Toyota Motor : Apr. 26, 2024

(Translation)

April 26, 2024

TOYOTA MOTOR CORPORATION

Koji Sato Telephone Number: 0565-28-2121

Code Number: 7203 https://global.toyota/en/

Corporate governance at Toyota Motor Corporation ("TMC") is as follows:

1. TMC's Basic Policy on Corporate Governance and Capital Structure, Business Attributes and Other Basic Information

1. Basic Policy

TMC has positioned the sustainable growth and the stable long-term growth of corporate value as priority management issues.

Believing that in carrying this out, it is essential that it both builds positive relationships with all stakeholders, including shareholders and customers as well as business partners, local communities and employees, as well as continues to supply products that will satisfy its customers, TMC has been working to enhance corporate governance.

[Reason not to implement each principle of Corporate Governance Code]

TMC implemented all of the principles of its Corporate Governance Code.

[Disclosure based on each principle of Corporate Governance Code]

1. Business principles 【Principle 3.1 (i)】

1. Corporate philosophy
   TMC, since its formation till today, has been following the "Toyoda Principles," which captures

the spirit of Sakichi Toyoda, the founder of the Toyota Group, and his insights into research, inventions and business management, as the foundation for its management.

Toyoda Principles (https://global.toyota/en/company/vision-and-philosophy/philosophy/)

Given past changes in the social landscape and the business structure, TMC has established the "Toyota Philosophy" and "Guiding Principles at Toyota" based on the "Toyoda Principles" in order to promote business in cooperation with people in different countries and regions throughout the world, notwithstanding differences in cultures and values.

"Guiding Principles at Toyota"

1. Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world.
2. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities.
3. Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities.
4. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.
5. Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honoring mutual trust and respect between labor and management.

1. 1. Pursue growth through harmony with the global community via innovative management.
   2. Work with business partners in research and manufacture to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships.
2. Vision

Taking into account the business environment then, the "Toyota Global Vision" was published in March 2011 based on the "Guiding Principles at Toyota." The "Toyota Global Vision" clarifies the direction that TMC should take as a company, based on the thought that "Toyota aspires to be a company that is chosen by its customers. Toyota wants to be a company that brings smiles to the faces of customers who have chosen us."

"Toyota Global Vision" (https://global.toyota/en/company/vision-and-philosophy/global-vision/)

(3) Toyota Philosophy

In order to advance its transition to a mobility company, TMC has reflected on the path it has taken thus far and has formulated the "Toyota Philosophy" as a roadmap for the future.

TMC's mission is "Producing Happiness for All" by expanding the possibilities of people, companies and communities through addressing the challenges of mobility as a mobility company. In order to do so, TMC will continue to create new and unique value with various partners by relentlessly committing towards monozukuri (manufacturing), and by fostering imagination for people and society.

Please see the end of this report for details on the "Toyota Philosophy."

2. Business strategies and business plans 【Principle 3.1 (i), Supplementary Principle 3.1.3】

Under the initiative of "making even better cars" that it has been engaged in since the 2008

global financial crisis, TMC is moving forward with product-centered management under the in-house company system to offer a common platform called TNGA (Toyota New Global Architecture) with enhanced driving basic performance and product appeal and to provide a full lineup of products with "good quality yet affordable prices" globally at the right place at the right time, as well as under the region-based system to offer products and services that are sympathetic towards customers in each country and region. Furthermore, having grasped the business situation based on its key businesses (vehicles, financial, others) and business regions (Japan, North America, Europe, Asia, others), TMC has established a medium-term management plan for each region, taking into consideration the prospect of markets and exchange rates, its production and supply system on a global basis and other factors.

In order to address climate change and take on challenge globally to realize carbon neutrality by 2050, TMC will respond deftly to changes in customer demand trends by providing a diverse set of product options, taking into consideration region-specific electric power conditions. Due to a once-in-a-century transformation brought about by the CASE* revolution, cars of the future will be connected to communities and people's lives through information, becoming part of our social systems. Amid this changing landscape, TMC is striving to completely redesign ourselves as a mobility company and ambitiously working to create an "ever-better mobility society" in which people can live happily, with smiles on their faces.

