lixil group profile 2016–17 · 4 message from the president & ceo generating new value with a...

Daniele Domenicali

201617LIXIL GROUP PROFILE

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To be the worlds most valued, innovative and trusted living technology company

3Team members engaged in discussion during a planning session for the new SPAGE bathroom system

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Message from the President & CEO

Generating New Value with a Stronger,More Streamlined Structure

Over the past five years, LIXIL Group Corporation has accomplished significant transformation. Establishing a network that now stretches across more than 150 countries and regions, and cultivating a corporate culture that embraces and nurtures workplace diversity, the LIXIL Group has succeeded in becoming a truly global corporation.Pursuing further growth, the LIXIL Group is focused on maximizing its internal synergies while creating a structure that generates new value by quickly responding to shifting market needs.

Director, Representative Executive Officer, President & Chief Executive Officer, LIXIL Group Corporation

Kinya Seto

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The fiscal year ended March 2016 was another

period of significant change, including my own

entrance into the company. Ultimately, what I want to

achieve at LIXIL is simple: to create an environment

where our employees can enjoy their work and feel

proud of what we do as a company. This may sound

unusual coming from the CEO of a large profit-making

company. However, I truly believe that this is the

most important goal for any corporate leader, and

that if our employees can take great pride and feel

strongly motivated about their work, then other

benefits and gains will very quickly follow. Employees

who enjoy coming to work, and who experience a

culture of respect, trust and friendship within LIXIL,

will naturally be in a stronger position to contribute to

our customers, consumers, business partners and

the community.

The LIXIL Groups success or failure in the future will

depend on our ability to succeed as a manufacturer,

which is where our core competencies as a company

lie. We must clearly understand the needs of our

customers and consumers, and apply our expertise

and capabilities as a manufacturer to better serve

these needs. This starts in Japan, which remains our

largest and most important single market.

To better leverage LIXILs core strengths as a

manufacturer, we must bring a more consistent focus

throughout the full product life cycle, from research

and development to manufacturing and through

marketing and sales, while also incorporating feedback

from customers and consumers back into the R&D

process. To support these sales and marketing efforts,

and to drive more engagement with consumers, we

must also place a stronger emphasis on developing

LIXILs equity as a consumer and product brand,

rather than merely a business-to-business play

focused on distributors.

Growth in the Japanese home renovation market

remains unsatisfactory due to a lack of such initiatives

focusing on the consumer. This renovation market

holds great potential due to the rise in awareness

around energy efficiency in the home and a growing

preference for aging in place against the

background of a graying society. In the fiscal year

ended March 2016, domestic sales of LIXILs

renovation products rose 9% year-on-year to reach

JPY304.3 billion. However, even greater opportunities

exist if we can stimulate growth of the overall market.

Between April and July 2016, we held the LIXIL

Renovation Fair 2016 in six locations throughout the

country, including Tokyo, Osaka and Nagoya. These

large-scale events enabled us to demonstrate

installation work along with the latest products.

Heightened consumer interest in renovation was

evident, with participant numbers exceeding

expectations at every venue.

LIXIL has also expanded its range of One Day

Reform products, which drastically reduce installation

times. The extensive renovation lineup now includes

entrance doors, windows and other products that can

be easily installed in a single day. We believe this

reduction in installation time will become a major

driving force in stimulating market growth.

Over the past several years, the LIXIL Group has

sought growth through M&A; the next step is to focus

on integrating the Groups new additions, improve

governance and maximize synergies.

Specifically, we will seek to utilize our existing

business assets to enhance value, both in Japan and

Creating an environment that instills pride in employees

Utilizing manufacturing expertise and product development capabilities

Generating greater value through an enhanced structure

Our Chubu region flagship showroom, LIXIL Showroom Nagoya, opened in April 2016, offering customers comprehensive and friendly renovation advice

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across the world, leading to stable growth. We will also

generate significant added value by constructing

globally unified, efficient manufacturing systems and

supply chains, and strengthening integration across

areas such as technology, R&D and marketing.

One example of these initiatives is the utilization

of know-how cultivated by LIXIL in the Japanese

market to build a stable supply chain to support

expanded sales of GROHE brand sanitary ware

products in Europe for the fiscal year ending March

2017. By combining LIXILs advanced technology and

GROHEs expertise in the European market, we were

able to develop the GROHE Sensia Arena, a shower

toilet that is tailored to European specifications.

