Industry Overview

6. INFORIVIATION ON OUR GROUP 6. INFORIVIATION ON OUR GROUP 6.1 Our Company History and background Our Company was incorporated in Malaysia under the Act as a private limited company on 28 April 2014. On 24 October 2014, our Company was converted into a public limited company under its current name and commenced its business on 16 December 2015 following the completion of the Pre-Offering Reorganisation. Our Company was incorporated to facilitate the Listing. Our principal activity is investment holding. Our Subsidiaries are principally engaged in two businesses: power and environment. In our power business, we provide power generation. In our environment business, we provide water supply services, operate water and wastewater treatment plants, and provide specialised services in the management and optimisation of water utility assets. By way of background, all of the companies within our Group (save for RCSB which was newly incorporated as an intermediate holding company) were previously part of the RB Group. RB was listed on 15 February 2001 on the then Main Board of the Kuala Lumpur Stock Exchange (now known as Main Market of Bursa Securities) and was principally involved in four main categories of business comprising water supply and treatment, power generation, oil and gas as well as engineering and construction. The RB Group was subsequently taken private by Cheval, Tan Sri Hamdan, RCorp, LOSB and Pacific Energy Overseas Ltd (collectively, the “Joint Offerors”) in 2011 due to, among others, the subdue performance of its construction business (refer Section 6.1.1 below for further details on the privatisation of RB Group). In 2013, the RB Group undertook an internal group reorganisation exercise comprising the Internal Reorganisation and Internal Reorganisation” (refer Section 6.1.2 below for further details) which results in the formation of the RERB Group which was involved in the business of water supply and treatment, power generation and oil and gas. The RERB Group was targeted for an initial public offering and the listing of its shares on the Main Market of Bursa Securities (“RERB IPO”) which was subsequently withdrawn in July 2013 due to events set out in Section 6.1.2 below. Subsequently, the RERB Group undertook a reverse take-over of Symphony via our Company which results in the formation of our Group which comprise the water and power business of the then RERB Group via the Identified Entities (the “Pre-Offering Reorganisation”, details of which are set out in Section 6.1.4 below). In addition to the water and power business, Ranhill Holdings has an option to acquire the oil and gas business of RERB (held via RGSB) via the RWorley Call Option as defined in Section 6.1.4 below. 6.1.1 Privatisation of RB Group For the financial years ended 30 June 2008 and 2010 respectively, the RB Group had registered losses and marginal PATAMI. For the financial year ended 30 June 2008, the RB Group registered loss aft~r tax and minority interest of approximately RM737 million mainly due to significant provisions made for the non-recoverability of an amount due from a customer and joint venture partner in respect of the Melut Basin Oil Development project which involved the expansion of the existing AI-Jabalayn central processing facility from 200,000 to 300,000 barrels of oil per day, amounting to RM316 million and RM240 million respectively. For the year ended 30 June 2010, the RB Group recorded marginal PATAMI of RIVl15.0 million after accounting for the impairment of the irredeemable convertible unsecured loan stocks in SDEB (“SDEB ICULS”) amounting to RM31.4 million. The high profits recorded by the RB Group for the financial year ended 30 June 2009 was due to a one-off tax credit arising from the reversal of deferred tax liabilities of approximately RM525.76 million which had it been excluded, the RB Group would 6. INFORMATION ON OUR GROUP (cant’d) have only registered a loss after tax and minority interest of RM139.70 million for the said financial year. On 9 August 2011, Cheval, Tan Sri Hamdan, RCorp, LOSB and Pacific Energy Overseas Ltd (collectively, the “Joint Offerors”) undertook a voluntary take-over offer to acquire all the remaining voting shares in RB not already owned by the Joint Offerors (“Offer Shares”) for a cash offer price of RMO.90 per Offer Share (“Offer”), which represent an illustrative market capitalisation of RB of approximately RM537.5 million based on the total number of RB’s shares in issue of 597,264,816 as at 9 August 2011. The Joint Offerors had undertaken the Offer after taking into consideration the following: (i) prospects of certain business segments of the RB Group at that time, particularly the infrastructure and construction related activities, which would continue to be challenging over the immediate term with potential provisions and impairments for some of the RB Group’s investments such as SDEB ICULS in the event, inter-alia, actual traffic flow is not achieved by SDEB, as well as for the terminated Libya housing project;
(ii) thin trading volume and performance of the shares of RB which had been trading below par for the 12 months prior to the serving of the notice of the Offer; and

(iii) high gearing of the RB Group coupled with its existing debt covenants which may impede the RB Group’s ability to raise new capital and/or obtain further debt financing to expand and grow the RB Group’s businesses, locally or regionally. At the time of the Offer, the most significant and material project under the construction business of the RB Group was the Libya housing project undertaken by Amona Ranhill Consortium Sdn Bhd (“ARC”), a 60%-owned subsidiary of RB. Due to the civil unrest in Libya in February 2011 which was ensued by a civil war, all construction activities in Libya were suspended, including ARC’s housing project. As the civil unrest in Libya was not likely to end at the time, ARC had SUbsequently terminated the contract as ARC was in a force majeure situation under the terms of the contract which it had entered into with the Libyan Government’s Housing and Infrastructure Board, and accordingly, ARC was entitled to terminate the contract. With the termination of the housing project, ARC does not have any other business or any other source of income. However, ARC has a considerable amount of liabilities, including its obligation to RB in relation to the guarantees extended by RB pursuant to the Libya housing project in the event the guarantee is enforced. At the time of the Offer, the companies within the RB Group which are involved in the construction business were, on a combined basis, in a net liabilities position. The termination of the Libya housing project by ARC coupled with the financial position of the construction companies of the RB Group, had affected RB’s ability to dispose or restructure its construction arm, while it was still listed on the Main Market of Bursa Securities. The Joint Offerors had intended to undertake the necessary review of the RB Group post completion of the Offer. The Joint Offeror believed that being in a private domain would accord the Joint Offerors with greater flexibility: (i) to decide on the strategic direction of the RB Group as well as the reorganisation and rationalisation of the RB Group, if necessary, especially 6. INFORMATION ON OUR GROUP (cant’d) since the general partner of Cheval, TAEL Management Co. (Cayman} Ltd, has prior exposure to utilities and infrastructures related businesses. Acting via its general partner, Cheval is therefore able to impart the necessary expertise to assist the RB Group to undertake such reorganisation and rationalisation exercise as well as arranging for the raising of new capital, if required, to provide a platform for the future growth of the RB Group; and (ii) to address the financial problems faced by the companies within the RB Group which are involved in construction arising from the termination of the Libya housing project by ARC as well as their external liabilities, being amount owing to the external parties, amounting to approximately RM788.9 million as at 30 June 2011, which would need to be either fully settled, restructured and/or waived which otherwise would have necessitated a capital injection by the shareholders of RB in the event that these companies are unable to raise the necessary funding from financial institutions. However, the market price of RB’s shares which had been trading below par for the past 12 months prior to the serving of the notice of the Offer would have affected RB’s ability to raise funds from its shareholders while it was still listed on the Main Market of Bursa Securities. As at 30 June 2011, RB had prOVided several corporate guarantees in respect of the financing facilities extended to these construction companies and obligations amounting to RM552.8 million in the event the guarantees are enforced. Such efforts in addressing the financial problems faced by the construction companies of the RB Group may further impact the earnings as well as cash flow position of the RB Group and in turn, adversely affect the dividend payment capability of RB. Following the successful completion of the Offer, the Joint Offerors undertook a compulsory acquisition pursuant to Section 222 of the CMSA to acquire all the Offer Shares not accepted under the Offer. RB was subsequently delisted from the Main Market of Bursa Securities on 14 November 2011. Subsequent to the close of the Offer, the RB Group incurred additional cost due to expanded scope of work with respect to SDEB’s construction project. In addition, as at 31 December 2012, the companies within the RB Group which are involved in the construction business continue to be in a net liabilities position. It is expected that there will also be further impairment of the RB Group’s investment in the SDEB ICULS, impairment to ARC’s fixed assets and provision in respect of the amount due from ARC’s customer pursuant to the Libya housing project (which may be partially set-off against the amount due to the said customer).

6.1.2 Significant developments since the privatisation of the RB Group The RUSB Group has been involved in wastewater and sewerage technology business outside of Malaysia since the acquisition of 70% equity interest in RWT in 2005 and the last concessions entered into by the RUSB Group prior to the Offer took place in 2009 relating to the 30 MLD wastewater treatment plant in Xiaolan, Jiangxi Province on a BOT basis for a 30-year period and 50 I\i1LD wastewater treatment plant in Xinxiang, Henan Province on a TOT basis for a 28-year period. Subsequent to the Offer, the RUSB Group had entered into several MOUs and/or investment agreements relating to several water and/or wastewater treatment projects in China. The entry into these agreements enables the RUSB Group to undertake investment evaluation and feasibility study on these projects, which in turn allows it to bid competitively for these concessions, on either a BOT or TOT basis, 6. INFORMATION ON OUR GROUP (cont’d) during the bidding process. Refer to Section 7.5.2(ii}(a) of this Prospectus for further details on the MOUs and investment agreements. In January 2013, RB completed an internal group reorganisation exercise which had entailed the following: (i) acquisition by RGSB from RB of the following: (a) 70% equity interest in RUSB;
(b) 51 % equity interest in RWorley;
(c) 50% equity interest less one share in RBSB; and
(d) 100% equity interest in RBV,

for a total purchase consideration of RM825,000,000 which was satisfied by the setting-off of an amount owing by RB to RGSB of RM735,000,000 and deferred cash payment of RM90,000,000; and (ii) acquisition by RWP from RB of 100% equity interest in RGSB for a purchase consideration of RM330,000,000 which was satisfied by the provision of a guarantee by RWP to RB to fully indemnify and hold RB harmless in respect of any claims received by RB from RUSB amounting to RM330,000,000 and whereby, upon RB’s notice of any demand by RUSB, RWP shall pay RB the amount of the demand. (items (i) and (ii) above are to be collectively referred to as “Internal Reorganisation”) Subsequently on 14 June 2013, RERB had completed the following transactions: (i) acquisition of 100% equity interest in RWP from Cheval, LOSB, RCorp, Tan Sri Hamdan, YPJ, Amran bin Awaluddin and Ahmad Zahdi Jamil for a purchase consideration of RM1, 158,000,095 to be satisfied by the issuance of 492,765,998 new RERB Shares at an issue price of RM2.35 per RERB Share (“Acquisition of RWP”); and
(ii) acquisition of 30% equity interest in RUSB from LOSB, LOSB (Cayman), Tan Sri Hamdan and Ahmad Zahdi Jamil for a purchase consideration of RM326,650,000 to be satisfied by the issuance of 139,000,000 new RERB Shares at an issue price of RM2.35 per RERB Share (“Acquisition of RUSS”).

(items (i) and (ii) above are to be collectively referred to as “Internal Reorganisation II”) In January 2013, RERB had applied for an initial public offering and the listing of its shares on the Main Market of Bursa Securities (the “RERS IPO”). The prospectus in relation to the RERB IPO was lodged with the SC on 3 July 2013 and the RERB IPO was launched on 4 July 2013. However, the RERB IPO was subsequently aborted due to the events below. On 17 July 2013, a licence (“Licence”) issued by PETROI\lAS to PRWSB was suspended. PRWSB, an affiliate of RERB, is principally involved in the business of providing engineering and design services of oil and gas facilities. Pursuant to a service agreement dated 12 July 2012, PRWSB had appointed RWorley on an exclusive basis to perform detailed engineering procurement and construction management services in respect of all the projects awarded to PRWSB in Malaysia. 6. INFORMATION ON OUR GROUP (cant’d) Notwithstanding the lifting of the suspension on the Licence in respect of upstream activities on 25 July 2013, RERB had decided to voluntarily withdraw its RERB IPO application on 26 July 2013 after having consultation with the relevant joint global coordinators as well as taking into consideration the market and investor sentiment following the occurrence of the events.

6.1.3 Corporate Governance and risk management strategy As part of RERB’s effort to strengthen its corporate governance and risk management framework effots and to prevent a recurrence of the prior issues, BOO Governance Advisory Sdn Bhd (“BOO”) was appointed to carry out a detailed review of RERB’s risk management process and activities, and of its corporate governance framework and processes and to put in place the relevant structures that adheres to corporate governance best practice. These structures were subsequently adopted by Ranhill for the purpose of the corporate governance of our Group post Offering. Kindly refer to Chapter 9 of this Prospectus for the details of the aforementioned structures.
6.1.4 Pre-Offering Reorganisation On 20 June 2014, Ranhill entered into several agreements involving the relevant parties set out below, to effect the reverse take-over of Symphony by RERB via Ranhill, which was completed on 16 December 2015 to facilitate the formation of our Group for Listing, comprising the following: (i) a scheme of arrangement under Section 176 of the Act involVing Symphony, the shareholders of Symphony and Ranhill, for the exchange of Symphony Shares into Ranhill Shares at an exchange ratio of one (1) Ranhill Share for every ten (10) existing Symphony Shares (including a supplemental scheme agreement dated 28 November 2014) (“Scheme of Arrangement”);
(ii) acquisition by Ranhill from RGSB of its equity interest in RPI (including convertible unsecured loan stocks), RPII (including redeemable convertible non-cumulative preference shares), RPOM, RPOMII and RPS (collectively, the “RGSB Companies”) for a purchase consideration of RM107 million, satisfied by the issuance of 66,875,000 Ranhill Shares to the ultimate shareholders of RGSB pursuant to the nomination by RGSB at an issue price of RM1.60 per Ranhill Share, pursuant to a share sale agreement dated 20 June 2014 and a supplemental share sale agreement dated 28 November 2014 entered into between Ranhill and RGSB (“Acquisition of RGSB Companies”);

(iii) acquisition by Ranhill from RUSB of its equity interest in SAJH, RWSB and RWT (Cayman) (presently 52.1 % owned by RUSB*) (collectively, the “RUSB Companies”) for a purchase consideration of RM693 million, satisfied by the issuance of 433,125,000 Ranhill Shares to the ultimate shareholders of RUSB pursuant to the nomination by RUSB at an issue price of RM1.60 per Ranhill Share, pursuant to a share sale agreement dated 20 June 2014 and a supplemental share sale agreement dated 28 November 2014 entered into between Ranhill and RUSB (“RUSB SSA”) (“Acquisition of RUSB Companies”); * /n addition to the 52.1% equity interest in RWT (Cayman) acquired pursuant to the Acquisition of RUSB Companies, Ranhill a/so intends to acquire all the remaining 47.9% equity interest in RWT (Cayman) pursuant to the Proposed Remaining RWT (Cayman) Acquisition (further descn’bed in Section 6.1.5 be/ow) following the Offering. 70 6. INFORMATION ON OUR GROUP (cant’d) (iv) a management buy-out, comprising the divestment by Ranhill of all the equity interest in Symphony to Stone Equity for a cash consideration of RM60 million, pursuant to a share sale agreement dated 20 June 2014 entered into between Ranhill and Stone Equity (“MBO”); and
(v) granting of a call option by RGSB to Ranhill for the acquisition of RGSB’s entire 51.0% equity interest in RWorley, exercisable within the period from the third (3rd) month to the eighteenth (18th) month from the date of completion of the Offering, pursuant to the Call Option Agreement (unless otherwise mutually extended by the parties) (“RWorley Call Option”) at a call option price to be determined upon its exercise (if exercised), and be based on a valuation to be undertaken on RWorley on the exercise date using methods of valuation such as the PE MUltiple, Enterprise Value-to-EBITDA multiple, Price-to-Book multiple and/or other methods to be mutually agreed by the parties. The call option price shall be satisfied partly in cash and partly by the issuance and allotment of new Ranhill Shares to RGSB or its nominees on the completion date, at an issue price and in the proportion to be determined and mutually agreed by Ranhill and RGSB, upon the exercise of the call option.

(items (i), (ii), (iii), (iv) and (v) above are to be collectively referred to as “Pre-Offering Reorganisation”) For the avoidance of doubt, the exercise of the RWorley Call Option does not form part of the Pre-Offering Reorganisation. This would mean that RWorley will not be part of the Ranhill Group unless and until the exercise of the RWorley Call Option by Ranhill which is then subject to, among others, the: (i) approval of the SC, if required;
(ii) approval of Bursa Securities for the (a) additional listing application for the issuance of new Ranhill Shares to RGSB for satisfaction of the call option price (or part thereof); and (b) circular to be issued to the shareholders of Ranhill for the exercise of the RWorley Call Option (if required);

(iii) approval of the shareholders of Ranhill at an extraordinary general meeting to be convened (if required); and (iv) any other approvals, consents or permission that may be required from any regulatory authority or third party. In the event the RWorley Call Option is not exercised after 18 months from the date of completion of the Offering, and unless the call option period is otherwise mutually extended by the parties, the Call Option Agreement will lapse and shall cease to have any effect. Upon the exercise of the RWorley Call Option, and depending on the pricing for the new Ranhill Shares, there is a possibility that Tan Sri Hamdan and persons acting in concert with him may trigger the mandatory offer obligation under the Malaysian Code on Take-Overs and Mergers 2010 (“Take-Over Code”) pursuant to the new Ranhill Shares received from the disposal, as shareholders of RERB (being the vendor or ultimate shareholders of RWorley). Nevertheless, Tan Sri Hamdan and persons acting in concert with him intend to seek an exemption from the SC and the then shareholders of Ranhill from undertaking a mandatory offer obligation on Ranhill (“MGO Exemption”). The exercise of the RWorley Call Option would be a related party transaction under the Listing Requirements, and in which case the interested parties including, among others, Tan Sri Hamdan and persons acting in concert with him, will have to abstain from voting. Accordingly, full disclosure for a related party transaction pursuant to the Listing Requirements will be made and an independent adviser will be appointed to 71 6. INFORMATION ON OUR GROUP (cant’d) advise the non-interested directors and shareholders of Ranhill which is then a public listed company on Bursa Securities. Both RGSB and RUSB, being vendors of the Ranhill Acqusition, have nominated their ultimate shareholders, being the shareholders of their ultimate holding company, RERB, to be the direct recipients of all the consideration shares under the Ranhill Acquisition. As part of the Ranhill Acquisition, the Sukuk which was previously issued by RGSB has been novated to our wholly-owned subsidiary, RCSB, upon the completion of the Ranhill Acquisition on 15 December 2015 (“Transfer of Sukuk”). The Sukuk is a RM800 million guaranteed IMTN, duly issued by RGSB and constituted by a trust deed dated 22 April 2011, executed between Malaysian Trustees Berhad, as trustee and RGSB, as issuer. At the same time, Ranhill has nominated RCSB to hold the RGSB Companies and RUSB Companies acquired pursuant to the Ranhill Acquisition and be the intermediate holding company of our Group.

6.1.5 Proposed Remaining RWT (Cayman) Acquisition The RUSB SSA executed between Ranhill and RUSB for the Acquisition of RUSB Companies shall also effect the Proposed Remaining RWT (Cayman) Acquisition. The Proposed Remaining RWT (Cayman) Acquisition entails the proposed acquisition of all the remaining 47.9% equity interest in RWT (Cayman) by Ranhill from RUSB for a cash consideration of USD25,419,356, which is subject to interest at 5% per annum with effect from 16 August 2013 up to the completion of the following agreements: (i) RWT (Cayman) SSA 1, the conditional share sale agreement entered into between RUSB and Robinson on 12 June 2014 for RUSB to acquire 45.23% equity interest in RWT (Cayman) for a cash consideration of USD 24,000,000, which is SUbject to interest at 5% per annum with effect from 16 August 2013* up to the completion of the agreement; and
(ii) RWT (Cayman) SSA 2, the conditional share sale agreement entered into between RUSB and Sierra Master (M) Sdn Bhd, Ahmad Zahdi Jamil, Koh Boon Sian, Faizal Othman and Soon Tet Heng (collectively the “RWT (Cayman) Vendors”) on 16 June 2014 for RUSB to acquire 2.67% equity interest in RWT (Cayman) from the RWT (Cayman) Vendors for a cash consideration of USD1 ,419,356, which is SUbject to interest at 5% per annum with effect from 16 August 2013* up to the completion of the agreement.

