Aichi : Annual Securities Report (April 1, 2023 - March 31, 2024) was published.

AICHI CORPORATION

Annual Securities Report

(English Translation)

March 31, 2024

5. Financial Information

1. Basis for Preparation of Consolidated and Non-consolidated Financial Statements
2. 1. The consolidated financial statements of AICHI CORPORATION (the "Company") are prepared in accordance with the "Regulation on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements" (Ministry of Finance Order No. 28 of 1976).
   2. The non-consolidated financial statements of the Company are prepared in accordance with the "Regulation on Terminology, Forms, and Preparation Methods of Financial Statements" (Ministry of Finance Order No. 59 of 1963; hereinafter the "Regulation on Financial Statements").
      The Company falls under the company allowed to file specified financial statements and prepares its non- consolidated financial statements pursuant to the provision of Article 127 of the Regulation on Financial Statements.
3. Audit Certificate
   The Company's consolidated and non-consolidated financial statements for the fiscal year ended March 31, 2024 were audited by PricewaterhouseCoopers Japan LLC, in accordance with the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act.
   PricewaterhouseCoopers Aarata LLC merged with PricewaterhouseCoopers Kyoto, and changed its name to PricewaterhouseCoopers Japan LLC on December 1, 2023.
4. Special Measures to Ensure the Appropriateness of Consolidated Financial Statements, etc.
   The Company has taken special measures to ensure the appropriateness of consolidated financial statements, etc. Specifically, the Company endeavors to establish a framework that allows the Company to appropriately understand the details of accounting standards and other relevant information and accurately respond to changes in the standards by joining the Financial Accounting Standards Foundation and participating in seminars organized by the Foundation. The Company has explored the possibility of adopting the designated International Financial Reporting Standards in the future.

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1. Consolidated Financial Statements, etc.

(1) Consolidated Financial Statements

(i) Consolidated Balance Sheets

				(Thousands of yen)
			As of March 31, 2023	As of March 31, 2024
Assets
	Current assets
	Cash and deposits	1,162,162	42,131,006
	Deposits paid	*2 37,865,486	-
	Notes receivable - trade	3,408,581	*5 5,388,054
	Accounts receivable - trade	20,063,056	11,690,930
	Merchandise and finished goods	1,065,423	2,819,650
	Work in process	1,251,898	1,643,386
	Raw materials and supplies	1,486,946	1,562,785
	Other	1,249,447	592,449
	Total current assets	67,553,002	65,828,262
	Non-current assets
	Property, plant and equipment
	Buildings and structures	19,505,384	20,094,861
		Accumulated depreciation	(12,890,269)	(13,439,088)
		Buildings and structures, net	6,615,115	6,655,773
	Machinery, equipment and vehicles	9,957,769	10,243,708
		Accumulated depreciation	(8,261,419)	(8,831,923)
		Machinery, equipment and vehicles, net	1,696,350	1,411,784
	Tools, furniture and fixtures	2,963,989	3,057,019
		Accumulated depreciation	(2,788,596)	(2,857,974)
		Tools, furniture and fixtures, net	175,392	199,044
	Land	*1 8,523,400	*1 8,522,521
	Leased assets	747,944	732,253
		Accumulated depreciation	(485,104)	(505,936)
		Leased assets, net	262,839	226,317
	Construction in progress	341,940	134,614
	Total property, plant and equipment	17,615,039	17,150,055
	Intangible assets	601,208	651,201
	Investments and other assets
	Investment securities	6,959,086	7,066,511
	Retirement benefit asset	-	600,466
	Other	*3 2,973,787	*3 3,630,421
	Allowance for doubtful accounts	(6,653)	(5,301)
	Total investments and other assets	9,926,220	11,292,097
	Total non-current assets	28,142,468	29,093,354
	Total assets	95,695,470	94,921,617

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					(Thousands of yen)
				As of March 31, 2023	As of March 31, 2024
Liabilities
	Current liabilities
		Notes and accounts payable - trade		10,248,973	7,372,886
		Lease liabilities	94,148	72,642
		Income taxes payable		1,385,807	862,617
		Provision for bonuses for directors (and other	38,000	38,000
		officers)
		Provision for product warranties		153,065	133,476
		Other	*4 2,975,807	*4 2,430,428
		Total current liabilities		14,895,802	10,910,051
	Non-current liabilities
		Lease liabilities		214,152	183,348
		Deferred tax liabilities	695,862	1,383,340
		Deferred tax liabilities for land revaluation		*1 616,302	*1 616,302
		Retirement benefit liability	660,461	-
		Other		39,142	39,511
		Total non-current liabilities	2,225,920	2,222,503
	Total liabilities		17,121,723	13,132,554
Net assets
	Shareholders' equity
		Share capital	10,425,325	10,425,325
		Capital surplus		9,923,342	9,923,342
		Retained earnings	54,606,278	56,428,242
		Treasury shares		(313)	(8,939)
		Total shareholders' equity	74,954,632	76,767,970
	Accumulated other comprehensive income
		Valuation difference on available-for-sale securities	3,882,938	4,025,637
		Revaluation reserve for land		*1 (1,624,044)	*1 (1,624,044)
		Foreign currency translation adjustment	808,182	1,218,929
		Remeasurements of defined benefit plans		552,038	1,400,570
		Total accumulated other comprehensive income	3,619,115	5,021,092
	Total net assets		78,573,747	81,789,062
Total liabilities and net assets	95,695,470	94,921,617

