TM Toyota Motor Corporation

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of June, 2025

Commission File Number 001-14948

Toyota Motor Corporation

(Translation of Registrant’s Name Into English)

1, Toyota-cho, Toyota City,

Aichi Prefecture 471-8571,

Japan

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F  X   Form 40-F    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    

Material Contained in this Report:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 18, 2025

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

(Translation)

June 18, 2025

TOYOTA MOTOR CORPORATION

Koji Sato, President

Contact: +81 565 28 2121

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

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

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]

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. TMC has established the “Toyota Philosophy,” “Guiding Principles at Toyota” and other principles based on the “Toyoda Principles.”

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

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.

Guiding Principles at Toyota (https://global.toyota/en/company/vision-and-philosophy/guiding-principles/?padid=ag478_from_header_menu)

In addition to the above Vision and Philosophy, in January 2024, TMC announced its group vision, “Inventing our path forward, together,” that reflects the origin of TMC’s foundation and shows the future direction that the Toyota Group should take. TMC also set forth five attitudes to be embraced by Toyota employees. Under this vision, the Toyota Group should all embrace the spirit of invention within us, think of others, hone our skills, and continue to make the right things. In doing so, the Toyota Group will build a culture of mutual gratitude, and ensure we are needed in the future.

Toyota Group Vision (https://toyotatimes.jp/en/toyota_news/toyota_group_vision/)

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.

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.”

For information about TMC’s initiatives regarding investment in human capital, etc., please read this report, the Integrated Report, the Sustainability Data Book, the Japanese annual securities report and the 20-F.

For information about TMC’s initiatives regarding investment in intellectual property, please read the Integrated Report, the Sustainability Data Book and the 20-F.

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, the Japanese annual securities report and the 20-F.

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/)

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.”

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.

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.

Upon transitioning to a company with Audit and Supervisory Committee in June 2025, TMC reviewed the composition of the Board of Directors to enable more participatory management decision-making and oversight. In addition to appointing internal Members of the Board of Directors who can implement “product-centered and region-centered management,” TMC has also appointed independent Outside Members of the Board of Directors who can provide advice on new value creation and governance from a broad perspective.

In accordance with its basic policy of appointing the right person to the right position, TMC is implementing reforms in an agile and continuous manner. In an era of rapid change and uncertainty, TMC will continue to flexibly review and optimize its governance structure to ensure swift decision-making, while further strengthening its oversight functions and delegating authority to the executive management.

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” based on the “Toyota 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.

To ensure our Outside Members of the Board of Directors participate in decision-making from an independent standpoint and to reflect the opinions of more diverse stakeholders in management, TMC has disclosed the “Roles of and Expectations for Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members” and the “Independence Assessment Criteria.”

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.

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” based on the “Toyota Philosophy.” Moreover, these individuals should be able to play a significant role in transforming TMC into a mobility company based on trust and friendship and internal two-way interactive teamwork, while working towards the solutions of environmental issues, including climate change, as well as social challenges related to TMC and its value chain. TMC’s director compensation system is an important means through which to promote various initiatives and is determined based on the following policy.

Remuneration and other payments to Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) are paid within the total amount of remuneration as resolved at the 121st Ordinary General Shareholders’ Meeting held on June 12, 2025. The Board of Directors decides by resolution the policy for determining remuneration for and other payments to each Member of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members). Remuneration for Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) is effectively linked to corporate performance while reflecting individual job responsibilities and performance. Remuneration for Outside Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) and Members of the Board of Directors who are Audit and Supervisory Committee 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) 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 Yoichi Miyazaki, Member of the Board of Directors (Chairman of the Executive Compensation Meeting), and Shigeaki Okamoto and Kumi Fujisawa, 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) to the Executive Compensation Meeting. The Executive Compensation Meeting reviews the remuneration system for Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members), 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) 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 (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members).

Remuneration for Members of the Board of Directors who are Audit and Supervisory Committee Members is determined by the Members of the Board of Directors who are Audit and Supervisory Committee Members 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 [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” based on the “Toyota 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 Yoichi Miyazaki, Member of the Board of Directors (Chairman of the Executive Appointment Meeting), and Shigeaki Okamoto and Kumi Fujisawa, each an Outside Member of the Board of Directors.

With respect to Audit and Supervisory Committee Members, TMC believes that it is necessary to have individuals who have broad experience 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 Members of the Board of Directors who are Audit and Supervisory Committee Members to the Audit and Supervisory Committee.

To ensure our Outside Members of the Board of Directors participate in decision-making from an independent standpoint and to reflect the opinions of more diverse stakeholders in management, TMC has disclosed the “Roles of and Expectations for Outside Members of the Board of Directors” and the “Independence Assessment Criteria.”

If there is any event where a Member of the Board of Directors or a Member of the Board of Directors who is an Audit and Supervisory Committee 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 and Members of the Board of Directors who are Audit and Supervisory Committee Members 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, five 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 “Roles of and Expectations for Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members” and the “Independence Assessment Criteria”, which we formulated in accordance with the independence standards set forth by financial instruments exchanges.

TMC has set forth the “Roles of and Expectations for Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members” and the “Independence Assessment Criteria” to ensure our Outside Members of the Board of Directors participate in decision-making from an independent standpoint and to reflect the opinions of more diverse stakeholders in management.

Concurrent positions of Members of the Board of Directors [Supplementary Principle 4.11.2]

Concurrent service of each of the Members of the Board of Directors 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 [Supplementary Principle 4.14.2]

TMC provides Members of the Board of Directors with opportunities to participate in practical activities going beyond theoretical learning, such as factory inspections, 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 provides Outside Members of the Board of Directors with opportunities to participate in on-site inspections, including visits to subsidiaries, in order to deepen their understanding of TMC’s principles and initiatives. TMC ensures that Outside Members of the Board of Directors 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 of the Board of Directors have a deeper understanding of business strategies and other corporate matters by holding meetings between Outside Members of the Board of Directors and executive management as necessary where they can discuss such topics.

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.

In preparation for the transition to a company with Audit and Supervisory Committee and changes to the Board of Directors at the 121st Ordinary General Shareholders’ Meeting held on June 12, 2025, TMC conducted a survey and interviews about the composition, operation and exercise of the supervisory function of the Board of Directors. The 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.

At the Board of Directors meetings, overall corporate strategies were discussed before submitting specific proposals, thereby promoting discussions from a medium- to long-term perspective. The transition to a company with Audit and Supervisory Committee was resolved after repeated and thorough discussions to ensure that opinions from outside directors were taken into consideration. In addition to the above, to further invigorate discussions, relevant decision-making bodies were utilized, and Outside Members of the Board of Directors and Outside Audit and Supervisory Board Members were invited to participate in important meetings such as the Product and Design Decision Meeting. Through their participation in these meetings, Outside Members of the Board of Directors and Outside Audit and Supervisory Board Members have gained a deeper understanding of TMC’s management and have been able to discuss proposals at the Board of Directors meetings with a full understanding of the deliberation process.

Through discussions based on last year’s initiatives, the Board of Directors have come to the conclusion that it will continue to make improvements centered around three main themes: “sowing the seeds for the future,” “management with an awareness of stakeholder awareness,” and “ensuring all Members of the Board of Directors fulfill their roles.” As concrete measures for these themes, the Board of Directors will enhance follow-up on strategic topics and previously submitted agenda items, submit topics of high public interest, and further strengthen collaboration between the Board of Directors and the Audit and Supervisory Committee.

[Major agenda items discussed at the Board of Directors meetings (fiscal 2025)]

Management strategy: Alliance projects, and telecommunications-related projects, etc.

Financial results and finance: Financial results, dividends/treasury shares, loans to subsidiaries, and follow-up on strategically held-shares, etc.

