CHIYODA CORPORATION
Consolidated Financial Results
for the Year Ended March 31, 2003

This document has been prepared as a guide to non-Japanese investors and contains forward-looking
statements that are based on managements’ estimates, assumptions and projections at the time of
publication. A number of factors could cause actual results to differ materially from expectations. This
document is a translation of excerpts taken from the Japanese language original. All numbers arerounded down to the nearest unit in accordance with standard Japanese practice. Please be advisedthat the Company cannot accept responsibility for investment decisions made based on the information
contained in this report.

1Summary of Financial Statements (Consolidated)
for the Year Ended March 31, 2003

Listed Exchanges
Head Office
Stock CodePresident & CEO
Inquiries
Telephone
Date of the Meeting of the Board of Directors
Concerning Consolidated Settlementof Year-End Accounts
U.S. GAAP Accounting Principles

Tokyo
Kanagawa, Japan
6366
Nobuo Seki
Kazuo Tokunaga, General Manager, Accounting Department+81 45 506 9410
May 16, 2003

Not adopted

Consolidated Business Results
for the Year Ended March 31, 2003

1) Consolidated Business Results
Millions of Yen
Apr. 1, 2002 –Mar. 31, 2003
Change (%)

Net Sales..........................................................
Operating Profit .............................................
Ordinary Profit (Loss) ...................................
Net Profit.........................................................
Net Profit per Share (¥) .................................
Fully Diluted Net Profit per Share (¥)
Return on Equity (ROE)
Ratio of Ordinary Profit to Total Assets
Ratio of Ordinary Profit to Net Sales

166,367
1,548
2,393
1,999
10.79
10.77
12.6%
1.9%
1.4%

17.6
-

Apr. 1, 2001 –Mar. 31, 2002
Change (%)

141,505(5,146)(3,366)
121
0.65
0.8%
(2.5%)(2.4%)

10.0-(Notes) (1) Gain from investments in subsidiaries and affiliates accounted for by the equity method:Year ended March 31, 2003:
1,000 million yen
Year ended March 31, 2002:
526 million yen(2) Average number of outstanding shares (consolidated) during the period:
Year ended March 31, 2003:
185,293,208 sharesYear ended March 31, 2002:
185,415,321 shares(3) Changes to accounting principles:
Changes to accounting principles are noted on page 21.
(4) Percentages for net sales, operating profit, ordinary profit and net profit represent year-on-year changes.

2) Changes in Consolidated Financial Position
Millions of Yen
Apr. 1, 2002 –Mar. 31, 2003

Total Assets ..................................................... ........................
Shareholders’ Equity ..................................... ........................
Equity Ratio (%) ............................................. ........................
Shareholders’ Equity Per Share (¥) ............. ........................
(Notes) Outstanding shares (consolidated) at the end of the period:
Year ended March 31, 2003:
Year ended March 31, 2002:

120,297
16,66913.9
90.01

Apr. 1, 2001 –Mar. 31, 2002

129,314
15,103
11.7
81.47

185,199,189 shares
185,388,008 shares23) Consolidated Cash Flows
Millions of Yen
Apr. 1, 2002 –Mar. 31, 2003

Net cash provided by (used in) operating activities .........
Net cash provided by (used in) investing activities..........
Net cash provided by (used in) financing activities .........
Cash and cash equivalents at end of period .......................

Apr. 1, 2001 –Mar. 31, 2002

6,939
(873)
(9,544)34,94010,418(204)(5,875)38,6774) Consolidated Subsidiaries and Affiliates Accounted forby the Equity Method
Number of consolidated subsidiaries:
Number of non-consolidated subsidiaries accounted forby the equity method:
Number of affiliates accounted for by the equity method:

24085) Changes in the Scope of Consolidation and Affiliates Accounted
for by the Equity Method
Consolidated subsidiaries:
Newly included
ExcludedAffiliates accounted for by the equity method
Newly included
Excluded1
4
2
0

Consolidated Operations Forecast
for the Year Ending March 31, 2004
Millions of Yen
Apr. 1, 2003 – Mar. 31, 2004
Interim period
Full term

Net Sales .......................................................... ........................ ...........................

80,000200,000

Ordinary Profit ............................................... ........................ ...........................

1,400

4,200

Net Profit ......................................................... ........................ ...........................

1,000

3,400

(Note) Projected net income per share for the year ending March 31, 2004:

18.36 yen3

State of the GroupThe Company is composed of the parent company, 32 subsidiaries, and 13 affiliated companies. The core functionof the engineering group is to provide customers with the most effective solutions for their needs. By combining
and deploying the resources of each group company, the Company is able to flexibly meet current demand andthe needs of each region and its customers. Industry segmentation has been divided into Engineering Businesses
and Other Businesses, and the corporate structure is outlined in the diagram below.
Clients
Engineering Businesses
Chiyoda Corporation

Planning, designing, construction,
supplying, and testing for various plants

Domestic Engineering*1 Chiyoda Kosho Co., Ltd
Domestic small/medium-scale construction*1 Chiyoda Techno Ace Co., Ltd.
Research, medical/health-related construction
Domestic and Overseas Engineering*1 Chiyoda Keiso Co., Ltd.
Electrical, instrumentation installation, construction
Consulting*1 U-Tech Consulting Co., Ltd.
Overall consulting for facilities, etc., of eachindustry
Advanced Engineering*1 Chiyoda Advanced Solutions Corporation
Advanced analytical technology, plant life-cycle
engineering, risk management.

Other Businesses

Finance, Accounting, Tax*1 Arrow Business Consulting Corporation
Overall consulting for finance, accounting, and tax
services.
Air Freight Agent*1 Arrowhead International Corporation
Travel industry, air freight agent industry

Computer Management System Development*2 IT Engineering Limited
Computer system software development and sales
Human Resources and Training*2 Arrow Mates Co., Ltd.
Supply of human resources

Overseas Management / FinanceOverseas Businesses*1 Chiyoda Singapore (Pte) Limited*1 Chiyoda International Corporation (USA)*1 PT. Chiyoda International Indonesia*1 Chiyoda (Thailand) Limited*1 Chiyoda Malaysia Sdn. Bhd.
*1 Chiyoda Nigeria Limited*1 Chiyoda & Public Works Co., Ltd. (Myanmar)*1 C&E Corporation (Philippines)*1 Chiyoda International Limited (UK)
*2 Chiyoda Petrostar Ltd. (Saudi Arabia)*2 L&T Chiyoda Ltd. (India)*1 Chiyoda Asia Pacific (Pte) Limited
Overall consulting for management and financeDirect Client Orders

Contracted Business, Entrusted Businesses*1：Consolidated subsidiary*2：Affiliated company accounted for by the equity method

4Management Policies
1. Basic Management Policies
Chiyoda strives for customer satisfaction by basing our corporate activity on the trust of our customers andsociety at large and our affinity with themBusiness Philosophy
As an integrated engineering entity contribute to the progress of society and thegrowth of its business by sound and unbiased application of state of art technologies.

Management PolicieszzzCommitment to building a firm foundation of trust with ourdomestic and overseas customers
Provision of high quality services
Expansion of group operations utilizing the functional
capability of the domestic and overseas group firms

Occupational safety
and health policy

Quality policy
Environmental policy

Information security
policyCorporate regulations

2. Medium- and Long-Term Business Strategyzz

Corporate program: Project Super X
Complete new restructuring plan (eliminate accumulated losses by the year
ending March 2006) as soon as possible
Build foundation for ample return of profits to shareholders, contributing tosociety and enhancing employee-working conditions/benefit.

