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Hermanto Tanoko

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Hermanto Tanoko

President Commissioner

Indonesian Citizen, domiciled in Surabaya. Born in Malang, on September 17, 1962.

He has served as President Commissioner of PT Avia Avian Tbk since 1996.

Message from the Board of Commissioners

Dear Valued Shareholders and Stakeholders,

We offer our praise and gratitude to God Almighty for His grace, which has enabled Avian Brands to conduct its business activities throughout 2025 in a focused and controlled manner amidst a continually evolving business environment. We believe that 2025 was a period that demanded sharp decision-making and prudence in business management, amid increasing global uncertainty, intensified industrial competition, and stakeholder demands for sustainable performance.

In exercising our oversight function, we actively evaluated the adequacy of strategies, the effectiveness of their implementation, and the Board of Directors' consistency in maintaining a balance between business growth and Good Corporate Governance (“GCG”) principles. Based on our monitoring and assessment conducted throughout 2025, the Board of Directors has demonstrated adequate adaptability and managerial discipline, allowing Avian Brands to maintain stable operational and financial performance and safeguard its competitive position within the national paint industry.

We also view the theme “Leading with Color, Inspiring with Sustainability” as a reflection of Avian Brands' leadership direction in facing the future industrial landscape. This theme not only reflects excellence in generating growth but also underscores the importance of integrating sustainability aspects into every strategic decision. We believe that this approach serves as a vital foundation for creating long-term value, strengthening stakeholder trust, and ensuring the business continuity of Avian Brands. Furthermore, we present our further views and evaluation of the performance, governance, and business prospects of Avian Brands, as follows:

Economic and Industrial Conditions in 2025

We observed that throughout 2025, the global economy remained in an adjustment phase characterized by increasing economic fragmentation, trade policy uncertainty, and a slowdown in medium-term growth. Projections of slowing global economic growth, accompanied by uneven inflation dynamics across countries, required business players to manage external risks in a more meticulous and adaptive manner. In this context, we view the global macroeconomic stability, which has not yet fully recovered, as a significant factor that needs to be anticipated constantly, in the formulation and evaluation of Avian Brands' future strategies.

At the national level, we assess that the Indonesian economy demonstrated relatively strong resilience amidst global pressures. Maintained economic growth, supported by domestic demand, government spending, and accommodative fiscal and monetary policies, provided space for the business landscape to remain productively active. Inflation within a controlled range and interest rate cuts by Bank Indonesia further strengthened the business climate throughout 2025. Nevertheless, we emphasize the importance of remaining vigilant toward potential future volatility, particularly concerning changes in global policy and financial market dynamics, to ensure the continued performance of Avian Brands.

Within this framework, we observe that although the national macroeconomy has demonstrated relatively strong resilience, its impact on sectoral performance has not been fully uniform. In the paint and coatings industry, production activities have generally returned to an expansionary phase; however, the recovery of market demand remains gradual amidst ongoing external pressures and increasing customer caution. Furthermore, global geopolitical dynamics and fluctuations in raw material prices continue to exert pressure on industrial cost structures, thereby necessitating more disciplined and adaptive business management.

Supervision on Formulation and Implementation of Avian Brands' Strategies

We believe that the strategies formulated and implemented by the Board of Directors throughout 2025 adequately considered industrial dynamics, market conditions, and the operational challenges faced by Avian Brands. Through our continuous oversight function, we reviewed the adequacy of strategic directions, consistency in their implementation, and the alignment between work plans and performance realization. This approach was taken to ensure that the strategies implemented are capable of maintaining Avian Brands' competitiveness while supporting business sustainability in the medium and long term.

Throughout 2025, we noted the implementation of various strategic initiatives focused on strengthening distribution networks, developing product portfolios and quality, increasing operational efficiency, and expanding market segments. We assess that these steps were executed in a structured and measured manner, supported by relatively effective resource management. Furthermore, improvements in research and development capabilities, the adoption of information technology, and the enhancement of customer service quality are viewed as vital factors in maintaining market dominance and the stability of Avian Brands' performance amidst tightening industrial competition.

