CONSOLIDATEDFINANCIALSTATEMENTS

FY2021For the year ended March 31, 2022

CORPORATE PHILOSOPHY

CONTENTS

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

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

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

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

customers, business partners, employees, and local communities.

48   Independent Auditor’s Report01Consolidated
Balance
Sheet
Chiyoda Corporation
andConsolidated
Subsidiaries
ChiyodaCorporation
andConsolidated Subsidiaries
March 31, 2022

Consolidated Balance
Sheet
Consolidated
Balance Sheet
March 31, 2022 March 31, 2022

ASSETSASSETS

Thousands of
U.S. Dollars
Millions of Yen
1)
Millions(Noteof Yen2022
20212022
2022
2021

CURRENT ASSETS:
CURRENT ASSETS:
Cash and cash equivalents¥ 59,099
Cash and(Notecash21)equivalents (Note 21)
Short-term investments(Note 21)
9,696
Short-term
investments (Note 21)
Notes and accountsNotes
receivable—trade
6)
29,973and accounts(Notereceivable—trade(Note 6)
Costs and estimatedearnings
on long-term
construction
Costsand estimatedearnings
on long-term construction
contracts (Note 6) contracts (Note 6)
Contract assets (Notes
6 andassets16) (Notes 6 and 16)
10,465Contract
Costs of construction
contracts
in processcontracts in process
18,529Costsof construction
Accounts receivable—other
6 and 21) (Notes 6 and 21)
83,246
Accounts(Notes
receivable—other
Jointly controlled assets
joint venture(Note21) venture (Note 21) 141,438
Jointlyofcontrolled
assetsof joint
Prepaid expenses andotherexpenses and other
21,731
Prepaid
Allowance for doubtful
accounts(1,498)
Allowancefor doubtful accounts¥ 98,738¥ 59,099 $ 484,423¥ 98,738
8,2509,696
79,4768,250
30,480245,682
29,97330,48018,046
18,04685,784
10,4658,767
151,879
18,5298,767
77,261
682,350
83,246
77,261
56,845
141,438 1,159,330
56,845
8,906
178,128
21,731
8,906(1,405)(1,498) (12,284)(1,405)

Total current assetsTotal current assets

372,682

305,891
372,682 3,054,771
305,891

PROPERTY, PLANT
AND EQUIPMENT:PROPERTY,
PLANT AND EQUIPMENT:Land (Notes 10 andLand
12) (Notes 10 and 12)
Buildings and structures(Notesand 12) (Notes 10 and 12)
Buildings
and10
structures
Machinery and equipment
Machinery and equipment
Tools, furniture andTools,
fixtures(Note 10)
furnitureand fixtures (Note 10)
Construction in progress
Construction in progress
Total
Total
Accumulated depreciation
Accumulated depreciation

5,100
13,548
1,659
6,286
11
26,607(15,569)

4,8535,100
41,8104,853
14,105
111,056
13,548
14,105
1,2951,659
13,601
1,295
5,9486,286
51,531
5,948
106 1196
106
26,308218,096
26,60726,308(14,882)(15,569) (127,617)(14,882)

11,038

11,426
11,03890,478
11,426

Net property, plant Net
and property,
equipment
plant and equipment

INVESTMENTS AND
OTHER ASSETS:
INVESTMENTS
AND OTHER ASSETS:
Investment securities(Notes 7,securities
21 and 22)
1,479
Investment(Notes 7, 21 and 22)
Investments in andInvestments
advances toinunconsolidated
and advances to unconsolidated
subsidiaries and associatedcompanies(Notes 9companies
and 21) (Notes 9 and 4,032
subsidiaries
and associated21)
Goodwill
251
Goodwill
Software
4,031
SoftwareAsset for retirementAssetbenefits(Note 13) benefits (Note 13)633
for retirement
Deferred tax assetsDeferred(Note 15)129
tax assets (Note 15)
Other assets
1,137
Other assets
Allowance for doubtful
accounts(18)
Allowancefor doubtful accounts

1,7201,479

12,125
1,720

3,9814,032
285 251
4,0324,031
566 633
394 129
1,4481,137(164) (18)33,049
3,981
2,063
285
33,042
4,032
5,189
566
1,065
394
9,320
1,448
(148)
(164)

Total investments andotherassets and other assets
Total
investments

12,266
11,676

95,70812,266

11,676

Thousands of
U.S. Dollars(Note 1)2022LIABILITIES AND EQUITY
LIABILITIES AND EQUITYCURRENT LIABILITIES:CURRENT LIABILITIES:
Notes and accountsNotes
payable—trade
(Note
21)
¥ 96,084¥ 115,187$ 484,423
and accounts
payable—trade(Note 21)
¥ 96,084 $ 787,577¥ 115,187
Current portion of long-term
debt (Notes
10, 12 debt
and 21)
21,2691,201
174,336
79,476
Current portionof long-term(Notes 10, 12 and 21)
21,2691,201
Accounts payable—other44,022
4,200
360,839
245,682
Accounts payable—other44,022
4,200
Income taxes payable
978638 978
8,020638
Income taxes payable
Advance receipts on
construction
contracts
74,784
Advancereceipts
on construction contracts
74,784Contract liability (Note16) liability (Note 16)
143,43185,784Contract
143,431 1,175,670
Deposits received (Note15) received (Note 15)783
4,898 783
6,421
151,879
Deposits
4,898
Allowance for warranty
costs for
works
3,348
8233,348
27,448823
682,350
Allowance
for completed
warranty costs
for completed works
Allowance for losses
on construction
contracts(Notes 3 and15) (Notes 34,815
34,443285,376
1,159,330
Allowance
for losses
on construction
contracts
3 and 15)
34,81534,443
Provision for businessstructure
17
178,128
Provisionfor improvementbusiness structure improvement
17
Accrued expenses Accruedand otherexpenses and other
5,940
8,460
48,694(12,284)
5,940
8,460
3,054,771

Total current liabilities
Total current liabilities

TOTAL¥ 395,396¥ 329,583¥ 395,396 $ 3,240,957¥ 329,583

350,675

LONG-TERM LIABILITIES:LONG-TERM LIABILITIES:Long-term debt (Notes
11 anddebt21) (Notes 11 and 21)
25,631Long-term
41,810
Deferred tax liabilities(Note tax15) liabilities (Note 15)533
Deferred
111,056
Provision for treatmentof PCB
239
Provision
forwastetreatment of PCB waste
13,601
Liability for retirement
benefits(Note 15) benefits (Note 15)773
Liability
for retirement
51,531
Asset retirement obligations(Note 15)
1,733
Asset retirement
obligations (Note 15)
96
Other
48
Other
218,096(127,617)
Total long-term liabilities
28,960Total long-term liabilities
90,478COMMITMENTS AND
CONTINGENT
LIABILITIESCOMMITMENTS
AND
CONTINGENT LIABILITIES(Notes 20 and 22) (Notes 20 and 22)
12,125EQUITY (Note 14):EQUITY (Note 14):
Common stock—authorized,
570,000 thousand shares;
Common stock—authorized,
570,000 thousand shares;
33,0492022 andshares
2021 andissued, shares
260,324inthousandin 2022 and 2021 and
2,063 issued, 260,324 thousand
175,000 thousand shares;
preferred stock—authorized,
175,000 thousand shares;
33,042 preferred stock—authorized,
2022 andshares
2021 in 2022 and 2021 15,014
issued, shares
175,000inthousand
5,189 issued, 175,000 thousand
Capital surplus
142
Capital surplus
1,065(Accumulated deficit)
retained earnings(1,142)(Accumulated
deficit) retained earnings
9,320
Treasury stock—atTreasury
cost, 1,357
thousandsharesstock—atcost,
1,357inthousand shares in(148)2022 and 2021
(849)
2022 and 2021
Accumulated other Accumulatedcomprehensive
income:othercomprehensive income:
95,708
Unrealized gain onUnrealized
available-for-sale83
gain onsecurities
available-for-sale securities
Deferred gain on derivatives
underaccounting
Deferred gain
onhedgederivatives
under hedge accounting1,656
Foreign currency translation
adjustments(6)
Foreign currencytranslation adjustments
Defined retirement Defined
benefit plans
755
retirement benefit plans
Total
15,654
Total
Noncontrolling interests
106
Noncontrolling interests
Total equity

TOTAL

Thousands of
U.S. Dollars
Millions of Yen
1)
Millions(Noteof Yen2022
20212022
2022
2021

TOTAL
$ 3,240,957

TOTAL

Total equity

15,761¥ 395,396

244,657
350,675 2,874,386
244,657

Thousands of
U.S. Dollars(Note 1)2022
$ 787,577
174,336
360,8398,020
1,175,670
6,421
27,448285,376
48,694
2,874,386

45,612
25,631
533
239 239761 773
1,523
1,733
43 48

210,094
45,612
4,371
1,959239
6,342761
14,210
1,523
399 43210,094
4,371
1,959
6,342
14,210399

48,17828,960237,377
48,178237,377

15,01415,014142 142
15,708(1,142)

123,072
15,014
1,168142(9,366)
15,708123,072
1,168(9,366)(1,435)(849)(6,962)(1,435)(6,962)203 8330
1,656
5,300 (6)1,434 755
36,39915,654348 106

684203
13,576 30
(51)
5,300
6,195
1,434
128,317
36,399875348684
13,576(51)
6,195
128,317875

36,747
15,761

129,193
36,747129,193¥ 329,583¥ 395,396 $ 3,240,957¥ 329,583$ 3,240,957

See notes to consolidated
financialstatements.
See notes
to consolidated
financial statements.
-6-

02

Chiyoda Corporation

Consolidated Financial Statements FY2021

-6-

03

Consolidated
Operations
Chiyoda Corporation Statement
and Consolidatedof
Subsidiaries

Chiyoda Corporation and Consolidated Subsidiaries

Year Ended March 31, 2022

Consolidated Statement of Operations
Year Ended March 31, 2022

Consolidated Statement of Operations
Year Ended March 31, 2022

Millions of Yen
2022
2021
REVENUE¥ 311,115¥ 315,393$ 2,550,127

288,321295,332

2,363,289

22,79420,061

186,838SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES (Note 17)

12,24913,046

100,403

Operating income

10,545

7,015

86,434

687

1,372
33

5,635

COST OF REVENUE
Gross profit

OTHER INCOME (EXPENSES):Interest and dividend income
Equity in earnings of associated companies
Gain on liquidation of subsidiaries and associatedcompanies (Note 18)
Gain on sales of investment securities
Gain on sales of shares of subsidiaries andassociated companies
Interest expense
Equity in losses of associated companies
Settlement payments
Project related loss due to settlements with customers(Note 19)
Foreign exchange gain
Impairment loss (Note 8)
Loss on retirement of fixed assets
Loss on liquidation of subsidiaries and associatedcompanies
Loss on valuation of investment securities (Note 7)
Other—net

588
160
413
(889)

(879)
(321)
(201)
(20,374)
1,406
(426)
(306)

820

Other (expenses) income—net(19,803)

1,860(162,322)(LOSS) INCOME BEFORE INCOME TAXES(9,258)8,876(75,887)

INCOME TAXES (Note 15):
Current
Deferred

3,509
59

848
33

28,769
490

3,569

882

29,260(12,828)

7,993(105,148)(198)

NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS
OF THE PARENT¥ (12,629)-7Chiyoda Corporation

Consolidated Financial Statements FY2021¥ (56.88)(12.68)2021¥ 22.76
8.20
20.78

U.S. Dollars2022$ (0.47)(0.10)

See notes to consolidated financial statements.