Moving forward, we will increase the pace of global

sanitary ware sales expansion, predominantly in the

major markets of Europe and North America under

GROHE and American Standard Brands, utilizing

LIXILs unique Triple Vortex and Aqua Ceramic

technologies and spa-toilet range.

As we shift to a new stage of the LIXIL Groups

evolution, an immediate goaland one we are already

implementingis to improve management efficiency.

This in turn will create a platform for us to similarly

improve operational efficiencies across the LIXIL Group.

By taking the types of measures that I have

mentioned to create a simpler and more nimble

organization, we are ensuring that the LIXIL Group is

in a better position to respond quickly to consumer

needs and emerging opportunities. At the same time,

we are creating an organization that enables improved

management oversight, compliance and governance

and thus is equipped to meet todays complex global

regulatory and market environment. It is a LIXIL that is

positioned to deliver value.

Toward a stronger, more streamlined structure

The GROHE Sensia Arena, a shower toilet designed to European specifications utilizing LIXILs Japanese market know-how

Legaris, the worlds first high-performance five-layer glass window, brings together LIXILs manufacturing techniques to achieve wall-like thermal insulation without sacrificing clarity

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LIXIL CORE (Corporate Philosophy)The Groups superior products and services contribute to improving

peoples comfort and lifestyles.

Corporate Culture of LIXILLIXIL Diversity Declaration

The corporate culture of LIXIL is marked by a commitment to become a company that utilizes energy and innovation generated by diversity for its businesses. We also aim to create an environment where people are always

looking forward and will achieve better results by continuously clearing self-imposed hurdles.

Our ValuesLIXIL is united by a set of shared values:

Work with RespectAs a global company, we strive for open and honest communication with everyone, internally and externally.We value diversity and respect people from different backgrounds and treat everyone equally with meritocracy.We always act with unquestioned integrity.

Deliver on CommitmentWe act like owners to create value for everyone that touches our business.We set ambitious targets, which we are committed to achieving.We are accountable for decisions, actions and results.

Embrace QualityWe are committed to having our customers enjoy a positive experience in every aspect when interacting with us.We are committed to the highest quality products and solutions.We take a Kaizen approach to continuously improving our knowledge, products and processes.

Inspire PassionWe dare to dream big and seek to transform ourselves, our industry and customers experiences.We push ourselves to stretch beyond our commitments to exceed expectations.We pursue excellence in everything we do and reward a Can-do attitude.

Pursue GrowthWe strive for growth and innovation.We consistently invest in the growth of our leaders and their teams.We are willing to embrace change and risk with speed in a thoughtful, informed and appropriate way.

1Respect DiversityWe will welcome differences among genders, ages, races, cultures, nationalities, beliefs, and backgrounds. Energy and creativity generated by open and passionate discussion can be used as a source of competitiveness.

2Provide Equal OpportunityWe will provide equal opportunities and occasions to anyone that tries to demonstrate a positive and proactive attitude, regardless of background.

3Implement MeritocracyWe will fairly evaluate how much one puts LIXIL VALUES into practice and how much one performs.

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Businesses and Principal Group Companies of the LIXIL Group

Holding Company

LIXIL Group Corporation

Business Area

Building Materials and Housing Equipment Business

Water TechnologyBathroom and kitchen fixtures Sanitary ware, spa-toilets, water faucets, washstands, bathtubs, unit bathrooms, kitchen systems, washstand fixtures, washstand cabinet units, decorative tiles, etc.

Building TechnologyMetal building materialsCurtain walls, building sashes, store facades

Kitchen TechnologyKitchenKitchen systems

Housing TechnologyMetal building materialsHousing window sashes, entrance doors, various types of shutters, gates, carports, banisters, high railings, tide barriers, smoke insulated screens, etc.

Wooden interior furnishing materialsWindow frames, wooden furnishing materials, interior decorative materials, etc.

Other building materialsSiding, stone materials, roofing materials, etc.

Interior fabrics Curtains, etc.

Other Solar photovoltaic systems

Distribution and Retail Business

Housing Services Business

Other Business

Home centersHousehold products, DIY products, building materials, etc.

Housing solution businessesDeveloping homebuilding franchise chains, construction on order, housing defect warranty liability insurance services, ground inspections and improvements, etc.