As part of the Internal Reorganisation in January 2013, RUSB had previously entered into a sale of shares agreement with each of Robinson and the RWT (Cayman) Vendors respectively (collectively the “RWT (Cayman) Sale of Shares Agreements’). Amongst others, it was agreed between RUSB and Robinson and the RWT (Cayman) Vendors that RUSB will pay the consideration for the sale of the ordinary shares in RWT (Cayman) on the date of listing of RERB shares on the Main Market of Bursa Securities, failing which Robinson and the RWT (Cayman) Vendors would be entitled to impose late payment interest of 5% per annum. The completion of the RWT (Cayman) Sale of Shares Agreements were expected to occur by mid-August 2013. However, due to the termination of RERB’s IPO (as described in Section in 6.1.2 above), Robinson and the RWT (Cayman) Vendors agreed to terminate the RWT (Cayman) Sale of Shares Agreements. Pursuant to the Pre-Offering Reorganisation, RUSB had resumed negotiation with Robinson and the RWT (Cayman) Vendors for the purchase of Robinson’s and the RWT (Cayman) Vendors’ collective equity interest of 47.9% in RWT (Cayman) pursuant to the RWT (Cayman) SSA 1 and the RWT (Cayman) SSA 2. Under these acquisitions, RUSB agreed to pay to Robinson and RWT (Cayman) Vendors interest at 5% per annum with effect from 16 August 2013 up to its completion date. 72 6. INFORMATION ON OUR GROUP (cont’d) The terms and conditions of the RUSB SSA in respect of the Proposed Remaining RWT (Cayman) Acquisition is a replica of the terms of the RWT (Cayman) SSA 1 and the RWT (Cayman) SSA 2, which were entered into to facilitate the Proposed Remaining RWT (Cayman) Acquisition. The total cash consideration of USD25,419,356 (subject to interest at 5% per annum with effect from 16 August 2013 up to its completion date) is reflective of the consideration to be paid by RUSB to Robinson and the RWT (Cayman) Vendors under the RWT (Cayman) SSA1 and the RWT (Cayman) SSA 2. The Proposed Remaining RWT (Cayman) Acquisition is conditional on the completion of RWT (Cayman) SSA 1, RWT (Cayman) SSA 2 and the Offering but not vice-versa. The total cash consideration for the Proposed Remaining RWT (Cayman) Acquisition shall be payable by Ranhill to RUSB on the date of completion of the Offering or the RWT (Cayman) SSA 1 and RWT (Cayman) SSA 2, whichever is later. RWT (Cayman) will become our wholly-owned sUbsidiary upon the completion of the Proposed Remaining RWT (Cayman) Acquisition.
6.1.6 The listing of the Ranhill Group In essence, the Internal Reorganisation, Internal Reorganisation II and Pre-Offering Reorganisation are steps taken by our Promoters towards realising their vision of creating a listed energy and resources group with stable cash flows coupled with growth opportunities, particularly the water and wastewater treatment businesses in China, and our need to raise the necessary funds to finance such extensive capital investment should these investment opportunities materialise. The granting of the RWorley Call Option offers the flexibility/option for our Group and our shareholders to include RWorley as part our Group in the future when it is expected to turn-around from its current loss-making status and that the acquisition of RWorley is at an opportune timing and/or when the market conditions as well as investors’ sentiment and demand for oil and gas exposure is positive. We have allocated approximately 50.2% of the gross proceeds expected to be raised from the Public Issue to fully redeem RPI’s outstanding IMTN and partially redeem the Sukuk which in turn will increase our capacity for debt and project financing to facilitate our business strategies and future plans as set out in Section 7.3 of this Prospectus, as well as to facilitate future dividend payouts. We have also allocated approximately 11.8% of the gross proceeds expected to be raised from the Public Issue to part-finance the equity portion of the development cost required for the water and/or wastewater treatment projects in China while the remaining development cost is expected to be funded using our internally generated funds and bank borrowings. We have procured an indicative offer amounting to RMB3 billion from a bank in China to finance the project development cost in China. In order to enhance our position as well as reap higher benefits from our potential ventures in China, we are also undertaking the Proposed Remaining RWT (Cayman) Acquisition where we have allocated approximately 19.6% of the gross proceeds expected to be raised from the Public Issue to finance the said acquisition. Investors should note that the business profile of our Group is different from that of the RB Group, in view of our group structure post the Pre-Offering Reorganisation and our focus on the power generation business and the environment business with the increased exposure as well as the additional equity stake in RWT (Cayman) to be acquired. 73 I Company No.1 091 059-K I 6. INFORMATION ON OUR GROUP (cont’d)
6.1.7 Our Group structure Our Group structure, including our joint ventures, upon our Listing is set out below: 100’%. RVfT {Tha\}

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6. INFORMATION ON OUR GROUP (cont’d) 6.1.8 Share capital As at date of this Prospectus, our authorised share capital is RM2,000,000,000 comprising 2,000,000,000 Shares whilst our issued and paid-up share capital is RM565,994,967 comprising 565,994,967 Shares. The changes in our issued and paid-up share capital since the date of our incorporation up to the date of this Prospectus are as follows: No. of Cumulative Date of shares issued and paid-allotment allotted Par value Consideration up share capital (RM) (RM) 28 April 2014 2 1.00 Cash 2.00 11 December 65,994,965 1.00 Consideration for the 65,994,965.00 2015 Scheme of Arrangement 11 December 500,000,000 1.00 Consideration for the 500,000,000.00 2015 Ranhill Acquisition Our issued and paid-up share capital will increase up to RIVI940,994,967 comprising 940,994,967 Shares following the completion of the Public Issue. As at the LPD, our Company does not have any outstanding warrants, options, convertible securities or uncalled capital.
6.2 Subsidiaries and joint ventures As at 15 December 2015, our Subsidiaries and joint ventures are as follows: Our Name Date and country of incorporation  Business commencement date  Issued and paid-up share capital  effective equity interest (%)  Principal activities  SUbsidiary of Ranhill  RCSS 24 September 2014 Malaysia  1 January 2015  RM2  100.00  Investment holding company and provision of management services to its subsidiaries  Subsidiaries of RCSB
RPI 12 January 27 July 1998 RM10,000,000 60.00 IPP 1995 Malaysia RPII 7 August 1995 6 March 2010 RM11,450,000 80.00 IPP Malaysia RPOM 21 January 10 August 1998 RM500,000 60.00 O&M services for power 1997 plants Malaysia RPOMII 7 August 1995 1 August 2009 RM500,000 80.00 O&M services for power Malaysia plants 6. INFORMATION ON OUR GROUP (cant’d) Name  Date and country of incorporation  RPS  17 May 1995 Malaysia  SAJH  5 February 1999 Malaysia
RWSB  21 February  2005  Malaysia  RWT  12 November  (Cayman)  2008  Cayman  Islands
Subsidiary of RWSB PWSB 8 March 2012 Malaysia Business commencement date 1 January 2013 1 March 2000 20 April 2005 30 April 2009 1 April 2012 Issued and paid-up share capital RM500,000 RM100,000,000  Our effective equity interest (%) 100.00 80.00  RM750,000  100.00  USD32,900,000  (1)52.10  RM250,000  60.00
Principal activities Provision of support services  to  the  subsidiaries  in  the  power division  Abstraction  of  raw  water,  treatment  of  water,  distribution  and
sale of treated water to consumers in the State of Johor pursuant to its migration from services concession arrangement to operating service arrangement Providing and carrying on project management consultancy services relating to both domestic and overseas water-related projects Investment holding activities and provision of consultancy services, project management, engineering, procurement, construction, supply of equipment, O&M services to both municipal and industrial water, sewerage and wastewater treatment plants Provision, operation, management, improvement and upgrading of the water advanced pressure management in relation to NRW related business or activities 6. INFORMATION ON OUR GROUP (cont’d) Our  Date and  Business  Issued and  effective  country of  commencement  paid-up share  equity  Name  incorporation  date  capital  interest  Principal activities  (%)  Subsidiaries of RWT (Cayman)  RWT  7 June 1994  1 October 1994  RM7,500,000  52.10  Investment holding and  Malaysia  provision of consultancy  services,  project  management,  engineering,  procurement,  construction,  supply  of  equipment,  O&M  services  to  both  municipal and industrial  water,  sewerage  and  wastewater  treatment  plants  RWHK  26 November  1 April 2013  HKD266,648,960  52.10  Undertaking  investment  2008  holding  activities  and  Hong Kong  provision  of  consultancy,  project  management,  O&M  services  relating  to  wastewater  treatment  plants  Subsidiaries of RWT  RWT (Thai)  6 March 2000  23 August 2000  THB2,OOO,000  (2)52.10  Undertaking  Thailand  consultancy  services,  project  management,  engineering,  supply  construction  and  operation  for  potable  and  wastewater  treatment plant  KWI  9 May 2001  RMB513,893  26.57  Ceased  operations  (Guangzhou)  China  since  4  November  2005.  Currently,  KWI  (Guangzhou) is pending  liquidation  and  to  be  struck off  AnuRAK  1 September  29 September  THB1,390,OOO  52.10  Undertaking  potable  2005  2006  water,  wastewater  and  Thailand  reclaimed  water  treatment  services  for  domestic and  industrial  use  TZS  3 April 2007  1 August 2007  RM2  52.10  Undertaking  Malaysia  construction,  structural,  civil,  engineering,  electrical  and  mechanical  works  to  potable  water  and  wastewater  treatment  plant
6.  INFORMATION ON OUR GROUP (cont’d)  Name  Date and country of incorporation  Business commencement date  Issued and paid-up share capital  Our effective equity interest (%)  Principal activities  Subsidiaries of RWHK  RWT (Shanghai)  5 February 2007 China  27 December 2007  USD200,000  52.10  Undertaking consultancy services on potable water, wastewater technologies and project management  Ranhill (Nanchang)  18 January 2007 China  1 March 2009  USD12,875,000  52.10  Undertaking wastewater treatment services for Xiaolan Economic Development Zone  Ranhill (Hefei)  30 July 2007 China  1 April 2011  USD7,520,000  52.10  Undertaking wastewater treatment services for Hefei Chemical Industrial Park  Ranhill (Xinxiang)  22 January 2008 China  1 April 2013  USD6,120,000  52.10  Undertaking wastewater treatment services for Xinxiang Industrial Park  Ranhill (Yingkou)  12 January 2009 China  -*  USD5,732,000  52.10  To undertake wastewater treatment services for Yingkou Economic and Technology Development  Ranhill International Trade  28 March 2012 Hong Kong  -*  HKD10,000  26.57  To undertake investment holding activities and provision of consultancy, project management, O&M services relating to potable water treatment  Ranhill Venture  30 September 2013 Hong Kong  -*  HKD10,000  52.10  To undertake investment holding activities and provision of consultancy, project management, O&M services relating to wastewater treatment  Ranhill (Fuzhou)  23 September 2013 Hong Kong  USD3,000,000  52.10  To undertake wastewater treatment services for Yihuang Industrial Park  Ranhill (Changfeng)  10 October 2013 China  -*  USD1,680,000  52.10  To undertake wastewater treatment services for Xiatang Heavy Industrial Park  78
6. INFORMATION ON OUR GROUP (cont’d) Our  Date and  Business  Issued and  effective  country of  commencement  paid-up share  equity  Name  incorporation  date  capital  interest  Principal activities  (%)  Ranhill  25 November  -*  USD3,000,000  52.10  To  undertake  (Wanzai)  2013  wastewater  treatment  China  services  for  Wanzai  Industrial Park  Ranhill  16 January  -*  -(3)  (3)  To  undertake  (Qingtongxia)  2014  wastewater  treatment  China  services for Qingtongxia  New  Material  Base  Industrial Park  Ranhill  12 August  -A  -(4)  (4)  To  undertake  (Fuxin)  2015  wasterwater  treatments  China  services for Fuxin Coal  Chemical  Industrial  Base  Ranhill  29 September  -AA  USD1,000,000  52.10  To  undertake  design,  (Chongren)  2015  construction,  and  China  operation of wastewater  treatment facilities  Joint venture of RWHK  PWL  25 June 2003  1 September  USD100  19.28  Construction  of  water­ Federal  2006  infrastructure  projects,  Territory of  water  treatment,  Labuan,  management  and  Malaysia  supply of treated  water  for  government,  industries,  commercial  and  domestic  consumers  Subsidiary of PWL
Yichun  25 July 2003  1 September  RfVlB38,000,000  19.28  Undertaking  water  Pinang  China  2006  treatment, management  and  supply  of  treated  water  Notes:  The company has yet to commence business and reason for the delay in the commencement of  business as well as the estimated commencement date are as follows:  Estimated commencement  Name  Reason for delay  date
KWI (Guangzhou)  Due to a disagreement on direction of the company shareholders.  the business between the  The company is pending to be stmckoff.  79

 

6. INFORMATION ON OUR GROUP (cant’d) Estimated commencement Name Reason for delay date /\ /\/\ (1) (2)
(3)

Ranhill (Yingkou)  The wastewater treatment and reclamation plant of Ranhill (Yingkou) is still under construction. The business of Ranhill (Yingkou) will only commence after the completion of the construction of the plant and upon commencement ofwater treating process.  1st quarter of2016  Ranhill International Trade  The company has not secured any water treatment concession since its incorporation.  The company is currenUy exploring an opportunity in relation to a water treatment  plant project in Hubei province of China. In the event the  company manage the water  ro secure treatment  concession,  its  business  will  commence upon commencement of the plant’s water treating process.  Ranhill Venture  The company was incorporated for the purpose of collaborating with potential investor(s) to participate in water business in China  As at the LPO, there is no indication on when the collaboration can be secured.  Ranhill (Fuzhou)  The wastewater treatment plant of Ranhill (Fuzhou) is still under construction. The business of Ranhill (Fuzhou) will only commence after the completion of the construction of the plant and upon commencement ofwater treating process  1st quarter of2016  Ranhill (Changfeng)  The wastewater treatment plant of Ranhill (Changfeng) is still under construction. The business of Ranhill (Changfeng) will only commence after the completion of the construction of the plant and upon commencement ofwater treating process  4’h quarter of2016  Ranhill (Wanzai)  While the construction of the wastewater treatment plant of Ranhill (Wanzai) is completed, the business ofRanhill (Wanzai) will only commence upon commencement of water treating process  1st quarter of2016  Ranhill (Qingtongxia)  The company was incorporated for the purpose of undertaking wastewater treatment concession in Qingtongxia New Material Base Industrial Park  As at the LPO, the company has not entered into the BOT agreement with the local authority.
The company was newly incorporated and has not secured any water treatment concession since its incorporation. The company was newly incorporated and its wastewater treatment plant is still under construction. The business of Ranhill (Chongren) is estimated to commence in the 2″d quarter of 2017 after the completion ofthe construction ofthe plant and upon commencement ofwater treating process. Upon completion of the Proposed Remaining RWT (Cayman) Acquisition, Ranhill will hold 100% of the issued and paid-up share capital ofRWT (Cayman). Pursuant to Section 6A(6)(d) of the Act, RWT (Thai) is deemed a wholly-owned subsidiary of RWT by virtue of a trust arrangement with Lamom Sirisayunt, Prapoj Jirasathitpompong and Nataya Charuwanakul. Ranhill (Qingtongxia) is deemed a subsidiary of RWHK under the laws of PRC by way of registration notwithstanding that its issued and paid-up capital has not been paid. 80 6. INFORMATION ON OUR GROUP (cant’d) (4) Ranhill (Fuxin) is deemed a subsidiary of RWHK under the laws of PRC by way of registration notwithstanding that its issued and paid-up capital has not been paid. The details of our Subsidiaries and joint ventures as at 15 December 2015 are set out below: 6.2.1 Our SUbsidiary RCSB (Company No. 1110393-P) (i) History and business
RCSB was incorporated in Malaysia under the Act on 24 September 2014 as a private limited company under the its present name. RCSB is principally involved in investment holding and provision of management services to its subsidiaries, and commenced its business on 1 January 2015.
(ii) Share capital

As at the LPD, the authorised share capital of RCSB is RM400,000 comprising 400,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of RCSB is RM2 comprising 2 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of RCSB since its incorporation are as follows: Cumulative Date of  No. of  issued and  allotment!  shares  paid-up  sub-division  allotted  Par value  Consideration  share capital  (RM)  (RM)  24 September  2  1.00  Cash  2.00  2014
(iii) Shareholder RCSB is our wholly-owned subsidiary. (iv) Subsidiaries and associate As at 15 December 2015, the direct subsidiaries of RCSB are RPI, RPII, RPOM, RPOMII, RPS, SAJH, RWSB and RWT (Cayman), details of which are set out in Section 6.2.2 of this Prospectus. RCSB does not have any associates as at 15 December 2015. 6.2.2 Subsidiaries of RCSB 6.2.2.1 RPI (Company No. 330342-K) (i) History and business RPI was incorporated in Malaysia under the Act on 12 January 1995 as a private limited company under the name of Powertron Resources Sdn Bhd. On 1 October 2004, Powertron Resources Sdn Bhd changed its name to its present name. RPI is an IPP and commenced its business on 27 July 1998. 81 6. INFORMATION ON OUR GROUP (cant’d) (ii) Share capital As at the LPD, authorised share capital of RPI is RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of RPI is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. As at the LPD, RPI has, in issue, convertible unsecured loan stock (“CULS”) amounting to RM29,000,000 comprising 29,000,000 CULS of RM1.00 in nominal value. The salient terms of the CLiLS are as follows: Maturity date 30 June 2019 Interest rate 12.5% per annum calculated from the issue date on presentation and surrender of the CULS Redemption On the maturity date, the CULS certificate, if not earlier converted, will be redeemed for its full principal amount together with all unpaid accrued interest. Subject to the requirements (if any) of RPI’s lenders, the CULS may be redeemed prior to the maturity date with all unpaid interest accrued up to the last anniversary of the issue date prior to the date of redemption, if so approved by a meeting of the holders of the CULS. Conversion RM1.00 nominal value of CULS for one ordinary share of price RM1.00 each in RPI issued as fully paid-up Conversion Up to maturity date period
Ranking and All converted shares will rank pari passu upon allotment but dividend will not be entitled to dividends declared for the financial year entitlement preceding the year of conversion There has been no change in the issued and paid-up share capital of RPI for the past 3 years preceding the LPD. (iii) Shareholders and holders of CULS As at 15 December 2015, the shareholders of RPI and their shareholdings in RPI are as follows: No. of ordinary Name shares held % RCSB 6,000,000 60.00 SECSB 4,000,000 40.00 As at 15 December 2015, the holders of the CULS and their holdings are as follows: Name % RCSB  17,400,000  60.00  SECSB  11,600,000  40.00  82
6. INFORMATION ON OUR GROUP (cont’d) (iv)
(i)
(ii)

6.2.2.2 Subsidiary and associate As at the LPD, RPI does not have any sUbsidiary or associate. RPII (Company No. 354304-U) History and business RPII was incorporated in Malaysia under the Act on 7 August 1995 as a private limited company under the name of EPE Ventures Sdn Bhd. On 28 September 2004, EPE Ventures Sdn Bhd changed its name to Ranhill Power Ventures Sdn Bhd. On 7 December 2005, Ranhill Power Ventures Sdn Bhd changed its name to Ranhill Tuaran Sdn Bhd, and on 11 December 2006, Ranhill Tuaran Sdn Bhd changed its name to its present name. RPII is an IPP and commenced its business on 6 March 2010. Share capital As at the LPD, authorised share capital of RPII is RM25,000,000 comprising 22,000,000 ordinary shares of RM1.00 each, and 300,000,000 redeemable convertible non-cumulative preference shares (“RCNPS”) of RMO.01 each. Following the redemption of 90,000,000 RCNPS on 4 February 2014, the issued and paid-up share capital of RPII is RM11,450,000 comprising 10,000,000 ordinary shares of R1IJ11.00 each and 145,000,000 RCNPS of RMO.01 each. The salient terms of the RCNPS are as follows: Issue price RM1.00 per RCNPS 1stMaturity date tranche of the RCNPS issued on 25 May 2009 where 80,000,000 RCNPS are still outstanding: 25 May 2019 2nd tranche of the RCNPS issued on 21 August 2009 where 65,000,000 RCNPS are still outstanding: 21 August 2019 Dividend rate To be determined by the directors of RPII, Tan Sri Hamdan and/or Amran bin Awaluddin*, at its absolute discretion from time to time payable in respect of RCNPS in any financial year * As at the LPD, Amran bin Awaluddin had resigned as a director of RPI/ and RPI/ is in the midst of procuring the RCNPS holders’ consent to nominate another director of RP/I for this purpose. Conversion Each RMO.01 nominal value of RCNPS can be converted into price one new ordinary share of RM1.00 each Conversion Up to maturity date. Unless otherwise agreed by the parties, period all outstanding RCNPS shall be converted into new RPII ordinary shares on maturity date Ranking The new ordinary shares of R1\/I1.00 each in RPII to be issued pursuant to the conversion of the RCNPS shall upon allotment and issue rank pari passu in all respects with all the existing ordinary shares in issue except that the said new ordinary shares will not be entitled to any dividends or other distributions whose entitlement date falls on or prior to the date of the allotment of the said new ordinary shares. 83

 

6. INFORMATION ON OUR GROUP (cont’d) Voting rights The RCNPS holders shall have the same rights as ordinary shareholders with respect to receiving notices, reports and audited accounts and attending general meetings of RPII. The RCNPS shall not be entitled to a right to vote at any general meeting of RPII except with regards to: (a)  a resolution to reduce the capital of RPII;  (b)  a resolution to increase creation of further RCNPS;  the  capital  of  RPII  by  (c)  a resolution for the disposal of the whole of RPIl’s property, business and undertakings;  (d)  any proposal that affects the rights attached to the RCNPS;  (e)  a resolution to wind-up RPII;  (f)  during the winding-up of RPII; and  (g)  on a proposal for repayment of capital  Status  (a)  The RCNPS shall as between the RCNPS holders thereof rank pari passu in all respects and without discrimination and preference;  (b)  Dividends for RCNPS shall have preference dividend of all other classes of shares; and  over
(c) Upon winding-up, the return of capital and premium of RCNPS shall have preference over all other classes of shares. Capital rights The RCNPS shall not confer the holder thereof any right to participate in profits and on a return in excess of capital on liquidation or winding-up of RPII other than on redemption, up to the redemption price and any payment of accrued dividend as stated herein in priority to the ordinary shares of RM1.00 each in RPII. Save as aforesaid, the holder of the RCNPS shall not be entitled to participate in the capital distribution of RPII by way of bonus or otherwise. Redemption RPII may at its absolute discretion redeem any unconverted RCNPS from time to time and at any time after the issue date subject to: (a) availability of funds; and
(b) availability of profits.

The redemption price of each RCNPS shall be RM1.00. As between the RCNPS holders, early redemption shall be on a pari passu basis. Save for the redemption of 90,000,000 RCNPS on 4 February 2014, there has been no change in the issued and paid-up share capital of RPI/ for the past 3 years preceding the LPD. 6. INFORMATION ON OUR GROUP (cont’d) (iii) Shareholders and holders of RCNPS As at 15 December 2015, the shareholders of RPII and their shareholdings in RPII are as follows: No. of ordinary Name shares held % RCSB 8,000,000 80.00 SECSB 2,000,000 20.00 As at 15 December 2015, the holders of RCNPS and their holdings are as follows: No. of Name RCNPS held % RCSB 116,000,000 80.00 SECSB 29,000,000 20.00 (iv) Subsidiary and associate As at the LPD, RPII does not have any sUbsidiary or associate. 6.2.2.3 RPOM (Company No. 417928-T) (i) History and business RPOM was incorporated in Malaysia under the Act on 21 January 1997 as a private limited company under the name of Reward Resources Sdn Bhd. On 1 October 2004, Reward Resources Sdn Bhd changed its name to its present name. RPOM is principally involved in the provision of O&M services for power plants, and commenced its business on 10 August 1998. (ii) Share capital As at the LPD, the authorised share capital of RPOM is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid­up share capital of RPOM is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of RPOM for the past 3 years preceding the LPD. (iii) Shareholders As at 15 December 2015, the shareholders of RPOM and their shareholdings in RPOM are as follows: No. of ordinary Name shares held % RCSB 300,000 60.00 SECSB 200,000 40.00 6. INFORMATION ON OUR GROUP (cont’d) (iv) Subsidiary and associate As at the LPD, RPOM does not have any subsidiary or associate. 6.2.2.4 RPOIVIII (Company No. 354306-D) (i) History and business RPOMII was incorporated in Malaysia under the Act on 7 August 1995 as a private limited company under the name of EPE Components Sdn Bhd. On 28 September 2004, EPE Components Sdn Bhd changed its name to Ranhill Power Components Sdn Bhd. On 7 December 2005, Ranhill Power Components Sdn Bhd changed its name to Ranhill Tuaran O&M Sdn Bhd and on 17 September 2009, Ranhill Tuaran O&M Sdn Bhd changed its name to its present name. RPOMII is principally involved in the provision of O&M services for power plants, and commenced its business on 1 August 2009. (ii) Share capital As at the LPD, the authorised share capital of RPOMII is RM1,000,000 comprising 1,000,000 ordinary shares of RIVl1.00 each. The issued and paid­up share capital of RPOMII is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of RPOMII for the past 3 years preceding the LPD. (iii) Shareholders As at 15 December 2015, the shareholders of RPOMII and their shareholdings in RPOMII are as follows: Name % RCSB 400,000 80.00 SECSB 100,000 20.00 (iv) Subsidiary and associate As at the LPD, RPOMII does not have any subsidiary or associate. 6.2.2.5 RPS (Company No. 343504-P) (i) History and business RPS was incorporated in Malaysia under the Act on 17 May 1995 as a private limited company under the name of Trans Bakti Sdn Bhd. On 28 September 2004, Trans Bakti Sdn Bhd changed its name to Ranhill Trans Bakti Sdn Bhd and on 5 April 2013, Ranhill Trans Bakti Sdn Bhd assumed its present name. RPS is principally involved in the provision of support services to the subsidiaries in the power division and commenced business on 1 January 2013. 86 6. INFORMATION ON OUR GROUP (cant’d) (ii) (iii) (iv)
(i)

6.2.2.6 (ii) (iii) Share capital As at the LPD, the authorised share capital of RPS is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid­up share capital of RPS is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of RPS for the past 3 years preceding the LPD. Shareholder As at 15 December 2015, RPS is a wholly-owned subsidiary of RCSB. SUbsidiary and associate As at the LPD, RPS does not have any subsidiary or associate. SAJH (Company No. 476718-H) History and business SAJH was incorporated in Malaysia under the Act on 5 February 1999 as a private limited company under the name of Sempurna Pelita Sdn Bhd. On 26 May 1999, Sempurna Pelita Sdn Bhd changed its name to its present name. SA~IH is principally involved in the abstraction of raw water, treatment of water, distribution and sale of treated water to consumers in the State of Johor pursuant to its migration from service concession arrangement to operating service arrangement, and commenced its business on 1 March 2000. Share capital As at the LPD, the authorised share capital of SAJH is RM165,000,000 comprising 149,999,999 ordinary shares of RM1.00 each, one special share of RM1.00 each and 150,000,000 preference shares of R1\II0.10 each. The issued and paid-up share capital of SAJH is RM100,000,000 comprising 100,000,000 ordinary shares of RM1.00 each. One special share of RM1.00 was issued in the name of the Chief Minister of Johor on 26 May 1999. Subsequent to SAJH’s migration to the licensing regime, the special share was redeemed on 31 October 2012. Save for the redemption of the special share, there has been no change in the issued and paid-up share capital of SAJH for the past 3 years preceding the LPD. Shareholders As at 15 December 2015, the shareholders of SAJH and their shareholdings in SAJH are as follows: No. of ordinary Name shares held % Ress  80,000,000  80.00  State Secretary Incorporation*  20,000,000  20.00  87
6. INFORMATION ON OUR GROUP (cont’d) (iv)
(i)
(ii)

