EX-99.1 2 ss40072_ex9901.txt NOTICE OF CONVOCATION AND BUSINESS REPORT (Securities Code 7203) June 3, 2008 To All Shareholders: President Katsuaki Watanabe TOYOTA MOTOR CORPORATION 1, Toyota-cho, Toyota City, Aichi Prefecture Notice of Convocation of FY2008 Ordinary General Shareholders' Meeting (Unless otherwise stated, all financial information has been prepared in accordance with generally accepted accounting principles in Japan) English translation from the original Japanese-language document Dear Shareholder, Please refer to the following for information about the upcoming FY2008 Ordinary General Shareholders' Meeting (the "General Shareholders' Meeting"). We hope that you will be able to attend this meeting. If you are unable to attend the meeting, it would be appreciated if you could take the time to vote "yes" or "no" on the enclosed ballot form after reviewing the enclosed documents and return it to us no later than Monday, June 23, 2008. Thank you very much for your cooperation. 1. Date and time: 10:00 a.m., Tuesday, June 24, 2008 2. Venue: Toyota Head Office, 1, Toyota-cho, Toyota City, Aichi Prefecture 3. Meeting Agenda: Reports: Reports on business review, unconsolidated and consolidated financial statements for FY2008 (April 1, 2007 through March 31, 2008) and report by Accounting Auditor and the board of Corporate Auditors on the audit results of the consolidated financial statements. Resolutions: Proposed Resolution 1: Distribution of Surplus Proposed Resolution 2: Election of 30 Directors Proposed Resolution 3: Issuance of Stock Acquisition Rights for the Purpose of Granting Stock Options Proposed Resolution 4: Acquisition of Own Shares Proposed Resolution 5: Payment of the Final Retirement Bonus to Corporate Auditors Due to the Abolishment of the Retirement Bonus System for Corporate Auditors Proposed Resolution 6: Revision to the Amount of Remuneration for Corporate Auditors Proposed Resolution 7: Payment of Executive Bonuses Notes: - If you attend the meeting in person, please submit the enclosed ballot at the reception desk. It will serve as your admission pass. - If you intend to engage in split voting, please submit written notice to that effect and the reasons for the split voting at least three days prior to the General Shareholders' Meeting by June 21, 2008. - If any revisions are made to the reference documents or attachments for the General Shareholders' Meeting, the revisions will be posted on Toyota Motor Corporation's Web site (http://www.toyota.co.jp). Reference Documents Proposed resolutions and reference matters Proposed Resolution 1: Distribution of Surplus We propose the distribution of surplus as follows: Year-end Dividend We would like to offer a year-end dividend of 75 yen per share. Combined with the interim dividend, the total amount of the annual dividends for the fiscal year ended March 31, 2008 will be 140 yen per share, and the consolidated payout ratio will be 25.9 %. (1) Type of dividend assets Cash (2) Allocation of dividend assets and the total amount of dividends Payment of 75 yen per share of common stock (Total amount of dividends: 236,195,988,900 yen) (3) Effective date of distribution of surplus June 25, 2008 Proposed Resolution 2: Election of 30 Directors All Directors will retire upon the expiration of their term of office at the conclusion of this General Shareholders' Meeting. Accordingly, we hereby request that 30 Directors be elected. The candidates for the positions of Director are as follows: Following are the nominees ---------------------------------------------------------------------------------------------------------------------- Position and main areas of No. of no. Name responsibility at Brief career summary and representative TMC's (birth date) Toyota Motor positions in other organizations shares Corporation ("TMC") owned ---------------------------------------------------------------------------------------------------------------------- Apr. 1960 Joined TMC Sep. 1988 Director of TMC Dec. 1988 Toyota Motor Manufacturing, U.S.A., Inc. President Sep. 1994 Managing Director of TMC 1* Fujio Cho Chairman of Oct. 1994 Retired from Toyota Motor 40,705 (2/2/1937) the Board Manufacturing, U.S.A., Inc. President Jun. 1996 Senior Managing Director of TMC Jun. 1998 Executive Vice President of TMC Jun. 1999 President of TMC Jun. 2005 Vice Chairman of TMC Jun. 2006 Chairman of TMC ---------------------------------------------------------------------------------------------------------------------- Apr. 1965 Joined the Ministry of International Trade and Industry Jul. 1997 Ministry of International Trade and Industry Vice-Minister for International Affairs Katsuhiro Jun. 1998 Retired from Ministry of 2* Nakagawa Vice Chairman International Trade and Industry 34,600 (3/11/1942) Vice-Minister for International Affairs Jun. 2001 Managing Director of TMC Jun. 2002 Senior Managing Director of TMC Jun. 2003 Executive Vice President of TMC Jun. 2004 Vice Chairman of TMC ---------------------------------------------------------------------------------------------------------------------- Apr. 1964 Joined TMC Katsuaki Sep. 1992 Director of TMC 3* Watanabe President Jun. 1997 Managing Director of TMC (2/13/1942) Jun. 1999 Senior Managing Director of TMC 31,871 Jun. 2001 Executive Vice President of TMC Jun. 2005 President of TMC ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1967 Joined TMC Vice President Jun. 1996 Director of TMC Jun. 2001 Managing Director of TMC - Research & Jun. 2003 Senior Managing Director of TMC Development (R & D Jun. 2005 Executive Vice President of TMC Management, Technical Kazuo Administration, Design, 4* Okamoto Product Development, 25,564 (2/20/1944) Vehicle Engineering, Motor Sports) - Technical Administration Group - Design Group - Vehicle Engineering Group - Motor Sports Div. ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1967 Joined Toyota Motor Sales Co., Ltd. Vice President Jun. 1997 Director of TMC 5* Kyoji Sasazu Jun. 2001 Managing Director of TMC 28,692 (6/11/1944) - Business Development Jun. 2003 Senior Managing Director of TMC - Purchasing Jun. 2005 Executive Vice President of TMC - Housing ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1968 Joined TMC Vice President Jun. 1997 Director of TMC Jun. 2001 Managing Director of TMC - Corporate Planning & Jun. 2003 Senior Managing Director of TMC Research Jun. 2005 Executive Vice President of TMC - Government & Public Affairs Mitsuo - General Management 6* Kinoshita (Global Audit, 27,470 (1/1/1946) General Administration & Human Resources, Accounting, Information Systems) - CSR & Environmental Affairs - Information System Group - Global Audit Div. ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1969 Joined TMC Vice President Jun. 1998 Director of TMC Jun. 2001 Managing Director of TMC Takeshi - Production Jun. 2003 Senior Managing Director of TMC 7* Uchiyamada - TQM Jun. 2005 Executive Vice President of TMC 28,464 (8/17/1946) (other executive duties) Chairman of Toyota Motor Technical Center (China) Co., Ltd. ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1970 Joined TMC Vice President Jun. 1999 Director of TMC Jun. 2002 Managing Director of TMC - Quality Jun. 2003 Senior Managing Director of TMC - Research & Jun. 2005 Executive Vice President of TMC Masatami Development (Power 8* Takimoto Train, Future 29,500 (1/13/1946) Project) - Fuel Cell System Development - Fuel Cell System Development Group - Future Project Div. ---------------------------------------------------------------------------------------------------------------------- Executive Apr. 1984 Joined TMC Vice President Jun. 2000 Director of TMC Jun. 2002 Managing Director of TMC - Product Management Jun. 2003 Senior Managing Director of TMC - IT & ITS Jun. 2005 Executive Vice President of TMC Akio - Global Planning 9* Toyoda Operations (other executive duties) 4,564,691 (5/3/1956) - Japan Sales Operations Chairman of Digital Media Asia Pacific Ltd. - Customer Service - Quality - IT & ITS Group - e-TOYOTA Div. ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1970 Joined Toyota Motor Sales Co., Ltd. Managing Director Jun. 2000 Director of TMC Jun. 2003 Managing Officer of TMC - The Americas Jun. 2003 Toyota Motor Sales, U.S.A., Inc. Operations Group President - Chairman of Toyota Jun. 2004 Director of TMC Motor Sales, U.S.A., Jun. 2005 Senior Managing Director of TMC Inc. Jun. 2005 Toyota Motor Sales, U.S.A., Inc. Chairman 10* Yukitoshi Funo May 2006 Toyota Motor North America, Inc. 34,248 (2/1/1947) Chairman Jun. 2007 Retired from Toyota Motor North America, Inc. Chairman (other executive duties) Chairman of Toyota Motor Sales, U.S.A., Inc. Vice President of Calty Design Research, Inc. President of Toyota Motor Personnel Services, U.S.A., Inc. ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1971 Joined TMC Managing Director Jun. 2000 Director of TMC Jun. 2002 Toyota Motor Manufacturing North - Purchasing Group America, Inc. President 11* Atsushi Niimi Jun. 2003 Managing Officer of TMC 29,738 (7/30/1947) Jun. 2004 Director of TMC Jun. 2005 Retired from Toyota Motor Manufacturing North America, Inc. President Jun. 2005 Senior Managing Director of TMC ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1969 Joined Toyota Motor Sales Co., Ltd. Managing Director Jun. 2001 Director of TMC Hiroshi Jun. 2003 Managing Officer of TMC 12* Takada - Global Planning Jun. 2005 Senior Managing Director of TMC 12,250 (12/22/1946) Operations Group - Product Management Div. ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1969 Joined TMC Managing Director Jun. 2001 Director of TMC Teiji Jun. 2003 Managing Officer of TMC 13* Tachibana - Government & Public Jun. 2005 Senior Managing Director of TMC 14,700 (1/18/1947) Affairs Group - Housing Group (other executive duties) Chairman of Toyota Housing Corporation ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1970 Joined TMC Managing Director Jun. 2001 Director of TMC Jun. 2003 Managing Officer of TMC - Quality Group Jun. 2004 Toyota Motor Engineering & Manufacturing Europe NV/SA President Jun. 2005 Senior Managing Director of TMC Shinichi Oct. 2005 Toyota Motor Europe NV/SA, Toyota 14* Sasaki Motor Marketing Europe NV/SA and 11,810 (12/18/1946) Toyota Motor Engineering & Manufacturing Europe NV/SA merged under the name Toyota Motor Europe NV/SA Oct. 2005 Toyota Motor Europe NV/SA President Jul. 2006 Retired from Toyota Motor Europe NV/SA President ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1971 Joined Toyota Motor Sales Co., Ltd. Managing Director Jun. 2001 Director of TMC Jun. 2003 Managing Officer of TMC 15* Akira Okabe - Asia, Oceania & Jun. 2005 Senior Managing Director of TMC 25,300 (9/17/1947) Middle East Operations Group (other executive duties) Chairman of Toyota Motor Asia Pacific Pte Ltd. ---------------------------------------------------------------------------------------------------------------------- Senior Jul. 1971 Joined Toyota Motor Sales Co., Ltd. Managing Director Jun. 2001 Director of TMC Yoichiro Jun. 2003 Managing Officer of TMC 16* Ichimaru - Japan Sales Jun. 2005 Senior Managing Director of TMC 21,268 (10/10/1948) Operations Group ---------------------------------------------------------------------------------------------------------------------- Senior Apr. 1975 Joined TMC Managing Director Jun. 2001 Director of TMC Jun. 2003 Managing Officer of TMC 17* Shoji Ikawa - Fuel Cell System Jun. 2005 Senior Managing Director of TMC 27,936 (9/1/1949) Development Group - Production Engineering Group ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1973 Joined TMC Jun. 2002 Director of TMC - Strategic Production Jun. 2003 Managing Officer of TMC Planning Group Jun. 2007 Senior Managing Director of TMC 18* Koichi Ina - Manufacturing Group (5/6/1948) - TQM Promotion Div. (other executive duties) 31,700 Chairman of Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. Chairman of Toyota Motor Engineering & Manufacturing North America, Inc. ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1972 Joined TMC Shinzo Jun. 2003 Managing Officer of TMC 19* Kobuki - Power Train Jun. 2007 Senior Managing Director of TMC 23,900 (3/8/1950) Development Group - R&D Management Div. ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1970 Joined TMC Jun. 2003 Managing Officer of TMC - China Operations Aug. 2003 Toyota Motor Technical Center Group (China) President - Chairman of Toyota Jun. 2007 Senior Managing Director of TMC Motor (China), Jun. 2007 Retired from Toyota Motor Technical Investment Co., Ltd. Center (China) President Jun. 2007 Chairman of Toyota Motor (China), Investment Co., Ltd. (other executive duties) Chairman of Toyota Motor (China), Investment Co., Ltd. 17,000 20* Akira Sasaki Vice Chairman of FAW Toyota Motor Sales Co., Ltd. (2/26/1948) Vice Chairman of FAW Toyota (Changchun) Engine Co., Ltd. Chairman of Guangqi Toyota Engine Co., Ltd. Vice Chairman of Guangzhou Toyota Motor Co., Ltd. Vice Chairman of Sichuan FAW Toyota Motor Co., Ltd. Vice Chairman of Tianjin FAW Toyota Engine Co., Ltd. Vice Chairman of Tianjin FAW Toyota Motor Co., Ltd. Chairman of Toyota FAW (Tianjin) Dies Co., Ltd. Vice Chairman of Tong Fang Global Logistics Co., Ltd Vice Chairman of Toyota Motor Technical Center (China) Co., Ltd ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1973 Joined Toyota Motor Sales Co., Ltd. Jun. 2003 Managing Officer of TMC - Europe & Africa Jun. 2003 Toyota Motor Marketing Europe NV/SA Operations Group President - President of Toyota Oct. 2005 Toyota Motor Europe NV/SA, Motor Europe NV/SA Toyota Motor Marketing Europe NV/SA and Toyota Motor Engineering & Tadashi Manufacturing Europe NV/SA merged 21* Arashima under the name Toyota Motor Europe NV/SA 20,781 (8/14/1949) Oct. 2005 Toyota Motor Europe NV/SA Executive Vice President Jul. 2006 Toyota Motor Europe NV/SA President Jun. 2007 Senior Managing Director of TMC (other executive duties) President of Toyota Motor Europe NV/SA ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1973 Joined TMC Mamoru Jun. 2003 Managing Officer of TMC 22* Furuhashi - Government & Public Jun. 2007 Senior Managing Director of TMC 12,700 (1/3/1950) Affairs Group ---------------------------------------------------------------------------------------------------------------------- Senior Managing Director Apr. 1974 Joined Toyota Motor Sales Co., Ltd. Jun. 2003 Managing Officer of TMC Satoshi - General Administration Jun. 2007 Senior Managing Director of TMC 23* Ozawa & Human Resources 15,200 8/5/1949) Group (other executive duties) - Corporate Planning Div. President of Toyota Personnel Support Corporation - Research Div. President of OJT Solutions Co., Ltd. - CSR & Environmental President of Toyota Loops Co., Ltd. Affairs Div. ---------------------------------------------------------------------------------------------------------------------- Honorary Chairman Jul. 1952 Joined TMC Jul. 1952 Director of TMC Jan. 1961 Managing Director of TMC Oct. 1967 Senior Managing Director of TMC Dec. 1972 Executive Vice President of TMC Jun. 1981 Director of TMC Jun. 1981 Toyota Motor Sales Co., Ltd. President Shoichiro Jul. 1982 President of TMC 24* Toyoda Sep. 1992 Chairman of TMC 11,176,193 (2/27/1925) Jun. 1999 Honorary Chairman (other executive duties) Representative Director of Toyota Central Reserch and Development Laboratories, Incorporated Representative Director of Genesis Research Institute, Incorporated Chairman of Towa Real Estate Co., Ltd. ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Senior Advisor Apr. 1955 Joined Toyota Motor Sales Co., Ltd. Jul. 1982 Director of TMC Hiroshi Sep. 1987 Managing Director of TMC 25* Okuda Sep. 1988 Senior Managing Director of TMC 64,963 (12/29/1932) Sep. 1992 Executive Vice President of TMC Aug. 1995 President of TMC Jun. 1999 Chairman of TMC Jun. 2006 Senior Advisor of TMC ---------------------------------------------------------------------------------------------------------------------- 26 Iwao Nihashi -- Apr. 1970 Joined TMC 12,800 (2/16/1950) Jun. 2003 Managing Officer of TMC ---------------------------------------------------------------------------------------------------------------------- Apr. 1974 Joined TMC Jun. 2003 Managing Officer of TMC Jun. 2004 Toyota Technical Center, U.S.A., Inc. President Apr. 2006 Toyota Motor Manufacturing North America, Inc. and Toyota Technical Center, U.S.A., Inc. merged under Yasuhiko the name Toyota Motor Engineering & 27 Ichihashi -- Manufacturing North America, Inc. 22,800 (3/22/1952) Apr. 2006 Toyota Motor Engineering & Manufacturing North America, Inc. Executive Vice President (other executive duties) Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc. ---------------------------------------------------------------------------------------------------------------------- Apr. 1977 Joined TMC Jan. 2001 Toyota Technical Center, U.S.A., Inc. President Jun. 2003 Managing Officer of TMC Tadashi Jun. 2004 Retired from Toyota Technical 28 Yamashina -- Center, U.S.A., Inc. President 9,500 (5/8/1951) Dec. 2006 Toyota Motorsport GmbH Vice Chairman Jun. 2007 Toyota Motorsport GmbH Chairman (other executive duties) Chairman of Toyota Motorsport GmbH ---------------------------------------------------------------------------------------------------------------------- Takahiko Apr. 1976 Joined TMC 29 Ijichi -- Jun. 2004 Managing Officer of TMC 11,000 (7/15/1952) ----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------- Position and main No. of no. Name areas of Brief career summary and representative TMC's (birth date) responsibility at TMC positions in other organizations shares owned ---------------------------------------------------------------------------------------------------------------------- Apr. 1976 Joined TMC Jun. 2004 Managing Officer of TMC Jul. 2006 Toyota Motor Europe NV/SA Executive Vice President 30 Tetsuo Agata (other executive duties) (4/26/1953) -- Executive Vice President of Toyota Motor Europe 6,793 NV/SA Chairman of Toyota Motor Industries Poland SP.zo.o. Chairman of Toyota Motor Manufacturing (UK) Ltd. Chairman of Toyota Motor Manufacturing Turkey Inc. Chairman of Toyota Motor Manufacturing France S.A.S ----------------------------------------------------------------------------------------------------------------------
