Message from the President Commissioner

Reports of Commissioners

Dear Respected Shareholders and Stakeholders,

Please allow us to express our gratitude to God Almighty for the performance of PT AKR Corporindo Tbk, which has gone through many challenges whilst carrying out its business activities in the supply chain and logistics industry. During 2022, the Board of Commissioners carried out its supervisory functions and duties and provided advice on the strategies and policies carried out by the Board of Directors when conducting the Company’s business with full responsibility, as mandated in the Company’s Articles of Association and applicable laws and regulations.

When carrying out its duties, the Board of Commissioners also ensured that when carrying its operational activities, the Company referred to the established Business Plan, and ensured compliance with all applicable laws and regulations. We always strive to ensure the Company is managed professionally, in accordance with the interests of shareholders and other stakeholders.

When carrying out its role, the Board of Commissioners maintains objectivity and independence. Therefore, it is not involved in making operational decisions for the Company, except for matters regulated and stipulated in the Company’s Articles of Association and laws and regulations.

In this report, we will report on our assessment of the Board of Directors’ performance, our supervision of the strategy implemented, views on business prospects prepared by the Board of Directors as well as the implementation of good corporate governance carried out by the Company during 2022

Economic Condition  in 2021

The geopolitical conflict between Russia and Ukraine that has continued since the beginning of 2022 had a huge impact on the global economy throughout 2022. This conflict caused disruption to global supply chains resulting in spikes in energy commodity prices, especially for oil and gas, and has driven up global inflation. The International Monetary Fund (IMF) predicted that the global economy would only grow by 3.4% in 2022, much lower than the previous year’s growth of 6.0%.

The Indonesian economy was not spared, but nevertheless, was relatively more resilient, as demonstrated in the economic growth in 2022 which reached 5.31%, higher than the previous year’s 3.70%. Indonesia’s economic growth was mainly supported by domestic demand and excellent export performance, where the trade balance of USD 54.46 billion was its largest surplus in history.

These economic conditions also impacted the Company’s performance and business strategy in 2022, due mainly to soaring oil prices and supply chain disruptions that had a direct impact on the Company’s business sectors.     

Board of Directors’ Performance Assessment

Overall, AKR showed good resilience in 2022. This was considered when evaluating the Board of Directors performance. After viewing the financial and non-financial conditions, the Board of Commissioners is of the opinion that the steps taken by the Board of Directors were appropriate.

The Board of Commissioners is of the opinion that the Board of Directors took effective steps to overcome the existing challenges. The Company has a competitive advantage in the form of a strong and proven business model, and the Board of Directors has consistently carried out and strengthened the Company’s business model by implementing appropriate digitization programs to increase the Company’s resilience in the face of the business challenges.

The Board of Commissioners also considers that the Board of Directors has succeeded in maintaining the stability and healthy growth of the Company’s business, as well as maintained the trust of stakeholders through its many strategic innovations and initiatives, which have also been outlined in the short, medium and long-term business plans. The Board of Commissioners also considers that the Board of Directors and all of the Company’s Management levels have used the industry challenges as opportunities to continue to improve the Company’s performance.

During these challenging economic conditions, AKR recorded an encouraging financial performance. The Company’s revenue increased to Rp47,540 billion while net profit grew by 116% to Rp2,403 billion. The Company’s total assets also increased by 16% to Rp27,188 billion. Overall, this performance was above the target set by the Company for 2022.

The Board of Commissioners also appreciates the strategic steps taken by the Board of Directors throughout 2022. The Company was able to optimize the potential of its retail and industry fuel distribution business despite soaring world oil prices. Likewise in the industrial estate segment, the Company sold a record 44.5 hectares in JIIPE, which officially operates as a Special Economic Zone.

In addition, the Board of Commissioners also appreciates the steps taken by the Company to pay great attention to the environmental, social and governance (ESG) aspects. This shows that the business development strategy implemented by the Board of Directors is not only oriented in the shortterm, but also in the long-term to ensure the Company’s sustainability. The establishment of the ESG Committee is the right step to assisti the Board of Directors and the

View on the Business Prospects Prepared by The Board of Directors

Implementation of the Good Corporate Governance (GCG) principles at AKR, guided by the principles of Transparency, Accountability, Responsibility, Independence and Fairness (TARIF), has been carried out well.

The Board of Commissioners’ view is that the Company has made optimal efforts to continuously improve the quality of GCG implementation, by setting high quality standards based on the ASEAN Corporate Governance Scorecard. The Company is adjusting the structure and governance mechanisms according to these standards, including the Company’s internal policies.

The Board of Commissioners is of the opinion that the implementation of good and consistent GCG principles will provide positive value for the Company and increase our stakeholders’ trust. Therefore, the Board of Commissioners supports the efforts made by the Board of Directors to continuously improve the quality of GCG implementation.

Part of AKR’s GCG implementation is the availability of a whistleblowing system (WBS). The Board of Commissioners considers the WBS as a step towards preventing any fraud within the Company. The Board of Commissioners and the Audit Committee carefully monitors the WBS and our assessment is that the WBS is running properly.

However, the Board of Commissioners continues to remind the Board of Directors to socialize the WBS and its implementation mechanism so that this system will run better and provide optimal benefits for the Company.

View on Good Corporate Governance Implementation

On the implementation of corporate governance (GCG) in 2022, the Board of Commissioners generally sees a strong commitment from the Board of Directors and AKR’s management as a whole to improve the quality of governance within the Company. This can be seen from the results of the assessment of the Good Corporate Governance (GCG) implementation based on the ASEAN Corporate Governance Scorecard criteria that scored 84.45 with the predicate “Good”.

Comprehensive GCG implementation is a challenge for all Company employees so consistent assistance is required from the Board of Commissioners to ensure the implementation effectiveness in every line of business in the Company and its subsidiaries. In this area, the Board of Commissioners encourages compliance and internal control to be implemented seriously, not only at the head office, but also in all business units of the Company in order to build an organization with integrity and accountability. The Board of Commissioners considers that GCG was one of the factors that enabled the Company to achieve very satisfactory results in 2022. Therefore, the Board of Commissioners encourages the Board of Directors to continuously improve the quality of GCG implementation in accordance with applicable laws and best practices.

The Board of Commissioners would also like to encourage the Board of Directors to continue to improve the implementation of the whistleblowing system (WBS), which is one of the Company’s efforts to prevent fraud involving Company personnel at all levels. The Board of Commissioners and the Audit Committee closely monitor the WBS and our assessment is that it has functioned properly.

When supervising the WBS function, the Board of Commissioners through the Audit Committee always conducts regular reviews with the IAU on the implementation of the WBS and the follow up on reports received. Reports proven to be true based on audit results are followed up

Appreciation

We understand that AKR’s performance and all of its achievements in 2022 could not have been possible without the support provided by all stakeholders. Therefore, the Board of Commissioners would like to express its deepest gratitude to the shareholders, business partners, employees and other stakeholders for their trust and support. We would also like to congratulate the Board of Directors on maintaining the business performance and for recording a solid financial performance, as well as to all the subsidiaries who contributed to the Company’s performance during challenging times and against intense competition.

This is a continuous process, and the Board of Commissioners will continue to mandate that management and all employees work together and synergize with all other stakeholders, to produce the best service that exceeds customer expectations. In this area, the Board of Commissioners is committed to increasing its supervision and assistance to support the strategic steps prepared by the Board of Directors, we hope that all of the Company’s people will always work optimistically for the progress of the Company