ANNUALREPORT

FY2013For the year ended March 31, 2014

Courtesy of Mizushima LNG Co., Ltd.

Financial Highlights
Years Ended March 31, 2014, 2013, 2012, 2011 and 2010

2014

2013

2012

2011

2010

Revenues¥446,147¥398,918¥254,675¥247,082¥312,985

Cost of revenue

404,685

356,402

215,783

215,563298,766

Operating income

21,07925,11324,197

17,544

1,702

Income before income taxes
and minority interests

22,53826,74723,543

11,476

4,714

Net income

13,447

16,077

14,364

7,979

2,953

Total assets¥475,288¥435,379¥365,795¥353,392¥328,174

Total equity

198,031

189,356

168,737

155,758

149,253

156.3

166.3

165.5

173.8

175.2

For the Year (Millions of Yen)At Year-End (Millions of Yen)

Current ratio (%)

ProfilePer Common Share (Yen )Founded in 1948 in the post war period to reconstruct Japan, Chiyoda started its engineering

Earnings per share (EPS)¥51.91¥62.06¥55.44¥30.79¥11.39business for domestic projects mainly in the petroleum refining, gas processing and petrochemicalBook value per share (BPS)

758.31727.24648.95599.15

573.61

fields, and expanded into overseas projects in the 1960’s. Since then, Chiyoda has been and is

Dividend per share

16.0

19.0

17.0

11.0

3.5

Return on assets (ROA)

5.0

6.4

6.6

4.6

1.4

Return on equity (ROE)

7.0

9.0

8.9

5.3

2.0

growing steadily under the corporate philosophy of enhancing its business by aiming for harmony
between energy and the environment and contributing to the sustainable development of society.
Global situations are dramatically changing, especially those related to energy, including
increasing demand in developing countries caused by economic growth, “Shale Revolution” andRatios (%)

Note: Yen amounts are rounded down to the nearest million. U.S. dollar amounts and percentages are rounded to the nearest unit.

“Gas Shift,” as well as there being a call to develop renewable energies. We have to recognize that it
is time for us to meet these challenges.
Under these challenges, we set up last year a mid-term management plan (MT-Plan), “Seize themoment, Open up new frontiers,” and will pursue the growth strategies and operating foundation
strategies under the MT-Plan.

Revenues

Our engineering company will be a company that can shoulder the full task of building any
infrastructure that demands cutting-edge technologies. We will seize the moment and open up
new frontiers to create value through our “Asset Management.”(Billions of yen)

Operating Income

Billions
ofofofyen
Billionsyen
Billionsyen

Billions
Billions
ofofofyen
yenBillions
yen

800
800
800

3030
30

700
700
700

(Billions of yen)

3030
30

24.2
24.2
24.2

25.1
25.1
25.1
21.1
21.1
21.1

600
600
600

400
400
400
300
300
300

398.9
398.9
398.9
313.0
313.0
313.0

446.1
446.1
446.1

2020
20

2020
20

17.5
17.5
17.5

14.4
14.4
14.4

1515
15

254.7
254.7
247.1
247.1
247.1 254.7

1010
10

1010
10

5 55

Contents

0 00

01 Financial Highlights

08 Corporate Governance

02 At a Glance

10 Corporate Information

03 To Our Shareholders

12 Directors and Officers

04 Management’s Discussion and Analysis

13 Stock Information

06 Topics

2010
2010
2011
2010 2011
2011

2012
2012
2013
2012 2013
2013

2014
2014
2014

0 00

13.4
13.4
13.4

3.0
3.0
3.0

1.7
1.7
1.7
2010
2010
2011
2010 2011
2011

16.1
16.1
16.1

8.0
8.0
8.0

200
200
200
100
100
100

(Billions of yen)

Billions
Billions
ofofofyen
yenBillions
yen

2525
25

500
500
500

Net Income

2012
2012
2013
2012 2013
2013

2014
2014
2014

0 00

2010
2010
2011
2010 2011
2011

2012
2012
2013
2012 2013
2013

2014
2014
2014

Forward-Looking Statements: This annual report contains forward-looking statements about Chiyoda Corporation’s outlooks, plans, forecasts, results and other items that may take placein the future. Such statements are based on data available as of July 1, 2014. Unknown risks and other uncertainties that happen in the future may cause our actual results to be different
from the forward-looking statements contained in this report. The risks and uncertainties include business and economic conditions, competitive pressure, changes in laws and regulations, addition or elimination of products, and exchange rate fluctuation, among others.

CHIYODA CORPORATION ANNUAL REPORT FY2014

1

At a Glance

To Our Shareholders(Billions of yen)

Revenues

17

New Orders

6

8
46

3

21

5

8

19

7
74

11

446.1

589.9

Billion yen

Billion yen

LNG

203.0 (46%)

Gas Processing*1

47.5 (11%)

Fine Industries*2

94.3 (21%)

Petroleum and Petrochemicals

76.0 (17%)

Others25.3 (6%)*3Backlog of Contracts

4
2

70

*4

1,072.2
Billion yen

437.0 (74%)

755.6 (70%)

14.3 (2%)

21.6 (2%)

41.0 (7%)

42.6 (4%)

49.2 (8%)

203.4 (19%)

48.4 (8%)

49.1 (5%)*5President & CEO
Chiyoda Corporation*6*7

Major Projects in Progress(as of August 1, 2014)

Yamal LNG

Russia/LNG
Yamal
LNG
Russia/LNG

New Ulaanbaatar International Airport
Mongolia/Infrastructure

Arzew

New Ulaanbaatar International Airport
Mongolia/Infrastructure

Arzew
Algeria/LNG

Algeria/LNG
Laffan Refinery
Phase 2 Project
Plateau Maintenance Project

Laffan Refinery
Phase 2 Project
Qatar/LNG

Long Term Service Agreement

Plateau Maintenance
Project(RasGas/Qatargas/Shell)
Qatar/LNG, GTL
Qatar/LNG
Long Term Service Agreement(RasGas/Qatargas/Shell)
Qatar/LNG, GTL

Jangkrik FPU
Indonesia/Offshore

Jangkrik
FPULNG
Mozambique
Mozambique/LNG
Indonesia/Offshore
Mozambique LNG
Mozambique/LNG

LNG Canada
Canada/LNG

LNG Canada
Golden Pass LNG
Canada/LNG
USA/LNG
Nghi Son Refinery
GoldenCameron
LNG Pass LNG
USA/LNG
USA/LNG
Nghi
Freeport LNG Tr.
1&2
Long Son
TermRefinery
Service Agreement
Cameron
LNG
USA/LNG
Shell Asia/Downstream
USA/LNG
Freeport LNG Tr. 1 & 2Long
AbadiTerm
LNG Service Agreement
Puerto La Cruz
Indonesia/FLNG
USA/LNG
Shell
Asia/Downstream
Ichthys LNG

Abadi
LNG
Australia/LNG
Indonesia/FLNG

Arrow LNG
Australia/LNGIchthys LNG

Puerto La Cruz

Australia/LNG

Arrow LNG
Australia/LNG

EPC*/EPCm**/EPsCm***/EPCI****FEED*****/Feasibility Study*
EPC:
Engineering, Procurement and Construction** EPCm: Engineering, Procurement and Construction management*** EPsCm: Engineering, Procurement support and Construction management**** EPCI: Engineering, Procurement, Construction and Installation
EPC*/EPCm**/EPsCm***/EPCI********* FEED: Front-end Engineering and Design

FEED*****/Feasibility Study

Shogo Shibuya

Thank you for your continuing support over the past 12 months.
We would like to present Chiyoda Group’s corporate overview for the fiscal year ended March
31, 2014, which was the first fiscal year of our Medium-Term Management Plan entitled “Seize themoment, Open up new frontiers.”
Various measures have been implemented in accordance with the growth strategies and operation foundation strategies that are key to the Plan and which are aimed at achieving the vision for
the Chiyoda Group 10 years on. As a result, we have received orders for large LNG EPC (Engineering,
Procurement, and Construction) projects in the United States, and orders for studies and basic
design for LNG projects in Canada, Russia, and Africa. In doing so, we have created the groundworkfor receiving further EPC project orders in the future.
In the field of infrastructure, we received an order for the construction of an international airport
in Mongolia and orders for several mega-solar projects in Japan.
In terms of backlog projects, we completed an LNG plant in Papua New Guinea, a polycrystalline
silicon plant in Malaysia and an LNG receiving terminal project in Japan, and steady progress isbeing made on the construction of an LNG plant in Australia and an oil refinery in Vietnam. As aresult, revenues were up year on year.
The world is currently facing an increasing demand for energy due to economic growth inemerging countries, the Shale Revolution taking place mainly in North America, marine energy
development, and the increasing pressure to develop energy sources with less environmental
impact, such as renewable energy. Initiatives taken over this past fiscal year in response to theseneeds include efforts to capture further project demand in North America, entering a capitalalliance with a marine resource development consulting company in the United Kingdom, constructing and operating a concentrating solar power (CSP) generation demonstration plant in Italy,
and commercialization of a large-scale hydrogen storage and transport system.
In the upcoming fiscal year ending in March 2015, each and every executive and employee will
use his or her utmost effort to continue steadily progressing projects in our existing businesses
including LNG, oil, and industrial facilities while, at the same time, fostering the growth of new
businesses into large and successful ones.
We have decided to pay a dividend of ¥16 per share, in line with our earnings for fiscal year 2013.
We ask all of our shareholders for their continued support in our ongoing efforts.
June 2014*1: Classified as “Other Gas Related Works” in “Consolidated Financial Results” *2: Classified as “General Chemicals/Industrial Facilities” in “Consolidated Financial Results”*3: Courtesy of Qatargas Operating Company Limited *4: Courtesy of Shell *5: Courtesy of Solar Frontier K.K. *6: Courtesy of Kashima Aromatics Co., Ltd. *7: Water Treatment Plant

2

CHIYODA CORPORATION ANNUAL REPORT FY2014

CHIYODA CORPORATION ANNUAL REPORT FY2014

3

Management’s Discussion and Analysis
Results of Operations
AnalysisofResults

Results by
Business
Segment

During the fiscal year under review, despite there being a lull in the European debt crisis, we sawchanges in the world economy affected by the slowdown in the economy of emerging countries
such as China, the future policy trends of USA and geo-political concerns. However, in the energy
field, with which the Chiyoda Group has close links, preparations for investment in numerous gas
related facilities are being encouraged by the continuing increase in energy demand, the Shale
Revolution and the tide of Gas Shift. The Japanese economy has gradually recovered, largely due tothe measures taken by the government which are intended to pull Japan out of deflation.
Faced with these conditions, the Chiyoda Group entered the U.S. market as part of its drive to
become involved in the planned construction of numerous LNG projects throughout the world,
especially in the North America. While the Group continued to strengthen its core business in thefields of oil and gas, it is also accelerating its expansion into new business fields such as offshore andupstream, and new and renewable energy including Chiyoda’s own technologies for a Hydrogen
Supply Chain and solar power generation.
Execution of ongoing projects continued smoothly, including LNG plants in Papua New Guinea
and Australia, an overseas project for Japanese clients in Vietnam, refinery projects in Saudi Arabia,
Qatar and Venezuela, and LNG receiving terminals in Japan.
Consolidated new orders for the fiscal year amounted to 589,867 million yen (46.4% increase
year on year). The backlog and revenues were 1,072,218 million yen (19.1% increase) and 446,147
million yen (11.8% increase) respectively. The operating income amounted to 21,079 million yen(16.1% decrease year on year), ordinary income to 22,837 million yen (10.5% decrease), and net
income resulted in 13,447 million yen (16.4% decrease).

LNG Plants/Other Gas Related Works
The Group was awarded Engineering, Procurement and Construction (EPC) contracts for hugenatural gas liquefaction facilites in U.S. to be fed by shale gas. The EPC execution of an LNG plantin Papua New Guinea was completed and another LNG project in Australia is progressing asplanned. Moreover the Group has been executing Front End Engineering Design (FEED) works for
an LNG plant in Mozambique and a Floating LNG (FLNG) facility in Indonesia. Our Qatari subsidiaryis executing the Engineering, Procurement and Construction management (EPCm) works for the
maintenance and modification of existing LNG and gas processing plants built mainly by the Group.
In Japan, the Naoetsu LNG Receiving Terminal was completed, and several EPC works on LNG
receiving terminals and the expansion/modification works of existing plants are ongoing in parallel.
LNG plants and other gas-related works constitute our core business and, in this regard, we
will pursue any such project whether onshore/offshore, overseas/domestic or conventional/
unconventional.

Petroleum/Petrochemicals/Gas Chemicals
Several EPC works are ongoing globally for a refinery and petrochemical complex in Vietnam and arefinery project in Qatar. The group completed the EPC works for a heavy oil cracking unit in Saudi
Arabia and a petrochemical plant in Singapore. Additionally, our subsidiary in Singapore is performing the project management services under an Enterprise Framework Agreement for downstream
projects within Asia, while the Engineering, Procurement support and Construction management

4

CHIYODA CORPORATION ANNUAL REPORT FY2014(EPsCm) services for heavy crude oil upgrading facilities in Venezuela continue.
In Japan, we continued to perform the EPC work for a Trans-Alkylation Unit, the diagnosis ofexisting facilities, maintenance and upgrading works, studies and construction works aimed atenergy saving in the facilities, and studies to fortify the infrastructure of a refinery in case of thepossible catastrophe.