*CASE is an acronym for Connected, Autonomous/Automated, Shared, and Electric.

TMC has disclosed in the "Integrated Report" its long-term strategy for enhancing its corporate value and the ways that it is contributing to the sustainable development of society in order to communicate them to stakeholders. In addition, as for TMC's initiatives related to sustainability, it has developed the Sustainability Fundamental Policy and various other individual policies, and is striving to implement them to contribute to the sustainable development of society through corporate activities, which has been TMC's objective since its founding. TMC has disclosed information such as its policies and the status of initiatives in the "Sustainability Data Book." (The Sustainability Data Book is updated from time to time in accordance with the progress of TMC's activities.)

For information about TMC's initiatives regarding investment in human capital, etc., please read this report, the Integrated Report, the Sustainability Data Book and the Japanese annual securities report.

For information about TMC's initiatives regarding investment in intellectual property, please read the Integrated Report and the Sustainability Data Book.

TMC has disclosed its initiatives regarding climate-change related risks and opportunities based on the Task Force on Climate-related Financial Disclosures (TCFD) framework recommendations in the Integrated Report, the Sustainability Data Book and the Japanese annual securities report.

In order to convey top management's aspirations and the company's direction to all stakeholders of TMC, TMC communicates what TMC is really like through "Toyota Times."

"Integrated Report" (https://global.toyota/en/ir/library/annual/) "Sustainability Data Book" (https://global.toyota/en/sustainability/report/sdb/) "Japanese annual securities report" (https://global.toyota/jp/ir/library/securities-report/)"20-F" (https://global.toyota/en/ir/library/sec/)

"Toyota Times" (https://toyotatimes.jp/en/)

3. Basic views and guidelines on corporate governance 【Principle 3.1 (ii)】

Please see 1. "Basic Policy" of this report under the section entitled "I. TMC's Basic Policy on Corporate Governance and Capital Structure, Business Attributes and Other Basic Information."

4. Roles and duties of the Board of Directors and senior management

The scope of delegation to the management 【Supplementary Principle 4.1.1】

By specifying matters to be resolved at its Board of Directors and matters to be reported to its Board of Directors in the Regulations of the Board of Directors, TMC delegates management to executive officers and carries out "acceleration of decision-making" and "appropriate supervision."

To provide a full lineup of products with "good quality yet affordable prices" globally at the right place at the right time, and offer products and services that are sympathetic towards customers in each country and region, through the initiative of "making even better cars" that we have been engaged in since the 2008 global financial crisis, following the introduction of "region-based management" in 2011, the "business unit system" in 2013, and the "in-house company system" in 2016, in April 2017, TMC further clarified that Members of the Board of Directors are responsible for decision-making and management oversight and that operating officers are responsible for operational execution for purposes of further accelerating decision-making and operational execution.

Furthermore, in 2018, TMC brought forward the timing of executive changes from April, when it used to take place, to January, in order to further accelerate management oversight that is fully coordinated with the workplace. In addition, TMC transformed the company structure into one that enables decision-making that is both close to the needs of customers and close to where the action takes place, by taking measures such as reviewing the corporate strategy function and restructuring the Japan Sales Business Group into a group based by regions rather than sales channels.

In 2019, to further advance its "acceleration of management" and the development of a diverse and talented workforce, TMC made executive and organizational changes as follows.

• Executives are composed of only senior managing officers and people of higher rank.
• A new classification called "senior professional/senior management" (kanbushoku in Japanese) grouped and replaced the following titles or ranks: managing officers, executive

general managers, (sub-executive managerial level) senior grade 1 and senior grade 2 managers, and grand masters

From the perspective of appointing the right people to the right positions, senior professionals/senior management were positioned in a wide range of posts, from those of chief officer, deputy chief officer, plant general manager, senior general manager to group manager, regardless of age or length of employment, to deal with management issues as they arise and to strengthen their development as part of a diverse and talented workforce through genchi genbutsu (on-site learning and problem-solving).