Real estateComprehensive real estate services (brokerage, management, etc.)Development of real estate franchises

Nursing home businessNursing homes

Financial services businessHousing loans

Services for Group companies

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The LIXIL Group is a corporate group consisting of LIXIL Group Corporation (pure holding company) and operating companies led by the holding company. The Group is involved in a broad spectrum of housing-related businesses ranging from the manufacture and sales of building materials and housing equipment to the operation of home centers and a network of homebuilding franchises, in addition to offering comprehensive real estate services.

LIXIL Corporation

LIXIL VIVA CORPORATION

LIXIL Living Solution Corporation

JIO Corporation

LIXIL Group Finance Corporation

Operating Company

LIXIL WATER TECHNOLOGYDinaone CorporationJAXSON CORPGROHE Group S. r.l. (Luxembourg)American Standard Brands (USA)A-S China Plumbing Products Ltd. (China)LIXIL Vietnam Corporation (Vietnam)LIXIL BUILDING MATERIALS MANUFACTURING (Suzhou) CORPORATION (China)LIXIL Sanitary Fitting Manufacturing (Suzhou) Corporation (China)

LIXIL HOUSING TECHNOLOGYKawashima Selkon Textiles Co., Ltd.Asahi Tostem Exterior Building Materials Co., Ltd.LIXIL ENERGY Co., Ltd.LIXIL INTERNATIONAL Pte. Ltd. (Singapore)TOSTEM THAI Co., Ltd. (Thailand)LIXIL Manufacturing (Dalian) Corporation (China)LIXIL GLOBAL MANUFACTURING VIETNAM Co., Ltd. (Vietnam)LG-TOSTEM BM Co., Ltd. (South Korea)

LIXIL JAPAN COMPANYLIXIL Total Service CorporationLIXIL Total Hanbai CorporationG TERIOR CorporationLIXIL RENEWAL CorporationLIXIL SUZUKI SHUTTER CORPORATIONLIXIL Toyo Sash Shoji Co., Ltd.TM.S CorporationKuwata CorporationOita Tostem CorporationNishikyushu Tostem Corporation

LIXIL BUILDING TECHNOLOGYPERMASTEELISA GROUP (Italy)

LIXIL KITCHEN TECHNOLOGYLIXIL-Haier Housing Products (Qingdao) Co., Ltd. (China)

LIXIL Housing Research Institute, Ltd.Japan Home Shield CorporationLIXIL REALTY, Corp.

JHS Engineering CorporationLIXIL ERA Japan, Corp.

LIXIL Home Finance Corporation

*The total number of LIXIL Group companies: 324 (including the above, as of March 2016)

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GROHELIXIL WATER TECHNOLOGY

GROHEs stylish, high-quality productsLIXILs comprehensive range of living solutions

Established: October 2001

Business activities: Manufacture and sale of building materials

and housing equipment as well as

related services

Registered offi ce: 2-1-1 Ojima, Koto-ku, Tokyo 136-8535

Head offi ce: 36F, Kasumigaseki Building, 3-2-5 Kasumigaseki,

Chiyoda-ku, Tokyo 100-6036, Japan

Website: www.lixil.com

Established: 1948

Business activities: Manufacture, sale of bathroom and kitchen

fi ttings, shower heads and shower systems,

automatic fi ttings for the commercial and

public sectors, installation and fl ushing

systems and shower toilets, and ceramics

Address: Feldmhleplatz 15, 40545 Dsseldorf, Germany

Website: www.grohe.com/en/

LIXIL Corporation is a global leader in housing and building

materials products and services. The foundation of LIXILs

success is our constant investment in technological innovation

to improve the way we live. Delivering core strengths in water,

housing, building and kitchen technologies, our brands,

including LIXIL, GROHE, American Standard Brands and

Permasteelisa, are leaders in the industries and regions in

which they operate. LIXIL produces some of the worlds most

fundamental and innovative products and services, and our

solutions are an integral part of some of the worlds most

iconic and cutting-edge living and working spaces. Operating

in more than 150 countries, we bring together function,

quality and design to make peoples lives better and more

delightfulwherever they are.

The German-based GROHE is the worlds leading provider of

sanitary fi ttings. Promoting its strong engineering and quality

performance, refi ned and numerously awarded design

capabilities and strong sustainability efforts, GROHE has

expanded to over 150 countries, offering high-quality lineups

mainly to high-end luxury markets. All products are designed

and engineered to contribute to a perfect water experience

Pure Freude an Wasser. The GROHE product range

comprises everything from aesthetically appealing designer

faucets for bathrooms and kitchens to luxurious shower

systems equipped with ingeniously safe thermostats as well as

intelligent control shower toilet systems and smart installation

and fl ushing systems.

