ANNUAL REPORT FY2011
For the year ended March 31, 2012

Financial Highlights
Years Ended March 31, 2012, 2011, 2010, 2009 and 2008

2012

2011

2010

2009

2008

Revenues¥254,675¥247,082¥312,985¥446,438¥603,559

Since its establishment in 1948, Chiyoda Corporation has engaged

Cost of revenue

215,783

215,563298,766

427,461

583,035

in engineering and construction work and services at innumerable

Operating income

24,197

17,544

1,702

7,227

8,839

industrial plants both in Japan and overseas in the fields of oil,

Income before income taxes
and minority interests

23,543

11,476

4,714

9,651

18,991

Net income

14,364

7,979

2,953

6,498

9,640

For the Year (Millions of Yen)

Profilenatural gas and other energy sources; petrochemicals and chemicals;
pharmaceuticals; and general industrial machinery.
Forty years ago in 1972, Chiyoda’s founder was alreadyAt Year-End (Millions of Yen)emphasizing in a booklet entitled Legacy for the Twenty-first Century

Total assets¥365,795¥353,392¥328,174¥357,816¥378,819

that sustainable social development should progress by harmonizing

Total equity

168,737

155,758

149,253

145,917

81,637

165.5

173.8

175.2

161.1

115.0

nature and industrial development.
We were one of the first companies to state our intention tocontribute to sustainable social development through our engineering

Current ratio (%)

Per Common Share (Yen )and technology by providing appropriate solutions to the various

Earnings per share (EPS)¥55.44¥30.79¥11.39¥25.58¥50.15energy and environmental issues we currently face, and have beenBook value per share (BPS)

648.95599.15

573.61561.12422.24

putting those words into action ever since. This booklet is available on

Dividends per share

17.0

11.0

3.5

7.5

10.0

Return on assets (ROA)

6.6

4.6

1.4

3.1

4.7

Return on equity (ROE)

8.9

5.3

2.0

5.7

12.2

our website.

Ratios (%)

With over 60 years of technological experience, Chiyoda is working
to build on its position as the “Reliability No. 1” project company
with a high level of customer and investor trust, not only in terms of

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

technology but also in terms of our people and management. At thesame time, we will continue to improve our financial strength and toraise our corporate value.

Revenues

Contents

Billions
Billionsofyen
yenBillions
ofofyenBillions
Billionsofyen
yenBillions
ofofyen

800
800
800

3030
30

3030
30

600
600
600
500
500
500

02 At a Glance

400
400
400

03 To Our Stakeholders

300
300
300

04 Management’s Discussion and Analysis

200
200
200

00 0

08 Corporate Governance

24.2
24.2
24.2

2525
25

603.6
603.6
603.6

2020
20

446.4
446.4
446.4
313.0
313.0
313.0

17.5
17.5
17.5

2020
20

14.4
14.4
14.4

1515
15

254.7
254.7
247.1
247.1254.7
247.1

1010
10
55 5

100
100
100

06 Topics

Net Income

Billions
Billionsofyen
yenBillions
ofofyen

700
700
700

01 Financial Highlights

Operating Income

2008
2008 20092009
2009 201020102010 2011
2011
2011 2012
2012
2012
2008

00 0

8.8
8.8
8.8

1010
10

7.2
7.2
7.2

8.0
8.0
8.0

6.5
6.5
6.5
3.0
3.0
3.0

1.7
1.7
1.7
2008
2008 20092009
2009 201020102010 2011
2011
2011 2012
2012
2012
2008

9.6
9.6
9.6

00 0

2008
2008 20092009
2009 201020102010 2011
2011
2011 2012
2012
2012
2008

10 Corporate Information
12 Board of Directors, Corporate Auditors and Executive Officers
13 Stock Information
Courtesy of Mizushima LNG Co., Ltd.

Forward-Looking Statements: This annual report contains forward-looking statements about Chiyoda Corporation’s outlooks, plans, forecasts, results and other items that may takeplace in the future. Such statements are based on data available as of July 1, 2012. Unknown risks and other uncertainties that happen in the future may cause our actual results to bedifferent from the forward-looking statements contained in this report. The risks and uncertainties include business and economic conditions, competitive pressure, changes in laws andregulations, addition or elimination of products, and exchange rate fluctuation, among others.

CHIYODA CORPORATION ANNUAL REPORT FY2011

1

At a Glance

To Our Stakeholders(Billions of yen)

Revenues

New Orders

16

14

21

36

8

13

8
19

Backlog of Contracts

5

14

68

65

254.7

612.5

840.9

91.9 (36%)

417.7 (68%)

548.6 (65%)

46.3 (8%)

117.8 (14%)

Billion yen

Billion yen*3Takashi Kubota

Billion yen

LNG

President & CEO
Chiyoda Corporation*4

Gas Processing*1

48.3 (19%)*5Fine Industries*2

53.6

86.6

(21%)

(14%)

108.8

(13%)

*6

Petroleum and Petrochemicals

40.7

47.8

(16%)

45.1

(8%)

(5%)
*7

Others20.1 (8%)

14.1 (2%)

20.7 (2%)

Overseas Projects under Execution

EPC* / EPCm** Execution
FEED*** / Feasibility Study

Yamal
Russia / LNG

Arzew
Algeria/LNG

Al Jubail Export Refinery
Saudi Arabia / Oil Refinery
Industrial Wastewater Treatment
Saudi Arabia / Water Recycling

term business plan entitled “Engineering

this past fiscal year.

Excellence, Value Creation 2012,” and one year

I would like to present the Chiyoda

has passed since we implemented the plan’sGroup’s annual report for the fiscal year ended

various measures that form the foundation

March 31, 2012.

for future growth. In the years ahead, we

In the fiscal year under review, thewill bring these measures to a successful

Chiyoda Group leveraged its long experience

conclusion and the entire Chiyoda Groupin large-scale LNG plant projects and put it to

management team and staff will work eagerly

use in ongoing projects in Papua New Guinea

to further raise corporate value.

and Australia. In this way, the Group was able

We paid a dividend of ¥17 per share, in

to exceed its initial earnings target thanks toline with our earnings for fiscal 2011. I ask

the steady execution of construction projects

all of our shareholders for their continued

and strong efforts made to win new orders.

support in our ongoing efforts.

Despite continuing uncertainties
such as the impact of the Great East Japan
Earthquake and the appreciating Japanese

Map Ta Phut Industrial Complex
Thailand / Energy Saving
Nickel Refining Plant
Philippines / Material
Tokuyama Phase-1/2
Malaysia / Renewable Energy Material
Bintulu Tr.9
Puerto La Cruz
Malaysia / LNG
Venezuela / Oil Refinery
PNG LNG
Papua New Guinea / LNG

Plateau Maintenance Project
Qatar / LNG
Long Term Service Agreement( RasGas / Qatargas )Qatar / LNG
Stolthaven
Singapore/ Tank terminal
Shell Bukom
Singapore/Refinery
Infenium
Singapore/Chemical

Thank you for your continued support overIchthys LNG
Australia / LNG
Browse LNG
Australia /LNG

Arrow LNG
Australia / LNG

yen, demand for energy and resources has

Takashi Kubota

been firm and large investments are moving

President & CEO
Chiyoda Corporation

forward. Against this backdrop, we received
our largest ever LNG plant order and a newenergy-related plant order for Southeast Asia.
We are now in the third year of our medium-

EPC*: Engineering, Procurement and Construction
EPCm** : Engineering, Procurement and Construction management
FEED*** : Front-end Engineering and Design*1: Classified as “Gas and power utilities” in “Consolidated Financial Results” *2: Classified as “Industrial machinery” and “General chemicals” 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 FY2011

CHIYODA CORPORATION ANNUAL REPORT FY20113

Management’s Discussion and Analysis
Results of Operations
Analysis of Results
During the fiscal year under review, although energy demand remained solid in some parts of the world, notably
in emerging economies, the impact of the European debt crisis became more widespread toward the second
half of the year. In Japan, recovery and reconstruction of production and supply systems following the Great East
Japan Earthquake got underway, but the pace of economic recovery remained modest.
Growing demand stemming from the shift away from oil to gas resulted in a surge in planned investment,
and the strong yen encouraged Japanese manufacturing companies to expand their operations overseas.
Faced with these conditions, we placed particular focus on bidding activities, making the most of ourtechnological superiority in the market. We concluded contracts for Engineering, Procurement, and Construction(EPC) work for an LNG plant in Australia, and for the second-stage of polycrystalline silicon EPC work in Malaysia.
At the same time, we made sure to execute the projects under construction steadily, including the LNG plant
project in Papua New Guinea, and we also sought to improve operating income primarily by reviewing the costfor completed works during the warranty period.
As a result, consolidated new contracts for the fiscal year under review amounted to 612,530 million yen(160.4% increase year on year). The consolidated contract backlog was 840,943 million yen (69.0% increase).
Consolidated revenues amounted to 254,675 million yen (3.1% increase), while operating income amounted to24,197 million yen (37.9% increase), ordinary income amounted to 23,793 million yen (51.2% increase), and net
income for the period amounted to 14,364 million yen (80.0% increase).

Results by Business Segment

LNG Plants/Gas and Power Utilities

Petroleum, Petrochemicals and Gas Chemicals
Overseas, the Group brought resources to bear on planned investment projects in petroleum refineries and otherventures in the Middle East and Southeast Asia. We steadily executed EPC work for heavy oil cracking unit in Saudi
Arabia and EPCm works for petroleum refineries in Singapore. The Group also received orders for the delivery of
furnaces for a petroleum refinery in Iraq and Engineering, Procurement support, and Construction management(EPsCm) services for heavy crude oil upgrading facilities for a petroleum refinery in Venezuela. Also in the
petrochemical field, we met the needs of the growing Asian market, receiving orders for EPCm services in Thailand
and EPC services in Singapore.

4

CHIYODA CORPORATION ANNUAL REPORT FY2011

Industrial Machinery/Environment/General Chemicals and Other Fields
In new business fields, the Group steadily executed works such as EPC work for polycrystalline silicon plant in
Malaysia, the product of which is used for photovoltaic cell, and a nickel refinery in the Philippines. We were also
awarded a contract for EPC work for the second-stage of the polycrystalline silicon plant to follow the first stage
EPC work under execution by our Group in Malaysia. In Japan, we completed and delivered the expansion work
for a nonferrous metals plant and manufacturing plants for highly-functional batteries. Since more and more
Japanese companies are entering the Southeast Asian markets to benefit from the strong yen and the economic
growth in Asia, the Group has been reinforcing efforts to meet the needs of those companies. We entered into a
cooperation agreement for concentrated solar power (CSP) generation with leading Italian manufacturer of solar
receiver tubes, a key component for next-generation CSP generation (solar thermodynamic plants using molten
salt parabolic trough technology) and have subsequently started to construct a pilot plant in Italy.
In the pharmaceutical field, the Group steadily executed EPC work for the manufacturing facilities of highlybioactive pharmaceuticals, such as anti-cancer drugs. We were also awarded a contract for EPC work for a bulk
vaccine plant and pharmaceutical formulation plant.
For infrastructure projects overseas, the Group started a project to investigate energy savings in a large
industrial complex in Thailand, in addition to a feasibility study of an integrated wastewater treatment project fora large industrial complex in Saudi Arabia. In relation to the social infrastructure business, the Group participatedin the Study on a Masterplan for Establishing a Metropolitan Priority Area for Investment and Industry in the
Jabodetabek Area in Indonesia. In addition, we plan to start looking into similar study projects in other ASEAN
member countries.

