Report of the Board of Commissioners
“The Board of Commissioners considers that the Board of Directors has made every effort to maintain the Company's business stability and maintain stakeholders’ trust through a number of strategic initiatives in dealing with challenges throughout 2021. The Board of Commissioners highly appreciates the efforts made by the Board of Directors and all WIKA Personnel in turning these challenges into continuous improvement moment, hence making WIKA continues to grow strong and develop into the future.”
Dear Shareholders and Stakeholders,
Let us first send our gratitude to God Almighty, who has bestowed His grace and blessings, so that PT Wijaya Karya (Persero) Tbk or WIKA or the Company succeeded in going through the year of 2021 with positive achievements despite the challenging global and national economic conditions that have not fully recovered from the impact of the Corona Virus Disease 19 (COVID-19) pandemic. In carrying out its strategic functions, Board of Commissioners carries out the supervisory and advisory duties upon Board of Directors with good faith and in an accountable and prudence manner, for the benefit of the Company. We as the Board of Commissioners strives to ensure the management of the Company through monitoring the adequacy of supervision and the effectiveness of compliance with applicable laws and regulations, as well as based on the principles of Good Corporate Governance (GCG).
The focus of Board of Commissioners’ supervisory and advisory on the management of the Company by Board of Directors, includes the implementation of the Company’s Work Plan and Budget (RKAP), follow-up to the resolutions of General Meeting of Shareholders (GMS), implementation of Good Corporate Governance, effectiveness of Internal Control System, implementation of the Company’s code of conduct and cultural values, as well as the implementation of applicable laws and regulations, so that the Company is able to survive and continue to grow sustainably.
For all the efforts, hard work, and strong achievements recorded by WIKA in the midst of numerous challenges, we have selected the theme “Dare to Beat the Challenge, Maintaining Excellence”, as the theme of this 2021 Annual Report as the documentation of the Company’s journey in 2021.
It is an honor for me to represent the Board of Commissioners and submit the report on the Board of Commissioners’ duties and responsibilities in supervising the management of PT Wijaya Karya (Persero) Tbk ending on December 31, 2021, as part of the implementation of Good Corporate Governance principles, in particular, the transparency of information principle.
DARE TO BEAT THE CHALLENGE, MAINTAINING EXCELLENCE
The Board of Commissioners fully understands that WIKA’s financial performance in 2021 is not better than 2019 and 2020. However, the Board of Commissioners considers that the Board of Directors has made earnest efforts to maintain the stability of the Company and maintain the trust of stakeholders through various innovations and strategic initiatives. The Company continues to improve itself to create an effective and efficient operational pattern but still prioritizes superior quality in every aspect of its operational activities. To anticipate the long-term impact of the COVID-19 Pandemic, the Board of Directors has also prepared strategies as outlined in the Company’s Long- Term Plan (RJPP) for the next 5 (five) years, RJPP 2021-2025.
The Board of Commissioners believes that the Board of Directors and all levels of the Company’s Management have been able to take advantage of the challenges of the COVID-19 Pandemic and its derivative impacts as a momentum for continuous improvement and innovate in all business lines to increase the quality of work and create more optimum products in each project worked on.
The Board of Commissioners would like to highly appreciate the efforts made by the Board of Directors in making employees’ safety and health a very important focal point in the midst of the pandemic, and become the main concern of the Board of Directors in managing the Company in order not to lead to employee reduction.
WIKA was also able to record brilliant achievements by winning several prestigious awards, including, the Indonesia TOP GCG Awards 2021 for the category of Budding Construction Sector, Indonesia Most Trusted Companies Award 2021 by CGPI, Gold Rank by Asia Sustainability Reporting Rating ASSRAT 2021, The Most Popular SOE Tbk in Digital Media 2021, Indonesia Top Companies Awards 2021: Building Constructions Sector, as well as various other awards.
WIKA IN INDONESIA’S INFRASTRUCTURE, CONSTRUCTION AND ENGINEERING INDUSTRY
In the infrastructure and construction industry in Indonesia, WIKA as one of the SOE Karya, is widely involved in the construction of numerous national strategic projects, such as Balikpapan- Samarinda Toll Road, Jatigede Toll Road, the construction of various airports, the Serang-Panimbang Toll Road, and Jakarta- Bandung High Speed Railway. Through these developments, indirectly, WIKA also contributes to the acceleration of Indonesia’s economic recovery, especially in the construction sector.