Governance and internal control: Transition to a company with Audit and Supervisory Committee, Status of development and execution of internal control and its disclosure, evaluation of effectiveness of the Board of Directors, and internal audit policy, etc.

Risk management: Responses to certification issues, etc.

Sustainability: Sustainability Data Book, etc.

Others: Change of officers and those at managerial positions, remuneration for officers, disclosure of information (Annual Securities Report, Integrated Report, etc.), monthly production, shipments and sales results, and athlete support, etc.

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.

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.

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, 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 2025, in addition to four financial results briefings and seven small meetings, TMC held more than 900 dialogues with shareholders and institutional investors. We also participated in more than 40 conferences organized by securities companies. The dialogues with shareholders and institutional investors were also held, involving Outside Members of the Board of Directors, Outside Audit and Supervisory Board Members, the Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief Human Resources Officer, and/or other senior management members, with themes such as revenue structure, capital strategy, electrification strategy, software strategy, and governance. Overseas roadshows and SR interviews with the senior management were held as well.

Since April 2025, we have held a briefing session with the theme of TMC’s unique management and initiatives by the Chief Executive Officer and the Chief Risk Officer, a “governance briefing session” by Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members, and a financial results press briefing by the President and the Executive Vice Presidents.

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

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.

Strategically-held shares [Principle 1.4]

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.

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.

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.

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 115 (including 34 listed companies) as of March 31, 2025 from 200 (including 80 listed companies) as of March 31, 2015.

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.

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 and sales transactions, the Toyota Code of Conduct requires compliance with all relevant laws and ordinances, as well as transactions with fairness and integrity based on mutual trust and mutual benefit for TMC and the counterparty, and fair 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.

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.

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.

Stronger hiring efforts are being made, including mid-career hires, 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, 2025 were 40% for office positions, 12% for technical positions and 25% 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 fivefold by 2030; and (ii) To increase the ratio of 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 recent years, TMC has introduced a mentor program to support career development, held roundtable discussions with internal and external role models and global women’s conferences, promoted 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), enhanced the reduced working hours system for employees with children (up to the age of 18), and introduced a zero-hour work system, to create an environment in which each employee can pursue a diverse life and career path envisioned by them.

TMC hires, trains and promotes employees regardless of nationality and does not set targets for management positions with respect to foreign nationals. TMC develops human resources by accepting members of its overseas entities at TMC so that they can acquire skills, knowledge, and awareness of monozukuri (manufacturing) and when they return to their country, take the lead in various field activities and reforms in their local entity. In addition, TMC is working to create an environment that takes religion, lifestyle, and other factors into consideration when accepting members of the overseas entities.

The current mid-career hires account for approximately 50% of the total number of employees hired each year. To secure diverse talent, TMC is continuously considering more flexible recruitment activities such as hiring individuals with distinctive expertise, experience, and backgrounds, regardless of age or educational background. In addition, to support the success of new employees after joining the company, TMC is promoting onboarding support measures that contribute to each individual’s sense of fulfillment and growth. TMC also provides development and promotion opportunities regardless of the form of employment.

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 2024, the number of persons with disabilities employed was 1,447 accounting for approximately 2.51% of the entire workforce (including special-purpose subsidiaries), which is above the legal requirement of 2.5% as of June 2024.

TMC has launched initiatives with the aim of creating workplaces with an appropriate understanding and acceptance of LGBTQ+ individuals. At TMC, prohibition on discrimination or harassment of LGBTQ+ 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, TMC provides information to ALLYs (persons who align with and support LGBTQ+) on a regular basis and has made video content (basic knowledge edition) available to all employees to promote understanding of LGBTQ+. Additionally, TMC offers experiential training using VR for those who wish to participate.

[Action to implement management that is conscious of cost of capital and stock price]

To meet the expectations of its stakeholders, TMC strives to achieve sustainable growth over the medium- to long-term and to improve capital efficiency while maintaining sufficient financial security to ensure a return on capital that exceeds the cost of capital on a consistent and stable basis. Details of these initiatives are disclosed in our Integrated Report and financial results press briefing materials.

Toyota will continue the dialogue with its stakeholders and monitoring of our cost of capital and return on capital to sustainably enhance our corporate value.

Integrated Report 2024 - “Value Creation Story” on P30-80 and “Business Foundations for Value Creation / Message from the CFO” on P97-100 (https://global.toyota/pages/global_toyota/ir/library/annual/2024_001_integrated_en.pdf)

FY2025 Financial Results Press Briefing, Presentation Material, “Transformation into a Mobility Company: ROE 20%” on P16, “(Ref.) Transition of ROE” on P30

(https://global.toyota/pages/global_toyota/ir/financial-results/2025_4q_presentation_en.pdf

[Status of holding dialogue with shareholders and other related matters]

For the status of holding dialogue with shareholders and institutional investors and other related matters, please see “6. Dialogue with shareholders [Principle 5-1]” above, “III. Implementation of measures for shareholders and other stakeholders / 2. IR activities” in this report, and the Integrated Report.

Integrated Report (https://global.toyota/en/ir/library/annual/?padid=ag478_from_header_menu)

[Description of Major Shareholders]

Supplementary Information

—

[Cementing our work foundation and addressing certification issues]

In fiscal 2025, as the foothold for sustainable growth, we have made steady progress in creating an environment in which we can demonstrate the “competitiveness of a company with the capacity to produce over 10 million cars” and our “ability to take on various challenges,” in other words, initiatives to cement our “work foundation.” We have been making company-wide efforts to create reserve capacity to develop human resources and ensure safety and quality. In particular, we have focused on improving the foundations of our production sites.

The environment surrounding manufacturing is becoming increasingly severe. Japan’s working-age population is expected to decline by 20% over the next 15 years. Buildings and facilities are aging, leading to more frequent impacts on operations. Based on our awareness of the issue that if we are unable to improve the productivity and comfort of our workplaces, we will risk losing the foundations of manufacturing, we have been working to improve plant environments through initiatives such as heat mitigation measures and create employee-friendly production lines that accommodate diverse individuals from all walks of life. [For details on TMC’s response to certification issues, please see “Cementing our work foundation and addressing certification issues” at the end of this report.

Based on the correction order dated July 31, 2024 from the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), we have made three quarterly reports on our progress on the recurrence prevention measures so far and have been making improvements. Through our response to these certification issues, we feel that this initiative itself is an effort to improve the overall culture, structure, and systems of TMC. We will continue to enhance the effectiveness of this initiative and work to further strengthen governance in a way that is unique to TMC.

[Group management]

The automobile business is a business in which a company’s collective strengths, ranging from materials to new technologies, are tested. To succeed in competition at a global level and maintain sustainable growth, it is essential for TMC to have steady partners in activities such as development, procurement, production, distribution and sales. Moreover, TMC must further collaborate with its group companies towards accelerating CASE technologies and achieving carbon neutrality, which are both focus areas of TMC. With the basic stance of friendship and partnership, which is to establish long-lasting collaborative relationships as a partner that shares values and pursues the development of society, TMC endeavors to improve the corporate value of its corporate group from a medium- to long-term perspective.

(Listed subsidiaries)

While TMC and its listed subsidiaries share visions and business strategies, the listed subsidiaries manage their businesses so as to improve their own corporate value based on their own independent business judgment in the common interest of their shareholders. The listed subsidiaries ensure independence of their boards of directors so that there are no conflicts of interest with general shareholders by having independent directors oversee executive officers.

TMC lays out its guiding principles and code of conduct and shares Vision and Philosophy with its subsidiaries, including listed subsidiaries. At the same time, TMC exchanges people and information with those subsidiaries. Any material management matters of the subsidiaries must be approved in advance by or reported to TMC in accordance with rules agreed upon by TMC and each subsidiary. Through these measures, TMC ensures the effectiveness of the governance system of its corporate group.