6.2.2.7 (iii) (iv)
(i)

6.2.2.8 (ii) Note: As nominated by the State Government of Johor. Subsidiary and associate As at the LPD, SAJH does not have any subsidiary or associate. RWSB (Company No. 681858-H) History and business RWSB was incorporated in Malaysia under the Act on 21 February 2005 as a
private limited company under its present name. RWSB is principally involved in providing and carrying on project
management consultancy services relating to both domestic and overseas water-related projects, and commenced its business on 20 April 2005. Share capital As at the LPD, the authorised share capital of RWSB is RM1,000,OOO
comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid­up share capital of RWSB is RM750,000 comprising 750,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of RWSB for the past 3 years preceding the LPD. Shareholder As at 15 December 2015, RWSB is a wholly-owned subsidiary of RCSB.
Subsidiary and associate As at the LPD, the direct subsidiary of RWSB is PWSB, details of which are set out in Section 6.2.3 of this Prospectus. As at the LPD, RWSB does not have any associate.
RWT (Cayman) (Registration No. CT219678) History and business RWT (Cayman) was incorporated in Cayman Islands under the laws of
Cayman Islands on 12 November 2008 as an exempted company under its
present name. RWT (Cayman) is principally involved in investment holding activities and provision of consultancy services, project management, engineering, procurement, construction, supply of equipment, O&M services to both municipal and industrial water, sewerage and wastewater treatment plants, and commenced its business on 30 April 2009.
Share capital As at the LPD, the authorised and issued and paid-up share capital of RWT (Cayman) is USD32,900,000 comprising 32,900,000 shares of USD1.00 each.
6. INFORMATION ON OUR GROUP (cant’d) There has been no change in the issued and paid-up share capital of RWT (Cayman) for the past 3 years preceding the LPD. (iii) Shareholders As at 15 December 2015, the shareholders of RWT (Cayman) and their shareholdings in RWT (Cayman) are as follows: No. of ordinary Name shares held % RCSB 17,140,000 (1)52.10 Robinson 14,880,000 45.23 Sierra Master (M) Sdn Bhd 412,000 1.25 Ahmad Zahdi Bin Jamil 144,000 0.43 Koh Boon Sian 108,000 0.33 Faizal Othman 108,000 0.33 Soon Tet Heng 108,000 0.33 Note: (1) Upon completion of the Proposed Remaining RWT (Cayman) Acquisition, Ranhill (via RCSB) will hold 100.00% of the issued and paid-up share capital of RWT (Cayman). (iv) Subsidiaries and associate As at the LPD, the direct subsidiaries of RWT (Cayman) are RWT and RWHK, details of which are set out in Section 6.2.4 of this Prospectus. As at the LPD, RWT (Cayman) does not have any associate.
6.2.3 Subsidiary of RWSB 6.2.3.1 PWSB (Company No. 981411-V) (i) History and business PWSB was incorporated in Malaysia under the Act on 8 March 2012 as a private limited company under its present name. PWSB is principally involved in the provision, operation, management, improvement and upgrading of the water advanced pressure management in relation to NRW related business or activities, and commenced its business on 1 April 2012. (ii) Share capital As at the LPD, the authorised share capital of PWSB is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid­up share capital of PWSB is RM250,000 comprising 250,000 ordinary shares of RM1.00 each. Details of the changes to the issued and paid-up share capital of PWSB since its incorporation are as follows: 6. INFORMATION ON OUR GROUP (cont’d) Cumulative No. of issued and Date of shares paid-up allotment allotted Par value Consideration share capital (RM) (RM) 8 March 2012 100 1.00 Cash 100 29 March 2012 49,900 1.00 Cash 50,000 28 June 2012 200,000 1.00 Cash 250,000 (iii) Shareholders As at the LPD, the shareholders of PWSB and their shareholdings in PWSB are as follows: No. of ordinary Name shares held % RWSB 150,000 60.00 Ultimate Seasons Sdn Bhd 100,000 40.00 (iv) Subsidiary and associate As at the LPD, PWSB does not have any sUbsidiary or associate.

6.2.4 Subsidiaries of RWT (Cayman) 6.2.4.1 RWT (Company No. 303007-T) (i) History and business RWT was incorporated in Malaysia under the Act on 7 June 1994 as a private limited company under the name of Chemasia Engineering Sdn Bhd. On 5 January 1998, Chemasia Engineering Sdn Bhd changed its name to Krofta-Chemasia Sdn Bhd. Krofta-Chemasia Sdn Bhd subsequently changed its name into KWI Far East Sdn Bhd on 8 May 2000. KWI Far East Sdn Bhd then changed its name to Ranhill KWI Sdn Bhd on 9 April 2005. Ranhill KWI Sdn Bhd then changed its name to its present name on 23 May 2006. RWT is principally involved in investment holding activities and provision of consultancy services, project management, engineering, procurement, construction, supply of equipment, O&M services to both municipal and industrial water, sewerage and wastewater treatment plant, and commenced its business on 1 October 1994. (ii) Share capital As at the LPD, the authorised share capital of RWT is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of RWT is RM7,500,000 comprising 7,500,000 ordinary shares of RM1.00 each. Details of the change to the issued and paid-up share capital of RWT for the past 3 years preceding the LPD are as follows: 6. INFORMATION ON OUR GROUP (cont’d) Cumulative No. of issued and Date of shares paid-up allotment allotted Par value Consideration share capital (RM) (RM) 9 August 2012 3,000,000 1.00 Cash 7,500,000 (iii) Shareholder RWT is a wholly-owned subsidiary of RWT (Cayman).
(iv) Subsidiaries and associate As at the LPD, the direct subsidiaries of RWT are RWT (Thai), KWI (Guangzhou), AnuRAK and TZS, details of which are set out in Section 6.2.5 of this Prospectus. As at the LPD, RWT does not have any associate.
6.2.4.2 RWHK (Registration No. 1289802) (i) History and business RWHK was incorporated in Hong Kong under the Companies Ordinance on 26 November 2008 as a private limited company under its present name. RWHK is principally involved in investment holding and provision of consultancy, project management, O&M services relating to wastewater treatment plants, and commenced its business on 1 April 2013. (ii) Share capital As at the LPD, the issued and paid-up share capital of RWHK is HKD266,648,960 comprising 226,648,960 ordinary shares of HKD1.00 each. There has been no change in the issued and paid-up share capital of RWHK for the past 3 years preceding the LPD. (iii) Shareholder RWHK is a wholly-owned subsidiary of RWT(Cayman).
(iv) Subsidiaries and associate As at the LPD, the direct subsidiaries of RWHK are RWT (Shanghai), Ranhill (Nanchang), Ranhill (Hefei), Ranhill (Xinxiang), Ranhill (Yingkou), Ranhill International Trade, Ranhill Venture, Ranhill (Fuzhou), Ranhill (Changfeng), Ranhill (Wanzai),Ranhill (Qingtongxia), Ranhill (Fuxin) and Ranhill (Chongren), details of which are set out in Section 6.2.6 of this Prospectus. The direct joint venture of RWHK as at the LPD is PWL, details of which are set out in Section 6.2.7 of this Prospectus. As at the LPD, RWHK does not have any associate.

6.2.5 Subsidiaries of RWT 6.2.5.1 RWT (Thai) (Registration No. 0105543023170) (i) History and business RWT (Thai) was incorporated in Thailand under the laws of Thailand on 6 March 2000 as a private limited company under the name of KROFTA­91 6. INFORMATION ON OUR GROUP (cont’d) CHEMASIA (Thai) Ltd. RWT (Thai) changed its name to KWI (Thai) Ltd on 1 October 2003 and subsequently assumed its present name on 1 June 2006. RWT (Thai) is principally involved in the business of undertaking consultancy services, project management, engineering, supply construction and operation for potable and wastewater treatment plant, and commenced its business on 23 August 2000. (ii) Share capital As at the LPD, the issued and paid-up share capital of RWT (Thai) is THB2,000,000 comprising 20,000 ordinary shares of THB100.00 each. RWT (Thai) does not have an authorised share capital. There has been no change in the issued and paid-up share capital of RWT (Thai) for the past 3 years preceding the LPD. (iii) Shareholders As at the LPD, the shareholders of RWT (Thai) and their shareholdings in RWT (Thai) are as follows: Name % RWT 9,800 (1)49.00 Lamom Sirisayunt 4,190 20.95 Prapoj Jirasathitpornpong 2,010 10.05 Nataya Charuwanakul 4,000 20.00 Note: (1) Pursuant to Section 6A(6)(d) of the Act, RWT (Thai) is deemed a wholly­owned subsidiary of RWT by virtue of a trust arrangement with Lamom Sirisayunt, Prapoj Jirasathitpompong and Nataya Charuwanakul. (iv) Subsidiary and associate As at the LPD, RWT (Thai) does not have any subsidiary or associate.
6.2.5.2 KWI (Guangzhou) (Registration No. 006317) (i) History and business KWI (Guangzhou) was incorporated in China under the laws of PRC on 9 May 2001 as a limited liability company under its present name. Due to a disagreement on business direction of KWI (Guangzhou) between the shareholders, KWI (Guangzhou) has ceased operations since 4 November 2005. Before it ceased operations, its principal activity was to develop technologies and facilities for environmental protection, to undertake purification engineering of sewerage and tap water, to assess the environmental influence of region and construction project and the advisory of environmental protection technology. Currently, KWI (Guangzhou) is pending liquidation and to be struck off. 92 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital As at the LPD, the registered capital of KWI (Guangzhou) is RMB1,000,000, of which RMB513,893 has been fully paid-in. KWI (Guangzhou) does not have an authorised share capital. KWI (Guangzhou) is not a share-issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the issued and paid-in registered capital of KWI (Guangzhou) for the past 3 years preceding the LPD. (iii) Shareholders As at the LPD, the shareholders of KWI (Guangzhou) and their shareholdings in KWI (Guangzhou) are as follows: Paid-in registered Name capital % (RMB) RWT 262,086 51.00 Guangzhou Zhongsui Environment Protection 205,557 40.00 Engineer Co Ltd Tan Soo Seng 46,250 9.00 (iv) Subsidiary and associate As at the LPD, KWI (Guangzhou) does not have any subsidiary or associate. 6.2.5.3 AnuRAK (Registration No. 0105548114726) (i) History and business AnuRAK was incorporated in Thailand under the laws of Thailand on 1 September 2005 as a limited company under its present name. AnuRAK is principally involved in the business of undertaking potable water, wastewater and reclaimed water treatment services for domestic and industrial use, and commenced its business on 29 September 2006. (ii) Share capital As at the LPD, the issued and paid-up share capital of AnuRAK is THB139,000,000, divided into 1,390,000 ordinary shares at the par value of THB1 00.00 each. AnuRAK does not have an authorised share capital. Details of the change to the issued and paid-up share capital of AnuRAK for the past 3 years preceding the LPD are as follows: Cumulative No. of  issued and  Date of  shares  paid-up  allotment  allotted  Par value  Consideration  share capital  (THB)  (THB)  24 August 2012  990,000  100.00  Cash  99,000,000  18 September  400,000  100.00  Cash  139,000,000  2013
6. INFORMATION ON OUR GROUP (cont’d) (iii) Shareholders As at the LPD, the shareholders of AnuRAK and their shareholdings in AnuRAK are as follows: No. of ordinary Name shares held % RWT 1,389,998 99.99 Nopadol Intralib 1 Khaisri Utaiwan 1 * Note: * Negligible. (iv) Subsidiary and associate As at the LPD, AnuRAK does not have any subsidiary or associate.
6.2.5.4 TZS (Company No. 768082-W) (i) History and business TZS was incorporated in Malaysia under the Act on 3 April 2007 as a private limited company under its present name. TZS is principally involved in the business of undertaking construction, structural, civil, engineering, electrical and mechanical works to potable water and wastewater treatment plant and commenced its business on 1 August 2007. (ii) Share capital The authorised share capital of TZS is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of TZS is RM2 comprising 2 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of TZS for the past 3 years preceding the LPD. (iii) Shareholder TZS is a wholly-owned sUbsidiary of RWT.
(iv) Subsidiary and associate As at the LPD, TZS does not have any subsidiary or associate.

6.2.6 Subsidiaries of RWHK 6.2.6.1 RWT (Shanghai) (Registration No. 310000400501419) (i) History and business RWT (Shanghai) was incorporated in China under the laws of PRC on 5 February 2007 as a limited liability company under its present name. 94 6. INFORMATION ON OUR GROUP (cont’d) RWT (Shanghai) is principally involved in the business of undertaking consultancy services on potable water, wastewater technologies and project management, and commenced its business on 27 December 2007.  (ii)  Share capital  The registered capital of RWT (Shanghai) is USD200,000, all of which has been fully paid-in. RWT (Shanghai) does not have an authorised share capital. RWT (Shanghai) is not a share-issuing company, and its paid-in registered capital represents its equity interests.  There has been no change in the paid-in registered (Shanghai) for the past 3 years preceding the LPD.  capital  of  RWT  (iii)  Shareholder  RWT (Shanghai) is a wholly-owned subsidiary of RWHK.  (iv)  Subsidiary and associate  As at the LPD, RWT (Shanghai) does not have any subsidiary or associate.  6.2.6.2  Ranhill (Nanchang) (Registration No. 3601005100009641)  (i)  History and business  Ranhill (Nanchang) was incorporated in China under the laws of PRC on 18 January 2007 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise.  Ranhill (Nanchang) is principally involved in the business of undertaking wastewater treatment services for Xiaolan Economic Development Zone, and commenced its business on 1 March 2009.  (ii)  Share capital  The registered capital of Ranhill (Nanchang) is USD12,875,000, all of which has been fully paid-in. Ranhill (Nanchang) does not have an authorised share capital. Ranhill (l\Janchang) is not a share-issuing company, and its paid-in registered capital represents its equity interests.  There has been no change in the issued and paid-up share capital of Ranhill (Nanchang) for the past 3 years preceding the LPD.  (iii)  Shareholder  Ranhill (Nanchang) is a wholly-owned subsidiary of RWHK.  (iv)  Subsidiary and associate  As at the associate.  LPD,  Ranhill  (Nanchang)  does  not  have  any  subsidiary  or  6.2.6.3  Ranhill (Hefei) (Registration No. 340100400003999)  (i)  History and business  Ranhill (Hefei) was incorporated in China under the laws of PRC on 30 July 2007 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise.
6. INFORIVIATION ON OUR GROUP (cont’d) Ranhill (Hefei) is principally involved in the business of undertaking wastewater treatment services for Hefei Chemical Industrial Park, and commenced its business on 1 April 2011. (ii) Share capital The registered capital of Ranhill (Hefei) is USD7,520,000, all of which has been fully paid-in. Ranhill (Hefei) does not have an authorised share capital. Ranhill (Hefei) is not a share-issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Ranhill (Hefei) for the past 3 years preceding the LPD. (iii) Shareholder Ranhill (Hefei) is a wholly-owned sUbsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Hefei) does not have any subsidiary or associate. 6.2.6.4 Ranhill (Xinxiang) (Registration No. 410700400000614) (i) History and business Ranhill (Xinxiang) was incorporated in China under the laws of PRC on 22 January 2008 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Xinxiang) is principally involved in the business of undertaking wastewater treatment services for Xinxiang Industrial Park and commenced its business on 1 April 2013. (ii) Share capital The registered capital of Ranhill (Xinxiang) is USD6,120,000, all of which has been fully paid-in. Ranhill (Xinxiang) does not have an authorised share capital. Ranhill (Xinxiang) is not a share-issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Ranhill (Xinxiang) for the past 3 years preceding the LPD. (iii) Shareholder Ranhill (Xinxiang) is a Wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Xinxiang) does not have any subsidiary or associate. 6.2.6.5 Ranhill (Yingkou) (Registration No. 210800400022039) (i) History and business Ranhill (Yingkou) was incorporated in China under the laws of PRC on 12 January 2009 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. 96 6. INFORMATION ON OUR GROUP (cont’d) Ranhill (Yingkou) will principally undertake wastewater treatment services for Yingkou Economic and “Technology Development. As at the LPD, Ranhill (Yingkou) has yet to commence its business. (ii) Share capital The registered capital of Ranhill (Yingkou) is USD5,732,000, all of which has been fully paid-in. As a company incorporated in China, Ranhill (Yingkou) does not have an authorised share capital. Ranhill (Yingkou) is not a share­issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Ranhill (Yingkou) for the past 3 years preceding the LPD. (iii) Shareholder Ranhill (Yingkou) is a wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Yingkou) does not have any subsidiary or associate. 6.2.6.6 Ranhillinternational Trade (Registration No. 1720882) (i) History and business Ranhill International Trade was incorporated in Hong Kong under the Companies Ordinance (Chapter 32) on 28 March 2012 as a private limited company under its present name. Ranhill International Trade will principally undertake investment holding activities and provision of consultancy, project management, O&M services relating to potable water treatment plants. As at the LPD, Ranhill International Trade has yet to commence its business. (ii) Share capital As at the LPD, the issued and paid-up share capital of Ranhill International Trade is HKD10,000 comprising 10,000 ordinary shares of HKD1.00 each. There has been no change in the issued and paid-up share capital of Ranhill International Trade since its incorporation. (iii) Shareholder As at the LPD, the shareholders of Ranhill International Trade and their shareholdings in Ranhillinternational Trade are as follows: Name % RWHK 5,100 51.00 Hubei International Trade Investment & 4,900 49.00 Development Co Ltd 97 6. INFORMATION ON OUR GROUP (cant’d) (iv)
(i)
(ii)

6.2.6.7 (iii) (iv)
(i)
(ii)