Mining/Mineral Refining/Offshore/General Chemicals/Environment/Other Fields
As part of the Mid-Term Business Plan to expand our business fields, we are targeting new orders
and are steadily executing backlog contracts, both overseas and domestically, for offshore andupstream projects, and non-hydrocarbon projects. The Group, in cooperation with our strategic
alliance partner Xodus Group, started providing integrated services in the offshore/upstream field
especially for domestic customers.
EPC works for polycrystalline silicon plants in Malaysia and a nickel refinery in the Philippines
were successfully completed. We have been reinforcing our efforts and developing our sales
activities to meet the needs of Japanese companies expanding their operations overseas.
We are operating a demonstration plant in Italy for a Concentrating Solar Power (CSP) system,
and accelerating our efforts to prove this technology in order to develop the business opportunities
for the CSP system, including EPC projects.
The Group is moving forward with the EPC execution of a new international airport in Mongolia
and is preparing bids for further airport and/or railway projects. While we are performing works ona demonstration project for an industrial wastewater treatment/water recycling system in Saudi
Arabia, we have started business development for the EPC works for medium-small sized water
treatment projects in an effort to expand our recycled water-related business into the Middle East,by establishing a framework in our group company to execute these works.
In Japan, we won a number of EPC works for large-scale photovoltaic power generation systems
and are executing and expanding our sales activities by enhancing our group operation in thisfield. We are also active in the pharmaceutical field, having completed the construction of pharmaceutical facilities for bulk vaccine and in vitro diagnostics, and are executing EPC works for fluid
infusion facilities, nanotechnology research development facilities in cooperation with industry,
government and academia, and newly awarded bio-medicine plant. On the other hand, to achievea hydrogen-based society, we are studying/discussing with the parties concerned (both overseas
and domestic) to establish a hydrogen supply chain through our own-developed technology totransport and deliver large volumes of hydrogen.

Outlook for the Next Fiscal Year
Chiyoda will continue to accelerate its sales activities and win contracts in areas where Chiyoda can best leverage
its technological advantages. We will also continue to work diligently on the execution of existing overseas anddomestic projects including the large project in Australia.
In consideration of these circumstances, and assuming an exchange rate of ¥100/dollar, our forecasts for the
fiscal year ending March 31, 2015 include 800.0 billion yen in new consolidated contracts and 465.0 billion yen inrevenues. Our forecast for the consolidated operating income is 19.0 billion yen, consolidated ordinary income is21.0 billion yen, and the consolidated net income is 13.5 billion yen.

CHIYODA CORPORATION ANNUAL REPORT FY2014

5

Topics
Continuing to lead in the LNG businessSaudi Arabia: Completion of construction of coker unit

As a leading contractor with a track record of constructing more than 40% (based on production capability) of LNG plants
worldwide, including a super-large LNG plant in Qatar, we are leveraging our technical expertise and knowledge forprojects in various stages of the LNG value chain, from gas production to end-use.
The global market for LNG plants is expanding into new regions such as
East Africa and North America, where shale gas has revitalized the business,
as well as forging ahead in the traditional production centers of the Middle
East, Southeast Asia, and Oceania. The industry is also seeing the development of new technologies, such as floating liquefied natural gas (FLNG)
facilities.
We are well positioned at the forefront of new developments in theUSA, a prime expanding market for LNG plants, where we have been
awarded an Engineering, Procurement, and Construction (EPC) contract by Signing the EPC contract with Cameron LNG of the US (from left
to right: Philip K. Asherman, President and CEO of CB&I; Octávio
Cameron LNG LLC. We will continue our activities in this field and plan toSimões, President of Sempra LNG; Nobuyuki Uchida, President ofopen up new markets and advance to new frontiers in LNG.
Chiyoda International Corporation)

In July 2009, Saudi Aramco Total Refining and Petrochemical
Company (SATORP) of Saudi Arabia contracted Chiyoda for the construction of Saudi Arabia’s first heavy oil cracking facilities (103,000
barrels/day) as part of the Jubail Export Refinery project. The project
was completed in October 2013 and 29 million man hours were
expended without lost time incident.
A coker unit is a heavy oil cracking facility that converts residual
oil from a vacuum distillation column into naphtha, light and heavy
gas oils, liquefied petroleum gas (LPG), petroleum coke, and other
View of the completed Coker Unit
refined products.
As crude oil prices rise, oil companies will be looking to make use of heavy oil, which is difficult to process. Chiyoda isready to provide the oil companies with its know-how and technological expertise in this area.

Japan: Construction work finished on the Naoetsu LNG Terminal
Indonesia: First order for an FPU
In February 2014, Eni Muara Bakau awarded Group company PT Chiyoda International Indonesia, in collaboration withthree local companies, a contract for Engineering, Procurement, Construction, Installation (EPCI) and test run assistancefor a Floating Production Unit (FPU).
The FPU will be used in developing the Jangkrik and Jangkrik North East deep-sea gas field in Kalimantan. Gas
extracted from the seabed will be processed offshore on the FPU
before being delivered to Bontang LNG Plants, which were constructed by Chiyoda.
We are accelerating our involvement in the floating businessworldwide. Our medium-term business plan targets the offshore andupstream sphere of the industry as part of our growth strategy andthis project is our first EPCI contract in this field.
Computer-graphics for FPU

Qatar/Middle East: Expanding global operations
Chiyoda Almana Engineering LLC, our Group company in Qatar, is developing a Project Lifecycle
Engineering (PLE) business that has close links with the local communities and, to date, we havebeen awarded nine long-term service contracts by eight local companies.
In 2013, we won an EPC contract with RasGas Company Limited for the onshore facilities
of a natural gas flow assurance project (to prevent hydrate formation). This is just one example
where our Group’s global operations are taking a lead role in expanding our business.
6

CHIYODA CORPORATION ANNUAL REPORT FY2014

INPEX CORPORATION celebrated completion of constructionof its first LNG receiving facility, the Naoetsu LNG Terminal, on 9
December 2013.
INPEX is a supplier of imported LNG to Japan, particularly LNG
from the Ichthys Project currently under construction in Australia.
INPEX developed the terminal as a base from which the imported
View of the completed Naoetsu LNG Terminal
Source: Courtesy of INPEXLNG will be delivered via natural gas pipelines to industrial plants
and urban gas suppliers throughout Japan. Chiyoda is supporting stable natural gas supplies for Japan through its
involvement both in natural gas liquefaction/export and LNG receiving terminals.

Mozambique: Concludes MOU on engineer training
Chiyoda has used its extensive experience to provide learning opportunities
to engineers from various countries in design and engineering techniquesfor LNG and other hydrocarbon processing plants.
The latest opportunity for these young engineers came in January 2014,
when Chiyoda concluded a Memorandum of Understanding (MOU) on
training Mozambique engineers during Prime Minister Shinzo Abe’s visit to
the country.
Chiyoda will deliver comprehensive training for the engineers to acquire
technical knowledge and practical engineering skills, which will provide
support for Mozambique’s sustainable development.

Joaquim Caronga, CFO of ENH, and Takashi Kubota, Executive
Chairman of Chiyoda, signing the MOU, witnessed by JapanesePrime Minister Shinzo Abe and Mozambique President Armando
Emilio Guebuza

CHIYODA CORPORATION ANNUAL REPORT FY2014

7

Corporate Governance
The Chiyoda Group believes that CSR-oriented management that earns the support and trust of all its stakeholders,
including shareholders, customers, and employees, is the basis of its corporate activities. We are therefore working in various ways to enhance corporate governance and actively implement CSR-oriented management, including maintaining
transparency and soundness.

Corporate Governance and Internal Controls
General Shareholders’ Meeting
Election

Submit/ReportElection

Submit/Report

Directors
Board of Directors
Election

Supervision

Report
Audit
Audit Referral

Election

ReportCorporate Auditors
Audit & Supervisory Board
Survey, Report Request

Corporate Governance System
Chiyoda has established the Compliance & CSR Unit and the Operational Auditing Unit to raise the quality and transparency of management, improve response to stakeholders and reinforce risk management and the compliance system.
We also established the Safety, Quality and Environmental (SQE) Unit and an internal control system directly linked to
management.
To ensure speedy and accurate decision-making to deal with rapidly changing social and economic conditions,
Chiyoda has adopted the executive officer system, which separates the functions of directors, who are responsible formanagement supervision, from those of executive officers, who are responsible for the execution of business operations.

The Board of Directors and Meetings of the Board of Directors
The Board of Directors is composed of 9 directors. Important matters concerning the Company are reported and resolved
at meetings of the Board of Directors. The Executive Committee, made up of the four representative directors, examines
matters before they are submitted for resolution at meetings of the Board of Directors. It makes decisions about businessexecution matters by unanimous resolution.

The Company employs one external director and three outside audit & supervisory board members. The names of external
director and outside audit & supervisory board members, and the Company’s rationale for selecting them (including therationale for designation as independent directors of Mikio Kobayashi and Yukihiro Imadegawa, both of whom are on filewith the Tokyo Stock Exchange as independent directors) are as follows:
Name

Rationale for Election as External Director and Outside Audit & Supervisory Board Member

Masaji Santo

The individual is able to suitably perform his duties as an external director by putting to use his experience as the former Presidentof Mitsubishi Chile Ltda. and as a Senior Vice President of Mitsubishi Corporation.

Munehiko Nakano

The individual is able to contribute to the sound management of the Company through neutral and objective audits based on his
experience as a former corporate auditor with Lawson, Inc. and a finance and accounting executive with Mitsubishi Corporation.

Mikio Kobayashi

Based on his experience as Representative Director and President of Ryoshin Credit Service Co., Ltd. and Representative Director
and Deputy President of Japan Property Solutions Co., Ltd., he contributes to ensuring the soundness of the Company’s business
management by conducting audits from a neutral and objective perspective.
<Rationale for Designation as an Independent Director>
The individual is not involved in any matters that conflict with the interests of general Company shareholders, and is recognized as
an outside audit & supervisory board member having no conflict of with general Company shareholders.

Yukihiro Imadegawa

The individual is able to contribute to the sound management of the Company through neutral and objective audits based on his
expertise in corporate law as an attorney.
<Rationale for Designation as an Independent Director>
The individual is not involved in any matters that conflict with the interests of general Company shareholders, and is recognized as
an outside audit & supervisory board member having no conflict of interest with general Company shareholder.

There are no particular relationships of interest between Company and the external director and outside audit &supervisory board members.

Where necessary, executive officers cooperate with outside specialists such as corporate lawyers in carrying out duties
assigned to them at meetings of the Board of Directors and the Executive Committee. Executive officers provide regularprogress reports at executive officer and Executive Committee meetings attended by directors and corporate auditors.

Rationale for Adoption of Current System

The Chiyoda Group constantly conducts self-assessments of existing internal control functions and reinforces internal
control systems. In addition, the Group has established the Operational Auditing Unit as an autonomous unit to perform
evaluations. Chiyoda has a system in place for auditing the development and operation of a suitable overall internal control
framework and constituent components, and for submitting reports to the Executive Committee.
•	To ensure the transparency of information and raise the effectiveness of audits, Chiyoda aims to establish an integrated
framework of internal controls and a real-time monitoring system for senior management.
•	To prevent insider trading, an information management system is in place that encompasses Group companies. All
important information is appropriately reported to the Board of Directors and the Executive Committee.

CHIYODA CORPORATION ANNUAL REPORT FY2014

Financial
Audit

External Director and Outside Audit & Supervisory Board Members

Executive Officer System

Reinforcing Internal Controls

8

Accounting
AuditorExternal Director and Outside Corporate Auditors (as of June 25, 2014)

Audit & Supervisory Board
Chiyoda has also adopted the corporate auditor system. The Audit & Supervisory Board is made up of three outside
corporate auditors who closely monitor the execution of duties by directors and executive officers. The corporate auditors
attend meetings of the Executive Committee and express their opinion when necessary. In addition, their responsibilities
include deciding the content of resolutions submitted to the General Meeting of Shareholders, such as the appointment
or dismissal of accounting auditors, auditing consolidated financial documents in close cooperation with the accounting
auditors, and preparing audit reports.

Report(departments with internal
control functions)(advice) Submit/Report
4 Representative Directors
Compliance Committee Internal Controls Management Committee(ICMC)
Submit/Executive Committee
Risk Management & CSR Division
ReportReportScheduled Reports
Submit/Report
Operational Auditing Unit
Organization Staffing(deliverables, etc.)
Department Internal Controls
SQE Unit
Global Operation Unit
Business Execution Departments
Group
Corporate
Planning
Unit(Risk Manager)
Compliance & CSR Unit
Corporate Services Unit, HRM* Unit
Companies
Self-Assessment
Finance & Project Audit Unit
Crisis Management Unit
*HRM: Human Resource Management
Executive Officers
Executive Officer Meeting

Election

Based on its establishment of a corporate auditor system, the Chiyoda Group efficiently executes business operations
under an executive officer system. The Board of Directors has adopted an existing system of corporate governance that is
capable of sufficiently performing management supervisory functions from an objective and neutral standpoint with theparticipation of one external director and three outside audit & supervisory board members.

Director Compensation

Total Compensation for Each Director Category;
Total Compensation by Director Type, and Number of Directors in Question
NumberBase
Compensation

Incentive
Compensation

Stock-Based
Compensation

Directors

10¥192 million¥69 million¥47 million

Audit & Supervisory
Board Members

3¥ 55 million——

Notes:
1. Total director compensation is ¥308 million. Total audit &supervisory board member compensation is ¥55 million. Total
outside audit & supervisory board member (three individuals)
compensation is ¥55 million.
2. The number of directors above discloses the number of directors
and audit & supervisory board members receiving compensation
during the fiscal period, including two directors who retired as of
the General Shareholders’ Meeting held on June 25, 2013.

CHIYODA CORPORATION ANNUAL REPORT FY2014

9

Corporate Information (As of March 31, 2014)
Corporate Data

Global Network

Chiyoda Global Headquarters

Number of Employees

Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku, Yokohama 220-8765, Japan
Tel: (81)45-225-7777 (voice guidance)

1,630 (Non-Consolidated)
6,062 (Consolidated)

Annual Fiscal Close

EstablishedMarch 31January 20, 1948

Chiyoda’s global network enables Project Lifecycle Engineering to be offered all over the world. Chiyoda has expanded
its network in order to provide prompt support for customers’ business activities on a global scale. Our services cover
the entire life cycles of projects – from planning, engineering, procurement and construction through to operation andmaintenance. With a view to meeting the ever-changing needs of our customers, we offer services by utilizing local
offices and group companies with thorough knowledge of the latest local and global circumstances in countries aroundthe world.

Shareholders’ Meeting

Paid-in Capital

June

Chiyoda’s Global Network¥ 43,396 million

Organization Chart(As of May 1, 2014)

Board of Directors

Sales BaseEngineering Center

Xodus Group (Holdings) Ltd

Procurement Center

Project Execution Base

Milan Representative Office

Operation Support

Chiyoda Corporation Netherlands B.V.