(167,000)
11,526(3,495)(2,515)110

NET LOSS ATTRIBUTABLE TO NONCONTROLLINGINTERESTSPER SHARE OF COMMON STOCK (Notes 2.ab and 24):
Basic net (loss) income
Diluted net (loss) income
Cash dividends applicable to the year

Yen

(7,207)(2,634)(1,649)(1,985)
(734)
1,597

NET (LOSS) INCOME

2022

4,825
1,314

(242)
(89)
194

Total income taxes

04

Thousands of
U.S. Dollars(Note 1)2022

(1,624)¥

7,993$ (103,523)(Continued)-8-(Concluded)05

ConsolidatedofSubsidiaries
Comprehensive Income
Chiyoda CorporationStatement
and Consolidated
Year Ended March 31, 2022

Consolidated Statement of Comprehensive Income
Year Ended March 31, 2022

Millions of Yen
2022
2021
NET (LOSS) INCOME

Thousands of
U.S. Dollars(Note 1)2022

¥ (12,828)¥ 7,993$ (105,148)

(119)
1,625
(5,350)
(678)
79

144
24
2,324
1,420
(60)

(982)
13,323(43,860)(5,561)652(4,444)

3,854(36,429)COMPREHENSIVE (LOSS) INCOME¥ (17,272)¥ 11,847$ (141,577)

TOTAL COMPREHENSIVE (LOSS) INCOME
ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests¥ (17,109)(163)¥ 11,849(1)$ (140,241)(1,336)OTHER COMPREHENSIVE INCOME (LOSS) (Note 23):
Unrealized (loss) gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income (loss) of associates
Total other comprehensive (loss) income

See notes to consolidated financial statements.

-9-

06

Chiyoda Corporation

Consolidated Financial Statements FY2021

07

Consolidated Statement of Changes in Equity

diaries
ChiyodaChiyodaCorporation
Corporation
and Consolidated
and
ChiyodaConsolidated
Corporation
Subsidiaries
Subsidiaries
and Consolidated Subsidiaries
Year Ended March 31, 2022

Consolidated
Consolidated
Statement
Statementof Changes
ofConsolidated
Changesin Equityin Equity
Statement of Changes in Equity
Year EndedYear Ended
March March
31, 2022
31, 2022Year Ended March 31, 2022

ousandsg

Millionsof YenThousands
MillionsMillions
of Yen of Yen
Millions of Yen
Accumulated Other Comprehensive Income (Loss)
Accumulated
Other
Comprehensive Income (Loss)
Accumulated
Accumulated
Other Comprehensive
Other Comprehensive
IncomeIncome(Loss)(Loss)
Unrealized
Outstanding
Outstanding
Outstanding
Outstanding
CommonOutstanding
CommonOutstanding
CommonUnrealized
Unrealized
Unrealized
Retained
Foreign
DeferredGain
Retained
Retained
Retained
Foreign
Foreign DeferredDefinedDefined
ForeignDefinedNumberNumberofof
NumberNumberof (Loss)ofStock
Number
Stockof GainNumberofStockDefinedDeferredDeferredGain Gain
Gain
Gain (Loss)
Gain(Loss)
Gain(Loss)
Earnings
Currency
onand
Derivatives
onShares
AvailableEarnings
Earnings
Currency
Currency
on Derivatives
on Derivatives
Retirement
on Derivatives
Retirement Currency
Retirement
SharesSharesofofSharesofof andSharesofSharesofandRetirement
on Availableon
AvailableonEarnings
Available(Accumulated
Treasuryunder Hedge
Translation
Benefit
Noncontrolling
Total
for-Sale
Total Total Noncontrolling
PreferredPreferred
CapitalCapital(Accumulated(Accumulated
Preferred
Treasury
CapitalTreasuryfor-Sale(Accumulated
under Treasury
Hedge
under Hedge
Translation
TranslationBenefit
under Hedge
BenefitTranslation
Noncontrolling
Noncontrolling
BenefitCommonCommonPreferredPreferred
CommonPreferred
for-Sale
for-Sale
Deficit) Stock Stock
Stock Stock
Total Securities
EquityAccounting
Adjustments
Securities
Stock
SurplusSurplus
Deficit)Deficit)
Stock Plans
Stock
Surplus
StockSecurities
Deficit)Interests
Stock
Interests
EquityEquityInterests
Accounting
Accounting
Adjustments
AdjustmentsPlans
Accounting
Plans Total
Adjustments
Total Interests
Plans
Total
Stock StockStock
Stock
Securities
Thousands
Thousands

Outstanding
Number of
Shares ofPreferred
Stock

CommonStockandPreferred
Stock

CapitalSurplus175,000¥ 78,396¥ 202072,128BALANCE,¥ (127,778)¥ (1,435)175,000¥ 58 ¥ 78,396¥ ¥ 72,128
6 ¥ 175,000¥ 3,033¥¥ (1,435)
13¥ 24,423¥624,943
BALANCE,BALANCE,
APRIL
APRIL
1, 20201,
APRIL
258,967
1, 258,967
2020
175,000
258,967¥ 78,396
72,128(127,778)¥ ¥(127,778)
78,396¥ ¥72,128(1,435)¥ 58¥ (127,778)¥ 58 ¥ 519¥ ¥ (1,435)
6¥¥ 3,033¥ 58¥ 3,033 ¥ ¥ 13¥ 6 13¥ 24,423¥¥24,423
3,033 ¥ 519¥ ¥ 519
13 ¥ 24,943¥ 24,423¥ 24,943
Net income
attributableto ownersofattributable to owners of
Net income
attributableto ownersofNet income
7,993
7,993
the parent
the parent
7,993
7,993 7,993
the parent(63,381)
reduction 63,381 Capital reduction(63,381)(63,381)63,38163,381(63,381)
63,381
CapitalCapital
reduction
Deficit Deficit
disposition
disposition (135,494) Deficit135,494(135,494)(135,494) 135,494
135,494
disposition(135,494)
135,494
Purchase
Purchaseof treasuryof treasury
stock stock Purchase of treasury stock
Purchase
Purchaseof sharesof sharesof consolidatedof consolidated
Purchase of shares of consolidated
126
126 126
subsidiaries
subsidiaries
subsidiaries
126 126
3,856
144
24
2,266
1,420
Net change
in the year
Net change in the year
Net change
in the year
144 144 (171) 24
175,000
15,014
142BALANCE,
15,708(1,435)203 15,014
BALANCE,BALANCE,
MARCH
MARCH
31, 2021
31, 2021
MARCH
258,96731,
258,967
2021 175,000
175,000
258,967
15,01430 142175,000
1425,300
15,70815,014
15,7081,434(1,435)(1,435)
14236,399
203 15,708
203 348
Cumulativeof changes
ineffects of changes inCumulative
effectseffects
of changes
in Cumulative
accounting(Note 4) accounting1policies (Note 4)
accounting
policiespolicies(Note 4)
Net
loss attributableto owners
ofloss attributable to owners of
Net loss
attributableto ownersof Net(12,629)
the parent
the parent
the parent(3,636) ¥20.78 per share
Cash dividends,
per share
Cash dividends,
Cash dividends,¥20.78¥20.78
per share(375)
Purchaseof treasury
Purchaseof treasury
stock stock Purchase of treasury stock(585) Disposal of treasury stock
961
Disposalof treasury
Disposalof treasury
stock stock
Transferon disposalofTransfer of loss on disposal ofTransferof loss of
onlossdisposalof585
treasurytreasury(585)stocktreasurystock stock
Net change
Net change
in the year
in the year
Net change in the year

1

(119)

1,625

585

ChiyodaChiyodaCorporation
Corporation
and Consolidated
and
ChiyodaConsolidated
Corporation
Subsidiaries
Subsidiaries
andConsolidated
ConsolidatedSubsidiaries
Subsidiaries
ChiyodaCorporation
and

7,993

(171)
(171) 1,420

126126126
3,856
3,684
3,684

(171)

126
3,684

30
(1,435)3036,747
5,300
203 5,300

1,434 30
1,434 36,39936,399
5,300

348 1,434
348

36,74736,39936,747348

36,747(12,629) (12,629)(3,636) (3,636)(375) (375) (375)961 (585)
961 375(12,629)(3,636)(375) (375)
375
961

585

7,993
7,993
7,993

126 126
1,420 3,8562,266
3,856
1,420 241585(585) (585)(5,306)(678)

7,993 7,993

1

1 1

1

(12,629)(12,629)(3,636)(3,636)(375) (375)375 375(12,629)(12,629)(12,629)(3,636)(3,636)(3,636)
(375)
(375)
(375)
375375375(12,629)(3,636)
(375)
375

(678)
1,625(678) (4,479)(5,306)(4,479) (241) (241)(678)(4,720)(4,479)(4,720)(241)(4,720)(6) ¥ ¥755
1,656
¥ 755¥ 15,654¥¥15,654(6) ¥ 106¥ ¥ 106
755 ¥ 15,761¥ 15,654¥ 15,761¥ 106¥ 15,761(585)(4,479)(119) (119) (241)
1,625 1,625(4,720)(5,306)(119)(5,306)

175,000¥ 15,014¥31, 2022
142BALANCE,¥ (1,142)¥ 2022(849)175,000¥ 83 ¥ 15,014¥ 1,656¥ (1,142)(6)¥ ¥ 15,014¥¥ 755¥ 15,654¥ 15,761
BALANCE,BALANCE,
MARCH
MARCH
31, 2022
MARCH
258,96731,
258,967
175,000
258,967¥ 15,014¥
142¥ 175,000
142(1,142)(849)¥ ¥ (849)
142¥ 83¥ ¥(1,142)
83 ¥ 106¥ 1,656¥ ¥(849)
1,656¥ ¥ 83(6)¥
Consolidated
Consolidated
Statement
Statementof ChangesofConsolidated
Changesin Equity
in Statement
EquityStatementofofChanges
ChangesininEquity
EquityConsolidated
Year EndedYear Ended
March March
31, 2022
31, 2022
YearEnded
EndedMarch
March31,
31,2022
2022
Year