In April 2020, TMC consolidated the post of executive vice president and the post of operating officer into the post of operating officer and in July 2020, clarified the responsibilities of operating officers. TMC redefined the role of operating officer to be members who, together with the president, have cross-functional oversight of the entire company. Furthermore, in-house company presidents, regional CEOs and chief officers, as on-site leaders of business implementation elements, were given authority while being consolidated into the rank of senior professionals/senior management. The roles of operating officers and senior professionals/senior management were determined where and as needed, and persons appointed as operating officers and senior professionals/senior management

changed in accordance with the challenges faced and the path that should be taken, as the company exercises greater flexibility than ever in appointing the right people to the right positions.

However, because of the rapidly changing business environment, TMC now recognizes that there is an increasing need for such executives to fulfill management roles (related to people, goods, and money) together with the President. Therefore, in April 2022, TMC reorganized the roles of operating officers and reestablished the position of "executive vice president," defining it as an operating officer who is focused on the business from a management perspective. In April 2023, the role of operating officers was revised to a management team that implements "product-centered (manufacturing ever-better cars) and region-centered(best-in-town) management" under the theme of "inheritance and evolution," and the executive vice presidents were selected upon their extensive knowledge and experience from the two pillars of products and regions.

TMC, based on its basic policy of appointing the right people to the right positions, has been swiftly and continuously innovating its Board of Directors and senior management. TMC will further press forward with the tide of such innovations, aiming for a corporate structure capable of carrying out management from a viewpoint that is optimal for a global company.

Views on the balance, diversity and size of the Board of Directors 【Supplementary Principle 4.11.1】

The Members of the Board of Directors are selected based on comprehensive consideration of their responsibilities to ensure TMC's sustainable growth and to enhance its corporate value over the medium- to long-term. TMC believes that it is critical to appoint individuals who are capable of contributing to decision-making aimed at sustainable growth into the future by practicing "product- centered and region-centered management" in keeping with the spirit of the "Toyoda Principles," which set forth our founding philosophy. Moreover, these individuals should be able to play a significant role in transforming TMC into a "mobility company" through responding to electrification, intelligence, and diversification and external partnerships based on trust and friendship and internal two-way interactive teamwork, while working towards solutions for social challenges such as the climate change issue.

In addition, TMC expects the Outside Members of the Board of Directors to utilize their extensive and rich experience and knowledge in TMC's management from an independent standpoint.

The Board of Directors shall consist of persons with a balance of abilities and consideration given to diversity in order to make important business decisions and supervise management appropriately, and the knowledge, experience, and abilities, etc. of the Members of the Board of Directors are listed in our skills matrix.

5. System to appropriately perform roles and duties of the Board of Directors and senior management

Policy and procedures for determining remuneration for top-level executives and Members of the Board of Directors 【Principle 3.1 (iii), Supplementary Principle 4.10.1】

TMC believes that it is critical to appoint individuals who are capable of contributing to decision- making aimed at sustainable growth into the future by practicing "product-centered and region- centered management" in keeping with the spirit of the "Toyoda Principles," which set forth our founding philosophy. Moreover, these individuals should be able to play a significant role in transforming TMC into a "mobility company" through responding to electrification, intelligence, and diversification and external partnerships based on trust and friendship and internal two-way interactive teamwork, while working towards solutions for social challenges such as the climate change issue. TMC's director compensation system is an important means through which to promote various initiatives and is determined based on the following policy.