Major contracts included in the consolidated results for the period
Overseas

Domestic

LNG plant in Papua New Guinea
First-stage of polycrystalline silicon plant in Malaysia
Feed gas preparation work for Qatar Pearl GTL*
Heavy crude oil cracking unit in Saudi Arabia▲▲▲▲ ▲▲▲▲▲The Group is currently executing 3 Front End Engineering and Design (FEED) works for projects in Australia andwe have been awarded the EPC work for one of them, the value of which is one of the largest in the company's
history. We were also awarded a contract for the basic design works for an LNG plant in Malaysia jointly with
Saipem S.p.A., the company we concluded a cooperation agreement with to develop onshore LNG and upstream
projects. While the Group completed EPC work for feed gas preparation in Qatar, the Group’s subsidiary in
Qatar also won a new long-term service contract, undertaking renovation and repair work for the LNG andgas processing plants that were originally constructed by the Chiyoda Group, and providing Engineering,
Procurement, and Construction management (EPCm) services for helium extraction facilities.
In Japan, the Group undertook marketing activities to receive new orders for LNG receiving terminals, andwas awarded a new contract for the construction of an LNG receiving terminal. We also proceeded steadily withbacklog projects, including the construction of several LNG receiving terminals.

In Japan, the Group successfully completed the partial replacement of an atmospheric distillation tower
by applying a unique construction method patented by the Group, as well as construction work at benzene
extraction facilities. We also made a concerted effort to quickly restore facilities that had been damaged by
the Great East Japan Earthquake. In addition, we were awarded several contracts aimed at improving thecompetitiveness and energy saving of petroleum refineries.

Naoetsu LNG receiving terminal for INPEX Corporation
Liquefied petroleum gas underground storage terminal for Japan Oil, Gas and Metals National Corporation
Joetsu LNG receiving terminal for Chubu Electric Power Co. Inc
CIS Solar Cell Factory No. 3 for Solar Frontier K.K.*
Reconstruction of ground facilities damaged by Great East Japan Earthquake at Kuji National Oil Storage Base for Japan
Underground Oil Storage Co., Ltd.
* : Projects completed during the period.

Outlook for the Next Fiscal Year
Chiyoda will continue to promote its sales activities and win contracts in the areas where Chiyoda can best leverage its
technological advantages. We will also continue to work diligently on the execution of existing projects including the large
project in Papua New Guinea and other projects overseas and domestic.
In consideration of these circumstances, and assuming an exchange rate of ¥80/dollar, our forecasts for the fiscal year
ending March 31, 2013 include 350.0 billion yen in new consolidated contracts and 430.0 billion yen in revenues. Our
forecast for the consolidated operating income is 22.5 billion yen, consolidated ordinary income is 23.0 billion yen,and the consolidated net income is 15.0 billion yen.

CHIYODA CORPORATION ANNUAL REPORT FY2011

5

Topics
JKC Joint Venture Awarded Contract for Ichthys LNG Project
A contract signing ceremony was held on February
9, 2012 for the Engineering, Procurement andConstruction (EPC) of the Ichthys LNG Project. The
project involves the liquefaction of natural gas
produced from the Ichthys gas-condensate field,
located in offshore Western Australia, which willthen be transferred to the onshore LNG plant withstorage, shipping, and other related facilities to bebuilt in Darwin in the Northern Territory of Australia.
The LNG plant will produce and ship 8.4 million
tonnes of LNG and 1.6 million tonnes of LPG perannum. The EPC contract was awarded to a joint venture (JKC JV) formed by JGC Corporation, KBR
Inc. of the United States, and Chiyoda Corporation. The total value of the EPC contract is the largest
ever in Chiyoda Corporation’s history.
A unique and challenging aspect of the Ichthys LNG Project is the fully modularised
construction strategy, which serves to minimize onshore construction activities at the construction
site in Darwin. This will require the high-level engineering, schedule control and project
management skills of the JKC JV. This is a long-term five-year project and we are fully committed toits on-time completion.

Contract signing ceremony

Chiyoda Awarded EPC Contract for the Second-Stage of
Polycrystalline Silicon Plant by Tokuyama Group
Chiyoda Corporation and Chiyoda Group company, Chiyoda
Sarawak Sdn. Bhd.1, have been jointly awarded a contract
to provide the Engineering, Procurement, and Construction
work for the second-stage of a polycrystalline silicon plant
for Tokuyama Malaysia Sdn. Bhd. 2
The project involves the construction of a plant (annual
production: 13,800 tons) for producing polycrystalline silicon,
the raw material for photovoltaic cells. Chiyoda Corporation
and Chiyoda Sarawak will work concurrently with the EPC for
the first-stage of the polycrystalline silicon plant, awarded in2010.

Tokuyama Corporation’s president Kogo and Chiyoda Corporation’s president
Kubota painting in the eye of a daruma doll
1. Chiyoda Sarawak Sdn. Bhd. (located in Sarawak, Malaysia) is a wholly owned subsidiary of Chiyoda Corporation.
2. Tokuyama Malaysia Sdn. Bhd. (located in Sarawak, Malaysia) is a wholly owned subsidiary of Tokuyama Corporation.

6

CHIYODA CORPORATION ANNUAL REPORT FY2011

Chiyoda Collaborates with Three Overseas Companies
in Non Hydrocarbon and Other Fields
To diversify and further develop its business, Chiyoda Corporation entered into
collaboration agreements with Saipem S.p.A. and Archimede Solar Energy (ASE)in June 2011 and with CTCI Corporation in August 2011.
Chiyoda and Saipem will collaborate as an integrated joint venture on
onshore LNG and upstream projects and expand business in strategic markets bycombining the expertise and technologies developed by both companies.
Chiyoda and ASE will collaborate on developing the business of nextgeneration concentrated solar power (CSP) generation. By combining the
Pilot plant light-gathering equipment (Sicily, Italy)technology for producing solar receiver tubes that only ASE can provide, with the(Photo courtesy of ASE and ENEL SpA)
project management experience in the Middle East of Chiyoda, we will createbusiness opportunities using a technology and business solutions-based approach in the Middle East, North Africa, andItaly, areas suitable for CSP generation due to their large amounts of solar radiation.
Chiyoda and CTCI will cooperate in various fields throughout the world including infrastructure, new energy,
environmental technology, and industrial facilities by sharing each other’s technological expertise and human resourcesin the field of non hydrocarbon projects. In addition, on August 17, 2011, Chiyoda acquired approximately 10% of thetotal issued shares of CTCI to help solidify this partnership and will work to raise the corporate value of two companies.
*Saipem S.p.A. (Italy) is a global engineering company that provides engineering, procurement, construction (EPC), and project management services for onshore and offshore projects.
*ASE (Italy) is the only worldwide producer of commercially-available solar receiver tubes for the key components of solar thermodynamic plants run with parabolic trough technology,
which uses sodium and potassium nitrate (molten salts) as their heat transfer fluid.
*CTCI (Taiwan) is the largest engineering company in Taiwan and provides EPC services for various industrial facilities throughout the world.

Relocation and Integration of
Headquarters at Yokohama Minato Mirai
To improve work efficiency, our head office functions, which had beendispersed between the Tsurumi, Koyasu, and Kawasaki offices, were integrated
in June 2012 as our new global headquarters at Minato Mirai Grand Central
Tower. The R&D Center and Group companies will continue to use the Koyasu
Office and Research Park. All executives and employees will strive to raise
work efficiency and will carry out their duties at the new consolidated office.

Chiyoda Global Headguarters
Minato Mirai Grand Central Tower

CHIYODA CORPORATION ANNUAL REPORT FY2011

7

Corporate Governance

The following paragraphs describe the current status of corporate governance at the Chiyoda Group:
Corporate Governance System

Corporate Governance and Internal Controls
General Shareholders’ Meeting
Election

Submit/ReportSupervision

Election

Election

Submit/Report

Executive Officers
Executive Officer Meeting
Scheduled Reports(deliverables, etc.)

Group
Companies

Audit Referral(advice)

Operational Auditing Unit

Department Internal Controls

Business Execution Departments(Risk Manager)
Self-Assessment

Election

ReportAccounting
AuditorInternal Controls Management Committee

ReportSubmit/Report

ReportCorporate Auditors
Audit Committee
Survey, Report Request

Audit

4 Representative Directors
Executive Committee

Organization Staffing

Election

ReportDirectors
Board of Directors

SQE Risk Management Unit

Global Operation Unit
Corporate Planning Unit
Corporate Services Unit, HRM* Unit
Finance & Project Audit Unit

CSR Unit
Crisis Manager*HRM: Human Resource Management(departments with internal
control functions)

The Chiyoda Group recognizes that management focuses on corporate social responsibility (CSR) that inspires the
support and trust of shareholders, customers, employees, and other stakeholders. We believe that this is a foundation of
our corporate activities. As such, we work toward sustainable long-term qualitative growth, continuing to improve ourmanagement basics, and ensuring management soundness and transparency. We have identified improved corporate
governance and stronger internal controls structure as important issues for our company. We are working to make real
progress in these areas.

Financial
Audit

Overview and Rationale for Adoption of Corporate Governance System
The Chiyoda Group’s corporate governance system includes a board of directors, corporate auditors/corporate
audit committee, external auditors, and a system of internal controls. We adopted a system of executive officers
who are responsible for the execution of business operations. Executive officers are functionally separate fromdirectors, who are responsible for management supervisory functions. Executive officers regularly report thestatus of business operation execution in a (monthly) executive committee meeting that is also attended by the
directors.
The Board of Directors (meeting monthly) is made up of nine directors, four of whom are representative
directors. The Board of Directors oversees executive officers in their execution of business operations, ensuringthat decisions related to important matters to the Company are rationally and efficiently carried out. The Board
delegates a portion of its authority to the Executive Committee to ensure that decisions related to the executionof business operations are implemented quickly in order to respond appropriately to rapidly changing social andeconomic conditions.
The Executive Committee is made up of four representative directors who make decisions delegated tothem with respect to the execution of business operations. In addition, the Executive Committee also performs
preliminary deliberations regarding matters to be brought before the Board of Directors for resolution.
The Chiyoda Group employs three corporate auditors, all of whom are outside corporate auditors, and two ofwhom serve on a full-time basis. Corporate auditors are responsible for auditing the state of execution of director
duties. Of the outside corporate auditors, two are independent auditors, and one corporate auditor is extensively
versed in finance and accounting.

Status of Internal Controls System
The Company has structured and is operating the following system of internal controls for the purpose ofoperational effectiveness/efficiency, financial reporting reliability, legal compliance, and asset preservation,according to the unique nature and characteristics of our business.

