C H I YO D A
REPORT

2021
Energy and Environment in Harmony

Introduction

Unlocking the Future ofGreen Energy throughthe Power of Engineering

Our Materiality

Following an assessment of our businessgoals and with the aim of resolving global
issues and realizing economic growth,
SDGs 7, 9 and 13 have been identified ashigh priority for the Group.

Initiatives aimed at a carbon-free, recycling-based society are rapidly proceeding worldwide.
With our unique SPERA* HydrogenTM at the core of our technologies and by combining
our engineering expertise with cutting-edge AI and digital technologies, we contribute to
the realization of a carbon-neutral society.
* A Latin word for “hope”

1

Introduction
Introduction

CONTENTS
Introduction

Foundation Underpinning Sustainable Growth

3
4
6
8

42	Special Feature: Roundtable Discussion
between Human Resources Officers
45	Reinforcing Human Resources(Talent Management)
46 Corporate Governance
52 Risk Management
53 Compliance
54 Safety Management
56 Global Human Resource Development
57 Social Contribution Activities

Corporate Philosophy and Business Vision
Message from the CEO and the COO
Message from the CFO
Medium-term Management Plan Update

Chiyoda’s Value Creation
14 Chiyoda’s History
16 Value Creation Story
18 The Chiyoda Group’s Green Energy Vision
20	Roundtable Discussion: Our Vision for
Addressing Climate Change
26	Special Feature: Our Priority Issues of
Chiyoda's SDGs Materiality
Business Strategies

Data Section

Corporate Philosophy
Enhance our business in aiming for harmony between energy and the environment andcontribute to the sustainable development of society as an integrated engineering
company through the use of our collective wisdom andpainstakingly developed technology.
Every Chiyoda Group employee engages in corporate activities with this philosophy as
we strive for corporate group management that earns the trust and empathy ofall of our stakeholders, including shareholders, customers, business partners, employees,
and local communities.

60 Eleven-Year Summary
62 Key ESG Data
64 Corporate Information

Business Vision
A Grand Opportunity for the Future

30	Special Feature: Our Vision for the North Field
East LNG Project in Qatar
32	Our Strategy to Reduce CO2 Emissions andRealize a Carbon-free Society
34 Hydrogen Business
36 Energy Management Business
37 Life Science Business
38 Digital Transformation (DX) Business

The Chiyoda Group is committed to being an ‘Innovative’ Engineering Company,
shaping the future of energy and the global environment with
passion and cutting-edge technology.

Editorial Policy

Disclaimer Regarding Forward-Looking Statements

CHIYODA REPORT 2021 is intended as a communication tool to comprehensively
inform all stakeholders, including shareholders, investors, business partners, customers, directors, employees and society, of the Chiyoda Group’s management
policies, business strategies, financial status, corporate values, growth potential,
and activities toward realizing a sustainable global society. We strive to improve
the quality of information contained in the report to strengthen the awareness of
the Chiyoda Group among all stakeholders and the wider community.

Statements in CHIYODA REPORT 2021 are forward-looking, based on information available at the time of issuance. Readers should be aware that actual
results may differ materially from such statements due to a number of factors.
Please refer to the following website for further information on the Chiyoda Group.

Supplementary Resources for the CHIYODA REPORT

https://www.chiyodacorp.com/en/
Financial Information

Non-Financial Information

Collection ofhighly relevant
information

CHIYODA REPORT (Integrated Report)

Annual Securities Reports

OnlineInformation for Investors

OnlineSustainability

https://www.chiyodacorp.com/en/ir/

https://www.chiyodacorp.com/en/csr/
Comprehensive
information

2

Chiyoda Corporation CHIYODA REPORT 2021

3

Introduction
Introduction

Message from the CEO and the COO
Adapting to Our Changing Business
Environment
We will continue to transform our business portfolio and use
the rapid changes in our internal and external business environments, driven by the accelerating transition to a decarbonized society, the growth of life sciences from increasing healthawareness in an aging society and digital innovation initiatedby expanding AI and Information and Communications Technology (ICT), as growth opportunities.
The Chiyoda Group has improved its financial health, developed a sophisticated risk management structure, enhanced
corporate governance, improved its EPC execution and management capabilities and reinforced its human resources on
the basis of our medium-term management plan, ‘Chiyoda’s
Revitalization Plan–Initiatives for Revitalization and the Future’,released in May 2019. We have steadily executed projects
around the globe, including large-scale LNG projects in the
USA and Indonesia, and have secured an order for the world’s
largest LNG expansion project in Qatar.
We updated our medium-term management plan in May
2021, in line with steady growth, to strengthen existing businesses to realize stable revenue and accelerate our expansion
into new fields.

Strengthening Our Ability to Generate
Consistent Earnings
As projects in the engineering industry increase in size, complexity and duration, stringent and comprehensive risk management procedures are required to mitigate escalating
execution risks, while leveraging the Company’s technicalprowess and project management skills, to generate consistent revenue streams and strengthen our financial base.

We will help realize harmony between
energy and the environment in pursuit ofsustainable growth in the rapidly changing
business environment.

By anticipating the changes in our business environments,
effectively combining our technologies and collaborating withlong-standing and trusted business partners, we will add
value to our business by delivering pioneering engineeringsolutions to our customers that resolve society’s challenges.
We will also add value by expanding our new businesses in
the growth fields of hydrogen, carbon recycling, renewableenergy, energy management and life sciences and continuingwith digital transformation.

Contributing to the Realization of a Sustainable Society through Our Engineering
Strengths
Chiyoda has grown and developed by adapting to its changing business environments while continuing our Company’s
founding principle of “serving society through technology”,
embraced by all Chiyoda colleagues.
As the business environment, industry structure and global
society’s needs increase in complexity, the Company’s traditional engineering strengths will endure and Chiyoda will continue providing solutions to our customers that deliver on theneeds of each generation.
We will continue implementing our medium-term management plan, while ambitiously working to resolve society’s challenges by embracing our corporate philosophy of ‘enhancing
our business in aiming for harmony between energy and theenvironment and contributing to the sustainable developmentof society’ to realize sustainable growth by fulfilling stakeholder
expectations, and we look forward to their continued support.

Masakazu Sakakida

Masaji Santo

Chairman of the Board, CEO & CWO*1

President, COO & CSO*2*1 Chief Wellness Officer*2 Chief Sustainability Officer

4

Chiyoda Corporation CHIYODA REPORT 2021

5

Introduction

We will continue strengthening our businessfoundations and implementing financial
strategies to facilitate sustainable growth.

Introduction

Message from the CFO

Improving Our Financial HealthEnhancing Our Ability to Secure Funds

In the two years since launching our medium-term management
plan, ‘Chiyoda’s Revitalization Plan–Initiatives for Revitalizationand the Future’, we have steadily accumulated profits andimproved our financial health.
In the first quarter of fiscal year ending March 31, 2022,
we posted an extraordinary loss to eliminate past project
uncertainties and ensure future stability and growth.
Our aim is to proceed according to our medium-term
management plan, transform our business portfolio and consistently generate profits, thereby increasing capital andimproving our financial health.

As our external business environment changes, enhancing
our ability to secure sufficient working capital from the stable
execution of existing projects for use in strategic investments
geared to sustainable growth is critical. We will therefore continue improving the estimation and monitoring of ongoingprojects, in terms of profitability and financing, while stringently managing cash flows.
We will promptly secure funds by diversifying and enhancing our funding avenues by establishing cooperative operations with business partners and through dialogue withstakeholders, public funds and subsidy programs.

Allocating Funds for Future Growth

Shareholder Returns

The transformation of our business portfolio is designed to
upgrade our existing businesses while hastening the development of new businesses for our future, strengthen our business foundations and provide sustainable growth. We will
therefore allocate funds though an optimal balance between
enhancing our current businesses and accelerating the development of new ones.
Strengthening our existing businesses requires capital
investment, primarily for reforming EPC work processes andenhancing our project execution capabilities. To accelerate
the development of new businesses, we will inject additional
funds into our carbon neutral and life sciences fields andincrease investment in digital transformation, further adding
value in these fields.

We are striving to fulfill shareholder expectations by accumulating profits and increasing capital to restore dividends assoon as possible.
In fiscal year ended March 31, 2021, the Group moved
closer to reinstating dividends on common stock for shareholders by paying dividends on preferred shares. Our focus isto transform our business and earning structure according to
the medium-term management plan and deliver on management’s commitments to increase profits and provide dividends
at the earliest opportunity.
I look forward to the continued understanding and support of all our stakeholders.

Koji Tarutani
Representative Director,
Executive Vice President & CFO

6

Chiyoda Corporation CHIYODA REPORT 2021

7

Introduction

In May 2019, Chiyoda announced its Medium-term Management Plan, ‘Chiyoda’s Revitalization
Plan–Initiatives for Revitalization and the Future’. In the first two years of the plan, we strengthened ourfinancial position and established a business structure geared to revitalization and growth.
Our business environment changed beyond expectations during this period, including the acceleratingtransition towards a carbon-free society, and Chiyoda announced its updated Medium-term Management
Plan in May 2021. We will continue pursuing a stable revenue structure and consolidating our businessportfolio by continuing to secure revenue in our existing businesses while reinforcing new ones.

Introduction

Medium-term Management Plan Update(2) A Solid Foundation for Future Growth
We are refining our organizational structure to promote hydrogen and carbon recycling, energy management, life sciences anddigital transformation growth strategies.
Improved Organizational Structure

Strategies

Established the Frontier Business Division (October 2019)

Pursue new businesses in the fields of hydrogen and carbon
recycling, new energy and life sciences

Established the Digital Transformation Division (July 2019)• Combine engineering expertise and digital and AI technologies todeliver innovative digital solutions• Promote workstyle reform through Company-wide digitalization

Established TIS Chiyoda Systems Inc. in a joint venture with TIS
Inc. (October 2020)

Reinforce the Group’s IT infrastructure

Please refer to the website below for further information updates on our Medium-term Management Plan.

	https://www.chiyodacorp.com/en/ir/managementstrategy/plan/

2. Quantitative Targets and Progress to Date

Medium-term Management Plan in Review (fiscal years ending March 31, 2020 and 2021)

Increased shareholders equity ratio through profit growth, eliminated accumulated losses and reduced fixed costs while accepting orders as a result of the NFE LNG project in Qatar.

1. A Business Structure Geared to Revitalization and Growth

Achieving five-year net profit*1 targets will likely be delayed due to the drastic changes in our business environment.
Objective(1) A Solid Foundation for Revitalization

Our Five-Year Plan

• Two-year total*2
Annual
LNG and gas projects: Approximately ¥850.0 billion•L NG and gas projects: ¥200.0 billion to ¥450.0 billion
	Global environmental projects: Approximately• Global environmental projects: ¥100.0 billion to¥200.0 billion¥150.0 billion• Secured the NFE LNG project in Qatar• Transform the earnings structure to consistently
generate ¥10.0 billion to ¥20.0 billion in net profit
Realized profits of ¥20.0 billion• Accumulate ¥90.0 billion in net profit over five years

All measures required to establish a solid foundation towards revitalization are progressing as planned.
Order target

Measures and Progress

1

Developing the Risk Management Structure

Developing risk management and project execution
structures

Enhanced corporate governance2

Net profit• Developing the integrated risk management systemthrough the Strategy & Risk Integration (SRI) Division,launched in July 2019
• Selecting projects in line with our human resources strategy• Ratio of ‘outside directors’ on the Board of Directors
increased to approximately 40% and enhanced externalmonitoring functions• Separated management supervision and business execution (restricting Directors who also serve as Executive
Officers to the President and the CFO)

Increase shareRestore to 20% or greater
holders equity ratio
Eliminate accumu- Eliminate accumulated losses during the Revitalization
lated losses
Plan period
Reduce consolidated selling, general and administraReduce fixed costs
tive (SG&A) expenses to ¥15.0 billion(¥ billion)

%(¥ billion)

100

20

1,200

11.0

• Established a Construction Division in April 2020 andstrengthened the organizational system• Improved real-time monitoring of project execution andestimation accuracy through the introduction of Chiyoda
AWP* and integrated data management• Strengthened contract and subcontract human resources
and management

Reinforcing Human Resources• Enforce meritocratic selection, diversify skill sets andproactively recruit external talent

8

Chiyoda Corporation CHIYODA REPORT 2021

1,126.1

0• Deployed a new human resource system in April 2021

8.0

–60.1

898.8

900

36.4

6.3

771.6
0

12.2 24.4

811.8

600

300

–50

179.8

* Chiyoda Advanced Work Packaging is a process whereby construction work is packaged through integrated management to optimize the EPC process fromengineering and procurement to construction, commissioning and handover

3

Eliminated accumulated losses through profit growth
and reduction of capital
Posted consolidated SG&A expenses of ¥13.0 billion
in fiscal 2021

1,016.450• Strengthen construction execution

11% (as of March 31, 2021)

New Orders / Backlog

Profit / Shareholder’s Equity / Shareholders’ Equity Ratio

Enhancing EPC Execution and Management• Enhance EPC execution and management

Progress to Date (fiscal years ending March 31, 2020 and 2021)

–17.1

–250

–214.9ProfitShareholder’s Equity

2019/32020/32021/3

Shareholders’ Equity Ratio (Right Axis)–20

0

2019/3
New Orders

2020/32021/3

Backlog*1 Net income (loss) attributable to owners of the parent*2 Global environmental projects include domestic refinery and petrochemical projects and international metal projects.

9Introduction
Introduction

Medium-term Management Plan Update

Future Business Strategy

Our Vision for 2030

We will continue to monitor the macroeconomic accelerating

2030. We will continue to transform our business portfoliotransition to a carbon-free society as we advance towards

and improve profits by leveraging our collective engineering

carbon neutrality by 2050, while maintaining our vision forstrengths and commercialization capabilities.

Awareness of the Business Environment - The Accelerating Transition to a Carbon-free Society
1. Increasing the Use of Low-carbon andGreen LNG

Primary Energy Consumption Worldwide

1. We will contribute to the accelerating transition to a hydrogen, carbon-free society and the realization of carbon neutrality by
2050 by combining our unrivaled engineering expertise with our advanced technology prowess.
2. We will transform our business portfolio by pursuing growth in the carbon-neutrality and life sciences fields, generating a 50/50
split in profits from existing and new businesses, while creating and strengthening models for recurring business. Figure 1
3. By achieving 1. and 2. above, we will transform our earnings structure to generate a consolidated net profit of ¥30.0 billion or
greater. Figure 2

Profit Ratio between Existing and New Businesses (Target) Figure 1

Gtoe	

[2 0 2 0 ]25

Profit Goal Figure 2(¥ billion)40[2 0 3 0 ]As pragmatic solutions for addressing increasing energy
demand in the transition to a carbon-free society, demand for30

20

natural gas and LNG is expected to remain strong. Demand
for renewable energy, such as solar and wind power, will likely

10% 90%15experience dramatic growth.

50% 50%

20

10

10

2. The Accelerating Transition toa Carbon-free and Hydrogen Society

5

The global drive towards carbon neutrality by 2050 is acceler-

Existing businesses0

New businesses

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

0

2018

ating. Initiatives include using hydrogen as a viable energy

Coalsource due its minimal greenhouse gases (GHG) emissions

Oil

2030

Natural gas

2040

Nuclear

2050

Renewables

Source: IEEJ Outlook 2021, The Institute of Energy Economics, Japanand targets are being established worldwide for hydrogen

Business Portfolio Transformation
EPC in existing fields currently accounts for the majority of the Chiyoda Group earnings. We will transform our business portfolio

consumption and numbers of operational fuel-cell vehicles

by increasing EPC activities in new decarbonization and life sciences fields to generate revenue, while expanding recurring busi-(FCVs) by 2030.

nesses, including licensing, catalyst, digital solutions and business investment.

The transition to a hydrogen society is a business opportunity for Chiyoda and we are evaluating a number of initia-

Breakdown of Pre-tax Profits Generated by the Business Portfolio Transformation (Planned)

tives using our proprietary SPERA HydrogenTM technology.
Recurring businesses

Public Policy Goals across the GlobeCountry/Region

Japan

Public Policy Goals
GHG Emission Reduction Targets to be achieved by 2030

46% reduction compared to 2013 levels

Hydrogen Utilization and Application Target

Hydrogen Utilization and Application targets
2030: 3 million tons per year
2050: 20 million tons per year

2

Recurring businesses

1

EPC in new fields

Newbusinesses

30%

EPC in new fields

EPC in existing fields

EPC in existing fields

EPC in existing fields

Current

Fiscal 2025

Fiscal 2030

Newbusinesses

50%

USA
State of California
Europe50%-52% reduction compared to 2005 levels

55% reduction compared to 1990 levels

The number of operational FCVs: 1 million units
Number of hydrogen stations: 200 locations
Hydrogen production: 0.4 billion tons
Electrolytic hydrogen production capacity: 40 GW
Supply: 10 million tons per year
Develop an FCV supply chain

China

10

Commence lowering CO2 emissions by 2030 andachieve net-zero emissions by 2060

Chiyoda Corporation CHIYODA REPORT 2021

The number of operational FCVs by2025: 50,000 units per year2030-2035: 1 million units per year
Number of hydrogen stations by
2025: 300
2030-2035: 1,000

Expand EPC activities in decarbonization andlife sciences fields

enewable energy (solar, wind), energy storage and1 • Rpower
management plants

Expand EPC activities in carbon-neutrality•H ydrogen/ammonia, carbon-recycling value chain facilities• Life science plants

2

Expand sources of stable revenue by leveraging technologicalfoundations and business investment• Licensing and catalyst revenue from the decarbonization field• Subscription revenues for digital solutions• Return on business investment in decarbonization andlife sciences fields

11

Chiyoda’s Value Creation

Chiyoda’s Value Creation
In this section, we describe Chiyoda Corporation’s vision for a sustainable
society and our pursuit of “Energy and Environment in Harmony.”

