This notice has been translated from the original notice in Japanese.
In the event of any discrepancy, the original in Japanese shall prevail.
Updated: June 26, 2024
TOTO Ltd.
President, Representative Director
Noriaki Kiyota
Contact: General Manager of Management Planning Dept. Takafumi Shinozaki
Securities code: 5332
https://jp.toto.com/

The corporate governance of TOTO Ltd. is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information
1. Basic Views
The TOTO Group strives to be a great company, trusted by people all around the world, contributing to
the betterment of society. In addition to being a corporate entity engaged in the pursuit of profit throughfair competition, the Group conducts its business in such a way as to continue to benefit society broadly.
In order to realize this target, we believe it is important to build a system for pursuing and supervising fairand equitable management, and clearly define a philosophy that serves as the basis of such a system.
(1) The TOTO Group has developed a philosophy system for TOTO Group management. This includes acommon Group philosophy, representing the inherited values of TOTO that will be carried forward into
the future. This represents the “heart” of our philosophy. Also, our philosophy system includes visions
for business activities representing the direction of our action to be reviewed in accordance with thedemands of the times. This is positioned as the “body in action.” All of our business activities are
based on this philosophy system.
<Common Group Philosophy>[Company Mottos]“Take pride in your work and strive to do your best.”“Quality and Uniformity” “Service and Trust” and “Cooperation and Prosperity”[TOTO Group Corporate Philosophy]
The TOTO Group strives to be a great company, trusted by people all around the world, and contributing
to the betterment of society.
To achieve our philosophy, TOTO will: Create an enriched and more comfortable lifestyle and culture built on our plumbing products.
 Pursue customer satisfaction by exceeding expectations with our products and services.
 Provide high-quality products and services through ongoing research and development.
 Protect the global environment by conserving finite natural resources and energy.
 Create an employee friendly work environment that respects the individuality of each employee.
[Charter of TOTO Group Corporate Behavior]
The TOTO Group wants to be an entity that constantly assumes a leading role in the realization of asustainable society by creating added value, which is useful for society, and employment, as well as byautonomous and responsible actions through fair and free competition. To realize that, all people working
for the TOTO Group strive to play an active role with a strong sense of duty based on the concepts
indicated in the corporate motto and philosophy, and to fulfill their social responsibilities.
The Charter of TOTO Group Corporate Behavior stipulates the basic stance of behavior of all people
working for TOTO Group to realize all stakeholders’ satisfaction.
 The TOTO Group shall pursue customer satisfaction and provide products and services that areenvironmentally friendly, safe and easy to use through innovation to realize sustainable economic
growth and solve social issues.

 The TOTO Group shall develop sensible business activities in transparent, fair ways, and responsible
procurement, and sustain sound normal relationships with political organizations and governmental
administrations.
 The TOTO Group shall facilitate communications with society; disclose corporate information
proactively, effectively, and fairly; and have constructive dialogs with a variety of stakeholders to
imprreove corporate value.
 The TOTO Group shall respect the human rights of every person in all countries and regions in its
business activities and contribute to their development.
 The TOTO Group shall improve customer satisfaction through appropriate information provision on
products and services and honest communication.
 The TOTO Group shall improve the ability of all people working for TOTO and realize a workstylewhere diversity and individuality are respected in a pleasant working environment where importance isplaced on health and safety.
 The TOTO Group shall build awareness of global environment issues as common issues of all
humankind and aggressively tackle these issues from a global point of view as essential for the
existence and activities of the company.
 As a good corporate citizen, the TOTO Group shall constructively participate in and contribute to thedevelopment of communities and society overall.
 The TOTO Group shall be prepared for actions of antisocial powers, terrorist attacks, andcyberattacks, as well as natural disasters, and thoroughly implement organizational crisis
management.
 TOTO’s top management shall build effective governance and, as their role, rigidly put corporate
ethics into practice not only within the TOTO Group but also across supply chains, including business
partners. When a situation that conflicts with this charter and may lose the trust of society arises,
TOTO’s top management shall exercise leadership to resolve it.
(2) To ensure operational decisions and business execution in compliance with relevant laws andregulations and TOTO’s Articles of Incorporation, TOTO has a Board of Directors and an Audit &Supervisory Committee, and retains independent accounting auditors.
The Board of Directors, emphasizing fairness, objectivity, and transparency, has appointed fiveOutside Directors who are independent of the TOTO Group. The Outside Directors give various advice
and make proposals on our overall management.
The Audit & Supervisory Committee audits the business execution of Directors and consists of four
members, including three outside members. We have built a system to ensure their effective audits
through their attendance of major meetings, including Management Committee, and the exchange of
opinions with Directors who are not Audit & Supervisory Committee Members on a regular basis.
(3) To complement audits by Audit & Supervisory Committee and independent accounting auditors and tobuild a stronger internal control system, we have established the Internal Audit Office in-house, whichis independent of operational divisions. With the establishment of the Internal Audit Office, we havestrengthened our internal audits under the direction of the President.
Audit & Supervisory Committee, independent accounting auditors and members of the Internal Audit
Office carry out audits as a three-party audit team. In addition, we strive to enhance the quality andeffectiveness of audits through close collaboration among the three parties, which involves reviewing
audit results by Audit & Supervisory Committee Members and exchanging information at meetings,
among other activities.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code]TOTO implements all of the individual principles of the Corporate Governance Code.
[Disclosure Based on the Principles of the Corporate Governance Code] [Updated]<Principle 1.4: Strategic Stockholdings>
Comprehensively taking into account the maintenance and strengthening of business alliances andvarious business transactions, as well as relationships involving business activities, TOTO strategicallyholds listed stocks in which the strengthening of relationships would contribute to an increase incorporate value. At Meetings of the Board of Directors, TOTO quantitatively evaluates the transaction
volume and safety of such stocks and qualitatively evaluates whether they contribute to an
enhancement of the corporate value, judges whether or not to continue holding them, and makes
decisions to sell shares that no longer need to be held, annually on an each brand basis.

TOTO exercises voting rights with regard to strategic stockholdings after carefully examining thedetails of the proposals and judging whether to contribute to an increase in the corporate value ofinvestees for the medium to long terms on the assumption of contributing to the interests of TOTO.
Additionally, TOTO converses with the investees on details of the proposals, if necessary.
<Principle 1.7: Framework for Confirmation of Transactions with Related Parties>
TOTO has established rules where competitive transactions and transactions involving a conflict-ofinterest with Directors or companies that Directors substantially control shall be subject to an approvalof the Board of Directors. If a director (excluding directors who are Audit & Supervisory Committee
members) seeks to engage in transactions involving conflicts of interest, the director must be
approved by a resolution adopted by the Board of Directors as well as by the Audit & Supervisory
Committee in advance.
TOTO also investigates and specifies related parties that carry the possibility of having an impact on
TOTO’s financial position and operating results based on the “Accounting Standard for Related Party
Disclosures” and the “Guidance on Accounting Standard for Related Party Disclosures,” confirms theexistence of transactions with said related parties and the importance of said transactions, and, if there
are transactions to be disclosed, carries out such disclosure accordingly.
<Supplementary Principle 2.4.1: Ensuring of Diversity in Hiring Core Personnel, Human Resources
Development Policy, and Better Work Environment Development Policy> [Updated]
The TOTO Group respects the individuality of diverse human resources, such as age, sexuality, andnationality, and wants to create an enriched and more comfortable lifestyle and culture built throughnew ideas born from it. Aiming to create a company of diverse human resources, comfortably taking
on new challenges, and feeling pride in continuing to work as employees, TOTO promotes thedevelopment of an environment where diverse human resources can play important roles in a variety
of workstyles through the advancement of diversity, the practice of DX, greater progress in physicaland mental health management, and other activities.
The details on our diversity, human resource development and work environment development aredescribed in the following URLs.
(Diversity) https://jp.toto.com/company/csr/stakeholder/employees/diversity/(Human Resource Development)
https://jp.toto.com/company/csr/stakeholder/employees/humanresourcesdevelopment/(Work Environment Development) https://jp.toto.com/company/csr/stakeholder/employees/balance/<Principle 2.6: Function as the asset owner of the corporate pension >In order to ensure pension payments to beneficiaries in the future, TOTO has set up a special
department in the Accounting & Finance Division to manage the corporate pension funds,
complememted our expertise and knowledge while receiving advice from an outside pension
consulting company. We have also set up the Pension Management Committee, which consists of
employees from the Human Resource Division and Accounting & Finance Division with the appropriate
skills and Labor Union chairman, who represents the beneficiaries, to discuss matters concerning themanagement and administration of pension funds, as well as their operations, including the basis
policy of terms and operations. Matters we consider important shall be discussed in management
meetings to acquire approval.
<Principle 3.1: Information Disclosure>(i) Company objectives (such as corporate philosophy), corporate strategies, and management plans
TOTO’s Corporate Philosophy and mid- to long-term management plans are disclosed on TOTO’s
website and in its presentation materials and integrated reports.
-Summary of TOTO’s Common Group Philosophy
TOTO’s Common Group Philosophy is shown in section (1) under “1. Basic Views” of “Basic Views
on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information” in thisreport.

- Summary of Mid- to Long-Term Management Plans [Updated]
The TOTO Group aims to contribute to the realization of a sustainable society and carbon neutrality
by 2050, as well as to provide all people with comfortable and healthy lives. Seeking to realize aclean, comfortable, and healthy life and to contribute to society and the global environment as its goalfor 2030, the TOTO Group formulated TOTO WILL 2030, the Shared Value Creation Strategy, at theend of April 2021. Under TOTO WILL 2030, “Cleanliness and Comfort; Wellness,” “the Environment,”
and “Human Relationships” are set as the materialities (key issues) that TOTO shall cope with as acompany, and TOTO aims to promote sustainable management and to realize an affluent andcomfortable society without impacting the global environment while achieving economic growth. Its
promotional framework is based on Corporate Governance and on Digital Innovation for staying
ahead of the changes of the times with a focus on the global housing equipment business and new
businesses as the two core domains, as well as leading three cross-organizational innovation
activities from the viewpoint of company-wide optimization.
(Group’s Philosophy System)
https://jp.toto.com/company/profile/philosophy/(Mid-Term Management Plans)
https://jp.toto.com/company/profile/philosophy/managementplan/(ii) Basic Views and Basic Policy on Corporate Governance
The Basic Views and Basic Policy on Corporate Governance of TOTO are stated in “1. Basic Views”
of “Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic
Information” in this report.
(iii) Policies and Procedures for Determining the Compensation of Senior Management and Directors by
the Board of Directors
Basic views on TOTO’s compensation framework are stated in “[Directors’ Compensation]” under “1.
Organizational Composition and Operation” of the “Business Management Organization and Other
Corporate Governance Systems Regarding Decision Making, Execution of Business, and Oversightin Management” in this report and in the business report of the “Convocation Notice of the Ordinary
General Meeting of Shareholders.”(iv) Policies and Procedures for Appointing Senior Management and Nominating Candidates for
Directors by the Board of Directors
Basic views on the appointment of candidates for Directors of TOTO are stated in “[Directors]” under“1. Organizational Composition and Operation” and “2. Matters Relating to Functions of Business
Execution, Auditing, Oversight, Nomination, and Compensation Decisions (Overview of Current
Corporate Governance System)” of “Business Management Organization and Other Corporate
Governance Systems Regarding Decision Making, Execution of Business, and Oversight inManagement” in this report and in the business report of the “Convocation Notice of the Ordinary
General Meeting of Shareholders.”(v) Explanations for Each Individual Appointment and Nomination with Respect to the Appointments ofSenior Management and the Nominations of Candidates Directors by the Board of Directors
Reasons for the nomination of individual directors are stated in “Notice of General Meeting of
Shareholders”.
https://jp.toto.com/company/ir/reference/meeting/<Supplementary Principle 3.1.3: Sustainability Initiatives> [Updated]
The TOTO Group aims to contribute to the realization of a sustainable society and carbon neutrality
by 2050 and to provide all people with comfortable and healthy lives. Through these activities, theGroup will also contribute to the UN Sustainable Development Goals (SDGs). Under TOTO WILL
2030, the Shared Value Creation Strategy, the Group pursues sustainability with the materialities set
as key issues to cope with toward the realization of the corporate philosophy.
The details on our sustainability initiatives are described in the following URL.
https://jp.toto.com/company/csr/