Note: * indicates current Director of TMC. Proposed Resolution 3: Issuance of Stock Acquisition Rights for the Purpose of Granting Stock Options Pursuant to Articles 236, 238 and 239 of the Corporation Act of Japan, we request authorization (i) to issue "Stock Acquisition Rights" (rights to acquire TMC's shares by making certain specified payments within a certain specified period of time, i.e. Stock Options) without consideration, for the purpose of granting stock options, to Directors, Managing Officers, employees, and other persons in similar positions at TMC and its affiliates, and (ii) to delegate to the Board of Directors the determination of the terms and conditions of the offering of such rights. Stock Acquisition Rights granted to Directors of TMC without consideration constitute remuneration other than cash of indeterminate value to Directors. Consequently, we also request approval of the calculation method to determine the value of the Stock Acquisition Rights allotted to Directors as remuneration. In addition, if Proposed Resolution 2 "Election of 30 Directors" is approved, the 30 Directors will receive allotment of the Stock Acquisition Rights, and the maximum number of Stock Acquisition Rights to be allotted to the Directors of TMC shall be 10,100, considering the number of Stock Acquisition Rights granted for the purpose of existing stock options and other various factors. 1. Reason for Issuance of Stock Acquisition Rights without Consideration TMC will issue Stock Acquisition Rights to Directors, Managing Officers and employees, etc. of TMC and its affiliates in order to enhance enthusiasm and raise morale for improving business performance and thereby contribute to strengthening TMC's international competitiveness. 2. Summary of Terms of Issuance of Stock Acquisition Rights (1) Grantees of the Stock Acquisition Rights Directors, Managing Officers and employees, etc. of TMC and its affiliates. (2) Type and Number of Shares to be Issued or Transferred upon Exercise of Stock Acquisition Rights Up to 3,700,000 shares of common stock of TMC. Provided, however, that if the number of shares to be issued or transferred upon exercise of each Stock Acquisition Right is adjusted in accordance with (3) below, such number of shares to be issued or transferred shall be adjusted to the number obtained by multiplying the number of shares after adjustment by the total number of Stock Acquisition Rights to be issued. (3) Total Number of Stock Acquisition Rights Up to 37,000 The number of shares to be issued or transferred upon exercise of each Stock Acquisition Right (the "Number of Shares to be Granted") shall be 100; provided, however, that if TMC splits its shares (including the allotment of common stock to shareholders without consideration; hereinafter the same shall apply) or consolidates its shares after the allotment date of the Stock Acquisition Rights ("Allotment Date"), the Number of Shares to be Granted shall be adjusted according to the following formula. Number of Shares to be = Number of Shares to x Ratio of split Granted after be Granted before (or consolidation) adjustment adjustment The adjustment above shall be made only to the unexercised Stock Acquisition Rights remaining at the relevant time. If any fraction less than one (1) share arises as a result of such adjustment, such fraction shall be discarded. (4) Amount Paid for Issuance of Stock Acquisition Rights No monetary payment shall be required for Stock Acquisition Rights for which the determination of the terms and conditions of the offering of such rights can be delegated to the Board of Directors at this General Shareholders' Meeting. (5) Amount of Assets to be Paid upon Exercise of Stock Acquisition Rights (Exercise Price) The amount of assets to be paid upon exercise of each Stock Acquisition Right shall be the amount obtained by multiplying the amount to be paid per share issued or transferred upon exercise of Stock Acquisition Rights (the "Exercise Price") by the Number of Shares to be Granted. The Exercise Price shall be as follows. The amount obtained by multiplying the closing price of TMC's common stock in regular trading on the Tokyo Stock Exchange on the Allotment Date (if there is no transaction made on that day, then the closing price of the latest date prior to the Allotment Date on which a transaction was made) by 1.025, and any fraction less than one (1) yen arising therefrom shall be rounded up to the nearest one (1) yen. In addition, the Exercise Price shall be adjusted as follows: (i) If TMC splits or consolidates its shares after the Allotment Date, the Exercise Price shall be adjusted according to the following formula, and any fraction less than one (1) yen arising therefrom shall be rounded up to the nearest one (1) yen. 1 Exercise Price = Exercise Price x ---------------------- after adjustment before adjustment Ratio of split (or consolidation) (ii) If TMC issues common stock or sells treasury stock of the common stock at a price below the market price after the Allotment Date, the Exercise Price shall be adjusted according to the following formula, and any fraction less than one (1) yen arising therefrom shall be rounded up to the nearest one (1) yen. No adjustment shall be made, however, in the event that Stock Acquisition Rights are exercised. Number of shares Amount to be Number of newly issued X paid per share Exercise Price Exercise Price outstanding shares + ----------------------------------------- after adjustment = before adjustment X Market price ------------------------------------------------------------------ Number of + Number of shares newly issued outstanding shares
"Number of outstanding shares" provided for in the above formula does not include the number of shares held by TMC as treasury stock and in the case where the treasury stock is to be sold, "Number of shares newly issued" shall be read as "Number of shares of treasury stock to be sold." (iii)In the event that other class of stock is allotted without consideration to the holders of common stock, shares of another company are delivered to the holders of common stock of TMC as dividends, or in any other similar instance where an adjustment of the Exercise Price is required, in each case after the Allotment Date, an appropriate adjustment shall be made to the extent reasonable. (6) Exercise Period of the Stock Acquisition Rights From August 1, 2010 to July 31, 2016 (7) Conditions of Exercise of Stock Acquisition Rights (i) Each Stock Acquisition Right may not be partially exercised. (ii) The grantees of the Stock Acquisition Rights must, at the time of the closing of the ordinary general shareholders' meeting to be held for the last fiscal year ending within two (2) years after the closing of the General Shareholders' Meeting, be a Director, Managing Officer or an employee, etc. of TMC or its affiliates to which he or she belongs at the time such rights are granted. (iii)The grantee of the Stock Acquisition Rights may exercise his or her Stock Acquisition Rights for up to two (2) years after the grantee loses his or her position as a Director, Managing Officer or an employee, etc. of TMC or its affiliates to which the grantee belongs at the time such rights are granted. However, if the grantee loses such position due to retirement of office or resignation for personal reasons, or removal from office or dismissal, the Stock Acquisition Rights will expire immediately. (iv) Stock Acquisition Rights may not be inherited. (v) Other exercise conditions shall be provided for by the resolution of the General Shareholders' Meeting and the resolution of the meeting of the Board of Directors. (8) Events and Conditions of Acquisition of Stock Acquisition Rights by TMC Stock Acquisition Rights may be acquired by TMC without consideration, on a date that shall be provided by the Board of Directors, if a proposal on a merger agreement in which TMC will be dissolved, or a proposal on a share exchange agreement or a share transfer by which TMC will become a wholly-owned subsidiary of another company is approved at an ordinary general shareholders' meeting. (9) Restriction on Transfer of Stock Acquisition Rights Transfer of Stock Acquisition Rights shall be subject to approval of the Board of Directors. (10) Matters concerning the Paid-in Capital and Capital Reserve to be Increased due to the Issuance of Shares upon Exercise of Stock Acquisition Rights (i) Amount of paid-in capital to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be half of the maximum amount of paid-in capital increase and others which is calculated in accordance with Article 40, Paragraph 1 of the Corporation Accounting Regulations, and any fraction less than one (1) yen arising therefrom shall be rounded up to the nearest one (1) yen. (ii) Amount of capital reserve to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be an amount determined by subtracting the amount of paid-in capital to be increased provided in the immediately preceding paragraph (i) from the maximum amount of increase in paid-in capital set forth in the immediately preceding paragraph (i). (11) Handling of Fraction In the case where the number of shares to be issued or transferred to the grantee includes any fraction less than one (1) share, such fraction shall be rounded down. (12) Calculation Method of the Fair Value of Stock Acquisition Rights The fair value of the Stock Acquisition Rights shall be calculated by using the Black-Scholes model based on the various conditions on the Allotment Date. Reference: The fair value of the Stock Acquisition Rights as of March 31, 2008, calculated in accordance with the Black-Scholes model, is 680 yen per share. Proposed Resolution 4: Acquisition of Own Shares In order to improve capital efficiency and to implement flexible capital policies tailored to the business environment, we request authorization to acquire shares of common stock of TMC up to a maximum of 30 million shares and to a maximum aggregate purchase price of 200 billion yen, pursuant to the provisions of Article 156 of the Corporation Act of Japan during the one-year period from the day immediately following the close of this General Shareholders' Meeting. Proposed Resolution 5: Payment of the Final Retirement Bonus to Corporate Auditors Due to the Abolishment of the Retirement Bonus System for Corporate Auditors By the resolution of the Board of Directors' Meeting held on April 25, 2008, TMC decided to abolish its Retirement Bonus System and Executive Bonuses for Corporate Auditors, effective upon the conclusion of this General Shareholders' Meeting, in order to further strengthen the independence of Corporate Auditors from management. We propose the payment of the final retirement bonus to the 7 Corporate Auditors currently in office within a range of appropriate amounts to be determined in accordance with standards adopted by TMC for their service through the conclusion of this General Shareholders' Meeting. The amounts and method of payment, etc. will be determined through consultation among Corporate Auditors. Payment will be made at the time of retirement of each Corporate Auditor. The following is the brief career summary of each Corporate Auditor. --------------------------- ---------------------------------------------------- Name Brief career summary --------------------------- ---------------------------------------------------- Yoshikazu Amano June 2007 Full-time Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Chiaki Yamaguchi June 2003 Full-time Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Masaki Nakatsugawa June 2006 Full-time Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Yoichi Kaya June 2003 Outside Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Yoichi Morishita June 2006 Outside Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Akishige Okada June 2006 Outside Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Kunihiro Matsuo June 2007 Outside Corporate Auditor of TMC --------------------------- ---------------------------------------------------- Proposed Resolution 6: Revision to the Amount of Remuneration for Corporate Auditors Remuneration paid to Corporate Auditors was set at a maximum total amount of 13 million yen per month at the Extraordinary General Shareholders' Meeting held on May 13, 1982. However, in light of subsequent changes in economic developments, the abolishment of Retirement Bonus System and Executive Bonuses for Corporate Auditors, and other various circumstances, we propose to increase the maximum total amount of remuneration to be paid to Corporate Auditors to 30 million yen per month. There are currently seven Corporate Auditors. Proposed Resolution 7: Payment of Executive Bonuses Taking into consideration the business results for FY2008 and other factors, the 29 Directors in office as of the end of FY2008, and the 7 Corporate Auditors will be paid a total amount of 1,066,500,000 yen (1,002,000,000 yen for Directors and 64,500,000 yen for Corporate Auditors) as executive bonuses. (Business Report for the Period from April 1, 2007 to March 31, 2008) Table of Contents To Our Shareholders............................................................2 (Attachment to the Notice of Convocation of FY2008 Ordinary General Shareholders' Meeting) Business Report............................................................3 1. Outlook of Associated Companies......................................3 2. Status of Shares....................................................14 3. Status of Stock Acquisition Rights, Etc.............................15 4. Status of Directors and Corporate Auditors..........................18 5. Status of Accounting Auditor........................................26 6. Basic Policy Regarding the System to Secure the Appropriateness of Business.......................................27 Unconsolidated Financial Statements.......................................30 UNCONSOLIDATED BALANCE SHEETS..........................................30 UNCONSOLIDATED STATEMENTS OF INCOME....................................31 UNCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS.....................32 NOTES TO UNCONSOLIDATED FINANCIAL STATEMENTS...........................36 Independent Auditor's Report (Certified Copy).............................40 Consolidated Financial Statements.........................................41 CONSOLIDATED BALANCE SHEETS............................................41 CONSOLIDATED STATEMENTS OF INCOME......................................42 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY........................43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.........................44 Independent Auditor's Report (Certified Copy).............................46 Board of Corporate Auditors' Report (Certified Copy)......................47 Consolidated Business Results for FY2008 (Reference)..........................48 Segment Operating Results.................................................48 Geographic Information....................................................49 1 To Our Shareholders: We are pleased to report on our business results for Guiding Principles at Toyota FY2008 (April 1, 2007 through March 31, 2008). 1. Honor the language and spirit of the Toyota Motor Corporation ("TMC") celebrated its 70th law of every nation and undertake anniversary in November 2007. We would like to thank open and fair corporate activities to everyone, especially our shareholders and customers be a good corporate citizen of the world. for long-running support and patronage. In spite of severe external conditions, such as soaring 2. Respect the culture and customs of raw material prices and the slowing U.S.economy in the every nation and contribute to latter half of FY2008, Toyota achieved record high economic and social development results in net revenues and every item in profits in its through corporate activities in the consolidated business results for FY2008 for two communities. consecutive years, as a result of the expansion of business mainly in resource-rich countries and 3. Dedicate ourselves to providing clean emerging countries. and safe products and to enhancing Therefore, we will propose a year-end dividend of 75 the quality of life everywhere through yen per share at the FY2008 Ordinary General all our activities. Shareholders' Meeting. This, combined with the interim dividend of 65 yen per share, will total to an annual 4. Create and develop advanced dividend of 140 yen per share for FY2008, an increase technologies and provide outstanding of 20 yen compared with FY2007. products and services that fulfill the Toyota maintains the "Guiding Principles at Toyota," a needs of customers worldwide. framework for our basic corporate stance. We also established our "Global Vision 2020" on the occasion of 5. Foster a corporate culture that our 70th anniversary in November 2007, and set a new enhances individual creativity and challenges for the future in pursuit of a robust concept: teamwork value, while honoring "using technology and human power to develop a future mutual trust and respect between world." We will endeavor to enhance and strive to grow labor and management. in harmony with society based on four important themes in manufacturing: "environment," "energy," "safety" and 6. Pursue growth in harmony with the "comfort." global community through innovative We rely on our shareholders for their further ongoing management. support. 7. Work with business partners in research and creation to achieve Katsuaki Watanabe stable, long-term growth and mutual President benefits, while keeping ourselves open to new partnerships.
