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GRC Implementation Supports PT SMI's Sustainable Business

As a government-owned company/Non-Bank Financial Institution for Infrastructure Financing, PT Sarana Multi Infrastruktur (SMI) is well aware of the importance of the role of Governance, Risk and Compliance (GRC) in running the company's business.

PT SMI believes that the implementation of GRC in the company will be able to improve the Company's performance and strengthen its integrity in providing added value to shareholders and stakeholders as well as assisting the national economy in its role as a Catalyst and/or Facilitator for Project Owners and Funders/Investors in the context of financing infrastructure and /or preparation of Indonesian infrastructure.

This was conveyed by the President Director of PT SMI Edwin Syahruzad in an interview for the judging of the 2022 TOP GRC Awards which was held virtually recently by Top Business Magazine.

“Since its establishment on February 26, 2009, PT SMI is expected to be a catalyst in supporting the acceleration of national infrastructure development. Therefore PT SMI continuously shows its support for the achievement of sustainable development goals. For this reason, we view that a good GRC implementation is an important element that supports this goal,"

Edwin said that in implementing Good Corporate Governance (GCG) as an element of GRC, PT SMI is committed to consistently implementing GCG based on the main GCG values, namely Transparency, Accountability, Responsibility, Independence, and Fairness and Equality. The implementation of GCG policies that have been carried out include;

First, the Self Assessment of the Company's Health Level, which in 2021 for the first time carried out an independent assessment and submitted the results of the assessment to the OJK which included the factors of Good Corporate Governance, Risk Profile, Profitability, and Capital with a Composite Rating of 1 (PK-1) where the Company in general has a very healthy condition so that it is considered very capable of dealing with significant negative influences from changes in business conditions and other external factors which as a whole is reflected in the rating of the assessment factors which are generally very good.

"As for the determination of the results of PT SMI's health level assessment at the end of December 2021, namely in the field of corporate governance we got first place, risk profile ranked second, profitability and capital ranked first and composite ranking also got first rank," said Edwin.

"We have also carried out a GCG assessment conducted by BPKP where in 2020 we got a GCG score of 87.72 with a very good predicate and increased in 2021 to 88.78 also with a very good predicate," continued Edwin.

Second, the implementation of the Internal Control System Assessment (SPI) at the Entity level in 2021. In order to review and assess the effectiveness of the Company's SPI at the entity level, PT SMI also for the first time carried out an assessment of the Company's SPI conducted by BPKP.

"The scope of the assessment by BPKP includes all elements that support the implementation of the 2021 SPI which is divided into five testing components, namely the control environment, risk assessment, control activities, information and communication, and monitoring (monitoring). The results of the evaluation on the implementation of SPI in the Company in 2021 showed a total achievement of 84.16 from a maximum value of 100 with the title "Effective," said Edwin.

Third, the implementation of the Whistleblowing System (WBS). The implementation of the whistleblowing system through the Whistleblowing System (“SPP PT SMI”) is implemented through the http://spp.ptsmi.co.id/ site, with the format set out in the Whistleblowing System Guidelines (Whistleblowing Guidelines).

“PT SMI also regulates parent-subsidiary relationship guidelines where there are several guidelines that have been issued for 4 subsidiaries of PT SMI. Finally, on March 31, 2022, PT SMI issued guidelines for the Equity Participation Procedure for Infrastructure Financing Companies and on April 18, 2022, issued guidelines for the Equity Participation Procedure for Infrastructure Companies," he said.

In addition, PT SMI has also regulated the procurement system for goods and services based on five principles, namely efficient, effective, transparent, accountable and fair. In its implementation, PT SMI's Multinational Procurement in cooperation with the World Bank complies with the World Bank's “Guidelines: Procurement under IBRD Loans and IDA Credits,” dated January 2011, revised July 2014 and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers,” dated January 2011, revised July 2014.

“The implementation of the procurement process and stages is carried out through Vendor Management and the E-Procurement System. We have also implemented an Integrity Pact on Procurement Operators and Providers, conducted a Vendor Satisfaction Survey and Performance Evaluation of the Partner List and this system of goods and services procurement has become an agenda for the Board of Commissioners' supervision on a regular basis," said Edwin.

Meanwhile, in terms of Risk Management, PT SMI is committed to maintaining stakeholder trust and complying with all regulations. Thus, the Company identifies and continuously monitors all types of risks and how these risks may affect the Company.

"PT SMI has implemented a risk management function to help prevent losses that have the potential to disrupt business continuity while continuing to carry out its mandate as a driver of national infrastructure development," he said.

The implementation of risk management policies is carried out in five stages, starting from identifying risk profiles, measuring risk maturity levels, implementing ISO 31000, Risk management – ​​Guidelines, implementing Three lines of defense to implementing Business Continuity Management (BCM).

Maintain Good Performance during the Pandemic

Meanwhile, even in the midst of the economic impact of the pandemic, SMI was still able to record total asset growth of up to 12 percent (year-on-year/yoy) at the end of 2021. Based on SMI's financial report published in the Indonesian Business Daily, this total asset is exactly Rp. 114 .5 trillion, from the previous Rp100.74 trillion in 2020.

The growth of BUMN assets with the status of Special Mission Vehicles (SMV) under the coordination of the Ministry of Finance is mainly a contribution to the growth of outstanding net loans disbursed, from Rp. 64.95 trillion in 2020 to Rp. 74.75 trillion in 2021.

For information, financing or investing in infrastructure projects is SMI's main business. Others, there are consulting and project development services such as helping the Cooperation Project Manager (PJPK) to prepare infrastructure projects.

Last year, SMI was also greatly helped by the government's mandate, namely the granting of access to loans to local government economic recovery projects or activities (PEN Pemda). This mandate aims to make it easier for local governments to be able to build the strategic infrastructure projects they need, in the midst of a large budget being sucked in to handle the Covid-19 pandemic. For example, health facilities, drinking water projects (SPAM), dams, flats, to transportation.

The large number of needs from these projects can also be seen from the cash flow related to the distribution of loans provided by SMI, where from the 2020 period of Rp. 17.76 trillion, it rose to Rp. 21.48 trillion in 2021.

Finally, judging from the profit and loss performance, SMI managed to record a net profit of Rp1.83 trillion, a slight decrease from the previous period of Rp1.9 trillion. For information, SMI is one of the top ranks of BUMN that diligently contributes dividends or state assets are separated for the state budget. If according to the 2021 APBN plan, from the profit and loss performance, SMI is pegged to contribute Rp600 billion.



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