<Supplementary Principle 4.1.1: Summary of Scope of Matters Delegated by the Board of Directors to
the Management>
TOTO has stipulated matters to be determined by resolution of the Board of Directors in the Rules for
Board of Directors. The matters mainly include those concerning the general meeting ofshareholders, personnel and organizations, account settlement, stocks, corporate bonds and newshare subscription rights, and corporate assets and management of the TOTO Group, as well as
matters stipulated in laws and regulations, including the Companies Act and the Articles ofIncorporation, among other significant matters.
Among business operations not subject to a decision by the Board of Directors, certain significant
matters are determined upon establishing the Rules for System for Formal Approval and discussions
by the Management Committee (held twice a month in principle), consisting of Directors andExecutive Officers. The Executive Officer system was introduced in 2000 to effectively execute thematters determined by the Board of Directors.
<Principle 4.8: Appointment of Independent Directors> [Updated]
TOTO has appointed five Outside Directors with a high level of independence out of fourteen
Directors. This makes it possible for the Board of Directors to engage in an open and objective
discussion, sharing viewpoints from an independent and neutral perspective.
TOTO has appointed Outside Directors with expert knowledge in management-related issues and atruly global perspective, specializing in corporate governance, Sustainability, and risk management.
The Outside Directors provide our management with valuable insight and advice from an objective
viewpoint. This process is facilitated by the receipt of reports on activities of the Internal Audit Office,independent accounting auditors and the internal control division, mainly by the Board of Directors, in
its efforts to improve the oversight function for assessing management activities and to establish amore transparent management monitoring system.
<Principle 4.9: Independence Standards Aimed at Securing Effective Independence of Persons Who Will
Become Independent Directors>
TOTO’s Independent Directors are appointed in accordance with the requirements for Outside
Directors, as set forth in the Companies Act, and the independence standards set forth by thefinancial instruments exchanges, in addition to “Requirements for Independent Directors/Audit &Supervisory Board Members,” as set forth by TOTO, which periodically assesses their status upon
appointment.
The “Requirements for Independent Directors/Audit & Supervisory Board Members” are stated in“[Independent Directors/Audit & Supervisory Board Members]” under “1. Organizational Composition
and Operation” of “Business Management Organization and Other Corporate Governance Systems
Regarding Decision Making, Execution of Business, and Oversight in Management” in this report.
<Supplementary Principle 4.10.1: Authorities, Roles and etc. of Nomination Committee andCompensation Committee>
The Company has established Nominating Advisory Committee and Compensation Advisory
Committee as advisory bodies of the Board of Directors. The authorities and roles of thesecommittees are stated in [Committees voluntarily established] under 1. “Organizational Composition
and Operation” and 2. “Matters Relating to Functions of Business Execution, Auditing, Oversight,
Nomination, and Compensation Decisions (Overview of Current Corporate Governance System)” of“II Business Management Organization and Other Corporate Governance Systems Regarding
Decision Making, Execution of Business, and Oversight in Management” in this report.
<Supplementary Principle 4.11.1: View on the Appropriate Balance between Knowledge, Experience andSkills of the Board of Directors as a Whole, and in Terms of Diversity and Size>
TOTO believes that in order to supervise business operations and to make important decisions,
TOTO’s Board of Directors must be composed of members with diverse perspectives, professional
experience and relevant skills. TOTO invites Outside Directors well versed in the management ofleading companies respected for their management practices to which the TOTO Group aspires or
specializing in such matters as corporate finance and legal issues. TOTO ensures the balance ofknowledge, experience, abilities, and diversity on the Board of Directors by appointing those who
understand our corporate philosophy and who are familiar with our business as Inside Directors..
The details are also stated in “2. Matters Relating to Functions of Business Execution, Auditing,Oversight, Nomination and Compensation Decisions (Overview of Current Corporate GovernanceSystem)” of “Business Management Organization and Other Corporate Governance Systems
Regarding Decision Making, Execution of Business, and Oversight in Management” in this report.
The skills matrix lists the expertise and experience of TOTO’s Directors and is provided in the
Notification of Ordinary general meeting of shareholders.
https://jp.toto.com/company/ir/reference/meeting/<Supplementary Principle 4.11.2: Concurrent Posts Assumed by Directors and Audit & Supervisory
Board Members>
Concurrent posts assumed by Directors are disclosed in the “Convocation Notice of the Ordinary
General Meeting of Shareholders.”
https://jp.toto.com/company/ir/reference/meeting/In addition, concurrent posts assumed by Outside Directors are stated in “[Directors]” under“1.Organizational Composition and Operation” of “Business Management Organization and Other
Corporate Governance Systems Regarding Decision Making, Execution of Business, and Oversightin Management” in this report.
When a Director concurrently serves as a director of any other listed company, the number ofconcurrently held positions is limited to the extent rationally possible for him allocating enough timeand effort to engage in the business of TOTO to properly fulfill his roles and responsibilities.
<Supplementary Principle 4.11.3: Summary of Analysis and Evaluation Concerning the Effectiveness of
the Board of Directors> [Updated]
The roles of the TOTO’s Board of Directors include decision-making in favor of stakeholders, mutual
supervision of the execution of the duties of the Directors, the formulation of an execution andsupervision system for more equal and fair management, as well as the determination of basic
management policy, such as the common philosophy of the TOTO Group, mid-/long-term
management plan, and the annual policy that becomes a foothold. With these roles, at meetings ofthe Board of Directors, the Board annually confirms the status of corporate governance and analyzes
and evaluates its effectiveness and appropriateness, as well as the effectiveness andappropriateness of the Company’s corporate governance system.
To ensure that candid opinions are gathered from all board members and objective analyses are
made in the analysis and evaluation process, a questionnaire survey has been regularly conducted
and its collection and analysis of the result are outsourced to an external organization.
At the meeting of the Board of Directors in March 2024, all participants, including outside directors,
evaluated Board activities based on the roles defined in the company, as well as progress on issues
as recognized through the questionnaire survey conducted on all Board members in the evaluation ofeffectiveness in FY 2022, the effectiveness of the Board of Directors from the perspective of theoperational status of the internal control system, the agendas of the Board of Directors to define thegeneral direction, including corporate strategy, and related items of the Board of Directors based on
the corporate governance code along with the questionnaire results.
The results of these analyses and evaluations concerning the effectiveness of the Board of Directors
as a whole are as follows:(1) In accordance with the Basic Policy for Development of Internal Control System, the system
ensures that the execution of Directors’ duties complies with the laws and regulations and thearticles of incorporation, and all other items are operated positively.
(2) Matters to be resolved at Meetings of the Board of Directors are submitted in accordance with therelevant rules, and the system is so operated that the status of the execution of significant deals,such as matters to be resolved at Management Committee meetings, is reported to the Board of
Directors.
(3) All items of the corporate governance codes are properly satisfied, including the gender diversityof the board composition, as well as the appointment of at least the one-third proportion of thedirector candidates as outside directors.
(4) To cope with the issues recognized through the questionnaire survey, measures will be promoted
for planned development aimed at the promotion of female and international human resources forboard membership, including executive management training and other initiatives for theenhancement and upgrading of the next-generation population.

From the above, we have confirmed that the operation of the Board of Directors is functioning
properly and its effectiveness is ensured. We will continue to implement activities to allow for active
discussions and continue conducting questionnaire surveys on a regular basis for the purpose of
ensuring that candid opinions are gathered from all board members and improving the issues foundfrom the questionnaire results to ensure the effectiveness of the Board of Directors and further
increase its functions.
<Supplementary Principle 4.14.2: Training Policy for Directors>
TOTO provides opportunities for training necessary for Directors to fulfill their respective roles andduties. We bear the expenses of the training at the request of Directors.
To satisfy the expectations of shareholders and investors, Directors strive to collect information by
accepting reports on IR activities and various SRI (social responsible investment) research results at
Meetings of the Board of Directors in order to further understanding of the company.
In addition to the aforementioned, Directors hold internal training sessions for new Directors(education on various laws and regulations, including the Companies Act) to further understand theirrequired roles and duties, and participate in external seminars at the time of new appointments. Upon
appointment, Directors and Audit & Supervisory Board Members strive to obtain the necessary skills
and knowledge, mainly through attending seminars as necessary and twice a month opportunity to
discuss issues among all of the Directors and Executive Officers.
To further understand the conditions facing the TOTO Group, Outside Directors accept invitations tovisit domestic and overseas business sites to learn about such business conditions. Outside
Members of the Audit & Supervisory Committee attend important meetings concerning the operationsof the TOTO Group and visit and audit domestic and overseas business sites.
<Principle 5.1: Policies Concerning the Measures and Organizational Structures Aimed at Promoting
Constructive Dialogue with Shareholders>
TOTO designates the President as an Executive Officer in charge of engaging in dialogue withshareholders, based on the view that the Company should hold constructive discussions withshareholders and investors. The President, Executive Vice President, and Executive Officer in chargeof IR mainly deal with this matter. Evaluations and requests from shareholders and investors areshared across the Company and are used as a source of information to ensure improvements inmanagement.
TOTO discloses the purpose of its communications and policy on responses to investors in the TOTO
Group Communication Policy. For domestic and overseas shareholders and investors, IR Policy isalso established to ensure transparency and fairness. Additionally, please see “2. IR Activities” of“Implementation of Measures for Shareholders and Other Stakeholders” in this report.
[Action to Implement Management that is Conscious of Cost of Capital and Stock Price]
TOTO strives to improve ROA in order to achieve sustainable growth. In addition, with an awarenessof capital cost and stock price, we will strengthen efforts to improve return on capital and secure
growth potential, and aim for an ROE of 10% or higher to exceed cost of shareholders' equity.
To achieve this, TOTO strives to improve profitability by using the TOTO version of ROIC as aninternal management indicator.
The details on our Mid- to Long-Term Business Plan are described in the following URL.
https://jp.toto.com/company/profile/philosophy/managementplan/2. Capital Structure
Percentage of Foreign Shareholders

20% to less than 30%[Status of Major Shareholders] [Updated]
Name / Company Name
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
Nippon Life Insurance Company
MUFG Bank, Ltd.
TOTO Shareholding association
STATE STREET BANK WEST CLIENT－ TREATY 505234

Number of Shares
Owned
30,898,500
12,526,500
10,358,416
5,393,691
3,087,699
3,022,918
2,696,487