CONTENTS
14

Chiyoda’s History

16

Value Creation Story

18	The Chiyoda Group’s Green Energy Vision
20	Roundtable Discussion:
Our Vision for Addressing Climate Change
26	Special Feature:
Our Priority Issues of Chiyoda’s SDGs Materiality

12

Chiyoda Corporation CHIYODA REPORT 2021

13

Chiyoda’s Value Creation

600,000

Continuing our vision of ‘serving society through technology’ and embracing the corporate philosophyof ‘Energy and Environment in Harmony’, Chiyoda has grown and developed by anticipating thechanging requirements of each generation and meeting their needs. We will continue to harness ourengineering prowess to support future generations in the quest for renewable sources of energy fora cleaner global environment and a sustainable society.

Chiyoda’s Value Creation

Chiyoda’s History

400,000

Revenue(¥ million)
200,000

The Dawn of Chiyoda

Period of Resurgence

Period of Rapid Growth

Period of Transition

For the Future GrowthFoundation of
Chiyoda0

1948

Social Trends

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

The Dawn of Chiyoda

Period of Resurgence

Period of Rapid Growth

Period of Transition

For the Future Growth

1948—1970

1971—1990

1991—20102011—20182019—• Market changes resulting from the two oil crises• Growing demand for oil• Accelerating overseas production as a result of the Plaza Accord(period of strong Japanese yen)

• Period of high economic growth• Collapse of the ‘bubble economy’ and surging oil
prices• Growth in LNG demand worldwide(FY)• Adopting the Paris Agreement recommendations • Accelerating transition towards decarbonization andcarbon neutrality
and the increase in climate change requirements
worldwide• Innovation of AI and digital technologies• Shale gas revolution in the USA• Reinforcement of life sciences technologies• Executing Green LNG initiatives
Chiyoda’sBusiness
Initiatives• Contributing to Japan’s industrial reconstruction
through engineering• Promoting ‘Company-wide internationalization’• Full-scale participation in LNG projects•Executing large-scale petroleum/petrifaction projects
overseas• Expanding into fields of general industrial facilities and non-ferrous metals•
Executing large-scale LNG projects
overseas•
Accelerating hydrogen and decarbonization
measures• Entered renewable energy field• Promoting digital transformation• Strengthening life sciences fields• Commenced full-scale environmental conservation

Environment
Technology•D eveloped CT-121 flue gas desulphurization technology®

• Developed CT-CO2ARTM (CO2 reforming
technology)• Developed SPERA HydrogenTM• Commenced CCS* initiatives• Developing technology for storing and transporting large volumes of hydrogen over long
distances at ambient temperature and pressure* Carbon dioxide capture and storage

Projects

14

1960

1976

1984

1994

2011

2020

Mitsubishi Oil Co., Ltd.
Secured order for Mizushima grassroots refinery

Abu Dhabi Gas Liquefaction Company Limited(United Arab Emirates)
Constructed an LNG plant on Das Island (Abu Dhabi)

Constructed the Petromin-Mobil Yanbu Refinery(Saudi Arabia)

Crown Prince and Princess visit LNG plant construction site in Ras Laffan Industrial City, Qatar

Secured order for the Nagasaki Solar Energy Co.,
Ltd.

Completed demonstration of the world’s first international hydrogen supply chain (Brunei-Kawasaki,
Japan)

1969

1977

1989

2004

2014

2021

Fuji Oil Company, Ltd.’s Sodegaura Refinery
Secured order for expansion of No. 2 plant

Secured an order for the Kaduna Refinery for
NNPC (Nigeria)

PT Pupuk Kalimantan Timur (PKT)
Constructed a fertilizer plant

Secured orders for LNG plants for Qatargas Operating Company Limited (Plants 3 & 4)

Secured order for the Cameron LNG Plant in theUSA

Executing the large-scale North Field East LNG
project in Qatar

Chiyoda Corporation CHIYODA REPORT 2021

15

Chiyoda’s Value Creation
Chiyoda’s Value Creation

Value Creation Story
Framing the achievement of our selected three SDGs (“Chiyoda’s SDGs Materiality”) as our priority management issues, we will exploit our core competencies to implement our Medium-term Management Plan,‘Chiyoda’s Revitalization Plan—Initiatives for Revitalization and the Future’, and support the realization ofa hydrogen society and carbon neutrality.

Our Priority Management
IssuesBusiness Strategy

Management Resources / Core Competencies

Our Solutions

Chiyoda’s SDGs Materiality

Reliability
State-of-the-art industrial facilities deliveredin over 70 countries worldwide

Our Strengths

Medium-term Management Plan

Value CreatedHydrogen and the carbon
cycling value chain

Energy and Environment
in Harmony

Chiyoda’s Revitalization Plan
—Initiatives for Revitalization and the Future

Human Capital

AFFORDABLE AND

High-caliber engineers

CLEAN ENERGY

Updated plan announced in May 2021

Integration and
Optimization

Intellectual Capital
Expertise accumulated as a pioneer ofthe engineering industry
CLIMATE ACTION

Project
Execution
Capabilities

Business Portfolio Innovation
Existing Businesses

New Businesses• LNG and gas• Petroleum andpetrochemical• Metals• Industrial facilities• Hydrogen and carbon
cycling• Renewable energy• Energy management• Life science90%

Social and Relationship Capital
Extensive client andsupplier networks

Financial Capital

Proliferation of clean
energy and ‘Green LNG’

50% 50%

Energy utilization
optimization

Realization of ahydrogen society
andcarbon neutrality

10%

Capability to
Implement New
Technologies

2020
Existing businesses

INDUSTRY, INNOVATION

2030
New businesses

Digital Transformation

AND INFRASTRUCTURE

Risk Management

ComplianceReinforcing
Human Resources

SQEI*

Social contributions

Respect for human rights* Safety, Quality, Environment and Information
security

Corporate Governance

The Chiyoda Group’s CSR Values(Shared Values)

16

Chiyoda Corporation CHIYODA REPORT 2021

A reliable company

Environmental initiatives

Commitment to fairness

17

Chiyoda’s Value Creation

By combining the Chiyoda Group’s unrivaled engineering expertise and AI and digital technology prowess,and collaborating with partners to leverage their expertise, networks and technologies, we will contributeto the realization of a hydrogen, carbon-neutral society through the development of technological solutions
for the green energy value chain.

Our Initiatives in Support of the Task Force on Climate-related Financial Disclosures (TCFD)

2

Chiyoda declared its support for the recommendations of theanalysis on climate change in March 2020. We incorporated theTask Force on Climate-related Financial Disclosures (TCFD) in

scenario analyses results into our growth strategies to embrace

2019, and participated in the Ministry of the Environment’s ‘Proj-

the climate change challenge in our business practices and will

ect to Analyze Scenarios of Climate Risks and Opportunities incontinue to raise our information disclosure standards in line

accordance with TCFD’, including conducting a trial scenario

with the recommendations of the TCFD.

Chiyoda’s Value Creation

The Chiyoda Group’s Green Energy Vision

Please refer to the websites below for details of our scenario analysis.
•‘Practical Guide for Scenario Analysis in Line with the TCFD Recommendations Ver. 2.0’ (3-29–3-36)	http://www.env.go.jp/policy/tcfd.html

1

Our Pursuit of a Green Energy Value Chain• Chiyoda Corporation’s corporate website

	https://www.chiyodacorp.com/en/csr/environment/business-activities.html(1) Our vision• Promote the utilization and application of hydrogen in a wide range of industries to support the realization ofa carbon-free society• Optimize energy management to reduce costs and eliminate carbon emissions(2) Business Strategy Overview

Scenario Analysis Assumptions
Assumptions

2040

Scenario

2˚C scenario: Promote countermeasures against climate change (introduction of carbon tax, etc.)
4˚C scenario: Without countermeasures (no carbon tax, etc.)

Reference data

WEO* 2019 data (other data used as a reference in lieu of inadequate data)

Sectors subject to analysis

EPC fields• LNG, petroleum and petrifaction, green energy plants
Non-EPC fields • Hydrogen• Carbon dioxide Capture and Utilization (CCU)• Distributed composite utilities

We will exploit our technological expertise in CCUS*, Green LNG, renewable energy and hydrogen, including Chiyoda’s ‘in-house’
SPERA HydrogenTM technology, and will optimize our energy management systems to develop a green energy value chain that

TargetTarget year

meets industrial decarbonization requirements and supports the realization of a carbon neutral society.

* World Energy Outlook, announced by the International Energy Agency (IEA) each fall

*Carbon dioxide capture, utilization and storage

Policy on Countermeasures and Business Strategies for 2˚C Scenario
Energy Source

Conversion/Transport

User
Sectors Subject to Analysis

Oil andnatural gas

Industries Utilizing Hydrogen
CO2 reduction

Green LNG

Power generation

Separation
and refining

CCUS

Provided services tailored tobusiness reorganization

Petroleum and petrifaction

Optimizing client assets
through the use of digital AI
technology

Automotive and Mobility
Chemical materials

H2

Policy on Countermeasures

LNG

Hydrogen reduction steelmaking

CO2

2˚C
Scenario

CCU

Early entry into markets tosecure market share in lieu ofincreasing demand from theaccelerating transition to a
low-carbon/carbon-recycling
society

Green energy plants

Launched a utility business tomeet the increasing demand

HydrogenHeat source

Hydrogen/ammonia supply
chain solutions
Energy storage / energy management / microgrids

Renewable energy

Business Strategies

Disclosure within CHIYODAREPORT and references• Green LNG initiatives
Incorporated CO2 capture and storage
facilities into LNG plant construction to
reduce GHG emissions• Leveraging the EFEXISTM brand to deliver
innovative digital solutions to optimize plant
operation and maintenance and reduce
GHG emissions

P32-33 Business Strategies
Our Strategy to Reduce CO2Emissions and Realize a
Carbon-free Society
P38-39 Business Strategies
Digital Transformation (DX)Business• Created a value chain for Chiyoda’s ‘in-house’
P34-35 Business Strategies
SPERA HydrogenTM technology• Promotion, and participation in, cross-industry Hydrogen Businessregional hydrogen deployment projects• Commenced technology development for
capture and storage of CO2 to realize afuture carbon-recycling supply chain

P32-33 Business Strategies
Our Strategy to Reduce CO2Emissions and Realize a
Carbon-free Society• Expansion of EPC operations in renewableenergy, energy storage and energy manP36 Business Strategies
agement systems
Energy Management Business• Launched an energy utilization optimization
business

New business opportunities for the GroupEPC in existing fields
EPC in new fields
Recurring businesses

18

Chiyoda Corporation CHIYODA REPORT 2021   Hydrogen    Electricity    Others

19Chiyoda’s Value Creation

The global drive towards carbonization is accelerating in line with the increasing importance of climatechange. Outside Director Nobuo Tanaka, an expert in energy-related issues, discussed how, as an engineering company, Chiyoda can contribute to the Japanese government’s goal of achieving carbon neutrality by 2050 with a group of both young and experienced Chiyoda colleagues.

meet global environmental challenges for the benefit of society is essential to improve business performance.
We are also seeing considerable shifts on the financial
front and the more than 450 Japanese companies declaring
their support for the TCFD recommendations as of July 2021,
following Chiyoda’s support in 2019, has grown exponentiallyduring COVID-19. I believe this increase is especially due tothe propensity of younger generations to realize a sustainableglobal environment. The world will not return to pre-COVID-19
conditions and thriving companies need to adapt to thechanging global business environment.
I am looking forward to hearing all your views and I trustthat we can share our thoughts openly in discussing the issues
to address, and other topics, and how Chiyoda and we as individuals can support the realization of a carbon-free society.

Chiyoda’s Value Creation

Roundtable Discussion:
Our Vision for Addressing Climate Change

Contributing to Society through Hydrogen and Carbon

Yukihiro Shibahara

Aki Ikejiri

Takami Yao

Osamu Ikeda

Business Development Department 3,
Business Development DivisionCorporate Services Department

Gas & LNG Process Engineering
Department

Hydrogen Business Department

Haruna Takagawa

Nobuo Tanaka

Taichiro Masagaki

Carbon Management Business Office,Business Innovation Department

Outside Director
Former Executive Director of International
Energy Agency

Refinery Petrochem & New Energy Process Engineering Department, Carbon Management Business
Office, Business Innovation Department

Introduction
Tanaka Chiyoda Corporation is a socially responsible company and, in the six years since I became an Outside Director,
the company has navigated the transition from coal andpetroleum to LNG as a major source of global energy. By
actively working towards more efficient and cleaner energy
across the globe, Chiyoda actively contributes to society.
LNG, the Company’s core business since the 1990s, is evolving in parallel with the trend towards a carbon-free society
and continues to grow, extending Chiyoda’s successful trackrecord of delivering projects worldwide, primarily in the USA
and Qatar.

20

Chiyoda Corporation CHIYODA REPORT 2021

As the pursuit of decarbonization accelerates and headwinds against petroleum and gas increase, the world is proceeding along the correct path towards clean, renewablesources of energy. The actions of major corporations, such as
the American IT giants of Google, Apple, Facebook, Amazon,and Microsoft in declaring their support for the realization of
net-zero greenhouse gas (GHG) emissions throughout theentire supply chain by 2030, 20 years ahead of the target set
by the government, is essential. Corporations on both sidesof the supply and demand balance are realizing that collaboration and a common approach towards clean energy to

Ikeda I have been involved in the development of SPERA
HydrogenTM since the hydrogen business was established in
April 2011, not long after the Great East Japan Earthquake.
Due to that devastating event, there was immense pressure
to revise our energy policies, including reassessing the role ofnuclear power.
Hydrogen began to attract attention as an alternative
source of energy at that time. In 2014, three years after thelaunch of our SPERA HydrogenTM initiative, the Japanese government became the world’s first organization to unveil astrategic road map for hydrogen and fuel cells, followed bythe ‘Basic Hydrogen Strategy’ announcement in 2017. However, factors such as the lack of widespread awareness of theimportance of reducing CO2 emissions, led to an inability to
implement economic measures.
The challenges in our industry are changing according to
the accelerating shift towards global decarbonization of thelast two years. The importance of effectively managing environmental issues has become more recognized and a paradigm shift is taking place as companies address such issues
through their business activities, presenting both risks andopportunities to our business.
As society continues with this change, our medium tolong-term goal is to implement a hydrogen value chain anduse our hydrogen technology to support the realization of asustainable society. We will utilize our technological development and integration strengths and will collaboratively engage
with energy and trading companies and other business

partners. Establishing a hydrogen value chain will hasten thedevelopment of an even more sustainable energy systemfrom the perspective of making effective use of carbon. In thelong term, renewable energy and hydrogen as the ultimate
clean energy will be our main source of energy. Carbon will be
integrated with hydrogen and converted into chemicals or
used in battery production. Our goal is to integrate renewableenergy, hydrogen and carbon.
Chiyoda is also pursuing commercializing the use of carbon and will leverage its strengths as an integrated engineering company while playing an important role by anticipating
the changes that lie ahead.

21

Chiyoda’s Value Creation

Enhancing the Chiyoda Brand by Providing Cutting-edge Solutions
Yao Society’s demands for decarbonization by reducing CO2
emissions have increased since I joined Chiyoda in 2015 andthe global transition to alternative, cleaner sources of energy
is a business opportunity for our Company.
I have been involved in the process engineering of LNG
plants since joining Chiyoda and have experienced theincreased emphasis on reducing LNG plant CO2 emissions totackle climate change, including both minimizing CO2 generation during LNG production and recovering CO2 already emitted. Chiyoda uses AI to improve energy efficiency to tackle
the former and our carbon dioxide capture and storage (CCS)
technology, capturing and storing emitted CO2, and capture
and utilization (CCU) technology to reuse the recovered CO2,
to tackle the latter.
I am currently responsible for the NFE LNG Project in
Qatar, secured in February 2021. Our client, QatarEnergy, hasa declared goal of reducing all Qatar’s LNG plant GHG

emissions by 25% by 2030. Our proposals to reduce CO2
emissions from our plants, minimize on-site power generation
facilities by receiving power from existing power plants andusing CCS technology have been adopted by clients. Because
the thermal efficiency of existing power plants is greater thanour on-site power generation facilities and renewable energy
is used to generate some power from the existing power
plants, CO2 emissions are reduced.
Chiyoda generates much of its business, including NFE,
based on our successful track record of delivering world-classstate-of-the-art projects and developing collaborative longstanding robust working relationships with our clients foundedon reliability. By promptly responding to the changing needsof our clients and consistently providing cutting-edge solutions, we will further strengthen our existing client relationships and, by promoting our corporate brand, enhance our
global presence.
Tanaka Chiyoda has a long history of successfully delivering
LNG projects in Qatar and we will promote our hydrogen and
CCS technology, in addition to LNG, based on our reputation
for reliability and transparency. By delivering on our customers
current requirements, while also proposing solutions to futureneeds, we will further strengthen our existing relationships
and foster new associations with valued customers.