TMC has Hino Motors, Ltd. (“Hino Motors”) (listed on the Prime Market of the Tokyo Stock Exchange and the Premier Market of the Nagoya Stock Exchange) as a listed subsidiary. By combining the capabilities of the commercial vehicle business of Hino Motors and the CASE technologies of TMC, TMC will accelerate the spread and social implementation of CASE and aim to contribute to the achievement of a carbon neutral society and to address challenges that the transportation industry faces. At the same time, in its operating businesses, Hino Motors works to enhance its corporate value in a balanced and disciplined manner while considering the interest of TMC as well as general shareholders. Four out of seven directors of Hino Motors are independent outside directors. For important transactions with TMC, the Board of Directors of Hino Motors determines the appropriateness of the transactions after consulting with and receiving reports in advance from a special committee consisting solely of independent outside directors, which was established in the fiscal year ending March 31, 2023, in an effort to ensure independence so there are no conflicts of interest with general shareholders. In addition, Hino Motors is expected to no longer be classified as a consolidated subsidiary of TMC as a result of a series of transactions related to the business integration between Hino Motors and Mitsubishi Fuso Truck and Bus Corporation. The business integration is scheduled to take effect on April 1, 2026, subject to approval at the shareholders’ meetings of both companies and regulatory approvals from relevant authorities.

(Listed affiliated companies)

TMC has a diverse range of listed affiliated companies, including the Toyota Group, and operates globally. TMC and its group companies that are listed affiliated companies are engaged in various industries, including software and energy, as well as automotive manufacturing. Among them, major companies such as DENSO CORPORATION and AISIN CORPORATION have their own expertise and market positions, which enhance synergies with TMC and its group companies.

In January 2024, TMC announced the “Toyota Group Vision,” primarily to reaffirm the founding origins with the Toyota Group and to present the major direction the Toyota Group should aim for. By deepening collaboration with the companies that share this vision, TMC will work to transform ourselves into a mobility company and enhance the corporate value of the entire group, including subsidiaries and affiliated companies. In these efforts, the top management of Toyota Group companies work closely with each other and at all levels to share the major directions and promote mutual understanding.

TMC maintains a highly transparent governance structure in its relationship with listed affiliated companies. Specifically, TMC respects the uniqueness of each company and gives due consideration to the interests of general shareholders in its business collaborations and exchanges of opinions.

We will continue to strive to build a better management structure together with our group companies that share the same vision. TMC will continue to consider and review its relationships with each of the group companies that are listed affiliated companies based on factors such as business portfolio, shareholding ratios, and personnel exchanges, including members of the Board of Directors and the Audit and Supervisory Committee.

II.   Corporate Governance System of Management Business Organization, Etc. for Management Decision-making, Execution of Duties and Management Audit

[Members of the Board of Directors]

Relationship with the Company (1)

Relationship with the Company (2)

[Audit and Supervisory Committee]

Composition of the Committee and Attributes of the Chairperson

Matters concerning the independence of the above Members of the Board of Directors and employees who are Members of the Board of Directors

To assist the duties of the Audit and Supervisory Committee, the Audit and Supervisory Committee Office has been established, where dedicated employees are assigned. These employees must comply with the instructions and orders of the Audit and Supervisory Committee, and any changes in its personnel will require prior consent of the Audit and Supervisory Committee or a member of the Audit and Supervisory Committee designated by the Audit and Supervisory Committee.

Status of Coordination among the Audit and Supervisory Committee, Accounting Auditor, and Internal Audit Department

The Audit and Supervisory Committee regularly receives reports from the accounting auditor regarding audit plans, audit methods, and audit results. In addition, meetings are held as necessary to discuss matters related to audits in general, allowing for thorough exchanges of opinions. With respect to internal audits, the Internal Audit Department, which is an independent and dedicated organization, evaluates the effectiveness of internal controls related to financial reporting. The Audit and Supervisory Committee aims to enhance organizational audits through close coordination, including receiving reports from the Internal Audit Department on audit plans and results, as well as providing instructions to the Internal Audit Department.

[Voluntarily Established Committees]

Status of Voluntarily Established Committees, Attributes of Members Constituting the Committee and the Committee Chairperson

Committees equivalent to Nomination Committee

Committees equivalent to Remuneration Committee

Supplementary Information

Members of the Executive Appointment Meeting discuss recommendations to the Board of Directors concerning appointment/dismissal of Members of the Board of Directors. The Executive Compensation Meeting reviews the remuneration system for Members of the Board of Directors and senior management 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 order to ensure independence, the majority of the members at both meetings are Outside Members of the Board of Directors.

The members of both meetings are Yoichi Miyazaki, Member of the Board of Directors and Vice President, and Shigeaki Okamoto and Kumi Fujisawa, each an Outside Member of the Board of Directors.

[Independent Members of the Board of Directors / Members of the Board of Directors who are Audit and Supervisory Committee Members]

Other matters relating to Independent Members of the Board of Directors / Members of the Board of Directors who are Audit and Supervisory Committee Members

All Outside Members of the Board of Directors / Outside Members of the Board of Directors who are Audit and Supervisory Committee Members that qualify as Independent Members of the Board of Directors / Independent Members of the Board of Directors who are Audit and Supervisory Committee Members have been designated as Independent Members of the Board of Directors / Independent Members of the Board of Directors who are Audit and Supervisory Committee Members.

Based on the Toyota Philosophy, TMC is working to strengthen corporate governance with the aim of achieving sustainable growth, increasing corporate value over the medium- to long-term, and resolving social issues. To ensure our Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members participate in decision-making from an independent standpoint and reflect the opinions of more diverse stakeholders in management, TMC has clarified the unique roles of and expectations for TMC’s Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members and revised the Independence Assessment Criteria.

The details were discussed at the Executive Appointment Meeting in which a majority of the participants are Outside Members of the Board of Directors, and have been approved by the Board of Directors with the consent of all Members of the Audit & Supervisory Board before the transition to a company with Audit and Supervisory Committee.

(Outside Members of the Board of Directors who are Audit and Supervisory Committee Members)

Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members who satisfy the requirements stipulated by the Companies Act and do not fall into any of the following categories are deemed to be independent.

Persons who are currently functioning as executive directors, Members of the Board of Directors who are Audit and Supervisory Committee Members (excluding Outside Members of the Board of Directors), Audit and Supervisory Board members, operating officers, or employees of our company and its consolidated subsidiaries. Or those who functioned as executive directors, Members of the Board of Directors who are Audit and Supervisory Committee Members (excluding Outside Members of the Board of Directors), Audit and Supervisory Board members, operating officers, or employees of our company and its consolidated subsidiaries at any time during the last ten years.

Persons who are executing business in companies, etc. (executive directors, executive officers, operating officers, employees, or any equivalents; the same shall apply hereunder) where the amount of the transaction with our company and its consolidated subsidiaries is more than 2% of the consolidated net sales of their company or our company and its consolidated subsidiaries in any of the last three business years.

Persons who are executing business in companies from which our company and its consolidated subsidiaries borrowed funds amounting to more than 2% of the consolidated total assets of our company and its consolidated subsidiaries in any of the last three business years.

Consultants, accountants, or jurists who earned more than US$120,000 a year directly from our company and its consolidated subsidiaries as remuneration (excluding that for the function of Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members) in any of the last three business years.

Persons who (or persons belonging to organizations that) received contributions amounting to more than US$120,000 a year from our company and its consolidated subsidiaries in any of the last three business years.

Persons who are executing business in companies, etc., that are ranked tenth or higher in terms of the holding ratio of our company’s shares or for which our company is ranked tenth or higher in terms of the holding ratio of their shares.

Persons who currently belong to or belonged to, at any time during the last ten years, the audit firms serving as accounting auditors of our company and its consolidated subsidiaries

Spouses, or relatives within the second degree of kinship, either of Members of the Board of Directors, Audit and Supervisory Board Members, operating officers or key employees of our company and its consolidated subsidiaries, or of persons falling into the above 1 to 6 (excluding non-key persons).

