[Translation for Reference and Convenience Purposes Only]

Matters Omitted in the Documents
Accompanying the Notice of Convocation of the
92nd Ordinary General Meeting of Shareholders

June 1, 2023
(Start date of electronic provision measures: May 23, 2023)
The following items are posted on the Company website, etc. in accordance with legal requirements andprovisions of Article 15 of the Articles of Incorporation and are therefore not included in the documents
being sent to the shareholders.
-“Main Businesses”, “Major Places of Business, Etc.”, “Main Lenders”, “Basic Approach to Corporate
Governance”, “Summary of Company Organizational Bodies and Key Meetings”, “Policy andProcedures on Nomination of Candidates for Directors and Corporate Auditors”, “Outside Directors
and Corporate Auditors”, “Summary of Contract for Limitation of Liability”, “Summary of Directors
and Officers Liability Insurance”, “Summary of Evaluation of the Effectiveness of the Board of
Directors”, “Information on Shares Issued by the Company”, “Information on Shares Held by theCompany”, “Company Framework and Policies” and “Accounting Auditors” of Business Report-“Consolidated Statements of Financial Position”, “Consolidated Statements of Income”, “Consolidated
Statement of Changes in Equity” and “Notes to Consolidated Financial Statements” of Consolidated
Financial Statements- “Non-consolidated Balance Sheet”, “Non-consolidated Statements of Income”, “Statement of Changes in
Net Assets” and “Notes to Non-consolidated Financial Statements” of Financial Statements-“Accounting Audit Report on Consolidated Financial Statements”, “Accounting Audit Report on Nonconsolidated Financial Statements” and “Board of Corporate Auditors’ Report” of Audit Report[Translation for Reference and Convenience Purposes Only]

Table of Contents
Business Report
Matters Concerning the Current State of SUBARU GROUP ････････････････････

1

Directors and Corporate Auditors ･････････････････････････････････････････

2

Information on Shares Issued by the Company ･･･････････････････････････････

7

Information on Shares Held by the Company ････････････････････････････････

8Company Framework and Policies ････････････････････････････････････････

9

Accounting Auditors ･･･････････････････････････････････････････････････

15

Consolidated Financial Statements
Consolidated Statements of Financial Position ･･･････････････････････････････

16

Consolidated Statements of Income ････････････････････････････････････････

18

Consolidated statement of changes in equity ･････････････････････････････････

19

Notes to Consolidated Financial Statements ･････････････････････････････････

20

Non-consolidated Financial Statements
Non-consolidated Balance Sheet ･･････････････････････････････････････････

39

Non-consolidated Statements of Income ････････････････････････････････････

41

Non-consolidated statements of changes in net assets ･･････････････････････････

42

Notes to Non-consolidated Financial Statements ･･････････････････････････････

43

Audit Report
Accounting Audit Report on Consolidated Financial Statements ･････････････････

51

Accounting Audit Report on Non-consolidated Financial Statements ･･････････････

54

Board of Corporate Auditors’ Report ･･･････････････････････････････････････

57

[Translation for Reference and Convenience Purposes Only]

Business Report
1. Matters concerning the status of SUBARU GROUP(1) Main Businesses (as of March 31, 2023)
By Business Segment

Main Products

Automobile Division

Legacy, Levorg, WRX, Forester, Solterra, Ascent
Impreza, Crosstrek (formerly SUBARU XV), SUBARU BRZ
REX, Justy, Chiffon, Stella, Pleo, Sambar

Aerospace Division

Airplane, aerospace related machinery and components

Other Businesses

Real estate leasing(2) Major Places of Business, Etc. (as of March 31, 2023)[1] Company
Name

Address

Head Office

Shibuya-ku, Tokyo

Tokyo Office

Mitaka-shi, Tokyo

Gunma Plant

Ota-shi, Gunma, Oizumi-machi, Oura-gun, Gunma

Utsunomiya Plant

Utsunomiya-shi, Tochigi; Handa-shi, Aichi

SUBARU Test & Development Center

Sano-shi, Tochigi; Bifuka-cho, Nakagawa-gun, Hokkaido[2] Domestic Subsidiaries/Overseas Subsidiaries
Please refer to “(5) Status of Principal Subsidiaries, Etc.” (pp. 39-40) of Business Report in the Notice ofConvocation of the 92nd Ordinary General Meeting of Shareholders.

(3) Main Lenders (as of March 31, 2023)
LenderAmount of Borrowings (Million yen)Mizuho Bank, Ltd.

52,500MUFG Bank, Ltd.

23,900Sumitomo Mitsui Banking Corporation

23,000Sumitomo Mitsui Trust Bank, Limited

13,000

The Norinchukin Bank

13,0001

[Translation for Reference and Convenience Purposes Only]

2. Directors and Corporate Auditors(1) Basic Approach to Corporate Governance
The Company aims to become a company “Delivering happiness to all,” its vision, and is striving tostrengthen corporate governance as one of the most important challenges for management in order to obtain thesatisfaction and trust of all stakeholders through achievement of sustainable growth and improvement of
medium- and long-term corporate value.
We aim to achieve efficient management by clearly separating management decision-making and oversightfrom business execution and increasing the speed of decision-making. Furthermore, through monitoring ofbusiness operations and advice provided by outside officers, we ensure appropriate management decisionmaking, oversight and business execution, and work to improve the systems for managing risks and ensuring
compliance. To increase management transparency, we provide timely and appropriate disclosure of information.

(2) Summary of Company Organizational Bodies and Key Meetings
As a corporate governance system, we have adopted a Board of Corporate Auditors system, in which Board of
Directors and the Board of Corporate Auditors perform decision making and oversight of the execution of importantbusiness operations. The Board of Directors was comprised of nine members at the end of March 2023, of whom threewere highly independent outside directors. The Board of Corporate Auditors is composed of five members, three ofwhom are highly independent outside corporate auditors. This system is designed to ensure soundness and efficiency
of operations by enhancing effectiveness of monitoring of business operation through the involvement of highly
independent outside directors and outside corporate auditors.
Regarding the system for the execution of business operations, we employ an executive officer system to delegate
the business execution authorities of directors to corporate vice presidents so as to clearly separate management
decision-making and oversight from business execution thus increase the speed of decision-making.

(3) Policy and Procedures on Nomination of Candidates for Directors and Corporate Auditors
The Company believes that the composition and scale of the Board of Directors should strike a right balance ofknowledge, experience, and ability as a whole necessary for the Company’s sustainable growth and improvement of
medium- to long-term corporate values. We also believe that the composition of the Board of Directors should ensure
substantial diversity by taking into consideration gender and internationalization.
As for the nomination policy for directors, internal directors are nominated based on comprehensive evaluation andjudgment of experience, knowledge, and expertise in light of requirements for officers derived from the Company’s
corporate philosophy and management strategy. Multiple outside directors are nominated from business executives
and experts taking into account their experience, knowledge, and expertise. The number of directors is no more than
15 persons for internal and outside directors combined, as set forth by the Articles of Incorporation.
The Company has voluntarily set up an Executive Nomination Meeting in order to enhance the effective
governance structure based on the existing organizational design. To ensure fairness and transparency in decisions on
executive appointments, the Executive Nomination Meeting, in accordance with inquiries from Board of Directors,
submits to the Board of Directors proposals on the nomination of candidates for directors and corporate auditors
sufficiently deliberated on and approved by its members, more than half of them are independent outside directors.
These personnel matters are decided by a resolution of the Board of Directors. The Executive Nomination Meeting in
the fiscal period under review comprised of three outside directors and two internal directors, with its chairman being
Director and Chairman Kazuo Hosoya. It met seven times in the fiscal period under review and discussed matters suchas the Company’s executive structure and appointments, the division of duties of executives, and the appointment ofrepresentatives of major consolidated subsidiaries upon improving the transparency of the process to nurture andselect CEO and other officers by effectively using the successor plan for CEO and other officers, a 360-degree
evaluation, and skill matrix of officers.
Consent by the Board of Corporate Auditors is obtained for nomination of candidates for corporate auditors.
When nominating candidates for directors and corporate auditors, the Meeting briefs the Board of Directors on
biography, posts and main fields of responsibilities in the Company, significant positions concurrently held, andreasons for nominating the candidates for each nomination.

2

[Translation for Reference and Convenience Purposes Only](4) Outside Directors and Corporate Auditors
Title

Name

OutsideDirector

Yasuyuki Abe

OutsideDirector

Natsunosuke Yago

OutsideDirector

OutsideCorporate
AuditorOutsideCorporate
AuditorOutsideCorporate
AuditorNote:

Key activities and summary of duties performed in their expected roles
Attended all of 13 Board of Directors meetings (attendance rate: 100%).
Fulfilled his role as sound adviser on the Company’s management,
providing comments based on extensive experience and knowledge inbusiness management and an advanced understanding of the field of IT, as
well as abundant experience and insight he gained through his tenure as
officer of a general trader where he was involved in management in both asupervisory and executional capacity.
He also served as a member of the Executive Nomination and Executive
Compensation Meetings.
Attended all of 13 Board of Directors meetings (attendance rate: 100%).
Fulfilled his role as sound adviser on the Company’s management,
providing comments based on extensive experience and broad knowledge
and an advanced understanding of the field of internal control andgovernance, as well as abundant experience and insight he gained throughhis tenure in corporate management positions where he was involved inmanagement in both a supervisory and executional capacity.
He also served as a member of the Executive Nomination and Executive
Compensation Meetings.

Miwako Doi

Attended all of 13 Board of Directors meetings (attendance rate: 100%).
Fulfilled her role as a sound advisor on the Company’s management,
providing comments based on her high expertise and knowledge, given her
abundant experience and outstanding track record mainly as a researcher
and supervisor in the area of information technology.
She also served as a member of the Executive Nomination and Executive
Compensation Meetings.

Shigeru Nosaka

Attended all of 13 Board of Directors meetings (attendance rate: 100%) and11 out of 12 Board of Corporate Auditors meetings (attendance rate: 91.7%).
Fully performed his auditing function, providing comments based on
experience and knowledge he gained through his tenure as officer of a listedcompany, particularly broad experience and knowledge on accounting andfinance in corporate activities.

Kyoko Okada

Attended all of 13 Board of Directors meetings (attendance rate: 100%) and11 out of 12 Board of Corporate Auditors meetings (attendance rate: 91.7%).
Fully performed her auditing function, providing comments based on
experience and knowledge she gained through her tenure as officer of alisted company, particularly broad experience and knowledge on CSR andcorporate culture in corporate activities.

Yuri Furusawa

Following her appointment on June 22, 2022, attended all of 10 Board of
Directors meetings (attendance rate: 100%) and all of 10 Board of Corporate
Auditors meetings (attendance rate: 100%). Fully performed her auditing
function, providing comments based on broad perspective and a high levelof insight she gained through holding key positions in the Ministry of Land,
Infrastructure, Transport and Tourism, and having been involved in the
promotion of workstyle reform, active participation by women and diversity
in the Cabinet Secretariat, as well as in the overseas business developmentin the private sector.

In addition to the number of Board of Directors meetings held in the above table, one resolution was adopted in writingthat was deemed to be a resolution of the Board of Directors in accordance with Article 370 of the Companies Act and the
Articles of Incorporation.

3

[Translation for Reference and Convenience Purposes Only](5) Summary of Contract for Limitation of Liability
The Company has executed a contract for limitation of damages under Article 423, Paragraph 1 of theCompanies Act pursuant to the provisions of Article 427, Paragraph 1 of the act with Outside Directors
Yasuyuki Abe, Natsunosuke Yago, and Miwako Doi, and Corporate Auditors Yoichi Kato, Hiromi Tsutsumi,
Shigeru Nosaka, Kyoko Okada, and Yuri Furusawa. The maximum liability for damages pursuant to suchcontract shall be the amount prescribed in Article 425, Paragraph 1 of the Act.

(6) Summary of Directors and Officers Liability Insurance
The Company has executed a directors and officers liability insurance policy under which directors, corporate
auditors, executive officers, officers dispatched to other companies, and major employees under the Companies
Act of the Company and its specified subsidiaries are the insured parties with an insurance company, as set forthin Article 430-3, Paragraph 1 of the Companies Act. The insurance policy covers compensation for damages andlegal expenses to be borne by the insured in cases when they receive a claim for damages as a result of theirwrongful acts conducted in their capacity as directors and officers. However, to ensure appropriate execution ofduties by directors and officers, there are certain liabilities that are not covered under the policy, such as thosearising from actions performed in knowing violation of law. The premiums are fully paid by the Company and
Hokuriku Subaru Inc. and there are no premiums actually paid by the insured.

(7) Summary of Evaluation of the Effectiveness of the Board of Directors
The Board of Directors periodically conducts analysis and evaluation on the effectiveness of the Board of
Directors (“BoD”) in accordance with the Corporate Governance Guideline, and reviews and implements
improvement measures for the issues identified.
In the fiscal year ended March 31, 2023, aiming to apply the results of the evaluations toward enhancing the
BoD’s functions, the BoD confirmed efforts to address issues recognized in previous evaluations, reorganized
the evaluation items on the survey and implemented interviews with certain directors, and assessed and analyzed
the reasons and underlying factors behind differences in the recognition of issues. The results of this process arereported below.
[1] Evaluation and Analysis Methods(Timing of implementation: January 2022/respondents: 14 directors and corporate auditors)
Process 1

Third-party body conducts anonymous self-evaluation survey of directors and auditors

Process 2

Third-party body conducts interviews with the chair of the BoD, Representative Director andPresident, and outside directors

Process 3

Third-party body aggregates and analyzes survey responses and interviews

Process 4

BoD verifies and discusses reports received from third-party bod[2] Evaluation results【General evaluation】-

The BoD is making solid, gradual progress on improvements by taking advantage of social
gatherings of management personnel*, enhancing discussions on the Executive Nomination
Meeting, and taking other steps.

-

Improvements have been made in efforts aimed at “enhancing the quality of discussion of mediumto long-term management strategy” and “enhancing discussions on the establishment of a system toappropriately address newly identified risks,” two areas for improvement that emerged in last fiscal
year’s evaluation.

4

[Translation for Reference and Convenience Purposes Only]【Characteristics of the Subaru Corporation BoD】
item

Summary

A BoD with a focus on
the monitoring function

Both inside and outside officers recognize that the roles of the BoD are to
examine the execution of business and monitor the status of various initiatives.