WIKA also encourages its human capital to continue to develop their abilities through a variety of training and educational facilities organized by WIKA. WIKA urges its personnel for continuous innovation and create the latest technology, which can support the development of the construction world on infrastructure projects in relation to engineering knowledge management.
Through its subsidiary, WIKA Industri Energi, WIKA has succeeded in producing various innovative products based on renewable energy and energy conversion, among others, Solar Water Heater, Aircon Water Heater, Heat Pump Water Heater, Electric Water Heater, Solar Pool Heating and also various products based on solar panels (Photovoltaic Solar Module) such as Solar Home System, Solar Pumping System, Solar Street Light System, Solar Centralized Hybrid System, Solar Module/Panel, Battery and so on.
Through another subsidiary, WIKA Industri Manufaktur, WIKA succeeded in developing its business in manufacturing the first electric motorcycle made by the people of the nation, GESITS. GESITS is a two-wheeled electric vehicle that relies on an electric motor with a power of 6.7 hp and 30 Nm of torque and gets electric power from a battery with a capacity of 1,396 Watt. These efforts are part of WIKA’s commitment to optimizing digital technology, new renewable energy and energy conversion to support the energy transition and green economy policies launched by the Government of Indonesia. It is well known that the Government of Indonesia is targetting to be able to reduce greenhouse gas (GHG) emissions by 29 percent with its own capabilities by 2030. It is believed that this target can be achieved, one of which is through a strategy that has been prepared by the government, namely optimizing the use of new and renewable energy sources (EBT).
WIKA hopes that the use of appropriate, effective, inexpensive, and environmentally friendly technology will be able to minimize social impacts on the community’s condition and can create added value and sustainable development, so that the benefits of infrastructure development can be felt by future generations.
COMPANY DEVELOPMENTAL BACKGROUND
In 2021, the COVID-19 pandemic was still looming over Indonesia’s construction and infrastructure industry. Economic policies and other policies aimed at overcoming the pandemic in the country, directly or indirectly have affected the course of construction and infrastructure businesses, including delays or cancellations of ongoing or future contracts, policies on safety aspects in the work environment, and so on. The Emergency PPKM policy implemented by the Government also has an impact on project development due to restrictions on community mobility and prohibitions on gathering to overcome the COVID-19 pandemic.
For WIKA, 2021 was a challenging year due to the delay of several contracts from the Government, SOEs, or private sector. In the midst of these challenges, WIKA also had to dealt with another challenge, i.e. projects with a Contract Pre-Financing (CPF) financing model, which requires WIKA to finance the project until it is 100% completed. The very large need for funds causes the Company to continue to look for suitable financing alternatives.
Under these conditions, WIKA made a number of efficiency efforts while continuing to carry out its business activities by prioritizing Quality, Safety, Health and Environment (QSHE). In addition, WIKA continues to seek new contracts as a source of revenue in 2021 and 2022. To achieve the targets and goals of 2021 RKAP, the Board of Commissioners in particular conducted more intensive coordination meetings with the Board of Directors throughout 2021, to ensure the implemenation of the plans that have been set. In carrying out the Company’s operational activities, WIKA always prepares protocols related to the activities of employees and other stakeholders. For activities that require direct interaction, body temperature checks and physical distancing are still enforced, while other activities are carried out virtually.
BOARD OF COMMISSIONERS PERFORMANCE REPORT
In accordance with the mandate of Law no. 40 of 2007 concerning Limited Liability Companies, throughout 2021, the Board of Commissioners has carried out its duties and responsibilities to supervise the management of the Company carried out by the Board of Directors to comply with the Company’s Work Plan and Budget (RKAP) that was launched at the beginning of the year, providing advice or suggestion on strategic matters and provide written responses or make decisions on matters that need to be approved by the Board of Commissioners in accordance with the Company’s Articles of Association.
In the supervisory function, the Board of Commissioners routinely coordinated with the Board of Directors to monitor and discuss performance developments and strategic issues within the Company. As a manifestation of the implementation of Good Corporate Governance principles, the Board of Commissioners has also divided the duties of each member of the Board, each of which monitors the fields of operations, finance, risk management, human capital, and QHSE. This division of duties is regulated in the Decree of Board of Commissioners of PT Wijaya Karya (Persero) Tbk No. 85/DK/WIKA/2021 dated October 1, 2021 regarding the Division of Supervisory Duties for Board of Commissioners of PT Wijaya Karya Tbk. The division of duties aims to improve the quality of deepening the matters of supervision topic of the Board of Commissioners. All of them are run by committees assigned to make regular reports, either orally through meetings, or in writing.