6.2.6.8 Subsidiary and associate As at the LPD, Ranhill International Trade does not have any subsidiary or associate. Ranhill Venture (Registration No. 1974243) History and business Ranhill Venture was incorporated in Hong Kong under the Companies Ordinance (Chapter 32) on 30 September 2013 as a private limited company under its present name. Ranhill Venture will principally undertake investment holding activities and provision of consultancy, project management, O&M services relating to wastewater treatment. As at the LPD, Ranhill Venture has yet to commence its business. Share capital As at the LPD, the issued and paid-up share capital of Ranhill Venture is HKD1 0,000 comprising 10,000 ordinary shares of HKD1 each. There has been no change in the issued and paid-up share capital of Ranhill Venture since its incorporation. Shareholder Ranhill Venture is a wholly-owned subsidiary of RWHK. Subsidiary and associate As at the LPD, Ranhill Venture does not have any subsidiary or associate. Ranhill (Fuzhou) (Registration No. 361000520004873) History and business Ranhill (Fuzhou) was incorporated in China under the laws of PRC on 23 September 2013 as a limited liability company under its present name, and
it is a wholly foreign-owned enterprise. Ranhill (Fuzhou) will principally undertake wastewater treatment services for Yihuang Industrial Park. As at LPD, Ranhill (Fuzhou) has yet to commence its business.
Share capital The registered capital of Ranhill (Fuzhou) is USD3,000,OOO, all of which has been fully paid-in. As a company incorporated in China, Ranhill (Fuzhou) does not have an authorised share capital. Ranhill (Fuzhou) is not a share­
issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Ranhill
(Fuzhou) since its incorporation date.
98 6. INFORMATION ON OUR GROUP (cont’d) (iii) Shareholder Ranhill (Fuzhou) is a wholly-owned sUbsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Fuzhou) does not have any sUbsidiary or associate.
6.2.6.9 Ranhill (Changfeng) (Registration No. 34010040002620) (i) History and business Ranhill (Changfeng) was incorporated in China under the laws of PRC on 10 October 2013 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Changfeng) will principally undertake wastewater treatment services for Xiatang Heavy Industrial Park. As at the LPD, Ranhill (Changfeng) has yet to commence its business. (ii) Share capital The registered capital of Ranhill (Changfeng) is USD1,680,000, all of which has been fully paid-in. As a company incorporated in China, Ranhill (Changfeng) does not have an authorised share capital. Ranhill (Changfeng) is not a share-issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Ranhill (Changfeng) since its incorporation date. (iii) Shareholder Ranhill (Changfeng) is a wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Changfeng) does not have any subsidiary or associate.
6.2.6.10 Ranhill (Wanzai) (Registration No. 360900520005667) (i) History and business Ranhill (Wanzai) was incorporated in China under the laws of PRC on 25 November 2013 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Wanzai) will principally undertake wastewater treatment services for Wanzai Industrial Park. As at the LPD, Ranhill (Wanzai) has yet to commence its business. (ii) Share capital The registered capital of Ranhill (Wanzai) is USD3,000,000, all of which has been fully paid-in. As a company incorporated in China, Ranhill (Wanzai) does not have an authorised share capital. Ranhill (Wanzai) is not a share­issuing company, and its paid-in registered capital represents its equity interests. 99 6. INFORMATION ON OUR GROUP (cant’d) There has been no change in the paid-in registered capital of Ranhill (Wanzai) since its incorporation date. (iii) Shareholder Ranhill (Wanzai) is a wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Wanzai) does not have any subsidiary or associate. 6.2.6.11 Ranhill (Qingtongxia) (Registration No. 640000400002228) (i) History and business Ranhill (Qingtongxia) was incorporated in China under the laws of PRC on 16 January 2014 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Qingtongxia) will principally undertake wastewater treatment services for Qingtongxia New Material Base Industrial Park. As at the LPD, Ranhill (Qingtongxia) has yet to conmmence its business. (ii) Share capital The registered capital of Ranhill (Qingtongxia) is RMB50,000,000, all of which has not been fully paid-in. As a company incorporated in China, Ranhill (Qingtongxia) does not have an authorised share capital. Ranhill (Qingtongxia) is not a share-issuing company, and its registered capital represents its equity interests once it has been paid-in. (iii) Shareholder Ranhill (Qingtongxia) is deemed to be a wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Qingtongxia) does not have any subsidiary or associate. 6.2.6.12 Ranhill (Fuxin) (Registration No. 21090040001244) (i) History and business Ranhill (Fuxin) was incorporated in China under the laws of PRC on 12 August 2015 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Fuxin) will principally undertake wasterwater treatments services for Fuxin Coal Chemical Industrial Base. As at the LPD, Ranhill (Fuxin) has yet to conmmence its business. (ii) Share capital The registered capital of Ranhill (Fuxin) is USD6,500,000, all of which has not been fUlly paid-in. As a company incorporated in China, Ranhill (Fuxin) does not have an authorised share capital. Ranhill (Fuxin) is not a share­6. INFORMATION ON OUR GROUP (cont’d) issuing company, and its registered capital represents its equity interests once it has been paid-in. (iii) Shareholder Ranhill (Fuxin) is deemed to be a wholly-owned subsidiary of RWHK. (iv) Subsidiary and associate As at the LPD, Ranhill (Fuxin) does not have any subsidiary or associate.
6.2.6.13 Ranhill (Chongren) (Registration No. 91361000MA35F01N39) (i) History and business Ranhill (Chongren) was incorporated in China under the laws of PRC on 29 September 2015 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Ranhill (Chongren) will principally undertake design, construction, and operation of wastewater treatment facilities. As at the LPD, Ranhill (Chongren) has yet to conmmence its business. (ii) Share capital The registered capital of Ranhill (Chongren) is USD8,000,000 where USD1 ,000,000 has been paid-in as at the LPD. As a company incorporated in China, Ranhill (Chongren) does not have an authorised share capital. Ranhill (Chongren) is not a share-issuing company, and its registered capital represents its equity interests once it has been paid-in. (iii) Shareholder Ranhill (Chongren) is a wholly-owned sUbsidiary of RWHK.
(iv) Subsidiary and associate As at the LPD, Ranhill (Chongren) does not have any subsidiary or associate. 6.2.7 Joint venture of RWHK PWL (Registration No. LL03802) (i) History and business PWL was incorporated in Federal Territory of Labuan, Malaysia on 25 June 2003 as a private limited company under its present name. PWL is principally involved in the business of investment holding, provision of consultancy services in water management and trading of water treatment equipment and commenced its business on 1 September 2006. 6. INFORMATION ON OUR GROUP (cont’d) (ii) Share capital The authorised share capital of PWL is USD13,000 compnslng 13,000 ordinary shares of USD1.00 each. The issued and paid-up share capital of PWL is USD1 00 comprising 100 ordinary shares of USD1.00 each. There has been no change in the issued and paid-up share capital of PWL for the past 3 years preceding the LPD. (iii) Shareholders As at the LPD, the shareholders of PWL and their shareholdings in PWL are as follows: Name % RWHK 37 37.00 YLI Holdings Berhad 37 37.00 PBA Holdings Berhad 26 26.00 (iv) Subsidiary and associate As at the LPD, the direct subsidiary of PWL is Yichun Pinang, details of which are set out in Section 6.2.8 of this Prospectus. As at the LPD, PWL does not have any associate. 6.2.8 Subsidiary of PWL Yichun Pinang (Registration No. 360900510000571) (i) History and business Yichun Pinang was incorporated in China under the laws of PRC on 25 July 2003 as a limited liability company under its present name, and it is a wholly foreign-owned enterprise. Yichun Pinang is principally involved in the business of undertaking water treatment, management and supply of treated water, and commenced its business on 1 September 2006. (ii) Share capital The registered capital of Yichun Pinang is RMB38,000,000, all of which has been fully paid-in. Yichun Pinang does not have an authorised share capital. Yichun Pinang is not a share-issuing company, and its paid-in registered capital represents its equity interests. There has been no change in the paid-in registered capital of Yichun Pinang for the past 3 years preceding the LPD. (iii) Shareholder Yichun Pinang is a wholly-owned sUbsidiary of PWL. (iv) Subsidiary and associate As at the LPD, Yichun Pinang does not have any subsidiary or associate. 102 7. BUSINESS OVERVIEW 7.1 Overview We are a Malaysian conglomerate with interests in two businesses: power and environment. In our power business, we provide power generation. In our environment business, we provide water supply services, operate water and wastewater treatment plants, and provide specialised services in the management and optimisation of water utility assets. We conduct our operations and provide our services primarily in Malaysia, and our international operations are centered in Asian markets such as China and Thailand. In our power business, we own and operate two 190 MW CCGT power plants in Sabah, Malaysia through our subsidiaries, RPI and RPII, on a BOO-and BOT-basis, respectively. We have entered into PPAs with Sabah Electricity, a sUbsidiary of TNB, providing for the sale of up to 380 MW of electricity generating capacity and electricity production for a 21-year period, commencing on 25 October 2008 with respect to RPI, and commencing on 22 April 2011 with respect to RPII. We provide O&M services to our RPI and RPII power plants through RPOM and RPOMII, respectively. In our environment business, we have been granted an exclusive licence (on a 3-year term, renewable every three years under the terms stipulated in the Water Services Industry Act and the Water Services Industry (Licensing) Regulations 2007, which includes compliance by SAJH with the applicable KPls) by the Minister of Energy, Green Technology and Water, Malaysia to provide source-to-tap water supply services to end-customers in the entire State of Johor, the second most populous state in Malaysia, with an estimated population of 3.5 million people as at 2014 (Source: Deparlment of Statistics, Malaysia). We have been providing these services since March 2000, as at 30 November 2015, we had 1,081,399 customers in Johor, of which 935,949 were residential customers, 143,026 were trade and industrial customers and 2,424 were institutional customers, such as government office buildings, army camps, government hospitals, prison complexes and statutory governmental authorities. Outside of Malaysia, we have 15 water and wastewater concessions, on a BOT, BTO or TOT basis, in relation to water treatment plants and wastewater treatment plants, with an aggregate treatment capacity of 362.0 MLD. In addition, through our joint venture, Yichun Pinang, we also operate a potable water treatment plant in China with a treatment capacity of 50.0 MLD. The following table sets out selected data in respect of the principal assets owned/operated by our subsidiaries in our power business, in each case, as at 30 November 2015. Expiration of power Total Description of asset purchase Total generating owned/operated Location Type agreement capacit{) capacity Power plants RPI power plant Sabah, CCGT 2029 190MW 190 IVIW Malaysia RPII power plant Sabah, CCGT 2032 190MW 190MW Malaysia Note: Total capacity is the contractual capacity in MW for electric power generation. 7. BUSINESS OVERVIEW (cont’d) The following table sets out selected data in respect of the principal assets owned/operated by our subsidiaries and joint venture in our environment business, in each case, as at 30 November 2015.  Description of asset owned/operated  Location  Concession type  Expiration of licence/ concession/ agreement  Total capacity(1)  Generatin~ Capacity(  Water related assets  Water supply services  Johor, Malaysia  Potable water/ exclusive license  2017  1,986.4 MLD(3)  1,626.0 MLD  Xiaolan wastewater treatment plant (Phase 1)(4)  Xiaolan, Jiangxi Province, China  Wastewater/BOT  2038  30.0 MLD  20.0 MLD  Xiaolan wastewater treatment plant (Phase 11)(4)  Xiaolan, Jiangxi Province, China  Wastewater/BOT  2042  50.0 MLD  47.6 MLD  Xinxiang wastewater treatment plant  Xinxiang, Henan Province, China  WastewaterlTOT  2041  50.0 MLD  41.8 MLD  Yichun water treatment plant  Yichun City, Jiangxi PrOVince, China  Potable water/BOT  2035  50.0 MLD  53.4 MLD  Yingkou wastewater treatment and reclamation plant  Yingkou, Liaoning Province, China  Wastewater/BOT  2046  30.0 MLD  Under construction; expected to commence operation in first quarter 2016  Reclaim water/BOT  (5)  30.0 MLD  Under construction; expected to commence operation in first quarter 2016  Hefei wastewater treatment plant  Hefei, Anhui Province, China  Wastewater/BOT  2036  30.0 MLD  Equivalent to 23:1 MLD wastewater(6)  Changfeng wastewater treatment plant  Hefei, Anhui Province, China  Wastewater/BOT  2043  20.0 MLD  Under construction; expected to commence operation in fourth quarter 2016  104
7. BUSINESS OVERVIEW (cant’d) Description of asset owned/operated  Location  Concession type  Expiration of licence/ concession/ agreement  Total capacity(1)  Generatin~ Capacity!  Yihuang wastewater treatment plant  Fuzhou, Jiangxi Province, China  Wastewater/BOT  2045  5.0 MLD  Under construction; expected to commence operation in first quarter 2016  Wanzai wastewater treatment plant  Wanzai, Jiangxi Province, China  Wastewater/BOT  2044  5.0 MLD  Construction completed; expected to commence operation in first quarter 2016  Chongren wastewater treatment plant  Chongren, Jiangxi Province, China  Wastewater/BOT  2046  10.01VILD  Under construction; expected to commence operation in second quarter 2017  Amata Nakorn concession(?)  Amata Nakorn Industrial Estate, Chonburi, Thailand (“Amata Nakorn”)  Wastewater/BOT Potable water/BOT Reclaim water/BOT  2028 2028 2033  24.0 MLD 10.5 MLD 10.0 MLD  19.0 MLD 7.9 MLD 9.6 MLD  Amata City potable water treatment plant(?)  Amata City  Potable water/BOT  2032  15.0 MLD  9.0 MLD  Amata City wastewater treatment plant(?)  Amata City  Wastewater/BOT  2043  10.0 MLD  5.0 MLD  Asian Institute of Technology  Pathumth ani Province, Thailand  Wastewater/BOT  2020  1.5 MLD  1.3 MLD  Amata Nakorn concession(?)  Amata Nakorn  Potable water/BTO  2018  10.5 MLD  6.4 MLD  Amata City concession(?)  Amata City Industrial Estate, Rayong, Thailand (“Amata City”)  Wastewater/BTO Potable water/BTO  2017 2017  10.0 MLD 10.5 IV1LD  8.4 MLD 7.61\11LD
7. BUSINESS OVERVIEW (cont’d) Notes: (1) Total capacity is the contractual capacity in MLD for water production, water treatment, wastewater treatment or water reclamation, as applicable.
(2) Generating capacity is computed based on the past six months average volume of water in MLD produced, treated or reclaimed, as applicable, during the period from 1 June 2015 to 30 November 2015.
(3) Basedonthedesigncapacity ofallthewatertreatmentplants inthe State ofJohor.
(4) The Xiaolan wastewater treatment plants Phase I and Phase /I are located next to each other on Jinsha Road 1, Xiaolan Economy and Development Zone, Nanchang, Jiangxi Province, China. The Xiaolan wastewater treatment plant Phase I commenced its business in 2009 at a wastewater treatment capacity of 30.0 MLD. However, due to the increase in demand for wastewater treatment capacity in the Xiaolan Industrial Park, Ranhill (Nanchang) subsequently entered into another concession agreement with the local authority that resulted in the increase of its total wastewater treatment capacity to 80.0 MLD.
(5) Yingkou’s 30.0 MLD reclamation plant is operated pursuant to an agreement with a customer within the industrial park. The agreement does not have a specified term or duration. For avoidance of doubt, it is not operated under the same concession awarded to Yingkou’s 30.0 MLD wastewater treatment plant.
(6) Currently, the plant is treating leachate waste.
(7) In summary, there are two potable water treatment plants, one wastewater treatment plant and one reclaim water treatment plant located at Amata Nakorn whilst there are two potable treatment plants and two wastewater treatment plant located at Amata City. Each of these waterlwastewaterlreclaim water plants are being operated on a stand-alone basis within Amata City and/or Amata Nakorn.