Persons who are executing business in companies that are accepting one or more member(s) of the Board of Directors or the Audit and Supervisory Board from our company and its consolidated subsidiaries.

Persons whose term of office as an outside executive is longer than 12 years.

Persons who fall within any of the above-listed categories may be determined as independent, under the condition that our company discloses the reason for the determination when such persons satisfy the requirements for Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members stipulated in the Companies Act and are substantially independent, and thus, a conflict of interest with general shareholders is deemed not to emerge.

[Incentives]

Supplementary Information

For the policy and procedures of the performance-based compensation plan, please refer to “TMC’s Basic Policy on Corporate Governance and Capital Structure, Business Attributes and Other Basic Information/1. Basic Policy/Disclosure based on each principle of Corporate Governance Code.” For the method of determining performance-based remuneration, please refer to the end of this report.

In connection with the transition to a new corporate governance structure, based on the resolution at the 121st Ordinary General Shareholders’ Meeting held on June 12, 2025, the Company established a new maximum amount of compensation for Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) and a new maximum amount of compensation for granting of restricted share compensation to Members of the Board of Directors (excluding Outside Members of the Board of Directors and Members of the Board of Directors who are Audit and Supervisory Committee Members). Furthermore, at the Board of Directors meeting held on June 12, 2025, the Company resolved the policy for determining compensation for Members of the Board of Directors for fiscal 2026 and beyond.

Persons Eligible for Stock Options

Supplementary Information

—

[Remuneration for Members of the Board of Directors]

Supplementary Information

Names and details of those who receive, in aggregate, consolidated remuneration of one hundred million Japanese yen or more will be disclosed on an individual basis in annual securities reports.

Annual securities reports are made available for public inspection on TMC’s Internet website.

Information regarding guidelines for the amount and calculation method of remuneration

Based on the resolution of the 121st Ordinary General Shareholders’ Meeting held on June 12, 2025 concerning remuneration for the Members of the Board of Directors of TMC, the maximum cash compensation was set at 3.0 billion yen per year (of which, the maximum amount payable to Outside Members of the Board of Directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year. The number of Members of the Board of Directors as of the conclusion of the 121st Ordinary General Shareholders’ Meeting was six (including two Outside Members of the Board of Directors).

In addition, the amount of remuneration for Members of the Board of Directors who are Audit and Supervisory Committee Members was set at 0.36 billion yen or less per month, pursuant to the resolution of the 121st Ordinary General Shareholders’ Meeting, held on June 12, 2025. The number of Members of the Board of Directors who are Audit and Supervisory Committee Members as of the conclusion of the 121st Ordinary General Shareholders’ Meeting was four (including three Outside Members of the Board of Directors). Specific details such as the amount of compensation to be paid to Members of the Board of Directors who are Audit and Supervisory Committee Members and the timing of payment will be determined upon consultation among Members of the Board of Directors who are Audit and Supervisory Committee Members.

For basic policy on remuneration, please refer to “TMC’s Basic Policy on Corporate Governance and Capital Structure, Business Attributes and Other Basic Information/1. Basic Policy/Disclosure based on each principle of Corporate Governance Code.”

[Support System for Outside Members of the Board of Directors]

Members of the Board of Directors and others disclose adequate information to Outside Members of the Board of Directors, such as by giving prior explanations on agenda items to be proposed to the Board of Directors. In addition, the Audit and Supervisory Committee Office has been established as a specialized independent organization to assist the Audit and Supervisory Committee Members.

2. Matters pertaining to functions relating to the execution of duties, audit and supervision, appointment and decisions regarding remuneration, etc. (Outline of the current corporate governance system)

[System regarding Members of the Board of Directors]

With respect to the system regarding Members of the Board of Directors, TMC has comprehensively considered with the aim to satisfy its responsibilities in achieving sustainable growth and medium- to long-term enhancement of corporate value. 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” based on the Toyota Philosophy. Moreover, these individuals should be able to play a significant role in transforming TMC into a mobility company based on trust and friendship and internal two-way interactive teamwork, while working towards solutions of environmental issues, including climate change, as well as social challenges related to TMC and its value chain. Members of TMC’s “Executive Appointment Meeting,” a majority of which are Outside Directors, discuss recommendations to the Board of Directors concerning appointment/dismissal of Members of the Board of Directors.

Furthermore, five Outside Members of the Board of Directors have been appointed in order to adequately reflect the opinions of those from outside the company in management’s decision-making process, and all of them are registered as independent officer with the relevant financial instruments exchanges in accordance with requirements for Outside Members of the Board of Directors set forth in the Companies Act and independence standards established by the relevant financial instruments exchanges. To ensure our Outside Members of the Board of Directors participate in decision-making from an independent standpoint and reflect the opinions of more diverse stakeholders in management, TMC has defined and disclosed the unique roles of and expectations for TMC’s Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members and the Independence Assessment Criteria. TMC’s Outside Members of the Board of Directors advise it in its management decision-making process based on their broad experiences and insight in their respective fields of expertise, independently from management structure.

The Board of Directors met 16 times in total in fiscal 2025. The Board of Directors actively deliberates a wide range of agenda items related to business strategies in addition to ordinary agenda items such as financial results and personnel.

[Execution of operations and supervision]

Together with the business units (in-house companies and Business Planning & Operation Units), operating officers, mainly consisting of the president, vice presidents and chief officers, to whom authority is delegated by the Board of Directors, will realize prompt decision-making through meetings among operating officers and move forward with initiatives toward sustainable growth and medium- to long-term improvement of corporate value. The “Sustainability Meetings,” in which Outside Members of the Board of Directors also participate, contributes to the enhancement of corporate value through deliberating, making decisions, and promoting activities with respect to important sustainability-related issues.

In addition, TMC deliberates on and monitors management and corporate activities based on views of various stakeholders through bodies for deliberations, including the “Product and Design Decision Meeting,” which grants company approval for commercialization of products, the “Governance Risk Compliance Meeting,” which was newly established to enhance governance and management foundations in response to the certification issues found at TMC and its group companies and subsidiaries, and the “Labor-Management Council, the Joint Labor-Management Round Table Conference.”

To enhance the system for internal audits, an independent and dedicated organization under the direct control of management (Internal Audit Department staffed with 39 members) has been established, which reports TMC’s internal audit policies and audit results for each fiscal year to the Board of Directors and makes regular reports on internal business audits to the President and the Audit & Supervisory Committee. The Internal Audit Department evaluates the effectiveness of the system to secure the appropriateness of documents regarding financial calculation and other information in accordance with Section 404 of the U.S. Sarbanes Oxley Act and Article 24-4-4 (1) of the Financial Instruments and Exchange Law of Japan.

In order to enhance the reliability of the financial reporting of TMC, the three auditing functions — audit by Audit and Supervisory Committee, internal audit, and accounting audit by Independent External Auditors — aid in conducting an effective and efficient audit through meetings held periodically and as necessary to share information and come to understandings through discussion on audit plans and results.

[System regarding auditing]

The status of auditing is as follows.

Name of auditor: PricewaterhouseCoopers Japan LLC

Duration of auditing service: From 2006

Also note that the auditors after the merger with Toyota Motor Sales Company in July 1982 were as follows.

