Report of the Acting President Director & Director of Finance and Risk Management

In a slowing and uncertain global economy, Indonesia's economy continues to grow strongly and steadily. Despite starting from a high base in 2022, where domestic economic growth reached 5.31%, Indonesia was able to achieve growth of 5.05% in 2023. Amidst the global economic slowdown, Indonesia has recorded a very good consistency in its growth trend, supported by strong domestic demand, particularly consumption and investment activities.

Despite facing challenges such as intense competition, commodity and energy price volatility, and market overcapacity, the Company was able to maintain its performance growth through the implementation of efficiency and sustainable innovation. This minimized operational cost increases and improved profitability. The Company's commitment to sustainable development principles is integrated into all operational activities, focusing on the development of sustainable solutions, efficient environmental management, the implementation of a circular economy, social responsibility, and human resource development.

Asruddin

Performance Journey

The year 2024 will be a challenging year for Solusi Bangun Indonesia and for the national cement industry in general. However, the Company views all challenges as opportunities to hone its competitive advantages and gain experience. Demand for bagged cement has contracted, but demand for bulk cement has increased from government projects, smelter factories, and the private sector.

Business Strategy Initiative

The company manages the domestic market by distributing cement through its ready-mix concrete business unit for value-added and environmentally friendly construction solutions. In 2023, more than 40% of revenue was generated from sustainable solutions such as SpeedCrete and environmentally friendly cement used in infrastructure projects.

The waste management business segment managed by the waste management division, Nathabumi, continues to grow. In 2023, the number of Nathabumi customers increased from 696 companies in 2022 to 782 companies. The total volume of waste processed by the Waste Management Unit (UPL) in 2023 was 791,254 MT, a decrease of 1.0% from 799,318 MT in 2022, with a gross added value of IDR 317 billion, down 2.5% from IDR 324 billion in 2022.

The company has established partnerships with a number of local governments and private entities to manage urban waste into alternative fuel for cement production. This initiative has been recognized by the government, including the Ministry of Environment and Forestry (KLHK), which invited the President Director of SBI to give a presentation at a talk show themed “Zero Waste and Zero Emission Goals on Municipal Solid Waste” at COP28 UNFCCC UAE Dubai.

In terms of environmental performance, the Company once again received the Green PROPER award from the Ministry of Environment and Forestry for its factories in Lhoknga, Narogong, Cilacap, and Tuban. In addition, these four factories were also nominated for the Gold PROPER award for the first time. This achievement demonstrates the Company's commitment to the principles of sustainable development in its operations, with measurable targets in sustainable solutions, environmental management, circular economy, social responsibility, and human resource development.

Prospects and Innovations in Facing Business Challenges

Facing intense market competition, the Company will continue its positive performance by enhancing its resilience and competitiveness to provide optimal benefits for shareholders, customers, and stakeholders, as well as contributing to sustainable development. All components of the Company must improve their competence and excellence through ideas, initiatives, and strategic plans, which are implemented through innovative new methods through synergy and collaboration to improve product and service quality in order to go further and win the competition.

The Company will continue to improve efficiency and explore new innovations, including continuing to increase the use of alternative fuels and digitizing production processes so that production costs are more effective and efficient. In line with this, the Company will continue to strengthen its synergy with SIG for product distribution and supply chain so that it can achieve a more competitive cost to serve. All of these efforts are also supported by the optimization of digitization and automation to improve factory efficiency.

Application of GCG Principles in Every Business Operation

The Board of Directors, Board of Commissioners, and all elements of the Company are committed to implementing the principles of good corporate governance (GCG) as a work culture. The Company believes that the implementation of GCG in accordance with applicable regulations and best practices in the business world will increase shareholder value and public trust.

The Company conducts GCG assessments based on the ASEAN Corporate Governance Scorecard (ACGS) parameters. The assessment results serve as the basis for making improvements to enhance the quality of GCG implementation. The 2023 GCG assessment results achieved a score of 88.76 points with an interpretation of “Good,” an increase compared to the 2022 score of 88.28.

To strengthen the prevention system against corruption and bribery that could risk the Company's reputation, in 2023 the Company and its subsidiaries made various preparations to obtain ISO 37001:2016 Anti-Bribery Management System (ABMS) certification. After undergoing a certification audit process by the independent institution PT Sucofindo, the Company successfully obtained the ISO 37001:2016 AMMS Certificate with a scope of application covering the entities PT Solusi Bangun Indonesia Tbk, PT Solusi Bangun Andalas, PT Solusi Bangun Beton, PT Readymix Concrete Indonesia, PT Pendawa Lestari Perkasa, and PT SBI Bangun Nusantara.

Changes in the Composition of the Board of Directors

Based on the decision of the AGM on May 31, 2024, regarding changes to the Company's management as follows:

1. Respectfully dismissing Lilik Unggul Raharjo from the position of President Director, Prijo Sambodo from the positions of President Commissioner and Independent Commissioner, and Yoshifumi Taura from the position of Commissioner of the Company.

2. Approving the appointment of Asri Mukhtar as President Director, Prijo Sambodo as President Commissioner and Independent Commissioner, Yohanes Surya as Independent Commissioner, and Shinji Fukami as Commissioner.

The composition of the Company's Board of Directors as of May 31, 2024 is as follows:
• Asri Mukhtar as President Director
• Manufacturing Director : Soni Asrul Sani
• Director of Human Capital, Legal & Corporate Affairs: Ony Suprihartono
• Offtake & Partnership Director : Yasuhide Abe

Appreciation to All Related Parties

On behalf of the Board of Directors, I would like to express my gratitude to the Board of Commissioners for their advice, guidance, and support on various important decisions made by the Company throughout 2023. I would like to express my highest appreciation to all members of the Company who have demonstrated excellent teamwork, dedication, and integrity, enabling the Company to overcome various challenges. May the Company continue to provide optimal benefits for shareholders, employees, and all stakeholders.

Report of the President Commissioner

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