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While the Group’s operations are labor intensive, machinery and technology is also required to efficiently produce furniture and building components. Should the Group’s competitors be able to adopt new
technology more quickly, the Group may lose its ability to price its products competitively.
6.3. GENERAL RISK FACTORS
Risk relating to macroeconomic and global economic conditions
Macroeconomic or global economic conditions have an influence on the performance of companies operating in Indonesia, including the Company. The strengthening or weakening of the economy may
directly affect the level of demand and supply for retail products in the country. In addition, it may indirectly affect countries that trade with the country undergoing changes in economic condition.
Accordingly, if there is a change in the economic condition of Indonesia and countries that trade with Indonesia, it may have an impact on the financial performance of the Group.
Risk relating to the benchmark interest rate for loans
The interest rate risk of the Group primarily arises from loans for working capital and investment purposes. These loans have various variable interest rates, indicating the Group to the fair value of
interest rate risk. Increased lending rates will therefore also have significant adverse impact to the Company’s performance.
Risk relating to claims or legal suits
The Group may be exposed to disputes and legal proceedings in the course of conducting their business activities, including those relating to the Group’s products, employee claims, labor disputes or contractual
disputes or any other disputes that may have material and adverse impact on the Group’s reputation, operational and financial condition. The Group is not currently involved in legal disputes or material
investigations by the Government and the Group is not aware of any ongoing material claims or legal proceedings. In the event that the Group is engaged in a material and prolonged dispute or legal
proceeding, there is no assurance that the outcome of such proceeding will be favorable and the settlement or outcome of such proceeding may adversely affect the financial condition of the Group. In
addition, any litigation or legal proceeding may result in substantial court cost and the time and attention of the Group’s management, which may have a material adverse impact on the Group’s financial
performance.
6.4. RISK FACTORS FOR INVESTORS