Ito Accounting & Consultancy Office: until fiscal year ended March 2000

ChuoAoyama PricewaterhouseCoopers: from fiscal year ended March 2001 until fiscal year ended March 2006

Certified public accountants who provided auditing service

Hitoshi Kiuchi

Koji Sugimoto

Naoko Mori

Shuichi Hiraiwa

Composition of assistants relating to auditing

Certified public accountants: 54

Persons who passed the accountant exam etc.: 40

Others: 74

[Audit and Supervisory Committee]

TMC has transitioned from a Company with Audit and Supervisory Board to a Company with Audit and Supervisory Committee following approval at the 121st Annual General Meeting of Shareholders held on June 12, 2025. The Audit and Supervisory Committee consists of four Members of the Board of Directors who are Audit and Supervisory Committee Members (including three Outside Members of the Board of Directors). In order to appropriately conduct audits at TMC, which aims to achieve sustainable global growth into the future through its transformation into a mobility company, Audit and Supervisory Committee Members not only audit the execution of duties by Members of the Board of Directors but also participate in discussions at Board of Directors meetings as voting members and oversee the appropriateness of business execution. The Audit and Supervisory Committee will continue to conduct on-site audits and will further enhance organizational audits through close coordination, including receiving reports from the Internal Audit Department, an independent and dedicated organization under the direct control of the management consisting of 39 members, on audit plans and results, as well as providing instructions to the Internal Audit Department. TMC believes that it is essential to appoint individuals who can conduct audits of management from a fair and neutral standpoint, drawing on their wealth of experience and a high level of expertise, in addition to playing roles as Members of the Board of Directors. TMC’s Executive Appointment Meeting, a majority of the members of which are Outside Members of the Board of Directors, formulates recommendations to the Audit and Supervisory Committee regarding the candidates for Members of the Board of Directors who are Audit and Supervisory Committee Members.

TMC has appointed three Outside Members of the Board and registered all of them as independent officers with the Tokyo Stock Exchange in accordance with requirements for Outside Members of the Board of Directors who are Audit and Supervisory Committee Members set forth in the Companies Act and the “Roles of and Expectations for Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members” and the “Independence Assessment Criteria”, which we formulated in accordance with the independence standards established by the relevant financial instruments exchanges. In appointing Outside Members of the Board of Directors who are Audit and Supervisory Committee Members, TMC uses its own definitions of the unique roles of and expectations for its Outside Members of the Board of Directors and Outside Members of the Board of Directors who are Audit and Supervisory Committee Members as well as the Independence Assessment Criteria to appoint individuals who can fulfill and satisfies those.

[Limited liability agreements]

TMC has entered into limited liability agreements with Non-executive Directors pursuant to Article 427, Paragraph 1 of the Companies Act to limit the amount of their liabilities stipulated in Article 423, Paragraph 1 of the Companies Act to the amount stipulated in Article 425, Paragraph 1 of the Companies Act.

TMC believes it is important to put in place a system that enables customer opinions and on-site information to be swiftly communicated to management in order to realize timely and accurate management decision-making, and enables it to review whether such management decisions are accepted by its customers and society. TMC has transitioned from a Company with Audit & Supervisory Board to a Company with Audit and Supervisory Committee following approval at the 121st Annual General Meeting of Shareholders held on June 12, 2025. With this transition, we will work to further invigorate the Board of Directors by enabling all members, both internal and external, to engage in discussions without being constrained by their positions, while also advancing the swift decision-making process through the delegation of authority to the executive management and strengthening the Board’s monitoring functions.

III. Implementation of measures for shareholders and other stakeholders

IV.  Matters Concerning the Internal Control System

Basic understanding of system to ensure appropriateness of business operations

Based on the “Toyota Philosophy,” “Guiding Principles at Toyota,” “Toyota Code of Conduct,” “Toyota Way 2020,” and “Toyota Group Vision,” TMC ensures that each of the employees who work at TMC and its subsidiaries correctly understands and put into practice this philosophy and vision. TMC also develops such human resources.

TMC will work to create an open workplace culture where we align with the genba (frontlines) and we can approach and talk to each other.

Based on the concept of the Toyota Production System (TPS), Toyota will build a system to “detect abnormalities and halt the pipeline so that we can make improvements” and continue to put this into practice to ensure the appropriateness of the business operations.

System to ensure the appropriateness of business operations and outline of implementation status of such systems

TMC has endeavored to establish a system for ensuring the appropriateness of business operations as a corporate group and the proper implementation of that system in accordance with the “Basic Policies on Establishing Internal Controls.” Each business year, TMC inspects the establishment and implementation of internal controls to confirm that the organizational units responsible for implementing internal controls are functioning autonomously and are enhancing internal controls as necessary, and findings from the inspection are reviewed at Governance Risk Compliance Meetings (GRC Meeting) and the Board of Directors’ meetings.

[System]

1) TMC will make decisions regarding business operations after comprehensive discussions at the Board of Directors’ meeting and other meetings of various cross-sectional decision-making bodies. Matters to be decided are properly submitted and discussed at the meetings of those decision-making bodies in accordance with the relevant rules.

2) TMC will appropriately discuss significant matters and measures relating to issues such as corporate ethics, compliance and risk management at the GRC Meetings or the Board of Directors’ meetings, etc.

3) TMC will ensure that Members of the Board of Directors act in compliance with relevant laws and regulations and the Articles of Incorporation, based on the Code of Ethics and other explanatory documents that include necessary legal information, presented on occasions such as explanation to members of the Board of Directors when they assume office.

[Implementation status]

1) In executing business operations, matters to be discussed are properly presented to the Board of Directors and cross-sectional decision-making bodies in accordance with regulations that identify the matters to be discussed with decision-making bodies. Matters are then comprehensively examined before decisions are made. The following matters require a resolution of the Board of Directors: (1) matters stipulated in the Companies Act and other laws and ordinances, (2) matters stipulated in the Articles of Incorporation, (3) matters delegated for resolution at the General Shareholders’ Meeting, and (4) other material business matters. The following matters are required to be reported to the Board of Directors: (1) status of execution of business operations and other matters stipulated in the Companies Act and other laws and ordinances and (2) other matters deemed necessary by the Board of Directors.

2) With the aim of establishing a governance structure that can deliver sustainable growth over the medium- to long-term in accordance with the “Toyota Philosophy,” “Guiding Principles at Toyota,” “Toyota Code of Conduct,” etc., TMC deliberates on important topics pertaining to sustainability, corporate ethics, compliance and risk management as well as responses thereto at GRC Meetings or the Board of Directors’ meetings, etc.

3) TMC has stipulated the fundamental provisions to be observed by Members of the Board of Directors and other executives in the “Guiding Principles at Toyota,” the “Toyota Code of Conduct,” the “Code of Ethics,” etc., and all executives have been familiarized with these provisions. The relevant laws and regulations and the Articles of Incorporation that executives are to observe are listed in manuals to make all executives familiarized with those laws, regulations and rules and we conduct compliance education for newly appointed executives.

[System]

Information relating to exercising duties by Members of the Board of Directors shall be appropriately retained and managed by each division in charge pursuant to laws and regulations and the relevant internal rules.

[Implementation status]

In accordance with the relevant internal rules as well as laws and regulations, all organizational units are required to properly retain and manage materials used by decision-making bodies, minutes of meetings, and other information needed for the execution of duties by Members of the Board of Directors. TMC has established global systems and mechanisms for addressing full range of information security issues, including the management of confidential information, and regularly conducts inspections of progress being made in this regard by TMC and its subsidiaries.

[System]

1) TMC will properly manage the capital fund through its budgeting system and other forms of control, conduct business operations, and manage the budget, based on the authorities and responsibilities in accordance with the “Ringi” system (effective consensus-building and approval system) and other systems. Significant matters will be properly submitted and discussed at the Board of Directors’ meeting and other meetings of various bodies in accordance with the standards stipulated in the relevant rules.

2) TMC will ensure accurate financial reporting by issuing documentation on the financial flow and the control system, etc., and by properly and promptly disclosing information through the Disclosure Committee. TMC will also disclose non-financial information in a timely and appropriate manner.

3) In addition to establishing basic rules for risk management, TMC will appoint a person responsible for risk management, identify material risks related to our business activities, and implement countermeasures against such risks in cooperation with each region or subsidiary.