Audit & Supervisory Board

Chiyoda & Public Works Co., Ltd.

Executive Committee

Beijing Office

President

Korea Representative Office

Executive Office Unit
Risk Management & CSR Division
SQE Unit
Compliance & CSR Unit
Operational Auditing Unit
Crisis Management Unit

Corporate Planning Management & Finance DivisionCorporate Planning Unit
IR & Public Relations Sec.
Corporate Services Unit
HRM* Unit
Finance & Project Audit Unit
Legal Sec.
Investment Promotion Team

Business Development Division
Strategic Business Planning &Administration Unit
Corporate Relations Sec.
Business Development Unit 1
Business Development Unit 2
Business Development Unit 3
Energy Infrastructure Planning Unit

Global Project Management Division
Project Administration Unit
Project Management Unit
IT Management Unit
Global Operation Unit
Global Human Resource Planning Unit
BPM* TeamWork Process Innovation Task Team
Chiyoda Globalization Task Force Team
Change the Mindset
HRM: Human Resource Management

10

Technology & Engineering Division
Engineering Operation Unit
Gas & LNG Process Engineering Unit
Refinery, Petrochemical & New Energy
Process Engineering Unit
Integrity Management Unit
Mechanical Engineering Unit
Control System Engineering Unit
Electrical System & Smart Grid
Engineering Unit
Piping Engineering Unit
Civil Engineering Unit
Project Logistics & Construction Division
PLC* Planning & Administration Unit
Procurement Unit
Construction Unit
Commissioning Unit

Downstream & Non Hydrocarbon Project Operations
Oil & Petrochemical Project Unit
Gas Energy Project Unit
International Downstream &Non-Hydrocarbon Project Unit
Project Team

Infrastructure Project OperationsUKThe Netherlands
Italy

Saudi Arabia

Korea
Qatar

China
India

UAE

IP* Planning & Administration Unit
Strategic Business & Investment
Management Unit
Hydrogen Supply Chain
Development Unit
Green Infrastructure Project Unit
Green Materials Project Unit
Pharmaceutical & Environmental
Project Unit
Technology Development Unit
Research & Development Center

Offshore & Upstream
Business Planning Unit
Offshore & Upstream
Business Operation Unit
Gas & LNG Project Operations No. 1
Gas & LNG Project Unit No. 1
Strategic Project Development Unit
Project TeamJapan
<Chiyoda Global Headquarters>

MyanmarPhilippines
Thailand
Malaysia
Singapore

USA

Chiyoda Philippines Corporation

Indonesia
BrazilAustralia

Offshore & Upstream Project Operations

Chiyoda Oceania Pty Limited

PT. Chiyoda International Indonesia

ChAS Project Operations
ChAS Business Planning &Administration Unit
ChAS Marketing Unit
Advanced Process Engineering Unit
Plant Diagnosis Unit
Project Lifecycle Engineering Unit
Program Management
Consulting Unit
Space Solution Unit

Singapore Human Resources International (Pte) Limited
Chiyoda Singapore (Pte) Limited
Chiyoda Malaysia Sdn. Bhd.
Chiyoda Sarawak Sdn. Bhd.
Chiyoda (Thailand) Limited

Chiyoda do Brasil Representações Ltda.

L&T-Chiyoda Limited
Bangalore Office
Abu Dhabi OfficeGas & LNG Project Operations No. 2
Gas & LNG Project Unit No. 2
Project TeamBPM: Business Process Management

CHIYODA CORPORATION ANNUAL REPORT FY2014

Chiyoda International Corporation

Chiyoda Corporation (Shanghai)

PLC: Project Logistics & Construction

Chiyoda-CCC Engineering (Pte) Limited

Global Project Management-Asia (GPM-A) Operations
GPM-A Project Unit
IP: Infrastructure Project

Middle East Headquarters Doha Office
Chiyoda Almana Engineering LLC
Chiyoda Petrostar Ltd.

CHIYODA CORPORATION ANNUAL REPORT FY201411

Directors and Officers (As of June 25, 2014)

Stock Information (As of March 31, 2014)

Board of Directors
Representative Directors

Directors

Executive Chairman

Takashi Kubota

Executive Vice President

Katsuo Nagasaka

President & CEO

Shogo Shibuya

Senior Vice President

Ryosuke Shimizu

Senior Executive Vice
President

Keiichi Nakagaki

Senior Vice President

Masahiko Kojima

Senior Executive Vice
President

Hiroshi Ogawa

Director

Masaji Santo*1

Executive Vice
President & CFO

Masahito Kawashima

Munehiko Nakano*

Mikio Kobayashi* *2/ 3

Stock Code

14,375

Capital Stock Issued

Number of Share per Unit

ISIN:
SEDOL1:TSE:

260,324,529

1,000

Yukihiro Imadegawa*Number of
Shares Owned(Thousands of Shares)

Ratio
Shares Owned(%)

Mitsubishi Corporation

86,931

33.39

The Master Trust Bank of Japan, Ltd. (Trust Account)

16,056

6.16

Japan Trustee Services Bank, Ltd. (Trust Account)

14,863

5.70

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

9,033

3.47

The Mitsubishi UFJ Trust and Banking Corporation

6,960

2.67

BNP Paribas Securities (Japan) Limited

3,522

1.35

Trust & Custody Services Bank, Ltd.

2,814

1.08

State Street Bank and Trust Company 505225

2,592

0.99

Meiji Yasuda Life Insurance Company

2,265

0.87

The Bank of New York Mellon SA/NV10

2,138

0.82

Breakdown by shareholder

10.91

Executive Vice President

Satoru Yokoi

Vice President

Eisuke Oki

Executive Vice President

Tadashi Izawa

Vice President

Masao Ishikawa

Total Number of
Shares Issued:

260,325
thousand

Executive Vice President

Takao Kamiji

Vice President

Yasumitsu Abe

Senior Vice President

Katsutoshi Kimura

Vice President

Toshiyuki Kariya

Senior Vice President

Mamoru Nakano

Vice President

Seiichiro Ikeda

Senior Vice President

Akira Fujisawa

Vice President

Arata Sahara*2

Senior Vice President

Nobuyuki Uchida

Vice President

Terunobu Iio*

Senior Vice President

Hiromi Koshizuka

Vice President

Yasuo Hosono

Vice President

Shuichi Wada*2

Vice President

Hideaki Tomiku*2

Vice President

Noriyuki Kasuya

Vice President

Mitsuya Ogawa*1: External*2: New Assignments*3: Outside Corporate Auditor

12

JP3528600004
6191704 JP
6366

Transfer Agent of Common Stock

Major Shareholders (as of March 31,2014)

3

Executive Officers

Number of Shareholders

570,000,000

Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi, Chiyoda-ku, Tokyo

Audit & Supervisory Board Members
3

Authorized Shares

CHIYODA CORPORATION ANNUAL REPORT FY2014

Financial Institutions
Securities Companies
Other Corporations
Foreign Investors and Others
Individuals and Others

27.59

20.10
37.34

4.06

Monthly Stock Price Range on the Tokyo Stock Exchange
(Yen)
2,100

Share Price (left)

Volume (right)(Yen)
21,000

Nikkei Stock Average (right)

1,400

14,000

700

7,000

2

(Thousandsof shares)
100,000

0

50,0004 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3
2009
2010
2011
2012
2013
2014

0

CHIYODA CORPORATION ANNUAL REPORT FY201413

Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japan
Tel: (81)45-225-7777 (voice guidance)
http://www.chiyoda-corp.com/en/

CORPORATE PHILOSOPHY
Enhance our business in aiming for harmony
between energy and the environment,
and contribute to the sustainable development ofa society as an integrated engineering company
through the use of our collective wisdom andpainstakingly developed technology.
(As of August 2014)

Selected in FTSE Group’s responsible
investment index

Consolidated
Financial
S t ate m e nt s
Fo r t h e Ye a r E n d e d M a rc h 31, 2 014 ,a n d I n d e p e n d e n t A u d i t o r ’s R e p o r tConsolidated Balance Sheet

ChiyodaCorporation
Chiyoda andCorporation
Consolidated
and Consolidated
Subsidiaries Subsidiaries(March31, 2014)
Consolidated Balance
Consolidated
Sheet Balance Sheet
March 31, 2014 March 31, 2014ASSETSASSETS

CURRENT ASSETS:
CURRENT ASSETS:
Cash and cash equivalents(Noteequivalents
13)
Cash and cash
(Note 13)
Held-to-maturityHeld-to-maturity
securities—current(Notes 5 and 13) (Notes 5 and 13)
securities—current
Short-term investments
(Note
13)
Short-term
investments(Note 13)
Notes and accounts
receivable—trade(Note 13)
Notes
and accounts receivable—trade(Note 13)
Allowance for doubtful
accounts
Allowancefor doubtful accounts
Costs and estimatedearnings
on long-term
construction
Costsand estimatedearnings
on long-term construction
contracts (Notes contracts
4 and 13) (Notes 4 and 13)
Costs of constructionin process
Costscontractsof construction
contracts in process
Accounts receivable—otherAccounts receivable—other
Jointly controlledJointly
assets controlledof joint venture13)venture (Note 13)
assets(Noteof joint
Deferred tax assets(Note 10)Deferredtax assets (Note 10)Prepaid expensesPrepaid
and other
expenses and otherTotal current assets
Total current assets
PROPERTY, PLANT
AND EQUIPMENT:PROPERTY,
PLANT AND EQUIPMENT:
Land
Land
Buildings and structures
Buildings and structures
Machinery and equipment
Machinery and equipment
Tools, furniture, andfixtures
Tools,
furniture, and fixtures
Construction in progress
Construction in progress
Total
Total
Accumulated depreciation
Accumulated depreciation
Net property, plant
equipment
Netandproperty,plant and equipment
INVESTMENTSINVESTMENTS
AND OTHER ASSETS:
AND OTHER ASSETS:
Investment securities(Notes securities
5 and 13)(Notes 5 and 13)
Investment
Investments in andadvances toInvestments
in unconsolidated
and advances to unconsolidated
subsidiaries and associated(Notecompanies
6)
subsidiariescompanies
and associated(Note 6)
Goodwill
Goodwill
Software
SoftwareAsset for retirement
benefits
Asset
for retirement benefits
Other assets (Note10) assets (Note 10)
Other
Allowance for doubtful
accounts
Allowancefor doubtful accounts
Total investmentsTotaland otherassets and other assets
investments

Thousands of
U.S. Dollars
Millions of Yen Millions of
Yen 1)
(Note
2014
2013
2014
2014
2013
¥ 145,303
64
56,502(3 )¥ ¥180,229
145,303 $ ¥1,410,712
180,229
2,400
2,400
22664
622
226
37,917548,564
56,502
37,917(3)(3 )
(31)
(3)

16,50333,826
4,936
127,466
18,8685,629

27,477
16,503
15,29533,826
8,476
4,936
94,696
127,466
13,162
18,8683,329
5,629

160,227
27,477
328,412
15,29547,927
8,476
1,237,539
94,696
183,185
13,16254,6503,329

409,096383,206
409,096

3,971,810
383,206

5,265
12,557
944
7,106
286
26,159(11,201 )

5,375
5,265
11,711
12,557
1,124
944
5,450
7,106
494
286
24,15626,159(9,609)(11,201 )51,122
5,375
121,916
11,711
9,166
1,124
68,990
5,450
2,783
494
253,979
24,156(108,753)(9,609)14,958

14,547
14,958145,226
14,547

21,131

23,74021,131

205,163
23,7408,155
12,395
7,056
34
2,528
(68 )

5,164
8,155
675
12,395
5,987
7,056
34
2,138
2,528
(80)
(68 )

79,177
5,164
120,343
675
68,512
5,987
333
24,552
2,138
(669)
(80)

51,23337,624
51,233

497,41437,624CURRENT LIABILITIES:CURRENT LIABILITIES:
bank loans$ 1,410,712 Short-term bank Short-term
loans
Current
portionlong-term
Current portion of
long-term
debtof(Notes
7, 12debt
and (Notes
13) 7, 12 and 13)
Notes
and accounts(Notepayable—trade(Note 13)622 Notes and accounts
payable—trade13)
receiptscontracts
on construction contracts
548,564 Advance receiptsAdvanceon construction
Incometaxes
payable (Note 13)(31) Income taxes payable
(Note
13)
Deposits receivedDeposits received
Allowance
forforwarranty
costs
for completed works
160,227 Allowance for warranty
costs
completedworks
Allowance
for lossescontracts
on construction contracts
328,412 Allowance for losses
on construction
retirement obligations
47,927 Asset retirement Assetobligations
Accruedexpenses and other
1,237,539 Accrued expenses
and other
183,185
54,650Total current liabilities
Total current liabilities

TOTAL¥ 475,288¥ ¥435,379
475,288 $ ¥4,614,451
435,379¥

19,730261,679

261,679
230,431

230,4312,540,573

2,540,573

10,040
10,135
2,080
2,310
365
364
970
957
2,121
1,822

10,13597,477
2,310
20,202
364
3,543
957
9,424
1,822
20,59897,477
20,202
3,543
9,424
20,59815,57815,591

15,591
151,246

151,246

145,226EQUITY (Notes EQUITY
9 and 18):(Notes 9 and 18):
Common stock—authorized,
Common stock—authorized,
570,000 thousand570,000
shares; thousand shares;
issued, 260,324
thousandsharesissued, 260,324 thousand
shares in2014 and
2013in 2014 and 2013
205,163 Capital surplus Capital surplus
Retained earningsRetained earnings
Treasurystock—atcost,shares
1,310 inthousandshares in 2014 andcost, 1,310
thousand2014 and
79,177 Treasury stock—at
1,279 inthousand
1,279 thousand shares2013 shares in 2013
120,343
Accumulated
otherincome
comprehensive
comprehensive(loss): income (loss):
68,512 Accumulated other
Unrealized
gain on available-for-salesecurities
Unrealized gain on
available-for-salesecurities
333
gain
on derivatives
under hedge accounting
Deferred gain onDeferredderivatives
underhedge accounting
24,552currencytranslation adjustments
Foreign currencyForeigntranslation
adjustments(669)
Definedbenefit plans
Defined retirement
benefitretirement
plans
Total
Total
497,414
Minority interestsMinority interests

