWC with the findings presented to Ranhill's whistleblowing committee. If the report is substantiated, appropriate action will be taken on the perpetrator such as suspension of duties, termination of employment, cessation of the business relationship if involving a business partner or supplier and other forms of punitive measures. [...] If required, the matter is escalated to Senior Management and the Board and in some cases to external authorities such as the Malaysian Anti-Corruption Commission ("MACC") or the police for necessary enforcement action. [...] Whistleblowers may choose to make reports anonymously. In the event whistleblowers have chosen to reveal their identity, provided said report was made in good faith, the whistleblower is granted confidentiality of identity (unless the identity of the whistleblower must be revealed to enforcement authorities). Internally, the whistleblower's identity is kept a secret and is accorded protection from any form of reprisal, harassment or pressure. [...] Additional measures may be instituted to protect the whistleblower. These include temporary relocation of work premises if in close proximity to the actual graft incident or perpetrator.

**SUSTAINABILITY GOVERNANCE STRUCTURE**

**KEY ASPECTS OF THE RANHILL SUSTAINABILITY GOVERNANCE STRUCTURE**

Comprehensive Board oversight on material EES topics Governance structure facilitates Group wide participation
and well positioned to drive strategic focus on the and the development of a cross functional approach to

###### 1 sustainability agenda. 3 managing sustainability.

Board and Senior Management receive timely reports on Progressive inclusion of EES matters within Group risk
EES matters, thereby enabling them to feel the pulse of management via the linking sustainability to mid-long

###### 2 sustainability initiatives and programmes. 4 term value creation.

**BOARD REMUNERATION AND SUSTAINABILITY TARGETS**

Ranhill is cognisant of Bursa Malaysia's recommendation for listed companies to link Board and Senior Management remuneration to the realisation
of ESG goals and targets. The Group continues to explore mechanisms to establish such linkages to ensure a fair and equitable approach that will
also enable the effective realisation of the Group's ESG goals.

At several of the Group's subsidiaries, remuneration of Senior Management has been linked to the level of regulatory compliance achieved against
the industry regulators' KPI which include environmental and social performance considerations.

These include RPI and RPII where the CEO, Head Of Plant and the Safety and Health Officer have their personal KPIs linked to Occupational Health
and Safety ("OHS") performance at the respective plants. Similarly for Ranhill SAJ, the CEO's remuneration is linked to the achievement of the KPIs
set for Suruhanjaya Perkhidmatan Air Negara ("SPAN") which includes water quality as well as customer satisfaction, both of which are material
ESG topics.

**PROMOTING GOOD GOVERNANCE THROUGH INTERNAL POLICIES**

In addition to its sustainability governance structure, Ranhill also cultivates good governance via the implementation of the following guidelines
and policies. All new staff are informed of the Company's policies as part of their induction process. Ranhill has also established other policies as
follows:

**POLICIES AND PROCESSES FOR GOOD GOVERNANCE**

The Board and Senior Management of the Group provide oversight of
the Ranhill sustainability framework.

They in turn helm a robust sustainability governance structure,
which provides the necessary resources, capabilities, knowledge and
reporting mechanism to drive effective oversight and strategic action
of the sustainability agenda (refer to the Sustainability Framework on
page 15).

Ranhill's sustainability governance structure enables all sustainability
matters to be brought to the Board and Senior Management for
deliberation and decision-making. In addition, the operational levels
can also bring information, matters and issues to the attention of
the Board. This enables the Board and Senior Management to have a
coherent grasp of on-ground realities, which supports more informed
and effective decision making.

The inclusion of the Governance and Risk Management Committee
("GRMC") enables more comprehensive coverage of risks arising from
material EES topics. The involvement of the GRMC reflects Ranhill's
high commitment to prioritise EES matters and to integrate these into
Group business and operational strategies and decision making.

The GRMC is supported by the Management Assurance Risk Compliance
Committee ("MARCC"). The MARCC is in turn, supported by Senior
Management and Department Heads across the Group's organisational
structure.

The Group's working committee, the Sustainability Working Group
("SWG") is tasked to develop sustainability programmes and action
plans. The SWG is a cross functional working team whose members
come from all business divisions and operating companies. SWG
members comprise personnel from Ranhill SAJ, RWS, RWT, RPI and
RPII, RBSB and RW.

