Toto : Integrated Report 2021

TOTO GROUP

Integrated Report

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Philosophy System for TOTO Group Management

The Spirit of TOTO Unchanging for

Words of Our Founder

Philosophy System for TOTO Group Management

Kindness must always come first.

Bring the concept of service to your work.

Your goal should be to provide good products and satisfy the customer.

Accomplish that, and profit and compensation will follow.

Many in this world chase after the shadow of profit. But, in the end, they never capture the real thing.

A letter written by TOTO's first president, Kazuchika Okura, to his successor, Saburo Momoki, contains words that have been treasured as the Words of Our Founder.

In 1962, we formulated the Company Mottos based on our corporate activities in the future while respecting the tradition of TOTO's founding.

These ideas, which have been passed down since our

founding, have been incorporated into the Philosophy System for TOTO Group Management so that they are appropriate for the times and can be shared within the TOTO Group.

Company

Mottos

			TOTO	Group
		Corporate
		Philosophy
Charter	of
TOTO
Corporate	Group
	Behavior

Common Group Philosophy

The Common Group Philosophy represents the inherited values of TOTO that are shared among employees and will be carried forward into the future.

Vision	Toward a Dynamic, Vibrant and Excellent TOTO

Mission

Mid- or Long-Term Management Plan

New Shared Value Creation Strategy TOTO WILL2030

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100 Years

Company Mottos

4

3

2

1

Company Mottos

1 Take pride in your work,

The Company Mottos represent the thoughts of the founder to beand strive to do your best

passed down through the generations.

2 Quality and Uniformity

	3	Service and Trust
TOTO Group Corporate Philosophy	4	Cooperation and
	Prosperity

Our Corporate Philosophy, based on the thoughts of the founder to be passed down through the generations, communicates to all of our

stakeholders the purpose for which our company exists, our businessTOTO Group Corporate Philosophy domains, and the type of company we aim to be.

The TOTO Group strives to be a great company trusted

		by people all around the world, and contributing to the
Charter of TOTO Group Corporate Behavior	betterment of society.
The Charter of TOTO Group Corporate Behavior stipulates the basic stance	To achieve our Corporate Philosophy, TOTO will:
Create an enriched and more comfortable lifestyle and culture
of behavior of all people working for the TOTO Group to realize all stake-
built on our plumbing products.
holders' satisfaction.
	Pursue customer satisfaction by exceeding expectations with
Details are published on the TOTO Group website.
our products and services.
https://jp.toto.com/en/company/profile/philosophy/group
		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.
Heart
Body	Vision for Business Activities

Our vision and mission are positioned as the course of our business activities that change in accordance with the demands of the times.

A statement that refers to the future image that the management of the TOTO Group seeks to achieve based on the Common Group Philosophy.

A statement of the most important plan to implement in the mid- or long-term for sustainable growth.

Vision

Mission

Lays out the ideal state of the TOTO Group and specific goals for implementing the plan. We will promote the New Shared Value Creation Strategy TOTO WILL2030.

Mid-
or	Term
Management
Long-
	Plan

TOTO GROUP Integrated Report 2021

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P. 5 -

For the Next 100 Years

This section describes the present state of the TOTO Group, a company with a history cultivated over the past 100 years, and introduces the future vision of the Group as well as its values as it looks toward the next 100 years.

P. 9 -

Message from the President

President, Representative Director Noriaki Kiyota explains the future vision of the TOTO Group and the efforts that will go into making it a reality.

P. 25 -

New Shared Value Creation Strategy TOTO WILL2030

This section explains the details, aims, and major efforts related to our mid- or long-term management plan.

P. 45 -

TOTO Global Environmental Vision

This section details the TOTO Global Environmental Vision, and describes how our specific corporate activities work toward realizing this greater vision.

P. 63 -

Corporate Governance

This section illustrates the TOTO Group's system of governance, which forms the basis for the sustainable enhancement of our corporate value, and features messages from Outside Directors.

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Editorial Policy

The TOTO Group Integrated Report 2021 has been published as an integrated communication tool for all our stakeholders. This report introduces information such as the origins of the TOTO Group and business activity topics in addition to financial and environmental, social, and governance (ESG) data. In addition, it communicates TOTO's corporate stance to remain committed to linking its past and present performance with its initiatives designed to further enhance corporate value for the future.

Period of Reporting

Fiscal 2020 (April 1, 2020 to March 31, 2021)

* This report includes some information pertaining to before or after the period.

Scope of Reporting

TOTO LTD. and Group companies

Statement of Results

Results and plans are based on the new accounting standard for revenue recognition.

Guidelines

International Integrated Reporting Framework, International Integrated Reporting Council (IIRC)

Guidance for Collaborative Value Creation, Ministry of Economy, Trade and Industry

Sustainability Reporting Standards, Global Reporting Initiative (GRI)

Reference guidelines are available on the TOTO Group website.

https://jp.toto.com/en/company/csr/gri

Financial and Non-Financial Data

Financial and non-financial data can be found on the TOTO Group website.

Financial and Non-Financial Data 2021

https://jp.toto.com/en/company/profile/library

Contents

Philosophy System for TOTO Group Management	1
For the Next 100 Years
Striving to Realize a Sustainable Society	5	For
About the TOTO Group (Fiscal 2020)	7
Next the
Message from the President	9
TOTO Group Value Creation Model	17	100
Years
TOTO Group Value Creation History	19
Initiatives to Create Value for Our Customers	21
Awareness of Opportunities and Risks	23
New Shared Value Creation Strategy TOTO WILL2030
New Shared Value Creation Strategy TOTO WILL2030 25	New
Value Shared
Mid-Term Management Issues WILL2030 STAGE1	29
Global Housing Equipment Business
Japan Housing Equipment Business	31	eationCr
China & Asia Housing Equipment Business	33
Strategy
Americas & Europe Housing Equipment Business	35
TOTO
New Business Domains
Advanced Ceramics Business	37	WILL2030
Cross-Organizational Innovation Activities
Marketing Innovation Activities	38
Demand Chain Innovation Activities	41
Management Resource Innovation Activities	43
TOTO Global Environmental Vision		TOTO
TOTO Global Environmental Vision	45	Global
Cleanliness and Comfort	47	Environmental
Environment	49
Relationships	51	Vision
Offering Satisfaction That Goes Above and Beyond
Customer Expectations	53
Together with Our Employees	55
Together with Our Suppliers	56
For Society	57
Dialogue with Shareholders and Other Investors	58
Stakeholder Engagement	59	Corporate
CSR Management	60
Governance
Corporate Governance
Corporate Governance	63
Messages from Outside Directors	69
Board of Directors	71
Corporate Information	73

TOTO GROUP Integrated Report 2021

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