It should be a system that encourages Members of the Board of Directors to work to improve the medium- to long-term corporate value of TMC

It should be a system that can maintain compensation levels that will allow TMC to secure and retain talented personnel

It should be a system that motivates Members of the Board of Directors to promote management from the same viewpoint as our shareholders with a stronger sense of responsibility as corporate managers

Remuneration and other payments to the Board of Directors is paid within the total amount of remuneration as resolved at the shareholders' meeting. The Board of Directors decides by resolution the policy for determining remuneration for and other payments to each member of the Board of Directors. Remuneration for Members of the Board of Directors is effectively linked to corporate performance while reflecting individual job responsibilities and performance. Remuneration for Outside Members of the Board of Directors and Audit & Supervisory Board Members consists only of fixed payments. As a result, this remuneration is not readily impacted by business performance, helping to ensure independence from management.

The amounts of remuneration for the Company's Members of the Board of Directors and the remuneration system are decided by the Board of Directors and the "Executive Compensation Meeting," a majority of the members of which are Outside Members of the Board of Directors, to ensure the independence of the decisions. The Executive Compensation Meeting consists of Shigeru Hayakawa, Member and Vice Chairman of the Board of Directors (Chairman of the Executive Compensation Meeting), Yoichi Miyazaki, Member of the Board of Directors, and Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima and Emi Osono, each an Outside Member of the Board of Directors.

The Board of Directors resolves the policy for determining remuneration for and other payments to each member of the Board of Directors and the executive remuneration system as well as the total amount of remuneration for a given fiscal year. The Board of Directors also resolves to delegate the determination of the amount of remuneration for each Member of the Board of Directors to the Executive Compensation Meeting. The Executive Compensation Meeting reviews the remuneration system for Members of the Board of Directors and senior management on which it will consult with the Board of Directors and determines the amount of remuneration for each Member of the Board of Directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance, in accordance with the policy for determining remuneration for and other payments to each member of the Board of Directors established by the Board of Directors. The Board of Directors considers that such decisions made by the Executive Compensation Meeting are in line with the policy on determining remuneration and other payments for each member of the Board of Directors.

Remuneration for Audit & Supervisory Board Members is determined by the Audit & Supervisory Board within the scope determined by resolution of the shareholders' meeting.

Policy and procedures for appointing/dismissing top-level executives and nominating candidates for Members of the Board of Directors and Audit & Supervisory Board Members 【Principle 3.1 (iv),

Supplementary Principle 4.10.1】

TMC comprehensively considers the system regarding Members of the Board of Directors in order to fulfil the responsibility to work towards sustainable growth and to enhance the corporate value of TMC over the medium- to long-term. TMC believes that it is critical to appoint individuals who are capable of contributing to decision-making aimed at sustainable growth into the future by practicing "product-centered and region-centered management" in keeping with the spirit of the "Toyoda Principles", which set forth our founding philosophy. Moreover, these individuals should be able to play a significant role in transforming TMC into a "mobility company" through responding to electrification, intelligence, and diversification and external partnerships based on trust and friendship and internal two-way interactive teamwork, while working towards solutions for social challenges such as the climate change issue.

In addition, TMC expects the Outside Members of the Board of Directors to utilize their extensive and rich experience and knowledge in TMC's management from an independent standpoint.

The Board of Directors shall consist of persons with a balance of abilities and consideration given to diversity in order to make important business decisions and supervise management appropriately, and the knowledge, experience, and abilities, etc. of the Members of the Board of Directors are listed in our skills matrix.

With the aim of ensuring independence, members of TMC's "Executive Appointment Meeting," of which a majority of the members are Outside Members of the Board of Directors, discuss recommendations to the Board of Directors concerning appointment/dismissal of Members of the Board of Directors. The Executive Appointment Meeting consists of Shigeru Hayakawa, Member and Vice Chairman of the Board of Directors (Chairman of the Executive Appointment Meeting), Yoichi

Miyazaki, Member of the Board of Directors, and Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima and Emi Osono, each an Outside Member of the Board of Directors.