4) As a precaution against events such as natural disasters, TMC will prepare manuals, conduct emergency drills, arrange risk diversification and insurance, etc. as needed.

[Implementation status]

1) Budget is allocated to each supervisory unit assigned to administer each expense item, general expenses, research and development expenses, capital expenditures, etc. and is managed in accordance with the earnings plan. Significant matters are properly submitted for discussion in accordance with standards in the rules stipulating the matters to be discussed at the Board of Directors and other decision-making bodies.

2) To ensure accurate financial reporting, commentaries are prepared on financial information collected to prepare consolidated financial reports, and these are distributed to subsidiaries as necessary. To ensure the timely and proper disclosure of information, information is collected through the Disclosure Committee, where decisions on the need for disclosure are made.

Processes of TMC and its key subsidiaries are being documented as required by law, and the effectiveness of internal control systems with respect to financial reporting is evaluated. The effectiveness of the disclosure process is also evaluated.

3) Toyota has appointed a Chief Risk Officer (“CRO”) charged with global risk management. The CRO is working to prevent and mitigate the impact of risks that could arise in Toyota’s global business activities. Beneath the CRO are regional CROs appointed to handle risk management in specific regions. At head office departments (such as Accounting and Purchasing), risk management by function is assigned to chief officers and risk managers of individual divisions, while at in-house companies, risk management by product is assigned to the company presidents and risk managers of individual divisions. This structure enables coordination and cooperation between the regional head offices and sections. In the area of quality, the Global-CQO (Chief Quality Officer) is in charge of each Regional-CQO, and is promoting the improvement of products and services sincerely reflecting customer feedback, as well as the manufacturing that is in compliance with laws and regulations, across the entire company globally. TMC is also monitoring market developments and establishes and enhances management structure that responds to quality risks.

4) To prepare against disaster, Group/Region and all divisions have formulated business continuity plans (BCPs) for resuming production and restoring systems, among others, and they are continuing to improve these BCPs by conducting regular training (initial responses and restoration efforts) each year. TMC has also adopted a three-pronged approach to business continuity management (BCM) entailing concerted efforts by employees and their families, Toyota Group companies and their suppliers, and TMC.

[System]

1) Members of the Board of Directors will promptly determine the management policies based on precise on-the-spot information and, in accordance with Toyota’s advantageous “field-oriented” approach, appoint and delegate a high level of authority to officers who take responsibility for business operations in each in-house company, region, function, and process. The responsible officers will proactively compose relevant business plans under their leadership and execute them in a swift and timely manner in order to carry out Toyota’s management policies. Members of the Board of Directors will supervise the execution of duties by the responsible officers.

2) TMC, from time to time, will listen attentively to the opinions of various experts and stakeholders and reflect those opinions in TMC’s management and corporate activities.

[Implementation status]

1) TMC has established product-based in-house companies, and adopted a field-oriented Group-wide organization in which each region, function and process is regarded as a “Group/Region” within which the “in-house companies” and individual divisions of the Group/Region play key roles in executing operations. The Board of Directors makes decisions efficiently by appropriately receiving updates on the company’s situation that are in line with the field from the president and chief officers who are also Operating Officers. The in-house company presidents and responsible officers responsible for business execution are independently formulating and implementing policies for each organizational unit, and chief officers and higher management are supervising these efforts.

2) TMC has created opportunities to hear opinions from various stakeholders such as external experts in each region to obtain advice and information from an outside perspective, and utilizes them in the consideration of approaches to management and corporate activities.

[System]

1) TMC will clarify the responsibilities of each organization unit and maintain a basis to ensure continuous improvements in the system.

2) TMC has appointed a person in charge of compliance and will continuously review the compliance framework to ensure effectiveness. For this purpose, each organization unit shall confirm the effectiveness by conducting self-checks, among others, and report the result to Board of Directors and other meetings.

3) TMC will promptly obtain information regarding legal compliance and corporate ethics and respond to problems and questions related to compliance through its hotline called “Toyota Speak Up Line” that TMC established, as well as through other channels.

[Implementation status]

1) TMC has worked to “visualize” operations and improve the transparency of responsibility authority by clarifying the responsibilities of each organizational unit and making it available to all employees on the internal site. TMC is also providing training in education programs for new recruits as well as in personnel-grade-specific education programs to foster a corporate culture of “watching things closely,” identifying problems, and “continuing to improve.”

2) TMC has appointed a Chief Compliance Officer as a compliance supervisor. TMC has been providing education to a wide range of employees including newly hired employees to ensure that all employees acquire basic knowledge about compliance so as to improve compliance awareness throughout the Company.

A specialized department inspects the compliance status of each organizational unit and reports the outcome of these inspections to the Board of Directors or other meetings.

3) TMC has established a hotline called “Toyota Speak Up Line” and other internal reporting channels to enable employees to consult with outside attorneys or the relevant internal persons in charge about problems and questions concerning compliance. TMC conducts investigations of the facts and takes necessary measures once informed of an issue. The details of these consultations and outcomes of the measures subsequently taken are reported to the relevant executives at TMC.

[System]

TMC shares its Vision and Philosophy with its subsidiaries to develop and maintain a sound environment of internal controls for the business group.

In addition, TMC will manage its subsidiaries in a comprehensive manner appropriate to their positioning by clarifying the roles of the division responsible for the subsidiaries’ financing and management and the roles of the division responsible for the subsidiaries’ business activities. Those divisions will confirm the legality and appropriateness of the operations of the subsidiaries by exchanging information with those subsidiaries, periodically and as needed.

i. System concerning a report to the corporation on matters relating to the execution of the duties of Members of the Board of Directors, etc. of subsidiaries

TMC will require prior consent of TMC or a report to TMC on important managerial matters of subsidiaries based on the internal rules agreed between TMC and its subsidiaries. The important managerial matters of subsidiaries will be discussed at TMC’s Board of Directors’ meeting and other meetings in accordance with the standards stipulated in the relevant rules relating to submission of matters to such meetings.

ii. Rules and systems related to the management of risk of loss at subsidiaries

TMC will require its subsidiaries to establish a system to implement initiatives related to the management of risk, such as finance, safety, quality, environment, and natural disasters, and require them to promptly report to TMC on significant risks. TMC will discuss significant matters and measures at the GRC Meetings or the Board of Directors’ meeting, etc. in accordance with the standards stipulated in the relevant rules relating to submission of matters to such meetings.

iii. System to ensure that Members of the Board of Directors, etc. of subsidiaries exercise their duties efficiently

TMC will require Members of the Board of Directors of its subsidiaries to promptly determine the management policies based on precise on-the-ground information, determine responsibilities, implement appropriate delegation of authority based on the responsibilities, and efficiently conduct business.

iv. System to ensure that Members of the Board of Directors, etc. and employees of subsidiaries conduct business in compliance with relevant laws and regulations and the Articles of Incorporation

TMC will require its subsidiaries to establish a system concerning compliance. TMC will periodically confirm its status and report the result to Board of Directors and other meetings.

TMC will promptly obtain information regarding legal compliance and corporate ethics of its subsidiaries and respond to problems and questions related to compliance of its subsidiaries through the whistleblower offices established by its subsidiaries and through the whistleblower office, that TMC has established the company and cover its subsidiaries and other channels.

[Implementation status]

TMC has extended its Vision and Philosophy to its subsidiaries and direct them to ensure that they are suitably incorporated into their own Vision and Philosophy, code of conduct and other principles.