In exercising our oversight function, we also paid close attention to execution discipline, risk control, and the application of GCG principles in every strategic initiative. We assess that the Board of Directors has demonstrated a commitment to managing business growth prudently, by consistently paying attention to efficiency, quality, and performance continuity. Moving forward, we will continue to encourage the refinement of Avian Brands’ strategies and their implementation, so that Avian Brands remains adaptive to changes in the business environment and capable of maintaining sustainable performance.

Frequency and Method of Providing Advice to Avian Brands’ Board of Directors

In conjunction with the foregoing, we performed our advisory function to the Board of Directors continuously throughout 2025. Advice was provided through various media, including joint meetings of the Board of Commissioners and the Board of Directors, as well as meetings with supporting committees, with frequency adjusted to the needs and dynamics of business management. Through these forums, we provided strategic input, independent views, and constructive direction regarding Avian Brands' management policies and steps.

Beyond formal mechanisms, we also conveyed advice and views to the Board of Directors through incidental and thematic communications, particularly in response to strategic issues, industrial developments, and potential risks requiring immediate attention. This approach allowed us to provide timely and relevant input without compromising GCG principles. Every advice provided was aimed at strengthening the quality of decision-making, increasing the effectiveness of strategy implementation, and maintaining a balance between performance achievement and risk management.

Through this structured and adaptive frequency and mechanism of providing advice, we assess that the working relationship with the Board of Directors has been effective and professional. The established synergy allows for a healthy process of checks and balances while ensuring that the management of Avian Brands consistently remains within the corridors of GCG principles and is oriented toward long-term interests.

Assessment of the Performance of Avian Brands’ Board of Directors

We have assessed the performance of the Board of Directors of Avian Brands throughout 2025 based on operational achievements, financial performance, and the execution of strategic initiatives established in the work plan. This assessment was conducted by considering the challenging business environment, competitive industrial dynamics, and stakeholder expectations regarding the long-term sustainable performance of Avian Brands. Based on these evaluation results, we assess that the Board of Directors has performed its management function of Avian Brands effectively and responsibly, thereby maintaining performance stability while safeguarding Avian Brands’ competitive position in the national paint industry.

From an operational perspective, we note that the Board of Directors managed production capacity and manufacturing activities in a measured manner, optimizing the role of existing production facilities and supporting sustainable product innovation. Efforts to strengthen the product portfolio through new product launches, reinforcing portfolios with SNI, TKDN, and GLS certifications, and maintaining consistent product quality and standards are viewed as relevant steps in responding to market needs and strengthening Avian Brands' competitiveness. We assess that this approach reflects a balance between volume growth, product quality, and operational efficiency.

Regarding financial performance, we assess that the Board of Directors demonstrated adequate financial management discipline, reflected in Avian Brands' ability to maintain growth in sales performance, manage cost structures, and sustain profitability levels amidst market dynamics. We view the contribution of business segments as having been managed proportionately, with a focus on segments with higher growth potential and added value. We also note that Avian Brands' financial management remains prudent, prioritizing the principles of caution and business viability.

In addition to operational and financial achievements, we welcome the steps taken by the Board of Directors in realizing strategic initiatives that support the medium and long-term growth of Avian Brands, including strategic investments aimed at strengthening portfolio synergy and expanding business capabilities. External recognition and awards received by Avian Brands throughout 2025 are also viewed as indicators of consistent performance, high-quality governance, and a commitment to innovation and sustainability. Overall, we assess that the performance of the Board of Directors throughout 2025 was aligned with the interests of Avian Brands and its stakeholders, while acknowledging areas for refinement that will be prioritized in future oversight.

Views on Avian Brands' Business Prospects

We view Avian Brands' future business prospects as remaining in a positive direction, despite ongoing global challenges. The increasingly fragmented international economic landscape, with projected slowing global growth and medium-term structural pressures, demands adaptive and prudent business management. In this context, we assess that the stabilization of global inflation and the continued adjustment of monetary policies in various countries may provide space for a gradual improvement in the business climate, although external risks must be continuously monitored.