A framework conducive
to open provision of
information to the BoD

Business divisions appropriately provide information to outside officers throughmeasures such as sharing internal information, offering opportunities for visits tofactories and other sites, and utilizing social gatherings of management
personnel. The company environment where outside officers can obtain access tointernal materials and contact inside officers as necessary.

A united commitment toenhancing the value ofthe Subaru brandOutside officers share in Subaru employees’ consistent commitment to pursuingthe “Evolution of the SUBARU Difference.”【Future points to examine for further enhancing the effectiveness of the BoD】
item
Summary
Discussing medium- to longterm management strategy(a continuing point for examination)

The BoD confirmed the need to establish common ground in approaching
discussions of medium- to long-term management strategy in theautomobile industry, where constant, rapid transformation contributes to alack of clarity and certainty, so that it can optimally fulfill its supervisory
responsibility.

The BoD confirmed the need to work on rolling out information via the
Further bolstering the support
BoD Secretariat in order to help outside directors perform their functions
system foroutside directors
more effectively than before.
Further improving
the effectiveness of the
Executive Nomination
Meeting

The BoD confirmed that it has been making solid progress through various
efforts, including discussions of succession plans for the CEO position andother posts as well as skills matrices for officers, and will strive toimplement continuing initiatives and propel further evolution.

*：Events for the exchange of opinions on important topics for corporate management, held by directors and corporate
auditors but not requiring resolution(Reference) Survey results

1 = Strongly disagree; 2 = Disagree; 3 = Agree; 4 = Strongly

5[Translation for Reference and Convenience Purposes Only](Reference) Survey question items
Evaluation item
Recognition of the roles and functions of the Board of Directorsⅰ

BoD roles and functions

Delegation of authority to execution
Reporting system
Supervision of corporate management
Size of the Board of Directors

ⅱ

BoD composition

Composition of the Board of Directors (ratio of inside to outside directors)
Composition of the Board of Directors (diversity and expertise)
Frequency, length, and time allocation of meetings
Relevance of agenda items
Timing of proposals and discussions
Quality and quantity of documentsⅲ

BoD operation

Timing of document distribution
Prior explanation
Content of explanations and reports
Discussions by the Board of Directors
Leadership by the Chair
Environment and systems for the provision of informationⅳ

BoD support system

Provision of information to outside officers
Training of outside officers
Training of inside officers
Diverse values
Stakeholder perspectivesⅴ

BoD culture and communication

Directors and business divisions
Inside and outside directors
Directors and corporate auditors
Risk managementⅵ

BoD risk management andinternal controlⅶ

Executive Nomination Meeting and Executive Compensation Meeting operation

Group governanceInternal control and compliance
Supervision of proper disclosure of information to shareholders and investorsⅷ

Shareholder dialogue

Sharing the views of shareholders and investors
Enhancing dialogue with shareholders and investors

ⅸ Continued BoD improvements
Status of improvements based on the previous fiscal year's effectiveness evaluation
For more information about the BoD Effectiveness Evaluation for the fiscal period under review, visit our website(https://www.subaru.co.jp/en/csr/pdf/governance_report_e.pdf).
For more information about the Company’s Corporate Governance Guidelines, visit our website(https://www.subaru.co.jp/en/csr/pdf/governance_guideline_e.pdf).

6

[Translation for Reference and Convenience Purposes Only]

3. Information on Shares Issued by the Company (as of March 31, 2023)
(1)
(2)
(3)
(4)

Common Stock AuthorizedCommon Stock Issued
Number of Shareholders
Major Shareholders (top 10)

1,500,000,000 shares
769,175,873 shares (including 1,794,065 treasury shares)
139,908 persons (down 7,599, or -5.4%)
Number of shares held
(in thousands)

Percentage of total
shares held (%)

Toyota Motor Corporation

153,600

20.02

The Master Trust Bank of Japan, Ltd. (trust account)

115,024

14.99

Custody Bank of Japan, Ltd. (trust account)

47,682

6.21

STATE STREET BANK AND TRUST COMPANY 505103

11,128

1.45

STATE STREET BANK WEST CLIENT - TREATY 505234

10,198

1.33

MIZUHO SECURITIES ASIA LIMITED - CLIENT A/C

10,1651.32

Mizuho Bank, Ltd.

10,0781.31

SSBTC CLIENT OMNIBUS ACCOUNT

9,287

1.21

Sompo Japan Insurance Inc.

8,267

1.08

JP MORGAN CHASE BANK 385781

8,035

1.05

Name of shareholder

Notes: 1.
2.

Number of shares held is rounded off to the nearest thousand shares.
The percentage of total shares held is calculated based on the number of shares excluding treasury stock of 1,794,065 shares.

(5) Status of the Company’s Shares Granted to Directors as Consideration for the Executionof Duties in the Fiscal Period Under Review
The Company grants restricted stock units to Directors (excluding Outside Directors ; hereinafter the same
shall apply) for the purpose of providing them an incentive for sustained improvement of the Company’s
corporate value and further value sharing with the shareholders, and provides monetary compensation for that
(hereinafter, “Restricted Stock Compensation Plan”). Based on the resolution of the Board of Directors,
Directors shall wholly contribute the monetary compensation claim paid as above in the form of properties
contributed in kind, and shall, in return, receive shares of the Company’s common stock through issuance ordisposal. In addition, for the issuance or disposal of shares of the Company’s common stock, the Company andeligible Directors shall enter into a restricted stock allotment agreement that includes provisions such as the one
to restrict the transfer of the shares for the period starting from the date of allotment through the date the
Director retires from the position (however, if the Director is consecutively appointed the Company’s corporate
vice president after retiring from the Director’s position, the period through the date of retirement as corporate
vice president).
Details of stock units that the Company has granted under the Restricted Stock Compensation Plan are as
follows.
Category

Number of shares

Grantees

Directors (excluding Outside Directors)

20,8485

Outside Director--

Corporate Auditors

-

-

7

[Translation for Reference and Convenience Purposes Only]

4. Information on Shares Held by the Company (as of March 31, 2023)(1) Basic Policy Regarding Cross-shareholdings
The Company holds discussions with the companies whose shares it holds as cross-shareholdings and theBoard of Directors every year measures the benefits of holding them quantitatively using dividend payout ratio
and capital cost using WACC and compares and verifies them. Based on the result, it continues with the crossshareholdings only when it judges that they would qualitatively contribute to the medium- to long-term
management and business strategies.
In accordance with the above policy, the Company has steadily reduced the number of listed stocks held as
cross-shareholding. As a result, 60 issues held at the end of March 2015 decreased to 2 issues at the end of
March 2021. At this point, the Company judges that retaining cross-shareholdings in the two issues for thereason described in (2) below, and it will continue to hold discussions with these companies at least once a year
and the Board of Directors will evaluate and examine the cross-shareholdings every year and judge whether or
not to retain them.

(2) All Stocks Held Primarily for Strategic PurposesIssuesThe Gunma
Bank, Ltd.

MizuhoFinancial Group,
Inc.
Notes: 1.
2.

91st
92nd (Current)
Does it own
Purpose of holding, impact of holding and reason for increase in
Number of shares
SubarunumberofsharesAmount reported on the balanceshares?
sheet (Millions of yen)
The Gunma Bank, a local bank of the area where the2,850,468
2,850,468 Company’s main factory resides, is supporting not only theCompany but also local supplier sites in Japan and abroad
through its financial services. As the bank has been the
Yes
Company’s important partner, the Company will continue to
1,009
1,263 hold the bank’s shares to promote fair and smooth financialtransactions.

372,097583

372,097
699

The Mizuho Financial Group firms have been supporting theCompany with financial transactions and other services. In
particular, the Mizuho Bank has long been the Company’s
most important financial partner, providing support in a broad
area of management. The Company will continue to hold thegroup’s shares to promote fair and smooth transactions.

Yes

The indication of whether the company has shareholdings in Subaru, in the case where the company is a holding
company, reflects holdings by subsidiaries that Subaru mainly has dealings with (effective shareholdings).
The Company does not have investment shareholdings purely for investment purposes.

8[Translation for Reference and Convenience Purposes Only]

5. Company Framework and Policies
Framework for ensuring conformity of performance of duties by the directors to the laws
and articles of incorporation, and other frameworks for ensuring appropriateness of a jointstock company’s business as well as appropriateness of business of the corporate group
comprising of the Company and its subsidiaries (as of March 31, 2023)
1. Framework to ensure that the performance of duties by the directors comply with the laws andarticles of incorporation
Following framework shall be established as a preventative measure against illegal acts by directors:(1) Directors shall establish a framework for effective supervision of performance of duties by other directors
and effective audits by the corporate auditors, through activities such as attendance of various meetings,
review of approval forms, and receiving business reports from corporate vice presidents and employees by
the directors and corporate auditors.
(2) Establish rules regarding compliance and a framework for ensuring that Directors comply with laws,
articles of incorporation and internal rules.
(3) Establish whistle blowing system (Compliance Hotline) as internal reporting framework where violationof laws/articles of Incorporation by directors in performing their duties have been identified by executive
officers/employees.
(4) Conduct compliance related trainings by external experts for directors as necessary.
(5) A director who identifies violation of laws/articles of incorporation by another director shall immediately
report such violation to the Board of Corporate Auditors and Board of Directors, and implement corrective
measures.
2. Establishment of other systems prescribed by the applicable Ordinance of the Ministry of Justice assystems necessary to ensure the properness of operations of a Stock Company and the business of thecorporate group comprising of the stock company and its subsidiaries(1) Structure concerning storage and management of information related to performance of duties of
directors
i. Establish internal rules on storage and management of minutes of the Board of Directors, approvalforms, other documents related to performance of duties by directors, and other information, andappropriately store and manage such information in accordance with such rules and laws.
(2) Rules and other frameworks on management of risk of lossi.
The Company shall work out rules regarding risk management and establish rules, manuals and guidelines
corresponding to the business of each division to prevent risks from materializing or increasing.
ii. Business-related risks shall be scrutinized by the directors and corporate vice presidents in accordance with certain
approval rules, and the Corporate Planning Department shall lead the management by each division/company andshared corporate operation departments at the headquarters.
iii. Establish a company-wide emergency communication network to ensure prompt response to emergencies andprevent spreading of losses.
To promote risk management, establish a risk management and compliance committee to deliberate/discuss, decide,exchange/communicate information on significant matters pertaining to risk management.
(3) ramework to ensure efficient performance of duties by Directors
i. An executive officer system shall be implemented to delegate the business execution authorities of
directors to corporate vice presidents. Chief Operating Officer (COO), or CEO if there is no COO, shallsupervise the business execution. Chief Executive Officer (CEO) shall supervise the overallmanagement.
ii. Directors shall supervise the business execution of corporate vice presidents and employees byattending meetings and receiving regular business reports.
iii. Discuss projects to be deliberated at the Board of Directors meeting in advance at Management
Meetings (a preliminary consultation body for the Board of Directors to deliberate on company-widebusiness projects) and Executive Meetings (decision making body for each executive unit) to clarify
issues for efficient deliberation at the Board of Directors meeting.
iv. Board of Directors shall establish the medium- to long-term management goals, promote sharing of suchgoals, and periodically review the progress.
9[Translation for Reference and Convenience Purposes Only]v.

Board of Directors shall periodically conduct self-evaluation and analysis, to ensure effective
performance of roles and obligations of the directors both in terms of decision making and supervision
over business execution.

(4) System to ensure conformity of execution of operations of executive officers and employees withlaws and articles of incorporationi. Establish rules on compliance and a framework to ensure that executive directors and employees
comply with laws, articles of incorporation and internal rules.
ii. To promote compliance, establish a risk management and compliance committee to deliberate/discuss,
decide, exchange/communicate information on significant compliance matters.
iii. Structured education shall be conducted for executive directors and employees such as compliancelectures, to promote compliance awareness.
iv. Establish a whistle blowing system (Compliance Hotline) as an internal reporting framework in case
executive officer or employees identify illegal business acts, etc.
v. Establish an independent audit department as an internal audit entity.
(5) Framework for securing appropriateness of business in corporate groupi. In order to enhance the Group’s brand value and its overall potential through sound operation of groupsubsidiaries, establish rules on subsidiary management, and manage/support subsidiaries mainly throughthe Company’s department in charge of management of business or management of each subsidiarypursuant to such rules. At the same time, create a framework where subsidiaries are to make periodic
reports as well as extraordinary reports as required on necessary matters to the Company.
ii. The Company shall encourage its subsidiaries to establish rules tailored to each subsidiary’s businesscharacteristics, including rules on risk management, manuals, guidelines, etc. and build risk
management systems corresponding to the characteristics of each subsidiary’s business, to prevent risks
from materializing or increasing.
iii. The Company shall ensure efficiency of performance of duties by directors of subsidiaries by receiving
business reports from subsidiaries pursuant to the rules on subsidiary management, and conducting
preliminary discussions on business for significant matters, etc.
iv. The Company shall establish Audit Department as an organization that performs internal audits, andperform periodic business audits for affiliates including subsidiaries and related companies, andextraordinary audits for necessary matters as required.
v. The Company shall periodically convene Corporate Auditors of domestic affiliates and exchange
opinions with the Company’s Corporate Auditors to enhance audit functions at domestic affiliates.
vi. The Company shall concurrently appoint executive officers and employees as Corporate Auditors ofsome of the domestic affiliates to enhance the audit function.
vii. The Company shall apply the whistle blowing system (Compliance Hotline) in (4) above to domestic
affiliates.
viii. Overseas subsidiaries are to comply with the local laws, and follow a framework pursuant to this policy
to the extent possible.
(6) Matters concerning an employee where Corporate Auditors request for an employee to support
his/her duties
i. In response to request by Corporate Auditors, one or more staffs shall be allocated from the Company’s
employees to support the duties of the Corporate Auditors.
(7) Matters related to securing independence of the employee from directors and effectiveness of
instruction to the employee from Corporate Auditors
i. In case such supporting staff is to be concurrently appointed to a position involving business execution,
directors and executive units shall not intervene with the staff’s performance of tasks supporting the
Corporate Auditors; ensure the staff’s independence from directors; and notify the Company’s officers
and employees that such supporting staff is to follow the instructions and orders of the Corporate
Auditors.
ii. Appointment of such supporting staff shall require consent by the Board of Corporate Auditors.

