Out of the total PT SHF financing assets of IDR 1.417 trillion, the portion of Electric Motorcycle Financing as of December 2024 amounts to IDR 40.6 billion.

Regarding opportunity and equality in employment, PT SHF provides equal opportunities for all Indonesian citizens to participate in PT SHF’s activities. The details are as follows:

Financing in 2024 can be presented as follows:

In distributing the above-mentioned financing, it is channeled through existing channels within PT SHF, consisting of 12 branches, one sales point branch, and the head office directly. PT SHF inclusively ensures the availability and affordability of access to its products and services through the presence of 12 offices on the island of Java, accompanied by financial literacy activities.

These activities also have a social impact through the recruitment of workers around the areas where PT SHF branch offices are located, and also create a multiplier effect / drive the local economy, thereby stimulating regional economic growth.

To support the sustainability of PT SHF in providing reminders to pay installments and / or late installments, it has used Whatsapp media as a means of communication which automatically reduces paper procurement costs.

As of the end of 2024, the Company has 12 Branch Offices and 1 Point of Sales (non-branch office) spread throughout the island of Java.

The Company's current business activities include multipurpose financing for used car purchases and financing for working capital and investments. Investment and working capital financing are primarily designated for corporate debtors, while multipurpose financing targets retail segments for consumptive purposes, especially for used car purchases on installment and cash needs.

Most of the Company's business operations are located on the island of Java, with the exception of corporate financing, which is located in Sumatra, Kalimantan, Sulawesi, and Maluku. For corporate financing, PT SHF collaborates with other Financing Companies, particularly those affiliated with South Korean ownership.

As part of implementing the principle of prudence, the credit approval ceiling for each level is kept relatively low for every credit application. The authority to make credit decisions is regularly reviewed and determined based on the recommendation of a Credit Committee and must be approved by the Company’s Board of Commissioners. This aligns with the prudent financing principles adopted by the Company.

The Company has a credit policy aimed at minimizing the level of non-performing loans in conducting its business. To manage its financing activities and maintain a good level of collectibility, collection activities are one of the key factors to the Company's success.

In 2024, no significant structural changes occurred within PT SHF. The company focused on electric vehicle financing and implemented risk mitigation measures to address potential losses arising from increasing overdue payments among corporate debtors.

The Company believes in the importance of consistent implementation of corporate governance at every level of the organization and in every corporate activity. The governance structure, which reflects the Company’s commitment to Good Corporate Governance (GCG), involves three core organizational bodies:

Rapat Umum Pemegang Saham (RUPS) / General Meeting of Shareholders (GMS)

The RUPS serves as a forum for shareholders to make strategic decisions regarding the Company’s continuity. A general RUPS is held at least once a year, while Extraordinary RUPS meetings are convened based on specific circumstances and/or requests from stakeholders, as stipulated in the Company’s Articles of Association. In addition to physical meetings, decisions may also be made via circular resolutions.

Board of Commissioners

The Board of Commissioners is responsible for the following:

1. Ensuring that the Company has an effective business strategy, including monitoring the timeline, budget, and effectiveness of that strategy.
2. Provide advice, feedback and or approval to the Company in this case the Director in every policy and decision that can affect the performance of the Company.
3. Directing, monitoring, and evaluating the implementation of the Company’s strategic policies.
4. The Commissioners are not involved in making decisions on the Company's operational activities, except in the case of providing funds to related parties and other matters determined in the Company's articles of association and/or the provisions of laws and regulations in order to carry out the supervisory function.
5. Ensuring that the Board of Directors has followed up on audit findings and recommendations from the Company’s internal audit unit, external auditors, oversight by the Otoritas Jasa Keuangan (OJK), and/or supervision results from other regulatory authorities.
6. Actively participating in the Company’s Audit Committee, Risk Monitoring Committee, and Nomination and Remuneration Committee.
7. Conducting and holding Board of Commissioners meetings at least once per quarter and joint meetings with the Board of Directors at least once per quarter.
8. Ensuring that PT Sinarmas Hana Finance upholds consumer protection practices that are fair and equitable to all stakeholders.

