Consolidated
Financial
Statements

FY2020For the year ended March 31, 2021

Energy and Environment in Harmony

CORPORATE PHILOSOPHY

CONTENTS

Enhance our business in aiming for harmony between energy and theenvironment and contribute to the sustainable development of a society as anintegrated engineering company through the use of our collective wisdom andpainstakingly developed technology.

02   Consolidated Balance Sheet
04   Consolidated Statement of Operations
06   Consolidated Statement of Comprehensive Income
08   Consolidated Statement of Changes in Equity

Every Chiyoda Group employee engages in our corporate activities with this philosophy in mind as we strive for10   Consolidated Statement of Cash Flows

corporate group management that earns the trust and empathy of all of our stakeholders, including shareholders,12   Notes to Consolidated Financial Statements

customers, business partners, employees, and local communities.

49   Independent Auditor’s Report01Consolidated
Balance
Sheet
Chiyoda Corporation
andConsolidated
ChiyodaCorporation
andSubsidiaries
Consolidated Subsidiaries
March 31, 2021

Consolidated Balance
Sheet
Consolidated
Balance Sheet
March 31, 2021 March 31, 2021

ASSETSASSETS

Thousands of
U.S. Dollars
Millions of Yen
1)
Millions(Noteof Yen
2021
20202021
2021
2020

CURRENT ASSETS:
CURRENT ASSETS:
Cash and cash equivalents¥ 98,738
Cash and(Notecash18)equivalents (Note 18)
Short-term investments(Note 18)
8,250
Short-term
investments (Note 18)
Notes and accountsNotes
receivable—trade18)
30,480and accounts(Notereceivable—trade(Note 18)
Costs and estimatedearnings
on long-term
construction
Costsand estimatedearnings
on long-term construction
contracts (Notes 5 and18) (Notes 5 and 18)
18,046
contracts
Costs of construction
contracts
in process
8,767
Costs
of construction
contracts in process
Accounts receivable—other18)
77,261
Accounts(Notereceivable—other(Note 18)
Jointly controlled assets
joint venture(Note18) venture (Note 18)
56,845
Jointlyofcontrolled
assetsof joint
Prepaid expenses andotherexpenses and other
8,906
Prepaid
Allowance for doubtful
accounts(1,405 )Allowancefor doubtful accounts¥ 115,932¥ 115,932¥ 98,738 $ 889,533
8,471
74,3308,471
8,250
30,671
274,601
30,671
30,48030,51018,046
5,261
8,767
68,712
77,261
96,02856,845
6,041
8,906(1,243))(1,405

162,585
30,51078,9835,261
696,045
68,712
512,12196,02880,2396,041(12,660) )(1,243

Total current assetsTotal current assets

305,891

360,387
360,387
305,891 2,755,778

PROPERTY, PLANT
AND EQUIPMENT:PROPERTY,
PLANT AND EQUIPMENT:Land (Notes 9 and Land11) (Notes 9 and 11)
Buildings and structures(Notesand 11) (Notes 9 and 11)
Buildings
and9structures
Machinery and equipment
Machinery and equipment
Tools, furniture andTools,
fixtures(Note 9)furnitureand fixtures (Note 9)
Construction in progress
Construction in progress
Total
Total
Accumulated depreciation
Accumulated depreciation

4,853
14,105
1,295
5,948
106
26,308(14,882 )

5,085
43,722
5,085
4,853
15,035127,072
15,035
14,105748
11,673748
1,295
6,073
53,5936,073
5,948
137 106
95613727,081
237,017
27,081
26,308(14,627)) )) (134,080(14,627(14,882

11,426

12,454
11,426

102,937
12,454

1,720

1,540
1,720

15,496
1,540

3,981
285
4,032
566
394
1,448
(164 )

4,0583,981
319 285
4,539
4,032
566
599 394
1,325
1,448(172(164))

35,871
4,058
2,573319
36,3304,539
5,103
3,558599
13,053
1,325(1,481) )(172

12,266

12,20912,266

110,505
12,209Net property, plant Net
and property,
equipment
plant and equipment
INVESTMENTS AND
OTHER ASSETS:
INVESTMENTS
AND OTHER ASSETS:
Investment securities(Notes 6,securities
11 and 18)
Investment(Notes 6, 11 and 18)
Investments in andInvestments
advances toin
unconsolidated
and advances to unconsolidated
subsidiaries and associatedcompanies(Note 8)companies (Note 8)
subsidiaries
and associatedGoodwill
Goodwill
Software
SoftwareAsset for retirementAssetbenefits(Note 12) benefits (Note 12)
for retirement
Deferred tax assetsDeferred(Note 14)
tax assets (Note 14)
Other assets
Other assets
Allowance for doubtful
accounts
Allowancefor doubtful accounts
Total investments andotherassets and other assets
Total
investments

Thousands of
U.S. Dollars(Note 1)
2021LIABILITIES AND EQUITY
LIABILITIES AND EQUITYCURRENT LIABILITIES:CURRENT LIABILITIES:Current portion of long-term
debt (Notes
9, 10 and¥ 1,201$ 889,533
Current portionof long-term
debt18)(Notes 9, 10 and 18)
Notes and accountsNotes
payable—trade
(Note
18)
115,187
74,330and accounts
payable—trade(Note 18)
Advance receipts on
construction
contracts
74,784
274,601
Advancereceipts
on construction contracts
Income taxes payable(Notetaxes18) payable (Note 18)
638
IncomeDeposits received Deposits received
4,898
162,585
Allowance for warranty
costs forworks
823
78,983
Allowance
for completed
warranty costs
for completed works
Allowance for losses
on construction
contracts
34,443
696,045
Allowance
for losses
on construction contracts
Provision for businessstructure(Noteimprovement20)
512,121
Provisionfor improvementbusiness structure(Note 20) 17
Accrued expenses Accruedand otherexpenses and other
12,661
80,239(12,660 )Total current liabilities
244,657
Total current liabilities
2,755,778
LONG-TERM LIABILITIES:LONG-TERM LIABILITIES:Long-term debt (Notes
9, 10, 11and18) 9, 10, 11 and 18)
45,612Long-term
debt(NotesLiability for retirement
benefits(Note 12) benefits (Note 12)761
43,722
Liability
for retirement
Provision for treatmentof PCB
239
127,072
Provision
forwastetreatment of PCB waste
Asset retirement obligations
1,523
11,673
Asset retirement obligations
Other
43
53,593
Other956
Total long-term liabilities
48,178237,017
Total long-term liabilities(134,080 )COMMITMENTS AND
CONTINGENT
LIABILITIESCOMMITMENTS
AND
CONTINGENT LIABILITIES(Notes 17 and 19) (Notes 17 and 19)
102,937
EQUITY (Note 13):EQUITY (Note 13):
Common stock—authorized,
570,000 thousand shares;
Common stock—authorized,
570,000 thousand shares;
15,496
issued, 258,967 thousand
2021 andshares2020 andissued, shares
258,967inthousandin 2021 and 2020 and
preferredstock—authorized,
175,000
thousandshares;preferredstock—authorized,
175,000 thousand shares;
35,8712021 andshares2020 in 2021 and 2020 15,014
issued, shares
175,000inthousand
2,573 issued, 175,000 thousand
Capital surplus
142
Capital surplus
36,330Retained earnings (accumulated
deficit)
15,708Retained earnings(accumulated deficit)
5,103
Treasury stock—atTreasury
cost, 1,357
thousandsharesstock—atcost,
1,357inthousand shares in
3,558(1,435 )2021 and 2020
13,053 2021 and 2020
Accumulated
other Accumulatedcomprehensive
income:othercomprehensive income:(1,481)
Unrealized gain on Unrealized
available-for-sale203
gain onsecurities
available-for-sale securities
underaccounting
Deferred gain
onhedgederivatives
under hedge accounting 30
110,505 Deferred gain on derivatives
Foreign currency translation
adjustments
5,300
Foreign currencytranslation adjustments
Defined retirement Defined
benefit plans
1,434
retirement benefit plans
Total
36,399Total
Noncontrolling interests
348
Noncontrolling interests
Total equity

TOTAL

TOTAL

¥ 329,583¥ 385,051¥ 385,051¥ 329,583 $ 2,969,221

Thousands of
U.S. Dollars
Millions of Yen
1)
Millions(Noteof Yen
2021
20202021
2021
2020

TOTAL
$ 2,969,221

TOTAL

Total equity

36,747¥ 329,583¥¥ 5421,201 $ ¥10,826542
137,546
137,546
115,187 1,037,729
119,911
673,734
119,91174,784
1,212 638
5,753
1,212
6,8654,898
44,128
6,865
860 823
7,416860
34,871
310,30234,871
34,443401 17161401
17,667
114,065
17,667
12,661
319,878
244,657 2,204,117
319,878

Thousands of
U.S. Dollars(Note 1)2021$

10,826
1,037,729
673,734
5,753
44,128
7,416
310,302161
114,065
2,204,117

36,45845,612
1,986 761
239 239
1,5021,523
42 43

410,922
36,4586,856
1,986
2,153239
13,7201,502
390 42410,922
6,856
2,153
13,720390

40,22948,178434,044
40,229434,044

78,39615,014
72,128 142(127,778)
15,708135,268
78,396
1,284
72,128
141,517(127,778 )

135,268
1,284
141,517(1,435))(1,435(12,930) )(1,435(12,930 )58 2036 30
3,0335,300
131,434
24,42336,399519 348

1,833 58278 6
47,7493,033
12,922 13
327,923
24,4233,135519

1,833
278
47,74912,922327,923
3,135

24,94336,747331,059
24,943331,059¥ 385,051¥ 329,583 $ 2,969,221¥ 385,051$ 2,969,221

See notes to consolidated
financialstatements.
See notes
to consolidated
financial statements.

-6-

02

Chiyoda Corporation Consolidated Financial Statements FY2020

-6-

03

ConsolidatedofSubsidiaries
Operations
Chiyoda Corporation Statement
and Consolidated

Chiyoda Corporation and Consolidated Subsidiaries

Year Ended March 31, 2021

Consolidated Statement of Income
Year Ended March 31, 2021

Consolidated Statement of Income
Year Ended March 31, 2021

Millions of Yen
2021
2020
¥ 315,393¥ 385,925$ 2,841,384

295,332

343,1012,660,653

20,06142,823

180,730SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES (Note 15)

13,046

16,033

117,531

Operating income

7,015

26,78963,199

1,372
33

2,851
361

12,369302

REVENUE
COST OF REVENUE
Gross profit

OTHER INCOME (EXPENSES):Interest and dividend income
Equity in earnings of associated companies
Reversal of provision for business structure improvement(Note 20)
Gain on sales of shares of subsidiaries
and associated companies (Note 16)
Interest expense
Foreign exchange gain (loss)
Impairment loss (Note 7)
Loss on valuation of investment securities (Note 6)
Other—net

3,725(8,016 )
7,388

110

363
(727 )(10,192 )(67 )(122 )(437 )

1,860(7,739 )16,765

8,876

19,05079,964

848
33

7,120
(105 )

7,646
305

882

7,015

7,951

7,993

12,03472,012(142 )

3413(889 )
820

INCOME BEFORE INCOME TAXESINCOME TAXES (Note 14):
Current
Deferred
Total income taxes
NET INCOME
NET LOSS ATTRIBUTABLE TO NONCONTROLLINGINTERESTS
NET INCOME ATTRIBUTABLE TO OWNERS
OF THE PARENT¥-7Chiyoda Corporation Consolidated Financial Statements FY2020

2021
PER SHARE OF COMMON STOCK (Notes 2.ab and 22):
Basic net income
Diluted net income
Cash dividends applicable to the year

¥ 22.76
8.20

Yen

2020

U.S. Dollars
2021¥ 40.9415.51$ 0.210.07

See notes to consolidated financial statements.

232

Other income (expenses)—net

04

Thousands of
U.S. Dollars(Note 1)
2021

7,993

¥ 12,177

995$

72,009(Continued)-8-(Concluded)05

ConsolidatedofSubsidiaries
Comprehensive Income
Chiyoda CorporationStatement
and Consolidated
Year Ended March 31, 2021

Consolidated Statement of Comprehensive Income
Year Ended March 31, 2021

Millions of Yen
2021
2020

Thousands of
U.S. Dollars(Note 1)2021

¥ 7,993¥ 12,034$ 72,012

144
24
2,324
1,420
(60 )

64
56
3,197
(912 )
(66 )

1,301
222
20,938
12,799(541 )

3,854

2,339

34,721COMPREHENSIVE INCOME¥ 11,847¥ 14,374$ 106,733

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests¥ 11,849(1 )¥ 14,522(148 )$ 106,750(16 )NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS) (Note 21):
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive loss of associates
Total other comprehensive income

See notes to consolidated financial statements.