With respect to Audit & Supervisory Board Members, TMC believes that it is necessary to have individuals who have broad experiences and insight in their respective fields of expertise and can advise management from a fair and neutral perspective, as well as audit the execution of business. Members of TMC's "Executive Appointment Meeting" discuss recommendations concerning appointment/dismissal of Audit & Supervisory Board Members to the Audit & Supervisory Board.

If there is any event where a Member of the Board of Directors or Audit & Supervisory Board Member is unable to fulfill his or her duties, the Executive Appointment Meeting considers whether he or she should be dismissed.

Explanations with respect to individual appointments/dismissals and nominations 【Principle 3.1 (v)】

The Notice of Convocation of General Shareholders' Meeting contains the individual profiles and professional histories of candidates nominated or elected for Members of the Board of Directors or Audit & Supervisory Board Member positions as well as the reasons for the elections of such individuals.

Effective use of Independent Outside Members of the Board of Directors 【Principle 4.8】, Criteria for assessing the independence of Independent Outside Members of the Board of Directors and their quality 【Principle 4.9】

Out of the ten Members of the Board of Directors, four Outside Members of the Board of Directors are registered with the Tokyo Stock Exchange as Independent Members in accordance with the requirements for outside directors set forth in the Companies Act and the independence standards set forth by financial instruments exchanges.

Concurrent positions of Members of the Board of Directors and Audit & Supervisory Board Members 【Supplementary Principle 4.11.2】

Concurrent service as officers of listed companies is noted each year in the Notice of Convocation of General Shareholders' Meeting.

Policy on training for Members of the Board of Directors and Audit & Supervisory Board Members 【Supplementary Principle 4.14.2】

TMC provides Members of the Board of Directors and Audit & Supervisory Board Members with opportunities to provide various types of information in order to improve their understanding and practice of the core ideals of "the manufacturing of ever-better cars" and problem solving based on the actual situation on-site (Genchi Genbutsu), and from the perspective of necessity for developing human resources to contribute to decision-making aimed at sustainable growth into the future.

Further to the above, TMC ensures that Outside Members will provide appropriate advice regarding each business challenge by explaining agenda items directly to them prior to a meeting of the Board of Directors. TMC also ensures that Outside Members have a deeper understanding of business strategies and other corporate matters by having them discuss with Members of the Board of Directors on the operational execution side through meetings, such as those of Outside Members of the Board of Directors.

Analysis and evaluation of the effectiveness of the Board of Directors 【Supplementary Principle

4.11.3】

In order to improve the effectiveness of the Board of Directors, TMC has conducted an analysis and evaluation of the Board of Directors as below.

(1) Analysis and evaluation

TMC conducted a survey about the composition, operation and efficacy of the supervisory function of the Board of Directors. Once views and proposals regarding the background and causes of the identified issues, as well as the improvement trajectory for such issues, were compiled and reported to the Board of Directors, they were discussed at the Board of Directors' Meeting.

• Method of evaluation: Self-evaluation through surveys

• Subject of evaluation: Members of the Board of Directors and Audit & Supervisory Board Members
• Implementation period: March 2023
• Matters to be evaluated: Matters including (1) composition and operation of the Board of Directors; (2) management strategy and business strategy; (3) corporate ethics and risk management; and (4) communication with stakeholders such as shareholders

1. Summary of the findings

The evaluation showed improvement particularly in information supply to Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members. However, further issues were identified in areas including time allocation, discussion on business strategy, and management with an awareness of sustainability, each of which relates to important topics.

In order to further improve the effectiveness of the Board of Directors, TMC will secure more opportunities for the Board of Directors to discuss important topics with respect to management strategy, and promote appropriate selection of topics to be proposed. At the same time, to provide more information to Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members for more effective and vigorous discussions, TMC will work to make further improvements through measures such as to enhance opportunities for dialogue and exchange with management.

6. Dialogue with shareholders 【Principle 5.1】

(1) Basic concepts

TMC believes that, in order to achieve sustainable growth and improvement of its medium- and long-term corporate value it is of crucial importance to have the understanding and support of shareholders and investors. It engages in constructive dialogue to furnish shareholders and investors with accurate information on a fair basis in order to build long-term relationships of trust.