Internal Controls Management Committee
The Company has established an Internal Controls Management Committee to improve our systems of internal controls.
The director over the Operational Auditing Unit serves as the committee chair, and heads of departments related to internal
controls serve as committee members.
The Internal Controls Management Committee receives referrals from the Executive Committee to exchange
information and coordinate with each department to determine whether operations are appropriately and efficiently carriedout under an adequate system of internal controls. At the end of the fiscal period (or as deemed necessary), the Internal
Controls Management Committee offers advice regarding internal controls improvement to the Executive Committee.
The Executive Committee takes advice from the Internal Controls Management Committee under consideration,
submitting proposed internal controls improvements to the Board of Directors for decision.

8

CHIYODA CORPORATION ANNUAL REPORT FY2011

External Directors and Outside Corporate Auditors

Status of Internal Auditing and Auditing by Corporate Auditors
The Company employs three outside corporate auditors, and does not elect external directors.
The names of outside corporate auditors and the Company’s rationale for selecting them (including therationale for designation as independent directors of Hiroshi Ida and Yukihiro Imadegawa, both on file with theTokyo Stock Exchange as independent directors) are as follows.
Name
Hiroshi Ida

Munehiko Nakano

Yukihiro Imadegawa

Rationale for Election as Outside Corporate Auditor
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 executive officer with Mitsubishi UFJ Trust and Banking Corporation.
<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 corporate auditor having no conflict of interest with general Company shareholders.
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.
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 corporate auditor having no conflict of interest with general Company shareholders.

There are no particular relationships of interest between Company and outside corporate auditors.

Rationale for Adoption of Current System
The Board of Directors supervises the performance of executive officers and determines important mattersconcerning the Company. The Company employs three corporate auditors, all of whom are outside corporate
auditors. This leads to a stronger monitoring function over management. The Company employs dedicatedstaff to assist corporate auditors in their duties, and has set in place a system for coordination between external
auditors and corporate auditors and between corporate auditors and the Operational Auditing Unit. This systemof coordination ensures the viability of audits. Having three outside corporate auditors participating in audits as in
the current system ensures that management oversight functions in a fully objective and neutral fashion.
Director Compensation, Etc.

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

9¥184 million¥64 million¥51 million

Corporate Auditors

4¥ 77 million--

Notes:
1. Total director compensation is ¥300 million. Total corporate
auditor compensation is ¥77 million. Total outside corporate
auditor (three individuals) compensation is ¥55 million.
2. The number of directors above discloses the number of
directors and corporate auditors receiving compensation
during the fiscal period, including one director who retired
as of the 83rd General Shareholders’ Meeting held June 23,
2011.

CHIYODA CORPORATION ANNUAL REPORT FY2011

9

Corporate Information (As of March 31, 2012)
Corporate Data

Global Network

Chiyoda Global Headquarters

Number of Employees

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

1,361 (Non-Consolidated)
4,530 (Consolidated)

Annual Fiscal Close

EstablishedMarch 31January 20, 1948

Shareholders’ Meeting

Paid-in Capital

June

Chiyoda's Global Network¥ 43,396 million

Organization Chart(As of July 1, 2012)

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 theentire life cycles of projects – from project planning, engineering, procurement and construction through to operationand maintenance. 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.

Board of Directors

Corporate Auditors Committee

Corporate Planning Unit
IR & Public Relations Sec.
Corporate Services Unit
HRM*2 Unit
Finance & Project Audit Unit
Legal Sec.
Executive Office Unit
Business Development Division
Strategic Business Planning &Administration Unit
Corporate Relations Sec.
Business Development Unit 1
Business Development Unit 2
Business Development Unit 3

10

CHIYODA CORPORATION ANNUAL REPORT FY2011

Project Execution Base

Chiyoda & Public Works Co., Ltd.
Beijing Office

SQE Risk Management Unit
Operational Auditing Unit
Work Process Innovation Task Team

Global Project Management Division
Project Administration Unit
Project Management Unit
IT Management Unit
Global Operation Unit

Korea Representative OfficeInternational Gas & LNG Project Unit
Strategic Project Development Unit
Project TeamThe Netherlands
Italy

Saudi Arabia

Technology & Engineering Division
Technology Planning &Administration Unit
Research Institute of Technology
Innovation & Strategy
Engineering Operation Unit
Gas & LNG Process Engineering Unit
Refinery, Petrochemical & New Energy
Process Engineering Unit
P&ID and Utility Engineering Unit
Integrity Management Unit
Mechanical Engineering Unit
Control System Engineering Unit
Electrical System &Smart Grid Engineering Unit
Piping Engineering Unit
Civil Engineering Unit

PLC Planning & Administration Unit
Procurement &Logistics Management Unit
Construction Unit
Commissioning Unit

Chiyoda International Corporation

Chiyoda Corporation (Shanghai)

Gas & LNG Project Operations

Korea
Qatar

China
India

UAE

Downstream & Non Hydrocarbon
Project Operations
Oil & Petrochemical Project Unit
Gas & Storage Project Unit
International Downstream &Non-Hydrocarbon Project Unit
Project TeamGPM-A*3

Japan<Chiyoda Global Headquarters>

MyanmarPhilippines
Thailand
Malaysia
Singapore

USA

Chiyoda Philippines Corporation

Indonesia
BrazilAustralia

Chiyoda Oceania Pty Limited

Infrastructure Project Operations
Jakarta Office

IP Planning & Administration Unit
Strategic Business &Investment Management Unit
Technology Development Unit
Research & Development Center
Green Infrastructure Project Unit
Pharmaceutical &Environmental Project Unit

Project Logistics & Construction Division*1 BPM: Business Process Management*2 HRM: Human Resource Management*3 GPM-A: Global Project Management-Asia

Procurement Center

Milan Representative Office

President

Corporate Planning, Management &Finance Division

Engineering Center

The Hague Representative Office

Executive Committee

CSR Unit
BPM*1 TeamSales Base

ChAS Project Operations

PT. Chiyoda International Indonesia
Singapore Human Resources Office
Chiyoda Singapore (Pte) Limited
Chiyoda Malaysia Sdn. Bhd.
Chiyoda Sarawak Sdn. Bhd.

Chiyoda do Brasil Representações Ltda.

Chiyoda (Thailand) Limited
L&T-Chiyoda Limited
Abu Dhabi Office
Middle East Headquarters Doha Office
Chiyoda Almana Engineering LLC
Chiyoda Petrostar Ltd.

CHIYODA CORPORATION ANNUAL REPORT FY2011

11

Board of Directors, Corporate Auditorsand Executive Officers (As of July 1, 2012)

Stock Information

Board of Directors
Representative Directors / Members of Executive Committee

Directors

President & CEO

Takashi Kubota

Senior Vice President

Kazuo Obokata

Senior Executive Vice
President

Yoichi Kanno

Senior Vice President

Shogo Shibuya

Executive Vice
President & CFO

Masahito Kawashima

Senior Vice President

Ryosuke Shimizu*1

Executive Vice
President

Hiroshi Ogawa

Senior Vice President

Katsuo Nagasaka*1

Director

Kazushi Okawa

Hiroshi Ida*

Munehiko Nakano* *1/ 2

Stock Code12,668

Capital Stock Issued

Number of Share per Unit

ISIN:
SEDOL1:TSE:

260,324,529

1,000

JP3528600004
6191704 JP
6366

Transfer Agent of Common Stock

Major Shareholders

Yukihiro Imadegawa*2

Executive Officers

Number of Shareholders

650,000,000

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

Corporate Auditors
2

Authorized Shares

Numberof Shares Owned(Thousands of Shares)

Ratio
Shares Owned(%)

Mitsubishi Corporation

86,931

33.39

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

15,184

5.83

Japan Trustee Services Bank, Ltd. (Trust Account)

9,236

3.54

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

9,033

3.47

The Mitsubishi UFJ Trust and Banking Corporation

8,032

3.08

Morgan Stanley & Co. LLC

4,908

1.88

JP Morgan Securities Japan Co., Ltd.

2,878

1.10

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,759

1.06

The Bank of New York, Treaty Jasdec Account

2,735

1.05

State Street Bank and Trust Company 505225

2,663

1.02

Breakdown by shareholder

Executive Vice
President

Satoru Yokoi

Vice President

Kenji Hotta

Senior Vice President

Masahiko Kojima

Vice President

Eisaku Yamashita

10.25
Total Number of
Shares Issued:

260,325
thousand

Senior Vice President

Kenjiro Miura

Vice President

Nobuyuki Uchida

Senior Vice President

Takao Kamiji

Vice President

Mamoru Nakano

Senior Vice President

Hiromi Koshizuka

Vice President

Mitsuya Ogawa

Senior Vice President

Katsutoshi Kimura

Vice President

Noriyuki Kasuya

Senior Vice President

Tadashi Izawa*

Senior Vice President

Sumio Nakashima

Senior Vice President

Koichi Shirakawa

Vice President

23.42

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

3.64
38.30

Monthly Stock Price Range on the Tokyo Stock Exchange
(Yen)
3,600

2,400
1

24.37

Share Price (left)
Volume (right)
Nikkei Stock Average (right)

8,000

1,200

(Thousandsof shares)
160,000

0

80,0004 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 4
2007
2008
2009
2010
2011
2012

CHIYODA CORPORATION ANNUAL REPORT FY2011

16,000

Seiichiro Ikeda*1 : New Assignments*2 : Outside Corporate Auditor

12

(Yen)
24,0000

CHIYODA CORPORATION ANNUAL REPORT FY201113

Minatomirai 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.

Consolidated Financial Statements
For the Year Ended March 31, 2012, and Independent Auditor's ReportChiyoda Corporation
ChiyodaandCorporation
Consolidated
andSubsidiaries
Consolidated Subsidiaries

Consolidated Balance Sheet(March 31, 2012)

Consolidated Balance
Consolidated
Sheet
Balance Sheet
March 31, 2012
March 31, 2012ASSETSASSETS

CURRENT ASSETS:
CURRENT ASSETS:
Cash and cash equivalents(Note13)equivalents (Note 13)
Cash andcash
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
accountsfor doubtful accounts
Allowance
Costs and estimated Costs
earnings
long-term
construction
andon
estimated
earnings
on long-term construction
contracts (Notes 3 and13)
contracts(Notes 3 and 13)
Costs of constructionCosts
contracts
in process contracts in processof construction
Accounts receivable—otherAccounts receivable—other
Jointly controlled assetsof joint
venture(Noteof13)
Jointly
controlled
assetsjoint venture (Note 13)
Deferred tax assets (Note9) tax assets (Note 9)
Deferred
Prepaid expenses andPrepaid
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, and Tools,
fixturesfurniture, and fixtures
Construction in progress
Construction in progress
Total
Total
Accumulated depreciation
Accumulated depreciation
Net property, plant, andNet equipment
property, plant, and equipment
INVESTMENTS AND
OTHER ASSETS:
INVESTMENTS
AND OTHER ASSETS:
Investment securitiesInvestment(Notes 4 and13)
securities(Notes 4 and 13)
Investments in and advances
to unconsolidated
Investments
in and advances to unconsolidated
subsidiaries and associatedcompanies(Note 5) companies (Note 5)
subsidiaries
and associatedSoftware
SoftwareDeferred tax assets (Note9) tax assets (Note 9)
Deferred
Other assets
Other assets
Allowance for doubtful
accountsfor doubtful accounts
Allowance
Total investments andotherassetsTotal
investments
and other assets