43,396
37,112
109,525

43,39643,396
37,112
37,112
109,525
100,988

43,396421,324
37,112
360,316
100,988
1,063,358

421,324360,316
1,063,358(1,390)(1,390)(1,349)(1,349)(13,498)(13,498)

4,920
648
2,486
(287)
196,411
1,619

4,920
6,584
648
2,890
2,486
(1,235)(287)
196,411
188,386
1,619
969

6,584
47,7682,890
6,291(1,235)
24,137(2,787)
188,386
1,906,910
969
15,72147,768
6,291
24,137(2,787)
1,906,910
15,721$ 4,614,451TOTAL

TOTAL

Total equity

198,031

198,031
189,356

189,356
1,922,632

1,922,632

475,288 $ ¥4,614,451
435,379¥ ¥435,379$ 4,614,451¥ 475,288¥¥

Thousands of
U.S. Dollars(Note 1)2014

1,283 $
12,464919182 ¥
800
145,392
117,769
117,769
1,411,574
80,182
79,21079,210778,473
5,513
8,500
8,500
53,527
4,985
6,822
6,822
48,398
507
480
480
4,924
4,002
1,291
1,291
38,8565
5
19,730
16,25916,259191,553

1,283
82
145,392
80,182
5,513
4,985
507
4,002

3,971,810LONG-TERM LIABILITIES:LONG-TERM LIABILITIES:Long-termLong-term debt (Notes
7, 12debt
and (Notes
13) 7, 12 and 13)
10,040Liability
for retirement
Liability for retirement
benefits(Note 8)benefits (Note 8)
2,080
Provisionfor treatment
51,122 Provision for treatmentof PCB
waste of PCB waste
365
retirement obligations
121,916 Asset retirement Assetobligations
970
9,166 Other (Note 10) Other (Note 10)
2,121
68,9902,783
Total long-term liabilities
Total long-term liabilities
15,578
253,979(108,753)COMMITMENTSCOMMITMENTS
ANDLIABILITIESCONTINGENT
LIABILITIES(NotesAND CONTINGENT(Notes7, 12, 14 and15) 7, 12, 14 and 15)

Total equity
TOTAL

Thousands of
U.S. Dollars
Millions of Yen Millions of
Yen 1)
(Note
2014
2013
2014
2014
2013

Thousands of
U.S. Dollars(Note 1)2014 LIABILITIES AND
EQUITY AND EQUITY
LIABILITIES$

12,464800
1,411,574
778,473
53,527
48,3984,924
38,856
191,553

See notes to consolidated
statements.
See notesfinancial
to consolidated
financial statements.

-2-

1

Consolidated Financial Statements-2-

Consolidated Financial Statements2Consolidated
Statement of Income
Chiyoda Corporation and Consolidated Subsidiaries

Consolidated
Statement of Comprehensive Income
Chiyoda Corporation and Consolidated Subsidiaries(Year Ended March 31, 2014)
Consolidated Statement of Income
Year Ended March 31, 2014

(Year Ended March 31, 2014)
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2014

Millions of Yen
2014
2013
REVENUE

Thousands of
U.S. Dollars(Note 1)2014

¥ 446,147¥ 398,918$ 4,331,530

404,685

356,4023,928,981

41,46242,515402,548

20,383

17,402

197,897

21,07925,113

204,651

2,590
(233)
(374)
(145)

2,321
(206 )
145(1,681 )
1,704(244 )(230 )

25,151(2,271)(3,636)(1,408)COST OF REVENUE
Gross profit
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES(Note 11)
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Equity in (losses) earnings of associated companies
Foreign exchange loss
Gain on sales of fixed assets
Loss on disposal of fixed assets
Loss on valuation of investment securities
Retirement benefit expenses (Note 8)
Other—net

(299)
(78)

(173 )(2,906)
(762)

1,459

1,634

14,165

INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTS

22,53826,747

218,816

INCOME TAXES (Note 10):
Current
Deferred

13,101(3,773)

11,669(1,313 )127,196(36,639)

9,327

10,35690,556

13,21016,391

128,260

(236)

314

(2,294)

Other income—net

Total income taxes
NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME¥

13,447¥

16,077$

Millions of Yen
2014
2013
NET INCOME BEFORE MINORITY INTERESTS

Thousands of
U.S. Dollars(Note 1)
2014

¥ 13,210¥ 16,391$ 128,260(1,664)(2,242)
3,625

5,075
2,448
1,081

(16,156)(21,768)
35,194

104

85

1,016

(176)

8,690

(1,713)COMPREHENSIVE INCOME¥ 13,034¥ 25,082$ 126,546

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Minority interests¥ 13,087(53)¥ 24,723
358$ 127,061(514)

OTHER COMPREHENSIVE INCOME (LOSS) (Note 16):
Unrealized (loss) gain on available-for-sale securities
Deferred (loss) gain on derivatives under hedge accounting
Foreign currency translation adjustments
Share of other comprehensive income of associates
accounted for using the equity method
Total other comprehensive (loss) income

See notes to consolidated financial statements.

130,555

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statement of Income
Year Ended March 31, 2014
2014
PER SHARE OF COMMON STOCK (Notes 2.y and 17):
-3Basic net income
Cash dividends applicable to the year

¥ 51.91
16.00

Yen

2013

U.S. Dollars
2014¥ 62.06
19.00(Continued)$ 0.500.16-5-

See notes to consolidated financial statements.

3

Consolidated Financial Statements

Consolidated Financial Statements

4Consolidated Statement of Changes in Equity(Year Chiyoda
Ended March
31, 2014)
Corporation
and Consolidated
ChiyodaSubsidiaries
Corporation and Consolidated Subsidiaries
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Year Ended March 31, 2014
Year Ended March 31, 2014

BALANCE, APRIL 1, 2012
Net income
Cash dividends, ¥17.00 per share
Change of scope of consolidation
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2013
Net income
Cash dividends, ¥19.00 per share
Change of scope of consolidation
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2014

Thousands

Thousands

Outstanding
Number of
Shares ofCommonStockCommonStock

Outstanding
Number of
Shares of
CapitalCommonSurplus
Stock

Retained
CommonEarnings
Stock

Treasury
CapitalStock
SurplusMillions of Yen
Accumulated Other Comprehensive Income (Loss)
Unrealized
Unrealized
DeferredDeferredGain onGain onForeign
ForeignGain on DefinedGain on
DefinedAvailable-Retirement
AvailableDerivatives
Derivatives
Currency
Currency
Retirement
Retained under Hedge
Treasury Translation
for-Sale Benefit
for-Sale
under Hedge
Translation Minority
Benefit
Earnings AccountingStock Adjustments
Securities PlansAccounting Total
Securities
Adjustments InterestsPlans

BALANCE,259,065
APRIL 1, 2012 ¥ 43,396¥ 37,112
259,065¥¥ (1,328)¥ 37,112¥ 1,509¥ 89,346

Net income
Cash dividends, ¥17.00 per share
Change of scope of consolidation(19 ) stock
Purchase of treasury
Net change in the year

(19 )BALANCE,259,045
MARCH 31, 2013 43,396

37,112
259,045

Net income
Cash dividends, ¥19.00 per share
Change of scope of consolidation
Purchase of treasury(31 ) stock
Net change in the year

(31 )BALANCE,259,014
MARCH 31, 2014
¥ 43,396¥ 37,112
259,014

Millions of Yen

89,346¥ 43,396
16,077(4,404)(31)

100,988
43,396
13,447(4,921)
12¥ 109,525¥ 43,396(21)(1,349)37,112(40)¥ (1,390)¥ 37,112¥442¥ (1,328) ¥ (2,358¥) 1,509

16,077(4,404)
(31)

(21)

5,075

2,448

6,584100,988

2,890 (1,349)

13,447(4,921)12(1,664)(2,242)¥ 4,920¥ 109,525

¥

(40)

¥

442 ¥ 168,120¥ (2,358 )

¥

Total
EquityTotal

617¥ 168,737¥ 168,120¥ 168,737

351

16,077
16,077(4,404)(4,404)(31) (31)(21) (21)8,9988,646

351

16,077(4,404)
(31)
(21)
8,998

969

189,356
188,386969

189,356

650

13,447(4,921)
12
(40)
178

¥ 1,619¥ 198,031

Total
EquityTotal

Minority
Interests

Total
Equity$ 1,838,409$ 1,828,999$ 9,409$ 1,838,409

6,311

130,555(47,785)
119
(395)
1,728

$ 15,721$ 1,922,632

1,123 5,075

2,448(1,235 ) 6,584

2,890

188,386(1,235 )3,721 (1,664) ¥ (287 ) (2,242)

13,447(4,921)12(40)(472)3,721

650¥ (287 )

13,447
13,447(4,921)(4,921)12 12(40) (40)178 (472)

648 ¥ 196,411¥ 2,486¥ 1,619¥ (287 )¥ 198,031¥ 196,411¥ (287 )¥Thousands of U.S. Dollars (Note 1)

BALANCE, MARCH 31, 2013
Net income
Cash dividends, $0.18 per share
Change of scope of consolidation
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2014

CommonStockCapitalSurplus

BALANCE, MARCH 31,$ 2013421,324$ 360,316

Net income
Cash dividends, $0.18 per share
Change of scope of consolidation
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31,$ 2014421,324$

Retained
CommonEarnings
Stock

Treasury
CapitalStock
Surplus

Unrealized
Gain onAvailableRetained
for-Sale
Earnings
Securities$980,469
421,324$ $(13,103)
360,316$ 63,924$ 980,469 $ 28,059$ (13,103) $ (11,991)$ 63,924

130,555(47,785)119$ 360,316

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income (Loss)
Unrealized
DeferredDeferredGain onForeignGain on DefinedGain on
ForeignDefinedAvailable- Retirement
Derivatives
Derivatives
Currency
Currency
Retirement
Treasury Translation
for-Sale Benefit
under Hedge
under Hedge
Translation
Minority
Benefit
Stock Adjustments
Securities
Accounting
Accounting
Adjustments Interests
Plans
Total
Plans

¥

Total
Equity617

16,077(4,404)(31)(21)
8,646 1,123

648¥ (1,390) ¥ 2,486¥ 4,920

Minority
Interests$ 1,063,358$ 421,324(395)$ $(13,498)
360,316

130,555(47,785)119$ 28,059 $ 1,828,999$ (11,991)$ 9,409130,555(47,785)
119(395)
36,128$ (2,787 )

130,555
130,555(47,785)(47,785)
119 119(395)(395)(4,582)$ 47,768$ 1,063,358 $ 6,291$ (13,498) $ 24,137$ 47,768 $ (2,787$ ) 6,291 $ 1,906,910$ 24,137$ 15,721$ (2,787 )$ 1,922,632$ 1,906,910(395)(16,156)(21,768)

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

-6-

5

Consolidated Financial Statements-6-

Consolidated Financial Statements

6Consolidated
Statement of Cash Flows
Chiyoda Corporation and Consolidated Subsidiaries

Chiyoda Corporation and Consolidated Subsidiaries(Year Ended March 31, 2014)
Consolidated Statement of Cash Flows
Year Ended March 31, 2014

Consolidated Statement of Cash Flows
Year Ended March 31, 2014

Millions of Yen
2014
2013
OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes paid
Depreciation
Amortization of goodwill(Reversal of) allowance for doubtful accounts—net(Reversal of) allowance for warranty costs forcompleted works
Allowance for loss on construction contracts
Liability for retirement benefits—net
Loss (gain) on sales and disposals of fixed assets
Foreign exchange gain—net
Equity in losses (earnings) of associated companies
Changes in operating assets and liabilities:
Increase in trade notes and accounts receivable,
and costs and estimated earnings on long-term
construction contracts
Increase in costs of construction contracts in process
Increase in trade notes and accounts payable(Decrease) increase in advance receipts on
construction contracts
Decrease (increase) in accounts receivable—other
Increase in jointly controlled assets of joint venture(Decrease) increase in deposits received
Increase in interest and dividend receivable
Other—net
Total adjustments
Net cash (used in) provided by operating
activities

Thousands of
U.S. Dollars(Note 1)
2014

¥ 22,538¥ 26,747$ 218,816(13,709)
3,196
825
(12)

(130 )
2,580
41
(11 )

(133,101)
31,034
8,016
(116)

(4)
2,534
(768)
31
(224)
374

187
723
(185 )(1,460 )(125 )(145 )(45)
24,610(7,461)301(2,179)3,636(1,896)(16,974)
23,650(20,453 )(1,714 )30,130(18,416)(164,801)
229,617(2,111)
2,519(31,955)(2,141)(713)(2,334)(39,715)

992(3,170 )(28,603 )619(674 )
8,799(12,599 )(20,504)
24,456(310,252)(20,787)(6,925)(22,668)(385,587)¥ (17,177)¥ 14,147$ (166,770)

Millions of Yen
2014
2013
INVESTING ACTIVITIES:Net decrease in time deposits
Purchases of marketable securities
Proceeds from redemption of marketable securities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Payments for asset retirement obligations
Payments for purchases of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments of short-term loans receivable
Proceeds from collections of short-term loans receivable
Payments of long-term loans receivable
Proceeds from collections of long-term loans
Other—net

192
2,400
(1,981)90(3,294)(7)(4,046)(9,134)(445)

Net cash used in investing activities
FINANCING ACTIVITIES:Net increase in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Payments of cash dividends
PaymentsCorporationof cash dividends
to minority
shareholders
ChiyodaandConsolidated
Subsidiaries
Other—net
Consolidated Statement of Cash FlowsNet cashYear Ended March
31, used
2014in financing activities

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
INCREASE IN CASH AND CASH EQUIVALENTS FROMNEWLY CONSOLIDATED SUBSIDIARYCASH AND CASH EQUIVALENTS, END OF YEAR

-7-

7

Consolidated Financial Statements(Continued)

See notes to consolidated financial statements.