(2) IR organization

Under the supervision of the accounting group chief officer, the Accounting Group and the Public Affairs Division are in charge of investor relations and IR staff members are stationed full-time in New York, U.S.A. and London, U.K.

1. Method of dialogue
   TMC holds briefings on management strategy, business and products as appropriate, including

(quarterly) results briefings for the press, analysts and institutional investors. With respect to dialogue with shareholders and institutional investors, representatives of TMC, including among others, senior management, Members of the Board of Directors, including Outside Members of the Board of Directors, Audit & Supervisory Board Members and IR staff members hold meetings with shareholders and institutional investors, as appropriate, depending on the nature of the request and the main interests in having such a meeting. In addition, it has a dedicated page for individual investors on its website that contains easy-to-understand information about results, business and management policy, as well as explains its efforts directly through means such as participation in briefing sessions organized by stock exchanges.

In fiscal 2022, in addition to four financial results briefings and eleven small meetings, we held more than 900 dialogues with individual shareholders and institutional investors. In addition, we have participated in more than 40 conferences organized by securities companies, and in North America, we held briefings on electrification strategies jointly with securities companies. At the dialogues with individual shareholders and institutional investors, dialogues between the Outside Members of the Board of Directors, Outside Audit & Supervisory Board Members, Chief Financial Officer, Chief Technology Officer, Chief Human Resources Officer, Chief Digital Officer, Chief Sustainability Officer, senior management and institutional investors were held on themes including revenue structure, electrification strategy, software strategy, governance, and diversity, and overseas roadshows and SR interviews with the senior management were held as well.

Since April 2023, we have conducted the New Management Policy & Direction Announcement, small meetings with the Outside Members of the Board of Directors, Outside Audit & Supervisory Board Members and senior management on the theme of governance, financial results briefings by the President and Executive Vice Presidents, and the "Toyota Technical Workshop," a technical briefing by the Chief Technology Officer. In addition, we received a shareholder proposal on March 13, 2023. The proposal was rejected at the 119th Ordinary General Meeting of Shareholders held on

June 14, 2023. TMC and the shareholders who submitted the shareholder proposal have been engaged in dialogues over the past two years.

(4) Feedback to the organization

Feedback regarding the content of dialogues with shareholders and investors is provided as necessary to the Board of Directors and executives' meetings.

1. Insider information and quiet periods
   No insider information (material nonpublic information) is communicated to shareholders or

investors in dialogues. TMC also has a "quiet period" from the day after the close of the quarter until the day on which results are announced during which it refrains from dialogues regarding results.

7. Securing of shareholders' rights and equality Strategically-held shares 【Principle 1.4】

1. Criteria for and view on classification of investment shares
   TMC only holds investment shares for purposes other than pure investment (strategically-held

shares). TMC does not hold any investment shares the purpose of which is solely to profit from changes in the value of shares or dividends on shares.

1. Investment shares for purposes other than pure investment (strategically-held shares) Shareholding policy, method of verifying the rationality of shareholding, and the description of

assessment of the propriety of holding of individual shares at the Board of Directors, etc. 1) Policies on strategic shareholdings

It is our policy that TMC does not hold strategically-held shares except for in the cases where such holdings are deemed to be meaningful. The case where such holdings are deemed to be meaningful refers to the case where it is determined that, in the business of manufacturing of automobiles, in which it is essential to keep a variety of cooperative relationships throughout the entire process of development, procurement, production, distribution and sales, such holdings contribute to the improvement of corporate value from the medium- to long-term perspective, based on a comprehensive consideration of business strategy, the establishment, maintenance and strengthening of relationships with business partners, and contribution to and cooperation in the development of society.