Thousands of
U.S. Dollars
Millions of Yen
Millionsof Yen
(Note
1)
2012
2011 201220122011¥ 173,769
307
30,051(6 )¥ 130,618$ 2,119,137¥ 173,769¥ 130,618
79 307
3,753 79
41,53930,051 366,485
41,539(3) (6 )(77) (3)13,78813,4197,282
65,794
12,987
3,083

14,49313,788
12,64813,419
7,284 7,282
88,66265,794
18,64412,987
2,229 3,083

168,151
14,493
163,646
12,64888,812
7,284
802,367
88,662
158,388
18,64437,604
2,229

320,478

316,196
320,478 3,908,268
316,196

12,736
16,072
1,220
5,201
109
35,340(16,339 )

11,93812,736 155,325
11,93815,92616,072 196,005
15,926
1,270 1,220
14,8891,270
5,358 5,201
63,4295,358
5 109
1,334 534,50035,340 430,985
34,500(15,479)(16,339 ) (199,264)(15,479)

19,001

19,02119,001

231,720
19,021

15,527

5,81315,527

189,363
5,813

2,668
3,215
2,204
2,789
(88 )

2,704 2,668
2,831 3,215
3,948 2,204
2,964 2,789(87) (88 )32,543
2,704
39,2082,831
26,882
3,948
34,0152,964(1,085)(87)

26,316

18,17426,316

320,928
18,174CURRENT LIABILITIES:CURRENT LIABILITIES:Current portionof long-term
Current portion of long-term
debt (Notes
6, 12 anddebt
13)(Notes 6, 12 and 13)$ 2,119,137
Notes and accounts(Note 13)
Notes and accounts payable—trade(Notepayable—trade
13)
3,753
receipts
on construction contracts
Advance receipts on Advanceconstruction
contracts
366,485
taxes payable (Note 13)
Income taxes payableIncome(Note 13)(77)
Deposits received Deposits received
Allowance
warranty works
costs for completed works
Allowance for warranty
costs forforcompleted
168,151
for losses
on construction contracts
Allowance for lossesAllowanceon construction
contracts
163,646
Asset retirement obligations
Asset retirement obligations
88,812
AccruedAccrued expenses andother expenses and other802,367
158,388
37,604
Total current liabilities
Total current liabilities

TOTAL¥ 365,795¥ 353,392$ 4,460,917¥ 365,795¥ 353,392¥

10,006
86,211
76,533
1,162
6,179
289
568
165
12,572
193,687

3,908,268
NONCURRENT LIABILITIES:NONCURRENT LIABILITIES:Long-termLong-term debt (Notes
6, 12 anddebt
13)(Notes 6, 12 and 13)
204
Liability
for(Note
retirement
Liability for retirement
benefits
7) benefits (Note 7)
2,486
Provision
treatment of PCB waste
Provision for treatmentof PCBforwaste
123
155,325
Asset retirement obligations
Asset retirement obligations
59
196,005
Other
Other liabilities (Note9) liabilities (Note 9)496
14,88963,4291,334
Total noncurrent liabilities
Total noncurrent liabilities
3,369
430,985(199,264)
COMMITMENTS
AND
CONTINGENT LIABILITIESCOMMITMENTS AND
CONTINGENT
LIABILITIES(Notes 6, 11, 14 and (Notes
15) 6, 11, 14 and 15)
231,720
EQUITYEQUITY (Notes 8 and18): (Notes 8 and 18):
Common570,000
stock—authorized,
570,000 thousand shares;
Common stock—authorized,
thousand shares;
issued,260,324
thousandshares in 2012 and 2011
sharesin 2012and 2011
43,396
189,363 issued, 260,324 thousand
Preferred80,000
stock—authorized,
80,000thousandshares in 2012 and 2011
Preferred stock—authorized,
thousand sharesin 2012and 2011
Capital surplus
Capital surplus
37,11232,543Retained earnings Retained earnings
89,346
39,208Treasury
1,260
thousandTreasury stock—at cost,
1,260stock—atthousandcost,sharesin 2012and shares in 2012 and26,882
1,223
thousand shares in 2011
in 2011(1,328)34,015 1,223 thousand shares
Accumulated othercomprehensive
income (loss):
Accumulated other comprehensive
income(loss):(1,085)
Unrealized
gain (loss) on
available-for-sale securities
Unrealized gain (loss)
on available-for-salesecurities
1,509
Deferredundergain onderivatives
under hedge accounting
hedge
accounting
442
320,928 Deferred gain on derivatives
Foreign currencytranslation adjustments
Foreign currency translation
adjustments(2,358)
Total
Total
168,120
Minority interests Minority interests
617
Total equity

TOTAL

Thousands of
U.S. Dollars
Millions of Yen(Note
1)
Millionsof Yen2012
2011 201220122011

Thousands of
U.S. Dollars(Note 1)
LIABILITIES AND LIABILITIESEQUITY2012
AND EQUITY

TOTAL

TOTAL
$ 4,460,917

Total equity¥¥ 1310,006¥
13$ 122,027
97,417
97,41786,211 1,051,362
62,57162,57176,533 933,330
5,986
5,986 1,162
14,1744,541
4,541 6,179
75,354
1,190
1,190 289
3,525
1,057
1,057 568
6,929
165
2,012
9,109
9,10912,572 153,328
193,687 2,362,044
181,887
181,887

Thousands of
U.S. Dollars(Note 1)
2012$

122,027
1,051,362
933,330
14,17475,354
3,525
6,929
2,012
153,328
2,362,044

10,220 204
2,809 2,486
131 123
224 592,361 496

10,2202,492
2,809
30,321
1,501131
725224
2,361
6,052

2,492
30,321
1,501
725
6,052

15,746 3,369

15,746
41,09441,094

43,39643,396

43,396529,224529,224

37,112
37,11237,112 452,593
77,832
77,83289,346 1,089,597

452,593
1,089,597(1,328) (16,199)(1,295)(1,295)(16,199)(229)1,509
18,402(229)345 442
5,391345(2,358) (28,763)(1,919)(1,919)168,120 2,050,247
155,242
155,242516 617
7,531516

18,402
5,391(28,763)2,050,247
7,531

168,737

168,737 2,057,778
155,758
155,758

2,057,778¥ 365,795¥ 365,795¥ 353,392¥ 353,392$ 4,460,917$ 4,460,917

See notes to consolidated
financialstatements.financial statements.
See notes
to consolidated-2-

1

Consolidated Financial Statements-2-

Consolidated Financial Statements2Consolidated Statement of Income

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statement of Income
Year Ended March 31, 2012

(Year Ended March 31, 2012)

Millions of Yen
2012
2011
REVENUE (Note 3)

Thousands of
U.S. Dollars(Note 1)2012
$ 3,105,798

NET INCOME BEFORE MINORITY INTERESTS

215,783

215,5632,631,512

38,891

31,519474,286

14,693

13,974

179,191

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

24,197

17,544

295,095

1,230
(207)
72
(1,243)
(250)

1,078
(256 )
104(2,882 )15,000(2,531)
887(15,167)(3,049)SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES(Note 10)
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Equity in earnings of associated companies
Foreign exchange loss
Loss on valuation of investment securities
Insurance premiums refunded cancellation
Office integration costs (Note 11)
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Other—net

109(4,218 )(255)(146 )
142(3,119)(654)(6,068 )(7,978)

INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTS

23,543

11,476287,116

INCOME TAXES (Note 9):
Current
Deferred

2,310
6,717

9,194
(5,665 )28,17381,920

9,027

3,529

110,094

14,515

7,947

177,022

151

(32 )

1,845

Other expenses—net

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

Chiyoda Corporation and Consolidated Subsidiaries

Millions of Yen
2012
2011

¥ 247,082

Gross profit¥

14,364¥

7,979(Year Ended March 31, 2012)

Consolidated Statement of Comprehensive Income
Year Ended March 31, 2012

¥ 254,675

COST OF REVENUE (Note 3)

NET INCOME

Consolidated Statement of Comprehensive Income

Chiyoda Corporation and Consolidated Subsidiaries$

Thousands of
U.S. Dollars(Note 1)2012

¥ 14,515¥ 7,947$ 177,022

1,738
97
(361)

(332 )
501(511 )

21,1981,183(4,407)(105)(103 )(1,285)1,368(445 )

16,689COMPREHENSIVE INCOME (Note 16)¥ 15,884¥ 7,502$ 193,711

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO(Note 16):
Owners of the parent
Minority interests¥ 15,761
123¥ 7,545(42 )$ 192,210
1,501

Total other comprehensive income

See notes to consolidated financial statements.

175,176

Consolidated Statement of Income
Year Ended March 31, 2012
2012
PER SHARE OF COMMON STOCK (Notes 2.u and 17):
-3Basic net income
Cash dividends applicable to the year

¥ 55.44
17.00

Yen

2011

U.S. Dollars
2012¥ 30.79
11.00(Continued)$ 0.680.21-5-

See notes to consolidated financial statements.

3

Consolidated Financial Statements

Consolidated Financial Statements

4Consolidated Statement of Changes in Equity

Chiyoda Corporation and Consolidated
Chiyoda Corporation
Subsidiaries
and Consolidated Subsidiaries(Year Ended March 31, 2012)

Consolidated Statement of Changes
Consolidated
in Equity Statement of Changes in Equity
Year Ended March 31, 2012
Year Ended March 31, 2012

BALANCE, APRIL 1, 2010

Thousands

Thousands

Outstanding
Number of
Shares ofCommonStockCommonStock

Outstanding
Number of
Shares of
CapitalCommonStockSurplus

Retained
CommonStockEarnings

CapitalTreasury
SurplusStockMillions of Yen
Millions of Yen
Accumulated Other ComprehensiveAccumulated
IncomeOther Comprehensive Income
Unrealized
Unrealized
DeferredDeferredForeign
Foreign(Loss) Gain
(Loss)
Gain
Gain (Loss)
Gain (Loss)
Currency
Currency
on Availableon Derivatives on Availableon Derivatives
Retained
Treasury
Minority
for-Sale
for-Sale
under Hedge
under Hedge
Translation
Translation
Earnings
Stock
Adjustments
Total
Adjustments
Interests
Securities
Securities
Accounting
Accounting

BALANCE, APRIL 1, 2010 259,207¥ 43,396

259,207¥ 37,112¥ 43,396¥ 70,759¥ 37,112¥ (1,215)¥ 70,759¥ 102

Net income
Cash dividends, ¥3.50 per share
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2011

Net income
Cash dividends, ¥3.50 per share
Purchase of treasury stock(105 )Net change in the year

BALANCE, MARCH 31, 2012

BALANCE, MARCH 31, 2011
Net income
Cash dividends, $0.13 per share
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2012

(105 )BALANCE, MARCH 31, 2011
259,102

Net income
Cash dividends, ¥11.00 per share
Purchase of treasury stock
Net change in the year