Mid/long-term strategies
1)
2)
3)
4)
5)

Implementing new restructuring plan
Increasing orders
Stabilizing earnings
Building alliances
Establishing new business models

Objectives

ClientSatisfaction

1)
2)
3)
4)
5)

Strengthen project fulfillment capacity
Maintain technological superiority
Promote plant life cycle engineering
Strengthen group-level management
Enhance corporate managementt

Priorities
1)
2)
3)

Secure sufficient earnings for corporate activities
Implement selective and focused business activities
and appropriate personnel deployment
Eliminate deficit-ridden construction

5

Chiyoda Corporation is currently implementing its new restructuring plan released in fiscal year 2000 and running
until March 2006, under the company-wide program “Project Super X” begun in fiscal year 2001 to achieve thegoals of the restructuring plan as quickly as possible. As of March 2002 the Company had completed on schedulefinancial restructuring, reduction in fixed costs and personnel, a review of business sectors and a review of groupcompanies. The Company achieved the goals established by the plan for the fiscal year ending March 2003 to post
positive operating, ordinary and net profit. In addition, new orders exceeded plan target for the second period in arow on both a consolidated and non-consolidated basis.
Under Project Super X the Company’s current mid/long-term strategy is to build the foundation for ample returnof profits to shareholders, contributing to society and enhancing employee benefit by strengthening all ourcapabilities of winning orders, fulfillment, management, financing and personnel, as well as developing new
business models.

Increasing orders
Chiyoda will be intensifying focused deployment of resources to customers and projects where the Company canemploy its superiority to full advantage. In addition we will be incessantly making efforts to improve ourtechnological superiority and price competitiveness.

Stabilizing earnings

Chiyoda is striving to strengthen project execution/implementation capacity and risk management.

Building alliances
The Company is actively developing alliances in many areas to increase orders and reduce risk.

Establishing new business models
In addition to strengthening a conventional business model (EPC: engineering, procurement, and construction),
Chiyoda aims to develop a new model: Plant Lifecycle Engineering (PLE). PLE offers a new approach to service
which, by sharing databases with customers, allows Chiyoda to provide consistent plant planning, maintenance,
operations, improvement, and drawing up of plans for its customers’ future capital investment.

3. Business Targets
Under the new restructuring plan, the Company’s goal is to eliminate accumulated losses by the fiscal year ending
March 2006. In order to reach our goals as soon as possible, we are implementing the company-wide program
Project Super X.

4. Basic Policies Pertaining to Profit Redistribution
Our commitment to eliminating accumulated losses will lead to establishing the foundation for ample return ofprofits to shareholders, contributing to society and enhancing employee benefit. We are moving ahead with
Project Super X to achieve a profitable corporate structure enabling stable profit redistribution.

5. Objectives
The Company will be focusing on the following objectives to achieve a healthy business recovery and mid-to-longterm growth.

Strengthen project execution capacity

The Company continued to strengthen its overall budget system designed to further increase contract profitability,
and its Design Review System and Milestone Monitoring Systems, introduced last year, which are carried out at
each stage of a project by the operating division. The management division’s double-checking function, the Cold
Eye Review System, was also introduced last year, and this year use of the system was expanded to all groupcompanies. In addition we will make efforts to implement the Project Top Review Meeting at the corporate level
during the year, contributing to the structure that enables early detection and response to risk situations.

Maintain technological advantage
Chiyoda is continuing to concentrate deployment of corporate resources to achieve increased orders in businesssectors such as LNG, ethylene and special chemicals where we have a technological superiority, as well as inregions and customers with whom we have a strong business base. To maintain technological superiority we are
aggressively promoting applications of proprietary corporate technologies. The Company has particular interest in
acetic acid, a source material for vinyl and polyester fiber, for which global demand is anticipated to grow. We
have succeeded in commercializing our methanol-based acetic acid production technology ACETICA®, and signed
a contract during this fiscal year with China’s Guizhou Crystal Organic Chemical Group Co., Ltd. to license thetechnology and to provide the process design package for the first commercial plant adopting this technology. The
Company is also working closely with domestic and overseas licensees for the Chiyoda Thoroughbred 121 flue gas
desulfurization process to expand into the markets in the United States and China.

6Advanced high-temperature air combustion technology (HiCOT) is expected to contribute significantly to thehydrogen energy systems of the future. Under subsidy from the New Energy and Industrial Technology
Development Organization (NEDO), Chiyoda is pursuing research and development in cooperation with Nippon
Furnace Kogyo Co., Ltd. and Tohoku University, which successfully demonstrated reductions in fuel consumption,
CO2 and NOx emissions with more compact facilities, collecting viable operating data and has confirmed thetechnological superiority of the hydrogen production plant.
In addition to advancing our technological superiority, we also improve our cost advantage by forming joint
ventures with other enterprises in the industry with consideration of the particular characteristics of each project.

Promote plant life-cycle engineering
In addition to strengthening a conventional business model (EPC: engineering, procurement, and construction),
Chiyoda has developed a new model: Plant Lifecycle Engineering (PLE). PLE offers a new approach to service
which, by sharing databases with customers, allows Chiyoda to provide consistent plant planning, maintenance,
operations, improvement, and drawing up of plans for its customers’ future capital investment.
Chiyoda Advanced Solutions Corporation (ChAS) was established this year, focusing on advanced analyticaltechnologies with the aim of developing new business and making PLE a truly effective model.
In the next fiscal year the Company will continue advancing the PLE model as the engine for growth for the entire
group.

Strengthen group-level management
Chiyoda is redefining the core business of each group company, clarifying their functions and targets. Every threemonths, the accomplishments and business condition of each group company is reviewed in order to eliminate
ineffective activities and the duplication of functions within the group. This creates a total service network founded
on a truly integrated group operation.
Specifically the Company is enhancing the virtual single office operation system for all domestic and overseas
group companies, which uses a shared IT platform supporting contract fulfillment functions. The system allows
smooth business execution as if all business were conducted from a single location. The Company is also
progressing with a shared IT platform for internal group management functions.
Additionally the Company is implementing a transition to overseas Low Cost Engineering (LCE) centers for both
domestic and overseas contracts in order to further reduce design costs while maintaining quality.
The wholly owned subsidiary Arrow Human Resources Inc., a technical and engineering staff agency, with equity
participation by Mates Co. Ltd., major human resources company in the trading industry, was relaunched as
Arrow Mates Co. Ltd. to improve its business foundation, expand external manpower resources and to increase
flexibility in personnel allocation.

76. Concept and Implementation of Corporate GovernanceThe corporate governance concept
The Company recognizes that every corporate activity is founded on the trust of and affinity with our shareholders,customers and society at large, and so pledges to maintain the transparency and health of our business.

Status of implementation of corporate governance policies

Business administration structure related to decision making, implementation andoversight as well as other corporate governance systems:

Corporate Governance
Stockholders’ Meeting

Corporate Auditors

Board of Directors
Internal
control thru
PDCA cycle

Executive Committee(composed of representative
directors)

P(lan)D(o)C(heck)A(ct)Crisis manager
SQE Office
Occupational safety andhealth, quality, environment,
information security

Compliance Administration
OfficeCompliance

Administration Department
Executive officer
Risk manager

Internal Checks and Balances

Operations Department
Executive Officer
Risk manager

Self Audit

Chiyoda operates under the auditing system, with one external auditor as prescribed under Article 188, Section 2,
Number 7-2 of the corporate code and three external auditors as prescribed under Article 18, Section 1 of thespecial corporate code relating to corporate audits. The Company introduced the executive officer system in thefiscal year ending March 2002, as part of an effort to strengthen business administration functions by separating
decision-making and operational implementation.
The Executive Committee functions to make precise decisions in response to rapidly changing social and economic
circumstances. The Committee is composed of representative directors, and wields decision-making power for theCompany as a whole for crucial operational matters. The corporate auditors attend Executive Committee
meetings and may give opinions as required. The Executive Committee thus balances rapid decision-making withtransparency.
Executive Officers delegated by the Board of Directors maintain contact with external consultants such as
attorneys, and are responsible for the day-to-day operations carried out based on decisions made by the
Executive Committee and Board of Directors. Executive officers report as needed on the status of operations at
the meetings of those organs. Directors have oversight over the business operations of the Executive Officers,
while corporate auditors perform legal audits in regard to the performance of directors.

