LIXIL : Business Risks, Principal Group Companies, Investor Relations, External Recognition

Business Risks

This annual report contains information about business conditions, the financial situation, and other factors that may influence investor decisions. Forward-looking statements are based on the judgement of the LIXIL Group's management as of March 2018.

Statements concerning the future and assumptions are subject to uncertainty and risks, and actual results may vary significantly.

Economic Environment Risk

1) Changes in the Economic Environment

Operating revenues of most companies in the LIXIL Group are significantly affected by domestic demand in Japan. In particular, major fluctuations in new housing starts or the level of construc-tion orders received could have a negative effect on business performance and financial position of the Group. In addition, the LIXIL Group undertakes production and sales activities overseas, in Asian countries such as China and Thailand, and also in Europe and North America, etc. War, civil war, unrest, rioting, terrorist attacks, etc., in these countries could also have a negative impact on the business performance and financial position of the LIXIL Group. In order to be able to manage this type of situation, the Group is working to strengthen its renovation strategy and to develop new products that offer strong potential for successful development of overseas markets, etc. Further-more, the LIXIL Group strives to ensure that it can recognize early-warning signs of political instability, etc., developing in foreign countries, by working with external, third-party organiza-tions to implement regular monitoring of changes in the political situation, government finances, government policies, etc.

2) Exchange Rate Fluctuations

Exchange rate fluctuations have the potential to exert a substan-tial effect on the yen equivalents of assets and liabilities resulting from the foreign currency-denominated transactions of the LIXIL Group. Where transactions are denominated in foreign curren-cies, the prices of goods and amounts of sales could also be substantially affected. In order to be able to manage this type of situation, in addition to LIXIL's finance department in Japan, the LIXIL Group has also established four Regional Treasury Centers (RTCs) in LIXIL offices in China, Singapore, Germany, and the US. Besides implementing monitoring of exchange rates on a monthly basis, each RTC also implements hedging when necessary, in or-der to minimize the negative impact of exchange rate fluctuations.

3) Interest Rate Fluctuations

The Group's fund procurement is primarily in the form of interest bearing debt such as loans from financial institutions. If market interest rates were to increase substantially, it could have a ma-terial impact on the Group's business performance and financial position. In order to be able to manage this type of situation, in addition to LIXIL's finance department in Japan, the LIXIL Group has also established four RTCs in LIXIL offices in China, Singa-pore, Germany, and the US. By implementing fund managementoperations in each region on a consolidated basis, the RTCs are helping to make fund procurement more efficient, with enhanced stability. Besides monitoring interest rates in each country on a monthly basis, LIXIL has also put in place the systems needed to support the use of fixed interest rates, etc., when necessary.

LIXIL Group Business Activity Risk

1) Competition with Competitors, and Falling Product Prices Competition with Competitors, and Falling Product Prices The LIXIL Group faces severe competition in most of the markets in which it operates. For this reason, it is difficult to always set prices at levels that are advantageous to the Group.

Although the Group takes pride in its sperior products and ser-vices that contribute to improving people's comfort and lifestyles, there is no guarantee that it will enjoy a competitive advantage in terms of pricing. The LIXIL Group's products and services are exposed to intense price competition, which could have a negative effect on business performance and financial position of the Group. In order to be able to manage this type of situation, the LIXIL Group implements cost reduction measures and under-takes the development of new products that have high appeal.

2) New Product Development Risk

In its operations, the LIXIL Group is committed to providing exceptional products and services to satisfy its customers around the globe. The Group creates high-quality living spaces that are healthy, comfortable, and safe by continually develop-ing attractive products based on an accurate understanding of available technology and consumer needs. However, the Group's business performance and financial position could be adversely affected if a failure to respond appropriately to changes in market or industry needs were to result in a decline in growth and earning potential. In order to be able to manage this type of situation, the LIXIL Group is using collaboration with innovative start-ups and the effective utilization of global infor-mation networks in order to put in place the systems needed to be able to respond rapidly to changes in consumer needs. To develop attractive new products that can satisfy these needs, LIXIL is developing advanced new technologies such as AQUA CERAMIC (a new type of ceramic material), and is striving to realize speedy product development through the strengthening of design capabilities and the integration of product platforms.