43,396

Net income
Cash dividends, ¥11.00 per share
Purchase of treasury stock(37 )Net change in the year

259,10237,112¥ 43,396

259,065¥ 37,112(79)
37,112(1,295)¥ 43,396¥ 89,346(32)¥ 37,112¥ (1,328)

CommonStockCapitalSurplus

CommonRetained
Stock Earnings$ 529,224$ 452,593$ 529,224$ 949,177 $ 452,593$ (15,797) $Net income
Cash dividends, $0.13 per share
Purchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2012

43,39677,832
14,364(2,850)(37 )BALANCE, MARCH 31, 2012
259,065

BALANCE, MARCH 31, 2011

7,979
(907)

Capital Treasury
Surplus Stock

175,176(34,757)$ 529,224$ 452,593

(401)

7,979
(907)

¥ (1,215)¥ (156)

Total
Total
EquityMinority
Interests

Total
Equity¥ (1,315¥ )569¥ 148,683¥ 149,253¥ 569¥ 149,253

(52)

7,979
(907)
(79)
(486)

516

155,758¥ ¥ 102(1,315 )¥ (156)¥ 148,683(604 )(52)

7,979
7,979
(907)
(907)
(79)(79)
(434)
(486)

(1,919 )516

155,242
155,758100

14,364(2,850)
(32)
1,497

(332)

(79)
501

(332)
(604 )

7,979
(907)
(79)
501 (434)

77,832(229)(1,295)345(229)(1,919 )345155,242(438 )100

14,364
14,364(2,850)(2,850)(32)(32)
1,396
1,497

¥ (2,358¥ )617¥ 168,120¥ 168,737¥ 617¥ 168,737

Total
TotalEquity

Minority
Interests

Total
Equity$ 1,893,196$ 1,899,498$ 6,302$ 1,899,498(5,3481,228)

175,176
175,176(34,757)(34,757)(401)(401)17,033
18,261

1,228

175,176(34,757)(401)
18,261$ 5,391$ 2,050,247 $ (28,763$ 7,531)$ 2,050,247$ 2,057,778$ 7,531$ 2,057,778

14,364(2,850)
1,738

(32)
97

1,738
(438 )

14,364(2,850)(32)
97 1,396¥ 89,346¥ 1,509¥ (1,328)¥ 442¥ ¥1,509(2,358 )¥ ¥442168,120

Thousands of U.S. Dollars (Note 1)Thousands of U.S. Dollars (Note 1)
Accumulated Other ComprehensiveAccumulated
IncomeOther Comprehensive Income
Unrealized
Unrealized
DeferredDeferred(Loss) Gain on
Gain onGain (Loss) (Loss)Foreign
Gain (Loss)
Foreign
Currency
Currency
AvailableAvailableon Derivatives
on Derivatives
Retained
Treasury
Translation
Translation
Minority
for-Sale
for-Sale
under Hedge
under Hedge
Earnings
Stock
Interests
Securities
Securities
Accounting
Accounting
Adjustments
Total
Adjustments
949,177$ (2,796)
175,176(34,757)$ (15,797)$ 4,208$ $(2,796)(23,414 )21,198

(401)
1,183

21,198(5,348 )$ 529,224$ 1,089,597 $ 452,593$ (16,199) $ 1,089,597$ 18,402$ (16,199)$ 5,391$ $18,402(28,763 )$ 4,208$ 1,893,196 $ (23,414$ 6,302)
175,176(34,757)(401)
1,183 17,033

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

-6-

5

Consolidated Financial Statements-6-

Consolidated Financial Statements

6

Chiyoda Corporation and Consolidated Subsidiaries

Chiyoda Corporation and Consolidated Subsidiaries

Year Ended March 31, 2012

Consolidated Statement of Cash Flows
Year Ended March 31, 2012

Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Millions of Yen
2012
2011
OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes paid
Depreciation and amortization
Allowance for (reversal of) doubtful accounts—net
Reversal of warranty costs for completed works
Reversal of loss on construction contracts
Liability for retirement benefits—net
Foreign exchange loss—net
Equity in earnings of associated companies
Office integration costs
Changes in operating assets and liabilities:
Decrease (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(Decrease) increase in trade notes and accounts payable
Increase in advance receipts on construction contracts
Decrease (increase) in accounts receivable—other
Decrease (increase) in jointly controlled assets of joint
ventureIncrease in deposits received
Increase in interest and dividend receivable
Other—net
Total adjustments
Net cash provided by (used in) operating activities—(Forward)Thousands of
U.S. Dollars(Note 1)
2012

¥ 23,543¥ 11,476$ 287,116(10,820 )2,637
4(894 )(489 )(320 )
22(72 )(7,887 )2,566(245 )(3,271 )(3,367 )505
169(104 )
4,218(131,959)
32,162
57(10,904)(5,965)(3,911)
270(887)

11,946(796 )(11,102 )14,236
3,678(4,821 )(5,330 )8,035
14,225(2,231 )

145,691(9,710)(135,391)
173,618
44,863

22,7761,640(544 )
169
32,071(18,744 )45(562 )
94(16,706 )277,760
20,000(6,637)2,062
391,118¥ 55,615¥ (5,229 )(Year Ended March 31, 2012)$ 678,235

Net cash provided by (used in) operating activities—(Forward)
INVESTING ACTIVITIES:Net increase in time deposits
Purchases of property, plant, and equipment
Proceeds from sales of property, plant, and equipment
Purchases of intangible assets
Payments for purchases of investment securities
Purchases of investments in subsidiaries
Payments of short-term loans receivable
Payments of long-term loans receivable
Proceeds from collections of long-term loans
Other—net¥

Millions of Yen
2012
2011

Thousands of
U.S. Dollars(Note 1)
2012

55,615$(234)(1,618)
1,725(1,380)(7,561)
(57)
(85)

¥

(5,229 )(26 )(930 )
4(713 )(974 )

678,235(2,862)(19,735)
21,036(16,831)(92,209)(704)(1,040)

71

(24 )
81
7

(9,140)(2,577 )(111,473)(2,844)(7)(47)

10,208(10,004 )(906 )(9 )(93 )(34,684)
(93)
(576)

Net cash used in financing activities(2,899)(805 )(35,353)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS(424)(647 )(5,173)43,151(9,260 )526,234

Net cash used in investing activities
FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Payments of cash dividends
Payments of cash dividends to minority shareholders
Other—net

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
INCREASE IN CASH AND CASH EQUIVALENTS FROMNEWLY CONSOLIDATED SUBSIDIARYCASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

873

87
130,618

139,790

1,592,903¥ 173,769¥ 130,618$ 2,119,137

See notes to consolidated financial statements.

-7-

7

Consolidated Financial Statements(Continued)-8-(Concluded)

Consolidated Financial Statements8

Chiyoda Corporation and Consolidated Subsidiaries

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements
Year Ended March 31, 20121.

(Year Ended March 31, 2012)

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
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 conformity
with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards.

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 eliminated.
b.

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 and rearrangements have been made in the 2011
consolidated financial statements to conform to the classifications used in 2012.
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 ¥82 to $1, the approximate rate of exchange at March 31, 2012. 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.

Concerning the construction contracts, the Group applies the accounting methods below:
Unbilled costs on contracts which are accounted for by the completed-contract method are stated as costs ofconstruction contracts in process.

Japanese yen figures less than a million yen are rounded down to the nearest million yen, except for per-share data.

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.

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 for the year ended March 31, 2012 include the accountsof the Company and its 21 significant (20 in 2011) subsidiaries (together, the "Group").
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able
to exercise control over operations are fully consolidated and those companies over which the Group has theability to exercise significant influence are accounted for by the equity method.
Investments in two associated companies are accounted for by the equity method in 2012 and 2011.
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.

Construction Contracts—In December 2007, the Accounting Standards Board of Japan (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, theconstruction revenue and construction costs should be recognized by the percentage-of-completion method if
the outcome of a construction contract can be estimated reliably. When total construction revenue, total
construction costs, and the stage of completion of the contract at the balance sheet date can be reliably
measured, the outcome of a construction contract can be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method should be applied. When it is probablethat the total construction costs will exceed total construction revenue, an estimated loss on the contract shouldbe immediately recognized by providing for a loss on construction contracts.

Costs of preparation work for unsuccessful proposals and other projects which are not realized are charged
to income, as incurred, and are included in costs of revenue.
c.

Cash Equivalents—Cash equivalents are short-investments that are readily convertible into cash and that are
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.

d.

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

e.

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

The excess of the cost of the Company's investments in consolidated subsidiaries and associated companies
over the fair value of the net assets of an acquired subsidiary at the date of acquisition is being amortized overa period of 20 years.

Non-available--securities are stated at cost determined by the moving-method. For other-than-temporary
declines in fair value, non-securities are reduced to net realizable value by a charge to income.
f.

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.

-9-- 10 -

9

Consolidated Financial Statements

Consolidated Financial Statements

10Notes to Consolidated Financial Statementsg.

h.

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 which are depreciated using thestraight-line method, at rates based on the estimated useful lives of the assets. The range of useful lives is from
3 to 57 years for buildings and structures, from 4 to 17 years for machinery and equipment, and from 2 to 15
years for tools, furniture, and fixtures. Equipment held for lease is depreciated by the straight-line method over
the respective lease periods.

Certain of the Company's consolidated subsidiaries terminated their unfunded retirement benefit allowance forall directors and officers under the resolution of shareholders' meeting and board meeting during the year
ended March 31, 2011. The outstanding balance was reclassified to noncurrent liabilities—other liabilities inthe years ended March 31, 2012 and 2011.
n.

Asset Retirement Obligations—In March 2008, the ASBJ published 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 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 increase or a decrease in the carrying amount of the liability andthe capitalized amount of the related asset retirement cost.

o.

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

p.

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 issued in June 1993. The
revised accounting standard for lease transactions was effective for fiscal years beginning on or after April 1,
2008.

Long-ed Assets—The Group reviews its long-assets for impairment whenever events or changes incircumstances indicate the carrying amount of an asset or asset group may not be recoverable.
An impairment loss would be 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 theasset 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.

i.

Other Assets—Intangible assets are carried at cost less accumulated amortization, which is calculated by thestraight-method over their estimated useful lives. Software for internal use is amortized on a straight-basis overits estimated useful life (five years at the maximum).

j.

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

k.

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-method applied contracts, the allowance for losses on
construction contracts is offset against the costs of construction contracts in process on the balance sheet.

l.

Provision for Treatment of PCB Waste—Provision for treatment of PCB (Poly Chlorinated Biphenyl) waste isprovided based on estimated costs of the treatment for PCB products and equipment as well as their collection
and transportation fees.

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 note 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.

m. Retirement and Pension Plans—Employees of the Company are, under most circumstances, entitled to
payments from the defined contribution pension plan and the defined benefit corporate pension plan.
Employees of certain of the Company's consolidated subsidiaries are, under most circumstances, entitled tocertain lump-severance payments and pension payments.

The Group applied the revised accounting standard effective April 1, 2008. In addition, the Group accounted
for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee
as operating lease transactions.