The Nomura Trust and Banking Co.,Ltd. (Trust
Account)
Niterra Co., Ltd.
NGK Insulators, Ltd.
Controlling Shareholder (Except for Parent Company)—

Parent Company

None

Percentage (%)
18.22
7.38
6.11
3.18
1.82
1.78
1.59

2,658,200

1.57

2,229,100
2,071,433

1.31
1.22

Supplementary Explanation [Updated]
Status of major shareholders is stated based on the register of shareholders as of March 31, 2024
A large shareholding report or a change report of a large shareholding report of the Company’s share isdisclosed to the public as below. However, the Company has not yet confirmed the actual number ofshares it holds as of March 31, 2024; therefore, it is not included in the information for shareholders.
Shareholder: MUFG Bank, Ltd. and its two joint shareholders
Submission date: Octorber 16, 2023
Reporting obligation became effective on: Octorber 9, 2023
Number of shares owned: 10,571,799
Shareholder: Invesco Asset Management (Japan) Limited and its two joint shareholders
Submission date: December 21, 2023
Reporting obligation became effective on: December 15, 2023
Number of shares owned: 6,919,050
Shareholder: Nomura Securities Co.,Ltd. and its two joint shareholders
Submission date: February 21, 2024
Reporting obligation became effective on: February 15, 2024
Number of shares owned: 11,765,806
Shareholder: Sumitomo Mitsui Trust Asset Management Co., Ltd. and its one joint shareholders
Submission date: May 21, 2024
Reporting obligation became effective on: May 15, 2024
Number of shares owned: 11,144,300

3. Corporate Attributes

Fiscal Year-End

Tokyo Stock Exchange Prime and Nagoya Stock
Exchange Premier, and Fukuoka Stock
Exchange
MarchType of Business

Glass and ceramic products

Number of Employees (Consolidated) as of
the End of the Previous Fiscal YearSales (Consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of
the End of the Previous Fiscal Year

More than 1,000

Listed Stock Market and Market Section[Updated]

100 billion yen to less than 1 trillion yen
10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with
Controlling Shareholder—
5. Other Special Circumstances Which May Have a Material Impact on Corporate Governance—II. Business Management Organization and Other Corporate Governance Systems Regarding
Decision Making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Structure of Organization

Company with Audit & Supervisory Committee[Directors] [Updated]
Maximum Number of Directors Stipulated in
Articles of Incorporation

19

Term of Office Stipulated in Articles ofIncorporation

One year

Chairperson of the Board

Chairman (unless the Chairman holds theconcurrent post of President)

Number of Directors

14

Appointment of Outside Directors

Appointed

Number of Outside Directors

5

Number of Independent Directors

5Outside Director’s Relationship with TOTO (1) [Updated]

Name

Attributeabc

Relationship with TOTO*
d e
f
g h
i

Junji Tsuda

From other company



Shigenori Yamauchi

From other company

Yasushi Marumori

From other company

Yukari Ienaga

LawyerChiho Naganuma

From other companyjk* Categories for “Relationship with TOTO”:“” When the Director currently falls or has recently fallen under the category“” When the Director fell under the category in the past
“” When a close relative of the Director currently falls or has recently fallen under the category“” When a close relative of the Director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive Director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accountant, or legal professional who receives a large amount of monetaryconsideration or other property from the Company other than compensation as a Director/an Audit &Supervisory Board Member

g. Major shareholder of the Company (or an executive of said major shareholder if the shareholder isa legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d,e, or f) (the Director himself/herself only)
i. Executive of a company, between which and the Company Outside Directors/Audit & Supervisory
Board Members are mutually appointed (the Director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the Director
himself/herself only)
k. Others
Outside Director’s Relationship with TOTO (2) [Updated]

Name
Junji
Tsuda

Audit &
Supervisory
Committee
Member-Designation
SupplementaryasExplanation of
Independen
the Relationshipt Directorx
Senior Adviserof Yasukawa
Electric
Corporation

Reasons for Appointment

Mr. Junji Tsuda has been involved in the
management of YASKAWA Electric Corporation
for many years. He provides valuable opinions at
Meetings of the Board of Directors based on his
expertise he has developed in his career as a
Outside Director professional corporate manager.
of NSK Ltd.
The Company expects that he will provide
valuable opinions at Meetings of the Board of
Directors based on his experience andknowledge of general management andcorporate governance as well as of the
management of a global company and of humanresource strategies, and he will display
outstanding supervision skills by reflecting his
views, which are unfettered by the conventional
way of doing things, in the Company’s
management, and therefore selected andappointed him as Outside Director
Regarding the appointment of Mr. Tsuda as anindependent director, we have confirmed that
there was no conflict of interest according to
independence standards set forth by securities
exchanges, and that the requirements for theeligibility of independent directors set by TOTO
were met. Therefore, Mr. Tsuda was appointed tothe position of independent director based on a
resolution by the Board of Directors.

Audit &Supervisory
Name
Committee
MemberShigenori
Yamauchi

Designation
SupplementaryasExplanation of
Reasons for Appointment
Independen
the Relationshipt Director
x
Honorary
Mr. Shigenori Yamauchi has been involved in theAdvisor of UACJ management of UACJ Corporation for many
Corporation
years. He provides valuable opinions at Meetingsof the Board of Directors based on the expertisehe has developed in his career as a professional
corporate manager.
The Company expects that he will provide
valuable opinions at Meetings of the Board of
Directors based on his experience andknowledge of general management, corporate
governance, and management of a global
company, and as a professional ofcraftsmanship, and he will display outstanding
supervision skills by reflecting his views, which
are unfettered by the conventional way of doing
things, in the Company’s management, andtherefore selected and appointed him as Outside
Director.
Regarding the appointment of Mr. Yamauchi as
an independent director, we have confirmed that
there was no conflict of interest according to
independence standards set forth by securities
exchanges, and that the requirements for theeligibility of independent directors set by TOTO
were met. Therefore, Mr. Yamauchi was
appointed to the position of independent director
based on a resolution by the Board of Directors.

Name
YasushiMarumori

Audit &
Supervisory
Committee
Memberx

Designation
SupplementaryasExplanation of
Independen
the Relationshipt DirectorxOutside Directorof theHyakujushi
Bank, Ltd.
(Audit &Supervisory
Committee
Member)Reasons for Appointment
Mr. Yasushi Marumori has been involved in the
management of financial institutions (MUFG
Bank, Ltd., Mitsubishi UFJ Research andConsulting Co., Ltd., and others) for many years.
He provides valuable opinions at Meetings of
Audit & Supervisory Committee and Meetings ofthe Board of Directors based on his expertise hehas developed in his career as a professional
corporate manager.
The Company expects that he will provide
valuable opinions at Meetings of Audit &Supervisory Committee and Meetings of theBoard of Directors based on his experience andknowledge of general management, corporate
governance, and as an Audit & Supervisory
Board Member of listed companies, and he will
display outstanding auditing skills andsupervision skills, and therefore selected andappointed him as Outside Director who is an
Audit & Supervisory Committee Member.
Regarding the appointment of Mr. Marumori as
an independent director, we have confirmed that
there was no conflict of interest according to
independence standards set forth by securities
exchanges, and that the requirements for theeligibility of independent directors set by TOTO
were met. Therefore, Mr. Marumori was
appointed to the position of independent director
based on a resolution by the Board of Directors.

Name
Yukari
IenagaAudit &
Supervisory
Committee
Memberx

Designation
SupplementaryasExplanation of
Independen
the Relationshipt DirectorxPartner of
TOKUNAGA,MATSUZAKI &SAITO Law
OfficeReasons for Appointment

Ms. Yukari Ienaga has never been involved in
the management of a company, except as an
outside officer. However, she has been involved
with a law office (TOKUNAGA, MATSUZAKI &SAITO Law Office) for many years as a lawyer
and also has provided valuable opinions to theOutside Director Audit & Supervisory Committee and the Board of(Audit &Directors based on her knowledge as a
Supervisory
professional corporate manager through her
Committee
career she has developed as an Outside Director
Member) of Mr
of listed companies.
Max Holdings
The Company expects that she will provideLtd.
valuable opinions at Meetings of Audit &Supervisory Committee and Meetings of theBoard of Directors based on her experience andknowledge of general management, corporate
governance, and as an Outside Director of listedcompanies, and she will display outstanding
auditing skills and supervision skills, andtherefore again proposes her election as Outside
Director who is an Audit & Supervisory
Committee Member.
Regarding the appointment of Ms. Ienaga as anindependent director, we have confirmed that
there was no conflict of interest according to
independence standards set forth by securities
exchanges, and that the requirements for theeligibility of independent directors set by TOTO
were met. Therefore, Ms. Ienaga was appointed
to the position of independent director based ona resolution by the Board of Directors.

Name
Chiho
Naganuma

Audit &
Supervisory
Committee
Memberx

Designation
SupplementaryasExplanation of
Reasons for Appointment
Independen
the Relationshipt DirectorxPartner of
Ms. Chiho Naganuma has never involved in the
bitengyoushi
management of a company. However, she hasCo., Ltd.
been involved in sales operations for institutional
investors at international securities companies
for many years and has advanced expertise infinancial services and abundant practicalexperience cultivated through her career.
Based on the above, the Company expects that
she will be able to fulfill her auditing andsupervisory functions by offering valuable
opinions at the Audit & Supervisory Committee
and Board of Directors meetings based on her
advanced expertise and wealth of practicalexperience and knowledge in generalmanagement, corporate governance, andfinance, and therefore proposes her election as
Outside Director who is an Audit & Supervisory
Committee Member.
Regarding the appointment of Ms. Naganuma as
an independent director, we have confirmed that
there was no conflict of interest according to
independence standards set forth by securities
exchanges, and that the requirements for theeligibility of independent directors set by TOTO
were met. Therefore, Ms. Naganuma was
appointed to the position of independent director
based on a resolution by the Board of Directors.

[Audit & Supervisory Committee]
Committees composition and attributes of chair

Audit & Supervisory
Committee

All Committee
Members

Full-timeMembers

InsideDirectors

OutsideDirectors

Chairperson

4

1

1

3

InsideDirector

Directors and employees responsible for assisting in execution of
the duties of the Audit & Supervisory Committee [Updated]

Established

Independence of said directors and employees from executive directors
TOTO established the Audit & Supervisory Committee Office to assist the work of the Audit & Supervisory
Committee, independent of its executive organization, which reports directly to the Audit & Supervisory
Committee. Two or more full-time assistants to the Audit & Supervisory Committee including
management-level members, are assigned to the Audit & Supervisory Committee Office.
Transfers, evaluations, and other matters concerning the Audit & Supervisory Committee assistants are
determined with the consent of the Audit & Supervisory Committee.