8Organizational units under the direct control of the Executive Committee carry out functions related to matters ofcompliance, occupational safety and health, quality control, the environment and information security required
during the course of business by overseeing operational divisions and reporting immediately to the Executive
Committee in the event of any concern. Rather than one-way oversight, these units work to maintain close
communication with the operational divisions, emphasizing the importance of proactive detection, discussion andresolution of potential problems.
Administration of the fulfillment and profitability of each project is carried out not only through self-auditing by
the operational division, but also through double-checking by the Administration Department and the Internal
Checks and Balances function, thus upgrading management transparency.
This system of corporate governance functions through the PDCA cycle of planning, doing, checking bymanagement and acting in response, to determine whether operational division monitoring and internal checks
and balances are being used in the fullest and most appropriate way in order to make the internal control systemeffective.

Relationships between external directors and external auditors, shareholding andtransactions, and other matters relating to interests
The one external director and three external auditors include the Chairman of the Board of United States Kellogg
Brown & Root, a former director of Bank of Tokyo-Mitsubishi, a former counselor of Mitsubishi Trust Bank, and an
attorney-at-law. Bank of Tokyo-Mitsubishi and Mitsubishi Trust Bank are major shareholders in, and have financial
relationships with, the Company. United States Kellogg Brown & Root and the Company are competitors, however
maintain technological partnerships in petroleum and petrochemicals as well as having a capital relationship via
affiliated companies.

Status of enhancements to corporate governance over the past year
By a resolution of the 74th regular stockholders’ meeting held on June 28, 2002, an attorney specializing incommercial law was appointed as external auditor, thus enhancing legal auditing. In addition the ComplianceManagement Office was established to thoroughly implement proactive detection, discussion and resolution ofpotential problems related to compliance with laws and regulations. Fully recognizing that the basis of corporate
activities relies on the trust and concurrence of society and clients, we should abide by national and internationalrules and regulations and corporate internal rules to secure social progress and establish a procedure/system toreport non-compliance or irregularities in the event of the breach of such rules etc.
In order to respond to the various contingencies and risks that may arise during the course of business, we haveenhanced our crisis management and risk management systems. The Company has appointed a risk manager, tomanage prevention of and minimize damage from contingencies, and a crisis manager, to put quick and effective
measures into action to limit the spread of a crisis, and a structure of clearly defined risk and crisis management
has been established. The structure centralizes the dissemination of information and the line of command in theevent of an emergency and is firmly in place in full preparation for risks including the potential effects of the war
in Iraq.
Measures such as these to increase accountability to our shareholders and the public and to improve the health ofour business through double-checking by administrative divisions have been expanded to all group companies,
strengthening the system for early detection and response to potential risk situations.
In addition the Chiyoda Information Security Management System, which conforms to BS7799, Part 2, aninternational standard created by BSI of the UK, has been introduced throughout the group. This system clarifies
and systematizes appropriate custody and handling of information assets that form the backbone of groupmanagement.

9

Business Results and Financial Conditions
1. Consolidated Business Results for the Year Ended March 31,
2003
Japan’s economy continued to be bleak due to sluggish personal consumption and capital investment which showsno sign of full recovery, coupled with a slumping stock market and weakening in exports which had previously
been firm. Overseas, while China and some other countries are seeing growth, overall the outlook continues
uncertain because of factors including instability in the Middle East and slowing economies in the United Statesand Europe.
The Japanese plant market is benefiting from capital investment in energy efficiency designed to reduce CO2
emissions in the petroleum industry, as well as a shift in the chemical industry from general chemical products tohigher value-added products for the major consumer market China. Despite this, however, the overall plant
market continues weak.
The overseas plant market, although affected by political instability in oil-producing counties with general strikes
in Venezuela and the war in Iraq, is seeing increasing demand for capital expansion projects for natural gas inOman, Qatar and the UAE. In the world’s growth center of China, major American and European firms are moving
ahead with large-scale petrochemical plants.
Within this operating backdrop, consolidated domestic new orders for the year dropped 23.7% to 68.6 billion yen
while overseas new orders rose 40.9% to 180.4 billion yen, for a total of 249.0 billion yen of new orders, anincrease of 14.3 % from the year before.
Revenues from domestic construction contracts fell 13.9% to 83.0 billion yen, while revenue from overseas
construction contracts rose 84.8% to 83.3 billion yen. Total revenue from construction contracts came to 166.3
billion yen, an increase of 17.6% over the year before.
In profits and losses, as a result of the introduction last year of risk management techniques designed to secure astandard level of contract profitability, gross profit rose a significant 123.1% over last year to 10.4 billion yen,while the Company’s efforts to further cut selling, administrative and administration expenses contributed to thefirst positive operating profit in 8 years, of 1.5 billion yen. Ordinary profit was in the black for the first time in 3
years, at 2.3 billion yen, in part due to repayment of debts reducing the interest burden. Net profit was 1.9 billion
yen, an increase of 1,546.5% over the year before.
On a non-consolidated basis, the Company secured 42.8 billion yen in new domestic orders, 30.9% less than theyear before, and 169.4 billion yen in overseas new orders, an increase of 39.5%, for a total of 212.2 billion yen,
an increase of 15.7%. This performance exceeded the target of 180 billion yen by almost 20%.
In non-consolidated profits and losses, revenue from domestic construction contracts was 54.5 billion yen, adecrease of 22.7%, and 75.8 billion yen from overseas construction contracts, an increase of 116.7%, for a totalof 130.4 billion yen, an increase of 23.5%, performance overall according to plan. Gross profit showed anincrease of 1,786.4% to 6.9 billion yen, operating profit was positive for the first time in 7 years at 0.6 billion yen
while the Company showed a positive ordinary profit for the first time in 3 years of 2.3 billion yen, and net profit
was up 4,883.1% to 2.6 billion yen. Thus the Company achieved targeted positive profits in all of operating profit,
ordinary profit and net profit.

Change in Business Results (Consolidated)
Apr. 1, 2002 –Mar. 31 2003

New Orders
Construction Contracts
Gross Profit
Operating Profit
Ordinary Profit
Net Profit

249.0
166.3
10.4
1.5
2.3
1.9

Billions of Yen
Apr. 1, 2001 –Mar. 31, 2002

217.9
141.5
4.6
(5.1)
(3.3)
0.1

Apr. 1, 2000 –Mar. 31, 2001

139.4
128.6
(2.5)
(13.8)(13.3)(4.6)

10

Summary by Business Segment
Petroleum

The series of contracts related to ultra-deep hydrodesulferization (HDS) of diesel oil for petroleum refiners has
been almost completed, and there has been movement toward solutions addressing environmental concerns forthe future including sulfur-free gasoline and reduction in heavy fuel oils. One solution for the environment, theCompany’s CASOX flue gas desulfurization process using catalytic oxidation, developed together with Hokuriku
Electric Power Company, was delivered to Nippon Petroleum Refining Co., Ltd.’s Osaka refinery as the firstcommercial installation for the process. In new energy sources, we succeeded in the first domestic synthetic fuelproduction at the gas-to-liquids (GTL) pilot plant designed for petroleum corporations now in field test operationsin Hokkaido’s Yufutsu oil field.
In this fiscal year, with orders including distillation tower renovation for Nippon Petroleum Refining Co., Ltd, neworders were 9.7 billion yen, 46.2% less than the year before. Revenues from construction contracts rose 296.8%
to 34.4 billion yen. Major contracts included the second sulfur recovery installation for Nippon Petroleum Refining
Co., Ltd, hydrogen production installations, and construction of catalytic oxidation flue gas desulfurization
installations and design contract for Mizushima Industrial Complex Renaissance and construction of a diesel fuelultra-deep HDS installation for Taiyo Oil Co., Ltd.