1

1

Thousands
Thousandsof U.S.ofDollars
U.S. Dollars(Note 1)
(Note
Thousands
1)
U.S.Dollars
Dollars(Note(Note1)1)
Thousands
ofofU.S.
Accumulated
Other
ComprehensiveIncome
Income(Loss)(Loss)
Accumulated
Accumulated
Other Comprehensive
Other Comprehensive
IncomeIncome(Loss)(Loss)
Accumulated
Other
Comprehensive
CommonCommonCommonUnrealized
Unrealized
Unrealized
CommonUnrealized
Retained
Retained
Retained
Foreign
ForeignDefinedDefined
ForeignDefinedStock Stock
Stock
Gain
(Loss)
DeferredGain Gain
Gain(Loss)
Deferred
Gain
Gain (Loss)
DeferredForeignDefinedStock
Retained
Gain(Loss)
DeferredGain
Earnings
Earnings
Earnings
Currency
Currency
Currency
on Derivatives
on Derivatives
Retirement
Derivatives
Retirement Currency
Retirement
and andandon AvailableAvailableon Availableonon
Derivatives
Retirement
andEarnings
ononAvailableTreasury
Treasury(Accumulated
Treasury
Total TotalNoncontrolling
PreferredPreferred CapitalCapital (Accumulated
Preferred(Accumulated
Capital(Accumulated
Hedge
under Hedge
Translation
Translation
under
BenefitHedge
Benefit Translation
Translation Noncontrolling
Noncontrolling
Benefit
Noncontrolling
for-Sale
for-Sale
for-Sale under
Treasury
Preferred
Capitalunder
Hedge
Benefitfor-Sale
Stock Stock SurplusSurplus Deficit)
Stock
Deficit) Surplus
Stock
Surplus
Stock Securities
Deficit)
Stock
Interests Equity
Interests
Accounting
Adjustments
Adjustments
Accounting
Plans Plans Adjustments
Adjustments
Total Total Interests
Plans
Total Equity Interests
Securities
Securities Accounting
Stock
Deficit)
Stock
Accounting
Plans
Total
Securities
BALANCE,BALANCE,
MARCH
MARCH
31, 2021
31, 2021
BALANCE,MARCHMARCH31,
31,20212021 $ 123,072$ 123,072 $ 1,168$ 1,168 $$128,757$123,072
123,072$ 128,757$$(11,764)$
1,168$ (11,764) $ 1,667$128,757
128,757$ 1,667
BALANCE,
1,168
Cumulativeof changes
Cumulativein accounting
effectsofofchanges
changesininaccounting
accounting
Cumulative
effectseffects
of changes
in accounting
Cumulative
effects(Note 4)
policies(Note(Note4)4)
policiespolicies(Note 4)
policiesNet
loss attributableto owners
Net
of
loss
theattributable
attributableparentownersofofthe
theparent
parentNet loss
attributableto ownersof theparentNet
loss
totoowners
Cash dividends,$0.17
per share
Cashdividends,
dividends,$0.17$0.17perpershareshare
Cash dividends,$0.17 per
share
Cash
Purchaseof treasury
Purchaseofoftreasury
treasurystock
stock
Purchaseof treasury
stock stock Purchase
Disposalof treasury
Disposalofoftreasury
treasurystock
stock(4,802)(4,802)
Disposalof treasury
stock stock Disposal
Transferon disposalofTransfertreasurystocklossonondisposal
disposalofoftreasury
treasurystock
stock 4,802 4,802
Transferof loss of
onlossdisposalof treasury
stock
Transfer
ofofloss
Net change
Net change
in the year
in the year
Netchangechangeininthe
theyear
year
Net

9
9
(103,523)(103,523)(29,807)(29,807)(3,079)(3,079)(4,802)7,881 7,881(4,802)(4,802)(4,802) 4,802
4,802

99
(103,523)(103,523)(29,807)(29,807)(4,802)(4,802)(982) (982)

BALANCE,BALANCE,
MARCH
MARCH
31, 2022
31, 2022
BALANCE,MARCHMARCH31,
31,20222022 $ 123,072$ 123,072 $ 1,168$ 1,168 $$ $123,072(9,366)
123,072$ (9,366)$$ $(6,962)
1,168$ (6,962) $ $ 684(9,366)$ 684
BALANCE,
1,168(9,366)- 10 See notes
Seeto
notes
consolidated
to consolidated
financialfinancialSeestatements.
notes
statements.
consolidatedfinancial
financialstatements.
statements.
See
notes
totoconsolidated

08

Chiyoda Corporation

Consolidated Financial Statements FY2021- 10 - - 10 -(11,764)253$ 253 $ $$1,66743,444$ 43,444 $$$11,757
253$ 11,757$ 298,357
43,444$ 298,357 $$2,852$11,757
11,757$ 2,852 $$$298,357
301,209298,357$ 301,209 $ $2,852$$$(11,764)
1,667
253
$ $43,444
2,852
99(103,523)(103,523)(29,807)(29,807)(3,079)(3,079)
3,079 3,079(3,079)(3,079)7,881
7,881
13,32313,323(Continued)

Total
Total
EquityEquity301,209$ $301,209

9
999(103,523)(103,523)(103,523)(103,523)(29,807)(29,807)(29,807)(29,807)(3,079)(3,079)(3,079)(3,079)3,079
3,079 3,079
3,079

99
(103,523)(103,523)(29,807)(29,807)(3,079)(3,079)
3,079
3,079

(38,694)(36,717)(38,694) (1,976)(1,976)(36,717)(38,694)(38,694)(51)$$$13,576
13,576
6,195$ 6,195$ 128,317
128,317(51)$$ $875
6,195$ 875 $$$128,317
129,193
128,317$ 129,193 $ $ 875
875$ $ $(51)6,195

129,193$ $129,193(43,496)(982) (43,496) 13,323
13,323(5,561)(5,561) (36,717)(43,496)(36,717) (1,976)(5,561)(1,976)(982)(43,496)(5,561)(6,962)$ 13,576 $ $$684
684
(51)
$
$$$13,576(6,962)- 10 -¥ 24,943

126
24 3,684
144 2,266
2,266

1

1

(12,629)(12,629)(3,636)(3,636)(585) (585)

1

7,993

¥ 519

Total
Equity(Continued)(Continued)(Continued)

09

ConsolidatedofSubsidiaries
Cash Flows
Chiyoda CorporationStatement
and Consolidated

Chiyoda Corporation and Consolidated Subsidiaries

Year Ended March 31, 2022

Consolidated Statement of Cash Flows
Year Ended March 31, 2022

Consolidated Statement of Cash Flows
Year Ended March 31, 2022

Millions of Yen
2022
2021
OPERATING ACTIVITIES:(Loss) income before income taxes
Adjustments for:
Income taxes paid
Depreciation
Impairment loss
Amortization of goodwill(Decrease) increase in allowance for doubtful accounts
Increase (decrease) in allowance for warranty costs forcompleted works(Decrease) increase in allowance for losses on
construction contracts(Decrease) increase in liability for retirement benefits
Foreign exchange gain—net
Decrease in provision for business structure
improvement
Equity in losses (earnings) of associated companies
Loss on valuation of investment securities
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associatedcompanies
Gain on liquidation of subsidiaries and associatedcompanies
Loss on sales and disposals of fixed assets
Changes in operating assets and liabilities:
Decrease in trade notes and accounts receivable,
and costs and estimated earnings on long-term
construction contracts
Increase in costs of construction contracts in process
Decrease in trade notes and accounts payable
Decrease in advance receipts on construction
contracts
Increase in contract liabilities
Increase in accounts receivable—other
Decrease in accounts payable—other(Increase) decrease in jointly controlled assets ofjoint venture
Increase in interest and dividends receivable
Other—net
Total adjustments
Net cash used in operating activities—(Forward)¥ (9,258)¥

Thousands of
U.S. Dollars(Note 1)
2022

8,876

$ (75,887)(1,168)
3,060
426
33
(86)

2,504
3,281
33
162

(9,575)25,082
3,495
277
(709)

2,475

(15)

20,293(2,806)(362)(1,072)

902
398
(225)

(23,000)(2,972)(8,794)

(17)
321
89
(160)

(383)
(33)

(147)
2,634
734
(1,314)

(413)
(326)
319

8,380
(9,744)(25,028)
65,506(111)
39,750(2,678)2,621

12,377(3,809)(20,259)(40,465)

68,692(79,872)(205,151)(11,670)
1,144

536,936(910)
325,823(82,678)
15(13,148)(16,333)

37,59577(10,883)(29,682)(677,694)
124(107,772)(133,880)¥ (25,591)¥ (20,806)$ (209,767)

Millions of Yen
2022
2021
Net cash used in operating activities—(Forward)
INVESTING ACTIVITIES:Net (increase) decrease in time deposits
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Proceeds from sales of intangible assets
Payments for purchases of investment securities
Proceeds from sales of investment securities
Proceeds from liquidation of subsidiaries andassociated companies
Proceeds from sales of shares of subsidiaries andassociated companies
Purchase of investments in subsidiaries withchanges in consolidation scope
Proceeds from sales of investment in subsidiaries withchanges in consolidation scope
Payments of loans receivable
Proceeds from collections of loans
Other—net
Net cash used in investing activities
FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Payments of cash dividends
Other—net

Thousands of
U.S. Dollars(Note 1)2022

¥ (25,591)¥ (20,806)$ (209,767)

(576)
(515)
1
(1,624)

348
(608)
563
(1,541)746(659)(4,725)(4,226)14(13,317)

(720)
230
79

(5,909)
1,889
649

14
(18)
(987)
326

(236)
(869)
13
(3)

(8,097)
2,673(3,787)(2,250)(31,047)(126)(3,636)(433)

10,000(122)(398)(1,038)(29,807)(3,556)(4,197)

9,478(34,403)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS

3,938(3,616)32,279NET DECREASE IN CASH AND CASH EQUIVALENTS(29,638)(17,194)(242,939)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

98,738

115,932

809,329¥ 69,099¥ 98,738$ 566,390

Net cash (used in) provided by financing
activities

CASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

- 12 -

10

Chiyoda Corporation

Consolidated Financial Statements FY2021(Continued)- 13 -(Concluded)11

Chiyoda Corporation and Consolidated Subsidiaries

Notes to Consolidated Financial Statements

Notes
to Consolidated
Year Ended
March 31, 2022 Financial Statements
Year Ended March 31, 2022
1.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan("Japanese GAAP"), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards ("IFRS").
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications
have been made in the 2021 consolidated financial statements to conform to the classifications usedin 2022.

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

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

c.

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

d.

Revenue Recognition—The Group provides the services of planning, engineering,procurement, construction, commissioning and maintenance of various plants, and also provides
it of consulting for industrial facilities in the engineering business. Mainly long-term construction
contracts are concluded. The guarantee that the plants satisfy the required specification definedin the construction contracts is not recognized as an independent performance obligation as it
does not separately provide an independent service. The construction of plants follows the
specification required by customers and the Group has a piece-work claim on the portion of theobligation that has been fulfilled. Therefore, the Group determines that the performanceobligation is satisfied over time and recognizes revenue based on the progress in satisfying theperformance obligation.

The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich Chiyoda Corporation (the "Company" or "Chiyoda") is incorporated and principally operates.
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for theconvenience of readers outside Japan and have been made at the rate of ¥122 to $1, theapproximate rate of exchange at March 31, 2022. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
Japanese yen figures less than a million yen are rounded down to the nearest million, except for per
share data.
U.S. dollar figures less than a thousand U.S. dollars are rounded down to the nearest thousand,except for per share data.
2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements as of March 31, 2022, include theaccounts of the Company and its 16 (19 in 2021) significant subsidiaries (together, the "Group").
Chiyoda (Thailand) Limited was excluded from the scope of consolidation due to the completionof liquidation.
Chiyoda Singapore (Pte) Limited was excluded from the scope of consolidation due tosubstantial completion of liquidation procedure.
Under the control and influence concepts, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are fully consolidated, and those companies
over which the Group has the ability to exercise significant influence are accounted for by theequity method.
Investments in five (five in 2021) associated companies are accounted for by the equity method.
Investments in the remaining unconsolidated subsidiaries and associated companies are statedat cost. If the equity method of accounting had been applied to the investments in thesecompanies, the effect on the accompanying consolidated financial statements would not bematerial.
Most of the consolidated foreign subsidiaries have a December 31 year-end, which is different
from that of the Company. As a result, adjustments have been made for any significant
transactions which took place during the period between the year-end of these subsidiaries andthe year-end of the Company.
- 14 -

12

Chiyoda Corporation

Consolidated Financial Statements FY2021- 15 -

13

Notes to Consolidated Financial Statementse.