Cooperation among Audit & Supervisory Committee, Independent Accounting Auditors, andInternal Audit Division
Independent accounting auditors submit an annual accounting audit plan and report quarterly review
results on the implementation of the audit plan and the results of the accounting audit at the end of the
fiscal year to the Audit & Supervisory Committee.
In addition, the Audit & Supervisory Committee collaborate closely with independent accounting auditors
through the exchange of opinions at periodic meetings and by attending accounting audits conducted byindependent accounting auditors as required.
The Audit & Supervisory Committee and the Internal Audit Office collaborate closely by holding
information meetings on a monthly basis to gain a clear mutual understanding of the auditing situation,and to exchange opinions.
[Committees voluntarily established]
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or
Compensation Committee

Established

Committee’s Name, Composition, and Attributes of Chairperson

Committee’s Name

Committee Corresponding toNomination Committee
Nominating Advisory Committee

Committee Corresponding toCompensation Committee
Compensation Advisory Committee

All Committee Members

7

7

Full-time Members

00Inside Directors

2

1

Outside Directors

55Outside Experts

0

1

Other

0

0

Chairperson

Inside Director

Outside Expert

Supplementary Explanation[Nominating Advisory Committee]
The Nominating Advisory Committee, which meets once a year or more in principle, has been established
to help ensure the objectivity and transparency of TOTO’s management through activities such as
deliberating on and confirming the appointment of TOTO’s Directors. The Committee shall report to theBoard of Directors on proposals submitted to the General Meeting of Shareholders related to theappointment and dismissal of the candidates of Directors, including Outside Directors and Representative
Director.
Half or more of Committee members shall be outside members, and the chairperson and members havebeen appointed by the Board of Directors. The Committee members consist of five Independent
Directors/Audit & Supervisory Board Members as outside members and Representative Director,
Chairman of the Board and President, Representative Director of TOTO as internal members, and thechairperson shall be the President and Representative Director of TOTO. Members with special interests
are unable to participate in the resolution. The committee meeting was held once in FY 2023, where allcommittee members were present.

[Compensation Advisory Committee]
The Compensation Advisory Committee ,which meets once a year or more in principle, has been set up
to ensure that the process to determine base compensation, bonuses, and stock compensation for
Directors and their allocation balance are in line with the Articles of Incorporation, the resolutions of theGeneral Meeting of Shareholders, and the Basic Policy for Directors’ Compensation, in order to contributeto the ensuring of the appropriateness and objectivity of compensation for Directors through theCommittee’s activities.
The majority of Committee members shall be outside members, and the chairperson and members havebeen appointed by the Board of Directors.
The Committee members consist of six outside members including five Independent Directors/Audit &Supervisory Board Members and one Director as an internal member without the right of representation,and the chairperson shall be elected from among the outside members. The committee meeting was held
twice in FY 2023, where all committee members were present.
[Independent Directors]
Number of Independent Directors

5

Matters Relating to Independent Directors<Our corporate stance on Independent Directors of TOTO>
Since all Outside Directors are invited to join their respective boards as members who can makedecisions materially independent of the management of TOTO and all other specific stakeholders, we
designate all Outside Directors as Independent Directors.
We nominate candidates for Outside Directors who fully satisfy the Nominating Advisory Committee’s
Requirements for Independent Directors [see (Note) below], the satisfaction of which is set forth by TOTO
as a mandatory requirement.
(Note) Requirements for Independent Directors
 a person who has experience in business management above a certain level, or a professionalor an external expert in business management (a company owner with significant pastachievements, a specialist in the investment banking business, a lawyer, a certified public
accountant, a researcher who mainly studies the Companies Act or other acts, or any similar
person); a person who is not or has not been a Director (except for an Outside Director; the same isapplied hereinafter), an Audit & Supervisory Board Member (except for an Audit & Supervisory
Board Member, Outside; the same is applied hereinafter), an accounting advisor, an Executive
Officer, a manager or any other employee (collectively, the “Director”) of the Company, its
Subsidiary or Affiliate Companies (collectively, the “Company Group”);
 a person who is not the spouse or a relative within the third degree of relationship of a current orformer Director of the Company Group (except for a person who is not a principal of theCompany); a person who, during the most recent five years, has not served as a Director in a financial
institution that is a major loan provider for the Company Group; a person who, during the most recent five years, has not served as a Director in a businessassociate that has business with the Company Group of 2% or more of the consolidated sales of
either such business associate or the Company Group in any fiscal year during the recent fivefiscal years;
 a person who is not a lawyer, a certified public accountant, or a consulting or other professional
service provider (if such service provider is a corporation, association or other entity, a person
who belongs to such entity and a person who belonged to such entity during the most recent five
years) who received from the Company Group a compensation totaling 10 million yen or more in
any fiscal year during the most recent five fiscal years; or a person who is not a Director of a company which is the Company’s major shareholder orwhose major shareholder is the Company, or who is not a Director of a parent company,
subsidiary or affiliate of such company.

[Incentives]
Incentive Policies for Directors

Performance-linked Compensation and Other

Supplementary Explanation
TOTO pays bonuses tied to the performance of up to 0.8% of consolidated operating income of theprevious fiscal year to its Directors (excluding Directors who are an Audit & Supervisory Committee
Member and Outside Directors. And hereinafter called “the Eligible Directors”). In addition, up to 100,000
restricted stock units (RSUs) of up to 300 million yen are granted annually as an incentive for the Eligible
Directors to continuously improve the Company’s corporate value and for the purpose of further
enhancing the sharing of value with shareholders. (Adoption of up to 100,000 RSUs of up to 300 million
yen was resolved at the 156nd ordinary general meeting of shareholders on June 24, 2022.)
Recipients of Stock Options—

Supplementary Explanation[Directors’ Compensation]
Disclosure of Individual Directors’ Compensation

Selected Directors

Supplementary Explanation
We disclose the total amount of base compensation, annual bonuses, and restricted stock compensation
for all Directors and Audit & Supervisory Board Members, as well as the sum thereof.
Compensation, etc., for Directors and Audit & Supervisory Board Members whose total amount exceeds
100 million yen is individually disclosed in our business reports and securities reports.
Policy on Determining Compensation Amounts
and Calculation Methods [Updated]

Established

Disclosure of Policy on Determining Compensation Amounts and Calculation Methods<The Basic Policy for Directors’ Compensation>
The TOTO’s Directors’ Compensation is as follows.
(1) The compensation system shall motivate Directors to manage the Company in such a way as toshare the common interests with the shareholders, answer to their expectations from a medium- tolong-term perspective, realize the corporate philosophy of the TOTO Group, and continuously
increase corporate value.
(2) The compensation system shall be appealing, and attract excellent and diverse human resources tolead the TOTO Group in the future.
(3) The Compensation Advisory Committee and the Board of Directors shall confirm that its decision
process and allocation balance of Directors’ compensation are reasonable.

Compensation determination processes for Directors (Excluding Directors who are Audit &Supervisory Committee Members)
TOTO resolved a policy determining the compensation for Directors at the board meeting held on June24, 2022. As for the resolutions, we consulted with the Compensation Advisory Committee on thecontents and received a report in advance.
We confirmed that the compensation for Directors (Excluding Directors who are Audit & Supervisory
Committee Members) and their determination processes are in accordance with the Basic Policy on
Directors’ Compensation after reviewing the compensations for individual Directors (Excluding Directors
who are Audit & Supervisory Committee Members) in this fiscal year from diversified perspectives at theCompensation Advisory Committee meeting. The Board of Directors respects the report from theCompensation Advisory Committee and believes that the compensation is in line with the basic policy.
The Board of Directors has delegated its authority to determine the following for Directors (Excluding
Directors who are Audit & Supervisory Committee Members)’ compensation to the President,
Representative Director Noriaki Kiyota.
- Monthly basic compensations for each position- Bonus (in aggregated amount) allocation reference points for each position- Whether or not to make individual bonus reduction assessment, and the details if it is made- Allocation criteria for each position for stock compensation
The reason for the delegation is that we decided the chief execution officer, Representative Director, issuitable to appropriately evaluate the performance of the Directors, who direct and supervise theoperations of their departments in a comprehensive manner while considering corporate-wide
performance. As for the execution of delegated authority, determination by the President, Representative
Director Noriaki Kiyota on Directors’ compensation must be discussed with the Compensation Advisory
Committee, which then must ensure and report that the decision process and allocation balance arereasonable and objective and are in line with the Articles of incorporation, resolutions of General
Meetings of Shareholders, and the Basic Policy for Directors’ Compensation.
Compensation determination processes for Directors who are Audit & Supervisory Committee
Members
As for Compensation for Directors who are Audit & Supervisory Committee Members, only basecompensation shall be paid.
The base compensation for individual Directors who are Audit & Supervisory Committee Members isdetermined depending on his/her duties and responsibilities upon consultation with Directors who are
Audit & Supervisory Committee Members.

<Composition of compensations and recipients>
Compensation composition and recipients

Compensations
composition

Compensation
recipients

Fixed/ Variable

Fixed
compensation

Incentive type－

Short-term

Mid-term

Long-term

Compensation type

Basiccompensation

Bonus basedon single-year
performance

Bonus basedon multi-year
performance

Restricted
stockcompensation
*

X

X

X

X

X

－

－

－

X

－

－

－

Directors (excludingInternal
directors who are
Directors
Audit & Supervisory
OutsideCommittee
Directors
members)
Directors who are Audit &Supervisory Committee
members

Variable compensation*Restricted stock compensation is designed on the assumption that eligible directors hold the stocks in a long-run until
their resignation and to be indirectly based on performance via stock prices.

<Resolutions of General Meetings of Shareholders on Compensation for Directors>
Base compensation(Fixed compensation)
Directors(Excluding
Directors who are
Audit & Supervisory
Committee
Members)

Internal
Directors
OutsideDirectors

Directors who are Audit &Supervisory Committee
Members

Up to 500 million yen per
annum(including an amount of
up to 50 million yen in total
for Outside Directors)
Up to 150 million yen per
annum

Bonus
(Performance-based
compensation)

Restricted stockcompensation

Up to 0.8% of theprevious fiscal year’s
consolidated
operating income

Up to 300
million yen perannum and up to
100,000 stocks

－

－

－

－

Note: Resolution at the 156th Ordinary General Meeting of Shareholders held on June 24, 2022. (Numberof directors: 15, including 4 directors who were Audit & Supervisory Committee members)< Conditions for payment of compensation>
Basic compensation
Basic compensation for Directors are fixed compensation and paid to Directors after monthly
compensation being set based on titles and duties.
Bonus [Updated]
The purpose of bonuses for The Eligible Directors is to increase their motivation and morale towards
performance improvement and share values with stakeholders. The total amount of bonuses is calculated
and divided into Bonus Based on Single-Year Performance and Bonus Based on Multi-Year Performancebased on consolidated operating income. The reason why consolidated operating income is selected as aperformance indicator is that the income is directly related to businesses, and we determined thatincentives would be appropriately distributed based on performance improvement. Bonuses are paid to
the Eligible Directors after prorating the calculated total amount according to the defined bonus (inaggregated amount) allocation reference points and completing individual bonus reduction assessment.
Payment shall be made once a year, and the details are as follows.
- Bonus Based on Single-Year Performance: The amount of payment shall be up to 0.6% of theconsolidated operating income for the previous fiscal year.
- Bonus Based on Multi-Year Performance: As listed in the table below
Conditions When the following two criteria are both satisfiedforCriteria 1
The average consolidated operating income over the past three consecutive fiscal
payment
years with the immediately preceding fiscal year as the final year shall exceed theaverage consolidated operating income over the past three consecutive fiscal years
with the fiscal year immediately before the immediately preceding fiscal year as the
final year.
Criteria 2

ROE for the immediately preceding fiscal year shall be 5.0% or higher.