-8-(3,620 )7,020(3,502 )(66 )(2,450 )

(712)
101
41

81
(514 )
35
32(16,796)(5,257 )

11

1,866
23,300(19,238)879(31,988)(67)(39,285)(88,682)(4,327)(6,915)983
400(163,075)
109

(264)
(4,914)(8)(72)

10,000(10,000 )(4,397 )
(7 )
(27 )

(2,570)(47,713)
(85)
(704)

(5,249)(4,432 )(50,963)

3,974
2,024
Millions of Yen
2014
2013
¥ (35,249)¥ 6,482

Thousands of
38,584
U.S. Dollars(Note 1)2014
$ (342,224)

323

DECREASE IN CASH AND CASH EQUIVALENTSRESULTING FROM EXCLUSION OF SUBSIDIARIESFROM CONSOLIDATIONCASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

127
(2,400 )Thousands of
U.S. Dollars(Note 1)
2014

3,137

(22 )
180,229

173,769

1,749,799¥ 145,303¥ 180,229$ 1,410,721(Continued)

Consolidated Financial Statements8

Chiyoda to
Corporation
and Consolidated Subsidiaries
Notes
Consolidated
Financial Statements
(Year
Ended
March 31, 2014)
Notes
to Consolidated
Financial Statements
Year Ended March 31, 2014
1.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

Most of the foreign consolidated subsidiaries have a December 31 year-end which does not accord with 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 and the year-end of the Company.

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forthin the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in accordancewith 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.

Effective the year ended March 31, 2014, one of these consolidated subsidiaries changed its fiscal year end to
March 31 to improve the accuracy of group consolidation and closing. As a result of this change in the fiscal
year end, the consolidated financial statements for the year ended March 31, 2014, included the results for a
15-month period for this consolidated subsidiary from January 1, 2013 to March 31, 2014.

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 2013 consolidated financial
statements to conform to the classifications used in 2014.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Chiyoda
Corporation (the "Company") is incorporated and principally operates. The translations of Japanese yen amounts
into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at therate of ¥103 to $1, the approximate rate of exchange at March 31, 2014. 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.

The excess of the cost of acquisition over the fair value of the net assets of an acquired subsidiary at the date ofacquisition is being amortized over a period of 5 to 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—In May 2006, the Accounting Standards Board of Japan (the "ASBJ") issued ASBJ Practical
Issues Task Force ("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements." PITF No. 18 prescribes that the accounting
policies and procedures 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 in accordance with either
International Financial Reporting Standards or generally accepted accounting principles in the United States ofAmerica 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 lossof pensions that has been directly recorded in equity; (c) expensing capitalized development costs of R&D;(d) cancellation of the fair value model of accounting for property, plant and equipment and investment
properties and incorporation of the cost model of accounting; and (e) exclusion of minority interests from net
income, if contained in net income.

c.

Business Combinations—In October 2003, the Business Accounting Council issued a Statement of Opinion,"Accounting for Business Combinations," and in December 2005, the ASBJ issued ASBJ Statement No. 7,"Accounting Standard for Business Divestitures" and ASBJ Guidance No. 10, "Guidance for AccountingStandard for Business Combinations and Business Divestitures." The accounting standard for businesscombinations allowed companies to apply the pooling of interests method of accounting only when certain
specific criteria are met such that the business combination is essentially regarded as a uniting of interests. For
business combinations that do not meet the uniting of interests criteria, the business combination is considered
to be an acquisition and the purchase method of accounting is required. This standard also prescribes theaccounting for combinations of entities under common control and for joint ventures.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements as of March 31, 2014, include the accounts of theCompany and its 29 significant (18 in 2013) subsidiaries (together, the "Group").
Under the control and influence concepts, those companies in which the Company, directly or indirectly, isable 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 the equity method.
Investments in five (two in 2013) associated companies are accounted for by the equity method in 2014.
Investments in the remaining unconsolidated subsidiaries and associated companies are stated at cost. If theequity method of accounting had been applied to the investments in these companies, the effect on theaccompanying consolidated financial statements would not be material.

- 10 -- 11 -

9

Consolidated Financial Statements

Consolidated Financial Statements

10Notes to Consolidated Financial Statements

In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement
No. 21, "Accounting Standard for Business Combinations." Major accounting changes under the revised
accounting standard are as follows: (1) The revised standard requires accounting for business combinations
only by the purchase method. As a result, the pooling of interests method of accounting is no longer allowed.
(2) The previous accounting standard required research and development costs to be charged to income as
incurred. Under the revised standard, in-process research and development costs (IPR&D) acquired in thebusiness combination are capitalized as an intangible asset. (3) The previous accounting standard provided fora bargain purchase gain (negative goodwill) to be systematically amortized over a period not exceeding 20
years. Under the revised standard, the acquirer recognizes the bargain purchase gain in profit or loss
immediately on the acquisition date after reassessing and confirming that all of the assets acquired and all of
the liabilities assumed have been identified after a review of the procedures used in the purchase priceallocation. The revised standard was applicable to business combinations undertaken on or after April 1, 2010.
The Company acquired 76% of total voting right of Xodus Group (Holdings) Limited on June 28, 2013, andaccounted for it by the purchase method of accounting. The related goodwill is systematically amortized over
10 years.
d.

Construction Contracts—In December 2007, the ASBJ issued ASBJ Statement No. 15, "Accounting Standard
for Construction Contracts" and ASBJ Guidance No. 18, "Guidance on Accounting Standard for Construction
Contracts." Under this accounting standard, construction revenue and construction costs should be recognizedby the percentage-of-completion method, if the outcome of a construction contract can be estimated reliably.
When total construction revenue, total construction costs, and the stage of completion of the contract at thebalance sheet date can be reliably measured, the outcome of a construction contract is deemed to be estimatedreliably. If the outcome of a construction contract cannot be reliably estimated, the completed-contract methodshould be applied. 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 a loss on construction
contracts.
Concerning the construction contracts, the Group applies the accounting methods as follows:
Unbilled costs on contracts, which are accounted for by the completed-contract method, are stated as costsof construction contracts in process.
Payments received in excess of costs and estimated earnings on contracts, which are accounted for by thepercentage-of-completion method and payments received on the other contracts, are presented as current
liabilities.
Costs of preparation work for unsuccessful proposals and other projects that are not realized are charged toincome, 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 thatare exposed to insignificant risk of changes in value. Cash equivalents include time deposits, certificate ofdeposits, and commercial paper, all of which mature or become due within three months of the date ofacquisition.

f.

Held-to-Maturity Securities and Investment Securities—Held-to-maturity securities and investment securities
are classified and accounted for, depending on management's intent, as follows: (1) held-to-maturity debt
securities, for which there is a positive intent and ability to hold to maturity, are reported at cost; and(2) available-for-sale securities are reported at fair value, with unrealized gains and losses, net of applicabletaxes, reported in a separate component of equity.

- 12 -

11

Consolidated Financial Statements

Nonmarketable available-for-sale securities are stated at cost determined by the moving-average method. For
other-than-temporary declines in fair value, investment securities are reduced to net realizable value by acharge to income.
g.

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

h.

Jointly Controlled Assets of Joint Venture—The jointly controlled assets of the joint venture are jointly
controlled cash 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 beappropriate based on the Group's past credit loss experience and an evaluation of potential losses in thereceivables outstanding.

j.

Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation is computedby the declining-balance method, except for buildings owned by the Company that are depreciated using thestraight-line method, at rates based on the estimated useful lives of the assets. The range of useful lives is from
8 to 57 years for buildings and structures, from 4 to 17 years for machinery and equipment, and from 4 to 15
years for tools, furniture, and fixtures. Equipment held for leases is depreciated by the straight-line method
over the respective lease periods.

k.

Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever events or changes incircumstance indicate the carrying amount of an asset or asset group may not be recoverable. An impairment
loss is recognized if the carrying amount of an asset or asset group exceeds 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 the asset or the net selling price at disposition.

l.

Software—Software for internal use is amortized on a straight-line basis over its estimated useful life (fiveyears at the maximum).

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

Allowance for Warranty Costs for Completed Work—The allowance for warranty costs for completed work isprovided based on past rate experience.

o.

Allowance for Losses on Construction Contracts—The allowance for losses on construction contracts isprovided 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 forlosses on construction contracts is offset against the costs of construction contracts in process in the balance
sheet.

p.

Provision for Treatment of PCB Waste—A provision for treatment of PCB (Poly Chlorinated Biphenyl) waste
is provided based on estimated costs of the treatment for PCB products and equipment as well as theircollection and transportation fees.

- 13 -

Consolidated Financial Statements

12Notes to Consolidated Financial Statementsq.

Retirement and Pension Plans—The Company and consolidated subsidiaries have funded or unfunded
defined benefit pension plans and a 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.
Effective April 1, 2000, the Company and its domestic consolidated subsidiaries adopted a new accounting
standard for retirement benefits and accounted 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 toperiods on a straight-line basis. Actuarial gains and losses are amortized on a straight-line basis over 10 years
within the average remaining service period. Past service costs are amortized on a straight-line basis over 10
years within the average remaining service period.

The Company applied the revised accounting standard and guidance for retirement benefits for (a) and (b)above, effective March 31, 2014. As a result, asset for retirement benefits of ¥34 million ($333 thousand) andliability for retirement benefits of ¥2,080 million ($20,202 thousand) was recorded as of March 31, 2014, andaccumulated other comprehensive income for the year ended March 31, 2014, decreased by ¥287 million($2,787 thousand). In addition, net assets per share decreased by ¥1.11 for the year ended March 31, 2014.
r.

Asset Retirement Obligations—In March 2008, the ASBJ issued ASBJ Statement No. 18, "AccountingStandard for Asset Retirement Obligations" and ASBJ Guidance No. 21, "Guidance on Accounting Standard
for Asset Retirement Obligations." Under this accounting standard, an asset retirement obligation is defined asa 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 with the retirement of suchtangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows
required for the future asset retirement and is recorded in the period in which the obligation is incurred if areasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in
the period the asset retirement obligation is incurred, the liability should be recognized when a reasonableestimate 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 amount of the original estimate ofundiscounted cash flows are reflected as an adjustment to the carrying amount of the liability and thecapitalized amount of the related asset retirement cost.

s.

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

t.

Leases—In March 2007, the ASBJ issued ASBJ Statement No. 13, "Accounting Standard for Lease
Transactions," which revised the previous accounting standard for lease transactions.

The transitional obligation of ¥5,696 million ($55,300 thousand) is being amortized and charged to income
over 15 years using the straight-line amortization method and included in an operating expense in the
consolidated statements of income for the years ended March 31, 2014 and 2013.
In May 2012, the ASBJ issued ASBJ Statement No. 26, "Accounting Standard for Retirement Benefits" andASBJ Guidance No. 25, "Guidance on Accounting Standard for Retirement Benefits," which replaced theaccounting standard for retirement benefits that had been issued by the Business Accounting Council in 1998
with an effective date of April 1, 2000, and the other related practical guidance, and were followed by partial
amendments from time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to berecognized in profit or loss are recognized within equity (accumulated other comprehensive income),
after adjusting for tax effects, and any resulting deficit or surplus is recognized as a liability (liability for
retirement benefits) or asset (asset for retirement benefits).
(b) The revised accounting standard does not change how to recognize actuarial gains and losses and past
service costs in profit or loss. Those amounts are recognized in profit or loss over a certain period nolonger than the expected average remaining service period of the employees. However, actuarial gains
and losses and past service costs that arose in the current period and have not yet been recognized in
profit or loss are included in other comprehensive income and actuarial gains and losses and past service
costs that were recognized in other comprehensive income in prior periods and then recognized in profit
or loss in the current period shall be treated as reclassification adjustments (see Note 2.aa).

Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized" information was disclosed in the notes to the lessee's
financial statements. The revised accounting standard requires that all finance lease transactions be capitalized
by recognizing lease assets and lease obligations in the balance sheet.
The Company applied the revised accounting standard effective April 1, 2008. In addition, the Company
continues to account for leases that existed at the transition date and do not transfer ownership of the leased
property to the lessee as operating lease transactions.

(c) The revised accounting standard also made certain amendments relating to the method of attributing
expected benefit to periods and relating to the discount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are effective for the end of annual periods
beginning on or after April 1, 2013, and for (c) above are effective for the beginning of annual periods
beginning on or after April 1, 2014, or for the beginning of annual periods beginning on or after April 1, 2015,
subject to certain disclosure in March 2015, both with earlier application being permitted from the beginningof annual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting
standard to consolidated financial statements in prior periods is required.

All other leases are accounted for as operating leases.
u.

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 to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary differences between the carrying amounts andthe tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted income tax
rates to the temporary differences.
The Company files a tax return under the consolidated corporate-tax system, which allows companies to basetax payments on the combined profits or losses of the parent company and its wholly owned domestic
subsidiaries.

- 14 -

13

Consolidated Financial Statements- 15 -

Consolidated Financial Statements

14Notes to Consolidated Financial Statementsv.

Foreign Currency Transactions—All short-term and long-term monetary receivables and payables
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 are recognized in the consolidated statement ofincome to the extent that they are not hedged by foreign currency forward contracts.

w.

Foreign Currency Financial Statements—Balance sheet accounts of consolidated foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of the balance sheet date except for equity, which istranslated at the historical rate. Differences arising from such translation are shown as "Foreign currencytranslation 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 thecurrent exchange rate as of the balance sheet date.

x.

Derivatives and Hedging Activities—The Company uses derivative financial instruments, including foreign
currency forward contracts and interest swap contracts, as a means of hedging exposure to foreign currency
risks and interest rate risks. The Company does not enter into derivatives for trading or speculative purposes.

Diluted net income per share is not disclosed because there is no potential stock, which has a dilutive effect for
the fiscal years ended March 31, 2014 and 2013.
z.

aa. New Accounting Pronouncements

Derivative financial instruments are classified and accounted for as follows:

Accounting Standard for Retirement Benefits—On May 17, 2012, the ASBJ issued ASBJ Statement No. 26,"Accounting Standard for Retirement Benefits" and ASBJ Guidance No. 25, "Guidance on AccountingStandard for Retirement Benefits," which replaced the Accounting Standard for Retirement Benefits that had
been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000, and the otherrelated practical guidance, and were followed by partial amendments from time to time through 2009.

