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1. To engage in industrial businesses, among others, furniture and wood, wood and cork products,
and bamboo and rattan wickerwork industries and other similar industries. 2.
To engage in trade, including export-import, inter-island and local trade, of products produced independently or by other parties that are marketed by the Company; act as a wholesaler,
purveyorsupplier, franchisee, and commission house and other related business activities; act as a distributor, agent and representative of other domestic and international enterprises; and trade of
the industrial products referred to above.
3. To engage in services business, except for legal and tax services.
Supporting Business Activities:
Creative business activities relating to the creation of graphic design, interior design, product design, industrial design, corporate identity consulting, market research service and product packaging services,
and packaging services.
Current Main Business Activities:
The Company’s current business activities are focused on the of production of wood-based furniture and other wooden products, forestry concession and furniture distribution, as well as home decorations
through the Group.
2. FACTORS AFFECTING THE COMPANY’S FINANCIAL CONDITION AND RESULTS
The Company’s business activities and operations are affected by a number key factors, such as:
a. Foreign exchange rate fluctuations
The Company’s export revenue is denominated in USD, whereas the majority of its expenses is denominated in Rupiah. Pursuant to Bank Indonesia Regulation No. 173PBI2015 concerning
Mandatory Use of Rupiah Within the Jurisdiction of the Republic of Indonesia, the Company’s transactional currency for domestic transactions such as payment of salaries and wages,
procurement of materials from domestic companies and other operating expenses is Rupiah. The Company’s consolidated financial statements are prepared in Rupiah. Therefore, any fluctuation in
the exchange rate between the USD and the Rupiah will affect the accounting of the Company’s export revenue in the Company’s consolidated financial statements, which may result in fluctuations
of the Company’s export revenue and profit, which are recorded in Rupiah.
b. Business competition
The Group faces business competition from domestic and international companies. In response to such business competition, the Company implements promotional and marketing programs,
including the offering of competitive sales prices to maintain its customer base. Although an increase in promotional and marketing costs may result in lower profit as a result of increased costs, the
Company seeks to implement its promotional and marketing programs in an efficient and effective manner to minimize the increase of costs.
c. Increase in production cost
Any increase of the regional minimum wage, the price of fuel used for product transportation, electricity cost and raw material cost although historically, the price of wood raw materials are
relatively stable may increase production cost and consequently lower the Company’s profit if such increase in production cost is not offset by an increase in sales price.
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d. Loan interest rate
The interest rate risk of the Company primarily comes from bank and non-bank financial institution loans obtained by the Company as the fair value of future cash flows may fluctuate arising from the
changes in market interest rates. The Company manages this risk by constantly monitoring the prevailing market interest rates movements and managing the availability of cash flows used to
repay loans and working capital.
3. SIGNIFICANT ACCOUNTING POLICY CHANGE