TMC clarified roles and tasks relating to subsidiary management and each department is managing the subsidiaries in a comprehensive manner appropriate to their positioning. Furthermore, each fiscal year TMC conducts inspections of subsidiary management by each department, the results of which are confirmed at the Board of Directors’ meetings, etc.

i. TMC is providing direction to ensure that on important managerial matters at its subsidiaries, prior consent is sought from TMC or reports are submitted to TMC in accordance with internal rules agreed upon between TMC and its subsidiaries. Of such important managerial matters, those that have implications for Group operations are discussed at TMC’s Board of Directors’ meetings in accordance with TMC’s standards stipulating matters to be discussed at the Board of Directors.

ii. TMC is requiring its subsidiaries to establish a system to implement initiatives related to the management of risk, such as finance, safety, quality, environment, and natural disasters, and require them to promptly report to TMC on significant risks through regular communication with the subsidiaries. Significant matters and measures related thereto are discussed at the GRC Meetings or the Board of Directors’ meetings, etc. in accordance with the standards relating to submission of matters.

iii. TMC confirms that the organizational structure is reviewed at its subsidiaries to ensure efficient execution of operations, that responsibilities are being determined appropriately, and that authority is being appropriately delegated, and requires improvements to be made as necessary.

iv. TMC inspects each subsidiary’s compliance systems to ensure they are adequate and reports the outcomes of these activities to TMC’s Board of Directors or other meetings. TMC has extended to its subsidiaries the financial compliance rules that should be instituted at the subsidiaries. TMC also provides subsidiaries with direction on carrying out regular voluntary inspections to ensure that these rules are permeated into the day-to-day operations of its subsidiaries.

In addition, to ensure that the duties performed by directors, etc. of subsidiaries are in compliance with laws and regulations, TMC is working to raise awareness among those directors, etc. of the laws and regulations that they need to comply with, key points for ensuring such compliance, and so on.

TMC is made aware of problems and questions related to compliance at its subsidiaries through the whistleblower offices established by its subsidiaries and through the whistleblower office that TMC has established the company to cover its subsidiaries. Factual investigations are conducted by subsidiaries and relevant divisions of TMC, and necessary measures, including corrective measures and reporting to relevant executives, are taken.

[System]

1. TMC has established the Audit and Supervisory Committee Office and has assigned full-time staff to support this function. The said employees must follow the directions and orders from the Audit and Supervisory Committee Members, and any changes in its personnel will require prior consent of the Audit and Supervisory Committee or an Audit and Supervisory Committee Member selected by the Audit and Supervisory Committee. Regarding the expenses necessary for the Audit and Supervisory Committee and its members to execute their duties, TMC will take appropriate budgetary steps and also pay for expenses that become necessary as a result of circumstances that were not expected at the time of the taking of budgetary steps.

2. Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members) and employees will report on the execution of their duties to the Audit and Supervisory Committee upon its request periodically and as needed. They will also immediately report to Audit and Supervisory Committee any fact discovered that may cause significant damage to TMC or its subsidiaries. Members of the Board of Directors, etc. of subsidiaries will report any necessary matter to the Audit and Supervisory Committee as needed. Material matters that have been reported to the internal reporting hotline established by TMC or its subsidiaries or a similar channel will also be reported to the Audit and Supervisory Committee. TMC maintains internal rules stipulating that a person who has made a report to the Audit and Supervisory Committee will not be subject to disadvantageous treatment for having made such a report.

3. TMC will ensure that Audit and Supervisory Committee Members attend meetings of its major decision-making bodies, inspect important Company documents, and have opportunities to exchange information with the Accounting Auditor and the Internal Audit Department periodically and as needed, as well as directly appoint any necessary external experts.

[Implementation status]

1. TMC has established the Audit and Supervisory Committee Office and has assigned full-time staff to support this function. Prior consent of an Audit and Supervisory Committee Member selected by the Audit and Supervisory Committee is obtained for organizational changes to and personnel of the Audit and Supervisory Committee Office. TMC has taken budgetary steps at the beginning of the fiscal year as part of ordinary corporate procedures for expenses deemed necessary by the Audit and Supervisory Committee and its members for them to execute their duties. TMC also pays for expenses that become necessary as a result of circumstances that were not expected when the budgetary steps were taken.

2. Members of the Board of Directors (excluding Members of the Board of Directors who are Audit and Supervisory Committee Members), employees and subsidiaries of TMC report to the Audit and Supervisory Committee Members on the status of business execution as appropriate from time to time. When they discover a fact that may cause significant damage to the Company or its subsidiaries, they immediately report such fact to the Audit and Supervisory Committee. They also report to the Audit and Supervisory Committee on the status of consultations received at the Speak-up Hotline, the external consultation hotline for Japanese subsidiaries established by TMC, and the internal reporting hotlines established by the subsidiaries. TMC promotes awareness among employees by stipulating in the internal reporting rules that a person who has made a report to the Audit and Supervisory Committee will not be subject to disadvantageous treatment for having made such a report.

3. In addition to establishing a system whereby Audit and Supervisory Committee Members can attend meetings of executive bodies that deliberate and decide on important projects, TMC ensures that important Company documents requested by the Audit and Supervisory Committee are made available to them. TMC also arranges for opportunities for the Audit and Supervisory Committee to receive reports from the Accounting Auditor and the Internal Auditing Department at Audit and Supervisory Committee meetings and other meetings convened as necessary.

TMC has established the “Basic Policy Against Antisocial Forces” and has a basic policy to not have any relationship with antisocial forces. TMC will take resolute action as an organization against any undue claims and actions by antisocial forces or groups, and has drawn the attention of such policy to its employees.

1) Establishment of Divisions Overseeing Measures Against Antisocial Forces and Posts in Charge of Preventing Undue Claims

TMC established divisions that oversee measures against antisocial forces (“Divisions Overseeing Measures Against Antisocial Forces”) in its major offices as well as assigned persons in charge of preventing undue claims. TMC also established a system whereby undue claims, organized violence and criminal activities conducted by antisocial forces are immediately reported to and consulted with Divisions Overseeing Measures Against Antisocial Forces.

2) Liaising with Specialist Organizations

TMC has been strengthening its liaison with specialist organizations by joining liaison committees organized by specialists such as the police. It has also been receiving guidance on measures to be taken against antisocial forces from such committees.

3) Collecting and Managing Information concerning Antisocial Forces

By liaising with experts and the police, Divisions Overseeing Measures Against Antisocial Forces share up-to-date information on antisocial forces and utilize such information to call TMC’s employees’ attention to antisocial forces.

4) Preparation of Manuals

TMC compiles cases concerning measures against antisocial forces and distributes them to each department within TMC.

5) Training Activities

TMC promotes training activities to prevent damages caused by antisocial forces by sharing information on antisocial forces within the company as well as holding lectures at TMC and its group companies.

V. Others

Matters regarding responses to a takeover bid   None

Supplementary Information

There are no plans to introduce any particular takeover defense measures.

Outline of the Timely Disclosure System

The following describes TMC’s company structure and procedures regarding the timely disclosure of Company information.

(Guiding Principles)

TMC practices its guiding principle of disclosing operating results, financial condition and non-financial information in a timely and appropriate manner. Such guiding principles are set forth in the Sustainability Fundamental Policy “Contribution towards Sustainable Development.”

(Disclosure Committee and its Purpose)

TMC has established a Disclosure Committee that is chaired by the chief officer of the Accounting Group in an effort to ensure that the information disclosed is accurate, fair and timely.

The Disclosure Committee meets periodically to draft, report and assess annual and quarterly reports prepared pursuant to the Japanese Financial Instruments and Exchange Act, and annual reports prepared pursuant to the U.S. Securities Exchange Act of 1934, as amended. The Disclosure Committee also holds meetings on an ad hoc basis as necessary.

(Procedures of the Disclosure Committee)

The Disclosure Committee performs the following procedures:

Collect information of TMC and its subsidiaries that may be subject to disclosure based on the materiality standards set forth by the Disclosure Committee through periodic and timely communications with the heads of the relevant divisions responsible for information disclosure.