(1) All derivatives are recognized as either assets or liabilities and measured at fair value, with gains or losses
recognized in the consolidated statement of income.
(2) For derivatives used for hedging purposes, if such derivatives qualify for hedge accounting because ofhigh correlation and effectiveness between the hedging instruments and the hedged items, gains or losses
on derivatives are deferred until maturity of the hedged transactions.

The major change is as follows:

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 the contracted rates if the forward
contracts qualify for hedge accounting.

Amendments relating to the method of attributing expected benefit to periods and relating to the discountrate and expected future salary increases
The revised accounting standard also made certain amendments relating to the method of attributing
expected benefits to periods and relating to the discount rate and expected future salary increases.

Foreign currency deposits are held to hedge foreign exchange risks derived from forecasted purchases of fixed
assets denominated in foreign currency.

The Company expects to apply the above from April 1, 2014. The effects of applying the revised accounting
standard are estimated as follows: (1) Retained earnings as of April 1, 2014, would be decreased by¥579 million ($5,629 thousand). (2) Operating income and income before income taxes and minority interests
for the next fiscal year ending March 31, 2015, would not be material.

Interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured
at market value but the differential paid or received under the swap agreements is recognized and included ininterest expense.
y.

Per Share Information—Basic net income per share is computed by dividing net income available to commonshareholders by the weighted-average number of common shares outstanding for the period, retroactively
adjusted for stock splits.
Diluted net income per share reflects the potential dilution that could occur if securities were exercised orconverted into common stock. Diluted net income per share of common stock assumes full conversion of theoutstanding convertible notes and bonds at the beginning of the year (or at the time of issuance) with anapplicable adjustment for related interest expense, net of tax, and full exercise of outstanding warrants.
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.

- 16 -

15

Consolidated Financial Statements

Accounting Changes and Error Corrections—In December 2009, the ASBJ issued ASBJ Statement No. 24,"Accounting Standard for Accounting Changes and Error Corrections" and ASBJ Guidance No. 24, "Guidanceon Accounting Standard for Accounting Changes and Error Corrections." Accounting treatments under thisstandard and guidance are as follows: (1) Changes in Accounting Policies—When a new accounting policy isapplied following revision of an accounting standard, the new policy is applied retrospectively unless therevised accounting standard includes specific transitional provisions, in which case the entity shall comply
with the specific transitional provisions. (2) Changes in Presentation—When the presentation of financial
statements is changed, prior-period financial statements are reclassified in accordance with the newpresentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted for in
the period of the change if the change affects that period only, and is accounted for prospectively if the change
affects both the period of the change and future periods. (4) Corrections of Prior-Period Errors—When an error
in prior-period financial statements is discovered, those statements are restated.

3.

BUSINESS COMBINATIONOn June 28, 2013, the Company acquired 76% of total voting rights of Xodus Group (Holdings) Limited ("Xodus
Group"). Xodus Group provides integrated services from conceptual definition through design and construction tooperation in international oil & gas and low carbon industries. This acquisition was made to complement theCompany's competence in offshore and upstream projects. The results of operations for Xodus Group are includedin the Company's consolidated financial statements from July 1, 2013.
The Company accounted for this business combination by the purchase method of accounting.

- 17 -

Consolidated Financial Statements

16Notes to Consolidated Financial Statements

The acquisition cost was ¥9,899 million ($96,112 thousand) in cash in accordance with the Share Purchase
Agreement dated June 28, 2013. The total cost of acquisition has been allocated to the assets acquired and theliabilities assumed based on their respective fair values. Goodwill recorded in connection with the acquisition
totaled ¥5,695 million ($55,297 thousand) for the reason that excess earnings are expected as a result from Xodus
Group's business expansion in the future.

5.

HELD-TO-MATURITY SECURITIES AND INVESTMENT SECURITIES
Held-to-maturity securities and investment securities at March 31, 2014 and 2013, consisted of the following:

The assets acquired and the liabilities assumed at the acquisition date are as follows:
Millions of Yen

Thousands of
U.S. Dollars

Current assets
Fixed assets¥ 5,061
2,540$ 49,141
24,669Total assets¥ 7,602$ 73,810

Current liabilities
Fixed liabilities¥ 2,856
166$ 27,728
1,616

Total liabilities¥ 3,022$ 29,345

If this business combination had been completed as of April 1, 2013, the beginning of the current fiscal year, theunaudited condensed pro forma consolidated statement of income for the year ended March 31, 2014, would be as
follows:

Sales
Operating income
Income before income taxes and minority interests
Net income

Millions of Yen

Thousands of
U.S. Dollars¥ 6,370(585 )(966 )(676 )$ 61,848(5,688)(9,383)(6,568)After the above stated business combination, the Company acquired additional shares of Xodus Group during thisfiscal year ended March 31, 2014. The acquisition cost was ¥505 million ($4,910 thousand) in cash. Goodwill
recorded in connection with the acquisition totaled ¥587 million ($5,706 thousand).
4.

Thousands of
U.S. Dollars
2014

Costs and estimated earnings
Amounts billed¥ 379,837(363,334)¥ 329,290(301,813 )$ 3,687,743(3,527,516)

Net

¥

¥

$

- 18 -

Consolidated Financial Statements

16,50327,477160,227¥ 2,400
23,740¥ 21,131$ 205,163

The costs and aggregate fair values of held-to-maturity securities and investment securities at March 31, 2014 and2013, were as follows:
March 31, 2014

Cost
Securities classified as—
Available-for-sale—equity securities¥ 11,465

Millions of Yen
Unrealized
Unrealized
Gains
Losses¥ 7,128

¥2

Fair
Value
¥ 18,591

March 31, 2013

Cost
Securities classified as:
Available-for-sale—equity securities
Held-to-maturity¥ 11,455
2,400

Millions of Yen
Unrealized
Unrealized
Gains
Losses¥ 9,991

¥ 112

Fair
Value
¥ 21,334
2,400

March 31, 2014

CONSTRUCTION CONTRACTS

Millions of Yen
2014
2013

17

Current—Held-to-maturity securities
Noncurrent—Equity securities

Cost

Costs and estimated earnings recognized with respect to construction contracts which are accounted for by thepercentage-of-completion method at March 31, 2014 and 2013, were as follows:

Thousands of
U.S. Dollars
2014

Millions of Yen
2014
2013

Securities classified as—
Available-for-sale—equity securities$ 111,320

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses$ 69,204

$ 23

Fair
Value
$ 180,501

Available-for-sale securities whose fair value was not readily determinable at March 31, 2013, were as follows.
Similar information for 2014 is disclosed in Note 13.
Carrying AmountMillions of Yen

March 31, 2013
Securities classified as—
Available-for-sale—equity securities¥ 2,406- 19 -

Consolidated Financial Statements

18

Notes to Consolidated Financial Statements

6.

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATEDCOMPANIES

Commitment-line contracts at March 31, 2014, were as follows:

Investments in and advances to unconsolidated subsidiaries and associated companies at March 31, 2014 and 2013,
were as follows:
Millions of Yen
2014
2013

7.

Thousands of
U.S. Dollars
2014

Investments
Long-term receivables¥ 7,183971¥ 4,686477$ 69,743
9,434

Total

¥ 8,155¥ 5,164$ 79,177

LONG-TERM DEBT
Long-term debt at March 31, 2014 and 2013, consisted of the following:
Millions of Yen
2014
2013

Thousands of
U.S. Dollars
2014Long-term loans principally from banks, due seriallythrough 2018, with interest rates ranging from
1.9% to 2.0% at 2014 and 2013—Unsecured
Obligations under finance leases
Total
Less current portion¥ 10,023
99
10,122(82)¥ 10,221
5
10,226(91 )$ 97,315
962
98,277(800)

Long-term debt, less current portion¥ 10,040¥ 10,135$ 97,477

8.

Millions of Yen

Thousands of
U.S. Dollars

Commitment-line contracts¥ 15,000$ 145,631

Unused commitments¥ 15,000$ 145,631

RETIREMENT AND PENSION PLANS
The Company and consolidated subsidiaries have funded or unfunded defined benefit pension plans and a defined
contribution pension plans for employees.
Under defined benefit corporate pension plans, all of which are funded, employees are entitled to certain lump-sum
payments or pension payments based on cumulated points which are granted in accordance with years ofcontinuous 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.
One of domestic consolidated subsidiaries implemented a defined benefit pension plan and a defined contribution
pension plan in this fiscal year ended March 31, 2014, by which the former severance lump-sum payment plan was
terminated, and changed the accounting method to calculate retirement benefit obligations from the simplified
method to the principle method. As a result, retirement benefit expenses of ¥299 million ($2,906 thousand) isrecorded as other expense for the year ended March 31, 2014.
Year Ended March 31, 2014
(1) The changes in defined benefit obligation for the year ended March 31, 2014, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

Balance at beginning of year
Current service cost
Interest cost
Actuarial losses
Benefits paid
The amount of obligation processing withthe changes from simplified method tothe principle method¥ 20,630
593
326
176
(1,691 )$ 200,294
5,761
3,171
1,713
(16,418)

1,751

17,007

Balance at end of year

¥ 21,787$ 211,529

Annual maturities of long-term debt, excluding finance leases (see Note 12), at March 31, 2014, were as follows:Year Ending
March 31

Millions of Yen

2015
2016
2017
2018
2019
2020 and thereafter

¥

Total

¥ 10,023- 20 -

19

Consolidated Financial Statements

4
4
4
10,004
4
1

Thousands of
U.S. Dollars
$

43
44
40
97,12840
17$ 97,315- 21 -

Consolidated Financial Statements

20Notes to Consolidated Financial Statements(2) The changes in plan assets for the year ended March 31, 2014, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

Balance at beginning of year
Expected return on plan assets
Actuarial losses
Contributions from the employer
Benefits paid
The amount of asset processing with thechanges from simplified method tothe principle method¥ 17,705
707
853
1,477
(1,691 )$ 171,893
6,868
8,283
14,344(16,418)

1,318

12,803

Balance at end of year

¥ 20,370$ 197,775

Millions of Yen

Thousands of
U.S. Dollars

Liability for retirement benefits
Asset for retirement benefits¥ 2,080(34 )$ 20,202(333)

Net liability for defined benefit obligation¥ 2,046$ 19,869(5) The components of net periodic benefit costs for the year ended March 31, 2014, were as follows:(3) The changes in the liability recorded in the consolidated balance sheet by using the simplified method for theyear ended March 31, 2014, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

Balance at beginning of year
Benefit costs
Benefits paid
Contribution to the plans
Decrease by implementation of defined
contribution plans
The amount of expense processing with thechanges from simplified method to theprinciple method
Change of scope of consolidation
Others

¥ 943
300
(46 )
(332 )$ 9,1622,920(451)(3,225)(173 )(1,683)(433 )
71
299(4,203)691
2,906

Balance at end of year

¥ 629

$ 6,115

Others are benefit costs recognized by changing the pension plans and the accounting method to calculate
retirement benefit obligations from the simplified method to the principle method.
(4) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined
benefit obligation and plan assets as of March 31, 2014
Millions of Yen

Thousands of
U.S. Dollars

Unfunded defined benefit obligation¥ 23,088(21,511 )
1,577
469

$ 224,160(208,847)
15,313
4,555

Net liability for defined benefit obligation¥$

Funded defined benefit obligation
Plan assets- 22 -

21

Consolidated Financial Statements

2,046

19,869Thousands of
U.S. Dollars

Millions of Yen
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial losses
Amortization of transitional obligation
Benefit costs in simplified method
Others¥593
326(707 )(176 )
2
608
300
299

$ 5,761
3,171(6,868)(1,711)
27
5,911
2,920
2,906

Net periodic benefit costs¥ 1,248$ 12,117

Others are benefit costs recognized by changing the pension plans and the accounting method to calculate
retirement benefit obligations from the simplified method to the principle method.
(6) Accumulated other comprehensive income on defined retirement benefit plans as of March 31, 2014
Millions of Yen

Thousands of
U.S. Dollars

Unrecognized prior service cost
Unrecognized actuarial losses
Unamortized transitional obligation¥ (323 )157
608$ (3,137)
1,524
5,911

Total

¥ 442

$ 4,298(7) Plan assets as of March 31, 2014a.

Components of plan assets
Plan assets consisted of the following:
Debt investments
Equity investments
General accounts
Others

26 %
37
25
12

Total

100 %

- 23 -

Consolidated Financial Statements

22

Notes to Consolidated Financial Statementsb.

Method of determining the expected rate of return on plan assets

9.

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

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.

(8) Assumptions used for the year ended March 31, 2014, were set forth as follows:
Discount rate
Expected rate of return on plan assets

1.5 %
3.7

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders' meeting. For companies that meet certain criteria, theBoard of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if
the company has prescribed so in its articles of incorporation. However, the Company cannot do so because it
does not meet all the above criteria.

(9) The Company and consolidated subsidiaries have ¥550 million ($5,342 thousand) of payables to defined
contribution plans.
Year Ended March 31, 2013

The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject
to a certain limitation and additional requirements.

The liability for retirement benefits at March 31, 2013, consisted of the following:

Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.

Millions of Yen
Projected benefit obligation
Fair value of plan assets
Unrecognized transitional obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Net amount booked in the consolidated balance sheet¥ 23,727(19,858)(1,217)
(839)
499
2,310

Net liability for employees' retirement benefits¥ 2,310b.

The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve(a component of retained earnings) or as additional paid-in capital (a component of capital surplus), dependingon 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 ofadditional paid-in capital and 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 under certain conditions upon resolution of the shareholders.

The components of net periodic benefit costs for the year ended March 31, 2013, were as follows:
Millions of Yen
Service cost
Interest cost
Expected return on plan assets
Amortization of transitional obligation
Recognized actuarial loss
Amortization of prior service cost
Subtotal
Payment to defined contribution pension trust

¥

721
326
(275)
608
591
(176)
1,796
372

Net periodic benefit costs¥ 2,168

Increases/Decreases and Transfer of Common Stock, Reserve, and Surplusc.

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

Assumptions used for the year ended March 31, 2013, are set forth as follows:
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss
Amortization period of transitional obligation
Amortization period of prior service cost

1.5%
1.6%
10 years
15 years
10 years- 24 -

23

Consolidated Financial Statements- 25 -

Consolidated Financial Statements

24Notes to Consolidated Financial Statements

10.

