Report of the Board of Commissioners

Dear Shareholders and Stakeholders,

2024 is a political year, both for the Legislative Election, Regional Head Election and Presidential Election, but the political situation is peaceful and has ended well, although there are small ripples.

In the midst of this political situation, the Board of Commissioners assesses that the Company’s Board of Directors, both at the parent company and subsidiary levels, are still trying to save the Company from the downturn due to the failure to generate revenue, because the projects owned by the Company are still in the preparation stage for development, due to the Company not having obtained the financing needed.

Development of Renewable Energy in Indonesia in 2024

The potential for New and Renewable Energy in Indonesia according to the Strategic Plan of the Ministry of Energy and Mineral Resources for 2020-2024 includes: Geothermal of 28.5 GW; Large-Hydro, Mini-hydro, and Micro-hydro of 75 GW; Bioenergy of 32 GW; Solar 207 GW; Wind 60 GW.

The potential for developing the electricity sub-sector based on the 2020-2024 Electricity Directorate Strategic Plan, namely:

Increasing access to electricity for the community to achieve a national electricity ratio of 100%;
Development of electricity infrastructure to ensure adequate electricity supply.
Utilization of primary energy that is lower carbon and environmentally friendly.

Constraints, problems, and challenges related to the electricity sub-sector in Indonesia that are mapped in the 2020-2024 Directorate General of Electricity Strategic Plan, namely:

The potential for renewable energy is quite large but spread out;
Systematic and continuous socialization and education are needed to minimize community resistance to renewable energy-based power plant projects;
The availability of soft loans domestically is still very limited;
Limited availability of supporting infrastructure, especially in Eastern Indonesia;
Very high dependence on foreign technology and supporting devices;
Not all types of renewable power plants can be integrated and connected to the local electricity system, especially for power plants that have intermittent characteristics.
Smart grid development in Indonesia still faces quite significant challenges.

Indonesia's Economic Growth in 2024

The Indonesian economy in 2024, measured by Gross Domestic Product (GDP) at current prices, reached IDR22,139.0 trillion and GDP per capita reached IDR78.6 million or USD4,960.3.

The Indonesian economy in 2024 grew by 5.03 percent, slowing down compared to the achievement in 2023 which experienced growth of 5.05 percent (c-to-c). In terms of production, the highest growth occurred in the Other Services Business Field at 9.80 percent. Meanwhile, the highest growth in terms of expenditure was achieved by the Consumption Expenditure Component of Non-Profit Institutions Serving Households (PK-LNPRT) at 12.48 percent.

The Indonesian economy in the fourth quarter of 2024 compared to the fourth quarter of 2023 experienced growth of 5.02 percent (y-on-y). In terms of production, the Other Services Business Field experienced the highest growth of 11.36 percent. Meanwhile, the Export of Goods and Services Component on the expenditure side experienced the highest growth of 7.63 percent.

The Indonesian economy in the fourth quarter of 2024 compared to the previous quarter experienced growth of 0.53 percent (q-to-q). From the production side, the Government Administration, Defense, and Mandatory Social Security Business Sector experienced the highest growth of 16.63 percent.

From the expenditure side, the Government Consumption Expenditure Component (PKP) experienced the highest growth of 38.58 percent.

During 2024, the group of provinces on the island of Java colored the structure and performance of the Indonesian economy spatially with a contribution of 57.02 percent and economic performance that recorded growth of 4.92 percent (c-to-c).

Evaluation of the Board of Directors Performance and Its Basis

Based on communication, observations and coordination meetings held between the Board of Commissioners and the Board of Directors, the Board of Commissioners assesses that the Board of Directors has carried out its duties and exercised its authority well for the progress of the company

Carrying out the aspirations of shareholders in carrying out their supervisory function and providing direction on the policies and management of the Board of Directors towards the Company, the Board of Commissioners appreciates the Board of Directors who have made efforts to maintain the existence of the company, by providing funds to finance the company's operations with funds owned by the Board of Directors.

In 2024, the Board of Directors has also obtained a Strategic Partner for equity financing and supports debt financing.

Based on the results of negotiations with Strategic Partners, the Board of Directors has prepared a Corporate Plan for the period 2025-2030, including:

Acquisition Plan for Mini Hydro Power Plants that have been operating with the aim that the company can record revenue;
Acquisition Plan for Green Field Large Hydro Power Plants, to achieve a Hydro Power Plants portfolio with a capacity of 1,000 megawatts in the next 5 years;
Plan to carry out Corporate Action on the Indonesia Stock Exchange in the form of a Right Issue and issuance of Green Bonds.

The Board of Commissioners assesses that there are increasingly good opportunities for the company's business prospects, which focus on providing power plants sourced from new and renewable energy, and in particular the company's current focus is hydro power plants.

The Board of Commissioners assesses that the Board of Directors has succeeded in running the company's operations efficiently and effectively. The Board of Directors and management have shown a high commitment to increasing productivity, managing risk, and ensuring compliance with applicable regulations.