-9-

06

Chiyoda Corporation Consolidated Financial Statements FY2020

07

Consolidated Statement of Changes in Equity (Capital Deficiency)

ChiyodaChiyodaCorporation
ChiyodaCorporation
Corporation
and Consolidated
and and
Consolidated
andConsolidated
Consolidated
Subsidiaries
Subsidiaries
Subsidiaries
ChiyodaCorporation
Subsidiaries
Year Ended March 31, 2021

Consolidated
Consolidated
Consolidated
Statement
StatementofStatement
Changesof Changes
inChanges
Changes
Equityin Equity
EquityConsolidated
Statement
ofof
ininEquity
Year Ended
YearYear
Year
Ended
March
Ended
March
31, 2021March
31, 2021
31,2021
2021
Ended
March
31,
Thousands
Thousands
Thousands
Thousands

Millions
Millionsof YenofMillions
Yen ofofYen
Yen
Millions
Accumulated
Accumulated
Accumulated
Other
Other
Comprehensive
Comprehensive
OtherComprehensive
Comprehensive
IncomeIncome(Loss)(Loss)
Income(Loss)(Loss)
Accumulated
Other
IncomeOutstanding
Outstanding
Outstanding
Outstanding
Outstanding
Outstanding
CommonCommonCommonUnrealized
Unrealized
Unrealized
DeferredDeferredDeferredDeferred
Outstanding
Outstanding
CommonUnrealized
NumberNumberof Number
NumberofNumberNumberof Number
Numberof Stock
Stock Stock
Stock
GainGain(Loss)(Loss)
Gain(Loss)(Loss)
Foreign
Foreign Foreign
ForeignDefinedDefined Defined
DefinedGain
Gain(Loss)(Loss)
Gain(Loss)(Loss)
Retained
Retained
Retained
ofof
ofof
Gain
Gain
Retained
SharesSharesof Shares
SharesofSharesof Shares
Sharesof andandEarnings
Earnings
Earnings
on Availableon AvailableonAvailableAvailableon Derivatives
on Derivatives
onDerivatives
Derivatives
Currency
CurrencyCurrency
Currency
Retirement
Retirement
Retirement
ofofShares
ofof and andEarnings
onon
Retirement
CommonCommonCommonPreferredPreferredPreferredPreferredPreferredPreferred
CapitalCapitalCapital(Accumulated
Capital(Accumulated(Accumulated
Treasury
Treasury
Treasury
for-Sale
for-Sale for-Sale
for-Sale
under
under
Hedge
Hedge
underTranslation
Hedge
Translation
Translation
Benefit
Benefit Benefit
BenefitCommonPreferredPreferred(Accumulated
Treasury
under
Hedge
Translation
Stock Stock Stock
Stock
Stock Stock Stock
Stock
StockStock Stock
Surplus
Stock
SurplusSurplus
Surplus
Deficit)
Deficit) Deficit)
Deficit)
Stock
Stock Stock
Securities
Stock
Securities
Securities
Accounting
Accounting
Accounting
Adjustments
Adjustments
Adjustments
Plans
Plans
Plans
Total
Total
Securities
Accounting
Adjustments
Plans
BALANCE,BALANCE,APRILBALANCE,
1,
APRIL
2019
APRIL
1, 2019
2019
BALANCE,
APRIL
1,1,2019

258,967
258,967
258,967
258,967

Netincomeincomeowners
Net income
attributable
toattributableownersoftotoowners
Net income
attributableto ownersof ofofNet
attributable
theparent
parentthe parent
the parent
theIssuance
newshares
shares(Note
13)
Issuance
Issuanceof Issuance
newofsharesnewshares(Note
13)(Note(Note13) 13)
ofofnew
Purchasetreasurystock
Purchase
PurchaseofPurchasetreasuryof treasurystock
stockstock
ofoftreasury
Purchaseofsharessharesconsolidated
PurchaseofPurchasesharesofof
consolidated
Purchaseof sharesof consolidated
ofofconsolidated
subsidiaries
subsidiaries
subsidiaries
subsidiaries
Netchangetheyearyear
Net change
Net change
in
the
year
in theininyearNetchangethe
BALANCE,BALANCE,MARCHBALANCE,
MARCH
31,MARCH
2020
MARCH
31, 2020
31,2020
2020
BALANCE,31,(50¥) )(102¥ (102) ) ¥¥ (102
¥
(102
¥926
¥¥(50
) ) 926¥926
926(60,144) )¥¥(60,144(60,144¥ 960¥ 960¥¥ (60,144))

12,177
12,177
12,177 12,177
175,000
175,000
35,00035,00035,000
35,00035,00035,00035,000
35,000175,000
175,000
15

15

15
15

64 64

258,967
258,967
258,967
175,000
175,000
175,000
78,39678,39678,396
78,396
72,12872,12872,128
72,128(127,778(127,778) (127,778(127,778) (1,435(1,435(1,43558
175,000) )) ) (1,435) ) 58258,967

Netincomeincomeowners
Net income
attributable
toattributableownersoftotoowners
Net income
attributableto ownersof ofofNet
attributable
theparent
parentthe parent
the parent
theCapitalreduction
Capital Capital
reduction
reduction
Capitalreduction
Deficitdisposition
Deficit disposition
Deficitdisposition
Deficitdisposition
Purchasetreasurystock
Purchase
PurchaseofPurchasetreasuryof treasurystock
stockstock
ofoftreasury
Purchaseofsharessharesconsolidated
PurchaseofPurchasesharesofof
consolidated
Purchaseof sharesof consolidated
ofofconsolidated
subsidiaries
subsidiaries
subsidiaries
subsidiaries
Netchangetheyearyear
Net change
Net change
in
the
year
in theininyearNetchangethe
BALANCE,BALANCE,MARCHBALANCE,
MARCH
31,MARCH
2021
MARCH
31, 2021
31,20212021
BALANCE,31,¥ 43,396¥ 43,396
43,396
37,112¥ 37,112¥37,112(139,956¥ (139,956) ¥¥(139,956(139,956) ¥ (1,435¥ (1,435(1,435¥ (5¥) )) (5 ) ¥¥ (5(5)¥)(50
¥ (50
) )
¥¥¥43,396¥¥ 37,112) )) ¥)¥(1,435

126
126

12,177
12,17770,00070,00012,177
12,17770,00070,000

1515
(912
2,344
2,344
(912
))

15
15
2,344
(440
(440
))
2,344

15
15
(440)1,904) 1,904
(440

15
15
1,904
1,904

58
58

3,033
663,033

3,033 1313
3,033

24,42324,42313
13

24,423519
519
24,423519
24,94324,943519

24,94324,943

7,993
7,993

7,993
7,993

7,993
7,993

7,993
7,993

126
126
1,420
3,856
3,856
1,420

126
126
3,856
(171
(171
))
3,856

126
126
(171)3,684) 3,684
(171

126
126
3,684
3,684

6 6

258,967
258,967
258,967
175,000
175,000
175,000¥ 15,014¥ 15,014
15,014¥142 142
15,708142¥ 15,708¥15,708(1,435¥ (1,435) ¥)¥(1,435(1,435¥ 203¥) )203
175,000¥¥¥15,014¥¥ ¥ 142¥¥ 15,708
258,967203¥ 30¥ 30¥¥203

242,266
2,266
24

2,266
1,420
1,420
2,266

30
¥ 5,300¥ 5,300 ¥¥5,300
5,300¥ 1,434¥ 1,434¥¥30

1,434¥36,399
36,399 ¥¥ 36,399
36,399¥ 348¥ 348¥¥1,434

U.S.
Dollars(Note1)1)
Thousands
ThousandsofThousands
U.S.
of U.S.
Dollars
Dollars(Note(Note1) 1) (NoteThousands
ofofU.S.
Dollars
Accumulated
Accumulated
Other
Comprehensive
OtherComprehensive
Comprehensive
Income(Loss)
Income(Loss)(Loss)
Accumulated
Other
Comprehensive
Income(Loss)
Accumulated
Other
IncomeCommonCommonCommonUnrealized
Unrealized
Unrealized
DeferredDeferredDeferredDeferredCommonUnrealized
Stock Stock Stock
Stock
GainGain(Loss)(Loss)
Gain(Loss)(Loss)
Retained
Retained
Retained
Gain
Gain(Loss)(Loss)
Gain(Loss)(Loss)
Foreign
Foreign Foreign
ForeignDefinedDefined Defined
DefinedGain
RetainedGain
and and andandEarnings
Earnings
Earnings
on Availableon AvailableonAvailableAvailableon Derivatives
on Derivatives
onDerivatives
Derivatives
Currency
CurrencyCurrency
Currency
Retirement
Retirement
Retirement
Earnings
onon
Retirement
Treasury
Treasury
Treasury
PreferredPreferredPreferred
CapitalCapitalCapital
Capital(Accumulated(Accumulated(Accumulated
for-Sale
for-Salefor-Sale
for-Sale
under
under
Hedge
Hedge
underHedge
Translation
Hedge
Translation
Translation
Benefit
Benefit Benefit
Benefit
Treasury
Preferred(Accumulated
underTranslation
Stock Stock Stock
Stock
Surplus
SurplusSurplus
Surplus
Deficit)
Deficit)Deficit)
Deficit)
Stock
Stock Stock
Stock
Securities
Securities
Securities
Accounting
Accounting
Accounting
Adjustments
Adjustments
Adjustments
Plans
Plans
Plans
Total
Total
Securities
Accounting
Adjustments
Plans

BALANCE,BALANCE,MARCHBALANCE,
MARCH
31,MARCH
2021
MARCH
31, 2021
31,20212021
BALANCE,31,$ 706,273$ 706,273
706,273$ 649,807$ 649,807
649,807$ (1,151,160$ (1,151,160(1,151,160)$ (12,930$ (12,930)(12,930$ 531$) ) 531 $$ 531
531$ 56$ 56$$706,273$$ 649,807$)$(1,151,160) ) ) $$(12,930

72,00972,009

1,301
1,301

1,301 222222
1,301$ 135,268$ 135,268
135,268$$1,2841,284
1,284
141,517$ 141,517
141,517$ (12,930$ (12,930) $$(12,930)(12,930$ 1,833$) )1,833 $$1,833
1,833$ 278$ 278$$ $1,284$$ 141,517$$135,268

22220,417
20,417 20,417
20,417
12,79912,799
222

1,140
1,140
12,79934,741
34,741
12,799¥348¥36,747
36,747 ¥¥ 36,747
36,747
¥¥348

Total
Total
Noncontrolling
Noncontrolling
Noncontrolling
Noncontrolling
Total
Interests
Interests Interests
Interests
EquityEquityTotal

56$ 27,332$ 27,332 $$27,332
27,332$ $ 122122 $$ $ 220,033$122
220,033$$220,033
220,033$ 4,681$ 4,681$$ 56
122

72,00972,00972,009 72,009(571,005) (571,005(571,005) 571,005
571,005(571,005) )571,005
571,005(1,220,668) (1,220,668(1,220,668) 1,220,668)
1,220,668(1,220,668) 1,220,668
1,220,668
1,1401,140 1,140
1,140

12,177
12,17770,00070,000

3,316
(912
(912
) )
3,316

144 24 24
144

Netincomeincomeowners
Net income
attributable
toattributableownersoftotoowners
Net income
attributableto ownersof ofofNet
attributable
theparent
parentthe parent
the parent
theCapitalreduction
Capital Capital
reduction
reduction
Capitalreduction
Deficitdisposition
Deficit disposition
Deficitdisposition
Deficitdisposition
Purchasetreasurystock
Purchase
PurchaseofPurchasetreasuryof treasurystock
stockstock
ofoftreasury
Purchaseofsharessharesconsolidated
PurchaseofPurchasesharesofof
consolidated
Purchaseof sharesof consolidated
ofofconsolidated
subsidiaries
subsidiaries
subsidiaries
subsidiaries
Netchangetheyearyear
Net change
Net change
in
the
year
in theininyearNetchangethe12,177
12,17770,00070,000563,3163,316
56144144BALANCE,BALANCE,MARCHBALANCE,
MARCH
31,MARCH
2020
MARCH
31, 2020
31,2020
2020
BALANCE,31,¥
960¥(59,154(59,154) ) ¥¥(59,154(59,154) )¥¥960

64 56 5664

7,9937,993 7,993
7,993(63,381) (63,381(63,381) 63,381)
63,381(63,381)63,381
63,381(135,494) (135,494(135,494) 135,494)
135,494(135,494)135,494
135,494
126 126

Total
Total
Total
Total
EquityEquityEquityEquityNoncontrolling
Noncontrolling
Noncontrolling(Capital(Capital (Capital(Capital
Noncontrolling
Total
Interests
Interests Interests
Interests
Deficiency)
Deficiency)Deficiency)
Deficiency)
Total

72,00972,0091,140
1,140
34,741(1,546(1,546))34,741278$ 47,749$ 47,749 $$47,749
47,749$ 12,922$ 12,922 $$12,922
12,922$ 327,923$ 327,923$$327,923
327,923$ 3,135$ 3,135
$$278

Total
Total
EquityEquity4,681$$224,715
224,715 $$224,715
224,715$$4,681
72,00972,00972,00972,0091,140
1,140(1,54633,194(1,546) )33,194

1,140
1,140
33,19433,1943,135$$331,059
331,059 $$331,059
331,059$$3,135

See notes
SeetoSeenotes
See
consolidated
notes
to consolidated
consolidated
financialfinancialstatements.
financialstatements.
statements.
notes
totoconsolidated
financialstatements.