Effective April 1, 2000, the Company and its domestic consolidated subsidiaries adopted a new accounting
standard for employees' 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 transitional obligation of ¥5,696 million ($69,467 thousand) is being amortized and charged to income
over 15 years using the straight-line amortization method and presented as an operating expense in the
consolidated statements of income for the years ended March 31, 2012 and 2011.

- 11 -

11

Consolidated Financial Statements

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

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 tax laws to
the temporary differences.

- 12 -

Consolidated Financial Statements

12Notes to Consolidated Financial Statements
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.
r.

Foreign Currency Transactions—All short-and long-monetary receivables and payables denominated inforeign currencies are translated into Japanese yen at the exchange rates at the balance sheet date.
The foreign exchange gains and losses from translation are recognized in the consolidated statement of income
to the extent that they are not hedged by foreign currency forward contracts.

s.

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 years including dividends to be paid after the end of the year.
v.

Foreign Currency Financial Statements—The balance sheet accounts of the consolidated foreign subsidiaries
are translated into Japanese yen at the current exchange rate as of the balance sheet date except for equity,which is translated at the historical rate. Differences arising from such translation are shown as "Foreign
currency translation adjustments" under accumulated other comprehensive income in a separate component ofequity.

(1) Changes in accounting policies
When a new accounting policy is applied with revision of accounting standards, the new policy is applied
retrospectively unless the revised accounting standards include specific transitional provisions. When therevised accounting standards include specific transitional provisions, an entity shall comply with thespecific transitional provisions.

Revenue and expense accounts of consolidated foreign subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date.
t.

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.

(2) Changes in presentations
When the presentation of financial statements is changed, prior-financial statements are reclassified inaccordance with the new presentation.

Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:(3) Changes in accounting estimates(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.

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 andfuture periods.

(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.

(4) Corrections of prior-period errors

The foreign currency forward contracts are utilized to hedge foreign exchange risks. Certain assets andliabilities on construction contracts denominated in foreign currencies are translated at the contracted rates if
the forward contracts qualify for hedge accounting.
Foreign currency deposits are held to hedge foreign exchange risks derived from forecasted purchases of fixed
assets denominated in foreign currency.
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.
u.

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.

- 13 -

13

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:

When an error in prior-period financial statements is discovered, those statements are restated.
This accounting standard and the guidance are applicable to accounting changes and corrections ofprior-period errors which are made from the beginning of the fiscal year that begins on or after April 1,
2011.
w.

New Accounting Pronouncements
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 effective date of April 1, 2000 and the otherrelated practical guidances being followed by partial amendments from time to time through 2009.

- 14 -

Consolidated Financial Statements

14Notes to Consolidated Financial Statements
Major changes are as follows:

4.

(a) Treatment in the balance sheet

INVESTMENT SECURITIESInvestment securities at March 31, 2012 and 2011, consisted of the following:

Under the current requirements, actuarial gains and losses and past service costs that are yet to berecognized in profit or loss are not recognized in the balance sheet, and the difference between retirement
benefit obligations and plan assets (hereinafter, "deficit or surplus"), adjusted by such unrecognizedamounts, are recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to berecognized in profit or loss shall be recognized within equity (accumulated other comprehensive income),
after adjusting for tax effects, and the deficit or surplus shall be recognized as a liability (liability for
retirement benefits) or asset (asset for retirement benefits).

Non-current—Equity securities¥ 15,527

This accounting standard and the guidance are effective for the end of annual periods beginning on or after
April 1, 2013 with earlier application being permitted from the beginning of annual periods beginning on orafter April 1, 2013. However, no retrospective application of this accounting standard to consolidated financial
statements in prior periods is required.
The Company expects to apply the revised accounting standard from the end of the annual period beginning on
April 1, 2013 and is in the process of measuring the effects of applying the revised accounting standard for theyear ending March 31, 2014.
3.

Millions of Yen
2012
2011

Securities classified asavailable-for-sale—Equity securities

Cost
Securities classified asavailable-for-sale—Equity securities

Securities classified asavailable-for-sale—Equity securities$ 3,445,027(3,276,876)

March 31, 2011

Net

¥

¥

$

Available-for-sale—Equity securities

14,493

168,151¥ 367¥13,885¥ 4,371

Millions of Yen
Unrealized
Unrealized
Gains
Losses
¥ 480

¥ 683

Fair
Value
¥ 4,168$ 142,469

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses$ 31,350$ 4,480

Fair
Value$ 169,338

Available--securities whose fair value was not readily determinable at March 31, 2011, were as follows. The similar
information for 2012 is disclosed in Note 15.

¥ 286,840(272,346 )

13,788¥2,570Fair
Value

March 31, 2012

¥ 282,492(268,703)

Consolidated Financial Statements¥11,682

Millions of Yen
Unrealized
Unrealized
Gains
LossesMarch 31, 2011

Costs and estimated earnings
Amounts billed- 15 -

15

Cost

Cost

Thousands of
U.S. Dollars
2012$ 189,363

March 31, 2012

CONSTRUCTION CONTRACTS
Costs and estimated earnings recognized with respect to construction contracts which are accounted for by thepercentage--method at March 31, 2012 and 2011, were as follows:¥ 5,813

The costs and aggregate fair values of investment securities at March 31, 2012 and 2011, were as follows:(b) Treatment in the statement of income and the statement of comprehensive income (or the statement ofincome and comprehensive income)The revised accounting standard would not change how to recognize actuarial gains and losses and past
service costs in profit or loss. Those amounts would be recognized in profit or loss over a certain period
no longer than the expected average remaining working lives of the employees. However, actuarial gains
and losses and past service costs that arose in the current period and yet to be recognized in profit or loss
shall be included in other comprehensive income and actuarial gains and losses and past service costs thatwere recognized in other comprehensive income in prior periods and then recognized in profit or loss inthe current period shall be treated as reclassification adjustments.

Thousands of
U.S. Dollars
2012

Millions of Yen
2012
2011

Carrying AmountMillions of Yen¥ 1,644- 16 -

Consolidated Financial Statements

16Notes to Consolidated Financial Statements
5.

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATEDCOMPANIES
Investments in and advances to unconsolidated subsidiaries and associated companies at March 31, 2012 and 2011,were as follows:
Millions of Yen
2012
2011

6.

Thousands of
U.S. Dollars
2012

Investments
Long-term receivables¥ 2,6625¥ 2,69211$ 32,473
70

Total¥ 2,668¥ 2,704$ 32,543

LONG-DEBT
Long-debt at March 31, 2012 and 2011, consisted of the following:
Millions of Yen
2012
2011

Thousands of
U.S. Dollars
2012Long-term loans principally from banks, due seriallythrough 2014, with interest rates ranging from
1.9% to 2.0% at 2012 and 2011—Unsecured
Obligations under finance lease
Total
Less current portion¥ 10,198
12
10,210(10,006)¥ 10,208
26
10,234(13 )$ 124,373
146
124,520(122,027)

Long-term debt, less current portion¥¥ 10,220$

RETIREMENT AND PENSION PLANS
Employees of the Company are, under most circumstances, entitled to payments from the defined contribution
pension plan and the defined benefit corporate pension plan upon retirement or termination.
Employees of certain of the Company's consolidated subsidiaries are, under most circumstances, entitled to certain
lump-severance payments and pension payments upon retirement or termination.
The liability for employees' retirement benefits at March 31, 2012 and 2011, consisted of the following:
Millions of Yen
2012
2011
¥ 24,492(18,429)(1,826)(2,432)
675
2,479
(6)

¥ 25,241(17,818 )(2,435 )(3,030 )851
2,809$ 298,686(224,745)(22,274)(29,666)
8,239
30,239(82)

Net liability for employees' retirement benefits

¥

¥

$

Thousands of
U.S. Dollars

2014

¥198

$ 2,422

Total

¥198

$ 2,422

Net periodic benefit costs

30,321

¥

829
341
(264)
608
748
(176)
2,086
294

¥ 2,381¥

Thousands of
U.S. Dollars
2012

846
364
(288 )
608
739(176 )
2,094
291$ 10,110
4,166(3,226)
7,424
9,124(2,149)25,4493,590¥ 2,385$ 29,039

Assumptions used for the years ended March 31, 2012 and 2011, are set forth as follows:

Commitment-contracts at March 31, 2012, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

Commitment-line contracts¥ 15,000$ 182,926

Unused commitments¥ 15,000$ 182,926

Consolidated Financial Statements

2,809

Millions of Yen
2012
2011

Millions of Yen- 17 -

2,486

The components of net periodic benefit costs for the years ended March 31, 2012 and 2011, were as follows:Year Ending
March 31

2,492

Thousands of
U.S. Dollars
2012

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
Prepaid pension expenses

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

204

Annual maturities of long-debt, excluding finance leases (see Note 14), at March 31, 2012, were as follows:

17

7.

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

2012

2011

1.5%
1.6%
10 years
15 years
10 years

1.5%
1.6%
10 years
15 years
10 years- 18 -

Consolidated Financial Statements

18

Notes to Consolidated Financial Statements
8.

EQUITY

9.

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

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-dividend upon resolution at the shareholders' meeting. For companies that meet certain criteria, the Boardof Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if thecompany has prescribed so in its articles of incorporation. However, the Company cannot do so because it does
not meet all the above criteria. The Company is organized as a company with board committees.
The Companies Act permits companies to distribute dividends in kind (non-assets) to shareholders subject to acertain limitation and additional requirements.
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.

b.

c.

Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus

INCOME TAXESThe 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 41% for the years ended March 31,
2012 and 2011.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31,
2012 and 2011, were as follows:
Millions of Yen
2012
2011
Deferred tax assets:
Cost of revenue
Future deductible depreciation
Allowance for employees' bonus
Retirement benefits
Loss on valuation of investment securities
Enterprise tax
OtherLess valuation allowance
Total

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-capital (a component of capital surplus) depending on
the equity account charged upon the payment of such dividends until the aggregate amount of legal reserve andadditional paid-capital equals 25% of the common stock. Under the Companies Act, the total amount ofadditional paid-capital and legal reserve may be reversed without limitation. The Companies Act also provides
that common stock, legal reserve, additional paid-capital, other capital surplus, and retained earnings can betransferred among the accounts under certain conditions upon resolution of the shareholders.

Deferred tax liabilities:
Profit/loss in joint venture
Unrealized gain on available-for-sale securities
Other

Treasury Stock and Treasury Stock Acquisition Rights

Net deferred tax assets

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 specific formula.

Total- 19 -

19

Consolidated Financial Statements¥ 10,712
1,876
1,475
859
342
160
2,695
(594)

¥ 16,896
1,906
1,527
1,117
289
759
3,184
(744 )$ 130,634
22,885
17,995
10,4774,180
1,960
32,870(7,249)17,527

24,937

213,755

797
695
867

1,917
431

9,720
8,480
10,574

2,359

2,348

28,775¥ 15,168¥ 22,589$ 184,979

Net deferred tax assets as of March 31, 2012 and 2011 were recorded in the accompanying consolidated balance
sheet as follows:

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.