A global leader in the building materials and housing equipment industry, contributing to enhanced lifestyles

Leading the market for faucets and fi ttings all over the world

LIXIL Corporation

Major Subsidiaries

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American Standard BrandsLIXIL WATER TECHNOLOGY

ASBs broad range of kitchen/bathroom fi xtures marketed in North America

Established: 1872

Business activities: Manufacture and sale of, toilets, sinks, e-bidets,

integrated shower toilets, faucets, showers,

bathtubs, urinals and accessories

Main address: One Centennial Avenue, Piscataway, NJ 08854, USA

Website: www.americanstandard.com

American Standard Brands (ASB) is one of the largest primary

housing equipment bath and kitchen manufacturers in North

America, making and marketing kitchen and bathroom

products for residential and commercial use in the U.S.,

Canada and Mexico. The company has built a solid presence

particularly in the U.S. and Canada, where their sanitary wares

and plumbing fi xtures, faucets and accessories can be found

in approximately 65% of households. Operating for over 140

years, the company has expanded its business under multiple

brands, including American Standard and DXV, winning the

trust of a wide range of partners and consumers.

Joining the LIXIL Group in 2013, ASB has taken a new step to

offer greater customer value by integrating LIXILs proven

capabilities in quality assurance, manufacturing technology

and product development with its extensive sales networks.

Integrating ASBs strong brands and network with LIXILs technologies

Venezia Tessera Airport

Established: 1973

Business activities: Engineering, project management,

manufacture and installation of architectural

envelopes and interior systems

Main address: Viale E. Mattei, 21/23-31029 Vittorio Veneto,

Treviso, Italy

Website: www.permasteelisagroup.com

Permasteelisa Group is a worldwide leading contractor for

engineering, project management, manufacturing and

installation of architectural envelopes and interior systems.

The Groups mission is to create the worlds top-class

contemporary architectural works, using its strength in

designing and building innovative and avant-garde

structures and employing advanced technologies and

eco-sustainable solutions.

Originally incorporated in 1973 in Italy, during 80s and 90s

the Group started an international expansion in the Australian,

European, Asian and US markets.

In December 2011 Permasteelisa Group joined the LIXIL Group.

Providing outstanding solutions through the designing and building of architectural envelopes, interiors and complex forms

PERMASTEELISA GROUPLIXIL BUILDING TECHNOLOGY

Daniele Domenicali

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www.lixil.co.jp/corporate/csr/culture

Housing and building is an essential part of human culture. As a business operator in this sector, the LIXIL Group conducts a variety of living and lifestyle-themed cultural activities, contributing to local communities and wider society. Our efforts include preservation of local treasures and inventions, conservation of valuable cultural assets and support for education on this theme, as well as exhibition and publication activities aimed at promoting diverse or new aspects of living.

The LIXIL Groups Cultural Activities

LIXIL MuseumThe LIXIL Museum was established in 2012 to showcase the history of the LIXIL Group through an exploration of products and technologies that were developed by group companies. The museum consists of three sections: The Museum zone hosts permanent exhibitions, including image and video presentations, to introduce past activities such as each companys pioneering development efforts and brand stories along with the Groups history, as well as new exhibition events. The Library zone houses archive materials, LIXIL Publication works, and the latest housing-related publications. The museums newest addition is the Housing Safety zone, launched in 2013. It provides advice on the appropriate long-term use of LIXIL products, displaying examples of faulty work with the intention of preventing the potential for damage or harm. This project aims to enhance customer communication as well as facilitate deeper understanding and shared awareness within the Group.

Address: LIXIL WING Bld., 2-1-1 Ojima, Koto-ku, Tokyo 136-8535Website: www.lixil.co.jp/corporate/csr/culture/shiryokan.htm (Japanese only)

LIXIL Gallery, LIXIL Publication, LIXIL Book GallerySince its establishment in 1981 in Tokyos Ginza shopping district, the LIXIL Gallery has organized a number of serialized exhibitions. These include projects that explore architecture and related activities under themes selected to introduce new ideas and values associated with housing and lifestyle; the Future of Creation exhibition directed by architects and art directors; and pottery shows that focus on the relationships between art and life. In addition, the gallery embarked on publishing activities in 1986, focusing on architecture and related topics, including exhibition brochures and the works of contemporary young architects. As part of this initiative, the LIXIL Book Gallery was opened in 1988 as a specialized bookstore that offers a unique selection of titles on architecture and interior design.