In carrying out its role, the Board of Commissioners has Supporting Organs, namely the Secretary of Board of Commissioners, Audit Committee, Nomination, Remuneration and GCG Committee. These committees assist the Board of Commissioners in carrying out the task of supervising and monitoring management activities in accordance with their respective fields.
In 2021, the Board of Commissioners issued the following Decrees and Recommendations,:
- Approval of the Establishment of Implementing Business Entity for Jatiluhur 1 Regional SPAM PPP Project by PT Wijaya Karya (Persero) Tbk;
- Approval of the Appointment of Board of Directors and Board of Commissioners of Subsidiary of PT Wijaya Karya (Persero) Tbk;
- Addition of the Organizational Structure of Strategic Marketing Division of PT Wijaya Karya (Persero) Tbk;
- Procurement of Public Accountant Services for the 2021 Fiscall Year of PT Wijaya Karya (Persero) Tbk;
- Presentation of PT Wijaya Karya (Persero) Tbk’s Talent Pool;
- Evaluation Results of Board of Directors of PT Wijaya Karya (Persero) Tbk;
- Decree of Board of Commissioners regarding the appointment or dismissal of Supporting Organs of Board of Commissioners of PT Wijaya Karya (Persero) Tbk;
- Board of Commissioners’ response to the Change in the Allocation of Additional State Equity Participation Funds (PMN) of PT Wijaya Karya (Persero) Tbk;
- Plan for Holding the Annual General Meeting of Shareholders (“AGMS”) for Fiscal Year 2020 of PT Wijaya Karya (Persero) Tbk (the “Company”);
- The Board of Commissioners Supervisory Report of PT Wijaya Karya (Persero) Tbk for Fiscal Year 2020;
- Approval of Sustainable Bond II and Sustainable Sukuk Mudharabah II of PT Wijaya Karya (Persero) Tbk;
- Board of Commissioners’ response on the 2020 Fiscal Year Performance and the Agenda of the Annual GMS for Fiscal Year of 2020;
- Proposal for the Appointment of Public Accountant Firm (KAP) to Audit the Financial Statements of PT Wijaya Karya (Persero) Tbk/”WIKA” and Consolidated for Fiscal Year 2021;
- Application for Approval for Additional Capital Deposit in PT WIKA Realty through the issuance of New Shares;
- Approval of additional paid-in capital of PT Wijaya Karya (Persero) Tbk to PT Wijaya Karya Industri & Konstruksi;
- Joint Decree of Board of Directors and Board of Commissioners regarding Changes in the Board Manual of PT Wijaya Karya (Persero) Tbk;
- Approval of Branch Office Opening in Solomon Islands;
- Appointment of Acting Director of Operations III of PT Wijaya Karya (Persero) Tbk/”PT WIKA”;
- Approval of additional paid-in capital in PT WIKA Realty through the issuance of new shares;
- Plan for Hodlding the Extraordinary General Meeting of Shareholders (“EGMS”) of PT Wijaya Karya (Persero) Tbk (the “Company”);
- Establishment of a Special Purpose Vehicle and Plan for the Takeover of All Shares owned by PT Patra Jasa in PT Hotel Indonesia Group, which will be carried out by PT Wijaya Karya Realty in fulfilling the Decree of Minister of SOEs No. SK- 315/MBU/12/2019 and the implementation of SOE Hotel Integration Program;
- Application for Approval of Changes in the Composition of Share Ownership of PT Wijaya Karya (Persero) Tbk (“WIKA”) at PT WIKA Realty in the context of implementing the SOE Hotel Integration Program;
- Approval of Changes in the Composition of Share Ownership of PT Wijaya Karya (Persero) Tbk at PT WIKA Realty in the context of implementing the SOE Hotel Integration Program;
- Approval of the Proposed Limitations and/or Criteria for the Authority of the Board of Directors, Board of Commissioners and Series A Dwiwarna Shareholder of PT Wijaya Karya (Persero) Tbk;
- Approval of Changes in the Composition of Share Ownership of PT Wijaya Karya (Persero) Tbk at PT WIKA Realty in the context of implementing the SOE Hotel Integration Program;
- Complaints about the Implementation of WIKA - Karaga KSO Project;
- Approval of Additional Capital Deposit and Changes in Capital Structure at PT WIKA Tirta Jaya Jatiluhur;
- Company Long Term Plan (“RJPP”) for 2021-2025 of PT Wijaya Karya (Persero) Tbk;
- Appointment of a Public Accounting Firm (KAP) to Perform Additional Work on Auditing the Financial Statements of PT Wijaya Karya (Persero) Tbk and Consolidated;
- Board of Commissioners’ response to PT Wijaya Karya (Persero) Tbk’s Management Report up to the first semester of 2021;