The
Multiply the following payment factor* related to the Social value, Environmental value index byamount of 0.15% of the immediately preceding fiscal year’s consolidated operating income.
bonus*The payment factor for the social value and environmental value indexes is the total value(the upper limit of the payment factor is 1.1 and the lower limit is not defined) of the target
achievement rate of each index as calculated from the achievement of each annual target
and shown in the table below multiplied by the weight.

Social value, Environmental value Index

WeightPercentage of sustainable products

30％

Contribution to the reduction of water
consumption during product use

20％

Total CO2 emissions from business sites

20％

Employee satisfaction (Japan)

10％

Showroom satisfaction (Japan)

10％

Customer satisfaction in after-sales service

10％●Introduction of the Social value, Environmental value index
TOTO, which engages in sustainability management, has set the percentage ofsustainable products in the Shared Value Creation Strategy TOTO WILL 2030 as theSocial value, Environmental value index for the Bonus Based on Multi-Year Performancesince FY 2022. We decided to set the six items of the social and environmental values
upheld in the WILL 2030 long-term goals as the sustainability index for the Bonus Basedon Multi-Year Performance since FY 2023 to realize a rich and comfortable society in the
future while giving more consideration to the global environment.

Restricted stock compensation
The purpose of restricted stock compensation granted to the Eligible Directors is to encourage them toconsistently improve corporate value and further share values with stakeholders, and this compensation
is designed to motivate the Eligible Directors to achieve management targets from not only a single-year
but also a medium-to long-term viewpoint. The Eligible Directors shall pay in all the monetarycompensation claim as property contributed in kind based on resolutions of the Board of Directors andreceive the issuance or disposal of the common stock of the Company.
In the case of the resulting issuance or disposal of the common stock of the Company, a contract
regarding the grant of the restricted stock has been concluded between the Company and the respective
Eligible Directors.
・Overview of the Contract regarding the Grant of Restricted Stock
1. Transfer Restriction Period For 30 years from the allotment date
2. Type of stocks to be Common stock
issued or disposed of
3. Grantees
4. Allotment method forstocks to be issued or
disposed of
5. The number of the shares
to be allocated
6. Determination of theamount to be paid in per
share

Eligible Directors
By the method to allot restricted stocks

The number of shares according to the s allocation criteria for eachposition in place
Determined by the Board of Directors based on the closing price ofshares of the common stock of the Company on the Tokyo Stock
Exchange on the business day immediately preceding the date of
the resolution adopted by the Board of Directors (or, if there is no
closing price on such business day, the closing price on the trading
day immediately prior thereto)
7. Adjustment of the total In the event that the Company conducted a stock split of thenumber of common stock common stock of the Company (including gratis allocation of thedue to a stock split or a Company's common stocks) or a reverse stock split, or any reasons
reverse stock split
for adjusting the total number of the common stock of the Company
to be issued or disposed of as restricted stock occurred, the total
number shall be adjusted to the extent reasonable.

8. Conditions for cancellation Under the condition that an Eligible Director has been a Directorof the transfer restrictions
during the transfer restriction period, the transfer restriction shall be
lifted at the following points in time.
- When the transfer restriction period expires- Immediately after the Eligible Director retires from the position of a
Director(Only in the case of completion of the term of office or death or if
there is another justifiable reason.)
9. Free acquisition by the Any restricted stocks falling under any of the following shall beCompany
rightfully acquired free of charge by the Company.
- Stocks whose transfer restrictions are not lifted at the time of
expiration of the transfer restriction period or cancellation of thetransfer restrictions as specified in the above item 8.
- All or part of the restricted stock allotted to a director in the casethat the person has committed misconduct, such as a violation oflaws and internal regulations, or the person has been deemed tohave engaged in such misconduct by the Board of Directors<Determination policy for compensation proportion> [Updated]
Among the compensations for Eligible Directors, because of the nature of bonuses being distributed
based on the consolidated operating income as a performance indicator, the proportion of compensation
largely vary depending on the figure. Therefore, the proportion is calculated based on the consolidated
operating income that is first disclosed in the earnings briefing and included in the consolidated earnings
forecast (full-year) in the fiscal year. From the above, the determination policy for the proportion ofcompensations for the Eligible Directors in FY 2024 is as follows.
Incentive
Short-termLong-term

Performance-based

Stock price-based

Base compensation

Bonus based on performance

（45%）

（40%）

Restricted
stockcompensation

Fixed compensation（15%）

Variable compensation(Note) Based on the above percentages
・Consolidated operating income is 48 billion yen (figure disclosed in the earnings briefing on April
26, 2024)
・Bonus Based on Multi-Year Performance is not granted[Supporting System for Outside Directors](Outside Directors who are not Audit & Supervisory Committee members)- The Secretary’s Office and the Management Planning Department provide support for Outside Directors.
- The Management Planning Department, the secretariat of the Board of Directors, distributes thenotification of upcoming Meetings of the Board of Directors and materials in advance and explains
matters to be discussed at the meetings to Outside Directors so that they can participate in thediscussions on the basis of the actual status. The Management Planning Department is also responsible
for the planning and promotion of site inspections at the domestic and overseas business sites.

(Outside Directors who are Audit & Supervisory Committee members)- The Audit & Supervisory Committee Office provides support for Outside Directors.
- For proposals by the Board of Directors, the Management Planning Department, the secretariat of theBoard of Directors, distributes the notification of upcoming Meetings of the Board of Directors andmaterials in advance and explains matters to be discussed at the meetings to Outside Directors so thatthey can participate in the discussions on the basis of the actual status. The Audit & Supervisory
Committee Office also arranges meetings of the Audit & Supervisory Committee and coordinates
attendance at major meetings of Audit & Supervisory Committee members as well as meetings with
Directors who are not Audit & Supervisory Committee members and independent accounting auditors.
[Status of persons retired from Representative Director and President,etc]
Names,etc.,of advisors(“sodanyaku,”“komon”etc.)who have formerly served as Representative
Director and President,etc.

Name

Title/Position

DutiesWorking Arrangement/
Conditions(Full-time/Parttime, Compensation etc.)

Date of
Retirement
from
President,etc.)

Term

Teruo
Kise

SeniorAdviser

Outsideexecutive ofan economic
organizationor public
interest group(not involvedin theCompany’s
business)

Part-time

2014/3/31

Undetermined

Kunio
Harimoto

SeniorAdviser

Outsideexecutive ofan economic
organizationor public
interest group(not involvedin theCompany’s
business)

Part-time

2020/3/31

Undetermined

Paid

Paid

Total number,ofadvisors(“sodanyaku,”“komon”etc.)who haveformerly served as Representative Director andPresident,etc

2

Other Matters
TOTO appoints a former president or a chairman as advisor (fixed-term employment) according to thedecision at the Board meeting. The primary role of an advisor is involvement in business-related
activities, including industry groups and business circles, as well as participation in activities for the public
interest, including social activities and various councils, the purpose of which is to provide indirect support
for current management and not to be involved in corporate management. TOTO appoints the former
advisor as a special advisor according to the decision at the Board meeting. The role is similar to the oneof an advisor but the area of activities is limited.

2. Matters Relating to Functions of Business Execution, Auditing, Oversight, Nomination, andCompensation Decisions (Overview of Current Corporate Governance System) [Updated](1) The corporate governance system at TOTO is as follows:[Directors and the Board of Directors]
The Board of Directors, which consists of all Directors, meets once a month in principle, makes decisions
from the most appropriate company-wide, group-wide and stakeholder perspectives and conducts mutual
supervision of the duties of Directors.
Directors other than the Audit & Supervisory Committee members, the Chairman of the Board or Outside
Directors concurrently hold positions as Executive Officers in order to perform their own business duties
as well (Directors and Executive Officers).
TOTO invites Outside Directors, well versed in the management of leading companies respected for their
management practices to which the TOTO Group aspires or specializing in such matters as corporate
finance and legal issues, to receive advice and suggestions on general management issues based on
their in-depth knowledge and expertise as experienced managers.
[Audit & Supervisory Committee Members and the Audit & Supervisory Committee]
The Audit & Supervisory Committee, which consists of all Directors who are Audit & Supervisory
Committee Members, meets once a month in principle, oversees the execution of the duties of the
Directors who are not Audit & Supervisory Committee members from the perspectives of legality andappropriateness. The Audit & Supervisory Committee Members attend meetings of the Management
Committee and other major meetings to state their opinions as required and conduct operating audits inline with the relevant auditing policies while utilizing means via the internet and other means.
In addition, the Audit & Supervisory Committee Members regularly exchange opinions with Directors who
are not the Audit & Supervisory Committee members and streamline the system to ensure theeffectiveness of audits. TOTO calls upon Outside Members of the Audit & Supervisory Committee having
deep insight and extensive experience in corporate management or specializing in such matters as
corporate finance and legal issues to evaluate decisions made by the Board of Directors and monitor
Directors’ execution of their duties from an objective and fair perspective.
[Nominating Advisory Committee]
The Nominating Advisory Committee, which meets once a year or more in principle, has been established
to help ensure the objectivity and transparency of TOTO’s management through activities such as
deliberation on and confirmation of the appointment of TOTO’s Board of Directors. The Committee shallmake reports to the Board of Directors on proposals to the General Meeting of Shareholders related tothe appointment and dismissal of Directors, including Outside Directors and Representative Director...
Half or more of Committee members shall be outside members, and the chairperson and members
have been appointed by the Board of Directors. The Committee members consist of five Independent
Directors/Audit & Supervisory Board Members as outside members and Representative Director
Chairman of the Board and President Representative Director of TOTO as inside members, and thechairperson shall be the President and Representative Director of TOTO. Members with special interests
are unable to participate in the resolution.
[Compensation Advisory Committee]
The Compensation Advisory Committee ,which meets once a year or more in principle, has been set up
to confirm that the process to determine base compensation, bonuses, and restricted stock compensation
for Directors, and their allocation balance are in line with the Articles of Incorporation, the resolutions of
the General Meeting of Shareholders, and the Basic Policy for Directors’ Compensation, in order tocontribute to the ensuring of the appropriateness and objectivity of Directors’ compensation through its
activities.
The majority of Committee members shall be outside members and the chairperson and members havebeen appointed by the Board of Directors.
The Committee members consist of six outside members including five Independent Directors/Audit &Supervisory Board Members and one Director without the right of representation as an inside member,and the chairperson shall be elected from among the outside members.

[Internal Audits]
The Internal Audit Office, which is independent of the operational divisions, examines under the directionof the President whether TOTO and the Group companies are performing their operations appropriately
and efficiently in compliance with laws and regulations, the Articles of Incorporation, the corporate
philosophy and internal regulations.
[Executive Officer]
To implement decisions made by the Board of Directors effectively and efficiently, TOTO has introduced
an Executive Officer system.
[Management Committee]
TOTO makes important decisions regarding its operations through deliberations at meetings of theManagement Committee, which comprises Directors who are also Executive Officers. The meetings of
the Committee are, in principle, held twice a month.