2 Attachment to the Notice of Convocation of FY2008 Ordinary General Shareholders' Meeting Business Report (Fiscal Year under review: April 1, 2007 through March 31, 2008) 1. Outlook of Associated Companies (1) Progress and Achievement in Operation General Economic Environment in FY2008 Reviewing the general economic environment for the fiscal year ended March 2008 ("FY2008"), the Japanese economy experienced moderate expansion driven by capital expenditures and exports. Overseas, economic conditions remained steady in the United States supported by personal consumption. The economy continued to recover in Europe overall, and Asia experienced continued robust economic growth, particularly in China. In the second half of FY2008, however, disorder in financial markets triggered by the subprime mortgage crisis and high oil prices resulted in a severe economic condition and a downturn in the world economy. Under these circumstances, Toyota Motor Corporation ("TMC") and its consolidated subsidiaries (together, "Toyota") have been striving to develop attractive products to satisfy their customers worldwide. Overview of Japanese Operations During FY2008 Toyota launched the Hybrid Sedan "LS600h/LS600hL," the top model of our Lexus brand lineups and the Lexus "IS F," a model designed to maximize the pleasure of driving, which is the intrinsic affection of the automobile. "Crown," a brand that has come to be well recognized and acclaimed as the classic model since its debut more than half a century ago, in 1955, has been re-engineered into an attractive product installed with the world-first safety technologies, including Toyota's "Pre-crash Safety System" with an added function to detect the opening-and-closing of the driver's eyes, and the "Navi Brake Assist" an advanced driving assistance function which is linked to the car navigation system. As a result of these active launches of new products and the diligent efforts of dealers nationwide, market share (including Daihatsu and Hino) including mini-vehicles was 42.0%, representing a record high, and Toyota and Lexus' market share excluding mini-vehicles remained at a high level of 45.6% following FY2007, although the total sales of vehicles in Japan for FY2008 decreased by 99,000 units (or 4.2%) to 2,232,000 units, compared with FY2007. LS600h/LS600hL Crown Athlete 3 Overview of Overseas Operations For overseas operations, production of the Camry began at a facility run by Fuji Heavy Industries Ltd. in Indiana, North America, and sales volumes of fuel-efficient cars such as the Prius and the new Tundra increased significantly. In Europe, the Auris and the Corolla sold steadily, and production of the Camry commenced in a new factory in Russia. In Asia, sales of the Hilux and the Yaris were favorable particularly in Indonesia and Thailand due to recovery of demand in the market as a whole. In the expanding market of China, Tianjin FAW Toyota Motor Co., Ltd. constructed its third plant and started production of the new Corolla. The countries in the Latin America and Oceania regions saw sharp increases in unit sales, such as the Hilux in Brazil and Argentina, and the Camry in Australia. Through these global expansion of production sites, the introduction of vehicle models that closely meet customer needs in Japan and overseas and the implementation of various sales measures, the global sales, including Daihatsu and Hino brands, reached a total of 9,430 thousand units in FY2008, 425 thousand units (or 4.7%) above the sales in FY2007. Production of the Camry began in Russia. Production of the new Corolla began in Tianjin FAW Toyota Motor Co., Ltd., China.
4 Environmental Initiatives In parallel with these business developments, Toyota considers environmental issues a management priority and has been working to reduce carbon-dioxide emissions and other environmental burdens at every stage of the vehicle life cycle--from development, production, delivery, and use to disposal and recycling. In product development, Toyota expanded its lineup of models equipped with hybrid technology, which is Toyota's core solution for environmental issues. This resulted in the achievement of total hybrid vehicles sales of 445,000 units worldwide in FY2008, the 10th anniversary of the Prius, the total cumulative sales of hybrid vehicles for the decade reached 1,415,000 units. In production, Toyota implemented "sustainable plant initiatives" globally aiming to establish a plant that fully uses natural resources while existing in harmony with the environment. Toyota also worked positively to strengthen our "Recycle Design" policy with the aim to enhance recyclability and the easier dismantling of used vehicles. Cumulative Unit Sales of Hybrid Vehicles [GRAPHIC OMITTED] Sustainable Plant (image) Designed by MIKI KUDOH 5 Non-Automotive Operations In order to respond to the diverse customer needs, Toyota is also actively developing its business in areas such as financial services and the housing business. In the financial services business, due to our efforts to expand business in emerging markets such as China and Russia, Toyota have succeeded in developing a networks in 32 countries/regions, which support the automobile business globally. In the housing business, Toyota released three new products in the Since series with enhanced insulation efficiency in addition to features for securities and seismic safety, under the concept of a "Lifetime Healthy House." Toyota will continue to make efforts to create comfortable houses suitable for the environment and climate of Japan. Consolidated Financial Results for FY2008 Consolidated financial results for FY2008 reflected a well-balanced profit structure globally. This was achieved through increased unit sales in growing markets, in addition to marketing measures, efficiency improvements across management, and diligent cost reduction efforts. As a result, consolidated net revenues increased by 2,341.2 billion yen (or 9.8%) to 26,289.2 billion yen and consolidated operating income increased by 31.7 billion yen (or 1.4%) to 2,270.3 billion yen, compared with FY2007. Consolidated net income for FY2008 increased by 73.8 billion yen (or 4.5%) to 1,717.8 billion yen, compared with FY2007. The breakdown of consolidated net revenues is as follows: Yen in millions ------------------------------------------------------------------------------- FY2008 FY2007 (April 2007 (April 2006 through through Increase Change March 2008) March 2007) (Decrease) (%) ------------------------------------------------------------------------------- Vehicles 20,723,588 18,751,807 1,971,781 10.5 --------------------------------------------------------------------------- Parts & 342,244 334,619 7,625 2.3 components for overseas production --------------------------------------------------------------------------- Parts 1,785,684 1,551,969 233,715 15.1 --------------------------------------------------------------------------- Other 1,308,738 1,275,773 32,965 2.6 --------------------------------------------------------------------------- Total Automotive 24,160,254 21,914,168 2,246,086 10.2 ------------------------------------------------------------------------------- Financial Services 1,468,730 1,277,994 190,736 14.9 ------------------------------------------------------------------------------- Other 660,256 755,929 (95,673) (12.7) ------------------------------------------------------------------------------- Total 26,289,240 23,948,091 2,341,149 9.8 ------------------------------------------------------------------------------- Notes: 1. Consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. 2. The amounts represent net revenues from external customers. 3. Net revenues do not include consumption taxes, etc. 6 Capital Expenditures With respect to capital expenditures, Toyota introduced an innovative production line at the Takaoka Plant to rapidly enhance not only product efficiency but also energy efficiency. Toyota also made active investments to construct new overseas plants and launch new products, and increased production capacity to respond to customer demand. As the result, total consolidated capital expenditures for FY2008 was 1,480.2 billion yen. (2) Funding Capital investment in the automobile business is mainly financed with funds gained from business operations. Funds necessary for the financial services business are mainly financed through the issuance of bonds, medium-term notes and commercial papers. The balance of debt as of the end of FY2008 was 12,210 billion yen. (3) Consolidated Financial Summary Yen in millions unless otherwise stated ----------------------------------------------------------------------------- FY2005 FY2006 FY2007 FY2008 (April 2004 (April 2005 (April 2006 (April 2007 through through through through March 2005) March 2006) March 2007) March 2008) ----------------------------------------------------------------------------- Net revenues 18,551,526 21,036,909 23,948,091 26,289,240 ----------------------------------------------------------------------------- Operating income 1,672,187 1,878,342 2,238,683 2,270,375 ----------------------------------------------------------------------------- Net income 1,171,260 1,372,180 1,644,032 1,717,879 ----------------------------------------------------------------------------- Net income per share - Basic (yen) 355.35 421.76 512.09 540.65 ----------------------------------------------------------------------------- Shareholders' equity 9,044,950 10,560,449 11,836,092 11,869,527 ----------------------------------------------------------------------------- Total assets 24,335,011 28,731,595 32,574,779 32,458,320 ----------------------------------------------------------------------------- (4) Issues to be Addressed Although we expect overall steady growth of the world economy to continue mainly in resource-rich countries and emerging countries, we face a variety of risks in the future business environment, including further slowdown of the economy in the United States, fluctuations in exchange rates and the stock market, and higher energy and raw material prices. It is also necessary to pay close attention to higher downside risk of the Japanese economy whose recovery is at a standstill. In the automotive industry, especially in resource-rich countries and emerging countries which are expected to continue to grow, competition with respect to compact cars and low-price cars is becoming increasingly fierce among leading global and regional auto makers. In addition, environmental regulations are being strengthened throughout the world and environmental awareness is on the rise, leading to intense global competition in the development of technologies and the introduction of new products. 7 To put in place a solid foundation while continuing to achieve further growth amidst these severe circumstances, Toyota Group will make combined efforts to address the following agenda. First, one short-term issue is the stimulation of the Japanese market through the introduction of market-creating products that anticipate customer needs and the implementation of demand-generating strategies that will promote stronger interest in automobiles. Overseas, on the other hand, we will make every effort to ensure the smooth start up of our new plants, meet the needs of resource-rich countries and emerging countries, and through further development of the foundation of production, purchasing, and sales structures, promote corporate activities that are rooted in the local regions. With respect to quality, by implementing "jikotei kanketsu (the concept of defect-free process completion to ensure that no defective product leaves any production process)", we will strive to maintain and enhance quality at the world's highest level and raise cost competitiveness to support high-quality and sustainable growth. Further, based on the belief that the development of human resources is fundamental to corporate competitiveness, Toyota is engaged in the training of highly-creative personnel that will pass on Toyota's manufacturing technologies, skills and values to the next generation. Medium- to long-term challenges include achieving sustainability in 3 areas--"Technology", "Manufacturing" and "Social Contribution". First, with respect to "Technology", we will make even greater efforts on development of cutting-edge technologies and commercialization related to the environment, energy and safety. Specifically, we are working towards the practical use of plug-in hybrid vehicles that can be charged from household power supplies and focusing on developing diesel engines by strengthening our alliance with Isuzu Motors Limited. We are also focusing more on the development of next-generation batteries that can be used in a variety of ways, the use of biofuel as an alternative fuel source, and the development of fuel cell vehicles. In non-automotive fields, Toyota plans to further contribute to society and the earth through technological innovations, including the development of partner robots designed to function as personal assistants. Second, with regard to "Manufacturing", we are reinforcing our "sustainable plant initiatives" which include the installation of innovative production lines that can achieve dramatic increase in productivity and energy savings by using renewable natural energy sources such as solar or wind power. Finally, in the concept of our "Social Contribution", we are undertaking social contribution activities from a global perspective in 4 fields--environment, traffic safety, human resources development and arts/culture and achieving a harmonious society--to create a prosperous society and achieve sustainable social development, with the goal of being a good corporate citizen. By addressing these agenda, Toyota is working to enhance its corporate value as a company with energy and dignity and maintain growth in harmony with society rooted in "manufacturing" over the 21st century. Toyota fulfills its social responsibilities by carrying out its Corporate Social Responsibility (CSR) through philanthropic activities undertaken through corporate ethics including full compliance with applicable laws and regulations. In FY2008, we celebrated its 70th anniversary, thanks to the support and patronage of its shareholders, customers and other persons concerned. On this memorable occasion, we established "Global Vision 2020," a depiction of the future that we will strive to achieve: a future where we are the "No. 1 company 8 in town," a company loved and regarded with pride locally in all our locations worldwide through continuous growth, hand in hand with each local community. To realize this vision, we will once again look back at where we started, forge solid footing, and build the foundation for new growth. We sincerely hope that our shareholders will continue to extend their patronage and support to us. (5) Policy on Distribution of Surplus by Resolution of the Board of Directors TMC deems the benefit of its shareholders as one of its priority management policies and continuously strives to increase per-share earnings, through aggressively promoting its business while improving and strengthening its corporate foundations. With respect to the payment of dividends, TMC aims to achieve a consolidated dividend payout ratio of 30% at an early stage, as well as to strive for continuous growth of dividend per share, while giving due consideration to factors such as business results for each term and new investment plans. Furthermore, TMC repurchases its own shares to improve capital efficiency and to respond appropriately to changes in the business environment. As TMC anticipates the continued growth of worldwide automotive markets, TMC will utilize its internal funds to invest in improvement of product performance and development of next-generation technologies to achieve future growth, to develop production and sales networks in both domestic and overseas markets for further expansion of its global business and to expand into new business areas, while securing a solid management foundation. TMC pays dividends twice a year -- an interim dividend and a year-end dividend -- and in order to secure an opportunity to directly seek shareholders' opinions, TMC will treat payments of year-end dividends as a matter to be resolved at the FY2008 Ordinary General Shareholders' Meeting, even though TMC's articles of incorporation stipulate that retained earnings can be distributed as dividends pursuant to the resolution of the board of directors. Similarly, TMC will treat repurchase of its own shares as a matter to be resolved at the same meeting. [GRAPHIC OMITTED] 9 (6) Main Business ---------------------------------------------------------------------- Business Main products ---------------------------------------------------------------------- LS, LS600h, GS, GS450h, ES, IS, IS F, SC, LX, GX, RX, RX400h Century, Crown, Mark X, Avalon, Camry, Camry Hybrid, Comfort, Premio, Allion, Avensis, Prius, Passenger Corolla, Belta, Vios, Solara, Scion tC, vehicles BLADE, Matrix, Auris, Raum, Ractis, bB, Porte, ist, Vitz, Passo, Aygo, Mark X Zio, Succeed wagon, Probox Wagon, Automotive Estima, Estima Hybrid, Sienna, Isis, Operations Ipsum, Innova, WISH, SIENTA, AVANZA, Alphard, Alphard Hybrid, Hiace wagon, Noah, Voxy, Land Cruiser wagon, Sequoia, Hilux Surf, Harrier, Harrier Hybrid, Highlander, Highlander Hybrid, Fortuner, FJ Cruiser, Vanguard, RAV4, Rush, Volkswagen vehicles, etc. ---------------------------------------------------------- Succeed Van, Probox Van, Hiace, Regius Trucks and Ace Van, Quick Delivery, Townace, buses Liteace, Tundra, Tacoma, Hilux, Dyna, Toyoace, Land Cruiser, Coaster, etc. ---------------------------------------------------------- Parts & Various units and parts for overseas components production for overseas production ---------------------------------------------------------- Parts Various maintenance parts for both domestic and overseas use ---------------------------------------------------------------------- Financial Services Auto sales financing, leasing, etc. Operations ---------------------------------------------------------------------- Espacio GX, Espacio Mezzo, Espacio EF Urban Wind, Espacio EF3, Espacio EF, Other Since Aventino, Since AIII, Since Operations Housing Vietrois, Since AII, Since Raison, Since Cada, Since Smart Stage mew, Since piana, Vie a, Crest, T-fine, M&f, NS, DS, ZELK, Season Stage, T Stage, etc. ---------------------------------------------------------------------- * Hino brand products (trucks and buses) and Daihatsu brand products (mini-vehicles and passenger vehicles) are not included in the above table. 