- Approval for the Granting of Corporate Guarantee to PT Wijaya Karya Realty/”WIKA Realty”;
- Decree of Board of Commissioners regarding the Division of Supervisory Duties of Board of Commissioners of PT Wijaya Karya Tbk;
- Submission of the 2021 Company Work Plan and Budget Revision of PT Wijaya Karya (Persero) Tbk/”PT WIKA”;
- Determination of Income for Board of Directors and Board of Commissioners of PT Wijaya Karya (Persero) Tbk in 2021 and Business Performance Bonuses in 2020;
- Joint Decree of Board of Commissioners and Board of Directors regarding PT Wijaya Karya Tbk’s Guidelines for Handling Conflicts of Interest;
- Evaluation of Allowance and Honorarium Withholding Policy;
- Approval for the Renewal of the Company’s Investment & Divestment Manual Board;
- Application for Approval of Additional Capital Deposit in PT Wijaya Karya Realty through the issuance of Shares in Deposits;
- Board of Commissioners’ response to the 2021 Quarterly Company Management Report (Un-audited);
- Approval for the Disposal of Company Assets Listed as Investment Properties;
- Approval of Establishment of Implementing Business Entity and Capital Deposit for Hang Nadim Airport PPP Project;
- Approval of additional paid-in capital in PT Wijaya Karya Realty through the issuance of shares in savings;
- Submission of the Work Plan and Budget of Board of Commissioners of PT Wijaya Karya (Persero) Tbk/”WIKA” for 2022;
- Appointment of Acting Director of Finance and Risk Management of PT Wijaya Karya (Persero) Tbk/“PT WIKA”.
SUPERVISION ON THE IMPLEMENTATION OF COMPANY’S POLICIES AND STRATEGIES AND BOARD OF COMMISSIONERS’ INVOLVEMENT IN CORPORATE WORK PLAN AND BUDGET PREPARATION
In preparing the plans, targets, and strategies that are then outlined in the 2021 RKAP and the revised 2021 RKAP, the Board of Directors referred to several assumptions, including macro and micro conditions of the Company, in addition to paying attention to the aspirations of shareholders for 2021.
The Board of Commissioners then analyzied and evaluated the proposed 2021 RKAP and its revision submitted by the Board of Directors, and held discussions with the Board of Directors if necessary. With 2021 conditions that were not yet fully predictable, the Board of Commissioners provided suggestions and input to the Board of Directors so that the 2021 RKAP is challenging but remains within the corridor of fairness and the principle of prudence.
The Board of Commissioners constantly reminded the Board of Directors to conduct a sensitivity analysis in order to anticipate scenarios that may occur.
Regarding the strategies carried out by the Board of Directors in 2021, the Board of Commissioners considers that those strategies were in line with the plan set out in the Revised RKAP 2021, especially related to improving cash flow management by taking into account the conditions of business environment, and risk management as a tool for managing the Company’s business, as well as efforts to increase competitiveness or through cost improvement and efforts to develop investment and cooperation patterns.
MECHANISM AND FREQUENCY OF PROVIDING ADVICE TO BOARD OF DIRECTORS
The Board of Commissioners appreciates the cooperative relationship that has been well established between Board of Commissioners and Board of Directors. Transparency and timeliness in submitting reports, facilitating the Board of Commissioners to can carry out our functions as well as possible, and providing a medium to increase the Commissioners’ competencies and knowledge. The Board of Commissioners at all times maintains very good working relationship with the Board of Directors and prioritizes the principle of mutual respect for the authority of each party. The Board of Commissioners performs the supervisory and advisory mechanism, both when requested by the Board of Directors and based on the initiative of Board of Commissioners.
The Board of Commissioners proactively reviews and oversees the implementation of policies and strategies set at the beginning of the year with the Board of Directors, both in operational and financial management. Recommendations and suggestions that are constructive and solution-oriented in carrying out business activities, including various strategic initiatives are then submitted to the Board of Directors and other interested organs through Board of Commissioners and Board of Directors meetings thatis held at least once a month.
