BOARD OF DIRECTORS' REPORT

1. Post-integration business alignment through operational and commercial standardization and integration to improve service quality.
2. Integrated investments for business development.
3. Company reorganization and integrated culture development.

In the Business Alignment and Integration phase, strategic initiatives to be carried out at the planning and execution stages in 2022 include:

1. Strategic Initiatives Planning Phase in 2021:
1. Digitization and systemization of port operations.
2. Development of port infrastructure and equipment.
3. Additional marine service offering for Pelindo key accounts.
4. Integrated capital allocation.
5. Organizational restructuring.
6. Shared service function development.
7. Centralized knowledge management.
8. Internalization of Pelindo integrated culture.
2. Strategic Initiatives Implementation Phase in 2021:
1. Standardization of port operations.
2. Integrated key account management.
3. Reducing/optimizing financing costs.
4. Joint/centralized procurement.
5. Asset optimization.
3. Strategic Initiatives in the Planning and Implementation Phase in 2021:
1. Cluster creation and business model.
2. Optimization of core and non-core businesses to expand access to funding.
3. Integrated Learning and Development (L and D) program for standardization and quality HC improvement.
4. Implementation of enterprise architect and IT Masterplan.

CORPORATE GOVERNANCE

The application of the Good Corporate Governance (GCG) principles will contribute to improving the Company’s performance. In running its business, Pelindo previously a combination of Pelindo I, Pelindo II, Pelindo III and Pelindo IV always applied GCG principles in all business activities. These principles are applied in the Company’s business include transparency, accountability, responsibility, independence fairness and trusted. These six principles are applied through the commitment to the sustainable implementation of good corporate governance, fulfilling the interests of Shareholders, the Board of Commissioners and the Board of Directors duties and responsibilities, as well as information disclosure and transparency.

Pelindo understands the importance of applying GCG principles as a way to increasing Shareholder and Stakeholder trust. Pelindo’s management, in addition to complying with applicable laws and regulations, must also uphold the norms of behavior and business ethical values to improve the Company’s reputation and image. To that end, the Company has already established