10

[Translation for Reference and Convenience Purposes Only](8) Framework for reporting by directors, executive officers, and employees of the Company and its
subsidiaries to the Company’s Corporate Auditors; frameworks for other reports to the Company’s
Corporate Auditors; and the framework for securing effective audit by the Company’s Corporate
Auditors
i. A system shall be established to ensure that the Company’s Corporate Auditors can receive periodic
reports on performance of duties from the directors, executive officers and employees of the Company
or its subsidiaries.
ii. A system shall be established to ensure that the Company’s Corporate Auditors can collect informationon the status of performance of obligations relating to each business division, etc. by the directors,
executive officers and employees of the Company and its subsidiaries.
iii. Directors of the Company or its subsidiaries shall report to the Company’s Corporate Auditors where
matters that may cause significant damages to the Company, material violation of laws/articles ofincorporation, or other material compliance matters occur.
iv. Corporate Auditors of the Company may attend the Compliance Committee, which is an organizational
body that deliberates/discusses, determines, exchange/communicate information on, important mattersregarding risk management and compliance.
v. The Company and its subsidiary’s Representative Directors, Directors, or Accounting Auditors shallattend meetings to exchange opinions held by the Company’s Corporate Auditor at the request of such
Corporate Auditor.
vi. A framework shall be established to ensure that the person reporting to the Company’s Corporate
Auditors shall not receive disadvantageous treatment for the reason of making the report in thepreceding Item.
vii. A framework shall be established with respect to procedures for advance payment or repayment ofexpenses arising from performance of duties of Corporate Auditors and processing or repayment ofother expenses arising from performance of such duties, to enable smooth processing in accordance with
the invoice, etc. from the Corporate Auditors.
At the Company, CRMO (Chief Risk Management Officer) is leading the corporate group-wide efforts toenhance risk management, working closely with Corporate Planning Department, which performs divisionencompassing functions, and different divisions and companies, with professional support from companywide shared corporate operations departments such as Risk Management & Compliance Office and Legal
Department. Audit Department audits execution of tasks by each division and subsidiary in a planned manner.

11

[Translation for Reference and Convenience Purposes Only]

Summary of operation of framework for securing appropriateness of business
1. Risk management
To prevent the increase and expansion of the Group risks, the CRMO (Chief Risk Management Officer)
appointed by the Board of Directors heads risk management and compliance activities and reports to the Boardof Directors. The Company recognizes risk management activities as one of top priorities for the execution ofduties by Directors and their status has been appropriately deliberated at the Board of Directors meetings andother meetings.
As a system to promote risk management, the Company has appointed risk management officers (job grade ofGeneral Managers) for each department and established “Risk Management & Compliance Committee” chairedby the CRMO to deliberate/discuss, decide, and exchange/communicate information on important matters.
Taking into consideration the group-wide “Risk Management Policy” formulated by CRMO, “RiskManagement Code of Conduct” formulated by risk management officers, and its corporate characteristic, theCompany has been continuing with the activities to control risks in normal times based on “Risk Map” thatsummarizes priority issues from a company-wide perspective.
The Company has also been implementing a third-party evaluation regarding its risk management activities
and held workshops on risk management methods among other measures with the aim of vitalizing its activities
and improving effectiveness.
The Company has developed “Safety Confirmation System” and other means based on “Emergency
Response Basic Manual” as the company-wide emergency contact system in preparation for information sharing
in the case of disasters that might affect the Company.
Key efforts regarding enhancement of risk management system
The Company has been conducting training sessions featuring business continuity in the event of alarge-scale natural disaster and implementing initiatives preparing for business continuity of eachdepartment.
-

The Company formulated “Initial Response Guidelines” for large-scale disasters as part of preparations
during normal times and to share and ensure implementation of the action guidelines.

-

The Company implements initiatives to reduce key risks associated with the Group such as cyberattacks and disruption of supply chains and promotes their effectiveness through regular follow-up by
Risk Management & Compliance Committee.

-

The Company strictly operates the Approval Rules in response to business-related risks. All approved
items are reviewed and scrutinized by Directors and Corporate Auditors to confirm there are no issues.

12[Translation for Reference and Convenience Purposes Only]
2. Situation of efforts to enhance complianceTo ensure all executives and employees of the Group comply with laws and regulations, the articles ofincorporation, and internal rules, and act in accord with social ethics and norms, the Company is working tomaintain and enhance the group-wide compliance system by establishing the Corporate Code of Conduct,
Conduct Guidelines, and other rules, while setting up and operating various committees.
As a system to promote compliance within the Company, the CRMO is leading compliance activities, while
the Risk Management & Compliance Committee formulates policies, deliberates/discusses, decides, andexchanges/communicates information on important matters, such as the activities of each department and theoperation of the whistle blowing system, and reports these activities to the Board of Directors.
The Company and its subsidiaries notify the whistle blowing system they respectively have establishedthrough compliance training and other means and appropriately and proactively operate it to detect and solve
problems that cannot be grasped with the reporting systems for regular operations. The increasing trend in thenumber of such systems being operated keeps in check the occurrence of problems and is showing results
suitable for the purpose of improving self-cleaning and effectiveness of compliance.

The Risk Management & Compliance Office manages these company-wide activities and works to promotecompliance awareness throughout the Group, by creating and providing “Compliance Manual” and conducting
trainings in cooperation with relevant departments.
Key efforts to enhance the compliance system- Further improvement in compliance awareness of all employees through revision of “Compliance Manual”
and promotion such as video-based training and e-learning.
- Strengthening of self-check of internal control so that the companies can autonomously implement PDCA
for legal compliance system throughout the Group.
- Improvement of effectiveness and trustworthiness of the whistle blowing system by making the service
available in multiple languages (English, Chinese, Portuguese, and Spanish) and designation of employees
engaged in operation of whistle blowing system.

13

[Translation for Reference and Convenience Purposes Only]
3. Securing efficient performance of duties
The Company has introduced an Executive Officer System with the aim of ensuring speedy businessexecutions by the Directors through the delegation of business executions to the Executive Officers andsupervising the Executive Officers by attending various meeting bodies and receiving periodic business reports.
We position the president and other executive roles as executive officers, instead of directors, to clarify the roles
and responsibilities assigned to directors and executive officers.
Significant matters requiring submission to the Board of Directors were deliberated at the Executive Meeting
to deepen the discussion and discussion points that should be subjected to deliberation by the Board of Directors
were clarified by sorting out discussion points and providing directionality. Deeper and efficient discussion at
the Board of Directors meeting is being promoted by, for example, early distribution of materials and providing
preliminary explanations.
Documents regarding performance of duties by the directors and other information is being stored andmanaged appropriately in accordance with the internal rules.
4. Securing appropriateness of business by the corporate group comprising of the Company and its subsidiaries
The Company is enhancing the audit and supervisory functions by appointing executive directors andemployees of the Company to concurrently work as directors or Corporate Auditors of subsidiaries. In addition,
the Company receives periodic and ad hoc reporting from subsidiaries through departments in charge ofindividual subsidiaries, has discussions where necessary, and issues that have significant impact on the
Company are reported to the Executive Meeting.
To ensure that business activities are carried out strictly in accordance with “Company-wide Subsidiary
Management Rules”, the subsidiaries’ projects that should be subject to preliminary discussions with theCompany and projects to be determined at the discretion of subsidiaries were distinguished. In addition, theinformation communication routes from subsidiaries to the Company were confirmed, and ongoing confirmation
is being made on the establishment of rules at subsidiaries.
To further enhance these operations, the Company has integrated business-based management by departmentsin charge of subsidiaries and organization-based management to realize a system that further ensures theappropriateness of subsidiaries’ businesses as a corporate group.
Furthermore, the Company’s internal audit division performs business audits for the Company and its
subsidiaries in accordance with the Internal Audit Rules. Their results are reported at the Executive Meeting, andcorrective measures are implemented where necessary.
5. Securing effectiveness of Corporate Auditors’ Audit
The Company has formulated rules to ensure the effectiveness of Corporate Auditors’ audit (e.g., Standards
for Corporate Auditor’s Audit), developed a whistle blowing system, and established a framework where the
Corporate Auditors can gather information from directors and employees in a timely and appropriate manner incase of matters that may cause significant damages to the Company, significant violation of laws/articles ofincorporation, or other significant compliance matters. In addition, the framework ensures smooth performanceof Corporate Auditors’ duties by assigning employees independent from directors to support duties of Corporate
Auditors and making them known to all employees. Also, we have added one assisting employee from the fiscal
period under review to further enhance execution of duties by Corporate Auditors and increase support.
The Company’s Corporate Auditors attend important meetings including the Board of Directors, Executive
Management Board Meeting, and Risk Management & Compliance Committee meetings, and state theiropinions as necessary. In addition, periodic interviews with directors and executive officers as well as on-site
audits of key offices and subsidiaries are performed to confirm the status of establishment and operation of theinternal control system.
Moreover, the Corporate Auditors receive monthly reports including the operational status of the whistle
blowing system from Internal Audit Division, Legal Division, and Risk Management & Compliance Office, andreports on subsidiaries are received as necessary from departments in charge of managing the subsidiaries.
The Company also promotes close mutual collaboration under the three-pillar audit system by holding
discussion meetings with corporate auditors of core subsidiaries and having information and opinion exchangewith Accounting Auditors every quarter and whenever appropriate and with internal audit divisions as necessary.
The Company has also established a framework that can smoothly process invoices from the Corporate
Auditors for expenses arising from performance of their duties.
14

[Translation for Reference and Convenience Purposes Only]

6. Accounting Auditors(1) Accounting Auditors

KPMG AZSA LLC(2) Accounting Auditor Compensation
Category

Audit fees (million yen)

Non-audit fees (million yen)

The Company

232-

The Company’s subsidiaries

18

7

Total

250

7

Notes: 1.

As the Audit Agreement between the Company and accounting auditors make no distinction between the amounts offees for audits under the Companies Act and audits under the Financial Instruments and Exchange Act, audit fees under
the Financial Instruments and Exchange Act are included in the amount of Audit fees of the Company in the abovetable.
2. Of the Company’s important subsidiaries, the foreign subsidiaries receive audits by a certified accounting or auditing
company other than the Company’s accounting auditors (including those who possess equivalent certifications
overseas).

(3) Reason for Agreement on Accounting Auditors Compensation by Board of Corporate Auditors
The Board of Corporate Auditors scrutinized the Accounting Auditors’ explanation of the contents of theaudit including the planned number of days required for the accounting audit for the current fiscal period; review
and assessment of the audit for the previous fiscal period; reasonableness of progress in audit by the Accounting
Auditors, and the grounds for calculation of quotes underlying the compensation, and agreed to the amount ofcompensation for the Accounting Auditors.

(4) Non-Audit Services
Non-audit services included tax-related services, advisory service regarding accounting and taxation related
to the establishment of holding company in the US. Non-audit services for the consolidated subsidiaries areagreed upon procedures.

(5) Policy on Dismissal or Refusal of Reappointment of Accounting Auditors
The Board of Corporate Auditors shall dismiss accounting auditors in case any of the events prescribed in theItems in Article 340, Paragraph 1 occur, and determine the agenda concerning dismissal or refusal ofreappointment of accounting auditors, and the Board of Directors will propose such agenda to the meeting ofshareholders pursuant to such decision.

15

[Translation for Reference and Convenience Purposes Only]

Consolidated Financial Statements
Consolidated Statement of Financial Position(Unit: Millions of yen)
FYE 2022(as of March 31, 2022)

FYE 2023(as of March 31, 2023)

Cash and cash equivalents

883,074

979,529

Trade and other receivables

337,387357,524

Inventories

483,113592,999

AssetsCurrent assets

Income taxes receivable

18,331

11,049Other financial assets

243,204

388,634

Other current assets

77,134

99,378Subtotal

2,042,243

2,429,113

Assets held for sale－652

Total current assets

2,042,243

2,429,765

Property, plant and equipment

841,553

861,846

Intangible assets and goodwill

250,897

243,926

Investment property

21,942

20,878Investments accounted for using equity method

10,828

9,061

Other financial assets

124,574

116,507

Other non-current assets

161,167

189,108

Non-current assets

Deferred tax assets

90,54973,059Total non-current assets

1,501,510

1,514,385

3,543,753

3,944,150

Total assets

16[Translation for Reference and Convenience Purposes Only](Unit: Millions of yen)
FYE 2022(as of March 31, 2022)

FYE 2023(as of March 31, 2023)

273,546377,279

Financing liabilities

51,64555,596

Other financial liabilities

69,62465,595

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

4,685

27,198Provisions

143,217

141,192

Other current liabilities

309,538

346,622

Total current liabilities

852,255

1,013,482

Financing liabilities

282,400

257,000

Other financial liabilities

81,84890,632

Employee benefits

58,19655,557

Provisions

95,448103,872

Other non-current liabilities

267,530

313,374

5,057

286

Income taxes payableNon-current liabilities

Deferred tax liabilities

790,479

820,721

1,642,734

1,834,203

Capital stock

153,795

153,795

Capital surplus

160,178

160,178

Treasury stocks(6,324)(6,136)

Retained earnings

1,466,322

1,623,699

116,818

169,437

1,890,789

2,100,973

10,2308,974

Total equity

1,901,019

2,109,947

Total liabilities and equity

3,543,753

3,944,150

Total non-current liabilities
Total Liabilities
EquityEquity attributable to owners of parent

Other components of equity
Total equity attributable to owners of parent
Non-controlling interests

17[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Income(Unit: Millions of yen)
FYE 2023(April 1, 2022 toMarch 31, 2023)

FYE 2022(April 1, 2021 toMarch 31, 2022)
Revenue

2,744,520

3,774,468

Cost of sales(2,240,595)(3,037,993)

503,925

736,475

Selling, general and administrative expenses(303,136)(342,015)

Research and development expenses

Gross profit(103,587)(114,400)

Other income

8,447

6,358

Other expenses(13,887)(19,076)

Share of profit (loss) of investments accounted for using equity method(1,310)141

Operating profit

90,452

267,483

Finance income

19,72036,796

Finance costs(3,200)(25,913)

Profit before tax

106,972

278,366

Income tax expense(36,376)(79,282)

Profit for the year

70,596

199,084

70,007200,431589(1,347)70,596

199,084

Basic (yen)91.28

261.33

Diluted (yen)－261.32

Profit for the year attributable to
Owners of parent
Non-controlling interests
Profit for the year
Profit for the year per share attributable to owners of parent