Throughout 2021, the Coordination Meeting of Board of Commissioners and Board of Directors was held 15 times, with the following topics of discussion:
- Evaluation of the Company’s and Subsidiaries’ Business Outcome, Performance Progress Reports per Directorate, Progress Reports on the Implementation of National Strategic Projects (PSN) and Reports on Investment Progress/Capex;
- Discussion on the Progress of GESITS;
- Discussion in Hotel Holding;
- Discussion on the Additional Capital Plan to PT WIKA Realty in the context of Hotel Holding;
- Subsidiaries’ Performance Portraits;
- Proposed Discussion on WIKA’s Performance up to Semester I of 2021;
- Discussion on Revised RJPP 2021-2025;
- Discussion on Revised RKAP 2021 Proposal;
- Approval and Ratification of the Revised Company Work Plan and Budget (RKAP) of PT Wijaya Karya (Persero) Tbk including the implementation plan for Social and Environmental Responsibility Program (TJSL) and the 2021 Board of Commissioners’ Work and Budget Plan (RKA);
- Ratification of the Revision of Management Contract between Board of Directors and Board of Commissioners of PT Wijaya Karya (Persero) Tbk in 2021;
- Approval of the Board of Commissioners on the Company’s Corporate Action in 2021;
- Discussion on the Establishment of Implementing Business Entity and Capital Deposit for KSP Project with Hang Nadim Airport Business Entity;
- Discussion on Renewal of the Company’s Investment and Divestment Manual Board.
In order to ensure the adequacy of supervision, the Board of Commissioners also conducts periodic direct supervision to the field through work visits or site visits to WIKA Group’s projects in accordance with reports submitted by the Board of Directors.
Site visits can help the Board of Commissioners in obtaining a broader picture of the challenges and opportunities that WIKA has, as well as to interact with employees on the project so as to obtain input from their side.
However, with the unfavorable conditions due to COVID-19, this year, site visit activities have decreased and are only limited to urgent ones. The Board of Commissioners is also assisted by the Audit Committee and Nomination, Remuneration and GCG Committee in evaluating and reviewing current performance and future work plans.
Based on the supervision carried out by the Board of Commissioners, either through discussions with the Board of Directors regarding the Company’s performance, or by going directly to the field, the Board of Commissioners assesses that the Company has carried out business activities in accordance with the annual work plan, vision and mission as well as strategic directions from the Shareholders. Through careful observation of macroeconomic conditions, changes in the business environment, the Company is able to adapt and implement relevant strategies according to the latest developments.
BOARD OF COMMISSIONERS’ ASSESSMENT ON THE PERFORMANCE OF BOARD OF DIRECTORS IN MANAGING THE COMPANY, AND THE BASIS OF ASSESSMENT
Annually, the Board of Commissioners stipulates the Board of Directors’ Key Performance Indicators (KPI) targets as a benchmark for evaluating the performance of Board of Directors, both individually and collectively. The KPIs are prepared by referring to the format and main indicators as regulated by the Ministry of SOEs, in order to remain within the corridor of applicable regulations.
In the KPIs, the Board of Directors are assessed from 5 perspectives, namely:
- Economic and social value;
- Business model innovation;
- Technology leadership;
- Increased investment;
- Talent development.
In addition, an assessment is also carried out on GCG implementation aspects, in which WIKA annually conducts a GCG assessment (both self-assessment and assessment by an independent party) and evaluates corporate performance through an assessment of the Company’s Soundness Level.
To ensure that the achievement of RKAP is monitored periodically as an early warning system, the Board of Commissioners monitors the results of WIKA’s operations every month. In this process, the Board of Commissioners can execute periodic evaluation of the Board of Directors’ performance.
The Board of Commissioners fully understands that WIKA was forced to face the challenging dynamics of construction and infrastructure industry, with due regard to the suspension or delay of several contract projects, both from the Government, SOEs, and private sector. As a result, the targets set in the RKAP did not meet expectations.
The Board of Commissioners considers that the Board of Directors has exerted all efforts to deal with these challenges, so as to be able to properly maintain the stability of the Company, as well as maintain the trust of Shareholders and other Stakeholders.
In this challenging year, WIKA also managed to achieve brilliant achievements through the awards received, such as The Best Enterprise Risk Management Award 2021 for the category of Listed Company Sector Infrastructures - Heavy Constructions & Civil Engineering, from Economi Review; the Best State Owned Enterprise (BUMN) award and the Top 50 Big Capitalization Public Listed Company in The 12th IICD Corporate Governance Award 2021 organized by the Indonesian Institute for Corporate Directorship (IICD); won the title of “Highly Trusted” in the Indonesia Most Trusted Companies Award 2021, Corporate Governance Perception Index (CGPI), organized by SWA Group; the Indonesia Best Workplace for Women Awards 2021, Building an Inclusive Future in the Infrastructure Industry category, organized by Herstory; and many more.
