Report of the Board of Commissioners

With high enthusiasm, we are committed to maintaining open and continuous communication with all stakeholders. Apart from that, we will continue to be commmitted and fulfill our functions and responsibilities as supervisor with full dedication. In line with this, the Board of Commissioners hopes that this Annual Report can serve as a comprehensive reference for shareholders and all stakeholders to comprehend the extent of the Company's progress in the challenging year of 2023.

According to the World Economic Situation and Prospects as of mid-2023 provided by the United Nations (UN), the prospects for a strong global economic recovery remain weak amid rising inflation, interest rate hikes, and increasing uncertainty. Furthermore, the world economy faces risks of prolonged periods of low growth due to the prolonged impact of the COVID-19 pandemic, worsening climate change impacts, and unresolved structural challenges in macroeconomic economics. Based on the report, the world economy is now projected to grow by 2.3% in 2023 (+0.4 percentage points from the January estimate) and 2.5% in 2024 (-0.2 percentage points), a slight increase in the global growth forecast for 2023. In the United States, household spending has pushed the growth forecast up to 1.1% in 2023. The European Union's economy - driven by lower gas prices and strong consumer spending - is now projected to grow by 0.9%. China's growth this year is expected to reach 5.3% as a result of the lifting of COVID-19-related restrictions.

In line with global economic developments, the national economy also faces similar challenges with various impacts, including economic slowdown, increased geopolitical tensions, inflation risks, and climate change. According to the Coordinator of the Indonesian Economy, National economic growth in the fourth quarter of 2023 recorded a convincing figure, at 5.04% (yoy). This result indicates an increase compared to the third quarter of 2023, which stood at 4.94% (yoy). Overall, national economic growth in 2023 recorded a figure of 5.05% (ctc).

This solid growth figure can be achieved with the support of several sectors. Bank Indonesia (BI) stated that economic growth next year is expected to increase in the range of 4.7-5.5%. This increase assumption is made based on domestic dynamics such as the conduct of General Elections and increased investment interest along with the development of National Strategic Projects (PSN), including the National Capital Region (IKN).

From the financial perspective, the Board of Commissioners is of the opinion that the performance demonstrated by the Board of Directors has been sufficiently optimal but still has room for improvement. Throughout 2023, the Company's efforts to achieve the gross profit target of the RKAP faced many challenges caused by several factors, such as Revenue that had not been properly absorbed, increase in material prices, especially iron and diesel, increase in indirect cost of contract expenses caused by project completion delays and increase in IDC as a result of unrealized Turnkey project payments (bocimi).

Then from the operational perspective, the Company also faced many challenges that hampered the Revenues of Business Unit. Various factors affecting the Company's operational performance hurdles, including a decrease in revenues caused by vendor productivity not reaching targets due to financial constraints, uncleared land and project tenders being postponed. The Board of Commissioners considers that the Winning War Room (“WWR”) Program, which aims to optimize the tender process and ensure that all technical requirements are met with a minimum Winning Rate of 25.1%, is a good effort to respond to these challenges.

Through this assessment, the Board of Commissioners can provide constructive feedback to the Board of Directors to improve overall performance of the Company. This is expected to create a transparent and accountable framework in carrying out corporate functions and ensure long-term business sustainability. The Board of Commissioners also expresses its gratitude to the Board of Directors who have shown high loyalty to the Company amidst the less conducive conditions in 2023, while remaining dedicated to the Company’s development. We hope that the current composition of Board of Directors will be able to bring Waskita to better achievements for sustainable growth, while still paying attention to the principles of Good Corporate Governance (GCG).

In carrying out its supervisory and advisory functions to the Board of Directors, the Board of Commissioners adhered to the Board Manual and Work Guidelines of Board of Commissioners. The supervisory functions of Board of Commissioners are divided into two levels:

1. Performance Level
   Board of Commissioners oversees by providing guidance and instructions to the Board of Directors and providing input to the General Meeting of Shareholders (GMS).
2. Conformance Level
   The Board of Commissioners conducts further supervisory activities to ensure that advice has been implemented and that the provisions of applicable laws and the Company's Articles of Association have been complied with.

In 2023, the Board of Commissioners’ oversight over the formulation and implementation of the Company's strategies was conducted through working relationship with the Board of Directors. This oversight was conducted through joint meetings and meetings of Board of Commissioners that invited Board of Directors members. Throughout 2023, the Board of Commissioners focused on supervising several aspects of the Company's performance, especially in financial matters. The Board of Commissioners continuously supported the Company's efforts to restructure debt and restore the financial health of the Company.

As an organ responsible to carry out the supervisory and advisory function on the management of the Company, the Board of Commissioners conducted review process and approval of all strategies and policies outlined in the RKAP and RJPP. The Board of Commissioners periodically reported the results of its oversight to the GMS, including in the event of a significant decline in the Company's performance.

Based on its functions and duties, the Board of Commissioners actively supervised the formulation of strategies and strategic policies by the Board of Directors outlined in the RKAP and RJPP. Alongside this, the Board of Commissioners also supervised the implementation of strategies and strategic policies throughout 2023.