CCU for material production will likely gain popularity inthe future. For example, CO2 can be converted into plastic
and concrete materials. While CCS technology can store
CO2 underground, storing all of the CO2 emitted using CCS
technology will be impossible, and monitoring the stored CO2
will entail long-term costs. Because lifestyle needs will continue to be essential, we must be open to utilizing CO2 bymaterial means.
Regardless of whether CO2 will be used to produce natural gas as synthetic methane or converted into materials suchas plastic, an extensive amount of green hydrogen (fromrenewable energy sources), will be required in order reuse
CO2 in such forms. Hydrogen atoms are found in many
objects in our daily lives, including plastic PET bottles andpolyethylene. As such, the demand for CCU-related greenhydrogen will strengthen drastically from 2030 onward, raising concerns over the intense competition for green energythat will likely take place on a global scale.
Based on these assumptions, Japan will be uncompetitive in terms of cost for hydrogen and energy transport, due
to its geographical location and domestic industry challenges
towards realizing decarbonization in the near future. For thatreason, the Japanese government must seriously consider
undertaking measures that will ensure that its country remains
competitive on the global stage. Due to the high hurdles
involved in realizing decarbonization from the perspective ofensuring energy security, I believe we are at a stage wherebold action must be taken over the medium to long term in
the form of the “Asia Super Grid” project, encompassing
sharing natural energy between Asian countries.

Chiyoda’s Value Creation

Roundtable Discussion: Our Vision for Addressing Climate Change

Tanaka While it may be challenging to transport large volumes of energy from certain countries in light of energy security, the Asia Super Grid is certainly not ‘out of reach’ as longas hydrogen can be imported as another solution.
Extracting hydrogen from gas in Russia and using CCS orcreating energy from hydropower for transportation via pipelines to Japan is also worthy of consideration. A range ofoptions should be considered for Japan to remain globallycompetitive.

Advancing the Energy Transition through CCU Technology
Looking One Step Ahead of Decarbonization Technology
Masagaki When I joined Chiyoda in 1999, my wish was towork in an environment-related division. I have therefore
observed the global drive towards decarbonization with greatinterest and, looking back over the last 20 years, am surprisedthat the trend did not commence sooner.
Realizing decarbonization, particularly using CCU, willencompass energy and material approaches.
In terms of urgency and handling volumes, CCU technology for the manufacture of energy carriers is taking precedence over similar technology geared to material production.
Examples include creating methane and jet fuel through CO2

22

Chiyoda Corporation CHIYODA REPORT 2021

and, while different from CCU, creating ammonia for fuel from‘clean’ hydrogen (from renewable energy). The low return on
overhead costs from using environmentally friendly energy
compared to conventional energy, such as coal and petroleum, was a disincentive for the shift to decarbonization which
did not therefore commence due to economics. However, thisobstacle was removed as a result of the increased importanceof ESG investment and the scrutiny of financial institutions
over conventional energy projects. The power of economic
rationality therefore also provoked the shift to decarbonization, which I find ironic.

Takagawa I remember discussing global environmental issues
and how the term “global warming” appeared in textbooks
when I was a child in school. However, few people were thenaware that this was a major problem. Over the last few years,
we have witnessed a drastic shift in the approach towards
decarbonization, which continues to this day.
I have been involved in plant design and construction in
the EPC business since joining Chiyoda 10 years ago. My
wish to contribute to realizing a sustainable global environment has strengthened as a result of the growing trend
towards decarbonization, and is one reason I wanted to join ateam tasked with developing new businesses in its pursuit. I
have been able to converse with university students in the pastand hear their views on the environment and was amazed attheir awareness and detailed knowledge of the 17 SDG goals.

23

Chiyoda’s Value Creation

When we study the measures being undertaken by theAmerican and European governments, we can assess theurgency with which they are addressing environmental issues.
Certain cases, such as when Royal Dutch Shell plc wasordered by a district court in the Netherlands to raise its
decarbonization targets, have been a catalyst for change. In
executing my responsibilities, I have also had the opportunity
to talk with institutional investors in Japan and discovered thatenvironmental awareness in Japan, both individually andorganizational, was below that of Europe and the USA due,
for the most part, to a ‘passive’ approach. Japanese institutional investors do not include factors such as GHG emissions when deciding on investments and this made me realizethat Japanese ESG investment is lagging behind Europe andthe USA. I also sensed that these regions are revamping
existing profits and industry structures to accelerate thedecarbonization progress more effectively. For these reasons,it may be a good idea for Chiyoda to initially advance into
Europe, establish a market position there and familiarize ourselves with their technologies and services before expandingin Japan, in a reverse import kind of way.

I am currently involved in a CCU project that involves
creating para-xylene from CO2. As previously stated by Mr.
Masagaki, both CCS and CCU will be critical to realizing
decarbonization. I hope to significantly contribute to energy
transition as the world implements measures in the pursuit ofdecarbonization.
Tanaka The Royal Dutch Shell court order had an enormous
impact on energy companies too as they have been highly
respected since commencing scenario analysis in the early
1970’s. Despite efforts to disclose measures for realizing carbon neutrality by 2050, the company was served with thiscourt order. Such cases demonstrate how the world is rapidlychanging.
As Ms. Takagawa stated, Europe and the USA are leading
Japan in environmental awareness, an area of increasing
importance for developing business in these regions. Conducting business with trading companies and other enterprises in Europe is very interesting.

Establishing a Presence in New Domains by Leveraging Our Sophisticated Technologies and Expertise
Shibahara Chiyoda has continued to grow through its corebusiness of large-scale, complex plant EPC work and leveraging its chemical engineering capabilities. However, thecompany will be unable to rely on these capabilities to thesame degree in the future because of the global trend towards
decarbonization, which includes renewable energy, hydrogenproduction through electrolysis and energy storage. Continuous and distributed type standalone equipment is now

24

Chiyoda Corporation CHIYODA REPORT 2021

mainstream for energy systems, meaning that Chiyoda’s
strengths differ from required technologies.
Under these circumstances, we are being urged toreshape our organization into a new Chiyoda by leveraging
our cultivated strengths. While there may be some urgent
technical obstacles to overcome, as long as we can effectively use our core competencies, we will be able to lead way
towards decarbonization.
Our technological capabilities will be key to continued
success. Even without the proprietary technologies for new
types of energy, proposing optimal solutions by measuring
the economical efficiency of our underlying technologies andequipment as a system integrator is an acknowledged value
and is unique to the Company. The ability to market products
manufactured through our distinctly Chiyoda craftsmanshipreflect our experience and current endeavors in the digitaltransformation field, supplying electricity and distributed
energy and our continuous dedication to technology is a further advantage. These products include complex energy
systems, such as heat supply utilizing green energy andhydrogen and decarbonization applications in the industriesof our expertise, and for sectors within which we will look toenhance asset values throughout the entire infrastructure lifecycle. From the perspective of leveraging our existing

technologies, we must propose technological assessments
and scale-ups along the upstream section of our energy system development process and develop a framework conducive to the stable generation of earnings in non-EPC fields.
Our safety design technologies, cultivated through our
EPC plant activities, have enabled us to secure orders forlarge-scale battery energy storage projects. Our expertise as
an engineering company can be used in many fields and I am
confident our departments can collaborate to enhance our
implementation capabilities.

Chiyoda’s Value Creation

Roundtable Discussion: Our Vision for Addressing Climate Change

Enhancing Corporate Value through Consistent Stakeholder Engagement
Ikejiri I have managed sustainability and social contribution
activities in the IR, PR & CSR Section since 2015.
Our most significant progress in CSR initiatives over thelast few years has been conducting TCFD scenario analyses.
As mentioned earlier by Director Tanaka, Chiyoda declared its
support for the TCFD recommendations in 2019 and conducted trial analysis during participation in the Ministry of theEnvironment’s Project to ‘Analyze Scenarios of Climate Risks
and Opportunities in Accordance with TCFD’. Scenario analyses were conducted based on a 4˚C scenario, in which measures are not undertaken in response to climate change, andon a 2˚C scenario, within which net-zero GHG emissions is
the goal for the second half of the 21st century. However, the2˚C scenario will need to be updated following further scenarios, such as a 1.5˚C scenario, by leading sustainability
companies in Europe and the USA. In these regions, politicalmeasures and financial backing are in place to aggressively
advance towards realizing carbon neutrality, with pressure
from financial institutions and non-governmental organizations (NGOs) to mitigate CO2 emissions and divest from fossil
fuels. I hope we can conduct more in-depth scenario analysis
in line with such advancements.
We have disclosed data for Scope 1 and Scope 2 emissions
and aim to do the same for Scope 3 emissions in the future.

I understand the dichotomy between proposing technological solutions and implementing expensive environmental
initiatives when controlling costs. Nonetheless, the extraordinary advances made by our clients to reduce CO2 emissions
will translate into tremendous business opportunities.
A priority issue for management under the current
medium-term management plan is the promotion of climatechange measures. We will promptly communicate the Company’s diverse initiatives, aimed at realizing the corporate
philosophy of ‘Energy and Environment in Harmony’, tostakeholders as part of the IR, PR & CSR Section's daily
activities, fulfilling our role in promoting our business andenhancing corporate value.
Tanaka Today has been a tremendously valuable experienceand I thank you all for expressing your opinions so candidly.
I sense that the drastic shifts taking place in our world arefelt deeply by all of you. We must therefore think seriously
about how Chiyoda can adapt our technologies to this changing environment. Successful companies have an abundanceof exceptional talent and technological seeds and I look forward to watching the younger generation, such as yourselves,
blossom into inspiring leaders in the years ahead.

25

Chiyoda’s Value Creation

Our Priority Issues of Chiyoda’s SDGs Materiality
Chiyoda implements a unique voluntary participation system whereby 70 employees are registered as
CSR Promotion Staff, encouraging CSR activities as part of their work assignments.
11 CSR Promotion Staff share their thoughts on how they can address Chiyoda’s SDGs Materiality
through their work. (Department affiliations are as of September 30, 2021.)

Chiyoda’s SDGs Materiality

Chiyoda Group’s Materiality

Chiyoda’s Value Creation

Special Feature:

Following an assessment of our business goals andwith the aim of resolving global issues and realizing
economic growth, SDGs 7, 9 and 13 have been

Please refer to the website below for further information on our materiality identification process.

identified as high priority for the Group.

	https://www.chiyodacorp.com/en/csr/csr/chiyoda-csr/materiality-assessment.html

AFFORDABLE AND CLEAN ENERGY

Kohei Tashima

My role is to design and procure electricalequipment for LNG plants. Working on the
NFE project in Qatar, the world’s largest
ever LNG plant, I am thrilled to be contributing to ensuring a stable energy supply
throughout the world. I will continue supporting Chiyoda’s endeavors to reduce
CO2 emissions, and provide cleaner energy
across the globe, by leveraging on ourengineering expertise combined with cutting-edge technologies.

Electrical System & Smart Grid
Engineering Department
Joined the Company in 2015

Jo InabaWith a view to realizing a hydrogen society,
I work on optimizing SPERA HydrogenTM
energy-saving features and overall operation to help resolve global sustainability challenges. The technology enables hydrogento be transported and stored at ambient
temperature and pressure. By using SPERA
HydrogenTM to manage hydrogen generated
with renewable energy sources, we aim tobuild the ultimate energy system with theability to produce CO2-free clean energy.

Hydrogen Business Department
Joined the Company in 2015

INDUSTRY, INNOVATION AND INFRASTRUCTURE

Hydrogen Business Department
Joined the Company in 2005

My decision to join Chiyoda stemmed frommy desire to help resolve environmental
issues. I am delighted to be currently working in the hydrogen field, the ultimate clean
energy with virtually no CO2 emissions. My
work includes explaining the features of
our technologies to clients looking to utilizehydrogen in their business and proposing
solutions to issues by presenting user-casescenarios. By creating a society within
which people use hydrogen in their everyday lives, I am delighted to be contributing
to realizing the goal of ‘affordable andclean energy’.

Masahito Tadauchi

My department works alongside otherdepartments of the Global Environment &Green Energy Project Operations Division
to design and build equipment and provide
maintenance services for the renewableenergy projects such as wind power andbattery storage systems. By collaboratingwith clients in renewable energy, we alignourselves with the global drive towards
reducing CO2 emissions and contribute toproviding clean energy for society.

Masaaki Oki

Global Environment & Green
Energy EPC Support
Department
Joined the Company in 2007

So Ishii
Business Development Department 2
Joined the Company in 2016

All companies in the oil and gas and electrical industries are impacted by the global
drive for clean, renewable energy and adecarbonized society. Clients are keen touse hydrogen and ammonia technologies,
designed to reduce carbon emissions.
Changing the world’s energy infrastructurethat has served society’s energy needs tothe present day, to one that supports asustainable society, will require close collaboration with all clients and stakeholders.
We are also enhancing our endeavors indeveloping insect foods, which will grow indemand as an alternative source of protein.

Yoshihiro Arai
Downstream & Chemical Project
Department
Joined the Company in 2016

I am involved in the construction of facilities
to manufacture COVID-19 vaccines. People spur scientific innovation and newtechnology, and the efficient completion ofthese facilities to supply domestically produced vaccines at the earliest opportunity
is how society can soon conquer COVID19, and further fuel industrial and technological innovation.

Takuma Miyamae

Makie Shinoto

SCV Team
Joined the Company in 2017

Business Innovation Department
Joined the Company in 2015

My role is on the construction of industrial
plants in disaster-stricken regions. By
combining engineering solutions with cutting-edge technologies to resolve society’s
global challenges, we rejuvenate disasteraffected regions by reinstating assets andrestoring productivity. We also minimize
the use of unnecessary and superfluous
materials on our construction sites bymonitoring on-site conditions in real timethrough the latest digital technology. Generated waste material is recycled andreused whenever possible, thereby making
efficient use of resources.

My role is to support the establishment of
new business tailored to developing more
efficient, environmentally friendly pharmaceutical products through the use of continuous manufacturing technology. Thismethod of streamlining production is still in
its infancy in the healthcare sector, and werely on Chiyoda’s pharmaceutical plant
construction and flow chemistry technology experience, accumulated over many
years, to develop this revolutionary technology. We will continue working to realize
SDGs through the continuous improvement of pharmaceutical products.

CLIMATE ACTION

Yorito Narui
SQEI Department
Joined the Company in 201726

Safety is Chiyoda’s core value and ensuring safety of all individuals, from many different disciplines and backgrounds, on ourdomestic and international construction
sites is a priority in the SQEI Department.
Projects are only considered successful if
all employees go home safely to their loved
ones at the end of their working day. I takepride in my role in Chiyoda, ensuring that
employees can safely return home to leadenriched lives and creating a society where
everyone has equal access to clean,renewable energy.

Chiyoda Corporation CHIYODA REPORT 2021

Mayuko Funabashi
Legal Department
Joined the Company in 2013

I provide legal and contractual support for
R&D in technologies that mitigate theimpact of global warming and for licensing‘in-house’ developed technologies, such as
exhaust gas treatment. Collaborating withcompanies and government bodies fromearly product development to demonstration is an essential part of my job. Despite
possible conflicts of interest during production, I strive to ensure that Chiyoda’s rights
are protected and that we achieve our goalof providing clients with cutting-edge environmental conservation technology.

I am currently working in the Environment
Section of our department as a team member on an LNG plant construction project in
the MENA region. By implementing, andfurther developing, measures to reducegreenhouse gases emitted from the construction of LNG plants, and reducing theimpact on climate change, we are supporting the realization of a sustainable society.

Saki Fukuoka
Engineering Safety, Fire andEnvironment Department
Joined the Company in 201927

Business Strategies

Business Strategies
In this section, we describe Chiyoda Corporation’s business strategies andbusiness model for creating sustainable value.

Freeport LNG Plant
Courtesy of Freeport LNG Development, L.P.

CONTENTS
30	Special Feature:
Our Vision for the North Field East LNG Project in Qatar
32	Our Strategy to Reduce CO2 Emissions andRealize a Carbon-free Society

28

34

Hydrogen Business

36

Energy Management Business

37

Life Science Business

38

Digital Transformation (DX) BusinessChiyoda Corporation CHIYODA REPORT 2021

29

Business Strategies

SpecialFeatureReinforcing Risk Management by Using
Lessons Learned from Previous Projects

Chiyoda and Technip Energies will use their
unrivaled spectrum of world-class engineeringand execution expertise to form an ‘A Team’of experts from their combined resource pool.
CTJV will also use its previous experience ofdeveloping six liquefaction trains of similar
scale in Ras Laffan Industrial City, and will
utilize its network of specialist international
construction companies with local knowledge
and successful track records in the region.

Enhancing EPC Execution Capabilities
through Chiyoda AWP*
Chiyoda AWP is a project management toolthat coordinates and integrates the management of the EPC processes, using digitaltechnology. The AWP process will progress
through EPC, commissioning and completion to handover to maximize the advantagesof aligning engineering and procurement withconstruction and commissioning schedules.