- 10 - 10 -08

Chiyoda Corporation Consolidated Financial Statements FY2020

10- - -1009

ConsolidatedofSubsidiaries
Cash Flows
Chiyoda CorporationStatement
and Consolidated

Chiyoda Corporation and Consolidated Subsidiaries

Consolidated Statement of Cash Flows
Year Ended March 31, 2021

Consolidated Statement of Cash Flows
Year Ended March 31, 2021

Year Ended March 31, 2021

Millions of Yen
2021
2020
OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes paid
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts(Decrease) increase in allowance for warranty costs forcompleted works
Increase (decrease) in allowance for losses on
construction contracts
Increase (decrease) in liability for retirement benefits
Foreign exchange gain—net
Decrease in provision for business structure
improvement
Gain on sales of shares of subsidiaries and associatedcompanies
Equity in earnings of associated companies
Loss on valuation of investment securities
Changes in operating assets and liabilities:
Decrease in trade notes and accounts receivable,
and costs and estimated earnings on long-term
construction contracts(Increase) decrease in costs of construction
contracts in process
Decrease in trade notes and accounts payable
Decrease in advance receipts on construction
contracts
Increase in accounts receivable—other
Decrease in jointly controlled assets of joint venture
Increase (decrease) in interest and dividends
receivable
Other—net
Total adjustments
Net cash used in operating activities—(Forward)¥

Thousands of
U.S. Dollars(Note 1)
2021

8,876

¥ 19,050$

79,964

2,504
3,281

22,56329,55933
162(3,841 )
3,174
67
40
(10 )

(15 )

491

(137 )

902
398(225 )(31,906 )(146 )
(59 )

8,132
3,587
(2,029 )(383 )(1,290 )(3,453 )(413 )(33 )(363 )(361 )
122(3,725 )(302 )

304
1,460

12,377

7,291

111,511(3,809 )(19,115 )2,194(34,702 )(34,323 )(172,212 )(40,465 )(11,670 )
37,595(1,285 )(3,960 )14,830(364,553 )(105,136 )
338,698

77(10,883 )(29,682 )(1,412 )(139 )(51,267 )697(98,047 )(267,408 )¥ (20,806 )¥ (32,217 )$ (187,443 )Millions of Yen
2021
2020
Net cash used in operating activities—(Forward)
INVESTING ACTIVITIES:Net decrease (increase) in time deposits
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Proceeds from sales of intangible assets
Payments for purchases of investment securities
Proceeds from sales of shares of subsidiaries andassociated companies
Purchase of investments in subsidiaries withchanges in consolidation scope
Proceeds from sales of investment in subsidiaries withchanges in consolidation scope (Note 23)
Payments of loans receivable
Proceeds from collections of loans
Other—net

Thousands of
U.S. Dollars(Note 1)2021

¥ (20,806 )¥ (32,217 )$ (187,443 )348(608 )
563(1,541 )746(659 )(7,358 )(560 )
91(1,702 )
17
(9 )

3,137
(5,481 )
5,079(13,883 )
6,726(5,942 )

14

1,116

132

(18 )

(171 )(236 )(869 )
13
(3 )

(7 )
604
(19 )

(2,130 )(7,830 )119(29 )(2,250 )(7,828 )(20,274 )10,000(122 )

20,000(118 )
70,00090,090(1,104 )(398 )(680 )(3,593 )9,478

89,20085,391

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS(3,616 )(1,528 )(32,579 )NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS(17,194 )

47,626(154,906 )CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

115,932

68,306

1,044,440

CASH AND CASH EQUIVALENTS, END OF YEAR

¥ 98,738¥ 115,932$ 889,533

Net cash used in investing activities
FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of preferred stock
Payments of cash dividends
Other—net
Net cash provided by financing activities

See notes to consolidated financial statements.

- 11 -

10

Chiyoda Corporation Consolidated Financial Statements FY2020(Continued)- 12 -(Concluded)11

Notes to Consolidated Financial Statements

Chiyoda Corporation and Consolidated Subsidiaries
Year Ended
March 31, 2021 Financial Statements
Notes
to Consolidated
Year Ended March 31, 2021

1.

The IT business of Chiyoda System Technologies Corporation, a consolidated subsidiary of theCompany, was transferred to TIS Chiyoda Systems Inc., a newly established company through a
corporate split, and the company was included in the application of the equity method in thecurrent year.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan("Japanese GAAP"), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards ("IFRS").

Investments in the remaining unconsolidated subsidiaries and associated companies are statedat cost. If the equity method of accounting had been applied to the investments in thesecompanies, the effect on the accompanying consolidated financial statements would not bematerial.

In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications
have been made in the 2020 consolidated financial statements to conform to the classifications usedin 2021.

Most of the consolidated foreign subsidiaries have a December 31 year-end, which is different
from that of the Company. As a result, adjustments have been made for any significant
transactions which took place during the period between the year-end of these subsidiaries andthe year-end of the Company.

The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich Chiyoda Corporation (the "Company" or "Chiyoda") is incorporated and principally operates.
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for theconvenience of readers outside Japan and have been made at the rate of ¥111 to $1, theapproximate rate of exchange at March 31, 2021. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
Japanese yen figures less than a million yen are rounded down to the nearest million, except for per
share data.

The excess of the cost of acquisition over the fair value of the net assets of an acquired
subsidiary at the date of acquisition is amortized over a period of 20 years.
All significant intercompany balances and transactions have been eliminated in consolidation. All
material unrealized profit included in assets resulting from transactions within the Group is also
eliminated.
b.

Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements—Under Accounting Standards Board of Japan ("ASBJ") Practical Issues
Task Force ("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements," the accounting policies andprocedures applied to a parent company and its subsidiaries for similar transactions and events
under similar circumstances should in principle be unified for the preparation of the consolidated
financial statements. However, financial statements prepared by foreign subsidiaries inaccordance with either IFRS or generally accepted accounting principles in the United States ofAmerica (Financial Accounting Standards Board Accounting Standards Codification) tentatively
may be used for the consolidation process, except for the following items that should be adjusted
in the consolidation process so that net income is accounted for in accordance with Japanese
GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled amortization of
actuarial gain or loss of pensions that has been recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of R&D; and (d) cancellation of the fairvalue model of accounting for property, plant and equipment and investment properties andincorporation of the cost model of accounting.

c.

Unification of Accounting Policies Applied to Foreign Associated Companies for the
Equity Method—ASBJ Statement No. 16, "Accounting Standard for Equity Method of
Accounting for Investments," requires adjustments to be made to conform the associate's
accounting policies for similar transactions and events under similar circumstances to those of
the parent company when the associate's financial statements are used in applying the equity
method unless it is impracticable to determine such adjustments. In addition, financial statements
prepared by foreign associated companies in accordance with either IFRS or generally accepted
accounting principles in the United States of America tentatively may be used in applying theequity method if the following items are adjusted so that net income is accounted for inaccordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill;(b) scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity
through other comprehensive income; (c) expensing capitalized development costs of R&D; and(d) cancellation of the fair value model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost model of accounting.

U.S. dollar figures less than a thousand U.S. dollars are rounded down to the nearest thousand,except for per share data.
2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements as of March 31, 2021, include theaccounts of the Company and its 19 (20 in 2020) significant subsidiaries (together, the "Group").
PT. Suluh Ardhi Engineering was excluded from the scope of consolidation due to the sale of its
shares.
Arrowhead International Corporation was excluded from the scope of consolidation due tocompletion of liquidation.
Chiyoda France S.A.S. has been added to the scope of consolidation from the current
consolidation fiscal year because it was newly established.
Under the control and influence concepts, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are fully consolidated, and those companies
over which the Group has the ability to exercise significant influence are accounted for by theequity method.
Investments in five (three in 2020) associated companies are accounted for by the equity
method.
PlantStream Inc. was newly established and included in the application of the equity method in
the current consolidated fiscal year.

- 13 -

12

Chiyoda Corporation Consolidated Financial Statements FY2020

13

Notes to Consolidated Financial Statementsd.

Construction Contracts—Under Japanese GAAP, construction revenue and construction costs
are recognized by the percentage-of-completion method if the outcome of a construction contract
can be estimated reliably. When total construction revenue, total construction costs and thestage of completion of the contract at the balance sheet date can be reliably measured, theoutcome of a construction contract is deemed to be estimated reliably. If the outcome of aconstruction contract cannot be reliably estimated, the completed-contract method should beapplied. When it is probable that the total construction costs will exceed total construction
revenue, an estimated loss on the contract should be immediately recognized by providing for aloss on such construction contracts.
Concerning the construction contracts, the Group applies the following accounting methods:

Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued use
and eventual disposition of the asset or asset group. The impairment loss would be measured as
the amount by which the carrying amount of the asset exceeds its recoverable amount, which is
the higher of the discounted cash flows from the continued use and eventual disposition of theasset or the net selling price at disposition.

l.

Software—Software for internal use is amortized on a straight-line basis over its estimateduseful life (five years at the maximum).

Unbilled costs on contracts, which are accounted for by the completed-contract method, arestated as costs of construction contracts in process.

m. Other Assets—Intangible assets and goodwill are carried at cost less accumulated amortization,
which is calculated by the straight-line method over their estimated useful lives.

Payments received in excess of costs and estimated earnings on contracts, which areaccounted for by the percentage-of-completion method, and payments received on the othercontracts, are presented as current liabilities.

n.

Share Issuance Costs—Deferred assets―share issuance costs are accounted for as the fullamount at the time of the expenditure.

o.

Allowance for Warranty Costs for Completed Work—The allowance for warranty costs forcompleted work is provided based on past rate experience.

p.

Allowance for Losses on Construction Contracts—The allowance for losses on construction
contracts is provided for an estimated amount of probable losses to be incurred in future years in
respect of construction projects in progress. When there are losses on completed-contract
method applied contracts, the allowance for losses on construction contracts is offset against thecosts of construction contracts in process in the balance sheet.

Costs of preparation work for unsuccessful proposals and other projects that are not realized
are charged to income, as incurred, and are included in cost of revenue.
e.

Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and exposed to insignificant risk of changes in value. Cash equivalents include time
deposits and certificates of deposit, all of which mature or become due within three months of thedate of acquisition.

f.

Short-Term Investments—Short-term investments are time deposits which will mature within
three months after the date of acquisition. Short-term investments are exposed to insignificant
risk of changes in value.

q.

Provision for Business Structure Improvement—To improve business structure, the provision
for business structure improvement is provided based on anticipated loss reasonably estimatedfor the next and the subsequent consolidated fiscal years.

g.

Investment Securities—All marketable securities are classified as available-for-sale securities
and are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported
in a separate component of equity. The cost of securities sold is determined based on themoving-average method.

r.