Thousands of
U.S. Dollars
2012

Millions of Yen
2012
2011
Deferred tax assets—current assets
Deferred tax assets—investments and other assets
Other liabilities—non-current liabilities¥ 12,987
2,204
(23)

¥ 18,644
3,948
(3 )

Thousands of
U.S. Dollars
2012$ 158,388
26,882(291)- 20 -

Consolidated Financial Statements

20Notes to Consolidated Financial Statements
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of income for the years ended March 31, 2012 and 2011, is as follows:
2012

2011

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable dividend income
Profit/loss in joint venture
Tax credit
Lower income tax rates applicable to subsidiaries
Tax rate changes due to tax reform

41 %
1
(1)
(6)
(1)
(2)
5

41 %
1
(1)
(6)
(5)

Actual effective tax rate

38 %

31 %

On December 2, 2011, new tax reform laws were enacted in Japan, which changed the normal effective statutory
tax rate from approximately 41% to 38% effective for the fiscal years beginning on or after April 1, 2012 throughMarch 31, 2015, and to 36% thereafter. The effect of this change was to decrease deferred taxes in the consolidatedbalance sheet as of March 31, 2012 by ¥1,136 million ($13,858 thousand) and to increase income taxes—deferredin the consolidated statement of income for the year then ended by ¥1,253 million ($15,291 thousand).
10.

OFFICE INTEGRATION COSTS
Following the Company's decision to integrate its offices which have been located separately, the office integration
costs of ¥4,218 million have been expensed in the consolidated statement of income for the year ended March 31,
2011 consistent with the office integration plan.
It consists of the following:
Millions of Yen
2011
Non-recurring depreciation on non-current assets
and related expenses
Provision for cancellation of leases

12.

Year Ended March 31, 2012
Millions of Yen
Finance Leases
On
Off
Operating
Balance Balance
Leases¥ 3,673
545

¥ 6
5

¥ 47
16

¥

688
526

$ 76
70

$ 574
199

$

Total

¥ 12

¥ 63

¥ 1,214

$ 146

$ 774

$ 14,816

Millions of Yen
Finance Leases
On
Off
Operating
Balance
Balance
LeasesDue within one year
Due after one year

¥ 13
12

¥ 53
63

¥

Total

¥ 26

¥ 117

¥ 1,421

Consolidated Financial Statements

123
1,298

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 that do not transfer ownership 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 continued to account for such leases as operating lease transactions.
Pro forma information of leased property whose lease inception was before March 31, 2008 on an "as if capitalized"
basis was as follows:Year Ended March 31, 2012
Buildings
andStructures

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

21

8,391
6,425

Year Ended March 31, 2011

LEASES- 21 -

Thousands of U.S. Dollars
Finance Leases
On
Off
Operating
Balance
Balance
LeasesDue within one year
Due after one year

RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥1,886 million ($23,007 thousand) and ¥1,848 million forthe years ended March 31, 2012 and 2011, respectively.

11.

Obligations under finance leases and future minimum payments under noncancelable operating leases for the years
ended March 31, 2012 and 2011 were as follows:

Millions of Yen
Tools,
Furniture,
Otherand Fixtures

Total

Acquisition cost
Accumulated depreciation

¥ 67
32

¥ 79
61

¥ 26
15

¥ 173
109

Net leased property

¥ 34

¥ 17

¥ 10

¥ 63

- 22 -

Consolidated Financial Statements

22

Notes to Consolidated Financial Statements
Year Ended March 31, 2011

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

Millions of Yen
Tools,
Furniture,and Fixtures
Other

Total

Acquisition cost
Accumulated depreciation

¥ 67
25

¥ 279
221

¥ 72
55

¥ 419
302

Net leased property

¥ 41

¥ 58

¥ 17

¥ 117

Year Ended March 31, 2012
Buildings
andStructures

Total

Acquisition cost
Accumulated depreciation

$ 823
398

$ 969
750

$ 317
187

$ 2,110
1,335

Net leased property

$ 425

$ 219

$ 129

$

774

Obligations under finance leases for the years ended March 31, 2012 and 2011 were as follows:
Thousands of
U.S. Dollars
2012

Due within one year
Due after one year

¥ 47
16

¥ 53
63

$ 574
199

Total

¥ 63

¥ 117

$ 774

The amounts of obligations, acquisition cost and depreciation under finance leases include the imputed interest
income portion and interest expense portion.
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
certificate of deposits 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.

- 23 -

23

Consolidated Financial Statements

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

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.t and 16 for more detail about derivatives.
(3) Risk Management for Financial Instruments

Depreciation expense as lessee, which is not reflected in the accompanying consolidated statement of income,computed by the straight-line method was ¥53 million ($655 thousand) and ¥90 million for the years ended March
31, 2012 and 2011, respectively.

13.

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

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.

Thousands of U.S. Dollars
Tools,
Furniture,and Fixtures
Other

Millions of Yen
2012
2011

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.

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.

- 24 -

Consolidated Financial Statements

24Notes to Consolidated Financial Statements
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 reply is made, and the transactions related to foreign currency forward contracts
are executed and accounted for under internal guidelines.
Marketable 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.
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 16 for the detail of fairvalue for derivatives.
(a) Fair values of financial instruments

March 31, 2011
Millions of Yen

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¥ 130,618
79
41,539¥ 130,618
79
41,53914,493
88,662
4,168

14,493
88,662
4,168

Total

¥ 279,561¥ 279,561

Notes and accounts payable—trade
Income taxes payable
Long-term debt

¥

¥

Total

¥ 113,611

97,417
5,986
10,208

Unrealized
Gain (Loss)

97,417
5,986
10,208¥ 113,612

March 31, 2012

March 31, 2012
Carrying
AmountMillions of Yen
Fair 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¥ 173,769
307
30,051¥ 173,769
307
30,051

13,78865,794
13,885

13,78865,794
13,885

Total¥ 297,597¥ 297,597

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

10,00086,211
1,162
198

¥

Total

¥

97,572¥

10,00086,211
1,162
198
97,572Carrying
AmountUnrealized
Gain (Loss)

Thousands of U.S. Dollars
Fair 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$ 2,119,137
3,753
366,485$ 2,119,137
3,753
366,485

168,151
802,367
169,338

168,151
802,367
169,338

Total$ 3,629,233$ 3,629,233

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

$

$

Total

$ 1,189,910

121,951
1,051,362
14,174
2,422

Unrealized
Gain (Loss)

121,951
1,051,362
14,174
2,417

$ (5)

$ 1,189,905$ (5)Cash and Cash Equivalents, Short-Term Investments, Notes and Accounts Receivable, and Costs andEstimated Earnings on Long-Term Construction Contracts
The carrying values of accounts mentioned above approximate fair value because of their shortmaturities.

- 25 -

25

Consolidated Financial Statements- 26 -

Consolidated Financial Statements

26

Notes to Consolidated Financial Statements
Jointly Controlled Assets of Joint Venture(c) Maturity analysis for financial assets and securities with contractual maturities

The jointly controlled assets of joint venture are jointly controlled cash recognized based on the
Company's share of the venture. The carrying values of jointly controlled assets of joint venture
approximate fair value because of their short maturities.

March 31, 2012

Investment Securities

Due in1 Yearor Less

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.
Notes and Accounts Payable—Trade and Income Taxes Payable
The carrying values of accounts mentioned above approximate fair value because of their shortmaturities.
Current Portion of Long-Term Debt (Bank Loans)/Long-Debt (Bank Loans)

Derivatives
The information of the fair value for derivatives is included in Note 16.
(b) Financial instruments whose fair values cannot be reliably determined
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
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¥ 1,639¥ 1,641$ 19,988

2

2

36

2,662

2,692

32,473

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, andcosts and estimated earnings onlong-term construction contacts
Jointly controlled assets of joint
venture¥ 173,684
307

Total

¥ 283,517¥ 109

Due in1 Yearor Less

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

43,731

Due after
10 Years¥ 109

65,794

March 31, 2011

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 specific method for interest rate swaps
is calculated by discounting total principal and interest payments which are handled together with interest
rate swaps to present value using a discount rate equal to the rate that would be charged if the loan was
newly borrowed.

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

Cash and cash equivalents
Short-term investments
Notes and accounts receivable, andcosts and estimated earnings onlong-term construction contacts
Jointly controlled assets of joint
venture¥ 130,618
79

Total

¥ 272,432

53,072¥ 2,941¥ 19¥ 2,941¥ 19

Due after
10 Years

88,662

March 31, 2012
Due in1 Yearor Less
Cash and cash equivalents
Short-term investments
Notes and accounts receivable, andcosts and estimated earnings onlong-term construction contacts
Jointly controlled assets of joint
venture$ 2,118,109
3,753

Total

$ 3,457,534

533,305

Thousands of U.S. Dollars
Due after
Due after
5 Years
1 Yearthroughthrough
10 Years
5 Years

Due after
10 Years$ 1,331802,367$ 1,331

Please see Note 7 for annual maturities of long-debt and Note 14 for obligations under finance leases.
- 27 -

27

14.

DERIVATIVES- 28 -

Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2012 and 2011
Consolidated Financial Statements

March 31, 2012

Consolidated Financial Statements

28

Notes to Consolidated Financial Statements
Please see Note 7 for annual maturities of long-debt and Note 14 for obligations under finance leases.
14.

March 31, 2012

DERIVATIVES

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

Unrealized
Gain (Loss)

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 SGD/selling yen
Buying Euro/selling U.S.$$ 225,221
54,783
2,222
999
1,462
516
47
4,769

$ (418 )
94
(1 )
(83 )
48
(2 )
2
(61 )

$ (418)
94
(1)
(83)
48
(2)
2
(61)

Total

$ 290,020$ (421 )$ (421)

Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2012 and 2011
March 31, 2012

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

Unrealized
Gain (Loss)

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 SGD/selling yen
Buying Euro/selling U.S.$¥ 18,468
4,492
182
81
119
42
3
391

¥ (34 )
7

¥ (34)
7

3

3

(5 )

(5)

Total

¥ 23,781¥ (34 )¥ (34)

Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2012 and 2011
March 31, 2012

March 31, 2011

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

Foreign currency forward contracts:
Selling U.S.$/buying yen
Selling Euro/buying yen
Selling GBP/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying Euro/selling U.S.$¥ 26,202
3,472
264
43
21
1,238

¥ 2,163

Total¥ 31,243

Hedged Item
Unrealized
Gain (Loss)¥ (35 )
11

¥ (35)
11

4
62

1
(9 )

1
(9)

¥ 2,230¥ (32 )¥ (32)

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

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

Current portion of
long-term debt

Total

Millions of Yen
Contract
AmountContract
Due after
One YearAmount

¥

1,785
25
6,492
1,041
46

¥

581

¥

9,391

¥

3,677

¥

43
267
6

¥

60

¥

317

¥

60

2,995
100

¥ 10,000¥ 10,000¥ 10,000¥ 10,000

Fair
Value
(Loss)¥ (39)
(1)
242
14
2
¥ 218

- 29 - 30 -29

Consolidated Financial Statements

Consolidated Financial Statements

30Notes to Consolidated Financial Statements
March 31, 2011

March 31, 2012

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 GBP/selling yen
Buying SGD/selling yen
Buying Euro/selling U.S.$

Foreign currency
forecasted
transaction

Total

Millions of Yen
Contract
AmountDue after
Contract
One YearAmount

¥

2,968
3,914
1,943
17
200
2,858

¥

¥ 11,902
¥

959
66

Fair
Value
(Loss)

143

¥ 130
(25)
21
(2)
9
(21)

¥

1,169

¥ 112

¥

43

Hedged Item
Foreign currency forward contracts—
Accounted for under deferred hedge
accounting method:
Selling U.S.$/buying yen
Selling GBP/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen
Buying SGD/selling yen
Total
Other*1:
Selling U.S.$/buying yen
Buying U.S.$/selling yen
Buying Euro/selling yen

1

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

Receivables
PayablesTotal
Interest rate swaps*2 (fixed rate payment,
floating rate receipt)¥
Long-term debt

Total

2,692
337
151
288
1
3,470

¥ 10,000¥ 10,000

Foreign currency
forecasted
transaction

Receivables
PayablesTotal¥

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

43

Current portion of
long-term debt

Thousands of U.S. Dollars
Contract
Fair
AmountValue
Due after
Contract(Loss)One YearAmount$21,774315
79,176
12,697
562

$

7,097

$ 114,526$

44,84536,524
1,223

$

534
3,262
77

$

735
7

$

3,873

$

742

$ 121,951$ 121,951$ 121,951$ 121,951$ (487)
(17)
2,961
182
25
$ 2,664¥ 10,000

Total¥ 10,000*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 under specific method, are treated as part of the hedged long-debt, thus
their fair values are integrally computed with those of hedged long-debt. See Note 15 for the fair value of
long-debt.
15.