2) Assessment of the propriety of TMC's strategic shareholdings

When necessary, TMC engages in constructive dialogue with the issuers of shares to encourage them to improve corporate value and achieve sustainable growth. These dialogues provide opportunities to share and address business challenges. TMC reviews whether its individual shareholdings are meaningful in light of the changes in business environment, specifically examines whether the benefits and risks from such holdings are commensurate with the cost of capital, etc., and assesses the propriety of TMC's strategic shareholdings at the Board of Directors every year.

If TMC determines a shareholding is no longer meaningful or the meaning of a shareholding has been diluted due to changes in business environment or other reasons, TMC will proceed with the sale of such shares once it obtains consent from the issuer through a dialogue with the issuer.

Consequently, the number of companies whose shares TMC strategically holds has reduced to 141 (including 49 listed companies) as of March 31, 2023 from 200 (including 80 listed companies) as of March 31, 2015.

1. Standards on the exercise of voting rights with respect to strategically-held shares In principle, TMC exercises its voting rights for all items on the agenda.
   TMC does not exercise voting rights as a mechanical yes or no decision based on

formalized, short-term standards. Rather, decisions are based on a fulsome examination of the business policies and strategies of the issuer and are made for each item on the agenda from the perspective of whether corporate value and shareholder profit will be improved over the medium- and long-term.

TMC also engages in dialogue with the issuer before determining whether or not it will support an item on the agenda that may have significant impact on shareholder profit (increase in authorized capital, anti-takeover measures, realignment of businesses etc.).

For the "Business-strategy Reasons for Holding, and Shareholding Status of, Strategically-held Shares and the Breakdown by Issue," please see the end of this report.

8. Transactions with related parties 【Principle 1.7】

TMC complies with the procedures set forth in the Companies Act regarding conflict-of-interest transactions with officers, and all transactions with non-director executive officers require reporting to and approval of the Board of Directors.

With regard to procurement, production, distribution, and sales transactions, Toyota Code of Conduct requires compliance with all relevant laws and ordinances, transactions based on mutual trust and mutual benefit for TMC and the counterparty, and open, fair and free competition. These principles apply to transactions even if the counterparty is a major shareholder.

All relevant business units formulate their own guidelines and other procedural documents based on this policy, and take care to ensure that transactions with related parties do not harm the interests of the company or the common interests of all shareholders.

9. Roles of corporate pension funds as asset owners 【Principle 2.6】

Because the management of corporate pension funds may impact stable asset formation for employees, etc., and our own financial standing, TMC has provided support to establish a system to realize proper operation of the corporate pension funds from perspectives of human resources and operational practices, including an assignment of persons having expertise and knowledge with respect to asset management and other matters required for corporate pension funds as well as establishment of the management advisory committee, in order to increase the investment management expertise of corporate pension funds, thus making sure that corporate pension funds perform their roles as asset owners.

In addition, TMC ensures that conflicts of interest which could arise between pension fund beneficiaries and companies are appropriately managed, and gives consideration not to harm the benefits of beneficiaries, by leaving decisions entirely to management companies in the case where TMC exercises its voting rights of shares of the companies which TMC invests in, and other cases.

10. Ensuring diversity, including active participation of women 【Principle 2.4.1】

TMC promotes a workplace environment where all of its members can play an active role, regardless of differences such as gender, age or nationality, disability, sexual orientation, gender identity, etc. to help enhance its competitiveness through new ideas brought and issues recognized from diverse perspectives. TMC's human capital initiatives are detailed in this report, the Integrated Report, the Sustainability Data Book and the Japanese annual securities report.