Provision for Treatment of PCB Waste—Provision for treatment of PCB (Poly ChlorinatedBiphenyl) waste is provided based on estimated costs of the treatment for PCB products andequipment as well as their collection and transportation fees.

s.

Retirement and Pension Plans—The Company and consolidated subsidiaries have funded or
unfunded defined benefit pension plans and defined contribution pension plans for employees.
Certain consolidated subsidiaries have defined benefit corporate pension plans or severance
lump-sum payment plans, and calculate retirement benefit expenses by using the simplified
method.

Nonmarketable available-for-sale securities are stated at cost determined by the moving-averagemethod or at amortized cost. For other-than-temporary declines in fair value, investment
securities are reduced to net realizable value by a charge to income.

14

k.

h.

Jointly Controlled Assets of Joint Venture—The jointly controlled assets of the joint venture
consist of jointly controlled cash pertaining to the contract work recognized based on the
Company's share of the venture.

i.

Allowance for Doubtful Accounts—The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the Group's past credit loss experience and an evaluationof potential losses in the receivables outstanding.

j.

Property, Plant and Equipment—Property, plant and equipment are stated at cost.
Depreciation is computed by the declining-balance method, except for buildings owned by theCompany and structures acquired on or after April 1, 2016, that are depreciated using thestraight-line method, at rates based on the estimated useful lives of the assets. The range ofuseful lives is from 8 to 57 years for buildings and structures, from 4 to 17 years for machineryand equipment, and from 4 to 15 years for tools, furniture, and fixtures.

Chiyoda Corporation Consolidated Financial Statements FY2020

The Company and its consolidated domestic subsidiaries account for the liability for retirement
benefits based on the projected benefit obligations and plan assets at the balance sheet date.
The projected benefit obligations are attributed to periods on a benefit formula basis. Actuarial
gains and losses are amortized on a straight-line basis over 10 years within the averageremaining service period.
Actuarial gains and losses that are yet to be recognized in profit or loss are recognized withinequity (accumulated other comprehensive income), after adjusting for tax effects, are recognizedin profit or loss over a certain period no longer than the expected average remaining service
period of the employees.

15Notes to Consolidated Financial Statementst.

Asset Retirement Obligations—Under Japanese GAAP, an asset retirement obligation isdefined as a legal obligation imposed either by law or contract that results from the acquisition,
construction, development and normal operation of a tangible fixed asset and is associated withthe retirement of such tangible fixed asset. The asset retirement obligation is recognized as thesum of the discounted cash flows required for the future asset retirement and is recorded in the
period in which the obligation is incurred if a reasonable estimate can be made. If a reasonableestimate of the asset retirement obligation cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized when a reasonable estimate of the asset
retirement obligation can be made. Upon initial recognition of a liability for an asset retirement
obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related
fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to
expense through depreciation over the remaining useful life of the asset. Over time, the liability is
accreted to its present value each period. Any subsequent revisions to the timing or the amountof the original estimate of undiscounted cash flows are reflected as an adjustment to the carrying
amount of the liability and the capitalized amount of the related asset retirement cost.

u.

Research and Development Costs—Research and development costs are charged to income
as incurred.

v.

Leases—Japanese GAAP require that all finance lease transactions be capitalized byrecognizing lease assets and lease obligations in the balance sheet.
All other leases are accounted for as operating leases.

w. Income Taxes—The provision for income taxes is computed based on the pretax income
included in the consolidated statement of income. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted income tax rates to the temporary
differences.

x.

y.

16

z.

Derivatives and Hedging Activities—The Group uses derivative financial instruments,
including foreign currency forward contracts, as a means of hedging exposure to foreign currency
risks. The Group does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments are classified and accounted for as follows:(1) All derivatives are recognized as either assets or liabilities and measured at fair value, withgains or losses recognized in the consolidated statement of income.
(2) For derivatives used for hedging purposes, if such derivatives qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of the hedgedtransactions.
Foreign currency forward contracts are utilized to hedge foreign exchange risks. Certain assets
and liabilities on construction contracts denominated in foreign currencies are translated at thecontracted rates if the forward contracts qualify for hedge accounting.
Foreign currency deposits are held to hedge foreign exchange risks derived from forecasted
purchases of fixed assets denominated in foreign currency.
Hedging activities that are included in the scope of the Practical Solution on the Treatment ofHedge Accounting for Financial Instruments that Reference LIBOR (ASBJ PITF No. 40,
September 29, 2020) are treated in a special manner. Information on activities that apply to the
PITF are as follows:(1) Method of hedge accounting
Deferred hedge accounting is applied. Appropriation treatment is applied for forward
exchange contracts that qualify for it.

The Company and its wholly owned domestic subsidiaries file tax returns under the consolidated
corporate-tax system, which allows companies to base tax payments on the combined profits orlosses of the parent company and its wholly owned domestic subsidiaries.

(2) Hedging instrument

Concerning items which transitioned to the group tax sharing system and those for which thenonconsolidated tax payment system was reviewed in line with the transition to the group tax
sharing system, which has been established under the "Act for Partial Amendment of the Income
Tax Act, etc." (Act No. 8 of 2020), the Company and its consolidated domestic subsidiaries will
not apply the provisions of Paragraph 44 of "Implementation Guidance on Tax Effect Accounting"(ASBJ Guidance No. 28 of February 16, 2018), in accordance with Paragraph 3 of "Treatment of
Tax Effect Accounting for the Transition from the Consolidated Declaration System to the GroupTax Sharing System" (PITF No. 39 of March 31, 2020). As a result, the amounts of deferred tax
assets and deferred tax liabilities are reported based on the provisions of the tax act before theamendment.

(3) Hedged item

Foreign Currency Transactions—All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. Foreign exchange gains and losses from translation arerecognized in the consolidated statement of income to the extent that they are not hedged byforeign currency forward contracts.
Foreign Currency Financial Statements—Balance sheet accounts of consolidated foreignsubsidiaries are translated into Japanese yen at the current exchange rate as of the balance
sheet date except for equity, which is translated at the historical rate. Differences arising fromsuch translation are shown as "Foreign currency translation adjustments" under accumulated
other comprehensive income in a separate component of equity. Revenue and expense
accounts of consolidated foreign subsidiaries are translated into Japanese yen at the current
exchange rate as of the balance sheet date.

Chiyoda Corporation Consolidated Financial Statements FY2020

Forward exchange contracts

Forecasted foreign currency transactions(4) Type of hedge transaction
Transactions that fix Japanese yen cash flows
aa. Accounting Principles and Procedures Adopted When Related Accounting Regulations
Were Unclear (Consolidation Measures for Jointly Controlled Entities)―For jointly
controlled entities that are not legal entities, the assets, liabilities, revenues and expenses areconsolidated according to the amount of interest in the entity. This is conditional upon the factthat the contract specifies all assets and liabilities belong to the co-owners of the entity.
For incorporated jointly controlled entities, the assets, liabilities, revenues and expenses areconsolidated according to the amount of interest in the entity. This is conditional upon the factthat in reality, the entity could be judged as an unincorporated entity. For example, if the contract
specifies that all assets and liabilities belong to the co-owners, investment amounts are minimal,
and liquidation is certain upon the completion of the project, the entity could be deemed assimilar to unincorporated ones.

17

Notes to Consolidated Financial Statements(Additional Information)

In addition, on March 31, 2020, the ASBJ issued:

Starting from this fiscal year, the Company applies the Accounting Standard for Accounting
Policy Disclosures, Accounting Changes and Error Corrections (ASBJ Statement No. 24, March
31, 2020). Therefore, additional disclosure is made on accounting principles and procedures
adopted when related accounting regulations were unclear accounting policies and methods forjointly controlled entities.

• ASBJ Guidance No. 19, "Implementation Guidance on Disclosures about Fair Value of
Financial Instruments"
In order to improve the comparability with international accounting standards, the "AccountingStandard for Fair Value Measurement" and the "Implementation Guidance on AccountingStandard for Fair Value Measurement" were established. These specify the measures for fairvalue measurement, and are applied to the following:

ab. Per Share Information—Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average number of common shares
outstanding for the period, retroactively adjusted for stock splits.

• Financial Instruments specified in the "Accounting Standard for Fair Value Measurement"• Inventories held for trading purposes specified in the "Accounting Standard for Measurementof Inventories"

Diluted net income per share reflects the potential dilution that could occur if preferred stocks
were exercised. Diluted net income per share of common stock assumes full exercise ofpreferred stocks.

In addition, "Implementation Guidance on Disclosures about Fair Value of Financial Instruments"
was revised, which requires disclosures on the breakdown of financial instruments according totheir level of input.

Cash dividends per share presented in the accompanying consolidated statement of income are
dividends applicable to the respective fiscal years, including dividends to be paid after the end of
the year.

The Company expects to apply the accounting standard and guidance for annual periods
beginning on or after April 1, 2021, and is in the process of measuring the effects of applying theaccounting standard and guidance in future applicable periods.

ac. New Accounting Pronouncements
Accounting standards for revenue for recognition
On March 30, 2018, the ASBJ issued ASBJ Statement No. 29, "Accounting Standard for
Revenue Recognition," and ASBJ Guidance No. 30, "Implementation Guidance on AccountingStandard for Revenue Recognition," and ASBJ Guidance No. 19, "Implementation Guidance on
Disclosures about Fair Value of Financial instruments." The core principle of the standard andguidance is that an entity should recognize revenue to depict the transfer of promised goods orservices to customers in an amount that reflects the consideration to which the entity expects tobe entitled in exchange for those goods or services. An entity should recognize revenue inaccordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The accounting standard and guidance are effective for annual periods beginning on or after
April 1, 2021. Earlier application is permitted for annual periods beginning on or after April 1,
2018.
The Company expects to apply the accounting standard and guidance for annual periods
beginning on or after April 1, 2021, and is in the process of measuring the effects of applying theaccounting standard and guidance in future applicable periods.
Accounting standards for fair value measurement
On July 4, 2019, the ASBJ issued:• ASBJ Statement No. 30, "Accounting Standard for Fair Value Measurement"• ASBJ Guidance No. 31, "Implementation Guidance on Accounting Standard for Fair Value
Measurement"

3.

SIGNIFICANT ACCOUNTING ESTIMATESa.

Revenue Recognition(1) The amount recorded in the fiscal year ended March 31, 2021
Revenue ¥279,241 million ($2,515,692 thousand)(2) Information on significant accounting estimates
The Company, under the Accounting Standard for Construction Contracts (ASBJ Statement
No. 15, December 27, 2007), applies the percentage of completion method if the progress
outcome of a construction contract can be estimated reliably within a fiscal period. For othercontracts, the completed-contract method is applied. For percentage-of-completion method
contracts, the progress of the construction is reliably measured by applying the cost-to-cost
method. Revenue is calculated by multiplying the total construction revenue by the progressrate.
In estimating the total construction revenue, future assumptions are used, such as incentive
bonuses for significant milestones and liquidated damages for construction delays.
In addition, the total construction cost, which is the basis for calculating the percentage ofcompletion under the Accounting Standard for Construction Contracts and the total
construction cost to fully satisfy the performance obligations identified in IFRS 15 "Revenue
from Contracts with Customers" and Accounting Standards Codification (ASC) 606"Revenue from Contracts with Customers," includes significant estimation factors such as
the estimated construction cost to be incurred in the future to meet the performanceobligation and the estimated risks, including the effects of COVID-19. If unpredictablechanges in assumptions occur, such as the rise in material prices or the unavailability ofworkers, the total construction cost may change. In such cases, the amount of progress forcontracts may change, which could have a significant impact in the figures for the
consolidated financial statements in the following consolidated fiscal year.

• ASBJ Statement No. 9, "Accounting Standard for Measurement of Inventories"• ASBJ Statement No. 10, "Accounting Standard for Financial Instruments"

18

Chiyoda Corporation Consolidated Financial Statements FY2020

19

Notes to Consolidated Financial Statementsb.

(4) Date of the business divestiture

Allowance for Losses on Construction Contracts(1) The amount recorded in the fiscal year ended March 31, 2021

October 1, 2020

Allowance for losses on construction contracts ¥34,443 million ($310,302 thousand)(5) Summary of other transactions including legal forms(2) Information on significant accounting estimates(a) Business divestiture

The allowance for losses on construction contracts is provided for an estimated amount ofprobable losses to be incurred in future years in respect of construction projects in progress
which are expected to become onerous contracts.
In estimating the amount, certain estimates are used such as the prediction of future
construction costs in response to performance obligations and the estimated amount ofassumed risks, including the effects of COVID-19. When there are unexpected changes inassumptions, there is a possibility that additional allowance will be recorded in the following
consolidated fiscal year.
4.