(2) Composition of the Board of Directors and the Audit & Supervisory Committee in Fiscal 2024
[Updated]
We believe that in order to supervise business operations and to make important decisions, TOTO’s
Board of Directors must be composed of members with diverse perspectives, experience and highly
professional skills. TOTO invites Outside Directors well versed in the management of leading companies
respected for their management practices to which the TOTO Group aspires or specializing in suchmatters as corporate finance and legal issues. TOTO also ensures the balance of knowledge,
experience, abilities, and diversity on the Board of Directors by appointing those who understand our
corporate philosophy and who are familiar with our business as Inside Directors.
As of June 26, 2024, we have 14 Directors with voting rights at Meetings of the Board of Directors, ofwhom nine are Inside Directors with careers in the TOTO Group and five are highly independent Outside
Directors.
These members use their respective skills in discussions to make legal and business management
decisions and supervise business operations.
The Audit & Supervisory Committee consists of one standing members with careers in the TOTO Groupand three outside members with a high level of independence, and conducts audits from the perspectivesof legality and appropriateness.
The skill matrix that lists the expertise and experiences of TOTO’s Directors is provided in the Notificationof Ordinary general meeting of shareholders.
https://jp.toto.com/company/ir/reference/meeting/[Composition of the Board of Directors, the Audit & Supervisory Committee, etc.] [Updated]

Title

Name

Representative
Director
Representative
Director
Representative
Director
Director

MadokaKitamura
Noriaki Kiyota

—

x

—

Board ofDirectors
Attendance
for fiscal
2023
12/12

—

x

—

12/12

SatoshiShirakawa
Ryosuke
Hayashi
Shinya Tamura
Tomoyuki
TaguchiYojiro Taketomi
Takehiko
KitazakiJunji Tsuda

—

—

—

12/12

—

—

—

12/12

—
—

—
—

—
x

12/12
12/12

—
—

—
—

—
—

12/12
—

—

x

x

12/12

Shigenori
Yamauchi
Masayuki
Yoshioka

—

x

x

12/12

x

—

—

—

YasushiMarumori

x

x

x

12/12

Yukari Ienaga

x

x

x

12/12

Chiho
Naganuma

x

x

x

—

Director
Director
Director
Director
OutsideDirector
OutsideDirector
Director, Fulltime Audit &Supervisory
Committee
MemberOutsideDirector, Audit& Supervisory
Committee
MemberOutsideDirector, Audit& Supervisory
Committee
MemberOutsideDirector, Audit& Supervisory
Committee
MemberAudit &
Supervisory
Committee

Nominating
Advisory
Committee

Compensation
Advisory
Committee

Note: Compensation Advisory Committee members include an external expert who is appointed as an
outside member.

3. Reasons for Adoption of Current Corporate Governance System
The TOTO Group considers that an essential aspect of corporate management is ensuring thesatisfaction of stakeholders and constantly expanding corporate value by improving objectivity andtransparency in management and by clarifying management responsibilities. To achieve this, for mattersrequiring management decisions, TOTO recognizes the importance of systematizing “who makes
decisions about what and where” as well as “what checks are implemented” in a fair and honest manner.
TOTO is building a structure of decision-making, supervision, and more efficient and effective businessexecution, with the aim of continuously increasing corporate value.
 Clarifying the allocation of management responsibility (introduction of the Executive Officer system andthe like) Enhancing management transparency and soundness (establishment of the Nominating Advisory
Committee and the Compensation Advisory Committee)
 Reinforcing supervisory and auditing functions (nomination of highly independent Outside Directors andOutside Members of the Audit & Supervisory Board) Strengthening decision-making functions (establishment of the Management Committee and the like)
In June 2022, TOTO became a Company with an Audit & Supervisory Committee, in order to further
enhance the supervisory and auditing functions of the Board of Directors, while improving the speed andefficiency of decision-making on business executions by granting Directors who are Audit & Supervisory
Committee members voting rights at meetings of the Board of Directors. TOTO has adopted theframework of a company with an Audit & Supervisory Committee system as its base while integrating thesuperior functions of a company with Nomination Committee.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Revitalize the General Meeting of Shareholders and to Ensure the Smooth Exerciseof Voting Rights [Updated]
Supplementary Explanations
Early Notification of General
Meeting of Shareholders

Scheduling Annual General
Meeting of Shareholders to
Avoid the Peak Period

Allowing the Electronic
Exercise of Voting Rights
Participation in Electronic
Voting Platform
Providing Convocation
Notice in English

Other

2.

2024 performance: Convocation notices (up to the agenda section)
were mailed 22 days ahead of the general meeting of shareholders.
In addition, the notices were published on TOTO’s and the Tokyo
Stock Exchange’s websites 29 days ahead of the general meeting ofshareholders.
TOTO determines the date of the General Meeting of Shareholders
so that a large number of shareholders can participate, as well as inconsideration of the accounts settlement schedule reflecting theduration needed for compiling financial results information and for
performing audits by independent accounting auditors and Audit &Supervisory Committee Members.
Electronic voting is possible.
The electronic voting platform operated by ICJ, Inc. for institutional
investors is used.
As a reference material for foreign stockholders, we prepare an
English-language version of the convocation notice of the General
Meeting of Shareholders and post it on TOTO’s English-language
website, trust bank websites listing General Meeting of Shareholders’agenda, and other sites.
- Business reports are presented in visual materials using visualequipment at the General Meeting of Shareholders.
- Documents relating to the General Meeting of Shareholders,
including notices thereof, and business report videos are posted on
the IR page of TOTO’s website.
- Ordinary general meetings of shareholders are simultaneously
broadcasted on the website, and the recorded video will beavailable on the website for a month after the meeting.

IR Activities
Supplementary Explanations
Preparation and Publicationof Disclosure Policy

TOTO discloses its communication purpose and thepolicy for responses to investors in the “TOTO Group
Communication Policy.” The “TOTO Group
communication Policy” is as described below:<Purpose>
In order to remain a company needed by society, the
TOTO Group strives to increase the satisfaction of its
stakeholders through communication; to promote
prompt and appropriate collection, disclosure, and useof information; and to work in cooperation with thestakeholders.
<Text>- The TOTO Group establishes a system of prompt
and appropriate collection of all information
concerning the Group to actively gather suchinformation.

Explanation ofRepresentative

Supplementary Explanations- The TOTO Group strives to disclose information that
affects both its stakeholders and the Group's
corporate value in a fair, timely, and clear manner,
irrespective of whether the information pertains to theGroup's benefit or disadvantage.
- The TOTO Group establishes a system ofincorporating information obtained through its
communication efforts into its corporate activities,
and strives to make effective use of such information.
- The TOTO Group complies with applicable laws andregulations when collecting, disclosing, and using
information and pays particular attention to theprotection of personal and customer information.
- The TOTO Group maintains communication basedon its IR policy for ensuring transparency andfairness of information disclosed to its investors.
- The TOTO Group strives to abide by its policy byinspecting and readjusting such activities whennecessary.
TOTO also establishes the “IR Policy” for domestic andoverseas shareholders and investors to ensuretransparency and fairness.
The “IR Policy” is as described below:<Fundamental policy>
The TOTO Group discloses information related to thesettlement of accounts according to the rules
determined by the Tokyo Stock Exchange (TSE), theFinancial Instruments and Exchange Act, and otherlaws and ordinances. Even when not obligated to doso, we proactively disclose information for which
disclosure is regarded as useful to all investors andshareholders.
<Disclosure methods>
Brief Notes on the Settlement of Accounts andinformation disclosed according to the timely
disclosure rules are made publicly available on the
TSE Timely Disclosure Network (TDnet). Afterwards,
they shall be published on the TOTO website.
Information for which the timely disclosure rules do not
apply shall be promptly disclosed via the TOTO
website. In order to prevent the leakage of information
related to the settlement of accounts and ensure
fairness, the period from the day after the end of the
fiscal period for each quarter until the announcementof the settlement of accounts is regarded as a quiet
period in which no comments shall be made on thesettlement of accounts and no questions shall beanswered. However, the disclosure of information shallbe carried out during this quiet period in the case thatmajor changes are expected to occur regarding
projections of business results.

Explanation ofRepresentative

Supplementary Explanations

Explanation ofRepresentative<Cautionary statement concerning forward-looking
statements>
Forward-looking statements released by TOTO on
future business results are based on available data at
the time of announcement. Actual business results
may differ from projections due to various factors.
Company information sessions are held for individual
investors to understand our businesses and recognize
TOTO as a company to invest in．(FY 2022: Once forface-to-face briefing/ Three times for online briefings )In addition, For individual investors, Q&As at results
videos of results briefings for the fiscal year and thesecond quarter of the fiscal year are available on TOTO’s
website.
TOTO holds briefings at the time of publishing financial
results for the fiscal year and the second quarter of the
fiscal year. At the results briefing, the management,
specifically the President, delivers a report on businessresults and directly answers questions from the briefing’s
participants. Additionally, visits to factories and strategy
briefings, which are primarily held by the person
responsible for business execution, are conducted forthe benefit of analysts and institutional investors to givethem a better understanding of the Company’sbusinesses.

—

Regular Investor Briefings
for Overseas Investors

The management of TOTO, specifically the President,
holds meetings for each overseas investor in Europe
and the United States. TOTO also attends conferences
for overseas institutional investors sponsored by
securities companies to hold briefings and meetings,
undertaken by the management.

X

Posting of IR Materials on
WebsiteURL (in Japanese): (https://jp.toto.com/company/ir/)
URL (in English): (https://jp.toto.com/en/company/ir/)
In addition to settlement information, timely disclosurematerials other than settlement information (securities
reports, results briefing materials, and notices of theGeneral Meeting of Shareholders) and other reports, we
also hold online briefings so that even investors who areunable to be present at the venue can attend thebriefings, and then post the question and answer session
held on the same day. In order to disclose such content
as brief notes on the settlement of accounts and results
briefing materials in a timely and fair manner, we post the
English version at the same time as the Japaneseversion is disclosed.

Establishment of
Department and/or
Appointment of Manager in
Charge of IR

The President has been appointed the supervisory
officer in charge of IR according to a decision by the
Board of Directors. The Management Planning
Department has been established under theManagement Planning Division, which reports directly to
the President. The person in this department is in chargeof IR.

Regular Investor Briefings
for Individual Investors

Regular Investor Briefings
for Analysts and Institutional
Investors

XSupplementary Explanations
Other

3.

Explanation ofRepresentative

Mainly aimed at individual investors, we post articles
entitled “TOTO Topics” on our website and also provide
detailed information on our business operations in
notifications of the General Meeting of Shareholders forfurther understanding of our business.
URL: (https://jp.toto.com/company/ir/reference/report/)

Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Stipulation of Internal Rules
for Respecting the Positionof Stakeholders

Implementation ofEnvironmental Activities,
Sustainability Activities, etc.