18

[Translation for Reference and Convenience Purposes Only]

Consolidated Statement of Changes in Equity FYE 2023 (April 1, 2022 to March 31, 2023)(Unit: Millions of yen)
Equity attributable to owners of parent
Capitalstock
Balance at the beginning of theyear

CapitalsurplusTreasury
stock

Other
Retainedcomponents
earnings
of equity

Total

Noncontrolling Total capitalinterests

153,795

160,178(6,324)

1,466,322

116,818

1,890,789

10,2301,901,019

Profit (loss) for the year

－

－

－

200,431－200,431(1,347)

199,084

Other comprehensive income(after deduction of tax)

－

－

－

－

60,41160,441

91

60,502－－－200,431

60,411

260,842(1,256)

259,586

－

－

－

7,792

(7,792)－－－

Dividends paid

－

－

－

(50,646)－(50,646)－(50,646)

Purchase of treasury stock

－

－

(4)

－

－

(4)

－

(4)

Disposal of treasury stock

－

(55)

192

－

－

137

－

137

－

55

－

(55)

－

－

－

－

－

－

－

(145)

－

(145)

－

(145)

－

－

188

(50,846)－(50,658)－(50,658)

153,795

160,178(6,136)

1,623,699

169,437

2,100,973

8,974

2,109,947

Comprehensive income

Comprehensive income total
Transfer to retained earnings
Transactions with owners

Transfer from retained
earnings to capital surplus
Change in scope of
consolidation
Total transactions withownersBalance at the end of the year

19[Translation for Reference and Convenience Purposes Only]

Notes to Consolidated Financial Statements(Basis of Preparing Consolidated Financial Statements)
1. Accounting standards of consolidated financial statements
The Group prepares its consolidated financial statements in conformity with International Financial Reporting Standards(“IFRS”) in accordance with Article 120-1 of the Ordinance of Companies Accounting. The Group omits some disclosure
items and notes required by IFRS in accordance with the second sentence of Article 120-1 of the Ordinance of Companies
Accounting.
2. The scope of consolidation and application of the equity method(1) Consolidated subsidiaries: 73
Domestic
50 ……… Fuji Machinery Co., Ltd., Ichitan Co., Ltd., Tokyo Subaru Inc., and 47 others
Overseas
23 ……… Subaru USA Holdings Inc, Subaru of Indiana Automotive, Inc., Subaru of America, Inc., and 20 others(2) Companies accounted for using the equity method: 10
Domestic
7……… Nishino Machine Industries Ltd., and 6 others
Overseas3……… Subaru of Taiwan, Ltd., and 2 others
3. Changes in the scope of consolidation and application of equity method(1) Consolidated subsidiaries
Added
Subaru USA Holdings Inc
ExcludedShin-Subaru Chuhan Co., Ltd.
(2) Companies accounted for using the equity method
Added

-

Excluded-

4. Accounting policies(1) Financial instruments
1. Valuation standards and methods for financial assets(i) Initial recognition and measurement
The Group classifies financial assets as financial assets measured at fair value through profit or loss, financial assets
measured at fair value through other comprehensive income, or financial assets subsequently measured at amortized cost.
The Group initially recognizes trade receivables on the date when they are originated. All other financial instruments are
initially recognized when the Group becomes a party to the contractual provision of the financial instrument.
If financial assets are classified as financial assets measured at fair value through profit or loss, they are initially measured
at their fair value, unless they are initially measured at their fair value plus transaction costs that are directly attributable tothe transaction of the financial asset. Trade receivables that do not contain a significant financing component are initiallymeasured at the transaction price.
Financial assets are classified as financial assets measured at amortized cost if both of the following conditions are met:
・A financial asset is held within a business model whose objective is to hold the asset in order to collect the contractual
cash flows; and・The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
Investments in debt instruments are classified as financial assets measured at fair value through other comprehensive
income if both of the following conditions are met:
・The financial asset is held within the Group’s business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and・The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
When any of the above-mentioned conditions is not met for financial assets except for equity instruments, the financial
assets are classified as financial assets measured at fair value through profit or loss.
Equity instruments may be designated as financial assets measured at fair value through other comprehensive income on an
individual basis, except for equity instruments held for trading purposes. The designation has been applied continuously.
Equity instruments that are not designated as such are classified as financial assets measured at fair value through profit or
loss.

20

[Translation for Reference and Convenience Purposes Only](ii) Subsequent measurement
Financial assets are subsequently measured based on the classification of the asset as follows.
Financial assets measured at amortized cost are using the effective interest method.
Changes in the fair value of financial assets measured at fair value through profit or loss are recognized in profit or loss.
Changes in the fair value of debt instruments measured at fair value through other comprehensive income are recognized inother comprehensive income, except for interest income, exchange gain and loss, and impairment loss recognized in profit
and loss. Gains or losses on derecognition are recognized in profit or loss.
Meanwhile, changes in the fair value of equity instruments measured at fair value through other comprehensive income arerecognized in other comprehensive income. The dividend from relevant financial assets are recognized in profit or loss as
part of the financial income for the period. The cumulative amount recognized in other comprehensive income is notreclassified to profit or loss but to retained earnings when the financial asset is derecognized, or the fair value of the asset
declines significantly.
(iii) Impairment of financial assets
For impairment of financial assets measured at amortized cost, debt instruments measured at fair value through othercomprehensive income, lease receivables, and contract assets, expected credit losses are recognized as a loss allowance.
The Group determines, at the end of each reporting period, whether the credit risk on the asset has increased significantly
since initial recognition. When the credit risk has not increased significantly since initial recognition, an amount equal to
12-month expected credit losses is measured as the loss allowance. When the credit risk has increased significantly sinceinitial recognition, an amount equal to lifetime expected credit losses is recognized as the loss allowance.
However, for trade receivables, lease receivables and contract assets, the loss allowance is always measured at an amountequal to the lifetime expected credit losses.
Expected credit losses of financial instruments are estimated using the following methods:
・An unbiased and probability-weighted amount determined by evaluating a range of possible outcomes;
・The time value of money; and・Reasonable and supportable information about past events, current conditions and forecasts of future economic
conditions that is available without undue cost or effort at the reporting date.
The amounts of these measurements are recognized in profit or loss.
If the amount measured as expected credit losses decreases after recognition of impairment loss, the decreased amount isreversed and recognized in profit or loss.
(iv) Derecognition of financial assets
The Group derecognizes its financial assets only if the contractual rights to receive the cash flows from the financial assets
expire, or if the entity transfers substantially all the risks and rewards of ownership of the financial assets.
2. Financial liabilities(i) Initial recognition and measurement
The Group classifies financial liabilities as either financial liabilities measured at fair value through profit or loss, or
financial liabilities measured at amortized costs. The Group determines the classification at initial recognition. The Group
recognizes financial liabilities when the Group becomes a party to the contractual provisions of the instruments. All thefinancial liabilities are initially measured at fair value. However, financial liabilities measured at amortized cost aremeasured at their fair value less transaction costs that are directly attributable to the transaction.
(ii) Subsequent measurement
Financial liabilities are subsequently measured according to the classification as follows.
Financial liabilities held for trading and derivatives are included in financial liabilities measured at fair value through profit
or loss. They are subsequently measured at fair value, and changes in the fair value are recognized in profit or loss for theperiod.
Financial liabilities measured at amortized cost are subsequently measured at amortized cost using the effective interest
method.
Amortization using the effective interest method and gains and losses on derecognition are recognized in profit or loss as
part of financial income for the period.
(iii) Derecognition of financial liabilities
The Group derecognizes financial liabilities when they are extinguished, i.e. when the obligation specified in the contract isdischarged or cancelled or expires.

21

[Translation for Reference and Convenience Purposes Only]
3. Derivatives and hedge accounting
The Group enters into forward exchange contracts in order to fix cash flows related to the recognized financial assets andliabilities and future transaction. Interest rate swaps are used in order to fix cash flows of interest payable related to theborrowings. There are no derivatives stated above to which hedge accounting is applied.
(2) Valuation standards and methods for inventories
Inventories are measured at the lower of acquisition cost and net realizable value. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated cost of completion and estimated selling expenses. The acquisition
cost is generally calculated using the cost method based on the moving average method and comprises all costs of purchase,costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
(3) Valuation standards, valuation methods and depreciation methods for property, plant and equipment
Property, plant, and equipment is measured based on the cost model and stated at acquisition cost less accumulated
depreciation and impairment losses. The acquisition cost includes costs directly attributable to the acquisition of the asset,
costs related to disassembly, retirement and site restoration, as well as borrowing costs to be capitalized.
Depreciation of assets other than land and construction in progress is calculated on the straight-line method over theestimated useful lives of the assets. The estimated useful lives of major assets are as follows;
・Buildings and structures: 2 to 60 years
・Machinery and vehicles: 2 to 20 years
・Tools, furniture and fixtures: 2 to 20 years
The estimated useful lives, residual value, and amortization methods are reviewed at the end of each fiscal year, and if there
are any changes made, those changes are applied prospectively as a change in an accounting estimate.
(4) Valuation standards, valuation methods and amortization methods for intangible assets and goodwill
1. Goodwill
The Group measures goodwill as the fair value of consideration transferred including the recognized amount of any noncontrolling interests in the acquiree at the acquisition date, less the net recognized amount (usually fair value) of theidentifiable assets acquired and liabilities assumed at the acquisition date.
Goodwill is not amortized. Instead, it is tested for impairment annually and if any indication of potential impairment exists.
Any impairment loss for goodwill is recognized in profit or loss and is not reversed in subsequent periods.
Goodwill is recorded at acquisition cost less any accumulated impairment losses.
2. Capitalized development cost
Expenditures related to research activities in order to gain new scientific and technical knowledge are recognized as expenses
as incurred. Development expenditure is capitalized as intangible assets only when the cost can be measured reliably, there isa technical and commercial feasibility of completing the development, it is probable that the outcome will generate a future
economic benefit, and the Group has intention, ability and sufficient resources to use or sell the outcome of the development
and to complete the development.
The estimated useful lives of capitalized development cost that is amortized using the straight-line method are as follows.
・Capitalized development cost: 2 to 5 years
3. Other intangible assets
The Group applies the cost method in measuring separately acquired intangible assets, which are recorded at acquisition costat initial recognition.
After initial recognition, intangible assets excluding goodwill are amortized using the straight-line method over theirestimated useful lives, and are recorded at acquisition cost less accumulated amortization and impairment losses. Estimateduseful lives of major intangible assets are as follows. The Group has no intangible assets with indefinite useful lives.
・Software: 2 to 10 years(5) Valuation standards, valuation methods and depreciation methods for lease assets
At the inception of the lease contract, the Group assesses whether an arrangement is a lease or contains a lease.
Lease as a lessee
The Group recognizes a right-of-use asset and a lease liability at the inception of the lease.
A right-of-use asset is measured at acquisition cost at the inception of the lease. After the commencement date, a right-of-use

22[Translation for Reference and Convenience Purposes Only]
asset is measured by using the cost model at acquisition cost less accumulated depreciation and impairment losses. A rightof-use asset is amortized from the date of inception to the end of estimated useful life of the underlying leased asset if theownership of the underlying assets is transferred to lessee until the end of the lease term or if acquisition cost of right-of-use
asset reflects the exercise of a purchase option. Otherwise a right-of-use asset is amortized from the date of inception to theearlier of the end of the estimated useful life of the right-of-use asset or the end of the lease term.
A lease liability is measured at the present value of the lease payments that are not paid at the date of inception. After thecommencement date, the carrying amount of the lease liability is increased to reflect interest on the lease liability anddecreased the lease payments made. Lease liabilities are re-measured and carrying amounts of right-of-use assets are revisedor the change is recognized in profit or loss if the Group reviews lease liabilities or if the modification is not accounted for asa separate lease.
As for short-term leases or leases for which the underlying asset is of low value, the Group applies IFRS 16.5, 6, andrecognizes lease payments as an expense using the straight-line method over the lease term.
Lease as a lessor
Lease transactions are classified as finance leases if all the risks and rewards incidental to ownership of underlying assets aresubstantially transferred, and all other leases are classified as operating leases.
A receivable from customer held under a finance lease is initially recognized at the amount of the gross investment in thelease discounted at the interest rate implicit in the lease, and included in Trade and other receivables in the consolidated
statements of financial position.
An underlying asset subject to an operating lease is recognized in the consolidated statements of financial position, and lease
payments from operating leases are recognized as revenue over the lease term.
(6) Investment property
Investment property is held to earn rentals or for benefit from increase in value of the property or both. Investment property ismeasured by using the cost model and is recorded at acquisition cost less accumulated depreciation and impairment losses.
Depreciation of an investment property other than land and construction in progress is recognized on a straight-line basis overthe estimated useful lives of the asset. The estimated useful lives of major assets are as follows;
・Buildings and structures: 2 to 50 years(7) Impairment
At the end of each fiscal year, the Group assesses the carrying amounts of non-financial assets other than inventory anddeferred tax assets to determine whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the asset is estimated. Recoverable amounts of goodwill and intangible assets that are not yet ready for use are
estimated at the same time every year.
The recoverable amount of an individual asset or cash-generating units is the higher of value in use or fair value less costs ofdisposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax
discount rate that reflects the time value of money and the risks specific to the asset. Assets not assessed individually in testof impairment are integrated into the smallest cash-generating unit that generates cash inflows which are largely independentof cash inflows from other assets or a group of assets. Cash generating units of goodwill are determined on the basis of theunits managed for the purpose of internal reporting and are within the scope of business segments before aggregation. The
goodwill acquired in a business combination is allocated to each of the cash generating units that is expected to benefit fromthe synergies of the combination.
Corporate assets in the Group do not generate cash inflows independently. If there is any indication that corporate assets may
be impaired, the Group performs an impairment test based on the recoverable amount of the cash generating unit to which
corporate asset belongs. When the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount, an
impairment loss is recognized in profit or loss. An impairment loss for a cash-generating unit is recognized by first reducing
the carrying amount of any goodwill allocated to the cash-generating unit, and then reducing proportionally the carrying
amount of other assets in the unit.
An impairment loss for goodwill is not reversed. The Group assesses whether there is any indication that an impairment loss
recognized in prior years for an asset other than goodwill may no longer exist or may have decreased at the end of each fiscal
year. An impairment loss is reversed when there has been a change in the estimates used to determine an asset’s recoverable
amount. Impairment losses are reversed up to the amount not exceeding the carrying amount (net of depreciation) that would
have been determined if no impairment losses had been recognized in prior years.
(8) Employee benefits
1. Short-term employee benefits
For short-term employee benefits including salaries, bonuses and paid annual leave, when the employees render related
services, the amounts expected to be paid in exchange for those services are recognized as expenses.

