Page 4 - KRA Annual Report 2020

KRA ANNUAL REPORT Management
2020 Report

Dear Shareholders and Stakeholders,

Praise and gratitude we extend to God the Almighty, Most Gracious, and Most
Merciful. May His blessings and mercy always be bestowed upon us all.

The year 2020 was a very challenging year, in which we all faced the COVID-
19 pandemic that caused disruptions to the global economy and commodity
markets, as well as directly impacted the operational performance of almost
every company in the world.

However, PT Komatsu Remanufacturing Asia (KRA) was able to face all
existing challenges, thus successfully recording a good performance. Various
initiatives, including the continuation of its digital transformation, enhancement
of operational cost and cash management effectiveness, as well as optimal
operational excellence execution within its operational activities, have enabled company record positive
results during this challenging year.

That being said, allow us, the Board of Commissioners to present the overview of the supervisory function
report in the annual report Company in 2020 as part of the supervision reports of the Company’s
performance throughout 2020.

In 2020, the global economy contracted the most deeply for nearly a century, as Covid-19 began to spread
and ravage populations across six continents. In view of the fact that the world economy is highly dependent
on the movement of goods and people, the Covid-19 pandemic had devastated the wheels of global
mobility, and forced massive closures of businesses from small, medium, to large scale, all over the globe
due to lockdowns and social restrictions which had never been implemented to such a level in modern
history. Under these conditions, the global economy in 2020 was estimated to have contracted by between -
3.5 to 4.3%. Some countries have even hit growth rates below negative 10%. Yet there is hope amidst all
this gloom: the tremendous downturn notwithstanding, recovery is taking place gradually, albeit at a sluggish
pace still. Pressures on the economy prompted central banks across the globe to trigger quantitative easing
measures and governments to unleash stimulus packages, amounting to an unprecedented USD10 trillion
so far. Thanks to the prompt huge stimulus, the world economy is projected to recover by 4.6–6.4% in 2021.

The Board of Commissioners has an oversight role management of operations and business run by the
Board of Directors. The form of monitoring and providing input to the Board of Directors is through meetings
held by the Board of Commissioners, either in the form of internal meetings or joint meetings by inviting the
Board of Directors or attending an invitation from the Board of Directors. The meetings serve as a forum for
the Board of Commissioners to conduct intensive and in-depth evaluations of the condition of the coal
industry throughout 2020, the Company’s Long Term Plan , and the Company Work Plan and Budget, the
progress of the Company’s operations and business, investment development, problem handling, GCG
implementation, Human Resources (HR) management as well as technology and information systems within
the Company.

In a depressed economic condition, the coal industry also faced serious challenges with a significant decline
in its demand, both domestic and export demand, due to the lockdowns or the social restrictions resulting in
a decrease in electricity absorption for the industry. The decline in coal demand was caused by low industrial
absorption, which had lasted from the beginning of 2020 to the middle of the third Quarter of 2020. This
certainly had an impact on the company’s performance up to the third Quarter of 2020.

In the conditions as described above, the Board of Directors was able to bring the Company to achieve
positive performance by booking revenues of USD 32.9 Million and a net profit of USD 4.0 Million. Although
this has decreased compared to the year 2019, however, was a big achievement for the Company.
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