Our Vision for
Project Execution

CTJV will utilize its extensive database of lessons learned from the successful delivery ofprevious LNG projects in Qatar to effectively
manage EPC risks, using comprehensive andstringent risk management techniques andprocedures. CTJV’s risk management processes include the identification, analysis,standardization, response planning, mitigationand control of risks and rigorous proceduresfor compiling and distributing information,
between CGH and the field office.

Health and Safety Management

Quality Management

Health and safety management is our corevalue and CTJV will demonstrate safety leadership and commitment by continuously focusing
on the projects safe completion in a continuous
safety improvement philosophy and an unwavering commitment to safety management.

CTJV’s quality objective of delivering a fit-forpurpose and reliable LNG facility will beachieved through approved quality plans,
processes and procedures, documenting
compliance with specifications and meeting
QatarEnergy’s requirements.

Business Strategies

Forming an ‘A Team’* Advanced Work Packaging is a process whereby construction work is packaged through integrated management to optimize the EPC process from engineeringand procurement to construction, commissioning and handover

Project Overview

ClientConstruction Site

Facility

Our Vision for the North Field
East LNG Project in Qatar

Year of Completion

QatarEnergy
Ras Laffan Industrial City, Qatar• Four liquefaction trains, each with the capacity to produce 8 million tons of LNG annually• Utility facilities• Associated facilities• CO2 capture and storage facility (with the capacity to reduce GHG emissions by over 25% compared toexisting LNG plants)
2025-2027

Message from the Project Director

A ‘One Team’ Philosophy Is Key

In February 2021, Chiyoda secured an order from QatarEnergy* for the EPC phase of the North Field East
LNG project in Qatar, comprising four of the world’s largest ever liquefaction trains and with a construction
period of approximately six years.
A CO2 capture and storage facility is included in the project, contributing to significant reductions ingreenhouse gas (GHG) emissions for a sustainable global environment.
Chiyoda has reformed its successful joint venture partnership with Technip Energies to form ‘CTJV’ andwill deliver the cutting-edge LNG facility by combining our extensive LNG EPC experience with our unparalleled digital technology expertise.
*1 Qatar Petroleum, a state-owned petroleum company, changed its name to QatarEnergy on October 11, 2021.

30

Chiyoda Corporation CHIYODA REPORT 2021

QatarEnergy and CTJV share a ‘One Team’ project philosophy, promoting and rewarding a ‘One
Team’ culture through a collaborative approach with subcontractors, vendors, personnel and all
stakeholders and fostering a proactive ‘relationship’ management style through open and transparent
communication.

Seiichiro Ikeda
CTJV Project Director

A ‘One-Team’ philosophy driven by shared project goals, emphasizing operative welfare andfostering a ‘community’ culture through open communication will be key to the project's successful
completion.
PROFILEAs Project Director on a large-scale LNG project for Qatargas Operating Company Limited from 2004 to 2009, aprevious Chiyoda/Technip Energies joint venture, Seiichiro Ikeda was instrumental in the project's successful
completion.

31

Business Strategies
Business Strategies

Our Strategy to Reduce CO2 Emissions andRealize a Carbon-free Society

Case Studies

CCS
Environmentally Friendly CCS Demonstration Plant (Completion)| Our Vision |Chiyoda developed the world’s first state-of-the-art demon-

sophisticated treatment of CO2

We will support the provision of cleaner energy by combining our state-of-the-art AI and digital technologies with ourstration plant, separating and collecting carbon dioxide emitted

prior to separation and collection.

decarbonization technical expertise to deliver solutions to our customers that minimize greenhouse gas (GHG)

from biomass power plants.

This is Japan’s first facility capableemissions.

Our Goals and Strategies

The demonstration plant uses Toshiba ESS carbon cap-of capturing over 50% of CO2

ture and sequestration technology to collect over 500 tons ofemitted from a coal-fired thermal

CO2 (over 50% of CO2 generated daily) from the Mikawa

power plant.

Power Plant in Omuta City, Fukuoka Prefecture, constructed

The demonstration plant’s tech­by Chiyoda and operated by Sigma Power Ariake Corpora-nology can be installed in bothtion (a Toshiba ESS subsidiary).

new and existing coal-fired thermal

demand for cleaner energy towards realizing a carbon-free

The project, completed in October 2020, is currently under-

power plants and we aim to rapidly

plant operations, with the aim of reducing CO2 emissions, insociety. We will therefore increase our LNG endeavors while

going trial operations by Toshiba ESS following its adoption as

expand CCS technology across theour existing LNG, petroleum and petrifaction and other EPC

providing CO2 capture and storage facilities and carbon recy-a ‘Demonstration of Sustainable CCS Technology’ sponsoredglobe to combat climate change

cling solutions while promoting ‘Green LNG’.

by the Ministry of the Environment.

and support the realization of a

We will construct facilities and offer solutions that optimize

businesses. LNG is a relatively low environmental impact

Chiyoda’s flue gas desulfurization system (CT-121TM) has

source of energy and will be key to addressing the growing

carbon-free society.

Photograph courtesy of Toshiba
Energy Systems & Solutions
Corporation

also been installed on the demonstration plant, allowing for

Overview of Initiatives
Carbon Capture and Storage (CCS)

Carbon Capture and Utilization (CCU)

Technology for collecting and storing carbon dioxide

CCU is a technology for collecting and using carbon dioxide efficiently
for synthetic gas, chemicals and other valuable resources.

We will continue to develop technologies to recover and use CO2 to
support the realization of a sustainable carbon-recycling supply chain.

CCS is a technology that separates CO2 from other gases emitted
from power plants and chemical facilities for storage underground.

In addition to constructing a CCS demonstration plant (Page 33) at abiomass power plant, a CO2 recovery facility has been planned on the
North Field East LNG Project in Qatar (Pages 30-31) to reduce CO2
emissions by over 25%.

CCU
Existing Technology
CT-CO2ARTM
Synthetic gas is traditionally produced through a steam reforming process. This technology uses less steam to produce synthetic gas more
efficiently by using a catalyst that is highly resilient to carbon deposition (CT-CO2ARTM) and CO2 as a resource. CT-CO2ARTM is currently being
used by chemical manufacturers in Japan.

Optimizing Plant Operations through the EFEXISTM Brand

Electrification at LNG Plants

New Technologies Currently under Development

EFEXISTM is Chiyoda’s innovative digital solutions that combine ourengineering expertise with cutting-edge AI and digital technologies tomaximize the autonomy of, and optimize, plant operation andmaintenance.
Improving plant operational efficiency and productivity reduces gas
and energy use, thereby lowering GHG emissions. (Please refer to‘Digital Transformation’ on Pages 38-39)

Electrification of Cooling Devices at LNG Plants
Our Freeport LNG Project in the USA commenced full-scale operation in May 2020 and uses an electric motor cooling system, in lieu of
ordinary gas turbines, to drive the LNG refrigerant compressors andreduce CO2 emissions.

Carbonate (Raw Material for Concrete)Para-xylene

Ethylene (Electrolytic Reduction)

Chiyoda is developing and investigating(Raw Material for Polyester)

NEDO is also supporting Chiyoda in thecommercializing technology that uses

With the support of NEDO,* we are aim-

R&D of highly versatile ethylene fromCO2 contained in exhaust gas to manu-

ing to industrialize a catalyst technology

CO2 and water through a single-stage

facture aggregates, a raw material inthat synthesizes para-xylene (used toreaction at ambient temperature andconcrete, with Mitsubishi Corporation

produce polyester fiber and plastic bot-pressure.

and Blue Planet Systems Corporationtles) from CO2 and hydrogen.

Please refer to the website below for further information of Chiyoda’s ‘in-house’ developed environmental technologies.

in the USA.

	https://www.chiyodacorp.com/en/service/environment/* New Energy and Industrial Technology Development Organization

ME SSA GE
M ESSAGE

Contributing to the Technical and Commercial Development of Carbon-Recycling
North Field East LNG Project in Qatar

Yuichiro Suzuki
NFE Team

32

Qatar, a nation with one of the highest standards of living in the world and the host country for the2022 Soccer World Cup, was, until 20 years ago, a relatively minor MENA country. Chiyoda’s role asprime contractor in the engineering and construction of 14 LNG trains has been a driving force
behind Qatar’s economic expansion.
As a leading global integrated engineering company, we have a responsibility to contribute tosociety by offering effective sustainable energy solutions that deliver ‘Energy and Environment inHarmony’ to our customers. I was involved in sales and marketing on the NFE project prior to its
award and reassignment to the execution team. I am permanently conscious that safety is Chiyoda’score value and strive to support the safe execution of our projects.

Chiyoda Corporation CHIYODA REPORT 2021

Hiroki Ichikawa

As a key weapon against climate change, the demand for carbon-recycling technology is expanding
on a global scale. Chiyoda is at the forefront of its technological and commercial development. Our
focus is currently on improving the competitiveness of our carbonation, para-xylene production, andelectrolytic synthesis technologies, while establishing businesses in non-EPC domains. Chiyoda isunrelenting in its exertions to develop carbon-recycling technology as expeditiously as possible tosupport the realization of a global sustainable society.

Process Development Section
Technology Development Department

33

Business Strategies
Business Strategies

Hydrogen Business
Leveraging SPERA HydrogenTM to Realize a Hydrogen Society
Striving to Realize Carbon Neutrality (International hydrogen supply chain demonstration successfully completed)| Our Vision |In December 2020, the Advanced Hydrogen Energy Chain

We support the realization of a hydrogen society by combining our engineering expertise with state-of-the-art technology,
including our multiple hydrogen carriers, centered on our unique SPERA HydrogenTMtechnology.

Organization (NEDO).

Association for Technology Development (AHEAD), of which

The project was the world’s first international transport of

Chiyoda is an organizational member, successfully completedhydrogen on an industrial scale and the first time that hydro-

the demonstration of the world’s first international hydrogengen produced overseas was used for gas turbine power

supply chain (Brunei-Kawasaki, Japan), with the support ofplants in Japan. Following these achievements, we will pursue

the New Energy and Industrial Technology Developmenthydrogen commercialization worldwide.

Features of SPERA HydrogenTM• A liquid at ambient temperature and pressure• Safe and chemically stable• Can utilize existing international standards and infrastructure• Technologically adaptable to a commercial scale

Our Goals and Strategies

FEATURES

By promoting our hydrogen/ammonia engineering and hydrogen supply chain solution businesses, our goal is to increase thevolume of hydrogen used in Chiyoda hydrogen/ammonia projects to 1.75 million tons (equivalent to approximately 6 GW) by 2030.

• Safe and economically efficient• A practical and feasible solution to the extensive use ofhydrogen• A solution to manage energy supply and demand• Early commercialization

VALUES

Road Map to 2050

Key business environment to the extensive use of hydrogen/fuel ammonia
The accelerating
shift to a
decarbonizedsociety

Maximizing the useof existing facilities

Accelerating
technologicaldevelopment

Goals

Improving
economic
efficiency

Importinghydrogen andammonia

Diversified fuel cellvehicle (FCV)
customers

2000-20102013-20142015-2020

2025

2030

Catalyst development

Technologicaldemonstration

Successfully completedinternational hydrogen supply
chain demonstration

Semi-commercialization

Commercialization(Laboratory scale)(Pilot scale)

2050

Carbon neutrality

Strategies

Hydrogen/Ammonia Engineering Business
Provide optimal solutions for equipment
configurations, costs and schedules at
every phase of the hydrogen value chain• Expand hydrogen/ammonia infrastructure fromproduction to import• Develop SPERA HydrogenTM supply chains

Hydrogen Supply Chain Solution Business• Offer hydrogen supply chain solutions in Asia,
Europe and other regions with sufficient hydrogen import demand• Leverage technological capabilities to offer
licensing and catalysts

Promote cross-industry regionalhydrogen deployment projects in Asia
(Japan, Singapore etc.), Europe andother regions

2030 Target

Please refer to the website below for further information on our SPERA HydrogenTM system.

https://www.chiyodacorp.com/en/service/spera-hydrogen/innovations/

Volume of hydrogen used in
Chiyoda Corporationhydrogen/ammonia projects

1.75

Please refer to the website below for further information on our hydrogen supply chain business.

https://www.chiyodacorp.com/en/service/spera-hydrogen/million tons

(equivalent to approximately 6 GW)

Application
CA SE :

01

M ESSAGE

Horizontal Expansion of Hydrogen Supply Chain Solution BusinessParticipation in the Hydrogen Utilization Study Groupin Chubu
The goal is to establish a large-scale hydrogen system utilizing
300,000 tons of hydrogen annually by 2030.

CA SE :

02

Contribution through technological development toward the early realization of ahydrogen society
As an integrated engineering company, we strive for harmony between energy and the environment
by leveraging our technological strengths to realize a sustainable society.

Yusuke Nakajima
Process Development Section
Technology Development Department

34

Chiyoda’s SPERA HydrogenTM is the key technology and we can utilize its technological advantages to expand our global business for society’s benefit. SPERA HydrogenTM is technologicallyadvanced and further upgrades can be made, incorporating efficiency improvements and cost
reductions. As an engineer responsible for technological development, I continue striving to enhance
our technology, supporting the realization of a hydrogen society.

Chiyoda Corporation CHIYODA REPORT 2021

CA SE :

03

CA SE :

05

Supply of Imported Hydrogen for a Hydrogen Supply
Chain Demonstration
Deliver and supply hydrogen through AHEAD from Brunei to a petroleum refinery used for a demonstration, conducted by the ENEOS
Corporation, in anticipation of a hydrogen mass-consumption society.

CA SE :

04

Feasibility Study on Receiving and Distributing
Imported Hydrogen in the Chubu Region
Appointed by NEDO to conduct a joint feasibility study together with
Sumitomo Corporation, Toyota Motor Corporation, Japan ResearchInstitute, Limited, Sumitomo Mitsui Banking Corporation.

Development of a Supply Chain Business in Singapore
Chiyoda, Mitsubishi Corporation and five privately owned Singaporean enterprises signed a Memorandum of Understanding to collaborate on realizing a sustainable hydrogen economy in Singapore anddevelop a supply chain business.

Development of a Supply Chain Business in Europe(The Netherlands)
Chiyoda, the Port of Rotterdam Authority (largest port in Europe),
Koole Terminals, and Mitsubishi Corporation are collaborating in joint
research to establish an international hydrogen supply chain and for
the Port to become a hub for the import of hydrogen into the region.

35

Business Strategies

Life Science Business| Our Vision || Our Vision |• We will expand our EPC business in renewable energy, energy storage and Energy Management Systems (EMS) whiledeveloping an O&M business.
• We will create recurring businesses using our facility-related expertise, accumulated through our EPC business anddigital solutions.

Our Goals and Strategies

We will provide life science solutions that add value for our customers and society by meeting unfulfilled medical
demand around the world.

Our Goals and Strategies

In renewable energy, energy storage and EMS engineering, we will exploit the offshore wind farm and energy storage markets

We will provide solutions that add value for our customers and society by exploiting our expertise, refined over many decades,

potential, while developing an O&M business, with the aim of securing ¥50.0 billion of orders by 2030.

and technology in life science.

In energy utilization optimization, we will expand the EaaS* business profit base and quickly realize profits.

We are targeting orders of ¥50.0 billion in life science engineering by 2030 and, in recurring businesses that utilize next-* Energy as a Service: A ‘one-stop’ business offering utility-related services and supporting our customers to reduce costs, increase asset values and lower CO2
emissionsgeneration manufacturing process technologies, we aim to secure 10 pharmaceutical development and manufacturing projects
per year in the same timescale.

The energy storage and energy management business environments
Establishing new global
renewable energy goals

Realizing clean
baseload power

Creating a market forenergy adjustment

Goals

Accelerating P2X*
technologicaldevelopment

Exploit the offshore wind farm industry’s potential, expand the renewableenergy, energy storage and EMS
engineering businesses and develop
an O&M businessChanging the life science industry environment

Industrial
decarbonization
requirements• Maximize our engineering expertise in offshore windfarms and energy storage• Develop an O&M business for the facilities which
we constructed• Strengthen our engineering capabilities to optimize
the overall system in the P2X* field• Leverage our EPC expertise and AI-based renewable energy variability forecasting system to expand
our range of energy storage solutions that effectively connect power and energy storage systems• Establish an EaaS business that optimizes existingprocesses and facilities• Develop advanced P2X technology*2 Power-to-X: Using compounds produced byelectrolysis derived from renewable energy

2030 Order Target:

¥

50.0

billionReduce pharmaceutical productmanufacturingcosts

The growth ofadvanced
healthcare

Unfulfilled medical
needs

Strategies

Life science engineering• Increase project execution and manufacturing facility engineering capabilities Company-wide
Become an EPC industry leader in the• Expand our EPC capability into areas that address
life science fieldsociety’s medical needs, such as advanced bioprocess plants and COVID-19 vaccines

2030 Order Target:

¥

50.0

billionHorizontal expansion and monetization of next-generation manufacturing process technologies
Expand the EaaS profit baseand quickly realize profits
while expanding into theregional utility business

Please refer to the website below for further information on our EMS initiatives.

