SERN KOU FURNITURE INDUSTRIES SDN. BHD. Malaysia

SERN KOU FURNITURE INDUSTRIES SDN. Bhd. . On the global front, competition from manufacturers from emerging economics within the region has caused downward pressure on the pricing of home furnishing product in the world market. The uncertainty in demand for housing and the drop in consumer spending in the United States of America had also resulted in lower demand for home furnishing products. Apart from stiff competition in the consumer market, manufacturers are also competing for supplies of raw materials, particularly wood-based raw materials. The shortage in supply has directly caused a significant increase in the cost of wood-based raw materials. The appreciation of the Malaysian Ringgit against the US Dollar during the year under review, has also diluted the value of exports and therefore affected the competitiveness and profit margin of the Group. The factors mentioned above had also affected the Group's net profit margin, whereby the Group recorded a 1% drop in its net profit margin from 6. 6% in preceding year to 5. 5% for the year under review. Despite the challenging and competitive market, the Group managed to maintain its remarkable financial performance as a direct result of the Group's strategic planning on product development and marketing. With well planned strategies for developing new products and identifying new markets to widen the Group's export reach, the Group is optimistic of the prospects of Group's operations despite the uncertainties in the global market and the appreciation of the Malaysia Ringgit. The Group is committed and will comply with corporate governance best pratices to enhance shareholder value and the financial performance of the Group.