Petrochemical and Chemical
In general chemical products the Company is planning to strengthen its business base for the trend shift fromexisting ethylene production to propylene production, and in the future capital investments are anticipated inpropylene downstream derivatives. In pharmaceuticals, major manufacturers with new drug development
capacity are specializing even more in research and development, in order to become new drug producers. The
market is also seeing investments to modernize facilities following mergers or improvements in order toundertake production contracts from other companies by those manufactures that have already split off theirpharmaceutical production operations. Combined with the upcoming amendment of the pharmaceutical law, thesetrends are making the competition in new drug development even stiffer.
Overseas there has been activity in petrochemical projects (ethylene, methanol, ethylene oxide, ethylene glycol,
acetic acid) and special chemicals in the Middle East, South East Asia and China. Major contracts this fiscal year
include a methanol plant construction contract in Saudi Arabia, a styrene monomer (among others) plant
construction contract in China, and a special chemical facility renovation contract for Mitsubishi Gas.
In total new orders rose 2.7% over last year to 48.6 billion yen. Revenues from construction contracts were 35.8
billion yen, up 1.8%. Major completed projects included Teijin Singapore’s polycarbonate plant #4, Dow
Chemical’s epoxy plant in China, renovation of Sumitomo Bayer Urethane’s special chemical plant and Ajinomoto
Pharma’s new solid dosage facilities wing at the Fukushima Plant.

Gas and Power Utilities

With sluggish growth in demand for electricity due to the slow economy, liberalization of electric and gas retailingwith deregulation, electric and gas companies are continuing with cost reductions and deferring large scale
investment in plant and equipment. The business environment thus continues difficult for the Company, however
capital investment in national LPG stockpiling was made according to plan.
Overseas the decision was made to restart LNG importing in India and China, while the United States and Europe,
where natural gas prices are soaring, also increased imports. With the mid-to-long-term trend to growth in LNG
demand, expansion in the need for engineering services is expected to grow in consequence of the enhanced gasuse, in projects ranging from upstream to the final market (well to wheel).
Major new orders this fiscal year included adding Train 4 to the LNG plant in Qatar, an LNG plant construction
project for the government of Oman, the construction of Exxon Mobil’s Al-Khaleej Gas Project Phase 1 in Qatar
and the construction of national LPG stockpiling terminals at Namikata and Kurashiki. New orders totaled 147.0
billion yen, up 41.5% over the year before. Revenues from construction contracts were 47.9 billion yen, an
increase of 60.5% over the year before. Major contracts included renovation of Pertamina LNG facility inIndonesia, construction of an LPG underground storage terminal in China for British Petroleum, and the upgradeof the LNG facility in Higashi Ohgishima for Tokyo Electric Power Company.

Social Developments, Industrial Machinery, Other
While there has been a trend to recover in IT, finished good prices have been dropping and capital investment has
weakened in the fields of electronic materials and advanced films where Chiyoda has superior expertise.
This fiscal year has seen primarily medium and small-scale orders, with new orders totaling 43.3 billion yen, adrop of 10.7% from the last year. Revenues from completed contracts were 48.0 billion yen, down 29.0% fromthe year before. Major contracts included renovation of Pharmacia’s Tsukuba packaging plant.

112. Financial Conditions for the Year Ended March 31, 2003
Assets, Liabilities, and Shareholder’s Equity as of March 31, 2003
AssetsWith a decrease in cash and time deposits from debt repayment and collection of notes and accounts receivables
with progress in large-scale contracts, current assets decreased by 5.3 billion yen from the year before. Fixed
assets decreased by 3.6 billion yen, in part due to collection of long-term receivables from Nigerian National
Petroleum Corporation. Total assets were 9.0 billion yen lower than the previous year.

Liabilities
Accounts payable for construction costs reflecting the increase in contracts on hand and other accounts payable
increased 6.1 billion yen, however with repayments of long- and short-term loans of 9.5 billion yen and areduction in advance receipts on construction contracts that were transferred to sales of 8.5 billion yen, total
liabilities at the end of the year were 10.5 billion yen lower than the previous year.

Shareholder’s equity

Shareholder’s equity increased by 1.5 billion yen compared to the end of the previous year, due in part to a gainin net profit. Shareholders’ equity per total assets was 13.9%, an improvement of 2.2 points compared to the endof the previous year.

Cash Flow for the Year Ended March 31, 2003
Net cash provided by operating activities

In addition to the effect of 2.5 billion yen in net income before tax and depreciation and amortization of 1.2 billion
yen, cash flow from operating activities (total increase or decrease for “notes and accounts receivables”, “costs ofconstruction contracts in process”, “trade payables” and “advance receipts on construction contracts” showed anincrease of 1.5 billion yen, as well as an increase in retirement benefits of 1.0 billion yen. As a result, net cash
provided by operating activities was 6.9 billion yen.

Net cash used in investing activities
There was some income from the sale of subsidiary company stocks, but as a result of IT-related software
investment, net cash used in investing activities was 0.8 billion yen.

Net cash used in financing activities

Net cash used in financing activities was 9.5 billion yen due to repayment of loans.
As a result of the above factors, the balance of cash and cash equivalents as of the end of March 2003 was 34.9
billion yen, a decrease of 3.7 billion yen from the year before.

Consolidated Financial Conditions
As of Mar. 31, 2003

Total assets
Total liabilities (*)
Shareholder’s equity
Net cash provided by (used in):Operating activities
Investing activities
Financing activities
Balance of Cash / Cash Equivalents

Billions of Yen
As of Mar. 31, 2002

As of Mar. 31, 2001

120.2
103.6
16.6

129.3
114.2
15.1

137.0
121.9
15.0

6.9
(0.8)
(9.5)
34.9

10.4
(0.2)
(5.8)
38.6

(15.3)
31.4(16.0)
33.9*) Includes minority interests

12Cash Flow Indices
FY endedMar. 31,2003

FY endedMar. 31,2002

FY endedMar. 31,
2001

13.9%
49.9%

11.7%
29.8%

11.0%
35.3%

2.7

2.7

(2.4)

11.7

17.5

(10.6)

Shareholders’ equity per total assets
Shareholders’ equity at market value per total assets
Years for debt redemption (interest bearing debt divided by operating
cash flow)
Interest coverage ratio (operating cash flow divided by interest expense)

3. Outlook for Operations Forecast for the Year Ending March 31,
2004
In Japan recovery from the long-term economic slump is expected to take considerable time, due to the effect ofdelays in writing off non-performing loans and in the weak stock market, however energy-related investment inclean fuel and environmental equipment and new capital investment in specialty chemicals can be expected.
Overseas, with the negative outlook for the U.S. economy, the future of the overall investment environment isincreasingly uncertain. However the LNG market, where Chiyoda maintains technical superiority, will benefit fromthe vigorous demand to switch to cleaner energy, and the market for large-scale petrochemical plants, of which
ethylene forms the core, will continue to see active investing in the Middle East and Asia due to the pricesuperiority of gas.
Based on the business environment described above, for the fiscal year ending March 2004, the Company expects
new orders to come to 270 billion yen, revenue from construction contracts of 200 billion yen, consolidated
ordinary profit of 4.2 billion yen, and consolidated net profit of 3.4 billion yen (assuming an exchange rate of 1
dollar = 120 yen). These projections are based on the expectation of large-scale LNG facilities, primarily overseas,
moving from the planning to actual construction stage.
The Company anticipates on a non-consolidated basis, new orders of 230 billion yen, revenue from construction
contracts totaling 160 billion yen, ordinary profit of 3.5 billion yen, and net profit of 3.3 billion yen for the next
fiscal year.
The Company plans to continue suspension of payment of year-end dividends.
[Cautions regarding Forward-looking Statements]
Please note that the Outlook for Business Results contained in these materials is comprised of future projections
based on various presuppositions, and that actual results may differ significantly from these projected results due
to a wide range of factors. We therefore ask that you refrain from making any judgments that are based only onthese projections.