Incorporation-type split of CST with succession of CST's IT business by the newcompany(b) Share transfer
Transfer of stocks, with cash, etc. as the only compensatory assetsb.

(1) Gain on business divestiture

BUSINESS DIVESTITURE¥27 million ($243 thousand)On October 1, 2020, the Company executed to spin off the IT business from Chiyoda System
Technologies ("CST"), succeeding it with a newly combined company of CST IT business and TIS
Inc. and to transfer part of the new company shares to TIS Inc.
a.

(2) The book value of assets and liabilities pertaining to the divested business was as follows:
Millions of Yen

Thousands of
U.S. Dollars

Current assets
Noncurrent assets

¥ 897
26

$ 8,081237

Total assets¥ 923$ 8,318

Current liabilities
Noncurrent liabilities¥ 372$ 3,356

Total liabilities¥ 372$ 3,356

Overview of the business divestiture(1) Name of the counterparty of the business divestiture and the share transfer(a) Name of the counterparty of the business divestiture
TIS Chiyoda Systems Corporation(b) Name of the counterparty of the share transfer
TIS Inc.
(2) Name and description of the business subject to the business divestiture(3) Accounting treatment(a) Name of the business

The "Accounting Standard for Business Divestitures" (ASBJ Statement No. 7, September
13, 2013) and the "Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures" (ASBJ Guidance No. 10, January 16, 2019)
have been applied.

IT business operated by CST(b) Contents of the business
Providing IT system consulting, development, integration and operational support, etc.

c.

CST provides clients with IT solutions covering project management, project control andoperational control of industrial plants to resolve challenges. In order to promote value
creation through internal and external digitalization, the Group believes that it is necessary tofurther strengthen the management infrastructures and to develop the abilities of the humanresources working in the IT business who play a core role in the delivery of IT services. The
Company is pursuing improved performance as an IT solution provider via enhancement of
CST's IT capability in collaboration with TIS Inc., a first class integrated IT enterprise inJapan.

Chiyoda Corporation Consolidated Financial Statements FY2020

Reportable segment in which the divested business is included
Engineering(3) Purpose of the business divestiture

20

Overview of accounting treatmentd.

Approximate amounts of gain or loss of the divested business included in the consolidated
statement of income for the year ended March 31, 2021, were as follows:

Revenue
Operating income

Millions of Yen

Thousands of
U.S. Dollars

¥ 585
166

$ 5,271
1,496

21

Notes to Consolidated Financial Statements

5.

Information on the available-for-sale securities sold during the years ended March 31, 2021 and2020, was as follows:

CONSTRUCTION CONTRACTS
Costs and estimated earnings recognized with respect to construction contracts which are accounted
for by the percentage-of-completion method at March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
2020

6.

March 31, 2021

Thousands of
U.S. Dollars
2021

None

None

Costs and estimated earnings
Amounts billed¥ 279,241(261,194 )¥ 332,157(301,647 )$ 2,515,692(2,353,107 )Net¥ 18,046¥ 30,510$ 162,585

March 31, 2020

The impairment loss on available-for-sale securities for the year ended March 31, 2020, was¥122 million.
7.

INVESTMENT SECURITIESImpairment loss on long-lived assets for the fiscal year ended March 31, 2021, was as follows:

Investment securities at March 31, 2021 and 2020, consisted of the following:¥ 1,720

March 31, 2021

Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Non-current—Equity securities¥ 1,540

None
March 31, 2020

$ 15,496

The costs and aggregate fair values of investment securities at March 31, 2021 and 2020, were as
follows:
March 31, 2021

Cost
Securities classified as—
Available-for-sale—equity securities¥ 307

Millions of Yen
Unrealized
Unrealized
Gains
Losses
¥ 286

¥ 25

¥ 569
8.

Securities classified as—
Available-for-sale—equity securities¥ 297

Millions of Yen
Unrealized
Unrealized
Gains
Losses
¥ 112

¥ 19

Fair
Value

Cost
Securities classified as—
Available-for-sale—equity securities

22

Chiyoda Corporation Consolidated Financial Statements FY2020$ 2,769$ 2,584$ 226

Used Status

Category ofAssetsJapan—

Goodwill

Fair
Value

Millions of Yen¥ 67

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATEDCOMPANIES
Investments in and advances to unconsolidated subsidiaries and associated companies at March 31,
2021 and 2020, were as follows:
Millions of Yen
2021
2020

¥ 390

March 31, 2021
Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
LossesLocation

Impairment Loss

Regarding the goodwill recorded on the acquisition of the shares of subsidiary in Japan, the Group
concluded that it was required impairment, as its recoverable amount at the time of transfer from theCompany to the new company whose stock is to be owned by the non-Group company was lower
than its book value. The recoverable amount for goodwill is measured at its net realizable values at
the transfer date.

Fair
Value

March 31, 2020

Cost

IMPAIRMENT LOSS OF LONG-LIVED ASSETS

Thousands of
U.S. Dollars
2021

Investments¥ 3,981¥ 4,058$ 35,871

Total¥ 3,981¥ 4,058$ 35,871$ 5,12823

Notes to Consolidated Financial Statements

9.

ASSETS AND LIABILITIES ACCOUNTED FOR AS FINANCIAL TRANSACTIONS

11.

Assets and liabilities accounted for as financial transactions at March 31, 2021 and 2020, were as
follows:
Millions of Yen
2021
2020
Land
Buildings and structures
Tools, furniture and fixtures
Current portion of long-term debt
Long-term debt
10.

PLEDGED ASSETS AND SECURED LIABILITIESAssets that are pledged as collateral were as follows:

Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020

¥ 381
311

¥ 381
341

$ 3,433
2,808

Buildings and fixtures
Land
Investment securities¥ 2,0294,013
37$ 18,284
36,156
334

747

122
747

6,738

Total

¥ 6,080$ 54,775

Secured liabilities were as follows:

LONG-TERM DEBT
Long-term debt at March 31, 2021 and 2020, consisted of the following:
Millions of Yen
2021
2020
Long-term loans from banks, with interest rates at
2.5% (2021)—Unsecured
Long-term loans from banks, with interest rates at
1.9% (2021) and 1.9% (2020)—Unsecured
Long-term loans from banks, with interest rate at
0.8% (2021) and 0.8% (2020)—Unsecured
Long-term loans from banks, with interest rate at
0.7% (2021) and 0.7% (2020)—Unsecured
Long-term loans accounted as financial transactions,with interest rate at 3.4% (2021) and3.4% (2020)—CollateralizedLong-term loans accounted as financial transactions,with interest rate at 1.1% (2021)—Collateralized
Obligations under finance leases
Total
Less current portionLong-term debt, less current portion¥ 20,000¥ 20,000$ 180,180

10,00010,00090,090

4,000

4,000

36,036

1,000

1,000

9,009

747

870

6,738

10,0001,066
46,814(1,201 )

1,129
37,000(542 )

90,0909,605
421,749(10,826 )¥ 45,612¥ 36,458$ 410,922

24

Millions of Yen

2021
2022
2023
2024

¥

Total

¥ 45,747

Chiyoda Corporation Consolidated Financial Statements FY2020

747
10,00015,00020,000Millions of Yen
2021
2020

Thousands of
U.S. Dollars
2021

Annual maturities of long-term debt, excluding finance leases, at March 31, 2021, were as follows:Year Ending
March 31

Thousands of
U.S. Dollars
2021

Long-term loans

6,738
90,090135,135
180,180$ 412,143$ 90,090¥ 10,000

Other than the assets mentioned above, an investment in a Special Purpose Company ("SPC") of¥55,881 million ($503,432 thousand) is also pledged as collateral. The investment amount iseliminated against the SPC's equity account.
12.

RETIREMENT AND PENSION PLANS
The Company and consolidated subsidiaries have funded or unfunded defined benefit pension plansand defined contribution pension plans for employees.
Under defined benefit corporate pension plans, all of which are funded, employees are entitled tocertain lump-sum payments or pension payments based on cumulated points which are granted inaccordance with years of continuous employment, occupational classification and performance
evaluation. Under severance lump-sum payment plans, employees are entitled to certain lump-sum
payments based on salary and service period.
Certain consolidated subsidiaries have defined benefit corporate pension plans or severance
lump-sum payment plans, and calculate retirement benefit expenses by using the simplified method.
(1) The changes in defined benefit obligation for the years ended March 31, 2021 and 2020, wereas follows:
Millions of Yen
2021
2020

Thousands of
U.S. Dollars$

Thousands of
U.S. Dollars
2021

Thousands of
U.S. Dollars
2021

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains
Benefits paid
Others¥ 19,809995
175(427 )(1,663 )(42 )¥ 20,896
1,087
151(212 )(2,116 )3$ 178,463
8,968
1,584
(3,848 )(14,985 )(380 )

Balance at end of year

¥ 18,847¥ 19,809$ 169,80125

Notes to Consolidated Financial Statements(2) The changes in plan assets for the years ended March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
2020

Thousands of
U.S. Dollars
2021

Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Others¥ 18,204
351
1,198
759
(1,661 )41¥ 19,669
354(868 )
712(1,669 )6$ 164,002
3,164
10,795
6,840(14,968 )373

Balance at end of year

¥ 18,893¥ 18,204$ 170,208(3) The changes in the liability recorded in the consolidated balance sheet by using the simplified
method for the years ended March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
2020

Thousands of
U.S. Dollars
2021

Balance at beginning of year
Benefit costs
Benefits paid
Contribution to the plans
Others

¥ 381
(14 )
(36 )
(92 )
1

¥ 313
206
(66 )
(68 )
(2 )

$ 3,437(127 )(327 )(833 )
12

Balance at end of year

¥ 239

¥ 381

$ 2,160(5) The components of net periodic benefit costs for the years ended March 31, 2021 and 2020,
were as follows:
Millions of Yen
2021
2020
Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains
Benefit costs in simplified method
Others¥ 995
175(351 )(100 )(14 )3¥ 1,087151(354 )(338 )
206$ 8,968
1,584(3,164 )(907 )(127 )
31

Net periodic benefit costs

¥ 708

¥ 752

$ 6,384(6) Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
2020
¥ (1,576 )¥ 914$ (14,204 )Total¥ (1,576 )¥ 914$ (14,204 )(7) Amounts recognized in accumulated other comprehensive income (before income tax effect) in
respect of defined retirement benefit plans as of March 31, 2021 and 2020, were as follows:¥ 20,021(20,175 )(153 )
348¥ 20,948(19,293 )
1,654
332

$ 180,373(181,760 )(1,387 )3,140

Net liability arising from defined
benefit obligations¥¥ 1,986$

194

Millions of Yen
2021
2020
Liability for retirement benefits
Asset for retirement benefits¥ 761(566 )¥ 1,986

Net liability arising from defined
benefit obligations¥ 194¥ 1,986

Millions of Yen
2021
2020

Thousands of
U.S. Dollars
2021

Funded defined benefit obligations
Plan assets
Total
Unfunded defined benefit obligations

Thousands of
U.S. Dollars
2021

Unrecognized actuarial gains¥ (1,579 )¥ (2 )$ (14,229 )

Total¥ (1,579 )¥ (2 )$ (14,229 )(8) Plan assetsa.

Components of plan assets
Plan assets as of March 31, 2021 and 2020, consisted of the following:

1,753

Thousands of
U.S. Dollars
2021$ 6,856(5,103 )$ 1,753

Thousands of
U.S. Dollars
2021

Actuarial (gains) losses(4) Reconciliation between the liability recorded in the consolidated balance sheet and the balancesof defined benefit obligations and plan assets:
Millions of Yen
2021
2020

Thousands of
U.S. Dollars
2021

b.

2021

2020

Debt investments
Equity investments
General accounts
Others

34 %
27
24
15

36 %
23
26
15

Total

100 %

100 %

Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates ofreturn which are expected currently and in the future from the various components of theplan assets.

