Board of Commissioners Report

Dear Shareholders and stakehoders,

Praise and gratitude we pray to God the Almighty, Most Gracious, and Most Merciful. May His blessings and grace always be bestowed upon us.

The Board of Commissioners is grateful that the Company has successfully passed 2021 amid global and national economic conditions that are still full of vigilance due to the ongoing Covid-19 pandemic. I represent the Board of Commissioners of PT Wijaya Karya Beton Tbk; it is an honor to present the 2021 Annual Report.

As we all know, 2021 is a year full of challenges that require high adaptability to deal with them. This year, several periods astonished the entire world population as a new variant of Covid-19, which significantly impacted global and national economic movements. This condition causes many dynamics at home and abroad, such as energy scarcity, super commodity cycles, and economic uncertainty.

Overall, the global and national economy’s pace still faces uncertain conditions. The International Monetary Fund (IMF) noted that world economic growth closed at 5.09 percent, up -3,1 percent from the previous year (year on year).

On the other hand, the Indonesian Central Statistics Agency noted that the Indonesian economy in 2021 grew by 3.69 percent, higher than the achievement in 2020, which experienced a growth contraction of 2.07 percent. In terms of production, the highest growth occurred in the Health Services and Social Activities Business Field of 10.46 percent. Meanwhile, in terms of expenditure, the Export Component of Goods and Services achieved the highest growth at 24.04 percent.

Amid these conditions, the infrastructure development sector remains one of the critical drivers of the economy. The economic recovery and infrastructure projects that continue amid the Covid-19 pandemic also impact the performance of issuers engaged in the construction sector. Moreover, the current government prioritizes the public construction sector for equitable development and the national economy, likewise with the concrete industry, which prompted the government’s initiative to strengthen infrastructure and property supporting industries. The Ministry of Industry also continues to encourage the development and competitiveness of the material industry as a sector that helps infrastructure and property development in the country.

The Board of Commissioners is of the view that the Board of Directors has carried out its duties and obligations well. The Board of Directors has demonstrated a strong capacity in implementing the right strategies and breakthroughs to deal with various dynamics throughout 2021.

Assessment of the Performance of the Board of Directors and the Basis for the Assessment

Considering various aspects that will occur in 2021, the Board of Commissioners is of the view that the Board of Directors has carried out its duties and obligations well. The Board of Directors has demonstrated a strong capacity in implementing the right strategies and breakthroughs to deal with various dynamics throughout 2021.

It was evidenced by realizing a new contract turnover of Rp5.21 trillion. The company also managed to record a positive profit and cash flow where Operating Revenue was recorded at Rp4.31 trillion, a decrease of 10.21% compared to the gain in 2020 of Rp4.80 trillion. Most of the Operating Revenues still came from the concrete segment, with 84.81% of the overall operating income. In addition, The data recorded a profit for the Year of the Company at Rp81.43 billion, a decrease of 33.87% compared to the gain in 2020 of Rp123.15 billion.

As of December 31, 2021, the company’s total assets experienced an increase of Rp. 8.93 trillion or an increase of 4.93% compared to the previous year of Rp8.51 trillion. Meanwhile, Total Equity in 2021 was recorded at Rp3.45 trillion, an increase of 1.69% compared to the prior year of Rp3.39 trillion. The operating cash flow in 2021 was positive at Rp44.40 billion, so the company’s overall cash and cash equivalents increased by Rp196.67 billion or 12.75% compared to the previous year.

Not only from the financial and operational aspects, but the Board of Directors has also succeeded in bringing the company to make proud achievements. Several significant appreciations received by the company in 2021 were the Best Tbk Company III in the Innovation and Technology Category organized by Top Business Magazine, Silver Winner in the 2021 SNI Award held by the National Standardization Agency, and Silver Winner in Technology Enhancement in the BUMN and Tbk Category which organized by BUMN Track.

The Board of Commissioners appreciates the performance of the Board of Directors in terms of achieving the 2021 RKAP and KPI during conditions that still require high adaptation. In the view of the Board of Commissioners, the Board of Directors carried out their duties properly according to their respective fields of responsibility. The Board of Commissioners also views that the members of the Board of Directors have excellent cooperation to achieve the company’s targets optimally. Although, over time, the challenges that emerged throughout the year were constantly changing and unpredictable, the Board of Directors was able to respond well to this by formulating and implementing targeted breakthroughs.