10 (7) Main Sites [Toyota] ------------------------------------------------------------------- Name Location ------------------------------------------------------------------- Head Office Aichi Prefecture Tokyo Head Office Tokyo Nagoya Office Aichi Prefecture Honsha Plant Aichi Prefecture Motomachi Plant Aichi Prefecture Kamigo Plant Aichi Prefecture Takaoka Plant Aichi Prefecture Miyoshi Plant Aichi Prefecture Tsutsumi Plant Aichi Prefecture Myochi Plant Aichi Prefecture Shimoyama Plant Aichi Prefecture Kinu-ura Plant Aichi Prefecture Tahara Plant Aichi Prefecture Teiho Plant Aichi Prefecture Hirose Plant Aichi Prefecture Higashi-Fuji Technical Center Shizuoka Prefecture ------------------------------------------------------------------- [Domestic and overseas subsidiaries] Please see section "(9) Status of Principal Subsidiaries." (8) Employees ------------------------------------------------------------------- Number of employees Change from end of FY2007 ------------------------------------------------------------------- 316,121 +16,727 ------------------------------------------------------------------- 11 (9) Status of Principal Subsidiaries -------------------------------------------------------------------------------- Percentage Capital/ ownership Company name Location subscription interest Main business -------------------------------------------------------------------------------- Japan million yen Toyota Financial Aichi 78,525 100.00 Management of Services Prefecture domestic and Corporation overseas financial companies,etc. Hino Motors, Ltd. Tokyo 72,717 50.21* Manufacture and sales of automobiles Toyota Motor Fukuoka 45,000 100.00 Manufacture and Kyushu, Inc. Prefecture sales of automobiles Daihatsu Motor Osaka 28,404 51.36* Manufacture and Co., Ltd. Prefecture sales of automobiles Toyota Finance Tokyo 16,500 100.00* Finance of Corporation automobile sales, card business Toyota Auto Body Aichi 10,371 56.28* Manufacture and Co., Ltd. Prefecture sales of automobile bodies Kanto Auto Works, Kanagawa 6,850 50.47* Manufacture and Ltd. Prefecture sales of automobile bodies -------------------------------------------------------------------------------- North America in thousands Toyota Motor U.S.A. USD 1,958,949 100.00* Management of Engineering & manufacturing Manufacturing companies in North America, Inc. North America Toyota Motor U.S.A. USD 1,180,000 100.00* Manufacture and Manufacturing, sales of Kentucky, Inc. automobiles Toyota Motor U.S.A. USD 1,005,400 100.00* Government, North America, public affairs Inc. and research of North America Toyota Motor U.S.A. USD 915,000 100.00* Finance of Credit Corporation automobile sales Toyota Motor U.S.A. USD 620,000 100.00* Manufacture and Manufacturing, sales of Indiana, Inc. automobiles Toyota Motor U.S.A. USD 510,000 100.00* Manufacture and Manufacturing, sales of Texas, Inc. automobiles Toyota Motor U.S.A. USD 365,000 100.00* Sales of Sales, U.S.A., automobiles Inc. Toyota Motor Canada CAD 680,000 100.00 Manufacture and Manufacturing sales of Canada Inc. automobiles Toyota Credit Canada CAD 60,000 100.00* Finance of Canada Inc. automobile sales -------------------------------------------------------------------------------- Europe in thousands Toyota Motor Belgium EUR 2,524,346 100.00 Management of Europe NV/SA all European affiliates Toyota Motor France EUR 380,078 100.00* Manufacture and Manufacturing sales of France S.A.S. automobiles Toyota Motor Italy EUR 38,958 100.00* Sales of Italia S.p.A. automobiles Toyota Kreditbank Germany EUR 30,000 100.00* Finance of GmbH automobile sales Toyota Espana, Spain EUR 10,907 100.00* Sales of S.L. automobiles Toyota Germany EUR 5,726 100.00* Sales of Deutschland GmbH automobiles Toyota France S.A. France EUR 2,123 100.00* Sales of automobiles Toyota Motor Netherlands EUR 908 100.00* Loans to Finance overseas Toyota (Netherlands) B.V. related companies -------------------------------------------------------------------------------- 12 -------------------------------------------------------------------------------- Percentage Capital/ ownership Company name Location subscription interest Main business -------------------------------------------------------------------------------- Europe in thousands Toyota Motor U.K. GBP 300,000 100.00* Manufacture and Manufacturing sales of (UK) Ltd. automobiles Toyota (GB) PLC U.K. GBP 2,600 100.00* Sales of automobiles OOO "TOYOTA MOTOR" Russia RUB 29,369 100.00* Sales of automobiles Toyota Motor Turkey TRY 150,165 90.00* Manufacture and Manufacturing sales of Turkey Inc. automobiles -------------------------------------------------------------------------------- Asia in thousands P.T. Toyota Motor Indonesia IDR 19,523,503 95.00 Manufacture and Manufacturing sales of Indonesia automobiles Toyota Motor Asia Singapore SGD 6,000 100.00 Sales of Pacific Pte Ltd. automobiles Toyota Motor Thailand THB 7,520,000 86.43 Manufacture and Thailand Co., Ltd. sales of automobiles Toyota Leasing Thailand THB 6,000,000 79.17* Finance of (Thailand) Co., automobile Ltd. sales Toyota Motor Asia Thailand THB 1,300,000 100.00* Production Pacific support for Engineering and entities in Manufacturing Asia and Co., Ltd. Oceania -------------------------------------------------------------------------------- Other in thousands Toyota Motor Australia AUD 481,100 100.00 Manufacture and Corporation sales of Australia Ltd. automobiles Toyota Finance Australia AUD 120,000 100.00* Finance of Australia Ltd. automobile sales Toyota do Brasil Brazil BRL 709,980 100.00 Manufacture and Ltda. sales of automobiles Toyota South South Africa ZAR 50 100.00* Manufacture and Africa Motors sales of (Pty) Ltd. automobiles -------------------------------------------------------------------------------- Notes: 1. * Indicates that the ownership interest includes such ratio of the subsidiaries. 2. The ownership interests are calculated based on the total number of shares issued at the end of the fiscal year. 3. On April 1, 2007, Toyota Technical Center Asia Pacific (Thailand), Co., Ltd. merged with Toyota Motor Asia Pacific Co., Ltd. (Thailand), and changed its name to Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. 13 2. Status of Shares (1) Total Number of Shares Authorized 10,000,000,000 shares (2) Total Number of Shares Issued 3,447,997,492 shares (3) Number of Shareholders 522,135 (4) Shareholders Holding One Tenth or More of the Total Number of Shares Issued (excluding treasury stock) Not applicable; therefore, the list of top 10 shareholders of Toyota is disclosed below. -------------------------------------------------------------------------------- Investment in the Company by the Shareholders ----------------------------------------------- Number of shares Ownership Interest Name of Shareholders (1,000 shares) (%) -------------------------------------------------------------------------------- The Master Trust Bank of Japan, Ltd. 217,049 6.89 -------------------------------------------------------------------------------- Japan Trustee Services Bank, Ltd. 216,780 6.88 -------------------------------------------------------------------------------- Toyota Industries Corporation 200,195 6.36 -------------------------------------------------------------------------------- Nippon Life Insurance Company 131,653 4.18 -------------------------------------------------------------------------------- Hero and Company 121,480 3.86 -------------------------------------------------------------------------------- Trust & Custody Services Bank, Ltd. 105,072 3.34 -------------------------------------------------------------------------------- State Street Bank and Trust Company 97,459 3.09 -------------------------------------------------------------------------------- Tokio Marine & Nichido Fire 83,821 2.66 Insurance Co., Ltd. -------------------------------------------------------------------------------- Mitsui Sumitomo Insurance Company, 65,166 2.07 Limited -------------------------------------------------------------------------------- DENSO Corporation 58,678 1.86 -------------------------------------------------------------------------------- Notes: 1. Hero and Company is the nominee of the Bank of New York, which is the Depositary for holders of the Corporation's American Depositary Receipts (ADRs). 2. Percentage of equity participation is calculated excluding treasury stock (298,717,000 shares). (5) Other Significant Matters Pertaining to Shares As a result of cancellation of TMC's own shares on March 31, 2008, the total number of shares issued decreased by 162,000,000 shares. TMC, meanwhile, repurchased 49,364,000 own shares and disposed of 792,000 shares of treasury stock by transferring treasury stock upon exercise of Stock Acquisition Rights during FY2008. 14 3. Status of Stock Acquisition Rights, Etc. (1) Status of Stock Acquisition Rights as of the End of FY2008 1) Number of Stock Acquisition Rights issued: 102,357 2) Type and Number of Shares to be Issued or Transferred upon Exercise of Stock Acquisition Rights 10,235,700 shares of common stock of TMC (The number of shares to be issued or transferred upon exercise of one Stock Acquisition Right is 100). 3) Stock Acquisition Rights held by TMC's Directors and Corporate Auditors ---------------------------------------------------------------------------- Series Expiration Number of Stock Number of (Exercise price) Date Acquisition Rights holders ---------------------------------------------------------------------------- Directors 2nd (3,116 yen) July 31, 2009 1,443 18 ---------------------------------------------------------------------------- 3rd (4,541 yen) July 31, 2010 1,818 15 ---------------------------------------------------------------------------- 4th (4,377 yen) July 31, 2011 3,897 26 ---------------------------------------------------------------------------- 5th (6,140 yen) July 31, 2014 9,100 29 ---------------------------------------------------------------------------- 6th (7,278 yen) July 31, 2015 9,900 29 ---------------------------------------------------------------------------- Corporate Auditors 2nd (3,116 yen) July 31, 2009 43 1 ---------------------------------------------------------------------------- 3rd (4,541 yen) July 31, 2010 100 1 ---------------------------------------------------------------------------- 4th (4,377 yen) July 31, 2011 100 1 ---------------------------------------------------------------------------- Notes: 1. There are no Stock Acquisition Rights exercisable by Directors who retired during the period between the day after the FY2007 Ordinary General Shareholders' Meeting and the end of FY2008. 2. The Stock Acquisition Rights held by Corporate Auditors in the above table have been acquired prior to their assumption of office and are exercisable by Corporate Auditors. 15 (2) Status of Stock Acquisition Rights Issued during FY2008 1) Number of Stock Acquisition Rights issued: 32,640 2) Type and number of shares to be issued or transferred upon exercise of Stock Acquisition Rights 3,264,000 shares of common stock of TMC (The number of shares to be issued or transferred upon exercise of one Stock Acquisition Right is 100). 3) Issue price of Stock Acquisition Rights Stock Acquisition Rights shall be issued without consideration. 4) Amount to be paid upon exercise of Stock Acquisition Rights 7,278.00 yen 5) Conditions of exercise of Stock Acquisition Rights (i) The exercise period of the Stock Acquisition Rights is from August 1, 2009 to July 31, 2015. (ii) Stock Acquisition Right may not be partially exercised. (iii) The grantees of the Stock Acquisition Rights must, at the time of the closing of the Ordinary General Shareholders' Meeting to be held for the last fiscal year ending within two (2) years after the closing of the FY2007 Ordinary General Shareholders' Meeting, be a Director, Managing Officer, employee, etc. of TMC or its affiliates to which the grantee belongs at the time such rights are granted. (iv) The grantee of the Stock Acquisition Rights may exercise his or her Stock Acquisition Rights for up to two (2) years after the grantee loses his or her position as a Director, Managing Officer or an employee, etc. of TMC or its affiliates to which the grantee belongs at the time of such rights are granted. However, if the grantee loses such position due to retirement of office or resignation for personal reasons, or removal from office or dismissal, the Stock Acquisition Rights will expire immediately. (v) Stock Acquisition Rights may not be inherited. (vi) Other exercise conditions shall be provided for in "Agreement for the Grant of Options to acquire common shares of Toyota Motor Corporation" between TMC and the grantees of the Stock Acquisition Rights. 6) Events and conditions of acquisition of Stock Acquisition Rights by TMC Stock Acquisition Rights may be acquired by TMC without consideration, on a date that shall be provided by the Board of Directors, if the Ordinary General Shareholders' Meeting approves a proposal on a merger agreement in which TMC will be dissolved, or a proposal on a share exchange agreement or a share transfer by which TMC will become a wholly-owned subsidiary of another company. 16 7) Details of Preferential Conditions TMC issued Stock Acquisition Rights without consideration to Directors, Managing Officers and employees, etc., of TMC and its affiliates. 8) Breakdown of Stock Acquisition Rights granted to Managing Officers, engineers and employees of TMC, Officers and employees of TMC's subsidiaries, and employees of TMC's affiliates --------------------------------------------------------------------------- Type and number of Number of shares to be issued or Stock transferred upon the Total number of Acquisition exercise of Stock persons in which Rights Acquisition Rights Stock Acquisition (common stock) Rigths were granted --------------------------------------------------------------------------- Managing 9,400 940,000 shares 47 Officers of TMC --------------------------------------------------------------------------- Engineers 400 40,000 shares 4 of TMC --------------------------------------------------------------------------- Employees 9,790 979,000 shares 443 of TMC --------------------------------------------------------------------------- Officers 2,770 277,000 shares 81 and employees of TMC's subsidiaries --------------------------------------------------------------------------- Employees 80 8,000 shares 4 of TMC's affiliates --------------------------------------------------------------------------- 17 4. Status of Directors and Corporate Auditors (1) Directors and Corporate Auditors ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Fujio Cho *Chairman of the - Director of Toyota Motor Sales, Board U.S.A., Inc. - Corporate Auditor of DENSO CORPORATION - Director of Central Japan Railway Company - Director of Toyota Motor Europe NV/SA - Director of Toyota Motor North America, Inc. - Chairman of Japan Automobile Manufacturers Association, Inc. - Director of Sony Corporation ----------------------------------------------------------------------------------------------------------------------- Katsuhiro Nakagawa *Vice Chairman of - Director of Toyota Motor Sales, the Board U.S.A., Inc. - Director of Toyota Motor Europe NV/SA - Director of Toyota Motor North America, Inc. - Corporate Auditor of Shochiku Co., Ltd. - Corporate Auditor of Aichi Steel Corporation ----------------------------------------------------------------------------------------------------------------------- Katsuaki Watanabe *President, Member - Director of Mitsubishi UFJ of the Board Securities Co., Ltd. - Corporate Auditor of KDDI CORPORATION - Corporate Auditor of Toyota Financial Services Corporation - Director of Toyota Motor Sales, U.S.A., Inc. - Director of Toyota Motor Europe NV/SA - Director of Toyota Motor North America, Inc. - Corporate Auditor of Toyota Industries Corporation - Director of Toyota Motor Engineering & Manufacturing North America, Inc. ----------------------------------------------------------------------------------------------------------------------- Tokuichi Uranishi *Executive Vice - Global Planning Operations - Chairman of Toyota Motor Europe President, Member of - Overseas (Americas, Europe & NV/SA the Board Africa, China, Asia, Oceania & - Director of Toyota Financial Middle East) Services Corporation - Director of Toyota Motor Sales, U.S.A., Inc. - Chairman of Toyota Motor North America, Inc. - Director of Toyota Motor Asia Pacific Pte Ltd. - Director of Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. -----------------------------------------------------------------------------------------------------------------------