We also provide EPC and consultancy services to clients in relation to various water-related projects, as well as specialised services in the management and optimisation of water utility assets. The table below sets forth our revenue amounts by each of our businesses and as a percentage of total revenue for the periods indicated. The table below excludes the contributions from our environment business overseas because those businesses are held through our joint venture, being RWT (Cayman), in which we own a 52.1 % equity interest, and are reflected in our share of profit of a joint venture using the equity method of accounting. Year ended 31 Year ended 31 Year ended 31 Business December December December 2012 2013 2014 (RM) (%) (RM) (%) (RM) (%)——=-,,-.:…. –,——=—–‘­(in millions, except percentages) Power Environment Total  355.7 803.2 1,158.9 30.7 69.3 100.0 331.6 867.5 1,199.1  27.7 72.3 100.0  360.8 933.5 1,294.3  27.9 72.1 100.0  Business  Six months ended 30 June
2014 2015 (RM) (%) (RM) (%)——–::—-‘-­(in millions, except percentages) Power  190.0  29.4  142.8  22.7  Environment  455.4  70.6  485.5  77.3  Total  645.4  100.0  628.3  100.0
Our PAT was RM80.5 million for the six months ended 30 June 2014 and RM58.8 million for the six months ended 30 June 2015. Our PAT was RM160.4 million for the year ended 31 December 2012, RM131.5 million for the year ended 31 December 2013 and RM134.4 million 7, BUSINESS OVERVIEW (cont’d) for the year ended 31 December 2014. As at 30 June 2015, our total assets were RM3,529.0 million and our shareholders’ funds were RM822.2 million. 7,2 Competitive strengths We believe that we are in a position to deliver growth as a result of the following competitive strengths: 7,2,1 Exclusive water operator in Johor and one of the largest IPPs in Sabah with strong operational capabilities and proven track record Environment business We hold an exclusive licence from the Minister of Energy, Green Technology and Water, Malaysia to provide source-to-tap water supply services to end-customers in the entire State of Johor, the second most populous state in Malaysia. Our licence covers the complete cycle of potable water supply services, from sourcing of raw water, treatment and distribution of treated water to consumers, including treated water sourced from third parties, management and maintenance of the water supply system to a full range of customer services including billing and collection services. Our “asset-light” business model allows us to focus on continuous improvement in operational efficiencies. As at 30 November 2015, the water supply system in the State of Johor, which we operate, has an aggregate treatment design capacity of 1,986.4 MLD and produced 1,571.9 MLD in the month of November 2015. It also includes a distribution network of 21,229 km of pipelines (including 163 km of raw water mains, 3,162 km of distribution mains and 17,904 km of reticulation mains (the pipes connecting our distribution mains to end-customers)), as well as 636 active storage and service reservoirs as at 30 November 2015. Our operational capability is reflected in us meeting the KPls as agreed and monitored by SPAN, including full water supply coverage in urban areas in the State of Johor as well as compliance with the treated water quality targets as agreed with SPAN. We have also reduced state-wide NRW from above 40.0% in 1999 (being the year the previous SAJH concession agreement was entered into) to 25.8% as at 30 November 2015. In order to maintain the quality of treated water according to the Standard Drinking Water Guidelines, we have established 850 water sampling points in the State of Johor, as well as a programme to clean 636 storage and service reservoirs in the state. We also operate water concession assets on a BOT, BTO and TOT basis in China (eight wastewater treatment plants with capacities ranging from 5.0 MLD to 80.0 MLD and a 30.0 MLD reclamation plant) and in Thailand (four potable water treatment plants with capacities ranging from 10.5 MLD to 15.0 MLD, four wastewater treatment plants with capacities ranging from 1.5 IVILD to 24.0 MLD and a 10.0 MLD reclamation plant). In addition, through our joint venture, Yichun Pinang, we also operate a potable water treatment plant in Yichun City, China with a treatment capacity of 50.0 MLD. Our operational capability in China and Thailand is reflected in our fulfilment of the requirements and standards agreed with our customers, including, among others, full compliance with the agreed treated water quality targets. 7. BUSINESS OVERVIEW (cant’d) We offer cost-effective solutions through our modular “Fit-to-Need” system. This design innovation enables our customers to increase the capacity of and customise their water treatment plants to cater to their needs as and when needed. Power business Through our 60%-owned subsidiary RPI and 80%-owned subsidiary RPII, we operate and maintain two 190 MW CCGT power plants in the Kota Kinabalu Industrial Park in Sabah, Malaysia. Frost & Sullivan estimates this aggregate 380 MW capacity represents 37.4% of the combined licensed capacity (excluding renewables) of all IPPs in Sabah as of November 2015, making us one of the largest IPPs in Sabah as of 30 November 2015. By leveraging on our engineering expertise, we increased the efficiency of the RPI power plant by converting its mode of operation from open-cycle to combined-cycle, thereby expanding the power generating capacity of the RPI power plant from 120 MW to 190 MW. As a result of this successful conversion that was completed in October 2008, the concession for the RPI power plant, which was expiring in August 2019, was extended to October 2029. 7.2.2 Proven record in securing contracts/concessions Through our subsidiaries and joint venture, we have a proven track record in securing long-term contracts in Malaysia, China and Thailand. Refer to Section 7.1 of this Prospectus for details on the principal water related assets owned and/or operated by us. Our international success in obtaining contracts stems from our determination to seek and develop working relationships with local authorities looking to explore opportunities to improve their water and wastewater infrastructures. Further, we have acquired numerous EPC and consultancy services contracts relating to various water­related projects with numerous state governments in Malaysia, namely Johor, Melaka, Kedah, Terengganu, Kelantan, Pahang, Perak and the Department of Sewerage Services under the Ministry of Energy, Green Technology and Water, Malaysia. 7.2.3 Presence in high growth markets and well-positioned to capitalise on China’s water and wastewater business Our success in the water and wastewater treatment business in Malaysia has enabled us to expand our environment business overseas through RWT (Cayman) in countries such as China and Thailand, which we believe are highly attractive growth markets. Given the growth prospects of the Chinese economy, where treated water demand is projected to reach 2,280,274 MLD by 2050, according to Frost & Sullivan, and the anticipated scarcity in water supply, we expect opportunities for RWT (Cayman) to offer its services and solutions to potential customers to achieve a sustainable water supply and combat water resources pollution. In addition, our experienced team of engineers in Malaysia has developed competitive and cost-effective applications which have been used to increase the efficiency of treatment plants. Our water treatment plants are termed as compact treatment plants which provide several advantages as opposed to other treatment plants that are termed as conventional treatment plants. One of the advantages is the throughput that is more than double as compared to conventional treatment plants, resulting in up to 50% smaller plant footprint required for our treatment plants as compared to conventional water treatment plants with equal treatment capacity. The smaller land requirement and investment in civil work requirements for our treatment plants results in lower capital expenditures. 7. BUSINESS OVERVIEW (cont’d) In addition, our treatment plants also offer other edges including being modular which allows our treatment plants to be built according to the desired capacity. The modular system is flexible enough to allow further upgrades in tandem with future rising demand. Compact treatment plants utilise greater use of pre-fabricated components that are fabricated off site which result in shorter construction period. This is due to works being concurrently carried out at the site and at the fabrication facilities off the site. In China, we have harnessed our in-house solutions to focus on a niche market for industrial water treatment, which we believe can yield higher returns. Moving forward, the track record of SA~IH will be a key reference for water concessions in China. We believe this will also create opportunities for us to provide NRW management and project management services in China. We participate in the water, wastewater and reclamation water treatment projects in China through BOT and TOT projects. As at LPD, we have expanded our reach in China through our interests in nine BaTs and one TOT with a total aggregate capacity of 310.0 I\IILD, of which 50.0 MLD is operated through our joint venture. Our efforts and success have been recognised by the local authority of Nanchang in respect of the Xiaolan Economic Development Zone in Nanchang, Jiangxi Province, China where we currently operate a 80.0 MLD wastewater plant under two separate concessions. This was demonstrated through multiple awards for environmental conservation by the Jiangxi Provincial Government in 2009 and by the Nanchang City Government from 2008 to 2011, which recognises the Xiaolan Economic Development Zone as one of the industrial parks in the Jiangxi Province which complies with the authority’s standard of treated wastewater. Through the application of our in-house solutions and engineering expertise, we are able to consistently meet the standards of treated wastewater as set by the local authority of China notwithstanding that it has been revised numerous times. We also have interests in four BOT and two BTO concessions with total treatment capacity of 102.0 MLD in Thailand where we provide water treatment, wastewater treatment and reclamation water treatment services to two ind ustrial parks and a university. 7.2.4 Stable cash flows from long-term contracts and concessions Our Group’s cash flows are underpinned by our environment business, both locally and outside Malaysia, as well as the power business which is based on long-term contracts and/or licences. SAJH’s licence for the provision of treated water in the State of Johor is renewable every three years under the terms stipulated in the Water Services Industry Act and the Water Services Industry (Licensing) Regulations 2007, which includes compliance by SAJH with the applicable KPls. SPAN has renewed SAJH’s license for the third operating period effective from 1 January 2015 to 31 December 2017. SA~’H’s consistent performance over the past 15 years has demonstrated its ability to continuously deliver a high standard of service to its end-customers. In addition, our operations in China are conducted on a BOT and TOT basis, with tenures ranging from 25 to 30 years, being the longest concession tenure allowable in China, while the tenures of our concession for the water and wastewater treatment plants in Thailand are between eight to 30 years. 7. BUSINESS OVERVIEW (cont’d) In respect of our power business, the respective PPAs with Sabah Electricity are each for a 21-year period, commencing 25 October 2008 and 22 April 2011 for RPI and RPII, respectively. With stable cash flows, we expect to be able to meet all our financial and debt obligations. In addition, we also believe that we are well-positioned to fund our capital expenditures and investments to undertake future expansion opportunities. 7.2.5 Strength and depth in leadership and talent With our experienced management team leading our Group, we have been able to grow and expand our environment business. Our Group is led and managed by Tan Sri Hamdan, who has over 30 years of relevant industry experience, and Faizal Othman, who has over 20 years of relevant industry experience. Our key management comprises talents with both local and international experience, which underlines our capabilities across multiple businesses. Our environment business is headed by Ahmad Zahdi Jamil (who has over 25 years of industry experience) and Koh Boon Sian (who has over 15 years of industry experience), and our power business is headed by Norlian Abd Rahim (who has over 25 years of industry experience). We will continue to tap on their extensive knowledge network and leverage on their expertise to drive our Group’s business growth. We also believe that our multicultural organisation is capable of attracting and pooling talents worldwide to operate our multiple businesses across multiple countries. As at the LPO, our Group’s workforce comprises 3,113 employees, of which 142 and 2,971 employees are employed for our power and environment businesses, respectively. We also focus on talent retention and succession planning to ensure that we have suitable and competent staff to handle our projects in order to meet and, where possible, exceed our customers’ expectations and improve operational efficiency. 7.3 Business strategies and future plans Our business strategies and future plans are as follows: 7.3.1 Power business We aim to secure power generation projects through unsolicited bids, which generally give us higher returns. Unsolicited bid requisitions allows us to conduct direct negotiation with the counterparty, and in view of this, returns for these projects are typically higher as compared to projects that are secured through open tender basis. We will also seek to expand our power business with emphasis on power plants with generating capacities not exceeding 1,000 MW. We intend to explore power business opportunities in Asia and to continue to optimise the operations of RPI and RPII. 7.3.2 Environment business (i) Expanding our regional operations We intend to capitalise on our 15 years of experience in the water supply business in the State of Johor and in fact, have expanded into China since 2003. We believe that China, with its population of approximately 1.4 billion in 2014 and GOP growth at a compounded annual growth rate of 12.2%, from 2008 to 2014, according to Frost & Sullivan, provides an extensive platform for us to expand our water treatment operations. Our current focus is principally on cities and provinces with potential for accelerated industrial 7. BUSINESS OVERVIEW (cant’d) growth as reflected by their GOP growth rates such as those in the Jiangxi Province, Anhui Province, Liaoning Province and Henan Province. As our current presence in China mainly involves wastewater treatment projects for industrial use, our strategy is to leverage on such experience when bidding for new contracts. In addition, we expect to seek opportunities for treatment plants to recycle water for factory processes, cleaning usage or other non-drinking purposes. We also expect to carry out build and transfer projects, wtlich potentially enables us to tap into reclaimed water and wastewater projects. In conjunction with such projects, we intend to promote reclaimed water supply to factories for non-potable usage and we expect that we witl be competing with other water providers to provide our services at lower rates in areas where water supply is scarce. In addition, capitalising on our expertise and experience with source-to-tap services in the State of Johor, we also intend to pursue opportunities to secure concessions in China structured in the same manner. With our extensive engineering experience in deploying such projects as well as our business approach of being involved in the project prior to and during inception to introduce our water treatment process, and deployment of innovative systems such as our modular “Fit-to-Need” system which is customised to suit our clients’ requirements, we believe we are well­positioned to secure additional contracts in our target markets. Over the next three years, we intend to increase our business presence in the China market by increasing our water treatment capacity to up to 1,000.0 MLO. The expansion in the China water business is expected to be funded through the proceeds from the Public Issue, internally generated funds and bank borrowings. We will continue to invest with a long-term view of establishing new treatment plants in provinces such as those located in Western China where water is scarce as well as for industrial parks and emerging cities which have low wastewater treatment coverage and where local governments have allocated sufficient budgets for environmental projects. In the course of our expansion, we will also look into the provision of leachate treatment to treat toxic wastewater such that it meets environmental standards before it is discharged into the designated channel, with our target customers being the industrial parks. We are exploring strategic partnerships with investors to jointly invest in the China water business, which may include divestment of our holdings in our China water business to such strategic partners. We believe such strategic partnerships will facilitate the procurement of water concessions in China by prOViding broader access to potential clients and target markets. We will also leverage on SAJH’s experience to secure water concessions in our target markets. We also intend to capitalise on our experience in Thailand from the Amata projects, which encompasses the full range of water treatment works, and explore opportunities in Thailand with private industrial parks and the public sector for projects ranging from potable water to reclaimed water solutions. By leveraging on our existing expertise and technology, we intend to explore concession opportunities in China and Thailand. 7. BUSINESS OVERVIEW (cont’d) (ii) Commercialising our NRW management system Our I\IRW reduction programme is a very important programme that we have implemented in the State of Johor since the inception of SAJH. This programme aims to reduce the NRW level in Malaysia, to develop standardised methodologies for long-term I\IRW success and to enhance skills and knowhow in NRW management. According to Frost & Sullivan, despite having the second longest water pipeline network in Malaysia, Johor achieved the lowest NRW per kilometre of water pipe length at 0.020 MLD per kilometre in 2014. In Malaysia as well as other countries, NRW reduction has become a key focus for cost optimisation and operational efficiency. The loss of water through leakages and faulty delivery systems is a burgeoning issue for all water companies, and we believe we are well-positioned to offer our expertise in this area. We are capitalising on our experience and knowledge gained in NRW reduction in the State of Johor to leverage and expand the NRW management system in Malaysia and the region. We have developed in-house a web-based AquaSMART system to monitor water leakages in a more efficient manner, Whereby AquaSMART is able to detect leakages within the delivery system within one to two hours, thus improving our efficiency in managing and/or reducing NRW. AquaSMART has been successfully implemented in the states of Johor and Melaka, and we are currently in the process of applying for a patent with the Intellectual Property Corporation of Malaysia for the system, thereby enhancing our ability to commercialise it. Since the execution of our Johor concession agreement in 1999 and the commencement of our water supply concession in Johor in 2000, we have reduced the state-wide NRW rate from above 40% in 1999 to 25.8% as at 30 November 2015. We have also performed services related to NRW reduction, inclUding DMA, GIS and network modelling and network management, in the states of Kedah, Melaka and Terengganu, which reduced the NRW rate in Sungai Petani, Kedah from 50% in 2008 to 21% in 2010, in Melaka from 35% in December 2007 to 21.6% in May 2014, and in Hulu Terengganu and Dungun, Terengganu from 50% in October 2012 to 15% in January 2014. We have also worked on World Bank-funded NRW reduction projects in Surabaya, Indonesia. We are one of the leading companies in Malaysia in the NRW management and reduction programme. By capitalising on our experience in I\IRW reduction projects in the States of Johor, Melaka, Terengganu and Kedah, as well as our ongoing projects in the States of Kelantan and Pahang, we intend to deploy the AquaSMART system throughout Malaysia and regionally. We are currently working closely with the respective state water operators to pursue NRW reduction projects. Our I\lRW reduction programme is in accord with the target set by SPAN and the recently announced 11 th Malaysia Plan (the “11 th Malaysia Plan”) to reduce NRW to 25% by 2020. Under the 11 th Malaysia Plan, the national NRW level is targeted to be reduced from 36.6% in 2013 to 25.0% in 2020 with the implementation of a holistic NRW reduction programme. As one of the leading companies in Malaysia in the NRW management and reduction programme, we believe we are well-positioned to pursue opportunities under this Government initiative to reduce the national NRW level. The O&M element of our I\IRW management system is important as NRW services need to be continuously performed after initial reduction targets have been achieved in order to maintain and also to set new reduction targets. These present opportunities for us to continue to provide long-term O&M services to our clients. 112 7. BUSINESS OVERVIEW (cant’d) (iii) Capitalising on Government initiatives in the environment business The Government has announced the implementation of infrastructure improvements for water supply treatment, wastewater treatment, sewer rehabilitation and other water-related initiatives. The Government also intends to integrate sewerage services with water supply services under the framework of the Water Services Industry Act. We believe our experience in the water business well-positions us to benefit from opportunities arising from these Government initiatives. The 11 th Malaysia Plan (2016-2020) includes a new tariff setting mechanism for sewerage services and an integrated water supply and sewerage services billing system. Upon implementation of the new tariff mechanism and the integrated billing system, we intend to pursue opportunities to integrate sewerage services with our water supply services, particularly in Johor Bahru City and Pasir Gudang, which are currently being managed by their respective city councils. In addition, the implementation of the new tariff setting mechanism combined with the integrated billing system, which the Government expects will increase collection rates by 20% to 30%, is expected to result in the improved financial sustainability of the sewerage service operators. We believe this improved financial sustainability will enable sewerage service operators to carry out scheduled maintenance, as well as encourage the refurbishment of under-performing sewage treatment plants. We believe these will create opportunities, which we intend to actively pursue, and enable us to leverage our capabilities and knowhow gained from years of experience in the design, construction, operation and maintenance of wastewater treatment facilities in Malaysia and overseas. 7.4 History and milestones Our Group’s venture into the power and environment business stems largely from the history of Ranhill Bersekutu Sdn Bhd (“RBSB”), which was initially established by Rankine & Hill under the name of Ranhill Bersekutu Partnership to provide a full range of mechanical and electrical engineering design services. Subsequently, in 1981, RBSB was incorporated as a private limited company in Malaysia under its current name. Building on its engineering strength across various disciplines including water supply system, Tan Sri Hamdan, then the Chief Executive Officer of RBSB, subsequently ventured into the power business through RGSB and into the environment business through RUSB. All of the companies within our Group were part of the RB Group prior to the Internal Reorganisation and part of the RERB Group after the completion of the Internal Reorganisation II and prior to the Pre-Offering Reorganisation. Refer to Section 6.1 of this Prospectus for further details on the Internal Reorganisation, Internal Reorganisation II and the Pre-Offering Reorganisation. 7.4.1 Power We conduct our power business through RPI, RPII, RPOM, RPOMII and RPS, which were all part of RGSB prior to the Pre-Offering Reorganisation. Refer to Section 6.1.4 of this Prospectus for further details on the Pre-Offering Reorganisation. RGSB was incorporated in Malaysia under the Act in June 1972 as a private limited company under the name of EPE Power Corporation Berhad. Through its 60%­owned subsidiary RPI, RGSB operated a 120 MW electricity capacity open-cycle gas turbine power plant at Teluk Salut, Kota Kinabalu, Sabah pursuant to a power purchase agreement dated February 1997 entered into with Lembaga Letrik Sabah (now known as Sabah Electricity). The plant commenced initial operations in August 1998 and its COD as a 120 MW open-cycle power plant was February 1999. On 25 February 2004, RB became a shareholder of RGSB pursuant to the disposal of 7. BUSINESS OVERVIEW (cant’d) Powertron Resources Sdn Bhd to RGSB. RPI’s power plant was subsequently upgraded to a total generating capacity of 190 MW using a CCGT configuration, and it commenced full combined-cycle operations on 25 October 2008. On 24 January 2006, the Economic Planning Unit of the Prime Minister’s Department awarded Ranhill Tuaran Sdn Bhd (now known as RPII), an 80%-owned subsidiary of RGSB, with a concession on a BOT basis for a 190 MW CCGT power plant in Sabah. The RPII power plant’s initial COD in a single gas turbine open-cycle 65 MW configuration was 6 March 2010 and its COD as a two gas turbine 130 MW open­cycle facility was 9 July 2010. The RPII power plant commenced full 190 MW combined-cycle operations on 22 April 2011. We conduct routine maintenance on both the RPI and RPII power plants through our subsidiaries RPOM and RPOMII. We own a 60% equity interest in RPOM, which provides O&M services to the RPI power plant, and we own an 80% equity interest in RPOMII, which provides O&M services to the RPII power plant. The remaining equity interests in RPI, RPII, RPOM and RPOIVIII are owned by SECSB. We also own 100% equity interest in RPS. RPS will provide administrative support services to our subsidiaries in the power business. 7.4.2 Environment We conduct our environment business through SAJH, RWSB and RWT (Cayman), which were all part of RUSB prior to the Pre-Offering Reorganisation. Refer to Section 6.1.4 of this Prospectus for further details on the Pre-Offering Reorganisation. RUSB was incorporated in Malaysia under the Act in June 2000 as a pUblic limited company under the name of Insan Utiliti Berhad and assumed the name of Ranhill Utilities Berhad in January 2002. The incorporation of Ranhill Utilities Berhad was primarily to facilitate SAJH’s listing on the Main Board of Kuala Lumpur Stock Exchange (now known as Main Market of Bursa Securities). SAIH was formed to carry out the water supply services in Johor for 30 years commencing from 1 March 2000. Pursuant to its delisting on 28 August 2008, Ranhill Utilities Berhad subsequently assumed the name of RUSB on 2 July 2009. Pursuant to a vesting order made in 1994 by the Menteri Besar Johor under the Water Supply Enactment 1993, all assets, rights, liabilities and staff of the State Government of Johor with respect to the water supply services were transferred to and vested in SAJSB, a company owned by the State Government of Johor. The water supply services business in Johor was subsequently privatised to SAJH as part of the State Government of Johor’s effort to further improve the operation and service level of water supply in Johor. In April 1999, SAJH, together with LOSB, entered into a concession agreement with the State Government of Johor and SAJSB to provide water supply services to the entire State of Johor. For further information on the restructuring of the water services industry, refer to Section 7.5.2(i)(b) of this Prospectus. On 1 September 2009, SAJH migrated to the licensing regime under the Water Services Industry Act, and the concession agreement was terminated upon SAJH’s migration to the new licensing regime. In February 2005, RUSB acquired a 70% equity stake in RWT, which enabled the company to expand into wastewater and sewerage technology business, particularly in the areas of potable water treatment, wastewater and sewerage treatment as well 7. BUSINESS OVERVIEW (cont’d) as process water systems. At the point of acquisition, RWT had a track record of completing water and wastewater treatment projects throughout Asia, notably Malaysia, Thailand and China. SUbsequently in 2008, RUSS formed RWT (Cayman) through a joint-venture arrangement with Robinson, a unit of Aqua Resources Fund Limited, through which various water concessions in China previously held under RUSS Group were sUbsequently held under RWT (Cayman) pursuant to an internal reorganisation. Refer to Section 7.5.2(ii) of this Prospectus for further details on these concessions. In order to enhance our position as well as reap higher benefits from our potential ventures in China, in June 2014, we entered into a conditional sale and purchase agreement with RUSS (in conjunction with the Acquisition of RUSS Companies as described in Section 6.1.4 of this Prospectus) for the post-Offering acquisition of the remaining 47.9% equity interest in RWT (Cayman) that we do not currently own. This acquisition will allow us to hold 100% equity interest in RWT (Cayman) after the completion of the Offering. Refer to Section 6.1.5 of this Prospectus for further details on the Proposed Remaining RWT (Cayman) Acquisition. In February 2005, RUSS established RWSS to offer specialised operational support and services to water companies in the management and optimisation of water utility assets. Certain key milestones for our Group are as follows: Year Key milestones 1998 RPI’s 120 MW open-cycle power plant commenced initial operations in its original open-cycle configuration. 1999 SA.IH entered into a concession agreement with LOSB, the State Government of Johor and SAJSB to provide water supply services to the entire State of Johor 2005 RWT entered into BOT arrangements for a 10.5 MLD potable water treatment plant, a 9.6 MLD wastewater treatment plant and a 8.0 MLD reclamation plant, each covering a period of 20 years in Amata Nakorn Industrial Park in Thailand and a 50.0 IVILD potable water treatment plant for 29 years in Yichun City, Jiangxi Province, China RWSB was established in 2005 to commence provision of NRW management services 2008 The capacity of RPI power plant increased to 190 MW pursuant to the commencement of its combined-cycle operations 2009 SA.IH terminated its concession agreement with the State Government of Johor and migrated to the licensing regime under the Water Services Industry Act 2011 RPIl’s 190 MW CCGT power plant commenced operations, making RGSB the largest IPP in Sabah in terms of total installed capacity 2012 RUSB Group entered into several MOUs and/or investment agreements to carry out investment evaluation and feasibility studies on several water and wastewater treatment projects in China 2013 RWT (Cayman) Group entered into BOT arrangements for a 20.0 MLD wastewater treatment plant in Chang Feng Xia Tang Heavy Industrial Park, Anhui Province, China for 30 years, a 5.0 MLD wastewater treatment plant in Yihuang Industrial Park, Jiangxi Province, China for 29 years and a 5.0 MLD wastewater treatment plant in Wanzai Industrial Park, Jiangxi Province, China for 29 years and a 10.0 MLD wastewater treatment plant in Amata City Industrial Park, Thailand for 30 years 2015 RWT (Cayman) Group entered into a BOT arrangement for a 10.0 MLD wastewater treatment plant in Chongren Industrial Park, Jiangxi Province, China for 29 years 115 7. BUSINESS OVERVIEW (cont’d) 7.5 Products and services 7.5.1 Power business (i) Background, generation capacity and O&M In our power business, through our subsidiaries, RPI and RPII, we operate and maintain two 190 MW CCGT power plants in Kota Kinabalu Industrial Park in Sabah. Frost & Sullivan estimates that the aggregate 380 MW capacity of the RPI and RPII power plants represents approximately 37.4% of the combined licensed capacity (excluding renewables) of all the IPPs in Sabah as of November 2015, making us one of the largest IPPs in Sabah as of 30 November 2015. RPI was initially formed to construct a 120 MW open-cycle power plant. The RPI power plant commenced initial operations in August 1998 and its COD as a 120 MW open-cycle power plant was February 1999. The RPI power plant was subsequently converted to its current 190 MW combined-cycle configuration, and the COD of the power plant in this configuration was 25 October 2008. On the other hand, the RPII power plant’s initial COD in a single gas turbine open-cycle 65 MW configuration was 6 March 2010, its COD as a two gas turbine 130 MW open-cycle facility was 9 July 2010 and its COD as a 190 MW combined-cycle configuration was 22 April 2011. The RPI power plant comprises four 30 MW gas turbine generators, four vertical heat-recovery steam generators and two 35 MW steam generators. The gas turbines use the Frame 6B technology model supplied by General Electric Company, and the heat recovery steam generators and steam turbines were manufactured by Mitsubishi Heavy Industries Ltd. The RPI power plant uses a 2-block configuration, with each block consisting of two 30 MW gas turbines, two heat-recovery steam generators and a 35 MW steam turbine. The RPII power plant comprises two 65 MW gas turbine generators, two horizontal heat-recovery steam generators and a 60 MW steam generator. The gas turbine generators use the Frame 6FA technology model supplied by General Electric Company, the heat recovery steam generators were manufactured by Hangzhou Boilers Company and the steam generator was manufactured by the Harbin Turbine Company Limited (China). The RPII power plant uses a single block configuration. We conduct routine maintenance on both the RPI and RPII power plants through our own subsidiaries. We own a 60% equity interest in RPI and RPOM, respectively, which provides O&M services to the RPI power plant, and we own 80% equity interest in RPII and in RPOMII, which provides O&M services to the RPII power plant. The remaining equity interests in RPI, RPII, RPOM and RPOMII are owned by SECSB. For scheduled maintenance throughout the tenures of our PPAs, we have entered into contractual service agreements with GE Energy Parts, Inc. and GE Power Systems (Malaysia) Sdn Bhd. (ii) Power offtake We have entered into PPAs with Sabah Electricity providing for the sale of up to 380 MW of electricity generating capacity and the electricity production of RPI and RPII, each for a 21-year period,’ commencing on 25 October 2008, with respect to the RPI power plant, and commencing on 22 April 2011, with respect to the RPII power plant. RPl’s initial PPA with Sabah Electricity commenced in 10 August 1998 for a 21-year period ending on 9 August 2019. However, upon the completion of RPI’s conversion into a 190 MW combined­7. BUSINESS OVERVIEW (cant’d) cycle configuration, its PPA was replaced with a new 21-year period commencing on 25 October 2008 and ending on 24 October 2029. In 2014, RPI and RPII collectively sold approximately 2,492 GWh of electricity to Sabah Electricity. The PPAs provide that the power despatched and the operational requirements in terms of start-up, shutdown and increase or decrease of load from the respective power plant are determined solely by Sabah Electricity, subject to Sabah Electricity’s obligation to compensate us if shutdowns of the respective plant exceed 52 occurrences per each condition, as defined in the PPAs, per year. Sabah Electricity is obligated to make capacity payments and energy payments to us pursuant to formulas and conditions stipulated in the PPAs. The principal factors involved in the calculation of the capacity payment for any period include the dependable capacity for that period. The principal factors involved in the calculation of the energy payment for any period include the net electricity output of the plants, also known as load factor, and the average cost of fuel. Since the amount of the energy payment takes into account the cost of the fuel we use to produce the electricity, we are not exposed to natural gas or diesel price volatility. (iii) Fuel supply In order to secure the necessary fuel for the operations of RPI and RPII, we have entered into natural gas supply agreements, with PETRONAS and PETRONAS Carigali (collectively, “Fuel Suppliers”) to supply natural gas to the power plants until the end of the tenure of the PPAs. However, under our natural gas supply agreement relating to RPII, the Fuel Suppliers have warranted that there will be a supply of natural gas on a firm basis through the year 2020, but for the remaining contract years thereafter through to 2032 (the “Availability Period”), the supply commitment of the Fuel Suppliers is on an availability basis, depending on whether the Fuel Suppliers, in their reasonable opinion, have sufficient natural gas to be supplied to us. The Fuel Suppliers are required to notify us, not later than 2017 whether they have available natural gas for delivery during the Availability Period. The RPII gas supply agreement provides that the quantity to be delivered during the Availability Period is to be mutually agreed by the parties, but further provides that if the parties fail to reach mutual agreement by 30 June 2020, the Fuel Suppliers will have the right to determine the quantity to be delivered during the Availability Period in accordance with good industrial practice and in accordance with the principle that it is economically viable for the Fuel Suppliers to deliver that quantity. The natural gas proVided to us under these agreements is sourced from the Erb West and Kinarut gas fields, which are located 60 km offshore of Sabah. The gas supply agreements specify the volumes of natural gas that the Fuel Suppliers are required to make available during each year of the contract and provide that we are obligated to purchase and take delivery of at least 75% of the specified volume in each year. Pursuant to the gas supply agreements, if we pay for any quantity of natural gas based on the “take-or-pay” requirement but do not take delivery of that quantity, we may take delivery of that quantity within one contract year thereafter. The price of natural gas under the agreements is based on market price and is passed through to Sabah Electricity as an element of the energy payment due under our PPAs. 117 7. BUSINESS OVERVIEW (cont’d) We also have entered into diesel fuel supply agreements with Shell Timur Sdn Bhd to supply diesel to the power plants as backup fuel sufficient for up to seven days of full-load operation. Each diesel fuel supply agreement has a duration of 21 years commencing from the COD of the relevant power plants. Like natural gas, the price of diesel under the agreements is passed through to Sabah Electricity as an element of the energy payment due under our PPAs. For a summary of terms of our PPAs, refer to Sections 7.16.4 and 7.16.5 of this Prospectus. (iv) Production process The diagram below illustrates the production process for electricity production in our RPI and RPII power plants, with the process divided between the open-cycle and combined-cycle process. ICOl’ffilNED & OPEN CYCLE PROCESS I
Combined-cycle power plants feature both gas and steam turbines. The gas turbine generates electricity using natural gas or diesel fuel, while the steam turbine generates electricity using waste heat from the gas turbine. The process is extremely efficient since exhaust heat that would otherwise be lost through the exhaust stack is re-used to produce steam through heat recovery steam generators (“HRSG”) to produce additional electricity by the steam turbine generator. In an open-cycle configuration, only the gas turbine is used to produce electricity, and no electrical energy is derived from the waste heat of the gas turbine, and therefore the open-cycle process has lower thermal efficiency than the combined-cycle process. 7. BUSINESS OVERVIEW (cant’d) In the gas turbine portion of the process, a gas turbine compresses air and mixes it with fuel, either natural gas or diesel. The fuel is burned and the resultant hot air-fuel mixture is expanded through turbine blades, making them spin about a shaft. The spinning turbine drives a generator that converts the spinning energy into electricity. The working principle is essentially the same for both the RPI and the RPII power plants as follows: • Fuel is burned in a combustor;
• The resulting energy in the gas turbine turns the generator drive shaft;
• Exhaust heat from the gas turbine is sent to an HRSG;
• The HRSG produces steam using the gas turbine exhaust heat and delivers it to the steam turbine;
• The steam turbine delivers additional energy to the generator drive shaft; and
• The generator converts the energy into electricity.