Assess disclosure of collected information based on applicable laws, regulations and guidelines, such as stock exchange rules, the Japanese Financial Instruments and Exchange Act, and the U.S. Securities Exchange Act.

Based on the assessment made above, disclose information in a timely manner. When necessary, a report to the Board of Directors, the company representative and certification procedures on the disclosure documents will precede the disclosure. The Audit and Supervisory Committee Members (or the Audit and Supervisory Committee) may receive reports from the Disclosure Committee as necessary and may provide opportunities for reporting and Q & A sessions with company representatives.

Make further efforts to enhance the company structure pertaining to timely and fair disclosure: the internal auditing division assesses the overall information disclosure process, and independent external auditors and outside legal counsel provide support in establishing disclosure controls and procedures, and offer guidance on the sufficiency and appropriateness of the disclosure information.

Details of the procedures and the organizational structure mentioned above are stipulated in the Company’s internal disclosure guidelines.

“Toyota Philosophy”

Business-strategy Reasons for Holding, and Shareholding Status of, Strategically-held Shares and the Breakdown by Issue

Specified investment shares

Notes:

Deemed shareholdings

Notes:

(4) Investment securities whose purpose of ownership was changed from pure investment to other than pure investment during the fiscal year ended March 2025

None

Changes in strategically-held shares

Method of Determining Performance-based Remuneration

TMC makes sure that short term incentive (“STI”) and long term incentive (“LTI”) account for around 20% and 50% of the Annual Total Remuneration, respectively, and performance-based remuneration, which is STI and LTI combined, account for around 70%. STI is provided in the form of cash compensation based on “consolidated operating income,” “fluctuation of TMC’s market capitalization*,” and “individual performance evaluation.” LTI is provided in the form of share compensation based on “multiple financial indicators,” “non-financial indicator,” and “individual performance evaluation.” In addition, there are cases where LTI may be paid in cash to retiring members of the Board of Directors (excluding outside members of the Board of Directors and members of the Board of Directors who are Audit and Supervisory Committee members) and members of the Board of Directors who do not reside in Japan (excluding outside members of the Board of Directors and members of the Board of Directors who are Audit and Supervisory Committee members).

< Composition of Compensation >

< Concept of Performance Evaluating Indicators >

< Method and Reference Value for Each Performance Evaluating Indicator and Evaluation Result >

< Concept of Individual Performance Evaluation >

For the determination of Annual Total Remuneration, the STI base amount and the LTI base amount are adjusted to reflect the performance evaluation results of financial and non-financial indicators, and are further adjusted based on individual performance evaluations. The evaluation takes into account various factors, such as initiatives (including the ESG perspective) based on the Toyota Philosophy and initiatives toward medium- to long-term corporate value enhancement, as well as trust from his or her peers and contribution to the promotion of human resources development. The range of adjustments based on individual performance evaluations is set within the range of 50% above or below the STI base amount and the LTI base amount, which reflect the performance evaluation results of financial and non-financial indicators, commensurate with position and job responsibilities. The amount of performance-based remuneration for each member of the Board of Directors is calculated based on evaluation results. Given the magnitude of roles and responsibilities the Chairman of the Board of Directors, the Vice Chairman of the Board of Directors, and the President and Member of the Board of Directors, we have determined that individual remuneration is to be adjusted solely based on company-wide performance evaluations, and thus have not conducted an individual performance evaluation for them.

Fixed remuneration and performance-based remuneration are set based on the remuneration levels and structures that allow TMC to secure and retain talented personnel. Annual Total Remuneration levels as well as the percentages of fixed remuneration and performance-based remuneration in total remuneration are set taking into account each member’s job responsibilities and the remuneration standards of the entity for which such member previously worked (application determined individually). Performance-based remuneration consists of STI and LTI as is the case with directors with Japanese citizenship (excluding Outside Members of the Board of Directors and members of the Board of Directors who are Audit and Supervisory Committee members). The amounts of STI and LTI change in the same manner by reflecting STI and LTI performance evaluating indicators set for directors with Japanese citizenship (excluding Outside Members of the Board of Directors and members of the Board of Directors who are Audit and Supervisory Committee members) and individual performance evaluation results. In addition, there are cases where we provide income tax compensation for certain members of the Board of Directors in light of the difference in income tax rates with those of their former affiliations.

TMC has introduced a clawback rule in November 2023. Under this rule, if TMC is required, in connection with financial reporting requirements under applicable laws and regulations, to restate its past financial statements, TMC will, subject to certain conditions, can mandatorily recover the resulting overpaid portion of performance-based remuneration from incumbent or retired members of the Board of Directors who received such remuneration. The clawback rule does not apply to members of the Board of Directors who retired from office before its introduction.

The compensation that is subject to clawback is the whole or part of performance-based remuneration, including share compensation, that has been paid based on financial statements before restatement, and the clawback applies to the three fiscal years ended immediately before the day on which the restatement of financial statements is required. The management and operation of this rule, including the identification of remuneration, periods, and individuals who are subject to clawback, are conducted by the Executive Compensation Meeting.

Cementing Our Work Foundation and Addressing Certification Issues

Group vision “Inventing our path forward, together”

The Group vision represents the direction the Toyota Group* should take and the vision and values to which all Toyota Group members can return.

“Inventing our path forward, together.”

Sakichi Toyoda, the founder of the Toyota Group, invented the Toyoda wooden hand loom with the desire to make life a little easier for his struggling mother. Kiichiro Toyoda invented the domestically produced passenger car with the idea that the automobile industry must be developed by the knowledge and skills of Japanese people. Thinking of others, learning, honing skills, making things, and bringing smiles to people’s faces—that passion and attitude toward invention are truly the starting point of the Toyota Group. In a time when there is no right answer, we will build a corporate culture in which we can say “thank you” to each other and aim to be a Toyota Group that is needed in the future, where diverse human resources can play an active role.

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Cementing our work foundation and addressing certification issues

[Work foundation]

In the past year, as the foothold for sustainable growth, we have made steady progress in creating an environment in which we can demonstrate the “competitiveness of a company with the capacity to produce over 10 million cars” and our “ability to take on various challenges,” in other words, initiatives to cement our “work foundation.”   We have been making Companywide efforts to create reserve capacity to develop human resources and ensure safety and quality. In particular, we have focused on improving the foundations of our production sites.
The environment surrounding manufacturing is becoming increasingly severe. Japan’s working-age population is expected to decline by 20% over the next 15 years. Buildings and facilities are aging, leading to more frequent impacts on operations. Based on our awareness of the issue that if we are unable to improve the productivity and comfort of our workplaces, we will risk losing the foundations of manufacturing, we have been working to improve plant environments through initiatives such as heat mitigation measures and create employee-friendly production lines that accommodate diverse individuals from all walks of life.   Furthermore, in moving forward into the future, we launched the “Factories for the Future” project, which seeks to transform manufacturing as we know it. We are committed to making more extensive efforts to improve productivity and job satisfaction envisioning 10 to 50 years into the future, such as substantially expanding automation and introducing diverse work-styles.   The development area is no exception, and we made efforts to improve the “competitiveness of a company with the capacity to produce over 10 million cars.” One example is the “AREA 35” project, which seeks to improve our accuracy in forecasting customer needs and optimize the types of specifications and parts we offer, while flexibly responding to the diverse range of customer needs by leveraging the strengths of our well-designed Toyota New Global Architecture (TNGA) platform. Through trial runs at 10 domestic plants, we have managed to generate a level of development efficiency equivalent to three vehicle model redesign projects. Going forward, we will expand our activities globally to further improve development and production efficiency.
In addition, we have also made progress on developing the foundations of future-oriented automobile manufacturing. For example, this includes establishing structures that link everything from development to sales through digital transformation (DX) to facilitate easy access to comprehensive information on the specification of vehicles, instead of having to contact each person in charge due to the current state of distributed core systems.

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