For such good achievement, the Board of Commissioners would like to give high appreciation to the Board of Directors and all levels of management. The Board of Commissioners will continue to support the Board of Directors and all management to sustain and improve the Company’s performance in the years to come, by earnestly carrying out their roles, functions and duties as the Board of Commissioners.
VIEW ON THE COMPANY’S BUSINESS OUTLOOK COMPILED BY BOARD OF DIRECTORS
The world economic recovery in 2022 is expected to continue. The International Monetary Fund (IMF) through the World Economic Outlook 2022, estimated that the 2022 global economic growth will grow by 4.4% in 2022. However, the future economic recovery is still overshadowed by various risk factors such as the emergence of a new variant of COVID-19 , supply- demand mismatches, prolonged price hike pressures, climate change risks, and international trade tensions.
Meanwhile, the Indonesian economy in 2022 is forecasted to grow better than 2021. BI estimated the increase to the range of 4.7% to 5.5%, in line with the acceleration of private consumption and investment amid maintained government fiscal spending and exports. However, the risk of an increase in COVID-19 cases needs to be watched out for. This estimation is supported by increased mobility in line with accelerated vaccinations, wider economic openings, and continued policy stimulus.
Taking into account the Company’s internal conditions and external changes that affect the Company’s activities, including extraordinary conditions in the midst of the post-peak COVID-19 pandemic, the Board of Directors prepared WIKA’s 2022 Corporate Work Plan and Budget (RKAP) as a guide for the Company in conducting its business activities.
In 2019, the President of the Republic of Indonesia Joko Widodo confirmed that there would be a relocation of the Indonesian capital city from Jakarta to Kalimantan Island, where WIKA will take part in building a number of basic infrastructure projects such as roads, electricity networks and oil and gas infrastructure. However, the implementation was delayed due to the COVID-19 pandemic and it is hoped that in 2022 the National Capital development plan can be executed again.
In ensuring WIKA’s future operations, WIKA has prepared protocols that regulate employee activities as well as those involving other stakeholders, whether taking place in the office, project or plants. For activities that require direct interaction, body temperature checks and physical distancing are still enforced, meanwhile other activities can be done virtually.
WIKA is also focusing on optimizing the use of digital technology. Currently, the ongoing digitization process at WIKA has significantly changed the way things work in terms of planning, development processes to project monitoring and evaluation. Its effectiveness is starting to be seen from the reduced physical presence as well as the quality aspect that continues to be produced in accordance with the standards set by WIKA.
By observing the indicators of global and national economic recovery and reviewing the work plans and business strategies prepared by the Board of Directors, we are optimistic about WIKA’s performance in 2022. The Board of Commissioners will keep on supporting the Board of Directors in optimizing all resources and efforts to take advantage of the momentum of economic recovery, continuing the implementation of the long-term strategy and increasing the Company’s capabilities in order to maintain profitability as well as healthy and sustainable growth.
SUPERVISION ON CORPORATE GOVERNANCE IMPLEMENTATION
WIKA strives to continuously improve its performance by improving WIKA’s structure and culture as well as compliance with best practices based on Good Corporate Governance (GCG) principles which include: Transparency, Accountability, Responsibility, Independence and Fairness (TARIF).
The implementation of GCG principles is the duty and responsibility of Board of Commissioners, jointly with the Board of Directors and all management. The Board of Commissioners and Board of Directors are committed to implementing the principles of good corporate governance in every activity of the Company. The Board of Commissioners is not only responsible for the final results but also constantly monitors the process to achieve the expected results whether they are in accordance with applicable regulations and procedures.
The Board of Commissioners through the committees under the Board carefully monitors and reviews the suitability of the Company’s operational activities with applicable laws and regulations and GCG implementation best practices, both in Indonesia and at international level.
The Board of Commissioners considers that WIKA has been managed properly and in accordance with applicable laws and regulations. WIKA was able to record a very good GCG score compared to 2020 (the GCG Self Assessment Score verified by BPKP in 2020 was 94,950) and for the Area of Improvements, WIKA strives to make improvements in order to obtain a better GCG score.
In addition, the quality of GCG implementation in the Company continues to improve as shown by the better and more complete GCG infrastructure, soft structure and mechanisms developed by the Company. At the beginning of 2021, WIKA has signed a Cooperation Agreement (PKS) on the Integrated Whistleblowing System between SOE and the Corruption Eradication Commission (KPK). Apart from that, WIKA also conducted an ISO 37001:2016 Surveillance Audit regarding the Anti-Bribery Management System by External Auditor (Sucofindo).