At the national level, we assess that the resilience of the Indonesian economy serves as a vital supporting factor for Avian Brands' business prospects. The government's optimism regarding 2026 economic growth, supported by domestic demand, fiscal and monetary policy support, and the strengthening of international trade agenda, provides a relatively conducive foundation for the business world. These conditions are seen as capable of maintaining momentum in the property and construction sectors, which are closely linked to the demand for paint and coating products.

In line with these developments, we believe the national paint and coatings industry still possesses long-term growth potential, as reflected in per capita consumption levels that are relatively lower than regional peers. Although the industry growth rate in the short term may be influenced by the potential weakening of purchasing power, we assess that the structural potential of the industry remains intact. In facing these conditions, we view Avian Brands' focus on strengthening operational segments, operational efficiency, product innovation, and disciplined risk management as key factors in ensuring performance sustainability and reinforcing Avian Brands' position amidst future industrial dynamics.

Views on the Implementation of Good Corporate Governance

We believe that the implementation of GCG at Avian Brands throughout 2025 was carried out consistently and integrated into business management. GCG implementation focuses not only on regulatory compliance but is also directed toward supporting accountable, transparent, and responsible decision-making. We assess that the implemented governance structure has provided clarity of roles and authority between the General Meeting of Shareholders (“GMS”), the Board of Commissioners, the Board of Directors, and supporting committees and units, ensuring that the mechanisms of checks and balances operate effectively.

In exercising our oversight function, we note that Avian Brands' internal control and risk management systems have been designed and implemented to support the achievement of operational objectives, the reliability of financial reporting, and compliance with laws and regulations. The roles of the Audit Committee and the Internal Audit Unit in conducting independent and continuous evaluations are deemed to have provided reasonable assurance regarding the effectiveness of internal controls. We also assess that risk management has been integrated into the strategy planning and implementation process, enabling Avian Brands to manage risks proactively and in a measured manner.

Furthermore, we view that the Whistleblowing System (“WBS”), as a means of reporting violations, has contributed to the creation of a culture of integrity and compliance within Avian Brands. The reporting mechanism, which guarantees confidentiality and protection for whistleblowers, is considered an essential element in strengthening governance and stakeholder trust. Overall, we assess that the implementation of GCG at Avian Brands throughout 2025 has been successful and serves as a strong foundation for supporting business sustainability and Avian Brands' resilience in facing future business environment dynamics.

Views on the Implementation of Sustainability Principles

We believe that the implementation of sustainability principles at Avian Brands throughout 2025 was consistently integrated into strategy and operations through a 4-pillars sustainability approach: Product, Environment, People & Community, and Governance. Through our oversight, we assess that this sustainability framework has provided clear direction for the Board of Directors in balancing business performance with responsible management of economic, social, environmental, and governance impacts.

From the evaluations conducted, we note that the sustainability initiatives implemented have covered the strengthening of product quality and safety, more efficient and measured environmental management, enhancing the welfare and development of human resources, and reinforcing integrity through sustainable governance and supply chain practices. Overall, we assess that the application of sustainability principles has become an essential foundation in supporting Avian Brands' resilience and long-term value, while continuing to encourage continuous refinement in line with the evolution of the business environment and stakeholder expectations.

Closing

In closing, we express our appreciation and gratitude to the Board of Directors of Avian Brands for their leadership, dedication, and management efforts demonstrated throughout 2025. Appreciation is also extended to all Avian Brands employees for their contribution, professionalism, and hard work, which serve as the primary foundation for sustainability and growth. We also convey our thanks to the Shareholders for their continued trust and support, as well as to all stakeholders, including customers, business partners, suppliers, and regulators, for their constructive cooperation and relationships. With the maintained synergy of all parties, we are optimistic that Avian Brands can continue to strengthen its business resilience and create sustainable long-term value.

On behalf of the Board of Commissioners

PT Avia Avian Tbk,

Hermanto Tanoko

President Commissioner

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