13Financial Statements
1. Consolidated Balance Sheets
As of Mar. 31, 2003%

AssetsCurrent Assets
Cash and time deposits..................................
Notes and accounts receivable-trade ...........
Costs of construction contracts in process...
Deferred tax assets..........................................
Jointly controlled asset of joint venture .......
Other ................................................................
Allowance for doubtful accounts .................
Total Current Assets......................................

36,11225,374
21,105
194
8,672
6,098
(628)
96,929 80.6

Fixed Assets
Property, plant and equipment
Buildings and structures........................
Accumulated depreciation ....................
Book value of buildings and structures
Machinery and equipment ....................
Accumulated depreciation ....................
Book value of machinery and equipment
Tools, furniture and fixtures .................
Accumulated depreciation ....................
Book value of tools, furniture and fixtures
Land .........................................................
Total property, plant and equipment.........

6,675
3,199
3,476
959
825
134
5,177
4,249
928
2,526
7,067

Intangible fixed assets ..................................

2,317

Investments and other assets
Investment securities..............................
Long-term loans......................................
Long-term accounts receivable .............
Long-term receivables............................
Deferred tax assets..................................
Other investments ..................................
Allowance for doubtful accounts .........
Allowance for capital loss on investments
Total investments and other assets.............

Millions of Yen
As of Mar. 31, 2002%

40,451
27,58023,909
129
8,222
2,376
(367)
102,302 79.1

Difference(4,338)(2,205)(2,804)
65
449
3,722
(260)
(5,372)

5.9

6,730
3,086
3,644
1,220
965
255
5,423
4,472
950
2,691
7,541

5.8

(21)
(164)
(474)

1.9

2,247

1.8

69

4,206
631
5,793
5,650
82
2,367
(4,485)(263)
13,983 11.6

4,563
37
6,265
10,125
101
2,992(6,864)
17,222 13.3

(357)
594
(472)
(4,474)
(19)
(625)
2,378
(263)
(3,238)

Total Fixed Assets..........................................

23,36727,011

20.9(3,643)

Total Assets.....................................................

120,297 100.0

129,314 100.0(9,016)

19.4

(167)

(120)

14

As of Mar. 31, 2003%

Liabilities and Shareholders’ Equity
Current Liabilities
Notes and accounts payable-trade.............................
Short-term loans ..........................................................
Income taxes payable...................................................
Advance receipts on construction contracts .............
Deferred tax liabilities .................................................
Indemnity allowance for completed construction ....
Accrued bonuses ..........................................................
Allowance for contingency loss..................................
Other .............................................................................
Total Current Liabilities ............................................

46,5118,202
294
25,172
—
694
1,375
800
6,354
89,404

Non-Current Liabilities
Long-term debt.............................................................
Deferred tax liabilities .................................................
Liability for retirement benefits..................................
Liability for retirement benefit to directors ..............
Other liabilities .............................................................
Total Non-Current Liabilities ...................................

Millions of Yen
As of Mar. 31, 2002%

74.3

40,343
17,456488
33,713
17
834
1,217
—
6,845
100,915

10,422
9
2,910
270
111
13,724

Total Liabilities ...........................................................

Difference

78.0

6,167
(9,254)(193)(8,540)
(17)
(140)
158
800
(491)
(11,510)

11.4

10,672
27
1,829
195
78
12,803

9.9

(249)
(17)
1,081
75
32
921

103,12985.7

113,718

87.9(10,589)

Minority Interests .......................................................

499

0.4

492

0.4

6

Shareholders’ Equity
Common stock..............................................................
Additional paid-in capital...........................................
Retained earnings.........................................................
Net unrealized loss on available-for-sale securities.
Foreign currency translation adjustments ................
Treasury stock ..............................................................
Total Shareholders’ Equity........................................

12,027
5,818
(496)
10
(642)
(48)
16,669

10.0
4.8
(0.4)
0.0
(0.5)
(0.0)
13.9

Shareholders’ Equity
Common stock..............................................................
Additional paid-in capital...........................................

12,027
5,818
(496)
10
(642)
(48)
16,66912,027
5,818
17,846

9.3
4.5
13.8

(12,027)(5,818)(17,846)

Accumulated deficit.....................................................
Net unrealized loss on available-for-sale securities.
Foreign currency translation adjustments ................
Treasury stock ..............................................................

2,516
(1)
(219)
(5)

(1.9)
(0.0)
(0.2)
(0.0)

(2,516)
1219
5

Total Shareholders’ Equity........................................

15,103

11.7(15,103)

129,314 100.0(9,016)

Liabilities, Minority Interests and Shareholders’Equity ............................................................................

120,297 100.015

2. Consolidated Statements of Income
Apr. 1, 2002 –Mar. 31, 2003

Construction Contracts...............................................
Cost of Construction Contracts.................................
Gross profit ...................................................................
Selling, General and
Administrative Expenses ...........................................
Operating profit ...........................................................
Operating loss...............................................................
Other Income
Interest ...................................................................
Dividend income ..................................................
Foreign exchange gain.........................................
Gain on sales of marketable
and investment securities....................................
Equity in earnings ofassociated companies...........................................
Rent income ..........................................................
Other .....................................................................
Total Other Income.....................................................
Other Expenses
Interest expense ....................................................
Foreign exchange loss..........................................
Cost of rent income ..............................................
Other ......................................................................
Total Other Expenses..................................................
Ordinary profit .............................................................
Ordinary loss ................................................................
Extraordinary Gain
Gain on discharge of liabilities ...........................
Gain on sales ofinvestments in subsidiaries.................................
Reversal of additional
retirement benefits to employees .......................
Gain on sale of intellectual
property rights......................................................
Reversal of liability for
retirement benefits to directors ..........................
Reversal of allowance for
doubtful accounts.................................................
Adjustments to previous period earnings ........
Other ......................................................................
Total Extraordinary Gain ...........................................

Millions of Yen
Apr. 1, 2001 –Mar. 31, 2002(%)(%)

Difference

166,367
155,924
10,443

100.0
93.7
6.3

141,505
136,825
4,679

100.0
96.7
3.3

24,861
19,098
5,763

8,894
1,548
—

5.4
0.9
—

9,826
—
5,146

6.9
—
(3.6)

(932)
1,548
(5,146)

331
28
—

645
16
870

—

436

1,000
205
186
1,751

1.0

526
—
269
2,765

1.9

(1,013)

528
178
93
106
906

0.5

844
—
—
140
984

0.7

(78)

2,393
—

1.4
—

—
3,366

—
(2.4)

2,393
(3,366)

4.6(4,727)

—

2,871

314

1,385

—

964

—

800

—

383

1,167
184
42
1,708

—
—
32
6,436

1.0

16

2. Consolidated Statements of Income (Continued)
Apr. 1, 2002 –Mar. 31, 2003

Construction Contracts..................................

166,367

Millions of Yen
Apr. 1, 2001 –March 31, 2002
(%)
(%)

100.0

141,505

Difference

100.0Extraordinary Loss
Allowance for doubtful accounts ..........
Loss on devaluation of
investment securities ..............................
Loss on disposal of fixed assets .............
Loss on sale of fixed assets.....................
Loss on devaluation of golf membership
Allowance for investment loss ..............
Allowance for contingency loss.............
Other .........................................................
Total Extraordinary Loss...............................