3) Effectiveness of Tie-Ups with Other Companies, and of Corporate Acquisitions, etc.

The LIXIL Group may plan to expand its business operations through investments, including corporate acquisitions and capital partici-pation. To maximize the benefits of these acquisitions, the Group seeks to integrate them into its corporate culture and management strategies. However, there is no guarantee that the anticipated returns and synergy benefits will be realized. In addition, while the LIXIL Group makes every endeavor to avoid risk in the execution of acquisitions by undertaking detailed prior assessments of the financial conditions, contractual relationships, and other matters relating to the company involved, it is possible that contingent liabilities and unrecognized financial obligations may be revealed following acquisitions. As a result, it is possible that the business performance and financial position of the LIXIL Group will be adversely affected by these acquisitions and capital participation activities. In order to be able to manage this type of situation, the Group has formulated a common global policy on acquisitions, and has designed a process for post-acquisition review and monitoring which is now being utilized. LIXIL is also promoting organizational changes aimed at building an efficient, flat, simple organizational structure that facilitates the post-acquisition generation of synergy.

4) Effectiveness of Business Restructuring

In order to enhance management efficiency and competitiveness, the LIXIL Group may conduct business restructuring, including withdrawal from unprofitable businesses; the realignment of subsidiaries and affiliates, manufacturing bases, and sales and logistics networks; and the rightsizing of the workforce. These mea-sures could have an adverse impact on the business performance and financial positions of the LIXIL Group. In order to be able to manage this type of situation, the Company aims to maximize synergies generated between technology businesses after restruc-turing and to bring about an enhancement of its strategic effec-tiveness. It is doing so by strengthening communications between the management of the Company and technology businesses, the Directors and Executive Officers of Group companies, and employees to ensure the dissemination of the Company's strategy, and by strengthening the management of companies and regional portfolios. In addition, in order to build an organizational structure that will not necessitate large-scale business restructuring, as part of the strengthening of the post-merger integration (PMI) process in relation to M&A activity, LIXIL is striving to strengthen subsidiary governance through the creation and utilization of an effective, ap-propriate PMI process, by means of updating guidelines and clari-fying the PMI implementation process and progress report process.

5) Shortages of Raw Materials, etc., and Rising Procurement Prices The LIXIL Group procures materials, parts, services, and other supplies as required for its production activities. There is a pos-sibility that the amounts paid for these supplies will rise because of increased industry demand or increasing raw material prices. There is also a possibility that the reliability or reputation of the Group's products will be adversely affected by defects in or stock-outs of materials, parts, services, or other supplies. These factors could, in turn, adversely affect the Group's business performance and financial position. In order to be able to manage this type of situation, the LIXIL Group is working to build a stable supply system, by implementing measures that include the use of productswaps, multiple sourcing, performing supplier credit checks, maintaining regular communication with suppliers, implementing periodic quality tests, maintenance of safe inventory levels, etc.

Regulatory and Litigation Risk

1) Harm Resulting from Official Regulations

The LIXIL Group is subject to various official regulations, including the need to obtain approvals and permits from the government or official agencies for its business and investment activities, as well as patents and other intellectual property rights, envi-ronmental regulations, and other requirements. Such official regulations can be expected to change over time, possibly creating obstacles to business activities or imposing additional costs relating to compliance with new official regulations. These factors could have an adverse impact on the business perfor-mance and financial positions of the LIXIL Group. In order to be able to manage this type of situation, the Group has formulated the necessary policies and procedures for responding to chang-es in official regulations. By arranging regular opportunities for the exchange of information with managers at the LIXIL Group's overseas business locations, LIXIL has been able to put in place the systems needed to be able to draw up strategies for obtain-ing early warning of potential changes in official regulations.