26

Chiyoda Corporation Consolidated Financial Statements FY2020

27

Notes to Consolidated Financial Statements(9) Assumptions used for the years ended March 31, 2021 and 2020, were set forth as follows:

Discount rate
Expected rate of return on plan assets

2021

2020

Mainly 0.7%
Mainly 1.8%

Mainly 0.7%
Mainly 1.8%

(10) Payables to defined contribution plans of the Company and consolidated subsidiaries for theyears ended March 31, 2021 and 2020, were ¥337 million ($3,036 thousand) and ¥400 million,
respectively.
13.

EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:a.

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders' meeting. Additionally, forcompanies that meet certain criteria, an Audit & Supervisory Board may declare dividends(except for dividends-in-kind) at any time during the fiscal year if the company has prescribed soin its articles of incorporation. The Board of Directors of a company with an audit and supervisorycommittee (as implemented under the Companies Act effective May 1, 2015) may also declare
dividends at any time because such company, by its nature, meets the criteria under theCompanies Act. The Company became organized as a company with an audit and supervisorycommittee effective June 23, 2016. However, the Company does not meet all the above criteria.
The Companies Act permits companies to distribute dividends in kind (noncash assets) toshareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of
Directors if the articles of incorporation of the company so stipulate. The Companies Act provides
certain limitations on the amounts available for dividends or the purchase of treasury stock. The
limitation is defined as the amount available for distribution to the shareholders, but the amountof net assets after dividends must be maintained at no less than ¥3 million.
The preferred dividend annual rate for the Class A Preferred Shares is set at 3%. If there is a
shortfall in dividend on the shareholders of Class A Preferred Shares during a fiscal year, such
shortfall will be carried over into the following fiscal year or into subsequent fiscal years. The
shareholders of Class A Preferred Shares may not receive dividends from surplus in excess of
the amount of such preferred dividends. The order of preference on payment of dividends fromsurplus between the Class A Preferred Shares and common shares is as follows: the amountequal to the unpaid dividends carried over on the Class A Preferred Shares is paid first; preferred
dividends on the Class A Preferred Shares are paid next; and dividends on common shares arepaid last.

b.

The Board of Directors met on May 8, 2020, and resolved to reduce capital and capital reserves
and appropriate these funds as compensation for deficit. This was carried out to offset the loss inretained surplus carried forward and improve its financial condition. Capital and capital reserves
are transferred to other capital surplus, and other capital surplus is transferred to retained
earnings carried forward.
(a) Outline of capital reduction(1) Amount of capital reduced
The capital amount of ¥78,396 million as of March 31, 2020, was reduced by¥63,381 million ($571,005 thousand) to ¥15,014 million ($135,268 thousand).
(2) Method of capital reduction
In accordance with Article 447, Paragraph 1 of the Companies Act, the Company
reduced its capital without compensation and transferred the total amount of reduced
capital to other capital surplus. This reduction did not affect the number of shares heldby shareholders.
(b) Outline of reserve capital reduction(1) Amount of capital reserve reduced
The capital reserve amount of ¥72,112 million as of March 31, 2020, was reduced by¥72,112 million ($649,663 thousand) to ¥0.
(2) Method of capital reduction
In accordance with Article 448, Paragraph 1 of the Companies Act, the Company
reduced its capital reserve and transferred the total amount of the reduced capitalreserve to other capital surplus.
(c) Outline of appropriation of surplus
Based on Article 452 of the Companies Act, the Company made up for deficits bytransferring to retained earnings a carried forward a total of ¥135,494 million, which isequivalent to the increase of other capital surplus due to the aforementioned capital
reduction. As a result, the amount of retained earnings carried forward after the transfer is¥0.
(1) Items and amount of reduced surplus
Other capital surplus ¥135,494 million ($1,220,668 thousand)(2) Items and amount of increased surplus
Retained earnings carried forward of ¥135,494 million ($1,220,668 thousand)Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated asa legal reserve (a component of retained earnings) or as additional paid-in capital (a componentof capital surplus), depending on the equity account charged upon the payment of such
dividends, until the aggregate amount of legal reserve and additional paid-in capital equals 25%of the common stock. Under the Companies Act, the total amount of additional paid-in capitaland legal reserve may be reversed without limitation. The Companies Act also provides that
common stock, legal reserve, additional paid-in capital, other capital surplus, and retained
earnings can be transferred among the accounts within equity under certain conditions upon
resolution of the shareholders.

28

Chiyoda Corporation Consolidated Financial Statements FY2020

29

Notes to Consolidated Financial Statementsc.

*1 Net deferred tax assets as of March 31, 2021 and 2020, were recorded in the accompanying consolidated balance sheet as follows:

Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of suchtreasury stock by resolution of the Board of Directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the shareholders, which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component ofequity.
The Companies Act also provides that companies can purchase both treasury stock acquisitionrights and treasury stock. Such treasury stock acquisition rights are presented as a separate
component of equity or deducted directly from stock acquisition rights.

14.

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 31% for theyears ended March 31, 2021 and 2020.
The tax effects of significant temporary differences and tax loss carryforwards which resulted indeferred tax assets and liabilities at March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
2020
Deferred tax assets:
Tax loss carryforwards*3
Cost of revenue
Allowance for losses on construction contracts
Loss on valuation of investment securities
Adjustment of percentage of completion for foreign
construction
Accounts receivable from completed construction
contracts
Long-term accounts receivable
Advances receipts on construction contracts
Long-term loans receivable
Allowance for employees' bonus
Deposits received
Costs of construction contracts in process
Liability for retirement benefits
Other
Subtotal of deferred tax assets
Valuation allowance for tax loss carryforwards*3
Valuation allowance for temporary differences
Subtotal valuation allowance*2¥ 48,753
6,057
5,952
4,809

¥ 49,172
3,815
3,579
4,809

$ 439,224
54,57353,62743,325

2,424

5,218

21,839

2,290
1,824
1,695
1,643
1,150
844
547
520
2,323
80,836(48,719 )(30,992 )(79,711 )

895
1,824
2,471
1,643
1,247
822
581
3,896
79,977(49,138 )(29,725 )(78,864 )

20,631
16,433
15,27114,803
10,368
7,610
4,933
4,685
20,928728,259(438,910 )(279,212 )(718,122 )

1,125

1,112

10,136

250
202
277

291
161
65

2,252
1,821
2,503

730

518

6,578

Total
Deferred tax liabilities:
Fixed assets as asset retirement obligations
Profit/loss in joint venture
Other
Total
Net deferred tax assets*1

30

Chiyoda Corporation Consolidated Financial Statements FY2020

Thousands of
U.S. Dollars
2021

¥

394

¥

594

$

Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Investments and other assets—Deferred tax assets
Long-term liabilities—Other

¥ 394

¥ 599
(5 )

$ 3,558*2 The main reason for the fluctuation of the valuation allowance is the decrease of the valuation allowance for the allowance for losses on construction contracts.
*3 Amounts of tax loss carryforwards and related deferred tax assets by tax loss carryforwards for the year ended March 31, 2021 and 2020, were as follows:

March 31, 2021
Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets

March 31, 2020
Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets

March 31, 2021
Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets

Millions of Yen
After
After
3 Years
4 Years
throughthrough
4 Years
5 Years

1 Year
or
Less

After
1 Yearthrough
2 YearsAfter
2 Years
through
3 Years¥ 376(376 )¥ 13(13 )¥ 3,640(3,605 )34

1 Year
or
Less

After
1 Yearthrough
2 YearsAfter
2 Years
through
3 Years¥ 653(653 )¥ 291(291 )¥ 161(161 )¥ 65(65 )¥ 44,518(44,518 )1 Year
or
Less

After
1 Yearthrough
2 Years

Thousands of U.S. Dollars
After
After
After
2 Years
3 Years
4 Years
throughthroughthrough
3 Years
4 Years
5 Years

After
5 Years$ 3,391(3,391 )$ 117(117 )$ 32,797(32,483 )
313

¥ 236
(236 )

After
5 Years¥ 2,242(2,242 )¥ 42,244(42,244 )Millions of Yen
After
After
3 Years
4 Years
throughthrough
4 Years
5 Years

After
5 Years¥ 3,482(3,448 )33$ 2,133(2,133 )$ 20,201(20,201 )$ 380,583(380,583 )Total¥ 48,753(48,719 )34

Total¥ 49,172(49,138 )33

Total$ 439,224(438,910 )313* Figures for tax loss carryforwards were the amounts multiplied by the effective statutory tax rate.

- 32 -

3,558

31

Notes to Consolidated Financial Statements

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statement of income for the years ended March 31, 2021
and 2020, is as follows:

15.

2021

2020

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Nontaxable dividend income
Profit/loss in joint venture
Tax rate differences with foreign subsidiaries
Income taxes for prior periods
Other

31 %
8
(2)
(16)
6
(18)
3

31 %
1
(2)
14
(7)
5
(5)

Actual effective tax rate

10 %

37 %

RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥1,582 million ($14,252 thousand) and¥1,620 million for the years ended March 31, 2021 and 2020, respectively.

16.

17.

Investment securities are equity securities related to the business which the Group operates.
Marketable securities are exposed to the risk of fluctuations in stock prices.
Payment terms of payables, such as trade notes and trade accounts, are generally less than one
year. Although payables in foreign currencies are exposed to the market risk of fluctuation inforeign currency exchange rates, the position, net of receivables in foreign currencies, is hedgedby using foreign currency forward contracts.
Derivatives are foreign currency forward contracts, which are used to manage exposure tomarket risks from changes in foreign currency exchange rates of receivables and payables.
Please see Notes 2.z and 19 for more details about derivatives.
(3) Risk Management for Financial Instruments
Credit risk management

As a result of the sale of all shares of PT. Suluh Ardhi Engineering, held by the Southeast Asiansubsidiary of the Company, and the partial sale of shares of TIS Chiyoda Systems Inc., held by theCompany, a gain of ¥413 million ($3,725 thousand) on the sale of shares of subsidiary andassociated company was recorded.

The Group manages its credit risk from receivables based on internal guidelines, which include
monitoring of payment terms and balances of major customers to identify the default risk ofcustomers at an early stage.

LEASESWith respect to foreign currency forward contracts, the Group limits the counterparties to thosederivatives to major financial institutions that can bear losses arising from credit risk.

The Group leases certain machinery, computer equipment, and other assets.

Market risk management (risk of foreign exchange and interest rates)

Future minimum payments under non-cancelable operating leases were as follows:

Foreign currency trade receivables and payables are exposed to market risk resulting fromfluctuations in foreign currency exchange rates. Such foreign exchange risk grasped by currency
and month is hedged principally with foreign currency forward contracts.

Thousands of
U.S. Dollars
2021

Due within one year
Due after one year

¥ (84 )(39 )

¥ (139 )(116 )$(765 )(358 )Total¥ (124 )¥ (256 )$ (1,124 )Effective from the current fiscal year, the consolidated foreign subsidiaries excluding the ones in the
U.S., applied "Leases" (IFRS 16). The effect of these changes on consolidated financial statements
was immaterial.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments for cash surpluses, if any, invested in low-risk financial
assets, such as deposits at notice. For operating capital, the Group uses bank loans. Derivatives
are used, not for speculative purposes, but to manage exposure to the market risk of fluctuation
in foreign currency exchange rates and interest rates.

32

Receivables, such as trade notes and trade accounts, are exposed to customer credit risk.
Although receivables in foreign currencies are exposed to the market risk of fluctuation in foreign
currency exchange rates, the position, net of payables in foreign currencies, is hedged by using
foreign currency forward contracts.

GAIN ON SALES OF SHARES OF SUBSIDIARY AND ASSOCIATED COMPANY

Millions of Yen
2021
2020

18.

(2) Nature and Extent of Risks Arising from Financial Instruments

Chiyoda Corporation Consolidated Financial Statements FY2020

Foreign currency forward contracts are controlled under the internal guidelines. The position
related to particular construction contracts is identified and is reviewed. For setting andcancelling foreign currency contracts, reconciliation of the transaction and balances withcustomers' confirmation replies is made, and the transactions related to foreign currency forward
contracts are executed and accounted for under internal guidelines.
Marketable and investment securities are managed by monitoring the market values andfinancial position of issuers on a regular basis. The Group assesses the stock price risk
quantitatively so as to account for significant declines in market value as impairment losses.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on
their maturity dates. The Group manages its liquidity risk by holding an adequate volume of liquid
assets along with timely, adequate financial planning.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted
price is not available, another rational valuation technique is used instead. Also, please see
Note 19 for fair values for derivatives.