BOARD OF COMMISSIONERS’ VIEWS ON THE ENTIRE CORPORATE GCG TOOLS AND BOARD OF COMMISSIONERS’ INVOLVEMENT IN GCG IMPLEMENTATION
The Board of Commissioners at all times reminds the Board of Directors that the management process of the Company must be carried out in accordance with GCG principles. Several suggestions and advice given to improve the quality of GCG implementation at WIKA are:
- Always mitigate risk whenever there is a change in the business environment and transparently report it to the Board of Commissioners and Shareholders, by taking into account the applicable rules and regulations;
- Respond to suggestions, expectations, problems and complaints from the stakeholders using the Company’s official communication channels;
- Ensure that the implementation of tiered internal controls are running and well monitored by the management, with the concept of layered control (three lines of defense);
- Making risk management a culture for every employee of the Company in working and acting for and on behalf of the Company, as well as constantly analyzing and mitigating risks that have significant impact on the Company’s performance;
- The level of success and actual benefits of the utilization and implementation of technology systems must be measurable;
- Optimizing human capital as the Company’s assets to gain added value compared to similar companies in the same industry, both nationally and internationally;
- Carry out human capital management by taking into account the principles of justice and harmony, including but not limited to issues of diversity, gender, local resources, and disability;
- Implement and disseminate information to all relevant personnel of the COmpany, from project implementers to those in charge of accounting at the Head Office, so as to ensure the reliability of the Company’s financial reports;
- Effective and efficient procurement, which is in accordance with the provisions of applicable legislation;
- Provide the best and foremost service to consumers;
- As a good, ethical and responsible entity for its existence in the social environment, WIKA at all times implements all applicable laws and regulations in the place where the Company carries out its activities;
- Uphold agreements that have been made with third parties by implementing them with due observance of the applicable laws and regulations;
- Able to make and implement policies related to the relationship between the parent company and its subsidiaries, subsidiary governance to achieve the most optimal Company goals.
BOARD OF COMMISSIONERS’ VIEWS ON THE EFFECTIVENESS OF INTERNAL CONTROL SYSTEM
WIKA makes every effort to build an effective internal control system to secure the investment in Company’s assets. The Board of Commissioners oversees the Internal Control System with the assistance of Audit Committee of Board of Commissioners, among others through meetings and deep analysis with the Internal Audit Unit, as well as site visits. The Board of Commissioners considers that the Internal Control System at WIKA is adequate, and encourages the management to update the system in line with technological developments and dynamic work environment.
BOARD OF COMMISSIONERS’ VIEW ON THE IMPLEMENTATION OF RISK MANAGEMENT
The role of risk management in uncertain conditions such as 2021 is very important. Taking this into account, we consider the implementation of risk management at WIKA in 2021 to be more in the spotlight and improvements should always be done. The mitigation efforts that need to be carried out and considered are mainly related to mitigating funding sources, cashflows, gross receivables & invoices, related legal and administrative agreements, project progress, as well as HC and IT implementation.
With regard to these matters, the Board of Directors has prepared adequate risk mitigation and has constantly made on its progress and implementation as the focus of the Board of Commissioners’ supervision.
BOARD OF COMMISSIONERS’ VIEWS AND ROLE ON THE IMPLEMENTATION OF WHISTLEBLOWING SYSTEM (WBS)
The Board of Commissioners is fully aware that the completion of reporting violations by stakeholders is one form of increasing stakeholder protection in order to guarantee their rights in their interaction with WIKA. Therefore, WIKA has equipped itself with Gratification Control and Whistleblower procedures, as well as integrated governance of the Parent and Subsidiaries in a guideline, namely the Subsidiary Governance Guidelines.
Currently, WIKA has applied an online WIKA Whistleblower Center. The Standard Operating Procedure (SOP) for online WIKA Whistleblower Center has been amended to suit current conditions and adjustments to the existing structure.
WBS is run by WIKA’s Internal Audit Unit (SPI) with counterpart or supervision from the Audit Committee. The Audit Committee routinely conducts reviews and discussions with SPI, which does not rule out the possibility of discussions including reviews of the ongoing WBS.