2) Direct and Indirect Costs Associated with Product Liability and Compensation Claims

There is a risk that defects will occur in products and services supplied by the LIXIL Group, or that product recalls may be required. Major compensation claims or product recalls relat-ing to manufacturers' liability issues could result in substan-tial payments and have a negative effect on the reliability and reputation of the Group's products. Such situations could have an adverse impact on the business performance and financial position of the LIXIL Group. In order to be able to manage this type of situation, the Group has established quality manage-ment checkpoints for each stage in the new product design and development process, and has formulated rules that en-sure that design and development do not proceed until rele-vant issues have been overcome. In this way, LIXIL is able to reduce the likelihood that large-scale product liability claims or recalls will arise in relation to LIXIL's products and services.

3) Damages Arising Out of Lawsuits and Other Legal Proceedings The LIXIL Group conducts its business activities in Japan and in countries overseas. Accordingly, there is a risk that it may face lawsuits and legal proceedings. If the Group becomes the object of such legal action, there is also a possibility that this may result in major payments for damages. These circumstances could have an adverse impact on the business performance and financial position of the LIXIL Group. In order to be able to manage this type of situation, the Group has put in place systems that enable it to consult external experts such as attorneys, etc., when necessary.

4) Environmental Regulations and Occurrence of Related Issues The LIXIL Group, based on the Group Environmental Sustainability Principles, engages in a wide range of activities aimed at global environmental preservation. However, the Group cannot guaran-

tee that it will be able to completely prevent or mitigate any risk of environmental pollution. Should serious environmental pollution occur as a result of the Group's business activities, it could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, the LIXIL Group has formulated inspection rules regarding the clarifi-cation of and compliance with environment rules, in relation to ISO 14001 and environmental management systems. LIXIL also imple-ments periodic review in light of current implementation status.

Information Security Risk

In the course of carrying out its business activities, the LIXIL Group has occasion to handle various types of personal data, including customer data, necessitating rigorous information management. In the event that a personal data leak were to occur because of some unforeseeable circumstance, there is a possibility that the Group might suffer severe harm to its reputation, as well as possibly incur-ring significant monetary loss; this in turn could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, the LIXIL Group is working to strengthen personal data management, through the establishment of a dedicated unit for promoting rigorous personal data management, the putting in place of relevant regulations, ongoing implementation of appropriate training, etc. The Group has also established a Computer Security Incident Response Team (CSIRT) to deal with all types of cyberattack. The Group thus has a system in place not only for ongoing monitoring of external attempts to gain unauthorized access but also for implementing appropriate measures in the event of an incident occurring.

Disaster and Accident Risk

The LIXIL Group undertakes production and sales activities at many facilities in Japan and in other countries around the world, so there is a possibility that an earthquake, typhoon, or other natu-ral disaster occurring in one of these areas could cause serious damage to the Group's production, logistics, sales, or information management facilities. If a large-scale natural disaster such as a major earthquake did occur in Japan or in another country, it might result in the suspension of production operations or in delays in the supply of products, etc., which could have an adverse impact on the Group's business performance and financial position. There is also a possibility that industrial action, equipment breakdown, etc., could result in the suspension of, or placing of constraints on, the Group's business activities. While there is no guarantee of being able to prevent or mitigate the impact of such natural disasters, etc., in order to manage this type of situation the Group has formulated business continuity plans (BCPs) and updates them regularly; par-ticularly with regard to the Group's business locations in Japan, the Group aims to reduce the potential operational and financial impact by implementing geographical dispersal of production facilities, implementing seismic reinforcement work, etc., so that if a natural disaster does occur the negative impact will be kept to a minimum, and operations can be restored to normal as soon as possible.

Risk Relating to Accounting Estimates

In cases where it is necessary to make accounting estimates in order to draw up financial statements, the LIXIL Group makes such estimates on the basis of reasonable criteria. However, due to the inherent uncertainty that characterizes estimates, amounts may need to be adjusted and actual results may differ from the estimates, which could have an adverse impact on the Group's business performance and financial position.