Ambitiously pursue continuous manu- • Implement continuous manufacturing for pharmafacturing of low molecular-weightceutical products using our continuous manufacturpharmaceuticals and the cell-based
ing process technologies
CDMO*1 business through horizontal • Industrialize the expansion cell culture process andexpansion and monetization of relexploit cell culture-based CRO*2 and CDMO
evant technologies
businesses*1 Contract Development Manufacturing Organization (CDMO)*2 Contract Research Organization (CRO)2030 Project Target:10

per year(contributing to the development andmanufacture of pharmaceutical products)

Please refer to the website below for further information on our core business segments andtechnologies in the life science business.

	https://www.chiyodacorp.com/en/service/medicine/	https://www.chiyodacorp.com/en/service/solar-power-station/

M ESSAGE

Yasumasa Okushima

COVID-19

Goals

Energy utilization optimization
Deliver solutions that optimize utility
use by connecting renewable energy,
energy storage, EMS and plantfacilities

The growing vulnerThe return ofability of Japan’s
domestic life
pharmaceuticalscience manufacsupply chain
turing facilities

Strategies

Renewable energy, energy storage and EMS engineering

ME SSA GE

For the realization of a sustainable society

Chiyoda's contribution in the life science field

Our department is executing the EPC phase of the world’s largest battery energy storage project. The
importance of energy storage is increasing with the growing global demand for a decarbonized society.
We proactively respond to the new opportunities in the current transition to clean renewable energy. Asa member of an integrated engineering company, one of my roles is to understand the needs of our
stakeholders, effectively integrate our engineering expertise with state-of-the-art technology and work
collaboratively with all stakeholders as ‘One Team’ to successfully deliver all our projects.

As an integrated engineering company, our mission is to strengthen the Japanese pharmaceuticalproduct supply chain while efficiently reducing manufacturing costs. We will therefore actively engage
in biopharmaceutical plant development, implement continuous manufacturing technology for pharmaceuticals and enhance our presence in regenerative medicine and other cell-based fields, all ofwhich will likely expand in future years.
Chiyoda plays a significant role improving global society’s peace of mind through enhanced
health management worldwide. I will continue striving to fulfill the evolving needs of our customers
and the global community in the life science field.

Power & Green Energy System
Project Department

36

Business Strategies

Energy Management BusinessChiyoda Corporation CHIYODA REPORT 2021

Chiaki Hirota
Life Science & General Industry Section
Business Development Department 2

37

Business Strategies

2

Corporate DX

We will strengthen corporate management through digital technologies, promote diverse workstyle solutions, improve businessperformance and allocate resources more effectively.
Initiatives| Our Vision |Goals• Establish efficient workstyles and a collaborative businessenvironment conducive to achieving improved results• Provide clear business performance feedback, strengthenrisk management and facilitate effective decision-making• Reinforce human resources (a key Revitalization Plan
action) and optimize deployment of employees• Develop digital workplaces and proactively deploy RPA*
• Further advance our corporate business management system• Develop a human resource data management system3

We will promote digital transformation to enhance the value of our core businesses models while establishing new

Business Strategies

Digital Transformation (DX) Businessbusinesses and realizing profits in a timely manner.
*3 Robotics Process Automation

3

DX BusinessWe will enhance engineering value through AI and digital technologies, digitally transform customer plant production and opera-

Our DX Overview

tions and accelerate new business development.

We will proceed with the following four digital transformation initiatives as an “Innovative leading Engineering Company.”

1 Project DX

2 Corporate DX

3 DX Business

4 HR Mindset DX

Our Goals and Strategies

Initiatives

Goals• Optimize autonomous plant operations through EFEXISTM
by combining our engineering expertise and AI and digitaltechnologies• Establish energy management platforms for plants andlocal communities• Develop and implement solutions to realize decarbonizationand low-carbon emissions

Accelerate the pace of energy transformation through production, operational and supply chain digital transformation

We are accelerating Company-wide digital transformation, including establishing a CDO Office directly under the President &COO and the appointment of Digital Officers (DO’s) and Digital Transformation Evangelists from each division.

1

Overview of EFEXISTM Solution

We deliver digital AI products that optimize autonomous customer plant operations and maintenance under the EFEXISTM brand.

Project DX

We will digitalize project execution and improve work efficiency, risk management and profitability.
Initiatives

Goals• Accelerate deployment of project management data models
and Chiyoda AWP*1• Deploy supply chain collaboration and digital materials/
labor management initiatives•C onduct autonomous engineering through digital technology
via PlantStreamTM*2 and accurate project forecasting by
establishing concurrent engineering data models• Exploit data-centric project execution to increase the accuracy of project cost estimates and identify the factors forcost increases and address them in a timely manner• Share data with suppliers and subcontractors to minimizechanges• Conduct efficient concurrent engineering and minimize redo
work in the later stages of projects. Enhance engineering
precision by advancing an autonomous engineering
environment

By combining our plant engineering expertise and state-of-the-art AI technologies, we offer innovative solutions that maximize
customer asset values.

EFEXIS®

Digital Solutions

Visualization

Automization

Prediction

Optimization

Development and Implementation Solutions

Autonomy

Customized Solutions
In accordance with customer needs:*1 Advanced Work Packaging: A project management tool using digital technology whereby construction work is packaged through integrated management to
optimize the entire EPC process, from engineering and procurement through to construction, commissioning, and handover.
*2 PlantStreamTM: A standalone CAD system that reduces the number of space design processes involved in basic engineering by about 80% and that accelerates
3D model creation by up to five times. PlantStreamTM has been awarded the 2021 Distinguished Engineer’s Special Commendations Award by the Engineering
Advancement Association of Japan as innovative technology.

Maintenance plan
Provide support toward improved safety,
maintenance, and conservation

Operation plan
Facilitate optimal production

Underpin optimization of supply chain• Develop and provide solutions (applications)• Provide partner applications

Data Collection and Integration

Please refer to the website below for further information on PlantStream.

Engineering

Integrate and contextualize data
Provide platform

	https://plantstream3d.com/

Data integration

M ESSAGE

The challenge of creating value through engineering and digital

Junichiro Kaji

Our Digital Business goal is to optimize the operation of customer production facilities by combining
our engineering expertise and digital capabilities, based on our corporate philosophy of ‘Energy andEnvironment in Harmony’. By identifying and addressing customer business challenges through digitaltransformation, we aim to benefit through the success of our customers. We collaborate closely withcustomers and appreciate their challenges and business environment, while generating hypothesis
and verification.

Sources of plant-related data

Manufacturing data

Activity data

DX

Network

Facilitate digitalization and collection of data

IoT device data

Operation history data

Event data

3D modelSection Leader
Strategic Digital Products Section
Digital Products Department

38

Chiyoda Corporation CHIYODA REPORT 2021

39

In this section, we describe Chiyoda Corporation’s management structure
for sustainable growth and other specific initiatives.

Foundation Underpinning Sustainable GrowthFoundation Underpinning
Sustainable Growth

CONTENTS
42	Special Feature:
Roundtable Discussion between Human Resources Officers
45	Reinforcing Human Resources (Talent Management)

40

46

Corporate Governance52

Risk Management

53

Compliance54

Safety Management

56

Global Human Resource Development

57

Social Contribution Activities

Chiyoda Corporation CHIYODA REPORT 2021

41

Foundation Underpinning Sustainable Growth

Developing Stronger Human Resource Foundations
There seems to be a consensus regarding issues to be addressed in terms of our EPC business. Mr. Jogan mentioned
the lack of ambition of our employees towards Company profitability. How does everyone else feel about this issue?

Takuo Yasunishi

Nobutaka Nagahashi

Ayako Shoda

Katsuhiko Jogan

HRO of Business Incubation

HRO of Corporate Professional

HRO of Engineering Professional

HRO of Project Management

To realize our human resource vision, we have defined strengthening our business execution capabilities,
a Group strength, and the development of employees with exceptional organizational management
capabilities as human resource development goals. Our four Human Resource Officers (HROs),
appointed from each discipline to advance human resource development, discussed employee development,
issues to be addressed and our goal of establishing more solid human resource foundations.

Human Resource Strengths and Weaknesses
I would like to begin by discussing the strengths and weaknesses of our human resources. What are the views of our

Shoda It is imperative that employees improve their awareness of corporate management and profits. We must establish a framework to facilitate this.
Yasunishi Although we have secured relatively large projects
since completing the Cameron LNG project in the USA, weshould incorporate ‘lessons learned’ from the past project intheir day-to-day activities to avoid repeating errors.
Nagahashi We should accept, understand and learn frompositive and negative events on previous projects. We should
remember the consequences of that project on our businessand use the experience as a positive in rejuvenating ourorganization.
Jogan Relationships with all stakeholders, from clients, business partners and others on projects are not mutually exclusive, but are interdependent to a degree and reliability from allparties while ensuring profitability is challenging. As projects
become larger and more complex, additional adjustments
and extra work will be required but we must recognize thevalue offered by Chiyoda and always deliver projects that
meet, or exceed, customer requirements.
Shoda Chiyoda’s systems, technologies, attitudes and project procedures are unique to the Company and this “Chiyodaism” is a deeply rooted culture that treasures our history andpast successes. While cherishing our past successes is certainly important, simply continuing with traditional ways isunlikely to lead to new opportunities for growth. It is importantthat we maintain the positive aspects of our traditional ways,
while nurturing a sound sense of urgency and refining areasthat need improvement to ensure the Company’s longevity.
Nagahashi Because “Chiyoda-ism” varies across divisions,dissecting divisional approaches, including our own, it willlead to new discoveries and we should systematically rotate
jobs to enable employees to engage in work while gaining
from a variety of perspectives.
Yasunishi Job rotation will enable employees to gain ‘firsthand’ experience in fields that would normally be impossible.
To gain a deep understanding of anything, you must experience it for yourself. To enhance awareness of profitability forexample, an employee from the technology division would
transfer to a setting within which they can engage directly inassessing profitability from a project or marketing perspective. Gaining experience by performing a variety of roles will
prove highly effective and we would distance ourselves from
“Chiyoda-ism” through such initiatives.

Foundation Underpinning Sustainable Growth

Special Feature: Roundtable Discussion between
Human Resources Officers

newly appointed HROs?
Shoda Our strengths are our ‘start to finish’ project execution
skills and individual skill levels in resolving client issues. Our
employees are mostly reluctant to admit their weaknesses
however, and are not adept at self-disclosure.
Jogan Chiyoda’s strengths are our balanced group of employees, suited to a diverse range of technologies, and our ability tointegrate our technologies to deliver optimal solutions to ourclients, coupled with effective collaboration with vendors, licensors and other external partners to enhance our project execution capabilities. Conversely, the need to increase employee
financial ambition and cognizance of Company profitability
must be immediately addressed.
Yasunishi Our strengths and weaknesses stem from our EPC
activities and our engineering and management capabilities
are immense. Ms. Shoda highlighted our project execution
skills and the Company’s traditional EPC prowess remains anarea of focus. We should have a broader perspective beside
EPC prowess to advance our growth strategy.

42

Chiyoda Corporation CHIYODA REPORT 2021

Nagahashi The ability to successfully complete projects witha deadline like EPC is certainly a tremendous strength of ours.
However, our ability to actively engage in long-term tasks thathave no deadline requires improvement and is noticeable in ourinternal projects. We must also respond more quickly to thechanges taking place in our external business environment.
Jogan Due to the nature of the EPC business, tasks differ
from project to project. Nonetheless, the EPC business mustalso adapt to the ongoing changes in society.
Yasunishi When there are prolonged projects of more than
five years, employees become entrenched and it is challenging to enforce changes. The business environment and ourclient’s business model may change significantly over such aduration. The reality is that adapting as an organization to suchchanges is challenging due to the nature of our business.

The Role of HROs
How will you fulfill your role as an HRO given that more organizational changes are on the horizon?

Jogan The great deal of time that employees spend on projects is inevitable as long as EPC remains our core business.
Ensuring clear, concise and regular communication with
employees is therefore a priority to improve employee mobility
without impacting ongoing project progress.
Shoda I am aware that one of our duties as an HRO is tonurture a culture of clear communication and in 2021 webegan holding career development discussions to promote
communication between employees and their superiors andbetween employees and HROs. Through this initiative, I expect
employees to understand what contributes to their sense offulfillment and what their vision is for the future. Even whenemployee assignments and ambitions do not align, explainingthat their experience will benefit them in the future will improve
motivation.
Yasunishi “Connection” is something I regard highly wheninteracting with employees. There is no more effective way tomaximize employee benefit than by ensuring a connection
between their day-to-day work activities and their ambitions.
Maintaining solid communication with employees avoids discrepancies. Promoting effective communication also results ingreater autonomy and is beneficial in terms of employee training and development.
Jogan Similar to Ms. Shoda, I believe that the company andits employees must clearly share their future visions. Employees have always adapted to organizational and project needs,

43Foundation Underpinning Sustainable Growth

Reinforcing Human Resources (Talent Management)

unsettling for some employees to be monitored so closely, but
I hope they are able to relax knowing that their HRO is taking
a multifaceted view.

Chiyoda’s employees are our most valuable asset and we have formulated a Human Resource Development Policy, as a uniform set of guidelines, to nurture employee development and ensure they reach theirfull potential.

but I wish for more focus on employee ambitions from now on.
Nagahashi Emphasizing the importance of employee ambitions and conveying your vision to them is a testament to thevalue placed by the Company in its employees. It may be

Our Human Resource Vision

HRO Goals
Please finally share your own visions and ambitions.

Foundation Underpinning Sustainable Growth

Special Feature: Roundtable Discussion between Human Resources Officers

Chiyoda is a company of technical professionals that deliver engineering and cutting-edge technology solutions meeting customer,
and other stakeholder, requirements to benefit society by using our unparalleled engineering and technological prowess.

Jogan I wish to connect with as many employees as possible
and support them in attaining their full potential, while doing
everything in my power to contribute to their success and thesuccess of their projects. I will also strive to develop the talentrequired to be successful in new fields such as hydrogen andrenewable energy.
Nagahashi Through the HRO framework, I wish to create aworking environment that enables employees to pursue their
passion of contributing to society while nurturing a culturethat values such a mindset from a variety of perspectives. This
will form the foundation from which our employees can build
a successful career.

It is clear that all of you are implementing workstyle reforms
through a process of trial and error to address the many
issues in our organization and your vigorous efforts will resultin wide-ranging new discoveries and opportunities for our
employees. In your role as HROs, I am confident that you willcontinue to inspire all our employees.

Shoda As we have previously referred, I wish to establish andfoster a culture committed to earnings in a working environment conducive for employees to reach their full potential.
I wish to reshape the organization into one with such a positive
human resource philosophy.
Yasunishi It is imperative that the Company adjusts in linewith the paradigm shifts in society to remain invaluable bysecuring profits and beginning by reforming in familiar areas
is key.

(Facilitator: Aki Ikejiri, IR, PR & CSR Section, Corporate Services Department)

Human Resource Development
Human Resource Development Goals
We will realize human resource development goals through our core competencies of ‘Enhancing Business Execution Abilities’and ‘Organizational Management Capabilities’
Back to Basics

Enhancing Business Execution Abilities

Organizational Management Capabilities~Professionalism as standard~~Accelerating growth and enhancing our‘Business Execution Abilities’~~Early appointment and development of
human resources with ‘Organizational
Management Capabilities’~• Professional awareness andimprovement•M odesty and communication skills• Independence and determination
to conquer new challenges• Setting and completing tasks• Customer oriented mind-set with a‘helicopter’ perspective• Uniting as ‘One Team’• Responding to changes• Developing human resources to• Embracing and exploiting diversity• Contributing to the organization

benefit the organization• ‘Adding Value’ by combining engineeringand digital technology expertise

Human Resource Development Initiatives
Chiyoda’s human resource development program is divided
into the four disciplines listed on the right. A Human Resources
Officer (HRO) is assigned to each discipline, and we implement initiatives and systems to optimize human resource

Discipline• Engineering Professional• Project Management• Business Incubation• Corporate Professional

development.
Key Human Resource Development Measures• Creating a human resource development policy for each discipline• Engaging one-on-one career-related dialogue between employees, superiors and HROs
• Identifying and systematically hiring/assigning key personnel (professionals in specific fields, core project members andemployees responsible for organizational management)• Conducting organization administrator training sessions for all personnel in management roles to rejuvenate our corporate
culture (three times during fiscal 2020)• Systematically assigning employees between disciplines to ensure they benefit from a multifaceted view of the business anda comprehensive understanding of the Company’s earnings structure and organizational management capabilities.
Please visit the website below (Japanese only) for further information on our employee education and training system.

	https://www.chiyodacorp.com/jp/recruit/graduate/career/

44

Chiyoda Corporation CHIYODA REPORT 2021

45

Foundation Underpinning Sustainable Growth

Basic Principles

Development and Management of the Internal Control System

Chiyoda’s vision is a management that maintains the trust andfoundations, ensuring sound and transparent operations to

In accordance with laws and regulations, Chiyoda manages an internal control system to ensure appropriate execution of

empathy of all its stakeholders, including shareholders, cus-

realize sustainable growth over the medium to long term. We

operations.

tomers, business partners, creditors, employees and local

will also continue to strengthen corporate governance andcommunities. This philosophy is the basis of our corporate

reinforce our internal control system as material issues.

activities and we continue to strengthen Chiyoda’s businessGovernance Structure (as of June 23, 2021)
Company with Audit & Supervisory Committee

Organizational Structure
Executive Officer System

Yes

Number of Directors
Of Whom, Outside Directors (Independent Directors)

11
4 (Independent Directors)

Term of Office of Director(Excluding members of the Audit & Supervisory Committee)

One year

Number of Audit & Supervisory Committee members
Of Whom, Outside Directors

3
2

Number of Board of Directors’ Meetings Held(fiscal year ending March 31, 2021)

18

Number of Audit & Supervisory Committee Meetings Held(fiscal year ending March 31, 2021)

14

Remuneration System for Directors and Audit & Supervisory
Committee members• Directors (excluding those who are Audit & Supervisory Committee members): Base remuneration (according to roles and responsibilities and based on individual assessments),
performance-linked remuneration (reflecting The company’s business performance eachterm) and performance-based stock compensation (linked to The company’s medium tolong-term business performance improvements)• Directors who are Audit & Supervisory Committee members: Base remuneration (according
to roles and responsibilities)• Chiyoda established an Internal Control Committee to coordinate and summarize member opinions and proposals.
• At the end of the term, or when required, the Internal Control Committee proposes internal control improvements to the President & COO.
• The President & COO, through the Executive Advisory Committee, review proposals from the Internal Control Committee and the Board of
Directors makes decisions on the internal control system as required.
• To enhance the framework for compliance with laws and regulations, Chiyoda has established the position of Chief Compliance Officer (CCO)
and a Compliance Committee.