1. Women

Stronger hiring efforts are being made to achieve employment and manager position ratios for women in office and technical positions that are equivalent to the ratio in the relevant labor market over the medium- and-long term (office: 40%, technical: 10%). The ratio of female skilled workers hired is also steadily rising due to the enhanced efforts to hire such employees. New graduate hiring results in the fiscal year ended March 31, 2023 were 38% for office positions, 18% for technical positions and 32% for skilled positions. Since TMC began full-scale hiring of women for office and technical positions, it has focused on various actions aimed at enhancing and strengthening support for working mothers. As an action plan under the Act on Promotion of Women's Participation and Advancement in the Workplace, TMC is currently promoting initiatives with the following targets: (i) To increase the number of females in managerial positions in 2014 fourfold by 2025 and fivefold by 2030; and (ii) To increase users of the teleworking system to more than 50 of all employees (except for production workers and managers) by 2025, irrespective of whether teleworking for childcare or nursing purposes.

Since 2016, TMC has been focusing on such initiatives as "work style reform (expanding the number of employees eligible for teleworking)," "improving the childcare environment (increasing the number of in-house childcare facilities and expanding childcare services such as shuttle bus for pick- up/drop-off at childcare facilities, child care for sick children and daycare services," and "raising awareness in the workplace and among supervisors (management training)." In the fiscal year ending March 31, 2023, TMC is focusing on promoting male employees' participation in childcare (by, for instance, including such topic in career interviews and identifying concerns and difficulties felt by the superiors and subordinates of male employees who provide childcare) and creating an environment that facilitates balancing fertility treatment and work (by establishing a system of paid

and unpaid leave to receive fertility treatment and fostering a corporate culture that is friendly to employees who take such leave).

1. Foreign nationals

TMC hires, trains and promotes employees regardless of nationality and does not set targets for management positions with respect to foreign nationals. On the other hand, TMC is actively securing global talent. For instance, Woven by Toyota, Inc., a subsidiary of TMC, has formulated a Diversity Inclusion Policy (D&I Policy), and in the fiscal year ended March 31, 2023, the result of newly hired non-Japanese employees was approximately 70% and the result of newly hired women employees was just over 20%. In addition, we have set a target ratio of women employees among full-time employees by 2025, with 35% of all women employees, 25% of engineers, and 35% of senior management positions, to be on par with leading global IT companies in each category.

1. Mid-careerhires
   The current mid-career hires account for approximately 30% of the total number of employees

hired each year, and TMC has set a goal of increasing this to 50% in the future. TMC trains and promotes employees regardless of how they joined the company. As a result, we see no significant difference in the promotion rate to managerial positions between career hires and new graduates.

1. Persons with Disabilities

TMC offers a variety of support to enable people with disabilities to work energetically, utilizing their abilities to the full. For example, TMC has assigned a job consultant to each office, created a consultation hotline, and introduced a special holiday system that can be used by employees when going to the hospital or other clinics. In terms of facilities, TMC creates workplaces with improved accessibility as needed, such as through, providing handicapped parking spaces and universally accessible toilets. TMC distributes guidebooks to those workplaces hiring employees with disabilities in order to help other employees better understand disabilities and gain the knowledge necessary to provide support if needed. In addition, to cultivate a workplace-wide ethos, TMC has implemented "Emotional Barrier-free Training" which targets all employees to promote the understanding of and show empathy towards people with disabilities. As of June 2022, the number of persons with disabilities employed was 1,534 accounting for approximately 2.5% of the entire workforce (including special-purpose subsidiaries), which is above the legal requirement of 2.3%.

1. LGBT

TMC has launched initiatives with the aim of creating workplaces with an appropriate understanding and acceptance of LGBT individuals. At TMC, prohibition on discrimination or harassment of LGBT individuals has been incorporated into the employee behavioral guidelines, and TMC no longer requires new graduates to fill in their sex on their job application sheets. In addition to that, TMC has also established an internal harassment consultation hotline, and has systems in place for same-sex marriages and common-law marriages that are equivalent to those of legal marriages with respect to such matters as holidays and other employee benefits. In terms of corporate culture, in addition to enlightening newly graduated employees about human rights and holding experience- based training workshops conducted by external instructors (LGBT individuals) for mid-career employees, TMC requires all employees and officers to participate in an education program on basic knowledge about LGBT.

2. Capital Structure