PERFORMANCE EVALUATION OF COMMITTEES UNDER BOARD OF COMMISSIONERS
In carrying out its duties and responsibilities, the Board of Commissioners is assisted by Secretary of Board of Commissioners, Audit Committee, and Nomination, Remuneration and GCG Committee. Annually, the Board of Commissioners, through the Committee Chairman, evaluates the members of committee. For 2021, the Board of Commissioners considers the committees’ performance to be satisfactory since they always provided adequate feedback to the Board of Commissioners and carried out their duties and functions in accordance with the Committee’s Charter.
CHANGES IN BOARD OF COMMISSIONERS’ COMPOSITION
Throughout 2021, there were changes in the structure and composition of Board of Commissioners based on the Resolution of Shareholders through Extraordinary General Meeting of Shareholders (Extraordinary GMS), held on September 2, 2021, at the Company’s Head Office, Jakarta.
In the Extraordinary GMS, Edy Sudarmanto as Commissioner of the Company who was appointed based on the Resolution of the 2019 Extraordinary GMS, was honorably dismissed with gratitude for the contribution of energy and thoughts given during his tenure as a Commissioner.
The Extraordinary GMS then appointed Rusmanto as an Independent Commissioner of the Company with a term of office in accordance with the Company’s Articles of Association, and taking into account the Capital Market laws and regulations and without prejudice to the right of the GMS to dismiss at any time.
Thus, the composition and structure of the Company’s Board of Commissioners as of December 31, 2021 consists of 7 (seven) members, namely 1 (one) President Commissioner, 2 (two) Commissioners, and 4 (four) Independent Commissioners, and this composition has complied with OJK Regulation No. 33/POJK.04/2014 concerning the number of members of the Company’s Board of Commissioners.
The following is the structure, composition, and term of office of the Company’s Board of Commissioners in 2021:
|Name||Position||Term of Office||Period in Office||Appointment Basis|
|Jarot Widyoko||President Commissioner||June 8, 2020 – 2025 AGMS||1st||AGMS resolution dated June 8, 2020|
|Firdaus Ali||Commissioner||June 8, 2020 – 2025 AGMS||1st||AGMS resolution dated June 8, 2020|
|Satya Bhakti Parikesit||Commissioner||April 30, 2019 – 2024 AGMS||1st||AGMS resolution dated April 30, 2019|
|Harris Arthur Hedar||Independent Commissioner||June 8, 2020 – 2025 AGMS||1st||AGMS resolution dated June 8, 2020|
|Adityawarman||Independent Commissioner||June 8, 2020 – 2025 AGMS||1st||AGMS resolution dated June 8, 2020|
|Suryo Hapsoro Tri Utom||Independent Commissioner||April 30, 2019 – 2023 AGMS||1st||AGMS resolution dated April 24, 2018|
|Rusmanto||Independent Commissioner||September 2, 2021 – 2026 AGMS||1st||EGMS resolution dated September 2, 2021|
Considering that the role and duties of Board of Commissioners are very strategic, each member of the Company’s Board of Commissioners shall possesses high integrity, knowledge, ability and commitment to provide time in carrying out their duties. The Board of Commissioners is also required to act independently, in the sense that they do not have a conflict of interest that can interfere with their ability to carry out tasks independently and critically, both in relation to one another and the relationship to the Board of Directors.
Therefore, before being appointed as a member of Board of Commissioners, the candidate of Board of Commissioners member must priorly meet the criteria and conditions required in the fit and proper test in accordance with the Limited Liability Company Law, the Company’s Articles of Association, regulations related to Good Corporate Governance, as well as other relevant rules and regulations, including provisions regarding Independent Commissioners.
All members of the Company’s Board of Commissioners have met the requirements of integrity, competencies, and good reputation as evidenced by obtaining approval to pass the fit and proper test which is entirely organized by the Ministry of SOEs.
The changes made is expected to increase the active role of each member of Board of Commissioners in carrying out the function of supervision and guidance to the management of the Company, so that the Company’s performance can continue to grow sustainably in the future.
FINAL WORDS AND APPRECIATION
For the achievements and efforts made throughout 2021, the Board of Commissioners would like to deeply appreciate the Board of Directors, management and employees of PT Wijaya Karya (Persero) Tbk who have maximized all the potentials that they have.
The Board of Commissioners would also like to express a gratitude to the Shareholders for their trust and support, hence enable the Board of Commissioners to carry out our duties and responsibilities properly. A high appreciation also goes to all stakeholders who have given their trust to the Company. Let us continue to ground ourselves on best business practices to realize the Company’s Vision and Mission.
Jakarta, March 16, 2022
On behalf of Board of Commissioners of PT Wijaya Karya (Persero) Tbk