The Board of Commissioners assessed that the Board of Directors and all levels of management had formulated and implemented strategies and strategic policies in line with the situations faced by the Company throughout the year. Regarding this matter, the Board of Commissioners evaluated that the formulation of strategies and strategic policies applied could optimize every existing opportunity. The Board of Commissioners evaluated that the implementation of strategies and strategic policies had been carried out by considering the advice given, based on the working relationship between Board of Commissioners and Board of Directors.

The advisory function has been carried out by the Board of Commissioners throughout 2023 based on the results of monitoring on strategy implementation, as well as internal and external dynamics faced by the Company. Until December 31, 2023, the Board of Commissioners has ensured that its advisory function to the Board of Directors includes 2 (two) levels, namely the implementation of providing advice (Performance Level) and monitoring the follow-up to advice that has been delivered (Conformance Level).

In providing advice to the Board of Directors, the Board of Commissioners held joint meetings with the Board of Directors, which were held 20 (twenty) times or more than the number of Internal Board of Commissioners Meetings by inviting members of Board of Directors as planned in the Board of Commissioners’ Work Plan and Budget (RKA). In addition, the Board of Commissioners has held work meetings inviting of Board of Directors members for 20 (twenty) times or exceeding the number of Internal Board of Commissioners Meetings by inviting Board of Directors members as planned in the Board of Commissioners' Work Plan and Budget (RKA).

The Board of Commissioners has reviewed the business prospects prepared by the Board of Directors. Based on this review, the Board of Commissioners sees that the prospects have considered the conditions of global and national economic developments, as well as assumptions about industry dynamics that may affect the Company's performance.

With massive infrastructure development undertaken by the Government, the Company believes that 2024 and the years ahead will be filled with various opportunities. Based on this optimism, the Board of Commissioners believes that the Company has promising business prospects in 2024 to revitalize its performance. The Board of Commissioners will continue to monitor the Board of Directors’ performance, particularly in ensuring resource readiness and preparing the Company to actively contribute to national infrastructure development.

In this regard, the assessment provided by the Board of Commissioners represents the interests of all stakeholders. The Board of Commissioners also reaffirms that the strategies devised by the Board of Directors have been carefully analyzed and align with the Company's long-term objectives. As part of the efforts to create a solid foundation for decision-making, the Board of Directors will continue to rigorously and comprehensively oversee the performance of the Board of Directors.

The Board of Commissioners believes that the implementation of GCG principles has been carried out effectively and comprehensively. Apart from that, the implementation of GCG is also strong evidence of the integrity and transparency of the Company's operations. The Board of Commissioners also assesses that the Company has played an active role in implementing GCG through the use of a Whistleblowing System mechanism that complies with the latest regulations and conforms to the ISO 37001:2016 Anti-Bribery Management System standard. By being determined about implementing GCG, the Board of Commissioners hopes that the Company can create a more accountable, ethical and competitive environment and build public and stakeholder trust in responsible management of the Company.

A positive assessment from the Board of Commissioners not only reflects the favorable performance of Board of Directors and all levels of management, but also reflects the integrity and trust embedded in the Company's culture. This strengthens stakeholder confidence, enhances the Company's reputation, and creates a solid foundation for long-term growth. Thus, positive feedback from the Board of Commissioners regarding the implementation of Good Corporate Governance is not only a form of appreciation, but also an encouragement to continue to improve standards and better corporate practices in the future.

The Board of Commissioners' assessment over the Secretary of Board of Commissioners was carried out based on the effectiveness of its functions throughout 2023. The Board of Commissioners assessed that the Secretary of Board of Commissioners had carried out its functions and responsibilities well, thereby providing added value to the Board of Commissioners. Based on this assessment, the Board of Commissioners stated that the Secretary of Board of Commissioners had made comprehensive contribution to increasing the effectiveness of the Board of Commissioners' performance. Based on the Board of Commissioners’ assessment, the Audit Committee has provided recommendations regarding the review of financial information, the effectiveness of internal control system, and evaluation of audit results carried out by independent auditors. The Audit Committee effectively carried out its duties and responsibilities in accordance with the 2023 work plan. In this case, the Audit Committee has also fulfilled the number and level of attendance at meetings in accordance with applicable regulations.

In 2023, the Risk Management Committee has effectively supervised the implementation risk management within the Company and ensure improvements to the adequacy of risk management as a whole. This effort shows that the Risk Management Committee has succeeded in realizing its duties and responsibilities in accordance with the work plan that has been established for 2023. In addition, the Board of Commissioners observed that the Risk Management Committee has fulfilled the number and level of attendance at meetings in accordance with applicable regulations.

The Nomination and Remuneration Committee's duties and responsibilities are considered to have been carried out optimally, especially regarding the supervision of the Company's talent management and succession management system. The Nomination and Remuneration Committee has successfully realized its duties and responsibilities in accordance with the work plan that has been prepared for 2023. This assessment also shows that the Nomination and Remuneration Committee has met the number and level of attendance at meetings in accordance with applicable regulations.

Overall, the committees under the Board of Commissioners have carried out their functions and responsibilities well. For this reason, the Board of Commissioners extends its deepest appreciation to all supporting organs for the contributions that have been made. Through these positive results, the Board of Commissioners will continue to improve the effectiveness and efficiency of its performance, in order to support the Company to achieve its goals.

Through this report, please allow us to convey the results of hard work and dedication demonstrated by all the Company People. With the support of all parties involved, the Board of Commissioners hopes that the Company can enhance its achievements and financial as well as operational performance in the future.