RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 1 Sustainability Report 2018 2 RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 3 SUSTAINING OUR STRENGTH > ENRICHING LIVES As in previous years, the cover of our Sustainability Report 2018 (“SR2018”) is identical to our Annual Report 2018 (“AR2018”). This is in line with ensuring consistency of message which is centred on this year’s theme “Sustaining Our Strength -Enriching Lives”. Readers are advice to review both reports to obtain a comprehensive understanding of the Group in terms of its business operations, financial performance as well as our overall strategy to managing sustainability related matters. To be a regional leader in water, wastewater and MISSION energy with emphasis on circular economy. STATEMENT OUR ENRICHING LIVES THROUGH SUSTAINABLE SOLUTIONS ENRICHING LIVES VISION Ranhill aspires to lift the quality of life by being at the forefront of nation building through sustainable environment and power 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. RESPECT OUR Respect for the environment, communities we serve and for VALUES our employees. RESOURCEFUL Determination in sourcing and adopting innovative solutions. RESULT Focused on delivering growth and value to our stakeholders. RANHILL HOLDINGS BERHAD • SUSTAINABILITY Report 2018 5 OUR REPORTS We produce a full suite of reporting publications to cater to the diverse needs of our broad stakeholder base. The following reports, which support our Annual Report, are tailored to meet our readers’ specific information requirements. ANNUAL REPORT 2018 SUSTAINABILITY REPORT 2018 Objective Objective • Provides a comprehensive discussion of the Group’s • Presents a balanced and comprehensive analysis of the performance Group’s sustainability practices and performance in relation to issues material to our stakeholders th Annual General Meeting of 5Ranhill Holdings Berhad Grand Ballroom, Level 11 Double Tree by Hilton Hotel Johor Bahru No. 12 Jalan Ngee Heng 80000 Johor Bahru, Johor For more information visit our website Thursday, 11 April 2019 | 10.00 a.m. www.ranhill.com.my Water Supply Services Water and wastewater treatment Non- Revenue Water Clean Energy WHAt’S IRANNHILL FACT SHEETS 008 IDEENVIRONMENTAL AWARENESS OUR PRESENCE 010 & PERSEVERANCE 025 Circular Economy GROUP FINANCIAL Climate Change HIGHLIGHTS 012 Preserving Water Resources Water Tariff MESSAGE FROM THE Green House Gas (“GHG“) PRESIDENT/ Emissions CHIEF EXECUTIVE 013 Waste Management (Sludge) ABOUT THIS REPORT 014 CONTRIBUTION TOwards Scope & Material Boundary SOCIAL WELLBEING & Reporting Period CAPACITY BUILDING 036 Assurance Community Engagement Reporting Guideline Industry Development & Collaboration Distribution & Feedback Corporate Social Responsibility (“CSR”) SUSTAINABILITY INSPIRATIONAL WORKPLACE AT RANHILL 015 & CULTURE 041 Overview - Ranhill’s Four Pillars Employee Engagement of Sustainability Acculturation Diversity & Inclusivity GOVERNANCE Workforce Breakdown by Age Groups & LEADERSHIP 017 ENHANCING GOVERNANCE STAKEHOLDER ACROSS THE GROUP 046 ENgagEMENT 019 Health & Safety Corporate Governance MATERIALITY PRIORITISATION Integrity & MATERIALITY MATRIX 024 Customer Engagement (Customer Satisfaction & Trust) RANHILL PERFORMANCE DATA TABLE 048 GRI STANDARDS CONTENT INDEX 050 8 RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 RANHILL FACT SHEET Provides Water To Provides Electricity To Employees3,012 3.7 MillionPeople 1.4 MillionPeople CORPORATE INFO 99.8% Reduction on Water Supply NRW level to Coverage Areas 674 active 24.19% reservoirs & 44 water treatment plants Total Water and Wastewater Treatment 10 water treatment, Capacity wastewater treatment & reclaim water 2,362 MLD facilities in Thailand & wastewater 22,495KM Local 11 of pipelines, of treatment plants which 19,031KM are 85.8% in China reticulation mains, International 3,298KM of distribution mains and 166KM of 14.2% raw water mains ENVIRONMENT RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 9 Have a 21-year Operate two Power Purchase Agreement (PPA) with Sabah Electricity Sdn Bhd (SESB) 190MWCombined Cycle Gas for the sale of up to Turbine (CCGT) power of plants in Kota Kinabalu 380MW electrical generation Industrial Park capacity and electricity production Clean Energy 380MW Operate and Maintain Sabah 2x190MW We are the largest Independent Power Producer (IPP) within the state of Sabah in Malaysia CLEAN ENERGY Staff training and development 100% budget increase by of new hires attended the 24.79% to onboarding programme RM2.96 million DEVELOPMENT ROLE 