The Board of Commissioners evaluates the performance of the Board of Directors, which includes operational, financial, and other aspects that are closely related to the sustainability of the company’s business activities. The basis for the assessment carried out by the Board of Commissioners includes Key Performance Indicators (KPI), which have been mutually agreed upon between the Board of Commissioners and the Board of Directors and are an integral part of the 2021 Company Work Plan and Budget.

The basis for this assessment has been mutually agreed upon between the Board of Commissioners and the Board of Directors since it determined the strategic policy formulation process. In its implementation, the Board of Commissioners always ensures conducive two-way communication with the Board of Directors to execute every strategic policy in a targeted and targeted manner.

Supervision in Strategy Formulation and Implementation

The Board of Commissioners has tried its best to ensure strategy formulation and implementation oversight throughout 2021. It is in line with the role of the Board of Commissioners to ensure that strategy formulation is adjusted to the company’s capacity and that its implementation is on the right track without compromising compliance with applicable regulations.

In conducting a careful evaluation and assessment regarding operational and financial performance, the Board of Commissioners asks the Board of Directors to continue improving the company’s overall performance. Matters of particular concern are related to aspects of efficiency, discipline, control, and strict supervision across all company lines. More specifically, this is stated in the Company’s Work Plan and Budget (RKAP) 2021.

For the company’s achievement of the targets set, the company achieved a health level score of 70 in 2021, with the category “HEALTH A,” based on the Decree of the Minister of SOEs No.KEP-100/MBU/2002 dated June 4, 2002, concerning Assessment of the Health Level of State-Owned Enterprises. This achievement has succeeded in meeting the company’s targets previously set in the 2021 RKAP.

The Board of Commissioners appreciates the efforts of the Board of Directors, who have succeeded in overseeing the performance in 2021 by implementing various strategic policies that focus on encouraging positive performance in the transition period. The Board of Commissioners supports one of the company’s main strategies, namely efficiency efforts (cost reduction) in all fields. Through this strategy, the company has succeeded in finding more efficient operational processes and increasingly competitive products.

The Board of Commissioners also underlined that digitalization efforts in 2021 have accelerated digitalization and automation to reduce production costs. The company was awarded the Top Digital Implementation #Level Stars 4 and Top Leader on Digital Implementation held by IT Works for these efforts.

Frequency and Method of Giving Advice to the Board of Directors

Throughout 2021, the Board of Commissioners maintained the intensity of delivering advice and recommendations to the Board of Directors in line with the ongoing pandemic. The recommendations are conveyed through two types of mandatory meetings held every month. The first meeting is an internal meeting of the Board of Commissioners, and the second is a joint meeting of the Board of Commissioners and the Board of Directors.

The Board of Commissioners holds an internal meeting of the Board of Commissioners to formulate approvals on requests for recommendations submitted by the Board of Directors. In a pandemic condition that limits the implementation of face-toface meetings, the Board of Commissioners optimizes the use of digital platforms and submits recommendations informally. This effort is made to respond to urgent issues and decisions that it must make quickly. Furthermore, the offer will be determined through a formal meeting. In addition, the Board of Commissioners also held discussions and interviews with the Board of Directors in which the Board of Commissioners asked the Board of Directors to provide explanations regarding all issues that require special attention.

Throughout 2021, joint meetings of the Board of Commissioners and the Board of Directors were held 12 (twelve) times and officially documented through the official minutes of the meetings of the Board of Commissioners and the Board of directors’ meetings.

Assessment of the Performance of the Supporting Committees of the Board of Commissioners

In 2021, the Company decided that the Nomination and Remuneration Committee be merged into one unit with the GCG Committee. It is done to simplify the structure of the Supporting Organs of the Board of Commissioners. Based on Letter Number 02/DK-KGCG/WB/VI/2021 dated June 10, 2021, Regarding the Review Report of the Board of Commissioners Committee on the Establishment of the Nomination, Remuneration, and GCG Committee, there is a study on the Establishment of the Nomination, Remuneration, and GCG Committee conducted by all Supporting Organs The Board of Commissioners, namely the Audit & Business Risk Committee, the Nomination & Remuneration Committee, and the GCG Committee. Thus, the Supporting Committee for the Board of Commissioners as of December 31, 2021, consists of the Audit and Business Risk Committee and the Nomination, Remuneration, and GCG Committee.

The Audit and Business Risk Committee has carried out its responsibilities in assisting the Board of Commissioners in evaluating the effectiveness of internal controls carried out by internal and external auditors. In addition, the Audit and Business Risk Committee has also provided recommendations regarding the review of financial information, risk management implementation activities, and the results of internal audits by the Internal Audit Unit and external auditors by the Public Accounting Firm (KAP). Meanwhile, the Nomination, Remuneration, and GCG Committee has carried out activities to organize the nomination process for the Board of Directors and propose remuneration for the Board of Commissioners and Board of Directors.