Address: LIXIL:GINZA, 3-6-18 Kyobashi, Chuo-ku, Tokyo 104-0031Website: www1.lixil.co.jp/gallery/english

INAX MUSEUMSINAX MUSEUMS is a museum complex consisting of six facilities designed to promote clay and ceramics as well as display premier craftsmanship, mainly by providing hands-on classes and interactive exhibitions. The museum commenced public activities in 1986 with the opening of Kiln Plaza. It expanded with the new Tile Museum and Tiling Workshop before the grand opening of the collective INAX MUSEUMS in 2006 when Clay Works and Tiling Labo joined the complex. In April 2012, the Architectural Terracotta Museum was newly opened to exhibit its broad collection of Japanese modern-age building terracotta ornamentations. In 2013, INAX MUSEUMS was awarded a prize by the Architectural Institute of Japan for its long-term efforts in collecting and preserving these historical ceramic building materials. While displaying a unique collection of historical ceramics and related structures, the museum has geared up its activities by hosting new exhibitions and workshops.

Address: 1-130 Okueicho, Tokoname, Aichi 479-8586Website: www1.lixil.co.jp/ilm/english

Textile Museum (Kawashima Selkon Textiles)The Textile Museum was Japans fi rst corporate museum, founded in 1889, when the countrys modern museum projects were still in their infancy, and was recognized by the fi rst chancellor of the national museum. Since its establishment, the museum has been collecting a multitude of textiles and related materials from Japan and abroad, and currently owns a huge collection consisting of around 160,000 items. The precious repository contains roughly 80,000 items of dyed woven fabric and 20,000 ancient documents that have been produced in many parts of the world along with 60,000 pieces of the companys textile prototypes and design drawings. The museum is also expanding activities through collaborations with other organizations and participation in academic projects.

Address: 265 Ichihara-cho, Shizuichi, Sakyo-ku, Kyoto 601-1123Website: www.kawashimaselkon.co.jp/bunkakan (Japanese only)

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www.lixil.com/en/sustainability

At LIXIL, we believe that our living spacesthe environment where we live, work and playare critical to our daily lives and wellbeing.Based on this belief, we are committed to ensuring that the growth of our businesses contributes to improving the quality of peoples lives by delivering safe and comfortable products and services through responsible and sustainable innovations, which are pursued utilizing our expertise in a broad range of business areas.

Corporate Responsibility (CR) at the LIXIL Group

Corporate Responsibility (CR) StrategyLIXILs Corporate Responsibility (CR) activities are promoted with a focus on three themes, as described below, which have been selected for the two principal objectives: making a positive impact in the communities in which we operate and addressing issues that require urgent action. Specifi c projects are planned and implemented by our core water, housing, building and kitchen technology business units, leveraging their business scale and expertise.In addition, our CR activities relate to a broad range of themes, from ethical business conduct and operations through corporate governance and respect for human rights to stakeholder engagement. Through these efforts, we will contribute to the sustainable development of society at large and the planet.

The LIXIL Group has launched projects tooffer safe and hygienic toilets indeveloping countries, aiming to improvesanitary conditions, particularly forfemales, and reduce risks of childrenbeing infected with potentially fataltransmitted diseases.Originally developed by American Standard Brands, the Sato (derived fromSafe Toilet) series of products has been introduced in developing countries, with more than one million units as of July 2016, contributing to improved sanitation for fi ve million people.

The LIXIL Group considers environmental conservation an important management theme. As a lifestyle-related technology company, it promotes strategies to contribute in this area by offering environmentally conscious products and services.We will continue pursuing technological innovations that can facilitate our sustainability efforts, setting a goal of achieving a net zero balance for our entire supply chain between environmental impacts of business operations and environmental contributions made by offering products and services with low-carbon, water-saving, and other environmental features.

In Japan, where the LIXIL Group is headquartered, a rapidly graying population is giving rise to various social issues. Seeking to offer solutions to these issues, we promote R&D efforts to deliver products and services aimed at increasing housing safety for and wellbeing of the elderly and the disabled.The Group also promotes workforce diversity, viewing it as essential to foster a dynamic, inspiring corporate culture, which is essential for increasing corporate strength. We implement initiatives to ensure that individual employees are given equal opportunities to demonstrate their skills and knowledge irrespective of their personal traits and background, including gender. This serves as a strong engine for growth and innovation.

