Aichi : FY 2021 Annual Report (April 1, 2020 - March 31, 2021) was published.

AICHI CORPORATION

Audited Financial Statements

(English Translation)

March 31, 2021

Independent Auditors' Report

(English Translation*)

May 17, 2021

To the Board of Directors of AICHI CORPORATION

PricewaterhouseCoopers Aarata LLC, Tokyo Office

Kosaku Kawahara, CPA

Designated Limited Liability Partner, Engagement Partner

Kazuaki Sekine, CPA

Designated Limited Liability Partner, Engagement Partner

Opinion

Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement of income, the consolidated statement of changes in net assets and the notes to the consolidated financial statements of AICHI CORPORATION (the "Company") for the fiscal year from April 1, 2020 through March 31, 2021.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results of operations of the corporate group, which consists of the Company and its consolidated subsidiaries, for the period covered by the consolidated financial statements in conformity with accounting principles generally accepted in Japan.

Basis for the Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing standards is stated in "Auditor's Responsibility for the Audit of the Consolidated Financial Statements." We are independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare the consolidated financial statements in accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with accounting principles generally accepted in Japan.

The Audit and Supervisory Committee is responsible for monitoring the execution of Directors' duties related to designing and operating the financial reporting process.

Auditor's Responsibility for the Audit of the Consolidated Financial Statements

Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to express an opinion on the consolidated financial statements from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of the consolidated financial statements.

We make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, and perform the following while maintaining professional skepticism.

- 1 -

• Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures to address the risks of material misstatement. The audit procedures shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
• In making those risk assessments, the auditor considers internal control relevant to the entity's audit in order to design audit procedures that are appropriate in the circumstances, although the purpose of the audit of the consolidated financial statements is not to express an opinion on the effectiveness of the entity's internal control.
• Assess the appropriateness of accounting policies adopted by management and the method of their application, as well as the reasonableness of accounting estimates made by management and the adequacy of related notes.
• Determine whether it is appropriate for management to prepare the consolidated financial statements on the premise of a going concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes to the consolidated financial statements in the audit report, or if the notes to the consolidated financial statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the consolidated financial statements. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable to continue as a going concern.
• Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordance with accounting principles generally accepted in Japan, assess the presentation, structure, and content of the consolidated financial statements including related notes, and whether the consolidated financial statements fairly present the transactions and accounting events on which they are based.
• Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, and is solely responsible for the audit opinion.
  We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
  We also provide the Audit and Supervisory Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Interest

Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring disclosure under the provisions of the Certified Public Accountants Act 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.

- 2 -

AICHI CORPORATION

Consolidated Balance Sheet

As of March 31, 2021

In Thousands of Yen

Assets
Current assets:
Cash and deposits	¥	1,224,322
Deposits paid		36,536,175
Notes and accounts receivable - trade		19,464,344
Finished goods		808,516
Work in process		1,287,837
Raw materials and supplies		1,191,555
Other		465,096
Allowance for doubtful accounts		(225)
Total current assets		60,977,622
Non-current assets:
Property, plant and equipment:
Buildings and structures		7,421,847
Machinery, equipment and vehicles		2,407,495
Tools, furniture and fixtures		226,410
Land		8,524,457
Construction in progress		32,714
Other		399,109
Total property, plant and equipment		19,012,035
Intangible assets		692,607
Investments and other assets:
Investment securities		7,954,715
Other		2,239,294
Allowance for doubtful accounts		(6,713)
Total investments and other assets		10,187,296
Total non-current assets		29,891,939
Total assets	¥	90,869,562

- 3 -

Liabilities

Current liabilities:

Notes and accounts payable - trade Income taxes payable

Provision for bonuses for directors (and other officers) Provision for product warranties

Other

Total current liabilities

Non-current liabilities:

Deferred tax liabilities for land revaluation

Retirement benefit liability

Deferred tax liabilities

Other

Total non-current liabilities

Total liabilities

Net assets

Shareholders' equity:

Share capital

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income:

Valuation difference on available-for-sale securities Revaluation reserve for land

Foreign currency translation adjustment Remeasurements of defined benefit plans

Total accumulated other comprehensive income Total net assets

Total liabilities and net assets

- 4 -

In Thousands of Yen

• 10,089,276
  1,727,200
  38,000
  294,302
  3,339,192

15,487,971

616,302

450,694

578,155

414,769

2,059,922

17,547,893

10,425,325

9,923,342

50,386,498

(1,147,983)

69,587,182

4,498,080

(1,624,044)

86,580

773,869

3,734,486

73,321,669

• 90,869,562