Report of the Board of Commissioners

Mohammad Zainal Fatah

President Commissioner

Dear Esteemed Shareholders and Stakeholders,

We give our praise and gratitude to Allah SWT for it is only by His grace and favor can the Board of Commissioners report the implementation of its duties and responsibilities in overseeing and providing advice to the Board of Directors in the management and development of the Company throughout 2022. Supervision that we carry out independently, carefully, effectively and focused on achieving the targets of the 2022 Corporate Budget Work Plan (RKAP) which is in the direction of achieving the main objectives of the 2021-2025 Corporate Long Term Plan (RJPP), and by upholding and implementing the principles -principles of good corporate governance (GCG) in a consistent and sustainable manner.

Implementation of Assessment, Supervisory, and Advisory Activities by the Board of Commissioners on the Performance of the Board of Directors

The arrangement of duties and responsibilities of each member of the Board of Commissioners also refers to the Decree of the Board of Commissioners No. KEP079/IX/2021 dated September 21, 2021. Implementation of duties and obligations in supervising and providing advice to the Board of Directors in their management of the Company began with discussing, approving and establishing the annual work program of the Board of Commissioners for 2022 at the Board of Commissioners meeting on January 19, 2022. Program work was used as a guideline in holding meetings of the Board of Commissioners, without ruling out the possibility of holding a Special Meeting with new meeting agendas in accordance with the operational needs and dynamics of the Company as well as the development of situations that require discussion and decisions of the Board of Commissioners.

Apart from the Board of Commissioners’ internal meeting forums and Board of Commissioners-Directors coordination meetings, the supervision of the Board of Commissioners was also carried out through working visits to Regions and toll road concession business line subsidiaries both in the construction phase and already in operation, operating and operational business line subsidiaries, as well as prospective line of business subsidiaries.

“The Board of Commissioners has always carried out its oversight function to ensure that the management of the Company by the Directors is in accordance with applicable laws and regulations whilst providing the necessary recommendation for every strategy implemented to achieve the Company’s goals.”

In 2022, fourteen Board of Commissioners meetings were held with a 90% attendance rate for Commissioners and twelve Board of Commissioners-Directors coordination meetings with a Board of Commissioners attendance rate of 94%. Meeting decisions were taken by deliberation to reach a consensus and so far there has never been a meeting decision with a “dissenting opinion”. Until the end of 2022 almost all meeting decisions (± 99%) have been followed up. In addition, the Board of Commissioners made eight working visits to APJT and toll road projects to encourage the achievement of predetermined targets.

The implementation of assessment, supervision, and advisory activities by the Board of Commissioners include the following:

Assessment on the Performance of Board of Directors and Supervision on Company Management

In order to carry out strict supervision of the performance of the Board of Directors in managing the Company amidst the still turbulent COVID-19 pandemic which began to subside in early Quarter IV 2022, the Board of Commissioners continued to monitor the Company’s performance intensively through in-depth review and discussion of the Company’s monthly and quarterly performance reports. In addition, The Board of Directors were expected to ensure business efficiency by reducing operating expenses and reducing interest expenses, as well as increasing the effectiveness of operational management. In line with these efforts, the Board of Commissioners emphasizesd the need to increase the effectiveness of mechanisms in the internal control framework, which consists of environmental control, activity control, risk assessment, information and communication, and monitoring.

During the 2022 financial year, all corporate actions carried out by the Board of Directors were assessed by the Board of Commissioners as being in accordance with the 2022 RKAP and/or 2021-2025 RJPP, as well as fulfilling the provisions of good corporate governance and the results benefited the Company. Each decision of the meeting has been followed up and closely monitored. The results of the audit by the external auditor were monitored for follow-up in accordance with the recommendations given. For the management of the Company, the Board of Commissioners considered it to be in accordance with the provisions of the applicable laws and regulations and the contents of the provisions in agreements with third parties.

The Board of Commissioners and the Board of Directors agreed to increase the effectiveness of the implementation of the Whistleblowing System (WBS) and the Anti-Bribery Management System (ABMS) in order to prevent corruption and fraud. To speed up and improve the accuracy of financials and other transactions, the Company has started using the System Application and Product (SAP) information technology system which is targeted to be in 2022 for all of the Company’s work units to use the system. The operation of toll road sections is prepared using the Multi Lane Free Flow (MLFF) system as outlined and planned by the Government to be implemented in early 2023 after the conditions and prerequisites allow it to be carried out by the Toll Road Business Entity.