—

580

—
—
79
294
263
800
155
1,593

0.9

334
143
—
—
—
—
150
1,208

0.9

384

Profit before income
taxes and minority interests...........................

2,508

1.5

1,860

1.3

648

Income taxes current ......................................
Foreign tax refunded ......................................
Income taxes deferred ....................................
Total Tax
Minority interests in net income ...................
Net profit .........................................................

951
(317)
(146)
487
22
1,999

0.3
(0.0)
1.2

1,786
—
(88)
1,697
41
121

1.2
(0.0)
0.1

(1,210)
(19)
1,877

17

3. Consolidated Statements of Retained Earnings
Apr. 1, 2002 –Mar. 31, 2003

Capital Surplus
Capital Surplus at Beginning of Period
Capital Surplus Reserve at beginning of period
Capital Surplus at End of Period
Retained Earnings
Retained Earnings at Beginning of Period
Consolidated retained earnings at beginning of period
Increase in Retained Earnings
From net profit
From increase in consolidated subsidiaries
Total Increase in Retained Earnings
Retained Earnings at End of Period
Accumulated Deficit Balance at Beginning of Period
Decrease in Balance
From reversal of capital surplus reserve
Increase in Balance
From decrease in consolidated subsidiaries
Net profit
Accumulated Deficit Balance at End of Period

Millions of Yen
Apr. 1, 2001 –Mar. 31, 2002

Difference

5,818
5,818

5,818
5,818

(2,516)(2,516)

1,999
20
2,019
(496)

2,019
(496)

26,288(26,288)(23,654)(23,654)

3
121
2,516

(3)
(121)
(2,516)18

4. Consolidated Statements of Cash Flow
Apr. 1, 2002 –Mar. 31, 2003

Cash from Operating Activities
Profit (loss) before income
taxes and minority interests...........................................................
Depreciation and amortization .....................................................
Decrease in allowance for doubtful accounts..............................
Interest and dividend income .......................................................
Interest expense...............................................................................
Foreign exchange (net) ..................................................................
Equity in earnings of associated companies................................
Gain (loss) on sales of investment in securities...........................
Gain (loss) on sales of investment in subsidiaries .....................
Loss on devaluation of investment securities..............................
Loss on sales and disposal of property,
plant and equipment ......................................................................
Loss on devaluation of golf membership.....................................
Reversal of additional
retirement benefits to employees ..................................................
Gain on discharge of liabilities ......................................................
Gain on transfer of intellectual property rights ..........................
Decrease in trade notes and accounts receivable ........................
Decrease in costs of construction contracts in process ...............
Increase (decrease) in trade notes and accounts payable...........
Increase (decrease) in advance receipts on construction
contracts ...........................................................................................
Increase (decrease) in accrued bonuses........................................
Increase in retirement benefits ......................................................
Indemnity allowance for completed contracts ............................
Increase in allowance for investment loss....................................
Increase in allowance for contingency loss..................................
Increase (decrease) in consumption taxes payable .....................
Other .................................................................................................
Subtotal ............................................................
Interest and dividend income........................................................
Interest paid .....................................................................................
Additional retirement benefits paid to employees .....................
Gain on sale of intellectual property rights .................................
Income taxes paid ...........................................................................
Net Cash Provided byOperating Activities ..............................................................................

Millions of Yen
Apr. 1, 2001 –Mar. 31, 2002

Difference

2,508
1,225
(967)
(359)
528
915
(1,000)
—
(314)
—

1,860
1,025
(192)
(661)
844
(493)
(526)
(436)
(1,385)
334

648
200
(775)
302
(315)
1,408
(473)
436
1,070
(334)

90
294

143
—

(53)
294

—
—
—
1,144
2,804
6,167

(964)
(2,871)
800
4,651
8,958
(1,694)

964
2,871
800
(3,507)(6,154)
7,862(8,540)
158
1,081
(140)
263
800
(1,845)
1,932
6,747
1,576
(594)
—
—
(790)

3,077
(222)
33
(47)
—
—
1,414
(961)
11,087
1,421
(594)
(577)
800
(1,718)(11,618)
381
1,048
(92)
263
800
(3,259)2,893(4,339)
155
(0)
577
(800)
927

6,939

10,418(3,478)19

4. Consolidated Statements of Cash Flow (Continued)
Apr. 1, 2002 –Mar. 31, 2003

Cash Flow From Investing Activities
Payment for time deposits ............................................................
Proceeds from refundsof time deposits with maturities...................................................
Payments for purchase of investment securities........................
Proceeds from sales of investment securities .............................
Purchase of investment in consolidated subsidiaries................
Proceeds from sales of investment in subsidiaries
within the scope of consolidation ................................................
Purchase of property, plant and equipment...............................
Proceeds from sale of property, plant and equipment..............
Purchase of intangible fixed assets ..............................................
Proceeds from sale of intangible fixed assets .............................
Net decrease in short-term loans..................................................
Long-term loans .............................................................................
Proceeds from collections of long-term loans.............................
Other ................................................................................................
Net Cash Used in Investing Activities .......
Cash Flow From Financing Activities
Net decrease in short-term bank loans ........................................
Proceeds from long-term debt ......................................................
Repayments of long-term debt ....................................................
Other ...............................................................................................
Net Cash Used in Financing Activities ......
Foreign Currency Translation Adjustments on Cashand Cash Equivalents.......................................................................
Net Increase (Decrease) in Cash and Cash Equivalents.............
Cash and Cash Equivalents at Beginning of Period ...................
Increase in Cash and Cash Equivalents From New
Consolidation ....................................................................................
Decrease in Cash and Cash Equivalents Elimination From
Consolidation ...................................................................................
Cash and Cash Equivalents at End of Period...............................

Millions of Yen
Apr. 1, 2001 –Mar. 31, 2002

Difference

(48)

(362)

313

588
(118)
7
(30)

409
(477)
1,152
(23)

178
359
(1,144)
(7)

115
(296)
141
(852)
1
51
(637)
193
11
(873)

748
(484)
112
(697)
4
52
(685)
0
47
(204)

(632)
188
29
(155)
(2)
(1)
48
192
(35)
(669)

(8,717)
8
(792)
(42)
(9,544)(5,266)80(698)(3,451)
(71)
(94)

8
(5,875)(50)(3,668)

(459)

427

(886)

(3,937)
38,677

4,765
33,912(8,703)
4,764

200

—

200

—
34,940(1)
38,6771(3,737)20

Changes in Accounting Principles
Current fiscal year

(April 1, 2002 – Mar. 31, 2003)
In the past, Chiyoda accounted for income and expenses from leases for its real estate business respectively
under “Construction contracts” and “Cost of construction contracts.” Since the Company withdrew from the realestate business, however, from the full period ended March 31, 2003, these income and expenses will be
accounted for under non-operating profit and loss, respectively.
As a result of this change, “Gross Profit” and “Operating Profit” each fell 53 million yen. These changes will notaffect profit, ordinary profit and profit before income taxes and minority interests.

21

Notes to consolidated financial statements
Allowance for retirement benefits

To prepare for employees’ retirement benefits, the Company posts an amount calculated based on the projectedamount of pension assets and obligations for retirement benefits at the current fiscal year.
Regarding the difference at the time of the change in accounting standards (12,123 million yen), an average over
15 years is processed as operating expenses. Actuarial loss at Chiyoda are processed as operating expenses fromthe subsequent consolidated fiscal year, based on the “Fixed amount method” and using a set number of years(12 years) equal to or less than the average remaining period of employment for employees working at the timethat the difference occurred.
For actuarial loss, since the average remaining period of employment for employees has dropped below 13 years,
the fixed number of years for processing of operating expenses based on the “Fixed amount method” has beenchanged to 12 years from 13 years as of the consolidated full period ended March 31,2003. This change will have
only a slight effect on operating profit, ordinary profit, profit before income taxes and minority interests.