Foundation Underpinning Sustainable Growth

Corporate GovernanceCorporate Governance and Internal Control System

General Meeting of Shareholders
Appoint / Dismiss

Submit / Report

Appoint / Dismiss
Audit / Report

ReportDirectors and overall business execution decision-making

whereby Directors who are Audit & Supervisory Committee(excluding decision-making responsibilities delegated to themembers have voting rights at Board of Directors meetings

Directors).

Accounting Auditors

Appoint

Submit / Report

Cooperate /ReportCooperate

Chief Compliance Officer(CCO)

Overview of Corporate Governance Structure
and who are involved in the nomination of Representative

Appoint / Dismiss

ReportAppoint

Compliance Committee

posed mainly of Outside Directors, Chiyoda operates a system

Cooperate

Audit & Supervisory Committee

Board of Directors

Note: Remuneration for Outside Directors consists solely of fixed remuneration in accordance with roles and responsibilities.

As a Company with Audit & Supervisory Committee com-

Report / Statement of opinions

Internal Control
Committee

Instruct

Consult / Report

President & COO
ReportInstruct

ReportInstructInternal Audit
Division

Executive Advisory
Committee
Submit / Report

Audit

Internal
audit

Financial
audit

Business Execution Divisions• Chiyoda has appointed four Outside Directors to ensure objective and neutral monitoring of its management functions.

Control / Supervise• Chiyoda has improved objectivity and transparency and ensured the appropriateness of its processes for appointing andGroup Companies

determining Director remuneration through Independent Outside Directors and full-time Audit & Supervisory Committee members in decision-making, fulfilling a similar role to a voluntary nomination and remuneration committee.
Committee

Board of Directors

Executive Advisory Committee• Through a resolution of the Board of Directors, Chiyoda has established an Executive Advisory Committee, composed ofRepresentative Directors, who concurrently serve as Executive Officers, and other managers at Senior Vice President
level or higher at Chiyoda Group Headquarters, including Operations Directors and Division Directors. Chiyoda stipulates
the participation of the majority of those members as an advisory body to the President & COO, responsible for businessexecution of Chiyoda, enabling prompt decision-making on matters related to business execution.
• The Committee decides matters regarding business execution adopted by a resolution of the Board of Directors and priordeliberation of matters to be decided by the Board of Directors, and reports to the President & COO, responsible for
Chiyoda business execution.

Audit & Supervisory Committee

46

Composition and Roles/Responsibilities• 11 Directors, including Audit & Supervisory Committee members. Monthly Board meetings.
• Important management matters are determined and business execution is monitored. Appropriate decision-making andmanagement supervision is ensured based on the objective and neutral perspectives of the Outside Directors.
• Matters to be decided include management plans, important matters regarding human resources and major investments
and loans.

• Three members (one of them is full time) consisting of two independent officers and one member with extensive financeand accounting expertise.
• The Committee conducts audits on the overall business execution of Directors.
• To strengthen its auditing activities, a dedicated staff member is assigned to assist the Audit & Supervisory Committee inthe execution of its duties.

Chiyoda Corporation CHIYODA REPORT 2021

Compliance with the Corporate Governance CodeIn compliance with the Corporate
Governance Code of the Tokyo Stock
Exchange, Chiyoda has formulated
a Corporate Governance Policy,
detailing its basic views and guidelines on corporate governance andpromotes initiatives to strengthen
corporate governance.

Please refer to the following for further information on corporate governance.
Corporate Governance Policy

https://www.chiyodacorp.com/about/181227_GCPE.pdf
Corporate Governance Reporthttps://www.chiyodacorp.com/about/20190801_CGR_E.pdf
Basic Policy on Internal Control System (Japanese only)

https://www.chiyodacorp.com/about/20200401_internal_control.pdf

47

Foundation Underpinning Sustainable Growth

Board of Directors

Director Remuneration System

Chiyoda’s Board of Directors is composed of eight Directors and three Directors who are Audit & Supervisory Committee
members, thus ensuring balance and diversity through a combination of Outside Directors with experience in their fields ofexpertise and Directors with specialist skills and knowledge.

Basic Policy and Approval at theGeneral Meeting of Shareholders

Skills and experience
OutsideOfficer

Gender● Male● FemaleManagement

Overseas
experience

Project
experience,technical
expertise

●

●

●

●

Name

Position and title

Masakazu Sakakida

Representative Director, Chairman of theBoard, CEO and CWO●●

Masaji Santo

Representative Director, President, COO
and CSO●●

Koji Tarutani

Representative Director, Executive Vice
President, CFO●●

Tsunenori Kazama

Director●●●

Masao Ishikawa

Director●●●

Aiichiro Matsunaga

Director●●●

Nobuo Tanaka

Outside Director*

●

●

●

●

Ryo Matsukawa

Outside Director*●●

Shingo Torii

Director (Full-Time Audit and Supervisory
Committee Member)

Mika Narahashi

Outside Director* (Director who is Audit
and Supervisory Committee Member)●●

Hisashi Ito

Outside Director* (Director who is Audit
and Supervisory Committee Member)●●

Finance and Legal andaccounting compliance

●

●

●

●

●

●

●

Process●●

Revisions to the Director
Remuneration System●●

Chiyoda’s Director remuneration system was approved at the 93rd Ordinary General Meeting of
Shareholders held on June 23, 2021, based on its purpose of enhancing Director awareness of
the importance of contributing to improvements in business performance and corporate value
over the medium to long term.
The following revisions were made to the Director’s remuneration system, other than those
Directors who are Audit & Supervisory Committee members.
• ‘Base remuneration’ reflects an individual’s job responsibilities and individual performance.
• ‘Remuneration for acquiring treasury stock’ is abolished in favor of ‘performance-based
stock compensation’.
• Remuneration for individual Directors is decided by the Board of Directors based on remuneration criteria resolved at meetings of the Board of Directors each year within the framework of total remuneration determined at the General Meeting of Shareholders andfollowing discussion among Representative Directors regarding management content andeconomic conditions as well as an individual’s annual evaluation.
• To enhance objectivity and transparency and ensure the appropriateness of decision-making, the opinions of Independent Outside Directors and full-time Audit & Supervisory Committee members are heard through their participation in discussions. In addition, thestructure of the remuneration system is reviewed as required by the Board of Directors.

Details of the Director Remuneration System
Position

Classification

●
●

●

●

Base remuneration●* Independent Director provided in Rule 436-2 of the Tokyo Stock Exchange Securities Listing Regulations

Evaluation of the Effectiveness of the Board of Directors
Chiyoda evaluates the effectiveness of the Board of Directors annually. Improvements and issues are discussed at meetings ofthe Board of Directors to further enhance its effectiveness.
Initiatives to Enhance the Effectiveness of the Board of Directors in fiscal year ending March 31, 2021

Process

Questionnaires

Evaluation of theeffectiveness andinitiatives going
forward48• A questionnaire on the effectiveness of the Board of Directors was provided annually to all Directors (including those who are Audit & Supervisory Committee members)• Improvements in previous evaluations were confirmed• Opinions on the current fiscal year’s evaluation and on further improvements to the Board’s effectivenesswere exchanged• Results and issues going forward were confirmed by the Board of Directors
Main Items
1. Composition of the Board of Directors
2. Frequency and length of meetings of the Board of Directors
3. Matters for resolution by the Board of Directors and relevant materials
4. Agenda and management of meetings
Evaluation of the Board of Directors in fiscal year ended March 31, 2021
•B ased on the criteria for deliberating on proposals, revised in fiscal year ending March 31, 2020 to strengthen
the Board of Directors’ monitoring of business execution, risks expected to arise before and after acceptanceof project orders are assessed and risks were continuously managed in a timely and effective manner.
• Upon receiving reports on initiatives regarding decarbonization, digital transformation and other new fields,
active and constructive discussions were held based on the expertise of internal and Outside Directors.

Foundation Underpinning Sustainable Growth

Corporate GovernanceDirector (excluding
those who are Audit& Supervisory Committee members)

Performance-linked
remuneration

Remuneration principles

Overview of remuneration system

Linked to job duties and annual
individual performance
evaluations
According to the year’s businessresults, taking into consideration
quantitative factors such as net
profit and dividends attributable
to the parent’s shareholders

No greater than ¥290 million per annum (no greaterthan ¥30 million per annum for Outside Directors)

Linked to medium to long term
Performance-based
business performancestock compensation
improvement• The maximum cash we contribute is ¥70 million
per annum.
• The maximum number of shares to be delivered
to Directors, the proceeds of which will be paid to
Directors, will not be greater than 240,000 shares
per annum* The initial eligible period is three fiscal years from the year
ending March 31, 2022, to the year ending March 31, 2024

Audit & Supervisory
Base remuneration
Committee members

Linked to job duties

No greater than ¥60 million per annum

Issues to Address in fiscal year ending March 31, 2022
In accordance with our Revitalization Plan, updated in accordance with significant changes in our businessenvironment, we will: 1) increase profits through the steady execution of our existing projects and, 2) enhance
the pace of business portfolio and earnings structure reforms to realize sustainable growth. We will therefore
work to improve the delivery of information to Directors, while raising the quality of discussions on medium tolong term improvements in corporate value, and provide timely and appropriate execution directions.

Chiyoda Corporation CHIYODA REPORT 2021

49

Foundation Underpinning Sustainable Growth

1990: Joined Mitsubishi Corporation
2012:	General Manager, Corporate Accounting Department, Metal One Corporation
2016:	General Manager, Administration Dept., Chemicals Group, Mitsubishi Corporation
2019:	General Manager, Industrial Materials andPetroleum & Chemicals Administration Dept.,
Mitsubishi Corporation
2021: Senior Advisor of the Company
	Full-Time Audit and Supervisory Committee
Member of the Company (current position)

Directors and Audit & Supervisory Committee Members

Masakazu Sakakida
Representative Director,
Chairman of the Board,
CEO and CWO*1

Koji Tarutani
Representative Director,
Executive Vice President &CFO,*4 Division Director,
Finance & Accounting
Division

1981: 	Joined Mitsubishi Corporation
2001: 	Mitsubishi International Corporation, New York,USA
2006: 	General Manager, Plant & Heavy Machinery Unit,
Plant & Industrial Machinery Business Division of
Mitsubishi Corporation
2012: 	General Manager for Group Strategy Planning,
Machinery Group CEO Office, and Group CIO,
Machinery Group of Mitsubishi Corporation
2013: 	Senior Vice President, Chairman & Managing
Director, Mitsubishi Corporation India Private Ltd.,and Deputy Regional CEO, Asia & Oceania(South Asia) (New Delhi)
2017: 	Executive Vice President, Corporate Functional
Officer	Chief Compliance Officer and Officer for Emergency
Crisis Management Headquarters of Mitsubishi
Corporation
	Representative Director, Executive Vice President,
Corporate Functional Officer, Chief Compliance
Officer and Officer, Emergency Crisis Management
Headquarters of Mitsubishi Corporation
2021: 	Director of Mitsubishi Corporation
	Representative Director, Chairman of the Board,
CEO and CWO of the Company (current position)
1986: Joined The Mitsubishi Bank, Ltd.
2012:	Business Risk Management Division and General
Manger (Special Assignment) of Global Compliance
Division of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2014:	General Manager of Credit Examination Office ofInternal Audit Division of The Bank of TokyoMitsubishi UFJ, Ltd.
2016:	General Manager (Special Assignment) of Internal
Audit Division of Mitsubishi UFJ Financial Groupand General Manager of Credit Examination
Office of Internal Audit Division of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
	General Manager of Legal Division of Mitsubishi
UFJ Financial Group and General Manager of Legal
Division of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2019:	Senior Advisor of the Company
	Representative Director, Executive Vice President& CFO of the Company
	Representative Director, Executive Vice President,
CFO and Division Director of Finance & Accounting Division of the Company (current position)

Masaji Santo
Representative Director,
President, COO*2 & CSO*3

1976: Joined the Company
2005:	Project Manager for RGX6 Team of the Company
2014:	Project Sponsor for Jangkrick FPU Project of theCompany
2016:	Project Sponsor for Yamal LNG Project of theCompany
2018:	Project Director for Tangguh LNG Project of theCompany
2019:	Strategic Project Development Department,
Energy Project Operations Division of the Company
Director of the Company (current position)

Tsunenori Kazama

Masao Ishikawa

Aiichiro Matsunaga

Director

Director

Nobuo Tanaka
Outside Director*550

Chiyoda Corporation CHIYODA REPORT 2021

Shingo Torii

Mika Narahashi

Full-Time Audit andSupervisory Committee
MemberOutside Audit & Supervisory
Committee Member*5

Hisashi Ito
Outside Audit & Supervisory
Committee Member*5

1983:	Joined The Mitsubishi Trust and Banking
Corporation
2005:	General Manager, Money Market Activities
Division, Mitsubishi Trust and Banking Corporation
2010:	General Manager, London Branch, Mitsubishi
UFJ Trust and Banking Corporation
	Executive Officer, General Manager, London
Branch, Mitsubishi UFJ Trust and Banking
Corporation
2012:	Managing Executive Officer, Mitsubishi UFJ Trustand Banking Corporation
2013:	Managing Director, Mitsubishi UFJ Trust andBanking Corporation
2015:	Senior Managing Director and CIO, Mitsubishi
UFJ Trust and Banking Corporation
2016:	Director, Senior Managing Executive Officer and CIO
2017:	Representative Director, President, The Master
Trust Bank of Japan, Ltd.
2019:	Representative Director and Chairman, Mitsubishi
UFJ Trust Systems Co., Ltd. (current position)
2020:	Audit and Supervisory Committee Member of theCompany (current position)*1 Chief Wellness Officer*2 Chief Operating Officer*3 Chief Sustainability Officer*4 Chief Financial Officer*5 Outside Director as stipulated in Article 2, Item 15 of the Companies Act

Executive Officers

Director

1980: Joined the Company
2011:	General Manager, Gas LNG Process Engineering
Department of the Company
2013:	Vice President and Deputy Division Director,
Technology & Engineering Division of the Company
2015:	Senior Vice President and Division Director,
Technology & Engineering Division of theCompany
2020:	Executive Vice President and Division Director,
Technology & Engineering Division of theCompany2021:	Senior Advisor of the Company
Director of the Company (current position)

1973:	Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
1991:	Director of Directorate for Science, Technology
and Engineering of Organisation for Economic
Co-operation and Development (OECD)
1995:	Director, Industrial Finance Division of Industrial
Policy Bureau of Ministry of International Tradeand Industry
1998:	Minister of Embassy of Japan in the United Statesof America, Ministry of Foreign Affairs of Japan
2000:	Vice President of Research Institute of Economy,
Trade and Industry
2002:	Director-General, Multilateral Trade System
Department of Trade Policy Bureau of Ministry of
Economy, Trade and Industry
2004:	Director of Directorate for Science, Technology
and Industry of OECD
2007:	Executive Director of International Energy Agency
2012:	Outside Audit & Supervisory Board Member of
TEIJIN LIMITED
2013:	Outside Audit & Supervisory Board Member of
INNOTECH CORPORATION (current position)
2015:	President of The Sasakawa Peace Foundation
	Outside Director of the Company (current position)
2016:	Chairman of The Sasakawa Peace Foundation

1981: Joined Mitsubishi Corporation
2009: President of Mitsubishi Chile Ltda. (Santiago)
2012: 	Senior Vice President of Mitsubishi Corporation
	President of Mitsubishi Chile Ltda. (Santiago)	Senior Vice President, Division COO of Environment& Infrastructure Business Division of Mitsubishi
Corporation
2013: 	Director of the Company (retired in June 2016)
	Senior Vice President, Division COO of Infrastructure Business Division and Division COO of
Environmental Business Division of Mitsubishi
Corporation
2015: 	Senior Vice President, Division COO of Infrastructure Business Division of Mitsubishi Corporation
2016: 	Senior Vice President, Regional CEO for Latin
America & the Caribbean of Mitsubishi
Corporation
2017: 	Senior Executive Vice President of the Company
	Representative Director, President & CEO of theCompany
2019: 	Representative Director, President, COO & CSO
of the Company (current position)