The Charter of TOTO Group Corporate Behavior* prescribes adefinition of stakeholders and sets forth measures to ensure due
respect for stakeholders.
URL: (https://jp.toto.com/company/profile/philosophy/group/ )The TOTO Group Business Conduct Guidelines were established asconcrete guidelines to put the Charter of the TOTO Group Corporate
Behavior into practice, and TOTO aims at satisfying all stakeholders
through the power of all employees.
URL(https://jp.toto.com/company/profile/governance/pdf/businessgui
deline)TOTO Group considers Sustainability management to be
management by the use of Sustainability initiatives for the purpose ofbringing the TOTO Group Corporate Philosophy to life. The
Sustainability Committee holds meetings chaired by the President
and has been promoting Sustainability management. The committee,
comprised of three fields: Environment, Social and Governanceengages in strategic integration of TOTO’s business activities andSustainability activities.
URL: (https://jp.toto.com/company/csr/）
Under TOTO WILL 2030, the Shared Value Creation Strategy, theGroup pursues sustainability with the materialities set as key issues
to cope with toward the realization of the corporate philosophy. TOTO
WILL 2030 specifies “Cleanliness and Comfort; Wellness,” “theEnvironment,” and “Human Relationships” as the three requirements
to be coped with. To this end, we deliver clean and healthy living to
the world, engage in manufacturing that is friendly to theenvironment, and value human relationships in our activities.
Through these initiatives, we will realize environmental, social andeconomic values at the same time and contribute to the UN’s
Sustainable Development Goals (SDGs).
URL: (https://jp.toto.com/company/csr/vision/）
In 2019, TOTO expressed its opinion in support of therecommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD) established by the Financial Stability Board(FSB).
URL: (https://jp.toto.com/company/csr/environment/warming/tcfd/)

Supplementary Explanations
In 2021, TOTO’s GHG emissions reduction targets for FY 2030,
aimed at achieving carbon neutrality by 2050, acquired certificationby the SBT Initiative, an international organization, as “Well Below
2℃ (WB2℃).” TOTO also became a member of RE100, a global
initiative that aims at 100% renewable electricity. In 2024, TOTO’s
new GHG emissions reduction targets for FY 2030 acquired SBT
1.5°C certification.
The details of environmental conservation and Sustainability
activities are posted on the company website.
URL：(https://jp.toto.com/company/csr)
Development of Policies on
Information Provision to
Stakeholders

The TOTO Group Communication Policy stipulates a policy on
providing information.
URL: (https://jp.toto.com/company/profile/philosophy/policy/)

Other<Creating a company of diverse human resources, comfortably
taking on new challenges, and feeling pride in continuing to work as
employees>◆ Advancement of diversity
・ Supporting all generations in making challenges
To support each individual in making challenges toward theirrespective fulfillment at work, we will invigorate in-house recruitment,
in-house studying abroad, and other systems for matching
employees with jobs.
・Promoting diversity
We promote a work environment and culture where diverse values
are accepted, and individual employees can exercise their abilities
with female employees being active and diverse human resources
respecting and learning from one another regardless of disabilities,
age, nationality, or gender. Regarding understanding about persons
with disabilities, measures were implemented in FY 2023 to enhancereasonable accommodation and understanding, through e-learningand company newsletters for all employees combined with thepresident’s message. An in-house community was also established
for information provision, study meetings, and other activities
concerning disabilities.
・ Overseas group companies’ executive development
Global ties across countries and regions and power of local
employees are the key to aim for sustainable overseas businessgrowth, and the joint training for overseas group companies has been
continuously held since FY 2022. We will exercise leadership unique
to TOTO, grow and expand our overseas business, and keep gaining
TOTO fans around the world by developing executive candidates
from overseas group companies with improved business judgement
based on the corporate philosophy and governance and business
management literacy.
・ Dual support for careers and life events
To help employees continue with their careers while balancing workand life events, such as childrearing, elderly care, and disease
treatment, we will enhance workstyle options that include a workfrom-home system that matches job characteristics. As for paternity

Supplementary Explanations
leave, we implemented a childcare class in FY 2023, where male
employees actually experienced milk preparation and diaper change.
We will continue to implement training for employees and their
managers and colleagues and to share actual cases and systems inorder to ensure that all requesting employees can take the leave. We
will also hold job return preparation seminars aimed at relieving
concerns and providing peer in-house network for female employees
returning from maternity leave. The father and mother leaves forchildrearing will expand its scope to grandchildren in order toencourage childrearing by the whole family. For balancing withelderly care, we will implement seminars to prevent individuals fromtaking it all on themselves and provide videos on the intranet to beaccessible at any time. In addition to in-house services, we will also
provide an external counseling service to establish a workplace
where employees can work safely in cooperation with specialists.
◆ Practice of DX that makes achievements
・ Accelerating development of DX human resources
To help all Group members take ownership of DX, we will provide
learning opportunities that include discussions in the workplace on
what to start with and video learning. For DX promotional staff in thedepartments, we will visualize their present skills throughassessment and implement more comprehensive training thatcombines online learning for further skill upgrading with streamlining
tools, such as RPA, generative AI, and codeless workflow
development tools.
・ Establishment of a learning, challenging, and achieving cycle
aimed at maximized achievements
To ensure that individual learning about DX and improvement in daily
operation will lead to challenges on larger issues, the creation of newvalue, and streamlining, we will support individual learning andpractice and DX in the departments by visualizing and sharing actual
cases and achievements thereby pursuing continuous reforms inbusiness models throughout the TOTO Group.
◆ Creating a healthy environment that enables working with ease
We will promote health management by creating a good person
before making a good product and striving for sustainable growth of
the Company and society.
・ Fulfillment of work-life balance
We will promote a reduction in long working hours and ensure that
100% of employees can take paid leave as scheduled for therealization of each employee’s well-being by integrating their workand lives.

IV. Matters Related to Internal Control System
1.

Basic Views on Internal Control System and the Progress of System Development

The following provides the content of the system for ensuring appropriate work practices (Internal Control
System) and the outline of the operational status for fiscal 2022 under the system:(1) System for ensuring that the execution of duties by Directors complies with laws and regulations andwith the Articles of Incorporation- TOTO has established, and complies with, the TOTO Group Corporate Philosophy, Charter of
TOTO Group Corporate Behavior, and TOTO Group Rules for Compliance Promotion
Management.
- TOTO has established Rules for the Directors and Board of Directors and Rules for System for
Formal Approval, and makes decisions and executes operations that conform to laws andregulations of the countries in which TOTO Group companies are located and the Articles ofIncorporation.
- TOTO has appointed Outside Directors to strengthen operational oversight by its Board of
Directors and to ensure transparency of its decision-making.
- TOTO has inform all of its Directors of laws and regulations requiring their particular attention as
Directors by conducting training etc.
- TOTO has established the TOTO Group Rules for Public Communications, in order to disclose not
only information required by laws and regulations of the countries in which its businesses arelocated, but also information affecting stakeholders, in a fair, timely and comprehensible manner.
[Outline of the operational status]
The Philosophy system for TOTO Group management has been formulated as a foothold for all
business activities. Directors comply with the laws and regulations and articles of incorporation inaccordance with the TOTO Group Rules for Compliance Promotion Management.
At Meetings of the Board of Directors, TOTO has appointed three Outside Directors who are
independent of the company to ensure fairness, objectivity and transparency to receive various
advices and suggestions for the company’s general management.
In order to remain as a corporation needed by society, we strive to improve the satisfaction of
stakeholders through communication and to ensure proper and fast information collection, display, andutilization by working with stakeholders.
(2) System for storing and managing information relating to the Directors’ execution of duties
TOTO appropriately and reliably stores and manages the minutes of Meetings of the Board of
Directors and the Management Committee, as well as Request for Formal Approval, as information
associated with the Directors’ execution of duties under Rules for the Board of Directors,
Management Committee and Rules for the System for Formal Approval in writing or aselectromagnetic records so that they can be easily retrieved. The information is available forinspection for up to a period of 10 years.
[Outline of the operational status]
TOTO stores and manages the minutes of Meetings of the Board of Directors and Management
Committee, and Requests for Formal Approval in the state available for inspection for up to a period of
10 years in writing or as electromagnetic records under the rules and regulations.
(3) Rules for the management of the risk of loss and other systems- TOTO has established the TOTO Group Rules for Risk Management to prevent crises fromoccurring, to quickly resolve crises that have occurred and to minimize damage thereof, as well as
to prevent them from recurring.
- TOTO has set up the Risk Management Committee, headed by its Representative Director, toidentify and manage risks relating to the execution of the businesses and operations of the TOTO
Group. TOTO has also established a division to manage and control specific risks and has beenrunning risk simulations to develop and maintain its risk management system.
[Outline of the operational status]
At the Risk Management Committee held four times annually, critical risks that may impact greatly on
stakeholders are extracted. The General Manager of Risk Management was appointed to each risk.

The critical risks extracted were evaluated by a matrix method for their impact level and occurrence
frequency from the perspectives of defamation, personal influence, and monetary impact according to
the envisaged scenarios. The Risk Management Committee conducted monitoring with top risk items
as the most important risks to promote risk reduction activities as a whole.
(4) System for ensuring the efficient execution of duties by Directors- By holding regular monthly Meetings of the Board of Directors and extraordinary Meetings of theBoard of Directors as necessary, TOTO has engaged in full deliberation with regard to making
decisions on important business execution.
- Issues of a certain level of importance in business execution that do not need to be approved by
the Board of Directors have been approved through deliberation by the Management Committee(held twice a month, in principle), consisting of executive Directors.
- TOTO has introduced the Executive Officer system to achieve faster decision-making in operations
and to clarify management responsibility.
- TOTO has established Rules for Policy Management and ensures that business policies are
adopted in all divisions in order to achieve its business goals.
- TOTO has set forth Office Organization Rules, Rules for Description of Duties and Rules for
Meetings and Committees to define authority and responsibilities in office organization, operational
structure, meetings and committees, and to streamline operations and improve efficiency.
[Outline of the operational status]
The Board of Directors held a meeting once a month to discuss and approve significant deals in atimely manner. Significant deals and related issues are discussed and prioritized at Management
Committee meetings prior to discussion at Meetings of the Board of Directors. Materials are distributed
in advance and explanations concerning such matters are provided. This allows enough time for the
Board of Directors to engage in active discussion at Meetings of the Board of Directors. The decisions
made at the Board of Directors about business policies and business goals are developed based on
the Rules for Policy Management to confirm that the decisions are executed rationally and efficiently
through the Executive Officer system. The achievement status is also reported to all directors on amonthly basis.
(5) System for ensuring that employees’ execution of duties complies with laws and regulations and the
Articles of Incorporation- TOTO has established the TOTO Group Corporate Philosophy, Charter of TOTO Group Corporate
Behavior, and TOTO Group Rules for Compliance Promotion Management and ensures that all
people working for the TOTO Group perform their duties based on laws and regulations of thecountries in which its businesses are located and the Articles of Incorporation.
- TOTO has established the Compliance Committee, headed by its Representative Director andInternal Audit Office, which is independent of operational divisions, and endeavors to develop andmaintain the compliance system for the entire TOTO Group under the direction of the President.
- TOTO has been taking steps to raise the compliance awareness of all people working for the
TOTO Group through the distribution of compliance manuals, training at each office and e-learning,among other means.
- TOTO has established and operates the Whistle-Blowing System through its internal compliancedivision and an external third-party organization, which allows all employees of the TOTO Groupand people associated with its business relationships to report violations of laws and regulations or
acts of violations of other compliance guidelines of the countries in which they are located, without
receiving disadvantageous treatment.
[Outline of the operational status]
The Compliance Committee, which is held four times annually, incorporates the confirmation andapproval process of annual plans and implementation results for compliance education and monitoringon a global basis. This allows more effective and highly transparent activities of promoting compliance.
TOTO created the TOTO Group Business Conduct Guidelines (translated into 14 languages), whichsummarizes the Corporate Philosophy, Top Commitment and Behavior Policy to facilitate thepromotion of behaviors required for TOTO’s Group employees working in each country and region anddistributed to overseas group companies. In addition, in order to penetrate compliance to each
employee, we offered training and e-learning to newly-appointed general managers and managers,group company presidents, and new employees. In addition, TOTO Group has a whistle-blowingcontact center for compliance issues operated by the third party in Japan. The names of reporters andother personal information are strictly protected. The similar whistle-blowing system is in operation
overseas.
(6) System for ensuring appropriate work practices in the TOTO Group, consisting of TOTO and its
subsidiary companies- The above “(3) Rules for the management of the risk of loss and other systems” and “(5) Systemfor ensuring that employees’ execution of duties complies with laws and regulations and the
Articles of Incorporation” also apply to TOTO Group companies.
- To ensure the reliability of financial reports, TOTO has developed and operates and evaluates its
internal control of financial reporting, thereby improving business operations.
- To ensure appropriate work practices in the TOTO Group, TOTO has established “Rules for the
Operation of Group companies, affiliates, etc.,” which require Group companies to request TOTO’s
Formal Approval for decisions or the prior approval of TOTO, or to submit prior reports to TOTO
when making decisions about important management issues for Group companies.
- To ensure effective business execution within the TOTO Group, TOTO has appointed the division
with the closest relationship to the business of a Group company as its controlling division, andinstructs the general manager of the division to monitor the status of business activities of suchcompany and to provide necessary guidance and assistance.
- TOTO dispatches Directors or Audit & Supervisory Board Members to Group companies, aiming tobolster the governance of Group companies and to monitor their management.
[Outline of the operational status]
Based on the TOTO Group Rules for the Operation of Group companies, Affiliates, etc., TOTO isdeveloping the internal rules for each group company and requires Group companies to request
TOTO’s Formal Approval for decisions or the prior approval of TOTO when making decisions about
important management issues for Group companies. Also, to ensure proper and effective businessexecution within the TOTO Group, TOTO has appointed the division as its controlling division todispatch directors and audit & supervisory board members and to provide necessary guidance andassistance.
Internal Audit Office conducts internal audit of the group companies and receives audit reports fromthe audit & supervisory board members of each group company to confirm the effectiveness of internal
control.
(7) Matters relating to employees to assist the work of the Audit & Supervisory Committee and relating to
independence of such employees from Directors (Excluding Directors who are Audit & Supervisory
Committee Members), and relating to ensuring the effectiveness of instructions by the Audit &Supervisory Committee to such employees- TOTO has established the Audit & Supervisory Committee Office, to assist the work of the Audit &Supervisory Committee, independent of its executive organization, which reports directly to the
Audit & Supervisory Committee. Full-time assistants to the Audit & Supervisory Committee,
including management-level members, are assigned to the Audit & Supervisory Committee Office.
- Transfer, evaluation and other matters concerning the audit assistants are determined with theconsent of the Audit & Supervisory Committee.
[Outline of the operational status]
TOTO has appointed six full-time assistants to the Audit & Supervisory Committee Members at the
Audit & Supervisory Committee Office, to assist the work of the Audit & Supervisory Committee
Members, which reports directly to the Audit & Supervisory Committee Members. In addition, transfer,
evaluation and other matters concerning the audit assistants were determined with the consent of the
Audit & Supervisory Committee Members.
(8) System for Directors (Excluding Directors who are Audit & Supervisory Committee Members) andemployees to report to the Audit & Supervisory Committee and other systems associated with
reporting to the Audit & Supervisory Committee- Directors (Excluding Directors who are Audit & Supervisory Committee Members) and divisions incharge regularly report the following matters to the Audit & Supervisory Committee:
a. Business conditions, results and forecasts of the TOTO Groupb. Occurrence of significant crises

