NIHON FLUSH CO.,LTD.

The Group is primarily engaged in the manufacture and sale of interior system components, including interior doors, decorative architectural materials and storage boxes. In Japan, it operates mainly through production and sales at its own factories, and its business structure includes 6 overseas consolidated subsidiaries and 1 equity-method affiliate. Its overseas operations comprise 昆山日門建築装飾有限公司, 日門（青島）建材有限公司, 日門（江西）建材有限公司, 吉屋（煙台）集成建築科技有限公司, 吉屋（青島）家居有限公司 and 日門（昆山）建材科技有限公司 in China. 日門上海貿易有限公司 handles sales of general building materials, while 日門（昆山）建材科技有限公司 assembles and sells products for commercial facilities. The business segments are Japan, comprising the manufacture and sale of interior system components, and China, comprising the manufacture of interior system components, the manufacture and sale of residential equipment, the design and construction of interior work, and product installation. The Group’s affiliated companies comprise 6 consolidated subsidiaries and 1 equity-method affiliate, all classified under China. Key financial information for the affiliated companies is as follows: (1) net sales: ¥9,965,950 thousand; (2) ordinary income: ¥588,121 thousand; (3) net income: ¥421,157 thousand; (4) net assets: ¥7,902,100 thousand; and (5) total assets: ¥23,432,264 thousand. Key financial and other information is as follows. - Japan business segment: Manufacture and sale of interior system components, and product installation - China business segment: Manufacture of interior system components; manufacture and sale of residential equipment; design and construction of interior work; and product installation - Major products and services: Interior system components, including interior doors, decorative architectural materials and storage boxes; product installation; residential equipment, including furniture and kitchen sinks; design and construction of interior work; and store fixtures - The principal businesses of the major affiliated companies in China are as follows: 昆山日門建築装飾有限公司, manufacture and sale of interior system components; 日門（青島）建材有限公司, manufacture of interior system components and residential equipment; 日門（江西）建材有限公司, manufacture of interior system components; 日門上海貿易有限公司, domestic sales of general building materials and import/export trade; 吉屋（煙台）集成建築科技有限公司, design and construction of interior work and equipment installation; 吉屋（青島）家居有限公司, manufacture and sale of residential equipment; and 日門昆山建材科技有限公司, assembly and sale of products for commercial facilities. All overseas operations are classified under the China segment. In Japan, the Group plans to further strengthen its ability to support mass customization, leverage its sales engineering capabilities by integrating sales, design, manufacturing and construction management, and expand its new product development and sales areas. In China, although conditions in the residential market remain challenging, the Group expects demand to recover against the backdrop of urbanization and policies promoting homes with completed interiors, while strengthening credit risk management and expanding sales through distribution channels. It will also actively expand its operations in overseas markets, including Taiwan, as well as its export business. In the area of sustainability, the Group promotes environmental management in accordance with ISO 14001 and holds monthly environmental committee meetings to consider GHG emissions and the reduction of industrial waste. It has adopted a policy targeting carbon neutrality by 2050 and will continue to quantify GHG emissions, establish targets and implement appropriate measures.