INCOME TAXESA reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statement of income for the year ended March 31, 2014, is as follows:

The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of approximately 38% for the years ended March 31,
2014 and 2013.

2014

The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities at March
31, 2014 and 2013, were as follows:
Millions of Yen
2014
2013

Deferred tax assets:
Cost of revenue
Allowance for employees' bonus
Allowance for losses on construction contracts
Retirement benefits
Defined retirement benefit plans
Future deductible depreciation
Costs of construction contracts in process
Other
Less valuation allowance¥ 14,927
1,438
1,305
647
1,079
657
3,224
(1,084)

Total
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Profit/loss in joint venture
Other
Total
Net deferred tax assets¥ 11,438
1,641
104
792

Thousands of
U.S. Dollars
2014

6,282
10,4786,385
31,306(10,530)

22,195

18,317215,493

2,460
433
145
457

3,414
1,852
402
380

23,889
4,208
1,412
4,438

3,496

6,050

33,949¥ 18,699¥ 12,267$ 181,543

38 %
1
(1)
3

Actual effective tax rate

41 %For the year ended March 31, 2013, a reconciliation was not disclosed because the difference is less than 5% of thenormal effective statutory tax rate.

$ 144,926
13,965
12,679

636
566
4,220
(1,082 )Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Nontaxable dividend income
Tax rate changes due to tax reform

New tax reform laws enacted in 2014 in Japan changed the normal effective statutory tax rate for the fiscal year
beginning on or after April 1, 2014, from approximately 38% to 35%. The effect of this change was to decreasedeferred tax assets in the consolidated balance sheet as of March 31, 2014, by ¥740 million ($7,191 thousand) andto increase income taxes—deferred in the consolidated statement of income for the year then ended by ¥757 million($7,354 thousand).
11.

RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥2,424 million ($23,537 thousand) and ¥2,323 million forthe years ended March 31, 2014 and 2013, respectively.

12.

LEASESThe Group leases certain machinery, computer equipment, and other assets.
Obligations under finance leases and future minimum payments under noncancelable operating leases were as
follows:
Year Ended March 31, 2014
Millions of Yen
Finance
Operating
LeasesLeasesThousands of
U.S. Dollars
Finance
Operating
LeasesLeasesDue within one year
Due after one year

¥ 77
21

¥

214
917

$ 756
205

$ 2,084
8,908

Total

¥ 99

¥ 1,132$ 962$ 10,992

Prior to April 1, 2013, "Allowance for losses on construction contracts" and "Costs of construction contracts inprocess" were included in "Other" within the deferred tax assets section. From this fiscal year ended March 31,
2014, the amounts are disclosed separately due to the increase in materiality.
Prior to April 1, 2013, "Enterprise tax" and "Loss on valuation of investment securities" were disclosed separately.
From this fiscal year ended March 31, 2014, the amounts are included in "Other" within the deferred tax assets
section due to the decrease in materiality.
Net deferred tax assets as of March 31, 2014 and 2013, were recorded in the accompanying consolidated balance
sheet as follows:
Millions of Yen
2014
2013
Current assets—Deferred tax assets
Investments and other assets—Other assets
Long-term liabilities—Other¥ 18,868685(854)- 26 -

25

Consolidated Financial Statements¥ 13,162570(1,465 )Thousands of
U.S. Dollars
2014$ 183,185
6,655(8,296)

Pro forma Information of Leased Property Whose Lease Inception Was before March 31, 2008
ASBJ Statement No. 13, "Accounting Standard for Lease Transactions" requires that all finance lease transactions
be capitalized to recognize lease assets and lease obligations in the balance sheet. However, ASBJ Statement No. 13
permits leases without ownership transfer of the leased property to the lessee and whose lease inception was before
March 31, 2008, to continue to be accounted for as operating lease transactions if certain "as if capitalized"
information is disclosed in the note to the financial statements. The Company applied ASBJ Statement No. 13
effective April 1, 2008, and accounted for such leases as operating lease transactions.

- 27 -

Consolidated Financial Statements

26

Notes to Consolidated Financial Statements

Pro forma information of leased property whose lease inception was before March 31, 2008, on an "as if
capitalized" basis was as follows:

Cash equivalents include certificates of deposit, which have short maturities and are used for cash surpluses.
Short-term investments include deposits at call, which will mature three months after the date of acquisition.
Both certificates of deposit and deposits at call are exposed to default risk of the issuing financial institution.

Year Ended March 31, 2013
Buildings
andStructures

Investment securities are equity securities related to the business, which the Group operates. Marketablesecurities are exposed to the risk of fluctuations in stock prices.

Millions of Yen
Tools,
Furniture,and Fixtures
Other

Total

Acquisition cost
Accumulated depreciation

¥ 16
9

¥ 51
42

¥ 26
18

¥ 93
70

Net leased property

¥ 6

¥ 8

¥ 8

¥ 23

Obligations under finance leases for the year ended March 31, 2013, were as follows:
Millions of Yen
2013
Due within one year
Due after one year

¥ 9
13

Total

¥ 23

Depreciation expense as lessee, which is not reflected in the accompanying consolidated statement of income,computed by the straight-line method was ¥13 million for the year ended March 31, 2013. Lease payments wereapproximately equal to the depreciation expense.
The amounts of obligations, acquisition cost, and depreciation under finance leases include the imputed interest
income portion and interest expense portion.
For the year ended March 31, 2014, pro forma information of leased property whose lease inception was before
March 31, 2008, on an "as if capitalized" basis was not disclosed because the balances are not material.
13.

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
certificates of deposit and deposits at call. For operating capital, the Group uses bank loans. Derivatives areused, not for speculative purposes, but to manage exposure to the market risk of fluctuation in foreign currency
exchange rates and interest rates.
(2) Nature and Extent of Risks Arising from Financial Instruments
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, theposition, net of payables in foreign currencies, is hedged by using foreign currency forward contracts.

- 28 -

27

Consolidated Financial Statements

Payment terms of payables, such as trade notes and trade accounts, are generally less than one year. Althoughpayables in foreign currencies are exposed to the market risk of fluctuation in foreign currency exchange rates,
those risks are netted against the balance of receivables denominated in the same foreign currency as noted
above.
Bank loans are used for operating capital. Although they are exposed to the market risks from changes ininterest rates, the risk is hedged by using interest rate swap contracts.
Derivatives are foreign currency forward contracts and interest rate swap contracts, which are used to manage
exposure to market risks from changes in foreign currency exchange rates of receivables and payables, andfrom changes in interest rates, respectively. Please see Notes 2.x and 14 for more detail about derivatives.
(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty's failure to repay or service debt according
to the contractual terms. The Group manages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment terms and balances of major customers to identify the default risk ofcustomers at an early stage.
Certificates of deposit and deposits at call are exposed to insignificant default risk because transactions arelimited to major financial institutions.
With respect to foreign currency forward contracts, the Group limits the counterparty to those derivatives tomajor financial institutions that can bear losses arising from credit risk.
Market risk management (risk of foreign exchange and interest rates)
Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations inforeign currency exchange rates. Such foreign exchange risk is hedged principally with foreign currency
forward contracts.
Interest expense associated with long-term debts is exposed to market risk resulting from changes in interest
rates. Such risk is hedged by interest rate swap contracts.
Foreign currency forward contracts are controlled under internal guidelines. The position related to particularconstruction contracts is identified and is reviewed monthly. Reconciliation of the transaction and balanceswith customers' confirmation replies is made, and the transactions related to foreign currency forward
contracts are executed and accounted for under internal guidelines.

- 29 -

Consolidated Financial Statements

28

Notes to Consolidated Financial Statements

Marketable and investment securities are managed by monitoring the market values and financial position ofissuers 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.

March 31, 2013

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 adequate volumes 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 notavailable, another rational valuation technique is used instead. Also, please see Note 14 for the detail of fairvalue for derivatives.
(a) Fair values of financial instruments
March 31, 2014
Carrying
AmountFair Value

Cash and cash equivalents
Short-term investments
Notes and accounts receivable
Costs and estimated earnings onlong-term construction contracts
Jointly controlled assets of joint venture
Investment securities¥ 145,303
64
56,502
16,503
127,466
18,591

16,503
127,466
18,591

Total¥ 364,431¥ 364,431

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

¥

¥

Total

¥ 162,212- 30 -

29

Millions of Yen

Consolidated Financial Statements

1,283
4
145,392
5,513
10,018¥ 145,303
64
56,502

1,283
4
145,392
5,513
10,018¥ 162,212

Unrealized
Gain (Loss)

Millions of Yen

Carrying
AmountFair Value

Cash and cash equivalents
Held-to-maturity securities—current
Short-term investments
Notes and accounts receivable
Costs and estimated earnings onlong-term construction contracts
Jointly controlled assets of joint venture
Investment securities¥ 180,229
2,400
226
37,917¥ 180,229
2,400
226
37,91727,477
94,696
21,33427,477
94,696
21,334

Total¥ 364,280¥ 364,280

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

¥

¥

Total

¥ 136,490

88
117,769
8,500
10,132

Unrealized
Gain (Loss)

88
117,769
8,500
10,132¥ 136,490

March 31, 2014
Carrying
AmountThousands of U.S. Dollars
Unrealized
Fair Value
Gain (Loss)

Cash and cash equivalents
Short-term investments
Notes and accounts receivable
Costs and estimated earnings onlong-term construction contracts
Jointly controlled assets of joint venture
Investment securities$ 1,410,712
622
548,564$ 1,410,712
622
548,564

160,227
1,237,539
180,501

160,227
1,237,539
180,501

Total$ 3,538,168$ 3,538,168

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

$

$

Total

$ 1,574,881

12,46443
1,411,574
53,527
97,271

12,46443
1,411,574
53,527
97,271$ 1,574,881- 31 -

Consolidated Financial Statements

30Notes to Consolidated Financial Statements

Cash and Cash Equivalents, Held-to-Maturity Securities—Current, Short-Term Investments, Notes andAccounts Receivable, and Costs and Estimated Earnings on Long-Term Construction Contracts
The carrying values of accounts mentioned above approximate fair value because of their shortmaturities.

(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
March 31, 2014

Jointly Controlled Assets of Joint Venture

Due in1 Yearor Less

The jointly controlled assets of the joint venture are jointly controlled 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 the stock exchange forthe equity instruments. The information of the fair value for investment securities by classification is
included in Note 5.
The above schedules do not include investment securities whose fair value cannot be reliably determined.

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs andestimated earnings on long-term construction
contracts
Jointly controlled assets of joint venture¥ 145,266
64
71,347
127,466¥ 1,658

Total¥ 344,144¥ 1,658

March 31, 2013

Short-Term Bank Loans, Notes and Accounts Payable—Trade and Income Taxes Payable
The carrying values of accounts mentioned above approximate fair value because of their shortmaturities.

Due in1 Yearor Less

Current Portion of Long-Term Debt (Bank Loans) and Long-Term Debt (Bank Loans)
The fair value of fixed rate loans is calculated by discounting total principal and interest payments topresent value using a discount rate equal to the rate that would be charged if the loan was newly
borrowed. The fair value of floating rate loans, which are subject to a specific method for interest rate
swaps, is calculated by discounting total principal and interest payments, which are handled together withinterest rate swaps, to present value using a discount rate equal to the rate that would be charged if theloan was newly borrowed.
Derivatives
The information of the fair value for derivatives is included in Note 14.

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- 32 -

31

Consolidated Financial Statements

Millions of Yen
Due after
Due after
5 Years
1 Yearthroughthrough
10 Years
5 Years

Cash and cash equivalents
Held-to-maturity securities—current
Short-term investments
Notes and accounts receivable, and costs andestimated earnings on long-term construction
contracts
Jointly controlled assets of joint venture¥ 180,1942,400
226
64,861
94,696

¥ 532

Total

¥ 342,378¥ 532

March 31, 2014(b) Carrying amount of financial instruments whose fair values cannot be reliably determined

Thousands of U.S. Dollars
Due after
Due after
5 Years
1 YearDue inthroughthrough
1 Year10 Years
5 Years
or Less

Thousands of
U.S. Dollars
2014

Millions of Yen
2014
2013

Millions of Yen
Due after
Due after
5 Years
1 Yearthroughthrough
10 Years
5 Years¥ 2,537¥ 2,403$ 24,633

2

2

28

7,183

4,686

69,743

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs andestimated earnings on long-term construction
contracts
Jointly controlled assets of joint venture$ 1,410,357
622
692,689
1,237,539$ 16,102

Total$ 3,341,209$ 16,102- 33 -

Consolidated Financial Statements

32

Notes to Consolidated Financial Statements

Please see Note 7 for annual maturities of long-term debt and Note 12 for obligations under finance leases.
14.