The percentage of completion is measured by the ratio of costs accrued on and before the end ofreporting period in the estimated total construction cost, which is called the input method. If theperiod of construction from the beginning date defined in the contract to the estimated date ofperformance obligation completion is extremely short, the Group recognizes revenue at the timeof performance obligation completion, adapting alternative treatment, instead of recognizing
based on percentage of completion.

n.

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

o.

Allowance for Losses on Construction Contracts—The allowance for losses on construction
contracts is provided for an estimated amount of probable losses to be incurred in future years in
respect of construction projects in progress.

In addition, if liquidated damage defined in contracts for construction delays is expected, theestimated variable consideration is deducted from contract prices agreed in contracts withcustomers.

p.

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

Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and exposed to insignificant risk of changes in value. Cash equivalents include time
deposits, certificates of deposit and short-term loans receivable based on uncommitted line ofcredit loan agreement with an affiliated company of Mitsubishi Corporation, all of which mature or
become due within three months of the date of acquisition.

q.

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

r.

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

f.

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

g.

Investment Securities—All equity securities other than nonmarketable available-for-sale equity
securities are classified as available-for-sale equity securities and are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported in a separate component of equity.
The cost of equity securities sold is determined based on the moving-average method.

The Company and its consolidated domestic subsidiaries account for the liability for retirement
benefits based on the projected benefit obligations and plan assets at the balance sheet date.
The projected benefit obligations are attributed to periods on a benefit formula basis. Actuarial
gains and losses are amortized on a straight-line basis over 10 years within the averageremaining service period.

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

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

i.

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

j.

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

k.

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

l.

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

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

14

Chiyoda Corporation

Consolidated Financial Statements FY2021- 16 -

Actuarial gains and losses that are yet to be recognized in profit or loss are recognized withinequity (accumulated other comprehensive income), after adjusting for tax effects, are recognizedin profit or loss over a certain period no longer than the expected average remaining service
period of the employees.
s.

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

t.

Board Incentive Plan Trust for Director's Compensation—The Company introduced a"Performance-Based Stock Compensation Plan" (the "Plan") to improve medium-to-long termbusiness performance and to heighten the mindset of contributing to the enhancement ofcorporate value of our directors and executive officers (excluding non-executive directors andnon-residents of Japan) (the "Directors & Officers") based on the ordinary general meeting ofshareholders of the Company on June 23, 2021, from this consolidated fiscal year.
Accounting policies regarding the Plan follow "Practical Solution on Transactions of Delivering
the Company's Own Stock to Employees etc. through Trusts" (PITF No. 30 of March 26, 2015).

- 17 -

15

Notes to Consolidated Financial Statements(1) Outline of the Plany.

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

z.

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

The Company introduce a system called BIP (Board Incentive Plan) trust for Director'scompensation ("BIP trust") and will provide the Company's stock and cash equivalent torealized amount of the Company's stock obtained from BIP trust depending on theirpositions and goal achievement after the Directors & Officers' retirement.
(2) Company stock remaining in BIP trust
Company stock remaining in BIP trust was recorded as treasury stock in equity referring
book value of BIP trust excluding accompanying costs. Book value and the number of stocksof the treasury stock at March 31, 2022, were ¥375 million ($3,079 thousand ) and
909,600 stocks.
u.

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

(1) All derivatives are recognized as either assets or liabilities and measured at fair value, withgains or losses recognized in the consolidated statement of operations.

v.

Leases—Japanese GAAP require that all finance lease transactions be capitalized byrecognizing lease assets and lease obligations in the balance sheet.

(2) For derivatives used for hedging purposes, if such derivatives qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of the hedgedtransactions.

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

Foreign currency forward contracts are utilized to hedge foreign exchange risks. Certain assets
and liabilities on construction contracts denominated in foreign currencies are translated at thecontracted rates if the forward contracts qualify for hedge accounting.

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

aa. Accounting Principles and Procedures Adopted When Related Accounting Regulations
Were Unclear (Consolidation Measures for Jointly Controlled Entities)—For jointly
controlled entities that are not legal entities, the assets, liabilities, revenues and expenses areconsolidated according to the amount of interest in the entity. This is conditional upon the factthat the contract specifies all assets and liabilities belong to the co-owners of the entity.

The Company and its consolidated domestic subsidiaries shift from the consolidated declaration
system to the group tax sharing system from following consolidated fiscal year. Please note thatconcerning items which transitioned to the group tax sharing system and those for which thenonconsolidated tax payment system was reviewed in line with the transition to the group tax
sharing system, which has been established under the "Act for Partial Amendment of the Income
Tax Act, etc." (Act No. 8 of 2020), the Company and its consolidated domestic subsidiaries will
not apply the provisions of Paragraph 44 of "Implementation Guidance on Tax Effect Accounting"(ASBJ Guidance No. 28 of February 16, 2018), in accordance with Paragraph 3 of "Treatment of
Tax Effect Accounting for the Transition from the Consolidated Declaration System to the GroupTax Sharing System" (PITF No. 39 of March 31, 2020). As a result, the amounts of deferred tax
assets and deferred tax liabilities are reported based on the provisions of the tax act before theamendment.
From the beginning of the following consolidated fiscal year, the Company plans to apply theprovisions of Paragraph 42 of "The Practical Solution on the Accounting and Disclosure under
the Group Tax Sharing System" (ASBJ Guidance No. 42 of August 12, 2021), defined thetreatment of accounting and disclosure for declaration, local tax, and tax effect accounting.
x.

16

Derivative financial instruments are classified and accounted for as follows:

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

Chiyoda Corporation

Consolidated Financial Statements FY2021- 18 -

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

For incorporated jointly controlled entities, the assets, liabilities, revenues and expenses areconsolidated according to the amount of interest in the entity. This is conditional upon the factthat in reality, the entity could be judged as an unincorporated entity. For example, if the contract
specifies that all assets and liabilities belong to the co-owners, investment amounts are minimal,
and liquidation is certain upon the completion of the project, the entity could be deemed assimilar to unincorporated ones.
ab. Per Share Information—Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average number of common shares
outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reflects the potential dilution that could occur if preferred stocks
were exercised. Diluted net income per share of common stock assumes full exercise ofpreferred stocks.
Cash dividends per share presented in the accompanying consolidated statement of operations
are dividends applicable to the respective fiscal years, including dividends to be paid after theend of the year.

- 19 -

17

Notes to Consolidated Financial Statements

3.

SIGNIFICANT ACCOUNTING ESTIMATES

Liquidated damage against overdue in contract was treated as cost of revenue before, but theCompany changed a method to adopt, which the liquidated damage is treated as a minus ofrevenue, in accordance with the instruction related to variable consideration in ASBJ Statement
No. 29.

Revenue Recognition(1) The amount recorded in the fiscal year ended March 31, 2022
Millions of Yen
2022
2021
Revenue
Revenue recognized in proportion to satisfying
a performance obligation over time
Allowance for losses on construction contracts

Thousands of
U.S. Dollars
2022¥ 279,241¥ 274,126
34,81534,443$ 2,246,935
285,376(2) Information on significant accounting estimates
Revenue recognized in proportion to satisfying a performance obligation over time is based on
the percentage of completion measured by the ratio of costs in total construction cost, which iscalled input method as stated in Note 2, "Summary of Significant Accounting Policies,
d. Revenue recognition."
When it is probable that the total construction costs will exceed total construction revenue and its
amount is reasonably estimated, allowance for losses on construction contracts is recognized bydeducting profit or loss that has been already posted from total estimated excess amount.
A part of the estimation of the total construction revenue based on the contracts with customers
contains the elements of variable consideration, which come from future events that not occurredyet, such as incentive or bonuses from achieving significant milestones and liquidated damages
for construction delays. Such estimation is based on the single amount that is most likely to arise
when chosen from every possible amount of consideration.
In addition, the total construction cost includes significant estimation factors such as individual
risks with construction conduct, and the estimated risks, including the effects of COVID-19 andthe situation in Ukraine. If unpredictable changes in assumptions occur the total construction cost
may change. In such cases, the degree of progress for contracts may change, which could havea significant impact on the figures of revenue recognized in proportion to satisfying aperformance obligation over time and allowance for losses on construction contracts in thefollowing consolidated fiscal year.
4.

Accounting Standards for Revenue Recognition is adopted in accordance with the transitional
measures defined in the proviso Paragraph 84 of "Accounting Standards for Revenue
Recognition." Following that, the amount of cumulative effect, which is incurred by application of
the new accounting standards retrospective to the date before the beginning of this consolidated
fiscal year, is included in the beginning balance of retained earnings—unappropriated in thisconsolidated fiscal year. However, as the method defined in Paragraph 86 of "AccountingStandards for Revenue Recognition" is adopted, the new accounting standards are not applied tothe contracts that have already recognized almost of all revenue by following the previous
method, retrospective to the date before the beginning of this consolidated fiscal year. Also, byapplying the method defined in the Paragraph 86(1) of "Accounting Standards for Revenue
Recognition," the revenue recognition was processed based on the contract conditions reflecting
all the changes in contract that happened before the beginning of this consolidated fiscal year.
The cumulative effects incurred are included in the beginning balance of retained earnings—
unappropriated in this consolidated fiscal year.
As a result, compared with the consolidated statement of operations that applies the previous
accounting policies, revenue increased by ¥228 million ($1,870 thousand), cost of revenue
increased by ¥212 million ($1,741 thousand), operating income increased by ¥15 million($129 thousand) and loss before income taxes decreased by ¥15 million ($129 thousand) in thisconsolidated fiscal year.
Net loss before taxes decreased by ¥15 million ($129 thousand) in the consolidated statement ofcash flows for this consolidated fiscal year.
Reflecting the cumulative impact on net assets at the beginning of this consolidated fiscal year,
beginning balance of retained surplus in consolidated statement of changes in equity increasedby ¥1 million ($9 thousand).

ACCOUNTING CHANGE

The impact on information per share was noted in Note 24, "Net (Loss) Income per Share."a.

Following transitional treatment defined in Paragraph 89-3 of "Accounting Standards for Revenue
Recognition," Note 16, "Revenue" does not include statement for the last consolidated fiscal
year.

Accounting Standards for Revenue Recognition
The Company applies ASBJ Statement No. 29 of "Accounting Standard for Revenue
Recognition" (ASBJ Statement No. 29 of March 31, 2020) from the beginning of this consolidated
fiscal year and recognizes revenue at the amount expected to be received in exchange forpromised goods or services when control of the goods or services is transferred to customers.
Conventionally, the Company had adopted the percentage of completion method of accountingthat measure on the basis of the estimated completion of the physical proportion of the contract
work or completed contract method of accounting for the other contract work. However,regarding the performance obligation satisfying over a certain period, the Group decided to adopt
a revenue recognizing method as estimating the progress of the satisfaction of performanceobligation, and recognize the revenue over the certain period that is based on the extent ofprogress towards completion of the performance obligation. The method of estimating the degreeof progress in satisfying performance obligation is based on the ratio of the cost incurred to theestimated total construction cost (input method). Meanwhile, the Company adopts alternative
method toward very short-term construction contracts from the beginning date in a contract to theestimated point in time of satisfying the obligation, and recognizes revenue upon complete
satisfaction of performance obligation.

18

Contract assets are the right of the Group for consideration recorded by recognizing revenue
based on the progress. At the point that the right of the Group for consideration become
unconditional, contract assets will be transferred to accounts receivable—trade. Contract
liabilities are the consideration received before fulfillment of the contract. With the revenue
recognition for contracts that received the consideration in advance, contract liabilities will betransferred to revenue.