1) Default on Receivables

In order to prepare for losses due to default on receivables by business partners, the LIXIL Group records the amount consid-ered to be uncollectible as a provision for doubtful accounts. Should the actual default level significantly exceed assumptions, the provision for doubtful accounts could be insufficient. More-over, as a result of reviewing assumptions due to the worsening of overall economic conditions and uncertainty in the credit standing of business partners, the Group could make additional provisions to this allowance. These developments could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, within Japan the LIXIL Group has drawn up rules and manuals relating to credit checks and the setting of credit facilities. Re-ceivables review meetings are held on a regular basis, and in the case of business partners where it is judged that there is a strong possibility of receivables being uncollectible, the Group imple-ments monitoring of management improvement status and risk reduction strategies at the level of individual business partners.

2) Changes in Pension Plan Obligations

The employee defined benefit pension plan obligations and related service costs of the LIXIL Group are calculated based on discount ratios and other underlying ratios. Changes in these basic ratios could cause a significant impact on busi-ness performance and financial position. In particular, a fall in discount rates could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, the Group has implemented various measures, including the returning to the government of the substitutional portion of the Employees' Pension - in respect to which there is a particularly strong need to minimize potential negative impacts - and the adoption of defined benefit contribu-tion pension plan and cash balance pension plan systems, etc.

3) Reduction of Fixed Asset Value

The LIXIL Group periodically uses asset impairment account-ing to calculate future cash flows relating to property, plant and equipment (PP&E), goodwill and other intangible assets, etc., and implements impairment measurement and impairment testing. It is therefore possible that the Group's business per-formance and financial position could be adversely affected if fixed asset impairment losses are shown in the accounts. In order to be able to manage this type of situation, the Corporate Financial Governance Office (which is supervised directly by the CFO) is implementing a performance management process with respect to both subsidiaries in Japan and those overseas,as part of its measures to strengthen financial governance. This makes it possible to obtain advance warning of potential fixed asset impairment losses arising in relation to idle assets or deterioration in performance, and to put in place a system that makes it possible to implement timely measures in cases where there are early-warning signs of performance deterioration.

4) Recoverability of Deferred Tax Assets

The LIXIL Group implements tax-effect accounting, and operating loss carried forward for tax purposes and deductible tempo-rary differences are booked as deferred tax assets. Judgments regarding the recoverability of deferred tax assets are made on the basis of forecasts that include estimates relating to future taxable income, etc. In cases where a change in the forecast of future taxable income means that a deferred tax asset calculated based on the forecast of future taxable income may be deemed to be non-recoverable, in part or in whole, the deferred tax asset in question will be abated, which could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, the Corporate Financial Governance Office (which is supervised directly by the CFO) is implementing a performance management process with respect to both subsidiaries in Japan and those overseas, as part of its measures to strengthen financial governance. This makes it possible to obtain advance warning of potential deteri-oration in performance, and systems have been put in place so that when the Group becomes aware of such a potential future deterioration in performance, LIXIL's finance and accounting department and tax department can formulate timely strategies in response, which may include the need to revise the judgment regarding recoverability of the deferred tax assets in question.

Risk Relating to International Taxation and Taxation Related to Organizational Restructuring

The LIXIL Group undertakes production and sales activities in countries outside Japan, and Group member companies supply raw materials, products, etc., to one another; consequently, there is the potential for international taxation risk in relation to trans-fer pricing taxation, etc. In addition, the Group may on occasion need to implement organizational restructuring within the Group in order to improve operational efficiency and strengthen compet-itiveness, and depending on the restructuring scheme adopted, even though the restructuring is intra-Group, it may be treated as a valuation at current cost transaction for tax purposes, or it may not be possible to carry forward operating loss from the non-surviving company, etc., in which case there may be an increased tax burden that could have an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, LIXIL's tax depart-ment has formulated the necessary policies and procedures and updates them as necessary, and has put in place a frame-work that makes it possible to select an appropriate approach when implementing organizational restructuring, by establishing systems that provide for opportunities for regular exchange of information with tax specialists at the Group's overseas busi-ness locations, and for timely consultation with experts.