(v) Operations review The table below provides a summary of operating statistics of the RPI power plant for the periods indicated. Year ended 31 Year ended 31 Year ended 31 December December December 2012 2013 2014 Actual energy generated (GWh) 1,310 1,253 1,279 Electricity sold (GWh) 1,271 1,217 1,241 Average net dependable capacity<1 J 190 190 190 (MW) Thermal efficiency (%t~) 37.5 38.1 37.7 Equivalent availability factor (%f) 91.8 84.7 92.2 Heat rate (kJ/Kwh) 9,644 9,492 9,518 Six months ended 30 June Actual energy generated (GWh) Electricity sold (GWh) Average net dependable capacity (MW) (‘) Thermal efficiency (%fJ Equivalent availability factor (%fJ Heat rate (k.IIKwh) 2014 694 673 190 38.1 95.9 9,493 486 471 190 36.3 91.7 10,038 7. BUSINESS OVERVIEW (cant’d) Notes: (1)
(2)

(3) The table below provides a summary of operating statistics the RPII power plant for the periods indicated.  Year ended 31  Year ended 31  Year ended 31  December  December  December  2012  2013  2014  Actual energy generated (GWh)  1,254  1,247  1,291  Electricity sold (GWh)  1,213  1,206  1,251  Avera~e net dependable capacity  190  190  190  (MW)  )  Thermal efficiency (%f~)  43.3  43.8  42.5  Equivalent availability factor (%)(3)  96.7  93.4  96.1  Heat rate (kJ/Kwh)  9,810  8,162  8,226
Six months ended 30 June 2014 2015 Actual energy generated (GWh) 696 536 Electricity sold (GWh) 674 517 Average net dependable capacity (MW) (1) 190 190 Thermal efficiency (%t~) 43.8 42.0 Equivalent availability factor (%)(3) 99.2 100 Heat rate (kJ/Kwh) 8,241 8,362 Refers to the average gross dependable capacity of a power plant in a given period (which may be less than installed capacity at any given time if technical problems are present) less the power plant capacity utilised to drive power plant station service or auxiliaries. For the applicable periods, represents an aggregate of the average net dependable capacity in each capacity billing period, which is calculated by weighting the number of days of differing dependable capacity for the power plant in each capacity billing period. A performance measure of a thermal device such as a power plant boiler expressing the output of the device as a percentage of the heat or energy content consumed. For the applicable periods, represents an aggregate of the thermal efficiency of a gas turbine, which is calculated by dividing the net electrical output over the mechanical energy produced. Refers to the availability of a power plant facility to produce electrical energy during an applicable period for delivery to the customer. For the applicable periods, represents an aggregate of the equivalent availability factor, expressed as a percentage, equal to (1)(a) the number of hours in a period less (b) the number of hours of planned and unplanned outages during that period as provided for in the applicable PPA, divided by (2) the number of hours in that period. (vi) Customer Our revenue from our power business is derived solely from Sabah Electricity as we are obligated under our PPAs to sell all our electricity capacity to Sabah Electricity. For the years ended 31 December 2012, 2013 and 2014, Sabah Electricity accounted for 30.7%,27.7% and 27.9%, respectively, of our total revenue. For the six months ended 30 June 2014 and 2015, Sabah Electricity accounted for 29.4% and 22.7%, respectively, of our total revenue. Accordingly, we are dependent on Sabah Electricity to purchase all of the power produced in our power business. 120 7. BUSINESS OVERVIEW (cont’d) (vii) Supplier PETRONAS Group is the only supplier of our power business that accounts for 10% or more of our cost of sales. For the years ended 31 December 2012, 2013, and 2014, purchases of natural gas from the PETRONAS Group accounted for 17.8%, 15.2% and 14.3%, respectively, of our total cost of sales. For the six months ended 30 June 2014 and 2015, purchases of natural gas from the PETRONAS Group accounted for 15.7% and 12.3%, respectively, of our total cost of sales. Accordingly, we are dependent on the PETRONAS Group for the supply of natural gas used by our power plants. However, if there were a disruption in the supply of natural gas, we expect that we would be able to run our power plants on diesel fuel for an extended period of time, being the duration of the gas supply disruption period. (viii) Competition Based on information from Sabah Electricity, there are a total of 16 IPPs operating in Sabah, including RPI and RPII, with a combined installed capacity of 996.3 MW as of 30 November 2015. We believe the electricity supply industry in Malaysia is in the growth stage of the lifecycle. While this industry is highly regulated and competition is relatively low, growth in the industry is driven by the growth in population and the demand from the commercial and industrial businesses. 7.5.2 Environment business (i) Utilities management and water supply services We hold an exclusive licence from the Minister of Energy, Green Technology and Water, Malaysia to provide source-to-tap water supply services to end­customers in the entire State of Johor, Malaysia. Johor is the fifth largest state in Malaysia by area, with a land area of approximately 19,210 km 2, and is the second most populous state in Malaysia, with an estimated population of approximately 3.5 million people as at 2014 (Source: Department of Statistics, Malaysia). We provide a wide range of water supply services in Johor, from sourcing of raw water, treatment and distribution of treated water to consumers through billing and collection. As at 30 November 2015, we had 1,081,399 customers in Johor, of which 935,949 were residential customers, 143,026 were trade and industrial customers and 2,424 were institutional customers, such as government office buildings, army camps, government hospitals, prison complexes and statutory governmental authorities. The tables below provide the breakdown of revenue and volume of water delivered by the types of customers for our water supply business in Johor for the periods indicated: Year ended 31 December 2014 Type of customers Revenue Volume of water (0/0) (010) Residential 43.5 64.2 Industrial 51.7 32.5 Institutional 4.8 3.3 Total 100.0 100.0 7. BUSINESS OVERVIEW (cont’d) Six months ended 30 June 2015 Type of customers Revenue Volume of water ———,-,-,.,-­(%) (%) Residential 43.4 64.1 Industrial 51.8 32.6 Institutional 4.8 3.3 100.0Total 100.0 As at 30 November 2015, the water supply system operated by us comprises 44 water treatment plants, which have an aggregate treatment design capacity of 1,986.4 MLD and which produced 1,571.9 MLD for the month of November 2015. The following map indicates the locations of these water treatment plants:
The water supply system also includes a distribution network of 21,229 km of pipelines (including 163 km of raw water mains, 3,162 km of distribution mains  and  17,904  km  of  reticulation  mains  (the  pipes  connecting  our  distribution mains to  end-customers)),  as  well  as  636 act ive storage  and  service reservoirs as at 30 November 2015.
7. BUSINESS OVERVIEW (cant’d) (a) Process flow The following chart illustrates our water treatment and water distribution process:
Sourcing of raw water We obtain our raw water from catchment areas under the management of the State Government of Johor. Catchment areas are areas designated by the State Government of Johor from time to time as sources of raw water pursuant to applicable legislations. The Water Supply Agreement contains a list of current and designated future catchment areas. Treatment and distribution of raw water The main objective of treating water intended for the public water supply is to produce a supply of water that is chemically and bacteriologically safe for human consumption. The supply must also be aesthetically acceptable, free from apparent turbidity, objectionable taste and odour. The treatment and distribution of raw water involve the following: • Raw water intake Coarse and fine screens first strain raw water that enters into the river-based intake structure. Floating debris such as twigs and leaves, aquatic plants and small debris are removed. After screening, the denser suspended matters are removed by allowing water to pass slowly throUgh chambers where they settle down to the bottom. Raw water is then pumped to the water treatment plant for treatment. 123 7. BUSINESS OVERVIEW (cont’d) • Aerator Raw water passes through an aerator where water is mixed with air. The aeration process provides oxygen from the atmosphere for the oxidation of dissolved iron and manganese to their insoluble form, thus enabling their removal, and to liberate carbon dioxide and hydrogen sulphide, reducing corrosiveness and removing colour. • Flocculation tank The aerated water then passes through a mixing chamber where coagulants are added, either by hydraulic or mechanical means, to obtain a rapid and uniform dispersion of chemicals to improve the formation of floc. When the coagulants are mixed into the water, complex chemical and physiochemical reactions occur leading to the formation of microscopic particles, a process called coagulation. This is followed by more gentle agitation of water, either by hydraulic or mechanical means, causing the microscopic particles to agglomerate or be flocculated into settleable floc. Lime may be added to adjust pH if the raw water is low in pH. • Sedimentation tank Water with settleable floc is allowed to flow through the sedimentation tank as uniformly as possible for a period long enough to permit the maximum practicable amount of floc to be settled before the water reaches the outlet at the end of the tank. Besides removing suspended and colloidal matters, this sedimentation process also removes bacteria and viruses absorbed on floc. The sludge in the sedimentation tank is periodically removed. • Filtration From the sedimentation tank, the settled water passes through a battery of filters. This filtration processes not only strains out suspended particles larger than pores between the filter media but also remove colloidal clay, colouring matter and bacteria that are smaller than pores. The filters are backwashed regularly through a combination of agitation by air and water to ensure efficient operations. • Fluoridation and Chlorination Fluoridation in the water treatment process is used to raise the amount of fluoride in the water supply to a level of about 0.4 mg/litre to 0.6 mg/litre. Filtered water is disinfected to destroy microorganisms that still remain in the water after filtration. Gaseous chlorine or chlorine compounds are generally used in the disinfections. The chlorine dose must be sufficient to leave sufficient free chlorine in the reticulation system. 124 7. BUSINESS OVERVIEW (cant’d) • pH Adjustment The last process in water treatment is conditioning to adjust the pH of treated water to prevent corrosion and to prevent leaching of lime from cement linings of pipes and fittings. Lime or soda ash is used in this process. Distribution Treated water is pumped to a balancing reservoir of sufficient height to facilitate distribution by gravity to service reservoirs in various demand centres. The capacity of the balancing reservoir must be sufficient to balance the inflows and outflows of water. As a general rule, a storage capacity of four to six hours is sufficient. Service reservoirs supplying water to various demand centres must have a storage capacity of 24 hours. In areas where water is unable to be supplied by gravity, booster pumping systems are used. We also distribute treated water sourced from third parties to end-consumers. In the first half of 2012, we produced approximately 30% of our treated water, purchased approximately 70% of our treated water from the State Government of Johor, who sourced approximately 65% of the treated water from bulk water suppliers and the remaining 5% from PUB. Beginning 1 July 2012, we have increased our own production of treated water as a result of us having taken over the operation of two water treatment plants from one of the State Government of Johor’s bulk water suppliers following the expiration of a legacy bulk water supply concession from that supplier on 30 June 2012. On 1 July 2014, upon expiration of the State Government of Johor’s remaining legacy bulk water supplier’s concession, we took over the operations of the remaining water treatment plants that were previously operated by the bulk water supplier. We currently produce approximately 95% of our treated water and purchase approximately 5% from the State Government of Johor, who sources treated water from PUB. (b) Restructuring of the water services industry As part of the Government’s restructuring of the water services industry, the Water Services Industry Act was enacted in 2006, establishing a new regulatory framework for the Malaysian water supply industry. The Water Services Industry Act outlines the water policy, licensing and regulatory framework for all of the states in Peninsular Malaysia and the Federal Territories of Putrajaya and Labuan as well as the powers and functions of SPAN, the Malaysian National Water Services Commission. As part of this restructuring, a water asset management company known as PAAB, a Wholly-owned subsidiary of the Minister of Finance Incorporated, was established in May 2006 to acquire the existing water infrastructure (e.g., water treatment plants, reservoirs, pumping stations, distribution networks, etc.) and/or build new water assets that will be leased to water service operators, and to obtain competitive financing for the development of the nation’s water assets. Pursuant to the Water Services Industry Act, no new water services concessions will be granted and existing water operators are given an option either to migrate from the old concession-based system to a new licensing regime, under which licences are granted by the Minister of Energy, Green Technology and Water, Malaysia 125 7. BUSINESS OVERVIEW (cont’d) (c) upon the recommendation of SPAN, or to remain as concession holders. Prior to the restructuring of the water services industry, in April 1999, SAJH was granted a 30-year concession from the State Government of Johor to provide source-to-tap water supply services to end­customers under the previous regulatory regime. SAJH’s 30-year concession took effect in March 2000. Under the concession terms, SAJH was required to continuously invest in water assets to meet the continuous demand for treated water, achieve the agreed service levels and reduce NRW. With the implementation of the Water Services Industry Act, we chose to migrate to the new licensing regime, and in March 2009, SAJH and RUSB entered into a Master Agreement with the Federal Government of Malaysia, the State Government of Johor, SAJSB and PAAB, and a Facility Agreement entered into by SA.IH with PAAB. Accordingly, SAJH’s scope of work under the licensing regime is essentially the same as it was under the previous concession, except that PAAB now owns all existing water infrastructure assets in the State of Johor and has assumed all liabilities relating to the water infrastructure assets, and PAAB is now responsible for building and financing all new water infrastructure assets as and when detailed in a business plan submitted by SAJH and approved by SPAN. SAJH terminated its concession with the State Government of Johor, transferred all of its water infrastructure assets, together with the corresponding liabilities, to PAAB and obtained the exclusive operating licence to continue providing water supply services to the entire State of Johor. The duration of SAJH’s license for the second operating period, effective from 1 July 2012 to 31 December 2014, was less than 36 months pursuant to a request by SPAN that SA.IH agree to a shorter licence period for the second operating period in order to standardise the cut-off date for all water companies’ licences to 31 December. SAJH’s licence has been renewed and it is currently operating in the third operating period to provide water supply services until 31 December 2017. Pursuant to the Facility Agreement, SAJH has been granted the right to lease each of the existing and new water infrastructure assets from PAAB for a period of 30 years beginning 1 September 2009. Pursuant to the Water Supply Agreement, SAJH purchases raw water supply from the State Government of Johor and SAJH treats the raw water, distributes treated water to customers and also provides billing and collection services from customers for the water supplied. For further information on the Master Agreement, the Facility Agreement and the Water Supply Agreement, refer to Sections 7.16.1,7.16.2 and 7.16.3 of this Prospectus, respectively. KPls and performance of our water supply business Pursuant to the terms of the licence, SAJH is required to submit a new business plan to SPAN every three years, detailing the targets that SAJH is required to meet with respect to certain KPls monitored by SPAN as well as the projected cost of meeting those targets. 7. BUSINESS OVERVIEW (cont’d) Each business plan will also set out any new water infrastructure assets required to meet the anticipated growth in demand, as well as the scheduled capital expenditures that are expected to be incurred in order for SA,IH to meet the applicable KPI requirements. The business plan will also set out proposed tariff increases, taking into consideration expected growth in demand for water and anticipated cost escalations, as necessary, to ensure that the business plan allows for the profit margin agreed upon between SAJH and the Government pursuant to the Master Agreement. SPAN will subsequently evaluate the business plan, including any proposed tariff increase, before approving the business plan. We have complied with, among others, the following KPls agreed with SPAN for our first operating period from 1 JUly 2009 to 30 June 2012: No. KPI Target 1. Supply coverage 100.0% urban, 99.5% rural
2. Treated water quality compliance 95.0% to 99.9%
3. Residual water pressure greater or equal to 99.5% 10m not less than 8 hours a day
4. Water supply complaints response within 5 97.0% working days
5. Telephone complaints are answered within 92.0% 30 seconds
6. Customer billing complaints received are 97.0% responded to within working 3 days
7. Collection efficiency 99.5%
8. Water loss (NRW) 29.0%

We have complied with, among others, the following KPls agreed with SPAN for our second operating period from 1 July 2012 to 31 December 2014: No. KPI Target 1. Supply coverage 100.0% urban, 99.5% rural
2. Treated water quality compliance 95.0% to 99.9%
3. Residual water pressure greater or equal to 95.0% 10m at meter position

4. Water supply complaints response within 98.0% customer charter schedule

5. Telephone complaints are answered within 90.0% 10 seconds

 

127 7. BUSINESS OVERVIEW (cont’d) No. KPI Target 6. Customer billing complaints received are 99.0% responded to within 24 hours
7. Collection efficiency 99.5%
8. Water loss (NRW) 26.8% The KPls agreed with SPAN for our third operating period from

January 2015 to 31 December 2017 are set forth below. No. KPI Target (2017) 1. Supply coverage 100.0% urban, 99.5% rural
2. Treated water quality compliance 95.0% to 99.9%
3. Residual water pressure greater or equal to 97.0% 10m
4. Water supply complaints response within 99.0% customer charter schedule
5. Telephone complaints are answered within 92.0% 10 seconds
6. Customer billing complaints received are 99.0% responded to within 24 hours
7. Billing efficiency 99.5%
8. Water loss (NRW) 24.8%

In addition, reducing water that has been produced but is lost before it reaches the customer (which we refer to as “NRW”) is one of our most significant operating goals. Since the execution of our Johor concession agreement in 1999 and the commencement of our water supply concession in Johor in 2000, we have reduced state-wide NRW from above 40.0% in 1999 to 25.8% as at 30 November 2015. We have taken a wide variety of measures to reduce NRW, including GIS mapping of pipes and network modelling, setting up DMAs to identify the areas within the network that have the highest rates of leakage, web-based DMA monitoring and analysis or AquaSMART system, advance pressure management and control, network operation and maintenance, customer service and operation centre, identifying and eliminating pilferage, and replacing aged pipes and water meters. To maintain the quality of treated water according to the Standard Drinking Water Guidelines, we have established 850 water sampling points in Johor, as well as a programme to clean 636 storage and service reservoirs in the State of Johor. (ii) Water concession assets abroad Outside Malaysia, through our joint venture the RWT (Cayman) Group, we operate various types of water treatment plants. Our strategy for our I 7. BUSINESS OVERVIEW (cont’d) environment business outside Malaysia, notably China and Thailand, is purely asset ownership of the water, wastewater and reclaimed water treatment plants as we focus on project development and implementation in order to grow our water treatment capacity. (a) China For purposes of our water business in China, we typically enter into a MOU/investment agreement with the local authority or industrial park management council. The MOU/investment agreement will allow the RWT (Cayman) Group to undertake an investment evaluation and feasibility study on the project, which in turn would allow a special purpose company to participate in the tender to bid for the project competitively during a bidding process. If we are successful in our bid, we enter into a concession agreement with the local authority or industrial park management council. Typically, we tender for concessions involving asset ownership and operations of water, wastewater and reclaim water treatment plants on a BOT basis. We then build the water treatment plants prior to the commencement of the water treatment concession and we operate and maintain the water treatment plants for the concession period. In respect of water treatment plants that are on a TOT basis, the water treatment plants are constructed by the local authority or government prior to transferring the asset to be operated and maintained by us. For concessions on a BOT or TOT basis, ownership of the water treatment plants will be transferred to the local authority or industrial park management council at the end of the concession period. Typically, the tariff rates for our concessions are reviewed periodically based on certain criteria set forth in the applicable concession agreement. As at the LPD, we or our joint venture, Yichun Pinang, operate the following water concession assets in China: • a 50.0 MLD water treatment plant in Yichun City, Jiangxi Province (“Yichun Plant”) which commenced operations in 2006 on a BOT basis for a 29-year period;
• a 30.0 MLD wastewater treatment plant in Xiaolan, Jiangxi Province (“Xiaolan Phase I Plant”) which commenced operations in 2009 on a BOT basis for a 29-year period;
• a 50.0 MLD wastewater treatment plant in Xiaolan, Jiangxi Province

4th(“Xiaolan Phase II Plant”) which commenced operations in quarter of 2013 on a BOT basis for a 29-year period; • a 30.0 MLD wastewater treatment plant in Hefei, Anhui Province (“Hefei Plant”) which commenced operations in 2011 on a BOT basis for a 25-year period; and
• a 50.0 MLD wastewater treatment plant in Xinxiang, Henan Province (“Xinxiang Plant”) which commenced operations in April 2013 on a TOT basis for a 28-year period;

129 7. BUSINESS OVERVIEW (cant’d) As at the LPD, we have interests in the foflowing water concession assets that have not yet commenced operations in China: • a 30.0 MLD wastewater treatment plant pursuant to a concession agreement entered into in 2009 on a BOT basis for a 30-year period and a 30.0 MLD reclamation plant, which is operated pursuant to an agreement with a customer within the industrial park in Yingkou, Liaoning Province. These plants are expected to commence operations in 1st quarter of 2016;
• a 20.0 MLD wastewater treatment plant in Changfen~ Anhui Province, which is expected to commence operation in the 4 quarter of 2016 on a BOT basis for a 30-year period;
• a 5.0 MLD wastewater treatment plant in Yihuang, Jiangxi Province, which is expected to commence operation in the 1st quarter of 2016 on a BOT basis for a 29-year period;
• a 5.0 MLD wastewater treatment plant in Wanzai, Jiangxi Province, which is expected to commence operation in the 1st quarter of 2016 on a BOT basis for a 29-year period; and
• a 10.0 IVILD wastewater treatment plant in Chongren, Jiangxi

2ndProvince, which is expected to commence operation in the quarter of 2017 on a BOT basis for a 29-year period. We either operate and maintain our wastewater treatment plants by ourselves or subcontract the day-to-day operations and maintenance of these plants to a third party, with the ownership to the wastewater treatment plants remaining with us. For our China operations, we operate and maintain our potable water treatment plant and all our wastewater treatment plants, except for the Xiaolan Phase I Plant and Xiaolan Phase II Plant whose operations and maintenance we have outsourced to Shenzhen Fumei Environmental Technology Co. Ltd (“Fumei”) through fixed three-year operation agreements. Under these agreements, Fumei is responsible for the day-to-day operations of these treatment plants. These arrangements enabled these plants to comply with the previously effective licensing requirement for the Qualification for Operating Environmental Pollution Treatment Facilities (“Licensing Qualification”) required prior to commencement of wastewater treatment operations. In January 2014, the State Council of the PRC removed the Licensing Qualification. Given the benefits of our outsourcing arrangements, we have decided to continue to subcontract the day-to-day operations of Xiaolan Phase I Plant and Xiaolan Phase II Plant to Fumei. The operation of the Hefei Plant and Xinxiang Plant were previously outsourced to Fumei until the expiration of its operation agreements in June 2014 and August 2015, respectively. In view of the removal of the Licensing Qualification and the complexity of the wastewater to be treated for the Hefei Plant and the Xinxiang Plant, we decided to directly operate these plants. As at LPD, RWT (Cayman) Group has the following existing MOUs and/or investment agreements in relation to several water and/or wastewater treatment projects in China: • Investment agreement dated 30 August 2013 between RWHK and Yongxin County Liang Yi Park Construction and Development Co., 130 7. BUSINESS OVERVIEW (cont’d) Ltd. with respect to the BOT concession of 29 years for a 10.0 IVILD wastewater treatment plant in Yongxin Industrial Park, Jiangxi Province, China; • Investment agreement dated 21 April 2014 between RWHK and Yongfeng County People’s Government with respect to the BOT concession of 29 years for a 10.0 MLD wastewater treatment plant in Yongfeng Industrial Park, Jiangxi Province, China; and
• Investment agreement dated 11 December 2014 between RWHK and Fuxin City Coal Chemical Industrial Park Management Council with respect to the BOT concession of 29 years for a 20.0 IVILD wastewater treatment plant in Fuxin City Coal Chemical Industrial Park, Liaoning Province, China.

The status of the projects that are the subject of these MOUs and/or investment agreements are as follows: Date of MOUI investment agreement 30 August 2013 21 April 2014 11 December 2014 Counterparty Yongxin County Liang Yi Park Construction and Development Co., Ltd. Yongfeng County People’s Government Fuxin City Coal Chemical Industrial Park Management Council -=D–=e..::.:ta::..:.i–=Is _ • 10.0 MLD wastewater treatment plant on BOT basis
• 10.0 MLD wastewater treatment plant on BOT basis
• 20.0 MLD wastewater treatment plant on BOT basis

Status As advised by the local authority, there is no bidding process required for this project. As at the LPD, the terms of the BOT agreement are being negotiated with the local authority. As advised by the local authority, there is no bidding process required for this project. As at the LPD, the terms of the BOT agreement are being negotiated with the local authority. As advised by the local authority, there is no bidding process required for this project. As at the LPD, the terms of the BOT agreement are being negotiated with the local authority. In addition, the tender for a 5.0 MLD wastewater treatment plant in Wen Chun Industrial Park, Jinxian County, Jiangxi Province, China was awarded by Jinxian County Development and Reform Commission to RWHK on 9 November 2014. As at the LPD, the terms of the BOT agreement are being negotiated with the local authority. 7. BUSINESS OVERVIEW (cont’d) We believe that our competitive and cost-effective applications, which have been used to increase the efficiency of our water treatment plants, as explained in Section 7.2.3 of this Prospectus, provides us with a competitive edge over other bidders. In the event we fail to secure the abovementioned water and/or wastewater treatment projects, we will aggressively look for other opportunities in China, capitalising on the rising demand for water treatment capacity in China on the back of increased emphasis by the PRC Government on environment protection. (b) Thailand For purposes of our water business in Thailand, we typically seek opportunities with industrial park developers and other private enterprises. After ascertaining the prospective client’s water and/or wastewater treatment requirements, we conduct preliminary investigations and prepare a technical and commercial proposal. If our proposal is acceptable to the prospective client, we negotiate and enter into a BOT, BTO or EPC contract. We also receive invitations from developers and other parties to tender bids for certain water and wastewater treatment projects. Typically other water companies are also invited to make a tender. If we are successful in our bid, we enter into an agreement with the developer or project owner on a BOT, BTO or EPC basis. Typically, the tariff rates for our concessions are reviewed annually based on certain criteria set forth in the applicable concession agreement. As at the LPD, we have interests in the following water concession assets in Thailand: • A BOT concession for a 10.5 MLD water treatment plant, a 24.0 IVILD wastewater treatment plant and a 10.0 MLD reclamation plant in Amata Nakorn, which commenced operations in 2008 for a 20-year period. Amata Nakom’s reclamation plant completed its upgrading work in the 4th quarter of 2014, upon which its concession period was extended from 20 years to 25 years;
• A BTO concession for a 10.5 MLD water treatment plant in Amata Nakorn, which commenced operations in 2003 for a 15-year period;
• A BTO concession for a 10.5 MLD water treatment plant and a 10.0 IVILD wastewater treatment plant in Amata City, which commenced operations in 2002 for a 15-year period;
• A BOT concession for a 15.0 MLD water treatment plant in Amata City, which commenced operations in 2012 for a 20-year period;
• A BOT concession for a 1.5 MLD wastewater treatment plant at the Asian Institute of Technology, Pathumthani Province, which commenced operations in 2012 for a 8-year period; and
• A BOT concession for a 10.0 MLD wastewater treatment plant in Amata City, which commenced operations in 2015 for a 30-year period.