33

Notes to Consolidated Financial Statements

March 31, 2021

(a) Fair values of financial instruments

Thousands of U.S. Dollars
Carrying
Unrealized
AmountFair Value
Gain (Loss)

March 31, 2021
Carrying
AmountMillions of Yen
Fair Value

Cash and cash equivalents
Short-term investments
Notes and accounts receivable—trade
Allowance for doubtful accounts*
Costs and estimated earnings onlong-term construction contracts
Accounts receivable—other
Allowance for doubtful accounts*
Jointly controlled assets of joint venture
Investment securities¥ 98,738
8,250
30,480(1,222 )¥ 98,738
8,250
30,480(1,222 )18,046
77,261(21 )
56,845569

18,046
77,261(21 )
56,845569

Total¥ 288,948¥ 288,948

Current portion of long-term debt
Notes and accounts payable—trade
Income taxes payable
Long-term debt

¥

¥

Total

¥ 161,574

747
115,187
638
45,000

Unrealized
Gain (Loss)34

162,585
696,045(190 )
512,121
5,128

162,585
696,045(190 )
512,121
5,128

Total

$ 2,603,142$ 2,603,142

Current portion of long-term debt
Notes and accounts payable—trade
Income taxes payable
Long-term debt$$

$ 1,455,626

6,738
1,037,729
5,753
405,405

6,738
1,037,729
5,753
404,883$ (521 )$ 1,455,104$ (521 )Total¥ 161,516¥ (57 )* Allowance for doubtful accounts corresponding to trade receivable is deducted.

Millions of Yen
Fair Value¥ 115,932
8,471
30,671(1,222 )¥ 115,932
8,471
30,671(1,222 )30,51068,712(20 )96,028390

30,51068,712(20 )96,028390

Total¥ 349,475¥ 349,475

Current portion of long-term debt
Notes and accounts payable—trade
Income taxes payable
Long-term debt

¥

¥

Total

¥ 174,629

Chiyoda Corporation Consolidated Financial Statements FY2020$ 889,533
74,330274,601(11,012 )¥ (57 )Cash and cash equivalents
Short-term investments
Notes and accounts receivable—trade
Allowance for doubtful accounts*
Costs and estimated earnings onlong-term construction contracts
Accounts receivable—other
Allowance for doubtful accounts*
Jointly controlled assets of joint venture
Investment securities

122
137,546
1,212
35,747$ 889,533
74,330274,601(11,012 )747
115,187
638
44,942

March 31, 2020
Carrying
AmountCash and cash equivalents
Short-term investments
Notes and accounts receivable—trade
Allowance for doubtful accounts*
Costs and estimated earnings onlong-term construction contracts
Accounts receivable—other
Allowance for doubtful accounts*
Jointly controlled assets of joint venture
Investment securities

Unrealized
Gain (Loss)

Cash and Cash Equivalents, Short-Term Investments, Notes and Accounts Receivable—
Trade, Costs and Estimated Earnings on Long-Term Construction Contracts, and Accounts
Receivable—Other
The carrying values of the accounts mentioned above approximate fair value because of
their short maturities.
Jointly Controlled Assets of Joint Venture
The jointly controlled assets of the joint venture consists of cash recognized based on the
Company's share of the venture. The carrying values of jointly controlled assets of the joint
venture approximate fair value because of their short maturities.
Investment Securities
The fair values of investment securities are measured at the quoted market price of thestock exchange for the equity instruments. Fair value information for investment securities
by classification is included in Note 6.
The above schedules do not include investment securities with fair values that cannot be
reliably determined.

122
137,546
1,212
35,692¥ (55 )

¥ 174,573¥ (55 )

35

Notes to Consolidated Financial Statements

Notes and Accounts Payable—Trade and Income Taxes Payable

March 31, 2020

The carrying values of the accounts mentioned above approximate fair value because of
their short maturities.

Due in1 Yearor
Less

Current Portion of Long-Term Debt and Long-Term Debt
The fair value of long-term debt is calculated by discounting total principal and interest
payments to present value using a discount rate equal to the rate that would be charged if
the loan was newly borrowed.
Derivatives
Fair value information for derivatives is included in Note 19.
(b) Carrying amount of financial instruments with fair values that cannot be reliably determined
Millions of Yen
2021
2020
Investment securities that do not have a quoted
market price in an active market
Investments in equity instruments that do nothave a quoted market price in an active market
Investments in unconsolidated subsidiaries andassociated companies that do not have a quoted
market price in an active market

Thousands of
U.S. Dollars
2021¥ 1,148¥ 1,146$ 10,344

2

2

23

3,981

4,058

35,871

36

Millions of Yen
Due after Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

46,586
77,23956,845

¥ 718

Total

¥ 287,632¥ 718

Chiyoda Corporation Consolidated Financial Statements FY2020

56,30968,691
96,028¥ 3,650

Total¥ 345,405¥ 3,650

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs and estimatedearnings on long-term construction contracts*
Accounts receivable—other*
Jointly controlled assets of joint venture$ 889,278
74,330419,697695,854512,121$ 6,477

Total$ 2,591,281$ 6,477* Allowance for doubtful accounts is deducted.
Please see Note 10 for annual maturities of long-term debt.
19.

¥ 98,709
8,250¥ 115,904
8,471

Thousands of U.S. Dollars
Due inDue after Due after
1 Year
1 Year
5 Yearsor
throughthroughLess
5 Years
10 Years

March 31, 2021

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs and estimatedearnings on long-term construction contracts*
Accounts receivable—other*
Jointly controlled assets of joint venture

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs and estimatedearnings on long-term construction contracts*
Accounts receivable—other*
Jointly controlled assets of joint venture

March 31, 2021

(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities

Due in1 Yearor
LessMillions of Yen
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

DERIVATIVES
Derivative Transactions to Which Hedge Accounting Is Not Applied
March 31, 2021

Contract
AmountMillions of Yen
Contract
AmountFair
Due after
One Year
Value

Foreign currency forward contracts:
Selling USD/buying JPY
Selling EUR/buying JPY
Selling AUD/buying JPY¥ 30,379
8,784
53,633¥ (24 )(6 )
(25 )¥ (24 )
(6 )
(25 )

Total

¥ 92,797¥ (57 )¥ (57 )

Unrealized
Gain (Loss)37

Notes to Consolidated Financial Statements

March 31, 2020

March 31, 2020

Contract
AmountMillions of Yen
Contract
AmountFair
Due after
One Year
Value

Foreign currency forward contracts:
Selling USD/buying JPY
Selling EUR/buying JPY
Selling AUD/buying JPY¥ 32,165
5,685
43,251¥ (28 )
(13 )(341 )¥ (28 )
(13 )(341 )

Total¥ 81,102¥ (383 )¥ (383 )Unrealized
Gain (Loss)

Contract
AmountThousands of U.S. Dollars
Contract
AmountFair
Due after
Unrealized
One Year
Value Gain (Loss)

Foreign currency forward contracts:
Selling USD/buying JPY
Selling EUR/buying JPY
Selling AUD/buying JPY$ 273,690
79,136483,188$ (221 )(61 )(233 )$ (221 )(61 )(233 )

Total$ 836,015$ (516 )$ (516 )Derivative Transactions to Which Hedge Accounting Is Applied
March 31, 2021

Hedged Item

Foreign currency
forecasted transaction

Payables

Total

38

Millions of Yen
Contract
AmountFairContract
Due after
Value
AmountOne Year(Loss)*1

Other*2:
Selling USD/buying JPY
Buying USD/selling JPY

Foreign currency
forecasted transaction

Chiyoda Corporation Consolidated Financial Statements FY2020

¥ 196
824
70

¥ (3 )
41
1¥ 1,091¥ 38

Payables

Total

¥ 138
1,076

¥ 17
489

¥ (6 )
20¥ 1,215

¥ 506

¥ 13

¥ 141
376
¥ 518

March 31, 2021

Hedged Item
Foreign currency forward
contracts—Accounted forunder deferred hedge
accounting method:
Selling USD/buying JPY
Buying USD/selling JPY
Buying EUR/selling JPY

Foreign currency
forecasted transaction

Total
Other*2:
Buying USD/selling JPY

Total
Other*2:
Buying USD/selling JPY

Foreign currency forward
contracts—Accounted forunder deferred hedge
accounting method:
Selling USD/buying JPY
Buying USD/selling JPY
Total

March 31, 2021

Foreign currency forward
contracts—Accounted forunder deferred hedge
accounting method:
Selling USD/buying JPY
Buying USD/selling JPY
Buying EUR/selling JPY

Hedged Item

Millions of Yen
Contract
AmountFairContract
Due after
Value
AmountOne Year (Loss)*1

PayablesTotal

Thousands of U.S. Dollars
Contract
AmountFairContract
Due after
Value
AmountOne Year (Loss)*1$ 1,771
7,431
634$ (31 )
371
9

$ 9,837$ 349$ 4,029$ 4,029*1 Fair value is based on prices obtained from financial institutions.
*2 Fair value of the foreign currency forward contract assigned for payables is included in the fairvalue of payables disclosed in Note 18.

¥ 447
¥ 447

39

Notes to Consolidated Financial Statements

20.

22.

PROVISION FOR BUSINESS STRUCTURE IMPROVEMENT

A reconciliation of the differences between basic and diluted net income per share ("EPS") for theyears ended March 31, 2021 and 2020, was as follows:

The Company recognized "provision for business structure improvement" in the year ended March
31, 2019. As part of the Company's medium-term management plan, it has been striving to implement
structural reform including restructuring of the group companies.

Year Ended March 31, 2021

Along with the cost being spent, the Company recognized ¥232 million as "reversal of provision forbusiness structure improvement" in the year ended March 31, 2020.
21.

NET INCOME PER SHAREOTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) for the years ended March 31, 2021 and2020, were as follows:
Millions of Yen
2021
2020
Unrealized gain on available-for-sale securities:
Losses arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain on derivatives under hedge accounting:
Gains arising during the year
Reclassification adjustments to profit or loss
Adjustment to acquisition cost of assets
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive loss of associates:
Loss arising during the year
Total
Total other comprehensive income

40

Chiyoda Corporation Consolidated Financial Statements FY2020

¥ 170

¥

170
(26 )
¥ 144
¥

¥

¥

28
7
(1 )
35
(10 )

¥

24

¥

Thousands of
U.S. Dollars
2021

(66 )
115
49
14

$ 1,53864$ 1,301

Basic EPS—Net income available
to common shareholders
Effect of dilutive securities—
Preferred stock
Diluted EPS—Net income forcomputation

1,538(236 )

43
13
1
59
(2 )

$

56

$

Millionsof YenNet Income
Attributableto Owners of
the Parent

Thousandsof Shares¥ 5,893258,966

2,100

715,750¥ 7,993

Yen

U.S. Dollars

WeightedAverage
Shares

EPS¥ 22.76$ 0.21

974,716¥ 8.20$ 0.07

Millionsof YenNet Income
Attributableto Owners of
the Parent

Thousandsof Shares

Yen

WeightedAverage
SharesEPS¥ 10,602

258,967¥ 40.94

Year Ended March 31, 2020

260
70
(10 )
320
(97 )

Basic EPS—Net income available
to common shareholders

222

There is no dilutive effect for the year ended March 31, 2021.

¥ 2,634(310 )¥ 3,197$ 23,734(2,795 )¥ 2,324¥ 3,197$ 20,938¥ 1,624(47 )
1,576(155 )¥ (576 )(338 )(914 )
1$ 14,633(429 )
14,204(1,404 )¥ 1,420¥ (912 )$ 12,799

¥

(60 )

¥

(66 )

$

(541 )

¥

(60 )

¥

(66 )

$

(541 )¥ 3,854¥ 2,339$ 34,721

23.

SUPPLEMENTAL CASH FLOW INFORMATIONThe IT business of Chiyoda System Technologies Corporation, a consolidated subsidiary of theCompany, was transferred to a newly established company. In addition, the main breakdown ofassets and liabilities at the time of the transfer of the majority of the shares of the newly establishedcompany was as follows:
Millions of Yen

Thousands of
U.S. Dollars

Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Investment accounts after the sales of shares
Gain on sales of shares
Selling price of the stock
Cash and cash equivalents

¥ 897
26
(372 )$ 8,081237(3,356 )(187 )
27
391(619 )(1,687 )248
3,524(5,576 )Proceeds from sales of investment in subsidiaries¥ (227 )$ (2,052 )41

Notes to Consolidated Financial Statements

24.