2000:	Registered as a lawyer (Tokyo Bar Association)
2003: Joined Anderson Mori & Tomotsune
2007:	Joined Investment Banking Division of Deutsche
Securities Inc.
2009:	Joined American Life Insurance Company(currently MetLife, Inc.)	Senior Manager of Legal Affairs Department ofAmerican Life Insurance Company
2015:	Joined AIG American Home Assurance Company, Ltd.
	Head of Legal Affairs Office of AIG American
Home Assurance Company, Ltd.
2017:	Senior Partner of TH Law Office (current position)
2018:	Director of the Company (Audit & Supervisory
Committee Member) (current position)

Foundation Underpinning Sustainable Growth

Corporate Governance

1986: Joined Mitsubishi Corporation
2013:	General Manager of Power Systems International
Dept., New Energy & Power Generation Divisionof Mitsubishi Corporation
2014:	President of Mitsubishi Corporation do Brasil
S.A., Sao Paulo, and Deputy Regional CEO of
Latin America and the Caribbean of Mitsubishi
Corporation
2017:	Senior Vice President of Mitsubishi Corporation,
Regional CEO of Latin America and the Caribbean,
Sao Paulo, and President of Mitsubishi Corporation
do Brasil S.A.
2018:	Senior Vice President, Regional CEO of Latin
America and the Caribbean of Mitsubishi Corporation, and President of Mitsubishi Corporation
do Brasil S.A.
2019:	Executive Vice President, Group CEO of Industrial
Infrastructure Group of Mitsubishi Corporation(current position)
Director of the Company (current position)
1979:	Joined Tokyo Shibaura Electric Co., Ltd (currently
Toshiba Corporation)
2007:	General Manager, Technology Management Div.,
Toshiba Corporation Power Systems Company
2011:	General Manager, Fuchu Complex, Toshiba
Corporation
2013:	Executive Quality Leader, Toshiba Corporation
Power Systems Company
2014:	Representative Director, President and Chief
Executive Officer, Toshiba Plant Systems &Services Corporation
2021:	Outside Director of the Company (current position)

Masaji Santo

Hideo Matsui

Junichi Kunihiro

Hidehiko Suzuki

President (COO & CSO)

Senior Vice President

Vice President

Vice President

Koji Tarutani

Toshiya Momose

Kenichi Ishiguro

Naoki Kobayashi

Executive Vice President (CFO)

Senior Vice President

Vice President

Vice President

Fuminori Hasegawa

Norimasa Matsuoka

Masaaki Oishi

Executive Vice President

Senior Vice President

Vice President

Hiroyuki Shimizu

Toshiaki Furugori

Tetsuya Konno

Executive Vice President

Vice President

Vice President

Shuichi Wada

Masakazu Fujiwara

Masaki Kumagai

Senior Vice President(CCO*1 and CHRO*2)

Vice President

Vice President (CDO*3)

Munetaka Horiguchi

Toshiaki Saito

Vice President

Vice President

Yasuyuki Maeda

Takayuki Naito

Masao Fujiwara
Senior Vice President

Setsuo Iuchi
Senior Vice President

Vice President

Vice President*1 Chief Compliance Officer*2 Chief Human Resources Officer*3 Chief Digital Officer

Ryo Matsukawa
Outside Director*551

Foundation Underpinning Sustainable GrowthComplianceIntegration and Strengthening of Project Risk Management• The key to executing and completing a project according to plan is risk management. At the Chiyoda Group, the Strategy & Risk
Integration Division assumes the role of a control tower, assisting in strategies and managing risks throughout each stage of a
project, thereby centrally managing project risks from the estimation phase prior to the receiving of orders through to the execution,

Chiyoda has positioned compliance as a core value based on our conviction that the trust of society andits customers underpin a company’s business activities. We are proactively enhancing our complianceeducation and training programs to prevent unlawful and fraudulent acts, while continuing to reinforce
our compliance systems to ensure their early detection and a swift response. We are working to further
strengthen compliance initiatives throughout the Group.

completion, and delivery phases. The Strategy & Risk Integration Division is also tasked with providing management support.
• Under this integrated risk management system, we will continue to enhance the precision of our project management in termsof cost, scheduling, and quality by making more effective use of digital technology and improving data management. In sodoing, we will ensure extensive risk management while continuing to aim for even higher standards in this regard.
Project Risk Management Structure

Relevant Divisions

Strategy & Risk Integration Division(Integrated risk management)
Management Support

Project Risk Management• Reinforce business foundation• Determine order-securing strategies
supported by financial and human resource
capabilities• Implement strategic human resource
management• Promptly identify areas requiring improvement
through joint efforts with relevant divisions• Develop a framework that facilitates the timely
reporting of areas in need of improvement
to management• Assess projects from take-up and identify,
analyze, evaluate, and formulate measures forrisk management at the proposal submission
stage• Develop an execution structure for projects
upon securing their orders• Monitor, analyze, evaluate, formulate measures, and visualize the profitability anddevelopment process of ongoing projects• Establish best practices and utilize lessons
learned from completed projects

Energy Project
Operations
Global Environment &Green Energy Project
Operations

Align
Cooperate

Frontier Business
Digital Transformation
Business Development
Technology &Engineering
Construction

The Group’s Compliance System• Organizational Structure• Code of Conduct

The Chief Compliance Officer (CCO), appointed by the Board

We have formulated the ‘Chiyoda Group Code of Conductof Directors, is responsible for overseeing compliance in all

and Conduct Guidelines’ to ensure that our business activities

divisions. Division Directors serve as Compliance Officers andconform to social standards. We have also established a writ-

are responsible for compliance policies and implementing

ten declaration pledging our commitment that all officers andcompliance measures in their respective division. A Group

employees will adhere to the code and will comply withcompany representative serves as the Group Company Com-national and international laws and regulations and our own

pliance Officer and is responsible for compliance policies andinternal rules.

implementing compliance measures throughout the Group.

Enhancing Compliance Awareness and Knowledge
We implement initiatives to prevent unlawful and fraudulent acts and work to enhance executive and employee complianceawareness and knowledge.
Key Initiatives

HR & General AffairsE-learning

Finance & Accounting

Email newsletter

Refined Data Management

Seminars
Chiyoda Compliance Handbook

Project Risk Management Flow
Key Project-Related Risks

Risk Profiling(at the time of estimation andbefore securing orders)Technology risk

Step 1

Step 2

Material procurement andprice escalation risk

Countermeasures(at the time of estimation and before
securing orders)
Policy1. Prevent

Labor shortage and wage risk
Geopolitical risk
Foreign exchange risk
Regulatory risk

Anticipate
and identify
risk items

Quantitatively
and qualitatively assess
risk items

Risk of diminished confidence among
business partners, vendors, andsubcontractors

Distributing annual compliance newsletters by email, containing news, topics and trivia to all
Group employees in Japan
Conducting compliance-related seminars. Eight seminars on bribery and harassment prevention were conducted in the fiscal year ending March 31, 2021.
Distributing Chiyoda’s compliance handbook to all Group employees in Japan

Internal Whistleblowing System
We have implemented a whistleblowing system within theand preventing recurrence. We have also distributed ‘internal
whistleblowing cards’ to raise awareness of the internal whis-panies (to lawyers, external specialists) as ‘points of contact’

tleblowing system and inform officers and employees of the

Modify to contract terms

to report unlawful and fraudulent acts, enabling early resolution‘points of contact’ inside and outside the Group.

Share risks withcustomers and/or
partners

3. Mitigate

Minimize local
construction (modular
construction
method, etc.)
Hedge risks throughinsurance(cost
effects)

Conducting annual compliance-related e-learning for all Group employees

Group and have established external hotlines in Group com-

Decentralize vendors
and subcontractors

4. Accept(from execution
to completion)

Details

Key measures

2. Transfer

Disaster risk

Monitoring

Utilize foreign exchange
contracts
Allocate reserve funds

Assess risks and monitor the status of control
measures regularly fromthe execution of projects
to their completion anddelivery phase, and practice the PDCA cycle systematicallyFoundation Underpinning Sustainable Growth

Risk Management

Consultations Provided and Whistleblowing Reports Received in Fiscal 2020
Category
Legal violations and bribery (including cartel and concerns)
Violation of internal rules
Power harassment (including consultations, canceled items, and concerns)
Sexual harassment and pregnancy discrimination
Workplace environment
Other consultations
Total

Number of consultations provided andwhistleblowing reports received in fiscal 2020
0
3
17
15
21
37
93

Please refer to the following for details on Group compliance.

https://www.chiyodacorp.com/en/csr/risk-management/compliance/initiatives.html

52

Chiyoda Corporation CHIYODA REPORT 2021

53

Foundation Underpinning Sustainable Growth

Fostering a Sustainable Safety Culture
All Chiyoda Group employees regularly and responsibly engage
in educational training courses based on Safety, Quality andEnvironmental (SQE) policies, including our unique behavior
based safety assurance program, ‘C-SAFE’. We continuously
strive to embed a sustainable culture of safety throughout ourorganization by tirelessly enhancing our employee SQE knowl-

C-Safe Program
LeadershipTo achieve our primary objective of an injury and incident free
workplace, every level of management is unwavering in demonstrating their responsibility and commitment to all HSE aspects
in an ‘relationship’ management style, offering support andguidance and encouraging open and candid expression of
opinions within teams.

edge and skills through such training and promoting SQE
activities through collective Group-wide efforts.
During the fiscal year ending March 31, 2021, there were no
occupational accidents on our many construction sites, including our large-scale projects. This achievement is testament toour enduring endeavors to further develop and instill the cultureof safety we have established over many years and will help
We established our ‘Health, Safety and Environment (HSE)
Objectives for Fiscal 2020’ based on our ‘One Team’ corporate
leadership philosophy and the need to embrace change tofacilitate continuous growth. Posters and information notices

We continuously strive to achieve our objectives in a ‘One Team’philosophy through C-SAFE’s concept of worker involvement
and respecting and helping each other, and by every teammember fulfilling their role. All Chiyoda employees are committed
to consciously thinking about how their actions affect their own
safety and the safety of others.

Adaptability
Through the active demonstration of safety commitment by
every team member based on our ‘One Team approach, we
resolutely implement an adaptable ‘continuous improvement’strategy to safety management.

displaying our HSE objectives, using eye-catching visual images
not subject to language barriers, are pinned on walls in our
offices and at prominent locations on constructions sites and inaccommodation camps and form part of our strategy to promote safety awareness.

Natural instinct

Construction and safety-related issues

foster an even more intense safety culture on all our projects.

‘One Team’ Approach

In the fiscal year ended March 31, 2021, the Chiyoda Group
adopted the DuPont Sustainable Solutions Bradley CurveTM,
identifying four stages of safety culture maturity, with a view toassessing safety on its construction sites and, by combining thisapproach with our C-Safe Program, we are currently advancing
from the independent stage to the interdependent stage.
Encouraging results from safety awareness surveys conducted on construction sites since the fiscal year ended
March 31, 2020, demonstrate how the ‘Better Together’ concept, realized through collective effort and continuous coaching and support, is positively impacting employee health andsafety. We will continue with this initiative to realize our injury
and incident free workplace objectives in our untiring endeavors to ensure peak safety performance.
We will carry on educating and training employees in fiscal
year ending March 31, 2022, using knowledge and experience gained through the construction of many successfulprojects to ‘continuously improve’ our safety performance. By
demonstrating safety leadership based on our ‘One Team’approach, embracing change and creating workplaces thatcultivate the skills geared to such change, we will continue toimprove our business performance towards further growth.

Foundation Underpinning Sustainable Growth

Safety Management

 esponsibility for safety is not assumed and accidents are perceived as something thatRwill eventually occur
Dependent stage:
Safety is expected as long as rules are followed
Independent stage:
Responsibility for safety is assumed and the actions of each individual are believed tomake a difference
Interdependent stage:	Accept responsibility and be proactive for realizing a safety culture is assumed by the team
Thinking "no accidents is an achievable goal"
Reactive stage:

Directions ofsupervisors
Individual-centeredapproach

Respond only toaccidents that haveoccurred

Reactive stage

Team-centeredapproach

Adhere only to laws
and regulations and the directions of supervisors

Dependent stage

Act voluntarily basedon one’s knowledge
and experience

Act with consideration for
one’s peers

Independent stage

Interdependent stage
Source: DuPont Bradley Curve™

Please refer to the following website for details on our C-SAFE Program.

https://www.chiyodacorp.com/en/csr/safety/c-safe.html

Safety Performance
The graph on the right illustrates the Chiyoda Group’s safety
performance over the five calendar years up to 2020. LTIR*1 andTRIR*2 are lagging indicators, measuring the Company’s safety
performance, and although we have consistently achieved
exceptionally high standards relative to industry peers for both
metrics, we will continuously strive to improve these further.
Chiyoda believes that ’every incident is preventable’ as werelentlessly pursue zero injuries in the workplace and strenuously instill a ‘learner mindset’ on all our construction sites.

*1 Lost Time Incident Rate = Number of lost-time injuries (including fatalities) /Number of hours worked x 200,000*2 Total Recordable Incident Rate (for injuries requiring medical treatment) =Number of injuries* / Number of hours worked x 200,000* Including fatalities, lost worktime, change in employment regulations andincidents medical support, including heat stroke

TRIR / LTIR at Overseas and Domestic Sites
0.3

0.2

0.27

0.27

0.18

0.20

0.21

0.03

TRIR

Posters Geared toward Promoting Safety Awareness0.1

We nurture a culture within which safety is the Company’s core value by promoting safety as the principle objective in all our business activities. We understand that health and safety directly influences business performance and that our success depends onthe continued commitment of every employee, in line with our management’s dedication to health and safety as our first priority.

54

Chiyoda Corporation CHIYODA REPORT 2021

Please visit the website below for further safety information.

	https://www.chiyodacorp.com/en/csr/safety/
safety-performance.html

0

0.02
LTIR

0.01

0.02

0.02

2016

2017

2018

2019

2020

(FY)

55

Foundation Underpinning Sustainable Growth

Assigning Instructors to Sophia University to Conduct Global Human
Resource Training Courses
Chiyoda has been assigning instructors to Sophia University to

The fresh and objective student input enables us to consider

conduct global human resource training courses since 2018

other approaches for achieving a sustainable society throughand commenced a seminar program in 2020. Discussions andengineering and has been invaluable for our team of instructors.

presentations are conducted with third-year students on how

The courses also inspire students wishing to pursue

Chiyoda, as an integrated engineering company, can address

careers in the energy industry, either with Chiyoda or else-the challenges in our rapidly changing business environment,

where. Through these engineering-related courses, we will

including the accelerating transition towards decarbonization.

establish outlets, nurture interest in the unlimited potential ofThrough active debate, the training courses are a valuableengineering and develop diverse human resources to tackle

opportunity to reflect on how we can confront the energy indus-

new challenges, contributing to the realization of a sustainable

try’s paradigm shift in our business environment, enhance oursociety while enhancing the industry’s profile.

business profile and increase society’s knowledge of Chiyoda.

Social Contribution Activities
Initiatives in Fiscal 2020
Support for People with Special Needs
Japan’s Philharmonic Orchestra concert of Beethoven’s Ninth Symphony (Chiyoda Global Headquarters)
Chiyoda has supported Japan’s Philharmonic Orchestra performance of
Beethoven’s Ninth Symphony since2011 and provides 25 pairs of tickets
annually to visually impaired people in
Yokohama.

‘Heart Made Sale’ (Chiyoda Group in Japan)
Chiyoda held nine in-house sales events
for products made by disabled people
in Yokohama, on a pre-order basis, as ameasure against COVID-19.

Foundation Underpinning Sustainable Growth

Global Human Resource Development

Contribution to Health and Welfare
TABLE FOR TWO* (Chiyoda Group in Japan)

Eco Cap Program* (Chiyoda Group in Japan)

Chiyoda provided 1,386 school lunches
to children in developing countries.

Chiyoda collected 178,063 plastic bottle caps
‘in-house’, contributing to vaccine doses for
207 children in developing countries.

* For every order made through a TABLE
FOR TWO menu in Chiyoda’s company
cafeteria, ¥20 is donated to school
lunches in developing countries, enoughto provide one meal.

* Approximately 860 plastic bottle caps are
required to provide a single vaccine dose.

© TABLE FOR TWO

Course in session at Sophia University (instructor: Norimitsu Yanagimachi, Human Resources Development Department)

Assigning Instructors to the Chiba Institute of Technology to Conduct
Information-related Courses
Chiyoda has used its engineering expertise, experience andoperations. The benefits of digitalization are offset by these

insight by assigning instructors to universities for many years.

cybersecurity risks and to ensure effective use of digital technol-This forms part of our global human resource development ini-

ogy in adapting to the changes in society, such risks must be

tiative and is indispensable in cultivating the next generation ofminimized and managed.

engineers. Following a request from the Chiba Institute of Tech-

We hope that course participants will gain a detailed under-

nology, we also assigned part-time instructors for information-

standing of digitalization, its associated risks and its effective

related courses in 2020.

implementation to be able to adapt to future changes.