23

[Translation for Reference and Convenience Purposes Only]
2. Retirement benefit plans
The Group sponsors a defined benefit plan and a defined contribution plan as retirement benefit plans for employees.
(a) Defined contribution plans
For defined contribution plans, when the employees render related services, the contribution payables to the defined
contribution plan are recognized as expenses.
(b) Defined benefit plans
The Group has adopted lump-sum payment on retirement and defined benefit pension plans as defined benefit plans. The
present value of defined benefit obligations related current service costs and past service costs are determined using the
projected unit credit method.
The discount rates are determined by reference to market yields at the end of the reporting period on high quality
corporate bonds which have maturities corresponding to the future settlements of benefits in each year.
The net defined benefit liability (asset) is determined as the present value of the defined benefit obligation less the fairvalue of the plan assets. Net interest on the net defined benefit liability (asset) is recognized in profit or loss as financial
expenses. The Group recognizes the difference arising from remeasurement of present value of the defined benefit
obligation and the fair value of the plan asset in other comprehensive income when it is incurred, and reclassifies it
immediately to retained earnings from other components of equity.
The Group recognizes any past service cost as an expense at the earlier of the following dates.
(i) when the plan amendment or curtailment occurs; and(ii) when related restructuring costs are recognized(9) Revenue
1. Revenue from contracts with customer
The Group identifies a performance obligation in a contract with a customer, and recognizes as revenue the amount ofconsideration to which the Group expects to be entitled in exchange for transferring promised goods or services to thecustomer. If variable consideration is included in the consideration promised in a contract with a customer, some or all of
an amount of variable consideration is included in the transaction price only to the extent that it is highly probable that asignificant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with thevariable consideration is subsequently resolved.
Revenue is recognized at a point in time or over a certain period of time in accordance with satisfaction of a performanceobligation in a contract with a customer.
With regard to revenue from the sale of cars, performance obligations are principally considered to be fulfilled at the timeof delivery of the cars, at which point customers obtain control of the cars and revenue is recognized.
In automobile business, fare-paying extended warranty service is provided for the products as an option in addition tonormal warranty. The revenue from the extended warranty service is recognized over a certain period of time in accordancewith the progress of the performance obligation.
2. Revenue from financial lease
When the Group is the manufacturer or dealer lessor, sales revenue, cost of sales and selling profit or loss for a portion
identified as sale of products are recognized in profit or loss at the inception of the leases. Finance income from financial
leases is recognized based on a pattern reflecting a constant rate of return on the net investment in the lease of the Group.
3. Revenue from operating leases
Revenue from operating leases is recognized on a straight-line basis over the lease term.
4. Interest income
Interest income is recognized using the effective interest method
5. Dividend income
Dividend income is recognized when the right to receive the payment is established.

24

[Translation for Reference and Convenience Purposes Only](10) Provisions
Provisions are recognized when the Group has present legal or constructive obligations as a result of past events, it isprobable that outflows of resources embodying economic benefits will be required to settle the obligations, and reliable
estimates can be made of the amount of the obligations. Where the effect of the time value of money is material, theamount of a provision is measured at the discounted present value of the estimated future cash flow using a pre-tax rate thatreflects the time value of money and the risks specific to the liability. The unwinding of the discount due to the passage oftime is recognized as finance costs.
1. Asset retirement obligation
A provision for asset retirement obligation is recognized mainly for the estimated cost of restoring the leased site at the endof the lease term.
2. Provision for product warranties
The Group provides product warranties based on the terms and conditions of warranties granted at the time of product sales,
as well as free repair services on an individual basis in accordance with the notification to the competent authority.
The coverage of product warranties based on the terms and conditions of warranties is determined by the duration, mileage,cause of defects, and other factors in accordance with the terms and conditions of warranties in each country.
The Group recognize estimated warranty costs for the product warranties when products are sold to customers based on theterms and conditions of warranties. The estimated warranty costs are recorded based on the best estimates of future
occurrences, which are based on the past repair experience and past sales volume for the total cost of repairing or replacing
parts due to defects occurring within the warranty period.
The estimated expenses related to the warranty items in accordance with notifications to the competent authority arerecognized as provision for product warranties when it is probable that outflows of resources embodying economic benefits
will be required, and reliable estimates can be made of the amount of the obligations. The estimated expenses are recorded
based on the best estimate of the repair cost per unit, which is calculated based on past experience with product defects, andthe number of units subject to repair, which is calculated based on past experience with product defects.
3. Provision for losses on construction contracts
The provision for losses on uncompleted construction contracts in the Aerospace segment is recorded when substantial
losses on the contracts are anticipated at the fiscal year end and such losses can be reasonably estimated.
4. Provision for environmental measures
The provision for environmental measures is recorded for the amount of the estimated expenses for complying withenvironmental regulations at the end of the fiscal year.
(11) Other principle matters for preparation of the consolidated financial statements
1.Unit of amount
Unit of amount is displayed by rounded off.
2.Application of Group Tax Sharing system
Group Tax Sharing system is applied.

25

[Translation for Reference and Convenience Purposes Only](Revenue recognition)(1) Disaggregation of revenue
The Group has adopted “IFRS 15 Revenue from Contracts with Customers” and recognizes revenue based on the following five
step approach.
Step 1: Identify the contracts with a customer
Step 2: Identify the performance obligations in the contracts
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when performance obligations are satisfied
The automotive segment is mainly engaged in manufacturing and sales of automobiles as well as providing services such as
maintenance.
For sale of vehicles, revenue is recognized primarily at the time of delivery of the product as we consider that upon delivery thecustomer obtains control of the product and the performance obligation is satisfied. Maintenance and other service revenue arerecognized over a certain period of time. Payment for the sale of a product is generally made within 30 days of the transfer ofcontrol of the product to the customer.
The contract with the customer for the sale of the product includes a clause that guarantees that the product complies with theagreed specifications and the Group recognizes the provision for product warranty for the costs related to that warranty. For
details of the provision for product warranty, please refer to "(Basis of Preparing Consolidated Financial Statements) 4.
Accounting policies (10) Provisions 2. Provision for product warranties".
The aerospace segment has contracts with customers. Revenue from contract construction is recognized based on the progress of
performance obligations. The progress is measured by an input method based on the costs incurred. Payments for contracts are
generally made in stages based on the contracts with customers.
The Group's business segment is classified into three categories: automotive, aerospace, and others. Revenue is broken down by
region based on the location of the customer. The relationship between these disaggregated revenues and the revenue of eachreportable segment is as follows:
FYE 2023 (April 1, 2022 to March 31, 2023)(Unit: Millions of yen)
Automotive

Aerospace

Others *3

Total

Revenue from contracts with customers
Japan

527,251

43,401

1,694

572,346

2,809,211

35,611150

2,844,972

Europe86,6437

10

86,660Asia

91,369－991,378Others170,372－26

170,398

3,684,846

79,0191,889

3,765,754

5,705

－

3,009

8,714

3,690,551

79,0194,898

3,774,468

North America

Total
Revenue arising from other sources *2
Total(Note)
1)
The amounts mentioned above reflect elimination of internal transactions.
2)
Revenue recognized from other sources includes lease revenue of products that are accounted for in accordance with "IFRS
16 Leases", etc.
3)
Other segment includes real estate leasing business, etc.

26

[Translation for Reference and Convenience Purposes Only](2) Contract balances
The balances of receivables, contract assets and contract liabilities arising from contracts with customers as of March 31, 2023 is
as follows:(Unit: Millions of yen)
FYE 2023(as of March 31, 2023)
Receivables included in Trade and other receivables

114,526

Contract assets included in Trade and other receivables

17,420Contract liabilities included in other current liabilities

166,460

Contract liabilities included in other non-current liabilities

282,184

The contract assets mainly relate to the Group's right to the consideration for the work of contracts for aircraft production andperiodic repairs in the aerospace business that have been recognized based on measurement of progress. Contract assets aretransferred to receivables when all deliveries of such construction are completed.
The contract liability mainly relates to advance consideration for extended warranty services and other items in the Automotive
business, and to contracts with defense industries in the aerospace business for which revenue is recognized upon completion of
aircraft production and periodic repairs.
Of the revenues recognized in the consolidated fiscal year ended March 31, 2023, the amount included in the contract liability
balance at the beginning of the consolidated fiscal year was 97,977 million yen.
The amount of revenue recognized from performance obligations satisfied (or partially satisfied) in past periods is immaterial.
(3) Transaction price allocated to the remaining performance obligations
Breakdown of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (orpartially unsatisfied) and revenue expected to be recognized for each period are as follows:
There are no significant amounts that are not included in the transaction price among the consideration arising from contracts
with customers. In addition, as a practical expedient, transactions whose expected contract periods are equal to or less than one
year on an individual basis are not included in the following breakdown calculation.
(Unit: Millions of yen)
FYE 2023(as of March 31, 2023)
Within 1 year

208,980

Over 1 year

496,596
Total

705,576(4) Assets recognized from the costs to obtain or fulfil a contract with a customer
The Group has no material incremental costs incurred to obtain or fulfil a contract with a customer that should be recognized asassets.

27

[Translation for Reference and Convenience Purposes Only](Accounting estimates)
Items for which the amount was recorded in the consolidated financial statements for the current fiscal year based on accounting
estimates, and which may have a significant impact on the consolidated financial statements for the following fiscal year, are as
follows.
Deferred tax assets

73,059 million yen

Deferred tax assets are recognized to the extent that it is probable that taxable income will be earned against which the future
deductible temporary differences can be utilized. Deferred tax liabilities are recognized in principle for all taxable temporary
differences.
The calculation of deferred tax assets may be affected by changes in uncertain economic conditions and other factors, and thetiming and amount of actual taxable income may differ from the estimates. This could cause a significant impact on the amount ofdeferred tax assets in the consolidated financial statements for the following fiscal year.
Provision for product warranties

176,189 million yen

The method of calculating the provision for product warranties and the major assumptions used in the calculation are described in(Basis of Preparing Consolidated Financial Statements), 4. Accounting policies, (10) Provisions, 2. Provision for productwarranties.
We believe that we have made sufficient provisions for the warranty costs that we expect to be incurred based on currently
available information. However, since the calculation of the provision for product warranties involves the estimate of the warranty
costs that would be incurred over multiple years in the future, the actual warranty costs may deviate from the estimates. This could
cause the necessity of recording additional provisions for product warranties, and a significant impact on the consolidated financial
statements.

28

[Translation for Reference and Convenience Purposes Only](Consolidated Statements of Financial Position)
1. The allowances for assets are as follows:
The allowance for doubtful trade receivables and other receivables
The allowance for doubtful other financial assets (non-current)
2. Accumulated depreciation of property, plant and equipment

305 million yen
449 million yen
1,424,866 million yen

3. 6,943 million yen from national subsidies, etc. has been directly deducted from the amount of property, plant and equipment
reported on the consolidated balance sheet.
4. Assets pledged as collateral and collateralized loans(1) Assets pledged as collateral
Property, plant and equipment:(2) Collateralized loans
Financing liabilities (current):

9,091 million yen
376 million yen

Others:1,708 million yen

Total

2,084 million yen

5. Contingent Liabilities(1) Guarantor of third-party indebtedness from financial institutions
Customers of SUBARU Canada Inc.:
Employees:

6,221 million yen
2,879 million yen

Others:

826 million yen

Total

9,925 million yen(2) Other Contingencies
Based on the modified agreement between the U.S. subsidiary of Takata Co., Ltd. and the National Highway Traffic Safety
Administration (NHTSA) of the United States dated May 4, 2016, Notification “Extended schedule of the recalls of airbag
inflators manufactured by Takata Co., Ltd.” released by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
of Japan dated May 27, 2016, and recall policies in other regions including China and Australia in consideration of therequest by the U.S. and Japanese authorities, expenses for extension of recall for airbag inflators manufactured by Takata are
accrued to the extent that the amount can be reasonably estimated. There is a possibility that additional accrual may berequired due to events in the future.
6. The unexecuted balance of overdraft facilities and lending commitments at a consolidated subsidiary (Subaru Finance Co., Ltd.)
was as follows:
Total overdraft facilities and lending commitments:
7,300 million yen
Less amounts currently executed:

2,686 million yen

Unexecuted balance

4,614 million yen

7．Inventories and the provision for loss on construction contracts (provision in current liabilities) for which losses are expected
are presented in gross amounts without offsetting. Of inventories related to construction contracts for which losses are expected,
the amount corresponding to the provision for loss on construction contracts (provision in current liabilities) is 3,275 million
yen (all work in process).

29

[Translation for Reference and Convenience Purposes Only](Consolidated Statement of Changes in Net Assets)
1.