10 RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOReportrt 2018 OUR PRESENCE We stand proud as a Malaysian conglomerate with keen interest to reach out to, and better lives of local communities via the environment and clean energy sectors. CHINA • Concession agreement with local authorities or industrial park management councils THAILAND • 11 wastewater and reclamation • 10 water and wastewater Environment treatment plants, ranging from treatment plants and reclamation 25-30 years plant with industrial park • Total treatment design capacity developers and other private of 222 MLD enterprises • Total treatment design capacity of 114 MLD MALAYSIA Water Supply Services in Johor, Power Business in Sabah, Malaysia Malaysia • Exclusive license to provide • The largest Independent Power source-to-tap water supply Producer (IPP) in Sabah, Malaysia Clean Energy services throughout the State • Operates two 190 MW Combined of Johor Cycle Gas Turbine (CCGT) power • Johor is the second most plants in Kota Kinabalu Industrial populous state with Park approximately 3.7 million • 21-year Power Purchase population as at December 2018 Agreements (PPAs) with Sabah • 44 water treatment plants Electricity for the sale of up to • Total treatment design capacity 380 MW of electrical generating of 2,026 MLD capacity and electricity production • Total capacity represents approximately 37% of combined installed capacity of all IPPs in Sabah RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOReportrt 2018 11 Malaysia,3 countries Thailand, China HEADQUARTERS Ranhill Holdings Berhad Bangunan Ranhill SAJ, Jalan Garuda, Larkin 80350 Johor Bahru, Johor Darul Takzim, Malaysia 12 RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 GROUP FINANCIAL HIGHLIGHTS REVENUE (RM’000) PROFIT FROM OPERATION (RM’000) 2018 1,559.9 2018 218,533* 2017 1,478.7 2017 233,808 2016 1,455.0 2016 224,431 NET PROFIT FOR THE YEAR (RM’000) SHAREHOLDERS’ EQUITY (RM’000) 2018 42,308* 2018 549,369 2017 72,352 2017 582,165 2016 55,347 2016 561,098 FY2016 FY2017 FY2018 restated RM’000 RM’000 RM’000 Revenue 1,455,054 1,478,719 1,559,856 Profit from operation 224,431 233,808 218,533* Net Profit for the year 55,347 72,352 42,308* Weighted average number of ordinary share ('000) 822,266 888,316 888,316 Basic earnings per ordinary share (sen) 6.73 8.14 4.76 Total Asset 3,188,892 2,732,650 3,335,573 Shareholders' Equity 561,098 582,165 549,369 Net Asset per share 0.68 0.66 0.62 Note: * The decrease in profit from operation and net profit for the year were mainly due to the impairment of approximately RM19 million from aborted 37MW Tawau Green Energy Sdn Bhd (“TGE”) geothermal project. RANHILL HOLDINGS BERHAD • SUSTAINABILITY REPOrt 2018 13 MESSAGE FROM THE PRESIDENT / CHIEF EXECUTIVE TAN SRI HAMDAN MOHAMAD President and Chief Executive Dear Stakeholders, I am pleased to give you an update on Ranhill’s sustainability progress as we continued to make loom larger and the pressures placed regulations and set standards, we are headway across our Economic, on our finite and increasingly depleting reshaping a better future together with Environmental and Social (“EES”) resources mount, businesses must stakeholders in all of the markets and indicators in 2018. take the lead and stand together with business sectors we operate in. governments to champion sustainable resource use. I am pleased to share that in line This is the 3rd consecutive year that Ranhill with the United Nations Sustainable has provided a comprehensive account The realisation that we must achieve Development Goals 6, 7 and 13, Ranhill of our non-financial performance and we a balance between present and future has helped countless people in the draw satisfaction in our achievements as needs is growing among Corporates, but markets we operate in have access to well as insights on how we may further there is far more effort that is required to clean water and sanitation and clean, improve and respond proactively to the achieve true sustainability. affordable energy while promoting wider issues of climate change, depleting greater awareness and concern on natural resources, changing weather The world today stands on a threshold climate change. We are changing patterns and more. of both crisis and opportunity. Global lives for the better, improving socio- warming and climate change continue to economic opportunities and developing Our disclosure is guided by the globally concern countries and businesses across local infrastructure and ultimately recognised standard for sustainability the world. Yet it presents the