The courses reflect the importance of digitalization and theDonation to Healthcare Facilities (L&T-Chiyoda Limited in India)

At Chiyoda Philippines Corporation, we operate 15 shuttle buses ona daily basis for the 261 employees who are unable to take public
transit due to COVID-19. In suchways, we are working to ensure
the safety and health of ouremployees in the country.

Employees at L&T-Chiyoda Limited in India donated 15 oxygen concentrators, disinfectants and medical gloves to healthcare facilities to control the spread of COVID-19. They
also provided two computers andone printer to promote digitalization at healthcare centers.

Educational Supportand Human Resource
Development

Support for Disaster-stricken Areas

Company Visits and Visiting Lecturesat Chiyoda Global Headquarters

Approximately 27,000 Philippine pesos
was donated to victims of Typhoon Goni
(aka Super Typhoon Rolly) and Typhoon
Vamco (aka Typhoon Ulysses), which
struck in October and November 2020
respectively.

We conducted online lectures in lieu ofcompany visits and visiting lectures at
two junior high schools and one highschool in fiscal 2020.

rapid changes in society, organizations and for individuals. Chiyoda are currently focusing on improving work efficiency andadding value, but the next generation will also have added digital technology skills and additional armory with which to fight“Yubeshi no Kai”
(Chiyoda Group in Japan)

Financial Donations for Victims of Typhoons(Chiyoda Philippines Corporation)

Chiyoda held five ‘in-house’sales events of products
from disaster-stricken areas.

Receipt for donations

Environmental Conservation

cyberattacks etc. The advanced persistent threat (APT) of targeted attacks includes inputting malware into electronic devices
with potentially devastating consequences to our business

Shuttle Bus Service for Employees (Chiyoda Philippines Corporation)

Course in session at the Chiba Institute of Technology (instructor: Yuki Hamada,
Project Management Department)

Community Clean-up Activities (Chiyoda Group in Japan)
In November and December 2020, 25 Chiyoda employees participatedin community clean-up activities in Yokohama’s Minatomirai district.

Please visit the website below for further information on our global human resources development program.

	https://www.chiyodacorp.com/en/csr/society/contribution.html

56

Chiyoda Corporation CHIYODA REPORT 2021

57

Data Section

Data Section
In this section, we provide key data on the Chiyoda Group, financial resultsover the past 11 years and ESG initiatives.

CONTENTS

58

60

Eleven-Year Summary62

Key ESG Data

64

Corporate Information

Chiyoda Corporation CHIYODA REPORT 2021

59

Data Section
Data Section

Eleven-Year Summary
Chiyoda Corporation and Consolidated Subsidiaries

Millions of yen (excluding key ratios)

2011/3

2012/3

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/3

Revenue

247,082

254,675

398,918

446,147

480,979

611,548603,745

510,873

341,952

385,925

315,393

Gross Profit (Loss)

31,51938,891

42,51541,46245,651

41,52038,2238,618(181,148)

42,82320,061

SG&A Expenses

13,974

14,693

17,402

20,38324,18525,50522,543

20,94818,647

16,033

13,046

Operating Income (Loss)

17,54424,197

25,11321,07921,466

16,015

15,680(12,330)(199,795)

26,7897,015

Ordinary Income (Loss)

15,732

23,79325,51822,837

22,271

16,205(3,080)(10,100)(192,998)

18,644

8,462

Net Income (Loss) Attributable to Owners of the Parent

7,979

14,364

16,077

13,447

11,0293,375(41,116)6,445(214,948)

12,177

7,993

Current Assets

316,196

320,478

383,206

409,096444,578455,030

425,244374,470

326,929

360,387

305,891

Current Liabilities

181,887

193,687

230,431

261,679

294,339

311,106

301,182

247,847

392,505

319,878

244,657

Total Assets

353,392

365,795

435,379475,288515,839528,219

461,331420,337

352,341

385,051

329,583

Interest-Bearing Debt

10,208

10,198

10,22011,305

11,01010,348

10,211

10,00015,98935,87145,747

Net Assets

155,758

168,737

189,356

198,031

208,405

202,128

157,125

159,418(59,154)

24,94336,747

Shareholders’ Equity

155,242

168,120

188,386

196,411

206,395

200,166

155,339

157,557(60,114)

24,42336,399Cash Flows from Operating Activities(5,229)55,61514,147(17,177)(24,145)

55,526(4,375)(34,115)(37,941)(32,217)(20,806)

Cash Flows from Investing Activities(2,577)(9,140)(5,257)(16,796)(5,444)(26,750)

10,433(1,428)778(7,828)(2,250)Cash Flows from Financing Activities(805)(2,899)(4,432)(5,249)(4,569)(3,942)(2,693)(1,468)4,020

89,2009,478

130,618

173,769

180,229

145,303113,246

136,919

138,889

101,767

68,306

115,932

98,738Gross Profit (Loss) Margin (%)

12.8

15.3

10.7

9.3

9.5

6.8

6.3

1.7

(53.0)

11.1

6.4

Return on Assets (ROA) (%)

4.6

6.6

6.4

5.0

4.5

3.1

(0.6)

(2.3)

(50.0)

5.1

2.4

Return on Equity (ROE) (%)

5.3

8.9

9.0

7.0

5.5

1.7

(23.1)

4.1(441.2)(68.2)

26.3

Shareholders’ Equity Ratio (%)

43.9

46.0

43.3

41.3

40.0

37.9

33.7

37.5

(17.1)

6.3

11.0

Current Ratio (%)

173.8

165.5

166.3

156.3

151.0

146.3

141.2

153.0

83.3

112.7

125.0

Debt Equity Ratio (DER*1) (Times)

0.07

0.06

0.05

0.06

0.05

0.05

0.07

0.06

(0.27)

1.47

1.26

Earnings Per Share (EPS*2) (Yen)  30.79  55.44  62.06  51.91  42.58  13.03(158.76)  24.89(830.02)  40.9422.76

Book-value Per Share (BPS* ) (Yen)599.15648.95727.24758.31796.89772.89599.83608.41(232.13)(182.07)(143.94)

Dividend Per Common Share (Yen)

11

17

19

16

13

10

6

7.5

–

–

–

Common Dividend Payout Ratio (%)

35.7

30.7

30.6

30.8

30.5

76.7

38.7

30.1

–

–

–

–

20.78

5.2

21.0

Results for the Year

Financial Position at Year-End

Cash Flows

Cash and Cash Equivalents, at End of Year
Key Ratios

3

Dividend Per Type A Preferred Share*4 (Yen)Price Earning Ratio (PER* ) (%)
5

24.7

19.0

16.9

25.6

24.1

63.3

(4.5)

40.3

(0.31)*1 Debt Equity Ratio*2 Earnings Per Share*3 Book-value Per Share*4 Type A Preferred Share was issued in July 2019
*5 Price Earnings Ratio

60

Chiyoda Corporation CHIYODA REPORT 2021

61

Data Section
Data Section

Key ESG Data
Environmental Initiatives

Social Initiatives

The Chiyoda Group strives to realize its corporate philosophy of “Energy and Environment inHarmony” and further contribute to the sustainable development of society through its business activities.

The Chiyoda Group contributes to local communities through its business, such as humanresource development, human rights and labor initiatives, and social contributions. We also
cultivate a corporate culture that embraces diversity and individuality, as well as the uniquenessof each director and employee, and boost employee morale through our respect for individuals
and their families.

KPI

Unit

Environmental Data of Domestic Construction Sites
Industrial waste disposal quantity (excluding sludge)
Final landfill disposal quantity (excluding sludge and incinerated ash)
CO2 emissions
Industrial waste recycling rate (excluding sludge)
Electronic manifest penetration rate
Adoption of environmental proposals
Environmental Data of Overseas Construction Sites (Released fromMarch 2020)
Industrial waste disposal quantity
Final landfill disposal quantity (excluding recyclable resources and incinerated ash)
CO2 emissions
Industrial waste recycling rate
Adoption of environmental proposals
Environmental Data of Chiyoda Group Company Offices
Power consumption
Energy consumption
CO2 emissions
Chilled water consumption
Steam consumption
Cold water consumption
Waste disposal volume
Waste recycling rate
Printing paper consumed

Tons
Tons
Tons-CO2%%
Cases

2017/3
7,670
783
1,146
87.8
95.8
222

2018/3
12,242
614
901
91.5
93.2
197

2019/3
17,138
1,059
5,665
76.8
94.6
347

2020/322,223
1,464
4,642
92.8
90.8
236

2021/3
13,549
1,432
5,362
89.7
90.2
237

KPI

Unit

2017/3

2018/3

2019/32020/32021/3

Average years of service

Years

12.9

13.2

12.3

12.7

14.2

Average age of employees

Years

40.9

41.6

41.0

41.3

41.2

%

2.4

4.5

2.5

4.7

2.9

%

25

33

25

27

31

Persons

18

19

12

14

11

%

–

–

25.0

16.1

36.7

Employee Status

Turnover rate excluding retirement
Employee Diversity
Ratio of female employees among new recruits

Tons

–

–

–

6,868

4,097

Number of female employees among new recruits

Tons

–

–

–

4,624

3,075

Ratio of mid-career employment (Released from March 2019)Tons-CO2

–
–
–

–
–
–

–
–
–

56,97017.0
11186,817
3.5
150

Ratio of women among all employees

12,526
3,826
7,287
17.5
5,914
11,776262
92.3
88

11,129
3,430
6,367
15.5
5,168
11,306233
93.8
66

10,331
3,295
6,083
17.5
4,541
14,201
241
95.4
80

9,313
3,018
5,685
15.2
4,633
13,785
281
96.5
70

8,294
2,678
4,647
9.8
4,849
10,865
214
92.9
43

%
Cases
1,000 kWh
kl

%

14

19

16

16

16

Average years of service of female employees

Years

8.0

7.6

8.1

9.0

9.4

Number of women in management positions

Persons

23

24

25

28

28

%

2.6

3.2

3.5

3.8

3.7

Ratio of women in management positions

%

1.5

1.5

1.6

1.7

1.7

Persons

82

71

63

73

77

Number of employees taking childcare leave

Persons

22

27

26

28

43

Number of employees taking sick/injured childcare leave

Persons

1

7

11

23

18

Number of employees taking nursing care leave

Persons

4

9

9

10

10

Number of employees taking temporary retirement for nursing care

Persons

0

0

0

1

0

Governance Initiatives

Number of employees working reduced hours for childcare

Persons

19

14

12

27

24

Number of employees dispatched for on-site training/on-site instruction

Persons

70

54

42

47

24

The Chiyoda Group is dedicated to transparency and stability in its operations in accordancewith the highest ethical standards.

Volunteer Activities
Persons

70

54

53

9

0

Persons

127

157

110

120

25

Vaccines

228

231

292

278

207

Lunches

1,860

1,581

1,561

1,557

1,386

Tons-CO2
1,000 m3
GJ
GJ
Tons
%
Tons

Ratio of employment of persons with disabilities
Number of non-Japanese employees
Employee Support

Number of employees participating in reconstruction assistance
Number of employees participating in cleanup activities (around Chiyoda
Global Headquarters and Koyasu Office)Donation of vaccines through the collection of plastic bottle caps under
ECOCAP Program
Donation of school lunches through TABLE FOR TWO

KPI

Unit

2017/3

2018/3

2019/32020/32021/3

Persons

166

150

112

114

114

Actions for Compliance
Number of employees receiving compliance training (new recruits, midcareer hires, and executives and associate executives)
Number of employees receiving compliance training (overseas assignment,site managers at field offices, export control, and bribery prevention)
Number of employees attending compliance seminars held by external
instructors
Number of employees receiving compliance training via e-learning
Number of reports submitted under the Compliance Consultation andWhistleblowing System
Initiatives for Business Continuity

Persons

523

314

168

248

422

Persons

717

662

172

711

2,021*

Persons

2,841

5,213

4,669

5,704

5,189

Cases

24

25

36

98

93

Business continuity plan (BCP) training

Times

2

2

2

0

1

Cases

0

0

0

0

0

Persons

4

4

5

5

4

Actions for Information Security
Number of serious information security-related incidents
Governance-Related Data
Number of outside directors* Multiple seminars were held remotely for the fiscal year ended March 31, 2021.

62

Chiyoda Corporation CHIYODA REPORT 2021

63

Data Section
Data Section

Corporate Information(As of March 31, 2020)

Company Profile

Stock Information

Company Name

Chiyoda Corporation

Fiscal Year

Established

January 20, 1948

Paid-In Capital¥15,014 million

Ordinary General MeetJune
ing of Shareholders

Number of
Employees

5,200(consolidated and equity-method affiliates)

Business Activities

Integrated engineering business

Main Offices

Chiyoda Global Headquarters
Koyasu Office & Research Park

Project Experience

In over 70 countries

Number of
Authorized Shares

Chiyoda’s Global Network (Major Overseas Subsidiaries and Offices)

April 1 to March 31 of the following year

Common Stock
Type A Preferred SharesMilan Representative Office
Sales baseCommon Stock
Type A Preferred Shares

43,494
1

Listing of Shares

Tokyo Stock Exchange, Second Section

Operation support base

The Netherlands
Italy
Chiyoda Petrostar Ltd.

China

Saudi Arabia
Middle East
Headquarters
Doha OfficeChiyoda Almana
Engineering LLC

Breakdown of Shareholders

Project execution baseAbu Dhabi Office

Stock Transaction Unit 100 shares

Major Shareholders

Procurement center

Chiyoda & Public Works Co., Ltd.

Number of Issued
Common Stock
260,324,529
and Outstanding Shares (1 unit = 100 shares)
Type A Preferred Shares
175,000,000
(1 unit = 1 share)
Number of
Shareholders

Engineering center hiyoda Corporation
C
Netherlands B.V.

1,000,000,000
175,000,000

Qatar UAE

Japan
Chiyoda Global Headquarters

India
Philippines

L&T-Chiyoda LimitedUSA

Beijing Office
Chiyoda Corporation ShanghaiChiyoda Philippines Corporation

Myanmar
Malaysia

Chiyoda International
Corporation

Singapore
Indonesia

PT. Chiyoda International Indonesia

1. Common Stock (10 Largest Shareholders)

Mitsubishi Corp.

Number of
SharesOwned(Thousandsof Shares)
86,931

MUFG Bank, Ltd.

9,033

3.49

The Mitsubishi UFJ Trust & Banking Corp.

4,274

1.65

Chiyoda Employee Shareholding Association

3,769

1.46

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

2,502

0.97

Rakuten Securities, Inc.

2,500

0.97

Meiji Yasuda Life Insurance Company

2,265

0.88

Chiyoda Kyoeikai

1,926

0.74

Custody Bank of Japan, Ltd. (Trust Account)

1,840

0.71

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

1,808

0.70

Shareholder

Ratio of
SharesOwned(%)

2. Type A Preferred Shares

Mitsubishi Corporation

Other
corporations

43.6%

37.0%

33.57

Note: Shareholding ratio is calculated exclusive of treasury stock.

Shareholder

Individuals
and others

Number of
Ratio of
SharesSharesOwned
Owned(Thousands(%)
of Shares)
175,000
100

Chiyoda Oceania Pty. Ltd.

 hiyoda Human Resources International Pte. LimitedCChiyoda Singapore Pte. Limited

Number of Issued andOutstanding Shares(Common Stock)

260,324,529

Australia

Chiyoda Malaysia Sdn. Bhd.

Major Subsidiaries and Affiliated Companies
Financial
institutions

Securities
companies

8.7%

3.9%

Foreigninvestors

6.7%

Engineering

DigitalChiyoda Kosho Co., Ltd.

TIS Chiyoda Systems Inc.

Services: Design, construction and maintenance for domestic
projects

Services: Consulting, development and operation for integrated IT
systems

https://www.cks-ykh.co.jp/

https://www.tc-systems.co.jp/english/

Chiyoda TechnoAce Co., Ltd.

PlantStream Inc.

Services: Design and construction for pharmaceutical facilities

Services: Development and sales of "PlantStreamTM"

https://www.cta.chiyoda.co.jp/en_corporate/

https://plantstream3d.com/

Chiyoda System Technologies Corporation

Business Support

Services: Engineering, procurement, construction and maintenanceof electrical and instrumentation, and of social infrastructures.
Supplying spare part and materials.

http://www.cst.chiyoda.co.jp/english/

Arrow Business Consulting Corporation
Services: Consulting for finance and accounting
Chiyoda U-Tech Co., Ltd.
Services: Technical consulting of energy and environment, staffing ofengineers and outsourcing services

https://www.utc-yokohama.com/english/

Inquiries
Chiyoda Corporation
IR, PR & CSR Section, Corporate Services Department
Minatomirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku, Yokohama 220-8765, Japan

Chiyoda Corporation joined the UN Global Compact in 2012, declaring its commitment to 10 universal principles in the following four areas: humanrights, labor, the environment, and anti-corruption.
Guided also by the spirit of CSR Value, we are promoting initiatives in each of these four areas.

Inquiries	https://www.chiyodacorp.com/en/contact/index.php

64

Chiyoda Corporation CHIYODA REPORT 2021

65

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

Printed in Japan