Board of Directors

The Board of Directors is responsible for managing the Company's operations and business activities. This structure is in accordance with Law No. 40 of 2007 concerning Limited Liability Companies and OJK Regulation No. 30/POJK.05/2014 on Good Corporate Governance for Financing Companies, as amended by OJK Regulation No. 29/POJK.05/2020.

In fostering a Sustainable Finance Culture, the Company has developed the Sustainable Finance Action Plan for 2023 and 2024, in which the overall implementation of sustainability governance is the responsibility of all stakeholders in the Company, including the Board of Commissioners and the Board of Directors, both of whom are actively involved in its supervision.

Duties of the Board of Directors:

1. The Board of Directors is fully responsible for carrying out its duties in the best interest of the Company to achieve its objectives and purposes.
2. Each member of the Board of Directors is required to perform their duties in good faith and with full responsibility, while adhering to the applicable laws and regulations.
3. The Board of Directors has the authority to represent the Company, both in and out of court, regarding all rights and matters, to bind the Company with other parties and vice versa, and to carry out all actions concerning both management and ownership. However, the following actions are subject to certain restrictions:
   1. Borrowing funds or issuing promissory notes, bonds, or other debt securities;
   2. Establishing subsidiaries or investing capital / equity participation or selling / transferring / releasing the Company’s interest in other companies;
   3. Approving business plans and annual budgets of other companies;
   4. Entering into agreements with Company affiliates (except for technical assistance contracts previously agreed upon by the shareholders);
   5. Any expenditures not included in the approved budget;
   6. Providing guarantees, indemnities, pledges, fiduciary security, appointments, encumbrances, or other forms of collateral over the Company's assets;
   7. Binding the Company as a guarantor for any third-party obligations;
   8. Making any investment (including acquiring land and buildings or other real estate rights); or
   9. Granting financing to customers (individual borrowers) for motor vehicle financing in the amount equivalent to USD 100,000 or more, using the foreign exchange rate issued by Bank Indonesia on the date of the financing agreement.

   Prior approval must be obtained from the Board of Commissioners’ meeting resolution.

4. The Board of Directors is prohibited from undertaking the following actions without obtaining prior written approval from the Board of Commissioners:
   1. Formulating general business policies; and
   2. Purchasing or disposing of non-operational fixed assets that may disrupt the Company’s business operations.
5. Any legal action to transfer, release rights over, or encumber the Company’s assets as a guarantor or pledge more than 50% (fifty percent) of the Company's net assets — whether in a single transaction or a series of related or unrelated transactions within one financial year — must be approved by the RUPS, attended or represented by shareholders owning at least ¾ (three-fourths) of the total issued shares with valid voting rights, and approved by at least ¾ (three-fourths) of the total valid votes cast in the RUPS.

1. Good Corporate Governance

   Overall, the Company’s governance is classified under Rating 1. During the monitoring process of the Company’s governance implementation in 2024, several challenges emerged in the Structure, Process, and Outcomes of Governance Implementation, which can be summarized as follows:

   1. Governance Process
      • In implementing risk management, the Standard Operating Procedures (SOP) for the Head Collection Coordinator Unit and Credit Control Unit are not yet available. Consequently, the guidelines regarding the authority and responsibilities of each function do not yet fully cover the main duties and functions (job descriptions) of the newly established work units. The SOPs are currently being finalized by the respective divisions.
      • In terms of risk management, a guideline for controlling uncollectible receivables (write-offs) is already in place. It is expected that in 2025, the process of receivables write-offs will be executed more effectively than in previous years.
   2. Governance Outcomes

      The Company’s strategic plan has been formulated based on future profitability opportunities and asset growth potential. At present, the Company has implemented a comprehensive study that includes market demand analysis, business competition, economic projections, and the identification of potential weaknesses, threats, and obstacles. This ensures that the plan can be executed in a more focused and optimal manner.