Global Sanitation & HygienePromote and enable access to safe and hygienic sanitation practices, especially for women and girls, while preventing the harmful transmission of diseases for children

100 Million People By 2020, improve the livelihood of 100 million people through sanitation and hygiene solutions

Promote research and development of products that actively contribute to resolving sanitation issuesCreate a business that improves sanitation facilities in developing countries around the world

Embrace the diversity of peoplein society and within LIXIL

Create more inclusive products, particularly to support the elderly and people with disabilities Implement internal diversity initiatives around the world

Net ZeroBy 2030, achieve a net zero balance between LIXILs environmental footprint and the positive environmental contributions created through our products and services

Design products and services with consideration to lifecycle impacts and environmental effi ciencies, and increase the sales share of this product portfolioLower the environmental burden of the overall business process by improving energy and water effi ciencies and resource recycling

Water Conservation & Environmental Sustainability

Conserve water, energy, and other natural resources utilized in and by LIXIL products and services, including in the supply chain, production, distribution and during end use

Diversity & Inclusion Enhance quality of life and wellbeing for the elderly and the physically disabled through LIXIL products and servicesHarness the intelligence and perspectives of our diverse workforce as an engine for growth and innovation

Our Corporate Responsibility MissionTo be the most trusted company by enhancing living spaces through innovative, responsible engagements and initiatives around the world

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2016201520142012 2013

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Net sales1,845.1 billion

LIXILWater

Technology

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Net sales (left axis)

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Housing ServicesBusiness

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LIXIL Building Technology

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LIXIL Kitchen Technology

6.0%

LIXILHousing

Technology

31.2%

General Meeting of Shareholders


Operating Companies

Chairman of the BoardBoard of Directors

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Representative Executive Officers and Executive Officers(Decide on matters delegated by the Board of Directors and execute business)

Executive Officers Meetings and Various Committees


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Management Meeting

Divisions

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Internal Audit Committee, Compliance Committee, Risk Management Committee,Investment Strategy Council, Investment and Loan Council, New Business Council,

Business Divestment Council, and CR* Committee

Nomination Committee

Compensation Committee

Audit CommitteeBoard of Directors

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Note:This structure applies only to operating companies(LIXIL Corporation and other subsidiaries) in Japan

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Company Profi le

Overview of the Holding Company

Financial Highlights

Corporate Governance Structure

Name: LIXIL GROUP CORPORATION

Registered offi ce: 2-1-1 Ojima, Koto-ku, Tokyo 136-8535

Head offi ce: 36F, Kasumigaseki Building, 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6036

Established: September 19, 1949

Employees: Consolidated: 58,889 as of end of March 2016

Capital stock: 68,121 million

Fiscal year closing: March 31

Shares outstanding: 313,054,255

Business activities:The control and management of the domestic and overseas companies operating housing-related businesses and urban environment-related businesses, through acquisition and holding of stocks or ownership interests

Board of Directors (* Outside directors)

Yoichiro Ushioda

Kinya Seto

Yoshizumi Kanamori

Yoshinobu Kikuchi

Ryuichi Kawamoto

Toshimasa Iue

Keiichiro Ina

Hidehiko Sato*

Tsutomu Kawaguchi*

Main Kohda*

Barbara Judge*

Hirokazu Yamanashi*

Executive Offi cers

President and CEO: Kinya Seto

Representative Executive Offi cer and Vice President: Ryuichi Kawamoto

Executive Offi cer and Vice President: Yosuke Yagi

Executive Offi cer and Vice President: Sachio Matsumoto

Executive Offi cer and Vice President: Toshimasa Iue

Executive Offi cer and Vice President: Haruo Shirai

Executive Offi cer and Senior Managing Director: Laurence W. Bates

Executive Offi cer and Senior Managing Director: Jin Song Montesano

Under the leadership of LIXIL Group

Corporation, a pure holding company,

Group operating companies work in

cooperation as independent partners in

order to produce superior results as a

group. The LIXIL Group works to create

and provide value for all stakeholders,

thereby earning and maintaining the trust

of society. In this context, we defi ne

corporate governance as one of our most

important management themes.

To strengthen corporate governance, the

Group has established an appropriate

structure and developed a range of

measures to expedite decision-making,

ensure effective and effi cient business

execution, and enhance internal control.

