Risk of Failure in Developing Hybrid Seed Products
The Company is continuously conducting development of seed products that meet market conditions and requirements. Thus far, the capability of the Company to develop seed products that are in line with market conditions and requirements represents one of the Company’s key success factors. The development process requires a large amount of funds, a relatively long period of time, and qualified human resources. Therefore, failure in development could result in the Company being unable to produce the products that meet market conditions and requirement. This failure may ultimately affect the performance of the Company.

Risk of Product Forgery
The Company has been successful in uncovering cases of forged seeds produced by the Company. Such cases might happen again in the future, which would affect consumer trust in the Company’s products and ultimately affect the revenues of the Company.

Risk of Changes in Government Regulation and Policy
The main seed products of the Company represent the types of food plants which are regulated by the government, namely corn and paddy. Currently, the government supports the use of hybrid seeds for these types of plants. In the future, there is a possibility that the government will offer less support to the use of hybrid seeds, which may have a negative impact on the performance of the Company.

Fluctuation of Market Prices for the Company’s Products
The prices of the products of the Company depend on global market prices, which are based on changes in the production levels of the world’s industrial products, global demand and global economic conditions, that always cyclically fluctuate in its entirety. Fluctuation in global market prices may affect the product prices of the Company and the interest of farmers in planting particular varieties, which then ultimately impacts the revenues of the Company.

Risk of Business Competition
At the moment, there are many seed producing companies and companies trading in corn, vegetable and paddy seeds, not just the big concerns, but also small-scale companies. In addition, there are imported products that compete with local products in the market. This fierce competition may result in a decrease in the Company’s market share and ultimately, may affect the revenues of the Company.

Risk of Fluctuation in Foreign Currency Exchange Rates
All raw materials in pesticide production in Indonesia use imported pesticides in the form of finished goods including fertilizer, and part of the raw material vegetable seed productions are imported products and, consequently, fluctuations in foreign currency exchange rates may affect the cost of goods sold. On the other hand, selling prices cannot always be adjusted to reflect fluctuations in foreign exchange rates. This condition may affect the revenues of the Company.

Risk from Pests and Plant Diseases
In producing seeds, the Company deals with threats from different kinds of pest attacks and plant diseases. The Company’s management has taken preventive measures through intensive cultivation. Although, there is no assurance that pest attacks or plant diseases can always be controlled in a reasonable condition. If a serious attack from pest or disease occurs, production will decrease and ultimately the revenues of the Company will be affected. Aside from that, farmers as the Company’s customers are also exposed to the risk of pest attack and plant diseases, which may decrease their income and purchasing power, and in turn these factors may have a negative impact on the Company’s performance.

Risk of Extreme Change in Climate
To produce quality seeds, both in the development and breeding processes, a specific controlled climate condition is required. An extreme change in the climate may lead to failure to fulfill the expected standard for seed production, ultimately affecting the Company’s performance. In addition, farmers as customers of the Company also need a climate that is favorable to the growth of their plants for better harvests. Extreme changes in the climate may decrease their revenues and purchasing power, which may ultimately have a negative impact on the Company’s performance.

Risk of Human Resources
The Company is expected to constantly produce preferred varieties of seeds for the farmers. Therefore, the Company should have specialists who work as plant breeders or bio-technological laboratory personnel. The unavailability of such specialists may hamper the continued development of plants and ultimately may hinder the production process of products required by the market.

Risk of Failure in Developing Hybrid Seed Products
The Company is continuously conducting development of seed products that meet market conditions and requirements. Thus far, the capability of the Company to develop seed products that are in line with market conditions and requirements represents one of the Company’s key success factors. The development process requires a large amount of funds, a relatively long period of time, and qualified human resources. Therefore, failure in development could result in the Company being unable to produce the products that meet market conditions and requirement. This failure may ultimately affect the performance of the Company.

Risk of Product Forgery
The Company has been successful in uncovering cases of forged seeds produced by the Company. Such cases might happen again in the future, which would affect consumer trust in the Company’s products and ultimately affect the revenues of the Company.

Risk of Changes in Government Regulation and Policy
The main seed products of the Company represent the types of food plants which are regulated by the government, namely corn and paddy. Currently, the government supports the use of hybrid seeds for these types of plants. In the future, there is a possibility that the government will offer less support to the use of hybrid seeds, which may have a negative impact on the performance of the Company.

Fluctuation of Market Prices for the Company’s Products
The prices of the products of the Company depend on global market prices, which are based on changes in the production levels of the world’s industrial products, global demand and global economic conditions, that always cyclically fluctuate in its entirety. Fluctuation in global market prices may affect the product prices of the Company and the interest of farmers in planting particular varieties, which then ultimately impacts the revenues of the Company.

Risk of Business Competition
At the moment, there are many seed producing companies and companies trading in corn, vegetable and paddy seeds, not just the big concerns, but also small-scale companies. In addition, there are imported products that compete with local products in the market. This fierce competition may result in a decrease in the Company’s market share and ultimately, may affect the revenues of the Company.

Risk of Fluctuation in Foreign Currency Exchange Rates
All raw materials in pesticide production in Indonesia use imported pesticides in the form of finished goods including fertilizer, and part of the raw material vegetable seed productions are imported products and, consequently, fluctuations in foreign currency exchange rates may affect the cost of goods sold. On the other hand, selling prices cannot always be adjusted to reflect fluctuations in foreign exchange rates. This condition may affect the revenues of the Company.

Risk from Pests and Plant Diseases
In producing seeds, the Company deals with threats from different kinds of pest attacks and plant diseases. The Company’s management has taken preventive measures through intensive cultivation. Although, there is no assurance that pest attacks or plant diseases can always be controlled in a reasonable condition. If a serious attack from pest or disease occurs, production will decrease and ultimately the revenues of the Company will be affected. Aside from that, farmers as the Company’s customers are also exposed to the risk of pest attack and plant diseases, which may decrease their income and purchasing power, and in turn these factors may have a negative impact on the Company’s performance.

Risk of Extreme Change in Climate
To produce quality seeds, both in the development and breeding processes, a specific controlled climate condition is required. An extreme change in the climate may lead to failure to fulfill the expected standard for seed production, ultimately affecting the Company’s performance. In addition, farmers as customers of the Company also need a climate that is favorable to the growth of their plants for better harvests. Extreme changes in the climate may decrease their revenues and purchasing power, which may ultimately have a negative impact on the Company’s performance.

Risk of Human Resources
The Company is expected to constantly produce preferred varieties of seeds for the farmers. Therefore, the Company should have specialists who work as plant breeders or bio-technological laboratory personnel. The unavailability of such specialists may hamper the continued development of plants and ultimately may hinder the production process of products required by the market.