Chiyoda Corporation

Consolidated Financial Statements FY2021- 20 -

Since the Company adopted the Accounting Standards for Revenue Recognition, "Costs andestimated earnings on long-term construction contracts," which was presented in current assets
in the consolidated balance sheet for the last fiscal year, is included in "Contract assets" from thisconsolidated fiscal year. Additionally, "Advance receipts on construction contracts" presented incurrent liabilities is presented as "Contract liabilities." Following transitional treatment defined in
Paragraph 89-2 of "Accounting Standards for Revenue Recognition," the amounts in the lastconsolidated fiscal year were not reclassified per the new presentation.

- 21 -

19

Notes to Consolidated Financial Statementsb.

7.

Accounting Standards for Fair Value Measurement
The Company applies ASBJ Statement No. 30 of "Accounting Standard for Fair Value
Measurement" (ASBJ Statement No. 30 of July 4, 2019) from the beginning of this consolidated
fiscal year and will continue to follow Paragraph 19 of "Accounting Standard for Fair Value
Measurement" and Paragraph 44-2 of "Accounting Standard for Financial Instruments" (ASBJ
Statement No. 10 of July 4, 2019). By applying the standard, the valuation method ofavailable-for-sale investment securities changed from the market value method based on the
average amount of market price in one month prior to the fiscal year-end to the market value
method based on the market price on the last day of the fiscal year. Effects of applying thisaccounting policy to the consolidated financial statement is immaterial.
In Note 21, "Financial Instruments and Related Disclosures," financial instruments categorized byfair value hierarchy are disclosed. Following the transitional treatment defined in Paragraph 7-4 of"Implementation Guidance on Disclosures about Fair Value of Financial Instruments" (ASBJ
Guidance No. 19 of July 4, 2019), notes for the last consolidated fiscal year are omitted.

5.

Investment securities at March 31, 2022 and 2021, consisted of the following:

Non-current—Equity securities¥ 1,479(Consolidated Statement of Cash Flows)"Decrease in accounts payable—other" included within "Decrease in trade notes and accounts
payable" under "Operating activities" for the previous consolidated fiscal year is separately stated forthe fiscal year ended March 31, 2022, as the amounts became material. As a result of thisreclassification, the amount of ¥19,115 million presented as "Decrease in trade notes and accounts
payable" for the previous consolidated fiscal year, is reclassified as "Decrease in trade notes andaccounts payable" of ¥20,259 million and "Decrease in accounts payable—other" of ¥1,144 million.
RECEIVABLES FROM CONTRACT WITH CUSTOMERS AND CONTRACT ASSETS
Notes receivable, receivables from contract with customers and contract assets at March 31, 2022,
were as follows:

Notes receivable—trade
Accounts receivable—trade
Contract assets

Millions of Yen
2022

Thousands of
U.S. Dollars
2022¥ 1,577
28,395
10,465$ 12,934
232,747
85,784

Chiyoda Corporation

Consolidated Financial Statements FY2021- 22 -$ 12,125

March 31, 2022

Securities classified as—
Available-for-sale—equity securities¥ 237

Millions of Yen
Unrealized
Unrealized
Gains
Losses
¥ 101

Fair
Value
¥ 338

March 31, 2021

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

Millions of Yen
Unrealized
Unrealized
Gains
Losses
¥ 286

¥ 25

Fair
Value
¥ 569

March 31, 2022

Cost
Securities classified as—
Available-for-sale—equity securities$ 1,943

Thousands of U.S. Dollars
Unrealized Unrealized
Gains
Losses
$ 833

$3

Fair
Value
$ 2,774

Information on the available-for-sale securities sold during the year ended March 31, 2022, was asfollows:
March 31, 2022

Securities classified as—
Available-for-sale—equity securities20¥ 1,720

The costs and aggregate fair values of investment securities at March 31, 2022 and 2021, were as
follows:

Cost"Account payable—other" included within "Accrued expenses and other" under "Current liabilities" forthe previous consolidated fiscal year is separately stated for the fiscal year ended March 31, 2022, as
it exceeded 5% of the total liabilities and equity. As a result of this reclassification, the amount of¥12,661 million presented as "Accrued expenses and other" under "Current liabilities" for the previous
consolidated fiscal year, is reclassified as "Account payable—other" of ¥4,200 million and "Accrued
expenses and other" of ¥8,460 million.

Thousands of
U.S. Dollars
2022

Millions of Yen
2022
2021

CHANGES IN PRESENTATION(Consolidated Balance Sheet)

6.

INVESTMENT SECURITIES- 23 -

Proceeds

Millions of Yen
Realized
Gains

¥ 230

¥ 160

Realized
Losses21

Notes to Consolidated Financial Statements

March 31, 2022

10.
Thousands of U.S. Dollars
Realized
Realized
Proceeds
Gains
LossesSecurities classified as—
Available-for-sale—equity securities$ 1,890

Assets and liabilities accounted for as financial transactions at March 31, 2022 and 2021, were as
follows:
Millions of Yen
2022
2021

$ 1,425

The impairment loss on available-for-sale securities for the year ended March 31, 2022, was¥89 million ($734 thousand).
When assessing impairment, if the available fair value at the end of the period of the securities
declines by 50% or more, compared with acquisition cost, all the corresponding securities are
impaired. In addition, in the case whereby the available fair value of the securities declined by morethan 30% but by less than 50%, the Group examines the recoverability of the fair value of the
securities and reduce the value if those securities are considered to be unrecoverable.
8.

ASSETS AND LIABILITIES ACCOUNTED FOR AS FINANCIAL TRANSACTIONSLand
Buildings and structures
Tools, furniture and fixtures
Current portion of long-term debt
11.

Location

Used Status

MyanmarBusiness assets

Buildings, structures andinvestment properties

Impairment Loss
Millions of Thousands of
Yen
U.S. Dollars¥ 426$ 3,495

The Group grouped the business assets based on business segments.
The impairment loss of ¥426 million ($3,495 thousand), including loss for buildings of ¥266 million($2,186 thousand) and investment properties of ¥159 million ($1,308 thousand), was reported onother expenses by identifying the indication of impairment considering the economic situation of
Myanmar and the prospect of it and reducing book value to the recoverable value. The recoverable
value is measured by estimating the value in use. The recoverable value is estimated to be zero as
the value of the buildings, structures, and investment properties based on future cash flows is minus.
9.

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATEDCOMPANIES
Investments in and advances to unconsolidated subsidiaries and associated companies at March 31,
2022 and 2021, were as follows:
Millions of Yen
2022
2021

22

747

5,092

Long-term loans from banks, with interest rates at
2.5% (2022) and 2.5% (2021)—Unsecured
Long-term loans from banks, with interest rates at
1.9% (2022) and 1.9% (2021)—Unsecured
Long-term loans from banks, with interest rate at
0.8% (2022) and 0.8% (2021)—Unsecured
Long-term loans from banks, with interest rate at
0.7% (2022) and 0.7% (2021)—Unsecured
Long-term loans accounted as financial transactions,with interest rate at 3.4% (2022) and3.4% (2021)—CollateralizedLong-term loans accounted as financial transactions,with interest rate at 1.1% (2022) and 1.1% (2021)—
Collateralized
Obligations under finance leases
Total
Less current portionLong-term debt, less current portion

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022¥ 20,000¥ 20,000$ 163,934

10,00010,00081,967

4,000

4,000

32,787

1,000

1,000

8,197

621

747

5,092

10,0001,279
46,900(21,269)

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

81,967
10,486384,431(174,336)¥ 25,631¥ 45,612$ 210,094

Annual maturities of long-term debt, excluding finance leases, at March 31, 2022, were as follows:
Thousands of
U.S. Dollars

Thousands of
U.S. Dollars
2022

2022
2023
2024

¥ 20,621
5,000
20,000$ 169,026
40,983
163,934

Total¥ 45,621$ 373,944¥ 3,981$ 33,049

Total¥ 4,032¥ 3,981$ 33,049- 24 -

621

Millions of Yen¥ 4,032

Consolidated Financial Statements FY2021$ 3,124
2,309

Year Ending
March 31

Investments

Chiyoda Corporation

¥ 381
311

Long-term debt at March 31, 2022 and 2021, consisted of the following:

Impairment loss on long-lived assets for the fiscal year ended March 31, 2022, was as follows:

Category ofAssets¥ 381
281

LONG-TERM DEBT

IMPAIRMENT LOSS OF LONG-LIVED ASSETSMarch 31, 2022

Thousands of
U.S. Dollars
2022- 25 -

23

Notes to Consolidated Financial Statements

12.

PLEDGED ASSETS AND SECURED LIABILITIES* This was due to the transfer of defined benefit obligation in this consolidated fiscal year, bya factor of business divestiture of IT business from Chiyoda System Technologies in lastconsolidated fiscal year.

Assets that are pledged as collateral were as follows:
Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Buildings and fixtures
Land
Investment securities¥ 1,849
4,013
37¥ 2,0294,013
37$ 15,161
32,896304

Total¥ 5,900¥ 6,080$ 48,362

Secured liabilities were as follows:
Millions of Yen
2022
2021
Current portion of long-term loans
Long-term loans¥ 10,000

Total¥ 10,000¥ 10,000¥ 10,000Thousands of
U.S. Dollars
2022$ 81,967$ 81,967

Other than the assets mentioned above, an investment in a Special Purpose Company ("SPC") isalso pledged as collateral. The investment amount is eliminated against the SPC's equity account.

(2) The changes in plan assets for the years ended March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021
Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Transfer of asset with business divestitures*
Others¥ 18,893
331
(385)
1,073
(1,272)(822)
22¥ 18,204
351
1,198
759
(1,661)41$ 154,861
2,716(3,160)
8,798(10,430)(6,740)187

Balance at end of year

¥ 17,840¥ 18,893$ 146,231* This was due to the transfer of plan assets in this consolidated fiscal year, by a factor of
business divestiture of IT business from Chiyoda System Technologies in last consolidated
fiscal year.
(3) The changes in the liability recorded in the consolidated balance sheet by using the simplified
method for the years ended March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

The investment amounts were ¥58,564 million ($480,034 thousand) and ¥55,881 million for the years
ended March 31, 2022 and 2021, respectively.
13.

RETIREMENT AND PENSION PLANS
The Company and consolidated subsidiaries have funded or unfunded defined benefit pension plansand defined contribution pension plans for employees.
Under defined benefit corporate pension plans, all of which are funded, employees are entitled tocertain lump-sum payments or pension payments based on cumulated points which are granted inaccordance with years of continuous employment, occupational classification and performance
evaluation. Under severance lump-sum payment plans, employees are entitled to certain lump-sum
payments based on salary and service period.

