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## Cash Flows 

Net cash provided by operating activities increased ¥4.1 billion to ¥68.1 billion. Although income before income taxes and minority interests declined ¥2.7 billion, the impact of non-cash items such as impairment losses and a decrease in income taxes paid resulted in a year-on-year increase. 

Investing activities used net cash of ¥27.3 billion, which was ¥35.7 billion less than the previous fiscal year. A total of ¥25.6 billion was used for acquisition of tangible and intangible fixed assets, including investments in opening new home centers (Distribution and Retail Business) and investments to maintain and renovate existing facilities. In addi- tion, ¥9.6 billion was used for payments for purchases of newly consolidated 

## Liquidity 

The JS Group strives to generate operat- ing cash flows and consider a wide range of fund-raising methods in order to procure a stable and flexible supply of funds necessary for its business activi- ties, while maintaining a sound financial position. Regarding cash in hand, the Group, in principle, maintains funds adequate to cover settlement of its liabil- ities in an emergency. In order to ensure financial flexibility, we work to diversify sources of funding procurement, includ- ing through borrowing from banks and other financial institutions, ensuring a framework for issuance of commercial 

## Outlook for the Year Ending March 31, 2011 

The outlook for the year ending March 31, 2011 is clouded in uncertainty, despite emergency stimulus measures propping up the economy. While the extent of decline in new housing starts has contracted in recent times, housing investment lacks power and is therefore expected to remain low for the time being, making for a persistently difficult operating environment. 

Recognizing these challenges, the JS Group will push ahead with structural reforms to its existing businesses. This will include reorganization and integra- tion of overlapping business areas and centralization of common processes. We will also seek to advance our operations 

subsidiaries through M&As and other means, ¥9.2 billion was used for pur- chases of investment securities, and ¥4.5 billion was used for an increase in money held in trust. A decrease in mar- ketable securities for short-term financial asset management purposes provided net cash of ¥20.0 billion. 

Financing activities used net cash of ¥27.8 billion, a change of ¥49.7 billion from the net cash provided in the previ- ous fiscal year. In terms of inflows, funds were raised from long-term debt (¥41.7 billion) and bond issuances (¥14.9  billion). Outflows included ¥11.2 billion for cash dividends paid, a ¥4.7 billion decrease in short-term loans and com- mercial paper, net, and ¥63.5 billion for repayments of long-term debt. 

paper, establishing a commitment line, and through initiatives such as securiti- zation of trade notes and factoring receivables. At March 31, 2010, the Group has total cash and cash equiva- lents, and marketable securities of ¥119.5 billion, thus maintaining a high level of liquidity to remain prepared to respond to a crisis situation and to fund operating companies entering the Group in the following fiscal year. Interest-bearing 

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over the medium term and rebuild our earnings structure while identifying new growth opportunities, including corpo- rate alliances. 

Over the medium and long term, the declining trend for population and birth- rates will gather pace in Japan. Mean- while, globalization will continue with the emergence of industrializing nations. Business conditions at home and abroad, therefore, will continue chang- ing dramatically. In the housing industry, we expect new housing starts to remain on a moderate downtrend amid rising housing stock and a declining number of people in the purchasing segment of the population. Under these conditions, 

As a result, cash and cash equivalents at the end of the year totaled ¥89.3 billion, up ¥15.3 billion from a year earlier. This was the result of the aforementioned cash flow factors, as well as foreign currency translation adjustments and the effect of new consolidation of subsidiaries. 

## Cash Flows From Operating Activities 

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debt totaled ¥257.5 billion, mainly reflecting the procurement of ¥56.6 billion through long-term debt and cor- porate bonds. 

The JS Group believes that it is nec- essary to maintain a certain level of rat- ings in order to ensure fund procurement through the financial markets. Our ratings for the past 10 years are shown below. 

the JS Group will strengthen its com- petitiveness in the Japanese market and actively develop business in overseas markets. At the same time we will help to address environmental problems. Under the JS Group’s new group brand, LIXIL, we will break away from the con- cept of being a collection of individual businesses and become a comprehen- sive home and living environment- related company, as we target further business expansion. 

