Jakarta, December 2023. In connection with the report on the results of the BPK (Financial Audit Agency) examination in Semester I/2023 regarding the Company, the Company hereby declares the following:
- The Company always respects all audit and inspection processes carried out by the BPK. The Company's management has also taken the necessary steps to follow up on all recommendations given by the BPK.
- We can convey that the Krian-Legundi-Bunder-Manyar Section 4 Toll Road Construction project ("KLBM Section 4 Project") and the Tetrapod Material Procurement project for Coastal Protection ("Tetrapod Project") are projects carried out by the Company in the period 2017 to 2020 .
- The Company has completed the scope of work provided by the employer as stated in the work contracts for the two projects.
- The employers of the KLBM Section 4 Project (PT WBW) and the Tetrapod Project (PT STL) have acknowledged the work and products provided by the Company which are documented through Minutes. However, to date the Company has not received payment for these two projects.
- In order to protect the Company's rights and follow up on the results of the BPK examination, the Company has requested assistance from the State Attorney at the Attorney General's Office of the Republic of Indonesia ("JPN Kejagung").
- The company will take the necessary steps, including legal steps to collect receivables from PT STL for the Tetrapod Project worth IDR 436,8 billion. Apart from that, the Company also asked for JPN's assistance from the Attorney General's Office in preparing a settlement scheme for the KLBM Section 4 Project worth IDR 781,5 billion.
- In order to prevent similar problems from occurring, the Company's management has now made improvements by implementing Governance and Risk Management Guidelines related to the internal committee review process for risk mitigation, financial analysis, to legal due diligence before the Company participates in a tender for a new project.
- The Company is much more selective in participating in the tender process by considering the financial capacity of the employer to ensure payments can be made on time according to the agreement.
- All projects carried out by the Company have an internal team review of risk mitigation and cost benefit analysis in accordance with the Company's internal procedures. Through this study, the Company wants to minimize potential risks in the project work process and avoid potential losses.
- The implementation of Risk Management Governance is also supported by the existence of an Integrated Risk Monitoring and Governance Committee which is responsible to the Board of Commissioners in carrying out its duties related to supervision of the management of business risks faced by the Company.