2. Risk Profile

   Overall, the Company’s Risk Profile is classified under Rating 2, and can be described as follows:

   

   Key Challenges Identified Across Risk Factors:

   1. Credit Risk
      • The majority of the Company’s financing products consist of working capital financing, which accounts for 74.63% of the total financing portfolio.
      • There is a concentration of 25 priority debtors, each with an outstanding balance of over IDR 5 billion, contributing to more than 61.75% of the total financing assets. This creates significant credit risk and the potential for a sharp rise in Non-Performing Financing (NPF) if any of these debtors default.
      • Financing growth increased by up to 4.96%, with the largest decline observed in multipurpose financing products.
      • As of December, the Gross NPF rate was recorded at 4.12%, which shows an improvement compared to November’s rate of 4.35%.
      • 25.04% of the financing portfolio is concentrated in the coal industry, which has remained relatively stable despite previous years of fluctuation driven by the global energy crisis. In December, coal prices declined, though several online forecasts predict a slight increase in January, but not significantly.
   2. Liquidity Risk

      There were no liquidity risk events that posed a potential loss to the Company in 2024.

   3. Operational Risk
      • The implementation of block leave policy has not been effective due to discrepancies in SHF's internal regulations. One regulation requires employees to take a minimum of 5 consecutive leave days, while another regulation aligns SHF’s internal leave cutoff with the Government leave calendar (in 2024, Government leave was 10 days, leaving only 1 day of internal leave available).
      • There were minor IT and server disruptions, most frequently involving mail server hosting & security providers (Exabytes & Vimana). External emails were often not received and had to be resent — an issue that has persisted for some time. The core system experienced a single disruption in 2024.
   4. Strategic Risk

      The realization of net profit achievement versus the business plan showed a significant shortfall of -525.59%, primarily due to increased loss reserves for delinquent accounts arising from higher non-performing loans and a decline in interest income in 2024. This issue spiked particularly in December 2024.

   5. Compliance Risk

      There were no compliance risk events that posed a potential loss to the Company in 2024.

   6. Legal Risk

      There were no legal risk events that posed a potential loss to the Company in 2024.

   7. Market Risk

      There were no market risk events that posed a potential loss to the Company in 2024.

   8. Reputational Risk

      There were no reputational risk events that posed a potential loss to the Company in 2024.

3. Rentability

   Overall, the Company's ability to generate profit was Ranked 4, based on 19 profitability indicators, as presented below:

   
4. Capital

   Overall, the Company's ability to raise capital or secure financial support was Ranked 2, based on 6 capital-related indicators, as presented below:

   

In order to support environmental conservation, the Company carries out environmentally friendly operational activities in accordance with commitments and plans made from year to year. The Company participates in environmental conservation efforts with the aim of creating a better life. The Company’s participation is realized through policies, strategies, and actions as outlined above such as reducing paper consumption, replacing air conditioning units with more energy-efficient ones, using tumblers which automatically reduce dishwashing soap, etc.

The Company’s commitment to the environment is manifested through the use of energy and materials in daily operational activities. The Company has policies on the effective and efficient use of energy and materials.

The policy of paper usage as one of the essential materials in operational activities continued in 2024. The Company implemented efficient paper usage. Employees are constantly encouraged to minimize the use of new paper and are further encouraged to reuse used paper that is still usable in the work environment.

The Company has also used photocopy and printer machines equipped with PIN & Job Storage features, allowing for control and monitoring of each use and printout according to actual needs.

In addition, the photocopy and printer machines used can print double-sided documents, which helps reduce excessive paper usage.

The practice of efficient and prudent electricity usage continued in 2024. The Company adheres to the policy of the building management where the Company rents office space, which utilizes electricity supplied by the Perusahaan Listrik Negara (PLN).

The implemented electricity usage policy includes limiting the use of air conditioning from 08:00 to no later than 17:00 WIB, and limiting lighting to only areas that are still actively in use.

The Company does not record the usage of paper, water, or electricity in volume. Instead, the recording of energy and material usage is done in the form of monthly expenses incurred by the Company as a whole.

E-Memo is a software developed internally by the Company with the aim of simplifying and accelerating daily approval processes. Previously, such approvals required paper usage, excessive printer ink, and wet signatures from relevant parties up to the management level. Now, with the E-Memo system, everything is easier and runs smoothly.

Paper usage has been reduced by up to 65%, and printers are now rarely used. Although there are still a few matters that require paper, ink, and wet signatures—such as important and valuable documents.