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1. Consolidated Statements of Income and Consolidated Statement of Comprehensive Income Consolidated Statements of Income

			(Thousands of yen)
		For the fiscal year	For the fiscal year
		ended March 31, 2023	ended March 31, 2024
Net sales	*1 60,678,851	*1 53,129,278
Cost of sales	*2 47,627,170	*2 41,350,074
Gross profit	13,051,681	11,779,203
Selling, general and administrative expenses
	Packing and delivery expenses	479,842	519,553
	Advertising expenses	72,348	79,936
	Sales commission	33,027	18,000
	Remuneration for directors (and other officers)	74,277	77,178
	Salaries, allowances and bonuses	2,182,919	2,123,220
	Provision for bonuses for directors (and other officers)	33,647	34,591
	Retirement benefit expenses	142,486	100,998
	Welfare expenses	506,773	457,976
	Communication and transportation expenses	251,419	272,583
	Depreciation	315,446	298,976
	Repair expenses	71,617	71,925
	Rent expenses	170,832	143,307
	Research and development expenses	*6 478,312	*6 424,499
	Other	887,419	814,839
	Total selling, general and administrative expenses	5,700,370	5,437,588
Operating profit	7,351,310	6,341,615
Non-operating income
	Interest income	10,724	19,402
	Dividend income	172,863	174,111
	Foreign exchange gains	56,844	7,492
	Share of profit of entities accounted for using equity	375,337	443,652
	method
	Miscellaneous income	51,487	34,566
	Total non-operating income	667,258	679,226
Non-operating expenses
	Miscellaneous losses	2,492	1,992
	Total non-operating expenses	2,492	1,992
Ordinary profit	8,016,076	7,018,849

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			(Thousands of yen)
		For the fiscal year	For the fiscal year
		ended March 31, 2023	ended March 31, 2024
Extraordinary income
Gain on sale of non-current assets	*3 755	*3 763
Gain on sale of investment securities		406,591	469,008
Total extraordinary income	407,347	469,771
Extraordinary losses
Loss on sale of non-current assets	170	-
Loss on retirement of non-current assets		*5 6,461	*5 998
Loss on valuation of investment securities	6,650	-
Impairment losses		*4 606	*4 415
Loss on liquidation of subsidiaries and associates	*7 28,491	-
Compensation for damage		*8 104,011	-
Total extraordinary losses	146,393	1,414
Profit before income taxes	8,277,030	7,487,206
Income taxes - current	2,177,077	1,987,427
Income taxes - deferred	141,849	229,699
Total income taxes	2,318,927	2,217,127
Profit	5,958,103	5,270,078
Profit attributable to owners of parent	5,958,103	5,270,078

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Consolidated Statements of Comprehensive Income

			(Thousands of yen)
		For the fiscal year	For the fiscal year
		ended March 31, 2023	ended March 31, 2024
Profit	5,958,103	5,270,078
Other comprehensive income:
	Valuation difference on available-for-sale securities	(202,491)	142,698
	Foreign currency translation adjustment	37,184	182,567
	Remeasurements of defined benefit plans, net of tax	(153,242)	848,531
	Share of other comprehensive income of entities	12,262	228,179
	accounted for using equity method
	Total other comprehensive income	*1 (306,286)	*1 1,401,977
Comprehensive income	5,651,817	6,672,056
Comprehensive income attributable to
	Comprehensive income attributable to owners of parent	5,651,817	6,672,056
	Comprehensive income attributable to non-controlling	-	-
	interests

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1. Consolidated Statements of Changes in Equity
   For the fiscal year ended March 31, 2023

				(Thousands of yen)
			Shareholders' equity
	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders'
	equity
Balance at beginning of	10,425,325	9,923,342	52,416,619	(646,937)	72,118,350
period
Changes during period
Dividends of surplus			(2,790,323)		(2,790,323)
Profit attributable to			5,958,103		5,958,103
owners of parent
Purchase of treasury				(331,569)	(331,569)
shares
Disposal of treasury		(8)		78	70
shares
Cancellation of treasury		(978,113)		978,113	-
shares
Transfer from retained
earnings to capital		978,121	(978,121)		-
surplus
Net changes in items
other than shareholders'					-
equity
Total changes during	-	-	2,189,659	646,623	2,836,282
period
Balance at end of period	10,425,325	9,923,342	54,606,278	(313)	74,954,632
		Accumulated other comprehensive income
	Valuation difference		Foreign currency	Remeasurements of	Total accumulated	Total net assets
	on available-for-sale	Revaluation reserve	translation	defined benefit	other
	securities	for land	adjustment	plans	comprehensive
		income
Balance at beginning of	4,085,430	(1,624,044)	758,735	705,280	3,925,401	76,043,752
period
Changes during period
Dividends of surplus						(2,790,323)
Profit attributable to						5,958,103
owners of parent
Purchase of treasury						(331,569)
shares
Disposal of treasury						70
shares
Cancellation of treasury						-
shares
Transfer from retained
earnings to capital						-
surplus
Net changes in items
other than shareholders'	(202,491)	-	49,447	(153,242)	(306,286)	(306,286)
equity
Total changes during	(202,491)	-	49,447	(153,242)	(306,286)	2,529,995
period
Balance at end of period	3,882,938	(1,624,044)	808,182	552,038	3,619,115	78,573,747