In 2021, the Board of Commissioners viewed that the two supporting organs of the Board of Commissioners have carried out their functions well and have provided constructive input and direction to the Board of Commissioners. Both committees have shown optimal performance in conducting a thorough review of the Company’s business activities in operational, financial, risk management, remuneration systems, control systems, and overall GCG implementation. The identified findings have been followed up and become recommendations for monitoring in the coming year.

Views on Business Prospects Prepared by the Board of Directors

Year 2022 will be a critical period as a turning point for the national economic recovery from the impact of the Covid-19 pandemic. All countries worldwide, including Indonesia, are trying their best to respond with various policies to handle Covid-19. Optimism towards the success of the vaccination program and global and national economic recovery are essential factors in viewing the prospects for the world and domestic economies in 2022.

The Board of Commissioners appreciates the optimism of the Board of Directors, who stated that there are still many potentials and business opportunities that it can utilize to support the development and growth of the Company. The Board of Commissioners fully approves and supports all the efforts of the Board of Directors to take advantage of existing business opportunities based on professional management of the Company and good corporate governance. Against projections that promise better prospects, the Board of Commissioners encourages the Board of Directors to always be adaptive to changes and sensitive to market opportunities that are open to taking full advantage of all opportunities optimally.

The Board of Commissioners has evaluated all business prospects of the Board of Directors as outlined in the 2022 RKAP. The Board of Commissioners considers that the formulated strategy is appropriate to face the challenges and opportunities open in the coming year. The methods included in it have been approved by all members of the Board of Commissioners and considered appropriate to anticipate all challenges in the next year and lead the Company towards better growth.

Views on the Implementation of Good Corporate Governance

The Company always prioritizes Good Corporate Governance (GCG) practices to create a management system that supports business success and accountability. The Company continues to implement fundamental principles related to the implementation of GCG principles, consisting of 5 (five) principles, namely Transparency, Accountability, Responsibility, Independence, and Fairness. Applying solid GCG principles will increase investor confidence and become an added value for other stakeholders.

In 2021, the Board of Commissioners also underlined the implementation of GCG in the Company, especially in the control and risk management functions. It is still related to the ongoing pandemic conditions, so the Board of Commissioners continues to strengthen awareness of potential risks that may arise. Together with the supporting committees, the Board of Commissioners evaluates risk management by considering the main issues and internal and external assumptions in developing an integrated and adequate risk management framework and practice.

Every year, the achievement of the Company’s GCG score illustrates an increasingly effective and optimal governance. Through all existing GCG tools, the Company is optimistic to actualize a better GCG implementation. The Corporate Governance performance assessment process that has been implemented covers various aspects of governance throughout 2021. Based on the evaluation conducted on these aspects, the Company managed to achieve a score of 88.48 in the “Very Good” category.

The Board of Commissioners gives a high appreciation for the commitment of the Board of Directors in implementing GCG principles on an ongoing basis. The Board of Commissioners hopes that implementing these principles will enable the Company to take further steps to realize its vision, mission, and long-term targets that have been set.

Views on the Implementation of the Whistleblowing System

WIKA BETON is committed to creating a clean and responsible work environment. To that end, the Company implements a Whistleblowing System (WBS) to avoid and reduce the possibility of fraud.

The Board of Commissioners is actively involved and oversees the effectiveness of the WBS implementation in the Company. The mechanism for reporting irregularities or violations starts from the reporting process. Each report received in WBS will be processed by the GCG Compliance Team with the involvement of the Board of Directors and Commissioners as decisionmakers on the information.

In 2021, there were no reports of violations submitted thorough WBS. It indicates that employees reported no irregularities or breaches to the Gratification Reporting and Complaints Management Team throughout 2021.

The Board of Commissioners encourages all elements of the Company to optimize the implementation of effective violation reporting. To ensure that every employee of the Company is aware of WBS policies, mechanisms, and procedures, the Company routinely provides WBS socialization to all employees, either by optimizing internal communication media or utilizing management and employee meetings as a means of socialization. It is considering the significance of the violation report, which can be input for the Company to be more observant of the potential deviations that can negatively affect it. It must carry out socialization and improvement continuously to improve the involvement of internal and external parties to encourage the Company’s performance to be more transparent and well supervised.