24

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains
Benefits paid
Transfer of debt with business divestitures*
Others¥ 18,847
856
142
(44)
(1,272)(822)
30¥ 19,809
995
175
(427)
(1,663)(42)$ 154,491
7,024
1,168
(367)
(10,430)(6,740)253

Balance at end of year

¥ 17,738¥ 18,847$ 145,399

Chiyoda Corporation

Consolidated Financial Statements FY2021- 26 -

Thousands of
U.S. Dollars
2022

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

¥ 239
111
(31)
(85)
7

¥ 381
(14)
(36)
(92)
1

$ 1,965
909
(259)
(696)
65

Balance at end of year

¥ 242

¥ 239

$ 1,984(4) Reconciliation between the liability recorded in the consolidated balance sheet and the balancesof defined benefit obligations and plan assets:

Certain consolidated subsidiaries have defined benefit corporate pension plans or severance
lump-sum payment plans, and calculate retirement benefit expenses by using the simplified method.
(1) The changes in defined benefit obligation for the years ended March 31, 2022 and 2021, wereas follows:
Thousands of
U.S. Dollars
Millions of Yen
2022
2021
2022

Thousands of
U.S. Dollars
2022

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Funded defined benefit obligations
Plan assets
Total
Unfunded defined benefit obligations¥ 18,913(19,153)(239)
380¥ 20,021(20,175)(153)
348$ 155,030(156,993)(1,962)
3,115

Net liability arising from defined
benefit obligations

¥

¥

$

- 27 -

140

194

1,152

25

Notes to Consolidated Financial Statements

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Liability for retirement benefits
Asset for retirement benefits

¥ 773
(633)

¥ 761
(566)

$ 6,342(5,189)Net liability arising from defined
benefit obligations

¥ 140

¥ 194

$ 1,152(8) Plan assetsa.

Components of plan assets
Plan assets as of March 31, 2022 and 2021, consisted of the following:(5) The components of net periodic benefit costs for the years ended March 31, 2022 and 2021,
were as follows:
Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains
Benefit costs in simplified method
Others

¥ 856
142
(331)
(317)
111

¥ 995
175
(351)
(100)
(14)
3

$ 7,024
1,168(2,716)(2,601)909

Net periodic benefit costs

¥ 461

¥ 708

$ 3,784b.

Millions of Yen
2022
2021
Actuarial losses (gains)¥ 662¥ (1,576)$ 5,428

Total

¥ 662

¥ (1,576)$ 5,428(7) Amounts recognized in accumulated other comprehensive income (before income tax effect) in
respect of defined retirement benefit plans as of March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Unrecognized actuarial gains¥ (917)¥ (1,579)$ (7,517)

Total¥ (917)¥ (1,579)$ (7,517)

2021

Debt investments
Equity investments
General accounts
Others

35 %
27
18
20

34 %
27
24
15

Total

100 %

100 %

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

(9) Assumptions used for the years ended March 31, 2022 and 2021, were set forth as follows:

Discount rate
Expected rate of return on plan assets(6) Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended March 31, 2022 and 2021, were as follows:
Thousands of
U.S. Dollars
2022

2022

2022

2021

Mainly 0.7%
Mainly 1.8%

Mainly 0.7%
Mainly 1.8%

(10) Payables to defined contribution plans of the Company and consolidated subsidiaries for theyears ended March 31, 2022 and 2021, were ¥341 million ($2,799 thousand) and ¥337 million,
respectively.
14.

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

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders' meeting. Additionally, forcompanies that meet certain criteria, an Audit & Supervisory Board may declare dividends(except for dividends-in-kind) at any time during the fiscal year if the company has prescribed soin its articles of incorporation. The Board of Directors of a company with an audit and supervisorycommittee (as implemented under the Companies Act effective May 1, 2015) may also declare
dividends at any time because such company, by its nature, meets the criteria under theCompanies Act. The Company became organized as a company with an audit and supervisorycommittee effective June 23, 2016. However, the Company does not meet all the above criteria.
The Companies Act permits companies to distribute dividends in kind (noncash assets) toshareholders subject to a certain limitation and additional requirements.

26

Chiyoda Corporation

Consolidated Financial Statements FY2021- 28 -- 29 -

27

Notes to Consolidated Financial Statements

Semiannual interim dividends may also be paid once a year upon resolution by the Board of
Directors if the articles of incorporation of the company so stipulate. The Companies Act provides
certain limitations on the amounts available for dividends or the purchase of treasury stock. The
limitation is defined as the amount available for distribution to the shareholders, but the amountof net assets after dividends must be maintained at no less than ¥3 million.
The preferred dividend annual rate for the Class A Preferred Shares is set at 3%. If there is a
shortfall in dividend on the shareholders of Class A Preferred Shares during a fiscal year, such
shortfall will be carried over into the following fiscal year or into subsequent fiscal years. The
shareholders of Class A Preferred Shares may not receive dividends from surplus in excess of
the amount of such preferred dividends. The order of preference on payment of dividends fromsurplus between the Class A Preferred Shares and common shares is as follows: the amountequal to the unpaid dividends carried over on the Class A Preferred Shares is paid first; preferred
dividends on the Class A Preferred Shares are paid next; and dividends on common shares arepaid last.
b.

Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated asa legal reserve (a component of retained earnings) or as additional paid-in capital (a componentof capital surplus), depending on the equity account charged upon the payment of such
dividends, until the aggregate amount of legal reserve and additional paid-in capital equals 25%of the common stock. Under the Companies Act, the total amount of additional paid-in capitaland legal reserve may be reversed without limitation. The Companies Act also provides that
common stock, legal reserve, additional paid-in capital, other capital surplus, and retained
earnings can be transferred among the accounts within equity under certain conditions upon
resolution of the shareholders.

c.

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

15.

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes
which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 31% for theyears ended March 31, 2022 and 2021.

The tax effects of significant temporary differences and tax loss carryforwards which resulted indeferred tax assets and liabilities at March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021
Deferred tax assets:
Tax loss carryforwards*3
Cost of revenue
Adjustment of percentage of completion for foreign
construction
Allowance for losses on construction contracts
Long-term accounts receivable
Long-term loans receivable
Accounts receivable from completed construction
contracts
Accounts receivable from completed construction
contracts and contract assets
Allowance for employees' bonus
Asset retirement obligations
Advances receipts on construction contracts
Contract liabilities
Loss on valuation of investment securities
Deposits received
Other
Subtotal of deferred tax assets
Valuation allowance for tax loss carryforwards*3
Valuation allowance for temporary differences
Subtotal valuation allowance*2¥ 56,415
10,635¥ 48,753
6,057$ 462,418
87,179

4,514
4,275
1,824
1,643

2,424
5,952
1,824
1,643

37,00635,044
14,952
13,469

2,290
1,366
960
530

1,150
465
1,695

11,201
7,870
4,345

240
97
13
2,586
85,103(56,380)(28,002)(84,382)

4,809
844
2,925
80,836(48,719)(30,992)(79,711)

1,971
797
109
21,201
697,568(462,133)(229,527)(691,660)

720

1,125

5,908

(749)
(265)
(109)

(13)
(250)
(466)

(6,141)(2,176)(897)(1,124)(730)(9,214)394$ (3,306)

Total
Deferred tax liabilities:
Deferred gains on hedges
Fixed assets as asset retirement obligations
Other
Total
Net deferred tax assets*1

Thousands of
U.S. Dollars
2022

¥

(403)

¥

*1 Net deferred tax assets and deferred tax liabilities as of March 31, 2022 and 2021, wererecorded in the accompanying consolidated balance sheet as follows:
Millions of Yen
2022
2021
Investments and other assets—Deferred tax assets
Long-term liabilities—Deferred tax liabilities

¥ 129
(533)

¥ 394

Thousands of
U.S. Dollars
2022$ 1,065(4,371)*2 The main reason for the fluctuation of the valuation allowance is the increase of the valuation
allowance for the cost of revenue.

28

Chiyoda Corporation

Consolidated Financial Statements FY2021- 30 -- 31 -

29

Notes to Consolidated Financial Statements*3 Amounts of tax loss carryforwards and related deferred tax assets by tax loss carryforwards for the years ended March 31, 2022 and 2021, were as follows:
After
1 Yearthrough
2 YearsAfter
2 Years
through
3 Years¥ 3,635(3,600)
34

¥ 64
(64)

1 Year
or
Less

After
1 Yearthrough
2 YearsAfter
2 Years
through
3 Years

¥ 376
(376)

¥ 13
(13)

¥ 3,640(3,605)34

1 Yearor
Less

March 31, 2022
Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets

March 31, 2021

¥ 147
(147)

Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets

1 Yearor
Less

March 31, 2022
Tax loss carryforwards*
Valuation allowance for tax loss carryforwards
Deferred tax assets$ 1,211(1,211)After
1 Yearthrough
2 Years$ 29,801(29,516)
285

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

After
5 Years¥ 2,418(2,418)¥ 8,979(8,979)¥ 41,169(41,169)

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

After
5 Years

¥ 236
(236)

¥ 2,242(2,242)¥ 42,244(42,244)

After
5 Years

$ 526
(526)

$ 337,453(337,453)$ 73,603(73,603)

Total¥ 56,415(56,380)34¥ 48,753(48,719)
34

Total$ 462,418(462,133)
285

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of operations forthe years ended March 31, 2022 and 2021, is as follows:
2021

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

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

Actual effective tax rate

10 %Due to reporting of the loss before income tax for this fiscal year, the Group has omitted the reporting.

Revenues from contracts with customers on a disaggregated basis for the year ended March 31,
2022, were as follows:Year Ended March 31, 2022
Reportable
Segment
Engineering

Total* Figures for tax loss carryforwards were the amounts multiplied by the effective statutory tax rate.

2022

REVENUE(1) Disaggregation of Revenue

Thousands of U.S. Dollars
After
After
After
2 Years
3 Years
4 Years
throughthroughthrough
3 Years
4 Years
5 Years$ 19,822(19,822)

16.

Millions of Yen
Other*1

Total

Geographical areas:
America
Asia and Oceania
Middle and near East and Africa
Other oversea
Japan
Revenues from contracts with customers
Other revenue¥ 54,105
57,161
82,321(150)
116,956
310,394¥ 721
721¥ 54,105
57,161
82,321(150)
117,677
311,115Total¥ 310,394¥ 721¥ 311,115

Products and services:
LNG plant
Other gas products
Oil and petrochemical
Medicine, biochemistry and generalchemistry
Environment, new energy and infrastructure
Other
Revenues from contracts with customers
Other revenue
Total¥ 155,454
4,063
56,670¥ 155,454
4,063
56,67032,68159,0692,455
310,394¥ 721
721

32,68159,0693,176
311,115¥ 310,394¥ 721¥ 311,115- 32 -

30

Chiyoda Corporation

Consolidated Financial Statements FY2021- 33 -

31

Notes to Consolidated Financial Statements

Year Ended March 31, 2022

Contract assets are the right of the Group for consideration recorded by recognizing revenue
based on the progress. At the point that the right of the Group for consideration become
unconditional, contract assets will be transferred to accounts receivable—trade.