18 ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Kazuo Okamoto *Executive Vice - Research & Development (R & D - Director of Toyota Boshoku President, Member of Management, Technical Corporation the Board Administration, Design, Product - Corporate Auditor of Toyoda Gosei Development, Vehicle Co., Ltd. Engineering, Motor Sports) - Director of Toyota Motor Europe - Technical Administration Group NV/SA (Chief Officer) - Director of Toyota Motor - Design Group (Chief Officer) Engineering & Manufacturing North - Vehicle Engineering Group America, Inc. (Chief Officer) - Motor Sports Div. ----------------------------------------------------------------------------------------------------------------------- Kyoji Sasazu *Executive Vice - Business Development - Corporate Auditor of JTEKT President, Member of - Purchasing Corporation the Board - Housing ----------------------------------------------------------------------------------------------------------------------- Mitsuo Kinoshita *Executive Vice - Corporate Planning, Research - Director of Toyota Financial President, Member of - Government & Public Affairs Services Corporation the Board - General Affairs (Global Audit, - Corporate Auditor of Aichi Steel General Administration & Human Corporation Resources, Finance & - Director of Toyota Motor Sales, Accounting, Information Systems) U.S.A., Inc. - CSR & Environmental Affairs - Director of Toyota Motor - Information System Group (Chief Engineering & Manufacturing North Officer) America, Inc. - Global Audit Dept. - Director of Toyota Motor Europe NV/SA o Director of New United Motor Manufacturing, Inc. - Director of Aioi Insurance Co., Ltd. ----------------------------------------------------------------------------------------------------------------------- Takeshi Uchiyamada *Executive Vice - Production - Director of Toyota Motor President, Member of - TQM Engineering & Manufacturing North the Board America, Inc. - Chairman of Toyota Motor Technical Center (China) Co.,Ltd. - Director of Toyota Motor Europe NV/SA - Director of JTEKT Corporation ----------------------------------------------------------------------------------------------------------------------- Masatami Takimoto *Executive Vice - Quality President, Member of - Research & Development (Power the Board Train, Future Project) - Fuel Cell System Development - Fuel Cell System Development Group (Chief Officer) - Future Project Div. -----------------------------------------------------------------------------------------------------------------------
19 ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Akio *Executive Vice - Product Management o Director of New United Motor Toyoda President, Member of - IT & ITS Manufacturing, Inc. the Board - Global Planning Operations - Director of Toyota Financial - Japan Sales Services Corporation - Customer Service - Chairman of Digital Media Asia - Quality Pacific Ltd. - IT & ITS Group (Chief Officer) - Corporate Auditor of SHIROKI - e-TOYOTA Div. CORPORATION - Director of Toyota Motor Europe NV/SA - Corporate Auditor of Toyota Boshoku Corporation - Director of Toyota Motor North America, Inc. - Director of Toyota Motor Sales, U.S.A., Inc. - Director of Toyota Motor Asia Pacific Pte Ltd. ----------------------------------------------------------------------------------------------------------------------- Yukitoshi Funo Senior Managing - The Americas Operations Group - Vice President of Calty Design Director, Member of (Chief Officer) Research, Inc. the Board - Chairman of Toyota Motor Sales, - Director of Toyota Motor U.S.A., Inc. Engineering & Manufacturing North America, Inc. - Director of Toyota Motor Credit Corporation - President of Toyota Logistics Services, Inc. - President of Toyota Motor Personnel Services, U.S.A., Inc. - Director of Toyota Motor North America, Inc. ----------------------------------------------------------------------------------------------------------------------- Takeshi Suzuki Senior Managing - Business Development Group - Director of Toyota Financial Director, Member of (Chief Officer) Services Corporation the Board - Accounting Group (Chief Officer) - Corporate Auditor of Toyota Motor Kyushu, Inc. - Corporate Auditor of HAMAMATSU PHOTONICS K.K. - Director of Toyota Motor Credit Corporation - Corporate Auditor of P.T. Toyota Motor Manufacturing Indonesia ----------------------------------------------------------------------------------------------------------------------- Atsushi Niimi Senior Managing - Purchasing Group (Chief Officer) - Director of Toyota Motor Director, Member of Engineering & Manufacturing North the Board America, Inc. - Corporate Auditor of KYOWA LEATHER CLOTH CO., LTD. ----------------------------------------------------------------------------------------------------------------------- Hiroshi Takada Senior Managing - Global Planning Operations Director, Member of Group (Chief Officer) the Board - Product Management Div. ----------------------------------------------------------------------------------------------------------------------- Teiji Tachibana Senior Managing - Government & Public Affairs - Chairman and Representative Director, Member of Group (Chief Officer) Director of Toyota Housing the Board - Housing Group (Chief Officer) Corporation - Director of MISAWA HOMES CO., LTD. -----------------------------------------------------------------------------------------------------------------------
20 ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Shinichi Sasaki Senior Managing - Quality Group (Chief Officer) Director, Member of the Board ----------------------------------------------------------------------------------------------------------------------- Akira Okabe Senior Managing - Asia, Oceania & Middle East - Chairman of Toyota Motor Asia Director, Member of Operations Group (Chief Officer) Pacific Pte Ltd. the Board - Director of Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. ----------------------------------------------------------------------------------------------------------------------- Yoichiro Ichimaru Senior Managing - Japan Sales Operations Group Director, Member of (Chief Officer) the Board ----------------------------------------------------------------------------------------------------------------------- Shoji Ikawa Senior Managing - Fuel Cell System Development Director, Member of Group (Deputy Chief Officer) the Board - Production Engineering Group (Chief Officer) ----------------------------------------------------------------------------------------------------------------------- Koichi Ina Senior Managing - Strategic Production Planning - Director of Toyota Motor Kyushu, Director, Member of Group (Chief Officer) Inc. the Board - Manufacturing Group (Chief - Corporate Auditor of CHUO SPRING Officer) CO., LTD. - TQM Promotion Div. - Chairman of Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. - Chairman of Toyota Motor Engineering & Manufacturing North America, Inc. - Director of Toyota Motor Manufacturing Canada Inc. - Director of Toyota Motor Asia Pacific Pte Ltd. ----------------------------------------------------------------------------------------------------------------------- Takeshi Yoshida Senior Managing - Product Development Group - Corporate Auditor of TOKAI RIKA Director, Member of (Chief Officer) CO., LTD. the Board - Corporate Auditor of Toyota Motor Kyushu, Inc. ----------------------------------------------------------------------------------------------------------------------- Shinzo Kobuki Senior Managing - Power Train Development Group - Director of HAMAMATSU PHOTONICS Director, Member of (Chief Officer) K.K. the Board - R&D Management Div. ----------------------------------------------------------------------------------------------------------------------- Akira Sasaki Senior Managing - China Operations Group (Chief - Vice Chairman of FAW Toyota Motor Director, Member of Officer) Sales Co., Ltd. the Board - Chairman of Toyota Motor - Vice Chairman of FAW Toyota (China) Investment Co., Ltd. (Changchun) Engine Co., Ltd. - Chairman of Guangqi Toyota Engine Co., Ltd. - Vice Chairman of Guangzhou Toyota Motor Co., Ltd. - Vice Chairman of Sichuan FAW Toyota Motor Co., Ltd. - Vice Chairman of Tianjin FAW Toyota Engine Co., Ltd. - Vice Chairman of Tianjin FAW Toyota Motor Co., Ltd. - Chairman of Toyota FAW (Tianjin) Dies Co., Ltd. - Vice Chairman of Tong Fang Global Logistics Co., Ltd - Vice Chairman of Toyota Motor Technical Center(China) Co.,Ltd. -----------------------------------------------------------------------------------------------------------------------
21 ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Hiroshi Kawakami Senior Managing - Customer Service Operations - President and Representative Director, Member of Group (Chief Officer) Director of J-TACS CORPORATION the Board ----------------------------------------------------------------------------------------------------------------------- Tadashi Arashima Senior Managing - Europe & Africa Operations Director, Member of Group (Chief Officer) the Board - President of Toyota Motor Europe NV/SA ----------------------------------------------------------------------------------------------------------------------- Mamoru Furuhashi Senior Managing - Government & Public Affairs Director, Member of Group (Deputy Chief Officer) the Board ----------------------------------------------------------------------------------------------------------------------- Satoshi Ozawa Senior Managing - General Administration & Human - President and Representative Director, Member of Resources Group (Chief Officer) Director of Toyota Personnel the Board - Corporate Planning Div. Support Corporation - Research Div. - President and Representative - CSR & Environmental Affairs Div. Director of OJT Solutions Co., Ltd. ----------------------------------------------------------------------------------------------------------------------- Shoichiro Toyoda Honorary Chairman, - Director of DENSO CORPORATION Member of the Board - Corporate Auditor of Aisin Seiki Co., Ltd. - Director of Toyota Motor Sales, U.S.A., Inc. - Representative Director of Toyota Central Research and Development Laboratories, Incorporated - Representative Director of Genesis Research Institute, Incorporated - Chairman and Representative Director of Towa Real Estate Co., Ltd. - Director of Toyota Motor Europe NV/SA - Director of Toyota Motor North America, Inc. ----------------------------------------------------------------------------------------------------------------------- Hiroshi Okuda Senior Advisor, - Director of Toyota Motor Sales, Member of the Board U.S.A., Inc. - Director of KDDI CORPORATION - Director of Toyota Motor Europe NV/SA - Director of Toyota Motor North America, Inc. - Corporate Auditor of Toyota Industries Corporation ----------------------------------------------------------------------------------------------------------------------- Yoshikazu Amano Full-time Corporate Auditor ----------------------------------------------------------------------------------------------------------------------- Chiaki Yamaguchi Full-time Corporate - Corporate Auditor of Toyota Auditor Financial Services Corporation ----------------------------------------------------------------------------------------------------------------------- Masaki Nakatsugawa Full-time Corporate Auditor ----------------------------------------------------------------------------------------------------------------------- Yoichi Kaya Corporate Auditor - Assistant Director of Research Institute of Innovative Technology for the Earth - Outside Corporate Auditor of NIPPON STEEL CORPORATION -----------------------------------------------------------------------------------------------------------------------
22 ----------------------------------------------------------------------------------------------------------------------- Name Position Main areas of responsibility Other executive duties ----------------------------------------------------------------------------------------------------------------------- Yoichi Morishita Corporate Auditor - Executive Advisor of Matsushita Electric Industrial Co., Ltd. - Outside Corporate Auditor of The Kansai Electric Power Co., Inc. ----------------------------------------------------------------------------------------------------------------------- Akishige Okada Corporate Auditor - Corporation Advisor of Sumitomo Mitsui Banking Corporation - Outside Director of Sony Corporation - Outside Director of MITSUI & CO., LTD. - Outside Corporate Auditor of Mitsui Fudosan Co., Ltd. - Outside Director of DAICEL CHEMICAL INDUSTRIES, LTD. ----------------------------------------------------------------------------------------------------------------------- Kunihiro Matsuo Corporate Auditor - Attorney - Outside Corporate Auditor of ASAHI GLASS CO., LTD. -----------------------------------------------------------------------------------------------------------------------
Notes: 1. * Representative Director 2. Mr. Yoichi Kaya, Mr. Yoichi Morishita, Mr. Akishige Okada and Mr. Kunihiro Matsuo, all of whom are Corporate Auditors are Outside Corporate Auditors as provided in Article 2, Item 16 of the Corporation Act. 3. Mr. James E. Press, Senior Managing Director, retired on September 14, 2007. 4. The company marked with o operates in the same business category as TMC. 5. The "other executive duties" are listed chronologically, in principle, based on the dates the executives assumed their present positions. 6. On April 1, 2007, Toyota Technical Center Asia Pacific (Thailand), Co., Ltd. merged with Toyota Motor Asia Pacific Co., Ltd. (Thailand), and changed its name to Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. 23 (2) Total Amount of Compensation to Directors and Corporate Auditors --------------------------------------------------------------------------- Category Number of persons Total Amount of compensation (plan) (million yen) --------------------------------------------------------------------------- Directors 29 3,538 --------------------------------------------------------------------------- Corporate Auditors (incl. 7 382 Outside (4) (94) Corporate Auditors) --------------------------------------------------------------------------- Total 36 3,920 --------------------------------------------------------------------------- Notes: 1. The numbers of persons are as of the end of FY2008. 2. The compensation includes the following amounts: (1) Executive bonuses (to be decided by the resolution of the FY2008 Ordinary General Shareholders' Meeting to be held on June 24, 2008) (2) Stock options (decided by the resolution of the FY2006 Ordinary General Shareholders' Meeting held on June 23, 2006, and by the resolution of the FY2007 Ordinary General Shareholders' Meeting held on June 22, 2007) (3) Provision for retirement bonus to Corporate Auditors 3. In accordance with TMC's policy for retirement bonus to Directors, the following amount was recorded in accrued expenses during FY2008. The amount equivalent to the payment of the final retirement bonus to Directors due to the abolishment of the retirement bonus system to Directors (based on the resolution approved at the FY2006 Ordinary General Shareholders' Meeting held on June 23, 2006) 7,404 million yen (3) Status of Outside Corporate Auditors 1) Major activities for FY2008 --------------------------------------------------------------------------- Name Attendance (total attended/total held) --------------------------------------------------------------------------- Yoichi Directors' meetings 14/17 Corporate Auditors' meetings 15/17 Kaya --------------------------------------------------------------------------- Yoichi Directors' meetings 17/17 Corporate Auditors' meetings 17/17 Morishita --------------------------------------------------------------------------- Akishige Directors' meetings 14/17 Corporate Auditors' meetings 14/17 Okada --------------------------------------------------------------------------- Kunihiro Directors' meetings 11/13 Corporate Auditors' meetings 11/13 Matsuo --------------------------------------------------------------------------- Note: The total numbers of meetings held vary due to the difference in the dates of assumption of office. Each Outside Corporate Auditor contributed by giving opinions based on his experience and insight. 24 2) Details of liability limitation agreements Agreements between the Outside Corporate Auditors and TMC to limit liability as stipulated in Article 423, Paragraph 1 of the Corporation Act, with the liability limited to the amount stipulated in Article 425, Paragraph 1 of the Corporation Act. 25 5. Status of Accounting Auditor (1) Name of Accounting Auditor PricewaterhouseCoopers Aarata (2) Compensation to Accounting Auditor for FY2008 1) Total compensation and other amounts paid by Toyota Motor Corporation ("TMC") for the services provided in Article 2, Paragraph 1 of the Certified Public Accountant Law of Japan 1,535 million yen 2) Total amount of cash and other property benefits paid by TMC and its consolidated subsidiaries (together, "Toyota") 2,308 million yen Notes: 1. The amount in 1) above includes compensation for audits performed in compliance with the Financial Instruments and Exchange Law. 2. The amount in 2) above includes compensation for advice and consultation concerning information disclosure that are not included in the services provided in Article 2, Paragraph 1 of the Certified Public Accountant Law of Japan. 