CONTINGENT LIABILITIESAt March 31, 2012, the Group had the following contingent liabilities:
Millions of Yen
Guarantees on employees' housing loans
Performance bond for an unconsolidated subsidiary- 31 -

31

Consolidated Financial Statements

¥

172
1,767

Thousands of
U.S. Dollars$

2,102
21,560- 32 -

Consolidated Financial Statements

32

Notes to Consolidated Financial Statements
16.

COMPREHENSIVE INCOME

There is no dilutive effect for the year ended March 31, 2012.

The components of other comprehensive income for the year ended March 31, 2012 were as follows:Year Ended March 31, 2011

Unrealized gain (loss) on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectMillions of Yen
2012

Thousands of
U.S. Dollars
2012¥ 2,156250
2,406(668 )$ 26,296
3,049
29,346(8,147)¥ 1,738$ 21,198¥ (424 )
549
6
131
(34 )

$ (5,179)
6,700
80
1,602
(418)

¥

$

Total
Deferred gain (loss) 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 effect
Total

97

Total
Share of other comprehensive income in associates—
Gains arising during the year
Total
Total other comprehensive income

Basic EPS—Net income available
to common shareholders¥ 14,364

259,086- 33 -

33

Consolidated Financial Statements¥ 7,979

259,165¥ 30.79

18.

SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2012, was approved at the Company's shareholders'meeting on June 26, 2012:

Year-end cash dividends, ¥17.00 ($0.20) per share

Millions of Yen

Thousands of
U.S. Dollars¥ 4,404$ 53,708

SEGMENT INFORMATION$ (4,407)¥ (361 )$ (4,407)¥ (105 )$ (1,285)¥ (105 )$ (1,285)

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.

¥ 1,368$ 16,689(1) Description of Reportable Segments

Reconciliation of the differences between basic and diluted net income per share ("EPS") for the years ended March
31, 2012 and 2011 is as follows:
Thousandsof Shares
Weighted-Average
SharesEPS

Yen¥ (361 )NET INCOME PER SHARE

Millionsof YenNet
IncomeNet Income

Thousandsof Shares
Weighted-Average
SharesThere is no dilutive effect for the year ended March 31, 2011.

1,183

The corresponding information for the year ended March 31, 2011 was not required under the accounting standard
for presentation of comprehensive income as an exemption for the first year of adopting that standard and notdisclosed herein.

Year Ended March 31, 2012

Basic EPS—Net income available
to common shareholders

19.

Foreign currency translation adjustments—
Adjustments arising during the year

17.

Millionsof YenThe 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 to those disclosed in Note 2, "Summary of
Significant Accounting Policies."

Yen

U.S. Dollars
EPS¥ 55.44

The profit in reporting segments are based on the operating income. Intersegment income and transfer aremeasured at the quoted market price.

$ 0.67- 34 -

Consolidated Financial Statements

34

Notes to Consolidated Financial Statements
Year Ended March 31, 2012(3) Information about Sales, Profit (Loss), Assets, Liabilities, and Other Items
Year Ended March 31, 2012
Reportable
Segment
Engineering

Millions of Yen
Other*1

Total

Reconciliations*2

Consolidated*3

Sales:
Sales to external customers
Intersegment sales or transfers¥ 247,849
2

¥

6,826
8,508

¥ 254,675
8,510¥ (8,510 )Total¥ 247,851¥ 15,334¥ 263,186¥ (8,510 )¥ 254,675

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Amortization of goodwill
Investment in associatedcompanies
Increase in property, plant, andequipment and intangible
assets

¥

¥

¥

¥

¥

23,755358,155
185,832
2,664

531
8,165
3,671
21
84

24,287366,321
189,503
2,685
84

945

(89 )
(525 )
7,553¥ 254,675

(48 )

2,637
84

945

3,631

4

24,197
365,795
197,057

945

3,635

(180 )

3,455

Year Ended March 31, 2011
Reportable
Segment
Engineering

Total

Reconciliations*2

Consolidated*3

Sales:
Sales to external customers
Intersegment sales or transfers¥ 241,395
4

¥

5,687
8,506

¥ 247,082
8,510¥ (8,510 )Total¥ 241,399¥ 14,193¥ 255,593¥ (8,510 )¥ 247,082

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Amortization of goodwill
Investment in associatedcompanies
Increase in property, plant, andequipment and intangible
assets

¥

¥

¥

¥

¥

17,175346,512
187,019
2,562

Consolidated Financial Statements

499
7,372
3,009
23
41

977
2,905

- 35 -

35

Other*

17,674353,885
190,0292,586
41(129 )(492 )
7,604
(19 )

977
20

2,925

Sales:
Sales to external customers
Intersegment sales ortransfers$ 3,022,554

Other*1

Reconciliations*2

Consolidated*3

83,244$ 3,105,798

29

103,758

103,787

Total$ 3,022,583$ 187,002$ 3,209,586$ (103,787 ) $ 3,105,798

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

$

$

$

$

289,705
4,367,752
2,266,244
32,492

$

Total

6,479
99,57644,773256
1,027

11,52844,285296,185
4,467,329
2,311,017
32,7481,027$ 3,105,798$ (103,787 )(1,089 ) $ 295,095(6,412 )
4,460,917
92,121
2,403,138(586 )

11,52851

44,33732,162
1,027
11,528(2,202 )42,135

Notes for the year ended March 31, 2012:*1 "Other" represents industry segments which are not included in the reportable segment, consisting of
temporary staffing services, IT services, and travel services.

Millions of Yen
1

Thousands of U.S. Dollars

Reportable
Segment
Engineering¥ 247,082

17,544353,392
197,633
2,566
41
977

(164 )*2 The detail of reconciliations is as follows:(1) The reconciliation in segment profit ¥(89) million ($(1,090) thousand) is the elimination ofintersegment trades.
(2) The reconciliation in segment assets ¥(525) million ($(6,413) thousand) is the result of elimination ofintersegment trades ¥(2,740) million ($(33,416) thousand) and the Group's assets of ¥2,214 million($27,004 thousand) which are not included in the reportable segment.
(3) The reconciliation in segment liabilities ¥7,553 million ($92,121 thousand) is the result of eliminationof intersegment trades ¥(2,446) million ($(29,830) thousand) and the Group's liabilities of¥10,000 million ($121,951 thousand) which are not included in the reportable segment.
(4) The reconciliation in depreciation of ¥(48) million ($(586) thousand) is the elimination ofintersegment trades.
(5) The reconciliation in increase in property, plant, and equipment and intangible assets of¥(180) million ($(2,202) thousand) is the elimination of intersegment trades.

2,760- 36 -

Consolidated Financial Statements

36

Notes to Consolidated Financial Statements*3 The calculation of the segment profit is based on the operating income on the consolidated statements ofincome.

Revenue by region for the year ended March 31, 2011 was as follows:
Millions of Yen
2011

Notes for the year ended March 31, 2011:*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 reconciliations is as follows:(1) The reconciliation in segment profit ¥(129) million is the elimination of intersegment trades.
(2) The reconciliation in segment assets ¥(492) million is the result of elimination of intersegment trades¥(2,628) million and the Group's assets of ¥2,135 million which are not included in the reportablesegment.
(3) The reconciliation in segment liabilities ¥7,604 million is the result of elimination of intersegment
trades ¥(2,395) million and the Group's liabilities of ¥10,000 million which are not included in thereportable segment.

Japan
Qatar
Papua New Guinea
Asia
Others¥ 120,990
64,232
29,47919,506
12,872

Total¥ 247,082

Note: Revenue is classified in countries or regions based on location of construction site.
The proportion of fixed assets placed in Japan is more than 90% in the total fixed assets of the Group. Accordingly, thepresentation of the information about fixed assets is not required under Japanese accounting standards.
(c) Information about Major Customers(4) The reconciliation in depreciation of ¥(19) million is the elimination of intersegment trades.

Year Ended March 31, 2012

(5) The reconciliation in increase in property, plant, and equipment and intangible assets of¥(164) million is the elimination of intersegment trades.

Name

Related Segment

Millions of Yen

Thousands of
U.S. Dollars

Esso Highlands Ltd.
Tokuyama Malaysia Sdn. Bhd

Engineering
Engineering¥ 69,856
28,815$ 851,902
351,411*3 The calculation of the segment profit is based on the operating income on the consolidated statements ofincome.
Related Information

Year Ended March 31, 2011(a) Information about Products and Services

Name

Related Segment

Millions of Yen

Qatar Liquefied Gas Company Ltd. III, IV
Esso Highlands Ltd.

Engineering
Engineering¥ 48,060
29,405The 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.
(b) Information about Geographical Areas(d) Information about Goodwill by Segments

Revenue by region for the year ended March 31, 2012 was as follows:Ending balance of goodwill as of March 31, 2012 and 2011, was as follows:

Millions of Yen
2012

Thousands of
U.S. Dollars
2012

Japan
Papua New Guinea
Malaysia
Middle East
Others

¥

94,92570,50830,57530,39828,267$ 1,157,626
859,855
372,872
370,716
344,727

Total¥ 254,675$ 3,105,798

Millions of Yen
2012
2011

Thousands of
U.S. Dollars
2012

Engineering
Other*

¥ 716

¥ 757

$ 8,736

Total

¥ 716

¥ 757

$ 8,736* Other involves temporary staffing services and IT services.

******- 37 -

37

Consolidated Financial Statements

Consolidated Financial Statements

38

INDEPENDENT AUDITOR’S REPORT

39

Consolidated Financial Statements

Minatomirai 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.