Sales breakdown by segment Net sales and recurring profi tManagement indicators(consolidated) (JGAAP)

Fiscal year ended March 2016

Net salesOperating incomeRecurring profi tNet income

Total assetsNet assetsEquity ratio

Dividends per shareNumber of subsidiariesNumber of equity method affi liates

( million)

1,845,11756,25948,421

-18,664

2,060,873637,517

26.4%

60175

6

15

1900

1950

2000

2010

2015

Atlantide Phototravel/Corbis

History1843: Company founder Jimbei Kawashima launches a fabrics store, the predecessor of Kawashima Selkon Textiles Co., Ltd.

1924: Ina Seito Co., Ltd., the predecessor of INAX, is founded by Chozaburo Ina to manufacture tiles, earthenware pipes and terracotta.

1923: Takejiro Ushioda sets up the Myokenya store, the predecessor of Tostem Corporation, to launch a wooden fi ttings retail business.

1919: The founder of INAX provides technology advice on the production of exterior tiles for the Imperial Hotel building designed by Frank Lloyd Wright.

1875: Standard Manufacturing, the predecessor of American Standard, is founded to produce cast-iron water closets, washstands and bathtubs.

1967: INAX launches the fi rst made-in-Japan shower toilet.

1988: TOEX launches Japans fi rst full-open/full-close glass-paneled garden room.

1984: Shin Nikkei Co., Ltd. is established.

1974: Toyo Exterior Co., Ltd. is established.

1973: Permasteelisa is founded in Italy (original name: Isa).

1971: Tostem launches a new aluminum window sash designed to prevent rainwater seepage and allow easier cleaning.

1968: Tostem and Shin Nikkei undertake Japans fi rst super high-rise curtain wall project for the Kasumigaseki Building.

2009: American Standard Asia Pacifi c becomes a subsidiary of Inax Corporation.

2011: LIXIL Corporation forms a joint venture with Haier Group in China (LIXIL-Haier Housing Products [Qingdao] Co., Ltd.).

2011: Permasteelisa Group, a world-leading curtain wall project contractor, becomes a full subsidiary of LIXIL Corporation.

2011: Kawashima Selkon Textiles Co., Ltd. becomes a subsidiary.

2011: Tostem, INAX, Shin Nikkei, SUNWAVE and Toyo Exterior are integrated to establish LIXIL Corporation.

2010: TOSTEM launches a window featuring signifi cantly increased heat insulation due to expansion of the double-glazed area.

2010: SUNWAVE CORPORATION and Shin Nikkei Co., Ltd. become subsidiaries.

1936: Chugai Seiko Co., Ltd., the predecessor of SUNWAVE CORPORATION, is founded by Ryozo Yoshizaki.

1960: American Standard launches a new-type (push-pull) faucet.

1958: INAX launches production of FRP bathtubs.

1956: SUNWAVE develops Japans fi rst mass production technologyfor high-quality, low-priced stainless steel sinks.

1949: Nihon Tategu Kogyo Co., Ltd. (later Tostem Corporation; currently LIXIL Group Corporation) is founded by Kenjiro Ushioda.

1945: INAX launches production of ceramic sanitary ware.

1936: GROHE is founded by Friedrich Grohe, acquiring Berkenhoff & Paschedag.

Previous main wing of Imperial Hotel

2001: Tostem Corporation is renamed Tostem Inax Holding Corporation, and becomes a pure holding company.

Tostem Corporation (currently LIXIL Corporation), an operating company, is established through a corporate separation.

Inax Corporation joins the Group.

2004: Tostem Inax Holding Corporation is renamed JS Group Corporation.

2007: INAX and Tostem develop a bathroom drainage system designed to signifi cantly increase cleaning functionality.

2005: SUNWAVEs kitchen systems receive a Red Dot Design Award.

2001: INAX launches tankless fl ush toilets.

2012: Permasteelisa undertakes a building envelope project for The Shard tower (in the UK) designed by Renzo Piano.

2015: LIXIL Corporation reorganizes its structure into four technology units to pursue global expansion.

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

2014: GROHE Group S.A.R.L. becomes an equity-method affi liated company of LIXIL Corporation.

2013: American Standard Brands in the US becomes a subsidiary of LIXIL Corporation.

XV2100 01 September 15, 2016

36F, Kasumigaseki Building,3-2-5 Kasumigaseki, Chiyoda-ku,Tokyo 100-6036, Japanwww.lixil.com

*XV2100 *

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