3. Among principal subsidiaries of TMC, Kanto Auto Works, Ltd. and overseas subsidiaries are audited by certified public accountants or audit firms other than PricewaterhouseCoopers Aarata. (3) Policy regarding decisions on the dismissal or non-reappointment of the Accounting Auditor It is a policy of TMC that, if it is deemed that the Accounting Auditor will have difficulty in conducting an audit appropriately because of the occurrence of an event stipulated in laws or regulations or an event that interferes with the eligibility or independence of the Accounting Auditor, TMC shall determine whether to dismiss or refrain from reappointing the Accounting Auditor, as needed. 26 6. Basic Policy Regarding the System to Secure the Appropriateness of Business TMC, together with its subsidiaries, has created and maintained a sound corporate climate based on the "Guiding Principles at Toyota" and the "Toyota Code of Conduct." TMC integrates the principles of problem identification and continuous improvement into its business operation process and makes continuous efforts to train employees who will put these principles into practice. Accordingly, TMC has developed its basic policy regarding the following items as stipulated in the Corporation Act: (1) System to ensure that the Directors execute their responsibilities in compliance with relevant laws and regulations and the Articles of Incorporation 1) TMC will ensure that 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 trainings for new Directors. 2) 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. 3) TMC will appropriately discuss significant matters and measures relating to issues such as corporate ethics, compliance, and risk management at the CSR Committee and other meetings. Toyota will also discuss and decide at the meetings of various cross-sectional decision-making bodies policies and systems to monitor and respond to risks relating to organizational function. (2) System to retain and manage information relating to performance of duties by Directors Information relating to exercising duties by Directors shall be appropriately retained and managed by each division in charge pursuant to the relevant internal rules and laws and regulations. (3) Rules and systems related to the management of risk of loss 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. 3) TMC will manage various risks relating to safety, quality, the environment, etc. and compliance by establishing rules or preparing and delivering manuals and by other means, as necessary, in each 27 relevant division. 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. (4) System to ensure that Directors exercise their duties efficiently 1) TMC will manage consistent policies by specifying the policies at each level of the organization based on the medium- to long-term management policies and the Company's policies for each fiscal term. 2) The Chief Officer, as a liaising officer between the management and operational functions, will direct and supervise Managing Officers based on the management policies and delegate the executive authority over each division to the Managing Officers so that flexible and timely decision making can be achieved. 3) TMC, from time to time, will make opportunities to listen to the opinions of various stakeholders, including external experts, and reflect those opinions in TMC's management and corporate activities. (5) System to ensure that employees conduct business in compliance with relevant laws and regulations and the Articles of Incorporation 1) TMC will clarify the responsibilities of each organization unit and maintain a basis to ensure continuous improvements in the system. 2) TMC will continuously review the legal compliance and risk management 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 the CSR Committee and other committees. 3) TMC will promptly obtain information regarding legal compliance and corporate ethics and respond to problems and questions related to compliance through its corporate ethics inquiry office and other channels. (6) System to ensure the appropriateness of business operations of the corporation and the business group consisting of the parent company and subsidiaries 1) TMC will expand the "Guiding Principles at Toyota" and the "Toyota Code of Conduct" to its subsidiaries as Toyota's common charter of conduct, and develop and maintain a sound environment of internal controls for Toyota. TMC will also promote the "Guiding Principles at Toyota" and the "Toyota Code of Conduct" through personal exchange. 2) TMC will manage its subsidiaries in a comprehensive manner 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 appropriateness and legality of the operations of the subsidiaries by exchanging information with those subsidiaries, periodically and as needed. 28 (7) System concerning employees who assist the Corporate Auditors when required TMC will establish a Corporate Auditors Department and assign a number of full-time staff to support this function. (8) Independence of the employees described in the preceding item (7) from Directors Any changes in personnel in the Corporate Auditors Department will require prior consent of the Board of Corporate Auditors or a full-time Corporate Auditor selected by the Board of Corporate Auditors. (9) System for Directors and employees to report to Corporate Auditors, and other relative systems 1) Directors, from time to time, will properly report to the Corporate Auditors any major business operations through the divisions in charge. If any fact that may cause significant damage to the Company is discovered, they will report the matter to the Corporate Auditors immediately. 2) Directors, Managing Officers, and employees will report to Corporate Auditors on the business upon requests by the Corporate Auditors, periodically and as needed. (10) Other systems to ensure that the Corporate Auditors conducted audits effectively TMC will ensure that the Corporate Auditors attend major Board of Directors Meeting, inspect important Company documents, and make opportunities to exchange information between the Corporate Auditors and Accounting Auditor periodically and as needed, as well as appoint external experts. 29 Unconsolidated Financial Statements UNCONSOLIDATED BALANCE SHEETS
(Million yen; amounts less than one million yen are omitted) ------------------------------------------------------------ ------------------------------------------------------------ FY2007 FY2007 FY2008 (Reference) FY2008 (Reference) (As of (As of (As of (As of March 31, 2008) March 31, 2007) March 31, 2008) March 31, 2007) ------------------------------------------------------------ ------------------------------------------------------------ (Assets) (Liabilities) Current assets 4,006,044 4,116,670 Current liabilities 2,571,686 2,730,572 Cash and deposits 59,558 182,855 Trade notes payable 1,216 1,227 Trade accounts receivable 1,211,134 1,254,098 Trade accounts payable 1,060,961 1,035,441 Marketable securities 1,063,032 1,011,348 Current portion of bonds 100,000 150,000 Finished goods 141,468 126,793 Other payables 466,544 467,229 Raw materials 42,134 46,001 Income taxes payable 180,512 283,960 Work in process 92,693 97,592 Accrued expenses 504,426 549,152 Supplies 8,967 8,113 Deposits received 245,318 224,038 Short-term loans 515,159 541,452 Others 12,706 19,523 Deferred tax assets 262,688 292,732 Long-term liabilities 561,716 779,993 Others 619,807 568,682 Bonds 250,000 350,000 Less: allowance for Allowance for doubtful accounts (10,600) (13,000) retirement benefits 279,219 283,032 Fixed assets 6,429,760 6,544,498 Deferred tax liabilities -- 103,593 Property, plant and Others 32,497 43,367 equipment 1,463,669 1,358,160 Total liabilities 3,133,403 3,510,565 Buildings 418,457 414,044 (Net assets) Structures 49,788 41,316 Shareholders' equity 6,986,746 6,593,724 Machinery and equipment 370,800 331,032 Common stock 397,049 397,049 Vehicle and delivery Capital surplus 416,970 417,378 equipment 26,882 21,092 Capital reserve 416,970 416,970 Tools, furniture and Other capital surplus -- 407 fixtures 109,694 92,957 Retained earnings 7,385,407 7,335,143 Land 393,312 385,450 Legal reserve 99,454 99,454 Construction in Other retained earnings 7,285,952 7,235,689 progress 94,732 72,266 Reserve for losses on Investments and other overseas investments 71 117 assets 4,966,090 5,186,338 Reserve for special Investments in depreciation 2,453 3,228 securities 2,318,707 2,595,932 Reserve for reduction Investments in of acquisition cost 8,497 7,554 subsidiaries and of fixed assets affiliates 1,979,011 1,974,239 General reserve 6,340,926 5,740,926 Long-term loans 442,706 473,766 Retained earnings Deferred tax assets 45,549 -- carried forward 934,004 1,483,862 Others 202,614 164,099 Less: treasury stock (1,212,681) (1,555,847) Less: allowance for Valuation and translation doubtful accounts (22,500) (21,700) adjustments 311,472 555,708 Net unrealized gains on other securities 310,604 554,947 Deferred hedge gains or losses 867 760 Stock acquisition rights 4,183 1,171 Total net assets 7,302,401 7,150,603 ------------------------------------------------------------ ------------------------------------------------------------ Total 10,435,805 10,661,169 Total 10,435,805 10,661,169 ------------------------------------------------------------ ------------------------------------------------------------
30 UNCONSOLIDATED STATEMENTS OF INCOME
(Million yen; amounts less than one million yen are omitted) ----------------------------------------------------------------------------------------------------------------------- FY2008 FY2007 (April 1, 2007 through (Reference) March 31, 2008) (April 1, 2006 through March 31, 2007) ----------------------------------------------------------------------------------------------------------------------- Net sales 12,079,264 11,571,834 Cost of sales 9,779,276 9,233,135 Gross profit 2,299,987 2,338,698 Selling, general and administrative expenses 1,191,387 1,187,776 Operating income 1,108,600 1,150,921 Non-operating income 561,548 473,937 Interest income 65,072 34,045 Dividend income 375,554 311,830 Others 120,920 128,061 Non-operating expenses 89,522 69,665 Interest expenses 11,776 11,159 Others 77,745 58,505 Ordinary income 1,580,626 1,555,193 Income before income taxes 1,580,626 1,555,193 Income taxes - current 399,300 474,600 Income taxes - deferred 43,182 20,483 Net income 1,138,144 1,060,109 -----------------------------------------------------------------------------------------------------------------------
31 UNCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS FY2008 (April 1, 2007 through March 31, 2008)
(Million yen; amounts less than one million yen are omitted) --------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity --------------------------------------------------------------------------------------------------- Common Capital surplus Retained earnings stock ----------------------- ------------------------------------------------------------------- Capital Other Total Legal Other retained earnings Total reserve capital capital reserve ------------------------------------------------ retained surplus surplus Reserve Reserve Reserve General Retained earnings for for for reserve earnings losses special reduction carried on depre- of forward overseas ciation acqui- invest- sition ments cost of fixed assets ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Balance as of March 31, 2007 397,049 416,970 407 417,378 99,454 117 3,228 7,554 5,740,926 1,483,862 7,335,143 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Changes during the fiscal year ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for losses on overseas investments (46) 46 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to reserve for special depreciation 493 (493) ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for special depreciation (1,269) 1,269 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to reserve for reduction of acquisition cost of fixed assets 970 (970) ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for reduction of acquisition cost of fixed assets (27) 27 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to general reserve 600,000 (600,000) ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Dividends paid (430,859) (430,859) ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Net income 1,138,144 1,138,144 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Purchase of common stock ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reissuance of common stock 231 231 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Retirement of common stock (638) (638) (657,021) (657,021) ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Net changes of items other than shareholders' equity ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Total changes during the fiscal year - - (407) (407) - (46) (775) 943 600,000 (549,858) 50,264 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Balance as of March 31, 2008 397,049 416,970 - 416,970 99,454 71 2,453 8,497 6,340,926 934,004 7,385,407 ----------------------------- ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- ---------
32
(Million yen; amounts less than one million yen are omitted) ---------------------------------------------------------------------------------------------------------------------------- Shareholders' equity Valuation and translation adjustments Stock Total ---------------------------------------------------------------------- acquisition net Treasury Total Net Deferred Total rights assets stock shareholders' unrealized hedge gains valuation and equity gains on or losses translation other adjustments securities ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Balance as of March 31, 2007 (1,555,847) 6,593,724 554,947 760 555,708 1,171 7,150,603 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Changes during the fiscal year ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for losses on overseas investments ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to reserve for special depreciation ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for special depreciation ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to reserve for reduction of acquisition cost of fixed assets ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for reduction of acquisition cost of fixed assets ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to general reserve ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Dividends paid (430,859) (430,859) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Net income 1,138,144 1,138,144 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Purchase of common stock (317,595) (317,595) (317,595) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reissuance of common stock 3,101 3,332 3,332 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Retirement of common stock 657,660 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Net changes of items other than shareholders' equity (244,343) 107 (244,236) 3,012 (241,224) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Total changes during the fiscal year 343,166 393,022 (244,343) 107 (244,236) 3,012 151,798 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Balance as of March 31, 2008 (1,212,681) 6,986,746 310,604 867 311,472 4,183 7,302,401 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ----------
33 FY2007 (Reference) (April 1, 2006 through March 31, 2007)
(Million yen; amounts less than one million yen are omitted) ---------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity --------------------------------------------------------------------------------------------------- Common Capital surplus Retained earnings stock ----------------------- ------------------------------------------------------------------- Capital Other Total Legal Other retained earnings Total reserve capital capital reserve ------------------------------------------------ retained surplus surplus Reserve Reserve Reserve General Retained earnings for for for reserve earnings losses special reduction carried on depre- of forward overseas ciation acqui- invest- sition ments cost of fixed assets ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Balance as of March 31, 2006 397,049 416,970 - 416,970 99,454 197 3,196 6,586 5,340,926 1,164,506 6,614,868 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Changes during the fiscal year ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for losses on overseas investments (79) 79 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to reserve for special depreciation 830 (830) ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for special depreciation (798) 798 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to reserve for reduction of acquisition cost of fixed assets 992 (992) ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reversal of reserve for reduction of acquisition cost of fixed assets (24) 24 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Appropriation to general reserve 400,000 (400,000) ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Dividends paid (339,107) (339,107) ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Bonuses to directors and corporate auditors (727) (727) ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Net income 1,060,109 1,060,109 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Purchase of common stock ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Reissuance of common stock 407 407 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Net changes of items other than shareholders' equity ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Total changes during the fiscal year - - 407 407 - (79) 31 967 400,000 319,355 720,275 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- --------- Balance as of March 31, 2007 397,049 416,970 407 417,378 99,454 117 3,228 7,554 5,740,926 1,483,862 7,335,143 ------------------------------ ------- ------- ------- ------- ------- -------- ------- ---------- --------- --------- ---------