Accounting for Retirement Benefits
1. Current fiscal year (April 1, 2002 – Mar. 31, 2003)
The Company and its consolidated domestic subsidiaries provide qualified pension plans and lump sum severance
payment plans for their defined benefit pension plans. In addition, the Company sometimes provides extra
severance pay. Part of overseas subsidiaries also provides defined benefit plans. The company has been
providing lump sum severance payment plans and qualified pension plans from 1980.

Previous fiscal year (April 1, 2001 – Mar. 31, 2002)

The Company and its consolidated domestic subsidiaries provide qualified pension plans and lump sum severance
payment plans for their defined benefit pension plans. In addition, the Company sometimes provides extra
severance pay. Part of overseas subsidiaries also provides defined benefit plans. The company has been
providing lump sum severance payment plans and qualified pension plans from 1980.
In the fiscal year, the number of companies using lump sum severance payment plans decreased by two, because
E&E Solutions, Inc. and IT Engineering, Inc. have been excluded from consolidated statements. Thus, as of theend of the period, 4 consolidated companies used lump sum severance payment plans, while 2 consolidated
companies used both lump sum severance payment plans and qualified pension plans.

2. Retirement benefit obligations
Millions of Yen
As of Mar. 31, 2003

Projected benefit obligations
Fair value of plan assets
Obligation for unreserved retirement
benefitUnrecognized transitional obligation
Unrecognized actuarial loss
Net benefit obligation recognized in the
consolidated balance sheet
Pre-paid pension costs
Reserve for retirement benefits (*1)

As of Mar. 31, 2002

(34,212)
14,195(31,890)
15,951(20,016)(15,938)

9,699
7,406

10,507
3,607(2,910)(1,823)－(2,910)5(1,829)Note 1) The reserve for retirement benefits does not include extra severance payments that are set to be paid in
the following period (accounting for 128 million yen in the current and 131 million yen in the previous
fiscal year). These payments are included in the other current liabilities.
2) The group uses heuristic method for consolidating retirement obligations of its subsidiaries.

223. Retirement benefit costs
Millions of Yen
As of Mar.31, 2003

Service cost
Interest cost
Expected return on plan assets
Amortization of transitional obligation
Recognized actuarial loss
Net periodic benefit cost

As of Mar. 31, 2002

1,079
738
(364)
808
307
2,569

1,041
861
(543)
808
78
2,246

Note: According to heuristic method of consolidation of subsidiaries, subsidiary retirement benefit costs arerecorded under the Service cost.

4. Actuarial assumptions used to determine costs and benefit
obligations for principal pension plans
Millions of Yen
As of Mar. 31, 2003

Allocation of projected benefit obligation
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss

Amortization period of transitional
obligation

As of Mar. 31, 2002

Equal amount over each period Equal amount over each period
1.5%
2.5%
2.5%
3.5%
12 years (depreciated with the
13 years (depreciated with thestraight line method over a fixed straight line method over a fixed
number of years within average number of years within average
employee working period in the employee working period in thefiscal year in which the loss
fiscal year in which the loss
occurred, and recognized in the occurred, and recognized in thefollowing fiscal year)
following fiscal year)
15 years

15 years

23

Tax Effect Accounting
1. Principle cause of deferred tax assets and liabilities
Millions of Yen
As of Mar. 31, 2003
As of Mar. 31, 2002

Deferred tax assets
Tax loss carry forward ...................................................... ...
Cost of construction contracts..............................................
Retirement benefits ...............................................................
Allowance for doubtful accounts ........................................
Loss on construction contracts due to application ofprogress percentage method................................................
Loss on valuation of costs of construction contracts inprocess ....................................................................................
Loss on valuation of fixed assets .........................................
Special retirement benefits payable ....................................
Other .......................................................................................
Sub-total deferred tax assets ................................................... ...
Valuation allowance ....................................................................
Total deferred tax assets..............................................................

23,230
4,216
895
1,929

44,917
4,921
338
2,605

180

216

181
733
－
3,142
34,509(34,223)
285

927
770
54
1,783
56,535(56,304)
231

Deferred tax liabilities
Unrealized gains on other securities...................................
Other .......................................................................................
Total deferred tax liabilities ........................................................

(8)
(9)
(18)

(2)
(42)
(44)

Net deferred tax assets ................................................................

267

186

Note: Net deferred tax assets for the current and the previous fiscal year are included in the consolidated balance
sheets as follows:

Millions of Yen
As of Mar. 31, 2003
As of Mar. 31, 2002

Current assets – Deferred tax assets ..........................................
Fixed assets –Deferred tax assets ...............................................
Current liabilities – Deferred tax liabilities...............................
Non-current liabilities – Deferred tax liabilities.......................

194
82
－
(9)

129
101
(17)
(27)

2. Principle items which caused differences between statutory effective
tax rate and income tax rate charged after adoption of deferred tax
accounting

Percent %As of Mar. 31, 2003
As of Mar. 31, 2002%%

Normal effective statutory tax rate ............................................
Adjustments
Non-deductible entertainment and other expenses..........
Non-taxable dividend and other income ...........................
Parity adjustment for inhabitance taxes .............................
Foreign taxes .........................................................................
Valuation allowance..............................................................
Equity in earnings of affiliated companies.........................
Net loss of consolidated subsidiaries..................................
Different tax rates applied to foreign subsidiaries ............

42.0

42.0

6.0
(0.2)
3.0
3.8
(19.0)(16.8)
－
(1.3)

8.3
(7.3)
2.9
32.2
77.2
(11.9)(47.0)(5.4)
24

Reduction in deferred tax asset balance due to change
in tax rates ..............................................................................
Other .......................................................................................
Income tax rate charged after adoption of deferred tax
accounting ..........................................................................

3.

0.4

－

1.5

0.3

19.4

91.3

Due to partial change in local tax law (Law No. 9 of 2003) promulgated as of March 31, 2003
the statutory effective corporate tax rate applied for calculation of deferred tax assets andliabilities has been changed from 42.00% to 40.44% (however, the new rate was applicable
only for the losses which would be posted after April 1, 2004.)
Consequently net deferred tax assets (after deducting deferred tax liabilities) were lower by 9
million yen and the total tax was adjusted higher by 9 million yen.

25

Segment Information
1. Industry Segments
The Company’s current fiscal year was from April 1, 2002 to March 31, 2003. The previous fiscal year was from
April 1, 2001 to March 31, 2002. The main business of the Chiyoda Group is engineering that focuses on theplanning, design, construction, and operations assistance of public- and private-sector facilities, as well as
facilities for pollution prevention and environmental preservation and enhancement. In non-engineeringbusinesses, there are no segments that account for 10% or more in terms of sales, operating profits or assets,
and as such these segments have been omitted.