The efforts mentioned above have yielded good results and were reflected in the Company’s Net Profit of Rp2.8 trillion at the end of 2022.

Proposal for a Public Accounting Firm (PAF) to be Approved and Determined by the General Meeting of Shareholders (GMS)

Based on the procurement process in appointing PAF to audit the Company’s consolidated financial statements and Financial Statements for the 2022 Micro and Small Business Funding Program and based on the recommendation of the Audit Committee, the Board of Commissioners approved the appointment of Amir Abadi Jusuf, Aryanto, Mawar and Rekan (RSM Indonesia) PAF to carry out the audit work in question. For this reason, the Board of Commissioners submitted a proposal to the Annual GMS for the 2021 Fiscal Year, to obtain approval and determination of the GMS who then granted delegation of authority and power to the Board of Commissioners to determine the amount of fees for audit services and/or the addition of the required scope and other requirements deemed reasonable for the PAF.

Approval and Implementation of RKAP 2023

In accordance with the provisions of the Company’s Articles of Association, before the end of the 2022 fiscal year, the Board of Commissioners had to establish the 2023 RKAP as a reference for implementing the Company’s work program for the 2023 financial year. 2023. Taking into account the aspirations of the Series A Dwiwarna Shareholders as well as the direction and input of the Board of Commissioners, the Board of Directors submitted a proposal for the 2023 RKAP draft to the Board of Commissioners. After conducting an indepth and detailed review of the proposal, the Board of Commissioners in principle gave its approval through the Board of Commissioners Decree No. KEP 122/XII/2022 dated December 29, 2022 as the Company’s 2023 RKAP.

Supervision on Policy and Implementation of Subsidiary Management

In order to supervise management policies of the subsidiaries, both from the preparation for construction and implementation of toll road construction and maintenance, the Board of Commissioners supervises the operation and/or development management of all subsidiaries. This is done as part of its responsibility so that the Company’s assets are managed optimally in order to generate profits and increase the value of the Company. In every corporate action, the implementation continues to comply with GCG principles.

Direction on Implementation of the Company’s Plan and Policy

Apart from carrying out supervisory duties, the Board of Commissioners also provided direction to the Board of Directors regarding the implementation of the Company’s plans and policies throughout 2021.

Directions Regarding Changes in the Business Environment that Have a Significant Impact on the Company’s Business and Performance

The Company faced various external conditions, both globally and domestically, including the impact of the COVID-19 pandemic, risk of business competition, demands for the use of information technology. Mitigation measures were carried out by the Board of Directors with the supervision of the Board of Commissioners. Along with more conducive domestic conditions, the volume of toll road traffic has begun to recover due to increased community mobility, especially during national holidays and weekends.

The Board of Commissioners actively and continuously supervises, evaluates and reviews the Company’s performance, both monthly and quarterly performance, which includes ensuring the implementation of maintenance programs to meet Minimum Standard of Services (MSS), and the effective use of Information Technology (IT) systems.

The Board of Commissioners carried out strict monitoring and evaluation of the corporate actions by the Board of Directors in an effort to obtain the most optimal and profitable funds for the Company to finance investment in toll road sections that have been programmed in the RKAP.

Direction on Strengthening Internal Control System

The Board of Commissioners’ directions include carrying out standardization to strengthen the internal control system and utilizing the recommendations provided for the purpose of improving the system and controlling costs.

Direction on the Company’s Risk Management

The Board of Commissioners provides direction for the Board of Directors to make an in-depth risk assessment for every business process and corporate action that will be carried out by the Company by considering various internal and external conditions. With a comprehensive risk assessment, the Company can make mitigation steps to anticipate risks that may occur.

Direction on Information Technology System

The Board of Commissioners, among other things, gave directions for the Board of Directors to optimize SAP S/4 Hana as part of optimizing the Company’s Information Technology Master Plan. The full implementation of SAP Enterprise Resource Planning (ERP) at Jasa Marga Group is an integration of the entire management process of the Company. This will contribute to an easier, faster and more accurate implementation of the entire process.