Human Capital Risk

1) Securing and Cultivation of Human Talent

For the LIXIL Group to continue to develop as a business on a sustainable, long-term basis, it is vitally important for the Group to promote the ongoing retention and cultivation of human talent that possesses a high level of specialist skills, and also human talent with first-rate management capabilities in relation to busi-ness strategy and organizational management. However, partic-ularly in Japan, the trend towards smaller families and the aging population structure is leading to a shrinking of the workforce.

If the competition to secure vitally important human resources becomes increasingly intense, and if human talent recruitment and cultivation cannot proceed as planned, then over the long term this will degrade the efficiency of the Group's business operations, and there could be an adverse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, besides working actively to recruit both new graduates and experienced personnel on a year-round basis, and promoting measures to ensure the handing down of skills within the Group, for example by strengthening the human resources and training systems and by recruiting retired techni-cal specialists aged 65 or over as part-time workers, the Group is also promoting unified human resources cultivation planning that applies worldwide throughout the Group's global operations, and is endeavoring to ensure that the implementation of every individual program (including training for overseas assignments, shared e-learning programs, etc.) contributes to employee retention and cultivation. In addition, the Group is promoting diversity management (including management efforts directed towards the retention of female employees), and is proceeding with the establishment of the systems and environment needed to enable a wide range of employees to grow as individuals and maximize their capabilities. The LIXIL Group has also established a Shared Services Center in the Asia region. Besides working to help strengthen governance in the Asia region, it is also intended that the Center will assist in the building of a flexible organization-al structure that will be less vulnerable to changes in the labor environment, both in Japan and in the Asia region as a whole.

2) Labor Issues (Strikes, etc.)

There are significant differences in labor practices between the various countries and regions in which the LIXIL Group oper-ates, and there is the possibility of unforeseeable events such as changes in the regulatory environment, a worsening in the economic climate, etc., leading to a deterioration in labor rela-tions, possibly leading to strikes or other forms of labor dispute that might continue over an extended period, which in turn could represent an obstacle to the Group's operations and have an ad-verse impact on the Group's business performance and financial position. In order to be able to manage this type of situation, the Group holds regular labor-management coordination meetings at each business location, and consults with workers regarding improvements to the working environment and working condi-tions. Currently, the Group enjoys harmonious labor relations.

