Structural Reforms and Synergy Creation A3: We became a stronger, leaner company by consolidating domestic factories and exiting unprofitable businesses. JS Group Corporation Annual Report 2010 16 Profit Creation Through Structural Reforms and Synergies Q3: What were some of the structural reforms you made and synergies you created during the year ended March 31, 2010? What kind of effect have they had? he structural reforms carried out during the past fiscal year were geared toward becoming a  stronger, leaner company capable of generating profits even during a challenging business  environment. With these efforts, we eliminated some parts of our operations that might have hin- dered future growth. T Specific initiatives included exiting certain unprofitable businesses such as the building materials  business conducted under the Inax brand, and the closing of five Tostem production sites. Further- more, we consolidated production in the Plumbing Fixtures Business and cut personnel costs  through various measures, including an early retirement program. These efforts resulted in a ¥12.0  billion reduction in costs during the year ended March 31, 2010. In the year ending March 31, 2011, the newly created Structural Reform Headquarters will lead  Group-wide business inspections, restructuring unprofitable businesses, and examining cost structures. By continuing the measures we started in the year ended March 31, 2010, we expect to estab- lish a business platform that will allow us to achieve an operating income ratio of 5% in our mainstay  businesses in the year ending March 31, 2011. In our next medium-term management plan, to be  launched in the year ending March 31, 2012, we will factor in higher profitability by linking these  structural reforms with the aforementioned synergies among Group companies. Main Initiatives The Year Ended  March 31, 2010 Result The Year Ending  March 31, 2011 Plan $^{■}$  Factory consolidation, withdrawal from unprofitable  businesses, manufacturing cost reductions ¥12.0  billion ¥20.7  billion ■ $_{ }$Business reforms ■ $_{ }$Plumbing Fixtures Business optimization ■ $_{ }$ Joint purchasing, joint distribution synergies (JS Supply Corporation) $^{■}$  Personnel expense reductions (including early retirement program) ■ $_{ }$Synergies with Shin Nikkei ■ $_{ }$Distribution reforms