The Board of Commissioners is actively involved in supervising the formulation and implementation of corporate strategies carried out by the Board of Directors. Through regular meetings, periodic financial reports, and performance evaluations, the Board of Commissioners ensures that the Board of Directors is accountable for the strategic decisions taken, while still considering the long-term interests of the company and stakeholders.

During the 2024 period, the Company has not recorded any operating revenues, because management is focused on obtaining Strategic Partners for the development of the company’s projects. As a result, the company’s bottom line recorded a significant loss.

The company’s Environmental, Social, and Governance (ESG) performance cannot yet be evaluated, considering that the company’s main business is not yet operational. However, Standard Operating Procedures (SOP) in this area have been prepared by management, because it is one of the components in the Green Bond Framework.

The Board of Commissioners encourages the Board of Directors of the parent company as well as the Board of Directors and Commissioners of the subsidiaries to accelerate the development process of the company’s PLTM, especially 5 (five) PLTM with a total capacity of 43.8 Megawatts, which already have a PJBL (PPA) with PT PLN (Persero) UID North Sumatra, so that it can create adequate income for the company, contribute to the Indonesian Carbon Exchange, and increase the share price and can provide returns for the company’s shareholders.

Supervisory Role of the Board of Commissioners to the Strategies Implemented by the Board of Directors and Frequency of Advice Provided to the Board of Directors.

The supervisory function is carried out by the Board of Commissioners, especially through the mechanism of meetings between the Board of Commissioners and the Board of Directors. The frequency of meetings between the Board of Commissioners and the Board of Directors in 2024 is 4 times.

In these meetings, the Board of Commissioners provides suggestions and advice to the Board of Directors, and ensures that the management of the company is carried out in accordance with the principles of Good Corporate Governance (GCG).

During 2024, the Board of Commissioners and Board of Directors held 4 (four) meetings. These meetings were used as a forum for the Board of Commissioners to conduct intensive, in-depth evaluations of various activities scheduled by the Board of Directors and how their implementation progressed.

The Board of Commissioners has submitted a number of recommendations to the Board of Directors regarding the management and implementation of the company’s strategies, including:

Prioritizing revenue generation for the company, whether through the acquisition of projects that are already operating and/ or accelerating the construction of 5 mini hydro power plants that already have PPAs with PT PLN;
Obtaining competitive funding and minimizing financial risks during project implementation.
Maintaining effective and efficient management of financial resources.

Views of the Board of Commissioners on Business Prospects Prepared by the Board of Directors

The Board of Commissioners assesses that the Corporate Planning agreed between the Board of Directors and Strategic Partners to achieve the portfolio target in the hydropower electric segment of 1,000 megawatts in the next five years is challenging and quite realistic. Challenging, because it requires strong financing support and/or access to adequate financing sources. Realistic, because the 1,000 megawatts target is still within the energy self-sufficiency target set by the Government, especially green energy self-sufficiency. This shows the company's seriousness in supporting the government's vision in increasing clean energy capacity in Indonesia.

The Board of Commissioners is optimistic that the Company will be able to face challenges and produce concrete results in the future and will achieve a significant increase in production in 2025.

However, the Board of Commissioners continues to emphasize that the Board of Directors focus on building and/or acquiring hydropower plants that are already operating, so that the company can record revenue in 2025, because this is the company's most prominent "weakness", resulting in the company's share price on the stock market falling below Rp51,-/share.

The Board of Commissioners’s perspectives of The Implementation of The Good Corporate Governance and Company’s Sustainability.

The Effectiveness of Committee’s Duties

The Board of Commissioners assesses that the implementation of corporate governance has met the principles of good corporate governance, including transparency, fairness, responsibility, independence, and fairness. Although operationally the company has not yet fully operated, because projects that have very large operational potential and will require the implementation of good corporate governance and are more complicated and require more attention and strict monitoring, have not yet occurred.

Of the existing committees, namely the Audit Committee, the Nomination and Remuneration Committee, which are under the supervision of the Board of Commissioners, and the Project Committee and the Green Bond Committee which are under the supervision of the Board of Directors; the one that has functioned effectively is the Audit Committee. Other committees will function optimally when the projects start building and operating. In 2024, the Audit Committee has held 4 (four) meetings with the Board of Directors and External Auditors.

Assessment of Sustainability Reports

The Board of Commissioners appreciates the steps taken by the Board of Directors in preparing sustainability reports that are carried out routinely, which is one form of implementing sustainability governance. Although it has not been able to fully describe the implementation of sustainability principles, considering the limited scope of application of these principles due to the company's projects not yet operating. However, the Board of Commissioners assesses that management has prepared internal guidelines and provisions that will be used as a foundation for implementing these sustainability principles.

Closing

Finally, we would like to express our thanks to all Terregra leadership and employees who have worked hard together to advance the company. To our business partners, we also express our gratitude for the support and trust they have given.

The Board of Commissioners also expresses its highest thanks to Shareholders, Regulators and all stakeholders who have provided support.

Hopefully this well-established collaboration can continue to be improved in the future.

Jakarta, 26 Juni 2025