Principal Group Companies

As of March 31, 2018

Consolidated Subsidiaries

LIXIL Corporation*

Name	Location	Paid-in capital (¥ million)	Equity owned by the holding company (%)	Business segment
LIXIL Corporation*1	Koto-ku, Tokyo	34,600	100	LWT, LHT, LBT, LKT, H&S
LIXIL Total Service Corporation	Koto-ku, Tokyo	100	100	LWT
Dinaone Corporation	Tokoname, Aichi	90	100	LWT
TM.S Corporation	Chiyoda-ku, Tokyo	60	100	LWT
GROHE Group S.à r.l.	Luxembourg	€ thousand 57,143	100	LWT
59 affiliate companies of GROHE Group S.à r.l.	-	-	-	LWT
ASD Holding Corp.	New Jersey, USA	US$ thousand 412,956	100	LWT
12 affiliate companies of ASD Holding Corp.	-	-	-	LWT
A-S CHINA PLUMBING PRODUCTS Ltd.	Cayman Islands	US$ thousand 24,907	100	LWT
LIXIL Vietnam Corporation	Hanoi, Vietnam	VND million 743,386	100	LWT
LIXIL Building Materials Manufacturing (Suzhou) Corporation	Suzhou, Jiangsu, China	4,000	100	LWT
LIXIL Sanitary Fitting Manufacturing (Suzhou) Corporation	Suzhou, Jiangsu, China	1,730	100	LWT
Taiwan Inax Corporation	Taipei, Taiwan	NT$ thousand 282,677	67	LWT
LIXIL Total Hanbai Corporation	Koto-ku, Tokyo	75	100	LHT
Kawashima Selkon Textiles Co., Ltd.	Sakyo-ku, Kyoto, Kyoto	9,382	100	LHT
G TERIOR Corporation	Setagaya-ku, Tokyo	316	100	LHT
Asahi Tostem Exterior Building Materials Co., Ltd.	Koto-ku, Tokyo	2,000	80	LHT
LIXIL SUZUKI SHUTTER CORPORATION	Toshima-ku, Tokyo	1,989	100	LHT
LIXIL Toyo Sash Shoji Co., Ltd.	Chiyoda-ku, Tokyo	100	100	LHT
Sonitech Corporation	Shinjuku-ku, Tokyo	66	100	LHT
Kuwata Co., Ltd.	Suma-ku, Kobe, Hyogo	30	100	LHT
Oita Tostem Co., Ltd.	Oita, Oita	50	100	LHT
Nishi Kyushu Tostem Co., Ltd.	Saga, Saga	30	100	LHT
LIXIL ENERGY Co., Ltd.*1	Koto-ku, Tokyo	100	100	LHT
LIXIL TEPCO Smart Partners Inc.	Koto-ku, Tokyo	450	60	LHT
LIXIL INTERNATIONAL Pte. Ltd.	Singapore	30,565	100	LHT
TOSTEM THAI Co., Ltd.	Pathumthani, Thailand	Baht million 2,767	100	LHT
LIXIL Manufacturing (Dalian) Corporation	Dalian, Liaoning, China	US$ thousand 43,500	100	LHT
LIXIL GLOBAL MANUFACTURING VIETNAM Co., Ltd.	Dong Nai, Vietnam	US$ thousand 40,700	100	LHT
LG-TOSTEM BM Co., Ltd.*2	Seoul, Korea	Won million 15,355	50	LHT
PT. LIXIL ALUMINIUM INDONESIA	Cileungsi, Indonesia	IDR million 134,733	75	LHT

100

LWT, LHT,

LIXIL Renewal Corporation Star Alubuild Private Ltd.* LIXIL VIVA CORPORATION*

Name	Location	Paid-in capital (¥ million)	Equity owned by the holding company (%)	Business segment
LIXIL Renewal Corporation	Koto-ku, Tokyo	100	100	LBT
Star Alubuild Private Ltd.*3	Haryana, India	INR thousand 727,818	100	LBT
LIXIL VIVA CORPORATION*4	Urawa-ku, Saitama, Saitama	24,596	52	D&R
LIXIL Living Solution Corporation	Koto-ku, Tokyo	450	100	H&S
LIXIL Housing Research Institute, Ltd.	Koto-ku, Tokyo	1,250	100	H&S
JAPAN HOME SHIELD CORPORATION	Sumida-ku, Tokyo	205	100	H&S
LIXIL REALTY, Corp.	Chuo-ku, Tokyo	160	100	H&S
GHS Corporation	Koto-ku, Tokyo	100	100	H&S
JHS Engineering Corporation	Sumida-ku, Tokyo	20	100	H&S
LIXIL Home Finance Corporation	Chiyoda-ku, Tokyo	500	100	H&S
LIXIL Group Finance Corporation	Koto-ku, Tokyo	3,475	100	(Financing services for Group com-panies)
Permasteelisa S.p.A.	Veneto, Italy	€ thousand 6,900	100	-*5
38 affiliate companies of Permasteelisa S.p.A.	-	-	-	-*5
67 other companies*6

100

(Financing services for

Equity-Method Affiliates

Sanyo Homes Corporation* Ken Depot Corporation 65 other companies*

Name	Location	Paid-in capital (¥ million)	Equity owned by the holding company (%)	Business segment
Sanyo Homes Corporation*7	Nishi-ku, Osaka, Osaka	5,945	24	H&S
Ken Depot Corporation	Chiyoda-ku, Tokyo	100	34	D&R
65 other companies*8

• *1 LIXIL ENERGY Co., Ltd. was acquired by and merged with LIXIL Corporation on April 1, 2018.

• *2 The holding of shares of this company is less than 50%, but it is treated as a subsidiary because it is effectively controlled by the Group.

