Overseas Development Q5: Please discuss your future overseas business expansion plans. A5: We will continue to develop our business in the fast-growing Chinese market and cultivate new  demand in Vietnam, where our business is already brisk. n contrast to the slump in housing starts in Japan, China and other Asian countries are expe- riencing rapid housing market growth. We are seeking to significantly expand our overseas  sales by developing our business in these markets. As I mentioned before, in order to make this  vision a reality, we acquired the Asia-Pacific division of American Standard, the global plumbing  fixtures brand. American Standard has a strong sales base in China, with 167 showrooms in 73  cities. We are very hopeful that we can effectively leverage this sales base to generate synergies  with Inax in the field of sanitary wares. Furthermore, we have a booth at the Shanghai Expo and we  sponsored an exhibition at Shanghai’s famous Three on the Bund gallery, as part of our strategy to  raise the profile of the Inax and Tostem brands. I In Vietnam, we entered the local market in 1996 by establishing Inax Vietnam Sanitary Ware Co.,  Ltd. (VINAX), a local subsidiary of Inax. We have been successful in sales of sanitary ware, and have  recently commenced selling Tostem’s housing window sashes and doors. Such one-stop, compre- hensive sales of sanitary ware, housing window sashes and doors were in response to requests from  local customers, and we are anticipating significant demand. We will dynamically utilize VINAX’s sales  channels to effectively capture this demand. Ahead of the expected increase in overseas sales, we  will actively make investments during the year ending March 31, 2011 to build and increase the pro- duction capacity of overseas production sites. Synergies With Asia-Pacific Division of American Standard (ASAP) Synergy Themes Targeted Countries Sales Mutual use of sales channels to expand sales ■ Expand sales of Inax high-end products in ASAP sales channels ( REGIO ,  SATIS , etc.) ■ Expand sales of JAXSON bathtubs in ASAP sales channels  ■ Produce each other’s products and use OEM supply Across Asia SCM Use centralized purchasing to reduce costs ■ Centralized purchasing of sanitary ware raw materials ■ Centralized purchasing of purchased parts Across Asia Share best practices to reduce costs ■ Share sanitary ware manufacturing technologies/fitting manufacturing technologies ■ Develop personnel/transfer management techniques (Six Sigma, etc.) Integrate transportation, storage and shipment ■ Optimize distribution function across Asia to reduce costs Across Asia Leverage each other’s technologies and knowhow to develop new products ■ Develop shower toilets for ASAP Across Asia Other Integrate back-offices, sales promotion tools and development bases to reduce costs China, Vietnam JS Group Corporation Annual Report 2010 18