Thousands of U.S. Dollars
Reportable
Segment
Engineering
Other*1
Total
Geographical areas:
America
Asia and Oceania
Middle and near East and Africa
Other oversea
Japan
Revenues from contracts with customers
Other revenue$ 443,487
468,537
674,769(1,236)958,6592,544,216$ 5,9115,911$ 443,487
468,537
674,769(1,236)
964,570
2,550,127

Total$ 2,544,216$ 5,911$ 2,550,127

Products and services:
LNG plant
Other gas products
Oil and petrochemical
Medicine, biochemistry and generalchemistry
Environment, new energy and infrastructure
Other
Revenues from contracts with customers
Other revenue
Total$ 1,274,214
33,309464,509$ 1,274,214
33,309464,509267,877
484,178
20,1272,544,216

267,877
484,178
26,0382,550,127$ 5,9115,911

Contract liabilities are advance receipt from customers before fulfillment of contract regarding
contract which recognize revenue based on progress. Contract liabilities will be reversed after
revenue recognition.
The Group roughly receive consideration in proportion to the satisfying a performanceobligation as conditions are defined in contracts such as milestones. No consideration contains
significant financial elements.
In this consolidated fiscal year, changes in contract assets were mainly due to revenue
recognition (increase) and transfer to accounts receivable—trade (decrease). Changes incontract liabilities were mainly due to cash receipt for advance receipts from construction
contracts (increase) and revenue recognition (decrease).
The amount of revenue recognized during this consolidated fiscal year included in the
beginning balance of contract liabilities is ¥60,707 million ($497,600 thousand).
The amount of revenue recognized during this consolidated fiscal year included in theperformance obligation satisfied before this fiscal year is ¥6,650 million ($54,512 thousand).
(4) Transaction Prices Allocated to Remaining Performance Obligations
The following table shows the summary of the transaction prices allocated to remaining
performance obligations that are unsatisfied as of March 31, 2022:
Year Ended March 31, 2022

$ 2,544,216$ 5,911$ 2,550,127*1 Division of "Other" is other business segment which is not included in reportable segment,
and contains worker dispatch business.
(2) Basic Information to Understand Revenues from Contracts with Customers
Basic information to understand revenue from contracts with customers is included in Note 2,"Summary of Significant Accounting Policies, d. Revenue Recognition."
17.

(3) Contract Balances

18.

Year Ended March 31, 2022

32

Chiyoda Corporation

Consolidated Financial Statements FY2021- 34 -

Thousands of
U.S. Dollars

Within one year
After one to five years
After five years¥ 459,913
854,866
16,233$ 3,769,782
7,007,104
133,065

Total¥ 1,331,014$ 10,909,952

RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥1,343 million ($11,012 thousand) and¥1,582 million for the years ended March 31, 2022 and 2021, respectively.

Receivables from contract with customers, contract assets and contract liabilities at the
beginning and end of the year are as follows:

Receivables from contracts with customers:
Balance at beginning of year
Balance at end of year
Contract assets:
Balance at beginning of year
Balance at end of year
Contract liabilities:
Balance at beginning of year
Balance at end of year

Millions of Yen

Millions of Yen

Thousands of
U.S. Dollars¥ 40,957
29,973$ 335,715
245,682

7,570
10,46562,05385,78474,833
143,431613,389
1,175,670

GAIN ON LIQUIDATION OF SHARES OF SUBSIDIARY AND ASSOCIATED COMPANY
As a result of the reversal of foreign currency translation adjustments accrued from the completion ofliquidation of Chiyoda (Thailand) Limited, a subsidiary of the Company and the substantial completionof liquidation procedure of Chiyoda Singapore (Pte) Limited, a subsidiary of the Company, a gain of¥588 million ($4,825 thousand) on the liquidation of shares of subsidiary and associated company
was recorded.

19.

PROJECT RELATED LOSS DUE TO SETTLEMENTS WITH CUSTOMERSAs a result of the litigation settlement of the pended lawsuit with the customer of the Ichthys LNG
projects, a reasonably estimated loss of ¥20,374 million ($167,000 thousand) was recorded as"Project related loss due to settlements with customers" and debt corresponding to the loss wasrecorded as account payable—other in current liabilities.

- 35 -

33

Notes to Consolidated Financial Statements

20.

LEASES

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

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

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

Future minimum payments under non-cancelable operating leases were as follows:
Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Due within one year
Due after one year

¥

(4)
(270)

¥ (84)
(39)

$

(35)
(2,214)Total¥ (274)¥ (124)$ (2,249)

Effective from the current fiscal year, the consolidated foreign subsidiaries excluding the ones in the
U.S., applied "Leases" (IFRS 16). The effect of these changes on consolidated financial statements
was immaterial.
21.

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments for cash surpluses, if any, invested in low-risk financial
assets, such as deposits at notice. For operating capital, the Group uses bank loans. Derivatives
are used, not for speculative purposes, but to manage exposure to the market risk of fluctuation
in foreign currency exchange rates and interest rates.
(2) Nature and Extent of Risks Arising from Financial Instruments

Foreign currency forward contracts are controlled under the internal guidelines. The position
related to particular construction contracts is identified and is reviewed. For setting andcancelling foreign currency contracts, reconciliation of the transaction and balances withcustomers' confirmation replies is made, and the transactions related to foreign currency forward
contracts are executed and accounted for under internal guidelines.
Marketable and investment securities are managed by monitoring the market values andfinancial position of issuers on a regular basis. The Group assesses the stock price risk
quantitatively so as to account for significant declines in market value as impairment losses.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on
their maturity dates. The Group manages its liquidity risk by holding an adequate volume of liquid
assets along with timely, adequate financial planning.
(4) Fair Values of Financial Instruments
Fair values of financial instruments may differ as such assessment is based on certain
assumptions including fluctuating factors, under different assumptions. Please see Note 22 forfair values for derivatives.
(a) Fair values of financial instruments

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

March 31, 2022

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

Investment securities

¥

338

¥

338

Total

¥

338

¥

338

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

¥ 96,084
20,621
25,000¥ 96,084
20,60524,907¥ (15)(92)

Total¥ 141,705¥ 141,597¥ (108)

Payment terms of payables, such as trade notes and trade accounts, are generally less than one
year. Although payables in foreign currencies are exposed to the market risk of fluctuation inforeign currency exchange rates, the position, net of receivables in foreign currencies, is hedgedby using foreign currency forward contracts.
Derivatives are foreign currency forward contracts, which are used to manage exposure tomarket risks from changes in foreign currency exchange rates of receivables and payables.
Please see Notes 2.z and 23 for more details about derivatives.

Carrying
AmountMarch 31, 2021

(3) Risk Management for Financial Instruments

Carrying
AmountCredit risk management
The Group manages its credit risk from receivables based on internal guidelines, which include
monitoring of payment terms and balances of major customers to identify the default risk ofcustomers at an early stage.
With respect to foreign currency forward contracts, the Group limits the counterparties to thosederivatives to major financial institutions that can bear losses arising from credit risk.

34

Chiyoda Corporation

Consolidated Financial Statements FY2021- 36 -

Millions of Yen
Fair Value

Millions of Yen
Fair Value

Unrealized
Gain (Loss)

Unrealized
Gain (Loss)

Investment securities

¥

569

¥

569

Total

¥

569

¥

569

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

¥ 115,187
747
45,000¥ 115,187
747
44,942¥ (57)

Total¥ 160,935¥ 160,877¥ (57)- 37 -

35

Notes to Consolidated Financial Statements

March 31, 2022

March 31, 2021
Thousands of U.S. Dollars
Carrying
Unrealized
AmountFair Value
Gain (Loss)

Investment securities

$

2,774

$

2,774

Total

$

2,774

$

2,774

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

$ 787,577
169,026
204,918$ 787,577
168,898
204,157$ (128)
(760)

Total

$ 1,161,522$ 1,160,633$ (888)Description is omitted as the carrying value of cash and cash equivalents, short-term
investments, notes and accounts receivable—trade, accounts receivable—other, jointly
controlled assets of joint venture, accounts payable—other, and income taxes payable
approximates fair value because of their short maturities.

Due in1 Yearor
Less
Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs and estimatedearnings on long-term construction contracts*
Accounts receivable—other*
Jointly controlled assets of joint venture¥ 98,709
8,250
46,586
77,23956,845

¥ 718

Total

¥ 287,632¥ 718

March 31, 2022
Thousands of U.S. Dollars
Due inDue after Due after
1 Year
1 Year
5 Yearsor
throughthroughLess
5 Years 10 Years(b) Carrying amount of financial instruments with fair values that cannot be reliably determined
Millions of Yen
2022
2021
Investment securities that do not have a quoted
market price in an active market
Investments in equity instruments that do nothave a quoted market price in an active market
Investments in unconsolidated subsidiaries andassociated companies that do not have a quoted
market price in an active market

Thousands of
U.S. Dollars
2022¥ 1,139¥ 1,148$ 9,340

1

2

10

4,032

3,981

33,049Financial instruments above are not included in "Investment securities" in "(a) Fair values offinancial instruments" as they have no market prices and also it is extremely difficult todetermine fair value.
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
March 31, 2022
Due in1 Yearor
Less

36

Millions of Yen
Due after Due after
1 Year
5 Years
throughthrough
5 Years
10 Years¥ 59,073
9,696
28,484
83,223
141,438

¥ 216

Total

¥ 321,915¥ 216

Consolidated Financial Statements FY2021- 38 -Cash and cash equivalents
Short-term investments
Notes and accounts receivable, and costs and estimatedearnings on long-term construction contracts*
Accounts receivable—other*
Jointly controlled assets of joint venture$ 484,210
79,476
233,475
682,158
1,159,330$ 1,771

Total$ 2,638,652$ 1,771* Allowance for doubtful accounts is deducted.
Please see Note 11 for annual maturities of long-term debt.
(6) Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following three levels, depending on
the observability and significance of the inputs used in making fair value measurements:
Level 1: Fair values measured by using quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2: Fair values measured by using inputs other than quoted prices included within Level 1
that are observable for the assets or liabilities, either directly or indirectly.
Level 3: Fair values measured by using unobservable inputs for the assets or liabilities.

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

Chiyoda Corporation

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

If multiple inputs are used that have a significant impact on the measurement of fair value, fairvalue is categorized at the lowest level in the fair value measurement among the levels to which
each of these inputs belongs.

- 39 -

37

Notes to Consolidated Financial Statements

March 31, 2022

(a) The financial assets and liabilities measured at the fair values in the consolidated balance
sheet
March 31, 2022

Level 1
Level 1Millions of Yen
Level 2
Level 3

Total

Investment securities—
Available-for-sale securities—
equity securities

¥ 338

¥ 338

Total assets

¥ 338

¥ 338

¥ 22

¥ 22

Total

¥ 22

¥ 22

$ 787,577
168,898
204,157$ 787,577
168,898
204,157

Total liabilities$ 1,160,633$ 1,160,633

The fair values of listed equity securities are measured at the quoted market prices. Since
listed equity securities are traded in active markets, the fair value of listed equity securities
are categorized as Level 1.
Derivatives

Level 1Thousands of U.S. Dollars
Level 2
Level 3

The fair values of foreign currency forward contracts are measured at quoted market prices
obtained from relevant financial institution, and are categorized as Level 2.

Total

Notes and Accounts Payable—Trade

Investment securities—
Available-for-sale securities—
equity securities$ 2,774$ 2,774

Total assets$ 2,774$ 2,774

Derivative transactions—
Foreign currency forward contracts

$ 183

Total

$ 183

The fair value of each group of payables and short-term bank loans with similar maturities
are measured by using discounted present value techniques considering assumptions
including expected future cash flows and discount rates taking into account maturity andcredit risk, and are categorized as Level 2.

$ 183

Current Portion of Long-Term Debt and Long-Term Debt

$ 183

The fair values of long-term debt are measured by using discounted present value
techniques considering assumptions including the total amount of principal and discountrates taking into account maturity and credit risk, and are categorized as Level 2.

(b) The financial assets and liabilities not measured at the fair values in the consolidatedbalance sheet

22.