c. Operational status of the Whistle-Blowing System and matters reported.
- The following systems have been established so that the Audit & Supervisory Committee are able
to obtain information necessary for audits in a timely manner:a. Inspection of important documents relating to business execution, including any request for
Formal Approval of TOTO and Group companies
b. Participation in important meetings, including Management Committee and the Sales andProduction Steering Meetingsc. Feedback from Directors and Audit & Supervisory Board Members, among others, with regard to
the business status of Group companies
d. Collecting information necessary for performing duties appropriately.
[Outline of the operational status]
The Audit & Supervisory Committee Members were requested to participate in important meetings andcommittees, such as Management Committee, to inspect important documents relating to businessexecution, including any request for Formal Approval. Directors and divisions in charge regularly report
the following matters to the Audit & Supervisory Committee Members as needed. Through this,business conditions, results, and forecasts of the TOTO Group, as well as the occurrence of significant
crises were reported to Audit & Supervisory Committee Members.
(9) Matters relating to policies for procedures for prepayment or reimbursement of expenses incurred
when the Audit & Supervisory Committee execute their duties and for other procedures involving
expenses or obligations incurred upon execution of such duties
TOTO pays or reimburses expenses, as necessary, for the execution of duties by the Audit &Supervisory Committee upon request.
[Outline of the operational status]
Procedures for prepayment or reimbursement of necessary expenses or obligations incurred upon
execution of duties by Audit & Supervisory Committee Members were properly executed by the Audit& Supervisory Committee Members upon request.
(10) Other systems for ensuring effective auditing by the Audit & Supervisory Committee
The following opportunities facilitate communication between the Audit & Supervisory Committee andDirectors (Excluding Directors who are Audit & Supervisory Committee Members), each division andeach Group company for the appropriate execution of their duties.
a. Providing an audit policy, an audit plan and audit results to the Board of Directors of TOTO
b. Exchanging opinions with Directors (Excluding Directors who are Audit & Supervisory
Committee Members) of TOTO
c. Exchanging information with divisions that the Audit & Supervisory Committee consider
necessary for carrying out appropriate audits, inter alia, the Internal Audit Office, theManagement Planning Department and the Accounting & Finance Division[Outline of the operational status]
The Board of Directors received reports of audit policies, audit plans, and audit results from Audit &Supervisory Committee Members at Meetings of the Board of Directors. The Board of Directors andAudit & Supervisory Committee Members regularly exchange opinions.
The Internal Audit Office, the Accounting & Finance Division, etc., regularly hold liaison meetings with
the Audit & Supervisory Committee Members to exchange information.
2.

Basic Views on Eliminating Antisocial Forces

The Charter of TOTO Group Corporate Behavior stipulates that the TOTO Group will deal decisively with
antisocial forces.
In addition, in dealing with antisocial forces, the TOTO Group stipulates the following items in TOTO
Group Rules for Risk Management:- Supervising department: General Affairs Division- Collaboration with relevant police stations and prompt consultation with corporate lawyers- Gathering information from consultation centers regarding criminal interference in civil affairs
Keeping employees informed on how to deal with antisocial forces in accordance with a corporate
defense manual

V.
1.

Other
Adoption of Anti-takeover Measures
Adoption of Anti-takeover Measures

Not Adopted

Supplementary Explanation<Basic policy regarding persons who control decisions on TOTO’s financial and business policies(overview)>
TOTO believes that persons who control decisions on its financial and business policies should fully
understand the business characteristics of the TOTO Group and the sources of TOTO’s corporate value,and be able to ensure and enhance its corporate value and the common interests of shareholders from a
medium- to long-term perspective.
Since its founding in 1917, TOTO has consistently pursued the implementation of its philosophy to“contribute to the betterment of society” through its business operations. Among the efforts for creating
and offering an enriched and more comfortable lifestyle and culture built on its plumbing products, TOTO
has carried out comprehensive business activities to create and provide corporate value through longterm investment in necessary facilities and personnel as well as continuous R&D and market
development efforts. Such comprehensive activities include the development of power and water-saving
technology that promotes “care for the environment” as well as raw materials that allow realization of“cleanliness and comfort” and “universal design,” and before- and after-sales service programs thatprovide “safety and security” in the Japanese markets.
Currently, TOTO is fulfilling its responsibilities for the supply of bathroom and kitchen fixtures as a resultof establishing itself in the Japanese market for such products. We are also endeavoring to further
increase our value through the development of global markets, mainly Americas and Asia, by making fulluse of the business model that TOTO has established in the Japanese market. TOTO’s continuous andextensive contribution to the betterment of society for nearly 100 years since its founding has secured thecurrent corporate value and interests of shareholders.
We as a public company are obviously obligated to allow our shares to be traded freely, and we believethat it should be left to the best judgment of our shareholders to finally determine whether to accept anoffer to purchase a large quantity of the Company’s shares by a certain person or certain group of
persons. Nevertheless, if we judge that such a bulk purchase of the Company’s shares may result insignificantly undermining our corporate values and thus the common interests of shareholders, we
believe it is necessary to take the necessary and appropriate action to ensure the protection of theCompany’s long-term shareholder value.
2.

Other Matters Concerning Corporate Governance System[Overview of the Timely Disclosure System][Basic stance on timely disclosure]
The TOTO Group states in the “TOTO Group Communication Policy” that it strives to increase thesatisfaction of its stakeholders through communication in order to remain a company needed by society,to promote prompt and appropriate collection, disclosure and use of information, and to work incooperation with its stakeholders.
The “TOTO Group Communication Policy” and the “IR Policy” are stated in “2. IR Activities” of“Implementation of Measures for Shareholders and Other Stakeholders” in this report.
[Internal system for ensuring timely disclosure]
The TOTO Group’s internal system for ensuring timely disclosure is as described below:(1) Disclosure of information on decisions made and settlement information(i) Related divisions of the TOTO Group identify and understand important information.
(ii) Related divisions report to the Board of Directors and the Management Planning Department, thesecretariat of the Management Committee.

(iii) Determine the necessity for disclosing information at the Information Disclosure Study Meeting,periodically held (once a month, in principle) by the Management Planning Department, and details
and method of information disclosure.
(iv) The Internal Audit Office and the Audit & Supervisory Committee (the Audit & Supervisory
Committee Office) monitor the Information Disclosure Study Meeting.
(v) The Management Planning Department reports and makes a proposal on the necessity for
information disclosure to the Board of Directors and the Management Committee.
(vi) Determine the necessity for information disclosure at meetings of the Board of Directors and theManagement Committee(vii) The division in charge of information disclosure discloses the information.
(2) Disclosure of information on the events occurred(i) Related divisions of the TOTO Group identify and understand the events occurred.
(ii)The related divisions report on the events to the General Affairs Division, the secretariat of the Risk
Management Committee.
(iii) The General Affairs Division determines the response level.
(iv) Emergency headquarters, etc., determines the necessity for information disclosure upon
communication with the secretariat of the Risk Management Committee and related divisions.
(v) The division in charge of information disclosure discloses the information.

[Reference: System Diagram of Corporate Governance and Business Operations][Overview of the Timely Disclosure System]

Information on Decisions Made and Settlement Information
Related divisions,Group companies
Understand and reportimportant information

Information Disclosure
Study Meeting

Board of Directors and Secretariat ofManagement Committee(Management Planning Division)

Report, make proposals

Judge*(Determine the information to be disclosed,
disclosure methods, etc.)

Monitoring

Board Meetings and Management
Committee meetings

Internal Audit Office
Audit & Supervisory Committee

Decide(Audit & Supervisory Committee Office)Information disclosure* The Management Planning Division, General Affairs Division, Accounting & Finance Division, andLegal Affairs Division shall confirm and review the content. They shall consult with each divisionin charge of the relevant important information or with external experts as needed.

Information on the Occurrence of an Event
Occurrence of event
Recognize, check

Related divisions, Group companies
ReportSecretariat of Risk Management
Committee (General Affairs Division)
Determine response level

Emergency Headquarters, etc.
DecideInformation disclosure

Report