• *3 Star Alubuild Private Ltd. changed its name to LIXIL WINDOW SYSTEMS PRIVATE LIMITED in April 2018.

• *4 The company submits securities registration statements and securities reports.

• *5 Manufacture and sales of curtain walls.

• *6 Among the other companies, LIXIL-Haier Housing Products (Qingdao) Co., Ltd. ceased to be a subsidiary of the Company due to the transfer of all of its shares. GraceA Co., Ltd. was acquired by and merged with the Company.

• *7 The company submits securities reports.

• *8 Among the other companies, Fukui Computer Inc. ceased to be an equity-method affiliate due to the partial transfer of its shares.

106 LInIXvIeLsGtororuRp eCloartpiornatsion

107 Our History

Investor Relations

LIXIL's History

LIXIL Group Corporation regards investor relations (IR) as facilitating communication with capital markets in Japan and overseas and thereby helping enhance corporate value. Accord-ingly, the Company's IR activities convey messages from senior management to markets while providing senior management with feedback from markets in an unflagging effort to boost corporate value.

TOSTEM

INAX

1923 The Company is founded.

1949 Nihon Tategu Kogyo Co., Ltd. (now LIXIL Group Corporationis established.

1924 Ina Seito Co., Ltd.* is established as a producer of tiles, ceramic pipe, and terra cotta.

1945 Production of sanitary ware commenced.

1966 Housing aluminum sash business commenced.

1958 Production of Polybath commenced.

1971 Toyo Sash Co., Ltd. is established after absorbing Toyo Door and four other companies.

1967 Production of first integrated-type Japanese bidet toilet commenced.

Regarding the disclosure of important information that affects investment judgments, such as decisions, events, or informa-tion regarding accounts settlement, the Company discloses the information based on the timely disclosure rules enacted by the Tokyo Stock Exchange. It is also the Company's policy to dis-close information that does not fall under the timely disclosure rules, as positively and fairly as possible, in order to better meet investors' needs.

1974 Toyo Exterior Co., Ltd.* is established. Housing exterior business commenced.

1968 Production of unit bathrooms commenced.

1985 Company name is changed to Inax Corporation*.

1977 Viva Home Corporation (later TOSTEM VIVA CORPORA-

TION) is established. Home center business commenced.

1984 Eyeful Home Technology Inc. (now LIXIL Housing Research

URL:www.lixil.com/en/investor/

IR Team (from left): Mariko Mikami, Yukiyo Uto, Kayo Hirano (Senior Manager, Investor Relations Office), Jin Song Montesano (Executive Officer and Senior Managing Director, Public Affairs, Investor Relations, External Affairs, and Corporate Responsibility), Shizuka Fukushima, and Hiroyoshi Fujiwara

Institute, Ltd.) is established. Homebuilding franchise chain operation commenced.

1996 VINAX (now LIXIL Vietnam Corporation), manufacturing joint venture for sanitary ware in Vietnam, is established. Suzhou Inax Sanitary Fitting Co., Ltd. (now LIXIL Sanitary Fitting Manufacturing (Suzhou) Corporation) is established in China.

1985 Mitsui Light Metal Processing Co., Ltd., Nittetsu Curtain-wall Corporation, and Nittetsu Sash Sales Corporation join the Group.

1998 Suzhou Inax Building Materials Co., Ltd. (now LIXIL

Building Materials Manufacturing (Suzhou) Corporation), a tile manufacturing company in China, is established.

1987 TOSTEM THAI Co., Ltd. is established. Overseas production of sashes commenced.

1992 Toyo Sash Co., Ltd. is renamed Tostem Corporation.

1999 JIO Corporation is established.

2000 Toyo Exterior Co., Ltd.*, Eyeful Home Technology Inc. and

Suzuki Shutter Manufacturing Co., Ltd. (now LIXIL SUZUKI SHUTTER CORPORATION) became wholly owned subsid-iaries.

2001 Tostem Corporation is renamed Tostem Inax Holding

2010 New Group brand LIXIL is introduced.

Corporation, became a pure holding company, and swaps

SUN WAVE CORPORATION* and Shin Nikkei Company,

stocks with Inax Corporation*.