In addition, starting from the Q4 of FY2022, the Group's Sustainability
Agenda is to be shared on a regular basis with Audit Committee
Members.

TERMS & CONDITIONS

# Sustainability Policies

* Home
* Sustainability
* Sustainability Policies

* Home
* Sustainability
* Sustainability Policies

# Sustainability Policies

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##### Business Continuity Management Policy and Procedures

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##### Health, Safety and Environment Policy and Procedures

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##### Sexual Harassment Policy and Procedures

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##### Succession Planning and Management Policy and Procedures

---

##### Code of Conduct & Business Ethics

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One of the reasons for the continued promulgation of a sustainability driven organisational culture and mindset at Ranhill is the existence of a robust sustainability governance structure. In essence, sustainability resides within the Board as a key strategic agenda. This is reflected via the Board's focus on a wide range of EES material topics. Specifically, it is the Board's Governance Risk Management Committee ("GRMC") that provides detailed and regular oversight on EES topics. The GRMC is supported by the Management Assurance Risk & Compliance Committee ("MARCC"). The MARCC is in turn, supported by Senior Management and Department Heads across the Group's organisational structure. The Group's working committee, the Sustainability Working Group ("SWG") is tasked to develop sustainability programmes targeted at employees, society, the environment and other stakeholders. In FY2020, the SWG developed a new materiality matrix, which provides a more accurate view of the Group's EES material topics. The SWG has also earmarked several key sustainability programmes in FY2020. However, due to the impact of the COVID-19 pandemic, these programmes have been differed for implementation to FY2021. The aforementioned sustainability governance structure ensures a strategic and comprehensive approach to embedding sustainability within the organisation; in driving the creation of a conducive mindset and in developing required policies. The structure also allows for organisation wide representation to drive the sustainability agenda and ensures that the views of all internal stakeholders are cascaded to management and included in the overall sustainability approach towards achieving a united front.

### SUSTAINABILITY GOVERNANCE STRUCTURE

The Ranhill Governance structure enables an effective management approach and necessary oversight on all material ESG matters. Setting the appropriate tone from the top is the Board of Directors who hold the ultimate responsibility and oversight on corporate governance. The Governance and Risk Management Committee ("GRMC") enables comprehensive coverage of risks, including ESG risks. The GRMC is supported by the management-level Integrity Working Committee ("IWC") and the Board Audit Committee ("BAC").

The governance structure operationalises sustainability enabling comprehensive oversight on material ESG matters and the implementation of action plans towards realising respective KPIs and targets. The governance structure is leveraged with regard to managing and addressing climate change, human and labour rights, occupational safety and health and other material topics. A key aspect of the structure is the existence of two-way communication where information or directives are conveyed from the Board in a top-down manner, while feedback, results and data is disseminated from operational levels to the leadership.

The IWC comprises the Head of Group Legal & Compliance as the Chairperson and representatives from Ranhill's key subsidiaries: Ranhill SAJ, Ranhill Energy, Ranhill Water Services, Ranhill Water Technologies, Ranhill Bersekutu Sdn Bhd, Ranhill Worley as well as representatives from the Group Human Resources Division, Group Corporate Secretarial and Group Corporate Assurance Division ("GCAD").

IWC's role is to ensure a high level of integrity across the Group which includes ensuring regulatory and procedural compliance. However, beyond compliance, the IWC is tasked as promoting awareness, undertaking educational activities and also serving as the first line of investigating any whistleblowing or corruption cases as well as any reports or incidents of breach of ethics and non-compliance.

The management-level Sustainability Working Committee ("SWC") comprising a cross-functional working team from across the Group reports to the BAC. The SWC is tasked to develop sustainability programmes and action plans. The Management Assurance Risk & Compliance Committee ("MARCC") comprises Senior Management and Department Heads across the Group's organisational structure.

### Ranhill Utilities Berhad - AR2022

# Ranhill Utilities Berhad - AR2022

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**SUSTAINABILITY GOVERNANCE STRUCTURE**

**KEY ASPECTS OF THE RANHILL SUSTAINABILITY GOVERNANCE STRUCTURE**

Comprehensive Board oversight on material EES topics Governance structure facilitates Group wide participation
and well positioned to drive strategic focus on the and the development of a cross functional approach to

###### 1 sustainability agenda. 3 managing sustainability.

Board and Senior Management receive timely reports on Progressive inclusion of EES matters within Group risk
EES matters, thereby enabling them to feel the pulse of management via the linking sustainability to mid-long

###### 2 sustainability initiatives and programmes. 4 term value creation.

**BOARD REMUNERATION AND SUSTAINABILITY TARGETS**

Ranhill is cognisant of Bursa Malaysia's recommendation for listed companies to link Board and Senior Management remuneration to the realisation
of ESG goals and targets. The Group continues to explore mechanisms to establish such linkages to ensure a fair and equitable approach that will
also enable the effective realisation of the Group's ESG goals.