2. Geographic Segments
Current fiscal year (From April 1, 2002 to March 31, 2003)
Millions of Yen
Japan

Asia

EuropeNorth
America

OthersTotal

Eliminations(Corporate)

Consolidated

Revenues
Outside customers ............ 160,526
Inter-segment..................... 25,163
Total.................................... 185,689
Operating expenses........... 183,425
Operating Profit (Loss)....
2,263
Assets126,246

5,659
624
6,283
6,473
(189)
7,445

48
199
247
249
(2)
216

133
42
175
199
(23)
636

0
0
0
14
(14)
159

166,367
26,028
192,395
190,362
2,033
134,704－(26,028)(26,028)(25,543)(484)(14,406)

166,367－
166,367
164,818
1,548
120,297(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
Europe: England, Germany and Poland.
North America: America.
Other regions: Nigeria.
(3)Within asset Elimination (Corporate) account, corporate assets accounted for 3,184 million yen, consisting mainly of longterm investments (investment securities).
(4)
Changes in Accounting Principles:
1) As noted in Changes in accounting principles, starting from this fiscal year, the Company has implemented a change toa new accounting method by which income and expenses related to leases for the purpose of real estate business areincluded in non-operating profit and loss. As a result of the above factors, operating income of Japan was ¥53 million
less than it would have been under previous accounting principles. This change had no effect on segments outside ofJapan.
2) Starting from the current fiscal year, the Company has changed the fixed number of years for the processing ofoperating expenses for actuarial loss to 12 years, from the previous 13 years. This change will have only a slight effecton each segment.

Previous fiscal year (From April 1, 2001 to March 31, 2002)
Millions of Yen
Japan

Revenues
Outside customers ............ 132,983
Inter-segment..................... 21,911
Total.................................... 154,894
Operating expenses........... 160,487
Operating Profit (Loss).... (5,592)
Assets131,266

Asia

EuropeNorth
America

8,112
521
8,633
8,291
342
8,170

13
235
248
251
(2)
178

396
13
409
575
(166)
99

OthersTotal

Eliminations(Corporate)

Consolidated

0
0
0
25
(25)
205

141,505
22,681
164,186
169,631(5,444)
139,921－(22,681)(22,681)(22,978)297(10,606)

141,505－
141,505
146,652(5,146)
129,314(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
Europe: England, Germany and Poland.

26

(3)

North America: America.
Other regions: Nigeria.
Within asset Elimination (Corporate) account, corporate assets accounted for 3,887 million yen, consisting mainly of longterm investments (investment securities).

3. Overseas Sales
Current fiscal year (April 1, 2002 to March 31, 2003)
Millions of Yen
Asia

Overseas sales..........................................................
Consolidated sales ..................................................
Ratio of overseas to consolidated sales (%) .

Middle East

Other Regions

25,36846,66011,284

15.25

28.04

6.78

Total

83,313
166,367
50.07(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: Singapore, China and Indonesia.
Middle East: Qatar and Saudi Arabia
Other regions: Venezuela and Russia(3)
Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries or regions
other than Japan

Previous fiscal year (April 1, 2001 to March 31, 2002)
Millions of Yen
Asia

Overseas sales..........................................................
Consolidated sales ..................................................
Ratio of overseas to consolidated sales (%) .

Middle East

Other Regions

21,587

16,539

6,955

15.26

11.69

4.91

Total

45,083
141,505
31.86(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: Singapore, China and Indonesia.
Middle East: Qatar and Iran.
Other regions: Venezuela and Egypt(3)
Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries or regions
other than Japan27

Production, Orders and Sales Situation
1. OrdersMillions of Yen
Apr. 1, 2002 –Apr. 1, 2001 –Mar. 31, 2003
Mar. 31, 2002
New Orders
Backlog
New Orders
Backlog
Amt
%
Amt
%
Amt
%
Amt
%

Business Segment
Engineering
Petroleum-related ......................

9,732-46.2%Petrochemical-related................
18,236-46.3%
Chemical-related ........................
30,426+127.0%Gas and Power Utilities147,049
related.......................................... +41.5%
Social developments-related.....
1,155-76.1%
Industrial machinery-related
2,750-30.4%
Other............................................
34,885-0.7%
Total Engineering
244,238+14.5%
Other............................................
Total.............................................

4,855
+4.2%
249,093+14.3%

4.0
7.3
12.2
59.0
0.5
1.1
14.0
98.1
1.9
100.0

14,315[-3,360]
43,945[-2,236]
26,503[-204]
199,549[-6,118]
2,521
[-40]
5,073
[-8]
24,259[-727]
316,167[-12,696]－[－]
316,167[-12,696]

4.5

18,0998.3

13.9

33,95915.6

8.4

13,405

6.2

63.1

103,935

47.7

0.8

4,843

2.2

1.6

3,953

1.8

7.7

35,140

16.1

100.0

213,337

97.9

－

4,660

2.1

100.0

217,997100.0

42,439 17.2
[8,460]44,181 18.0[377]
15,8706.4[-63]
106,590 43.3
[-50]
3,417
1.4
[1,829]4,050
1.7[-101]
29,587 12.0[-5,131]
246,137 100.0[5,319]－－[76]
246,137 100.0[5,395](Note)
Numbers in [] brackets under “Backlog of orders” indicate the total of increases or decreases accompanying foreign
currency translation adjustments related to foreign currency business, increases resulting from adjustments for neworders, and decreases resulting from contractual changes in orders received before the previous fiscal year.
Percentages under “New orders” indicate year on year % change.

28

Breakdown of Domestic and Overseas Orders
Millions of Yen
Apr. 1, 2002 –Apr. 1, 2001 –Mar. 31, 2003
Mar. 31, 2002
New Orders
Backlog
New Orders
Backlog
Amt
%
Amt
%
Amt
%
Amt
%

Domestic......................................
Overseas ......................................
Total.............................................

68,605-23.7%
180,488+40.9%
249,093+14.3%

27.6
72.4
100.0

83,604[-585]
232,562[-12,111]
316,167[-12,696]

26.4

89,92841.3

73.6

128,069

58.7

100.0

217,997

100.0

98,638 40.1[-3,447]
147,499 59.9
[8,843]
246,137 100.0[5,395](Note)
Numbers in brackets [] under “Backlog of orders” indicate the total of increases or decreases accompanying foreign
currency translation adjustments related to foreign currency business, increases resulting from adjustments for neworders, and decreases resulting from contractual changes in orders received before the previous fiscal year.

2. SalesMillions of Yen
Apr. 1, 2002 –Apr. 1, 2001 –Mar. 31, 2003
Mar. 31, 2002
Amt
%
Amt
%

Engineering
Petroleum-related .........................................................
Petrochemical-related...................................................
Chemical-related ...........................................................
Gas and Power Utilities-related ..................................
Social developments-related........................................
Industrial machinery-related.......................................
Other...............................................................................
Total Engineering
Other...............................................................................
Total................................................................................

34,496+296.8%16,236+45.1%
19,589-18.3%
47,972+60.5%
2,011-83.6%
1,719-81.3%
39,486-4.9%
161,511+18.1%
4,855+1.2%
166,367+17.6%

20.7

8,693

6.1

9.9

11,1897.9

11.8

23,98817.0

28.8

29,89321.1

1.2

12,230

8.6

1.0

9,187

6.5

23.7

41,52429.4

97.1

136,708

96.6

2.9

4,797

3.4

100.0

141,505

100.0

29

Breakdown of Domestic and Overseas Sales
Millions of Yen
Apr. 1, 2002 –Mar. 31, 2003
Amt

Domestic ....................................................................

83,053-13.9%
83,313+84.8%
166,367+17.6%

Overseas ....................................................................
Total ...........................................................................

Apr. 1, 2001 –Mar. 31, 2002
%

Amt

%

49.9

96,42268.1

50.1

45,083

31.9

100.0

141,505100.0(Notes)(1)“Status of production” is not listed, because it is difficult to define production results for the Chiyoda Group.
(2)
Sales results and percentages of total sales for main customers are shown below.
Millions of Yen
Apr. 1, 2002 –Mar. 31, 2003
CustomerRas Laffan LNG Co., Ltd.
(3)

Apr. 1, 2001 –Mar. 31, 2002
CustomerAmt%

23,811

14.3 Ras Laffan LNG Co., Ltd.

Amt%

10,818

7.6

Amounts contained in these tables do not include consumption tax.

30