We will continue to solely manage all our water treatment plants in Thailand as we already have an established operation and maintenance team in 7. BUSINESS OVERVIEW (cont’d) Thailand since 2000 and we are able to comply with the requirements of the local authorities. (c) Water Treatment Processes The following is a description of our wastewater and potable water treatment process: (1) Wastewater treatment process In our wastewater treatment operations, we treat industrial wastewater released within an industrial park. We utilise a range of physical, biological and chemical processes in our treatment facilities for the removal of suspended solids, biodegradable organics, bacteria and nutrients in order to discharge the pre-agreed quality­compliant effluent back to the environment. The process flow of our wastewater treatment plants is as follows: Equalisation sump Chemical reaction I DAF clarifier –+ tank –+ ‘———-­Sludge Sequential Batch dewatering Reactor II II ..I .. I IIDisposal of Discharge of treated sludge cake effluent Equalisation sump The equalisation sump harmonises large variations in characteristics of incoming wastewater, aiding in the performance of the downstream treatment processes. Chemical reaction tank In the chemical reaction tank, processes related to the pH adjustment (for effective physiochemical treatment processes), and coagulation and flocculation prepare the water for easement of sedimentation and filtration. These processes are conducted by mixing the water with coagulant chemicals, which cause microscopic suspended pollutants to come together to form larger floes. 7. BUSINESS OVERVIEW (cont’d) Dissolved Air Floatation (“OAF”) clarifier Utilising floatation technology, flocculated wastewater combines with the dissolved air generated from the air generator, releasing surfacing micro-bubbles to carry suspended solids to the top for removal. Sequential Batch Reactor (“SBR”) Specific bacteria are cultured to dissolve organic matters in the SBR system, which is made up of the following 5 sequential processes: • Fill -From the DAF clarifier, wastewater flows in to fill the tank at between 20-30% of the total tank volume
• React and aerate -Air is supplied for aeration, and continues until complete biodegradation of organic matters is achieved. Once the substrate is fully consumed, famine occurs, resulting in elimination of microorganisms.
• Settle -Once the preset dissolved oxygen concentration is reached, the settling period begins, whereby solid separation takes place, leaving clear, treated effluent above the sludge blanket.
• Decant -The discharge valve opens and the clear effluent at the top of the tank is withdrawn without disturbing the settled sludge.
• Idle -The reactor stays idle, until influent is again fed into the tank and the cycle is repeated. Accumulated sludge in the tank is removed as required.

Sludge dewatering Untreated sludge is dewatered, using either a filter press or centrifugal decanter to increase its solid concentration, forming sludge cake, prior to disposal. (2) Reclaimed water treatment process Our reclaimed water treatment operations include an additional stage of treatment of treated effluent following the wastewater treatment process described above, turning it into water fit for industrial use. Instead of channelling the treated effluent back to the environment, the treated effluent undergoes processes including fine clarification treatment, water polishing treatment, DAF clarification, ultrafiltration, reverse osmosis and disinfection to further remove suspended solids, biodegradable organics and pathogens not already removed during the wastewater treatment process. The treated reclaimed water is then recycled back to the industrial users for various usages in their operations. (3) Potable water treatment process Our potable water treatment operations include the purification of raw water to remove suspended solids, chemicals, biological entities, 134 7. BUSINESS OVERVIEW (cont’d) microorganisms and pathogens to produce water fit for human consumption. Our potable water treatment processes include inclined plate clarification, DAF clarification, sand media filtration and disinfection. (iii) Other water-related businesses We also provide EPC and consultancy services to clients in relation to various.water-related projects. Representative projects are as follows: Client Nature of project Location Commencement date State Economic Provision of design, Tanjung Langsat March 2010 Planning Unit of construction, Industrial Area, (completed in January the Johor supply, delivery, Johor 2011) installation, integration and testing for a project to supply raw water Lynas (M) Sdn Provision of EPC Gebeng, July 2010 Bhd services for a 12.0 Pahang (completed in October MLO wastewater 2013) treatment plant Hartalega Bhd Provision of EPC Bestari Jaya May 2011 services for water (completed in September and wastewater 2012) treatment systems of various sizes Jabatan Rehabilitation of Kuala Lumpur March 2012 Perkhidmatan sewerage network Pembetungan PT Rekayasa Provision of EPC Sipitang Sabah July 2012 Industri services for a wastewater treatment plant at Sabah Ammonia Urea Project
Lembaga Air Construction of Gunung April 2013 Perak water intake and Semanggol, related works Perak Lembaga Construction of Pengerang, July 2013 (completed in Kemajuan Johor reservoir and laying Johor January 2015) Tenggaral of reticulation pipe Lynas (M) Sdn O&M of wastewater Gebeng, September 2013 Bhd treatment plant Kuantan lOX Multi Relocation of SAJH Pasir Gudang, October 2013 Resources Sdn water pipe at Pasir Johor Bhd Gudang Highway 7. BUSINESS OVERVIEW (cant’d) Client  Nature of project  Location  Commencement date  WRP Pacific Bhd.  Asia Sdn.  Laying of raw water transfer pipeline from river water intake station to  Sepang, Selangor  5 August 2015  water treatment plant and provision of EPC services for a 30 MLD water treatment plant  WRP Pacific Bhd.  Asia Sdn.  Construction MLD intake station  of 30 pump  Sepang, Selangor  5 October 2015
We also provide specialised services in the management and optimisation of water utility assets through our wholly-owned subsidiary, RWSB. These include services related to NRW reduction, asset maintenance, billing systems, production management, water quality management, GIS and network modelling, network management, advanced pressure management and control and customer service and operation centres for clients in Malaysia and abroad, including the state water operators in the State of Johor, Melaka and Kedah, Terengganu, Kelantan, Pahang and Perak, the National Water Company of Saudi Arabia (in relation to projects in Riyadh and lV1adinah) and the World Bank (in relation to a project in Surabaya, Indonesia). (iv) Customers A substantial majority of the revenue of our environment business is derived from our operations in the State of Johor. For the years ended 31 December 2012, 2013 and 2014, our water supply business in Johor accounted for approximately 65.9%, 68.7% and 67.7%, respectively, of our total revenue. For the six months ended 30 June 2014 and 2015, our water supply business in Johor accounted for approximately 66.3 % and 73.4%, respectively, of our total revenue. No single customer of our environment business has accounted for 10% or more of our total revenue for the years ended 31 December 2012,2013 and 2014, and the six months ended 30 June 2014 and 2015. We believe we are not dependent on any single customer in our environment business. (v) Suppliers The following table sets forth the percentage of our total cost of sales accounted for by PAAB and the State Government of Johor, respectively, for the periods indicated: Year ended 31 Year ended 31 Year ended 31 December December December Supplier 2012 2013 2014 Percentage (“!o) of total cost of sales PAAB 23.9% 32.0% 27.8% State Government of Johor 12.8% 5.5% 2.8%
7. BUSINESS OVERVIEW (cant’d) Six months ended 30 June Supplier 2014 2015 Percentage (“!oj of total cost of sales PAAB 29.1% 39.2% State Government of Johor 6.7% 3.5% In our environment business, with the exception of the State Government of Johor and PAAB, whom we are dependent on, we are not dependent on any other supplier. SAJH leases water infrastructure assets in Johor from PAAB and it purchases raw water and treated water from the State Government of Johor. Refer to Sections 7.5.2(i)(b), 7.16.2 and 7.16.3 of this Prospectus for further details on the Facility Agreement relating to the lease of PAAB water infrastructure assets and the Water Supply Agreement relating to the supply of raw water and treated water by the State Government of Johor. (vi) Competition In our environment business, we face competition in three key categories: contracts for new concessions for water-related assets outside of Malaysia, EPC contracts and contracts for water management services (such as NRW reduction related services) within and outside of Malaysia. Our key competitors for non-Malaysian concession-related businesses in Asia are Veolia Environnement SA, Suez SA, Salcon Berhad, Manila Water Company, Inc. and Biwater Holdings Ltd., and, particularly in China, Sound Environmental Resources Co., Ltd (* 11ft; f.f ~~~ ~9: {5J’ if ~lt-0 i’iJ), Beijing Origin Water Technology Co., Ltd (~UjU~·7.l<.~HU~9:1JJ\if~lt-0i’iJ), Beijing Enterprises Water Group Limited (~t~7.l<.%-~0’lif~lt-0i’iJ), Qinghua Ziguang Company (5j1f$ ~ *0’Bj), Singapore Waterworks Of,~:iJIJJ;,EUj( j§-), Guozhen Company (OOft0o-]), Liaoning Environmental Company (iIril’!f i*0’OJ), Tianjin Water Company (7(5$7j(:%-0 ‘Bj); and Shanghai Tongji University Environmental Company (J:”.5alOJm=*’!f:!fi*0’OJ). Our key competitors for EPC-related works are Salcon Berhad, Puncak Niaga Sdn Bhd, George Kent (Malaysia) Berhad, Jaks Resources Berhad, Hatimuda Sdn Bhd and Asia Baru Construction Sdn Bhd for works within Malaysia, and Veolia Environnement SA and Suez SA for works outside of Malaysia, as well as local players located in the relevant jurisdiction. Our key competitors in respect of water management services (being mainly NRW reduction related services) are Hatimuda Sdn Bhd, Jalur Cahaya Sdn Bhd, Salcon Berhad, i20 Sdn Bhd and Radcom Sdn Bhd for works within Malaysia, and Veolia Environnement SA, Suez SA Miya and Manila Water Company, Inc. for works outside of Malaysia. Our assessment of these players as our key competitors in each relevant category is based on the participation of such parties in local and international tender processes for contracts within and outside of Malaysia over the past 10 years. 7. BUSINESS OVERVIEW (cont’d) 7.6 Sales and marketing In our environment business, we seek to market our services through a variety of measures, including: (i) arranging for visits by the media and clients/potential clients to some of our operational sites for them to see our capabilities first-hand; (ii) working closely with the Malaysian Water Association; (iii) identifying and developing strategic partnerships to pursue projects in other countries; and (iv) implementing an appropriate media communications strategy. As our power business has only one customer, it does not actively market its services at present. 7.7 Business interruptions The RPII power plant was running at half capacity of 95 MW for 79 days from 5 December 2012 to 21 February 2013 due to the failure of one of its gas turbine generators as a result of damage to its compressor blades and stator vanes. A new compressor rotor was delivered to the RPII power plant on 29 December 2012, which was followed by retrofit work, re-balancing and shop tests on the new compressor rotor before it was assembled. The RPII power plant was restored to full combined-cycle configuration on 21 February 2013. On 5 June 2013, we submitted the final insurance claim of RM19.5 million, the claimable portion out of the total cost of replacing the damaged compressor rotor and the estimated loss of revenue arising from the said failure of approximately RM31.1 million. In a final settlement, the insurance company paid RM15.0 million. This incident reduced both the revenue of our power generation business and PATAIVII of our Group for the year ended 31 December 2013 by approximately RM15.0 million and RM11.6 million, respectively. On 17 October 2013, the RPI power plant, which was running on open cycle mode at 20MW load, tripped its high vibration alarm activation due to twisted and broken inlet guide vane blades and compressor blades. The RPI power plant was restored to full combined-cycle configuration on 9 December 2013. On 11 I\/Iarch 2014, RPI submitted an insurance claim of RM16.6 million based on actual costs of replacing the damaged parts of RM14.7 million and estimated loss of revenue of RM1.9 million. In final settlements in July and August 2014, the insurance company paid an aggregate of RM14.5 million, resulting in unreimbursed costs of RM1.0 million and uncompensated loss of revenue of RM1.1 million. This incident reduced the revenue of our power business and our PATAMI by approximately RMO.7 million and RM 1.02 million, respectively, in the year ended 31 December 2013, and by approximately RMO.4 million and RMO.24 million, respectively, in the year ended 31 December 2014. Other than the reduced revenue and PATAMI disclosed above, there are no other material implications resulting from the business interruptions described above. Sabah Electricity has not imposed any penalties on us in relation to the business interruptions described above. There has not been any material interruption to our business activities during the past 12 months from the LPD. 7.8 Quality control and certification and recognition We give high priority to quality control. Our businesses have received a variety of certifications in relation to their operations. 7. BUSINESS OVERVIEW (cant’d) 7.8.1 Power business RPOM has received ISO 9001 :2008 certification from SIRIM QAS International Sdn Bhd. 7.8.2 Environment business SAIH has received numerous IVIS ISO 9001-2008 certifications relating to production of treated water from SIRIM QAS International Sdn Bhd and a number of MS ISO/IEC 17025 certificates of accreditation from Akreditasi SAMM Malaysia relating to field of testing (chemical and microbiology). SAJH has also received MS ISOIIEC 27001 :2007 Information Security Management System (ISMS) certification and MS ISO 50001 :2005 relating to energy management from SIRIM QAS International Sdn Bhd. RWSB and RWT have received ISO 9001 :2008 certifications for Quality Management Systems. 7.9 Occupational safety and health and environment matters We have comprehensive health, safety and environmental management policies and systems covering environmental protection and conservation, people safety, health and asset protection. 7.9.1 Occupational safety and health The occupational safety and health of our employees, as well as safety and health of our customers, are of critical importance to us. We are required to comply with a range of health and safety laws and regulation that are designed to protect workers, customers and consumers of our business. To comply with these regulations, we have developed specific operating and maintenance procedures and are required to maintain records and report data on a timely basis. In our power business, our operations are subject to inspections by government authorities such as Department of Safety and Health, Department of Environment, EC, the Malaysian Fire and Rescue Department, SIRIM and Sabah Electricity. Our ongoing training programs apply to all shifts of our power generation processes to ensure safe and clean conditions for our power generation facilities. We hold regular safety awareness meetings, and we conduct walk-through inspections to verify safety conditions and employee activities. In our environment business, we seek to ensure that employees, customers and contractors are able to deliver services in line with international safety standards. Our safety management system was awarded an OHSAS 18001 :2007 certificate by SIRIM International in 2010. 7.9.2 Environmental compliance We are subject to extensive and changing laws and regulations designed to protect and preserve the environment, including laws and regulations that relate to air, soil, and water, hazardous waste management, limitations on the discharge of pollutants and standards for the treatment, storage and disposal of toxic and hazardous wastes. From time to time, there may be incidents of violations of such regulations. Refer to Section 5.1.2(vii) of this Prospectus. In Malaysia, the Environmental Quality Act 1994 (” EQA)” and the Petroleum (Safety Measures) Act 1984 are the principal regulations for the prevention, abatement and control of pollution and the protection of the environment. Under the EQA, we are 7. BUSINESS OVERVIEW (cont’d) required to carry out an EIA and obtain approval of the results of the EIA from the Department of Environment prior to commencing any major projects. We are also subject to environmental laws and regulations in China in respect of our operations in several provinces of China. The major environmental laws and regulations applicable include the Environmental Impact Assessment Law, the Environmental Protection Law and the Water Pollution Prevention Law. Under the aforesaid laws, construction projects can only be put into operation after the environmental protection authority has examined and approved the pollution prevention facilities. We are also required to adopt effective measures to avoid and control the pollution and damage caused to the environment. The principal environmental regulation in respect of our wastewater treatment business in Thailand is the Improvement and Conservation of National Environment Quality Act B.E. 2535 (1992) (“Thai EQA”). Under the Thai EQA, an EIA must be prepared and submitted to the Office of Natural Resources and Environmental Policy and Planning for approval before the commencement of any new wastewater treatment project. The Office of Natural Resources and Environmental Policy and Planning is the environmental compliance regulatory body in Thailand. The design and construction of the treatment facilities belonging to our subsidiaries have taken into account applicable requirements pertaining to environmental pollution treatment facilities, pollutant discharge, safety conditions in relation to the construction of chlorine chambers, and occupational diseases. As at the LPD, there is no breach of any such regulations which has yet to be rectified by our Company or our subsidiaries that would have a material adverse effect on us. 7.10 Insurance and risk management There are a number of risks associated with the operation of our business, including mechanical failure, third party liabilities, property loss or damage and business interruption. Through our insurance coverage we aim to preserve our assets and operations against risks in conducting our business. In our power business, we maintain a comprehensive insurance programme covering our assets comprising all of our real and personal properties including bUildings and other permanent fixtures, plant, machinery, equipment and inventories. The coverage is on an all­risks basis and provides for full replacement cost in the event of loss or damage, subject to the applicable standard policy conditions and exclusions. The coverage is for one year duration and is subject to annual renewal. We also maintain various other insurance policies including public liabilities, workmen’s compensation, employee benefits, coverage for loss of revenue resulting from damage to assets and other coverage. In our environment business, we have procured comprehensive insurance coverage to safeguard our assets, including buildings and structures, pipes, dams, reservoirs, water treatment plants, water pumping equipment, office equipment, lab equipment, recording instruments, telephone systems, furniture, fixtures and fittings, mobile equipment and inventories, as well as business interruption insurance. We also maintain various other insurance policies including industrial all risk, public liabilities and other coverage. For the years ended 31 December 2012, 2013 and 2014, we paid an aggregate of RM5.5 million, RM8.1 million and RM9.3 million, respectively, in insurance policy premiums. For the six months ended 30 June 2014 and 2015, we paid an aggregate of RM4.9 million and RM6.2 million, respectively, in insurance policy premiums. 7. BUSINESS OVERVIEW (cont’d) 7.11 Employees The following table sets forth the total number of our employees as at the dates indicated. As at 31 December As at the LPD Category of employees 2012 2013 2014 2015 Executive directors and senior 25 26 37 33 management Managerial and professional 92 114 173 168 Executive 378 364 345 356 Non-executive 2,205 2,282 2,495 2,556 Total 2,700 2,786 3,050 3,113 The following table provides a breakdown of the number of employees by business as at the dates indicated. As at 31 December As at the LPD Business 2012 2013 2014 2015 Power 130 133 135 142 Environment 2,570 2,653 2,915 2,971 Total 2,700 2,786 3,050 3,113 The following table provides a breakdown of the number employees by geographical areas as at the dates indicated. As at 31 December As at the LPD Geographical 2012 2013 2014 2015 Malaysia 2,516 2,660 2,913 2,920 China 117 55 61 109 Thailand 67 71 76 84 Total 2,700 2,786 3,050 3,113 As at the LPD, we employed a total of 2,745 permanent staff and 368 contract staff. Permanent staff generally includes executive directors, senior management, executives and non-executives, while our contract staff generally includes consultants, specialist project managers and site supervision staff. The number of our employees in Malaysia increased from 2,660 as at 31 December 2013 to 2,913 as at 31 December 2014, mainly because we took over the operations of the remaining water treatment plants that were previously operated by the bulk water supplier upon expiration of the State Government of Johor’s remaining legacy bulk water supplier’s concession in 2014. The number of our employees in China decreased to 55 as at 31 December 2013, compared to 117 as at 31 December 2012, mainly because we outsourced the day-to-day operations and maintenance of the Xiaolan Phase I Plant, Xiaolan Phase II Plant and the Xinxiang Plant to Fumei in 2013. The number of our employee in China increased to 109 as at the LPD compared to 61 as at 31 December 2014, mainly because we took over the operation and maintenance of the Xinxiang Plant after the termination of its outsourcing agreement with Fumei in 1 August 2015. 7. BUSINESS OVERVIEW (cont’d) Malaysian employment regulations require employers and employees to contribute to the EPF to provide for the retirement and other needs of employees. Under present regulations, employees contribute 11 % of their monthly salary to the EPF through payroll deductions. Employers are required to contribute a minimum amount equivalent to 12% of an employee’s monthly salary to the EPF. Under employment contracts and collective agreements entered into by us, we contribute 12% of the employees’ salaries to the EPF (or 13% with respect to employees earning less than RM5,000 per month). In our environment business, we have a defined benefit retirement scheme for employees hired before April 1999. Our total provision for retirement benefits as at 30 June 2015 with respect to this scheme was RM4.5 million. For further information concerning this scheme, refer to Note 25 of the Accountants’ Report as set out in Section 11.2 of this Prospectus. Other than our contributions to the EPF and the employee retirement benefit scheme of our environment business, we do not maintain any other retirement, pension or severance plans or have any unfunded pension liabilities, nor do we owe any amounts to any present or former employees not in the ordinary course of business operations. As at the LPD, approximately 45.6% of our employees were unionised, all of whom are employees of SA.IH, and SAJH has entered into a collective bargaining agreement with the labour union of SAJH (namely Kesatuan Pekerja-Pekerja SAJH Sdn Bhd (Bukan Eksekutif)) representing its employees which will be in effect from 1 January 2013 through 31 December 2015 (“2013 CBA”). The terms of this agreement will govern the relationship between the union and SAJH. Under this agreement, the union is recognised as the sole representative body for the non-executive employees of SAJH, and reserves the right to raise issues relating directly to the terms of employment of such employees, such as wages and other terms and conditions. The agreement also sets out, among others, the terms and conditions relating to matters such as criteria for employment, increments, working hours and overtime, the provision of accommodation to employees and leave. SA.IH is also required to form a committee relating to industry, health and environment to ensure that the levels of industrial safety are maintained. We are currently negotiating the terms of a new collective bargaining agreement with Kesatuan Pekerja-Pekerja SAJH Sdn Bhd (Bukan Eksekutif). We expect such negotiations to be completed in the first half of 2016. Pending the execution of a new collective bargaining agreement, the terms of the 2013 CBA shall continue to be in effect. We have not experienced any strikes or work stoppages in the past, and we also have not experienced any significant problems with employee labour unions. We believe that our relations with these labour unions are cordial. Regulations in China require PRC companies to participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, and a maternity insurance plan, and a housing provident fund. PRC companies are required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of the employees up to a maximum amount specified by the relevant local government from time to time. The Social Security Act, B.E. 2533 of Thailand (the “Social Security Law”) requires employers, employees, and the government to contribute to the social security fund (the “Social Security Fund”) at the rates and in the circumstances prescribed in the Social Security Law. Employees, who participate in the Social Security Fund, will be entitled to compensation in the event of injury, illness or death which is not related to work, childbirth, or disability. The Social Security Office of Thailand is responsible for the administration of the Social Security Fund. As at the LPD, the employees of RWT (Thai) and AnuRAK make a monthly contribution to the Social Security Fund equivalent to 5% of the relevant employee’s monthly salary, subject to a maximum amount of Baht 750 per month, and the employers, RWT (Thai) or AnuRAK, as applicable, and the government each make a matching contribution to the Social Security Fund at the same rate. 142 7. BUSINESS OVERVIEW (cant’d) In addition, regulations in Thailand require employers to participate in the Workmen’s Compensation Fund, which was established under the Workmen’s Compensation Act, B.E. 2537 of Thailand (the “Workmen’s Compensation Law”). The Workmen’s Compensation Fund was established to ensure that proper compensation will be paid to employees when the employees suffer from injury, sickness, death and other events due to work-related causes specified under the Workmen’s Compensation Law. The rate of the annual contribution will be as prescribed by the Ministry of Labour and Social Welfare of Thailand, which shall not be more than 5% of the annual salary of all the employees of the relevant employer. The maximum annual salary of each employee for the purpose of this calculation is Baht 240,000 per employee per year. As at the LPD, there is no non-compliance by our Company or our subsidiaries with applicable employment regulations in Malaysia, China and Thailand that would have a material adverse effect on us. 7.12 Research and development We have not undertaken any proprietary basic research and development in the last three years. However, we maintain a close working relationship with our suppliers of technology. 7.13 Technology (i) Power business
The generation process uses mechanical energy to rotate the power generator turbines. Refer to Section 7.5.1 (iv) of this Prospectus for further details on the electricity production process.
(ii) Environment business