March 31, 2022

DERIVATIVES
Derivative Transactions to Which Hedge Accounting Is Not Applied

Level 1Millions of Yen
Level 2
Level 3

Total

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

¥ 96,084
20,60524,907¥ 96,084
20,60524,907

Total liabilities¥ 141,597¥ 141,597

Consolidated Financial Statements FY2021

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

Investment Securities

Derivative transactions—
Foreign currency forward contracts

Chiyoda Corporation

Total

The following is a description of valuation methodologies and inputs used for measurementof the fair value of assets and liabilities:

March 31, 2022

38

Thousands of U.S. Dollars
Level 2
Level 3- 40 -March 31, 2022

Contract
AmountMillions of Yen
Contract
AmountFair
Due after
One Year
Value

Foreign currency forward contracts:
Selling USD/buying JPY
Selling EUR/buying JPY
Selling AUD/buying JPY
Buying USD/selling JPY¥ 9,376
16,98532,922
112

¥

Total

¥ 59,396¥ 123- 41 -

7
19
93
3

Unrealized
Gain (Loss)
¥

7
19
93
3

¥ 123

39

Notes to Consolidated Financial Statements

March 31, 2021

March 31, 2021

Contract
AmountMillions of Yen
Contract
AmountFair
Due after
One Year
Value

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

Total

¥ 92,797¥ (57)¥ (57)

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

Foreign currency forward contracts:
Selling USD/buying JPY
Selling EUR/buying JPY
Selling AUD/buying JPY
Buying USD/selling JPY$ 76,857
139,223
269,854
918

$

Total

$ 486,853$ 1,011

61
157
763
28

$

61
157
763
28

March 31, 2022

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

Foreign currency
forecasted transaction

PayablesChiyoda Corporation

Total¥ 1,091¥ 38

Other*1—
Buying USD/selling JPY

¥ 447

Total

¥ 447

Millions of Yen
Contract
AmountContract
Due after
AmountOne Year

Fair
Value
(Loss)¥ 3,009326
1,193¥ (222)
19
56¥ 4,530¥ (145)

Foreign currency
forecasted transaction

March 31, 2022

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

Foreign currency
forecasted transaction

Total
PayablesThousands of U.S. Dollars
Contract
Fair
AmountContract
Due after
Value
AmountOne Year(Loss)$ 24,670
2,679
9,784

$ (1,822)
161
466$ 37,134$ (1,194)$ 3,545

Total$ 3,545*1 Fair value of the foreign currency forward contract assigned for payables is included in the fairvalue of payables disclosed in Note 21.

¥ 432

Total

40

¥ (3)
41
1

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

Other*1—
Buying USD/selling JPY

Total
Other*1—
Buying USD/selling JPY

¥ 196
824
70

Hedged Item

$ 1,011

Derivative Transactions to Which Hedge Accounting Is Applied

Hedged Item

Fair
Value
(Loss)

Unrealized
Gain (Loss)

March 31, 2022

Contract
AmountMillions of Yen
Contract
AmountContract
Due after
AmountOne Year¥ 432

Consolidated Financial Statements FY2021- 42 -- 43 -

41

Notes to Consolidated Financial Statements

23.

OTHER COMPREHENSIVE (LOSS) INCOME

24.

The components of other comprehensive (loss) income for the years ended March 31, 2022 and
2021, were as follows:
Millions of Yen
2022
2021
Unrealized (loss) gain on available-for-sale securities:
Losses arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain on derivatives under hedge accounting:
Gains arising during the year
Reclassification adjustments to profit or loss
Adjustment to acquisition cost of assets
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income (loss) of
associates:
Income (loss) arising during the year
Total
Total other comprehensive (loss) income

¥

(62)
(96)
(159)
39

¥ 170

¥ (119)

¥ 144

170
(26)

¥ 2,899
(17)
(475)
2,405
(780)

¥

¥ 1,625¥

A reconciliation of the differences between basic and diluted net (loss) income per share ("EPS") for
the years ended March 31, 2022 and 2021, was as follows:

Thousands of
U.S. Dollars
2022
$

$

Year Ended March 31, 2022

(514)
(793)
(1,308)325

Basic EPS—Net loss available
to common shareholders
Effect of dilutive securities—
Preferred stock

(982)

28
7
(1)
35
(10)

$ 23,765(145)(3,901)
19,718(6,395)24$ 13,323¥ (4,800)(550)¥ 2,634(310)$ (39,350)(4,510)¥ (5,350)¥ 2,324$ (43,860)¥ (344)
(317)
(662)
(16)

¥ 1,624
(47)
1,576
(155)

$ (2,827)(2,601)(5,428)(132)¥ (678)¥ 1,420$ (5,561)

NET (LOSS) INCOME PER SHARE

Diluted EPS—Net loss forcomputation

Millionsof Yen
Net Loss
Attributableto Owners of
the Parent

Thousandsof Shares¥ (14,729)

258,966

2,100

736,750¥ (12,629)

995,716

Yen

WeightedAverage
SharesU.S. Dollars

EPS¥ (56.88)$ (0.47)

Please note that diluted EPS is not indicated because basic earnings per share were negative,
although there are potential common shares with dilutive effects.
Year Ended March 31, 2021

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

Millionsof YenNet Income
Attributableto Owners of
the Parent

Thousandsof Shares

Yen

WeightedAverage
SharesEPS¥ 5,893258,966¥ 22.76

2,100

715,750¥ 7,993974,716¥ 8.20

¥

79

¥

(60)

$

652

There is no dilutive effect for the year ended March 31, 2022.

¥

79

¥

(60)

$

652

In the calculation of weighted-average shares of basic and diluted net income per share (EPS), thenumber of company shares held by the trust bank is included in treasury stock that is excluded
from the total number of outstanding shares at the end of this consolidated fiscal year
(303 thousand shares and 0 shares in 2022 and 2021).

¥ (4,444)¥ 3,854$ (36,429)

The Company applies ASBJ Statement No. 29 of "Accounting Standard for Revenue Recognition"(ASBJ Statement No. 29 of March 31, 2020) and follows the transitional treatment defined by
Paragraph 84 of "Accounting Standard for Revenue Recognition" as stated in Note 4, "Accounting
Change." As a result of this adaption, net loss per share for this fiscal year was decreased by¥0.06.
25.

SUBSEQUENT EVENTS
None

42

Chiyoda Corporation

Consolidated Financial Statements FY2021- 44 -- 45 -

43

Notes to Consolidated Financial Statements

26.

SEGMENT INFORMATION(2) Information about Geographical Areas

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

(a) Revenue
Year Ended March 31, 2022
Millions of Yen

Thousands of
U.S. Dollars

Japan
Qatar
U.S.A.
Indonesia
Others¥ 117,677
81,266
54,10552,8705,195$ 964,570
666,117443,487
433,362
42,590Total¥ 311,115$ 2,550,127

Year Ended March 31, 2021

(2) Methods of Measurement for the Amounts of Sales, Profit (Loss), Assets, Liabilities, andOther Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in
Note 2, "Summary of Significant Accounting Policies."
The profit in reporting segments is based on the operating income. Intersegment income andtransfers are measured at the quoted market price.
(3) Information about Sales, Profit, Assets, Liabilities, and Other Items
Year Ended March 31, 2022

Millions of Yen
Japan
U.S.A.
Indonesia
Others¥ 146,084
120,001
38,296
11,010Total¥ 315,393

Note: Revenue is classified by country or region based on the location of construction sites.
(b) Property, plant and equipment

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

Year Ended March 31, 2022
Millions of Yen

Thousands of
U.S. Dollars

Japan
Asia
Others¥ 9,632
1,279
125$ 78,957
10,4901,030

Related Information

Total¥ 11,038$ 90,478(1) Information about Products and Services

Year Ended March 31, 2021

Year Ended March 31, 2021
The reportable segment of the Group consists of only the "Engineering" segment. Since thetravel services of Arrowhead International Corporation were transferred to another company inthe year ended March 31, 2021, and other segments have become immaterial, the Group has
omitted reporting of segment information.

The engineering business represents more than 90% of the total sales of the Group. Accordingly,
the presentation of the information about each service is not required under Japanese GAAP.

44

Chiyoda Corporation

Consolidated Financial Statements FY2021- 46 -

Millions of Yen
Japan
Asia
Others¥ 9,955
1,364
105

Total

¥ 11,426- 47 -

45

Notes to Consolidated Financial Statements

Year Ended March 31, 2021

(3) Information about Major Customers

Millions of Yen

Year Ended March 31, 2022

Name

Related Segment

Millions of Yen
Revenue

Thousands of
U.S. Dollars
Revenue

Engineering
Engineering¥ 75,437
31,521$ 618,336
258,368

Related Segment

Millions of Yen
Revenue

Engineering
Engineering¥ 55,076
34,058

Qatar Energy
BP Berau Ltd.
Year Ended March 31, 2021
Name
Gulf Coast Growth Ventures, LLC
BP Berau Ltd.

¥ 10,000
10,000*1 The guaranteed liabilities are related to the borrowings from Mitsubishi Corporation Financial &Management Services (Japan) Ltd. Regarding these guaranteed liabilities, guarantee fees havebeen paid and buildings, structures, land, investment securities and other assets have beencollateralized. The transaction amount represents the balance of liabilities corresponding to thecollateral assets as of the end of the fiscal year.
*2 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the borrowings, applicable interest rates are rationally determined upontaking into account the market rate of interest.
There are no material balances with these unconsolidated subsidiaries and associated companies asof March 31, 2022.

(4) Information about Goodwill by Reportable Segment
The reportable segment of the Group consists of only the engineering segment, and the othersegment is immaterial. Accordingly, the Group has omitted reporting of segment information.
Regarding the goodwill, which is not included in the reportable segment, its amortization in theyear was ¥29 million ($245 thousand) and its unamortized balance was ¥224 million($1,844 thousand).
27.

Guaranteed liabilities*1
Borrowings*2

RELATED PARTY DISCLOSURES

There are no material transactions of the Group with unconsolidated subsidiaries and associatedcompanies for the year ended March 31, 2022.
There are no material balances with unconsolidated subsidiaries and associated companies as ofMarch 31, 2022.

******The material transactions of the Group with the parent company and major shareholders for the years
ended March 31, 2022 and 2021, were as follows:Year Ended March 31, 2022

Guaranteed liabilities*1
Loan of funds*2
Borrowings*3

Millions of Yen

Thousands of
U.S. Dollars¥ 10,000
10,00010,000$ 81,967
81,967
81,967*1 The guaranteed liabilities are related to the borrowings from Mitsubishi Corporation Financial &Management Services (Japan) Ltd. Regarding these guaranteed liabilities, guarantee fees havebeen paid and buildings, structures, land, investment securities and other assets have beencollateralized. The transaction amount represents the balance of liabilities corresponding to thecollateral assets as of the end of the fiscal year.
*2 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the loan of funds, applicable interest rates are rationally determined
upon taking into account the market rate of interest.
*3 This was due to the transaction Mitsubishi Corporation Financial & Management Services(Japan) Ltd. Regarding the borrowings, applicable interest rates are rationally determined upontaking into account the market rate of interest.

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Chiyoda Corporation

Consolidated Financial Statements FY2021- 48 -- 49 -

47

Independent Auditor’s Report

48

Chiyoda Corporation

Consolidated Financial Statements FY2021

49

Independent Auditor’s Report50

Chiyoda Corporation

Consolidated Financial Statements FY2021

51

Independent Auditor’s Report

52

Chiyoda Corporation

Consolidated Financial Statements FY2021

53

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

CHIYODA CORPORATION

Chiyoda Global Headquarters

CONSOLIDATED FINANCIAL STATEMENTS FY2021

Printed in Japan