Direction on Career Development Policy and Implementation

Directions from the Board of Commissioners regarding policies and the implementation of career development included improving the implementation of human capital within the Jasa Marga Group. The Board of Commissioners also provided direction related to the integration of the JM Click application from the service side and employee information side as well as talent management, in order to encourage the Company’s productivity.

Directions Regarding Accounting Policies and Preparation of Financial Statements and Compliance with Financial Accounting Standards (SAK)

The Board of Commissioners expresses its appreciation for several audit results that have been successfully completed. In addition, with the completion of the audit of the Company’s Consolidated Financial Statements for the 2022 financial year with an Unqualified Opinion, it can be concluded that the preparation of the Company’s financial statements is in accordance with SAK.

The Board of Commissioners also expresses its appreciation for the achievement and implementation of the ISO 37001:2016 Anti-Bribery Management System (ABMS) certification in 2022 for the Metropolitan Region and Nusantara Region after obtaining ABMS certification for all Head Office work units in 2022. The Board of Commissioners recommends that the standard ABMS procedure that has been implemented can be reviewed again, especially in areas where there is a risk of bribery. In addition, the Board encourages preparation for the ISO 37001:2016 certification in subsidiaries, targeted for implementation in 2023. Application of ABMS to certified units must also be accompanied by ongoing coaching to foster awareness and anti-bribery culture within the Company.

Direction on Procurement Policy and Implementation

Regarding the implementation of the follow-up to Presidential Instruction (Inpres) No. 2 of 2022 concerning the Acceleration of Increasing the Use of Domestic Products and Micro, Small and Medium Enterprises (MSMEs), the Board of Commissioners is generally of the view that its implementation is in accordance with the provisions.

The Board of Commissioners, among other things, provided advice to immediately revise the Annual Audit Work Program (PKAT) by making the implementation of the Domestic Component Level (TKDN) one of the annual audit work programs at Jasa Marga.

In terms of Increasing the Use of Domestic Products (P3DN), the Board of Commissioners advised the Board of Directors to develop an information system to monitor the implementation of P3DN and the use of MSME products within the Jasa Marga Group. The Board of Commissioners also advised the Board of Directors to carry out a thorough dissemination of the application of P3DN and the use of MSME products not only to internal units within the Jasa Marga Group but also to vendors within Jasa Marga.

Directions Concerning Quality and Service Policies and their Implementation

The directions of the Board of Commissioners regarding quality and service policies and their implementation included the application of toll road operation and maintenance technology, as well as the results of analysis and evaluation of services during the Eid Al-Fitr holiday period. The Board of Commissioners appreciates the success and smooth running of toll road operational activities during these periods and it is hoped that Jasa Marga will be better prepared in facing operational activities during the long holiday period or the following holidays.

Views on the Company’s Business Prospects

The Board of Commissioners sees that the business prospects prepared by the Directors presented in the 2021-2025 RJPP and 2022 RKAP as good. The business prospects have been prepared by taking into account the assumptions in the global and national macro-economy. Especially by looking at the achievement of the Company’s strong financial and business conditions in 2022, it provides optimism that the performance of 2022 can serve as the foundation for the Company’s better business growth going forward as the economic climate begins to recover. The Board of Commissioners believes that the Board of Directors is able to carry out all its strategies well and take advantage of existing opportunities.

In general, considering the internal and external conditions faced by the Company during 2020-2021, followed by the easing of the impact of the COVID-19 pandemic in 2022, the efforts made by the Board of Directors have had a positive effect on the Company. This is reflected in the achievement of the Company’s net profit.

However, the Board of Commissioners continues to remind the Board of Directors to remain vigilant and make efforts to mitigate risks due to various changes in external conditions.

Views on the Implementation of Corporate Governance

Jasa Marga is always committed to implementing GCG with reference to the Minister of BUMN Regulation No. 01/ MBU/2011 dated August 1, 2011 concerning the Implementation of Good Corporate Governance in SOEs as amended by the Minister of SOEs Regulation No. PER-09/MBU/2012 dated July 6, 2012, and Decree of the Secretary of the Ministry of BUMN No. SK-16/S.MBU/2012 dated June 6, 2012 concerning Indicators/Parameters for Assessment and Evaluation of the Implementation of Good Corporate Governance, as well as best practices for implementing GCG. Jasa Marga is committed to implementing GCG with a positive impact on achieving the Company’s performance and sustainability. In the process of implementing GCG in the Company, the Board of Commissioners has carried out the oversight function to ensure that the management of the Company by the Board of Directors is in accordance with prevailing laws and regulations, and provided the necessary advice on every strategic action in order to achieve the Company’s goals.