For water business, there are several methods and technologies that are available and are used worldwide for treating raw water into drinking quality or industrial wastewater. Refer to Sections 7.5.2(i)(a) and 7.5.2(ii)(c) of this Prospectus for further details on the application of the methods applied by our Group for water and wastewater treatment process. In addition, AquaSMART system is a web-base application system developed as an operational tool and has become an integral component of the NRW reduction strategy. This system is an internal NRW resource developed in-house to provide effective monitoring and decision support for the NRW business. This effective monitoring and decision support helps the NRW business to meet its targets and allocate its resources effectively and efficiently, thereby creating a competitive advantage for the NRW business. This system performs as a data storage management system for data capture, input, handling and monitoring of DMA’s field data for the any given project. The AquaSMART system links all of the DMA’s raw data collected (from any software) and creates reports at the click of a button. It is a simple and useful tool for DMA monitoring, either for a long term or on a daily basis, which would save data analyst a significant amount of time. The NRW business does not sell AquaSMART as a standalone product. As a result, no revenue or income is generated directly from AquaSMART. Rather, the NRW business utilises AquaSMART as an internal monitoring and decision-making resource that helps RWSB to achieve client targets and optimise its costs. 7. BUSINESS OVERVIEW (cont’d) 7.14 Corporate social responsibility We are committed to fUlfilling our corporate social responsibility. In our power business, we pursue all of our business activities in accordance with the following principles: providing safe and stable products and services; protecting the environment; contributing to the society and local communities; and creating good workplace environments. We continue to create and participate in community related projects that enable us to share our insights, knowledge and technologies. In our effort to improve the life and living standard of the under-privileged, especially those from the surrounding community, we have provided internships to more than 20 local students annually from the surrounding technical institutions (Le. polytechnics and universities), which have led some to be permanently employed in our power plants. On 10 October 2012, we completed a corporate social responsibility involving a micro-hydro project at a remote village named Kampung Babalitan, Pensiangan, Sabah to provide for 5 kW of electric power generation for the indigenous people of Murut tribe consisting of about 45 families. Prior to this corporate project, the villagers were dependent on portable diesel generators which are costly and not environmentally friendly. The micro-hydro project uses water as fuel and consists of a turbine generator set, control panel and ancillary equipment including water storage tanks. The micro-hydro project can supply continuous reliable electricity to the villagers of Kampung Babalitan. In our environment business, as an international corporate citizen, we pursue our business activities in line with the principles of the United Nations Global Compact, to which we became a signatory in August 2008. Since becoming a signatory, we have taken leadership roles in the pursuit of such principles by being elected to the Steering Committee of the Global Compact Network Malaysia and the Chief Executive Officer Water Mandate. In this endeavour, we have collaborated with regional utilities through partnerships with the World Bank and Environmental Cooperation Asia, pursuant to which we share our experiences and best practices, as well as help implement measures to improve water service delivery, with the aim of contributing to the realization of the Millennium Development Goal NO.7: halving the proportion of the popUlation without sustainable access to safe drinking water by 2015. We have executed eight twinning programmes with utilities from India, the Philippines, Vietnam, Thailand and Indonesia. In addition, SAJH is one of the founding members of the Bonn Network, an international group of water suppliers under the purview of International Water Association, committed to providing good, safe drinking water. In our operations in Johor, SAJH carries out elements of operational efficiency such as monitoring of energy consumption, continuous monitoring of water quality as well as detecting pollution and prOViding sludge treatment for plants larger than 5 Mgd. These sludge treatment facilities ensure minimisation of pollutant discharged to the environment. In the State of Johor, we provide free installation and supply of water for low income residents. We carry out the School Education Programme pursuant to which we provide briefings to schools to teach school children about the water treatment process and inform them of water conservation tips, assist natural disaster victims through among other things, donations in kind, volunteering, 24-hour standby at relief centres, deployment of water tankers and potable water treatment plants during droughts. Within the congenial working environment, we have achieved success through the implementation of knOWledge management programmes to capture tacit knowledge from experienced employees, and these are kept as manuals on our web portal i-water.com.my. We have also set up the Water Academy, the first of its kind in Malaysia, which employs 7. BUSINESS OVERVIEW (cont’d) qualified trainers providing internal and external technical training at its training centre in Sungai Layang, Johor. 7.15 Seasonality Our business is not subject to seasonal fluctuations. 7.16 Highly dependent contracts As at the LPD, save as disclosed below, there are no material contracts, agreements, arrangements or other matters which had been entered into by us which we are highly dependent on: 7.16.1 Master Agreement The Master Agreement was entered into between the Government, the State Government of Johor, SAJSB, RUSB, PAAB and SAJH on 11 March 2009. This Master Agreement was entered into for the purposes of restructuring the water assets and liabilities in the State of Johor arising from the enactment of the Water Services Industry Act. Arising from the Master Agreement, SA.IH terminated the concession agreement and the water supply agreement with the State Government of Johor, all the existing water assets were reverted to the State Government of Johor and SAJH novated all its rights and obligations under its debt relating to the water assets and the capital works to PAAB. In consideration of this, amongst others, SAJH was granted the licence to provide water supply services throughout the State of Johor. The Master Agreement also provides for SAJH to enjoy a reasonable return at an average profit after tax margin of 9% for the first three years commencing from the date of completion of the Migration and thereafter at a reasonable return as may be approved by the Government, subject to SA.IH complying with the agreed KPI. In the event SAJH fails to achieve reasonable return due to the Government’s failure to increase the water tariff as projected in the approved business plan or any increase in the unit price of electricity exceeding 15%, then the Government shall assist SAJH to recover such losses. Other matters set out in the Master Agreement include: (i) an obligation on SAJH to allocate 20% of its issued share capital at par value to the State Government of Johor with an option to further increase the State Government of Johor’s shareholding;
(ii) an obligation on the State Government of Johor and SAJSB to transfer all assets relating to the water supply services in the State of Johor, save for those owned or operated by the independent bulk water supplier, to PAAB and to grant unlimited access;

(iii) an obligation on the State Government of Johor to grant access and use of all land relating to the water assets to PAAB; and (iv) an obligation on the State Government of Johor to maintain the watercourse and ensure the uninterrupted supply of raw water to SA.IH. 7. BUSINESS OVERVIEW (cont’d) Any dispute which may arise under the Master Agreement is to be settled amicably between the parties, failing which such dispute shall be referred to a Dispute Resolution Committee. If the Dispute Resolution Committee fails to resolve the dispute or any party concerned is not satisfied with the decision made by the Dispute Resolution Committee, then any such party shall have the right to exercise all or any of the remedies available whether by Master Agreement or by statute or otherwise. There is no expiry date or term / duration for the Master Agreement. However, the Master Agreement may be terminated due to a breach by any of the parties or due to the occurrence of a force majeure event and subject to the mutual agreement of all parties. 7.16.2 Facility Agreement The Facility Agreement was entered into between PAAB and SAJH on 11 March 2009. Pursuant to the Facility Agreement, PAAB is obliged to grant to SAJH the right of use over all water assets and new water assets owned by PAAB in the State of Johor (the “Right of Use”) for a period of 30 years, subject to renewal on terms to be mutually agreed by the parties. In respect of each new water assets, PAAB and SA.IH will enter into a supplemental agreement to the Facility Agreement, setting out the description of the new assets and the rental payable in relation thereto. In consideration of the Right of Use granted to SAJH, it will pay to PAAB rental based on the total investment outlay of the water assets, at an annual charge rate of 6%, escalating at 2.5% per annum for 30 years. Save for the rental provided for by the supplemental facility agreement dated 6 November 2009, of which the rental is calculated based on the total investment outlay of the water assets at an annual charge rate of 3% per annum for 33 years, the rental payable for new water assets shall also be calculated at the same annual charge rate as aforesaid, but subject to review by SPAN at any time SPAN shall deem fit. Refer to Section 10.2.3(ii)(b) of this Prospectus for details on changes to the annual charge rate payable by SAJH to PAAB for use of the water assets. The rental is payable by SA.IH to PAAB on a monthly basis. An account has been opened such that all monies collected from the consumers will be deposited. This account is assigned to PAAB as security for the payment of the rental. Notwithstanding this, SAJH is permitted to withdraw any monies from the account so long as it is not in default of the Facility Agreement. The Facility Agreement provides for PAAB to construct, upgrade and refurbish water assets and new water assets as may be required by SAJH so as to enable it to perform all its obligations and duties under the license. If either party defaults under the Facility Agreement, then the non-defaulting party may, subject to it giving 14 days’ notice, terminate the Facility Agreement and thereafter it shall have the right to exercise all or any of the remedies available whether by the Facility Agreement or by statute or otherwise to claim for all losses and damages suffered by the non-defaulting party as a result of such breach. 7.16.3 Water Supply Agreement The Water Supply Agreement was entered into on 9 July 2009, between the State Government of Johor, SAJSB, RUSB and SAJH. The Water Supply Agreement became effective on the completion of the migration under the Master Agreement. Pursuant to the Water Supply Agreement, SAJH has agreed to purchase treated water from the State Government of Johor and SAJSB which are generated from the 7. BUSINESS OVERVIEW (cont’d) existing bulk water supplier and PUB on a back-to-back basis (collectively the “Bulk Water Suppliers”). The treated water purchased by SAJH shall be as required by SA,IH provided that such quantity is not more or less than the quantity that SAJSB and the State Government of Johor is obligated to purchase from the Bulk Water Suppliers. The quality of treated water supplied to SAJH must comply with the mandatory standards based on the National Standard for Drinking Water Quality issued by the Ministry of Health or such other guidelines as may be issued by the said ministry or other governmental agencies or other relevant authorities, provided that the chlorine residual level at each delivery point shall be in the range of 1.5 mg/I and 2.0 mgt!. SAJH has the right to request that the State Government of Johor increase the chlorine level at any water treatment facilities in case of emergency, at SAJH’s costs. If the treated water supplied to SAJH is suspended or is not in compliance with the agreed water quality standards, SA,IH may take action to overcome or alleviate any resulting water shortage in which event SAJH shall be reimbursed for all costs incurred by SAJH in taking such actions. Such costs incurred may be recoverable by SA,IH by deducting the same from any money or moneys due or become due to the State Government of Johor under the Water Supply Agreement. SAJH is obligated to pay the State Government of Johor and SAJSB for the purchase of treated water, calculated based on the bulk sale rate payable by the State Government of Johor or SAJSB to the Bulk Water Suppliers. Further, the Water Supply Agreement requires the State Government of Johor to grant to SAJH the right to abstract and draw water from the catchment areas so long as SAJH remains a service licensee under the Water Services Industry Act. The total quantity of raw water abstracted by SAJH for each month shall be equivalent to the quantity of treated water produced by SAJH pius 7.0% as in-plant usage and the price payable by SAJH for the raw water shall be at the rate of 5.0 sen/per cubic meter for the first 10 years commencing from the commencement date and thereafter escalated annually at consumer price index. The State Government of Johor shall, at its own costs, retain, manage and preserve all catchment areas and ensure that there shall be sufficient supply of raw water and the quality of raw water supplied is in accordance with the Desirable Raw Water Standard as set out in the Water Supply Agreement. The State Government of Johor is required to take all steps or actions to overcome any shortfall or deterioration of raw water due to pollution or contamination beyond the control of SAIH, failing which it shall be obliged to compensate SAJH. In the event of a breach by any party under the Water Supply Agreement, the non­defaulting party may terminate the Water Supply Agreement and thereafter may exercise all or any of the remedies available to it whether by the Water Supply Agreement or by statute or otherwise and to claim for all losses and damages suffered by the non-defaulting party as a result of such breach by the defaulting party. There is no expiry date or term / duration for the Water Supply Agreement. However, the Water Supply Agreement may be terminated due to a breach by any of the parties or due to the occurrence of a force majeure event. 7. BUSINESS OVERVIEW (cont’d) 7.16.4 RPI PPA The RPI PPA was entered into between RPI and Sabah Electricity for the sale of generating capacity and electrical energy from the power plant located in Kota Kinabalu Sabah on 9 December 2004. The RPI PPA provides that RPI is to convert the electricity generating facility (the “RPI Facility”) which was initially operated on an open cycle mode with a dependable capacity of 120 MW by the design, construction, integration into the existing facility and commissioning of four heat recovery steam generators and two steam turbine generators so as to enable the said RPI Facility to operate on a combined cycle mode with a dependable capacity of 190 MW (the “Combined Cycle Facility”). The RPI PPA provides for an initial term period to become effective on the date of the RPI PPA and expires on the 21st anniversary of the second block COD, of the Combined Cycle Facility, the date on which all the conditions precedent have been fulfilled (the “RPI Term”). The RPI Term may be extended at the request of either party, subject to the parties agreeing to the extension not later than one year prior to the expiry of the RPI Term. The principal sale and purchase obligations of both RPI and Sabah Electricity are as follows: (i) RPI shall not, without prior consent of Sabah Electricity and the EC, sell any electrical energy or capacity from the Combined Cycle Facility to any party other than Sabah Electricity;
(ii) RPI shall deliver and Sabah Electricity shall purchase a level of dependable capacity up to 190 MW; and

(iii) in situations where the safety or security of Sabah Electricity’s system is threatened, RPI shall use its reasonable efforts to provide electrical energy or capacity consistent with prudent utility practices and/or to delay or to bring forward any scheduled outage, maintenance outage and major overhaul outage of the Combined Cycle Facility. Notwithstanding the above, Sabah Electricity is entitled not to accept electrical energy from RPI due the following circumstances: (i) the occurrence of a situation which presents a physical threat or danger to life, health or property or could cause a significant disruption on Sabah Electricity’s system;
(ii) during the period where Sabah Electricity conducts maintenance of the interconnection facilities, metering equipment and adjacent transmission or distribution facilities; or

(iii) RPI fails to produce electrical energy which meets the agreed specification. The RPI PPA proVides for Sabah Electricity to pay RPI the following: (i) test energy payment for the electrical energy despatched during the test period;
(ii) capacity payment for the dependable capacity made available to Sabah Electricity; and

7. BUSINESS OVERVIEW (cont’d) (iii) in respect of the supply of electrical energy generated from each block, the energy payment. Energy payments received in respect of the sale of electrical energy are determined by the net energy output generated from each block delivered to the interconnection point during the billing period, RPI’s fuel cost and the variable operating rate. RPI will absorb any additional fuel costs incurred in the event the heat rate exceeds certain permitted rate. All payments made by Sabah Electricity to RPI are determined based on formula set out in the RPI PPA, subject to variation of certain factors such as the operating rate, the indexable fixed charge and maintenance charges. In the event of force majeure, the parties shall only be able to excuse their obligations under the RPI PPA that occurs or is in effect after the second block COD. 1\10 obligations of the parties that are required to be completely performed prior to the occurrence of a force majeure event shall be excused as a result of such occurrence and the obligation of the parties to pay money which is due prior to such occurrence or during the continuance of such force majeure event shall not be excused. In the event of default and if the operation of the Combined Cycle Facility is not assumed by its financiers, Sabah Electricity shall have the right to assume the operational obligations of RPI in relation to the Combined Cycle Facility. In the event of default, the non-defaulting party may terminate the RPI PPA by giving 60 days’ notice to the defaulting party and thereafter, either party may claim against the other party and exercise any rights or remedies available to them at law or equity for the breach of the RPI PPA by the other party, save for any indirect, incidental consequential or punitive damages as a result of non-performance of any party, including failure to deliver or purchase electrical energy under the RPI PPA. The RPI PPA further provides that Sabah Electricity has an option to purchase the Combined Cycle Facility from RPI prior to the expiry of the RPI Term or after the early termination of the RPI PPA. Upon the receipt of the notice, the parties shall negotiate the terms of the purchase pursuant to an agreed procedure and the purchase price shall be at the fair market value of the Combined Cycle Facility. 7.16.5 RPII PPA A power purchase agreement was entered into between RPII and Sabah Electricity on 30 June 2006, as amended by a supplemental agreement dated 16 July 2008 for the sale of generating capacity and electrical energy from the power plant located in Kota Kinabalu Industrial Park, Sabah by RPII to Sabah Electricity. The RPII PPA provides that RPII is to design, own, operate and maintain an electricity generating facility with a nominal capacity of 190 MW, located at Kota Kinabalu Industrial Park, Sepangar Bay, Kota Kinabalu, Sabah (“RPII Facility”) and to generate and deliver electrical energy and make generating capacity available to Sabah Electricity in accordance with the terms and conditions contained in the RPII PPA. The RPII PPA becomes effective on the date all the conditions precedent are fulfilled and shall expire on the 21st anniversary of the COD of the RPII Facility (the “RPII Term”). The RPII Term may be extended at the request of either party, subject to the party giving the other written notice of such request of not less than three years, but not more than four years prior to the expiry of the RPII Term. If the parties fail to agree on the conditions and extension of the RPII Term, at the request of Sabah Electricity, then, RPII shall, at a consideration of RM10.00, transfer the RPII Facility and any other structures and facilities in relation thereto, including the site, to Sabah Electricity. 149 7. BUSINESS OVERVIEW (cont’d) The principal sale and purchase obligations of both RPII and Sabah Electricity are as follows: (i) all test energy generated during the period beginning from the date on which net electrical output is first generated and delivered to the grid system;
(ii) the net electrical output which is generated by the RPII Facility during the period beginning from the COD of the first unit and continuing throughout the RPII Term; and

(iii) the daily available capacity of the RPII Facility during the period beginning from the COD of the RPII Facility and continuing throughout the RPII Term. In situations where the safety or security of the grid system is threatened, RPII is obliged, at the request of Sabah Electricity, to provide electrical energy or generating capacity above the declared daily available capacity and shall, if so requested by Sabah Electricity, reschedule any scheduled outage, maintenance outage and major overhaul outage of the RPII Facility. Notwithstanding the above, Sabah Electricity is entitled not to accept the net electrical output energy from RPII due the following circumstances: (i) the occurrence of an emergency condition as a result of which the grid system is unable to accept the net electrical output;
(ii) during the period where Sabah Electricity conducts maintenance of interconnection facilities, metering equipment or the grid system; or

(iii) where RPII fails to produce net electrical output which meet the agreed specification or electrical characteristic. The RPII PPA provides for Sabah Electricity to pay RPII the following: (i) test energy payment;
(ii) energy payments for the supply of net electrical output available to Sabah Electricity from the RPII Facility, starting from the COD for the first unit. Further energy payments received in respect of the sale of electrical energy are determined by the net energy output delivered to the interconnection point during the billing period. The energy payment consists of fuel cost and variable operating costs. RPII will absorb any additional fuel costs incurred in the event the heat rate exceeds certain guaranteed rate. Conversely, RPII will have to share any fuel cost savings with Sabah Electricity if the power plant operates below the guaranteed heat rates;

(iii) fixed operating payment, starting from the COD for the first unit; (iv) available capacity payment in respect of the daily available capacity, starting from the COD of the RPII Facility; and
(v) a start-ups of the RPII Facility, starting from the COD.

Notwithstanding the above, RPII is required to pay to Sabah Electricity the costs saving it may receive as a result of reduction in the EPC contract price, O&IVI contract price and taxes. This amount shall be placed in an escrow account in the name of Sabah Electricity and in the event RPII incurs any additional cost in the O&M of the 7. BUSINESS OVERVIEW (cont’d) RPII Facility, it may draw such amount in the escrow account to address the additional cost in the O&M of the RPII Facility. Amongst others, anyone of the following shall constitute an event of default by RPII: (i) it fails to comply with any of its obligations under the RPII PPA;
(ii) it applies for or consent to the appointment of receiver, custodian, trustee or liquidators of all or substantial part of its property;
(iii} the licence is revoked, terminated or suspended; or
(iv) any of the following events occur prior to the 7th anniversary of the COD of the RPII Facility without the prior written approval of the Government:
(a) it sells, conveys, transfers or otherwise disposes of the project or any material part or any interest in it to any other person or enters into an agreement to do so; or
(b) any shareholder of RPII sells, transfers or otherwise disposes of any share of RPII or RGSB (including for this purpose the assignment of the beneficial interest therein the creation of any charge or other security interest over, such share or the renunciation or assignment of any right to receive or to subscribe for such share) or any interest in such share or enters into any agreement to do so; or
(c) there is a change in control of RPII.

 

If an event of default occurs and is continuing, the non-defaulting party may terminate the RPII PPA by giving written notice of such breach and the non-defaulting party’s intention to terminate the RPII PPA to the defaulting party. Sabah Electricity also has the step-in-right by written notice to assume operational responsibility for the power plant upon the occurrence and continuance of an event of default. Sabah Electricity’s decision to operate the power plant shall not be seen as a transfer of title or RPII’s obligations as owner. If the RPII PPA is terminated due to RPIl’s default, then Sabah Electricity shall have the option to purchase the project from RPII at a price to be mutually agreed. On the other hand, if RPII terminates the RPII PPA due to Sabah Electricity’s default, then RPII shall have the option to sell the project to Sabah Electricity at a price to be mutually agreed. If there is a change in law which requires RPII to make any material capital improvement or other material modification to the RPII Facility, RPII and Sabah Electricity shall discuss in good faith. Further, in the event the present structure of the electricity industry in Malaysia is revamped due to a setting up of other market system, the parties shall within six months negotiate in good faith the amendments to the RPII PPA to enable full participation by RPII in such restructured market, failing which Sabah Electricity shall be entitled to terminate the RPII PPA and purchase the project from RPII for an agreed price. 7.16.6 Site lease agreement for RPII The agreement is entered into between RPII and Sabah Electricity on 18 December 2008 for the lease of two pieces of land known as (i) Lot 35, located within the 7. BUSINESS OVERVIEW (cont’d) Industrial Zone 4 (IZ4) at the Kota Kinabalu Industrial Park, Kota Kinabalu, Sabah measuring approximately 8.586 acres and (ii) Country Lease No. 015601653 and bearing Land Application No. 2007010138 for the lease period of 23 years commencing from the date the RPII PPA becomes effective. In the event the term for the RPII PPA is extended, then the lease period shall be extended accordingly, but subject to the review of the rental to be mutually agreed by the parties. The rental payable by RPII to Sabah Electricity for the lease shall be RM10 only throughout the duration of the lease. 7.17 Summary of material properties Details of material properties owned, leased or occupied by our Group, including land use rights that are in the process of renewal, are set out in Annexure A of this Prospectus. 7.18 Major licences and permits Details of major licences and permits held by our Group, including licenses or permits that are in the process of renewal, are set out in Annexure B of this Prospectus. 7.19 Relevant laws and regulations governing our business Details of the relevant laws and regulations governing our business are set out in Annexure C of this Prospectus. 7.20 Intellectual property Our subsidiary RWT holds the trademark for “REVOCELL” and “REVOPLUS” in relation to certain water filter and water purification usages. Except as disclosed above, as at the LPD, we do not have any brand names, patents, trademarks, technical assistance agreements, franchises and other intellectual property rights. 7.21 Training and development programmes We provide our employees with continuous training and development to enhance their skills and knowledge, with recommended courses, conferences, seminars and other training programmes. Some of the training programmes include teambuilding courses, management courses, industrial, safety and health programme and human capital development programme.

 

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