Matters related to the type and total issued and outstanding stocks, and type and number of treasury stocks
Number of shares as
Number of shares
Number of shares
Number of shares as at
at beginning of theincreased during the
reduced during theType of Stocks
end of the consolidated
consolidated fiscal
consolidated fiscal year consolidated fiscal year
fiscal year (shares)
year (shares)(shares)(shares)Issued shares
Common stock

769,175,873－－

769,175,873

2,248,102

2,190

56,2272,194,065

Treasury stocks
Common stock (Note)(Note) Increase of 2,190 shares of Treasury stocks was due to purchase of Shares less than One Unit.
Decrease of 56,227 shares of Treasury stocks was due to retirement of treasury stocks on August 4, 2022 which wererestricted transfer stocks resolved to be introduced at the Board of Directors meeting held on April 28, 2017.
2. Dividends(1) Dividend payout
Resolution

Type of stocks

Total amount ofdividends (yen)'The 91st Ordinary General
Meeting of Shareholders on June22, 2022

Common stocks

21,485'The Board of Directors Meetingon November 2, 2022

Common stocks

29,161Dividend pershare (yen)Record date

Effective date

28.00

March 31, 2022

June 23, 2022

38.00

September 30,
2022

December 7,
2022(2) Of dividends whose criteria date belongs to the current consolidated fiscal year, those in which the effective date of thedividend is the following consolidated fiscal year
Resolution

Type ofstocksTotal amountof dividends(yen)

Source fordividend

Dividend pershare (yen)Record date

Effective
date'The 92nd Ordinary General
Meeting of Shareholders on June21, 2023

Commonstocks29,161Retainedearnings

38.00

March 31,2023

June 22,2023

30

[Translation for Reference and Convenience Purposes Only](Financial instruments)
1. Summary of Financial Instruments Status(1) Risk Management
The Group's business activities are affected by the business environment and the financial market environment. Financial
instruments held or assumed during the course of the business activities are subject to inherent risks. The risks include (1)credit risk, (2) market risk and (3) liquidity risk. The Group establishes an internal management system and implements crisis
management to minimize the impact on the Group's financial condition and business performance using financial instruments.
Specifically, the Group manages those risks according to the following methods.
(2) Credit Risk
Credit risk is the risk that a party to a financial instrument defaults on its contractual obligations and causes a financial loss for
the Group. The Group's trade receivables, lease receivables, contract assets and other receivables are exposed to the credit riskof customers and counterparties. Also, bonds and other securities held to manage surplus funds are exposed to the credit risk of
the issuers. In addition, Derivative transactions conducted by the Group for the purpose of hedging foreign exchange andinterest rate risks as well as banking transactions are exposed to the credit risk of the financial institutions that arecounterparties to the transactions.
(3) Market Risk
The Group hedges foreign currency fluctuation risks of trade receivables and payables denominated in foreign currencies thatare identified by currency and by month by using, in principle, forward exchange contracts and currency options.
Depending on the exchange rate situation, forward exchange contracts and other transactions are used against the net positionof trade receivables and trade payables denominated in foreign currencies for a maximum of six months.
(4) Liquidity Risk
The Group raises funds by borrowings from financial institutions and corporate bonds. The Group is exposed to a risk that theGroup would not be able to repay liabilities on the due date in the event of disruptions of financial system and financial markets
or a significant reduction of credit rating by rating agencies.
In order to ensure liquidity and stability, the Group has sufficient cash and cash equivalents as well as maintains liquidity thatsatisfies the level of cash required by entering into commitment line agreements with major financial institutions.

31

[Translation for Reference and Convenience Purposes Only]
2. Fair Value of Financial Instruments
Amount on the consolidated statement of financial position and fair value at March 31, 2023 are as follows.
(Unit: Millions of yen)Amount on the consolidated
statement of financial
posiotion

Fair Value

Trade and other receivables
Operating loans

163,540

169,357

Lease receivables

11,03312,086

Account receivables and other receivables *1

182,951-

Debt instruments measured at fair value

201,125

201,125

Equity instruments

120,619

120,619

Derivatives

1,610

1,610

Other *1&*4

181,787-

Borrowings

222,596

216,912

Bonds

90,00088,653377,279-

Derivatives

2,677

2,677

Other *1&*3

39,026-

Other financial assets

Financing liabilities

Trade and other payables *1
Other financial liabilities(Note)
1)
Disclosure of fair value is omitted because the fair values approximate their carrying amounts.
2)
The table does not include cash and cash equivalents due to their fair values approximate their respective carrying amounts.
3)
Lease liabilities (114,524 million yen on the consolidated statement of financial position ) are not included in "Other financial
liabilities".
4)”Other” included in “Other financial assets” mainly consists of time deposits.

32

[Translation for Reference and Convenience Purposes Only]
3. Breakdown of fair value of financial instruments by level(1) Valuation techniques used to calculate fair value
The Group uses a three-level hierarchy system when measuring fair value. The following is a description of the three levels ofhierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities that the Group has the ability to access as of themeasurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or
indirectly
Level 3: Unobservable inputs for the assets or liabilities(2) Method and assumptions of Fair Value Measurement
The fair values of assets and liabilities are determined based on relevant market information and through the use of an appropriate
valuation method.
The measurement methods and assumptions used in the measurement of assets and liabilities are as follows:(Cash and cash equivalents, Trade and other receivables, Trade and other payables)
Cash and cash equivalents, Trade and other receivables, and Trade and other payables are measured at amortized cost. Lease
receivables are measured in accordance with "IFRS 16 Leases".
The fair value of operating loans and lease receivables is calculated based on the present value of the receivables discounted by theinterest rate, taking into account the maturity period and credit risk, for each receivable classified by a certain period. Therefore, fairvalue measurements are classified as Level 3 because credit risks are not observable.
The fair values of financial assets other than lease receivables and operating loans approximate their carrying amounts of thosefinancial assets due to their short-term maturities.
(Other debt instruments)
Debt instruments (instruments measured at fair value) consist mainly of government bonds, corporate bonds, investment trust andinvestments in partnerships, etc.
The fair value of government bonds and investment trust with an active market is measured by using quoted market prices. Fair value
measurement for government bonds are investment trust are classified as Level 1.
The fair value of corporate bonds is measured based on the proprietary pricing models provided by financial institutions using
observable inputs in the market such as credit ratings and discount rates. Fair value of corporate bonds is classified as Level 2.
The fair value of investments in partnerships is measured based on the estimated fair value of the partnership assets and theCompany's shares of such fair value. Fair value measurement for investments in partnerships is classified as Level 3 because it uses
unobservable inputs.
Other debt instruments are reported as other financial assets (current) and other financial assets (non-current).
(Equity instruments)
Equity instruments consist mainly of stocks.
The fair value of equity instruments with an active market is measured by using quoted market prices.
Fair value measurement for equity instruments with an active market is classified as Level 1.
As a general rule, the fair value of equity instruments with no active market is measured mainly by using the comparable company
valuation method and other appropriate valuation methods. Fair value measurement for equity instruments with no active market isclassified as Level 3.
Equity instruments are reported as other financial assets (non-current).
Such fair value measurements are conducted in accordance with the Group accounting policy approved by the appropriate person of
authority and based upon valuation methods determined by an accountant of the Group.
(Financing liabilities)
Financing liabilities are measured at amortized cost.
The fair value of financing liabilities is measured by discounting future cash flows using interest rates currently available forliabilities of similar terms and remaining maturities. Fair value measurement for financing liabilities is mainly classified as Level 2.
(Derivatives)
Derivatives consist mainly of foreign currency forward exchange contracts, and interest rate swap agreements.
The fair values of derivatives are measured based on observable inputs such as foreign exchange rates and quoted prices obtained33

[Translation for Reference and Convenience Purposes Only]
from the financial institutions. Fair value measurements for these derivatives are classified as Level 2.
Derivatives are reported as other financial assets (current) or other financial liabilities (current).
(Other financial liabilities)
Other financial liabilities other than derivatives mainly include liabilities related to chargeable subcontracting.
Liabilities related to chargeable subcontracting are measured at amortized cost and lease liabilities are measured in accordance with"IFRS 16 Leases".
The fair value of other financial liabilities approximates their carrying amounts.

34

[Translation for Reference and Convenience Purposes Only](3) Financial assets and liabilities recognized in the consolidated statement of financial position at fair value
Financial assets and liabilities recognized in the consolidated statement of financial position at fair value in the current year are as
follows.
(Unit: Millions of yen)
Level 1

Level 2

Level 3

Total

Other financial assets
Financial assets measured at fair value
through profit or loss:
Derivatives

－

1,610

－

1,610

Debt instruments

29,927171

1,332

31,430Total

29,927

1,781

1,332

33,040Equity instruments

114,646－

5,973

120,619

Debt instruments

62,598107,097－

169,695

Total

177,244

107,0975,973

290,314

Total

207,171

108,878

7,305

323,354

－

2,677

－

2,677

－

2,677

－

2,677

Financial assets measured at fair value
through other comprehensive income:

Other financial liabilities:
Financial liabilities measured at fair value
through profit or loss:
Derivatives
Total

The Group recognizes the transfers between the levels of the fair value hierarchy at the end of the day on which an event or change in
conditions that causes the transfer has occurred.
There were no material transfers between the levels.

35

[Translation for Reference and Convenience Purposes Only](4) Reconciliation of financial instruments classified in Level 3
The following is a reconciliation of the beginning to ending balances for Level 3 assets and liabilities measured at fair value on arecurring basis.
(Unit: Millions of yen)

(Unit: Millions of yen)

FYE 2023(April 1, 2022 to March 31, 2023)
Equity instruments
Beginning balance

Debt instruments
5,424

－

Profit or loss－

39

Other comprehensive income

549－

Purchases

－

1,293

Sales

－

－

Exchange differences on translating foreign operations

－

－

5,973

1,332

－

89

Total gains or losses:

Ending Balance
Unrealized gains or losses included in profit or loss on
assets held at March 31. 2023
(Note)
1)

Gains or losses included in profit or loss for the consolidated fiscal years ended March 31, 2023 is included in finance income
and finance costs in the consolidated statements of income.

2)

Gains or losses included in other comprehensive income for the consolidated fiscal years ended March 31, 2023 is included in
net changes in revaluation of equity instruments designated as measured at fair value through other comprehensive income inthe consolidated statements of comprehensive income.

3)

Unrealized gains and losses on assets held at the end of the current fiscal year included in net gains or losses on debt
instruments are included in "Financial income" in the consolidated statement of income.

36

[Translation for Reference and Convenience Purposes Only](5) Financial Assets and Financial Liabilities that are not measured at fair value
The carrying amounts and fair values of financial assets and financial liabilities that are not measured at fair value as of March 31,
2023 is as follows:(Unit: Millions of yen)
FYE 2023(as of March 31, 2023)
Carrying
Fair value
amountTrade and other receivables
Operating loans

163,540

169,357

Lease receivables

11,03312,086

Account receivables and other receivables*1

182,951－

181,787－

222,596

216,912

Other financial asset*1&2
Financing liabilities
Borrowings

90,00088,653

Trade and other payables*1

377,279－

Other financial liabilities*1&3

39,026－

Bonds payables(Notes)1)Disclosure of fair value is omitted because the fair values approximate their carrying amounts.
2)
Items disclosed in “(3) Financial Assets and Financial Liabilities that are measured at fair value” are not included.
3)
Other financial liabilities do not include derivatives of 2,677 million yen and lease liabilities of 114,524 million yen.
4)
The table does not include cash and cash equivalents due to their fair values approximate their respective carrying amounts.

37

[Translation for Reference and Convenience Purposes Only](Investment property)
1. Summary of investment properties
The Company and certain consolidated subsidiaries own rental office buildings and rental commercial facilities in Saitama
prefecture and other locations.
2. Fair Value of Investment property(Unit: Millions of yen)
Carrying Amount

Fair Value

20,87835,550(Notes)1)
Carrying amount represents acquisition cost less accumulated depreciation and accumulated impairment losses.
2)
Fair values of certain main investment and rental properties are estimated by third party real-estate appraisers, adjusted by
the Group using relevant indicators. Fair values of remaining properties are estimated by the Group based principally onland assessment value that are used to calculate property taxes.

(Per Share Information)
1. Net assets per share attributable to owners of parent

2,739.27 yen

2. Income per share attributable to owners of parent
Basic

261.33 yen

Diluted261.32 yen(Significant Subsequent Event)Acquisiton and cancellation of the Company’s treasury stocks
The Company resolved, at a meeting of its Board of Directors held on May 11, 2023, the matters concerning the acquisition oftreasury stocks pursuant to the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms pursuant
to the provisions of Article 165, Paragraph 3 and the matters concerning the cancellation of treasury stocks in accordance with
Article 178 of the Act.
1.Reason for conducting acquisition and cancellation of treasury stocks
The Company acquires and cancels it’s treasury stocks for the purpose of improving efficiency of it’s capital structure.
2.Details of the share acquisition(1) Type of stocks to be acquired: Company’s common stocks(2) Total number of shares to be acquired: 22 million shares (upper limit)
Ratio of total number of issued shares (excluding treasury stocks): 2.9%
(3) Total share acquisition cost: 40,000 million yen (upper limit)(4) Acquisition period: from May 12, 2023 (Estimated) to September 30, 2023 (Estimated)(5) Acquisition method: Purchase on Tokyo Stock Exchange
Market purchases based on a discretionary trading contract regarding acquisition of treasury stocks

3. Details of the share cancellation(1) Type of stocks to be cancelled: Company’s common stocks(2) Total number of shares to be cancelled : 22 million shares (All treasury stocks acquired pursuant to 2. above)(3) Scheduled date of the cancellation: November 15, 2023

38

[Translation for Reference and Convenience Purposes Only]

Non-consolidated Financial Statements
Non-consolidated Balance Sheet(Unit: Millions of yen)
FYE2023(as of March 31, 2023)

FYE2022(as of March 31, 2022)
ASSETSⅠ Current assets
Cash and deposits
Accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments-trade
Prepaid expenses
Short-term loans receivable to subsidiaries and affiliates
Current portion of long-term loans receivable fromsubsidiaries and affiliates
Deposits paid
Accounts receivable-other
Other
Total current assets
Ⅱ Noncurrent assets
1. Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
2. Intangible assets
Software
Other
Total intangible assets
3. Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Investments in capital of subsidiaries and affiliates
Long-term loans receivable
Long-term loans receivable from subsidiaries and affiliates
Claims provable in bankruptcy, claims provable inrehabilitation and otherPrepaid pension cost
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total noncurrent assets
Total assets

39

783,265
181,865
49,636
65,14547,94632,851
4,707
36,102985,713
225,508
65,35972,702
58,12336,3695,298
41,04012,50027,00024,48054,092
22,682

23,57550,33233,992

1,315,271

1,625,011

99,626
17,952
109,166
2,910
10,58180,90933,5472,705
357,396

114,159
18,207105,0883,314
10,11579,202
32,1795,862
368,126

29,87056,16586,035

46,10940,44686,5552,133
250,5236,210
375,526

3,847
235,172
3,947
2
52,2600

07,334
104,065
7,338(252)(1,387)451,493894,924
2,210,195

5,584
74,1338,819(46)(1,694)
382,024
836,705
2,461,716

[Translation for Reference and Convenience Purposes Only]