34
(Million yen; amounts less than one million yen are omitted) ---------------------------------------------------------------------------------------------------------------------------- Shareholders' equity Valuation and translation adjustments Stock Total ---------------------------------------------------------------------- acquisition net Treasury Total Net Deferred Total rights assets stock shareholders' unrealized hedge gains valuation and equity gains on or losses translation other adjustments securities ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Balance as of March 31, 2006 (1,260,148) 6,168,740 518,155 - 518,155 - 6,686,895 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Changes during the fiscal year ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for losses on overseas investments ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to reserve for special depreciation ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for special depreciation ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to reserve for reduction of acquisition cost of fixed assets ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reversal of reserve for reduction of acquisition cost of fixed assets ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Appropriation to general reserve ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Dividends paid (339,107) (339,107) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Bonuses to directors and corporate auditors (727) (727) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Net income 1,060,109 1,060,109 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Purchase of common stock (300,233) (300,233) (300,233) ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Reissuance of common stock 4,534 4,942 4,942 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Net changes of items other than shareholders' equity 36,792 760 37,552 1,171 38,724 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Total changes during the fiscal year (295,698) 424,984 36,792 760 37,552 1,171 463,708 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ---------- Balance as of March 31, 2007 (1,555,847) 6,593,724 554,947 760 555,708 1,171 7,150,603 ----------------------------- ----------- ---------------- ----------- ------------- --------------- ------------ ----------
35 NOTES TO UNCONSOLIDATED FINANCIAL STATEMENTS *Amounts less than one million yen are in principle omitted. [Significant accounting policies] 1. Standards and methods of valuation of assets (1) Standards and methods of valuation of securities Equity securities of subsidiaries and affiliates are stated at cost determined using the moving average-method. Other securities: Other securities with fair value are stated at fair value based on the market prices, etc. at the end of each fiscal year. (Differences in valuation are included directly in net assets; costs of securities are determined using the moving-average method.) Other securities not practicable to determine their fair value are stated at cost determined using the moving average method. (2) Standards and methods of valuation of inventories Finished goods, work in progress, and supplies are stated at cost determined generally by the average method. Raw materials are stated at the lower of cost or market value, as determined by last-in first-out method. 2. Depreciation of property, plant and equipment is computed by the declining balance method. [Changes in accounting method] Effective from FY2008, in accordance with the revisions of the Corporate Income Tax Law, property, plant and equipment acquired on and after April 1, 2007 is depreciated under the depreciation method stipulated in the revised Corporate Income Tax Law. This change did not have material impact on profit and loss. 3. Standards of accounting for reserves (1) Allowance for doubtful accounts: To prepare for losses from bad debt, allowance for doubtful accounts is provided in an amount which is determined by considering the historical loss experience and the collectibility of the receivables. (2) Allowance for retirement benefits: To provide for the retirement benefits for employees, including those already retired, allowance for retirement benefits is stated based on estimated retirement benefit obligations and estimated pension assets at the end of the fiscal year. 4. Other significant matters pertaining to the preparation of unconsolidated financial statements (1) Consumption taxes, etc. are computed based on the net-of-tax method. (2) Effective from FY2008, the consolidated taxation system is applied. [Changes in presentation method] Unconsolidated balance sheet Effective from FY2008, in accordance with the revisions of the "Practical Guidelines for Accounting for Financial Instruments" (Accounting Committee Report No.14, July 4, 2007), negotiable certificates of deposit issued by Japanese domestic entities, which were formerly included in "Cash and deposits," are included in "Marketable securities." 36 At March 31, 2007 and 2008, TMC's negotiable certificates of deposit issued by Japanese domestic entities amounted to 220,400 million yen and 82,800 million yen, respectively. [Unconsolidated balance sheet] 1. Assets pledged as collateral and relevant liabilities
-------------------------------------------------------------------------------------------------------------------- Assets pledged as collateral Relevant liabilities -------------------------------------------------------------------------------------------------------------------- Items Book value as of the Items Balance as of the end end of the fiscal of the fiscal year year (million yen) (million yen) -------------------------------------------------------------------------------------------------------------------- Investments in securities 11,482 Security deposit for delayed tax 11,500 payment for goods imported Investments in securities 19 Security deposit based on the Real 20 Estate Transaction Low -------------------------------------------------------------------------------------------------------------------- Total 11,502 Total 11,520 --------------------------------------------------------------------------------------------------------------------
2. Accumulated depreciation of property, plant and equipment: 3,467,995 million yen 3. Guarantees Guarantees for bank loans of Toyota Motor Manufacturing Turkey Inc. 27,147 million yen Guarantees for bank loans of Toyota Peugeot Citroen Automobile Czech s.r.o. 20,959 million yen 4. Export bill discounted 7,732 million yen 5. Receivables from and payables to subsidiaries and affiliates Short-term receivables 1,638,313 million yen Long-term receivables 356,020 million yen Short-term payables 1,127,255 million yen 6. The retirement benefit trust is established to appropriate the retirement benefits of the corporate pension plan. No portion of the trust offsets the severance indemnity plan.
37 [Unconsolidated statement of Income] Transactions with subsidiaries and affiliates Net sales 8,172,526 million yen Purchases 5,452,044 million yen Non-operating transactions 545,330 million yen [Unconsolidated statement of changes in net assets] 1. Type and number of treasury stock at the end of FY2008 Common stock 298,717,640 shares 2. Dividends from surplus (1) Cash dividends
--------------------------------------------------------------------------------------------------------------------- Resolutions Type of shares Total cash dividends Dividends Record date Effective date per share --------------------------------------------------------------------------------------------------------------------- Ordinary General Shareholders' Meeting Common stock 223,855 million yen 70 yen March 31, 2007 June 25, 2007 held on June 22, 2007 --------------------------------------------------------------------------------------------------------------------- Directors' Meeting held Common stock 207,004 million yen 65 yen September 30, 2007 November 26, 2007 on November 7, 2007 ---------------------------------------------------------------------------------------------------------------------
(2) Dividends whose record date falls in FY2008 and whose effective date falls in FY2009 Dividends on common stock are proposed for resolution at the Ordinary General Shareholders' Meeting to be held on June 24, 2008, as follows: Total cash dividends 236,195 million yen Dividend per share 75 yen Record date March 31, 2008 Effective date June 25, 2008 The dividends shall be paid from retained earnings. 3. Type and number of shares to be issued or transferred upon the exercise of Stock Acquisition Rights (excluding Stock Acquisition Rights that are not exercisable) at the end of FY2008 Common stock 3,795,700 shares [Tax effect accounting] Deferred tax assets mainly relate to impairment losses on securities, accrued expenses, and allowance for retirement benefits, and are netted with valuation allowance. Deferred tax liabilities mainly relate to net unrealized gains on other securities. [Fixed assets used under lease agreements] In addition to fixed assets on the unconsolidated balance sheet, certain tools, furniture, and fixtures, etc. are used under finance lease agreements with the title of leased assets remaining with the lessors. 38 Related-party transactions:
---------------------------------------------------------------------------------------------------------------------- Transaction Balances as of Category amounts the end of the Name Voting Description of Transaction (million Account fiscal year Interests Relationship yen) name (million yen) ---------------------------------------------------------------------------------------------------------------------- Subsidiary Toyota Motor Equity Sales of TMC Mainly 3,056,389 Trade 238,948 products vehicle Concurrent sales Sales, U.S.A., Indirect posting of (Note.1) accounts Inc. 100.00% directors (Note.2) receivable (Note.2) ---------------------------------------------------------------------------------------------------------------------- Subsidiary Toyota Motor Equity Sales of TMC Mainly 1,223,557 Trade 105,421 products Concurrent vehicle Direct posting of sales accounts Europe NV/SA 100.00% directors (Note.1) (Note.2) receivable (Note.2) ---------------------------------------------------------------------------------------------------------------------- Equity Subsidiary Toyota Finance Indirect Loans from TMC Loans 270,347 Loans 269,644 Corporation 100.00% (Note.3) (Note.3) ---------------------------------------------------------------------------------------------------------------------- Purchase of Equity DENSO Direct CORPORATION Mainly Trade Affiliate DENSO CORPORATION 24.53% products purchase 953,729 accounts 124,314 Indirect Concurrent of parts (Note.2) payable (Note.2) 0.17% posting of (Note.1) directors ----------------------------------------------------------------------------------------------------------------------
Note. 1: Terms of transactions, including price terms, are decided through negotiations with each company. Note. 2: The transaction amounts and the balances of trade accounts receivable do not include consumption taxes, etc. The balances of trade accounts payable includes consumption taxes, etc. Note. 3: Loans are decided based on the market interest rate at the time the loan is made. The transaction amount represents average balance during the fiscal year. [Per share information] (Amounts are rounded to the nearest hundredth digit yen) Net assets per share 2,317.42 yen Net income per share 358.19 yen
39 Independent Auditor's Report (Certified Copy) (English Translation*) May 2, 2008 To the Board of Directors of Toyota Motor Corporation PricewaterhouseCoopers Aarata Koji Hatsukawa Certified Public Accountant Designated and Engagement Partner Yasuo Isobe Certified Public Accountant Designated and Engagement Partner Hitoshi Kiuchi Certified Public Accountant Designated and Engagement Partner We have audited, pursuant to Article 436 (2) 1 of the "Corporation Act" of Japan, the unconsolidated financial statements, which consist of the unconsolidated balance sheet, the unconsolidated statement of income, the unconsolidated statement of changes in net assets and the notes to the unconsolidated financial statements, and the supplementary schedules of Toyota Motor Corporation (hereinafter referred to as the "Company") for the 104th fiscal year from April 1, 2007 to March 31, 2008. These unconsolidated financial statements and the supplementary schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these unconsolidated financial statements and the supplementary schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we obtain reasonable assurance about whether the unconsolidated financial statements and the supplementary schedules are free of material misstatement. An audit is performed on a test basis and includes assessing the accounting principles used by management including how they are applied and estimates made by management, as well as examining of the overall presentation of the unconsolidated financial statements and the supplementary schedules. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the unconsolidated financial statements and the supplementary schedules referred to above present fairly, in all material respects, the financial position and the results of operations of the Company for the period covered by the unconsolidated financial statements and the supplementary schedules in conformity with accounting principles generally accepted in Japan. We have no interest in or relationship with the Company which is required to be disclosed pursuant to the provisions of the Certified Public Accountant Law of Japan. -------------------------------------------------------------------------------- *The original audit report is in Japanese. This English translation is for readers' convenience and reading this translation is not a substitute for reading the original audit report in Japanese. 40 Consolidated Financial Statements CONSOLIDATED BALANCE SHEETS
(Amounts are rounded to the nearest million yen) ------------------------------------------------------------ -------------------------------------------------------------- FY2008 FY2007 FY2007 (As of (Reference) FY2008 (Reference) March 31, (As of (As of (As of 2008) March 31, 2007) March 31, 2008) March 31, 2007) ------------------------------------------------------------ -------------------------------------------------------------- (Assets) (Liabilities) Current assets 12,086,227 11,880,411 Current liabilities 11,940,742 11,767,170 Cash and cash equivalents 1,628,547 1,900,379 Short-term borrowings 3,552,721 3,497,391 Time deposits 134,773 26,709 Marketable securities 542,210 435,463 Current portion of 2,675,431 2,368,116 long-term debt Trade accounts and notes Accounts payable 2,212,773 2,211,586 receivable, less 2,040,233 2,023,818 Other payables 806,514 807,481 allowance for doubtful Accrued expenses 1,606,964 1,668,337 accounts Income taxes payable 305,592 421,196 Finance receivables, net 4,301,142 4,108,139 Other current Other receivables 523,533 486,170 liabilities 780,747 793,063 Inventories 1,825,716 1,803,956 Long-term liabilities 7,991,384 8,343,273 Deferred income taxes 563,220 551,503 Long-term debt 5,981,931 6,263,585 Prepaid expenses and other current assets 526,853 544,274 Accrued pension and severance costs 632,297 640,586 Noncurrent finance Deferred income taxes 1,099,006 1,312,400 receivables, net 5,974,756 5,894,925 Other long-term liabilities 278,150 126,702 Investments and other 6,585,335 7,035,404 Total liabilities 19,932,126 20,110,443 assets Marketable securities and other securities investments 3,429,238 3,829,852 (Minority interest in Affiliated companies 2,098,556 2,058,177 consolidated Employees receivables 70,776 96,742 subsidiaries) Other 986,765 1,050,633 Minority interest in Property, plant and consolidated subsidiaries 656,667 628,244 equipment 7,812,002 7,764,039 Land 1,262,034 1,233,137 (Shareholders' equity) Buildings 3,580,607 3,444,764 Common stock 397,050 397,050 Machinery and equipment 9,270,650 9,184,751 Additional paid-in capital 497,569 497,593 Retained earnings 12,408,550 11,764,713 Vehicle and equipment on operating leases 2,922,325 2,890,369 Accumulated other Construction in progress 360,620 349,465 comprehensive income (241,205) 701,390 (loss) Less - Accumulated Treasury stock, at cost (1,192,437) (1,524,654) depreciation (9,584,234) (9,338,447) Total shareholders' equity 11,869,527 11,836,092 ------------------------------------------------------------ -------------------------------------------------------------- Total liabilities and Total assets 32,458,320 32,574,779 shareholders' equity 32,458,320 32,574,779 ------------------------------------------------------------ --------------------------------------------------------------