March 31, 2014

DERIVATIVES
Derivative Transactions to Which Hedge Accounting Is Not Applied

Contract
AmountMarch 31, 2014

Contract
AmountMillions of Yen
Contract
Fair
AmountValue
Due after(Loss)One Year

Foreign currency forward contracts:
Selling U.S.$/buying yen
Selling Euro/buying yen
Selling GBP/buying yen
Selling AUD/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying AUD/selling Euro
Buying TWD/selling U.S.$¥ 21,406
4,771
1,259
6,939
56
13
1,699
39

¥ 2

Total

¥ 36,185¥ 24

22

Unrealized
Gain (Loss)¥ (18 )(1 )

¥ (18)
(1)

13
8
5
(59 )

13
8
5
(59)

Foreign currency forward contracts:
Selling U.S.$/buying yen
Selling Euro/buying yen
Selling GBP/buying yen
Selling AUD/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying AUD/selling Euro
Buying TWD/selling U.S.$$ 207,829
46,327
12,22367,369552
126
16,502
387

$ 25

Total

$ 351,319$ 239

Foreign currency forward contracts:
Selling U.S.$/buying yen
Selling Euro/buying yen
Selling GBP/buying yen
Selling AUD/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen¥ 14,267
11,243
284
1,933
276
79

Total

¥ 28,085¥ (54 )¥ (54)

Millions of Yen
Contract
Fair
AmountValue
Due after(Loss)One YearHedged Item
Unrealized
Gain (Loss)¥ (15 )¥ (15)

¥ 36
51

(4 )
52
12

(4)
52
12

¥ 87

¥ 45

¥ 45

Foreign currency forward contracts—
Accounted for under deferred hedge
accounting method:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying Euro/selling U.S.$
Buying TWD/selling U.S.$
Buying KRW/selling U.S.$

Foreign currency
forecasted
transaction

Total
Other*1:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen

Interest rate swaps*2 (fixed rate payment,
floating rate receipt)

Receivables
PayablesLong-term debt

Total

33

Consolidated Financial Statements$ (181)
(18)
(6)
129
80
53
(574)
(9)

$ (525 )$ (525)

March 31, 2014

Total

- 34 -

213$ (181 )
(18 )
(6 )
129
80
53
(574 )(9 )Derivative Transactions to Which Hedge Accounting Is Applied

March 31, 2013

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

Millions of Yen
Contract
AmountDue after
Contract
One YearAmountFair
Value(Loss)¥ 9,921909
22
10,07484
4,029¥ 5,689
193

2,766¥ (405)
29
7
296
(1)
184

¥ 25,041¥ 13,978

¥ 111

¥

32
365
186

¥

584

5,329

¥ 10,000¥ 10,000¥ 10,000¥ 10,000- 35 -

Consolidated Financial Statements

34

Notes to Consolidated Financial Statements

March 31, 2013

March 31, 2014

Hedged Item
Foreign currency forward contracts—
Accounted for under deferred hedge
accounting method:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying SGD/selling yen

Foreign currency
forecasted
transaction

Total
Other*1:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying SGD/selling yen

Fair
Value
(Loss)¥ 1,863
4,489
584
221

¥

513
1,056
461

¥ (220)851
116
3¥ 7,158¥ 2,031¥ 752

Hedged Item
Foreign currency forward contracts—
Accounted for under deferred hedge
accounting method:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying Euro/selling U.S.$
Buying TWD/selling U.S.$
Buying KRW/selling U.S.$

Foreign currency
forecasted
transaction

Total
Receivables
PayablesTotal
Interest rate swaps*2 (fixed rate payment,
floating rate receipt)

Millions of Yen
Contract
AmountDue after
Contract
One YearAmountCurrent portion of
long-term debt

Total

¥

693
948
372
18

¥

101

¥ 2,032¥101¥ 10,000¥ 10,000¥ 10,000¥ 10,000

Other*1:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen$

96,3258,831
218
97,807816
39,122$

Receivables
PayablesLong-term debt

Total

55,234
1,877

26,858$ (3,936)
286
74
2,879
(19)
1,795

$ 135,710$ 1,079

51,740$ 243,120

Total
Interest rate swaps*2 (fixed rate payment,
floating rate receipt)

Thousands of U.S. Dollars
Contract
Fair
AmountValue
Due after
Contract(Loss)One YearAmount

$

311
3,551
1,811

$

5,674

$

97,087$97,087$97,087$97,087*1 Foreign currency forward contracts, which are applied to the foreign currency translation at the contract rate of
the assets and liabilities on construction contracts denominated in foreign currencies.
*2 Interest rate swap contracts accounted for under a specific method, are treated as part of the hedged long-term
debt thus, their fair values are integrally computed with those of the hedged long-term debt. See Note 13 for thefair value of long-term debt.
15.

CONTINGENT LIABILITIESAt March 31, 2014, the Group had the following contingent liabilities:
Millions of Yen
Guarantees on employees' housing loans
Performance bond for an unconsolidated subsidiary- 36 -

35

Consolidated Financial Statements

¥

89
1,907

Thousands of
U.S. Dollars$

871
18,520- 37 -

Consolidated Financial Statements

36

Notes to Consolidated Financial Statements

16.

COMPREHENSIVE INCOME

There is no dilutive effect for the year ended March 31, 2014.

The components of other comprehensive income for the years ended March 31, 2014 and 2013, were as follows:Year Ended March 31, 2013

Millions of Yen
2014
2013
Unrealized (loss) gain on available-for-sale securities:(Losses) gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred (loss) gain on derivatives under hedge
accounting:
Gains arising during the year
Adjustment to acquisition cost of assets
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments—
Adjustments arising during the year
Total
Share of other comprehensive income of associates
accounted for using the equity method—
Gains arising during the year
Total
Total other comprehensive (loss) income17.

¥ (2,619)

Thousands of
U.S. Dollars
2014$ (25,429)(2,619)955¥ 7,564
231
7,796(2,721 )¥ (1,664)¥ 5,075$ (16,156)(25,429)
9,273¥ 2,651(3,573)(2,729)(3,652)
1,410¥ 6,362(2,299 )(117 )
3,945(1,497 )$ 25,739(34,697)(26,503)(35,462)
13,693¥ (2,242)¥ 2,448$ (21,768)¥ 3,625¥ 1,081$ 35,194¥ 3,625¥ 1,081$ 35,194

¥

104

¥

85

$

1,016

¥

104

¥

85

$

1,016

¥

(176)

¥ 8,690$(1,713)NET INCOME PER SHARE
A reconciliation of the differences between basic and diluted net income per share ("EPS") for the years ended
March 31, 2014 and 2013, is as follows:Year Ended March 31, 2014

Basic EPS—Net income available
to common shareholders

Millionsof YenNet
IncomeThousandsof Shares
Weighted-Average
Shares¥ 13,447

259,030- 38 -

37

Consolidated Financial Statements

Yen

U.S. Dollars
EPS¥ 51.91

Basic EPS—Net income available
to common shareholders

Millionsof YenNet
IncomeThousandsof Shares
Weighted-Average
Shares

EPS¥ 16,077

259,053¥ 62.06

Yen

There is no dilutive effect for the year ended March 31, 2013.
18.

SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2014, was approved at the Company's shareholders'meeting on June 25, 2014:

Year-end cash dividends, ¥16.00 ($0.15) per share
19.

Millions of Yen

Thousands of
U.S. Dollars¥ 4,144$ 40,235

SEGMENT INFORMATION
Under ASBJ Statement No. 17, "Accounting Standard for Segment Information Disclosures" and ASBJ Guidance
No. 20, "Guidance on Accounting Standard for Segment Information Disclosures," an entity is required to reportfinancial 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 such information is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in 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 to allocate 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 being performed in order to decide how resources are allocatedwithin the Group. The Group globally provides "Engineering" services, including planning, engineering,
construction, procurement, commissioning, and maintenance, adapting the most appropriate functions of eachrelated company.
(2) Methods of Measurement for the Amounts of Sales, Profit (Loss), Assets, Liabilities, and Other Items for
Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, "Summaryof Significant Accounting Policies."
The profit in reporting segments is based on the operating income. Intersegment income and transfers aremeasured at the quoted market price.

$ 0.50- 39 -

Consolidated Financial Statements

38

Notes to Consolidated Financial Statements(3) Information about Sales, Profit (Loss), Assets, Liabilities, and Other Items

Year Ended March 31, 2014

Year Ended March 31, 2014
Reportable
Segment
Engineering

Millions of Yen
Other*1

Total

Reconciliations*2

Consolidated*3

Sales:
Sales to external customers
Intersegment sales or transfers¥ 441,615
14¥ 4,5326,280¥ 446,147
6,295¥ (6,295 )Total¥ 441,629¥ 10,813¥ 452,443¥ (6,295 )¥ 446,147

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Amortization of goodwill
Investment in associatedcompanies
Increase in property, plantand equipment andintangible assets

¥

¥

¥

¥

¥

20,788470,188
267,501
3,175
795

282
4,773
1,781
21
29

5,375
4,126

27

21,070474,961
269,283

8
326
7,973

¥ 446,147

21,079475,288
277,257

3,196
825

3,196
825

5,375

5,375

4,154

4,154

Other*1

Total

Sales:
Sales to external customers
Intersegment sales or transfers¥ 392,037
9¥ 6,881
8,504¥ 398,918
8,513¥ (8,513 )Total¥ 392,046¥ 15,385¥ 407,432¥ (8,513 )¥ 398,918

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Amortization of goodwill
Investment in associatedcompanies
Increase in property, plantand equipment andintangible assets

¥

¥

¥

¥

¥

2,593
5

Consolidated Financial Statements

22
35

1,151
9,215

- 40 -

39

Millions of Yen

Reportable
Segment
Engineering

848
4,874
1,943

25,348434,274
238,0732,616
41

Reconciliations*2(235 )
1,104
7,949
(36 )

1,151
43

9,259

Other*1

Total

Reconciliations*2

Consolidated*3

Sales:
Sales to external customers
Intersegment sales or transfers$ 4,287,526
142$

44,00460,978$ 4,331,530
61,120$ (61,120 )Total$ 4,287,668$ 104,982$ 4,392,651$ (61,120 ) $ 4,331,530

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Amortization of goodwill
Investment in associatedcompanies
Increase in property, plantand equipment andintangible assets

$

$

$

$

201,825
4,564,932
2,597,104
30,825
7,725

2,740
46,34417,300208
291

52,186
40,061

269

204,566
4,611,277
2,614,404

84
3,174
77,414$ 4,331,530$

204,651
4,614,451
2,691,819

31,034
8,016

31,034
8,016

52,18652,18640,33140,331

Notes for the year ended March 31, 2014:*1 "Other" represents industry segments, which are not included in the reportable segment, consisting of
temporary staffing services and travel services.

Year Ended March 31, 2013

24,499429,400
236,130

Thousands of U.S. Dollars

Reportable
Segment
Engineering

Consolidated*3¥ 398,918

25,113435,379
246,0232,580
41*2 The detail of the reconciliations is as follows:(1) The reconciliation in segment profit of ¥8 million ($84 thousand) is the elimination of intersegment
trades.
(2) The reconciliation in segment assets of ¥326 million ($3,174 thousand) is the result of the eliminationof intersegment trades of ¥(2,047) million ($(19,881) thousand) and the Group's assets of¥2,374 million ($23,056 thousand), which are not included in the reportable segment.
(3) The reconciliation in segment liabilities of ¥7,973 million ($77,414 thousand) is the result of theelimination of intersegment trades of ¥(2,026) million ($(19,672) thousand) and the Group's liabilitiesof ¥10,000 million ($97,087 thousand), which are not included in the reportable segment.
*3 The calculation of the segment profit is based on the operating income in the consolidated statement ofincome.

1,151(300 )

8,958- 41 -

Consolidated Financial Statements

40Notes to Consolidated Financial Statements

Notes for the year ended March 31, 2013:

Year Ended March 31, 2013

*1 "Other" represents industry segments, which are not included in the reportable segment, consisting of
temporary staffing services, IT services, and travel services.
*2 The detail of the reconciliations is as follows:(1) The reconciliation in segment profit of ¥(235) million is the elimination of intersegment trades.
(2) The reconciliation in segment assets of ¥1,104 million is the result of the elimination of intersegment
trades of ¥(2,066) million and the Group's assets of ¥3,170 million, which are not included in thereportable segment.
(3) The reconciliation in segment liabilities of ¥7,949 million is the result of the elimination ofintersegment trades of ¥(2,050) million and the Group's liabilities of ¥10,000 million, which are notincluded in the reportable segment.
(4) The reconciliation in depreciation of ¥(36) million is the elimination of intersegment trades.

Millions of Yen
Japan
Malaysia
Papua New Guinea
Australia
Others¥ 150,800
83,685
66,14344,55953,729Total¥ 398,918

Note: Revenue is classified in countries or regions based on location of construction site.
(b) Property, plant and equipment
Year Ended March 31, 2014
Millions of Yen

Thousands of
U.S. Dollars

Japan
Asia
Others¥ 12,454
1,746
757$ 120,914
16,957
7,354

Total

¥ 14,958$ 145,226(5) The reconciliation in increase in property, plant and equipment and intangible assets of ¥(300) million
is the elimination of intersegment trades.
*3 The calculation of the segment profit is based on the operating income on the consolidated statement ofincome.
Related Information(1) Information about Products and Services

Year Ended March 31, 2013

The proportion of engineering business is more than 90% of the total sales of the Group. Accordingly, thepresentation of the information about each service is not required under Japanese accounting standards.
(2) Information about Geographical Areas(a) Revenue
Year Ended March 31, 2014
Millions of Yen

Thousands of
U.S. Dollars

Japan
Australia
Papua New Guinea
Malaysia
Others¥ 128,743
114,894
68,99053,38080,138$ 1,249,936
1,115,482
669,810518,254778,046

Total¥ 446,147$ 4,331,530- 42 -

41

Consolidated Financial Statements

Millions of Yen
Japan
Asia
Others¥ 12,935
1,377
234

Total

¥ 14,547(3) Information about Major Customers
Year Ended March 31, 2014
Name

Related Segment

Millions of Yen

Thousands of
U.S. Dollars

Ichthys Lng Pty Ltd.
Esso Highlands Ltd.
Tokuyama Malaysia Sdn. Bhd

Engineering
Engineering
Engineering¥ 109,964
68,78849,934$ 1,067,617
667,847
484,804- 43 -

Consolidated Financial Statements

42Independent Auditor’s Report

Notes to Consolidated Financial Statements

Year Ended March 31, 2013
Name

Related Segment

Millions of Yen

Tokuyama Malaysia Sdn. Bhd
Esso Highlands Ltd.
Ichthys Lng Pty Ltd.

Engineering
Engineering
Engineering¥ 82,921
65,15942,185(4) Information about Goodwill by Segments
Ending balance of goodwill as of March 31, 2014 and 2013, was as follows:
Millions of Yen
2014
2013

Thousands of
U.S. Dollars
2014

Engineering
Other*¥ 11,930
464

¥ 180
494

$ 115,829
4,513

Total

¥ 12,395¥ 675$ 120,343* Other involves temporary staffing services.

******- 44 -

43

Consolidated Financial Statements

Consolidated Financial Statements

44

Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japan
Tel: (81)45-225-7777 (voice guidance)
http://www.chiyoda-corp.com/en/

CORPORATE PHILOSOPHY
Enhance our business in aiming for harmony
between energy and the environment,
and contribute to the sustainable development ofa society as an integrated engineering company
through the use of our collective wisdom andpainstakingly developed technology.
(As of August 2014)

Selected in FTSE Group’s responsible
investment index