FYE2022(as of March 31, 2022)
LIABILITIESⅠ Current liabilities
Notes payable-trade
Accounts payable-trade
Electronically recorded obligations-operating
Current portion of long-term loans payable
Current portion of bonds payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for bonuses
Provision for product warranties
Provision for vehicle environmental control
Provision for loss on construction contracts
Provision for environmental measures
Other
Total current liabilities
Ⅱ Noncurrent liabilities
Bonds payable
Long-term loans payable
Lease obligations
Provision for product warranties
Provision for vehicle environmental control
Provision for retirement benefits
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Ⅰ Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for reduction entry of land
General reserve
Retained earnings brought forward
Total retained earnings
Treasury stocks
Total shareholders' equity
Ⅱ Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

40(Unit: Millions of yen)
FYE2023(as of March 31, 2023)

240
160,796
15,91050,650－1,519
23,33843,849793
43,177
377,435
14,82290,704
3,039
5,535
－
8,189
839,996236
217,548
18,00744,90010,0001,527
20,31247,03524,89350,459387,263
16,681
76,776
4,930
8,550
50
3,766
932,933

90,000191,900
1,509
77,902
5,484
55
16
2,609
369,475
1,209,471

80,000177,000
4,536
83,15910,264－16
1,857
356,832
1,289,765

153,795

153,795

160,071160,071160,071160,071

7,901

7,901

1,341
35,335625,901
670,478(6,324)
978,020

1,341
35,335808,103852,680(6,136)
1,160,410

22,70422,7041,000,724
2,210,195

11,541
11,541
1,171,951
2,461,716

[Translation for Reference and Convenience Purposes Only]

Non-consolidated Statement of Income

Ⅰ Net sales
Ⅱ Cost of sales
Gross profit
Ⅲ Selling, general and administrative expenses
Operating income (loss)
Ⅳ Non-operating income
Interest income
Dividends income
Foreign exchange income
Real estate rent
Gain on valuation of derivatives
Other
Total non-operating income
Ⅴ Non-operating expenses
Interest expenses
Depreciation
Foreign exchange losses
Compensation expenses
Other
Total non-operating expenses
Ordinary income
Ⅵ Extraordinary income
Gain on sales of noncurrent assets
Reversal of allowance for doubtful accounts
National subsidies
Other
Total extraordinary income
Ⅶ Extraordinary loss
Loss on sales and retirement of noncurrent assets
Impairment loss
Provision of allowance for investment loss
Other
Total extraordinary losses
Income before income taxes
Total income taxes
Income tax-current
Income taxes-deferred
Net income

FYE2022(April 1, 2021 toMarch 31, 2022)
1,499,898
1,322,969
176,929
225,184(48,255)(Unit: Millions of yen)
FYE2023(April 1, 2022 toMarch 31, 2023)
2,174,178
1,754,868
419,310
238,965
180,345

1,067
106,052
14,889
2,940
1,391
7,088
133,427

17,192
104,386
－
2,852
5,186
3,278
132,894

732
2,015
－
2,349
3,920
9,016
76,156

9,576
3,036
1,868
－
10,08024,560288,679

240
16
36
12
304

3,768
199
－
5
3,972

4,639
－
1,387
73
6,099

3,795
2,369
308
19
6,491
286,160
53,257
18,427
34,830232,90370,361528(4,185)
4,713
69,83341

[Translation for Reference and Convenience Purposes Only]

Non-consolidated Statements of Changes in Net Assets FYE 2023 (April 1, 2022 to March 31, 2023)(Unit: Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at the beginning of
the year
Changes of items during the
year

Legal
capitalsurplus153,795 160,071

OthercapitalsurplusTotal
capitalsurplus－ 160,071

Provisionofreserve
Legal
for
tax
retained
purposeearnings
reduction
entry ofland

Generalreserve

Retainedearnings
brought
forwardTotal
retainedearnings

7,901

1,341

35,335625,901

670,478

Dividends from surplus

－

－

－

－

－

－

－

(50,646)(50,646)

Net income

－

－

－

－

－

－

－

232,903

232,903

Purchase of treasury stock

－

－

－

－

－

－

－

－

－

Disposal of treasury stock

－

－

(55)

(55)

－

－

－

－

－

－

－

55

55

－

－

－

(55)

(55)

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

182,202

182,202－ 160,071

7,901

1,341

35,335808,103852,680

Transfer from retained
earnings to capital surplus
Net changes of items otherthan shareholders' equity
Total changes of items during
the year

Balance at the end of the year 153,795 160,071

Shareholders' equity

Treasury stock
Balance at the beginning of
the year
Changes of items during theyear

Valuation and translation adjustments
Valuationdifference on
available-for-salesecurities

Total
shareholders'equityTotal valuationand translation
adjustments

Total net assets(6,324)

978,020

22,70422,7041,000,724

Dividends from surplus－(50,646)－－(50,646)

Net income－

232,903－－

232,903

Purchase of treasury stock

(4)

(4)

－

－

(4)

Disposal of treasury stock

192

137

－

－

137

－

－

－

－

－

－

－

(11,163)(11,163)(11,163)

188

182,390(11,163)(11,163)

171,227(6,136)

1,160,410

11,541

11,541

1,171,951

Transfer to capital surplus
from retained earnings
Net changes of items otherthan shareholders' equity
Total changes of items
during the year
Balance at the end of the
year

42

[Translation for Reference and Convenience Purposes Only]

Notes to Non-consolidated Financial Statements(Significant accounting policies)
1. Valuation standards and methods for securities(1) Held-to-maturity debt securities are stated using the amortized cost method. (straight-line method).
(2) Shares of subsidiaries and associates are stated at cost, as determined by the moving-average method.
(3) Available-for-sale securities for which fair values are available:
Fair value method based on the market price etc. at the end of the accounting period(Unrealized holding gains and losses included as a separate component of net assets until realized; and the cost of soldsecurities is determined by the moving-average method).
Non-marketable securities: Mainly moving-average cost method.
2. Valuation standards and methods for investments in equity
Moving-average cost method.
In addition, investment in the union is evaluated by taking in the equivalent amount to the ownership in equity based on the latest
available financial statements.
3. Valuation standards and methods for derivatives transactions: Fair value method
4. Valuation standards and methods for inventory(1) Merchandise and finished goods: Mainly with moving-average cost method.
(Book value on the balance sheet is measured based on the lower of cost or market value.)(2) Work in process, raw materials and supplies: Mainly with FIFO cost method.
(Book value on the balance sheet is measured based on the lower of cost or market value.)
5. Depreciation Method of Fixed Assets(4) Property, plant and equipment (excluding lease assets): Straight-line method is mainly applied.
Primary period of depreciation are as follows:
Buildings:
8 to 50 years
Structures:
7 to 50 years
Machinery and equipment:
4 to 10 years
Vehicles:
3 to 7 years
Tools, furniture, and fixtures:
2 to 10 years(5) Intangible assets (excluding leased assets): Straight-line method is applied.
Computer software used internally by the Company is amortized by the straight-line method over the relevant economic useful
lives of 3 or 5 years.
(6) Leased assets
For leased assets under finance lease transactions in which the ownership is transferred to the lessee:… The leased assets are depreciated by the same method as used for other property, plant and equipment owned by theCompany.
For leased assets under finance lease transactions in which the ownership is not transferred to the lessee:… The leased assets are depreciated by the straight-line method over the leased period and the residual value is zero.

43

[Translation for Reference and Convenience Purposes Only]
6. Standards for provisions(1) Allowance for doubtful accounts … Allowance for doubtful accounts is provided based on the amount calculated from thehistorical ratio of bad debt for ordinary receivables, and estimated amounts of uncollectible
accounts for specific overdue receivables. Specific allowances are provided for theestimated amounts considered to be unrecoverable after reviewing individual recoverabilityof certain doubtful accounts such as claims provable in bankruptcy.
(2) Provision of allowance for… Allowance for losses on investments in subsidiaries based on the financial position of theinvestment loss
investees and the recoverability of the investments in the future.
(3) Provision for bonuses… Employees' bonuses are recognized as expenses for the period in which those are incurred.

(4) Provision for product warranties … In order to prepare for future repair costs for products sold, the total of the following
amounts has been recorded.
1. According to the terms and conditions of the warranties, estimated cost calculated basedon the past experience and the future warranties estimation.
2. Estimated amount calculated as recall related costs based on notification to the competentauthority.
(5) Provision for vehicle
In provision for expenses to comply with vehicle environmental regulations, the estimatedenvironmental control
amount to be incurred at the end of the current fiscal year is recorded.
(6) Provision for loss on
construction contracts(7) Provision for environmental
measures… The provision for losses on uncompleted construction of contracts in the Aerospace segment
is provided when substantial losses on the contracts are anticipated at the fiscal year end forthe next fiscal year and beyond and such losses can be reasonably estimated.
… In provision for expenses for the purpose of environmental countermeasure construction,etc, the estimated amount to be incurred at the end of the current fiscal year is recorded.

(8) Provision for retirement benefits …

Net defined benefit liability (assets) for employees is provided based on the estimatedamounts of projected pension and severance obligation and plan assets at the end of the
fiscal year. In determining retirement benefit obligations, the plan’s benefit formula isused for attributing expected benefit to periods.
Unrecognized prior service cost is being amortized on the straight-line method over a period(16 years) that is shorter than the average remaining service period of the eligible
employees. Unrecognized net actuarial gain or loss is amortized from the following fiscal
year on the straight-line method over a period (16 years) that is shorter than the averageremaining service period of the eligible employees.

7. Basis for recognition of revenues and expenses
The Group identifies a performance obligation in a contract with a customer, and recognizes as revenue the amount ofconsideration to which the Group expects to be entitled in exchange for transferring promised goods or services to the customer.
If variable consideration is included in the consideration promised in a contract with a customer, some or all of an amount ofvariable consideration is included in the transaction price only to the extent that it is highly probable that a significant reversal in
the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration issubsequently resolved.
Revenue is recognized at a point in time or over a certain period of time in accordance with satisfaction of a performanceobligation in a contract with a customer.
With regard to revenue from the sale of cars, performance obligations are principally considered to be fulfilled at the time ofdelivery of the cars, at which point customers obtain control of the cars and revenue is recognized.
8. Standard for Japanese yen conversion for significant foreign currency-denominated assets or liabilities
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates prevailingat each balance sheet date with the resulting gain or loss included in the statement of income of each period.
9. Other principle matters for preparation of the statements(1) Method for accounting for retirement benefits
Accounting method for unrecognized actuarial differences and unrecognized prior service costs are different from accounting
methods used for these items in the consolidated financial statements.
(2) Unit of amount
Unit of amount is displayed by rounded off.

44

[Translation for Reference and Convenience Purposes Only](3) Application of consolidated taxation system
Group Tax Sharing system is applied.
(Revenue Recognition)
Notes have been omitted since the information that provides the basis for understanding revenue from contracts with customers ispresented in the "Notes to Consolidated Financial Statements (Revenue Recognition)”.

(Accounting estimates)
Items for which the amount was recorded in the non-consolidated financial statements for the current fiscal year based on
accounting estimates, and which may have a significant impact on the non-consolidated financial statements for the following
fiscal year, are as follows.
Deferred tax assets

74,133 million yen

Deferred tax assets are recognized based on the estimated timing and amount of taxable income based on future business plans.
However, since the calculation of deferred tax assets may be affected by changes in uncertain economic conditions and otherfactors, and the timing and amount of actual taxable income may differ from the estimates. This could cause a significant impact
on the amount of deferred tax assets in the non-consolidated financial statements for the following fiscal year.
Provision for product warranties

159,935 million yen

The Company provides product warranties based on the terms and conditions of warranties granted at the time of product sales, aswell as free repair services on an individual basis in accordance with the notification to the competent authorities.
The coverage of product warranties based on the terms and conditions of warranties is determined by the duration, mileage, causeof defects, and other factors in accordance with the terms and conditions of warranties of each country.
The Company recognize estimated warranty costs for the product warranties when the products are sold to customers, based on theterms and conditions of warranties. The estimated warranty costs are recorded based on the best estimates of future occurrences,which are based on the past repair experience and past sales volume for the total cost of repairing or replacing parts due to defects
occurring within the warranty period.
The estimated expenses related to the warranty items in accordance with notifications to the competent authority are recognized asprovision for product warranties when it is probable that payment will be required, and reasonable estimates can be made of theamount of the obligations. The estimated expenses are recorded based on the best estimate of the repair cost per unit, which is
calculated based on past experience with product defects, and the number of units subject to repair, which is calculated based on
past experience with product defects.
We believe that we have made sufficient provisions for the warranty costs that we expect to be incurred based on currently
available information. However, since the calculation of the provision for product warranties involves the estimate of the warranty
costs that would be incurred over multiple years in the future, the actual warranty costs may deviate from the estimates. This could
cause the necessity of recording additional provisions for product warranties, and a significant impact on the non-consolidated
financial statements.

45

[Translation for Reference and Convenience Purposes Only](Balance Sheet)1.

Accumulated depreciation of property, plant and equipment

2.

6,642 million yen from national subsidies, etc. has been directly deducted from the amount of property, plant and equipment
reported on the balance sheet.

3.

Assets pledged as collateral and secured obligations
There were no assets pledged as collateral and no secured debt because the mortgages on the factory foundation were discharged
at the end of the fiscal year.
In addition, 33 million yen of land has been pledged as collateral for 1,888 million yen of long-termloans payable and received-guarantee deposited, etc. of affiliates.

4.

Monetary claims and obligations to affiliates
Short-term monetary claims to affiliates
Short-term monetary obligations to affiliates
Long-term monetary claims to affiliates

265,204 million yen
437,572 million yen
53,165 million yen

Contingent liability(1) Guarantee obligation for loans from financial institutions
Subaru of America, Inc.
Employees
Subaru Kohsan Co., Ltd.
Tan Chong Subaru Automotive (Thailand) Co., Ltd.
Subaru Auto Accessories Ltd.
Total

30,329 million yen
2,878 million yen
832 million yen
826 million yen
548 million yen
35,413 million yen

5.

668,999 million yen(2) Other contingent liabilities
Based on the modified agreement between the U.S. subsidiary of Takata Co., Ltd. and the National Highway Traffic Safety
Administration (NHTSA) of the United States dated May 4, 2016, Notification “Extended schedule of the recalls of airbag
inflators manufactured by Takata Co., Ltd.” released by the Ministry of Land, Infrastructure, Transport and Tourism(MLIT) of Japan dated May 27, 2016, and recall policies in other regions including China and Australia in consideration of
the request by the U.S. and Japanese authorities, expenses for extension of recall for airbag inflators manufactured by
Takata are accrued to the extent that the amount can be reasonably estimated. There is a possibility that additional accrual
may be required due to events in the future.
6.