(4) Trustee

SUBSEQUENT EVENTS(Dividends)

Mitsubishi UFJ Trust and Banking Corporation (planned)

The following appropriation of retained earnings related to preferred stock at March 31, 2021, wasapproved at the Company's shareholders' meeting held on June 23, 2021:(Co-trustee: The Master Trust Bank of Japan, Ltd. (planned))Year-end cash dividends, ¥20.78 ($0.19) per share

Millions of Yen

Thousands of
U.S. Dollars¥ 3,636$ 32,756(Introduction of Performance-Based Stock Compensation Plan)
The Board of Directors met on May 7, 2021, and resolved to introduce a "Performance-Based Stock
Compensation Plan" (the "Plan") for our directors and executive officers (excluding non-executive
directors and non-residents of Japan) (the "Directors & Officers"). This proposal is to be submitted at
the ordinary general meeting of shareholders of the Company on June 23, 2021.
a.

Purpose of the Plan
The Plan is introduced to improve medium-to-long term business performance and to heighten
the mindset of contributing to the enhancement of corporate value.

b.

Outline of the Plan

(5) Beneficiaries
Directors & Officers who satisfy the beneficiary requirements(6) Trust administrator
A third party who has no interest in Chiyoda (certified public accountant)(7) Date of trust agreement
September 2021 (planned)(8) Trust period
From September 2021 to September 2024 (planned)(9) Date of start of the Plan
September 1, 2021 (planned)

Under this Plan, the Company will grant to the Directors & Officers for three fiscal years (startingwith the fiscal year ending on March 31, 2022, and ending with the fiscal year ending on March
31, 2024) certain points that are predetermined depending on their positions and goal
achievement, and will deliver to them Chiyoda shares and cash equivalent to the proceeds of thesales of Chiyoda shares ("Chiyoda Shares & Benefits") corresponding to such points.

(10) Exercise of voting rights

The Chiyoda Shares & Benefits will be delivered upon the retirement of Directors & Officers, andare conditional on the satisfaction of certain requirements. Details of the Plan are listed as below.

Chiyoda common stock

Description of the Board Incentive Plan trust agreement(1) Type of trust
Money trust other than a specified cash trust for separate investment (third party benefit
trust)(2) Purpose of trust
To grant incentives to the Directors & Officers(3) Settlor
Chiyoda Corporation

No voting rights will be exercised.
(11) Type of shares to be acquired(12) Maximum trust amount¥615 million (including trust fees and trust expenses)
This represents the amount of the sum of trust monies for the Directors & Officers.
(13) Method of share acquisition
On the market or directly from Chiyoda (disposition of treasury shares)(14) Holder of vested rights
Chiyoda Corporation(15) Residual property
The residual property that we, as the holder of vested rights, can receive will be limited tothe amount of the trust expense fund that consists of the trust money after deducting thestock acquisition fund.

42

Chiyoda Corporation Consolidated Financial Statements FY2020

43

Notes to Consolidated Financial Statements(Lawsuit Filed against a Joint Venture Partner)(Significant Borrowings)

A lawsuit was filed against JGC Holdings Corporation ("JGC"), a joint venture partner, in the
Yokohama District Court. In early June 2021, JGC sent a notice of the lawsuit to Chiyoda. Dependingon the outcome of the lawsuit, Chiyoda has a possibility of being held liable in accordance with its
share of the liability under the joint venture agreement with JGC and KBR Inc. ("KBR"). Therefore, in
response to this notice, Chiyoda will participate in the lawsuit as an auxiliary intervener.

In a Board of Directors' meeting on May 21, 2021, Chiyoda resolved to renew the Borrowing
Agreement between Chiyoda and Mitsubishi Corporation Financial & Management Services (Japan)
Ltd. ("MCFJ"), a wholly owned subsidiary of Mitsubishi Corporation. The contract is already renewed
as of May 21, 2021.

a.

Details of the Renewal

Date of the Lawsuit Filed(1) Lender

April 16, 2021b.

MCFJ for both (i) and (ii) below

Plaintiff(1) Name:

ICHTHYS LNG PTY Ltd.

(2) Address:

22nd Floor, St George's Terrace 100, Perth, Western
Australia, Australia(2) Amount of borrowing(i) ¥30 billion(ii) ¥50 billion(3) Interest rate on borrowing(3) Name and title of representative: Mr. Tetsuhiro Murayama, Representative Directorc.

(i) The level of 1.15% (including the guarantee fees)(ii) The level of 1.50% (including the guarantee fees)

Background of the Lawsuit
Chiyoda formed a joint venture company, JKC AUSTRALIA LNG PTY Ltd. ("JV") with JGC andKBR and was awarded the design, procurement and construction for an onshore gas liquefaction
plant to produce liquefied natural gas and other products (the "Project") from ICHTHYS LNG PTY
Ltd (the "Plaintiff"), an equity-method affiliated company of INPEX Corporation, in 2012. All plantfacilities have been completed and delivered.

(4) Drawdown date
By March 31, 2024 for both (i) and (ii) above(5) Borrowing period

During Project execution, subcontractors requested additional payments to cover increased
costs. A funding deed (the "Deed") for the sum of A$ 757,727,884.46 was agreed and paid by
the Plaintiff to the JV for the additional costs. Subsequently, a dispute concerning the settlementof the additional costs arose, and an arbitration is being conducted in Singapore. During thecourse of the arbitration, the Plaintiff demanded that the JV return the full amount by the end of
December 2020, but the JV refused on the grounds that the correct settlement procedures under
the Deed had not been followed and the arbitration award to determine this had not been made.
Having considered this, the Plaintiff delivered a letter dated January 15, 2021, to the parent
companies of the JV, namely Chiyoda, JGC and KBR (the "Parent Companies"), requesting the
Parent Companies pay the identical amount to the Plaintiff based on the parent company
guarantee deeds. However, the Parent Companies declined the request for the reasons
identified above.
d.

Outline of the Lawsuit and Amount Claimed
The Plaintiff seeks subrogation against JGC, by way of performance of the parent company
guarantee deed, for the full amount of the funds (A$ 757,727,884.46) provided by the Plaintiff to
the JV under the Deed. Under the JV agreement, Chiyoda is responsible at a ratio of 30%.

e.

Future Outlook
Chiyoda will examine the details of the lawsuit in collaboration with JGC and KBR and takeappropriate action taking the JV's position into consideration.

44

Chiyoda Corporation Consolidated Financial Statements FY2020

Up to March 31, 2024 for both (i) and (ii) above(6) Collateral(i) Applicable(ii) Not applicable(7) Subordination
Not applicable for both (i) and (ii) above
25.

SEGMENT INFORMATION
Under Japanese accounting standards, an entity is required to report financial and descriptive
information about its reportable segments. Reportable segments are operating segments oraggregations of operating segments that meet specified criteria. Operating segments are components
of an entity about which separate financial information is available and for which such information isevaluated regularly by the chief operating decision-maker in deciding how to allocate resources andin assessing performance. Generally, segment information is required to be reported on the same
basis as is used internally for evaluating operating segment performance and deciding how toallocate resources to operating segments.
(1) Description of Reportable Segments
The Group's reportable segments are those for which separate financial information is available
and regular evaluation by the Company's management is performed in order to decide how
resources are allocated within the Group. The Group provides "Engineering" services globally,
including planning, engineering, construction, procurement, commissioning, and maintenance,
adapting the most appropriate functions of each related company.

45

Notes to Consolidated Financial Statements(2) Methods of Measurement for the Amounts of Sales, Profit (Loss), Assets, Liabilities, andOther Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in
Note 2, "Summary of Significant Accounting Policies."(b) Property, plant and equipment
Year Ended March 31, 2021
Millions of Yen

Thousands of
U.S. Dollars

Japan
Asia
Others¥ 9,955
1,364
105$ 89,690
12,293953

Year Ended March 31, 2021

Total

¥ 11,426$ 102,937

Since the reportable segment of the Group consists of only the "Engineering" segment, and othersegments have become immaterial, the Group has omitted reporting of segment information.

Year Ended March 31, 2020

The profit in reporting segments is based on the operating income. Intersegment income andtransfers are measured at the quoted market price.
(3) Information about Sales, Profit, Assets, Liabilities, and Other Items

Millions of Yen

Year Ended March 31, 2020
The reportable segment of the Group consists of only the "Engineering" segment. Since thetravel services of Arrowhead International Corporation were transferred to another company inthe year ended March 31, 2020, and other segments have become immaterial, the Group has
omitted reporting of segment information.
Related Information

Japan
Asia
Others¥ 10,160
1,974
319

Total

¥ 12,454(3) Information about Major Customers(1) Information about Products and Services

Year Ended March 31, 2021

The engineering business represents more than 90% of the total sales of the Group. Accordingly,
the presentation of the information about each service is not required under Japanese GAAP.
Name(2) Information about Geographical Areas

Gulf Coast Growth Ventures, LLC
BP Berau Ltd.

(a) Revenue
Year Ended March 31, 2021

Related Segment

Millions of Yen
Revenue

Thousands of
U.S. Dollars
Revenue

Engineering
Engineering¥ 55,076
34,058$ 496,180
306,828

Related Segment

Millions of Yen
Revenue

Engineering
Engineering¥ 79,612
57,378Year Ended March 31, 2020
Millions of Yen

Thousands of
U.S. Dollars

Japan
U.S.A.
Indonesia
Others¥ 146,084
120,001
38,296
11,010$ 1,316,079
1,081,098
345,009
99,197

Total¥ 315,393$ 2,841,384

Year Ended March 31, 2020
Millions of Yen
U.S.A.
Japan
Others¥ 192,057
133,080
60,787

Total¥ 385,925

Name
Cameron LNG LLC
Gulf Coast Growth Ventures, LLC(4) Information about Goodwill by Reportable Segment
The reportable segment of the Group consists of only the engineering segment, and the othersegment is immaterial. Accordingly, the Group has omitted reporting of segment information.
Regarding the goodwill, which is not included in the reportable segment, its amortization in theyear was ¥29 million ($270 thousand) and its unamortized balance was ¥254 million($2,297 thousand).

Note: Revenue is classified by country or region based on the location of construction sites.

46

Chiyoda Corporation Consolidated Financial Statements FY202047

Independent Auditor’s Report

Notes to Consolidated Financial Statements

26.

RELATED PARTY DISCLOSURES
The material transactions of the Group with the parent company and major shareholders for the years
ended March 31, 2021 and 2020, were as follows:Year Ended March 31, 2021

Guaranteed liabilities*1
Borrowings*2

Millions of Yen

Thousands of
U.S. Dollars¥ 10,000
10,000$ 90,090
90,090*1 The guaranteed liabilities are related to the borrowings from Mitsubishi Corporation Financial &Management Services (Japan) Ltd. Regarding these guaranteed liabilities, guarantee fees havebeen paid and buildings, structures, land, investment securities and other assets have beencollateralized. The transaction amount represents the balance of liabilities corresponding to thecollateral assets as of the end of the fiscal year.
*2 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the borrowings, applicable interest rates are rationally determined upontaking into account the market rate of interest.
Year Ended March 31, 2020
Millions of Yen

Thousands of
U.S. Dollars¥ 70,000
35,00030,000$ 642,201
321,100
275,229

Subscribe for shares*1
Loan of funds*2
Borrowings*3*1 Mitsubishi Corporation subscribed to a third-party allotment.

*2 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the loan of funds, applicable interest rates are rationally determined
upon taking into account the market rate of interest.
*3 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the borrowings, applicable interest rates are rationally determined upontaking into account the market rate of interest.
There are no material balances with these unconsolidated subsidiaries and associated companies asof March 31, 2021.
There are no material transactions of the Group with unconsolidated subsidiaries and associatedcompanies for the year ended March 31, 2021.
There are no material balances with unconsolidated subsidiaries and associated companies as ofMarch 31, 2021.

******

48

Chiyoda Corporation Consolidated Financial Statements FY2020

49

Independent Auditor’s Report50

Chiyoda Corporation Consolidated Financial Statements FY2020

51

Independent Auditor’s Report

52

Chiyoda Corporation Consolidated Financial Statements FY2020

Chiyoda Global Headquarters
Minatomirai Grand Central Tower, 4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japan
https://www.chiyodacorp.com/en/

Printed in Japan