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For the fiscal year ended March 31, 2024

				(Thousands of yen)
			Shareholders' equity
	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders'
	equity
Balance at beginning of	10,425,325	9,923,342	54,606,278	(313)	74,954,632
period
Changes during period
Dividends of surplus			(2,858,014)		(2,858,014)
Profit attributable to			5,270,078		5,270,078
owners of parent
Purchase of treasury				(598,726)	(598,726)
shares
Cancellation of treasury		(590,100)		590,100	-
shares
Transfer from retained
earnings to capital		590,100	(590,100)		-
surplus
Net changes in items
other than shareholders'					-
equity
Total changes during	-	-	1,821,963	(8,625)	1,813,337
period
Balance at end of period	10,425,325	9,923,342	56,428,242	(8,939)	76,767,970
		Accumulated other comprehensive income
	Valuation difference		Foreign currency	Remeasurements of	Total accumulated	Total net assets
	on available-for-sale	Revaluation reserve	translation	defined benefit	other
	securities	for land	adjustment	plans	comprehensive
		income
Balance at beginning of	3,882,938	(1,624,044)	808,182	552,038	3,619,115	78,573,747
period
Changes during period
Dividends of surplus						(2,858,014)
Profit attributable to						5,270,078
owners of parent
Purchase of treasury						(598,726)
shares
Cancellation of treasury						-
shares
Transfer from retained
earnings to capital						-
surplus
Net changes in items
other than shareholders'	142,698	-	410,747	848,531	1,401,977	1,401,977
equity
Total changes during	142,698	-	410,747	848,531	1,401,977	3,215,315
period
Balance at end of period	4,025,637	(1,624,044)	1,218,929	1,400,570	5,021,092	81,789,062

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(iv) Consolidated Statements of Cash Flows

			(Thousands of yen)
		For the fiscal year	For the fiscal year
		ended March 31, 2023	ended March 31, 2024
Cash flows from operating activities
	Profit before income taxes	8,277,030	7,487,206
	Depreciation	1,484,874	1,440,853
	Impairment losses	606	415
	Increase (decrease) in allowance for doubtful accounts	(105)	(1,352)
	Increase (decrease) in provision for product warranties	(75,205)	(19,588)
	Decrease (increase) in retirement benefit asset	-	(600,466)
	Increase (decrease) in retirement benefit liability	171,168	(660,461)
	Interest and dividend income	(183,588)	(193,514)
	Share of loss (profit) of entities accounted for using	(375,337)	(443,652)
	equity method
	Loss (gain) on sale of investment securities	(406,591)	(469,008)
	Loss (gain) on valuation of investment securities	6,650	-
	Foreign exchange losses (gains)	(233)	(1,187)
	Loss (gain) on sale and retirement of non-current assets	5,876	234
	Decrease (increase) in trade receivables	(4,867,428)	6,414,625
	Decrease (increase) in inventories	(97,425)	(2,186,934)
	Increase (decrease) in trade payables	1,616,971	(2,894,893)
	Compensation for damage	104,011	-
	Other, net	307,942	776,418
	Subtotal	5,969,215	8,648,697
	Interest and dividends received	174,820	952,113
	Compensation paid for damage	(104,011)	-
	Income taxes paid	(1,531,291)	(2,489,172)
	Net cash provided by (used in) operating activities	4,508,733	7,111,638

Cash flows from investing activities

Decrease (increase) in deposits

Purchase of investment securities

Proceeds from sale of investment securities

Purchase of property, plant and equipment and intangible assets

Proceeds from sale of property, plant and equipment and intangible assets

Other, net

Net cash provided by (used in) investing activities

Cash flows from financing activities

(1,900,000)	33,300,000
(100)	-
497,355	565,984
(789,647)	(1,072,594)
3,329	9,085
(64,501)	(39,166)
(2,253,563)	32,763,309

Purchase of treasury shares	(331,569)	(598,726)
Dividends paid	(2,790,323)	(2,858,014)
Other, net	(103,184)	(95,009)
Net cash provided by (used in) financing activities	(3,225,076)	(3,551,750)
Effect of exchange rate change on cash and cash	20,906	80,160
equivalents
Net increase (decrease) in cash and cash equivalents	(949,001)	36,403,357
Cash and cash equivalents at beginning of period	6,676,649	5,727,648
Cash and cash equivalents at end of period	*1 5,727,648	*1 42,131,006

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