Inventory and the provision for loss on construction contracts for which losses are expected are presented in gross amounts
without offsetting. Of the inventory related to construction contracts for which losses are expected, the amount corresponding toprovision for loss on construction is 3,275 million yen (all work in process).

46

[Translation for Reference and Convenience Purposes Only](Income Statement)
1.

Cost of Sales"Cost of sales" includes 3,014 million yen of provision for loss on construction contracts.

2.

Transactions with affiliates
Operating Transactions

Non-Operating Transactions

1,808,778

million yen

Purchase amount

466,566

million yen

Other transactions

39,346

million yen

Income108,194

million yen

Expenses

10,999million yen

Net sales(Statement of Changes in Net Assets)
Type and number of treasury stocks at the end of the fiscal year
Common stock ……………………………………………………… 1,794,065 shares

47

[Translation for Reference and Convenience Purposes Only](Accounting for Deferred Tax)
1.

Main sources of deferred tax assets and liabilities
As of March 31, 2023
(Unit: Millions of yen)
Deferred tax assets
Provision for product warranties

48,780

Valuation loss on investment securities

10,456

Accrued expenses

9,435

Amount exceeding the limit for provision for retirement benefits

8,517

Carry-forward creditable foreign tax

8,130

Depreciation of fixed assets, etc.

5,997

Provision for bonuses

5,088

Inventory

4,156

Business office tax payable

2,316

Tax loss carryforward

2,178

Amount exceeding the limit for allowance for doubtful accounts

825

Deferred expenses

495

Other

1,584

Subtotal deferred tax assets

107,957

Valuation allowanceሺ26,815)

Total deferred tax assets

81,142

Deferred tax liabilities

2.

Valuation difference on available-for-sale securities

ሺ5,065)Prepaid pension cost

ሺ1,356)

Reserve for reduction entry

ሺ588)

Total deferred tax liabilities

ሺ7,009)Net deferred tax assets

74,133

Breakdown of primary items causing the difference between statutory effective tax rate and rate of income taxes after
application of accounting for deferred tax
Statutory effective tax rate

30.5%

(Adjustment)
Valuation allowance

3.

0.1%

Dividends paid not deductible for income tax(10.4) %Tax Credit for R&D Expenses(2.0) %

Total income of specified foreign subsidiaries

1.2%

Other

(0.8)%

Effective tax rate after applying tax effect accounting

18.6%

The accounting treatment of income taxes, local income taxes and tax effect accounting
From the beginning of the current fiscal year, the company applied the Group Tax Sharing system. And the company accounts
for the accounting treatment and disclosure of income taxes and local income taxes and tax effect accounting in accordance with
“Practical Solution on the Accounting and Disclosure Undere the Group Tax Sharing system” ASBJ PITF No.42, August 12,2021).

48

[Translation for Reference and Convenience Purposes Only](Transactions with Related Parties)

StatusName ofRatio ofCompany,
voting rights
etc.

Relationship withrelated party

Contents of transaction

Credit and financing
Loans receivable *1
related to SUBARUSUBARU
vehicles and leasing
100% direct
Subsidiary Finance Co.,and rental of SUBARU
ownershipLtd.
vehicles; Concurrent
Repayment of loans *1
appointment ofcorporate officers
Sales of products

100%
SUBARU of
Subsidiaryindirect
America Inc.
ownership

SUBARU of
100%
Indiana
Subsidiaryindirect
Automotive
ownership
Inc.

Sales of SUBARU
vehicles andcomponents;
Concurrent
appointment ofcorporate officers
Purchasing ofproduction parts for
SUBARU vehicles,
sales of completed
vehicles to SUBARU
of America Inc. (SOA)
and others; Concurrent
appointment ofcorporate officers(Unit: Millions of yen)
Balance at theAmount of Accountend of thetransaction
titlesfiscal year
464,121Loans
119,340
receivable468,183

1,071,162

Purchase of products

105,497

Acceptance Acceptanceof surplus
fund *2
Interest
expenses
Guarantees *3
Sales of products

292,581

Acceptance Acceptanceof surplus
fund *2
Interest
expenses

Accounts
receivable
Accounts
payableDeposit75,85919,542274,829

6,776
30,329236,830

81,094

Accounts
receivable

25,149Deposit

109,1132,234Transaction terms and policies for determination of transaction terms(Note)
1)
Loans to SUBARU Finance Co., Ltd. are determined considering the market rate. No collaterals are received.
2)
Acceptance of surplus funds is a transaction related to the CMS (Cash Management System) operated by the Group. The
transaction amount is the average balance during the term. Interest expenses are determined considering market interest rates.
3)
The Company guarantees loans from financial institutions, etc. of SUBARU of America, Inc.

(Per Share Information)
1. Net assets per share

1,527.21 yen

2. Net income per share
Basic

303.51 yen

Diluted303.50 yen

49[Translation for Reference and Convenience Purposes Only](Significant subsequent Event)Acquisiton and cancellation of the Company’s treasury stocks
The Company resolved, at a meeting of its Board of Directors held on May 11, 2023, the matters concerning the acquisition oftreasury stocks pursuant to the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms pursuant
to the provisions of Article 165, Paragraph 3 and the matters concerning the cancellation of treasury stocks in accordance with
Article 178 of the Act.
1.Reason for conducting acquisition and cancellation of treasury stocks
The Company acquires and cancels it’s treasury stocks for the purpose of improving efficiency of it’s capital structure.
2.Details of the share acquisition(1) Type of stocks to be acquired: Company’s common stocks(2) Total number of shares to be acquired: 22 million shares (upper limit)
Ratio of total number of issued shares (excluding treasury stocks): 2.9%
(3) Total share acquisition cost: 40,000 million yen (upper limit)(4) Acquisition period: from May 12, 2023 (Estimated) to September 30, 2023 (Estimated)(5) Acquisition method: Purchase on Tokyo Stock Exchange
Market purchases based on a discretionary trading contract regarding acquisition of treasury stocks

3. Details of the share cancellation(1) Type of stocks to be cancelled: Company’s common stocks(2) Total number of shares to be cancelled : 22 million shares (All treasury stocks acquired pursuant to 2. above)(3) Scheduled date of the cancellation: November 15, 2023

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[Translation for Reference and Convenience Purposes Only]

Audit Report
Accounting Audit Report on Consolidated Financial Statements

Independent Auditor’s Report
May 15, 2023

To the Board of Directors of SUBARU CORPORATION:
KPMG AZSA LLC
Tokyo Office, Japan
Masakazu Hattori
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takashi Hasumi
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Shuji Yasuzaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated statements offinancial position, the consolidated statements of income, the consolidated statement of changes in equity
and the related notes of SUBARU CORPORATION (“the Company”) and its consolidated subsidiaries(collectively referred to as “the Group”), as at March 31, 2023 and for the year from April 1, 2022 to March
31, 2023 in accordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position and the results of operations of the Group for the period, for which theconsolidated financial statements were prepared, in accordance with the second sentence of Article 120-1 of
the Regulation on Corporate Accounting that prescribes some omissions of disclosure items required underInternational Financial Reporting Standards.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. Corporate auditors and the board of51

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corporate auditors are responsible for overseeing the directors’ performance of their duties with regard to thedesign, implementation and maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit, or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with the second sentence of Article 120-1 of the Regulation on Corporate Accounting thatprescribes some omissions of disclosure items required under International Financial Reporting Standards,
and for such internal control as management determines is necessary to enable the preparation of
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 the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with the second sentence of Article 120-1 of the Regulation on Corporate Accounting thatprescribes some omissions of disclosure items required under International Financial Reporting Standards.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
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auditor’s report. However, future events or conditions may cause the Group to cease to continue as agoing concern.


Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with the second sentence of Article 120-1 of the Regulation on Corporate Accounting thatprescribes some omissions of disclosure items required under International Financial ReportingStandards, the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its subsidiaries
which are required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as
required by the Companies Act for the conveniences of the reader.

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[Translation for Reference and Convenience Purposes Only]

Accounting Audit Report on Non-consolidated Financial Statements
Independent Auditor’s Report

May 15, 2023

To the Board of Directors of SUBARU CORPORATION:
KPMG AZSA LLC
Tokyo Office, Japan
Masakazu Hattori
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Takashi Hasumi
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Shuji Yasuzaki
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the financial statements, which comprise the balance sheets, the statements of income, thestatements of changes in net assets and the related notes, and the accompanying supplementary schedules(“the financial statements and the accompanying supplementary schedules”) of SUBARU CORPORATION.
(“the Company”) as at March 31, 2023 and for the year from April 1, 2022 to March 31, 2023 in accordancewith Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above
present fairly, in all material respects, the financial position and the results of operations of the Company forthe period, for which the financial statements and the accompanying supplementary schedules were prepared,in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements and the Accompanying Supplementary Schedules section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant to our audit of thefinancial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. Corporate auditors and the board ofcorporate auditors are responsible for overseeing the directors’ performance of their duties with regard to thedesign, implementation and maintenance of the reporting process for the other information.
Our opinion on the financial statements and the accompanying supplementary schedules does not cover theother information and we do not express any form of assurance conclusion thereon.
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[Translation for Reference and Convenience Purposes Only]

In connection with our audit of the financial statements and the accompanying supplementary schedules, our
responsibility is to read the other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements and the accompanying supplementary schedules or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for the
Financial Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable the preparation offinancial statements and the accompanying supplementary schedules that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally accepted in Japan.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Company’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our objectives are to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due tofraud or error, and to issue an auditor’s report that includes our opinion. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements and theaccompanying supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements and the accompanying
supplementary schedules, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, while the objective of the audit is not to express an opinion on theeffectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportto the related disclosures in the financial statements and the accompanying supplementary schedules or,if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the financial statements and the accompanying
supplementary schedules are in accordance with accounting standards generally accepted in Japan, the55

[Translation for Reference and Convenience Purposes Only]

overall presentation, structure and content of the financial statements and the accompanying
supplementary schedules, including the disclosures, and whether the financial statements and theaccompanying supplementary schedules represent the underlying transactions and events in a mannerthat achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which are required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
This is an English translation of the Independent Auditor’s Report as required by the Companies Act ofJapan for the conveniences of the reader.

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[Translation for Reference and Convenience Purposes Only]

Board of Corporate Auditors’ Report

Audit Report
The Board of Corporate Auditors have prepared this Audit Report by analyzing the Audit Report prepared by
the auditors concerning the performance of duties by the directors for the 92nd fiscal period between April 1,
2022 and March 31, 2023, and report as follows.
1. The Corporate Auditors, and the Methods and Contents of Audit by the Board of the Corporate Auditors(1) The Board of the Corporate Auditors determined the audit policy and allocation of duties, received reportson the status and results of audits from each auditor, received reports on the status of performance of
duties from directors, etc., and accounting auditors, and requested explanation where necessary.
(2) In accordance with the standards for auditor's audit prescribed by the Board of the Corporate Auditors,
each auditor attempted to communicate with the directors, internal control division and other employees,
etc., following the audit policy and allocation of duties, etc., strove to gather information and establish
audit environment, and performed the audit using the following methods.
(i) Participated in board of directors’ meetings and other important meetings, received reports from thedirectors and employees, etc., on the status of performance of their duties, requesting explanations
where necessary, inspected important approval documents, etc., and examined the status of thebusiness and assets at the headquarters and major offices. With respect to subsidiaries, the Corporate
Auditors sought communication and exchange of information with the directors and corporate auditors,
etc., of the subsidiaries, and received reports on business from the subsidiaries where necessary.
(ii) With respect to the content of the board of directors' resolution concerning the establishment of thesystem prescribed in Article 100, Paragraphs 1 and 3 of the Enforcement Rule for the Company Act asnecessary for securing the system to ensure that the performance of duties by the directors described in
the Business report comply with the laws and articles of incorporation and appropriateness of thebusiness of the corporate group comprising of the stock company and its subsidiaries, as well as thestatus of the system established based on the resolution of the board of directors' meeting (internal
control system), the Corporate Auditors received periodic reports on the status of establishment andoperation of such system, requested explanation and stated our opinions where necessary.
(iii) We monitored and reviewed that the accounting auditors maintained independence and performed
appropriate audits and received reports from the accounting auditors on the status of performance of
their duties, and requested explanation where necessary. We also received a notice from the
Accounting Auditors that the "system to secure appropriate performance of duties" (matters listed in
the Items of Article 131 of Company Calculation Rules) were established in accordance with the"Quality Control Standards for Audit" (October 28, 2005 Business Accounting Council), etc. andrequested explanation where necessary.
Based on the above methods, we reviewed the Business Report and its supporting documents, Nonconsolidated Financial Statements (Non-consolidated Balance Sheet, Non-consolidated Statements ofComprehensive Income, Non-consolidated Statement of Changes in Net Assets, and Notes to Non-consolidated
Financial Statements) and their supporting documents as well as Consolidated Financial Statements(Consolidated Statement of Financial Position, Consolidated Statements of Comprehensive Income,Consolidated Statement of Changes in Equity, and Notes to Consolidated Financial Statements).
2. Audit Results(1) Audit Result for the Business Report, etc.
(i) The business report and its supporting documents correctly represent the status of the Company inaccordance with the laws and the Articles of Incorporation.
(ii) There were no unlawful acts or material facts in violation of laws or the Articles of Incorporation in
relation to the performance of duties of the directors.
(iii) We acknowledge that the resolutions of the Board of Directors with respect to the internal control
system are appropriate. We have found no matters to point out for the description of Business Report
and the execution of duties by Directors with respect to the internal control systems.
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[Translation for Reference and Convenience Purposes Only](2) Audit Results for the Non-consolidated Financial Statements and Supporting Documents
The methods and results of the audit by the accounting auditors KPMG AZSA LLC were appropriate.
(3) Audit Results for Consolidated Financial Statements
The methods and results of the audit by the accounting auditors KPMG AZSA LLC were appropriate.
May 15, 2023
SUBARU CORPORATION Board of Corporate Auditors

Standing Corporate Auditor Yoichi Kato
Standing Corporate Auditor Hiromi Tsutsumi
Outside Corporate Auditor Shigeru Nosaka
Outside Corporate Auditor Kyoko Okada
Outside Corporate Auditor Yuri Furusawa

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