Achievements in the Implementation of GCG Principles within the Board of Commissioners for Fiscal Year 2022

In the context of evaluating the implementation of GCG principles in 2022 in the Company, based on the results of the GCG Assessment that has been Conducted by independent consultants, the Company managed to obtain a score of 98.42, with a score on the Board of Commissioners aspect of 99.14. The increased score compared to the previous year’s achievements is a reflection of the implementation of GCG principles in every business process of the Company in a sustainable manner.

Board of Commissioners Performance Assessment 2022

The performance appraisal score for the Board of Commissioners 2022 was carried out by self-assessment of 20 KPIs assessed at 5.0 out of the target of 5.0 or by 100% exceeding the 2022 target which was set at >4.8 (96.0%).

Performance Assessment of Committees under the Board of Commissioners

In order to increase the active role of the Board of Commissioners when carrying out their duties and responsibilities, the Board of Commissioners has formed three committees, namely:

  1. Audit Committee;
  2. Nomination and Remuneration Committee;
  3. Risk and Legal Committee.

Evaluation of the performance of the Committees under the Board of Commissioners was carried out by evaluating the annual work program plans and KPIs of each Committee which have been mutually agreed upon with the Board of Commissioners and their realization as reflected in the Committee’s annual report submitted to the Board of Commissioners. The report states the results of the performance self-assessment of each Committee. Using this as a basis, the Board of Commissioners evaluates the performance of the Committee by considering input from each member of the Board of Commissioners.

The Board of Commissioners considers that in 2022 the Committees under the Board of Commissioners have carried out their duties and responsibilities effectively and have given their appreciation for program achievements and work plans. The Board of Commissioners hopes that the Committee’s performance can be further improved so that it is able to make a greater contribution in assisting the Board of Commissioners in carrying out its duties and responsibilities.

Changes in the Composition of the Board of Commissioners

In 2022, there was no change in the composition of the Company’s Board of Commissioners. However, from the time fiscal year 2022 ended to the date of writing of this report, changes were made in the composition of the Board of Commissioners, based on the Extraordinary General Meeting of Shareholders (GMS) on February 08, 2023, to improve the roles, functions, and performance of duties of the Company’s Board of Commissioners. The Shareholders unanimously confirmed the dismissal of Mr. Yuswanda Arsyad Temenggung as President Commissioner/Independent Commissioner, Mr. Zulfan Lindan as Vice President Commissioner/Independent Commissioner, and Mrs. Anita Fimanti Eko Susetyowati and Mr. Yohanes Baptista Satya Sananugraha as Commissioners and appointed, Mohammad Zainal Fatah, as President Commissioner and appointed Mr. Chandra Wijaya, Mr. Seppalga Ahmad, Mr. Marsetio, and Mr. Abdul Rachman as Independent Commissioners. On behalf of the Company, the Board of Commissioners would like to thank Mr. Yuswanda Arsyad Temenggung, Mr. Zulfan Lindan, Mrs. Anita Firmanti Eko Susetyowati, and Mr. Yohanes Baptista Satya Sananugraha for their contribution and dedication while serving as members of the Company’s Board of Commissioners.

Thus the composition of the Company’s Board of Commissioners as of the date of preparation of this report is as follows:

Position Name
President Commissioner Mohammad Zainal Fatah
Commissioner M. Roskanedi
Commissioner Raja Erizman
Independent Commissioner Chandra Wijaya
Independent Commissioner Seppalga Ahmad
Independent Commissioner Marsetio
Independent Commissioner Abdul Rachman

Appreciation

Concluding the supervisory report of the Board of Commissioners for the 2022 financial year, we express our highest appreciation for the cooperation of all stakeholders, so that the Company is able to survive amid the pressures of the impact of the COVID-19 pandemic and global economic conditions. Even under these conditions, the Company was able to obtain an increase in net profit and the construction of toll road projects both in Java and outside Java continued which are expected to be completed properly on time.

Jakarta, 18 April 2023

On Behalf of the Board of Commissioners

Mohammad Zainal Fatah

President Commissioner