41 CONSOLIDATED STATEMENTS OF INCOME
(Amounts are rounded to the nearest million yen) ------------------------------------------------------------------------------------------------------------------ FY2008 FY2007 (Reference) (April 1, 2007 through (April 1, 2006 through March 31, 2008) March 31, 2007) ------------------------------------------------------------------------------------------------------------------ Net revenues 26,289,240 23,948,091 Sales of products 24,820,510 22,670,097 Financing operations 1,468,730 1,277,994 Costs and expenses 24,018,865 21,709,408 Cost of products sold 20,452,338 18,356,255 Cost of financing operations 1,068,015 872,138 Selling, general and administrative 2,498,512 2,481,015 Operating income 2,270,375 2,238,683 Other income (expense) 166,847 143,833 Interest and dividend income 165,676 131,939 Interest expense (46,113) (49,326) Foreign exchange gain, net 9,172 33,005 Other income, net 38,112 28,215 Income before income taxes, minority interest and equity in 2,437,222 2,382,516 earnings of affiliated companies Provision for income taxes 911,495 898,312 Income before minority interest and equity in earnings of 1,525,727 1,484,204 affiliated companies Minority interest in consolidated subsidiaries (77,962) (49,687) Equity in earnings of affiliated companies 270,114 209,515 Net income 1,717,879 1,644,032 ------------------------------------------------------------------------------------------------------------------
42 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY FY2008 (April 1, 2007 through March 31, 2008)
(Amounts are rounded to the nearest million yen) ------------------------------------- ----------- ----------- ------------- --------------- ------------- ------------- Common Additional Retained Accumulated Treasury Total other ' paid-in comprehensive stock, shareholders stock capital earnings income (loss) at cost equity ------------------------------------- ----------- ----------- ------------- --------------- ------------- ------------- Balances at March 31, 2007 397,050 497,593 11,764,713 701,390 (1,524,654) 11,836,092 ----------- ----------- ------------- --------------- ------------- ------------- Issuance during the year 3,475 3,475 Comprehensive income Net income 1,717,879 1,717,879 Other comprehensive income Foreign currency translation (461,189) (461,189) adjustments Unrealized gains on securities, net of reclassification adjustments (347,829) (347,829) Pension liability adjustments (133,577) (133,577) Total comprehensive income 775,284 Dividends paid (430,860) (430,860) Purchase and reissuance of common (314,464) (314,464) stock Retirement of common stock (3,499) (643,182) 646,681 - ----------- ----------- ------------- --------------- ------------- ------------- Balances at March 31, 2008 397,050 497,569 12,408,550 (241,205) (1,192,437) 11,869,527 ------------------------------------- ----------- ----------- ------------- --------------- ------------- ------------- FY2007 (Reference) (April 1, 2006 through March 31, 2007) ------------------------------------- ----------- ----------- ------------- --------------- ------------- ------------- Common Additional Retained Accumulated Treasury Total other ' paid-in comprehensive stock, shareholders stock capital earnings income at cost equity ------------------------------------- ----------- ----------- ------------- --------------- ------------- ------------- Balances at March 31, 2006 397,050 495,250 10,459,788 437,316 (1,228,955) 10,560,449 ----------- ----------- ------------- --------------- ------------- ------------- Issuance during the year 2,343 2,343 Comprehensive income Net income 1,644,032 1,644,032 Other comprehensive income Foreign currency translation 130,746 130,746 adjustments Unrealized gains on securities, net of reclassification adjustments 38,800 38,800 Minimum pension liability 3,499 3,499 adjustments Total comprehensive income 1,817,077 Adjustment to initially apply 91,029 91,029 FAS No.158 Dividends paid (339,107) (339,107) Purchase and reissuance of common (295,699) (295,699) stock ----------- ----------- ------------- --------------- ------------- ------------- Balances at March 31, 2007 397,050 497,593 11,764,713 701,390 (1,524,654) 11,836,092 ------------------------------------- ----------- ----------- ------------- --------------- ------------- -------------
43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS *Amounts are rounded to the nearest million yen unless otherwise stated. [Significant matters pertaining to the preparation of consolidated financial statements] 1. Number of consolidated subsidiaries and affiliated companies accounted for by the equity method: TMC has 530 consolidated subsidiaries and 55 affiliated companies accounted for by the equity method. 2. Basis of consolidated financial statements: Toyota's consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), pursuant to the provision of Article 148, Paragraph 1 of the Corporation Accounting Regulations. Also, pursuant to the provision of Article 148, Paragraph 1, certain disclosures and notes to the consolidated financial statements required under U.S. GAAP are omitted. Certain prior year amounts have been reclassified to conform to the presentations for the fiscal year ended March 31, 2008. 3. Standards and methods of valuation of securities: Available-for-sale securities are stated at fair value. The acquisition cost of the securities is determined on the average cost method. 4. Inventories: Inventories are valued at cost, not in excess of market, cost being determined on the "average-cost" basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the "specific identification" basis or "last-in, first-out" basis. 5. Depreciation of property, plant and equipment: Depreciation of property, plant and equipment is mainly computed on the declining-balance method for TMC and Japanese subsidiaries and on the straight-line method for foreign subsidiaries. 6. Goodwill and amortization of intangible assets: Goodwill and intangible assets with an indefinite life are not amortized, but are tested for impairment annually or more frequently if events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. Intangible assets with a definite life are amortized on a straight-line method. 44 7. Standards of accounting for reserves: Allowance for doubtful accounts and allowance for credit losses: Allowance for doubtful accounts and allowance for credit losses are based primarily on the frequency of occurrence and loss severity. Accrued pension and severance costs: Accrued pension and severance costs are recognized based on the retirement benefit obligations measured by actuarial calculations less fair value of the plan assets. [Consolidated Balance Sheet] 1. Allowance for doubtful accounts 52,063 million yen Allowance for credit losses 117,706 million yen 2. Components of accumulated other comprehensive income Foreign currency translation adjustments (501,366) million yen Unrealized gains on securities 310,979 million yen Pension liability adjustments (50,818) million yen 3. Assets pledged as collateral 122,105 million yen 4. Guarantees 1,460,362 million yen [Consolidated Statement of Shareholders' Equity] Number of shares issued and outstanding as of March 31, 2008 3,447,997,492 shares [Per share amounts] (Amounts are rounded to the nearest hundredth digit yen) 1. Shareholders' equity per share 3,768.97 yen 2. Net income per share Basic 540.65 yen Diluted 540.44 yen
45 Independent Auditor's Report (Certified Copy) (English Translation*) May 2, 2008 To the Board of Directors of Toyota Motor Corporation PricewaterhouseCoopers Aarata Kouji Hatsukawa Certified Public Accountant Designated and Engagement Partner Yasuo Isobe Certified Public Accountant Designated and Engagement Partner Hitoshi Kiuchi Certified Public Accountant Designated and Engagement Partner We have audited, pursuant to Article 444 (4) of the "Corporation Act" of Japan, the consolidated financial statements, which consist of the consolidated balance sheet, the consolidated statement of income, the consolidated statement of shareholders' equity, and the notes to the consolidated financial statements of Toyota Motor Corporation (hereinafter referred to as the "Company") for the fiscal year from April 1, 2007 to March 31, 2008. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit is performed on a test basis and includes assessing the accounting principles used by management including how they are applied and estimates made by management, as well as examing the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and the results of operations of the corporate group which consist of the Company and its consolidated subsidiaries for the period covered by the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America as permitted by Article 148 (1) of the Corporation Accounting Regulations (refer to Item 2 of the "Significant matters pertaining to the preparation of consolidated financial statements" in the notes to the consolidated financial statements). We have no interest in or relationship with the Company which is required to be disclosed pursuant to the provisions of the Certified Public Accountant Law of Japan. -------------------------------------------------------------------------------- * The original audit report is in Japanese. This English translation is for reader's convenience and reading this translation is not a substitute for reading the original audit report in Japanese. 46 Board of Corporate Auditors' Report (Certified Copy) Audit Report The Board of Corporate Auditors has discussed and prepared this Audit Report based on the audit reports prepared by each of the Corporate Auditors pertaining to the conduct of duties by the Directors of Toyota Motor Corporation during FY2008 extending from April 1, 2007 through March 31, 2008, and reports as follows. 1. Method and content of Audit by the Corporate Auditors and the Board of Corporate Auditors (1) Auditing method of the Board of Corporate Auditors The Board of Corporate Auditors determined the auditing policies and audit plan, received a report from each Corporate Auditor on the audit and its results, and received reports from the Directors and senior executives and Accounting Auditor on the execution of their duties. (2) Method and content of Audit by the Corporate Auditors 1) Based on the audit policies and audit plan adopted by the Board of Corporate Auditors, each Corporate Auditor communicated with the Directors and senior executives and other Corporate Auditors, collected information, developed an auditing environment, attended the Board of Directors' meetings and other important meetings, and received reports from the Directors and senior executives on the execution of their duties. The Corporate Auditors also reviewed important documents and surveyed operations and assets at the company head office, production facilities, and business offices. The Corporate Auditors exchanged opinions and information with the Directors and senior executives and Corporate Auditors of the subsidiaries, and received reports on business from them, as needed. 2) Concerning the unconsolidated financial statements (unconsolidated balance sheet, unconsolidated statement of income, unconsolidated statement of changes in net assets, and notes to the unconsolidated financial statements) and supplementary schedules and consolidated financial statements (consolidated balance sheet, consolidated statement of income, consolidated statement of shareholders' equity, and notes to the consolidated financial statements), each Corporate Auditor received reports from the Directors and senior executives and received reports from the Accounting Auditor on its audit and the results. The Corporate Auditors also received notice from the Accounting Auditor confirming that the "systems to ensure the appropriate execution of duties by the Accounting Auditor" (as described in each of the items of Article 159 of the Corporation Accounting Regulations) has been properly developed. 2. Result of Audit (1) Audit result concerning the business report and others 1) The business report and supplementary schedules accurately represent the company's situation as required by laws and regulations and the Articles of Incorporation. 2) No irregularity or violation of applicable laws or regulations or the Articles of Incorporation was found with respect to the performance of duties by the Directors. 3) Resolutions of the Board of Directors concerning the internal control system (as stipulated in Article 362, Paragraph 4, Item 6 the Corporation Act of Japan and Article 100, Paragraphs 1 and 3 of the Enforcement Regulations of the Corporation Act) are appropriate. We have nothing to point out concerning the execution of duties by the Directors with respect to the internal control system. (2) Audit results concerning unconsolidated financial statements and supplementary schedules The auditing method of PricewaterhouseCoopers Aarata, the Accounting Auditor, and the results of the audit, are appropriate. (3) Audit results of consolidated financial statements The auditing method of PricewaterhouseCoopers Aarata, the Accounting Auditor, and the results of the audit, are appropriate. May 7, 2008 Toyota Motor Corporation Board of Corporate Auditors Full-time Corporate Auditor Yoshikazu Amano Full-time Corporate Auditor Chiaki Yamaguchi Full-time Corporate Auditor Masaki Nakatsugawa Outside Corporate Auditor Yoichi Kaya Outside Corporate Auditor Yoichi Morishita Outside Corporate Auditor Akishige Okada Outside Corporate Auditor Kunihiro Matsuo 47 Consolidated Business Results for FY2008 (Reference) Segment Operating Results Automotive Net revenues for the automotive operations increased by 2,249.3 billion yen (or 10.3%) to 24,177.3 billion yen in FY 2008 compared with FY2007, and operating income increased by 133.1 billion yen (or 6.5%) to 2,171.9 billion yen in FY2008 compared with FY2007. The increase in operating income was mainly due to increases in both production volume and vehicle units sold and cost reduction efforts, partially offset by an increase in expenses. Financial services Net revenues for the financial services operations increased by 197.8 billion yen (or 15.2%) to 1,498.3 billion yen in FY2008 compared with FY2007, while operating income decreased by 72.0 billion yen (or 45.4%) to 86.5 billion yen in FY2008 compared with FY2007. The decrease in operating income was mainly due to an increase in valuation losses on interest rate swaps by 48.1 billion yen stated at fair value by sales finance subsidiaries in accordance with the Statement of Financial Accounting Standards (FAS) No. 133 (as amended by several guidance including FAS No.138), despite a steady increase in financing volume. All other Net revenues for all other businesses increased by 23.2 billion yen (or 1.8%) to 1,346.9 billion yen in FY2008 compared with FY2007, while operating income decreased by 6.6 billion yen (or 16.6%) to 33.0 billion yen in FY2008 compared with FY2007. Operating income by business segment -------------------------------------------------------------------------------- [GRAPHIC OMITTED] 48 Geographic Information Japan Net revenues in Japan increased by 500.5 billion yen (or 3.4%) to 15,315.8 billion yen in FY2008 compared with FY2007, while operating income decreased by 16.9 billion yen (or 1.2%) to 1,440.3 billion yen in FY2008 compared with FY2007. The decrease in operating income was mainly due to an increase in expenses, partially offset by an increase in production volume and vehicle exports as well as cost reduction efforts. North America Net revenues in North America increased by 393.5 billion yen (or 4.4%) to 9,423.2 billion yen in FY2008 compared with FY2007, while operating income decreased by 144.3 billion yen (or 32.1%) to 305.3 billion yen in FY2008 compared with FY2007. The decrease in operating income was mainly due to an increase in valuation losses on interest rate swaps by 66.7 billion yen stated at fair value by sales finance subsidiaries in accordance with FAS No. 133 (as amended by several guidance including FAS No. 138). Europe Net revenues in Europe increased by 451.3 billion yen (or 12.7%) to 3,993.4 billion yen in FY2008 compared with FY2007, and operating income increased by 4.2 billion yen (or 3.0%) to 141.5 billion yen in FY2008 compared with FY2007. Asia Net revenues in Asia increased by 895.3 billion yen (or 40.2%) to 3,120.9 billion yen in FY2008 compared with FY2007, and operating income increased by 138.8 billion yen (or 118.0%) to 256.4 billion yen in FY2008 compared with FY2007. The increase in operating income was mainly due to increases in both production volume and vehicle units sold. Other (Central and South America, Oceania and Africa) Net revenues in other regions increased by 371.4 billion yen (or 19.3%) to 2,294.1 billion yen in FY2008 compared with FY2007, and operating income increased by 60.4 billion yen (or 72.4%) to 143.9 billion yen in FY2008 compared with FY2007. The increase in operating income was mainly due to increases in both production volume and vehicle units sold. 49 Operating income by region -------------------------------------------------------------------------------- [GRAPHIC OMITTED] 50