Changes in the Composition of Members of the Board of Commissioners and Reasons for the Changes

On this occasion, the Board of Commissioners would like to convey that there have been several changes to the composition of the Board of Commissioners in 2021. The changes occurred in line with the Annual General Meeting of Shareholders (AGMS) and Extraordinary General Meeting (EGM).

The decision of the 2020 Fiscal Year Annual GMS dated 28 May 2021 approved the honorable dismissal and appointment of the following names as members of the Company’s Board of Commissioners:

Name Position Basis of Dismissal / Rapture
Herry Trisaputra Zuna Commissioner Honorable Discharge for Mr. Herry Trisaputra Zuna as stated in the Deed No.04 dated June 3, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta
R. Permadi Mulajaya Commissioner Honorable Discharge for Mr. R. Permadi Mulajaya as stated in the Deed of Statement of GMS Resolution No. 04 dated June 03, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.

Meanwhile, the decision of the Extraordinary GMS (EGMS) held on October 6, 2021, approved the honorable discharge and appointment of the following names as members of the Company’s Board of Commissioners:

Name Position Basis of Dismissal / Rapture
Heru Wisnu Wibowo Commissioner Honorable Discharge for Mr. Heru Wisnu as stated in the Deed of Statement of GMS Resolution No. 09 dated October 12, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Harno Trimadi Commissioner Appointed Mr. Harno Trimadi as stated in the Deed of Statement of GMS Resolution No. 09 dated October 12, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.

Accordingly, the composition of the Company’s Board of Commissioners as of October 12, 2021, is as follows:

Name Position Basis of Dismissal
Ade Wahyu President Commissioner Deed of Statement of GMS Resolution No. 13 dated August 12, 2020 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
R. Permadi Mulajaya Commissioner Deed of Statement of GMS Resolution No. 04 dated June 03, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Harno Trimadi Commissioner Deed of Statement of GMS Resolution No. 09 dated October 12, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Priyo Suprobo Independent Commissioner Deed of Statement of GMS Resolution No. 21 dated April 09, 2019 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Indrieffouny Indra Independent Commissioner Deed of Statement of GMS Resolution No. 19 dated April 09, 2020 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.

Changes to the composition of the Board of Commissioners were made as a follow-up to the resolutions of the General Meeting of Shareholders, which was agreed upon by the majority of shareholders present. The Board of Commissioners is optimistic that the diversity in the current composition will provide added value in implementing the Company’s supervisory function.

On December 22, 2021, Mr. Ade Wahyu submitted his resignation as President Commissioner of the Company because he was appointed as Director of Finance & Risk Management at PT Jasa Marga (Persero) Tbk by the resolution of the EGMS of PT Jasa Marga (Persero) Tbk on December 22, 2021. December 22, 2021.

By the Decision of the Board of Commissioners outside the Meeting No. SK.08/DK-WB/XII/2021, dated December 22, 2021, it was decided that Mr. Priyo Suprobo was appointed as Plt. President Commissioner of the Company.

Therefore, the composition of the Board of Commissioners as of December 31, 2021, is as follows:

Name Position Basis of Appointment
Priyo Suprobo Acting President Commissioner Decree of the Board of Commissioners Outside the Meeting of PT Wijaya Karya Beton Tbk Number SK.08/DK-WB/XII/2021 dated December 22, 2021.
R. Permadi Mulajaya Commissioner Deed of Statement of GMS Resolution No. 04 dated June 03, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Harno Trimadi Commissioner Deed of Statement of GMS Resolution No. 09 dated October 12, 2021 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Indrieffouny Indra Independent Commissioner Deed of Statement of GMS Resolution No. 19 dated April 09, 2020 drawn up before Ir. Nanette Cahyanie Handari Adi Warsito, S.H., Notary in Jakarta.
Our Appreciation

The year 2021 increasingly shows the resilient character of WIKA BETON. For this reason, the Board of Commissioners expresses its highest appreciation to the Board of Directors and management who have succeeded in bringing the company to a good performance.

There is no exception to all PT Wijaya Karya Beton Tbk employees, who have worked hard and pushed the company to be more competitive. The Board of Commissioners also expresses its appreciation and gratitude to all Shareholders for their aspirations and support to achieve the best performance for all stakeholders.

Let’s face the future with a determination to grow sustainably and make a positive contribution to the concrete industry’s best company. Together we instill optimism to record a brilliant performance on a national and international scale. May God Almighty always give us the strength to reach our aspirations and visions.

On behalf of the Board of Commissioners,

Priyo Suprobo

Act. President Commissioner/Independent Commissioner