At several of the Group's subsidiaries, remuneration of Senior Management has been linked to the level of regulatory compliance achieved against
the industry regulators' KPI which include environmental and social performance considerations.

These include RPI and RPII where the CEO, Head Of Plant and the Safety and Health Officer have their personal KPIs linked to Occupational Health
and Safety ("OHS") performance at the respective plants. Similarly for Ranhill SAJ, the CEO's remuneration is linked to the achievement of the KPIs
set for Suruhanjaya Perkhidmatan Air Negara ("SPAN") which includes water quality as well as customer satisfaction, both of which are material
ESG topics.

**PROMOTING GOOD GOVERNANCE THROUGH INTERNAL POLICIES**

In addition to its sustainability governance structure, Ranhill also cultivates good governance via the implementation of the following guidelines
and policies. All new staff are informed of the Company's policies as part of their induction process. Ranhill has also established other policies as
follows:

**POLICIES AND PROCESSES FOR GOOD GOVERNANCE**

The Board and Senior Management of the Group provide oversight of
the Ranhill sustainability framework.

They in turn helm a robust sustainability governance structure,
which provides the necessary resources, capabilities, knowledge and
reporting mechanism to drive effective oversight and strategic action
of the sustainability agenda (refer to the Sustainability Framework on
page 15).

Ranhill's sustainability governance structure enables all sustainability
matters to be brought to the Board and Senior Management for
deliberation and decision-making. In addition, the operational levels
can also bring information, matters and issues to the attention of
the Board. This enables the Board and Senior Management to have a
coherent grasp of on-ground realities, which supports more informed
and effective decision making.

The inclusion of the Governance and Risk Management Committee
("GRMC") enables more comprehensive coverage of risks arising from
material EES topics. The involvement of the GRMC reflects Ranhill's
high commitment to prioritise EES matters and to integrate these into
Group business and operational strategies and decision making.

The GRMC is supported by the Management Assurance Risk Compliance
Committee ("MARCC"). The MARCC is in turn, supported by Senior
Management and Department Heads across the Group's organisational
structure.

The Group's working committee, the Sustainability Working Group
("SWG") is tasked to develop sustainability programmes and action
plans. The SWG is a cross functional working team whose members
come from all business divisions and operating companies. SWG
members comprise personnel from Ranhill SAJ, RWS, RWT, RPI and
RPII, RBSB and RW.

In addition, starting from the Q4 of FY2022, the Group's Sustainability
Agenda is to be shared on a regular basis with Audit Committee
Members.

The role of sustainability governance is driven by the GRMC but also supported by the Board level Audit Committee, whom the management level Sustainability Working Committee ("SWC") reports to. The SWC is tasked to develop sustainability programmes and action plans. The SWC is a cross functional working team whose members come from all business divisions and operating companies. [...] The governance structure facilitates company level involvement for sustainability governance. It operationalises sustainability enabling comprehensive on material ESG matters and the implementation of action plans towards realising respective KPIs and targets. There is clear accountability, data collection and reporting processes at all organisational levels. Responsibility and oversight is shared, with each level within the structure have specific roles. Matters of sustainability are owned by the respective parties. Action plans are implemented and the results monitored together with monitoring of resources allocated i.e. budgets, human capital, etc. [...] The Board of Ranhill and Senior Management have stipulated that the management of all subsidiary companies are to align to the Group's sustainability framework and through the existing sustainability governance structure, to constantly focus on improving ESG performance. This includes strengthening data collection, undertaking relevant strategies and embedding ESG into business and operational planning and tactical execution. Specifically, subsidiary companies are to focus on energy and resource consumption, waste management, emissions and also social matters such as OSH, human and labour rights and talent management and development.

### Ranhill Utilities Berhad - SR2022

# Ranhill Utilities Berhad - SR2022

pages: / 102

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