Ltd.* became subsidiaries.

Tostem Corporation*, an operating company, is established

through a corporate separation.

2002 Jyu-Tsu Corporation (now LIXIL REALTY, Corp.) joins the

2011 Tostem, Inax, Shin Nikkei, SUN WAVE (not including the production division), and Toyo Exterior are integrated and LIXIL Corporation is born.

Group.

Production of wooden interior furnishings commenced at

subsidiary Tostem Housing Products (Dalian) Co., Ltd.

Kawashima Selkon Textiles Co., Ltd. became a subsidiary. Permasteelisa S.p.A. of Italy became a subsidiary of LIXIL Corporation.

(now LIXIL Manufacturing (Dalian) Corporation) in Dalian,

2012 JS Group Corporation renamed LIXIL Group Corporation.

China.

Century 21 Housing Research Institute Ltd. (now LIXIL

Housing Research Institute, Ltd., after becoming Tostem

2013 INAX ENGINEERING Corporation and six other companies merge. The company is renamed LIXIL Total Service Corporation.

Housing Institute) is established.

2004 Tostem Inax Holding Corporation renamed JS Group

ASD Holding Corp. (ASB) of the US became a subsidiary of LIXIL Corporation.

Corporation.

2005 Asahi Tostem Exterior Building Materials Co., Ltd. is estab-

lished as a result of integration of Tostem Corporation* and

Asahi Glass Co., Ltd.

2014 GROHE Group S.à r.l. of Europe became an equity-method affiliate of LIXIL Corporation. (The Company acquires 87.5% of GROHE Group shares jointly with the Development Bank of Japan.)

2006 JS Group Senior Life Corporation (now a business of Senior

Life Company of LIXIL Corporation) founded and enters

LIXIL Corporation acquires shares in GROHE DAWN WaterTech Holdings Pty Ltd of South Africa.

fee-based senior citizens assisted-living home business.

2008 Jaxson S.P.I. Inc. became a subsidiary of Inax Corporation*.

2015 LIXIL Corporation converts GROHE Group S.à r.l. into a consolidated subsidiary.

2009 Tostem Corporation* establishes LG TOSTEM BM Co., Ltd.

jointly with LG Chem, Ltd., an LG group company in South

2017 LIXIL VIVA CORPORATION is listed on the first section of the Tokyo Stock Exchange.

Korea.

American Standard Asia Pacific became a subsidiary of

Inax Corporation.

* Currently LIXIL Corporation

External Recognition

From April 1, 2017 to July 31, 2018

Gomez IR Site Ranking 2017

Awarded silver prize in the over-all IR site ranking and first place in the "Metal Products" industry category from Morningstar Japan K.K. (October 2017)

Internet IR Commendation Award

FTSE4Good Index Series and FTSE Blossom Japan Index Became a constituent of the FTSE4Good Index Series and FTSE Blossom Japan Index, created by FTSE Russell for two consecutive years (June 2018)

Received "Internet IR Commen-

dation Award 2017" from Daiwa

Investor Relations Co., Ltd.

for six consecutive years

(November 2017)

Morningstar Socially

DJSI Asia Pacific Index Selected as a component of the Dow Jones Sustainability Indices (DJSI Asia Pacific Index), creat-ed by S&P Dow Jones Indices and RobecoSAM (September 2017)

Responsible Investment

Index (MS-SRI)

Nadeshiko Brand

Selected as a constituent stock of the Morningstar Socially Responsible Investment Index (MS-SRI) (December 2017)

Selected as a component of the Nadeshiko Brand, co-hosted by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange (March 2018)

MSCI Japan Empowering Women Index

Selected as a constituent of

the MSCI Japan Empowering

Women Index (WIN), created by

MSCI Inc. for two consecutive

years (July 2018)

Disclaimer

The inclusion of LIXIL Group Corporation in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement or promotion of LIXIL Group Corporation by MSCI or any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.